DEED OF LEASE FOR OFFICE SPACE

Exhibit 10.3

 

SUNRISE TECHNOLOGY PARK

 

DEED OF LEASE

FOR

OFFICE SPACE

 

TABLE OF CONTENTS

 

SUNRISE TECHNOLOGY PARK

 

DEED OF LEASE

 

THIS DEED OF LEASE (the “Lease” is made and entered into this 30 ^th day of April, 2002, by and between STEVENS CREEK ASSOCIATES, a California general partnership d/b/a TRIZECHAHN SUNRISE TECH PARK MANAGEMENT (“Landlord”) and LEARNING TREE INTERNATIONAL USA, INC., a Delaware corporation (“Tenant”).

 

In consideration of the Rent hereinafter reserved and the agreements hereinafter set forth, Landlord and Tenant mutually agree as follows:

 

1.	DEFINITIONS.

 

Except as otherwise expressly provided or unless the context otherwise requires, the following terms shall have the meanings assigned to them in this Section:

 

A. Alterations: Any improvements, alterations, fixed decorations or modifications, structural or otherwise, to the Premises, the Building or the Land, as defined below, including but not limited to the installation or modification of carpeting, partitions, counters, doors, air conditioning ducts, plumbing, piping, lighting fixtures, wiring, hardware, locks, ceilings and window and wall coverings.

 

B. Building: The building located at 12345 Sunrise Valley Drive, known as Building II in Reston, Virginia, in the Park (as hereinafter defined) in which the Premises are located. Except as expressly indicated otherwise, the term “Building” shall include all portions of said building, including but not limited to the Premises and the common areas of said building.

 

C. Consumer Price Index (Regular and Base): [Intentionally Omitted]

 

D. Default Rate: That rate of interest which is five (5) percentage points above the annual rate of interest which is publicly announced by Bank of America or its successor entity, if applicable (“Bank of America”), from time to time as its “prime” rate of interest, irrespective of whether such rate is the lowest rate of interest charged by Bank of America to commercial borrowers. In the event Bank of America ceases to announce such a prime rate of interest, Landlord, in Landlord’s reasonable discretion, shall designate the prime rate of interest by another bank located in the Washington, D.C. metropolitan area, which shall be the prime rate of interest used to calculate the default rate.

 

E. Fiscal Year: Each consecutive twelve (12) month period during the Term of this Lease that commences on January 1 and concludes on December 31, inclusive.

 

F. Ground Leases: All ground and other underlying leases from which Landlord’s title to the Land and/or the Building is or may be in the future derived. “Ground Lessors” shall denote those persons and entities holding such ground or underlying leases.

 

G. Holidays: New Year’s Day, President’s Day, Martin Luther King, Jr.’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veteran’s Day, Thanksgiving Day, Christmas Day, and any other holidays designated by an executive order of the President of the United States or by Act of Congress.

 

H. Land: The real estate that supports the Building, and all associated easements.

 

I. Park Common Areas: All areas, improvements, facilities and equipment from time to time designated by Landlord for the common use or benefit of Tenant, other tenants of the Building or the Park and their agents, which areas shall not decrease in a manner which adversely affects Tenant’s use of the Premises, including, without limitation, roadways, entrances and exits, landscaped areas, open areas, park areas, exterior lighting, service drives, loading areas, pedestrian walkways, sidewalks, atriums, courtyards, concourses, stairs, ramps, washrooms, maintenance and utility rooms and closets, exterior utility lines, hallways, lobbies, elevators and their housing and rooms, common window areas, common walls, common ceilings, common trash areas and parking facilities.

 

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J. Tenant’s Work: All work to be performed by Tenant pursuant to Section 3 hereof.

 

K. Lease Commencement Date: The date this Lease commences, as determined pursuant to Subsection 2.A. below.

 

L. Lease Year: That period of twelve (12) consecutive calendar months that commences on the first day of the calendar month in which the Lease Commencement Date occurs, and each consecutive twelve (12) month period thereafter. The earliest such twelve (12) month period shall be referred to as the “first Lease Year,” and each of the following Lease Years shall similarly be numbered for identification purposes.

 

M. Mortgages: All mortgages, deeds of trust and similar security instruments which may now or in the future encumber or otherwise affect the Building or the Land, including mortgages related to both construction and permanent financing. “Mortgagees” shall denote those persons and entities holding such mortgages, deeds of trust and similar security instruments.

 

