R2010-073 - 2010-06-14RESC?LUTION NO. R2�10-73
,A RESOLUTION +�F THE GITY CC}UNCIL �F T�1E CITY OF PEAR'LANa,
TEXAS AUTHORIZING A LEA�E AGREEMENT 1NITH T�iE PEAaLA�JD
�CCJ�JOMIC DEVELOPNI�NT CORPURATION.
BE IT RESOLVED BY TF�E CITY �COUNCII, OF TFkE CITY OF PEARLAEVD, TEXAS:
S�ctibrn 1. Tk�at c�r�tait� Lease Agreenient by and hetween the City af Pearland
and the Pearland Ecflnomic Development Corporation, a�opy of which is attached hereto
as Exhibit "A" and made a part h��eof far a�l purposes, is hereby approved.
Section 2. That the City M�anager or his desigc�ee is �e�eby authorized ta exec�ate
and the Ci�y Secretary to attest a Lease Ag�eem�nt with the Pearlarrd Economic
D�velopment Corporatian.
PASSED, AP'PRQVEa and A�OPTED this the 14'" day of June, A.D., 2010.
�
T�M ID
MAY�R
I�ti���9�
.��L;�r �,���;�--.,.
; ��' _ , G �.;:r
Y N G L , T �1VI C = �; �:_ : � =
I Y SECRETARY � �`
AP'�ROV�D AS TO FORN�:
�� �
DARRIN M. CQKER
CITY ATTQRI�EY
PEARLAND ECONOl'l�IC DEVELOP117ENT CORPOItAT°I4I�1
AND
CI'I'Y OF FEARLAND
LEASE AGFLEEMEl'riT
This Lease A�ree3nent ("A�ree�nent") is made and entered inta t}�is�� day of �a LL�I!rJ t=. , 2� 10, by and between the CITY C)F
FEAE�LAND, a Hame EZufe IVlunieipa] Corporation {hereinafter cal�ed "Landlo�d") and the PEARLAND �C�C?r�]ONII�
D�VELC)PMEI*�T CORPORr'�TICJN, a Texas ]Mlon-Profit Corporatio�t (hereina€ter call�d "Tenant"), Landlard and Tenant shall be
coGlectivelv referred to as "Parties".
i, Leuser! Prentises
1.andlord shall lease to Ter�ant the followin� described re��table s�aee of approxirna€ely �,2$1 square feet, �Ct�or��n as the
"Leasec� Pr•emises," alar�� titi�aEti al! improv�ments on said Leased Fremises as more particular8y described in Exhibit "A"
attached h,ereio.
"Property" En�a��s the buildin� andlor complex lcacated at [2�f� Pearlar�d Farkwa��, I'ea��and, Texas, in which thc Leas�d
Premises are locate�, inclusive of aE�y and all c�mn�ar� areas, drives, par�:ing are�s, and �valkways; and t��e Parties agree
that the rentable a�ea of ��1e Leased Premises may ��ot ec�uaR the actuaE ar uscab�e area witE�in the leased peemises whict�
n�ay irlcliic�es an allocation af common areas in the Pmperty.
Z. Term � Termrnation
The initial term of this Ag�eement st�all be Fve ($) years cornn�encin� upon ��`; � '?O1� ("Commencement Date"},
�nless sooner tei as provided in this Agreet�tent. This A�rc;ement shall auzo�naticall}r rene�r� for u�i ta tiiree (3)
additiona� five (5) year terzns ("Renerval (}ption"} unless either party provides the ather with a niinin�um one vear's
�veitter� natice that it wil� not exercise the Rer�e�va1 OptiQn. vuring any Term af this A�reerr�cnt, Lanc�lord or Tena�nt may
terminate this Agreement without e�►us� at ae7ytirr�e and for an_y reason b�{ providing the ather party o�e year's writtcn
notice of its intent to termi�l�te on a date certain {"Terminakien l�otice �eriad"). In the event of a default by Tenant, the
I.andlord may terminate this Agreeme�t in accordance with Section l0 below. Unl�ess terr�tinated as prowided above, this
Agreemes�t slla�l autaTnatica�ly terminaze �t the end of tiie twentieth (20' annivarsary of tiie Coin�fiiencement Date of the
Lease Agreement between the L�ndlard and tk�e Univ�rsity of Houston as me�re accurately described in Exhibit "B"
attached heretQ. If either part}i exereises its righ[ to terniinate, all Ee�al obligations under khis Agreertaent, shall and wvill
immediately cease ara �he ef�ectivc tern�ination �ate. The Parties further agrce that teranination of this A�reeanea�t pursuant
tc� the terms stated abave shall not be c�nsidered a breach of this Agreement.
3. Rent
a}Teriant a� ees to pay, on or before the lst d�y of each mo�nth, a sum equal to tfl2`� of
Tenant's an�ival share of the deht scrvice (10.4%) tor the Pro�erty ("Base Rent") as
describ�d in Exhibit "C" attacheci E�crek�. For example, if Tenants annual share oi� the dcbt
service for a p�rticular tiscal year is $75,000, then Tenants Base Rent for tha[ fiscal year
would be $6,25Q per month; an amaunt ec�ual to 1/12�h of $75,0�0.
b) [n additian to Base Rent, on or bef�re the 1 st day of each ro�onth, Teriai�t s�iall �ay Tenant's
share ef l7�aeratiug E;�penses { Rent"j. The Additional Rent shafl be t�ased on
trvo (`j) separate areas of the ProperCy. The first calculation of� Additiorial Rent silall reflecf
tt�c rentabie space, 3,28 B square feet, of the �.eased Premises. The second calculatic�n e,f
r�c�ditional Rent, shall re�le�t the Clpee�tin� Ex�enses for �ortions o#'the Co�ntnon A�eas as
eve[l as tha entire L.ar�c Meeting Roorn l�cated �n tlle Property, 4,G52 square feet.
,4c�ditioe�al Rent shall be carn�risect �f bc�4h calculatio►�; hativever, in the event l.and��rd
elects to l�ase the Lar,e lvleetin� Aoom to annthcr tcnant, Tesiants olbli�at9on to pay
Ac�ditional Rcnt shall be propc�rtionately reducer3 by an an�aunt ec�uat to 4,652 square feet.
Coann�oi� Areas sh�ll be the areas within the Property which are available far use ot the
ten�tnts and wh�cl� are not part of che Leased Preit�ises or thc �remises of ather tenants.
n�aeratin� �xpenses sha�C be those exp�:��scs and casts rnore partieularl}� describ�d ii�
5ectipn 6 B of Exlaibit "�3". Landlord si�all pay the ceraant an a►inual pe�cer�tage of the
Landlord's incan��: cold'ected in the form of "i�`ser• Fees" associatec� with t}ie usc o� tt�e
L,a6�e Meeting Rooa�� to offset Tenan�s seco��c� Additional lient ea9culation. The payment
shall be c�leulated b�_sed o€1 the pi'evious year's actu�l cost ofthe Large Meeting �Zoom and
associated commort area (4,fi52 squa�e feei} pa�d by tl�e landCord ir� the fortn of c�ebt service
and the Tenants seco�ld caE'culatFOn c�f additio�ial rent (``User Pee Calculatian"}. T}ae
pa}�ment shall be equal to Tenants propa�tionate share of the C�see I=ee Calculatiorl, and
payn�ent shall occur armually and be reflected 'a� the Truc-Up Statement referenced in st�Fa-
sectio�� {c) beV�aw.
c}For the remainder c�f Landlord's 2411a Fiscal Ycar (end�n� �n Se�te�nbzr 30, ?O10),
7'enant's Addiri��tal Re�tt shall bc calculated at $7.75 cfollars per gross squ�re foot annual3y.
The �7.75 rate i� detern�ined }ay cornbinin� (i) the initia� rate of $5.50 per gross square faot
iar Tenant's share of projectcd �rtility exgenscs and insurance casts, and (ii) the initial rate
c�f �2?5 per bross square foot for Tenant's share of the remainin� Operatianal E;xpenses.
Be�itu�in� �vith Lan�lords 2011 Fisca� Year, t'hc pae�ies agree tha¢ Tenartk's Addiiional Rent
shall be bas�d ��an Tenant's proporkiana9 share of Landlard's yearly fiscal o�erating
budget for the Prop�rty and �lso baseci an t�e sq�are fs�otage anzo�nts referenced in Section
3(bj abovc. Tena��t shall pay Additianal Rent in monthly installtnents equal t+� 1/1�?th of
�'er�ant's an�7ual share �f Operatin� Expenses. Within one hundred ��venty (120} days after
eaeh crf Landlard's tiscal years, La��dlord shall deliver to Tenant a statement setting farth
the actual Operating Expenses for the year, and Ter�ant's share thereof ("True-Up
Staterr�ent"). Cf Tee�ant's total �paymenEs in respect to its share of Operat�n� £x�enscs �`or
any year are 3ess fhan its actual share of sucli CGperating Expenses for that yeat, T'ena�t sha�!
pay the dtfference to Landlord within thirty (34) days a�ter Landlard's request thereof. if
such payn�ents madc by Te►iant �re more than its actual share of such Qperating and
Mainte�ance Expenscs for tltat y�ar, Lancilord shall repay such excess tc� '�'enant witi�in
tl�iriy (3(3) days. `6'here shall be rao duplication af costs for rei�rabursements in calculating
Tenant's share of suc[i Operating and Maint�nance �xpenses, and any excess retained by
Landlord at the end of the Term shall be refunded ta �enant within thi�ty (30} days atter thc
end of the Term. All �.enk shall be paad to the Lancilord at 3519 Liberty Drive, Pearland,
Texas. The Parties a�ree Rent sh�ll bc �aid n�onthly for the term of'this Agreement.
4. Use of Leaser! Prentises
The Parties agree ti�at °�enant shall use the Leased Prem9se$ exclusively fo� eonductin� the Tcnants business of Ec+anamie
T3eveEo}�tncnt and for no other purpase. lf �t a�y tinle �'enant ceas�s [o ease the Leased Pren��ses and any i�nprovemer7ts
thereon for such pur�ose, Landlord may terrt�inate this Aarcement by delivering tiwritten natice to �'enant ai 1200 Pearland
Parkway, Pearland, �exas, a�d prowiding no less than thirty (30) days far Ten,ant co rt�ove out of the Leasecl Premises.
5, Use of C`a�rmo�� Areas a�1d Meetlre Room
Tcna�t shall have t�e right to use tlte�. Comi»or� Areas of ti�e Property. Landlord will allo�� Tenant to use l,a�dlc�rd's Lar�e
Meetina Raant ("Meeting Raom"} for all mee[ings of #he Tenant dur�n� the Terrn c�f this Agrccn�ent. Tenant may also
us� the Meetir��; Ftoonro f'or ot}ter meetings s�abject ta availability. The Parties agree Lancllord will determine availabality of
thc Meeting Roa�3 and �vill be responsible for schedulin� fisage of tfi�e 1v�ceting Rot�nl by Tenant. Tenant has no authority
to grant the use ot� the M�etin� Roora� by any other persan or entity without reecivin� priar permission af the Lan�i�ord.
Tl�e p�rl:in� loi is common pa6king and can be used by visitors. Certain spaces will be reserved and marked lor
handicapped parking only. Lar�cilc�rd will desi�nate specific �arking areas to bc used by Employees crf Ten�nt. E�nployces
�rTenant wil� no� use the areas designated fc�r visitors.
Litnitatiarrs of Te�tunt
T'ena�tt will not assign or sublet thES Agr�emcnt or the 9�e�sed Yreanise, in wvh�le nr in part, �vitl�c�ut the prior �vritten
consent of La�ldlr,rd. Tenarat shall not have the rigl�Y to encutttber the lJeased Premises Fs°itl�out the priar written e�nse��C ot`
Q.andlord; provid�d ho�vever, this provisic��t shall nflt q�rohabit `Cenant f��s�� encumt���'in� any af its persc�rial E�E�c�y�erty
which can �be remc�vtd from the Lcased Pr�rnises ivithout injury� to the premiscs.
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7. ��lrrinte�rrr►rce arrd Re��rir,c
Lai�dlc�rd s��al] naaint3in the I'�crPeriy an�d Cc�anm��� Arcas (defned below) and the Leased prernises in �ocrd cc,ndition aE�d
repair. Landlarcl sl7all rnake all structural repairs tc� the btiildin�, tt3e Leased �'re�z�ises ai�d th� ComnAqn Areas, inci�idin�
hut not liEnited to all repairs to t}�e f�,tindation, I�ad bcari�i� ��,�alls, r�oot� ar7d ar7y other �tructural �i��Enbers. all cc7sfs a��d
ex�aer��es for s�ch repairs shall be included in Tenanr's Additional Rent as pror,�ided in 5ection 3 ahove. in acic�itioi�,
Lancilarc� sltall: (i) keep ttre raof af tkie bui�ciing frec of leaks and (ii) inaintain the under�raund ancl othenwise eoneea�eci
cicctrie3l and plumbittg, anc� the exterior surfacc of the o�tside �valls of the Leased Premis�:s, thc h�tilding �nd the
Property, exc@udin� �vindr�«� ;�ass in the Peemises, (iii) n�aantain all heatin�, ai� cond�tioning and electrical s}^stents
serving t�e Leased i'remiscs, the bi�ildin�, tt7e Com���an Are�S and t}�e PrU}7er�y. The terrrl '`Coniman Areas" shal] mean
the areas wittian the building and thc Pr�operty w�hich are �vailabie for use af�the T�nant in tfie t�uildin�� and which are r�oi
part of The Leased Pre�r�ises ar tl�e �remises of otlter te��ants. The Conuti�n r4rcas shall include, as appEieable, corridors,
]obbies, eEevator fc�yers, restroams, parkin� areas a[td sir��ilar areas of the I�uildin� and Propert_y designated by �,andlord
for tE�e ��e3�eral and nnn-cxcli�sive cammon use or benefit of Tenan� and oiher tenants of the building. Landlord reserves
the ri�ht to �lte�• c�r onodify tt�e buildin4� of wiaich the Leased Prenlises are a part, whera such alTerations oF moditications
are req�ired or wikl he required by �overnntental laws, co�es, ordinances, rc�ulations, ar any other applicable autitorities.
including, ��ithout iimitation, the ADA, i[� wFricli event Tenant shal�] t�� liablc for its proportiona�e share of such cost.
Tenant, at its awn Gost and expens�e, shall (i) maintai❑ all parks �f the Lea�ed Pr�mises in �oad condition, and (ii)
pro���ptly niake all necessary repairs and replacernents to the Leaser� Preniises., including, but noi limeted to, �vindows,
giass a�7d plate glass, wirins, building fire suppressian sprinkler syst�ma, exteric�r cloors, any special of�ice entry, inEerior
walls and finish wvork, interiar daors and floor cowerit�g, utility conneckic�ns, li�ht bu�bs, plumbing «�or�: and fittures,
termite and pest extern�ination, and �i�y datnage due ta vandalism ar malicicrtis mischicf, �i�nless the dama�e is due ta the
negiigence of the LandNord. Tenant a�rees, at its o�vn cost and expense, to re}�air or replace an}� damage or in,jur�� done t�
the Leased Premise�, or �ny part thereof, by Tenant or Tenant's agents, em,p9oyees, invitees, or visit�rs; provided.
ho�vever, if Tenant fails tQ make such repairs or repiaceiT�ent, within thirty (30} clays after the oceurrenee of such dama�e
or inju�y, Landlo�•d m�y, at its optio��, rnake such re�airs or replacement, and 'T'enant shal] pay the cos# thereof ta Landlord
�5�ithin tifteen ( 35} days after Tenant's receipi of a req�est froan Landlord to do so. �'enant furti�er agz'e�s not to eom�nit or
alloti�° any waste pr damage to be eammitted on any po�tion of the Le�sed Premises, and at the ternti�yatic3�1 cof tl�is
Agreement, by lapse oftin�e or other�vise, T�iiaa�k shall deliver �rp said Leased Premises to Landlard in as �c�nd cnndition
�s at the Cammencement i7ate. ordinary �vear and tear exeepted. Unless ot��erwise expressly sdp�l�ted hercin, Landlo��d
shall nc�t be req��ired to make any intp��ovements �r re�airs of any kind ar cl7aracter on or Eo the Prope�rty, or any portion
thereot; during the term ot this A� eement.
i3. Alterrrtior�s. Aclditi��rrs. Im rovenae�rts a►rd I�"i.xtrrres
'I'enant si�all Ezot n�ake ar3y altcrations, additions or im'�rove�n�r�ts to tl�e Leased Pren�ises w9thout t�e priar �s�ritten
eonsent of Landlard. Consent I'or non-str�ictural ajteratior�s, additions or im�rnWements sl�al{ not be ur�reasr�nab�y �withl�eld
ha L��7dlorc�. All str��ctural alteratioi�s, additians nr impravements made by "l�e��ant shall becc�mc !'�c properEy of L3ndlord
at tlie termir��tic�n of this A�ree.ment; 9iowever, Tenant shall prompEay remor�e, 'rf Landlord so selects, all alterations,
additions or improvements and any other property placed in or t��� ti�e Lea�ed �'remises by Tenant. `Tena��t shall repair any
dama�c caused by sucli removal crr reim6urse Landlord for sueh reasonable costs upnn �rc�of that �uch ccasts �vcre
encurred and r�aid hy L�ndlord. Tena¢it sf�al] have tl�e ri�,ht at al] tim�s tc� emct c�e� install furniture and f��tures i�� tl�e
Lcasec� Premises. Te�t�nt shal] have tS�e ri�ht to remc�yc such iterns at the [eeEnination of this A�rccmcnt, avid fixtures can
be removed tivithout steucCural daniage to the Leased Pre���isc�. Prior to vaeatina the premises upc�n termi7�ation af this
,A�reement, "1'enant must repaEr any dlma�e caused by tlie �eincrual af sucbi fixtures �r reimburse Lan�lord for such
ret�scmal�l� cc�sts upiji� proof that sucil costs were incur�'ed and p�id by L,atldlor�f.
4. Irrdemrii�c�rtinn
Tei►ant a�re�s to indeta�ni� and hold Landlnrd, its �ublic officials, the May°or, all Councilmernber's, its
sta�'f, trustees, of#icers, a�ents, re�resentatives, ar�c1 all ather persc�ns acting oi� b�ehalf �f Tenant, free
and �iarmless from and a�ainst an�,� �n�l a�l claim�, �emands, suits, ju�lgments, eosts ancl ex�enses
assertccl by �ny and all �erson ancilor entities, including, zvithaut lin�itation, any anc� all a�ents �r
-,
�
e��lc�yees of Ten�nt ar, by reason of c�eath or injury to �ersons, c�r loss or c�ama�e to property, resulting
from any� �anc� all acts c�f the Tena�t, inclucling Tenant's negligent acts �rising from or out of Tenan�'s
o�eration or c�ccup�ti�n �f the Leasec� Fremises he� or sustained in �r upon the Leased Prerr�ises.
10. Defrrr�lt. ,4batrclafrme►zt of Leaser! �ret►rises
The occurrence af a�ny one or mare of the follawin� shall constitute �n "�vent of Default" Einder th�s Le�se A�reement:
1�he tailure �f �enant to pay any Rcnt as and wher� due under this I�ease A�reernent, and th� continuance of suGE� fa�iurc
for tifteen {15) days al'ter writt�n notice thereaf fram I,andlord; or Tenant fails to perforna any of the covenants and
cc�nditi�ns required herein and such default continues for � peric�d ot'thiriy (3fl) �lays. [n the event of a default by Tenant,
I..andlord sE7a11 hawe the right to terniinate this Agreement ("Tcrminakion for Default"). Landlard shal9 �ive Ten�tat
thi���� (3Q) days wi�ritten natic� ("Default Notice I'eriod") of �ts int�ntinn tc� tcrn�inate the A�reen�e�lt pursuaa�t to ttiis
Section, �nd Tenai�t shall have such thit (30) days wit��in �vhich to curc �;ucEj defa�ilt a��d thereby avc,id termination.
Failure of Tenant ta cuTe such defai�{t withir� the Qefaulc Ne�tice Period shall result in the termin�tion of this Agreement
ienrn�diately upon the expiration o�the Qe4�ault Not�ee Period.
11. Surr�rrder af Premises; A6ctvido►iec! 1'rnpert�,
The Lcased Premises and any peemanent improvemea7ts and fixtures shall reinain tiie property of i.andlord arid shall he
restc�red tn p�ossession oF Landloed in good condition. TenanT ago�ees to promptly and pcace€ull}� deliver possession of the
Leased Premises and improvements to La�daord imn�ediately ijpon terminatian of tliis A�reen�ent. All items of persnnal
�roperty. rentaining in or ot3 the Leased Premises after the expiration of thirly (30) days followin� the date of terrnination
of this A�reem�nk sliall k�e dcemed abandoned by Tenant and Landlord may dispose of or k�;c� such persona� property as
c�esired, and �vitl�out exposure �r risk of ]iability
12. Nvtrce
�1ny ��tice send under this A�;re�ment shall be w�-itten �nd rnailec�, or sent by or persanally deiivered
to ail ofticer of the receivin� party at the following addresses:
]f te, the TeE�ant: Matt Buchanan- Executive Director
Pearland Economic Develo�ment Cc�rpc�ratian
l `?00 PearlaF�d Parkw�v
Pe�rlanci, Texas 77581
1�Vit1� a cop}� to: D�rrin Cokcr -('9t_y Attorr�e}�
City of Pearland
3519 Lit�ertv Driue
PearYand, Tcxas 77�,81
II'ta� the E�andlord: Bill Eisen- Cit}� Mana�ue�
City af Pe�rlar�d
3�k9 Liberty Drivz
Pearl�nd. "Texas 7758 [
I:ach party may chan�e sts address by �vritten notice in �ccordance wvith this 5ection, Ar�y conununicati�ri addressed and
naailed sn accardance �a�ith this SecEiob� s�lall ��e dccmed tcr be �iven wheil so m�iled, any notice so sent by facsimile sl�alV
��� dcem�;d to be gEVen �vl�en 6eceipt ot�su�ch t�ansmissit�n is �cl�now�cd�ed, ari�i an4� con�n7�anicatian so d�ai�vered in person
sl�all he dce�7��d ta br give�i �vhen recei��ted ti�r hy, or actualCy reccivcd by, an autk7orized oiticer of the 'I'e�ia�it nr tltie
L�indlord, as the casc may be.
�
14. Clioice of Law; [�enue
Tl�is Agreement is a cont�'act made under and shall, be construed in accordance with and governed by the laws of the
United States of America and the State af �'exas, and any actiqns concerning this Agceement s�all be brought in the Texas
State District Caurts of Brazoria Caunty.
15. Entire A reement
�'his written a�reement represents the f[nal agreement bekween the part��s and may not be contradicted by evidence of
prior, contemporanet�us, or suhsequent orai agreements of lC�e parkies. There are mo unwritten oral agreernents between
the parties.
EXECUT�D this �I �I day of c�U,N L, 2Q l�l
PEA lYD NOMIC DEVELOPM�IYT
Ol� �
-- — ���-
i•
�arles Gooden �r., Vice Pre d t
TEl`dANT
Dated: �'j
CITY OF RLAI'VD, T�XAS
�
Bill Eisen, City Manager
TENANT
I)ated: ���,� f�'
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Exhibit B
RESC7�Lt1Tl0�1 NO. R2009-3
A RESOLUTION O� THE CITY COUNCIL QF 1HE CITY tDF PEARLAMD,
TEXAS, AUTH�RIZING THE GITY MANAGER OR HIS DESiGNEE Ti�
ENTER INTO A �EVELOPMENT LEASE AGREEM�NT WITH THE
UNIVERSITY OF HO�1S70N SYSTEM.
BE IT R�SaLVED BY THE CIT�( COUNCIL OF 7H� CI�1( 4F PEARLAND, 7EXA5:
Section �. That certain C�evelopmer�t Lease Agreement by and between the Ci#y
of Pearlar�d and the UniWersity of Houstan System, a copy of whic� is attached hereto as
Exhib'tt "A" and made a part �ereof for al� purposes, is hereby a�tharized and appror�ed.
Section 2. That the Gity Manager or his design�e is hereby authorized to exec�te
ar�d the City Secretary to attest a Development L.ease Agreemen� with t�e University of
�iauston System.
PASS'ED, APPROVED and ADOPTED this the 5 day of January, A.D., 2009.
�
T EI�
N1AY0 R
ATTEST:
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DARRI�J IWf. �O'�(ER
CITY ATTORNEY
APPRC]VED AS TO F�RfVE:
E�hibit B
LEASE A�GR��MEI'�1T
BY AtiD BET4VE�N
T�IE CIfiY ()F PEARLANI), TE�AS
("LAN➢L()R�")
���
THE Ul`rIVERSITY O�F HOUSTON S�YSTEM
("T'EI'�1ANT")
HOU:2798? 18.12
E�hibit B
T.�.BL� OF C�NTE�ITS
Paoe
S�C. l LE.ASE� PRE;�[ISES ...................................................................................................................._..................1
SEC 2 TE�f ................................................................................................................................................................1
SEC 3 USE ...................................................................................................................................................................2
SEC � SECURITY �EPCiSIT :.....................................................................................................................................2
SEC 5 BASE ItENT : ....................................................................................................................................................2
SEC. b ADDITIONAL RE�,6T :.....................................................................................................................................3
SEC 7 T.4�;ES :.............................................................................................................................................................5
SEC. 8 w1.qI\i`tEN;�NCE :AND REPAIAS :..................................................................................................................6
SEC. 9 I�Q[�rIREi) S�RVICES, ADDLTIONAL SERVICE5 : ...................................................................................8
SEC. ]Q QLZET ENJOY1�fENT'; RIGHTS RES��4ED :...........................................................................................la
SEC 1 l Ai.TER�.TI�ONS : ..........................................................................................................................................1 !
SEC. 12 FLR:�iI�[JR.�, FI.XT�TRES AND PERSOf�TAL PROFERTY : ................................_....................................11
S�C. 13 SLBLETT1itiG .4ND ASSIGNMENT : .........................................................................................................12
SEC. 14 F1RE AND C?.SUALTY : .............................................................................................................................13
SEC. 15 Ct']NDEI�(NATIQ�l : .....................................................................................................................................14
SEC. 16 DEFr'�ULT BY TE�IfINT : ............................................................................................................................14
5EC. 17 ItE,4fEDIES OF LANDLORD UP�N E�v'ENT OF DEFAULT : ..................................................................15
SEC 14 ItEMEDIES OF LA3*�'DLORD LFPOI�' EV�'�IT C)F NONAPPROPRiATIQTd : ............................................1$
S�C. 19 L[E1v FOR,R�NT :.........................................................................................................................................1$
SEC 20 NON-W' 4T�r'ER : ............................................................................................................................................1$
SEC. ? 1 CO`viPLIA:'�ICE '4VITH LAWS : .................................................................................................................... ] $
SEC. ?2 ASSICiti�IENT BY L.��LOlZD; L1I�S�TA�'I0�3 [}F LA?tiDLORD'S LI.�BIL�xY : ................................1�
SEC. 23 SEVER,.ABiLITY : .........................................................................................................................................19
SEC 24 S{GNS : ..........................................................................................................................................................19
SEC 25 SUCCESSORS :�utiD .�.SSIG�15 :..................................................................................................................14
SEC. 26 SItBORIDIi�fATION ......................................................................................................................................19
SEC 27 T,4X PROTEST .............................................................................................................................................19
SEC ?8 HOLDING OVER :........................................................................................................................................20
S�C. 29 1ND�PEh'DEi�'�d' QF3LIGATION TO FAY RENT : ......................................................................................20
SEC. 30 INflEhfNITY: RELEF+.SE Ati`D «r'AIVGR : .................................................................................................2p
SE�. 31 Ii�7SURA�tiCE : ..............................................................................�--...............................................,.....,........21
SEC. 3? E� AGREE1�lENT :..............................................................................................................................21
SEC. 33 NflTICES :.....................................................................................................................................................21
S�:C. 34 CQI�i�iE�CE1�iENT DATE :........................................................................................................................? 1
SEC. 35 I'�ISPECTIfJN :...............................................................................................................................................?,
5��. 36 �ROKERS : ...................................................................................................................................................22
S�C. 37 ESTOPPEL CERTIFICAT�S : ......................................................................................................................22
SEC. 38 B.�`.�'KRUPT�Y :...........................................................................................................................................??
SEC. 39 FINA�'�iCI�L ST�1TE;�iENT5 :......................................................................................................................23
SEC. 40 HAZ:ARDOUS SLBST.��ICES :...................................................................................................................23
SEC. 41 hQ �1Cl�EY D�'v(:4GE5 FOR F.4iLURE TO CONSENT; WAIVER �F CERl�AIV
DA�fAGES : ..................................................................................................................................................23
SEC. 42 ACKN(���J'LEDG�SENT OF NQN-tIPPLiCABILIT�' OF DTPA: _ ............................................................2�
SEC. 43 ATTdRNEYS' FEES :...................................................................................................................................2�
SEC. 4�k ALJTHORIfiY OF TEtir�.NT :........................................................................................................................24
SEC. 4� d:�1ABILIT4' Tb PERF'dIti�f :........................................................................................................................?�
SEC. 46 JD[NT A,NI> 5���RAL TENA1�dC'Y' : ..........................................................................................................?�l
SEC. 47 EXECUTI�N OF THIS LE.�.SE AGREEI�[ENT : ........................................................................................24
SEC. �8 CQUI�;TERCL.�l�{ : ......................................................................................................................................24
5EC. 49 C.ALCUL�TION 4� TIME f'EIhI�DS : .......................................................................................................24
SEC. 50 R�NE�y'AL QPTIO�iS ..................................................................................................................................'?5
HOU 2798213.12
E�hibit B
SEC. 51 PREV.4IL[NG 1Al2K_ET RE�°I'AL RA"rE DETEIZt�1IN.AT�ON : ..............................................................2�
5EC52 PURCHASE OPT[ON ..................................................................................................................................."?6
SEC. 53 COti�iE�'�:`vCE AT EXPIRaTI�,`J OF TEI��i : .................................�,.......................,............................_25
SEC. 34 T.AX EXEi�iP�IQN OF BONDS :. ................................................................................................................26
SEC. » EXHIBITS AVD SCHEDL`LES : ..................................................................................................................�7
SCHEDULES:
SCHEDULE 1 - BASE RE�T
SCHEDULE ? - BUILDIi�IG BUDGE�`
EXHIBITS:
EXHiBIT ,rl - LEGAI. DESC1tIPTIO` (�F THE LAN�D
�XHIBIT S - FL�OR PLA.�i
EXHIBIT C - LAi'�DLQ� IMPRQV'EtwI�NTS
EXHISIT D- FOR_`�1 OF AI+�fENDI�fEti1T T� L�ASE AGR�E'riEwT
EXHISIT E - IfvSU�'�ICE REQUIfZE�iE�1TS
EXHIB[T F- ACCEP7'tL�IC� OF L£ASED PREhIISES �fE\iOR.�.NDUI�f
EX�dIBI`E' Cr - TEVAi7iT'S ES`TOPP�L CERl'[FICATE
E�HIBIT H- FORtif 4F PURCEI�SE .AGEZE�;�fEI�iT
EtI3IBI I-.AiR C��DITIQNiNG .1PdD HEATIi�'G SERVICES
HQU:2798? 13.1?
E�17ibi� B
LEASE AGR!E�1�tENT
This Lease A�reement (#his "�.ease AgreemenY'} is mad� and entered into as of �he Effzctive Date {as
deCned on the :i�nakure page attac�ied hereto) by and bet�veen the City of Pearland, Texas, a home-nule municipality
of the State af Texas, hereinafter referred to as "Landlord," and the University of Houston System, an agency and
institution of hi�her education af the State of Texas, d�erernafter referred to as "Tenant":
WIT\"ESSETH:
SEC. 1 LEr1SED PREI�IISES In consideration of the mutual ec�venants as set forth herei�r, L.andlord and Tenant
hereby a�rze as fflllo�-s:
A. Landkorc# herel�y leases to Tenant and Tenant hereb}� B�ases from I,andlord, for the rental and on
khe lerms and conditions hereinafter set farth, the following descril�ed property (thz "�.eased Prert�ises"}:
approximately 22,616 Rerstable Square Feet (as defi�ed an Sc�edule l ) of the app�oximately 3Q,659 square foot
building to be consCnucted 6y Landlord (the "Building") on the real prope�ty described on EYhibit A hereta {the
"Property"), in accordance with Che terms of this Lease AgreemenE, as mar3ced an the #]oor plan attached �ereto as
Eshibit B . The final deternu�tation af the Rentabl� SquaPe Feet of the Leased 1'rerr►ises cvill be re�ade according to
5chedule 1. Landlord and Tenant hereby agree that thrs Lease .Agreement is a�ade pursuant [o the authority of
5ection 27?.00l�j1, Texas Local Gavernsnent Code, as arnended, to protnote a public pucpose relatzd to higher
education and that the Rent {as de�neci herein) ta bz caltect�d hereunder by Landlord tnay or may no[ r�present [he
fair market rent value af the Leased Premises.
