EXHIBIT 10.5
1. BASIC LEASE TERMS
a. DATE OF LEASE: February 19, 1998
b. TENANT: ONYX Software Corporation,
a Washington corporation
Trade Name: ONYX Software Corporation
Address (Leased Premises): ▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Building/Unit: A/102
Address (For Notices): ▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇.
Bellevue, WA 98005
c. LANDLORD: Teachers Insurance & Annuity
Association of America,. Inc.
Address (For Notices): ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to ▇▇▇▇ Management Services, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇; or to such other place
as Landlord may from time to time designate by notice to ▇▇▇▇▇▇.
d. TENANT'S USE OF PREMISES: Administrative office for computer software
developer or General Office
e. PREMISES: Approximately 1,653 rentable square feet. Commencing
August 1, 1998 the Premises shall be expanded to include additional
area of 1,773 square feet located in Suite A/101 (Expansion Space) for
a total of 3,426 square feet that shall continue until March 31, 2001.
Except as specifically otherwise set forth herein, all terms and
conditions of the Lease shall apply to the Expansion Space in the same
manner and to the same extent as to the Original Premises.
f. PROJECT AREA: Approximately 120,872 Rentable Square Feet
g. TERM OF LEASE: This Lease shall commence on April 1, 1998 or such
earlier or later date as is provided in Section 3 (the "Commencement
Date"), and shall terminate on March 31, 2001.
h. BASE MONTHLY RENT: $3,306.00
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i. RENT ADJUSTMENT: Commencing on August 1, 1998, and continuing on the
first day of each month thereafter, continuing until March 31, 2001,
Tenant shall pay Landlord as Base Monthly Rent an amount of $6,852.00
per month.
j. ANNUAL EXPENSE BASE: 1998 Base Year.
k. PREPAID RENT: $0.00
l. SECURITY DEPOSIT: $3.306.00
NON-REFUNDABLE CLEANING FEE: $ 0.00
m. BROKER(S): ▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇ - CB Commercial/▇▇▇▇ Management,
▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇ Group.
n. GUARANTORS: N/A
o. ADDITIONAL SECTIONS: Additional sections of this lease numbered 29
through ___ are attached hereto and made a part hereof. If none, so
state in the following space -- .
----
p. ADDITIONAL EXHIBITS: Additional exhibits lettered A through E are
attached hereto and made a part hereof. If none, so state in the
following space -- .
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2. PREMISES/COMMON AREAS/PROJECT.
A. PREMISES
Landlord leases to Tenant the premises described in Section 1 and in
Exhibit A (the "Premises") and Exhibit A-1 (the "Expansion Space"), located in
this project described on Exhibit B (the "Project"). By entry on the Premises,
▇▇▇▇▇▇ acknowledges that it has examined the Premises and accepts the Premises
in their present condition, subject to any additional work Landlord has agreed
to do. Tenant represents and warrants that it agrees with the square footage
specified for the Premises and the Project in Section 1 and will not hereafter
challenge such determination and agreement.
B. COMMON AREAS
As used in this Lease, "Common Areas" shall mean all portions of the
Project not leased or demised for lease to specific tenants. During the Lease
Term, Tenant and its licensees, invitees, customers and employees shall have the
non-exclusive right to use the public portions of the Common Areas, including
all parking areas,
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landscaped areas, entrances, lobbies, elevators, stairs, corridors, and public
restrooms in common with Landlord, other Project tenants and their respective
licensees, invitees, customers and employees. Landlord shall at all times have
exclusive control and management of the Common Areas and no diminution thereof
shall be deemed a constructive or actual eviction or entitle Tenant to
compensation or a reduction or abatement of rent. Landlord in its discretion may
increase, decrease or change the number, locations and dimensions of any Common
Areas and other improvements shown on Exhibit A which are not within the
Premises, provided only that (subject to temporary construction inconveniences)
no decrease or rearrangement may materially disrupt the use or access to the
Premises or materially decrease the availability of parking.
C. PROJECT
Landlord reserves the right in its sole discretion to modify or alter the
configuration or number of buildings in the Project, provided only that upon
such modification or alteration, the Project Area as set forth in Section l(f)
shall be adjusted to reflect such modification or alteration.
3. TERM
The Commencement Date listed in Section 1 of this Lease represents an
estimate of the Commencement Date. This Lease shall commence on the estimated
Commencement Date if tenant improvement work required of Landlord pursuant to
this Lease ("Landlord's Work") is substantially completed (as that term is used
in the construction industry) by such date, but otherwise the Commencement Date
shall be first to occur of the following events (i) the date on which Landlord
notifies Tenant that Landlord's Work is substantially complete, (ii) the date on
which Tenant takes possession or commences beneficial occupancy of the Premises,
or (iii) if substantial completion of Landlord's Work is delayed due to Tenant's
failure to perform its obligations under this Lease, then the date determined by
Landlord as the date upon which ▇▇▇▇▇▇▇▇'s Work would have been substantially
completed, but for ▇▇▇▇▇▇'s failure to perform. If this Commencement Date is
later than the Section 1 Commencement Date, this Lease shall not be void or
voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting therefrom. Notwithstanding the foregoing, if Tenant is not permitted
access to use the Premises for the purposes described in Section 1(d) within
thirty (30) days of the Commencement Date, this Lease shall be voidable at the
discretion of the Tenant by notice given by Tenant to Landlord within three (3)
days after expiration of such thirty (30) day period. Landlord shall confirm
the Commencement Date by written notice to Tenant. This Lease shall be for a
term ("Lease Term") beginning on the Commencement Date and ending on the
Expiration Date, unless extended or sooner terminated in accordance
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with the terms of this Lease. All provisions of this Lease, other than those
relating to payment of Base Monthly Rent and Additional Rent, shall become
effective upon the first to occur of (a) the date that Tenant or its officers,
agents, employees or contractors is first present on the Premises, whether for
inspection, construction, installation or other purposes, or (b) such other
date, if any, as may be specified in an Exhibit hereto.
4. RENT
A. BASE RENT
Tenant shall pay Landlord monthly base rent in the initial amount in
Section 1 which shall be payable monthly in advance on the first day of each and
every calendar month ("Base Monthly Rent") provided, however, the first month's
Base Monthly Rent and ▇▇▇▇▇▇'s Share of Expenses is due and payable upon
execution of this Lease. If the term of this Lease contains any rental
abatement period, Tenant hereby agrees that if Tenant breaches the Lease and
fails to cure such breach within the applicable cure period, if any, and/or
abandons the Premises before the end of the Lease term, or if Tenant's right to
possession is terminated by Landlord because of Tenant's breach of the Lease,
the rental abatement period shall be deemed extinguished, and there shall be
immediately due from Tenant to Landlord, in addition to any damages otherwise
due Landlord under the terms and conditions of the Lease, Base Monthly Rent
prorated for the entirety of the rental abatement period at the average Base
Monthly Rent for the Lease, plus any and all other charges (such as Expenses)
that were abated during such rental abatement period.
For purposes of Section 467 of the Internal Revenue Code, the parties to
this Lease hereby agree to allocate the stated Rents, provided herein, to the
periods which correspond to the actual Rent payments as provided under the terms
and conditions of this agreement.
B. RENT ADJUSTMENT
1) COST OF LIVING ADJUSTMENT
If Section i.i(1) is initialed, the Base Monthly Rent shall be subject to
increase on each annual anniversary of the first day of the first full calendar
month after the Commencement Date (the "Anniversary Date"). The base for
computing the increase is the Consumer Price Index All Urban Consumers U.S. City
Average (1982-84=100), published by the United States Department of Labor,
Bureau of Labor Statistics ("Index"), which is in effect on the ninetieth (90th)
day preceding the Commencement Date ("Beginning Index"). The Index published
and in effect on the ninetieth (90th) day preceding each Anniversary Date
("Extension Index") is to be used in determining
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the amount of the increase from one year to the next. Beginning with the Rent
due on and after the first anniversary the Base Monthly Rent shall be increased
to equal the product achieved by multiplying the full Base Monthly Rent due with
respect to the month immediately preceding such anniversary date by a fraction.
