HomeMy WebLinkAboutC2021-263 - 6/28/2021 - NA 1
LEASE AGREEMENT
BETWEEN
THE CITY OF CORPUS CHRISTI ("Landlord")
AND
FROST BANK ("Tenant")
PORT/LEOPARD BUILDING
City of corpus Christi,Nueces County,Texas
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TABLE OF CONTENTS
ARTICLE 1 LEASED PREMISES
1.1 DEMISE 7
1.2 WORK LETTER 7
1.3 INTENTIONALLY OMITTED 7
1.4 PARKING 7
ARTICLE 11 TERM
2.1 TERM 7
2.1A RENEWAL OPTION 8
2.2 SURRENDER OF LEASED PREMISES g
2.3 HOLDING OVER 8
2.4 CANCELLATION OPTION 9
ARTICLE III USE
3.1 PERMITTED USE 9
3.2 CARE OF THE LEASED PREMISES AND PROHIBITED USES 10
3.3 COMPLIANCE WITH LAWS AND REGULATIONS 10
3.4 CLEAN AIR ACT/AMERICANS WITH DISABILITIES ACT COMPLIANCE 10
ARTICLE IV RENT
4.1 BASE RENT 10
4.2 NET RENTAL 11
4.3 TAXES 11
ARTICLE V INTENTIONALLY OMITTED
ARTICLE VI OPERATING EXPENSES,SERVICES, UTILITIES AND LANDSCAPING
6.1 OPERATING EXPENSES 12
6.2 HVAC 12
6.3 JANITORIAL SERVICE 12
6.4 ELEVATOR 12
6•S UTILITY EXPENSES 12
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6.6 LANDSCAPING 12
ARTICLE VII ENTRY BY LANDLORD
7.1 LANDLORD'S ACCESS 13
7.2 KEYS AND LOCKS 13
ARTICLE VIII REPAIRS
8.1 CONDITION OF PREMISES 13
8.2 REPAIRS BY LANDLORD 14
8.3 REPAIRS BY TENANT 14
ARTICLE IX ALERATIONS AND ADDITIONS
9.1 ALTERATIONS AND ADDITIONS 14
9.2 LEASEHOLD IMPROVEMENTS AND TRADE FIXTURES 14
9.3 LIENS 15
ARTICLE X ASSIGNMENT AND SUBLETTING
10.1 LANDLORD'S ASSIGNMENT 16
10.2 TENANT'S ASSIGNMENT OR SUBLETTING 16
ARTICLE XI QUIET ENJOYMENT 17
ARTICLE XII MORTGAGE PROTECTION
12.1 SUBORDINATION TO MORTGAGE 17
12.2 NOTICE TO LANDLORD'S MORTGAGEE 17
12.3 ESTOPPEL CERTIFICATES 18
ARTICLE XIII LANDLORD'S LIENS
ARTICLE XIV EMINENT DOMAIN; DAMAGE OR DESTRUCTION
14.1 CONDEMNATION 19
14.2 FIRE AND CASUALTY 19
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ARTICLE XV INSURANCE
15.1 TENANT'S INSURANCE 20
15.2 LANDLORD'S INSURANCE 20
15.3 WAIVER OF CLAIMS AND SUBROGATION RIGHTS 20
ARTICLE XVI INDEMNITY AND HOLD HARMLESS
16.1 INDEMNIFICATION 21
16.2 LIMITATION OF LIABILITY 22
ARTICLE XVII DEFAULT
17.1 DEFAULT BY TENANT 22
17.2 REMEDIES FOR DEFAULT 23
ARTICLE XVIII GENERAL PROVISIOSN
18.1 SIGNS 25
18.2 NAME OF BUILDING 25
18.3 OBSERVANCE OF RULES AND REGULATIONS 25
18.4 ATTORNEYS' FEES 25
18.5 NON-WAIVER 25
18.6 NOTICES 26
18.7 PRESUMPTIONS 26
18.8 LEGAL INTERPRETATION 26
18.9 AMENDMENTS; BINDING EFFECT 27
18.10 NUMBER AND GENDER;CAPTIONS 27
18.11 AUTHORITY;JOINT AND SEVERAL LIABILITY 27
18.12 FORCE MAJEURE 27
18.13 GOVERNING LAW 27
18.14 CROSS-DEFAULT 27
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18.15 TIME OF ESSENCE 27
18.16 NO PARTNERSHIP 27
18.17 RECORDATION 28
18.18 INTENTIONALLY OMITTED 28
18.19 MEDIATION OF DISPUTES 28
18.20 WAIVER OF JURY TRIAL 28
18.21 BROKERS 29
18.22 WAIVER OF LIEN BY TENANT 29
18.23 SUBMISSION OF LEASE 29
18.24 INTENTIONALLY OMITTED 29
18.25 OTHER PROVISIONS 29
18.26 EXHIBITS AND SCHEDULES 29
18.27 ENTIRE AGREEMENT 30
EXHIBITS
A-1 LEGAL DESCRIPTION
A-2 LEASED PREMISES
B WORK LETTER
C COMMENCEMENT AND TERMINATION AGREEMENT
D RULES AND REGULATIONS
E CANCELLATION FEE
F TENANT'S INSURANCE
SCHEDULES
1 APPROVED LEASEHOLD IMPROVEMENTS
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LEASE AGREEMENT
WHEREAS, The Frost National Bank, now doing business asFrost Bank, aTexas state bank ("Bank") and
the City ofCorpus Christi ("City") entered into the Lease Agreement as of May 17, 2000regarding the
Bank property located at Port and Leopard Streets in Corpus Christi,Texas, with a term beginning earlier
of (i) June 1, 2000 or (ii) City's occupancy of the Lease Premises as defined therein and continuing until
May 31, JO21;
WHEREAS, Bank as "Optionor" and the City of Corpus Christi as "Optionee" entered into the Option to
Purchase Agreement (the "Option Agreement") also as of May 17, 2000 regarding the right of the
Optionee to exercise an option to purchase the property at Port and Leopard Street in Corpus Christi,
Texas;
WHEREAS,the Option Agreement provided inSection 8.Jasfollows:
"Section 8.2. Optionor Lease. |nthe event the Option isexercised, Optionor, inUptionor'ssole
discretion, may lease up to 11,301 square feet of space in the Improvements in the area currently
occupied byBank nnthe date ofthis Option Contract(the"Bank )fromOpboneefuraterm
of five (S) years at the rental rate then in effect under the Optionee Lease on the date of such
lease (less the portion mfsuch rental rate that represents unamortizeddeferred rental under the
Optionee Lease), with two (2) 5-year renewal options ata market rental rate to be negotiated
between Optionor and Optionee at the time of such renewal, In the event Optionor elects to
lease the Bank Space as set forth above, Optionor and Optionee shall execute and deliver with
and to one another the form of Lease Agreement (the "Bank Lease Agreement")attached hereto
ayExhibit Hand made apart hereof for all purposes."
WHEREAS,the rental rate in effect as of the date that the Optionee exercised its option to purchase
under the Option Agreement is$3.67annual square feet rental rate;
WHEREAS, Exhibit H of the Option Agreement regarding the Bank Lease Agreement provided as follows:
"The Bank Lease Agreement will be in the form of the Optionee Lease, with the exception of(a)
square footage leased, (b) lease term and (c) rental amounts, which shall be as set forth in
Section 8.2hureof."
WHEREAS,Section 3.2ofthe Option Agreement provided anexercise period of6/1/2821-7/3l/7O21;
WHEREAS, the Optionee has provided notice to exercise its option to purchase the property as required
bythe Option Agreement;
WHEREAS, Bank and City desire to enter into the Bank Lease Agreement with certain revisions thereto
asagreed upon byBank and City;
NOW,THEREFORE,THIS LEASE AGREEMENT(the "Lease") is made and entered into as of ���k by
andbetvveenTHE[|TYOFCORPUS[HR!ST| ("Landlord") endFROST@ANK, aTexess1atebank("TeIalt'').
_ Subject to all of the terms and conditions of this Lease, and in consideration of the mutual
covenants and obligations contained herein, Landlord and Tenant agree aafollows:
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ARTICLE I
LEASED PREMISES
Section 1.1. DEMISE. Landlord hereby leases, demises and lets to Tenant and Tenant
hereby leases and takes from Landlord those certain premises consisting of approximately 11,627 rentable
square feet comprising the entirety of the rentable space within the two-story office building(the "Bank
Building") that shares a common wall with a four-story office building (the "City Building"), which Bank
Building and City Building are together commonly referred to as the Port/Leopard Building (collectively,
the "Building") located on Tract I ("Tract I"),the real property more particularly described on Exhibit A-1
attached hereto and made a part hereof for all purposes as reflected on the floor plan of the Leased
Premises attached hereto and made a part hereof as Exhibit A-2. The portion of the Building leased by
Landlord to Tenant as described above is referred to herein as the "Leased Premises". The Building and
Tract I are referred to collectively herein as the"Complex".
Section 1.2 INTENTIONALLY OMITTED.
Section 1.3 INTENTIONALLY OMITTED.
Section 1.4 PARKING. Landlord shall provide, throughout the term of this Lease, surface
parking spaces at no charge to Tenant. In the event parking spaces become unavailable to Tenant during
any portion of the Lease,then Landlord shall use good faith efforts to make available to Tenant substitute
parking in an area reasonably near the Building until the parking spaces are made available to Tenant.
Notwithstanding the foregoing,the loss of any such parking spaces shall in no event constitute a breach
of this Lease and/or give rise to any right of Tenant to terminate this Lease or otherwise recover damages
from Landlord for the loss of such parking spaces. Tenant shall defend, indemnify and hold harmless
Landlord and Landlord's officers, directors, shareholders, partners, agents and employees from and
against all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and
disbursements (including court costs and reasonable attorney's fees) resulting directly or indirectly from
the use of the parking spaces by Tenant, its employees, contractors,agents,visitors and invitees.
ARTICLE II
TERM
Section 2.1 TERM. This Lease shall be for a 5-year term beginning on July 1, 2021 (the
"Commencement Date"), and continuing in full force and effect until 11:59 p.m. on June 30,2026, unless
this Lease is terminated earlier pursuant to the provisions hereof (the "Lease Term"). No delay in the
delivery of possession of the Leased Premises shall extend the Lease Term. If the first day of the Lease
Term is a day other than the first day of a calendar month, the Lease Term shall be increased by the
number of days in such partial calendar month and the Base Rental(as hereinafter defined)for said month
shall be prorated based on the per diem base rent to be charged during the first full month under the
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Lease (calculated on thirty (30) day month). Tenant's possession of the Leased Premises on the
Commencement Date shall be conclusive evidence that Tenant(a)accepts the Leased Premise as suitable
for the purposes for which they are leased; and (b) acknowledges that the same comply fully with the
Landlord's covenants and obligations. Landlord and Tenant agree that promptly after the
Commencement Date of this Lease, a Commencement and Termination Agreement, substantially in the
form attached hereto as Exhibit C, shall be executed by each party in order to establish the
Commencement Date and the date of termination of the primary Term of this Lease.
Section 2.1.A RENEWAL TERM. Tenant has right to exercise two (2) 5-year renewal options at
a market rental rate to be negotiated between Tenant and Landlord at the time of such renewal. Tenant
must provide Landlord with written notice of Tenant's intent to renew this Lease during the Renewal
Option Periods defined below:
Renewal Term Renewal Option Period
1St 5-year renewal term 07/01/2026—06/30/2031 01/01/2026—01/31/2026
21d 5-year renewal term 07/01/2031-06/30/2036 01/01/2031--01/31/2031
Upon Landlord's receipt of Tenant's written notice of Tenant's exercise of the renewal option,Tenant and
Landlord shall determine the market rate to be utilized for the five-year renewal term pursuant to the
terms and conditions of Exhibit H to this Lease.
Failure by Tenant to notify Landlord in writing of Tenant's exercise of right to renew during the
Renewal Option Period identified above shall constitute a waiver of such Renewal Term and the Lease
shall terminate upon the expiration of the initial 5-year term (or then-existing Renewal Term, as
applicable)with no rights to renew or extend this Lease.Any termination of the Lease during the initial 5-
year term or during any Renewal Term shall terminate all further renewal rights hereunder.
Section 2.2 SURRENDER OF LEASED PREMISES. Subject to the removal of Trade Fixtures (as
defined below) under Section 9.2 below, on the last day of the Lease Term, Tenant shall peaceably and
quietly surrenderthe Leased Premises to Landlord,in good order and repair,except for ordinary wear and
tear and damage by fire or other casualty, or by eminent domain. No act or thing done by the Landlord
or its agents during the Lease Term hereby granted shall be deemed an acceptance of a surrender of the
Leased Premises,and no agreement to accept a surrender of the Leased Premises shall be valid unless the
same be made in writing and signed by the Landlord.
