Exhibit 10.6
FIRST AMENDMENT TO OFFICE LEASE
THIS FIRST AMENDMENT TO OFFICE LEASE
( “ First Amendment ” ) is made and
entered into this 7th day of February, 2008, by and between
Cullen Allen Holdings
L.P., a Delaware limited partnership (
“Landlord” ) and Quest Midstream Partners, L.P., a
Delaware limited partnership ( “Tenant” ), the
successor in interest of Bluestem Pipeline, LLC.
WITNESSETH:
WHEREAS, Landlord and Bluestem
Pipeline, LLC entered into that certain Office Lease dated
March 14, 2007 (the “Lease” ) for
approximately 3,433 RSF in Suite 3650 (the “Existing
Premises” ) on the 36 th Floor of the
office building commonly known as Three Allen Center, which is
located at 333 Clay Street, Houston, Texas (the
“Building” );
WHEREAS, Tenant succeeded to the
interest of Bluestem Pipeline, LLC, as tenant under the
Lease;
WHEREAS, Landlord and Tenant desire
to amend and modify the Lease to relocate the Premises to
approximately 9,801 RSF on the 40 th Floor of the
Building and extend the Term of the Lease, among other things
provided for herein.
NOW, THEREFORE, in and for the
premises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant agree to amend the Lease as
follows:
1. Defined
Terms . Capitalized terms not defined herein shall
have the same meanings attributed to such terms under the
Lease.
2. Relocation of
the Premises . Effective on the Relocation Date,
defined in Section 5 below, the Premises, as such term is used in
the Lease, shall be relocated to approximately 9,801 RSF in
Suite 4060 on the 40 th Floor of the
Building as shown on Exhibit “A” attached hereto (the
“New Premises” ). From and after the Relocation
Date, defined below, Landlord and Tenant stipulate and agree that
(i) the Premises, as such term is used in the Lease, contains
9,801 RSF (utilizing an add-on factor of 22.5% for this
multi-tenant floor), (ii) the Building contains approximately
1,194,719 RSF; and (iii) all references in the Lease referring
to the Premises shall mean the New Premises described in this First
Amendment. Except as provided in this First Amendment, as of the
Relocation Date, all references in the Lease pertaining to the
duties and obligations of Tenant which are dependant upon the size
of the Premises which are not specifically adjusted by this First
Amendment, shall be automatically adjusted to reflect that the
Premises, as such term is used in the Lease, contains 9,801
RSF.
3. Surrender of
the Existing Premises . On or before that date upon
the earlier of (i) the date upon which Tenant occupies the New
Premises for the purpose of conducting Tenant’s business,
(ii) the date which is ten (10) days after the date on
which Tenant’s initial
Three Allen Center
– Quest Midstream Partners, L.P.
First Amendment
1
leasehold improvements are substantially complete within the New
Premises or (iii) forty five (45) days after the
Relocation Date, as defined in Section 5 below, Tenant shall
(a) peaceably vacate and surrender the Existing Premises on
the 36 th Floor of the
Building to Landlord broom-clean and in the condition required by
Section 3.3(a) of the Lease and otherwise in accordance with
the applicable provisions of the Lease; (b) remove from the
Existing Premises all persons occupying and using same, return to
Landlord all suite keys issued to Tenant in connection with its use
of the Existing Premises (to the extent such pertain solely to the
Existing Premises); and (c) remove from the Existing Premises
all personal property owned by Tenant.
4. Term
. Landlord and Tenant hereby agree that the Term of the
Lease is hereby extended for a period of thirty-six
(36) months such that the “Expiration Date” shall
mean May 6, 2015.
5. Relocation
Date . Landlord and Tenant hereby agree that another
tenant of the Building, Tristone Capital Co.
(“Tristone”), is currently leasing the New Premises.
Tristone is not currently occupying the New Premises and has
expressed its desire to return possession of the New Premises to
Landlord. Tristone and Landlord are currently negotiating for a
mutually acceptable agreement to return the New Premises to
Landlord, so that Landlord may lease the New Premises to Tenant.
Landlord shall deliver the New Premises to Tenant (the
“Delivery Date” ) for the purpose of
constructing Tenant’s Improvements within the New Premises
upon the date which Landlord regains possession of the New
Premises, but in no event prior to the effective date of Landlord
regaining control pursuant to such mutually acceptable agreement
between Tristone and Landlord. The “Relocation
Date” shall mean the earlier to occur of (i) the
date upon which Tenant occupies the New Premises for the purpose of
conducting Tenant’s business, or (ii) forty-five
(45) days after the Delivery Date.
6. Rent
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A. Existing
Premises . Except as expressly provided herein,
Tenant’s obligation to pay Base Rent, Additional Rent and
other items payable by Tenant pursuant to the terms of the Lease
concerning the Existing Premises shall remain unchanged by this
First Amendment and Tenant shall continue to pay all such amounts
payable under the Lease with respect to the Existing Premises from
the Commencement Date to the day immediately prior to the
Relocation Date. The parties hereby acknowledge that the Relocation
Date may be up to forty-five (45) days prior to the date
Tenant actually ceases using the Existing Premises to accommodate
the construction of Tenant’s leasehold improvements in the
New Premises, provided, however, Tenant shall not be obligated to
pay Base Rent and Additional Rent for the Existing Premises (but
Tenant shall pay Base Rent and Additional Rent for the New Premises
as provided in Section 6B below) for the period of up to
forty-five (45) days following the Relocation Date as
contemplated herein.
B. New
Premises :
(i)
Commencing on the Relocation Date, and continuing through the
Expiration Date, Tenant shall pay Base Rent for the New Premises in
the manner provided in the Lease, in the amounts as follows:
Three
Allen Center – Quest Midstream Partners, L.P.
First Amendment
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Base Rent |
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Per Square Foot |
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Annual |
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Time Period |
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Of RSF |
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Base Rent |
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Base Rent |
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Relocation Date
– 05/06/12
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23.37 |
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229,049.37 |
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19,087.45 |
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05/07/12 –
05/06/15
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29.25 |
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286,679.25 |
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$ |
23,889.94 |
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(ii) In
addition to Base Rent for the New Premises, Tenant shall pay
Additional Rent and all other sums provided in the Lease with
respect to the New Premises from the Relocation Date to the
Expiration Date, in the manner provided in the Lease.
TENANT’S SHARE OF ADDITIONAL RENT IS PROJECTED TO BE
$12.16 PER SQUARE FOOT OF RENTABLE AREA PER YEAR FOR CALENDAR YEAR
2008 OR AN ESTIMATED AMOUNT OF $9,931.68 PER MONTH FOR THE NEW
PREMISES TO BE PAID IN ADDITION TO BASE RENT. Expenses that
vary with occupancy shall be grossed-up to reflect that the
Building is 100% occupied and operating and all such services are
provided to all tenants.
C. Tenant’s
Share . Tenant’s Share shall remain 0.28735%
through the day immediately preceding the Relocation Date.
Commencing upon the Relocation Date, Landlord and Tenant agree that
“Tenant’s Share”, as such term is used in the
Lease, shall be 0.8204%.
D. Texas Tax
Code . The parties acknowledge that the 2006 session
of the Texas Legislature revamped the Property Tax Code and the
terms and conditions of this Lease shall be liberally construed in
order to allow any taxes which previously and historically were
charged on an ad valorem basis but converted to another system of
taxation (even if it is a system of taxation otherwise excluded
under Section 4.2 of the Lease) to be charged as Taxes under
the Lease.
7. Condition of
the New Premises . Landlord and Tenant confirm and
agree that Tenant has accepted the New Premises in its current
“AS IS” condition and “WITH ALL
FAULTS,” except (a) for reasonable “punch
list” items identified in writing by Tenant within ten
(10) days after the Delivery Date; (b) latent defects
discovered and identified by written notice to Landlord within one
hundred eighty (180) days after the Delivery Date; and
(c) that Landlord agrees to provide to Tenant an allowance of
up to $210,695.00 ($15.00 per RSF of 3,433 RSF of the New Premises
plus $25.00 per RSF on 6,368 RSF of the New Premises) (the
“Allowance” ). The parties hereby agree that the
Allowance is to be used solely for the construction of the initial
leasehold improvements in the New Premises (above and below
ceiling), construction documents as well as architectural,
structural, mechanical, electrical, voice/data cabling, plumbing
design, accessibility plan review and inspection (Per Texas
Architectural Barriers Act), asbestos survey (Per SB-509), graphics
and security and otherwise in accordance with the Work Letter
attached to the Lease as Exhibit “F”, except that
Section 1 (a) of Exhibit “F” is hereby deleted and
replaced by the Allowance provided in this First Amendment.
Landlord shall only charge a three percent (3%) construction
management fee for all work done in the New Premises.
Notwithstanding anything to the contrary, Tenant may elect, by
giving Landlord prior written notice of Tenant’s election, to
apply up to $3.00 per RSF of the New Premises (up to a maximum of
$29,403.00) of the unused Allowance granted pursuant to
Three
Allen Center – Quest Midstream Partners, L.P.
