Document:

Exhibit 10.22(b)

 

ADDENDUM TO LEASE DATED JULY 6, 1994, BY AND BETWEEN H-K ASSOCIATES
(LESSOR) AND VIDEONICS, INC. (LESSEE) FOR PREMISES AT 1370 DELL AVENUE,
CAMPBELL, CALIFORNIA 95008.

 

The following are additional terms and conditions to the above referenced
Lease.

 

48. OPTION:

Lessee shall have the option to cancel the lease
after April 1, 1997, provided Lessee gives at least 180 day notice prior
to cancellation.

 

49. REPLACEMENT OF MAJOR EQUIPMENT:

Any replacement of capital equipment by Lessor
pursuant to paragraph 7.2 as well as, heating and air conditioning, shall be
amortized over the depreciable Life (of 10 years) of such equipment, and Lessee
shall pay his prorata share thereof based on the remaining years of the Lease.

 

50. STRUCTURE OF BUILDING:

With reference to paragraph 7.1 and 7.4 Lessee shall
not be responsible for repairs to the foundation, exterior walls or the roof,
unless damage is caused by Lessee.

 

51. TENANT IMPROVEMENTS:

(a)   Lessee shall accept the premises
in its present condition.

(b)   Lessee shall construct access to
additional premises and install vinyl floor tile as needed. Should any exiting changes be required, due to
Lessee’s use, at no time shall Lessee’s cost exceed $15,000.00 total.
Additionally, Lessor agrees to install one rear exit door, if required, at
Lessor’s expense.

 

52. INSURANCE:

Lessor agrees to maintain the current deductible and
present coverage level for the premises through the full term of the Lease.

 

53. DEFINITIONS:

(a)               “Environmental Health and Safety Laws” means
for purposes of this Lease any and all federal, state, or local, statutes, laws
(including common or case law), regulations, or governmental restrictions,
mandates, or prohibitions, as in effect and interpreted at any time during the
term of the Lease or thereafter, relating to human health (including without
limitation the safety and health of employees and the public) or environment or
to emissions, discharges, Releases or threatened Releases of Hazardous
Substances into the Environment, or the clean-up or other remediation thereof
or investigation or other response thereto.

 

(b)         “Hazardous Materials”
means for purposes of this Lease any pollutants, contaminates, petroleum,
petroleum products, chemicals, or industrial, toxic, caustic, radioactive, reactive,
explosive or hazardous substances or wastes as defined, without limitation, by
any Environmental, Health and Safety Laws.

 

 

54. HAZARDOUS MATERIALS ACTIVITIES.

Lessor makes the following
representations to Lessee, each of which is made to the best of Lessor’s
knowledge as of the date of the Lease and as of the commencement date.

 

(a)     The soil and ground water in, under, on
or about the Parcel does not contain Hazardous Materials (as defined below) in
the amounts which violate any Enviromental, Health and Safety Laws to the
extend that any federal, state or local governmental entity could require
Lessor or Lessee to take any remedial action with respect to such Hazardous
Materials.

 

(b)    No litigation has been brought or
threatened, nor any settlement reached with any federal, state or local
government entity or private party, concerning the actual or alleged presence
of Hazardous Materials in, under, on or about the Parcel or any disposal,
release, or threatened release of Hazardous Materials in or about the Parcel.

 

(c)     During the time that Lessor has owned
the Project, Lessor has received no notice of (i) any violation, or
alleged violation, of any Hazardous Material law that has not been corrected to
the satisfaction of the appropriate authority, (ii) any pending claims
relating to the presence of Hazardous Material on the Parcel, or (iii) any
pending investigation by any government agency concerning the Parcel relating
to Hazardous Materials.

 

To the extent caused by Lessee or
Lessee’s employees, agents or contractors and to the extent occurring after
execution of this lease, Lessee agrees to indemnify Lessor, defend with counsel
acceptable to Lessor, and hold Lessor harmless from and against any claims
(including real and personal property damage), actions, administrative
proceedings (including informal proceedings), judgments, damages, punitive
damages, penalties, fines, costs, liabilities (including sums paid in
settlement of claims), interests or losses, attorneys’ fees, including any fees
and expenses incurred in enforcing this indemnity from or in connection with
the presence, suspected presence, release or suspected release of any Hazardous
Materials whether into the air, soil, surface water or ground water at the
Parcel, or any other violation of any Environmental, Health and Safety laws.

 

To the extent caused by Lessor or
Lessor’s employees, agents or contractors, or prior occupants, and to the
extent occurring prior to extension of this lease or arising from acts,
omissions or conduct occurring prior to the extension of this lease, Lessor
agrees to indemnify Lessee, defend with counsel acceptable to Lessee, and hold
Lessee harmless from and against any claims (including real and personal
property damage), actions, administrative proceedings (including informal
proceedings), judgments, damages, punitive damages, penalties, fines, costs,
liabilities (including sums paid in settlement of claims), interests or losses,
attorneys’ fees, including any fees and expenses incurred in enforcing this
indemnity from or in connection with the presence, suspected presence, release
or suspected release of any Hazardous Materials whether into the air, soil,
surface water or ground water at the Parcel, or any other violation of any
Environmental, Health and Safety Laws.

 

 

	
  H-K ASSOCIATES

  	
   

  	
  VIDEONICS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Phillip Kronzer

  	
   

  	
  By: 

  	
  /s/ Jim McNeill

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  General Partner

  	
   

  	
  Title:

  	
  VP of Finance

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  7/26/94

  	
   

  	
  Date:

  	
  7/26/94Exhibit 10.22(c)

 

SECOND ADDENDUM TO LEASE DATED JULY 6, 1994, BY AND BETWEEN H-K
ASSOCIATES (LESSOR) AND VIDEONICS, INC. (LESSEE) FOR PREMISES AT 1370
DELL AVENUE, CAMPBELL, CALIFORNIA 95008.

 

Whereas Lessee
desires to renew its above referenced lease, Lessor and Lessee agree to the
following changes and additions for a new lease term.

 

	
  55.

  	
  PREMISES: Premises
  consist of 27,500 square feet of space.

  
	
   

  	
   

  
	
  56.

  	
  TERM:

  
	
   

  	
   

  
	
   

  	
  The term of the Lease shall be
  for three (3) years, commencing August 1, 1999, and ending July 31,
  2002.

  
	
   

  	
   

  
	
  57.

  	
  RENT:

  
	
   

  	
   

  
	
   

  	
  Rent shall be
  based on a NNN lease as per the following: First year - $1.25 per square foot
  per month. Second year - $1.30 per square foot per month.  Third year - $1.35 per square foot per
  month.

  
	
   

  	
   

  
	
  58.

  	
  RIGHT TO RENEW LEASE:

  
	
   

  	
   

  
	
   

  	
  Lessee shall have the right to renew this Lease for two 1 year periods.
  Lessee shall give Lessor written notice of its intent to renew not
  less than 180 days prior to the expiration of the Lease Rent for the renewal
  shall be as follows:

  
	
   

  	
  First renewal - $1.40 NNN per square foot per month.

  
	
   

  	
  Second renewal - $1.45 NNN per square foot per month.

  
	
   

  	
   

  
	
  59.

  	
  SECURITY DEPOSIT:

  
	
   

  	
   

  
	
   

  	
  Lessee shall deposit with Lessor an additional amount of $27,050.00 as
  security for Lessee’s faithful
  performance of Lessee’s obligation hereunder. The payment of the added
  deposit shall be as follows:

  
	
   

  	
  May 1, 1999, $7,050.00.

  
	
   

  	
  September 30, 1999, $5,000.00.

  
	
   

  	
  December 31, 1999, $5,000.00.

  
	
   

  	
  March 31, 2000, $5,000.00.

  
	
   

  	
  June 30, 2000, $5,000.00.

  
	
   

  	
  This will bring Lessee’s total security deposit to
  $37,125.00.

  

 

 

	
  60.

  	
  OCCUPANCY:

  
	
   

  	
   

  
	
   

  	
  Whereas Lessee presently occupies the Premises, Lessee agrees to
  accept said Premises in their present state and condition.

  
	
   

  	
   

  
	
  61.

  	
  CANCELLATION OPTION AND BUY OUT:

  
	
   

  	
   

  
	
   

  	
  Lessee shall have the option to cancel this Lease, provided, Lessee
  gives Lessor a minimum of 180 days written notice prior to cancelling
  said Lease.

  
	
   

  	
  The cost to Lessee to cancel the Lease shall be as
  follows:

  
	
   

  	
   

  
	
   

  	
  a.    To
  cancel during the period of months one (1) through twelve (12) Lessee
  shall  pay to Lessor an amount
  equal to three (3) months rent.

  
	
   

  	
  b.    To cancel during the period of months thirteen
  (13) through twenty four (24) Lessee shall pay to Lessor an amount equal to two (2) months
  rent.

