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HomeMy WebLinkAbout09-22-08 Special Called Regular Meeting of the La Porte Development Corporation Board of Directors STATE OF TEXAS ) ( COUNTY OF HARRIS ) ( CITY OF L A PORTE) ( LA PORTE DEVELOPMENT CORPORATION BOARD Notice is her'eby given of a Special Called Regular Meeting of the La Porte Development Corporation Board of Directors to be held on September 22, 2008 at 5:00 p.m. at La Porte City Hall Council Chambers, 604 West Fairmont Parkway, La Porte, Texas, regarding the items of business according to the agenda listed below: 1. Call to order 2. Executive session - Pursuant to provision of the Open Meetings Law, Chapter 551.071 Through 551.076, 551.087, Texas Government Code, (Consultation with Attorney, Deliberation regarding real property, deliberation regarding prospective gift or donation, personnel matters, deliberation regarding security devices, or excluding a witness during examination of another witness in an investigation, deliberation regarding Economic Development Negotiations) A. Section 551.087 - (Economic Development Negotiations) Meet with City Manager, City Attorney and Economic Development Coordinator to discuss term and conditions of a lease agreement at 117 San Jacinto 3. Reconvene to Special Called Regular Meeting 4. Consider approval or other action related to a lease agreement between the La Porte Development Corporation and East A Developments, L. P. for the location of 117 San Jacinto -R. Bottoms 5. Set date for next meeting 6. Adjournment If during the course of the meeting covered by this agenda the Council should determine that a closed or executive meeting or session of the Council should be held or is required in relation to an item noticed in this agenda, then such closed or executive meeting or sessions authorized by the Open Meetings Law, Chapter 551, Texas Government Code; will be held by the Council at that date, hour and place given in the meeting notice or as soon after the commencement of the meeting covered by the meeting notice as the Council may conveniently meet in such closed or executive meeting or session concerning any and all subjects and for any and all purposes permitted by Sections 551.071 through 551.076, and 551.087 of said Open Meetings Law, including, but not iij';)ited to: Section 551.071 - For the purpose of a private consultation with the Council's attorney on any subject or matter authorized by law. Section 551.072 - For the purpose of deliberating the purchase, exchange, lease or value of real property. Section 551.073 - For the purpose of deliberating a negotiated contract for a prospective gift or donation to the City. Section 551.074 - For the purpose of deliberating the appointment, employment, evaluation, reassignment, duties, discipline or dismissal of a public officer or employee or to hear complaints or charges against a public officer or employee, unless the officer or employee requests a public hearing. Section 551.075 - for the purpose of conferring with an employee or employees of the City, only for the purpose of receiving information from the employee or employees or to ask questions of the employee or employees; provided, however, that no discussion of public business or City policy that affects public business shall take place between the members of the City Council during the conference. Section 551.076 - To consider deployment, or specific occasions for implementation, of security personnel or devices. Section 551.087 - To discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). There may be a possible quorum of City Council present at this meeting and may participate in discussion at this meeting, however, they will not vote on matters. THIS FACILITY HAS DISABILITY ACCOMMODATIONS AVAILABLE. REQUESTS FOR ACCOMMODATIONS OR INTERPRETIVE SERVICES AT MEETINGS SHOULD BE MADE 48 HOURS PRIOR TO THIS MEETING. PLEASE CONTACT CITY SECRETARY'S OFF!CE AT 281-471-5020 OR TDD LINE 281-471-5030 F~~:O~ Martha Gillett, TRMC, CMC City Secretary 9--/'1-08 Date posted - 4 /~ .- NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE REAL PROPERTY RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. LEASE ARTICLE 1. DEFINITIONS Defined terms used in this Lease have the meanings assigned below. Other terms may be defined in connection with their use. Section 1.1 Landlord: East A Developments, L.P., a Texas limited partnership. Section 1.2 Tenant: La Porte Economic Development Corporation, a Texas non-profit corporation Section 1.3 Tenant's Address: 604 W _ Fairmont Parkway, La Porte, Texas 77571 Section 1.4 Premises: Landlord's land in Harris County, Texas, consisting of the South seven (7) feet of Lot 9, all of Lot 10, the West fifty-six and four tenths (56.4) feet of Lots 11, 12 and 13 of Block 198 of the TOWN OF LA PORTE, as recorded in the Map Records of Harris County, Texas Volume 8, Page 16. Section 1.5 Landlord's Address: 1001 Usener, Houston, Texas 77009 Section 1.6 Rent. Rent consists of the following components: 1.6.1 Base Rent: The'amount determined as follows: - 1.6.1.1 $5,200.00 per month during months 1 through 36 of the Term; and 1.6.2 Additional Rent, consisting of the following: 1.6.2.1 Taxes, Insurance Costs, and Maintenance Costs; 1.6.2.2 Other Periodic Charges (if applicable); and 1.6.2.3 Other charges designated in this Lease as Additional Rent. Base Rent during any option period will be determined in accordance with Section 1.14. Section 1.7 Permitted Use: any retail, educational, restaurant, museum, office, or municipal use. Section 1.8 Security Deposit: The sum of $5,200.00 which Tenant agrees to deposit with Landlord within thirty (30) days of the execution of this Lease. Section 1.9 THIS LEASE IS NOTBINOING UPON LANDLORD UNTil LANDLORD HAS SIGNED THIS LEASE AND THE FUll AMOUNT OF THE SECURITY DEPOSIT HAS BEEN DEPOSITED WITH LANDLORD; BUT THIS LEASE IS BINDING UPON TENANT IMMEDIATELY UPON TENANT'S SIGNATURE HERETO. Section 1.10 Term: 1.10.1 Commencement Date: The date upon which Landlord tenders the Premises to Tenant. The Term will commence on the Commencement Date and will continue for a period of 36 calendar months thereafter. The Term may be extended by the parties upon mutual written agreement. 1.10.2 If the Commencement Date is not the first day of a calendar month, the partial period between the Com mencement Date and the first day of the next succeeding calendar month shall be added to the Term so that the Term ends on the last day of a calendar month. Rent for such partial calendar month shall be prorated on a daily basis. 1.10.3 A Lease Yearcommences on the first day of the first full calendar month within the Term and ends on the last day o.f the twelfth calendar month thereafter; except that if there is a partial month a1 the beginning of the Term. the first Lease Year will include such partial calendar month (and therefore will be longer than twelve [12] months). Each subsequent Lease Year begins the day following the expiration of the prior Lease Year. The last Lease Year may contain less than 12 calendar months if number of months in the Term is not an exact multiple of 12. Section 1.11 Projected Tender Date: December 1, 2008. Section 1.12 Number Of Renewal Options: Three (3). Section 1.13 Renewal Term Duration: Twelve (12) months. Section 1.14 Renewal Rental Rate: The amount determined as follows: 1.14.1 $5,460.00 per month during the first exercise of a Renewal Option (if applicable); 1.14.2 $5,720.00 per month during the second exercise of a Renewal Option (if applicable); 1.14.3 $5,980.00 per month during the third exercise of a Renewal Option (if applicable). Section 1.1.5 Date of this Lease or Date hereof means the date that the latest of the following has occurred: (I) Landlord and Tenant have each signed this Lease; or (ii) Tenant has paid the Security Deposit to Landlord. Section 1.16 Addenda: The following Addenda is attached to this Lease and incorporated by reference: Rules and Regulations Section 2.1 Landlord. Section ~.2 If Tenant performs all its covenants and agreements, Tenant will have peaceful and quiet possession o~ the ~remises. during the Term, subject to this Lease and any mortgages, leases and other matters to which thiS Lease IS or becomes subordinate. ARTICLE 2. GRANTING CLAUSE AND QUIET POSSESSION Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Page-1- ~ ARTICLE 3. DELIVERY AND ACCEPTANCE OF PREMISES; TERM OF LEASE; HOLDOVER Section 3.1 Tenant will accept possession of the Premises when Landlord tenders the Premises to Tenant whether such tender is before, on, or after the Projected Tender Date. By occupying the Premises, Tenant'will have accepted the Premises in their then "AS IS" "WHERE IS" "WITH ALL FAULTS" condition and will have acknowledged that the Premises comply fully with Landlord's covenants and obligations hereunder, except only as to such items ("Punch Lisr) which Tenant reasonably specifies to Landlord in writing within ten (10) days after such tender as not being in compliance, and which landlord reasonably agrees are not in compliance. Section 3.2 Landlord shall not be in default for failing to tender the Premises on or before the Projected Tender Date, whether such delay is caused by a tenant or occupant of the Premises holding over, for a cause beyond landlord's reasonable control, or for a cause within landlord's control. However, if Landlord does not tender the Premises to Tenant within ninety (90) days following the Projected Tender Date, either party may terminate this Lease in which event both parties shall be released. Section 3.3 Excepting only any warranties that may be expressly set forth herein, Tenant accepts the Premises without warranty of any kind, express or implied, including, but not limited to those arising under the Texas Property Code and Texas Business and Commerce Code. LANDLORD DISCLAIMS ALL WARRANTIES REGARDING MERCHANTABILITY, PROFITABILITY, FITNESS FOR A PARTICULAR PURPOSE, HABITABILITY, SUITABILITY OR TENABILITY. Section 3.4 If Tenant remains in possession of the Premises after the Term, Tenant shall be in default hereunder, Tenant shall vacate the Premises immediately upon demand by Landlord, and Tenant shall be occupying the Premises as a holdover tenant at sufferance, from day-ta-day, at a daily rental equal to 1/15th of the total of the following: (i) Base Rent