Common use of Rent Supplements Clause in Contracts

Rent Supplements. (a) The Parties have executed a Rent Supplement with respect to the Rent in effect as of the Effective Date (the “Effective Date Rent Supplement”) with respect to the estimated Effective Date Rate Base and Expected Incremental CapEx during 2018. Prior to the beginning of each Lease Year (and, if applicable, at such other times during the Lease Year if the Parties expect Incremental CapEx and the Parties have not yet entered into a Rent Supplement with respect to such Expected Incremental CapEx), the Parties will negotiate in good faith to supplement, in the form of Schedule 3.2, Rent and other matters in accordance with this Section 3.2 (each, a “Rent Supplement”) to reflect the amount of Incremental CapEx, if any, that the Parties expect to be placed in service during such Lease Year (“Expected Incremental CapEx”). The following will apply to the determination of the matters set forth on the Rent Supplement: (i) The Parties will supplement Base Rent and Percentage Rent in a manner intended to provide a Comparable Rate of Return for Lessor on the Expected Incremental CapEx. Such Comparable Rate of Return may be achieved by a split between Base Rent and Percentage Rent, in such case in the proportions requested by Lessor and agreed to by Lessee. (ii) Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital Expenditures will qualify as Incremental CapEx on the date the assets developed with such Capital Expenditures are placed in service (notwithstanding that Capital Expenditures that are included in CapEx Budgets pursuant to Article X are for such purposes measured based on the date the related Capital Expenditures are incurred). (iii) Notwithstanding anything to the contrary contained in this Agreement, such supplement shall be determined solely to provide a Comparable Rate of Return on such Expected Incremental CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any difference between the initially anticipated and the actual return of or on, or the Rent payable with respect to, the Permian Assets as in place prior to the additions resulting from such Expected Incremental CapEx.

Rent Supplements. (a) The Parties have executed a Rent Supplement with respect to the Rent in effect as of the Effective Date (the “Effective Date Date. This Section 3.2(a) will not require any amendment to Rent Supplement”) with respect to the estimated Effective Date Rate Base and Expected Incremental CapEx during 2018. Prior to the beginning of each Lease Year (and, if applicable, at such other times during the Lease Year if unless the Parties expect Incremental CapEx and the Parties have not yet previously entered into a Rent Supplement with respect to such Expected Incremental CapEx). If the Parties expect that during any Lease Year there will be Incremental CapEx, then the Parties will negotiate in good faith to supplement, in the form of Schedule 3.2, supplement Rent and other matters in accordance with this Section 3.2 (each3.2. In connection therewith, a “Rent Supplement”) to reflect the amount Parties will negotiate the pre-tax rate of return that Lessor should earn on such Incremental CapEx, if anywhich will be based generally on an agreed-to discount from the rate of return that public utility XXXXXXX/XXXXX/XXXXXXX ASSETS LEASE AGREEMENT companies generally earn in the State of Texas at the time of such Rent Supplement negotiation, that adjusted in the manner agreed to by the Parties expect (if justified) to be placed in service during take into account the creditworthiness of Lessee at the time of such Lease Year Rent Supplement negotiation (the “Expected Incremental CapExAgreed-to-Discount”). Such discount will be based on the comparable discount agreed to in connection with the negotiation of rent pursuant to the McAllen Lease and other leases between Lessee and Lessor (or an affiliate thereof), as modified to take into account appropriate factors at the time of such Rent Supplement negotiation. Such pre-tax rate of return, as determined in accordance with this paragraph, is referred to as a “Comparable Rate of Return.” The following will apply to the determination of the matters set forth on the Rent Supplement: (i) The Parties will supplement Base Rent and Percentage Rent in a manner intended to provide a Comparable Rate of Return for Lessor on the Expected its Incremental CapEx. Such Comparable Rate of Return may will be achieved by a split between Base Rent and Percentage Rent, in such case Rent in the proportions requested by Lessor and agreed to by Lessee. (ii) Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital Expenditures will qualify as Incremental CapEx on the date the assets developed with such Capital Expenditures are placed in service (notwithstanding that service, which differentiates these Capital Expenditures that are from the Capital Expenditures included in CapEx Budgets pursuant to Article X X, which are for such purposes measured under this Agreement based on the date the related Capital Expenditures are incurred). (iii) Notwithstanding anything herein to the contrary contained in this Agreementcontrary, such supplement shall be determined solely to provide a Comparable Rate of Return on such Expected Incremental CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any difference between the initially anticipated and the actual return of or on, or the Base Rent or Percentage Rent payable with respect to, the Permian Xxxxxxx/Xxxxx/Xxxxxxx Assets as in place prior to the additions resulting from such Expected Incremental CapEx. (iv) Base Rent shall at all times be at least equal to the aggregate amount of scheduled principal and interest due and payable by Lessor for such period with respect to indebtedness incurred by Lessor in