Exhibit 10.35
NORTH CREEK PLACE LEASE
BETWEEN
SPF HOLDING COMPANY,
AS LANDLORD
AND
TCSI CORPORATION.,
AS TENANT
LEASE
BETWEEN
SPF HOLDING COMPANY,
AS LANDLORD
AND
TCSI CORPORATION,
AS TENANT
INDEX
PAGE
SECTION I - LEASE DATA AND EXHIBITS...........................................3
1. LEASE DATA; EXHIBITS....................................................3
1.1 Building...............................................................3
1.2 Premises...............................................................3
1.3 Commencement Date......................................................3
1.4 Base Term..............................................................3
1.5 Minimum Rent...........................................................3
1.6 Security Deposit.......................................................3
1.7 Notice Addresses.......................................................3
1.8 Use....................................................................3
1.9 PARKING.............................................................4
1.10 PARK...............................................................4
1.11 Exhibits..............................................................4
SECTION II - PREMISES.........................................................4
2.1 PREMISES...............................................................4
2.2 RESERVED TO LANDLORD...................................................4
2.3 CHANGES TO PARK........................................................4
SECTION III - TERM............................................................4
3.1 BASE TERM..............................................................4
SECTION IV - RENT.............................................................4
4.1 MINIMUM RENT...........................................................4
4.2 ADDITIONAL RENT........................................................4
4.3 TENANT'S CONTRIBUTIONS TO OPERATING EXPENSES AND REAL PROPERTY TAXES...5
4.4 LATE CHARGE; INTEREST..................................................6
SECTION V - CONDUCT OF BUSINESS...............................................6
5.1 USE OF PREMISES........................................................6
5.2 APPEARANCE OF PREMISES.................................................6
5.3 UNLAWFUL USE...........................................................7
5.4 LIENS AND ENCUMBRANCES.................................................7
5.5 HAZARDOUS SUBSTANCES...................................................7
5.6 SIGNS..................................................................7
SECTION VI - UTILITIES AND OTHER CHARGES......................................7
6.1 UTILITIES..............................................................7
6.2 SERVICES...............................................................7
6.3 LICENSES AND TAXES.....................................................8
SECTION VII - DEPOSIT.........................................................8
7.1 DEPOSIT................................................................8
SECTION VIII - COMPLETION AND ALTERATIONS.....................................9
8.1 DELIVERY OF PREMISES...................................................9
8.2 ALTERATIONS BY TENANT..................................................9
SECTION IX - MAINTENANCE OF PREMISES..........................................9
9.1 MAINTENANCE AND REPAIR BY TENANT.......................................9
9.2 FAILURE TO MAINTAIN....................................................9
9.3 REPAIRS BY LANDLORD....................................................9
9.4 SURRENDER OF PREMISES.................................................10
SECTION X - COMMON AREAS.....................................................10
10.1 CONTROL OF COMMON AREAS BY LANDLORD..................................10
SECTION X - INSURANCE AND INDEMNITY..........................................10
1
11.1 INDEMNIFICATION......................................................10
11.2 INSURANCE............................................................11
11.3 INCREASE IN INSURANCE PREMIUMS.......................................11
11.4 WAIVER OF SUBROGATION................................................11
SECTION XII - ASSIGNMENT AND SUBLETTING......................................12
12.1 ASSIGNMENT OR SUBLEASE...............................................12
12.2 OWNERSHIP............................................................12
12.3 ASSIGNMENT BY LANDLORD...............................................12
SECTION XIII - DESTRUCTION OF PREMISES.......................................12
13.1 PARTIAL DESTRUCTION..................................................12
13.2 TOTAL DESTRUCTION....................................................13
13.3 LIMITATION...........................................................13
SECTION XIV - EMINENT DOMAIN.................................................13
14.1 TOTAL TAKING.........................................................13
14.2 PARTIAL TAKING.......................................................13
14.3 DAMAGES..............................................................13
SECTION XV - DEFAULT OF TENANT...............................................14
15.1 DEFAULTS.............................................................14
15.2 LEGAL EXPENSES.......................................................15
15.3 REMEDIES CUMULATIVE; WAIVER..........................................15
SECTION XVI - ACCESS BY LANDLORD; DEFAULT OF LANDLORD........................15
16.1 RIGHT OF ENTRY.......................................................15
16.2 EXCAVATION...........................................................15
16.3 DEFAULT OF LANDLORD..................................................16
SECTION XVII - SURRENDER OF PREMISES.........................................16
17.1 SURRENDER OF POSSESSION..............................................16
17.2 HOLDING OVER.........................................................16
SECTION XVIII - QUIET ENJOYMENT..............................................16
18.1 LANDLORD'S COVENANT..................................................16
SECTION XIX - MISCELLANEOUS..................................................16
19.1 NOTICES..............................................................16
19.2 SUCCESSORS OR ASSIGNS................................................16
19.3 INSOLVENCY...........................................................17
19.4 TENANT DEFINED.......................................................17
19.5 BROKERAGE COMMISSIONS................................................17
19.6 PARTIAL INVALIDITY...................................................17
19.7 RECORDING............................................................17
19.8 SUBORDINATION; NOTICE TO LENDER; ATTORNMENT..........................17
19.9 FINANCIAL STATEMENTS.................................................17
19.10 LIABILITY OF LANDLORD..............................................18
19.11 FORCE MAJEURE......................................................18
19.12 TRANSPORTATION MANAGEMENT PROGRAM; RECYCLING.......................18
SECTION XX - EXECUTION OF LEASE..............................................18
20.1 EXECUTION BY LANDLORD AND TENANT; APPROVAL OF LENDER.................18
SECTION XXI - ENTIRE AGREEMENT - APPLICABLE LAW..............................18
21.1 ENTIRE AGREEMENT - APPLICABLE LAW....................................18
EXHIBITS
A Legal Description of Larger Parcel
A-1 Diagram of Land
B Floor Plan
C Rules and Regulations
D Improvements
E Subordination, Non-Disturbance and Attornment Agreement
▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ LEASE
THIS LEASE is made as of the 28TH day of December, 1999, by and between
SPF HOLDING COMPANY, a Washington corporation ("Landlord"), and TCSI
CORPORATION, a Nevada corporation ("Tenant").
For and in consideration of the mutual promises, covenants and
conditions set forth in this Lease, Landlord and Tenant agree as follows:
SECTION I - LEASE DATA AND EXHIBITS
1. LEASE DATA; EXHIBITS. The following definitions shall apply, except
as otherwise specifically modified herein:
1.1 BUILDING. The building comprising North Creek Place is situated on
the real property described in attached EXHIBIT A (the "Larger Parcel"). As used
herein the term Land refers only to that portion of the Larger Parcel which is
marked by crosshatching on attached EXHIBIT A-1. The area of the Land is
thirteen and fourteen one-hundredths percent (13.14%) of the area of the Larger
Parcel.
1.2 PREMISES. The space located on the third floor of the Building, as
outlined on the floor plans(s) attached as EXHIBIT B. The estimated areas of the
Premises and Building are as follows:
The Premises - approximately 9,475 rentable square feet
The Building - approximately 88,394 rentable square feet
1.3 COMMENCEMENT DATE. May 1, 2000. See Section 3.1.
1.4 BASE TERM. Sixty (60) months.
1.5 MINIMUM RENT. Tenant shall pay minimum rent each month based on the
following annual rates per rentable square foot of Premises area:
PERIOD Annual Rate Per Rentable
SQUARE FOOT
1-36 $16.50
37-60 $17.75
1.6 SECURITY DEPOSIT. $19,226
1.7 NOTICE ADDRESSES
Landlord: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With Copy to: Alston, Courtnage, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tenant: At the Premises.
1.8 USE. Tenant shall use the Premises only for general business office
purposes. See Section 5.1.
1.9 PARKING. See Section 10.1.
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1.10 PARK. The Park consists of the Land and Building, as such may be
expanded pursuant to Section 2.3.
1.11 EXHIBITS. The following exhibits are made a part of this Lease:
Exhibit A - Legal Description of Larger Parcel
Exhibit A-1 - Diagram of Land
Exhibit B - Floor Plan
Exhibit C - Rules and Regulations
Exhibit D - Improvements
Exhibit E - Subordination, Non-Disturbance and Attornment
Agreement
SECTION II - PREMISES
2.1 PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Premises. The actual area of the Premises and Building will be
determined by Landlord's measurement in accordance with ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (▇▇▇▇
▇▇▇.▇-▇▇▇▇, approved June, 1996 by American National Standards Institute, Inc.)
before the Commencement Date.