N. Common Area Maintenance Expenses: The aggregate amount of (1)  all costs and expenses incurred by Landlord during any Fiscal Year in managing, operating and maintaining the Building, as determined by Landlord in accordance with generally accepted accounting practices (“GAAP”). Such costs and expenses shall include but not limited to the cost of insurance; labor costs (including social security taxes and contributions and fringe benefits); charges under maintenance and service contracts (including but not limited to chillers, boilers, elevators, window and security services); the cost of water, gas, sanitary sewer, storm sewer, electricity, and other utilities to the Building; the cost of services to the Building and facilities and systems related thereto (including but not limited to, paving and parking areas, lighting and sound facilities, storm and sanitary drainage systems, utility conduits, systems and ducts, fire protection systems, sprinkler systems, security systems, Building signs, whether or not located on the Land, retaining walls, curbs, gutters, fences, sidewalks, canopies, steps, ramps, grass, trees and shrubbery), which services may include, among other things, ice and snow removal, lighting, cleaning, landscaping, gardening, sweeping, painting, and resurfacing; management fees not to exceed five percent (5%) of the gross rental receipts of the Building, including, but not limited to, Common Area Maintenance Expenses and Real Estate Tax Expenses; business taxes; and license fees solely applicable to Landlord’s or its management agent’s authority to conduct business for the Building, public space and vault rentals and charges; and the cost of any equipment or services provided by Landlord in connection with the servicing, operation, maintenance repair and protection of the Park Common Areas and related exterior appurtenances (whether or not provided on the Lease Commencement Date) and (2)  any and all costs and expenses incurred by Landlord in each calendar year as Landlord’s share of Park Expenses (as hereinafter defined), as such share is allocated to the Building by Landlord or Landlord’s management agent. In determining the proportion of Park Expenses to be allocated to the Building for charges that are incurred for the Building plus parts of the Park other than the Building, Landlord shall make a reasonable allocation based on the proportion of the benefit received by the Building. An allocation based on rentable square footage will not always provide a proper basis for making the allocation. However, when, in Landlord’s reasonable judgment, rentable square footage is the proper basis for determining the allocation, the allocation will be based on the Building comprising 19.93% of the Park on a rentable square foot basis. Park Expenses shall mean any and all costs and expenses for or in connection with (i) managing, operating, maintaining, repairing and replacing those areas, improvements and facilities and equipment from time to time designated by Landlord for the common use or benefit of Tenant, other tenants of the Park, and their agents, including, without limitation, roadways, entrances and exits, landscapes areas, open areas, park areas, exterior lighting, service drives, pedestrian walkways, sidewalks, exterior utility lines and parking areas, (collectively, the “Park Common Areas”), and (ii) providing services designed to serve the tenants of one or more than one of the buildings in the Park, as determined by Landlord in accordance with generally accepted accounting principles regularly applied by Landlord. By way of example, but without limitation, Park Expenses shall include, but not be limited to, the cost of insurance; labor costs (including social security taxes and contributions and fringe benefits); charges under maintenance and service contracts (including, but not limited to, security services); the cost of water, gas, sanitary sewer, storm sewer, electricity, and other utilities to the Park; the cost of services to the Park and facilities and systems related thereto (including, but not limited

 

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to, paving and parking areas, lighting and sound facilities, storm and sanitary drainage systems, utility conduits, systems and ducts, fire protection systems, sprinkler systems, security systems, Park signs, whether or not located on the Land, retaining walls, curbs, gutters, fences, sidewalks, canopies, steps, ramps, grass, trees and shrubbery), which services may include, among other things, ice and snow removal, lighting, cleaning, landscaping, gardening, sweeping, painting, and resurfacing; management fees; business taxes, license fees, public space and vault rentals and charges; assessments imposed by any association now or hereafter established to maintain the Park (including, but not limited to, assessments imposed by any association with respect to the Park); and the cost of any equipment or services provided by Landlord in connection with the servicing, operation, maintenance repair and protection of the Park and related exterior appurtenances (whether or not provided on the Lease Commencement Date). Common Area Maintenance Expenses shall include (A) when referring to the Building, the cost of capital improvements made by Landlord to manage, operate or maintain the Common Areas, and (B) when referring to the Park Common Areas, the cost of capital improvements made by Landlord to manage, operate or maintain the Park Common Areas, in each case, together with any financing charges incurred in connection therewith, provided that such costs shall be amortized over the useful life of the improvements and only the portion attributable to the Fiscal Year shall be included in Common Area Maintenance Expenses for the Fiscal Year; further provided, that such expenditures shall be limited to costs of (a) improvements or Building components (other than Buildings) added to the Park which in Landlord’s reasonable judgment will increase the efficiency of the Building or the Park (i.e., are reasonably anticipated by Landlord to reduce the rate of increase in the Common Area Maintenance Expense which relates to the item which is the subject of the capital expenditure from what it otherwise may have been reasonably anticipated to be in the absence of such capital expenditure) or (b) improvements or replacements which are required to comply with the requirements of any laws, regulations, or insurance or utility company requirements, except for conditions existing in violation thereof on the Lease Commencement Date. Common Area Maintenance Expenses shall not include: (i) Real Estate Tax Expenses, (ii) payments of principal and interest on any Mortgages, (iii) leasing commissions, (iv) costs of preparing, improving or altering any spaces in preparation for occupancy of any new or renewal tenant; (v) costs incurred by Landlord on account of utilities, char services or other services attributable to space occupied by any tenant of the Building, (vi) the cost of damage and repairs necessitated, by the gross negligence or willful misconduct of Landlord or of Landlord’s agents and employees, (vii) any cost or expense incurred by reason of the remediation or clean-up of any contamination of the Building, the Land or the Park, or the soils or ground water underlying the Building, the Land or the Park, by hazardous materials or toxic substances, (viii) overhead costs and profit increment paid to subsidiaries or affiliates of Landlord for services on or for the Building, the Land or the Park, to the extent only that the cost of such services exceed the competitive costs of such services had they not been rendered by a subsidiary or affiliate of the Landlord, (ix) any deductible on Landlord’s insurance policy in excess of Fifty Thousand Dollars ($50,000.00), (x) the costs, including permit, license and inspection costs, incurred with respect to the construction of the Building, (xi) the costs of any services provided to other tenants of the Park which are not made available to Tenant, (xii) legal fees, brokerage commissions, advertising costs, or other related expenses incurred in connection with the leasing of the Building or the Park or associated with monetary disputes with tenants or other occupants of the Building or the Park or with the enforcement of any monetary provision of any lease or defense of Landlord’s title to or interest in the Building or the Park or any part thereof, (xiii) except to the extent allocable to the Park, salaries of personnel to the extent that such personnel perform services other than in connection with the management, operation, repair or maintenance of the Building, the Land or the Park, and (xiv) Landlord’s general corporate overhead and general and administrative expenses not related to the Building, the Land or the Park.