connection with the acquisition of the Original Assets and all indebtedness incurred by Lessor in connection with its funding of any Footprint Projects. (v) For clarity, in no event will this Section 3.2 require a reduction in Rent if there is no Incremental CapEx. (b) The Parties will memorialize the results of all Incremental CapEx supplements and Lessee CapEx supplement negotiations by executing and delivering a Rent Supplement, which will set forth the amount of contemplated Incremental CapEx, new Base Rent, a new Percentage Rent Schedule, new Revenues Attributable to Lessee CapEx, Lessee CapEx, new Accumulated Deficit (if applicable), new TCOS Allocation (if applicable), the effective date on which such changes will occur and the term of such Rent Supplement (if applicable). In no event will any new Base Rent or new Percentage Rent be payable, or any Revenues Attributable to Lessee CapEx be taken into account as a reduction to Unadjusted Gross Revenues, before the XXXXXXX/XXXXX/XXXXXXX ASSETS LEASE AGREEMENT assets funded by the related Incremental CapEx or Lessee CapEx are placed in service. The Rent Supplement may also include the projected in-service date of the Incremental CapEx or Lessee CapEx to which the Rent Supplement applies. Upon execution and delivery of any such Rent Supplement, this Agreement will be deemed amended thereby. The Rent Supplement shall have the term set forth therein, not to extend past the then-current Term of this Agreement. At the end of the term of each Rent Supplement, the Parties shall negotiate a new Rent Supplement for the Lessee CapEx and Incremental CapEx covered by such prior Rent Supplement using the Comparable Rate of Return methodology set forth in Sections 3.1(d)(iii) and 3.2(a). Notwithstanding the foregoing, the Percentage Rent Percentages and Annual Percentage Rent Breakpoints reflected on such new Rent Supplement with respect to the Rate Base covered by such prior Rent Supplement shall be as set forth on the Percentage Rent Schedule of such prior Rent Supplement. If necessary, Exhibit A will be supplemented to reflect new assets funded by Incremental CapEx. (c) If following a Rent Supplement there is a difference in (i) the amount of actual Incremental CapEx compared to the amount contemplated by the then-effective Rent Supplement, (ii) the amount of actual Lessee CapEx compared to the amount contemplated by the then-effective Rent Supplement, or (iii) the placed-in-service date of such Incremental CapEx or Lessee CapEx compared to what was contemplated at the time of the then-effective Rent Supplement, then, at any time within two years of the date the Parties agree to a Rent Supplement, either Party may request a Rent Validation. If there has been such a difference, the Parties will supplement Incremental CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, Revenues Attributable to Lessee CapEx, Lessee CapEx and/or Accumulated Deficit, as applicable, to what they would have been, at the time of the Rent Supplement, to reflect (1) the amount of actual Incremental CapEx and Lessee CapEx and/or (2) the actual dates such Incremental CapEx and/or Lessee CapEx was placed in service, but keeping fixed all other relevant assumptions and inputs, including the Comparable Rate of Return. For the avoidance of doubt, in no circumstance will a Rent Validation occur to account for any difference between the initially anticipated and the actual return of or on the Incremental CapEx and/or Lessee CapEx, and no such difference will be taken into account as part of such Rent Validation. The Parties also will negotiate in good faith to determine (A) whether one Party should make a lump sum payment to the other Party as a result of excess or deficient Rent Lessee paid, prior to the date of the effective date of the Rent Validation, in connection with the Rent Supplement, given any negotiated supplement, and, (B) if applicable, the amount of any such lump sum payment. The Parties will memorialize the result of any Rent Validation negotiation by executing and delivering a revised Rent Supplement, which will set forth revised expected Incremental CapEx, Lessee CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, Revenues Attributable to Lessee CapEx and/or Accumulated Deficit, as applicable, the effective date on which such changes will occur and, if applicable, the amount of the lump sum payment that one Party must make to the other Party (which payment must be made within 30 days of the execution and delivery of such revised Rent Supplement). Any lump sum payments received by Lessor under this Section 3.2(c) shall be treated as Rent by the Parties. Upon execution and delivery of any such revised Rent Supplement, this Agreement will be deemed amended thereby. The Parties will reasonably cooperate to minimize the number of Rent Validations, and prospective Rent Supplements and Rent Validations may be combined into one revised, amended and restated Rent Supplement. XXXXXXX/XXXXX/XXXXXXX ASSETS LEASE AGREEMENT (d) In connection with the foregoing provisions of this Section 3.2, Lessor and Lessee shall use good faith efforts to agree to a Rent Supplement, renewal of a Rent Supplement or Rent Validation, as applicable, within 60 days of a request therefor by either Party. If, by the end of such 60 day period, Lessee and Lessor cannot in good faith agree to the terms of a Rent Supplement, renewal of a Rent Supplement or Rent Validation, such dispute shall be submitted to arbitration in accordance with Section 13.7 of this Agreement, pursuant to which the Arbitration Panel shall be empowered to determine the terms of such Rent Supplement, renewal of a Rent Supplement or Rent Validation (including any lump sum payment amount), based on submissions by each of the Lessee and the Lessor.

