Exhibit 10.2
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OFFICE LEASE AGREEMENT
BY AND BETWEEN
▇▇▇▇▇ ▇▇▇▇ SQUARE LLC,
a Washington limited liability company
Landlord
and
DWANGO NORTH AMERICA, INC.,
a Texas corporation
Tenant
TABLE OF CONTENTS
Page
1. FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS; EXHIBITS.......................1
1.1. Broker.............................................................1
1.2. Building...........................................................1
1.3. Premises...........................................................1
1.4. Property...........................................................1
1.5. Tenant's Share.....................................................1
1.6. Lease Year.........................................................1
1.7. Commencement Date..................................................1
1.8. Expiration Date....................................................1
1.9. Term...............................................................1
1.10. Base Rent..........................................................2
1.10.1. Landlord's Equity in Exchange for Base Rent...............2
1.11. Early Occupancy....................................................2
1.12. Additional Rent....................................................2
1.13. Base Year..........................................................2
1.14. Security Deposit...................................................2
1.15. Parking............................................................2
1.16. Landlord's Payment Address.........................................2
1.17. Notice Addresses...................................................2
1.18. Permitted Uses.....................................................3
1.19. Landlord's Work....................................................3
1.20. Tenant's Work......................................................3
1.21. Guarantor..........................................................3
1.22. Exhibits...........................................................3
2. PREMISES..................................................................3
2.1. Acceptance of Premises.............................................3
2.2. Tenant Allowance...................................................4
2.3. Relocation or Termination..........................................4
3. LEASE TERM................................................................4
3.1. Duration of Lease Term.............................................4
3.2. Extension Option...................................................5
3.3. Base Rent During Option Term.......................................5
3.4. Tenant Termination Right...........................................5
3.5. Confirmation of Commencement Date..................................6
3.6. Surrender of Premises..............................................6
3.7. Holding Over With Consent..........................................6
3.8. Holding Over Without Consent.......................................6
4. RENT......................................................................6
4.1. Payment............................................................6
4.1.1. Wire Payments.............................................7
4.2. Interest on Late Payments; Late Charge.............................7
4.3. Address for Payments...............................................7
5. SECURITY DEPOSIT..........................................................7
6. USES; COMPLIANCE WITH LAWS................................................7
6.1. Permitted Uses.....................................................7
6.2. Duties and Prohibited Conduct......................................7
6.3. Environmental, Health And Safety Laws..............................8
7. SERVICES AND UTILITIES; REPAIRS AND MAINTENANCE...........................9
7.1. Services and Utilities; Landlord's Obligations.....................9
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7.1.1. Additional Services Or Utilities.........................10
7.2. Services and Utilities; Tenant's Obligations......................10
7.3. Interruption......................................................10
7.4. Landlord's Repair and Maintenance Obligations.....................10
7.5. Tenant's Repair and Maintenance Obligations.......................11
7.6. Additional Security...............................................11
7.7. Tenant's Obligations..............................................11
8. ADDITIONAL RENT: OPERATING COSTS AND REAL ESTATE TAXES...................11
8.1. Definitions.......................................................11
8.1.1. Taxes....................................................11
8.1.2. Operating Costs..........................................12
8.1.3. Tenant's Share...........................................12
8.2. Payment of Additional Rent for Estimated Operating Costs and
Taxes.............................................................13
8.3. Actual Operating Costs and Taxes..................................13
8.4. Determinations....................................................13
8.5. Tenant's Personal Property Taxes..................................13
9. IMPROVEMENTS AND ALTERATIONS BY TENANT...................................13
10. ACCESS...................................................................14
11. DAMAGE OR DESTRUCTION....................................................14
11.1. Damage and Repair.................................................14
11.2. Destruction During Last Year of Term..............................15
11.3. Business Interruption.............................................15
11.4. Tenant Improvements...............................................15
11.5. Express Agreement.................................................15
12. WAIVER OF SUBROGATION....................................................15
13. INDEMNIFICATION..........................................................15
14. INSURANCE................................................................17
14.1. Worker's Compensation.............................................17
14.2. Liability Insurance...............................................17
14.3. Property Insurance................................................17
14.4. Automobile Liability Insurance Requirements.......................17
14.5. Insurance Policy Requirements.....................................17
14.6. Failure to Maintain Insurance.....................................18
14.7. Increased Insurance Costs.........................................18
15. ASSIGNMENT AND SUBLETTING................................................18
15.1. Assignment or Sublease............................................18
15.2. Documentation and Expenses........................................18
15.3. Transferee Obligations............................................19
16. SIGNS....................................................................19
17. LIENS....................................................................19
18. BANKRUPTCY...............................................................20
18.1. Assumption of Lease...............................................20
18.1.1. Definition of Adequate Assurances........................20
18.2. Assignment of Lease...............................................20
18.3. Adequate Protection...............................................21
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19. DEFAULT..................................................................21
19.1. Cumulative Remedies...............................................21
19.2. Tenant's Default; Right to Cure...................................21
19.3. Landlord's Rights And Remedies....................................21
19.3.1. Termination of Lease.....................................21
19.3.2. Re-entry of the Premises.................................21
19.3.3. Termination After Reentry................................22
19.4. Landlord's Damages................................................22
19.4.1. Delinquent Rent..........................................22
19.4.2. Rent After Termination Until Judgment....................22
19.4.3. Rent After Judgment......................................22
19.4.4. Leasing Concessions......................................22
19.4.5. Other Compensation.......................................22
19.4.6. Additional or Alternative Damages........................23
19.4.7. Calculation of Damages...................................23
19.5. Tenant's Property.................................................23
19.6. No Waiver.........................................................23
19.7. Waiver of Notice..................................................23
19.8. Waiver of Redemption Rights.......................................23
19.9. Default by Landlord...............................................23
20. SUBORDINATION AND ATTORNMENT.............................................24
21. REMOVAL OF PROPERTY......................................................24
22. CONDEMNATION.............................................................25
22.1. Entire Taking.....................................................25
22.2. Constructive Taking of Entire Premises............................25
22.3. Partial Taking....................................................25
22.4. Awards and Damages................................................25
23. NOTICES..................................................................25
24. COSTS AND ATTORNEYS' FEES................................................26
25. LANDLORD'S LIABILITY.....................................................26
26. LANDLORD'S CONSENT.......................................................26
27. ESTOPPEL CERTIFICATES....................................................26
28. RIGHT TO PERFORM.........................................................27
29. PARKING..................................................................27
30. AUTHORITY................................................................27
31. GENERAL..................................................................27
31.1. Headings..........................................................27
31.2. Heirs and Assigns.................................................27
31.3. No Brokers........................................................27
31.4. Tenant's Financial Statement......................................27
31.5. Entire Agreement..................................................28
31.6. Severability......................................................28
31.7. Force Majeure.....................................................28
31.8. Right to Change Public Spaces.....................................28
31.9. Governing Law.....................................................29
31.10. Building Directory................................................29
31.11. Building Name.....................................................29
31.12. Quiet Enjoyment...................................................29
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31.13. Survival..........................................................29
31.14. Lender's Consent..................................................29
31.15. Time..............................................................29
31.16. Interpretation....................................................29
31.17. Execution.........................................................29
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OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT ("Lease") is made this 25 day of April, 2002
("Effective Date"), between ▇▇▇▇▇ ▇▇▇▇ Square LLC, a Washington limited
liability company ("Landlord"), and Dwango North America, Inc., a Texas
corporation, ("Tenant"). The parties agree as follows:
1. FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS; EXHIBITS.
Capitalized terms used in this Lease shall have the meanings provided in
this Section 1, unless otherwise specifically modified by provisions of this
Lease.
1.1. Broker. "Broker" shall mean ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Inc. A
commission shall be paid by Landlord to Broker pursuant to a separate agreement
between Landlord and Broker.
1.2. Building. "Building" shall mean the structure commonly known as
▇▇▇▇▇ ▇▇▇▇ Square. The Building is situated on a portion of the real property
legally described in Exhibit A and has a postal address of ▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1.3. Premises. The "Premises" shall mean the space consisting of
approximately 2,238 net rentable square feet located on the fifth (5/th/) floor
of the Building in Suite E-501 and depicted on the floor plan attached to this
Lease as Exhibit B, subject to recalculation in accordance with Section 2. The
Premises shall include the Tenant Improvements, if any, described in Exhibit C.
1.4. Property. The Premises, Building, Land, and the improvements on the
Land other than the Building, are sometimes collectively referred to in this
Lease as the "Property".
1.5. Tenant's Share. "Tenant's Share" shall mean "Tenant's Share of the
Property" or "Tenant's Share of the Building". "Tenant's Share" shall mean one
and forty-eight one hundredths percent (1.48%), calculated by dividing the net
rentable area of the Premises by the net rentable area of the Property
(approximately 151,380 net rentable square feet). The Building load factor is
eleven and ninety-one one hundredths percent (11.91%). In the event the rentable
area of the Premises, Building or Property is altered or recalculated in
accordance with Section 2, Landlord shall adjust Tenant's Share to properly
reflect such event. Landlord's adjustment of such Tenant's Share shall be final.
1.6. Lease Year. "Lease Year" shall mean each twelve-month period
commencing January 1 and ending December 31.
1.7. Commencement Date. Subject to Section 3.1, "Commencement Date" shall
mean May 1, 2002. In the event that the Lease Term commences on a day other than
the first day of a calendar month, then the Commencement Date as specified in
the preceding sentence shall be deemed to be the first day of the next calendar
month, and the Tenant shall be deemed to have been given early occupancy as of
the date specified in the preceding sentence, with all terms of this Lease,
including Rent, and other amounts due to Landlord, applicable to the period of
early occupancy.
1.8. Expiration Date. "Expiration Date" shall mean the date that is three
(3) years after the Commencement Date, unless sooner terminated or extended in
accordance with this Lease.
1.9. Term. "Term" shall mean a period of three (3) years, commencing on
the Commencement Date and terminating on the Expiration Date, unless sooner
terminated or extended in accordance with this Lease.
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1.10. Base Rent. "Base Rent" from the Commencement Date through the
Expiration Date shall mean Four Thousand Four Hundred Seventy-six and 00/100
Dollars ($4,476.00) per month. Base Rent shall be payable as provided in
Section 4.
1.10.1. Landlord's Equity in Exchange for Base Rent. Tenant agrees
to provide Landlord with the equivalent shares of its stock within thirty (30)
days of the Commencement Date as its payment and in full satisfaction of the
Base Rent owing during the first twelve (12) months of the Lease Term. The
number of shares and strike price shall be determined and mutually agreed upon
by Landlord and Tenant prior to the Effective Date of this Lease, but shall
equal Fifty-three Thousand Seven Hundred Twelve and 00/100 Dollars ($53,712.00),
which is the value of the first 12 months Base Rent.
1.11. Early Occupancy. Tenant will be allowed to occupy any square feet
they feel is ready for occupancy before the Commencement Date. Early Occupancy
shall mean any use of the space not directly related to the installation of
equipment or constructing the Premises. During Early Occupancy, "Base Rent" will
be calculated by multiplying the actual occupied rentable square feet by
Twenty-four and 00/100 Dollars ($24.00) per net rentable square foot on an
annualized basis. Tenant will be responsible for all "Additional Rent" as
described in Section 8 on the portion of the space that they occupy early.
1.12. Additional Rent. "Additional Rent" shall mean the amounts described
in Section 8 as Taxes, Personal Property Taxes, Operating Costs, and all other
amounts except Base Rent which are payable by Tenant under this Lease.
1.13. Base Year. "Base Year" shall mean 2002.
1.14. Security Deposit. "Security Deposit" shall mean Four Thousand Four
Hundred Seventy-six and 00/100 Dollars ($4,476.00). The Security Deposit shall
be deposited with Landlord in accordance with Section 5.
1.15. Parking. Subject to Section 29.
1.16. Landlord's Payment Address. "Landlord's Payment Address" shall mean:
▇▇▇▇▇ ▇▇▇▇ Square LLC, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. Tenant
may also arrange for monthly wire transfer of Rent using the following
information:
Bank: The Commerce Bank of Washington, ▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇; ABA # ▇▇▇▇▇▇▇▇▇; Bank Account # ▇▇▇▇▇▇▇; Account Name: ▇▇▇▇▇
Corporation, 12201 Tukwila International Blvd., Fourth Floor, Seattle, WA
98168-5121
1.17. Notice Addresses.
If to Landlord: ▇▇▇▇▇ ▇▇▇▇ Square LLC c/o Sabey Corporation
12201 Tukwila International Blvd., Fourth Floor
Seattle, WA 98168-5121
Attn: Sr. V.P. Real Estate
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ Corporation
12201 Tukwila International Blvd., Fourth Floor
Seattle, WA 98168-5121
Attn.: Sr. V.P. Property Operations & Leasing
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
If to Tenant: Dwango North America, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ______________________
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Fax No. ___________________________
1.18. Permitted Uses. "Permitted Uses" shall mean Tenant's use of the
Premises for general office purposes, subject to the terms and conditions of
this Lease.
1.19. Landlord's Work. "Landlord's Work" shall mean the improvements, if
any, to be made by Landlord in accordance with Exhibit C.
1.20. Tenant's Work. "Tenant's Work" shall mean the improvements, if any,
to be made by Tenant in accordance with Exhibit C and in compliance with Exhibit
F, Tenant & Tenant Contractor Construction Criteria, attached hereto, as may be
updated and modified from time to time by Landlord.
1.21. Guarantor. Intentionally Deleted.
1.22. Exhibits. The following exhibits or riders are attached to this
Lease and are incorporated into this Lease by this reference:
(a) Exhibit A - Legal Description
(b) Exhibit B - Floor Plan of Premises
(c) Exhibit B-1- Modifications to Premises
(d) Exhibit C - Tenant Improvements and Construction Contract
(e) Exhibit C-1- Tenant's Removable Property
(f) Exhibit D - Rules and Regulations
(g) Exhibit E - Tenant & Tenant Contractor Construction Criteria
2. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Premises described in Section 1.3 together with the tenant
improvements described on Exhibit C ("Tenant Improvements") and together with
rights of ingress and egress over public and common areas in the Building and on
the land legally described on Exhibit A, including all easements pertinent to
the land ("Land"). Tenant's lease of the Premises shall be subject to all of the
terms and conditions of this Lease.
Landlord shall complete Landlord's Work in accordance with Exhibit C.
Notwithstanding anything to the contrary in this Lease, Tenant shall provide
Landlord and Landlord's contractor with such access to the Premises as may be
required by Landlord and Landlord's contractor to efficiently perform Landlord's
Work. Tenant acknowledges and agrees that Landlord shall have no obligation to
improve the Premises except as may be expressly set forth on Exhibit C.
Landlord may recalculate the "net rentable square feet" of the Premises
during the Term. The recalculated net rentable square feet shall be certified by
Tenant's architect prior to any change. Net rentable square feet shall be
calculated in accordance with BOMA standards, utilizing a load factor of eleven
and ninety-one one hundredths percent (11.91%) for the Building which may be
changed upon the alteration of tenant spaces or Building common areas. In the
event the net rentable area of the Building or Property is altered during the
Term of this Lease, Tenant's Share of the Property shall be adjusted to reflect
such change.
