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Contract 49467
CITE'SECRETARY CONTRACT NC. Form of Tenant's Estoppel Certificate City of Fort Worth(Tenant)hereby warrants and represents to and agrees with Aberfeldy Properties,Inc.and its successors and assigns(Purchaser)as follows,with the understanding that Purchaser is relying on these warranties,representations and agreements in connection with its purchase as follows: 1. Tenant is the tenant under that certain lease agreement(Lease)dated May 1,2007 between Hwy 80 Capital,L.P., and subsequently purchased on June 10,2013 by The Atrium Remains the Same,LLC,D213148433,as landlord,and Tenant, as tenant, covering approximately 16,141 square feet of net rentable area and 600 square feet of storage space in the building located at 8851 Camp Bowie West, Fort Worth, Tarrant County, Texas 76116 (Property),with the premises occupied by Tenant under the Lease being referred to as Suite 300 and storage. 2. Attached to this certificate as Exhibit A, is a true, correct and complete copy of the Lease and all amendments to the Lease. 3. The Lease has not been amended or modified and is in full force and effect as originally executed, except as otherwise disclosed in the Lease,and that to the best of Tenant's knowledge and belief,neither Landlord nor Tenant is in default in any respect under the terms of the Lease. 4. The commencement date of the terns of the Lease is October 1,2007 per the Commencement Notice and the term of the Lease as per subsequent Renewals and Amendments will expire on November 30, 2020 unless sooner terminated as provided in the Lease. 5. Tenant has no renewal option,extension option or expansion option under the Lease[except as follows:].Per Section 6 of the original lease,Tenant has the Right of First Refusal for additional space. 6. Tenant is in possession of the premises leased to it(Leased Premises),and Landlord has complied fully and completely with all of its covenants,warranties and other undertakings and obligations under the Lease through the Effective Date of this Estoppel Certificate as set forth below [including,without limitation,construction of all improvements and tenant finish and Tenant has received any and all tenant allowances due Tenant under the Lease],with the result that Tenant is fully obligated to perform,and is performing,all of the other obligations of Tenant under the Lease,without right of counterclaim,offset,defense or otherwise. 7. Tenant has not made any prepayment of rent under the Lease other than N/A—1 and that there are no offsets,defenses, counterclaims or credit against the rentals due under the Lease. security deposit has been made with Landlord in the amount of$0.00. here are no side letters or other agreements, whether or not constituting amendments to the Lease, for tenant V 9. — nducements such as rebates of or reductions in the rental provided for in the Lease[except as follows:N/A]. 10. xcept as specified in the Lease,Tenant has no options to purchase or rights of first refusal in connection with the Leased v W 0 remises or the Property. V 1. enant has no parking rights under the Lease, and no exclusive parking spaces are assigned to Tenant under the Lease tsphalt xcept as follows:]. 140 parking spaces will be combination of parking around the building and the secured fenced ®IU6 V surface lot. o the best of Tenant's knowledge,neither Landlord nor Tenant is in default under the Lease and no event has occurred which with notice or the passage of time will become a default under the Lease. 13. Tenant has not,and is not preparing to,declare bankruptcy or begin reorganization proceedings. 14. This Certificate inures to the benefit of Purchaser, its successors and assigns,and is binding upon Tenant and Tenant's heirs, legal representatives, successors and assigns. This Certificate does not alter or modify any of the terms and conditions of the Lease or of any guaranty of the Lease. EFFECTIVE this J day of August,2017 1 2 3 4 TENANT: Q - City of Fort Worth RECEIVED o By: A 2017 j Name:Jesus J. Chapa,Assistant Cijy !Wager F ;rT� -SORT WORTN ti �. C.RE7ARY a Approyed as to for an a ali !A�1 r• By: U; _ Jessica Sangsvang ssistant ty A orney # by: 7LXNs onald P Gonzales,As . City Secretary Exhibit A € al l f Cl t WYSECRETAW , CO CT NO. ©(p JAN 3,96i ("uyovF•ORTWi�YlA FORTWORTH November 10,2015 Theron Bryant,Principal The Atrium Remains the Same,LLC c%Coldwell Banker Commercial Alliance 255 N. Center Street,Suite 200 Arlington,Texas 76011 Re:Amendment to Second Renewal to Lease Agreement(City Secretary Contract No.35306-R2)between the City of Fort Worth("Lessee")and The Atrium Remains the Same,LLC("Lessor"),current owner for space at 8851 Camp Bowie West(City Secretary Contract No.35306,35306-RI) Dear Mr.Bryant: This letter shall serve as notice that the City of Fort Worth would like to amend the Second Renewal to Lease Agreement(City Secretary Contract No. 35306-R2)at 8851 Camp Bowie West with The Atrium Remains the Same, LLC,to also include the 600 rentable square feet of storage space cited in the original lease and first renewal documents(City Secretary Contract No.35306,35306-R1),for the second five-year term effective December 1,2015 and expiring on November 30,2020,per the terms outlined in this Amendment. The lease rate for the storage space will be$7.05 per square foot for the second five-year term of the lease. On May 28,2015,the City of Fort Worth gave notice of its intent to renew the lease for this property. The Atrium Remains the Same,LLC is in agreement with the terms of this Amendment to include renewal of the 600 rentable square feet of storage space with the renewal of the office space previously agreed upon in the Second Renewal of Lease(City Secretary Contract No.35306-R2). Please have the two enclosed original documents signed by the appropriate party and return them to Jean Petr.City of Fort Worth,Property Manakrement. 900 Monroe Suite 404 Fort Worth Texas 76102 for execution and the assignment of a contract number in the Office of the City Secretary of Fort Worth. A fully executed copy will be returned to you for your files. The signatures below indicate each party's concurrence with these terms. Fort worth [SIGNATURES ON FOLLOWING PAGE] Viggo PROPERTY MANAGEMENT DEPARTMENT REAL PROPERTYDIy18loN THE Ory of FORT WORTH*om aAu l000 THROCILMORTON,MAILING:goo MONRQs STREET,SUITE 404"FORT WORTH, "66.IM-2ml TEW 76102 (817)392-9367 LESSEE: CITY OF FORT WORTH � Jesus J.Chapa, Assistant City Manager APPR ED AS TO FORM AND LEGALITY: Le D.Guzxnan, Assistant City Attorney City Secretary No.35306,35306-RI,35306-R2 OR M&C L-143I4 1�, ' TED: C&Aecretary LESSOR: THE ATRIUM E S +,LLC By. anager Fork Wodh PROPERTY MANAGEMENT DEPARTMENT 11111.r REAL PROPERTY DIVISION UECrrY or FoxT WORTx+0mCuL.1000 THRoCKhfoRTON;MAnaNG:900 MoNRogsTREET,sang 4o4*FoxTtiVORTH, IM-IM-2M Tgx4s 76102 (817)392-8367 FORTWORTH September 24, 2015 Theron Bryant, Principal The Atrium Remains the Same, LLC c/o Coldwell Banker Commercial Alliance 255 N. Center Street, Suite 200 Arlington, Texas 76011 Re: Second Renewal to Lease Agreement between the City of Fort Worth ("Lessee") and The Atrium Remains the Same,LLC("Lessor"), current owner for space at 8851 Camp Bowie West(City Secretary Contract No.35306,35306-111) Dear Mr, Bryant: This letter shall serve as notice that the City of Fort Worth would like to exercise the second option to renew the lease at 8851 Camp Bowie West with The Atrium Remains the Same, LLC, the entity which acquired the property from Hwy 80 Capital, L.P. on June 10,2013, D213148433, for the second five-year term effective December 1, 2015 and expiring on November 30, 2020,per the terms outlined in the Agreement. The lease rate effective on December 1, 2015 will be$14.56 per square foot for the second five- year term of the lease. On May 28, 2015, the City of.Fort Worth gave notice of its intent to renew the lease for this property. Our understanding is that The Atrium Remains the Same, LLC is in agreement with the proposed renewal. Please have the two enclosed original documents signed by the appropriate party and return them to Jean Petr, City of Fort Worth, Property Management, 900 Monroe,Fort Worth, Texas 76102, for execution and the assignment of a contract number in the Office of the City Secretary of Fort Worth. A fully executed copy will be returned to you for your files. The signatures below indicate each party's concurrence with these terms. [SIGNATURES ON FOLLOWING PAGE] Fort Worth Wffiftaft PROPERTY MANAGEMENT DEPARTMENT 1111II REAL PROPERTY DIVISION THE CITY OF FORT WORTH*OFFICIAL:1000 Tnkoa(MORTON;MAILING:900 MONROE STREET,SUITE 404*FORT WORTH, 1964•7991-2011 TERAS 76102 (817)392.8367 LESSEE: CITY OF FORT WORTH is J. Chapa, stant City Manager APPROVED AS TO FORM AND LEGALITY. I. r Lunn D. Guzman, Assistant City Attorney City Secretary No. 35306, 35306-RI M&C L-14314 p. p a 0 ATTESTS o Ix� '(Th o o°ate*�+ J. s r, i ecretary 00000000 Ay �a4r, x04�'�qcy LESSOR: THE ATRIUM REMAINS THE SAME,LLC By: Gary Earl Walker, Manager Fort Worth PROPERTY MANAGEMENT DEPARTMENT REAL PROPERTY DIVISION THE CITY OF FORT WORTH*OFFICIAL:1006 THROCR2zORTON,MAILING:900 MONROE STREET,SUITE 404"FORT WORTH, 1x64•"g 3•2011 TEXAS 76102 (817)392-8367 FORT WORT I-I low April 2012 Jack Clark Red Oak Realty 500 W Vh Street, Suite 1212 Fort Worth, TX 76102 Re: Revised Renewal of Lease Agreement between the City of Fort Worth("Tenant") and Hwy 80 Capital, L.P., a Texas limited partnership ("Landlord") for 600 sf on the 1St Floor and 16,141 sf of the 31d Floor at 8851 Camp Bowie West("Leased Premises") (as previously amended, the "Lease") (City Secretary Contract No. 35306) Dear Mr. Clark: This letter is to confirm our agreement as to the first renewal term of the Lease. The Lease term originally began on October 1, 2007 with a termination date of November 30, 2012. The Lease contemplates two additional renewal