Section 2.3 HOLDING OVER. Should Tenant, or any of its permitted or approved successors
in interest, hold over in the Leased Premises, or any part thereof, after the expiration or earlier
termination of the Lease Term, unless otherwise agreed in writing,such holding over shall constitute and
be construed as a tenancy at sufferance only at a daily rental equal to one-thirtieth of the monthly rental
installment of Base Rental and additional rental,together with the most current rental adjustment which
may have been made thereto pursuant to Section 4.2 hereof, plus one hundred percent (100%) of such
total amount. The inclusion of the preceding sentence shall not be construed as Landlord's consent for
the Tenant to hold over. In the event of any unauthorized holding over, Tenant shall also indemnify
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Landlord against all claims for damages by any other Tenant to whom Landlord may have leased all or any
part of the Leased Premises effective upon the termination of this Lease.
Section 2.4 CANCELLATION OPTION. Tenant shall have the right during each Lease Year, at
Tenant's sole option,to terminate this Lease effective as of July 311t of such Lease Year(the"Cancellation
Date"), upon not less than sixty (60) days prior written notice to Landlord. In consideration of this
cancellation option and as a condition to the effectiveness of the cancellation,Tenant shall payto Landlord
in cash, on or before the Cancellation Date, a cancellation fee (the "Cancellation Fee") in the amount set
forth on Exhibit E attached hereto and incorporated herein for all purposes. Landlord acknowledges that
continuation of this Lease after the close of Tenant's fiscal year (July 31St annually) is subject to
appropriations and budget approval of this Lease as a line-time expenditure in Tenant's annual budget.
Tenant does not represent that such a budget item will be adopted and Landlord acknowledges that such
determination is within the sole discretion of Tenant's governing body. In the event such appropriation
is not approved in the budget,Tenant shall be deemed to have elected to cancel this Lease in accordance
with this Section 2.4 effective as of July 311t of such year and Tenant shall pay to Landlord the applicable
Cancellation Fee on or before the thirtieth (30t') day after the adoption of the annual budget for such
year. From and after the Cancellation Date set forth in the notice herein provided for, neither Landlord
nor Tenant shall have any further obligation of any kind or nature to the other accruing after such date,
but such termination shall not relieve either Landlord or Tenant from any obligation accruing prior to the
Cancellation Date,whether or not known or determinable on such date, nor will Tenant be relieved of any
obligation of Tenant imposed by this Lease which Tenant may have at the termination of the Term of the
Lease, such as provisions concerning the condition of the premises upon Tenant vacating the Leased
Premises.
ARTICLE III
USE
Section 3.1. PERMITTED USE. The Leased Premises shall be used for Tenant's banking services
and related activities,and for no other purpose. The use and occupancy by Tenant of the Leased Premises
shall include the use in common with others entitled thereto of the common areas and lobbies (except
those areas designated for the exclusive use of others),subject, however,to the terms and conditions of
this Lease and to those reasonable rules and regulations for the use thereof as may be prescribed from
time to time by Landlord,specifically,without limitation,those rules and regulations attached hereto and
made a part hereof as Exhibit Q.
Section 3.2 CARE OF THE LEASED PREMISES AND PROHIBITED USES. Tenant shall not use or
permit any other party to use all or any part of the Leased Premises for any purpose not expressly
authorized by this Lease. Tenant shall not do or permit anything to be done in or about the Leased
Premises nor bring nor keep nor permit anything to be brought to or kept therein,which is prohibited by
law or which will in any way increase the existing insurance premiums or affect any fire or other insurance
which Landlord carries upon the Building or any of its contents, or cause a cancellation of any insurance
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policy covering the Building orany ofits contents. Tenant shall not doorpermit anything tobedone on
orabout the Leased Premises which will inany way obstruct orinterfevewiththeright of other tenants
of the Building or use or allow the Leased Premises to be used for any unlawful or objectionable purpose.
Section 3.3. COMPLIANCE WITH LAWS AND REGULATIONS. Tenant shall comply with all
laws, ordinances, orders, rules, and regulations (state, federal, municipal, and other agencies or bodies
having any jurisdiction thereof)relating to the use or occu pa ncy of the Leased Premises. |fTenant receives
written notice of the violation of any such law, order, ordinance, or regulation, it shall promptly notify
Landlord thereof.
Section 3.4. CLEAN AIR ACT/AMERICANS WITH DISABILITIES ACT COMPLIANCE. In addition to
Tenant's obligations under Section 3.3 above.,Tenant agrees to be responsible for any requirements under
the Clean Air Act of 1990, the Americans with Disabilities Act of 1990 (the "ADA") and the Texas
Architectural Barriers Act (Tax. Civ. Stat. Ann. Art. 9102 (Vernon Supp. 1996)) (the ''TABA") and as
hereinafter amended) as they related to the Leased Premises,the Bank Building and the common areas
within the Bank Building. Tenant agrees to indemnify,defend,and hold harmless Landlord for any liability
Landlord shall incur as a result of Tenant's failure to comply with this Section 3.4. Landlord agrees to
reasonably cooperate with Tenant to enable Tenant to timely comply with the provisions of this Section
and to immediately forward to Tenant any notice that such party may receive regarding complaints,
inquiries, or claims by any parties claiming that those items which are the responsibility of Tenant do not
comply with the Clean Air Act,ADA and/or the TABA.
ARTICLE I&
RENT
Section 4.1 BASE RENTAL
(A) In consideration of this Lease, Tenant hereby agrees to pay to Landlord in advance onthe first
(11t)day of each calendar month base rental("Base Rental"),without deduction orsetoff,during the Lease
Term asfollows (the "Monthly ):
Month Building Floor Square Feet Annual Sq. Ft. Monthly Rental
Rental Rate Installment
(b) The Tenant also shall pay,as additional rental,all such other sums of money as same shall become
due and payable by Tenant to Landlord under the terms of this Lease including but not limited to, sums
due pursuant to Section 4.3 below. Tenant agrees to pay Monthly Rental Installments and additional
rental to Landlord at Landlord's address as provided herein(orat such other address as may be designated
by Landlord from time to time) monthly in advance without demand or offset. It is agreed that,
notwithstanding anything contained herein to the contrary,the Leased Premises herein are[eased forthe
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Base Rental for the Lease Term, payable at the time of the making of this Lease, and that the provisions
herein contained for the payment of such rent in Monthly Rental Installments are for the convenience of
the Tenant only,and that upon default in the payment of any such Monthly Rental Installments, Landlord
shall be entitled to exercise the remedies set forth in Section 17.2 below. One such Monthly Rental
Installment together with the Security Deposit (as hereinafter defined) shall be payable by Tenant to
Landlord contemporaneously with the execution ofthis Lease. |fthe Commencement Date isaday other
than the first day of a calendar month or in the event this Lease terminates on other than the last day of
a calendar month,then the Monthly Rental Installments and additional rental for such month or months
shall be prorated and the Monthly Rental Installment or Monthly Rental Installments so prorated shall be
paid in advance without demand. The Landlord shall have the same remedies for default inthe payment
of additional rental as are available to Landlord in the case of default in the payment of Base Rental. All
past due Monthly Rental Installments of Base Rental or additional rental hereunder which are or which
become owed to Landlord pursuant to any of the terms,covenants, and conditions of this Lease,whether
or not so specified, shall bear interest commencing ten (10) days after the due date thereof at twelve
percent (1J%) per annum, not toexceed the highest lawful rate, until paid.
Section 4.2. NET RENTAL. It is intended that the Base Rental provided for in this Lease shall
be absolutely net to Landlord throughout the term of this Lease and Tenant accordingly covenants and
agrees to pay, as they come due and payable and before they become delinquent, all taxes, costs,
expenses, liabilities, deductions or other charges whatsoever with respect to the Leased Premises and/or
the ownerships,operation, maintenance, repair, use or occupation thereof, including without limitation,
the costs,charges and assessments hereinafter set forth inthis Lease.
Section 4.3 TAXES. Tenant shall timely pay all advalorem and similar taxes orassessments
levied upon or applicable to all of Tenant's Leased Premises and leasehold improvements,Trade Fixtures
(as hereinafter defined), and all other equipment, fixtures, furniture, and other property situated in the
Leased Premises,and all licenses and otherfees or charges imposed on the business conducted byTenant
in the Leased Premises.
ARTICLE V
INTENTIONALLY OMITTED
ARTICLE VI
OPERATING EXPENSES,SERVICES, UTILITIES AND LANDSCAPING
Section 6.1. OPERATING EXPENSES. Tenant agrees topay any and all expenses ufoperation
of the Leased Premises, it being the sense and intention of this Lease that the amounts payable to Lessor
hereunder as rent shall be absolutely net to Landlord, without diminution by reason of any expense of
operation ofthe Leased Premises.
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Section 6.2 HVA[ Tenant shall be solely responsible for all HVAC operation, maintenance,
repair and replacement to the extent such HVAC exclusively serves the Bank Building. Tenant shall provide
an HVA[maintenance contract for Landlord's approval,which contract shall be kept infull force in effect
UyTenant atall times during the Lease Term.
Section 6.3. JANITORIAL SERVICE. Tenant shall bpsolely responsible for all janitorial services
inthe Leased Premises.
Section 6.4. ELEVATOR. Tenant shall be solely responsible for all elevator expense, including
without limitation, maintenance, repair and replacement of same, if any located within the Leased
Premises.
Section 6.5. UTILITY EXPENSE. Tenant shall have the entire responsibility tocontract for and
maintain all water and wastewater services for the Bank Building and Tenant shall not in any event be
relieved of any of Tenant's obligations underthis Lease by reason of Tenant's failure or inabilityto contract
for or maintain any such service. Tenant shall be responsible for all water and wastewater expenses
related to the Bank Building, and shall pay, prior to delinquency, for all water, sewage, stormwater and
other materials and services which may befurnished toorused in orabout the Leased Premises during
the term of this Lease. The parties acknowledge that the Bank Building is installed with a separate
electrical submeter, and is not served by gas utilities; provided, however,that if the parties are incorrect
and the Bank Building does use gas utility services, then Tenant shall pay for the actual oust of all such
service tnthe Bank Building, and if such service is not separately metered from the City Building, then
Tenant shall reimburse Landlord for Tenant's proportionate share of gas utility costs using a ratio based
on the number of rentable square feet of the Bank Building divided by the total numberof rentable square
feet ofthe City Building and the Bank Building. Each month,Tenant shall provide Landlord with readings
of the electrical submeter for the Leased Premises,and Landlord shall thereafter invoice Tenant in writing
for Tenant's share ofelectricity costs, based onsuch submeter readings,provided together with acopy of
the original bill from the utility, and Tenant shall pay to Landlord such invoiced electricity costs withIn
thirty(3O) days following receipt ofsuch written invoice.
Section 6.6. LANDSCAPING. Tenant shall be solely responsible for all landscaping immediately in
the area that is: (1) in front of the Bank Building and (ii) between the front of the Bank Building and the
frontage road(including,to the extent applicable,the mowing of grass,care of shrubs,watering and other
landscaping requirements) during the term of this Lease; provided, however, Tenant shall not be
responsible for landscaping any remaining portion ofthe Complex.
ARTICLE VII
ENTRY BY LANDLORD
Section 7.1. LANDLORD'S ACCESS. Landlord, its contractors, subcontractor, servants,
employees and agents, shall have the right to enter upon the Leased Premises at reasonable times to
inspect the same,clean or make repairs, alterations or additions thereto, or to show same to prospective
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tenants at any reasonable time during the last year of that portion of the Lease Tenn then in progress
(initial or renewal, as the case may be)and to show same to prospective purchasers of the Building at any
reasonable time during the Lease Term, and Tenant shall not be entitled to any abatement or reduction
in vent by reason thereof so long as any such showing(s) do not unreasonably interfere with Tenant's
operations.
Section 7.2 KEYS AND LOCKS. Landlord, at Tenant's sole cost and expense, shall
provide keys and locks for the Leased Premises excluding any safes and vaults, and the same shall be
available to Landlord, its security personnel, and its cleaning crews as may be required by such persons.
Further, all card-keys for use in the card-key access system, if any such system now or in the future exits,
for after-hour entry into the Leased Premises shall be supplied by Landlord to Tenant. Tenant shall
reimburse Landlord for its actual costs and expenses with respect to the card-keys and Tenant agrees to
pay such cost and expense within thirty (30) days after being billed therefore by Landlord. The cost
installing a keyless access system shall be Tenant's sole responsibility. Upon termination of this Lease,
Tenant shall surrender to Landlord all keys for the Leased Premises, and give to Landlord the explanation
of the combination of all locks for safes,safe cabinets,and vault doors,if any, in the Leased Premises.
