**Exhibit 10.7**

**STANDARDOFFICE LEASE AGREEMENT (NET)**

** **

**THISLEASE AGREEMENT**(hereafter called the “**Lease Agreement**”) made as of the             dayof August, 2002 by and between **UNITED PROPERTIES INVESTMENT LLC**, aMinnesota limited liability company having offices at Suite 200, 3500 West 80thStreet, Bloomington, Minnesota, 55431 (hereafter called the “**Landlord**”)and **CORVUCORPORATION**, a Minnesota corporation (hereafter called the “**Tenant**”).

 

**WITNESSETH**

**FOR AND IN CONSIDERATION** of the sum of One Dollar ($1.00) in hand paid by eachof the parties to the other, and other good and valuable consideration, receiptand sufficiency of which is hereby acknowledged, the parties hereby agree asfollows:

# **ARTICLE 1 - PREMISES AND TERM**

## A.    Landlord does hereby lease and let untoTenant, and Tenant does hereby hire, lease and take from Landlord, that areaoutlined in red or otherwise described on Exhibit A-1 attached hereto, and bythis reference incorporated herein, and described as Suite 445 containingapproximately 6,567 rentable square feet, (hereafter called the “Premises”) atSouthdale Place, 3400 West 66th Street (hereafter called the “Building”) in theCity of Edina, County of Hennepin, State of Minnesota.  The term Building as it is used herein shallconsist of the land and building(s) set forth in Exhibit A-2 hereto.

## B.    To have and to hold said Premises for a termof sixty (60) months commencing September 1, 2002 and terminating August 31,2007 (hereafter called the “**Term**”) upon the rentals and subject to theconditions set forth in this Lease Agreement, and the Exhibits attachedhereto.  The commencement andtermination dates are specifically subject to the provisions of Article 5hereof.

# **ARTICLE 2 - USE**

The Premises shall beused by the Tenant solely for the following purposes: General office use

# **ARTICLE 3 - RENTALS**

Tenant agrees to pay toLandlord as minimum rental (hereafter called “**Minimum Rental**”) for thePremises, without notice, set-off or demand, the following amounts per month:

| **Month of Term**    |   | **Annual  Rate Per RSF** |   | **Monthly  Minimum Rental** |
|----------------------|--------|--------------------------|--------|-----------------------------|
| 1 to 12,  inclusive  |   | $9.50                    |   | $5,198.88                   |
| 13 to 24,  inclusive |   | $9.75                    |   | $5,335.69                   |
| 25 to 36,  inclusive |   | $10.00                   |   | $5,472.50                   |
| 37 to 48,  inclusive |   | $10.25                   |   | $5,609.31                   |
| 49 to 60,  inclusive |   | $10.50                   |   | $5,746.13                   |
|                      |        |                          |        |                             |  |

 

Said monthlyinstallments shall be due and payable by Tenant in advance on the first day ofeach calendar month during the Term of this Lease Agreement, or any extensionor renewal thereof, at the office of Landlord set forth in the preamble to thisLease Agreement or at such other place as Landlord may designate.  In the event of any fractional calendarmonth, Tenant shall pay for each day in such partial month a rental equal to1/30 of the Minimum Rental.  Tenantagrees to pay, as Additional Rental, which shall be collectible to the sameextent as Minimum Rental, all amounts which may become due to Landlordhereunder and any tax, charge or fee that may be levied, assessed or imposedupon or measured by the rents reserved hereunder by any governmental authorityacting under any present or future law before any fine, penalty, interest orcosts may be added thereto for non-payment. Pursuant to Article 6 hereof, Landlord’s estimated Operating Expensesfor 2002 are $7.03 per rentable square foot and estimated Real Estate Taxespayable in 2002 are $3.69 per rentable square foot.

# **ARTICLE 4 - CONSTRUCTION**

Tenant acknowledges andagrees that it shall be leasing the Premises in their existing “as is”condition without any obligation on the part of Landlord to make anyalterations, modifications or improvements thereto.  Any improvements to the Premises and the furnishing of thePremises, shall be made by Tenant at the sole cost and expense of Tenant,subject to all other provisions of this Lease Agreement, including Article 12hereof.  Notwithstanding the foregoing,on the commencement date of this Lease Agreement, Landlord shall furnish Tenantwith an allowance of $16,417.50 ($2.50 per rentable square foot of Premises) tobe utilized by Tenant for the installation of Wiring (as defined in Article 19hereof) and for such other purposes as Tenant may elect.

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# **ARTICLE 5 - POSSESSION**

It is acknowledged by theparties that Tenant is currently in possession of the Premises hereunderpursuant to a certain sublease agreement which expires on August 31, 2002.  On September 1, 2002 Landlord shall, withoutfurther act or deed of the parties, be deemed to have automatically deliveredpossession of the Premises hereunder to Tenant in the condition required bythis Lease Agreement.

# **ARTICLE 6 - TENANT’S PRO RATASHARE OF REAL ESTATE TAXES AND OPERATING EXPENSES**

## A.    During each full or partial calendar yearduring the Term of this Lease Agreement, Tenant shall pay to Landlord, asAdditional Rental, an amount equal to the Real Estate Taxes and OperatingExpenses (both as hereafter defined) per square foot of rentable area in theBuilding multiplied by the number of square feet of rentable area in thePremises prorated for the period that Tenant occupied the Premises.  In theevent that during all or any portion of any calendar year, the Building is notfully rented and occupied Landlord may make any appropriate adjustment inoccupancy-related Operating Expenses for such year for the purpose of avoidingdistortion of the amount of such Operating Expenses to be attributed to Tenantby reason of variation in total occupancy of the Building, by employing soundaccounting and management principles to determine Operating Expenses that wouldhave been paid or incurred by Landlord had the Building been ninety-five percent(95%) rented and occupied, and the amount so determined shall be deemed to havebeen Operating Expenses for such year.

 

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## B.    Landlord shall, each year during the Term ofthis Lease Agreement, give Tenant an estimate of Operating Expenses and RealEstate Taxes payable per square foot of rentable area for the coming calendaryear.  Tenant shall pay, as AdditionalRental, along with its monthly Minimum Rental payments required hereunder,one-twelfth (1/12) of such estimated Operating Expenses and Real Estate Taxesand such Additional Rental shall be payable until subsequently adjusted for thefollowing year pursuant to this Article.