First Amendment
3
this
First Amendment, if any, towards subsequent installment(s) of Base
Rent next due. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, TENANT
FURTHER ACKNOWLEDGES AND AGREES THAT LANDLORD DOES HEREBY DISCLAIM
ANY AND ALL WARRANTIES, EXPRESS AND IMPLIED, INCLUDING BUT NOT
LIMITED TO THOSE OF FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT
TO THE EXISTING PREMISES, THE NEW PREMISES AND/OR THE IMPROVEMENTS
LOCATED THEREIN.
8.
Parking . Tenant shall continue to have the
parking rights provided pursuant to Exhibit D to the Lease;
provided, however, commencing on the Relocation Date and continuing
through the Expiration Date, Landlord shall provide to Tenant and
Tenant shall contract on a “must-take” basis for a
total of ten (10) unreserved parking Permits in the Allen
Center Garage and/or the Metropolitan Parking Garage, as designated
by Landlord, Tenant shall have no other right to any parking
Permits, except as referred to in this First Amendment, although
Tenant may lease additional parking spaces at the then current rate
on a month-to-month basis, subject to availability. Tenant shall
pay the applicable monthly parking rate(s) charged by Landlord from
time to time for all parking Permits leased, which are currently
$185.00 and $165.00 (including sales tax) for unreserved parking
Permits in the Allen Center Garage and the Metropolitan Parking
Garage, respectively, and $205.00 to $260.00 (including sales tax)
for reserved parking Permits, depending on location. Ten percent
(10%) of Tenant’s parking Permit allotment may be taken as
reserved parking Permits at a location determined by Landlord
within either the Allen Center Garage and/or the Metropolitan
Parking Garage. From and after the Relocation Date, no discount
shall apply to the monthly parking rates. Parking rates are subject
to change.
9. Right of First
Refusal . Landlord and Tenant hereby agree that
Tenant shall continue to have the Right of First Refusal set forth
in Exhibit G to the Lease, except that effective upon
satisfaction of the contingency set forth in Section 15
hereof, (i) the ROFR Premises, as such term is used in
Exhibit G to the Lease, shall mean approximately 10,613 RSF on
Floor 40 of the Building (Suites 4050, 4040 and 4010), as shown on
Exhibit B attached hereto and Tenant shall no longer have any
rights to additional space on Floor 36 of the Building and (ii)
Tenant’s obligation to pay Rent for the ROFR Premises shall
commence upon the earlier of the substantial completion of
Tenant’s leasehold improvements within the ROFR Premises or
90 days following Landlord’s delivery of the ROFR
Premises. For purposes of determining Tenant’s priority to
the ROFR Premises in relation the rights of other tenants of the
Building, Tenant’s right to the ROFR Premises described in
this First Amendment shall be the date of the full execution of
this First Amendment and the Right of First Refusal is subject and
subordinate to (a) the pre-existing expansion option of Devon
Energy Production Company, L.P. (who has the right to expand by one
(1) full floor in the Building or in Devon Energy Tower at Two
Allen Center, as determined by Landlord) and the pre-existing right
of first refusal of Tristone Capital, LP (who has a right of first
refusal on the entire 40 th Floor of the
Building), and the successors and assigns of the foregoing,
(b) any and all preferential rights, expansion options,
refusal rights pertaining to the ROFR Premises which are granted to
a third party tenant whose initial premises was offered to Tenant
and which Tenant declined, and (c) the right to renew the
lease of any existing tenant of the ROFR Premises (and their
successors and assigns), whether by formal renewal option or
otherwise. The existing tenants occupying portions of the ROFR
Premises are as follows: (1) DnB Nor Bank ASA who occupies
approximately 3,050 RSF in Suite 4010 and whose lease
currently expires on march 31, 2009, (2) Savoy Capital, Inc.
who occupies approximately 3,646 RSF in Suite 4040 and whose
lease currently expires on March 31, 2009,
Three
Allen Center – Quest Midstream Partners, L.P.
First Amendment
4
and
(3) Fannie Mae who occupies approximately 3,969 RSF in
Suite 4050 and whose lease currently expires on June 30,
2010.
10. Early
Termination Right . In the event that Tenant
(i) desires to further expand the Premises in the future and
Landlord, or an affiliate of Landlord, can not or will not
accommodate Tenant’s desired expansion within the Building or
the office buildings commonly known as One Allen Center, Two Allen
Center or any expansions or additional buildings added to the Allen
Center complex in the future and (ii) immediately following
the Termination Date, as defined in Exhibit “C”
attached hereto, Tenant significantly expands Tenant’s
operations in the metropolitan area of the City of Houston (i.e,
including without limitation the cities reasonably adjacent to the
City of Houston, such as the cities of Katy, Sugar Land, Baytown,
Pearland, The Woodlands, League City, etc.), in a single office
building such that Tenant occupies at least 90% of the total amount
of space Tenant then currently leases pursuant to the Lease plus
the amount of space Tenant informed Landlord that it desired to
expand into within the Allen Center complex, then Tenant shall have
an option to terminate the Lease for the entire Premises effective
on the last day of the 42 nd full month
following the Relocation Date in accordance with the terms and
conditions of the Termination Option set forth in Exhibit
“C” attached hereto. Tenant’s failure to expand
following the Termination Date shall be deemed a material breach of
the Lease and in such case, Landlord may retroactively elect to
void Tenant’s exercise of the Termination Option, in which
case, the Lease shall continue in full force and effect as if the
Termination Option was never a part of the Lease and Tenant shall
be obligated to pay all amounts due pursuant to the Lease from the
Commencement Date through the Expiration Date.
11. Expansion
Option . Landlord and Tenant hereby acknowledge that
the Expansion Option set forth in Exhibit I to the Lease was
intended to provide Tenant with the one-time ability to expand the
size of the Premises to accommodate Tenant’s growth.
Furthermore, the parties acknowledge that the expansion contained
in this First Amendment fulfills the parties original intent
concerning such Expansion Option. Therefore, Landlord and Tenant
hereby agree that effective upon the satisfaction of the
contingency set forth in Section 15 of this First Amendment,
the Expansion Option set forth in Exhibit I to the Lease is
hereby deleted from the Lease in its entirety and shall be of no
further force or effect.
12.
Notices . Article 1 (n) of the Lease is hereby
amended to provide a new notice address for Tenant as
follows:
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Quest Midstream Partners, L.P. |
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Three Allen Center |
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333 Clay Street, Suite 3650 |
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Houston, Texas 77002 |
13.
Brokers . Tenant warrants that it has had no
dealings with any real estate broker or agent in connection with
the negotiation of this First Amendment, except for Partners
Commercial Realty, LP d/b/a NAI Houston ( “Tenant’s
Broker” ), and that it knows of no other real estate
brokers or agents who are or might be entitled to a commission in
connection with this First Amendment. Tenant agrees to indemnify
and hold harmless Landlord from and against, and to reimburse
Landlord for and with respect to, any liability or claim, whether
meritorious or
Three
Allen Center – Quest Midstream Partners, L.P.
First Amendment
5
not,
arising in respect to brokers and/or agents not so named and
claiming to represent Tenant. Landlord agrees to indemnify and hold
harmless Tenant from and against, and to reimburse Tenant for and
with respect to, any liability or claim, whether meritorious or
not, arising in respect to brokers and/or agents not so named and
claiming to represent Landlord. Landlord has agreed to pay the fees
of Tenant’s Broker, but only to the extent that Landlord has
agreed to do so pursuant to the separate written agreement with
Tenant’s Broker.
14. Calculation
of Charges . Without waiving any rights to enforce
the terms of the Lease, Tenant (i) understands and accepts the
methods of calculation for determining charges, amounts and
additional rent payable by Tenant under the Lease, as heretofore
calculated and as modified hereby and (ii) acknowledges (to
the fullest extent permitted by applicable law) that the provisions
of the Lease, as modified hereby, satisfy the requirements of
Section 93.012 (Assessment of Charges) of the Texas Property
Code.
15.
Contingency . Landlord and Tenant hereby
acknowledge that the New Premises are currently occupied by
Tristone. Accordingly, Landlord and Tristone must enter into an
agreement to return such space to Landlord prior to
Landlord’s obligation to deliver the New Premises to Tenant
hereunder. Therefore, Landlord and Tenant hereby agree that this
First Amendment in its entirety is contingent upon Landlord
entering into a definitive agreement with Tristone, who must agree
to return such space to Landlord, among other things, as determined
in Landlord’s and Tristone’s sole and absolute
discretion, prior to the effectiveness of this First Amendment. If
this contingency is not satisfied on or before February 29,
2008, then this First Amendment in its entirety shall be deemed
null and void, with no further action required by Landlord, and the
Lease, without regard to this First Amendment whatsoever, shall
continue in full force and effect.
16.
Miscellaneous .
(a)
Amendment to Lease . Tenant and Landlord acknowledge and
agree that the Lease has not been amended or modified in any
respect, other than by this First Amendment and there are no other
agreements of any kind currently in force and effect between
Landlord and Tenant with respect to the Premises or the Building.
The term “Lease” shall hereafter mean the Lease as
amended by this First Amendment, unless the context requires
otherwise.
(b)
Counterparts . This First Amendment may be executed in
multiple counterparts, and each counterpart when fully executed and
delivered shall constitute an original instrument, and all such
multiple counterparts shall constitute but one and the same
instrument.