2.1. Acceptance of Premises. Landlord and Tenant hereby agree that
Landlord's Work as set forth in Section I of Exhibit C shall be constructed by
Landlord's contractor, ▇▇▇▇▇ Construction Inc. Tenant's acceptance of the
Premises shall be deferred until Landlord informs Tenant of the substantial
completion of Landlord's Work
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or Tenant occupies the Premises, whichever occurs first. Substantial completion
shall mean the date certified by Landlord's architect when construction is
sufficiently complete, in accordance with Section I of Exhibit C. If no Tenant
Improvements are to be constructed by Landlord as set forth in Section I of
Exhibit C, then Tenant shall accept the Premises in its "as-is" condition upon
the Effective Date. Within ten (10) days ("Inspection Period") after the date
Landlord informs Tenant of such substantial completion, Tenant shall make such
inspection of the Premises as Tenant deems appropriate. Except as otherwise
specified by Tenant in writing to Landlord within the Inspection Period, Tenant
shall be deemed to have accepted the Premises in its condition and except for
latent defects, as of such date of substantial completion. If, as a result of
such inspection, Tenant discovers items of Landlord's Work of a nature commonly
found on a "punch list" (as such term is commonly used in the construction
industry), which it reasonably believes are not completed in accordance with
Section I of Exhibit C, Tenant shall notify Landlord of such items prior to the
expiration of the Inspection Period. Landlord shall promptly complete repair of
all punch list items identified in Tenant's notice, which it reasonably believes
require repair. The existence of such punch list items shall not postpone the
Commencement Date or the obligation of Tenant to pay Base Rent or Additional
Rent.
2.2. Tenant Allowance. Subject to the terms of this Section 2.2, Landlord
shall provide an allowance to Tenant equivalent to the cost of ▇▇▇▇▇
Construction Inc. modifying the Premises pursuant to Exhibit B-1 attached
hereto. This allowance is payable to Tenant on a progress basis as Tenant
completes the Tenant Improvements set forth in Section II of Exhibit C. "Tenant
Improvements" shall be defined as any work done by Tenant to improve the
Premises for occupancy. The tenant allowance shall not be used for furniture,
art, or any personal property, which does not become attached real property of
Landlord at the end of the Lease Term. Landlord's obligation to pay the tenant
allowance is wholly conditioned upon Tenant not being in default under the terms
of this Lease (subject to applicable cure periods) on the date that any payment
of the tenant allowance is due. In the event this Lease is terminated prior to
the payment of the tenant allowance as a result of Tenant's default hereunder,
Tenant shall be solely liable for payment of any and all amounts of the tenant
allowance to Tenant's contractor. Notwithstanding anything to the contrary in
this Section 2.2, payments of the tenant allowance may be withheld by Landlord
on account of any of the following problems: claims filed or threatened by third
parties in connection with Tenant Improvements; damage to the Property due to
Tenant or its agents, employees, contractors or subcontractors, other
improvements of Tenant to the Premises; or Tenant's breach of any of its
obligations under this Lease. Landlord shall pay the Tenant allowance only after
the problems are remedied by Tenant to Landlord's reasonable satisfaction.
2.3. Relocation or Termination. If Landlord determines that it is
reasonably necessary or desirable that Tenant vacate the Premises, or that the
Premises be altered, in connection with Landlord's expansion, leasing,
reduction, removal, renovation or construction of new or existing improvements,
then Landlord may terminate this Lease, provided Landlord leases Tenant other
reasonably comparable premises, within the Building, on the same terms and
conditions as those contained in this Lease after comparable build-out by
Landlord. Landlord's ability to relocate Tenant shall be conditioned on Landlord
providing space (i) of approximately equivalent size to the original Premises;
(ii) at the same or lesser monthly rent; (iii) with comparable access; and (iv)
with comparable build-out and Tenant improvements at Landlord's expense.
Landlord shall also be required to pay for all moving costs and incidental
costs, including but not limited to the costs for transferring utility and
telephone service, change of stationery and change of address notices.
3. LEASE TERM.
3.1. Duration of Lease Term. Tenant's lease of the Premises shall
commence on the Commencement Date and terminate on the Expiration Date or such
earlier or later date as may be provided for under this Lease. Notwithstanding
anything to the contrary in
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Section 1.7, if Landlord is unable to deliver possession of the Premises to
Tenant with Landlord's Work constructed by Landlord's contractor substantially
completed in accordance with Exhibit C on the date specified in Section 1.7 and
such delay (to the extent of such delay) is due to no fault on the part of
Tenant, then the Commencement Date shall be the earlier of the date on which
Tenant first occupies the Premises or the date that is ten (10) days from the
date of Landlord's written notice to Tenant of substantial completion of
Landlord's Work constructed by Landlord's contractor provided for in Section 2,
above. In no event shall Landlord be liable for damages caused by any such delay
or failure to deliver possession of the Premises.
3.2. Extension Option. Provided that Tenant is in compliance with all the
terms and conditions of this Lease and has not been in default of this Lease
beyond any applicable cure period during the last thirty-six (36) months of the
Lease Term, Tenant shall have the option ("Option") to extend the Term of this
Lease for one (1) additional period of three (3) years (the "Option Term") on
the same terms and conditions of this Lease as are provided for in the initial
Term, except as provided below in this Section 3.2 or in Section 3.3 and without
any free rent periods or Tenant Improvement allowances. The Option Term shall
commence upon the date of expiration of the initial Term of this Lease. To
exercise its Option, Tenant must give written notice to Landlord that Tenant is
exercising its Option at least six (6) months before the date of expiration of
the initial Term. Once such notice is delivered to Landlord, such notice shall
be irrevocable by Tenant. If, in Landlord's reasonable discretion, Landlord
determines that the creditworthiness of Tenant is materially less than the
creditworthiness of Tenant as of the Lease's execution date, Landlord may
nullify Tenant's exercise of its Option by written notice to Tenant. Tenant
acknowledges and agrees that notwithstanding anything to the contrary in this
Lease, the right to exercise the Option shall not extend to any assignee or
subtenant of Tenant, or to any space assigned or subleased by Tenant, and any
attempt to exercise the Option by any such assignee or subtenant, or by Tenant
in connection with such assigned or subleased space, shall be deemed null and
void. Tenant further acknowledges and agrees that the amount of the Security
Deposit payable by Tenant for the Option Term may be increased to an amount
equal to the first monthly installment of Base Rent payable by Tenant during the
Option Term.
3.3. Base Rent During Option Term. In the event that Tenant elects to
exercise its Option to extend the Term of this Lease in accordance with the
terms of Section 3.2, the Base Rent for the Option Term shall be equal to the
then-market rent for similarly improved space in comparable buildings for
comparable use in the lower ▇▇▇▇▇ ▇▇▇▇ region as determined by Landlord;
provided, however, that in no event shall the Base Rent during the Option Term
be less than the Base Rent for the last year of the initial Lease Term. The
adjusted Base Rent shall commence on and be payable on the first day of the
Option Term and shall continue thereafter throughout the Option Term.
3.4. Tenant Termination Right. Subject to the terms and conditions of
this Section 3.4, Tenant shall have a right to terminate this Lease. Tenant's
termination right under this Section 3.4 may be exercised only by Tenant
relocating to a larger space, which is owned by an entity of ▇▇▇▇▇ Corporation.
Time is of the essence regarding Tenant's notice to Landlord of its exercise of
the termination right under this Section 3.4. Tenant's right to terminate the
Lease under this Section 3.4 shall be wholly conditioned upon Tenant not being
in default, after expiration of any applicable notice or cure periods, under
this Lease either at the time of Tenant's exercise of its termination right or
on the date of Tenant's termination of the Lease under this Section. Landlord
reserves the right to cancel Tenant's termination option in the event that
Tenant has committed acts or omissions of default for which two or more default
notices are given by Landlord in any consecutive twelve (12) month period
pursuant to Section 19.2 below. Tenant's obligations to pay Rent, Additional
Rent, and any other costs or charges under this Lease, and to perform all other
Lease obligations for the period up to and including the Termination Date, shall
survive the termination of this Lease. Any purported exercise by Tenant of its
termination
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right other than strictly in accordance with this Section 3.4 shall be void and
have no force or effect.
3.5. Confirmation of Commencement Date. If the Commencement Date is not
the date indicated in Section 1.7, Landlord may confirm the Commencement Date to
Tenant in writing within a reasonable time after delivery of the Premises in
accordance with this Lease.
3.6. Surrender of Premises. Subject to Section 11, Tenant shall promptly
and peacefully surrender the Premises to Landlord upon the termination of the
Lease Term in as good a condition as when received by Tenant from Landlord
and/or as thereafter improved, if applicable, normal wear and tear excepted.
Unless Landlord expressly provides otherwise in writing to Tenant, upon the
expiration or termination of this Lease, all improvements and additions to the
Premises except those items set forth on Exhibit C-1 shall be deemed property of
Landlord and shall not be removed by Tenant from the Premises. Tenant shall be
solely responsible for, and shall repair, all damage to the Property arising out
of its surrender of the Premises. In addition to all other requirements under
this Lease, Tenant shall remove any Hazardous Substances, as such term is
defined in Section 6.3, on the Premises which were placed on the Premises by
Tenant, its employees, agents, contractors and/or invitees, prior to its
surrender and vacation of the Premises.
3.7. Holding Over With Consent. If Tenant remains in possession of the
Premises after termination or expiration of the Lease Term with Landlord's
written permission, such tenancy shall be deemed a month-to-month tenancy, which
may be terminated by either party upon twenty (20) days' notice. During such
tenancy, Tenant shall be bound by all of the terms, covenants and conditions in
this Lease so far as applicable, except that the Base Rent shall be increased to
the greater of (i) the then-quoted rates for similar space in the Building or
(ii) one hundred fifty percent (150%) multiplied by the sum of the monthly
installment of Base Rent and Additional Rent payable for the last month of the
Lease Term.
3.8. Holding Over Without Consent. If Tenant remains in possession of the
Premises after the termination or expiration of the Lease Term without
Landlord's prior written consent, Tenant shall become a tenant at sufferance
only, subject to all the provisions of this Lease so far as applicable, except
that Base Rent shall be increased to an amount equal to two hundred percent
(200%) multiplied by the sum of the monthly installments of Base Rent and
Additional Rent payable by Tenant during the last month of the Lease Term,
prorated on a daily basis. Acceptance by Landlord of Rent after the termination
of the Lease Term shall not result in a renewal or extension of this Lease. The
provisions of Section 3.7 and this Section 3.8 are in addition to, and shall not
act as a waiver of or otherwise affect, Landlord's right of re-entry or any
other rights of Landlord under this Lease or as provided by law or in equity. If
Tenant fails to surrender the Premises upon the termination of the Lease Term,
despite Landlord's demand to do so, Tenant shall indemnify, defend and hold
Landlord harmless from and against all loss and liability, including, without
limitation, any claim made by any succeeding tenant founded on, or resulting
from, such failure to surrender, including without limitation, any attorneys'
fees or costs associated therewith.
4. RENT.
4.1. Payment. Tenant shall pay Landlord the monthly installments of Base
Rent provided in Section 1.9 and Additional Rent provided in Section 1.11 in
lawful money of the United States, in advance, on the Commencement Date and
thereafter on or before the first day of each month throughout the Lease Term.
Base Rent and Additional Rent shall be paid by Tenant without notice or demand,
deduction, abatement, or offset, except as expressly provided herein. Base Rent
and Additional Rent for any partial month at the beginning or end of the Lease
Term shall be prorated in proportion to the number of
6
days in such month. Base Rent and Additional Rent are collectively referred to
in this Lease as "Rent".
4.1.1. Wire Payments. Any amounts payable to Landlord under this Lease
in excess of One Hundred Thousand and No/100 Dollars ($100,000.00) per
occurrence shall be made by wire transfer as follows:
Bank: The Commerce Bank of Washington, ▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇; ABA # ▇▇▇▇▇▇▇▇▇; Bank Account # ▇▇▇▇▇▇▇; Account Name: ▇▇▇▇▇ Corporation,
12201 Tukwila International Blvd., Fourth Floor, Seattle, WA 98168-5121. Should
Tenant fail to wire amounts above One Hundred Thousand Dollars ($100,000), a one
-half of one percent (0.5%) fee will be charged for handling the check.
4.2. Interest on Late Payments; Late Charge. If any Base Rent or
Additional Rent is not paid on the due date thereof: (i) such overdue amounts
shall bear interest at a rate equal to eighteen percent (18%) per annum; and
(ii) Tenant shall pay Landlord a late charge equal to five percent (5%) of such
overdue amount. The parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant, the exact amount of which would be difficult to ascertain.
Acceptance by Landlord of any partial amounts due under this Section 4 shall in
no event constitute a waiver of Tenant's default with respect to any overdue
amount, nor prevent Landlord from exercising any of its other rights and
remedies granted under this Lease or by law or in equity.
4.3. Address for Payments. Tenant shall pay all Rent to Landlord at
Landlord's Payment Address, or at such other place as may be designated by
Landlord from time to time by written notice to Tenant.
5. SECURITY DEPOSIT. As security for the full and faithful performance of
every covenant and condition of this Lease to be performed by Tenant, Tenant
shall pay to Landlord the Security Deposit specified in Section 1.14. If Tenant
defaults with respect to any covenant or condition of this Lease, including but
not limited to, the payment of Base Rent or Additional Rent or other amounts due
under this Lease, Landlord may apply all or any part of the Security Deposit to
the payment of any sum in default or payment of any other sum which Landlord may
be required or may in its reasonable discretion deem necessary to spend or incur
by reason of Tenant's default. In such event, Tenant shall deposit with Landlord
the amount so applied within five (5) days of written demand from Landlord. If
Tenant shall have fully complied with all of the covenants and conditions of
this Lease the amount of the Security Deposit then held by Landlord shall be
repaid to Tenant (or, at Landlord's option, to the last assignee of Tenant's
interest under this Lease) within thirty (30) days after the expiration or
sooner termination of this Lease. In the event of Tenant's default under this
Lease, Landlord's right to retain the Security Deposit shall be deemed to be in
addition to any and all other rights and remedies available to Landlord under
this Lease, at law or in equity. Landlord shall not be required to keep any
Security Deposit separate from its general funds and Tenant shall not be
entitled to any interest on the Security Deposit.
6. USES; COMPLIANCE WITH LAWS.
6.1. Permitted Uses. The Premises are to be used only for the Permitted
Uses, and for no other business or purpose without the prior written consent of
Landlord, which consent may be withheld if Landlord, in its reasonable
discretion, determines that any proposed use is inconsistent with or detrimental
to the maintenance and operation of the Building as a similar office building or
is inconsistent with any restriction on use of the Property contained in any
lease, mortgage or other agreement or instrument by which the Landlord may be
bound or to which any of the Property may be subject.
6.2. Duties and Prohibited Conduct. Notwithstanding anything to the
contrary in this Lease, Tenant shall not commit any act that will increase the
then-existing
7
rate of insurance on the Building without Landlord's prior written consent.
Tenant shall promptly pay upon demand the amount of any increase in insurance
rates caused by the Permitted Uses or by any act or acts of Tenant or its
employees, agents or representatives. Tenant shall not commit or allow to be
committed any waste upon the Premises, or any public or private nuisance or
other act which disturbs the quiet enjoyment of any other tenant of the Property
or which is unlawful. Tenant shall not, without the written consent of Landlord,
use any apparatus, machinery or device in or about the Premises, or act in any
way, which will cause any substantial noise, or any vibration, fumes, or
releases of Hazardous Substances into the surrounding environment. If any of
Tenant's office machines, equipment or activities should disturb the quiet
enjoyment of any other tenant in the Building, cause any substantial noise, or
cause any vibration, fumes or releases of Hazardous Substances, then Tenant, at
Tenant's sole expense, shall provide adequate insulation or take such other
action as may be necessary to eliminate such disturbance, noise, vibration,
fumes or releases. Tenant, at Tenant's expense, shall comply with all laws,
rules, regulations, orders, ordinances and permits relating to the Premises, or
its use or occupancy of the Premises, and shall observe such rules and
regulations as may be adopted by Landlord and made available to Tenant from time
to time. This Lease shall be subject to all applicable zoning ordinances and to
all municipal, county, state and federal laws and regulations governing or
regulating the use of the Premises.
