EXHIBIT 10.43
ADVICE
TO: Distribution FROM: X.X. Xxxxxx
HMB 3432
SUBJECT: ARCO/Vastar Agreement - Sale of Vastar Building DATE: September 15, 1999
effective September 15, 1999 CROSS REF: Lease Agreement
Lease by and between Lexington Memorial dated January 1, 1994, and
L.L.C., as Landlord, and Property Management
Vastar Resources, Inc., as Tenant Services Agreement dated
effective January 1, 1994
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ARCO/Vastar Agreement - Sale of Vastar Building
1. Upon closing of the sale of the HMB Building, between ARCO and Lexington
Memorial L. L. C. (Lexington), ARCO and Vastar shall execute an agreement
terminating the Lease Agreement dated January 1, 1994, as amended (Existing
Lease) covering the premises and building located at 00000 Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxx 00000 and the Property Management Services Agreement
(Management Agreement) dated effective January 1, 1994.
2. Upon closing as stated above, Vastar will execute a new lease agreement
with Lexington for a term of 10 years, attached as Exhibit "A". This lease
is also adviced hereinbelow.
3. Vastar will also execute an estoppel certificate, attached as Exhibit "B".
4. All amounts owed between Vastar and ARCO under existing agreements shall be
prorated as of their termination dates.
5. At closing, ARCO shall pay Vastar $500,000 as consideration for terminating
the lease and entering into a new lease agreement and $150,000 as
consideration for terminating the Management Agreement.
6. At closing, ARCO shall pay to Vastar the PV, calculated a 6.25% (Vastar's
cost of debt) the difference between Vastar's current annual net rent of
$1,748,862.50 ($6.25/sq. ft. on 279,818 square feet) and the net rent
payable under the new lease from the commencement date through December 31,
2003, prorated for partial months. That amount will be reduced by the PV of
the amounts Vastar owed ARCO under the audit settlement, security system,
and fire, life, safety system.
7. Vastar shall pay ARCO $230,000 for a reduction in purchase value due to
Lexington purchasing insurance on the behalf of Vastar, as tenant.
8. The new lease will cover the entire building equating to 327,325 net
rentable square feet. ARCO will also pay Vastar for the difference between
$6.25 per square feet and the net rent payable under the New Lease on
47,507 square feet with is Cabot's Leased Premises from the commencement
date of the new lease through December, 31, 2003, prorated for partial
months. At closing, ARCO shall pay Vastar $475,000 for improvement
allowance for the Cabot space.
9. During the fourth quarter of 2003, ARCO and Vastar will attempt in good
faith to agree on the then current fair market rent on a gross rent basis
for the building. If 95% of market rent is below the rent specified in the
new lease for the remainder of the initial ten year term, ARCO shall pay
Vastar the PV of the difference calculated at Vastar's then cost of debt.
If 95% of the market rent is above, Vastar shall pay ARCO as in the same
manner. There is an arbitration mechanism in place should ARCO and Vastar
not agree on the fair market rent for the building.
10. At closing, ARCO shall pay Vastar $250,000 to use such funds to expand the
parking lot located at the southern end of the premises.
11. ARCO indemnifies Vastar, its agents and employees harmless from any and all
liabilities of any kind or nature, including reasonable attorneys' fees in
connection with Environmental Activities, any Hazardous Materials Claims,
or any violation of ARCO of a Hazardous Materials Law with respect to the
building which arose or occur prior to Closing and were not caused by
Vastar and Environmental Activities in violation of any Hazardous Material
Laws during the Initial Term which occur offsite and migrate to the
building which is caused by a party other than Vastar or the landlord.
LEASE
Landlord: Lexington Memorial L. L. C.
a Delaware limited liability company
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tenant: Vastar Resources, Inc.
Commencement Date: September 16, 1999
Termination Date: September 14, 2009 (10 year term - Initial Term)
Premises: Office building and land and all improvements
located at 00000 Xxxxxxxx Xxxxx, Xxxxxxx, XX
00000
Renewal Terms: 4 separate renewal terms of 5 years each - notice
not less than 12 months prior to end of the then
current Term
Initial Term Rent: Lease years 1-3 - $3,273,250 annually - $272,771
monthly
Lease years 4-7 - $3,436,913 annually - $286,409
monthly
Lease years 8-10 - $3,600,575 annually - $300,048
monthly
Renewal Term Rent: 100% of Market Rent - fair market rent value
Net Lease: The Rent is free of taxes, assessments, utility
charges, operating expenses, refurbishings,
insurance premiums. Landlord is responsible for
capital expenditures for both Structural Elements
and Mechanical Elements
Tenant's Obligations: Tenant agrees to pay any and all taxes (including
but not limited to real property and personal
property taxes, franchise taxes, business and
occupational license taxes, ad valorem sales,
use, single business, gross receipts, transaction
privileges, rent or other excise taxes) and other
assessments levied or assessed against the
Premises.
