Building Lease – Digimarc Corp.
FULL SERVICE LEASE
Date: March 22, 2004
Lessor: PS Business Parks, L.P., a California Limited Partnership
Lessee: Digimarc Corporation, a Delaware Corporation
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1. |
Lease Terms |
1.01 The Premises is the Building whose address is 9405 SW Gemini
Drive, Beaverton, OR 97008. The Premises contains approximately
46,083 rentable square feet and is shown on Exhibit
“A-1.” The Building contains approximately 46,083
rentable square feet and is shown on Exhibit “A-2”. The Project is depicted on
Exhibit “A-3” and contains approximately 117,870
rentable square feet. The Property is depicted on Exhibit “A-4” and
is commonly referred to as Creekside Corporate Park and
contains approximately 584,493 rentable square feet.
1.02 Lessee153s Notice Address: Lessee153s Notice Address is the address of the
Premises as stated in Paragraph 1.01 above.
1.03 Lessor153s Notice Address: 15455 NW Greenbrier Parkway, Suite
245, Beaverton, OR 97006.
1.04 Lessee153s Permitted Use: Lessee shall use the Premises only for the
following purpose(s) and for no other purpose whatsoever: General office
uses.
1.05 Lease Term: The Lease Term commences on September 1,
2004 or such other date as is determined by the provisions of this
Lease (the “Commencement Date”) and ends on the final day of the
84th full calendar month thereafter.
1.06 Base Rent: Base Rent shall be paid monthly in the amounts specified
below:
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$ |
0.00 |
Beginning September 1, 2004 |
Ending February 28, 2005 |
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|
$ |
46,667 |
Beginning March 1, 2005 |
Ending August 31, 2005 |
||
|
$ |
63,287 |
Beginning September 1, 2005 |
Ending August 31, 2006 |
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|
$ |
65,169 |
Beginning September 1, 2006 |
Ending August 31, 2007 |
||
|
$ |
67,128 |
Beginning September 1, 2007 |
Ending August 31, 2008 |
||
|
$ |
69,125 |
Beginning September 1, 2008 |
Ending August 31, 2009 |
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|
$ |
71,237 |
Beginning September 1, 2009 |
Ending August 31, 2010 |
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$ |
73,349 |
Beginning September 1, 2010 |
Ending August 31, 2011 |
1.07 Security Deposit: $ 75,000.00
1.08 Initial Monthly Rent Charges: Base Rent $46,667.00.
1.09 Proportionate Share: Lessee153s Proportionate Share of the Property, which
represents the approximate Proportionate Share of the Premises to the Property,
is 7.8842%. Lessee153s Proportionate Share of the Project,
which represents the approximate Proportionate Share of the Premises to the
Project, is 39.0964%. Lessee153s Proportionate Share of
the Building within which the Premises is located, which represents the
approximate Proportionate Share of the Premises to the Building, is
100%. Proportionate Share may be adjusted by Lessor
during the Lease Term if the size of the Project, Premises or Building changes.
1.10 Expense Base Year: 2005.
1.11 Broker(s): Hume Myers Tenant Counsel L.L.C. for Lessee; Grubb
& Ellis for Lessor.
1.12 Automatic Payments: Unless Lessor otherwise directs in writing, all
payments of Base Rent and the monthly estimated payments of Lessee153s
Proportionate Share of Operating Expenses shall be made by electronic payment.
Lessee shall execute such necessary and reasonable documents, provide
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such necessary and reasonable information, and follow such necessary and
reasonable procedures as are requested by Lessor from time to time to facilitate
such payments. If, by reason of insufficient funds or other reason, any such
payment is not fully made and received, such event shall be deemed a failure of
Lessee to make the required payment. Payment shall be deemed made by Lessee on
the date funds are actually received by Lessor; provided, if Lessee is then in
default, Lessor shall have the right to return all or a part of any payment
received within ten (10) business days of receipt, in which event the returned
amount shall be deemed to have not been paid by Lessee or received by Lessor.
Receipt of any funds pursuant to this Paragraph shall not constitute a waiver by
Lessor of any Default by Lessee whether or not such Default is known to Lessor.
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2. |
Lease of Premises |
2.01 Lessor leases to Lessee, and Lessee leases from Lessor, the Premises,
upon the terms of this Lease. The Premises are leased “AS IS” except only for
the improvements, if any, which are to be constructed by Lessor pursuant to
Exhibit “B.” Any such improvements to be constructed by Lessor pursuant to
Exhibit “B” are herein referred to as “Lessor153s Work.” Except as provided
herein, Lessee acknowledges that neither Lessor nor any agent of Lessor has made
any representation or warranty regarding the Premises. The square footages set
forth in this Lease are approximate and agreed. Use of the terms “rentable” and
“usable” is for convenience only and represents Lessor153s interpretation of such
terms. Lessor will deliver the Premises to Lessee with existing plumbing,
electrical, fire sprinkler, lighting, air conditioning, heating and mechanical
systems located in the Premises, if any, in good working condition.
2.02 Lessor153s Work, if any, shall be installed by Lessor in compliance with
all then applicable codes. Lessee, at its sole expense, agrees to comply with
all laws, codes, ordinances and other legal requirements (including covenants
and restrictions) applicable to the Premises (herein “Laws”); provided, however,
that Lessor, in conjunction with the Lessor153s work, shall affect any repairs and
improvements required under any Laws as of the Commencement Date. Lessee agrees
to cause the Premises to comply with all Laws, including by making any changes
to the Premises necessitated by any Lessee activity, including but not limited
to changes required by (a) any Lessee Improvements or Lessee Alterations (as
defined below), or (b) any use of the Premises or Property by Lessee; provided,
Lessor reserves the right to accomplish such changes itself at the expense of
Lessee. If any activity of Lessee necessitates changes to the Project other than
the Premises, then Lessor shall elect that Lessor accomplish the same at the
expense of Lessee or that Lessee accomplish the same at its own expense.
Notwithstanding anything to the contrary herein, Lessee shall not be responsible
for making any structural modifications to the Premises except to the extent
Lessee153s space plan requires structural modifications.
2.03 If for any reason Lessor cannot deliver possession of the Premises three
(3) weeks prior to the estimated Commencement Date of the Lease Term, Lessor
will not be subject to any liability nor will the validity of this Lease be
affected in any manner. Rather, the Commencement Date shall be delayed until
three (3) weeks after delivery of possession to allow Lessee to fixturize the
Premises in which event the expiration date of the Lease Term shall be extended
to include the same number of full calendar months as set forth in Paragraph 1
above (plus any partial first month); provided, in the event delivery of
possession is delayed by any act, omission or request of Lessee, then the
Premises shall be deemed to have been delivered (and the Commencement Date shall
occur) on the earlier of the actual date of delivery or the date delivery would
have occurred absent the number of days of such delay attributable to Lessee and
the term shall then be for such number of full calendar months (plus any partial
first month). If for any reason possession of the Premises is not delivered on
the scheduled Commencement Date set forth in Paragraph 1 above, Lessee may a)
receive two (2) days free rent for each day of delay beyond the scheduled
commencement date, and b) terminate this Lease by written notice given after a
forty-five (45) day period beyond the scheduled commencement date but prior to
delivery of possession; provided, such forty-five (45) day period shall be
extended by (a) the number of days of delays attributable to Lessee (including
but not limited to delays in approvals of plans or cost estimates, delays
related to changes in plans requested by Lessee whether or not approved by
Lessor, delays caused by Lessee installing any “Lessee Improvements,” delays
caused by other early entry or early occupancy by Lessee, and/or other delays
attributable to Lessee), plus (b) the number of days of delays caused by events
beyond the reasonable control of Lessor (including but not limited to fire,
earthquake, other casualty, inclement weather, acts of God, shortages of labor
or material, lead times on ordered items, strike, acts or omissions of
government, and/or delays in governmental permits, inspections or approvals).
Any such termination shall be without liability of Lessor to Lessee. Any such
termination by Lessee shall be Lessee153s sole remedy for delay in delivery of
possession.
2.04 Upon expiration or termination of this Lease, Lessee agrees to return
the Premises to Lessor in the same condition as received by Lessee, normal wear
and tear excepted, with all removal, repair, and restoration duties of Lessee
being fully performed.
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2.05 Upon request made by Lessor following the Commencement Date, Lessee
shall execute and deliver an agreement setting forth the Commencement Date, the
date upon which the Lease Term shall expire, and such other matters regarding
the commencement of this Lease as Lessor shall request. If Lessee, with Lessor153s
prior written consent, occupies the Premises prior to the Commencement Date,
Lessee153s occupancy of the Premises shall be subject to all the provisions of the
Lease. Early occupancy of the Premises shall not advance the expiration date of
the Lease.
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3. |
Base Rent |
On or before the first day of each calendar month of the Lease Term, Lessee
will pay to Lessor the Base Rent for such month. Base Rent for any first partial
month and for the first full calendar month of the Lease Term, is due and
payable upon due date called for in this Lease. Security deposit is due and
payable upon Lease execution. Monthly rent for any partial calendar month will
be prorated. All sums payable by Lessee to Lessor hereunder shall be deemed
rent. Base Rent and all other amounts required to be paid by Lessee hereunder
shall be paid without deduction or offset and without prior notice or demand.
All such amounts shall be paid in lawful money of the United States of America
and shall be paid to Lessor at the address stated herein or to such other
persons or to such other places as Lessor may designate in writing from time to
time. Amounts payable hereunder shall be deemed paid when actually received by
Lessor.
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4. |
Additional Rent |
4.01 Unless otherwise specifically stated in this Lease, any charge payable
by Lessee under this Lease other than Base Rent is called “Additional Rent.” The
term “rent” whenever used in this Lease means Base Rent, Additional Rent and/or
any other monies payable by Lessee under the terms of this Lease.
4.02 “Operating Expenses” as used herein shall include all costs and expenses
related to the ownership, management, operation, maintenance, replacement,
improvement and repair of the Premises, Building, Project and/or Property, or
any part thereof, incurred by Lessor including but not limited to: (1) Property
supplies, materials, labor, equipment, and tools; (2) Lessor-incurred Utility
and Service Costs (as further described in Paragraph 4.03B below), security,
janitorial, trash removal, and all applicable service and maintenance
agreements; (3) Property related legal, accounting, and consulting fees, costs
and expenses, including but not limited to the cost of contests of Real Property
Taxes; (4) Insurance Premiums for all policies deemed reasonably necessary by
Lessor and/or its lenders, and all deductible amounts under such policies (as
further described in Paragraph 4.03C below); (5) costs and expenses of
operating, maintaining, and repairing the Property, including but not limited to
all interior areas and also driving, parking, loading, and other paved or
unpaved areas (including but not limited to, resurfacing and striping and any
snow and ice removal Lessor elects to conduct), landscaped areas (including but
not limited to, tree trimming), building exteriors (including but not limited
to, painting and roof work), signs and directories, and lighting; (6) capital
improvements and replacements (including but not limited to, all financing costs
and interest charges); (7) compensation (including but not limited to, any
payroll taxes, worker153s compensation for employees, and customary employee
benefits) of all persons, including independent contractors, who perform duties,
or render services on behalf of, or in connection with the Property, or any part
thereof, including but not limited to, Property operations, maintenance, repair,
and rehabilitation; (8) Property management fees not exceeding 5% of Annual Base
Rent and the reasonable cost of providing space used by the Property manager;
and (9) Real Property Taxes (as further described in Paragraph 4.03A, below).
All Operating Expenses other than Real Property Taxes, Utility and Service
Costs, and Insurance Premiums, are herein referred to as Common Area Expenses
(CAM). Any increases in CAM expenses shall be limited to a non-cumulative 5% per
year. In addition, in the event Lessor effects any capital improvements or
replacements, the cost of the same shall be amortized over the number of years
equal to the useful life of any such capital improvements or replacements.
4.03A “Real Property Taxes” shall include any fee, license fee, tax, levy,
charge, or assessment (hereinafter individually and/or collectively referred to
as “Tax”) imposed by any authority having the direct or indirect power to tax
and where such Tax is imposed against the Property, or any part thereof, or
Lessor in connection with its ownership or operation of the Property, including
but not limited to: (1) any Tax on rent or Tax against Lessor153s business of
leasing the Property; (2) any Tax by any authority for services or maintenance
provided to the Property, or any part thereof, including but not limited to,
fire protection, streets, sidewalks, and utilities; (3) any Tax on real estate
or personal property levied with respect to the Property, or any part thereof,
and any fixtures and equipment and other property used in connection with the
Property; (4) any Tax based upon a reassessment of the Property due to a change
in ownership or transfer of all or part of Lessor153s interest in the Property;
and, (5) any Tax replacing, substituting for, or in addition to any Tax
previously included in this definition. Real Property Taxes do not include
Lessor153s federal or state net income taxes.
4.03B “Utility and Service Costs” shall include all Lessor incurred utility
and service costs and expenses including but not limited to costs related to
water and plumbing, electricity, gas, lighting, steam, sewer, waste disposal,
and HVAC, and all costs related to plumbing, mechanical, electrical, elevator,
HVAC, and other systems.
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4.03C “Insurance Premiums” shall include all insurance premiums for all
insurance policies maintained by Lessor from time to time related to the
Property.
4.04 Throughout the Lease Term following the Base Year, Lessee will pay as
Additional Rent its Proportionate Share (of the Project and/or Building, as
designated from time to time by Lessor) of the amount by which total Operating
Expenses in each calendar year exceed total Operating Expenses for the Base
Year, subject to the limitation set forth in Section 4.02 above. Estimated
payments shall be made monthly on or before the first day of each calendar month
each in the amount of Lessor153s then current estimate as outlined below. Lessee153s
Proportionate Share will be prorated for partial months. All Operating Expenses
will be adjusted, at the election of Lessor, to reflect 100% occupancy during
any calendar year in which the Project is not fully occupied (in which event
Operating Expenses for the Base Year shall also be so adjusted).
4.05 Lessee153s Proportionate Share of Operating Expenses shall be determined
and paid as follows:
4.05A. Lessee153s Operating Expense estimates: On or about April 1st
of each calendar year, Lessor will provide Lessee with a statement of: (1)
Lessee153s annual share of estimated Operating Expenses in excess of Base Year
Operating Expenses for the then current calendar year; (2) Lessee153s monthly
Operating Expense estimate for the then current year; and, (3) Lessee153s
retroactive estimate correction billing (for the period of January
1st through the date immediately prior to the commencement date of
Lessee153s new monthly Operating Expense estimate) for the difference between
Lessee153s new and previously billed monthly Operating Expense estimates for the
then current year.
4.05B. Lessee153s Proportionate Share of actual annual Operating Expenses: Each
year, Lessor will provide Lessee with a statement reflecting the total Operating
Expenses for the previous calendar year. If the total of Lessee153s Operating
Expense estimates billed for the previous calendar year are less than Lessee153s
Proportionate Share of the actual Operating Expenses in excess of Base Year
Operating Expenses, the statement will indicate the payment amount and date due.
If Lessee has paid more than its Proportionate Share of excess Operating
Expenses for the preceding calendar year, Lessor will credit the overpayment
toward Lessee153s future Operating Expense obligations. Monthly Operating Expense
estimates are due on the 1st of each month and shall commence in the
month specified by Lessor. Lessee153s retroactive estimate correction, and actual
annual Operating Expense charges, if any, shall be due, in full, on the date(s)
specified by Lessor.