ARTICLE VIII
REPAIRS
Section 8.1. CONDITION OF PREMISES. The Leased Premises shall bedelivered toTenant in an
"AS|S", "VVHERE |S",ond"VV|THALLFAULTS"conditionandLand|ordshaUhavenoubU0ationwhatsoever
to alter, remodel, improve, repair,decorate,or paint the Leased Premises or any part thereof either prior
to or during the Lease Term. LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY OF ITS AGENTS,
EMPLOYEES, LICENSEES, CONTRACTORS, SERVANTS, OR INVITEES FOR ANY INJURY OR DAMAGE TO
PERSONS OR PROPERTY DUE TOTHE CONDITION OR DESIGN OF, OR ANY DEFECT IN THE BUILDING OR
ITS MECHANICAL SYSTEMS AND EQUIPMENT WHICH MAY EXIST OR OCCUR, AND TENANT FOR ITSELF
AND ITS AGENTS,EMPLOYEES, LICENSEES,SERVANTS,AND INVITEES EXPRESSLY ASSUMES ALL RISKS OF
INJURY ORDAMAGE T@PERSONS,EITHER PROXIMATE O0REMOTE,RESULTING FROM THE CONDITION
OF THE LEASED PREMISES,THE BUILDING ORTHE COMPLEX.
Section 8.2. REPAIRS BYLANDLORD. LANDLORD shall not berequired tomake any improvements,
replacements or repairs of any kind or character to the Leased Premises during the Term of this Lease.
Section 8.3. REPAIRS BY TENANT. Tenant shall, at all times during the Lease Term and at
Tenant's sole cost and expense, keep the Leased Premises and every part thereof (including all
landscaping that Tenant is required to maintain) in good condition and repair. Further Tenant shall,atits
own costs and expense, repair or replace any damage or injury to the Leased Premises or the Complex or
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any part thereof, caused by Tenant or Tenant's agents, contractors, employees, invitees, or visitors. If
Tenant fails to commence making such repairs or replacements, Landlord may commence and complete
such repairs and replacements and Tenant shall repay the cost thereof, plus ten percent (10%) of such
cost to cover overhead,as additional rent payable upon presentation by Landlord of a statement therefor.
Tenant shall be solely responsible for all costs for maintenance, repair and replacement of the Leased
Premises, including but not limited to the following to the extent they are exclusive to the Bank Building
and are not part of the City Building or serve the City Building: roofs,gutters,exterior walls,doors,flooring
and windows, foundations, sidewalks, structural wall, columns, interior electrical, plumbing, fire
suppression and HVAC and other mechanical systems (collectively,the "Systems"). Notwithstanding the
foregoing, Tenant shall not be required to replace any Systems to the extent that the useful life of the
replacement System would exceed the remaining term of this Lease, without regard to renewal options.
The Landlord is not obligated to repair, replace or maintain any Systems. To the extent any Systems are
part of or serve both the City Building and the Bank Building, Tenant may, at Tenant's election but not
obligation, perform maintenance, repairs, and replacements related to such Systems, in which event
Landlord shall reimburse Tenant's actual costs related to same less Tenant's Proportionate Share of such
costs,within fifteen (15)days after receipt of a written invoice for such reimbursement.
ARTICLE IX
ALTERATIONS AND ADDITIONS
Section 9.1. ALTERATIONS AND ADDITIONS. All alterations, improvements,additions or changes
made by Tenant to the Leased Premises shall be subject to the prior written approval of Landlord, which
approval shall not be unreasonably withheld,and shall(i)be made at Tenant's sole cost,expense and risk;
(ii) be performed in a prompt,good, and workmanlike manner;(iii) be constructed in accordance with all
applicable laws, rules, regulations, and other codes and governmental and insurance requirements; (iv)
not alter the exterior appearance,the public areas,corridors,or common areas of the Building,except as
expressly permitted hereunder; and (v) be performed by a contractor or contractors approved by
Landlord. Any and all such alterations,physical additions, improvements and changes,when made to the
Leased Premises as permitted hereunder by Tenant,shall at once become the property of Landlord and
shall be surrendered to Landlord upon termination of this Lease, subject, however, to the provisions of
Section 9.2 below. Tenant shall not make any structural alterations or any changes to the building
systems, including electrical and plumbing systems (other than as necessary to provide such services to
the Leased Premises and only after approval thereof by Landlord), without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Tenant shall deliver to Landlord prior to
commencing any work copies of all plans and specifications for all alterations or improvements to be made
to the Leased Premises.
Section 9.2. LEASEHOLD IMPROVEMENTS AND TRADE FIXTURES. Subject to the other
provisions of this Lease,Landlord and Tenant agree that all Trade Fixtures installed in the Leased Premises
shall be and remain the property of Tenant and may be removed by Tenant, and shall be so removed if
required by Landlord, upon the expiration of the Lease Term;provided, however, (i)if such Trade Fixtures
are not so removed they shall, at the option of Landlord, become the property of Landlord or shall be
B
removed byLandlord atTenant's sole cost and expense;and (ii)that ifany such Trade Fix¢uneisaffixedto
the Leased Premises and therefore requires severance therefrom,such severance may be effected only if
Tenant repairs any damage tnthe Building,the Leased Premises, �sdem�ingwaU� and other structural
elements ofthe Building caused bysuch nemovuiAny such vemova|and restoration shall beaccomplished
within fifteen (15) days following the expiration urearlier termination of this Lease and in u good and
workmanlike manner so as not to damage the Building or any improvements situated therein.The term
"Trude Fixtures" as used herein shall mean any and all items of personal property used and installed by
Tenant in the Leased Premises, limited to telephone systems,furniture,equipment, and fixtures,and any
and all signs placed byTenant pursuant toprovisions hereof.The term "Trade Fixtures" shall not include
any permanent leasehold improvements other than those described in the preceding sentence (all of
which permanent leasehold improvements, as between Landlord and Tenant,shall become the property
of Landlord upon the incorporation in oraffixation tothe Leased Premises), including but not limited to
any floor, wall, window, or ceiling coverings, any interior walls or partitions, any built-in bookcases or
raised floors,any lighting fixtures,orany property apart of orassociated with any electrical, plumbing or
mechanical system, notwithstanding that the same may have been installed within the Leased Premises
by Tenant. All items which become incorporated in or permanently affixed to the Leased Premises shall
become the property of Landlord upon their incorporation or affixation and,at the option of the Landlord,
may beremoved byLandlord atTenant's sole cost and expense. All such other items shall besurrendered
by Tenant coincident with its surrender of the Leased Premises, and Tenant shall have no (and hereby
waives all) rights tuany payment orcompensation for such items.
Section 9.3. LIENS. Tenants shall keep the Leased Premises free from any liens arising from
any work performed, materials furnished, or obligations incurred by or at the request of the Tenant. All
persons either contracting with Tenant or furnishing or rendering labor and material s to Tenant shall be
notified in writing by Tenant that they must look only to Tenant for payment for such labor and materials.
Nothing contained in this Lease shall be construed as Landlord's consentto any contractor,subcontractor,
laborer,or materialman forthe performance of any labor orthe furnishing of any materials for any specific
improvement,alteration,or repair of,orto,the Leased Premises,nor as giving Tenant any rightto contract
for,or permit the performance of,any services or the furnishing of any materials that would result in any
liens against the Leased Premises. If any lien is filed against the Leased Premises or Tenant's leasehold
interest therein, Tenant shall discharge same within twenty (20) days after its filing. |fTenant fails to
discharge such lien within such period,then, in addition to any other right or remedy of Landlord,Landlord
may, at its election, discharge the lien by either paying the amount claimed to be due orobtaining the
discharge by deposit with a court or title company orby bonding. Tenant shall pay on demand any
amount paid by Landlord for the discharge or satisfaction of any lien, and all reasonable attorney's fees
and other legal expenses of Landlord together with all necessary disbursement s in connection therewith.
Notwithstanding the foregoing,Tenant may contest the amount or validity of any such lien, provided that
Tenant first posts with Landlord an indemnity bond issued by a corporate surety reasonably satisfactory
to Landlord in an amount equal to the amount of the lien claim plus a sufficient amount to cover any
penalties,interest,attorney's fees,court costs and other legal expenses resulting from such contest. This
bond shall name Landlord and such other parties as Landlord may direct as obligees thereunder.
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ARTICLE X.
ASSIGNMENT AND SUBLETTING
Section 10.1. LANDLORD'S ASSIGNMENT. Landlord shall have the right to transfer and assign this
Lease in whole or in part, by operation of law or otherwise, including all of its rights, benefits, privileges,
duties, and obligations hereunder, whenever Landlord in its sole judgment deems it appropriate, and
Tenant shall attorn to any such transferee upon being furnished notice of the assignment. Such transfer
or assignment shall relieve Landlord of any liability or obligation, other than those accrued hereunder
priorto the date of such transfer or assignment,it being the intention of Land lord and Tenant that Tenant
shall look solely to Landlord's successor in interest for performance of all obligations accruing from and
after the date of such transfer or assignment.
Section 10.2.TENANT'S ASSIGNMENT OR SUBLETTING.Tenant shall not assign this Lease or sublet
any portion of the Leased Premises without the prior written consent of Landlord. In the event Tenant
may desire to assign or sublet the Leased Premises or any part thereof,Tenant shall give Landlord written
notice of such desire at least thirty (30) days prior to the date on which Tenant desires to make such
assignment or sublease. Landlord shall, within thirty (30) days following receipt of such notice, notify
Tenant in writing that Landlord elects either(i) to terminate this Lease as to the space so affected as of
the date so specified by Tenant;(ii)to permit Tenant to assign or sublet such space,subject, however,to
subsequent written approval of the proposed assignee or sublessee by Landlord; or (iii) to deny Tenant
permission to sublet or assign. If Landlord should fail to notify Tenant in writing of such election within
said thirty (30) day period, Landlord shall be deemed to have elected (iii) above. In the event Landlord
consents to one or more assignments or sublettings, the Base Rental and additional rental provided for
herein shall, if applicable, be increased during the term of such assignments or sublettings to an amount
equal to the amount of rent or any amount in excess of the rental and other charges due under this Lease,
whether such amount be in the form of increased rental, a lump sum payment in consideration of the
sublease or assignment, or consideration of any other form.to be paid by such assignee or subtenant to
Tenant. Consent by Landlord to one or more assignments or sublettings shall not operate as a waiver of
Landlord 's rights as to any subsequent assignments and sublettings. Notwithstanding any assignment or
subletting, Tenant, and any guarantor of Tenant's obligations under this Lease, shall at all times remain
fully responsible and liable for the payment of the rent herein specified and for compliance with all of
Tenant's other obligations under this Lease. Tenant shall not mortgage, pledge, or otherwise encumber
its interest in this Lease or in the Leased Premises. In no event shall Tenant assign this Lease or sublease
the Leased Premises or any portion thereof to any then existing or prospective tenant of the Building, or
to any party with whom Landlord is actively negotiating a lease.
ARTICLE XI.
QUIET ENJOYMENT
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Landlord covenants that Tenant shall,and may quietly have, hold,and enjoy the Leased Premises,
subject to the other terms of this Lease and the terms of any Superior Leases and Mortgages (as
hereinafter defined),and all other agreements and matters of record orto which this Lease is subordinate,
provided that Tenant pays the rent to be paid by Tenant and performs all of Tenant's covenants and
agreements herein contained. As used in this Lease,the term "Superior Leases and Mortgages" means all
present and future ground leases, underlying leases, mortgages, deeds of trust, or other encumbrances,
and all renewals, modifications, consolidations, replacements or extensions thereof or advances made
thereunder, affecting all or any portion of the Leased Premises,the Building or the Complex.