 

O. Park: That certain business park located in Reston, Virginia known as Sunrise Technology Park which as of the date of this Lease contains approximately 312,330 rentable square feet in four (4) buildings, known as Building I (12351-12353 Sunrise Valley Drive), Building II (12343-12347) Sunrise Valley Drive, Building III (12369 Sunrise Valley Drive) and Building IV (12379 Sunrise Valley Drive).

 

P. Premises: 7,396 square feet of rentable area on the ground floor of the Building, known as suite D, as shown on the floor plan attached hereto as Exhibit A. However, the area and plan of the Premises may change in the event of the exercise of any option to expand or contract the Premises set forth in this Lease. The rentable area of the Premises has been determined in accordance with the ANSI/BOMA Z 65.1-1996 Standard Method of Measurement issued June 7, 1996 (the “BOMA Standard Method of Measurement”).

 

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Q. Premises’ Standard Electrical Capacity: The electrical capacity sufficient to support Tenant’s balanced consumption of five (5) watts per square foot of rentable area.

 

R. Real Estate Tax Expenses: All taxes and assessments, general or special, ordinary or extraordinary, and foreseen or unforeseen, that are assessed, levied or imposed upon the Building and/or the Land, under any current or future taxation or assessment system or modification of, or supplement or substitute for, such system, whether or not based on or measured by the receipts or revenues from the Building or the Land (including all taxes and assessments for public improvements or any other purpose and any gross receipts or similar taxes). Real Estate Tax Expenses also shall include all reasonable expenses incurred by Landlord in obtaining or attempting to obtain a reduction of such taxes, rates or assessments, including but not limited to legal fees, but shall not include any taxes on Tenant’s Personal Property or other tenants’ personal property, which taxes are the sole obligation of each tenant. The term Real Estate Taxes shall specifically exclude any capital levy, franchise, transfer or recordation taxes, as well as any other interest or penalty arising by reason of late payment of any Real Estate Taxes, so long as the reason for such late payment was not contributed to by Tenant’s failure to pay any portion of Rent which was due and payable under this Lease. Real Estate Taxes shall also exclude any federal or state tax which is assessed upon Landlord’s net income, i.e. any tax which will directly vary based upon the amount of Landlord’s net income. The foregoing exclusion is not intended to exclude a tax which is based upon an assessment which takes into consideration, among other factors, the Landlord’s net rents or net income, which latter tax shall be included in Real Estate Taxes.

 

S. Rent: All Base Rent and Additional Rent.

 

(1) Base Rent: The amount payable by Tenant pursuant to Subsection 4.A. below.

 

(2) Additional Rent: All sums of money payable by Tenant pursuant to this Lease other than Base Rent.

 

(3) Monthly Rent: A monthly installment of Base Rent and Additional Rent, if any, which shall equal one-twelfth (1/12 ^th ) of Base Rent and Additional Rent then in effect.

 

T. Tenant’s Personal Property: All equipment, improvements, furnishings and/or other property now or hereafter installed or placed in or on the Premises by and at the sole expense of Tenant or with Tenant’s permission (other than any property of Landlord), including the loading dock lift and cabling and wiring installed by Tenant, and which: (i) is removable without damage to the Premises, the Building and the Land, and (ii) is not a replacement of any property of the Landlord, whether such replacement is made at Tenant’s expense or otherwise. Notwithstanding any other provision of this Lease, Tenant’s Personal Property shall not include any improvements or other property installed or placed in or on the Premises as part of Tenant’s Work, whether or not any such property was purchased or installed at Tenant’s expense.

 

U. Tenant’s Share:

 

(1) Tenant’s Share of Common Area Maintenance Expenses shall be that percentage of Common Area Maintenance Expenses which is equal to the number of square feet of rentable area in the Premises divided by the total number of square feet of rentable area in the Premises divided by the total number of square feet of rentable area in the Building (62,261), Tenant’s Share of Common Area Maintenance Expenses is eleven and eighty-eight one-hundredths of one percent (11.88%).

 

(2) Tenant’s Share of Real Estate Tax Expenses shall be that percentage of Real Estate Tax Expenses which is equal to the number of square feet of rentable area in the Premises divided by the total number of square feet of rentable area in the Building and in Building I (*125,461). Tenant’s Share of Real Estate Tax Expenses is five and ninety-one hundredths of one percent (5.90%).

 

(3) Tenant’s Share of Common Area Maintenance Expenses and Tenant’s Share of Real Estate Tax Expenses shall change any time the number of square feet of rentable area leased hereunder by Tenant increases or decreases.

 

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V. Unavoidable Delay: Any delay due to strikes, labor disputes, shortages of material, labor or energy, acts of God, governmental restrictions, enemy action, civil commotion, fire, unavoidable casualty or any other causes beyond the control of the Landlord.

 

W. Work Agreement: [Intentionally Omitted.]

 

2.

TERM.