6.3. Environmental, Health And Safety Laws. Without limiting Tenant's
obligations under this Section 6, Tenant in the exercise of its rights and the
performance of its obligations under this Lease shall comply, at Tenant's
expense, with all local, state, or federal laws, rules, regulations, ordinances,
orders and permits now existing, or as hereafter enacted, amended, or issued
concerning environmental, health, or safety matters (collectively, the
"Environmental Laws"). Tenant shall not use the Premises for, or permit anything
to be done in or about the Property which may subject Landlord, any guarantor,
or any mortgagee under any mortgage covering the Property, to liability for
remediation costs or other damages or penalties under any Environmental Laws
resulting from Tenant's use of, or conduct on, the Property, including without
limitation, the use, generation, transportation, management, handling,
treatment, storage, manufacture, emission, release, disposal or deposit of any
radioactive material, hazardous or toxic wastes, hazardous or toxic substances,
any material containing hazardous wastes or hazardous substances (except as they
occur in normal office products or household cleaning products), or any other
pollutant, contaminant, human pathogen or infectious agent as such terms may now
or in the future be defined in any Environmental Laws (collectively, "Hazardous
Substances"), on the Property, adjacent surface waters, soils, underground
waters, or air.
Landlord shall have the right at all reasonable times upon notice to Tenant
to conduct environmental investigations, including the taking of samples, for
the purpose of detecting or measuring the presence of Hazardous Substances on
the Property. Tenant shall keep Landlord continuously informed by written notice
of all Hazardous Substances which Tenant, or Tenant's employees, agents,
representatives, invitees, licensees, or contractors, generates, stores or
otherwise allows on the Property. Tenant shall provide Landlord with copies of
all documents received or prepared by Tenant concerning any release of a
Hazardous Substance at the Property, all documents Tenant receives or prepares
in connection with any violation, or alleged violation, of an Environmental Law
by Tenant, and all reports or other documents Tenant is required to provide any
governmental authority under any Environmental Law concerning any Hazardous
Substance. Upon request by Landlord, Tenant shall provide Landlord with all
other information, which Landlord reasonably deems necessary or useful for the
purpose of determining whether Tenant is in compliance with all Environmental
Laws and whether the Property, or any part of the Property, is contaminated by
any Hazardous Substances. If Tenant or the Premises is in violation of any
Environmental Law, or in the event of a release of Hazardous Substances into or
on the Property or adjacent surface waters, soils, underground waters, or air,
Tenant shall (i) immediately notify Landlord in writing of such occurrence and
the action necessary to correct or mitigate such occurrence, and (ii) take
8
such action as is necessary to mitigate and correct such violation or release.
Provided, however, Landlord reserves the right, but not the obligation, to enter
the Premises, to act in place of the Tenant (and Tenant hereby appoints Landlord
as its agent for such purposes) and to take such action as Landlord deems
necessary to ensure compliance or to mitigate the violation, at Tenant's
expense. If Landlord has a reasonable belief that Tenant is in violation of any
Environmental Law, or that Tenant's actions or inaction presents a threat of
violation or a threat of damage to the Property, Landlord reserves the right to
enter the Premises and take such corrective or mitigating action as Landlord
deems necessary. All costs and expenses incurred by Landlord in connection with
any such actions shall become immediately due and payable by Tenant upon
presentation of an invoice therefore.
Tenant shall not conduct or permit others to conduct environmental testing
on the Premises without first obtaining Landlord's written consent. Tenant shall
promptly inform Landlord of the existence of any environmental study,
evaluation, investigation or results of any environmental testing conducted on
the Premises, whenever the same becomes known to Tenant and Tenant shall provide
copies to Landlord, upon request by Landlord and at no cost to Landlord.
Notwithstanding the foregoing, in no event shall Tenant be responsible for or
liable to Landlord for any Hazardous Substances located in the Premises that
existed or were released upon the Premises prior to the Commencement Date of
this Lease.
Notwithstanding any other provisions of this Lease, Tenant's obligations
and responsibilities for the proper use, storage and maintenance of Hazardous
Substances and for any breach of the obligations pursuant to this Paragraph 6.3,
shall survive any expiration or any termination of this Lease.
7. SERVICES AND UTILITIES; REPAIRS AND MAINTENANCE.
7.1. Services and Utilities; Landlord's Obligations. Landlord warrants
that the Building's mechanical, electrical and plumbing systems are designed and
suitable for the delivery of heating, ventilation, air-conditioning ("HVAC"),
electrical and water (including sewer) services sufficient for standard office
use. Landlord shall supply the Premises with HVAC, electricity and, if
applicable, water sufficient for standard office use (including convenience
electricity for lighting and operation of low power usage office machines of
three and one-half (3-1/2) ▇▇▇▇▇ per usable square foot), the cost of which
shall be paid by the Tenant in accordance with Section 8.2. HVAC service will be
limited to 7:00 a.m to 6:00 p.m on weekdays (excluding holidays recognized by
Landlord) ("Normal Business Hours"), except for additional service as provided
for in this Lease. Landlord shall supply Landlord's standard Building and
Property security and fire monitoring services and elevator service, Landlord's
standard trash removal services (excluding disposal of Hazardous Substances or
medical or biological waste) from the Building compactor, if any, bulb
replacement services for Building standard light fixtures, and Landlord's
standard exterior window washing services for Premises' windows. Landlord shall
also provide standard office janitorial services to the Premises.
All services or utilities which are required to be provided by Landlord
under Section 7.1 which are not separately metered by the service or utility
provider shall be included within "Operating Costs" and shall be paid by Tenant
each month as provided in Section 8. The cost for any services or utilities,
which are not separately metered or sub-metered shall be based on Landlord's
reasonable estimate of Tenant's consumption of such utilities. If in Landlord's
reasonable opinion Tenant's consumption of any utility is extraordinary,
Landlord shall be entitled to install, maintain and operate, at Tenant's cost, a
monitoring/ metering system(s) in the Premises to measure Tenant's consumption
of water, electricity (including electricity to Tenant's signage, if any) HVAC
or other utilities or services, or to measure the added demands on the Premises'
electrical or HVAC systems resulting from Tenant's equipment or lights,
including without limitation, Tenant's improvements pursuant to Exhibit C.
9
Landlord's obligation to provide the services and utilities described in
this Section 7.1 is subject to Section 11 (Damage And Destruction) and Section
22 (Condemnation).
7.1.1. Additional Services Or Utilities. The Building standard
mechanical system is designed to accommodate standard office use heating loads
generated by lights or equipment using up to three (3) ▇▇▇▇▇ per usable square
foot. Before installing fixtures, lights or equipment in the Premises, which in
the aggregate exceed such amount, or which otherwise consume or require services
or utilities exceeding standard office-type levels, Tenant shall obtain the
written permission of Landlord. Landlord may refuse to grant such permission
unless Tenant agrees to pay Landlord's costs, including Landlord's
administrative fee, for installation of supplementary air conditioning capacity
or electrical systems as necessitated by such equipment or lights. In addition,
Tenant shall pay Landlord as Additional Rent the amount estimated by Landlord
(including Landlord's administrative fee) as the cost of furnishing services or
utilities for the operation of such equipment or lights and the cost of
operation and maintenance of any supplementary air conditioning units
necessitated by Tenant's use of such equipment or lights.
During other than normal business hours (7:00 a.m. to 6:00 p.m., weekdays),
Landlord may restrict access to the Building in accordance with the Building's
security system, provided that Tenant shall have at all times during the Term of
this Lease (24 hours of all days) reasonable access to the Premises.
If after request by Tenant, Landlord furnishes HVAC or other services or
utilities in addition to the utilities or services required to be provided by
Landlord under this Lease, including without limitation, furnishing utilities or
services at times other than Normal Business Hours or in amounts exceeding
standard office use, then the cost of such non-standard or additional services
or utilities, as reasonably established by Landlord, shall be paid by Tenant as
Additional Rent.
7.2. Services and Utilities; Tenant's Obligations. Tenant shall be solely
responsible for providing, and shall pay directly, all charges for any security
services desired by Tenant in addition to Landlord's standard Building and site
security services. Tenant shall be solely responsible for providing, at Tenant's
cost, any backup electricity generator desired by Tenant. It is understood that
except as provided in Sections 7.1 or 7.4, Landlord shall not be required to
provide any services or utilities to Tenant, and Tenant shall make all necessary
arrangements to have such services and utilities billed directly to Tenant and
paid directly by Tenant. Tenant shall pay its share, as reasonably determined by
Landlord, of any unique services or equipment used by Tenant which are shared by
other tenants of the Building, such as generators, dilution tanks and air
compressors.
7.3. Interruption. Landlord shall not be liable for any loss, injury or
damage to persons or property caused by or resulting from any variation,
interruption, or failure of services or utilities to be provided by Landlord
under this Lease due to any cause whatsoever, including without limitation,
Landlord's failure to make any repairs or perform any maintenance required to be
performed by Landlord under this Lease. No temporary variation, interruption or
failure of services or utilities to be provided by Landlord under this Lease
incident to the making of repairs, alterations or improvements, or due to
accident, strike or conditions or events beyond Landlord's reasonable control,
shall be deemed an eviction of Tenant or relieve Tenant from any of Tenant's
obligations under this Lease.
7.4. Landlord's Repair and Maintenance Obligations. Except as provided in
Sections 9 (Improvements and Alterations by Tenant), 11 (Damage or Destruction)
or 22 (Condemnation), Landlord shall cause to be maintained in reasonably good
order and condition the Building (other than any leased premises) and the public
and common areas of the Property, such as lobbies, elevators, stairs, corridors
and restrooms; provided, however, Tenant shall be responsible for the cost of
repair of damage occasioned by any
10
act or omission of Tenant or Tenant's officers, contractors, agents, invitees,
licensees or employees, subject to Section 12, Waiver of Subrogation. Landlord
shall maintain and repair the Premises' water, if applicable, and elevator
service at all times during the term of the Lease.
7.5. Tenant's Repair and Maintenance Obligations. Except for maintenance,
replacements and repairs required to be made or provided by Landlord under
Sections 7.1 or 7.4, Tenant, at its sole cost and expense, shall provide for the
maintenance in accordance with the manufacturer's recommendations, repair and
replacement within the Premises and all built-in appliances and equipment,
including any private restrooms and associated plumbing, which are in the
Premises for Tenant's exclusive use and any security systems or services desired
by Tenant in addition to any such systems or services as may be provided by
Landlord under this Lease.
7.6. Additional Security. In the event that Tenant's use of the Premises,
or its presence in the Building, results in the need for additional security for
the Premises or the Building, as determined by Landlord, then any additional
security provided by Landlord for the Building or the Premises shall be at
Tenant's sole cost and expense, and shall be reimbursed by Tenant to Landlord
within five (5) days of written demand. This Section shall include, without
limitation, any additional security required as a result of labor disturbances,
strikes, political protests, dangerous activities, and any other disturbance or
disruption of any kind.
7.7. Tenant's Obligations. In performing its obligations under this
Section 7, Tenant, at Tenant's expense, shall comply with all Environmental Laws
and all other applicable laws, ordinances, codes, orders, rules or regulations
of any governmental authority. Tenant shall retain, and shall provide Landlord
upon request, copies of Tenant's maintenance and service contract(s). Except as
provided in Section 9 in connection with Alterations, before making or
performing any work, repairs, or replacement of any kind in the Premises, if
such work shall affect the Building's systems or costs of operation to Landlord
then Tenant shall obtain Landlord's prior written approval, which approval may
be conditioned on Tenant providing Landlord with plans and specifications
therefore, if applicable, which are acceptable to Landlord. All work,
maintenance, repairs and replacements by Tenant under this Lease shall be
performed by licensed contractors acceptable to Landlord. Tenant shall provide
Landlord with copies of all contracts or purchase orders, for such work,
maintenance, repairs and replacements prior to having such work, maintenance,
repairs or replacements performed. Before installing any heavy equipment or
fixtures in the Premises, Tenant shall submit the plans and specifications
therefore to Landlord for Landlord's written approval.
8. ADDITIONAL RENT: OPERATING COSTS AND REAL ESTATE TAXES.
8.1. Definitions. In addition to the Base Rent, Tenant shall pay to
Landlord each month as Additional Rent Tenant's Share of Taxes and of Operating
Costs as provided in this Section 8, using the following definitions:
8.1.1. Taxes. "Taxes" shall mean taxes on real property and personal
property, charges and assessments (or any installments thereof due during the
Lease Year) levied with respect to the Property, any improvements, fixtures and
equipment on the Property, and all other property of Landlord, real or personal,
used directly in the operation of the Property, and any taxes levied or assessed
(or any installment thereof due during the Lease Year) in addition to or lieu
of, in whole or in part, such real property or personal property taxes, or any
other tax upon leasing of the Property and/or Building or rents collected, but
not including any federal or state income, estate, business and occupation
(except to the extent that a rental tax is imposed as a business and occupation
tax), inheritance or franchise tax.
11
8.1.2. Operating Costs. "Operating Costs" shall mean all expenses
other than Taxes paid or incurred by Landlord for obtaining services and
products for maintaining, operating, equipment replacement, and repairing the
Property, including without limitation, the Property's public and common areas,
and the personal property used in conjunction therewith, and which shall
include, without limitation, the costs of Landlord performing its maintenance
and repair obligations under this Lease, depreciation and amortization of
capital improvements made subsequent to the initial development of the Property
or Building which are designed with a reasonable probability of enhancing the
health and/or safety of the Property or improving the operating efficiency of
the Property or Building, security services for the Property, fire alarm system
monitoring and testing, refuse collection, maintaining water, sewer, storm
drainage and other utility systems and services, common area electricity, gas
and other similar energy sources, supplies, Premises janitorial, common area
janitorial and cleaning services, exterior window washing, landscape planting,
maintenance and irrigation, services of independent contractors (including any
market-rate management fees which may be or become payable to third parties),
compensation (including employment taxes and fringe benefits) of all persons who
perform duties in connection with the operation, maintenance and repair of the
Property and its equipment, the maintenance, resurfacing, repair and striping of
parking areas and curbs (including driveways, loading zones and access
easements), downspouts and gutters, lighting and outdoor facilities, premiums
for Landlord's insurance (including applicable interest charges), insurance
deductibles, licenses, permits and inspection fees, a management fee, reasonable
legal, administrative and accounting expenses, and any other expense or charge
whether or not hereinabove described, which in accordance with generally
accepted management practices would be considered an expense of maintaining,
operating, or repairing the Property, excluding or deducting, as appropriate
costs of any special services rendered to individual tenants (including Tenant)
for which a special charge is collected including, without limitation, any
specially metered charges. Notwithstanding the foregoing, Operating Costs shall
not include the following:
(1) attorney's fees, accounting fees and other expenditures incurred in
connection with negotiations, disputes and claims of other tenants or occupants
of the Building, except as specifically otherwise provided in this Lease;
(2) costs directly attributable to or for the sole benefit of a tenant,
including Tenant;
(3) rental on ground leases or other underlying leases;
(4) cost of any work or services to the extent performed for any facility
other than the Building (provided Landlord shall have the right to reasonably
allocate the cost of services provided to more than one facility);
(5) costs due to Landlord's willful violation of any governmental rule or
authority;
(6) charitable or political contributions;
(7) any fees paid to related parties of Landlord which exceed the market
rate for similar services.