(c)
Entire Agreement . This First Amendment sets forth all
covenants, agreements and understandings between Landlord and
Tenant with respect to the subject matter hereof and there are no
other covenants, conditions or understandings, either written or
oral, between the parties hereto except as set forth in this First
Amendment.
(d)
Full Force and Effect . Except as expressly amended
hereby, all other items and provisions of the Lease, as amended,
remain unchanged and continue to be in full force and effect.
Three
Allen Center – Quest Midstream Partners, L.P.
First Amendment
6
(e)
Conflicts . If any provision of this First Amendment
conflict with any of those of the Lease, then the provisions of
this First Amendment shall govern.
(f)
Authority of Tenant . Tenant represents and warrants to
Landlord that (i) Tenant is duly organized and an existing
legal entity, in good standing in the State of Texas,
(ii) Tenant has full right and authority to execute, deliver
and perform this First Amendment, (iii) the person executing
this First Amendment was authorized to do so and (iv) upon
request of Landlord, such person will deliver to Landlord
satisfactory evidence of his or her authority to execute this First
Amendment on behalf of Tenant.
(g)
Successors and Assigns . This First Amendment shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.
(h)
Good Faith and Fair Dealing . Landlord and Tenant agree
to exercise their rights and remedies, and perform their respective
obligations hereunder reasonably and in good faith.
This First Amendment is executed as
of the date first written above.
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“LANDLORD” |
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“TENANT” |
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Cullen Allen Holdings, L.P.,
a Delaware limited partnership |
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Quest Midstream Partners,
L.P.,
a Delaware limited partnership |
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Texas RE GP, LLC, |
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a Delaware limited
liability company |
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/s/ Michael Forbau |
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Name: |
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Michael Forbau |
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Vice President |
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/s/ Paul H. Layne |
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Paul H. Layne, |
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Executive Vice President, |
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Head of Houston Region |
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/s/ Steven M. Lukingbeal |
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Steven M. Lukingbeal, |
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Vice President, |
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Regional Counsel |
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Three
Allen Center – Quest Midstream Partners, L.P.
First Amendment
7
EXHIBIT A
FLOOR PLAN OF THE NEW PREMISES
[Floor Plan Diagram]
A-1
EXHIBIT B
FLOOR PLAN OF ROFR PREMISES
[Floor Plan Diagram]
B-1
EXHIBIT C
TERMINATION RIGHT
1.
Subject to and upon the terms, provisions and conditions set forth
in this Exhibit, Tenant, but not any assignee or subtenant thereof,
shall have the one time right (the “Termination
Right” ) to terminate the Lease as to the entire
Premises, effective on the last day of the forty-second (42
nd )
full calendar month following the Relocation Date (the
“Termination Date” ). In order to exercise the
Termination Right, Tenant must give Landlord written notice of
Tenant’s exercise of the Termination Right at least six
(6) months prior to the Termination Date, and pay the
Termination Fee, as hereinafter defined, within thirty
(30) days of the date of such notice. If Tenant fails to give
notice of exercise of the Termination Right prior to the required
notice date, the Termination Right shall be deemed waived and of no
further force and effect. If Tenant gives timely notice of exercise
of the Termination Right but fails to timely pay the Termination
Fee to Landlord when due, Landlord may at its option either
(i) deem the Termination Right waived and of no further force
and effect or (ii) enforce the termination of the Lease,
effective as of the Termination Date, and Tenant’s obligation
to pay the Termination Fee. The provisions of this paragraph shall
survive the expiration or termination of this Lease.
2.
Notwithstanding the foregoing, Landlord shall have the option to
revoke and nullify any purported exercise of the Termination Right
by Tenant if at the time of exercise or thereafter Tenant is in
monetary default under the Lease.
3. The
“Termination Fee” shall be an amount equal to
the sum of the following:
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the unamortized portion of the Lease Costs (as hereinafter
defined) as of the Termination Date; and |
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one (1) monthly installment of Base Rent and Additional
Rent. |
“Lease Costs”
shall mean all unamortized actual construction costs, architectural
and engineering fees, leasing commissions (both internal and
external), cabling design and installation costs, Excused Rent and
other costs, if any, incurred by Landlord in connection with
Tenant’s lease of the Premises, specifically including, but
not limited to, the Allowance granted to Tenant. For purposes of
calculating Lease Costs, each component or item of Lease Costs will
be deemed to be amortized in equal monthly installments over the
remaining Lease term(s) applicable to the space(s) in question at
the rate of ten percent (10%) per annum beginning on the date that
such component or item of Lease Costs was actually paid by
Landlord.
C-1
Cullen Allen Holdings,
L.P.
(“Landlord”)
Bluestem Pipeline,
LLC
(“Tenant”)
Suite
#3650
Three Allen
Center
Office
Lease
Table of
Contents
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1.
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BASIC LEASE PROVISIONS |
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1 |
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2.
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DEFINITIONS |
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3.
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TERM |
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4.
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RENT |
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5.
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USE & OCCUPANCY |
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6.
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SERVICES & UTILITIES |
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7.
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REPAIRS |
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|
11 |
|
|
8.
|
|
ALTERATIONS |
|
|
11 |
|
|
9.
|
|
INSURANCE |
|
|
12 |
|
|
10.
|
|
DAMAGE OR DESTRUCTION |
|
|
14 |
|
|
11.
|
|
INDEMNITY |
|
|
16 |
|
|
12.
|
|
CONDEMNATION |
|
|
16 |
|
|
13.
|
|
TENANT TRANSFERS |
|
|
16 |
|
|
14.
|
|
LANDLORD TRANSFERS |
|
|
19 |
|
|
15.
|
|
DEFAULT AND REMEDIES |
|
|
20 |
|
|
16.
|
|
SECURITY DEPOSIT |
|
|
22 |
|
|
17.
|
|
MISCELLANEOUS |
|
|
23 |
|
i
List of
Exhibits
| |
|
|
|
|
|
EXHIBIT A -
LOCATION OF PREMISES
|
|
|
A-1 |
|
|
EXHIBIT B - RULES
& REGULATIONS
|
|
|
B-1 |
|
|
EXHIBIT C - LEGAL
DESCRIPTION OF LAND
|
|
|
C-1 |
|
|
EXHIBIT D -
PARKING
|
|
|
D-1 |
|
|
EXHIBIT E
- NOTICE OF LEASE TERM
|
|
|
E-1 |
|
|
EXHIBIT F - WORK
LETTER
|
|
|
F-1 |
|
|
EXHIBIT G
- RIGHT OF FIRST REFUSAL
|
|
|
G-1 |
|
|
EXHIBIT H
- RENEWAL OPTION
|
|
|
H-1 |
|
|
EXHIBIT I -
EXPANSION OPTION
|
|
|
I-1 |
|
ii
Lease
Landlord and Tenant enter into this
Lease (“Lease”) as of the Execution Date on the
following terms, covenants, conditions and provisions:
| 1. |
|
BASIC LEASE PROVISIONS |
| 1.1 |
|
Basic Lease Definitions. In this Lease, the following
defined terms have the meanings indicated. |
| |
| (a) |
|
Execution Date: March 14, 2007. |
| |
| (b) |
|
Landlord: Cullen Allen Holdings, L.P., a Delaware limited
partnership. |
| |
| (c) |
|
Tenant: Bluestem Pipeline, LLC, a Delaware limited liability
company. |
| |
| (d) |
|
Building: Three Allen Center, 333 Clay Street, Houston, Texas
77002, deemed to contain: 1,194,719 RSF. |
| |
| (e) |
|
Premises: Suite #3650, located on the Thirty-Sixth (36
th )
floor of the Building (as identified on Exhibit
“A” ) and deemed to contain: 3,433 RSF. |
| |
| (f) |
|
Use: General non-governmental administrative office use
consistent with that of a first-class office building. |
| |
| (g) |
|
Scheduled Term: 60 Months. |
| |
| (h) |
|
Scheduled Commencement Date: April 1, 2007. |
| |
| (i) |
|
Base Rent: The following amounts payable in accordance with
Article 4: |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning |
|
Ending |
|
Annual Base Rent |
|
|
Annual |
|
|
Monthly |
|
|
month |
|
Month |
|
per RSF |
|
|
Base Rent |
|
|
Base Rent |
|
|
1
|
|
60 |
|
$ |
18.50 |
|
|
$ |
63,510.50 |
|
|
$ |
5,292.54 |
|
| |
|
|
This is a “Net” Lease as opposed to a
“Gross” Lease, which will require Tenant to pay an
additional amount for Taxes and Expenses, PROJECTED TO BE $10.97
PER RSF PER YEAR FOR CALENDAR YEAR 2007 OR AN ESTIMATED AMOUNT OF
$3,138.33 PER MONTH TO BE PAID IN ADDITION TO BASE RENT. |
| |
(j) |
|
[Intentionally Omitted]. |
| |
| |
(k) |
|
Tenant’s Share: 0.28735%. |
| |
| |
(l) |
|
Tenant’s Trade Name: Quest Midstream. |
| |
| |
(m) |
|
Security Deposit: Letter of Credit, initially in the amount of
$124,607.03, subject to annual decreases pursuant to Article
16. |
| |
| |
(n) |
|
Notice Addresses: For each party, the following
address(es): |
| |
|
|
|
For
Landlord:
|
|
For Tenant: |
|
|
|
|
|
Cullen Allen
Holdings, L.P.