for the last month of the Term; plus (ii) Additional Rent for the last month of the Term. Payment of such daily rental will not relieve Tenant from liability for any damages Landlord may suffer on account of such holding over. Damages which landlord may suffer Include econom ic damages fOT loss of a tenant who cancels its lease because of late delivery of premises, increased costs for remodeling. etc. to attempt to mitigate any delay in delivery, and similar items in addition to damages allowed under this Lease or by law. ARTICLE 4. PAYMENT OF BASE RENT AND ADDITIONAL RENT Section 4.1 Base Rent and Additional Rent shall accrue beginning on the Commencement Date and shall be payable to landlord without demand. All Rent shall be payable at landlord's Address. Landlord may change Landlord's Address by notice to Tenant from time to time. Section 4.2 Tenant agrees and covenants to pay Base Rent to Landlord in monthly installments in the amounts specified in Section 1.10.1. The first monthly installment of Base Rent and Additional Rent is due and payable on the first day of the calendar month immediately following the month in which the Com mencement date occurs. This Installment (as well as Additional Rent due and payable at the same tim e) may be prorated as provided in Section 1.14.2. Succeeding installments of Base Rent and Additional Rent are due and payable on or before the first day of each succeeding calendar month for the entire Term. Tenant covenants and agrees to pay all Rent to Landlord or on before its due date, without deduction or offset of any nature. Section 4.3 In the event any Rent is not received within five (5) days after its due date for any reason whatsoever, a late charge penalty of $30 per day shall become due. The total amount thus due including any penalty shall bear interest at the maximum non-usurious rate which could legally be charged in the event of a loan of such Rent to Tenant in the state where the Premises are located. Any such late charge penalty or interest shall be payable on demand as Additional Rent hereunder. ARTICLE 5. MAINTENANCE COSTS, TAXES AND INSURANCE COSTS Section 5.1 The term Maintenance Costs means all costs and expenses of every kind and nature paid or incurred by Landlord in operating, managing, cleaning, equipping, repairing, replacing and maintaining the Premises, including, without limitation, costs of repainting, cleaning, sweeping and other janitorial services; landscaping; maintenance, repair and replacement of roofs, gutters, utility systems and drainage systems w.ithin. and s~rving the Premises; rental charges for machinery and equipment; Premises identification signs; directional signs and other markers; costs of personnel to implement all of the foregoing, including wages, unemployment taxes and social security taxes; personal property taxes; fees for required licenses and permits; supplies; heating, ventilating and air-conditioning systems serving the Premises; and an allowance to Landlord for supervision of the Premises in an amount equal to fifteen percent (15%) of the total of all Mainte.nance ~osts. Nothing in this Sectio.n sha.1l create an obligation upon landlord to provide any of the foregol~g servlc~s. To t~e ,extent T~~ant IS obh~ated to, or doe~, perform any of the foregoing operating, managing, cleanmg, equipping, repalrtng, replaCing and maintaining of the Premises, the cost of the same shall be solely the borne by Tenant. Section 5.2 The term Taxes means all real estate and other ad valorem taxes, assessments, parking surcharges, water and sewer rents, and other governmental impositions,levies and charges of every kind and nature whatsoever, general and special, ordinary and extraordinary levied against the Prem ises for each real esta.t~ tax year during t~.e Term, including also (i) a~y tax or excise (including any margin tax) on any Additional Rents.. and/or (II) any other tax how.everdescnbed (exceptestate, inheritance, capital gains, income [except as prOVided herein] or excess profits taxes Imposed upon Landlord) levied or assessed against Page -2- JP Landlord by any lawful taxing authority on account of Landlord's interest in this Lease, Rent or other charges reserved hereunder, as a substitute in whole or in part for, or in addition to Taxes described above. Section 5.3 . Tenant shall pay before delinquency all taxes levied against Tenant's personal property and trade fixtures in the Premises. If any such taxes are levied against Landlord or Landlord's property and Landlord elects to pay the same, Tenant shall pay to Landlord upon demand as Additional Rent that part of such taxes for which Tenant is primarily liable hereunder. Section 5.4 The term Insurance Costs means all premiums for liability insurance, fire and extended coverage insurance, rental loss and all other insurance as may be carried from time to time by Landlord covering all or any portion of the Premises. In the event that any insurance carried by Landlord covers property in addition to the Premises, Insurance Costs shall include the premium which would have been paid by Landlord for a similar policy of insurance covering only the Premises. Section 5.5 Landlord shall not be liable to Tenant or to Tenant's employees, agents, or visitors, or to any other person whomsoever, for any injury to person or damage to property on or about the Prem ises ca used by the negligence or misconduct of Tenant, its employees, subtenants, licensees or concessionaires, or of any other person entering the Premises under express or implied invitation of Ten ant, or arising out ofthe use of the Premises by Tenant and the conduct of its business therein or arising out of any breach or default by Tenant in the performance of its obligations hereunder; and Tenant hereby agrees to indemnity and hold Landlord harm less from and against any and all liability, loss, damage, expense Of claim arising out of such damage or injury or resulting from any breach, violation or nonperformance of any covenants or conditions hereof by Tenant, its agents, employees or Invitees. Section 5.6 Tenant shall procure and maintain throughout the Term a policy or policies of insurance, at its sole cost and expense, insuring both Landlord (by naming Landlord as an additional insured) and Tenant against all claims, demands or actions arising out of or in connection with the Premises, the condition of the Premises, Tenant's operations in and maintenance and use of the Premises, and Tenant's liability assumed under this Lease, the limits of such policy or pOlicies to be in an amount not less than $500,000 per occurrence and $1,000,000 aggregate for injury to persons (including death), and for damage or destruction, including loss of use thereof (Tenant's Required Insurance). All such policies shall be procured by Tenant from responsible insurance companies licensed to do business in Texas satisfactory to Landlord. Certified copies of such policies or duly executed "Certificates of Insurance: together with receipt evidencing payment of premiums therefor, shall be delivered to Landlord prior to the Commencement Date of this Lease, or prior to the date Landlord delivers possession of the Premises to Tenant, whichever is the earlier to occur. Not less than thirty (20) days prior to the expiration date of any such policies, certified copies of the renewals thereof or the duly executed .Certificates of Insurance," bearing notations evidencing the payment of renewal premiums, shall be delivered to Landlord. Such policies shall further provide that not less than thirty (30) days written notice shall be given to Landlord before such policy may be canceled or changed to reduce insurance provided thereby. If Tenant should fail to comply with the foregoing requirements relating to insurance, Landlord may obtain such insurance and Tenant shall pay to Landlord on demand, as Additional Rent hereunder, the premium cost thereof, plus an administrative fee of fifteen percent (15%). Section 5.7 All other insurance coverage shall be the responsibility of Ten ant, including, without limitation, fire and extended coverage, theft, liability, plate glass breakage, and all insurance covering Tenant's stock of goods, trade fixtures, and all other contents of the Premises. Any insurance against casualty loss which may be carried by either Landlord or Tenant shall be under the sole control of the party carrying such insurance. Tenant and its assignees hereby expressly waive any cause of action or right of recovery that it may hereafter have against Landlord for any loss or damage to the Prem ises or to the building of which the Premises are a part, or to the contents thereof belonging to Tenantcontained in said Prem ises caused by fire, explosion or other risk covered or which could be covered by a Texas Standard Form of Fire and Extended Coverage Policy, and no third party shall have any such right of recovery by way of subrogation or otherwise. Section 5.8 Tenant shall pay to Landlord monthly (as Additional Rent) an amount equal to Landlord's estimate of 1/12 of the annual Maintenance Costs, Taxes and Insurance Costs on the same day that Base Rent Is due. Landlord's initial estimate of 1/12 ofthe annual Maintenance Costs, Taxes and Insurance Costs is set forth in Paragraph 1.10.3. Landlord may, at its option, increase the amount of Tenant's monthly payment towards the annual Maintenance Costs, Taxes and/or Insurance Costs from time to time, based upon Landlord's estimate of annual Maintenance Costs, Taxes and Insurance Costs. Section 5.9 Within one hundred twenty (120) days after the end of each calendar year, Landlord shall provide Tenant with a statement showing the actual amount of Maintenance Costs, Taxes and Insurance Costs for such calendar year, itemized in reasonable detail. If the aforesaid installment payments made by Tenant for a given year are more than such annual Maintenance Costs, Taxes and Insurance Costs Landlord shall credit the amount of the excess to Tenant's next installment(s) of Additional Rent, or at landlo~d's option ~efund same to Tenant or apply any such excess against any other amount Tenant owes Landlord. If said Installment payments made are less than the actual Maintenance Costs, Taxes and Insurance Costs for such year, Te':lant shall pay Landlord the difference within thirty (30) days after receipt of said statement. In either case, nelt~er party shall be entitled to payment or credit for any amounts owing for more than two (2) years, unless claims for such amounts are made prior to the end of such two (2) year period. ARTICLE 6. USE AND OCCUPANCY OF PREMISES Page -3- .