8.1.3. Tenant's Share. "Tenant's Share" in connection with Operating
Costs and Taxes shall mean Tenant's Share of the Property multiplied by actual
or estimated, as the case may be, Operating Costs or Taxes allocated to the
Property, respectively. Notwithstanding anything to the contrary in Section
8.1.2, in determining the amount of Operating Costs, for the purpose of Section
8.1.2: (a) if less than ninety-five percent (95%) of the Building shall have
been occupied by tenants and fully used by them at any time, Operating Costs
shall be increased to an amount equal to the like Operating Costs which would
normally be expected to be incurred had such occupancy been ninety five percent
(95%) and had such full utilization by tenants been made during
12
the entire period; and (b) if the Landlord is not furnishing any particular work
or service (the cost of which if performed by the Landlord would constitute an
Operating Cost) to a tenant who has undertaken to perform such work or service
in lieu of the performance thereof by the Landlord, Operating Costs shall be
deemed for the purposes of Section 8.1.2 to be increased by an amount equal to
the additional Operating Costs which would reasonably have been incurred during
such period by the Landlord if it had at its own cost furnished such work or
service to such tenant.
8.2. Payment of Additional Rent for Estimated Operating Costs and Taxes.
Within thirty (30) days of the Commencement Date or the close of each Lease
Year, as applicable, or as soon thereafter as is practicable, Landlord shall
provide Tenant with a written statement of Tenant's Share of estimated increases
in Operating Costs and Taxes for such Lease Year over the actual Operating Costs
and Taxes for the Base Year. Tenant shall pay 1/12 of the amount of any special
or specific Tenant charges and increases, and Tenant's Share of Operating Costs
and Taxes as Additional Rent as provided in Section 4 each month during such
Lease Year and until such time as Landlord provides Tenant with a statement of
estimated increases in the Operating Costs and Taxes for the subsequent Lease
Year. If at any time or times during such Lease Year, it appears to Landlord
that Tenant's Share of actual Operating Costs and/or actual Taxes will vary from
the estimated Operating Costs and/or Taxes by more than five percent (5%) on an
annual basis, Landlord may, by written notice to Tenant, revise its estimate for
such Lease Year and Additional Rent payable by Tenant under this Section 8.2 for
such Lease Year shall be increased based on Landlord's revised estimate.
8.3. Actual Operating Costs and Taxes. Landlord will make reasonable
efforts within ninety (90) days after the close of each Lease Year during the
Term hereof for which an estimated statement was delivered to Tenant pursuant to
Section 8.2, to deliver to Tenant a written statement ("Reconciliation
Statement") setting forth Tenant's Share of the actual Operating Costs and Taxes
paid or incurred by Landlord during the preceding Lease Year (or such prorated
portion of such Lease Year if this Lease commences or terminates on a day other
than the first or last day of a Lease Year, based on a 365-day Lease Year). If
the actual Operating Costs and/or Taxes shown on the Reconciliation Statement
for any Lease Year exceed estimated Operating Costs and/or Taxes paid by Tenant
to Landlord pursuant to Section 8.2, Tenant shall pay the excess to Landlord as
Additional Rent within thirty (30) days after the date of the Reconciliation
Statement. If the Reconciliation Statement shows that actual Operating Costs
and/or Taxes are less than the estimated Operating Costs and/or Taxes paid by
Tenant to Landlord pursuant to Section 8.2, then the amount of such overpayment
shall be credited by Landlord to the next Additional Rent payable by Tenant (or
refunded to Tenant in the event of the termination or expiration of this Lease).
Notwithstanding anything to the contrary in this Section 8.3, Tenant's Share of
Operating Costs and Taxes for any partial Lease Year at the end of the Term
shall be as shown on Landlord's statement of estimated Operating Costs and Taxes
furnished to Tenant pursuant to Section 8.2.
8.4. Determinations. The determination of actual and estimated Operating
Costs and Taxes shall be made by Landlord. Landlord or its agent shall keep
records in reasonable detail showing all expenditures made for the items
enumerated in this Section 8.
8.5. Tenant's Personal Property Taxes. Tenant shall pay prior to
delinquency all Personal Property Taxes payable with respect to all Property of
Tenant located on the Premises or the Property and, upon Landlord's request,
shall promptly provide Landlord with written proof of such payment. Solely for
purposes of this Section 8.5, "Property of Tenant" shall include Landlord's
Work, Tenant's Work and all other improvements which are paid for by Tenant, and
"Personal Property Taxes" shall include all property taxes assessed against the
Property of Tenant, whether assessed as real or personal property.
9. IMPROVEMENTS AND ALTERATIONS BY TENANT. Except for the Tenant Improvements,
Tenant shall not make any changes, alterations, additions or
13
improvements in or to the Premises ("Alterations"), including, without
limitation, changes to locks on doors or to plumbing or wiring, without first
obtaining the written consent of Landlord and, where required by Landlord, such
Alterations shall be made under the supervision of a competent architect and/or
a licensed structural engineer, and in accordance with plans and specifications
which meet current building standards for quality, design, and colors if visible
from the hallways or exterior, approved by Landlord, which approval shall not be
unreasonably withheld. Prior to commencing any Alterations, Tenant shall notify
Landlord of such work and Landlord shall perform a good faith asbestos
inspection in accordance with applicable laws and regulations. All work with
respect to any Alterations shall be done in a good and workmanlike manner and
shall be diligently prosecuted to completion. In no event shall Tenant's
Alterations change or affect the strength, exterior appearance, roof, or the
mechanical, electrical, or plumbing services or systems, of the Building without
Landlord's consent. Tenant shall reimburse Landlord upon demand for any sums
expended by Landlord for examination and approval of plans and specifications
for any and all Alterations. Tenant shall also pay Landlord a sum equal to the
costs incurred by Landlord during any inspection or supervision of any and all
Alterations. All damages or injury to the Property caused by any act or omission
of Tenant, or Tenant's officers, contractors, agents, invitees, licensees or
employees, or by any persons who may be in or upon the Property with the express
or implied consent of Tenant, including but not limited to, damage from cracked
or broken glass in windows or doors, shall be paid by Tenant upon demand by
Landlord. Tenant and Tenant's contractor shall comply with the general
conditions for construction as referenced in Exhibit C.
10. ACCESS. During other than Normal Business Hours, Landlord may restrict
access to the Building in accordance with a Landlord provided Building security
system. Tenant shall have at all times during the Lease Term (24 hours of all
days) reasonable access to the Premises. Landlord, at Tenant's cost, shall
provide Tenant with security access cards to the Building if such cards are a
part of the Building's security system. Tenant shall permit Landlord and its
agents to enter the Premises at all reasonable times (except in cases of
emergency) for the purpose of inspecting or improving the Premises or the
Building or for performing any of its obligations under this Lease, upon advance
notice to Tenant. Nothing contained in this Section 10 shall be deemed to impose
any obligation upon Landlord not expressly stated elsewhere in this Lease. When
reasonably necessary Landlord may temporarily close entrances, doors, corridors,
elevators or other facilities without liability to Tenant by reason of such
closure and without such action by Landlord being construed as an eviction of
Tenant or release of Tenant from the duty of observing and performing any of the
provisions of this Lease, so long as such action does not materially and
unreasonably interfere with Tenant's access to the leased Premises. Landlord
shall have the right to enter the Premises for the purpose of showing the
Premises to prospective tenants within the period of one hundred eighty (180)
days prior to the expiration or sooner termination of the Lease Term. Landlord
shall have the right at all times to enter the Premises, with reasonable notice
to Tenant, for the purpose of showing the Premises to prospective purchasers or
lenders.
11. DAMAGE OR DESTRUCTION.
11.1. Damage and Repair. If the Building is damaged by fire or any other
cause to such extent that the cost of restoration, as estimated by Landlord,
will equal or exceed thirty percent (30%) of the replacement value of the
Building (exclusive of foundations) just prior to the occurrence of the damage,
or if insurance proceeds sufficient for restoration are for any reason
unavailable, then Landlord may no later than the one hundred twentieth (120th)
day following the damage, give Tenant a notice of its election to terminate this
Lease. In the event of such election; (a) this Lease shall be deemed to
terminate on the date that is thirty (30) days from the date of Tenant's receipt
of such notice ("Termination Date"); (b) Tenant shall surrender possession of
the Premises on the Termination Date; and (c) Rent and Additional Rent shall be
apportioned as of the date of Tenant's surrender and any Rent paid for any
period beyond such date shall be repaid to Tenant. If the cost of restoration as
estimated by Landlord shall amount to less than thirty
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percent (30%) of said replacement value of the Building or Property and
insurance proceeds sufficient for restoration are available, or if Landlord does
not elect to terminate this Lease, Landlord shall restore the Building and the
Premises (to the extent of the improvements to the Premises originally provided
by Landlord hereunder but excluding any improvements paid for by Landlord with
any tenant allowance or credits) with reasonable promptness, subject to delays
beyond Landlord's control and delays in the making of insurance adjustments by
Landlord, and Tenant shall have no right to terminate this Lease except as
provided in this Section 11. To the extent that the Premises are rendered
untenantable by such damage or by Landlord's restoration work under this
Section, the Base Rent (but not Additional Rent) shall proportionately ▇▇▇▇▇,
provided, however, in the event such damage resulted from or was contributed to,
directly or indirectly, by the act, fault or neglect of Tenant, Tenant's
officers, contractors, agents, employees, invitees or licensees, Base Rent shall
▇▇▇▇▇ only to the extent Landlord receives proceeds from any rental income
insurance policy received by Landlord for loss of Rent under this Lease.
11.2. Destruction During Last Year of Term. Notwithstanding anything to
the contrary in this Lease, in case the Building shall be substantially
destroyed by fire or other cause at any time during the last Lease Year of this
Lease, either Landlord or Tenant may terminate this Lease upon written notice to
the other given within thirty (30) days of the date of such destruction.
11.3. Business Interruption. No damages, compensation or claim shall be
payable by Landlord for inconvenience, loss of business or annoyance arising
from any damage or destruction, repair or restoration of any portion of the
Premises or the Building. Landlord shall use reasonable efforts to effect such
repairs promptly.
11.4. Tenant Improvements. Landlord will not carry insurance of any kind
on any improvements or alterations paid for by Tenant under this Lease or paid
for pursuant to any tenant allowance or credits from Landlord, or on Tenant's
furniture, furnishings, fixtures, equipment or appurtenances of Tenant under
this Lease and Landlord shall not be obligated to repair any damage thereto or
replace the same. Tenant shall insure its improvements in accordance with
Section 14.2 and proceeds of such insurance shall be used in any repair or
restoration of the Premises.
11.5. Express Agreement. The provisions of this Section 11 shall be
considered an express agreement governing any case of damage or destruction of
the Building or Premises by fire or other casualty.
12. WAIVER OF SUBROGATION. Whether loss or damage is due to the negligence of
either Landlord or Tenant, their agents or employees, or any other cause,
Landlord and Tenant do each hereby release and relieve the other, their agents
or employees, from responsibility for, and waive their entire claim of recovery
for, (i) any loss or damage to the real or personal property of either party
located anywhere on the Property, including the Building itself, arising out of
or incident to the occurrence of any of the perils which are covered, or are
required to be covered under this Lease, by their respective property and
related insurance policies, and (ii) any loss resulting from business
interruption at the Premises or loss of rental income from the Building, arising
out of or incident to the occurrence of any of the perils covered by any
business interruption insurance policy, or by any loss of rental income
insurance policy, which may be held by Landlord or Tenant. Each party shall use
best efforts to cause its insurance carriers to consent to the foregoing waiver
of rights of subrogation against the other party. Notwithstanding the foregoing,
no such release shall be effective unless and to the extent the aforesaid
insurance policy or policies shall expressly permit such a release or contain a
waiver of the carrier's right to be subrogated.
13. INDEMNIFICATION. Landlord shall not be liable for, and Tenant shall defend
(unless Landlord waives its right to such defense, and in any event with counsel
reasonably satisfactory to Landlord), indemnify, hold harmless and protect
Landlord and its
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employees and agents from any claim, demand, liability, judgment, award, fine,
mechanics' lien or other lien, loss, damage, expense, penalty, charge or cost of
any kind or character (including actual attorney fees and court costs) which may
be made, incurred or asserted by Tenant, Tenant's agents or employees,
contractors, or any third parties (including but not limited to Landlord's
agents, servants or employees), arising directly or indirectly from: (a) any
labor dispute involving Tenant or its agents or contractors (but excluding labor
disputes involving Landlord or its contractors, subcontractors, or agents); (b)
the construction, repair, alteration, improvement, use, occupancy or enjoyment
of the Premises by Tenant its contractors, agents, employees and/or customers,
licensees, or invitees, (c) injury to, or death of, any person or persons or
damage to, or destruction of, any property (including without limitation the
costs of investigation, removal or remedial action and disposal of any hazardous
or toxic substances, as such terms may be defined under any applicable federal,
state, or municipal law, statute, rule or regulation) occurring in, on or about
the Premises, unless it is the result of Landlord's gross negligence or (d)
Tenant's breach of this Lease or the acts or omissions of Tenant or its
officers, directors, shareholders, employees, contractors, subcontractors, or
agents (the "Claims"). Notwithstanding anything to the contrary in this Section
13, nothing in this Section 13 shall relieve Landlord from responsibility for
its proportionate share of its fault attributable to its negligence or willful
misconduct in causing any such Claims. TENANT HEREBY WAIVES ITS IMMUNITY WITH
RESPECT TO LANDLORD UNDER THE INDUSTRIAL INSURANCE ACT (RCW TITLE 51) AND/OR THE
LONGSHOREMEN'S AND HARBOR WORKER ACT, AND/OR ANY EQUIVALENT ACTS AND TENANT
EXPRESSLY AGREES TO ASSUME POTENTIAL LIABILITY FOR ACTIONS BROUGHT AGAINST
LANDLORD BY TENANT'S EMPLOYEES. THIS WAIVER HAS BEEN SPECIFICALLY NEGOTIATED BY
THE PARTIES TO THIS LEASE AND TENANT HAS HAD THE OPPORTUNITY TO, AND HAS BEEN
ENCOURAGED TO, CONSULT WITH INDEPENDENT COUNSEL REGARDING THIS WAIVER.
Tenant shall, at its sole cost and expense, indemnify, defend and hold
harmless Landlord and Landlord's subsidiaries and parent corporations,
shareholders, members, managers, directors, officers, employees, partners,
affiliates, and agents from, any claims, liabilities, costs or expenses incurred
or suffered arising in connection with any Hazardous Materials which are not
brought on the Premises or the Property by Landlord, Landlord's employees,
agents, vendors, visitors or contractors. Tenant's indemnification, defense, and
hold harmless obligations include, without limitation, the following: (i)
claims, liability, costs or expenses resulting from or based upon
administrative, judicial (civil or criminal) or other action, legal or
equitable, brought by any private or public person under common law or under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Resource Conservation and Recovery Act of 1980 ("RCRA")
or any other Federal, State, County, or Municipal law, ordinance, or regulation
now or hereafter in effect; (ii) claims, liabilities, costs or expenses
pertaining to the indemnification, monitoring, clean-up, containment or removal
of Hazardous Materials from soils, riverbeds or aquifers including the provision
of an alternative public drinking water source; (iii) all costs of defending
such claims; and (iv) all other liabilities, obligations, penalties, fines,
claims, actions (including remedial or enforcement actions of any kind and
administrative or judicial proceedings, orders or judgments), damages (including
consequential and punitive damages), and costs (including attorney, consultant,
and expert fees and expenses) resulting from the release or violation. This
indemnity shall survive the expiration or termination of this Lease.
