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Exhibit
10.14
FORM OF
LEASE
AGREEMENT
BASIC LEASE PROVISIONS
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| ITEM 1: |
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This Lease Agreement (“Lease”) is made and entered
into as of the 26 th day
of October, 2007, between Lessor and Lessee hereinbelow
named. |
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| ITEM 2: |
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“Lessor” Name: 411 NSHP Partners, LP, a Texas
Limited Partnership |
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Address for payment & notices: 521 W. Wilshire. Oklahoma
City, Oklahoma. Suite 100, 73116 |
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“Lessee” Name: Baseline Oil and Gas Corporation, a
Nevada Corporation |
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Doing Business as (DBA): N/A |
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Address prior to Lease Commencement: 1811 N. Freeway, Suite
200, Houston, TX 77060 |
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Address after Lease Commencement: 411 N. Sam Houston Parkway,
Suite 300 Houston, Texas 77060 |
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Lessee Address for billings: 411 N. Sam Houston Parkway, Suite
300, Houston, Texas 77060 |
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Lessee Address for notices: 411 N. Sam Houston Parkway, Suite
300, Houston, Texas 77060 |
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| ITEM 3: |
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Building Name: |
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411 N.
Sam Houston Parkway East |
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Building Address: |
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411 N.
Sam Houston Parkway East |
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Houst on,
TX 77060 |
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Relevant County: |
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Harris |
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| ITEM 4: |
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Leased
Premises: Floor 3 Suite
No. 300 |
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Premises Net Rentable Area: 7526 sq. ft. (common area factor is
15.44%) |
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Parking Spaces: |
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(a) |
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Covered Reserved: |
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8 |
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(b) |
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Unreserved: |
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18 |
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| ITEM 5: |
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(a) |
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Total Net
Rentable Area of Building: 115,222 sq.ft. |
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(b) |
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Lessee’s Building Expense Percentage: 6.53 % |
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| ITEM 6: |
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(a) |
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Base Monthly
Rental: $ Refer to Addendum attached hereto and made a part
hereof |
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(b) |
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Parking
Space Rent (per space per month): Reserved: $35.00 ea. + tax;
Unreserved: $0.00 |
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(c) |
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First
month’s rent (for November 1, 2007) Due on Lease
Commencement; $ Refer to Addendum attached hereto and made a part
hereof |
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(d) |
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Next Monthly
Rent Due: Refer to Addendum attached hereto and made a part
hereof |
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(e) |
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Building
Operating Expense Stop: |
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The actual
Building Operating Expenses for the calendar year 2007 adjusted to
reflect 95% occupancy. |
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(f) |
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Relevant
Market for CPI calculations: N/A |
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| ITEM 7: |
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(a) |
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Commencement Date; Refer to Addendum attached hereto and made a
part hereof |
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(b) |
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Term 60
months (plus any partial month of commencement) |
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(c) |
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Projected
Expiration Date: Refer to Addendum attached hereto and made a part
hereof |
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| ITEM 8: |
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Security Deposit: $11,789.00; payable upon execution of this
Lease. |
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| ITEM 9: |
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Broker(s): N/A |
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| ITEM 10: |
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Leasehold Improvements Plan Approval Date: N/A |
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| ITEM 11: |
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Guarantors: None |
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| ITEM 12: |
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Permitted Office Use: General office purposes such as those
associated with the day-to-day business operations of an oil and
gas company |
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| ITEM 13: |
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Normal Building Operating Hours: |
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M-F: 7:00 a.m. to 6:00
p.m.; Saturday: 8:00
a.m. to 1:00 p.m. |
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| ITEM 14: |
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Allotted
Number: Keys: 8; Building
Access Cards: 8 |
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| ITEM 15: |
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Renewal Option - Exhibit “E” |
This Lease Agreement consists of 52
Articles on 38 pages, plus Exhibits Addendum and Exhibits
“A”, “B”, “D” and
“E”
2
ARTICLE 1.
Leased
Premises
1.1 Demise: Description of
Leased Premises . In consideration of the covenant of Lessee to
pay rent as herein provided, and in consideration of the observance
and performance by Lessee of other terms, provisions and covenants
hereof, Lessor hereby leases, demises and lets to Lessee, and
Lessee does hereby lease and take from Lessor that certain space
described in Item 4 of the Basic Lease Provisions, located in
the building described in Item 3 of the Basic Lease Provisions
(hereinafter called the “ Building ”). The
Building is located on that certain tract or parcel of land located
in the Relevant County referenced in Item 3 of the Basic Lease
Provisions, as is more particularly described on Exhibit
“A” attached hereto and incorporated herein by this
reference (the “ Land ”). The space hereby
leased in the Building is hereinafter called the “ Leased
Premises ”, is identified on the floor plan marked
Exhibit “B” attached hereto and made a part
hereof for all purposes, and is leased and taken subject to all
liens, covenants, easements, agreements and restrictions of
record.
The foregoing document
attached hereto and entitled “BASIC LEASE PROVISIONS”
is incorporated herein in its entirety and by reference made a part
hereof. Lessor is authorized to do business in the State of
Texas.
ARTICLE 2.