## C.    As soon as possible after the expiration ofeach calendar year, but in no event later than one hundred twenty (120) daysthereafter, Landlord shall determine and certify to Tenant the actual OperatingExpenses and Real Estate Taxes for the previous year per square foot ofrentable area in the Building and the amount applicable to the Premises.  If such statement shows that Tenant’s shareof Operating Expenses and Real Estate Taxes exceeds Tenant’s estimated monthlypayments for the previous calendar year, then Tenant shall, within twenty (20)days after receiving Landlord’s certification, pay such deficiency toLandlord.  In the event of anoverpayment by Tenant, such overpayment shall be refunded to Tenant, at thetime of certification, in the form of an adjustment in the Additional Rentalnext coming due, or if at the end of the Term by a refund.  By giving written notice to Landlord nolater than ninety (90) days following receipt by Tenant of Landlord’s annualstatement, Tenant, by its agents or employees engaged on a non-contingency basedfee arrangement, shall have the right, at Tenant’s cost and expense, to auditthe books and records of Landlord and/or its property manager relating to theOperating Expenses and Real Estate Taxes that are the subject of suchstatement, said audit to be at the office of Landlord’s property manager and ona date reasonably acceptable to Landlord and Tenant.  Landlord shall be provided with a written report of such audit inreasonable detail and such audit shall be subject to verification and rebuttalby Landlord.  In the event such auditestablishes that Tenant was overcharged for Operating Expenses or Real EstateTaxes, the amount of such overcharge shall be refunded to Tenant in the form ofan adjustment in the Additional Rental next coming due, or if at the end of theTerm by a refund in cash.  Conversely,in the event such audit establishes that Tenant was undercharged for OperatingExpenses or Real Estate Taxes, the amount of such undercharge shall be paid byTenant to Landlord in cash within twenty (20) days following the conclusion ofthe audit.

## D.    For the purposes of this Article, the term “**Real EstateTaxes**” means the total of all taxes, fees, charges and assessments,general and special, ordinary and extraordinary, foreseen or unforeseen, whichbecome due and payable against or upon the Building, the parcel(s) of land uponwhich it is located, excluding, however, federal and state or other taxes onnet income, death taxes, excess profit taxes or franchise taxes or penalties onlate payment of Real Estate Taxes or assessments unless caused by Tenant.  All reasonable costs and expenses incurredby Landlord during negotiations for or contests of the amount of Real EstateTaxes shall be included within the term “Real Estate Taxes.” For purposes ofthis Article, the term “**Operating Expenses**” shall be deemed to meanall costs and expenses directly related to the Building incurred by Landlord inthe repair, operation, management and maintenance of the Building includinginterior and exterior and common area maintenance, management fees, cleaning expenses,energy expenses, insurance premiums, and the amortization of capitalinvestments made that are reasonably likely to reduce operating costs, that arenecessary due to governmental requirements or that are required by the insurerunder any insurance policy carried on the Building by Landlord, all asdetermined on a commercially reasonable basis by Landlord.  Notwithstanding anything herein to thecontrary, the term “Operating Expenses” shall not be deemed to include any ofthe costs or expenses set forth in Exhibit B attached hereto.

## E.     Landlord may at any time designate a fiscalyear in lieu of a calendar year and in such event, at the time of such achange, there may be a billing for the fiscal year which is less than 12calendar months.

## F.     Landlord reserves, and Tenant herebyassigns to Landlord, the sole and exclusive right to contest, protest, petitionfor review, or otherwise seek a reduction in the Real Estate Taxes.

# **ARTICLE 7 - UTILITIES AND SERVICE**

## A.    Landlord agrees to furnish water, electricity,elevator service, and janitorial service. In the event Tenant’s requirements and/or usage of such utilities andservices is substantially greater than is customarily supplied to a typicaltenant in the Building, Landlord or Tenant may request that the difference insuch requirement and/or usage be determined and that appropriate adjustments bemade in the Minimum Rental provided for in Article 3 of this Lease Agreement.

## B.    Landlord agrees to furnish heat during theusual heating season and air conditioning during the usual air conditioningseason in accordance with the standards of comparable office buildings, allduring normal business hours as defined in this Lease Agreement.  Notwithstanding the foregoing, uponreasonable advance notice by Tenant to Landlord, HVAC services shall be madeavailable to the Premises after normal business hours, at a charge to Tenantnot to exceed Landlord’s actual costs therefor.

## C.    No temporary interruption or failure of suchservices incidental to the making of repairs, alterations or improvements, ordue to accidents or strike or conditions or events not under Landlord’scontrol, shall be deemed as an eviction of the Tenant or relieve the Tenantfrom any of the Tenant’s obligations hereunder.  Notwithstanding the foregoing, in the event (i) either (x) suchinterruption or failure of services is caused by the negligence or willfulmisconduct of Landlord or (y) the restoration of such services is within thereasonable control of Landlord and Landlord fails to take commerciallyreasonable steps to restore such services as soon as reasonably possible, (ii)the interruption or failure of such services continues for a period of five (5)consecutive business days following notice by Tenant to Landlord, and (iii) asa result of such interruption or failure of services, the Premises, or aportion thereof are rendered untenantable and, in fact, Tenant does not use theuntenantable portion of the Premises for its normal business operations duringsaid period of time, then in such case, the payment of Minimum Rental andAdditional Rental under Article 6 of this Lease Agreement shall thereafterabate, in the proportion that the untenantable portion of the Premises bears tothe entire Premises, until such time as such services are restored to theuntenantable portion of the Premises or Tenant begins again to use suchPremises for its normal business operations, whichever occurs first.

## D.    For the purposes of this Article 7, normalbusiness hours shall be deemed to mean the periods of time between 6:00 a.m.and 6:00 p.m., Monday through Friday and 8:00 a.m. and 1:00 p.m. on Saturdays,and specifically excluding Sundays and legal holidays.  Notwithstanding the foregoing, Tenant shallhave elevator access to the Premises all day, every day subject to Landlord’scard access system and other security measures.

# **ARTICLE 8 - NON-LIABILITY OFLANDLORD**

Except in the event ofgross negligence of Landlord, its agents, employees or contractors and exceptas may otherwise be provided in Article 7C above, Landlord shall not be liableto Tenant or its employees for any loss or damage for failure to furnish heat,air conditioning, electricity, elevator service, water, sprinkler system orjanitorial service.  Landlord shall notbe liable to Tenant or its employees for personal injury, death or any damagefrom any cause about the Premises or the Building except if caused byLandlord’s gross negligence.

# **ARTICLE 9 - CARE OF PREMISES**

## A.    Tenant agrees:

### 1.     To keep the Premises in asgood condition and repair as they were in at the time Tenant took possession ofsame, reasonable wear and tear and damage from fire and other casualty forwhich insurance is normally procured excepted;

### 2.     To keep the Premises in aclean and sanitary condition;

### 3.     Not to commit any nuisanceor waste on the Premises, overload the Premises or the electrical, water and/orplumbing facilities in the Premises or Building, throw foreign substances inplumbing facilities, or waste any of the utilities furnished by Landlord;

### 4.     To abide by such rules andregulations as may from time to time be reasonably promulgated by Landlord;

 

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### 5.     To preserve and protect allcarpeted areas; and

### 6.     To obtain Landlord’s priorapproval, which approval shall not be unreasonably withheld, of the interiordesign of any portion of the Premises visible from the common areas or from theoutside of the Building.  “Interiordesign” as used in the preceding sentence shall include but not be limited tofloor and wall coverings, furniture, office design, artwork and color scheme.