2.2 RESERVED TO LANDLORD. Landlord reserves all air rights over the
Premises, the use of the exterior walls, the roof of the Building, and the right
to install, maintain, use, repair and replace pipes, ducts, conduits and wires
leading through the Premises in locations which will not materially interfere
with Tenant's use thereof to serve other parts of the Building and/or the Land.
2.3 CHANGES TO PARK. Landlord reserves the right at any time to make
alterations or additions to the Park, to expand the Park to include additional
phases from time to time to construct other buildings or improvements in the
Park and to relocate the various parking and other common areas and to grant
easements with respect thereto, so long as none of the foregoing materially and
adversely affect Tenant's access to, or use of, the Premises.
SECTION III - TERM
3.1 BASE TERM. This Lease shall be for the Section 1.4 base term
commencing on the Commencement Date, unless the Premises are not delivered by
Landlord in the condition required under terms of EXHIBIT D hereto by such date,
in which event the Commencement Date shall be delayed until the Premises are so
delivered, unless the delay was due to Tenant, in which latter event there shall
be no delay in the Commencement Date.
SECTION IV - RENT
4.1 MINIMUM RENT. Tenant shall pay to Landlord at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or to such other entity or address as may
be specified by Landlord from time to time, without any set off or deduction
whatsoever, as fixed minimum rent during the base term, the amount per rentable
square foot of Premises area specified in Section 1.5, payable in equal monthly
installments. Monthly installments of fixed minimum rent are due in advance on
or before the first day of each month of the Lease term. Rent for partial months
shall be prorated. The minimum rent does not include the additional rent payable
by Tenant pursuant to this Lease.
4.2 ADDITIONAL RENT. In addition to minimum rent, all other sums to be
paid or reimbursed by Tenant to Landlord, whether or not so designated, are
"additional rent" for the purposes of this Lease. If Tenant defaults in the
performance of any of its obligations hereunder, Landlord may, but shall not be
obligated to, perform such obligations, and the cost thereof to Landlord shall
also be additional rent. Unless otherwise specifically provided in this Lease,
Tenant shall pay Landlord all additional rent within ten (10) days after demand.
4.3 TENANT'S CONTRIBUTIONS TO OPERATING EXPENSES AND REAL PROPERTY
TAXES. In addition to minimum rent Tenant shall pay to Landlord as additional
rent "Tenant's Share" (defined in Section 4.3(a) below) of all "Operating Costs"
(defined in Sections 4.3(b) below) and "Real Property Taxes" (defined in Section
4.3(b) below) incurred in connection with the operation of the Building and/or
Park as follows:
(a) Before Lease commencement and each calendar year
commencing thereafter, Landlord will notify Tenant in writing of Landlord's
estimate of Tenant's Share of the
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Operating Costs and Real Property Taxes for the current year. As the Land is
currently only a portion of the Larger Parcel and not a separate legal lot, and
until the Land is a separately assessed legal parcel, Landlord will specially
allocate to the Park for purposes of cost sharing under this Section 4.3 only a
portion of the insurance and Real Property Taxes allocable to the Larger Parcel.
The shares so allocated to the Park will consist of (i) all of the Real Property
Taxes with respect to the improvements; (ii) a portion of the Real Property
Taxes with respect to the land element of the Larger Parcel shown on the tax
statement, being the ratio of the fair market value of the land within the Park,
as determined by Landlord, to the value of the land shown on the tax statement;
(iii) all insurance costs with respect to the Larger Parcel, other than the cost
of liability insurance; and (iv) a portion of the liability insurance costs with
respect to the Larger Parcel, equal to the share of the Real Property Taxes, as
determined under item (ii) above. Tenant shall pay such estimated amount in
advance, in equal monthly installments, without deduction or offset, on or
before the first (1st) day of each calendar month, with the payment of minimum
rent required pursuant to Section 3.1 above. "Tenant's Share" of the cost to be
shared shall be determined by multiplying the amount by a fraction, the
numerator of which is the rentable area of the Premises and the denominator of
which is the rentable area of the Building. If the rentable area of the Premises
or the Building change or are recalculated by Landlord, Tenant's Share will be
adjusted accordingly. Following the end of each calendar year, Landlord will
compute Tenant's Share for such year based on actual costs and, if Tenant's
Share of the amounts due for such year is greater than the amounts already paid
by Tenant pursuant to this Section 4.3, Tenant shall pay Landlord the deficiency
within twenty (20) days after receiving written notice of such amount from
Landlord. If the total amount paid for such year exceeds Tenant's Share, then
Landlord shall credit such excess to the payment of next month(s) rent and
additional rent which may thereafter become due under this Lease; however, upon
the expiration or sooner termination of the Lease term, if Tenant has otherwise
complied with all other terms and conditions of this Lease, Landlord shall
refund such excess to Tenant. If at any time during a calendar year Landlord
obtains additional information regarding costs or expenses of the Building, Land
or Park, Landlord may at its election adjust the amount of the monthly
installments due under this paragraph for the balance of the year to reflect
such additional information, by giving Tenant written notice thereof, which
notice also shall state the amount of the deficiency, if any, in the prior
monthly payments for the calendar year. Tenant shall pay any such deficiency
within thirty (30) days of its receipt of the notice and shall make the adjusted
monthly payments for the remainder of the calendar year.
(b) For purposes of this Lease:
(i) "Operating Costs" means all expenses paid or reasonably
incurred by Landlord or charged to Landlord for maintaining, managing,
operating, repairing, replacing and administering the Park (including wetlands
and Common Areas), and the personal property used in conjunction therewith,
including without limitation, the costs of refuse collection, water, sewer,
electricity, heat, air conditioning, fuel, light, fire protection, and other
utilities; services; supplies; janitorial and cleaning services; window washing;
snow, garbage and refuse removal; security services and systems; landscape and
wetlands maintenance; services of independent contractors; compensation
(including employment taxes and fringe benefits) of all persons who perform
duties in connection with the operation, management, maintenance, repair,
replacement and administration of the Park; Landlord's overhead costs, to the
extent attributable to the Park; insurance premiums for all insurance carried
with respect to the Park; the Park's share of expenses under easement,
cross-easement or like agreements benefiting the Park; licenses, permits and
inspection fees; subsidies, mitigation and other payments required by public
bodies, including those for traffic signals and controls and for fire
protection; professional management fees; rent for any on-site property
management office; legal and accounting expenses and all other expenses or
charges whether or not hereinabove described which, in accordance with generally
accepted accounting and management practices, would be considered an expense of
maintaining, managing, operating, repairing, replacing and administering the
Park, excluding: (a) costs of any special services rendered to individual
tenants (including Tenant) for which a special charge is made; (b) Real Property
Taxes; (c) ground lease rental payments and debt service on mortgages or deeds
of trust encumbering the Park; (d) attorneys' and other fees and costs incurred
in connection with disputes with tenants of the Building or the Park; (e)
depreciation or amortization of costs required to be capitalized in accordance
with generally accepted accounting practices (except Operating Costs shall
include amortization of capital improvements (1) which are designed with a
reasonable probability of improving the operating efficiency of the Building or
the Park, (2) required to comply with governmental laws or regulations not in
effect when the Building was constructed, or (3) made
5
for the general benefit or convenience of all tenants of the Building); (f)
legal fees, brokerage commissions, advertising costs or other related expenses
incurred by Landlord in an effort to generate rental income; (g) repairs,
alterations, additions, improvements or replacements made to correct any defect
in the original design, materials or workmanship for the Premises or the
Building (but not including repairs, alterations, additions, improvements or
replacements made as a result of ordinary wear and tear; (h) damage and repairs
necessitated by the negligence or willful misconduct of Landlord, Landlord's
employees, contractors or agents; (i) Landlord's general overhead expenses; (j)
costs (including permit, license and inspection fees) incurred in renovating or
otherwise improving, decorating, painting or altering (i) vacant space
(excluding common areas) in the Building, or (ii) space for tenants or other
occupants in the Building; (k) costs of any service provided to other occupants
of the Building for which Landlord is reimbursed, or any other expense for which
Landlord is reimbursed by another source (i.e., expenses covered by insurance or
warranties), in either case other than reimbursement for Operating Costs; (l)
costs incurred in connection with the original construction of the Premises or
the Building; (m) any bed debt loss, rent loss, or reserves for bad debts or
rent loss; (n) electric power costs which any tenant pays directly to the
utility company; and (o) tax penalties incurred as a result of Landlord's
negligence, inability or unwillingness to make payments when due.
