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COMMERCIAL LEASE

Lease Agreement

COMMERCIAL LEASE | Document Parties: HouseValues, Inc. | CHINOOK BUSINESS PARK, L.L.C., You are currently viewing:
This Lease Agreement involves

HouseValues, Inc. | CHINOOK BUSINESS PARK, L.L.C.,

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Title: COMMERCIAL LEASE
Governing Law: Washington     Date: 10/25/2005

COMMERCIAL LEASE, Parties: housevalues  inc. , chinook business park  l.l.c.
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Exhibit 10.1

 

Commercial Lease

 

 

 

 

 

 

DATE:

  

 

  

October 24, 2005

 

 

 

PARTIES:

  

LANDLORD:

  

CHINOOK BUSINESS PARK, L.L.C.,

 

  

 

  

A Washington limited liability company

 

  

 

  

1901 North Fourth Street

 

  

 

  

Yakima, Washington 98901

 

 

 

 

  

TENANT:

  

HOUSEVALUES, INC.,

 

  

 

  

A Washington corporation

 

  

 

  

11332 N.E. 122 nd Way

 

  

 

  

Kirkland, Washington 98034

 

LEASED PREMISES . The Leased Premises is located at 1700 North 6 th Street, Yakima, Washington, on the Property legally described on Exhibit A attached hereto. The Lease is subject to all easements, restrictions, agreements of record, mortgages and deeds of trust, and zoning and building laws; provided, notwithstanding anything to the contrary in this Lease, Landlord represents that (i) the Leased Premises may be used by Tenant for the purposes authorized in this Lease; (ii) Landlord will deliver the Leased Premises in a broom clean condition, with all of Landlord’s personal property being stored in the Building and all debris removed, and the Leased Premises and Building otherwise ready for Tenant’s improvement work; (iii) the Building structure, foundation and roof and all Building systems are and shall be throughout the Initial Term and any extensions thereof in good working condition; and (iv) Landlord shall be responsible for all capital replacements and repairs to the structure, foundation and roof, as set forth in paragraph 6 below. The Leased Premises shall consist of (a) approximately 2.56 acres of the Real Property described on Exhibit A, together with all rights and appurtenances thereto, and (b) an office/warehouse building (“the Building”) containing an agreed upon thirty-six thousand one hundred thirty-four (36,134) square feet of rentable area, and (c) related primary and supplemental parking facilities shown on the Site Plan attached as Exhibit B, and rights attendant thereto as further defined and outlined in this Lease. A portion of the Building comprising approximately twelve thousand nine hundred eight-one (12,981) square feet, is designated on Exhibit B and shall be referred to herein as the “Reserved Area.” Tenant shall be entitled to use the Reserved Area for any and all Permitted Uses and to stage and install in the Reserved Area Tenant Improvements, together with Tenant’s furniture, fixtures and equipment; provided, however, if prior to the first anniversary of the Commencement Date (the “First Anniversary”) any of Tenant’s employees actually use any portion of the Reserved Area to conduct business operations thereon then, until the First Anniversary, the monthly Base Rent shall be increased by $0.38 per month for each rentable square foot of the Reserved Area so used by Tenant during such use. Use of the Reserved Area for storage shall not be considered a business activity triggering a Base Rent obligation. After the first anniversary of the Commencement Date, Tenant shall be entitled to use the Reserved Area for any Permitted Use by paying Base Rent in accordance with paragraph 2.1 below.

