EXHIBIT 10.7
ONE NEWPORT
OFFICE BUILDING LEASE
MERCATA, INC.
Mercata, Inc.
One Newport
Office Building Lease
TABLE OF CONTENTS
1. BASIC LEASE TERMS............................................... 1
2. PREMISES........................................................ 3
3. TERM............................................................ 7
4. DELAY IN POSSESSION............................................. 10
5. RENT............................................................ 11
6. OPERATING COSTS................................................. 11
7. SECURITY DEPOSIT................................................ 16
8. UTILITIES AND SERVICES.......................................... 18
9. CARE OF PREMISES................................................ 19
10. ASSIGNMENT AND SUBLETTING....................................... 21
11. DAMAGE OR DESTRUCTION........................................... 23
12. INDEMNIFICATION................................................. 24
13. DAMAGE TO TENANT'S PROPERTY..................................... 25
14. TENANT'S INSURANCE.............................................. 25
15. WAIVER OF SUBROGATION........................................... 26
16. EMINENT DOMAIN.................................................. 26
17. BANKRUPTCY...................................................... 27
18. DEFAULT AND REMEDIES............................................ 27
19. SUBORDINATION, QUIET ENJOYMENT.................................. 30
20. ESTOPPEL CERTIFICATES........................................... 30
21. ATTORNEYS' FEES................................................. 31
22. LATE CHARGES.................................................... 31
23. NOTICES......................................................... 31
24. HOLDING OVER.................................................... 32
25. ALTERATIONS..................................................... 32
26. RENT TAX........................................................ 33
27. PRIOR AGREEMENT, AMENDMENTS..................................... 33
28. PERSONAL PROPERTY TAXES......................................... 34
29. SUCCESSORS...................................................... 34
30. RIGHT TO PERFORM................................................ 34
31. FORCE MAJEURE................................................... 34
32. LIMITATION ON LIABILITY......................................... 34
33. MODIFICATION BY LENDER..........................................
34. MISCELLANEOUS................................................... 35
35. HAZARDOUS MATERIALS............................................. 38
36. RIDERS.......................................................... 39
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Mercata, Inc.
One Newport
________________________________________________________________________________
Office Building Lease
________________________________________________________________________________
THIS LEASE IS MADE ON February 17, 2000, by and between Bentall Newport
Centre L.L.C., a Washington limited liability company, hereinafter called
"Landlord", and Mercata, Inc., a Delaware corporation, hereinafter called
"Tenant".
________________________________________________________________________________________________________________________
1. BASIC LEASE TERMS
________________________________________________________________________________________________________________________
(a) Premises:
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Building Name: One Newport
Building Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Floors Second (2nd) Floor and Third (3rd) Floor
Suite(s): Suites ▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇) and ▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇)
Premises Area: (Subject to subsection 2(a) below)
Rentable Square Feet on Second Floor: Approximately 23,509
Useable Square Feet on Second Floor: Approximately 20,653
Rentable Square Feet on Third Floor: Approximately 22,180
Useable Square Feet on Third Floor: Approximately 19,615
Building Area: 90,133 Rentable Square Feet
Newport Corporate Center Area: 675,370 Rentable Square Feet
Tenant's Percentage of the Building upon 24.61% (Subject to Section 2(a) below).
occupancy of Third Floor only:
Tenant's Percentage of the Building upon 50.69% (Subject to Section 2(a) below).
occupancy of both the Second Floor and the
Third Floor:
Tenant's Percentage of Newport Corporate 3.28% (Subject to Section 2(a) below).
Center upon occupancy of the Third Floor
only:
Tenant's Percentage of Newport Corporate 6.77% (Subject to Section 2(a) below).
Center upon occupancy of both the Second
Floor and Third Floor:
(b) Term of the Lease: Subject to Section 3,
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the term of this Lease shall be for the period from the "Commencement Date" as
defined in Section 3(a) through the end of the
sixtieth (60th) full month after the "Second Floor
Commencement Date" as defined in Section 3(a) below.
Estimated Third Floor Availability Date: April 8, 2000.
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Estimated Second Floor Availability Date: January 1, 2001.
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(c) Basic Rent (Subject to Section 5 below):
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Lease Basic Rent Per Rentable Basic Rent per Month Basic Rent per Month for the
Months Square Foot (Annual) for the Third Floor Second and Third Floors
only
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1 - 12 $22.00, NNN $40,663.33 $83,763.17
13 - 24 $22.50, NNN $41,587.50 $85,666.87
25 - 36 $23.00, NNN $42,511.67 $87,570.58
37 - 48 $23.50, NNN $43,435.83 $89,474.29
49 - 72 $24.00, NNN $44,360.00 $91,378.00
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**If the initial Term extends beyond 72 months from the Commencement Date for
any reason (other than Tenant's exercise of an option to renew and extend), the
Basic Rent per Rentable Square Foot per year for months 73 through the
expiration of the initial Term shall be $24.50, NNN.
(d) Security Deposit: Initially, a $1,000,000.00 Letter of Credit (as
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defined in Section 7 below), subject to
adjustment as set forth in Section 7 below.
(e) Tenant's Use of the Premises: General office, software development and other
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lawful uses consistent with Tenant's business.
(f) Leasing Broker(s)/Agent(s):
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Landlord's Leasing Broker/Agent: ▇▇▇▇ ▇. ▇▇▇▇, Bentall U.S. L.L.C.
Tenant's Leasing Broker/Agent: ▇▇▇▇▇▇▇▇▇ Group, Inc.
(g) Parking: Pursuant to the terms of subsection 34(n): Four (4) Parking stalls per 1,000 Usable Square
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Feet of leased Premises, as such Premises may be
expanded as provided in this Lease. Tenant shall
pay for parking on a monthly basis regardless of
whether or not Tenant uses such parking as
Additional Rent at the rates set forth below:
During the initial twenty-four (24) months of the
Term, parking shall be $55.00 per stall. Thereafter,
parking rates shall be based on the market rates for
covered parking stalls along the I-90 corridor as
reasonably determined by Landlord.
(h) Addresses for Notices:
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i) Landlord: ▇/▇ ▇▇▇▇▇▇▇ ▇.▇. ▇.▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, COO,
and ▇▇▇▇ ▇. ▇▇▇▇, Director of Leasing
ii) Tenant (prior to Commencement Date): Mercata, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Legal Department
iii) Tenant (after Commencement Date): Mercata, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attn: Legal Department
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Stoel Rives LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
This Section 1 represents a summary of the basic terms of this Lease. In
the event of any inconsistency between the terms contained in Section 1 and any
specific clause of this Lease, the terms of the more specific clause shall
prevail.
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2. PREMISES
________________________________________________________________________________
(a) Premises. Landlord hereby leases to Tenant and Tenant leases from
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Landlord those certain premises described in subsection 1(a) and in Exhibit "A"
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attached hereto (the "Premises"); provided, that prior to the Second Floor
Commencement Date (defined below), the Premises shall include only the area
depicted on Exhibit "A" on the third floor of the Building (the "Third Floor").