terms of five years each. Tenant would like to exercise the first option to renew the lease, and Landlord agrees to grant such extension, on the terms set forth in this letter agreement. The Lease contemplates a rental rate during the first renewal term of the then prevailing market rate for similar buildings in the market area. The parties agree that the rental rate for the first renewal term shall be$13.74/sf on an annual basis. This letter agreement is to document that the parties mutually agree to: • TERM AND RENT. Extend the term of the lease for a 36 month period (notwithstanding that this is shorter than the 60-month first renewal term contemplated in Section 4 of the Lease),being from December 1, 2012 until November 30, 2015, and that the rental rate during such 36-month renewal term will be $13.74/sf. The rental rate for the 600 sf of storage space on the first floor of the Building shall continue at the same rate as in effect during the initial term(i.e., $6.65 psf on an annual basis). The parties acknowledge and agree that the first renewal term is shorter than the 60-month first renewal term referenced in Section 4 of the Lease, and Tenant has waived its right to renew for any remaining portion of the 60-month first renewal term referenced in Section 4 of the Lease. Tenant shall continue to have the right to renew the Lease for the second renewal term(i.e., one successive five-year term)pursuant to the terms of Section 4 of the Lease. • JANITORIAL. Tenant shall have the one-time right to elect to contract directly for janitorial and cleaning services within the Leased Premises by delivering at least 30 days'prior written notice to Landlord. In such event, commencing as of the effective date in Tenant's notice(which effective date must be on the first day of a calendar month, and must be at least 30 days after the date Landlord receives such notice),the Lease shall be automatically amended to provide that(i)Tenant's base rental shall be$12.87/sf on an annual basis, (ii)Landlord shall not be required to provide cleaning and janitorial service to the Leased Premises, and (iii)Tenant shall be responsible for providing cleaning and janitorial service to the Leased Premises at least 5 days a week using a janitor, cleaning contractor or employee of Tenant at all time satisfactory to Landlord. • RVIPROVEMENTS TO PARKING AREA-Landlord, at Landlord's sole cost and expense, shall repair the damaged areas, apply a Seal Coat, restripe and add a gate to the fenced asphalt surface lot based on a mutually agreeable "plan"between the Tenant and Landlord. Landlord shall not be required to make any improvements to the Leased Premises and Tenant accepts the Leased Premises in its"AS-IS, WHERE-IS" condition. • EXPENSE STOP-The"expense stop"for operating expenses for the space shall in no event be less than the actual 2012 operating expenses. Tenant shall share proportionately(based on its rentable square footage against the total rentable square footage in the Building)in any increases in operating expenses for the Building over and above such amount. • TAX BASE YEAR-2012 • PARKING-During the term,Tenant shall be allotted surface parking space for the building at no charge. Tenant shall receive not less than one hundred&forty(140)surface parking spaces. The 140 spaces will be a combination of parking around the building and the secured fenced asphalt surface lot. • RIGHT OF FIRST REFUSAL. Effective as of December 1,2012,the definition of"Right of First Refusal Space"in Section 6 of the Lease shall be amended to include any available space on the first floor of the Building. • BROKERAGE-This proposal is contingent upon the negotiation of a direct deal between Tenant and Landlord's agent with no outside real estate broker involvement. • RATIFICATION-Tenant hereby ratifies and confirms its obligations under the Lease,and represents and warrants to Landlord that it has no defenses thereto. Additionally,Tenant further confirms and ratifies that, as of the date hereof, (i)the Lease is and remains in good standing and in full force and effect, (ii)Tenant has no claims, counterclaims, set-offs or defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant, and (iii) except as expressly provided for in this letter agreement, all tenant finish-work allowances provided to Tenant under the Lease or otherwise,if any, have been paid in full by Landlord to Tenant, and Landlord has no further obligations with respect thereto. The signatures below indicate each party's concurrence with these terms. This letter of agreement has the same authority as an amendment to the Lease, and will be recorded in the Office of the City Secretary of Fort Worth. By executing below, the Tenant represents to Landlord that all conditions to the effectiveness of this amendment have been satisfied, including,without limitation,City Council approval. CITY OF FORT WORTH Fernando Costa, Assistant City Manager APPROVED AS TO FORM AND LEGALITY: l�eann D. Guzman, Assistant City Attorney HWY 80 CAPITAL,L.P. By: TAG W*M. et, eneral partner By: Jas manager DALLAS_1\5832889v1 42799-45 04/02/2012 COMMENCEMENT NOTICE This Commencement Notice is entered into this 1st day of October, 2007 by HWY 80 CAPITAL, L.P., a Texas limited partnership ("Landlord"), and CITY OF FORT WORTH, ("Tenant"), pursuant to Lease Agreement dated May 17, 2007,by and between Landlord and Tenant, covering certain Premises known as Suite 115 and Suite 300 8851 Camp Bowie West Boulevard, Fort Worth, Texas 76107 Building known as Atrium Center Building). The Standard Lease Agreement,as supplemented by the Basic Lease Terms,and referred to in this notice as the"Lease". All capitalized terms shall have the meanings assigned in the Lease. 1. The Building, the Premises, and all other improvements required to be constructed and f irnished by Landlord in accordance with the terms of the Lease have been satisfactorily completed by Landlord, and accepted by Tenant,subject to the completion of punch list items. 2. The Premises has been delivered to,and accepted by,the Tenant. 3. The Commencement Date of the Lease is the 1st day of October 1,2007, The expiration date of the Lease Term,subject to earlier termination if provided in the Lease, is the 30th day of November,2012, 4. The Premises, Suite 115 only, consists of approximately 600 of Rentable Area on the 1st floor and Suite 300 only, consists of approximately 16,141 of Rentable Areas on the Yd floor of Atrium Center office building containing approximately 50,686 rentable square feet. 5. The Rental is as provided in the Lease. 6. Payments of Rental shall be made on the first day of each month in accordance with the terms and conditions of the Lease. Payments shall be made at the Manager's address shown in the Basic Lease Terms. 7. Tenant hereby ratifies and confirms its obligations under the Lease, and represents and warrants to Landlord that it has no defenses thereto. Additionally, Tenant fiurther confirms and ratifies that, as of the date hereof,(a)the Lease is and remains in good standing and in full force and effect,and(b)Tenant has no claims, counterclaims, set-offs or defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant. LANDLORD: HWY 80 CAPITAL,L.P., a Texas limited partnership By: TAG WFMG,L.L.C.,a Texas limited liability company, its general partner By: Name: Jame M. gl Title: Manager TENANT: CITY OF FORT WORTH 44, By: Name: Marc A. tt Title: Assistant City Manager APPROVED AS TO FOR ANDI L GA IrY: ASSISTA T C j:7-To _y GI T Y 8F-G-1ti'1.�`ARY LEASE AGREEMENT GOW11 CT N-0' �al �aw STATE OF TEXAS § COUNTY OF TARRANT § This lease agreement ("Lease") is made and entered into this, the first day of May 2007 the effective date hereof, at Fort Worth, Texas, by and between Hwy 80 Capital, L.P., a Texas limited partnership ("Lessor"), and the City of Fort Worth, a municipal corporation, acting by and through its duly authorized representative, Assistant City Manager, Marc A. Ott ("Lessee"). The term "Lessor" shall include the agents, representatives, and employees of Lessor. The term "Lessee" shall include the agents, representatives, and employees of Lessee. SECTION 1. Leased Premises. For and in consideration of the rental payments to be paid under this Lease, Lessor leases to Lessee and Lessee leases from Lessor: Approximately 16,141 rentable square feet of office space on the 3rd floor (the entire third floor) (Suite 300) and approximately 600 rentable square feet of storage space on the 1st floor of the office building located at 8851 Camp Bowie West, Fort Worth, Tarrant County, Texas, (the "Building") and associated parking lot (collectively referred to as the "Property") a more particular description of which is attached as "Exhibit A". This office space as described above together with any and all structures, improvements, fixtures and appurtenances thereon,thereunder or over, shall be referred to as the "Leased Premises" or the "Premises." The square footage of the leased premises shall be subject to review of final plans and measurement of the Premises by the Lessor in accordance with commonly accepted BOMA measurement standards. If such measurement results in a change in the rentable square footage of the Premises, the the base rent and pro rata share calculations used to determine excess operating expenses and the tenant finish allowance shall be adjusted accordingly. Lessee shall, within (15) days after the date of receipt of the Lessors's written request, execute and return a lease amendment and memorandum setting out the final, agreed upon rentable square footage of the Premises. The boundaries and location of the Leased Premises are described on the attached Exhibit A and made a part thereof. SECTION 2. Use of Premises. The Leased Premises shall be used primarily for administrative offices and equipment storage for the City of Fort Worth. The Leased Premises may not be used for any illegal activity, or any activity of a hazardous or high-risk nature that would endanger property or human safety. Lessee will take measures to guard against any condition at the Leased Premises of an illegal nature, or of a hazardous or high-risk nature that would endanger property or human safety. Lease Agreement Pagel of 26 SECTION 3. Term and Rent. The initial term of this Lease shall be for a period of sixty-two (62) months commencing on May 1, 2007 (the "Commencement Date"), and terminating on June 30, 2012, unless a prior termination is effected by either Lessor or Lessee under the termination provisions of this Lease. During the initial term, Lessee shall pay Lessor basic rent as follows: Months Basic Rate Per SF Monthiv Basic Rent Office Space: 1 -2 $ -0- Rent Abated 3-62 $15.50 $20,848.79 First Floor Storage Space. 