Tenant shall not be liable for, and Landlord shall defend (unless Tenant
waives its rights to defense, and in any event with counsel reasonably
satisfactory to Tenant), indemnify, hold harmless and protect Tenant and its
employees and agents from any claim, demand, liability, judgment, award, fine,
mechanics lien or other lien, loss, damage, expense, penalty, charge or cost of
any kind of character (including reasonable attorneys' fees and court costs)
which may be made, incurred by or asserted against Tenant by third parties
arising or resulting from damage to property or injury to person to the extent
16
caused by the negligence or willful misconduct of Landlord, its employees,
agents, servants or representatives.
14. INSURANCE.
14.1. Worker's Compensation. Commencing on the earlier of the Commencement
Date or the date Tenant first enters onto the Premises and continuing throughout
the Term of this Lease and any renewal hereof, Tenant shall, at its own expense,
keep and maintain in full force and effect, all required worker's compensation
coverages, including employer's liability at a limit of not less than One
Million Dollars ($1,000,000).
14.2. Liability Insurance. Commencing on the earlier of the Commencement
or the date Tenant first enters onto the Premises, Tenant shall, throughout the
Term of this Lease and any renewal hereof, at its own expense, keep and maintain
in full force and effect, a policy of commercial general liability insurance on
an occurrence form, including but not limited to Premises and operations;
blanket contractual; products/completed operations; owners' and contractors'
protective; employer's contingent liability (stop gap); personal injury;
insuring Tenant's activities upon, in or about the Premises or the Building
against claims of bodily injury or death or property damage or loss with a
combined single limit of not less than Two Million Dollars ($2,000,000) per
occurrence and Two Million Dollars ($2,000,000) in the aggregate. General
aggregate shall apply on a per location basis. Landlord and others as required
by Landlord shall be an additional insured.
14.3. Property Insurance. Tenant shall, throughout the Term of this Lease
and any renewal hereof, at its own expense, keep and maintain in full force and
effect special form perils coverage on Tenant's leasehold improvements,
including without limitation, any improvements made by Landlord on behalf Tenant
or pursuant to a tenant allowance or credit at one hundred percent (100%) of the
current replacement cost value on an agreed amount basis.
Landlord is not required to carry insurance of any kind on Tenant's
improvements or on Tenant's furniture, furnishings, fixtures, equipment or
appurtenances of Tenant under this Lease and Landlord shall not be obligated to
repair any damage thereto or replace the same.
14.4. Automobile Liability Insurance Requirements. Tenant shall maintain
automobile coverage with a combined single limit of not less than One Million
Dollars ($1,000,000). Coverage shall apply to any owned, non-owned or hired
automobiles.
14.5. Insurance Policy Requirements. All policies of insurance required
under this Section 14 shall be with companies reasonably approved by Landlord.
No insurance policy required under this Section 14 shall be cancelled or reduced
in coverage except after forty-five (45) days (ten (10) days for non-payment of
premium) prior written notice to Landlord. All insurers shall have a Best's
rating of AV or better and be licensed and admitted to do business in the State
of Washington. The property and liability policies required under this Section
14 shall be written as primary policies and not contributing to nor in excess of
any coverage Landlord may choose to maintain.
Tenant shall deliver to Landlord prior to occupancy or entrance onto the
Premises and at least annually thereafter, copies of policies of such insurance
or certificates with endorsement, evidencing the existence of the minimum
required insurance and evidencing Landlord, Landlord's mortgagee, and any other
persons or entities requested by Landlord to be named as additional insureds
hereunder. In no event shall the limits of any insurance policy required under
this Section 14 be required under this Section 14 be considered as limiting the
liability of Tenant under this Lease.
In no event shall the limits or coverages required to be carried be
considered as necessarily adequate nor limiting the liability of Tenant under
this Lease.
17
14.6. Failure to Maintain Insurance. If Tenant fails or refuses to
maintain any insurance required, Landlord may, at its option, procure insurance
for Landlord's benefit and/or interests and any and all premiums paid by
Landlord therefore shall be deemed Additional Rent and shall be due on demand.
Landlord will not be responsible to procure insurance for Tenant's interests
and/or benefit.
14.7. Increased Insurance Costs. Tenant shall not keep, use, sell or offer
for sale in or upon the Premises, nor conduct any operation, which may be
prohibited by Landlord's insurance carriers. Tenant shall pay any increase in
premiums for property and liability insurance that may be charged during the
Lease Term on the amount of such insurance which may be carried by Landlord on
the Premises or the Building or Buildings of which they are a part, resulting
from Tenant's occupancy or from the type of merchandise which Tenant stores or
sells on the Premises, whether or not Landlord has consented thereto. In the
event of increased insurance costs to Landlord, Tenant shall also pay an
additional premium on the insurance policy or policies that Landlord may carry
for its protection against loss resulting from any insured event. In determining
whether increased premiums are the result of Tenant's use of the Premises, rates
and/or premiums determined by the organization and/or underwriter setting the
insurance rates and/or charges on the Premises of Building or Buildings of which
they are a part shall be conclusive evidence of the several items and charges
which make up the insurance premium. Landlord shall deliver bills for such
additional premiums to Tenant at such times as Landlord may elect, and Tenant
shall immediately reimburse Landlord therefore.
15. ASSIGNMENT AND SUBLETTING.
15.1. Assignment or Sublease. Tenant shall not assign, mortgage, encumber
or otherwise transfer this Lease or sublet the whole or any part of the Premises
without in each case first obtaining Landlord's prior written consent, which
consent may not be unreasonably conditioned, delayed or withheld. Tenant also
acknowledges that any right of first refusal, option to extend the Term of this
Lease, terminate this Lease, or any other options which Landlord has granted
herein are particular to Tenant are not assignable or transferable to any
assignee or sublessee under this Lease.
In no event shall an assignment, subletting or other transfer of the Lease
relieve Tenant of any of its obligations under this Lease. Consent to any such
assignment, subletting or transfer shall not operate as a waiver of the
necessity for consent to any subsequent assignment, subletting or transfer.
If such consent is requested, Landlord reserves the right to terminate this
Lease, or, if consent is requested for subletting less than the entire Premises,
to terminate this Lease with respect to the portion for which such consent is
requested, at the proposed effective date of such subletting. In the event of
any such termination, Landlord may enter into the relationship of Landlord and
Tenant with any such subtenant or assignee, based on the rent (and/or other
compensation) and the term agreed to by such subtenant or assignee and otherwise
upon the terms and conditions of this Lease.
If Tenant is a corporation, any transfer of this Lease by merger,
consolidation or liquidation, or any change in the ownership of a majority of
its outstanding voting stock, or power to vote a majority of its outstanding
voting stock, shall constitute an assignment for the purpose of this Section 15;
provided, however, for the purposes of this Section 15, a public offering of
stock registered with the SEC, shall not constitute a transfer. If Tenant is a
partnership, limited liability company, or other entity, any transfer of this
Lease by merger, consolidation, liquidation, dissolution, or any change in the
ownership of a majority of the ownership and/or economic interests shall
constitute an assignment for the purpose of this Section 15.
15.2. Documentation and Expenses. In connection with each request for an
assignment or subletting Tenant shall: (i) submit in writing to Landlord the
name and legal composition of the proposed subtenant or assignee, the nature of
the proposed subtenant's
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or assignee's business to be carried on in the Premises, the terms and
provisions of the proposed sublease or assignment and such reasonable financial
information as Landlord may request concerning the proposed subtenant or
assignee; and (ii) pay Landlord's reasonable costs of processing such assignment
or subletting, including attorneys' fees, upon demand of Landlord. Tenant shall
provide Landlord with copies of all assignments, subleases and assumption
instruments.
15.3. Transferee Obligations. As a condition to Landlord's approval of an
assignment, any potential assignee otherwise acceptable to Landlord shall
assume, in writing, all of Tenant's obligations under this Lease and Tenant and
such assignee shall agree, in writing, to be jointly and severally liable for
the performance of all of Tenant's obligations under this Lease. As a condition
to Landlord's approval any sublessee otherwise acceptable to Landlord such
sublessee shall assume, in writing, all of Tenant's obligations under this Lease
as to the subleased portion of the Premises and Tenant and such sublessee shall
agree, in writing, to be jointly and severally liable with Tenant for Rent and
performance of all of the terms, covenants, and conditions of such approved
sublease. If an assignment or sublease is consented to by Landlord, then the
Tenant shall pay all costs incurred in connection therewith (including any lease
commissions and lease concessions), and the assignment or sublease shall state
that all payments from the assignee or sublessee shall be paid directly to
Landlord. In connection with a permitted assignment or sublease:
(a) So long as the Tenant is not in default under this Lease, Landlord
shall grant to Tenant a credit against the monthly rental due under this Lease
in the amount of the rental actually received by Landlord under the assignment
or sublease for that month, calculated on a per square foot basis, and based
upon the portion of the Premises covered by the assignment or sublease. The
maximum credit for any month under this subsection (a) shall be equal to the per
square foot rental due under this Lease. (By way of example only, if the then
applicable monthly rental under this Lease is $2.50 per square foot, and there
is a sublease providing for monthly rental of $2.75 per square foot, then the
maximum monthly credit under this subsection (a) shall be $2.50 per square foot
times the number of square feet covered by the sublease, and with the credit
being applicable only once the payment is received by Landlord from the
sublessee.) If in any month Tenant is entitled to a credit under this subsection
(a), but the credit arises after the Tenant has paid in full the rental due
under this Lease for that month, then Landlord shall pay the amount of the
credit within five (5) business days after the date that the payment is received
by Landlord from the assignee or sublessee.
16. SIGNS. Tenant shall not inscribe any inscription, or post, place, or in any
manner display any sign, graphics, notice, picture, placard or poster, or any
advertising matter whatsoever, anywhere in or about the Property at places
visible (either directly or indirectly as an outline or shadow on a glass pane)
from anywhere outside the Premises without first obtaining Landlord's written
consent, such consent to be at Landlord's sole discretion. Any such consent by
Landlord shall be upon the understanding and condition that Tenant shall remove
the same at the expiration or sooner termination of this Lease and Tenant, at
its expense, shall repair any damage to the Property, or any portion thereof,
caused by such removal. Notwithstanding the foregoing, if Tenant is permitted to
place signage on the Building such signage must be pre-approved by Landlord's
architect and must comply with local laws. The cost of such signage,
maintenance, repair and operation shall be borne exclusively by Tenant.
17. LIENS. Tenant has no authority to allow any liens to be placed against the
Property. Tenant shall keep its interest in this Lease, any property of Tenant
located on the Property, and the Property free from any liens arising out of any
work performed or materials ordered or obligations incurred by or on behalf of
Tenant and Tenant hereby agrees to indemnify, defend and hold Landlord harmless
from and against any liability from any such lien, including without limitation,
liens arising from Tenant's Work. In the event any lien is filed against the
Property, or any portion thereof, by any person claiming by, through or under
Tenant, Tenant shall, upon request of Landlord and at Tenant's
19
expense, immediately either cause such lien to be released of record or furnish
to Landlord a bond, in form and amount and issued by a surety, satisfactory to
Landlord, indemnifying Landlord and the Property against all liability, costs
and expenses, including attorneys' fees, which Landlord may incur as a result
thereof. Provided that such bond has been furnished to Landlord, Tenant, at its
sole cost and expense and after written notice to Landlord, may contest, by
appropriate proceedings conducted in good faith and with due diligence, any
lien, encumbrance or charge against the Property arising from work done or
materials provided to and for Tenant, if, and only if, such proceedings suspend
the collection thereof against Landlord, Tenant and the Property and neither the
Property nor any part thereof or interest therein is or will be, in Landlord's
sole judgment, in any danger of being sold, forfeited or lost.
18. BANKRUPTCY.
18.1. Assumption of Lease. In the event Tenant becomes a Debtor under
Chapter 7 of the Bankruptcy Code ("Code") or a petition for reorganization or
adjustment of debts is filed concerning Tenant under Chapters 11 or 13 of the
Code, or a proceeding is filed under Chapter 7 of the Code and is transferred to
Chapters 11 or 13 of the Code, the Trustee or Tenant, as Debtor and as
Debtor-In-Possession, may not elect to assume this Lease unless, at the time of
such assumption, the Trustee or Tenant has cured all defaults under the Lease
and paid all sums due and owing under the Lease or provided Landlord with
"Adequate Assurance" (as defined below) that: (i) within ten (10) days from the
date of such assumption, the Trustee or Tenant will completely pay all sums due
and owing under this Lease and compensate Landlord for any actual pecuniary loss
resulting from any existing default or breach of this Lease, including without
limitation, Landlord's reasonable costs, expenses, accrued interest, and
attorneys' fees incurred as a result of the default or breach; (ii) within
twenty (20) days from the date of such assumption, the Trustee or Tenant will
cure all non-monetary defaults and breaches under this Lease, or, if the nature
of such non-monetary defaults is such that more than twenty (20) days are
reasonably required for such cure, that the Trustee or Tenant will commence to
cure such non-monetary defaults within twenty (20) days and thereafter
diligently prosecute such cure to completion; and (iii) the assumption will be
subject to all of the provisions of this Lease.
18.1.1. Definition of Adequate Assurances. For purposes of this
Section 18, Landlord and Tenant acknowledge that in the context of a bankruptcy
proceeding involving Tenant, at a minimum, "Adequate Assurance" shall mean: (i)
the Trustee or Tenant has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that the Trustee or Tenant will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and (ii) the Bankruptcy
Court shall have entered an Order segregating sufficient cash payable to
Landlord and/or the Trustee or Tenant shall have granted a valid and perfected
first lien and security interest and/or mortgage in or on property of Trustee or
Tenant acceptable as to value and kind to Landlord, to secure to Landlord the
obligation of the Trustee or Tenant to cure the monetary and/or non-monetary
defaults and breaches under this Lease within the time periods set forth above;
and (iii) the Trustee or Tenant, at the very minimum, shall deposit a sum equal
to two (2) month's Base Rent to be held by Landlord (without any allowance for
interest thereon) to secure Tenant's future performance under the Lease.
18.2. Assignment of Lease. If the Trustee or Tenant has assumed the Lease
pursuant to the provisions of this Section 18 for the purpose of assigning
Tenant's interest hereunder to any other person or entity, such interest may be
assigned only after the Trustee, Tenant or the proposed assignee have complied
with all of the terms, covenants and conditions of this Lease, including,
without limitation, those with respect to Additional Rent. Landlord and Tenant
acknowledge that such terms, covenants and conditions are commercially
reasonable in the context of a bankruptcy proceeding of Tenant. Any person or
entity to which this Lease is assigned pursuant to the provisions of the Code
shall be deemed without further act or deed to have assumed all of the
20
obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall upon request execute and deliver to Landlord an
instrument confirming such assignment.
18.3. Adequate Protection. Upon the filing of a petition by or against
Tenant under the Code, Tenant, as Debtor and as Debtor-In-Possession, and any
Trustee who may be appointed agree to adequately protect Landlord as follows:
(i) to perform each and every obligation of Tenant under this Lease until such
time as this Lease is either rejected or assumed by Order of the Bankruptcy
Court; (ii) to pay all monetary obligations required under this Lease, including
without limitation, payment of Rent and Additional Rent payable hereunder which
is considered reasonable compensation for the use and occupancy of the Premises;
(iii) provide Landlord a minimum of thirty (30) days prior written notice,
unless a shorter period is agreed to in writing by the parties, of any
proceeding relating to any assumption of this Lease or any intent to abandon the
Premises, which abandonment shall be deemed a rejection of this Lease; and (iv)
to perform to the benefit of Landlord as otherwise required under the Code. The
failure of Tenant to comply with the above shall result in an automatic
rejection of this Lease.