Rent Supplements. (a) The Parties have executed a Rent Supplement with respect to the Rent in effect as of the Effective Date (the “Effective Date Date. This Section 3.2(a) will not require any amendment to Rent Supplement”) with respect to the estimated Effective Date Rate Base and Expected Incremental CapEx during 2018. Prior to the beginning of each Lease Year (and, if applicable, at such other times during the Lease Year if unless the Parties expect Incremental CapEx and the Parties have not yet previously entered into a Rent Supplement with respect to such Expected Incremental CapEx). If the Parties expect that, during any Lease Year there will be Incremental CapEx, then the Parties will negotiate in good faith to supplement, in the form of Schedule 3.2, supplement Rent and other matters in accordance with this Section 3.2 (each3.2. In connection therewith, a “Rent Supplement”) to reflect the amount Parties will negotiate the pre-tax rate of return that Lessor should earn on such Incremental CapEx, if anywhich will be based generally on an agreed-to discount from the rate of return that public utility companies generally earn in the State of Texas at the time of such Rent Supplement negotiation, that adjusted in the manner agreed to by the Parties expect (if justified) to be placed in service during take into account the creditworthiness of Lessee at the time of such Lease Year Rent Supplement negotiation (the “Expected Incremental CapExAgreed-to-Discount”). Such discount will be based on the comparable discount the parties negotiated and agreed to on or around the Original Lease Date, as modified to take into account appropriate factors at the time of such Rent Supplement negotiation. Such pre-tax rate of return, as determined in accordance with this paragraph, is referred to as a “Comparable Rate of Return.” The following will apply to the determination of the matters set forth on the Rent Supplement: (i) The Parties will supplement Base Rent and Percentage Rent in a manner intended to provide a Comparable Rate of Return for Lessor on the Expected its Incremental CapEx. Such Comparable Rate of Return may will be achieved by a split between Base Rent and Percentage Rent, in such case Rent in the proportions requested by Lessor and agreed to by Lessee. (ii) Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital Expenditures will qualify as Incremental CapEx on the date the assets developed with such Capital Expenditures are placed in service (notwithstanding that Capital Expenditures that are included in CapEx Budgets pursuant to Article X are for such purposes measured based on the date the related Capital Expenditures are incurred). (iii) Notwithstanding anything to the contrary contained in this Agreement, such supplement shall be determined solely to provide a Comparable Rate of Return on such Expected Incremental CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any difference between the initially anticipated and the actual return of or on, or the Rent payable with respect to, the Permian Assets as in place prior to the additions resulting from such Expected Incremental CapEx.

Rent Supplements. (a) The Parties have executed a Rent Supplement with respect to the Rent in effect as of the Effective Date (the “Effective Date Date. This Section 3.2(a) will not require any amendment to Rent Supplement”) with respect to the estimated Effective Date Rate Base and Expected Incremental CapEx during 2018. Prior to the beginning of each Lease Year (and, if applicable, at such other times during the Lease Year if unless the Parties expect Incremental CapEx and the Parties have not yet previously entered into a Rent Supplement with respect to such Expected Incremental CapEx), . If the Parties expect Incremental CapEx, then they will negotiate in good faith to supplement, in the form of Schedule 3.2, supplement Rent and other matters in accordance with this Section 3.2 (each3.2. In connection therewith, a “Rent Supplement”) to reflect the amount Parties will negotiate the pre-tax rate of return that Lessor should earn on such Incremental CapEx, if anywhich will be based generally on an agreed-to-discount from the rate of return that public utility companies generally earn in the State of Texas at the time of such Rent Supplement negotiation, that adjusted in the manner agreed to by the Parties expect (if justified) to be placed in service during take into account the creditworthiness of Lessee at the time of such Lease Year Rent Supplement negotiation (the “Expected Incremental CapExAgreed-to-Discount”). Such discount will be based on the comparable discount agreed to in connection with the negotiation of rent pursuant to the McAllen Lease and other leases between Lessee and SDTS (or an affiliate thereof), as modified to take into account appropriate factors at the time of such Rent Supplement negotiation. Such pre-tax rate of return, as determined in accordance with this paragraph, is referred to as a “Comparable Rate of Return.” The following will apply to the determination of the matters set forth on the Rent Supplement: (i) The Parties will supplement Base Rent and Percentage Rent in a manner intended to provide a Comparable Rate of Return for Lessor on the Expected its Incremental CapEx. Such Comparable Rate of Return may will be achieved by a split between Base Rent and Percentage Rent, in such case Rent in the proportions requested by Lessor and agreed to by Lessee.. CREZ ASSETS LEASE AGREEMENT (ii) Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital Expenditures will qualify as Incremental CapEx on the date the assets developed with such Capital Expenditures are placed in service (notwithstanding that service, which differentiates these Capital Expenditures that are from the Capital Expenditures included in CapEx Budgets pursuant to Article X X, which are for such purposes measured under this Agreement based on the date the related Capital Expenditures are incurred). (iii) Notwithstanding anything herein to the contrary contained in this Agreementcontrary, such supplement shall be