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LEASE

Lease Agreement

LEASE | Document Parties: CARRAMERICA REALTY CORPORATION | FOCUS ENHANCEMENTS, INC You are currently viewing:
This Lease Agreement involves

CARRAMERICA REALTY CORPORATION | FOCUS ENHANCEMENTS, INC

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Title: LEASE
Date: 4/29/2008
Industry: Software and Programming     Sector: Technology

LEASE, Parties: carramerica realty corporation , focus enhancements  inc
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Exhibit 10.23(a)

 

LEASE

 

between

 

FOCUS ENHANCEMENTS, INC.

(Tenant)

 

and

 

CARRAMERICA REALTY CORPORATION

(Landlord)

 

May 31, 2000

 



 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

1.

LEASE AGREEMENT

1

 

 

 

 

2.

RENT

1

 

 

 

 

 

A.

Types of Rent

1

 

B.

Payment of Operating Cost Share Rent and Tax Share Rent

1

 

C.

Definitions

2

 

D.

Computation of Base Rent and Rent Adjustments

4

 

 

 

 

3.

PREPARATION AND CONDITION OF PREMISES; POSSESSION AND SURRENDER OF PREMISES

5

 

 

 

 

 

A.

Condition of Premises

5

 

B.

Tenant’s Possession

5

 

C.

Maintenance

5

 

 

 

 

4.

PROJECT SERVICES

5

 

 

 

 

 

A.

Heating and Air Conditioning

5

 

B.

Elevators

6

 

C.

Electricity

6

 

D.

Water

6

 

E.

Janitorial Service

6

 

F.

Interruption of Services

6

 

 

 

 

5.

ALTERATIONS AND REPAIRS

6

 

 

 

 

 

A.

Landlord’s Consent and Conditions

6

 

B.

Damage to Systems

7

 

C.

No Liens

7

 

D.

Ownership of Improvements

8

 

E.

Removal at Termination

8

 

 

 

 

6.

USE OF PREMISES

8

 

 

 

 

7.

GOVERNMENTAL REQUIREMENTS AND BUILDING RULES

9

 

 

 

 

8.

WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE

9

 

 

 

 

 

A.

Indemnification

9

 

B.

Tenant’s Insurance

9

 

C.

Insurance Certificates

10

 

D.

Landlord’s Insurance

11

 

E.

Waiver of Subrogation

11

 

i



 

9.

FIRE AND OTHER CASUALTY

11

 

 

 

 

 

A.

Termination

11

 

B.

Restoration

11

 

 

 

 

10.

EMINENT DOMAIN

11

 

 

 

 

11.

RIGHTS RESERVED TO LANDLORD

11

 

 

 

 

 

A.

Name

11

 

B.

Signs

12

 

C.

Window Treatments

12

 

D.

Keys

12

 

E.

Access

12

 

F.

Preparation for Reoccupancy

12

 

G.

Heavy Articles

12

 

H.

Show Premises

12

 

I.

Relocation of Tenant

12

 

J.

Use of Lockbox

12

 

K.

Repairs and Alterations

12

 

L.

Landlord’s Agents

13

 

M.

Building Services

13

 

N.

Other Actions

13

 

 

 

 

12.

TENANT’S DEFAULT

13

 

 

 

 

 

A.

Rent Default

13

 

B.

Certain Performance Default

13

 

C.

Other Performance Default

13

 

D.

Credit Default

13

 

E.

Vacation or Abandonment Default

13

 

 

 

 

13.

LANDLORD REMEDIES

13

 

 

 

 

 

A.

Termination of Lease or Possession

13

 

B.

Lease Termination Damages

14

 

C.

Possession Termination Damages

14

 

D.

Landlord’s Remedies Cumulative

14

 

E.

WAIVER OF TRIAL BY JURY

14

 

F.

Litigation Costs

14

 

 

 

 

14.

SURRENDER

15

 

 

 

 

15.

HOLDOVER

15

 

ii



 

16.

SUBORDINATION TO GROUND LEASES AND MORTGAGES

15

 

 

 

 

 

A.

Subordination

15

 

B.

Termination of Ground Lease or Foreclosure of Mortgage

15

 

C.

Security Deposit

15

 

D.

Notice and Right to Cure

16

 

E.

Definitions

16

 

 

 

 

17.

ASSIGNMENT AND SUBLEASE

16

 

 

 

 

 

A.

In General

16

 

B.

Landlord’s Consent

16

 

C.

Procedure

16

 

D.

Change of Management or Ownership

17

 

E.

Excess Payments

17

 

F.

Recapture

17

 

G.

Permitted Transfers

17

 

 

 

 

18.

