Draft of 12/14/06
 
EXHIBIT 10.06

ELEVENTH AMENDMENT TO LEASE AGREEMENT
 
THIS ELEVENTH AMENDMENT TO LEASE AGREEMENT (this “Eleventh Amendment”) is made
and entered into as of the 21st day of December, 2006, by and between TEXAS
TOWER LIMITED, a Texas limited partnership (the “Landlord”), and SANDERS MORRIS
HARRIS INC., a Texas corporation (successor in interest to Sanders Morris Mundy
Inc.) (the “Tenant”).
 
WITNESSETH
 
WHEREAS, by that certain Lease Agreement dated September 22, 1987 (the “Original
Lease”), Landlord leased to Tenant approximately 8,064 square feet of net
rentable area of office space located on Floor 31 (the “Leased Premises”), of
the building now known as JPMorgan Chase Tower, located at 600 Travis Street, in
Houston, Harris County, Texas 77002 (the “Building”), all as is more fully
described in the Original Lease; and
 
WHEREAS, Landlord and Tenant have amended the Original Lease pursuant to the
following instruments: (i) First Amendment to Lease Agreement dated October 26,
1990 (the “First Amendment”); (ii) Second Amendment to Lease Agreement dated
December 1, 1990 (the “Second Amendment”); (iii) Third Amendment to Lease
Agreement dated May 21, 1991 (the “Third Amendment”); (iv) Fourth Amendment to
Lease Agreement dated April 20, 1992 (the “Fourth Amendment”); (v) Fifth
Amendment to Lease Agreement dated July 25, 1994 (the “Fifth Amendment”); (vi)
Sixth Amendment to Lease Agreement dated September 25, 1996 (the “Sixth
Amendment”); (vii) Seventh Amendment to Lease Agreement dated January, 1998 (the
“Seventh Amendment”); (viii) Eighth Amendment to Lease Agreement dated April 27,
2000 (the “Eighth Amendment”); Ninth Amendment to Lease Agreement dated
September 18, 2000 (the “Ninth Amendment”); and Tenth Amendment to Lease
Agreement dated December 7, 2001 (the “Tenth Amendment”) (the Original Lease, as
so amended, is collectively referred to herein as the “Lease”); and
 
WHEREAS, the current area of the Leased Premises is 44,295 square feet of net
rentable area, consisting of 22,222 square feet of net rentable area on Floor 30
of the Building, and 22,073 square feet of net rentable area on Floor 31 of the
Building, respectively (collectively, the “Existing Premises”), and the existing
Lease term is scheduled to expire on November 30, 2007; and
 
WHEREAS, Landlord and Tenant desire to further amend the Lease, to provide,
among other things, for a relocation of the Leased Premises and an extension of
the Lease term, and the parties are willing to agree to such an amendment upon
the terms and conditions as set forth below.
 
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, Ten
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree to
amend, and do hereby amend, the Lease as follows:
 
1.  New Premises. Subject to and upon the terms, provisions and conditions
hereinafter set forth and each in consideration of the duties, covenants and
obligations of the other hereunder and under the Lease, as amended, Landlord
does hereby lease to Tenant and Tenant does hereby lease from Landlord
approximately 67,024 square feet of net rentable area being the entirety of
Floor 57 (22,561 square feet of net rentable area), Floor 58 (22,561 square feet
of net rentable area) and Floor 59 (21,902 square feet of net rentable area) of
the Building (the “New Premises”), as depicted on the floor plans of the New
Premises attached hereto and made a part hereof for all purposes as EXHIBIT A.
 
 

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2.  Term. The term (the “Term”) of the Lease with respect to the New Premises
shall be one hundred twenty (120) months commencing on the later to occur of (i)
December 1, 2007 or (ii) the date of Tenant’s occupancy of the New Premises for
the purpose of conducting business therefrom (the “New Premises Commencement
Date”), and expiring on the last day of the full calendar month from and after
the New Premises Commencement Date (the “Expiration Date”) (unless sooner
terminated, or extended, in accordance with the Lease). Landlord shall use
reasonable efforts to deliver vacant, broom-clean possession of the New Premises
to Tenant on or prior to July 1, 2007 for Tenant’s construction of leasehold
improvements therein. Notwithstanding the foregoing, if Tenant has not occupied
the New Premises by February 1, 2008 (such date to be extended one day for each
day of delay beyond July 1, 2007 that Landlord fails to deliver possession of
the New Premises to Tenant), the New Premises Commencement Date shall be deemed
to be February 1, 2008 (or the applicable extended date). In addition, if
Landlord does not deliver vacant, broom-clean possession of the New Premises to
Tenant on or prior to September 1, 2007, Tenant shall be granted an abatement of
Base Rental and Lessee’s Additional Rental commencing on the New Premises
Commencement Date (as extended as provided above), equivalent to one day for
each day of delay beyond September 1, 2007 that Landlord fails to deliver
possession of the New Premises to Tenant. Promptly following the New Premises
Commencement Date, the parties shall execute a certificate designating the New
Premises Commencement Date and the Expiration Date (in a form provided by
Landlord and reasonably acceptable to Tenant).
 
3.  Net Rentable Area. Article I, Paragraph I of the Lease is hereby amended to
provide that from and after the New Premises Commencement Date, and except as
provided in Section 5 below, the “leased premises” shall be the New Premises and
the “net rentable area” of the leased premises shall be stipulated to be 67,024
square feet.
 
4.  Rent.
 
(a)  Effective as of the New Premises Commencement Date and continuing through
the Expiration Date, Base Rental payable by Tenant pursuant to Article II,
Paragraph 4 of the Lease with respect to the New Premises shall be determined
according to the following schedule:
 
Time Period
 
Base Rental Rate
PSF/NRA
 
Annual Base
Rental
 
Monthly Base
Rental
                 
NPCD - Month 48
 
$
15.50 net
 
$
1,038,872.00
 
$
86,572.67
 
Months 49 - 96
 
$
16.50 net
 
$
1,105,896.00
 
$
92,158.00
 
Months 97 - 120
 
$
17.50 net
 
$
1,172,920.00
 
$
97,743.33
 

 
 
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(b)  The Base Rental rates quoted above are per square foot of net rentable area
within the New Premises per annum. In addition to Base Rental, Tenant shall pay,
with respect to the New Premises, during the Term, Lessee’s Additional Rental,
Lessee’s Forecast Additional Rental, parking rent and all other sums required to
be paid by Tenant pursuant to the terms and conditions of the Lease, in
accordance with such terms and conditions.
 
5.  Continued Occupancy of Existing Premises; Relinquishment of Existing
Premises; Relocation to New Premises. The Base Rental rate payable by Tenant
with respect to the Existing Premises shall decrease to $15.50 per square foot
of net rentable area within the Existing Premises per annum effective as of
December 1, 2007 if Tenant has not vacated the Existing Premises as of such
date. Tenant’s obligation to pay Rent with respect to the Existing Premises
shall terminate on the later to occur of: (i) the New Premises Commencement Date
or (ii) the date Tenant vacates the Existing Premises and occupies the New
Premises. Upon Tenant’s relocation to the New Premises, Tenant shall vacate the
Existing Premises and surrender it to Landlord in broom-clean condition with all
furniture, trade fixtures, equipment and other personal property removed
therefrom. Upon Tenant’s relocation to the New Premises, the Lease and all of
Tenant’s rights, privileges, duties and obligations accruing with respect to the
Existing Premises (other than those that expressly or by their nature survive
the termination of the Lease), including, without limitation, Tenant’s right to
possession and use thereof, shall terminate.
 