$ Section 6.1 Tenant shall use the Premises only for the Permitted Use, and for no other use or purpose without the prior written consent of Landlord. Section 6.2 Tenant shall not, without Landlord's prior written consent, keep anything within the Premises or use the Premises for any purpose which increases the insurance premium cost or invalidates any insurance policy carried on the Premises. All property kept, stored or maintained within the Premises by Tenant shall be at Tenants sole risk. Tenant agrees, at its own cost and expense, to comply with all rules, regulations and requirements of the fire insurance underwriting organization and any similar body or governmental authority having jurisdiction. Section 6.3 Tenant shall not conduct within the Premises any fire, auction, bankruptcy, "going-cut-cf- business", "Iost-our-Iease", or similar sales. Tenant shall not permit any objectionable or unpleasant odors or sounds to emanate from the Premises; nor place or permit any radio, television, loudspeaker or amplifier on the roof oroutside the Premises or where the same can be seen or heard from outside the building; nor place any antenna, awning or other projection on the exterior of the Premises; nor distribute or cause to be distributed any handbills or other advertising devices: nor do anything which would tend to injure the reputation of Landlord and/or the Premises. Section 6.4 Tenant shall take good care of the Premises and keep the same free from waste at all times. Tenant shall keep the Premises and sidewalks. service-ways and loading areas adjacent to the Premises neat, safe, clean and free from dirt or rubbish at all times. and shall store all trash and garbage within the Premises, arranging for the regular pick-up of such trash and garbage from Tenant's dumpster at Tenant's expense. Receiving and delivery of goods and merchandise and removal of garbage and trash shall be made only in the manner and areas prescribed by Landlord. Tenant shall not operate an incinerator or burn trash or garbage within the Premises. Section 6.5 Tenant shall take prudent measures to provide for the security of its employees, agents, customers. and the Premises, and shall keep some of its interior store lights lighted from dusk until dawn every day. Section 6.6 Tenant shall procure, at its sole expense, any permits required for the transaction of business in the Premises and otherwise comply with all applicable laws, ordinances, and governmental regulations. ARTICLE 7. MAINTENANCE AND REPAIR OF PREMISES Section 7.1 Landlord shall keep the foundation, the exterior walls (excluding plate glass; windows, doors, door closure devices and other exterior openings; window and door frames, molding. locks and hardware; special store fronts; lighting, heating, air conditioning, grease traps, utility meters, plum bing and other electrical, mechanical and electromotive installations, equipment and fixtures; signs, placards, decorations or advertising media of any type, and interior treatments to the exterior walls), and roof of the Premises in good repair; provided, however, Landlord shall not be required to make any repairs occasioned by the act or negligence of Tenant, its agents, employees, invitees, subtenants, licensees and concessionaires (including, but not limited to, roof leaks resulting from Tenant's installation or servicing of air conditioning equipment or any other roof penetration or placement). The provisions of this Section 7.1 are expressly subject to the provisions of ARTICLE 13 and ARTICLE 20 of this Lease. In the event the Premises should become in need of repairs required to made by landlord hereunder, Tenant shall give immediate written notice thereof to Landlord. Section 7.2 Tenant, at its sole cost and expense, shall keep and maintain the Premises in good order and in a neat. clean, safe and habitable condition. free of insects, rodents. vermin and other pests, and shall make all needed repairs and replacements, except for repairs and replacements required to be made by Landlord under the provisions of Section 7.1, ARTICLE 13 and ARTICLE 20 of this Lease. Without limiting the preceding sentence, it is understood that Tenant's responsibilities include the repair and replacement of all cracked or broken glass and all lighting, heating, air conditioning, utility meters. plumbing, water heaters, sprinklers, and other electrical, mechanical and electromotive installations, equipment and fixtures in the Premises. If any repairs or replacements required to be made by Tenant hereunder are not made within ten (10) days after written notice is delivered to Tenant by Landlord, Landlord may at its option make such repairs or replacements without liability to Tenant for any loss or damage which may result by reason thereof, and Tenant shall pay to Landlord upon demand, as Additional Rent hereunder, the cost of such repairs or replacements plus an adm inistralive fee of fifteen percent (15%). Section 7.3 Additionally, Tenant shall pay to Landlord upon demand, and without contribution from Landlord, all costs and expenses for the maintenance, repair, replacement and/or construction of any utility Ii~~s, including, wi.thou~ limitation, gas lines, sewe.r lines, water lines and drains, drainage systems, drainage plprng, water servIce pipes, underground water pipes. storm sewer systems or storm sewer piping, sanitary sewer systems and piping and any plumbing equipment, fixtures or appliances servicing the Premises as a result of any obstruction of the flow, clogging, backing-up or other malfunction or disrepair of said systems due to any act oromission of Ten ant hereunder are not made within ten (10) days after written notice delivered to Tenant by Landlord. Section 7 :4 Tenant shall install and maintain fire extinguishers and other fire protection devices, and shall comply With all requirements of any insurance policies and the insurance underwriters insuring the Building in which the Premises are located. Section 7.5 Tenant shall comply with all requirements of the Americans with Disabilities Act (Public Law 101.336 (July 26, 1990)) and the Texas Architectural Barriers Act (ArtiCle 9102, Tex. Rev. Civ. S1. (1991). Page -4- .4t1 and/or any amendments or successor statutes thereof. applicable to the Premises. Tenant agrees to indemnify, defend, and hold landlord harmless from any and all expense, liabilities. costs or damages suffered by Landlord as a result of additional obligations which may be im posed on the Prem ises under either of such acts by virtue of Tenant's operations. Tenant acknowledges that it will be wholly responsible for any accommodations or alterations which need to be made to the Prem ises to accommodate disabled employees and customers of Tenant. No provision in this Lease should be construed in any manner as permitting, consenting to, or authorizing Tenant to violate requirements under either such act, and any provisions of the lease which could arguably be construed as authorizing a violation of either act shall be interpreted in a manner which permits compliance with such act and is hereby amended to permit such compliance. Section 7.6 TENANT EXPRESSLY UNDERSTANDS AND AGREES THAT TENANT SHALL BEAR SOLE RESPONSIBILITY FOR THE SECURITY OF THE PREMISES AND DESIGNATED PARKING AREA, AND FOR THE SECURITY OF TENANT'S AGENTS, INVITEES, CUSTOMERS, VISITORS, AND ALL OTHER PERSONS WHOSOEVER WHO COME ON ORABOUT THE PREMISES. LANDLORD WILL NOT BE OBLIGATED TO PROVIDE SECURITY PERSONNEL, SECURITY LIGHTING, OR ANY OTHER FORM OF SECURITY FOR THE PREMISES, If Landlord. in its sole discretion, elects to provide security services, such action shall not constitute a waiver of this Section and the cost of such security services shall be included within Maintenance Costs. ARTICLE 8. UTILITIES Section 8.1 Tenant shall promptly pay all charges for electricity, water, gas, telephone service, sewage service and other utilities furnished to the Premises, including any charges for utilities on landlord's meters, which shall be apportioned in a manner deemed fair and reasonable by Landlord (Other Periodic Charges). In the event Tenant fails to reimburse Landlord for any Other Periodic Charges within thirty (30) days of billing, Landlord may, in addition to any other remedies herein, interrupt utility service to Tenant. landlord shall not be liable for any interruption whatsoever in utility services. ARTICLE 9. ALTERATIONS Section 9.1 Tenant shall not make any alterations, additions or improvements to the Premises without the prior written consent of Landlord. except for the installallon of unattached movable trade fixtures which may be installed without drilling, cutting or otherwise defacing the Premises. All alterations, additions. improvements and fixtures (other than Tenant's unattached movable trade fixtures) which may be made or installed by either party upon the Premises shall remain upon and be surrendered with the Premises and become the property of Landlord at the termination of this lease, unless Landlord requests their removal in which event Tenant shall remove the same and restore the Premises to their original condition at Tenant's expense. Section 9.2 All construction and removal work byTenantwithin the Premises shall be performed in a good and workmanlike manner, in compliance with all governmental requirements, laws, ordinances, orders or regulations affecting the Premises or the removal of any substances therefrom, and in full compliance with Article 28 hereof. Tenant agrees to indemnify and hold Landlord harmless from and against any and all claims, demands, losses, liabilities. damages, costs, fines or penalties resulting from or arising in connection with the performance of such work. ARTICLE 10. TENANTS FIXTURES Section 10.1 Tenant may place or install in the Premises Tenant's business fixtures and related furnishings and equipment that are not in the nature of a leasehold improvement, including but not limited to counters, shelving, floor fixtures, display cases, office furniture and safes. and shall remove same upon the expiration