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Immediately upon the Second Floor Commencement Date, and without any further
action of the parties, the Premises shall be automatically expanded to include
the area depicted on Exhibit "A" on the second floor of the Building (the
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"Second Floor"). The exact amount of Rentable Square Feet and Useable Square
Feet in the Third Floor shall be determined upon the completion of the build-out
of the Tenant Improvements in and to the Third Floor pursuant to the Work Letter
Agreement attached hereto. The exact amount of Rentable Square Feet and Useable
Square Feet in the Second Floor shall be determined upon completion of the
build-out of the Tenant Improvements in and to the Second Floor pursuant to the
Work Letter Agreement attached hereto. All exact square footages of space in the
Premises, the Building, the Newport Corporate Center, or any portion thereof
shall be determined reasonably by Landlord's architect and verified by Tenant's
architect. Any dispute regarding any such determination shall be resolved in
accordance with Section 18(j). Until such determination of the exact number of
Rentable Square Feet and Useable Square Feet of space in the Premises, the
Building and the Newport Corporate Center as set forth above, the number of
Rentable Square Feet and Useable Square Feet of space shown in subsection 1(a)
shall control. Upon final determination of the number of Rentable Square Feet
and Useable Square Feet of space in the Second Floor or Third Floor, as the case
may be, the Building or the Newport Corporate Center, Landlord and Tenant shall,
within ten (10) days of Landlord's written request, execute a written
confirmation of Rentable Square Feet and Useable Square Feet in such floor
generally in the form attached hereto as "Exhibit D". The "Rentable Square
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Feet" and "Useable Square Feet" as used in this Lease shall be calculated
according to the Building Owner's and Manager's Association ("1996 BOMA")
standard, the "Standard Method for Measuring Floor Area in Office Buildings -
American National Standard," ANSI Z65.1-1996. The Premises are contained within
the building (the "Building") which is located at the address designated in
subsection 1(a). The Building is located on the real property (the "Land")
described on Exhibit "B" attached hereto. The term "Newport Corporate Center"
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shall mean the properties and buildings located thereon commonly known as One
Newport, Two Newport, Newport Tower, Newport Heights, Newport Terrace and Four
Newport described on Exhibit "B-1" attached hereto, together with such other
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additional properties and/or buildings in the immediately adjacent area which
Landlord may add in the future, all of which Landlord may rename from time to
time. Tenant now consents to the addition of Five Newport to the Newport
Corporate Center at such time as Landlord so elects, provided it shall have been
completed. "Tenant's Percentage of the Building" shall equal a fraction whose
numerator is the number of Rentable Square Feet within the Premises as set forth
in subsection 1(a) and whose denominator is the number of Rentable Square Feet
within the Building as set forth in subsection 1(a). "Tenant's Percentage of
Newport Corporate Center" shall equal a fraction whose numerator is the number
of Rentable Square Feet within the Premises as set forth in subsection 1(a) and
whose denominator is the number of Rentable Square Feet within Newport Corporate
Center as set forth in subsection 1(a). If the number of Rentable Square Feet
within the Premises, the Building or the Newport Corporate Center is adjusted,
including without limitation pursuant to the automatic expansion of the Premises
to include the Second Floor of the Building as provided in this subparagraph
1(a), then Tenant's Percentage of the Building and Tenant's Percentage of the
Newport Corporate Center shall be automatically adjusted without further action
of either party. Upon the written request of either party, both parties shall
execute a written confirmation of such percentages generally in the form
attached hereto as "Exhibit D".
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(b) Acceptance of Premises. All prior representations of Landlord and its
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agents with respect to the Premises or the Building are superceded by those
expressly set forth herein. No rights, easements, or licenses are acquired by
Tenant by implication or otherwise except as expressly set forth in the
provisions of this Lease. Tenant accepts the Premises "as is", subject to
Landlord's obligations under Exhibit "C", including without limitation
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Landlord's obligation to construct any Tenant Improvements described in Exhibit
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"C", and subject further to any latent defects in the Premises or Building which
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are not reasonably ascertainable by a visual inspection of Tenant. In addition,
Landlord shall deliver the Premises to Tenant with all cabling of prior tenants
removed (unless otherwise requested by Tenant). The taking of possession of the
Premises by Tenant shall be conclusive evidence that the Premises and the
Building were in good condition and suitable for Tenant's intended use at the
time possession was taken, except for any latent defects in the Premises or
Building not reasonably ascertainable by a visual inspection of Tenant,
provided, however, Tenant agrees to provide Landlord notice promptly following
Tenant's discovery of any latent defects.
(c) Common Areas. Tenant shall have the nonexclusive right to use in
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common with other tenants in the Building and in connection with Tenant's
business at the Premises the following areas ("Common Areas") appurtenant to the
Premises:
i) The Building's common entrances, lobbies, restrooms, elevators,
stairways and accessways, loading docks, ramps, drives and platforms and any
passageways and serviceways thereto, and the common pipes, conduits (excluding
Landlord's fiber optic conduit), wires and appurtenant equipment serving the
Premises;
ii) Loading and unloading areas, trash areas, parking areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas and
similar areas and facilities appurtenant to the Building;
iii) The Building's common facilities made available for or for the
benefit of all tenants within Newport Corporate Center including, without
limitation, landscaping, roadways, pedestrian walkways and parking areas;
iv) Other areas within Newport Corporate Center that are not
intended for lease and which are designated (which designation may be changed
from time to time) by Landlord as Common Areas set aside for the common and
joint use and benefit of the occupants of Newport Corporate Center.
Landlord reserves the right from time to time without cost to Tenant
(except as allowed under the terms of this Lease) and unreasonable interference
with Tenant's use and, if Tenant's use of the Premises or Common Areas will be
interfered with, then upon reasonable prior written notice to Tenant
v) To install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the Building above the ceiling surfaces, below the floor surfaces, within the
walls and in the central core areas, and to relocate any pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises which are
located in the Premises or located elsewhere outside the Premises, and to expand
the Building;
vi) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces (as long as the parking ratio for Tenant stated in
Section 1(g) is maintained unless a reduction on Landlord's overall parking
ratio for the Building is required by law), parking areas, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas and walkways;
vii) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available and
maintenance is started promptly and diligently pursued to completion, provided
that Tenant shall notify Landlord if Tenant believes such maintenance is not
being diligently pursued to completion;
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viii) To designate other land outside but adjacent to the boundaries
of the Building or Land to be a part of the Common Areas;
ix) To add additional buildings and improvements to the Common
Areas;
x) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Building, or any portion thereof so
long as reasonable access to the Premises remains available;
xi) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas or the Building as Landlord may, in
the exercise of sound business judgment, deem to be appropriate; and
xii) To establish, modify or change reasonable rules governing the
move-in and move-out procedures of Tenant's furniture, equipment, and fixtures.
(d) Exclusive Option to Expand. Subject to the terms of this subsection
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2(d) and to the existing rights of the current tenant, Tenant shall have the
exclusive right to lease the approximately 23,529 rentable and 21,485 usable
square feet of space located on the first (1st) floor of the Building in the
location identified on Exhibit "A-1" attached hereto (the "Expansion Space").
