Exhibit 10.1
SUNSET NORTH
BELLEVUE, WASHINGTON
OFFICE LEASE AGREEMENT
BETWEEN
EOP-SUNSET NORTH BELLEVUE, L.L.C.,
a Washington limited liability company
("LANDLORD")
AND
EXPEDIA, INC.,
a Washington corporation
("TENANT")
TABLE OF CONTENTS
I. BASIC LEASE INFORMATION ....................................1
II. LEASE GRANT ................................................3
III. ADJUSTMENT OF COMMENCEMENT DATE; POSSESSION ................3
IV. RENT .......................................................3
V. COMPLIANCE WITH LAWS; USE ..................................8
VI. SECURITY DEPOSIT ...........................................9
VII. SERVICES TO BE FURNISHED BY LANDLORD ......................10
VIII. LEASEHOLD IMPROVEMENTS ....................................11
IX. REPAIRS AND ALTERATIONS ...................................11
X. USE OF ELECTRICAL SERVICES BY TENANT ......................13
XI. ENTRY BY LANDLORD .........................................14
XII. ASSIGNMENT AND SUBLETTING .................................14
XIII. LIENS .....................................................16
XIV. INDEMNITY AND WAIVER OF CLAIMS ............................16
XV. INSURANCE .................................................17
XVI. SUBROGATION ...............................................17
XVII. CASUALTY DAMAGE ...........................................17
XVIII. CONDEMNATION ..............................................18
XIX. EVENTS OF DEFAULT .........................................18
XX. REMEDIES ..................................................19
XXI. LIMITATION OF LIABILITY ...................................20
XXII. NO WAIVER .................................................20
XXIII. QUIET ENJOYMENT ...........................................20
XXIV. RELOCATION. [INTENTIONALLY OMITTED] .......................20
XXV. HOLDING OVER ..............................................20
XXVI. SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE ..........21
XXVII. ATTORNEYS' FEES ...........................................21
XXVIII. NOTICE ....................................................21
XXIX. EXCEPTED RIGHTS ...........................................22
XXX. SURRENDER OF PREMISES .....................................22
XXXI. MISCELLANEOUS .............................................22
XXXII. ENTIRE AGREEMENT ..........................................24
-i-
OFFICE LEASE AGREEMENT
This Office Lease Agreement (the "Lease") is made and entered into as of
the 12/th/ day of September, 2002, by and between EOP-SUNSET NORTH BELLEVUE,
L.L.C., a Washington limited liability company ("Landlord") and EXPEDIA, INC., a
Washington corporation ("Tenant").
Basic Lease Information.
A. "Building" shall initially mean the building located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and commonly known as
Sunset North Building 4; from and after the Building 3 Must Take
Commencement Date (defined in Section IV.A of Exhibit E attached
hereto), "Building" may also mean the building located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and commonly known as
Sunset North Building 3, in order to govern the parties'
respective rights and obligations with respect to the Building 3
Must Take Space (defined in Section IV.A of Exhibit E attached
hereto). "Buildings" shall mean the 3 buildings located on the
real property described in Exhibit A-2 attached hereto and
commonly known collectively as ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇, ▇ and 5.
B. "Rentable Square Footage of the Buildings" is deemed to be
465,013 square feet.
C. "Premises" shall initially mean the area shown on Exhibit A to
this Lease. The Premises are located on floor 1 and known as
suite number 100 ("Suite 100"). The "Rentable Square Footage of
the Premises" is initially deemed to be 25,803 square feet. As
more fully described in Exhibit E, the Premises shall be
expanded at fixed times to include spaces referred to herein as
the 2003 Must Take Space and the 2005 Must Take Space. If the
Premises include one or more floors in their entirety, all
corridors and restroom facilities located on such full floor(s)
shall be considered part of the Premises. Landlord and Tenant
stipulate and agree that the Rentable Square Footage of the
Building and the Rentable Square Footage of the Premises are
correct and shall not be remeasured.
D. "Base Rent" for Suite 100:
ANNUAL RATE ANNUAL MONTHLY
PERIOD PER SQUARE FOOT BASE RENT BASE RENT
--------------------------------------------------------------------
Commencement Date - $ 14.00 $ 361,242.00 $ 30,103.50
07/31/04
--------------------------------------------------------------------
08/01/04 - 09/30/09 $ 15.00 $ 387,045.00 $ 32,253.75
--------------------------------------------------------------------
E. "Tenant's Pro Rata Share": Suite 100: 5.5489%.
F. "Term": A period of approximately 84 months. The Term shall
commence on the later to occur of (i) October 1, 2002, and (ii)
two (2) weeks after Tenant establishes Connectivity (as
described in Section I of Exhibit E), but in any event no later
than November 1, 2002 (the "Commencement Date") and, unless
terminated early in accordance with this Lease, end on September
30, 2009 (the "Termination Date"). Promptly after the
determination of the Commencement Date, Landlord and Tenant
shall enter into a commencement letter agreement in the form
attached as Exhibit C; the Termination Date shall not be
adjusted.
G. Tenant allowance(s): Refurbishment Allowance provided for in
Exhibit E, Section III.
H. "Security Deposit": Initially, the sum of $677,568.00, in the
form of a letter of credit, as more fully described in Article
VI.
"Guarantor(s)": As of the date of this Lease, there are no
Guarantors.
J. "Broker(s)": ▇▇▇▇▇▇▇▇▇ Group and CB ▇▇▇▇▇▇▇ ▇▇▇▇▇.
K. "Permitted Use": General office use (which shall include the
right to install a cafeteria (in accordance with Article IX
below), a call center staffed by not more than 40 persons); and
a retail travel office provided (x) such office is located on
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the ground floor of the Building, (y) such office is no larger
than 5,000 square feet and (z) the operation of such office is
in compliance with all applicable Laws.
L. "Notice Addresses"
Tenant:
On and after the Commencement Date, notices shall be sent to
Tenant at the Premises. Prior to the Commencement Date, notices
shall be sent to Tenant at the following address:
EXPEDIA, INC.
Attn: General Services Director
Attn: General Counsel
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone #: ▇▇▇-▇▇▇-▇▇▇▇
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
Landlord: With a copy to:
EOP-Sunset North Bellevue, L.L.C. Equity Office Properties
c/o Equity Office Properties Trust Two North Riverside Plaza
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Property Manager Attention: Regional Counsel -
Seattle Region
Rent (defined in Section IV.A) is payable to the order of Equity
Office Properties at the following address:
Equity Office Properties
▇/▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ #▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dept. 13310
M. "Business Day(s)" are Monday through Friday of each week,
exclusive of New Year's Day, President's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day
("Holidays"). Landlord may designate additional Holidays,
provided that the additional Holidays are commonly recognized by
other office buildings in the area where the Building is
located.
N. [INTENTIONALLY OMITTED]
O. "Law(s)" means all applicable statutes, codes, ordinances,
orders, rules and regulations of any municipal or governmental
entity.
P. "Normal Business Hours" for the Building are 7:00 A.M. to 7:00
P.M. on Business Days and 7:00 A.M. to 2:00 P.M. on Saturdays.
Q. "Property" means the Building and the parcel(s) of land on which
it is located and, at Landlord's discretion, the Building garage
and other improvements serving the Building, if any, and the
parcel(s) of land on which they are located.
R. "Project" means the parcel(s) of real estate outlined on Exhibit
A-3 attached hereto and incorporated herein, which includes the
Buildings, the Property and the Exterior Common Areas (defined
below), all of which are located in Bellevue, Washington.
S. "Exterior Common Areas" mean those areas of the Project and/or
the Property which are not located within the Building and which
are provided and maintained for the use and benefit of Landlord
and tenants of the Building and/or the Project generally and the
employees, invitees and licensees of Landlord and such tenants,
including, without limitation, any parking garage, artificial
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, sidewalks, surface
parking and landscapes.
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II. LEASE GRANT.
Landlord leases the Premises to Tenant and Tenant leases the Premises
from Landlord, together with the right in common with others to use any portions
of the Property that are designated by Landlord for the common use of tenants
and others, such as sidewalks, unreserved parking areas, common corridors,
elevator foyers, restrooms, vending areas and lobby areas (the "Common Areas").
III. ADJUSTMENT OF COMMENCEMENT DATE; POSSESSION.
A. [INTENTIONALLY OMITTED]
B Subject to Landlord's obligations under Section IX.B., the
Premises are accepted by Tenant in "as is" condition and
configuration. By taking possession of the Premises, Tenant
agrees that the Premises are in good order and satisfactory
condition, and that there are no representations or warranties
by Landlord regarding the condition of the Premises or the
Building. If Landlord is delayed delivering possession of the
Premises or any other space due to the holdover or unlawful
possession of such space by any party, Landlord shall use
reasonable efforts to obtain possession of the space. Prior to
Tenant's occupancy of Suite 100, Landlord and Tenant will
jointly tour the Premises to create a "punchlist" of existing
damage to the Premises (the "Punchlist"). Tenant shall have no
obligation to repair any damage to the Premises which existed
prior to Tenant's occupancy, as noted on the Punchlist.
C. If Tenant takes possession of the Premises before the
Commencement Date, such possession shall be subject to the terms
and conditions of this Lease and Tenant shall pay Rent (defined
in Section IV.A.) to Landlord for each day of possession before
the Commencement Date. However, except for the cost of services
consumed by Tenant, Tenant shall not be required to pay Rent for
any days of possession before the Commencement Date during which
Tenant and its vendors, consultants and contractors, with the
approval of Landlord, is in possession of the Premises for the
purposes described in the following sentence. Notwithstanding
anything to the contrary in this Section III.C, Landlord grants
Tenant the right, upon the mutual execution and delivery of this
Lease, to enter the Premises, at Tenant's sole risk, solely for
the purpose of installing telecommunications and data cabling,
fixtures, furniture and equipment or other personal property in
the Premises and to establish Connectivity, and such entry and
activities shall not constitute "taking possession" of the
Premises for the purposes of this Section III.C. In the event
Landlord does not permit Tenant to have access to the Premises
at least 30 days prior to the Commencement Date, the
Commencement Date (as otherwise established pursuant to Section
I.F above) shall be adjusted to be the day that is 30 days
following the date Landlord first grants such access to Tenant,
but in no event shall the Commencement Date be later than
November 1, 2002.
IV. RENT.
A. Payments. As consideration for this Lease, Tenant shall pay
Landlord, without any setoff or deduction except as expressly
provided herein, the total amount of Base Rent and Additional
Rent due for the Term. "Additional Rent" means all sums
(exclusive of Base Rent) that Tenant is required to pay
Landlord. Additional Rent and Base Rent are sometimes
collectively referred to as "Rent". Tenant shall pay and be
liable for all rental, sales and use taxes (but excluding income
taxes), if any, imposed upon or measured by Rent under
applicable Law. Base Rent and recurring monthly charges of
Additional Rent shall be due and payable in advance on the first
day of each calendar month without notice or demand, provided
that the installment of Base Rent for the first full calendar
month of the Term shall be payable upon the execution of this
Lease by Tenant. All other items of Rent shall be due and
payable by Tenant on or before 30 days after delivery (as
established pursuant to Article XXVIII below) of Landlord's
invoice for such items. All payments of Rent shall be by good
and sufficient check or by other means (such as automatic debit
or electronic transfer) acceptable to Landlord. If Tenant fails
to pay any item or installment of Rent when due, Tenant shall
pay Landlord an administration fee equal to 4% of the past due
Rent, provided that Tenant shall be entitled to a grace period
of 5 Business Days for the first 2 late payments of Rent in a
given calendar year. If the Term commences on a day other than
the first day of a calendar month or
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terminates on a day other than the last day of a calendar month,
the monthly Base Rent and Tenant's Pro Rata Share of Expenses
(defined in Section IV.C.) and Taxes (defined in Section IV.D.)
for the month shall be prorated based on the number of days in
such calendar month. Landlord's acceptance of less than the
correct amount of Rent shall be considered a payment on account
of the earliest Rent due. No endorsement or statement on a check
or letter accompanying a check or payment shall be considered an
accord and satisfaction, and either party may accept the check
or payment without prejudice to that party's right to recover
the balance or pursue other available remedies. Tenant's
covenant to pay Rent is independent of every other covenant in
this Lease.
B. Payment of Tenant's Pro Rata Share of Expenses and Taxes. Tenant
shall pay Tenant's Pro Rata Share of the total amount of
Expenses (defined in Section IV.C.) and Taxes (defined in
Section IV.D) for each calendar year during the Term. Landlord
shall provide Tenant with a good faith estimate of the total
amount of Expenses and Taxes for each calendar year during the
Term. On or before the first day of each month, Tenant shall pay
to Landlord a monthly installment equal to one-twelfth of
Tenant's Pro Rata Share of Landlord's estimate of the total
amount of Expenses and Taxes. If Landlord determines that its
good faith estimate was incorrect by a material amount, Landlord
may provide Tenant with a revised estimate. After its receipt of
the revised estimate, Tenant's monthly payments shall be based
upon the revised estimate. If Landlord does not provide Tenant
with an estimate of the total amount of Expenses and Taxes by
January 1 of a calendar year, Tenant shall continue to pay
monthly installments based on the previous year's estimate until
Landlord provides Tenant with the new estimate. Upon delivery of
the new estimate, an adjustment shall be made for any month for
which Tenant paid monthly installments based on the previous
year's estimate. Tenant shall pay Landlord the amount of any
underpayment within 30 days after receipt of the new estimate.
Any overpayment shall be refunded to Tenant within 30 days or
credited against the next due future installment(s) of
Additional Rent.
As soon as is practical following the end of each calendar year,
Landlord shall furnish Tenant with a statement of the actual
amount of Expenses and Taxes for the prior calendar year and
Tenant's Pro Rata Share of the actual amount of Expenses and
Taxes for the prior calendar year. If the estimated amount of
Expenses and Taxes for the prior calendar year is more than the
actual amount of Expenses and Taxes for the prior calendar year,
Landlord shall apply any overpayment by Tenant against
Additional Rent due or next becoming due, provided if the Term
expires before the determination of the overpayment, Landlord
shall refund any overpayment to Tenant after first deducting the
amount of Rent due. If the estimated amount of Expenses and
Taxes for the prior calendar year is less than the actual amount
of Expenses and Taxes for such prior year, Tenant shall pay
Landlord, within 60 days after its receipt of the statement of
Expenses and Taxes, any underpayment for the prior calendar
year.
C. Expenses Defined. "Expenses" means the sum of (i) all direct and
indirect costs and expenses incurred in each calendar year in
connection with operating, maintaining, repairing, and managing
the Premises, Building and the Property, and (ii) the
Building's, the Property's and the Landlord's allocable
percentage of all direct and indirect costs of operating,
maintaining, repairing and managing the Project (including the
exterior Common Areas) imposed upon the Property and the
Buildings, all costs, fees or other amounts payable by Landlord
as the Buildings', the Property's or the Landlord's pro rata
share of expenses to any association established for the benefit
of the Project and/or other properties, for the maintenance of
all common areas, inclusive of related costs which are the
responsibility of any association on behalf of Landlord and
other owners in the Project and/or other properties, and all
fees payable to the company or association, if applicable,
managing the parking areas within the Project, including, but
not limited to:
1. Labor costs, including, wages, salaries, social security
and employment taxes, medical and other types of
insurance, uniforms, training, and retirement and
pension plans.
2. Management fees, the cost of equipping and maintaining a
management office of commercially reasonable size
(additionally, if the personnel in
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such office perform management responsibilities for more
than one property, the cost of such office shall be
equitably allocated by Landlord among the relevant
properties served), accounting and bookkeeping services,
legal fees not attributable to leasing or collection
activity, and other administrative costs. Landlord, by
itself or through an affiliate, shall have the right to
directly perform or provide any services under this
Lease (including management services). However, in no
event shall the management fees for the Building
(expressed as a percentage of gross receipts for the
Building) exceed the prevailing market management fees
(expressed as a percentage of gross receipts), plus 1%
of such fees, for comparable third party management
companies offering comparable management services in
office buildings similar to the Building in class, size,
age and location.
3. The cost of services, including amounts paid to service
providers and the rental or purchase cost of parts,
supplies, tools and equipment which are customarily used
by landlords in the operation of comparable buildings in
the area or otherwise reasonably necessary for the
purpose of complying with Landlord's maintenance
obligations hereunder.
4. Premiums and deductibles paid by Landlord for insurance,
including workers compensation, fire and extended
coverage, earthquake, general liability, rental loss,
elevator, boiler and other insurance customarily carried
from time to time by owners of comparable office
buildings.
5. Electrical Costs (defined below) and charges for water,
gas, steam and sewer, but excluding those charges for
which Landlord is reimbursed by tenants. "Electrical
Costs" means: (a) charges paid by Landlord for
electricity and; (b) costs incurred in connection with
an energy management program for the Building, Property
or Project. Electrical Costs shall be adjusted as
follows: (i) amounts received by Landlord as
reimbursement for above standard electrical consumption
shall be deducted from Electrical Costs; (ii) the cost
of electricity incurred to provide overtime HVAC to
specific tenants (as reasonably estimated by Landlord)
shall be deducted from Electrical Costs; and (iii) if
Tenant is billed directly for the cost of building
standard electricity to the Premises as a separate
charge in addition to Base Rent, or is separately
metered and billed directly by the utility provider, the
cost of electricity to individual tenant spaces in the
Buildings shall be deducted from Electrical Costs.
6. The amortized cost of capital improvements (as
distinguished from replacement parts or components
installed in the ordinary course of business) made to
the Building, Property or Project which are: (a)
performed primarily to reduce operating expense costs or
otherwise improve the operating efficiency of the
Building, Property or Project; or (b) required to comply
with any Laws that are enacted, or first interpreted to
apply to the Building, Property or Project, after the
Commencement Date. The cost of capital improvements
shall be amortized by Landlord over the lesser of the
Payback Period (defined below) or 10 years. The
amortized cost of capital improvements may, at
Landlord's option, include actual or imputed interest at
the rate paid (or which would be paid) by Landlord on
any funds borrowed for such expenditures from an
unaffiliated third-party financial institution (not to
materially exceed the market rate of interest
consistently paid on such borrowed funds for such
purposes). "Payback Period" means the reasonably
estimated period of time that it takes for the cost
savings resulting from a capital improvement to equal
the total cost of the capital improvements.
If Landlord incurs Expenses for the Buildings and the Property
together with one or more other buildings or properties, whether
pursuant to a reciprocal easement agreement, common area
agreement or otherwise, the shared costs and expenses shall be
equitably prorated and apportioned between the Buildings or the
Property and the other buildings or properties. Expenses shall
not include:
(i) the cost of capital improvements (except as set forth
above);
(ii) depreciation;
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(iii) interest (except as provided above for the amortization
of capital improvements);
principal payments of mortgage and other non-operating
debts of Landlord;
(v) the cost of repairs or other work to the extent Landlord
is reimbursed by insurance or condemnation proceeds;
(vi) costs in connection with leasing space in the Buildings,
including brokerage commissions;
lease concessions, including rental abatements and
construction allowances, granted to specific tenants;
costs incurred in connection with the sale, financing
or refinancing of the Buildings;
(ix) fines, interest and penalties incurred due to the late
payment of Taxes (defined in Section IV.D) or Expenses;
costs of repair, maintenance and operation of parking
facilities serving the Building, to the extent such
costs are covered by parking fee revenue received by
Landlord;
organizational expenses associated with the creation
and operation of the entity which constitutes Landlord;
or
any penalties or damages that Landlord pays to Tenant
under this Lease or to other tenants in the Buildings
under their respective leases.
If the Buildings are not at least 95% occupied during any
calendar year or if Landlord is not supplying services to at
least 95% of the total Rentable Square Footage of the Buildings
at any time during a calendar year, Expenses shall, at
Landlord's option, be determined as if the Buildings had been
95% occupied and Landlord had been supplying services to 95% of
the Rentable Square Footage of the Buildings during that
calendar year. The extrapolation of Expenses under this Section
shall be performed by appropriately adjusting the cost of those
components of Expenses that are impacted by changes in the
occupancy of the Buildings.
D. Taxes Defined. "Taxes" shall mean: (1) all real estate taxes and
other assessments on the Buildings, Property and Project,
including, but not limited to, assessments for special
improvement districts and building improvement districts, taxes
and assessments levied in substitution or supplementation in
whole or in part of any such taxes and assessments and the
Building's, Property's and Project's share of any real estate
taxes and assessments under any reciprocal easement agreement,
common area agreement or similar agreement as to the Building,
the Property and/or the Project; (2) all personal property taxes
for property that is owned by Landlord and used in connection
with the operation, maintenance and repair of the Building,
Property or Project; and (3) all costs and fees incurred in
connection with seeking reductions in any tax liabilities
described in (1) and (2), including, without limitation, any
costs incurred by Landlord for compliance, review and appeal of
tax liabilities. Without limitation, Taxes shall not include any
income, capital levy, franchise, capital stock, gift, estate or
inheritance tax. If an assessment is payable in installments,
Taxes for the year shall include the amount of the installment
and any interest due and payable during that year. For all other
real estate taxes, Taxes for that year shall, at Landlord's
election, include either the amount accrued, assessed or
otherwise imposed for the year or the amount due and payable for
that year, provided that Landlord's election shall be applied
consistently throughout the Term. If a change in Taxes is
obtained for any year of the Term, then Taxes for that year will
be retroactively adjusted and Landlord shall provide Tenant with
a credit, if any, based on the adjustment.
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E. Audit Rights.
1. Tenant may, within 120 days after receiving Landlord's
statement of Expenses and Taxes, give Landlord written
notice ("Review Notice") that Tenant intends to review
Landlord's records of the Expenses and/or Taxes for that
calendar year. Within a reasonable time after receipt of
the Review Notice, Landlord shall make all pertinent
records available for inspection that are reasonably
necessary for Tenant to conduct its review. If any
records are maintained at a location other than the
office of the Building, Tenant may either inspect the
records at such other location or pay for the reasonable
cost of copying and shipping the records.
Notwithstanding the foregoing, Landlord agrees that
Tenant may retain a third party agent to review
Landlord's books and records which is not a CPA firm, so
long as the third party agent retained by Tenant shall
have expertise in and familiarity with general industry
practice with respect to the operation of and accounting
for a first class office building; provided, if such
third party agent's compensation is in any way
contingent upon or tied to the financial impact on
Tenant resulting from the review, any obligation of
Landlord herein to "reimburse" Tenant for the "cost" of
Tenant's review shall be limited to the commercially
reasonable hourly charge that Tenant would have incurred
had Tenant retained a third party agent whose
compensation was not contingent upon the financial
impact of the review. Tenant shall be solely responsible
for all costs, expenses and fees incurred for the audit,
unless (i) Landlord accepts Tenant's Objection Notice
and Tenant has overpaid Expenses and Taxes by more than
3% or (ii) Tenant's Proposed Discrepancy Resolution
(described below) is accepted by the arbitrators, as
provided below, in which case such costs, expenses, and
fees shall be paid by Landlord. Within 90 days after the
records are made available to Tenant, Tenant shall have
the right to give Landlord written notice (an "Objection
Notice") stating in reasonable detail any objection to
Landlord's statement of Expenses for that year. If
Tenant fails to give Landlord an Objection Notice within
the 120 day period or fails to provide Landlord with a
Review Notice within the 120 day period described above,
Tenant shall be deemed to have approved Landlord's
statement of Expenses and shall be barred from raising
any claims regarding the Expenses for that year. If
Tenant provides Landlord with a timely Objection Notice,
Landlord and Tenant shall work together in good faith to
resolve any issues raised in Tenant's Objection Notice.
If Landlord and Tenant determine that Expenses for the
calendar year are less than reported, Landlord shall
provide Tenant with a credit against the next
installment of Rent in the amount of the overpayment by
Tenant. Likewise, if Landlord and Tenant determine that
Expenses for the calendar year are greater than
reported, Tenant shall pay Landlord the amount of any
underpayment within 30 days. The records obtained by
Tenant shall be treated as confidential. In no event
shall Tenant be permitted to examine Landlord's records
or to dispute any statement of Expenses unless Tenant
has paid and continues to pay all Rent when due.