or termination of this Lease; provided, however, that Tenant, at Tenant's own cost and expense, shall repair any and all damage to the Premises resulting from or caused by such installation or removal. ARTICLE 11. TENANTS STORE FRONT AND SIGNS Section 11.1 Except as hereinafter expressly provided, Tenant shall not, without Landlord's prior written c:onse~t (a) ma~e any changes to the stofe front or (b) install any decorations or advertising media of any type (l~cl~~lOg ~nythlOg within the Premises t~at can be viewed from the exterior of the Premises), excepting only dIgnified dIsplays of customary type for Its display windows, which have been approved by Landlord. Section 11.2 All signs, lettering, placards, decorations and advertising media shall conform in all respects to sign criteria (Sign Criteria) established by Landlord from time to time in the exercise of its sole discretion, and shall be subject to the prior written approval of landlord as to construction, method of attachment size shape, height. lighting, color and general appearance. Tenant shall not place or allow to be used any portabl~ and/?r trailer signs anywhere within the Premises or adjacent streets or alleys. Section 11.3 All signs shall be kept in first-class condition and in proper operating order at all times, and shall be removed by Tenant upon the expiration or termination of this Lease. Se.cti~n 11.4 Tenant agree~ to install, prior to the Commencement Date, a sign conforming to the Sign ~nt~na on the frontofthe Premises. Landlord may amend the Sign Criteria. and Tenantwill modify or replace Its signs as necessary to comply with any amended Sign Criteria. ARTICLE 12. LANDLORDS RIGHT OF ACCESS: USE OF ROOF Page -5- /J# Section 12.1 Landlord shall have the right to enter upon the Premises at any time for the purpose of inspecting the same, or of making repairs to the Premises, or of making repairs, alterations or additions to the adjacent premises, or of showing the Premises to prospective purchasers, lessees or lenders. Section 12.2 Tenant will permit landlord to place and maintain "For Rent" or "For lease" signs in and about the Premises during the last ninety (90) days of the Term. Section 12.3 Use of the roof and air space above the Premises is reserved exclusively to landlord. Section 12.4 Neither Tenant nor any employee or invitee of any Tenant shall go upon the roof of the Premises except forthe sole purpose of servicing its air conditioning units or rooftop equipment; provided that this paragraph does not authorize Tenant to install any roof top equipment without the prior written consent of Landlord. In the event the installation or servicing of any roof top equipment (including air conditioning) requires a roof penetration, Tenant will pay the cost of a post-installation or post-servicing inspection by landlord'S roofing contractor and will pay the cost of any repairs which landlord's roofing contractor determines are required by reason of such installation or servicing. ARTICLE 13. DAMAGES BY CASUALTY Section 13.1 Tenantshall give immediate written notice to Landlord of any damage caused to the Premises by fire or other casualty. Section 13.2 In the event the Premises shall be damaged or destroyed by fire or other casualty insurable under standard fire and extended coverage insurance and Landlord does not elect to term inate this Lease as hereinafter provided, Landlord shall proceed with reasonable diligence and at its sole cost and expense to rebuild and repair the Premises. In the event (a) the Premises are destroyed or substantially damaged by a casualty not covered by landlord's insurance, or (b) the holder of a mortgage, deed of trust or other lien on the Premises at the time of the casualty elects, pursuant to such mortgage, deed of trust or other lien, to require the use of all or part of Landlord's insurance proceeds in satisfaction of all or part of the indebtedness secured by the mortgage, deed of trust or other lien, then Landlord may elect either to terminate this Lease or to proceed to rebuild and repair the Premises. landlord shall give written notice to Tenant of such election within sixty (60) days after the occurrence of such casualty and, if it elects to rebuild and repair, shall proceed to do so with reasonable diligence. Section 13.3 landlord's obligation to rebuild and repair under this Article shall in any event be limited to restoring the Premises to substantially the condition in which the same existed prior to such casualty. exclusive of any alterations, additions, improvements, fixtures and equipment installed by Tenant. Tenant agrees, promptly after completion of such work by Landlord, to proceed with reasonable diligence and at Tenant's sole cost and expense to restore, repair and replace all alterations, additions, improvements, fixtures, signs and equipment installed by Tenant and to reopen for business in the Premises. Section 13.4 Tenant agrees that during any period of reconstruction or repair of the Premises it will continue the operations of its business within the Premises to the extent practicable. During the period from the occurrence of the casualty until Landlord's repairs are completed, the Base Rent shall be reduced to such extent as may be fair and reasonable under the circumstances; however, there shall be no abatement of the Additional Rent provided for herein. ARTICLE 14. NON-LIABILITY FOR CERTAIN DAMAGES Section 14.1 landlord and Landlord's agents and employees shall not be liable to Tenant for any injury to person or damage to property caused by the Premises becoming out of repair or by defect or failure of any structural element of the Premises or of any equipment, pipes or wiring, or broken glass, or by the backing up of drains, or by gas, water, steam, electricity or oil leaking, escaping or flowing into the Prem ises (except where due to Landlord's willful failure to make repairs required to be made hereunder, after the expiration of a reasonable time after written notice to landlord of the need for such repairs, and then only to the extent landlord Is insured for such loss), nor shall landlord be Hable to Tenant for any loss or damage that may be occasioned by or through the acts or omissions of any other persons whomsoever, excepting only duly authorized employees and agents of Landlord. Section 14.2 Landlord shall not be liable to Tenant for losses due to theft, vandalism or burglary. or for damages or injuries done by unauthorized persons to the Premises or to any person or property located in, upon, or adjacent to the Premises. ARTICLE 15. ASSIGNMENT AND SUBLETTING Section 15.1 Tenant may sublet the Premises or any part thereof with written notice to Landlord, provided that such sublease is made expressly subject to the terms of this Lease. Tenant shall not otherwise assign or in any manner transfer this Lease or any estate or interest therein, or sublet the Premises or any part thereof, collaterally or otherwise, or grant any license, concession or other right of occupancy of any portion of the Premises without the prior written consent of Landlord. Consent by Landlord to one or more assi~nments shall not ope.rate as a waiver of landlord's rights as to any subsequent assignments. Section 15.2 If Tenant IS a ?orporation, partnership or other business entity. and if at any time during the Term or any rene~al or extension thereof the owners of a majority of the ownership interests in Tenant at the time of the execu~lon of thiS Lease cease to own a majority of such ownership interests (except as the result of tr':ln~fer by deVise or descent): ho~soever same may be brought about (including, by way of example but not Ilmltatlon, a merger or consolldatton), the cessation of ownership of a majority of such ownership interests Page -6- J# shall be deemed an assignment of this Lease by Tenant and therefore subject in all respects to the provisions of Section 15.1 above. The previous sentence shall not apply. however if at the time of the execution of this lease Tenant is a corporation or publicly traded partnership and the outstanding voting shares of capital stock of Tenant (or ownership interests in such partnership) are listed on a recognized security exchange or over- the-counter market. Section 15.3 Notwithstanding any assignment or subletting, Tenant shall at all times remain fully responsible and liable for the payment of all Rent herein specified and for compliance with all of its other obligations under this Lease (even if future assignments and sublettings occur subsequent to the ~ssignment or sublettings). Moreover, in the event that the rental due and payable by a sUb-lessee or assIgnee (or a combination of the rental payable under such sublease plus any bonus or other consideration therefor or incident thereto) exceeds the Rent payable under this Lease, then Tenant shall be bound and obligated to pay Landlord all such excess rental and other excess consideration within ten (1 O) days following receipt thereof by Tenant. Section 15.4 Tenant shall not mortgage, pledge or otherwise encumber its interest in this Lease or in the Premises. Section 15.5 ShouldTenant requestof Landlord the right to assign, Landlord may charge an amount equal to one (1) month's Base Rent and Additional Rent as an administration fee, if such request is granted. Additionally, regardless of whether Landlord consents to a proposed assignment, Tenant shall reimburse Landlord for any direct costs incurred by Landlord in connection with a request by Tenant to assign, including legal fees and expenses. ARTICLE 16. ASSIGNMENT OF LANDLORD'S INTEREST Section 16.1 Landlord shall have the right to assign, or transfer in whole or in part, every feature of Landlord's right and obligation hereunder and in the Premises, subject to this Lease. Such assignments or transfers may be made to a corporation. state or national banking association, trust, trust company. limited partnership, partnership. individual or group of individuals, and however made, shall be in all things respected and recognized by Tenant. Tenant shall not, however, be charged with notice, actual or constructive, of or with Inquiry and respect to. any such assignment or transfer u ntit Tenant is furnished with a written notice of such transfer or assignment by Landlord. Section 16.2 In the event of the transfer and assignment