1 — 62 $6.65 $332.50 The rental payment shall be made to the Lessor on the first day of each month during the term of the Lease and the first day of the month during any extension of the Lease. Rent for any partial calendar months shall be prorated on a per diem basis. Lessee may occupy the Leased Premises thirty (30) days prior to the Commencement Date for purposes of furniture installation and cabling provided that such early access to the Leased Premises shall be subject to the terms and conditions of this Lease excepting only those requiring the payment of basic rent and additional rent. SECTION 4. Renewal Option. Provided no event of default exists, Lessee shall have the right to renew this Lease for a maximum of two successive five-year terms by providing Lessor with written notice of such election not earlier than twelve (12) months nor later than six (6) months before the expiration of the initial Lease Term (or the Renewal Term, as applicable). The terms of the Lease shall continue to govern and control the relationship of the parties during the renewal periods. Basic rent for each of the renewal terms ("Proposed Renewal Terms") shall be at the then prevailing market rate for similar buildings in the market area (the "Prevailing Rental Rate"); provided, however, in no event shall the Prevailing Rental Rate exceed an amount that is six percent (6%) more than the then current Basic Rent rate per rentable square foot in effect hereunder. Within thirty (30) days after receipt of Lessee's notice to renew, Lessor shall deliver to Lessee written notice of the Proposed Renewal Terms and shall advise Lessee of the required adjustment to basic rent, if any. Lessee shall, within ten (10) days after receipt of Lessor's notice, notify Lessor in writing whether Lessee accepts or rejects Lessor's determination of the Prevailing Rental Rate used to determined the Proposed Renewal Terms. If Lessee accepts Lessor's proposal, then the base rent for the renewal term shall be the Proposed Renewal Terms. If Lessee rejects Lessor's determination of the Prevailing Rental Rate, or fails to timely notify Lessor in writing that Lessee accepts or rejects Lessor's determination of the Prevailing Rental Rate, time being of the essence with respect thereto, Lessee's rights to renew shall terminate and Lessee shall have no right to renew this Lease. SECTION 5. Expansion Option. Provided no event of default exists and subject to the rights of other tenants of the Building and the then existing availability of such space, Lease Agreement Page 2 of 26 Lessee shall have the right (the "Expansion Option") from the date this Lease is fully executed through twelve (12) months from the Commencement Date, to increase the size of the Leased Premises by leasing, up to an additional 20,000 square feet, any available space in the Building (the "Expansion Space") as mutually selected by Lessor and Lessee on the same terms and conditions as for the current Leased Premises hereunder (prorated for the applicable space and the remaining Term. Any tenant improvement allowance for the Expansion Space shall be the amortized value relative to the remaining Term. Upon exercise of the Expansion Option by Lessee and subject to the conditions set forth hereinabove, Lessor and Lessee shall enter into a written agreement modifying and supplementing the Lease in accordance with the provisions hereof. Any termination of the Lease shall terminate all expansion rights hereunder. The expansion rights of Lessee hereunder shall not be severable from the Lease, nor may such rights be assigned or otherwise conveyed in connection with any permitted assignment of the Lease. Lessor's consent to any assignment of the Lease shall not be construed as allowing an assignment of such rights to any assignee. SECTION.6. Right of First Refusal. In addition to its rights under the Expansion Option defined above, provided (a) that no Event of Default exists under any term or provision contained in the Lease and no condition exists which with the passage of time or the giving of notice or both would constitute an Event of Default pursuant to the Lease, (b) that Lessee has continuously occupied the Leased Premises for the Permitted Use during the Term, and (c) subject to the pre-existing rights of existing tenants in the Building and other prospective tenants, Lessee (but not any assignee or subtenant), shall have the right, subject to the terms and conditions set forth below, to lease any available space on the second floor (the "Right of First Refusal Space") before it is leased to any third party during the Term. Subject to the terms above, in the event any third party expresses interest in leasing all or any portion of the Right of First Refusal Space during the Term ("Third Parry Interest"), Lessor shall offer the entire Right of First Refusal Space to Lessee upon the same terms, covenants and conditions as provided in the Lease for the original Premises, given that the basic rent, the length of lease term, the base year, and the tenant improvement allowance (if any) shall be 1) the same terms as the Lease if exercised during the Expansion Option or 2) after the end of the Expansion Option term, the same as the terms included in a written bona fide third party offer for the Right of First Refusal Space which are acceptable to Lessor. Lessee shall accept the space "As-Is," (except for any tenant improvements contained in such bona fide third party offer) and Lessee shall have no further rights with respect to the Right of First Refusal Space. If Lessee notifies Lessor in writing of the acceptance of such offer within ten days after Lessor has delivered such offer to Lessee, Lessor and Lessee shall enter m o itten agreement modifying and supplementing the Lease and specifying that such Right of First Refusal Space accepted by Lessee is a part of the Premises demised pursuant to the Lease for the remainder of the Term and any renewal thereof, if applicable, and containing other appropriate terms and conditions relating to the addition of the Right of First Refusal Space to the Lease (including specifically any increase or adjustment of the rent as a result of such addition). In the event that Lessee does not notify Lessor in writing of its Lease Agreement Page 3 of 26 acceptance of such offer in such ten day period, or elects to not exercise Lessee's rights under this provision, the Lessor may lease the Right of First Refusal Space or any portion thereof to any third party upon the terms included in the bona fide third party offer initially presented to Lessee. Any termination of the Lease shall terminate all rights of Lessee with respect to the Right of First Refusal Space. The rights of Lessee with respect to the Right of First Refusal Space shall not be severable from the Lease, nor may such rights be assigned or otherwise conveyed in connection with any permitted assignment of the Lease. Lessor's consent to any assignment of the Lease shall not be construed as allowing an assignment or a conveyance of such rights to any assignee. Nothing herein contained should be construed so as to limit or abridge Lessor's ability to deal with the Right of First Refusal Space or to lease the Right of First Refusal Space to other Lessees on the terms set forth herein, Lessor's sole obligation being to offer, and if such offer is accepted, to deliver the Right of First Refusal Space to Lessee in accordance with this provision. Any acceptance of Right of First Refusal Space, Expansion Space or Renewals shall be subject to City Council approval. SECTION 7. Taxes Insurance Utilities Care of the Leased Premises and Buildin Operating Expenses,Maintenance and Service. Lessor agrees to be responsible for the payment of all electricity, natural gas, water, or other utility charges that come due and payable during the term Lessee occupies the Leased Premises. Lessee shall pay its pro rata share of,4n-increase in taxes, insurance, utilities, (which shall include water, sewer, trash, electricity and gas) and Operating Expenses (hereinafter defined) above the 2007 base�ar,`Tenant's pro rata share shall be 33.03% based or,the rentable square footage of the Building ("Approximately Rental Area of the Building") which determined by Lessor to be approximately 16,741 square feet. Lessor may make a good faith estimate of the additional rent to be due by Lessee for any calendar year or part thereof during the Term. During each calendar year or partial calendar year of the Term (after the base year), Lessee shall pay to Lessor, in advance concurrently with each monthly installment of basic rent, an amount equal to the estimated additional rent for such calendar year or part thereof divided by the number of months therein. As used herein,the term "Operating Expenses" shall mean all direct and indirect costs, expenses paid and disbursements of every kind (subject to limitations set forth below) with Lessor incurs, pays or becomes obligated to pay in each calendar year in connection with operating, maintaining, repairing, owning and managing the Building and the Property including,but not