19. DEFAULT.
19.1. Cumulative Remedies. All rights of Landlord in this Lease shall be
cumulative, and none shall exclude any other right or remedy allowed by law in
force when the default occurs or in equity. In addition to the other remedies
provided in this Lease, Landlord shall be entitled to restrain by injunction
(without bond) the violation or attempted violation of any of the covenants,
agreements or conditions of Tenant under this Lease.
19.2. Tenant's Default; Right to Cure. The failure of Tenant to perform
any obligation of Tenant as provided in this Lease shall be a default under this
Lease. Tenant shall have a period of five (5) business days from the date of
Tenant's receipt of written notice from Landlord to Tenant within which to cure
any default in the payment of Rent. Tenant shall have a period of ten (10)
business days from the date of written notice from Landlord to Tenant to cure
any other default under this Lease; provided, however, that with respect to any
such default which cannot be cured within such ten (10) day period, the default
shall not be deemed to be uncured if Tenant commences to cure within ten (10)
days and for so long as Tenant is diligently prosecuting the cure thereof, but
in no event longer than ninety (90) days. If the nature of the default is one
that can be cured immediately (e.g. turn off loud music, take unauthorized sign
off door, etc.), Tenant will use its best efforts to cure immediately.
Notwithstanding anything to the contrary in this Section 19.2, Landlord shall
not be required to provide notice to Tenant of a default in the payment of Rent
more than once in any consecutive twelve (12) month period.
19.3. Landlord's Rights And Remedies. Upon the occurrence of an uncured
default by Tenant, Landlord, in addition to all other rights or remedies it may
have, at its option, may exercise any one or more of the following rights
without further notice or demand of any kind to Tenant or any other person,
except as required by applicable State law:
19.3.1. Termination of Lease. The right of Landlord to terminate this
Lease and Tenant's right to possess the Premises and to reenter the Premises,
take possession thereof and remove all persons from the Premises, following
which Tenant shall have no further claim thereon or hereunder; provided,
however, that Tenant shall remain obligated as provided in Section 19.4 below.
19.3.2. Re-entry of the Premises. The right of Landlord, without
terminating this Lease and Tenant's right to possess the Premises, to reenter
the Premises and occupy the whole or any part of the Premises for and on account
of Tenant and to collect any unpaid Rents which have become payable, or which
may thereafter become
21
payable; provided, however, that Tenant shall remain obligated as provided in
Section 19.4 below.
19.3.3. Termination After Reentry. The right of Landlord, even though
it may have reentered the Premises in accordance with Section 19.3.2, to elect
thereafter to terminate this Lease and Tenant's right to possess the Premises;
provided, however, that Tenant shall remain obligated as provided in Section
19.4 below.
Should Landlord reenter the Premises under Section 19.3.2, Landlord shall
not be deemed to have terminated this Lease or to have accepted a surrender
thereof by any such reentry, unless Landlord shall have notified Tenant in
writing that it has so elected to terminate this Lease and Tenant's right of
possession. Tenant further covenants that Landlord's service of any notice
pursuant to the unlawful detainer statutes of the State of Washington and
Tenant's surrender of possession pursuant to such notice shall not (unless
Landlord elects in writing to the contrary at the time of, or at any time
subsequent to, the serving of such written notice and such election is evidenced
by a notice to Tenant) be deemed to be a termination of this Lease.
19.4. Landlord's Damages. If Landlord terminates this Lease and/or
Tenant's right to possession of the Premises pursuant to the terms of this
Section 19, Landlord may recover from Tenant as damages, all of the following:
19.4.1. Delinquent Rent. The worth at the time of award of any unpaid
Rent earned at the time of such termination;
19.4.2. Rent After Termination Until Judgment. The worth at the time
of award of the amount by which the unpaid Rent that would have been earned
after termination until the time of award exceeds such rent loss Tenant proves
could have been reasonably avoided;
19.4.3. Rent After Judgment. The worth at the time of award of the
amount by which the unpaid Rent for the balance of the Lease Term after the time
of award exceeds the amount of such rent loss that Tenant proves could be
reasonably avoided;
19.4.4. Leasing Concessions. The unamortized portion of any financial
concessions incurred by Landlord on Tenant's behalf to arrange for Tenant's
leasing of the Premises that Landlord conditionally waived at the commencement
of the Lease in consideration of Tenant's full performance of this Lease, but
which upon termination of the Lease pursuant to this Section 19 shall accrue as
Rent, which costs include, but are not limited to, leasing commissions, tenant
allowances and improvements (including without limitation, the cost of any
improvements to the Premises by Landlord pursuant to Exhibit C), "free rent"
allowances and other such concessions in this Lease, amortized on a
straight-line basis over the number of months during the Lease Term in which
Tenant is obligated to pay Base Rent, and such amounts shall become immediately
due and payable as Rent earned at the time of such termination of the Lease;
19.4.5. Other Compensation. Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under this Lease or which in the ordinary course of things would
be likely to result there from, including, without limitation, any cost or
expense incurred by Landlord in (i) retaking possession of the Premises,
including reasonable attorney fees therefore, (ii) maintaining or preserving the
Premises after such default, (iii) preparing the Premises for reletting to a new
tenant, including repairs necessary to the Premises for such reletting, (iv)
leasing commissions, limited to those years remaining in the initial term, and
(v) any other costs necessary or appropriate to relet the Premises; and
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19.4.6. Additional or Alternative Damages. At Landlord's election,
such other amounts in addition to or in lieu of the foregoing in this Section
19.4 as may be permitted from time to time by the laws of the State of
Washington; and
19.4.7. Calculation of Damages. As used in Sections 19.4.1 and 19.4.2,
the "worth at the time of award" is to be computed by allowing interest at the
rate specified in Section 4.2. As used in Section 19.4.3, the "worth at the time
of award" is computed by discounting such amount at a discount rate equal to six
percent (6%) per annum. All Rent, other than Base Rent, shall, for the purposes
of calculating any amount due under the provisions of Section 19.4.3 be computed
on the basis of the average monthly amount thereof accruing during the
immediately preceding sixty (60) month period, except that if it becomes
necessary to compute such rent before such a sixty (60) month period has
occurred, then such rent shall be computed on the basis of the average monthly
amount hereof accruing during such shorter period.
19.5. Tenant's Property. Without limiting any of Landlord's rights under
this Lease, in the event of a termination this Lease pursuant to Section 19, any
of Tenant's property which, pursuant to this Lease, may be removed by the Tenant
(not including attached furniture and equipment specified on Exhibit C-1) shall
be removed by Tenant immediately upon demand by Landlord. If not so removed by
Tenant, Landlord may remove such property from the Premises and place it in
storage at a public warehouse at the expense and risk of Tenant, after which it
shall be subject to the sale provisions of Section 21. Without limiting any of
Landlord's rights under this Lease, in the event of a termination of this Lease
pursuant to Section 19, all attached furniture and equipment specified on
Exhibit C-1 shall be deemed real property and shall be Landlord's property as
part of the Premises upon termination.
19.6. No Waiver. The waiver by Landlord of any breach of any term,
covenant or condition contained in this Lease shall not be deemed to be a waiver
of such term, covenant or condition or any subsequent breach thereof, or of any
other term, covenant or condition contained in this Lease. Landlord's subsequent
acceptance of partial rent or performance by Tenant shall not be deemed to be an
accord and satisfaction or a waiver of any preceding breach by Tenant of any
term, covenant or condition of this Lease or of any right of Landlord to a
forfeiture of the Lease by reason of such breach, regardless of Landlord's
knowledge of such preceding breach at the time of Landlord's acceptance. No
term, covenant or condition of this Lease shall be deemed to have been waived by
Landlord unless such waiver is in writing and signed by Landlord.
19.7. Waiver of Notice. Notwithstanding anything to the contrary in this
Section 19, Tenant waives (to the fullest extent permitted under law) any
written notice, other than such notice as this Section 19 or any other provision
of this Lease specifically requires, which any statute or law now or hereafter
in force prescribes be given Tenant.
19.8. Waiver of Redemption Rights. Tenant, for itself, and on behalf of
any and all persons claiming through or under it, including creditors of all
kinds, does hereby waive and surrender all right and privilege which they or any
of them might have under or by reason of any present or future law, to redeem
the Premises or to have a continuance of this Lease for the term hereof, as it
may have been extended, after having been dispossessed or ejected there from by
process of law or under the terms of this Lease or after the termination of this
Lease as herein provided.
19.9. Default by Landlord. Landlord's failure to perform or observe any of
its obligations under this Lease or to correct a breach of any warranty or
representation made in this Lease within thirty (30) days after receipt of
written notice from Tenant setting forth in reasonable detail the nature and
extent of the failure referencing pertinent Lease provisions or if more than
thirty (30) days is required to cure the breach, Landlord's failure to begin
curing within the thirty (30) day period and diligently prosecute the cure to
completion, shall constitute a default. If Landlord commits a default that
materially affects Tenant's use of the Premises, and Tenant has provided
simultaneous written notice thereof
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to Landlord's mortgagee (if any and if Tenant has notice thereof) and Landlord
(and/or Landlord's mortgagee if any) has failed to commence to cure such default
within thirty (30) days (or such shorter time as is commercially reasonable in
the case of an emergency threatening imminent harm to persons or property),
Tenant may, without waiving any claim for damages for breach of agreement,
thereafter cure the default for the account of the Landlord, which cure shall be
preceded by an additional written notice given at least three (3) days prior to
such cure to Landlord and Landlord's mortgagee that Tenant plans to undertake
the cure, and the reasonable cost of such cure shall be deemed paid or incurred
for the account of Landlord, and Landlord shall reimburse Tenant for Tenant's
out-of-pocket expenditures paid to third parties to effectuate such cure, such
reimbursement to be within thirty (30) days after completion of the cure and
invoice to Landlord showing the costs of cure. Tenant s cure rights shall be in
lieu of any right to terminate this Lease; Tenant shall not have the right to
terminate this Lease for a Landlord default. If Landlord disputes either the
necessity of the cure or the cost thereof, the matter shall be settled by
arbitration administered by the American Arbitration Association in accordance
with its Rules for the Real Estate Industry before a single neutral arbitrator
of the American Arbitration Association sitting in Seattle, Washington. The
arbitrator shall be a person having at least ten (10) years' experience and
knowledge about commercial leasing and property management. The arbitration
shall be held within sixty (60) days of Landlord notifying Tenant it disputes
Tenant's cure. The costs of the arbitrator shall be shared equally by the
parties. The prevailing party shall be entitled to an award of reasonable
attorney's fees. The arbitrator's award shall be final and binding on the
parties.
20. SUBORDINATION AND ATTORNMENT. This Lease shall be subordinate to any
mortgage or deed of trust now existing or hereafter placed upon the Land, the
Building or the Premises, created by or at the instance of Landlord, and to any
and all advances to be made hereunder and to interest thereon and all
modifications, renewals and replacements or extensions thereof ("Landlord's
Mortgage"); provided, however, that the holder of any Landlord's Mortgage or any
person or persons purchasing or otherwise acquiring the Land, Building or
Premises at any sale or other proceeding under any Landlord's Mortgage may elect
to continue this Lease in full force and effect and, in such event, Tenant shall
attorn to such person or persons. Notwithstanding the foregoing, if a lender
requires that the Lease be subordinate to any mortgage recorded after the date
of the Lease affecting the Property, the Lease shall be subordinate to such
mortgage if Landlord first obtains from such lender a written statement
providing that so long as Tenant performs its obligations under the Lease, no
foreclosure of, deed given in lieu of foreclosure of, or sale under the
mortgage, and no steps or procedures, taken under the mortgage, shall affect
Tenant's rights under this Lease; provided, however, then the holder of
Landlord's Mortgage, or any person or persons purchasing or otherwise acquiring
the Land, Building or Premises at any sale or other proceeding under any
Landlord's Mortgage, shall not be subject to any option to purchase, or right of
first refusal to purchase, granted to Tenant in connection with this Lease.
Tenant shall execute, acknowledge and deliver documents, which the Holder
of any Landlord's Mortgage may require to effectuate the provisions of this
Section 20 within ten (10) days of the date of Landlord's request therefore. In
the event of any transfer of Landlord's interest in the Premises or in the
Property, other than a transfer for security purposes only, the transferor shall
be automatically relieved of any and all obligations and liabilities on the part
of Landlord accruing from and after the date of such transfer and such
transferee shall have no obligation or liability with respect to any matter
occurring or arising prior to the date of such transfer. Tenant agrees to attorn
to such transferee, provided transferee assumes all of Landlord's
responsibilities.
21. REMOVAL OF PROPERTY. Subject to Section 19.5, upon the expiration of this
Lease, Tenant shall remove Tenant's personal property not permanently affixed to
the Premises or as specified on Exhibit C-1, and shall pay Landlord any damages
for injury to the Premises or Property resulting from such removal. If Tenant
fails to remove any such property from the Premises at the expiration of this
Lease, Landlord may remove and
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store said property without liability for loss thereof or damage thereto. Such
storage shall be for the account and at the expense of Tenant. If Tenant fails
to pay the cost of storing any such property after it has been stored for a
period of thirty (30) days or more, or if Tenant has not removed the property
from the Premises after a thirty (30) day period, Landlord may, at its option,
sell, or permit to be sold, any or all such property at public or private sale,
in such manner and at such times and places as Landlord in its sole discretion
may deem proper, without notice to Tenant, unless notice is required under
applicable statutes, and shall apply the proceeds of such sale first, to the
cost and expense of such sale, including reasonable attorneys' fees actually
incurred; second, to the payment of the costs or charges for storing any such
property; third, to the cost of removal of such property and the restoration of
the Premises following such removal; fourth, to the payment of any other sums of
money which may then be or thereafter become due Landlord from Tenant under any
of the terms of this Lease; and, fifth, the balance, if any, shall be paid to
Tenant.
22. CONDEMNATION.
22.1. Entire Taking. If all of the Premises, or such portion of the
Building as may be required for the reasonable use of the Premises, in
Landlord's determination, are taken by eminent domain, this Lease shall
automatically terminate as of the date title vests in the condemning authority
and all Rent, Additional Rent and other payments shall be paid to that date.
22.2. Constructive Taking of Entire Premises. In the event of a taking by
eminent domain of a material part of but less than all of the Building, if
Landlord determines that the remaining portions of the Building cannot be
economically and effectively used by it (whether on account of physical,
economic, aesthetic or other reasons) or if Landlord determines the Building
should be restored in such a way as to materially alter the Premises, then
Landlord shall forward a written notice to Tenant of such determination not more
than sixty (60) days after the date of taking. The Term of this Lease shall
expire upon the date specified by Landlord in such notice but not earlier than
sixty (60) days after the date of such notice.
22.3. Partial Taking. Subject to the provisions of the preceding Section
22.2, in case of taking by eminent domain of a part of the Premises, or a
portion of the Building not required for the reasonable use of the Premises,
then this Lease shall continue in full force and effect and the Rent shall be
equitably reduced based on the proportion by which the floor area of the
Premises is reduced, such Rent reduction to be effective as of the date title to
such portion vests in the condemning authority. If more than twenty-five percent
(25%) of the Premises is taken and Landlord cannot replace such space with space
in the Building which is mutually acceptable to Landlord and Tenant, then with
sixty (60) days written notice by either party, Landlord or Tenant shall have
the right to terminate this Lease.