by Landlord of its interest in this Lease and in the building containing the Premises, Landlord shall thereby be released from any further obligations hereunder, and Tenant agrees to look solely to such successor in interest of the Landlord for performance of such obligations. Any remaining security given by Tenantto secure performance of Tenant's obligations hereunder shall be assigned and transferred by Landlord to such successor in interest, and Landlord shall thereby be discharged of any further obligation relating thereto. ARTICLE 17. SUBORDINATION; ATTORNMENT Section 17.1 Tenant accepts this Lease subject and subordinate to any mortgage, deed of trust or other lien covering the Premises as a whole. and to any renewals and extensions thereof (collectively. Mortgage). Tenant agrees that any such mortgagee shall have the right at any time to subordinate such Mortgage to this Lease; provided, however, notwithstanding that this Lease may be (or be made to be) superior to the Mortgage, the provisions of the Mortgage relative to the rights of the mortgagee with respect to proceeds arising from an eminent domain taking (including a voluntary conveyance by Landlord) and/or arising from insurance payable by reason of damage or destruction of the Premises shall be prior and superior to any contrary provisions contained in this instrument. landlord is hereby irrevocably vested with full power and authority to subordinate this Lease to any Mortgage, and Tenantagrees upon demand to execute such further instruments subordinating this Lease as Landlord may request; provided, however, that upon Tenant's written request and notice to Landlord, Landlord shall use good faith efforts to obtain from any such mortgagee a written agreement that the rights of Tenant shall remain in full force and effect during the term of this lease so long as Tenant shall continue to recognize and perform the covenants and conditions of this Lease. Upon request of any mortgagee of the Prem ises, Tenant shall agree to recognize and attorn to the purchaser at any foreclosure sale. Section 17.2 At any time when the holder of an outstanding Mortgage has given Tenant written notice of its interest in this Lease, Tenant may not exercise any remedies for default by Landlord hereunder unless and until the holder of the indebtedness secured by such Mortgage shall have received written notice of such default and a reasonable time for curing such default thereafter shall have elapsed. Section 18.1 Lease. ARTICLE 18. DEFAULT BY TENANT AND LANDLORD REMEDIES Each of the following events shall be deemed to be an Event of Default by Tenant under this 18.1.1 Tenant shall fail to pay any installment of Base Rent, Additional Rent, or any other obligation hereunder involving the payment of money and such failure shall continue for a period of ten (10) days after the date due. 18.1.2 Tenant shall fail to comply with any term, provision or covenant of this Lease other than as described in subsection 18.1.1 above, and shall not cure such failure within thirty (3D) days after written notice thereof to Tenant. Page .7. ~ 18.1.3 Tenant shall become insolvent, or shall make a transfer in fraud of creditors, or shall make anassignment for the benefit of creditors. 18.1.4 Tenant shall file a petition under any section or chapter of the Federal Bankruptcy Code, as amended, or under any similar law or statute of the United States or any State thereof, orTenant shall be adjudged bankrupt or insolvent in proceedings filed against Tenant. 18.1.5 A receiver or trustee shall be appointed for the Premises or for all or substantially all of the assets of Tenant. 18.1.6 Tenant shall abandon or vacate any substantial portion of the Premises or shall permit the Premises to remain unoccupied and unattended. 18.1.7 Tenant shall do or permit to be done anything that creates a lien upon the Premises. 18.1.8 Tenant (if Tenant is a corporation, partnership, limited liability company, or other business entity) shall fail to maintain its existence or shall fail to remain in good standing with the Texas Comptroller of Public Accounts (if applicable) or any other governmental entity with which it is required by law to remain in good standing. 18.1.9 Tenant and/or any affiliate of Tenant hereunder shall default under any other agreement between such party and Landlord and/or any affiliate of Landlord; provided, however, if such other agreement gives the defaulting party an opportunity to cure such a default within a particular time, no Event of Default will be deemed to have occurred until such time has expired without such default having been cured. Section 18.2 Upon the occurrence of any such Events of Default, in addition to all other legal or equitable remedies now or hereafter available, Landlord shall have the option to pursue any and/or all of the following described remedies without further demand or notice whatsoever: 18.2.1 Terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which he may have for possession or arrearage in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying said premises or any part thereof without being liable for prosecution or any claim for damages therefor; and Tenant agrees to pay to Landlord on demand the amount of all loss and damage which Landlord may suffer by reason of such term ination, whether through ina bility to relet the prem ises on satisfactory term s or otherwise. 18.2.2 Enter upon and take possession of the Premises, without terminating this Lease, and expel or remove Tenant and any other person who may be occupying said premises or any part thereof, without being liable for prosecution or any claim for damages therefor, and, jf Landlord so elects, relet the premises on such terms and for such purposes as Landlord may deem advisable and receive the rent therefor, and Tenant agrees to pay to Landlord on demand any deficiency that may arise by reason of such reletting, and in no event shall Tenant be entitled to any excess of any rent obtained by reletting over the sums for which Tenant is obligated hereunder. Actions may be brought from time to time to collect Rent prior to the expiration of the Term. 18.2.3 Enter upon the Premises, without being liable for prosecution or any claim for damages therefor, without being obligated to do so and without thereby waiving such default, and do whatever Tenant is obligated to do under the terms of this Lease; and Tenant agrees to relmburse Landlord on demand for all costs and expenses (including reasonable attorney's fees) which Landlord may incur in thus effecting compliance with Tenant's obligations under this Lease, and Tenant further agrees that Landlord shall nol be liable for any damages resulting to Tenant from such action. In the event Landlord elects to re-enter or repossess the Premises after Tenant's default, Tenant hereby waives notice of such re-entry or repossession and of Landlord's intent to re-enter or retake possession and grants to Landlord full and free license to alter or change locks or security devices on the Premises. Pursuit of any of the foregoing remedies shall not preclude pursuit of any other remedies herein provided or provided by law, nor shall pursuit of any other such remedy constitute a forfeiture or waiver of any Rent due to Landlord hereunder or of any damages accruing to Landlord by reason of the violation of any of the terms, provisions and covenants herein contained. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an Event of De~ault shall not be deemed or construed to constitute a waiver of such default. The loss or damage whIch Landlord may suffer by reason of termination of this Lease or the deficiency arising by reason of any reletting by Landlord as above provided, shall include the expenses of repossession, brokerage fees and the cost of any repairs, alterations, additions, or remodeling undertaken by Landlord following repossession. 18.2.4 Accelerate the Rents for the remainder of the Term and declare any and all Rents for the remainder of the Term immediately due and payable. Tenant hereby waives any right to demand and/or notice, including, but not limited to, notice of default, notice of intent to accelerate and/or notice of acceleration. ' 18.2.5 Terminate any and all remaining option periods on or under this Lease. 18.2.6 Exercise any and all other rights and remedies granted to Landlord under this Lease. 18.2.7 . The service of any notice of.termination or demand for possession, institution of any action for forCIble det~lner or the entry of a Judgment for possession in such action, or any other act or acts shall not constitute an election of remedies on the part of Landlord nor result in the termination of Tenants obligations to pay all Rent hereunder during the balance of the Term or any extension Page -6- ~ thereof. Landlord may collect and receive any Rent due from Tenant, and the acceptance thereof shall not constitute a waiver of or affect any notice or demand given, suit instituted or judgment obtained by Landlord, or be held to waive, affect, change, modify or alter the rights or remed ies which landlord has in equity or at law by virtue of this Lease. Section 18.3 In the event Landlord shall have taken possession of the Prem ises pursuant to the authority herein granted, then Landlord shall have the right to keep in place and use all of Tenant's fixtures, furniture, equipment, signs, and other personal property at all times prior to any foreclosure thereon by Landlord or repossession thereof by any third party having a prior lien thereon or claim thereto, or landlord may remove and store such items in a public warehouse or elsewhere at Tenant's expense. Section 18.4 Landlord may restrain or enjoin any breach or threatened breach of any covenant, duty or obligation of Tenant herein contained without the necessity of proving the inadequacy of any legal remedy or irreparable harm. The remedies of landlord hereunder shall be deemed cum ulative and not exclusive of each other. Section 18.5 If on account of any breach or default by Tenant 1n its obligations hereunder, landlord shall employ an attorney to present, enforce or defend any of Landlord's rights or remedies hereunder, Tenant agrees to pay any reasonable attorney's fees incurred by Landlord in such connection. ARTICLE 19. LANDLORD'S CONTRACTUAL SECURITY INTEREST Section 