6.  Condition of the New Premises. Landlord agrees to deliver possession of the
New Premises on or after July 1, 2007 in its then current condition, i.e., “AS
IS”, “WITH ALL FAULTS” (Landlord’s obligation to perform any required asbestos
remediation work and the Sprinklering Work therein excepted). Tenant’s
possession of the New Premises prior to the New Premises Commencement Date shall
be subject to all terms and conditions of the Lease other than the payment of
rent, which obligation shall not commence until the New Premises Commencement
Date. All proposed leasehold improvements or alterations to the New Premises
shall be subject to Landlord’s prior written approval and shall be constructed
by Tenant (utilizing its own design professionals and contractor(s) reasonably
approved by Landlord) in accordance with and subject to the limitations set
forth in Section 7 of the Sixth Amendment, except that Section 7 hereof shall
govern the only improvements allowance to be provided by Landlord to Tenant in
connection with such leasehold improvements. Landlord and Tenant each agree that
this document constitutes the entire agreement of the parties and there were no
verbal representations, warranties or understandings pertaining to this Eleventh
Amendment. TENANT FURTHER ACKNOWLEDGES AND AGREES THAT LANDLORD DOES HEREBY
DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED
TO THOSE OF FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE EXISTING
PREMISES, THE NEW PREMISES AND/OR THE IMPROVEMENTS LOCATED THEREIN.
 
 
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7.  Improvements Allowance. Landlord hereby agrees to provide Tenant an
allowance in the amount of $38.55 per square foot of net rentable area within
the New Premises (i.e., $2,587,775.20) (the “Improvements Allowance”) for the
design and construction of leasehold improvements in the New Premises. Tenant
shall contract directly for the design and construction of such improvements and
shall engage a third-party construction manager; accordingly, Landlord shall not
impose any construction management fee or plan review fee in connection with
such improvements. The Improvements Allowance may be applied to any costs
directly related to the design and construction of leasehold improvements in the
New Premises including, without limitation, architectural and engineering fees,
costs of construction and installation of improvements in the New Premises,
relocation and installation of telecommunications and computer cabling and
equipment, moving expenses, etc. Landlord acknowledges that Tenant shall stage
the construction in phases, and accordingly, Landlord shall fund the
Improvements Allowance to Tenant or to Tenant’s contractors (at Tenant’s option)
in installments in accordance with Landlord’s reasonable draw requirements
(i.e., presentation of partial (and when applicable, final) lien waivers, ten
percent (10%) retainage, architect’s certifications, reasonable costs back-up
documentation, etc. and an AutoCad diskette of the “as-built” plans and
specifications for the New Premises following final completion of the leasehold
improvements therein, all as more fully set forth in EXHIBIT C to this Eleventh
Amendment). If the costs of Tenant’s improvements to the New Premises exceed the
amount of the Improvements Allowance, Tenant shall pay all such excess costs. If
the costs of Tenant’s improvements to the New Premises do not exceed the amount
of the Improvements Allowances, Landlord shall retain any such savings as its
sole property. During the construction period, Tenant’s contractors shall have
access to the Building’s parking facilities, loading dock, freight elevators,
electrical systems and related facilities in connection with such improvements
at no additional charge to Tenant (other than for parking spaces utilized by
Tenant’s contractors), and scheduling such facilities in advance with Landlord
(i.e., subject to availability of such facilities). Tenant must utilize the
Improvements Allowance on or prior to December 31, 2008 or Tenant’s right to
utilize any remaining portion of the Improvements Allowance shall terminate in
all respects. Landlord will conduct and provide Tenant (at Landlord’s cost
separate from the Improvements Allowance) a copy of an asbestos survey with
respect to the New Premises promptly following the mutual execution of this
Eleventh Amendment.
 
8.  Brokerage Commission. Landlord has agreed to pay CB Richard Ellis, Inc.
(“Tenant’s Broker”) a real estate brokerage commission in connection with this
Eleventh Amendment pursuant to a separate commission agreement by and between
Landlord and Tenant’s Broker. Each party hereby represents and warrants to the
other that it has not employed any other agents, brokers, or other parties in
connection with this Eleventh Amendment, and each party agrees to hold the other
party harmless from and against any and all claims of all other agents, brokers
and/or other such parties claiming a commission by or through it in connection
with this Eleventh Amendment.
 
 
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9.  Parking.
 
(a)  All parking rights previously granted Tenant pursuant to the Lease are
terminated effective as of the New Premises Commencement Date. Effective as of
such date and continuing through the Expiration Date, Tenant’s parking rights
shall be governed by this Section 9.
 
(b)  Landlord hereby agrees to make available to Tenant during the Term (i) for
lease on a “must-take and pay” basis throughout the Term, permits to park
fifteen (15) automobiles (collectively, the “Must-Take Building Parking
Permits”) in reserved parking spaces located in the basement levels of the
Building (the “Building Garage”), (ii) for lease on a month-to-month basis
during the Term (cancelable by either party upon at least thirty (30) days’
prior written notice to the other), permits to park three (3) automobiles (the
“Month-to-Month Building Parking Permits”) in reserved parking spaces in the
Building Garage (iii) for lease on a “must-take and pay” basis throughout the
Term, permits to park (x) sixty-three (63) automobiles in the unassigned parking
areas located throughout the parking garage (the “Block 68 Garage”), in the
building now known as JPMorgan Chase Center located on Block 68, South Side
Buffalo Bayou, City of Houston, Harris County, Texas and (y) fifteen (15)
automobiles in reserved parking spaces in the Block 68 Garage (such
seventy-eight (78) permits being the “Must-Take Block 68 Parking Permits”) and
(iv) for lease at Tenant’s option during the Term, permits to park up to
forty-seven (47) additional automobiles in the unassigned parking areas in the
Block 68 Garage (the “Optional Block 68 Parking Permits”), upon the terms and
conditions of this Section 9. The Must-Take Building Parking Permits and the
Month-to-Month Building Parking Permits shall be collectively referred to herein
as the “Building Parking Permits”. The Must-Take Block 68 Parking Permits and
the Optional Block 68 Parking Permits shall be collectively referred to herein
as the “Block 68 Parking Permits”. The Building Parking Permits and the Block 68
Parking Permits shall be collectively referred to herein as the “Parking
Permits”. The Building Garage and the Block 68 Garage shall be collectively
referred to herein as the “Garage”.
 
