EXHIBIT 10.6
▇▇▇▇▇▇▇ BAY OFFICE PARK
OFFICE LEASE
THIS LEASE, made the day of , 1998, by and
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between ▇▇▇▇▇ REAL ESTATE HOLDINGS SIX, a Washington general partnership, whose
address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇,
hereinafter referred to as "Lessor" and Cell Therapeutics Inc., a Washington
Corporation, whose address is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, hereinafter
referred to as "Lessee".
1. DESCRIPTION, Lessor in consideration of the agreements contained
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in this lease, does hereby lease to Lessee, upon the terms and conditions
hereinafter set forth, that certain space consisting of the agreed upon square
footage of approximately 11,955 rentable square feet (11,149 usable square
feet), calculated according to the Building Owners and Managers Association
International ("BOMA") standards, the exact square footage of which shall be
determined by final drawings (hereinafter referred to as "Premises") situated on
the 5th floor level of the ▇▇▇▇▇▇▇ Bay Office Park, 300 ▇▇▇▇▇▇▇ Avenue West,
City of ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the legal description of which is:
Parcel A: All of Block 9, ▇.▇. ▇▇▇▇▇'▇ Waterfront Addition to the
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City of Seattle, according to the plat recorded in Volume 2 of Plats,
Page 61, in King County, Washington.
Parcel B: ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
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2. TERM, The term of this lease shall be for a period of 36 months,
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commencing sixty (60) days after the space is delivered to Lessee by Lessor or
upon the issuance of a certificate of occupancy, whichever occurs first, and
ending 36 months thereafter, provided however, if Lessor has not delivered the
space to Lessee by July 1, 1998, Lessee shall have the right to immediately
terminate this lease and any advance payments made to Lessor shall be refunded.
3. RENT, Lessee covenants and agrees to pay Lessor rent each month
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in advance on the first day of each calendar month. Rent shall be computed at
the annual base rental rate of $19.50 per rentable square foot. Rent for any
fractional calendar month, at the beginning or end of the term, shall be the pro
rated portion of the rent computed on an annual basis.
4. CONSIDERATION, As consideration for the execution of this lease,
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Lessee has this date paid to Lessor a security deposit in the sum of $19,500.00,
receipt of which is hereby acknowledged. In the event Lessee fully complies
with all the terms and conditions of this lease, but not otherwise, an amount
equal to such sum shall be credited on the last month's rental on the term of
this lease. Any portion of the sum remaining as of the expiration or
termination of this lease shall be immediately paid to Lessee.
5. USES, Lessee agrees that Lessee will use and occupy said
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Premises for general office and related purposes and for no other purposes.
6. RULES AND REGULATIONS, Lessee and their agents, employees,
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servants or those claiming under Lessee will at all times observe, perform and
abide by all of the Rules and Regulations printed on this instrument, or which
may be hereafter promulgated by Lessor, all of which it is covenanted and agreed
by the parties hereto shall be and are hereby made a part of this lease,
provided however, that any amendments thereto will be reasonable and applied on
a non-discriminatory basis.
7. CARE AND SURRENDER OF PREMISES, Lessee shall take good care of
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the Premises and shall promptly make all necessary repairs except those required
herein to be made by Lessor. Lessor agrees to make all necessary structural
repairs to the building and the Premises, unless such repairs are necessitated
by acts or omissions of Lessee. At the expiration or sooner termination of this
lease, Lessee, without notice, will immediately and peacefully quit and
surrender the Premises in good order, condition and repair (damage by reasonable
wear, the elements, or fire excepted). Lessee shall be responsible for removal
of all of Lessee's property from the Premises, including, but not limited to,
the removal of Lessee's telephone equipment and signage. Lessee shall be
responsible for repairing any damage to the Premises caused by such removal. If
Lessee fails to remove and restore the Premises at lease expiration, then Lessor
shall have the right to remove said property and restore the Premises and Lessee
shall be responsible for all reasonable costs associated therewith. Lessee
shall also be responsible for those reasonable costs incurred by Lessor for
removing debris Lessee may discard in the process of preparing to vacate the
Premises and for a final cleaning of the Premises, including, but not limited
to, the cleaning, or replacement of carpets if damage is not caused by
reasonable wear, and removal and disposal of Lessee's personal property
remaining in the Premises.