CONVEYANCE BY LANDLORD

17

 

 

 

 

19.

ESTOPPEL CERTIFICATE

18

 

 

 

 

20.

SECURITY DEPOSIT

18

 

 

 

 

21.

FORCE MAJEURE

19

 

 

 

 

22.

TENANT’S PERSONAL PROPERTY AND FIXTURES

19

 

 

 

 

23.

NOTICES

20

 

 

 

 

 

A.

Landlord

20

 

B.

Tenant

20

 

 

 

 

24.

QUIET POSSESSION

20

 

 

 

 

25.

REAL ESTATE BROKER

20

 

 

 

 

26.

MISCELLANEOUS

20

 

 

 

 

 

A.

Successors and Assigns

20

 

B.

Date Payments Are Due

20

 

C.

Meaning of “Landlord”, “Re-Entry, “including” and “Affiliate”

21

 

D.

Time of the Essence

21

 

E.

No Option

21

 

F.

Severability

21

 

G.

Governing Law

21

 

H.

Lease Modification

21

 

I.

No Oral Modification

21

 

iii



 

 

J.

Landlord’s Right to Cure

21

 

K.

Captions

21

 

L.

Authority

21

 

M.

Landlord’s Enforcement of Remedies

21

 

N.

Entire Agreement

21

 

O.

Landlord’s Title

21

 

P.

Light and Air Rights

21

 

Q.

Singular and Plural

22

 

R.

No Recording by Tenant

22

 

S.

Exclusivity

22

 

T.

No Construction Against Drafting Party

22

 

U.

Survival

22

 

V.

Rent Not Based on Income

22

 

W.

Building Manager and Service Providers

22

 

X.

Late Charge and Interest on Late Payments

22

 

Y.

Tenant’s Financial Statements

22

 

Z.

Parking

22

 

 

 

 

27.

UNRELATED BUSINESS INCOME

22

 

 

 

 

28.

HAZARDOUS SUBSTANCES

23

 

 

 

 

29.

EXCULPATION

23

 

 

 

 

30.

UTILITY DEREGULATION

23

 

 

 

 

 

A.

Landlord Controls Selection

23

 

B.

Tenant Will Provide Access

23

 

C.

Landlord Not Responsible for Change in Service

23

 

ATTACHMENTS

Appendix A

Plan of Premises

Appendix B

Rules and Regulations

Appendix C

Tenant Improvement Agreement

Appendix D

Mortgages Currently Affecting the Project

Appendix E

Commencement Date Confirmation

Appendix F

Legal Description

Addendum 1

Renewal Option

Addendum 2

Right of First Offer

 

iv



 

LEASE

 

THIS LEASE (the “ Lease ”) is made as of June 7, 2000 between CARRAMERICA REALTY CORPORATION , a Maryland corporation (the “ Landlord ”) and the Tenant as named in the Schedule below.  For purposes of this Lease, the term “ Project ” means the land legally described in Appendix F hereto (the “Land”) and buildings A, B and C located thereon.  The Project is a portion of the Sunset Corporate Park, Hillsboro, Oregon.  “ Premises ” means that part of Building A of the Project leased to Tenant described in the Schedule and outlined on Appendix A .  “ Building ” means Building A of the Project.  “ Common Area ” means the sidewalks, halls, passageways, exits, entrances, elevators, corridors, accessways, lobby, and all other public areas of the Building.

 

The following schedule (the “ Schedule ”) is an integral part of this Lease.  Terms defined in this Schedule shall have the same meaning throughout the Lease.

 

SCHEDULE

 

1.              Tenant :  Focus Enhancements, Inc., a Delaware corporation

 

2.              Premises :  Sunset Corporate Park, Building A, 22867, Suite 120, NW Bennett Street, Hillsboro, Oregon  97124.  On the Commencement Date, Landlord shall deliver to Tenant possession of the entire Premises consisting of approximately 7,390 Rentable Square Feet (as defined in Section 3 below).  Beginning on the Commencement Date, Tenant shall pay Operating Cost Share Rent and Tax Share Rent to Landlord in accordance with Section 2A of the Lease.

 

3.              Rentable Square Feet of the Premises :  Approximately 7,390 Rentable Square Feet, subject to final space planning and area calculations.  As used herein, “Rentable Square Feet” or “RSF” shall have the same definition as “Floor Rentable Area” as defined in BOMA’s Standard Method for Measuring Floor Area in Office Buildings (ANSI/BOMA Z651.1-1996).