B. So CanD as Tenant is not in default under this Lease Ageeemeot on the date or dates such optian is
exercised, a�id un]ess othenvise agreed to by Landlord and Tenanc, Tenant shall ttave the right to expanci the Leased
Fremises (the "Erpansion Qption") ta include (i} alt, but no� less than all, of the Rentable 5quare Feet in the
Buildutg wi�ich Land3ord occupies or int�nds to occupy, ancUor (ii) all, but not less than all, of the Rentable �q�are
Feet in t�e Br�ildinQ which €s 1ea�ed to any ather pariy, including the Pearland Economic Developmen[
Cof Tenant shall provide the City with no less than one (1} year's u�citten not�ce o� its intentic�n co
e�cercise the Expan�i�n Option and tl�e details of the additional Rentable Square Feet that Tenant intends to occupy
(the "E�pansi4n Psemises"�. If Tenant exercises the Expansion Option, La.ndlord and Tenant s�all promptly
execut� an appropriat� arn�ndment to tiiis Lease Agreement (the "Amendmenk") a�nending the Leased Premises to
include the �xpar�sion Prentises and providing �or khe date (the "Espansian Comrnencement 1}ate") on ti�,�hich
Tenan[ may occupy the Expansion Fremises. Frorn 3nd after the Expanst`on Comrnencetnent Date, {i} the �eased
Premises shall be expanded to inciude the Espansion Fremises for aIl purpc�ses of this Lease Agreement, includin�
calculatiijn af Base RenC aecording to S�hedule 1, and (ii) renant shall l�ase the Expansion Premi�es frorn
Landlord on the terms and conditions set forth in tt�is [.ease Agreerrtent.
C. Landlord, at Landlord's es�ense, tivill conssnuct the Landlord Impravem�nts (as c#efinzd in
Exhik�it C in accordance with [he teems and provisions of Eshibit C aCtached hereto.
SEC. Z TER��:
A. The term af thi, Lease Agreerisent {tfte "`Ter�n"} shall comrnence on the datc Substantial
Completion {as defined in Exhibit Cl occurs (such date bein� herein referred to as the "Comrnencement Date")
and, unless sooner terminat�d car renewed and extended in a�:cordance with t]te terms and canditions set Eorth
herein, shall expire at 1�:59 p.m. o❑ th� day precedin� the tvventieth {?Q�'} aruiiversary thereof (the "�xpiratian
Date"). "Lease Year" shall be defined �s each t�welve cansecutive mont� p�riod throu�hout the Term, beginning
�n the Comsr►en�ement Date and each annivzrsary thereof.
B. This Lesse Agreement shall be effective as c�f the '�ffective i7ate and in tt3e e��ent Landlard
canse�tti to Tenant or its agents, e�iyployees or cantractors enterina the Leased Premises priar to the
Commencement Date, such entry shall be sublect t� the terms ar�d cdnditiuns esf this Lease Agreement, e�cept t}�at
tE�e Reni (as �erei�af�er definecE) slia�l nat eomrnence to accru� as a result of such entry until the Commencement
Date.
I
HOU:279821$. I?
E�l`�i�it B
SEC. 3 C:SE: The Leased Premises shall 6e used and occupied by T�oant (and any c+f its permit�ed sut�tenants and
assignee�) solely as an instituti�n of �ii�her education, as defin�d in Section 61.D03, T�xas �ducation Ccacfe, as
amended, and for no other purpQSe. As a material con�iderataon for �an�lord's execution �f this Lease A3reement,
Tenant (and any of its permitted subtenants and assignees) sharl maintam, apen and operate its business in the
Leas�d Premise� during, at a minin�um, all normal business hours of l�he Buildit�a throughout the Term of this Lease
:i.green�ent. �iutwithstandin� an}°thing contained in [his Lease Aereemeit[ to tl�e coqtrary, Tenant wi4l nae use,
occupy, or germit the use or occupancy of the Leased Premises F�or any purpose which is, dsrectly or indirectly.
f�rbidcien by la�v, ordinance, ar �overfutiental or municipal reguCat'san or prder, or u�rhich may be dangerous to life.
Vimb or prop�rty, or p�rmit th� maintenance of any public or private nuisanee. Tenant will not permit anything to be
done tvhich v�-ould increase the fire and extended coverage insuranee rate on the Buildin� or conten�s, anci if there is
any increase in such rates by r�ason of acts Qf Tenant, then Tenant agrees to pay sucll increase promptly ugan
dema�d therefar by Landl�rd.
SEC. � SECURIT4` DEPOSIT; [RESERVE�.]
SEC. 5 BASE R�[^!T:
A. Tenant shall pay to Landlord in ad��ance, w�ithot�t demand, ded�ction or set off, a sum (t�e "Base
Rent" and, to�elher with Additional Rent (defined herei�), "Re�Y'} equa! to the amounCs for the cprrespondine
intervaEs as indicated on Sc6�dule l attached heretc�. �
S. After th� Constcuction Dra«-ings (�efined in Ethibit C have been appraved in accordance �vith
Section 1B. of Exhibit C, T�nant tnay rnak� written requests for modificatinns to t�Ze Construction Dra�,vin's,
specifyine in detail the rec�uested modification (each, a"'T'enant Request"1. 5ubject to S�ction �C. laelo�a�,
Landlord sha11 use reaso�ia'ble effarts to accotnmadate [he Tenant Request, and shall provide Tenant with a written
response [a "Lan�lqrd Response") E�,�sthin fi4�e (5} buseness d:avs of Landlord's reeeipt of the Tenant Request
inc�icating:
(i) the ne�v Building Budget (defined 6elo«') associated �r�ith the Tenan� Request {subject to
the linvtation set fonh in Section 5C. below);
(ii) the �mc�unt, if �ny, that the increase in Burldino Bu��et resultin� frorz� the Tenant
E�equest ecc:eeds the Building Bud;�et Cap (defined bzlow); and
R�quest.
(iiil the nun�ber of days of Tenanc Delay {defined in E�hibit C associated with the Tenant
Land6ord's indi..akion in the Lantflord Respon5e as to tfie ne�w Buildin� Budgei and ttae nuniber of days of
Tenant �elay shall be ba�ed upun dze reasonable detennination af [he in�rease or decrease associated r��ith t9�e
Tenant Request by the subcontractars of Landlord �vha are canstructing the �3uildine.
"Buildin� B�d�et" shall mean the line i�em bud�et attac�ted hereto as 5ehedul� 2.
C. itiot�ti�it4�standin� anythin� to tl�e contrary in Section SB. ab���e, Tenant and �andlqrd hereby agree
that Landlord st�a14 nat be required to accummodate any Tenaru Request that ����uld, if acce�ted by �andlurd, result
in th� Buildiai2 Budoet exceedin� �11,�9�.4C11 (the "Buildi�tg Budget Cap") unless Tenant pays to Lancilorc#
immediately upon Tenant's delivery of the Amendment {dzfined belo��,�) assaciated �.vith such Tenant R�quest, the
differen�e between tha ne�u �uilding Budcet resulring from the Tenant Request and t�e Building Budget Cap.
Lan�€ard hereby ca��enant� anci agrees to ap�ly any funds deposited �vith it pursuant to this See[ion SC. to the
payment of Building c�sts as and w�izn duc.
D. flfter receiw�ing the Landlord Response, should Tenant desise to r�iake tkie modi�catic�ns describ�d
in the �3"enazit Request, Tenant sh�ll eYecut� an Amendment to Leas� A�reement {an "r#mendment"} in the fonn
attached herzto a's Exhihit D and deliver such Amendmant to Landlord. If the A,�Zendment is delivered to
Lan�fl�rd, along �vith any pay�nent, if necessary�, pursuant t� Section SC. and the .4mendm�nt (i) accurately depicts
HOU:?79$� 4'8_k2
�xl�it�it B
the modification de�cribeci in the Tenant Reauest, and (ii) contains the new� Buildin; Budget and the numbee of
c�ays of Tenant Delay that was included in Landlord's Response (along with the aggre�ate number aF Tenant
Delays as of the date af such M�endntent inc[usive oF the number of Tenant delays in connection wiCh such
Amendment), Landlord shall execute the r�mendm�nt within five (5 j days from Landlord's receipt thereof.
E. Beginaiin� ���ith t1►e month inunediate�y follawin� the Commet�cemenc Date, instal]ments of Base
Rent shal� be due m�nthly, in �dvance, on khe tust calendar day of each month following the Commencement Date.
Sase Rent accrued through the month in which the Cammencement Date occurs shall be due ar,d payable on the
Cornmencernent Date and Base Rent For any partial month shall be prorated.
F. Notw anything to tE�e con[rary in 5ection SB. above, Landlord and Tenant hereby agree
ta promptly execute an am�ndment ko this Lease Agr�enient and to tl�e Construction Dra�vings each tirrae there is a
change in applicable Law taking effecc �fter che Effective I?ate but prior to Itie Commenc�ment Date thak would
cause the Landlord Improvemerzts, if compleced an accordance with the Construction Drawines prior to such
amendment, ta fail to c�mply with applicabCe Law. If any amendmerat executed pursuant to this 5eetinn 5F. shall
resalt in an increase in the Building Budbet, such increase to be detei•mined by Landlor� in the same manner as that
set �onh in Sectmon SB. abave. "Laws" means all federal, state, and local fa�vs, rutes, ardinances, statuCes and
regulatians, all caurt orders, �overnmental duectives, and govemrnzntal orders, and all r�strictive cs�venancs
aF�ecting the Progeriy.
G. In additian to the foregoina Base Rent and the .f�dditional Rent (defined belotiv) tc� be pazd by
Tenant pursuant to Section 6 helow, T�nant agrees to pay to Landlord as Additianal Rent a11 char�es for any
ser, gao�s oe maCerials fi.trnished by Landlord at Tenant's request which are not reguired ta be furnished by
Landlord under this Lease A.greement, as «�ell a; other sums payable by Tenant hereunder, within thirty {30} days
after Landlord renders a scatein�nr therefor to Tea�arrt. All Rent (as hereinafter de�ned) shall bear interes# from the
date duz until paid at the rate or rates specified by Chapter 2?'� l, Texas Governze�ent Code, as amended, Qr any
successor statu[e; �pravided, �however, in n� e�'ent shall the rate of interest hereunder exceed the maximurn non-
�susious rate of int�rest (hereinaftzr called che "i��a�cimum Rate") permitted by th� applisable ta�us trf the State of
Texas or the United States of Ameriea. In adc3ition thereta, if Tenant �ia�s failed to pay Rent as and when due, then
Tenant shall pay� LandBord a"Lat� Charge" of �w�e percent (5°a} of the o4�erdue amaunt. Tenant agrees chat thz
Late Charge is not a penalty, and t�,�ill compensate L.andlord for eost, not contemplated under fhis Lease A�reement
that ar� irnpracticable or extremely difficult to 6�c. LandCord's acce�tance oF a Late Char;e does not waive
Tenant's default.
SEC. 6 ADi)I'TION�+L R�VT:
A. In acfdition to $ase Rent, Tenant shall pay in ad�anc�, w�athout demand, deduction or set off; (i)
Tenant's share a� fl�perating �xpenses {as sei fo�th in Subsection B below�); and T2nant's Capit�l R�newal Fund
Contributions (as set fortli in Subseetion C below) (collectively, "Addiiional Reret" and, together with Base Rent,
"Reut"}.
�. Th� term "Operating E!cpenses" shall mean all expenses, coscs and disburs��ents of every kind
and character, suhject ta the limitations set forth below, wh�ch Landlord shall pay in conne�ti�n wit'h the
ownersliip, managem�nt, operation, repair, maint�nance and s�curity of the Property, inctuding, with�ut limktation,
the follow•ing:
{i} 1�Wa�es, salaries and fees af all personnel o� entiti�s (e:cclusive nf Landlc�rc�'s executi�•e
personnel) enga,�ed in Ehe operaCion, management, r4pair, replaceaienl, maintenance or monitor�ng of the
Property, 'rncluding ta�ces, insura�ice and benefts rela9ine ihereto; provided however, that if during ehe Term
sucli personnel or encities are workin� dn other prajects operated by Landlort� as �vell as �r�orkinp on the
Property, their wages, salaries, fezs and eelated e�:penses shafll be appropriately al�ocated amang all of such
project� and �nly thc�se p�etion� of such espenses r�asc�nably allocable to the Property shall be included as
Operating Expenses;
{ii) .411 supplies, equipment and ma�erials used in the operaEion, ow�nership, crranagement,
repair, maint�nance and a7onFtoring of the Aroperty;
HOU:?79�213.12
E�hibit I3
(iii) Cost of all monitonng, aervice and leasing a� eemeorts for the Property and the equiprnent
thereon, ineluding, ���ithout iimitation, if applicable for tlus Peoper[y, monitoain� service, energy
manag�ment system, controlled acces:� system, janitorial service, trash re�tlo�•al sen w•indow cleaning,
elev3tor maintenance, landscaping, lawi► irrigation ser�,�ice, a�d !�arking area maintenance;
(iv) Cost of all insur�nee relating to the Pr�operty for which Landlord is responsible hereunder,
or ���hich Landlard cansiders reasonably n�cessan� fcrr the a�eration of the Froger€y, or tivhich is required by
any Landlord's mortga�ee, includin�, without limitation, the cast of casualty and liability insurance
applicable to [he Pr�perty and Landlord's equipment, fi:ctures and personaE ProperEq uszd in connection
th�re�t�ith, �nd the cost of business interruptio�a insurance in such amounks as will reiinburse Landlord for
all losses of earnings and oth�r income attri6utable to suc� perils as are commonly insured against by
prudent Landlards;
(v) Cost of Propem rzparrs, replacements, and eenera! cnaintenance, and cost of legat
exp�nse� and related casts ceasona6ly inc�rred f�r khe �eneral i�ene6t of the Teuants of the �'roperty (e.e.
leaal fzes and coosultant fees in Property kax disputes);
(vi} An�ortized cost of all eap'rtal im�rowements made ta the Proparty (a) v.rhieh although
capita] in naEUre are for �eifher (i) insta[lation of a controlled access system for the $uilding or (ii) can
reasc�nably be expecked to reduce the normal operating costs caf the Pr�perty, {b} in order to comply �vith the
Americans with �isabilities rti.e[ (4? U.S.C. j 3 1210 C et seq.} (the "t1DA") (unless suGh cc�mp$iance is
sotely caused by anat}ler tenant's use) or any other la�v or regulatiun that was not applicable to the Property
w•hen originally constn�cted or any law• or reeulation that is hereafser promul�ated by �ny govemm�ntal
authoeity, or (c) whieh er�tiance the Progerty for the general benefit of Tenant or occupants thereof,
amortized o�•er the useful econamic Eifz of such improvements as d�termined by Landlord in its reasonable
diseretion, without regard to the persod ot°zr whieh such imp�oven�ents ma}� be d�preciated or am�rtized for
Eederal income tax purgases;
(�,•ii) A1l charges for utilities, including, but n�t 3imited to, water, setiver, electricity and gas,
vvhich are paid by Landlord and not actually e�imbursed ko Landlord 6y the Property's Tenants; ar�d
(viii) The rnana�err7ent fe�, if �ny, for the Property (not to ereeed the prevailing managemznt
Eee for professinnal builc�ings of cc�mparable size and quality� in P�arland, Texas), and reasonable 6egal fees,
consulting fee�,, and accour��ing fees incurred in [he n�aintznan�e, use, ar operacic�� of the Property.
Bl. Oper3tinD ECpenses shall not includ� repaies and general inaint�nan�e paid from proceeds of
insurance or by a tetaant or other third parties, a�zd a[terati�ns attributable saleiy ta individual tenants of the Praperty.
Further, Operaling �.�cpenses shall not inc(ud� the eost of Capita] Improverroents (defined belo.�°) or ieases (except as
set fo�th above), depreciation, interest (except as provided above wirh resp�et to th� amoRizaaion of capita]
impro�.�ennents), lease commissions and expenses, and pr�ncipal paymenCs on mort;ages, costs inc:urreci in
ne�otiating, leasing ar licigating ti��ith any other t�nant„ a�d othzr nan-a�eratin� debts nf Landlord. "Capital
ImQrovements" are mc�re specifical3y d�fined as:
�i) �osts incurred in connecticsn tivitt� t�e oriQinal constniction of the Landlord
Irngrmvements �r with any majc�r chap�es to san�e, includina but not limited to, additions pr deletiuns of
camdor e�tensions, renovatsons and irnprovemer�ts of the conimon ar�as beyand the costs caused tay
norrnal r,4ear a�id tear, a�d uptrades ar replacement of major ['roperty �ystems; and
(ii) Cosis of cosreeting defects (including latent dc:fecks), inc[udin� any allo�vances for same,
in the c�nstr�ction af the Landlort9 iniprov�ments or its related facilEties; and
(iii) Costs incuned in renovating or o�t�envi�e im�eovinu, desi�ning, redesijnang, d�corating
os eedecorating space for terrancs or olher occupartts af th� Praperty or oth�r sp�,ce le�s�d or held f�r lease
in the Property.
Hou:z�9�� � s. i z
Ex�ibit B
B2. Beginnin3 the mc�nth imrnediately follc��ving tlte Commencement Date, installme�CS of Opeeating
�xp��ases sl�all be due monthly on the Eirsz calendar day of each manth fol�otiving the Commencenient Datz.
B3. Tenant's annual share of Operating �xp�nses, which irrclud'e utility expenses, shall be initially
calcutaced at 57.75 d�llars per �rr�ss square fc�ot annually. - ['he �7.75 rate �s deternuned by combining {i) the itutial
rate of $5.50 per gross square foot for `�enant's share of grojected utititv expenses and insarance cost� {collecti4°ely,
the "Nan-Controlla�le Costs"), and (iij t41e i�itial rate of $'_.25 p�r gross square foot for Ter�ant's share the
Eemainin; Qperational Expenses identified in this Subseetican B(collectivel,v, the "Controllabie Costs"). Tenan[
shall pay its sE�are of Opera[ing �xpenses in monthly installments equaf to lr'1?th of Tenant's annual share of
Operating Expenses. Tenant's annual sh�re af Operating EYpenses shall nat exceed S 173,274 for th� fust Lease
Y�ar. Beginning the second Lease Year, [he parties agree that Tenant's annua9 share of the Operating Expenses
shall be based upan Landlord's estimate of l�perating Expens�s based on the prior year's actual O�erating Exp�naes;
provided, hotwzver, that the Controllable Cost portion of Operating Expenaes may be increased by no more than five
per�ent (5°ro} or,�er the amount of Tenant's annual share of the actual Controllable COStS for �hc intmediately
preceding Lea�e �C"ear.
B�3. Vv'ittun one hundred tw-enty (12Q) da}'s after each calend�r year €sr as soon thereafter as is
reasonably practicable, Landlord shal] de�iver to Tenant a stat�m�nt settin� farih the actual Operating �xQenses for
such year, and 7enant's share thereaf. If Tenant°s tota] payments in respect of it share of �pera[ing Expenses
(excluding insurance) for any year are less than its actual share of such Operating E;cpenses for that year, Tenant
shall pay the difference to Lan�locd within thirty {30) days after Landlord's request therefor. If such payrnents made
by Tenant are more than it5 actual share of s�ch Op�rating Expenses for t}�ac year, Landl�ard shall repay such excess
to Tenant withira ihirty {30) days. There shall be no duplication of costs for reimbursements in calculating Tenant's
share of such Operating �xpenses, and any eYC�ss retained by Landlard at the end c�f the T�rm sha19 be refund�d to
Tenant �vithin thirty (3Q) days after the end of the Term.
BS. Landlard shall deliaer to Tenant a statement For the pro�er4y insurance w�ithin thirty (30) days of
the expiracion af the precedin� years' policy. Tenant shalf pay to Landlord its groportionate s'hare of che difference
bet�veen the prior year's insurancz prernium and any eurrent increase in premiums related to the Buildi�g and
Property for �,vhich Land6o�d is responsible. �'his payment shall be made by the Tenant to the Landlord within thirty
(30} days of recer�t of the stakement. Tenant shall be en[itled to a credat for any decrease in premiums for thie
previous year. Lan�lord shall (i} credit such excess aaainst Tenant's next accn�ing Rent hereunder, or (ii} repay such
excess to Tenant within thirty (30) days.
C. The term °`C�pifal Rene�val Fund Contributivns" shall mean, for each �3ond Year, as follows:
Bond Year Annual Capital Renewal Fund RequiremenS
1-3 50
4- 5 1°/a t�f replacersient vzlue of the Building
6+ 2°/o of replacerrient vaiue af the Building
Cl. Capital Rznewal Fund Contributions under this Subseetian C shall be payable by Tenant to
�andlard in inontt�ly installments equal to 1?12th of the Capital ftenewal Fund Contributions as �p�:ci�ed in
5ubsection C above. Landlard and Tenant shall anr�e upon how amounts in the Capital Rzneu�al Fund �hall 6e
spent pripr to expe�diture of any amaunts in such fiund.
SEC.7 T��ES:
A. Pric�r tr� delinquenc;y, Landlord shall pay a19 taces and assessments and other go��emmenta� c;har�es
(�vhether federal, stat�, county ar municipa� and ix�hekher t1�ey be by taKing dis[ricts or autht��ities presently taxin4
the Property or khe Building or by athers subsequently created or otherw an� any other taxes a�d improvemment
assessme�ts aEtributat�lz ta the Property or the Building, or its operatiQn or th� revenue� or rents received ttlerefr�ni
(whether directly or indireetly through th;e use of � franchise, margin or ocher similar �a� and whether or ncat such
ta�es alloti�� for the deduction of expenses in calculating t�ie bace amount on ti�•hi�h the ta�x is levied) but e�ccaudin�,
hotivever, federal and state ta�es an incom� (callectively, "�'axes"}; prov€ded, however, that uf at any time durir�g
Ht7U2798? I8.i 3
E:;hibit B
the Term, new tases, assessnients, levies, imgositions or charges are imposed on the renis received &4m [h�
Property or tfie Building or the rents resen�ed herein or any part Ehereof (whether directly ar indirectly rhrough the
use of a kranchise, mar�in �r ather s'smilac tax), or t1i�: present method of taxatbon or assesse�ient shall be so ehan�ed
that the who�e or any part of the Caxes, assessments, levi��, impositions or char¢es now le�'i�d, assessed or impose�d
on real �statz and the im�rc�ve�nenks these�f �haSl be discontinued and as a substiQUt� therefor, or in li�u of an
increase to the ta� rate therepf, [axes, assessment�, ievie�, impositions or �har�es shatl be leuied, assessed and,'or
impe�sed �vliolly or partially as a capita] 1�uy or othenti�is� on the rems received fram the Frc�perty� or the Buildin� ar
the rents reserved herein or any part ther�ot'(whether directly or iradirectiy thrcaugh the use af a franchise, margin t�r
similar tar and whether or not such ta.�ces alla��G° toe the deduction of eXpenses in caleulati�g the bas� amount an
tik�hich ihe tax is levied), then s�ch substih.st� ar additional ta�ces, assessments, levizs, impositions or charges, to the
extent so levied, ass�sseci or imposed, shal� be deemed te� be in�luded cvithin the tent� "T�xes" to the ext�nt that
such substitute or additianal tar would be payable if th� Praperty ar the Building �vere the only property of the
Landlord subjecc to such tax. [Jpon the request of Fenant, Landlord �hall deliver ts� Tenant copi�s of receipts Frorn
the applieable ta�ing author'sties or ather �vidence acceptal�le to Tenant to verify thak the Tax�s ha�,•e been paid.
B. Tznant sha�l, bzfore delinquency, pay all tax�s leuied or assessed against any persanal prop�rty,
fixtvres or a9terations placed in the L�a�ed Prernises and upan the r�quest of Landlord, deliti�es to Land�ord receipts
from the ap�licable ta�cing authority� ar other evidene� acceptabNe to Landlord tn v��fy thac such taxe� have 6een
paid. If any such taxes are lzvied or assessed a;ainst Landforcf or Landlord's pro�ert}� and Landlord pays them or
the assessed �ale�e of Landlard's propert}� is increas�d thereby and Landlard pays the increased ta�es, then Tenant
shall pay to Lanc3lord sueh taxes �.vithin ten (10} days after �.andlord's requesi tlierefor.
C. Landlord shall, at Tenant's e�pense, contest th� val'atiity or amount af any Ta.res in accordance
wi€h Law if and anly if (i) in Landlord's reasona6iz estiniation, Che smount of Taxes sought to be ifnpc�sec3 exceeds
the anlo�nt of Ta�ces that, ia� Lancllord's reasonable estimatiun, should �e impo5ed by an amount �reat enouph to
justify che expense (ineluding court costs and attorneys' fees) af s�ch cantest, and (ai) [here is a subaCantia]
likelihood of ,uch conTest achi�aing a successful result. T€ Landlord cont�sts thc; validity of any Ta.r the
payment thereof shall be deferred, as permitted by Law^, durin� Che pendeney csf such contest. Ha���er•ec,
nottivithstancfino an;��hinb to ih� con[rary in this Sectian 7, Landlord shall pay [he Taxes cantested if such paymerrt
is necessary to�avoid the Leased Prer�tis�s, or any pa�t tli�reof, haw�ing any lien attached th�reto, or being sold or
seized by any govemmental authority for the nonpayment of Ta.�es.
D. If Landlord does not coniest the validity ar amount c�f anv Taxes pursuant to Section 7C. above,
Tenant ntay, at its erpense, cont�st the vaiidity or amount of any� Taxes in accord:�nce with La�v, rn tivhic�� �<<ent the
Rayment thereof may 6e deferred, as perniitted by Law, dt�rin� the pendency ok� such contest, if diligently
prosecuted. Notlting hereen, haxy�evec, shall perrrsit any Taxes to r�aiain unpaid fur any interval 4Fiat would pern�it
the Prapeny ar thz Building, ar any part thereof, havin� any lien attached tlyereto, ar being sold or se�zed by any
governmental authority for the nonpayment of Taxes. If at any time, in kha r�asonable ju�gment of L.andlard, it
shalk becomz neces5ary to do sa, Lan�lord may, after written notice to Tenant, under pratest if so requested by
T'enant, apply the amcsunts so depnsited or sa much tliereof as may be ree�uired to prevent a sale or seizure �f the
P'roperty or the Buildin� or fQreclosure of any lien crea¢ed th�reon [o secure payment of such unpaid Taces. T�nant
sha19 pay a19 penaltizs, interest, �nd fees assessed be�;ause o€ Tenant's failure to pay Tares tvhen due, and ta the
e:itent permitted by [he TeYas Constitution and the la�vs of the State of Texas, ��enarmt shall indemnify, d�f�nd, and
hold harrx3less Landlord from and agai�ist a�y costs, liability, or dama�e inGUrsed by Lansil�rd arising out of ar
attributable to Tenant's failure to pay Taxes when due. If required hy Law, Landlard sha61 joi� in any contest
praceedings bro�ghk by Tenant, at Te�ant's expense.
SEC. 8 i1i.�IN°I'E��,\CE .��D �2EPAIRS:
�. LANDLOR.D'S R�PAIIZ r1I�Il hiAINTENANCE.
(1} Landlord shall maintain the Property, ttie Common r1,reas (defined be�ow�) and the
Buildin� (excludin� the interiar af the Lease� Premises anci space leased ta other
occupant� of the Buildin� and subject to the pruvi�iona of Section 7B b�low�} in good
cor�dition and repa'rr. Landlorc! shall make all strucn�raG repairs to the $uilciing, tt�e
Leased Fremises and the �Common Areas, inclue�ing but not limited to alE repair5 to the
I�OU:�7982I8. I2
E�fuhit B
fpundation, load bearing walls, roof and any other structural anemb�rs; presvi�ied,
however, all casts and expenses far such repairs shall be includ�d in th� Qperat�ng
EYpenses to the estent provided �n 5ection b above. In addition, Landl�rd shall: (i} keep
the roof of the Building free of leal:.s and {ii) maintain th� under�round and otherwise
car�cealed electrica] and plumbintr, and the exterior surface oF thz autside walls of the
Leased Premises, the Buifdin� aa�d th� ProperRy, excludang µ°indow glass in th�: Peemises,
(iii) rnaia�tain al1 lteating, air conditionin� and electrical systems sert-ing ihe Leased
Prem�ses, the �uilding, the Comman r^.reas and the Property, (iv) maintain a91 fire
pratecEioc� systems sen�in� the Building (�xcluding any fire alarm system wtuch only
serues the Leased Premises, which fue alarm system, if any, shal] be the responsibilitv of
Ten�nt} and th� Comman Areas; provided, hower�er, all co:,ts and e�penses shael lae
included in the 1�peratiog Expenses to the extent provided in Section 6 above.
(2) The terEn "Common Areas" shall mean the areas within the Building and the �'roperty
which are awaila6le foe use of the €enants in the Buildinq and which are not part of the
Lessed Premises or the premises of other tenants. Th� Common Areas shall includ�, as
app�icable, cnrridors, lnbbie�, eleratar foyers, res[rooms, parking areas and similar areas
of the Buildin� and Property designated 6y Landlord for the general and non-erclu�iv�
common use or benefit of Tenant and other tenants of the Buil�ing.
(3) Landlr�rd's obligaci�n to msintain the aforementioned icems shall be limiled solely to ihe
reasonabEe cast of such repairs or mainte�ance or the curing af any def�ct in th� same.
Except as specifically provided in chis Secc�on 8{A}, Lan�ilord stiall not be responsible fo�
mainkaining the Leased Premises.
(�) Landlord reserves the ri�ht, but does not have the obl�oatioa, to perform ariy o�l'saations
that are ot}ierlvise Tenant's obl�gatiuns, in which eve�it "i'enant shalE, within thiriy (3C1)
days, pramptly reimburse �andlord for the entircty af the coscs of such performance, plus
interest at the lesser of ten p�rcent ( l0°%) per annum or the 'high�st rat�: then allo�ved
under Texas law•, protiided, hot�e�^er, Landlurd sha1K S�a��� given Tenant evritten notice of
Tenant's obls�ation(s) and Tenant shall not ha��� caFnmenced to cure such obl��acion
within thirty (30) days from receipt c�f such nutice ancf diligently proceeded to Fitu�h such
obligation.
(5) Landlord reserves th� right ta aEter or modify fhe Suilding of which the Leased �'remises
are a part, when such alteration5 or modificafiions are required or �vill be required by
go��ernmental laws, codes, ordinances, regulations, or any oChee applic�ble authorities,
includin�, wilhout limitatit�n, the AD,�., in 4�-hich e��ent Tenant shall be liable fe,r ies
proportiQnat� share of sueh cost.
�. TEi`�i:4NT'S REPAiR APv�;tit�IT�;TEi+��.':CE.
(1) T�nant, at its o�v�i cost and exp�ns�, shall (i) n�aintain �l0 par�s of the Leaser� Fremise5 in
�ood condition, and �ii} promptly rtrake sll necessary repairs ar�d replacements to the
Leased Premises, including, but not lirnited to, winddws, glass and plate glass, �viring,
buildina sprinS:ler systems, esterior doors, any speei3l office entrw, interiae tiE�a11s and
tinish �vorfc, interior doars and f1oQr coWenng, utility cor,at�ctions, heating at�d air
concCitioning systems, �i�ht bulbs, plwmbirpb work and tiYlures, t�rrnite and pesf
extersnination, and any damage due to vandafism or malicious mischief, unl�ss the
darna�e is due to the negligence of the Landlard or his agent or is a result of defect of
premises resulting from initial construction.
(?) Aity artd all security af any kind for 7enanc, Tenant's agents, empleyees or invitezs, th�
Leased Premises, o� any personal property th�rec�n {includin�, �uithoui �irnitaEian, any
personal pro�erty of any subleasee) shall be the sole respansibility and obli�ation of
Tenant, and shall be pr�vit�ed by Tenarit at Tenant's sole cast anci expense. Tenant
�au:2lse� �s.9z
i�.�:lli�it B
aekncawledges and aarees that Landlarc4 shall have n� obii3ation or liability ���hatsoever
t�rith respect to same. L�ndlord shall not be laable f�r any lo�s, cost, dama�e ar oth�r
liabiiity arisin; directly or indiaeetly frorn securitp rneasures or th� absence theredf �ro•ith
respect to tl�e Leased Premises unl�ss causeci by the gross negligence or wyllful
misconduct of Landl�rd. T�nant may, at Tenant's sole eost and expense, in�tal] alarrn
systems in thz Leased Premises �arovided s�ch installation complfes with tli� app�ieabie
terms of thiy Lease Agc�ement. Removal of such alarni systems sha9l b� Tenant's sole
responsibility and, at TenanCs sole cast and expense, shall be �ompleted prior to Eease
cerminati�n and all afY�cted areas ot the Leased Fremises shalk be repaired and�'or restored
'tn a gofld and rs�e�rkrr�anlike manner to the eo�idition that existed prior co suc� installatian
unless Lan�ilo�d agrees tttat such system rnay rerrsain. Notu�ithstancliag tli� faregoing,
Landlord mav elect in Landlord's sale discretion to contract for common security
sen'ices, to tivhatzver extent Landlard may deem appropriate, for the Leaszd Fremises,
prati�id�d flfltv eti•er Tenant acicnow�led�es and a�rees tkaae �.andlord shall 9n no event be
obli�ateci to prot�ide any such se�s�ices and the provision of such senAices shall not alrer ar
mfldify Tenarrt's o�liSation to provide its oum security as set torth herein for the Leased
Premises. T�e cast of any security services contracted for by Landlord shall '�e treated as
Additiona] R�nt pursuant to Section C�.