On the first Anniversary Date, the numerator of the fraction will be the
Extension Index and the denominator will be the Beginning Index. On the second
and any subsequent Anniversary Date, the numerator of the fraction will be the
current Extension Index and the denominator will be the Extension Index used to
calculate the previous year's Base Monthly Rental increase. If there is a
decline from one lease year to the next in the Extension Index, the Base Monthly
Rent due during the subsequent lease year shall equal the Base Monthly Rent due
during the then present lease year.
If the Index is changed so that the base year differs from that in effect
when the term commences, the Index shall be converted in accordance with the
conversion factor published by the United States Department of Labor, Bureau of
Labor Statistics. If the Index is discontinued or revised during the term, such
other government index or computation with which it is replaced shall be used in
order to obtain substantially the same result as would be obtained if the Index
had not been discontinued or revised.
2) STEP INCREASE
If Section 1.i.(2) is initialed, Base Monthly Rent shall be increased
periodically to the amounts and at the times set forth in Section 1.i.(2).
C. EXPENSES
The purpose of this Section 4.c is to ensure that Tenant bears a share of
all Expenses related to the use, maintenance, ownership, repair or replacement,
and insurance of the Project. Accordingly, beginning on January l, 1999, Tenant
shall each month pay to Landlord one-twelfth (1/12) of Tenant's Share of
Expenses related to the Project. As used in this Lease, "Tenant's Share" shall
mean the Premises Area, as defined in Section 1.e, divided by the Project Area,
as defined in Section 1.f, and "Tenant's Share of Expenses" shall mean total
Expenses for the Project, multiplied by Tenant's Share, minus the Annual Expense
Base set forth in Section 1(j). Landlord may specially allocate individual
expenses where and in the manner necessary, in ▇▇▇▇▇▇▇▇'s discretion, to
appropriately reflect the consumption of the expense or service. For example
where some but not all premises in the Project have HVAC, Landlord may
reallocate Project Expenses for HVAC to all premises utilizing HVAC to be
apportioned on a per square foot basis, or could allocate to each premises
utilizing HVAC the cost of maintaining that space's individual unit. In the
event the average occupancy level of the Project for any year is less than
ninety five percent
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(95%), the actual Expenses for such year shall be proportionately adjusted to
reflect those costs which Landlord estimates would have been incurred, had the
Project been ninety five percent (95%) occupied during such year.
1) EXPENSES DEFINED
The term "Expenses" shall mean all costs and expenses of the ownership,
operation, maintenance, repair or replacement, and insurance of the Project,
including without limitation, the following costs:
(a) All supplies, materials, labor, equipment, and utilities used in
or related to the operation and maintenance of the Project,
(b) All maintenance, management, janitorial, legal, accounting,
insurance, and service agreement costs related to the Project;
(c) All maintenance, replacement and repair costs relating to the
areas within or around the Project, including, without limitation, air
conditioning systems, sidewalks, landscaping, service areas, driveways, parking
Areas (including resurfacing and restriping parking areas), walkways, building
exteriors (including painting), signs and directories, repairing and replacing
roofs, walls, etc. These costs may be included either based on actual
expenditures or the use of an accounting reserve based on past cost experience
for the Project.
(d) Amortization (along with reasonable financing charges) of capital
improvements made to the Project which may be required by any government
authority or which will improve the operating efficiency of the Project
(provided, however, that the amount of such amortization for improvements not
mandated by government authority shall not exceed in any year the amount of
costs reasonably determined by Landlord in its sole discretion to have been
saved by the expenditure either through the reduction or minimization of
increases which would have otherwise occurred).
(e) Real Property Taxes including all taxes, assessments (general and
special) and other impositions or charges which may be taxed, charged, levied,
assessed or imposed upon all or any portion of or in relation to the Project or
any portion thereof, any leasehold estate in the Premises or measured by Rent
from the Premises, including any increase caused by the transfer, sale or
encumbrance of the Project or any portion thereof. "Real Property Taxes" shall
also include any form of assessment, levy, penalty, charge or tax (other than
estate, inheritance, net income, or franchise taxes) imposed by any authority
having a direct or indirect power to tax or charge, including, without
limitation, any city, county, state federal or any improvement or other
district, whether such tax is (l) determined by the value of the
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Project or the Rent or other sums payable under this Lease; (2) upon or with
respect to any legal or equitable interest of Landlord in the Project or any
part thereof; (3) upon this transaction or any document to which Tenant is a
party creating a transfer in any interest in the Project, (4) in lieu of or as a
direct substitute in whole or in part of or in addition to any real property
taxes on the Project, (5) based on any parking spaces or parking facilities
provided in the Project, or (6) in consideration for services, such as police
protection, fire protection, street, sidewalk and roadway maintenance, refuse
removal or other services that may be provided by any governmental or quasi-
governmental agency from time to time which were formerly provided without
charge or with less charge to property owners or occupants.
(f) Landlord agrees that Expenses as defined in Section 4(c) shall not
include leasing commissions; payments of principal and interest on any
mortgages, deeds of trust or other encumbrances upon the Project; depreciation
of the capital cost of capital improvements except as provided at 4(c)(1)(d);
Landlord's executive salaries, management fees in excess of market rates; costs
resulting from defective design or construction of the Project; costs incurred
in connection with entering into new leases; or costs of disputes under existing
leases. In no event shall Expenses include any charge for which Landlord
receives reimbursement from insurance or from another Tenant, nor shall any item
of Expense be counted more than once, nor shall Landlord collect more than one
hundred percent (100%) of Expenses.
2) ANNUAL ESTIMATE OF EXPENSES, TENANT'S SHARE
At the commencement of each calendar year, beginning with calendar year
1999, Landlord shall estimate Tenant's share of Expenses for the remainder of
the calendar year, and at the commencement of each calendar year thereafter,
Landlord shall estimate Tenant's Share of Expenses for the coming year by
multiplying the estimated annual Project Expenses by ▇▇▇▇▇▇'s Share and
subtracting the Annual Expense Base.
3) MONTHLY PAYMENT OF EXPENSES
Tenant shall pay to Landlord, monthly in advance, as Additional Rent, one-
twelfth (1/12) of the Annual Estimate of ▇▇▇▇▇▇'s Share of Expenses beginning on
January 1, 1999. As soon as practical following each calendar year, Landlord
shall prepare an accounting of actual Expenses incurred during the prior
calendar year and such accounting shall reflect Tenant's Share of Expenses. If
the Additional Rent paid by Tenant under this Section 4.c.3 during the preceding
calendar year was less than the actual amount of Tenant's Share of Expenses,
Landlord shall so notify Tenant and Tenant shall pay such amount to Landlord
within 30 days of receipt of such notice.
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Such amount shall be deemed to have accrued during the prior calendar year and
shall be due and payable from Tenant even though the term of this Lease has
expired or this Lease has been terminated prior to ▇▇▇▇▇▇'s receipt of this
notice. Tenant shall have thirty (30) days from receipt of such notice to
contest the amount due, failure to so notify Landlord shall represent final
determination of Tenant's Share of Expenses. If Tenant's payments were greater
than the actual amount, then such overpayment shall be credited by Landlord to
Tenant's Share of Expenses due under this Section 4.c.3, or if the Lease has
expired or been terminated, any overpayment net of other sums due from Tenant to
Landlord shall be refunded to Tenant by check.