 

A. Term of Lease: The term of this Lease (the “Term”) shall commence on a date (the “Lease Commencement Date”), as defined below, and shall terminate at midnight on the day preceding the fifth (5 ^th ) anniversary of the Lease Commencement Date, or such earlier date on which this Lease is terminated pursuant to the provisions hereof (the “Lease Expiration Date”). The Lease Commencement Date shall be the date on which Landlord delivers possession of the Premises to Tenant following the execution and delivery of this Lease by Landlord, after the execution hereof by Tenant. Landlord hereby leases the Premises to Tenant and Tenant hereby leases the Premises from Landlord for the Term.

 

B. Declarations: If requested by Landlord at any time during the Term, Landlord and Tenant promptly will execute a declaration in the form attached hereto as Exhibit B.

 

C. Effective Date: The rights and obligations set forth in this Lease, except for the obligation to pay Rent and as otherwise specifically provided herein to the contrary, shall become effective on the date of final execution of this Lease.

 

3.	“AS-IS’ CONDITION; TENANT’S WORK.

 

Tenant accepts the Premises in its as-is condition as of the Lease Commencement Date, and Landlord shall have no obligation to make any improvements or alterations to the Premises.

 

Notwithstanding the foregoing, Landlord shall make available for the performance of Tenant’s Work (as hereinafter defined) an allowance (the “Tenant Allowance”) in an amount equal to the product of (a) Nine Dollars ($9.00) multiplied by (b) the number of square feet of rentable area (7.396 sq/ft) comprising the Premises. Landlord shall pay the Tenant Allowance to Tenant following Tenant’s completion of Tenant’s Work (as hereinafter defined), (ii) receipted bills or other evidence that the aforesaid invoices have been paid in full, and (iii) waivers or releases of liens from each of Tenant’s contractors, subcontractors and suppliers in connection with the work performed or materials supplied as evidenced by the aforesaid invoices. Notwithstanding the foregoing, after the completion of Tenant’s Work (as hereinafter defined), Tenant shall have the right to have any unused portion of the Tenant Allowance, if any (the “Unused Portion”) credited towards Base Rent following at least thirty (30) days notice to Landlord; provided, however, in no event shall the unused portion exceed an amount equal to the product of (i) Three Dollars ($3.00) multiplied by (ii) the number of rentable square feet comprising the Premises if, and only if, such Unused Portion is requested by Tenant prior to the first (1 ^st ) anniversary of the Lease Commencement Date.

 

Tenant shall improve the Premises in accordance with the Tenant’s Plans (as hereinafter defined). Tenant shall submit to Landlord Tenant’s final plans and specifications for improvements to the Premises (the “Tenant’s Plans”), which shall be subject to Landlord’s prior written approval (the work set forth in the Tenant’s Plans being hereinafter referred to as “Tenant’s Work”), which approval shall not be unreasonably withheld, conditioned or delayed with respect to items which do not affect any of the structural components of the Building or any of the Building’s systems or the exterior aesthetics of the Building. From and after the date of Landlord’s approval of the Tenant’s Plans, any changes to the Tenant’s Plans shall not be binding unless approved in writing by both Landlord and Tenant (which approval shall not be unreasonably withheld, conditioned or delayed with respect to items which do not affect any of the structural components of the Building or any of the Building’s systems or the exterior aesthetic of the Building). Landlord’s approval of the Tenant’s Plans shall constitute approval of Tenant’s design concept only and shall in no event be deemed a representation or warranty by Landlord as to whether the Tenant’s Plans comply with any and all legal requirements applicable to the Tenant’s Plans and Tenant’s Work. Notwithstanding the foregoing, Landlord acknowledges that Tenant shall be installing a loading dock lift, subject to Landlord’s approval of Tenant’s Plans in accordance with the provisions of this Section 3.

 

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In the performance of Tenant’s Work, Tenant shall comply with all applicable laws, codes and regulations. Tenant shall obtain all permits, certificates and other governmental approvals from all governmental entities having jurisdiction thereover which are necessary for the prosecution and completion of Tenant’s Work. Tenant’s Work shall include, but not be limited to, the cost of all permits and governmental inspections, and all architectural and engineering fees.

 

Prior to commencing Tenant’s Work, Tenant shall provide to Landlord the name and address of each contractor and subcontractor which Tenant intends to employ to perform Tenant’s Work, the use of which subcontractors and contractors shall be subject to Landlord’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed if (1) the contractor or subcontractor is properly licensed, (2) Landlord has had no prior experience with such contractor or subcontractor which was unsatisfactory to Landlord, (3) Landlord knows of no prior unsatisfactory experience that a third party has had with such contractor or subcontractor and (4) the contractor is otherwise satisfactory to Landlord in its reasonable discretion. Prior to the commencement of any of Tenant’s Work, Tenant shall deliver to Landlord, with respect to each contractor and subcontractor which Tenant intends to employ to perform any of Tenant’s Work, a certificate of insurance from each such contractor or subcontractor specifying Landlord as a named insured and evidencing that each such contractor or subcontractor has obtained the following insurance coverages:

 

(A) Commercial comprehensive general liability insurance, on a standard IS0 form or its equivalent, which shall include independent contractor’s liability coverage, contractual liability coverage, products and completed operations coverage, and a “per project” endorsement, to afford protection, with limits for each occurrence, of not less than Two Million Dollars ($2,000,000) combined single limit with respect to bodily injury and property damage;

 

(B) Comprehensive automobile liability insurance for owned, non-owned, and hired vehicles with limits for each occurrence of not less than One Million Dollars ($1,000,000) with respect to bodily injury or death and One Million Dollars ($1,000,000) with respect to property damage; and

 

(C) Worker’s compensation and employer’s liability insurance inform and amounts required by law.