8. ALTERATIONS, Lessee shall not make any alterations or
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improvements in, or additions to said Premises without first obtaining the
written consent of Lessor, whose consent shall not be unreasonably withheld,
conditioned or delayed. Lessor shall respond to any such notice by Lessee
within fifteen (15) days. The failure of Lessor to respond within such time
shall be acceptance thereof. Except as provided in Paragraphs 37 and 38 herein,
all such alterations, additions and improvements shall be at the sole cost and
expense of Lessee and shall become the property of Lessor and shall remain in
and be surrendered with the Premises as a part thereof at the termination of
this lease, without disturbance, molestation or injury.
9. RESTRICTIONS, Lessee will not use or permit to be used in said
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Premises anything that will increase the rate of insurance on said building or
any part thereof, nor anything that may be dangerous to life or limb; nor in any
manner deface or injure said building or any part thereof; nor overload any
floor or part thereof; nor permit any objectionable noise or odor to escape or
to be emitted from said Premises, or do anything or permit anything to be done
upon said Premises in any way tending to create a nuisance or to disturb any
other tenant or occupant of any part of said building. Lessee, at Lessee's
expense, will comply with all health, fire and police regulations respecting
Lessee's use of said Premises. The Premises shall not be used for lodging or
sleeping, and no animals or birds will be allowed in the building.
10. WEIGHT RESTRICTIONS, Safes, furniture or bulky articles may be
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moved in or out of said Premises only at such hours and in such manner as will
least inconvenience other tenants, which hours and manner shall be at the
reasonable discretion of Lessor. No safe or other article of over 2,000 pounds
shall be moved into said Premises without the consent of Lessor, whose consent
shall not be unreasonably withheld, and Lessor shall have the right to locate
the position of any article of weight in said Premises if Lessor so desires.
11. SIGN RESTRICTION, No sign, picture, advertisement or notice
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shall be displayed, inscribed, painted or affixed to any of the glass or
woodwork of the building without the prior approval of Lessor. Lessor shall, at
Lessor's expense, place Lessee's name on the lobby and 5th floor directory.
Signage for Lessee's office suite shall be at Lessee's expense.
12. LOCKS, No additional locks shall be placed upon any doors of the
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Premises. Keys will be furnished to each door lock. At the termination of the
lease, Lessee shall surrender all keys to the Premises whether paid for or not.
13. KEY, Lessor, his janitor, engineer or other agents may retain a
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pass key to said Premises to enable him to examine the Premises from time to
time with reference to any emergency or to the general maintenance of said
Premises.
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14. TELEPHONE SERVICE, If Lessee desires telephonic or any other
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electric connection, Lessor will direct the electricians as to where and how the
wires are to be introduced, and without such directions no boring or cutting for
wires in installation thereof will be permitted.
15. SERVICES, Lessor shall maintain Premises and the public and
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common areas of building, such as lobbies, stairs, corridor and restrooms, in
reasonably good order and condition except for damage occasioned by the act of
Lessee.
Lessor shall furnish Premises with electricity for lighting and
operation of low power usage office machines, heat, normal office air-
conditioning, and elevator services, during the ordinary business hours of the
building. Air-conditioning units and electricity therefore for special air-
conditioning requirements, such as for computer centers, shall be at Lessee's
expense. Lessor shall also provide lighting replacement for Lessor furnished
lighting, toilet room supplies, window washing with reasonable frequency, and
customary janitor service.
Lessor shall not be liable to Lessee for any loss or damage caused by
or resulting from any variation, interruption or any failure of said services
due to any cause whatsoever. No temporary interruption or failure of such
services incident to the making of repairs, alterations, or improvements, or due
to accident or strike or conditions or events not under Lessor's control shall
be deemed as an eviction of Lessee or relieve Lessee from any of Lessee's
obligations hereunder, provided however, that Lessee shall be entitled to a rent
abatement after an interruption of service continues for 72 consecutive hours.