 

4.              Tenant’s Proportionate Share :  (a) 16.90% (based upon a total of 43,717 Rentable Square Feet for Building A) as to all Operating Costs relating to Building A, as defined in Section 2(c)(1) of the Lease, including, without limitation, HVAC maintenance and repairs, elevator maintenance and repairs, building management fee, any janitorial services and supplies, window cleaning and property insurance; (b) 5.66%  (based upon a total of 130,461 Rentable Square Feet in the Buildings) of all Operating Costs of the Project, excluding all Operating Costs attributable to all or any part of  any Building in the Project, including without limitation, landscape costs, parking lot repair and maintenance, Landlord’s liability insurance costs; and (c) 5.66% of all Taxes (provided, however, that should Building A and the land on which it is located be separately assessed from the remainder of the Project, Tenant’s Proportionate Share of Taxes shall be 16.90% of Taxes payable with respect to such separately assessed parcel).  Tenant shall also pay an amount fairly and equitably apportioned by Landlord of the overhead costs relating to Landlord’s local management office, based on the RSF of the Premises and the total square footage of the buildings managed by Landlord’s local management office.

 

5.              Security Deposit :  $20,000.  See Section 20 of this Lease.

 

6.              Tenant’s Real Estate Broker for this Lease :  Hume Myers Tenant Counsel

 

7.              Landlord’s Real Estate Broker for this Lease :  Insignia/ESG, Inc.

 

8.              Tenant Improvements, if any :  See the Tenant Improvement Agreement attached hereto as Appendix C .

 

9.              Commencement Date :  The Commencement Date shall be the later of (a) May 1, 2000, or (b) the date the Tenant Improvements (as defined in Appendix C ) are Substantially Complete (as defined in Appendix C ) and Landlord has delivered possession of the Premises to the

 

1



 

Tenant.  The parties will use best efforts to cause the Commencement Date to occur on May 1, 2000.  Landlord and Tenant shall execute a Commencement Date Confirmation substantially in the form of Appendix E promptly following the Commencement Date.

 

10.            Termination Date/Term : October 31, 2005

 

11.            Guarantor :  None.

 

12.            Base Rent :

 

 

 

Square

 

Monthly

 

Total Monthly

 

Annual Base

 

Period

 

Footage

 

Base Rent/RSF

 

Base Rent

 

Rent

 

 

 

 

 

 

 

 

 

 

 

1 – 6

 

7,390

 

$

-0-

 

$

-0-

 

$

-0-

 

7 – 36

 

7,390

 

$

.97

 

$

7,168.30

 

$

86,019.60

 

37 – 66

 

7,390

 

$

1.05

 

$

7,759.50

 

$

93,114.00

 

 

2



 

1.      LEASE AGREEMENT.

 

On the terms and conditions stated in this Lease, Landlord leases the Premises to Tenant, and Tenant leases the Premises from Landlord, for the Term beginning on the Commencement Date and ending on the Termination Date unless extended or sooner terminated pursuant to this Lease.

 

2.      RENT.

 

A.     Types of Rent .  Tenant shall pay the following Rent in the form of a check to Landlord at the following address:

 

CarrAmerica Realty Corporation
Sunset Corporate Park
P.O. Box 402013
Atlanta, GA 30384-2013

 

or by wire transfer as follows:

 

NationsBank, N.A. (South)
ABA Number 061-000-052
Account Number 32-6303-9788

 

or in such other manner as Landlord may notify Tenant.

 

(1)            Base Rent in monthly installments in advance, the monthly installment for the seventh (7 th ) month payable concurrently with the execution of this Lease and thereafter on or before the first day of each month of the Term in the amount set forth on the Schedule.

 

(2)            Operating Cost Share Rent in an amount equal to the Tenant’s Proportionate Share of the Operating Costs for the applicable fiscal year of the Lease, paid monthly in advance in an amount reasonably estimated by Landlord.  Definitions of Operating Costs and Tenant’s Proportionate Share, and the method for billing and payment of Operating Cost Share Rent are set forth in Sections 2B, 2C and 2D.

 

(3)            Tax Share Rent in an amount equal to the Tenant’s Proportionate Share of the Taxes for the applicable fiscal year of this Lease, paid monthly in advance in an amount reasonably estimated by Landlord.  A definition of Taxes and the method for billing and payment of Tax Share Rent are set forth in Sections 2B, 2C and 2D.

 

(4)            Additional Rent in the amount of all costs, expenses, liabilities, and amounts which Tenant is required to pay under this Lease, excluding Base Rent, Operating Cost Share Rent, and Tax Share Rent, but including any interest for late payment of any item of Rent.

 

(5)            Rent as used in this Lease means Base Rent, Operating Cost Share Rent, Tax Share Rent and Additional Rent.  Tenant’s agreement to pay Rent is an independent covenant, with no right of setoff, deduction or counterclaim of any kind.