 

Said contractors and subcontractors shall also comply with other reasonable industry requirements of Landlord.

 

4.

RENT.

 

From and after the Lease Commencement Date, Tenant shall pay to Landlord such Base Rent and Additional Rent as are set forth in this Section 4 and in Section 5 below.

 

A. Base Rent: Base Rent shall equal One Hundred Three Thousand Five Hundred Forty-Four Dollars ($103,544.00) per annum. Tenant shall pay Base Rent to Landlord in equal monthly installments of Eight Thousand Six Hundred Twenty-Eight and 67/100 Dollars ($8,628.67) (“Monthly Base Rent”) in advance on the first day of each calendar month during the Term, without notice, except that the first monthly installment of Base Rent shall be paid upon execution of this Lease. If the Lease Commencement Date occurs on a date other than the first day of a calendar month Tenant shall receive a credit equal to the Monthly Base Rent multiplied by the number of days in said calendar month prior to the Lease Commencement Date and divided by the number of days in such month, which credit shall be applied toward the installment of Monthly Base Rent next due hereunder. If the Lease Expiration Date occurs after the expiration of the last numbered Lease Year set forth above in this Section 4.A. for which an amount of Monthly Base Rent is specified, then Monthly Base Rent shall continue to be payable by Tenant at such rate for each month or portion of a month thereafter which is prior to the Lease Expiration Date.

 

B. Payment: All Base Rent and Additional Rent due and payable to Landlord under this Lease shall be made payable to Stevens Creek Associates and delivered to Stevens Creek Associates at Bank of America, P.O. Box #631571, Baltimore, MD 21263-1571. Payments of Rent (other than in cash), if initially dishonored, shall not be considered rendered until ultimately honored as cash by Landlord’s depository. Except as expressly set forth otherwise in this Lease, Tenant will pay all Rent to Landlord without demand, deduction, set-off or counter-claim.

 

C. Late Fee: If Tenant fails to make any payment of Rent on or before the date when payment is due, then Tenant also shall pay to Landlord a late fee equal to five percent (5%) of the amount that is past due for each month or part thereof until such Rent is fully paid. Said late fee shall be deemed reimbursement to Landlord for its costs of carrying and processing Tenant’s delinquent account. Acceptance by Landlord of said late fee shall not waive or release any other rights or remedies to which Landlord may be entitled on account of such late payment.

 

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D. Arbitration: Any statement provided to Tenant by Landlord pursuant to Section 5 below shall be conclusive and binding upon Tenant unless, within ninety (90) days after receipt thereof, Tenant notifies Landlord of the respects in which the statement is claimed to be incorrect. Unless otherwise mutually agreed, any such dispute shall be determined by arbitration in the jurisdiction in which the Premises are located, in accordance with the then current commercial rules of the American Arbitration Association. The costs of the arbitration shall be divided equally between Landlord and Tenant, except that each party shall bear the cost of its own legal fees unless the arbitration results in a determination that Landlord’s statement contained a discrepancy of less than five percent (5%) in Landlord’s favor, in which event Tenant shall bear all costs incurred in connection with such arbitration, including, without limitation, legal fees, unless (i) the arbitration results in a determination that Landlord’s statement contained a discrepancy of at least five percent (5%) in Landlord’s favor, in which event Landlord shall bear all costs incurred in connection with such arbitration, including, without limitation, reasonable legal fees. Pending determination of any dispute, Tenant shall pay all amounts due pursuant to the disputed statement, but such payments shall be without prejudice to Tenant’s position. Upon at least fifteen (15) days notice to Landlord, Tenant shall have reasonable access during normal business hours and at Tenant’s expense, to appropriate books and records of Landlord relating to the amount of expenses covered by the disputed statement, for the purpose of verifying the statement. Any such review shall be made only by Tenant’s employees and/or by an auditor hired by Tenant who is a Certified Public Accountant and who is employed on other than a contingent fee basis.

 

5.	ADDITIONAL RENT.

 

A. To Cover Consumer Price Index Increases: [Intentionally omitted]

 

B. To Cover Common Area Maintenance Expenses and Real Estate Tax Expenses: In addition to all other Rent set forth herein, for each Fiscal Year, Tenant shall pay to Landlord as Additional Rent an amount equal to the sum of Tenant’s Share of Common Area Maintenance Expenses and Tenant’s Share of Real Estate Tax Expenses; provided, however, that for the Fiscal Years during which the Term begins, Tenant’s Share of the aforesaid sum shall be prorated based upon the Lease Commencement Date and for the Fiscal Year during which the Term ends, Tenant’s Share shall be prorated based upon the Lease Expiration Date

 

C. Statements:

 

(1) [Intentionally omitted.]