In the event of any lack of attention on the part of Lessor and any
dissatisfaction with the service of the building, or any unreasonable annoyance
of any kind, Lessee is requested to make complaints at Lessor's building office
and not to Lessor's employees or agents seen within the building. Lessee is
further requested to remember that Lessor is as anxious as Lessee that a high
grade service be maintained, and that the Premises be kept in a state to enable
Lessee to transact business with the greatest possible ease and comfort. The
rules and regulations are not made to unnecessarily restrict Lessee, but to
enable Lessor to operate the building to the best advantage of both parties
hereto. To this end Lessor shall have the right to waive from time to time such
part or parts of these rules and regulations as in his judgment may not be
necessary for the proper maintenance or operation of the building or consistent
with good service, and may from time to time make such further reasonable rules
and regulations as in his judgment may be needed for the safety, care and
cleanliness of the Premises and the building and for the preservation of order
therein.
16. SOLICITORS, Lessor will make an effort to keep solicitors out of
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the building, and Lessee will not oppose Lessor in his attempt to accomplish
this end.
17. FLOOR PLAN, The floor plan and specifications for Lessee's
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occupancy will be attached hereto and marked Exhibit "A" which shall be approved
by both Lessor and Lessee, both of whose approval shall not be unreasonably
withheld or conditioned.
18. ASSIGNMENT, Lessee will not assign this lease, without Lessor's
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consent, or any interest hereunder, and this lease, or any interest hereunder,
shall not be assigned by operation of law. Lessee will not sublet said Premises
or any part thereof and will not permit the use of said Premises by others other
than Lessee and the agents of Lessee without first obtaining the written consent
of Lessor, whose consent shall not be unreasonably withheld or conditioned. In
the event such written consent shall be given, no other or subsequent assignment
or subletting shall be made without the previous written consent of Lessor,
whose consent shall not be unreasonably withheld or conditioned. Lessor's
failure to respond within fifteen (15) days to Lessee's request to assign or
sublease the Premises shall constitute Lessor's acceptance thereof. In the
event Lessee desires to assign or sublet said Premises or any part thereof,
Lessor shall have the first right to re-capture that portion of the Premises
which Lessee intends to sublease. Notwithstanding the above, Lessee may assign
this lease or sublease the Premises to affiliates or subsidiaries or related
entities that result from a merger without Lessor's consent.
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19. OPERATING SERVICES AND REAL ESTATE TAXES, The annual base rental
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rate per rentable square foot in Paragraph 3 includes Lessee's proportionate
share of Operating Services and Real Estate Taxes for the first twelve months of
the lease term, "Base Year Costs". Only actual increases from these Base Year
Costs, if any, will be passed on to Lessee on a proportionate basis.
DEFINITIONS
Base Year
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For computing the Base Year Costs, the base year shall be the calendar year
stated herein or if a specific calendar year is not stated herein then the base
year shall be the calendar year in which the lease term commences. The base
year shall be the calendar year 1998.
Comparison Year
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The Comparison Year(s) shall be the calendar year(s) subsequent to the base
year.
Operating Services
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"Operating Services" include, but are not limited to, the charges incurred by
Lessor for: building operation salaries, benefits, management fee of five
percent (5%) of gross income for the building, insurance, electricity,
janitorial, supplies, telephone, HVAC, repair and maintenance, window washing,
water and sewer, security, landscaping, disposal, elevator, and other charges
which are reasonable, customary and generally accepted as "Operating Services"
in the market place. Operating Services shall also include the amortization
cost of capital investment items and of the installation thereof, which are
primarily for the purpose of safety, saving energy or reducing operating costs,
and only to the extent of such actual savings in Operating Services, or which
may be required by governmental authority not in effect as of the commencement
date hereof, (all such costs shall be amortized over the reasonable life of the
capital investment item, with the reasonable life and amortization schedule
being determined in accordance with generally accepted accounting principles).