(c)  Tenant shall notify Landlord in writing on or prior to August 31, 2007 as
to the number of Optional Block 68 Parking Permits Tenant will lease during that
portion of the Term commencing on the New Premises Commencement Date and
expiring October 31, 2008. If Tenant does not timely provide such notice, Tenant
shall be deemed to have elected to lease all forty-seven (47) Optional Block 68
Parking Permits during such period. Thereafter, on or prior to August 31, 2008
and each August 31 thereafter during the Term, Tenant shall notify Landlord in
writing as to the number of Optional Block 68 Parking Permits Tenant will lease
during the next one year period commencing on November 1 and expiring on the
following October 31. If Tenant fails to provide any such notice, Tenant shall
be deemed to have elected to lease the same number of Optional Block 68 Parking
Permits Tenant is then leasing as of such August 31. In addition, during the
Term of this Lease, Tenant may surrender any Building Parking Permits and/or any
Must-Take Block 68 Parking Permits, but when surrendered, Landlord shall have no
further obligation to make the number of surrendered Parking Permits available
to Tenant for lease (except on “as available” basis, in Landlord’s reasonable
discretion).
 
(d)  Tenant will pay the monthly rental established by the operator(s) of the
applicable Garage from time to time during the Term for each of the Parking
Permits Tenant leases hereunder. The rentals for the Parking Permits shall
constitute rent and shall be due and payable in advance on the first day of each
calendar month. If the Term commences on other than the first day of a calendar
month or terminates on other than the last day of a calendar month, then rentals
for the Parking Permits shall be prorated on a daily basis.
 
 
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(e)  If the parking spaces covered by any of the Parking Permits are not
available or become unavailable to Tenant (due to causes beyond the reasonable
control of Landlord) during any portion of the Term, Landlord shall use good
faith efforts to make available to Tenant alternate parking spaces located
reasonably near the Building until the spaces covered by such Parking Permits
are made available to Tenant. In such event, Tenant’s obligation to pay for
Parking Permits shall be limited to those actually provided to Tenant by
Landlord.
 
(f)  Tenant’s use of the Parking Permits shall be subject to such rules and
regulations as may be promulgated by the operator(s) of the applicable Garage
from time to time.
 
(g)  If Tenant hereafter expands the Leased Premises pursuant to Section 13
hereof, or otherwise, Tenant shall be entitled to lease additional Block 68
Parking Permits in the ratio of two and one-half (2.5) unreserved Block 68
Parking Permits per each additional 1,000 square feet of net rentable area
leased by Tenant (ten percent (10%) of which, at Tenant’s option, may be
converted to reserved Block 68 Parking Permits).
 
(h)  Upon the occurrence of an event of default under the Lease by Tenant (i.e.,
after the expiration of the applicable cure period for any default by Tenant
following notification thereof by Landlord) for which Landlord terminates the
Lease or Tenant’s right of possession of the Leased Premises, Landlord shall
have the right (in addition to all other rights, remedies and recourse hereunder
and at law) to suspend any or all of the Parking Permits without prior notice or
warning to Tenant.
 
10.  ADA Matters; Sprinklering Work; Asbestos Remediation.
 
(a)  Landlord and Tenant acknowledge and agree that the restrooms, drinking
fountains and stairwell graphics located on Floors 57, 58, and 59 of the
Building may not be in compliance with the Americans with Disabilities Act of
1990 (as amended, the “ADA”) and the Texas Architectural Barriers Act (as
amended, the “TABA”). Tenant shall make, at its sole cost and expense (as part
of the Improvements Allowance or otherwise), on or prior to the New Premises
Commencement Date, all improvements required to be made to such restrooms,
drinking fountains and stairwell graphics in order to bring same into current
compliance with the ADA and the TABA to the extent not now compliant. Tenant
shall also be responsible, at its sole cost and expense, for all other ADA and
TABA compliance matters with respect to the New Premises.
 
(b)  If the asbestos survey(s) to be provided to Tenant by Landlord at
Landlord’s expense indicate the presence of asbestos within the New Premises,
Landlord shall perform, at Landlord’s expense (separate from the Improvements
Allowance), on or prior to the New Premises Commencement Date, any asbestos
remediation work within the New Premises required in connection with Tenant’s
improvements of the New Premises. In addition, Landlord shall install, at
Landlord’s expense (not as part of the Improvements Allowance), on or prior to
the New Premises Commencement Date, in compliance with applicable code
requirements, a ceiling-mounted fire sprinklering system on Floors 57, 58 and 59
(“Sprinklering Work”) according to Building standard specifications and
configuration and in accordance with all applicable laws. Landlord will
coordinate the scheduling of the Sprinklering Work and any asbestos remediation
work with Tenant’s construction of the leasehold improvements within the New
Premises so that such work is performed at a mutually convenient time and in
accordance with the Construction Drawings with respect to the New Premises.
 
 
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11.  Renewal Options.
 
(a)  Effective as of the date hereof, any and all renewal options previously
granted Tenant pursuant to the Lease are hereby deleted in their entirety.
Tenant shall have options to extend the Term of this Lease beyond the Term in
accordance with the terms and conditions of this Section 11.
 
(b)  Tenant shall have the option (each a “Renewal Option”) to renew and extend
the term of this Lease with respect to all of the Leased Premises then leased by
Tenant, or a portion of the Leased Premises (in contiguous full floor
increment(s) only) of at least two (2) contiguous full floors, at either the
highest or lowest portion of the Leased Premises (and if Tenant does not
hereafter expand and elects not to renew with respect to one full floor within
the Leased Premises, the floor Tenant gives back will be Floor 57) for two (2)
additional periods of five (5) years each or one additional period of ten (10)
years (as designated by Tenant in its first exercise notice) (as applicable,
each a “Renewal Term”). Each Renewal Option may only be exercised by Tenant
giving written notice thereof no more than fifteen (15) months nor less than
twelve (12) months prior to the Expiration Date, or prior to the expiration of
the first five (5) year Renewal Term, as applicable. If Tenant fails to give
notice of exercise of a Renewal Option within the applicable time period, such
Renewal Option shall be deemed waived and of no further force and effect and
this Lease shall terminate upon the Expiration Date, or upon the expiration of
the first five (5) year Renewal Term, as applicable. In addition, Tenant’s
exercise of the second five (5) year Renewal Option shall be conditioned upon
Tenant’s extension of the Term for the first five (5) year Renewal Term.
 
(c)  Tenant’s right to extend this Lease as provided for herein can be exercised
only if, at the time of Tenant’s exercise of the applicable Renewal Option and
upon the commencement of the applicable Renewal Term, (i) no event of default
then exists under this Lease, and (ii) Tenant is in possession of that portion
of the Leased Premises consisting of at least two (2) full floors and all
expansion space in the Building Tenant hereafter elects to Lease (the “Occupancy
Threshold”) (unless Landlord, in its sole discretion, elects to waive such
condition(s)). If either of such conditions are not satisfied or waived by
Landlord, such Renewal Option shall be terminated and of no further force and
effect, any purported exercise thereof shall be null and void, and this Lease
shall terminate upon the Expiration Date, or upon the expiration of the first
five (5) year Renewal Term, as applicable. No assignee of Tenant, or sublessee
of the Leased Premises, may exercise a Renewal Option.
 