|
|
Bluestem Pipeline, LLC |
|
c/o BrookField
Properties
|
|
Three Allen Center |
|
1200 Smith Street,
Suite 1200
|
|
333 Clay Street, Suite 3650 |
|
Houston, Texas
77002
|
|
Houston, Texas 77002 |
|
Attention: Property
Manager
|
|
|
Two
Allen Center – Bluestem Pipeline, LLC
Lease
1
| |
|
|
|
For
Landlord:
|
|
For Tenant: |
|
with a copy
to:
|
|
With a copy to: |
| |
|
Cullen Allen
Holdings, L.P.
|
|
The Staubach Company |
|
c/o Brookfield
Properties
|
|
Riverway, Suite 2500 |
|
1200 Smith Street,
Suite 1200
|
|
Houston, Texas 77056 |
|
Houston, Texas
77002
Attn: Executive Vice President
|
|
Attn: Lucian Bukowski |
| |
(o) |
|
Parking Permits: 3 “must-take” and up to 2
additional permits, pursuant to Exhibit “D”. |
| |
| |
(p) |
|
Brokers: The Staubach Company. Landlord will pay Broker a
commission, but only to the extent that Landlord has agreed to do
so pursuant to a separate agreement between Landlord and
Broker. |
| |
|
|
|
|
|
(q)
|
|
Liability Limit: |
|
$5,000,000 for any one accident or
occurrence. |
|
|
|
|
|
|
|
(r)
|
|
Business Hours: |
|
From 7:00 a.m. to 7:00 p.m. on Monday
through Friday and from 7:00 a.m. to 1:00 p.m. on Saturday,
excepting: New Year’s Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, Christmas Day, and other legal
holidays commonly observed in similar class office buildings in the
locale of the Building (“Holidays”). |
| |
(s) |
|
Allowance: up to $25.00 per RSF of the Premises (up to a total
of $85,825.00), pursuant to Exhibit “F”. |
| |
| |
(t) |
|
Right of First Refusal in accordance with Exhibit
“G”. |
| |
| |
(u) |
|
Renewal Option in accordance with Exhibit “H”. |
| |
| |
(v) |
|
Expansion Option in accordance with Exhibit
“I”. |
2.
DEFINITIONS
2.1 Project. The Land,
Building, Common Areas and Premises (as defined in §1 and
below) are collectively referred to as the
“Project.”
2.2 Land. “Land”
means the real property on which the Building and Common Areas are
located, including easements and other rights that benefit or
encumber the real property. Landlord’s interest in the Land
may be in fee or a leasehold. The Land may be expanded or reduced
after the Execution Date. A legal description of the Land is
attached hereto as Exhibit “C”.
2.3 Base Building.
“Base Building” means Building Structure and Mechanical
Systems, collectively, defined as follows:
| |
(a) |
|
Building Structure . “Building Structure”
means the structural components in the Building, including
foundations, floor and ceiling slabs, roofs, exterior walls,
exterior glass and mullions, columns, beams, shafts and emergency
stairwells. The Building Structure excludes the Leasehold
Improvements (and similar improvements to other premises) and the
Mechanical Systems. |
| |
| |
(b) |
|
Mechanical Systems . “Mechanical Systems”
means the mechanical, electronic, electric, physical or
informational systems generally serving the Building or Common
Areas, including the sprinkler, plumbing, heating, ventilating, air
conditioning, lighting, communications, security, drainage, sewage,
waste disposal, vertical transportation, fire/life safely
systems. |
2.4 Common Areas. Tenant will
have a non-exclusive right to use the Common Areas subject to the
terms of this Lease. “Common Areas” means those
interior and exterior common and public areas on the Land and in
the Building (and appurtenant easements) designated by Landlord for
the non-exclusive use by Tenant in common with Landlord, other
tenants and occupants, and their employees, agents and invitees.
The Common Areas includes parking facilities serving the Building
that are owned or leased by Landlord.
2.5 Premises. Landlord leases
to Tenant the Premises subject to the terms of this Lease. Except
as provided elsewhere in this Lease, by taking possession of the
Premises Tenant accepts the Premises in its “as
is”
Two
Allen Center – Bluestem Pipeline, LLC
Lease
2
condition and with
all faults, and the Premises is deemed in good order, condition,
and repair except (a) for reasonable “punch list”
items identified in writing by Tenant within ten (10) days
after Landlord tenders possession of the Premises; (b) latent
defects discovered and identified by written notice to Landlord
within one hundred eighty (180) days after Landlord tenders
possession of the Premises; and (c) that Landlord will
construct the Leasehold Improvements to the Premises, if any, as
described in the Work Letter, attached hereto as Exhibit
“F”. The Premises includes the Leasehold Improvements
and excludes certain areas, facilities and systems, as
follows:
| |
(a) |
|
Leasehold Improvements . “Leasehold
Improvements” means all non-structural improvements in the
Premises or exclusively serving the Premises, and any structural
improvements to the Building made to accommodate Tenant’s
particular use of the Premises. The Leasehold Improvements may
exist in the Premises as of the Execution Date, or be installed by
Landlord or Tenant under this Lease at the cost of either party.
The Leasehold Improvements include: (1) interior walls and
partitions (including those surrounding structural columns entirely
or partly within the Premises); (2) the interior one-half of
walls that separate the Premises from adjacent areas designated for
leasing; (3) the interior drywall on exterior structural
walls, and walls that separate the Premises from the Common Areas;
(4) stairways and stairwells connecting parts of the Premises
on different floors, except those required for emergency
exiting;(5) the frames, casements, doors, windows and openings
installed in or on the improvements described in (1-4), or that
provide entry/exit to/from the Premises; (6) all hardware,
fixtures, cabinetry, railings, paneling, woodwork and finishes in
the Premises or that are installed in or on the improvements
described in (1-5); (7) if any part of the Premises is on the
ground floor, the ground floor exterior windows (including
mullious, frames and glass); (8) integrated ceiling systems
(including grid, panels and lighting); (9) carpeting and other
floor finishes; (10) kitchen, rest room, lavatory or other
similar facilities that exclusively serve the Premises (including
plumbing fixtures, toilets, sinks and built-in appliances); and
(11) the sprinkler, plumbing, heating, ventilating, air
conditioning, lighting, communications, security, drainage, sewage,
waste disposal, vertical transportation, fire/life safety, and
other mechanical, electronic, physical or informational systems
that exclusively serve the Premises, including the parts of each
system that are connected to the Mechanical Systems from the common
point of distribution for each system to and throughout the
Premises. |
| |
| |
(b) |
|
Exclusions from the Premises . The Premises does not
include: (1) any areas above the finished ceiling or
integrated ceiling systems, or below the finished floor coverings
that are not part of the Leasehold Improvements,
(2) janitor’s closets, (3) stairways and stairwells to
be used for emergency exiting or as Common Areas, (4) rooms for
Mechanical Systems or connection of telecommunications equipment,
(5) vertical transportation shafts, (6) vertical or horizontal
shafts, risers, chases, flues or ducts, and (7) any easements
or rights to natural light, air or view. Notwithstanding the
forgoing provisions, Tenant’s telecommunications and data
cabling and related equipment in any area shall remain the
Tenant’s personal property and Tenant, at Tenant’s sole
cost and expense, shall remove such by the Expiration Date and
repair all damage caused by such removal. |
2.6 Building Standard.
“Building Standard” means the minimum or exclusive
type, brand, quality or quantity of materials Landlord reasonably
designates for use in the Building from time to time.
2.7 Tenant’s Personal
Property. “Tenant’s Personal Property” means
those trade fixtures, furnishings, equipment, work product,
inventory, stock-in-trade and other personal property of Tenant
that are not permanently affixed to the Project in a way that they
become a part of the Project and will not, if removed, impair the
value of the Leasehold Improvements that Tenant is required to
deliver to Landlord at the end of the Term under §3.3.
2.8 Rentable Square Feet
(“RSF”). The defined term“RSF” means
Rentable Square Feet. RSF includes the actual number of usable
square feet times a multiple to account for certain areas in the
Building and the leased floors which benefit the Premises. The
following add-on factor applies to the floor on which the Premises
are located: 24.64%.
3. TERM
3.1 Term. “Term”
means the period that begins on the Commencement Date and ends on
the Expiration Date, subject to renewal, extension or earlier
termination as may be further provided in this Lease.
“Month” means a full calendar month of the Term.
(a) Commencement Date .