  
	
   

  	
  c.    To cancel during the period of months twenty
  five (25) through thirty six (36) Lessee shall pay to Lessor an amount
  equal to one (1) months rent.

  

 

 

All other terms
and conditions shall be as stated in the Lease dated July 6, 1994.

 

 

	
  H-K ASSOCIATES

  	
  VIDEONICS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  By 

  	
  /s/ Neil Hamm

  	
   

  	
  By

  	
  /s/ James McNeil1

  
	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
  General Partner

  	
   

  	
  Title

  	
  SVP

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  4-27-99

  	
   

  	
  Date

  	
  4/27/99

  

 

2Exhibit
10.23(a)

 

LEASE

 

between

 

FOCUS
ENHANCEMENTS, INC.

(Tenant)

 

and

 

CARRAMERICA REALTY CORPORATION

(Landlord)

 

May 31, 2000

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  LEASE AGREEMENT

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  RENT

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Types of Rent

  	
  1

  
	
   

  	
  B.

  	
  Payment of Operating Cost Share Rent and Tax Share
  Rent

  	
  1

  
	
   

  	
  C.

  	
  Definitions

  	
  2

  
	
   

  	
  D.

  	
  Computation of Base Rent and Rent Adjustments

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  PREPARATION AND CONDITION OF PREMISES; POSSESSION
  AND SURRENDER OF PREMISES

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Condition of Premises

  	
  5

  
	
   

  	
  B.

  	
  Tenant’s Possession

  	
  5

  
	
   

  	
  C.

  	
  Maintenance

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  PROJECT SERVICES

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Heating and Air Conditioning

  	
  5

  
	
   

  	
  B.

  	
  Elevators

  	
  6

  
	
   

  	
  C.

  	
  Electricity

  	
  6

  
	
   

  	
  D.

  	
  Water

  	
  6

  
	
   

  	
  E.

  	
  Janitorial Service

  	
  6

  
	
   

  	
  F.

  	
  Interruption of Services

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  ALTERATIONS AND REPAIRS

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Landlord’s Consent and Conditions

  	
  6

  
	
   

  	
  B.

  	
  Damage to Systems

  	
  7

  
	
   

  	
  C.

  	
  No Liens

  	
  7

  
	
   

  	
  D.

  	
  Ownership of Improvements

  	
  8

  
	
   

  	
  E.

  	
  Removal at Termination

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  USE OF PREMISES

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  GOVERNMENTAL REQUIREMENTS AND BUILDING RULES

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Indemnification

  	
  9

  
	
   

  	
  B.

  	
  Tenant’s Insurance

  	
  9

  
	
   

  	
  C.

  	
  Insurance Certificates

  	
  10

  
	
   

  	
  D.

  	
  Landlord’s Insurance

  	
  11

  
	
   

  	
  E.

  	
  Waiver of Subrogation

  	
  11

  

 

i

 

	
  9.

  	
  FIRE AND OTHER CASUALTY

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Termination

  	
  11

  
	
   

  	
  B.

  	
  Restoration

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  EMINENT DOMAIN

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  RIGHTS RESERVED TO LANDLORD

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Name

  	
  11

  
	
   

  	
  B.

  	
  Signs

  	
  12

  
	
   

  	
  C.

  	
  Window Treatments

  	
  12

  
	
   

  	
  D.

  	
  Keys

  	
  12

  
	
   

  	
  E.

  	
  Access

  	
  12

  
	
   

  	
  F.

  	
  Preparation for Reoccupancy

  	
  12

  
	
   

  	
  G.

  	
  Heavy Articles

  	
  12

  
	
   

  	
  H.

  	
  Show Premises

  	
  12

  
	
   

  	
  I.

  	
  Relocation of Tenant

  	
  12

  
	
   

  	
  J.

  	
  Use of Lockbox

  	
  12

  
	
   

  	
  K.

  	
  Repairs and Alterations

  	
  12

  
	
   

  	
  L.

  	
  Landlord’s Agents

  	
  13

  
	
   

  	
  M.

  	
  Building Services

  	
  13

  
	
   

  	
  N.

  	
  Other Actions

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  TENANT’S DEFAULT

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Rent Default

  	
  13

  
	
   

  	
  B.

  	
  Certain Performance Default

  	
  13

  
	
   

  	
  C.

  	
  Other Performance Default

  	
  13

  
	
   

  	
  D.

  	
  Credit Default

  	
  13

  
	
   

  	
  E.

  	
  Vacation or Abandonment Default

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  LANDLORD REMEDIES

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Termination of Lease or Possession

  	
  13

  
	
   

  	
  B.

  	
  Lease Termination Damages

  	
  14

  
	
   

  	
  C.

  	
  Possession Termination Damages

  	
  14

  
	
   

  	
  D.

  	
  Landlord’s Remedies Cumulative

  	
  14

  
	
   

  	
  E.

  	
  WAIVER OF TRIAL BY JURY

  	
  14

  
	
   

  	
  F.

  	
  Litigation Costs

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  SURRENDER

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  HOLDOVER

  	
  15

  

 

ii

 

	
  16.

  	
  SUBORDINATION TO GROUND LEASES AND MORTGAGES

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Subordination

  	
  15

  
	
   

  	
  B.

  	
  Termination of Ground Lease or Foreclosure of
  Mortgage

  	
  15

  
	
   

  	
  C.

  	
  Security Deposit

  	
  15

  
	
   

  	
  D.

  	
  Notice and Right to Cure

  	
  16

  
	
   

  	
  E.

  	
  Definitions

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  ASSIGNMENT AND SUBLEASE

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  In General

  	
  16

  
	
   

  	
  B.

  	
  Landlord’s Consent

  	
  16

  
	
   

  	
  C.

  	
  Procedure

  	
  16

  
	
   

  	
  D.

  	
  Change of Management or Ownership

  	
  17

  
	
   

  	
  E.

  	
  Excess Payments

  	
  17

  
	
   

  	
  F.

  	
  Recapture

  	
  17

  
	
   

  	
  G.

  	
  Permitted Transfers

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  CONVEYANCE BY LANDLORD

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  ESTOPPEL CERTIFICATE

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  SECURITY DEPOSIT

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  FORCE MAJEURE

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  TENANT’S PERSONAL PROPERTY AND FIXTURES

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  NOTICES

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Landlord

  	
  20

  
	
   

  	
  B.

  	
  Tenant

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  QUIET POSSESSION

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
  REAL ESTATE BROKER

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
  MISCELLANEOUS

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Successors and Assigns

  	
  20

  
	
   

  	
  B.

  	
  Date Payments Are Due

  	
  20

  
	
   

  	
  C.

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

  	
  21

  
	
   

  	
  D.

  	
  Time of the Essence

  	
  21

  
	
   

  	
  E.

  	
  No Option

  	
  21

  
	
   

  	
  F.

  	
  Severability

  	
  21

  
	
   

  	
  G.

  	
  Governing Law

  	
  21

  
	
   

  	
  H.

  	
  Lease Modification

  	
  21

  
	
   

  	
  I.

  	
  No Oral Modification

  	
  21

  

 

iii

 

	
   

  	
  J.

  	
  Landlord’s Right to Cure

  	
  21

  
	
   

  	
  K.

  	
  Captions

  	
  21

  
	
   

  	
  L.

  	
  Authority

  	
  21

  
	
   

  	
  M.

  	
  Landlord’s Enforcement of Remedies

  	
  21

  
	
   

  	
  N.

  	
  Entire Agreement

  	
  21

  
	
   

  	
  O.

  	
  Landlord’s Title

  	
  21

  
	
   

  	
  P.

  	
  Light and Air Rights

  	
  21

  
	
   

  	
  Q.

  	
  Singular and Plural

  	
  22

  
	
   

  	
  R.

  	
  No Recording by Tenant

  	
  22

  
	
   

  	
  S.

  	
  Exclusivity

  	
  22

  
	
   

  	
  T.

  	
  No Construction Against Drafting Party

  	
  22

  
	
   

  	
  U.

  	
  Survival

  	
  22

  
	
   

  	
  V.

  	
  Rent Not Based on Income

  	
  22

  
	
   

  	
  W.

  	
  Building Manager and Service Providers

  	
  22

  
	
   

  	
  X.

  	
  Late Charge and Interest on Late Payments

  	
  22

  
	
   

  	
  Y.

  	
  Tenant’s Financial Statements

  	
  22

  
	
   

  	
  Z.

  	
  Parking

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
  UNRELATED BUSINESS INCOME

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
  HAZARDOUS SUBSTANCES

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
  EXCULPATION

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
  UTILITY DEREGULATION

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A.

  	
  Landlord Controls Selection

  	
  23

  
	
   

  	
  B.

  	
  Tenant Will Provide Access

  	
  23

  
	
   

  	
  C.