19.1 In addition to the statutory landlord's lien, Landlord shall have at all times a valid security interest to secure payment of all Rent and other sum s of money becoming due hereunder from Tenant, and to secure payment of any damages or loss that Landlord may suffer by reason of the breach by Tenant of any covenant, agreement or condition contained herein, upon all goods, wares, equipment, fixtures, furniture, improvements and other personal property of Tenant presently, or which may hereafter be situated on the Premises, and all proceeds therefrom, and such property of Tenant may not be removed without the consent of landlord until all arrearages in Rent as well as any and all other sums of money then due to Landlord or to become due to Landlord hereunder shall first have been paid and discharged and all the covenants, agreements and conditions hereof have been fully complied with and performed by Tenant. Section 19.2 Upon the occurrence of an Event of Default by Tenant, Landlord may, in addition to any other remedies provided herein, enter upon the Premises and take possession of any and all goods, wares, equipment, fixtures, furniture, improvements and other personal property otTenant situated on the Premises, without liability for trespass or conversion, and sell the same at public or private sale, with or without having such property at the sale, after giving Tenant reasonable notice of the time and place of any public sale or of the time after which any private sale is to be made. Unless otherwise provided by law, and without intending to exclude any other manner of giving Tenant reasonable notice, the requirement of reasonable notice shall be met if such notice is given in the manner prescribed in this Lease at least seven (7) days before the time of sale_ Any sale made pursuant to the provision of this paragraph shall be deemed to have been a public safe conducted in a commercially reasonable manner if held in the Premises or where the property is located after the time, place and method of sale and a general description of the types of property to be sold have been advertised in a daily newspaper published in the county in which the property is located, for five (5) consecutive days before the date of the sale. Landlord or its assigns may purchase any or all of same at said public or private sale, unless otherwise prohibited by law. The proceeds from any such private or public sale, less any and all expenses connected with the taking of possession, holding and selling of the property (including reasonable attorneys fees and legal expenses), shall be applied as a credit against the indebtedness secured by the security interest granted Landlord in this Article. Any surplus shall be paid to Tenant or as otherwise required by law; Tenant shall promptly pay any deficiencies. Section 19.3 This Lease shall constitute a Security Agreement under the Uniform Commercial Code. Upon request by Landlord, from time to time Tenant agrees to execute and deliver to Landlord a Uniform Commercial Code Financing Statement in form sufficient to perfect the security interest of Landlord in the aforementioned property and proceeds thereof, or Landlord may file same on behalf of Tenant. ARTICLE 20. EMINENT DOMAIN Section 20.1 If more than thirty percent (30%) of the floor area of the Premises should be taken for any public or quasi-public use under any governmental law, ordinance or regulation or by right of eminent domain or by private purchase in lieu thereof, this Lease shall terminate and all Rent shall be abated during the unexpired portion of this Lease, effective on the date physical possession is taken by the condemning authority. Section 20.2 If less than thirty percent (30%) of the floor area of the Premises should be taken as afor~said, this Lease shall not terminate; however, the Base Rent payable hereunder during the unexpired portion C?f t~is Lease shall be reduced in proportion to the area taken, effective on the date physical possession IS taken by the condemning authority. Following such partial taking, Landlord shall make all necessary repairs or alterations to make the remaining portions of the Premises an architectural whole. Section 2?3 All com pensation awarded for any taking (or the proceeds of private sales in lieu thereof) of the Premises s.hall be the property of Landlord, and Tenant hereby assigns its interest in any such award to landlord; prOVided, however, landlord shall have no interest in any award made to Tenant for Tenant's moving and relocating expenses or for the loss of Tenant's trade fixtures and other tangible personal property Page -9- /7;J if a separate award for such item s is made to Tenant. Under no circumstances, however, shall Tenant be entitled to compensation for the loss of its leasehold estate, even if such a sum is separately awarded. ARTICLE 21. LANDLORD'S CONSTRUCTION Section 21.1 The Leased Prem ises will be delivered by Landlord to Tenant with the fOllowing improvements and none other: 21.1.1 Outside walls constructed; 21.1.2 Roof Installed with ceiling provided; 21.1.3 two (2) working restrooms installed, each with one toilet and one sink; 21.1.4 Heating. ventilation, and cooling system installed; 21.1.5 Concrete slab installed; 21.1.6 Water, sanitary sewer and electrical connections available to an outside wall of the Leased Premises (Tenant to be responsible for the cost of connecting to); and 21.1.7 Windows and standard door installed. In the event that Tenant's construction calls for windows and/or doors which are in excess of the cost of standard items, such windows and/or doors shall be at Tenant's expense. Section 21.2 Landlord shall not be required to construct any other leasehold improvements as a partof this Lease. ARTICLE 22. NOTIC ES Section 22.1 Whenever any notice is required or permitted hereunder such notice shall be in writing. Any notice or document required or permitted to be delivered hereunder shall be deemed to be delivered when deposited in the United States Mail. postage prepaid. Certified Mail, Return Receipt Requested, addressed to Landlord at Landlord's Address or to Tenant at Tenant's Address (or at Landlord's option, to Tenant at the Premises). Landlord shall have the right to change Landlord's Address by notice to Tenant. and Tenant shall have the right to change Tenant's Address by notice to Tenant, but any such changed address must be within the continental United States. Notice given in any other manner shall be deemed received when actually received by the party to be notified. Such receipt may be evidenced, for example, by affidavit of the person making delivery or by confirmation by Federal Express or other package delivery service of delivery. ARTICLE 23. SURRENDER Section 23.1 At the expiration or termination of this Lease, Tenant shall surrender the Premises in good condition, including the removals and repairs required to be made by Tenant in Section 9.1, Section 9.2, Section 10.1 and Section 11.3 of this Lease, excepting only reasonable wear and tear and repairs required to be made by Landlord under this Lease. Section 23.2 Should Tenant fail to remove any of its fixtures, equipment. signs or personality at the expiration or termination of this Lease. landlord may consider same to be abandoned and remove or dispose of same without liability to Tenant, at Tenant's expense. ARTICLE 24. COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS Section 24.1 Tenantshall comply with all applicable federal, state, and local laws, ordinances, orders, rules and regulations concerning the protection of the environment (Environmental Laws) and affecting the Premises orthe operation of Tenant's business therein. Notwithstanding anything in this Lease to the contrary, Tenant shall not use, store, handle, manufacture, process or dispose of in, on or about the Premises any substance, material, chemical, gas, waste or other matter which is harmful to the environment (Hazardous Substances). Section 24.2 Tenant will not do or permit anything to be done in, on or about the Premises that would violate any Environmental Laws. Any Hazardous Substances (including any construction or remodeling wastes) shall be removed from the Premises by Tenant and shall be properly disposed of in compliance with all Environmental Laws at Tenant's sole cost and expense. Section 24.3 Tenant hereby agrees to indemnity and hold Landlord harmless of, from and against any and all claims, actions, liens, demands, costs, expenses, penalties, fines and judgments (including court costs and attorney's fees) resulting from or arising by reason of the violation of this Article or any Environmental Laws by Tenant, its agents. em ployees, contractors, subtenants, licensees or concessionaires. Section 24.4 Tenant's obligations underthis Article shall survive the expiration ortermination of this Lease. ARTICLE 25. RENEWAL OPTIONS Section 25.1 Subject to the terms of this Lease, Tenant shall have the option (each such option being a Renewal Option) to extend the Term of this Lease (if and as applicable). The number of times a Renewal Option may be exercised is equal to Number Of Renewal Options. Upon each such exercise of a Renewal Option, the Term shall of this Lease shall be extended for the Renewal Term Duration. If the Number of Renewal Options is zero or left blank, no Renewal Option shall exist. Section 25.2 In order to exercise the first Renewal Option (if and as applicable) to extend the Term of this Lease for the first Renewal Term. Tenant must: 25.2.1 Give notice to Landlord of its exercise of this option no earlier than twelve (12) months before and no later than three (3) months before the end of the Term; Page -10- Jjj 25.2.2 Not be in default under this Lease at the time of giving such notice; 25.2.3 Not have assigned this Lease at any time; and 25.2.4 Not have paid more than four (4) installments of Base Rent and/or Additional Rent later than their respective due dates. Section 25.3 In order to exercise the each additional Renewal Option to extend the Term of this Lease for such Renewal Term (if and as applicable), Tenant must comply with Section 25.2.1 through Section 25.2.4 above as of the date of such exercise and additionally must have properly and timely exercised the previous Renewal Option(s) in accordance with this Lease (as applicable). Section 