determined solely to provide a Comparable Rate of Return on such Expected Incremental CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any difference between the initially anticipated and the actual return of or on, or the Base Rent or Percentage Rent payable with respect to, the Permian CREZ Assets as in place prior to the additions resulting from such Expected Incremental CapEx. (iv) Notwithstanding the foregoing, the aggregate Base Rent provided for in the Rent Supplements for the Transmission Lines and the Collection Stations shall not be less than the amount necessary for the Lessor to demonstrate a Debt Service Coverage Ratio of not less than 1.25x for each calendar quarter falling during the terms of such Rent Supplements. (b) The Parties will memorialize the results of any Incremental CapEx supplements and Lessee CapEx supplement negotiations by executing and delivering a Rent Supplement, which will set forth the amount of contemplated Incremental CapEx, new Base Rent, a new Percentage Rent Schedule, new Revenues Attributable to Lessee CapEx, Lessee CapEx, new TCOS Allocation (if applicable), the effective date on which such changes will occur and the term of such Rent Supplement (if applicable). In no event will any new Base Rent or new Percentage Rent be payable, or any Revenues Attributable to Lessee CapEx be taken into account as a reduction to Unadjusted Gross Revenues, before the assets funded by the related Incremental CapEx or Lessee CapEx are placed in service. The Rent Supplement may also include the projected in-service date of the Incremental CapEx or Lessee CapEx to which the Rent Supplement applies. Upon execution and delivery of any such Rent Supplement, this Agreement will be deemed amended thereby. If necessary, Exhibit A will be supplemented to reflect new assets funded by Incremental CapEx. The Rent Supplement shall have the term set forth therein, not to extend past the then-current Term of this Agreement. At the end of the term of each Rent Supplement, the Parties shall negotiate a new Rent Supplement for the Lessee CapEx and Incremental CapEx covered by such prior Rent Supplement using the Comparable Rate of Return methodology set forth in Sections 3.1(d)(iii) and 3.2(a). Notwithstanding the foregoing, the Percentage Rent Percentages and Annual Percentage Rent Breakpoints reflected on such new Rent Supplement with respect to the Rate Base covered by such prior Rent Supplement shall be as set forth on the Percentage Rent Schedule of such prior Rent Supplement. (c) If following a Rent Supplement there is a difference in (i) the amount of actual Incremental CapEx compared to the amount contemplated by the then-effective Rent Supplement, (ii) the amount of actual Lessee CapEx compared to the amount contemplated by the then-effective Rent Supplement, or (iii) the placed-in-service date of such Incremental CapEx or Lessee CapEx compared to what was contemplated at the time of the then-effective Rent Supplement, then, at any time within two years of the date the Parties agree to a Rent Supplement, either Party may request a Rent Validation. If there has been such a difference, the CREZ ASSETS LEASE AGREEMENT Parties will supplement Incremental CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, Revenues Attributable to Lessee CapEx and/or Lessee CapEx, as applicable, to what they would have been, at the time of the Rent Supplement, to reflect (1) the amount of actual Incremental CapEx and Lessee CapEx and/or (2) the actual dates such Incremental CapEx and/or Lessee CapEx was placed in service, but keeping fixed all other relevant assumptions and inputs, including the Comparable Rate of Return. For the avoidance of doubt, in no circumstance will a Rent Validation occur to account for any difference between the initially anticipated and the actual return of or on the Incremental CapEx and/or Lessee CapEx, and no such difference will be taken into account as part of such Rent Validation. The Parties also will negotiate in good faith to determine (A) whether one Party should make a lump sum payment to the other Party as a result of excess or deficient Rent Lessee paid, prior to the date of the effective date of the Rent Validation, in connection with the Rent Supplement, and, (B) if applicable, the amount of any such lump sum payment. The Parties will memorialize the result of any Rent Validation negotiation by executing and delivering a revised Rent Supplement, which will set forth revised expected Incremental CapEx, Lessee CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints and/or Revenues Attributable to Lessee CapEx, as applicable, the effective date on which such changes will occur and, if applicable, the amount of the lump sum payment that one Party must make to the other Party (which payment must be made within 30 days of the execution and delivery of such revised Rent Supplement). Any lump sum payments received by Lessor under this Section 3.2(c) shall be treated as Rent by the Parties. Upon execution and delivery of any such Rent Validation, this Agreement will be deemed amended thereby. The Parties will reasonably cooperate to minimize the number of Rent Validations, and prospective Rent Supplements and Rent Validations may be combined into one revised, amended and restated Rent Supplement. (d) In connection with the foregoing provisions of this Section 3.2, Lessor and Lessee shall use good faith efforts to agree to a Rent Supplement, renewal of a Rent Supplement or Rent Validation, as applicable, within 60 days of a request therefor by either Party. If, by the end of such 60 day period, Lessee and Lessor cannot in good faith agree to the terms of a Rent Supplement, renewal of a Rent Supplement or Rent Validation, such dispute shall be submitted to arbitration in accordance with Section 13.7 of this Agreement, pursuant to which the Arbitration Panel shall be empowered to determine the terms of such Rent Supplement, renewal of a Rent Supplement or Rent Validation (including any lump sum payment amount), based on submissions by each of the Lessee and the Lessor.