 

TENANT IMPROVEMENTS . Except as otherwise expressly set forth in this Lease, Tenant shall be responsible, at its sole cost and expense, for any and all alterations or improvements to the Leased Premises installed by Tenant that are necessary to accommodate the Tenant’s business authorized in this Lease. Any and all alterations or improvements to the Leased Premises made by Tenant shall be in strict accordance with the provisions of paragraph 6 of this Lease, whether made before or after the Lease Commencement Date. Except for parking facilities to be completed by Landlord in accordance with paragraph 11.7 below of this Lease or alterations or improvements necessary to satisfy Landlord’s obligations under this Lease, Tenant, by taking occupancy of the Leased Premises, accepts the Leased Premises in their then condition, excluding any material latent defects known to Landlord and not disclosed to Tenant, “AS IS” . Tenant agrees that any equipment or building fixture items that will have some material salvage value after they have been removed by Tenant’s contractor as part of Tenant’s Work will remain the property of Landlord and may be used or sold by Landlord as long as Landlord promptly removes such items from the Leased Premises. If Landlord does


not remove such items from the Leased Premises promptly or fails to identify a salvageable item prior to its removal by Tenant’s contractor, Tenant shall be entitled to sell or otherwise dispose of such items as Tenant may determine. Landlord and Tenant agree to work cooperatively with each other and with Tenant’s contractor to identify, in advance of any actual Tenant Work if possible any equipment of fixtures that might have material salvage value to Landlord. Tenant shall have no obligation to store, maintain, preserve or account for any such equipment of fixture items.

 

AGREEMENT : LANDLORD HEREBY LEASES TO TENANT AND TENANT DOES HEREBY AGREE TO LEASE FROM LANDLORD THE ABOVE-DESCRIBED LEASED PREMISES UPON THE FOLLOWING TERMS AND CONDITIONS:

 

1. TERM .

 

1.1 Initial Term . The Lease term shall for a period of five (5) years , commencing on the later of: (i) October 22, 2005 or (ii) the date on which this Lease is signed and delivered by Landlord and Tenant (the “Commencement Date”) and shall terminate on the day prior to the fifth anniversary of the Commencement Date, at 5:00 p.m. (PST). If Tenant occupies the Premises prior to the Commencement Date, Tenant’s occupancy of the Premises shall be subject to all of the provisions of this Lease. Early occupancy of the Premises shall not advance the expiration date of this Lease. Notwithstanding the foregoing, if by the Commencement Date Landlord does not deliver exclusive possession of the Leased Premises to Tenant as represented, then the Commencement Date shall be delayed until it is so delivered; provided, however, if Landlord fails to deliver exclusive possession of the Leased Premises to Tenant as represented by December 14, 2005, then Tenant shall have the right to terminate this Lease, unless the reason for Landlord’s failure is solely attributable to a Tenant breach of this Lease.

 

1.2 Option Term . Unless Tenant is then in material default under this Lease, Tenant shall have the option to extend the Initial Term of this Lease for one (1) additional five (5)-year period on the same terms and conditions as set forth in this Lease except as to rent, by giving Landlord written notice of exercise of this option at least six (6) months before the end of the Initial Term. Rent for the Option Term shall be ninety-five percent (95%)  of the then Fair Market Rental (as defined below) of the Leased Premises to be mutually agreed to not less that ninety (90) days prior to the commencement date of the Option Term. Fair Market Rental shall mean then-current market rents for similarly-situated, similar quality buildings in the Yakima, WA area taking into consideration, without limitation, leasing concessions, landlord allowances and transaction costs then being offered to tenants for new lease transactions. If the parties are unable to agree on the Fair Market Value, then the parties will submit the determination of Fair Market Rental to binding and final appraisal in accordance with the appraisal procedures set forth in this paragraph. If the parties are unable to reach an agreement on the Fair Market Rental within thirty (30) days after Tenant gives Landlord written notice of its exercise of its option to extend, the parties shall negotiate in good faith and select one (1) , qualified independent appraiser licensed in the state of Washington and familiar with the sale and rental of commercial real property in the area, which includes the Leased Premises. The parties shall each pay one-half (  1 / 2 ) of the cost of such an appraisal. The Fair Market Rental determined by the appraiser (consistent with the limitations set forth in this paragraph) shall be used as the basis for the rent for the Option Term, unless Landlord or Tenant gives the other party written notice within fifteen (15) days from its receipt that the appraisal is not acceptable. The party objecting to the appraisal shall then obtain a second independent appraisal at such party’s sole cost and expense within thirty (30) days of such rejection. In such an event, the Fair Market Rental of the Leased Premises shall be the average of the initial appraisal and the second appraisal obtained by the party objecting to the initial appraisal. The appraisal process set forth above must completed no later than thirty (30) days prior to the expiration of the Initial Lease Term.