(ii) "Real Property Taxes" means all taxes on the Park
(including common areas and facilities), and on personal property used in
conjunction therewith, and taxes on property of tenants of the Park which have
not been paid by such tenants directly to the taxing authority; surcharges and
all local improvement and other assessments levied with respect to the Park and
all other property used in connection with the operation of the Park; and any
taxes levied or assessed in addition to or in lieu of, in whole or in part, such
real or personal property taxes, or any other tax upon leasing of the Park or
rents collected therefrom, other than any federal, state or local net income tax
or franchise tax.
4.4 LATE CHARGE; INTEREST. If Tenant fails to pay any amount due
hereunder within ten (10) days of the due date, a late charge equal to five
percent (5%) of the unpaid amount shall be assessed and be immediately due and
payable. In addition, interest shall accrue on any payment which is more than
ten (10) days past due at the rate of five percentage points (5%) per annum in
excess of the prime business lending rate publicly quoted from time to time by
Bank of America or its successor (the "Bank"), calculated from the date the
payment was due to the date of payment. If the Bank ceases to quote a prime rate
or similar rate, interest calculated under this Section 4.4 shall be based on
the prime rate or similar rate of another United States national bank having an
office in Seattle, Washington, selected by Landlord. If the foregoing rate
exceeds the maximum rate permitted by applicable law, interest shall accrue at
the maximum rate so permitted by law, from the date due until paid on any amount
not paid when due.
SECTION V - CONDUCT OF BUSINESS
5.1 USE OF PREMISES. Tenant shall use the Premises only for the
purposes stated in Section 1.8. Tenant shall not use or permit the use of the
Premises for any other business or purpose without Landlord's prior written
consent. Tenant shall promptly comply with the rules and regulations of the
Building and the Land, as set forth in EXHIBIT C attached, as the same may be
changed from time-to-time by Landlord upon reasonable notice to Tenant.
5.2 APPEARANCE OF PREMISES. Tenant shall maintain the Premises in a
clean, orderly and neat fashion to conform with the high standards of the Park,
permitting no odors to be emitted from the Premises and neither commit waste nor
permit any waste to be committed thereon. Tenant shall not burn any trash in or
about the Premises or permit any accumulation of trash. Tenant shall store all
trash, refuse and waste material so as not to constitute a health or fire hazard
or nuisance, in adequately covered containers which are located within the
Premises which are not visible to the general public or in areas designated by
Landlord.
5.3 UNLAWFUL USE. Tenant shall not use or permit the Premises or any
part thereof to be used for any purpose in violation of any municipal, county,
state or federal law, ordinance or regulation, or for any purpose offensive to
the standards of the community of which the Building is a part. Tenant shall
promptly comply, at its sole cost and expense, with all laws, ordinances, and
regulations now in force or hereafter adopted and with the requirements of any
board of fire underwriters or similar body relating to or affecting the
condition, use or occupancy of the
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Premises. Landlord shall cause Common Areas to be delivered in compliance with
ADA requirements, and the Building to be delivered in an asbestos free
condition, at the time of completion thereof.
5.4 LIENS AND ENCUMBRANCES. Tenant shall keep the Premises free and
clear of all liens and encumbrances arising or growing out of its use and
occupancy of the Premises. If any lien is filed against the Park as a result of
the action or inaction of Tenant, Tenant shall within ten (10) days of demand by
Landlord post a bond in statutory amount to cause the lien to be removed of
record.
5.5 HAZARDOUS SUBSTANCES. Tenant shall not, without Landlord's prior
written consent, keep any substances designated as, or containing components
designated as, hazardous, dangerous, toxic, or harmful, and/or subject to
regulation under any federal, state, or local law, regulation, or ordinance
("Hazardous Substances") on or around the Premises, common areas, or Land,
except normal office supplies and cleaning products found in general business
offices, but only if Tenant shall use, store and dispose of such in accordance
with manufacturers' and suppliers' recommendations and all applicable laws,
regulations and ordinances. Tenant shall be fully and completely liable to
Landlord for, and shall indemnify, defend and hold Landlord harmless with
respect to, any and all cleanup costs and any and all other charges, fees,
fines, expenses, liabilities, suits, causes of action, costs and penalties of
every kind and nature relating to or growing out of Tenant's or its contractors,
agents, employees, subtenants, guests or invitees use, storage, disposal,
transportation, generation, release or sale of Hazardous Substances on, under,
about or from the Premises, Building or Park.
5.6 SIGNS. Landlord shall provide Building standard directory and suite
entry signage for Tenant at Landlord's expense. Tenant shall not erect or place,
or permit to be erected or placed, or maintain any signs of any nature or kind
whatsoever on the exterior walls or windows of the Premises or elsewhere in the
Land without Landlord's prior written consent.
SECTION VI - UTILITIES AND OTHER CHARGES
6.1 UTILITIES. Tenant shall pay prior to delinquency for all
electricity, telephone, water, gas, sewer, garbage, fire protection and any
other utilities which are separately metered to the Premises and, as part of its
share of Section 4.3 operating costs for all other utilities which are not
separately metered. Landlord shall select and control the utility service
provider to the Building and shall have the right at any time and from time to
time to change electrical service provider. Tenant shall cooperate with Landlord
to allow the electrical service provider with access to electrical lines and
equipment within the Premises. Landlord shall not be liable for any loss, injury
or damage to person or property caused by or resulting from any variation,
interruption, or failure of utilities or services due to any cause whatsoever;
of services or utilities incident to the making of repairs, alterations or
improvements, or due to accident, strike or conditions or other events beyond
Landlord's reasonable control shall be deemed an eviction of Tenant or to
relieve Tenant from any of Tenant's obligations hereunder or to give Tenant a
right of action against Landlord for damages; provided, however, if the
disruption is due to Landlord's negligence and continues for a period in excess
of forty eight (48) consecutive hours, then rent shall ▇▇▇▇▇ thereafter to the
extent of the disruption.
6.2 SERVICES.
(a) As long as Tenant is not in default under this Lease,
Landlord shall furnish the Leased Premises with electricity for office use,
including lighting and low power usage (110 volt) office machines, water and
elevator services. Landlord shall also provide routine janitorial and refuse
removal service on weekdays, other than holidays. From 7:00 a.m. to 6:00 p.m. on
weekdays, excluding legal holidays ("Normal Business Hours"), Landlord shall
furnish the Leased Premises with heat and air conditioning services. If
requested by Tenant, Landlord shall furnish heat and air conditioning services
at times other than Normal Business Hours, and Tenant shall pay for the cost of
such services at rates established by Landlord as Additional Rent. The initial
rate for after hours heating and air conditioning services is $30.00 per hour,
which rate shall be increased annually to reflect increases in utility,
administration and other costs related thereto.
(b) If Tenant requires garbage and refuse removal of a
different kind or a more intense level than Landlord customarily provides for
offices in the Park, or if Tenant's garbage or
7
refuse involves other materials requiring special handling, Tenant shall
promptly pay Landlord, as Additional Rent, for the additional costs and expenses
incurred by Landlord in providing such services and shall comply, at its sole
cost and expense, with procedures established for such by Landlord. If Tenant's
garbage contains medical wastes Tenant shall store and remove such, at Tenant's
sole cost and expense, in accordance with the requirements of applicable law and
such procedures as Landlord may from time to time establish.
(c) The Building standard mechanical system is designed to
accommodate heating loads of up to one and two-tenths (1.2) ▇▇▇▇▇ per square
foot generated by lights and three (3) ▇▇▇▇▇ per square foot generated by
equipment, for a maximum of four and two-tenths (4.2) ▇▇▇▇▇ per square foot.
Tenant shall obtain Landlord's prior written consent before installing lights
and equipment in the Leased Premises which in the aggregate exceed such amount.