The “Commencement Date” means the date that is the
earlier of:
Two Allen Center
– Bluestem Pipeline, LLC
Lease
3
| |
(1) |
|
The day that Tenant first conducts business in any part of the
Premises; or |
| |
| |
(2) |
|
The later of: |
| |
(A) |
|
The Scheduled Commencement Date, or |
| |
| |
(B) |
|
The day that Landlord tenders the Premises to Tenant with
Landlord’s Work substantially complete or that date that
Landlord would have tendered possession of the Premises but for
delay caused by Tenant. |
| |
(b) |
|
Expiration Date . “Expiration Date” means
the date that is the last day of the Scheduled Term (plus that many
additional days required for the Expiration Date to be the last day
of a calendar month) after the Commencement Date. |
| |
| |
(c) |
|
Early Occupancy . Tenant may not enter the Premises for
any purpose until Landlord tenders possession of the Premises to
Tenant. If Tenant conducts business in any part of the Premises
before the Scheduled Commencement Date, Tenant will pay Base Rent
for that period at the rate for the first Month that Base Rent is
due, without discount or excuse. |
| |
| |
(d) |
|
Late Occupancy . If Landlord fails to lender possession
of the Premises to Tenant by the Scheduled Commencement Date due to
delay caused by Tenant or Force Majeure, Landlord will not be in
default of this Lease. |
| |
| |
(e) |
|
Confirmation of Term . Landlord shall notify Tenant of
the Commencement Date using a Notice of Lease Term
(“NLT”) in the form attached to this lease as Exhibit
“E”. If the information set forth in the NLT is
correct, Tenant shall execute and deliver to Landlord the NLT
within 10 business days after its receipt, but Tenant’s
failure to do so will not reduce Tenant’s obligations or
Landlord’s rights under this Lease. |
3.2 Holdover. If Tenant keeps
possession of the Premises after the Expiration Date (or earlier
termination of this Lease) without Landlord’s prior written
consent (a “Holdover”), (which may be withheld in its
sole discretion), then in addition to the remedies available
elsewhere under this Lease or by law, Tenant will be a
tenant-at-sufferance and must comply with all of Tenant’s
obligations under this Lease, except that for each Month of
Holdover Tenant will pay 150% of the monthly Base Rent payable at
the end of the Term, without proration for any partial Month of
Holdover. Tenant shall indemnify and defend Landlord from and
against all claims and damages, both consequential and direct, that
Landlord suffers due to Tenant’s failure to return possession
of the Premises to Landlord at the end of the Term.
Landlord’s deposit of Tenant’s Holdover payment will
not constitute Landlord’s consent to a Holdover, or create or
renew any tenancy.
3.3 Condition on
Expiration.
(a) Return
of the Premises . At the end of the Term, Tenant will return
possession of the Premises to Landlord vacant, free of
Tenant’s Personal Property, in broom-clean condition, and
with all Leasehold Improvements in good working order and repair
(excepting ordinary wear and tear), except that Landlord may
require Tenant, by notice of at least 30 days before the
expiration of the Term, to remove any Tenant’s Wiring, or
item of Leasehold Improvements or Alterations, and restore the
Premises damaged by removal, if either:
| |
(1) |
|
When Landlord approved the installation of the improvement,
Landlord reserved in writing Landlord’s right to have Tenant
remove the improvement at the end of the Term; or |
| |
| |
(2) |
|
Tenant failed to obtain Landlord’s written consent under
§8.1(a) for an item of Alterations to become part of the
Premises. |
(b)
Correction by Landlord . If Tenant fails to return
possession of the Premises to Landlord in the condition required
under (a), then Tenant shall reimburse Landlord for the reasonable
costs incurred by Landlord to put the Premises in the condition
required under (a), plus Landlord’s standard administration
fee.
(c)
Abandoned Property . Tenant’s Personal Property left
behind in the Premises after the end of the Term will be considered
abandoned and Landlord may move, store, retain or dispose of these
items at Tenant’s cost, including Landlord’s standard
administration fee. As used in this Lease, “Landlord’s
standard administration” fee is fifteen percent (15%).
Two
Allen Center – Bluestem Pipeline, LLC
Lease
4
4.
RENT
4.1 Base Rent. Tenant shall
prepay 1 month’s installment of Base Rent by the
Execution Date, to be applied against Base Rent first due under
this Lease. During the Term, Tenant shall pay all other Base Rent
in advance, in monthly installments, by the 1 st of each
calendar month. Base Rent for any partial month will be
prorated.
4.2 Additional Rent.
Tenant’s obligation to pay Taxes and Expenses under this
§4.2 is referred to in this Lease as “Additional
Rent.”
| |
(a) |
|
Taxes . For each full or partial calendar year during
the Term, Tenant shall pay as in the manner described below the
Tenant’s Share of the amount of the Taxes.
“Taxes” means the total costs incurred by Landlord for:
(1) real and personal properly taxes and assessments
(including ad valorem and special assessments) levied on the
Project and Landlord’s personal property used in connection
with the Project; (2) taxes on rents or other income derived
from the Building; (3) capital and place- of -business
taxes; (4) taxes, assessments or fees in lieu of the taxes
described in (1-3); and (5) the reasonable costs incurred to reduce
the taxes described in (1-4). Taxes excludes net income taxes and
taxes paid under §4.3. The parties acknowledge that the 2006
session of the Texas Legislature revamped the Property Tax Code and
the terms and conditions of this Lease shall be liberally construed
in order to allow any taxes which previously and historically were
charged on an ad valorem basis but converted to another system of
taxation (even if it is a system of taxation otherwise excluded
under this Section 4.2) to be charged as a Taxes under the
Lease. |
| |
| |
(b) |
|
Expenses . For each full or partial calendar year during
the Term, Tenant shall pay in the manner described below the
Tenant’s Share of the Expenses. “Expenses” means
the total costs incurred by Landlord to operate, manage,
administer, equip, secure, protect, repair, replace, refurbish,
clean, maintain, decorate and inspect the Project, including a
market fee to manage the Project of no more than four percent (4%)
of the gross revenue of the Project (Landlord currently charges
three percent (3%). Expenses that vary with occupancy will be
calculated as if the Building is 100% occupied and operating and
all such services are provided to all tenants. The estimated
Expenses and Taxes for calendar year 2007 are $10.97 per RSF which
would mean that Tenant would pay a monthly amount of $3,138.33 as
Tenant’s Share of Taxes and Expenses over and above in
addition to the monthly Base Rent of $5,292.54 indicated
above. |
| |
(A) |
|
Standard Services provided under §6,1 ;
|
| |
| |
(B) |
|
Repairs and maintenance performed under §7.2; |
| |
| |
(C) |
|
The cost of casualty, liability, terrorism, fidelity, rent and
all other insurance (including deductibles paid) for the
Project; |
| |
| |
(D) |
|
Wages, salaries and benefits of personnel to the extent they
render services to the Project; |
| |
| |
(E) |
|
Costs of operating the Project management office (including
reasonable rent); |
| |
| |
(F) |
|
The Project’s fair pro rata share of certain landscaping
and related expenses to maintain Antioch Park and similarly
situated adjoining green space; |
| |
| |
(G) |
|
Amortization installments of costs required to be capitalized
and incurred: |
| |
(i) |
|
To comply with insurance requirements or laws (“Mandated
Expenses”); |
| |
| |
(ii) |
|
That are reasonably calculated to reduce other Expenses or the
rate of increase in other Expenses (“Cost-Saving
Expenses”); or |
| |
| |
(iii) |
|
That are reasonably calculated to improve or maintain the
safety, health or access of Project occupants, and otherwise
maintain the quality, appearance, or integrity of the Project
(“Quality Expenses”). |
Two
Allen Center – Bluestem Pipeline, LLC
Lease
5
| |
(A) |
|
Taxes; |
| |
| |
(B) |
|
Mortgage payments (principal and interest), and ground lease
rent; |
| |
| |
(C) |
|
Commissions, advertising costs, attorney’s fees and costs
of improvements in connection with leasing space in the
Building; |
| |
| |
(D) |
|
Costs reimbursed by insurance proceeds or tenants of the
Building (other than as Additional Rent); |
| |
| |
(E) |
|
Depreciation; |
| |
| |
(F) |
|
Except for the costs identified in §4.2(b)(l)(G), any
capitalized costs; |
| |
| |
(G) |
|
Collection costs and legal fees paid in disputes with
tenants; |
| |
| |
(H) |
|
Costs to maintain and operate the entity that is Landlord (as
opposed to operation and maintenance of the Project); |
| |
| |
(I) |
|
Installments of costs amortized under subsection (c) of
this §4.2; |
| |
| |
(J) |
|
Costs related to monitoring, testing, removal, cleaning,
abatement or containment of any significant quantities of hazardous
materials from the Building; |
| |
| |
(K) |
|
Costs to correct material defects in the construction of the
Building, except to the extent such are provided in Section
4.2(b)(1)(B); |
| |
| |
(L) |
|
Costs incurred to add or delete floors from the Common
Areas; |
| |
| |
(M) |
|
Any fines, penalties, late charges or liquidated damages and
related interest imposed on Landlord to the extent such are not
incurred due to the actions of Tenant, which shall be paid in full
by Tenant; |
| |
| |
(N) |
|
Cash charitable contributions in excess of $10,000 per year;
and |
| |
| |
(T) |
|
Reserves to the extent such do not pertain to regular and
recurring costs. |
| |
(c) |
|
Amortization and Accounting Principles . |
| |
(1) |
|
Each item of Mandated Expenses and Quality Expenses will be
fully amortized in equal annual installments, with interest on the
principal balance at the Amortization Rate, over the number of
years that Landlord reasonably projects the item of Expenses will
be productive for its intended use, without replacement, but
properly repaired and maintained. |
| |
| |
(2) |
|
Each item of Cost-Saving Expenses will be fully amortized in
equal annual installments, with interest on the principal balance
at the Amortization Rate, over the number of years that Landlord
reasonably estimates for the present value of the projected savings
in Expenses (discounted at the Amortization Rate) to equal the
cost. |
| |
| |
(3) |
|
Any item of Expenses of significant cost that is not required
to be capitalized but is unexpected or does not typically recur
may, in Landlord’s discretion, be amortized in equal annual
installments, with interest on the principal balance at the