 

1.3 Early Termination Right . Notwithstanding the Initial Term set forth in paragraph 1.1 above, and provided Tenant is not in material default under this Lease Tenant shall have the right to terminate this Lease at any time after the third anniversary of the Lease Commencement Date). Tenant may exercise its limited right to terminate this Lease by providing Landlord written notice within six (6) months prior to the effective date of termination (which shall be no less than six (6) months after the date of notice of termination). If Tenant exercises its termination right, Landlord shall have the right to install “For Lease” signs three (3) months prior to the anticipated termination date and may show the Leased Premises to prospective tenants consistent with the terms and conditions of this Lease, by providing Tenant with reasonable advance


notice of such showings and provided such access does not cause any material disruption to Tenant. Tenant shall continue to be liable for all Rent and Additional Rent up to and including the effective date of termination. As additional consideration to the Landlord for the lease termination rights set forth in this paragraph, in the event Tenant exercises its early termination right, Tenant shall pay to Landlord a lease termination fee equal to the unamortized balance of the commission paid to Tenant’s broker (amortized over the Initial Five (5)-Year Term). The early termination fee shall be paid one-half (  1 / 2 ) with Tenant’s initial notice of termination and the remaining one-half (  1 / 2 ) on the effective date of the termination set forth in the notice. Attached hereto as Exhibit C is an amortization schedule reflecting the early termination fee for each month of the Lease Term.

 

2. RENT .

 

2.1 Base Rent . Tenant shall pay Landlord monthly rent for the Initial Term of this Lease as set forth below, payable in advance in equal monthly installments on or before the first day of each calendar month during the term of this Lease.

 

 

 

 

 

Lease Months


 

  

Total


 

Months 1-3*

  

$

0.00

Months 4-12**

  

$

13,627.30 /month

Months 13-60

  

$

18,560.80/ month

 

*Note : During months 1-3, Tenant shall pay its share of operating expenses (utilities, taxes, insurance premiums, etc.) monthly, in advance in accordance with the terms and provisions of this Lease. Tenant shall be entitled to the equivalent of no Base Rent for three (3) full months. Therefore, if the Commencement Date is not the first day of a calendar month, the Base Rent for the 4 th month of the Term will be appropriately pro rated.

 

**Note : Subject to adjustment during said months in the event business activities are conducted in the Reserved Area prior to the first anniversary of the Commencement Date, as provided in the paragraph entitled “Leased Premises” above.

 

Upon signing this Lease, Tenant shall pay and deliver to Landlord the fourth (4 th ) month’s Base Rent in the amount of Thirteen Thousand Six Hundred Twenty-seven and 30/100 Dollars ($13,627.30) , which shall be applied to the rent amounts first coming due under the Lease. If this Lease commences on a day other than the first day of a calendar month, for that partial month, the monthly Base Rent shall be prorated based on the actual number of days in a calendar month.