(d)  If Tenant exercises a Renewal Option (in accordance with and subject to the
provisions of this Section 11), all of the terms, covenants and conditions
provided in this Lease shall continue to apply during the applicable Renewal
Term, except that (i) the Base Rental payable by Tenant during such Renewal Term
shall be the then Market Base Rental Rate (as defined in Section 12 below) for
the Leased Premises, and (ii) any terms, covenants and conditions that are
expressly or by their nature inapplicable to such Renewal Term (including,
without limitation, this Section 11 if the Term is extended for the ten (10)
year Renewal Term, or second five (5) year Renewal Term, as applicable) shall be
deemed void and of no further force and effect.
 
 
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(e)  If Tenant elects not to renew with respect to the entire Leased Premises,
Tenant will be required at its expense to remove all cabling installed by or on
behalf of Tenant in the Building riser(s) serving the floor(s) for which Tenant
elect(s) not to renew, and to pay for the cost of removing the internal
stairwell serving such floor(s), and returning the affected portion(s) of the
Leased Premises, any slab penetrations and any other base building improvements
affected by such removal to Building standard condition.
 
12.  Market Base Rental Rate.
 
(a)  As used herein, the term “Market Base Rental Rate” means the annual net
amount per square foot of net rentable area that a willing tenant would pay and
a willing landlord would accept in arm’s length, bona fide negotiations for a
lease of the Leased Premises (or Expansion Premises) to be executed at the time
of determination and to commence at the beginning of the applicable Renewal Term
(or on the date that the Expansion Premises becomes part of the Leased
Premises), determined as hereinafter provided based upon comparable lease
transactions made in the Building and “Class A” office buildings in the Central
Business District of Houston, Texas taking into account all relevant factors,
including without limitation the effect of any allowances or tenant inducements
that Landlord is obligated to provide to Tenant under the Lease or provides at
its election or, if none are provided, the fact that Landlord declined to
provide any allowances or inducements.
 
(b)  Within ten (10) business days after receipt of Tenant’s notice of exercise
of a Renewal Option or an Expansion Option, Landlord will notify Tenant in
writing of the Market Base Rental Rate for the Leased Premises (or Expansion
Premises) for the applicable Renewal Term (or applicable expansion term). If
Tenant disagrees with Landlord’s determination, Tenant shall have a period of
ten (10) business days after receipt of Landlord’s notice to either (i) withdraw
its exercise of the applicable right or option by written notice to Landlord, in
which event the applicable right or option shall terminate and shall be of no
further force and effect (and, if the applicable option is a Renewal Option, the
Lease shall terminate upon the Expiration Date, or upon the expiration of the
first five (5) year Renewal Term, as applicable), or (ii) notify the Landlord
that it contests Landlord’s finding of the Market Base Rental Rate (which
contest must be reasonable and be made in good faith by Tenant), in which event
the parties shall promptly and in good faith endeavor to resolve between
themselves their disagreement as to the Market Base Rental Rate, failing of
which the parties shall submit the determination to the binding dispute
resolution procedure described below.
 
(c)  If Landlord and Tenant are unable to reach an agreement as to the Market
Base Rental Rate within thirty (30) days after Tenant notifies Landlord in
accordance with clause (ii) of the preceding sentence, Landlord and Tenant shall
each promptly appoint a Qualified Broker (as hereinafter defined) or a Qualified
Appraiser (as hereinafter defined). As soon as reasonably possible following
their appointment, and in any event within thirty (30) days thereafter, the two
(2) Qualified Brokers (or two (2) Qualified Appraisers, as applicable) selected
by Landlord and Tenant shall each make a separate determination of the Market
Base Rental Rate for the Leased Premises (if the determination is being made
pursuant to a Renewal Option) or the Expansion Premises with respect to which
Tenant exercised an Expansion Option, as applicable, and shall deliver a written
report of its determination (including reasonable detail supporting such
determination) to Landlord and Tenant. If the higher of the two (2) Market Base
Rental Rate determinations is not more than one hundred five percent (105%) of
the lower determination, then the average of the two (2) determinations shall be
used as the Market Base Rental Rate for the Leased Premises (or Expansion
Premises) and shall be binding on Landlord and Tenant. If the higher
determination is more than one hundred five percent (105%) of the lower
determination, then the two (2) Qualified Brokers (or two (2) Qualified
Appraisers, as applicable) shall select a third (3rd) Qualified Broker (or
Qualified Appraiser, as applicable), and as soon as reasonably possible (but not
to exceed thirty (30) days) thereafter the third (3rd) Qualified Broker (or
Qualified Appraiser, as applicable) shall determine which of the two (2)
Qualified Brokers’ (or two (2) Qualified Appraisers’, as applicable)
determinations of the Market Base Rental Rate most closely approximates the
Market Base Rental Rate, and the determination so selected shall be used as the
Market Base Rental Rate for the subject space during the applicable term and
shall be binding on both Landlord and Tenant.
 
 
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(d)  Landlord and Tenant shall, separately and collectively and in good faith,
use all reasonable diligence to ensure that all three (3) determinations are
completed in good faith within sixty (60) days after the appointment of the
first Qualified Broker (or Qualified Appraiser, as applicable) to be appointed.
Each party shall be responsible for the compensation, if any, of the Qualified
Broker (or Qualified Appraiser, as applicable) appointed by it and for one-half
(½) of the compensation, if any, of the third (3rd) Qualified Broker (or
Qualified Appraiser, as applicable). If Tenant does not timely withdraw its
exercise of the Renewal Option (or Expansion Option) as provided in subsection
(b)(i), or contest Landlord’s finding of the Market Base Rental Rate as provided
in subsection (b)(ii) above, Tenant shall be conclusively deemed to have
accepted the Market Base Rental Rate determined by Landlord as the Base Rental
rate for the applicable Renewal Term (or expansion term).
 
(e)  As used herein the term “Qualified Broker” means a real estate broker who
(i) is licensed in the State of Texas, (ii) is a member of the Houston Office
Leasing Brokers Association or the Society of Industrial and Office Realtors,
(iii) has been actively involved in leasing office space in multi-story office
buildings in the Central Business District of Houston, Texas for not less than
the previous ten (10) year period, and (iv) has not represented Landlord or
Tenant during the preceding five (5) year period. As used herein, the term
“Qualified Appraiser” means an appraiser who (i) is licensed in the State of
Texas, (ii) is a MAI Appraiser, (iii) has been actively involved in appraising
multi-story office buildings in the Central Business District of Houston, Texas
for not less than the previous ten (10) year period, and (iv) has not
represented Landlord or Tenant during the preceding five (5) year period.
 
 
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13.  Expansion Options.
 
(a)  All expansion rights, preferential lease rights and refusal rights
previously granted Tenant pursuant to the Lease are hereby deleted in their
entirety. Subject to and upon the terms, provisions and conditions set forth in
this Section 13, Tenant shall have, and is hereby granted, two (2) options (each
an “Expansion Option”) to lease approximately one-half (1/2) of any single floor
located in the elevator bank serving Floors 49-59 of the Building designated by
Landlord as Tenant’s expansion floor (the “Expansion Premises”), in response to
Tenant’s exercise of an Expansion Option (i.e., if Tenant leases one-half (1/2)
of a floor pursuant to the first Expansion Option, the other one-half (1/2) of
such floor shall be the Expansion Premises subject to the second Expansion
Option, otherwise, if Tenant does not exercise the first Expansion Option, the
second Expansion Premises shall be one-half (1/2) of a floor located in the
elevator bank serving Floors 49-59 of the Building designated by Landlord, as
applicable) by written notice to Landlord on or prior to the expiration of the
forty-eighth (48th) full calendar month of the Term with respect to the first
Expansion Option, and/or on or prior to the expiration of the eighty-fourth
(84th) full calendar month of the Term with respect to the second Expansion
Option, respectively. If Tenant does not timely exercise an Expansion Option,
such Expansion Option shall be waived.
 