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Landlord shall notify Tenant in writing ("Landlord's Notice") of the estimated
date on which the Expansion Space will be available and delivered to Tenant for
installing Tenant's tenant improvements (the "Expansion Space Availability
Date"), which Landlord's Notice shall be provided to Tenant at least five (5)
months but not more than seven (7) months prior to the Expansion Space
Availability Date (unless Landlord and Tenant agree, in writing, to a different
notice period prior to the date Landlord's Notice is due). Tenant shall have
twenty (20) business days from receipt of Landlord's Notice to notify Landlord
that Tenant elects to lease the Expansion Space. If Tenant fails to notify
Landlord within such twenty (20) business day period that Tenant elects to lease
the Expansion Space, Tenant's rights hereunder to lease the Expansion Space
shall expire and Landlord shall be entitled to lease the Expansion Space to any
third party or third parties. If Tenant notifies Landlord of Tenant's election
to lease the Expansion Space within such twenty (20) business day period, the
Expansion Space shall become part of the Premises and Tenant shall commence
paying Rent for such Expansion Space on the date which is the earlier of (1)
forty-five (45) days after Landlord actually tenders possession thereof to
Tenant for purposes of installing Tenant's tenant improvements, or (2) the date
Tenant opens for business in any part of the Expansion Space (the earlier of
which is hereafter referred to as the "Expansion Space Commencement Date").
Landlord estimates that the Expansion Space will be available for Lease to
Tenant sometime between November, 2000, and February, 2001. Except as otherwise
provided in this Section 2(d), if Landlord is unable to deliver possession of
the Expansion Space as provided herein for any reason, Landlord shall not be
subject to any liability for the failure to deliver possession but in such event
Tenant shall not be liable for any Rent related to the Expansion Space until
Landlord tenders possession of the Expansion Space to Tenant. No such failure
to deliver possession as provided herein shall in any other respect affect the
validity of this Lease or the obligation of Tenant hereunder; provided, however,
subject to delays caused by an event of force majeure (as defined in Section 31
and specifically including, without limitation, delays in Landlord's completion
of the Five Newport Building for reasons beyond the control of Landlord) or
delays caused by construction related changes requested by a tenant of the Five
Newport Building, if the Expansion Space is not available to Tenant to commence
construction of the Tenant Improvements on the date which is the earlier of (1)
within sixty (60) days after the Expansion Space Availability Date set forth in
Landlord's Notice, or (2) May 1, 2001 (regardless of whether or when Landlord's
Notice was given), and at such time Tenant does not sublease space from
Attachmate in the Four Newport Building, then per diem liquidated damages
payable by Landlord shall accrue in favor of Tenant in the amount of one day of
free Basic Rent with respect to the Expansion Space for each day which damages
shall continue until the actual Expansion Space Availability Date.
Notwithstanding anything in this Lease to the contrary, the parties agree that
the actual damages that Tenant would suffer as a consequence of a delay in the
delivery of the Expansion Space beyond the earlier of such dates are too
difficult to quantify. Tenant shall have the right to offset any such accrued
liquidated damages against Basic Rent first due under this Lease with respect to
the Expansion Space. The Expansion Space Availability Date shall not be deemed
to have occurred until Tenant is actually given unencumbered access to the
Expansion Space to construct tenant improvements, or so long as any person or
entity claims a leasehold or other possessory interest in the Expansion Space.
Basic Rent for the Expansion Space shall be equal to the then current market
rate, which shall be determined in accordance with the procedures of Section
3(b)(iii) below and shall take into
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consideration the Expansion Space Allowance (as defined below). Landlord shall
provide Tenant with a tenant improvement allowance with respect to the Expansion
Space in the amount of $12.00 per useable square foot multiplied by a fraction,
the denominator of which is sixty (60) and the numerator of which is the number
of months left in the initial Term at the time of the Expansion Space
Commencement Date (the "Expansion Space Allowance"). All tenant improvements to
the Expansion Space, as well as the disbursement of the Expansion Space
Allowance, shall be performed substantially in accordance with the Work Letter
Agreement attached hereto as Exhibit "C". Except as to any latent defects in the
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Expansion Space which are not reasonably ascertainable by a visual inspection of
Tenant and subject to Landlord's obligations under Exhibit "C", Tenant shall
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accept the Expansion Space in its "as is" condition as of the actual Expansion
Space Availability Date; provided, however, Tenant shall notify Landlord
promptly upon Tenant's discovery of any latent defects in the Expansion Space.
Beginning on the date Tenant notifies Landlord of its election to lease the
Expansion Space, Landlord and Tenant shall promptly and diligently work to amend
and supplement Exhibit "C" so as to conform it to include the Expansion Space
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and the necessary obligations and deadlines to be imposed on each party for
preparing the space plan, work schedule, construction documents and other steps
necessary to construct the Expansion Space to meet Tenant's requirements. The
parties agree to use the structure and process set forth in Exhibit "C" for
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construction of the tenant improvements in the Expansion Space. The Expansion
Space shall be measured, and any disputes regarding such measurement shall be
resolved, as provided in Section 2(a) regarding the Third and Second Floors.
Notwithstanding anything contained above to the contrary, Tenant shall not be
entitled to exercise its option to lease the Expansion Space if, at the time of
such exercise, Tenant is in default under this Lease beyond any applicable cure
period. In addition, Tenant's exercise of its option with respect to the
Expansion Space shall, at Landlord's election, be void if Tenant is in default
under this Lease beyond any applicable cure period at any time after the date
Tenant exercises its option and prior to the commencement of Tenant's lease of
the Expansion Space. Within fifteen (15) days after Tenant notifies Landlord of
Tenant's election to lease the Expansion Space, Landlord and Tenant shall enter
into an amendment to this Lease adding the Expansion Space to the Premises upon
all terms and conditions of this Lease, which amendment shall include the
amended and supplemented Exhibit C. Except with respect to assignments of this
Lease to a Permitted Assignee (as defined in Section 10), this option to expand
is personal to Tenant and may not be exercised or be assigned, voluntarily or
involuntarily, by or to any person or entity other than Tenant and shall
automatically terminate upon the assignment or other transfer of Tenant's
interest in this Lease.
(e) Right of First Offer. Subject to the existing rights of existing
tenants in the Building or Newport Corporate Center, and provided that Tenant is
not in default under the terms and conditions of this Lease beyond any
applicable cure period at the time Tenant accepts the terms of a First Offer
Notice (defined below), Tenant shall have, during the initial Term, a one time
right of first offer to lease all space (other than the Premises) located in the
Building (the "First Offer Space"). Except as set forth in the following
sentence, at least sixty (60) days, but not more than one hundred twenty (120)
days, prior to offering any First Offer Space for lease in the market, Landlord
will provide Tenant with written notice (the "First Offer Notice") of the intent
to offer the First Offer Space for lease in the market, and shall offer to lease
the First Offer Space to Tenant on terms specified by Landlord in such First
Offer Notice, which terms Landlord shall represent are the then market terms for
a lease of the First Offer Space. Notwithstanding the preceding sentence to the
contrary, Landlord shall not be required to give Tenant the First Offer Notice
at least sixty (60) days prior to offering any First Offer Space for lease in
the market (but Tenant shall still have five business days to respond to such
notice as described below) and Landlord may give Tenant such notice immediately
prior to offering the space for lease in the market if the First Offer Space
covered by such notice comes available for lease through a means other than the
natural expiration of an existing lease term. The First Offer Notice shall
specify: (i) the location and rentable area of the space which Landlord intends
to lease; (ii) the date upon which Landlord estimates such space shall be
available for occupancy; (iii) the annual rate of base rent per square foot of
rentable area which Landlord intends to charge for such space, including all
fixed and/or indexed adjustments to said rate; (iv) and all other economic terms
which Landlord intends to offer with respect to such space. Such notice may
include terms that Landlord believes are market for various lease terms (e.g.,
the market terms for a three-year lease, a five-year lease, or a ten-year lease)
and may include terms that Landlord believes are market for various sized
premises (e.g. the market terms for a partial floor tenant or a full floor
tenant). Tenant will then have five (5) business days from the date of the
First Offer Notice to express in writing an interest in leasing such space on
the terms offered and an additional twenty (20) days (after the expiration of
such initial five (5) day period) to complete a mutually acceptable amendment to
this Lease adding to the Premises the space which is the subject of the First
Offer Notice under the terms and conditions specified in the First Offer Notice.