(3) Tenant a�re�s, at its atirn cost and expense, ta rc�air ar replace �ny damage or injury
done to tE�e Property, or any par! thereof, by Tenant or Tenant's a�ents, employees,
ir��itees, ar ��isit�rs; pravid�d, hawever, if T�nant fails tc� make such repairs or
replacement, within thirty (30} days after the occurrence of such dact�abe or injury�,
Landlorc# may, at its option, make such repairs or replacement, and Tenant �hakl pay the
cosE thereof {plus an adc{itic�nal charae of tlfte�n percent t�% of such cost zo cover
overheacf� to LandYord within �ft�en (15) days after Tenant's reeeipt af a request from
Landlord to do sa. Tensrlt further a;rees not to cotru�it or a91ow any waste or dama;e to
be conunit�ed Qn any portion of the Prop�rty, and at the termination of this Lease, by
lapse of time or other�vise, Teraant sha11 deliver up s�,id Prernis�s to Landlord in as good
condiCion as at the commen�ement date, ordinary' ��'ear and tear escept4d. L1nle�s
othenvise expressly s[ipulatzd herein, Landla�rcf shall not be required to make anY
improvements or repairs of any kind or character on or to the Property, or any portinn
thereof, during the term of this Lease.
C. Tit is hzreby a�r�ed by Landlard and Tenant that any repairs or replacements ttsat are necessary as a
resutt of any casualty or concfemnation, then th� seccions of tliis Lease A�reemeni ga��ern:inQ casualty aad
cor�d�mnaEion shall control die responsibitity and obligati:ons of Landlard and Tenant.
SEC. 9 REQ[�IRE� SFRVICES; ADDITIO�iAL SERVICES:
A. Pro��idc,d no Ei�ent of Default (as h�reinafter deFined) has occurred and is c�ntine�ing hereunder far
which Landlord has tes this Lease .4greemenE or Ter�ant's ri'ht of possession of the Le�tied Prernises, and
subject ta �he pro�'isic�ns set out belcacv, LandCord shall fumish the followin� services and amenities {collectively,
the "Required Serviees"} to Tenant {and its assignees and subtenants pennitted hereunder) �tihile uc�upying the
Leased Premises, subjzct to temporary interruptiu�is due to scheduled maintemance, in the event of� emer�encies or
othenvise ciue to causes bey4�►d Landlord's contral:
(1) Hot and cold domestic r�•atzr at all times at those pc�ints of supply peo��ided for �en�raf
use af the tenants of the Building;
(Z) Central heat, ��entilatian and air conditianing in sea�on, during normal Buildin� busin�ss
hours (arsd at all other times suhjzct to Tenattt's pay�nent of a separate Charge, as set �orth
in Exfaibit I attach�d Itereto and made a part herzof for ali purposes). at such
tempe:ratures an+� in suclt ame�unts as are considzr�d by Land[ord to be standard, but in
keepinD wich th� standards of othzr Class A o€fice building� in t�te Pearland, Texas area
of ec�mparable size as the 8uilding (`"5imilar Suburban Buildings"), all a; rnore
HOU:2 i98213_ I ?.
E�hib�t B
particularly descri'bed on Eshibit 1 attaehed hereto and made a part hereaf for all
purposes;
(3� Electric: li�htin� service for all public areas and special service areas of the Buildinn in
the rnanner and to she extent deem�d by Landlord to be in �:eeping 4vith the standards af
Similar 5uburban Buildin�s;
{�) Janitorial service camparable to that provided by landlords �f Sim.ilar Suburban
Buildings and consistent with other tenants in the Building on a fre {5) day w�ek basas in
accordance u�ith the speci#ications far 5isnilar Suburban Buildings; provided, hosvever, if
Tenant`s floor coverings or other improvements require special cleanin� or carc in excess
of that provided for by Landlord, E.andlord wi11 providz such additional cleaning or care
only upan special agreea�ent �{�ith Tenant;
{5) On-site access controi personnel and equipment for the Building at all times; provided,
however, th�t T�nant a�re�s that Landlord shall not be responsible tar the adequacy o�
effectiveness of such access contro] service pr�vided that (i) Landlord has exercised
reasonable care in �he selection of the aecess control cor�tractor and equip�nent, and (ii)
the scope and extent af �he access contrcrl ser�ices contracted for by Landlord are in
leeeping wich the standaeds of Similar Suburban Buildings;
{6} Suf�cient electrical eapaciry distributed to a panel box located at the co�e of �acli ElaQr of
che Leased Prernises in the amount of (i) fi�e (5) watts per square foot of net rentable area
for lotiv voltage etectrical consumption (12�i203 volts) to operate rypewTiters, voice
�ziters, �calculating machin�s anc� other rnachines of simiiar low �oltage electrical
consurnptian and (ii) two (2) watts per 5yuare foat of net rendable area for standard higli
volcage electrica] consumption (?77f'�80 volts) for ligh�'sng and other equipmznt of
st�ndard ]�i�h uc�lt�be electrical consurnptic�n utilized 6y �i'enant ix� the �.eased Premis�s.
If �enant's non-linear eleetrical load (creaked by equipment such as pers�nal coniputers, I�If4'1510[l SZ[5
iaser prinEers, copi�ers or other electronic devices corhn�cted to the power sy�stem) resulc in harmonic distQrtion
conditions u�tmich cause any adverse effects in 1h� Suilding, ic�cluding but no[ limited to, the derating of any
transfarmer, distributie,n stepdown transforn3ear failures, overheating or meltin� of neutral conductars, or
malfunctioning af various eleCtronic eompa�ents, Tenant acknoevledges that Tenant, at Tenant's sole cost, shall be
obligated to elicninate such harmonic dsstortion canditions and co repair any dama�e �v4tich resulCS frcam such
harmonic cfistartion within thirty (30) days of recetpt of Landlord's ��ritten request. If Tenant £ails to eEimmnate such
harmonic distortio� and repa�r such damage caused thereby w�ithin such thirty {30) day period, Landtord, at its
option, may malce such correctiqns deem�d necessary by Landlord to eliminate such harmonic distortion and make
such re�+airs, and TenanC shall pay to Landlord on demand Landlord's cast thereof plus a eharge equal to fifteen
percent ( l5°4) of such costs for admir�istrative cost reeoVery.
Tenant shall eau�e �i�enant's electrie�l syst�m servinb ar�y equipment producing non�linear electrical loads
to be a�si�ned to accamniodate suc4� nan-linear electrical loads, including but not limite� !o, ar'er-siz�ng neuaral
conductors, derating transformers and,"or providing pokver lin� filters.
Pf Tenant's electric3l equipment and lighting require electrical eircuits, u�nsformers or other additional
equipm,ent in exe�ss ef Tenant's pro rata share of the Building's zlectrical ar HVAC systems (which addi[ianal
eqeaipment shall b� hereinafter referred to as t3�e "�ddicional �lectrica6 Equipment"}, Tenant niay (at Tenant's
cosi, irse9udi�la the c�st to design, install, maintasn and replace the .4dditional Electrical Ec�uipment, includi��g the
meters} install same, provided such installation ia eornpatible �vith existing Bui[din; systzms, �uill �ot campromise
L.and3flrd's ability to provide ser��ices to Tenant or �ther tenant. af the $uilding ancS will not be burdens4nte to the
Building or to Landlard, in Landlord's opinion, anc� Tenant shall pay all opera€ing costs rc:laked to 4ha� requirement
{including, without liaiitatian, the cost of eleciricily, tvater or other services eonsumed thrflugh, dr in connection
with, the .�.dditional El�ctrical Equipment}.
HOU:?748? I8.12
E���ibit �
The n�ethdd �of desion and insta4lation of any r�.dditional Electrical �quipment (utcluding any related meter)
required by Tenant shall be subject to th� prior written �,pprcrva� af Landlord (such approval not to be un�'easanabYy
sr�itl�held, conditian�d or delayed by �.�nd4ard� and sha91 be perfomled by Lans�lord at Ti enant's sole cost (includin� a
charge equal to �Ftteen percent (15°�0} of such cosQ for the revie�,� and installation of such .Additional Electrical
Equipment far admsnistrative cost reeovery).
�enanc shall pay to Landlord the cast aF electricity con�umed in ercess of the $uildan� stanc�ard rated
electrical desian load as tietem�ined by meter, or if not meteced, as othenvise reasonably estimated by Landlord, plus
any aetual acccsuntine expenses incurred by Landl�rd in ca�nnection �vith ttae cneterin� thereof. Landlord may cause
the entire Leatied Premises ta be separately metered {at Tenant's expense, including, without limitacion, the cos� of
installing, mainsaining, rzpairin� and replacin� such meter� to the extent necessary), in �,vhich e�•ent Tenant shall pay
the acrual eost of electricity cot�sumed by Tenant.
{7} All Braildinb standard f�uarescent bu�b r�placement in al� areas and all incar�desceni 6ulb
replacement in public areas outside of the teased PremiSes, re�[raom, and stair.�'edls;
(4} :SOn-exclusive passengee elz�ator s�r�%iee to the Leased Premises twenty-four (?4} hatmrs
�er day and �on-exclusive freight elevat�r ser�ice during normal6usiness hours; and
(9) 14faintenance of the roof, exteriur wa1Vs, loac�-bearin� co9umns, faundations, tloc�e sCabs,
and t�ther structural cornponents oF the Building, the mechanical, electricaE, plumbing an�
oth�r Building operaCing systenis, F3uilciin� comm�n areas, and exterior lig }liino and
la�dscaping ot the Building. �
B, The ob[i�ations of Landlord to provide the Required 5er4�ices shall be subject to �overnmental
re�ulation ther�of (i,e., rationing, temperature cor�trol, etC.} and any �uch rebulation tk�at unpaira Landlord's abiliry
to pro�'ide the Rzquired 5crvice� as herein ,tipulated shal� nqt constitutz a default hereunder but rather providing
the applrcable Required 5ervic�s ta thc: ettent allou'ed pursuant to such cegulatians shal! be deemed to be full
compliance �with tk7e obli�ations and atrreear�ents of Landlord her��and�r.
C. To the extent any of the Required Services require electricity, gas and water supplied by� pubiic
utilities or others. Landlord's covenants hereund�r sha�l only impose on Landlard ttre obli�ation to use its good
Faith efforts to cause the applicable pubiic utiliti�s or other providers to furnish the s`ame. Failure by Landlord ta
furnish ariy of the Req,uired Ser��ices to any extent, or any ce�sation th�reof, due Co tailure of any public utelsty or
other provider to #umish sen�i�e to the Building, or a�nu other cause beyond the reasonabre control of Landlord,
shall nok render �andlurd liable in as�y respect fnr damages to either persan or praperry, nar be constnaed as an
eviction oP Tenant, nar result in an abatement of Rent, nor relieve Tenant frorn fultill�nent of any covenant or
agreement hereof, escept as provided herein. In the event of any failure by Landlord to fumish any of klte Required
Serviees to any �xtent, or any cessation thereof, due to mal�un�:tipn of any equipment or machinery, or any other
cause ivithin the reasanabEe control of I_andlor� (a '"Service Intet'ruption"), Landlord sha9[ utilizc; eommzrcially
reasanable eFforts to promptly repair said equipment or machinery and t� restore :Said Etequired Services as soon
thereaftee as is reasonably possible under ih� circumstances.
D. Tes�ant hereby acknow3edges and a� ees that Landlord is a6digated to provide only t��e Required
Service� under th�is L�ase Ajreenient, and that L�ndlord, �ts a�ents and repre�entati�•es, have made nfl
representaEions what�oe�;•er of any ad�itional services or ameniti�s to be provided by L.andlord now or in tlie future
under this Lease ,�greement. :�o0.��thstanding the fore;oin�, Tenant recogni�es that Landlord may, at 1Landlord's
sole aption, elect to providL additional services or amenities for the tenants of the 8uilr3sn� from time tr� time, and
hereby aarz�ti that Landford's discantinuan�e of anv pro��ision bf arsy such addational servaces or amenities shall
nok constitute a d�fault of Land�ord unr�er this Lease Agreemen[ rt�r cntitle T�r�ant t� any abatenzen[ oFor reduction
in Rent. Any such additional serrrvices or ame�iti�s that Landlord elects to proiide to tenan�s of the Building shall
be prowided to rhose tenants re�uzstin� such services or amen�ties at Lancllnrd�s cost thereEor which cost aiay
iitclude an adatinistrati4 cost reco�•ery char�e not kn exceed �fteen percent (15a'�).
lfl
HOL�:27��? 18.12
��,hibit B
SEC. 10 QUIET El,�C]rYIIEiVT; RZG�TS RESERVED:
A. Landlord c�venan[s that on or before the Commencem�nt [7ate it will have good title to the Leased
Premises, free and clear of all liens and encunybranc�s, e:�cepting onYy the kien for current taxes ncat yee due, such
moRgage or mortga�es as ar� pern7itted by the terms of this Lease ,,�greement, zonin� ardinances and other
buildsn� and fire ordinances and governmental rzgulations re4atin� to the use of sucln property, and any� easements,
restrictioas and nther conditions of record. Landl�rd repres�nts that it has the autharity ca enter into this Lease
.4greement and that se long as Tenant pays all a►rsaunts due hereunder and pzrforms all other ccrvenanis and
a�reements herein se4 fort}�, �F�nant shall peaceably and quie€ly had�e, hold and enjoy the Le�sed Pr�n�ises f�r the
tzrm hereof without hia�dz�ance or molzstation frorn Landlard, sttbject ta the tercns and pro��ision� of this Lease
A�reement.
B. Any di�ninution or shutting off of li;ht, air or �'ie�,� by �any s4ructure which is now ar may hereaf�er
be effeeted on 9ands adjacent t� the Building shall in na evay affect tl�is Lease A�reemen� oc impose any liability on
La�diorct. l�aise, dust or vibration or ather incidents cansed by or arisin� out �f aii,y new co�astruction of
improvements on lands adjacent to the Leased Premises, wheth�r or not owned by Landlard, or on €he Land shall in
no way affect this Lease P.greemenk or impose any liability on Landlord.
SEC. il Ai.TER�TIQ\S:
A. Tenant sha�1 nvt make or allQw to be made (e�cept as othenuise �rovided in this Lease A�reeu7ent)
any alterations or physical additians (including fi.�ctures) in ar to the Leaseci Fretnises, or place saEes, vaults or ather
heavy furnitu�� ar eguipment E�ithan t9�e Leased Premisea, without fttst o6tainin� the writken cansent of Land9ord.
In addition, Tenant shall not b� p�rmitted to take x-rays or core drilfl or penetrate the flaor of the Leased Pr�rc�ises
tvi�hout first obtaining the Landlard's consent. The Eul] cosk af any consuliant or engineer hired by L�rndlord in
connection writh such �w�ark undertal:en by Tenast� shall be paid for by �enant as Add6tional Rent hereunder. Tenant
sh11f submit requests for canses�t to m�ke alterations or physical additions tageth�r with copies of t'he plans and
specifications �or such alteratiosLS. Subsequent to obtaining Lan�lard's consent and priQr to comrnencement of
construction of tYle altera[ians or physical additioas, Tenant sh�ll deViver to Landlord the building perniit, a cflgy of
the exeerated canscructioii canteact coverin� the alteratians and physical additio��s and e��idence of contraccor's and
subcontractor's insurance, such insurance bein� with such companies, for sucla gen'aods and in such amoumts as
Landlord may reasonably require, naming the Landlcsrd Parties as additional rnsureds. Tenant shall pay to
Landlord upon d�mand a review fee in the arnaune of Landlard's actual costs inctsrred to compens�te Landlard for
the cost of review and approval �f the pians and s�ecificalions and for additianal administrative costs ineurred in
rnonitoring the construction of the alterations. Tenant shal] dels�er to Landlord a copy o�` khe "as-built" �lans 2nd
specificatior�s far all a9terations or physical additions so made in or to the Leased Premises, and shaYl reimb�srse
Landlord far t�e cost incurred by Landlord to update its eurrent architectural plans for the Building.
B. To ihe extent aSlo�ved by Texas law, Tenanc shall indemnifY, defend (wrth coun5el reasonably
acceptabhe to Landlord) and hold har�nless the Landl�rd Farties from and against all co�ts (including attomeys' fees
and costs of suit}, losses, liabilities, Qr causes of action arisine out of or relating to any a6teraasons, additions or
impra�•eenenCS made by Tenant to the Leased Premises, includinp but not limited ro any mechanics" or
materialztten's li�ns asserted in connectiar� therzwith.
C. Tenant shall ncat b� deemed to be the agent or repre�entative of Lanr�lord in makang any such
alterations, pk�ysicaf additions or improve�nents to the I_eased Premise's, and shall ha4e no right, power or authority
to cncumber aay inkerest in [he Leas�d Prernises in cqnnection therewith other than Tenant's ]easehold estate under
this Lease A�reement. He�wea�er, shoutd any rnechanics' or o�h�r liens be �iler� a�ainst any postion af the Leased
Pr�mises or any inter�st therein (other ihan TenanC's leasehold �stat� hereunder) by reason of Te��ant's acts or
c�missio��s ar because of a claim againtit Tenant or it� contracters, Tenant shafl eause Che same to be canceled ar
dischar�ed of record by bond or othenvgse �vithin ten (10) days afler notice by Landlord. [F Tenant shall fail to
cancel or disch�rge said lien or liens, within said cen (14) day Feriod, which failwe shall be deemed to 6e an Evem
of De£ault Eiere�nder �vith�ut the necessiry af any further notice or cure perioti, Landlord may„ at its sote option and
in addiCion ta any ather remedy of Landlord her�undzr, cancel or cEiac�aroe the same and upon I_andlocd's demand,
Tenant �fi�all promptly reimburse Landlord tor all eosts in�urred in canceling ar di5char,ing such l�en ar liens.
m
HO l; 27982 3 3. ]?
Exhibit B
D. Tenant shafl cause all alterations, pltysical additions, and irnpro��em�nts {including fixtures},
ecarzs[nactec� or in�talled in the Leased Premises by ��r o❑ behalf oF Tenant to com�ly with all applieabl� Laws.
�enant acknowEed�es and a�rees that neither Landlord's review and appro��al of Tenant's plans and speci�ieations
nor its observation or supervision of !he cons#ruction or installation th�reok shadl canstituCe any �varranty or
a�reement by Landlord that same comply with LaGVS or release Tenant from iis olaCiBatians undee this Section 1 i D.
E. FolloEwing the Commencement Dat�, an� so long as the Building is constructed in accorc�ance �vith
the Construction [3ra�vin�s (as defined ir� ExhibiE C hereto), and is d�li��ered in compliance �vith govemmental
la��s, ctsdes, ordinanc�s, regulat��ns, c�r any other appCicablz aukhQrities, includine, without limitation, the .AD.A,
Tenant shatl be w-holly responsible for any accommodatians or a�terations that are required by applicable
ga��ernmental cades, ordinances, rules, regulations and la�vs to be made t� the Leased Prertiises to accommodate
disabled employees and invitees of Ten�nt, incQutling, wiEhout linxitati��n, campliance w'stlY tl�e ADA (colleetively,
the "Aecommodatian �.arvs"}.
S�C. 12 FLR:`ITLIRE, F1�C`fliRES A,ND PERSQNAL PROPERTY': Tenant may remove its trade fixtures,
office supplies and movabl� offiee fumiture and equiprn�nt nc�t attached to the Bui�ding provid�d: (a) such renioval
is made prior to the terrnination of tfus Lease Agreement; (b} Tenant is not in default of any obligation c�r covenant
und�r this L�ase Agreement at lh� tim� qf such r�mo�al; a�d (c} T�nant prompt�y repairs all dan�a�e caused by such
remo�al. .�1� other property at the L�as�d Premis�s and any altera4ions or additions to the Leased Premises
{in�luding wall-to-�vali carpeting, panelin� or ot'�er wall caverina) and any ottszr article attached or a�;ced to th�
fl�aor, wall ar ceiling o€ tne Leased Pre�nises shall became the praperty of Landlard and shall remain upon and be
surrendered with the Leased Prernis�s as a�art thereof at the temlination of the L�ase Agreement by lapse of tirne or
othen��ise, Tenant hereby waiving all rigltts to any paymcnt or conzpensatian therefor. If, how��ever, Landlord so
reqtaests in writinb r,s,ithin sixEy (6�1 da}s prior to tlte [ermir�ation af this �ease A�reement, Tenant will, prior Co
terrninat'son of tl�is Lease Agrezment, remo��z any and all alteratiosis, addiCions, �xtures, equipment and progerty
placed or installed by Tenant in the Leasetl Prentises and ��ill repai� any damage caused by such remov�l. In
additian, Tenant shall be required prior to th� terminatiom of this Lease Agreement to remove alb of its
telecornmunicatio�s equipment, includiaig, but not limited to, all sw�tches, cab�in�, tiviring, canduat, rack� and boards
located in the Leased Premises. If Tenant does nc�t complete al[ removals prior to the terJnination of this Lease
Agr�ement, Landlord j�1ay remove such items (or c�r►tract for th� ren�ova( o€ such items). Tenant shall reimburs�
Landtord upon demand for the costs ancurred by Landlord in connectic�n there�vith and Tenant shall be c�eemed to be
holdinb over pu� to Sectsan 27 bel�w until s�ch time as such items have been remr�ved from the Leased
Prerriises. Titis Seccaon 12 shall survive the exparation crr termination of this Lease A�reement.
SEC, 13 SUBLETTI�G ,�►,YD ASSICNI�IE�iT:
A. In the event Tenant should desire ta assign this Lease A�reemznt or sublet khe Leased Prernis�s or
anv part thereof or allo�v same Co be used or occupied by others, Tenant sE�al� give Landlord vvritszn n�kice (��hith
shall specify the duration of said desired sublease or assignment, tl�e date sa�me is to occur, tt�e exact location of the
space a�Fected thereby, tfie propose�i rentats on a square foot basis cSiargea�le thzreunder and sufEicient inforntatian
of the proposec3 su6tessee ar assignee regarding its intended use, financial condiCian and business operations� of
sucEi dzsire at least forty-f�°e (45} cfays in advance of the date on �vhich Ten�nt desire± to make such assignment ar
subiease or allokv such a use or occupancy. Landlord shall then have a period af thfrty {30) days follo��ing receipt
oFsuch no[sce a�ithin whicli to ncatify �C�nant in t�,riting that Landlard elects:
([) in the evenc su�h assignee or su�lessee fails to m�et th� canditions set forch in
subpara;raph (3) belc�w, to refuse to permit Tenant tcr assagn this Lea�e Agreement or
sublet �uch space, and in such ease this Lease Aareement shall c�ntinue in �ull fc�rc� and
eCfect in accardasrce wvith the tern�s and conditions hereof; or
(2) to terrrninate thi, Lease Agreement as tfl the space so affected as of the date so specitl�d
by Tenant ia which event Tenant shall be re3ie�ed caf al] Qhli�ati�ns 4iereunder as to such
space arisin� from and after such date; or
{3) to permit Tenant to assi�n this L�ase r'�;reemeat or sublet such space fos the duration
specified En such notice, such approval not to be urrreasanal�ly witltk�eld if (a) the nature
l?
HOl�:2?98218. l?
E:�l�ik�it B
and eharacter of the propc�sed assignee or sublassee and Qhe principals thereof, their
business and activities and intended use of the Zeased Premises are in Landlord's
reasonable judgmznt can�istent with the current stas�da�ds of th� Buildinp (bj the foren
and subs[ance of the proposed sublease or instrument of assi�nment aae acceptable ro
Landl�rd (tivhich acceptance by Land�ord shall not be unreascanably vvithhel�� and is
expressly �ubject to all of tl�e terms and provisions of this Lease Agreement and to any
matters to which this Lease Agreement is subject, {c) Tenant enters inco a w
a�reemer�t with Landlord u•heeeby it is agreed that any rent �ealizeci by Tenant as a result
of said subiease ar assignment in zxeess of the Sase [Zent and Additionai Rent payable to
Landlard by Tenant under this Lease A�reement and any and a!1 strms and other
consicierations af whatsoe�°er nature paid to Tenant by the assignee ar sublesse� fo� c�r 6y
reason of such assigiunent or sublease, including, but not 6imited [o, sums paid for the
sale of Tenant's fistures, leasehold improvements, equipment, furniture, furnishings ar
other personal property en excess of the Eair mar�:et value thereoF{that is, after de�ucting
and giving Tenant credi� far Tenan['s reasanable costs directly associated there��ith,
including rzasonable brokerage feea and the reasonable cosa of rernodelin� or atherwise
irnproving the Leased Premises for s�id assignee ar sublessee but excludin� any free
rentals or the like offered to any such sublessee or assigne�) shall be payable to Landlord
as it accrues as �3d�itional Rent hereunder, {d) the granting oE such cansent will not
constitut� a d�Fault under any otf�er agreement to which Landiord is a party ar 6y which
Landlord is bound er cause Landlord to otl�erwise be in violation of any applicable laws
and {e] the ereditworttuness of the grops�sed assignee ar subl�ssee and the principa{s
thereof is acceptable to �.and�ord, in Landlord's sole discretian.
B. No �ssagnment ar �ublettin� by Tenant shal! be effective unless Tenant shall execute, ha��e
acknawledged and deliver to Landlard, and cause each sub�essee or assianee to execute, hace acknowledged and
deliver to Landlord, an instrument in forn� and substance acceptabie to Land]ord in wh�ch (i) such sublessee or
assi�nee adopts this Lease A�reement and a�sumes and agrees to perForm jointly and severaaly with Tenant, ail of
the otaligations of Tenant under this Lease Abreement, as to the space transferred to it, (ii) such sublessee t�r
assianee agrees ta us� and occupy the transferred space so�ely for th� purpose specified in 5ection 3 and athenvise
in strict accordance with th« Lease Agreement, and (iii) Tenant ackno�vledges and agreea that, nonvithstandin�
such sublettinb or assignment, T�nant remains directly and primarily liable for the performance of all the
obligatians oF S�nant hereunder (including, without limitation, ttte oali�ation to pay R�nt), artd Landlord shall be
permitted to enforce �his Lease �1�reement a�ainst Tenant or sueh subl�ssee or assignee, or bath, withor�t p�ior
demand t�pon or proceeding in any way aaainst any othes persons. Tenant shall, upon demand, reimburs� Landlard
for all reasonab€e expenses incurred by Landlard in �onr�ection ��ith a request made by Tenanc pursuant eo this
Sz�tion 13, including, without limitalion, any� investigations as to the acceptability of the praposed assi�nee or
sublessee, all lega� costs reasonably incui-red in conneckion with tkie �rantin� of any requested consent and a eharge
reasonably determined by I.andlprd to cover in-house time spent in respece af such request.
C. Any cons�nt by Landlord to a particular assiGnment ar subleas� shall not constitute tandlord's
consent to any other or subszquent assignment ar subtease, and any prnposed sub�ease �r assicnment by any
�ssignee or sublessee shall be subject to the provisions of Fhis S�cE'ton �3 as if it were a proposeci sublease ar
assi�nment by Tec�ani. The prohibition a�ain�t an assijnrr►ent or sublease dzscribed in this Section 13 sha11 be
decmed to include a prohibEtion agair�st (i) 'Tenant's r�tortga�in� or otherwise encumberi�g its leasehold estate, (ii)
an assiCnment or sublease whict� may occur by m�rger or operation of law� and (iii) pernutting �he use or occupancy
of the Leased Frerauses, ar any part thzreof, 6y anyone other than Tenant, each �f which shall be ineffe�tive and.
void and shaU constitute an Eti�ent of Default under this Lease Agree�ent unless consented to by Landlord in
�vritirt� in advance. For pueposes heeeof, the transfer nf th� ownershsp or voting rights irs a conirollin� interest of
th� voting stock gf Tenant {if �enant is a corporation) or the meRibershap interests of Tenaot (if Tenant i� a limaCed
liability com�any) or the transfer of a general partnershi� intere�t oe a majoriry af the limited partnership int�rest in
Tenant (if Tenant is a parcnership) at ar�y time thraughouf #he Term sha11 be deerned to be an assignment oF this
Leasa Agrzement.
l3
HOU:?798'_ l8. l2
E�hil�it B
SEC, �a FIRE �`iD CAS�A,LTY`:
�. In the event af a�re �r other cativaity an the Leased Premises, Tenant shall irrunediately piv�
notice t�ereaf to Landlord. If the Leased Premises sk�all b� partially destroyed by �ire or other casuaaty so as to
r�ndc,r tlte Leased Premises tr�atenantable in whole or in part, Re�t shall not abate. Landlord agrees 4o commenc�
and prosecute srach regair �vork pranzptly and with all due diligence; pro�sded, ktt�+v��'er. in the e�•e�jt such
destruction (i) results in total ar su6stantial damag�� to or d�structian ofthe 8uildin� and Landlord shall decide not
tr rebuild, or (ii) results in the Leased Premises 'being unt��antable in whole or in substantial part and the
rea,onab3e e�timation of a cantraetor selected bw Landlord as tc� the amount of time necessary to rebuild Qr re.score
su�h �escruction to the Leased !Premises exc�eds sit (b) mc�nths frorn the tinae such w�ark is conunenced, then in
either event, LandEvrd shalf have a right to terminate chis Lease Agreement effecti��e as of the date of casuaLty or
destruction, and upon such tern�nation, ali Rent owed up to the time of such destruction or termination shall be
paid by Tznant. Subject to r�asonable delays for insurance adjustni��sts, Landlord shall give 3�enant tirTi[kzn nottce
of its deaisians, estin�ates or e9ections under this SeGtion t-� wcithin six¢y (b0) days after any such dama�e or
des[ructian.
S. Notwithstandrng anythin; in this Lease Agreement to the cantrary, if the Leased Premises are
datnaged by fire or othes casualty resulting from the fautt ar negli�ence of Tenant, 4r the agents, empl�oyees,
kicensees, customers or invite�s of Tenant, such damage shall be repaired by and at che eYpense of T'�nant under the
direcFivn and sup�ruision of Landlord, and Rent shall �lsv cpntinue tvithout abatement.
C. Notwithstand'ing anything cantain�d in this Sectioa 1�, in no event shall Landlord be required �o
expend more ta reconsdruet, rzstore and repair fhe Suildin� tE�an 2he amount actually receiw�ed by tandlord from the
procezds af ihe �ro�erty insurance carried by Land]ore� and Landlard shall hati�e na c3u[y to repair or r�store any
p�rtion of any� alterations, additians, insta(lation or improvem�nts in the LeaSed Premises or thz d��oratians ther�to
except to the e:rtent t'hat the groce�ds of thz insurance carried by Landlord and Tenant are cirnely receiu�ed by
Land�ard. If Tenant desires any other aciditional repairs or r�storati�n, and if Landlord consenis th�reto, ic �hall be
done at Tenant's sol� cost and expense ss�bject to all af the applicable provisions of this Lea�e .Aareement. Tenant
acknowledges that Landkord shali be entiEl�d to the �ull proceed� �f anlr insurance �o�era�e �vhether carried by
Landlord ar T�n�n[, for damage to any a[terations, �ddatiort, installation, im�ravements or dec�ratioas whicfi would
becom� the La�dlord's property upon the terminati�n of this Lease Agreement.
SEC. 15 CONDE�I�i �;TION:
A. If durin� the T�rm of this Lease A�rcement all or a substantial part c�rf the Leased Pr�rnises should
b�: taleen for any public or quasi-pa�blic use under any govertt,mental ]a�v, ardinance or regulatian or by ri�ht af
emin�nt domain or should be sold to the condenining authority under ttrreat of condemnation (in each case, a
"Takinb" or "r['akera," as the conte:�t requires), ttus Le�se Atreement shall tecminat� and tl�e Rent shall be ahated
durinv ahe unexpired portion af this Lease .�greemenk, effective from the dat� of the Takinb of the Leased F'remises
by the condemning auth�rsty.