ARTICLE XII
MORTGAGEE PROTECTION
SECTION 12.1. SUBORDINATION TO MORTGAGE. Tenant accepts this Lease subject and
subordinate to all Superior Leases and Mortgages provided the holder of such Superior Leases and
Mortgages agrees not to disturb Tenant's peaceful use and possession of the Leased Premises so long as
Tenant is not in default hereunder, and to zoning ordinances and other building and fire ordinances and
governmental regulations presently existing or hereinafter enacted relating to the use of the Leased
Premises; but Tenant agrees that any ground lessor, mortgagee or beneficiary of any deed of trust or
other lien (the "Landlord's Mortgagee") or Landlord shall have the right at any time to subordinate any
Superior Lease and Mortgage to this Lease on such terms and subject to such conditions as such Land
lord's Mortgagee or Landlord may deem appropriate in such person's sole discretion. Upon demand,
Tenant agrees to execute such further instruments subordinating this Lease as Landlord may request, in
the form and substance satisfactory to Landlord, and such non-disturbance and attornment agreements
as such Landlord's Mortgagee shall request, in form and substance satisfactory to such Landlord's
Mortgagee. In the event that Tenant shall fail to execute any such instrument within ten (10) days after
requested, Tenant hereby irrevocably constitutes Land lord as Tenant's attorney-in-fact to execute such
instrument in Tenant's name,place and stead,it being stipulated by Landlord and Tenant that such agency
is coupled with an interest in Landlord, and is, accordingly, irrevocable. Upon foreclosure of the Building
or the Complex, or upon acceptance of a deed in lieu of foreclosure, Tenant hereby agrees to attorn to
the new owner of such property after such foreclosure or acceptance of a deed in lieu of foreclosure is so
requested by such new owner of the Building or Complex.
SECTION 12.2. NOTICE TO LANDLORD'S MORTGAGEE. If the Complex,the Building, or the Leased
Premises are at any time subject to a ground lease, mortgage or deed of trust or other lien,then in an
instance in which Tenant gives notice to Landlord alleging default by Land lord hereunder,Tenant will
also simultaneously give a copy of such notice to each Landlord's Mortgagee (provided Landlord or such
Landlord's Mortgagee shall have advised Tenant of the name and address of such Landlord's
Mortgagee)and each Landlord's Mortgagee shall have the right (but no obligation) to cure or remedy
such default during the period that is permitted to Landlord hereunder, pi us an additional period of
thirty (30)days,and Tenant will accept such curative or remedial action (if any)taken by any Landlord's
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Mortgagee with the same effect as if such action had been taken by Landlord.
SECTION 12.3. ESTOPPEL CERTIFICATES. At Landlord's request from time to time, Tenant will
execute either an estoppel certificate or an agreement among Landlord, Tenant, and Landlord's
Mortgagee certifying to such facts (if true) and agreeing to such notice provisions and other matters as
Landlord or Landlord's Mortgagee may reasonably require.Any such certificate may be relied upon by any
prospective purchaser, mortgagee or any beneficiary under any deed of trust on the Building or the
Complex. If, in connection with obtaining financing for the Building,the Complex,or of the land under the
Building and/or Complex, any lender shall request reasonable modifications to this Lease as a condition
for such financing, Tenant will not unreasonably withhold, delay, or condition its consent thereto,
provided that such modifications do not increase the obligations of Tenant hereunder or materially
adversely affect either the leasehold interest hereby created or Tenant's use and enjoyment of the Leased
Premises.
ARTICLE XIII
LANDLORD'S LIENS
In addition to the statutory Landlord's lien, Landlord shall have, at all times but subject to(i)any
valid purchase money security interests and (ii) any leases, a valid security interest to secure payment of
all rentals and other sums of money becoming due hereunder from Tenant,and to secure payment of any
damages or loss which Landlord may suffer by reason of the breach by Tenant of any covenant,
agreement, or condition contained herein, upon all goods, wares, equipment, fixtures, furniture,
improvements, and other personal property of Tenant presently or which may hereafter be situated on
the Leased Premises and all proceeds therefrom, and such property shall not be removed therefrom
without the consent of Landlord until all arrearages in rent as well as any and all other sums of money
then due to Landlord hereunder shall first have been paid and discharged and all the covenants,
agreements, and conditions thereof have been fully complied with and performed by Tenant. Upon the
occurrence of an Event of Default by Tenant, Landlord may, in addition to any other remedies provided
herein, enter upon the Leased Premises and take possession of any and all goods, wares, equipment,
fixtures,furniture,improvements and other personal property of Tenant situated on the Leased Premises,
without liability for trespass or conversion, and sell the same at public or private sale, with or without
having such property at the sale,after giving Tenant notice of the time and place of any public sale or the
time after which any private sale is to be made, at which sale the Landlord or its assigns may purchase
unless otherwise prohibited by law. Unless otherwise provided by law, and without intending to exclude
any other manner of giving Tenant notice,the requirement of notice shall be met if such notice is given in
the manner prescribed by Section 18.6 of this Lease at least five (S) days before the time of sale. The
proceeds from any such disposition, less any and all expenses incurred with the taking of possession,
holding and selling of the property (including reasonable attorney's fees and other expenses), shall be
applied as a credit against the indebtedness secured by the security interest granted in this Article XIII.
Any surplus shall be paid to Tenant or as otherwise required by law, and the Tenant shall pay any
deficiencies within thirty (30) days after receipt of written demand therefor. Upon request by Landlord,
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Tenant agrees to execute and deliver to Landlord a financing statement in form sufficient to perfectthe
security interest of Landlord in the aforementioned property and proceeds thereof under the provisions
of the Uniform Commercial Code in force in the State of Texas. The statutory lien for rent is not hereby
waived and the security interest herein granted is in addition and supplementary thereto.
ARTICLE XIV
EMINENT DOMAIN;DAMAGE OR DESTRUCTION
Section 14.1. CONDEMNATION. If, during the term of this Lease, or any extension or renewal
thereof,all or any portion of the Complex, Building,or Leased Premises should be taken for any public or
quasi-public use under any governmental law, ordinance, or regulation or by right of eminent domain or
by private purchase in lieu thereof, then Landlord shall have the option, in its sole discretion, of
terminating this Lease, or, at Landlord's sole risk and expense, restoring and reconstructing the Leased
Premises to the extent necessary to make same reasonably tenantable.Should Landlord elect to restore,
this Lease shall continue in full force and effect with the rent payable during the unexpired portion of this
Lease adjusted to such an extent as may be fair and reasonable under the circumstances,and Tenant shall
have no claim against Landlord for the value of any interrupted portion of this Lease.Tenant shall not be
entitled to any part of the award or price paid therefore, and Landlord shall receive the full amount of
such reward or price,Tenant expressly waiving any right or claim to any part thereof.
Section 14.2. FIRE AND CASUALTY.Tenant shall immediately notify Landlord if any portion of the
Complex, Building, or the Leased Premises should be damaged by fire, tornado or other casualty and
Landlord may, at its option, terminate this Lease, in which event the rent shall be abated during the
unexpired portion of this Lease effective on the date of such damage. In the event the Leased Premises
should be damaged by fire,tornado,or other casualty,but Landlord does not elect to terminate this Lease,
Landlord shall within a reasonable period of time commence to rebuild or repair the Leased Premises and
shall proceed with reasonable diligence to restore the Leased Promises to substantially the same
condition in which they were immediately prior to the happening of the casualty, except that Landlord
shall not be required to rebuild, repair, or replace any part of the furniture, equipment, fixtures,
leasehold improvements, and other improvements which may have been placed by Tenant or other
tenants within the Building, the Leased Premises, the Complex, or related facilities. Anything to the
contrary contained herein notwithstanding, Landlord shall not beobligated to rebuild, repair, or restore
said Leased Premises in the event that proceeds from insurance are either unavailable ofinsufficient 10
cover the costs of repair, restoration, or rebuilding (other than by reason of Landlord's failure to obtain
or keep insurance in force), and this Lease shall terminate within one hundred twenty (120) days after
the occurrence of the event precipitating the damage. In the event that the Leased Premises are totally
untenantab|e, Landlord shall a||ovv Tenant a fair diminution of rent during the time the Leased Premises
are partially unfit for occupancy. Any insurance which may be carried by Landlord or Tenant against loss
20
or damage to the Building or to the Leased Premises shall be for the sole benefit of the party carrying such
insurance and under its sole control.
No damages, compensation, or claim shall be payable by Landlord for inconvenience, loss of
business, or annoyance arising from any repair or restoration of any portion of the Leased Premises,the
leasehold improvements, the Building, or the Complex. Landlord shall use its best efforts to have such
repairs made promptly so as not unnecessarily to interfere with Tenant's occupancy.
The provisions of this Section 14.2 shall be considered an express agreement governing any case
of damage or destruction of the Complex, the Building, the leasehold improvements, or the Leased
Premises by fire or other casualty. If in any instance in this Section 14.2 Landlord is required or has elected
to repair and reconstruct the Complex, the Building, the Leased Premises, or leasehold improvements,
the Lease Term shall not be extended by a period of time equal to the period of such repair and
reconstruction.
ARTICLE XV
INSURANCE
Section 15.1. TENANT'S INSURANCE. Tenant shall maintain throughout the Lease sufficient
reserves to fund self-insurance to protect Tenant and Landlord from losses related to Worker's
Compensation, Employer's Liability, property insurance for personal property and business loss,and
liability type coverages related to the Leased Premises. A letter from Tenant's Director of Safety and Risk
Management confirming Tenant's self-insurance is attached hereto as Exhibit F and incorporated herein
for all purposes.
Section 15.2. LANDLORD'S INSURANCE. During the Lease Term,Landlord shall insure the Complex
and the Building, excluding any property which Tenant is obligated to insure under Section 15.1 above,
by a standard fire and standard extended coverage policy and public liability insurance in an amount and
with such deductions as Landlord considers appropriate. Tenant shall reimburse Landlord for Tenant's
Proportionate Share of Landlord's annual insurance costs within twenty(20)days after receipt of written
demand therefor. Landlord may, but shall not be obligated to,take out and carry any other form or forms
of insurance as it or Landlord's Mortgagees may determine advisable. Notwithstanding any
contribution by Tenant to the cost of insurance premiums, as provided herein, Tenant
acknowledges that it has no right to receive any proceeds from any such insurance policies carried by
Landlord. Landlord will not have to carry insurance of any kind on any of the Tenant's leasehold
improvements, on Tenant's furniture or furnishings, or on any of Tenant's fixtures, equipment,
improvements, or appurtenances under this Lease; and Landlord shall not be obligated to repair
any damage thereto or replace the same.
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Section 15.3. WAIVER OF CLAIMS AND SUBROGATION RIGHTS. To the extent obtainable, all
insurance policies (other than worker's compensation insurance) which Tenant must carry pursuant to
this Lease shall contain one of the following provisions and/or endorsements (a "Waiver Provision"): (i)
an express waiver of any right of subrogation by the insurance company against Landlord and its agents
and employees; or (ii) a statement that the policy shall not be invalidated should the insured waive in
writing prior to a loss, any or all rights of recovery against any other party for losses covered by such
policies. To the extent obtainable, Landlord's property insurance policy covering the Building shall also
contain a Waiver Provision. Each party shall use diligent efforts to obtain a Waiver Provision from its
insurer without thereby invalidating its insurance or adversely affecting its right to proceeds payable
thereunder. Landlord and Tenant each hereby waives all claims for recovery against the other, to the
extent that such claims are recoverable under valid and collectable insurance policies, provided that the
relevant insurance policies will not be invalidated and that no right to collect the proceed s payable under
such policy will be adversely affected by the foregoing waiver. To the same extent, and on the same
conditions, Landlord and Tenant each hereby waives any right of subrogation which might otherwise exist
in or accrue to any person on account of such claims.
ARTICLE XVI.