4.06 Unless Lessor otherwise elects, Lessee shall pay each Operating Expense
in accordance with Lessee153s Proportionate Share of the Building or Lessee153s
Proportionate Share of the Project, whichever is designated by Lessor. Lessor
shall have the right to make allocations (“Allocations”) to Lessee of any one or
more Operating Expenses on a different basis. Lessor shall have the right to
make any such Allocations in any manner which Lessor deems reasonable (including
use of estimates). For example, if Lessor deems it reasonable to do so, Lessor
shall have the right to elect at any time and from time to time (a) to make any
Allocation of one or more Operating Expenses based upon Lessee153s Proportionate
Share of the Building and to make other Allocations on Lessee153s Proportionate
Share of the Project, (b) to make Allocations of certain Operating Expense items
among less than all lessees and/or other than based upon the respective square
footages of the lessees, (c) to make different Allocations for different
Operating Expenses, and/or (d) to alter an Allocation or the method of
determining an Allocation from time to time. In no event shall Lessor be liable
to Lessee based upon any incorrect or disputed Allocation nor shall Lessee have
any right to terminate this Lease by reason of any such Allocation.
4.07 In the event Lessee wishes to audit any Operating Expense charge, such
an audit shall be limited to an audit of the annual statement delivered under
Paragraph 4.05B above. Such audit shall be performed only if, at the time of the
audit request and at all times thereafter to and during the course of the audit,
Lessee has paid in full all Operating Expenses billed and is not in Default (as
defined in Section 20.02 below). Any audit shall be conducted at a time and
location designated by Lessor. Lessor and Lessee agree that any Lessee audit
must be requested by Lessee by written notice given within six (6) months of the
date that Lessor provides the applicable annual statement under Paragraph 4.05B
above, and must be completed by Lessee within thirty (30) days of its written
notice requesting the audit; if Lessee does not give such written notice within
the period of time allowed, or fails to complete the audit within the time
allowed, Lessee153s right to audit is waived, and the Operating Expenses, as
billed, including all calculations used as the basis for Lessor153s charges
(including any “Allocations” and any applicable Expense Base Year or expense
stop calculations), shall be deemed conclusive and final for all purposes under
this Lease. All calculations by Lessor of Operating Expenses for the Expense
Base Year shall be conclusive and final, and Lessee shall have no right to audit
the same, except only Lessee may audit the same as part of an audit of Operating
Expenses for the first Expense Comparison Year. Any audit shall be conducted
only by Lessee and the CPA then used by Lessee for the preparation of its tax
returns and financial statements; no agent of Lessee employed in connection with
the audit shall be employed on any contingent payment basis. Lessee shall
maintain as strictly confidential, and shall cause its auditor to execute in
favor of Lessor a confidentiality agreement (in form prepared by Lessor)
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regarding, all financial information audited, the results of any such audit,
and the resolution of any disputed issues arising in connection with such audit.
Lessor shall not be bound by the result of any such audit. If the parties do not
agree upon the inclusion or amount of any Operating Expense charged by Lessor,
the sole remedy of Lessee shall be to conduct an audit within the time specified
in this Lease and, if still in disagreement with Lessor, to submit the matter to
arbitration pursuant to Section 27.17 below within thirty (30) days after
completion of the audit to request an adjustment to any disputed Operating
Expense item to cause the same to not exceed the amount that Lessor has the
right to collect hereunder for such item. In no event will this Lease be
terminable nor shall Lessor be liable for damages based upon any disagreement
regarding or adjustment of Operating Expenses.
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5. |
Late Charges |
If any sum payable by Lessee to Lessor is not received by Lessor within five
(5) days after it becomes due, Lessee shall pay a late charge equal to fifty
dollars ($50.00) or five (5%) of the then delinquent amount, whichever is
greater. A fifty dollar ($50.00) handling fee will be paid to Lessor by Lessee
for each bank returned check, and Lessee will be required to make all future
payments to Lessor by wire or electronic transfer or by cashier153s check. The
acceptance of late charges and returned check charges by Lessor will not
constitute a waiver of Lessee153s Default nor any other rights or remedies of
Lessor. Lessee shall not be in default of this Lease the first time in a twelve
(12) consecutive month period that Lessee fails to pay rent when due so long as
Lessee pays such overdue rent within five (5) days of written notice from Lessor
that such overdue amount is due.
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6. |
Security Deposit and Financial Reporting |
6.01 Upon Lessee153s execution of this Lease, Lessee will deposit with Lessor
an initial Security Deposit in the amount specified in Paragraph 1 as security
for Lessee153s full and faithful performance of every provision under this Lease.
Lessor will not be required to keep the Security Deposit separate from its
general funds and has no obligation or liability for payment of interest thereon
(except when required by law). Lessee hereby grants to Lessor a security
interest in the Security Deposit. Lessee will not have the right to apply any
part of the Security Deposit to any amounts payable under the terms of this
Lease nor is it a measure or limitation of Lessor153s damages in event of a
Default by Lessee. If Lessee fails to pay any rent due herein, or otherwise is
in Default of any provision of this Lease, Lessor may, without waiver of the
Default or of any other right or remedy, use, apply or retain all or any portion
of the Security Deposit for the payment of any amount due Lessor or to
compensate Lessor for any loss or damage suffered by Lessee153s Default. Within
five (5) days after written notification by Lessor, Lessee will restore the
Security Deposit to the full amount required under this Lease.
6.02 Within ten (10) days after written request from Lessor but not more
often than annually, Lessee shall deliver to Lessor such financial statements as
Lessor reasonably requests regarding Lessee or any assignee, subtenant, or
guarantor of Lessee. Lessee represents and warrants to Lessor that each
financial statement is a true and accurate statement. Lessor shall use such
statements only for valid business purposes. Lessor shall have the right to make
such financial statements and the other contents of its files available to law
enforcement or other governmental agencies upon request.
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7. |
Use of Premises |
7.01 The Premises will be used and occupied only for Lessee153s Permitted Use.
Lessee will, at its sole expense, comply with all conditions and covenants of
this Lease, and all Laws. Lessee will not use or permit the use of the Premises,
the Property or any part thereof, in a manner that is unlawful, diminishes the
appearance or aesthetic quality of any part of the Property, creates waste or a
nuisance, or causes damage to the Property. Lessee shall not permit any
objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to
emanate from the Premises nor take or permit any other action in the Premises
that would endanger, annoy, or interfere with the operations of, Lessor or any
other tenant of the Project. Lessee shall obtain, at its sole expense, any
permit or other governmental authorization required to operate its business from
the Premises. Any animals, excepting guide dogs, on or about the Property or any
part thereof are expressly prohibited.
7.02 In the event of any excessive trash in or outside the Premises, as
determined by Lessor in its sole discretion, Lessor will have the right to
remove such excess trash, charge all costs and expenses attributable to its
removal to Lessee. Lessee will not cause, maintain or permit any outside storage
on or about the Property without prior written consent by Lessor. In the event
of any unauthorized outside storage by Lessee, Lessor will have the right,
without notice, in addition to such other rights and remedies it may have, to
remove any such storage at the expense of Lessee.
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8. |
Parking |
All parking will comply with the terms and conditions of this Lease and the
parking rules and regulations included in Exhibit “D.” Lessee will have a
non-exclusive privilege to use of one-hundred eighty (180) parking spaces
designated by Lessor for public parking and four (4) designated visitor parking
spaces at the entry to the Premises. Vehicles parked in public parking areas
will be no larger than full-sized passenger automobiles or standard pick-up
trucks. Lessor reserves the right, without notice to Lessee, to tow away at
Lessee153s sole cost and expense any vehicles parked in any parking area for any
continuous period of 24 hours or more, or earlier if Lessor, in its sole
discretion, determines such parking to be a hazard or inconvenience to other
lessees or Lessor, or violates any rules or regulations or posted notices
related to parking. Lessor shall not be responsible for enforcing Lessee153s
parking rights against third parties. From time to time, Lessor reserves the
right, upon written notice to Lessee, to change the location, the availability
and nature of parking spaces, establish reasonable time limits on parking, and,
on an equitable basis, to assign specific spaces with or without charge to
Lessee as Additional Rent. The parking privileges granted to Lessee are personal
to Lessee; Lessee shall not assign or sublet parking privileges.
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9. |
Utilities and Services |
9.01 Subject to the other provisions of this Lease, the following services
are provided.
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A. |
Electricity, water, and elevator service (if elevators presently serve the |
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B. |
Heating and air conditioning are provided 7:00 a.m. to 6:00 p.m. Monday |
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C. |
Five days per week janitorial service, periodic window cleaning, supplies for |
If Lessee uses any utility or service in excess of normal usage levels, as
determined by Lessor in its sole discretion, Lessor shall have the right to
charge Lessee for such excess use and to charge Lessee the cost to separately
meter such use.
9.02 Lessor will not be liable or deemed in Lessor Default, nor will there be
any abatement of rent or right to terminate this Lease, for (a) any interruption
or reduction of utilities, utility services or telecommunication services not
caused by Lessor, (b) any telecommunications or other company (whether selected
by Lessor or Lessee) failing to provide such utilities or services or providing
the same defectively, and/or (c) any utility interruption in the nature of
blackouts, brownouts, or rolling interruptions. Lessee agrees to comply with any
energy conservation programs required by law or implemented by Lessor. Lessee
acknowledges that utility and service costs and availability may fluctuate
significantly, due to power shortages or other events and factors, and Lessee
accepts the risks of such fluctuations. Lessor reserves the right, in its
reasonable discretion, to designate, at any time, the utility and service
providers for Lessee153s use within the Property; no such designation shall impose
liability upon Lessor.
9.03 Lessee has satisfied itself as to the adequacy of any Lessor owned
utility equipment and the quantity of telephone lines and other service
connections to the Building available for Lessee153s use.
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10. |
Lessee Improvements; Lessee Alterations and Mechanic153s Liens |
10.01 Any improvements to be constructed in the Premises by Lessee prior to
Lessee initially commencing use of the Premises are referred to throughout this
Lease as “Lessee Improvements.” All Lessee Improvements will be performed in
accordance with the terms and conditions outlined in Exhibit “B” and also in
accordance with the provisions set forth in this Paragraph 10 regarding Lessee
Alterations.
10.02 The following provisions apply to “Lessee Alterations” which means and
includes (a) any alterations or improvements to the Premises undertaken by
Lessee (other than nonstructural installation of equipment or trade fixtures),
(b) any utility installations at the Premises undertaken by Lessee, and (c) any
repair, restoration, replacement, or maintenance work at the Premises undertaken
by Lessee whether or not Lessee is required to undertake such work pursuant to
this Lease. Lessee shall not commence any Lessee Alteration without first
obtaining the prior written consent of Lessor in each instance which consent may
be withheld or conditioned in Lessor153s reasonable discretion. Lessee shall
submit such information regarding the intended Lessee Alteration as Lessor may
reasonably require, and no request for consent shall be deemed complete until
such information is delivered. The following provisions apply to all Lessee
Alterations.
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(a) |
Lessee shall hire a licensed general contractor who, in turn, shall hire only |
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(b) |
Lessee shall obtain all required permits and deliver a copy of the same to |
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(c) |
Unless Lessor elects otherwise in its applicable prior written consent, |
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(d) |
Lessee shall deliver to Lessor, within ten (10) days following installation |
10.03 Lessor shall have the right to inspect all Lessee Alterations. Lessee
shall pay to Lessor a fee equal to 5% of total project cost up to $50,000 and
2.5% thereafter, to compensate Lessor for review of plans, inspection of work,
and other activities regarding any Lessee Alterations. Approval of any plans or
inspection of any work is for the sole benefit of Lessor and is not a
representation by Lessor that any work is suitable or complies with applicable
requirements. Lessor153s approval of any Lessee Improvements and Lessee
Alterations and/or Lessor153s approval or designation of any general contractor,
subcontractor, supplier or other project participant will not create any
liability whatsoever on the part of Lessor.
10.04 Lessee shall pay all costs of Lessee Alterations as and when due.
Lessee shall not allow any lien to be filed. Lessee shall obtain advance lien
waivers and third-party beneficiary agreements from all contractors,
subcontractors, suppliers, and others providing equipment, labor, materials, or
services, in the form required by Lessor. If any lien is filed, then, without
waiver of any other right or remedy, Lessor shall have the right to cause such
lien to be removed by any means allowed by law, including bond, deposit, and/or
payment of the underlying claim. All sums expended by Lessor in connection with
such lien and/or its removal, including attorney fees, shall be immediately due
from Lessee to Lessor, together with interest at the rate of 12%.
10.05 All Lessee Improvements and Lessee Alterations are part of the realty
and belong to Lessor. Lessee shall be solely responsible to insure all Lessee
Alterations and to restore the same following any casualty. As a condition of
Lessor consenting to any Lessee Improvements or Lessee Alterations, Lessor
reserves the right, at any time to elect to make Lessee the owner of all or any
specified part of the Lessee Improvements or Lessee Alterations and/or to
require Lessee, upon termination of this Lease, to remove none, all, or part of
the same at its sole cost and expense. The provisions of this Paragraph shall
survive the termination of this Lease.
10.06 Notwithstanding any other provision of this Lease, Lessee shall remove,
at or prior to the expiration or termination of this Lease, at its expense, all
wiring and cabling installed at the Premises which shall have been installed by
Lessee or which Lessor shall have installed pursuant to this Lease or at the
request of Lessee. Such wiring and cabling shall include but not be limited to
(a) wiring and cabling above the ceiling panels, behind or within walls, and
under or within floors, (b) wiring and cabling for voice, data, security or
other purposes, (c) wiring and cabling installed pursuant to this Paragraph 10,
pursuant to Exhibit B, or otherwise, and (d) all related installations,
equipment and items whatsoever.
|
11. |
Repairs |
11.01 Subject to Paragraph 11.02 below, Lessee shall, at all times and
at its sole cost and expense, keep all parts of the Premises (including Lessee
Improvements and Lessee Alterations) in good order, and in a neat, clean and
safe condition. If Lessee does not perform required maintenance, Lessor shall
have the right, without waiver of Default nor of any other right or remedy, to
perform such obligations of Lessee on Lessee153s behalf, and Lessee will reimburse
Lessor for any costs incurred immediately upon demand.
11.02 Lessor shall perform all repairs required in the Premises. All costs
incurred by Lessor in making such repairs shall be Operating Expenses; provided,
Lessee shall reimburse Lessor for 100% of any such costs incurred by Lessor (a)
due to the act or omission of Lessee (including but not limited to clogging of
plumbing, stain removal, and repair of damage to the Premises), or (b) for
repairs or maintenance in excess of or other than routine Building standard
repairs and maintenance as determined by Lessor in its reasonable discretion
(for example, maintenance of any above standard dedicated HVAC unit, repair of
built-in appliances, or periodic replacing of above standard light bulbs).
7
|
12. |
Insurance |
12.01 Lessee will not do or permit anything to be done within or about the
Premises or the Property which will increase the existing rate of any insurance
on any portion of the Property or cause the cancellation of any insurance policy
covering any portion of the Property. Lessee will, at its sole cost and expense,
comply with any requirements of any insurer of Lessor.
12.02 Lessee agrees to maintain policies of insurance described in this
Paragraph. Lessor reserves the right, from time to time, to require additional
coverage153s (including, for example, flood insurance, if the Premises is located
in a flood hazard zone), and/or to require higher amounts of coverage153s. Any
additional and/or higher must conform to reasonable industry standards. No
insurance policy of Lessee shall have a deductible greater than $50,000.
|
(a) |
Workers153 Compensation |
Statutory Requirements |
||
|
Employer153s Liability |
Not less than $1,000,000.00 |
|||
|
(b) |
Commercial General Liability |
Not less than $1,000,000.00 |
||
|
Combined single limit per occurrence this location |
Not less than $2,000,000.00 aggregate |
|||
The Commercial General Liability policies shall insure on an occurrence and
not a claims-made basis and cover the Premises, Project and Property. Such
policies shall cover liability arising from premises, operations, independent
contractors, products-completed operations, personal injury, advertising injury
and liability assumed under an insured contract (specifically insuring
performance of the indemnity obligations of Lessee hereunder); such policies
shall not be excess.
|
(c) |
Automobile Liability single limit including property damage |
Not less than $300,000.00 combined |
||
|
(d) |
“Causes of Loss : Special Form” coverage including endorsements for flood |
The limits of the insurance coverage required under this Lease will not limit
the liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance to be carried by Lessee will be primary to, and non-contributory with,
Lessor153s insurance, and contain cross-liability endorsements and will in
addition to the above coverage specifically insure Lessor against any damage or
loss that may result either directly or indirectly from any default of Lessee
under Paragraph 14 (Hazardous Materials) herein. Any similar insurance carried
by Lessor will be considered excess insurance only.