 

B.     Payment of Operating Cost Share Rent and Tax Share Rent.

 

(1)            Payment of Estimated Operating Cost Share Rent and Tax Share Rent.  Landlord shall estimate the Operating Costs and Taxes of the Project by April 1 of each fiscal year, or as soon as reasonably possible thereafter.  Landlord may revise these estimates whenever it obtains more accurate information, such as the final real estate tax assessment or tax rate for the Project.

 

Within ten (10) days after receiving the original or revised estimate from Landlord, Tenant shall pay Landlord one-twelfth (1/12th) of Tenant’s Proportionate Share of this estimate, multiplied by the number of months that have elapsed in the applicable fiscal year

 

1



 

to the date of such payment including the current month, minus payments previously made by Tenant for the months elapsed.  On the first day of each month thereafter, Tenant shall pay Landlord one-twelfth (1/12th) of Tenant’s Proportionate Share of this estimate, until a new estimate becomes applicable.

 

(2)            Correction of Operating Cost Share Rent.  Landlord shall deliver to Tenant a report for the previous fiscal year (the “Operating Cost Report”) by May 15 of each year, or as soon as reasonably possible thereafter, setting forth (a) the actual Operating Costs incurred, (b) the amount of Operating Cost Share Rent due from Tenant, and (c) the amount of Operating Cost Share Rent paid by Tenant.  Within twenty (20) days after such delivery, Tenant shall pay to Landlord the amount due minus the amount paid.  If the amount paid exceeds the amount due, Landlord shall apply the excess to Tenant’s payments of Operating Cost Share Rent next coming due or, if no additional payments of Operating Cost Share Rent are due, the excess will be credited against Rent or refunded to Tenant, at Tenant’s option.

 

(3)            Correction of Tax Share Rent.  Landlord shall deliver to Tenant a report for the previous fiscal year (the “Tax Report”) by May 15 of each year, or as soon as reasonably possible thereafter, setting forth (a) the actual Taxes, (b) the amount of Tax Share Rent due from Tenant, and (c) the amount of Tax Share Rent paid by Tenant.  Within twenty (20) days after such delivery, Tenant shall pay to Landlord the amount due from Tenant minus the amount paid by Tenant.  If the amount paid exceeds the amount due, Landlord shall apply the excess to Tenant’s payments of Tax Share Rent next coming due or, if no additional payments of Tax Share Rent are due, the excess will be credited against Rent or refunded to Tenant, at Tenant’s option.

 

C.     Definitions.

 

(1)            Included Operating Costs.  “Operating Costs” means any expenses, costs and disbursements of any kind other than Taxes, paid or incurred by Landlord in connection with the management, maintenance, operation, insurance, repair and other related activities in connection with any part of the Project (including, without limitation, all costs, charges, and expenses incurred by Landlord in connection with any change in the Electric Service Provider or Alternate Service Provider (as defined in Section 30A) then providing electrical services, and the maintenance, repair, installation and service costs associated therewith) and of the personal property, fixtures, machinery, equipment, systems and apparatus used in connection therewith, including the cost of providing those services required to be furnished by Landlord under this Lease.  Operating Costs shall also include the cost of any capital improvements which are intended to reduce Operating Costs or improve safety, and those made to keep the Project in compliance with governmental requirements applicable from time to time (collectively, the “Included Capital Items”); provided, that the costs of any Included Capital Item shall be amortized by Landlord, together with an amount equal to interest at ten percent (10%) per annum, over the estimated useful life of such item and such amortized costs will be included in Operating Costs for that portion of the useful life of the Included Capital Item which falls within the Term.

 

If the Project is not fully occupied during any portion of any fiscal year, Landlord may adjust (an “Equitable Adjustment”) Operating Costs to equal what would have been incurred by Landlord had the Project been fully occupied.  This Equitable Adjustment shall apply only to Operating Costs which are variable and therefore increase as occupancy of the Project increases.  Landlord may incorporate the Equitable Adjustment in its estimates of Operating Costs.

 

2



 

If Landlord does not furnish any particular service whose cost would have constituted an Operating Cost to a tenant other than Tenant who has undertaken to perform such service itself, Operating Costs shall be increased by the amount which Landlord would have incurred if it had furnished the service to such tenant.