INDEMNITY AND HOLD HARMLESS
Section 16.1. INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
TENANT AGREES TO INDEMNIFY, PROTECT, DEFEND, AND HOLD HARMLESS
LANDLORD, AFFILIATED COMPANIES OF LANDLORD, AND ANY SUCCESSORS,
ASSIGNS, HEIRS, PERSONAL REPRESENTATIVES, DEVISEES, AGENTS, STOCKHOLDERS,
OFFICERS, DIRECTORS, EMPLOYEES, AND AFFILIATES OF ANY OF THE ABOVE-
MENTIONED PARTIES (COLLECTIVELY REFERRED TO HEREIN AS "INDEMNITEES") FOR,
FROM, AND AGAINST ANY AND ALL LIABILITIES, DAMAGES, CLAIMS, SUITS, LOSSES,
CAUSES OF ACTION, LIENS, JUDGMENTS, AND EXPENSES (INCLUDING COURT COSTS,
ATTORNEY'S FEES, AND COSTS OF INVESTIGATION) OF ANY NATURE, KIND OR
DESCRIPTION ARISING OR ALLEGED TO ARISE BY REASON OF INJURY TO OR DEATH
OF ANY PERSON OR DAMAGE TO OR LOSS OF PROPERTY (1) OCCURRING ON, IN, OR
ABOUT THE LEASED PREMISES, OR (2) BY REASON OF ANY OTHER CLAIM
WHATSOEVER OF ANY PERSON OR PARTY OCCASIONED OR ALLEGED TO BE
OCCASIONED IN WHOLE OR IN PART BY ANY ACT OR OMISSION ON THE PART OF
TENANT OR ANY INVITEE, LICENSEE, EMPLOYEE, DIRECTOR, OFFICER, SERVANT,
CONTRACTOR, SUBCONTRACTOR, OR TENANT OF TENANT, OR (3) BY ANY BREACH,
VIOLATION, OR NON-PERFORMANCE OF ANY COVENANT OF TENANT UNDER THIS
LEASE (COLLECTIVELY REFERRED TO HEREIN AS "LIABILITIES"), EVEN IF SUCH
LIABILITIES ARISE FROM OR ARE ATTRIBUTED TO THE CONCURRENT OR SOLE
NEGLIGENCE OF ANY INDEMNITEE. THE ONLY LIABILITIES WITH RESPECT TO
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WHICH TENANT'S OBLIGATION TO INDEMNIFY THE INDEMNITEES DOES NOT
APPLY IS WITH RESPECT TO LIABILITIES RESULTING SOLELY FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE. IF ANY ACTION OR
PROCEEDING SHALL BE BROUGHT BY OR AGAINST ANY INDEMNITEE IN
CONNECTION WITH ANY SUCH LIABILITY OR CLAIM, TENANT,ON NOTICE FROM
LANDLORD, SHALL DEFEND SUCH ACTION OR PROCEEDING, AT TENANT'S
EXPENSE, BY OR THROUGH ATTORNEYS REASONABLY SATISFACTORY TO
LANDLORD. THE PROVISIONS OF THIS PARAGRAPH SHALL APPLY TO ALL
ACTIVITIES OF TENANT WITH RESPECT TO THE LEASED PREMISES, BUILDING OR
COMPLEX, WHETHER OCCURRING BEFORE OR AFTER THE COMMENCEMENT
DATE OF THE LEASE TERM, OR BEFORE OR AFTER THE EXPIRATION OR
TERMINATION OF THIS LEASE. TENANT'S OBLIGATIONS UNDER THIS
PARAGRAPH SHALL NOT BE LIMITED TO DAMAGES, COMPENSATION, OR
BENEFITS PAYABLE UNDER INSURANCE POLICIES, WORKERS' COMPENSATION
ACTS, DISABILITY BENEFIT ACTS, OR OTHER EMPLOYEES BENEFIT ACTS. THE
TERMS OF THIS PROVISION SHALL SURVIVE THE TERMINATION OF THIS LEASE
TO THE EXTENT ANY SUCH DAMAGE OCCURS PRIOR TO SUCH TERMINATION.
Section 16.2. LIMITATION OF LIABILITY. Any liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease shall be limited to Landlord's interest in the Building,
and Landlord shall not be personally liable for any deficiency. Tenant hereby expressly waives
such liability.
ARTICLE XVII
DEFAULT
Section 17.1. DEFAULT BY TENANT. The occurrence of any one or more of the following
events ("Event(s)of Default")shall be a default and breach under this Lease by Tenant:
(a) The failure by Tenant to timely make payment of any sum to be paid by Tenant under this
Lease, and the continuation of such failure for fifteen (15)days after delivery of written notice to
Tenant.
(b) The failure by Tenant to perform any of the other covenants or conditions which Tenant
is required to observe and to perform pursuant to the terms of this Lease,including but not limited
to the Rules and Regulations listed in Exhibit D and the continuation of such failure for fifteen
15)days after delivery of written notice to Tenant.
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(c) The vacating or abandonment of the Leased Premises by Tenant.
(d) The making by Tenant or any guarantor of this Lease of any general assignment orgeneral
arrangement for the benefit of creditors;or the filing by or against Tenant or any guarantor of this
Lease of a petition or order for relief under any laws relating to bankruptcy or insolvency(unless,
in the case of a petition filed against Tenant or any guarantor of this Lease, the petition is
dismissed within sixty (60) days);or the appointment of a trustee, custodian, or receiver to take
possession of substantially all of Tenant's assets or the assets of any guarantor of this Lease or of
Tenant's interest in this Lease where possession is not restored to Tenant within thirty(30) days;
or the attachment, execution, or judicial seizure of substantially all of Tenant's assets or of
Tenant's interest in this Lease unless discharged within thirty(30)days.
(e) Sale, conveyance, mortgage, pledge, assignment, sublease, or other transfer or
encumbrance,or any attempt to do so, in violation of Article X.
(f) Tenant's failure to deliver the estoppel certificate required under Section 12.3, or any
written instrument required under Section 12.1 within the time required.
(g) A default under or the revocation of any guaranty of Tenant's obligations under
this Lease.
The defaults specified in Subparagraph (c) through (g) shall not be curable by Tenant.
Section 17.2 REMEDIES FOR DEFAULT. Upon the occurrence of an Event of Default as
specified in Section 17.1 above, Landlord may,at any time thereafter,with or without notice or demand:
(1) terminate this Lease, in which event Tenant shall immediately surrender possession of
the Leased Premises to Landlord;
(2) enter upon and take possession of the Leased Premises and expel or remove Tenant,and
any other occupant,therefrom with or without having terminated the Lease;
(3) alter the locks and other security devices at the Leased Premises(to the extent permitted
by law);and
(4) exercise any right or remedy available to Landlord at law or in equity for the breach of
this Lease.
(a) The exercise by Landlord of any one or more remedies hereunder granted or otherwise available
following an Event of Default shall not be deemed to be an acceptance of surrender of the Leased
24
Premises by Tenant, whether by agreement or by operation of law, it being understood that such
surrender can be effected only by the written agreement of Landlord and Tenant.
(b) In the event the Landlord elects to enter upon and/or take possession of the Leased Premises,
Landlord shall not be liable to prosecution or any claim for damages therefore.
(c) In the event Landlord elects to terminate this Lease or to repossess the Leased Premises by reason
of an Event of Default,then,notwithstanding any such termination or repossession,Tenant shall be liable
for and shall pay to Landlord liquidated damages in the amount set forth on Exhibit E attached hereto
and incorporated herein for all purposes. The above-described remedy shall be Landlord's sole and
exclusive remedy under this Lease. Landlord and Tenant have made this provision for liquidated damages
because it would be difficult to calculate, on the date hereof, the amount of actual damages for such
breach,and because this sum represents reasonable compensation to the Landlord for such breach.
(d) Intentionally Omitted.
(e) If Tenant should fail to make any payment or cure any Event of Default hereunder within the time
herein permitted, Landlord, without being under any obligation to do so and without thereby waiving
such Event of Default, may make such payment and/or remedy such Event of Default for the account of
Tenant (and enter the Leased Premises for such purpose without liability for damages or trespass), and
thereupon Tenant shall be obligated to, and hereby agrees to, pay Landlord, upon demand, all costs,
expenses and disbursements (including reasonable attorneys' fees) incurred by Landlord in taking such
remedial action,together with interest thereon from the date same are paid to Landlord until repaid at
Frost Bank's prime lending rate plus five (5) percentage points (i.e., 500 basis points) not to exceed the
maximum lawful rate and Land lord shall not be liable for any damages suffered by Tenant from such
action.
(f) No re-entry or taking possession of the Leased Premises by Landlord shall constitute an election by
Landlord to terminate this Lease, unless a written notice of such intention is given to Tenant.
Notwithstanding any such re-entry or taking possession, Landlord may at any time thereafter terminate
this Lease for any then continuing default. Landlord's acceptance of Base Rental following an Event of
Default hereunder shall not be construed as a waiver of such Event of Default. No waiver by Landlord of
any breach of this Lease shall constitute a waiver of any other violation or breach of any of the terms
hereof. Forbearance by Landlord to enforce one or more of the remedies herein provided upon a breach
hereof shall not constitute a waiver of any other breach of the Lease.
(g) No provision of this Lease shall be deemed to have been waived by Landlord unless such waiver is in
writing and signed by Landlord, nor shall any custom or practice which may develop between the parties
in the administration of the terms of this Lease be construed to waive or lessen Landlord's right to insist
upon strict performance of the terms of this Lease. The rights granted to Landlord in this Lease shall be
cumulative of every other right or remedy which Landlord may otherwise have at law or in equity or by
statute and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.
25
ARTICLE XVIII
GENERAL PROVISIONS
_.Section 18.1. SIGNS. Tenant shall not place any sign on the Leased Premises, the Building, or
the Complex, or which is visible from anywhere outside of the Leased Premises, without Landlord's prior
written consent, which approval shall not be unreasonably withheld; provided, however, no Tenant
signage may be affixed, installed, or allowed on the City Building. Tenant may install two (2) signs of a
size and type approved by Landlord on the exterior of the Bank Building in locations reasonably acceptable
to Landlord; the existing sign attached to the Bank Building and shown on Exhibit G hereto is hereby
approved by Landlord. Landlord shall remove the Tenant signage affixed to the roof of the City Building
before , m , 2021, and Tenant shall pay Landlord One Thousand and No/100 Dollars
($1,000.00) for such removal. If Tenant fails to have all other signage not permitted by this Section 18.1
removed from the exterior of the City Building and the Bank Building, then Landlord may, without
requirement of notice, cause such signage to be removed and Tenant shall pay costs for such removal
within 30 days of receipt of invoice.
Section 18.2 NAME OF BUILDING. Landlord reserves the right to change the name and address
of the Building from time to time as Landlord shall deem proper without liability to Tenant. Tenant shall
not, without the prior written consent of Landlord, use the name of the Building for any purpose other
than as the address of the business to be conducted by Tenant in the Leased Premises , nor shall Tenant
do or permit the doing of anything in connection with Tenant's business of advertising which in the
judgment of Land lord may reflect unfavorably on Landlord or the Building or confuse or mislead the
public as to any apparent connection or relationship between Land lord,the Building, and the Tenant.
Section 18.3. OBSERVANCE OF RULES AND REGULATIONS. Tenant and its servants, employees,
agents, visitors, and licensees shall observe faithfully and comply strictly with the rules and regulations
attached to this Lease as Exhibit D. Landlord shall at all times have the right to make changes in and
additions to such rules and regulations.Any failure by Landlord to enforce any of the rules and regulations
now or hereafter in effect, either against Tenant or any other tenant in the Building, shall not constitute
a waiver of any such rules or regulations. Landlord shall not be responsible to Tenant for the failure or
refusal by any other tenant,guest, invitee, visitors, or occupant of the Building to comply with any of the
rules and regulations. In the event of any conflict between Exhibit D and the terms of this Lease,the terms
of the Lease shall prevail.
Section 18.4. ATTORNEYS' FEES. In the event Tenant defaults in the performance of any
of the terms, conditions, or agreements contained in this Lease and the Landlord places the enforcement
of this Lease,or any part hereof,or the collection of any rent or recovery of the possession of the Leased
Premises, in the hands of an attorney who files suit upon the Tenant, the Tenant agrees to pay the
Landlord's reasonable attorneys'fees provided Landlord is the prevailing party in such suit.
Section 18.5. NON-WAIVER. Failure of Landlord to declare any Event of Default immediately
upon occurrence thereof, or delay in taking any action in connection therewith, shall not waive such
26
Event of Default, but Landlord shall have the right to declare any Event of Default at any time and take
such action as might be lawful or authorized hereunder,either at law or in equity.
Section 18.6. NOTICES. Each provision of this Lease, or of any applicable governmental
laws, ordinances, regulations, rules and other requirements with reference to the sending, mailing or
delivery of any notice, or with reference to the making of any payment by Tenant to Landlord, shall be
deemed to be complied with when and if the following steps are taken:
(a) All rent and other payment required to be made by Tenant to Landlord hereunder shall
be payable to Landlord in Nueces County,Texas,at the address set forth below, or at such other address
as Landlord may specify from time-to-time by written notice delivered in accordance herewith;
(b) Any notices required or permitted to be given under this Lease shall be in writing and
shall be deemed given if delivered by hand,sent by recognized overnight courier(such as Federal Express),
transmitted via facsimile transmission or mailed by certified or registered mail, return receipt requested,
in a postage pre-paid envelope, and addressed as follows:
Tenant:
Frost Bank
111 W. Houston Street
San Antonio,TX 78205
Attn: Corporate Real Estate Department
Telephone No.: (210)220-4187
Fax No.: (210) 220-5036
With a copy to:
111 W. Houston Street
San Antonio,TX 78205
Attn: Legal Department
Telephone No.: (210)220-4310
Fax No.: (210) 220-4941
Landlord:
City of Corpus Christi
P.O. Box 9277
Corpus Christi,Texas 78469-9277 Attn: City Attorney
Telefax No.:(361)826-3239
Notices personally delivered or sent by overnight courier shall be deemed given on the date of
receipt, notices sent via facsimile transmission shall be deemed given upon transmission and notices sent
via certified mail in accordance with the foregoing shall be deemed given when deposited in the United
27
States Mails.
