exv10w18



 



Exhibit
10.18



OFFICE LEASE AGREEMENT



This Office Lease Agreement (the “Lease”), made and entered into on this the 6th day of March,
2006, between 1601 Tower Properties, L.L.C., an Oklahoma limited liability company (“Landlord”) and
Riata Energy, Inc. a Texas corporation (“Tenant”).




WITNESSETH:



1. Definitions. The following are definitions of some of the defined terms used in this
Lease. The definition of other defined terms are found throughout this Lease.





A. “Building” shall mean the office building at 1601 Northwest Expressway, Oklahoma City,
County of Oklahoma, State of Oklahoma, currently known as The Tower.




B. “Base Rent”: Base Rent will be paid according to the following schedule, subject to the
provisions of Section 5. hereof. For the purposes of this Section 1.B., “Lease Year” shall
mean the twelve (12) month period commencing on the Commencement Date, and on each
anniversary of the Commencement Date.



	 	 	 	 	 
	 	 	
Monthly Installments	 
	Period	 	of Base Rent	 
	September 1, 2006 thru August 31, 2009
	 	 	$82,883.08	 







C. “Additional Rent”: shall mean Tenant’s Pro Rata Share of Basic Costs (hereinafter defined)
and any other sums (exclusive of Base Rent) that are required to be paid to Landlord by Tenant
hereunder, which sums are deemed to be Additional Rent under this Lease. Additional Rent and
Base Rent are sometimes collectively referred to herein as “Rent.”




D. “Basic Costs” shall mean all direct and indirect costs and expenses incurred in connection
with the Building as more fully defined in Exhibit C attached hereto.




E. “Security Deposit” — None.




F. “Commencement Date”, “Lease Term” and “Termination Date” shall have the following meaning:
The “Lease Term” shall mean a period of thirty-six (36) months commencing on September 1, 2006
(the “Commencement Date”) and, unless sooner terminated as provided herein, end on August
31, 2009 (the “Termination Date”).




G. “Premises” shall mean the office space located within the Building and outlined on Exhibit
A to this Lease and known as suites 300, 400, 710, 1210, 1600, 1700 and 1950.




H. “Approximate Rentable Area in the Premises” shall mean the area contained within the
demising walls of the Premises and any other area designated for the exclusive use of Tenant
plus an allocation of the Tenant’s pro rata share of the square footage of the “Common Areas”
and the “Service Areas”, (as defined below). For purposes of the Lease it is agreed and
stipulated by both Landlord and Tenant that the Approximate Rentable Area in the Premises is
53,762 square feet.




I. The “Approximate Rentable Area in the Building” is 299,599 square feet. The Approximate
Rentable Area in the Premises and the Approximate Rentable Area in the Building as set forth
herein may be revised at Landlord’s election if Landlord’s architect determines such estimate
to be inaccurate in any material degree after examination of the final drawings of the
Premises and the Building.



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J. “Tenant’s Pro Rata Share” shall mean seventeen point nine four (17.94%), which is the quotient
(expressed as a percentage), derived by dividing the Approximate Rentable Area in the Premises by
the Approximate Rentable Area in the Building.




K. “Permitted Use” shall mean general office use and no other use or purpose.





L. “Base Year” shall mean the calendar year 2006.




M. “Guarantor”: None




N. “Broker” shall mean Grubb & Ellis | Levy Beffort.




O. “Building Manager” shall mean Grubb & Ellis | Levy Beffort or such other company as Landlord
shall designate from time to time.




P. “Building Standard”, shall mean the type, brand, quality and/or quantity of materials Landlord
designates from time-to-time to be the minimum quality and/or quantity to be used in the Building
or the exclusive type, grade, quality and/or quantity of material to be used in the Building.




Q. “Business Day(s)” shall mean Mondays through Fridays exclusive of the normal business holidays
of New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
(“Holidays”). Landlord, from time to time during the Lease Term, shall have the right to designate
additional Holidays, provided such additional Holidays are commonly recognized by other office
buildings in the area where the Building is located.




R. “Common Areas” shall mean those areas located within the Building or on the Property used for
corridors, elevator foyers, mail rooms, restrooms, mechanical rooms, elevator mechanical rooms,
property management office, janitorial closets, electrical and telephone closets, vending areas,
and lobby areas (whether at ground level or otherwise), entrances, exits, sidewalks, skywalks,
tunnels, driveways, parking areas and parking garages and landscaped areas and other similar
facilities provided for the common use or benefit of tenants generally and/or the public.




S. “Default Rate” shall mean fifteen percent (15%).




T. Intentionally Omitted.




U. “Normal Business Hours” for the Building shall mean 8:00 a.m. to 6:00 p.m. Mondays through
Fridays, and 8:00 a.m. to 1:00 p.m. on Saturdays, exclusive of Holidays.




V. “Property” shall mean the Building and the parcel(s) of land on which it is located, other
improvements located on such land, adjacent parcels of land that Landlord operates jointly with
the Building, and other buildings and improvements located on such adjacent parcels of land.




W. “Service Areas” shall mean those areas within the Building used for stairs, elevator shafts,
flues, vents, stacks, pipe shafts and other vertical penetrations (but shall not include any such
areas for the exclusive use of a particular tenant).




X. “Notice Addresses” shall mean the following addresses for Tenant and Landlord, respectively:



Tenant:




Riata Energy, Inc.

1601 NW Expressway, Ste. 1600

Oklahoma City, OK 73118




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Landlord:




1601 Tower Properties, L.L.C.

VB Tower Manager, Inc., as Manager

1601 NW Expressway, Ste. 500

Oklahoma City, OK 73118

Attn: Vice President and Secretary




Payments of Rent only shall be made payable to the order of:




1601 Tower Properties, L.L.C.




at the following address:




1601 NW Expressway, Ste. 500

Oklahoma City, OK 73118




or such other name and address as Landlord shall, from time to time, designate.



2.
Lease Grant. Subject to and upon the terms herein set forth, Landlord leases to Tenant
and Tenant leases from Landlord the Premises together with the right, in common with others, to use
the Common Areas.




3.
Adjustment of Commencement Date/Possession.





A. By taking possession of the Premises, Tenant is deemed to have accepted the Premises and
agreed that the Premises is in good order and satisfactory condition, with no representation
or warranty by Landlord as to the condition of the Premises or the Building or suitability
thereof for Tenant’s use.




B. If Tenant takes possession of the Premises prior to the Commencement Date, such possession
shall be subject to all the terms and conditions of the Lease except Tenant shall pay Base
Rent and Additional Rent to Landlord for each day of occupancy prior to the Commencement Date.
Notwithstanding the foregoing, if Tenant, with Landlord’s prior approval, takes possession of
the Premises prior to the Commencement Date for the sole purpose of performing any
Landlord-approved improvements therein or installing furniture, equipment or other personal
property of Tenant, such possession shall be subject to all of the terms and conditions of the
Lease, except that Tenant shall not be required to pay Rent with respect to the period of time
prior to the Commencement Date during which Tenant performs such work. Nothing herein shall be
construed as granting Tenant the right to take possession of the Premises prior to the
Commencement Date, whether for construction, fixturing or any other purpose, without the prior
consent of Landlord.


4. Use. The Premises shall be used for the Permitted Use and for no other purpose.
Tenant agrees not to use or permit the use of the Premises for any purpose which is illegal,
dangerous to life, limb or property or which, in Landlord’s sole judgment, creates a nuisance or
which would increase the cost of insurance coverage with respect to the Building. Tenant will
conduct its business and control its agents, servants, employees, customers, licensees, and
invitees in such a manner as not to interfere with, annoy or disturb other tenants or Landlord in
the management of the Building and the Property. Tenant will maintain the Premises in a clean and
healthful condition, and comply with all laws, ordinances, orders, rules and regulations of any
governmental entity with reference to the use, condition, configuration or occupancy of the
Premises. Tenant, within ten (10) days after the receipt thereof, shall provide Landlord with
copies of any notices it receives with respect to a violation or alleged violation of any such
laws, ordinances, orders, rules and regulations. Tenant, at its expense, will comply with the
rules and regulations of the Building attached hereto as Exhibit B and such other rules and
regulations adopted and altered by Landlord from time-to-time and will cause all of its agents,
employees, invitees and visitors to do so. All such changes to rules and regulations will be
reasonable and shall be sent by Landlord to Tenant in writing.





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5. BaseRent.





A. Tenant covenants and agrees to pay to Landlord during the Lease Term, without any setoff or
deduction except as otherwise expressly provided herein, the full amount of all Base Rent and
Additional Rent due hereunder and the full amount of all such other sums of money as shall
become due under this Lease (including, without limitation, any charges for replacement of
electric lamps and ballasts and any other services, goods or materials furnished by Landlord at
Tenant’s request), all of which hereinafter may be collectively called “Rent.” In addition
Tenant shall pay and be liable for, as Additional Rent, all rent, sales and use taxes or other
similar taxes, if any, levied or imposed by any city, state, county or other governmental body
having authority, such payments to be in addition to all other payments required to be paid to
Landlord by Tenant under the terms and conditions of this Lease. Any such payments shall be
paid concurrently with the payments of the Rent on which the tax is
based. The Base Rent and
Additional Rent for each calendar year or portion thereof during the Lease Term, shall be due
and payable in advance in monthly installments of the first day of each calendar month during
the Lease Term and any extensions or renewals hereof, and Tenant hereby agrees to pay such Base
Rent and Additional Rent to Landlord without demand. If the Lease Term commences on a day other
than the first day of a month or terminates on a day other than the last day of a month, then
the installments of Base Rent and Additional Rent for such month or months shall be prorated,
based on the number of days in such month. No payment by Tenant or receipt or acceptance by
Landlord of a lesser amount than the correct installment of Rent due under this Lease shall be
deemed to be other than a payment on account of the earliest Rent due hereunder, nor shall any
endorsement or statement on any check or any letter accompanying any check or payment be deemed
an accord and satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance or pursue any other available remedy. The acceptance by
Landlord of an installment of Rent on a date after the due date of such payment shall not be
construed to be a waiver of Landlord’s right to declare a default for any other late payment.
All amounts received by Landlord from Tenant hereunder shall be applied first to the earliest
accrued and unpaid Rent then outstanding. Tenant’s covenant to pay Rent shall be independent of
every other covenant set forth in this Lease.




B. To the extent allowed by law, all installments of Rent not paid when due shall bear
interest at the Default Rate from the date due until paid. In addition, if Tenant fails to pay
any installment of Base Rent and Additional Rent or any other item of Rent when due and
payable hereunder, a “Late Charge” equal to five percent (5%) of such unpaid amount will be
due and payable immediately by Tenant to Landlord.




C. The Additional Rent payable hereunder shall be adjusted from time-to-time in accordance
with the provisions of Exhibit C attached hereto and incorporated herein for all purposes.


6. Intentionally Omitted.



7. Services to be Furnished by Landlord.





A. Landlord agrees to furnish Tenant the following services:




	 	(1)	 	Water for use in the lavatories, kitchen areas and restrooms on the floor(s)
on which the Premises is located.
	 
	 	(2)	 	Central heat and air conditioning in season during Normal Business Hours, at
such temperatures and in such amounts as are considered by Landlord, in its
reasonable judgment, to be standard for buildings of similar class, size, age and
location, or as required by governmental authority. In the event that Tenant requires
central heat, ventilation or air conditioning service at times other than Normal
Business Hours, such additional service shall be furnished only upon the written
request of Tenant delivered to Landlord prior to 3:00 p.m. at least one Business Day
in advance of the date for which such usage is




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	 	 	 	requested.Tenant shall bear the entire cost of additional service as such costs
are determined by Landlord from time-to-time, as Additional Rent upon presentation of a
statement therefor by Landlord. All additional heating, ventilating and air
conditioning required (if any) to accommodate Tenant’s design shall be installed at the
Tenant’s expense subject to Landlord’s prior written approval. The cost of operation
and maintenance of the equipment shall be the responsibility of the Tenant and paid to
Landlord as Additional Rent.
	 
	 	(3)	 	Maintenance and repair of all Common Areas in the manner and to the extent reasonably
deemed by Landlord to be standard for buildings of similar class, age and location.
	 
	 	(4)	 	Janitorial and cleaning service in and about the Premises on Business Days; provided,
however, if Tenant’s floor covering or other improvements require special treatment,
Tenant shall pay the additional cleaning cost attributable thereto as Additional Rent upon
presentation of a statement therefor by Landlord. Tenant shall not provide or use any
other janitorial or cleaning services without Landlord’s consent, and then only subject to
the supervision of Landlord and at Tenant’s sole cost and responsibility and by a janitor,
cleaning contractor or employees at all times satisfactory to Landlord.
	 
	 	(5)	 	Electricity to the Premises for general office use, in accordance with and subject to
the terms and conditions of Section 11. of this Lease.
	 
	 	(6)	 	Fluorescent bulb replacement in the Premises necessary to maintain building standard
the lighting as established by Landlord and fluorescent and incandescent bulb and ballast
replacement in the Common Areas and Service Areas.
	 
	 	(7)	 	Passenger elevator service in common with Landlord and other persons during Normal
Business Hours and freight elevator service in common with the Landlord and other persons
during Normal Business Hours. Such normal elevator service, passenger or freight, if
furnished at other times, shall be optional with Landlord and shall never be deemed a
continuing obligation. Landlord, however, shall provide limited passenger elevator service
daily at all times when normal passenger elevator service is not provided.
	 
	 	(8)	 	Access control to the Building during other than Normal Business Hours shall be
provided in such form as Landlord deems appropriate. Tenant shall cooperate fully in
Landlord’s efforts to maintain access control to the Building and shall follow all
regulations promulgated by Landlord with respect thereto. Notwithstanding anything herein
to the contrary Tenant expressly acknowledges and agrees that Landlord is not warranting
the efficacy of any access personnel, service, procedures or equipment and that Tenant is
not relying and shall not hereafter rely on any such personnel service, procedures or
equipment. Landlord shall not be responsible or liable in any manner for failure of any
access personnel, services, procedures or equipment to prevent, control, or apprehend
anyone suspected of causing personal injury or damage in, on or around the Project.