2. If Landlord and Tenant, working together in good faith,
are unable within thirty (30) days following Landlord's
receipt of a timely Objection Notice from Tenant to
resolve the discrepancy between Landlord's Statement and
Tenant's review and/or audit ("Discrepancy"), either
party, by written notice (the "Arbitration Notice") to
the other within ten (10) Business Day after the
expiration of such thirty (30) day period, shall have
the right to have the Discrepancy determined by binding
arbitration in accordance with the procedures set forth
below. If Landlord and Tenant cannot agree upon the
resolution of the Discrepancy and neither party elects
to invoke its right of arbitration, Tenant's Objection
Notice shall be deemed to be null and void and of no
further force and effect. If the right of arbitration is
invoked, Landlord and Tenant, within ten (10) Business
Days after the date of the Arbitration Notice, shall
each simultaneously submit to the other, in a sealed
envelope, its good faith analysis and resolution of the
Discrepancy (collectively referred to as the "Proposed
Discrepancy Resolutions"). If the higher of such
Proposed Discrepancy Resolutions is not more than one
hundred five percent (105%) of the lower of such
Proposed Discrepancy Resolutions, then the resolution of
the Discrepancy shall be the average of the two Proposed
Discrepancy
7
Resolutions. If the Discrepancy is not resolved by the
exchange of the proposed Discrepancy Resolutions,
Landlord and Tenant within seven (7) days of the
exchange of the Proposed Discrepancy Resolutions, shall
select as an arbitrator, a mutually acceptable licensed
CPA firm with experience in and familiarity with general
industry practice with respect to the operation of and
accounting for a first class office building in
Bellevue, Washington, and whose compensation shall in no
way be contingent upon or correspond to the financing
impact on Landlord or Tenant resulting from the review
and/or audit. If the parties cannot agree on an
arbitrator, then within a second period of seven (7)
days, each shall select an independent licensed CPA firm
meeting the aforementioned criteria having no existing
relationship with either Landlord or Tenant, and within
a third period of seven (7) days, the two appointed
licensed CPA firm shall select a third licensed CPA firm
meeting the aforementioned criteria, and the third
licensed CPA firm shall determine the resolution of the
Discrepancy. If one party shall fail to make such an
appointment within said second seven (7) day period,
then the licensed CPA firm chosen by the other party
shall be the sole arbitrator. If the two appointed
licensed CPA firms are unable to agree upon such third
licensed CPA firm, then either party, on behalf of both,
may request appointment of such a qualified licensed CPA
firm by the then Chief Judge of the United States
District Court having jurisdiction over the Building,
acting in his private non-judicial capacity. Request for
appointment shall be made in writing with a copy given
to the other party. Each party agrees that said Judge
shall have the power to make the appointment. Once the
arbitrator has been selected as provided for above,
then, as soon thereafter as practicable but in any case
within fourteen (14) days, the arbitrator shall select
one of the two Proposed Discrepancy Resolutions
submitted by the Landlord and Tenant, which must be the
one that is closer to the resolution of the Discrepancy
as determined by the arbitrator. The selection of the
arbitrator shall be rendered in writing to both Landlord
and Tenant and shall be final and binding upon them. If
the arbitrator believes that expert advice would
materially assist him, he may retain one or more
qualified persons to provide such expert advice. Any
fees of any counsel or experts engaged directly by
Landlord or Tenant, however, shall be borne by the party
retaining such counsel or expert.
V. COMPLIANCE WITH LAWS; USE.
The Premises shall be used only for the Permitted Use and for no other
use whatsoever. Tenant shall not use or permit the use of the Premises for any
purpose which is illegal, dangerous to persons or property or which, in
Landlord's reasonable opinion, unreasonably disturbs any other tenants of the
Building or interferes with the operation of the Building. Tenant shall comply
with all Laws, including the Americans with Disabilities Act ("ADA"), regarding
the operation of Tenant's business and the use, condition, configuration and
occupancy of the Premises. Landlord, at its sole cost and expense (except to the
extent properly included in Expenses), shall be responsible for correcting any
violations of Title III of the ADA or applicable building codes with respect to
the Premises and the Common Areas of the Building, provided that Landlord's
obligation with respect to the Premises shall be limited to violations of the
ADA and building codes as enacted and enforced as of the date of this Lease that
arise out of the condition of the Premises prior to the installation of any
furniture, equipment and other personal property of Tenant or the performance of
any Alterations by Tenant. Notwithstanding the foregoing, Landlord shall have
the right to contest any alleged violation in good faith, including, without
limitation, the right to apply for and obtain a waiver or deferment of
compliance, the right to assert any and all defenses allowed by Law and the
right to appeal any decisions, judgments or rulings to the fullest extent
permitted by Law. Landlord, after the exhaustion of any and all rights to appeal
or contest, will make all repairs, additions, alterations or improvements
necessary to comply with the terms of any final order or judgment. Tenant, not
Landlord, shall be responsible for the correction of any violations that arise
out of or in connection with any claims brought under any provision of the ADA
other than Title III, the specific nature of Tenant's business in the Premises
(other than general office use), the acts or omissions of Tenant, its agents,
employees or contractors, Tenant's arrangement of any furniture, equipment or
other property in the Premises, any repairs, alterations, additions or
improvements performed by or on behalf of Tenant and any design or configuration
of the Premises specifically requested by Tenant. Tenant, within 10 days after
receipt, shall provide Landlord with copies of any notices it receives regarding
a violation or alleged violation of any Laws. Tenant shall comply with the rules
and regulations of the Building attached as Exhibit B and such other reasonable
rules and regulations adopted by Landlord from time to time. Tenant shall also
cause its
8
agents, contractors, subcontractors, employees, customers, and subtenants to
comply with all rules and regulations. Landlord shall not knowingly discriminate
against Tenant in Landlord's enforcement of the rules and regulations.
VI. SECURITY DEPOSIT.
A. The initial Security Deposit shall be delivered to Landlord
within 30 days following the mutual execution of this Lease by
Tenant and Landlord and shall be held by Landlord without
liability for interest (unless required by Law) as security for
the performance of Tenant's obligations. The Security Deposit is
not an advance payment of Rent or a measure of Tenant's
liability for damages. Landlord may, from time to time, without
prejudice to any other remedy, use all or a portion of the
Security Deposit to satisfy past due Rent or to cure any uncured
default by Tenant. If Landlord uses the Security Deposit, Tenant
shall on demand restore the Security Deposit to its original
amount. Landlord shall return any unapplied portion of the
Security Deposit to Tenant within 45 days after the later to
occur of: (1) the determination of Tenant's Pro Rata Share of
Expenses and Taxes for the final year of the Term; (2) the date
Tenant surrenders possession of the Premises to Landlord in
accordance with this Lease; or (3) the Termination Date. If
Landlord transfers its interest in the Premises, Landlord may
assign the Security Deposit to the transferee and, following the
assignment, Landlord shall have no further liability for the
return of the Security Deposit. Landlord shall not be required
to keep the Security Deposit separate from its other accounts.
B. 1. The Security Deposit shall be in the form of an
irrevocable letter of credit (the "Letter of Credit"),
which Letter of Credit shall: (a) initially be in the
amount of $677,568.00; (b) be issued on the form
attached hereto as Exhibit F; (c) name Landlord as its
beneficiary; and (d) be drawn on an FDIC insured
financial institution reasonably satisfactory to the
Landlord as of the date of issuance. The Letter of
Credit (and any renewals or replacements thereof) shall
be for a term of not less than 1 year. Tenant agrees
that it shall from time to time, as necessary, whether
as a result of a draw on the Letter of Credit by
Landlord pursuant to the terms hereof or as a result of
the expiration of the Letter of Credit then in effect,
renew or replace the original and any subsequent Letter
of Credit so that a Letter of Credit, in the amount
required hereunder, is in effect until a date which is
at least 60 days after the Termination Date of the
Lease. If Tenant fails to furnish such renewal or
replacement at least 60 days prior to the stated
expiration date of the Letter of Credit then held by
Landlord, Landlord may draw upon such Letter of Credit
and hold the proceeds thereof (and such proceeds need
not be segregated) as a Security Deposit pursuant to the
terms of this Article VI. Any renewal or replacement of
the original or any subsequent Letter of Credit shall
meet the requirements for the original Letter of Credit
as set forth above.
2. At least thirty (30) days prior to the Building 3 Must
Take Space Commencement Date (defined in Section IV of
Exhibit E) the Security Deposit shall increase by
$597,250.00 and Tenant shall either provide Landlord an
additional Letter of Credit in the amount of $597,250.00
("First Additional Letter of Credit") or a replacement
Letter of Credit in the amount of $1,274,818.00 ("First
Replacement Letter of Credit").
3. At least thirty (30) days prior to the 2005 Must Take
Space Commencement Date (defined in Section III of
Exhibit E), the Security Deposit shall increase by
$1,108,054.00, to $2,382,872.00, and Tenant shall either
provide Landlord an additional Letter of Credit in the
amount of $1,108,054.00 (the "Second Additional Letter
of Credit"), or a replacement Letter of Credit in the
amount of $2,382,872.00 (the "Second Replacement Letter
of Credit").
4. Any First or Second Additional Letter of Credit or First
or Second Replacement Letter of Credit shall be subject
to conditions (b), (c) and (d) of Section VI.B.1.,
above. The Additional Letter(s) of Credit, and the
initial Letter of Credit, and/or the Replacement
Letter(s) of Credit, as applicable, may be hereinafter
referred to collectively as the "Letters of Credit."
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C. If Landlord draws on any of the Letters of Credit as permitted
in this Lease, then, within 10 days following demand of
Landlord, Tenant shall restore the amount available under the
Letters of Credit to their original amount by providing Landlord
with an amendment to the applicable Letters of Credit evidencing
that the amount available under the Letters of Credit has been
restored to its original amount. In the alternative, Tenant may
provide Landlord with cash, to be held by Landlord in accordance
with this Article, equal to the restoration amount required
under either of the Letters of Credit. A failure to timely
restore the Letters of Credit shall, for the purposes of Article
XIX below, be deemed a failure to pay an installment of Rent
hereunder.
VII. SERVICES TO BE FURNISHED BY LANDLORD.
A. Landlord agrees to furnish Tenant with the following services:
1. Water service for use in the lavatories on each floor on
which the Premises are located;
2. Heat and air conditioning in season during Normal
Business Hours (and during the hours that would be
Normal Business Hours on President's Day, which, for
purposes of this Section VII.A.2, shall be considered a
"Business Day"), at such temperatures and in such
amounts as are standard for comparable buildings or as
required by governmental authority. Tenant, upon such
advance notice as is reasonably required by Landlord,
shall have the right to receive HVAC service during
hours other than Normal Business Hours; Landlord
currently requires notice (which may be telephonic) of
Tenant's requirement for after-hours HVAC on or before
3:00 p.m. on the day such after-hours HVAC is required
or, if such service is required on a weekend or Holiday,
on or before 3:00 p.m. on the immediately preceding
Business Day. Tenant shall pay Landlord the standard
charge for the additional service as reasonably
determined by Landlord from time to time, provided that
the provision of HVAC service on President's Day as set
forth above shall not be subject to such additional
charge. As of the date hereof, Landlord's charge for
after hours heating and air conditioning service is
$14.00 per hour; Landlord specifically agrees that any
increases in such charge for after-hours HVAC service
shall be limited to increases in (A) the actual costs
incurred by Landlord to supply such after-hours HVAC on
an hourly basis, (B) increased wear and tear and
depreciation of equipment to provide such after-hours
HVAC as reasonably estimated by Landlord in good faith,
and (C) actual out-of-pocket maintenance costs;
3. Maintenance and repair of the Property as described in
Section IX.B.;
4. Janitor service to the Premises on Business Days in
accordance with the cleaning specifications attached
hereto as Exhibit G, or such other reasonably comparable
specifications designated by Landlord from time to time.
If Tenant's use, floor covering or other improvements
require special services in excess of the standard
services for the Building, Tenant shall pay the
additional cost attributable to the special services;
5. Elevator service;
6. Electricity to the Premises for general office use, in
accordance with and subject to the terms and conditions
in Article X; and
7. Such other services as Landlord reasonably determines
are necessary or appropriate for the Building or the
Property.
B. Landlord's failure to furnish, or any interruption or
termination of, services due to the application of Laws, the
failure of any equipment, the performance of repairs,
improvements or alterations, or the occurrence of any event or
cause beyond the reasonable control of Landlord (a "Service
Failure") shall not render Landlord liable to Tenant, constitute
a constructive eviction of Tenant, give rise to an abatement of
Rent, nor relieve Tenant from the obligation to fulfill any
covenant or agreement. However, if the Premises, or a material
portion of the Premises, is made untenantable for a period in
excess of 3 consecutive Business Days as a result of the Service
Failure, then Tenant, as its sole remedy, shall be entitled to
10
receive an abatement of Rent payable hereunder during the period
beginning on the 4th consecutive Business Day of the Service
Failure and ending on the day the service has been restored. If
the entire Premises has not been rendered untenantable by the
Service Failure, the amount of abatement that Tenant is entitled
to receive shall be prorated based upon the percentage of the
Premises rendered untenantable and not used by Tenant. In no
event, however, shall Landlord be liable to Tenant for any loss
or damage, including the theft of Tenant's Property (defined in
Article XV), arising out of or in connection with the failure of
any security services, personnel or equipment.
C. Subject to Force Majeure, to Landlord's reasonable security
procedures, and to Articles XVII and XVIII below, Tenant shall
have access to the Premises 24 hours per day, seven days per
week.
VIII. LEASEHOLD IMPROVEMENTS.
All improvements to the Premises (collectively, "Leasehold
Improvements") shall be owned by Landlord and shall remain upon the Premises
without compensation to Tenant. However, Landlord, by written notice to Tenant
within 30 days prior to the Termination Date, may require Tenant to remove, at
Tenant's expense: (1) Cable (defined in Section IX.A) installed by or for the
exclusive benefit of Tenant and located in the Premises or other portions of the
Building; and (2) any Leasehold Improvements that are performed by or for the
benefit of Tenant following the date of this Lease and, in Landlord's reasonable
judgment, are of a nature that would require removal and repair costs that are
materially in excess of the removal and repair costs associated with standard
office improvements and which are timely so identified by Landlord pursuant to
Section IX.C.2 (below) (collectively referred to as "Required Removables").
Without limitation, it is agreed that Required Removables include internal
stairways, raised floors, personal baths and showers, vaults, rolling file
systems, structural alterations and modifications of any type and, any cafeteria
installed by Tenant. The Required Removables designated by Landlord in
accordance with Section IX.C.2 (below), shall be removed by Tenant before the
Termination Date, provided that upon prior written notice to Landlord, Tenant
may remain in the Premises for up to 5 days after the Termination Date for the
sole purpose of removing the Required Removables. Tenant's possession of the
Premises shall be subject to all of the terms and conditions of this Lease,
including the obligation to pay Rent on a per diem basis at the rate in effect
for the last month of the Term. Tenant shall repair damage caused by the
installation or removal of Required Removables. If Tenant fails to remove any
Required Removables or perform related repairs in a timely manner, Landlord, at
Tenant's expense, may remove and dispose of the Required Removables and perform
the required repairs. Tenant, within 30 days after receipt of an invoice, shall
reimburse Landlord for the reasonable costs incurred by Landlord.
IX. REPAIRS AND ALTERATIONS.
A. Tenant's Repair Obligations. Tenant shall, at its sole cost and
expense, promptly perform all maintenance and repairs to the
Premises that are not Landlord's express responsibility under
this Lease, and shall keep the Premises in good condition and
repair, reasonable wear and tear excepted. Tenant's repair
obligations include, without limitation, repairs to: (1) floor
covering; (2) interior partitions; (3) doors; (4) the interior
side of demising walls; (5) electronic, phone and data cabling
and related equipment (collectively, "Cable") that is installed
by or for the exclusive benefit of Tenant and located in the
Premises or other portions of the Building; (6) supplemental air
conditioning units, private showers and kitchens, including hot
water heaters, plumbing, and similar facilities serving Tenant
exclusively; and (7) Alterations performed by contractors
retained by Tenant, including related HVAC balancing. All work
shall be performed in accordance with the rules and procedures
described in Section IX.C. below. If Tenant fails to make any
repairs to the Premises for more than 30 days after notice from
Landlord (although notice shall not be required if there is an
emergency), Landlord may make the repairs, and Tenant shall pay
the reasonable cost of the repairs to Landlord within 30 days
after receipt of an invoice, together with an administrative
charge in an amount equal to 5% of the cost of the repairs. To
Landlord's knowledge, as of the date of this Lease, items
meeting the description in clause (6) above are the following:
(i) ten (10) supplemental air conditioning units located
throughout the Building (which shall be Tenant's responsibility hereunder to the
extent such units serve the Premises, as the Premises is expanded pursuant to
the provisions of Exhibit E);
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(ii) a pre-action sprinkler system in the existing Data Room
on the fifth (5th) floor of the Building (following the
2005 Must Take Space Commencement Date, the testing and
maintenance of such system, as well as the panel and
smoke/fire detection devices associated therewith, shall
be Tenant's responsibility);
(iii) an external emergency power system connection (including
transfer switches and sub-panels) located adjacent to
the Building loading dock;
(iv) a proprietary internal key/lock system installed by
bSquare in the Building and serving the Premises; and
(v) a proprietary card-key system installed by bSquare in
connection with bSquare's installation of its
proprietary lock system described in clause (iv) above.
B. Landlord's Repair Obligations. Landlord shall keep and maintain
in good repair and working order and make repairs to and perform
maintenance upon: (1) structural elements of the Building; (2)
the Building systems, including but not limited to, mechanical
(including HVAC), electrical, plumbing and fire/life safety
systems serving the Building in general; (3) Common Areas; (4)
the roof of the Building; (5) exterior windows of the Building;
and (6) elevators serving the Building. Landlord shall promptly
make repairs (considering the nature and urgency of the repair)
for which Landlord is responsible.
C. Alterations.
1. Tenant shall not make alterations, additions or improvements to
the Premises or install any Cable in the Premises or other
portions of the Building (collectively referred to as
"Alterations") without first obtaining the written consent of
Landlord in each instance, which consent shall not be
unreasonably withheld or delayed. However, Landlord's consent
shall not be required for any Alteration that satisfies all of
the following criteria (a "Cosmetic Alteration"): (a) is of a
cosmetic nature such as painting, wallpapering, hanging pictures
and installing carpeting; (b) is not visible from the exterior
of the Premises or Building; (c) will not affect the systems or
structure of the Building; and (d) does not require work to be
performed inside the walls or above the ceiling of the Premises.
However, even though consent is not required, the performance of
Cosmetic Alterations shall be subject to all the other
provisions of this Paragraph. Prior to starting work, Tenant
shall furnish Landlord with plans and specifications reasonably
acceptable to Landlord (unless the Alteration is of a nature for
which such plans and specifications are not customarily
prepared); names of contractors reasonably acceptable to
Landlord (provided that Landlord may designate specific
contractors with respect to Building systems); copies of
contracts; necessary permits and approvals; evidence of
contractor's and subcontractor's insurance in amounts reasonably
required by Landlord; and any security for performance that is
reasonably required by Landlord (provided that no such security
for performance shall be required if the cost of the Alteration
is $50,000 or less). Changes to the plans and specifications
must also be submitted to Landlord for its approval. Alterations
shall be constructed in a good and workmanlike manner using
materials of a quality that is at least equal to the quality
designated by Landlord as the minimum standard for the Building.
Landlord may designate reasonable rules, regulations and
procedures for the performance of work in the Building and, to
the extent reasonably necessary to avoid disruption to the
occupants of the Building, shall have the right to designate the
time when Alterations may be performed. Tenant shall reimburse
Landlord within 30 days after receipt of an invoice for
reasonable sums paid by Landlord for third party examination of
Tenant's plans for non-Cosmetic Alterations. In addition, within
30 days after receipt of an invoice from Landlord, Tenant shall
pay Landlord with respect to any non-Cosmetic Alterations
(including the Initial Building 3 Alterations, as defined in
Section IV.D.2 of Exhibit E) Landlord's actual cost to review
such work (which will consist of (x) the cost of Landlord's
construction manager's review of proposed plans, (y) the cost of
the Building architect's review of proposed plans and (z) the
cost of mechanical, electrical and plumbing engineers' review of
12
plans, all without any ▇▇▇▇-up for profit to Landlord); provided
that Tenant's obligation to pay such costs shall not be
applicable to the Refurbishment Work (as defined in Section
III.D.2 of Exhibit E). Upon completion, Tenant shall furnish
"as-built" plans (except for Cosmetic Alterations), completion
affidavits, full and final waivers of lien and receipted bills
covering all labor and materials. Tenant shall assure that the
Alterations comply with all insurance requirements and Laws.
Landlord's approval of an Alteration shall not be a
representation by Landlord that the Alteration complies with
applicable Laws or will be adequate for Tenant's use
2. Landlord shall respond to Tenant's written request to consent
for proposed alterations (a) within one (1) Business Day
following delivery of Tenant's request for consent with respect
to minor nonstructural Alterations, and (b) within three (3)
Business Days following delivery of Tenant's request for consent
with respect to major nonstructural Alterations. Concurrently
with Landlord's consent to any proposed Alterations, including
the Initial Building 3 Alterations, Landlord will notify Tenant
whether and to the extent that any Alterations consented to will
constitute a Required Removeable.
3. Tenant shall have the right to relocate the reception area of
the Premises to the 1st floor after January 1, 2005, and to
modify multi-tenant floor configuration within the Premises into
a "single tenant" configuration, in each case, with Landlord's
consent, which shall not be unreasonably withheld or delayed;
any such work may, in accordance with Section IX.C.2 above,
constitute a Required Removable and Tenant may be required to
restore such reception area and any corridor(s) altered by
Tenant at the expiration or sooner termination of this Lease.
X. USE OF ELECTRICAL SERVICES BY TENANT.
A. Electricity used by Tenant in the Premises shall, at Landlord's
option, be paid for by Tenant either: (1) through inclusion in
Expenses (except as provided in Section X.B. for excess usage);
or (2) by separate charge billed by the applicable utility
company and payable directly by Tenant (the cost of installing a
separate meter pursuant to this clause (2) will be borne by
Landlord, subject to Landlord's ability to include such costs in
Expenses). Electrical service to the Premises may be furnished
by one or more companies providing electrical generation,
transmission and distribution services, and the cost of
electricity may consist of several different components or
separate charges for such services, such as generation,
distribution and stranded cost charges. Landlord shall have the
exclusive right to select any company providing electrical
service to the Premises, to aggregate the electrical service for
the Property and Premises with other buildings, to purchase
electricity through a broker and/or buyers group and to change
the providers and manner of purchasing electricity.
B. Tenant's use of electrical service shall not exceed, either in
voltage, rated capacity, use beyond Normal Business Hours or
overall load, the electrical standard for the Building. For
purposes hereof, the "electrical standard" for the Building is:
(i) a design load of 1.2 ▇▇▇▇▇ per square foot of net usable
floor area for all building standard overhead lighting located
within the Premises which requires a voltage of 480/277 volts;
and (ii) a connected load of 6.0 ▇▇▇▇▇ per square foot of net
usable area for all equipment located and operated within the
Premises which requires a voltage of 120/208 volts single phase
or less, it being understood that electricity required to
operate the base building HVAC system is not included within or
deducted from such 7.2 ▇▇▇▇▇ per square foot described in this
subsection (ii). If Tenant requests permission to consume excess
electrical service, Landlord may condition consent upon
conditions that Landlord reasonably elects (including, without
limitation, the installation of utility service upgrades,
meters, submeters, air handlers or cooling units), and the
additional usage (to the extent permitted by Law), installation
and maintenance costs shall be paid by Tenant. Landlord shall
have the right to separately meter electrical usage for the
Premises and to measure electrical usage by survey or other
commonly accepted methods.
13
XI. ENTRY BY LANDLORD.
Landlord, its agents, contractors and representatives may enter the
Premises to inspect or show the Premises, to clean and make repairs, alterations
or additions to the Premises, and to conduct or facilitate repairs, alterations
or additions to any portion of the Building, including other tenants' premises.
Except in emergencies or to provide janitorial and other Building services after
Normal Business Hours, Landlord shall provide Tenant with reasonable prior
notice of entry into the Premises, which may be given orally. If reasonably
necessary for the protection and safety of Tenant and its employees, Landlord
shall have the right to temporarily close all or a portion of the Premises to
perform repairs, alterations and additions. However, except in emergencies,
Landlord will not close the Premises if the work can reasonably be completed on
weekends and after Normal Business Hours. Entry by Landlord shall not constitute
constructive eviction or entitle Tenant to an abatement or reduction of Rent.
Notwithstanding the foregoing, except in emergency situations as determined by
Landlord, Landlord shall exercise reasonable efforts not to unreasonably
interfere with the conduct of the business of Tenant in the Premises.
XII. ASSIGNMENT AND SUBLETTING.
A. Except in connection with a Permitted Transfer (defined in
Section XII.E. below), Tenant shall not assign, sublease,
transfer or encumber any interest in this Lease or allow any
third party to use any portion of the Premises (collectively or
individually, a "Transfer") without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or
delayed if Landlord does not elect to exercise its termination
rights under Section XII.B below. Without limitation, it is
agreed that Landlord's consent shall not be considered
unreasonably withheld if: (1) the proposed transferee's
financial condition does not meet the criteria Landlord uses to
select Building tenants having similar leasehold obligations;
provided with respect to a subtenant, Landlord shall apply a
standard of whether the proposed subtenant is financially able
to meet its sublease obligations, including its obligation to
pay rent under the sublease, as it becomes due; (2) the proposed
transferee's business is not suitable for the Building
considering the business of the other tenants and the Building's
prestige, or would result in a violation of another existing
tenant's exclusive rights; (3) the proposed transferee is a
governmental agency or occupant of the Building or Property; (4)
Tenant is in default after the expiration of the notice and cure
periods in this Lease; or (5) any portion of the Building or
Premises would likely become subject to additional or different
Laws as a consequence of the proposed Transfer. Notwithstanding
the above, Landlord will not withhold its consent solely because
the proposed subtenant or assignee is an occupant of the
Building if Landlord does not have space available for lease in
the Building that is comparable to the space Tenant desires to
sublet or assign. Landlord shall be deemed to have comparable
space if it has, or will have, space available on any floor of
the Building that is approximately the same size as the space
Tenant desires to sublet or assign as of the proposed
commencement of the proposed sublease or assignment. Any
attempted Transfer in violation of this Article shall, at
Landlord's option, be void. Consent by Landlord to one or more
Transfer(s) shall not operate as a waiver of Landlord's rights
to approve any subsequent Transfers. In no event shall any
Transfer or Permitted Transfer release or relieve Tenant from
any obligation under this Lease.