(b)  An Expansion Option may be exercised only if, at the time of such exercise
and at the time of Landlord’s delivery of the applicable Expansion Premises to
Tenant (i) no event of default then exists under the Lease and (ii) Tenant is in
possession of at least the Occupancy Threshold (unless Landlord, in its sole
discretion, elects to waive such condition(s)). If such condition(s) are not
satisfied or waived by Landlord, any purported exercise of an Expansion Option
shall be null and void. No assignee of Tenant, or sublessee of the Leased
Premises may exercise an Expansion Option.
 
(c)  If Tenant elects to exercise an Expansion Option, Tenant’s lease of the
applicable Expansion Premises shall be subject to all of the terms, covenants
and conditions of this Lease except that the Base Rental rate shall be the
Market Base Rental Rate (as defined in Section 12 hereof). The term of the Lease
with respect to the applicable Expansion Premises shall commence on the date of
Landlord’s delivery of possession of the applicable Expansion Premises to Tenant
(which shall occur at any time after the expiration of the fifty-fourth (54th)
full calendar month of the Term, but prior to the expiration of the sixty-sixth
(66th) full calendar month of the Term with respect to the first Expansion
Premises, and at any time after the expiration of the ninetieth (90th) full
calendar month of the Term, but prior to the expiration of the one hundred
second (102nd) full calendar month of the Term with respect to the second
Expansion Premises, respectively), and shall be coterminous with the Term with
respect to the remainder of the Leased Premises. Tenant’s obligation to pay the
rent for the applicable Expansion Premises shall commence on the date (the
“Expansion Rental Commencement Date”) that is the earlier to occur of (i) ninety
(90) days following Landlord’s delivery of possession of the applicable
Expansion Premises to Tenant, or (ii) the date that Tenant fully occupies the
applicable Expansion Premises.
 
(d)  If Landlord fails to deliver possession of the applicable Expansion
Premises to Tenant within sixty (60) days following the applicable outside
delivery date referenced above, the applicable Expansion Rental Commencement
Date shall be extended one additional day for each day of delay beyond such
sixty (60) day period that Landlord fails to deliver possession of the
applicable Expansion Premises to Tenant.
 
 
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(e)  If Tenant elects to lease Expansion Premises, Landlord will deliver
possession of the applicable Expansion Premises to Tenant, and Tenant will
accept such Expansion Premises, in its then current condition (i.e. “AS IS” and
“WITH ALL FAULTS”). Landlord’s provision of (or failure to provide, as
applicable) an improvements allowance with respect to the applicable Expansion
Premises shall be reflected in the determination of the Market Base Rental Rate
for such Expansion Premises.
 
(f)  Upon request of Landlord at any time after Tenant’s exercise of an
Expansion Option, Tenant shall execute and deliver to Landlord an amendment to
the Lease (in a form provided by Landlord) specifying (i) the applicable
Expansion Rental Commencement Date, (ii) the Base Rental schedule for the
applicable Expansion Premises, (iii) the net rentable area of the applicable
Expansion Premises, and (iv) any other terms applicable to Tenant’s lease of the
applicable Expansion Premises.
 
14.  Right of First Refusal.
 
(a)  Subject to and upon the terms, provisions and conditions set forth in this
Section 14, Tenant shall have, and is hereby granted, a continuing right of
first refusal (the “Right of First Refusal”) during the Term of this Lease to
lease any space (the “ROFR Premises”) located on Floors 52 and/or 53 of the
Building that becomes available for lease and for which Landlord receives a bona
fide written third-party offer to lease that Landlord desires to accept.
 
(b)  Tenant may exercise a Right of First Refusal only if, at the time of such
exercise and at the time of Landlord’s delivery of the ROFR Premises to Tenant,
(i) no event of default exists and (ii) Tenant is in possession of at least the
Occupancy Threshold (unless Landlord, in its sole discretion, elects to waive
such condition(s)). If such condition(s) are not satisfied or waived by
Landlord, any purported exercise of the Right of First Refusal shall be null and
void. No assignee of Tenant, or sublessee of the Leased Premises may exercise a
Right of First Refusal.
 
(c)  If Landlord receives a bona fide written third-party offer to lease any of
the ROFR Premises that Landlord desires to accept, Landlord will
contemporaneously submit a proposal to Tenant upon the same terms except that
the term shall be coterminous with the Term with respect to the remainder of the
Leased Premises and any allowances shall be prorated (a “Refusal Lease
Proposal”). Tenant shall have a period of five (5) business days after receipt
of a Refusal Lease Proposal to irrevocably and unconditionally exercise its
Right of First Refusal to lease the applicable ROFR Premises upon the terms of
the Refusal Lease Proposal by written notice to Landlord. If Tenant does not
exercise a Right of First Refusal within such five (5) business day period, the
Right of First Refusal shall be waived with respect to such space. Any purported
conditional or qualified exercise of a Right of First Refusal shall be null and
void. Upon Tenant’s exercise of a Right of First Refusal, Landlord and Tenant
shall execute an amendment to the Lease evidencing same, but an otherwise valid
exercise of a Right of First Refusal shall be fully effective, whether or not
such amendment is executed.
 
 
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(d)  If Landlord does not receive written notice from Tenant of its exercise of
the Right of First Refusal within said five (5) business day period, Landlord
shall have a period of one hundred eighty (180) days thereafter to lease the
applicable ROFR Premises for a net effective rental rate not less than ninety
percent (90%) of the net effective rental rate reflected by the Refusal Lease
Proposal. If Landlord does not lease such ROFR Premises within said one hundred
eighty (180) day period, Tenant shall have a Right of First Refusal on any
subsequent leasing thereof on the terms set forth above.
 
(e)  Tenant acknowledges and agrees that the Right of First Refusal is subject
and subordinate to any and all expansion options, refusal rights, preferential
rights and renewal options hereafter granted to future tenant(s) of the ROFR
Premises (and their respective successors and assigns) for which Tenant did not
exercise a Right of First Refusal.
 
(f)  Landlord acknowledges and agrees that Tenant’s failure to exercise any
Right of First Refusal shall not affect the Expansion Options granted Tenant
herein.
 
15.  Riser Space.
 
(a)  Landlord grants Tenant a non-exclusive license co-terminus with the Term
for limited access to one or more Building risers (in Landlord’s sole,
reasonable discretion) to install, operate and maintain up to four inches (4")
of conduit in the aggregate for fiber optic telecommunications/data cabling (the
“Riser Penetrations”) to be used in connection with Tenant’s use of the New
Premises. The locations of and specifications for the Riser Penetrations
installed pursuant to this Section 15 shall be subject to the prior written
approval of Landlord, which approval shall not be unreasonably withheld or
delayed. The installation of the Riser Penetrations shall be performed at
Tenant’s sole cost and expense. Tenant’s installation and use of the Riser
Penetrations shall not interfere with the activities being carried on by other
tenants or services of the Building. Any drilling, chipping, or other disruptive
construction work shall be performed during non-business hours and, in any
event, Tenant shall use its best efforts to minimize and contain all noise, dust
and any other disturbance to tenants in the Building.
 