B. If Tenant requests any other utilities or building services in addition to those identified
above, or any of the above utilities or building services in frequency, scope, quality or
quantities substantially greater than the standards set by Landlord for the Building, then
Landlord shall use reasonable efforts to attempt to furnish Tenant with such additional utilities
or building services. Landlord may impose a reasonable charge for such additional utilities or
building services, which shall be paid monthly by Tenant as Additional Rent on the same day that
the monthly installment of Base Rent is due.




C. Except as otherwise expressly provided herein, the failure by Landlord to any extent to
furnish, or the interruption or termination of these defined services in whole or in part,
resulting from adherence to laws, regulations and administrative orders, wear, use, repairs,
improvements alterations or any causes beyond the reasonable control of Landlord shall not render
Landlord liable in any respect nor be construed as a constructive eviction of Tenant, nor give
rise to an abatement of Rent, nor relieve Tenant



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from the obligation to fulfill any covenant or agreement hereof. Should any of the
equipment or machinery used in the provision of such services for any cause cease to function
properly, Landlord shall use reasonable diligence to repair such equipment or machinery.


8. Leasehold Improvements/Tenant’s Property. All fixtures, equipment, improvements and
appurtenances attached to, or built into, the Premises at the commencement of or during the Lease
Term, whether or not by, or at the expense of, Tenant
(“Leasehold Improvements”), shall be and
remain a part of the Premises; shall be the property of Landlord; and shall not be removed by
Tenant except as expressly provided herein. All unattached and moveable partitions, trade fixtures,
moveable equipment or furniture located in the Premises and acquired by or for the account of
Tenant, without expense to Landlord, which can be removed without structural damage to the Building
or Premises, and all personalty brought into the Premises by Tenant
(“Tenant’s Property”) shall be
owned and insured by Tenant.



9. Signage. Landlord shall provide and install, at Tenant’s cost, all letters or numerals
on the exterior of the Premises; all such letters and numerals shall be in the standard graphics
for the Building and no others shall be used or permitted on the Premises without Landlord’s prior
written consent. In addition, Landlord will list Tenant’s name in the Building’s directory, if
any, located in the lobby of the Building.



10. Repairs and Alterations by Tenant.





A. Except to the extent such obligations are imposed upon Landlord hereunder, Tenant shall, at
its sole cost and expense, maintain the Premises in good order, condition and repair
throughout the entire Lease Term, ordinary wear and tear excepted. Tenant agrees to keep the
areas visible from outside the Premises in a neat, clean and attractive condition at all
times. Tenant shall be responsible for all repairs replacements and alterations in and to the
Premises, Building and Property and the facilities and systems thereof, the need for which
arises out of (1) Tenant’s use or occupancy of the Premises, (2) the installation, removal,
use or operation of Tenant’s Property (as defined in Section 8. above), (3) the moving of
Tenant’s Property into or out of the Building, or (4) the act, omission, misuse or negligence
of Tenant, its agents, contractors, employees or invitees. All such repairs, replacements or
alterations shall be performed in accordance with Section 10.B. below and the rules, policies
and procedures reasonably enacted by Landlord from time to time for the performance of work in
the Building. If Tenant fails to maintain the Premises in good order, condition and repair,
Landlord shall give Tenant notice to perform such acts as are reasonably required to so
maintain the Premises. If Tenant fails to promptly commence such work and diligently pursue it
to its completion, then Landlord may, at is option, make such repairs, and Tenant shall pay
the cost thereof to Landlord on demand as Additional Rent, together with an administration
charge in an amount equal to ten percent (10%) of the cost of such repairs. Landlord shall, at
its expense (except as included in Basic Costs) keep and maintain in good repair and working
order and make all repairs to and perform necessary maintenance upon: (a) all structural
elements of the Building; and (b) all mechanical, electrical and plumbing systems that serve
the Building in general; and (c) the Building facilities common to all tenants including but
not limited to, the ceilings, walls and floors in the Common Areas.




B. Tenant shall not make or allow to be made any alterations, additions or improvements to the
Premises, without first obtaining the written consent of Landlord in each such instance, which
consent may be refused or given on such conditions as Landlord may elect. Prior to commencing
any such work and as a condition to obtaining Landlord’s consent, Tenant must furnish Landlord
with plans and specifications acceptable to Landlord; names and addresses of contractors
reasonably acceptable to Landlord; copies of contracts; necessary permits and approvals;
evidence of contractor’s and subcontractor’s insurance in accordance with Section 15. hereof;
and a payment bond or other security, all in form and amount satisfactory to Landlord. Tenant
shall be responsible for insuring that all such persons procure and maintain insurance
coverage against such risks, in such amounts and with such companies as Landlord may require,
including, but not limited to, Builder’s Risk and Worker’s Compensation insurance. All such
improvements, alterations or additions shall be constructed in a good and workmanlike manner
using Building Standard materials or other new materials of equal or greater quantity.
Landlord, to the extent reasonably necessary to avoid any disruption to the tenants and
occupants of the Building, shall have the right to designate the time when any such
alterations, additions




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	 	and improvements may be performed and to otherwise designate reasonable rules, regulations
and procedures for the performance of work in the Building. Upon completion, Tenant shall
furnish “as-built” plans, contractor’s affidavits and full and final waivers of lien and
receipted bills covering all labor and materials. All improvements, alterations and additions
shall comply with the insurance requirements, codes, ordinances, laws and regulations,
including without limitation, the Americans with Disabilities Act. Tenant shall reimburse
Landlord upon demand for all sums, if any, expended by Landlord for third party examination of
the architectural, mechanical, electrical and plumbing plans for any alterations, additions or
improvements. In addition, if Landlord so requests, Landlord shall be entitled to oversee the
construction of any alterations, additions or improvements that may affect the structure of
the Building or any of the mechanical, electrical, plumbing or life safety systems of the
Building. Landlord’s approval of Tenant’s plans and specifications for any work performed for
or on behalf of Tenant shall not be deemed to be representation by Landlord that such plans
and specifications comply with applicable insurance requirements, building codes, ordinances,
laws or regulations or that the alterations, additions and improvements constructed in
accordance with such plans and specifications will be adequate for Tenant’s use,
	 
	11.	 	Use of Electrical Services by Tenant.






A. All electricity used by Tenant in the Premises shall be paid for by Tenant through
inclusion in Base Rent and Basic Costs (except as provided in Section ll.B. below with
respect to excess usage). Landlord shall have the right at any time and from time-to-time
during the Lease Term to contract for electricity service from such providers of such
services as Landlord shall elect (each being an “Electric Service Provider”). Tenant shall
cooperate with Landlord, and the applicable Electric Service Provider, at all times and, as
reasonably necessary, shall allow Landlord and such Electric Service Provider reasonable
access to the Building’s electric lines, feeders, risers, wiring, and any other machinery
within the Premises. Landlord shall in no way be liable or responsible for any loss, damage,
or expense that Tenant may sustain or incur by reason of any change, failure, interference,
disruption, or defect in the supply or character of the electric energy furnished to the
Premises, or if the quantity or character of the electric energy supplied by the Electric
Service Provider is no longer available or suitable for Tenant’s requirements, and no such
change, failure, defect, unavailability, or unsuitability shall constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of rent, or relieve Tenant from any of its obligations under the Lease.




B. Tenant’s use of electrical services furnished by Landlord shall not exceed in voltage,
rated capacity, or overall load that which is standard for the Building. In the event Tenant
shall request that it be allowed to consume electrical services in excess of Building
Standard, Landlord may refuse to consent to such usage or may consent upon such conditions as
Landlord reasonably elects (including the installation of utility service upgrades,
submeters, air handlers or cooling units), and all such additional usage (to the extent
permitted by law), installation and maintenance thereof shall be paid for by Tenant as
Additional Rent. Landlord, at any time during the Lease Term, shall have the right to
separately meter electrical usage for the Premises or to measure electrical usage by survey
or any other method that Landlord, in its reasonable judgment, deems appropriate.


12. Entry by Landlord. Tenant shall permit Landlord or its agents or representatives to
enter into and upon any part of the Premises to inspect the same, or to show the Premises to
prospective purchasers, mortgagees, tenants (during the last (12) twelve months of the Lease Term
or earlier in connection with a potential relocation) or insurers, or to clean or make repairs,
alterations, or additions thereto, including any work that Landlord deems necessary for the
safety, protection or preservation of the Building or any occupants thereof, or to facilitate
repairs, alterations or additions to the Building or any other tenant’s premises. Except for any
entry by Landlord in an emergency situation or to provide normal cleaning and janitorial service,
Landlord shall provide Tenant with reasonable prior notice of any entry into the Premises, which
notice may be given verbally. Landlord shall have the right to temporarily close the Premises or
the Building to perform repairs, alterations or additions in the Premises or the Building,
provided that Landlord shall use reasonable efforts to perform all such work on weekends and after
Normal Business Hours. Entry by Landlord hereunder shall not constitute a constructive eviction or
entitle Tenant to any abatement or reduction of Rent by reason thereof.




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	13.	 	Assignment and Subletting.






A. Except in connection with a Permitted Transfer (defined in Section 13.E. below), Tenant shall
not assign, sublease, transfer or encumber any interest in this Lease or allow any third party
to use any portion of the Premises (collectively or individually, a
“Transfer”) without the
prior written consent of Landlord, which consent shall not be unreasonably withheld. Without
limitation, it is agreed that Landlord’s consent shall not be considered unreasonably withheld
if: (1) the proposed transferee’s financial condition does not meet the criteria Landlord uses
to select Building tenants having similar leasehold obligations; (2) the proposed transferee’s
business is not suitable for the Building considering the business of the other tenants and the
Building’s prestige, or would result in a violation of another tenant’s rights; (3) the
proposed transferee is a governmental agency or occupant of the Building; (4) Tenant is in
default beyond any applicable notice and cure period; or (5) any portion of the Building or the
Premises would likely become subject to additional or different laws as a consequence of the
proposed Transfer. Any attempted Transfer in violation of this Section 13, shall, exercisable in
Landlord’s sole and absolute discretion, be voidable. Consent by Landlord to one or more
Transfer(s) shall not operate as a waiver of Landlord’s rights to approve any subsequent
Transfer(s). In no event shall any Transfer or Permitted Transfer release or relieve Tenant from
any obligation under this Lease or any liability hereunder.




B. If Tenant requests Landlord’s consent to a Transfer, Tenant shall submit to Landlord
financial statements for the proposed transferee, a complete copy of the proposed assignment,
sublease and other information as Landlord may reasonably request. Landlord shall within thirty
(30) days after Landlord’s receipt of the required information and documentation either: (1)
consent or reasonably refuse consent to the Transfer in writing; (2) in the event of a proposed
assignment of this Lease or a proposed sublease of the entire Premises for the entire remaining
term of this Lease, terminate this Lease effective the first to occur of ninety (90) days
following written notice of such termination or the date that the proposed Transfer would have
come into effect. If Landlord shall fail to notify Tenant in writing of its decision within
such thirty (30) days period after the later of the date Landlord is notified in writing of the
proposed Transfer or the date Landlord has received all required information concerning the
proposed transferee and the proposed Transfer, Landlord shall be deemed to have refused to
consent to such Transfer, and to have elected to keep this Lease in full force and effect.
Tenant shall pay Landlord a review fee of $1,000.00 for Landlord’s review of any Permitted
Transfer or requested Transfer. In addition, Tenant shall reimburse Landlord for its actual
reasonable costs and expenses (including without limitation reasonable attorney’s fees)
incurred by Landlord in connection with Landlord’s review of such requested Transfer or
Permitted Transfer.




C. Tenant shall pay to Landlord fifty percent (50%) of all cash and other consideration which
Tenant receives as a result of a Transfer that is in excess of the rent payable to Landlord
hereunder for the portion of the Premises and Term covered by the Transfer within ten (10) days
following receipt thereof by Tenant. If Tenant is in Monetary Default (defined in Section 22.
below), Landlord may require that all sublease payments be made directly to Landlord, in which
case Tenant shall receive a credit against rent in the amount of any payments received (less
Landlord’s share of any excess).




D. Except as provided below with respect to a Permitted Transfer, if Tenant is a corporation,
limited liability company, partnership or similar entity, and the entity which owns or controls
a majority of the voting shares/rights at the time changes for any reason (including but not
limited to a merger, consolidation or reorganization), such change of ownership or control
shall constitute a Transfer. The foregoing shall not apply so long as Tenant is an entity whose
outstanding stock is listed on a nationally recognized security exchange, or if at least eighty
percent (80%) of its voting stock is owned by another entity, the voting stock of which is so
listed.




E. Tenant may assign its entire interest under this Lease or sublet the Premises to any entity
controlling or controlled by or under common control with Tenant or Tom Ward or to any
successor to Tenant by purchase, merger, consolidation or reorganization (hereinafter,
collectively, referred to as “Permitted Transfer”) without the consent of Landlord, provided:
(1) Tenant is not in default under this Lease; (2) if such proposed transferee is a successor
to Tenant by purchase, said proposed transferee shall acquire



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all or substantially all of the stock or assets of Tenant’s business or, if such proposed
transferee shall acquire all or substantially all of the stock or assets of Tenant’s business
or, if such proposed transferee is a successor to Tenant by merger, consolidation or
reorganization, the continuing or surviving corporation shall own all or substantially all of
the assets of Tenant; (3) such proposed transferee shall have a net worth which is at least
equal to the greater of Tenant’s net worth at the date of this Lease or Tenant’s net worth as
of the day prior to the proposed purchase, merger, consolidation or reorganization as
evidenced to Landlord’s reasonable satisfaction; (4) such proposed transferee operates the
business in the Premises for the Permitted Use and no other purpose; and (5) Tenant shall give
Landlord written notice at least thirty (30) days after to the effective date of the proposed
purchase, merger, consolidation or reorganization.