22.4. Awards and Damages. Landlord reserves all rights to damages to the
Premises for any partial, constructive, or entire taking by eminent domain, and
Tenant hereby assigns to Landlord any right Tenant may have to such damages or
award, and Tenant shall make no claim against Landlord or the condemning
authority for damages for termination of the leasehold interest or interference
with Tenant's business. Tenant shall have the right, however, to claim and
recover from the condemning authority compensation for any loss to which Tenant
may be put for Tenant's moving expenses, business interruption or taking of
Tenant's personal property (not including Tenant's leasehold interest) provided
that such damages may be claimed only if they are awarded separately in the
eminent domain proceedings and not out of or as part of and/or will not reduce
any damages recoverable by Landlord.
23. NOTICES. All notices under this Lease shall be in writing and delivered in
person or sent by registered or certified mail, postage prepaid, or by
facsimile, or by private overnight courier to Landlord and to Tenant at their
respective Notice Addresses set forth
25
in Section 1.16 (provided that after the Commencement Date any such notice shall
be mailed, delivered by hand or transmitted by facsimile to Tenant at the
Premises) or such other addresses as may from time to time be designated by any
such party in writing. Notices mailed as provided in this Section shall be
deemed given and received on the date that is three (3) business days following
the date of post ▇▇▇▇, in the case of mailing, or the date of transmission
confirmation by the sender's facsimile machine, in the case of facsimile
transmission, or one (1) day after deposit with a private overnight courier.
24. COSTS AND ATTORNEYS' FEES. If Tenant or Landlord brings any action for any
relief against the other, declaratory or otherwise, arising out of this Lease,
each party shall, and hereby does to the extent permitted by law, waive trial by
jury and the losing party shall pay the substantially prevailing party's
attorneys' fees in connection with such suit, at trial and on appeal, and such
attorneys' fees shall be deemed to have accrued on the commencement of such
action. If Landlord consults with an attorney as a result of an uncured
defaultby Tenant hereunder, Tenant agrees to pay any such attorneys' fees
incurred by Landlord, and such attorneys' fees shall constitute additional sums
due by Tenant hereunder. In addition, in the event of an uncured default by
Tenant under this Lease, and any action is instituted by Landlord as a result of
Tenant's default, then Tenant shall pay to Landlord, in addition to other costs,
expenses, and attorneys' fees incurred by Landlord, and hourly fee of Fifty
Dollars ($50.00) per hour for time spent by each employee or agent of Landlord
in connection with such default and at a minimum, One Hundred Dollars ($100.00).
25. LANDLORD'S LIABILITY. Notwithstanding anything in this Lease to the
contrary, covenants, undertakings and agreements herein made on the part of
Landlord in this Lease are made and intended not as personal covenants,
undertakings and agreements for the purpose of binding Landlord personally or
the assets of Landlord (except Landlord's interest in the Premises and
Building), but are made and intended for the purpose of binding only the
Landlord's interest in the Premises and Building, as the same may from time to
time be encumbered. No personal liability or personal responsibility is assumed
by Landlord, nor shall at any time be asserted or enforceable against Landlord
or its heirs, legal representatives, successors or assigns on account of the
Lease or on account of any covenant, undertaking or agreement of Landlord in
this Lease.
26. LANDLORD'S CONSENT. Except as may be provided otherwise in this Lease,
whenever Landlord's consent is required under this Lease, such consent shall not
be unreasonably withheld, conditioned or delayed, provided, however, Landlord's
withholding of consent due to any mortgagee's refusal to grant its consent shall
not be deemed unreasonable.
27. ESTOPPEL CERTIFICATES. Tenant shall, from time to time upon the written
request of Landlord, execute, acknowledge and deliver to Landlord or its
designee a written statement stating: the Effective Date, Commencement Date and
Expiration Date, the date the term commenced and the date Tenant accepted the
Premises; the amount of Base Rent and the date to which such Base Rent and
Additional Rent has been paid; and certifying such additional information as may
be requested by Landlord. It is intended that any such statement delivered
pursuant to this Section may be relied upon by Landlord and/or a prospective
purchaser or mortgagee who may acquire an interest in, or a lien upon,
Landlord's interest in the Building. If Tenant shall fail to respond within ten
(10) days of receipt by Tenant of a written request by Landlord as herein
provided, Tenant shall be deemed to have given such certificate as above
provided without modification and shall be deemed to have admitted the accuracy
of any information supplied by Landlord to a prospective purchaser or mortgagee
and to have certified that this Lease is in full force and effect, that this
Lease represents the entire agreement between the parties as to this leasing,
that there are no existing claims, defenses or offsets which Tenant has against
enforcement of the Lease by Landlord, that there are no uncured defaults in
Landlord's performance, that the security deposit is as stated in the Lease, and
that not more than one month's Base Rent or Additional Rent has been paid in
advance.
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28. RIGHT TO PERFORM. If Tenant fails to pay any sum of money required to be
paid by it under this Lease or fails to perform any other act on its part to be
performed under this Lease, and such failure continues for ten (10) days after
notice thereof by Landlord, Landlord may, but shall not be obligated so to do,
and without waiving or releasing Tenant from any obligations of Tenant, make
such payment or perform any such other act on Tenant's part to be made or
performed as provided in this Lease. Landlord shall have (in addition to any
other right or remedy of Landlord) the same rights and remedies in the event of
the nonpayment of sums due under this Section 28 as in the case of default by
Tenant in the payment of Rent.
29. PARKING. In the event that Landlord elects to regulate parking on the
Property pursuant to a parking pass system, then Tenant shall be entitled to
purchase eight (8) parking passes, and the parking area for Tenant's parking
pass holders shall be in the parking garage serving the Building. Each parking
pass may be used by one person only, and may not be shared; no sharing or
hoteling of stalls shall be permitted. Use of the parking stalls shall be
subject to such market rate charges, and such rules and regulations, as Landlord
and/or Landlord's parking operator may adopt from time to time. Landlord retains
the right to alter such market rate charges, and such rules and regulations and
to relocate or reconfigure the parking area serving the Building, with
reasonable notice to Tenant, but Landlord shall at all times continue to provide
the designated number of passes to Tenant. Tenant shall pay, upon demand by
Landlord, Landlord's costs incurred to stencil any changes to reserved parking
stalls provided to Tenant under this Lease.
30. AUTHORITY. If Tenant is a corporation, each individual executing this Lease
on behalf of Tenant represents and warrants that he or she is duly authorized to
execute and deliver this Lease on behalf of Tenant, in accordance with a duly
adopted resolution of the Board of Directors of Tenant and in accordance with
the bylaws of Tenant, and that this Lease is binding upon Tenant in accordance
with its terms. If Tenant is a partnership or limited liability company, each
individual executing this Lease on behalf of Tenant represents and warrants that
he or she is duly authorized to execute and deliver this Lease on behalf of
Tenant, in accordance with the partnership or operating agreement of Tenant, and
that this Lease is binding upon Tenant in accordance with its terms.
31. GENERAL.
31.1. Headings. Titles to Sections of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of this
Lease.
31.2. Heirs and Assigns. All of the covenants, agreements, terms and
conditions contained in this Lease shall inure to and be binding upon the
Landlord and Tenant and their respective heirs, executors, administrators,
successors and assigns.
31.3. No Brokers. Except as provided in Section 1, Landlord and Tenant
represent and warrant to one another that they have not engaged any broker,
finder or other person who would be entitled to any commission or fees in
respect of the negotiation, execution or delivery of this Lease and Landlord and
Tenant shall indemnify and hold one another harmless from and against any loss,
cost, liability or expense incurred by the other party as a result of any claim
asserted by any such broker, finder or other person on the basis of any
arrangements or agreements made or alleged to have been made by or on behalf of
the other party. In no event will a brokerage fee be paid on any renewal or
Option to renew. Tenant agrees that any broker it may elect to assist in any
renewal discussions or options will be compensated directly by Tenant.
31.4. Tenant's Financial Statement. Within ten (10) days of receipt by
Tenant of Landlord's written request, Tenant shall deliver to Landlord a copy of
its most recent annual and quarterly financial statements prepared in accordance
with generally accepted accounting principles, including a balance sheet, income
statement, statement of changes in stockholder's or owner's equity, statement of
cash flow, accompanying footnotes, and reports of independent accountants.
Landlord shall hold Tenant's financial information in
27
confidence and agrees to execute a reasonable confidentiality agreement if so
requested by Tenant. Such financial information may be provided to a prospective
purchaser or mortgagee, subject to the same confidentiality requirements.
31.5. Entire Agreement. This Lease contains all covenants and agreements
between Landlord and Tenant relating in any manner to the leasing, use and
occupancy of the Premises, to Tenant's use of the Building and other matters set
forth in this Lease. No prior agreements or understanding pertaining to the same
shall be valid or of any force or effect and the covenants and agreements of
this Lease shall not be altered, modified or added to except in writing signed
by Landlord and Tenant.
31.6. Severability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and the remaining provisions hereof shall nevertheless remain
in full force and effect.
31.7. Force Majeure. (A) Landlord. Landlord shall have no liability
whatsoever to Tenant on account of Landlord's inability to timely complete
Landlord's Work, or the restoration of the Building and the Premises following
damage or destruction, as a result of "force majeure," which shall include (a)
strike, lockout, other labor trouble, dispute or disturbance; (b) governmental
regulation, moratorium, action, preemption or priorities or other controls; (c)
shortages of fuel, supplies or labor; (d) any failure or defect in the supply,
quantity or character of electricity or water furnished to the Premises by
reason of any requirement, act or omission of the public utility or others
furnishing the Building with electricity or water; and (e) for any other reason,
whether similar or dissimilar to the above, or for Act of God, beyond Landlord's
reasonable control. If this Lease specifies a time period for performance of an
obligation of Landlord to complete Landlord's Work, or the restoration of the
Building and the Premises following damage or destruction, that time period
shall be extended by the period of any delay in Landlord's performance caused by
any of the events of force majeure described herein.
(B) Tenant. Tenant shall have no liability whatsoever to Landlord on
account of Tenant's inability to timely complete Tenant's Work, or the
restoration of the Tenant's Work following damage or destruction, as a result of
"force majeure," which shall include (a) strike, lockout, other labor trouble,
dispute or disturbance; (b) governmental regulation, moratorium, action,
preemption or priorities or other controls; (c) shortages of fuel, supplies or
labor; (d) any failure or defect in the supply, quantity or character of
electricity or water furnished to the Premises by reason of any requirement, act
or omission of the public utility or others furnishing the Building with
electricity or water; and (e) for any other reason, whether similar or
dissimilar to the above, or for Act of God, beyond Tenant's reasonable control.
If this Lease specifies a time period for performance of an obligation of Tenant
to complete Tenant's Work, or the restoration of Tenant's Work following damage
or destruction, that time period shall be extended by the period of any delay in
Tenant's performance caused by any of the events of force majeure described
herein. Nothing in this section shall be construed as excusing or delaying the
obligation of Tenant to pay in a timely manner when due any Rent or other
amounts due under this Lease.
31.8. Right to Change Public Spaces. Landlord shall have the right at any
time without thereby creating an actual or constructive eviction or incurring
any liability to Tenant therefore, to change the arrangement or location of such
of the following as are not contained within the Premises or any part thereof:
entrances, passageways, doors and doorways, corridors, stairs, toilets and other
public portions of the Property. In no event, however, shall Landlord diminish
any service provided by Landlord under this Lease, make any change which reduces
the area of the Premises, make any change which, on other than a temporary
basis, either changes the character of the Building from that of an office
building or materially interferes with Tenant's access to and use of the
Building.
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31.9. Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State of Washington.
31.10. Building Directory. In the event Landlord maintains in the lobby of
Building a directory of tenants, such directory shall include the name of Tenant
and any other names reasonably requested by Tenant in proportion to the number
of listings given to comparable tenants of the Building. Tenant will also be
required to provide suite signage consistent with the Building standard or
subject to Landlord's architects' approval.
31.11. Building Name. The Building will be known as ▇▇▇▇▇ ▇▇▇▇ Square or by
such name as Landlord may designate from time to time.
31.12. Quiet Enjoyment. Landlord agrees that Tenant, upon paying the Rent
and performing all other terms, covenants and conditions of this Lease to be
performed by Tenant, may quietly have, hold and enjoy the Premises from and
after the Commencement Date until the Expiration Date, subject, however, to the
provisions of Section 11 (Damage Or Destruction), 22 (Condemnation), and to any
sale or Landlord's Mortgage to which this Lease is, or may become, subordinate.
31.13. Survival. The representations, warranties and indemnification
obligations of the parties to this Lease shall survive the termination or
expiration of this Lease.
31.14. Lender's Consent. The effectiveness of this Lease is contingent upon
and subject to the approval of Landlord's lender.
31.15. Time. Time is of the essence of each and every provision of this
Lease.
31.16. Interpretation. This Agreement has been submitted to the scrutiny of
all parties hereto and their counsel, if desired, and shall be given a fair and
reasonable interpretation in accordance with the words hereof, without
consideration or weight being given to its having been drafted by any party
hereto or its counsel.
31.17. Execution. This Agreement may be executed in several counterparts
and all so executed shall constitute one Agreement, binding on all the parties
hereto even though all the parties are not signatories to the original or the
same counterpart. Delivery of a facsimile or other copy of this Agreement has
the same effect as delivery of an original.
IN WITNESS WHEREOF this Lease has been executed the day and year first
above set forth.
LANDLORD:
▇▇▇▇▇ ▇▇▇▇ SQUARE LLC,
by ▇▇▇▇▇ Corporation, Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Date: 4/25/02 Its: CFO
----------------------- ----------------------------------
TENANT:
DWANGO NORTH AMERICA, INC.
Date: 4/23/02 By: /s/ ▇ ▇ ▇▇▇▇▇▇▇▇
----------------------- -----------------------------------
Its: Vice President
----------------------------------
29
STATE OF WASHINGTON )
)ss.
COUNTY OF KING )
On this 25/th/ day of April, 2002, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn as such,
personally appeared ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ to me known to be the CFO of ▇▇▇▇▇
CORPORATION, Manager of ▇▇▇▇▇ ▇▇▇▇ SQUARE LLC, the corporation that executed the
within and forgoing instrument, and acknowledged the said instrument to be the
free and voluntary act and deed of said corporation for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument.
WITNESS my hand and official seal the day and year in this certificate
first above written.
[SEAL] ▇▇▇▇ ▇ ▇▇▇▇
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Printed Name: ▇▇▇▇ ▇ ▇▇▇▇
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NOTARY PUBLIC in and for the State of
Washington, residing at Seattle
My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
)ss.
COUNTY OF KING )
On this 23/rd/ day of April, 2002, before me, the undersigned, a Notary
Public in and for the State of Wash., duly commissioned and sworn as such,
personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III, to me known to be the V.P. of
DWANGO NORTH AMERICA, INC. the corporation that executed the within and forgoing
instrument, and acknowledged the said instrument to be the free and voluntary
act and deed of said corporation for the uses and purposes therein mentioned,
and on oath sated that he/she was authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate
first above written.
[SEAL] ▇▇▇▇ ▇ ▇▇▇▇
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Printed Name: ▇▇▇▇ ▇ ▇▇▇▇
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NOTARY PUBLIC in and for the State of
Wash., residing at Seattle
My commission expires: 12-19-05
EXHIBIT A
TO LEASE AGREEMENT
LEGAL DESCRIPTION
THE OFFICE UNIT OF ▇▇▇▇▇ ▇▇▇▇ SQUARE, A CONDOMINIUM RECORDED IN VOLUME
159 OF CONDOMINIUMS, PAGES 37 THROUGH 41, ACCORDING TO THE CONDOMINIUM
DECLARATION FOR ▇▇▇▇▇ ▇▇▇▇ SQUARE, A CONDOMINIUM, RECORDED UNDER KING
COUNTY RECORDING NO. 19790930002421, AND THE CONDOMINIUM SURVEY MAP AND
PLANS RECORDED UNDER KING COUNTY RECORDING NO. 19990930002420, RECORDS OF
KING COUNTY, WASHINGTON, TOGETHER WITH ALL COMMON ELEMENTS AND LIMITED
COMMON ELEMENTS AND OTHER RIGHTS, APPURTENANT THERETO.