  	
  Landlord Not Responsible for Change in Service

  	
  23

  

 

	
  ATTACHMENTS

  
	
  Appendix A

  	
  –

  	
  Plan of Premises

  
	
  Appendix B

  	
  –

  	
  Rules and Regulations

  
	
  Appendix C

  	
  –

  	
  Tenant Improvement Agreement

  
	
  Appendix D

  	
  –

  	
  Mortgages Currently Affecting the Project

  
	
  Appendix E

  	
  –

  	
  Commencement Date Confirmation

  
	
  Appendix F

  	
  –

  	
  Legal Description

  
	
  Addendum 1

  	
  –

  	
  Renewal Option

  
	
  Addendum 2

  	
  –

  	
  Right of First Offer

  

 

iv

 

LEASE

 

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

 

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

 

SCHEDULE

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

10.           Termination Date/Term:
October 31, 2005

 

11.           Guarantor:  None.

 

12.           Base Rent:

 

	
   

  	
   

  	
  Square

  	
   

  	
  Monthly

  	
   

  	
  Total Monthly

  	
   

  	
  Annual Base

  	
   

  
	
  Period

  	
   

  	
  Footage

  	
   

  	
  Base Rent/RSF

  	
   

  	
  Base Rent

  	
   

  	
  Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1 – 6

  	
   

  	
  7,390

  	
   

  	
  $

  	
  -0-

  	
   

  	
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  -0-

  	
   

  	
  $

  	
  -0-

  	
   

  
	
  7 – 36

  	
   

  	
  7,390

  	
   

  	
  $

  	
  .97

  	
   

  	
  $

  	
  7,168.30

  	
   

  	
  $

  	
  86,019.60

  	
   

  
	
  37 – 66

  	
   

  	
  7,390

  	
   

  	
  $

  	
  1.05

  	
   

  	
  $

  	
  7,759.50

  	
   

  	
  $

  	
  93,114.00

  	
   

  

 

2

 

1.     LEASE
AGREEMENT.

 

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

 

2.     RENT.

 

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

 

CarrAmerica
Realty Corporation

Sunset Corporate Park

P.O. Box 402013

Atlanta, GA 30384-2013

 

or by
wire transfer as follows:

 

NationsBank,
N.A. (South)

ABA Number 061-000-052

Account Number 32-6303-9788

 

or in
such other manner as Landlord may notify Tenant.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

C.    Definitions.

 

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

 

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

 

2

 

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

 

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

 

(a)           costs of alterations of tenant
premises;

 

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

 

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

 

(d)           real estate brokers’ leasing
commissions;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(m)          fines, penalties and interest.

 

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

 

3

 

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

 

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

 

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

 

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

 

D.    Computation
of Base Rent and Rent Adjustments.

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

4.     PROJECT
SERVICES.

 

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

 

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

 

5

 

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

 

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

 

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

 

E.             Janitorial
Service.  None.

 

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

 

5.     ALTERATIONS
AND REPAIRS.

 

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

 

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

 

6

 

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

 

The following
requirements shall apply to all Work:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

6.     USE OF
PREMISES.

 

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

 

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

 

8

 

7.     GOVERNMENTAL
REQUIREMENTS AND BUILDING RULES.

 

Tenant
shall comply with all Governmental Requirements applying to its use of the
Premises.  Tenant shall also comply with
all reasonable rules established for the Project from time to time by
Landlord.  The current rules and
regulations are contained in Appendix B. 
Failure by another tenant to comply with the rules or failure by
Landlord to enforce them shall not relieve Tenant of its obligation to comply
with the rules or make Landlord responsible to Tenant in any way.  Landlord shall use reasonable efforts to
apply the rules and regulations uniformly with respect to Tenant and
tenants in the Building under leases containing rules and regulations
similar to this Lease.  In the event of
alterations and repairs performed by Tenant, Tenant shall comply with the
provisions of Section 5 of this Lease and also Landlord’s “Policies, Rules and
Regulations for Construction Projects”.

 

8.     WAIVER OF
CLAIMS; INDEMNIFICATION; INSURANCE.

 

A.            Indemnification.  Tenant shall indemnify, defend and hold
harmless Landlord and its officers, directors, employees and agents against any
claim by any third party for injury to any person or damage to or loss of any
property occurring in the Project and arising from the use of the Premises or
from any other act or omission or negligence of Tenant or any of Tenant’s
employees or agents; provided, however, that Landlord (i) promptly
notifies Tenant in writing of such claim, suit or proceeding; (ii) gives
Tenant the right to control and direct investigation, preparation, defense and
settlement of any claim, suit or proceeding provided, however, that Tenant must
use counsel approved in advance by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed; and (iii) gives assistance
and full cooperation for the defense of same. Tenant shall pay any resulting
damages, costs and expenses finally awarded to a third party but Tenant is not
liable for such amounts, or for settlements incurred by Landlord without Tenant’s
written authorization..  Tenant’s
obligations under this section shall survive the termination of this Lease.

 

Landlord
shall indemnify, defend and hold harmless Tenant and its officers, directors,
employees and agents against any claim by any third party for damage to person
or Premises or from any other act or omission or negligence of Landlord or any
of Landlord’s employees or agents. 
Landlord’s obligations under this section shall survive the termination
of this Lease.

 

LANDLORD
AND TENANT AGREE THAT IN ANY CLAIMS FOR PERSONAL INJURY (INCLUDING ALL
CONSEQUENTIAL, GENERAL, PUNITIVE AND SPECIAL DAMAGES) BROUGHT AGAINST EITHER OR
BOTH OF THEM (WHETHER JOINTLY OR SEVERALLY) BY ANY CLAIMANT, NEITHER LANDLORD
NOR TENANT WILL ASSERT ANY DEFENSE BASED ON ANY LIMITATION OF (OR EXCEPTION
FROM) LIABILITY BASED ON ANY WORKER’S COMPENSATION LAW, IF THE RESULT OF SUCH
DEFENSE WOULD BE TO INCREASE THE LIABILITY OF THE OTHER PARTY TO THE CLAIMANT,
OR TO INCREASE THE AMOUNT OF DAMAGES THAT THE OTHER PARTY WOULD HAVE TO PAY OR
WOULD LIMIT THE OTHER PARTY’S RIGHT TO SEEK CONTRIBUTION OR
INDEMNIFICATION.  THIS PROVISION IS FOR
THE SOLE BENEFIT OF LANDLORD AND TENANT; IT IS NOT FOR THE BENEFIT OF ANY
CLAIMANT.  THIS WAIVER HAS BEEN
SPECIFICALLY NEGOTIATED BY THE PARTIES AND EACH PARTY HAS CONSULTED WITH
INDEPENDENT COUNSEL REGARDING THIS WAIVER.

 

B.           Tenant’s Insurance.  Tenant shall maintain insurance as follows,
with such other terms, coverages and insurers, as Landlord shall reasonably
require from time to time:

 

(1)            Commercial General
Liability Insurance, with (a) Contractual Liability including the
indemnification provisions contained in this Lease, (b) a severability of
interest 

 

9

 

endorsement, (c) limits
of not less than Two Million Dollars ($2,000,000) combined single limit per
occurrence and not less than Two Million Dollars ($2,000,000) in the aggregate
for bodily injury, sickness or death, and property damage, and umbrella
coverage of not less than Five Million Dollars ($5,000,000).

 

(2)          Property
Insurance against “All Risks” of physical loss covering the replacement cost of
all improvements, fixtures and personal property.  Tenant waives all rights of subrogation, and
Tenant’s property insurance shall include a waiver of subrogation in favor of
Landlord.

 

(3)          Workers’
compensation or similar insurance in form and amounts required by law, and
Employer’s Liability with not less than the following limits:

 

	
  Each Accident

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  Disease—Policy
  Limit

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  Disease—Each
  Employee

  	
   

  	
  $

  	
  250,000

  	
   

  

 

Such insurance
shall contain a waiver of subrogation provision in favor of Landlord and its
agents.

 

Tenant’s insurance
shall be primary and not contributory to that carried by Landlord, its agents,
or mortgagee.  Landlord, and Landlord’s
building manager or agent and ground lessor, if any, shall be named as
additional insureds in insurance policies required of the Tenant in Section 8B(1).  The company or companies writing any
insurance which Tenant is required to maintain under this Lease, as well as the
form of such insurance, shall at all times be subject to Landlord’s approval,
and any such company shall be licensed to do business in the state in which the
Building is located.  Such insurance
companies shall have a A.M. Best rating of A:VI or better.

 

Tenant shall cause
any contractor of Tenant performing work on the Premises to maintain insurance
as follows, with such other terms, coverages and insurers, as Landlord shall
reasonably require from time to time:

 

(1)          Commercial
General Liability Insurance, including contractor’s liability coverage,
contractual liability coverage, completed operations coverage, broad form
property damage endorsement, and contractor’s protective liability coverage, to
afford protection with limits, for each occurrence, of not less than One
Million Dollars ($1,000,000) with respect to personal injury, death or property
damage.