If Tenant elects not to accept the
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terms offered by Landlord, or if a mutually acceptable lease amendment is not
executed within the time limits set forth above, then Landlord may lease the
First Offer Space to another party or parties at final terms that are within
ninety-five percent (95%) of what Landlord offered to Tenant. Should Landlord
not complete a lease with another party within six (6) months after Tenant
rejects Landlord's offers, then Tenant's Right of First Offer will be renewed.
If Tenant leases the First Offer Space described in the First Offer Notice, then
Landlord shall tender such First Offer Space, as provided above, to Tenant in
its then "as is" condition (and otherwise in accordance with the terms of the
First Offer Notice), except for any latent defects not reasonably ascertainable
from a visual inspection by Tenant; provided, however, Tenant shall promptly
notify Landlord upon Tenant's discovery of any such latent defects. This Right
of First Offer is personal to Tenant and may not be exercised or be assigned,
voluntarily or involuntarily, by or to any person or entity other than Tenant or
any Permitted Assignee (as defined in Section 10) and shall automatically
terminate upon the assignment or other transfer of Tenant's interest in this
Lease.
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3. TERM
________________________________________________________________________________
(a) Term. The term of this Lease shall be for the period designated in
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Section 1 above (the "Term") unless the Term shall be sooner terminated as
hereinafter provided. The term "Term" shall include any exercised "Renewal
Term" (defined below). The Term as well as the Tenant's obligation to pay Rent
(as defined in Section 5 below) with respect to the Premises (but excluding the
Second Floor) shall commence upon the date (the "Commencement Date") which is
the earlier of:
i) Substantial Completion (as defined in Exhibit "C") of the Tenant
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Improvements described in the Work Letter Agreement for the portion of the
Premises located on the Third Floor, or
ii) The date that Tenant opened for business in any portion of the
Premises located on the Third Floor, or
iii) Forty-five (45) days after the tender of possession of the
portion of the Premises located on the Third Floor to Tenant for the purposes of
commencing work on said Tenant Improvements (such date of tender of possession
being referred to as the "Third Floor Availability Date").
In the event the Commencement Date does not occur on the first day of the month,
Tenant shall pay Rent for the fractional month on a per diem basis (calculated
on the basis of a thirty-day month) until the first day of the following month.
The Term, as well as Tenant's obligation to pay Rent (as defined in Section 5
below) with respect to the Second Floor, shall commence upon the date (the
"Second Floor Commencement Date") which is the earlier of:
iv) Substantial Completion (as defined in Exhibit "C") of the Tenant
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Improvements described in the Work Letter Agreement for the Second Floor, or
v) The date that Tenant opened for business in any portion of the
Second Floor, or
vi) Forty-five (45) days after the tender of possession of the Second
Floor to Tenant for the purpose of commencing work on said Tenant Improvements
(such date of tender of possession being referred to as the "Second Floor
Availability Date").
Except as provided below in Section 3(b), the Term shall terminate at midnight
on the last day of the sixtieth (60th) full month after the Second Floor
Commencement Date. In the event the Second Floor Commencement Date does not
occur on the first day of the month, Tenant shall pay Rent for the Second Floor
for the fractional month on a per diem basis (calculated on the basis of a
thirty-day month) until the first day of the following month. Upon the
Commencement Date and the Second Floor Commencement Date, the parties shall
execute a written letter agreement setting forth the precise commencement and
termination dates of this Lease as of the execution date of said written letter
agreement. Said letter agreement shall be generally in the form attached hereto
as Exhibit "D". Failure to execute such letter agreement, however, shall not
-----------
affect Tenant's liability hereunder.
7
(b) Option to Extend.
----------------
i) Landlord hereby grants Tenant the right and option to renew and
extend the Term of this Lease for two (2) consecutive periods of five (5) years
each (such renewal and extension periods are hereinafter referred to as a
"Renewal Term" or as the "First Renewal Term" and "Second Renewal Term", as
applicable) on the same terms and conditions contained in the Lease, except that
a) Basic Rent for each Renewal Term shall be as set forth
hereinbelow,
b) Except as expressly provided in this Section 3, Tenant shall
not be entitled to any lease concessions with respect to a Renewal Term
including, without limitation, commissions or allowances, free parking rights,
or storage space, and
c) No additional options to renew and extend shall apply
following the expiration of the Second Renewal Term.
Written notice (the "Tenant's Election") of Tenant's exercise of its option to
renew and extend ("Option to Renew") the Term of this Lease for a Renewal Term
must be given to Landlord no less than ten (10) months prior to the date the
then current Term of the Lease would otherwise expire. The Tenant's Election
shall be binding upon Tenant and shall set forth the name of the Landlord and
Tenant, the Lease date, and the Renewal Term dates.
ii) Notwithstanding anything to the contrary set forth in this
Section, at Landlord's option, Tenant shall not have the right to exercise an
Option to Renew:
a) During the time commencing from the date Landlord gives to
Tenant a written notice that Tenant is in default under any provisions of this
Lease, and continuing until the default alleged in said notice is cured; or
b) Under any of the following circumstances:
(1) If Tenant leases between three (3) to four (4) floors in
the Building at the time Tenant exercises its Option to Renew, Tenant does not
occupy at least two (2) of such floors or has entered into subleases for in
excess of 44,000 rentable square feet; or
(2) If Tenant leases less than three (3) floors but more than
one (1) floor in the Building at the time Tenant exercises its Option to Renew,
Tenant does not occupy at least one (1) of such floors or has entered into
subleases for in excess of 22,000 rentable square feet; or
(3) If Tenant leases one (1) floor in the Building or less,
Tenant shall not have the right to exercise a second Option to Renew.
The period of time within which an Option to Renew may be exercised
shall not be extended or enlarged by reason of Tenant's inability to exercise an
Option to Renew because of the foregoing provisions and/or restrictions. At
Landlord's election, all rights of Tenant under the provisions of this Option
shall terminate and be of no further force or effect even after Tenant's due and
timely exercise of the Option, if after such exercise, but prior to the
commencement date of the new term,
c) Tenant fails to pay to Landlord a monetary obligation of
Tenant for a period of thirty (30) days after Tenant's receipt of written notice
from Landlord that such obligation is past due; or
d) Tenant fails to commence to cure a default within thirty (30)
days after the date Landlord, during the term of this Lease, gives written
notice to Tenant of such default.