## B.    If Tenant shall fail to keep and preservethe Premises in the state of condition required by the provisions of thisArticle 9, the Landlord may, at its option upon fifteen (15) days prior writtennotice to Tenant and failure of Tenant to cure during said period of time(except in the case of an emergency, when no notice or opportunity to cure needbe given), put or cause the same to be put into the condition and state ofrepair agreed upon, and in such case the Tenant, on demand, shall pay the costthereof.

## C.    Subjectto Landlord’s right to be paid for any Operating Expenses incurred by Landlordthat may properly apply and be payable in accordance with Article 6 above,Landlord shall keep in good order, condition and repair, the common areas ofthe Building as well as the structural parts of the Building, including theroof, load bearing walls, foundation and interior support columns and themechanical and utility systems of the Building (including the standard officemechanical and utility systems installed as part of the existing improvementsto the Premises, but excluding, however, any additional mechanical or utilitysystems that are installed by or on behalf of Tenant which are in addition tothose provided to typical office tenants in the Building) except that Tenantshall be responsible (subject to Article 17 below) for the cost of repairs thatare caused by the fault or negligence of Tenant, its contractors, agents,employees or invitees.

# **ARTICLE 10 - NON-PERMITTED USE**

Tenant agrees to use thePremises only for the purposes set forth in Article 2 hereof.  Tenant further agrees not to commit orpermit any act to be performed on the Premises or any omission to occur whichshall be in violation of any statute, regulation or ordinance of anygovernmental body (collectively, the “**Laws**”) or which will increase the insurancerates on the Building or which will be in violation of any insurance policycarried on the Building by the Landlord. Tenant, at its expense, shall comply with all Laws applicable toTenant’s specific use of the Premises and shall promptly comply with allgovernmental orders, rulings and directives for the correction, prevention andabatement of any violation in connection with Tenant’s specific use of thePremises, including the making of any alterations or improvements to thePremises, all at Tenant’s sole cost and expense.  The Tenant shall not disturb other occupants of the Building bymaking any undue or unseemly noise or otherwise and shall not do or permit tobe done in or about the Premises anything which will be dangerous to life orlimb.

# **ARTICLE 11 - INSPECTION**

So long as Tenant’s useof the Premises for its normal business operations is not materially interferedwith, the Landlord or its employees or agents shall have the right, uponreasonable advance notice to Tenant (except in the case of an emergency, whenno notice need be given) and without any diminution of rent or other chargespayable hereunder by Tenant, to enter the Premises at all reasonable times forthe purpose of exhibiting the Premises to prospective tenants or purchasers orexisting or prospective mortgagees of the Building (“**Mortgagees**”), inspection,cleaning, repairing, testing, altering or improving the same or said Building,but nothing contained in this Article shall be construed so as to impose anyobligation on the Landlord to make any repairs, alterations or improvements.

# **ARTICLE 12 - ALTERATIONS**

Tenantwill not make any alterations, repairs, additions or improvements in or to thePremises (for purposes of this Article 12, any of the foregoing being referredto as the “**Work**”) or add, disturb or in any way change any plumbing,wiring, life/safety or mechanical systems, locks, or structural portions of theBuilding without  the  prior written  consent of the Landlordas to the character of the Work, the manner of doing  the  Work, and the  contractor(s)  doing the  Work.  Such consent shall not be unreasonablywithheld or delayed, if such Work is required of Tenant or is the obligation ofTenant pursuant to this Lease Agreement. As a condition to Landlord’s consent to Work proposed by Tenant,Landlord may impose such reasonable conditions with respect thereto as Landlorddeems appropriate, including, without limitation, requiring Tenant to furnishsurety performance and/or payment bonds or other security for the payment ofall costs incurred in connection with such Work, insurance against liabilitiesthat may arise out of such Work, plans and specifications approved by Landlord,which approval shall not be unreasonably withheld or delayed and permitsnecessary for such Work. Notwithstanding anything herein to the contrary, Tenant may, without theconsent of Landlord, perform Work of a non-structural nature costing no morethan $2,500.00 in any one instance so long as the plumbing, wiring, life/safetyand mechanical systems of the Building are not disturbed or changed in any wayand Tenant gives Landlord at least twenty (20) days written notice prior toperforming such Work describing in reasonable detail the nature of same and thecontractor(s) doing the Work.  If anysuch Work is performed by contractor(s) not retained by Landlord, Tenant shallupon completion of such Work, (i) deliver to Landlord evidence that payment forall such Work has been made by Tenant, contractors’  affidavits and full and final mechanic’s lien waivers and (ii)pay to Landlord a construction supervision fee of five percent (5%) of thetotal cost of such Work, but in no event less than $500.00 to reimburseLandlord for the costs incurred by its construction manager in inspecting andsupervising such Work. All such Work shall be done in a good and workmanlikemanner using quality materials and shall comply with all applicable governmentallaws, ordinances, rules and regulations. Tenant agrees to indemnify and holdLandlord free and harmless from any liability, loss, cost, damage or expense(including reasonable attorney’s  fees)arising out of  any  of such Work performed by or on behalf of Tenant.  The provisions of Article 27 of this Lease Agreement shall applyto all Work performed under this Article 12.

# **ARTICLE 13 - SIGNS**

Tenant agrees that nosigns or other advertising materials shall be erected, attached or affixed toany portion of the interior or exterior of the Premises or the Building withoutthe express prior written consent of Landlord. Landlord hereby consents to Tenant’s existing suite-entry signage andfurther agrees that Tenant may continue to have its name included in thedirectory for the Building.  It isacknowledged by the parties that Tenant’s name is currently on the monumentsign for the Building (the “**Monument Sign**”).  Subject to the following terms and conditions, Tenant maycontinue to have its name on the Monument Sign under this Lease Agreement.However, in the event Landlord shall enter into a lease agreement with a thirdparty tenant and such third party tenant has required under such leaseagreement that its name and/or logo be on the Monument Sign, either (i) atLandlord’s expense, Tenant’s name shall be removed from the Monument Signentirely if such third party tenant will be leasing more space in the Buildingthan Tenant hereunder or (ii) otherwise, the location and/or size of Tenant’sname on the Monument Sign shall be adjusted at Landlord’s expense, so as toenable such third party tenant to have its name and/or logo included on theMonument Sign.

# **ARTICLE 14 - COMMON AREAS**

##                 A.    Tenantagrees that the use of all corridors, passageways, elevators, toilet rooms,parking areas and landscaped areas in and around said Building, by the Tenantor Tenant’s employees, visitors or invitees, shall be subject to suchreasonable rules and regulations as may from time to time be made by Landlordfor the safety, comfort and convenience of the owners, occupants, tenants andinvitees of said Building.  Tenantagrees that no awnings, curtains, drapes or shades shall be used upon thePremises except as may be approved by Landlord; provided, however, Landlordhereby approves all awnings, curtains, drapes or shades currently located onthe Premises.