 

2.2 Interest and Late Charges . All rent and other payments not paid when due shall bear interest from the date due until fully paid at the rate of twelve percent (12%) per annum , but not in any event at a rate greater than the maximum rate of interest permitted by law. In addition, Tenant acknowledges that late payment of any rent or other payment required by this Lease from Tenant to Landlord will result in collection costs to Landlord, the extent of which additional cost is extremely difficult and economically impractical to ascertain. Tenant therefore agrees that if it fails to make any rent or other payment required by this Lease to Landlord within ten (10) days of the date when it is due, Landlord may impose a late charge of five cents (5¢) per dollar , per month, of the overdue payment or One Hundred Dollars and No/100 ($100.00) per month , whichever is greater, to reimburse Landlord for the costs of collecting the overdue payment; provided, however, Landlord agrees to give Tenant at least one business day to cure a failure to pay an amount due before charging such a late fee unless Tenant has failed to pay an amount owed under this Lease when due on two or more prior occasions in the last twelve months. Tenant shall pay the late charge upon demand by Landlord. Tenant agrees that the late charge is a reasonable estimate of the costs to Landlord of collecting the overdue payment. Landlord may levy and collect the late charge in addition to all


other remedies available for Tenant’s default, and collection of a late charge shall not waive the breach caused by the late payment.

 

2.3 Place of Payment . All rent payments required by this Lease shall be made directly to Landlord by delivering each monthly payment to Landlord or Landlord’s agent personally or by mailing the payment to Landlord at the address set forth in this Lease or to such other address as Landlord may, from time to time, designate in writing.

 

2.4 Net Lease Provision . All payments required to be paid by Tenant under this Lease, other than Base Rent, will constitute Additional Rent. This is intended to be a “triple net” Lease, meaning that, unless otherwise expressly set forth, Tenant shall pay, except as limited herein, all expenses reasonably incurred by Landlord relating to the reasonable repair, maintenance and operation of the Leased Premises (except with respect to any expenses that are Landlord obligations as described in this Lease) after commencement of the Lease term, and all rent ( including Base and Additional Rent ) shall be received by Landlord without set-off, offset, abatement, or deduction of any kind, except as otherwise expressly provided herein. Notwithstanding anything herein to the contrary, Tenant shall not be obligated to pay for any of the following: (i) legal fees, brokerage commissions, advertising costs, or other related expenses incurred by Landlord in connection with the leasing of space in the Building; (ii) repairs, alterations, additions, improvements or replacements made to rectify or correct any defect in the original design, materials or workmanship of the Building or common areas (but not including repairs, alterations, improvements or replacements made as a result of ordinary wear and tear); (iii) damage and repairs attributable to fire or other casualty; (iv) damage and repairs necessitated by the negligence or willful misconduct of Landlord, Landlord’s employees, contractors or agents; (v) executive salaries or salaries of service personnel to the extent that such personnel perform services not solely in connection with the management, operation, repair or maintenance of the Building; (vi) Landlord’s general overhead expenses not related to the Building; (vii) legal fees, accountants’ fees and other expenses incurred in connection with Landlord’s title to or interest in the Building, Leased Premises or any part thereof; (viii) costs (including permit, license and inspection fees) incurred in renovating or otherwise improving, decorating or painting or altering space for tenants or other occupants of vacant space (excluding common areas) in the Building; (ix) costs incurred due to a violation by Landlord or any other tenant of the Building of the terms and conditions of a lease; (x) cost of any service provided to Tenant for which Landlord is reimbursed; (xi) any other expense which, under GAAP applicable to real estate operations, would not be considered a reasonable maintenance and operating expense; (xii) cost and expenses which would be capitalized under GAAP; and (xiii) costs incurred for a hazardous waste clean-up unless caused by Tenant. In no event shall Landlord charge any property management fees or charges or collect in excess of 100% of operating expenses and shall not recover any item of cost more than once. Tenant shall have the right to audit Landlord’s books and records pertaining to any prior operating expenses.

 

3. BUSINESS PURPOSE AND USE .

 

3.1 Permitted Use . Tenant may use the Leased Premises only for general office, light manufacturing (excluding recreational vehicle manufacturing) or retail uses, including (without limitation) operating a contact or call center business and activities reasonably related thereto, including (without limitation) recruiting and training, and for no other purpose without the written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Tenant shall be permitted to use the Leased Premises at any and all times of each day, month and year of the Term, unless prohibited from doing so by applicable law.