 

(2)            Excluded Operating Costs.  Operating Costs shall not include:

 

(a)            costs of alterations of tenant premises;

 

(b)            costs of capital improvements other than Included Capital Items;

 

(c)            interest and principal payments on mortgages or any other debt costs, or rental payments on any ground lease of the Project;

 

(d)            real estate brokers’ leasing commissions;

 

(e)            legal fees, space planner fees and advertising expenses incurred with regard to leasing the Building or portions thereof;

 

(f)             any cost or expenditure for which Landlord is reimbursed, by insurance proceeds or otherwise, except by Operating Cost Share Rent;

 

(g)            the cost of any service furnished to any office tenant of the Project which Landlord does not make available to Tenant;

 

(h)            depreciation (except on any Included Capital Items);

 

(i)             franchise or income taxes imposed upon Landlord, except to the extent imposed in lieu of all or any part of Taxes;

 

(j)             costs of correcting defects in construction of the Building (as opposed to the cost of normal repair, maintenance and replacement expected with the construction materials and equipment installed in the Building in light of their specifications);

 

(k)            legal and auditing fees which are for the benefit of Landlord such as collecting delinquent rents, preparing tax returns and other financial statements, and audits other than those incurred in connection with the preparation of reports required pursuant to Section 2B above;

 

(l)             the wages of any employee for services not related directly to the management, maintenance, operation and repair of the Building; and

 

(m)           fines, penalties and interest.

 

(3)            Taxes.  “Taxes” means any and all taxes, assessments and charges of any kind, general or special, ordinary or extraordinary, levied against the Project, which Landlord shall pay or become obligated to pay in connection with the ownership, leasing, renting, management, use, occupancy, control or operation of the Project or of the personal property, fixtures, machinery, equipment, systems and apparatus used in connection therewith.  Taxes shall include real estate taxes, personal property taxes, sewer rents, water rents, special or general assessments, transit taxes, ad valorem taxes, and any tax levied on the rents hereunder or the interest of Landlord under this Lease (the “Rent Tax”).  Taxes shall also include all fees and other costs and expenses paid by Landlord in reviewing any tax and in seeking a refund or reduction of any Taxes, whether or not the Landlord is ultimately successful.

 

3



 

For any year, the amount to be included in Taxes (a) from taxes or assessments payable in installments, shall be the amount of the installments (with any interest) due and payable during such year, and (b) from all other Taxes, shall at Landlord’s election be the amount accrued, assessed, or otherwise imposed for such year or the amount due and payable in such year.  Any refund or other adjustment to any Taxes by the taxing authority, shall apply during the year in which the adjustment is made.

 

Taxes shall not include any net income (except Rent Tax), capital, stock, succession, transfer, franchise, gift, estate or inheritance tax, except to the extent that such tax shall be imposed in lieu of any portion of Taxes.

 

(4)            Lease Year.  “Lease Year” means each consecutive twelve-month period beginning with the Commencement Date, except that if the Commencement Date is not the first day of a calendar month, then the first Lease Year shall be the period from the Commencement Date through the final day of the twelve months after the first day of the following month, and each subsequent Lease Year shall be the twelve months following the prior Lease Year.

 

(5)            Fiscal Year.  “Fiscal Year” means the calendar year, except that the first fiscal year and the last fiscal year of the Term may be a partial calendar year.

 

D.     Computation of Base Rent and Rent Adjustments.

 

(1)            Prorations.              If this Lease begins on a day other than the first day of a month, the Operating Cost Share Rent and Tax Share Rent shall be prorated for such partial month based on the actual number of days in such month.  If this Lease begins on a day other than the first day, or ends on a day other than the last day, of the fiscal year, Operating Cost Share Rent and Tax Share Rent shall be prorated for the applicable fiscal year.

 

(2)            Default Interest.  Any sum due from Tenant to Landlord not paid when due shall bear interest from the date due until paid at twelve percent (12%) per annum.

 

(3)            Rent Adjustments.  The square footage of the Premises and the Building set forth in the Schedule are conclusively deemed to be the actual square footage thereof, without regard to any subsequent remeasurement of the Premises or the Building.  If any Operating Cost paid in one fiscal year relates to more than one fiscal year, Landlord may proportionately allocate such Operating Cost among the related fiscal years.

 

(4)            Books and Records.  Landlord shall maintain books and records reflecting the Operating Costs and Taxes in accordance with sound accounting and management practices.  Tenant and its certified public accountant may inspect Landlord’s records at Landlord’s office upon at least seventy-two (72) hours’ prior notice during normal business hours during the ninety (90) days following the respective delivery of the Operating Cost Report or the Tax Report.  The results of any such inspection shall be kept strictly confidential by Tenant and its agents, and Tenant and its certified public accountant must agree, in their contract for such services, to such confidentiality restrictions and shall specifically agree that the results shall not be made available to any other tenant of the Building.  Unless Tenant sends to Landlord any written exception to either such report within said ninety (90) day period, such report shall be deemed final and accepted by Tenant.  Tenant shall pay the amount shown on both reports in the manner prescribed in this Lease, whether or not Tenant takes any such written exception, without any prejudice to such exception.  If Tenant makes a timely exception, Landlord shall cause its independent certified public accountant to issue a final and conclusive resolution of Tenant’s exception.  Tenant shall pay the cost of such certification unless Landlord’s original determination of annual Operating Costs or Taxes

 

4



 

overstated the amounts thereof by more than five percent (5%). Tenant shall then have 30 days to review such certification.