limited to,the following: (1) All labor costs for all persons performing services required or utilized in connection with the operation, repair, replacement and maintenance of and control of access to the Building and the Property, including but not limited to amounts incurred for wages, salaries and other compensation for services, professional training, payroll, social security, unemployment and other similar taxes, workers' compensation insurance, uniforms, training, disability benefits, Lease Agreement Page 4 of 26 pensions, hospitalization, retirement plans, group insurance or any other similar or like expenses or benefits. (2) All management fees, the cost of equipping and maintaining a management office at the Building, accounting services, legal fees not attributable to leasing and collection activity, and all other administrative costs relating to the Building and the Property. (3) All Rent and/or purchase costs of materials, supplies, tools and equipment used in the operation, repair, replacement, and maintenance and the control of access to the Building and the Property. (4) All amounts charged to Lessor by contractors and/or suppliers for services, replacement parts, components, materials, equipment and supplies furnished in connection with the operation, repair, maintenance, replacement and control of access to any part of the Building, or the Property generally, including the heating, air conditioning, ventilating, plumbing, electrical, elevator and other systems and equipment of the Building and the garage. At Lessor's option, major repair items may be amortized over a period of up to five(5)years. (5) All premiums and deductibles paid by Lessor for fire, flood and extended insurance coverage, earthquake and extended coverage insurance, liability and extended coverage insurance, rent loss insurance, elevator insurance, boiler insurance and other insurance customarily carried from time to time by lessors of comparable office buildings or required to be carried by Lessor's mortgagee. (6) Charges for all utilities, including but not limited to electricity,water, electricity, gas and sewer. (7) "Taxes," which for purposes hereof, shall mean (a) all real estate taxes and assessments on the Property, the Building, the Complex or the Premises, and taxes and assessments levied in substitution or supplementation in whole or in part of such taxes, (b) all personal property taxes for the Building's personal property, including 'License expenses, (c) all taxes imposed on services of Lessor's agents and employees, (d) all sales, use or other tax, excluding state and/or federal income tax now or hereafter imposed by any governmental authority upon rent received by Lessor, (e) all other taxes, fees or assessments now or hereafter levied by any governmental authority on the Property, the Building or its contents or on the operation and use thereof(except as relate to specific tenants), and (f) all costs and fees incurred in connection with seeking reductions on or refunds in Taxes including, without limitation, any costs incurred by Lessor to challenge the tax valuation of the Building or the Property, but excluding income taxes. Estimates of real estate taxes and assessments for any calendar year during the Lease Term shall be determined based on Lessor's good faith estimate of the real estate taxes and assessments. Taxes and assessments hereunder are those accrued with respect to such calendar year, as opposed to the real estate taxes and assessments paid or payable for such calendar year. (S) All landscape expenses and costs of repairing, resurfacing and striping of the parking areas and garages of the Property, if any. (9) Cost of all maintenance service agreements, including those for equipment, alarm service, window cleaning, drapery or mini-blind cleaning, janitorial Lease Agreement Page 5 of 26 services, metal refinishing, pest control, uniform supply, landscaping and any parking equipment. (10) Cost of all other repairs, replacements and general maintenance of the Property and Building neither specified above nor directly billed to Lessees, including the cost of maintaining all interior Common Areas including lobbies, multi-tenant hallways, restrooms and service areas. (11) The amortized cost of capital improvements made to the Building or the Property with are (a) primarily for the purpose of reducing operating expense costs or otherwise improving the operating efficiency of the Property or Building; or (b) required to comply with any laws, rules or regulations of any governmental authority or a requirement of Lessor's insurance carrier. The cost of such capital improvements shall be amortized over a period of five (5) years, or longer (at Lessor's option), and shall, at Lessor's option, include interest at a rate that is reasonably equivalent to the interest rate that Lessor would be required to pay to finance the cost of the capital improvement in question as of the date such capital improvement is performed, provided if the payback period for any capital improvement is less than five (5) years, Lessor may amortize the cost of such capital improvement over the payback period. (12) Any other chance of any nature whatsoever which, in accordance with general industry practice with respect to the operation of a first class office building, would be construed as an operating expense. Operating Expenses shall not include repairs and general maintenance paid from proceeds of insurance or by a tenanfor other third parties, and alterations attributable solely to individual tenants of the Property. Further, Operating Costs shall not include the cost of capital improvements (except as above set forth), depreciation, interest (except as provided above with respect to the amortization of capital improvement), lease commissions, and principal payments on mortgage and other non-operating debts of Lessor. Capital improvements are more specifically defined as: (1) Costs incurred in connection with the original construction of the Property or with any major changes to same, including but not limited to, additions or deletions of corridor extensions, renovations and improvements of the Common Areas beyond the costs caused by normal wear and tear, and upgrades or replacement of major property systems; and - (2) Costs of correcting defects (including latent defects), including any allowances for same, in the construction of the Property or its related facilities; and (3) Costs incurred in renovating or otherwise improving, designing, redesigning, decorating or redecorating space for tenants or other occupants of the Property or other space leased or held for lease in the Property. If the Building is not at least ninety-five percent (95%) occupied during any calendar year of the Lease term or if Lessor is not supplying services to at least ninety-five percent (95%) of the Approximate Rentable Area of the Building at any time during any calendar year of the lease Term, actual Operating Costs for purposes hereof, shall be determined as if the Building had been ninety-five percent (95%) occupied and Lease Agreement Page 6 of 26 Lessor had been supplying services to ninety-five percent (95%) of the Approximate Rentable Area of the Building during the entire year. Any necessary extrapolation of Operating Costs that are affected by changes in the occupancy of the Building and such other buildings (including, at Lessor's option, Taxes)to the cost that would have been incurred if the Building and such other buildings had been ninety-five percent (95%) occupied and Lessor had been supplying services to ninety-five percent (95%) of the Approximate Rentable Area of the Building. Within a reasonable time after the end of each calendar year, Lessor will notify Lessee of the actual costs of the applicable expenses (those that Lessee is to pay under this addendum) for the previous year. If the actual costs of the applicable expenses exceed amounts paid or owed by Lessee for the previous year, Lessee must pay the deficient amount to Lessor within thirty days after Lessor notifies Lessee of the deficient amount. if the actual costs of the applicable expenses are less than the amounts paid by Lessee for the previous year, Lessor will refund the excess to Lessee or will credit the excess to Lessee's next rent payment. Lessee may audit or examine those items in Lessor's records that relate to Lessee's obligations under this addendum. Lessor will promptly refund to Lessee any overpayment revealed by an audit or examination. if the audit or examination reveals an error of more than 5% over the amounts Lessor collected in a calendar year from Lessee under this addendum, Lessor will pay the reasonable cost of the audit or examination, Lessor may not seek a deficiency from Lessee under this paragraph if Lessor fails to timely provide the required notice. Notwithstanding the foregoing, for purposes of computing Lessee's Pro Rata Share of Operating Expenses, and provided Tenant is not then in default beyond any applicable notice and cure periods, thej7eratin lable perating Expenses (hereinafter defined) shall not increase by more pe calendar year. "Controllable Operating Expenses" shall mean all xpenses exclusive of the cost of Taxes, insurance utilities., - Lessor agrees to pay all taxes and insurance as they come due. Lessor shallkeep the Leased Premises in good,clean habitable condition,normal wear and tear expected. Lease Agreement Page 7 of 26 SECTION 8. Services Furnished by Lessor. A. Lessor agrees to furnish Lessee the following services (provided that nothing shall limit or modify the parties' respective obligations under the attached Work Letter and all such work must be completed before any of these services are required to be provided (1) The hot and cold water for the common areas will be provided and maintained by landlord. If Lessee desires additional hot water in the Leased Premises for any approved