4) RENT WITHOUT OFFSET AND LATE CHARGE
As used herein, "Rent" shall mean all monetary sums due from Tenant to
Landlord. All Base Monthly Rent shall be paid by Tenant to Landlord without
prior notice or demand in advance on the first day of every calendar month, at
the address shown in Section 1, or such other place as landlord may designate in
writing from time to time. Whether or not so designated, all other sums due
from Tenant under this Lease shall constitute Additional Rent, payable without
prior notice or demand when specified in this Lease, but if not specified, then
within ten (10) days of demand. All Rent shall be paid without any deduction or
offset whatsoever. All Rent shall be paid in lawful currency of the United
States of America. Proration of Rent due for any partial month shall be
calculated by dividing the number of days in the month for which Rent is due by
the actual number of days in that month and multiplying by the applicable
monthly rate. Tenant acknowledges that late payment by Tenant to Landlord of
any Rent or other sums due under this Lease will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of such cost being extremely
difficult and impracticable to ascertain. Such costs include, without
limitation, processing and accounting charges and late charges that may be
imposed on Landlord by the terms of any encumbrance or note secured by the
Premises. Therefore, if any Rent or other sum due from Tenant is not received
by the end of the 10th day after due (i.e. by the end of the 10th day of the
month for sums due on the first), Tenant shall pay to Landlord an additional sum
equal to 10% of such overdue payment. Landlord and Tenant hereby agree that
such late charge represents a fair and reasonable estimate of the costs that
Landlord will incur by reason of any such late payment and that the late charge
is in addition to any and all remedies available to the Landlord and that the
assessment and/or collection of the late charge shall not be deemed a waiver of
any other default. Additionally, all such delinquent Rent or other sums, plus
this late charge, shall bear interest at the rate of 12 percent per annum. If
the interest rate specified in this Lease is higher than the rate permitted by
law, the interest rate is hereby decreased to the maximum legal interest rate
permitted by law. Any payments of any kind returned for insufficient funds will
be subject to an
PAGE 8
additional handling charge of $25.00, and thereafter, Landlord may require
Tenant to pay all future payments of Rent or other sums due by money order or
cashier's check.
5. PREPAID RENT
Upon the execution of this Lease, Tenant shall, in addition to the payment
of the first month's Rent as set forth in Section 4.a, pay to Landlord the
prepaid Rent set forth in Section 1.k, and if Tenant is not in default of any
provisions of this Lease, such prepaid Rent shall be applied toward the Base
Monthly Rent for the months set forth in Section 1.k. Landlord's obligations
with respect to the prepaid Rent are those of a debtor and not of a trustee, and
Landlord can commingle the prepaid Rent with Landlord's general funds. Landlord
shall not be required to pay Tenant interest on the prepaid Rent. Landlord
shall be entitled to immediately endorse and cash ▇▇▇▇▇▇'s prepaid Rent;
however, such endorsement and cashing shall not constitute Landlord's acceptance
of this Lease. In the event Landlord does not accept this Lease, Landlord shall
return said prepaid Rent.
6. DEPOSIT
Upon execution of this Lease, Tenant shall deposit a security deposit and a
cleaning fee as set forth in Section 1.1 with Landlord. If Tenant is in
default, Landlord, upon 5 days notice, can use the security deposit or any
portion of it to cure the default or to compensate Landlord for any damages
sustained by Landlord resulting from ▇▇▇▇▇▇'s default. Upon demand, Tenant
shall immediately pay to Landlord a sum equal to the portion of the security
deposit expended or applied by Landlord to restore the security deposit to its
full amount. In no event will Tenant have the right to apply any part of the
security deposit to any Rent or other sums due under this Lease. If Tenant is
not in default at the expiration or termination of this Lease, Landlord shall
return the security deposit to Tenant, and retain the cleaning fee, which shall
equal 10% of first month's Base Monthly Rent or $125, whichever is greater.
Landlord's obligations with respect to the deposit are those of a debtor and not
of a trustee, and Landlord can commingle the security deposit with ▇▇▇▇▇▇▇▇'s
general funds. Landlord shall not be required to pay Tenant interest on the
deposit. Upon full execution of the lease, Landlord shall be entitled to
endorse and cash ▇▇▇▇▇▇'s prepaid deposit. Each time the Base Monthly Rent is
increased, Tenant shall deposit additional funds with Landlord sum sufficient to
increase the security deposit to an amount which bears the same relationship to
the adjusted Base Monthly Rent as the initial security deposit bore to the
initial Base Monthly Rent.
7. USE OF PREMISES AND PROJECT FACILITIES
Tenant shall use the Premises solely for the purposes set forth in Section
1 and for no other purpose without obtaining the prior written consent of
Landlord. Tenant
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acknowledges that neither ▇▇▇▇▇▇▇▇ nor any agent of Landlord has made any
representation or warranty with respect to the Premises or with respect to the
suitability of the Premises or the Project for the conduct of Tenant's business,
nor has Landlord agreed to undertake any modification, alteration or improvement
to the Premises or the Project, except as provided in writing in this Lease.
Tenant acknowledges that Landlord may from time to time, at its sole discretion,
make such modifications, alterations, deletions or improvements to the Project
as Landlord may deem necessary or desirable, without compensation or notice to
Tenant. Tenant shall promptly comply with all laws, ordinances, orders and
regulations affecting the Premises and the Project, including, without
limitation, any rules and regulations that may be attached to this Lease and to
any reasonable modifications to these rules and regulations as Landlord may
adopt from time to time. Tenant acknowledges that, except for Landlord's
obligations pursuant to Section 13, Tenant is solely responsible for ensuring
that the Premises comply with any and all governmental regulations applicable to
Tenant's conduct of business on the Premises, and that Tenant is solely
responsible for any alterations or improvements that may be required by such
regulations, now existing or hereafter adopted. Tenant shall not do or permit
anything to be done in or about the Premises or bring or keep anything in the
Premises that will in any way increase the premiums paid by Landlord on its
insurance related to the Project or which will in any way increase the premiums
for fire or casualty insurance carried by other tenants in the Project. Tenant
will not perform any act or carry on any practices that may injure the Premises
or the Project; that may be a nuisance or menace to other tenants in the
Project; or that shall in any way interfere with the quiet enjoyment of such
other tenants. Tenant shall not use the Premises for sleeping, washing clothes,
cooking or the preparation, manufacture or mixing of anything that might emit
any objectionable odor, noises, vibrations or lights onto such other tenants. If
sound insulation is required to muffle noise produced by Tenant on the Premises,
Tenant at its own cost shall provide all necessary insulation. Tenant shall not
do anything on the premises which will overload any existing parking or service
to the Premises. Pets and/or animals of any type shall not be kept on the
Premises.
8. HAZARDOUS SUBSTANCES; DISRUPTIVE ACTIVITIES
A. HAZARDOUS SUBSTANCES
(1) Presence and Use of Hazardous Substances. Tenant shall not, without
----------------------------------------
Landlord's prior written consent, keep on or around the Premises, Common Areas
or Building, for use, disposal, treatment, generation, storage or sale, any
substances designed as, or containing components designated as hazardous,
dangerous, toxic or harmful (collectively referred to as "Hazardous
Substances"), and/or is subject to regulation, statute or ordinance. With
respect to any such Hazardous Substance, Tenant shall:
PAGE 10
(i) Comply promptly, timely, and completely with all governmental
requirements for reporting, keeping, and submitting manifests, and
obtaining and keeping current identification numbers;
(ii) Submit to Landlord true and correct copies of all reports,
manifests, and identification numbers at the same time as they are required
to be and/or are submitted to the appropriate governmental authorities;
(iii) Within five (5) days of Landlord's request, submit written
reports to Landlord regarding Tenant's use, storage, treatment,
transportation, generation, disposal or sale of Hazardous Substances and
provide evidence satisfactory to Landlord of Tenant's compliance with the
applicable government regulations;
(iv) Allow Landlord or Landlord's agent or representative to come
on the premises at all times to check Tenant's compliance with all
applicable governmental regulations regarding Hazardous Substances;
(v) Comply with minimum levels, standards or other performance
standards or requirements which may be set forth or established for certain
Hazardous Substances (if minimum standards or levels are applicable to
Hazardous Substances present on the Premises, such levels or standards
shall be established by an on-site inspection by the appropriate
governmental authorities and shall be set forth in an addendum to this
Lease); and
(vi) Comply with all applicable governmental rules, regulations and
requirements regarding the proper and lawful use, sale, transportation,
generation, treatment, and disposal of Hazardous Substances.