Term
2.1 Term . This Lease
shall be for a term as set forth in Item 7(b) of the Basic
Lease Provisions. This Lease shall commence on the earlier to occur
of (i) the commencement date set forth in Item 7 of the
Basic Lease Provisions (as extended, if extended), or (ii) the
date Lessee takes occupancy of any part of the Leased Premises
(such earlier date, as and if extended pursuant to Article 2.2
hereof, being herein called the “ commencement date
”). The Lease Term shall include a period equal to the Lease
Term as stated in Item 7 of the Basic Lease Provisions plus
any partial month between the commencement date and the first of
the following calendar month. This Lease shall expire at midnight
on the last day of the Lease Term as so defined, unless earlier
terminated as herein provided.
2.2 Projected Commencement
Date: Extension . Lessor expects to have the Leased Premises
substantially completed and ready for occupancy by the commencement
date specified in Item 7 of the Basic Lease Provisions. In the
event, however, the Leased Premises are not substantially completed
and ready for occupancy by said specified date, for any reason or
cause, Lessor shall not be liable or responsible for any claims,
damages or liabilities in connection therewith or by reason
thereof, nor shall this Lease become void or voidable, but rather
the date of commencement of this Lease shall be extended to the
date that the Leased Premises have been substantially completed and
are ready for occupancy by Lessee. In such event, rental under this
Lease shall not commence until such revised commencement date, and
the expiration date hereof shall be extended so as to give effect
to the full stated term.
2.3 Confirmation of
Commencement Date . When the Leased Premises are substantially
completed and ready for occupancy and are occupied by Lessee, the
parties shall at the request of either, execute a declaration
specifying the commencement date and term hereof.
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2.4 No Delay Because
Lessee Refuses to Occupy . There shall be no delay in the
occurrence of the commencement date of this Lease and/or the
commencement of payment of rental under this Lease by reason of
Lessee’s failure to occupy the Leased Premises on or before
the commencement date or where Lessee causes a delay in completion
of any of Lessor’s work by failure to promptly approve plans,
make material or color selections, or make other necessary
decisions for the preparation of the Leased Premises for
occupancy.
ARTICLE 3.
Base Rental
3.1 Amount; Payment
Terms . Lessee agrees to pay Lessor without any offset or
deduction whatsoever, in lawful (legal tender for public or private
debts) money of the United States of America at Lessor’s
address as set forth in Item 2 of the Basic Lease Provisions
or elsewhere as designated from time to time by Lessor’s
notice in writing to Lessee, the monthly sum set forth in
Item 6(a) of the Basic Lease Provisions (hereinafter called
“ Base Rental ”) of the first day of each
calendar month, monthly in advance without demand, for each and
every calendar month of the term of this Lease.
3.2 First Month’s
Rent . Lessee shall pay to Lessor, upon the commencement date
of this Lease, the sum set forth in Item 6(c) of the Basic
Lease Provisions, representing payment of Base Rental for the first
calendar month of the Lease term. If the term of this Lease
commences on a day other than the first day of a calendar month,
Lessee shall pay rental as provided herein for such commencement
month on a pro rata basis, and the first month’s rent paid by
Lessee upon execution hereof shall apply and be credited to the
next full month’s rent due hereunder.
3.3 Next Monthly Rent
. The next monthly rental due under the terms of this Lease is
payable on the date set forth in item 6(d) of the Basic Lease
Provisions.
3.4 Last Month’s
Rent . If the term of this Lease expires on a day other than
the first day of calendar month, Lessee shall pay rental as
provided herein for such expiration month of a pro rata
basis.
3.5 Independent Covenant;
Late Charge . This covenant by Lessee to pay rent shall be
independent of any other covenant set forth in this Lease. Lessee
shall be required to pay Lessor (as a late charge to compensate
Lessor for the added administrative expense caused by such late
payment) a sum equal to five percent (5%) of any monthly
rental (or other amounts) required to be paid under the terms
hereof should Lessee fail to pay such rental (or other amounts)
within ten (10) days of the date thereof provided in this
Lease.
3.6 Lessee Pays Applicable
Taxes . To the extent any laws, ordinances, rules or
regulations are enacted that require Lessor to collect any excise,
sales, privilege or gross receipts tax levied on rents or charges
paid hereunder by Lessee, then, in such event, Lessee shall also
pay to Lessor as additional rental under this Lease any such
excise, sales, privilege or gross receipts tax levied on rents or
charges paid hereunder.
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ARTICLE 4.
Security
Deposit
4.1 Amount: Deposit .
Lessee shall pay to Lessor, upon the commencement date of this
Lease the sum set forth in Item 8 of the Basic Lease
Provisions as a security deposit (hereinafter called the “
Security Deposit ”). Such sum shall be held by Lessor
as security for the faithful performance of Lessee’s
obligations hereunder. The Security Deposit shall not be assigned,
transferred or encumbered by Lessee and any attempt to do so shall
be void and shall not be binding upon Lessor.
4.2 Application to
Obligations of Lessee . If Lessee defaults with respect to any
provision of this Lease or if Lessor makes any payment on behalf of
Lessee which Lessee is required to make under the terms of this
Lease, Lessor may (but shall not be required to) use, apply or
retain all or any part of the Security Deposit for the payment of
any amount which Lessor may spend or become obligated to spend by
reason of Lessee’s default, or to compensate Lessor for any
loss or damage which Lessor has suffered or may suffer by reason of
Lessee’s default. If any portion of the Security Deposit is
so used, applied or retained, Lessee shall, within ten
(10) days of Lessor’s demand therefore, deposit cash
with Lessor in an amount sufficient to restore the Security Deposit
to its original amount. Lessee’s failure to so restore the
Security Deposit shall entitle Lessor to exercise all remedies
hereunder which Lessor would have for Lessee’s failure to pay
rent which extended beyond the applicable notice period.