8
Notwithstanding the above to the contrary, at Landlord's option, (1)
Tenant shall not be entitled to exercise an Option to Renew with respect to any
portion of the Premises in excess of 5,000 rentable square feet which is either
not occupied by Tenant or which is sublet to a third party on the date Tenant
otherwise attempts to exercise its Option to Renew, and (2) Tenant shall not
have the right to lease any portion of the Premises in excess of 5,000 square
feet with respect to which Tenant has already exercised an Option to Renew for a
Renewal Term if Tenant does not occupy such space on the Renewal Term
commencement date or has sublet such space to any third party on the Renewal
Term commencement date.
(iii) In the event Tenant validly exercises an Option to Renew the
Term of this Lease as herein provided, Basic Rent shall be adjusted as of the
commencement date of the applicable Renewal Term as follows:
a) Commencing within ten (10) days after Landlord's receipt of
Tenant's Election, Landlord and Tenant shall attempt to agree upon Basic Rent
for the Premises for the applicable Renewal Term, such Basic Rent to equal the
estimated fair market rental value of the Premises for the applicable Renewal
Term. If the parties are unable to agree upon the Basic Rent within thirty (30)
days after Landlord's receipt of Tenant's Election, then within thirty (30) days
thereafter each party, at its own cost and by giving written notice to the other
party, shall appoint a real estate appraiser with at least five (5) years full-
time commercial real estate appraisal experience in the area in which the
Premises are located to appraise and set Basic Rent for the applicable Renewal
Term. If a party does not appoint an appraiser within ten (10) days after the
other party has given written notice of the name of its appraiser, the single
appraiser appointed shall be the sole appraiser and shall set Basic Rent for the
applicable Renewal Term. If each party shall have so appointed an appraiser,
the two appraisers shall meet promptly and attempt to set the Basic Rent for the
applicable Renewal Term. If the two appraisers are unable to agree within
thirty (30) days after the second appraiser has been appointed, they shall
attempt to select a third appraiser meeting the qualifications herein stated
within ten (10) days after the last day the two appraisers are given to set
Basic Rent. If the two appraisers are unable to agree on the third appraiser
within such ten (10) day period, either of the parties to this Lease, by giving
five (5) days written notice to the other party, may apply to the then presiding
judge of the Superior Court of King County for the selection of a third
appraiser meeting the qualifications stated in this paragraph. Each of the
parties shall bear one-half (1/2) of the cost of appointing the third appraiser
and of paying the third appraiser's fee. The third appraiser, however selected,
shall be a person who has not previously acted in any capacity for either party.
b) Within thirty (30) days after the selection of the third
appraiser, a majority of the appraisers shall set Basic Rent for the applicable
Renewal Term. If a majority of the appraisers are unable to agree upon the
Basic Rent within the stipulated period of time, the three appraisals shall be
added together and their total divided by three (3). The resulting quotient
shall be the Basic Rent for the Premises during the applicable Renewal Term.
If, however, the low appraisal and/or the high appraisal is/are more than five
percent (5%) lower and/or higher than the middle appraisal, the low appraisal
and/or the high appraisal shall be disregarded. If only one (1) appraisal is
disregarded, the remaining two (2) appraisals shall be added together and their
total divided by two (2), and the resulting quotient shall be Basic Rent for the
Premises during the applicable Renewal Term.
c) For purposes of determining the Basic Rent for a Renewal
Term, including the determination of Basic Rent by the appraisers, the "fair
market rental value" shall be based on the actual rental rates which ready and
willing tenants (including renewal tenants) are paying or would pay, as of the
applicable Renewal Term commencement date, as annual rent for a primary premises
(as distinguished from the rent payable for a sublet premises or with respect to
an assignment of an interest in an existing lease) to a ready and willing
landlord of such primary premises for space comparable to the amount then leased
by Tenant and comparable to the Premises, Building and Newport Corporate Center
in terms of quality, design, and location on the I-90 corridor; provided,
however, the "fair market rental value" shall not be increased as a result of
any special improvements Tenant has made at its expense and shall be determined
as if the Premises were improved with Landlord's Building standard tenant
improvements. Determination of fair market rental value will take into
consideration all relevant factors including, without limitation, any
concessions or inducements (e.g., rent abatement, tenant improvement and other
allowances) then being offered by landlords to prospective tenants, or then
being offered by tenants to landlords, for comparable space. Rental rates quoted
or used under sublease agreements shall be considered rates of special
circumstances and shall be excluded from the definition of "fair market rental
value" under this Section 3.
9
d) If Landlord and Tenant are unable to agree upon the Basic Rent
for the Renewal Term prior to the commencement of such Renewal Term, Tenant
will, during such Renewal Term, pay Basic Rent at a rate equivalent to the Basic
Rent in effect immediately prior to the Renewal Term in question until the
parties agree upon the new Basic Rent, or until the Basic Rent is determined
pursuant to this Subsection. The amount of the new Basic Rent for the applicable
Renewal Term will be applied retroactively to the beginning of such Renewal
Term, and any rent adjustment will be made in connection with the next
installment of Basic Rent due, following the determination of Basic Rent
pursuant to this Subsection.
(iv) The Option to Renew is granted for Tenant's or any Permitted
Assignee's personal benefit and may not be assigned or transferred by Tenant or
a Permitted Assignee, either voluntarily or by operation of law, in any manner
whatsoever, except to a Permitted Assignee.
(v) In the event Tenant timely and properly exercises an Option to
Renew, Landlord and Tenant shall within fifteen (15) days after the
determination of rent for the Renewal Term, execute an amendment to this Lease
extending the Lease Term on the terms and conditions set forth in this Section 3
and otherwise upon all terms and conditions of this Lease.
________________________________________________________________________________
4. DELIVERY OF PREMISES; DELAY IN POSSESSION
________________________________________________________________________________
(a) Third Floor. Landlord shall tender possession of the Third Floor to
-----------
Tenant for the purposes of commencing work on the Tenant Improvements related to
the Third Floor on the Third Floor Availability Date, which is estimated to be
on or after April 10, 2000, and Tenant shall not be obligated to accept
possession of the Third Floor prior to April 10, 2000. The Third Floor
Availability Date shall not be deemed to have occurred until Tenant is actually
given unencumbered access to the Third Floor to construct tenant improvements
(regardless of whether or not Tenant has a tenant improvement permit). Except
as otherwise provided in this Section 4(a), if Landlord is unable to deliver
possession of the Third Floor as provided herein for any reason, Landlord shall
not be subject to any liability for the failure to deliver possession but in
such event Tenant shall not be liable for any Rent until Landlord tenders
possession of the Third Floor to Tenant and the provisions of Section 3(a)
relating to the Third Floor have been satisfied. No such failure to deliver
possession as provided herein shall in any other respect affect the validity of
this Lease or the obligation of Tenant hereunder; provided, however, subject to
delays caused by an event of force majeure (as described in Section 31) if the
Third Floor is not available to Tenant to commence construction of the Tenant
Improvements by July 15, 2000, Tenant shall thereafter have the right to
terminate this Lease by giving Landlord written notice of such termination on or
before July 24, 2000. If Tenant elects to terminate this Lease, all Rent,
deposits and any other sums paid to Landlord by Tenant shall be refunded and
paid to Tenant within five (5) days of such termination. Tenant shall have
access to the Third Floor at least two (2) weeks prior to Landlord's estimated
date of Substantial Completion of the Tenant Improvements on the Third Floor for
the purpose of installing Tenant's furniture, fixtures and equipment.