(2) Any and all costs incurred by Landlord and associated with ▇▇▇▇▇▇▇▇'s
monitoring of Tenant's compliance with this Section 8, including Landlord's
attorneys' fees and costs, shall be Additional Rent and shall be due and payable
to Landlord immediately upon demand by Landlord.
B. CLEANUP COSTS, DEFAULT AND INDEMNIFICATION
(1) Tenant shall be fully and completely liable to Landlord for any and
all cleanup costs, and any and all other charges, fees, penalties (civil and
criminal) imposed by any governmental authority with respect to Tenant's use,
disposal, transportation, generation and/or sale of Hazardous Substances, in or
about the Premises, Common Areas, or Building.
(2) Tenant shall indemnify, defend and save Landlord and ▇▇▇▇▇▇▇▇'s
PAGE 11
lender, if any, harmless from any and all of the costs, fees, penalties and
charges assessed against or imposed upon Landlord (as well as Landlord's and
Landlord's lender's attorneys' fees and costs) as a result of Tenant's use,
disposal, transportation, generation and/or sale of Hazardous Substances.
(3) Upon Tenant's default under this Section 8, in addition to the rights
and remedies set forth elsewhere in this Lease, Landlord shall be entitled to
the following rights and remedies:
(i) At Landlord's option, to terminate this Lease immediately;
and/or
(ii) To recover any and all damages associated with the default,
including, but not limited to cleanup costs and charges, civil and criminal
penalties and fees, loss of business and sales by Landlord and other
tenants of the Building, any and all damages and claims asserted by third
parties and ▇▇▇▇▇▇▇▇'s attorneys' fees and costs.
C. DISRUPTIVE ACTIVITIES
Tenant shall not:
1) Produce, or permit to be produced, any intense glare, light or
heat except within an enclosed or screened area and then only in such
manner that the glare, light or heat shall not, outside the Premises, be
materially different that the light or heat from other sources outside the
Premises;
2) Create, or permit to be created, any sound pressure level which
will interfere with the quiet enjoyment of any real property outside the
Premises, or which will create a nuisance or violate any governmental law,
rule, regulation or requirement;
3) Create, or permit to be created, any ground vibration that is
materially discernible outside the Premises;
4) Transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation which is harmful or hazardous
to any person or property in, or about the Project; or
5) Create, or permit to be created, any noxious odor that is
disruptive to the business operations of any other tenant in the Project.
PAGE 12
9. SIGNAGE
All signing shall comply with rules and regulations set forth by Landlord
as may be modified from time to time. Current rules and regulations relating to
interior and exterior signs are described on Exhibit C. Tenant shall place no
non-building standard window covering (e.g., shades, blinds, curtains, drapes,
screens, or tinting materials), stickers, signs, lettering, banners or
advertising or display material on or near exterior windows or doors if such
materials are visible from the exterior of the Premises, without Landlord's
prior written consent. Similarly, Tenant may not install any alarm boxes, foil
protection tape or other security equipment on the Premises without Landlord's
prior written consent, other than provided for in this Lease. Any material
violating this provision may be destroyed by Landlord, on three (3) days notice
to Tenant, without compensation to Tenant.
10. PERSONAL PROPERTY TAXES
Tenant shall pay before delinquency all taxes, assessments, license fees
and public charges levied, assessed or imposed upon its business operations as
well as upon all trade fixtures, leasehold improvements, merchandise and other
personal property in or about the Premises.
11. PARKING
Landlord grants to Tenant and Tenant's customers, suppliers, employees and
invitees, a non-exclusive license to use the designated parking areas in the
Project for the use of motor vehicles during the term of this Lease. Landlord
reserves the right at any time to grant similar non-exclusive use to other
tenants, to promulgate rules and regulations relating to the use of such parking
areas, including reasonable restrictions on parking by tenants and employees, to
designate specific spaces for the use of any tenant, to make changes in the
parking layout from time to time, and to establish reasonable time limits on
parking. Overnight parking is prohibited and any vehicle violating this or any
other vehicle regulation adopted by Landlord is subject to removal at the
owner's expense The Project's parking ratio is currently at least 3.5 stalls
per 1,000 square feet of rentable area. The stalls available to Tenant shall
not be reduced below 3.0 stalls per 1,000 square feet of rentable area except as
may be needed to accomplish compliance with changes in governmental regulations.
As part of the overall parking ratio, Landlord shall at all times make available
to Tenant designated covered stalls under Tenant's Building in a number not less
than one stall per 1,000 rentable square feet of the Premises then under lease.
12. UTILITIES
Landlord shall furnish the Premises with electricity for office use,
including
PAGE 13
lighting and low power usage (110 volt) for office machines and water for
restroom facilities. Landlord shall also provide customary building or
janitorial and trash disposal service on weekdays, other than holidays. From
7:00 a.m. to 6:00 p.m. on weekdays and 9:00 a.m. to 1:00 p.m. on Saturday,
excluding legal holidays ("Normal Business Hours"), Landlord shall furnish the
Premises with heat and air conditioning services. If requested by Tenant,
Landlord shall furnish heat and air conditioning services at times other than
Normal Business Hours, and janitorial services on other days. The costs of all
utilities and services provided pursuant to this Section 12 shall be Expenses
allocated to Tenant as part of Tenant's Share of Expenses pursuant to Section
4.c. and 8.c.(1) above. Tenant shall pay when due and directly to the service
provider any telephone or other services metered, chargeable or provided to the
Premises and not charged as part of Tenant's Share of Expenses.
13. MAINTENANCE
Landlord shall maintain, in good condition, the structural parts of the
Premises, which shall include only the foundations, bearing and exterior walls
(excluding glass), subflooring and roof (excluding skylights), the unexposed
electrical, plumbing and sewerage systems, including those portions of the
systems lying outside the Premises, gutters and downspouts on the Building and
the heating, ventilating and air conditioning system servicing the Premises;
provided, however, the cost of all such maintenance shall be considered
"Expenses" for purposes of Section 4.c. Except as provided above, Tenant shall
maintain and repair the Premises in good condition, including, without
limitation, maintaining and repairing all walls, storefronts, floors, ceilings,
interior and exterior doors, exterior and interior windows and fixtures and
interior plumbing as well as damage caused by Tenant, its agents, employees or
invitees. Upon expiration or termination of this Lease, ▇▇▇▇▇▇ shall surrender
the Premises to Landlord in the same condition as existed at the commencement of
the term, except for reasonable wear and tear or damage caused by fire or other
casualty for which ▇▇▇▇▇▇▇▇ has received all funds necessary for restoration of
the Premises from insurance proceeds.
14. ALTERATIONS
Upon completion of the initial Premises improvements, Tenant shall not make
any alterations to the Premises, or to the Project, including any changes to the
existing landscaping, without Landlord's prior written consent, which consent
(in the case of non-structural alterations) shall not be unreasonably withheld.
If Landlord gives its consent to such alterations, Landlord may post notices in
accordance with the laws of the state in which the premises are located. Any
alterations made shall remain on and be surrendered with the Premises upon
expiration or termination of this Lease, except that Landlord may, within 30
days before or 30 days after expiration of the term, elect
PAGE 14
to require Tenant to remove any alterations which Tenant may have made to the
Premises. If Landlord so elects, at its own cost Tenant shall restore the
Premises to the original condition, reasonable wear and tear excepted, before
the last day of the term or within 30 days after notice of its election is
given, whichever is later.
Should Landlord consent in writing to Tenant's alteration of the Premises,
Tenant shall contract with a contractor approved by Landlord for the
construction of such alterations, shall secure all appropriate governmental
approvals and permits, and shall complete such alterations with due diligence in
compliance with plans and specifications approved by Landlord. All such
construction shall be performed in a manner which will not interfere with the
quiet enjoyment of other tenants of the Project. Tenant shall pay all costs for
such construction and shall keep the Premises and the Project free and clear of
all mechanics' liens which may result from construction by Tenant.