4.3 Forfeiture for Early
Termination . If this Lease is terminated prior to the
expiration of the stated term as a result of a default by Lessee
hereunder, Lessor may retain all of the Security Deposit as its
minimum damages for such early termination, without prejudice to
any other right, remedy or damage claim of Lessor
hereunder.
4.4 Return . If Lessee
shall have fully and faithfully performed all of its obligations
under this Lease, the Security Deposit (or the then remaining
balance thereof) shall be refunded to Lessee promptly upon the
expiration of the Lease term. In the event Lessor’s interest
in this Lease is sold, transferred or otherwise terminated, Lessor
shall transfer the Security Deposit (or the remaining balance
thereof) to its successor in interest and thereupon Lessor shall be
discharged from any further liability with respect thereto. The
provisions of this Article 4.4 shall also apply to any subsequent
transferor.
ARTICLE 5.
Definitions
5.1 Net Rentable Area
. For purposes of this Lease, the term “Net Rentable
Area” (hereinafter called “ NRA ”) shall
mean and refer in the case of a single tenancy floor to
(A) all floor area within the Leased Premises measured from
(1) an imaginary exterior building perimeter comprised of
either (i) the plane established by the outside surface of the
outer glass of the exterior Building windows (ignoring protruding
columns or walls), or (ii) the plane established by the inside
of the finished column or wall of the Building which forms the
exterior Building wall along the perimeter of the Leased Premises,
whichever calculation results in the greater NRA, to (2) the
inside surface of the same imaginary plane of the opposite exterior
Building wall established in the same manner, excluding only the
areas (“ service areas ”) within
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the outside walls used for elevator
mechanical rooms, building stairs, fire towers, elevator shafts,
flues, vents, stacks, vertical pipe shafts and vertical ducts, but
including any such areas which are for the specific use of the
particular tenant such as special stairs or elevators, plus
(B) an allocation of the square footage of the
Building’s elevator and main mechanical rooms and ground and
basement lobbies in the ratio that has been established by Lessor,
In the case of a partial floor, “Net Rentable Area”
(NRA) is calculated identically to the calculation set forth above
except that (a) in clause (A)(l)(ii) the measurement shall
instead be made to the mid-point of the walls separating areas
leased by or held for lease to other tenants or from areas devoted
to corridors, elevator foyers, rest rooms, mechanical rooms,
janitor closets, vending areas and other similar facilities for the
use of all tenants on the particular floor (hereinafter sometimes
called “ Common Areas ”), and (b) there
shall also be added to the NRA a proportionate part of the Common
Areas located on such floor based upon the ratio which
Lessee’s NRA on such floor (but for such Common Area add-on)
bears to the aggregate NRA on such floor (but for Common Area
add-on). No deductions from NRA are made for columns or projections
necessary to the Building. The NRA in the Leased Premises has in
Lessor’s opinion been calculated based on a reasonable
approximation of the foregoing definition but is hereby stipulated
to be the square footage set forth in Item 4 of the Basic
Lease Provisions, whether the same should be more or less. Lessee
shall have no right to remeasure or recalculate the NRA of the
Leased Premises, which is conclusively stipulated by the parties to
be the amount set forth in Item 4 of the Basic Lease
Provisions. The NRA in the Building has in Lessor’s opinion
been calculated on a reasonable approximation of the foregoing but
is hereby stipulated for all purposes hereof to be as set forth in
Item 5(a) of the Basic Lease provisions, whether the same
should be more or less (except that additions or the total removal
of space in the Building will allow Lessor to recalculate the
Building NRA.
5.2 Building Operating
Expenses . For purposes of this Lease, the term “
Building Operating Expenses ” shall mean all expenses,
costs and disbursements (but not replacement of capital investment
items except as provided in Article 5.2(g), depreciation, debt
service, income taxes, franchise taxes or specific costs especially
billed to and paid by specific tenants) of every kind and nature
which Lessor shall pay or become obligated to pay because of or in
connection with the ownership and operation of the Land, the
Building and all other improvements now or hereafter located
thereon (hereinafter collectively called the “ Complex
”), including, but not limited to, the following:
(a) Wages and salaries of all
employees engaged in operating and maintenance, or security, of the
Complex and personnel who may provide traffic control relating to
ingress and egress to and from the Complex’s parking area to
the adjacent public streets.
(b) All supplies and
materials used in operation and maintenance of the
Complex.
(c) Cost of all utilities for
the Complex.
(d) Cost of all maintenance,
management and service agreements for the Complex and the equipment
therein, including, but not limited to, alarm service (if any),
window cleaning and elevator maintenance.
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(e) Cost of all insurance
relating to the Complex, including, but not limited to, the cost of
casualty and liability insurance applicable to the Complex and
Lessor’s personal property used in connection therewith,
worker’s compensation and rental insurance.
(f) Cost of repairs and
general maintenance (excluding repairs and general maintenance paid
by proceeds of insurance or by lessee or other third parties, and
alterations paid for solely by tenants of the Building other than
Lessee).