F. Tenant agrees that in the event Landlord withholds its consent to any Transfer contrary to
the provisions of this Section 13, Tenant’s sole remedy shall be to seek an injunction in
equity or compel performance by Landlord to give its consent and Tenant expressly waives any
right to damages in the event of such withholding by Landlord of its consent.


14. Mechanic’s Liens. Tenant will not permit any mechanic’s liens or other liens to be
placed upon the Premises, the Building, or the Property and nothing in this Lease shall be deemed
or construed in any way as constituting the consent or request of Landlord, express or implied, by
inference or otherwise, to any person for the performance of any labor or the furnishing of any
materials to the Premises, the Building, or the Property or any part thereof, nor as giving Tenant
any right, power, or authority to contract for or permit the rendering of any services or the
furnishing of any materials that would give rise to any mechanic’s or other liens against the
Premises, the Building, or the Property. In the event any such lien is attached to the Premises,
the Building, or the Property, then, in addition to any other right or remedy of Landlord,
Landlord may, but shall not be obligated to, discharge the same. Any amount paid by Landlord for
any of the aforesaid purposes including, but not limited to, reasonable attorneys’ fees, shall be
paid by Tenant to Landlord promptly on demand as Additional Rent. Tenant shall within ten (10)
days of receiving such notice of lien or claim (a) have such lien or claim released or (b) deliver
to Landlord a bond in form, content, amount and issued by surety, satisfactory to Landlord,
indemnifying, protecting, defending and holding harmless the Indemnities against all costs and
liabilities resulting from such lien or claim and the foreclosure or attempted foreclosure
thereof. Tenant’s failure to comply with the provisions of the foregoing sentence shall be deemed
an Event of Default under Section 22. hereof entitling Landlord to exercise all of its remedies
therefore without the requirement of any additional notice or cure period.





	15.	 	Insurance.






A. Landlord shall maintain such insurance on the Building and the Premises (other than on
Tenant’s Property or on any additional improvements constructed in the Premises by Tenant),
and such liability insurance in such amounts as Landlord elects. The cost of such insurance
shall be included as a part of the Basic Costs, and payments for losses thereunder shall be
made solely to Landlord or the mortgagees of Landlord as their interests shall appear.




B. Tenant shall maintain at its expense, (1) in an amount equal to full replacement cost,
special form (formerly known as all risk) property insurance on all of its personal property,
including removable trade fixtures and leasehold and tenant improvements, and Tenant’s
Property located in the Premises and in such additional amounts as are required to meet
Tenant’s obligations pursuant to Section 18 hereof and with deductibles in an amount
reasonably satisfactory to Landlord, and (ii) a policy or policies of commercial general
liability insurance (including endorsement or separate policy for owned or non-owned
automobile liability) with respect to its activities in the Building and on the Property, with
the premiums thereon fully paid on or before the due date, in an amount of not less than
$1,000,000 per occurrence per person coverage for bodily injury, property damage, personal
injury or combination thereof (the term “personal injury” as used herein means, without
limitation, false arrest, detention or imprisonment, malicious prosecution, wrongful entry,
liable and slander), provided that if only single limit coverage is available it shall be for
at least $1,000,000 per occurrence with an umbrella policy of at least $5,000,000 combined
single limit per occurrence. Tenant’s insurance policies shall name Landlord and Building
Manager as additional insureds and shall include coverage for the




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contractual liability of Tenant to indemnify Landlord and Building Manager pursuant to Section
16 of this Lease and shall have deductibles in an amount reasonably satisfactory to Landlord. Prior
to Tenant’s taking possession of the Premises, Tenant shall furnish evidence satisfactory to
Landlord of the maintenance and timely renewal of such insurance, and Tenant shall obtain and
deliver to Landlord a written obligation on the part of each insurer to notify Landlord at least
thirty (30) days prior to the modification, cancellation or expiration of such insurance policies.




C. The insurance requirements set forth in this Section 15 are independent of the waiver,
indemnification, and other obligations under this Lease and will not be construed or interpreted
in any way to restrict, limit or modify the waiver, indemnification and other obligations or to in
any way limit any party’s liability under this Lease. In addition to the requirements set forth in
Sections 15 and 16, the insurance required of Tenant under this Lease must be issued by an
insurance company with a rating of no less than A-VIII in the current Best’s Insurance Guide, or
A- in the current Standard & Poor Insurance Solvency Review, or in that is otherwise acceptable to
Landlord, and admitted to engage in the business of insurance in the state in which the Building
is located; be primary insurance for all claims under it and provide that any insurance carried by
Landlord and Landlord’s lenders is strictly excess, secondary and noncontributing with any
insurance carried by Tenant; and provide that insurance may not be cancelled, nonrenewed or the
subject of material change in coverage of available limits of coverage, except upon thirty (30)
days prior written notice to Landlord and Landlord’s lenders. Tenant will deliver either a
duplicate original or a legally enforceable certificate of insurance on all policies procured by
Tenant in compliance with Tenant’s obligations under this Lease, together with evidence
satisfactory to Landlord of the payment of the premiums therefor, to Landlord on or before the
date Tenant first occupies any portion of the Premises and upon the renewal of any policy.
Landlord must give its prior written approval to all deductibles and self-insured retentions under
Tenant’s policies. Tenant may comply with its insurance coverage requirements through a blanket
policy, provided Tenant, at Tenant’s sole expense, procures a “per location” endorsement, or
equivalent reasonably acceptable to Landlord, so that the general aggregate and other limits apply
separately and specifically to the Premises.




D. If Tenant’s business operations, conduct or use of the Premises or any other part of the
Property causes an increase in the premium for any insurance policy carried by Landlord, Tenant
will, within ten (10) days after receipt of notice from Landlord, reimburse Landlord for the
entire increase.




E. Neither Landlord nor Tenant shall be liable (by way of subrogation or otherwise) to the other
party (or to any insurance company insuring the other party) for any personal injury or loss or
damage to any of the property of Landlord or Tenant, as the case may be, with respect to their
respective property, the Building, the Property or the Premises or any addition or improvements
thereto, or any contents therein, to the extent covered by insurance carried or required to be
carried by a party hereto even though such loss might have been occasioned by the negligence or
willful acts or omissions of the Landlord or Tenant or their respective employees, agents,
contractors or invitees. Since this mutual waiver will preclude the assignment of any such claim
by subrogation (or otherwise) to an insurance company (or any other person), Landlord and Tenant
each agree to give each insurance company which has issued, or on the future may issue, policies
of insurance, with respect to the items covered by this waiver, written notice of the terms of
this mutual waiver, and to have such insurance policies properly endorsed, if necessary, to
prevent the invalidation of any of the coverage provided by such insurance policies by reason of
such mutual waiver. For the purpose of the foregoing waiver, the amount of any deductible
applicable to any loss or damage shall be deemed covered by, and recoverable by the insured under
the insurance policy to which such deductible relates. In the event that Tenant is permitted to
and self- insures any risk for which insurance is required to be carried under this Lease, or if
Tenant fails to carry any insurance required to be carried by Tenant pursuant to this Lease, then
all loss or damage to Tenant, its leasehold interest, its business, its property, the Premises or
any additions or improvements thereto or contents thereof shall be deemed covered by and
recoverable by Tenant under valid and collectible policies of insurance. Notwithstanding anything
to the contrary herein, Landlord shall not be liable to the Tenant or any insurance company (by
way of subrogation or otherwise) insuring the Tenant for any loss or damage to any property, or
bodily injury or personal injury or any resulting loss of income or losses from worker’s
compensation laws and benefits, even though such loss or damage might have



10









 






been occasioned by the negligence of Landlord, its agents or employees, or Building Manager,
if any such loss or damage was required to be covered by insurance pursuant to this Lease.


16. Indemnity. To the extent not expressly prohibited by law, neither Landlord nor Building
Manager nor any of their respective officers, directors, employees, members, managers, or agents
shall be liable to Tenant, or to Tenant’s agents, servants, employees, customers, licensees, or
invitees for any injury to person or damage to property caused by any act, omission, or neglect of
Tenant, its agents, servants, employees, customers, invitees, licensees or by any other person
entering the Building or upon the Property under the invitation of Tenant or arising out of the use
of the Property, Building or Premises by Tenant and the conduct of its business or out of a default
by Tenant in the performance of its obligations hereunder. Tenant hereby indemnifies and holds
Landlord and Building Manager and their respective officers, directors, employees, members,
managers and agents (“Indemnitees”), harmless from all liability and claims for any property
damage, or bodily injury or death of, or personal injury to, a person in or on the Premises, or at
any other place, including the Property or the Building and this indemnity shall be enforceable to
the full extent whether or not such liability and claims are the result of the sole, joint or
concurrent acts, negligent or intentional, or otherwise, of Tenant, or its employees, agents,
servants, customers, invitees or licensees. Such indemnity for the benefit of Indemnitees shall be
enforceable even if Indemnitees, or any one or more of them have or has caused or participated in
causing such liability and claims by their joint or concurrent acts, negligent or intentional, or
otherwise. Notwithstanding the terms of this Lease to the contrary, the terms of this Section shall
survive the expiration or earlier termination of this Lease.



17.
Damages from Certain Causes. To the extent not expressly prohibited by law, Landlord
shall not be liable to Tenant or Tenant’s employees, contractors, agents, invitees or customers,
for any injury to person or damage to property sustained by Tenant or any such party or any other
person claiming through Tenant resulting from any accident or occurrence in the Premises or any
other portion of the Building caused by the Premises or any other portion of the Building becoming
out of repair or by defect in or failure of equipment, pipes, or wiring, or by broken glass, or by
the backing up of drains, or by gas, water, steam, electricity, or oil leaking, escaping or
flowing into the Premises (except where due to Landlord’s willful failure to make repairs required
to be made pursuant to other provisions of this Lease, after the expiration of a reasonable time
after written notice to Landlord of the need for such repairs), nor shall Landlord be liable to
Tenant for any loss or damage that may be occasioned by or through the acts or omissions of other
tenants of the Building or of any other persons whomsoever, including, but not limited to riot,
strike, insurrection, war, court order, requisition, order of any governmental body or authority,
acts of God, fire or theft.



18.
Casualty Damage. If the Premises or any part thereof shall be damaged by fire or other
casualty, Tenant shall give prompt written notice thereof to Landlord. In case the Building shall
be so damaged that substantial alteration or reconstruction of the Building shall, in Landlord’s
sole opinion, be required (whether or not the Premises shall have been damaged by such casualty)
or in the event there is less than two (2) years of the Lease Term remaining or in the event
Landlord’s mortgagee should require that the insurance proceeds payable as a result of a casualty
be applied to the payment of the mortgage debt or in the event of any material uninsured loss to
the Building, Landlord may, at its option, terminate this Lease by notifying Tenant in writing of
such termination within thirty (30) days after the date of such casualty. If Landlord does not
thus elect to terminate this Lease, Landlord shall commence and proceed with reasonable diligence
to restore the Building, and the improvements located within the Premises, if any, for which
Landlord had financial responsibility pursuant to the Work Letter Agreement attached hereto as
Exhibit D (except that Landlord shall not be responsible for delays not within the control of
Landlord) to substantially the same condition in which it was immediately prior to the happening
of the casualty. Notwithstanding the foregoing, Landlord’s obligation to restore the Building, and
the improvements located within the Premises, if any, for which Landlord had financial
responsibility pursuant to the Work Letter Agreement, shall not require Landlord to expend for
such repair and restoration work more than the insurance proceeds actually received by the
Landlord as a result of the casualty and Landlord’s obligation to restore shall be further limited
so that Landlord shall not be required to expend for the repair and restoration of the
improvements located within the Premises, if any, for which Landlord had financial responsibility
pursuant to the Work Letter Agreement, more than the dollar amount of the Allowance, if any,
described in the Work Letter Agreement. When the repairs described in the preceding two sentences
have been completed by Landlord, Tenant shall complete the restoration of all improvements,
including furniture, fixtures and equipment, which are necessary to permit




11









 







Tenant’s reoccupancy of the Premises. Except as set forth above, all cost and expense of
reconstructing the Premises shall be borne by Tenant, and Tenant shall present Landlord with
evidence satisfactory to Landlord of Tenant’s ability to pay such costs prior to Landlord’s
commencement of repair and restoration of the Premises. Landlord shall not be liable for any
inconvenience or annoyance to Tenant or injury to the business of Tenant resulting in any way from
such damage or the repair thereof, except that, subject to the provisions of the next sentence,
Landlord shall allow Tenant a fair diminution of Rent during the time and to the extent the
Premises are unfit for occupancy. If the Premises or any other portion of the Property is damaged
by fee or other casualty resulting from the fault or negligence of Tenant or any of Tenant’s
agents, employees, or invitees, the rent hereunder shall not be diminished during the repair of
such damage and Tenant shall be liable to Landlord for the cost of the repair and restoration of
the Property caused thereby to the extent such cost and expense is not covered by insurance
proceeds.



19. Condemnation. If the whole or any substantial part of the Premises or if the Building
or any portion thereof which would leave the remainder of the Building unsuitable for use as an
office building comparable to its use on the Commencement Date, or if the land on which the
Building is located or any material portion thereof, shall be taken or condemned for any public or
quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain, or
by private purchase in lieu thereof, then Landlord may, at its option, terminate this Lease and the
rent shall be abated during the unexpired portion of this Lease, effective when the physical taking
of said Premises or said portion of the Building or land shall occur. In the event this Lease is
not terminated, the rent for any portion of the Premises so taken or condemned shall be abated
during the unexpired term of this Lease effective when the physical taking of said portion of the
Premises shall occur. All compensation awarded for any such taking or condemnation, or sale
proceeds in lieu thereof, shall be the property of Landlord, and Tenant shall have no claim
thereto, the same being hereby expressly waived by Tenant, except for any portions of such award or
proceeds which are specifically allocated by the condemning or purchasing party for the taking of
or damage to trade fixtures of Tenant, which Tenant specifically reserves to itself.