Landlord may refuse to grant such consent unless Tenant agrees to pay (1) the
costs incurred by Landlord for installation of supplementary air conditioning
capacity or electrical systems as necessitated by such equipment or lights and
(2) in advance, on the first day of each month during the Lease term, the amount
estimated by Landlord as the excess cost of furnishing electricity for the
operation of such equipment or lights above normal Building office levels and
the amount estimated by Landlord as the cost of operation and maintenance of
supplementary air conditioning units as necessitated by Tenant's use of such
equipment or lights. Landlord shall be entitled to install, operate and maintain
a monitoring/metering system in the Leased Premises to measure the added demands
on electricity, heating, ventilation and air conditioning systems, resulting
from such equipment and lights and from Tenant's after-hours requirements.
(d) Landlord shall not be liable for any loss, injury or
damage to person or property caused by or resulting from any variation,
interruption or failure of services due to any cause whatsoever, including, but
not limited to, electrical surges, or from failure to make any repairs or
perform any maintenance. No temporary interruption or failure of such services
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 to relieve Tenant from any of Tenant's
obligations hereunder or to give Tenant a right of action against Landlord for
damages; provided, however if the disruption is due to Landlord's negligence and
continues for a period in excess of forty eight (48) consecutive hours, then
rent shall ▇▇▇▇▇ thereafter to the extent of the disruption while such
disruption continues.
6.3 LICENSES AND TAXES. Tenant shall be liable for, and shall pay
throughout the term of this Lease, all license and excise fees and occupation
taxes covering the business conducted on the Premises and all personal property
taxes levied with respect to all personal property located at the Premises. If
any governmental authority levies a tax or license fee on rents payable under
this Lease or rents accruing from use of the Premises or a tax or license fee in
any form against Landlord or Tenant because of or measured by or based upon
income derived from the leasing or rental thereof (other than a net income tax
on Landlord's income), or a transaction privilege tax, such tax or license fee
shall be paid by Tenant, either directly if required by law, or by reimbursing
Landlord for the amount thereof upon demand.
SECTION VII- DEPOSIT
7.1 DEPOSIT. As partial consideration for the execution of this Lease,
Tenant has deposited with Landlord the sum set forth in Section 1.6. Landlord
shall pay Tenant the balance thereof, without interest, within thirty (30) days
after the expiration or prior termination of the Lease term, or any extension
thereof, if and only if Tenant has fully performed all of its obligations under
the terms of this Lease. Landlord shall be entitled to withdraw from the deposit
the amount of any unpaid minimum rent or additional rent or other charges not
paid to Landlord when due, and Tenant shall immediately redeposit an amount
equal to that so withdrawn.
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SECTION VIII - COMPLETION AND ALTERATIONS
8.1 DELIVERY OF PREMISES. Landlord shall deliver the Premises to Tenant
in an AS IS condition, except as provided for in EXHIBIT D attached hereto.
Tenant shall inspect the Premises and advise Landlord within ten (10) days of
Landlord's delivery thereof of any defects in the Premises.
8.2 ALTERATIONS BY TENANT. Tenant shall not make any alterations,
additions or improvements in or to the Premises, other than interior work which
does not affect the Building structure or systems and costs less than Five
Thousand Dollars ($5,000) without first submitting to Landlord
professionally-prepared plans and specifications for such work and obtaining
Landlord's prior written approval thereof. Tenant covenants that it will cause
all such alterations, additions and improvements to be performed at Tenant's
sole cost and expense by Landlord or a contractor approved by Landlord and in a
manner which: (a) is consistent with the Landlord-approved plans and
specifications and any conditions imposed by Landlord in connection therewith;
(b) is in conformity with commercial standards; (c) includes acceptable
insurance coverage for Landlord's benefit; (d) does not affect the structural
integrity of the Building; (e) does not disrupt the business or operations of
adjoining tenants; and (f) does not invalidate or otherwise affect the
construction and systems warranties then in effect with respect to the Park.
With respect to any alterations, additions and improvements made by Landlord for
Tenant, at Tenant's request, Tenant shall pay Landlord a supervision fee which
shall be in an amount comparable to the fee a third party contractor would
charge in connection with a comparable project. Tenant shall secure all
governmental permits and approvals, as well as comply with all other applicable
governmental requirements and restrictions. All alterations, additions and
improvements (expressly including all light fixtures, heating, ventilation and
air conditioning units and floor coverings), except trade fixtures and
appliances and equipment not affixed to the Premises, shall immediately become
the property of Landlord without any obligation on its part to pay therefor.
Tenant shall remove such improvements on the termination of this Lease and
restore the Premises to the condition which existed prior to such improvements,
unless otherwise directed by Landlord at the time Landlord gives its consent
thereto.
SECTION IX - MAINTENANCE OF PREMISES
9.1 MAINTENANCE AND REPAIR BY TENANT. Except for routine janitorial
services performed by Landlord's janitorial service and for matters which are
Landlord's responsibility under terms of Section 9.3, Tenant shall at all times
keep the entire Premises (including doors and entrances, all windows and molding
and trim of all doors and windows) and all partitions, door surfaces, trade
fixtures and appurtenances thereof in good order, condition and repair. Tenant
shall immediately replace all broken glass in the Premises. Tenant shall
reimburse Landlord for all increases in Landlord's Common Area janitorial
services attributable to abnormal Premises conditions not rectified within ten
(10) days after notice and for all special services requested by Tenant,
including after hours services.
9.2 FAILURE TO MAINTAIN. If Tenant fails to keep and maintain the
Premises in the condition set forth in Section 9.1, Landlord may, at its option,
after execution of the applicable cure period, put or cause the same to be put
in the condition required thereunder, and Tenant on demand shall pay Landlord
the entire cost thereof within ten (10) days after its receipt of an invoice
therefor.
9.3 REPAIRS BY LANDLORD. Except for maintenance attributable to the
negligent or wrongful acts of Tenant or its employees, agents, contractors,
guests or invitees or its or their breach of applicable law or Tenant's breach
of its obligations under this Lease or to improvements made by Tenant, Landlord
shall maintain and repair the roof structure, exterior walls, foundation and
building structure of the Building and all systems serving the Premises in a
good state of repair. Landlord shall perform any repair or maintenance work
called to its attention by Tenant within a reasonable period of time after
receipt of such notice from Tenant. However, if the repair or maintenance work
in question creates an imminent risk of injury to persons or material damages to
property, and if Landlord has not commenced to address the problem within three
(3) business days after Landlord's receipt of written notice thereof from Tenant
identifying the problem as such, Tenant may undertake work to deal with the
immediate nature of the problem, as opposed to the long run resolution thereof,
and shall be reimbursed by Landlord for the reasonable out-of-pocket costs
incurred within twenty (20) days after Landlord's receipt of an invoice and
supporting
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documentation therefor. There shall be no abatement or reduction of rent arising
by reason of Landlord's making of repairs, alterations or improvements. All
costs incurred by Landlord in performing services under this Section 9.3 shall
be included as part of Operating Costs.
9.4 SURRENDER OF PREMISES. At the expiration or sooner termination of
this Lease, Tenant shall return the Premises to Landlord in the same condition
in which received (or, if altered, then the Premises shall be returned in such
altered condition unless otherwise directed by Landlord under terms of Section
8.2), reasonable wear and tear excepted. Prior to such return, Tenant shall
remove its trade fixtures and appliances and equipment which have not been
attached to the Premises, and shall restore the Premises to the condition they
were in prior to the installation of said items. In no event shall Tenant remove
floor coverings; heating, ventilating and air conditioning equipment; lighting
equipment or fixtures; wall coverings; window coverings; or other operating
equipment or decorations unless otherwise directed by Landlord. Tenant's
obligation to perform this covenant shall survive the expiration or termination
of this Lease.
SECTION X - COMMON AREAS
10.1 CONTROL OF COMMON AREAS BY LANDLORD. During the term of this
Lease, Tenant and its employees, customers and invitees, shall have the
nonexclusive right to use all entrances and other public areas of the Park (the
"Common Areas"), in common with Landlord, other Park tenants and their
respective employees, customers and invitees. Landlord at all times shall have
the exclusive control and management of the Common Areas and no diminution of
the Common Areas shall be deemed a constructive or actual eviction of Tenant or
entitle Tenant to compensation or a reduction or abatement of rent. Landlord
shall have the right from time to time to establish, modify and enforce rules
and regulations regarding the use of the Common Areas and the right to change
the area, level, location and arrangement of the Common Areas. Tenant shall have
the right to use up to four (4) non-reserved parking spaces on the Land for each
one thousand (1,000) square feet of Premises area, in common with other tenants
of the Park. If Tenant so elects and advises Landlord in writing thereof, it
shall have the right to have up to seven (7) of such unassigned spaces under
cover, for which it shall pay Landlord a monthly fee of Twenty Five Dollars
($25.00) per space per month. Tenant shall cause its employees and invitees to
comply with such rules and regulations from time-to-time promulgated with
respect to the parking areas of the Land.