Amortization Rate, over a number of years reasonably determined by
Landlord in substantial accordance with GAAP. |
| |
| |
(4) |
|
“Amortization Rate” means the prime rate of
Citibank, N.A. (or a comparable financial institution selected by
Landlord), plus 3%. |
| |
| |
(5) |
|
Landlord will otherwise use sound real estate accounting and
management principles, consistently applied, to determine
Additional Rent. To the extent applicable, Landlord will use GAAP
to the extent such is commonly applied. |
| |
(d) |
|
Estimates . Landlord will reasonably estimate Additional
Rent each calendar year. Tenant will pay the estimated Additional
Rent in advance, in monthly installments, by the first day of each
month, until the estimate is revised by Landlord. Landlord may
reasonably revise its estimate during a calendar |
Two
Allen Center – Bluestem Pipeline, LLC
Lease
6
| |
|
|
year and Tenant will pay the monthly installments after the
revision based on the revised estimate. The aggregate estimates of
Additional Rent paid by Tenant in a calendar year is the
“Estimated Additional Rent.” |
| |
| |
(e) |
|
Settlement . As soon as practical after the end of each
calendar year that Additional Rent is payable, Landlord will give
Tenant a statement of the actual Additional Rent for the calendar
year. The statement of Additional Rent is conclusive, binds Tenant,
and Tenant waives all rights to contest the statement, except for
items of Additional Rent to which Tenant objects by notice to
Landlord given within 90 days after receipt of
Landlord’s statement; however, Tenant’s objection will
not relieve Tenant from its obligation to pay Additional Rent
pending resolution of any objection. If the Additional Rent exceeds
the Estimated Additional Rent for the calendar year, then Tenant
shall pay the underpayment to Landlord in a lump sum as Rent within
30 days after receipt of Landlord’s statement of
Additional Rent. If the Estimated Additional Rent exceeds the
Additional Rent for the calendar year, then Landlord shall credit
the overpayment against Rent next due. If an overpayment of
Additional Rent is outstanding upon the expiration or sooner
termination of this Lease, Landlord shall refund such overpayment
to Tenant within 30 days after the date that Landlord completes its
statement of the actual Additional Rent for the applicable calendar
year. |
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(f) |
|
Landlord shall maintain complete and accurate books and records
detailing all Expenses and Taxes for the immediately preceding
calendar year. Landlord may keep the books and records at the
Building or at Landlord’s regional office. If Tenant objects
to items in Landlord’s statement of actual Additional Rent
for the calendar year, then Tenant and/or its representatives
(which shall be members of one of the “Big Four”
accounting firms and shall not be compensated on a contingency fee
basis for this audit) shall have the right, at Tenant’s
expense, to examine (but not to copy), and audit during normal
business hours, Landlord’s books and records pertaining to
the objected to items in the Expenses and Taxes for the preceding
calendar year to enable Tenant to verify the accuracy thereof. The
results of such audit shall be certified by a “Big
Four” accounting firm, at Tenant’s expense. Landlord
shall reasonably cooperate with Tenant in any such examination. Any
overpayment by Tenant shall be credited to Tenant and any
undercharge shall be paid by Tenant as soon as reasonably possible.
Failure by Tenant to contest or dispute the allocation of
Additional Rent within ninety (90) days after the date of the
statement of the actual Additional Rent for the calendar year is
submitted to Tenant (a) is deemed a waiver of the applicable
audit or dispute right and any right to contest the Additional Rent
charges (undercharges or overcharges) for the applicable Lease
year; (b) is deemed acceptance of the Additional Rent charges
as submitted to and reviewed by Tenant; and (c) CONSTITUTES FULL
RELEASE OF LANDLORD BY TENANT FOR ANY OVERCHARGES of Additional
Rent more than one year old. The foregoing provisions shall survive
termination or expiration of the Lease. Tenant shall not be
entitled to conduct such an audit if Tenant is otherwise in default
under this Lease, beyond any applicable notice and cure
provision. |
4.3 Other Taxes. Upon demand,
Tenant will reimburse Landlord for taxes paid by Landlord on
(a) Tenant’s Personal Property, (b) Rent,
(c) Tenant’s occupancy of the Premises, or (d) this
Lease. If Tenant cannot lawfully reimburse Landlord for these
taxes, then the Base Rent will be increased to yield to Landlord
the same amount after these taxes were imposed as Landlord would
have received before these taxes were imposed.
4.4 Terms of Payment.
“Rent” means all amounts payable by Tenant under this
Lease and the exhibits, including Base Rent and Additional Rent. If
a time for payment of an item of Rent is not specified in this
Lease, then Tenant will pay Rent within 30 days after receipt
of Landlord’s statement or invoice. Unless otherwise provided
in this Lease, Tenant shall pay Rent without notice, demand,
deduction, abatement or setoff, except as otherwise specifically
set forth herein, in lawful U.S. currency. Landlord will send
invoices payable by Tenant to Tenant; however, neither
Landlord’s failure to send an invoice nor Tenant’s
failure to receive an invoice for Base Rent (and installments of
Estimated Additional Rent) will relieve Tenant of its obligation to
timely pay Base Rent (and installments of Estimated Additional
Rent). Each partial payment by Tenant shall be deemed a payment on
account. No endorsement or statement on any check or any
accompanying letter shall constitute an accord and satisfaction,
affect Landlord’s right to collect the full amount due, or
require Landlord to apply any payment to other than Rent earliest
due. No payment by Tenant to Landlord will be deemed to extend the
Term or render any notice, pending suit or judgment ineffective. By
notice to the other, each party may establish or change its billing
address.
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4.5 Late Payment. If Landlord
does not receive all or part of any item of Rent when due, then
Tenant shall pay Landlord a “Late Charge” of 5% of the
overdue amount. Tenant agrees that the Late Charge is not a
penalty, and will compensate Landlord for costs not contemplated
under this Lease that are impracticable or extremely difficult to
fix. Landlord’s acceptance of a Late Charge does not waive
Tenant’s default.
4.6 [Intentionally
omitted].
4.7 Waiver of Tenant Rights and
Benefits Under Section 93.012, Texas Property Code.
Landlord and Tenant are knowledgeable and experienced in commercial
leasing transactions and agree that the provisions of this Lease
for determining all charges, amounts, and Additional Rent payable
by Tenant (including, without limitation, payments under this
Section 4), are commercially reasonable and valid even though
such methods may not state a precise mathematical formula for
determining such charges. Accordingly, Tenant voluntarily and
knowingly waives all rights and benefits of a tenant under
Section 93.012, Texas Property Code, as such section now
exists or as may be hereafter amended or succeeded. Nothing
contained in this waiver however is intended to limit or impair
Tenant’s audit rights granted hereunder, or except as
otherwise expressly set forth in this Lease to the contrary, any
other remedy available to Tenant under the Lease or law or in
equity (other than Section 93.012, Texas Property Code). In
addition, nothing in this §4.7 shall constitute a waiver of
Tenant’s right to dispute and/or initiate a claim disputing
Landlord’s methods of calculating or determining Expenses
and/or Landlord’s calculation or determination of Additional
Rent.
5. USE & OCCUPANCY
5.1 Use. Tenant shall use and
occupy the Premises only for the Use. Landlord does not represent
or warrant that the Project is suitable for the conduct of
Tenant’s particular business.
5.2 Compliance with Laws and
Directives.
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(a) |
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Tenant’s Compliance . Subject to the remaining
terms of this Lease, Tenant shall comply at Tenant’s expense
with all directives of Landlord’s insurers or laws
concerning: |
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(1) |
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The Leasehold Improvements and Alterations, |
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(2) |
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Tenant’s use or occupancy of the Premises, |
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(3) |
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Tenant’s employer/employee obligations, |
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(4) |
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A condition created by Tenant, |
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(5) |
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Tenant’s failure to comply with this Lease, |
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(6) |
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The negligence of Tenant, the Tenant Parties, or Tenant’s
Affiliates or contractors, or |
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(7) |
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Any chemical wastes, contaminants, pollutants or substances
that are hazardous, toxic, infectious, flammable or dangerous, or
regulated by any local, state or federal statute, rule, regulation
or ordinance for the protection of health or the environment
(“Hazardous Materials”) that are introduced to the
Project, handled or disposed by Tenant or its Affiliates, or any of
their contractors. |
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(b) |
|
Landlord’s Compliance . The cost of
Landlord’s compliance with directives or orders of
Landlord’s insurers or governing authorities concerning the
Project, other than those that are Tenant’s obligation under
subsection (a), will be included in Expenses to the extent allowed
under §4.2. |
5.3 Occupancy. Tenant shall
not interfere with Building services or other tenants’ rights
to quietly enjoy their respective premises or the Common Areas.
Tenant shall not make or continue nuisance, including any
objectionable odor, noise, fire hazard, vibration, or wireless or
electromagnetic transmission, Tenant will not maintain any
Leasehold Improvements or use the Premises in a way that increases
the cost of insurance required under §9.2, or requires
insurance in addition to the coverage required under
§9.2.