Notwithstanding anything to the contrary contained herein, Operating Services
shall not include any of the following:
(i) real estate taxes
(ii) legal fees, auditing fees, brokerage commissions, advertising
costs, or other related expenses incurred by Lessor in an effort to generate
rental income;
(iii) repairs, alterations, additions, improvements, or replacements
made to rectify or correct any defect in the original design, materials or
workmanship of the building or common areas (but not including repairs,
alterations, additions, improvements or replacements made as a result of
ordinary wear and tear);
(iv) damage and repairs attributable to fire or other casualty;
(v) damage and repairs necessitated by the negligence or willful
misconduct of Lessor, Lessor's employees, contractors or agents;
(vi) executive salaries to the extent that such services are not in
connection with the management, operation, repair or maintenance of the
building;
(vii) Lessor's general overhead expenses not related to the building;
(viii) legal fees, accountant's fees and other expenses incurred in
connection with disputes with tenants or other occupants of the building or
associated with the enforcement of the terms of any leases with tenants or the
defense of Lessor's title to or interest in the building or any part thereof
unless the outcome is to the financial benefit of all tenants;
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(ix) costs (including permit, license and inspection fees)
incurred in renovating or otherwise improving, decorating, painting or
altering (1) vacant space (excluding common areas) in the building or (2)
space for tenants or other occupants in the building and costs incurred in
supplying any item or service to less than all of the tenants in the building;
(x) costs incurred due to a violation by Lessor or any other
tenant of the building of the terms and conditions of a lease;
(xi) cost of any specific service provided to Lessee or other
occupants of the building for which Lessor is reimbursed (but not including
Operating Services and Real Estate Tax increases above Base Year Costs to the
extent reimbursed Lessor) or any other expense for which Lessor is or will be
reimbursed by another source (i.e., expenses covered by insurance or
warranties);
(xii) costs and expenses which would be capitalized under generally
accepted accounting principles, with the exception of the capital investment
items specified hereinabove;
(xiii) building management fees in excess of the management fees
specified hereinabove;
(xiv) cost incurred with owning and/or operating the parking lot(s)
serving the building by independent parking operator(s).
(xv) fees paid to Lessor or any affiliate of Lessor for goods or
services in excess of the fees that would typically be charged by unrelated,
independent persons or entities for similar goods and services;
(xvi) rent called for under any ground lease or master lease;
(xvii) principal and/or interest payments called for under any debt
secured by a mortgage or deed of trust on the building; and
Operating Services shall be adjusted for the Base Year and all Comparison
Year(s) to reflect the greater of actual occupancy or 95% occupancy.
Real Estate Taxes
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Real Estate Taxes shall be the taxes paid by Lessor in the base year and each
respective Comparison Year. Real Estate Taxes shall be a separate category and
shall be treated as such.
Proportionate Basis
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Lessee's share of Base Year and Comparison Year(s) Costs shall be a fraction,
the numerator of which shall be the number of rentable square feet contained in
the leased Premises (see Paragraph 1) and the denominator of which shall be the
number of rentable square feet in the building in which the leased Premises are
located (220,845/RSF).
Computation of Adjustments to Base Year Costs
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Any adjustment to Base Year Costs will commence to occur in Month 13 of the
lease term with subsequent adjustments commencing every twelve months of the
lease term or in Months 25, 37, 49, etc. as appropriate under the lease term.
Lessee shall be responsible for any increase between Lessee's proportionate
share of Base Year Costs and Lessee's proportionate share of each respective
Comparison Year(s) Costs. The increase shall be the increase to each expense
individually. These costs shall be initially calculated based on estimated
(projected) costs with reconciliation to actual costs when annual audited
numbers are completed. For the purpose of calculating projected increases to
Base Year Costs, Lessor shall review historical data to predict if any estimated
increases would be anticipated in a Comparison Year(s). If they are, then
commencing in Month 13 and/or
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every twelve month period thereafter, Lessor will assess a monthly charge to
be paid together with monthly base rent. Once actual cost data for Comparison
Year(s) Real Estate Taxes and Operating Services for the entire building is
formulated in accordance with generally accepted accounting principles and
adjusted to the greater of actual occupancy or 95% occupancy, then Lessee's
estimated pass-through costs shall be corrected with Lessee or Lessor, as
appropriate, reimbursing the other for the difference between the estimated
and actual costs, at that time in a lump sum payment.
Upon termination of this lease, the amount of any corrected amount between
estimated and actual costs with respect to the final comparison year shall
survive the termination of the lease and shall be paid to Lessee or Lessor as
appropriate within thirty (30) days after final reconciliation.
Computation of or adjustment to Operating Services and/or Real Estate Taxes
pursuant to this paragraph or to rent pursuant to Paragraph 3 shall be computed
based on a three hundred sixty-five (365) day year.
For an example, see Exhibit B attached hereto.
20. ADDITIONAL TAXES OR ASSESSMENTS, Should there presently be in
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effect or should there be enacted during the term of this lease, any law,
statute or ordinance levying any assessment or any tax upon rents or the income
from real estate or rental property (other than federal or state income taxes),
Lessee shall reimburse Lessor for Lessee's proportionate share of said expenses
at the same time as rental payments.