(g) Amortization of the cost
of installation of capital investment items which are primarily for
the purpose of reducing operating costs, which may be required by
any governmental authority, or which may be more cost effective
than continued repairs. All such costs shall be amortized over the
reasonable life of the capital investment items with the reasonable
life and amortization schedule being determined in accordance with
generally accepted accounting principles and in no event to extend
beyond the reasonable life of the Building.
(h) Lessor’s central
accounting costs applicable to the Complex.
(i) The total ad valorem
taxes for the Complex, including all taxes and assessments and
governmental charges, whether state, federal, county or municipal,
and whether levied by a taxing district or authorities presently
taxing the Building or the Complex or by others subsequently
created, adjusted to reflect a valuation of the Complex at full
appraised value, it being understood and agreed that such ad
valorem taxes shall be computed on the accrual basis,
notwithstanding the fact that the total Building Operating Expenses
shall be computed on the cash basis.
All Building Operating Expenses shall be
computed in accordance with sound accounting principles which shall
be consistently applied. Notwithstanding any other provision herein
to the contrary, it is agreed that in the event the Building is not
fully occupied during any year of the term of this Lease, at
Lessor’s option, an adjustment shall be made in computing the
Building Operating Expenses for such year so that the Building
Operating Expenses shall be increased for such year to an amount
that would have been incurred if the Building had been 95% occupied
during such year.
5.3 Normal Building
Operating Hours . For purposes of this Lease, the term “
Normal Building Operating Hours ” shall be as defined
in Item 13 of the Basic Lease Provisions, excluding Sundays,
New year’s Day, Memorial Day, July 4 th , Labor Day, Thanksgiving, Christmas or
Trust other bank or legal holidays.
ARTICLE 6.
Additional Monthly
Rent
6.1 Payment Obligation
. If for the calendar year in which this Lease commences
(hereinafter called the “ Commencement Year ”),
or for any subsequent calendar year, the Building Operating
Expenses adjusted by computing the Building Operating Expenses as
though the Building has been 95% occupied during such year exceed
the amount provided in Item 6(e) of the Basic lease
Provisions, lessee agrees to pay Lessor as additional rent, in the
manner
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described in Article 6.2, an amount
equal to Lessee’s pro rata share of such excess as determined
by lessee’s Building Expense Percentage as set forth in
Item 59b) of the Basic Lease Provisions (hereinafter called
“ Lessee’s Building Expense Percentage ”),
taking into account the actual expenses incurred during the months
during the calendar year that Lessee occupied the Leased Premises
or this Lease was in effect, whichever occurs first.
6.2 Periodic Estimates;
Readjustments; Statements . Lessor shall make a good faith
estimate whether the actual amounts to be expended for Building
Operating Expenses for each successive calendar year will exceed
the amount set forth in Item 6(e) of the Basic Lease
Provisions (the “ Excess Costs ”). If Lessor
estimates that such an overage will occur, the following provisions
shall apply:
(a) If Lessor estimates that
Excess Costs will occur with respect to the Commencement Year,
Lessor shall deliver to Lessee a written statement setting forth
Lessor’s good faith estimate of lessee’s pro rata share
(determined by Lessee’s Building Expenses Percentage) of the
amount by which the expenditures for Building Operating Expenses
for the Commencement Year will exceed the amount for Building
Operating Expenses set forth in Item 6(e) of the Basic Lease
Provisions, calculated as of the date of Lessee’s occupancy
of the Leased Premises or the date of commencement of this Lease as
set forth in Item 7 of the Basic Lease Provisions, whichever
occurs first. Beginning with the first calendar month commencing at
least thirty (30) days following lessee’s receipt of
Lessor’s initial Excess Costs statement, Lessee shall pay as
additional monthly rent (herein called “ Additional
Monthly Rent ”) on the first day of each calendar month,
in advance without demand, a monthly amount equal to one-twelfth
(1/12) of Lessee’s pro rata share of the estimated
Excess Costs for the Commencement Year. Lessee shall pay the
Additional Monthly Rent for each succeeding month until Lessee
receives a statement from Lessor in accordance with Article 6.2(b)
specifying a different amount of Additional Monthly Rent. Following
the closing of Lessor’s operating expense books after the end
of the Commencement Year, Lessor shall submit to Lessee a statement
setting forth the exact amount of Lessee’s pro rata share of
the Excess Costs for the Commencement year, and the difference, if
any, between the amount of Additional Monthly Rent paid by lessee
for estimated Excess Costs for the Commencement Year and the actual
amount of Lessee’s pro rata share of the Excess Costs for the
Commencement Year. To the extent that such amount of Additional
Monthly Rent paid by Lessee exceeds the actual amount of
Lessee’s pro rata share of the Excess Costs for the
Commencement Year, Lessor shall credit such excess against the
Additional Monthly Rent to be due in the calendar year following
the Commencement Year. To the extent that the actual amount of
lessee’s pro rata share of the Excess Costs for the
Commencement Year exceeds such amount of Additional Monthly Rent
paid by Lessee, Lessee shall pay such excess in cash within thirty
(30) days after receipt of such statement from
Lessor.