B. �f less d�an a substa�itial par[ af tlie Leased P'remises is Taken, Landlord may, a� its election,
temiinate this Lease Agreeattent as of thz date of Che Takin� or Che datz "I�enant is d�prived flf possession of the
Leased �remises (��,�hichzver is later). Landlord's el�ction ta terniinate this Lease Agre�ment is e�cerc;isable 6y the
giving of �STitten notice to Tenant ��,•ithin sixty (6�) days a�Fter the date af the Taking. [f this Lease ,AQ�een�ent i� not
temiinated as a reiult of a Taking, Landlord shall restore the Zeased Premises remaininc after t3�e Takin� to a
tenantable condition. I�urinn the period of resCoration, Base R�nt shall b� abated.
� Landlord �nd Tenant shall each b� entitSed tu eeceive and retain 'sucli separate awards and gortions
oF lump sum a�vards as may be a�l�cated to their resp�csi�°e 9nterests in any condemnation prc�ceedioigs. Tlie
termination of this Eea.tie shali not affzct €he ri�hts aF the respective parties to sueh a���ards.
14
HDU:2793?I8_ I?
��hibit B
SEC. 16 DEF�CLT BY TEN?u`'riT: The occurr�nce oF any qne or mare of the follarving shali constitute an
"�vent af Defau't" under this Lease A�reement:
r'�. The failure of Tenant Ic� pay any Rent as and when due under this Lease Agreement, and the
continuance of sueh failure for fifteen ( l5) days aftzr t��ritt�n notice thereof from Landlord, other than by reasc�n of
an Event of Nonappco�riation;
F3. The £ailure ofTenant to perform, comply �vitl� or observe a�ny of the attter covenants ar eonditions
co�tained in this Lease A�reem�nt and the cflntinuance of sucE� failure for the period �f kime as may be specefied
elsewhere in this Lease .��reement for such specific covenant or condition, or shotsld no periad aFtime be specified
els�where in this L.ease A�reement witt► respect ko sueh speci�ic cavenant or conciiti�n, a penod of t�venty (2fl} days
af[er writtzn notice to Tenant; or, if such failure cannot reasonably be cured within said t�r�enty (?0) day period
despite Tenant's diligent good faith efforts, the failure of Tznant to pramptly co�aunence its dili�ene ;ood faith
efforts !o eur� such failure within said tweney (?0) day period andlor the continuance of such faalure for a period of
t�venty {20) days not�i�ithstandin� Tenant's efforts ta cure;
C. Tenant shall fail to coaCinuously agerate 'tts business at the Leased Premises for th� perrnitted use
set fa�rth in Section 3, u'hether or n�t Tenant is in defau�t on payrnent of Rent, for any period or�ater than thiriy (3fl}
consec�stive days;
D. A decree or order for reli�f is entered by a court having jurisdiction o� Tenant in an involuntary
case under the federal bankruptey �aws, as n�w or hereafter constituted, flr any other app(icable federa] or state
barilcruptcy, insalvency or other si�niiar 1a���, or appointing a reeedW°er, liquidatar, assignee, custadian, trustee,
sequestrat�r {or sim'slar officEal} of Tenant ar for anv substantial part of Tenant's property, or ordering the windin�-
up ar li�ui�atio� caf eilher of said partie�' affairs,
E. The Tenar�t shalE ("r} become inso3vent; (ii) generally fail to pay its de6cs as suc� debts beco�ne
due; {i'si) make a general assignment for the beneftt of credilor�; (i��) commence aay case, proceeding ar oth�r
action seekin; to have an order for relief entered on its behalf as a debtcsr or to a�l3udicate it as baeikrupt ar
�solvent, or seeking r�oroanization, arrangernent, adjustm�nt, liquidatian, disso�ution or composition of it or its
debts under any law r�latina to banl:ruptcy, insolvency, reorganization ar retie� of debtors or seekang appointn�ent
of a receiver, trustee, custodian �ar oth�r similar officia9 for it or for all or of any substantial gart of its property; or
(vj take any action to authorsze or in contempCation of any of the actians s�t farth a�ave �n this S2ctian;
F. The attempt by Tenant ta assian this Lease A�reement or ta subtzt all or any part oF the Leas�d
Premiszs wi[hout the priar �4ritten eonsent of Landlard in ac:cardance ���ith Se�Cion l3;
G. Any halding o+:�eE $y Tenant in accard<t�ce wiEh Sectiost 2� with respect to all or any portion of t�e
Leased Premises after the expiration or termination of the Lease Agreement; or
H. Tenant sliall fail to discharge any li�n placed upan ttse Leased Premises within twenty {30) days
after any such ]ien or encumbrance is filed against the Leased Premises,
"Appropriatian" shalt mean the adoption by^ the 8�ard of Regents �f T�nant of a budget or art�endments to
the budget for a Fiscal Year which includes the FAent and other payar�ents requisec! or efected, if any, ta bz made by
Tee�ant under this �zase Agre�ment during the respecti�e Fiscal Year of Tenant.
"Av�ilable Funds" shall mean money Appropriated by th� Board of Regents of Ter�ant from ma�ey
appropriat��i by dle L.�gislatur� of Ehe State of Texas that may la�ti€ully be ti5zd 4v�th respect to any pay�nient
obli�ated er permi[ted under this Lease ,�greement, ,�rut�ided, hr�x�e+'er, that upan r�ceipt pf an apprc�ving opinion of
natio�ally recagnized bond couns�l, AvailabQe Funds sha1l also include any other fund� Appropr�ated by Tenant diat
are hzreafter determined to b� availabl� far the payment of Rent as a resu�t of a final, n�nappealable jud;ment of a
cou�t of competent jurisdiction. le�islatian h�reaftee enactzd c�r oth�r c�ange in T�xas lau•.
13
HOU:2798? l �. I ?
E�hibit B
"Event of yonappropriation" shall Fiiean either of (a} thz failure of the Board of Regent� o� T�nant to
Ap¢ropriate #iam Availabl� Futids suffiGient funris to pay the Rent to be paid hereunder during the upec�ming Fiscal
Year; or (ii) the reduction of any Appecspriatiar� to an aniount that is ins�fficient to p�miit Tenant to pay Rent.
"Fiscal �'ear" shall mean the fisca) year of�en�nt, being the periad bzginnittg on S�ptember 1 artd endin�
s�n Au�ust 31 of the f�llc��ving year.
SEC. i7 R'E�TEDIES QF' L.-1,:�iDLORD UPD�J EVE�T OF�' DEF�L�L.,T:
A. Upan anv Even[ of �efault, LandJqrd may e�ercise any one c�r more of the follaw�in� d�scribed
rem�di�s, in addition to all otE�er rights and remedies provided at lawv or in equity:
(1) Tern this Lease Agreement by written ncs�ice to T'ena�s� and forthwi�h repo��ess t}te Leased
Premises and be �ntizled to recover fe,�•th�i�ith as damages a sr�m of rrtoney equal to Ehe total of (i} the cast af
recovering khe [.eased 1'remises (including attomeys' fe�:s and costs af suit), {ii) che cost of remo�in� and storipg
any personal property, (ui) the unpaid IZent earneci at the time of terniination, plt�s interest thereon at the rate
�iescri6ed in Sec�gean SG., (iw) the present value (discounted at the rat� of eight pereent (3°0) per aru�um) of the
balance of [he Rznt for the remainder af tEie Temt less the present va�ue {discounted at the same race) of ctie fair
mark�t rental `°alue of the Leased Premises for said peric�d, tal:ing into aceount the gerio�i of ti�e the I.eased
Premises will remain vacant until a n�w tenan� is obtained, and the cost ta prepare the Leased Premises for
occupancy and the ott�er cosC� (such as 9easin� canunissions, tenant improuement allow�ances and attomzys' feesj tq
be incurrcd by Landlord �n connection there�vi�h, and (r;�} any other sum of mon�y and dama�es owved by Tena�t to
Landlord under this Lease A�reement.
(�) T�rminate Tenant's right of pa�sessian (but not this Lea�e Aereement} and may repas�ess the
Leased Premises by fc�rcibie detainer sust nr otherwise, without theseby° rel�asina Tenant from any liability
'hereunder and wiChout demand ar notice of any kind to Tenant and wit�iout terminatin� this Lease Agree�nent.
(3} A1ter any and all locks and other security de�ices ac th� Leas�d Premises, tvith or without
terminatine this Lease Agreement, and if Landlord does sa, Land9ord shal! not k�e require� to provic�e a new key or
o�hzr ace�ss right to Tenant unless Tenant has cured a1t Events of Defau�t; providzd, however, that in any such
instance, durinQ Landlord"s normal business houes and at the convenience of Landlord, and upon the ��ritten eequest
of Tenant accornpanied by such written �vaivers aiid relea�es as Landlord mav rec�uire, Landlard will escort "i'�nant
or its atsthorized personnel to th� Lease� Pr�mises ta retrieve a�ny personal belangin�s or other property of �ersant.
The prnvisions of Ehis Section ! 7.0 are intended to override anc� concrol any conflicti�g provisions of the Texas
Praperty Code.
S. If atter an Even4 of I�efault T�nant abandons the Leased Premises or vaca#es th� Leas�d Premises,
or �and�ord repossesses the Leased Premises ��'rthout temiirsatin� th� Lease, Tenant, at Landlord's option shal] be
lia�le for and shall pay Landlord on demand a11 R�nt and other paymenCS o�ved to Landlwd liereunder, accrued to
the date of such repossessic�n, plus all amourots requir�d ta b� paid by �enant to Landlord �xr�til such date,
diminished by a19 good funds received by Landford chrough reletcin� of the Leased Premises during the remainin;
Term. Accions to cotlect amounts due by 'I'enant to Landlord under this Section l7C may be brought f'rom time to
ti�ne, on ane or more occasions, tvithout the n�ecessity of Landtord's wai�in� until ex�iration of khe Tenai. Landlord
agrees that Landlord will use `"o6jectively reasonable ef�orts" to relet ae aitempt to relet €he Leas�d Premises in
whole or in part and for �ny� period, to any tenant, and for any use and purpose as c��termined by Landlord in its
cornmerciall_y reason�biz discretio« if the ev�nts sei forth abc�ve occur. The ter[n "objectitiely reasanable e�fc�rts"
by Landlord shall 6� met if Landlord, or La�dlord's a;ent, has ta[cen the f�l[owinb acticans wathin thirt}� (30} days
after Tenank �0 6on��r occupies or has pc�ssessicsn of th� Leased Premises: (i) place a"For Rent" or "For Lease"
sign at t]te Leased Premises or at a suitabde sit� on the �r�per�y, (ii) requcat in writing that a licensed real estate
broker list the Leased Premi�es as available for lease and that such broker use its reasanabl� and ordinary effort� to
reiet the Lea�ed Premise�, in wha[e or ia� part, incladin; but not limi[ed to listing ¢he Lcased Fremises in a cawltiple
lisFing sen�ice and ad���rtising the Leased Premises as being �or leas� in the Houston Businzss Joumal at Eeast ottce
per month, and (iii) sha«°in� the Leaseci Peemises to any prospective tenant �vhc� rec�uz;ts tU see the Leased
['remises. i.andlard may decfine to relet th� Leased Premises to a prospec€i��e tenant ��;�to is unatale to demonstrate
the sani� financial capaeity that the Landloed would requirc as a condition to leas� other space in the Building to a
16
HQII:?798213.13
Elhibit B
praspeciive tenant and may decline to lease to a prospec4ive tenant sf such praspecti��e k�nant's business is not
consistent with the tenant mix of the Buildsng. In any proceedin�� to thss Lease Abreement under Ehis Section 17,
Landlord shall be pmsumed to ha�e used objectively r�asonable efforts te, relet the Leased Premises and Tenant
expressly assumes �» burd�n of proof to �emonstrate athenWise. Tznant also recognizes €haC the va�lue af the
Leased Premises after an E�,•er�t of �efae�lt by T�nant is reduced by various factors, includin;, but nc�t 9imited to,
Landlr�rrl's erpenses of reletting the Leased Premises, whether tir not such expenses �n�ere actually incurred or paid
out of pc�cket by Landlord (Tenant agrees tEiat while sucF� expzndituces by Landlord might increase the ��alu� af the
Lea.�e�i Premi�es, Landlard is expre�sly nc�t required to expenc� suc�1 sums to relet the i.eased Premises, ather thart
nom�saf cQn�missions and lega] fees to tenalcze a l�ase); to the lengih of time remasning on tiie Lease Agreement;
and the condition of the Leased Premises at th� time of Tenant's default and abandonment t+r vacatina the Leased
Premises. I� no event tivill Tenant be entitled to any excess if any rent obtaine� by relettin� o�er and above the
�ent herein reserved.
C. All a�reements and provisians Co be performed by Tenant under a6ry of the ¢erms of this Lease
A�reement sha�l k�e aC Tenant`a so[e cost and expense and �vithout any abatemznc of R�nt. 1f Tenant shall Fai] to
pay any sum oE money. othea than Ba�e Rent, r�quired to b� paid by 5t hereunder or shall Cai] [o cure any default
and such failure shalf con�inue for thirty (30} days after notice thes�eof by Landlord, then Landlcard may, b�mt shall
not be ob8igated so Eo do, and without waiving or releasing Tenant �tcrrn any abligations, make any such payment
or perform any such act on T��ant's part. All sum, so paid by Landlord and all eQSts incurred by Landl�rd in
taking suci� action shall be deemed Additiunal Rent hereundc:r and shall be paid ta Landlord on demand, and
LandEord shall have {in addition to all other ri�hts and remedi�s of Land3ord) the same ri�hCS and remedies in the
event of the nora-payment tl�ereof'by Tenant as in th� case Qf default by `Tenant in ttye payment of Rent,
b. Esercise by Landlord of any one or mare remedies hereunder granted or othen�ise available shafl
not b� deem�d to �e an acceptan�e by Landlord af surrendzr of Ehe Leased Premises by Tenant, whether by
aa eement or by operation of la«�, it being undzrstood that s�ach surrender can be effected only by the written
a�reement af Landlord and �enant. Z'enant and Landford fusther agree that forbearanc� by Landlc�rd tQ enforce its
rights pursuan[ to this Lease .Aareemerrt, at law or in equity, shall not be a wai�rer of Lancilord's ribht to enfflrce one
or more of its ri�hts in connectian "�ith any subsequent Event of'i7efault.
E. Landlard shall als�+ have the rvbht to rerriove fram the Leased Premises (�vi[}�aut the nece�sity of
obtaining a distress �.varrant, wwr'st of sequestration Qr Qther ie�al process) a9l or any portion of th� fumiture, fLCCUf�S
equipment and ofi�ier property located tliereon and either deltwer the same to �Cenant at T'enant's main campus at
43�0 Caihoun �Qad, �-douston, Texas 772�4 or pla�e same in storaoe at any location in Harris Countv, Texas, or
any other place reasflnahly con� tc� Landlord. And in such event. Ten�nt shall be liable to Land�ord for all
cos4s incurred bv La�dlord in conn�ction u�ith auch delirery or remaval and stoeage and to the extent authoriaed by
the con�titution and kaws of the State of Tzxas, shall indemnify and ho9d harmless LandMord from a1C lo�s, damage,
cost, expense and liability in conneLtian with such removal and delivery or stora�e. Landlord shall have the right
to relinc�uish possession of all or any portion caf such fumituee, fixtures, equipment, and other propertY to anv
person ("Claimant") claiming to be entitled to passession thereof who presents to Landlord a eopy of a�y
instrument repr�sented to L�ndlord by Claimant to ha��e been execut�d by Tenant (ur any pred�cessor of Tenant)
gsanting Claimant the right under ti�arious circumstances co take pc�ssession of such fumiture, fi.xtures, equip�n�nt,
or ather propzrty, �vithout the necessity on the part of Landlord t�s inquire inta the authzn�acity of said instrument
�opv of Tenant"s (or Tenant's predece5so�s) siQnature thereon and without the n�cessity of Landlord's making any
nature of irsvesti�atic�n or inquiry as to the validity of the faetual car leg�l ba�rs upon tivhich Claimarat purpo�ts ta aet.
To ilte extent authurized bv th� eonstit�,tivn and laws of thz �tate of Texas, Tenant ���ill indemnify and hold
harrnless Landlurd from all cc�st, €�pense, loss, damage and liability incident to Landlord's relinquishment of
pc�sses,ian caf al� or �ny portiori of such furnits�re, tigures, equipment or other property lo CSainaant. The rights of
Landlard herein siated s�all be in acldition Co any and alf other riglits u�i�icY� Landl�rd has or rmay hereafter have at
1aw or in zquity, ancl �Tenant stipulates and agre�s [hat th� rig�ts herein aranted La�dlord arz cornmesctally
reasonable.
F. Notwithstandin� anr�thin� in this Lease AYrz�ment ta the contrary, all amount� pa}°able by T�naiac
to or on be}aalf of Landloed under this Lease Agreem�nt, �vhether or not express�y denorninsied as Rent, shahl
GOnStiCUCe Ren[.
17
ii0U:27�8� 13.1?
E�hibit B
G. �xcep! as othen�^ise zxpressly� provided for in this Lease Agreement, in the event �hat Landlord
fails to gerforn� any of its obii�atinns hereunder, and such failure cantinues for a period of thirty (3{J} days afier
���ritten notice thereof frc+m Tenant, T�:nant's exclusiti•e remedies shall be (at Tenant's optiu��) either an action for
inj�mcciwe relie�'specifac performance or damages (Tenant hereb�� waivin� the benefit of any �av��s �ranting it a lien
upon the praperty of Landlprd and�'or upon Rent due Landlord). Before T�nant comn�ences any lega] action
a�ainsi Landlord fQr a defaul�, Tenant will give Lar►dlord at ]east thirty (30) days prior uritten notice specifying the
default with particularicy, and Land➢ord sh�ll thereupon ha�e thirty (30) days in �vhich to cur� the default, or if Ehe
defau[t is not reasona6lv susceptible of being cured wi[hin 30 days, then such period of time as is reasonably
r�eeded to cure che default so long as Lancilard conintences t�e remedy w�ithin the 3D day period and diligendly and
cuntinuousl}� prosecutes the remedy to completion. L,'pless and un�il Landlord fails co so cure th� default after
natice, Tenant shall npt have any remedy or cause of action by reason thereoE All ❑bliQatians of I.and[ord
hereunder will be conscruzd as covenants, r�ot candi�ions, and all such ob�igatians will bz binding up�n Landlord
only during the period af Landlord's o4vnership of �he Leased Premises and not thereaCter. �'+Il oblig�tinns af
Landlord under t,his Lea3e Acreemerst will be subject to enfarcement through an action for specifie perfarmance or
injunction as ardered by a court of competent jurisdiction. L�nder c�reumstances wherein the vio�ati€ans o� ttus
Lease Agreement create an emer�ency situation and threa¢�n T��ant's abiliry Eo use the Lea�ed Premises for state
�uzposes, Tenarst may correct all or ar�y� par� of Landfard's violations and invosce the actuaf and reasonabl� cost of
correctiti�e aetions upon giving Landlord wTitteo nfltice of suc� emergency arrd an accurate and co�nplete statement
of costs to correet. This extraordinary remedy l��ill o�ly be undertaken in the best interesi of the state wE��n a
rel�catinn €al1��GVinQ tzrmanat�on t�auld be disruptiF�e to T'enant and detrimental to its statutory functions. The term
"Landlord°' shall mean only the owner for fhe time being of th� Leased Premises, and an the euent of [he transfer by
such ow of its interest in the Leas�d Premises, such otivner shaEl [h�reupon be releas�d and discharoed from all
cavenants and abliQations of tf�e Landlord tf�ereafrer aecruing, but such covenants and obtigations sha�l be bindiztg
during the Teenl upc�n each ne�v owner far tl�e duration of such o��•ner's otiE�tership. In the event of any breach or
default by Landloed in any term �r provi�ion of [has i.ease Agre�ment, Tenant a�rees t� look solel}' t�o the equity or
interest then a�vned bv Landlord in the �.eased Pr�emises or �uildin;; hoE�•ever, in na event, shall any deficiency
judQment or any money jud�ment of any kind �e soubht or obtained against Landl�rd.
SEC, 1$ REIIEUIES OF Lrs,_�iDLORD [;PO� E`V'Ei`r'T OF tiON�,PPR�PRiATION:
r1,. Tenant sha91 pro� i�e Landlord with writ4en notice 4�°ikt�in ten (10 j business days af the occurrenee
of action by the Board of �egznts of Tznant �r�hich ct�r�stitutes an Event of tionapprapriatiun. If funds s�ffici�nt t�
pay the Rent due during the next succeeding Fiscal Year aee na! Appropriatec�, tlnen this Lease Agreement shall
terminate effzctive at the end of the Fisca] Year for �.��hich sufficient funda have been Apgropriated (and, in the case
of a reduction ot an A�propriation to an amount Qnsuffcient to pay itent, �vhich terminatian shall be self-opesative
without notice ar demand. Upon the effecti�•e date of tern�ination under this Section l$. Tenant shall peaceably
surr�nder possession and cont�ol of the Leased Premises to Landlord as requirecf by the other terms af this Lease
Agreement.
S. To the ettent allaE�•ed 6y Isw, iF ihis Lease A�reement is terminaced pursuant to t,4►►is S�ctiou 13
and Tenant fails time]}� to surrenc#er possession or control of` the Leased PreEnises to Landeard, Tenant, as a tenant
at sufferance, �hall �ay, from and to the extent �f A�;�ailable Funds, darnages in an amaunt equa] to 15Q°o of the
Rent that accrues on a daily basis Fc+r Ehz period fr�m th� effective date of termination [o the date of d�livery of
possession and control of the Leased Premises.
18
Hpl, 2793? 18.1'_
E�1lihir B
SEC. 19 LIEiti F�R RENT; [RESERVED.]
S�C. 20 I�d\-�'�'AIVER: 'tieithe� acceptance of Rent by �andlord nor failuEe by Landlord tcs exercise available
rights and rzmedies, whether singular or repetitive, shall consti[ute a�4'aiver af any of Landlord's ri�hts hereunder.
4'vai��er bv Landlard of any riglit for any Event of Default of T�nant shall not constitute a wai��er of any right �or
either a subsequent Event of Default af the same abKigation or any other �vent af Default. `�'o act or tivng done by
Lanctlurd or its a�ent shall b� d�emed to be an acceptance or surre�de� af the Leased Premises and no a�reement ta
accept a surrender af the Leased Premises s'hall be valid unless it is irs writing and signed 6y a duly auihorized
ofticee or agent af Landiord.
SEC. 21 COi�IPLI�.'�lCE W'ITH I.�l�'VS: `I'enant shalk coz�bply ��ith, and T�nant shall cause its visitors, students,
�mployees, cantract4rs, a�ents, inv`ttees and ]icensees to comply with, all Laa's relatin� ta the use, eondition or
occu�pancy of �he Leased Premises.
SEC. 22 A►SSIGN�IENT BY L.4,'VI}LORD; I.[«ITriTIQi�i OF L:+u'YDL�RI3'S LIt#B[LITY: T`o the extent
allowed by [he Texas Constitution and the laws oE the State of `texas, Landlord sha]I have the ri�ht to transfer and
assa;�n, in whnle or in part, a[l i!s ribhks acad obligations hereund�r ared in the Leased Premises, and in sueh event and
upun such transfer n� further liability or obligation sha�ll thzreafter accrue against Landiord hereunder. FuRhermore,
Tenant specifically a�rees to took sc�lely to Landlord's interest in the Leased Premises for the r�ecovery of any
j�dgment from Landlard, it besn� abreed that the Landlord Parties shall never be persona3ly ]iable for any sueh
jud�ment. "I'his provision does nat eaneel, vaid, terrninate or oRher�vise alter Tenant's right to acquire the Buil�ling
and the Property, either by exerci;e of the Purchase Clption pursuan6 to Section 5? or at the expiration of Ihe Term
pursuant to Section 53.
SEC. 23 S�,T�'ER.�BILITY: This Lease Agreement shail be construed in accordance with the ]a��s of the State of
Texas. If any clause or pravision of this I_ease Agreement is illegal, in��alid ar une�Forceable, under present or
iisture la��•s effective during the Term hzreaf theu it is the intention aE the parties'hereto that the remais�der of this
L�ase AQreement shall not be aff`ected thereby, and it is a�so the intention of both par�ies that in tieu of eaeh claus�
or provision �that is sllegal. invalid or unenfor�eable, there be added as part af this Lease Agreement a clause or
proi�ision as simiEar in terrn� to such iilegaV, invalid or une�tforceable clause or gro��ision as rnay be passible and be
leval, valid and enforceable.
S�C. 24 SIG:`�IS: 4ther than the signage expressly referred to in the Plas�s, Tenant shalf not place, instal! or attach
any si�nage, �.�indo�t' or doc�r Better�nC, decals, dd�srsdowv or storefront stickers, advertising media af any type, exterior
lights, os esterior dzcorations, ballc�ons, flags, pennants, bann�rs, paincings, nr bars on windows, ar security
installations on or to the Leased Pre�tises ar tlie Suildin� w�ithout Landlord's prior �.�.�ritten approval, w'hich shall not
be ur►�ea5onably withheld. Qther than the signage expressly refereed [o in t}te Plans, or othenvise consenked to by
LandEord, Tenant st�all repair, paint, and.�or replace any portian of the Le�sed Premises or ehe Bui4cfing dama;ed or
altered as a resuit of its sibnaae w•hen it is removed (includin�, without limitation, any discoloration of the Building}.
Landl�rd shali not be required to notify Tenant of whett�er it corssents to any sign unfil it has received detailed, ta-
sca�� dra�wings tt��reaf specifying design, material compositioc�, calor scheme, and methad of installation, and has
had a reasonable opgortunity to review them.
SEC.25 �i3CCESSORS r1tiD ASSIGNS� Landlurd and Tenant agree that a]! pra��ision� hereof are ao t�e
constnaed as ca��enants and agreen�ents as thau�h the �vorris im�arting such covenants «�ere used in each separate
para;raph hereof, and that, except as reskricted by the provrsions of Seetion l3, this Lease Agreement anti al� eh�e
covenants herein contained shall be bin�iing upon the parties hereto, thcir eespective heirs, legal representatives,
successors and assi;ns.
SEC. 26 SFJBOR[)IN.�TION: T�nant aorees that iks inte�esi under ¢his Lease Abreement shall be subordinate to
any n�artgage, deed of trust or semilar sec:urity in6erest now or hereaft�r placed upon the Leased Premises or all ar
any purfiota af [h� ��as�d Premises by Landl�rd sf the mortgagee or b��eficiary undc:r said deed of trus� or lender fcrr
w°hos� bcnefit any aCher seeurify interest is created s� elects; prod however, that th'ss sentence shall be self-
o�aerative and no further in�trument of subordinatic�n �eed be r�quired by any �wner ar hqlder of any such m��rt�age,
deed of trust ar security a;reentenL Upor� notice to Tenant of such electiot�, Te�ant will execuke any instn�ments
required tQ evidencz such su6ordinatiart. Lilcewise, such mort�agee or beneficiary under said deed of irust or lender
19
HOU:?748'? 13.1?
E:�1libit B
for t��hase bene�t any ather security interest is cr2ated may elect, by notice to Tenan[, to rnake khis Lea�e Abreement
superior ka such mort�aoe or deed of tausi or other 5ecurity inteeest and in the event of sucfa election, Ten�nt ivill
eteeute any instr�menCS required to evidence such superiority. In the event of the enFarcernent by the tn�scee, the
beneficiary or the szcured party under aray such rnortgag�, dee� of tnast or security agreemznt of the re�rtedies
provided far by la�v or by such morigate, dzed of trust or security aarzement, Tenant, upon request of Ihe party
aucceedirr ; t+� the interest of Landlord as a r�sult of sr�ch enEarcement, �vil[ automatica$ly becon�e the Tenant af such
successor in interest without any chanee in th� �erm,; or othee pTO��isians aE this Lease Acceement; provided,
haEUeti�er, that such successor in intzrest �hall not be (a) bound 6y any payment of Rent far rnore than on� month in
advance except prepaymen[s in the nature af security� for the pertormanee by Z'enant of its obligats�ns under this
Lease Agre�mznt, (b) bound by anv amendment ar modification of tllis Lease .�greement made without the written
con.ient of such lender or successor in interest {c) liable fc�r any previous act or omission af the Landlord, {d) subject
to any credi�, depnand, elaim, countercl�im, oi�seA ar defease which theretofore accrued ro Tenant aoainst the
Landlard. or (e) responsible for any monies cswing by Lan�llord to T�nant. Upon r�quzst by such lender or succzssor
iut interes[, whether before or after the enforcem�nt of its rzmedies, Tenant sha�l execute and deliver an in�trunient or
ins�rum�nts contirr�ning and �vic�er�cing the �ttonu�ent hzrein s�t forth. This Le�sz Agreement is further subject to
and subord'enate to all matters of record in Iilarris County, Texa�.
SEC. 27 'i�.'�� PROTEST: Subject to Szctiun 7, Tenant �i-ai���s al] ri4,hts under the �T�ras Praperty Tas Cod�, no�v
or hereafter in effect, including all ri�hts unaier SzcFion 41.�13 theceof, granCing te� tenants of real praperty o� lesse�s
t�f tangiblz personal praperty the right to prote�t the appraised value, or rec�ive n�tice of reappraisal, of all or any
part of ihe Prop�rty or the BuiidinD, irrespecti��e of ��,�het�er �.andlord has elected to protest such appraised 4alue.
To the extent such �sraiver is prohibited, Tenant appo'snts LandVord a, its attorney-in-fact, �oupled with an rnterest, to
appear and take all actions on behalf of Tenant which �I'enant n�ay take under the Texas PraFerly Tax Code.
Landlord agrees [o use commercially rea�onab�e judgment in determiFi�ng whether to file tax pratests on its own
bzhalf.
SEC. 28 H�LDI?+iG OVER: At the termina�son of chis Lease A�reem�.nc t�y its expiration or otherwise, Tenant
immzdiately shall delider possessian of the Leased Premiszs to Land]�rd with al� repairs and matntenance required
herein [o be perfoameci by Tenarnt completed. If foe any reasc�n, Tenant retains possession of the Leasecl Premises
after the erpiration oe termination of thi, Lease .Agreement (is�cluding any period o£ time spent by Tenant en
performance of the repairs and maEntenance required herc:in), without the ex�cution of a new ]�ase agreement, such
possession shall bz suhject til termination by eitltzr Landlurd or Tenant at any time upon not less than ten ( l0) days
a�ivance written notice, and all of the other term� and provisions af t�iis Lease A�reenient shall be appl¢cable during
such per�ad, excepc tttat "Tenant sha€1 pay Landlord, upon de►nand, as Rent for ihe peric�d af such possession, an
amount equal to 150°0 of the dtent in effzct on th� date af such ��rrninatian, co�rtputed on a daily b�sis for each day
�f s��h period an� includina both the Base Rent and Add'rtional Rent set forth herein, i�o haldin� ower by Tenant
shall operate to estend this Lease A�reement except as oRhenvise expressly provided. The preeeding proWisions Qf
this S�cticrn 2$ shall noc be construed as cans�nt for Tenant to retain possession crf the Leased �remises in the
absence of �u� consenz thereto bv Landlorci.
SEC. 29 I\dEPE\DE`T OBk.IGA�It)N TO P�.�' RE;�T:
A. It is t��e intention csf the parties hereto that the obliQations �f La�tdlard and Tenan6 her�under s9�a11
be s�parate and independ�nt coti�enants and a�reements, that the and a11 uther sums paya�le by Tenant
hereunder shall cantinue to be payable in all events and that the obli�ations of Tenan[ hereunder shall continue
unaffected, ur�l�s� the requirzn�ent co pay or perfr�n� the same �hall have bGen tern�inated pursuant to ar� express
prouision �f ihis Lease .�,greement.
B. Eccep[ as other�a-ise expressly pro�ided heresn, Tenant ti�,�ai�•es die right (a) ta quat, tern�inat� or
suu�render ttus L�ase A�see►tlent or ih� Leas�d �remises or an}� part thereof, Qr (b) to any abatenient, suspensi:�n,
deferment or reductian of the Rent or any other surns p�yable under [his L.ea�e Agreement.