21. LATE PAYMENTS, On any payment, required to be made pursuant to
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this Lease, which is not made on the date the same is due, Lessor shall have the
right to assess interest at a rate equal to three percent (3%) above the prime
rate of interest charged from time to time by Seafirst National Bank, or its
successor.
In addition to any interest charged herein, a late charge of five
percent (5%) of the payment amount shall be incurred for payments received more
than five (5) days late.
22. RISK, All personal property of any kind or description
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whatsoever in the demised Premises shall be at Lessee's sole risk. Lessor shall
not be liable for any damage done to or loss of such personal property or damage
or loss suffered by the business or occupation of the Lessee arising from any
acts or neglect of co-tenants or other occupants of the building, or of Lessor
or the employees of Lessor, or of any other persons, or from bursting,
overflowing or leaking of water, sewer or steam pipes, or from the heating or
plumbing or sprinklering fixtures, or from electric wires, or from gas, or
odors, or caused in any other manner whatsoever except in the case of negligence
or willful misconduct on the part of Lessor or its agents. Lessee shall keep in
force throughout the term of this lease such casualty, general liability and
business interruption insurance as a prudent tenant occupying and using the
Premises would keep in force.
23. INDEMNIFICATION, Either party will defend, indemnify and hold
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harmless the other party from any claim, liability or suit including attorney's
fees on behalf of any person, persons, corporations and/or firm for any injuries
or damages occurring in or about the said Premises or on or about the sidewalk,
stairs, or thoroughfares adjacent thereto where said damages or injury was
caused by the negligence or intentional act of the other party, its agents,
employees, servants, customers or clients.
24. WAIVER OF SUBROGATION, Lessee and Lessor do hereby release and
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relieve the other, and waive their entire claim of recovery for loss, damage,
injury, and all liability of every kind and nature which may arise out of, or be
incident to, fire and extended coverage perils, in, on, or about the Premises
herein described, whether due to negligence of either of said parties, their
agents, or employees, or otherwise. Lessor will provide a non-disturbance
agreement from any beneficiary of an existing or future deed of trust.
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25. SUBORDINATION, This lease and all interest and estate of Lessee
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hereunder is subject to and is hereby subordinated to all present and future
mortgages and deeds of trust affecting the Premises or the property of which
said Premises are a part. Lessee agrees to execute at no expense to the Lessor,
any instrument which may reasonably be deemed necessary or desirable by the
Lessor to further effect the subordination of this lease to any such mortgage or
deed of trust. In the event of a sale or assignment of Lessor's interest in the
Premises, or in the event of any proceedings brought for the foreclosure of, or
in the event of exercise of the power of sale under any mortgage or deed of
trust made by Lessor covering the Premises, Lessee shall attorn to the purchaser
or assignee and recognize such purchaser or assignee as Lessor and the purchaser
or assignee, provided that Lessee is not in default, shall recognize the Lessee
as the tenant under and in accordance with the terms of this lease. Lessee
agrees to execute, at no expense to Lessor, any estoppel certificate reasonably
deemed necessary or desirable by Lessor to further effect the provisions of this
paragraph.
26. CASUALTY, In the event the leased Premises or the said building
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is destroyed or injured by fire, earthquake or other casualty to the extent that
they are untenantable in whole or in part, then Lessor may, at Lessor's option,
proceed with reasonable diligence to rebuild and restore the said Premises or
such part thereof as may be injured as aforesaid, provided that within sixty
(60) days after such destruction or injury Lessor will notify Lessee of Lessor's
intention to do so, and during the period of such rebuilding and restoration the
rent shall be abated on the portion of the Premises that is unfit for occupancy.
If rebuilding and restoration are not substantially completed within 120 days of
the casualty so that Lessee cannot reasonably conduct business therein, then
Lessee shall have the option to terminate this lease. Provided however, if
Lessor can provide comparable alternative space within the building, the Lessee
shall not have the right to terminate. Lessee shall pay for the temporary space
at the market rate or Lessee's existing rate, whichever is lower and Lessor
agrees to pay the costs of relocation.