(b) Second Floor. Landlord shall tender possession of the Second Floor to
------------
Tenant for the purposes of commencing work on the Tenant Improvements related to
the Second Floor on the Second Floor Availability Date, which shall be no sooner
than October 31, 2000 (unless otherwise agreed by Landlord and Tenant). The
Second Floor Availability Date shall not be deemed to have occurred until Tenant
is actually given unencumbered access to the Second Floor to construct tenant
improvements (regardless of whether or not Tenant has a tenant improvement
permit). Landlord shall use its best reasonable efforts provide Tenant with
five (5) months' prior written notice of the actual Second Floor Availability
Date, which Landlord currently estimates will be January 1, 2001. Landlord
shall also provide Tenant with written notice of any change in the estimated
Second Floor Availability Date set forth in Section 1(b). Except as otherwise
provided in this Section 4(b), if Landlord is unable to deliver possession of
the Second Floor as provided herein for any reason, Landlord shall not be
subject to any liability for the failure to deliver possession but in such event
Tenant shall not be liable for any Rent related to the Second Floor until
Landlord tenders possession of the Second Floor to Tenant and the provisions of
Section 3(a) relating to the Second Floor have been satisfied. No such failure
to deliver possession as provided herein shall in any other respect affect the
validity of this Lease or the obligation of Tenant hereunder; provided, however,
subject to delays caused by an event of force majeure (as defined in Section 31
and specifically including, without limitation, delays in Landlord's completion
of the Five Newport
10
Building for reasons beyond the control of Landlord) or delays caused by
construction related changes requested by a tenant of the Five Newport Building,
if the Second Floor is not available to Tenant to commence construction of the
Tenant Improvements by May 1, 2001, and at such time Tenant actually occupies
all of the Third Floor and all of the space Tenant subleases (if any) from
Attachmate in the Four Newport Building, then per diem liquidated damages
payable by Landlord shall accrue in favor of Tenant in the amount of one day of
free Basic Rent with respect to the Second Floor for each day which damages
shall continue until the actual Second Floor Availability Date. Notwithstanding
anything in this Lease to the contrary, the parties agree that the actual
damages that Tenant would suffer as a consequence of a delay in the delivery of
the Second Floor beyond May 1, 2001, are too difficult to quantify. Tenant shall
have the right to offset any such accrued liquidated damages against Basic Rent
first due under this Lease. Landlord's failure to provide the five (5) month's
prior written notice required under this Section 4(b) shall in no way alter,
modify or diminish the liquidated damage provisions of this Section 4(b). Tenant
shall have access to the Second Floor at least two (2) weeks prior to Landlord's
estimated date of Substantial Completion of the Tenant Improvements on the
Second Floor for the purpose of installing Tenant's furniture, fixtures and
equipment.
________________________________________________________________________________
5. RENT
________________________________________________________________________________
(a) Monthly Basic Rent. Tenant shall pay to Landlord as Basic Rent for the
------------------
Premises the sum set forth in subsection 1(c) (as may be adjusted through the
execution of Exhibit D), as applicable, which shall be payable in equal monthly
---------
installments. The first installment (equal to the first month's Basic Rent)
shall be payable upon the execution of this Lease and the remaining installments
shall be paid, in advance, on the first day of each and every calendar month
during the Term. Rent for any partial month shall be prorated based on the
actual number of days in such month.
(b) Definition of Rent. All amounts due from Tenant to Landlord under this
------------------
Lease other than Basic Rent shall be due as "Additional Rent". The terms "Rent"
and "Rental" as used in this Lease shall mean all amounts to be paid hereunder
by Tenant whether those sums are designated as Basic Rent or Additional Rent or
otherwise and as adjusted by the terms of this Lease. Failure by Tenant to pay
any sum of Rent due under this Lease shall entitle Landlord to pursue any or all
remedies specified in this Lease as well as remedies specified in RCW Chapter
59.12 or otherwise allowed by law.
(c) Payment of Rent - No Deduction or Offset. Tenant shall pay Rent to
-----------------------------------------
Landlord, at the address of Landlord set forth in Section 1, without demand and
without deduction, setoff or counterclaim, except as otherwise provided in this
Lease. If Landlord shall at any time or times accept Rent after it shall become
due and payable, such acceptance shall not excuse delay upon subsequent
occasions, or constitute, or be construed as a waiver of any or all of
Landlord's rights hereunder. In addition to any late charges which may be
incurred under Section 22, Tenant shall pay interest at the rate of twelve
percent (12%) per annum compounded on all late payments of Rent thirty (30) or
more days past due.
________________________________________________________________________________
6. OPERATING COSTS
________________________________________________________________________________
(a) Acknowledged Net Terms. Tenant acknowledges that this Lease is, in all
-----------------------
respects, considered to be a net Lease and it is the intent of the parties that
Tenant and the other tenants of the Building collectively pay for all of the
Operating Costs (as defined in subsection 6(c)) relating to the Building, the
Common Areas, and the Land.
(b) Tenant Percentage. Tenant shall, for each calendar year of the Term, or
------------------
any extension thereof, pay to Landlord, as Additional Rent, Tenant's Percentage
of the Building of the Operating Costs (defined below) of the Building and Land
and Tenant's Percentage of Newport Corporate Center of the Operating Costs of
the Common Areas (as such percentages are defined in subsection 2(a) above, and
as the same may be adjusted through the execution of Exhibit D). If an
---------
Operating Cost is not attributable to one hundred percent (100%) of the
Building, then Tenant shall pay its reasonable proportionate share thereof.
Except as otherwise provided in this Lease, Tenant shall pay one hundred percent
(100%) of any Operating Costs directly allocable to Tenant's Premises.