 

(5)          Miscellaneous.  So long as Tenant is in default of any obligation under this Lease, Tenant shall not be entitled to any refund of any amount from Landlord.  If this Lease is terminated for any reason prior to the annual determination of Operating Cost Share Rent or Tax Share Rent, either party shall pay the full amount due to the other within thirty (30) days after the earlier of (i) Landlord’s notice to Tenant of the amount when it is determined, or (ii) Tenant’s demand for such refund.  Landlord may commingle any payments made with respect to Operating Cost Share Rent or Tax Share Rent, without payment of interest.

 

3.             PREPARATION AND CONDITION OF PREMISES; POSSESSION AND SURRENDER OF PREMISES.

 

A.             Condition of Premises .  Except to the extent of the Tenant Improvements identified in Appendix C , Landlord is leasing the Premises to Tenant “as is”, without any obligation to alter, remodel, improve, repair or decorate any part of the Premises.

 

B.             Tenant’s Possession .  Tenant’s taking possession of any portion of the Premises shall be conclusive evidence that the entire Premises was in good order, repair and condition, except that Tenant shall (a) have thirty (30) days to identify “punch list” items to Landlord in writing for which Tenant shall have no liability; (b) identify any latent defects to Landlord in writing within one (1) year of the date Tenant takes possession.  If Landlord authorizes Tenant to take possession of any part of the Premises prior to the Commencement Date for purposes of doing business, all terms of this Lease shall apply to such pre-Term possession, including Base Rent at the rate set forth for the First Lease Year in the Schedule, prorated for any partial month.

 

C.             Maintenance .  Throughout the Term, Tenant shall maintain the Premises in good condition, loss or damage caused by the elements, ordinary wear and tear, and fire and other casualty excepted, and at the termination of this Lease, or Tenant’s right to possession, Tenant shall return the Premises to Landlord in broom-clean condition.  To the extent Tenant fails to perform its obligations, Landlord may, but need not, after written notice to Tenant informing Tenant of such intent and providing Tenant the opportunity to dispute the allegation or perform repairs themselves, restore the Premises to such condition and Tenant shall pay the cost thereof.  The cost of any repairs made by Landlord on account of Tenant’s default, or on the account of the misuse or neglect by Tenant or its employees, agents, invitees or Contractor’s anywhere in the Project, shall become Additional Rent, payable by Tenant immediately upon Landlord’s demand.

 

4.      PROJECT SERVICES.

 

So long as Tenant is not in default under this Lease, Landlord shall furnish services as follows:

 

A.             Heating and Air Conditioning .  During the normal business hours of 6:00 a.m. to 9:00 p.m., Monday through Friday, and 9:00 a.m. to 4:00 p.m. on Saturday, Landlord shall furnish heating and air conditioning to provide a comfortable temperature, in Landlord’s judgment, for normal business operations, except to the extent Tenant installs equipment which adversely affects the temperature maintained by the air conditioning system.  If Tenant installs such equipment, Landlord may install supplementary air conditioning units in the Premises, and Tenant shall pay to Landlord upon demand as Additional Rent the cost of installation, operation and maintenance thereof.  Landlord shall furnish heating and air conditioning after business hours if Tenant provides Landlord reasonable prior notice, and pays Landlord all then current charges for such additional heating or air conditioning.

 

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B.             Elevators .  Landlord shall provide passenger elevator service during normal business hours to Tenant in common with Landlord and all other tenants.  Landlord shall provide limited passenger service at other times, except in case of an emergency.

 

C.             Electricity .  Landlord shall provide sufficient electricity to operate normal office lighting and equipment.  Tenant shall not install or operate in the Premises any electrically operated equipment or other machinery, other than business machines and equipment normally employed for general office use which do not require high electricity consumption for operation, without obtaining the prior written consent of Landlord.  If any or all of Tenant’s equipment requires electricity consumption in excess of that which is necessary to operate normal office equipment, such consumption (including consumption for computer or telephone rooms and special HVAC equipment) shall be submetered by Landlord at Tenant’s expense, and Tenant shall reimburse Landlord as Additional Rent for the cost of its submetered consumption based upon Landlord’s average cost of electricity.  Such Additional Rent shall be in addition to Tenant’s obligations pursuant to Section 2A(2) to pay its Proportionate Share of Operating Costs.