B.
1. As part of its request for Landlord's consent to a
Transfer, Tenant shall provide Landlord with financial
statements for the proposed transferee, a complete copy
of the proposed assignment, sublease and other
contractual documents and such other information as
Landlord may reasonably request. Landlord shall, by
written notice to Tenant given as soon as reasonably
possible but in any event within 30 days of its receipt
of the required information and documentation, either:
(1) consent to the Transfer by the execution of a
consent agreement in a form reasonably designated by
Landlord or reasonably refuse to consent to the Transfer
in writing; or (2) except in the case of a Permitted
Transfer, exercise, subject to Section 2 below, its
right to terminate this Lease with respect to the entire
Premises, if Tenant is proposing to assign the Lease, or
with respect to the portion of the Premises that Tenant
is proposing to sublet if the proposed sublease term,
with or without renewal options relating thereto, is for
more than 75% of the then remaining Term of this Lease.
14
Tenant shall pay Landlord a review fee equal to the
reasonable actual costs, expenses and attorney fees,
including costs attributable to time expended by in
house counsel, accountants or other personnel of
Landlord, incurred for Landlord's review of any
Permitted Transfer or requested Transfer, including the
preparation and negotiation of any consent required of
Landlord related thereto.
2. Notwithstanding the above, if Landlord would be entitled
to terminate this Lease with respect to all or any
portion of the Premises in connection with a proposed
Transfer, Tenant, prior to entering into a sublease or
assignment, shall have the right to advise Landlord (the
"Prior Notice") of its intention to sublet the Premises
or assign this Lease. In the Prior Notice, Tenant shall
describe whether Tenant intends to assign its interest
under the Lease or whether Tenant intends to sublease
all or a portion of the Premises (and the portion of the
Premises Tenant intends to sublease), and the expected
effective date of the proposed assignment or sublease.
Landlord, by providing notice within 30 days after
receipt of the Prior Notice, shall have the right to
terminate this Lease, effective as of the effective date
set forth in the Prior Notice, with respect to the
Premises, if Tenant intends to assign its interest under
the Lease, or with respect to the space that Tenant
intends to sublet if Tenant intends to sublease all or a
portion of the Premises. If Landlord fails to exercise
its right to terminate within 30 days after the Prior
Notice, Landlord may not elect to terminate in
connection with a proposed assignment or subletting of
the space described in the Prior Notice.
C. Tenant shall pay Landlord 50% of all rent and other
consideration which Tenant receives as a result of a Transfer
(other than a Permitted Transfer) that is in excess of the Rent
payable to Landlord for the portion of the Premises and Term
covered by the Transfer. Tenant shall pay Landlord for
Landlord's share of any excess within 30 days after Tenant's
receipt of such excess consideration. Tenant may deduct from the
excess all reasonable and customary expenses directly incurred
by Tenant attributable to the Transfer (other than Landlord's
review fee), including brokerage fees, legal fees and
construction costs. If Tenant is in Monetary Default (defined in
Section XIX.A. below), Landlord may require that all sublease
payments be made directly to Landlord, in which case Tenant
shall receive a credit against Rent in the amount of any
payments received (less Landlord's share of any excess).
D. Except as provided below with respect to a Permitted Transfer,
if Tenant is a corporation, limited liability company,
partnership, or similar entity, and if the entity which owns or
controls a majority of the voting shares/rights at any time
changes for any reason (including but not limited to a merger,
consolidation or reorganization), such change of ownership or
control shall constitute a Transfer. The foregoing shall not
apply so long as Tenant is an entity whose outstanding stock is
listed on a recognized security exchange, or if at least 80% of
its voting stock is owned by another entity, the voting stock of
which is so listed.
E. Tenant may assign its entire interest under this Lease to a
successor to Tenant by purchase, merger, consolidation or
reorganization without the consent of Landlord, provided that
all of the following conditions are satisfied (a "Permitted
Transfer"): (1) Tenant is not in default under this Lease; (2)
Tenant's successor shall own all or substantially all of the
assets of Tenant; (3) Tenant's successor shall have a net worth
which is at least equal to Tenant's net worth as of the day
prior to the proposed purchase, merger, consolidation or
reorganization; (4) [INTENTIONALLY OMITTED]; and (5) Tenant
shall give Landlord written notice at least 10 days prior to the
effective date of the proposed purchase, merger, consolidation
or reorganization. Tenant's notice to Landlord shall include
information and documentation showing that each of the above
conditions has been satisfied. If requested by Landlord,
Tenant's successor shall sign a commercially reasonable form of
assumption agreement.
F. Notwithstanding anything in this Article XII to the contrary,
Tenant shall be permitted from time to time to permit its
contractors or venture partners (including employees of same)
("Approved Users") to temporarily occupy space within the
Premises in order to make such entities more accessible to
Tenant, provided that (a) Tenant does not separately demise such
space and the Approved Users utilize, in common with Tenant, one
common entryway to the Premises as well as
15
certain shared central services, such as reception, photocopying
and the like; (b) the Approved Users shall not occupy, in the
aggregate, more than 20% of the rentable area in the Premises;
(c) the Approved Users occupy space in the Premises for the
Permitted Use and for no other purpose; (d) all Approved Users
shall occupy space in the Premises only so long as they continue
to be contractors or venture partners of Tenant; and (e) Tenant
notifies Landlord, in writing, of the identity of any such
Approved Users prior to occupancy of any portion of the Premises
by such Approved User$. If any Approved Users occupy any portion
of the Premises as described herein, it is agreed that (i) the
Approved Users must comply with all provisions of this Lease,
and a default by any Approved Users shall be deemed a default by
Tenant under this Lease; (ii) all notices required of Landlord
under this Lease shall be forwarded only to Tenant in accordance
with the terms of this Lease and in no event shall Landlord be
required to send any notices to any Approved Users; (iii) in no
event shall any use or occupancy of any portion of the Premises
by any Approved User release or relieve Tenant from any of its
obligations under this Lease; (iv) the Approved User and its
employees, contractors and invitees visiting or occupying space
in the Premises shall be deemed contractors of Tenant for
purposes of Tenant's indemnification obligations in Article XIV;
and (v) in no event shall the occupancy of any portion of the
Premises by Approved Users be deemed to create a landlord/tenant
relationship between Landlord and such Approved Users, and, in
all instances, Tenant shall be considered the sole tenant under
the Lease notwithstanding the occupancy of any portion of the
Premises by the Approved Users.
LIENS.
Tenant shall not permit mechanic's or other liens to be placed upon the
Premises, Building, Property or Project, or Tenant's leasehold interest in
connection with any work or service done or purportedly done by or for benefit
of Tenant. If a lien is so placed, Tenant shall, within 10 days of notice from
Landlord of the filing of the lien, fully discharge the lien by settling the
claim which resulted in the lien or by bonding or insuring over the lien in the
manner prescribed by the applicable lien Law. If Tenant fails to discharge the
lien, then, in addition to any other right or remedy of Landlord, Landlord may
bond or insure over the lien or otherwise discharge the lien. Tenant shall
reimburse Landlord for any amount paid by Landlord to bond or insure over the
lien or discharge the lien, including, without limitation, reasonable attorneys'
fees (if and to the extent permitted by Law) within 30 days after receipt of an
invoice from Landlord.
INDEMNITY AND WAIVER OF CLAIMS.
A. Except to the extent caused by the negligence or willful
misconduct of Landlord or any Landlord Related Parties (defined
below), Tenant shall indemnify, defend and hold Landlord, its
trustees, members, principals, beneficiaries, partners,
officers, directors, employees, Mortgagee(s) (defined in Article
XXVI) and agents ("Landlord Related Parties") harmless against
and from all liabilities, obligations, damages, penalties,
claims, actions, costs, charges and expenses, including, without
limitation, reasonable attorneys' fees and other professional
fees (if and to the extent permitted by Law), which may be
imposed upon, incurred by or asserted against Landlord or any of
the Landlord Related Parties and arising out of or in connection
with any damage or injury occurring in the Premises or any acts
or omissions (including violations of Law) of Tenant, the Tenant
Related Parties (defined below) or any of Tenant's transferees,
contractors or licensees.
B. Except to the extent caused by the negligence or willful
misconduct of Tenant or any Tenant Related Parties (defined
below), Landlord shall indemnify, defend and hold Tenant, its
trustees, members, principals, beneficiaries, partners,
officers, directors, employees and agents ("Tenant Related
Parties") harmless against and from all liabilities,
obligations, damages, penalties, claims, actions, costs, charges
and expenses, including, without limitation, reasonable
attorneys' fees and other professional fees (if and to the
extent permitted by Law), which may be imposed upon, incurred by
or asserted against Tenant or any of the Tenant Related Parties
and arising out of or in connection with the acts or omissions
(including violations of Law) of Landlord, the Landlord Related
Parties or any of Landlord's contractors.
C. Landlord and the Landlord Related Parties shall not be liable
for, and Tenant waives, all claims for loss or damage to
Tenant's business or loss, theft or damage to Tenant's Property
or the property of any person claiming by, through
16
or under Tenant resulting from: (1) wind or weather; (2) the
failure of any sprinkler, heating or air-conditioning equipment,
any electric wiring or any gas, water or steam pipes; (3) the
backing up of any sewer pipe or downspout; (4) the bursting,
leaking or running of any tank, water closet, drain or other
pipe; (5) water, snow or ice upon or coming through the roof,
skylight, stairs, doorways, windows, walks or any other place
upon or near the Building; (6) any act or omission of any party
other than Landlord or Landlord Related Parties; and (7) any
causes not reasonably within the control of Landlord. Tenant
shall insure itself against such losses under Article XV below.
Notwithstanding the foregoing, except as provided in Article XVI
to the contrary, Tenant shall not be required to waive any
claims against Landlord (other than for loss or damage to
Tenant's business) where such loss or damage is due to the
negligence or willful misconduct of Landlord or any Landlord
Related Parties. Nothing herein shall be construed as to
diminish the repair and maintenance obligations of Landlord
contained elsewhere in this Lease.
INSURANCE.
Tenant shall carry and maintain the following insurance ("Tenant's
Insurance"), at its sole cost and expense: (1) Commercial General Liability
Insurance applicable to the Premises and its appurtenances providing, on an
occurrence basis, a minimum combined single limit of $2,000,000.00; (2) All Risk
Property/Business Interruption Insurance, including flood and earthquake,
written at replacement cost value and with a replacement cost endorsement
covering all of Tenant's trade fixtures, equipment, furniture and other personal
property within the Premises ("Tenant's Property"); (3) Workers' Compensation
Insurance as required by the state in which the Premises is located and in
amounts as may be required by applicable statute; and (4) Employers Liability
Coverage of at least $1,000,000.00 per occurrence. Any company writing any of
Tenant's Insurance shall have an A.M. Best rating of not less than A-VIII. All
Commercial General Liability Insurance policies shall name Tenant as a named
insured and Landlord (or any successor), Equity Office Properties Trust, a
Maryland real estate investment trust, EOP Operating Limited Partnership, a
Delaware limited partnership, and their respective members, principals,
beneficiaries, partners, officers, directors, employees, and agents, and other
designees of Landlord as the interest of such designees shall appear, as
additional insureds. All policies of Tenant's Insurance shall contain
endorsements that the insurer(s) shall give Landlord and its designees at least
30 days' advance written notice of any change, cancellation, termination or
lapse of insurance. Tenant shall provide Landlord with a certificate of
insurance evidencing Tenant's Insurance prior to the earlier to occur of the
Commencement Date or the date Tenant is provided with possession of the Premises
for any reason, and upon renewals at least 15 days prior to the expiration of
the insurance coverage. Landlord shall maintain so called All Risk property
insurance on the Building at replacement cost value, as reasonably estimated by
Landlord, and Commercial General Liability Insurance applicable to the Building
and the Property, providing, on an occurrence basis, a minimum combined limit of
$2,000,000. Except as specifically provided to the contrary, the limits of
either party's' insurance shall not limit such party's liability under this
Lease.
SUBROGATION.
Notwithstanding anything in this Lease to the contrary, Landlord and
Tenant hereby waive and shall cause their respective insurance carriers to waive
any and all rights of recovery, claim, action or causes of action against the
other and their respective trustees, principals, beneficiaries, partners,
officers, directors, agents, and employees, for any loss or damage that may
occur to Landlord or Tenant or any party claiming by, through or under Landlord
or Tenant, as the case may be, with respect to Tenant's Property, the Building,
the Premises, any additions or improvements to the Building or Premises, or any
contents thereof, including all rights of recovery, claims, actions or causes of
action arising out of the negligence of Landlord or any Landlord Related Parties
or the negligence of Tenant or any Tenant Related Parties, which loss or damage
is (or would have been, had the insurance required by this Lease been carried)
covered by insurance.
CASUALTY DAMAGE.
A. If all or any part of the Premises is damaged by fire or other
casualty, Tenant shall immediately notify Landlord in writing.
During any period of time that all or a material portion of the
Premises is rendered untenantable as a result of a fire or other
casualty, the Rent and Additional Rent shall ▇▇▇▇▇ for the
portion of the Premises that is untenantable and not used by
Tenant. Landlord shall have the right to terminate this Lease
if: (1) the Building shall be damaged so that, in Landlord's
reasonable judgment, substantial alteration or reconstruction of
the
17
Building shall be required (whether or not the Premises has been
damaged) and such alteration or reconstruction shall require in
excess of 270 days to complete; (2) Landlord is not permitted by
Law to rebuild the Building in substantially the same form as
existed before the fire or casualty; (3) the Premises have been
materially damaged and there is less than 2 years of the Term
remaining on the date of the casualty; (4) any Mortgagee
requires that the insurance proceeds be applied to the payment
of the mortgage debt; or (5) a material uninsured loss to the
Building occurs, and such loss was not required to be insured
against by Landlord pursuant to the provisions of this Lease.
Landlord may exercise its right to terminate this Lease by
notifying Tenant in writing within 90 days after the date of the
casualty. If Landlord does not terminate this Lease, Landlord
shall commence and proceed with reasonable diligence to repair
and restore the Building and the Leasehold Improvements
(excluding any Alterations that were performed by Tenant in
violation of this Lease). However, in no event shall Landlord be
required to spend materially more than the insurance proceeds
received by Landlord (plus any deductible payment). Landlord
shall not be liable for any loss or damage to Tenant's Property
or to the business of Tenant resulting in any way from the fire
or other casualty or from the repair and restoration of the
damage. Landlord and Tenant hereby waive the provisions of any
Law relating to the matters addressed in this Article, and agree
that their respective rights for damage to or destruction of the
Premises shall be those specifically provided in this Lease.
B. If all or any portion of the Premises shall be made untenantable
by fire or other casualty, Landlord shall, with reasonable
promptness, cause an architect or general contractor selected by
Landlord to provide Landlord and Tenant with a written estimate
of the amount of time required to substantially complete the
repair and restoration of the Premises and make the Premises
tenantable again, using standard working methods ("Completion
Estimate"). If the Completion Estimate indicates that the
Premises cannot be made tenantable within 270 days from the date
the repair and restoration is started, then regardless of
anything in Section XVII.A above to the contrary, either party
shall have the right to terminate this Lease by giving written
notice to the other of such election within 10 days after
receipt of the Completion Estimate. Tenant, however, shall not
have the right to terminate this Lease if the fire or casualty
was caused by the intentional misconduct of Tenant, Tenant
Related Parties or any of Tenant's transferees, contractors or
licensees.
XVIII. CONDEMNATION.
Either party may terminate this Lease if the whole or any material part
of the Premises shall be taken or condemned for any public or quasi-public use
under Law, by eminent domain or private purchase in lieu thereof (a "Taking").
Landlord shall also have the right to terminate this Lease if there is a Taking
of any portion of the Building or Property which would leave the remainder of
the Building unsuitable for use as an office building in a manner comparable to
the Building's use prior to the Taking. In order to exercise its right to
terminate the Lease, Landlord or Tenant, as the case may be, must provide
written notice of termination to the other within 45 days after the terminating
party first receives notice of the Taking. Any such termination shall be
effective as of the date the physical taking of the Premises or the portion of
the Building or Property occurs. If this Lease is not terminated, the Rentable
Square Footage of the Buildings, the Rentable Square Footage of the Premises,
the Buildings' allocable percentage and Tenant's Pro Rata Share shall, if
applicable, be appropriately adjusted. In addition, Rent for any portion of the
Premises taken or condemned shall be abated during the unexpired Term of this
Lease effective when the physical taking of the portion of the Premises occurs.
All compensation awarded for a Taking, or sale proceeds, shall be the property
of Landlord, any right to receive compensation or proceeds being expressly
waived by Tenant. However, Tenant may file a separate claim at its sole cost and
expense for Tenant's Property and Tenant's reasonable relocation expenses,
provided the filing of the claim does not diminish the award which would
otherwise be receivable by Landlord.
XIX. EVENTS OF DEFAULT.
Tenant shall be considered to be in default of this Lease upon the
occurrence of any of the following events of default:
A. Tenant's failure to pay when due all or any portion of the Rent,
if the failure continues for 5 Business Days after written
notice to Tenant ("Monetary Default").
18
B. Tenant's failure (other than a Monetary Default) to comply with
any term, provision or covenant of this Lease, if the failure is
not cured within 10 Business Days after written notice to
Tenant. However, if Tenant's failure to comply cannot reasonably
be cured within 10 Business Days, Tenant shall be allowed
additional time (not to exceed 90 days) as is reasonably
necessary to cure the failure so long as: (1) Tenant commences
to cure the failure within 10 Business Days, and (2) Tenant
diligently pursues a course of action that will cure the failure
and bring Tenant back into compliance with the Lease. However,
if Tenant's failure to comply creates a hazardous condition, the
failure must be cured immediately upon notice to Tenant. In
addition, if Landlord provides Tenant with notice of Tenant's
failure to comply with any particular term, provision or
covenant of the Lease on 3 occasions during any 12 month period,
Tenant's subsequent violation of such term, provision or
covenant shall, at Landlord's option, be an incurable event of
default by Tenant.
C. Tenant or any Guarantor becomes insolvent, makes a transfer in
fraud of creditors or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts
when due.
D. The leasehold estate is taken by process or operation of Law.
E. [INTENTIONALLY OMITTED]
F. [INTENTIONALLY OMITTED]
XX. REMEDIES.
A. Upon any default, Landlord shall have the right without notice
or demand (except as provided in Article XIX) to pursue any of
its rights and remedies at Law or in equity, including any one
or more of the following remedies:
1. Terminate this Lease, in which case Tenant shall
immediately surrender the Premises to Landlord. If
Tenant fails to surrender the Premises, Landlord may, in
compliance with applicable Law and without prejudice to
any other right or remedy, enter upon and take
possession of the Premises and expel and remove Tenant,
Tenant's Property and any party occupying all or any
part of the Premises. Tenant shall pay Landlord on
demand the amount of all past due Rent and other losses
and damages which Landlord may suffer as a result of
Tenant's default, whether by Landlord's inability to
relet the Premises on satisfactory terms or otherwise,
including, without limitation, all Costs of Reletting
(defined below) and any deficiency that may arise from
reletting or the failure to relet the Premises. "Costs
of Reletting" shall include all costs and expenses
incurred by Landlord in reletting or attempting to relet
the Premises, including, without limitation, reasonable
legal fees, brokerage commissions, the cost of
alterations and the value of other concessions or
allowances granted to a new tenant.
2. Terminate Tenant's right to possession of the Premises
and, in compliance with applicable Law, expel and remove
Tenant, Tenant's Property and any parties occupying all
or any part of the Premises. Landlord may (but shall not
be obligated to) relet all or any part of the Premises,
without notice to Tenant, for a term that may be greater
or less than the balance of the Term and on such
conditions (which may include concessions, free rent and
alterations of the Premises) and for such uses as
Landlord in its absolute discretion shall determine.
Landlord may collect and receive all rents and other
income from the reletting. Tenant shall pay Landlord on
demand all past due Rent, all Costs of Reletting and any
deficiency arising from the reletting or failure to
relet the Premises. Landlord shall not be responsible or
liable for the failure to relet all or any part of the
Premises or for the failure to collect any Rent. The
re-entry or taking of possession of the Premises shall
not be construed as an election by Landlord to terminate
this Lease unless a written notice of termination is
given to Tenant.
3. In lieu of calculating damages under Sections XX.A.1 or
XX.A.2 above, Landlord may elect to receive as damages
the sum of (a) all Rent accrued through the date of
termination of this Lease or Tenant's right to
19
possession, and (b) an amount equal to the total Rent
that Tenant would have been required to pay for the
remainder of the Term discounted to present value at the
Prime Rate (defined in Section XX.B. below) then in
effect, minus the then present fair rental value of the
Premises for the remainder of the Term, similarly
discounted, after deducting all anticipated Costs of
Reletting.
B. Unless expressly provided in this Lease, the repossession or
re-entering of all or any part of the Premises shall not relieve
Tenant of its liabilities and obligations under the Lease. No
right or remedy of Landlord shall be exclusive of any other
right or remedy. Each right and remedy shall be cumulative and
in addition to any other right and remedy now or subsequently
available to Landlord at Law or in equity. If Landlord declares
Tenant to be in default, Landlord shall be entitled to receive
interest on any unpaid item of Rent at a rate equal to the Prime
Rate plus 4%. For purposes hereof, the "Prime Rate" shall be the
per annum interest rate publicly announced as its prime or base
rate by a federally insured bank selected by Landlord in the
state in which the Building is located. Forbearance by Landlord
to enforce one or more remedies shall not constitute a waiver of
any default.
XXI. LIMITATION OF LIABILITY.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED
TO THE INTEREST OF LANDLORD IN THE PROPERTY. TENANT SHALL LOOK SOLELY TO
LANDLORD'S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD
AGAINST LANDLORD. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE
PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY. BEFORE FILING SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S)
(DEFINED IN ARTICLE XXVI BELOW) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES
(DEFINED IN ARTICLE XXVI BELOW) ON THE PROPERTY, BUILDING OR PREMISES, NOTICE
AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT. FOR PURPOSES HEREOF, "INTEREST
OF LANDLORD IN THE PROPERTY" SHALL INCLUDE RENTS DUE FROM TENANTS, INSURANCE
PROCEEDS, NET SALES PROCEEDS AND PROCEEDS FROM CONDEMNATION OR EMINENT DOMAIN
PROCEEDINGS (PRIOR TO THE DISTRIBUTION OF SAME TO ANY PARTNER OR SHAREHOLDER OF
LANDLORD OR ANY OTHER THIRD PARTY).
XXII. NO WAIVER.
Either party's failure to declare a default immediately upon its
occurrence, or delay in taking action for a default shall not constitute a
waiver of the default, nor shall it constitute an estoppel. Either party's
failure to enforce its rights for a default shall not constitute a waiver of its
rights regarding any subsequent default. Receipt by Landlord of Tenant's keys to
the Premises shall not constitute an acceptance or surrender of the Premises.
XXIII. QUIET ENJOYMENT.
Tenant shall, and may peacefully have, hold and enjoy the Premises,
subject to the terms of this Lease, provided Tenant pays the Rent and fully
performs all of its covenants and agreements. This covenant and all other
covenants of Landlord shall be binding upon Landlord and its successors only
during its or their respective periods of ownership of the Building, and shall
not be a personal covenant of Landlord or the Landlord Related Parties.
XXIV. RELOCATION. [INTENTIONALLY OMITTED]
XXV. HOLDING OVER.
Except for any permitted occupancy by Tenant under Article VIII, if
Tenant fails to surrender the Premises at the expiration or earlier termination
of this Lease, occupancy of the Premises after the termination or expiration
shall be that of a tenancy at sufferance. Tenant's occupancy of the Premises
during the holdover shall be subject to all the terms and provisions of this
Lease and Tenant shall pay an amount (on a per month basis without reduction for
partial months during the holdover) equal to 150% of the greater of: (1) the sum
of the Base Rent and Additional Rent due for. the period immediately preceding
the holdover; or (2) the fair market gross rental for the Premises as reasonably
determined by Landlord. No holdover by Tenant or payment by Tenant after the
expiration or early termination of this Lease shall be construed to
20
extend the Term or prevent Landlord from immediate recovery of possession of the
Premises by summary proceedings or otherwise. In addition to the payment of the
amounts provided above, if Landlord is unable to deliver possession of the
Premises to a new tenant, or to perform improvements for a new tenant, as a
result of Tenant's holdover and Tenant fails to vacate the Premises within 15
days after Landlord notifies Tenant of Landlord's inability to deliver
possession, or perform improvements, Tenant shall be liable to Landlord for all
damages, including, without limitation, consequential damages, that Landlord
suffers from the holdover.