 

(2)          Workers’
compensation or similar insurance in form and amounts required by law, and
Employer’s Liability with not less than the following limits:

 

	
  Each Accident

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Disease—Policy
  Limit

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Disease—Each
  Employee

  	
   

  	
  $

  	
  500,000

  	
   

  

 

Such insurance
shall contain a waiver of subrogation provision in favor of Landlord and its
agents.  Tenant’s contractor’s insurance
shall be primary and not contributory to that carried by Tenant, Landlord,
their agents or mortgagees.  Tenant and
Landlord, and if any, Landlord’s building manager or agent, mortgagee or ground
lessor shall be named as additional insured on Tenant’s contractor’s insurance
policies.

 

C.                                  Insurance Certificates. 
Tenant shall deliver to Landlord certificates evidencing all required
insurance no later than five (5) days prior to the Commencement Date and
each renewal date.  Each certificate will
provide for thirty (30) days prior written notice of cancellation to Landlord
and Tenant.

 

10

 

D.                                    Landlord’s Insurance. 
Landlord shall maintain “All-Risk” property insurance at replacement
cost, including loss of rents, on the Building, and Commercial General
Liability insurance policies covering the common areas of the Building, each
with such terms, coverages and conditions as are normally carried by reasonably
prudent owners of properties similar to the Project.

 

E.                                      Waiver of Subrogation. 
Landlord and Tenant each waive all claims against the other for property
damage to the extent that the claims are or would be covered by the “All-Risk”
coverage against property damage that this Lease requires the party suffering
the loss to carry.  The parties agree
that each party bears and will insure against the risk of loss or damage to its
own property caused by the negligence of the other party.  The respective “All-Risk” coverage property
insurance policies carried by Landlord and Tenant shall each contain
enforceable waiver of subrogation endorsements.

 

9.     FIRE AND
OTHER CASUALTY.

 

A.                                    Termination.  If a
fire or other casualty causes substantial damage to the Building or the
Premises, Landlord shall engage a registered architect to certify within one (1) month
of the casualty to both Landlord and Tenant the amount of time needed to
restore the Building and the Premises to tenantability, using standard working
methods.  If the time needed exceeds
twelve (12) months from the beginning of the restoration, or two (2) months
therefrom if the restoration would begin during the last twelve (12) months of
the Lease, then in the case of the Premises, either Landlord or Tenant may
terminate this Lease, and in the case of the Building, Landlord may terminate
this Lease, by notice to the other party within ten (10) days after the
notifying party’s receipt of the architect’s certificate.  The termination shall be effective thirty
(30) days from the date of the notice and Rent shall be paid by Tenant to that
date, with an abatement for any portion of the Premises which has been
untenantable after the casualty.

 

B.            Restoration.  If a casualty causes damage to the Building
or the Premises but this Lease is not terminated for any reason, then subject
to the rights of any mortgagees or ground lessors, Landlord shall obtain the
applicable insurance proceeds and diligently restore the Building and the
Premises subject to current Governmental Requirements.  Tenant shall replace its damaged
improvements, personal property and fixtures. 
Rent shall be abated on a per diem basis during the restoration for any
portion of the Premises which is untenantable, except to the extent that Tenant’s
negligence caused the casualty.

 

10.  EMINENT
DOMAIN.

 

As
used herein, “Date of Taking” means the date the party seeking to exercise its
right of eminent domain has the right to possession of the property being
taken.  If a part of the Building is
taken by eminent domain or deed in lieu thereof which is so substantial that
the Premises cannot reasonably be used by Tenant for the operation of its
business, then either party may terminate this Lease effective as of the date
of the taking.  If any substantial portion
of the Project is taken without affecting the Premises, then Landlord may
terminate this Lease as of the date of such taking.  Rent shall abate from the date of the taking
in proportion to any part of the Premises taken.  The entire award for a taking of any kind
shall be paid to Landlord, and Tenant shall have no right to share in the
award.  All obligations accrued to the
date of the taking shall be performed by the party liable to perform said
obligations, as set forth herein.

 

11.  RIGHTS
RESERVED TO LANDLORD.

 

Landlord
may exercise at any time any of the following rights in operating of the
Project without liability to the Tenant of any kind:

 

A.            Name.  To change the name or street address of the
Building or the suite number(s) of the Premises.

 

11

 

B.            Signs.  To install and maintain any signs on the
exterior and in the interior of the Building, and to approve at its sole
discretion, prior to installation, any of Tenant’s signs in the Premises
visible from the common areas or the exterior of the Building.  Tenant shall have the right to standard
directory and a lobby signage.

 

C.            Window
Treatments.  To approve, at
its discretion, prior to installation, any shades, blinds, ventilators or
window treatments of any kind, as well as any lighting within the Premises that
may be visible from the exterior of the Building or any interior common area.

 

D.            Keys.  To retain and use at any time passkeys to
enter the Premises or any door within the Premises.  Tenant shall not alter or add any lock or
bolt without Landlord’s prior written approval, which shall not be unreasonably
withheld, conditioned or delayed.

 

E.             Access.  To have access to inspect the Premises, and
to perform its obligations, or make repairs, alterations, additions or
improvements, as permitted by this Lease upon reasonable notice, which notice
may be by telephone call to the Premises, except in the case of emergency, when
no notice shall be required.

 

F.             Preparation
for Reoccupancy.  To decorate,
remodel, repair, alter or otherwise prepare the Premises for reoccupancy at any
time after Tenant abandons the Premises, without relieving Tenant of any
obligation to pay Rent.

 

G.            Heavy
Articles.  To approve the
weight, size, placement and time and manner of movement within the Building of
any safe, central filing system or other heavy article of Tenant’s
property.  Tenant shall move its property
entirely at its own risk.

 

H.            Show
Premises.  To show the
Premises to prospective purchasers, tenants, brokers, lenders, investors,
rating agencies or others at any reasonable time, provided that Landlord gives
prior notice to Tenant and does not materially interfere with Tenant’s use of
the Premises.

 

I.              Relocation
of Tenant.  To relocate the
Tenant, upon thirty days’ prior written notice, from all or part of the Premises
(the “Old Premises”) to another area in the Project (the “new premises”),
provided that:

 

(1)           the size of the new
premises is at least equal to the size of the Old Premises;

 

(2)           Landlord pays the cost
of moving the Tenant and improving the new premises to the standard of the Old
Premises.  Tenant shall cooperate with
Landlord in all reasonable ways to facilitate the move, including supervising
the movement of files or fragile equipment, designating new locations for
furniture, equipment and new telephone and electrical outlets, and determining
the color of paint in the new premises; and

 

(3)           Tenant at its sole
discretion agrees to such relocation.

 

J.             Use of
Lockbox.  To designate a
lockbox collection agent for collections of amounts due Landlord.  In that case, the date of payment of Rent or
other sums shall be the date of the agent’s receipt of such payment or the date
of actual collection if payment is made in the form of a negotiable instrument
thereafter dishonored upon presentment. 
However, Landlord may reject any payment for all purposes as of the date
of receipt or actual collection by mailing to Tenant within twenty-one (21)
days after such receipt or collection a check equal to the amount sent by
Tenant.

 

K.            Repairs and
Alterations.  To make repairs
or alterations to the Project and in doing so transport any required material
through the Premises, to close entrances, doors, corridors, elevators and other
facilities in the Project, to open any ceiling in the Premises, or to
temporarily suspend services or use of common areas in the Building.  Landlord may perform any such repairs or
alterations during ordinary business hours, except that Tenant may require any
Work in the Premises

 

12

 

to be done after business hours if Tenant pays
Landlord for overtime and any other expenses incurred.  Landlord may do or permit any work on any
nearby building, land, street, alley or way.

 

L.            Landlord’s
Agents.  If Tenant is in
default under this Lease, to possess Tenant’s funds or negotiate Tenant’s
negotiable instruments that Landlord may legally have within its possession or
control, which possession or negotiation by Landlord shall not waive any breach
by Tenant or any remedies of Landlord under this Lease.

 

M.           Building
Services.  To install, use and
maintain through the Premises, pipes, conduits, wires and ducts serving the
Building, provided that such installation, use and maintenance does not
unreasonably interfere with Tenant’s use of the Premises.

 

N.            Other
Actions.  To take any other
action which Landlord deems reasonable in connection with the operation,
maintenance or preservation of the Building.