## B.    In addition to the Premises, Tenant shallhave the right of non-exclusive use, in common with others, of (a) allunrestricted automobile parking areas, driveways and walkways, and (b) loadingfacilities, freight elevators and other facilities as may be constructed in theBuilding, all to be subject to the terms and conditions of this Lease Agreementand to reasonable rules and regulations for the use thereof as prescribed fromtime to time by Landlord.

## C.    Landlord shall have the right to makechanges or revisions in the site plan and in the Building so as to provideadditional leasing area.  Landlord shallalso have the right to construct additional buildings on the land described onExhibit A-2 for such purposes as Landlord may deem appropriate.  Landlord also reserves all airspace rightsabove, below and to all sides of the Premises, including the right to makechanges, alterations or provide additional leasing areas.  In exercising its rights under this Article14 C, Landlord shall not materially alter Tenant’s access or visibility to thePremises.

 

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## D.    Landlord and Tenant agree that Landlord willnot be responsible for any loss, theft or damage to vehicles, or the contentsthereof, parked or left in the parking areas of the Building and Tenant agreesto so advise its employees, visitors or invitees who may use such parkingareas.  The parking areas shall includethose areas designated by Landlord, in its sole discretion, as eitherrestricted or unrestricted parking areas. Any restricted parking areas shall be leased only by separate licenseagreement with Landlord.  Tenant furtheragrees not to use or permit its employees, visitors or invitees to use theparking areas for overnight storage of vehicles except on an occasional basiswhen special circumstances so required.

# **ARTICLE 15 - ASSIGNMENT ANDSUBLETTING**

## A.    Tenant agrees not to assign, sublet,license, mortgage or encumber this Lease Agreement, the Premises, or any partthereof, whether by voluntary act, operation of law, or otherwise, without  the specific  prior  written consent  of  Landlord in  each  instance, which consent shall not beunreasonably withheld or delayed by Landlord.  If Tenant is a corporation, partnership or other legal entity, transferof a controlling interest of Tenant shall be considered an assignment of thisLease Agreement for purposes of this Article. Notwithstanding anything herein to the contrary, Tenant may, without theconsent of Landlord, (i) assign this Lease Agreement or sublet all or any partof the Premises to an Affiliate of Tenant or (ii) assign this Lease Agreementto a person or entity (an “**Acquiring Entity**”) which acquires all, orsubstantially all of the assets of Tenant by purchase of capital stock or otherownership interest, purchase of assets, consolidation, merger or otherwise,provided that as demonstrated by Tenant, said Acquiring Entity has at the timeof said assignment a tangible net worth at least as great as the tangible networth of Tenant at the time of said assignment.  As used herein, an “**Affiliate**” of Tenant shall be deemed to beany entity which either controls, is controlled by or is under common controlwith Tenant, with “control” meaning the power to direct the management andpolicies, directly or indirectly, through the ownership of voting ownershipinterests.  Consent by Landlord in onesuch instance shall not be a waiver of Landlord’s rights under this Article as torequiring consent for any subsequent instance. In the event Tenant desires tosublet a part or all of the Premises, or assign this Lease Agreement, includingto an Affiliate or Acquiring Entity of Tenant, Tenant shall give written noticeto Landlord at least thirty (30) days prior to the proposed subletting orassignment, which notice shall state the name of the proposed subtenant orassignee, the terms of any sublease or assignment documents and if proposed toa person or entity other than an Affiliate of Tenant, copies of financialreports or other relevant financial information of the proposed subtenant orassignee. At Landlord’s option and with the exception of an assignment orsubletting to an Affiliate of Tenant or an assignment to an Acquiring Entity ofTenant, any and all payments by the proposed assignee or subtenant with respectto the assignment or sublease shall be paid directly to Landlord, it beingfurther agreed by the parties that notwithstanding any other provision of thisArticle 15 to the contrary, any “profit” form the assignment of this LeaseAgreement or a subletting of the Premises shall be shared equally betweenLandlord and Tenant.  In any event noassignment or subletting, including to an Affiliate or Acquiring Entity ofTenant, shall release Tenant of its obligation to pay the rent and to performall other obligations to be performed by Tenant hereunder for the Term of thisLease Agreement.  The acceptance of rentby Landlord from any other person shall not be deemed to be a waiver byLandlord of any provision hereof.  AtLandlord’s option and with the exception of an assignment or subletting to anAffiliate of Tenant or an assignment to an Acquiring Entity of Tenant, Landlordmay terminate the Lease Agreement in lieu of giving its consent to any proposedassignment of this Lease Agreement or subletting of all of the Premises (whichtermination may be contingent upon the execution of a new lease with theproposed assignee or subtenant).

## B.    Landlord’s right to assign this Lease Agreementis and shall remain unqualified upon any sale or transfer of the Building and,providing the purchaser succeeds to the interests of Landlord under this LeaseAgreement, Landlord shall thereupon be entirely freed of all obligations of theLandlord hereunder and shall not be subject to any liability resulting from anyact or omission or event occurring after such conveyance.

# **ARTICLE 16 - LOSS BY CASUALTY**

If the Building is eitherdestroyed by fire or other casualty or damaged to such an extent that such damagecannot reasonably be repaired within ninety (90) days, the Landlord shall havethe right to terminate this Lease Agreement, provided it gives written noticethereof to the Tenant within ninety (90) days after such damage or destruction.  If a portion of the Premises is damaged byfire or other casualty, and Landlord does not elect to terminate this LeaseAgreement, the Landlord shall, at its expense, restore the Premises to as nearthe condition which existed immediately prior to such damage or destruction, asreasonably possible, and the rentals shall abate during such period of time asthe Premises are untenantable, in the proportion that the untenantable portionof the Premises bears to the entire Premises. Notwithstanding the foregoing, if the Premises are not, in fact, sorestored by Landlord within two hundred ten (210) days of the date of such fireor other casualty, Tenant shall have the right to terminate this LeaseAgreement by giving written notice of termination to Landlord no later than fifteen(15) days following the end of said two hundred ten (210) day period.

# **ARTICLE 17 - WAIVER OF SUBROGATION**

Landlord and Tenanthereby release the other from any and all liability or responsibility to theother or anyone claiming through or under them by way of subrogation orotherwise for any loss or damage to property caused by fire or any of theextended coverage or supplementary contract casualties, even if such fire orother casualty shall have been caused by the fault or negligence of the other party,or anyone for whom such party may be responsible.