SECTION XI - INSURANCE AND INDEMNITY
11.1 INDEMNIFICATION.
(a) Landlord shall not be liable for any injury to any person,
or for any loss of or damage to any property (including property of Tenant)
occurring in or about the Premises from any cause whatsoever, other than the
gross negligence or intentional misconduct of Landlord or its employees or
agents, or for interference with light, air or view or for any latent defect in
the Premises. Tenant shall indemnify, defend and save Landlord, its officers,
agents, employees and contractors, and other tenants and occupants of the Park,
harmless from all losses, damages, fines, penalties, liabilities and expenses
(including Landlord's personnel and overhead costs and attorneys' fees and other
costs incurred in connection with such claims, regardless of whether claims
involve litigation) resulting from any actual or alleged injury to any person or
from any actual or alleged loss of or damage to any property alleged to be
attributable to Tenant's operation or occupation of the Premises or caused by or
resulting from any act or omission of Tenant or any licensee, assignee, or
concessionaire, or of any officer, agent, employee, guest or invitee of any such
person in or about the Premises, including, but not limited to, the deposit or
release of hazardous or toxic materials or substances or Tenant's breach of its
obligations hereunder. Tenant agrees that the foregoing indemnity specifically
covers actions brought by its own employees.
(b) Landlord shall indemnify, defend and hold Tenant harmless
from and against any losses, liabilities, damages, costs and expenses, including
reasonable attorneys' fees resulting from injury to any person attributable to
any negligence or wrongful acts of Landlord or its employees, agents or
contractors or from Landlord's breach of this Lease.
(c) Notwithstanding any of the foregoing, if losses,
liabilities, damages, liens, costs and expenses so arising are caused by the
concurrent negligence of both Landlord and Tenant, their employees, agents,
invitees and licensees, a party shall indemnify the other only to the extent of
its own negligence or that of its officers, agents, employees, guests or
invitees. As between
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Landlord and Tenant, the foregoing indemnity is specifically and expressly
intended to constitute a waiver of a party's immunity under Washington's
Industrial Insurance Act, RCW Title 51, for the sole purpose of and only to the
extent necessary to provide the other party with a full and complete indemnity
from claims made against indemnified parties by the indemnifying party's
employees. The indemnification provided for in this Section with respect to acts
or omissions during the term of this Lease shall survive termination or
expiration of this Lease. Tenant shall promptly notify Landlord of casualties or
accidents occurring in or about the Premises. LANDLORD AND TENANT ACKNOWLEDGE
THAT THE INDEMNIFICATION PROVISIONS OF THIS SECTION 11.1 WERE SPECIFICALLY
NEGOTIATED AND AGREED UPON BY THEM.
11.2 INSURANCE. Tenant shall, at its own expense, maintain
comprehensive or commercial general liability insurance with broad form and stop
gap (employer's liability) endorsements in minimum limits of $2,000,000 per
occurrence and general aggregate for property damage or loss and minimum limits
of $2,000,000 per occurrence and general aggregate for personal injuries and
death, to indemnify Landlord, Tenant and any lender designated by Landlord
("Lender") against claims, demands, losses, damages, liabilities and expenses.
Landlord shall have the right to periodically review the appropriateness of such
limits in view of changing industry conditions and court decisions and to
require a reasonable increase in such limits upon ninety (90) days prior written
notice to Tenant. Landlord and Lender shall be named as additional insureds and
shall be furnished with a certificate of such policy or policies of insurance
which shall bear an endorsement that the same shall not be canceled nor
materially reduced in coverage or limits without thirty (30) days prior written
notice to Landlord and Lender. During the Lease term, Tenant shall also maintain
at its own expense insurance covering its furniture, fixtures, equipment and
inventory and all improvements which it makes to the Premises in an amount equal
to the full insurable value thereof, against fire and such other perils as are
covered by an all risk policy with plate glass endorsement, including all glass
on the Premises. All insurance required under this Lease shall (a) be issued by
insurance companies authorized to do business in the State of Washington and
having a financial rating of at least A, Class X status, as rated in the most
recent edition of Best's Insurance Reports, or with companies otherwise
acceptable to Landlord; (b) be issued as a primary policy, or under the blanket
policy, not contributing with and not in excess of coverage which Landlord may
carry; (c) in the case of the liability policy, contain a contractual liability
coverage endorsement; and (d) with deductibles approved by Landlord. If Tenant
fails to maintain such insurance, Landlord may do so, and Tenant shall reimburse
Landlord for the full expense thereof upon demand.
11.3 INCREASE IN INSURANCE PREMIUMS. Tenant shall not keep or use in
the Premises any article which is prohibited by Landlord's insurance policy, it
being agreed that normal business office furniture, office machinery and
equipment does not violate such prohibitions. Tenant shall pay immediately any
increase in Landlord's premiums for insurance during the term of this Lease
which results from Tenant's occupancy or use of the Premises. In determining
whether increased premiums are the result of Tenant's use of the Premises, a
schedule, issued by the organization establishing the insurance rate on the
Premises showing the various components of such rate, shall be conclusive
evidence of the several items and charges which make up the insurance rate on
the Premises.
11.4 WAIVER OF SUBROGATION. Neither Landlord nor Tenant shall be liable
to the other party or to any insurance company (by way of subrogation or
otherwise) insuring the property of the other party for any loss or damage to
any building, structure or tangible personal property of the other occurring in
or about the Premises, even though such loss or damage might have been
occasioned by the negligence of such party, its agents or employees, if such
loss or damage is covered by property insurance benefiting the party suffering
such loss or damage or was required to be covered by property insurance under
terms of this Lease. Each party shall cause each insurance policy obtained by it
insuring its property to contain the waiver of subrogation clause.
SECTION XII - ASSIGNMENT AND SUBLETTING
12.1 ASSIGNMENT OR SUBLEASE. Tenant shall not sublet the whole or any
part of the Premises, nor shall this Lease or any interest thereunder be
assignable or transferable by operation of law or by any process or proceeding
of any court or otherwise without the prior written consent of Landlord, which
consent shall not be unreasonably withheld. In determining whether to consent to
a proposed assignment or subletting, Landlord may consider any commercially
reasonable basis for approving or disapproving the proposed subletting or
assignment, including without limitation
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the following factors: (i) the experience and business reputation of the
proposed assignee or sublessee, (ii) the clientele, personnel and traffic which
will be generated by the proposed assignee or sublessee, (iii) notwithstanding
that Tenant and/or others may remain liable under this Lease, whether the
proposed assignee or sublessee has a net worth and financial strength and credit
record satisfactory to Landlord, and (iv) whether the use of the Premises by the
proposed assignee or sublessee will be substantially the same as the use
required by this Lease, or if the use is different than the use provided for
under this Lease, such use is consistent with a first class office park and will
not violate or create any potential violation of any laws and such use will not
result in a breach or violation of any other lease or agreement by which
Landlord is bound. In lieu of giving its consent, Landlord shall have the right
to terminate this Lease, unless Tenant rescinds its request for consent within
three (3) business days notice after Tenant receives notice of Landlord's
intention to terminate. Any assignment or sublease without Landlord's prior
written consent shall, at Landlord's option, be void. Each assignment shall be
by an instrument in writing in form satisfactory to Landlord. Failure to first
obtain in writing Landlord's written consent or to comply with the provisions of
this section shall operate to prevent any such assignment or sublease from
becoming effective. If Tenant assigns its interest in this Lease or sublets the
Premises, Tenant shall pay to Landlord any and all consideration received by
Tenant for such assignment or sublease. Tenant shall also pay all reasonable
out-of-pocket attorneys' fees (based on actual time spent and normal hourly
rates) and other costs incurred by Landlord in connection with Landlord's
consideration of Tenant's request for approval of assignments or subleases,
including assignments for security purposes.