XXVI. SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE.
Tenant accepts this Lease subject and subordinate to any mortgage(s),
deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising
upon the Premises, the Building, the Property or the Project, and to renewals,
modifications, refinancings and extensions thereof (collectively referred to as
a "Mortgage"). The party having the benefit of a Mortgage shall be referred to
as a "Mortgagee". Landlord represents to Tenant that, as of the date of this
Lease, there is no Mortgage encumbering the Building. This clause shall be
self-operative, but upon request from a Mortgagee, Tenant shall execute a
commercially reasonable subordination agreement in favor of the Mortgagee. In
lieu of having the Mortgage be superior to this Lease, a Mortgagee shall have
the right at any time to subordinate its Mortgage to this Lease. If requested by
a successor-in-interest to all or a part of Landlord's interest in the Lease,
Tenant shall, without charge, attorn to the successor-in-interest. Landlord and
Tenant shall each, within 10 days after receipt of a written request from the
other, execute and deliver an estoppel certificate to those parties as are
reasonably requested by the other (including a Mortgagee or prospective
purchaser). The estoppel certificate shall include a statement certifying that
this Lease is unmodified (except as identified in the estoppel certificate) and
in full force and effect, describing the dates to which Rent and other charges
have been paid, representing that, to such party's actual knowledge, there is no
default (or stating the nature of the alleged default) and indicating other
matters with respect to the Lease that may reasonably be requested.
Notwithstanding the foregoing in this Article to the contrary, as a condition
precedent to the future subordination of this Lease to a future Mortgage,
Landlord shall be required to provide Tenant with a non-disturbance,
subordination, and attornment agreement in favor of Tenant from any Mortgagee
who comes into existence after the Commencement Date. Such non-disturbance,
subordination, and attornment agreement in favor of Tenant shall provide that,
so long as Tenant is paying the Rent due under the Lease and is not otherwise in
default under the Lease beyond any applicable cure period, its right to
possession and the other terms of the Lease shall remain in full force and
effect. Such non-disturbance, subordination, and attornment agreement may
include other commercially reasonable provisions in favor of the Mortgagee,
including, without limitation, additional time on behalf of the Mortgagee to
cure defaults of the Landlord and provide that (a) neither Mortgagee nor any
successor-in-interest shall be bound by (i) any payment of the Base Rent,
Additional Rent, or other sum due under this Lease for more than 1 month in
advance or (ii) any amendment or modification of the Lease made without the
express written consent of Mortgagee or any successor-in-interest; (b) neither
Mortgagee nor any successor-in-interest will be liable for (i) any act or
omission or warranties of any prior landlord (including Landlord), (ii) the
breach of any warranties or obligations relating to construction of improvements
on the Property or any tenant finish work performed or to have been performed by
any prior landlord (including Landlord), or (iii) the return of any security
deposit, except to the extent such deposits have been received by Mortgagee; and
(c) neither Mortgagee nor any successor-in-interest shall be subject to any
offsets or defenses which Tenant might have against any prior landlord
(including Landlord).
XXVII. ATTORNEYS' FEES.
If either party institutes a suit against the other for violation of or
to enforce any covenant or condition of this Lease, or if either party
intervenes in any suit in which the other is a party to enforce or protect its
interest or rights, the prevailing party shall be entitled to all of its costs
and expenses, including, without limitation, reasonable attorneys' fees.
XXVIII. NOTICE.
If a demand, request, approval, consent or notice (collectively referred
to as a "notice") shall or may be given to either party by the other, the notice
shall be in writing and delivered by hand or sent by registered or certified
mail with return receipt requested, or sent by overnight or same day courier
service at the party's respective Notice Address(es) set forth in Article I,
except that if Tenant has vacated the Premises (or if the Notice Address for
Tenant is other than the Premises, and Tenant has vacated such address) without
providing Landlord a new Notice Address, Landlord may serve notice in any manner
described in this Article or in any other manner permitted by Law. Each notice
shall be deemed to have been received or given on the earlier to occur of actual
delivery or the date on which delivery is refused, or, if Tenant has
21
vacated the Premises or the other Notice Address of Tenant without providing a
new Notice Address, 3 days after notice is deposited in the U.S. mail or with a
courier service in the manner described above. Either party may, at any time,
change its Notice Address (other than to a post office box address) by giving
the other party written notice of the new address in the manner described in
this Article.
EXCEPTED RIGHTS.
This Lease does not grant any rights to light or air over or about the
Building. Landlord excepts and reserves exclusively to itself the use of: (1)
roofs, (2) telephone, electrical and janitorial closets, (3) equipment rooms,
Building risers or similar areas that are used by Landlord for the provision of
Building services, (4) rights to the land and improvements below the floor of
the Premises, (5) the improvements and air rights above the Premises, (6) the
improvements and air rights outside the demising walls of the Premises, and (7)
the areas within the Premises used for the installation of utility lines and
other installations serving occupants of the Building, the Property and the
Project. Landlord has the right to change the Building's name or address;
provided that, so long as Tenant is not in default hereunder, Landlord shall not
(i) rent any space in Building 3 or (so long as Tenant occupies at least 50,000
rentable square feet of space in Building 4) Building 4 to, or (ii) rename
Building 3 or (so long as Tenant occupies at least 50,000 rentable square feet
of space in Building 4) Building 4, using the names of, any of the following
entities: 1. Orbitz, 2. Sabre (Travelocity) or 3. the travel division of
American Express ("Competitors"). Tenant will have the right, no more often than
once in any six (6) month period, and only if the Substitution Conditions
(defined below) are then applicable, to designate a substitute entity for one
(1) of the Competitors, provided that such entity is a competitor of Tenant's in
the travel industry with a market share in such industry, as demonstrated to
Landlord's reasonable satisfaction, which places such entity as one of the five
(5) largest competitors in such industry. As used herein, the "Substitution
Conditions" shall mean that (x) Tenant is not in default hereunder, and (y)
Tenant has not subleased in excess of fifty percent (50%) of the Premises (other
than pursuant to a Permitted Transfer or to Approved Users). The foregoing
limitations on Landlord's leasing activity shall not apply to (A) any Competitor
occupying its premises directly or (as an assignee, sublessee, licensee or
concessionaire) indirectly under a lease that was executed prior to the later to
occur of (i) the execution of this Lease or (ii) the designation of such entity
as a Competitor (a "Prior Lease") or to a renewal or extension of a Prior Lease,
or (B) to the subleasing by, or assignment of any lease by, any occupant of the
Buildings. Landlord also has the right to make such other changes to the
Property and Building as Landlord deems appropriate, provided the changes do not
materially affect Tenant's ability to use the Premises for the Permitted Use.
Landlord shall also have the right (but not the obligation) to temporarily close
the Building if Landlord reasonably determines that there is an imminent danger
of significant damage to the Building or of personal injury to Landlord's
employees or the occupants of the Building. The circumstances under which
Landlord may temporarily close the Building shall include, without limitation,
electrical interruptions, hurricanes and civil disturbances. A closure of the
Building under such circumstances shall not constitute a constructive eviction
nor entitle Tenant to an abatement or reduction of Rent.
SURRENDER OF PREMISES.
At the expiration or earlier termination of this Lease or Tenant's right
of possession, Tenant shall remove Tenant's Property (defined in Article XV)
from the Premises, and quit and surrender the Premises to Landlord, broom clean,
and in good order, condition and repair, ordinary wear and tear excepted. Tenant
shall also be required to remove the Required Removables in accordance with
Article VIII. If Tenant fails to remove any of Tenant's Property within 2 days
after the termination of this Lease or of Tenant's right to possession,
Landlord, at Tenant's sole cost and expense, shall be entitled (but not
obligated) to remove and store Tenant's Property. Landlord shall not be
responsible for the value, preservation or safekeeping of Tenant's Property.
Tenant shall pay Landlord, upon demand, the expenses and storage charges
incurred for Tenant's Property. In addition, if Tenant fails to remove Tenant's
Property from the Premises or storage, as the case may be, within 30 days after
written notice, Landlord may deem all or any part of Tenant's Property to be
abandoned, and title to Tenant's Property shall be deemed to be immediately
vested in Landlord.
XXXI. MISCELLANEOUS.
A. This Lease and the rights and obligations of the parties shall
be interpreted, construed and enforced in accordance with the
Laws of the state in which the Building is located and Landlord
and Tenant hereby irrevocably consent to the jurisdiction and
proper venue of such state. If any term or provision of this
Lease shall to any extent be invalid or unenforceable, the
remainder of this Lease shall
22
not be affected, and each provision of this Lease shall be valid
and enforced to the fullest extent permitted by Law. The
headings and titles to the Articles and Sections of this Lease
are for convenience only and shall have no effect on the
interpretation of any part of the Lease.
B. Tenant shall not record this Lease or any memorandum without
Landlord's prior written consent.
C. Landlord and Tenant hereby waive any right to trial by jury in
any proceeding based upon a breach of this Lease.
D. Whenever a period of time is prescribed for the taking of an
action by Landlord or Tenant, the period of time for the
performance of such action shall be extended by the number of
days that the performance is actually delayed due to strikes,
acts of God, shortages of labor or materials, war, civil
disturbances and other causes beyond the reasonable control of
the performing party ("Force Majeure"). However, events of Force
Majeure shall not extend any period of time for the payment of
Rent or other sums payable by either party or any period of time
for the written exercise of an option or right by either party.
E. Landlord shall have the right to transfer and assign, in whole
or in part, all of its rights and obligations under this Lease
and in the Building, Property and/or Project referred to herein,
and upon such transfer Landlord shall be released from any
further obligations hereunder, and Tenant agrees to look solely
to the successor in interest of Landlord for the performance of
such obligations.
F. 1. Tenant represents that it has dealt directly with and
only with the Broker as a broker in connection with this
Lease. Tenant shall indemnify and hold Landlord and the
Landlord Related Parties harmless from all claims of any
other brokers claiming to have represented Tenant in
connection with this Lease. Landlord agrees to indemnify
and hold Tenant and the Tenant Related Parties harmless
from all claims of any brokers claiming to have
represented Landlord in connection with this Lease.
Landlord agrees to pay a brokerage commission to
Tenant's Broker (as defined below) in accordance with
the terms of a written commission agreement between
Landlord and Tenant's Broker.
2. Agency Disclosure. At the signing of this Lease,
Landlord's leasing agent, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇, of
▇▇▇▇▇▇▇▇▇ Group ("Landlord's Broker"), represented
Landlord. At the signing of this Lease, Tenant's agent,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, of CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Tenant's Broker"),
represented Tenant. Each party signing this document
confirms that the prior oral and/or written disclosure
of agency was provided to such party in this
transaction, as required by RCW 18.86.030(1)(g).
3. Landlord and Tenant, by their execution of this Lease,
each acknowledge and agree that they have timely
received a pamphlet on the law of real estate agency as
required under RCW 18.86.030(1)(f).
G. Tenant covenants, warrants and represents that: (1) each
individual executing, attesting and/or delivering this Lease on
behalf of Tenant is authorized to do so on behalf of Tenant; (2)
this Lease is binding upon Tenant; and (3) Tenant is duly
organized and legally existing in the state of its organization
and is qualified to do business in the state in which the
Premises are located. If there is more than one Tenant, or if
Tenant is comprised of more than one party or entity, the
obligations imposed upon Tenant shall be joint and several
obligations of all the parties and entities. Notices, payments
and agreements given or made by, with or to any one person or
entity shall be deemed to have been given or made by, with and
to all of them.
H. Time is of the essence with respect to Tenant's exercise of any
expansion, renewal or extension rights granted to Tenant. This
Lease shall create only the relationship of landlord and tenant
between the parties, and not a partnership, joint venture or any
other relationship. This Lease and the covenants and conditions
in this Lease shall inure only to the benefit of and be binding
only upon Landlord and Tenant and their permitted successors and
assigns.
23
The expiration of the Term, whether by lapse of time or
otherwise, shall not relieve either party of any obligations
which accrued prior to or which may continue to accrue after the
expiration or early termination of this Lease. Without limiting
the scope of the prior sentence, it is agreed that Tenant's
obligations under Sections IV.A, IV.B., VIII, XIV, XX, XXV and
XXX shall survive the expiration or early termination of this
Lease.
J. Landlord has delivered a copy of this Lease to Tenant for
Tenant's review only, and the delivery of it does not constitute
an offer to Tenant or an option. This Lease shall not be
effective against any party hereto until an original copy of
this Lease has been signed by such party.
K. All understandings and agreements previously made between the
parties are superseded by this Lease, and neither party is
relying upon any warranty, statement or representation not
contained in this Lease. This Lease may be modified only by a
written agreement signed by Landlord and Tenant.
L. Tenant, within 15 days after request, shall provide Landlord
with a current financial statement and such other information as
Landlord may reasonably request in order to create a "business
profile" of Tenant and determine Tenant's ability to fulfill its
obligations under this Lease. Notwithstanding the foregoing, if
Tenant is a corporation the shares of which are traded on a
nationally recognized exchange, Landlord agrees that Tenant's
publicly available reports to the SEC on forms 10-Q and 10-K
shall satisfy the requirements of this Section XXXI.L. Tenant,
however, shall not require Tenant to provide such information
unless Landlord is requested to produce the information in
connection with a proposed financing or sale of the Building.
Upon written request by Tenant, Landlord shall enter into a
commercially reasonable confidentiality agreement covering any
confidential information that is disclosed by Tenant.
M. Except as may be expressly set forth herein to the contrary: (i)
whenever consent or approval of either party is required, such
party shall not unreasonably withhold, condition or delay such
consent or approval; (ii) whenever a party is permitted to make
a judgment from an opinion or exercise discretion in taking any
action or making any determination, the party shall employ
commercially reasonable standards in so doing; and (iii) where
performance is to be made to a party's satisfaction, an
objective and reasonable standard shall be employed in regard to
such performance.
XXXII. ENTIRE AGREEMENT.
This Lease and the following exhibits and attachments constitute the
entire agreement between the parties and supersede all prior agreements and
understandings related to the Premises, including all lease proposals, letters
of intent and other documents: Exhibit A (Outline and Location of Premises),
Exhibit A-2 (Legal Description of Property), Exhibit A-3 (Outline and Location
of Project), Exhibit A-4 (2003 Must Take Space, 2005 Must Take Space and
Building 3 Must Take Space), Exhibit B (Rules and Regulations), Exhibit C
(Commencement Letter), Exhibit D (Work Letter Agreement), Exhibit E (Additional
Provisions), Exhibit F (Letter of Credit), Exhibit G (Janitorial Specifications)
and Exhibit H (Exterior Signage).
24
Landlord and Tenant have executed this Lease as of the day and year
first above written.
LANDLORD:
EOP-SUNSET NORTH BELLEVUE, L.L.C.,
a Washington limited liability company
By: EOP-Sunset North, L.L.C., a Delaware
limited liability company, its managing
member
By: EOP Operating Limited Partnership,
a Delaware limited partnership, its
sole member
By: Equity Office Properties Trust, a
Maryland real estate investment
trust, its general partner
By: /s/ M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President
Seattle Region
TENANT:
EXPEDIA, INC., a Washington corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. Day
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. Day
--------------------------
Title: SVP, Operations
--------------------------
25
THIS PAGE IS REQUIRED IF PROPERTY IS IN WASHINGTON STATE
LANDLORD ACKNOWLEDGMENTS
STATE OF WASHINGTON
COUNTY OF KING ss:
I, the undersigned, a Notary Public, in and for the County and State
aforesaid, do hereby certify that m. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, personally known to me to
be the Senior Vice President of Equity Office Properties Trust, a Maryland real
estate investment trust, and personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that as such officer of said entity being authorized so
to do, he executed the foregoing instrument on behalf of said entity, by
subscribing the name of such entity by himself/herself as such officer, as a
free and voluntary act, and as the free and voluntary act and deed of said
entity under the foregoing instrument for the uses and purposes therein set
forth.
GIVEN Under My hand and official seal this 12/th/ day of September,
2002.
[SEAL OF D'▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ NOTARY PUBLIC]
/s/ D'▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Notary Public
D'▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Printed Name
Residing at Milton, WA
My Commission Expires: ▇-▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
COUNTY OF KING ) ss:
On this the 10/th/ day of SEPTEMBER 2002, before me a Notary Public duly
authorized in and for the said County in the State aforesaid to take
acknowledgments personally appeared ▇▇▇▇▇▇▇ ▇. DAY known to me to be SR. VICE
President of EXPEDIA, INC., one of the parties described in the foregoing
instrument, and acknowledged that as such officer, being authorized so to do,
(s)he executed the foregoing instrument on behalf of said corporation by
subscribing the name of such corporation by himself/herself as such officer and
caused the corporate seal of said corporation to be affixed thereto, as a free
and voluntary act, and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Notary Public
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Printed Name
Residing at: ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇
My Commission Expires: 7/29/06
[SEAL OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ NOTARY PUBLIC]
1
EXHIBIT A
PREMISES
This Exhibit is attached to and made a part of the Lease by and between
EOP-SUNSET NORTH BELLEVUE, L.L.C., a Washington limited liability company
("Landlord"), and EXPEDIA, INC., a Washington corporation ("Tenant"), for space
initially in the Building located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
and commonly known as Sunset North Building 4, and subsequently to include space
in the Building located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and
commonly known as Sunset North Building 3.
[GRAPHIC APPEARS HERE]
▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇/▇▇▇▇▇ 1
EXHIBIT A-2
LEGAL DESCRIPTION OF PROPERTY
▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 1-90 CORPORATE CAMPUS, A BINDING SITE PLAN, AS
PER PLAT RECORDED IN VOLUME 154 OF PLATS, PAGES 77 THROUGH 80, RECORDS OF KING
COUNTY;
EXCEPT ANY PORTION CONVEYED FOR 139TH AVE. S.E., BY DEED RECORDED UNDER
RECORDING NO. 9101280422;
TOGETHER WITH AN UNDIVIDED 60% INTEREST IN ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇ ▇▇▇▇;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN INSTRUMENT
RECORDED UNDER RECORDING NO. 960109140;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN INSTRUMENT
RECORDED UNDER RECORDING NO. 9107260572;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN INSTRUMENT
RECORDED UNDER RECORDING NO. ▇▇▇▇▇▇▇▇▇▇;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ OF WASHINGTON.
1
EXHIBIT A-3
OUTLINE AND LOCATION OF PROJECT
[GRAPHIC APPEARS HERE]
EXHIBIT A-4
OUTLINE AND LOCATION OF
2003 MUST TAKE SPACE, 2004 MUST TAKE SPACE AND
BUILDING 3 MUST TAKE SPACE
2003 MUST TAKE SPACE, Page 1 of 6
[GRAPHIC APPEARS HERE]
▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇/▇▇▇▇▇ 2
EXHIBIT A-4
OUTLINE AND LOCATION OF
2003 MUST TAKE SPACE, 2004 MUST TAKE SPACE AND
BUILDING 3 MUST TAKE SPACE
2005 MUST TAKE SPACE, Page 2 of 6
[GRAPHIC APPEARS HERE]
▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇/▇▇▇▇▇ 3
EXHIBIT A-4
OUTLINE AND LOCATION OF
2003 MUST TAKE SPACE, 2004 MUST TAKE SPACE AND
BUILDING 3 MUST TAKE SPACE
2005 MUST TAKE SPACE, Page 3 of 6
[GRAPHIC APPEARS HERE]
▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇/▇▇▇▇▇ 4
EXHIBIT A-4
OUTLINE AND LOCATION OF
2003 MUST TAKE SPACE, 2004 MUST TAKE SPACE AND
BUILDING 3 MUST TAKE SPACE
2005 MUST TAKE SPACE, Page 4 of 6
[GRAPHIC APPEARS HERE]
▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇/▇▇▇▇▇ 5
EXHIBIT A-4
OUTLINE AND LOCATION OF
2003 MUST TAKE SPACE, 2004 MUST TAKE SPACE AND
BUILDING 3 MUST TAKE SPACE
BUILDING 3 MUST TAKE SPACE, Page 5 of ▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. ▇
3180 139th Ave. S.E. - Bellevue, Washington
3rd Floor
[GRAPHIC APPEARS HERE]
EXHIBIT A-4
OUTLINE AND LOCATION OF
2003 MUST TAKE SPACE, 2004 MUST TAKE SPACE AND
BUILDING 3 MUST TAKE SPACE
BUILDING 3 MUST TAKE SPACE, Page 6 of ▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. ▇
3180 139th Ave. S.E. - Bellevue, Washington
4th Floor
[GRAPHIC APPEARS HERE]
EXHIBIT B
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply, where applicable, to
the Premises, the Building, the parking garage (if any), the Property and the
appurtenances. Capitalized terms have the same meaning as defined in the Lease.
1. Sidewalks, doorways, vestibules, halls, stairways and other similar
areas shall not be obstructed by Tenant or used by Tenant for any
purpose other than ingress and egress to and from the Premises. No
rubbish, litter, trash, or material shall be placed, emptied, or thrown
in those areas. At no time shall Tenant permit Tenant's employees to
loiter in Common Areas or elsewhere about the Building or Property.
2. Plumbing fixtures and appliances shall be used only for the purposes for
which designed, and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or placed in the fixtures or appliances. Damage
resulting to fixtures or appliances by Tenant, its agents, employees or
invitees, shall be paid for by Tenant, and Landlord shall not be
responsible for the damage.
3. No signs, advertisements or notices shall be painted or affixed to
windows, doors or other parts of the Building, except those of such
color, size, style and in such places as are first approved in writing
by Landlord. All tenant identification and suite numbers at the entrance
to the Premises shall be installed by Landlord, at Tenant's cost and
expense, using the standard graphics for the Building. Except in
connection with the hanging of lightweight pictures and wall
decorations, no nails, hooks or screws shall be inserted into any part
of the Premises or Building except by the Building maintenance
personnel.
4. Landlord may provide and maintain in the first floor (main lobby) of the
Building an alphabetical directory board or other directory device
listing tenants, and no other directory shall be permitted unless
previously consented to by Landlord in writing.
5. Tenant shall not place any lock(s) on any door in the Premises or
Building without Landlord's prior written consent and Landlord shall
have the right to retain at all times and to use keys to all locks
within and into the Premises. A reasonable number of keys to the locks
on the entry doors in the Premises shall be furnished by Landlord to
Tenant at Tenant's cost, and Tenant shall not make any duplicate keys.
All keys shall be returned to Landlord at the expiration or early
termination of this Lease. Notwithstanding the foregoing, Tenant shall
have the right to install and utilize its own security system within the
Premises, provided (i) Tenant cooperates with Landlord to integrate such
system within the Building's Security System and (ii) Landlord receives
a card key, code or other means to gain access to the Premises.
6. All contractors, contractor's representatives and installation
technicians performing work in the Building shall be subject to
Landlord's prior reasonable approval and shall be required to comply
with Landlord's standard rules, regulations, policies and procedures,
which may be revised from time to time.
7. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of merchandise or materials requiring the
use of elevators, stairways, lobby areas or loading dock areas, shall be
restricted to hours designated by Landlord. Tenant shall obtain
Landlord's prior approval, which shall not be unreasonably withheld or
delayed, by providing a detailed listing of the activity, provided that
no such consent shall be required for moves of personnel from one place
to another within the Premises, notwithstanding that elevators,
stairways, or lobby areas may be used in connection with such moves. If
approved by Landlord, the activity shall be under the supervision of
Landlord and performed in the manner required by Landlord. Tenant shall
assume all risk for damage to articles moved and injury to any persons
resulting from the activity. If equipment, property, or personnel of
Landlord or of any other party is damaged or injured as a result of or
in connection with the activity, Tenant shall be solely liable for any
resulting damage or loss.
8. Landlord shall have the reasonable right to approve the weight, size, or
location of heavy equipment or articles in and about the Premises.
Damage to the Building by the installation, maintenance, operation,
existence or removal of Tenant's Property shall be repaired at Tenant's
sole expense.
1
9. Corridor doors, when not in use, shall be kept closed,
10. Tenant shall not: (1) make or permit any improper, objectionable or
unpleasant noises or odors in the Building, or otherwise interfere in
any way with other tenants or persons having business with them; (2)
solicit business or distribute, or cause to be distributed, in any
portion of the Building, handbills, promotional materials or other
advertising; or (3) conduct or permit other activities in the Building
that might, in Landlord's sole opinion, constitute a nuisance.
11. No animals, except those assisting handicapped persons, shall be brought
into the Building or kept in or about the Premises.