# **ARTICLE 18 - EMINENT DOMAIN**

If the entire Building istaken by eminent domain, this Lease Agreement shall automatically terminate asof the date of taking.  If a portion ofthe Building itself or a material portion of the land accompanying the Buildingis taken by eminent domain, the Landlord shall have the right to terminate thisLease Agreement, provided it gives written notice thereof to the Tenant withinninety (90) days after the date of taking. If all or such a significant portion of Tenant’s Premises within theBuilding are taken by eminent domain so that the remaining portion thereof isnot suitable for the conduct of Tenant’s business as determined in thecommercially reasonable judgment of the parties, then Tenant shall have theright to terminate this Lease Agreement provided it gives written notice toLandlord within sixty (60) days of the date of taking.   If a portion of the Premises is taken byeminent domain and this Lease Agreement is not terminated by either Landlord orTenant as provided above, the Landlord shall, at its expense, restore thePremises to as near the condition which existed immediately prior to the dateof taking as reasonably possible, and the rentals shall abate during suchperiod of time as the Premises are untenantable, in the proportion that theuntenantable portion of the Premises bears to the entire Premises.  Further, in the event the rentable squarefootage of the Premises is reduced as a result of such taking, there shall be aproportionate adjustment in the rentals thereafter coming due under this LeaseAgreement.  All damages awarded for suchtaking under the power of eminent domain shall belong to and be the soleproperty of Landlord, irrespective of the basis upon which they are awarded,provided, however, that nothing contained herein shall prevent Tenant frommaking a separate claim to the condemning authority for its moving expenses andtrade fixtures.  For purposes of thisArticle, a taking by eminent domain shall include Landlord’s giving of a deedunder threat of condemnation.

# **ARTICLE 19 - SURRENDER**

##                 On the last day of the Term of this Lease Agreementor on the sooner termination thereof in accordance with the terms hereof,Tenant shall peaceably surrender the Premises in good condition and repairconsistent with Tenant’s duty to make repairs as provided in Article 9hereof.  On or before said last day,Tenant shall at its expense remove all of its equipment from the Premises,repairing any damage caused thereby, and any property not removed shall bedeemed abandoned.  All alterations,additions and fixtures other than Tenant’s trade fixtures, which have been madeor installed by either Landlord or Tenant upon the Premises shall remain asLandlord’s property and shall be surrendered with the Premises as a partthereof, or shall be removed by Tenant, at the option of Landlord, in whichevent Tenant shall at its expense repair any damage caused thereby; provided,however, Tenant shall have no obligation hereunder to remove any of theimprovements to the Premises existing as of the date hereof or to remove anyalteration, addition or improvement hereafter made to the Premises by or onbehalf of Tenant unless within ten (10) days following Tenant’s notice of suchalteration, addition or improvement under Article 12 above, Landlord notifiesTenant that removal will be so required. It is specifically agreed that any and all telephonic, coaxial,ethernet, or other computer, wordprocessing, facsimile, or electronic wiringinstalled by Tenant within the Premises (hereafter “**Wiring**”) shall be removed atTenant’s cost at the expiration of the Term, unless Landlord has specificallyrequested in writing that said Wiring shall remain, whereupon said Wiring shallbe surrendered with the Premises as Landlord’s property.  If the Premises are not surrendered at theend of the Term or the sooner termination thereof, Tenant shall indemnifyLandlord against loss or liability resulting from delay by Tenant in sosurrendering the Premises, including, without limitation, claims made by anysucceeding tenant founded on such delay. Tenant shall promptly surrender all keys for the Premises to Landlord atthe place then fixed for payment of rental and shall inform Landlord ofcombinations on any locks and safes on the Premises.

 

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# **ARTICLE 20 - NON-PAYMENT OF RENT,DEFAULTS**

If any one or more of thefollowing occurs: (1) a rent payment or any other payment due from Tenant toLandlord shall be and remain unpaid in whole or in part for more than ten (10)days following written notice by Landlord to Tenant of non-payment, except thatif Landlord has given one (1) or more of such notices within the precedingtwelve (12) month period, no such prior notice need be given by Landlord andTenant shall be in default under this Lease Agreement if the payment is notmade by Tenant within ten (10) days of the date the same is due and payable;(2) Tenant shall violate or default on any of the other covenants, agreements,stipulations or conditions herein, or in any parking agreement(s) or otheragreements between Landlord and Tenant relating to the Premises, and suchviolation or default shall continue for a period of thirty (30) days (or suchlonger period of time, not to exceed an additional sixty (60) days, as isreasonable under the circumstances if the violation or default is of the typethat cannot reasonably be cured within thirty (30) days and Tenant promptlycommences such cure and at all time diligently pursues same) after writtennotice from Landlord of such violation or default; or (3) if Tenant shallcommence or have commenced against Tenant proceedings under a bankruptcy,receivership, insolvency or similar type of action, provided, however, in thecase of any involuntary proceedings, Tenant shall have a period of sixty (60)days to have such proceedings dismissed; then it shall be optional forLandlord, without further notice or demand, to cure such default or to declarethis Lease Agreement forfeited and the said Term ended, or to terminate onlyTenant’s right to possession of the Premises, and to re-enter the Premises,with or without process of law, using such force as may be necessary to removeall persons or chattels therefrom, and Landlord shall not be liable for damagesby reason of such re-entry or forfeiture; but notwithstanding re-entry byLandlord or termination only of Tenant’s right to possession of the Premises,the liability of Tenant for the rent and all other sums provided herein shallnot be relinquished or extinguished for the balance of the Term of this LeaseAgreement and Landlord shall be entitled to periodically sue Tenant for allsums due under this Lease Agreement or which become due prior to judgment,  but such suit shall not bar subsequent suitsfor any further sums coming due thereafter. Tenant shall be responsible for, in addition to the rentals and othersums agreed to be paid hereunder, the cost of any necessary maintenance, repair,restoration, reletting (including related cost of removal or modification oftenant improvements consistent with office use) or cure as well as reasonableattorney’s fees incurred or awarded in any suit or action instituted byLandlord to enforce the provisions of this Lease Agreement, regain possessionof the Premises, or the collection of the rentals due Landlord hereunder.  Tenant shall also be liable to Landlord forthe payment of a late charge in the amount of ten percent (10%) of the rentalinstallment or other sum due Landlord hereunder if said payment has not beenreceived within ten (10) days from the date said payment becomes due andpayable, or cleared by Landlord’s bank within three (3) business days afterdeposit.  Tenant agrees to pay interestat the rate of twelve percent (12%) per annum or the maximum permissible rateunder the applicable usury statutes, whichever is less, on all rentals andother sums due Landlord hereunder not paid within ten (10) days from the datesame become due and payable.  Each rightor remedy of Landlord provided for in this Lease Agreement shall be cumulativeand shall be in addition to every other right or remedy provided for in thisLease Agreement now or hereafter existing at law or in equity or by statute orotherwise.

# **ARTICLE 21 - LANDLORD’S DEFAULT**

Landlord shall not bedeemed to be in default under this Lease Agreement until Tenant has givenLandlord written notice specifying the nature of the default and Landlord doesnot cure such default within thirty (30) days after receipt of such notice or withinsuch reasonable time thereafter as may be necessary to cure such default wheresuch default is of such a character as to reasonably require more than thirty(30) days to cure.