reason including a Private lavatory or kitchen; cold water shall be supplied by the Lessor. The Lessee shall be responsible for water lines and fixtures installed at Lessee's sole cost and expense with the prior reasonable consent of Landlord. If Lessee desires hot water in the Leased Premises, Lessee, at its sole cost and expense and subject to the prior reasonable consent of Lessor, may install a hot water heater in the Leased Premises. Lessee shall be solely responsible for the maintenance and repair of any such water heater. (2) Central heat and air conditioning in season during normal business hours at such temperatures and in such amounts and are considered by Lessor, in its reasonable judgment, to be standard for buildings of similar class size age and location or as required by govermuental authority. (3) Maintenance and repair of all common areas in the manner and extent reasonably deemed by Lessor to be standard for buildings of similar class age and location. (4) Janitorial and cleaning service in and about the Premises on business dam provided, however, if Lessee's floor covering or other improvements require special treatment, Lessee shall pay the additional cleaning cost attributable thereto as Additional Rent upon presentation of a statement therefore by Lessor. Lessee shall not provide or use any other janitorial or cleaning services without Lessor's consent and then only subject to the supervision of Lessor and at Lessee's sole cost and responsibility and by a janitor,cleaning contractor or employees at all times satisfactory to Lessor (5) Electricity to the Premises for general office use (6) Florescent bulb replacement in the Premises necessary to maintain building standard lighting as established by Lessor and fluorescent and incandescent bulb replacement in the common areas and service areas (7) Passenger elevator service in common with Lessor and other persons during normal business hours and freight elevator service in common with the Lessee and other Persons during normal business hours Such normal elevator service, for visiting customers and/or visiting_passengers or freight, if furnished at other times shall be optional with Lessor and shall never be deemed a continuing obligation Lessor however, shall provide passenger elevator service daily at all times to Lessee and employees of the Lessee by a designated code to be given to Lessee by lessor, when normal visiting customer and/or visiting passenger elevator service is not provided during after hours. Lease Agreement Page 8 of 26 (8) Access control to the Building during other than normal business hours shall be provided in such form as Lessor deems appropriate Lessee shall cooperate fully in Lessor's efforts to maintain access control to the Building and shall follow all regulations promulgated by Lessor with respect thereto Notwithstanding an herein to the contrary Lessee expressly acknowledges and agreed that Lessor is not warranting the efficacy of any access personnel, service procedures or equipment and that Lessee is not relying and shall not hereafter rely on any such personnel services procedures or equipment. Lessor shall not be responsible or liable in_any manner for failure of any access personnel, services procedures or equipment to prevent, control or apprehend anyonesuspected of causing personal iniury or damage in,on or around the Property B. Except as otherwise expressly provided 'herein the failure by Lessor to any extent to furnish, or the interruption or termination of these defined services in whole or in part resulting from adherence to laws regulations and administrative orders wear, use repairs, improvements alterations or any causes beyond the reasonable control of Lessor shall not render Lessor liable in any respect nor be construed as a constructive eviction of Lessee, nor give rise to an abatement of Rent, nor relieve Lessee from the obligation to fulfill any covenant or agreement hereof. Should any of theequipment or machinery used in the provision of such services for any cause cease to function properly, Lessor shall use reasonable diligence to repair such equipment or machinery SECTION 9. Improvements,Repairs,Replacements,Additions and Removals. Lessor, in accordance with Section 4 of the Lease, shall maintain in good repair the roof, foundation, exterior walls, heating air conditioning, electrical, plumbing and interior painting or other treatment of interior walls of the common areas of the Building. Lessee agrees to give Lessor written notice of defects or need for repairs in the roof, foundation, exterior walls,heating, air conditioning, electrical, and plumbing of the Leased Premises. Lessee will provide such written notification as soon as it discovers repairs are necessary and Lessor shall complete or have completed the repairs or maintenance within ten(10)days of receiving such notification(or if repair is not capable of being completed within ten (10) days, within a reasonable time thereafter, so long as Lessor is diligently pursuing such repair). Failure of the Lessor to complete such repairs or maintenance shall be considered a default under the Lease. Lessor and Lessee agree to abide by the work letter(attached hereto as exhibit D) relating to improvements,repairs, finish-outs,additions and removals. SECTION 10. Insurance. Lessor agrees to insure the structure and premises of the Building. Such insurance shall provide protection for liability, fire and casualty, and property damage for the property owned by the Lessor, situated at, and including, the Leased Premises. Verification of this coverage shall be provided to Lessee prior to the execution of this contract. Lessee assumes no liability or financial obligation for the Lease Agreement Page 9 of 26 acquisition or maintenance of such insurance; all costs incurred during the course of insuring the premises shall be borne solely by the Lessor. SECTION 11. Liability and Hold Harmless. LESSOR COVENANTS AND AGREES TO RELEASE, INDEMNIFY, HOLD HARMLESS AND DEFEND LESSEE, ITS OFFICERS, AGENTS, SERVANTS, AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR PROPERTY DAMAGE, PERSONAL INJURY, OR ANY OTHER TYPE OF LOSS OR ADVERSE CONSEQUENCE RELATED IN ANY WAY TO THE USE OF THE COMMON AREAS OF THE BUILDING, REGARDLESS OF WHETHER THE ACT OR OMISSION COMPLAINED OF RESULTS FROM THE ALLEGED NEGLIGENCE OR ANY OTHER ACT OR OMISSION (BUT EXPRESSLY EXCLUDING THE SOLE OR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF LESSOR,LESSEE, OR ANY THIRD PARTY. LESSOR SHALL LIKEWISE RELEASE, INDEMNIFY, HOLD HARMLESS AND DEFEND LESSEE FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS RELATED IN ANY WAY TO ANY DAMAGE TO, OR DEFECTS IN, THE LEASED PREMISES OR ANY OTHER ADVERSE CONSEQUENCES RELATED TO THE LEASED PREMISES, REGARDLESS OF WHETHER THE ACT OR OMISSION COMPLAINED OR RESULTS FROM THE ALLEGED NEGLIGENCE OR ANY OTHER ACT OR OMISSION (BUT EXPRESSLY EXCLUDING THE SOLE OR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF LESSOR, LESSEE, OR ANY THIRD PARTY.TO THE EXTENT PERMITTED BY LAW, LESSEE SHALL INDEMNIFY, PROTECT,DEFEND AND HOLD HARMLESS LESSOR AND ITS AFFILIATED COMPANIES, PARTNERS, SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS (COLLECTIVELY, "INDEMNITEES'') FOR, FROM AND AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, LIENS, COSTS, FINES, PENALTIES, CAUSES OF ACTION, SUITS, JUDGMENTS AND EXPENSE (INCLUDING COURT COSTS, ATTORNEY'S FEES, AND COSTS OF INVESTIGATION) OF ANY HIND FOR BODILY OR PERSONAL INJURY (INCLUDING DEATH) OR PROPERTY DAMAGE OCCURRING ON, IN OR ABOUT THE LEASED PREMISES (COLLECTIVELY, "LIABILITIES") OR IN ANY MANNER ARISING OUT OF OR CONNECTED WITH LESSEE'S USE AND OCCUPANCY OF THE LEASED PREMISES. NOTHING CONTAINED HEREIN SHALL EVER BE CONSTRUED SO AS TO REQUIRE LESSEE TO ASSESS, LEVY AND COLLECT ANY TAX TO FUND ITS OBLIGATIONS UNDER THIS LEASE. SECTION 12: Defaults and Remedies. 12.1 Lessee Defaults. The occurrence of any of the following shall constitute a default under this Lease: (a) Lessee's failure to pay rent or to make any other payment Lease Agreement Page I0 of 26 required to be made by Lessee hereunder when due within ten(10) days after Lessee's receipt of written notice of nonpayment from Lessor,provided, however, that Lessee is entitled to only two such notices per calendar year. After second notice Lessee shall be in default if any payment is not made when due. (b) Abandonment or vacation of the Leased Premises by Lessee, for any purpose except remodeling or restoration. (c) Lessee's failure to observe or perform any other provision of this Lease to be observed or performed by Lessee, where such failure continues for thirty (30) days after written notice thereof by Lessor to Lessee; provided, however, that if the nature of such failure cannot reasonably be cured within such thirty (30) day period, Lessee shall not be deemed to be in default if Lessee shall within such period commence such cure and thereafter diligently prosecute the same to completion. 12.2 Remedies for Lessee Defaults. In the event of any default by Lessee, then, in addition to any other remedies available to Lessor at law or in equity (all of which rights and remedies shall be cumulative with the exercises of one or more rights or remedies not to impair Lessor's rights to exercise any other right or remedy, and all of which may be exercised with or without legal process as then may be provided or permitted by the laws of the State of Texas),Lessor shall have the following remedies: (a) Lessor may terminate this Lease and all rights of Lessee by giving written notice to Lessee of such election. If Lessor elects so to terminate the Lease, Lessor may recover from Lessee: (i)the worth at the time of award of any unpaid rent and any other indebtedness (ii) the amount of the amortized tenant improvement work which has not been paid. As used in (i) and (ii) above, the "worth at the time of award" is computed by allowing interest at the highest rate allowed to be charged by nonexempt lenders on other than consumer loans under Texas usury laws. (b) In addition to the rights set forth above, Lessor may also alter locks and/or security devices at the Leased Premises following notice of termination of the Lease. 