12. No inflammable, explosive or dangerous fluids or substances shall be
used or kept by Tenant in the Premises, Building or about the Property.
Tenant shall not, without Landlord's prior written consent, use, store,
install, spill, remove, release or dispose of, within or about the
Premises or any other portion of the Property, any asbestos-containing
materials or any solid, liquid or gaseous material now or subsequently
considered toxic or hazardous under the provisions of 42 U.S.C. Section
9601 et seq. or any other applicable environmental Law which may now or
later be in effect. Tenant shall comply with all Laws pertaining to and
governing the use of these materials by Tenant, and shall remain solely
liable for the costs of abatement and removal.
13. Tenant shall not use or occupy the Premises in any manner or for any
purpose which might injure the reputation or impair the present or
future value of the Premises or the Building. Tenant shall not use, or
permit any part of the Premises to be used, for lodging, sleeping or for
any illegal purpose.
14 Tenant shall not take any action which would violate Landlord's labor
contracts or which would cause a work stoppage, picketing, labor
disruption or dispute, or interfere with Landlord's or any other
tenant's or occupant's business or with the rights and privileges of any
person lawfully in the Building ("Labor Disruption"). Tenant shall take
the actions necessary to resolve the Labor Disruption, and shall have
pickets removed and, at the request of Landlord, immediately terminate
any work in the Premises that gave rise to the Labor Disruption, until
Landlord gives its written consent for the work to resume. Tenant shall
have no claim for damages against Landlord or any of the Landlord
Related Parties, nor shall the Commencement Date of the Term be extended
as a result of the above actions.
15. Tenant shall not install, operate or maintain in the Premises or in any
other area of the Building, electrical equipment that would overload the
electrical system beyond its capacity for proper, efficient and safe
operation as reasonably determined by Landlord. Tenant shall not furnish
cooling or heating to the Premises, including, without limitation, the
use of electric or gas heating devices, without Landlord's prior written
consent, which shall not be unreasonably withheld. Tenant shall not use
more than its proportionate share of telephone lines and other
telecommunication facilities available to service the Building.
16. Tenant shall not operate or permit to be operated a coin or token
operated vending machine or similar device (including, without
limitation, telephones, lockers, toilets, scales, amusement devices and
machines for sale of beverages, foods, candy, cigarettes and other
goods), except for machines for the exclusive use of Tenant's employees
and visitors.
17. Bicycles and other vehicles are not permitted inside the Building or on
the walkways outside the Building, except in areas designated by
Landlord. Landlord has designated an area for bicycle racks in the
parking garage.
18. Landlord may from time to time adopt systems and procedures for the
security and safety of the Building, its occupants, entry, use and
contents. Tenant, its agents, employees, contractors, guests and
invitees shall comply with Landlord's systems and procedures, provided
that, as described above, Tenant shall be permitted to install and
utilize its own security system within the Premises.
19. Landlord shall have the right to prohibit the use of the name of the
Building or any other publicity by Tenant that in Landlord's reasonable
opinion may impair the reputation of the Building or its desirability.
Upon written notice from Landlord, Tenant shall refrain from and
discontinue such publicity immediately.
2
20. Tenant shall not canvass, solicit or peddle in or about the Building or
the Property.
21. Neither Tenant nor its agents, employees, contractors, guests or
invitees shall smoke or permit smoking in the Common Areas, unless the
Common Areas have been declared a designated smoking area by Landlord,
nor shall the above parties allow smoke from the Premises to emanate
into the Common Areas or any other part of the Building. Landlord shall
have the right to designate the Building (including the Premises) as a
non-smoking building.
22. Landlord shall have the right to designate and approve standard window
coverings for the Premises and to establish rules to assure that the
Building presents a uniform exterior appearance. Tenant shall ensure, to
the extent reasonably practicable, that window coverings are closed on
windows in the Premises while they are exposed to the direct rays of the
sun.
23. Deliveries to and from the Premises shall be made only at the times, in
the areas and through the entrances and exits designated from time to
time by Landlord. Tenant shall not make deliveries to or from the
Premises in a manner that might interfere with the use by any other
tenant of its premises or of the Common Areas, any pedestrian use, or
any use which is inconsistent with good business practice.
24. The work of cleaning personnel shall not be hindered by Tenant after
5:30 P.M., and cleaning work may be done at any time when the offices
are vacant. Windows, doors and fixtures may be cleaned at any time.
Tenant shall provide adequate waste and rubbish receptacles to prevent
unreasonable hardship to the cleaning service.
3
EXHIBIT C
COMMENCEMENT LETTER
(EXAMPLE)
Date
Tenant
Address
Re: Commencement Letter with respect to that certain Lease dated as of
__________, 200_, by and between EOP-SUNSET NORTH BELLEVUE, L.L.C., a
Washington limited liability company, as Landlord, and EXPEDIA, INC., a
Washington corporation, as Tenant, for ____ Rentable Square Footage on
▇▇▇ ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇ and 5th floors of the Building located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, as well as ____ Rentable Square Footage on the ____
floor(s) of the Building located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, and commonly known as Sunset North Building 4 and Building
3, respectively.
Dear
In accordance with the terms and conditions of the above referenced
Lease, Tenant accepts possession of the Premises and agrees:
1. The Commencement Date of the Lease is _________________,
2. The Termination Date of the Lease is _________________
Please acknowledge your acceptance of possession and agreement to the
terms set forth above by signing all 3 counterparts of this Commencement Letter
in the space provided and returning 2 fully executed counterparts to my
attention.
Sincerely,
-------------------------
Property Manager
Agreed and Accepted:
Tenant: ________________
By: ______________
Name: ______________
Title: ______________
Date: ______________
EXHIBIT D
WORK LETTER
This Exhibit is attached to and made a part of the Lease by and between
EOP-SUNSET NORTH BELLEVUE, L.L.C., a Washington limited liability company
("Landlord"), and EXPEDIA, INC., a Washington corporation ("Tenant"), for space
in the Building located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and
commonly known as Sunset North Building 4.
Alterations and Allowance.
A. Tenant, following the delivery of the Premises by Landlord and
the full and final execution and delivery of the Lease to which
this Exhibit is attached and all prepaid Rent, evidence of
procurement of all required insurance coverage, and subject to
the timely delivery of the Security Deposit, shall have the
right to perform alterations and improvements in the Premises
(the "Initial Alterations"). Notwithstanding the foregoing,
Tenant and its contractors shall not have the right to perform
Initial Alterations in the Premises unless and until Tenant has
complied with all of the terms and conditions of Article IX of
the Lease, including, without limitation, approval by Landlord
of the final plans for the Initial Alterations and the
contractors to be retained by Tenant to perform such Initial
Alterations. Tenant shall be responsible for all elements of the
design of Tenant's plans (including, without limitation,
compliance with law, functionality of design, the structural
integrity of the design, the configuration of the premises and
the placement of Tenant's furniture, appliances and equipment),
and Landlord's approval of Tenant's plans shall in no event
relieve Tenant of the responsibility for such design. Landlord's
approval of the contractors to perform the Initial Alterations
shall not be unreasonably withheld. The parties agree that
Landlord's approval of the general contractor to perform the
Initial Alterations shall not be considered to be unreasonably
withheld if any such general contractor (i) does not have trade
references reasonably acceptable to Landlord, (ii) does not
maintain insurance as required pursuant to the terms of this
Lease, (iii) does not have the ability to be bonded for the work
in an amount of no less than 150% of the total estimated cost of
the Initial Alterations, (iv) does not provide current financial
statements reasonably acceptable to Landlord, or (v) is not
licensed as a contractor in the state/municipality in which the
Premises is located. Tenant acknowledges the foregoing is not
intended to be an exclusive list of the reasons why Landlord may
reasonably withhold its consent to a general contractor.
B This Exhibit shall not be deemed applicable to any additional
space added to the Premises at any time or from time to time,
whether by any options under the Lease or otherwise, or to any
portion of the original Premises or any additions to the
Premises in the event of a renewal or extension of the original
Term of the Lease, whether by any options under the Lease or
otherwise, unless expressly so provided in the Lease or any
amendment or supplement to the Lease.
1
EXHIBIT E
ADDITIONAL PROVISIONS
This Exhibit is attached to and made a part of the Lease by and between
EOP-SUNSET NORTH BELLEVUE, L.L.C., a Washington limited liability company
("Landlord"), and EXPEDIA, INC., a Washington corporation ("Tenant"), for space
in the Building located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and
commonly known as Sunset North Building 4.
CONTINGENCIES. This Lease is contingent upon the following:
A. bSquare Termination Agreement. bSquare ("bSquare"), the current
tenant of the Premises, entering into an agreement with Landlord
to terminate its existing lease for the Premises (the "bSquare
Lease Termination"). If the bSquare Lease Termination is not
mutually executed and delivered on or before September 13, 2002,
then, at Landlord's option, to be exercised by written notice
delivered on or before September 13, 2002, this Lease shall be
of no further force or effect.
B. bSquare Furniture Transfer. bSquare entering into an agreement
with Tenant pursuant to which bSquare transfers ownership of all
furniture that currently is located in the portion of the
Premises that is the subject of bSquare's lease on the 1st and
2nd floors of the Building, which transfer is (1) at no cost to
Tenant and (2) with respect to the furniture located on the 1st
floor, is effective upon the Commencement Date, and with respect
to the furniture located on the 2nd floor, upon the 2003 Must
Take Commencement Date (defined below). If bSquare and Tenant do
not enter into such an agreement on or before October 1, 2002,
then, at Tenant's option, to be exercised by written notice
delivered on or before October 1, 2002, this Lease shall be of
no further force or effect.
C. Connectivity. Tenant obtaining fiber network telecommunications
and fiber data connectivity with Tenant's space in the building
("Building One") known as Sunset Corporate Campus, Building One
("Connectivity"). Landlord shall use reasonable efforts to
cooperate with Tenant, the City of Bellevue, and the ownership
of Building One, to facilitate Tenant's establishment of
Connectivity. If Tenant is not satisfied that Connectivity will
be established on or before October 22, 2002, then, at Tenant's
option, to be exercised by written notice delivered on or before
October 1, 2002, this Lease shall be of no further force or
effect.
II. 2003 MUST TAKE SPACE
A. Tenant hereby leases from Landlord and Landlord hereby leases to
Tenant the approximately 30,921 square feet of rentable area on
the 2nd floor of the Building and shown on Exhibit A-4 attached
hereto and hereby made a part of this Lease (the "2003 Must Take
Space"). The Term with respect to the 2003 Must Take Space shall
commence on January 1, 2003 (the "2003 Must Take Space
Commencement Date"), and shall terminate on the Termination
Date.
B. The 2003 Must Take Space is leased by Tenant pursuant to all of
the terms and conditions of the Lease, with the exception of
Base Rent, which shall be pursuant to the following table:
2003 Must Take Space
----------------------------------------------------------------------
ANNUAL RATE ANNUAL MONTHLY
PERIOD PER SQUARE FOOT BASE RENT BASE RENT
----------------------------------------------------------------------
01/01/03 - 07/31/04 $ 14.00 $ 432,894.00 $ 36,074.50
----------------------------------------------------------------------
08/01/04 - 09/30/09 $ 15.00 $ 463,815.00 $ 38,651.25
----------------------------------------------------------------------
C. Tenant's Pro Rata Share. For the period commencing with the 2003
Must Take Space Commencement Date and ending on the Termination
Date, Tenant's Pro Rata Share for the 2003 Must Take Space only
shall be 6.6495%.
D. Improvements to 2003 Must Take Space.
1. Tenant has inspected the 2003 Must Take Space and agrees
to accept the same in its current, "as is" condition
without any agreements,
1
representations, understandings or obligations on the
part of Landlord to perform any alterations, repairs or
improvements except as follows: Landlord shall deliver
the 2003 Must Take Space to Tenant broom-clean, free of
debris and personal property of prior occupants (other
than furniture acquired by Tenant from bSquare), as
described above and with all utility systems, fixtures
and equipment serving the 2003 Must Take Space in good
operating condition. Prior to Tenant's occupancy of the
2003 Must Take Space, Landlord and Tenant will jointly
tour the 2003 Must Take Space to create a "punchlist" of
existing damage to the 2003 Must take Space. Tenant
shall have no obligation to repair any damage to the
2003 Must Take Space which existed prior to Tenant's
occupancy, as noted on such "punchlist"; additionally,
Tenant shall have no obligation to remove any
alterations or improvements made to the 2003 Must Take
Space by any prior occupant, or to restore any
improvements that were removed from the 2003 Must Take
Space by any prior occupant.
2. Any improvements to the 2003 Must Take Space will be
carried out at Tenant's cost and shall be subject to the
provisions of Exhibit D. The 2003 Must Take Space
Commencement Date shall not be postponed or delayed if
the initial improvements to the 2003 Must Take Space are
incomplete on the 2003 Must Take Space Commencement
Date, except to the extent such lack of completion is
due solely to the acts of Landlord, in which event the
2003 Must Take Commencement Date shall be delayed on a
day-for-day basis for each day that the completion of
such work is delayed due to Landlord's acts (in any
event, Tenant will give Landlord prompt notice of any
alleged delay caused by Landlord in order to allow
Landlord to investigate and remedy, to the extent
necessary, any such delay). Subject to the provisions of
Section V. below, any delay in the completion of initial
improvements to the 2003 Must Take Space shall not
subject Landlord to any liability for any loss or damage
resulting therefrom.
3. Notwithstanding anything to the contrary in this Section
II.D, Landlord grants Tenant the right to enter the 2003
Must Take Space up to 30 days prior to the 2003 Must
Take Space Commencement Date, at Tenant's sole risk,
solely for the purpose of installing telecommunications
and data cabling, fixtures, furniture and equipment or
other personal property, in the 2003 Must Take Space. If
Landlord is delayed in delivering possession of the 2003
Must Take Space due to the holdover of a third party,
Landlord will use reasonable efforts to obtain
possession of the 2003 Must Take Space. In the event
Landlord does not provide Tenant with access to the 2003
Must Take Space at lest 30 days prior to the 2003 Must
Take Space Commencement Date, the 2003 Must Take Space
Commencement Date shall be postponed to be the day that
is 30 days after the date that Landlord first grants
Tenant the right to enter the 2003 Must Take Space in
connection with this Section II.D.4.
III. 2005 MUST TAKE SPACE
A. Tenant hereby leases from Landlord and Landlord hereby leases to
Tenant the approximately 92,763 square feet of rentable area on
the 3rd, 4th, and 5th floors of the Building and shown on
Exhibit A-4 attached hereto and hereby made a part of this Lease
(the "2005 Must Take Space"). The Term with respect to the 2005
Must Take Space shall commence on January 1, 2005 (the "2005
Must Take Space Commencement Date"), and shall terminate on the
Termination Date.
B. The 2005 Must Take Space is leased by Tenant pursuant to all of
the terms and conditions of the Lease, with the exception that
Landlord will provide the Refurbishment Allowance, as described
below, and Base Rent for the 2005 Must Take Space, shall be
payable pursuant to the following table:
2005 Must Take Space
----------------------------------------------------------------------
ANNUAL RATE ANNUAL MONTHLY
PERIOD PER SQUARE FOOT BASE RENT BASE RENT
----------------------------------------------------------------------
01/01/05 - 09/30/09 $ 15.00 $ 1,391,445.00 $ 115,953.75
----------------------------------------------------------------------
2
C. Tenant's Pro Rata Share. For the period commencing with the 2005
Must Take Space Commencement Date and ending on the Termination
Date, Tenant's Pro Rata Share, for the 2005 Must Take Space
only, shall be 19.9485%.
D. Improvements to 2005 Must Take Space.
1 Tenant has inspected the 2005 Must Take Space and agrees
to accept the same in its current, "as is" condition
without any agreements, representations, understandings
or obligations on the part of Landlord to perform any
alterations, repairs or improvements except as follows:
Landlord shall deliver the 2005 Must Take Space to
Tenant broom-clean, free of debris and personal property
of prior occupants (other than furniture acquired by
Tenant from bSquare), as described above and with all
utility systems, fixtures and equipment serving the 2005
Must Take Space in good operating condition. Prior to
Tenant's occupancy of the 2005 Must Take Space, Landlord
and Tenant will jointly tour the 2005 Must Take Space to
create a "punchlist" of existing damage in the 2005 Must
Take Space. Tenant shall have no obligation to repair
any damage to the 2005 Must Take Space which existed
prior to Tenant's occupancy, as noted on such
"punchlist"; additionally, Tenant shall have no
obligation to remove any alterations or improvements
made to the 2005 Must Take Space by any prior occupant,
or to restore any improvements that were removed from
the 2005 Must Take Space by any prior occupant.
2 Subject to the application of the Refurbishment
Allowance (defined below), any improvements to the 2005
Must Take Space (including the Refurbishment Work,
described below) will be at Tenant's cost. Landlord
shall make available to Tenant an allowance of
$747,435.00 (equivalent to $5.00 per rentable square
foot of the original Premises, the 2003 Must Take Space
and the 2005 Must Take Space) (the "Refurbishment
Allowance") for Tenant's use in painting and
re-carpeting the entire Premises (the "Refurbishment
Work"), which Refurbishment Work shall be completed by
Tenant prior to Tenant's occupancy of the 2005 Must Take
Space. The Refurbishment Allowance shall be made
available to Tenant in monthly increments as the
Refurbishment Work is completed, commencing December 1,
2004. The Refurbishment Allowance may only be used for
design and hard costs in connection with the
Reburbishment Work. The Refurbishment Allowance, shall
be paid to Tenant in periodic disbursements within 30
days after receipt of the following documentation: (i)
an application for payment and sworn statement of
contractor substantially in the form of AIA Document
G-702 covering all work for which disbursement is to be
made to a date specified therein; and (ii) contractor's,
subcontractor's and material supplier's waivers of liens
which shall cover all work for which disbursement is
being requested and all other statements and forms
required for compliance with the mechanics' lien laws of
the state in which the Premises is located, together
with all such invoices, contracts, or other supporting
data as Landlord may reasonably require. Notwithstanding
anything herein to the contrary, Landlord shall not be
obligated to disburse any portion of the Refurbishment
Allowance during the continuance of an uncured default
under the Lease, and Landlord's obligation to disburse
shall only resume when and if such default is cured.
3 Any improvements to the 2005 Must Take Space shall be
subject to the provisions of Exhibit D. The 2005 Must
Take Space Commencement Date shall not be postponed or
delayed if the initial improvements to the 2005 Must
Take Space (inclusive of the Refurbishment Work) are
incomplete on the 2005 Must Take Space Commencement
Date, except to the extent such lack of completion is
due solely to the acts Landlord, in which event the 2005
Must Take Commencement Date shall be delayed on a
day-for-day basis for each day that completion of such
work is delayed and due to Landlord's acts (in any
event, Tenant will give Landlord prompt notice of any
alleged delay caused by Landlord, in order to allow
Landlord to investigate and remedy, to the extent
necessary, any such delay). Subject to the provisions of
Section V below, any delay in the completion of initial
improvements to the 2005 Must Take Space shall not
subject Landlord to any liability for any loss or damage
resulting therefrom.
3
4. Notwithstanding anything to the contrary in this Section
III.D., Landlord grants Tenant the right to enter the
2005 Must Take Space up to 30 days prior to the 2005
Must Take Space Commencement Date, at Tenant's sole
risk, solely for the purpose of installing
telecommunications and data cabling, fixtures, furniture
and equipment or other personal property, in the 2005
Must Take Space. If Landlord is delayed in delivering
possession of the 2005 Must Take Space, Landlord will
use reasonable efforts to obtain possession of the 2005
Must Take Space. In the event Landlord does not provide
Tenant with access to the 2005 Must Take Space at least
30 days prior to the 2005 Must Take Space Commencement
Date, the 2005 Must Take Space Commencement Date shall
be postponed to be the day that is 30 days after the
date that Landlord first grants Tenant the right to
enter the 2005 Must Take Space in accordance with this
Section III.D.4.
IV. BUILDING 3 MUST TAKE SPACE.
A. Tenant hereby leases from Landlord and Landlord hereby leases to
Tenant the entire 3rd and 4th floors in Building 3, consisting
of approximately 63,510 square feet of rentable area (the
"Building 3 Must Take Space"). The Term with respect to the
Building 3 Must Take Space shall commence on July 1, 2004 (the
"Building 3 Must Take Space Commencement Date"), and shall
terminate on the Termination Date. Upon the determination of the
location and configuration of the Building 3 Must Take Space,
Landlord will deliver to Tenant a confirmation of the actual
rentable square footage of the Building 3 Must Take Space.
B. The Building 3 Must Take Space is leased by Tenant pursuant to
all of the terms and conditions of the Lease, with the exception
that Landlord will provide the Building 3 Allowance, as
described below, and Base Rent for the Building 3 Must Take
Space, shall be payable pursuant to the following table
(provided that the "Annual Base Rent" and "Monthly Base Rent"
columns assume that the Building 3 Must Take Space is 63,510
square feet, and the actual Annual and Monthly Base Rent shall
be adjusted based on the actual rentable square footage of the
Building 3 Must Take Space):
Building 3 Must Take Space
------------------------------------------------------------------
ANNUAL RATE ANNUAL MONTHLY
PERIOD PER SQUARE FOOT BASE RENT BASE RENT
------------------------------------------------------------------
07/01/04 - 07/31/04 $ 14.00 $ 889,140.00 $ 74,095.00
------------------------------------------------------------------
08/01/04 - 09/30/09 $ 15.00 $ 952,650.00 $ 79,387.50
------------------------------------------------------------------
C. Tenant's Pro Rata Share. For the period commencing with the
Building 3 Must Take Space Commencement Date and ending on the
Termination Date, Tenant's Pro Rata Share, for the Building 3
Must Take Space only, shall be a percentage equal to the
percentage of the total Buildings square footage (465,013)
consisting of the Building 3 Must Take Space. For example, if
the Building 3 Must Take Space consists of 63,510 square feet,
Tenant's Pro Rata Share for the Building 3 Must Take Space only
shall be 13.6577%.
D. Improvements to Building 3 Must Take Space.
Tenant agrees to accept the Building 3 Must Take Space
in its current, "as is" condition without any
agreements, representations, understandings or
obligations on the part of Landlord to perform any
alterations, repairs or improvements except as follows:
Landlord shall deliver the Building 3 Must Take Space to
Tenant broom-clean, free of debris and personal property
of prior occupants as described above and with all
utility systems, fixtures and equipment serving the
Building 3 Must Take Space in good operating condition.
Prior to Tenant's occupancy of the Building 3 Must Take
Space, Landlord and Tenant will jointly tour the
Building 3 Must Take Space to create a "punchlist" of
existing damage in the Building 3 Must Take Space.
Tenant shall have no obligation to repair any damage to
the Building 3 Must Take Space which existed prior to
Tenant's occupancy, as noted on such "punchlist";
additionally, Tenant shall have no obligation to remove
any alterations or improvements made to the Building 3
Must Take Space by any prior occupant, or to restore
4
any improvements that were removed from the Building 3
Must Take Space by any prior occupant.
2. Subject to the application of the Building 3 Allowance
(defined below), any improvements to the Building 3 Must
Take Space will be at Tenant's cost. Landlord shall make
available to Tenant an allowance of $40.00 per rentable
square foot of the Building 3 Must Take Space (the
"Building 3 Allowance") for Tenant's use in constructing
initial tenant improvements within the Building 3 Must
Take Space ("Initial Building 3 Alterations"). The
Building 3 Allowance shall be made available to Tenant
in monthly increments as Initial Building 3 Alterations
are completed. The Building 3 Allowance may be used for
design and hard costs in connection with the Initial
Building 3 Alterations, as well as permitting costs and
Landlord's costs as provided in Section IXC.1 of the
Lease. The Building 3 Allowance, less a 10% retainage
(which retainage shall be payable as part of the final
draw), shall be paid to Tenant in periodic disbursements
within 30 days after receipt of the following
documentation: (i) an application for payment and sworn
statement of Tenant's contractor substantially in the
form of AIA Document G-702 covering all work for which
disbursement is to be made to a date specified therein;
(ii) a certification from an AIA architect substantially
in the form of the Architect's Certificate for Payment
which is located on AIA Document G702, Application and
Certificate of Payment; (iii) contractor's,
subcontractor's and material supplier's waivers of liens
which shall cover all Building 3 Initial Alterations for
which disbursement is being requested and all other
statements and forms required for compliance with the
mechanics' lien laws of the state in which the Building
3 Must Take Space is located, together with all such
invoices, contracts, or other supporting data as
Landlord or Landlord's Mortgagee (if any) may reasonably
require; and (iv) a request to disburse from Tenant
containing an approval by Tenant of the work done and a
good faith estimate of the cost to complete the Building
3 Initial Alterations. Upon completion of the Building 3
Initial Alterations, and prior to final disbursement of
the Building 3 Allowance, Tenant shall furnish Landlord
with: (1) general contractor and architect's completion
affidavits, (2) full and final waivers of lien, (3)
receipted bills covering all labor and materials
expended and used, (4) as-built plans of the Building 3
Initial Alterations, and (5) the certification of Tenant
and its architect that the Building 3 Initial
Alterations have been installed in a good and
workmanlike manner in accordance with the plans approved
by Landlord, and in accordance with applicable laws,
codes and ordinances. In no event shall Landlord be
required to disburse the Building 3 Allowance more than
one time per month. If the estimated cost of
constructing the Building 3 Initial Alterations exceeds
the Building 3 Allowance, Tenant shall be entitled to
the Building 3 Allowance in accordance with the terms
hereof, but each individual disbursement of the Building
3 Allowance shall be disbursed in the proportion that
the Building 3 Allowance bears to the total cost for the
Building 3 Initial Alterations, less the 10% retainage
referenced above. Notwithstanding anything herein to the
contrary, Landlord shall not be obligated to disburse
any portion of the Building 3 Allowance during the
continuance of an uncured default under the Lease, and
Landlord's obligation to disburse shall only resume when
and if such default is cured.