11
(c) Operating Costs Definition. Except as otherwise provided below, the
--------------------------
Operating Costs are hereby defined as all costs related to the ownership,
administration, management, maintenance and operation of the Building, Common
Areas, and the Land, including but not limited to:
i) Real estate taxes, installments of assessments attributable to
the Lease Term, and appeals to taxes and assessments on the Land, Common Area
and Building and personal property taxes associated with personal property used
in the operation of the Land, Common Area and Building;
ii) The total annual net costs and expenses of all insurance
required to be carried by Landlord pursuant to Section 14(c)(I) and (ii),
specifically including earthquake, and with such coverage and deductibles and in
such amounts as the Landlord may from time to time determine;
iii) Special taxes, licenses (other than taxes on income or profits)
and permits and inspection fees from time to time payable by the Landlord with
respect to the Land, Premises or the Building;
iv) Salaries and wages (including employee benefits, worker's
compensation, pension plan contributions, fringe benefits, severance pay,
termination payments and similar payments and contributions) paid or payable to
all personnel, including supervisory personnel and managers, and all costs of
obtaining such personnel, to the extent that they are employed in connection
with the operation or maintenance of the Land, Building, Common Areas or the
Premises and further including the cost of building and cleaning supplies, tools
and equipment, employee uniforms, dry cleaning expenses and communication
devices related to such personnel or employees, together with the costs of
independent service contracts incurred in cleaning, maintenance and operation of
the Building and Common Areas including without limitation policing, security,
supervision, traffic control, janitorial, window cleaning, waste collection,
recycling, snow removal and gardening services, maintenance of mechanical and
electrical systems, elevators (if applicable), fire and life safety systems;
v) Lighting, electricity, public utilities, loudspeakers, public
address and musical broadcasting systems, telephone answering service facilities
and systems and information facilities and systems used in or serving the Land,
Building, Common Areas or the Premises, including the cost of any electricity,
fuel, water, telephone, steam, gas, sewage disposal, heating, ventilating, air
conditioning or other utilities and services and the cost of replacing Building
and Common Areas standard electric light fixtures, ballasts, tubes, starters,
lamps, light bulbs and controls;
vi) The cost and charges of the rental and any contract for the
rental of any equipment and signs used by the Landlord in the operation or
maintenance of the Land, Building, Common Areas or the Premises;
vii) All repairs and replacements to and maintenance and operation of
the Land, Building, Common Areas or the Premises including, without limitation,
building exteriors (including painting) signs and directories, repairing roofs,
walls and the systems, facilities and equipment serving the Land, Building,
Common Areas and the Premises, save for the cost of repairing or replacing any
inherent structural or latent defects or weaknesses;
viii) Depreciation or amortization as reasonably determined by the
Landlord in accordance with accounting principles generally accepted in the
State of Washington consistently applied of:
a) The costs and expenses, including repair and replacement,
incurred in or attributable to the repairing or replacing of all fixtures,
equipment and facilities serving or comprising the Building and Common Areas or
which are reasonably responsive to requirements imposed with respect to any
applicable health, safety, fire, nondiscrimination or similar law or regulation
unless they are, in accordance with generally accepted accounting principles,
charged fully in the year in which they are incurred and unless they result from
any governmental final, penalties or interest incurred because Landlord violated
any laws, regulations or rules of any governmental authority with jurisdiction
over the Land, Building or Common Areas; and
b) In any given period a portion of the capital cost of and
installation cost of any machinery, equipment or devices installed in, or
utilized in connection with, the Building or Common Areas for the purpose of
saving energy or effecting other savings in the Operating Costs thereafter,
whether installed in the
12
Building or Common Areas in the first instance as part of its original design,
or thereafter, which portion shall be determined by the Landlord amortizing the
cost over the reasonable expected life of same as reasonably determined by the
Landlord;
ix) Interest calculated at the average prime commercial lending
rate of the Landlord's bank (which shall be a major bank in the State of
Washington) existing at the end of each calendar month and calculated on an
annual basis upon the undepreciated or unamortized portion of the costs referred
to in (vii) above;
x) Attorney fees, accounting and systems costs and audit fees
related to the ordinary operation and maintenance of the Building;
xi) The fair market rental value (having regard to rent being
charged for similar space including Additional Rent as defined herein) of
premises used by the Landlord or its property manager, acting reasonably, in
respect of the operation, maintenance, administration or management of the Land,
Building, Common Areas or the Premises; and
xii) An administration fee or actual management fees and/or
management agent fees, together with the administrative charges of a management
company, if any, for the Building or any part of it, provided that if the
Landlord chooses to manage the Building and Common Areas, itself, the Landlord
shall be entitled to charge a management fee in an amount which would be charged
by a first-class real estate management company for management of an
office/retail complex similar to the Building and Common Areas;
Notwithstanding anything in this Lease to the contrary, Operating Costs shall
not include:
xiii) Depreciation or amortization save as expressly set out
above;
xiv) Payments of principal or interest on debt or capital
retirement of debt or on any mortgages, deeds of trust, ground leases or other
monetary encumbrances upon the Building or Land;
xv) All costs incurred in connection with the original
construction of the Building;
xvi) Debt service costs;
xvii) Except as provided in Section 26, any taxes on the income or
profits of the Landlord or any franchise taxes or other taxes on Landlord's
business;
xviii) Any real estate excise taxes arising on or from the sale or
transfer of any ownership of or interest in the Building, Land or Common Areas;
xix) Real estate taxes allocable to the leasehold improvements of
other tenants in the Building;
xx) Costs incurred by the Landlord in leasing the Building,
including without limitation commissions, legal costs, advertising costs and
tenant inducement payments;
xxi) Expenses for replacements of the structural portions of the
roof, foundation, or structure of the Building;
xxii) Except as otherwise provided in viii) above, any capital
improvements, replacements and expenditures which under accounting principles
generally accepted in the State of Washington consistently applied would be
classified as capital;
xxiii) Expenses for the repair or replacement of any equipment or
other item to the extent covered under any warranty;
13
xxiv) Cost of repair of the Building caused by fire or other
casualty or due to the exercise of the right of eminent domain (but not
excluding insurance deductibles);
xxv) Any expense for which Landlord is compensated through
proceeds of insurance (but excluding any deductible);
xxvi) Finance charges for any future capital expenditures;
xxvii) Fees, costs or expenses incurred in refinancing the
Building;
xxviii) Legal, accounting or auditing fees and expenses incurred in
connection with (A) lease negotiations with prospective tenants, (B) any default
by or dispute with a tenant, (C) any default proceedings or eviction action
against any tenant, (D) any other action or proceeding which relates only to a
particular tenant of the Building, (E) any sale, financing or attempted sale or
financing of the Building, or (F) environmental remediation at the Building,
Land or Common Areas (but not excluding routine environmental testing, such as
routine air quality tests);
xxix) Any bad debt, rent loss, or reserves for bad debts or rent
loss;
xxx) Expenses and costs (including permit, license and inspection
fees) incurred in the renovating, improving, decorating, painting, or
redecorating other tenants' space in the Building;
xxxi) Costs (including increased insurance premiums) incurred
because Landlord or another tenant violated the terms of this Lease or any other
lease for space in the Building;
xxxii) Items and services for which Tenant reimburses Landlord or
that Landlord provides selectively to one or more tenants of the Building other
than Tenant without reimbursement;
xxxiii) Costs resulting directly from the gross negligence or
willful misconduct of Landlord, its employees, agents and/or contractors, except
the extent of Landlord's insurance deductible;
xxxiv) Intentionally omitted;
xxxv) Costs or fees relating to the defense of Landlord's title to
or interest in the Building, the Land, or any part thereof;
xxxvi) Unreasonable consulting fees, market study fees or
advertising and marketing expenditures for the Building;
xxxvii) Costs incurred to test, survey, cleanup, contain, ▇▇▇▇▇,
remove, or otherwise remedy hazardous wastes or asbestos-containing materials
from the Building or Land, unless the hazardous wastes or asbestos-containing
materials were in or on the Building or Land because of Tenant's negligence or
intentional acts;
xiv) Amounts charged to interest on debt or capital retirement of
debt;
xv) Initial capital costs of constructing the Building;
xvi) Debt service costs;
xvii) Any taxes on the income or profits (other than on rents) of
the Landlord to the extent that the same are not imposed in lieu of real estate
taxes; or
14
xviii) Costs incurred by the Landlord in leasing the Building,
including commissions, legal costs, advertising costs and tenant inducement
payments; and further provided that there shall be credited against Operating
Costs all net proceeds from policies of insurance, warranties or guarantees to
the extent (but only to the extent) that such proceeds reimburse the Landlord
for costs of repair and replacement which have previously been included in the
calculation of Operating Costs.