(b) If Lessor estimates that
Excess Costs will occur with respect to any calendar year
subsequent to the Commencement Year (hereinafter called “
Subsequent Year ”), Lessor may, prior to
January 1 of such Subsequent Year or at any time thereafter,
deliver to Lessee a written statement setting forth Lessor’s
good faith estimate of Lessee’s pro rata share (determined by
Lessee’s Building Expense Percentage) of the
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Excess Costs for such
Subsequent Year. Beginning January 1 of each such Subsequent
Year, Lessee shall pay as Additional Monthly Rent, on the first day
of each calendar month, in advance without demand, a monthly amount
equal to one-twelfth (1/12) of Lessee’s pro rata share of the
estimated Excess Costs for such Subsequent Year (or, if Lessor has
not provided a statement for that year, for the most recent year
for which an Excess Costs statement has been provided). Lessee
shall pay the Additional Monthly Rent for each succeeding month
(including into successive Subsequent years) until Lessee receives
a new statement from Lessor in accordance with this
Section 6.2(b) (additional adjustment notices may also be
given at such interim intervals as Lessor may deem appropriate for
adjustments during any year) specifying a different amount of
Additional Monthly Rent. Any interim notice of an increased
estimate of Excess Costs for the Subsequent Year in progress may
require retroactive payment to the first of the year, based on the
revised estimate or may require that the underpayment be made up in
such increments as Lessor may specify. Following the closing of
Lessor’s operating expense books after the end of each
Subsequent year, Lessor shall submit to Lessee a statement setting
forth the exact amount of Lessee’s pro rata share of the
Excess Costs for such Subsequent Year, and the difference, if any,
between the amount of Additional Monthly Rent paid by Lessee for
estimated Excess Costs for such Subsequent Year and the actual
amount of Lessee’s pro rata share of the Excess Costs for
such Subsequent Year. To the extent that such amount of Additional
Monthly Rent paid by Lessee exceeds the actual amount of
Lessee’s pro rata share of the Excess Costs for such
Subsequent Year, Lessor shall credit such excess against the
Additional Monthly Rent to be due in the calendar year following
such Subsequent Year. To the extent that the actual amount of
Lessee’s pro rata share of the Excess Costs for such
Subsequent Year exceeds such amount of Additional Monthly rent paid
by Lessee, lessee shall pay such excess in cash within thirty
(30) days after receipt of such statement from
Lessor.
(c) Lessee’s covenant
to pay its pro rata share of the Excess Costs under this Article
6.2 shall survive the expiration or early termination of this Lease
and Lessor shall have the right to retain the Security Deposit, or
so much thereof as Lessor deems necessary, to secure payments of
lessee’s pro rata share of the Excess Costs for the portion
of the final year of this lease during which Lessee was obligated
to pay such Excess Costs. If the final year of this Lease is less
than a full calendar year, Lessee’s pro rata share of the
Excess Costs for such partial year shall be calculated by
proportionately reducing the amount of Building Operating Expenses
set forth in Item 6(e) of the Basic Lease Provisions, to
reflect the number of months in the final calendar year of the term
of this Lease, which reduced amount shall then be compared with the
actual Building Operating Expenses for said partial year, whether
paid or accrued, to determine the amount, if any, of any increases
in the actual Building Operating Expenses for such partial year
over the proportionately reduced amount of the amount of Building
Operating Expenses set forth in Item 6(a) of the Basic Lease
Provisions. Lessee shall pay its pro rata share of any such
increases within thirty (30) days following receipt of notice
thereof.
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Lessor shall endeavor to prepare and
deliver all annual adjustment statements required under this
Article 6.2 on or before April 1 of the year following the
calendar year for which payment of Additional Monthly Rent is
required, but in no event shall Lessor’s failure to do so
constitute a waiver of any Additional Rent due
hereunder.
6.3 Lessee’s Audit
Rights . Lessee at its expense shall have the right at all
reasonable times within ninety (90) days after Lessee’s
receipt of the annual adjustment notice for Building Operating
Expenses for a given year, but not thereafter, to audit
Lessor’s books and records relating to the Additional Monthly
Rent for the year to which such annual adjustment statement
relates; or, at Lessor’s option and in lieu of Lessee’s
audit rights, Lessor will provide such audit prepared by a
certified public accountant of its choice.
ARTICLE 7.
Use of the Leased
Premises
7.1 Limited Permitted
Use . Lessee will use and occupy the Leased Premises only for
general office purposes as offices for the Permitted Office use
specified in Item 12 of the Basic Lease Provisions, and for no
other purpose without the prior written consent of
Lessor.
7.2 No Alterations .
Lessee shall not make or allow to be made any alterations or
physical additions in or to the Leased Premises without the prior
written consent of Lessor, which consent may be given subject to
such reasonable conditions as Lessor may require or impose. No
structural changes to the leased Premises shall be made or
permitted to be made by lessee without Lessor’s prior written
consent, which consent may be withheld by Lessor for any reason.
Any and all such alterations, physical additions or improvements
shall be made by Lessor and, when made to the Leased Premises,
shall at once become the property of Lessor and shall be
surrendered to Lessor upon the termination of this Lease by lapse
of time or otherwise; provided, however, this Article 7.2 shall not
apply to movable equipment or furniture owned by lessee.