 

3.2 Compliance with Laws . In connection with its use, Tenant shall comply, at its expense, with all applicable laws, regulations and requirements of any public authority, including those regarding maintenance, operation and use of the Leased Premises and any appliances on the Leased Premises ( including signs ). Without limiting the generality of the foregoing, after the Commencement Date of this Lease, Tenant, at its sole cost and expense, shall be responsible for complying with all applicable governmental rules and regulations required by Tenant’s specific use of the Leased Premises or changes in applicable laws, including, but not limited to, repairs or alterations to the interior, exterior or structure of the Leased Premises necessitated by changes in applicable building codes, handicapped access laws or similar regulations. Notwithstanding the foregoing, Landlord represents that it has not received any notice stating or is otherwise aware of any condition making the Leased Premises not currently in compliance with all


applicable laws. This Section 3.2 shall not limit Landlord’s obligation to comply with any applicable laws related to the Building provided the non-compliance was not caused by Tenant.

 

3.3 Supervision . Tenant shall keep the Leased Premises clean and orderly. Tenant will supervise its employees and cause Tenant’s agents, independent contractors, employees, customers, suppliers and invitees to conduct their activities in such a manner as to comply with the requirements of this Lease and the rules and regulations described herein.

 

3.4 Storage, Trash . Tenant shall not store anything outside the Building except in strict compliance with requirements of the applicable governmental authority. Tenant shall dispose of its trash in a manner reasonably acceptable to Landlord, at Tenant’s expense, which shall include an obligation to provide cleaning and waste removal services a minimum of every other day that Tenant is open for normal business activities.

 

4. UTILITIES AND TAXES .

 

4.1 Utilities Generally . The Building is already currently served by electrical power, water and gas. Landlord shall not take any action to prevent Tenant from using the HVAC system serving the Leased Premises 24 hours per day, 7 days per week, 52 weeks per year. If electrical power, water and gas are not available to the Leased Premises as of the Lease Commencement Date as a result of Landlord’s acts or omissions, Tenant shall have the right (after notice to Landlord and opportunity to cure, not to exceed three (3) business days ), in addition to any other right or remedy available to Tenant, to take whatever action Tenant may consider necessary or appropriate to obtain such services and to deduct the reasonable cost of obtaining such services thereof from the rent or other obligations owed under this Lease.

 

4.2 Payment . Tenant shall pay directly to the appropriate supplier all charges for utilities and services supplied to the Leased Premises and billed to Tenant, including, without limitation, hook-up and service charges for electricity, gas, telephone, water, sewer, wastewater discharge and garbage collection and janitorial services. If utility consumption is not separately metered to the Leased Premises, Tenant shall pay Landlord for all utilities consumed on the Leased Premises or any portion thereof at a rate which as nearly as possible represents the cost to Landlord of providing such utilities to Tenant. Payment shall be made within ten (10) days after Tenant receives the relevant billings from Landlord, or within the time permitted for payment by the utility company where Tenant is directly billed. Landlord represents that the Leased Premises are already connected to and are ready to receive electrical, water, telephone and sewer services. Tenant may make its own arrangements for janitorial and trash removal services. Landlord shall cooperate in permitting Tenant to make arrangements to have all utility services that are supplied to the Leased Premises billed directly to Tenant.

 

4.3 Interruption of Service . Landlord shall not be liable for any failure or interruption of utilities or services to the Leased Premises, unless caused by the negligence of Landlord or its agents. If Landlord fails to cooperate with Tenant and the service provider in restoring any interruption of utilities or services, to the extent Landlord’s cooperation is needed or may be of assistance in restoring such utilities or services and are requested by Tenant, Tenant shall have the right, in addition to any other right or remedy available to Tenant, to take whatever action Tenant may consider necessary or appropriate to restore such utilities or services, and to deduct the reasonable cost thereof from the rent or other obligation owed under this Lease.