12.2 OWNERSHIP. Any transfer of this Lease by merger, consolidation or
liquidation, or any change in the ownership of, or power to vote the majority of
Tenant's outstanding stock or membership or partnership interests, shall
constitute an assignment for the purposes of this section.
12.3 ASSIGNMENT BY LANDLORD. If Landlord sells or otherwise transfers
the Building, or if Landlord assigns its interest under this Lease (other than
for security purposes) and such purchaser, transferee or assignee assumes
Landlord's obligations hereunder arising thereafter, Landlord shall thereupon be
relieved of all liabilities hereunder arising thereafter, but this Lease shall
otherwise remain in full force and effect.
SECTION XIII - DESTRUCTION OF PREMISES
13.1 PARTIAL DESTRUCTION. If the Premises are rendered partially
untenantable by fire or other insured casualty, and if the damage is repairable
within sixty (60) days from the date of the occurrence (with the repair work and
preparations therefore to be done during regular working hours on regular work
days), Landlord shall repair the Premises with due diligence and the monthly
minimum rental and additional rent shall be abated in the proportion that the
untenantable portion of the Premises bears to the whole thereof for the period
from the date of the casualty to the completion of the repairs, unless the
casualty results from Tenant's negligence or its breach of the terms hereof. If
thirty percent (30%) or more of the rentable area of the Building is destroyed
or damaged, then regardless of whether the Premises are damaged, Landlord may
terminate this Lease as of the date of such damage or destruction by giving
notice of termination to Tenant within thirty (30) days thereafter.
13.2 TOTAL DESTRUCTION. If the Premises are completely destroyed by
fire or other casualty, or if they are damaged by uninsured casualty, or by
insured casualty to such an extent that the damage cannot be repaired within
sixty (60) days of the occurrence, Landlord shall have the option to restore the
premises or to terminate this Lease on thirty (30) days written notice,
effective as of any date not more than sixty (60) days after the occurrence. If
this Section becomes applicable, Landlord shall advise Tenant within thirty (30)
days after such casualty whether Landlord elects to restore the Premises or to
terminate this Lease. If Landlord elects to restore the Premises, it shall
commence and prosecute the restoration work with diligence. For the period from
the date of the casualty until completion of the repairs (or the date of
termination of this Lease, if Landlord elects not to restore the Premises), the
monthly minimum rent and additional rent shall be abated in the same proportion
that the untenantable portion of the Premises bears to the whole thereof, unless
the casualty results from Tenant's negligence or its breach of its obligations
under this Lease. If the Premises are totally damaged or destroyed, and the
repairs to the Premises have not been completed within nine (9) months after the
damage or destruction (subject to force majeure and Tenant delays) despite
Landlord's diligent efforts, then Tenant shall have the right to
12
terminate this Lease by giving Landlord written notice thereof within thirty
(30) days after the end of the foregoing nine (9) month period, which notice
will be effective if Landlord does not complete the repairs within thirty (30)
days after Tenant delivers its termination notice to Landlord.
13.3 LIMITATION. Landlord shall not be liable to Tenant for destruction
or damage to any of Tenant's property including fixtures, equipment or other
improvements, or for damages or compensation for inconvenience, loss of business
or disruption arising from repairs or restoration of any portion of the Building
or the Premises.
SECTION XIV - EMINENT DOMAIN
14.1 TOTAL TAKING. If all of the Premises are taken by eminent domain,
this Lease shall terminate as of the date Tenant is required to vacate the
Premises and all rentals shall be paid to that date. The term "eminent domain"
shall include the taking or damaging of property by, through or under any
governmental or statutory authority, and any purchase or acquisition in lieu
thereof, whether the damaging or taking is by government or any other person.
14.2 PARTIAL TAKING. If a taking of any part of the Premises by eminent
domain renders the remainder thereof unusable for the business of Tenant, in the
reasonable judgment of Landlord, this Lease may, at the option of either party,
be terminated by written notice given to the other party not more than thirty
(30) days after Landlord receives notice (and provides Tenant written notice) of
the taking, and such termination shall be effective as of the date when Tenant
is required to vacate the portion of the Premises so taken. If this Lease is so
terminated, all rent shall be paid to the date of termination. Whenever any
portion of the Premises is taken by eminent domain and this Lease is not
terminated, Landlord shall at its expense proceed with all reasonable dispatch
to restore, to the extent of available proceeds and to the extent it is
reasonably prudent to do so, the remainder of the Premises to the condition it
was in immediately prior to such taking, and Tenant shall at its expense proceed
with all reasonable dispatch to restore its fixtures, furniture, furnishings,
floor covering and equipment to the same condition they were in immediately
prior to such taking. The minimum rent payable hereunder shall be reduced from
the date Tenant is required to partially vacate the Premises in the same
proportion that the area taken bears to the total area of the Premises prior to
taking.
14.3 DAMAGES. Landlord reserves all right to the entire damage award or
payment for any taking by eminent domain or a transfer in lieu thereof, and
Tenant waives all claim whatsoever against Landlord for damages for termination
of its leasehold interest in the Premises or for interference with its business
as a result of such taking. Tenant hereby grants and assigns to Landlord any
right Tenant may now have or hereafter acquire to such damages and agrees to
execute and deliver such further instruments of assignment as Landlord may from
time to time request; however, Tenant shall have the right to receive from the
condemning authority all compensation for any loss incurred by Tenant in
removing Tenant's furniture, trade fixtures and equipment and for Tenant's
personal property which is taken, as provided for in the condemning authority's
final offer.
SECTION XV - DEFAULT OF TENANT
15.1 DEFAULTS.
(a) Time is of the essence of this Lease. Tenant shall be in
default under this Lease if (i) Tenant violates or breaches or fails to keep or
perform any covenant, term or condition of this Lease, or (ii) Tenant or any
guarantor of Tenant's obligations under this Lease (a "Guarantor") files or is
the subject of a petition in bankruptcy, or (iii) a trustee or receiver is
appointed for Tenant's or any Guarantor's assets, or (iv) Tenant or any
Guarantor makes an assignment for the benefit of creditors, or (v) Tenant
vacates or abandons the Premises. If the default under (i) above is the
nonpayment of rent, additional rent or any other sum payable by Tenant under
this Lease, Tenant shall have three (3) days after written notice to cure the
default. If the default under (i) above is something other than nonpayment of
rent, additional rent or any other sum payable by Tenant under this Lease,
Tenant shall have ten (10) days following receipt of written notice from
Landlord within which to cure any such default; provided, if the nature of the
default is such that the same cannot reasonably be cured within such ten (10)
day period, the cure period shall be extended for so long as may be reasonably
necessary to cure the default so long as Tenant commences the cure within the
initial ten (10) day period, thereafter diligently prosecutes the cure to
completion in good faith, and furnishes Landlord with such assurances and
indemnities
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as Landlord may reasonably require to insure completion thereof and fully and
completely protect Landlord from any loss or liability resulting from any such
default or any delay by Tenant in curing the default. The foregoing notices and
cure periods include, and are not in addition to, any notices and cure periods
otherwise required by RCW 59.12, as now or hereafter amended, or any legislation
in substitution therefor. Landlord shall use commercially reasonable efforts to
mitigate its losses.
(b) If a default is not cured within the applicable cure
period, if any, Landlord shall have the following rights and remedies, at its
option which shall not be exclusive, but shall be cumulative and in addition and
supplemental to any and all other rights and/or remedies that Landlord may have
at law or if equity: (1) to declare the term hereof ended and to reenter the
Premises and take possession thereof and remove all persons therefrom, and
Tenant shall have no further claim thereon or hereunder; or (2) without
declaring this Lease terminated, to reenter the Premises and occupy the whole or
any part thereof for and on account of Tenant and to collect any unpaid rentals
and other charges, which have become payable, or which may thereafter become
payable; or (3) even though it may have reentered the Premises, to thereafter
elect to terminate this Lease and all of the rights of Tenant in or to the
Premises. If Landlord reenters the Premises under option (2) above, Landlord
shall not be deemed to have terminated this Lease or the liability of Tenant to
pay any rental or other charges thereafter accruing, or to have terminated
Tenant's liability for damages under any of the provisions hereof, by any such
reentry or by any action, in unlawful detainer or otherwise, to obtain
possession of the Premises, unless Landlord shall have notified Tenant in
writing that it has so elected to terminate this Lease, and Tenant further
covenants that the service by Landlord of any notice pursuant to the unlawful
detainer statutes and the surrender of possession pursuant to such notice shall
not (unless Landlord elects to the contrary at the time of or at any time
subsequent to the serving of such notices and such election is evidenced by
written notice to Tenant) be deemed to be a termination of this Lease. In the
event of any entry or taking possession of the Premises, Landlord shall have the
right, but not the obligation, to remove therefrom all or any part of the
personal property located therein and may place the same in storage at a public
warehouse at the expense and risk of Tenant.