3. Any improvements to the Building 3 Must Take Space shall
be subject to the provisions of Exhibit D. The Building
3 Must Take Space Commencement Date shall not be
postponed or delayed if the initial improvements to the
Building 3 Must Take Space are incomplete on the
Building 3 Must Take Space Commencement Date, except to
the extent such lack of completion is due solely to the
acts of Landlord, in which event the Building 3 Must
Take Commencement Date shall be delayed on a day-for-day
basis for each day that completion of such work is
delayed and due to Landlord's acts (in any event, Tenant
will give Landlord prompt notice of any alleged delay
caused by Landlord, in order to allow Landlord to
investigate and remedy, to the extent necessary, any
such delay). Subject to the provisions of Section V, any
delay in the completion of initial improvements to the
Building 3 Must Take Space shall not subject Landlord to
any liability for any loss or damage resulting
therefrom.
5
4. Notwithstanding anything to the contrary in this Section
IV, Landlord grants Tenant the right to enter the
Building 3 Must Take Space up to 90 days prior the
Building 3 Must Take Space Commencement Date, at
Tenant's sole risk, solely for the purposes of
constructing the Initial Building 3 Alterations and
installing telecommunications and data cabling,
fixtures, furniture and equipment or other personal
property, in the Building 3 Must Take Space. If Landlord
is delayed in delivering possession of the Building 3
Must Take Space, Landlord will use reasonable efforts to
obtain possession of the Building 3 Must Take Space. In
the event Landlord does not provide Tenant with access
to the Building 3 Must Take Space at least 90 days prior
to the Building 3 Must Take Space Commencement Date, the
Building 3 Must Take Space Commencement Date shall be
postponed to be the day that is 90 days after the date
that Landlord first grants Tenant the right to enter the
Building 3 Must Take Space in accordance with this
Section IV.D.4.
E. Stairway Enclosure. There currently exists an internal stairwell
connecting the 4th and 5th floors of Building 3 (the
"Stairwell"). In lieu of removing the Stairwell, and in order to
preserve the Stairwell for Tenant's use should Tenant expand the
Premises within Building 3 to include the 5th floor of Building
3 (or a portion of such 5th floor which is served by the
Stairwell), Landlord, at Tenant's request, will enclose the
Stairwell in a manner reasonably acceptable to both Landlord and
Tenant. In such event, the rentable area of the Building 3 Must
Take Space, as described above, shall be reduced appropriately
to delete therefrom the rentable area of the enclosed Stairwell,
and, concurrently with such adjustment, Landlord and Tenant will
enter into an amendment to the Lease, adjusting the Base Rent
payable for the Building 3 Must Take Space, Tenant's Pro Rata
Share for the Building 3 Must Take Space, the Building 3
Allowance, the per diem Base Rent abatement granted pursuant to
Section V below, and effecting any other change reasonably
necessitated by the adjustment of the rentable area of the
Building 3 Must Take Space.
F. Tenant's obligation to lease the Building 3 Must Take Space, and
Landlord's obligation to lease to Tenant the Building 3 Must
Take Space, is contingent upon Onyx Software Corporation
("Onyx"), the current tenant of the Building 3 Must Take Space,
entering into an agreement with Landlord to terminate its
existing lease for the Building 3 Must Take Space (the "Onyx
Lease Termination"). If the Onyx Lease Termination is not
mutually executed and October 11, 2002, then, at either party's
option, to be exercised by written notice on or before October
15, 2002, this Section IV shall be of no further force or
effect.
V. LATE DELIVERY OF MUST TAKE SPACE. If any Must Take Space (including the
2003 Must Take Space, the 2005 Must Take Space, and the Building 3 Must
Take Space) is not delivered to Tenant by Landlord on or before (i)
February 1, 2003, in the case of the 2003 Must Take Space, (ii) February
1, 2005, in the case of the 2005 Must Take Space, or (iii) June 1, 2004,
in the case of the Building 3 Must Take Space (the "Outside Delivery
Date"), Tenant shall be entitled to a Base Rent abatement to be applied
following the applicable Must Take Space Commencement Date, of
$1,202.48, with respect to the 2003 Must Take Space, $3,865.13, with
respect to the 2005 Must Take Space and $2,469.83, with respect to the
Building 3 Must Take Space, multiplied by the number of days in the
period beginning on the Outside Delivery Date and ending on the date the
Must Take Space is delivered to Tenant, plus an abatement of payment of
Tenant's Pro Rata Share of Expenses and Taxes for the same number of
days after the applicable Must Take Space Commencement Date. Landlord
and Tenant acknowledge and agree that the Outside Delivery Date(s) shall
be postponed by the number of days the delivery of any Must Take Space
is delayed due to delays caused by Tenant or by events of Force Majeure.
VI. FIRST RENEWAL OPTION.
▇. ▇▇▇▇▇ of Option; Conditions. Tenant shall have the right to
extend the Term (the "First Renewal Option") for one additional
period of 5 years commencing on the day following the
Termination Date and ending on the 5th anniversary of the
Termination Date (the "First Renewal Term"), if:
1. Landlord receives notice of exercise ("Initial Renewal
Notice") not less than 12 full calendar months prior to
the expiration of the initial Term and
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not more than 15 full calendar months prior to the
expiration of the initial Term; and
2. Tenant is not in default under the Lease beyond any
applicable cure periods at the time that Tenant delivers
its Initial Renewal Notice or at the time Tenant
delivers its Binding Notice (as defined below); and
3. Tenant (or Approved Users) occupies at least sixty
percent (60%) of the Premises then under lease to
Tenant; and,
4. Tenant has not sublet more than forty-percent (40%) of
the Premises then under lease to Tenant (other than
pursuant to a Permitted Transfer) at the time that
Tenant delivers its Initial Renewal Notice or at the
time Tenant delivers its Binding Notice; and
5. The Lease has not been assigned (other than pursuant to
a Permitted Transfer prior to the date that Tenant
delivers its Initial Renewal Notice or prior to the date
Tenant delivers its Binding Notice.
B. Terms Applicable to Premises During First Renewal Term.
1. The initial Base Rent rate per rentable square foot for
the Premises during the First Renewal Term shall equal
95% of the Prevailing Market rate (hereinafter defined)
per rentable square foot for the Premises. Base Rent
during the First Renewal Term shall increase, if at all,
in accordance with the increases assumed in the
determination of Prevailing Market rate. Base Rent
attributable to the Premises shall be payable in monthly
installments in accordance with the terms and conditions
of Article IV of the Lease.
2. Tenant shall pay Additional Rent (i.e. Taxes and
Expenses) for the Premises during the First Renewal Term
in accordance with the terms of Article IV of the Lease,
and the manner and method in which Tenant reimburses
Landlord for Tenant's share of Taxes and Expenses and
the Base Year, if any, applicable to such matter, shall
be some of the factors considered in determining the
Prevailing Market rate for the First Renewal Term.
C. Initial Procedure for Determining Prevailing Market. Within 30
days after receipt of Tenant's Initial Renewal Notice, Landlord
shall advise Tenant of the applicable Base Rent rate for the
Premises for the First Renewal Term. Tenant, within 30 days
after the date on which Landlord advises Tenant of the
applicable Base Rent rate for the First Renewal Term, shall
either (i) give Landlord final binding written notice ("Binding
Notice") of Tenant's exercise of its First Renewal Option, or
(ii) if Tenant disagrees with Landlord's determination, provide
Landlord with written notice of rejection (the "Rejection
Notice"). If Tenant fails to provide Landlord with either a
Binding Notice or Rejection Notice within such 30 day period,
Tenant shall be deemed to have provided a Rejection Notice
within such 30 day period. If Tenant provides Landlord with a
Binding Notice, Landlord and Tenant shall enter into the Renewal
Amendment (as defined below) upon the terms and conditions set
forth herein. If Tenant provides Landlord with a Rejection
Notice (or is deemed to have provided a Rejection Notice) (or is
deemed to have provided a Rejection Notice), Landlord and Tenant
shall work together in good faith to agree upon the Prevailing
Market rate for the Premises during the First Renewal Term. Upon
agreement, Landlord and Tenant shall enter into the Renewal
Amendment in accordance with the terms and conditions hereof.
Notwithstanding the foregoing, if Landlord and Tenant fail to
agree upon the Prevailing Market rate within 30 days after the
date Tenant provides (or is deemed to have provided) Landlord
with the Rejection Notice, either party may, by written notice
to the other (the "Arbitration Notice") within 5 days after the
expiration of such 30 day period, shall have the Prevailing
Market rate determined in accordance with the arbitration
procedures described in Section D below. If Landlord and Tenant
fail to agree upon the Prevailing Market rate within the 30 day
period described, an Arbitration Notice will be deemed delivered
on such 30th day and the Prevailing Market rate will be
determined in accordance with Section VI. D below.
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D. Arbitration Procedure.
1 If an Arbitration Notice has been provided (or deemed
provided), Landlord and Tenant, within 15 days after the
date of the Arbitration Notice (or the date the
Arbitration Notice is deemed given), shall each
simultaneously submit to the other, in a sealed
envelope, its good faith estimate of the Prevailing
Market rate for the Premises during the First Renewal
Term (collectively referred to as the "Estimates"). If a
party fails to timely deliver an Estimate, the other
party's Estimate shall be deemed the Prevailing Market
rate. If the higher of such Estimates is not more than
105% of the lower of such Estimates, then Prevailing
Market rate shall be the average of the two Estimates.
If the Prevailing Market rate is not resolved by the
exchange of Estimates, then, within 7 days after the
exchange of Estimates, Landlord and Tenant shall each
select an appraiser to determine which of the two
Estimates most closely reflects the Prevailing Market
rate for the Premises during the First Renewal Term.
Each appraiser so selected shall be certified as an MAI
appraiser or as an ASA appraiser and shall have had at
least 5 years experience within the previous 10 years as
a real estate appraiser working in the I-90 corridor of
Bellevue, Washington, with working knowledge of current
rental rates and practices. For purposes hereof, an
"MAI" appraiser means an individual who holds an MAI
designation conferred by, and is an independent member
of, the American Institute of Real Estate Appraisers (or
its successor organization, or in the event there is no
successor organization, the organization and designation
most similar), and an "ASA" appraiser means an
individual who holds the Senior Member designation
conferred by, and is an independent member of , the
American Society of Appraisers (or its successor
organization, or, in the event there is no successor
organization, the organization, and designation most
similar).
2. Upon selection, Landlord's and Tenant's appraisers shall
work together in good faith to agree upon which of the
two Estimates most closely reflects the Prevailing
Market rate for the Premises. The Estimate chosen by
such appraisers shall be binding on both Landlord and
Tenant, and an amount equal to 95% of such Estimate
shall be the Base Rent rate for the Premises during the
First Renewal Term. If either Landlord or Tenant fails
to appoint an appraiser within the 7 day period referred
to above, the appraiser appointed by the other party
shall be the sole appraiser for the purposes hereof. If
the two appraisers cannot agree upon which of the two
Estimates most closely reflects the Prevailing Market
within 20 days after their appointment, then, within 10
days after the expiration of such 20 day period, the two
appraisers shall select a third appraiser meeting the
aforementioned criteria. Once the third appraiser (i.e.
arbitrator) has been selected as provided for above,
then, as soon thereafter as practicable but in any case
within 14 days, the arbitrator shall make his
determination of which of the two Estimates most closely
reflects the Prevailing Market rate, such Estimate shall
be binding on both Landlord and Tenant, and an amount
equal to 95% of such Estimate shall be the Base Rent
rate for the Premises during the First Renewal Term . If
the arbitrator believes that expert advice would
materially assist him, he may retain one or more
qualified persons to provide such expert advice. The
parties shall share equally in the costs of the
arbitrator and of any experts retained by the
arbitrator. Any fees of any appraiser, counsel or
experts engaged directly by Landlord or Tenant, however,
shall be borne by the party retaining such appraiser,
counsel or expert.
3. If the Prevailing Market rate has not been determined by
the commencement date of the First Renewal Term, Tenant
shall pay Base Rent upon the terms and conditions in
effect during the last month of the initial Term for the
Premises until such time as the Prevailing Market rate
has been determined. Upon such determination, the Base
Rent for the Premises shall be retroactively adjusted to
the commencement of the First Renewal Term for the
Premises. If such adjustment results in an underpayment
of Base Rent by Tenant, Tenant shall pay Landlord the
amount of such underpayment within 30 days after the
determination thereof. If such adjustment results in an
overpayment of Base Rent by Tenant, Landlord shall
credit such overpayment against the next
8
installment of Base Rent due under the Lease and, to the
extent necessary, any subsequent installments, until the
entire amount of such overpayment has been credited
against Base Rent.
E. Renewal Amendment. If Tenant is entitled to and properly
exercises its First Renewal Option, Landlord shall prepare an
amendment (the "Renewal Amendment") to reflect changes in the
Base Rent, Term, Termination Date and other appropriate terms.
The Renewal Amendment shall be sent to Tenant within a
reasonable time after receipt of the Binding Notice and Tenant
shall execute and return the Renewal Amendment to Landlord
within a reasonable time after Tenant's receipt of same, but,
upon final determination of the Prevailing Market rate
applicable during the First Renewal Term as described herein, an
otherwise valid exercise of the First Renewal Option shall be
fully effective whether or not the Renewal Amendment is
executed.
F. Prevailing Market. For purposes hereof, "Prevailing Market"
shall mean the arms length fair market annual rental rate per
rentable square foot under renewal leases and amendments entered
into on or about the date on which the Prevailing Market is
being determined hereunder for space comparable to the Premises
(excluding Alterations installed at the expense of Tenant) in
the Building and Class "A" office buildings comparable to the
Building in the I-90 corridor of Bellevue, Washington. The
determination of Prevailing Market shall take into account any
material economic differences between the terms of this Lease
and any comparison lease or amendment, such as rent abatements,
construction costs and other concessions and the manner, if any,
in which the landlord under any such lease is reimbursed for
operating expenses and taxes.
VII. SECOND RENEWAL OPTION.
▇. ▇▇▇▇▇ of Option; Conditions. Tenant shall have the right to
extend the Extended Term (the "Second Renewal Option") for one
additional period of 5 years commencing on the day following the
Extended Termination Date and ending on the 5th anniversary of
the Extended Termination Date (the "Second Renewal Term"), if:
1. Landlord receives notice of exercise ("Initial Second
Renewal Notice") not less than 12 full calendar months
prior to the Extended Termination Date and not more than
15 full calendar months prior to the Extended
Termination Date; and
2. Tenant is not in default under the Lease beyond any
applicable cure periods at the time that Tenant delivers
its Initial Second Renewal Notice or at the time Tenant
delivers its Second Renewal Binding Notice (as defined
below); and
3. Tenant (or Approved Users) occupies at least sixty
percent (60%) of the Premises then under lease to
Tenant; and,
4. Tenant has not sublet more than forty percent (40%) of
the Premises then under lease to Tenant (other than
pursuant to a Permitted Transfer) at the time that
Tenant delivers its Initial Second Renewal Notice or at
the time Tenant delivers its Second Renewal Binding
Notice; and
5. The Lease has not been assigned (other than pursuant to
a Permitted Transfer prior to the date that Tenant
delivers its Initial Second Renewal Notice or prior to
the date Tenant delivers its Second Renewal Binding
Notice.
B. Terms Applicable to Premises During Second Renewal Term.
1. The initial Base Rent rate per rentable square foot for
the Premises during the Second Renewal Term shall equal
95% of the Prevailing Market rate per rentable square
foot for the Premises. Base Rent during the Second
Renewal Term shall increase, if at all, in accordance
with the increases assumed in the determination of
Prevailing Market rate. Base Rent attributable to the
Premises shall be payable in monthly installments in
accordance with the terms and conditions of Article IV
of the Lease.
9
2. Tenant shall pay Additional Rent (i.e. Taxes and
Expenses) for the Premises during the Second Renewal
Term in accordance with the terms of Article IV of the
Lease, and the manner and method in which Tenant
reimburses Landlord for Tenant's share of Taxes and
Expenses and the Base Year, if any, applicable to such
matter, shall be some of the factors considered in
determining the Prevailing Market rate for the Second
Renewal Term.
C. Initial Procedure for Determining Prevailing Market. Within 30
days after receipt of Tenant's Initial Second Renewal Notice,
Landlord shall advise Tenant of the applicable Base Rent rate
for the Premises for the Second Renewal Term. Tenant, within 30
days after the date on which Landlord advises Tenant of the
applicable Base Rent rate for the Second Renewal Term, shall
either (i) give Landlord final binding written notice ("Binding
Notice") of Tenant's exercise of its Second Renewal Option, or
(ii) if Tenant disagrees with Landlord's determination, provide
Landlord with written notice of rejection (the "Rejection
Notice"). If Tenant fails to provide Landlord with either a
Binding Notice or Rejection Notice within such 30 day period,
Tenant shall be deemed to have provided the Rejection Notice
within such 30 day period. If Tenant provides Landlord with a
Binding Notice, Landlord and Tenant shall enter into the Renewal
Amendment (as defined below) upon the terms and conditions set
forth herein. If Tenant provides Landlord with a Rejection
Notice (or is deemed to have provided a Rejection Notice),
Landlord and Tenant shall work together in good faith to agree
upon the Prevailing Market rate for the Premises during the
Second Renewal Term. Upon agreement, Landlord and Tenant shall
enter into the Renewal Amendment in accordance with the terms
and conditions hereof. Notwithstanding the foregoing, if
Landlord and Tenant fail to agree upon the Prevailing Market
rate within 30 days after the date Tenant provides (or is deemed
to have provided) Landlord with the Rejection Notice, either
party may, by written notice to the other (the "Arbitration
Notice") within 5 days after the expiration of such 30 day
period, shall have the Prevailing Market rate determined in
accordance with the arbitration procedures described in Section
VII.D below. If Landlord and Tenant fail to agree upon the
Prevailing Market rate within the 30 day period described, an
Arbitration Notice will be deemed delivered on such 30th day and
the Prevailing Market rate will be determined in accordance with
Section VII.D. below.
D. Arbitration Procedure.
1. If an Arbitration Notice has been provided (or deemed
provided), Landlord and Tenant, within 15 days after the
date of the Arbitration Notice, shall each
simultaneously submit to the other, in a sealed
envelope, its good faith estimate of the Prevailing
Market rate for the Premises during the Second Renewal
Term (collectively referred to as the "Estimates"). If
the higher of such Estimates is not more than 105% of
the lower of such Estimates, then Prevailing Market rate
shall be the average of the two Estimates. If the
Prevailing Market rate is not resolved by the exchange
of Estimates, then, within 7 days after the exchange of
Estimates, Landlord and Tenant shall each select an
appraiser to determine which of the two Estimates most
closely reflects the Prevailing Market rate for the
Premises during the Second Renewal Term. Each appraiser
so selected shall be certified as an MAI appraiser or as
an ASA appraiser and shall have had at least 5 years
experience within the previous 10 years as a real estate
appraiser working in the I-90 corridor of Bellevue,
Washington, with working knowledge of current rental
rates and practices. For purposes hereof, an "MAI"
appraiser means an individual who holds an MAI
designation conferred by, and is an independent member
of, the American Institute of Real Estate Appraisers (or
its successor organization, or in the event there is no
successor organization, the organization and designation
most similar), and an "ASA" appraiser means an
individual who holds the Senior Member designation
conferred by, and is an independent member of, the
American Society of Appraisers (or its successor
organization, or, in the event there is no successor
organization, the organization and designation most
similar).
2. Upon selection, Landlord's and Tenant's appraisers shall
work together in good faith to agree upon which of the
two Estimates most closely reflects the Prevailing
Market rate for the Premises. The Estimate chosen by
10
such appraisers shall be binding on both Landlord and
Tenant, and an amount equal to 95% of such Estimate
shall be the Base Rent rate for the Premises during the
Second Renewal Term. If either Landlord or Tenant fails
to appoint an appraiser within the 7 day period referred
to above, the appraiser appointed by the other party
shall be the sole appraiser for the purposes hereof. If
the two appraisers cannot agree upon which of the two
Estimates most closely reflects the Prevailing Market
within 20 days after their appointment, then, within 10
days after the expiration of such 20 day period, the two
appraisers shall select a third appraiser meeting the
aforementioned criteria. Once the third appraiser (i.e.
arbitrator) has been selected as provided for above,
then, as soon thereafter as practicable but in any case
within 14 days, the arbitrator shall make his
determination of which of the two Estimates most closely
reflects the Prevailing Market rate, such Estimate shall
be binding on both Landlord and Tenant, and an amount
equal to 95% of such Estimate shall be the Base Rent
rate for the Premises during the Second Renewal Term. If
the arbitrator believes that expert advice would
materially assist him, he may retain one or more
qualified persons to provide such expert advice. The
parties shall share equally in the costs of the
arbitrator and of any experts retained by the
arbitrator. Any fees of any appraiser, counsel or
experts engaged directly by Landlord or Tenant, however,
shall be borne by the party retaining such appraiser,
counsel or expert.
3. If the Prevailing Market rate has not been determined by
the commencement date of the Second Renewal Term, Tenant
shall pay Base Rent upon the terms and conditions in
effect during the last month of the initial Term for the
Premises until such time as the Prevailing Market rate
has been determined. Upon such determination, the Base
Rent for the Premises shall be retroactively adjusted to
the commencement of the Second Renewal Term for the
Premises. If such adjustment results in an underpayment
of Base Rent by Tenant, Tenant shall pay Landlord the
amount of such underpayment within 30 days after the
determination thereof. If such adjustment results in an
overpayment of Base Rent by Tenant, Landlord shall
credit such overpayment against the next installment of
Base Rent due under the Lease and, to the extent
necessary, any subsequent installments, until the entire
amount of such overpayment has been credited against
Base Rent.
E. Second Renewal Amendment. If Tenant is entitled to and properly
exercises its Second Renewal Option, Landlord shall prepare an
amendment (the "Second Renewal Amendment") to reflect changes in
the Base Rent, Term, Termination Date and other appropriate
terms. The Second Renewal Amendment shall be sent to Tenant
within a reasonable time after receipt of the Second Renewal
Binding Notice and Tenant shall execute and return the Second
Renewal Amendment to Landlord within a reasonable time after
Tenant's receipt of same, but, upon final determination of the
Prevailing Market rate applicable during the Second Renewal Term
as described herein, an otherwise valid exercise of the Second
Renewal Option shall be fully effective whether or not the
Second Renewal Amendment is executed.
VIII. RIGHT OF FIRST OFFER.
▇. ▇▇▇▇▇ of Option; Conditions. Tenant shall have the on-going
right of first offer (the "Right of First Offer") with respect
to the any space within the Sunset North Corporate Campus from
time to time owned by Landlord (any such space being referred to
herein as the "Offering Space"). Tenant's Right of First Offer
shall be exercised as follows: at any time after Landlord has
determined that any existing tenant in the Offering Space which
has an existing option to renew or extend its term will not
extend or renew the term of its lease for the Offering Space,
whether or not pursuant to such option (but prior to leasing
such Offering Space to a party other than the existing tenant),
Landlord shall advise Tenant (the "Advice") of the terms under
which Landlord is prepared to lease the Offering Space to Tenant
for the remainder of the Term, which terms shall reflect the
Prevailing Market (hereinafter defined) rate for such Offering
Space as reasonably determined by Landlord; provided, however,
that if Tenant exercises a Right of First Offer within the first
12 months of the initial Term, the Base Rent rate for space
added by exercise of this Right of First Offer shall be Base
Rent rate then currently payable by Tenant for the Premises.