Section 18.7. PRESUMPTIONS. This Lease shall be construed without regard to any presumption
or other rule requiring construction against the party drafting the document. It shall be construed neither
for nor against Landlord or Tenant, but shall be given reasonable interpretation in accordance with the
plain meaning of its terms and the intent of the parties.
Section 18.8. LEGAL INTERPRETATION. This Lease and the rights and obligations of the parties
hereto shall be interpreted, construed and enforced in accordance with the laws of the State of Texas.
The determination that one or more provisions of this Lease is invalid,void,illegal or unenforceable shall
not affect or invalidate the remainder.All obligations of either party requiring any performance after the
expiration of the Lease Term shall survive the expiration of the Lease Term and shall be fully enforceable
in accordance with those provisions pertaining thereto.
SECTION 18.9. AMENDMENTS; BINDING EFFECT. This Lease may not be altered, changed or
amended,except by instrument in writing signed by both parties hereto.The terms,provisions,covenants
and conditions contained in this Lease shall apply to, inure to the benefit of, and be binding upon the
parties hereto, and upon their respective successors in interest and legal representatives, except as
otherwise herein expressly provided.
SECTION 18.10. NUMBER AND GENDER; CAPTIONS. The pronouns of any gender shall include
the other genders, and either the singular or the plural shall include the other. The section headings
contained in this Lease are for convenience only and shall not enlarge or limit the scope of meaning of
the various and several sections hereof.
SECTION 18.11.AUTHORITY;JOINTAND SEVERAL LIABILITY.If Tenant signs as a corporation,each
of the persons executing this Lease on behalf of Tenant represents and warrants that Tenant is a duly
organized and existing corporation, that Tenant has and is qualified to do business in Texas, that the
corporation has full right and authority to enter into this Lease,and that all persons signing on behalf of
the corporation are authorized to do so by appropriate corporation actions. If there be more than one
Tenant,the obligations hereunder imposed upon Tenant shall be joint and several.If there be a guarantor
of Tenant's obligations hereunder,the obligations hereunder imposed upon Tenant shall be the joint and
several obligations of Tenant and such guarantor and Landlord need not first proceed against the Tenant
hereunder before proceeding against such guarantor, nor shall any such guarantor be released from its
guaranty for any reason whatsoever, including without limitation, in case of any amendments hereto,
waivers hereof or failure to give such guarantor any notice hereunder.
SECTION 18.12. FORCE MAJEURE. Whenever a period of time is herein prescribed for action to
be taken by Landlord, Landlord shall not be liable or responsible for, and there shall be excluded from
the computation for any such period of time, any delays due to strikes, riots, Acts of God, shortages of
28
labor or materials, war, governmental laws, regulations or restrictions, o/ any other cause of any kind
whatsoever which isbeyond the control ofLandlord.
SECTION 18.13. GOVERNING LAW.This Lease shall be governed by and construed in accordance
with the laws ofthe State ofTexas.
SECTION 18.14, CROSS-DEFAULT. In the event that at any time during the Lease Term Tenant is
occupying other space owned by Landlord pursuant toanother lease or leases (referred to herein as
"Other Leases"),then a default underthis Lease shall constitute a default underthe Other Leases and vice
versa.
SECTION 18.15. TIME OFESSENCE. Time isofthe essence inthe performance ofa|| ofthe
obligations hereunder.
`
SECTION 18.15- NO PARTNERSHIP. Nothing herein contained shall be deemed or construed
by the parties hereto, nor by a third party, to be aoreation of the relationship nfprincipal and
agent, or of partnership, or of joint venture between the parties. Neither computation of rent
nor any other provision contained herein, nor any acts of the parties hereto, shall he deemed
to create any relationship between the parties hereto other than the relationship of Landlord
and Tenant.
SECTION 18.17' RE[ORDAT|ON. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of Landlord.
Section 18.18. INTENTIONALLY OMITTED.
SECTION 18.19. MEDIATION OF DISPUTES. In the case of any and all claims or disputes
arising between or among Landlord and Tenant, if such parties are unable to resolve the matter
within a reasonable period of time, each hereby agrees to submit such claim or dispute to
mediation in accordance with the rules and procedures set forth in Chapter 1S4ofthe Texas
Civil Practice and Remedies Code. as amended from time totime. Landlord and Tenant hereby
agree that all such claims and/or disputes will be submitted to mediation before any lawsuit io
filed, or other formal action is taken, to resolve such claim or dispute by or through the
litigation or arbitration processes; provided, however, that the provisions hereof shall not
prevent any party from filing a lawsuit, or taking any other action, as may be necessary to
preserve the legal rights of that party from impairment or extinction under any applicable
statute of limitation, or other similar statute or rule of law. Landlord and Tenant hereby agree
togive the other written notice ofany claim ordispute which Landlord orTenant desire tosubmit
to mediation under the procedures contained herein. Upon the giving of such written notice,
29
Landlord and Tenant shall first seek to agree on the person or persons who shall function as the
mediator or mediators in connection with the mediation proceeding. If, after a reasonable
period of time, Landlord and Tenant are unable to agree on o suitable mediator, theyshaU
County,the judge of the Presiding Court of Travis Coun� Texas, to appoint a duly qualified
mediator to conduct the mediation. Landlord and Tenant shall bear equally the fees charged
by the mediator and other associated costs of the mediation process. In connection with any
such mediation, Landlord and Tenant hereby agree to make agood faith effort to settle their
disputes and resolve any claims through the mediation process. if, however, after a good faith
effort to resolve any such dispute or claim through mediation, nn settlement, or resolution is
achieved, Landlord and Tenant shall be free to initiate litigation or to take whatever other action
they may desire or deem appropriate in the circumstances.
SECTION 18.20. WAIVER OFJURY TRIAL. Tenant hereby waives any and all rights
which it may have to request ajun/ trial in any proceeding at |avx or in equity in any court of
competent jurisdiction.
SECTION 18.21. BROKERS. Tenant represents and warrants that it has dealt
with no broker, agent or other person other than Cobb-Lundquist Realtors, Inc. in connection
with this Lease and that no broker, agent or other person other thanCobb'Lundquiot Realtors,
Inc. brought about the execution of this Lease. Tenant agrees to indemnify and hold Landlord
harmless from and against any claim by any broker, agent, or other person other than Cobb-
Lundquist Realtors, Inc. claiming a commission or other form of compensation by virtue of
having dealt with Tenant with regard to this Lease. The provisions of this Section 18.21 shall
survive the termination ufthis Lease.
SECTION 18'22' WAIVER OF LIEN BY TENANT. Tenant shall have no right, and Tenant hereby
expressly waives and relinquishes all rights which Tenant might otherwise have,to claim any nature of
lien against the Building or to withhold, deduct from, or offset against Base Rental, additional rent or
other sums tobepaid toLandlord byTenant hereunder.
SECTION 10.23. SUBMISSION OF LEASE. The submission of this Lease to Tenant or its broker,
agent, or attorney for review or signature does not constitute an offer to Tenant to lease the Leased
Premises or grant an option to lease the Leased Premises.This document shall not be binding unless and
until itioexecuted and delivered byboth Landlord and Tenant.
SECTION 10.24. INTENTIONALLY OMITTED.
SECTION 18.25' OTHER PROVISIONS. [AN[)bOR[} AND TENANT EXPRESSLY DISCLAIM
ANY IMPLIED WARRANTY THATTHE PREMISES ARE SUITABLE FOR TENANT'S INTENDED
COMMERCIAL PURPOSE, AND TENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT
30
DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY
LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT
ABATEMENT, SETOFF OR DEDUCTION , NOTWITHSTANDING ANY BREACH BY LANDLORD
OF ITS DUTIES OR OBLIGATIONS HEREUN DER, WHETHER EXPRESS OR IMPLIED.
SECTION 18.26. EXHIBITS AND SCHEDULES. The following exhibits and Schedules are
attached hereto and incorporated herein and made a part of this Lease for all purposes:
Exhibit A-1- Legal Description of Tract 1
Exhibit A-2- Leased Premises
Exhibit B—Intentionally Omitted
Exhibit C-Commencement and Termination Agreement
Exhibit D-Rules and Regulations
Exhibit E-Cancellation Fee
Exhibit F-Tenant's Insurance
Schedule 1-Approved Leasehold Improvements
In the event a provision of an Exhibit, Schedule or Addendum, if any, attached hereto shall be
inconsistent with a provision in the body of this Lease,the provision as set forth in the Lease shall control.
SECTION 18.27. ENTIRE AGREEMENT.WITH RESPECT TO THE SUBJECT MATTER OF THIS LEASE,
THIS LEASE AND ANY CONTEMPORANEOUS WORK LETTER, ADDENDA OR EXHIBITS
SIGNED BY THE PARTIES, CONSTITUTE THE ENTIRE, COMPLETE AND FINAL EXPRESSION
OF THE AGREEMENT OF THE PARTIES HERETO AND SUPERSEDE ALL PRIOR WRITTEN
AGREEMENTS AND ALL PRIOR AND CONTEMPORANEOUS ORAL AGREEMENTS,
UNDERSTAND INGS AND NEGOTIATIONS. LANDLORD AND TENANT AGREE THAT THERE
ARE AND WERE NO VERBAL OR WRITTEN REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS, OR PROMISES PERTAINING TO THIS
LEASE WHICH ARE NOT INCORPORATED IN WRITING INTO THIS LEASE. LANDLORD AND
TENANT AGREE THAT THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF
MERCHANTABILITY, HABITABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ANY
31
OTHER KIND ARISING UNDER THIS LEASE AND THERE ARE NO WARRANTIES WHICH
EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE.
IN TESTIMONY WHEREOF,the parties hereto have executed this Lease as of the day and yearfirst
above written.
32
LANDLORD'S SIGNATURE PAGE TO LEASE AGREEMENT
LANDLORD:
CITY OF CORPUS CHRISTI
Name: s
Title: . ti °~
Date: Ir— A -\
a
4
J+ so
3]
TENANT'S SIGNATURE PAGE TOLEASE AGREEMENT:
TENANT: FROST BANK, aTexas state bank
Title:
Date:
34
EXHIBIT A-1
TO THE
LEASE AGREEMENT BETWEEN
THE CITY OF CORPUS CHRISTI (LANDLORD)
AND
FROST BANK(TENANT)
LEGAL DESCRIPTION OF TRACT I
LOTS ONE(1),TWO(2),THREE (3), FOUR(4), FIVE (5),SIX(6),SEVEN (7), EIGHT(8), NINE (9),TEN (10),
ELEVENT(11),TWELVE (12),THIRTEEN (13), FOURTEEN (14)AND FIFTEEN (15), BLOCK ONE (1),THE
HIGHLANDS ADDITION,situated in the City of Corpus Christi,Texas,as shown by the map or plat thereof,
recorded in Volume 3, Page 58, Map Records of Nueces County,Texas,to which reference is here made
for all pertinent purposes;
SAVE AND EXCEPT, HOWEVER,the South Ten Feet(S.10')of Lots 1&2, Block 1,The Highlands Addition,
conveyed to the City of Corpus Christi by Deed dated February 14, 1927 for the widening of Leopard
Street, recorded under Clerk's File No.45768,Volume 179, Page 59,Deed Records of Nueces County,
Texas;and further
SAVE AND EXCEPT, HOWEVER,the South Ten Feet(S. 10')of Lots 3,4&5, Block 1,The Highlands
Addition, conveyed to the City of Corpus Christi by Deed dated December 10, 1926,for the widening of
Leopard Street, recorded under Clerk's File No.45762,Volume 179, Page 55, Deed Records of Nueces
County,Texas;and further
SAVE AND EXCEPT, HOWEVER,the South Ten Feet (S. 10')of Lots 6&7, Block 1,The Highlands Addition,
conveyed to the City of Corpus Christi by Deed dated December 9, 1926,for the widening of Leopard
Street, recorded under Clerk's File No.45763,Volume 179, Page 56, Deed Records of Nueces County,
Texas.