7.3 Certain Specific
Prohibitions . Notwithstanding the Permitted Business use,
Lessee will not use, occupy or permit the use or occupancy of the
Leased Premises for any purpose which is, directly or indirectly,
forbidden by law, ordinance or governmental or municipal regulation
or order, or which may be dangerous to life, limb or property; or
permit the maintenance of any public or private nuisance; or do or
permit any act or thing which may disturb the quiet enjoyment of
any other tenant of the Building; or keep any substance or carry on
or permit any operation which might emit offensive odors or
conditions into other portions of the Building; or use any
apparatus which might make undue noise or set up vibrations in the
Building; or permit anything to be done which would increase the
fire and extended coverage insurance rates on the Building or
contents, and if there is any increase in such rates by reason of
the acts of Lessee, then Lessee agrees to pay such increase
promptly upon demand therefore by Lessor. Lessee agrees
specifically that no food, soft drink or other vending machine will
be installed or operated within the Leased Premises.
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ARTICLE 8.
Services Provided by
Lessor
8.1 Lessor’s Basic
Services . Lessor covenants and agrees with Lessee to use its
best efforts to furnish Lessee, at Lessor’s expense except as
otherwise provided in Article 6 and below I this Article 8, and
subject to the Rules and Regulations described in Article 24.1, the
following services during the Lease term while Lessee is occupying
the Leased Premises and while Lessee is not in default of this
Lease.
(a) Central heating and air
conditioning service in season, as reasonably required for
comfortable use in occupancy during Normal Building Operating Hours
(as defined in Article 5.3). Lessor shall furnish additional
central heating and air conditioning service in season required for
comfortable use in occupancy during other than Normal Building
Operating Hours provided that Lessee agrees in advance of the
request of such service to reimburse Lessor on demand for its then
prevailing charge for overtime air conditioning and heating
service. Whenever machines or equipment which generate heat are
used in the Leased Premises and affect temperature otherwise
maintained by the Building air conditioning system, Lessor reserves
the right to install supplementary air conditioning units in the
Leased Premises and the costs of such units as well as the cost of
installation, operation and maintenance thereof shall be paid by
Lessee to Lessor.
(b) Electricity as required
for (i) building standard fluorescent light fixtures installed
by Lessor and (i) electricity as required for incidental
office use such as typewriters, voice writers, calculating
machines, non-standard lighting and other machines and office
equipment of similar low electrical consumption, provided that
(A) the electrical consumption of such incidental use
equipment in the Leased Premises (and/or any outside equipment
approved by Lessor for installation pursuant to this Lease, if any)
does not exceed for any month the “ Maximum Allowed
Incidental Electrical Usage ’ (being one watt
multiplied by the number of square feet of NRA in the Leased
Premises multiplied by the number of Normal Building Operating
Hours in that month), (B) the connected electrical load of
permitted incidental use electrical equipment in the Leased
Premises shall never exceed one watt per square foot of the Leased
Premises or such lesser amount as is designed as the maximum
connected electrical load for such incidental usage per approved
plans for Tenant Improvements, and (C) the electricity so
furnished for incidental uses shall be nominal 120 volts and no
electrical circuit for the supply of such incidental uses shall
have a current capacity exceeding 15 amperes. Subject to the
limitations stated above, Lessee shall have the right to use
electricity for permitted incidental uses after Normal Building
Operating Hours provided that the overall incidental electrical
usage for the Leased Premises does not exceed the Maximum Allowed
Incidental Electrical Usage. Lessee shall bear the utility cost,
including, but not limited to, any increased air conditioning
costs, occasioned by the use of special lighting in excess of
Building standard. Based upon the proposed Plans for the Leased
Premises as of the date of this Lease (and provided no changes are
made to such Plans that result in additional electrical consumption
than as otherwise is customarily used in an office setting),
Lessee’s intended use of the Leased Premises should not
result in electrical consumption in excess of the Maximum Allowed
Incidental Electrical Usage. Notwithstanding the foregoing
sentence, Lessor is not in the business of calculating electrical
consumption and does nor warrant or otherwise represent that
Lessee’s proposes use is actually within the Maximum Allowed
Incidental Electrical Usage and Lessee acknowledges that it is not
relying on Lessor’s estimation and that Lessee, if it so
desires, will obtain the opinion of a person knowledgeable in the
area of electrical consumption to determine whether Lessee’s
proposed use within the Leased Premises will not exceed the Maximum
Allowed Incidental Electrical Usage.
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(c) Cold water for drinking,
lavatory and toilet purposes drawn through fixtures installed by
Lessor in public or common areas and hot water for lavatory
purposes from regular Building supply at prevailing
temperature.
(d) Janitor service in and
about the Leased Premises five (5) nights per week, including
such exterior window washing as may be reasonably required,
provided, however, that Lessee shall pay, as additional rent any
additional costs attributable to the cleaning of improvements
within the Leased Premises other than building standard
improvements.
(e) Automatic passenger
elevator(s) in common with other tenants for ingress and egress to
and from the Leased Premises, twenty-four (24) hours a day,
seven (7) days per week. Freight services in common with other
tenants will be provided only at times to be agreed upon by Lessor
and Lessee.
(f) At Lessor’s option,
blinds, draperies or other type coverings of exterior and interior
windows as determined by Lessor. Lessor reserves the right to
install, maintain and operate uniform window coverings in all
windows either exterior or interior.
(g) Maintenance of building
standard fluorescent lighting fixtures installed by Lessor and
replacement of defective lamps in such fixtures as needed from time
to time for efficient operations. Lessee shall be responsible for
the cost of maintenance of all non-building standard light fixtures
and for providing to Lessor’s maintenance personnel necessary
replacement bulbs or tubes.