1. Nothing in this Section S shall be deemed to affect Lessor's right to indemnification for liability or liabilities arising prior to termination of this Lease for personal injury or property damage under the indemnification clause or clauses contained in the Lease. Lease Agreement Page 11 of 26 2. Notice of Termination. If Lessee fails to cure any default within the time periods set forth in Section 8.1 above. Lessor may terminate this lease upon written notice to the Lessee. Termination shall be effective 5 days after Lessee received such notice. 12.3 Lessor Default. In the event of any default by Lessor, Lessee shall give Lessor written notice specifying the default with particularity, and Lessor shall thereupon have thirty (30) days (plus an additional reasonable period as may be required in the exercise by Lessor of due diligence) in which to cure any such default. If Lessor fails to so cure any default after the notice, Lessee may terminate this Lease upon written notice to Lessor, such termination to be effective within thirty (30) days after Lessor's receipt of such notice. All obligations of Lessor under this Lease are covenants,not conditions, and all obligations of Lessor are binding upon Lessor only during the period of its ownership of the Leased Premises and not thereafter. Lessor's liability for the performance of any Lessor obligations under this Lease is limited to Lessor's interest in the Leased Premises. The owner of the Leased Premises at the date of commencement of the term will be released from all obligations of the Lessor accruing after any transfer of the Leased Premises to a subsequent owner, and the covenants and obligations of Lessor are binding during the term upon each new owner for the duration of such owner's ownership. SECTION 13. Fixtures. Lessor herein agrees that no property or equipment, owned or installed by Lessee, or any representative of Lessee, shall, under any circumstances, become a fixture, and that Lessee shall reserve the right to remove any and all such property or equipment at any time during the term of this Lease, or subsequent to its termination by either party. Lessor further agrees that he/she will, at no time, hold or retain, any property owned or installed by Lessee, for any reason whatsoever. SECTION 14. Termination and Rijzht of Inspection. 14.01. If Lessee elects to terminate the Lease because of any alleged default or breach by Lessor of any Lease provisions, Lessee shall be required to give Lessor immediate notice in writing of that intention stating specifically the reasons therefore and allowing Lessor thirty (30) calendar days after the date of Lessor's receipt of the notice to cure any or all default(s) or breach(es) specified in the notice. If the specified defaults or breach(es) of Lessor are not cured to the satisfaction of Lessee's Administrator of Real Property Services, the Lease will be terminated. Termination pursuant to Lessor's default shall be without further penalty of expense to either party. 14.02. Funding, Non-Appropriation and Termination. This Lease shall terminate in the event that the governing body of Lessee shall fail to appropriate sufficient funds to satisfy any obligation of Lessee hereunder. Termination shall be effective as of the last day of the fiscal period for which sufficient funds were appropriated or upon expenditure of all appropriated funds, whichever comes first. Termination pursuant to this non- appropriation clause shall be without further penalty or expense to either party. Lessee Lease Agreement Page 12 of 26 shall use reasonable efforts to provide Lessor with prior written notice of the failure to appropriate sufficient funds to satisfy any obligation of Lessee hereunder at least 60 days prior to the date of termination pursuant to this Section 14.02. Lessor reserves the right to enter upon the Premises at all reasonable times for the purpose of inspecting the Leased Premises, provided that such entry does not conflict with Lessee's rights hereunder. SECTION 15. Surrender of Leased Premises. Upon the termination of this Lease for any reason whatsoever, Lessee shall surrender possession of the Leased Premises in the same condition as the Leased Premises were in upon delivery of possession under the Lease, reasonable wear and tear accepted. Lessee also shall surrender all keys for the Leased Premises to Lessor at the place then fined for the payment for rent and shall inform Lessor of all combinations on locks, safes, and vaults, if any, on the Leased Premises. Lessee shall remove all its furniture and equipment on or before the termination of the Lease; and Lessee shall be responsible for repairing any damages to the Leased Premises caused by the removal of furniture and equipment. SECTION 16. Governmental Regulations. Lessee agrees to comply fully with all applicable Federal, state and municipal laws, statues, ordinances, codes, or regulations in connection with use of the Leased Premises. Provided,however, Lessor(i)shall make all improvements necessary to make the common areas of the Leased Premises including the restrooms comply with the Americans With Disabilities Act of 1990 ("ADA"), 42 U.S.C. § 1201 et seq., shall fully indemnify and hold harmless Lessee from and against any and all claims, losses, damages, suits, and liability of every kind, including all expenses of litigation, arising out of or in connection with the Building's compliance, or lack of compliance, with ADA, and (ii) shall make all improvements necessary to correct and/or abate all environmental hazards of the Building and the"Leased Premises. SECTION 17. Acceptance of Leased Premised. Lessee represents that it takes the Leased Premises in good condition and that the Leased Premises are suitable for the purposes for which they are being leased. SECTION 18. Assignment. Lessee may assign or sublease the Premises to another citv department for administrative office use upon written notification to Lessor. Lessee shall not assign or sublet this Lease to a third party without the prior written approval of Lessor, which shall not be unreasonably withheld or delayed. Upon issuance of such approval, this Lease shall be binding on the successors, and lawful assignees of Lessor and the successors of Lessee, as permitted by the terms of this agreement and by the laws assignment or sublease shall be subject to all the responsibilities and liabilities of Lessee and shall be subject to all provisions regarding termination and eviction. SECTION 19. Subordination to Mortgages; Estoppel Certificate. Lessee accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now affecting the Premises, the Building or the Property, and to renewals, modifications, refinancings and extensions thereof and if, but only if, each holder of any Lease Agreement Page 13 of 26 mortgage, deed of trust, ground lease or other lien subsequently affecting the Premises, the Building or the Property has executed and delivered to Lessee a Subordination, Non- Disturbance Attornment Agreement (hereinafter defined as "SNDA"), then to any mortgage(s), deed(s) of trust, ground lease(s) and other lien(s) subsequently affecting the Premises, the Building or the Property, and to renewals, modifications, refinancings and extension thereof (collectively, a "Mortgage"). The party having the benefit of a Mortgage shall be referred to as a "Mortgagee." This clause shall be self-operative, but upon request from a Mortgagee, Lessee shall execute a commercially reasonable SNDA in favor of the Mortgagee. In lieu of having the Mortgagee be superior to the Lease, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. If requested by a successor-in-trust to all or part of Lessor's interest in this Lease, Lessee shall, without charge attorn to the successor-in-interest if, but only if, such successor-in- interest has executed a SNDA or other agreement whereby such successor in interest has agreed not to disturb or interfere with Lessee's possession of the Premises (subject to the terms and conditions of this Lease) for so long as Lessee is not in default under this Lease beyond any applicable notice and cure period. Prior to permitting a Mortgage to obtain a Mortgage on the Property, Lessor will use commercially reasonable efforts to cause such Mortgagee to execute a SNDA in form and substance reasonably satisfactory to Lessor, Lessee and the Mortgagee. The SNDA, among other things, shall provide that in the event a Mortgagee forecloses on the Property or otherwise enforces its right to divest Lessor of its fee simple interest in the Property, then such Mortgagee will not disturb Lessee's use and enjoyment of the Premises for so long as Lessee is not in default under this Lease beyond any applicable notice and cure period. From time to time at the request of either party, each party to this Lease agrees to promptly execute, have acknowledged and deliver a certificate stating(a)the commencement date and the date of expiration of the Term; (b) the rights (if any) of Lessee to extend the Term or to expand the Leased Premises; (c) the Rent(or any components of the Rent)then currently payable hereunder; (d) whether this Lease has been amended in any respect and if so submitting copies of or otherwise identifying the amendments; (e) whether, within its knowledge, there are any existing breaches or defaults hereunder by either party hereto, and, if so, stating the defaults with reasonable particularity; and (f) such other information pertaining to this Lease as may be reasonably requested. A party's failure to deliver to the other party an executed estoppel certificate within