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ OF WASHINGTON
A-1
EXHIBIT B
TO LEASE AGREEMENT
FLOOR PLAN OF PREMISES
B-1
EXHIBIT B-1
TO LEASE AGREEMENT
MODIFICATIONS TO PREMISES
B-1
EXHIBIT C
TO LEASE AGREEMENT
LANDLORD'S WORK AND TENANT'S WORK
I. IMPROVEMENTS PROVIDED BY LANDLORD
Landlord's Work to the Premises shall consist of the following:
A. Paint the Premises, steam-clean the carpets, and modify the
Premises in accordance with Exhibit B-1.
Except for such Landlord's Work, Landlord shall deliver, and Tenant
shall accept the Premises in its "AS-IS" condition and configuration as
provided in the Lease. Without limiting the foregoing, Landlord shall not
be required to modify or improve the existing heating, exhaust, ventilation
or air-conditioning equipment, to reinforce or level the flooring of the
Premises or the existing electrical system, to accommodate Tenant.
II. CONSTRUCTION OF TENANT IMPROVEMENTS
A. Improvements Constructed by Tenant. If any work is to be
performed in connection with Tenant Improvements on the Premises by Tenant
or Tenant's contractor:
(1) Such work shall proceed upon Landlord's written approval of
(i) Tenant's contractor, (ii) public liability and property damage
insurance satisfactory to Landlord carried by Tenant's contractor, (iii)
detailed plans and specifications for such work. Landlord's approval of the
foregoing shall not be unreasonably withheld or delayed, and (iv) Landlord
shall have the right to require Tenant's contractor to deposit a reasonable
amount to secure the close-out and clean-up of Tenant's Work.
(2) All work shall be done in conformity with a valid building
permit when required, a copy of which shall be furnished to Landlord before
such work is commenced, and in any case, all such work shall be performed
in accordance with all applicable governmental regulations. Notwithstanding
any failure by Landlord to object to any such work, Landlord shall have no
responsibility for Tenant's failure to meet all applicable regulations.
(3) All work by Tenant or Tenant's contractor shall be scheduled
through Landlord.
(4) (i) Tenant or Tenant's contractor shall arrange for
necessary utility, hoisting and elevator service with Landlord's
contractor; (ii) Tenant shall reimburse Landlord upon demand for any sums
expended by Landlord for examination and approval of plans and
specifications for any and all Alterations by outside consultants (e.g.
structural reviews); and (iii) Tenant shall also pay Landlord a sum equal
to five percent (5%) of the hard costs incurred by Tenant's contractor for
the supervision of any and all Alterations.
(5) Tenant shall promptly reimburse Landlord for costs incurred
by Landlord due to faulty work done by Tenant or its contractors, or by
reason of any delays caused by such work, or by reason of inadequate
clean-up.
(6) Landlord shall have the right to post a notice or notices in
conspicuous places in or about the Premises announcing its
non-responsibility for the work being performed therein.
C-1
(7) Landlord shall retain the right to all equipment and
materials to be salvaged or demolished from the Premises.
If ▇▇▇▇▇ Construction Inc. constructs the Tenant Improvements on
behalf of Tenant, Landlord acknowledges satisfaction of Paragraphs (1)(i),
(1)(ii), 3, 4(i), 4(iii), 5, and 6 of this Section II.A.
B. Tenant's Entry to Premises. Tenant's entry to the Premises for
any purpose, including without limitation, inspection or performance of
Tenant Construction by Tenant's agents, prior to the Commencement Date as
specified in Section 1.6 of the Lease shall be scheduled in advance with
Landlord and shall be subject to all the terms and conditions of the Lease,
except the payment of Rent. Tenant's entry shall mean entry by Tenant, its
officers, contractors, office planner, licensees, agents, servants,
employees, guests, invitees, or visitors.
C. Tenant's Telephone. Tenant is responsible for Tenant's telephone
service. Tenant shall select Tenant's telephone system and shall coordinate
its installation with the Landlord.
III. RETENTION OF ▇▇▇▇▇ CONSTRUCTION INC. AS TENANT'S CONTRACTOR.
By countersignature, Tenant retains ▇▇▇▇▇ Construction Inc. as
Tenant's contractor to complete the Tenant Improvements. This Exhibit C,
III is independent of all other terms of this Lease.
A. Authorization to Proceed. Upon completion of Tenant's Final
Plans, ▇▇▇▇▇ Construction Inc. shall provide to Tenant written notice of
the price for such improvements. Such price will include ▇▇▇▇▇ Construction
Inc.'s fee as general contractor of one percent (1%) on all costs,
including general conditions. Applicable state and local taxes will also be
included. Within five (5) business days of receipt of such price, Tenant
shall give written authorization to complete the Premises in accordance
with such Final Plans. Tenant may, prior to giving such authorization,
delete any and/or all items of extra cost; however, if Tenant deems these
changes to be extensive and notifies ▇▇▇▇▇ Construction Inc. thereof, ▇▇▇▇▇
Construction Inc. shall not be allowed to proceed until all changes have
been incorporated in Final Plans signed by Tenant, and Tenant's written
acceptance of the revised price has been received by ▇▇▇▇▇ Construction
Inc. At its option, ▇▇▇▇▇ Construction Inc. may refuse to accept the
authorization to proceed until all changes have been incorporated in the
Final Plans signed by Tenant and written acceptance of the revised price
has been received from Tenant. In the absence of such written authorization
to proceed, ▇▇▇▇▇ Construction Inc. shall not commence work on the Premises
and Tenant shall be responsible for any costs due to any resulting delay in
completion of the Premises due to Tenant's act or omissions.
B. Payments. ▇▇▇▇▇ Construction Inc. shall complete Tenant's
improvements in accordance with Tenant's approved Final Plans. Upon
submittal of an invoice for costs, Tenant shall pay such costs (provided it
has been approved in accordance with Paragraph A, above) within ten (10)
business days after receipt of monthly progress statements from ▇▇▇▇▇
Construction Inc., the full amount of such progress billing. If payment is
not received in accordance with the aforementioned payment terms on the due
date as specified on the progress billing, ▇▇▇▇▇ Construction Inc. shall
apply interest and late charges to past due amounts at the rate specified
in Section 4.2 of the Lease. If payment becomes thirty (30) days past due,
▇▇▇▇▇ Construction Inc. may cease work and ▇▇▇▇ Tenant for all costs to
date plus fees. All payments above One Hundred Thousand Dollars ($100,000)
must be made in accordance with Section 4.1.1 of the Lease. Tenant may
retain an amount equal to five percent (5%) of the last payment due.
Retention shall be rendered payable within ten (10) business days after
acceptance of the Premises by Tenant. Final billing shall be rendered and
payable within ten (10) business days after acceptance of the Premises by
Tenant in accordance with the terms of the Lease.
C-2
C. Final Plans and Modifications. If Tenant shall request any
change, Tenant shall request such change in writing to ▇▇▇▇▇ Construction
Inc. and such request shall be accompanied by all plans and specifications
necessary to show and explain changes from the approved Final Plans. After
receiving this information, ▇▇▇▇▇ Construction Inc. Shall give Tenant a
written price for the cost of engineering and design services to
incorporate the changes in Tenant's Final Plans. If Tenant approves such
price in writing, ▇▇▇▇▇ Construction Inc. Shall have such Final Plans
changes made and Tenant shall promptly pay ▇▇▇▇▇ Construction Inc. for this
cost. Promptly upon completion of such changes in the Final Plans, ▇▇▇▇▇
Construction Inc. shall notify Tenant in writing of the cost, if any, which
shall be chargeable or credited to Tenant for such change, addition or
deletion. The cost for such change, whether chargeable or credited to
Tenant, shall include ▇▇▇▇▇ Construction Inc.'s coordination fee equal to
fifteen percent (15%) of the amount of such charge, which shall be in lieu
of the one percent (1%) fee in paragraph A, above. Tenant shall notify
▇▇▇▇▇ Construction Inc. in writing within five (5) days to proceed with
such change, addition or deletion. In the absence of such notice, ▇▇▇▇▇
construction Inc. shall proceed in accordance with the previously approved
Final Plans before such change, addition or deletion was requested. Tenant
shall also be responsible for any demolition work required as a result of
the change.
▇. ▇▇▇▇▇ Construction Inc.'s Warranties. ▇▇▇▇▇ Construction Inc.
shall complete the Tenant Improvements in the Premises in compliance with
the drawings approved in accordance with this Exhibit C and in a good and
wormanlike manner. All warranties provided with such work shall be assigned
to Tenant.
TENANT AND ▇▇▇▇▇ CONSTRUCTION INC. AGREE TO THE ABOVE TERMS CONTAINED
IN THIS EXHIBIT C.III. AND TO THE RELATED PROVISIONS OF THE LEASE TO WHICH
THIS EXHIBIT C IS ATTACHED.
TENANT:
DWANGO NORTH AMERICA, INC.
DATE: 4/23/02 BY: /s/ ▇ ▇ ▇▇▇▇▇▇▇▇
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Its: Vice President
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▇▇▇▇▇ CONSTRUCTION INC.
DATE: 4/25/02 BY: /s/ ▇▇▇▇ ▇▇▇▇▇
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Its: Sr. Vice Pres.
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EXHIBIT C-1
TO LEASE AGREEMENT
TENANT'S REMOVABLE PROPERTY
Subject to the terms and conditions of this Lease, the fixtures,
improvements, furniture, equipment and other property of Tenant which may
be removed by Tenant from the Premises at the expiration or earlier
termination of this Lease are as set forth below in this Exhibit C-1. No
other improvements, alterations or property shall be removed from the
Premises at the expiration or termination of this Lease except as may be
provided otherwise in the Lease or as may be agreed upon by Landlord and
Tenant and added to this Exhibit C-1 by amendment to this Lease.
1. Upon the termination or expiration of this Lease Tenant, at
Tenant's expense, shall remove all cabling and wiring included within the
scope of Tenant's Work, Landlord's Work, Tenant's Alterations, or which was
otherwise installed by Tenant, from all interstitial/ceiling plenum areas.
2. Furniture and personal property.
C-1-1
EXHIBIT D
TO LEASE AGREEMENT
RULES AND REGULATIONS
1. Any directory provided by Landlord for the Building will be for the display
of the name and location of tenants of the Building, and Landlord reserves
the right to exclude any other names from inclusion in any such directory.
2. Tenant shall not place any new or additional locks on any doors of the
Premises or re-key any existing locks without the prior written consent of
Landlord.
3. Landlord reserves the right to exclude or expel from the common areas any
person who, in the sole judgment of Landlord, is intoxicated, under the
influence of drugs or who shall in any manner violate any of these Rules
and Regulations.
4. Tenant shall not do or permit to be done within the Premises, the building
or parking loading or other adjoining common areas, anything, which would
unreasonably annoy or interfere with the rights of other tenants of the
Building.
5. Tenant shall not permit its employees or invitees to loiter in or about the
common areas or obstruct any of the parking, truck maneuvering or other
common areas, or to place, empty or throw away rubbish, litter, trash or
material of any nature upon any common areas.
6. No storage of materials, equipment or property of any kind is permitted
outside the Premises unless otherwise approved in writing by Landlord and,
any such property may be removed by Landlord at Tenant's risk and expense.
7. Tenant shall not make or permit any use of the Premises which in the sole
judgment of Landlord, may be dangerous to persons or property; permit any
noise, odor or vibrations to emit from the Premises which are objectionable
to Landlord or other occupants of the Building; or to create, maintain or
permit a nuisance or any violation of any regulation of any governmental
agency thereon.
8. Tenant shall not commit or permit to be committed any waste, damage or
injury to the Premises, the Building or parking, loading and other common
areas adjoining and shall promptly notify Landlord in writing of such
waste, damage or injury and repair the same at its expense.
9. Tenant understands that any equipment required for maintenance of the
Premises is Tenant's responsibility and that Landlord has no equipment
available for Tenant's use therefore (e.g. ladders or lifts for re-▇▇▇▇▇▇▇,
etc.).
10. Tenant shall use the Premises and shall operate its equipment on the
Premises in a safe and prudent manner, and any damage or cracks occurring
in the floor of the Premises caused by Tenant shall be promptly brought to
the attention of Landlord by written notice and repaired by Tenant at its
expense.
11. Tenant shall not at any time display a "For Rent" sign upon the Premises.
12. Tenant shall be responsible for keeping a copy of the Lease and Landlord's
current rules and regulations upon the Premises.
13. Tenant agrees to cause its employees to park only in such designated areas
as may be designated by Landlord from time to time for employee parking and
shall abide by any rules or regulations concerning parking promulgated by
Landlord, or Landlord's agent, from time to time.
D-1
14. Tenant shall not waste electricity or water and agrees to cooperate fully
with Landlord to assure the most effective and economical use of utilities
services as may be provided to the Building by Landlord.
15. Tenant shall keep Landlord advised of current telephone numbers of Tenant's
employees who may be contacted in an emergency, i.e., fire, break-in,
vandalism, etc. If Landlord shall deem it necessary, in its sole judgment,
to respond to such emergency in Tenant's behalf, Tenant shall pay all costs
incurred for services ordered by Landlord to secure or otherwise protect
the Premises and the contents thereof, including a premium charge for any
time spent by Landlord's employees in responding to such emergency.
16. Tenant shall not smoke, and shall cause its employees, contractors, agents
and invitees to refrain from smoking, in the Building except in such areas
as may be designated as smoking areas by Landlord, if any. In the event
that Tenant desires to allow smoking in its Premises and such smoking is
permitted under applicable laws, then Tenant, at Tenant's sole expense and
subject to the requirements of Section 9 (Improvements And Alterations By
Tenant), shall first take such action as may be necessary to have a smoke
exhaust system installed in the Premises that is acceptable to Landlord.
17. No pets or other animals are permitted on the Property, including the
Premises, at any time except: (i) dogs which are present on the Property or
Premises in their capacity of providing assistance to a disabled person;
and (ii) laboratory animals of tenants leasing laboratory space and
pursuant to terms agreed upon by Landlord in writing prior to such animals
being brought onto the Property.
18. Subject to the terms and conditions of this Lease, any cost incurred for
direct services provided to Tenant beyond Normal Business Hours at Tenant s
request, shall be reimbursable to Landlord or Landlord s Management Agent.
Such direct costs to include after-hours labor charge for on-call
assistance as may be requested by Tenant or Tenant s employees. A minimum
three (3) hour charge shall be assessed per Tenant request.
19. Landlord shall not unlock the Premises door for any person known or unknown
as an employee of Tenant without a waiver in writing by Tenant indemnifying
Landlord to do so and under what conditions. Tenant acknowledges that in
the event Landlord or Building security responds to a request for someone
to go to the Property to unlock a door, a minimum Two Hundred Fifty Dollars
($250.00) will be charged if Landlord s employees unlock the door, and
Seventy-five Dollars ($75.00) if Building security responds to the request.
D-2
EXHIBIT E
TO
LEASE AGREEMENT
TENANT & TENANT CONTRACTOR
CONSTRUCTION CRITERIA
E-1