27. INSOLVENCY, If Lessee becomes insolvent, or makes an assignment
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for the benefit of creditors, or a receiver is appointed for the business or
property of Lessee, or a petition is filed in a court of competent jurisdiction
to have Lessee adjudged bankrupt, then Lessor may at Lessor's option terminate
this lease. Said termination shall reserve unto Lessor all of the rights and
remedies available under Paragraph 28 ("Default") hereof, and Lessor may accept
rents from such assignee or receiver without waiving or forfeiting said right of
termination. As an alternative to exercising his right to terminate this lease,
Lessor may require Lessee to provide adequate assurances, including the posting
of a cash bond, of Lessee's ability to perform its obligations under this lease.
28. DEFAULT, If this lease is terminated in accordance with any of
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the terms herein (with the exception of Paragraph 27), or if Lessee vacates or
abandons the Premises or if Lessee shall fail at any time to keep or perform any
of its covenants or conditions of this lease, i.e. specifically the covenant for
the payment of monthly rent (and such failure is not cured within ten (10) days
after written notice thereof by Lessor to Lessee in the case of monetary default
and thirty (30) days for all other defaults under the lease), then, and in any
of such events, Lessor may with or without notice or demand, at Lessor's option,
and without being deemed guilty of trespass and/or without prejudicing any
remedy or remedies which might otherwise be used by Lessor for arrearages or
preceding breach of covenant or condition of this lease, enter into and
repossess said Premises and expel the Lessee and all those claiming under
Lessee. In such event Lessor may eject and remove from said Premises all goods
and effects (forcibly if necessary). This lease if not otherwise terminated may
immediately be declared by Lessor as terminated, provided however, in the case
of non-monetary defaults, if the failure is of such a nature that it cannot be
completely remedied within such thirty (30) day period, the failure shall not be
a default if Lessee begins correction of the failure within the thirty (30) day
period and thereafter proceeds with reasonable diligence to correct the failure
as soon as practicable. The termination of this lease pursuant to this Article
shall not relieve Lessee of its obligations to make the payments required
herein. In the event this lease is terminated pursuant to this Article, or if
Lessor enters the Premises without terminating this lease and Lessor relets all
or a portion of the Premises, Lessee shall be liable to Lessor for all the
reasonable costs of reletting, including necessary renovation and alteration of
the leased Premises. Lessee shall remain liable for all unpaid rental
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which has been earned plus late payment charges pursuant to Paragraph 21 and
for the remainder of the term of this lease for any deficiency between the net
amounts received following reletting and the gross amounts due from Lessee, or
if Lessor elects, Lessee shall be immediately liable for all rent and
additional rent (Paragraph 19) that would be owing to the end of the term,
less any rental loss Lessee proves could be reasonably avoided, which amount
shall be discounted by the discount rate of the Federal Reserve Bank, situated
nearest to the Premises, plus one percent (1%).
29. BINDING EFFECT, The parties hereto further agree with each other
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that each of the provisions of this lease shall extend to and shall, as the case
may require, bind and inure to the benefit, not only of Lessor and Lessee, but
also of their respective heirs, legal representatives, successors and assigns,
subject, however, to the provisions of Paragraph 18 of this lease.
It is also understood and agreed that the terms "Lessor" and "Lessee"
and verbs and pronouns in the singular number are uniformly used throughout this
lease regardless of gender, number or fact of incorporation of the parties
hereto. The typewritten riders or supplemental provisions, if any, attached or
added hereto are made a part of this lease by reference. It is further mutually
agreed that no waiver by Lessor of a breach by Lessee of any covenant or
condition of this lease shall be construed to be a waiver of any subsequent
breach of the same or any other covenant or condition.
30. HOLDING OVER, If Lessee holds possession of the Premises after
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term of this lease, Lessee shall be deemed to be a month-to-month tenant upon
the same terms and conditions as contained herein, except rent which shall be
revised to reflect the then current market rate. During month-to-month tenancy,
Lessee acknowledges Lessor will be attempting to relet the Premises. Lessee
agrees to cooperate with Lessor and Lessee further acknowledges Lessor's
statutory right to terminate the lease with proper notice.
31. ATTORNEY'S FEES, If any legal action is commenced to enforce any
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provision of this lease, the prevailing party shall be entitled to an award of
reasonable attorney's fees and disbursements. The phrase "prevailing Party"
shall include a party who receives substantially the relief desired, whether by
dismissal, summary judgment, judgment or otherwise.