SEC. 30 1�iDE'�1`iIT1t'; RELEASE A:�ID 1��'Af�'ER:
A. Su6ject to th� eonstitution and la«s af qh� State �f Texas, Tenant hereby agrezs to indernnify,
protect, deFend a�d hold the Landlord Parties harnil�ss trom and a�ainst any an� all liabilities, claizns, causes o�
3 (�
HO U:? 79g? l 3. l 2
E�hibit �
action, fines, dama�cs, suits and e.�cpenses, includin� attorneys' #�eea and necessary litsgation exp�nses {colleetively,
th� "Claims"), arising from Tenant`s use, occupancy or enjoyment af the Leased Premises artd i95 facilities for chz
crnduct of its business or fram anv activity, work or diir�g done, permitted, omitted or suffered by Tenant and it5
partners, officers, directars, empl4yees, agents, servants, cnntractors, custom�rs, licsnsees and invitees in o� abuut
the Leased Premises, and Tenant further agrees to ind�mnify, protect, defend and bold the Landlord Parties
harml�ss from and a�ainst any and a!l Claims arisin� from any breach or default in the perforrnance of any
oblagaci�n nn Tenant's part to be performed under the terms of this Lease A�reement or arising firom any
negli�ence or ��illful misconduct of Ter�ant or any of iis pariners„ officers, directors, zmployees, agents, se�•ants,
con[ractors, cu�tomers, licznyee� and invi¢ees. In case any action or proceeding 5ha(1 be brought against the
Landlord Parties ba reayon of any such Claim, Tenant, upan ncziee from Landlord, shall provide a separat� defense
to sarne at Tenant's so9e cast a�r,d espense by the Of�`��e of the r�ttorney GeneraQ of Texas. Fhe indenmity
obligaEions of Tenant under this Section 3� shall sun�i��e the expir�tion or earlier temunation af this Leas�
A�reemens.
B. Landlord �hall not b� 1ia61� or responsible ta Tenant for (a} any loks or darnage ko any peoperty or
person occasioned by theft, criminal act, Fire, act of God, pubfic enemy, injunction, riot, strike, insurrection, war,
cou�t order, requisition or ordzr of governm�ntal body or authority, Qr any cause beydnd Landlord's cantroi, or
(b) any dama�e or inconveniznce which may ar�se through repair or alteratian of any part of the Building rnade
necessary by virtue oF any such cause; provided, ha��•ever, Laadlard s�all use commercially reasanable effarts to
mirrimize such dama�e c�r inconv�nience to Tenant, except as set farth in this Lease A�reement and the praperty
insuranc� policy.
C. Each ind�nuu�catian psovision contained in this i.ease Agreement, as it applies to Tenant's
indemnitication of Landlar�, i� given by Tenant and accepted by Landlord subject to Tenasit's sav�reign ernmunity
as provided by� tE�e �onstitution and the la��,�s of the State oF Texas at the time such �lain�e for indemnification arises.
S�C. 31 L"VSC,'1�YCE: Tenant shall satisfy the insurance requirements as mc�re particularly described on Eshibit
E attached hereto and made a part hereof far all purposes. In na event shall Tenant's liabili�y u�der th�s Lease
A4reement l�e limited by the amount pf ins�rance required to bz cam�d under Ethibit E.
SEC. 32 E\'TIIRE AGREEII�,1T: This instrument and any attached addenda or exhibits signed by the parties
consCitute the entire agreeTnent 6ettveer� Landlard and Tenar�t; na p�ior u7itten or prior or cantemporaneous aral
promises or representatiac�s shal� be binding. This Lease Agreement shall not be amanded, chan�ed ar extended
e:xce�at by ��itten instrumenc signed by both parties hereto. 5ection captia�s herein are for Landlord's and Tenant's
con�'enier�ce only, and neither �imit nor smplify the provisions of this instrument. Tenant agrees, at Landlord's
request, t� execute a reco�rdabl� rnemorandum of thss Lease A�reement.
SEC. 33 i�[ITICES: V4'hznever in this I.ease Agreement it shall be required or perrniCted that natice, nodificacian
or demand be gi�-en or served by either party to this Lease A�reement to or on the oth�r, such notice or demand shall
be given or �erved and shali not be deemed to have been given or served unless in writino and (i) delivered
persanally, (ii) fonvarded by facs�mi�e, (iii} sent by Certified or Registered Liaii, postage prepaid, with a copv also
sent by facsimile or {av) sent by a reputable comcnon carrier guaranteeing next-day delivery, addressea a,s follo�vs:
To the Landlmrd: City of PearEand, �'e�cas
3519 Liberty Drive
Pearland, Texas 77531
Attenticsn: City Manager
7elephone:?S1-b5'-1663
Facsirriile; 281-6�2-1708
'�'a th� Tenant: A[ the address noted for Tenant on t�►e �ignature pa�e hereof until the
Canunencen�ent Date, at which time it stjall become �tie Address of ch� Leased
Peemises.
��'ith a copy to: Dona H. Comell
VG'VF' for Legal Affairs and Genera! Counsef
��
r�au z,9s�is.i�
E�hibit B
U�'ruersity o�I-�ouston System
311 E. Cullen Buiqdina
IIouston, Texas 77?�4
Telephone: 713-7�3-5931
E-maiL dkicarnelltauh.ecfu
Such addr�sses n�ay be chan�ed frc7rra time t� time by either party° by s'ervirsg u�ritien notiee as abo�e pro��ided. Any
sueh notice or demand sha�l be deem�d to have been gi�°en on the date caf rzeeipted delivery, refiasal to accept
delivery� oe �vh�n delivery is first altempted 6ut cannot be made due to a chan�e of address for which no notice is
givers, five (�) busin�ss davs after it sha�l have been mailed as provaded in this �ection 3? ar if sent by facsimile,
upan electror►ic or telephonic confsrmate�n of rec�ipt Erom the reeeivin� facsimile machine, ��•hiehe4•er is earlier.
SEC. 3�3 Cn!�I,�IE�10E:11E�'I' D:'�TE: Tenant shalf, it� rec�uested by Landlard, execute and d�li��er to Landlord
within ten ( l l3} days of Landlords' request an rlcceptance of Leased Premises !vlemorandum of t�e Leased Premises,
the form af which ia atcached a� Exhibit �' attackied hereto and made a part herec�f for all purposes.
SEC.35 �'iVSPECTIOti: Landlord and Landlord's a��r�ts ac�d rzpre�entalia�es may enter the Leased Premises
durin� noratal business hours and upan 24 hours' nqtice (except in an emergency, in �E�hich case c�n3y reasonabl�
notice considering the t}pe of emer�e�acy sh�ll be requiredj to inspect ilie Leased Premiaes; to make such repairs as
may be required or permi[ked under this Lea.se .4greernent; ko perform, at its electian and subject to the terms �f t€�is
Lease A�r�ement, any unperformed oblsgalions of Tenant hereund'er; and to shaw the Leased Premises eo
prc�spective purchasers, n�art�agees, �round lessors, and (durin; the last i2 months of the Terni) tenants. Durin� the
lasE hvelve (1? months of the Term, Landiord may erect a siQn on the Leased Premises indicating that the Leased
E'remises aee availa6le. b
SEC.36 BROKERS; Tenant w�rra�ts that it has had no dealings ��,idi �ny real estate bro[�e€' or agent in
co�u3ection with ttse negotiation of thi; �.ease Agreement and that it knows of no real �state broker(s) or agent(s)
wha is�are) ar might be entitled to a cc�mme�sion �n connection �4�ith this Leasz A�reement. 7enant agrees eo
indemnify, defend (�.tiith counsel reasonablY accePtablz to Landlord) a�� hold harmless the Landlord Parties from
and against any liahili4y from all claims f+�r conunissians, finder's fee or other campen�ation arisin� froni the
n��otiation of this Lease Agreement.
SEC. 37 ESTOPPEL CERT'IFICATES:
A. Fram time to ti�ne after Tenaat accepts thz Leased Premises, wathin ten (14) days after request in
writing therefor fron� Landlord, Teroant agrees to �xecute a�nd defi��er to Landlord, or to such other addressee or
addresses as Landlurd rnay desibnate (and Landlord and any such addressee may relv therean), a statement in
w•ritin� in the fomi of Eshibit G or in such okher form anc� substance satisfactory ta LandCord (herein called
°`Tensnf's Estoppel Certificate"'}, certifying to all or any part of the inforu�atson provided for in Ex9�ibit G as is
requested by Landlord and a�y ather infc�rmatian reasonably requested by Landlord.
B. Subject to t4�e constituticsn and the la��s af th� State af T'exas. Tenant does hereby irred�ocabiy
appoirat Land€ord as atC�mey-in-fact of Tenant, coupled ���itlt an intcrest, in Tenant's name. place and stead to si«n
and deli��er 3'enant's Estappel Certificate as if the snme haci been si�r�ed and delivered by Te�ane, i� the event that
Tenant fails to prouid� Tenant`s Est�ppel Certgficate �.c�'st�in ten (� 6} days after Landlord's �Written rec�uest thereF�r.
SEC. �8 BA�ItiRL'PTCY: If a petition is filed by as against Tenant for relieF under Title l l of the United States
Code, as amended (the "Bankruptcy Code"), and Tenant {rrscluding Eflr purpo�es �f this Section Tenar�t's suc�essor
in bankru�tcy, whether a trustee or 1'enant as debtot in p�ssession) assumes and praposes to assign, c�r proposes to
��sun�e and assion, this Lease Agreement pursuant ta tlie provision� of the Banlcruptcy �Code to any perso� or entity
��ho h�s made oe accepted a bona fid� o£fer to accept an assi�nm�nt of this Lease Agreement on terrns acceptab�e tc�
T'enant, th�n notice of the prc�po�ed assignment settine forth �a) the namz and addr��� of the proposed assignee,
(b) all e,f the ternts and condition� of the offer and proposed assignment, �nc� {c) the adeyuate assurars�:� to b�
harnish�d by Ihe praposed assignee of its future perfoni�ance und�r the Lease Agreement, sha11 bz gi�•en to Land1ord
by T'enant no latc:r than ttir•enty (20) days after Tenanc has made or received sucis offer, bu[ in no event lat�r than ten
�30) days priar to tlie date on which Tenant applaes ko a court of campetent jurisdictic?n f��c autho�ity arrd approval t�
��
HC7L':2798� l S. ] ?
E�hibit B
enter into the proposed �ssianment. Landtard shall hatie the prior right and flption, to be exereised lay notice Co
Tenant given at any tiRre pnor to the date on which the court order authorizing such assignmenz beeoines final and
non-appealable. [o re�eive an assigsunent of this Leasz .agreement upon the samz terms and conditiuns, and for the
sarne consideration, if any, as tt�e proposed assignee, less any brokera�e eommissions which may othenvise be
payable o�t of ch� consideratian to be paid by the proposed assi�nee far the assionment o� this Lease Agreement. If
this Lease �,Qreemenk rs assi�ned pursuant to t�e provisions of th� Bar�kruptcy Code, Landlard: (�} may require
fro�n the aysignee a deposit or other security far the performance of its obligations under the Lease Abreement in an
amount substantially the same as �vauld havve been requirea bv Landlord upas� th� initial leasing to a tenant similar to
the assignee; and (ii) shall reeeive, as .additional Rent, the sum; and economic eonsidera[ion describe� in Section
13?.. Any person or entity to which this Lease Agreement is assigned pursUant to the proE�isions of tlie Bankruptcy
Code shall b� deemzd, without further act ar documentation, ta ha��e assurt�ed all of the Tenant"s obtigations arising
under t4�is Lease Aaczement on and after the datz of such assignment. Any such assibnee shall, upon derrtand,
execute and deliG�er to Landlord an instrument confirmina such assumption. No grovi�ion of this Lease Agree►nent
s�iall be deemed a w•aiv-er of Landlord's ri�hts Qe rentedies under tlte Bankruptcy Code to oppase any� assumption
andi'or assicnmen[ af this i.ease Agreement, Eo requi�e a¢imely performance of Tenant's obli;ations under this
Lease Acreement, or to re�ain poasession of the Leased Premises if this Lease Agreement t�a� neither been assum�d
nor rejected within sixty (b0) days after the date of the order For reli�f oc u•ithin suc'h additional airne as a court of
campetent jurisdiction may have fixed. l�ot��ithstanding anythinb in this Lease Agreerrient to the cantrary, all
amounts pay�ble by Tenant Eo ��r on behalf of Landlord under this Lease A�reement, rvhether or �rot expressly
denominated as Rent, shaU constitute rent for the purposes af S�ctian 5t72(�)[5) of the Bankruptcy Code.
SEC. 39 FI�:�.�iCI.�i. ST�►TE'�IE�1T5: [RESERV�D.]
SEC. 40 H,aZARDC)US S�rBS'�'�CES:
A. Tenant shall not cause or permit a�y Hazardous Subatance (as hereinafter defined) to be used,
stored, �enerated, contained or d4sposed of on or in lhe Property ar Ehe Leased Prernises by Tenant, Tznant's
aaents, ernployzes, eontractars or invitzes in viOlaEi�7n of Envirorunental La�.vs (as hereinaFter defined}. If
Hazardous Substances are used, stored, generated, contained or disposed of on or in the Propert}� or the Leased
Premi�es, or if [he Property or the Leased PrerrEises becomes contaminatzd in any r��anner due to the a�tians or
omissis�n� of anyane other tt�an Land[oed or it� aeents, em�loyees or cantractors, Tenant shall, to the extent
permitted by a�,plicabie 9au�, indemniEy, defend (urith co�ansel reasonab[y acceptable to Landlord) and hold the
Landloed Parti�s harmless fron� any and all c�ai�ns, damages, fines, judgments, penalties, costs, lial�ilities and
losses (inciuding, �vithout Eimitation, a decrease in value af the Property or the Leased Premises, damages caused
by loss or restriction of rentat�le or usable spac� ar any damagzs caused by adverse impact on n�arketing of the
space and any and al] sums paid for se�tlement of c�ainn�, attort�eys' fees, cansultant �nd expert fees} arising durin�
or after the Tenn and as a result of such use, storage, generation, disposal ar contaminakion in vialation of
Environn�ental Laws. This ind�mnifscatior� includ�s, u°ithout 3im�tation, any and afl casts incurred b�ecause of any
inwestigatian of t�z Property or the Leased Premises or any cleanup, remoual or restoration mandaled by a�ederai,
state or local agency or political subdivision. �4"ithaut limitation of the foregoing, if Tenant causes or perrnits the
pre5€nce of any Hazardous Substance on the Prop�rty or the �.ea�zd Prerraises in violation of �n�°ironmental Laws
that results in c�nt�minatio�r, Tenant shall promptly, at its sole erpense, take any and all necessary actic�ns tn Teturn
t3►e Property or the Leased �'remises to t�e conditian esistin� priar t� the presence of any such Hazardous
Substance on s�r in the Pray�ecty or the Leased Premises; provided, howe��er, Tenant must abtain Landlord's prior
written approval foe any such semedia� actiun. Tenan[ shall bz responsible For the application for an� maintenance
af all required pernuts, the subrnit[al af all nati6es and reports, �roper labelir�g, training and record keeping, and
timely and appropriate respnnse to any release or other discharge by TenanC of a Hazardous Su6stanee under
Environmental Lae��s. The iEldentnity- obligations of Tenant under this Section 4!3 shal] survbve the e�piration or
earlier cemiination of this Lea�e A�reement.
B. A� used herein, "Hazardous Substance" rt�eans any substance (i) that is taxic, ignitable, reactive
or corrosi4•e or that is re�ulated by any l�cal, state or f�deraE law, and includes anv apc4 all ntaterial or substances
[hat are defined as "hazardaua ���aste," "extremely hazardous t4�aste," "hazardous substance" or a"hazardous
material" pursuant to any such laws and ineludes, but is not limited ta, astaestos, polychlorobiphenyls and
petroleum and any fractions thereof, (ii} any substanee �a�hich is now or hzreafk�r consid�red a biologic:al
contaminant or �vhic� e�uhd adversel�� impact air quality, includin� mold, fun�i and other bact�rial agents and {iii)
23
Hou:z�gs��s.i�
�rl�i6it B
all biohazardaus, infectipus and medical 4va�te. �ot«�ithstan�drng anything in this Section 40 to the contrary,
"Hazardous Substances'° shall not include materials commanly used in th� orc�inary aperations af an institution of
hi�her et#ueatbon, provided dtat (1) suc�i materiala are used and prop�rly st�red rn the Leased Premises in quantities
ordinarily used and stored in comparable office space, (2) such nlaterials are not introduced into the Building's
plumbing systems or a�e not ochenvise released or discharged in the Le3sed Pren�ises or lhe Bualding, and (3} such
materials are in strict compliance svith local, state or federal lar��. f1� used herein, "Environmental Larvs" means
ald applicable [ederaf, state c�r lacal larts, regulations, orders, judaments and deerees regardin� health, saf�:ty or the
environment.
�;�
xau:�-r9a� �s. i?
E:�hibit B
SEC. �31 iY0 �IQtiEY D:���AGES FOR E'.�ILL�RE T+() CQVSENT; ��'ATti'ER OF CERTA�\ D.�1'I,�GES.
[1�ESEf�VED.]
SEC. 4� ACKiti[14i�'LEDGti1EtiT OF �30N-.4PPLICA�ILITY' OF DTPA: It is the understanding and intention
of the parties that Tenant°s rights and remedies �vith respecs to the transactions provided for and contemplated in this
Lease .agreement (eollecuvely, this "Transacrion") and w�ith resp�ct to all acts or practices of Landlord, past, greseztt
or furure, in connection �vith this Tra�saction, are and shall be governed by legal principl�� other than the Sexas
L7ecepcive Trade Practices - Co�sumer Prot�etion .ALk (the "DTP�+"). Aecordingly, Tenant hereby (a) a�rees that
under Seciion 17.49{fj pf the DTP�. this `�'ransactiun is not go5��rned by th� DTP� and {b) �ertifies, represents and
�r•arrants tca Landlord that (i} Tenan[ has been represented by 1���1 counsel in connection �ui1h this Transaction u�ho
has ttot been directly or indir�etly identiki�ed, suggested or selectzd by the Landlord and Tenant has conferred 4r1th
Tenant's cuunsel concernin� all eiements af this Lease Agre�ment (including, without limitatio��, this Section �2)
and this Transaction and (iij the Leased Pretnises �vill not be oeeupied by Tenant as Tenant"s farnily residence.
Tenant expr�ssly reeognizes that the total consideratson as aoreed to by Land�ord has been predicated upon the
inapplicability nf the DTPrI ta this �'ransact�on and t}tat Lat�dlord, in determining to praceed w�th che entering into
of this Lease A�reement, has expressly relie� on the inapp1i�ability of the DTPA to this Transaction.
SEC.43 ATTOR:�IE'�'S' FEES: To ahe e:�tent permitted by ta�v, in the event either pacty defaults in the
perfoemance o� ar�y of the terms, a�reements or conditions contained in this Lease Agreement and the o�her party
places the enforcement of this Lease A�reement, or any part tttereaf, or tta� coll�ction ofany Rent due or to become
due hereunder, or recor•ery of the passession of tlte Leas�d Premises, in Fhe hands of ar� attorney wtso files suit upon
the sarne, and should such non-defaulting party prevail in such sust, the defaulting party a;re�s to pa}� the other
party"s reasanabfe attorneys' fees,
SEC. d� ALITHORITY OF TENA.�iT: Tenans Svarrants and represents unto Landlord that (a) Tenant is a duly
or;anized and existing aees�cy and institutian of higher �ducatinn of the State of Texas, as def`rned in Section 61.Q(33,
Texas Fducation Code, as amended, (6} Tes►ant has fulk right and authority to zxecute, de1i���er and p�rfoml Chis
Lease Agreernent, (c} the person executinb this Lease Aereerne�Yt r.vas authorized to do st� and {d) upan requesc of
Landlord, such pers�n will deliY��r to Landlord satisfactory ew�idence of his or hzr aut�ority to execute this �.ease
A�reement on bzhalf of Tenant.
SEC, 45 LVAB[LIT"�' '�O PERFQR�'�i; t�'h�nzver a period of time is pr�scribed for tha taking af an action by
Landlord or Tenant, the petiod of eime for th� perforntanee of se�ch action shall be ex[ended by the number of days
that the perforn�ance is actually de9ayed due to str'skes, acks of God, shortabes of labor or materials, war, terrorssr
attacks (inefudin� laio-chemical attaeks), civil disturbances and other causes beyond the reasonable control of [he
Landlord or TenanC ("Fc�rce 4lajeure" ); provrded, howetifer, that [he foregoing shall not act to extend the date that
any payment ob4i�ation is due under this Lease Agreemcnt.
SEC. 46 .�OI�T A:`JD SEVER�L TErA.tiCY: [RESERVEI�.]
SEC, 47 EXECL'TIQ� OF THIS 1.EAS� �.GREEi41E�iT: The submission of an unsigned capy caf this Lease
A_reen�ent ta Te�ant for Tenant's consideration does nat constitute an affer to lease the Leased Premises or an
opti�n fo or for the Le�sed Pretnises. This Lease Agreemene shall become ef€ectove and binding only upon Ehe
execution and dzlivery of this Lease Agrcement by both T�ane3l�rd and Tena.��t.
SEC.48 C��NTERCL:�l�vt: [RESERVED.]
SEC. 49 �CAi.�CUI.,4,TIQ�1 OF TItiIE PERIDDS: Should t�e calculation uf any af the various time periods
pror•idzd for herein result in an obligation becomin� due oe� a Saturday, Sunday or legal holiday, then the �lue date of
such obligation or scheduled time: of ocet�rrence af such e�ent s'�all be delayzd until the next business day.
SEC. 50 R�NE4VAL OPTI(3tiS: [RESERVED.]
SEC. 53 PREVAII.Ii�i� i1�IaR.KET REi�iTr'�L R�"TE �E�'ER�I�N.�TIO�: tRFSEt�VED.]
��
HC7U:27N3218.12
E�hibit B
SEC. SZ P'C'R+CH.�SE Of'TION:
A. T�nant shall have the right (the "Purchase ()ption") to purchase, subject tE� the teml� and
cbndition� cantaineci herein, al�', but not less than alL of Ehe Bualdxng and the Praperty, tt�celh�r with all af
Landlord's right, title and intcrest apgurtenant tlYereto (�he Prc�perty and rights described at�owe in this Sectiost ��
6eing herein referred ta as th� "Purehase Optian Propert}'"}, The Purehase Qp�ion shall be in effeet from the
Commencem�nt Daie until the sixty-first {$1�`) day preceding the hventi�th (?Oth) anniversary of tE�e
Commencenient Date (the "Purchase Option Period'°}. Pro4'idzd TenarrF es no€ in default hereunder (after the
espiration of sny applicable notice and cure periQds}, Tenan[ enay eiercise [he Purchas� �ptit�n by e:�ecution and
delivery ta Landlord of a E'urchase and Sale .Agre�ment (thc "Purchase :�IBreement") subs[antially in the fosm
attached hereto as EXHII3[T H, and made a part lrereof For al] purposes, noc later than the last day of the Purchase
Qption Period.
The Purchase Aareemenk sliall be complet�d by �enant prior to delYVery to Landlord v�rit§� the appropriate
infornjataon filled in and e.'�hibits attached as provided in such Furehase Abreemznt ar this Agreement, mutnlis
rnutarae�rs. IfTenant fails to exercise the Purcha�e dp[ion in accordance i�ith the terms of this ,arreement urithin the
Purc�ase C�ption Periad, then the Purchase Option and the rights therzunder of Tenant sha]V automatically and
imm�diately terminate without �otice.
$. The conveyance of'the Purchase Optian Property shall occur �n the first business day that is sisty
(50) calend�r day�s after recei�t by Landlord of Che Purchase Agreement ex�cuted by Tenant as eequired by
Szct��n 5?A �iereof at h:00 p.m, lacal time at the office of Andre«�s Kurtf� LLF, 600 Travis S[reet, Suite 4200,
Housta�, Te�as 77(302. At the closing, Tenant shall pay to Landlord the Purchase Pric� {deFined b�la«), and tt�e
Purchase Optio� Property shall bc conveved by Landtord by special warranty deed in the forn� attached aa Exhibit
B to the Purchas� A� eement on an "A5-IS," "°�'4'HERE-IS," "Ly`ITH ALL FAULTS" basis. LandCord shalf ha�°e
thz oblmgation t� deliver a title ins'�rance poficv tta T�nant, �he cost of �vhich shall be born� by Tenant.
C. The "Purchase Price" shall e�uai the sum af (i) all amounts or��ed tca Landlord under this Lease
.Agreement as of the date of conw�eyance, p1�5 (ii) Tenant's Proportionate Sliare of all r�nnual I�ebt Setvice
remaining fram the date of conv�yance to maturiky of the Bonds. Landlard and Tenant hereby agree that such,
con�eyance of the Purchase Option Property t�•i9l be pursnant ta the autharity of Section 27?.Oal{j}, Texas Lcacal
Goti Code, as amended, to promote a puhEie �urpose related to hi�her education and that the Pur�hase �'rice
tt�ay or may nat represent the fair market 4�alue of the PurcE�ase Jption E'raperty at the ttme af such cam�eya�ce.
D. If Tenant eleets ro exercise t�e 'Pucchase Qption and, for any reasan other than a default by
Landlord, as se[ler, under t�ie Purchase and 5ale t?greement, Tenant shall Fail to purchase the Pro�erty as provided
For h�rein aad in the Purchase and Sale Agreement, th�e� sueh Purchase Option shali no longer be availabl� to
Tenank and the tcrrns of this Lease Aareefnent shall otherwise remain in full force and eFfect as if such Purchase
Option were never e�ercised.
SEC. g3 COlL'EYAtiCE �T EXPTRA�IQ�i OF TEFi:�I:
.4. Sc� lon� as nc� E��ent of I3�fault rzmains un�ur�d on the �rpiration Date, Landlord shall conE�ey by
Special Warran�y Deed rn the form attached as ExE�ibit 8 to the Purchase .lareement an an "AS-I5," "WHERE-IS,"
"W�TH r3LL F.4ULTS" hasis all, but not less than a41, of the Building and ehe Propem;•, �o�ether evith all of
Landtord`s rig�it. titic and interest appurtenant thereto, upon pay^nrent by Tenane of all amounts. if any, owed ta
I.andl�rd und�r this L�a,e .��reement as af the E:cpiration Dace.
B. If an Event oF Default reanains uncured on the �xpiratio� Date, Tenant shall hav� ss�ty (6f}) days
From the Expiration DaCe to cure any such Event of Default. [f ar�}' E4'ent of Default is cured wiChin such per�od,
Landle�rd shall cor�vey bw Sp�cial �L'arranty Deed in th� form attached as Exhibit S to th� Purchase Agreerta�nG c�n
an ",�S-IS," "�4'HERE-�S," "1�VITH AI.�. F,4UL1�S" basis all, buk not lzss tl�an all, of the Buiiding and the
Property, to�ether with al] of Landic�rd's si�ht, ti[ie and interest appurtenant theretc�, upor� completion of sueki cure
and payment by Tenant of all amc�unts, if any, o�,ved ta Landlord under this Lease Agreee�ient as of khe Expiratian
Date.
� �,
HOU:2748" I R. I �
Eshik�it B
C. Landlord and Tenant hereby agree that any conveyance pursuant to i[his Section 53 will be a
donation ta �enant pursuant io the authority of Secti�n 272.001(j), Texas Local Goz�ernment Code, as amended', to
promote a public purpose related to higher education.
S�C, �a T�i.'K EYE�IYTION OF' BO`dD?S: It is the intention of LandEord and Ten�nt that the Bortc�s (de�ne�
in Schedule 1) be issued as, and remain untll their final maturcty date, bands the interest on rr is esempt
trom federal incarme tasation to the owners thereof. In that regard, Tenant aarees to pravide representations
aad corenants re;arding the �se of the Le�sed Premises by� Tenant, satisfactory ta, and it�r khe henefit of,
Band Counsef to Landlord, in order to ensure khe kax-e�en�Rt stakus of the Bonds.
S��C, 55 �.YfIIBITS .!'�:`dD SCH�I7�ULES: 5chedules ] and � and Exhibits A tluau�li I are attached heretc� and
made a�art of thES Lease Aareement for a�G purposes.
�7
�lO1;:279�218.l2
E�l�ibit B
IN WI'd'NESS WHER�C)F, Lan�ilord arad Tenaat„ actin� herein by du�}� authorized individuals, have caused
these �rescnts tQ be e:�ecuted in multiplz counterparts, each of whic� shall have the force and effect af an originai an
Ehis day of , 2�0& (the "Effecti+,�e Dade").
LAIYDI,(}RD:
CIT'r' OF P£�lRLANT), TEXAS
�. � Y'r
B,. �
Name: Bill Eisen
TiTle: City sL9anager
TEN.4NT:
L�NIVERSITY OF HQUSTOtv SYSTEIvi
� I
tli�' Sy: ` �
Name: Renu E{hator, Ph.�,
Title: Cha�cellor'Presoci'ent
�g
HOI,' 27982If3.I?
Ext�ibit B
SCHEDUC.E 1 TC► LEAS� AGRE�i41�C�'I'
BASE RE�IT
Base Rent
• Base Rent sha13 be payable on tlaz First Interesc Paym�nt Dat�: and on each Interest Paymen[ Date
therea�er.
• Bas� Ren€ s}�all be calculated as folloti�•s:
Date or Periad
Base iZent
First [nterest Payment Date Tenant's Peoporti4nata Share of Anr►ual De6t Servi�;e accrued
through the last �ay of the month in �which the First Interest
Payment Date accurs
Fifteenth day of each �nanth thereafter in the Tenant's l�roportionate Share of �lnrsual De6t Sen�ice far the
Bond Year in w°�ich the First Interest Payment remainder of the appEicabfe Boncf Year divided by the number
Date occurs of months reenaininb in the Bc�nd Year fallo�ving the month in
which tlte First lnterest F'ayment Date occurs
Fifteenth day� of each manth thereafter thraugh Tenant's Proportionate Share of ,Anr�ual Debt Serviee diuided
and includin� .�u�ust 1�, ?029 by 1?
Definitians
"`Annual Debt 5ervice" shall mean, with respec[ ta any particular Bond 'Y'�ar, an arnflus�t equal to the su�n
of (a) all interest acc�uing on th� Sonds during such period, �alus (b} thc pr�ncipal installments of the Bonds maturing
in such $ond Year; �aroa�icterl, ho���c�+�er, that if the �'rue lnterzst Cost for the Bonds exceeds sux percent (6°fa}, then
Landtord's financial ad��isor shall prepare an adjusted debt sen�ice schedule for the Bonds �vhi�ch adjusts the actual
interest rates of eacEi maturity of the Bonds proportiaa�ately in such a mannzr as to result in the �'rue Interest Cost
resulain� frcam such adjusced debt service schedule eyualin� si:c pereent (6 (each such adjusted interest rate to bz
known as the "Adjusted Interest Rate) arad Anr�uaf Debt Service for aiiy particular Bond Year shall mean an amount
equal to the sum of (�) �bl int�rest acenuing on thz Bonds during such period at the Adjusted Interes[ RaCe, plus (b)
the principal installnients of the Sa�nds ma�rin� in such Bond Year.
"B�nd Year" sha[l mean the twelve-month period ending on Septert►ber 1 of each year; provided, hoEVeve�,
thae che first SUnd Year sha11 begin on the date of deli�.ery of the Bonds and shall end on Septembcr 1 flf th�e year in
�vhi�h the first princrpal installmenE o� the $ands matur�es.
"Bonds" �;hall m�an the certifc�tes of e,bligati�n in[ended to be issued b}� �andlc�rd pursuant to 5zctian
271.f}41 et seq., Texas Local Go�err�menz Cod�, as amznded, and Section 1?01.0�32, T'exas Government Code, as
amended, far the purpose of paying (i) interest 4n the Bonds ��vhale the Building is taein� consirueted and for a peri9d
not to exceed one year thereafrer, (ii) the casts of designing, eon�tructing and equ'spping the Eiuildin�, and (iii) the
costs of issu�g the Bonds.
"Building Rentabte Square Feet" shall cnea�j tEie number of square feet of'�entable Area' (as that term is
dzfined in the Standard iviethoc� for measuring Floar rUza in an Office Bui3ding under I3(�yiA �uidelines) in the
Buildin� as measured by Landlord's arcltqtect.
5ch��dule I - ti
HOU1T9321S.12
E�hib�t B
'��irst Interest Payment Date" shal] mean (a) if the Commenczment Date falls on any� day b�tween t}te first
day and thz fifteendi of a munth, the fifteenth (1 S'�) day e�f the month in ��•hich the Cammencement Date occurs, or
(b) iE� tlie Corsimencement I]ate falls ern any day benveen ti�e siYteenth day and the last dav of a moncE�, t�te fitteenth
(1 *"') da5� of the manth imrnediatelv foll�winn the cr�anth in ti��hich �he Cornm�ncentent bate accur�.
"Incerest Paymen� Date" sha�l ni�ar� the fifteenth date of each r�tonth foll�lvin� the month in which tE�� First
Interest Pay�iient Dat� occurs through and includin� Auaust 15 of the year oF the final sCated n�aturity of the Bonds.