 

4.4 Taxes and Assessments .

 

4.4.1 Taxes and Other Payments . In addition to Base Rent, Tenant shall pay as additional rent its share of all real property taxes and assessments of any public authority levied or assessed against the Leased Premises after the Commencement Date. Landlord or Tenant shall have the right to contest, in Landlord’s name, all such taxes; provided, however, Tenant shall pay for the cost of reasonably contesting any such taxes. Real property taxes and assessments shall include all real property taxes and assessments of any public authority assessed against the Leased Premises and improvements located thereon, and rent tax, gross receipts tax, tax on Landlord’s interest under this Lease, or any tax in lieu of the foregoing, whether or not such tax is now in effect (excluding any Tenant tax based on Landlord’s net income).


Tenant’s “share” of taxes and assessments shall be a percentage thereof equal to the percentage which the net rentable area of the building leased by Tenant bears to the total net rentable area of the building located on the Leased Premises; provided, however, taxes or assessments on any improvements solely used by Tenant and separately assessed by the applicable taxing authority, and all utilities and operating expenses associated with improvements solely used by Tenant, shall be paid in full by Tenant. Tax payments for any partial assessment period shall be prorated between Landlord and Tenant and paid in advance. Tenant’s share of all other real property, taxes and assessments shall be paid to Landlord no less than ten (10) days prior to their date due to the applicable taxing authority. If not separately billed or charged to Tenant, Landlord shall promptly provide Tenant with copies of all assessment notices, the tax statements or other sufficient documentation of the amount and due date of all such taxes, which shall then be timely paid by Tenant. If Tenant fails to timely pay any real property taxes, charges or assessments, Landlord may pay such amounts and the cost thereof, together with interest at the rate of twelve percent (12%) per annum , shall be immediately due and payable from Tenant to Landlord. Tenant shall pay such amounts to Landlord with the monthly rental payment next falling due.

 

4.4.2 Personal Property Taxes . Tenant shall also pay, before delinquency, any and all taxes levied or assessed on or as a result of Tenant’s leasehold improvements, equipment, furniture, fixtures and any other personal property located on the Leased Premises. In the event any or all of Tenant’s leasehold improvements, equipment, furniture, fixtures, and other personal property shall be assessed and taxed with the real property, Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery to Tenant from Landlord of the taxing authorities’ statement in writing setting forth the amount of such taxes applicable to Tenant’s property.

 

5. INSURANCE AND INDEMNITY PROVISIONS :

 

5.1 Liability Insurance . Tenant, at its expense, shall obtain and keep in force during the entire term of this Lease a broad form policy of commercial general liability insurance. Such policy or policies shall provide for liability coverage with minimum combined single limits for bodily injury and property damage per occurrence in amounts not less than Two Million Dollars ($2,000,000) . The limits of liability insurance required by this paragraph shall not, however, limit the liability of Tenant hereunder. The Tenant’s liability insurance required by this paragraph shall be made on an “occurrence” basis and not on a “claims made” basis. The liability insurance referred to in this paragraph 5.1 may be provided under (i) an individual policy covering the Leased Premises, or (ii) a blanket policy or policies that include other liabilities, properties and locations of Tenant; so long as the amount and coverage of insurance required to be carried under this Section 5 is not diminished, or (iii) a combination of the foregoing insurance programs. To the extent any deductible is permitted or allowed as part of any insurance policy carried by Tenant in compliance with this Section 5, Tenant shall be deemed to be covering the amount of such deductible under an informal plan of self-insurance; provided, however, that in no event shall any deductible exceed Five Thousand Dollars ($5,000) .

 

5.2 Property Insurance of Tenant . Tenant, at its expense, shall maintain in effect (a) a property insurance policy using the “Causes of Loss - Special Form” on furnishings, trade fixtures, inventory and equipment located on the Leased Premises, for their full replacement value and (b) similar insurance on all plate glass on the Leased Premises for its replacement cost. The applicable proceeds of such insurance, so long as this Lease remains in effect, shall be used to repair or replace the leasehold improvements, fixtures, equipment and plate glass so insured.