32. LESSOR REPRESENTATIONS, The Lessor has made no representations
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or promises other than contained herein or in some future writings signed by
Lessor, except the physical condition of the Premises is consistent with general
office space in the Puget Sound commercial market and Lessor operates the
Premises in compliance with the U.S. American Disabilities Act.
33. QUIET ENJOYMENT, So long as Lessee pays the rent and performs
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the covenants contained in this lease, Lessee shall hold and enjoy the Premises
peaceably and quietly, subject to the provisions of this lease.
34. RECORDATION, Lessee shall not record this lease without the
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prior written consent of Lessor. However, at the request of Lessor, both
parties shall execute a memorandum or "short form" of this lease for the purpose
of recordation in a form customarily used for such purpose. Said memorandum or
short form of this lease shall describe the parties, the Premises and the lease
term, and shall incorporate this lease by reference.
35. MUTUAL PREPARATION OF LEASE, It is acknowledged and agreed that
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this lease was prepared mutually by both parties. In the event of ambiguity, it
is agreed by both parties that it shall not be construed against either party as
the drafter of this lease.
36. GOVERNING LAW, This lease shall be governed by, construed and
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enforced in accordance with the laws of the State of Washington.
37. DESIGN SERVICES, Lessor shall, at Lessor's expense, provide for
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all space planning, design, documentation and contract administration in
connection with all work to be done in the Premises in order to prepare the
Premises for Lessee's
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effective occupancy. Lessor will be responsible for the architectural space
study fees of CNA Architects, but not for the cost of construction documents
unless provided by ▇▇▇▇▇▇ ▇▇▇▇▇ Real Estate in-house architects. Lessor will
furthermore contract with and pay for the design and engineering services
pertaining to structural, mechanical, electrical, and fire protection. Lessor
shall, at Lessor's expense, furnish to Lessee, for Lessee's approval, all
drawings necessary for the preparation of the Premises for Lessee's use and
occupancy.
38. TENANT IMPROVEMENT ALLOWANCE, Lessee's Premises will be
----------------------------
completed in accordance with mutually agreed upon working drawings by a mutually
agreed upon contractor. Lessee will be provided a tenant improvement allowance
of $5.00 per rentable square foot. This tenant improvement allowance shall not
include furniture, furnishings, or equipment, but may include physical moving
expenses and improvements to the space including HVAC modifications. The tenant
improvement allowance will be given to Lessee as a rent credit to be offset
against rents beginning with the commencement of this lease.
39. PARKING, Lessee will be provided parking for four (4) cars in
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the building garage and four (4) cars outside of the building. All parking
shall be at market rate, currently $90.00 inside and $80.00 outside, and paid
for by Lessee.
40. OPTION TO RENEW, Provided that Lessee is not in default under
---------------
any of the terms and conditions of this lease at the time of exercising this
option, Lessee shall have the option to renew this lease for an additional
period of three (3) years on the same terms and conditions, except the rent.
Base rent for the renewal term shall be at the then market rate for comparable
office space in the lower ▇▇▇▇▇ ▇▇▇▇ area of Seattle. Lessee agrees to give
Lessor notice of its intent to renew 180 days prior to the expiration of the
initial lease term. In the event Lessee disagrees with the market rate
established by Lessor, market rate shall be established as follows:
Within sixty (60) days after notice of exercise of the option, each party shall
nominate an appraiser of its choice. The two appraisers shall then select a
third appraiser and they shall determine by majority vote the fair market rental
value for the Premises as of the commencement of the extended term.
All appraisers selected shall be M.A.I. appraisers with commercial property
experience in King County.
The base rent shall remain unchanged until such decision is rendered by the
appraiser, but the rent shall be adjusted retroactive to the beginning of the
option period.
41. REAL ESTATE COMMISSION, Lessor agrees to pay a real estate
----------------------
commission equivalent to five percent (5%) of the gross rental amount of the
initial lease term to Colliers ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ International for their services
in this lease transaction. The fee shall be payable one-half upon execution of
lease and one-half upon occupancy of space by Lessee. In the event Lessor
declines to pay such fees in the amount and in the time frame described, Lessee
may make payment of commission and accrued interest directly to Colliers and
deduct it from the/any first rents becoming due. In such case, Lessor shall not
hold Lessee in default under the terms of this lease.