ten(10) days after the failing party first received a written request for such certificate shall constitute a representation by the failing party that all statements set forth in the requested estoppel certificate are true and correct. SECTION 20. Notices. All notices to Lessor shall be sent to: Hwy 80 Capital, L.P. c/o Red Oak Realty, LLC 500 West 7t' Street, Suite 1212 Unit 44 Fort Worth, Texas 76102 Attention: James M. Eagle Lease Agreement Page 14 of 26 All notices to Lessee shall be sent to: Manager,Real Property Services 1000 Throckmorton Fort Worth,Texas 76102 As well as to: Administrator,Real Property Services City of Fort Worth 900 Monroe Street, Suite 302 Fort Worth,Texas 76102 Mailing of all notices under the Lease shall be deemed sufficient if mailed certified, return receipt requested and addressed as specified herein to the other party's address. All time periods related to any notice requirements specified in the Lease shall commence upon the terms specified in the section requiring the notice. SECTION 21. Entire Agreement. This Lease shall constitute the entire agreement of the Lessor and Lessee, and shall supersede any prior agreements, either oral or written, pertaining to the Leased Premises. SECTION 22. Waivers. One or more waivers of any covenant, term, or condition of the Lease by either Lessor or Lessee shall not be construed as a waiver of subsequent breach of the same covenant, term, or condition. The consent or approval by either Lessor or Lessee to or of any act by the other party requiring such consent or approval shall not be deemed a waiver or render unnecessary consent to or approval of any subsequent similar act. SECTION 23. Venue. This Lease and the relationship created hereby shall be governed by the laws of the State of Texas. Venue for any action brought to interpret or enforce the terms of the Lease or any breach shall be in Tarrant County, Texas. SECTION 24. Rules and Regulations. Lessee shall abide by the Building Rules and Regulations attached hereto as Exhibit B. SECTION 25. Parldng. During the herein defined Term and any Renewal Terms, Lessee shall be allotted, on a first come first serve basis, standard surface parking spaces for the Building at no additional charge. Lessee shall receive not less than forty (40) parking spaces on the surface lot of the Building. In addition, Lessee shall receive sixty (60) secured spaces on a secured fenced asphalt surface lot to be provided at Lessor's expense. Lessee shall repair or replace, subject to Lessor's direction and supervision, any damage to the parking lots caused by Lessee. If Lessee fails to make such repairs or replacements within 15 days after the occurrence of such damage,then Lessor may make the same at Lessee's cost. Lease Agreement Page 15 of 26 SECTION 26. Signage. Lessor shall provide and install, at Lessee's cost, all letters or numerals on the exterior of the Premises; all such letters and numerals shall be in the standard graphics for the Building and no others shall be used or permitted on the Premises without Lessor's prior written consent. In addition, Lessor will list Lessee's name in the Building's directory, if any, located in the lobby of the Building and will at Lessor's expense install signage on one panel of'the existing monument sign on the north side of the Building subject to Lessor's reasonable approval and subject to compliance with all applicable laws. City logo must comply with City's policies for us of such logo. SECTION 27. Contingencies. This Lease is subject to approval by the Fort Worth City Council. SECTION 28. Brokerage Commissions. Neither Lessor nor Lessee has dealt with any broker or agent in connection with the negotiation or execution of this Lease, other than NAI Huff Partners and Red Oak Realty, LLC, whose commissions shall be paid by Landlord pursuant to separate written agreements. To the extent permitted by law, Lessee and Lessor shall each indemnify the other against all costs. expenses, attorneys' fees, liens and other liability for commissions or other compensation claimed by any broker or agent claiming the same by,through, or under the indemnifying party. SECTION 29. Casualty Loss. A. Lessee must immediately notify Lessor of any casualty loss in the Building or the Leased Premises. Within 20 days after receipt of Lessee's notice of a casualty loss, Lessor will notify Lessee if the Building or the Leased Premises are less than or more than 50% unusable, on a per square foot basis, and if Lessor can substantially restore the Leased Premises and the Building within 120 days after Lessee notifies Lessor of the casualty loss. B. If the Leased Premises are less than 50% unusable and Lessor can substantially restore the Leased Premises and any damage the Building affecting Lessee's ability to use the Leased Premises within 120 days after Lessee notifies Lessor of the casualty, Lessor will restore the Building and Leased Premises to substantially the same condition as before the casualty. If Landlord fails to substantially restore within the time required, Lessee may terminate this lease. C. If the Leased Premises are more than 50% unusable and Lessor can substantially restore the Leased Premises within 120 days after Lessee notifies Lessor of the casualty, Lessor may: (1) terminate his lease or (2) restore the Leased Premises and any damage to the Building affecting the Lessee's ability to use the Leased Premises to substantially the same condition as before the casualty. If Lessor chooses to restore and does not substantially restore the Leased Premises and the applicable portion of the Building within the time required, Tenant may terminate this lease. Lease Agreement Page 16 of 26 D. If Lessor notifies Lessee that Lessor cannot substantially restore the Leased Premises and any damage to the Building affecting the Lessee's ability to use the Leased Premises within 120 days after Lessee notifies Lessor of the casualty loss, Lessor may: (1) choose not to restore and terminate this lease; or (2) choose to restore, notify Lessee of the estimated time to restore, and give Lessee the option to terminate this lease by notifying Lessor within 10 days. E. If this lease does not terminate because of a casualty loss, rent will be reduced from the date Lessee notifies Lessor of the casualty loss to the date the Leased Premises are substantially restored by an amount proportionate to the extent the Leased Premises are unusable. Attachments and Exhibits. Exhibit A—Description of the Premises Exhibit B—Building Rules and Regulations Exhibit C—Parking Plan Exhibit D—Work Letter Lease Agreement Page 17 of 26 SIGNED this-&day of , 2007. LESSOR: Hwy 80 Capital, L.P. LESSEE: City of F Worth By: TAG WFMG, LLC, Its eneral partner By: By_ idNoagle' its manager Marc A. Ott Assistant City Manager ATTEST: �� aA- A Marty Hendrix City Secretary APPROVED AS TO FORM AND LEGALITY: City Attorney, or His Designee M& C Number: -i 49t 1 07 Contract Number: l.Q Lease Agreement Page 18 of 26 STATE OF TEXAS § COUNTY OF TARRANT § BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on this day personally appeared Marc A. Ott, known to be the same person whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the City of Fort Worth and that he/she executed the same as the act of said City of Fort Worth for the purpose and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this ? day of 2007. Al ' _ Notarypublic in and for the tate of Texas _ y HETTIE LANE k PAY covNIISSION EXP ; L� July 26 9067 Lease Agreement Page 19 of 26 STATE OF TEXAS § COUNTY OF TARRANT § BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on this day personally appeared James M. Eagle, known to be the same person whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the manager of TAG WFMG, LLC, general partner of Hwy 80 Capital, L.P. and that he/she executed the same as the act of said limited liability company and limited partnership for the purpose and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this � day of 2007. JOAN ELISABETH REATH o.•. 44 ��. ^t Notary public,State of Texas �� , My commission Expires ;i August 19,2009 Not ublic in and for the State of Texas Lease Agreement Page 20 of 26 EXHIBIT A Description of the Premises The Premises includes the entire 3rd floor of the Building and approximately 600 SF on the 1"floor at indicated on the floor plans attached. Lease Agreement Page 21 of 26 a � lb ®o® � a s 0 ®® �a g aw »d• � w S h 88` ® y ®y d lb p a e161 n !@mug 0 'nnn 'ma i 1� a ID N OI 3 000 M o = S � � ass o O -U o Ro z - = Y 2 S S ® U• Q- Q ee� Y z G y 1 K a a ®�9 u a c m b a� E Exhibit A Page 21(i)of(ii) I r` O r- N Gy yam. o a � O ' 4 L� (c..4.L- k (n(n (n(n to s b F)Q) d•N N N co '•'3 aT d' N in to 0,(O Qf Cd CV L En p W Q Wp CE UJ Q Q a Q QUO ZO oQof- U o LLJ J m (nU<am (n I--F-- Q daZ w < No V \.a\ � o s LL MIN LL ry CN m I V Exhibit A Page 21(ii)of(ii) I EXIMIT B Building Rules and Regulations Lease Agreement Page 22 of 26 EXHIBIT"B" ATRIUM CENTER RULES AND REGULATIONS The following Rules and Regulations shall apply to the Premises, the Building, Common Areas, the Parking Lot associated therewith,the Land and the appurtenances thereto: 1. Sidewalks, doorways, vestibules, halls, stairways, and other similar areas shall not be obstructed by tenants or used by any tenant for purposes other than ingress and egress to and from their respective leased Premises and for going from one to another part of the Building. 2. Plumbing, fixtures and appliances shall be used only for the purposes for which designed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or deposited therein. Damage resulting to any such fixtures or appliances from misuse by a tenant or its agents, employees or invitees, shall be paid by such tenant. 