(c) If Landlord elects to terminate this Lease pursuant to the
provisions of options (1) or (3) in subparagraph b above, Landlord may recover
from Tenant as damages, the following: (i) the worth at the time of award of any
unpaid rental which had been earned at the time of such termination; plus (ii)
the worth at the time of award of the amount by which the unpaid rental which
would have been earned after termination until the time of award exceeds the
amount of such rental loss Tenant proves could have been reasonably avoided;
plus (iii) the worth at the time of award of the amount by which the unpaid
rental for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; plus (iv) any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform its obligations under this Lease,
including, but not limited, any costs or expenses incurred by Landlord in (1)
retaking possession of the Premises, including reasonable attorneys' fees
therefor, (2) maintaining or preserving the Premises after such default, (3)
preparing the Premises for reletting to a new tenant, including repairs or
alterations to the Premises for such reletting, (4) leasing commissions, and (5)
any other costs necessary or appropriate to relet the Premises; plus (v) at
Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by the laws of the State of
Washington. As used in items (i) and (ii) above, the "worth at the time of
award" is computed by allowing interest at the interest rate specified in
Section 4.4 hereof. As used in item (iii) above, the "worth at the time of
award" is computed by using a discount rate of five percent (5%). Landlord shall
use commercially reasonable efforts to mitigate its losses.
(d) For all purposes of this Section 15.1 only, the term
"rental" shall be deemed to be the minimum rental and all additional rent and
other sums required to be paid by Tenant pursuant to the terms of this Lease.
All such sums, other than the minimum rental, shall, for the purpose of
calculating any amount due under the provisions of subparagraph (iii) above, be
computed on the basis of the average monthly amount thereof accruing during the
immediately preceding twelve (12) month period, except that if it becomes
necessary to compute such rental before such a twelve (12) month period has
occurred then such rental shall be computed on the basis of the average monthly
amount hereof accruing during such shorter period.
15.2 LEGAL EXPENSES. If either party consults an attorney in order to
enforce this Lease the prevailing party shall be entitled to reimbursement from
the non-prevailing party for the
14
prevailing party's reasonable costs and attorneys' fee, whether such costs and
attorneys' fees are incurred with or without litigation, in a bankruptcy court
or on appeal.
15.3 REMEDIES CUMULATIVE; WAIVER. Landlord's remedies hereunder are
cumulative, and Landlord's exercise of any right or remedy due to a default or
breach by Tenant shall not be deemed a waiver of, or alter, affect or prejudice
any other right or remedy which Landlord may have under this Lease or by law.
Neither the acceptance of rent nor any other acts or omissions of Landlord at
any time or times after the happening of any event authorizing the cancellation
or forfeiture of this Lease shall operate as a waiver of any past or future
violation, breach or failure to keep or perform any covenant, agreement, term or
condition hereof or to deprive Landlord of its right to cancel or forfeit this
Lease, upon the written notice provided for herein, at any time that cause for
cancellation or forfeiture may exist, or be construed so as at any future time
to estop Landlord from promptly exercising any other option, right or remedy
that it may have under any term or provision of this Lease.
SECTION XVI - ACCESS BY LANDLORD; DEFAULT OF LANDLORD
16.1 RIGHT OF ENTRY. Landlord and its agents shall have the right to
enter the Premises at any time upon reasonable prior notice to Tenant, to
examine the same, to show them to prospective purchasers, lenders or, during the
last six (6) months of the Lease term or while Tenant is in default under this
Lease, tenants, to make such alterations, repairs, improvements or additions as
Landlord may deem necessary; provided, in an emergency or perceived emergency or
to provide normal services (such as janitorial service) to the Premises, no
advance notice shall be required. Landlord shall use diligent efforts to
accomplish such in a manner which will minimize the disruption of Tenant's
operations in the Premises. If Tenant is not personally present to permit entry
and an entry is necessary in an emergency, Landlord may enter the same by master
key/security card or may forcibly enter the same, without rendering Landlord
liable therefor. Nothing contained herein shall be construed to impose upon
Landlord any duty of repair except as specifically provided for herein. Tenant
shall not change the locks to, or security systems for, the Premises without
first advising Landlord thereof and providing Landlord with the requisite keys
or access cards.
16.2 EXCAVATION. If Landlord authorizes an excavation upon land
adjacent to the Premises, Tenant shall permit the person doing the excavation to
enter the Premises for the purpose of doing such work as Landlord deems
necessary to preserve the walls of the Building from injury or damage and to
support the same by proper foundations, without any claim for damage or
indemnification against Landlord or diminution or abatement of rent, so long as
Landlord uses diligent efforts to minimize the impact of such work on Tenant's
operations.
16.3 DEFAULT OF LANDLORD. If Landlord defaults in the performance of
any covenant required to be performed by Landlord, Tenant may serve upon
Landlord a written notice specifying the default. If Landlord does not remedy
the default within thirty (30) days following receipt thereof or, in the case of
a default which reasonably requires more than thirty (30) days to cure, if
Landlord has not commenced to remedy the same within thirty (30) days following
receipt thereof, Tenant may, after expiration of the notice period specified in
Section 19.8 hereof, cure the default on Landlord's behalf and the costs
incurred by Tenant in so doing shall be paid by Landlord to Tenant within thirty
(30) days after Tenant's giving Landlord written notice of the amounts so
incurred, together with reasonable supporting information or documentation.
SECTION XVII - SURRENDER OF PREMISES
17.1 SURRENDER OF POSSESSION. Tenant shall promptly yield and deliver
to Landlord possession of the Premises upon the expiration or earlier
termination of this Lease in the condition they were required to be maintained
hereunder (subject to the removals required or permitted hereunder). Landlord
may place and maintain a "For Rent" sign in conspicuous places on the Premises
for sixty (60) days prior to the expiration or earlier termination of this
Lease.
17.2 HOLDING OVER. Any holding over by Tenant after the expiration of
the term hereof with Landlord's prior written consent shall be construed as a
tenancy from month to month on the terms and conditions set forth herein, except
that the rental rate shall equal one and one-half (1 1/2) times the rental rate
in effect on the date of expiration of this Lease which tenancy may be
terminated by either party upon thirty (30) days written notice to the other
party. Any holding over by Tenant after the expiration of the term hereof
without Landlord's prior written consent shall be
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deemed to be a tenancy at will, terminable at any time by Landlord at a rental
rate equal to two and one-half (2 1/2) times the rental rate in effect on the
date of expiration of the Lease term, prorated on a daily basis, and otherwise
on the terms, covenants and conditions of this Lease to the extent applicable.
Tenant shall be liable for all damages suffered by Landlord if it holds over
without Landlord's prior written consent.
SECTION XVIII - QUIET ENJOYMENT
18.1 LANDLORD'S COVENANT. Tenant, upon fully complying with and
promptly performing all of the terms, covenants and conditions of this Lease on
its part to be performed, shall have and quietly enjoy the Premises for the term
set forth herein, if its performance of such terms, covenants and conditions
continues for such period, subject, however, to matters of record on the date
hereof and to those matters to which this Lease may be subsequently
subordinated.
SECTION XIX - MISCELLANEOUS
19.1 NOTICES. Any notices required in accordance with any of the
provisions herein shall be in writing and delivered, sent by fax, overnight
courier or mailed by registered or certified mail to the Landlord at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, fax no. (▇▇▇) ▇▇▇-▇▇▇▇; to Tenant
at the Premises, fax no. ▇▇▇-▇▇▇-▇▇▇▇; or to such other address as a party shall
from time to time advise the other party by a written notice given in accordance
with this Section 19.1. If Tenant is a partnership or joint enterprise, any
notice required or permitted hereunder may be given by or to any one partner
thereof with the same force and effect as if given by or to all thereof. If
mailed, a notice shall be deemed received two (2) business days after the
postmark affixed on the envelope by the United States Post Office.