20. Hazardous Substances.





A. Tenant hereby represents and covenants to Landlord the following: No toxic or hazardous
substances or wastes, pollutants or contaminants (including, without limitation, asbestos,
urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls,
petroleum products including gasoline, fuel oil, crude oil and various constituents of such
products, radon, and any hazardous substance as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980,42 U.S.C. 9601- 9657, as amended (“CERCLA”)
(collectively, “Environmental Pollutants”) other than customary office supplies and cleaning
supplies stored and handled within the Premises in accordance with all applicable laws, will
be generated, treated, stored, released or disposed of, or otherwise placed, deposited in or
located on the Property, and no activity shall be taken on the Property, by Tenant, its
agents, employees, invitees or contractors, that would cause or contribute to (i) the Property
or any part thereof to become a generation, treatment, storage or disposal facility within the
meaning of or otherwise bring the Property within the ambit of the Resource Conservation and
Recovery Act of 1976 (“RCRA”), 42 U.S.C. 5901 et. seq., or any similar state law or local
ordinance, (ii) a release or threatened release of toxic or hazardous wastes or substances,
pollutants or contaminants, from the Property or any part thereof within the meaning of, or
otherwise result in liability in connection with the Property within the ambit of CERCLA, or
any similar state law or local ordinance, or (iii) the discharge of pollutants or effluents
into any water source or system, the dredging or filling of any waters, or the discharge into
the air of any emissions, that would require a permit under the Federal Water Pollution
Control Act, 33 U.S.C, 1251 et. seq., or the Clean Air Act, 42 U.S.C. 7401 et. seq., or any
similar state law or local ordinance.




B. Tenant expressly waives, to the extent allowed by law, any claims under federal, state or
other law that Tenant might otherwise have against Landlord relating to the condition of such
Property or the Premises or the Leasehold Improvements or personal property located thereon or
the presence in or contamination of the Property or the Premises by hazardous materials.
Tenant agrees to indemnify and hold Indemnitees (as defined in Section 16) harmless from and
against and to reimburse Indemnitees with respect to, any and all claims, demands, causes of
action, loss, damage, liabilities, costs and expenses (including attorneys’ fees and court
costs) of any and every kind or character, known or unknown, fixed or




12










 






contingent, asserted against or incurred by Landlord at any time and from time-to-time by
reason of or arising out of the breach of any representation or covenant contained in Section
20.A above.




C. Tenant shall immediately notify Landlord in writing of any release or threatened release of
toxic or hazardous wastes or substances, pollutants or contaminants of which Tenant has
knowledge whether or not the release is in quantities that would require under law the
reporting of such release to a governmental or regulatory agency,




D. Tenant shall also immediately notify Landlord in writing of, and shall contemporaneously
provide Landlord with a copy of:




	 	(1)	 	Any written notice of release of hazardous wastes or substances, pollutants
or contaminants on the Property that is provided by Tenant or any subtenant or other
occupant if the Premises to a governmental or regulatory agency;
	 
	 	(2)	 	Any notice of a violation, or a potential or alleged violation, of any
Environmental Law (hereinafter defined) that is received by Tenant or any subtenant
or other occupant of the Premises from any governmental or regulatory agency;
	 
	 	(3)	 	Any inquiry, investigation, enforcement, cleanup, removal, or other action
that is instituted or threatened by a governmental or regulatory agency against
Tenant or any subtenant or other occupant of the Premises and that relates to the
release or discharge of hazardous wastes or substances, pollutants or contaminants on
or from the Property;
	 
	 	(4)	 	Any claim that is instituted or threatened by any third-party against Tenant
or any subtenant or other occupant of the Premises and that relates to any release or
discharge of hazardous wastes or substances, pollutants or contaminants on or from
the Property; and
	 
	 	(5)	 	Any notice of the loss of any environmental operating permit by Tenant or
any subtenant or other occupant of the Premises.






E. As used herein “Environmental Laws” mean all present and future federal, state and
municipal laws, ordinances, rules and regulations applicable to environmental and ecological
conditions, and the rules and regulations of the U.S. Environmental Protection Agency, and
any other federal, state or municipal agency, or governmental board or entity relating to
environmental matters.


21. Americans with Disabilities Act. Tenant agrees to comply with all requirements of the
Americans with Disabilities Act (Public Law (July 26, 1990) (“ADA”) applicable to the Premises and
such other current acts or other subsequent acts, (whether federal or state) addressing like
issues as are enacted or amended. Tenant agrees to indemnify and hold Landlord harmless from any
and all expenses, liabilities, costs or damages suffered by Landlord as a result of additional
obligations which may be imposed on the Building or the Property under of such acts by virtue of
Tenant’s operations and/or occupancy, including the alleged negligence of the Landlord. Tenant
acknowledges that it will be wholly responsible for any provision of the Lease which could
arguably be construed as authorizing a violation of the ADA. Any such provision shall be
interpreted in a manner which permits compliance with the ADA and is hereby amended to permit such
compliance.



22.
Events of Default





A. The following events shall be deemed to be “Events of Default” under this Lease:




	 	(1)	 	Tenant shall fail to pay when due any Base Rent, Additional Rent or other
amount payable by Tenant to Landlord under this Lease (hereinafter sometimes referred
to as a “Monetary Default”).




13









 






	 	(2)	 	Any failure by Tenant (other than a Monetary Default) to comply with any term,
provision or covenant of this Lease, which failure is not cured within thirty (30)
days after delivery to Tenant of notice of the occurrence of such failure
provided, however, that if the term, condition, covenant or obligation to be
performed by Tenant is of such nature that the same cannot reasonably be performed
within such thirty-day period, such default shall be deemed to have been cured if
Tenant commences such performance within said thirty-day period and thereafter
diligently undertakes to complete the same, and in fact, completes same within
sixty (60) days after notice.
	 
	 	(3)	 	Any failure by Tenant to observe or perform any of the covenants with
respect to (a) assignment and subletting set forth in Section 13, (b) mechanic’s
liens set forth in Section 14, or (c) insurance set forth in Section 15.
	 
	 	(4)	 	Tenant or any Guarantor shall (a) become insolvent, (b) make a transfer in
fraud of creditors (c) make an assignment for the benefit of creditors, (d) admit in
writing its inability to pay its debts as they become due, (e) file a petition under
any section or chapter of the United States Bankruptcy Code, as amended, pertaining
to bankruptcy, or under any similar law or statute of the United States or any State
thereof, or Tenant or any Guarantor shall be adjudged bankrupt or insolvent in
proceedings filed against Tenant or any Guarantor thereunder; or a petition or answer
proposing the adjudication of Tenant or any Guarantor as a bankrupt or its
reorganization under any present or future federal or state bankruptcy or similar law
shall be filed in any court and such petition or answer shall not be discharged or
denied within sixty (60) days after the filing thereof.
	 
	 	(5)	 	A receiver or trustee shall be appointed for all or substantially all of the
assets of Tenant or any Guarantor or of the Premises or of any of Tenant’s property
located thereon in any proceeding brought by Tenant or any Guarantor, or any such
receiver or trustee shall be appointed in any proceeding brought against Tenant or
any Guarantor and shall not be discharged within sixty (60) days after such
appointment or Tenant or such Guarantor shall consent to or acquiesce in such
appointment.
	 
	 	(6)	 	The leasehold estate hereunder shall be taken on execution or other process
of law in any action against Tenant.
	 
	 	(7)	 	Intentionally Omitted.
	 
	 	(8)	 	Intentionally Omitted.
	 
	 	(9)	 	The liquidation, termination, dissolution, forfeiture of right to do
business or death of Tenant or any Guarantor.




23. Remedies.





A. Upon the occurrence of any Event of Default, Landlord shall have the following rights and
remedies, in addition to those allowed by law or equity, any one or more of which may be
exercised without further notice to or demand upon Tenant and which may be pursued
successively or cumulatively as Landlord may elect:



	 	(1)	 	Landlord may re-enter the Premises and cure any default of Tenant, in which event
Tenant shall, upon demand, reimburse Landlord as Additional Rent for any cost and expenses
which Landlord may incur to cure such default; and Landlord shall not be liable to Tenant
for any loss or damage which Tenant may sustain by reason of Landlord’s action, regardless
of whether caused by Landlord’s negligence or otherwise.




14









 






	 	(2)	 	Landlord may terminate
this Lease by giving to Tenant notice of Landlord’s election to do so, in which event the
Term shall end, and all right, title and interest of Tenant hereunder shall expire, on the
date stated in such notice;
	 
	 	(3)	 	Landlord may terminate the right of Tenant to possession of the Premises without
terminating this Lease by giving notice to Tenant that Tenant’s right to possession shall
end on the date stated in such notice, whereupon the right of Tenant to possession of the
Premises or any part thereof shall cease on the date stated in such notice; and
	 
	 	(4)	 	Landlord may enforce the provisions of this Lease and may enforce and protect the
rights of Landlord hereunder by a suit or suits in equity or at law for the specific
performance of any covenant or agreement contained herein, or for the enforcement of any
other appropriate legal or equitable remedy, including recovery of all moneys due or to
become due from Tenant under any of the provisions of this Lease.






Landlord shall not be required to serve Tenant with any notices or demands as a prerequisite to
its exercise of any of its rights or remedies under this Lease, other than those notices and
demands specifically required under this Lease. TENANT EXPRESSLY WAIVES THE SERVICE OF ANY
STATUTORY DEMAND OR NOTICE WHICH IS A PREREQUISITE TO LANDLORD’S COMMENCEMENT OF EVICTION
PROCEEDINGS AGAINST TENANT. TENANT WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LAWSUIT BROUGHT BY
LANDLORD TO RECOVER POSSESSION OF THE PREMISES FOLLOWING LANDLORD’S TERMINATION OF THIS LEASE
PURSUANT TO SECTION 23A(2) OR THE RIGHT OF TENANT TO POSSESSION OF THE PREMISES PURSUANT TO
SECTION 23A(3) AND ON ANY CLAIM FOR DELINQUENT RENT WHICH LANDLORD MAY JOIN IN ITS LAWSUIT TO
RECOVER POSSESSION.




B. If Landlord exercises either of the remedies provided in Sections 23.A.(2) or 23.A.(3), Tenant
shall surrender possession and vacate the Premises and immediately deliver possession thereof to
Landlord, and Landlord may re-enter and take complete and peaceful possession of the Premises,
with process of law, full and complete license to do so being hereby granted to Landlord, and
Landlord may remove all occupants and property therefrom, using such force as may be necessary to
the extent allowed by law, without being deemed guilty in any manner of trespass, eviction or
forcible entry and detainer and without relinquishing Landlord’s right to Rent or any other right
given to Landlord hereunder or by operation of law.




C. If Landlord terminates the right of Tenant to possession of the Premises without terminating
this Lease, Landlord shall have the right to immediate recovery of all amounts then due hereunder.
Such termination of possession shall not release Tenant, in whole or in part, from Tenant’s
obligation to pay Rent hereunder for the full Term, and Landlord shall have the right, from time
to time, to recover from Tenant, and Tenant shall remain liable for, all Base Rent, Additional
Rent and any other sums accruing as they become due under this Lease during the period from the
date of such notice of termination of possession to the stated end of the Term. In any such case,
Landlord may relet the Premises or any part thereof for the account of Tenant for such rent, for
such time (which may be for a term extending beyond the Term) and upon such terms as Landlord
shall determine and may collect the rents from such reletting. Landlord shall not be required to
accept any tenant offered by Tenant or to observe any instructions given by Tenant relative to
such reletting. Also, in any such case, Landlord may make repairs, alterations and additions in or
to the Premises and redecorate the same to the extent deemed by Landlord necessary or desirable
and in connection therewith change the locks to the Premises, and Tenant upon demand shall pay the
cost of all of the foregoing together with Landlord’s expenses of reletting. The rents from any
such reletting shall be applied first to the payment of the expenses of reentry, redecoration,
repair and alterations and the expenses of reletting and second to the payment of Rent herein
provided to be paid by Tenant. Any excess or residue shall operate only as an offsetting credit
against the amount of Rent due and owing as the same thereafter becomes due and payable hereunder,
and the use of such offsetting credit to reduce the amount of Rent due Landlord, if any, shall not
be deemed to give Tenant any right, title or interest in or to such excess or residue and any such



15









 







excess or residue shall belong to Landlord solely, and in no event shall Tenant be entitled
to a credit on its indebtedness to Landlord in excess of the aggregate sum (including Base Rent and
Additional Rent) which would have been paid by Tenant for the period for which the credit to Tenant
is being determined, had no Event of Default occurred. No such reentry or repossession, repairs,
alterations and additions, or reletting shall be construed as an eviction or ouster of Tenant or as
an election on Landlord’s part to terminate this Lease, unless a written notice of such intention
is given to Tenant, or shall operate to release Tenant in whole or in part from any of Tenant’s
obligations hereunder, and Landlord, at any time and from time to time, may sue and recover
judgment for any deficiencies remaining after the application of the proceeds of any such
reletting.