Rent Supplements. (a) The Parties have executed a Rent Supplement with respect to the Rent in effect as of the Effective Date (the “Effective Date Date. This Section 3.2(a) will not require any amendment to Rent Supplement”) with respect to the estimated Effective Date Rate Base and Expected Incremental CapEx during 2018. Prior to the beginning of each Lease Year (and, if applicable, at such other times during the Lease Year if unless the Parties expect Incremental CapEx and the Parties have not yet previously entered into a Rent Supplement with respect to such Expected Incremental CapEx), . If the Parties expect Incremental CapEx, then they will negotiate in good faith to supplement, in the form of Schedule 3.2, supplement Rent and other matters in accordance with this Section 3.2 (each3.2. In connection therewith, a “Rent Supplement”) to reflect the amount Parties will negotiate the pre-tax rate of return that Lessor should earn on such Incremental CapEx, if anywhich will be based generally on an agreed-to-discount from the rate of return that public utility companies generally earn in the State of Texas at the time of such Rent Supplement negotiation, that adjusted in the manner agreed to by the Parties expect (if justified) to be placed in service during take into account the creditworthiness of Lessee at the time of such Lease Year Rent Supplement negotiation (the “Expected Incremental CapExAgreed-to-Discount”). Such discount will be based on the comparable discount agreed to in connection with the negotiation of rent pursuant to the McAllen Lease and other leases between Lessee and Lessor (or an affiliate thereof), as modified to take in to account appropriate factors at the time of such Rent Supplement negotiation. Such pre-tax rate of return, as determined in accordance with this paragraph, is referred to as a “Comparable Rate of Return.” The following will apply to the determination of the matters set forth on the Rent Supplement:: ERCOT TRANSMISSION ASSETS LEASE AGREEMENT (i) The Parties will supplement Base Rent and Percentage Rent in a manner intended to provide a Comparable Rate of Return for Lessor on the Expected its Incremental CapEx. Such Comparable Rate of Return may will be achieved by a split between Base Rent and Percentage Rent, in such case Rent in the proportions requested by Lessor and agreed to by Lessee. (ii) Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital Expenditures will qualify as Incremental CapEx on the date the assets developed with such Capital Expenditures are placed in service (notwithstanding that service, which differentiates these Capital Expenditures that are from the Capital Expenditures included in CapEx Budgets pursuant to Article X X, which are for such purposes measured under this Agreement based on the date the related Capital Expenditures are incurred). (iii) Notwithstanding anything herein to the contrary contained in this Agreementcontrary, such supplement shall be determined solely to provide a Comparable Rate of Return on such Expected Incremental CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any difference between the initially anticipated and the actual return of or on, or the Base Rent or Percentage Rent payable with respect to, the Permian ERCOT Transmission Assets as in place prior to the additions resulting from such Expected Incremental CapEx. (b) The Parties will memorialize the results of all Incremental CapEx supplements and Lessee CapEx supplement negotiations by executing and delivering a Rent Supplement, which will set forth the amount of contemplated Incremental CapEx, new Base Rent, a new Percentage Rent Schedule, new Revenues Attributable to Lessee CapEx, Lessee CapEx, new TCOS Allocation (if applicable), the effective date on which such changes will occur and the term of such Rent Supplement (if applicable). In no event will any new Base Rent or new Percentage Rent be payable, or any Revenues Attributable to Lessee CapEx be taken into account as a reduction to Unadjusted Gross Revenues, before the assets funded by the related Incremental CapEx or Lessee CapEx are placed in service. The Rent Supplement may also include the projected in-service date of the Incremental CapEx or Lessee CapEx to which the Rent Supplement applies. Upon execution and delivery of any such Rent Supplement, this Agreement will be deemed amended thereby. If necessary, the applicable Rent Supplement will include a description of the new assets to be funded by the Incremental CapEx. The Rent Supplement shall have the term set forth therein, not to extend past the then-current Term of this Agreement. At the end of the term of each Rent Supplement, the Parties shall negotiate a new Rent Supplement for the Lessee CapEx and Incremental CapEx covered by such prior Rent Supplement using the Comparable Rate of Return methodology set forth in Sections 3.1(d)(iii) and 3.2(a). Notwithstanding the foregoing, the Percentage Rent Percentages and Annual Percentage Rent Breakpoints reflected on such new Rent Supplement with respect to the Rate Base covered by such prior Rent Supplement shall be as set forth on the Percentage Rent Schedule of such prior Rent Supplement. (c) If following a Rent Supplement there is a difference in (i) the amount of actual Incremental CapEx compared to the amount contemplated by the then-effective Rent Supplement, (ii) the amount of actual Lessee CapEx compared to the amount contemplated by the then-effective Rent Supplement, or (iii) the placed-in-service date of such Incremental CapEx or Lessee CapEx compared to what was contemplated at the time of the then-effective Rent Supplement then, at any time within two years of the date the Parties agree to a Rent ERCOT TRANSMISSION ASSETS LEASE AGREEMENT Supplement, either Party may request a Rent Validation. If there has been such a difference, the Parties will supplement Incremental CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, Revenues Attributable to Lessee CapEx, and/or Lessee CapEx, as applicable, to what they would have been, at the time of the Rent Supplement, to reflect (1) the amount of actual Incremental CapEx and Lessee CapEx and/or (2) the actual dates such Incremental CapEx and/or Lessee CapEx was placed in service, but keeping fixed all other relevant assumptions and inputs, including the Comparable Rate of Return. For the avoidance of doubt, in no circumstance will a Rent Validation occur to account for any difference between the initially anticipated and the actual return of or on the Incremental CapEx and/or Lessee CapEx, and no such difference will be taken into account as part of such Rent Validation. The Parties also will negotiate in good faith to determine (A) whether one Party should make a lump sum payment to the other Party as a result of excess or deficient Rent Lessee paid, prior to the date of the effective date of the Rent Validation, in connection with the Rent Supplement, and, (B) if applicable, the amount of any such lump sum payment. The Parties will memorialize the result of any Rent Validation negotiation by executing and delivering a revised Rent Supplement, which will set forth revised expected Incremental CapEx, Lessee CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, and/or Revenues Attributable to Lessee CapEx, as applicable, the effective date on which such changes will occur and, if applicable, the amount of the lump sum payment that one Party must make to the other Party (which payment must be made within 30 days of the execution and delivery of such revised Rent Supplement). Any lump sum payments received by Lessor under this Section 3.2(c) shall be treated as Rent by the Parties. Upon execution and delivery of any such Rent Validation, this Agreement will be deemed amended thereby. The Parties will reasonably cooperate to minimize the number of Rent Validations, and prospective Rent Supplements and Rent Validations may be combined into one revised, amended and restated Rent Supplement. (d) In connection with the foregoing provisions of this Section 3.2, Lessor and Lessee shall use good faith efforts to agree to a Rent Supplement, renewal of a Rent Supplement or Rent Validation, as applicable, within 60 days of a request therefor by either Party. If, by the end of such 60 day period, Lessee and Lessor cannot in good faith agree to the terms of a Rent Supplement, renewal of a Rent Supplement or Rent Validation, such dispute shall be submitted to arbitration in accordance with Section 13.7 of this Agreement, pursuant to which the Arbitration Panel shall be empowered to determine the terms of such Rent Supplement, renewal of a Rent Supplement or Rent Validation (including any lump sum payment amount), based on submissions by each of the Lessee and the Lessor.

Rent Supplements. (a) The Parties have executed a Rent Supplement with respect to the Rent in effect as of the Effective Date (the “Effective Date Date. This Section 3.2(a) will not require any amendment to Rent Supplement”) with respect to the estimated Effective Date Rate Base and Expected Incremental CapEx during 2018. Prior to the beginning of each Lease Year (and, if applicable, at such other times during the Lease Year if unless the Parties expect Incremental CapEx and the Parties have not yet previously entered into a Rent Supplement with respect to such Incremental CapEx. If the Parties expect Incremental CapEx (“Expected Incremental CapEx”), the Parties then they will negotiate in good faith to supplement, in the form of Schedule 3.2, supplement Rent and other matters in accordance with this Section 3.2 (each3.2. In connection therewith, a “Rent Supplement”) to reflect the amount Parties will negotiate the pre-tax rate of return that Lessor should earn on such Incremental CapEx, if anywhich will be based generally on an agreed-to-discount from the rate of return that public utility companies generally earn in the State of Texas at the time of such Rent Supplement negotiation, that adjusted in the manner agreed to by the Parties expect (if justified) to be placed in service during take into account the creditworthiness of Lessee at the time of such Lease Year Rent Supplement negotiation (the “Expected Incremental CapExAgreed-to-Discount”). Such discount will be based on the comparable discount agreed to in connection with the negotiation of rent pursuant to the McAllen Lease and other leases between Lessee and Lessor (or an affiliate thereof), as modified to take into account appropriate factors at the time of such Rent Supplement negotiation. Such pre-tax rate of return, as determined in accordance with this paragraph, is referred to as a “Comparable Rate of Return.” The following will apply to the determination of the matters set forth on the Rent Supplement: (i) The Parties will supplement Base Rent and Percentage Rent in a manner intended to provide a Comparable Rate of Return for Lessor on the Expected Incremental CapEx. Such Comparable Rate of Return may will be achieved by a split between Base Rent and Percentage Rent, in such case Rent in the proportions requested by Lessor and agreed to by Lessee. (ii) Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital Expenditures will qualify as Incremental CapEx on the date the assets developed with subject to such Capital Expenditures are placed in service (notwithstanding that Capital Expenditures that are included in CapEx Budgets pursuant to Article X are for such purposes measured based on the date the related Capital Expenditures are incurred). (iii) Notwithstanding anything herein to the contrary contained in this Agreementcontrary, such supplement shall be determined solely to provide a Comparable Rate of Return on such Expected Incremental CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any difference between the initially anticipated and the actual return of or on, or the Base Rent or Percentage Rent payable with respect to, the Permian CREZ Assets as in place prior to the additions resulting from such Expected Incremental CapEx. (b) The Parties will memorialize the results of all Incremental CapEx supplements and Lessee CapEx supplement negotiations by executing and delivering a Rent Supplement, which will set forth the amount of contemplated Incremental CapEx, new Base Rent, a new Percentage Rent Schedule, new Revenues Attributable to Lessee CapEx, Lessee CapEx, new TCOS Allocation (if applicable), the effective date on which such changes will occur and the term of such Rent Supplement (if applicable). In no event will any new Base Rent or new Percentage Rent be payable, or any Revenues Attributable to Lessee CapEx be

