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FORM OF LEASE AGREEMENT BASIC LEASE PROVISIONS

Lease Agreement

FORM OF LEASE AGREEMENT BASIC LEASE PROVISIONS | Document Parties: BASELINE OIL & GAS CORP. | 411 NSHP Partners, LP | Baseline Oil and Gas Corporation You are currently viewing:
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BASELINE OIL & GAS CORP. | 411 NSHP Partners, LP | Baseline Oil and Gas Corporation

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Title: FORM OF LEASE AGREEMENT BASIC LEASE PROVISIONS
Governing Law: Texas     Date: 3/31/2008

FORM OF LEASE AGREEMENT BASIC LEASE PROVISIONS, Parties: baseline oil & gas corp. , 411 nshp partners  lp , baseline oil and gas corporation
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Exhibit 10.14

FORM OF

LEASE AGREEMENT

BASIC LEASE PROVISIONS

 

ITEM 1:    This Lease Agreement (“Lease”) is made and entered into as of the 26 th day of October, 2007, between Lessor and Lessee hereinbelow named.
ITEM 2:    “Lessor” Name: 411 NSHP Partners, LP, a Texas Limited Partnership
   Address for payment & notices: 521 W. Wilshire. Oklahoma City, Oklahoma. Suite 100, 73116
   “Lessee” Name: Baseline Oil and Gas Corporation, a Nevada Corporation
   Doing Business as (DBA): N/A
   Address prior to Lease Commencement: 1811 N. Freeway, Suite 200, Houston, TX 77060
   Address after Lease Commencement: 411 N. Sam Houston Parkway, Suite 300 Houston, Texas 77060
   Lessee Address for billings: 411 N. Sam Houston Parkway, Suite 300, Houston, Texas 77060
   Lessee Address for notices: 411 N. Sam Houston Parkway, Suite 300, Houston, Texas 77060
ITEM 3:    Building Name:    411 N. Sam Houston Parkway East
   Building Address:    411 N. Sam Houston Parkway East
      Houst on, TX 77060
   Relevant County:    Harris
ITEM 4:    Leased Premises:                Floor  3    Suite No.  300
   Premises Net Rentable Area: 7526 sq. ft. (common area factor is 15.44%)
   Parking Spaces:    (a)    Covered Reserved:    8
      (b)    Unreserved:    18
ITEM 5:    (a)    Total Net Rentable Area of Building: 115,222 sq.ft.
   (b)    Lessee’s Building Expense Percentage: 6.53 %
ITEM 6:    (a)    Base Monthly Rental: $ Refer to Addendum attached hereto and made a part hereof
   (b)    Parking Space Rent (per space per month): Reserved: $35.00 ea. + tax; Unreserved: $0.00
   (c)    First month’s rent (for November 1, 2007) Due on Lease Commencement; $ Refer to Addendum attached hereto and made a part hereof

 


   (d)    Next Monthly Rent Due: Refer to Addendum attached hereto and made a part hereof
   (e)    Building Operating Expense Stop:
      The actual Building Operating Expenses for the calendar year 2007 adjusted to reflect 95% occupancy.
   (f)    Relevant Market for CPI calculations: N/A
ITEM 7:    (a)    Commencement Date; Refer to Addendum attached hereto and made a part hereof
   (b)    Term 60 months (plus any partial month of commencement)
   (c)    Projected Expiration Date: Refer to Addendum attached hereto and made a part hereof
ITEM 8:    Security Deposit: $11,789.00; payable upon execution of this Lease.
ITEM 9:    Broker(s): N/A
ITEM 10:    Leasehold Improvements Plan Approval Date: N/A
ITEM 11:    Guarantors: None
ITEM 12:    Permitted Office Use: General office purposes such as those associated with the day-to-day business operations of an oil and gas company
ITEM 13:    Normal Building Operating Hours:
   M-F:    7:00 a.m. to 6:00 p.m.;            Saturday:    8:00 a.m. to 1:00 p.m.
ITEM 14:    Allotted Number:        Keys:  8;        Building Access Cards:  8
ITEM 15:    Renewal Option - Exhibit “E”

This Lease Agreement consists of 52 Articles on 38 pages, plus Exhibits Addendum and Exhibits “A”, “B”, “D” and “E”

 

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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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