12.03 Lessee will name Lessor (and, at Lessor153s request, any mortgagee) and
Lessor153s agents as additional insured153s on all insurance policies required of
Lessee under this Lease, other than Worker153s Compensation, Employer153s Liability,
Automobile Liability, and Fire and Extended coverage (except on Lessee
Improvements or Lessee Alterations to the Premises for which Lessor shall be
named an additional insured) insuring Lessor and such other additional insured153s
regardless of any defenses the insurer may have against Lessee and regardless of
whether the subject claim is also made against Lessee. All insurance policies
carried by Lessee will permit the insured, prior to any loss, to agree with a
third party to waive any claim it might have against said third party without
invalidating the coverage under the insurance policy, and will release Lessor
(and Lessor153s affiliates and subsidiaries, and all officers, partners,
directors, and employees of Lessor and/or of any such subsidiary or affiliate),
from any claims for damage to any person, to the Property of which the Premises
are a part, any existing improvements, Lessee Improvements and Lessee
Alterations to the Premises, and to any furniture, fixtures, equipment,
installations and any other personal property of Lessee caused by or resulting
from, risks which are to be insured against by Lessee under this Lease,
regardless of cause.
12.04 Lessee will deliver to Lessor (and, at Lessor153s request, to any
mortgagee or to any other third party), simultaneously with its execution of
this Lease and thereafter at least thirty (30) days prior to expiration,
cancellation or change in insurance, certificates of insurance evidencing, at a
minimum, the
8
coverage specified in Paragraph 12.02. All such certificates shall be in form
and substance satisfactory to Lessor, shall affirmatively demonstrate all and
requirements set forth in this Lease, shall contain no disclaimers of coverage,
and shall include a firm and unconditional obligation to give to Lessor at least
10 days153 prior written notice prior to cancellation or change in any coverage.
All insurance required hereunder will be with companies licensed and authorized
to do business in the state in which the Property is located and holding a
“General Policyholders Rating” of “A VIII” or better, as set forth in the most
current Best153s Insurance Guide.
12.05 Lessor will secure and maintain insurance coverage in such limits as
Lessor may deem reasonable in its reasonable judgment to afford Lessor adequate
protection. The premiums for such coverage are “Insurance Premiums” under
Paragraph 4.03C above. Any proceeds of such insurance shall be the sole property
of Lessor to use as Lessor determines. Lessor makes no representation that the
insurance policies and coverage amounts specified to be carried by Lessee or
Lessor under the terms of this Lease are adequate to protect Lessee. Lessee will
provide, at its own expense, all insurance as Lessee deems adequate to protect
its interests.
12.06 Without limiting the effect of any other waiver of or limitation on the
liability of Lessor set forth herein, and except as provided in Paragraph 13
and/or Paragraph 14 below, neither Lessor nor Lessee shall be liable to the
other party or to any insurance company (by way of subrogation or otherwise) for
any loss of or damage to tangible property due to casualty regardless of
negligence. For purposes of this Paragraph 12.06, “Lessor” shall include
Lessor153s affiliates and subsidiaries, and all officers, partners, directors, and
employees of Lessor or of any such subsidiary or affiliate.
|
13. |
Waiver of Claims and Indemnification |
Lessee waives all claims against Lessor for any damage to any property in or
about the Property, for any loss of business or income, and for injury to or
death of any persons, regardless of the cause of any such loss or event or time
of occurrence, except loss, injury or death caused by Lessor153s gross negligence
or willful misconduct. Lessee will indemnify, protect, defend and hold harmless
Lessor from and against all claims, losses, damages, causes of action, costs,
expenses and liabilities, including legal fees, arising out of Lessee153s
occupancy of the Premises or presence on the Property, the conduct of Lessee153s
business, any Default by Lessee, and/or any act, omission or neglect of Lessee,
its agents, contractors, employees, suppliers, licensees or invitees. For
purposes of this Paragraph 13, “Lessor” shall include also Lessor153s affiliates
and subsidiaries, and all officers, partners, directors, and employees of Lessor
or of any such subsidiary or affiliate.
|
14. |
Hazardous Materials |
14.01 “Hazardous Materials” will mean any substance commonly referred to, or
defined in any Law, as a hazardous material or hazardous substance (or other
similar term), including but not be limited to, chemicals, solvents, petroleum
products, flammable materials, explosives, asbestos, urea formaldehyde, PCB153s,
chlorofluorocarbons, Freon or radioactive materials. Lessee will not cause or
permit any Hazardous Materials to be brought upon, kept, stored, discharged,
released or used in, under or about any portion of the Property by Lessee, or
its agents without the prior written consent of Lessor, which consent may be
withheld or conditioned in Lessor153s sole discretion; provided, Lessee may bring
into the Premises small amounts of Hazardous Materials (such as cleaning
products and copy toner) which are readily available to Lessee by unregulated
retail purchase if the same are necessary in Lessee153s normal business
operations. If Lessee brings any Hazardous Materials to the Premises or
Property, with or without the prior written consent of Lessor (without waiver of
the requirement of prior written consent), Lessee shall: (1) use such Hazardous
Material only as is reasonably necessary to Lessee153s business, in small,
properly labeled quantities; (2) handle, use, keep, store, and dispose of such
Hazardous Material using the highest accepted industry standards and in
compliance with all applicable Laws; (3) maintain at all times with Lessor a
copy of the most current MSDS sheet for each such Hazardous Material; and (4)
comply with such other rules and requirements Lessor may from time to time
impose. Upon expiration or earlier termination of this Lease, Lessee will, at
Lessee153s sole cost and expense, cause all Hazardous Materials brought to the
Premises or the Property by Lessee, its agents, contractors, employees,
suppliers, licensees or invitees, to be removed from the Property in compliance
with any and all applicable Laws.
14.02 If Lessee or its agents violate the provisions of this Paragraph 14, or
performs any act or omission which contaminates or expands the scope of
contamination of the Premises, the Property, or any part thereof, the underlying
groundwater, or any property adjacent to the Property, then Lessee will
promptly, at Lessee153s expense, take all investigatory and/or remedial action
(collectively called “Remediation”) that is necessary to fully clean up, remove
and dispose of such Hazardous Materials and any contamination so caused and
shall do so in compliance with any applicable Laws. Lessee will also repair any
damage to the Premises and any other affected portion(s) of the Property caused
by such contamination and Remediation.
9
14.03 Lessee shall immediately provide to Lessor written notice of any
investigation or claim arising out of the use by Lessee of Hazardous Materials
at the Property or the violation of any provision of this Paragraph 14 and shall
keep Lessor fully advised regarding the same. Lessee shall provide to Lessor all
reports regarding the use of Hazardous Materials by Lessee at the Property and
any incidents regarding the same, regardless of whether any such documentation
is considered by Lessee to be confidential. Lessor retains the right to
participate in any legal actions affecting the Property involving Hazardous
Materials.
14.04 Lessee will indemnify, protect, defend and forever hold Lessor, its
lenders and ground lessor, if any, and the Premises, the Property, or any
portion thereof, harmless from any and all damages, causes of action, fines,
losses, liabilities, judgments, penalties, claims, and other costs arising out
of any failure of Lessee to observe any covenants of this Paragraph 14 of this
Lease. All provisions of this Paragraph 14 shall survive the expiration of this
Lease and any termination of this Lease or of Lessee153s right of possession. For
purposes of this Paragraph 14.04, “Lessor” shall include also Lessor153s
affiliates and subsidiaries, and all officers, partners, directors, and
employees of Lessor or of any such subsidiary or affiliate.
|
15. |
Lessor153s Access |
Lessor, its agents, contractors, consultants, servants and employees, will
have the right to enter the Premises at any time in the case of an emergency,
and otherwise at reasonable times upon reasonable notice to examine the
Premises, perform work in the Premises, show the Premises, exercise any right or
remedy, or for any other purpose. For each of these purposes, Lessor will at all
times have and retain any necessary keys. Lessee will not alter any lock or
install new or additional locks or bolts on any door in or about the Premises
without obtaining Lessor153s prior written approval and will, in each event,
furnish Lessor with a new key. Access by Lessor will not give Lessee the right
to terminate this Lease, and will be without abatement of rent or liability on
the part of Lessor.
|
16. |
Damage or Destruction |
16.01 If the Premises is damaged or destroyed by fire or other casualty,
Lessee will immediately give written notice to Lessor of the casualty. Lessor
will have the right to terminate this Lease following a casualty if any of the
following occur by giving notice to Lessee within sixty (60) days of the
casualty: (i) insurance proceeds actually paid to Lessor and available for use
are not sufficient to pay the full cost to fully repair the damage; (ii) Lessor
determines that the Premises or the Building cannot be fully repaired within 180
days; (iii) the Premises are damaged or destroyed within the last twelve (12)
months of the Lease Term; (iv) Lessee is in Default of this Lease at the time of
the casualty; (v) Lessor would be required under this Lease to abate or reduce
Lessee153s rent for a period in excess of six (6) months if the repairs were
undertaken; or (vi) the Project, or the Building in which the Premises is
located, is damaged such that the cost of repair of the same would exceed 10% of
the replacement cost of the same. If Lessor elects to terminate this Lease,
Lessor will be entitled to retain all applicable Lessee insurance proceeds
excepting those attributable to Lessee153s furniture, fixtures, equipment, and any
other personal property.
16.02 If this Lease is not terminated pursuant to Paragraph 16.01, Lessor
will repair the Premises and this Lease shall continue. The repair obligation of
Lessor shall be limited to repair of the Premises excluding any Lessee
Improvements, Lessee Alterations, and any personal property and trade fixtures
of Lessee. During the period of repair, rent will be abated or reduced in
proportion to the degree to which Lessee153s use of the Premises is impaired, as
determined by Lessor, not to exceed the total amount of rent loss insurance
proceeds, directly attributable to Lessee153s Premises, Lessor has received.
However, rent will not be abated if Lessee or any of its agents is the cause of
the casualty.
|
17. |
Transfer (Assignment/Subletting) |
17.01 Lessee will not, voluntarily or by operation of law, assign, sell,
convey, sublet or otherwise transfer all or any part of Lessee153s right or
interest in this Lease, or allow any other person or entity to occupy or use all
or any part of the Premises (collectively called “Transfer”) without first
obtaining the written consent of Lessor which may be withheld or conditioned by
Lessor in its reasonable discretion. Any Transfer without the prior written
consent of Lessor shall be void. Without limiting the generality of the
definition of “Transfer,” it is agreed that each of the following shall be
deemed a “Transfer” for purposes of this Paragraph: (a) an entity other than
Lessee becoming the tenant hereunder by merger, consolidation, or other
reorganization; and (b) a transfer of any ownership interest in Lessee (unless
Lessee is an entity whose stock is publicly traded). Lessee shall provide to
Lessor all information requested by Lessor concerning a Transfer. If Lessor has
not granted consent in writing to a Transfer within thirty (30) days of Lessee153s
request hereunder and delivery of all such information, Lessor will be deemed to
have rejected Lessee153s request. In no event shall Lessee mortgage, encumber,
pledge or assign for security purposes all or any part of its interest in this
Lease. Notwithstanding the foregoing, Lessee may assign this Lease or sublease
the Premises, in whole or in part, without the express written consent of
10
Lessor to: (i) any corporation into which or with which Lessee has merged or
consolidated; (ii) any parent, subsidiary, successor, or affiliated corporation
of Lessee; (iii) any corporation which acquires all or substantially all of the
assets or issued and outstanding shares of capital stock of Lessee; (iv) any
partnership, the majority interest of which shall be owned by the parent of
Lessee; provided the resulting entity from such merger or consolidation or the
transferee, other than a parent, subsidiary or affiliated corporation of Lessee,
from any such acquisition, shall have a net worth not less than Lessee153s prior
to the merger, consolidation, or acquisition; and provided further any such
assignee or successor shall agree in writing to assume and perform all of the
terms and conditions of this Lease on Lessee153s part to be performed from and
after the effective date of such assignment or subletting, so long as the
resulting entity153s use of the Premises does not violate any provision of this
Lease or any applicable governmental law, rule or regulation.
17.02 In the event Lessor consents to a Transfer, the Transfer will not be
effective until Lessor receives a fully executed agreement regarding the
Transfer, in a form and of substance acceptable to Lessor, any documents or
information required by such agreement (including any estoppel certificate and
any subordination agreement required by any lender of Lessor), an amount equal
to all attorneys fees and other expenses of Lessor incurred in connection with
the Transfer, and a Transfer fee in an amount determined by Lessor (a minimum
fee of $250 is payable). Lessee agrees to pay to Lessor an amount equal to all
attorneys153 fees and other expenses incurred by Lessor related to a request for
consent to Transfer regardless of whether such consent is granted and regardless
of whether the Transfer is consummated.
17.03 Fifty percent (50%) of any consideration paid to Lessee solely for
assignment of this Lease, less any reasonable brokerage commission and
reasonable tenant improvements paid by Lessee with respect to such assignment,
shall be immediately paid to Lessor. In the event of a sublease of all or a
portion of the Premises, fifty percent (50%) of all rents payable by the
subtenant in excess of rents payable hereunder (allocated on a per square foot
basis in the event of a partial sublease) shall be immediately due and payable
to Lessor; provided, excess rental shall be calculated taking into account
straight-line amortization, without interest, of any reasonable brokerage
commission less any reasonable tenant improvements paid by Lessee in connection
with the subject sublease transaction.
17.04 Lessor may, within thirty (30) days after submission of Lessee153s
written request for Lessor153s consent to a Transfer, terminate this Lease (or, as
to a partial subletting, terminate this Lease as to the portion of the Premises
proposed to be sublet) as of the date the proposed Transfer was to be effective.
If Lessor terminates this Lease as to only a portion of the Premises, then (a)
this Lease shall cease as to such portion of the Premises, (b) Lessee shall pay
to Lessor all Base Rent and other amounts accrued through the termination date
relating to the portion of the Premises covered by the proposed Transfer
(allocated on an equitable basis determined by Lessor), and (c) Lessee shall
execute, upon request of Lessor, an amendment hereto setting forth matters
related to such partial termination. Lessor may physically separate the
recaptured portion of the Premises and lease such portion of the Premises to the
prospective transferee (or to any other person) without liability to Lessee.
17.05 Regardless of whether consent by Lessor is granted in connection with
any Transfer, no Transfer shall release Lessee from any obligation or liability
hereunder; Lessee shall remain primarily liable to pay all rent and other sums
due hereunder to Lessor and to perform all other obligations hereunder.
Similarly, no Transfer, with or without the consent of Lessor, shall release any
guarantor from its obligations under its guaranty. Upon any assignment or
sublease, any rights, options or opportunities granted to Lessee hereunder to
extend or renew the Lease Term, to shorten the Lease Term, or to lease
additional space shall be null and void.
|
18. |
Default |
Time is of the essence in the performance of all covenants of Lessee. Lessee
will be in Default if any of the following events occurs:
18.01 Lessee fails to make within five (5) days of when due, any payment of
Base Rent, Additional Rent, or any other monetary payment required to be made by
Lessee herein and Lessee does not cure such failure within three (3) days after
Lessor gives written notice of such failure to Lessee; provided, if Lessor has
given such a written notice with respect to two (2) payments due in any calendar
year, then the failure by Lessee to pay any other payment due in such calendar
year, on or before the date when first due, shall be a Default hereunder without
any written notice from Lessor and without any grace or cure period.