19.2 SUCCESSORS OR ASSIGNS. All of the terms, conditions, covenants and
agreements of this Lease shall extend to and be binding upon Landlord, Tenant
and, subject to the terms of Section 12.1 hereof, their respective heirs,
administrators, executors, successors and permitted assigns, and upon any person
or persons coming into ownership or possession of any interest in the Premises
by operation of law or otherwise, and shall be construed as covenants running
with the land.
19.3 INSOLVENCY. If a petition is filed under the Bankruptcy Act or
other law to have Tenant reorganized, dissolved or liquidated, or if a trustee
or receiver is appointed for Tenant's assets under the Bankruptcy Act or other
law or if a proceeding commenced to foreclose any mortgage or any other lien on
Tenant's interest in the Premises or on personal property kept or maintained
thereon, or if Tenant makes an assignment for the benefit of creditors, then
Tenant shall be deemed in default hereunder.
19.4 TENANT DEFINED. The word "Tenant" as used herein shall mean each
and every person, partnership or corporation who is mentioned as Tenant herein
or who executes this Lease as Tenant. If there shall be more than one Tenant,
they shall all be bound jointly and severally by the terms, covenants and
agreements herein.
19.5 BROKERAGE COMMISSIONS. Landlord will pay a brokerage commission to
▇▇▇▇▇▇▇▇▇ Group ("Broker") in accordance with separate agreement between
Landlord and Broker. Tenant agrees to indemnify and hold Landlord harmless from
all liabilities and claims for brokerage commissions or finder's fees growing
out of agreements which Tenant has made with persons or entities other than
Broker, including any fee due Broker in excess of the fee which Landlord has
agreed to pay.
19.6 PARTIAL INVALIDITY. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance is, to any
extent, invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by law.
19.7 RECORDING. Tenant shall not record this Lease without the prior
written consent of Landlord. However, upon Landlord's request, both parties
shall execute a memorandum of this Lease, in a form customarily used for such
purpose of recordation. The memorandum shall
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describe the parties, the Premises and the term of this Lease and shall
incorporate the other terms of this Lease by reference.
19.8 SUBORDINATION; NOTICE TO LENDER; ATTORNMENT.
(a) Unless otherwise designated by Landlord, this Lease shall
be subordinate to all existing or future mortgages and deeds of trust on the
Park, and to any extensions, renewals or replacements thereof; however, Tenant's
possession of the Premises pursuant to this Lease may not be disturbed by any
such mortgagee so long as Tenant is not in default under this Lease. Within
twenty (20) days of Landlord's request therefor Tenant shall execute and deliver
to the Lender designated by Landlord a Subordination, Non-Disturbance and
Attornment Agreement substantially in the form attached as EXHIBIT E to reflect
such subordination of this Lease. Within twenty (20) days of Landlord's request
therefor, Tenant shall execute and deliver to third parties designated by
Landlord an estoppel certificate or letter in the form requested by Landlord or
its lender that correctly recites the facts with respect to the existence, terms
and status of this Lease. Tenant agrees to attorn to Landlord's successor
following any foreclosure sale or transfer in lieu thereof.
(b) Notwithstanding anything to the contrary in this Lease,
Landlord shall not be in default under any provision of this Lease unless
written notice specifying such default is given to Landlord and to any lender
who has been identified to Tenant in writing as a party to whom notice must be
sent. Any lender of Landlord entitled to notice pursuant to the preceding
sentence shall have the right to cure any default on behalf of Landlord within
the cure period provided in paragraph 5 of Exhibit E hereto.
19.9 FINANCIAL STATEMENTS. Within ten (10) days after Landlord's
request therefor, Tenant shall deliver to Landlord such current financial
statements regarding Tenant as Landlord may reasonably request. Tenant shall
certify the accuracy of such statements. Landlord may make the financial
statements available to potential lenders or purchasers, but shall otherwise
preserve their confidentiality except in connection with legal proceedings
between the parties or as otherwise directed by court rule or order.
19.10 LIABILITY OF LANDLORD. Tenant shall look solely to Landlord's
interests in the Building (including without limitation the rents, issues and
profits from the Building) for the satisfaction of any judgment or decree
against Landlord based upon any default under this Lease, and no other property
or assets of the Landlord (or its partners) shall be subject to levy, execution
or other enforcement procedures for satisfaction of any such judgment or decree.
19.11 FORCE MAJEURE. Landlord shall not be deemed in default hereof nor
liable for damages arising from its failure to perform its duties or obligations
hereunder if such is due to causes beyond its reasonable control, including, but
not limited to, acts of God, acts of civil or military authorities, fires,
floods, windstorms, earthquakes, strikes or other labor disturbances, civil
commotion or war.
19.12 TRANSPORTATION MANAGEMENT PROGRAM; RECYCLING. Tenant shall
cooperate with Landlord in meeting the objectives and complying with the terms
and conditions of any transportation management plan applicable to the Building
or the Land. Landlord will provide Tenant with a copy of any such transportation
management plan now or hereafter in effect. In addition, Tenant will cooperate
with and participate in any and all recycling programs now or hereafter in place
with respect to the Building or the Land.
SECTION XX - EXECUTION OF LEASE
20.1 EXECUTION BY LANDLORD AND TENANT; APPROVAL OF LENDER. Landlord
shall not be deemed to have made an offer to Tenant by furnishing Tenant with a
copy of this Lease with particulars inserted. No contractual or other rights
shall exist or be created between Landlord and Tenant until all parties hereto
have executed this Lease and, if so indicated by Landlord, until it has been
approved in writing by Lender and fully executed copies have been delivered to
Landlord and Tenant. Tenant agrees to make such changes herein as may be
requested by Lender so long as such do not increase amounts due from Tenant
hereunder or otherwise materially alter its rights hereunder.
SECTION XXI - ENTIRE AGREEMENT - APPLICABLE LAW
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21.1 ENTIRE AGREEMENT - APPLICABLE LAW. This Lease and the Exhibits
attached hereto, and by this reference incorporated herein, set forth the entire
agreement of Landlord and Tenant concerning the Premises, and there are no other
agreements or understanding, oral or written, between Landlord and Tenant
concerning the Premises. Any subsequent modification or amendment of this Lease
shall be binding upon Landlord and Tenant only if reduced to writing and signed
by them. This Lease shall be governed by, and construed in accordance with the
laws of the State of Washington.
DATED as of the day and year first written above.
LANDLORD:
Executed this 28TH day SPF HOLDING COMPANY,
of December, 1999 a Washington corporation
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Its President
TENANT:
Executed this 23RD day TCSI CORPORATION,
of December, 1999 a Nevada corporation
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Its Vice President
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 28TH day of DECEMBER, 1999, before me, the undersigned, a
Notary Public in and for the State of Washington, duly commissioned and sworn
personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, known to me to be the PRESIDENT of SPF
HOLDING COMPANY, the corporation that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said corporation, for the purposes therein mentioned, and on oath stated that
he/she was authorized to execute said instrument.
I certify that I know or have satisfactory evidence that the person
appearing before me and making this acknowledgment is the person whose true
signature appears on this document.
WITNESS my hand and official seal hereto affixed the day and year in
the certificate above written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Signature
[Notary Stamp]
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Print Name
NOTARY PUBLIC in and for the State
of Washington, residing at BELLEVUE.
My commission expires SEPTEMBER 24,
2003.
STATE OF CALIFORNIA )
) ss.
COUNTY OF ALAMEDA )
On this 23RD day of DECEMBER, 1999, before me, the undersigned, a
Notary Public in and for the State of California, duly commissioned and sworn
personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be the VICE PRESIDENT of
TCSI CORPORATION, the corporation that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said corporation, for the purposes therein mentioned, and on oath stated that
he/she was authorized to execute said instrument.
I certify that I know or have satisfactory evidence that the person
appearing before me and making this acknowledgment is the person whose true
signature appears on this document.
WITNESS my hand and official seal hereto affixed the day and year in
the certificate above written.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Signature
[Notary Stamp]
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Print Name
NOTARY PUBLIC in and for the State
of California, residing at
LIVERMORE, CA.
My commission expires OCTOBER 21,
2003.
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