 

D.             Water .  Landlord shall furnish hot and cold tap water for drinking and toilet purposes.  Tenant shall pay Landlord for water furnished for any other purpose as Additional Rent at rates fixed by Landlord.  Tenant shall use reasonable efforts not to permit water to be wasted.

 

E.              Janitorial Service .  None.

 

F.              Interruption of Services .  If any of the Building equipment or machinery ceases to function properly for any cause Landlord shall use reasonable diligence to repair the same promptly.  Landlord’s inability to furnish, to any extent, the Project services set forth in this Section 4, or any cessation thereof resulting from any causes, including any entry for repairs pursuant to this Lease, and any renovation, redecoration or rehabilitation of any area of the Building shall not render Landlord liable for damages to either person or property or for interruption or loss to Tenant’s business, nor be construed as an eviction of Tenant, nor work an abatement of any portion of Rent, nor relieve Tenant from fulfillment of any covenant or agreement hereof.  However, in the event that an interruption of the Project services set forth in this Section 4 causes the Premises to be untenantable for a period of at least five (5) consecutive business days, monthly Rent shall thereafter be abated.

 

5.      ALTERATIONS AND REPAIRS.

 

A.             Landlord’s Consent and Conditions .  Tenant shall not make any improvements or alterations to the Premises (the “Work”) without in each instance submitting in advance plans and specifications for the Work to Landlord, and without obtaining Landlord’s prior written consent which shall not be unreasonably withheld or delayed, except that Landlord’s consent shall not be required for interior, nonstructural alterations that do not exceed Five Thousand Dollars ($5,000) in cost per project so long as (a) such Work does not impact the base structural components or systems of the Building and (b) such work will not impact any other tenant’s premises, and (c) such Work is not visible from outside the Premises.  Notwithstanding the foregoing, Landlord may withhold its consent in its sole discretion for any Work which (a) impacts the base structural components or the Building systems, (b) impacts any other tenant’s premises, or (c) is visible from outside the Premises.  All improvements or alterations greater than Five Thousand Dollars ($5,000) shall be performed by a contractor approved in writing by Landlord prior to commencing such construction, such approval not being unreasonably withheld, conditioned or delayed.

 

Tenant shall reimburse Landlord for actual costs incurred for review of the plans and all other items submitted by Tenant.  Tenant shall pay for the cost of all Work as and when such payment is first due.  All Work shall become the property of Landlord upon its installation, except for Tenant’s

 

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trade fixtures and for items which Landlord requires Tenant to remove at Tenant’s cost at the termination of the Lease pursuant to Section 5E.  Notwithstanding the foregoing, unless Tenant is in default under this Lease, Tenant shall retain ownership of any and all telephone systems, computer systems, air filtration systems and other such systems which are installed at the Premises but are reasonably removable.

 

The following requirements shall apply to all Work:

 

(1)            Prior to commencement, Tenant shall furnish to Landlord building permits, certificates of insurance satisfactory to Landlord, and, at Landlord’s request, security for payment of all costs that are incurred by Landlord.

 

(2)            Tenant shall use reasonable efforts to perform all Work so as to maintain peace and harmony among other contractors serving the Project and shall avoid interference with other work to be performed or services to be rendered in the Project.

 

(3)            The Work shall be performed in a good and workmanlike manner, meeting the standard for construction and quality of materials in the Building, and shall comply with all insurance requirements and all applicable governmental laws, ordinances and regulations (“Governmental Requirements”).

 

(4)            Tenant shall use reasonable efforts to perform all Work so as to minimize or prevent disruption to other tenants, and Tenant shall comply with all reasonable requests of Landlord in response to complaints from other tenants.

 

(5)            Tenant shall perform all Work in compliance with Landlord’s “Policies, Rules and Procedures for Construction Projects” in effect at the time the Work is performed, provided that such “Policies, Rules and Procedures for Construction Projects” are provided in writing to Tenant at least thirty (30) days prior to initiation of such Work.

 

(6)            Tenant shall permit Landlord to supervise all Work.  Landlord may charge a supervisory fee not to exceed fifteen percent (15%) of labor, material, and all other costs of the Work, if Landlord’s employees or contractors perform the Work.

 

(7)            Upon completion, Tenant shall furnish Landlord with contractor’s affidavits and full and final statutory waivers of liens, as-built plans and specifications, and receipted bills covering all labor and materials, and all other close-out documentation required in Landlord’s “Policies, Rules and Procedures for Construction Projects” which Tenant acknowledges has been delivered to Tenant with this Lease.