Notwithstanding the foregoing, Lessee shall not be in default of this Lease the
first time in a twelve (12) month period that Lessee fails to pay rent when due
so long as Lessee pays such overdue rent within five (5) days of written notice
from Lessor that such overdue amount is due.
18.02 Lessor discovers that any representation or warranty made by Lessee or
any guarantor was materially false when made or that any financial statement of
Lessee or of any guarantor of this Lease given to Lessor was materially false.
11
18.03 Lessee makes any general arrangement or assignment for the benefit of
creditors, becomes a “debtor” in a bankruptcy proceeding, is unable to pay its
debts or obligations as they occur, or has an attachment, execution or other
seizure of substantially all of its assets located at the Property or its
interest in this Lease.
18.04 Lessee fails to observe, perform or comply with any of the non-monetary
terms, covenants, conditions, provisions or rules and regulations applicable to
Lessee under this Lease other than as specified above in this Paragraph 18;
provided, if such failure is a curable failure, then such failure shall not be a
“Default” unless Lessee does not cure such failure as soon as practicable
possible but in no event later than thirty (30) days following written notice of
such failure from Lessor; provided, however, that if said default cannot be
cured within said thirty (30) day period using reasonable diligence, no Default
shall be deemed to have occurred if Lessee commences action to cure the Default
within said thirty (30) day period and diligently pursues a cure thereafter.
18.05 Any guarantor becomes insolvent, becomes a “debtor” in a bankruptcy
proceeding, fails to perform any obligation under its guaranty, or attempts to
revoke its guaranty.
|
19. |
Remedies of Lessor |
19.01 If Lessee fails to perform any duty or obligation of Lessee under this
Lease, Lessor may at its option, without waiver of Default nor any other right
or remedy, perform any such duty or obligation on Lessee153s behalf. The costs and
expenses of any such performance by Lessor will be immediately due and payable
by Lessee upon receipt from Lessor of the reimbursement amount required.
19.02 Upon a Default, with or without notice or demand, and without limiting
any other of Lessor153s rights or remedies, Lessor may:
|
(a) |
Terminate this Lease and/or terminate Lessee153s right to possession of the |
|
(b) |
Continue the Lease and Lessee153s right to possession and recover rent as it |
|
(c) |
Pursue any other remedy now or hereafter available to Lessor under the laws |
19.03 The “worth at the time of award” referred to in Paragraph 19.02(a)(i),
19.02(a)(ii), and 19.02(a)(iv) will additionally include interest computed by
allowing interest at the rate of 12% per annum (or, if lower, at the maximum
rate allowed by law). The “worth at the time of award” referred to in Paragraph
19.02(a)(iii) will be computed by discounting the amount at the discount rate of
the Federal Reserve Bank of San Francisco in effect at the time of award, plus
one percent (1%).
19.04 No right or remedy conferred upon or reserved to Lessor in this Lease
is intended to be exclusive of any right or remedy granted to Lessor by statute
or common law, and each and every such right and remedy will be cumulative.
12
|
20. |
Condemnation |
If any portion of the Premises or any portion of the Building in which the
Premises is located, or any portion of the Property which would substantially
interfere with Lessor153s ownership, or Lessor153s or Lessee153s ability to conduct
business is taken for any public or quasi-public purpose by any governmental
authority, including but not limited to, by exercise of the right of
appropriation, inverse condemnation, condemnation or eminent domain, or sold in
lieu of such taking, Lessor, at its option, may terminate this Lease without
recourse by Lessee. If this Lease is not terminated, Lessor will promptly
proceed to restore the Premises and/or any portion of the Property used in
common by all lessees to substantially the same condition as prior to such
taking allowing for any reasonable effects of such taking. Should a portion of
the Premises be taken in a case where Lessor does not exercise its right to
terminate this Lease, Lessor will abate the rent corresponding to the term
during which, and to the part of the Premises which, Lessee is deprived on
account of such taking. Any award for any taking or payment made in lieu of
exercise of such power will be the property of Lessor, whether such award be
made as compensation for diminution of value of the leasehold or for the taking
of the fee, or as severance damages; however, Lessee will be entitled to any
compensation, separately awarded to Lessee for Lessee153s relocation expenses.
|
21. |
Estoppel Certificate |
Lessee will execute and deliver to Lessor, within ten (10) days after written
request from Lessor, a written Estoppel Certificate in form prepared by Lessor
certifying: (i) that this Lease is unmodified and in full force and effect (or,
if modified, specifying each such modification); (ii) the Commencement Date and
expiration of the Lease Term; (iii) the absence or status of any rights of
Lessee to renew, extend, or otherwise alter the Lease Term or to lease
additional space or alter the definition of the Premises; (iv) the date to which
rent and any other charges are paid in advance, if any; (v) that there are not,
to Lessee153s knowledge, any uncured Defaults on the part of Lessor, or stating
the nature of any uncured Defaults; (vi) the current Base Rent amount and the
amount and form of the Security Deposit on deposit with Lessor; (vii) that
Lessor has completed any promised improvements to the Premises and paid any
promised improvement allowance (or detailing any work to be performed or
allowance to be paid); and (viii) any other information requested, including but
not limited to, any requested information regarding Hazardous Materials. Any
such Estoppel Certificate may be relied upon by Lessor, and also by any actual
or prospective buyer or lender of the Property and any other third party
designated by Lessor (the “Beneficiaries”). If Lessee fails to execute and
deliver such Estoppel Certificate within such ten (10) day period, then without
waiver of Default or of any other right or remedy of Lessor, Lessor shall have
the right to deliver to the Beneficiaries a completed Substitute Estoppel
Certificate regarding this Lease certifying the matters which Lessee was
requested to certify in the Estoppel Certificate. A notice enclosing a copy of
the Substitute Estoppel Certificate shall be simultaneously sent to Lessee. Each
statement in the Substitute Estoppel Certificate shall be deemed true, and shall
be binding upon Lessee, unless Lessee provides, within five (5) days of the
receipt of Lessor153s notice, written notice addressed to Lessor and the
Beneficiaries disagreeing with such statement on specific grounds. Lessee shall
defend and indemnify Lessor regarding any claim that a statement in the
Substitute Estoppel Certificate to which Lessee did not so disagree is
inaccurate.
|
22. |
Notices |
All communications and notices required under this Lease shall be in writing
and shall be addressed to the respective address of the receiving party set
forth in Paragraph 1 above. All notices to Lessee shall be given by reputable
overnight courier, U. S. mail (First Class, postage prepaid), or hand delivery,
and shall be deemed received (i) if mailed, on the earlier of actual receipt or
three (3) days after such mailing, (ii) one business day following delivery by
Lessor to such an overnight courier, or (iii) upon hand delivery. Any notice to
Lessee may also be given by posting at the Premises and shall be effective upon
such posting. Notices to Lessor shall be sent to Lessor by U. S. mail, postage
prepaid, registered or certified mail with return receipt requested to the
address indicated in Paragraph 1 and shall be deemed received five (5) days
after such mailing. At any time during the Lease Term, Lessor or Lessee may
specify a different Notice Address by providing written notification to the
other.
|
23. |
Holdover |
If Lessee remains in possession of all or any part of the Premises with
Lessor153s prior written consent after the expiration or termination of this Lease
or of Lessee153s right to possession, such possession will constitute a
month-to-month tenancy which may be terminated by either Lessor or Lessee upon
thirty (30) days written notice and will not constitute a renewal or extension
of the Lease Term. If Lessee remains in possession after such expiration or
termination without Lessor153s prior written permission, such possession will
constitute a tenancy-at-will terminable upon forty-eight (48) hours153 notice by
Lessor and will not constitute a month-to-month tenancy nor a renewal or
extension of the Lease Term. In the event of a month-to-month tenancy or
tenancy-at-will under this Paragraph, Lessee153s Base Rent will be two hundred
percent (200%) of the Base Rent payable during the last month of the Lease Term,
any other sums due under this Lease will be payable in the amounts and at the
times specified in this Lease, and all options, rights of refusal, expansions
and/or renewals shall be null and void. Any tenancy under this Paragraph will be
subject to every other term, condition and covenant contained in this Lease.
Lessee agrees to defend, indemnify and hold Lessor harmless from any claim or
cause of action arising out of related to the failure of Lessee to surrender
possession of the Premises to
13
Lessor upon the expiration of this Lease or upon any such termination.
Notwithstanding the foregoing, Lessee shall have the option to holdover for a
period of up to three (3) months following the expiration of the lease term at
115% of the last rent due under the terms of the lease. Lessee shall be required
to provide Lessor one-hundred eighty (180) days notice prior to lease the lease
expiration date.
|
24. |
Default by Lessor; Limitation of Liability; Real Estate Investment |
24.01 In the event Lessor fails to perform any obligation required to be
performed under this Lease, Lessee will notify Lessor in writing of such
failure. Lessor shall not be deemed in Lessor Default hereunder unless and until
such notice is actually received by Lessor and Lessor fails within thirty (30)
days of receipt of such notice to commence to make a good faith effort to cure
the failure or thereafter ceases to pursue such cure to completion.
24.02 The obligations of Lessor under this Lease shall be binding only on the
undersigned Lessor and not upon any of its subsidiaries or affiliates nor upon
any partners, investors, trustees, directors, officers, employees, agents,
shareholders, advisors or managers of Lessor in their individual capacities.
With respect to any obligations of Lessor to Lessee under this Lease and with
respect to any liabilities arising at the Property, Lessee153s sole and exclusive
remedy shall be a claim against the undersigned Lessor.
24.03 In consideration of the benefits accruing hereunder, Lessee on behalf
of itself and all of its Transferees covenants and agrees that, in the event of
any actual or alleged Lessor Default of this Lease or in the event of any other
claim or cause of action by Lessee, Lessee153s recourse against Lessor for any
monetary damages (over and above damages actually paid by available insurance,
if any) will be limited to Lessor153s interest in the amount of equity Lessor
would have in the Property if the Property were encumbered by debt in an amount
equal to fifty percent (50%) of the value of the Property; calculations of
equity shall be made as of the initial date Lessee notifies Lessor of the actual
or alleged Default or other claim the Property. Any judgment against Lessor
shall be satisfied only out of an offset against Rents and out of the Property;
no other assets of Lessor shall be subject to levy, execution or other
enforcement procedure for the satisfaction of any judgment by Lessee against
Lessor. Any claims by Lessee against Lessor will be limited to actual damages
only and will not, under any circumstances, include lost profits or
consequential damages.
24.04 If Lessor is a real estate investment trust, and if Lessor in good
faith determines that its status as a real estate investment trust under the
applicable provisions of the Internal Revenue Code of 1986, as heretofore or
hereafter amended, will be jeopardized because of any provision of this Lease,
Lessor may require reasonable amendments to this Lease and Lessee shall not
unreasonably withhold or delay its consent thereto, provided that such
modifications do not in any way, (i) increase the obligations of Lessee under
this Lease or (ii) adversely affect any rights or benefits to Lessee under this
Lease. Lessor shall pay all reasonable costs incurred by Lessee, including
without limitation, legal fees incurred for reviewing any such proposed
modifications.
24.05 Lessee represents that, to its knowledge, no person or entity who is a
significant indirect owner of Lessor, owns actually or constructively a 10% or
more interest in Lessee. Lessee will promptly notify Lessor if it learns that
any such ownership interest exists. Significant owners of Lessor at this time
include Public Storage, Inc. and New York Common Retirement Fund.
24.06 Lessor and any successor Lessor have the right to sell the Property or
any portion of it, or to assign its interest in this Lease, at any time and from
time to time. Upon the sale or any other conveyance by Lessor of the Property,
or a portion thereof which includes the Premises, Lessor will be released from
all obligations and liability under this Lease arising out of any act, event,
occurrence or omission occurring or existing after the date of such conveyance.
|
25. |
Subordination |
Without the necessity of any additional document being executed by Lessee for
the purposes of effecting a subordination, and at the election of Lessor or any
mortgagee or any ground lessor with respect to the land of which the Premises
are a part, this Lease will be subject and subordinate at all times to: (i) all
ground leases or underlying leases which may now exist or hereafter be executed
affecting the Property, and (ii) the lien of any mortgage or deed of trust which
may now exist or hereafter be executed in any amount for which the Property,
ground leases or underlying leases, or Lessor153s interest or estate in any of
said items is specified as security. Lessor or any mortgagee or ground lessor
will have the right, at its election, to subordinate or cause to be subordinated
any ground lessee or underlying leases or any such liens to this Lease. If
Lessor153s interest in the Premises is acquired by any ground lessor or mortgagee,
or in the event any proceedings are brought for the foreclosure of, or in the
event of exercise of power of sale under, any mortgage or deed of trust made by
Lessor covering the Premises, or in the event a conveyance in lieu of
foreclosure is made for any reason, Lessee will, notwithstanding any
subordination and upon the request of such successor in interest to Lessor,
attorn to and become the Lessee of the
14
successor in interest to Lessor and recognize such successor in interest as
the Lessor under this Lease, provided Lessee153s interests hereunder shall not be
disturbed so long as Lessee is not in Default hereunder. Lessee acknowledges
that although this Paragraph is self-executing, Lessee covenants and agrees to
execute and deliver, upon demand by Lessor and in the form requested by Lessor,
or any other mortgagee or ground lessor, any additional documents evidencing the
priority or subordination of this Lease with respect to any such ground leases
or underlying leases or the lien of any such mortgage or deed of trust, provided
Lessee153s interests hereunder shall not be disturbed so long as Lessee is not in
Default hereunder. Lessee agrees that any person or entity who acquires title to
the Premises pursuant to a foreclosure of a deed of trust or mortgage, or deed
in lieu thereof, or the termination of an underlying ground lease or master
lease (a “Foreclosing Party”), even if such Foreclosing Party elects to have
Lessee attorn to the Foreclosing Party under this Lease, shall not be (i) liable
for any act or omission of any prior lessor or with respect to events occurring
prior to its acquisition of ownership, (ii) subject to any offsets or defenses
which Lessee might have against any prior lessor, (iii) bound by prepayment of
more than one month153s rent, (iv) liable for any security deposit not actually
received by such person or entity, (v) bound by any amendment or modification to
this Lease not consented to in writing by the holder of the mortgage, deed of
trust, ground lease or master lease or the Foreclosing Party, or (vi) liable for
any obligation or liability accruing under this Lease after the Foreclosing
Party assigns its interest under this Lease to a third party. Any such
Foreclosing Party is expressly made a third party beneficiary of the foregoing
provisions, and all other provisions of this Lease which are for the benefit of
a Foreclosing Party, which rights shall survive a foreclosure of the deed of
trust or mortgage.
|
26. |
Force Majeure |
Lessor will not be deemed in Lessor Default or have liability to Lessee, nor
will Lessee have any right to terminate this Lease or abate rent or assert a
claim of partial or constructive eviction, because of Lessor153s failure to
perform any of its obligations under this Lease if the failure is due in part or
in full to reasons beyond Lessor153s reasonable control. If this Lease specifies a
time period for performance of an obligation by Lessor, that time period will be
extended by the period of any delay in Lessor153s performance caused by such
events as described herein.
|
27. |
Miscellaneous Provisions |
27.01 Whenever the context of this Lease requires, the word “person” shall
include any entity, and the singular shall include the plural and the plural
shall include the singular. If more than one person or entity is Lessee, the
obligations of each such person or entity under this Lease will be joint and
several. Without diminishing the provisions of Paragraph 17, the terms,
conditions and provisions of this Lease will apply to and bind the heirs,
successors, executors, administrators and assigns of Lessor and Lessee.
27.02 The captions and headings of this Lease are used for the purpose of
convenience only and shall not be construed to interpret, limit or extend the
meaning of any part of this Lease. This Lease contains all of the agreements and
conditions made between Lessor and Lessee and may not be modified in any manner
other than by a written agreement signed by both Lessor and Lessee. Any
statements, promises, agreements, warranties or representations, whether oral or
written, not expressly contained herein will in no way bind Lessor and Lessee
expressly waives all claims for damages by reason of any statements, promises,
agreements, warranties or representations, if any, not contained in this Lease.