 

12.                               TENANT’S
DEFAULT.

 

Any of the
following shall constitute a default by Tenant:

 

A.            Rent Default.  Tenant fails to pay any Rent when due.

 

B.            Certain
Performance Default.  If
Tenant, whether by action or inaction, defaults in its obligations under Section 8
(Insurance), Section 17 (Assignment and Sublease), or Section 28
(Hazardous Substances);

 

C.            Other Performance
Default.  Tenant fails to
perform any other obligation to Landlord under this Lease, and, in the case of
only the first two (2) such failures during the Term of this Lease, this
failure continues for ten (10) days after written notice from Landlord,
except that if Tenant begins to cure its failure within the ten (10) day
period but cannot reasonably complete its cure within such period, then, so
long as Tenant continues to diligently attempt to cure its failure, the ten (10) day
period shall be extended to sixty (60) days, or such lesser period as is
reasonably necessary to complete the cure;

 

D.            Credit
Default.  One of the following
credit defaults occurs:

 

(1)           Tenant commences any
proceeding under any law relating to bankruptcy, insolvency, reorganization or
relief of debts, or seeks appointment of a receiver, trustee, custodian or
other similar official for the Tenant or for any substantial part of its
property, or any such proceeding is commenced against Tenant and either remains
undismissed for a period of thirty (30) days or results in the entry of an
order for relief against Tenant which is not fully stayed within seven days
after entry;

 

(2)           Tenant becomes
insolvent or bankrupt, does not generally pay its debts as they become due, or
admits in writing its inability to pay its debts, or makes a general assignment
for the benefit of creditors;

 

(3)           Any third party obtains
a levy or attachment under process of law against Tenant’s leasehold interest.

 

E.             Vacation or
Abandonment Default.  Tenant
vacates or abandons the Premises.

 

13.  LANDLORD REMEDIES.

 

A.            Termination
of Lease or Possession.  If
Tenant defaults, Landlord may elect by notice to Tenant either to terminate
this Lease or to terminate Tenant’s possession of the Premises without terminating
this Lease.  In either case, Tenant shall
immediately vacate the Premises and deliver possession to Landlord, and
Landlord may repossess the Premises and may, at Tenant’s sole 

 

13

 

cost, remove any of Tenant’s signs and any of its
other property, without relinquishing its right to receive Rent or any other
right against Tenant.

 

B.            Lease
Termination Damages.  If
Landlord terminates the Lease, Tenant shall pay to Landlord all Rent due on or
before the date of termination, plus Landlord’s reasonable estimate of the
aggregate Rent that would have been payable from the date of termination
through the Termination Date, reduced by the rental value of the Premises
calculated as of the date of termination for the same period, taking into
account anticipated vacancy prior to reletting, reletting expenses and market
concessions, both discounted to present value at the rate of five percent (5%)
per annum.  If Landlord shall relet any
part of the Premises for any part of such period before such present value
amount shall have been paid by Tenant or finally determined by a court, then
the amount of Rent payable pursuant to such reletting (taking into account
vacancy prior to reletting and any reletting expenses or concessions) shall be
deemed to be the reasonable rental value for that portion of the Premises relet
during the period of the reletting.

 

C.            Possession
Termination Damages.   If
Landlord terminates Tenant’s right to possession without terminating the Lease
and Landlord takes possession of the Premises itself, Landlord may relet any
party of the Premises for such Rent, for such time, and upon such terms as
Landlord in its sole discretion shall determine, without any obligation to do
so prior to renting other vacant areas in the Building.  Any proceeds from reletting the Premises
shall first be applied to the expenses of reletting, including redecoration,
repair, alteration, advertising, brokerage, legal, and other reasonably
necessary expenses.  If the reletting
proceeds after payment of expenses are insufficient to pay the full amount of
Rent under this Lease, Tenant shall pay such deficiency to Landlord monthly
upon demand as it becomes due.  Any
excess proceeds shall be retained by Landlord.

 

D.            Landlord’s
Remedies Cumulative.  Unless
otherwise stated herein, all of Landlord’s remedies under this Lease shall be
in addition to all other remedies Landlord may have at law or in equity.  Waiver by Landlord of any breach of any
obligation by Tenant shall be effective only if it is in writing, and shall not
be deemed a waiver of any other breach, or any subsequent breach of the same
obligation.  Landlord’s acceptance of
payment by Tenant shall not constitute a waiver of any breach by Tenant, and if
the acceptance occurs after Landlord’s notice to Tenant, or termination of the
Lease or of Tenant’s right to possession, the acceptance shall not affect such
notice or termination.  Acceptance of
payment by Landlord after commencement of a legal proceeding or final judgment shall
not affect such proceeding or judgment. 
Landlord may advance such monies and take such other actions for Tenant’s
account as reasonably may be required to cure or mitigate any default by
Tenant.  Tenant shall immediately
reimburse Landlord for any such advance, and such sums shall bear interest at
the default interest rate until paid.

 

E.             WAIVER OF
TRIAL BY JURY.  EACH PARTY WAIVES TRIAL
BY JURY IN THE EVENT OF ANY LEGAL PROCEEDING BROUGHT BY THE OTHER IN CONNECTION
WITH THIS LEASE.  EACH PARTY SHALL BRING
ANY ACTION AGAINST THE OTHER IN CONNECTION WITH THIS LEASE IN A FEDERAL OR
STATE COURT LOCATED IN OREGON, CONSENTS TO THE JURISDICTION OF SUCH COURTS, AND
WAIVES ANY RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM SUCH COURTS ON THE
GROUND OF IMPROPER VENUE OR INCONVENIENT FORUM.

 

F.             Litigation
Costs.  The reasonable legal
fees and expenses of both parties and all costs of litigation (including all
fees and costs in any appeal) shall be borne by the party against which the
court of competent jurisdiction rules.

 

14

 

14.  SURRENDER.

 

Upon termination
of this Lease or Tenant’s right to possession, Tenant shall return the Premises
to Landlord in good order and condition, ordinary wear and tear excepted.  If Landlord requires Tenant to remove any
alterations, then Tenant shall remove the alterations in a good and workmanlike
manner and restore the Premises to its condition prior to their
installation.  Tenant will not be required
to modify or reconfigure the Premises from its configuration on the
Commencement Date.

 

15.  HOLDOVER.

 

A.            Except as provided in
Subsection B below, Tenant shall have no right to holdover possession of the
Premises after the expiration or termination of this Lease without Landlord’s
prior written consent, which consent may be withheld in Landlord’s sole and
absolute discretion.  If Tenant retains
possession of any part of the Premises after the Term, Tenant shall become a
month-to-month tenant for the entire Premises upon all of the terms of this
Lease as might be applicable to such month-to-month tenancy, except that Tenant
shall pay all of Base Rent, Operating Cost Share Rent and Tax Share Rent at one
hundred fifty (150%) percent of the rate in effect immediately prior to such
holdover, computed on a monthly basis for each full or partial month Tenant
remains in possession.  Tenant shall also
pay Landlord all of Landlord’s direct and consequential damages.  No acceptance of Rent or other payments by
Landlord under these holdover provisions shall operate as a waiver of Landlord’s
right to regain possession or any other of Landlord’s remedies.

 

B.            Tenant shall have the
option to holdover for an additional term of three (3) months upon not
less than six (6) months prior written notice to Landlord.  Tenant shall pay Base Rent, Operating Cost
Share Rent and Tax Share Rent at a rate equal to one hundred twenty-five
percent (125%) of the rate in effect immediately prior to such holdover,
computed on a monthly basis for each full or partial month of the holdover
term.

 

16.  SUBORDINATION TO GROUND LEASES AND
MORTGAGES.

 

A.            Subordination.  This Lease shall be subordinate to any
present or future ground lease or mortgage affecting the Project, and any
amendments to such ground lease or mortgage, at the election of the ground
lessor or mortgagee as the case may be, effected by notice to Tenant in the
manner provided in this Lease.  The
subordination shall be effective upon such notice, but at the request of
Landlord or ground lessor or mortgagee, Tenant shall within ten (10) days
of the request, execute and deliver to the requesting party any reasonable
documents provided to evidence the subordination.  Any mortgagee has the right, at its option,
to subordinate its mortgage to the terms of this Lease, without notice to, nor
the consent of, Tenant.

 

B.            Termination
of Ground Lease or Foreclosure of Mortgage.  If any ground lease is terminated or mortgage
foreclosed or deed in lieu of foreclosure given and the ground lessor,
mortgagee, or purchaser at a foreclosure sale shall thereby become the owner of
the Project, Tenant shall attorn to such ground lessor or mortgagee or
purchaser without any deduction or setoff by Tenant, and this Lease shall
continue in effect as a direct lease between Tenant and such ground lessor,
mortgagee or purchaser.  The ground
lessor or mortgagee or purchaser shall be liable as Landlord only during the
time such ground lessor or mortgagee or purchaser is the owner of the Project.  At the request of Landlord, ground lessor or
mortgagee, Tenant shall execute and deliver within ten (10) days of the
request any document furnished by the requesting party to evidence Tenant’s
agreement to attorn.

 

C.            Security
Deposit.  Any ground lessor or
mortgagee shall be responsible for the return of any security deposit by Tenant
only to the extent the security deposit is received by such ground lessor or
mortgagee.