 

(2) For each Fiscal Year, Landlord shall deliver to Tenant a statement estimating Tenant’s Share of Common Area Maintenance Expenses and Tenant’s Share of Real Estate Tax Expenses for such Fiscal Year, which Tenant shall pay in equal monthly installments in advance on the first day of each calendar month during each Fiscal Year. Tenant shall continue to pay such estimated Tenant’s Share of Common Area Maintenance Expenses and Tenant’s Share of Real Estate Tax Expenses until Tenant receives the next such statement from Landlord, at which time Tenant shall commence making monthly payments pursuant to Landlord’s new statement. With the first payment of Monthly Base Rent which is due at least fifteen (15) days after Tenant’s receipt of a statement from Landlord specifying estimated Tenant’s Share of Common Area Maintenance Expenses and Tenant’s Share of Real Estate Tax Expenses payable during the Fiscal Year, Tenant shall pay the difference between its monthly share of such sums for the preceding months of the Fiscal Year and the monthly installments which Tenant has actually paid for said preceding months.

 

D. Retroactive Adjustments: After the end of each Fiscal Year, Landlord shall determine and shall provide to Tenant a statement of Tenant’s Share of Common Area Maintenance Expenses and Tenant’s Share of Real Estate Tax Expenses for the Fiscal Year. Within thirty (30) days after delivery of any such statement, Tenant shall pay to Landlord any deficiency between the amount shown as Tenant’s Share of Common Area Maintenance Expenses and Tenant’s Share of Real Estate Tax Expenses for the Fiscal Year and the estimated payments made by Tenant. Tenant shall be credited with any excess estimated payments toward payments by Tenant of its share of estimated Tenant’s Share of Common Area Maintenance Expenses and Tenant’s Share of Real Estate Tax Expenses, or if the Term of this Lease has expired or been terminated other than because of a Default by Tenant, Landlord shall pay the amount of any such excess estimated payments to Tenant within sixty (60) days after the later of (i) the expiration or termination of the Term or (ii) the date on which Tenant cures all defaults under this Lease.

 

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E. Change In or Contest of Taxes: In the event of any change by any taxing body in the period or manner in which any of the Real Estate Tax Expenses are levied, assessed or imposed, Landlord shall have the right, in its sole discretion, to make appropriate adjustments with respect to computing increases in Real Estate Tax Expenses. Real Estate Tax Expenses which are being contested by Landlord shall be included in computing Tenant’s Share of Real Estate Tax Expenses under this Section, but if Tenant shall have paid Rent on account of contested Real Estate Tax Expenses and Landlord thereafter receives a refund of such taxes, Tenant shall receive a credit toward subsequent estimated payments in an amount equal to Tenant’s Share of such refund, or if the Term of this Lease has expired or been terminated other than because of a Default by Tenant, Landlord shall pay the amount of any such excess estimated payments to Tenant within thirty (30) days after the later of (i) the expiration or termination of the Term or (ii) the date on which Tenant cures all defaults under this Lease.

 

F. Sales, Use or Other Taxes: If during the Term any governmental authority having jurisdiction over the Building or the Land levies, assesses or imposes any tax on Landlord, the Premises, the Building, the Land or the Rent payable hereunder, in the nature of a sales tax, use tax or any tax except (i) taxes on Landlord’s income, (ii) estate or inheritance taxes, or (iii) Real Estate Tax Expenses, then Tenant shall pay its proportionate share to Landlord within fifteen (15) days after receipt by Tenant of notice of the amount of such tax.

 

6.

USE.

 

A. Permitted Use: Tenant shall use and occupy the Premises solely for computer maintenance, software installation, related storage and office use and administrative activities directly related thereto and for no other purpose.

 

B. Legal and Other Restrictions of Tenant’s Use: In its use of the Premises, Tenant shall comply with all present and future laws, regulations (including but not limited to fire and zoning regulations) and ordinances of all other public and quasi-public agencies having jurisdiction over the Land or the Building. Tenant shall not use the Park, the Land, the Building or use or occupy the Premises for any unlawful, disorderly or hazardous purposes or in a manner which will interfere with the rights of Landlord, other tenants or their invitees or in any way injure or annoy any of them.

 

7.	CARE OF PREMISES.

 

Tenant shall at its expense keep the Premises (including all improvements, fixtures and other property located therein) in a neat and clean condition and in good order and repair, and will suffer no waste or injury thereto. Tenant shall surrender the Premises at the end of the Term in as good order and condition as they were in on the Lease Commencement Date, ordinary wear and tear excepted. Notwithstanding the foregoing, Landlord shall use diligent efforts to maintain and repair in good and safe order and condition throughout the Term of this Lease all structural portions of the Premises (including exterior walls, load bearing columns and floor slab) and the portions of the building utility systems (including portions located within the Premises) which do not exclusively serve the Premises, and shall make such repairs (when necessary) thereto as become necessary after-obtaining actual knowledge of the need for such repairs, all costs of which shall be included in Operating Expenses, unless the need for any such maintenance or repair is brought about by any act or omission of Tenant, its agents, employees or invitees, in which event Tenant shall have the obligation to make such structural repairs at its sole cost and expense.