No provision of this Lease shall be deemed to have been waived by Lessor unless
such waiver is in writing signed by a regional vice president or higher of
Lessor or of Lessor153s management company, and no custom or practice which may
develop between the parties during the Lease Term shall waive or diminish the
Lessor153s right to enforce strict performance by Lessee of any terms of the
Lease. No waiver by Lessor of a Default by Lessee of any term, covenant or
condition of this Lease will be deemed a waiver of any other term, covenant or
condition of this Lease, or of any subsequent Default by Lessee of the same or
any other term, covenant or condition of this Lease. No delay or omission by
Lessor to seek a remedy for any Lessee Default of this Lease shall be deemed a
waiver by Lessor of its remedies or rights with respect to such Default.
Additionally, regardless of Lessor153s knowledge of a Default at the time of such
acceptance, the acceptance of rent or any other payment by Lessor will not
constitute a waiver by Lessor of any Default by Lessee. The duties and
warranties of Lessor are limited to those expressly stated in this Lease and do
not and shall not include any implied duties or implied warranties, now or in
the future. No representations or warranties have been made by Lessor other than
those contained in this Lease. This Lease is governed and construed in
accordance with the laws of the state in which the Premises are located, and
venue of any legal action will be in the county where the Premises are located.
27.03 Time is of the essence for the performance of each term, condition and
covenant of this Lease.
27.04 This Lease has been fully reviewed by both parties and shall not be
strictly or adversely construed against the drafter. If any provision contained
herein is determined to be invalid, illegal or unenforceable in any respect,
then (a) such provision shall be enforced to the fullest extent allowed, and (b)
such invalidity, illegality, or unenforceability will not affect any other
provision of this Lease.
15
27.05 Lessee hereby agrees not to disclose any terms of this Lease without
the prior written consent of Lessor. Lessee shall not record this Lease or any
short form memorandum hereof.
27.06 The rights and obligations of the parties under this Lease shall
survive the expiration of this Lease and the termination of this Lease and/or of
Lessee153s right of possession.
27.07 Lessor and Lessee each warrant to the other that it has not dealt with
any broker or agent in connection with this Lease, other than the person(s)
listed in Paragraph 1 above. Lessor and Lessee each agree to indemnify the other
against all costs, expenses, legal fees and other liability for commissions or
other compensation claimed by any other broker or agent by reason of the act or
agreement of the indemnifying party.
27.08 Lessee shall not permit or allow any activity in the Premises which
will have an adverse effect on indoor air quality, including smoking and any
remodeling activity or introduction of materials which would have such an
effect. Lessor shall have the right, but not the obligation, to monitor indoor
air quality within the Project. Lessee shall take such steps to protect and to
improve indoor air quality as Lessor may request from time to time.
27.09 Lessor has no duty to provide security for any portion of the Project.
To the extent Lessor elects to provide any security, Lessor is not warranting
the effectiveness of any security personnel, services, procedures or equipment
and Lessee shall not rely on any such personnel, services, procedures or
equipment. Lessor shall not be liable for failure of any such security
personnel, services, procedures or equipment to prevent or control, or to
apprehend anyone suspected of, personal injury or property damage in, on or
around the Project.
27.10 The grant of any consent or approval required from Lessor under this
Lease shall be proved only by proof of a written document signed and delivered
by Lessor expressly setting forth such consent or approval. Unless otherwise
specified herein, any such consent or approval may be withheld in Lessor153s sole
discretion. Any consent may be issued subject to conditions determined by
Lessor, in its sole discretion. Notwithstanding any other provision of this
Lease, the sole and exclusive remedy of Lessee for any alleged or actual
improper withholding, delaying or conditioning of any consent or approval by
Lessor shall be the right to specifically enforce any right of Lessee to require
issuance of such consent or approval on conditions allowed by this Lease; in no
event shall Lessee have the right to terminate this Lease, to collect monetary
damages, or to pursue any other remedy for any actual or alleged improper
withholding, delaying or conditioning of any consent or approval, regardless of
whether this Lease requires that such consent or approval not be unreasonably
withheld, conditioned or delayed.
27.11 Lessee agrees to abide by, keep and observe all Rules and Regulations
set forth in Exhibit “D” and all additions and amendments to the same of which
Lessor provides written notice to Lessee. Lessor will not be responsible to
Lessee for any nonperformance by any other lessee, occupant or invitee of the
Property of any said Rules and Regulations.
27.12 Lessee will not place any signage on or about the Property, or on any
part thereof, without the prior written consent of Lessor which Lessor may
withhold or condition in its sole discretion. All Lessee signage will comply
with the terms and conditions of this Lease, the sign criteria set forth in
Exhibit “C” and Exhibit “D,” or other criteria which Lessor may establish from
time to time.
27.13 Lessee will not vacate or abandon the Premises, or permit the Premises
to remain unoccupied for any period longer than fifteen (15) consecutive days
any time during the Lease Term. If Lessee abandons, vacates, or surrenders the
Premises, or is dispossessed by process of law, or otherwise, any personal
property belonging to Lessee left in or about the Premises will, at the option
of Lessor, be deemed abandoned and may be disposed of by Lessor at the expense
and risk of Lessee.
27.14 In the event any party to this Lease initiates litigation to enforce
the terms of this Lease or to declare rights under this Lease, the prevailing
party will be entitled to collect its reasonable attorneys fees shall include
all attorneys fees incurred at and in preparation for discovery, arbitration,
trial, appeal and review, including deposition attorney153s fees. This attorney153s
fee provision shall also apply to all litigation and other proceedings in
Bankruptcy Court.
27.15 Submission of this document for examination and signature by Lessee is
not an offer to lease and does not create a reservation or option to lease. This
document will become effective and binding only upon full execution and delivery
by both Lessee and Lessor.
27.16 OPTION TO RENEW LEASE
Provided Lessee is not in Default of the Lease at the time it exercises this
option and has not been in Default during any other period of the Lease Term
that has not been cured, Lessee is hereby granted one option to renew this Lease
for an additional five (5) years at the Base Rent rate then in effect for
16
comparable space in the market at the effective date of the commencement of
such renewal term, but not less than the last monthly rental amount payable by
Lessee prior to commencement of such renewal term. Such leasing for the renewal
term shall be, at the election of Lessor, on the same terms and conditions as
set forth in this Lease or on the terms and conditions of the standard lease
form then used by Lessor with respect to the Project. The within option shall be
exercised by Lessee, if at all, by written notice given no sooner than twelve
(12) full calendar months and no later than eight (8) full calendar months prior
to the expiration of the Lease Term; Lessee shall include with such notice a
complete set of current financial statements of Lessee and all guarantors.
In the event Lessor and Lessee are unable to agree as to the Base Rent rate
applicable to such renewed term within thirty (30) days of Lessee153s exercise of
its option to renew, both parties agree to mediate their disagreement. If
mediation does not resolve the disagreement in fair market value, Lessee shall
have the option to refer the matter to an MAI certified appraisal procedure to
determine the Base Rent rate. Lessor and Lessee shall appoint an MAI certified
appraiser, such appraiser shall determine the current market rent (to be not
less than the minimum rent set forth above in this Section) and such
determination shall be binding upon Lessor and Lessee. Lessor and Lessee shall
each pay one-half of the fees and costs of such appraiser.
Upon determination of the Base Rent rate, Lessor shall deliver to Lessee
either an amendment to this Lease renewing the Lease Term, or a new lease for
the renewal term based upon the form of the standard lease then used by Lessor
with respect to the Project. Lessee shall execute and deliver the submitted
document to Lessor within ten (10) days accompanied by payment of the amount of
money which, when added to any existing Security Deposit, shall increase the
Security Deposit amount to a sum which bears the same relationship to the
renewal Base Rent as the original Security Deposit bears to the Base Rent with
respect to the initial Lease Term.
Notwithstanding any provision hereof, during the thirty (30) day period
allowed for the parties to agree upon the renewal Base Rent rate, Lessor shall
have the right to rescind the exercise of the renewal option by written notice
in the event Lessor determines, in its reasonable discretion, that the financial
statements delivered by Lessee with the renewal notice are not satisfactory to
Lessor.
The rights of Lessee under this Paragraph are not assignable separately from
this Lease. Such rights of Lessee shall terminate upon: (a) any assignment,
sublease, or other Transfer, and/or (b) any monetary default and/or (c) any
termination of this Lease or of Lessee153s right of possession hereunder;
provided, however, in the event Lessee shall have exercised this renewal option
and Lessor subsequently terminates this Lease or Lessee153s right of possession
hereunder for Default, the damages to which Lessor shall be entitled shall
include damages with respect to the renewal term.
27.17 Mediation First
Any disputes under the Lease, after first attempting to be resolved through
mediation, including with respect to the determination of Additional Rent and/or
Fair Market Rent, shall be resolved by binding arbitration under the rules of
the Arbitration Service of Portland, or such other procedures as shall be
mutually agreed upon between Lessor and Lessee, as set for the in the lease.
Pending the final determination of any dispute, Lessee shall pay the last Base
Rent amount due under the Initial Term and make up any shortfall immediately
after final determination of Fair Market Rent.
27.18 The following Exhibits are attached to this Lease and by this reference
made a part hereof: “A-1”, “A-2”, “A-3”, “A-4”, “B”, “C”, and “D”.
17
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the
Lease Execution Date.
THIS LEASE, WHETHER OR NOT EXECUTED BY LESSEE, IS SUBJECT TO ACCEPTANCE BY
LESSOR, ACTING BY ITSELF OR BY ITS AGENT BY THE SIGNATURE ON THIS LEASE OF ITS
SENIOR VICE PRESIDENT, VICE PRESIDENT, REGIONAL MANAGER OR DIRECTOR OF LEASING.
|
LESSOR: |
LESSEE: |
|||
|
PS Business Parks, L.P. A California Limited Partnership By PS Business Parks, Inc. Its General Partner |
Digimarc Corporation A Delaware Corporation |
|||
|
/s/ Coby A. Holley |
/s/ Paul R. Gifford |
|||
|
By: Coby A. Holley, Vice President |
By: Paul R. Gifford, President & COO |
|||
|
Date: 3-24-04 |
Date: March 22, 2004 |
|||
Lease Execution Date
Lessor Fed. ID #: 95-4609260
18
PREMISES “A-1” FIRST FLOOR
[DIAGRAM OF LEASED PROPERTY]
19
PREMISES “A-1” SECOND FLOOR
[DIAGRAM OF LEASED PROPERTY]
20
BUILDING “A-2”
[DIAGRAM OF LEASED PROPERTY]
21
PROJECT “A-3”
[DIAGRAM OF LEASED PROPERTY]
22
PROPERTY “A-4”
[DIAGRAM OF LEASED PROPERTY]
23
EXHIBIT B
WORK LETTER
1. Lessor153s Work.
1.1. Plans and Costs.
If Lessor has agreed to alter or improve the Premises prior to delivery of
possession to Lessee, then this box is checked: 190. All such alterations and
improvements shall be described on plans and specifications to be approved by
the parties as described below (the “Plans”).
(a) Approval of Plans. Lessor shall have Plans prepared and
shall submit the same to Lessee for review, comment, and approval. The parties
shall agree upon the final Plans and a related estimate of the “Costs of
Lessor153s Work” by May 1, 2004 (the “Plan Approval Date).
If Lessee does not approve plans by the plan Approval Date, the number of days
of delay in such approval beyond the Plan Approval Date shall be deemed days of
delay attributable to and caused by Lessee.
(b) Lessor153s Work Defined. The work to be performed by
Lessor as shown on the Plans, as the same may be modified by change order as
discussed below, is referred to as “Lessor153s Work.”
(c) Costs. The “Costs of Lessor153s Work” shall include all
costs incurred by Lessor in connection with Lessor153s Work including but not
limited to all design costs (architectural, engineering, mechanical and other
design costs), all hard and soft construction costs, and all costs of materials,
general conditions, permits and inspection fees. In addition, Lessee may use a
portion of the Work Allowance for moving costs, cabling, furniture, fixtures and
equipment. Lessee understands and agrees that (i) the actual Costs of Lessor153s
Work can only be determined after all Lessor153s Work is completed, (ii) the
actual Costs of Lessor153s Work may exceed the estimate and also any other
estimate communicated to Lessee prior to or during the course of completing
Lessor153s Work, and (iii) the actual Costs of Lessor153s Work may increase for
reasons, including but not limited to, Change Orders, increased costs resulting
from any act or omission of Lessee, unforeseen or hidden conditions discovered
during the course of construction, or additional costs or delays caused by any
governmental authority or agency requirement. The Costs of Lessor153s Work shall
include a reasonable fee as compensation to Lessor for coordination and
supervision of Lessor153s Work and any Lessee Improvements.
(d) Payment. Lessor shall pay the Costs of Lessor153s Work up
to $1,555,301 ($33.75 per square foot) (the “Lessor153s Work Allowance”). In the
event the initial estimate of the Costs of Lessor153s Work approved pursuant to
the above provisions exceeds the Lessor153s Work Allowance, Lessee shall pay the
excess to Lessor upon approval of the Plans and such initial estimate.
Seventy-five (75%) percent shall be due prior to commencement of construction
and twenty-five (25%) percent shall be due at Substantial Completion.
(e) Payment Delays. If Lessee fails to pay to Lessor any
amount required by this Work Letter, as and when due, then, without waiver of
default or of other rights and remedies, Lessor shall have the right to suspend
Lessor153s Work until payment is received; the number of days by which any such
suspension delays substantial completion shall be deemed days of delay
attributable to and caused by Lessee.
(f) Architects/Space Planning. Lessor has engaged LRS
Architects to complete space plan and design development drawings. If Lessee is
dissatisfied with the space plan, Lessee shall have the option at their cost to
select their own architect, subject to the reasonable approval of Lessor. Such
costs can be included in the cost of Lessor153s Work.
1.2. Construction. The construction obligation of Lessor is
to substantially complete Lessor153s Work substantially in accordance with the
Plans. Lessor shall use reasonable efforts to substantially complete Lessor153s
Work three weeks prior to the scheduled Commencement Date set forth in Section 1
of the Lease; provided the consequences of delay in substantial completion of
Lessor153s Work are those set forth in the Lease. Both the initial Tenant
improvement work, as well as any subsequent major work in the premises shall be
performed by Lessor. Lessee shall have the benefit of competitive bidding for
work to be performed by Lessor153s contractor. Any fees for overhead or
supervision of Lessor153s work in the premises shall be consistent with reasonable
industry standards and all costs for work to be performed in the premises shall
be subject to Lessor and Lessee prior approvals.
24
1.3. Changes in the Plans.
(a) A “Change Order” is a Lessor required or Lessee requested change to the
Plans.
(b) Lessor shall have the right to require a Change Order based on applicable
codes, actual site conditions, and/or ambiguities or inconsistencies in the
Plans.
(c) Lessee may request from time to time a Change Order. If Lessee wishes to
request a Change Order, Lessee will submit in writing to Lessor a detailed
request of the change. Lessor is not obligated to approve any Lessee requested
change. If Lessor does approve the same, Lessor will deliver to Lessee a written
statement, hereinafter referred to as “Lessor153s Change Order Statement”, of the
estimated costs and expenses of the change with a reasonable estimate, if
applicable, of the additional time required for substantial completion of
Lessor153s Work.