 

15

 

D.            Notice and
Right to Cure.  The Project is
subject to any ground lease and mortgage identified with name and address of
ground lessor or mortgagee in Appendix D to this Lease (as the same may
be amended from time to time by written notice to Tenant).  Tenant will send by registered or certified
mail to any ground lessor or mortgagee identified either in such Appendix or in
any later notice from Landlord to Tenant a copy of any notice of default sent
by Tenant to Landlord.  If Landlord fails
to cure such default within the required time period under this Lease, but
ground lessor or mortgagee begins to cure within ten (10) days after such
period and proceeds diligently to complete such cure, then ground lessor or
mortgagee shall have such additional time as is necessary to complete such
cure, including any time necessary to obtain possession if possession is
necessary to cure, and Tenant shall not begin to enforce its remedies so long
as the cure is being diligently pursued and Tenant’s right to quiet enjoyment
of the Premises is not disturbed.

 

E.             Definitions.  As used in this Section 16, “mortgage”
shall include “deed of trust” and/or “trust deed” and “mortgagee” shall include
“beneficiary” and/or “trustee”, “mortgagee” shall include the mortgagee of any
ground lessee, and “ground lessor”, “mortgagee”, and “purchaser at a
foreclosure sale” shall include, in each case, all of its successors and
assigns, however remote.

 

17.  ASSIGNMENT AND SUBLEASE.

 

A.            In General.  Tenant shall not, without the prior consent
of Landlord in each case, (i) make or allow any assignment or transfer, by
operation of law or otherwise, of any part of Tenant’s interest in this Lease, (ii) grant
or allow any lien or encumbrance, by operation of law or otherwise, upon any
part of Tenant’s interest in this Lease, (iii) sublet all or any part of
the Premises, or (iv) permit anyone other than Tenant and its employees to
occupy any part of the Premises without prior written permission of Landlord
which such permission shall not be unreasonably withheld, conditioned or
delayed.  Tenant shall remain primarily
liable for all of its obligations under this Lease, notwithstanding any
assignment, sublease or transfer.  No
consent granted by Landlord shall be deemed to be a consent to any subsequent
assignment or transfer, lien or encumbrance, sublease or occupancy.  Tenant shall pay all of Landlord’s attorneys’
fees and other expenses incurred in connection with any consent requested by
Tenant or in reviewing any proposed assignment or subletting.  Any assignment or transfer, grant of lien or
encumbrance, or sublease or occupancy without Landlord’s prior written consent
shall be void.  If Tenant assigns this
Lease or sublets and part of the Premises, then any rights of Tenant to renew
this Lease, extend the Term or to lease additional space in the Project shall
be automatically extinguished thereby and will not be transferred to the
assignee or subtenant, all such rights being personal to the Tenant named
herein.

 

B.            Landlord’s
Consent.  Landlord will not
unreasonably withhold its consent to any proposed assignment or
subletting.  It shall be reasonable for
Landlord to withhold its consent to any assignment or sublease if (i) Tenant
is in default under this Lease, (ii) the proposed assignee or subleases is
a tenant in the Project or an affiliate of such a tenant or a party that
Landlord has identified as a prospective tenant in the Project, (iii) the
financial responsibility, nature of business, and character of the proposed
assignee or subtenant are not all reasonably satisfactory to Landlord, (iv) in
the reasonable judgment of Landlord the purpose for which the assignee or
subtenant intends to use the Premises (or a portion thereof) is not in keeping
with Landlord’s standards for the Building or are in violation of the terms of
this Lease or any other leases in the Project, (v) the proposed assignee
or subtenant is a government entity, or (vi) the proposed assignment is
for less than the entire Premises or for less than the remaining Term of the
Lease.  The foregoing shall not exclude
any other reasonable basis for Landlord to withhold its consent.

 

C.            Procedure.  Tenant shall notify Landlord of any proposed
assignment or sublease at least thirty (30) days prior to its proposed
effective date. The notice shall include the name and address of the proposed
assignee or subtenant, its corporate affiliates in the case of a corporation
and

 

16

 

its partners in a case of a partnership, an execution
copy of the proposed assignment or sublease, and sufficient information to
permit Landlord to determine the financial responsibility and character of the
proposed assignee or subtenant.  Landlord
shall respond to the proposed assignment within five (5) business days of
such notice and any lack of response shall be deemed an acceptance of the
proposal by Landlord. As a condition to any effective assignment of this Lease,
the assignee shall execute and deliver in form reasonably satisfactory to
Landlord at least fifteen (15) days prior to the effective date of the
assignment, an assumption of all of the obligations of Tenant under this
Lease.  As a condition to any effective
sublease, subtenant shall execute and deliver in form reasonably satisfactory
to Landlord at least fifteen (15) days prior to the effective date of the
sublease, an agreement to comply with all of Tenant’s obligations under this
Lease, and at Landlord’s option, an agreement (except for the economic
obligations which subtenant will undertake directly to Tenant) to attorn to
Landlord under the terms of the sublease in the event this Lease terminates
before the sublease expires.

 

D.            Change of
Management or Ownership.  Any
transfer of the direct or indirect power to affect the management or policies
of Tenant or direct or indirect change in twenty-five percent (25%) or more of
the ownership interest in Tenant shall constitute an assignment of this Lease.

 

E.             Excess
Payments.  If Tenant assigns
this Lease or sublets any part of the Premises for consideration in excess of
the pro-rata portion of Rent applicable to the space subject to the assignment or
sublet, then Tenant shall pay to Landlord as Additional Rent fifty percent
(50%) of any such excess immediately upon receipt.

 

F.             Recapture.  Landlord may, by giving written notice to
Tenant within thirty (30) days after receipt of Tenant’s notice of assignment
or subletting, terminate this Lease with respect to the space described in
Tenant’s notice, as of the effective date of the proposed assignment or
sublease and all obligations under this Lease as to such space shall expire
except as to any obligations that expressly survive any termination of this
Lease.

 

G.            Permitted
Transfers.  Notwithstanding
anything to the contrary in the Lease, Tenant may, without Landlord’s prior
written consent and without payment of any amount to Landlord, sublet the Premises
or assign the Lease to (a) a subsidiary, affiliate, division or
corporation controlling, controlled by or under common control with Tenant, (b) a
successor corporation related to Tenant by merger, consolidation, nonbankruptcy
reorganization, or government action, or (c) a purchaser of substantially
all of Tenant’s assets located in the Premises, provided, however, that Tenant
shall provide a copy of the documentation effecting such permitted transfer as
soon as reasonably possible either prior to or after the effective date
thereof; and provided further, that in the event of a permitted transfer, the
assignee shall be deemed to have assumed all of the obligations of the Tenant
hereunder from and after the effective date of the assignment, and in the case
of a permitted subletting, the subtenant shall be deemed to have agreed to
comply with all of Tenant’s obligations under this Lease applicable to the
subleased Premises from and after the effective date of the sublease, and, at
Landlord’s option, will agree to attorn to
Landlord under the terms of the sublease in the event this Lease terminates
before the sublease expires.  Neither
the sale or transfer of Tenant’s capital stock, including, without limitation,
a transfer in connection with the merger, consolidation or nonbankruptcy
reorganization of Tenant and any sale through any private or public offering,
nor the pledge of or grant of a security interest in any of the Tenant’s
capital stock shall be deemed an assignment, subletting or other transfer of the
Lease or the Premises.

 

18.  CONVEYANCE BY LANDLORD.

 

If Landlord shall
at any time transfer its interest in the Building or this Lease, Landlord shall
be released of any obligations occurring after such transfer, except the
obligation to return to Tenant any security deposit not delivered to its
transferee, and Tenant shall look solely to Landlord’s 

 

17

 

successors for performance of such obligations.  This Lease shall not be affected by any such
transfer.

 

19.  ESTOPPEL CERTIFICATE.

 

Each party shall,
within ten (10) days of receiving a request from the other party, execute,
acknowledge in recordable form, and deliver to the other party or its designee
a certificate stating, subject to a specific statement of any applicable
exceptions, that the Lease as amended to date is in full force and effect, that
the Tenant is paying Rent and other charges on a current basis, and that to the
best of the knowledge of the certifying party, the other party has committed no
uncured defaults and has no offsets or claims. 
The certifying party may also be required to state the date of
commencement of payment of Rent, the Commencement Date, the Termination Date,
the Base Rent, the current Operating Cost Share Rent and Tax Share Rent
estimates, the status of any improvements required to be completed by Landlord,
the amount of any security deposit, and such other matters as may be reasonably
requested.  Failure to deliver such
statement within the time required shall be conclusive evidence against the
non-certifying party that this Lease, with any amendments identified by the
requesting party, is in full force and effect, that there are no uncured
defaults by the requesting party, that not more than one month’s Rent has been
paid in advance, that the non-certifying party has not paid any security
deposit, and that the non-certifying party has no claims or offsets against the
requesting party.