15. RELEASE AND INDEMNITY
A. TENANT INDEMNITY
Except as otherwise provided in this Section, Tenant shall indemnify,
defend (using legal counsel acceptable to Landlord) and save Landlord harmless
from all claims, suits, losses, damages, fines, penalties, liabilities and
expenses (including Landlord's personnel and overhead costs and attorneys fees
and other costs incurred in connection with claims, regardless of whether such
claims involve litigation) resulting from any actual or alleged injury
(including death) of any person or from any actual or alleged loss of or damage
to, any property arising out of or in connection with (i) Tenant's occupation,
use or improvement of the Premises, or that of its employees, agents or
contractors, (ii) Tenant's breach of its obligations hereunder, or (iii) any act
or omission of Tenant or any subtenant, licensee, assignee or concessionaire of
Tenant, or of any officer, agent, employee, guest or invitee of Tenant, or of
any such entity in or about the Premises. ▇▇▇▇▇▇ agrees that the foregoing
indemnity specifically covers actions brought by its own employees. This
indemnity with respect to acts or omissions during the term of this Lease shall
survive termination or expiration of this Lease. The foregoing indemnity is
specifically and expressly intended to, constitute a waiver of Tenant's immunity
under Washington's Industrial Insurance Act, RCW Title 51, to the extent
necessary to provide Landlord with a full and complete indemnity from claims
made by Tenant and its employees, to the extent provided herein. Tenant shall
promptly notify Landlord of casualties or accidents occurring in or about the
Premises. LANDLORD AND TENANT ACKNOWLEDGE THAT THE INDEMNIFICATION PROVISIONS
OF SECTION 8.f. AND THIS SECTION 15 WERE SPECIFICALLY NEGOTIATED AND AGREED UPON
BY THEM.
PAGE 15
B. LANDLORD INDEMNITY
Except as otherwise provided in this Section 15, Landlord shall indemnify,
defend (using legal counsel acceptable to Tenant) and save Tenant harmless from
all claims, suits, losses, fines, penalties, liabilities and expenses (including
Tenant's personnel and overhead costs and attorneys' fees and other costs
incurred in connection with claims, regardless of whether such claims involve
litigation) resulting from any actual or alleged injury (including death) of any
person or from any actual or alleged loss of or damage to, any property to the
extent caused by negligent acts of Landlord on the Common Areas. ▇▇▇▇▇▇▇▇
agrees that the foregoing indemnity specifically covers actions brought by its
own employees. This indemnity with respect to actions or omissions during the
term of this Lease shall survive termination or expiration of this Lease. The
foregoing indemnity is specifically and expressly intended to constitute a
waiver of Landlord's immunity under Washington's Industrial Insurance Act, RCW
Title 51, to the extent necessary to provide Tenant with a full and complete
indemnity from claims made by Landlord and its employees to the extent provided
herein. LANDLORD AND TENANT ACKNOWLEDGE THAT THE INDEMNIFICATION PROVISIONS OF
SECTION 15 WERE SPECIFICALLY NEGOTIATED AND AGREED UPON BY THEM.
C. RELEASE
Tenant hereby fully and completely waives and releases all claims against
Landlord for any losses or other damages sustained by Tenant or any person
claiming through Tenant resulting from any accident or occurrence in or upon the
Premises, including but not limited to: any defect in or failure of Project
equipment; any failure to make repairs; any defect, failure, surge in, or
interruption of Project facilities or services; any defect in or failure of
Common Areas; broken glass; water leakage; the collapse of any Building
component; or any act, omission or negligence of co-tenants, licensees or any
other persons or occupants of the Building, provided only that the release
contained in this Section 15.c shall not apply to claims for actual damage to
persons or property (excluding consequential damages such as lost profits)
resulting directly from Landlord's gross negligence or willful misconduct or
Landlord's breach of its express obligations under this Lease which Landlord has
not cured within a reasonable time after receipt of written notice of such
breach from Tenant.
D. LIMITATION ON INDEMNITY
In compliance with RCW 4.24.115 as in effect on the date of this Lease, all
provisions of this Lease pursuant to which Landlord or Tenant (the "Indemnitor")
agrees to indemnify the other (the "Indemnitee") against liability for damages
arising out of bodily injury to Persons or damage to property relative to the
construction,
PAGE 16
alteration, repair, addition to, subtraction from, improvement to, or
maintenance of, any building, road, or other structure, project, development, or
improvement attached to real estate, including the Premises, (i) shall not apply
to damages caused by or resulting from the sole negligence of the Indemnitee,
its agents or employees, and (ii) to the extent caused by or resulting from the
concurrent negligence of (a) the Indemnitee or the Indemnitee's agents or
employees, and (b) the Indemnitor or the Indemnitor's agents or employees, shall
apply only to the extent of the Indemnitor's negligence; PROVIDED, HOWEVER, the
limitations on indemnity set forth in this Section shall automatically and
without further act by either Landlord or Tenant be deemed amended so as to
remove any of the restrictions contained in this Section no longer required by
then applicable law.
E. DEFINITIONS
As used in any Section establishing indemnity or release of Landlord,
"Landlord" shall include Landlord, its partners, officers, agents, employees and
contractors, and "Tenant" shall include Tenant and any person or entity claiming
through Tenant.
16. INSURANCE
Tenant, at its cost, shall maintain public liability and property damage
insurance and products liability insurance with a single combined liability
limit of $1,000,000, insuring against all liability of Tenant and its
representatives, employees, invitees, and agents arising out of or in connection
with ▇▇▇▇▇▇'s use or occupancy of the Premises. Public liability insurance,
products liability insurance and property damage insurance shall insure
performance by Tenant of the indemnity provisions of Section 15. Landlord shall
be named as additional insured and the policy shall contain cross-liability
endorsements. On all its personal property, at its cost, Tenant shall maintain
a policy of standard fire and extended coverage insurance with vandalism and
malicious mischief endorsements and "all risk" coverage on all Tenant's
improvements and alterations, including without limitation, all items of Tenant
responsibility described in Section 13 in or about the Premises, to the extent
of at least 90% of their full replacement value. The proceeds from any such
policy shall be used by Tenant for the replacement of personal property and the
restoration of Tenant's improvements or alterations. All insurance required to
be provided by Tenant under this Lease shall release Landlord from any claims
for damage to business or to any person or the Premises and the Project, and to
Tenant's fixtures, personal property, improvements and alterations in or on the
Premises or the Project, caused by or resulting from risks insured against under
any insurance policy carried by Tenant in force at the time of such damage. In
addition, Tenant hereby independently releases Landlord from any and all claims
for damage to business or to
PAGE 17
any person or the Premises and the Project, and to Tenant's fixtures, personal
property, improvements and alterations in or on the Premises or the Project,
caused by or resulting from risks that would have been insured against under any
insurance policy required by this Lease to be carried by ▇▇▇▇▇▇, even if Tenant
failed to so carry the required insurance. All insurance required to be provided
by Tenant under this Lease: (a) shall be issued by Insurance companies
authorized to do business in the state in which the premises are located with a
financial rating of at least an A+XII status as rated in the most recent edition
of Best's Insurance Reports; (b) shall be issued as a primary policy; and (c)
shall contain an endorsement requiring at least 30 days prior written notice of
cancellation to Landlord and Landlord's lender, before cancellation or change in
coverage, scope or amount of any policy. Tenant shall deliver a certificate or
copy of such policy together with evidence of payment of all current premiums to
Landlord within 30 days of execution of this Lease. If Tenant fails at any time
to maintain the insurance required by this Lease, and fails to cure such default
within five (5) business days of written notice from Landlord then, in addition
to all other remedies available under this Lease and applicable law, Landlord
may purchase such insurance on Tenant's behalf and the cost of such insurance
shall be Additional Rent due within ten (10) days of written invoice from
Landlord to Tenant.