(b)  Tenant shall not be required to pay to Landlord any license fee with
respect to the Riser Penetrations.
 
(c)  Prior to the installation or operation of the Riser Penetrations, Tenant
shall obtain and at all times thereafter maintain all required governmental
licenses, permits and/or consents. Tenant shall give Landlord reasonable advance
notice of its intent to access the applicable Building riser(s) in order to
install, maintain, repair or replace the Riser Penetrations. Tenant’s
installation, maintenance, repair and/or replacement of the Riser Penetrations
shall also be governed by the cable and conduit installation procedures set
forth on EXHIBIT B attached hereto and made a part hereof for all purposes,
which procedures are subject to change from time to time in Landlord’s sole
discretion.
 
(d)  Tenant, at its sole cost and expense, shall maintain, repair and/or replace
the Riser Penetrations and shall at all times maintain the Riser Penetrations in
a safe, clean and first class condition. Tenant shall not permit any liens,
claims, charges or encumbrances to attach to the Riser Penetrations or the
Building resulting from the furnishing of labor or materials in connection with
the installation, maintenance, repair or replacement of the Riser Penetrations.
 
 
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(e)  Tenant, at its sole cost and expense, shall repair any and all damage to
the Building, including, without limitation, the Building riser(s), which
results from or arises out of the use, repair, installations, maintenance,
operation and/or removal of Riser Penetrations by Tenant, its employees, agents
and contractors of the Building, including, without limitation, any and all
loss, cost, damage or expense suffered by Landlord or the Building as a result
of (i) the installation, operation, repair, maintenance, replacement or removal
of any Riser Penetrations; (ii) access work in the Building riser(s) or (iii)
unreasonable interference with Landlord or the Building’s tenants, occupants or
invitees. Tenant shall indemnify and hold Landlord, its successors and assigns,
harmless from and against any and all liens, costs, losses, liabilities, causes
of action or claims by contractors, subcontractors, materialmen or laborers
providing any materials to or performing any work on or in the Building for or
on behalf of Tenant with respect to the use, repair, installation, maintenance,
operation and/or removal of Riser Penetrations, including, without limitation,
any reasonable attorneys’ fees and costs of suit incurred by Landlord in
discharging or attempting to discharge any such liens or claims (if Tenant fails
to discharge same within thirty (30) days following Tenant’s receipt of written
notice thereof). Additionally, Tenant shall indemnify and hold Landlord, its
successors and assigns, harmless from and against any and all liabilities,
losses, damages, costs, expenses (including, without limitation, reasonable
attorneys’ fees), causes of action, suits, claims or demands arising out of or
in connection with the installation, use, repair, maintenance, operation and/or
removal of the Riser Penetrations by Tenant, its employees, agents and
contractors, or otherwise arising out of or in connection with the exercise by
Tenant, its employees, agents and contractors of the license herein granted or
under claim of the rights and privileges herein granted, including, without
limitation, any future damages due to removal operations by Tenant pursuant to
Section 15(g) below.
 
(f)  If Tenant is not required to pay for the removal of the existing cabling in
the Building riser(s) now serving the New Premises, upon Tenant’s relocation to
the New Premises, Tenant will, at Tenant’s sole cost and expense within thirty
(30) days thereafter, remove any cabling in the Building riser(s) now serving
the Existing Premises and repair any damage to the Building resulting therefrom.
In addition, upon the termination or expiration of the Lease (following any
renewal periods, if exercised by Tenant), if Tenant is not required to pay for
the removal of the existing cabling in the Building riser(s) now serving the New
Premises, Tenant will, at Tenant’s sole cost and expense and within thirty (30)
days thereafter, remove any cabling installed by or on behalf of Tenant in the
Building riser(s) to serve the New Premises, and repair any damage to the
Building resulting therefrom.
 
16.  Sky Lobby Signage. In the event Landlord, at its sole election (and with no
obligation to do so), grants name signage rights on the wall on Floor 60
adjacent to the elevator bank serving Floors 49-59 of the Building, to tenant(s)
leasing space equal to or in excess of the net rentable area of the Leased
Premises, Landlord shall also grant a similar name signage right to Tenant.
 
17.  Lender Approval. The Lease is subject and subordinate to the mortgage lien
of Landlord’s existing mortgagee, the New York State Teachers’ Retirement System
(“Lender”), encumbering the Building, as set forth in that certain
Subordination, Non-Disturbance and Attornment Agreement dated June 24, 2003 by
and among Lender, Landlord and Tenant (the “SNDA”). Landlord shall use good
faith efforts to obtain, as soon as reasonably practicable following the date
hereof, Lender’s written approval of this Eleventh Amendment and/or a written
acknowledgment from Lender that the SNDA applies to the Lease as amended by this
Eleventh Amendment.
 
 
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18.  Miscellaneous.
 
(a)  Amendment to Lease. Tenant and Landlord acknowledge and agree that the
Lease has not been amended or modified in any respect, other than by this
Eleventh Amendment, and there are no other agreements of any kind currently in
force and effect between Landlord and Tenant with respect to the Leased Premises
or the Building. The term “Lease” shall mean the Lease as amended by this
Eleventh Amendment unless the context requires otherwise.
 
(b)  Counterparts. This Eleventh Amendment may be executed in multiple
counterparts, and each counterpart when fully executed and delivered shall
constitute an original instrument, and all such multiple counterparts shall
constitute but one and the same instrument.
 
(c)  Entire Agreement. This Eleventh Amendment sets forth all covenants,
agreements and understandings between Landlord and Tenant with respect to the
subject matter hereof and there are no other covenants, conditions or
understandings, either written or oral, between the parties hereto except as set
forth in this Eleventh Amendment.
 
(d)  Full Force and Effect. Except as expressly amended hereby, all other items
and provisions of the Lease, as amended, remain unchanged and continue to be in
full force and effect.
 
(e)  Conflicts. The terms of this Eleventh Amendment shall control over any
conflicts between the terms of the Lease and the terms of this Eleventh
Amendment.
 
(f)  Authority of Tenant. Tenant warrants and represents unto Landlord that (i)
Tenant is a duly organized and existing legal entity, in good standing in the
State of Texas; (ii) Tenant has full right and authority to execute, deliver and
perform this Eleventh Amendment; (iii) the person executing this Eleventh
Amendment on behalf of Tenant was authorized to do so; and (iv) upon request of
Landlord, such person will deliver to Landlord satisfactory evidence of his or
her authority to execute this Eleventh Amendment on behalf of Tenant.
 
(g)  Capitalized Terms. Capitalized terms not defined herein shall have the same
meanings attached to such terms under the Lease.
 