Alterations by Tenant: Tenant shall have the right of altering, improving,
replacing, repairing or modifying the facilities;
provided however, that any alterations, improvements,
replacements, repairs or modifications to Structural
Elements or to the Premises' mechanical,
electrical/power, fire protection/life safety,
plumbing, sprinkler and HVAC systems and any other
alterations, improvements, replacements, repairs or
modifications in excess of $200,000 shall require the
prior written approval of the Landlord. Tenant shall
have the duty to provide Landlord with "as built" blue
prints and specifications for all alternation and
improvements to the Premises made by Tenant. Tenant
has the right to expand the parking lot at the southern
end of the Premises and to construct a building of up
to approximately 27,000 square feet to be used by
Tenant primarily for storage including file room and
file storage.
Capital Improvements
Funded by Landlord: Structural Elements shall mean the foundation,
floor/ceiling slabs, roof, exterior walls, glass and
mullions, columns and beams. Mechanical Elements shall
mean the HVAC system, electrical system, mechanical
system, plumbing and sprinkler system, fire
protection/life safety systems and elevator system.
The roof shall be considered a Structural Element
during the Initial Term and a Mechanical Element during
any Renewal Term. (Tenant would have to pay the
amortized portion of the actual cost plus interest of
the improvement over its useful life during the Term of
the Lease.)
Landlord Insurance: Landlord is responsible for carrying insurance for the
benefit of Landlord, Tenant, and mortgagee which
includes broad form commercial general liability on a
pre-occurrence basis with an aggregate limit of not
less than $10MM and a pre-occurrence limit of not less
than $5MM or such greater limits as may be reasonably
required from time to time; property insurance;
business interruption insurance; boiler insurance;
sprinkler leakage insurance; such other insurance as is
customarily obtained by owner of similar properties.
Tenant's Insurance: Tenant shall provide workers' compensation insurance
(including employers' liability insurance) covering all
persons employed at the Premises by Tenant. Tenant
shall obtain from all contractors builder's risk
completed coverage for 100% of contract price on a non-
reporting form, deleting all co-insurance provisions
against all types of risks with the addition of damage
due to faulty materials, workmanship and errors in
design and including permission to occupy the Premises
and owner's contingent or protective liability
insurance covering claims not covered by or under the
terms of the above-mentioned comprehensive general
liability insurance policy.
Assignment and Subletting: Tenant, may without Landlord's consent, but
upon 30 days prior written notice by Tenant to
Landlord, assign this Lease or sublet the
Premises or any portion thereof.
Holding Over: Tenant shall have the right, without
Landlord's consent, after written notice
delivered to Landlord at least 60 days prior
to the end of the Initial Term to retain
possession of the Premises or any part thereof
after the termination of the Term for a period
not to exceed 3 months on the same terms and
conditions under the Lease including the Rent
then in effect. If at the end of the 3 month
period, Tenant remains in possession of the
Premises without Landlord's express written
consent, Tenant shall pay Landlord 150% of the
3 month grace period as set forth in the
Section and Landlord shall have all other
remedies against Tenant available to Landlord
at law and in equity, including but not
limited to consequential damages.
Roof Top Rights: Tenant may install satellite dishes, antennas,
receivers, transmitters or other
telecommunication and all related cabling and
wiring without Landlord's consent.
Parking: Tenant is hereby granted unlimited parking
rights and privileges in the parking structure
and lots on the Premises at no charge.
Notices and Demands: All in writing and shall be deemed properly
given by facsimile with confirmation or upon
actual receipt by nationally recognized
overnight delivery service provided for
receipted delivery or within 2 business days
being placed in the U.S. certified or
registered mail, return receipt requested,
postage paid
Consent, Permission or Approval: Shall be in writing and shall not be
unreasonably withheld or delayed. If refused,
must give the basis and adequate reasons for
such refusal.
Arbitration: All disputes related to this Agreement will
subject to the arbitration provision under
Exhibit "B".
Exhibit "A"
Description of the Premises
Exhibit "B"
Arbitration Program
Exhibit "C"
Prevailing Market
Exhibit "D"
Permitted Exceptions
Exhibit "E"
Expansion Areas