 

8.	ALTERATIONS BY TENANT.

 

A. Making of Alterations; Landlord’s Consent: Tenant shall not make or permit to be made any Alterations without the prior written consent of Landlord both as to whether the Alterations may be made and as to how and when they will be made, which approval shall not be unreasonably withheld, conditioned or delayed with respect to any proposed Alteration which would not affect any of the Building’s operating systems or any of the structural components of the Building. Any Alterations shall be made at Tenant’s expense, by its contractors and subcontractors and in accordance with complete

 

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plans and specifications approved in advance in writing by Landlord, and only after Tenant: (i) has obtained all necessary permits from governmental authorities having jurisdiction and has furnished copies thereof to Landlord, (ii) has submitted to Landlord an architect’s certificate that the Alterations will conform to all applicable laws and regulations, and (iii) has complied with all other requirements reasonably imposed by Landlord, including without limitation any requirements due to the underwriting guidelines of Landlord’s insurance carriers. Landlord’s consent to any Alterations and approval of any plans and specifications constitutes approval of no more than the concept of these Alterations and not a representation or warranty with respect to the quality or functioning of such Alterations, plans and specifications. Tenant shall be and is solely responsible for the Alterations and for the proper integration thereof with the Building, the Building’s systems and existing conditions. Landlord shall have the right, but not the obligation, to supervise the making of any Alterations. If any Alterations are made without the prior written consent of Landlord, or which do not conform to plans and specifications approved by Landlord or to other conditions imposed by Landlord pursuant to this Section, Landlord may, in its sole discretion, correct or remove such Alterations at Tenant’s expense. Following completion of any Alterations, at Landlord’s request, Tenant either shall deliver to Landlord a complete set of “as built” plans showing the Alterations or shall reimburse Landlord for any expense incurred by Landlord in causing the Building plans to be modified to reflect the Alterations.

 

B. No Liens: Tenant shall take all necessary steps to ensure that no mechanic’s or materialmen’s liens are filed against the Premises, the Building or the Land as a result of any Alterations made by the Tenant. If any mechanic’s lien is filed, Tenant shall discharge the lien within ten (10) business days thereafter, at Tenant’s expense, by paying off or bonding the lien.

 

9.	EQUIPMENT.

 

A. Permitted Equipment: Tenant shall not install or operate in the Premises any equipment or other machinery that, in the aggregate, will cause Tenant to use more than the Premises’ Standard Electrical Capacity, without: (i) obtaining the prior written consent of Landlord, who may condition its consent upon the payment by Tenant of Additional Rent for additional consumption of utilities, additional wiring or other expenses resulting therefrom, (ii) securing all necessary permits from governmental authorities and utility companies and furnishing copies thereof to Landlord, and (iii) complying with all other requirements reasonably imposed by Landlord. Prior to the Lease Commencement Date, Tenant shall provide Landlord with a list of all equipment that Tenant intends to install or operate in the Premises which operate on more than one hundred twenty (120) volts, and Tenant shall provide Landlord with an updated list of such equipment prior to the installation or use of any additional equipment which operates on more than one hundred twenty (120) volts. Tenant shall not install any equipment or machinery which may necessitate any changes, replacements or additions to or material changes in the use of the water, heating, plumbing, air-conditioning or electrical systems of the Building without obtaining the prior written consent of Landlord, who may withhold its consent in its absolute discretion.

 

B. Payment For Excess Utility Usage: If Tenant’s equipment shall result in electrical demand in excess of the Premises’ Standard Electrical Capacity, Landlord shall have the right, in its sole discretion, to install additional transformers, distribution panels, wiring and other applicable equipment at the expense of Tenant. None of the equipment so installed shall be deemed to be Tenant’s Personal Property. If at any time during the Term, Tenant’s connected electrical load from its use of equipment and fixtures (including incandescent lighting and power), as estimated by Landlord, exceeds the Premises’ Standard Electrical Capacity, then Landlord may, at its option: (i) install separate electrical meter(s) for the Premises, or (ii) cause a survey to be made by an independent electrical engineer or consulting firm to determine the amount of electricity consumed by Tenant beyond the Premises’ Standard Electrical Capacity. Tenant shall reimburse Landlord for the cost of the installation of said meter(s) or completion of said meter(s) or survey, and shall pay as Additional Rent the cost of any electricity in excess of an average of the Premises Standard Electrical Capacity, at the rate charged by the utility company providing such electricity, assuming continuous business hours, within ten (10) days after receipt of any bill therefor from Landlord.

 

C. Noise; Vibration; Floor Load: Business machines and equipment belonging to Tenant, which cause noise or vibration that may be transmitted to any part of the Building to such a degree as to be objectionable to Landlord or to any tenant of the Building, shall be installed and maintained by Tenant at Tenant’s expense on devices that eliminate the

 

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noise and vibration. Tenant shall not place any load upon the floor of the Premises which exceeds the per square foot load the floor was designed to carry (eighty (80) pounds per square foot for live loads and twenty (20) pounds per square foot for dead loads).

 

10.	OWNERSHIP AND REMOVAL OF PROPERTY.

 