(h)  Successors and Assigns. This Eleventh Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
 
(i)  No Guaranties. Landlord acknowledges and agrees that all guaranties
previously executed by Tenant’s principals from time to time during the Lease
term, including but not limited to the Original Guaranty, the Fourth Amendment
Guaranty, the Sixth Amendment Guaranty and the joinder of Guarantors to the
Seventh Amendment, have been terminated in all respects, and there are no
guaranties now in effect with respect to the Lease.
 
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(j)  Governing Law. This Eleventh Amendment shall be governed by and construed
in accordance with the laws of the State of Texas.

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
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Executed as of the date first written above.
 

       
LANDLORD:
     
TEXAS TOWER LIMITED,
a Texas limited partnership
 
   
   
  By:   Prime Asset Management LLC,  

--------------------------------------------------------------------------------

a Delaware limited liability company,
its general partner
 
By: Raha One (U.S.) Limited, Inc.,
a Delaware corporation,
its managing member

 

      By:   /s/ Rafic A. Bizri  

--------------------------------------------------------------------------------

Rafic A. Bizri
President

 

        TENANT:      
SANDERS MORRIS HARRIS INC.,
a Texas corporation
 
   
   
    By:   /s/ Ben T. Morris  

--------------------------------------------------------------------------------

Name: Ben T. Morris   Title: Chief Executive Officer

 
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EXHIBIT A
 
Floor Plans of New Premises

 
[TO COME]
 
 
A-1

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EXHIBIT B
 
Building Cabling and Conduit Installation Procedures

 
1.
All floor-to-floor vertical cable/conduit installations must be approved in
advance, in writing by Hines Property Management.

 
2.
Hines Property Management will approve the installation location.

 
3.
Only plenum rated conduit shall be installed, and only plenum rated cable shall
be installed if the proposed cable will not be installed in and enclosed by
conduit.

 
4.
All cable/conduit runs will be vertical. No “zigzag” installations are allowed.

 
5.
Upon installation, all cable/conduit will be labeled by tenant on each floor to
clearly indicate the tenant name.

 
6.
Tenant or tenants’ cable/conduit contractor is responsible for repairing or
replacing, as necessary, firestop in each penetration.

 
7.
At such time that cable/conduit is no longer in use, but in any case, not later
than the lease expiration, tenant is responsible for removing its cable.

 
8.
Tenant is responsible for all costs associated with the cable/conduit
installation, and cable removal. This may include labor to coordinate the
installation, repair of damage to other cable/conduit or the surrounding area,
removal and/or replacement of floor penetration sealant, etc.

 
9.
The cable/conduit installed will be for the sole use of the tenant. Tenant shall
not assign, sell, lease or in any other manner, share cable/conduit without
Landlord’s prior written consent.

 
TENANT NAME:                            
_____________________________________________________________________
 
CABLE/CONDUIT LOCATION:
_______________________________________________________________________
 
FLOORS:                                       
 _______________________________________________________________________
 
TYPE OF CABLE/CONDUIT:    
______________________________________________________________________ 
 
I agree to install and remove this cable/conduit pursuant to the provisions and
procedures as stated above:

_____________________________  _________________________________  ______________
Name & Firm Name (print)
Signature
Date

 
 
B-1

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(Tenant)
 
EXHIBIT C
 
Construction of Initial Leasehold Improvements

 
Tenant will have the right to construct and install the leasehold improvements
and tenant finish desired by Tenant in the Leased Premises (collectively, the
“Initial Leasehold Improvements”) in accordance with, and subject to the
limitations and conditions set forth in, this EXHIBIT B.
 
1.
Tenant shall have prepared and submitted to Landlord for approval no later than
thirty (30) days prior to commencement of construction of the Initial Leasehold
Improvements a set of preliminary plans (the “Proposed Space Plans”) in the form
of a schematic design providing a conceptual layout and description of the
Initial Leasehold Improvements.

 
2.
Within ten (10) business days after delivery of the Proposed Space Plans to
Landlord, Landlord shall either approve the Proposed Space Plans or notify
Tenant of the item(s) of the Proposed Space Plans that Landlord disapproves and
the reason(s) therefor. If Landlord disapproves the Proposed Space Plans, Tenant
shall revise and resubmit same to Landlord for approval (the “Revised Space
Plans”) within ten (10) business days following receipt of Landlord’s
disapproval. Within five (5) business days after delivery of the Revised Space
Plans to Landlord, Landlord shall either approve the Revised Space Plans or
notify Tenant of the item(s) of the Revised Space Plans which Landlord
disapproves and the reason(s) therefor. If Landlord disapproves the Revised
Space Plans, Tenant shall further revise and resubmit same to Landlord for
approval, which process shall continue until the plans are approved. Landlord
shall have five (5) business days after delivery of the each set of Revised
Space Plans to either approve the Revised Space Plans or notify Tenant of the
item(s) of the Revised Space Plans which Landlord disapproves and the reason(s)
therefor. The Proposed Space Plans or Revised Space Plans, as approved by
Landlord, are hereinafter referred to as the “Space Plans”.

 
3.
Upon Landlord’s approval of the Space Plans, Tenant shall have prepared, by a
licensed architect and engineer reasonably acceptable to Landlord, construction
drawings (in accordance with the Space Plans) and specifications including
complete sets of detailed architectural, structural, mechanical, electrical and
plumbing working drawings (the “Proposed Construction Drawings”) for the Initial
Leasehold Improvements and shall deliver the Proposed Construction Drawings to
Landlord for approval within one hundred twenty (120) days following Landlord’s
approval of the Space Plans.

 
4.
Within ten (10) business days after delivery of the Proposed Construction
Drawings to Landlord, Landlord shall either approve the Proposed Construction
Drawings or notify Tenant in writing of the item(s) of the Proposed Construction
Drawings that Landlord disapproves and the reason(s) therefor. If Landlord
disapproves the Proposed Construction Drawings, Tenant shall revise and resubmit
same to Landlord for approval (the “Revised Construction Drawings”) within ten
(10) business days following receipt of Landlord’s disapproval. Within five (5)
business days after delivery of the Revised Construction Drawings to Landlord,
Landlord shall either approve the Revised Construction Drawings or notify Tenant
in writing of the item(s) of the Revised Construction Drawings which Landlord
disapproves and the specific reason(s) therefor. If Landlord disapproves the
Revised Construction Drawings, Tenant shall further revise and resubmit same to
Landlord for approval, which process shall continue until the plans are
approved. Landlord shall have five (5) business days after delivery of each set
of Revised Construction Drawings to either approve the Revised Construction
Drawings or notify Tenant of the item(s) of the Revised Construction Drawings
which Landlord disapproves and the reason(s) therefor. The Proposed Construction
Drawings or Revised Construction Drawings, as approved by Landlord, are
hereinafter referred to as the “Construction Drawings”.

 
 
C-1

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5.
Landlord’s approval of the Construction Drawings shall in no manner indicate
that Landlord believes the Construction Drawings are in compliance with all
applicable codes, law and regulations and it shall be Tenant’s obligation to
obtain all such requisite approvals.