If excess service usage is permitted by
Lessor, Lessee shall pay to Lessor upon demand Lessor’s
prevailing charge therefor as additional rental due under this
Lease.
8.2 Failure to Pay for
Excess Usage . If Lessee fails to pay promptly when due any
additional rent provided for in Article 8.1, Lessor, upon ten
(10) days’ written notice to Lessee, may discontinue
furnishing all or any part of the services described in Article
8,1. No such discontinuance shall be deemed an eviction of
disturbance of Lessee’s use of the Leased Premises or render
Lessor liable for damages or relieve Lessee from any obligation
under this Lease.
8.3 No Warranty Against
Interruption . Lessor does not warrant that any service will be
free from interruption caused by repairs, renewal, improvements,
changes of service, alterations, strikes, lockouts, labor
controversies, accidents, intentional misconduct or negligence of
third parties including other tenants, inability to obtain fuel or
power at a reasonable cost or other causes not entirely within
Lessor’s control. No such interruption shall be deemed an
eviction or disturbance of Lessee’s use and possession, or a
breach by Lessor of its obligations or render Lessor liable for
damages, by abatement of rent or otherwise, or relieve Lessee from
any obligation under this Lease . If such service can be
restored by repairs on the grounds of the Complex, and such repairs
are within Lessor’s authority and control, Lessor shall
exercise due diligence to restore such interrupted service upon
receipt of written notice from Lessee. Should any equipment or
machinery at the Complex break down, or for any cause cease to
function properly, Lessor shall use reasonable diligence to repair
such equipment or machinery, and so long as Lessor uses reasonable
diligence to restore same, Lessee shall have no claim for rebate of
rent or damages or other relief on account of any interruption of
services resulting therefrom.
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Notwithstanding the
foregoing, Lessor and Lessee agree that Lessee shall have certain
limited rights to abatement as set forth in this Article 8.3 in
connection with a material discontinuation of “Critical
Services” as defined herein. For purposes hereof, “
Critical Services ” shall be defined to mean the
following services to the Leased Premises: heating, ventilation and
air conditioning services (HVAC service); electrical service; and
elevator service. For purposes hereof, a “ material
interruption of Critical Services ” means that
(i) required electrical supply to the Premises is discontinued
for any reason other than casually or actions of Lessee, or
Lessee’s employees, servants, agents or contractors (the
“ Lessee’s Related Parties ” ), and
the same is not being provided by supplemental or interim service
facilities; (ii) HVAC Service to the Premises is discontinued
to a material extent, for any reason other than casualty or actions
of Lessee or Lessee’s Related Parties, and HVAC Service is
not being provided by supplemental or interim service facilities;
and/or (iii) elevator service is not available at all to any
floor on which a portion of the Premises is located, above the
third floor, for any reason other than actions of Lessee or
Lessee’s Related Parties. Should a material interruption of
Critical Services occur and be the result of a condition that is
within Lessor’s authority and control to restore, and such
material interruption of Critical Services continue for a
continuous period of seven (7) business days or longer after
written notice of the interruption is given by Lessee to Lessor,
then, to the extent that such material interruption of Critical
Services causes the Premises on the floor that is so affected to be
rendered untenantable, Base Rental shall abate in proportion to the
portion of the Premises so rendered untenantable until the Critical
Services are restored to such an extent that the affected portions
of the Premises are no longer untenantable or until there is no
longer a material interruption of Critical Services. The foregoing
rights and remedies of Lessee shall be in lieu of any other claim
against Lessor for damages, lease termination or other
remedies.
8.4 Non-Payment of Excess
or Ancillary Services . In the event that Lessor furnishes
extra or additional services (over and above those provided for in
Article 8.1) at Lessee’s request or in accordance with a
prior agreement with Lessee wherein Lessee agrees to pay for such
services, and Lessee fails to pay for such services when payment is
due, Lessor shall be entitled, following ten (10) days’
written notice to Lessee of such default and in Lessor’s sole
discretion, to discontinue all such services and all other services
provided under this Lease. The money due for extra or additional
services requested by Lessee or called for under any such separate
agreement shall be deemed additional rent due hereunder, and such
additional rent shall be subject to all of the provisions in this
Lease pertaining to the payment of rental.
8.5 Excess Electricity
Usage: Billing . Notwithstanding any other term of provision of
this Lease to the contrary. Lessee shall pay to Lessor, monthly, as
billed, such charges as may be separately metered or as
Lessor’s engineer may compute for any electric services
utilized by Lessee in excess of the amounts provided as part of the
rent pursuant to Article 8.1(a) or (b). No failure of Lessor
to bill Lessee for excess use for any particular period shall be
deemed a waiver of such amounts or of the right to bill Lessee for
excess use for any other period.
8.6 Keys . Lessor
shall furnish Lessee, free of charge, the Allotted Number (per
Item 14 of the Basic Lease Provisions) of keys for each
corridor door entering the Leased Premises
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and (if applicable) the Allotted Number
of building access cards if the Building has a regulated entry
system. Additional keys and Building access cards shall at all
times remain the property of Lessor. No additional locks shall be
allowed on any door of the Leased Premises without Lessor’s
permission, and Lessee shall not make or permit to be made any
duplicate keys, except those furnished by Lessor. Upon termination
of this Lease, Lessee shall surrender to Lessor all keys to the
Leased Premises, all Building access cards and all parking access
cards (if applicable), and give to Lessor the explanation of the
combination of all locks for safes, safe cabinets and vault doors,
if any, in the Leased Premises. Lessor shall not be liable to
Lessee for losses due to theft, burglary, or for damages done by
unauthorized persons on the Leased Premises.