D. If this Lease is terminated by Landlord pursuant to Section 23 .A.(2), Landlord shall be
entitled to recover from Tenant all Rent accrued and unpaid for the period up to and including
such termination date, as well as all other additional sums payable by Tenant, or for which Tenant
is liable or for which Tenant has agreed to indemnify Landlord under any of the provisions of this
Lease, which may be then owing and unpaid, and all costs and expenses, including without
limitation court costs and attorneys’ fees incurred by Landlord in the enforcement of its rights
and remedies hereunder, and, in addition, Landlord shall be entitled to recover as damages for
loss of the bargain and not as a penalty (i) the unamortized portion of any concessions offered by
Landlord to Tenant in connection with this Lease, including without limitation Landlord’s
contribution to the cost of tenant improvements and alterations, if any, installed by either
Landlord or Tenant pursuant to this Lease or any work letter in connection with this Lease, (ii)
the aggregate sum which at the time of such termination represents the excess, if any, of the
present value of the aggregate rents which would have been payable after the termination date had
this Lease not been terminated, including, without limitation, Base Rent at the annual rate or
respective annual rates for the remainder of the Term provided for in this Lease and the amount
projected by Landlord to represent Additional Rent for the remainder of the Term over the then
present value of the then aggregate fair rent value of the Premises for the balance of the Term,
such present worth to be computed in each case on the basis of a ten percent (10%) per annum
discount from the respective dates upon which such Rents would have been payable hereunder had
this Lease not been terminated, and (iii) any damages in addition thereto, including without
limitation reasonable attorneys’ fees and court costs, which Landlord sustains as a result of the
breach of any of the covenants of this Lease other than for the payment of Rent.




E. Landlord shall use commercially reasonable efforts to mitigate any damages resulting from an
Event of Default by Tenant under this Lease. Landlord’s obligation to mitigate damages after an
Event of Default by Tenant under this Lease shall be satisfied in full if Landlord undertakes to
lease the Premises to another tenant (a “Substitute Tenant”) in accordance with the following
criteria:




	 	(1)	 	Landlord shall have no obligations to solicit or entertain negotiations with any other
prospective tenants for the Premises until Landlord obtains full and complete possession
of the Premises including, without limitation, the final and unappealable legal right to
relet the Premises free of any claim of Tenant;
	 
	 	(2)	 	Landlord shall not be obligated to lease or show the Premises, on a priority basis,
offer the Premises to a prospective tenant when other premises in the Building suitable
for that prospective tenant’s use are available;
	 
	 	(3)	 	Landlord shall not be obligated to lease the Premises to a Substitute Tenant for a
Rent less than the current fair market Rent then prevailing for similar uses in comparable
buildings in the same market area as the Building, nor shall Landlord be obligated to
enter into a new lease under other terms and conditions that are unacceptable to Landlord
under Landlord’s then current leasing policies for comparable space in the Building;




16









 






	 	(4)	 	Landlord shall not be obligated to enter into a lease with a Substitute Tenant
whose use would:






	 	(i)	 	violate any restriction, covenant, or requirement contained in the lease of
another
tenant of the Building;
	 
	 	(ii)	 	adversely affect the reputation of the Building; or
	 
	 	(iii)	 	be incompatible with the operation of the Building as an office building;






	 	(5)	 	Landlord shall not be obligated to enter into a lease with any proposed Substitute
Tenant which does not have, in Landlord’s reasonable opinion, sufficient financial
resources to operate the Premises in a first class manner; and
	 
	 	(6)	 	Landlord shall not be required to expend any amount of money to alter, remodel, or
otherwise make the Premises suitable for use by a proposed Substitute Tenant unless:






	 	(i)	 	Tenant pays any such sum to Landlord in advance of Landlord’s execution of a
lease with such tenant (which payment shall not be in lieu of any damages or
other sums to which Landlord may be entitled as a result of Tenant’s default
under this Lease); or
	 
	 	(ii)	 	Landlord, in Landlord’s reasonable discretion, determines that any
such expenditure is financially justified in connection with entering into any
such substitute lease.






F. All property of Tenant removed from the Premises by Landlord pursuant to any provision of this
Lease or applicable law may be handled, removed or stored by Landlord at the cost and expense of
Tenant, and Landlord shall not be responsible in any event for the value, preservation or
safekeeping thereof. Tenant shall pay Landlord for all expenses incurred by Landlord with respect
to such removal and storage so long as the same is in Landlord’s possession or under Landlord’s
control. All such property not removed from the Premises or retaken from storage by Tenant within
thirty (30) days after the end of the Term or the termination of Tenant’s right to possession of
the Premises, however terminated, at Landlord’s option, shall be conclusively deemed to have been
conveyed by Tenant to Landlord as by bill of sale without further payment or credit by Landlord to
Tenant.




G. Tenant hereby grants to Landlord a first lien upon the interest of Tenant under this Lease to
secure the payment of moneys due under this Lease, which lien may be enforced in equity, and
Landlord shall be entitled as a matter of right to have a receiver appointed to take possession
of the Premises and relet the same under order of court.




H. If Tenant is adjudged bankrupt, or a trustee in bankruptcy is appointed for Tenant, Landlord
and Tenant, to the extent permitted by law, agree to request that the trustee in bankruptcy
determine within sixty (60) days thereafter whether to assume or to reject this Lease.




I. The receipt by Landlord of less than the full rent due shall not be construed to be other than
a payment on account of rent then due, nor shall any statement on Tenant’s check or any letter
accompanying Tenant’s check be deemed an accord and satisfaction, and Landlord may accept such
payment without prejudice to Landlord’s right to recover the balance of the rent due or to pursue
any other remedies provided in this lease. The acceptance by Landlord of rent hereunder shall not
be construed to be a waiver of any breach by Tenant of any term, covenant or condition of this
Lease. No act or omission by Landlord or its employees or agents during the term of this Lease
shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such a
surrender shall be valid unless in writing and signed by Landlord.



17









 






J. In the event of any litigation between Tenant and Landlord to enforce any provision of this
Lease or any right of either party hereto, the unsuccessful party to such litigation shall pay
to the successful party all costs and expenses, including reasonable attorney’s fees, incurred
therein. Furthermore, if Landlord, without fault, is made a party to any litigation instituted
by or against Tenant, Tenant shall indemnify Landlord against, and protect, defend, and save
it harmless from, all costs and expenses, including reasonable attorney’s fees, incurred by it
in connection therewith. If Tenant, without fault, is made party to any litigation instituted
by or against Landlord, Landlord shall indemnify Tenant against, and protect, defend, and save
it harmless from, all costs and expenses, including reasonable attorney’s fees, incurred by it
in connection therewith.


24.
No Waiver. Failure of Landlord to declare any default immediately upon its occurrence,
or delay in taking any action in connection with an event of default, shall not constitute a
waiver of such default, nor shall it constitute an estoppel against Landlord, but Landlord shall
have the right to declare the default at any time and take such action as is lawful or authorized
under this Lease. Failure by Landlord to enforce its rights with respect to any one default shall
not constitute a waiver of its rights with respect to any subsequent default.



25.
Peaceful Enjoyment. Tenant shall, and may peacefully have, hold, and enjoy the
Premises, subject to the other terms hereof, provided that Tenant pays the Rent and other sums
herein recited to be paid by Tenant and timely performs all of Tenant’s covenants and agreements
herein contained. This covenant and any and all other covenants of Landlord shall be binding upon
Landlord and its successors only with respect to breaches occurring during its or their respective
periods of ownership of the Landlord’s interest hereunder.



26.
Intentionally Omitted.



27.
Holding Over. In the event of holding over by Tenant after expiration or other
termination of this Lease or in the event Tenant continues to occupy the Premises after the
termination of Tenant’s right of possession pursuant to Section 23.A(3) hereof, occupancy of the
Premises subsequent to such termination or expiration shall be that of a tenancy at sufferance and
in no event for month-to-month or year-to-year. Tenant shall, throughout the entire holdover
period, be subject to all the terms and provisions of this Lease and shall pay for its use and
occupancy an amount (on a per month basis without reduction for any partial months during any such
holdover) equal to one hundred fifty percent (or 150%) of the Base Rent and Additional Rent which
would have been applicable had the Lease Term continued through the period of such holding over by
Tenant. No holding over by Tenant or payments of money by Tenant to Landlord after the expiration
of the Lease Term shall be construed to extend the Lease Term or prevent Landlord from recovery of
immediate possession of the Premises by summary proceedings or otherwise unless Landlord has sent
written notice to Tenant that Landlord has elected to extend the Lease Term. In addition to the
obligation to pay the amounts set forth above during any such holdover period, Tenant shall also
be liable to Landlord for all damages, including, without limitation, any consequential damages,
which Landlord may suffer by reason of any holding over by Tenant and Tenant shall also indemnify
Landlord against any and all claims made by any other tenant or prospective tenant against
Landlord for delay by Landlord in delivering possession of the Premises to such other tenant or
prospective tenant.



28.
Subordination to Mortgage/Estoppel Certificate. Tenant accepts this Lease
subject and subordinate to any mortgage, deed of trust or other lien presently existing or
hereafter arising upon the Premises, or upon the Building and/or the Property and to any renewals,
modifications, refinancings and extensions thereof, but Tenant agrees that any such mortgagee
shall have the right at any time to subordinate such mortgage, deed of trust or other lien to this
Lease on such terms and subject to such conditions as such mortgagee may deem appropriate in its
discretion. The provisions of the foregoing sentence shall be self-operative and no further
instrument of subordination shall be required. However, Landlord is hereby irrevocably vested with
full power and authority to subordinate this Lease to any mortgage, deed of trust or other lien now
existing or hereafter placed upon the Premises, or the Building and/or the Property and Tenant
agrees within ten (10) days after demand to execute such further instruments subordinating this
Lease or attorning to the holder of any such liens as Landlord may request. The terms of this
Lease are subject to approval by the Landlord’s existing lender(s) and any lender(s) who, at the
time of the execution of this Lease, have committed or are considering committing to Landlord to
make a loan secured by all or any





18









 




portion of the Property, and such approval is a condition precedent to Landlord’s obligations
hereunder. In the event that Tenant should fail to execute any subordination or other agreement
required by this Section promptly as requested, Tenant hereby irrevocably constitutes Landlord as
its attorney-in-fact to execute such instrument in Tenant’s name, place and stead, it being agreed
that such power is one coupled with an interest in Landlord and is accordingly irrevocable. Tenant
agrees that it will from time-to-time upon request by Landlord execute and deliver to such persons
as Landlord shall request a statement in recordable form certifying that this Lease is unmodified
and in full force and effect (or if there have been modifications, that the same is in full force
and effect as so modified), stating the dates to which rent and other charges payable under this
Lease have been paid, stating that Landlord is not in default hereunder (or if Tenant alleges a
default stating the nature of such alleged default) and further stating such other matters as
Landlord shall reasonably require. Tenant agrees periodically to furnish within ten (10) days after
so requested by Landlord, ground lessor or the holder of any deed of trust, mortgage or security
agreement covering the Building, the Property, or any interest of Landlord therein, a certificate
signed by Tenant certifying (a) that this Lease is in full force and effect and unmodified (or if
there have been modifications, that the same is in full force and effect as modified and stating
the modifications), (b) as to the Commencement Date and the date through which Base Rent and
Tenant’s Additional Rent have been paid, (c) that Tenant has accepted possession of the Premises
and that any improvements required by the terms of this Lease to be made by Landlord have been
completed to the satisfaction of Tenant, (d) that except as stated in the certificate no rent has
been paid more than thirty (30) days in advance of its due date, (e) that the address for notices
to be sent to Tenant is as set forth in this Lease (or has been changed by notice duly given and is
as set forth in the certificate), (f) that except as stated in the certificate, Tenant, as of the
date of such certificate, has no charge, lien, or claim of offset against rent due or to become
due, (g) that except as stated in the certificate, Landlord is not then in default under this
Lease, (h) as to the amount of the Approximate Rentable Area of the Premises then occupied by
Tenant, (i) that there are no renewal or extension options, purchase options, rights of first
refusal or the like in favor of Tenant except as set forth in this Lease, (j) the amount and nature
of accounts payable to Landlord under terms of this Lease, and (k) as to such other matters as may
be requested by Landlord or ground lessor or the holder of any such deed of trust, mortgage or
security agreement. Any such certificate may be relied upon by any ground lessor, prospective
purchaser, secured party, mortgagee or any beneficiary under any mortgage, deed of trust on the
Building or the Property or any part thereof or interest of Landlord therein.



29. Notice. Any notice required or permitted to be given under this Lease or by law shall
be deemed to have been given if it is written and delivered in person or mailed by Registered or
Certified mail, postage prepaid, or sent by a nationally recognized overnight delivery service to
the party who is to receive such notice at the address specified in Section 1.Y. of this Lease.
When so mailed, the notice shall be deemed to have been given two (2) business days after the date
it was mailed. When sent by overnight delivery service, the notice shall be deemed to have been
given on the next business day after deposit with such overnight delivery service. The address
specified in Section 1.Y. of this Lease may be changed from time to time by giving written notice
thereof to the other party.



30. Intentionally Omitted.



31. Surrender of Premises. Upon the termination, whether by lapse of time or otherwise, or
upon any termination of Tenant’s right to possession without termination of the Lease, Tenant will
at once surrender possession and vacate the Premises, together with all Leasehold Improvements
(except those Leasehold Improvements Tenant is required to remove pursuant to Section 8 hereof),
to Landlord in good condition and repair, ordinary wear and tear excepted; conditions existing
because of Tenant’s failure to perform maintenance, repairs or replacements as required of Tenant
under this Lease shall not be deemed “reasonable wear and tear.” Tenant shall surrender to
Landlord all keys to the Premises and make known to Landlord the explanation of all combination
locks, which Tenant is permitted to leave on the Premises. Subject to the Landlord’s rights under
Section 23 hereof, if Tenant fails to remove any of Tenant’s Property within one (1) day after the
termination of this Lease, or Tenant’s right to possession hereunder, Landlord, at Tenant’s sole
cost and expenses, shall be entitled to remove and/or store such Tenant’s Property and Landlord
shall be in no event be responsible for the value, preservation or safekeeping thereof. Tenant
shall pay Landlord, upon demand, any and all reasonable expenses caused by such removal and all
storage charges against such property so long as the same shall be in possession of Landlord or
under the control of Landlord. In addition,




19









 







if Tenant fails to remove any Tenant’s Property from the Premises or storage, as the case may be,
within ten (10) days after written notice from Landlord, Landlord, at its option, may deem all or
any part of such Tenant’s Property to have been abandoned by Tenant and title thereof shall
immediately pass to Landlord under this Lease as by a bill of sale.