"Leased Premises Rzn[able SquarL Feet'" shall nj�an the `Rentabiz Area' {as lhat [�rm is defined in the
Standard �iethc�d for measuring �loor Area in an O£fice bualding und�r B(�i1�1A guide�ia�es) in tl�e Leased Premises,
as measured'bv Landlt�rd's architect.
"Tenant"s i'roportionatz Share"' shall mean #he Leased �'remi��s Rentable Square Feet di�°id�d by the
Building tZentabl� Square Feet.
"True �nterest Cost" shal] mean the tate, compaunded sen�i-annually. necessary to discount the amounts
payabl� on �he r�apective princapal and interest payment dat�s foE ihe Bonds to the purchase price received for the
Bonds.
5eheciule I -?
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Exx���r c
LA:vD�.OKUi I.IiPRd�'E�1iENT5
SEC.1 PL:�,tiS.
.4. Buildi�Plans. Landlord w cause its architect ar�d rn�chanical, structural and e�ectricai engineer
(the "Design Professionals") to prepare a set of Buildin, plans (the "Proposed $uilding Plans") for rhe
canstruction of the shell oT the $�ildin� and the parking area�, landscape ar�d any detenkian areas on cbe Leased
1'remises as w�ell a� the inCerior unpro�einents in the Building (collectively, tlte "LAadlord Impcovements").
�'�'ithin tw�enty (2fJ) business days after delivery af the Froposed Bui�d'an� Plans to "C�nan[, Tenant sha19 either
appa'o��e {w�hicts appro�al shahl �not be un�easonabty witb_l�zld, conditioned or delayed} that portiorr of the Propased
Buifdin� Plans thac inciudes the Leased Premcses {such portion, the "Le�ased Premises Prapased $uildin; Plans")
or notify Landlord of the iten�(s) of the Leased Premises Propos�d �uildin� Plans ihat Terant dis�ppcoves and th�
r�asan(s} therefor. If Tenant disappro��es the I_easet3 Premi Propased Bwilding Plans, Lar+diord sha]# cause the
Desi�n Prafe�sionals w re�is� and resubmit sartte to Tenant for appro��a� (the "Rerised Leased Premises Building
Plans°'}. W'it�in ten (10} business days after deiivery of the Revised Leased Premkses Buildin� Plans t� Tenant,
Tenant shall eich�� agrprowe the Revised Leased Premises Building Plans or notify Landlord of the itzm(s) of the
R�vised Leased Premises Building Plans wl�icli TenanC disapproves and !he reason(s) therefor. If Tenant
disappraves the R:�ised Lease� Premises Building Plans, Landlord shall eause the Desigr� Frafessionals tQ further
revise and resubmit same to T�nant far appra�'at, �vhich process shall continue unFil the pkans are approved. Tenant
shall have ten { 10) business days afier deiivery� of' the each set of Revised Leased Pre€erises £3uilding Plans to either
apprave the Revised Lessed Preuaises Buildi�g Plans or notify Landlord of the item(s) of Ehe Rer�ised Leased
Preinises $uildin; Plans which Tenautt disapproti°es and the reason(s} thergfflr. Shaul,� 'f'znant fail to rc�pQnd ta
Landlord's request {or approval within khe time periods allotted abave, Tenant �ha1l ha��z been d�emed to k�a�'e
approved such R�t-�ised Leased Premises Buiiding PEan�. T'lte Leased Premises Proposed Bui]dinQ Plans or R.evised
Le:�sed Pr�mises Building Plans, as approved by `Penant, are hereinafter ref�a�red to as the "Buildine Plans."
B. ConstrucCion Dra�vinas. Landlord shall cause ihe Design Prof�ssionals to prepare construction
drawinos (in accordance with the Buildin� Plans) and specif`ic�tions in�luding compEete sets o� detailed
architec[�ral, structura�, mechanical, electrical and plumbing �vorkin�; drawiays (the "Froposed Co�struction
Drativings") for kh� iandlord Improvements and shall del�<<e� the Propc�sed Construct'son Dra�vinbs to Tenant f�r
ap�,raval oF that po�tion of such Proposed Construction iDrawin,�s that includes the Lea�ed Premises (such partion
the "Leased Premises Pro�osed ConstrucEion Drati►�ings") {t��hich appro�^al shall nc�t be �cnreasonably 4vithheld,
canditio�ed or d�lay�ed). 1�Vithin hveniy (?0} business days after dzliv�ry of the Leased Premises Proposec#
Canstruction Draw"sngs to Tenant, Tenant shall either appro�'e thz Leased Premdses Propo�ed C4nsteuctian Dra«rings
or n�tify Landlord of the stem(s) o€ the Leased Premi�ea Propos�d Construetion Dea�vings that Tenant disapproves
and the reason(s) therefor. If �I�nant disapproves €he Leased Premises �ropased Canstruction Drai��ings, Landlor�
shall cause khe Desi�n Prof�ssionals to revis� aad resubmit sante to Tenant far approval (the `"Revised Leased
Prentiises Construction D�ra►vings"). �Vithin ten {1D) �+us►ness days after de6i�ery of tE�e Revised Leased Premsses
Constructi�n Dra�vin�s to T�nant, Tenant shal! either approve tf�e Revised Leased Premsses Construction Dra���ings
or notify Landlc�rd of the item(s) of che Revi�ed Le�sed Prerr�ises Constructican Drawings �t�hich Tenant disapproves
and the reason(s) th�refor. It Tenant disap�roves the Revised Leased Fremises Construeti�n Drawin�s. Land[ord
shall caus� the IJesi¢n Profe�sionals to €urther revise and resubmit sam� to Tenant far approva�, which process si�a�l
co�tinue un4i� ttte plans are appraved. �enant sl�all have ten ( l0) business days a�[er ��liuery of each s�t of Revised
�eased Prerniyes Canstniction Draw�ings to eit4��:r approve the Re4•i Leased Premises Construction Drawings or
nQtify Landlard o�' tfie item(s} ot� the Revis�d Co�tstruction Dra��'ings «�E�ich Landlord disappr���es and the reason(s)
therefor. Shr�u1� Tznant f�i1 to responai to Landlard's reyuest for appro� al ��.•ithin the lsme peri�ds allotted above,
Tenant shall ha�•e been deeme� to have appro��ed such R��iSed Leascd Pr�mi�es Con�truccic7n Drawui�s. The
Leased Premises Proposed Construction Dra�vin�s c�r Revised Leased Premises Construction Dra�;�in�s, as apprarecl
6y 1"enant, are t�ereinafCer r�ferred ta as the "Construction Drawiags".
C. Chan�es. Tenant may �roan time to time mak� re�ue�t� fc�r moditicacions io the Canstructic�n
�rawin�s by deliverin; ti��rii[en noCic�; to La�dlord in accordance wdth Szction 3B of the 'Leasc ri.greement. No
delays in desi�nin� and construeting the Landlord In�provement� cau�ed 6y ,uch Tenant reqta�sts shall deEay the
C-I
HO U:� 79� �' l 8.1 ?
E�hi�ait B
Commenceanent Date. Landlocd may n�a�Ce requests for madi�icattons to the Constru�;tion Drawings in accordance
�vith Section SB oE[he Lease r'�greement.
D. Liaiailitv. Landlord's approti•al of the Construction I?ra�vinGs shall rn no manner indicat� that
Landlc�rd be9ieves ihe Construction Drawings are in compliance with a1l appiicable La�v�s.
S�C 2. CQIVSTRL:C�IOiV QF IRIPR��°EIIENTS. Landlc�cd shafl diligently cor�truct or esuse to be
constn�cted the Lancflord Im�ravements in accordance tiv�th the Construction F7ra�s°in�s in a good and «or4�manlike
nianner usin� materials specified in the Constructian I�raw�ie�gs and in eompliance �vith Law (incfudin;, but not
limited ta, the ADA) and so as to a@tain Substantial Completean by not later than the Targec Date (as hereinafter
defined). Landlord asauntes no liability for ypecial„ consequzntial, or incidentaf damages af any kind u�tratsoevee in
connection w°ith the desi�n or construction of the Landlord Irn�rovements, and makes �o representations, warranties,
or ;uaranties regardierg the same, expressed or implicd, ineludin;, �vithout lim�tation, ivarranties of rnerchantability,
fitness for a parrticular purpose, or of habitability, except as expressEy set forth herein or in the Lease Agreement.
SEC 3. SU$5T?►�'VTIAL C0�4IPLETION. ``Substantial Completion" shall occur when: (ij the project architect
ha� issued a eertificatz in the form of .41A Doeument G-70� indicating that the Landlord Improvements ar�
substantially �amplete in accordance ���ith the Canstruction Dra�w-ings and such certi�cate has been confnrrted by
Tena��c, and (ii} ali systems and portions of the Landlord Improvements ar� operational as desigt►ed and the only
remaining w•ork is so minor in nature that T�nant could occupy Che Landl�rd Improvernents ancf thc: cornpletion of
the remainder of the w�ork by Landlord �vould not mz�terially interfere with Tenant's narma[ bs�sinzss operations.
When Land�ord 6elieves that Substantial Cor�pletian has been achieved, "Tenant and La�dlord shall conduct an
inspection of the Leased �'remises u.•ithin fiv� (5) da}rs aFter such date in order to deveiop a punch-list of incomplete,
minor detail items (the "`Punch-List Items") to be compieted by Landlord. ln the evenk any items other than Punch-
List Icems rer�ain to be completec9 SubstantiaE Completian sha11 be deemed not to have accurred. Landlard shall
use al� reasonabl� efforts to compleCe all PunGh-�,ist Items �vithin thirty (30) days aFter Substantial Cotnpletion,
Lar�dlard shall use reasonable �fforts ta trtinimize inter€erence with the use Qf the Leased Premises by Tenant in th�
comp�etion of such Puncl�-List It�ms. The "Target Date" for Subskantia9 Compl�tion of the Landlord
[mpeovements is 7une 26, �O 10. If Substantial Con�pletion is delayed because of (a) any acts af Tenant or its a�ents,
representatives, einplavees ar ennteaciors, ('b) Tenant re�uested changes in the appro� Consiruction Dra�vings, or
(c) Force Iviajeure (collectively, "Tenant 1Jeta�•"}, then the Commenceinent Date shall nc�t be extend�d, but rather
shall start on the date an titi^hich ik would ha.re occurred but for such eti�ent. �his Lzase Agreement shall rernain in
full effect notwithstandin4 any delay in Substantial !CompCecion and LandEord shall haue no liahiCity to Tenant if
Substantia] CompEetion has not oceurred on or prior to the TargeC �ate for any ceason.
SEC. 4 EARI,Y E�iTR�' BY TE�iA`T. Tenan� may en[er the LeaS�d Premises befare Subatantia� Campletian
with Landlord's prior w�ritten consent (�vhich shall not be unreasanably witlil3eld) to perform work therein, provided
that such entr;a shall be caardrrtated with Landlc�rd and shall not n�at��iall}r interFere �vith L�ndlard's w€�ek. Prior to
,uch entry, Tenant shall d�li� to Land�vrd e��idenc� that the insuraoce required under this �ease Agreement has
been obtained, and Tenant shall pay all utility� charges reas4nably allacable tc� Tenant by Landlord in connection
�vith such ear9y entry. Anyr sucC� entrY shall �e oa the terms of this Lea�e Agreem�nt, but no renE snall accrue in
respect of Base Rznt vr Additional Rent during the period that Tenant so enters the Leased Prem'rses. Tenant shall
conduct its activi�ies cherein so as not to materialfy interf�re 4�vith Landlorci's construction activities, and shatl da so
at its risk and e�:p�nse. If, in Landlc�rd's judgment, Testant's act9r�ities tE�erein materially interfere with Landlord's
canstruction acti��aties, Land�c�rd may t�azninate Tenant's riQht ta enter the Leased Premises before the
Commer�cem�nt Date. V
SEC. 5'4i'�rRFL�:�iTY". Foe a period of one (l) year after Substantial Cort�pletion of the Landdoed lmprovements,
or suci� greates correction period under Land�ord's eontract for the constr�ction of the Landlord Improvements in
acc�rdance with the Construction �raw•ings, Landlord shall cause to be repaired, replaced and re-�xecuted any
deEzcti��e materiats, equipmeitt and work which was inicially prepared or supplied ar p�rFormed in connection weth
this Exhibit C, including latent defects and work perf'ormed not in accordanee with the approved Construction
Dra���ings. Upon the expiration of this 4varranty, I�andlord will ass�gn to Tenant aEl manufacturers', suppliers°,
contractors' and subcontractors' �4�araanties on materials, equipment an� fixtures and labos incorporated anto the
Leased Premises or that it othen��itie ot�tains to the �xt�nt nece5sary for Tenant to fulfild' its maintenance and repair
obligations as set out in this Lease Agreemen[. Further, Landlord shall furnish to Tena�t all printed ser��ice and
C-2
HOU2 798" l 8.12
Exl�ibit B
maintenance instructio�ns and manuals issued by the manufacturee of each item of equipment furnist�ed �n
accordance tivith this E'ehibit C. 3'znant shall receive copies of all 4varranties seceived by �.andlord on behalf of the
Leased Premises.
SEC, b ACCESSIBIIrITY [i�iSPECTIO\. L�ndlord and Ten�nt acicnou'ied;e that the Leased Pr�mises are
subjz�t to Chapter 469, Texas Govercvt�ent Code. as amended ("Chapter 469"), tweth respect t+� accessibali€y for the
disabl�d, and agree to co��ply ��ith the requiremer�ts thereof, inclwd�ng the folkawing:
(1) The Texas Depa�tmea�t af Licensin� and RegulatiQn ("'d�I7LR") is required to perfonn an on-site
inspection of the L�ased Prernises prior to occupancy by Tenani to ensure compliance �vith Chapter 4b9 and the
rules and regt�lations adcrpted �y TD�R pursuant thereto.
(2} If inspection by TDLR discl�ses any condition not in compliance with TDLR accessibility
stanc�ards and speciTicati�n�, Landlord sfiall correcc yuch noncomplyin� condition� no later tlian d�e sixtieth (6Q`�'}
day afiter TDLR del's���rs th� ins�ect€on resuEts to Landlord, or by a lat�r date set by TDLR, if csrcum�tances justify a
later compliance date.
(3} Landloed and Te�ant sha1S cooperate to pro��ide t� T1�LR all necessary information concem�ng
insgectian of tl�e Leased Premis�s and an}� required corrective actian. Tenant shall paw any €ees charced by TDLR
for its inspection of the Fremises under Chapter 464.
C-3
HOU.2798213.1?
E:�hibit B
��x��« r�
FCiR�I �F �tiIE�iD�IENT TO L��►SE AGREEI�IE�i'i'
AEi1��tia1lEi�i�' TO LEASE A�GREE1�IEtiT
This AmendmenC No, to Lease Agreeroent (this " Amendrnent Mo, ") is entered inta as o#�
,?QQ_ by the City of Pearland, Ce�cas, a home-rule municipality of the 5tate af Te:cas
(" Landlprd "'}, and The University of Houston Sys¢em, an agency and inslitucion o� higher edusaEion of the State oF
Te�as (`'Tenant"). All capitalized t�r�ns utied herein but not detined herein sha�l have dlz meanin� aseribed thereto
in the �ease A�reement (define� belo�v}_ �
ItECITALS
WHEF�EAS, Landlord and Tenanr ent�red inio Ehat certain Lease A;ceement, dated as of
, Z�0$ {as anzended from time ta time, the "Lease AQreement"}, �vhereby Landlord a�reed to
Leas� Agre�rnent the Leased Przmis�s to T'�nant.
WHEREAS, the Building beinb c�nstructed by Land3ord pursuanE to the Lease ACreement i� bein�
completed based upon the Plans as described on Eshibit C attached to ttae Lease Agreemena.
AGREEwIE�VTS
NOW THER�FORE, far good and valuable consideeati�n, the re�:eipt and s�t"ficiency are hereby
a�kno«�ledg�d, Landlord and Tenant hereby agree as follows:
i. befin�tions. All capitalized terms used herein but na[ defined �erein shall ha��e the nleaning
ascribed thereto in the Lease A�reem�nt.
Amendment ta Exhi6it . Exhibit to the Lease Agreem�nt is hereby amended as follotias�
3. Amendment to Sehedule 2. Schedule 2 ta� �he Lease A�reereient is hereby amended by deleting
such Schedule 2 ir� its enkirety and replacing with the Schedule 2 attached hereto.
4. Tenant De[a�• The nuntber of days of Tenant Dslay u� connection �vith Tenant's Request th�t
necessitated this Amendnient I�o. is and the sum of all Tenant DeEa}� days caused by Tenant's
Reque�t (inclusive of the numbeT of days of Tetaant Dzlay set forth immediately abo�e} as of the date of khis
Ame�dment iVa. is
5. No �ther A�endmenCs. Exce�t �s spec�fical[_y� provide� in tE��s Amendntent fifo. , no other
amendments, revisions or changes are made or p�rmitted heEeby tv tlie Lease r�.greemen[. A�l other terms and
Gonditio�ns of t�ie Lea.se A�rzement rerttain in full force and eftect and apply fa�ly to this ,4mendrnent No.
6. Confornuq RQferences. Upon the effec�iveness of this .Am�ndrnent No. , each reference in
the Lease Agreement ta "this Lease Agre€ment," "thereunder," "hereto," "herein," or «�oeds of Eike inl�ort, shall
rtZean and he a refer�nce to [hs Lease Agreemer�t as arnended hereby.
7. CounterRarts. Thi� Amendment bVp. may be executed in one or mor� counterparts, each of
which shaEl he considered z€rt original inatcumznt, but all c�f �vhich �hall be cc�nsidered onz and the same agreei�ent,
and shall become binding �vhen one or more cous�teTparts har been sioned by Landlord and Tenant and deli��ered
tc� each.af ihem. v
8. Analicable La�v. This Amzndmen[ No. _ and a�l rights and liabiEitie� �f Q�e parties hereto wish
respect to the Lea�e Agreeme�7t sl�all be �uverned by the lati��s of the State of Texas.
L�
t�ou:�7�s�i3.t2
�:r;i�ibit B
W'IT��ESS �HE EXECUt`IOI*I t�ereof ati oE the date fust above �4�ritten.
Landlord:
By:�
a�ame:
Title:
'�enant:
B v:
Name:
TitEe:
D-?
�i�0U-279$2 @ 3. [?
��l�ibit B
�xHaa�T E
I�StiIL1_tiCE REQtiIREMENTS
A. Landlord acl;nowledges that, because the Tenant is an apency of the State af Texas, liability far
th� tortious conduct of the a�ents and employezs oE Tenant or for injuries caused by the cond6tions of tan�ibie state
property is pro�.�ided solely by the provisions of the Texas Tori Claim� Act (Texas Civil Praetice and Remedie5
Code, C:hapters 141 and 104}, and ti�at 1�i'or4cers` Compensat�on Insurance coverage far employees of the Tenant is
provided by �'enant as mandated by che provisions of the Texas Labor Code, Chapter SU3. Natvrithstanding any
provision in the Lease A�reement to the contrary. Tenant shall have the ri;ht, at its option, to self-�nsure, in lieu of
purchasing policies cf insurance. 1�10 insuranee carrier of either party �c�ill have a ri�ht of subrogation against the
oitl�er patrty to this Lea�e A�rezment.
B. Tenant st�al] be respcnsible for a11 its prop�rry on the Leased Premis�s.
C. Tenant �vill not perrttit the Leased Premises to be used for any purpose or in any maru2er that
would (i) void any insurance carried by Landlord Chereon, (ii) increas� [�tte insuranc� risk or premeum, or (iii} cause
the disa�lowarace of any sprinkler credits, includ4ng 4�•ithaut ]imitacion, use of the �.eased Premises for the receipt,
st�rage ar Fiandling af any product, material or m�erchandise that is erplos�ve or highly E�ammable. If any incsease in
th� cost of any snsurance an the Leased Premises or the building of �vhich the Leased Premises are a part is caused
by T�nant's use of the Le�nsed Premises, or because "I'enanC vacates t�� Leased Preinises, th�n Tenant shall promptky
pay the amount of such increaae to Landlord upon demand. If any insurance poliey lapses becarase T'enant's use is
alleged to co�stitute an inerea�ed hazard uQider the policy, Tenant shall be lia6le to I andlord, as liquidated dar¢ia6es,
ir� an amount equal ta the coverape l�mit that v.°ould have e!cisted but foP th� Eapse, tess any amoun4 paid by the
insurer on Landlc�rd's behalf as a separ�te insured. Tenant �vitl comply wikh all reasonable requirements of
Landlord's insurance carri�r.
D. Anything in this Lease Abreement to the contrary not�vithstanden�, Tenant hereby wai��es and
reteases Landlord of and from any ar7d all ri�hts crf recovery, clairn, action qr cause of action, a�ainst Landlord, its
agents, cafficers and ernployees, for any loss or c�amage that may occur to the Leased �'rzn�i:,es, iniprovements to the
building af �,vhich the Leased i'rentises are a part, or personal property (6uildin� cont�nts) within [he buiidin� andr'or
Leas�d Precnises unle5s directly caused 6y the actians of Landl�rd, including the ne�li�ence af Landford for failure
to act fol[awin� noticz from Tenant ofa matter [hat is the res�onsibility of Landlord.
�-I
H�U:?'7�8218.1'_
E�hibit B
E�CHTBI�' F
ACCEPT:�,�CE OF PREIIIS�S �IEi��f�R�tiDU�il
7his Nf�mor�ndum is an amendmer�t to the Lease Aereernent (the "Lease .�greeme�t"} executec� on the day
of , 200_ b�t«3een the City of Pearland, Texas, as L�r�dlord, and the Uni�•ersity af Houston
System, as Tenant, for tkiat c�rtain leaaed preme,es more particularly described in tt�e �.ease Agreement.
Landlord and Tenant hereby agree that:
1. E�ce�egc for thos� i[ems shra�vn on the attac�ted "punch list,°' if any, �.vhich Landlord ti�ill remedy u�it�lin
davs herec�t:, Landlord has futly completed the construction «�ork requued u�der the terms of th� Lea�e
Agreerner�t.
'. The I.eased Preni�ses are tenantab[�, che L.andlord h�s rro further obCi�ation €or eonstruction (except as
sp�cified abov�), and Tenant acl:now•ledgzs that 1he Leased Premises are satisfact�ry in al] respects.
3. The Commencement Date of the Lease Aareement is heeeby aareed to be the day of
20(3 .
4. TEi� Expiration Date of the Lease A�reement is herzby agreed to be the dau of , 2pp .
All other terms and conditions of the Lea�e Agreement are herehy ratified and acknr��vled�ed tQ be unchanged.
agreed and Executed this day of ,?0{�
I.andl�rd:
CITY OF P�r1RLAi�1D, TE�:AS
By:
Nam�: Tom R�id
Title: Mayar
Tenant:
CITY OF PEr'4RL,��D. TEX.�S
By:
Nam�: Renu Khator, Pltp.
Tide: Chancellor%President
F-1
H��1�� 743'- 9 3. ] 2
E�hibit B
EkHI$IT G
`i E`i.�:�T',S �STQPFEI, CERTI�1Cr�TE
(Addressee}
.�
Gent�einen:
The under�ig�ied {""B"enant") has executed and entered into that certain lease aarzement ("Lease Agreement")
atcaehed hereto as Exhibit "A" and made a part hereof for all purposes �vith respe�t to those certain premises
(''Leased €'remises") snore fully descrrbed in the I_ease .A�reement. Tenant unded that th� entity to whom this
1�Cter is addressec! ('Atldressee") has committed to loan or invest a sulastant�a] sum of money in seliance upon this
ceetificatipn by the undersigned, �vhich certifcation is a con�ition precedent ta makine such loan or investment, or
thai Addressee intenc�s to take some ather action in re�iance upan this certificatian.
With respect Ca the Lease A;reement, Tenant certifies ko you t}a� folloevin�, �vith the intention that you may re�ly
fullv thereon:
l. A tt�u� and corr�ct cc�py of the Lease AgreemenF, incla�din� any and all amendrnents and modift�a[ior�s
thereCo, is attached hereta as �xhibit "A";
Z. The Qnginal Lease �greemen[ is daked ,?�0 , and has been assi�n�d, modified,
supplemented or arnended on�y in th� folla�.�•ing respects:
(Please �c�te "ivrone" abowe or, on a separate sheet of paper, state rhe effective date of and describe any ora4
or written mcrc�ifcatiens, supplemenks or am�ndments to the Lease Agreement and attach a copy oF such
modifications, suppiements or aEnendments, �°ith the Lease Agreement �� Exhibit A);
3. Tenant is in actua] accup�ncy of the Leased Premises under the Lease Aareement;
4. The initial term of the Lease Agree�tt�ent commenced on , 200 , and ends
at 11:59 p.m. on , 2�� . 1 h� currenE �nonthly base rent is �
, and no renkals or other pa;vrr►ents in advance of the current calendar month have b�en �aid by
�'enant, exc�pt as fo�lows:
(Please wz "�tone" above or descri6e such payinents on a separate sheet of paper);
S. Base Rent w�ith respect to the Lease r'�greert�ent has been Fadd b}' Tenant through
, 20f}_; �1[ Additional Rent and other charges h�im been paid For th� current periads;
6. Th�re are no unpaid concessions, 6ariuses, frec montt�s' rent, rebates or other e�atters affecting the Rent fcar
Tenant, exeept as fol(c�u�s:
{Please u�rite "Nc�ne" above or describe such matters on a separate sheet o#�pape�)�
7. dVo security or other degosit has becn paid by Tenant �4ith respect to the Lea�e Agr�emen[, except as
follows;
(Ylease �vrite `Tione'° �bove ar deseribe such deposits on a separate sheet of papec};
G-i
HOU279821 S. l2
Ellti��it B
The Lease Agreemer.t rs in ful� fc�rce and efEeet and there are no events or conditions existing which, with
notice or th� lapse of time �r both, cmuld constitute a maneiary or ot�er default of the Landlord under the
Lease .4.;reement, or entitte Tenar�t to anw offset or defense against che psomgt curnen[ payment of Rent or
constitute a defauli by Te�aant under th� Leas� A�reement, except as follow�:
(Please wTite "None" abov� ar describe :�uch default �n a separat� slteet of papet};
AYl improve�ents rec�uir�d to bz made by Landloe�i und�r the terms of th� Lease Agreement have 6een
satisfactorily completed and accepted by Tenant as bein; in conforniity with the Lease Agreernent, except
as follows:
(Plzase write "Ncsne" abave or describe such imQr�ventents on a separate sheet ofp�perj;
S0. Tenant ha� ncr option to expand or �ent �dditiona9 space ar any r�ght a� first refusal tvich regar� to ar�y
additionai space, under th� Lease .Agr�entent olher than the Leased Pre�nises. except as follosvs:
(Please �rTite "\one"' above or descnbe such r��ht or option nn a separate sheet o�pap�r);
1 l. Tenant ha� no rs�ht or aption to renew' khe Lease Agreement fnr any period oF time after the ex�iration of
the initial term of th�e Lease Agreement, except as follows;
(Fl�ase ��ite "None" aboti e �r describe such ri�,h[ ou a separate she�6 ot paper};
12. To the besi of Tenant's'�tno4��ledae, any an� al] brok�e's leasing and othzr eorsunission; relating to andr'or
resu]tin� from Tenant's execution of the Lease Agreement and occupancy of the Leased Premises have
been paid in fi.sll and no broker's lea�in� or other commissions �vill be or become due crr payable in
connection �r�ith or as a result of either T�nant's execution of a new Lea4e Agreemes�t coverino all or amy
portion of th� Leas�d Prent�ses or any ot�er space tivithin the groject or Tenans's ren�wa9 of the Lease
Agreement, except as follr�ws:
(Please �urite "Ncsne" above or describe suc� riolYt on a separate sheet of paper);
I3. To 4he best of Tenant's kna�}�ledae, the use, main[enan�e os op�ratian of tl�e �.eased Premises conaplies
with, and will at a[l times complv t�'ith, all a��licable federal, state, county or local skatutes, latus, rules and
regulations �f anti• governmeneal authoritiz� relating tc� en��ironrnental, health ar safety matters (being
h�reinaftex coilectively referred to as Che "Environmentai 1.a«-s");
1�. Th� L.eased Premise� have not been us�d and Tenant �oes n�t plan to use the Leased Przmises fvr any
activitie� whic�t, directly or indirectly, invol�e the wse, oeneration, treatment, storage, transportatioci or
disposal af any petroleu�n prp�iuct ar any totic or hazarcio�ss chemicai, matersal, substance, pollutant ae
�uaste•,
1 j. Tenant has not rcceived any notices, written ar oral, of �'iolatic�n of any Environmental L.atv or of an}'
alie�?ation tvhich, if true, would contradi4[ anything �antainecl herein and thcte are not �4cits, injunetions,
decrezs, orders or jud�n�ents outstanding, no lawsuits, claims, proceedings or inv�stigatimns pendin� or
threatened, relating to the use, maintena�ce or opesation of the Leased Premeses, nor is Tenant a�vare of a
basis for any such proceedinn:
16. Tk�ere are no act[c�ns, +.��3�ether voluntary or otllenvise, penciing a�ainst Tenant under t�te bankruptcy or
in,ol�encv tiau�s of the llnited States or af any state.
l7. Tenant ha� n� ri�ht af refusal x�.�ith re,pect to ¢he Lea�zd Premi;es or any por[iort� [her�of.
1$. Tenant understand� that the Lease Agreement may be as5igned to Addressee and Tenant agrees to attorn ta
Addreysee in all respect; in accordance �ti'ith the Lease A3seemeni.
�.�
HOU:2?4�? 13.11
Erhibit B
EXHIB�T l�
PURCHA5E A�1D �ALE AGREEIVI�NT
This Purchase and Sale Ab eement (this "A4reement") is entered inta as of ihe'�f�ectiv�
Date (de�ned below) betv��een the City af Pearland, Texas, a hame-rule munieipality of tlze State
of `Cexas (�� and the University af Houst�n Sy�tem, an a�ency and institution of �i�her
edueation of the State of Texas (��Purchaser").
Seller and Purch�ser are parties tc� that certain Lease Agreement, dated as of ,
2008 (as amended anci supplemen�ed to date, the 46 Lease A�reement"} with res�ect to [a portion
of] the Building (as defined in the Lease A�eement} located or� the Real Estate (defined belc�w),
The Lease Agreement is artached k�ereto as Exhibit E. Certain eapita�szed terms used herein and
not othenvise defined have the meanings assigned �o such terr�s in the Le�se Agreement.
In consid�ration of the mutual cavenants set forth herein, the parties agree as follo�vs:
Se�ction l. Sa1e anc� �`urchase. Seller shall sell, convey, anr� assign tc� Purchaser, and
Purchaser shall purehase and accept from Seller, for �he Purchase Price (dehned below} and on
and subject to the terms and canditions herein s�et fflrth the traets or �arc�ls of real property
situated in Harris County, TeYas, desc�ribe�i in Exhibit A,, together with all improveme�ts located
thereon and a�l right, title and inkeres# appurtenant thereto (collectir�rely, the "Real Estat�"},
including aIl of Se11er's ri�ht, title, and interest, if a�y, in and ta
(a) to the extent the same are assignable, all �icerYSes, pernnits, «rarranties and
approvals, ar�ci all rights thereunder �uith respeet to ar affecting the Real Estate; and
(b) a11 pers�nal pr�perty attached to or used in connection with the Real l�state
(collectively "Personal Propertv").
The Real Estate, Fersonal Froperty and other praperEy described above are ref�rred to
collectively herein as ttae i�Propertv."
Section 2. Furchase �'rice. The price for �vhich Seller shall sell, convey, and assi�n
the Proge� to Purchaser, and which Purchaser sha11 pay ta Se�ler, �s the Purchase Price {as
detined in the Lease Agreement), tc� be p�ir3 in cash or cash equivalents as set fc�rth in
Sectiora 8{a)(1}.
Section 3. Qelivery af Infoxmagio�, bv Seller.
(a) Within seven (7) days after khe �ffective Date, Seller, at its expense, shail
deliver or cause to be delivered tv Purchaser the fo�loGVing:
(1 } cammitment for Title Insuranee {the "Title Comnvtment") frorn
(the {°Title Com�anv") setting forth the status of �he
title o�the Real Es�ate and showing ail liens, claims, en�umbrances, easements, rig}�ts-of-
way, encroachments, reservations, restrictions, and all athe� matters af recaeci affectin�
the Real Estate;
HOL:2813436?
Exhibit B
(?) copies of all d�cuments referred to �n the Title Comrnitment (the
"T���e Commi�rraent Dacuments");
�3) if in the City's p�ssession or c�nkrol, copies of all current [leases,]
tests, reports �nd inspectic�ns pe�tainin� to th�; existence of any Hazardous Substances
{defined herein) in, an, under �r about the Real Es�at�; and
(4) a detai�ed list of all Personal Property.