6.
SERVICES & UTILITIES
6.1 Standard Services.
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(a) |
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Standard Services Defined . “Standard
Services” means: |
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(1) |
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Healing, ventilation and air-conditioning (“HVAC”)
during Business Hours as reasonably required to comfortably use (in
a temperature range that is consistent for a first-class office
building) and occupy the Premises and interior Common Areas; |
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(2) |
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Tempered water from the public utility for use in Common Area
restrooms; |
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(3) |
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Janitorial services to the Premises and interior Common Areas
5 days a week, except Holidays, to the extent reasonably
determined by Landlord in a manner consistent with standards for
first class office buildings in the Houston Central Business
District; |
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(4) |
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Access to the Premises (by at least 1 passenger elevator if not
on the ground floor); |
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(5) |
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Labor and materials (to the extent such are Building Standard)
to replace fluorescent tubes and ballasts in Building Standard
light fixtures in the Premises; and |
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(6) |
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Electricity from Landlord’s selected provider(s) for
Common Areas lighting, Building Standard light fixtures in the
Premises and to convenience outlets in the Premises for the
operation of customary quantities and types of office equipment,
however, the connected load will not exceed an average of 3.4 watts
per rentable square foot of the Premises during Business Hours on
an annual basis, subject to the following: |
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(i) |
|
The electrical facilities in the Building available for
Tenant’s use are (i) 277/480 volts, 3 phase, for large
equipment loads and fluorescent lighting; and (ii) 120/208
volts, 3 phase, for small equipment loads and incandescent
lighting. |
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(ii) |
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Landlord will provide the capacity in the Building’s
electrical riser to supply (i) two (2) watts per square
foot of Usable Area at 277/480 volts and (ii) four
(4) watts per square foot of Usable Area at 120/208 volts.
Collectively, Tenant shall not have a connected electrical design
load greater than an average of six (6) watts per square foot
of Usable Area within the Premises (“Building Standard
Capacity”). |
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(iii) |
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The electrical cost component of Expenses is calculated on the
basis of .34 kilowatt-hours per square foot of Usable Area in the
Premises per month (“Building Standard Usage”). Tenant
shall pay to Landlord, upon demand, the cost of the consumption of
electricity in excess of the Building Standard Usage at rates
determined by Landlord which shall be in accordance with any
applicable laws, but not to exceed the cost of such consumption if
Tenant were billed directly from the local utility provider.
Landlord may, at its option, upon not less than thirty
(30) days’ prior written notice to Tenant, discontinue
the availability of any electrical service in excess of the
Standard Building Capacity or Standard Building Usage. If Landlord
gives any such notice, Tenant will contract directly with the
applicable public utility for the supplying of such electrical
service to the Premises. |
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(iv) |
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All of Tenant’s electrical usage, with the exception of
one (1) 277 volt, 2x4 Building Standard fluorescent light
fixture per 80 square feet of Usable Area, shall be metered by a
Building Standard consumption meter. |
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(v) |
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Tenant shall pay for all costs of meters, submeters, wiring,
risers, transformers, electrical panels, air conditioning and other
items necessary to accommodate Tenant’s electrical design
loads and capacities, which may be charged to the Allowance, if
any. Notwithstanding the foregoing, Landlord may refuse to allow
installation and withhold consent for Tenant’s installation
of any meters, submeters, wiring, risers, transformers, electrical
panels, or air conditioning and other items if, in Landlord’s
sole judgment, the same are not reasonable or would cause damage or
injury to the Building or the Premises or cause or create a
dangerous or hazardous condition or entail excessive or
unreasonable alterations or repairs to the Building or the
Premises, or would interfere with or create or constitute a
disturbance to other tenants or occupants of the Building. |
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(b) |
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Standard Services Provided . During the Term, Landlord
shall provide the Standard Services to Tenant. The cost of the
Standard Services is included in Expenses. Landlord is not
responsible for any inability to provide Standard Services due to
either: the concentration of personnel or equipment in the
Premises; or Tenant’s use of equipment in the Premises that
is not customary office equipment, has special cooling
requirements, or generates excessive heat, as determined in
Landlord’s reasonable discretion. |
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(c) |
|
Impermissible REIT Income . For so long as the entity
specified in §1.1(b) (or an affiliate or REIT- qualified
successor in interest of such entity) shall be the Landlord under
this Lease, any services required to be provided to Tenant under
this Lease that may result in the actual or constructive receipt by
Landlord (or any member of Landlord) of impermissible tenant
service income as described in Section 856(d)(7) of the
Internal Revenue Code shall be performed by Brookfield Properties
Tenant Services LLC, a Delaware limited liability company (or its
designated successors or assigns). |
6.2 Additional Services.
Unless Tenant obtains Landlord’s prior written consent,
Tenant will not use utilities or services in excess of the Standard
Services. If Landlord so consents, Landlord may provide utilities
and services in excess of the Standard Services subject to the
following:
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(a) |
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HVAC . If Tenant requests HVAC service to the Premises
during non-Business Hours, Tenant will pay as Rent Landlord’s
scheduled rate for this service, which are currently $35.00 per
hour, per air handler. |
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(b) |
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Lighting . Landlord will furnish both Building Standard
and non-Building Standard lamps, bulbs, ballasts and starters that
are part of the Leasehold Improvements. Landlord will install
non-Building Standard items at Landlord’s scheduled rate for
this service. |
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(c) |
|
Other Utilities and Services . Tenant will pay as Rent
the cost of utilities or services (other than HVAC and lighting
addressed in (a) and (b)) either used by Tenant or provided at
Tenant’s request in excess of that provided as part of the
Standard Services, plus Landlord’s standard administration
fee. Tenant’s excess consumption may be reasonably estimated
by Landlord unless either Landlord requires or Tenant elects to
install Building Standard meters to measure Tenant’s
consumption. |
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(d) |
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Additional Systems and Metering . Landlord may require
Tenant, at Tenant’s expense, to upgrade or modify existing
Mechanical Systems serving the Premises or the Leasehold
Improvements to the extent necessary to meet Tenant’s excess
requirements (including installation of Building Standard meters to
measure the same). |
6.3 Alternate Electrical
Billing. Landlord may elect to separately meter Tenant’s
total consumption of electricity in the Premises, including
lighting and convenience outlets. If Landlord so elects, then
Landlord shall notify Tenant of such election and in lieu of
including consumption of electricity of tenanted premises in
Expenses, Tenant shall pay to Landlord as Rent the cost of
Tenant’s electricity consumption, plus
(i) Landlord’s standard administration fee and (ii)
electrical expenses allocable to Common Area and other non-leasable
RSF in the Building (provided that to the extent such amount is
included in Expenses, it shall not be separately billed).
6.4 Telecommunication
Services. Tenant will contract directly with third party
providers and will be solely responsible for paying for all
telephone, data transmission, video and other telecommunication
services (“Telecommunications Services”) subject to the
following:
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(a) |
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Providers . Each Telecommunication Services provider
that does not already provide service to the Building shall be
subject to Landlord’s approval, which Landlord may withhold
in Landlord’s sole discretion. Without liability to Tenant,
the license of any Telecommunication Services provider servicing
the Building may be terminated under the terms of the license, or
not renewed upon the expiration of the license. |
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(b) |
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Tenant’s Wiring . Landlord may, in its sole
discretion, designate the location of all wires, cables, fibers,
equipment, and connections (“Tenant’s Wiring”)
for Tenant’s Telecommunication Services, restrict and control
access to telephone cabinets and rooms. Tenant may not use or
access the Base Building, Common Areas or roof for Tenant’s
Wiring without Landlord’s prior written consent, which
Landlord may withhold in Landlord’s sole discretion, or for
which Landlord may charge a fee determined by Landlord. |
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(c) |
|
No Beneficiaries . This §6.4 is solely for
Tenant’s benefit, and no one else shall be considered
beneficiary of these provisions. |
6.5 Special Circumstances.
Without breaching this Lease, Landlord may interrupt, limit or
discontinue any utility or services Landlord provides under this
Article 6 under any of the following circumstances: (a) in an
emergency; (b) to comply with laws or to conform to voluntary
government or industry guidelines; and (c) to repair or
maintain the Project under §7.2; or (d) modify, renovate or
improve the Project under §8.2, subject to the terms of
Section 6.6 below. Landlord shall use its commercially reasonable
efforts to minimize the impact of such interruption, limitation or
discontinuance on Tenant, and shall restore such utility or service
as soon as reasonably possible under the circumstances.
6.6 Interruption of Services.
Except for the circumstances set forth in Section 6.5(a), (b)
and (c), if there is an interruption of the services described in
6.1 (a) (1), (2), (4) and/or (6) (the “Essential
Services”) and such interruption is not the result of
negligence or willful misconduct of Tenant, its agents or
employees, and if such interruption continues for a period of five
(5) consecutive business days or thirty (30) business
days in any one (1) twelve month period after receipt by Landlord
of written notice from Tenant, Tenant shall be entitled to an
abatement of rent from the sixth (6 th ) consecutive
day with respect to that portion of the Premises rendered unusable,
and which Tenant does not actually use, by Tenant as a result of
such interruption, until such time as such Essential Services are
restored.