 

5.3 Property Insurance of Landlord . Landlord shall maintain in effect property insurance covering the Leased Premises (except those items specified in paragraph 5.2), but not the contents thereof, using the “Causes of Loss - Special Form” covering loss or damage to the Leased Premises in an amount equal to the full replacement value thereof. Such insurance shall include at a minimum those coverages described in Exhibit F attached hereto. Tenant shall reimburse Landlord for its prorata share of the cost of such insurance as an operating expense calculated in the same manner as Tenant’s share of real estate taxes set forth in paragraph 4.4.1 above.

 

5.4 Insurance Policies . All Tenant’s insurance policies shall name Landlord as an additional insured and shall be with companies and with loss-payee clauses reasonably satisfactory to


Landlord. Copies of all policies or certificates evidencing such insurance shall be delivered to Landlord by Tenant prior to Tenant’s occupancy of the Leased Premises. All policies shall bear endorsements requiring thirty (30) days’ written notice to Landlord prior to any change or cancellation.

 

5.5 Waiver of Subrogation . Tenant and Landlord each waive any and all rights of recovery against the other, or against the employees, agents and representatives of the other, for loss of or damage to such waiving party, property, or property of others under its control, where such loss or damage is insured against under any third party insurance policy in force at the time of such loss or damage. Landlord and Tenant shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carriers that the foregoing mutual waiver of subrogation is contained in this Lease. The foregoing waiver shall not apply if it would have the effect, but only to the extent of such effect, of invalidating any insurance coverage of Landlord or Tenant.

 

5.6 Indemnity of Tenant and Landlord . Tenant shall defend, indemnify and hold Landlord harmless from any and all costs, claims or liability arising from any third party claim pertaining to: (1) Tenant’s use of the Leased Premises; (2) the conduct of Tenant’s business or anything else done or permitted by Tenant to be done in or about the Leased Premises; (3) any breach or default in the performance of Tenant’s obligations under this Lease; (4) any misrepresentation or breach of warranty by Tenant under this Lease; or (5) other acts or omissions of Tenant. Tenant shall defend Landlord against any such costs, claims or liability at Tenant’s expense with counsel reasonably acceptable to Landlord or, at Landlord’s election, Tenant shall reimburse Landlord for any reasonable legal fees or costs reasonably incurred by Landlord in connection with any such claim. Tenant shall not however be obligated to indemnify Landlord to the extent any such claim or loss is caused by the concurrent negligence of Landlord or its agents or employees. As used in this paragraph, the term “Tenant” shall include Tenant’s officers, employees, agents, contractors and invitees, if applicable. Landlord shall defend, indemnify and hold Tenant harmless from any and all costs or liability arising from any third party claim pertaining to (1) Landlord’s use of the Leased Premises; (2) the conduct of Landlord’s business or anything else done by Landlord in or about the Leased Premises; (3) any breach or default in the performance of Landlord’s obligations under this Lease; (4) any misrepresentation or breach of warranty by Landlord under this Lease; or (5) other acts or omissions of Landlord. Landlord shall defend Tenant against any such costs, claims or liability at Landlord’s expense with counsel reasonably acceptable to Tenant or, at Tenant’s election, Landlord shall reimburse Tenant for any reasonable legal fees or costs reasonably incurred by Tenant in connection with any such claim. Landlord shall not however be obligated to indemnify Tenant to the extent any such claim or loss is caused by the concurrent negligence of Tenant or its agents or employees.