25.4 In the event Tenant exercises any Renewal Option, the monthly Base Rent for the Premises during the relevant Renewal Term shall be the relevant Renewal Rental Rate. Section 25.5 Each Renewal Term shall commence on the first day following the expiration of the Term (as previously extended) and shall term inate on the last day of the relevant number of calendar month thereafter. Except as changed in the manner referred to in 25.4 above, this Lease shall be so renewed and extended on and subject to all of the same terms, provisions and conditions as are set forth in this Lease. For each Renewal Option that is exercised and not retracted, the Term shall be amended to include the that Renewal Term Section 25.6 Time is of the essence with respect to exercise of each of Tenant's Renewal Options, and if any of such options is not exercised within the time and in the manner herein stated, then such options shall expire and be of no further force or effect. If notice of exercise of any or all of Tenant's Renewal Options is given in accordance with the provisions hereof and not retracted under 25.4.2, such notice shall be effective to renew and extend this Lease for the applicable Renewal Term, without the necessity of execution of any additional agreements or instruments by either Landlord or Tenant; provided, however, that either Landlord or Tenant shall, at the request of the other, execute a document which confirms the exercise of the relevant Renewal Option, the commencement and ending dates thereof, the rental rates in effect, and such other factual information as either party reasonably requests. ART~LE26. TENANTCONSTRUCT~N Section 26.1 Tenant may construct improvements at the Premises only upon satisfying the following .conditlons precedent": (i) that Landlord and Tenant shall have mutually agreed in writing upon plans and specifications and one or more general contractors (herein sometimes referred to as "contractor") to be utilized by Tenant; (ii) that Tenant has tendered to Landlord: a true copy of a "Building Permit. (meaning all required governmental, regulatory authority and other permits, consents and letters of utility availability) for the work of Tenant and its contractors, and certificates of all insurance required to be obtained by Tenant pursuant to this Lease; provided, however, in the event that this Lease is in full force and effect but Tenant has not provided Landlord with a Building Permit within thirty (30) days after the date condition (i) is satisfied, Landlord may, in addition to other remedies which may then be available to Landlord, cancel and terminate this Lease by notice to Tenant given at any time thereafter. Upon any such cancellation and termination by Landlord. Landlord and Tenant shall each respectively be released from all further liability under this Lease, irrespective of what costs or expenses either of such parties shall have incurred prior to any such cancellation and termination. Section 26.2 If Landlord and Tenant have not agreed in writing upon said plans and specifications or one or more general contractors to be utilized by Tenant on or before the date hereof, then within thirty (30) days after landlord informs Tenant that the Premises are expected to be ready for commencement of Tenant's construction within ninety (90) days thereafter, Tenantshall cause complete plans and specifications (.working drawings") to be prepared and three (3) counterparts to be submitted to Landlord for examination along with a list of one (1) or more contractors acceptable to Tenant. If by the expiration of the aforesaid thirty (30) day period, Landlord and Tenant shall not have agreed in writing upon said completed working drawings and one or more contractors to be utilized by Tenant, then Landlord shall have the right to term inate this Lease at any time thereafter, upon which termination neither party shall have any claim against the other under this Lease irrespective of what costs or expenses, if any, either party shall have incurred in connection with this Lease prior to such cancellation. If such final working drawings are mutually approved by Landlord and Tenant in writing, such working drawings shall be initialed or signed by Landlord and Tenant and dated and designated "Tenant's Final Working Drawings., but need not be attached to this Lease. Section 26.3 Upon tender of possession of the Premises by Landlord to Tenant, Tenant shall enter the Premises and Tenant will perform such construction work and provide and install such materials as are provided in Tenant's Final Working Drawings and this Lease Agreement to be constructed or performed and installed by Tenant Tenant will also provide and install all other interior work, trade equipment, furniture, fixtures, and effects of every description necessary or appropriate for Tenant's business (other than those specifically stated in the Article 21 to be provided by Landlord) and all such items to be provided and installed by Tenant shall be new and modern and offirst-class quality. Landlord may make changes in its construction work (other than substantial changes) without Tenant's approval; Tenant will not unreasonably withhold approval of substantial changes proposed by landlord. In the event Tenant fails to satisfy the conditions precedent and also commence construction on or before the expiration of thirty (30) days from the date of tender of possession of the Premises to Tenant, then such failure shall constitute an Event of Default under this Lease and, without further notice, landlord shall have the right to either terminate this Lease at any time Page -11- III thereafter or exercise such other remedies as may be available to landlord pursuant to the terms of this lease. Section 26.4 If at any time during the course of Tenant's work at the Premises the storefront of the Premises is not fully secure, Tenant shall construct a barricade of plywood or other material approved by Landlord to secure the Premises. Section 26.5 With respect to any labor performed or materials furnished by Tenant at the Premises, the following shall apply: All such labor shall be performed and materials furnished at Tenant's own cost, expense and risk. labor and materials used in the installation of Tenant's furniture and fixtures, and in any other work on the Prem.ises performed by Tenant, will be subject to landlord's prior written approval. Any such approval of Tenant's labor shall constitute a revocable license authorizing Tenant to permit such labor to enter upon the Premises prior to the commencement of the Lease term for so long as Tenant's labor does not interfere with labor utilized by Landlord or any other tenant. With respect to any contract for any such labor or materials, Tenant acts as a principal and not as the agent of Landlord. Tenant agrees to indemnify and hold Landlord harmless from all claims (including costs and expenses of defending against such claims) arising or alleged to arise from any act or omission of Tenant or Tenant's agents, employees, contractors, subcontractors, laborers, materialmen or invitees or arising from any bodily injury or property damage occurring or alleged to have occurred incident to Tenant's work at the Premises. Tenant shall have no authority to place any lien upon the Premises or any interest therein nor in any way to bind landlord; and any attempt to do so shall be void and of no effect. Landlord expressly disclaims liability for the cost of labor performed or materials furnished by Tenant. If, because of any actual or alleged act or omission of Tenant, any lien, affidavit, charge or order for the payment of money shall be filed against Landlord, the Premises or any portion thereof or interest therein, whether or not such lien, affidavit, charge or order is valid or enforceable, Tenant shall, at its own cost and expense, cause same to be discharged of record by payment, bonding or otherwise no later than fifteen (15) days after notice to Tenant of the filing thereof, but in aU events, prior to the foreclosure thereof. All of Tenant's construction at the Premises shall be performed in strict compliance with the working drawings, all applicable building codes and other legal requirements, and in a good and workmanlike manner satisfactory to Landlord's Architect and in such manner as to not cause Landlord's fire and extended coverage insurance to be canceled or the rate therefor increased. In the performance of such work, Tenant shall not interfere with or delay any work being done by Landlord's contractors. Section 26.6 Tenant agrees that its construction at the Premises will be completed in accordance with the Tenant's Final Working Drawings. Upon completion of Tenant's construction at the Premises, Tenant shall provide to Landlord in recordable form an affidavit of completion, in accordance with Texas Property Code S 53.106, or any successor statutes. Section 26.7 In connection with any construction of improvements at the Prem ises by T enant, Tenant shall take out and maintain (or cause the contractor under its construction contract(s) to take out and maintain) public liability insurance in a minimum amount of $1 ,000,000.00 combined single limit. Said liability insurance shall name Landlord as an additional insured with Tenant (and shall contain a cross-liability endorsement) and shall be non-cancellable with respect to Landlord except upon thirty (30) days' notice to Landlord (given in the same manner as provided in this Lease) (or, at the request of Landlord, shall be in the form of a separate liability policy in which Landlord alone is the named insured). Tenant shall also take out and maintain (or cause the contractor under its construction contract(s) to take out and maintain) all builder's risk insurance to the full insurable value of improvements constructed and materials stored at the Premises. Said builder's risk insurance shall name Landlord as an additional insured and shall be non-cancellable with respect to Landlord. Certificates of all such insurance shall be delivered by Tenant to Landlord within five (5) days following Tenant's entering into any such construction contract(s) (butin all events prior to Tenant or Tenant's general contractor commencing construction). Section 26.8 All improvements constructed by Tenant at the Premises (excepting only unattached, movable