A. Landlord’s Property: Any Alterations and other improvements and any equipment, machinery, furnishings and other property, installed or located in the Premises, the Building or the Land by or on behalf of Landlord or Tenant, except for Tenant’s Personal Property: (i) shall immediately become the property of Landlord, and (ii) shall be surrendered to Landlord with the Premises as a part thereof at the end of the Term; provided, however, that if Landlord requests Tenant to remove any Alterations installed by or on behalf of Tenant, Tenant shall cause the same to be removed at Tenant’s expense on or before the Lease Expiration Date, or shall reimburse Landlord for the cost of such removal, as elected by Landlord (unless Landlord expressly waives in writing the right to require such removal at the time Landlord give its consent to the making of such Alterations). Landlord and Tenant acknowledge that Tenant shall install a loading lift and cabling for use by the Tenant in the Premises. Notwithstanding the foregoing, Tenant, upon submitting its request to Landlord to make Alterations, shall have the right to request therein that Landlord specify whether and to what extent Landlord will require Tenant to remove the Alterations in question at the end of the Term, provided that Tenant refers therein to the provisions of this Section 10.A. If Tenant shall fail to request such information in its request to make any Alterations, such right shall be deemed null and void as to the Alterations in question, and all such Alterations shall thereafter be subject to the exercise of Landlord’s rights and to Tenant’s obligations set forth in the first sentence of this Section 10.A. If Tenant submits its request for such information in accordance with the foregoing provisions and Landlord consents to the Alterations requested, Landlord shall, together with its consent, specify in writing whether and to what extent it will require Tenant to remove the Alterations in question at the end of the Term, and if Landlord fails so to specify, Tenant shall have no further obligation to remove the Alterations which were the subject of Tenant’s request. Notwithstanding anything to the contrary set forth in this Lease, in no event shall Tenant be required to remove any cabling which Tenant installs in the Premises.

 

B. Removal of Property At End of Term: Tenant shall remove all of Tenant’s Personal Property from the Building and the Land on or before the Lease Expiration Date. Any personal property belonging to Tenant or to any other person or entity which is left in the Building or on the Land after the date this Lease is terminated for any reason shall be deemed to have been abandoned, unless Landlord has granted Tenant written permission to temporarily leave particular items of personal property in the Premises following termination of this Lease for any reason, which consent may be granted or denied in Landlord’s sole and absolute discretion. In such event, Landlord shall have the right to store such property at Tenant’s sole cost and/or to dispose of it in whatever manner Landlord considers appropriate, without waiving its right to claim from Tenant all expenses and damages caused by Tenant’s failure to remove such property, and Tenant and any other person or entity shall have no right to compensation from or any other claim against Landlord as a result.

 

11.	LANDLORD’S ACCESS TO PREMISES.

 

Upon such notice as is reasonable under the circumstances, which notice may be given orally, and which notice shall not be required in the event of an emergency, Landlord may at any reasonable time enter the Premises to examine them, to make alterations or repairs thereto or for any other purposes which Landlord considers necessary or advisable; however, in the case of any emergency, Landlord and its agents may enter the Premises at any time and in any manner. Tenant shall allow the Premises to be exhibited by Landlord: (i) at any reasonable time to representatives of lending institutions or to prospective purchasers of the Building, and (ii) at any reasonable time during the last twelve (12) months of the Term to persons who may be interested in leasing the Premises. Landlord reserves the right and shall be permitted reasonable access to the Premises to install facilities within and through the Premises and to install and service any systems deemed advisable by Landlord to provide services or utilities to any tenant of the Building. Landlord agrees that, in the exercise of its rights pursuant to this Section 11, Landlord shall not unreasonably interfere with Tenant’s business operations in the Premises.

 

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12.	SERVICES AND UTILITIES.

 

A. Utilities Provided: Landlord has provided, at its expense, for the separate metering of all utilities to be supplied to the Premises, and Tenant shall contract directly with the appropriate public utility companies for the supplying of all such utilities to the Premises. Tenant shall pay all submetered utility charges to the appropriate utilities, as and when due.

 

B. Right to Discontinue: [Intentionally omitted.]

 

C. No Liability: Landlord shall have no liability to Tenant or others based on any failure by Landlord to furnish any utilities and services to be furnished by Landlord hereunder, due to Unavoidable Delays, repair or maintenance work or any other reason, and such failure shall neither render Landlord liable for damages to either person or property, nor be construed as an eviction of Tenant, nor cause a diminution or abatement of Rent nor relieve Tenant of any of Tenant’s obligations hereunder.

 

D. Conservation: Tenant hereby agrees to comply with all energy conservation procedures, controls and requirements instituted by Landlord pursuant to any government regulations or otherwise, including but not limited to controls on the permitted range of temperatures, the volume of energy consumption or the hours of operation of the Building. Institution by Landlord of such controls and requirements shall not entitle Tenant to terminate this Lease or to an abatement of any Rent payable hereunder.

 

E. Recycling: Without limiting the foregoing, Tenant covenants and agrees, at its sole cost and expense, to comply with all present and future laws, orders, and regulations of the jurisdiction in which the Building is located and of the federal, municipal, and local governments, departments, commissions, agencies and boards having jurisdiction over the Building to the extent that they or this Lease impose on Tenant duties and responsibilities regarding the collection, sorting, separation, and recycling of trash. Tenant shall pay all costs, expenses, fines, penalties, or damages that may be imposed on Landlord or Tenant by reason of Tenant’s failure to comply with the provisions of this Section 12.E., and, at Tenant’s sole cost and expense, shall indemnify, defend and hold Landlord harmless (including legal fees and expenses) from and against any actions, claims, and suits arising from such noncompliance, using counsel reasonably satisfactory to Landlord.

 

F. HVAC System; Landlord’s Covenants: Landlord hereby covenants that the existing heating, air conditioning and ventilation system (collectively, the “HVAC System”) serving the Premises shall be in good working order as of the Lease Commencement Date. Landlord shall be responsible, at Landlord’s sole cost and expense, for making any necessary repairs or replacements to the HVAC System, as determined by Landlord in its reasonable discretion, during the first three (3) full calendar months of the Term, and, during the next nine (9) full calendar months of the Term (such twelve (12) month period being hereinafter referred to as the “Landlord’s HVAC Maintenance Period”), Tenant