7.
REPAIRS
7.1 Tenant’s Repairs.
Except as provided in Articles 10 and 12, during the Term Tenant
shall, at Tenant’s cost, repair, maintain and replace, if
necessary, the Leasehold Improvements and keep the Premises in good
order, condition and repair. Tenant’s work under this
§7.1 must be (a) approved by Landlord before commencement,
(b) supervised by Landlord at Tenant’s cost, If Landlord
so reasonably requires, and (c) performed in a first-class
manner with materials of at least Building Standard.
7.2 Landlord’s Repairs.
Except as provided in Articles 10 and 12, during the Term Landlord
shall repair, maintain and replace, if necessary, all parts of the
Project that are not Tenant’s responsibility under §7.1
or any other tenant’s responsibility under their respective
lease, and otherwise keep the Project in good order and condition
according to the standards prevailing for comparable first-class
office buildings in the area in which the Building is located.
Except in an emergency, Landlord will use commercially reasonable
efforts to avoid disrupting Tenant’s business in performing
Landlord’s duties under this §7.2. Tenant may not repair
or maintain the Project on Landlord’s behalf or offset any
Rent for any repair or maintenance of the Project that is
undertaken by Tenant.
8.
ALTERATIONS
8.1 Alterations by Tenant.
“Alterations” means any modifications, additions or
improvements to the Premises or Leasehold Improvements made by
Tenant during the Term, including modifications to the Base
Building or Common Areas required by law as a condition of
performing the work. Alterations are made at Tenant’s sole
cost and expense, subject to the following:
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(a) |
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Consent Required . All Alterations require
Landlord’s prior written consent, except for cosmetic changes
solely within the Premises, which do not affect the Base Building
or Common Areas and which cost less than $5,000, in the aggregate
over a six (6) month period. If a Design Problem exists,
Landlord may withhold its consent in Landlord’s sole
discretion; otherwise, Landlord will not unreasonably withhold,
condition or delay its consent. Unless Tenant obtains
Landlord’s prior written consent to the Alterations becoming
part of the Premises to be tendered to Landlord on termination of
the Lease, Landlord may require Tenant to remove Alterations and
restore the Premises under §3.3 upon termination of this
Lease. |
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(b) |
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Design Problem Defined . “Design Problem”
means a condition that results, or will result, from work proposed,
being performed or that has been completed that either: |
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(1) |
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Does not comply with laws; |
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(2) |
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Does not meet or exceed the Building Standard; |
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(3) |
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Exceeds the capacity, adversely affects, is incompatible with,
or impairs Landlord’s ability to maintain, operate, alter,
modify or improve the Base Building; |
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(4) |
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Affects the exterior appearance of the Building or Common
Areas; |
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(5) |
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Violates any agreement affecting the Project; |
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(6) |
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Violates any insurance regulations or standards for a
fire-resistive office building; or |
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(7) |
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Locates any equipment, Tenant’s Wiring or Tenant’s
Personal Property on the roof of the Building, in Common Areas or
in telecommunication or electrical closets. |
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(c) |
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Performance of Alterations . Alterations shall be
performed by Tenant in a good and workman-like manner according to
plans and specifications approved by Landlord. All Alterations
shall comply with law and insurance requirements. Landlord’s
designated contractors must perform Alterations affecting the Base
Building or Mechanical Systems; and, all other work will be
performed by qualified contractors that meet Landlord’s
insurance requirements and are otherwise reasonably approved by
Landlord. Promptly after completing Alterations, Tenant will
deliver to Landlord “as-built” CADD plans, proof of
payment, a copy of the recorded notice of completion, and all
unconditional lien releases. |
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(d) |
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Bonding . If requested by Landlord, before commencing
Alterations Tenant shall at Tenant’s cost obtain bonds, or
deposit with Landlord other security reasonably acceptable to
Landlord for the payment and completion of the Alterations. These
bonds or other security shall be in form and amount acceptable to
Landlord, not to exceed 125% of the cost of completion. |
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(e) |
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Insurance . Throughout the performance of Alterations,
Tenant shall carry worker’s compensation insurance in
statutory limits, “all risk” Builders Risk coverage and
general liability insurance, with completed operation endorsement,
for any occurrence in or about the Project, under which Landlord
and its agent and any Encumbrance holder whose name and address
have been furnished to Tenant shall be named as parties insured, in
such limits as Landlord may reasonably require, with insurers
reasonably satisfactory to Landlord. Tenant shall furnish Landlord
with evidence that such insurance is in effect at or before the
commencement of Alterations and, on request, at reasonable
intervals thereafter during the continuance of Alterations. |
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(f) |
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Alterations Fee . Tenant shall pay Landlord as Rent 5%
of the total construction costs of the Alterations to cover review
of Tenant’s plans and construction coordination by its own
employees. In addition, Tenant shall reimburse Landlord for the
actual cost that Landlord reasonably incurs to have engineers,
architects or other professional consultants review Tenant’s
plans and work in progress, or inspect the completed
Alterations. |
8.2 Alterations by Landlord.
Landlord may modify, renovate or improve the Land, Building, and
Common Areas (but not the Premises) as Landlord deems appropriate,
provided Landlord uses commercially reasonable efforts to avoid
disrupting Tenant’s business.
8.3 Liens and Disputes.
Tenant will keep title to the Land and Building free of any liens
concerning the Leasehold Improvements, Alterations, or
Tenant’s Personal Property, and will promptly take whatever
action is required to have any of these liens released and removed
of record (including, as necessary, posting a bond or other
deposit). To the extent legally permitted, each contract and
subcontract for Alterations will provide that no lien attaches to
or may be claimed against the Project. Tenant will indemnify
Landlord for costs that Landlord reasonably incurs because of
Tenant’s violation of this §8.3.
9.1 Tenant’s
Insurance.
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(a) |
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Tenant’s Coverage . Before taking possession of
the Premises for any purpose (including construction of Tenant
Improvements, if any) and during the Term, Tenant will provide and
keep in force the following coverage: |
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(1) “all risk” property insurance (including
coverage for terrorism), with a deductible reasonably acceptable to
Landlord, covering all present and future Leasehold Improvements
and Tenant’s Personal Property to a limit of not less than
the full replacement cost thereof, and |
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(2) commercial general liability insurance, including a
contractual liability endorsement, and personal injury liability
coverage, in respect of the Premises and the conduct or operation
of business therein, with Landlord and its managing agent, if any,
and each Encumbrance holder, defined in Section 14.2, whose
name and address shall have been furnished to Tenant, as additional
insureds, with limits of not less than $5,000,000 combined single
limit for bodily injury and property damage liability in any one
occurrence, and |
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(3) [Intentionally Omitted], and |
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(4) when Alterations are in process, the insurance
specified in Section 8.1 (c). |
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(b) |
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Insurers and Terms . The limits of such insurance shall
not limit the liability of Tenant. Tenant shall deliver to Landlord
and any additional insureds, at least 10 days prior to the
Commencement Date, such fully paid-for policies or certificates of
insurance, in form reasonably satisfactory to Landlord issued by
the insurance company or its authorized agent. Tenant shall procure
and pay for renewals of such insurance from time to time before the
expiration thereof, and Tenant shall deliver to Landlord and any
additional insureds such renewal policy or a certificate thereof at
least 30 days before the expiration of any existing policy.
All such policies shall be issued by companies of recognized
responsibility licensed to do business in Texas and rated by
Best’s Insurance Reports or any successor publication of
comparable standing as A/VIII or better or the then equivalent of
such rating, and all such policies shall contain a provision
whereby the same cannot be cancelled, allowed to lapse or modified
unless Landlord and any additional insureds are given at least 30
days’ prior written notice of such cancellation, lapse or
modification. The proceeds of policies providing “all
risk” property insurance of Leasehold Improvements and
Tenant’s Personal Property shall be payable to Landlord,
Tenant and each Encumbrance holder, defined in Section 14.2,
as their interests may appear. Tenant shall cooperate with Landlord
in connection with the collection of any insurance monies that may
be due in the event of loss and Tenant shall execute and deliver to
Landlord such proofs of loss and other instruments which may be
required to recover any such insurance monies. Landlord may from
time to time require that the amount of the insurance to be
maintained by Tenant under this Section 14.2 be increased by
reasonable amounts under the circumstances, so that the amount
thereof adequately protects Landlord’s interest. |
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(c) |
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Proof of Insurance. Tenant shall provide Landlord with
certificates of insurance or other reasonable proof that the
coverage required under (a) is in effect. Tenant will provide
reasonable proof at least 30 days before any policy expires
that the expiring policy will be replaced. |
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(d) |
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Compliance with Insurance Standards . |
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(1) Tenant shall not violate, or permit the violation of,
any condition imposed by any insurance policy then issued in
respect of the Project. Tenant shall not do or permit anything to
be done, or keep or permit anything to be kept, in the Premises
which would subject Landlord or any Encumbrance holder, defined in
Section 14.2, to any liability or responsibility for personal
injury or death or property damage, or which would increase any
insurance rate in respect of the Project over the rate which would
otherwise then be in effect or which would result in insurance
companies of good standing refusing to insure the Project in
amounts reasonably satisfactory to Landlord, or which would result
in the ca |
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