 

20.  SECURITY DEPOSIT.

 

A.                                    Use
of Security Deposit.  Tenant shall
deposit with Landlord the sum of Twenty Thousand Dollars ($20,000) in cash on
the date of this Lease as security for the performance of all of Tenant’s
obligations under the Lease.  In
addition, within five (5) days after Landlord so requests, which in no
event shall be later than the date Tenant first occupies the Premise, Tenant
will either (a) deliver to Landlord documents, bank statements, and
reports (including in particular statements of account issued by banks and
investment firms) that show to Landlord’s reasonable satisfaction that Tenant
has an unrestricted cash balance of at least $1 million in good and immediately
available funds (not including amounts that could be drawn on under lines of
credit or other debt agreements), or (b) deliver to Landlord an additional
Forty Thousand Dollars ($40,000) in the form of a Letter of Credit as described
in Section 20.B below.  The cash
deposit and the Letter of Credit are together referred to herein as the “Security
Deposit”.  Landlord may keep the cash
deposit in its general funds and will not be required to pay interest to Tenant
on the cash deposit amount.

 

If Tenant defaults
under this Lease, Landlord may use all or any part of the Security Deposit to
make any defaulted payment, to pay for Landlord’s cure of any defaulted
obligation.  If any portion of the
Security Deposit is used, then Tenant shall within five (5) days after
demand from Landlord restore the Security Deposit to its then-full amount.  If Tenant performs all of its obligations
under this Lease and returns the Premises to Landlord at the end of the Term in
the condition required by this Lease, then Landlord shall return the cash
deposit to Tenant.  Further, if either (i) Tenant
performs all of its obligations under this Lease and returns the Premises to
Landlord at the end of the Term in the condition required by this Lease, or (ii) on
January 1, 2002 and no Event of Default has occurred, Landlord shall
release the Letter of Credit and return the original of the Letter of Credit to
Tenant within thirty (30) days after such date. 
The Security Deposit shall not serve as an advance payment of Rent or a
measure of Landlord’s damages for any default under this Lease.

 

If Landlord
transfers its interest in the Building or this Lease, Landlord may transfer its
interest in the Security Deposit to its transferee.  At any time, upon request by Landlord or its
transferee Tenant shall cause a new Letter of Credit to be issued in favor of
Landlord’s transferee.

 

18

 

B.                                    Letter
of Credit.  As used in this Lease, “Letter
of Credit” means an unconditional and irrevocable letter of credit issued by a
federally-insured banking institution reasonably acceptable to Landlord in the
amount of Forty Thousand Dollars ($40,000). 
If the Letter of Credit (or any replacement thereof) is issued for an
effective period of time less than the sixty-six month initial Term of this
Lease, then Tenant shall from time to time, and not later than thirty (30) days
before the expiration of the Letter of Credit, replace each such expiring
Letter of Credit with a new Letter of Credit in the same amount and on the same
terms and conditions as the expiring Letter of Credit.  Landlord (or its transferee, as provided in Section 20.A
above) may draw on the Letter of Credit (and any replacement thereof) under the
terms and conditions provided in this Section 20.  Tenant’s failure to renew the Letter of
Credit at least thirty (30) days before it expires is an Event of Default under
this Lease and shall entitle Landlord, in addition to the other remedies
contained in this Lease, and without any further notice to Tenant, to draw on
the Letter of Credit.  If Landlord fails
for any reason to draw on the Letter of Credit before it expires (or if the
issuer is unable to honor such draw request for any reason, including due to
governmental regulatory intervention or financial deterioration), then Tenant
shall on demand from Landlord, immediately deliver to Landlord a replacement
Letter of Credit in the same amount as the Letter of Credit that had expired
(or had been rendered incapable of being honored).

 

C.            Waiver.  Notwithstanding anything to the contrary
contained herein, Tenant knowingly, and on advice of counsel, waives any right
it may have to enjoin, declare or otherwise prohibit the issuer of the Letter
of Credit from paying, or Landlord from drawing on, the Letter of Credit, provided
however, that the Letter of Credit is drawn upon by Landlord in
accordance with the terms hereof.  If
Tenant attempts to obtain, or obtains, an injunction or other legal writ that
prevents the issuer from paying, or Landlord from drawing on, the Letter of
Credit and such action is in accordance with the terms hereof, then Tenant
shall immediately, without further notice from Landlord either (a) extend
the Letter of Credit during the time period ending ten (10) days after
expiration of the injunction or other legal writ; or (b) provide Landlord
other reasonably satisfactory security. 
In the case of litigation concerning the Letter of Credit and Landlord’s
rights thereto, prevailing party shall promptly be reimbursed its attorneys’
fees, court costs, and other expenses related to the litigation by the other
party.

 

21.  FORCE MAJEURE.

 

Landlord shall not
be in default under this Lease to the extent Landlord is unable to perform any
of its obligations on account of any strike or labor problem, energy shortage,
governmental preemption or prescription, national emergency, or any other cause
of any kind beyond the reasonable control of Landlord (“Force Majeure”).

 

22.  TENANT’S
PERSONAL PROPERTY AND FIXTURES.

 

  In addition to any statutory lien, Tenant
hereby grants to Landlord a lien against and security interest in all of Tenant’s
personal property and fixtures now or hereafter located within the Premises as
security for performance of all of Tenant’s obligations under this Lease.  Tenant may replace such personal property and
fixtures with items of equal or better quality, but shall not otherwise remove
them from the Premises without the consent of Landlord until all of the
obligations of Tenant under this Lease have been performed.  This Lease constitutes a security agreement
creating a security interest in such property in favor of Landlord, subject
only to the liens of existing creditors, and Landlord may at any time file this
Lease as a financing statement under the Uniform Commercial Code of the state
in which the Project is located. 
Alternatively, if requested to do so by Landlord, Tenant shall execute
and deliver within ten (10) days of such request a Form UCC-1
Financing Statement wherein Landlord is the Secured Party and Tenant is the
Debtor.

 

19

 

23.  NOTICES.

 

All notices,
consents, approvals and similar communications to be given by one party to the
other under this Lease, shall be given in writing, mailed or personally
delivered as follows:

 

A.            Landlord.  To Landlord as follows:

 

CarrAmerica Realty
Corporation

10785 Willows Road NE, Suite 250

Redmond, WA  98052

Attn:  Market Officer

 

with a copy to:

 

CarrAmerica Realty Corporation

1850 K Street, NW

Suite 500

Washington, D.C. 20006

Attn:  Lease Administration

 

or to such other person at such other address as
Landlord may designate by notice to Tenant.

 

B.            Tenant.  To Tenant as follows:

 

Focus Enhancements, Inc.

600 Research Drive

Wilmington, MA 01887

Attn: General Counsel

 

or to such other person at such other address as
Tenant may designate by notice to Landlord.

 

Mailed
notices shall be sent by United States certified or registered mail, or by a
reputable national overnight courier service, postage prepaid.  Mailed notices shall be deemed to have been
given on the earlier of actual delivery or three (3) business days after
posting in the United States mail in the case of registered or certified mail,
and one business day in the case of overnight courier.

 

24.  QUIET POSSESSION.

 

So long as Tenant
shall perform all of its obligations under this Lease, Tenant shall enjoy
peaceful and quiet possession of the Premises against any party claiming
through the Landlord.

 

25.  REAL ESTATE BROKER.

 

Tenant represents
to Landlord that Tenant has not dealt with any real estate broker with respect
to this Lease except for any broker(s) listed in the Schedule, and no
other broker is in any way entitled to any broker’s fee or other payment in
connection with this Lease.  Tenant shall
indemnify and defend Landlord against any claims by any other broker or third
party for any payment of any kind in connection with this Lease.

 

26.  MISCELLANEOUS.

 

A.            Successors
and Assigns.  Subject to the
limits on Tenant’s assignment contained in Section 17, the provisions of
this Lease shall be binding on and inure to the benefit of all successors and
assigns of Landlord and Tenant.

 

B.            Date
Payments Are Due.  Except for
payments to be made by Tenant under this Lease which are due upon demand or are
due in advance (such as Base Rent), Tenant shall pay to Landlord any amount for
which Landlord renders a statement of account within ten days of Tenant’s
receipt of Landlord’s statement, provided such sums are due and owing pursuant
to this Lease.

 

20

 

C.            Meaning of “Landlord”,
“Re-Entry, “including” and “Affiliate.”  The term “Landlord” means only the owner of
the Project and the lessor’s interest in this Lease from time to time.  The words “re-entry” and “re-enter” are not
restricted to their technical legal meaning. 
The words “including” and similar words shall mean “without limitation.”  The word “affiliate” shall mean a person or
entity controlling, controlled by or under common control with the applicable
entity.  “Control” shall mean the power
directly or indirectly, by contract or otherwise, to direct the management and
policies of the applicable entity.