(d) Within three (3) business days following receipt by Lessee of Lessor153s
Change Order Statement, Lessee will provide Lessor its written authorization to
proceed with the change. If the change increases the Costs of Lessor153s Work and
the total Costs of Lessor153s Work exceed the Allowance, Lessee shall pay the
amount required at the time of providing authorization to proceed. If Lessee
does not provide such written authorization to Lessor153s Change Order Statement
accompanied by payment of such required amount within this time period, Lessee153s
request for a Change Order shall be deemed cancelled. All delays attributable to
Lessee requested changes, whether or not approved by Lessor and whether or not
cancelled by Lessee, shall be deemed delays caused by Lessee. Lessee shall pay
to Lessor any costs incurred by Lessor regarding a Lessee requested change that
is cancelled.
1.4. Completion and Delivery. Possession of the Premises
shall be delivered to Lessee when Lessor153s Work is substantially completed in
accordance with the Plans, as reasonably determined by Lessor or on such earlier
date, if any, as is determined pursuant to the operation of Section 2.03 of the
Lease. Within three (3) days of written request by Lessor, Lessee shall execute
and deliver to Lessor a confirmation letter prepared by Lessor affirming
substantial completion of Lessor153s Work, the date of Lessor153s delivery of the
Premises, and such other matters as Lessor may reasonably request.
1.5 Punch list Work. Lessor153s Work shall be deemed
substantially completed even if minor items of work which do not materially
adversely affect Lessee153s ability to conduct its business remain to be completed
or corrected (hereinafter referred to as “Punch list Items”). Lessee shall
notify Lessor of any Punch list Items by written notice given within ten (10)
days following receipt of Lessor153s written notification of substantial
completion of Lessor153s Work. Lessee shall be deemed to have approved Lessor153s
Work if Lessee does not deliver such a list to Lessor within such time period
and to have approved all of Lessor153s Work except only properly and timely listed
Punch list Items. The obligation of Lessor regarding Punch list Items shall be
to complete the same to industry standard. Lessor shall have complete access to
the Premises for the purpose of performing punch list work. Any dispute as to
Punch list Items shall be resolved by an architect or other qualified
professional designated by Lessor, but such dispute shall not delay the date
upon which Lessor153s Work is deemed substantially complete.
2. Lessee Improvements. Any work of improvement Lessee
proposes to undertake which is within the definition of “Lessee Improvements”
set forth in Section 10.01 of the Lease shall be subject to the following
provisions (and also subject to the provisions of Section 10 of the Lease). If
no such Lessee Improvements are to be undertaken by Lessee, then the provisions
of Paragraph 2 of this Work Letter shall be disregarded.
2.1. Lessee Plans. Lessee must obtain the prior written
approval of Lessor regarding complete plans and specifications for the Lessee
Improvements. If such plans and specifications are already approved, the
approved plans and specifications (or a list of the same) are attached as
Schedule 2; otherwise, Lessee shall submit plans and specifications for the
approval of Lessor pursuant to Paragraph 10 of the Lease.
2.2. Scheduling; Avoidance of Inconvenience. Following
completion of Lessor153s Work, subject to a punch list, Lessor shall deliver a
C.O. or temporary C.O. to Lessee and grant a period of three (3) weeks prior
occupancy to move-in to the Premises which will include installation of
FF&E, telecommunications and computer cabling. In the event Lessor
separately gives written permission to Lessee allowing any portion of Lessee
Improvements to be installed or materials to be delivered prior to substantial
completion of Lessor153s Work, then (a) Lessee waives any claims for delays in its
work and shall instruct its contractor to follow the directives and orders of
Lessor153s contractor, and (b) Lessee shall schedule its work such that union and
non-union workers will not be working side by side at the Premises, and (c) any
damage to Lessor153s Work shall be deemed to have been caused by Lessee and its
contractor unless conclusively proved otherwise by Lessee. Lessee shall have the
right to retain its own specialty contractors to perform any portion of the work
necessary to construct and outfit the Premises (which will not be part of the
general contractor153s scope of work nor shall a mark-up be added). The Lessee153s
25
contractors153 work shall include, but not be limited to, data cabling,
telephone and data equipment, security, audio/visual equipment, and furniture
systems. Lessee153s contractor(s) and Lessor153s contractor(s) shall work in harmony
during the period of Lessee fit-up. Lessee and Lessee153s contractors shall have
reasonable access to the Premises during the construction (to be coordinated
with the General Contractor to install cabling and for the purpose of inspecting
the work in progress.
2.3. Inspection. Lessor and Lessor153s agents shall have the
right, but not the obligation, to inspect the construction of Lessee
Improvements from time to time. If Lessor shall give Lessee written notice of
faulty construction or any other deviation from the approved plans, Lessee shall
promptly make the necessary corrections to Lessor153s reasonable satisfaction.
However, neither the right herein granted to Lessor to make such inspections,
nor the making of such inspections by Lessor, shall operate as a waiver of any
rights of Lessor to require good and workmanlike performance of all Lessee
Improvements in strict accordance with plans approved by Lessor. Notwithstanding
any inspection by Lessor, Lessee acknowledges that Lessor153s sole interest in
doing so is to protect the Building and Lessor153s interests. Accordingly, Lessee
shall not rely upon Lessor153s inspections or approvals, and agrees that Lessor
shall not be the guarantor of, nor responsible for, the quality of any of Lessee
Improvements or the conformity of any Lessee Improvements with approved plans or
with any applicable legal requirements. Lessee shall be solely responsible for,
and shall remedy, at Lessee153s sole expense, any and all defects and
nonconformities in Lessee Improvements that may appear during or after the
completion thereof.
2.4. Ownership of Lessee Improvements. Unless otherwise
specified by Lessor, ownership of and responsibility for all Lessee Improvements
shall be governed by the provisions of the Lease.
2.5. Delays. The parties expressly acknowledge and agree
that none of Lessee153s obligations under the Lease (including Lessee153s obligation
to pay rent) shall be delayed, terminated or otherwise affected on account of
any delay in completion of the Lessee Improvements from any cause other than the
fault of Lessor.
2.6. Compliance. Access to the Premises for Lessee to
install Lessee Improvements is granted, when authorized under Section 2.2 above,
subject to all provisions of the Lease and this Work Letter and Lessee shall be
bound by and comply with all such provisions.
2.7. Costs. Lessee shall pay all costs and expenses related
to Lessee Improvements as and when due in compliance with Paragraph 10 of the
Lessee.
2.8. Lessee Allowance. Lessor agrees to reimburse Lessee for
the costs of Lessee153s Work paid by Lessee from the Lessor153s Work Allowance. The
Lessor153s Work Allowance can only be used to reimburse hard and soft costs of
improvements to the Premises including design costs or the purchase of furniture
or equipment. Lessor shall pay to Lessee within forty-five (45) days after the
date that Lessee requests the same; any such request shall be made only after
(a) Lessee submits to Lessor satisfactory evidence of qualified expenditures,
final completion of and full payment for all Lessee Improvements and expenses,
and compliance with all requirements of the Lease and this Work Letter regarding
the Lessee Improvements, (b) Lessee accepts the Premises and Lessor153s Work and
takes full occupancy of the Premises, and (c) General Contractor and all other
service providers are paid in full. Lessor shall have no obligation to pay the
TI Allowance at any time that a Lessee Default occurs and is outstanding, at any
time following termination of the Lease or of Lessee153s right of possession, or
if proper request for the same is not made on or before ninety (90) days
following the Commencement Date.
3. Default. Any failure by Lessee under the terms of this
Work Letter shall constitute a Default under the Lease in accordance with the
provisions of the Lease, and shall entitle Lessor to exercise all remedies set
forth in the Lease.
26
EXHIBIT “C”
SIGN CRITERIA
Conformity by Lessee to the following Sign Criteria requirements shall be
strictly enforced and are terms and conditions of the Lease.
|
1. |
GENERAL REQUIREMENTS |
1A. The term “Signage” as used herein and elsewhere within the Lease shall
include, but not be limited to, any signs, placards, banners, pennants,
lettering, insignias, trademarks, marquees, art work, and any and all other
display and advertising materials.
1B. Lessee shall not install or display any Signage anywhere on the Premises,
Project or Property without Lessor153s prior written consent, such consent not to
be unreasonably withheld, delayed or conditioned. Such Signage approval by
Lessor, shall include, but not be limited to, Lessee Signage installed or
displayed on or attached to any glass areas, doors, roofs, walls, landscaped
areas, walkways, vehicles, machinery or other apparatus, whether permanently
affixed to or from time to time on or about the Property. Lessor hereby consents
to Lessee153s installation of signage on the Building153s roof, eyebrow and at
Project monuments.
1C. Lessor reserves the right to designate the location and quantity of all
Lessee Signage.
1D. The size, design, content, color and other physical aspects of Lessee
Signage, as well as the materials, fabrication and installation methods to be
employed, must be approved by Lessor, in writing, prior to commencement of any
Signage fabrication or installation. No exposed conduit, tubing, “J” box or
raceway is permitted on any Lessee Signage. Flashing, moving or audible Lessee
Signage is prohibited. The composition, size, style, height, color, etc. of
Lessor approved signage is attached hereto.
1E. All Lessee Signage must comply with any and all governing laws, codes,
regulations, covenants and restrictions. No labels will be permitted on the
exposed surface of any Lessee Signage, except those labels required by any
governing authority.
1F. The Lease Section 27.12 shall control with respect to the allocation of
the cost and expense related to signage.
1G. Should Lessee fail to maintain its Signage at a standard to be determined
by Lessor in its reasonable discretion, then Lessor may, without any recourse by
Lessee or liability by Lessor to Lessee, remove or restore such sub-standard
Signage. Any Lessee Signage removed or restored on behalf of Lessee by Lessor,
shall be at Lessee153s sole cost and expense, payable immediately upon demand by
Lessor.
1H. Lessor reserves the right to require Lessee to have Signage and, if so
required, Lessee Signage must be completed and installed within 60 days after
Lessee153s Lease Term commences. Lessor reserves the right to require Lessee to
utilize vendors preapproved or designated by Lessor for all Lessee Signage and
Signage related matters. In the event Lessor designates, refers or approves a
specific sign vendor, Lessor shall not be responsible or liable in any way for
any disputes between such vendor and Lessee.
1I. All Lessee Signage shall only contain Lessee153s choice of either its legal
name or its Trade Name as it appears in the Lease. No Lessee Signage or Lessee
Signage content shall create any claim, expressed or implied, of a Transfer as
defined in the Lease.
1J. Upon expiration or earlier termination of the Lease, or if Lessee
installs or displays Signage which does not comply with the terms and conditions
of this Sign Criteria, Lessor, in addition to any other remedy, reserves the
right to require Lessee to remove its Signage, or any part thereof, and to
require Lessee to repair and restore all areas and surfaces of the Property
affected by such removal. Such restoration and repair work shall include, but
not be limited to, removal of any associated electrical wiring, patching of
damaged areas and painting to match surrounding surfaces. Should Lessee, after
demand by Lessor, fail to remove any Signage designated for removal by Lessor or
fail to repair and restore any affected areas, Lessor shall have the right to do
so at Lessee153s sole cost and expense.
1K. Subject to the other terms hereof, Lessee will have the right to display
Lessee153s signage on the sign monument to be located outside the Building, as
well as on the walls of elevator lobbies of the floors of the Premises adjacent
to entry doors and on the lobby directory for the Premises. All interior signs
shall be provided at the sole cost of Lessor, with any and all costs and
expenses incurred in connection with the monument sign for Lessee to be included
as part of the Costs of Lessor153s Work and deducted from the Lessor153s Total Work
Allowance. Section 27.12 of the Lease shall govern with respect to the
requirement of Lessor153s approval for Lessee153s signage.
27
EXHIBIT “D”
RULES AND REGULATIONS
1.01 The following Rules and Regulations now in effect govern Lessee153s use of
the Premises and any part of the Project or Property used in common by Lessee.
Lessee will be bound by such Rules and Regulations and agrees to use its
reasonable efforts to cause Lessee153s employees, agents, contractors, suppliers,
invitees and licensees to observe the same.
1.02 Wherever Lessor provides standard window coverings, such coverings shall
not be altered, removed or replaced by Lessee. Wherever Lessor does not provide
standard window coverings, selection and installation of window coverings by
Lessee shall be subject to Lessor153s prior written approval, such approval not to
be unreasonably withheld, delayed or conditioned. If Lessor objects to any item
attached to, or used in connection with or on any window, other glass area, or
interior or exterior wall, Lessee will immediately upon notification remove such
objectionable item or discontinue such use. Further, Lessee agrees not to place
anything in close proximity to any window or glass area of the Premises that may
appear from the outside of the Premises.
1.03 Lessee will not use any sidewalks, hallways, entrances, elevators,
stairways, exits, lobbies or any other areas used in common by lessees of the
Property other than for normal ingress or egress; Lessee shall not obstruct use
of any such area. Lessor will in all cases retain the right to control and
prevent access to such areas by all persons whose presence in the reasonable
judgment of Lessor would be prejudicial to the safety, character, reputation
and/or interest of the Property and/or its lessees. Neither Lessee nor its
employees, agents, contractors, suppliers, invitees or licensees shall go on any
roof or ladder, in any mechanical rooms, or climb on any exterior structures of
any nature on the Property without Lessor153s prior written consent, such consent
not to be unreasonably withheld, delayed or conditioned.
1.04 Lessor reserves the right, exercisable without notice and without
liability to Lessee, to change the name, street and/or address of any part of
the Property. With the exception of Lessee153s address, Lessee shall not use the
name of the Property or any part thereof in connection with promoting or
advertising Lessee153s business. Lessor will have the right to prohibit publicity
by Lessee, which in Lessor153s reasonable opinion impairs the reputation or
marketability of the Property or any part thereof.
1.05 Lessee shall not keep or allow to be used any foul or noxious gas or
substance in or about the Premises. Nor shall Lessee occupy or use the Premises
in any manner that is objectionable or offensive to other lessees or Lessor by
reason of odor, noise, vibration or interference in any way. Any equipment or
device of Lessee which causes noise or vibration that may be transmitted to any
structural portion of the Property or to any part therein to such a degree as to
be objectionable to any lessee or Lessor must be approved in writing by Lessor
prior to its installation and be placed and maintained by Lessee, at Lessee153s
expense, on vibration eliminators or other devices sufficient to eliminate such
noise or vibration. Lessee shall keep the Premises free of rodents, insects and
other vermin.
1.06 Lessee will not use or keep in the Premises, or on or about the
Property, any kerosene, gasoline or flammable or combustible fluid or material
other than those limited quantities necessary for the operation or maintenance
of general office equipment.
1.07 Lessor reserves the right to exclude or expel from the Property any
person who, in Lessor153s reasonable judgment, is intoxicated or under the
influence of liquor or drugs or who is in violation of any of the rules and
regulations of the Property.
1.08 Lessee shall not alter or re-key any lock or bolt or install any new or
additional locks or bolts on any doors of the Premises without prior written
consent from Lessor, such consent not to be unreasonably withheld, delayed or
conditioned. Upon the termination of its tenancy, Lessee will provide Lessor
with all keys, whether furnished or otherwise procured, and shall be responsible
for the cost of replacing any keys that are lost.
1.09 The Premises will not be used for lodging or for any improper, immoral
or objectionable purpose. No cooking will be done or permitted on the Premises
(except in the kitchen area) or elsewhere on the Property without Lessor153s
consent, except that the preparation of coffee, tea, hot chocolate and similar
beverages and employee use of a microwave oven will be permitted, provided that
such equipment and use is in accordance with all applicable federal, state,
county and city laws, codes, ordinances and any manufacturer153s guidelines and
recommendations. Tenant will be allowed to barbeque on a deck or on the parking
area behind the Premises.
1.10 Lessee will not solicit business from other lessees of the Property.
Canvassing, soliciting, peddling and distribution of handbills or any other
written material is prohibited, and Lessee will cooperate with Lessor to prevent
such activities.
1.11 Lessee agrees to comply with and not to restrict or impair in any way,
all safety, fire protection and evacuation procedures and regulations
established by Lessor or any governmental agency. Lessee shall not do or permit
any act or bring anything on the Property or any part thereof which shall
obstruct or unreasonably interfere with the rights of other lessees.