32. Rights Reserved to Landlord. Landlord reserves the following rights, exercisable
without notice, except as provided herein, and without liability to Tenant for damage or injury to
property, person or business and without affecting an eviction or disturbance of Tenant’s use or
possession or giving rise to any claim for setoff or abatement of rent or affecting any of Tenant’s
obligations under this Lease: (1) upon thirty (30) days prior notice to change the name or street
address of the Building; (2) to install and maintain signs on the exterior and interior of the
Building; (3) to designate and approve window coverings to present a uniform exterior appearance;
(4) to make any decorations, alterations, additions, improvements to the Building or Property, or
any part thereof (including, with prior notice, the Premises) which Landlord shall desire, or deem
necessary for the safety, protection, preservation or improvement of the Building or Property, or
as Landlord may be required to do by law; (5) to have access to the Premises at reasonable hours to
perform its duties and obligations and to exercise its rights under this Lease; (6) to retain at
all times and to use in appropriate instances, pass keys to all locks within and to the Premises;
(7) to approve the weight, size, or location of heavy equipment, or articles within the Premises;
(8) to close or restrict access to the Building at all times other than Normal Business Hours
subject to Tenant’s right to admittance at all times under such regulations as Landlord may
prescribe from time to time, or to close (temporarily or permanently) any of the entrances to the
Building;; provided Landlord shall have the right to restrict or prohibit access to the Building or
the Premises at any time Landlord determines it is necessary to do so to minimize the risk of
injuries or death to persons or damage to property (9) to change the arrangement and/or location of
entrances of passageways, doors and doorways, corridors, elevators, stairs, toilets and public
parts of the Building or Property; (10) to regulate access to telephone, electrical and other
utility closets in the Building and to require use of designated contractors for any work involving
access to the same; (11) if Tenant has vacated the Premises during the last six (6) months of the
Lease Term, to perform additions, alterations and improvements to the Premises in connection with a
reletting or anticipated reletting thereof without being responsible or liable for the value or
preservation of any then existing improvements to the Premises; and (12) to grant to anyone the
exclusive right to conduct any business or undertaking in the Building provided Landlord’s exercise
of its rights under this clause 12, shall not be deemed to prohibit Tenant from the operation of
its business in the Premises and shall not constitute a constructive eviction.





	33.	 	Miscellaneous.






A. If any term or provision of this Lease, or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease,
or the application of such term or provision to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby, and each term
and provision of this Lease shall be valid and enforced to the fullest extent permitted by
law.




B. Tenant agrees not to record this Lease or any short form or memorandum hereof.




C. 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 in which the Building is
located.




D. Events of “Force Majeure” shall include strikes, riots, acts of God, shortages of labor or
materials, war, governmental laws, regulations or restrictions, or any other cause whatsoever
beyond the control of Landlord or Tenant, as the case may be. Whenever a period of time is
herein prescribed for the taking of any action by Landlord or Tenant (other than the payment
of Rent and all other such sums of money as shall become due hereunder), such party shall not
be liable or responsible for, there shall be excluded from the computation of such period of
time, any delays due to events of Force Majeure.




E. Except as expressly otherwise herein provided, with respect to all required acts of Tenant,
time is of the essence of this Lease.



20









 






F. Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and
obligations hereunder and in the Building and Property referred to herein, and in such event and
upon such transfer Landlord shall be released from any further obligations hereunder, and Tenant
agrees to look solely to such successor in interest of Landlord for the performance of such
obligations.




G. Tenant hereby represents to Landlord that it has dealt directly with and only with the Broker
as a broker in connection with this Lease. Landlord and Tenant hereby indemnify and hold each
other harmless against any loss, claim, expense or liability with respect to any commissions or
brokerage fees claimed on account of the execution and/or renewal of this Lease due to any action
of the indemnifying party. Landlord and Tenant each warrant to the other that it has not dealt
with any broker or agent in connection with the negotiation or execution of this Lease except
Landlord’s Broker (Grubb & Ellis | Levy Beffort). Tenant and Landlord shall each indemnify the
other against all costs, expenses, attorneys’ fees, and other liability for commissions or other
compensation claimed by any broker or agent claiming the same by, through, or under the
indemnifying party. Commissions payable to Tenant’s Broker shall be paid by Landlord only if a
written commission agreement has been executed by and between Landlord and such broker. Landlord
shall be responsible for payment of all commissions to Landlord’s Broker.




H. If there is more than one Tenant, or if the Tenant as such is comprised of more than one person
or entity, the obligations hereunder imposed upon Tenant shall be joint and several obligations of
all such parties. All notices, payments, and agreements given or made by, with or to any one of
such persons or entities shall be deemed to have been given or made by, with or to all of them.




I. The individual signing this Lease on behalf of Tenant represents (1) that such individual is
duly authorized to execute or attest and deliver this Lease on behalf of Tenant in accordance with
the organizational documents of Tenant; (2) that this Lease is binding upon Tenant; (3) that
Tenant is duly organized and legally existing in the state of its organization, and is qualified
to do business in the state in which the Premises is located.




J. Tenant acknowledges that the financial capability of Tenant to perform its obligations
hereunder is material to Landlord and that Landlord would not enter into this Lease but for its
belief, based on its review of Tenant’s financial statements, that Tenant is capable of performing
such financial obligations. Tenant hereby represents, warrants and certifies to Landlord that its
financial statements previously furnished to Landlord were at the time given true and correct in
all material respects and that there have been no material subsequent changes thereto as of the
date of this Lease.




K. Notwithstanding anything to the contrary contained in this Lease, the expiration of the Lease
Term, whether by lapse of time or otherwise, shall not relieve Tenant from Tenant’s obligations
accruing prior to the expiration of the Lease Term, and such obligations shall survive any such
expiration or other termination of the Lease Term.




L. Landlord has delivered a copy of this Lease to Tenant for Tenant’s review only, and the
delivery hereof does not constitute an offer to Tenant or an option. This Lease shall not be
effective until an original of this Lease executed by both Landlord and Tenant and an original
Guaranty, if applicable, executed by each Guarantor is delivered to and accepted by Landlord, and
this Lease has been approved by Landlord’s mortgagee, if required.




M. Landlord and Tenant understand, agree and acknowledge that (i) this Lease has been freely
negotiated by both parties; and (ii) in any controversy, dispute or contest over the meaning,
interpretation, validity, or enforceability of this Lease or any of its terms or
conditions, there shall be not inference, presumption, or conclusion drawn whatsoever against
either party by virtue of that party having drafted this Lease or any portion thereof.




N. The headings and titles to the paragraphs of this Lease are for convenience only and shall
have no affect upon the construction or interpretation of any part hereof.




21










 






O. Receipt by Landlord of Tenant’s keys to the Premises shall not constitute an acceptance
of surrender of the Premises.



34. Entire Agreement. This Lease,including the following Exhibits:




Exhibit A — Outline and Location of Premises

Exhibit B — Rules and Regulations

Exhibit C — Payment of Basic Costs

Exhibit D — Work Letter

Exhibit E — Additional Provisions



constitutes the entire agreement between the parties hereto with respect to the subject matter of
this Lease and supersedes all prior agreements and understandings between the parties related to
the Premises, including all lease proposals, letters of intent and similar documents. Tenant
expressly acknowledges and agrees that Landlord has not made and is not making, and Tenant, in
executing and delivering this Lease, is not relying upon, any warranties, representations,
promises or statements, except to the extent that the same are expressly set forth in this Lease.
All understandings and agreements heretofore had between the parties are merged in this Lease
which alone fully and completely expresses the agreement of the parties, neither party relying
upon any statement or representation not embodied in this Lease. This Lease may be modified only
be a written agreement signed by Landlord and Tenant. Landlord and Tenant expressly agree that
there are and shall be no implied warranties of merchantability, habitability, suitability,
fitness for a particular purpose or of any other kind arising out of this Lease, all of which are
hereby waived by Tenant, and that there are no warranties which extend beyond those expressly set
forth in this Lease.



35. LIMITATION OF LIABILITY EXCEPT TO THE EXTENT SPECIFICALLY ADDRESSED HEREIN, TENANT
SHALL NOT HAVE THE RIGHT TO AN ABATEMENT OF RENT OR TO TERMINATE THIS LEASE AS A RESULT OF
LANDLORD’S DEFAULT AS TO ANY COVENANT OR AGREEMENT CONTAINED IN THIS LEASE OR AS A RESULT OF THE
BREACH OF ANY PROMISE OR INDUCEMENT IN CONNECTION HEREWITH, WHETHER IN THIS LEASE OR ELSEWHERE AND
TENANT HEREBY WAIVES SUCH REMEDIES OF ABATEMENT OF RENT AND TERMINATION. TENANT HEREBY AGREES THAT
TENANT’S REMEDIES FOR DEFAULT HEREUNDER OR IN ANY WAY ARISING IN CONNECTION WITH THIS LEASE
INCLUDING ANY BREACH OF ANY PROMISE OR INDUCEMENT OR WARRANTY, EXPRESSED OR IMPLIED, SHALL BE
LIMITED TO SUIT FOR DIRECT AND PROXIMATE DAMAGES PROVIDED THAT TENANT HAS GIVEN THE NOTICES AS
HEREINAFTER REQUIRED. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD TO TENANT FOR ANY DEFAULT BY LANDLORD UNDER THIS LEASE SHALL BE LIMITED TO
THE INTEREST OF LANDLORD IN THE BUILDING AND THE PROPERTY AND TENANT AGREES TO LOOK SOLELY TO
LANDLORD’S INTEREST IN THE BUILDING AND THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT AGAINST THE
LANDLORD, IT BEING INTENDED THAT LANDLORD SHALL NOT BE PERSONALLY LIABLE FOR ANY JUDGMENT OR
DEFICIENCY. TENANT HEREBY COVENANTS THAT, PRIOR TO THE FILING OF ANY SUIT FOR DIRECT AND PROXIMATE
DAMAGES, IT SHALL GIVE LANDLORD AND ALL MORTGAGEES WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES OR
DEED OF TRUST LIENS ON THE PROPERTY, BUILDING OR PREMISES (“LANDLORD MORTGAGEES”) NOTICE AND
REASONABLE TIME TO CURE ANY ALLEGED DEFAULT BY LANDLORD.




22









 








EXHIBIT A




OUTLINE AND LOCATION OF PREMISES



This Exhibit is attached to and made a part of the Lease dated March 6th, 2006 by and
between 1601 Tower Properties, L.L.C., an Oklahoma limited liability company (“Landlord”) and Riata
Energy, Inc., a Texas corporation (“Tenant”) for space in the Building located at 1601 Northwest
Expressway, Oklahoma City, Oklahoma.








The outlined Premises above are estimated and the actual space will be determined after Tenant’s
plans are complete.




A-1









 







IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in multiple original counterparts
as of the day and year first above written.




	 	 	 	 	 
	 	LANDLORD: 1601 Tower Properties L.L.C.,
 an
Oklahoma limited liability company

 	 
	 	By:  	VB Tower Manager, Inc., as
 	 
	 	 	Manager  	 
	 	 	 
	 	By:  	                                                    /s/ Mark L. Beffort
 	 
	 	 	Name:  	Mark L. Beffort 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	TENANT: Riata Energy, Inc., a Texas

corporation

 	 
	 	By:  	                                                    /s/ Tom L. Ward
 	 
	 	 	Name:  	Tom L. Ward     	 
	 	 	Title:  	CEO 	 



23









 






	 	 	 	 	 



EXHIBIT A-CONT’D








The outlined Premises above are estimated and the actual space will be determined after Tenant’s
plans are complete.





A-2









 








EXHIBIT A-CONT’D








The outlined Premises above are estimated and the actual space will be determined after Tenant’s
plans are complete.





A-2









 





EXHIBIT B




RULES AND REGULATIONS



The following rules and regulations shall apply, where applicable, to the Premises, the Building,
the parking garage associated therewith (if any), the Property and the appurtenances thereto:





	1.	 	Sidewalks, entrances, passageways, courts, corridors, vestibules, halls, elevators and
stairways in and about the Building shall not be obstructed nor shall objects be placed
against glass partitions, doors or windows which would be unsightly from the Building’s
corridors from the exterior of the Building.






	2.	 	Plumbing, fixtures and appliances shall be used for only the purpose for which they were
designed and no foreign substance of any kind whatsoever shall be thrown or placed therein.
Damage resulting to any such fixtures or appliances from misuse by Tenant or its agents,
employees or invitees, shall be paid for by Tenant and Landlord shall not in any case be
responsible therefore.






	3.	 	Any sign, lettering, picture, notice, advertisement installed within the Premises which is
visible from the public corridors within the Building shall be installed in such manner, and
be of such character and style, as Landlord shall approve, in writing in its reasonable
discretion. No sign, lettering, picture, notice or advertisement shall be placed on any
outside window or door or in a position to be visible from outside the Building. No nails,
hooks or screws (except for customary artwork or wall hangings) shall be driven or inserted
into any part of the Premises or Building except by Building maintenance personnel, nor shall
any part of the Building be defaced or damaged by Tenant.