17. DESTRUCTION
If during the term, the Premises or Project are more than 10% destroyed
from any cause, or rendered inaccessible or unusable from any cause, Landlord
may, in its sole discretion, terminate this Lease by delivery of notice to
Tenant within 30 days of such event without compensation to Tenant. If in
Landlord's estimation, the Premises cannot be restored within 90 days following
such destruction, the Landlord shall notify Tenant and Tenant may terminate this
Lease by delivery of notice to Landlord within 30 days of receipt of Landlord's
notice. If neither Landlord nor Tenant terminates this Lease as provided above,
then Landlord shall commence to restore the Premises in compliance with then
existing laws and shall complete such restoration with due diligence. In such
event, this Lease shall remain in full force and effect, but there shall be an
abatement of Base Monthly Rent and ▇▇▇▇▇▇'s Share of Expenses between the date
of destruction and the date of completion of restoration, based on the extent to
which destruction interferes with ▇▇▇▇▇▇'s use of the Premises.
18. CONDEMNATION
A. TAKING
If all of the Premises are taken by Eminent Domain, this Lease shall
terminate as of the date Tenant is required to vacate the Premises and all Base
and Additional
PAGE 18
Rent shall be paid to that date. The term "Eminent Domain" shall include the
taking or damaging of property by, through or under any governmental or
statutory authority, and any purchase or acquisition in lieu thereof, whether
the damaging or taking is by government or any other person. If, in the
reasonable judgment of Landlord, a taking of any part of the Premises by Eminent
Domain renders the remainder thereof unusable for the business of Tenant (or the
cost of restoration of the Premises is not commercially reasonable), the Lease
may, at the option of either party, be terminated by written notice given to the
other party not more than thirty (30) days after Landlord gives Tenant written
notice of the taking, and such termination shall be effective as of the date
when Tenant is required to vacate the portion of the Premises so taken. If this
Lease is so terminated, all Base and Additional Rent shall be paid to the date
of termination. Whenever any portion of the Premises is taken by Eminent Domain
and this Lease is not terminated, Landlord shall at its expense proceed with all
reasonable dispatch to restore, to the extent of available proceeds and to the
extent it is reasonably prudent to do so, the remainder of the Premises to the
condition they were in immediately prior to such taking, and Tenant shall at its
expense proceed with all reasonable dispatch to restore its personal property
and all improvements made by it to the Premises to the same condition they were
in immediately prior to such taking. The Base and Additional Rent payable
hereunder shall be reduced from the date Tenant is required to partially vacate
the Premises in the same proportion that the Rentable Area taken bears to the
total Rentable Area of the Premises prior to taking.
B. AWARD
Landlord reserves all right to the entire damage award or payment for any
taking by Eminent Domain, and Tenant waives all claim whatsoever against
Landlord for damages for termination of its leasehold interest in the Premises
or for interference with its business. Tenant hereby grants and assigns to
Landlord any right Tenant may now have or hereafter acquire to such damages and
agrees to execute and deliver such further instruments of assignment as Landlord
may from time to time request. Tenant shall, however, have the right to claim
from the condemning authority all compensation that may be recoverable by Tenant
on account of any loss incurred by Tenant in moving Tenant's merchandise,
furniture, trade fixtures and equipment, provided, however, that Tenant may
claim such damages only if they are awarded separately in the eminent domain
proceeding and not out of or as part of Landlord's damages.
19. ASSIGNMENT OR SUBLEASE
Tenant shall not assign or encumber its interest in this Lease or the
Premises or sublease all or any part of the Premises or allow any other person
or entity (except Tenant's authorized representatives, employees, invitees, or
guests) to occupy or use
PAGE 19
all or any part of the Premises without first obtaining Landlord's consent which
Landlord may withhold or condition in its sole discretion, provided only that
(a) Landlord shall consent to a merger or combination and associated assignment
or sublease for the same use where (i) the succeeding entity has a net worth
equal to or greater than that of Tenant immediately prior to the assignment or
sublease and (ii) Tenant's management team is a substantial part of the
management team of the successor entity and (b) Landlord shall consent to a
sublease for the same use to a subtenant of equal or greater financial strength
from Tenant. No assignment or sublease shall release Tenant from the obligation
to perform all obligations under this Lease. Any assignment, encumbrance or
sublease without Landlord's written consent shall be voidable and at Landlord's
election, shall constitute a default. If Tenant is a partnership, a withdrawal
or change, voluntary, involuntary or by operation of law of any partner, or the
dissolution of the partnership, shall be deemed a voluntary assignment. If
Tenant consists of more than one person, a purported assignment, voluntary or
involuntary or by operation of law from one person to the other shall be deemed
a voluntary assignment. If Tenant is a corporation, any dissolution, merger,
consolidation or other reorganization of Tenant, or sale or other transfer of a
controlling percentage of the capital stock of Tenant, or the sale of at least
25% of the value of the assets of Tenant shall be deemed a voluntary assignment.
The phrase "controlling percentage" means ownership of and right to vote stock
possessing at least 25% of the total combined voting power of all classes of
Tenant's capital stock issued, outstanding and entitled to vote for election of
directors. This Section 19 shall not apply to corporations the stock of which is
traded through an exchange or over the counter. All rent received by Tenant from
its subtenants in excess of the Rent payable by Tenant to Landlord under this
Lease shall be paid to Landlord, or any sums to be paid by an assignee to Tenant
in consideration of the assignment of this Lease shall be paid to Landlord. If
Tenant requests ▇▇▇▇▇▇▇▇ to consent to a proposed assignment or subletting,
Tenant shall pay to Landlord, whether or not consent is ultimately given, $100
or Landlord's reasonable attorney's fees incurred in connection with such
request, whichever is greater, not to exceed $250 per transaction.
No interest of Tenant in this Lease shall be assignable by involuntary
assignment through operation of law (including without limitation the transfer
of this Lease by testacy or intestacy). Each of the following acts shall be
considered an involuntary assignment: (a) if Tenant is or becomes bankrupt or
insolvent, makes an assignment for the benefit of creditors, or institutes
proceedings under the Bankruptcy Act in which Tenant is the bankrupt; or if
Tenant is a partnership or consists of more than one person or entity, if any
partner of the partnership or other person or entity is or becomes bankrupt or
insolvent, or makes an assignment for the benefit of creditors; or (b) if a writ
of attachment or execution is levied on this Lease; or (c) if in any proceeding
or action to which Tenant is a party, a receiver is appointed with authority to
take possession of the Premises. An involuntary assignment shall constitute a
PAGE 20
default by ▇▇▇▇▇▇ and Landlord shall have the right to elect to terminate this
Lease, in which case this Lease shall not be treated as an asset of Tenant.
20. DEFAULT
The occurrence of any of the following shall constitute a default by
Tenant: (a) a failure to pay Rent or other charge when due provided that
Landlord shall not exercise any of its rights under this Section 20 until
Landlord has given Tenant notice of such default and Tenant has failed to pay
such rent or other charge within three (3) days of the effective date of such
notice; (b) abandonment and vacation of the Premises (failure to occupy and
operate the Premises for ten consecutive days shall be conclusively deemed an
abandonment and vacation); or (c) failure to perform any other provision of this
Lease, provided that Landlord shall not exercise any of its rights under this
Section 20(c) until Landlord has given Tenant notice of such default and Tenant
has failed to cure such default and provided further that if more than thirty
(30) days are required to complete such performance, Landlord shall not exercise
any of its rights if Tenant commences to cure such default within the thirty
(30) day period and thereafter diligently pursues such cure completion. The
notice required by this Section is intended to satisfy any and all notice
requirements imposed by law on Landlord and is not in addition to any such
requirement.