 

D.            Time of the
Essence.  Time is of the
essence of each provision of this Lease.

 

E.             No Option.  This document shall not be effective for any
purpose until it has been executed and delivered by both parties; execution and
delivery by one party shall not create any option or other right in the other
party.

 

F.             Severability.  The unenforceability of any provision of this
Lease shall not affect any other provision.

 

G.            Governing
Law.  This Lease shall be
governed in all respects by Oregon law, without regard to the principles of
conflicts of laws.

 

H.            Lease
Modification.  Tenant agrees
to modify this Lease in any way requested by a mortgagee which does not cause
increased expense to Tenant or otherwise materially adversely affect Tenant’s
interests under this Lease.  Any expense
incurred by Tenant in the review of such changes shall be borne by Landlord.

 

I.              No Oral
Modification.  No modification
of this Lease shall be effective unless it is a written modification signed by
both parties.

 

J.             Landlord’s
Right to Cure.  If Landlord
breaches any of its obligations under this Lease, Tenant shall notify Landlord
in writing and shall take no action respecting such breach so long as Landlord
promptly begins to cure the breach and diligently pursues such cure to its
completion, providing however, that such breach does not materially interfere
with Tenant’s quiet enjoyment of the Premises. 
Landlord may cure any default by Tenant; any expenses incurred shall
become Additional Rent due from Tenant on demand by Landlord.

 

K.            Captions.  The captions used in this Lease shall have no
effect on the construction of this Lease.

 

L.            Authority.  Landlord and Tenant each represents to the
other that it has full power and authority to execute and perform this Lease.

 

M.           Landlord’s
Enforcement of Remedies. 
Landlord may enforce any of its remedies under this Lease either in its
own name or through an agent.

 

N.            Entire
Agreement.  This Lease,
together with all Appendices, constitutes the entire agreement between the
parties.  No representations or
agreements of any kind have been made by either party which are not contained
in this Lease.

 

O.            Landlord’s
Title.  Landlord’s title shall
always be paramount to the interest of the Tenant, and nothing in this Lease
shall empower Tenant to do anything which might in any way impair Landlord’s
title.

 

P.            Light and
Air Rights.  Landlord does not
grant in this Lease any rights to light and air in connection with
Project.  Landlord reserves to itself,
the Land, the Building below the improved floor of each floor of the Premises,
the Building above the ceiling of each floor of the Premises, the exterior of
the Premises and the areas on the same floor outside the Premises, along 

 

21

 

with the areas within the Premises required for the
installation and repair of utility lines and other items required to serve
other tenants of the Building.

 

Q.            Singular and
Plural.  Wherever appropriate
in this Lease, a singular term shall be construed to mean the plural where
necessary, and a plural term the singular. 
For example, if at  any time two
parties shall constitute Landlord or Tenant, then the relevant term shall refer
to both parties together.

 

R.            No Recording
by Tenant.  Tenant shall not
record any memorandum or any portion of this Lease.

 

S.            Exclusivity.  Landlord does not grant to Tenant in this
Lease any exclusive right except the right to occupy its Premises.

 

T.            No
Construction Against Drafting Party. 
The rule of construction that ambiguities are resolved against the
drafting party shall not apply to this Lease.

 

U.            Survival.  All obligations of Landlord and Tenant under
this Lease shall survive the termination of this Lease.

 

V.            Rent Not
Based on Income.  No rent or
other payment in respect of the Premises shall be based in any way upon net
income or profits from the Premises. 
Tenant may not enter into or permit any sublease or license or other
agreement in connection with the Premises which provides for a rental or other
payment based on net income or profit.

 

W.           Building
Manager and Service Providers. 
Landlord may perform any of its obligations under this Lease through its
employees or third parties hired by the Landlord.

 

X.            Late Charge
and Interest on Late Payments. 
Without limiting the provisions of Section 12A, if Tenant fails to
pay any installment of Rent or other charge to be paid by Tenant pursuant to
this Lease within five (5) business days after the same becomes due and
payable, then Tenant shall pay a late charge equal to the greater of five
percent (5%) of the amount due or $250. 
In addition interest shall be paid to Tenant to Landlord on any late
payments of Rent from the date due until paid at the rate provided in Section 2D(2).  Such late charge and interest shall
constitute Additional Rent due and payable by Tenant to Landlord upon the date
of payment of the delinquent payment referenced above.

 

Y.            Tenant’s
Financial Statements.  Within
ten (10) days after Landlord’s written request therefor, Tenant shall
deliver to Landlord the current audited annual and quarterly financial statements
of Tenant, and annual audited financial statements of the two (2) years
prior to the current year’s financial statements, each with an option of a
certified public accountant and including a balance sheet and profit and loss
statement, all prepared in accordance with generally accepted accounting
principles consistently applied.

 

Z.            Parking.  Landlord shall maintain a parking ratio in
the parking area serving the Premises of four (4) cars per 1,000 RSF of
Premises.

 

27.  UNRELATED BUSINESS INCOME.

 

If Landlord
reasonably believes at any time that any part of the payments by Tenant to
Landlord under this Lease may be characterized as unrelated business income
under the United States Internal Revenue Code and its regulations, then Tenant
shall enter into any reasonable amendment proposed by Landlord to avoid such
income, so long as the amendment does not require Tenant to make more payments
or accept fewer services from Landlord, than this Lease provides.

 

22

 

28.  HAZARDOUS SUBSTANCES.

 

Tenant shall not
cause or permit any Hazardous Substances to be brought upon, produced, stored,
used, discharged or disposed of in or near the Project unless Landlord has
consented to such storage or use in its sole discretion.  “Hazardous Substances” include those
hazardous substances described in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601
et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901
et seq., any other applicable federal, state or local law, and the regulations
adopted under these laws.  If any lender
or governmental agency shall require testing for Hazardous Substances in the
Premises, Tenant shall pay for such testing.

 

29.  EXCULPATION.

 

Landlord shall
have no personal liability under this Lease; its liability shall be limited to
its interest in the Project, and shall not extend to any other property or
assets of the Landlord.  In no event
shall any officer, director, employee, agent, shareholder, partner, member or
beneficiary of Landlord be personally liable for any of Landlord’s obligations
hereunder.

 

30.  UTILITY DEREGULATION.

 

A.            Landlord
Controls Selection.  Landlord
has chosen Portland General Electric and Duke Power (each, an “Electric Service
Provider”) to provide electricity service for the Building.  Notwithstanding the foregoing, to the extent
permitted by law, Landlord may at any time and from time to time during the
Lease Term, either contract for service from a different company or companies
providing electricity service (each such company, an “Alternative Service
Provider”) or continue to contract for service from the Electric Service
Provider.

 

B.            Tenant Will
Provide Access.  Tenant will
cooperate with Landlord, the Electric Service Provider, and any Alternative
Service Provider at all times and, as reasonably necessary, will allow
Landlord, Electric Service Provider, and any Alternative Service Provider
reasonable access to the Building’s electric lines, feeders, risers, wiring,
and any other machinery in the Premises, subject to the other limitations set
forth in this Lease.

 

C.            Landlord Not
Responsible for Change in Service. 
Landlord will have no liability for any loss, damage, or expense Tenant
may incur (a) by reason of any change, failure, interference, disruption,
or defect in the supply or character of the electric energy furnished to the
Premises, or (b) if the quantity or character of the electric energy
supplied by the Electric Service Provider or any Alternative Service Provider
is no longer available or suitable for Tenant’s requirements.  No such change, failure, defect,
unavailability, or unsuitability will constitute an actual or constructive
eviction of Tenant, in whole or in part, entitle Tenant to any abatement or
diminution of Rent, or relieve Tenant from any of its obligations under this
Lease.

 

IN WITNESS
WHEREOF, the parties hereto have executed this Lease.

 

23

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  CARRAMERICA REALTY CORPORATION,
  a

  Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda Madrid

  
	
   

  	
  Print Name:

  	
  Linda Madrid

  
	
   

  	
  Print Title: 

  	
  General Counsel
  and Corp Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  FOCUS ENHANCEMENTS, INC., a
  Delaware

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris Ricci

  
	
   

  	
  Print Name:

  	
  Chris Ricci

  
	
   

  	
  Print Title: 

  	
  Sr. VP and
  General Counsel

  
								

 

Attachments:

	
  Appendix A

  	
  –

  	
  Plan of Premises

  
	
  Appendix B

  	
  –

  	
  Rules and Regulations

  
	
  Appendix C

  	
  –

  	
  Tenant Improvement Agreement

  
	
  Appendix D

  	
  –

  	
  Mortgages Currently Affecting the Project

  
	
  Appendix E

  	
  –

  	
  Commencement Date Confirmation

  
	
  Appendix F

  	
  –

  	
  Legal Description

  
	
  Addendum 1

  	
  –

  	
  Renewal Option

  
	
  Addendum 2

  	
  –

  	
  Right of First Offer

  

 

24

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