3.No signs, advertisements or notices shall be painted or affixed on or to any windows or doors or other part of the Building without the prior written consent of Landlord. No nails, hooks or screws shall be driven or inserted in any part of the Building except by building maintenance personnel. No curtains or other window treatments shall be placed between the glass and the Building Standard window treatments. 4. Landlord shall provide and maintain an alphabetical directory for all tenants in the main lobby of the building. Tenant shall receive one listing at no cost. Additional listings (subject to availability will be provided at a cost of$.30 per letter). S.Landlord shall provide all door locks in each tenant's leased premises,at the cost of such tenant,and no tenant shall place any additional door locks in its leased premises without Landlord's prior written consent. Landlord shall furnish to each tenant a reasonable number of keys to such tenant's leased premises,at such tenant's cost, and no tenant shall make a duplicate thereof. Tenant will receive two(2)keys for its leased premises and one(1)mailbox key at no charge. Additional keys shall be provided at Landlord's standard charge. 6.Movement in or out of the Building of furniture or office equipment,or dispatch or receipt by tenants of any bulky material, merchandise or materials which require use of elevators or stairways, or movement through the Building entrances or lobby shall be conducted under Landlord's supervision at such times and in such a manner as Landlord may reasonably require. Each tenant assumes all risks of and shall be liable for all damage to articles moved and injury to persons or public engaged or not engaged in such movement, including equipment,property and personnel of Landlord if damaged or injured as a result of acts in connection with carrying out this service for such tenant. 7. Landlord may prescribe weight limitations and determine the locations for safes and other heavy equipment or items,which shall in all cases be placed in the building so as to distribute weight in a manner acceptable to Landlord,which may include the use of such supporting devices as Landlord may require. Landlord may prohibit the installation of any safes or other heavy equipment or items, which, in Landlord's sole judgment, are in excess of the load bearing capabilities of the appropriate supports in the Building. All damages to the Building caused by the installation or removal of any property of a tenant,or done by a tenant's property while in the building,shall be repaired at the expense of such tenant. 8. Corridor doors, when not in use, shall be kept closed. Nothing shall be swept or thrown into the corridors, halls, elevator shafts or stairways. No birds or animals shall be brought into or kept in, on or about any tenant's leased premises (except for seeing eye dogs). No portion of any tenant's leased premises shall at any time be used or occupied as sleeping or lodging quarters. Exhibit B Page 22(i)of(ii) 9. Tenant shall cooperate with Landlord's employees in keeping its Ieased Premises neat and clean. Tenants shall not employ any person for the purpose of such cleaning other than the Building's cleaning and maintenance personnel. 10. To ensure orderly operation of the Building, no ice, mineral or other water, towels, newspapers, etc. shall be delivered to any leased area except by persons approved by Landlord. 11. Tenant shall not make or permit any improper, objectionable or unpleasant noises or odors in the Building or otherwise interfere in any way with other tenants or persons having business with them. 12.No machinery of any kind(other than normal office equipment)shall be operated by any tenant in its leased premises without Landlord's prior written consent,nor shall any tenant use or keep in the building any flammable or explosive fluid or substance. 13. Landlord will not be responsible for lost or stolen personal property,money or jewelry from tenant's leased Premises or public or Common Area regardless of whether such loss occurs when the area is locked against entry or not. 14.No vending or dispensing machines of any kind may be maintained in any leased Premises without the prior written permission of Landlord. 15, Ordinary Business Hours shall be 8:00 a.m.to 6:00 p.m.Monday through Friday,except legal holidays with regard to controlled access. Heating and Air Conditioning services shall be provided during Ordinary Business Hours as noted above and include Saturdays from 9:00 a.m.to 1:00 p.m. 16. Smoking anywhere in the Building and Premises is prohibited by Landlord and City of Fort Worth Ordinance. 17. Upon request from Landlord, each tenant will provide Landlord a written list of all employees or persons who are regularly employed at such tenant's leased Premises. If any person is not included on such list, Landlord may prohibit or restrict such person from entry into the Building and/or leased Premises. Exhibit B Page 22(ii)of(ii) R EXHIBIT C Parking Plan Lease Agreement Page 23 of 26 z zj 5g5g aiii r..� w SOS AM ..q . nip ash 9 1 ' 1 1 1 1 Ing �+ {� .7 R B � IV � V i �_ [S ;p�! �- ------- its 11 E lei e � ` � 1•� E� ' � I t � • 1 � � 1 (( O n n �•` M++cn..r/+rosw.e,nrrw�—nom •�" Ovou SfA01a _ : i i€lit Nell Rfj a it C Page 2 ' +ia r EXHIBIT D WORK LETTER 1. This Work Letter shall set forth the obligations of Lessor and Lessee with respect to the improvements to be performed in the Premises for Lessee's use. All improvements described in this Work Letter to be constructed in and upon the Premises by Lessor are hereinafter referred to as the "Lessor-Work." It is agreed that construction of the Lessor Work will be completed at Lessee's sole cost and expense, subject to the Allowance (as defined below). Lessor shall enter into a direct contract for the Lessor Work with a general con , ctor selected by Lessor. In addition, Lessor shall have the right to selectd/or approve of any subcontractors used in connection with the Lessor Work. 2. Lessor's interior designer or space planner will prepare space plans necessary to construct the Lessor Work (the "Plans"), such expense to be deducted from the Allowance (as defined below). 3. If Lessor's estimate and/or the actual cost of construction shall exceed the Allowance, Lessor, prior to commencing any construction of Lessor Work, shall submit to Lessee a written estimate setting forth the anticipated cost of the Lessor Work, including but not limited to labor and materials, contractor's fees and permit fees. Within 3 Business Days thereafter, Lessee shall either notify Lessor in writing of its approval of the cost estimate, or specify its objections thereto and any desired changes to the proposed Lessor Work. If Lessee notifies Lessor of such objections and desired changes, Lessee shall work with Lessor to reach a mutually acceptable alternative cost estimate. 4 If Lessor's estimate and/or the actual cost of construction shall exceed the Allowance, if any (such amounts exceeding the Allowance being herein referred to as the "Excess Costs"), Lessee shall pay to Lessor such Excess Costs, plus any applicable state sales or use tax thereon, upon demand. The statements of costs submitted to Lessor by Lessor's contractors shall be conclusive for purposes of determining the actual cost of the items described therein. The amounts payable by Lessee hereunder constitute Rent payable pursuant to the Lease, and the failure to timely pay same constitutes an event of default under the Lease. 5. If Lessee shall request any change, addition or alteration in any of the Plans after approval by Lessor, Lessor shall have such revisions to the drawings prepared, and Lessee shall reimburse Lessor for the cost thereof, plus any applicable state sales or use tax thereon, upon demand. Promptly upon completion of the revisions, Lessor shall notify Lessee in writing of the increased cost which will be chargeable to Lessee by reason of such change, addition or deletion. Lessee, within one Business Day, shall notify Lessor in writing whether it desires to proceed with such change, addition or deletion. In the absence of such written authorization, Lessor shall have the option to continue work on the Premises Lease Agreement Page 24 of 26 disregarding the requested change, addition or alteration, or Lessor may elect to discontinue work on the Premises until it receives notice of Lessee's decision, in which event Lessee shall be responsible for any Lessee Delay in completion of the Premises resulting therefrom. If such revisions result in a higher estimate of the cost of construction and/or higher actual construction costs which exceed the Allowance, such increased estimate or costs shall be deemed Excess Costs pursuant to Paragraph 4 hereof and Lessee shall pay such Excess Costs, plus any applicable state sales or use tax thereon,upon demand. 6. Following approval of the Plans and the payment by Lessee of the required portion of the Excess Costs, if any, Lessor shall cause the Lessor Work to be constructed substantially in accordance with the approved Plans. Lessor shall notify Lessee of substantial completion of the Lessor Work. 7. Lessor, provided Lessee is not in default, agrees to provide Lessee with an allowance (the "Allowance") in an amount not to exceed $10.00 per rentable square foot of the Premises to be applied toward the cost of the Lessor Work in the Premises If the Allowance shall not be sufficient to complete the Lessor Work,Lessee shall pay the Excess Costs,plus any applicable state sales or use tax thereon, as prescribed in Paragraph 4 above. Any portion of the Allowance which exceeds the cost of the Lessor Work shall accrue to the sole benefit of Lessor, it being agreed that Lessee shall not be entitled to any credit, offset,, abatement or payment with respect thereto. 8. This Exhibit shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the original Term of the Lease, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement to the Lease. Lease Agreement Page 25 of 26 r r' P A `4 -FHIN -A- a-u' E DELIBERATELY LEFT Lease Agreement Page 26 of 26