# **ARTICLE 22 - HOLDING OVER**

Tenantwill, at the expiration of this Lease Agreement, whether by lapse of time ortermination, give up immediate possession to Landlord.  If Tenant fails to give up possession theLandlord may, at its option, serve written notice upon Tenant that suchholdover constitutes any one of (i) creation of a month-to-month tenancy, or(ii) creation of a tenancy at sufferance. If Landlord does not give said notice, Tenant’s holdover shall create atenancy at sufferance.  In any such eventthe tenancy shall be upon the terms and conditions of this Lease Agreement,except that the Minimum Rental shall be one hundred fifty percent (150%) of theMinimum Rental Tenant was obligated to pay Landlord under this Lease Agreementimmediately prior to termination (in the case of tenancy at sufferance suchMinimum Rental shall be prorated on the basis of a 365 day year for each dayTenant remains in possession); excepting further that in the case of a tenancyat sufferance, no notices shall be required prior to commencement of any legalaction to gain repossession of the Premises. In the case of a tenancy at sufferance, Tenant shall also pay toLandlord all damages sustained by Landlord resulting from retention ofpossession by Tenant.  The provisions ofthis Article shall not constitute a waiver by Landlord of any right of re-entryas otherwise available to Landlord; nor shall receipt of any rent or any otheract in apparent affirmance of the tenancy operate as a waiver of the right toterminate this Lease Agreement for a breach by Tenant hereof.

# **ARTICLE 23 - SUBORDINATION**

Tenant agrees that thisLease Agreement shall be subordinate to any mortgage(s) that may now orhereafter be placed upon the Building or any part thereof, and to any and alladvances to be made thereunder, and to the interest thereon, and all renewals,replacements, and extensions thereof, provided the Mortgagee named in any suchmortgage shall agree to recognize this Lease Agreement and not disturb Tenant’srights hereunder in the event of foreclosure provided the Tenant is not indefault.  This subordination andnon-disturbance shall be self-operative and no further certificate orinstrument of subordination need be required by any such Mortgagee.  In confirmation of such subordination andnon-disturbance, however, Tenant shall promptly execute and deliver anyinstrument, in recordable form, as required by Landlord’s Mortgagee.  In the event of any Mortgagee electing tohave the Lease Agreement a prior encumbrance to its mortgage, then and in suchevent upon such Mortgagee notifying Tenant to that effect, this Lease Agreementshall be deemed prior in encumbrance to the said mortgage, whether this LeaseAgreement is dated prior to or subsequent to the date of said mortgage.

# **ARTICLE 24 - INDEMNITY, INSURANCEAND SECURITY**

##                 A.    Tenantwill keep in force at its own expense for so long as this Lease Agreementremains in effect public liability insurance with respect to the Premises inwhich Landlord shall be named as an additional insured, in companies and inform acceptable to Landlord with a minimum combined limit of liability of TwoMillion Dollars ($2,000,000.00).  Thislimit shall apply per location.  Saidinsurance shall also provide for contractual liability coverage by endorsement.  Tenant shall further provide for businessinterruption insurance to cover a period of not less than six (6) months.  Tenant will further deposit with Landlordthe policy or policies of such insurance or certificates thereof, or otheracceptable evidence that such insurance is in effect, which evidence shallprovide that Landlord shall be notified in writing thirty (30) days prior tocancellation, material change, or failure to renew the insurance.  Subject to Article 17 hereof with respect todamage to property and except to the extent caused by the negligence or willfulmisconduct of the party seeking indemnification, each party covenants andagrees to indemnify and hold the other party (including in the case of Tenantas the indemnifying party, Landlord’s property manager) harmless for any claim,loss or damage, including reasonable attorney’s fees, suffered by the otherparty or such property manager caused by: i) any act or omission by theindemnifying party, its employees, contractors or agents in, at, or around thePremises or the Building; ii) the conduct or management of any work or thingwhatsoever done by the indemnifying party, its contractors, agents or employeesin or about the Premises or the Building; or iii) the indemnifying party’sfailure to comply with any and all Laws in breach or violation of Tenant’sobligations under Article 10 of this Lease Agreement in the case of Tenant asthe indemnifying party or that are applicable to the Building (exclusive of thePremises) in the case of Landlord as the indemnifying party.  The parties’ respective indemnityobligations under this Article 24 shall survive the expiration or earliertermination of this Lease Agreement.  IfTenant shall not comply with its covenants made in this Article 24, Landlordmay, at its option upon fifteen (15) days’ prior written notice to Tenant,cause insurance as aforesaid to be issued and in such event Tenant agrees topay the premium for such insurance promptly upon Landlord’s demand.

## B.    Tenant shall be responsible for the securityand safeguarding of the Premises and all property kept, stored or maintained inthe Premises.  Landlord will makeavailable to Tenant, at Tenant’s request, the plans and specifications forconstruction of the Building and the Premises. The placement and sufficiency ofall safes, vaults, cash or security drawers, cabinets or the like placed uponthe Premises by Tenant shall be at the sole responsibility and risk ofTenant.  Tenant shall maintain in forcethroughout the Term, insurance upon all contents of the Premises, includingthat owned by others and Tenant’s equipment and any alterations, additions,fixtures, or improvements in the Premises acknowledged by Landlord to be theTenant’s.

 

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## C.    Landlord shall carry and cause to be in fullforce and effect a fire and extended coverage insurance policy on the Building,but not contents owned, leased or otherwise in possession of Tenant.  The cost of such insurance shall be anOperating Expense.

# **ARTICLE 25 - NOTICES, DEMANDS ANDOTHER INSTRUMENTS**

All notices, demands,requests, consents, approvals and other instruments required or permitted to begiven pursuant to the terms of this Lease Agreement shall be in writing andshall be deemed to have been properly given if (a) with respect to Tenant, sentby registered mail, postage prepaid, or sent by telegram, overnight expresscourier, facsimile followed by overnight express delivery or delivered by hand,in each case addressed to Tenant at the address for the Premises, and (b) withrespect to Landlord, sent by registered mail, postage prepaid, or sent bytelegram, overnight express courier, facsimile followed by overnight expressdelivery or delivered by hand in each case, addressed to Landlord at itsaddress first above set forth along with a copy to any Mortgagee, if Tenant hasbeen advised of the address for such Mortgagee, delivered in the same manner;provided however that in no event shall Minimum Rental or Additional Rental bedeemed to have been made, given or delivered until actually received byLandlord.  Landlord and Tenant shalleach have the right from time to time to specify as its address for purposes ofthis Lease Agreement any other address in the United States of America uponfifteen (15) days’ written notice thereof, similarly given, to the other partyand any Mortgagee.