trade fixtures installed by Tenant) shall, immediately upon such construction, become and remain the property of Landlord; and Tenant shall have no right, title or interest (including lien interest) therein, except only as .Tenant under the provisions of this Lease. The aforesaid improvements, if constructed by Tenant, are. not Intended a.s any natur.e of rent or c?mpensation to Landlord. Any work at the Premises involving the sprinkler system (If any) serving the Premises shall be performed by Landlord or its contractors at Tenant's cost. Tenant shall pay the cost of any such work (or reimburse Landlord therefor) within ten (10) days after delivery to Tenant of a statement therefor. ARTICLE 27. MISCELLANEOUS S~ction 27.1 N<:>thing herei~ con~ained ~h~1I be deemed or considered by the parties hereto, nor by any thlr~ party as c~eatt~g the relationshIp of prinCipal and agent or of partnership or of joint venture between the parb~~ hereto, I~ being un,derstood and agreed that neither the method of computation of rent, nor any other proVISion contaln.ed herem, nor any acts of the parties hereto, shall be deemed to create any relationship between the parties hereto other than the relationship of Landlord and Tenant. Sect~on 27.2 Tenant shall not for any reason withhold or reduce or make any off-set against Tenant's req.ulred payments of Base Rent and .Additional Rent provided in this lease, it being agreed that the obligations of Landlord hereunder are Independent of Tenant's obligations except as may be otherwise expressly provided. Page-12- 11./! /// Section 27.3 The liability of Landlord to Tenant for any default by Landlord under the terms of this Lease shall be limited solely to the proceeds of the sale on execution of the interest of Landlord in the Premises existing at the time any such liability is adjudicated; and Landlord shall not be personally liable for any deficiency or otherwise. Under no circumstances whatsoever shall Landlord ever be liable for consequential or special damages. This clause shall not be deemed to limit or deny any remedies which Tenant may have in the event of default by Landlord hereunder; which do not involve the personal liability of Landlord. Section 27.4 All remedies herein given to Landlord, including those not set forth but provided by law, shall be cumulative, and the exercise of one or more of such remedies by Landlord hereunder shall not exclude the exercise of any other consistent remedy. Any waiver by Landlord, express or implied, of any breach of any term, covenant or condition hereof, shall not be deemed a waiver of such term, condition or covenant for any subsequent breach or of any other term, covenant or condition hereof, and consent or approval shall not be deemed to waive or render unnecessary consent to approval of any sub-sequential or similar act. Acceptance of Rent by Landlord from Tenant or any assignee, subtenant, or other successor in interest of Tenant, or the payment or tender of any Rent to Landlord, with or without notice, shall never be construed as a waiver of any breach of any term, condition or covenant of this Lease. The failure of Landlord to declare any Event of Default upon the occurrence thereof or any delay by Landlord in taking action with respect thereto shall not waive such default, but Landlord shall have the right to declare such default at any time and to take such action as may be authorized hereunder to the extent herein provided. . Section 27.5 Whenever a period of time is herein prescribed for action to be taken byLandlord, Landlord shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, government laws, regulations or restrictions or any other causes of any kind whatsoever which are beyond the reasonable control of Landlord. Section 27.6 Tenant agrees that it will from time to time upon request by Landlord execute and deliver to Landlord within ten (10) days an Estoppel Letter or a statement in recordable form certifying that this Lease is unmodified and in full force and effect (or if there have been modifications that the same is in full force and effect as so modified), that Landlord is not in default hereunder (or it Tenant claims Landlord is in default hereunder, specifying the claimed default with particularity) and including such other information as Landlord may designate. Section 27.7 The laws of the State of Texas shall govern the interpretation, validity, performance and enforcement of this Lease. If any provision of this Lease should be held to be invalid or unenforceable, the validity and enforceability of the remaining provisions of this Lease shall not be affected thereby. Venue for any action under this Lease shall be in the County in which said Prem ises are located. Section 27.8 The captions used herein are for convenience only and do not limit or am plify the provisions hereof. Section 27.9 The terms, provisions and covenants contained in this Lease shall apply to, inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors in interest and legal representatives, subject to provisions contained in this Lease limiting assignment. Section 27.10 This Lease contains the entire agreement between the parties, and no agreement shall be effective to change, modify or terminate this Lease, in whole or in part, unless such is in writing and duly signed by the party against whom enforcement is sought. Section 27.11 Tenant warrants that it has had no dealings with any broker or agent in connection with the negotiation or execution of this Lease, and Tenant agrees to indemnity Landlord and hold Landlord harmless from and against any and all costs, expenses or liability for commissions or other compensations or charges claimed by any broker or agent with respect to this Lease. (The remainder of this page left intentionally blank) Page -13- /)f o~~ EXECUTED by Landlord th.)fl.day of Gel-'tt;lIl~r, 2008. EAST A DEVELOPMENTS, L.P. By: GSDB Management, LL.C., its General Partner By: .,...-' . ~ 1!7:. ' . 1 Garson Silvers, 11.. "-- Manager EXECUTED by Tenant thi~ day of September, 2008. LA PORTE ECONOMIC DEVELOPMENT CORPORATION Poc:r~ By: Name: Pat Muston Title: President ATTESTATION: Nam~iw Corporate Secretary ACKNOWLEDGMENTS STATE OF TEXAS 9 9 COUNTY OF HARRIS ~ This instrument was' acknowledged and sworn to before me on thJ~ day of September, 2008, by Pat Muston, in her capacity as President of La Porte Economic Development Corporation, Tenant. STATE OF TEXAS COUNTY OF HARRIS . !tv by Garson Silvers, in his capacity as Manager of, and on behalf of GSDB as General Partner of, and on behalf of, East A Developments, "andl PAMELA JOAHN LESTER Notary Public. State of Texas My Commission Expires JUly 08,2012 Page -14- RULES AND REGULATIONS 1. Landlord agrees to furnish Tenant two keys without charge. Additional keys will be furnished at a nominal charge. Tenant shall not change locks or install additional locks on doors without prior written consent of Landlord. Tenant shall not make or cause to he made duplicates of keys procured from Landlord without prior written approval of Landlord. All keys to the Premises shall be surrendered to Landlord upon termination of the lease. 2. Tenant shall not at any time occupy any part of the Premises as sleeping or lodging quarters. 3. Unless ancillary to a restaurant or other food service use specifically authorized in the Lease, Tenant shall not place, install. or operate on the Premises any engine, stove or machinery, or conduct mechanical operations or cook thereon or therein, or place or use in or about the Premises any explosives, gasoline, kerosene, oil, acids, caustics, or any flammable, explosive or hazardous material without written consent of landlord. 4. Landlord will not be responsible for lost or stolen merchandise, trade fixtures, furniture, furnishings, personal property, equipment, money or jewelry from the Premises regardless of whether such loss occurs when the area is locked against entry or not. 5. Vehicles must be parked entirely within the stall lines and all directional signs, arrows and posted speed limits must be observed. Parking is prohibited in areas not striped for parking, in aisles, where "No Parking" signs are posted, on ramps, in cross hatched areas, and in other areas as may be designated by Landlord. Every person is required to park and lock his vehicle. All responsibility for damage to vehicles or persons is assumed by the owner of the vehicle or its driver. 6. Tenant shall not lay floor covering within the Premises without written approval of Landlord. The use of cement or other similar adhesive materials not easily removed with water is expressly prohibited. 7. Tenant agrees to cooperate and assist Landlord in the prevention of canvassing, soliciting and peddling on or in the Premises. 8. If any governmental license or permit shall be required for the proper and lawful conduct of Tenant's business, Tenant, before occupying the Premises, shall procure and maintain such license or permit and submit it for Landlord's inspection. Tenant shall at all times comply with the terms of any such license or perm it. 9. Tenant shall not install any radio or television antenna, loudspeaker or other device on the roof or exterior walls of the Premises. 10. Tenant shall not use in the Premises any hand trucks except those equipped with rubber tires and side guards or such other material handling equipment as Landlord may approve. No other vehicles of any kind shall be kept in or about the Premises without prior written approval of Landlord. 11. Tenant shall not permit the use or the operation of any coin operated machines on the Premises, including, without limitation, vending machines, video games, pinball machines, or pay telephones without the prior written consent of Landlord. 12. It is Landlord's desire to maintain the Premises in the highest standard of dignity and good taste consistent with comfort and convenience for Tenants thereof. Any action or condition not meeting this high standard should be reported directly to Landlord. Tenant's cooperation will be mutually beneficial and sincerely appreciated, Landlord reserves the right to make such other and further reasonable rules and regulations as in its judgment may from time to time be necessary, for the safety, care and cleanliness of the Premises and for the preservation of good order therein. Page -15-