8.7 Lettering of Main
Entry Doors; Directory Listings . Lessor shall provide and
install, at Lessor’s cost, all letters or numerals on or
adjacent to doors in the Leased Premises; all such letters and
numerals shall be in the building standard graphics and placed in a
location specified by Lessor. No other types of lettering shall be
used or permitted on the Leased Premises, nor shall the location
thereof be changed except at the request or with the approval of
Lessor. Lessor shall provide and install, at Lessor’s
expense, a Building standard listing for Lessee on the Building
Directory Board.
ARTICLE 9.
Leasehold
Improvements
9.1 Lessor’s
Construction Obligation . In preparing the Leased Premises for
occupancy by Lessee, Lessor shall be required to bear the expense
of installing the items listed on Exhibit “C”
attached hereto and incorporated herein by this reference, only to
the extent that they do not exceed the respective allowances
indicated on such Exhibit “C” . Lessor shall
partition and prepare the Leased Premises in accordance with the
Plans; provided, however, that Lessor shall not be required to
install any partitions or improvements which are not in conformity
with the plans and specifications for the Building or which are not
approved by Lessor’s architect, and Lessor shall be required
to bear the expense of installing the items listed on Exhibit
“C” hereto only to the extent that such items do
not exceed the respective allowances indicated on such Exhibit
“C” .
9.2 Lessee’s
Cooperation to Facilitate Design . Lessee agrees to meet with a
representative of the office design consultant designated by Lessor
for the purpose of preparing a detailed floor plan layout, together
with detailed working drawings and written instructions
(hereinafter called the “ Plans ” ),
reflecting the partitions and improvements desired by Lessee in the
Leased Premises. The Plans shall be prepared by such office design
consultant in conformity with the plans and specifications for the
Building and shall be approved by Lessee no later than the
Leasehold Improvements Plan Approval Date set forth in Item 10
of the Basic Lease Provisions. The cost of preparation of the plans
and specifications for building standard items listed on Exhibit
“C” hereto shall be borne by Lessor, and the cost
of preparation of the plans and specifications for all items in
excess of building standard shall be borne by Lessee.
9.3 Lessee’s
Financial Obligation. All installations in excess of the
allowance set forth on Exhibit “C” shall be for
Lessee’s account and at Lessee’s cost (and Lessee shall
pay ad valorem taxes thereon). The cost chargeable to Lessee shall
be equal to Lessor’s actual cost of
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such excess items plus an additional
charge of fifteen percent (15%) to cover overhead, and shall
be payable by Lessee to Lessor as additional rent hereunder
promptly upon being invoiced therefor. Failure by Lessee to pay
such amount in full within thirty (30) days shall constitute
failure to pay rent when due and an Event of Default by Lessee
hereunder, giving rise to all remedies available to Lessor under
this Lease and at law for nonpayment of rent. Lessee shall receive
credit for any building standard items not used in the improvement
of the Leased Premises only if Lessee substitutes upgraded or
improved materials for such unused item or items.
9.4 Lessor Has No
Construction Obligation If Exhibit “C” is Deleted .
If there is no Exhibit “C” attached to this
Lease, or if it is marked out, it is agreed that Lessee has
acknowledged that the Leased Premises are complete in a manner
acceptable to Lessee, that they are accepted in “AS-IS”
condition, with all faults, and that Lessor shall have no
construction obligations whatsoever relating to the Leased Premises
(unless Lessor and Lessee have executed a written work letter dated
on or after the date of this Lease). In the event Exhibit
“C” is deleted, the commencement date shall occur
on the earlier of the two alternative dates set forth in Article
2.1 and the terms of Article 2.2 shall not apply.
ARTICLE 10.
Quiet
Possession
10.1 Lessor’s
Exclusive Covenant . Upon payment by Lessee of the rents
provided for in this Lease, and upon the observance and performance
of all the covenants, terms and conditions on Lessee’s part
to be observed and performed, Lessee shall, subject to the terms
and provisions of this Lease, peaceably and quietly hold and enjoy
the Leased Premises for the term hereby demised, against any and
all interference therewith by the affirmative acts of Lessor, its
employees or agents, and against any person who may claim superior
title to the Leased Premises by, through or under Lessor, but not
otherwise. Lessor shall under no circumstances be held responsible
for restriction or disruption of access to the Building from public
streets caused by construction work or other actions taken by or on
behalf of governmental authorities, or for actions taken by other
tenants (their employees, agents, visitors, contractors or
invitees), or any other cause not entirely within Lessor’s
direct control, and same shall not constitute a constructive
eviction of Lessee or give rise to any right or remedy of Lessee
against Lessor of any nature or kind. This covenant of quiet
enjoyment is in lieu of any covenant of quiet enjoyment provided or
implied by law, and Lessee expressly waives any such other covenant
of quiet enjoyment to the extent broader than the covenant
contained in this Article 10.
ARTICLE 11.
Quiet
Possession
11.1 Lessee’s
Acceptance of Possession; Lessee’s Maintenance and Repair
. Taking possession of the Leased P
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