35
EXHIBIT A-2
LEASED PREMISES
J
IST
i
T
(1
n
b
SJ
F t
W 1
FLOOR PLAN
LE 2ND FLOOR PLAN LE
� -
'diw
36
EXHIBIT B
TO THE
LEASE AGREEMENT BETWEEN
THE CITY OF CORPUS CHRISTI (LANDLORD)
AND
FROST BANK(TENANT)
INTENTIONALLY OMITTED
37
EXHIBIT C
TO THE
LEASE AGREEMENT BETWEEN
THE CITY OF CORPUS CHRISTI (LANDLORD)
AND
FROST BANK(TENANT)
COMMENCEMENT AND TERMINATION AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into this the day of
20_, by and between THE CITY OF CORPUS CHRISTI ("Landlord")and FROST
BANK,a Texas state bank("Tenant").
WITNESSETH
WHEREAS, Landlord and Tenant entered into a Lease Agreement dated for certain
real property(the"Leased Premises") located in the City of Corpus Christi,County of Nueces,State of
Texas(the"Lease"); and
WHEREAS, it is the desire and intent of Landlord and Tenant to clearly define the terms of said
Lease.
NOW THEREFORE, it is agreed by and between Landlord and Tenant that:
1. The Commencement Date of the Lease is
2. The primary Lease Term commenced on and shall terminate at 11:59 p.m.
Corpus Christi,Texas time,on
3. The Lease is now in full force and effect and all terms and conditions of the Lease are hereby
ratified and confirmed.
Landlord and Tenant agree that this document will not be recorded in any public records
including the real estate records of the county where the Leased Premises are located.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement as of the day and
year first above written.
LANDLORD:
THE CITY OF CORPUS CHRISTI
By:
Name:
Title:
]8
TENANT
FROST BANK, aTexas state bank
By:
Name:
Title:
39
EXHIBIT D
TO THE
LEASE AGREEMENT BETWEEN
THE CITY OF CORPUS CHRISTI (LANDLORD)
AND
FROST BANK(TENANT)
RULES AND REGULATIONS
1. Sidewalks,doorways,vestibules, halls,stairways and similar areas shall not be obstructed
by tenants or their officers, agents, servants, and employees,or used for any purpose other than ingress
and egress to and from the Leased Premises and for going from one part of the Building to another part
of the Building.
2. The Building toilet rooms, urinals, wash bowls, and other apparatus shall not be used for
any purpose other than that for which they were constructed and no foreign substance of any kind
whatsoever shall be thrown therein and the expense of any breakage,stoppage or damage resulting from
the violation of this rule shall be borne by the tenant who, or those employees or invitees, shall have
caused it.
3. Except as set forth in the Lease,Tenant shall not paint,display, inscribe,maintain,or affix
any sign, picture, advertisement, notice, lettering, or direction on any part of the outside or inside of the
Building, or on any part of the inside of the Leased Premises which can be seen from the outside of the
Leased Premises, except on hallway doors of the Leased Premises, and then only building standard
graphics approved by Landlord. This is to include window coverings visible from the exterior, unless
Landlord gives specific written approval. Landlord reserves, without liability or notice to tenants, the
right to remove at tenant's expense all signage which violates this rule.
4. Intentionally Omitted.
5. The Leased Premises shall not be used for conducting any barter, trade, or exchange of
goods or sale through promotional give-away gimmicks or any business involving the sale of second-hand
goods, insurance salvage stock, or fire sale stock, and shall not be used for any auction or pawnshop
business, any fire sale, bankruptcy sale, going-out-of-business sale, moving sale, bulk sale, or any other
business which, because of merchandising methods or otherwise, would tend to lower the first-class
character of the Building.
6. Tenants shall not do anything,or permit anything to be done,in or about the Building,or
bring or keep anything therein, that will in any way increase the possibility of fire or other casualty or
obstruct or interfere with the rights of,otherwise injure or annoy,other tenants,or do anything in conflict
with valid pertinent laws, rules or regulations or any governmental authority.
40
7. Tenants shall not place a load upon any floor of the Leased Premises which exceeds the
floor load per square foot which such floor was designated to carry or which is allowed by applicable
building code.
8. Landlord shall have the power to prescribe the weight and position of safes or other heavy
equipment which may overstress any portion of the floor.All damage done to the Building by the improper
placing of heavy items which overstress the floor will be repaired at the sole expense of the Tenant.
9. A tenant shall notify the Landlord when safes or other equipment are to be taken into or
out of the Building. Moving of such items shall be done under the supervision of the Landlord, after
receiving written permission from Landlord.
10. All entrance doors to the Leased Premises shall be left locked and all windows shall be left
closed by Tenant when the Leased Premises are not in use. Corridor doors shall not be left open at any
time.
11.. Intentionally Omitted.
12. Each tenant shall cooperate with Building employees in keeping the Leased Premises neat
and clean and operating efficiently.
13. No dust, rubbish, or litter shall be swept from any room into any of the corridors, except
under the direction of the janitor nor shall the same, or anything else, be thrown or emptied from any of
the windows or elevator shafts of the Building,and no ashes, coffee grinds, dirt or other rubbish shall be
emptied into the water closets. Tenants shall provide adequate waste and rubbish receptacles,such as
plastic bags,to be placed in their own waste and rubbish receptacle to accommodate the disposal of ashes
and coffee grinds.Cigarette butts or wrappers will be placed in trash receptacles provided by the Landlord
in public designated smoking areas.
14. Intentionally Omitted.
15. Tenants shall not make or permit any improper noises in the Building, or otherwise
interfere in any way with other tenants,or persons having business with them.
16. Except forthe equipment approved by Landlord in Section 9.1 of the Lease,no equipment
of any kind shall be operated on the Leased Premises that could in any way annoy any other tenant in the
Building without written consent of Landlord.
17. Computer equipment and mechanical equipment belonging to any tenant which cause
noise and/or vibration that may be transmitted to the structure of the Building or to any leased space so
as to be objectionable to Landlord or any other tenants in the Building shall be placed and maintained by
such tenants, at such tenant's expense, in settings of cork, rubber, or spring type noise and/or vibration
eliminators sufficient to eliminate vibration and/or noise.
41
18. Tenant shall not place, install, oroperate onthe Leased Premises nr in any part of the
Building, any engine,stove, appliance, ormachinery, orconduct mechanical operations orcook thereon
or therein, or place or use in or about the Leased Premises any explosives,gasoline, kerosene, oil, acids,
caustics, or any other inflammable,explosive, or hazardous material without the prior written consent of
Landlord.
19. Landlord shall not be liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. in case of invasion, mob, riot, public excitement, or other
commotion, Landlord reserves the right to prevent access to the Building during the continuance of the
same byclosing the doors orotherwise for the safety ofthe tenants, and protection ofthe Building and
property inthe Building.
20. Intentionally Omitted.
31. If any governmental license or permit shall be required for the proper and lawful conduct
ofatenant's business,such tenant, before occupying the Leased Premises, shall procure and maintain
such license or permit and submit it for Landlord's inspection and shall at all times comply with the terms
ufany such license orpermit.
22. Landlord reserves the right to require Tenant to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who
shall in any manner do any act in violation of any of the rules of the Building.
23. No birds,animals, bicycles,or motorized vehicles shall be brought into or kept in or about
the Building, except seeing-eye dogs and motorized wheelchairs.
24. Landlord has provided electrical outlets for use bythe Tenant in the operation of Tenant's
computer, typewriters, adding machines, and such other office machines requiring 110 voltage and all
other uses of electricity are prohibited unless otherwise authorized by Landlord, and Tenant shall be
responsible for any and all damage caused by the prohibited use of electricity. Any use of electrical
extension cords will comply with applicable Building Code Regulations with respect to length and type of
service.
35. Intentionally Omitted.
26. Intentionally Omitted.
27. Tenant is cautioned in purchasing furniture thatthe size is limited to such as can be placed
on the elevator and will pass through the doors of the offices. Large pieces should be made in parts and
set up in the offices. The Landlord reserves the right to refuse to allow to be placed in the Building any
furniture or fittings of any description which do not comply with such conditions.
28. Canvassing, soliciting, and peddling in the Building is prohibited without the written
permission nfLandlord and Tenant shall cooperate toprevent same.
42
29. Intentionally Omitted.
30. Intentionally Omitted.
31.Tenant will not introduce orplace any foreign substance ofany kind such as photographic
fluids, lead substances (i.e., barium), or other chemicals into the plumbing and/or waste disposal of the
Building which results inasurcharge which may becharged tothe Landlord by any city,state, federal,
orother governmental agency for the presence of these substances in the waste disposal.
32. Landlord will not be responsible for any lost or stolen personal property, equipment,
money,orjewelry from Tenant's Leased Premises or public rooms regardless of whether such loss occurs
when the area blocked against entry nrnot.
33. Tenant will not erect,attach,affix, or paint any temporary or permanent sign of any kind
whatsoever at in, or about the exterior or interior of the Leased Premises where such sign or other
display isvisible from the exterior ofthe Leased Premises except asmay have been previously approved
and consented to in writing by Landlord's City Manager or designee City Director of Asset Management,
orexcept fortheexterior signage depicted inExhibit Gtothis Lease. Landlord hereby acknowledges and
agrees that all of Tenant's interior signage that is installed as of May 1, 2021 at, in, or about the interior
of the Leased Premises is acceptable and may remain, and further that such interior signage may be
replaced by Tenant, at Tenant's sole cost and expense,from time to time,to reflect changes in Tenant's
standard signage, including but not limited to changes in the design,font,and/or colors used in Tenant's
signs, and/or changes in the name that Tenant displays on its signage (e.g.,the name could change from
"Frost Bank" to "Frost"). Any Tenant signage attached to the exterior of the Building, tothe interior nf
the City Building, or at, in or about the Complex as of May 1,2021 that is not permitted and approved or
deemed approved under the terms of this Lease must be removed by Tenant at Tenant's sn{p cost and
expense prior toJuly I, JU21.
34. Intentionally Omitted.
35. No room or rooms shall be occupied as sleeping or lodging apartments at anytime;
provided, however, Tenant may use the Leased Premises for sleeping while the Tenant's Emergency
Operations Center is activated during a crisis situation,as needed, but not otherwise.
36. Personal property left on the Leased Premises at the expiration of the Lease may be
stored or removed from the Leased Premises by Landlord at the full risk, cost and expense of the Tenant.
Landlord shall in no event be responsible for the value preservation orsafekeeping thereof. Any time
after ten (10) days from the termination of this Lease,the Landlord shall sell any such personal property,
and it shall be entitled to retain from the proceeds the amount of rent due, together with the cost of
storage and the expense ofthe sale.
37. Landlord reserves the right to rescind any of these rules and make such other and further
rules and regulations as in the reasonable judgment of Landlord shall from time to time be needed forthe
safety, protection, care, and cleanliness of the Building, the operation thereof,the preservation of good
43
order therein,and the protection and comfort of its tenants,their agents,employees,and invitees,which
rules when made and notice thereof given to a Tenant shall be binding upon him in a like manner as if
originally herein prescribed. In the event of any conflict, inconsistency, or other differences between the
terms and provisions of these rules and regulations, as now or hereafter in effect and the terms and
provisions of any lease now or hereafter in effect between Land lord and any tenant in the Building,
Landlord shall have the right to rely on the terms or provisions in either such lease or such rules and
regulations which is most restrictive on such tenant and most favorable to Landlord. Notwithstanding
anything to the contrary contained herein, no changes by Landlord in any rules and regulations with
respect to the Building or Leased Premises shall materially increase Tenant's duties and obligations
hereunder or unreasonably reduce or restrict the estate, rights or benefits hereof.
44
EXH|BIT E
TOTHE LEASE AGREEMENT BETWEEN
THE CITY OFCORPUS CHRISTI (LANDLORD)AND
FROST BANK(TENANT)
CANCELLATION FEE/LIQUIDATED DAMAGES
The Cancellation Fee shall equal the number of months remaining in the Lease Term as of the effective
date of the termination of this Lease,without regard to extension options, multiplied by the monthly
Base Rental, i.e,$3,SSS.92. For example, ifthe effective date ofthe termination ofthis Lease were 6
months prior to the expiration of the Lease Term,the Cancellation Fee would be an amount equal to(6 x
$3'555.92=$21,3]5.92).
�
45
EXH|BIT F
TOTHE LEASE AGREEMENT BETWEEN
THE CITY OFCORPUS CHRISTI (L4NDLORD)AND
FROST BANK(TENANT)
TENANT'S INSURANCE REQUIREMENTS
i TENANT'S LIABILITY INSURANCE
A. Tenant must not commence work under this agreement until all insurance required hos been
obtained and such insurance has been approved by the City. Tenant must not allow any
subcontractor Agency to commence work until all similar insurance required of any subcontractor
Agency has been obtained.