1.12 Except for the ordinary hanging of pictures and wall decorations, Lessee
will not mark, drive nails, screw, cut or drill into the partitions, woodwork,
ceilings or plaster, or in any way deface, mar, paint or penetrate the Premises
or
28
any part of the Property, except in accordance with the Lessee Alteration
provisions of the Lease. Additionally, Lessee will not affix any floor covering
to the floor of the Premises in any manner except as approved by Lessor.
1.13 No electrical wiring, outlets or apparatus shall be installed or altered
by Lessee, except in accordance with the Lessee Alteration provisions of the
Lease. Lessor reserves the right to direct where and how telephone and other
telecommunication wires are to be introduced to the Premises. Lessee may not
alter or overburden the designed capacity of any existing electrical outlets.
1.14 Lessee shall not place or affix any radio or television antennas,
satellite dishes, loudspeakers or other similar devices, awnings, outside
furniture, etc. on the roof, exterior walls or outside of any building or on any
other part of the Property without Lessor153s prior written approval, such
approval not to be unreasonably withheld, delayed or conditioned. Additionally
Lessee will not place any signs, advertising, billboards, lighting, or any other
devices or means of advertising or identification on property adjacent to the
Property that in Lessor153s opinion obstructs, impairs, restricts or in any way,
in Lessor153s reasonable opinion, negatively affects the Property or would not be
permitted by the terms of this Lease or these Rules and Regulations if such
action were taken on the Property.
1.15 Lessor reserves the right to prescribe the weight, size and position of
all equipment, materials, furniture or other property brought on to the
Property. Such Lessor approved items shall be moved in or about the Property
under the direction of Lessor and in a manner and at such times that will not
inconvenience any lessee. Lessor reserves the right to prohibit or impose
conditions upon the installation of objects which may overload any floor.
1.16 Subject to the terms of Paragraph 8 of this Lease, all parking
facilities of the Property shall be regulated by Lessor and may be modified or
amended as Lessor deems necessary. Lessee shall not permit or allow any vehicles
that belong to or that are controlled by Lessee or Lessee153s employees, customers
or invitees to be loaded, unloaded or parked in areas other than those
designated by Lessor for such activities. Users of the parking areas will obey
all posted signs and not impede the flow of traffic. For sale signs for vehicles
must be on the vehicle. Washing, waxing, cleaning or servicing of any vehicle is
prohibited. No campers, recreational vehicles or trailers are permitted and all
disabled vehicles must be removed within 24 hours. No vehicles shall be brought
into or kept in the Premises. Lessor reserves the right to tow, without cost or
liability to Lessor, any vehicle: 1) parked in an unauthorized or illegal
parking area or; 2) whose audio theft alarm system remains engaged for an
unreasonable period; and 3) belonging to any violator of any of Lessor153s parking
rules and regulations. Further, in addition to all of its other rights and
remedies, Lessor reserves the right to refuse to permit any person to park
within the Property who violates any of these or any other rules or regulations
which Lessor may establish.
1.17 Lessee shall not do any act that will create any additional costs to
maintain the appearance or cleanliness of any part of the Property. No dirt or
other substances shall be disposed of anywhere on the Property, including but
not limited to in any hallways, stairways, elevators or lobbies or on any
parking areas, landscaping, walkways or in any other areas used in common with
other lessees.
1.18 Lessee assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage, which includes keeping Premises doors locked
and all doors into common areas such as doors into entrances, public corridors,
lobbies, etc., closed, except for normal ingress and egress.
1.19 No signage, notices or advertisements may be placed by Lessee anywhere
outside of its Premises and all signage must comply with the Sign Criteria
exhibit attached to and made a part of this Lease and any other terms and
conditions of these Rules and Regulations and the Lease.
1.20 Lessee shall not use any method of heating or air conditioning other
than as provided by Lessor without Lessor153s prior written consent, such consent
not to be unreasonably withheld, delayed or conditioned.
1.21 Lessor may prohibit smoking within Lessee153s Premises, the Project, or
any part thereof, and may require Lessee and any of its agents, employees,
suppliers, customers, guests and invitees who desire to smoke, to smoke within
specifically designated smoking areas which Lessor may change from time to time.
It will be Lessee153s sole responsibility to ascertain from Lessor the specific
smoking program in effect at the Property at the time of its lease commencement.
Any smoking program implemented by Lessor will be strictly enforced.
1.22 Rest room partitions, mirrors, wash basins and other plumbing fixtures
shall not be used for any purpose other than that for which they were
constructed and no sweepings, trash or other substances shall be disposed of
therein. Any damage or injuries caused by Lessee, its employees, agents,
contractors, suppliers, invitees or licensees shall be borne directly by Lessee.
1.23 No heavy items may be transported by elevator if such item or items
exceed the load capacity of the elevator. Lessee153s initial move in and
subsequent deliveries of bulky items, such as furniture, equipment, supplies,
merchandise, safes and similar items will be subject to reasonable scheduling
and approval of persons moving such items by Lessor. Deliveries during normal
office hours shall be limited to normal office supplies and other small items.
Lessee shall be responsible for protecting elevator interior and exterior
finishes and flooring whenever items are transported in them on Lessee153s behalf.
1.24 Lessee will not waste electricity, water or air conditioning and agrees
to cooperate fully with Lessor in this regard and to comply with any Lessor or
governmental energy-saving rules, laws and regulations.
29
1.25 Lessee understands that air conditioning and heating systems supply cool
air and heat to large zones regulated by zonal thermostats. Lessor shall
determine the locations of, make any modifications to, and have exclusive
control over all such thermostats, their settings, the zones and all parts of
the system. Lessee agrees to cooperate with other parties within its zone(s) to
maximize the comfort level of all parties and shall not touch, adjust, tamper
with, or otherwise affect any thermostat or any part of the heating/cooling
systems. Lessee will direct all problems related to heating/cooling systems
directly to Lessor.
1.26 Subject to the terms of Paragraph 9 of this Lease, Lessor shall be under
no obligation to provide heating or air conditioning services to the building
during off-hours (between 6:00 p.m. and 7:00 a.m., Monday through Friday and on
non-business days). Lessee may request additional heating or air conditioning
during off hours and, should Lessor agree to supply such service, Lessee will
reimburse Lessor for all costs and expenses incurred, as determined by Lessor in
its sole discretion.
1.27 Lessor and its agents reserve the right to exclude from the building any
unknown person, or any person otherwise improperly identified. Lessor shall in
no case be liable for any damages for any error with regard to the admission to
or exclusion from the building of any person. In the case of invasion, mob,
riot, public excitement or any other circumstance which Lessor, in its sole
discretion, believes will place lessees and/or the Property in jeopardy, Lessor
reserves the right to prevent access to the building during the continuance of
same by such action as Lessor may deem appropriate.
1.28 Lessee153s designated representative shall notify Lessor promptly of any
required maintenance items for which Lessor is responsible. Employees of Lessor
will not perform any work or do anything outside of their regular duties unless
under special instruction by Lessor.
1.29 No Lessee shall employ any person or persons other than the janitor of
Lessor for the purpose of cleaning its Premises unless otherwise agreed to by
Lessor in writing. No Lessee shall cause any unnecessary labor by reason of
Lessee153s carelessness or indifference in the preservation of good order and
cleanliness. Lessor shall not be responsible to any lessee for any loss of
property on the Premises or on or about the Property, however occurring, or for
any damage done to any effects of any lessee by the janitor or any other
employee or any other person.
1.30 Neither Lessee nor any of its employees, agents, contractors, suppliers,
invitees or licensees may use on any portion of the Premises, Project or
Property any hand truck except those equipped with rubber tires and side guards
or such other material-handling equipment as Lessor may approve or require.
1.31 These Rules and Regulations impose obligations upon Lessee which are in
addition to the obligations of Lessee set forth in the Lease. Nothing in these
Rules and Regulations will be construed in any way to diminish or to waive, in
whole or in part, the terms, covenants, agreements and conditions of the Lease.
In the event that provisions of both these Rules and Regulations and also of the
Lease regulate the same subject matter, Lessee shall comply with all such
provisions; if any such provisions are in direct conflict, the provisions of the
Lease shall control. Lessor shall enforce these Rules and Regulations in a
nondiscriminatory manner as against all tenants of the Building and Project
subject to reasonable variances granted by Lessor.
1.32 Lessor reserves the right to adopt such additional reasonable and
nondiscriminatory Rules and Regulations (whether similar or dissimilar to these
Rules and Regulations), and/or such amendments to any Rule or Regulation, as, in
its judgment, may from time to time be appropriate and Lessee agrees to abide by
all such additional Rules and Regulations and amendments which may be adopted.
1.33 Notwithstanding anything to the contrary contained in the Lease, Lessee
shall have the right, on a first come-first served, reservation basis to use the
common conference rooms located on the Property.
1.34 Landlord agrees to allow Tenant to place a bike rack outside the
Premises.
30
FIRST AMENDMENT AND
LESSOR CONSENT TO ASSIGNMENT AND ASSUMPTION
THIS FIRST AMENDMENT and LESSOR CONSENT TO ASSIGNMENT AND
ASSUMPTION (collectively, this “Agreement” and
sometimes referred to herein as the “Amendment“) is made and
entered into as of the 13th day of May, 2010, by and between
PS BUSINESS PARKS, L.P., a California limited partnership
(“Lessor“), DIGIMARC CORPORATION, a Delaware
Corporation (“Lessee” or “Assignor”) and DIGIMARC CORPORATION,
an Oregon corporation (“Surviving Entity“).
RECITALS
|
A. |
Lessor and Lessee (formerly known as DMRC Corporation, and as successor in |
|
B. |
Lessee and Surviving Entity have entered into an Agreement and Plan of Merger |
|
C. |
Lessee and Surviving Entity have requested Lessor153s consent to the Merger and |
|
D. |
The Lease by its terms shall expire on August 31, 2011 (“Prior |
|
E. |
Lessor, Lessee and Surviving Entity mutually desire that the Lease be amended |
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee
agree as follows:
|
A. |
Amendment. Lessor, Lessee and Surviving Entity agree |
I. Extension. The Term of the Lease is hereby
extended for a period of 60 months and shall expire on August 31, 2016
(“Extended Termination Date“), unless sooner terminated in
accordance with the terms of the Lease. That portion of the Term commencing the
day immediately following the Prior Termination Date (“Extension
Date“) and ending on the Extended Termination Date shall be referred to
herein as the “Extended Term“.
II. Base Rent. The Base Rent, Additional Rent and all
other charges under the Lease shall be payable as provided therein with respect
to the Premises through and including December 31, 2010, subject to the Cap (as
defined in Section IV below) on Lessee153s Proportionate Share of Operating
Expenses for calendar year 2010). Notwithstanding anything to the contrary
contained in the Lease, effective as of January 1, 2011, the schedule of Base
Rent payable with respect to the Premises for the balance of the original Term
and the Extended Term is the following:
|
Period |
Annual Rate |
Annual |
Monthly |
|||||||
|
1/1/11 : 12/31/11 |
$ |
16.75 |
$ |
771,890.25 |
$ |
64,324.19 |
||||
|
1/1/12 : 12/31/12 |
$ |
17.34 |
$ |
799,079.28 |
$ |
66,589.94 |
||||
|
1/1/13 : 12/31/13 |
$ |
17.95 |
$ |
827,189.88 |
$ |
68,932.49 |
||||
|
1/1/14 : 12/31/14 |
$ |
18.58 |
$ |
856,222.20 |
$ |
71,351.85 |
||||
|
1/1/15 : 12/31/15 |
$ |
19.23 |
$ |
886,176.12 |
$ |
73,848.01 |
||||
|
1/1/16 : 8/31/16 |
$ |
19.90 |
$ |
917,051.76 |
* |
$ |
76,420.98 |
|||
|
* |
Tenant shall only be liable for the Monthly Base Rent due for each month |
All such Base Rent shall be payable by Lessee in accordance with the terms of
the Lease, as amended hereby.
III. Additional Security Deposit. No additional
security deposit shall be required in connection with this Amendment.
IV. Operating Expenses. For the period commencing on
January 1, 2011 and ending on the Extended Termination Date, Lessee shall pay
for Lessee153s Proportionate Share of the increase in Operating Expenses over the
Base Year in accordance with the terms of the Lease, as amended hereby,
provided, however, during such period, the Base Year for the computation of
Lessee153s Proportionate Share of Operating Expenses is amended from 2005 to 2011.
Notwithstanding the foregoing or anything to the contrary set forth in Article 4
of the Lease, effective January 1, 2011, electricity for the Premises and the
Building (to the extent that the Premises constitutes 100% of the Building and
except to the extent attributable to the common areas of the Project and/or
Property) shall no longer be a part of the definition of Utility and Service
Costs (as defined in Section 4.03B of the Lease) and shall no longer be included
as a part of Operating Expenses. Instead, electricity costs for the Premises and
the Building (to the extent that the Premises constitutes 100% of the Building
and except to the extent attributable to the common areas of the Project and/or
Property) shall be treated as a separate and distinct category which shall no
longer be subject to the Base Year and instead shall be subject to a Premises
Electricity Cost Expense Stop as more fully described in Section V below. Lessor
and Lessee acknowledge and agree that, pursuant to Section 4.05B of the Lease,
Lessee owes Lessor approximately $33,000.00 in connection with Lessee153s
underpayment of actual Operating Expenses for calendar year 2009 (the
“2009 Operating Expense Underpayment“). Lessor hereby (i)
waives any claim to the 2009 Operating Expense Underpayment, (ii) agrees that
the existence of the 2009 Operating Expense Underpayment is not, and was not, a
Default, event of default, or other similar occurrence under the Lease, and
(iii) agrees that Tenant has fully paid all of its obligations on account of
Operating Expenses attributable to calendar year 2009. In addition,
notwithstanding anything herein or in the Lease to the contrary, Lessee153s
Proportionate Share of Operating Expenses for calendar year 2010 shall not
exceed the sum of $54,420.00 (the “Cap“); provided, however,
that the Cap set forth herein shall not be deemed applicable to any additional
space added to the Premises at any time or from time to time, unless expressly
so provided in any amendment to the Lease. In consideration of the foregoing,
Lessee hereby waives any interest in any overpayment of actual Operating
Expenses for calendar year 2010, which amounts, if any, shall be for the sole
benefit of Lessor, it being understood that Lessee shall not be entitled to any
credit, abatement or other concession in connection therewith. Lessor agrees to
act in a commercially reasonable manner in incurring Operating Expenses, taking
into consideration the class and the quality of the Building and Project and
shall extrapolate Operating Expenses in accordance with the methodology used to
extrapolate Operating Expenses in comparable buildings owned by Lessor and its
affiliates in the geographic area in which the Building and Project is located.
Lessee agrees to act in a commercially reasonable manner to control those items
of Operating Expenses within Lessee153s reasonable control to avoid an
unreasonable increase in Operating Expenses incurred during the 2010 and 2011
calendar years.
V. Premises Electricity Costs.
|
A. |
Premises Electricity Costs Stop. Effective January 1, 2011, |
|
B. |
Premises Electricity Costs. Premises Electricity Costs shall |
|
C. |
Premises Electricity Costs Excess Payments. Lessee153s |
|
(i) |
Lessee153s Premises Electricity Costs Excess estimates: As soon as is practical |
|
(ii) |
Lessee153s Proportionate Share of actual annual Premises Electricity Costs |
|
D. |
Audit. Lessee shall have the right to audit Premises |
VI. Improvements to Premises.
|
A. |
Condition of Premises. Lessee is in possession of the |
|
B. |
Responsibility for Improvements to Premises. Lessee may |
|
C. |
HVAC. Lessor hereby agrees to (a) replace the three (3) |
(i) Lessor to replace the existing roof-top HVAC unit designated by the
parties as RTU#1 and the base control system before the end of calendar year
2010. Lessor and Lessee will reasonably cooperate with one another to coordinate
the replacement of such unit with the construction of the Lessee Improvements
(as defined in Exhibit A attached hereto) except that in no
event shall any delay in Lessee153s construction schedule affect Lessor153s
obligation to replace such system before the end of calendar year 2010;
(ii) Lessor to replace a second existing roof-top HVAC unit and make
necessary additions to the then existing base control system to accommodate the
same before the end of calendar year 2011; and
(iii) Lessor to replace the third and final existing roof-top HVAC unit and
make necessary additions to the then existing base control system to accommodate
the same before the end of calendar year 2012.