IN WITNESS WHEREOF, the parties hereof have executed this lease the
day and year first above written.
▇▇▇▇▇ REAL ESTATE HOLDINGS SIX, CELL THERAPEUTICS INC.,
a Washington general partnership a Washington Corporation
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By: ▇▇▇▇▇▇ ▇▇▇▇▇ By:
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Its: General Partner Its:
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"Lessor" "Lessee"
-9-
GUARANTEE
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For value received and as an inducement to Lessor making the within lease to
Lessee, the undersigned Guarantor hereby guarantees the payment of rent and
performance by Lessee, Lessee's successors and assigns of all covenants and
agreements of the above Lease.
----------------------------------- ------------------------------------
CELL0224.98
Attachment
-10-
EXHIBIT B
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EXAMPLE
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The intent is to include Lessee's proportionate share of all Base Year Costs in
Lessee's Annual Base Rental Rate. It is further the intent to limit adjustments
to Lessee's Base Year Costs to actual increases in cost. The Operating Services
are adjusted to the greater of actual occupancy or 95% occupancy for the base
year to fairly establish the Base Year Costs at an equitable standard for
comparison purposes. Comparison Years are similarly adjusted for purposes of
fairness and equality. To prevent any confusion regarding computation of Base
Year Costs, Comparison Year Costs and the adjustment of those costs to 95%
occupancy, if necessary, we have set forth the following example. It is
important to note that if adjustment to 95% occupancy is necessary, not all
Operating Services are adjusted.
Expenses requiring adjustment are those which are 100% dependent upon the change
in footage and adjust with the change in occupied footage. This category
includes electricity, water/sewer, superintendent, disposal, management,
janitorial supplies, window washing, repair and maintenance, HVAC maintenance,
and janitorial labor.
Other expenses do not require adjustment nor are they dependent upon occupied
footage change. These categories are the same whether the building is empty or
full. They are, insurance, security, elevator, landscaping and telephone.
Real Estate Taxes are dependent upon independent assessment. Real Estate Taxes
are not adjusted to 95%, but are established for each respective year based on
the actual tax paid whether for the respective Base Year or each subsequent
Comparison Year(s).
Please note the expenses noted below which are and are not adjusted and the
adjustment to each expense to achieve 95% occupancy, if necessary. The method
of adjusting expenses depicted in the example will be followed when adjusting
actual Operating Service Expenses for both the Base Year and Comparison Year(s).
HYPOTHETICAL FACTS
Building Occupancy: 80%
Actual Base Year Costs: $ 375,000
Grossed Base Year Costs to 95%: $ 440,000
Actual Comparison Year Costs: (see below) $ 405,440
Grossed Comparison Year Costs to 95%: (see below) $ 463,080
Tenant Premises: 10,000 RSF
Building RSF: 125,000 RSF
Tenant Proportionate Basis: 10,000 divided
by 125,000 = 8%
EXAMPLE
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Actual Grossed
Description Expenses Expenses
----------- -------- --------
Percent Occupied 80.00% 95.00% Methodology
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Real Estate Taxes $ 54,854 $ 54,854 Actual Cost
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Operating Expenses
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Insurance $ 26,595 $ 26,595 Actual Cost
Electricity $ 69,358 $ 82,363 Adjusts with occupancy
Water & Sewer $ 4,945 $ 5,872 Adjusts with occupancy
Security $ 5,000 $ 5,000 Actual Cost
Elevator $ 7,526 $ 7,526 Actual Cost
Superintendent $ 82,869 $ 98,407 Adjusts with occupancy
Landscaping $ 2,912 $ 2,912 Actual Cost
Disposal $ 15,502 $ 18,409 Adjusts with occupancy
Management $ 41,680 $ 49,495 Adjusts with occupancy
Supplies $ 4,339 $ 5,153 Adjusts with occupancy
Window Washing $ 1,527 $ 1,813 Adjusts with occupancy
Repairs & Maintenance $ 24,333 $ 28,895 Adjusts with occupancy
Telephone $ 1,144 $ 1,144 Actual Cost
HVAC Maintenance $ 6,208 $ 7,372 Adjusts with occupancy
Janitorial $ 56,648 $ 67,270 Adjusts with occupancy
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TOTALS: $405,440 $463,080