(b} 'G�"ithin seven (7} days after the Effeetive Date, Seller, at its expens�, shall
abt��n a e�ar� ``boundary line" survey of the Real Estate ("S�rvev"), which shall be certified to
Purchaser and Title Company. Seller, at its expense„ shall cause a true and correct copy of the
Survey to be delivered to the TitBe Campany, Purchaser and P�rchaser's legal caunsel pror�pkly
after receipt thereof by Seller.
Section 4. Title Revie��. Purchaser shall have fi��e ��) dayS from the later of
(i) receipt af the Title Commikment and fhe Titl�e Commitment I7ocuments and (ii} seven (7) days
after the Effective Uate to review and mak� any objeczion ko the exceptions to title sho�vn on the
Title Carnmitrrienf or Survey (the "Titae Revie�v Period"). If Purchaser makes timely �vritten
objectian ta the Ticle C�mmitment ar Su4 Se�ler may, but shall not be c�bligated to, attempt
to cure any title objections mad� by Furchaser. i�Jotwithstanding any otY�er provisio� hereof, in
raa e��ent sha11 Se�ler be abli�ated to incur any cost oe e�cpense in connecti�n with any objeetion
to title to the Rea1 Estate made by Purchaser, provid�d Seiler snalf be obligated {i} to cause, at its
sole cast and expense, all voluntary• liens securing indebtedness affecting title to t�e Real Estate
ta be released of record and (ii} to remove, at its sole cost and expense, any title encumbrances
affecting title to khe Real Estate other than thase appro�ed by Purchaser (or made by, thrc��gh or
under, direct�y ar indireetIy t3�e activities af Purchaser) and other than thos� that encumb�red the
Real Estate as Qf , 2008 (e�ch af (i) and (ii) called, a"Seller Itern"). Provided
ho4�rever, Purchaser shal] not unre�sonably withhold, delay or condition its appro�al to any
en�cumbrances referred to in clause (ii} o� the precedin� sentence, excl�zding li�ns, that may be
beneficial t� the ownership or operation of th� Real Estate. If Seller is unable or unwi9ling ta
cur� Furchaser's objeetions priar to Closinb, Furchaser may, at Purcha�ser's option, (i) accept title
to the Real Estate subjeet to the objeckians raised by Purcllaser, without an adjustment 'rn the
Purch�se Price because c�f sueh objections, in which e��ent said objections sha11 be deemed to be
waived for al1 purpases, or {ii) rescind this A�-eement, in svhich event this Aareement shall be of
no further force ar effect; provided, ho«�ewer, Seiler's failure to remowe and cure a Selier Item
shall �ie a default by Seller hereunder �vhich s}iall entitle Purchaser to exeruise its remedies set
out ir► Secti�n 12 hereaf. If Purchaser fails to 9nake �rrit�en objection to the Title Commitment or
Survey, Purchaser shatl be deemed to h�ve appra��ed the Title Commitmeni and Sur�•e� in their
en�irety, Thereafter, Purchaser will accept title ta the Prmper�y subject to (i} Che exceptic�ns to
titte listed in the Title Commitment or shown on thc Sun�ey that relate to �he Real Estate (subject
ko Seller's abli�at��n to remove each S�ller �te�► so as to no longer affect the Real Est�te) ar�d
(ii) sa�ch other matter� as shall be herein provided or which shall be othe� approved in
�y�ritin� by Purchaser (collectiveiy referred to as the "Perrnitted E?cceptians"). T'he partie� agree
that a list c�f the Permitted Exceptions sl�all be attached to and incorpc�rated in the Deed (defined
herein). For greater certainty, the parties hereby a�ree that no Seller Item sha�l ever 6e deemed
ta be a part of the Permitted Exceptions unless expressly approved in writing by Purchaser.
xa�:Ts i;asa �
El�ibit B
Section 5. Represe�ta#ions, �Varra�asies, and Cavenants.
{a) Seller. Seller represents and �s�arrants ta, and covenants with, PurG�tas�r
tha�, as of �t�e Effective Dat� and as of the Closing Date:
(1} Seller k�as full right, power, and authority to execu�e and de�i��er
this Agreement and to Consa�mmat� the purchase and sale transactions prov�ded for heresn
�v�thout obtaia�ing an� further consents or approva�s frorn, or the takin�; af any ot�er
actions �vith respect to, a�y third garties. This Agreernent, when executed and deliv�red
by Seller and Purchaser, will canstitute khe valid and bi�din4 agreernent of Seiler,
en�orceable a�ainst Se�ler in accordarace with its terrris.
(2} `�'o Seller's knQwledge, there are no actions, suits, claims,
assessments, or proceedin�s pending or threat�ned that could materially adversely affect
Seller's ab�lity t� perform hereunder.
(3} Seller shall pay, at o� prior to the Closin� Date, all bills or invoices
arisinb out of or in connection �vith or resuqt�n�; fram the use, o�,�nership or operatian of
the Property up to the Closing Date. I�ot�vithstand�r�b the foreboing, Seller will remain
obligated, after C1QStn�, for the payment af all bills and invoic�s arising out of or in
connectian Lvith �r resulting from the use, ownership, r�r operation of th� Property grior ta
the Closing Date.
(4) Seller shail cause to be teraninated all cantracts, sales agreements,
eonst�uc��on agreetnents, maintenance ag�eements, employment agreemenks, ser��ice
a�reernents and marketing agreements with respect to the Real Estate (collectively, t�ie
"Contraets") as of the Clc�sin� Date at no cost or expense tc� �'urch�ser.
'�Vfien used herein, the phrase " Seller's knorvlQdge flr derivations theeeof shatl mean
the current actual kno�.vledge a�f {whQ Se�ler represents to Purchaser is a
persan rvith kna�vledge r�vith regard to the Property� without any obliaati�n tc� make invesEygatic�n
or inquiry regarding the Prt�per�y, and without obligation to make arty investigation of the files,
docurnents or studies in the passession af other persons, and shall not include any knowledge
which may be imputed to Se11er or of any other person. Purchaser acknowledges that khe
individual named ab+�ve is named solely for the purpose af defining and narrowing the seo�e df
Seller's knowledg� and nak for the purpose of imposing any liability �n or creating any duties
runnin� from such individual t� Purchaser. Purchaser covenants tha� it �vill bring no �ctson of
any kind aaainst such indi�°idual relate� ro or arising out of these re�resentations and warranties.
(b) Purc�aser. Purchaser repr�s�nts and warrants to, and cavenan�s with,
Seller that, as of the Effective Date and as of the Closir�� Date:
(1 } Purchaser has ful� ri;ht, power, and authority co execute and
deliver this Agreem�nt and �� consummate the purc�3ase and sale tran,sactions provided
for herein without obtaining any further eonsents u�r appr�vals from, or the t�kin� �f any
other actions with respect ta, ar�y third parties. Ttais A�reement, when executed and
delivered by Seller and Purchaser, �vill con�titt,�t� the ��alid and �ir�ding agreement of
Pu� enfarceable aga�nst Purchaser in aceordance with its terms.
�ou:zs i 3�+sb.z
Exhibit B
(2) To Purchaser's kno�vieci�e there are no actions, suits, clairt�s,
assessments, or praceedings pendi�g ar threateraed that could materially adv�rsely affect
Purchaser's ability ta perform hereundcr.
(c} S�rvival. The repres�ntations and wan�anties set forth in Sectian S(a} and
Sectian 5{b) shall not be deemed to be merged into or waived by the instn.tments of Closing, but
shall suzvive the Closina for a periad of one (1) year (the "Survivai �Qrio+�"). No broker, agent,
or �arty other than Seller is authorized to make any representation or Gvarranty for or on behalf of
Seller.
(d) Condition of the Fra ertv. �'urchaser acknowled thak Purchas�r tiv ill
have the opportunity� ta independenkly and persanally inspect t9�e Rea� �st�te and that Furchaser
has entered into this Agreement based upan its ability to make such exarnination and inspectio�.
�he Property i� ta be sold to and aceepted by 1'urchaser at Clasing in its then present condition,
i4�� �C �,Y�� �LL F'�,LTLTS, A\D '��'ITHI�UT AIVY '4VARRA1�dTY WH�TS4E`'Ekt,
�
EXPRESS OR ���IPLIEI)," except iar the express representations and warranties af Seller
cantai�.ed in Section 5(a). PURCC�ASER AGREES TO ACCEPT TH� PROPERTY I1V ITS
P��SENT CONDITI04 A�1D ACKNO�ILEdGES A�'�(D A�GREES TH�T SELLER IS ti�T
�r1AI�I1M1�C'r AND HAS �IQT AT AiVY TIivIE 1VIADE ANY WARRAI�;TIES OR
KEPRESE,NT'ATIONS QF AI�,TY KII�D OR CHf"1.RACTER, EXPf�ESS QR I�v1PL�ED„ WITI-i
RESPECT TD THE PROPERT`t , NCLUDiNG, BUT l<1'OT LIh2ITED TO, AItiY
WARRANTIES OR REPRES�NTATI4�1S AS T4 H�A,BIT�IBILIT'Y, MER.CH�ANTA�3ILITY,
�ITNESS FOR A P,S.RTICULAR PURFOSE, TFTL� (OTHER THAN SELLER'�
CQVENANT �F '�ITLE TO BE SET FORTH II`r� THE DEED), ZOIti1T�1G, TAX
CONSEQ��NCES, PHYSIC�L �R E�fVIROVI�i��1TAL C��IDITION, OPERA�"II�G
HIST012Y �R �ROJEGTIONS, VALUATIOi�1, GQVERd�'I�iEN�'AL APPR{3V.�,LS,
GOVERitiI�'IENTAL REGULATIO�IS, `�'H� TRLJTH, ACCLT�AC"�' pEZ C�NIp�.ETE�ESS C)F
THE i'TEL1S OR ANY (]THER II�F�31�1A1'IUP� PRO�'IDED BY OR ON BEHALF Q�`
SELLER TO PURCHASER OR AI�FY �OTHER MATTER OR T�Iti'G REGARDING THE
PROPERT`�, E�CEPT FQR T�IE EXPRESS �EPRESENTATIQ`�S AND �VARRANTIES OF
SELLER CO�`TAI�ED Ii�1 S�CTTpN S�a}, PURCHASER HAS �C}T R�LIED UPON,
�ITHER DIRECTLY Okt ItiDIRECTLY, ANY REPRESENTATION OR WARRANTY OF
SELLE.R WITH �ESPECT TQ THE PROPERTY, E�CEPT FOR THE EXPRESS
R�PRESENTATIOtiS AND Vv'ARRANT�ES OF SELLER CO�'FAd�iED II�v� SECTIOIvr S(a}.
PURCHASER HERE�Y REPRESEI�TS THAT IT IS h�OT R�,LYI?v`� [1pQN AN`r'
`�'�'ARRANTIES, PRpv1ISES, G[1ARANTEFS, C►R REPRES�i>1TA7'IONS hiAD� BY
S�LLER QR AN`r" Oi�1E ACTING flI� CL�I�1I:�fG T4 ACT ON BEHA�.F pF S�LLER N
PLIRCH,4SNG TH� P�.OPERTY, OTHEf� 'FHAN TNE COVENAIvTS OF' TITLE SET C?UTi
IN TH� F�EED AND EYCEPT fipR TH�, EXPRESS R�F1�E5ENTATIC��TS AND
�VAE�RAi�iTIES OF SELLER C4�ITA1?�vTED I�f SECTION S(a).
PU�LC�ASER W'ILL CQ�fDUCT SUCH I\VESTIG,4TIOI�S QF TH� �'RC)PERTY,
IivCLUDt�iG BiJT �OT LI_1�iTTED T'O, THE P�IY"SICAL A�iI? ENVIRONME�TAL
CQNDITID?�S THEREQF, AS F�UR�HASET� UE�`viS N�CESSARY TO SATISFY ITSELF
AS TO THI� C�N�IT[QN OF THE PRf�PER�'Y �►ItiD WILL RELY S�LELY` UPOti SA:�tE
A�,`D hQT UPON A�1`r' INFORI���TIQN PRQVIDED BY flR 0�1 BEHALF t�F SEL�.ER
O'I'H�R THr�.N T"HE EIPRESS REPRESENTAT�QitiTS AND WARRANT[ES OF SELLER
�
HOU:�8134�6.2
Erhibit B
SET (�UT IN SECTI�N 5(a). UP��I CL.OSI'�1G, PUR�CHASER SHALL ASSU�IE THE RI5K
�'H.4T ADVERSE i�1ATT�.RS, I'+1CLUDII�'G ��T N07° LI�!IITED TO, CC}NSTRliCTION
DEFECTS A?dT3 ADVERSE PHYSICAL AI'�iiD EN�'IR�N�v'I�NTAL COiJDITIflNS, MAY
NOT HAVE BEEN REVEALED BY PURCHA�ER'� I`dVE5TIGATIONS.
"�rPPLI�CABLE EN`'IRONI�IENTAL LAV�'S" IviEANS ALL fiEDERAL, STATE,
OR I.00AL �.A�V, STATUTE, ORDI11A�iCE, ()R R�GULr`1Ti0I�,', WHE'�'HER NQW OR
H�REAFT�It IN EFFECT, PERTAI`�I�1`G T(� I I1�1L?US`�`RIAL HYGIENE, QR THE
ENVIRO'.d�IENTAL C�NDITIONS Oi�1, UNDER, �R ABOUT THE �'R��'ERTY,
iNCLUDII�IG Vi��THOUT �.Ii+✓IITATI�:ti, THE FOLL��rVII�iG, AS NUW OR HEREAFTER
Ai�tENDEp: � COl�1PREH�N51V� EhVIR(7NMEN'�AL RESP��ISE, COMPENSATiaN,
AND� �.IABILITY ACT OF 19��, 42 U.S.C. � 9601 ET S�'Q.; E�ESC3URCE, CQi�fSERVATIO�
AI�,iI7 RECOVERY ACT, 4? i_J.S.C. § 49p1 ET SEQ. AS AME�DED BY THE SUPERFUND
A�✓IENI�ME�ITS A�D F�EAUTHORIZATI�N ACT OF 1986, PUB. �.. 99-499, lOQ STA�.
16i3; THE TOXIC SUBSTANC�S C�3�TROL ACT, 15 U.S.G. § 2601 ET SE�.;
EMERG�NCY PLAN�IP�1G AND CC7�vi1�1UNITY I�IGHT TO I��ti4W ACT OF 19�6, 42
U.S.G. § 1101 ET SEQ.; CLEAiv WAT�R ACT, 33 U.S.C. � 12S 1 l�'T SL'Q.; CL�AI\ AIR. ACT,
42 U.S.C. � 7441 ET SEQ.� FEDERAI.. WA�'ER POZLUTIQN C�NTRQL ACT, 33 U.S.C. §
12.�1 ET SEQ., �1�D AN1' CORRESPOI�D�IG STATE LA�+iS dR U�tDI1�ANCES
I1�CLUDING 8UT NC�1' LIMITED TQ THE TEXAS W�TER CODE § 26.001 ET SEQ;
TEXAS HEALTH & SAFET'Y CODE � 361.Oai ,�'T SEQ.; TEXAS SOLID WASTE
DISPOSAL ACT, TEX. REV. C�V. STAT. A�'Iv. ART. 44?7-7; AND REGt7LATIC+IVS,
RULES, GUIDEI.II�;1ES, OR STA3vDAR37S PROMMU�.GATED PURSUANT TO SUCH LA�VS,
ST�.TUTES AI�iD R.EGULATIONS, AS SUCH STA"I`UTES, REGULATIONS, �ULES,
GUIDELINES, AI�D STAVDARDS ARE AMEP FROM TIYIE TO TII�i�.
"HAZARDOL�S SUBSTANCES" M�ANS MATERLALS OR SUBSTANCES T�IAT HAVE.
BEE� OR 11�1AY Ilti `T'H� �'UTTJR� BE I7�TERN1TitiED TO BE T'C3�SIC, HAZARDDUS,
UNDESIRABLE OR. SUB.FECT TO REC��.J�ATION Al`�1D TH,P.T MAY NEED TO BE
SPECI.�LLY TREATED, HANI3LED ANDIQR REM�VED FRC]M TH� PROPEkTY
�JNDER CURRE'�1T OR FUTURE FEDERAL, STATE AND LOCAL LAtiVS, RULES,
REGULATIONS OR GUIDEI.Ii�lES.
T'HE TER�✓tS OF THIS SECTIOV 5(d) SHALL EXPRESSL�' SURVIV� T��
CLOSNG ANI� �OT MER.GE THEREtN.
�ection 6. Purchaser Re�presented bti� +Caunsel. Furchaser hereby represents and
warrants to Seller that: (a} Furchaser is re�resented by le�;al counsel in connection with th�
transacti�n contemplated by this Agreement; and (b) Purchaser is purchasing the Property for
business, cammercial, investment or other similar purpose and not for use as Purchaser's
residence. Purchaser waives any and all rights or resn�dies it may have or be �ntitled to demving
fram disparity in size or from any sibnificant dASparate bargaining position in relation to S�l1er.
Secti�n 7. Purchaser's Release of Seller and its Af�"�liates PURCHASER
HEREBY VVAIVES, RELEA5ES AND A�REES NOT T�Q MAKE ANY CLA�vi OR BR1rvG
ANY COST RECOVER�' ACTIO� OR CLF�I� �JR OTHER ACTI(�i"� AGANST SELLER
OR. iT5 AFFILIATES, DIRECTORS, �FFICERS, PARTi�1ERS, MEPviBERS, A!iANAGEI�S,
Etv�PL�Y�ES, AGENTS, OR ASSIGNS (COLLECTti'�JELY, "SELI.�R AP1D ITS
5
HOU,33134&6?
E�;hibit B
r�,FFILIATES"), I`rCLUDI\iC W�THCIUfi' LIyIITAT�ON, NEGLIGE4CE OF SELLER
(]R ITS AFFILI�iTES AND STRiCT LIA�ILITX), �ASEI� O�i THE FOLL�V�'NG, T()
THE EXTENT RELATI'�1G TQ SEL�,ER'S PER10D O� O'4V1�IER5HIF �F THE PROPERTY:
(A) A'�Y APPLIC�BL,� E`vVIROi�I�ENT.�.L LAW, (B} Aiv'�" DISCHARGE, DISP(�SAL,
RELEASE OR ESCF�.PE QF ANY HAZARDC}US SL7B5T4I�CE, Q�, AT, 'i'O, OR FROM
THE PI�OPERTY OR (G) AI`1Y Edti VTRONI�'IENTAL CON�ITIQ':VS WH.�TSOEVE� Otv,
LT�DER, OR 1N TH£ VIC[NITY �OF TI-�E PRpPERTY; PROVIDED HOWEVER ti�THING
TN THIS 5ECTI�N 7 SHALL PREC�,CJI)E PURCHASE� FRai�i MAKIPIG A CLAI�I F�R
CONTRIBUTIDN AGAINST SELLER AND ITS AFFILIATES BAS�D ON THE ABO`JE
D�SCRIBEI7 EVENTS QR STAT[�TES [� CONNECTIDi� WIT�i THIRI3 PARTY CLAIMS
AGAPiVST FUR�HAS�R �VHICH RELA�E TO �ELLER'S PERIOD �F O�E�S�IIP OF
TH� PROPER "Affi�iate" means a pers�t� who directly or indirectly, or chrough one or
more intertnediaries or c�ther er�tities, Q�vns an interest in, controls, is controlled by, or is under
cammon cvntrol with Seller, ar a pecson in which Selier directly or indirectly, or through one �r
more intermediaries ar other entities, erwn� an interest. "Control" means t�e possession, directly
or i�dire�tly, or 4vith tine or more ot�er persons, of the pawer to ciirect or cause the direct�on of
the management and policies af a person, �vhether Ehrc�ugh the ownership of voting securities, by
contract, nr atherwise. Sell�r ar�d Purchaser agree thak the provisions af this Section 7 shall
expressly survive Closin�;, and shall not merge wit1� the �rovisions of any closing documents.
Purehaser ackno�v�edges �nd a�ees that the disclaimers and ather agreements contained in this
Sectian 7 and in Section SCd} are integal parts of this Agreem�nt and Seller would nok have
agr�ed to sell the Property to P�rchaser fc�r the Purchase Price �.i�rthaut the disclaimers and other
a�re�ments contained in Sectian 7 and Sectian 5{d}.
Sectior� 8. Closing. The closing {the "Closin2"} of the sale of the Pre�perty by Seller
ta Pure�aser shall oecur an �he first business day that �s sixty (64} calersdar days af#er the
Effeetive D�te (the "Closina Date"), in the c�ffices of Andrews Kurth LLP, 6�n Travis Str�et,
Suite 4200, Haustan, Texas 77002, corr,rnencing at lO:Qd a.m. Houston, Texas time. Time is o�'
the essence tivith re�ard to the Closin� I7ate. At the Closing the f�1laGVing, which are mutually
concur�ent cc��ditio�s, shall occur:
the f�llowin�:
{a) Purchaser, at its expense, shall del�w-er or cause to be deliver�d to Seller
(1) Immediatelv available cash funds in the antount of the Purchase
Frtc� as specified ir� Sectic�r► 2.
(2) Evidence satis�actory to Se11er and Title Company that the person
executing the Closing duct�ments c�n bef�alf c�f Purcfiaser has fiE➢1 riaht, poti�ex, and
authority t� do so. �
(h) 5e11e� shall deliv�r oc cause to be delivered tu Purchaser the followina;
(1) �, Special 4Varranty Deed {the "Deed") in the form of Exhibit B,
attached hereta and made a part hereof for all purpases, fully execu�ed and ackno�vledg�d
by Sel[er, conveyinb to F'urchaser �he Property, suhject anly �c� the f ermitted Exceptions,
b
H(]U:'_� 13�86 2
E1�lI�lt �
(2) A Bil1 of Sale atad Assigrunent in the form of Exhibit �C', attached
hereta and made a part hereof for afl purposes, execrated by Seller assigning all o�Seller's
n�ht, title and interest in the Personal Property, `°AS IS" and without warranty or
r�presecltatian of �ny kir�d whatsoever.
(�) A Certificate in th� form of Exhibit i�, attachecl hereto and made a
part hereof far al] purpos�s, executed and sworn to b� Seller.
(4} At khe sc�le exper►se of Purehaser, an Qwner policy of title
insurance in th� a�nount of isstied by Title Company, insuring tkrat
Purchaser is the owner �f the Praperty subject only to the Permitt�d Exeeptions and khe
standard printed exceptions includ�d i� a Texas standarci farm owner policy of title
insuranee; how�ever, the standard exception for taxes shall be �imited to t�e y�ar in whtch
the Closin� accurs, and subsec�uent years and subsequent assessrr�en�s far prior years due
to chanbe in land usage or ownership. At Purchaser's eleetion, and at Purchaser's sole
expense, i� the S�arvey is acceptable ta the Title Company for such purposes, the stanaard
exeeption p�rtaining to "discrepancies, conflicts, or shortages in area ar b�undary lines,
or any encrc�achments, or any overlappin� pf im�ara��ements," may be deleted except for
"short�g�s in area."
(�} Evidence satisfactory to the �'itle Campany khat the pe�sons
executing and delivering the Closing documents on behalf of Seller have full ri�ht, power
and authority to do so.
(c) At th� Closing, ti�e follo�ving items af revenue and expense (co➢lectively,
the "Proration Items") shall be adjusted and apportioned in cash as of 11:59 p.zn. on �he
Closing Date (the "Adiustment Date"}, subject, however, to the terms of the Lease Agreement,
under whic� Purchaser has been obli;ated to pay some or all c�� the fallawing items:
(1) Real estate and other ad valorem ta�es, personal praperty or use
taxes and se�,ver charges, on the basis of the fiscal year for w�hick� such taxes car char�ed
are assessed. If the actual ad valorem ta:�es are not available on khe Closing �ate for the
tax year i� which the Adj�stment Date accurs, the proratson of such taxes at the Closing
shall be estimated based upon reasonable inforrnation availab�� to the parties, including
intormation disclosed by the loca] tax offiee or other public infot�xaation, and an
adjuskment shall 6e made �vhen actTU�l fib res ar� published or athenvise become
avaiaable. Subject to the preceding sentence, aEl taxes and assessments for the year of
�losing and thereafter sha�l be assuEned and paid solely by Purchas�r.
(2) I�'a pro��ision has been made for th� prc�ration of �rater charges,
fiuel eharges or utility charges (i�clu�in�, without limitarion, telep�tone, gas and
electricity) as Seller shall terminate its accounc {but n�t t�e service itself} with �he
providers of al] such serviees as of khe Adjustment Date and Purchaser shall, prior tc� the
Closing Date, make applicatiori ko the providers of such services for tl�e cor�tinuat►on of
st��:h ser�v�ices in the n�t�e of Puechaser oe its desi�nee. It is anticipated that in eonnection
��ith al� such services, the met�rs will be �ead on or a'bc�uk the t�djustme�t Date and Seller
shal] be responsible far payinQ the bills for such services accruii�g �rinr to the Adjustment
7
H�iJ:''8I3a8b.�
C::f�ibit B
D�te and Purchaser shall be respar�sible fc�r �he payment o� all such a�counts accruing on
or af�er the Adjustment l�ate.
The pravisions of Secti�n R(G} will survive the Closing.
{d} Except as e�,pressly provided herein, and subject ta khe terms in the �,ease
A� eement, under which Purchaser has been ab�igated to pay some or all of the Prozation Items,
Se�ler �vill be char�ed an�i ered�ted for the amount of atl of the Prorataon Itelns relatie�g to the
period up to and includin� the Closinb Date, �nd Purchaser will be char�ed and credited for atl of
the Praratiun Items relating to the period after the Closin� Dat�. Such preliminary estimated
Closin� proratians shall be set forth on a preliminary closin� sfaternent to be prepared by Seller
and submittecl ta Purchaser for Purchaser's appro��al prior to the Cl!os�ng Date (the i� Ciosin�
Staternent"). The Closinb Statement, Qnce a� upon, sha13 be signed by Purchaser and Seller
and deiivered to Title Company for purposes o£ mak3nb the preliminary proration adjustment at
Closing subject to the fnal casl� settlem;ent pro�ided far below. The preliminary proratian shall
be paid at Clasin� by P�rchaser to Seller {if the prelimir�ary prorations result in a net credit to
Seller) or by 5eller to �'urehaser {if #he preliminary prar�tions result in � net credit �Eo Purchaser}
by increasin� or reducin� the cash to be deliv�red t�y Purchasez iz� payment o�the �'urchase Price
at the Closin�. If the actual ar�iaunts of the Froration Items are not known as af the Closing
Date, the prarations svill be made at Closing on khe basis of #he be�t evidenc� then available;
thereafter, when act�al figures are received, re-prarations ��vi71 be mad� an the basis of t�e aclual
fib res, and a final cash settlement will be made between Seller and Purchaser. No prorations
will be rr�ade in relation to insurance premium5, and Se[ler's insurance policies will not be
assigned tc� Purchaser. The provisiQns o#' �ectian S(d) wil[ survive the Closing,
(e) Seller shatl pay { 1� one-half of any escrow fees or similar eharbes of the
Title Campany, and {2) the eost of ob�taining any other items required to be deliver�d by Se11er to
Furchaser at Clasing as prQVided herein.
(� Purcliaser shall pay { 1) ar�e-half of any escrow fees or similar char�es of
the Title Company, (2) the base prem�urr3 for the owner's title palicy and any charges for
endarsem�nts or deletians to the a«�ner's title policy, (3) the cost af any survey other tflan the
Survey, {4} any char�es for any title policy in favor of �'urc;haser's lender, and (5) th� eost of
obtaining any ather items required to b� delkvered by F'uschaser to Se11er at Closing as pravided
herei�r.
{g) Up�n corn�leti6n of the �losin�, Seller shall deliver ta Purchaser
passession of t�e Frop�rty, subjeet to the Permitted EYCeptions and free and clear of �he rig�t €�f
any par�ies un�ier all Contraets.
Seetion 9. Cnmmissions. i`eitlter Seller nor Purchaser has contacced any� real estate
broker, agent, fia�der or similar person in connection r�rith t�e ne;€�tiation and executian of this
A�'eement, the transactions cnrat�rnplated hereby or the sale and pearchase af the Property. I£
any clair�s are made by any pa�ty for Acquisitic�n Fees {defined herein) wich respect to this
transaction, sueh claims shall be handled by the �arty whase alle�ed commitmenis gave rise
thereto. .As used herein "AcQUisition �ees" shall mean all fees paid to any persc�n or e�ltity in
connection �vith the selectian �nd purchase of tt�e Prcaperty, ir�c�uding real estate corncnass�ons,
�
Hou:�� i �as�.2
E1��ibit B
seleetion fees, nc�nrecurring managernent and start-up fees, de�eloprnent fees, and any other fees
of a similar nature. It is agreed that if any claims for Acquisition �ees are e��er made against
Seller or Pu�ehaser in connection with the transactians contemplated by this Agrcennent, all sueh
elaims shail be the responsibility of t�e party rv�ose cornrnitm�r�ts fann the �iasis of s�ch clai�ns.
Seller and P�rehaser each a�ee to indemnify atYd hold harmless the ot}�er from and against any
and all liabilities, claims, demands or actic�ns for or �vi�h respect to Acquisition Fees ass�rted �y
any person, firm or corporation in conr�ection with this A�eement or the transactions
cantempiated hereby, and any court costs attorneys' fees or other cqsts and expenses ansing
tl�erefrom, insofar as ar�y such liabilities, claims, derna�ids ar actions are based upon a cantract or
co�mitment of th� indearinifying party. The indetnni�catio� pravisions contained �n this SectiQn
shalD survive the Closin� aX the terminat�on of this Agreement, as appiieable.
Section 10. I}estruction, Dama¢e, Qr Takir�� Before Closin�. If, before Clasing, aIl
or any material �art of the Froperty is destroyed or dama�ed, or �ecomes subject to
cqndernnation or eminer�t domain proceedings, then Seller shall pramptly notify Purchaser
tt�ereof (a "Seller's :Votice"}. Purct�aser may elect to proceed �.ti°ith the Closin� (subjeet to the
other pravisians of this �greement� by deliverin� nc�t�ce thereof ko SeIler withita five business
days after receipt of a Seller's Notice, b�ut Purchaser shall be entitleri ta all insurance proceeds or
eondemn�tior� a�vards payabie as a result of such dama�e ar taki�g ar�d, to the extent the same
may be necessary o� appropriate, Seller shall assi�n to Purchaser at Closing Seller's rights to
svch prc�cecds or awards and, at Closing, Purchaser shall receive a credit for tile amount af any
deductit�le payable by Se11er under any applicable pcoperty in�urance palicy affecting the
Froperty. If, within five business days after Purchaser's receipt c�f a Seller's Natice, Seller
receives writken notice fram Purchaser of Purchaser's terminatio� of this Agreement, then
Purchaser shal� be deemed to ha��e terminated tk�is Agxeerr�erit pursuant to 5ectie�n 1�(b), in
�vhi�h event the Lease Agreement shatl remain in effect and the �erms thereof relakinb to casualty
or condemnation shall eontrol. If, wikhin five business days after Se11er's detivery of a Seller's
No�ice, �e�ler does not receiv� written notice from Purchaser af Purchaser's terra�ination of this
A�eement, Purchaser shall have ���aived its ri�hit to kertninate this Agreement under this
Section 1 Q If, before Closing, less thar� a material part of the Property is destroyed ar damaged,
or becomes �ubject to condemnation ar eminent dc�ma�rs proceedin�s, th�n Seiler shall notify
Furchaser thereof, Purchaser shall have no rigi�t t� kerminate tt�i� Agreement, and the parties
shall proceed �vith xhe CEo�ing, but Purchaser sha�l be entitled to all insurance proceeds or
condemnation a�vards payable �s a result of such ciama�e or taking and, t� th� extent the same
may be necessary or appropr�ate, Se�ler shall assign to Purchaser at Closing Se�ler's righ�s to
such peoceeds or awards and at Closing Purc�aser shald receive a credit fc,r t�e amount of any
deductible payable under any applieable insura�ce p4licy. Far the purpases af this Section 10,
damage or a taking shall be cansidered to be "rnaterial" if the value of the portion af the Pro�erty
dat�,aged or taken exceeds , or, in the case of a taking, i#� the portion
of the Prnpe�ty ta�:en as such t��at it materially adversely affects the ability to use the re�nainder
for the purposes for which it is presently used.
Section 1 l. Terminatian �nd Remeclies
(a) If Purchaser defaults on its obli�ations here�nder or othenvise fails to
consummate the purchase of th� Property purs�aant tc� t�rs A;�eement for any rea�on ather than
termination hereof pursuant to a ri�it expressly �ranted to Purchaser in this A�z'eerr�ent, then
9
HOL�;2313�l86.'_'
��l��bit �3
Se�ler Fnay, as its sQle and exclusive remedy, [ertninate khis Ab eement by notifying Purchaser
thereof, in �vritin�, whereupon neither Purchaser �ar Seller shall have any further ri�ht� or
obligatians hereunder, except khose that by t}�eir terms surv��ve the termination of this Ageement.