 

6. MAINTENANCE, REPAIRS AND ALTERATIONS .

 

6.1 Landlord’s Obligations . Except for damage caused by any negligent or intentional act or omission of Tenant or Tenant’s agents, employees or invitees, Landlord, at Landlord’s expense shall keep in good order, condition, and repair the capital and structural components of the Leased Premises defined as the foundation, footings, concrete slabs, concrete pier, structural steel, roof deck and skin, exterior walls (excluding painting), facade, and the existing plumbing and sewer lines in or serving the Building (excluding any new plumbing or sewer lines installed by Tenant) and the underground utilities (from the real property boundary line to the point they enter the Building located on the Premises), and capital improvements to the parking lot (e.g., repaving or replacement of light fixtures or drainage systems). Landlord shall not be required to maintain in the Leased Premises the interior surface of exterior walls, floors, interior windows, doors, or interior plate glass. Landlord shall have no obligation to make repairs under this paragraph 6.1 until a reasonable time after receipt of written notice of the need for such repairs or the need for such repairs otherwise comes to the attention of Landlord, but shall make all repairs promptly following receipt of any such notice or after becoming aware of the need for such repairs. The definition of capital components shall be based on Generally Accepted Accounting Principels (GAAP).

 

6.2 Tenant’s Obligations . Tenant, at Tenant’s expense, shall keep in good order, condition, and repair the Leased Premises and every part or portion thereof not required to be repaired and maintained by Landlord. Other than with regard to those components to be maintained and repaired by Landlord, Tenant shall be responsible to maintain and keep in a good working state of repair the Leased Premises, including without limitation, to the extent not the responsibility of Landlord, the maintenance,


replacement and repair of any windows, plate glass, signs, doors, window casings, glazing, heating, ventilating, air conditioning systems, and plumbing, electrical wiring and conduits serving the Leased Premises and general maintenance and upkeep on all parking and landscaped areas (including general maintenance and irrigation, ice and snow removal, and parking lot striping or cleaning). Tenant shall be responsible for providing (or contracting for) customary building services including routine maintenance of mechanical, electrical, sprinkler and HVAC systems for the Premises and interior cleaning at Tenant’s sole expense. Landlord shall deliver the Leased Premises to Tenant with the heating, ventilating, and air conditioning systems, plumbing and electrical conduits, circuit breakers, panel boxes, meters and water heaters in good working order and condition. Tenant shall promptly repair any damage to any elements to be maintained and repaired by Tenant from damages caused by any burglary or attempted burglary. Tenant shall keep the glass on all windows and doors clean and presentable, replace immediately all broken glass in the Building; make any necessary repairs to, or replacements of, all doors and door closure apparatus and mechanisms; keep all plumbing clean and in a good state of repair, including pipes, drains, toilets, basins, water heaters and those portions of the heating system within the walls of the Premises, and keep all utilities, including the circuit breakers, panel boxes and meters in a good state of repair. Additionally, it shall be the Tenant’s responsibility to maintain and repair any and all improvements installed by Tenant to the extent they are not damaged by Landlord’s failure to repair or maintain the Building as described in this Lease. Nothing herein shall obligate Tenant to repair or maintain the Leased Premises with regard to any condition caused by (i) ordinary wear and tear; (ii) a casualty or condemnation; or (iii) any act or omission of Landlord or any failure by Landlord to comply with this Lease.

 

6.3 Surrender of Leased Premises . On the last day of the term of this Lease, or on any sooner termination, Tenant shall surrender the Leased Premises to Landlord in good condition, ordinary wear and tear excepted. Other than ordinary wear and tear, Tenant shall repair any damage to the Leased Premises occasioned by Tenant’s use thereof or by the removal of Tenant’s trade fixtures, furnishings, and equipment, which repair shall include the patching and filling of holes and repair of any structural damage.

 

6.4 (a)  Landlord’s Rights if Tenant Fails To Perform Tenant’s Obligations . If Tenant fails to perform any of its repair or maintenance obligations under this Lease within twenty (20) days after written notice from Tenant, or sooner if an emergency exists or the failure renders the Leased Premises a danger to persons or property, then in addition to any other right or remed


 
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