	4.	 	Tenant shall not place any additional lock or locks on any door in the Premises or Building
without Landlord’s prior written consent. A reasonable number of keys to the locks on the
doors in the Premises shall be furnished by Landlord to Tenant at the cost of Tenant, and
Tenant shall not have any duplicate keys made. All keys and passes shall be returned to
Landlord at the expiration or earlier termination of this Lease.






	5.	 	Tenant shall refer all contractors, contractors’ representatives and installation
technicians for Landlord for Landlord’s supervision, approval and control before the
performance of any contractual services. This provision shall apply to all work performed in
the Building including, but not limited to installation of telephones, telegraph equipment,
electrical devices and attachments, doors, entranceways, and any and all installations of
every nature affecting floors, walls, woodwork, window trim, ceilings, equipment and any
other physical portion of the Building. Tenant shall not waste electricity, water or air
conditioning. All controls shall be adjusted only by Building personnel.






	6.	 	Movement in or out of the Building of furniture or office equipment, or dispatch or receipt
by Tenant of any merchandise or materials which require the use of elevators, stairways,
lobby areas, or loading dock areas, shall be restricted to hours designated by Landlord.
Tenant must seek Landlord’s prior approval by providing in writing a detailed listing of such
activity. If approved by Landlord, such activity shall be under the supervision of Landlord
and performed in the manner stated by Landlord. Landlord may prohibit any article, equipment
or any other item from being brought into the Building. Tenant is to assume all risk for
damage to articles moved and injury to persons resulting from such activity. If any
equipment, property and/or personnel of Landlord or of any other tenant is damaged or injured
as a result of or in connection with such activity, Tenant shall be solely liable for any and
all damage or loss resulting there from.






	7.	 	All corridor doors, when not in use, shall remain closed. Tenant shall cause all doors to
the Premises to be closed and securely locked before leaving the Building at the end of the
day.






	8.	 	Tenant shall keep all electrical and mechanical apparatus owned by Tenant free of vibration,
noise and airwaves which may be transmitted beyond the Premises.




B-1









 












	9.	 	Canvassing, soliciting and peddling in or about the Building or Property is prohibited.
Tenant shall cooperate and use its best efforts to prevent the same.
	 
	10.	 	Tenant shall not use the Premises in any manner which would overload the standard heating,
ventilating or air conditioning systems of the Building.
	 
	11.	 	Tenant shall not utilize any equipment or apparatus in such manner as to create any magnetic
fields or waves which adversely affect or interfere with the operation of any systems or
equipment in the Building or Property.
	 
	12.	 	Bicycles and other vehicles are not permitted inside or on the walkways outside the
Building, except in those areas specifically designated by Landlord for such purposes.
	 
	13.	 	Tenant shall not operate or permit to be operated on the Premises any coin or token operated
vending machine or similar device (including, without limitation, telephones, lockers,
toilets, scales, amusements devices and machines for sale of beverages, foods, candy,
cigarettes or other goods), except for those vending machines or similar devices which are
for the sole and exclusive use of Tenant’s employees, and then only if such operation does
not violate the lease of any other tenant in the Building.
	 
	14.	 	Tenant shall utilize the termite and pest extermination service designated by Landlord to
control termites and pests in the Premises. Except as included in Basic Costs, Tenant shall
bear the cost and expense of such extermination services.
	 
	15.	 	Tenant shall not open or permit to be opened any window in the Premises. This provision
shall not be construed as limiting access of Tenant to any balcony adjoining the Premises.
	 
	16.	 	To the extent permitted by law, Tenant shall not permit picketing or other union activity
involving its employees or agents in the Building or on the Property, except in those
locations and subject to time and other constraints as to which Landlord may give its prior
written consent, which consent may be withheld in Landlord’ sole discretion.
	 
	17.	 	Tenant shall comply with all applicable laws, ordinances, governmental orders or regulations
and applicable orders or directions from any public office or body having jurisdiction, with
respect to the Premises, the Building, the Property and their respective use or occupancy
thereof. Tenant shall not make or permit any use of the Premises, the Building or the
Property, respectively, which is directly or indirectly forbidden by law, ordinance,
governmental regulation or order, or direction of applicable public authority, or which may
be dangerous to person or property.
	 
	18.	 	Tenant shall not use or occupy the Premises in any manner or for any purpose which would
injure the reputation or impair the present or future value of the Premises, the Building or
the Property; without limiting the foregoing, Tenant shall not use or permit the Premises or
any portion thereof to be used for lodging, sleeping or for any illegal purpose.
	 
	19.	 	All deliveries to or from the Premises shall be made only at times, in the areas and through
the entrances and exits designated for such purposes by Landlord. Tenant shall not permit the
process of receiving deliveries to or from the Premises outside of said areas or in a manner
which may interfere with the use by any other tenant of its premises or any common areas, any
pedestrian use of such area, or any use which is inconsistent with good business practice.
	 
	20.	 	Tenant shall carry out Tenant’s permitted repair, maintenance, alterations, and improvements
in the Premises only during times agreed to in advance by Landlord and in a manner which will
not interfere with the rights of other tenants in the Building.




B-2









 












	21.	 	Landlord may from time to time adopt appropriate systems and procedures for the security or
safety of the Building, its occupants, entry and use, or its contents. Tenant, Tenant’s agents,
employees, contractors, guests and invitees shall comply with Landlord’s reasonable
requirements thereto.






	22.	 	Landlord shall have the right to prohibit the use of the name of the Building or any other
publicity by Tenant that in Landlord’s opinion may tend to impair the reputation of the
Building or its desirability for Landlord or its other tenants. Upon written notice from
Landlord, Tenant will refrain from and/or discontinue such publicity immediately.






	23.	 	Neither Tenant nor any of its employees, agents, contractors, invitees or customers shall
smoke in any portion of the Building except for designated smoking areas, if any. No smoking
shall be allowed within twenty-five feet of the entrance or exit of the Building.






B-3










 





EXHIBIT C




PAYMENT OF BASIC COSTS



This Exhibit is attached to and made a part of the Lease dated March 6th, 2006 by
and between 1601 Tower Properties, L.L.C., an Oklahoma limited
liability company (“Landlord”)
and Riata Energy, Inc., a Texas corporation (“Tenant”) for space in the Building located at
1601 Northwest Expressway, Oklahoma City, Oklahoma.



A. During each calendar year, or portion thereof, falling within the Lease Term, Tenant shall
pay to Landlord as Additional Rent hereunder Tenant’s Pro Rata Share of the amount by which
(a) Basic Costs (as defined below) for the applicable calendar year exceeds Basic Costs for
the calendar year 2006 (the “Base Year”). In no event shall the amount required to be paid by
Tenant with respect to Basic Costs for any calendar year during the Lease Term be less than
zero. Prior to January 1 of each calendar year during the Lease Term, or as soon thereafter as
practical, Landlord shall make a good faith estimate of Basic Costs for the applicable full or
partial calendar year and Tenant’s Pro Rata Share thereof. On or before the first day of each
month during such calendar year, Tenant shall pay Landlord, as Additional Rent, a monthly
installment equal to one-twelfth of Tenant’s Pro Rata Share of Landlord’s estimate of the
amount by which Basic Costs for such calendar year will exceed Basic Costs for the Base Year.
Landlord shall have the right from time to time during any such calendar year to revise the
estimate of Basic Costs for such year and provide Tenant with a revised statements therefor
(provided, however, Landlord agrees that Landlord shall not issue a revised statement more
than twice in any calendar year), and thereafter the amount Tenant shall pay each month shall
be based upon such revised estimate. If Landlord does not provide Tenant with an estimate of
the Basic Costs by January 1 of any calendar year, Tenant shall continue to pay a monthly
installment based on the previous year’s estimate until such time as Landlord provides Tenant
with an estimate of Basic Costs for the current year. Upon receipt of such current year’s
estimate, adjustment shall be made for any month during the current year with respect to which
Tenant paid monthly installments of Additional Rent based on the previous year’s estimate.
Tenant shall pay Landlord for any underpayment upon demand. Any overpayment in excess of the
equivalent of one (1) month’s Base Rent shall, at Landlord’s option, be refunded to Tenant or
credited against the installments) of Additional Rent next coming due under the Lease. Any
overpayment in an amount equal to or less than the equivalent of one (1) month’s Base Rent
shall, at Landlord’s option, be refunded to Tenant or credited against the installment of
Additional Rent due for the month immediately following the furnishing of such estimate. Any
amount paid by Tenant based on any estimate shall be subject to adjustment pursuant to
Paragraph A below, when actual Basic Costs are determined for such calendar year.



B. As soon as is practical following the end calendar year during the Lease Term, Landlord
shall furnish to Tenant a statement of Landlord’s actual Basic Costs for the previous calendar
year. If for any calendar year the Additional Rent collected for the prior year, as a result
of Landlord’s estimate of Basic Costs, is in excess of Tenant’s Pro Rata Share of the amount
by which Basic Costs for such prior year exceeds Basic Costs for the Base Year, then Landlord
shall refund to Tenant any overpayment (or at Landlord’s option apply such amount against
Additional Rent due or to become due hereunder). Likewise, Tenant shall pay
to Landlord, on demand, any underpayment with respect to the prior year whether or not the Lease
has, terminated prior to receipt by Tenant of a statement for such underpayment, it being
understood that this clause shall survive the expiration of the Lease.



C. Basic Costs shall mean all direct and indirect costs, expenses paid and disbursements of
every kind (subject to the limitations set forth below) which Landlord incurs, pays or becomes
obligated to pay in each calendar year in connection with operating, maintaining, repairing,
owning and managing the Building and the Property including but not limited to, the following:





	(1)	 	All labor costs for all persons performing services required or utilized in connection
with the operation, repair, replacement and maintenance of and control of access to the
Building and the Property, including but not limited to amounts incurred for wages,
salaries and other compensation for services, professional training, payroll, social
security, unemployment and other similar taxes, workers’




C-1









 












	 	 	compensation insurance, uniforms, training, disability benefits, pensions,
hospitalization, retirement plans, group insurance or any other similar or like expenses or
benefits.
	 
	(2)	 	All management fees, the cost of equipping and maintaining a management office at the
Building, accounting services, legal fees not attributable to leasing and collection
activity, and all other administrative costs relating to the Building and the Property.
	 
	(3)	 	All Rent and/or purchase costs of materials, supplies, tools and equipment used in the
operation, repair, replacement and maintenance and the control of access to the Building and
the Property.
	 
	(4)	 	All amounts charged to Landlord by contractors and/or suppliers for services, replacement
parts, components, materials, equipment and supplies furnished in connection with the
operation, repair, maintenance, replacement and control of access to any part of the
Building, or the Property generally, including the heating, air conditioning, ventilating,
plumbing, electrical, elevator and other systems and equipment of the Building and the
garage. At Landlord’s option, major repair items may be amortized over a period of up to five
(5) years.
	 
	(5)	 	All premiums and deductibles paid by Landlord for fire and extended insurance coverage,
earthquake and extended coverage insurance, liability and extended coverage insurance, Rent
loss insurance, elevator insurance, boiler insurance and other insurance customarily carried
from time to time by landlords of comparable office buildings or required to be carried by
Landlord’s mortgagee.
	 
	(6)	 	Charges for all utilities, including but not limited to water, electricity, gas and sewer,
but excluding those electrical charges for which tenants are individually responsible.
	 
	(7)	 	“Taxes”, which for purposes hereof, shall mean (a) all real estate taxes and assessments on
the Property, the Building or the Premises, and taxes and assessments levied in substitution
or supplementation in whole or in part of such taxes, (b) all personal property taxes for the
Building’s personal property, including license expenses, (c) all taxes imposed on services
of Landlord’s agents and employees, (d) all sales, use or other tax, excluding state and/or
federal income tax now or hereafter imposed by any governmental authority upon Rent received
by Landlord, (e) all other taxes, fees or assessments now or hereafter levied by any
governmental authority on the Property, the Building or its contents or on the operation and
use thereof (except as relate to specific tenants), and (f) all costs and fees incurred in
connection with seeking reductions in or refunds in Taxes including, without limitation, any
costs incurred by Landlord to challenge the tax valuation of the Building, but excluding
income taxes. Estimates of real estate taxes and assessments for any calendar year during the
Lease Term shall be determined based on Landlord’s good faith estimate of the real estate
taxes and assessments. Taxes and assessments hereunder are those accrued with respect to such
calendar year, as opposed to the real estate taxes and assessments paid or payable for such
calendar year.
	 
	(8)	 	All landscape expenses and costs of repairing, resurfacing and striping of the parking areas
and garages of the Property, if any.
	 
	(9)	 	Cost of all maintenance service agreements, including those for equipment, alarm service,
window cleaning, drapery or mini-blind cleaning, janitorial services, metal refinishing, pest
control, uniform supply, landscaping and any parking equipment.
	 
	(10)	 	Cost of all other repairs, replacements and general maintenance of the Property and Building
neither specified above nor directly billed to tenants, including the cost of maintaining all
interior Common Areas including lobbies, multi-tenant hallways, restrooms and service areas.
	 
	(11)	 	The amortized cost of capital improvements made to the Building or the Property which are (a)
primarily for the purpose of reducing operating expense costs or otherwise improving the
operating efficiency of the Property or Building; or (b) required to comply with any laws,
rules or regulations of any governmental authority or a requirement of Landlord’s insurance
carrier. The cost of such capital improvements shall be amortized over a period of five (5)
years, or longer (at Landlord’s option), and




C-2









 












	 	 	shall, at Landlord’s option, include interest at a rate that is reasonably equivalent to
the interest rate that Landlord would be required to pay to finance the cost of the capital
improvement in question as of the date such capital improvement is performed, provided if the
payback period for any capital improvement is less than five (5) years, Landlord may amortize
the cost of such capital improvement over the payback period.
	 
	(12)	 	Any other charge or expense of any nature whatsoever which, in accordance with general
industry practice with respect to the operation of a first class office building, would be
construed as an operating expense.