B. Tenant must furnish to the City's Risk Manager and Contract Administer one (1) copy of
Certificates of Insurance (COI) with applicable policy endorsements ohuvvinQ the following
minimum coverage by an insurance company(s) acceptable to the City's Risk Manager. The City
must be listed as an additional insured on the General liability and Auto Liability policies by
endorsement, and a waiver of subrogation is required on all applicable policies. Endorsements
must be provided with COL Project name and or number must be listed in Description Box of COL
46
PROPERTY INSURANCE Tenant, at their own expense, shall be responsible for
insuring all owned, leased or rented personal property.
C. in the event of accidents of any kind related hothis agreement, Tenant must furnish the Risk
Manager with copies of all reports of any accidents within 10 days of the accident.
U. ADDITIONAL REQUIREMENTS
A. Applicable for paid employees, Tenant must obtain workers' compensation coverage through a
licensed insurance company. The coverage must be written on a policy and endorsements
approved bythe Texas Department ofInsurance. The workers'compensation coverage provided
must be in an amount sufficient to assure that all workers' compensation obligations incurred by
the Tenant will bepromptly met.
B. Tenant shall obtain and maintain in full force and effect for the duration of this Contract,and any
extension hereof, at Tenant's sole expense, insurance coverage written on an occurrence basis,
by companies authorized and admitted to do business in the State of Texas and with an A.M.
Best's rating ofno less than A'VII.
C. Tenant shall be required to submit a copy of the replacement certificate of insurance to City at
the address provided below within 10 days of the requested change.Tenant shall pay any costs
incurred resulting from said changes. All notices under this Article shall be given to City at the
following address:
City ofCorpus Christi
Attn: Risk Manager
P.O. Box 9277
Corpus Christi,TX78469'9277
D. Tenant agrees that with respect to the above required insurance, all insurance policies are to
contain wrbeendorsed tocontain the following required provisions:
° List the City and its officers, officials, employees, volunteers, and elected representatives as
additional insured by endorsement, ayrespects operations, completed operation and activities
of,or on behalf of,the named insured performed under contract with the City,with the exception
nfthe workers' compensation policy;
* Provide for an endorsement that the"other insurance"clause shall not apply to the City of Corpus
Christi where the City isanadditional insured shown onthe policy;
° Workers' compensation and employers' liability policies will provide a waiver ofsubrogation in
favor ofthe City; and
47
w
Provide thirty (30) calendar days advance written notice directly to City of any suspension,
cancellation, non-renewal ormaterial change incoverage, and not less than ten (10) calendar
days advance written notice for nonpayment ofpremium,
E. Within five (5) calendar days of a suspension, cancellation, or non-renewal of coverage,Tenant
shall provide a replacement Certificate of Insurance and applicable endorsements to City. City
shall have the option to suspend Tenant's performance should there be a lapse in coverage at any
time during this contract. Failure to provide and to maintain the required insurance shall
constitute material breach ofthis contract.
F. In addition to any other remedies the City may have upon Tenant's failure to provide and maintain
any insurance or policy endorsements to the extent and within the time herein required,the City
shall have the right to order Tenant to remove the exhibit hereunder, and/or withhold any
payment(s)if any,which become due to Tenant hereunder until Tenant demonstrates compliance
with the requirements hereof.
G. Nothing herein contained ohoU be construed as limiting in any way the extent to which Tenant
may be held responsible for payments of damages to persons or property resulting from Tenant's
orits subcontractor's performance ofthe work covered under this agreement.
H. It is agreed that Tenant's insurance shall be deemed primary and non-contributory with respect
to any insurance orself insurance carried by the City ofCorpus Christi for liability arising out of
operations under this agreement.
i It is understood and agreed that the insurance required is in addition toand separate from any
other obligation contained inthis agreement.
48
EXHIBIT G
TO THE LEASE AGREEMENT BETWEEN
THE CITY OF CORPUS CHRISTI (LANDLORD)AND
FROST BANK (TENANT)
APPROVED BANK BUILDING SIGNAGE
r'/li raJ Mfr ✓fi r/l��r�Jf ,� 5 , ,i Iv��j�r d 7(��`!a/r,�` r , � � U plf i
rr,:. rl��,�i�r�r�(�., 1�� „^�q/,i"�i1�� /'i/1 �r�s�lti,�f r✓f r ,, tri r ,.. �.`r �N� �";� I 1 f ,,�, t
1.r lJr� i,/ !/tirrj!�� '!�;`rr�/ ✓,,r✓//rl f,�yypp� rr✓r,/ � ���F,,.,� � /r � � r,1 rrr �r/'�rr` �^
{:,rlillr/��..,.�r:�,l lvl,� /�5',,,r/ r�'7il r��1�� ��riliN��rfJ✓/r/.",?/rj��/ /,�irr .://}r f1/ 5� 121�
rl /F,� 11 i�// .1 r/,1, ✓/ ,� 1,,1f % ���'c��rl �, IJ//!�',/1//tli, 1/�� J,il t ,
/r�r .,,1.!r...l J ��.,..�Y. %I f. %fid r5�,,,��/ c.,„„ ff "rte/��rl r/ r� it�✓.1(�r!✓�!. f(f fJ'/i�.�'`r i;�.fr�! /I
1?(Yl�f, ,, l,;f i i, d G.r/fj r� n,J/f{ /yr i,i�l�f �vfr I� j�t 1 r rr�t✓�il����;��ry�„�/i/�,}(f" >f�./t�f�r ! r ,
�e. �, l r f }r), f ,rr��+'i�/��t�/ f r/�'l`'�:/,}r�r i�lrir�ipsJd�'�✓/r>�>�� l ,-.l,J� /�i/i/p rr r r
,� i,Q,l S ✓��� rr(����i>' r>��� �/�LI��Y f���i`�y9 ���r'� 1 r� /r� Y/ r r
'r
a
,rod / 1/➢. i li � r/,-
llP USIz /syr i rON :, ;��� f
r ;
�l /rlfr r r//% %��/r/lir�1 r r///f✓ � � r llrrr/f f�,rfr�J/rl s y
Y r/��tlri�jf/�����)f���/'i�fr//r�J r,r ri f�Err rf✓i rrf� r �' rr
fl%•;,l ,,. ,e,,,,,,,,,, ,,, r�lr ri,% ,,,,,, _ ,,,,,.f � ,e�e1)rN✓ fr,.'„ir;,�,e.
The sign shown in the above graphic is hereby approved by the City and may rernain in place Until the
expiration or earlier termination of this Lease. Tenant may, at Tenant's reasonable discretion and from
time-to-time, revise and replace the above sign with a new sign having approximately the carne
dimensions and located in the carne approximate space, to reflect Tenant's then-current logo and
marketing.
49
EXHIBIT H
TO THE LEASE AGREEMENT BETWEEN
THE CITY OF CORPUS CHRISTI (LANDLORD)AND
FROST BANK(TENANT)
RENEWAL OPTION(MARKET)
Tenant is hereby granted the option(s) to renew and extend the Lease Term for two (2)
consecutive terms of sixty (60) months (each, an "Extension Term"), if Tenant gives written notice of its
exercise of the respective option (the "Extension Notice") during the applicable Renewal Option Period
set forth in the Lease. Failure by Tenant to notify Landlord in writing of Tenant's election to extend for
the Extension Term(s) herein granted within the time limits set forth for such exercise shall constitute a
waiver of such Extension Term(s)and the Lease shall terminate upon the expiration of the initial Term (or
then-existing Extension Term, as applicable). In the event Tenant elects to extend for the Extension
Terms(s)as set forth above,the same shall thereupon be binding upon Tenant, as set forth below.
Each Extension Term shall be on the same terms,conditions,and rentals,except(i)no abatements
or other concessions, if any, which applied during the initial Term shall apply to the Extension Term; (ii)
all leasehold improvements within the Premises shall be provided in their then-existing condition (on an
"As Is"basis)at the time the Extension Term commences(subject to any allowance provided in connection
with the Market Basic Rental Rate determination); (iii)Tenant shall have no further right of renewal after
the Extension Term(s)prescribed above,and(iv)subject to the following sentence,the monthly Base Rent
shall be equal to the then-current commercial market rental rate for new leases of comparable space in
the Building and in comparable buildings in the vicinity of the Building for a comparable term (as
confirmed by written statement to Tenant by a representative of Landlord),excluding any leases made by
or to City or other governmental entities for comparable spaces in the Building or in the vicinity of the
Building, taking into account rent abatements, construction costs, and other concessions, all relevant
market factors and the manner, if any, in which the landlords are reimbursed for operating expenses and
taxes (also as confirmed by written statement to Tenant by a representative of Landlord) (the "Market
Basic Rental Rate").
In the event Tenant elects to extend for the Extension Term as set forth above,then with respect
to such extension, Landlord shall, within thirty (30) days thereafter, notify Tenant in writing of the
proposed basic rental rate for the applicable Extension Term (the "Proposed Extension Rental").Tenant
shall within thirty (30) days following delivery of the Proposed Extension Rental by Landlord notify
Landlord in writing of the acceptance or rejection of the Proposed Extension Rental. If Tenant accepts
Landlord's proposal,then the Proposed Extension Rental shall be the basic rental rate in effect during the
Extension Term. Failure of Tenant to respond in writing during the aforementioned thirty(30)day period
shall be deemed a rejection by Tenant of the Proposed Extension Rental. Should Tenant reject Landlord's
Proposed Extension Rental during such thirty (30) day period, then Landlord and Tenant shall negotiate
during the twenty(20)day period commencing upon Tenant's rejection of Landlord's Proposed Extension
Rental(the"Negotiation Period")to determine the basic rental rate for the applicable Extension Term. In
50
the event Landlord and Tenant are unable to agree to a basic rental rate for the applicable Extension Term
during said twenty (20) day period, then, unless Tenant rescinds its Extension Notice by written notice
delivered no later than ten (10) business days after the expiration of Negotiation Period,the basic rental
rate shall be determined by arbitration in accordance with the following provisions:
The determination of the Market Basic Rental Rate will be determined by a panel consisting
of three reputable, Texas licensed real estate brokers with at least ten (10) years current
experience with office buildings in the Corpus Christi metropolitan area (each, an
"arbitrator").Within ten(10)days after initiation of the arbitration process hereunder,each
party shall appoint one arbitrator who shall have no material financial or business interest
in common with the party making the selection and shall not have been employed by such
party for a period of three years prior to the date of selection. If a party fails to give notice
of appointment of its arbitrator within the ten (10) day period provided above,then upon
two (2) business days' notice the other party may appoint the second arbitrator. The
arbitrators selected by the parties shall attempt to agree upon a third arbitrator,who shall
have the same qualifications as set forth above with respect to the first two arbitrators. If
the first two arbitrators are unable to agree on a third arbitrator within ten (10) days after
the appointment of the second arbitrator,then such third arbitrator shall be appointed by
the American Arbitration Association given the above criteria within five(5) business days.
The parties will submit to the three-arbitrator panel the definition of the Market Basic
Rental Rate set forth above, and each arbitrator shall submit his or her determination in a
sealed envelope by the tenth (10th) day following appointment of the last arbitrator, and
any determination not submitted by such time shall be disregarded.The parties shall meet
on said tenth (10th) day (or if it is not a business day, on the first business day thereafter)
at 11:00 a.m. at the office of Landlord, or such other place as the parties may agree and
simultaneously deliver the determinations. If the determinations of at least two of the
arbitrators shall be identical in amount such amount shall be deemed the Market Basic
Rental Rate. If the determination of the three arbitrators shall be different in amount,the
Market Basic Rental Rate shall be determined as follows:
i. if neither the highest or lowest determination differs from the middle
determination by more than ten percent (10%) of such middle
determination,then the Market Basic Rental Rate shall be deemed to be
the average of the three determinations;or
ii. If clause (i) does not apply, then the Market Basic Rental Rate shall be
deemed to be the average of the middle determination and the
determination closest in amount to such middle determination.
The decision of the arbitrators, determined as above set forth, will be final and non-
appealable. Each party shall bear its own expenses in connection with the arbitration and
the costs of its arbitrator, and the cost of the third arbitrator shall be shared equally by
Landlord and Tenant. The costs of all counsel, experts and other representatives that are
retained by a party will be paid by the party which retains such counsel, experts and other
representatives.
51
Upon extension for the Extension Tenn by Tenant and subject to the conditions set forth hereinabove
the Lease shall be extended for the period of such Extension Term,without the necessity of the execution
of any further instrument or document, although if requested by either party, Landlord and Tenant shall
enter into a written agreement modifying and supplementing the Lease in accordance with the provisions
hereof. Any termination of the Lease during the Initial Term shall terminate all further extension rights
hereunder.