In addition to ihe foregaing, Seller shali also be entitl�d ta recover all e�penses, inclutling
reasonable attorneys' fees and litigation casts, incuned in connecti�n �vith enforcing any right or
ren�edy unc�er this A;reemeni. Any such defau�t by Purchaser under this Agreerr�ent shall z�ok
constitute a default under th� Lease Aa eement; provided, however, that tk�e purch�se op€ian
under tl�e Lea�e :�,�reernent shal] be cleemed to be permanently extinguished.
(b) If Purchaser elects to tecmiefate this A� eement pursuant to an express
right granted to Purchaser under this A�reement, then Purchaser shall �ive �vritten notice to
Seller of sucll tennination, �yhereupon neither party hereto shall have arYy fu�ther riahts car
abligat�ons hereunder, excepk those that t�y their terms survive the termination of this Agreement;
provided, ho�veve�, that the tez of tYse Lease A�reement shall rernain in effect and pra�ided
further that the purchase option under the Lease Agreement sha11 be deemed to be permanently
extinguisP�ed.
(c) If Seller defaults on its obligatia�s here�ncier Qr fails tc� consummate the
sale of the Property �aursuant ta this Agreement for any reason Qther than Purchaser's fail�re to
perform its obligatioms hereunder or tertr3ination hereof by 1'urG�aser �n accardance �vith
Sectian 11(b), then �urchaser, as its s�le and exclusiv� remedy, may either (i) terminate this
Agreernent by notifying Selfler tl1ereof, in �vhich case neither party hereto sh�ll h�ave any further
rights or obligatior�s hereunder, except those tt�at by fheir terms survive the terminatiQn of khis
Agreement; prouided, ho��s-ever, that the terrns of the Lease Ab eement shall remain in effect; or
(ii} enfot'ee spec;ific perf�rmance of the obii�ations af Seller hereunder. In addition to the
faregoing, Purchaser shall alsQ be entitled to recover all expenses, ir�cluding reasa�able
attarneys' fees anci litigation costs, incurred in eonnection �vitl� enforcin� any right or rer�ec�y
undEr this Agreement.
Secti�n 1?. Natices. All notices provic�ed or permitted to be given under this
Agreement must be in ���ritin� ar�d rnay be served by depasitin� same in th� United States r�nail,
addressed to the party to be noti�ed, past�ge grepaid and registered or certifiec� with return
receipt requested; by delivering �he same in person to such party by a nat�anally-recagnized,
overni�ht delivery sea (�.�., Federal EKpress); or by facsimile copy transmis$ic�n durin�
narrnal business hours with a ca�firrrzation capy delivered by another method perrnitted under
this Section 12. Natice �iven in accordar��e heee�vith shall be effectiv� upon delivery to the
address of the addressee {eve�i if suc}z addresse� refuses cielivery thereo�. For purposes of
n�tice, the addresses of the garties shalV be as fo�lo«s:
[f ta Seller, ta: City af Pearland
351'9 Liberty Drive
Pearland, Texas 775$1
Attn: City Attorney
Telephone: �81-E�52-1678
Telecflpy: 281-
�j]
Ha� ? � i �as�?
F�;l�ibit B
With a copy to; Andre�vs Kurth LLP
60d `Travis St., Suita 4200
Houston, Texas 770fl2
N.ttn: Mark B. Arnold
Telepho��; 713-220-3935
Tel e�apy: 713 -23 �-729 5
If to Purchaser, to: �Tniversity af Houstan Syatem
Z 12 E. Gullen Build�ng
Hpuston, Texas 7720�
At�ention: Chancellor
Telephane: 713-743-882�
Tetecopy: 713-
`J4'ith a copy to: Uni��ea of Houston System
21 � E, Cullen Build'ang
Houston, Texas 77204
Attention: Office of General Couns�l
Telephane: 7 T 3-7�3-0}��
Telecopy: 713-743-0948
If to Title Company, to:
AttenEion:
Telephone:
Telecopy:
Either party or the Ticle Company hereto may change its address for notice by givinb three tlays
priar w�itten notice thereof to the ather party and the Title Company.
Sectian 13. �,ssi�ns; Bene�eiaries. Purchaser shall not a.ssign this Agreement or
Furchaser's rights, duties and obligations hereunder witlzout the prior written cansent af Seller to
any persan other than art entaty cantro�led by, under cammon cantrol rvith or controlling
Purchaser, and any attenmpt to da so $hall constitutc a default by Purchaser hereunder.
Natwvithstanding any such assi�ment, Purchaser shalf remain liab�e far the performanc� c�f its
obligations hereur�der. This Agreement shall inuee to the benefit of and be binding on the parfies
�ereto and their resp�ctive heirs, legal r�epresenkatives, successors, and permiited assigns. This
Agreement is for the sole benefit af Seller aa�d Furchaser, and no third party (incfuding without
lirnitatian subsequent owners of the Froperty) is intended to be a ber�eficiary of or have the ri�fit
to enfc�rce this Agreement.
Seetion 14. Governin� Laav• Jurisdiction, This A�eement shall be govemed ana
construed in �ecordance w•ith khe laws of t1�e St�te of Texas. Any suit, claim or ather action
which is braught �o construe this Agreement, or which arises directly or indirectly under this
A�eement, shafl be broraghE anly in a court of appropriate jrarisdiction in Hous�on, Harris
I�
Hou�zs �sas�.?
E�:hibit B
County, TeYas and suc1� court shall be the exclusi�,�e tribunal far hear�n� the suit, claim car ottaer
a�ctian.
Section 1 �. EnHre A�reerr�ent. �fhis �1� is th� entire a�reeinent betwveen
Seller and Ptyrchaser canceming the sale of the Property, and nc� rnodifieakian hereof or
subsequent agreement relative to the subject matter hereof sh�l1 be binciing on e�ther party unless
reduced to writing and signed hy the party �a be bound. All EYhibsks attached hereto are
incorporated here�n by �his refcrence for all purposes.
Sectio� �6. Bvsiness Dar's; E�olida�•s; '�'4'eel:ends. As used in t��is A�eement, the
term '`business day" rneans a�y day, other than a Saturday ar Sunciay, on which banks locat�d in
Houston, Texas are not re�uired or auchc�rized to close. If any no#ice or a�tion requ�red ar
permitted by this A�reerrier�t fa�l� e�n a date �vhich is not a business day, then such date shali be
extended ro the next business day.
Section 17. Ru�e of Const�uction, 1�(0 �Vaiver. Purchaser and Sel�er acicnoti��ledge
that eac� party has reviewed this A�'eement and that the rule of constructiutt t�a the effect that
aziy ambiguities are ta be resolved �gainst t�e dr�fting party shall not be em�loyed in the
interpretation of this A,�reement or any amendments her�to. No provisi�� af this A�reem�nt
shal[ be deemed tc� have been +.vaived by either party unless the waiver is in ��•riting and signed
by that party. No custom or practice tvhich may ea'olve betwveen the Purchaser and Seller durinb
the term of this Agreem�nt shall be aeemed or canstrued to waive or lessen t�e ri�ht af either of
the parties hereto to insist upon strict compliance of the terms Qf this A�reerne�t.
SecEic�n 1$. �Iultiple CounterFarts. To facilitate execution, tt�is Agreement may be
exeeuted in as many caunterparts as r�ay be convenient ar required. It sha�l nat be necessary that
the signature of, or on behalf of, each party, or that the si�mature of all persons rec�uired to bind
any party, app�ar on each c�unterpart. Facs�mile transmission signatures sha11 be deemed
original signatures. All caunterpac shall colle�tively constitute a singie instrument. It shall not
be necessary in rnaking proof af this instrument to praduce or account for more tha� a single
caunterpart ccantaining t�e respective signatures af, or on behalf af, each of the pariies hereta. A
signature pa�e to any co�nkerpart rnay be detached from such counterpart �vithout impairing the
legal e#'fect of the signatures thereon and thereafter attactaed to another counterparQ identiea�
thereto except ha��ing attachec] t� it ad�itional sigrtature pa�es.
Section 19. Invaiid Prvvisians. If any pravision of this A�reement {except the
pre�visions relatin� to Se1Ser's obligation to convey thc Property and �urchaser"s obligation to
pay the Purchase Price, the 6nvalidity of either af which shall cause th9s A�eernent to be a�ull and
void) is held kQ be ill�gal, invalid or unenforceable under present or fut�re 1aws, such �rovision
shall be fulfy severable; this Agreement shall be construed and enForced as if such illegal, invalid
or unenf�rceabte provisic�n had never com�nsed a part of this Agreer�ent; and the rer�lair�i«g
provisions af this t'��reement sha11 remain in full force and effzct �nd s�iall not be affected by the
ill��al, invalid or unenfc�rceable provision or by ��s sc�erance from this Agreement.
Sectbor� 20. Attorn�vs' Fees. �n the event of Liti��tion bettiveen the parties in
cc�nnec.tion �vitli this A,greeinent, the prevailin� party shall be entotled to recover its reasonabl�
attorneys' fees and costs �rom the non-prevailing party. "I'he obligatian in the immediately
12
HOU:�813436.2
Llhi�it �
precedin,� sentence sha11 survive any termination of this Agreement or the Closing as a sur��ivin�
obligation.
Sectian 2�. Time is of the �sse�ace. Time is of the essence in tl�is Ageement.
Se�tion 22. Effectiv� Date, As used in this Agreemet�t, the "Effective Date" shall be
tlie date an which this A�eement is executed by the last of Purchaser ar Seller.
Section 23. Re ortinQ Person. Purchaser ar�d Seller hereby desi�ate Title C4mpany
as the "reporting pe�son" pursuant to the provisions of Se�tion b0�5(e) c�f the Internal Revenue
Code �f I98b, as amended.
5ectian 24. 1�Iiscellaneous. Whenever herein the singular number is used, the same
shall include rhe plural, and the plurai shall include the sing�tar where appropeiate, and �vords af
a�ny gender shall include the other gender where appropriate. The headcngs of the Seckions
contained in this Agreement ace for canvenie�ee anly and shal] not be t�ken into account in
determining the meanin� Qf any provis�on of this Agreetr�ent. The worcls "hereo#" and `�herein"
refer ko this entire A� and not merely the Sectia�� in which such �w�ords appear.
Sectian 25. LRtnitatia�a of Seller's Liabilitv. :�iotwithstanding any at��er provision of
this �.greeanent, any agreernent contemplated by this A�reement, or any ri ;hts �vhich Furchaser
might �thenvise have at la�v, eq�ity, or by stat�te, «�hether based on contract or some other
claim, any liability of Seller to Purchaser w�ill be litnited to its [equity interest] in the Property.
'LVithaut iirniting the generality of the fore;oinb, if Se11er is ar becames a pa�tnership, the general
qr l�mited partners, employees, a;ent or affiliate of Seiler wiLl not in any manner be personally or
individually liable for the abligations of SelIer hereuntier or for ac�y clairns related Eo this
Agreement, any agr�etn�nt contemplated by ti�is Agreement, or tfie Property. If Seller is o�
becomes a corparation or limited liab�lity com�any, no rnember, manager, officer, emplr�yee,
agent or a£filiate of Seller wi�l in any manner be personally or individually liable for the
obligat�ons of Se11er ]iereunder or f�r ar�y claim in �ny way relatec� to t�is Agreerrzent, any
a�re�ment cc�ntcmplated by this A� or the Propet`ty. The provisiot�s of this Section 30
shal] survive Closing.
S�ction 26. ��r'aiver of Jut TriaL TI PARTIES T'0 T�IS AGI�EEMENT
HEREBY K;�fl�VI1�vGLY AND VOLLTNTARILY" WAI'vE THETR RIGHT T� HAVE ANY
SUIT CLAIbI OR DISPUTE AR�S�1G DIRECTL� OR INDIRECTLY UI�iDER THIS
AGRFEMENT DEC'IDED �Y A JURY AND CO�;SENT TO I-�AVE A:VY SC�CH h�tAT`['ER
I3ECID�L7 SC7L.EL�' AND EXCLUSIVELY BY THE COURT.
Section 27. No Electrunic Trans�cfions. The parties hereby ackn�?wledge attd a�ree
this A�eement shall not be e�cecuted, entered into, alterec�, amended or moditted by electron�c
means. `Vithout fimiting the generality of the foreg�ing, the parties hereby agree the transactions
coniernplatec� by this Agreement shall not be conducted by electranic means, except as
specifically set forth in the Section 1? {Notices) or �eetion 1 g{�lultiple Caunterparts}.
QRemainder �f th�s pa�e intentionally left l�lar�k; si�►ature page folia���s.]
13
ElQU:2� 134Sb.?
E:�hibit B
Executed as aft3le Effective Date.
SELLER:
FURCE��►SER:
CITY C�F PEARLf�ND, TEX,4S
C
Date of Executican:
Mayor
llT�I�v"ERSITY OF �€OLJ57'(�N SYSTEI1r1
By:
Name:
Title: President, Board of Regents
Date of Execution:
S-1
HOC:?8 [ 3�86."_'
E�hibit B
TrTL� COi��PA�iY JQIhDER
Title Company° joins herein in arder to evidence its as:reert�ent to perforin the c3uties and
obei�ations of Title Compar�y set forth herein and to acYcno�vlec�;e r�eceipt of a fully-executed
copy of this Agreement.
Dated: , ZUO
By: _
Name:
Titl�:
S-2
�ou:�s i 3ass.�
E�hi�nt B
SCHEi�ULE UF �XHIBITS
A - Description o� Land
B - Form of Speciaj Warranty 1Deed
�' - Bill of Sale and Assi�ment
D - Fonn af FTRPTA Certiticate
E - Lease A�eement
Schedule-1
�ou.?� i 3�ss.�
E�;hib6t �
EXHIBIT B
NC�TICE O� CONFIDENTIALITY R[G�[TS: IF YQU AR� A N,�►TURAL PERSON, YDU
MAY RE�via�JE OR ST�IKE ANY C3R .4Ld. �F THE �'OLLOWItiG �NFpR4iATIC7N FRD�fi
THIS II`STRUMENT BEFfl�RE IT IS FILEB FOR RECORp �1 �I`HE PGBLTC REC�RDS:
YOUR SOCI�L SECURIT4' NIJrMBER OR YOUR DRIVER'S LICEi'�'SE NUivi�ER
SPECIAL �VARRAI�TY D�EEI}
"THE STATE OF "I'EXAS
CO[1�?�1TY OF HARRIS
�
§
§
KItiOW ALL MEN BY THESE PRESEN'I'S:
The City of Pearland, T�xas {"Grantor"}, for and in cansideration of the sum of $10.00
and other gQOd and valuable eonsideratis�n, tI�e receipt and sufficiency oF which are hereby
acknowledged, has GRANTED, BARCAII`iED, S��,p, ar�d CON`VEYED and by Chese presents
does GRAi�T, BARGAII`, SELL, and CONVEY unto the University of Houston System
�"Crantes"), the tract or parcel of Iand in Harri� County, TeYas, desc�ibed in Exhibit A, tagether
��ith al� ri;hts, titIes, and interests appurtenant thereto including, without l�mitation, �rantor's
interest, if any, in al[ improvements thereon (such iand and inrerests are hereinaft�r collectively
referred to as the { er "}; pravid�d, however, that Grantee covenants and agrees to use the
Property only for hiaher educatiot� purposes and that tf Grantee, its successors or assi�ns, uses
the Property or any portpo� thereof for any other purpose, or if Grantee, its successors ar assigr�s,
ceases using the Property or a�y portian thee�eof for said �urposes, then the Propec�y or any
portion thereaf will autamatically revert to Gr�ntor, its successdrs or assigns, without atfy �arther
action being taken.
This Special Warranty Deed and tlie conveyance hereinabc�ve set forth zs executed by
Grantor and accepte� by Gra�tee subject only to tY�e t�atters described in E�hibit H attached
hereEo and ineorporated herein 'by thes reference, to Che ex#ent the same are valicdiy existing and
�pplicable ta the Progerty {hereinafter referred to ca9lectively �s ihe "Permitted Exce�ptions").
Grantee ackno�c-ledges that Grantee has independently and personally inspeeted the
Prc�perty and is aequirin� the Pr�perty base� upon such examination and inspection. The
Praper�y is conveyed and accepted by G�antee in its present conditian, "AS IS, �vVITH ALL
FA,UL'd'S, A�1D WITHOUT ANY �VAFtR4NTY 1�4'HATSOE"�'ER, EXPR�SS OR
ai��PL��D", excep# �'o� the express r�presentations and tiv�rranties t�f Grantor tterein.
GRANTE� EICCEPTS THE PRC7PERTY I�1 ITS PRESEItiT CONDITIDI� A�+D
ACKNd4VL�DGES A?�D AGREES TH�T GRANTOR �S N�T NIAI�ING A�fD HAS NOT
AT A�Y ZIiYIE M,4D� ANY WARRANTIES OR REPRES�N'�'A'�IONS OF ANY KIF�1D QR
CHARACTER, EXPRESS dR IMFLIED, '4VITH RESPECT TO THE PROFFI�TY,
I�CLUI�II`�1G, BUT NOT LIMITED TO, �4NY �,�VARR�,�T[�S (}R REPRESE�JTATIONS AS
TO HABITABILIT`r', 'viERCHAI�TABILIT�'`, FITivESS FOR A PARTICUI.IAR PURPOSE,
TITLE {OTHER THr�N CFRAVTOR'S Cc��'ENANT OF T[TLE SE'C' FC�RTH iN THIS DEED),
Z�I*1ING, T,A?� CO?�'SEQUENC�S, PHYSICAL, OR E\IVIRON�vTENTAL CONDiTIQN,
OPERATIiVG HISTaRY O� PR01E�.T'IONS, VALUATTON, GC)VEFtNiV�E�1TAL,
API?RQVALS, �OVERNMENTAL R�G[�LATIQNS, "I'HE TRUTH, f1C�'URACY OR
I�
HOiJ:28 13�l3b?
E�hi�it B
COMP[.,ETENESS flF TH� ITE`viS OR ANY O�'HER INFC7RMATiON pR�VID�D �Y OR
O�V BEH,�LF C}F GRAitiT�R TO GR�NTE� QR A,�,Ty OTHE� £�iAT"TER OR THING
REGARDI?V�G THE PR4PERTY. C;RANTEE HAS NQT RELtED UPON, EITHER
aIFtECTLY OR N�IRECTLY, �NY REPRESEi��'A.TION dR tiVARRANT� QF GRA�ITOR
WITH RESPEGT TC} THE PROPERTY, OTHER TH:�N THE COVEI�dAI�IT'S OF TITLE S�T
OUT II� T�IIS D�ED. GRA�1�'�E HERE�Y REPRESEN7S THAT' IT IS N4T RELYNG
UPOiV AiVY �VARI�IP�:T1�S, PROw1IS�S GU�,RANTEES, OR F�EPRESE:'�T��TI��S
I41ADE BY GRA\iTOEt. C}R A�iY ONE ACT'1`dG OR CL,AIi1�Ti?�;G TQ ACT O\i BEHALF QF
�RANTQR I?4' PURCHASII�I�G THE PR�C►PERTY, OT'I�Eft TH�.n THE COwENA�iTS OF
TITLE SET OUT ,iN THIS DEED. GRANTE� H:�S COi�'DUCTED SUC�
Ii�YVESTIGATI03VS OF THE PROpERTY', P�`CLUDI�;G BUT iviC7T LIN�ITED T�, T��E
F'HYSICAL AIv'D ENVIRQN�iENTAL C�?NDI�"I(��;5 `I'HEF�EOF, AS GRANTEE DEENiS
NECESSARY TO SATISF'Y' 1TSELF ,4.5 �'p THE CONDITION i�� 'I`HE PROPERTY E1ND
IS RE�,YII�lG SOLELY UPOI'v� SAV1E AI�JD NOT UPQ�i A?v'Y INFOR�iATION PROVIDED
BY OR QN B�HALF OF GIt�,NTpR, GR,q�1TEE ASSUI�iES THE RISK THAT ADVERSE
MATTERS, PVCLUDIi'1G BUT �dpT LI\riITED TO, CONSTRi,'CTI�N DEFECTS AitID
ADVERSE PHYSICAL AN�7 Eir9VIRO:r1�iENTAL COhDITIOi�S, 1w�AY NQT HA�'E BEEN
REVEALED BY GRANTEE'S TtiVES�'IGATI�.INS. �� APpLrC,4BLE E�iVIRO�f�VIEI'�1TAL
LA�VS" I��dEANS ALL FEDERAL, STATE, �R Lfl�'AL LAW, STATUTE, ORDINA�CE, C7R
REGULATION, �tiHETHER NOW C)R HEREAFTER IN EF�'ECT, pERTAI�si�1(� Tp
H�ALTI�, PJDiJS`I'R�AL HYGIENE, QR THE �NVIR�i`�;I��L.NTAL CC?NDITIONS C)N,
LT�,`DER, t�R ABOUT TI�E PR�PERTY, INCLUpING W"iTHOliT &.I�riITATIQ�, THE
FOI.L.(71��'I;�iG, AS Ndl,t�' OR HEREAFTER AME�iDED: COI�IPREHENSIV�
ENVIRQNivIE°�1TAL �ESPONSE, Cp�VIPENSATIC7i�1, A�D �.IABILITY ACT OF 19�0, 42
U.S.C. � 960I ETSEQ.; RESOURCE, CpNSERVATION AtiD RECC}'VERY ACT, 42 L1,S.C. �
4901 ET S�'Q. r'�5 r��IENDED B`r' THE SUPERFUT�ID A�viENU4f�NTS Ai�ID
REAUTHORIZ�T�O�F ACT OF 198G, PLfB. L. 99-499, 100 5TAT. 1613; TI-IE TOXIC
StJBSTA�CES CONTROL ACT, 15 U.S.C. § 2b�Ql ET SEQ.; ��IERGEI�CY PLA2vfiiNG
AiV�D CQ�'1MUNITY RIGHT TO K,'`•lOW ACT �F 1986, �$2 U.S.C. � 1101 ET SEQ.; CIL,EAN
�VATER ACT, 33 ZJ.S.�. y 1251 E�" �'E'Q.; CLEAN AIR ACT, 42 L;.S.G. § 7401 ET SEQ.•
FEDER�,L ZVATER PaLLUTION CONTROL ACT, 33 U.S,C, � 125� ET SEQ,, At+1D ANy
C�RRESPO�lDI�1G STATE LAWS i�R ORDITIA`�10ES INCLUDING Bi�T dtiOT LIU�IT�D
T� THE TEXAS W'ATER CODE � 2�.pp1 ET SEQ; TEYAS HEALTH & SAFETY CQD� §
361.041 ET SE�,; T�:XAS SOLID 'LVAST� DISPpSAL ACT, TE�. REV. CIV. STAT. A�'�1,
ART. �47'�-7; ,�i��D RECC�'LATIQNS, RUL�S, �GLTID�LI�dES, C3R STANDARDS
PRQ�✓IULGATE� PliRSUA�T TQ SUCH L��i�'S, STATli'T'�S AND R�GULAT�ONS, AS
SUCH STATUTES, REGULATIDNS, RULES, GUZDELNES, A�1D STANDARDS A1�E
AMENDED FRQ�f TIME T� TIl�1�. ¢�H1►ZARD�()GS SC1BSTr�N�CES" MEANS
M�TERIALS OR SU$STANCES �'I��T H�,�w'� BEE� OR MAY IV THE FUTURE BE
I7�TERMINED TO B� TOXIC, HAZARDDIIS, UtiDESIR�BLE OR SUBJ�CT TO
REGUL,4TI[7:�f �,I�D TI3�1,T �rt.�Y NEED TO BE SPECIALL'Y' TEtEATE;D, HANDLED
Ai�;D/QR RE1�10V�D FRQM THE PROFERTY UIVDER CURR��;T �R FU'1'�JRE
�Ei]ERA�., STATE A�1D L.00AC, L���'S, RCJ�,ES, REGUI��,TIO�IS OR GU[DELINES.
TO HAVE AI�iD TQ H�LD ihe Property, together �vith al] and sin,�uular the rights and
appurtenarices thereunto in �ily�vise l�elon�in�, unto Grantee, its suc;cess�rs and assigns f�rever,
and Grantor does hereby bind itself, its successors and assi�s, to �[�'ARRANT AND fidRE''v'ER
:
HOU:"8 I 3�{�b.2
E}:�liblt �
DEF,Ei�1D all an�i singular the tdtle to the Property unta the said Grantee, its successors and
assibns a�ainst every person �vhomsoever la4vfully claimin� or to elaim tl�e sarne or any part
therecaf by, through, or under Grantor but not atherwise, subjeet to the Permitted Exceptions.
4;rantee's address is� University of Houston System
211 E. Cullen building
Hc�uston, Texas 772U4
Atte�tion: Chancellrar
Ad t�alorena t�xes for the curr�nt year have been prar�ted a� of th� date hereof, and the
pa�ent thereof is assumed by Grantee.
E��.CUTED as of , 200
LTi��VERSITY Q�' HDUSTON SYSTEi�fi
�y:
Name:
Title: President, Board of Re�ents
�.
HQU:281�43b.2
E�hibit B
THE STATE Qi�' TE;�Ag
COUiv'TY [jF DA�.LAS
This instrument w�s acknowled�ed before me on , ZOQ by
, President af the Boara of Re�ent� of the IJniversifiy o� Hauston
Systern, on behalf of s�td Syst�tn.
I'rotary Public, State of
:
�o� �?si�asb.?
F�;hib�t B
Exhibit A
I�egal Desc�iption of the Property
� � 1
��
� ,
c� � � �
�
.
HO L; - �8 l 3486?
E�hih�t B
ExH�
BILL aF SALE A1tiD f1SSIG�I�IENT
THE STATE OF TEXAS
COC1�]T'Y OF D�,LL,AS
Concurrenfly� ���ith the executic�n and deti��ery herecaf the Cit� of Pearland, r i'exas
(" �ssi�nor ") is conveyin� to the University of Houstan System, whose address is 21 ] E. CulIer�
Building, Hcauston, Texas 772(}4 ("Assi�nee"), by Special tiVarranty Deed (the "Deed°'), that
certain real property, together with t11e improv�ments located thereon (the "Fr�ty"}, ly-in�
and being situated in Hrarris County„ Texas, being more particUlarly des�:cibed c�n E�habit "A",
attached hereta and mad� a part hereaf fflr a11 purposes.
Assi desires to assign, transfer and �convey to Assegnee all af the right, title and
interest of Assi�ior ia� certain items of tan�ible and intangible personal property re�ating to �he
Prapeety I(all of s�ch properttes and assets to be assigned hereunder beinb eollectiveiy called tl7e
"ASSi�necl Properkies"),
NC3�V, THEREFORE, in consideratior� af the receipt of Ten Dollars ($10.(��J) and other
good and valvab�e consideration in hand paid by Assibnee to Assi�nor, the receipt and
sufficiency of �vhich are hereby acknowledged and c�onfessed by A,ssignor, Assi�tor does hereby
ASSIG�v, TRAI�`SF�R, SET OVER and DELIVER to Assi�nee, its successors and assz�ns, all of
the Assignor's right, title and interest in the Assi�ed Properties, subject only to t�e exceptians
and encumbrances affect�ng the Prcaperty, AS IS, and �vi�haut any warranty, e�cpress or implied;
provided, hotivever, that Assi�or hereby represents and 4v�rrants to assignee that Assi�nor has
not previous�y assigned its ri�tt, title and interest in and to khe Assigned Properti�s to any third
party ather thar� ta Assianee pursu�nt to this Bill af Sale and As�im�ment. The Assigned
�'roperties inc]ude Assienor's right, title, and interest in the following:
1. all ��rsonal properiy atta�hed ta ar used in connection with the Real
Estate.
2. To the extent assc�able, a91 licenses, permits, warranties and approvals,
and al! �i�hts thereunder, relating ta the Property ar t�c Assi�ned Properties.
I� WITI�:ESS W� Assignu�r has caused tEjis Assi�,�iment to t�e effective as of
, 2fl .
[Remainder of this �a;e intet�tionally lefr blank; signature page follows.]
C-1
t�o�_�� i zasd.�
Exhibit B
�XHI�IT D
CERTIFIC.�.TIO\ UF N(7�'�-F"OR�IGN ST�rTUS
Section 144� of the [nterna] Revenue Code provides that a transferee af a LJ.S. real
property ir�teres� must �ritti}�old ta�c if the transferor is a foreign person. For U.S. tax purposes
(incluc�in� Sectiara 144�), the otivner of a disregarded entity (�vhich has legal �itle to a U.S. real
property intexest under loca] taw) will be the transferor af the praperty and not the disregarded
en#i�y. To inform the University of Houston System (��Transferee"} th�t withholding of tax is
not required upon the disposition of a U.S. real pro�erty interest by the Ciiy of P�ar9and, Texas
(""Y'ransferor"}, the undersi�ed, in his capacity as Mayar of Transferor, but not indivi��ally,
hereby certifies to Transferee the folIo�ving on behalf of Transferor:
1. Transferor is not a f�rei�n corpor�tian, foreign partnership, fareigci trust,
or foreign estate (as thos� terms are defined in the Intemal �evenue Code and Income
Tax Re�ulations);
?. "Transferor is not a disregarded entity as defined itt S�ction 1.1�#45-
2(b)(2)(iii);
Transferor's U.S. err�ployer iden#ificatior� number is ; and
4. Transferor's office address is 3519 �.iberty Drive, Pearland, Texas �75� 1,
Tr�nsferor �nderstands that this certificatior� may be disclosed to t}Ye InternaE Revenue
Servi�e by 'I`ransferee and that any false statement cantatned herein could be punrshed by fi�e,
imprisanment, or bath,
Under gena2ties af perjury [ declare that I have examined this certification and tQ the 6est
vf tny icnawledge and belief it is true, eorrect and complete, and i further declare that I have
authority to sign this doeument on behalf of Trar�sferor.
�ity af Pear�and, Texas
By:
��a}"Ot
Date:
�
HQI; "8lJ4Sh.2
C�9�ibit B
E�HLBIT I
t1iR COtiDi�'L(3NING A�ti'D HEATI4G SERVdCES
Land€ord ���ill f�rnish Buildina standard air conditioning and heating bet�veen 7:00 a.m. and 11:00 p.m.
from ^�londay° throu�h Sunday, a1C exclusive of Holidays (a5 def�ned �elo�v). Upon r�quest csf �'enant made in
accardance with the rules and regulat�ons for the Building, Landlurc� w�ill furnish air condition�ng and h�atin� at
ather times (tha� is, at times other [han ihe times specified above), in t�•hech event Tenant shall reimburse Landlord's
per hour operating cost for each air handting unit aeti�°ated, includin6 all ne�:z�sary c�ntral plant equipment ta
provide minimum loads for overti�ne HVAC. �
The Following datzs shall can,titute "`Holiduys" as said terrn is used �n this Lease Agreerti�nt:
(f) �ew �fear's i3ay
(2) �Semorisl Day
(3) Labor Day
(4} `i�hanks�ivi�� Day
{5) �riday follo�ving Thanks�iti Day
(6) C}tris[mas
If any hotiday ttescribed in { 1}, (2), (3} or (6) above falls on a tiveekertd, Tenant acl:nc�4�•ledgzs and a�cees that
Landlord sha19 have the rigltt to de�i�nate the przcedin� Friday or the follo��•ing ivfo�tiay as the holid�y to be
c�b�erved bv the Bui�dintr.
in additian ta any charges to be billed to Tenavtt pursuar�i to the Lease Agreera�ent, Tenant shaPl reimburse
Landlard at the rate of $Sfl.O[} per hour per air hantller unit �vhen air eonditioning ar heating is tumished at times
other than those stated above. HoweG�ee, such rate is based upon the "Kilow�att Ho�r I�ate" (as hereinafrer defin�d)
for electriciYy as of the datz of this Lease Atrreernent (the "Base Etate"� and if and �vhen tlie Kilowatt Hour Rate
i��creases aver the $ase Rate, the aforesaid rate of $50.�0 pzr hour per a'sr handler shall automatically increase
�roportionate�y. The "Kilo�iatt Ha�ur Rate" shall mean the actual avera�e cost per l:iloe���tt hour charged by the
public utilities �rovidino electricity to [he Suilcling, or, if said pub[ic utillties s�all cease charging kor electricity on
the ba,is aFa kilow�att hour, then the KiEo�vatt I Rate shall mean the actual averaQe cost per unit of ineasurement
substitut�d therefore by ��id public utilitizs. v
�
HO[;:279�215.12
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