Tenant may lease such Offering Space in its
11
entirety only, under such terms, by delivering written notice of
exercise to Landlord (the "Notice of Exercise") within 10
Business Days after the date of the Advice, except that Tenant
shall have no such Right of First Offer and Landlord need not
provide Tenant with an Advice, if:
1. Tenant is in default under the Lease beyond any
applicable cure periods at the time that Landlord would
otherwise deliver the Advice; or
2. More than fifty percent (50%) of the Rentable Square
Footage of the Premises is sublet (other than the
Approved Users pursuant to a Permitted Transfer, as
defined in Article XII of the Lease) at the time
Landlord would otherwise deliver the Advice; or
3. The Lease has been assigned (other than pursuant to a
Permitted Transfer) prior to the date Landlord would
otherwise deliver the Advice; or
4. Tenant (or Approved Users) is not occupying at least
fifty percent (50%) of the Rentable Square Footage of
the Premises on the date Landlord would otherwise
deliver the Advice; or
5. The Offering Space is not intended for the exclusive use
of Tenant (and Approved Users) during the Term; or
6. The existing tenant in the Offering Space is interested
in extending or renewing its lease for the Offering
Space or entering into a new lease for such Offering
Space.
B. Terms for Offering Space.
The term for the Offering Space shall commence upon the
commencement date stated in the Advice and thereupon
such Offering Space shall be considered a part of the
Premises, provided that all of the terms stated in the
Advice shall govern Tenant's leasing of the Offering
Space and only to the extent that they do not conflict
with the Advice, the terms and conditions of this Lease
shall apply to the Offering Space.
2. Tenant shall pay Base Rent and Additional Rent for the
Offering Space in accordance with the terms and
conditions of the Advice, which terms and conditions
shall reflect the Prevailing Market rate for the
Offering Space as determined in Landlord's reasonable
judgment.
3. The Offering Space (including improvements and
personalty, if any) shall be accepted by Tenant in its
condition and as-built configuration existing on the
earlier of the date Tenant takes possession of the
Offering Space or as of the date the term for such
Offering Space commences, unless the Advice specifies
any work to be performed by Landlord in the Offering
Space, in which case Landlord shall perform such work in
the Offering Space; any improvements existing in the
Offering Space as of the date Tenant occupies the
Offering Space shall not be considered Required
Removables. If Landlord is delayed delivering possession
of the Offering Space due to the holdover or unlawful
possession of such space by any party, Landlord shall
use reasonable efforts to obtain possession of the
space, and the commencement of the term for the Offering
Space shall be postponed until the date Landlord
delivers possession of the Offering Space to Tenant free
from occupancy by any party.
C. Termination of Right of First Offer. The rights of Tenant
hereunder with respect to the Offering Space shall terminate on
the earlier to occur of: (i) September 30, 2008 (unless Tenant
timely exercises (x) its First Renewal Option, in which event
the date shall be September 30, 2013; or (y) its Second Renewal
Option, in which event the date shall be September 30, 2018);
(ii) Tenant's failure to exercise its Right of First Offer
within the 10 Business Day period provided in Section VIII.A
above; and (iii) the date Landlord would have provided Tenant an
Advice if Tenant had not been in violation of one or more of the
conditions set forth in Section VIII.A above.
D. Documentation. If Tenant exercises its Right of First Offer,
Landlord shall prepare a document in such form as Landlord
reasonably deems appropriate
12
(which may be an amendment to the Lease, or a new lease for the
Offering Space on the same terms and conditions as are set forth
in the Lease (subject to the terms of the Advice) to the extent
such terms are applicable to the Offering Space)) (the "Offering
Document") providing for Tenant's leasing of the Offering Space
on the terms set forth in the Advice. A copy of the Offering
Document shall be sent to Tenant within a reasonable time after
Landlord's receipt of the Notice of Exercise executed by Tenant,
and Tenant shall execute and return the Offering Document to
Landlord within 15 days thereafter, but an otherwise valid
exercise of the Right of First Offer shall be fully effective
whether or not the Offering Document is executed.
E. Definition of Prevailing Market. For purposes of this Right of
First Offer provision, "Prevailing Market" shall mean the arms
length fair market annual rental rate per square foot for space
comparable to the Offering Space in the Building and Class "A"
office buildings comparable to the Building in the I-90 corridor
of Bellevue, Washington under leases and renewal and expansion
amendments being entered into at or about the time that
Prevailing Market is being determined, giving appropriate
consideration to tenant concessions, brokerage commissions,
tenant improvement allowances, existing improvements in the
space in question, and the method of allocating operating
expenses and taxes. Notwithstanding the foregoing, space leased
under any of the following circumstances shall not be considered
to be comparable for purposes hereof: (i) the lease term is for
less than the lease term of the Offering Space, (ii) the space
is encumbered by the option rights of another tenant, or (iii)
the space has a lack of windows and/or an awkward or unusual
shape or configuration. The foregoing is not intended to be an
exclusive list of space that will not be considered to be
comparable.
F. Subordination. Notwithstanding anything herein to the contrary,
Tenant's Right of First Offer is subject and subordinate to the
expansion rights (whether such rights are designated as a right
of first offer, right of first refusal, expansion option or
otherwise) existing on the date hereof, of any tenant of the
Building.
G. Sale of Building 3. If, during the Term, Landlord sells Building
3 to a third party who does not, in connection therewith,
purchase or acquire Building 4, a condition to any such sale
shall be the purchaser's agreement to recognize the rights of
Tenant under this Section VIII with respect to Offering Space
located in Building 3. In connection therewith, Tenant agrees to
execute any documentation reasonably required by such purchaser
to memorialize such purchaser's obligations and Tenant's rights
hereunder.
IX. PARKING.
A. During the initial Term, Landlord shall Lease to Tenant, or
cause the operator (the "Operator") of the garage servicing the
Building (the "Garage") to lease to Tenant, and Tenant shall
lease from Landlord up to a maximum of 103 unreserved parking
spaces in the Garage ("Spaces") (i.e., a parking ratio of 4
unreserved Spaces per 1,000 rentable square feet of the
Premises) for the use of Tenant and its employees. The
unreserved Spaces shall be leased at the rate of $35.00 per
Space, per month during the initial Term. If requested by
Landlord, Tenant shall execute and deliver to Landlord the
standard parking agreement used by Landlord or the Operator (the
"Parking Agreement") in the Garage for such Spaces. All of the
Spaces will be made available to Tenant, its employees and all
other tenants and employees of the Building entitled to use such
parking facilities, on a non-exclusive, in-common basis;
provided, however that Tenant shall have 5 exclusive visitor
parking stalls in front of Building 4 (which spaces shall be
marked "Expedia Visitors Only") for the use of Tenant's visitors
("Visitor Spaces"), at no charge to Tenant and provided that
Landlord and the Operator shall use reasonable efforts to assure
that the Spaces to which Tenant is entitled are actually
available to Tenant. As Tenant expands the Premises pursuant to
the provisions of Sections II, III, IV and VII of this Exhibit
E, Tenant shall be entitled to additional unreserved parking
spaces at a ratio of up to 4 unreserved Spaces per 1,000
rentable square feet leased at the rate of $35.00 per Space, per
month, during the initial Term.
B. Except as set forth below, no deductions or allowances shall be
made for days when Tenant or any of its employees does not
utilize the parking facilities or for Tenant utilizing less than
all of the Spaces. Tenant shall not have the right to lease or
otherwise use more than the number of Unreserved Spaces and
13
Reserved Spaces set forth above, but Tenant may, by written
notice to Landlord given not less than thirty (30) days prior to
the commencement of any calendar month during the Term, elect to
lease fewer Spaces than the maximum to which it is entitled,
such election to continue to apply to successive months until
Tenant provides Landlord with another such notice.
C. Except for particular parking spaces and areas designated by
Landlord or the Operator for reserved parking, all parking in
the Garage shall be on an unreserved, first-come, first-served
basis.
D. Neither Landlord nor the Operator shall be responsible for
money, jewelry, automobiles or other personal property lost in
or stolen from the Garage regardless of whether such loss or
theft occurs when the Garage or other areas therein are locked
or otherwise secured. Except as caused by the negligence or
willful misconduct of Landlord and without limiting the terms of
the preceding sentence, Landlord shall not be liable for any
loss, injury or damage to persons using the Garage or
automobiles or other property therein.
E. Landlord or its Operator shall have the right from time to time
to designate the location of the Spaces and to promulgate
reasonable rules and regulations regarding the Garage, the
Spaces and the use thereof, including, but not limited to, rules
and regulations controlling the flow of traffic to and from
various parking areas, the angle and direction of parking and
the like. Tenant shall comply with and cause its employees to
comply with all such rules and regulations, all reasonable
additions and amendments thereto, and the terms and provisions
of the Parking Agreement.
F. Tenant shall not store or permit its employees to store any
automobiles in the Garage without the prior written consent of
Landlord, except that (i) Tenant may keep up to four (4)
vehicles permanently in the Garage (for use as vanpools, and
similar tenant uses), and (ii) Tenant's employees may leave
their vehicles in the Garage overnight, at their sole risk, for
a maximum period of forty-eight (48) hours without the prior
consent of Landlord. Except for emergency repairs, Tenant and
its employees shall not perform any work on any automobiles
while located in the Garage or on the Property. If it is
necessary for Tenant or its employees to leave an automobile in
the Garage for more than 48 hours (other than on weekends) or on
an extended basis, Tenant shall provide Landlord with prior
notice thereof designating the license plate number and model of
such automobile.
G. Landlord or the Operator shall have the right to temporarily
close the Garage or certain areas therein in order to perform
necessary repairs, maintenance and improvements to the Garage,
if any.
H. Except in connection with a Transfer in compliance with the
provisions of Article XII of the Lease, Tenant shall not assign
or sublease any of the Spaces without the consent of Landlord.
Landlord shall have the right to terminate the agreement
contained in this Section IX or in the Parking Agreement with
respect to any Spaces that Tenant desires to sublet or assign.
Landlord may elect to provide parking cards or keys to control
access to the Garage. In such event, Landlord shall provide
Tenant with one card or key for each Space that Tenant is
leasing or otherwise hereunder, provided that Landlord shall
have the right to require Tenant or its employees to place a
deposit on such access cards or keys and to pay a fee for any
lost or damaged cards or keys.
X. SIGNAGE. Landlord, at Landlord's expense, shall install the following
initial Building standard signage, using Building standard typeface and
design: (A) initial directory strip signage identifying Tenant on the
existing Building directory in the main Building lobby (Landlord will
use reasonable efforts to cause bSquare to remove its 1st floor lobby
signage prior to the Commencement Date), (B) initial suite
identification signage at the main entry door to the Premises, (C)
initial directory strip signage identifying Tenant on the garage
elevator lobby directory, (D) initial directory strip signage on the
outdoor directory outside the Garage, and (E) initial signage
identifying Tenant on the existing monument sign located outside the
Building. Landlord shall be responsible for the costs of maintenance,
repair, restoration and removal of the such initial signage; provided,
however, that any change or modification of any of such signage
requested by Tenant
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shall be at Tenant sole cost and expense. Signage described in this
Section X is personal to the initial Tenant named under the Lease, or
any successor as a result of a Permitted Transfer, and such signage
rights with respect to the monument sign cannot be assigned to any other
assignee or subtenant without Landlord's prior written consent, which
may be withheld in Landlord's sole but good faith discretion.
XI. EXTERIOR SIGNAGE.
(a) Building 4. Upon the Commencement Date, Tenant shall have the
right to install exterior signage on the Building on or about
the location for exterior signage shown on Exhibit H. Landlord
will additionally require bSquare to remove bSquare's exterior
Building signage upon bSquare's vacancy from the Building and
the termination of bSquare's lease in the Building; in no event
will such signage exceed in size the size of bSquare's existing
exterior signage until Tenant occupies all of the Building
(provided, however, that Landlord will use reasonable efforts to
procure the consent of bSquare to Tenant's installation of
signage similar in size to Tenant's exterior signage located on
Building One);
(b) Building 3. Upon the Building 3 Must Take Space Commencement
Date, Tenant shall have the right to install exterior signage of
a size approved by Landlord in writing on Building 3 in a
location facing 1-90, on or about the location for such signage
shown on Exhibit H;
(c) Generally. The signage rights granted pursuant to this Section
XI shall be consistent with, and shall not exceed in size,
Tenant's existing signage located on Building One and shall meet
the City of Bellevue's sign requirements. Tenant shall be
responsible for all costs of installation and maintenance of
such signage (the installation of such signage shall be carried
out as an Alteration in accordance with the terms and provisions
of the Lease) and the cost of removal at the end of the Term and
the cost of repair of any damage caused by such removal. Signage
described in this Section XI is personal to the initial Tenant
named under the Lease, or any successor as a result of a
Permitted Transfer, and such signage rights cannot be assigned
to any other assignee or subtenant without Landlord's prior
written consent, which may be withheld in Landlord's sole but
good faith discretion.
XII. ROOF SPACE FOR DISH/ANTENNA.
A. Tenant shall have the right, in consideration for payments of
$-0- per month for each Dish/Antenna (defined below) after the
initial Dish/Antenna installed by Tenant (the "Dish/Antenna
Payments"), to lease space on the roof of Building 4 for the
purpose of installing (in accordance with Section IX.C of the
Lease), operating and maintaining one or, with Landlord's prior
written approval more than one dish/antenna or other
communication device approved by the Landlord (each, a
"Dish/Antenna"). The Dish/Antenna Payments shall constitute
Additional Rent under the terms of the Lease and Tenant shall be
required to make these payments in strict compliance with the
terms of Article IV of the Lease. The exact location of the
space on the roof to be leased by Tenant shall be designated by
Landlord and size of the Dish/Antenna shall be mutually agreed
upon (the "Roof Space"). Landlord reserves the right to relocate
the Roof Space as reasonably necessary during the Term.
Landlord's designation shall take into account Tenant's use of
the Dish/Antenna. Notwithstanding the foregoing, Tenant's right
to install the Dish/Antenna shall be subject to the approval
rights of Landlord and Landlord's architect and/or engineer with
respect to the plans and specifications of the Dish/Antenna, the
manner in which the Dish/Antenna is attached to the roof of the
Building and the manner in which any cables are run to and from
the Dish/Antenna. The precise specifications and a general
description of the Dish/Antenna along with all documents
Landlord reasonably requires to review the installation of the
Dish/Antenna (the "Plans and Specifications") shall be submitted
to Landlord for Landlord's written approval no later than 20
days before Tenant commences to install the Dish/Antenna. Tenant
shall be solely responsible for obtaining all necessary
governmental and regulatory approvals and for the cost of
installing, operating, maintaining and removing the
Dish/Antenna. Tenant shall notify Landlord upon completion of
the installation of the Dish/Antenna. If Landlord determines
that the Dish/Antenna equipment does not comply with the
approved Plans and Specifications, that the Building has been
damaged during installation of the Dish/Antenna or that the
installation was defective, Landlord shall notify Tenant of any
noncompliance or
15
detected problems and Tenant immediately shall cure the defects.
If the Tenant fails to immediately cure the defects, Tenant
shall pay to Landlord upon demand the cost, as reasonably
determined by Landlord, of correcting any defects and repairing
any damage to the Building caused by such installation. If at
any time Landlord, in its reasonable discretion, deems it
necessary, Tenant shall provide and install, at Tenant's sole
cost and expense, appropriate aesthetic screening, reasonably
satisfactory to Landlord, for the Dish/Antenna (the "Aesthetic
Screening").
B. Landlord agrees that Tenant, upon reasonable prior written
notice to Landlord, shall have access to the roof of the
Building and the Roof Space for the purpose of installing,
maintaining, repairing and removing the Dish/Antenna, the
appurtenances and the Aesthetic Screening, if any, all of which
shall be performed by Tenant or Tenant's authorized
representative or contractors, which shall be approved by
Landlord, at Tenant's sole cost and risk. It is agreed, however,
that only authorized engineers, employees or properly authorized
contractors of Tenant, FCC (defined below) inspectors, or
persons under their direct supervision will be permitted to have
access to the roof of the Building and the Roof Space. Tenant
further agrees to exercise firm control over the people
requiring access to the roof of the Building and the Roof Space
in order to keep to a minimum the number of people having access
to the roof of the Building and the Roof Space and the frequency
of their visits.
C. It is further understood and agreed that the installation,
maintenance, operation and removal of the Dish/Antenna, the
appurtenances and the Aesthetic Screening, if any, is not
permitted to damage the Building or the roof thereof, or
interfere with the use of the Building and roof by Landlord.
Subject to the provisions of Article XVI of the Lease, Tenant
agrees to be responsible for any damage caused to the roof or
any other part of the Building, which may be caused by Tenant
or any of its agents or representatives.
D Tenant agrees to install only equipment of types and frequencies
which will not cause unreasonable interference to Landlord or
existing tenants of the Building. In the event Tenant's
equipment causes such interference, Tenant will change the
frequency on which it transmits and/or receives and take any
other steps necessary to eliminate the interference. If said
interference cannot be eliminated within a reasonable period of
time, in the judgment of Landlord, then Tenant agrees to remove
the Dish/Antenna from the Roof Space.
E. Tenant shall, at its sole cost and expense, and at its sole
risk, install, operate and maintain the Dish/Antenna in a good
and workmanlike manner, and in compliance with all Building,
electric, communication, and safety codes, ordinances,
standards, regulations and requirements, now in effect or
hereafter promulgated, of the Federal Government, including,
without limitation, the Federal Communications Commission (the
"FCC"), the Federal Aviation Administration ("FAA") or any
successor agency of either the FCC or FAA having jurisdiction
over radio or telecommunications, and of the state, city and
county in which the Building is located. Under this Lease, the
Landlord and its agents assume no responsibility for the
licensing, operation and/or maintenance of Tenant's equipment.
Tenant has the responsibility of carrying out the terms of its
FCC license in all respects. The Dish/Antenna shall be connected
to Landlord's power supply in strict compliance with all
applicable Building, electrical, fire and safety codes. Neither
Landlord nor its agents shall be liable to Tenant for any
stoppages or shortages of electrical power furnished to the
Dish/Antenna or the Roof Space because of any act, omission or
requirement of the public utility serving the Building, or the
act or omission of any other tenant, invitee or licensee or
their respective agents, employees or contractors, or for any
other cause beyond the reasonable control of Landlord, and
Tenant shall not be entitled to any rental abatement for any
such stoppage or shortage of electrical power. Neither Landlord
nor its agents shall have any responsibility or liability for
the conduct or safety of any of Tenant's representatives,
repair, maintenance and engineering personnel while in or on any
part of the Building or the Roof Space.
F. The Dish/Antenna, the appurtenances and the Aesthetic Screening,
if any, shall remain the personal property of Tenant, and shall
be removed by Tenant at its own expense at the expiration or
earlier termination of this Lease or Tenant's right to
possession hereunder. Tenant shall repair any damage caused by
such removal, including the patching of any holes to match, as
closely as possible, the
16
color surrounding the area where the equipment and appurtenances
were attached. Tenant agrees to maintain all of the Tenant's
equipment placed on or about the roof or in any other part of
the Building in proper operating condition and maintain same in
satisfactory condition as to appearance and safety in Landlord's
sole discretion. Such maintenance and operation shall be
performed in a manner to avoid any interference with any other
tenants or Landlord. Tenant agrees that at all times during the
Term, it will keep the roof of the Building and the Roof Space
free of all trash or waste materials produced by Tenant or
Tenant's agents, employees or contractors.
G In light of the specialized nature of the Dish/Antenna, Tenant
shall be permitted to utilize the services of its choice for
installation, operation, removal and repair of the Dish/Antenna,
the appurtenances and the Aesthetic Screening, if any, subject
to the reasonable approval of Landlord. Notwithstanding the
foregoing, Tenant must provide Landlord with prior written
notice of any such installation, removal or repair and
coordinate such work with Landlord in order to avoid voiding or
otherwise adversely affecting any warranties granted to Landlord
with respect to the roof. If necessary, Tenant, at its sole cost
and expense, shall retain any contractor having a then existing
warranty in effect on the roof to perform such work (to the
extent that it involves the roof), or, at Tenant's option, to
perform such work in conjunction with Tenant's contractor. In
the event the Landlord contemplates roof repairs that could
affect Tenant's Dish/Antenna, or which may result in an
interruption of the Tenant's telecommunication service, Landlord
shall formally notify Tenant at least 30 days in advance (except
in cases of an emergency) prior to the commencement of such
contemplated work in order to allow Tenant to make other
arrangements for such service.
H Tenant shall not allow any provider of telecommunication, video,
data or related services ("Communication Services") to locate
any equipment on the roof of the Building or in the Roof Space
for any purpose whatsoever, nor may Tenant use the Roof Space
and/or Dish/Antenna to provide Communication Services to an
unaffiliated tenant, occupant or licensee of another building,
or to facilitate the provision of Communication Services on
behalf of another Communication Services provider to an
unaffiliated tenant, occupant or licensee of the Building or any
other building.
Tenant acknowledges that Landlord may at some time establish a
standard license agreement (the "License Agreement") with
respect to the use of roof space by tenants of the Building.
Tenant, upon request of Landlord, shall enter into such License
Agreement with Landlord provided that such agreement does not
materially alter the rights of Tenant hereunder with respect to
the Roof Space.
J Tenant specifically acknowledges and agrees that the terms and
conditions of Article XIV of the Lease (Indemnity and Waiver of
Claims) shall apply with full force and effect to the Roof Space
and any other portions of the roof accessed or utilized by
Tenant, its representatives, agents, employees or contractors.
K. If Tenant defaults under any of the terms and conditions of this
Section or the Lease, and Tenant fails to cure said default
within the time allowed by Article XIX of the Lease, Landlord
shall be permitted to exercise all remedies provided under the
terms of the Lease, including removing the Dish/Antenna, the
appurtenances and the Aesthetic Screening, if any, and restoring
the Building and the Roof Space to the condition that existed
prior to the installation of the Dish/Antenna, the appurtenances
and the Aesthetic Screening, if any. If Landlord removes the
Dish/Antenna, the appurtenances and the Aesthetic Screening, if
any, as a result of an uncured default, Tenant shall be liable
for all costs and expenses Landlord incurs in removing the
Dish/Antenna, the appurtenances and the Aesthetic Screening, if
any, and repairing any damage to the Building, the roof of the
Building and the Roof Space caused by the installation,
operation or maintenance of the Dish/Antenna, the appurtenances,
and the Aesthetic Screening, if any.
L. Additional Dish/Antennas. If Tenant requests and Landlord
approves additional Dish/Antennas either on Building 4 or on
Building 3, Tenant shall be required to pay an amount equal to
$75.00 per month for each additional Dish/Antenna which shall be
installed in the future.
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XIII. EMERGENCY GENERATOR (WITH TANK).
A. Tenant, subject to Landlord's review and approval of Tenant's
plans therefor, shall have the right to install a supplemental
generator (the "Generator") and an above ground fuel tank (the
"Tank") in size and capacity mutually agreed upon by Landlord
and Tenant, and an Uninterruptible Power Source including an
automatic transfer switch ("UPS") to provide emergency
additional electrical capacity to the Premises during the Term.
Tenant's plans for the Generator and the Tank shall include a
secondary containment system to protect against and contain any
release of hazardous materials. The Generator, the Tank, and the
UPS shall be placed at the location to be mutually agreed to by
Landlord and Tenant (the "Generator Area"). Notwithstanding the
foregoing, Tenant's right to install the Generator, the Tank,
and the UPS shall be subject to Landlord's approval of the
manner in which the Generator, the Tank, and the UPS are
installed, the manner in which any fuel pipe is installed, the
manner in which any ventilation and exhaust systems are
installed, the manner in which any cables are run to and from
the Generator to the Premises and the measures that will be
taken to eliminate any vibrations or sound disturbances from the
operation of the Generator, including, without limitation, any
necessary 2 hour rated enclosures or sound installation.
Landlord shall have the right to require an acceptable enclosure
to hide or disguise the existence of the Generator and the Tank
and to minimize any adverse effect that the installation of the
Generator and the Tank may have on the appearance of the
Building and Property. Tenant shall be solely responsible for
obtaining all necessary governmental and regulatory approvals
and for the cost of installing, operating, maintaining and
removing the Generator, the Tank, and the UPS. Tenant shall not
install or operate the Generator, the Tank, or the UPS until
Tenant has obtained and submitted to Landlord copies of all
required governmental permits, licenses and authorizations
necessary for the installation and operation of the Generator,
the Tank, and the UPS. In addition to, and without limiting
Tenant's obligations under the Lease, Tenant shall comply with
all applicable environmental and fire prevention Laws pertaining
to Tenant's use of the Generator Area. Tenant shall also be
responsible for the cost of all utilities consumed in the
operation of the Generator, the Tank, and the UPS.
Notwithstanding anything herein to the contrary, if Tenant does
not install the Generator and the Tank on or before March
31, 2005, or if Tenant, after installation, removes the
Generator or the Tank from the Generator Area for reasons other
than the repair and replacement of the Generator, Tenant's right
to install and maintain the Generator and the Tank and to use
the Generator Area shall be null and void.