21. LANDLORD'S REMEDIES
Landlord shall have the following remedies if Tenant is in default and has
failed to cure such default within any applicable cure period. (These remedies
are not exclusive; they are cumulative and in addition to any remedies now or
later allowed by law): Landlord may terminate Tenant's right to possession of
the Premises at any time. No act by Landlord other than giving notice to Tenant
shall terminate this Lease. Acts of maintenance, efforts to relet the Premises,
or the appointment of a receiver on Landlord's initiative to protect ▇▇▇▇▇▇▇▇'s
interest under this Lease shall not constitute a termination of Tenant's right
to possession. Upon termination of Tenant's right to possession, Landlord has
the right to recover from Tenant: (1) the worth of the unpaid Rent that had
been earned at the time of termination of Tenant's right to possession; (2) the
worth of the amount of the unpaid Rent that would have been earned after the
date of termination of Tenant's right to possession; (3) any other amount,
including but not limited to, expenses incurred to relet the Premises, court,
attorney and collection costs, necessary to compensate Landlord for all
detriment caused by ▇▇▇▇▇▇'s default. "The Worth," as used for Item (1) in this
Paragraph 21 is to be computed by allowing interest at the rate of 12 percent
per annum. If the interest rate specified in this Lease is higher than the rate
permitted by law, the interest rate is hereby decreased to the maximum legal
interest rate permitted by law. "The Worth" as used for Item (2) in this
Paragraph 21 is to be computed by
PAGE 21
discounting the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of termination of ▇▇▇▇▇▇'s right of possession.
22. ENTRY ON PREMISES
Landlord and its authorized representatives shall have the right to enter
the Premises at all reasonable times and upon reasonable notice except in an
emergency, when no notice shall be required, for any of the following purposes:
(a) to determine whether the Premises are in good condition and whether Tenant
is complying with its obligations under this Lease; (b) to do any necessary
maintenance and to make any restoration to the Premises or the Project that
Landlord has the right or obligation to perform; (c) to post "for sale" signs at
any time during the term, to post "for rent" or "for lease" signs during the
last 90 days of the term, or during any period while Tenant is in default; (d)
to show the Premises to prospective brokers, agents, buyers, tenants or persons
interested in leasing or purchasing the Premises, at any time during the term;
or (e) to repair, maintain or improve the Project and to erect scaffolding and
protective barricades around and about the Premises but not so as to prevent
entry to the Premises and to do any other act or thing necessary for the safety
or preservation of the Premises or the Project. Landlord shall not be liable in
any manner for any inconvenience, disturbance, loss of business, nuisance or
other damage arising out of Landlord's entry onto the Premises as provided in
this Section 22. Tenant shall not be entitled to an abatement or reduction of
Rent if Landlord exercises any rights reserved in this Section 22. Landlord
shall conduct his activities on the Premises as provided herein in a
commercially reasonable manner so as to limit inconvenience, annoyance or
disturbance to Tenant to the maximum extent practicable. For each of these
purposes, Landlord shall at all times have and retain a key with which to unlock
all the doors in, upon and about the Premises, excluding ▇▇▇▇▇▇'s vaults and
safes. Tenant shall not alter any lock or install a new or additional lock or
bolt on any door of the Premises without prior written consent of Landlord. If
Landlord gives its consent, Tenant shall furnish Landlord with a key for any
such lock.
23. SUBORDINATION
Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, and at the election of Landlord or
any mortgagee or any beneficiary of a Deed of Trust with a lien on the Project
or any ground lessor with respect to the Project, this Lease shall be subject
and subordinate at all times to (a) all ground leases or underlying leases which
may now exist or hereafter be executed affecting the Project, and (b) the lien
of any mortgage or deed of trust which may now exist or hereafter be executed in
any amount for which the Project, ground leases or underlying leases, or
Landlord's interest or estate in any of said items is specified as security. In
the event that any ground lease or underlying
PAGE 22
lease terminates for any reason or any mortgage or Deed of Trust is foreclosed
or a conveyance in lieu of foreclosure is made for any reason, Tenant shall,
notwithstanding any subordination, attorn to and become the Tenant of the
successor in interest to ▇▇▇▇▇▇▇▇, at the option of such successor in interest.
Tenant covenants and agrees to execute and deliver, upon demand by ▇▇▇▇▇▇▇▇ and
in the form requested by Landlord any additional documents evidencing the
priority or subordination of this Lease with respect to any such ground lease or
underlying leases or the lien of any such mortgage or Deed of Trust. Tenant
hereby irrevocably appoints Landlord as attorney-in-fact of Tenant to execute,
deliver and record any such document in the name and on behalf of ▇▇▇▇▇▇.
Tenant, within ten days from notice from Landlord, shall execute and
deliver to Landlord, in recordable form, certificates stating that this Lease is
not in default, is unmodified and in full force and effect, or in full force and
effect as modified, and stating the modifications. This certificate should also
state the amount of current monthly Rent, the dates to which Rent has been paid
in advance, and the amount of any security deposit and prepaid Rent. Failure to
deliver this certificate to Landlord within ten days shall be conclusive upon
Tenant that this Lease is in full force and effect and has not been modified
except as may be represented by Landlord.
24. NOTICE
Any notice, demand or request required hereunder shall be given in writing
to the party's facsimile number or address set forth in Section I hereof by any
of the following means: (a) personal service; (b) electronic communication,
whether by telex, telegram or facsimile; (c) overnight courier; or (d)
registered or certified, first class mail, return receipt requested. Such
addresses may be changed by notice to the other parties given in the same manner
as above provided. Any notice, demand or request sent pursuant to either
subsection (a) or (b) hereof shall be deemed received upon such personal service
or upon dispatch by electronic means with electronic confirmation of receipt.
Any notice, demand or request sent pursuant to subsection (c) hereof shall be
deemed received on the business day immediately following deposit with the
overnight courier and, if sent pursuant to subsection (d), shall be deemed
received forty-eight (48) hours following deposit in the U.S. mail.
25. WAIVER
No delay or omission in the exercise of any right or remedy by Landlord
shall impair such right or remedy or be construed as a waiver. No act or
conduct of Landlord, including without limitation, acceptance of the keys to the
Premises, shall constitute an acceptance of the surrender of the Premises by
Tenant before the expiration of the term. Only written notice from Landlord to
Tenant shall constitute
PAGE 23
acceptance of the surrender of the Premises and accomplish termination of the
Lease. ▇▇▇▇▇▇▇▇'s consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by ▇▇▇▇▇▇.
Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of the
Lease. TENANT SPECIFICALLY ACKNOWLEDGES AND AGREES THAT, WHERE TENANT HAS
RECEIVED A NOTICE TO CURE DEFAULT (WHETHER RENT OR NON-RENT), NO ACCEPTANCE BY
LANDLORD OF RENT SHALL BE DEEMED A WAIVER OF SUCH NOTICE, AND, INCLUDING BUT
WITHOUT LIMITATION, NO ACCEPTANCE BY LANDLORD OF PARTIAL RENT SHALL BE DEEMED TO
WAIVE OR CURE ANY RENT DEFAULT. LANDLORD MAY, IN ITS DISCRETION, AFTER RECEIPT
OF PARTIAL PAYMENT OF RENT, REFUND SAME AND CONTINUE ANY PENDING ACTION TO
COLLECT THE FULL AMOUNT DUE, OR MAY MODIFY ITS DEMAND TO THE UNPAID PORTION. IN
EITHER EVENT THE DEFAULT SHALL BE DEEMED UNCURED UNTIL THE FULL AMOUNT IS PAID
IN GOOD FUNDS.
26. SURRENDER OF PREMISES; HOLDING OVER
Upon expiration of the term, ▇▇▇▇▇▇ shall surrender to Landlord the
Premises and all Tenant improvements and alterations in good condition, except
for ordinary wear and tear and alterations Tenant has the right or is obligated
to remove under the provisions of Section 14 herein. Tenant shall remove all
personal property including, without limitation, all wallpaper, paneling and
other decorative improvements or fixtures and shall perform all restoration made
necessary by the removal of any alterations or Tenant's personal property before
the expiration of the term, including for example, restoring all wall surfaces
to their condition prior to the commencement of this Lease. Landlord can elect
to retain or dispose of in any manner ▇▇▇▇▇▇'s personal property not removed
from the Premises by Tenant prior to the expiration of the term. Tenant waives
all claims against Landlord for any damage to Tenant resulting from ▇▇▇▇▇▇▇▇'s
retention or disposition of ▇▇▇▇▇▇'s personal property. Tenant shall be liable
to Landlord for Landlord's cost for storage, removal or disposal of Tenant's
personal property.