 
6.
Tenant shall submit to Landlord in writing the following information at least
ten (10) days prior to the commencement of construction of the Initial Leasehold
Improvements:

 

 
A.
The name and address of Tenant’s proposed general contractor (the “General
Contractor”), and the names of each of the subcontractors that the General
Contractor intends to engage in the construction of the mechanical, electrical
and plumbing system portions of the Initial Leasehold Improvements. The General
Contractor and all such subcontractors (collectively, “Tenant’s Contractors”)
shall be subject to Landlord’s prior written approval, which approval shall not
be unreasonably withheld, delayed or conditioned.

 

 
B.
The anticipated commencement date of construction and estimated date of
completion.

 

 
C.
Evidence of property, liability and worker’s compensation insurance reasonably
acceptable to Landlord as to insurer, policy terms and coverage (which, as to
property and liability insurance policies, may include, without limitation,
naming Landlord as additional insured).

 
7.
Tenant, at its sole cost and expense, shall cause Tenant’s Contractors to
perform all work required to complete the Initial Leasehold Improvements
substantially in accordance with the approved Construction Drawings (“Tenant’s
Work”). Landlord, at Landlord’s expense, shall have the right to observe the
Tenant’s Work, but any such observation shall be strictly for Landlord’s own
purposes and shall not impose upon Landlord any express or implied duty to
Tenant or any third party with respect to the Tenant’s Work or the Leased
Premises, including, without limitation, verification that the Initial Leasehold
Improvements are constructed in a good and workmanlike manner, substantially in
accordance with (a) the Construction Drawings, (b) all applicable laws, codes
and ordinances and (c) Landlord’s insurance requirements.

 
 
C-2

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8.
Tenant shall not be deemed to be the agent or representative of Landlord in
making the Initial Leasehold Improvements, and shall have no right, power or
authority to encumber the fee interest in the Building or the land on which it
is located. Accordingly, any claims against Tenant with respect to the Tenant’s
Work or the Initial Leasehold Improvements shall be limited to Tenant’s
leasehold estate under this Lease. Should any mechanic’s or other liens be filed
against the Leased Premises, the Building or any other property of Landlord or
any interest therein by reason of Tenant’s acts or omissions or because of a
claim against Tenant or Tenant’s Contractors, Tenant shall cause same to be
canceled or discharged of record by bond or otherwise within thirty (30) days
after notice by Landlord. If Tenant shall fail to cancel or discharge said lien
or liens, within said thirty (30) day period (which failure shall be deemed to
be a default hereunder), Landlord may, at its sole option and in addition to any
other remedy of Landlord hereunder or at law, cancel or discharge same and
Tenant shall promptly reimburse Landlord upon demand, for all reasonable costs
incurred in canceling or discharging such lien or liens (including, without
limitation, reasonable legal fees).

 
9.
All Tenant’s Work shall be performed in a good and workmanlike manner in
accordance with good industry practice, shall comply in all material respects
with applicable federal, state, city and county statutes, ordinances,
regulations, laws and codes, including, without limitation, the ADA and TABA and
shall be performed so as not to alter the exterior appearance of the Building
and so as not to adversely affect the structure or safety or systems or services
of the Building, the Project or those of the other tenants therein. All required
building and other permits in connection with the construction and completion of
the Tenant’s Work shall be obtained and paid for by Tenant.

 
10.
All material used in the performance of Tenant’s Work and in the fixturing of
the Leased Premises shall be new and of good quality (other than materials
already located in the Leased Premises on the date of this Lease).

 
11.
Tenant’s Contractors (at no cost to Tenant prior to the Commencement Date) shall
be allowed to utilize power, water and other existing utility facilities as
necessary and required in connection with the Tenant’s Work in the Leased
Premises.

 
12.
Tenant shall maintain the Leased Premises and the surrounding areas in a clean
and orderly condition during construction. Tenant shall promptly remove all
unused construction materials, equipment, shipping containers, packaging, debris
and flammable waste from the Building. Neither Tenant nor Tenant’s Contractors
shall be permitted to deposit rubbish, dirt or debris in Landlord’s trash
containers or elsewhere in the Building. Storage of construction materials,
tools, equipment and debris shall be confined within the Leased Premises.

 
13.
Landlord shall have the right at all times to inspect the Initial Leasehold
Improvements. Tenant shall do structural work, coring, drilling and chipping,
after normal business hours but shall have the right to construct all other
Initial Leasehold Improvements at any hour. If at any time the entry by or
presence of one or more persons furnishing labor or materials for the Initial
Leasehold Improvements shall cause disharmony or interference with the other
tenants in the Building or the operation of the Project, any consent granted by
Landlord with respect to the disruptive contractor or subcontractor may be
withdrawn following twenty-four (24) hours’ written notice to Tenant if such
disharmony or interference is not cured within such twenty-four (24) hour
period; provided however, Landlord shall have the right at all times to
immediately terminate any particular activity or activities of Tenant or its
employees, agents, or contractors which, in Landlord’s reasonable judgment, (i)
causes unreasonable interference with other Building tenants’ usage of the
Project, or (ii) poses an immediate threat of damage or injury to persons or
property in or around the Project.

 
 
C-3

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14.
Upon completion of Tenant’s Work, Tenant shall deliver to Landlord one set of
the “records drawings” and specifications for the Leased Premises on a diskette
in AutoCad or compatible format.

 
15.
Landlord agrees to provide Tenant an allowance (the “Improvements Allowance”) of
up to $38.55 per square foot of net rentable area of the Leased Premises in
connection with the design, construction and installation of the Initial
Leasehold Improvements. The Improvements Allowance shall be funded in
installments (less ten percent (10%) retainage) (no more frequently than once
per month) promptly following Landlord’s receipt of Tenant’s written draw
request, accompanied by a partial lien waiver from the General Contractor and
supporting detail for the costs incurred by Tenant reasonably acceptable to
Landlord. The final installment of the Improvements Allowance shall be funded
upon the later to occur of (i) the date that Tenant fully occupies the Leased
Premises, and (ii) Landlord’s receipt of Tenant’s written request therefor,
accompanied by a final lien waiver from the General Contractor and each of the
other Tenant’s Contractors designated by Landlord, the AutoCad diskette of the
“record drawings” and specifications for the Leased Premises and supporting
detail for the costs incurred by Tenant reasonably acceptable to Landlord. If
the total costs of the Initial Leasehold Improvements exceed the Improvements
Allowance, the excess shall be at Tenant’s sole cost and expense. If the total
costs of the Initial Leasehold Improvements do not exceed the Improvements
Allowance, any savings may be utilized for future leasehold improvements in the
Leased Premises if completed prior to December 31, 2011, failing of which Tenant
shall forfeit any remaining balance of the Improvements Allowance as of such
date.

 
16.
In the event Tenant requests Landlord to contract for the construction and
installation of any portion of the Tenant’s Work on behalf of Tenant, Landlord
shall supervise the construction of that portion of Tenant’s Work and Tenant
agrees to pay Landlord a reasonable construction management fee in an amount not
to exceed five percent (5%) of the total construction costs of that portion of
the Tenant’s Work performed by Landlord’s contractor.

 
17.
From time to time as such schedules are revised, Tenant or Tenant’s Contractors
shall provide Landlord with schedules showing the timing of construction of the
Initial Leasehold Improvements. All Initial Leasehold Improvements shall comply
in all material respects with the Construction Drawings.

 
 
C-4

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