B. Tenant shall be responsible for assuring that the installation,
maintenance, operation and removal of the Generator, the Tank,
and the UPS shall in no way damage any portion of the Building
or Property. To the maximum extent permitted by Law, the
Generator, the Tank, and the UPS and all appurtenances in the
Generator Area shall be at the sole risk of Tenant, and Landlord
shall have no liability to Tenant if the Generator, the Tank,
the UPS or any appurtenances installations are damaged for any
reason. Tenant agrees to be responsible for any damage caused to
the Building or Property in connection with the installation,
maintenance, operation or removal of the Generator and, in
accordance with the terms of Article XIV of the Lease, to
indemnify, defend and hold Landlord and the Landlord Related
Parties harmless from all liabilities, obligations, damages,
penalties, claims, costs, charges and expenses, including,
without limitation, reasonable architects' and attorneys' fees
(if and to the extent permitted by Law), which may be imposed
upon, incurred by, or asserted against Landlord or any of the
Landlord Related Parties in connection with the installation,
maintenance, operation or removal of the Generator, the Tank,
and the UPS, including, without limitation, any environmental
and hazardous materials claims. In addition to, and without
limiting Tenant's obligations under the Lease, Tenant covenants
and agrees that the installation and use of the Generator and
the Tank and appurtenances shall not adversely affect the
insurance coverage for the Building. If for any reason, the
installation or use of the Generator, the Tank and/or the
appurtenances shall result in an increase in the amount of the
premiums for such coverage, then Tenant shall be liable for the
full amount of any such increase.
C. Tenant shall be responsible for the installation, operation,
cleanliness, maintenance and removal of the Generator, the Tank,
and the UPS and the appurtenances, all of which shall remain the
personal property of Tenant, and
18
shall be removed by Tenant at its own expense at the expiration
or earlier termination of the Lease. Tenant shall repair any
damage caused by such removal, including the patching of any
holes to match, as closely as possible, the color surrounding
the area where the Generator, the Tank, the UPS and
appurtenances were attached. Such maintenance and operation
shall be performed in a manner to avoid any unreasonable
interference with any other tenants or Landlord. Tenant shall
take the Generator Area "as is" in the condition in which the
Generator Area is in as of the Commencement Date, without any
obligation on the part of Landlord to prepare or construct the
Generator Area for Tenant's use or occupancy. Without limiting
the foregoing, Landlord makes no warranties or representations
to Tenant as to the suitability of the Generator Area for the
installation and operation of the Generator or the Tank. Tenant
shall have no right to make any changes, alterations, additions,
decorations or other improvements to the Generator Area without
Landlord's prior written consent. Tenant agrees to maintain the
Generator and the Tank, including without limitation, any
enclosure installed around the Generator and the Tank in good
condition and repair. Tenant shall be responsible for performing
any maintenance and improvements to any enclosure surrounding
the Generator and the Tank so as to keep such enclosure in good
condition.
D. Tenant, upon prior notice to Landlord and subject to the rules
and regulations enacted by Landlord, shall have access to the
Generator, the Tank, the UPS and their surrounding areas for the
purpose of installing, repairing, maintaining and removing said
Generator, the Tank, and UPS.
E. Tenant shall only test the Generator before or after Normal
Business Hours and at a time mutually agreed to in writing by
Landlord and Tenant in advance. Tenant shall be permitted to use
the Generator Area solely for the maintenance and operation of
the Generator and the Tank, and the Generator, Tank and
Generator Area are solely for the benefit of Tenant. All
electricity generated by the Generator may only be consumed by
Tenant in the Premises.
F. Landlord shall have no obligation to provide any services,
including, without limitation, electric current, to the
Generator Area.
G. Tenant shall have no right to sublet the Generator Area or to
assign its interest hereunder.
H. Notwithstanding anything to the contrary contained herein, if at
any time during the Term Landlord determines in its sole but
bona fide business judgement, that the Generator, Tank and/or
any appurtenances materially interfere with the operations of
the Building or may violate or give rise to penalties under
applicable Laws (including, without limitation, any ordinances
governing noise levels or hazardous materials), then Tenant
shall, upon notice from Landlord, cease any further operation of
the Generator and Tank (provided, that Landlord will use
reasonable efforts to cooperate with Tenant to locate a suitable
alternative for the Generator and/or Tank). From and after such
notice by Landlord, Tenant shall have no further right to
operate the Generator or Tank unless and until Tenant shall have
redesigned, modified and/or relocated (as described above) the
Generator, Tank and/or installations in a manner approved by
Landlord, provided however, that Landlord's approval of such
redesign and modification shall constitute the mere permission
to operate the Generator and the Tank, which permission shall in
no event be construed to abrogate or diminish Landlord's rights
or Tenant's obligations under this Section XIII or the Lease.
Tenant shall not be obligated to pay Landlord any Additional
Rent or fee for the use of the Generator Area.
XIV. STORAGE. Subject to Landlord and Sierra On-Line ("Sierra") mutually
executing and delivering a termination agreement with respect to
Sierra's lease of the Storage Space (defined below), Landlord shall
provide approximately 762 square feet of storage space under the
Building (the "Storage Space") at a rate of $10.00 per square foot per
annum during the Initial Term. If Landlord and Sierra do not enter into
such a termination agreement, Landlord shall construct storage space for
Tenant with a minimum of 500 square feet. The Additional Rent payable by
Tenant for such new storage space shall be equal to $10.00 per square
foot per annum during the Initial Term. Tenant shall pay no share of
Expenses or Taxes for either storage space.
19
BUILDING SECURITY SYSTEM. Tenant shall have the right to use the
existing card-key security system to access the Building and Building
elevators. In addition, Landlord shall provide initial security cards to
Tenant at no additional cost. There shall be a standard fee charged for
replacement cards. Security provided at the Sunset North Corporate
Campus incorporates a security patrol service. Exterior building doors
are locked between the hours of approximately 6:00 p.m. - 6:00 a.m.
Monday through Friday and 24 hours on Saturday and Sunday.
REPRESENTATIONS. Landlord represents to Tenant that to the best of
Landlord's actual knowledge, the Building does not, on the date of this
Lease, contain any asbestos containing building materials or other
hazardous materials in violation of the legal limitations imposed by
laws applicable to the Building as of the date of this Lease.
PUBLICITY. The Landlord and Landlord Related Parties expressly agree
that there shall be no press releases or other publicity originated by
the parties hereto, or any representatives thereof, concerning this
Lease, without the prior written consent of Tenant.
XVIII. TELECOMMUNICATIONS CABLING AND CONDUIT.
A. Definitions.
1 "Conduit" shall mean:
(a) A pipe installed by Tenant in the ground
underneath the Common Areas of the Property for
the purposes of containing and protecting the
Tenant's Cable (as hereinafter defined), and
other optical fibers, and co-axial, copper or
other wires installed with Landlord's permission
in the Conduit.
(b) A pipe, subject to the prior written approval of
Landlord, installed by Tenant to construct,
install and maintain conduits for routing
Tenant's Cable from the nearest public right of
way to Building 4 and, on or about the Building
3 Must Take Commencement Date, permission to use
one (1) interduct currently installed within
Landlord's conduit between Building 3 and
Building 4 (as well as a second (2nd) interduct
in such conduit following February 28, 2003). In
addition, subject to Landlord's approval,
Landlord will permit Tenant's telecommunications
carrier (i.e., AT&T) to enter into Buildings 3
and 4 for installation within the parking garage
telecommunications closet of facilities
necessary to provide telecommunication services
solely for the benefit of Tenant.
(c) A pipe to connecting communications conduits, if
any, to the public right of way to the Building.
The Conduit installed by Tenant shall be no more
than four inches (4") in diameter (unless a
greater size is either specified by Landlord or
approved in writing by Landlord). The location
of the Conduit shall be subject to the prior
approval of Landlord.
2. "Tenant's Cable", as used in this Section, shall mean
the optical fibers, co-axial and/or copper wires
installed by or on behalf of Tenant for the use of
Tenant located in the Conduit. The optical fibers,
co-axial and/or copper wires which comprise the Tenant's
Cable shall either be encased in an aluminum sleeve or
other fire retardant material or placed in an EMT
conduit.
3. "Communication Services" shall mean phone or computer
network services as Tenant may lawfully provide for its
own, internal business purposes to its Premises, but
expressly excludes any services of any kind to third
parties (including other tenants). Expedia reserves the
right to share networks with partners as deemed
appropriate by Expedia.
▇. ▇▇▇▇▇ of License.
1. Subject to and upon the terms herein set forth, Landlord
grants Tenant a license to install the Conduit for
Tenant's exclusive use and to install, maintain,
operate, repair and replace the Tenant's Cable in the
Conduit
20
solely for Communication Services and for no other
purposes (collectively, the "Communications Work").
Tenant shall have no right to remove the Conduit or the
Tenant's Cable as said Conduit and Tenant's Cable will
become the property of Landlord.
2. Tenant shall not perform its installation of the Conduit
or any installation, replacement, modification, or
enhancement of any Tenant's Cable without first
obtaining Landlord's prior approval, which approval
shall not be unreasonably withheld or delayed. Prior to
starting the Communications Work, Tenant shall furnish
Landlord with plans and specifications; names of
contractors reasonably for Landlord's approval; copies
of contracts; necessary permits and approvals; evidence
of contractor's and subcontractor's insurance in amounts
reasonably required by Landlord; and any security for
performance that is reasonably required by Landlord.
Changes to the plans and specifications must also be
submitted to Landlord for Landlord's approval. The plans
provided to Landlord shall include, at a minimum,
electrical requirements and grounding, heat load, number
of Cables and the size of Conduit required, and shall
specifically identify any bore holes and other
penetration or damage that will be done to the Building
in connection with the installation of the Cable.
Landlord agrees that if the proposed Cable and Conduit
are internal to the Premises, then no consent of
Landlord prior to installation is required. The
Communications Work shall be constructed in a good and
workmanlike manner using materials of a quality that is
at least equal to the quality designated by Landlord as
the minimum standard for the Building. Tenant shall use
commercially reasonable efforts to diligently complete
the Communications Work with due dispatch and as soon as
reasonably practical. Landlord shall designate the
minimum point of entry and network interface will be
designated by Landlord; in accordance with the public
utility commission and other governmental authority with
jurisdiction over such matters in the state in which the
building is located. Landlord may designate reasonable
rules, regulations and procedures for the performance of
the Communications Work and, to the extent reasonably
necessary to avoid disruption to the occupants of the
building, shall have the right to designate the time
when such Communications Work may be performed. Tenant's
Cable and Communications Work shall be performed during
normal business hours unless Tenant obtains prior
written approval by Landlord. Tenant shall reimburse
Landlord within thirty (30) days after receipt of an
invoice for reasonable sums paid by Landlord for third
party examination of Tenant's plans for such
Communications Work. Upon completion, Tenant shall
furnish "as-built" plans, completion affidavits, full
and final waivers of lien in recordable form, and
receipted bills covering all labor and materials. Tenant
shall assure that such Communications Work complies with
all insurance requirements and laws. Landlord's approval
of the Communications Work shall not be a representation
by Landlord that the Communications Work complies with
applicable laws or will be adequate for Tenant's use.
All installations, improvements and alterations made by
Tenant shall be at its sole cost and expense.
3. Tenant acknowledges that Landlord has no obligation to
assure or guarantee Tenant any right of use of property
not owned by Landlord to make connections to public
streets, utilities or adjacent buildings that may be
necessary for the operation of Tenant's Communication
Services in the Building. Tenant also acknowledges that
Landlord has no obligation to assure or guarantee Tenant
the necessary connections to public streets, utilities
or adjacent buildings that may be necessary for the
operation of Tenant's Communication Services in the
Building. Its is solely the responsibility of Tenant to
negotiate agreements with public utilities or third
parties for these connections. Landlord shall cooperate
with Tenant, at Tenant's sole cost and expense, in
obtaining third party permits, easements or agreements
necessary for Tenant to exercise the rights granted to
Tenant herein. In areas owned by Landlord within the
immediate area of the Building, Landlord shall provide
Tenant access necessary for the operation of the
Communication Services subject to restrictions in
existing agreements (such as ground leases) or
instruments of record in the public land records where
title to the Building or underlying property is
recorded.
21
4 Prior to commencing the Telecommunications Work, Tenant
shall obtain any necessary licenses or permits. Landlord
shall have the right to be present during Tenant's
installation of the Tenant's Cable and the Conduit.
Tenant represents that, to the best of its knowledge,
the Communications Work will not interfere with any
currently existing easements or other rights of third
parties with respect to the Property.
5 In the event Tenant or any of its agents,
representatives, employees, invitees, contractors, or
subcontractors cause damage to the Building or the
Property other than normal wear and tear, or cause
damage to the property of licensees or tenants at the
Property, or other third parties, then, at Landlord's
option:
(i) Tenant shall, at Tenant's sole cost, repair such
damage in a timely manner and to Landlord's
reasonable satisfaction
(ii) At Landlord's option, Landlord shall repair such
damage at Tenant's sole cost and expense. If
Landlord elects to repair the damage itself,
Tenant shall, within thirty (30) days of demand,
pay to Landlord as Additional Rent all costs and
expenses associated with or arising from such
work. After the completion of the Communications
Work, Tenant, at Tenant's sole cost and expense,
shall repair and restore all landscaping,
sidewalks, curbs and other aspects of the
Property to the condition which exists prior to
the commencement of the Communications Work.
6. [INTENTIONALLY OMITTED]
7. Tenant will be solely responsible for the installation,
maintenance, and repair of the Tenant's Cable, and
Tenant shall maintain the Tenant's Cable in a
first-class condition. Tenant shall have no right to
remove Tenant's Cable, and Tenant shall have no right to
maintain, repair, remove or replace the Conduit. Any
interruption or termination of, Telecommunications
Services due to the application of Laws, the failure of
any equipment, the performance of repairs, improvements
or alterations, or the occurrence of any event or cause
beyond the reasonable control of Landlord shall not
render Landlord liable to Tenant, constitute a
constructive eviction of Tenant, give rise to an
abatement of Base Monthly Rent, nor relieve Tenant from
the obligation to fulfill any covenant or agreement.
8. Tenant shall not allow any unaffiliated provider of
telecommunication, video, data or related services
("Communication Services") to locate any equipment in
the Conduit for any purpose whatsoever, nor may Tenant
use the Conduit or the Tenant's Cable to provide
Communication Services to an unaffiliated tenant,
occupant or licensee of the Building or any other
building, or to facilitate the provision of
Communication Services on behalf of another
Communication Services provider to an unaffiliated
tenant, occupant or licensee of the Building or any
other building.
9. At the revocation, expiration or termination of either
the Lease, Tenant shall quit and surrender the Conduit
and the Tenant's Cable in good order, condition and
repair.
XIX. LOADING DOCK. Tenant will cooperate with bSquare in order to allow
bSquare to have temporary access to the loading dock serving the 1st
floor of the Building in order to vacate from space leased by bSquare in
the Building. Tenant will have the right to require that bSquare (i)
provide evidence of insurance (naming Tenant as an additional insured)
and (ii) comply with Tenant's reasonable security requirements in
connection therewith.
XX. POST OFFICE BOXES. Landlord shall install, at Landlord's expense,
mailboxes meeting Postal Service requirements for a multi-tenant
building in the "A" level of the Building garage.
22
EXHIBIT F
LETTER OF CREDIT
______________________________
[Name of Financial Institution]
Irrevocable Standby
Letter of Credit
No.________________________________
Issuance Date:_____________________
Expiration Date:___________________
Applicant: Expedia, Inc.,
a Washington
corporation
Beneficiary
EOP-SUNSET NORTH BELLEVUE, L.L.C.,
c/o Equity Office Properties Trust
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Property Manager
Ladies/Gentlemen:
We hereby establish our Irrevocable Standby Letter of Credit in your
favor for the account of the above referenced Applicant in the amount of
_______________ and ____/100 U.S. Dollars ($__________) available for payment at
sight by your draft drawn on us when accompanied by the following documents:
1. An original copy of this Irrevocable Standby Letter of Credit.
2. Beneficiary's dated statement purportedly signed by an authorized
signatory or agent reading: "This draw in the amount of
_____________________ U.S. Dollars ($_______) under your Irrevocable
Standby Letter of Credit No. _______________ represents funds due and
owing to us pursuant to the terms of that certain lease by and between
__________________, as landlord, and _________________, as tenant,
and/or any amendment to the lease or any other agreement between such
parties related to the lease."
It is a condition of this Irrevocable Standby Letter of Credit that it
will be considered automatically renewed for a one year period upon the
expiration date set forth above and upon each anniversary of such date, unless
at least 60 days prior to such expiration date or applicable anniversary
thereof, we notify you in writing that we elect not to so renew this Irrevocable
Standby Letter of Credit. A copy of any such notice shall also be sent to:
Equity Office Properties Trust, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasury Department. Any such notice shall be
delivered by hand or by recognized overnight courier service and shall be deemed
given upon delivery if by hand or one business day after deposit with such
overnight courier service. In addition to the foregoing, we understand and agree
that you shall be entitled to draw upon this Irrevocable Standby Letter of
Credit in accordance with 1 and 2 above in the event that we elect not to renew
this Irrevocable Standby Letter of Credit and, in addition, you provide us with
a dated statement purportedly signed by an authorized signatory or agent of
Beneficiary stating that the Applicant has failed to provide you with an
acceptable substitute irrevocable standby letter of credit in accordance with
the terms of the above referenced lease. We further acknowledge and agree that:
(a) upon receipt of the documentation required herein, we will honor your draws
against this Irrevocable Standby Letter of Credit without inquiry into the
accuracy of Beneficiary's signed statement and regardless of whether Applicant
disputes the content of such statement; (b) this Irrevocable Standby Letter of
Credit shall permit partial draws and, in the event you elect to draw upon less
than the full stated amount hereof, the stated amount of this Irrevocable
Standby Letter of Credit shall be automatically reduced by the amount of such
partial draw; and (c) you shall be entitled to transfer your interest in this
Irrevocable Standby Letter of Credit from time to time and more than one time
without our approval and without charge. In the event of a transfer, we reserve
the right to require reasonable evidence of such transfer as a condition to any
draw hereunder.
1
This Irrevocable Standby Letter of Credit is subject to the Uniform
Customs and Practice for Documentary Credits (1993 revision) ICC Publication
No.500.
We hereby engage with you to honor drafts and documents drawn under and
in compliance with the terms of this Irrevocable Standby Letter of Credit.
All communications to us with respect to this Irrevocable Standby Letter
of Credit must be addressed to our office located at ___________________________
_____________________________________ to the attention of ______________________
__________________________, and must be delivered by hand or by a recognized
overnight courier service. Such notice shall be deemed given upon delivery if
delivered by hand or one business day after deposit with such overnight courier
service.
Very truly yours,
--------------------------
[name]
--------------------------
[title]
--------------------------
2
EXHIBIT G
JANITORIAL CLEANING SPECIFICATIONS
Janitorial services will cover the specifications as follows and it is expected
that all building areas will be maintained and the necessary spot cleanings
performed to ensure the continued satisfaction of the EOP client and employee
base. Equity Office has the right to change the specs from time to time.
Services shall include, not be limited to, the following:
1) OFFICE AREAS (ALL FLOORS)
a) NIGHTLY SERVICES (FIVE (5) NIGHTS PER WEEK)
i) Empty all waste receptacles. Clean, and reline when
needed. Remove material to designated areas.
ii) Remove recycling material when container is full (see
weekly).
iii) Vacuum all carpeted main traffic and use areas,
including conference rooms, with the exception of
individual offices (see weekly). Spot vacuum/clean all
others areas as needed.
iv) Wash and sanitize all drinking fountains.
v) Damp mop spillage in uncarpeted office areas.
vi) Spot clean carpets to remove light spillage. Report
large spills and stains to supervisor.
Assure all designated locked doors are closed after area
has been cleaned.
Activate all alarm systems as instructed by occupant (if
applicable).
ix) Arrange chairs at desk and conference room tables and
turn off lights upon exiting.
x) Spot clean conference room tables if necessary and
remove any remaining food items.
xi) Clean all lunchroom/eating areas. Wash and wipe tables
and counter tops and clean sinks. Pour water down all
sinks weekly to ensure elimination of odor. Remove scuff
marks on floor as needed.
b) WEEKLY SERVICES
i) Remove recycling material when container is full.
ii) Vacuum all carpeted areas completely, private offices
and cubicle interiors, desk knee area spaces and under
waste containers.
iii) Dust and wipe clean with damp or treated cloth all
office furniture, files, and cubicle partition tops, (DO
NOT MOVE PAPERS).
iv) Remove all finger marks and smudges from all vertical
surfaces, including doors, door frames, around light
switches, private entrance glass, and partitions.
v) Damp wipe and polish all glass furniture tops.
vi) Damp mop hard surfaced floors and/or uncarpeted surface
floors.
Sweep uncarpeted floors employing dust control
techniques with exception of lunchroom (which is to be
performed nightly).
1
c) MONTHLY SERVICES
i) Dust and wipe clean chair bases and arms, telephones,
cubicle shelves, window ▇▇▇▇▇, relite ledges and all
other horizontal surfaces as needed to maintain clean
appearance (DO NOT MOVE PAPERS).
ii) Edge vacuum all carpeted areas, as needed.
2) RESTROOMS
a) NIGHTLY SERVICES (FIVE (5) NIGHTS PER WEEK)
i) Clean and sanitize all mirrors, brightwork, countertops
and enameled surfaces.
ii) Wash and disinfect all basins, urinals, bowls (cleaning
underside of rim) and fixtures using scouring powder to
remove stains.
iii) Wash both sides of all toilet seats with soap and/or
disinfectant.
iv) Clean flushometers, piping, toilet seat hinges, and
other metal.
v) Empty, clean, and damp wipe all waste receptacles.
vi) Sweep, wet mop, and sanitize entire floor, including
around toilet seats and under urinals.
Damp wipe all walls, partitions, doors, and outside
surfaces of all dispensers, as needed.
Fill toilet paper, soap, towels, and sanitary napkin
dispensers (if applicable).
ix) Wash and disinfect all showers including shower walls,
floors, brightwork and doors (if applicable).
x) Wash or replace trash liner.
3) LOBBY, ELEVATOR, CORRIDOR, INTERIOR STAIRWAYS AND ENTRANCE AREAS
a) NIGHTLY SERVICE (FIVE (5) NIGHTS PER WEEK)
i) Sweep and wet mop all stone, vinyl or composition lobby
floors.
ii) Vacuum and spot clean all carpeted floor and mats.
iii) Dust and polish all brightwork, including mirrors and
elevator call buttons.
iv) Dust and polish all metal surfaces in elevators,
including tracks, and elevator doors.
v) Vacuum and spot clean all carpet in elevators.
vi) Clean and polish all trash receptacles
Dust all fire extinguisher cabinets and/or units.
Spot clean all doors.
ix) All furniture should be cleaned as necessary (including
directories).
x) Wash, disinfect and dry polish water coolers (if
applicable).
xi) Clean glass entrance doors, adjacent glass panels and
tracks (i.e. relites) (if applicable).
xii) Sweep and/or vacuum all interior stairways and landings
(if applicable).
Maintain lobby floor as recommended by manufacturer.
2
4) JANITORIAL ITEMS/AREAS
a) NIGHTLY SERVICES (FIVE (5) NIGHTS PER WEEK)
i) Keep janitorial rooms in a clean, neat and orderly
condition.
ii) Maintain all janitorial carts and equipment in safe and
clean condition.
5) FITNESS CENTER (IF APPLICABLE) (PLEASE BREAK OUT COST AS SEPARATE BID)
a) NIGHTLY SERVICE
i) Vacuum all exposed carpeted floors.
ii) Spot clean all mirrors and walls.
iii) Spray and disinfect fitness center equipment nightly.
b) WEEKLY SERVICES
i) Edge vacuum all carpeted areas, as needed.
ii) Dust all ledges, as needed.
iii) Clean mirrors completely.
iv) Stocking supplies and towels.
6) LOCKER ROOMS (IF APPLICABLE)
a) NIGHTLY SERVICES (FIVE (5) NIGHTS PER WEEK)
i) Perform complete building restroom cleaning
specifications to restroom and locker room areas.
ii) Clean and disinfect showers completely, including walls,
doors, floors, and floor drains.
7) LOADING DOCK, VAN PARKING AREAS
a) NIGHTLY SERVICES (FIVE (5) NIGHTS PER WEEK)
i) Empty and reline all waste receptacles.
ii) Sweep ramps, loading bays and parking areas for trash
and cigarette butts.
8) GENERAL BUILDING COMMON AREA SERVICES
a) NIGHTLY SERVICE (FIVE (5) NIGHTS PER WEEK)
i) Spot clean and restock, as needed all janitorial service
closets.
ii) Pick up and compact all recycle trash, including boxes
in accordance with tenants recycle specifications.
iii) Vacuum all garage lobbies and elevator carpets
3
EXHIBIT H
EXTERIOR SIGNAGE
SUNSET NORTH CORPORATE CAMPUS, BUILDING 4
[PHOTO OF SUNSET NORTH CORPORATE CAMPUS, BUILDING 4]
SUNSET NORTH CORPORATE CAMPUS, BUILDING 3
[PHOTO OF SUNSET NORTH CORPORATE CAMPUS, BUILDING 3]
1