# **ARTICLE 26 - APPLICABLE LAW**

This Lease Agreementshall be construed under the laws of the State of Minnesota.

# **ARTICLE 27 - MECHANICS’ LIEN**

In the event anymechanic’s lien shall at any time be filed against the Premises or any part ofthe Building by reason of work, labor, services or materials performed orfurnished to Tenant or to anyone holding the Premises through or under Tenant,Tenant shall forthwith cause the same to be discharged of record or ifcontested by appropriate proceedings, bonded over.  If Tenant shall fail to cause such lien forthwith to be sodischarged or bonded over within twenty (20) days after being notified of thefiling thereof, then, in addition to any other right or remedy of Landlord,Landlord may, but shall not be obligated to, discharge the same by paying theamount claimed to be due, or by bonding, and the amount so paid by Landlord andall costs and expenses, including reasonable attorney’s fees incurred byLandlord in procuring the discharge of such lien, shall be due and payable infull by Tenant to Landlord on demand.

# **ARTICLE 28 - QUIET ENJOYMENT**

Landlord covenants thatit has the right to make and enter into this Lease Agreement for the Termhereof and covenants that so long as Tenant complies with its obligations underthis Lease Agreement, Tenant shall, during the Term of this Lease Agreement orany extensions thereof, peaceably and quietly occupy and enjoy the Premisessubject, however, to the express provisions of this Lease Agreement.

# **ARTICLE 29 - BROKERAGE**

Each of the partiesrepresents and warrants that except only as may be provided below in thisArticle 29, there are no claims for brokerage commissions or finder’s fees(collectively “**Leasing Commissions**”) in connection with this Lease Agreement,and agrees to indemnify the other party against, and hold it harmless from allliabilities arising from any claim for Leasing Commissions asserted by abroker, agent or other person or entity claiming through the indemnifyingparty, including without limitation, the cost of attorney’s fees in connectiontherewith.  Landlord agrees to pay anyLeasing Commission payable to Landlord’s broker, United Properties BrokerageLLC on account of this Lease Agreement. Landlord further agrees to pay a Leasing Commission to Tenant’s broker,CB Richard Ellis, Inc. in the total amount of $9,850.50 ($1.50 per rentablesquare foot of Premises), payable one half (1/2) upon full execution of thisLease Agreement and one half (1/2) upon occupancy of the Premises by Tenant andthe commencement of Tenant’s obligation to pay Minimum Rental therefor.

# **ARTICLE 30 - SUBSTITUTION**

Landlord reserves theright, on thirty (30) days written notice to Tenant, to substitute otherpremises within the Building for the Premises hereunder.  The substituted premises shall containsubstantially the same square footage as the Premises, shall contain comparableimprovements, and the Minimum Rental shall not exceed the Minimum Rental perrentable square foot specified in Article 3 hereof.  Upon presentation to Landlord of paid receipts or otherreasonable evidence of payment by Tenant, Landlord shall reimburse Tenant forthe reasonable out-of-pocket costs and expenses actually incurred by Tenant inmoving to the substituted premises, including the cost of a reasonable supplyof replacement stationery.

# **ARTICLE 31 - ESTOPPEL CERTIFICATESAND FINANCIAL STATEMENTS**

Each party hereto agreesthat at any time, and from time to time during the Term of this Lease Agreement(but not more often than twice in each calendar year), within ten (10) daysafter request by the other party hereto, it will execute, acknowledge anddeliver to such other party or to any prospective purchaser, assignee ormortgagee designated by such other party, an estoppel certificate in a formacceptable to Landlord.  Tenant agreesthat unless its annual report is readily available to the public, Tenant willprovide Landlord (but not more often than twice in any calendar year), withinten (10) days of request, the then most current financial statements of Tenant andof any guarantors of this Lease Agreement which may subsequently guarantee thisLease Agreement, which shall be certified by Tenant, and if available, shall beaudited and certified by a certified public accountant.  Landlord shall keep such financial statementsconfidential, except Landlord shall, in confidence, be entitled to disclosesuch financial statements to existing or prospective Mortgagees or purchasersof the Building.

# **ARTICLE 32 - GENERAL**

##                 This Lease Agreement does not create the relationshipof principal and agent or of partnership or of joint venture or of anyassociation between Landlord and Tenant, the sole relationship between Landlordand Tenant being that of landlord and tenant. No waiver of any default of Tenant hereunder shall be implied from anyomission by Landlord to take any action on account of such default if suchdefault persists or is repeated, and no express waiver shall affect any defaultother than the default specified in the express waiver and that only for thetime and to the extent therein stated. The covenants of Tenant to pay the Minimum Rental and the AdditionalRental are each independent of any other covenant, condition, or provisioncontained in this Lease Agreement.  Themarginal or topical headings of the several Articles, paragraphs and clausesare for convenience only and do not define, limit or construe the contents ofsuch Articles, paragraphs or clauses. All preliminary negotiations are merged into and incorporated in thisLease Agreement.  This Lease Agreementcan only be modified or amended by an agreement in writing signed by theparties hereto.  All provisions hereofshall be binding upon the heirs, successors and assigns of each party hereto.  If any term or provision of this LeaseAgreement shall to any extent be held invalid or unenforceable, the remaindershall not be affected thereby, and each other term and provision of this LeaseAgreement shall be valid and be enforced to the fullest extent permitted bylaw.  If Tenant is a legal entity, eachindividual executing this Lease Agreement on behalf of said entity representsand warrants that he is duly authorized to execute and deliver this LeaseAgreement on behalf of said entity in accordance with a duly adopted resolutionof the governing body of said entity or in accordance with the organizationaldocuments of said entity, and that this Lease Agreement is binding upon saidentity in accordance with its terms.  Noreceipt or acceptance by Landlord from Tenant of less than the monthly rentherein stipulated shall be deemed to be other than a partial payment on accountfor any due and unpaid stipulated rent; no endorsement or statement of anycheck or any letter or other writing accompanying any check or payment of rentto Landlord shall be deemed an accord and satisfaction, and Landlord may acceptand negotiate such check or payment without prejudice to Landlord’s rights to(i) recover the remaining balance of such unpaid rent or (ii) pursue any otherremedy provided in this Lease Agreement. Neither party shall record this Lease Agreement or any memorandumthereof, and any such recordation shall be a breach of this Lease Agreementvoid, and without effect.  Time is ofthe essence with respect to the due performance of the terms, covenants andconditions herein contained.  Submissionof this instrument for examination does not constitute a reservation of oroption for the Premises, and this Lease Agreement shall become effective onlyupon execution and delivery thereof by Landlord and Tenant.