Rent Supplements. (a) The Parties have executed a Rent Supplement with respect to the Rent in effect as of the Effective Date (the “Effective Date Renewal Rent Supplement”). This Section 3.2(a) with respect will not require any amendment to the estimated Effective Date Rate Base and Expected Incremental CapEx during 2018. Prior to the beginning of each Lease Year (and, if applicable, at such other times during the Lease Year if Rent unless the Parties expect Incremental CapEx and the Parties have not yet previously entered into a Rent Supplement with respect to such Incremental CapEx. If the Parties expect Incremental CapEx (“Expected Incremental CapEx”), then the Parties will negotiate in good faith to supplement, in the form of Schedule 3.2, supplement Rent and other matters in accordance with this Section 3.2 (each3.2. In connection therewith, a “Rent Supplement”) to reflect the amount Parties will negotiate the pre-tax rate of return that Lessor should earn on such Incremental CapEx, if anywhich will be based generally on an agreed-to discount from the rate of return that public utility companies generally earn in the State of Texas at the time of such Rent Supplement negotiation, that adjusted in the manner agreed to by the Parties expect (if justified) to be placed in service during take into account the creditworthiness of Lessee at the time of such Lease Year Rent Supplement negotiation (the “Expected Incremental CapExAgreed-to-Discount”). Such discount will be based on the comparable discount agreed to in connection with the negotiation of rent pursuant to the McAllen Lease and other leases between Lessee and Lessor (or an affiliate thereof), as modified to take into account appropriate factors at the time of such Rent Supplement negotiation. Such pre-tax rate of return, as determined in accordance with this paragraph, is referred to as a “Comparable Rate of Return.” The following will apply to the determination of the matters set forth on the Rent Supplement: (i) The Parties will supplement Base Rent and Percentage Rent in a manner intended to provide a Comparable Rate of Return for Lessor on the Expected Incremental CapEx. Such Comparable Rate of Return may will be achieved by a split between Base Rent and Percentage Rent, in such case Rent in the proportions requested by Lessor and agreed to by Lessee. (ii) Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital Expenditures will qualify as Incremental CapEx on the date the assets developed with subject to such Capital Expenditures are placed in service (notwithstanding that Capital Expenditures that are included in CapEx Budgets pursuant to Article X are for such purposes measured based on the date the related Capital Expenditures are incurred). (iii) Notwithstanding anything herein to the contrary contained in this Agreementcontrary, such supplement shall be determined solely to provide a Comparable Rate of Return on such Expected Incremental CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any difference between the initially anticipated and the actual return of or on, or the Base Rent or Percentage Rent payable with respect to, the Permian Xxxxxxx/Xxxxx/Xxxxxxx Assets as in place prior to the additions resulting from such Expected Incremental CapEx. XXXXXXX/XXXXX/XXXXXXX ASSETS LEASE AGREEMENT (b) The Parties will memorialize the results of all Incremental CapEx supplements and Lessee CapEx supplement negotiations by executing and delivering a Rent Supplement, which will set forth the amount of contemplated Incremental CapEx, new Base Rent, a new Percentage Rent Schedule, new Revenues Attributable to Lessee CapEx, Lessee CapEx, new TCOS Allocation (if applicable), the effective date on which such changes will occur and the term of such Rent Supplement (if applicable). In no event will any new Base Rent or new Percentage Rent be payable, or any Revenues Attributable to Lessee CapEx be taken into account as a reduction to Unadjusted Gross Revenues, before the assets funded by the related Incremental CapEx or Lessee CapEx are placed in service. The Rent Supplement may also include the projected in-service date of the Incremental CapEx or Lessee CapEx to which the Rent Supplement applies. Upon execution and delivery of any such Rent Supplement, this Agreement will be deemed amended thereby. If necessary, Exhibit A will be supplemented to reflect new assets funded by Incremental CapEx. The Rent Supplement shall have the term set forth therein, not to extend past the then-current Term of this Agreement. At the end of the term of each Rent Supplement, the Parties shall negotiate a new Rent Supplement for the Lessee CapEx and Incremental CapEx covered by such prior Rent Supplement using the Comparable Rate of Return methodology set forth in Sections 3.1(d)(iii) and 3.2(a). Notwithstanding the foregoing, the Percentage Rent Percentages and Annual Percentage Rent Breakpoints reflected on such new Rent Supplement with respect to the Rate Base covered by such prior Rent Supplement shall be as set forth on the Percentage Rent Schedule of such prior Rent Supplement. (c) This Section 3.2(c) sets forth the process by which the Parties may request and effect Rent Validations. (i) If following the execution and delivery of a Rent Supplement there is a difference in (A) the amount of actual Incremental CapEx compared to the amount contemplated by the then-effective Rent Supplement, (B) the amount of actual Lessee CapEx compared to the amount contemplated by the then-effective Rent Supplement, or (C) the placed-in-service date of such Incremental CapEx or Lessee CapEx compared to what was contemplated at the time of the then-effective Rent Supplement, then, at any time within two years of the date the Parties agree to a Rent Supplement, either Party may request a Rent Validation. If there has been such a difference, the Parties