All of the new HVAC units shall be of tonnage commensurate with and
appropriate to those being replaced. All new units shall meet government
standards for refrigerant type and energy efficiency (410 a 13 SEER). The
control system shall be direct digital, either BACnet or LON capable, with alarm
points and alerts. Building manager functions shall be included. Lessor shall
install units which shall maintain the existing redundancy for the existing
server room and Lessor shall plan and install the system for such existing
redundancy to be maintained.
Except to the extent caused by Lessee or any of Lessee153s agents153,
contractors153 or employees153 acts and/or omissions or as a result of casualty,
Lessor shall perform such replacements at its sole cost and expense and such
costs shall not be included in Operating Expenses; provided, however, that
Lessee shall reimburse Lessor for the cost and expense of the unit to be
installed in calendar year 2012 as described in C(iii) above (the “2012
Unit“) by payments of monthly Additional Rent in an amount that would
fully amortize the cost and expense of the 2012 Unit over fifteen (15) years.
Such Additional Rent obligation shall continue until such cost and expense is
fully amortized or until the expiration of the Extended Term, as it may be
extended from time to time, whichever comes first.
VII. Roof Space for Dish/Antenna.
|
A. |
As of the date of this Amendment, Lessee shall have the right to lease space |
|
B. |
Lessor agrees that Lessee, upon reasonable prior written notice to Lessor, |
|
C. |
Lessee agrees to install and maintain only equipment of types and frequencies |
|
other steps necessary to eliminate the interference. If said interference |
|
D. |
The Dish/Antenna, the appurtenances and the Aesthetic Screening, if any, |
|
E. |
In light of the specialized nature of the Dish/Antenna, Lessee shall be |
|
F. |
Lessee shall not allow any provider of telecommunication, video, data or |
|
G. |
If Lessee defaults under any of the terms and conditions of this Section or |
VIII. Other Pertinent Provisions. Lessor and Lessee
agree that, effective as of the date of this Amendment (unless different
effective date(s) is/are specifically referenced in this Section), the Lease
shall be amended in the following additional respects:
|
A. |
Operating Expenses. Section 4.02 of the Lease is hereby |
“Operating Expenses shall exclude the following:
(i) Any ground lease rental;
(ii) Costs of capital improvements, replacements or equipment and any
depreciation or amortization expenses thereon, except to the extent (A)
reasonably intended to produce a reduction in Operating Expenses, (B) required
by any Laws, or for health or safety purposes, (C) for commercially reasonable
improvements to or replacements of any components of the Common Areas, which
costs shall be uniformly applied to all tenants of the Project, or (D) for
reimbursement of the 2012 Unit as described in Section VI.C above.
(iii) Rentals for items (except when needed in connection with normal repairs
and maintenance of permanent systems) which if purchased, rather than rented,
would constitute a capital improvement excluded in clause (ii) above;
(iv) Costs incurred by Lessor for the maintenance of, or the repair of damage
to, the Building, Project and/or Property, to the extent that Lessor is
reimbursed by insurance proceeds or directly by Lessees;
(v) Costs, including permit, license and inspection costs, incurred with
respect to the installation of Lessee or other occupant improvements made for
Lessees or other occupants in the Building, the Project and/or the Property or
incurred in renovating or otherwise improving, decorating, painting or
redecorating vacant space for or the premises of other Lessees or other
occupants of the Building;
(vi) Marketing costs, including leasing commissions, attorneys153 fees in
connection with the negotiation and preparation or enforcement of letters, deal
memos, letters of intent, leases, subleases and/or assignments, space planning
costs, and other costs and expenses incurred in connection with lease, sublease
and/or assignment negotiations and transactions with present or prospective
Lessees or other occupants of the Building, Project or the Property;
(vii) Costs incurred by Lessor due to the violation by Lessor of the terms
and conditions of any lease of space in the Building or the Project;
(viii) interest, principal, points and fees on debt or amortization payments
on any mortgage or deed of trust or any other debt instrument encumbering the
Building, Project or Property or the land on which the Building or Project is
situated;
(ix) Except for making repairs or keeping permanent systems in operation
while repairs are being made, rentals and other related expenses incurred in
leasing air conditioning systems, elevators or other equipment ordinarily
considered to be of a capital nature;
(x) Advertising and promotional expenditures (except for retail property
promotions);
(xi) Costs incurred in connection with upgrading the Building, Project or
Property to comply with disability, life, fire and safety codes in effect prior
to the issuance of the temporary certificate of occupancy for the Building;
(xii) Interest, fines or penalties incurred as a result of Lessor153s failure
to make payments when due unless such failure is commercially reasonable under
the circumstances;
(xiii) Costs arising from Lessor153s charitable or political contributions;
(xiv) The depreciation of the Building and other real property structures on
the Property;
(xv) Lessor153s general corporate overhead and general administrative expenses
not related to the operation of the Building or the Project;
(xvi) Any bad debt loss, rent loss or reserves for bad debts or rent loss, or
reserves for equipment or capital replacement.”
|
B. |
Lessee Alterations. Notwithstanding anything to the contrary |
|
C. |
Holdover. The percentage set forth in third sentence of |
|
D. |
Estoppel Certificate. The references to ten (10) days in the |
|
E. |
Subordination. The fourth sentence of Section 25 of the |
“Lessee acknowledges that although this Paragraph is self-executing, Lessee
covenants and agrees to execute and deliver, within fifteen (15) days of demand
by Lessor and in the form reasonably requested by Lessor, or any other mortgagee
or ground lessor, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
lease or the lien of any such mortgage or deed of trust, provided Lessee153s
interests hereunder shall not be disturbed so long as Lessee is not in default
hereunder.”
|
F. |
Lessor153s Work. The parties hereby acknowledge and agree that |
|
B. |
Consent to Merger and Assignment and Assumption. |
|
I. |
Assignment and Assumption. Lessee |
|
II. |
Representations. |
|
A. |
Assignor hereby represents and warrants that Assignor: (i) had full power and |
|
B. |
The Surviving Entity hereby represents and warrants that the Surviving |
|
C. |
Lessee and the Surviving Entity represent and warrant that following the |
|
III. |
No Greater Rights. In no event shall |
|
IV. |
Deliveries. Prior to Lessor153s execution of this |
|
V. |
Lessor153s Consent. In reliance upon |
|
VI. |
Notice Address. Any notices to |
|
VII. |
No Waiver. Lessor153s consent to the |
|
C. |
Miscellaneous. |
|
I. |
This Amendment sets forth the entire agreement between the parties with |
|
II. |
Except as herein modified or amended, the provisions, conditions and terms of |
|
III. |
In the case of any inconsistency between the provisions of the Lease and this |
|
IV. |
Submission of this Amendment by Lessor is not an offer to enter into this |
|
V. |
The capitalized terms used in this Amendment shall have the same definitions |
|
VI. |
Lessee hereby represents to Lessor that Lessee has dealt with no broker in |
|
VII. |
Each signatory of this Amendment represents hereby that he or she has the |
|
VIII. |
Redress for any claim against Lessor under the Lease and this Amendment shall |
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, Lessor and Lessee have duly executed
this Amendment as of the day and year first above written.
|
LESSOR: |
||||
|
PS BUSINESS PARKS, L.P., a California limited partnership |
||||
|
By: |
PS BUSINESS PARKS, INC., a California corporation |
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|
By: |
||||
|
Name: Coby A. Holley |
||||
|
Title: Vice President |
||||
|
LESSEE: |
||
|
DIGIMARC CORPORATION, a Delaware corporation |
||
|
By: |
||
|
Name: |
||
|
Title: |
||
|
SURVIVING ENTITY: |
||
|
DIGIMARC CORPORATION, an Oregon corporation |
||
|
By: |
||
|
Name: |
||
|
Title: |
||
EXHIBIT A
LESSEE IMPROVEMENT AGREEMENT
This Exhibit is attached to and made a part of the Amendment by and between
PS BUSINESS PARKS, L.P., a California limited partnership
(“Lessor“) and DIGIMARC CORPORATION, an Oregon
corporation (“Lessee“) for space in the Building
located at 9405 SW Gemini Drive, Beaverton, Oregon 97008. Capitalized terms not
otherwise defined in this Exhibit A shall have the meaning
given to such terms in the Lease of which this Exhibit A is a
part.
1. Lessee, following the full and final execution and delivery of the
Amendment to which this Exhibit A is attached, shall have the
right to perform alterations and improvements in the Premises, including, but
not limited to, modifications, alterations and improvements to the server rooms
(the “Server Rooms Modifications“) which are located in the
Premises (the “Lessee Improvements“). Notwithstanding the
foregoing, Lessee and its contractors shall not have the right to perform the
Lessee Improvements in the Premises unless and until Lessee has complied with
all of the terms and conditions of Article 10 of the Lease (except for the
requirement of obtaining advance lien waivers, which requirement shall be
superseded by the terms of Section 2 below), including, without limitation,
approval by Lessor of the final plans for the Lessee Improvements and the
contractors to be retained by Lessee to perform such Lessee Improvements. Lessee
shall be responsible for all elements of the design of Lessee153s plans
(including, without limitation, compliance with law, functionality of design,
the structural integrity of the design, the configuration of the Premises and
the placement of Lessee153s furniture, appliances and equipment), and Lessor153s
approval of Lessee153s plans shall in no event relieve Lessee of the
responsibility for such design. Lessor153s approval of the contractors to perform
the Lessee Improvements shall not be unreasonably withheld. The parties agree
that Lessor153s approval of the general contractor to perform the Lessee
Improvements shall not be considered to be unreasonably withheld if any such
general contractor (a) does not have trade references reasonably acceptable to
Lessor, (b) does not maintain insurance as required pursuant to the terms of the
Lease, (c) does not have the ability to be bonded for the work in an amount of
no less than 150% of the total estimated cost of the Lessee Improvements, (d)
does not provide current financial statements reasonably acceptable to Lessor,
or (e) is not licensed as a contractor in the state/municipality in which the
Premises is located. Lessee acknowledges the foregoing is not intended to be an
exclusive list of the reasons why Lessor may reasonably withhold its consent to
a general contractor.
2. Provided Lessee is not in default under the terms of the Lease, Lessor
agrees to contribute the sum of $368,664.00 (the “Lessee Improvement
Allowance“) toward the cost of performing the Lessee Improvements in
preparation of Lessee153s occupancy of the Premises. The Lessee Improvement
Allowance may only be used for the cost of permitting, preparing design and
construction documents and mechanical and electrical plans for the Lessee
Improvements and for hard costs in connection with the Lessee Improvements. The
Lessee Improvement Allowance, less a 10% retainage (which retainage shall be
payable as part of the final Lessee Improvements, in periodic disbursements
within 30 days after receipt of the following documentation: (a) an application
for payment and sworn statement of the contractor substantially in the form of
AIA Document G-702 covering all work for which disbursement is to be made to a
date specified therein; (b) a certification from an AIA architect substantially
in the form of the Architect153s Certificate for Payment which is located on AIA
Document G702, Application and Certificate of Payment; (c) contractor153s,
subcontractor153s and material supplier153s conditional waivers of liens which shall
cover all Lessee Improvements for which disbursement is being requested and all
other statements and forms required for compliance with the mechanics153 lien laws
of the state in which the Premises is located, together with all such invoices,
contracts, or other supporting data as Lessee or Lessee153s Mortgagee may
reasonably require; (e) a cost breakdown for each trade or subcontractor
performing the Lessee Improvements; (d) plans and specifications for the Lessee
Improvements, together with a certificate from an AIA architect that such plans
and specifications comply in all material respects with all laws affecting the
Building, Property and Premises; (f) copies of all construction contracts for
the Lessee Improvements, together with copies of all change orders, if any; and
(g) a request to disburse from Lessee containing an approval by Lessee of the
work done and a good faith estimate of the cost to complete the Lessee
Improvements. Upon completion of the Lessee Improvements, and prior to final
disbursement of the Lessee Improvement Allowance, Lessee shall furnish Lessor
with: (i) general contractor and architect153s completion affidavits; (ii) full
and final waivers of lien; (iii) receipted bills covering all labor and
materials expended and used; (iv) as-built plans of the Lessee Improvements; and
(v) the certification of Lessee and its architect that the Lessee Improvements
have been installed in a good and workmanlike manner in accordance with the
approved plans, and in accordance with applicable Laws. In no event shall Lessor
be required to disburse the Lessee Improvement Allowance more than one time per
month. If the Lessee Improvements exceed the Lessee Improvement Allowance,
Lessee shall be entitled to the Lessee Improvement Allowance in accordance with
the terms hereof, but each individual disbursement of the Lessee Improvement
Allowance shall be disbursed in the proportion that the Lessee Improvement
Allowance bears to the total cost for the Lessee Improvements, less the 10%
retainage referenced above. Notwithstanding anything herein to the contrary,
Lessor shall not be obligated to disburse any portion of the Lessee Improvement
Allowance during the continuance of an uncured default under the Lease, and
Lessee153s obligation to disburse shall only resume when and if such default is
cured.
3. In no event shall the Lessee Improvement Allowance be used for the
purchase of equipment, furniture or other items of personal property of Lessee.
Notwithstanding the foregoing, Lessee shall be entitled to apply the Lessee
Improvement Allowance to the cost of purchasing and installing equipment which
is necessary and related to the Server Rooms Modifications, which equipment
shall be located at all times in the Premises and be for the use of Tenant. If
Lessee does not submit a request for payment of the entire Lessee Improvement
Allowance to Lessor in accordance with the provisions contained in this Exhibit
A by November 30, 2011, any unused amount shall accrue to the sole benefit of
Lessor, it being understood that Lessee shall not be entitled to any credit,
abatement or other concession in connection therewith. Notwithstanding the
foregoing, Lessee shall not submit a request for payment of any portion of the
Lessee Improvement Allowance prior to January 1, 2011. Lessee shall be
responsible for all applicable state sales or use taxes, if any, payable in
connection with the Lessee Improvements and/or Lessee Improvement Allowance.
Lessor shall be entitled to deduct from the Lessee Improvement Allowance a
construction management fee for Lessor153s oversight of the Lessee Improvements in
the amount of $5,000.00 and such construction management fee shall be in lieu of
the fee required under Section 10.03 of the Lease.
4. Without limiting the “as-is” provisions of the Lease and this Amendment,
Lessee accepts the Premises in its “as-is” condition and acknowledges that
Lessor has no obligation to make any changes or improvements to the Premises or,
except as provided above with respect to the Lessee Improvement Allowance and as
provided in Section A.VI of the Amendment with respect to the HVAC, to pay any
costs expended or to be expended in connection with any such changes or
improvements in the Premises.
5. This Exhibit A shall not be deemed applicable to any
additional space added to the Premises at any time or from time to time, whether
by any options under the Lease or otherwise, or to any portion of the original
Premises or any additions to the Premises in the event of a renewal or extension
of the original Term of the Lease, whether by any options under the Lease or
otherwise, unless expressly so provided in the Lease or any amendment or
supplement to the Lease. Lessee shall not perform any work in the Premises
(including, without limitation, cabling, wiring, fixturization, painting,
carpeting, replacements or repairs) except in accordance with Article 10 of the
Lease.
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