D. Basic Costs shall not include repairs and general maintenance paid from proceeds of insurance
or by a tenant or other third parties, and alterations attributable solely to individual tenants
of the Property. Further, Basic Costs shall not include the cost of capital improvements (except
as above set forth), depreciation, interest (except as provided above with respect to the
amortization of capital improvements), lease commissions, and principal payments on mortgage and
other non-operating debts of Landlord. Capital improvements are more specifically defined as:





	(1)	 	Costs incurred in connection with the original construction of the Property or with any
major changes to same, including but no limited to, additions or deletions of corridor
extensions, renovations and improvements of the Common Areas beyond the costs caused by
normal wear and tear, and upgrades or replacement of major Property systems; and






	(2)	 	Costs of correcting defects (including latent defects), including any allowances for same,
in the construction of the Property or its related facilities; and






	(3)	 	Costs incurred in renovating or otherwise improving, designing, redesigning, decorating or
redecorating space for tenants or other occupants of the Property or other space leased or
held for lease in the Property.




E. If the Building and the other buildings Landlord operates in conjunction therewith are is not at
least ninety-five percent (95%) occupied, in the aggregate, during any calendar of the Lease term
or if Landlord is not supplying services to at least ninety-five percent (95%) of the Approximate
Rentable Area of the Building and such other buildings at any time during any calendar year of the
Lease Term, actual Basic Costs for purposes hereof shall, at Landlord’s option, be determined as if
the Building and such other buildings had been ninety-five percent (95%) occupied and Landlord had
been supplying services to ninety-five percent (95%) of the Approximate Rentable Area of the
Building and such other buildings during such year. If Tenant pays for its Pro Rata Share of Basic
Costs based on increases over a “Base Year” and Basic Costs for any calendar year during the Lease
Term are determined as provided in the foregoing sentence, Basic Costs for such Base Year shall
also be determined as if the Building and such other buildings had been ninety-five percent (95%)
occupied and Landlord had been supplying services to ninety-five percent (95%) of the Approximate
Rentable Area of the Building and such other buildings.




C-3









 







IN WITNESS WHEREOF, Landlord and Tenant have executed this exhibit as of the day and year first
above written.




	 	 	 	 	 
	 	LANDLORD: 1601 Tower Properties,
L.L.C.,

an Oklahoma limited liability company

 	 
	 	By:  	VB Tower Manager, Inc., as Manager
 	 
	 
	 	 	 
	 	By:  	                                                /s/ Mark L. Beffort
 	 
	 	 	Name:  	Mark L. Beffort    	 
	 	 	Title:  	Vice President and Secretary 	 
	 	 	 	 
	 	TENANT: Riata Energy, Inc., a Texas

corporation

 	 
	 	By:  	/s/ Tom L. Ward
 	 
	 	 	Name:  	Tom L. Ward 	 
	 	 	Title:  	CEO 	 
	 




C-4









 





EXHIBIT D




WORK LETTER




This Exhibit is attached to and made a part of the Lease dated March 6th, 2006 by and
between 1601 Tower Properties, L.L.C., an Oklahoma limited liability
company (“Landlord”) and
Riata Energy, Inc., a Texas corporation (“Tenant”) for space in the Building located at 1601
Northwest Expressway, Oklahoma City, Oklahoma.



This Work Letter shall set forth the obligations of Landlord and Tenant with respect to the
preparation of the Premises for Tenant’s occupancy. All improvements described in this Work Letter
to be constructed in and upon the Premises are hereinafter referred to as the “Tenant’s Work.”
Landlord and Tenant acknowledge that Plans (hereinafter defined) for the Tenant’s Work have not yet
been prepared and, therefore, it is impossible to determine the exact cost of the Tenant’s Work at
this time. Accordingly, Landlord and Tenant agree that Landlord’s obligation for the cost of
Tenant’s Work shall be limited to Three Hundred Twenty-Two Thousand Five Hundred Seventy-Two and
no/100 Dollars ($322,572.00) (the “Maximum Amount”) and that Tenant shall be responsible for the
cost of Tenant’s Work to the extent that it exceeds the Maximum Amount. Tenant shall enter into a
direct contract for the Tenant’s Work with a general contractor selected by Tenant.



Space planning, architectural and engineering (mechanical, electrical and plumbing) drawings for
the Tenant’s Work shall be prepared at Tenant’s sole cost and expense. The space planning,
architectural and mechanical drawings are collectively referred to herein as the “Plans”.



Tenant shall furnish any requested information and approve or disapprove any preliminary or final
layout, drawings, or plans within two (2) Business Days after written request. Any disapproval
shall be in writing and shall specifically set forth the reasons for such disapproval. Tenant and
Landlord’s Architect shall devote such time in consultation with Landlord and Landlord’s engineer
as may be required to provide all information Landlord deems necessary in order to enable
Landlord’s Architect and engineer to complete, and obtain Tenant’s written approval of the Plans
for the Tenant’s Work by not later than July 11, 2006 (the “Plans Due Date”).



Prior to commencing any construction of Tenant’s Work, Landlord shall submit to Tenant a written
estimate setting forth the anticipated cost of the Tenant’s Work, including but not limited to
labor and materials, contractor’s fees and permit fees. Within three (3) Business Days thereafter,
Tenant shall either notify Landlord in writing of its approval of the cost estimate, or specify
its objections thereto and any desired changes to the proposed Tenant’s Work. In the event Tenant
notifies Landlord of such objections and desired changes, Tenant shall work with Landlord to reach
a mutually acceptable alternative cost estimate.



In the event Landlord’s estimate and/or the actual cost of construction shall exceed the Maximum
Amount (such amounts exceeding the Maximum Amount being herein referred to as the “Excess Costs”),
Tenant shall pay to Landlord such Excess Costs upon demand. The statements of costs submitted to
Landlord by Landlord’s contractors shall be conclusive for purposes of determining the actual cost
of the items described therein. The amounts payable hereunder constitute Rent payable pursuant to
the Lease, and the failure to timely pay same constitutes an event of default under the Lease.



If Tenant shall request any change, addition or alteration in any of the Plans after approval by
Landlord, Landlord shall have such revisions to the drawings prepared, and Tenant shall reimburse
Landlord for the cost thereof upon demand to the extent that the cost of performing such revision
cause the cost of Tenant’s Work to exceed the Maximum Amount. Promptly upon completion of the
revisions, Landlord shall notify Tenant in writing of the increased cost, if any, which will be
chargeable to Tenant by reason of such change, addition or deletion. Tenant shall, within one (1)
Business Day, notify Landlord in writing whether it desires to proceed with such change, addition
or deletion. In the event such revisions result in a higher estimate of the cost of construction
and/or higher actual construction costs which exceed the Maximum



D-1









 





Amount, such increased estimate or costs shall be deemed Excess Costs pursuant to Paragraph 5
hereof and Tenant shall pay such Excess Costs upon demand.



Following approval of the Plans and the payment by Tenant of the required portion of the Excess
Costs, if any, Landlord shall cause the Tenant’s Work to be constructed substantially in accordance
with the approved Plans. Landlord shall notify Tenant of substantial completion of the Tenant’s
Work.



This Exhibit D shall not be deemed applicable to any additional space added to the original
Premises at any time or from time to time, whether by any options under the Lease or otherwise, or
to any portion of the original Premises or any additions to the Premises in the event of a renewal
or extension of the original Term of this Lease, whether by any options under the Lease or
otherwise, unless expressly so provided in the Lease or any amendment or supplement to the Lease.



IN WITNESS WHEREOF, Landlord and Tenant have entered into this Exhibit D as of the day and year
first above written.



	 	 	 	 	 
	 	LANDLORD: 1601 Tower Properties, L.L.C.,

an Oklahoma limited liability company
 	 
	 	By: VB Tower Manager, Inc., as Manager

 	 
	 	By:  	/s/ Mark L. Beffort
 	 
	 	 	Name:  	Mark L. Beffort 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	TENANT: Riata Energy, Inc., a Texas corporation

 	 
	 	By:  	/s/ Tom L. Ward
 	 
	 	 	Name:  	Tom L. Ward  	 
	 	 	Title:  	CEO 	 
	 




D-2









 





EXHIBIT E




ADDITIONAL PROVISIONS




This exhibit is attached to and made a part of the Lease dated March 6th, 2006 by and
between 1601 Tower Properties, L.L.C., an Oklahoma limited liability
company (“Landlord”) and Riata
Energy, Inc., a Texas corporation (“Tenant”) for space in the Building located at 1601 Northwest
Expressway, Oklahoma City, Oklahoma.



Renewal. Provided that no event of default or sublease has ever occurred under any term or
provision contained in this Lease and no condition exists which with the passage of time or the
giving of notice or both would constitute an event of default pursuant to this Lease and provided
that Tenant has continuously occupied the Premises for the Permitted Use during the Lease Term,
Tenant (but not any assignee or sublessee) shall have the right and option (the “Renewal Option”)
to renew this Lease, by written notice delivered to Landlord no later than nine (9) months prior to
the expiration of the initial Lease Term, for an additional term (the “Renewal Term”) of sixty (60)
months under the same terms, conditions and covenants contained in the Lease, except that (a) no
abatements or other concessions, if any, applicable to the initial Lease Term shall apply to the
Renewal Term; (b) the Base Rent shall be equal to the market rate for comparable office space
located in the Building as of the end of the initial Lease Term as determined by Landlord, (c)
Tenant shall have no option to renew this Lease beyond the expiration of the Renewal Term; and (d)
all leasehold improvements within the Premises shall be provided in their then existing condition
(on an “As Is” basis) at the time the Renewal Term commences.



Failure by Tenant to notify Landlord in writing of Tenant’s election to exercise the Renewal
Option herein granted within the time limits set forth for such exercise shall constitute
a waiver of such Renewal Option. In the event Tenant elects to exercise the Renewal Option as set
forth above, Landlord shall, within thirty (30) days thereafter, notify Tenant in writing of the
proposed Base Rent for the Renewal Term (the “Proposed Renewal Rental”). Tenant shall within
thirty (30) days following delivery of the Proposed Renewal Rental by Landlord notify Landlord in
writing of the acceptance or rejection of the Proposed Renewal Rental. If Tenant accepts
Landlord’s proposal, then the Proposed Renewal Rental shall be the Base Rent in effect during the
Renewal Term.



Failure of Tenant to respond in writing during the aforementioned thirty (30) day period shall be
deemed an acceptance by Tenant of the Proposed Renewal Rental. Should Tenant reject Landlord’s
Proposed Renewal Rental during such thirty (30) day period, then Landlord and Tenant shall
negotiate during the thirty (30) day period commencing upon Tenant’s rejection of Landlord’s
Proposed Renewal Rental to determine the rental for the Renewal Term. In the event Landlord and
Tenant are unable to agree to a rental for the Renewal Term during said thirty (30) day period,
then the Renewal Option shall terminate and be null and void and the Lease shall, pursuant to its
terms and provisions, terminate at the end of the original Lease Term.



Upon exercise of the Renewal Option by Tenant and subject to the conditions set forth hereinabove,
the Lease shall be extended for the period of such Renewal 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 Lease Term
shall terminate all renewal rights hereunder. The renewal rights of Tenant hereunder shall not be
severable from the Lease, nor may such rights be assigned or otherwise conveyed in connection with
any permitted assignment of the Lease. Landlord’s consent to any assignment of the Lease shall not
be construed as allowing an assignment of such rights to any assignee.



Right of First Refusal. Provided that Tenant is not then in default under the Lease beyond
any applicable grace or cure periods, Tenant shall have a right of first refusal to lease suites
900,1212 and 1420 containing approximately 13,016 rentable square feet and further identified on
the attached Exhibit E-l (“Refusal Space”). Prior to leasing all or any part of the Refusal Space
to any prospective tenant, Landlord shall provide written notice to Tenant of the economic terms
of the proposed lease. Tenant shall have three (3) days within which to notify Landlord in writing
of its intent to lease the subject portion of the Refusal



E-1









 





Space upon the same terms and conditions as the prospective tenant. If Tenant gives such notice of
intent to Landlord, Tenant shall, within five (5) business days after its receipt thereof, execute
a new lease for the subject portion of the Refusal Space in a form that is the same as this Lease
but incorporating the terms contained in the proposed lease to the prospective tenant. Should such
terms not contain rights to covered parking, Tenant shall be granted the right to lease one (1)
covered non-reserved parking space for every 600 square feet contained in the Refusal Space leased.



If Tenant fails to execute such new lease or fails to give written notice of its intent to lease
as provided above, Landlord shall be free to lease the subject space to the prospective tenant.
If, however, the final terms of the proposed lease are more than ten percent (10%) more favorable
to the prospective tenant than the terms presented to Tenant, Landlord will re-present the lease
terms to Tenant. Tenant shall then have three (3) days within which to notify Landlord of its
intent to lease the subject space. In the event only a portion of the Refusal Space is leased at
one time, the foregoing right of first refusal shall continue in effect as to the remainder of the
Refusal Space.



Parking. Tenant shall be granted sixty (60) covered parking spaces throughout the term, ten
(10) reserved and fifty (50) non-reserved on a non-reserved, first come, first served basis at a
cost of $60.00 per space per month.



IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first
written above.


	 	 	 	 	 
	 	LANDLORD: 1601 Tower Properties, L.L.C.,

an Oklahoma limited liability company
 	 
	 	By: VB Tower Manager, Inc., as Manager

 	 
	 	By:  	/s/ Mark L. Beffort
 	 
	 	 	Name:  	Mark L. Beffort 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	TENANT: Riata Energy, Inc., a Texas corporation

 	 
	 	By:  	/s/ Tom L. Ward
 	 
	 	 	Name:  	Tom L. Ward  	 
	 	 	Title:  	CEO 	 
	 




E-2









 





Exhibit E-l




Refusal Space










E-3