 

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# **ARTICLE 33 - SECURITY DEPOSIT**

Upon the executionhereof, Tenant agrees to pay Landlord the sum of $22,130.79 (the “**SecurityDeposit**”) to guarantee the payment of rent and the performance byTenant of all the terms of this Lease Agreement. Such amount held as a SecurityDeposit shall bear no interest.  Uponthe occurrence of any default hereunder by Tenant, Landlord may use saidSecurity Deposit to the extent necessary to cure such default, whether rent orotherwise.  Any remaining balance ofsaid Security Deposit shall be returned to Tenant upon compliance with theterms hereof and acceptance of the vacated Premises by Landlord.  Tenant understands that its potentialliability under this Lease Agreement is not limited to the amount of theSecurity Deposit.  Use of such SecurityDeposit by Landlord shall not constitute a waiver, but is in addition to otherremedies available to Landlord under this Lease Agreement and under law.  Upon the use of all or any part of the SecurityDeposit to cure any default of Tenant, Tenant shall forthwith deposit withLandlord the amount of Security Deposit so used.

# **ARTICLE 34 - EXCULPATION**

Tenant agrees to looksolely to Landlord’s interest in the Building for the recovery of any judgmentfrom Landlord, it being agreed that Landlord and Landlord’s partners, whethergeneral or limited (if Landlord is a partnership) or its directors, governors,officers, managers, members or shareholders (if Landlord is a limited liabilitycompany or corporation), shall never be personally liable for any suchjudgment.

**ARTICLE 35 - SUBMISSION**

**               **Submission of this Lease Agreement byLandlord to Tenant for examination and/or execution shall not in any mannerbind Landlord and no obligations on Landlord shall arise under this LeaseAgreement unless and until this Lease Agreement is fully signed and deliveredby Landlord and Tenant; provided, however, the execution and delivery by Tenantof this Lease Agreement to Landlord shall constitute an irrevocable offer by Tenantof the terms and conditions herein contained, which offer may not be revokedfor thirty (30) days after such delivery.

**IN WITNESS WHEREOF** this Lease Agreement has been duly executed by theparties hereto as of the day and year indicated above.

 
| **TENANT:  CORVU CORPORATION** |   | **LANDLORD: UNITED PROPERTIES****                  ****INVESTMENT LLC** |
|--------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |   |                                                                                                                                                              |   |   |
| By:                            |   |                                                                                                                                                              | By: |   |
|                           |   |                                                                                                                                                              |   |   |
|                           | Its:   |                                                                                                                                                              |   |   | Its: |   |
|                           |   |                                                                                                                                                              |   |   |   |   |
| By:                            |   |                                                                                                                                                              | By: |   |
|                           |   |                                                                                                                                                              |   |   |
|                           | Its:   |                                                                                                                                                              |   |   | Its: |   |
|                           |   |                                                                                                                                                              |   |   |   |   |
| Date: August __, 2002          |   | Date: August __, 2002                                                                                                                                             |

 

 

 

**LIST OF EXHIBITS**

Exhibit A-1 (depiction of office layout)

Exhibit A-2(depiction of building layout)

Exhibit B

 

 

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**EXHIBIT B**

 

**OPERATING EXPENSE EXCLUSIONS**

 

Notwithstanding anything in the Lease Agreement to thecontrary, the following shall be excluded from Operating Expenses under theLease Agreement:

 
| (i)     |   | Attorney’s fees, costs  and disbursements and other expenses incurred in connection with negotiations  or disputes with tenants, other occupants, or prospective tenants or  occupants of the Building or Complex;                                                                                                                                                                                                                                                                                                                                          |
|---------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (ii)    |   | Costs of correcting  defects in the design or construction of the Premises, Building or Complex  (including latent defects in the Premises, Building or Complex) or in the  equipment thereon, except that conditions resulting from ordinary wear and  tear shall not be deemed defects;                                                                                                                                                                                                                                                                        |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (iii)   |   | Costs in excess of  $50,000.00 relating to Hazardous Materials (as defined in Article 34 of the  Lease Agreement) or any costs relating to Hazardous Materials to the extent  Landlord is reimbursed by insurance proceeds, except to the extent caused,  installed, disposed of or released by Tenant.  Landlord agrees that any Hazardous Materials costs that are  otherwise includable in Operating Expenses shall be allocated in the  commercially reasonable judgment of Landlord to and among the Building and  the other buildings in the Complex; |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (iv)    |   | Costs relating to the  breach of any warranty, representation or covenant of Landlord under this  Lease Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (v)     |   | Any management fees in  excess of 5% of the gross rents for the period in question;                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (vi)    |   | Interest on debt or  payments on any mortgage, and rental under any ground or underlying leases;                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (vii)   |   | Depreciation and  amortization, except as may be expressly provided for in this Article 6;                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (viii)  |   | Costs which under  generally accepted accounting principles, consistently applied, are  capitalized (except as provided for in the Lease Agreement);                                                                                                                                                                                                                                                                                                                                                                                                             |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (ix)    |   | Costs of Landlord’s  general corporate and/or partnership overhead and general administrative  expenses which would not be chargeable to operating costs of the Building or  Complex in accordance with generally accepted accounting principles,  consistently applied;                                                                                                                                                                                                                                                                                    |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (x)     |   | All items and services  for which Tenant is expressly required under this Lease Agreement to pay to  third parties;                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xi)    |   | Costs incurred in  leasing, advertising for the Building or Complex or other marketing or  promotional activity specifically and primarily designed for marketing space  in the Building or Complex;                                                                                                                                                                                                                                                                                                                                                             |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xii)   |   | Salaries and bonuses of  officers and executives of Landlord above the level of building manager;                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xiii)  |   | Any bad debt expense or  bad debt reserve;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xiv)   |   | All interest and  penalties incurred as a result of Landlord’s failure to pay any costs as the  same shall come due;                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xv)    |   | Cost of tenant  improvements;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xvi)   |   | Costs of services,  repairs or maintenance paid for by proceeds of insurance or by other tenants  or third parties;                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xvii)  |   | Special services to  other tenants (i.e., costs of electricity outside normal business hours sold  to tenants of the Building by Landlord or any other special service whether  or not Landlord receives reimbursement from such tenants as an additional  charge);                                                                                                                                                                                                                                                                                              |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xviii) |   | Costs arising from the  negligence or intentional misconduct of Landlord or Landlord’s agents;                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xix)   |   | Repairs or other work  occasioned by fire, windstorm or other casualty to the extent that the costs  thereof are reimbursed to Landlord by insurers (or would have been reimbursed  had the insurance required of Landlord under the Lease Agreement been  maintained), or by governmental authorities in eminent domain;                                                                                                                                                                                                                                        |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xx)    |   | Leasing commissions;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xxi)   |   | All costs incurred in  connection with or directly related to the original construction (as  distinguished from operation, repair or maintenance) of the Building;                                                                                                                                                                                                                                                                                                                                                                                               |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (xxii)  |   | Legal and other fees,  leasing commissions, advertising expenses and other costs incurred in  connection with acquisition or original development or original leasing of  the Building;                                                                                                                                                                                                                                                                                                                                                                          |

 

 

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