will supplement Incremental CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, Revenues Attributable to Lessee CapEx and/or Lessee CapEx, as applicable, to what they would have been, at the time of the Rent Supplement, to reflect (1) the amount of actual Incremental CapEx and Lessee CapEx and/or (2) the actual dates such Incremental CapEx and/or Lessee CapEx was placed in service, but keeping fixed all other relevant assumptions and inputs, including the Comparable Rate of Return. For the avoidance of doubt, in no circumstance will a Rent Validation occur to account for any difference between the initially anticipated and the actual return of or on the Incremental CapEx and/or Lessee CapEx, and no such difference will be taken into account as part of such Rent Validation. The Parties also will negotiate in good faith to determine (x) whether one Party should make a lump sum payment to the other Party as a result of excess or deficient Rent that Lessee paid, prior to the date of the effective date of XXXXXXX/XXXXX/XXXXXXX ASSETS LEASE AGREEMENT the Rent Validation, in connection with the Rent Supplement, and, (y) if applicable, the amount of any such lump sum payment. The Parties will memorialize the result of any Rent Validation negotiation by executing and delivering a revised Rent Supplement, which will set forth revised expected Incremental CapEx, Lessee CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints and/or Revenues Attributable to Lessee CapEx, as applicable, the effective date on which such changes will occur and, if applicable, the amount of the lump sum payment that one Party must make to the other Party (which payment must be made within 30 days of the execution and delivery of such revised Rent Supplement). Any lump sum payments received by Lessor under this Section 3.2(c)(i) shall be treated as Rent by the Parties. Upon execution and delivery of any such Rent Validation, this Agreement will be deemed amended thereby. For the avoidance of doubt, notwithstanding expiration of the Existing Term on December 31, 2017, upon request of either Party made at any time before March 1, 2018, the Parties will conduct a Rent Validation pursuant to this Section 3.2(c)(i) in order to determine (I) whether one Party should make a lump sum payment to the other Party as a result of excess or deficient Rent Lessee paid, prior to the date of the effective date of such Rent Validation, in connection with the Rent Supplement, given any negotiated supplement, and, (II) if applicable, the amount of any such lump sum payment. The provisions of this Section 3.2(c)(i) will apply to any such lump sum payment. (ii) The Renewal Rent Supplement was negotiated and agreed to in the fourth quarter of 2015 based on, among other things, estimates of the Rate Base amount related to the Xxxxxxx/Xxxxx/Xxxxxxx Lease Assets and any Lessee CapEx as of December 31, 2015. If either Party determines there is a difference in the amount of actual Rate Base of the Xxxxxxx/Xxxxx/Xxxxxxx Lease Assets and any related Lessee CapEx as of December 31, 2015, compared to the amount contemplated in connection with the negotiation of the Renewal Rent Supplement, then, on or before March 1, 2016, either Party may request a Rent Validation. If there has been such a difference, the Parties will supplement Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, Revenues Attributable to Lessee CapEx and/or Lessee CapEx, as applicable, to what they would have been, at the time of the Rent Supplement, to reflect the amount of actual Rate Base, but keeping fixed all other relevant assumptions and inputs, including the Comparable Rate of Return. For the avoidance of doubt, in no circumstance will a Rent Validation occur to account for any difference between the initially anticipated and the actual return of or on Rate Base and/or Lessee CapEx, and no such difference will be taken into account as part of such Rent Validation. The Parties also will negotiate in good faith to determine (A) whether one Party should make a lump sum payment to the other Party as a result of excess or deficient Rent Lessee paid, prior to the date of the effective date of the Rent Validation, in connection with the Rent Supplement, and, (B) if applicable, the amount of any such lump sum payment. The Parties will memorialize the result of any Rent Validation negotiation by executing and delivering a revised Rent Supplement, which will set forth revised expected Lessee CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints and/or Revenues Attributable to Lessee CapEx, as applicable, the effective date on which such changes will occur and, if applicable, the amount of the lump sum payment that one Party must make to the other XXXXXXX/XXXXX/XXXXXXX ASSETS LEASE AGREEMENT Party (which payment must be made within 30 days of the execution and delivery of such revised Rent Supplement). Any lump sum payments received by Lessor under this Section 3.2(c)(ii) shall be treated as Rent by the Parties. Upon execution and delivery of any such revised Rent Supplement, this Agreement will be deemed amended thereby. (iii) The Parties will reasonably cooperate to minimize the number of Rent Validations, and prospective Rent Supplements and Rent Validations (including Rent Validations pursuant to clause (i) and clause (ii) above) may be combined into one revised, amended and restated Rent Supplement. (d) In connection with the foregoing provisions of this Section 3.2, Lessor and Lessee shall use good faith efforts to agree to a Rent Supplement, renewal of a Rent Supplement or Rent Validation, as applicable, within 60 days of a request therefor by either Party. If, by the end of such 60 day period, Lessee and Lessor cannot in good faith agree to the terms of a Rent Supplement, renewal of a Rent Supplement or Rent Validation, such dispute shall be submitted to arbitration in accordance with Section 13.7, pursuant to which the Arbitration Panel shall be empowered to determine the terms of such Rent Supplement, renewal of a Rent Supplement or Rent Validation (including any lump sum payment amount), based on submissions by each of the Lessee and the Lessor.