 

B.     Damage to Systems .  If any part of the mechanical, electrical or other systems in the Premises are damaged, Tenant shall promptly notify Landlord, and Landlord shall repair such damage.  Landlord may also at any reasonable time make any repairs or alterations which Landlord deems necessary for the safety or protection of the Project, or which Landlord is required to make by any court or pursuant to any Governmental Requirement.  Tenant shall at its expense make all other repairs necessary to keep the Premises, and Tenant’s fixtures and personal property, in good order, condition and repair; to the extent Tenant fails to do so after notification in writing and a reasonable period thereafter to cure, Landlord may make such repairs itself.  The cost of any repairs made by Landlord on account of Tenant’s default, or on account of the misuse or neglect by Tenant or its invitees, contractors or agents anywhere in the Project, shall become Additional Rent payable by Tenant on demand unless such invitees, contractors or agents are employees or agents or Landlord in which case such costs shall be waived.

 

C.     No Liens .  Tenant has no authority to cause or permit any lien or encumbrance of any kind to affect Landlord’s interest in the Project; any such lien or encumbrance shall attach to

 

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Tenant’s interest only.  If any mechanic’s lien is filed or claim of lien made for work or materials furnished to Tenant, then Tenant shall at its expense within ten (10) days thereafter either discharge or contest the lien or claim.  If Tenant contests the lien or claim, then Tenant shall (i) within such ten (10) day period, provide Landlord adequate security for the lien or claim, (ii) promptly contest the lien or claim in good faith by appropriate proceedings that operate to stay its enforcement, and (iii) pay promptly any final adverse judgment entered in any such proceeding.  If Tenant does not comply with these requirements, Landlord may discharge the lien or claim, and the amount paid, as well as reasonable attorney’s fees and other reasonable expenses incurred by Landlord, shall become Additional Rent payable by Tenant on demand.

 

D.             Ownership of Improvements .  All Work as defined in this Section 5, and all partitions, hardware, equipment, machinery, and all other improvements and all fixtures except trade fixtures, constructed in the Premises by either Landlord or Tenant (collectively, “Additions”), shall become Landlord’s property upon installation without compensation to Tenant, unless Landlord consents otherwise in writing prior to installation.  At Landlord’s option, all Additions will either be (a) surrendered to Landlord with the Premises at the termination of the Lease or of Tenant’s right to possession, or (b) removed in accordance with Subsection 5E below (unless Landlord at the time it gives its consent to the performance of such construction expressly waives in writing the right to require such removal).

 

E.              Removal at Termination .  Upon the termination of this Lease or Tenant’s right of possession, Tenant shall remove from the Project its trade fixtures, furniture, moveable equipment and other personal property, any Additions which Landlord elects shall be removed by Tenant pursuant to Section 5D, and any Additions to any portion of the Project other than the Premises.  Tenant shall repair all damage caused by the installation or removal of any of the foregoing items.  If Tenant does not timely remove such property, then Tenant shall be conclusively presumed to have, at Landlord’s election (i) conveyed such property to Landlord without compensation or (ii) abandoned such property, and Landlord may dispose of or store any part thereof in any manner at Tenant’s sole cost, without waiving Landlord’s right to claim from Tenant all expenses arising out of Tenant’s failure to remove the property, and without liability to Tenant or any other person.  Landlord shall not be a bailee of any such personal property.  If Landlord elects abandonment, Tenant shall pay to Landlord, upon demand, any reasonable expenses incurred for disposition.

 

6.      USE OF PREMISES.

 

Tenant shall use the Premises only for general office purposes.  Tenant shall not allow any use of the Premises which will negatively affect the cost of coverage of Landlord’s insurance on the Project.  Tenant shall not allow any inflammable or explosive liquids or materials to be kept on the Premises.  Tenant shall not allow any use of the Premises which would cause the value or utility of any part of the Premises to diminish or would interfere with any other tenant or with the operation of the Project by Landlord.  Tenant shall not permit any nuisance or waste upon the Premises, or allow any offensive noise or odor in or around the Premises.

 

If any governmental authority deems the Premises to be a “place of public accommodation” under the Americans with Disabilities Act or any other comparable law as a result of Tenant’s use, then Tenant shall either modify its use and cause such authority to rescind its designation or be responsible for any alterations, structural or otherwise, required to be made to the Building or the Premises under such laws.  Landlord represents to Tenant that, to Landlord’s commercially reasonable knowledge, on the Commencement Date the Project will comply with applicable building codes, including the Americans with Disabilities Act.

 

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