If ▇▇▇▇▇▇, with ▇▇▇▇▇▇▇▇'s consent, remains in possession of the Premises
after expiration or termination of the term, or after the date in any notice
given by Landlord to Tenant terminating this Lease, such possession by Tenant
shall be deemed to be a month-to-month tenancy terminable as provided under
Washington law, by either party. All provisions of this Lease, except those
pertaining to term and Rent, shall apply to the month-to-month tenancy. During
any holdover term, Tenant shall pay Base Monthly Rent in an amount equal to 125%
of Base Monthly Rent for the last full
PAGE 24
calendar month during the regular term plus 100% of Tenant's share of Expenses
pursuant to Section 4.c.3.
27. BUILDING PLANNING
If Landlord requires the Premises for use in conjunction with another suite
or for other reasons connected with the Project planning program, upon notifying
Tenant in writing, Landlord shall have the right to move Tenant to other space
in the Project that is substantially the same in size, configuration and tenant
improvements, such move (including out-of-pocket ancillary costs such as
reprinting of stationary) to be at Landlord's sole cost and expense. Upon such
move, the terms and conditions of the original Lease shall remain in full force
and effect, save and excepting that a revised Exhibit "A" shall become part of
this Lease and shall reflect the location of the new space and Section 1 of this
Lease shall be amended to include and state all correct data as to the new
space. Notwithstanding the above, if Landlord notifies Tenant of Landlord's
intention to exercise the relocation rights provided in this Section 27, Tenant
may, within 30 days of receipt of such notice, notify Landlord of Tenant's
intention to terminate this Lease. If Tenant so notifies Landlord, then either
(i) Landlord shall, within 30 days of receipt of Tenant's notice, rescind the
relocation notice and this Lease shall continue unaltered, or (ii) this Lease
shall terminate 90 days following ▇▇▇▇▇▇▇▇'s receipt of Tenant's notice without
any liability to Landlord or Tenant for such early termination.
28. MISCELLANEOUS PROVISIONS
A. TIME OF ESSENCE
Time is of the essence of each provision of this Lease.
B. SUCCESSOR
This Lease shall be binding on and inure to the benefit of the parties and
their successors, except as provided in Section 19 herein.
C. LANDLORD'S CONSENT
Except as otherwise specifically provided, any consent required by Landlord
under this Lease must be granted in writing and may be withheld or conditioned
by Landlord in its sole and absolute discretion.
D. COMMISSIONS
Each party represents that it has not had dealings with any real estate
broker, finder or other person with respect to this Lease in any manner, except
for the broker
PAGE 25
identified in Section 1, who shall be compensated by Landlord. Landlord and
Tenant recognize that it is possible that they may hereafter make additional
agreements regarding further extension or renewal of this Lease or a new lease
or leases for all or one or more parts of the Premises or other space in the
Project for a term or terms commencing after the Commencement Date of this
Lease. Landlord and ▇▇▇▇▇▇ recognize that it is also possible that they may
hereafter modify this Lease to add additional space or to substitute space as
part of the Premises. If any such additional agreements, new leases or
modifications to this Lease are made, Landlord shall not have any obligation to
pay any compensation to any real estate broker or to any other third person
engaged by Tenant to render services to Tenant in connection with negotiating
such matters, regardless of whether under the circumstances such person is or is
not regarded by the law as an agent of Landlord.
E. OTHER CHARGES
If either party commences any litigation against the other party or files
an appeal of a decision arising out of or in connection with the Lease, the
prevailing party shall be entitled to recover from the other party reasonable
attorney's fees and costs of suit. If Landlord employs a collection agency to
recover delinquent charges, ▇▇▇▇▇▇ agrees to pay all collection agency and
attorneys' fees charged to Landlord in addition to Rent, late charges, interest
and other sums payable under this Lease. Tenant shall pay a charge of $75 to
Landlord for preparation of a demand for delinquent Rent.
F. FORCE MAJEURE
Landlord shall not be deemed in default hereof nor liable for damages
arising from its failure to perform its duties or obligations hereunder if such
is due to causes beyond its reasonable control, including, but not limited to,
acts of God, acts of civil or military authorities, fires, floods, windstorms,
earthquakes, strikes or labor disturbances, civil commotion, delays in
transportation, governmental delays or war.
G. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the "Rules and
Regulations", a copy of which is attached hereto, and all reasonable and
nondiscriminatory modifications thereof and additions thereto from time to time
put into effect by ▇▇▇▇▇▇▇▇. Landlord shall not be responsible to Tenant for
the violation or non-performance by any other tenant or occupant of the building
or Project of said tenant or occupant's lease or of any of said Rules and
Regulations.
PAGE 26
▇. ▇▇▇▇▇▇▇▇'S SUCCESSORS
In the event of a sale or conveyance by Landlord of the Project, the same
shall operate to release Landlord from any liability under this Lease, and in
such event Landlord's successor in interest shall be solely responsible for all
obligations of Landlord under this Lease.
I. INTERPRETATION
This Lease shall be construed and interpreted in accordance with the laws
of the state in which the premises are located. This Lease constitutes the
entire agreement between the parties with respect to the Premises and the
Project, except for such guarantees or modifications as may be executed in
writing by the parties from time to time. When required by the context of this
Lease, the singular shall include the plural, and the masculine shall include
the feminine and/or neuter. "Party" shall mean Landlord or Tenant. If more
than one person or entity constitutes Landlord or Tenant, the obligations
imposed upon that party shall be joint and several. The enforceability,
invalidity or illegality of any provision shall not render the other provisions
unenforceable, invalid or illegal.
J. CLEAN AIR ACT
Tenant acknowledges that Landlord has not made any portion of the Premises
or the Building accessible for smoking in compliance with WAC ▇▇▇-▇▇-▇▇▇▇▇. If
Tenant wishes to make any portion of the Premises accessible for smoking, Tenant
shall make all improvements necessary to comply with all applicable governmental
rules and regulations. Tenant acknowledges that the indemnity contained in
Section 15 of the Lease includes, but is not limited to claims based on the
presence of tobacco smoke as a result of the activities of Tenant, its
employees, agents, or guests.
29. CARDKEY SYSTEM
Tenant shall be allowed to install a card access entry pad on the exterior
of the main entrance to the Premises, so as to work in conjunction with its
existing card key system in the Project. At the expiration of the Lease, Tenant
at its own cost shall remove such card access entry pad and repair any damage
resulting therefrom.
LANDLORD:
PAGE 27
Teachers Insurance & Annuity Association of America,
Inc.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Assistant Secretary
TENANT:
ONYX Software Corporation
By: ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Its: Controller
------------------------------------
PAGE 28
STATE OF New York )
) ss.
COUNTY OF New York )
I certify that I know or have satisfactory evidence that ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is
the person who appeared before me, and said person acknowledged that he signed
this instrument, on oath stated that he was authorized to execute the instrument
and acknowledged it as the Assistant Secretary of Teachers Insurance & Annuity
Association of America, to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.
Dated: 4-6-98
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
(Print Name)
Notary Public, in and for the State
of NY , residing at Queens
----------- ---------
My Commission Expires 1-20-00
---------------
PAGE 29
STATE OF Washington )
--------------
) ss.
COUNTY OF King )
-------------
I certify that I know or have satisfactory evidence that ▇▇▇▇ ▇▇▇▇▇▇▇
------------------
is the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute the
instrument and acknowledged it as the _____________ of ONYX Software Corporation
to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
Dated: March 4, 1998
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
(Print Name)
Notary Public, in and for the State
of WA , residing at Bothell
----------- ---------
My Commission Expires 5-19-01
---------------
PAGE 30