If any facilities, services, systems or utilities:
i) For the operation, maintenance, administration, management,
repair or replacement of the Building and/or the Land are provided from another
building or buildings owned or operated by the Landlord or its agent; or
ii) For the operation, maintenance, administration, management,
repair or replacement of another building or buildings owned or operated by the
Landlord or its agent are provided from the Building and/or the Land, the costs,
charges and expenses therefor shall for the purpose of calculation of Operating
Costs be allocated by the Landlord between the Building and/or Land and the
other building or buildings on a reasonable basis.
In computing Operating Costs for any fiscal period, if less than one
hundred percent (100%) of the Rentable Square Feet of the Building is occupied
by tenants during that period, then the variable Operating Costs for such year
shall be apportioned among the tenants as if the Building had been one hundred
percent (100%) occupied during such year by such Tenants. For example, if there
were only two tenants occupying an equal amount of space in the Building during
one year, but they occupied less than the entire building, each tenant would pay
50% of the variable Operating Costs.
(d) Operating Cost and Adjustment. Before the commencement of each
------------------------------
calendar year of the Term, or as soon thereafter as practicable, Landlord will
notify Tenant in writing of Landlord's estimate of Operating Costs, for the next
succeeding year (until the following December 31) and the amount of Tenant's
percentage share thereof as set forth in subsection 1(a). Effective January 1
and each month thereafter, Tenant shall pay to Landlord as Additional Rent one-
twelfth (1/12) of Tenant's percentage share of said estimated Operating Costs.
On the next succeeding January 1, or as soon thereafter as possible or upon
sooner termination of the Term, Landlord will compute Tenant's percentage share
of the total Operating Costs for such previous year or portion thereof if
applicable, based on the actual Operating Costs and, shall provide Tenant with a
written statement showing the actual Operating Costs and Tenant's percentage
share of said costs. Landlord shall use its best efforts to deliver such
statement to Tenant by March 31. Such statement shall provide an itemized
breakdown of the actual Operating Costs and shall be in generally the form
attached hereto as Exhibit "E". If the total amount of Tenant's percentage
-----------
share of Operating Costs paid for such previous year or portion thereof is less
than Tenant's percentage share of actual Operating Costs, then Tenant shall pay
Landlord any deficiency. If the total amount paid by Tenant for such previous
year or portion thereof exceeds the Tenant's percentage share of actual
Operating Costs, then Landlord shall credit such excess to the payment of Rent
which may thereafter become due. Any adjustment payment required to be made
pursuant to this subsection 6(d) shall be made within thirty (30) days after
Landlord has notified Tenant thereof in writing. If this Lease commences at a
time other than at the commencement of a calendar year, or expires at a time
other than the expiration of the calendar year, Landlord shall estimate Tenant's
percentage share of Operating Costs for that portion of the calendar year
contained in the Term and Tenant shall pay such charge in equal monthly
installments on the first day of those months of that calendar year which are in
the Term. If at any time Landlord obtains or receives additional information
regarding the actual amount of the Tenant's percentage share of Operating Costs,
Landlord may, at its election, adjust the amount of the monthly installments due
during the balance of the calendar year of the Term to reflect such additional
information.
Even though the term has expired and Tenant has vacated the Premises, when
the final determination is made of Tenant's percentage share of Operating Costs
for the year in which this Lease terminates, Tenant shall pay within thirty (30)
days of written notice any increase due over the estimated expenses paid and,
conversely, if Tenant has otherwise complied with all other terms and conditions
of this Lease, Landlord shall refund any excess (any over-
15
payment in the event said expenses decrease) to Tenant within thirty (30) days
following the expiration or termination date of this Lease.
(e) Tenant's Right to Audit Operating Costs.
---------------------------------------
(i) Tenant shall have the right, upon fulfillment of the
conditions set forth below, to conduct one (1) audit of the Landlord's books and
records covering the Operating Costs for each particular calendar year, or
portion thereof as the case may be, to verify the accuracy of the Landlord's
determination of the Tenant's percentage of such Operating Costs. In the event
Tenant does not elect to conduct an audit of the Landlord's books and records
for a particular calendar year as set forth herein, then the Landlord's
statement of Operating Costs for that particular calendar year shall be deemed
conclusive and binding for all purposes. The conditions which must be met before
Tenant shall have the right to audit the books and records of a particular
calendar year are as follows:
a) Tenant must provide Landlord not less than fifteen (15)
days' prior written notice of the Tenant's election to audit (the "Tenant's
Notice of Audit"); provided, however, Tenant's audit may only cover the
preceding two (2) calendar years.
b) Tenant's audit must be undertaken and completed by
Tenant or its agents at reasonable times during Landlord's normal business hours
at the place where the Landlord's records are normally kept. Said audit must be
completed within ninety (90) days of Landlord's receipt of Tenant's Notice of
Audit.
c) Tenant shall not be entitled to withhold Rent pending
the outcome of any audit.
d) At the time the Tenant delivers its Tenant's Notice of
Audit to Landlord, the Tenant shall also provide evidence reasonably acceptable
to the Landlord that the audit will be a "fair and true audit." For the purposes
hereof, the term "fair and true audit" shall mean that the review of the subject
books and records shall be undertaken and completed by the Tenant, its officers
or employees, or by an independent accounting firm or property management firm
and that in no event will the party auditing the books (or that party's employer
or principal) directly or indirectly base the compensation or fees for such
audit work upon a percentage of the savings found or the return due the Tenant
by reason of that audit.
(ii) The Tenant's rights to audit the Landlord's books and
records shall be strictly limited to the right set forth above and the Tenant
shall have no right to audit any of the Landlord's books or records for any
calendar year before or after the Lease Term or for any calendar year other than
the immediately two (2) preceding calendar years as set forth above. All costs
and expenses of the audit shall be borne solely by the Tenant, except as set
forth below.
(iii) A true and correct copy of the audit shall be delivered to
the Landlord within fifteen (15) days of the completion of such audit. Any
underpayment shown by the Tenant's audit shall be paid in cash to Landlord
within thirty (30) days of the date of the audit. Any overpayment shown by such
audit shall be subject to the Landlord's prompt verification and, upon such
verification, shall be given to the Tenant in cash or as a credit against Rent
next falling due. If Landlord and Tenant are unable to agree upon any
adjustments Landlord or Tenant request as a result of an audit within thirty
(30) days after such request, the issues shall be resolved through binding
arbitration in Seattle, Washington, in accordance with the Commercial
Arbitration rules of the American Arbitration Association. If such audit
discloses an error in Landlord's determination of actual Operating Costs
allocable to the Premises in Landlord's favor in excess of five percent (5%) of
Tenant's percentage of actual annual Operating Costs (i.e., resulting in payment
or reimbursement by Landlord to Tenant), then all reasonable costs of Tenant's
audit shall be borne by Landlord.
________________________________________________________________________________
7. SECURITY DEPOSIT
________________________________________________________________________________
Within thirty (30) days after the execution of this Lease, Tenant
shall deposit with Landlord a clean, irrevocable and unconditional standby
letter of credit in a form reasonably acceptable to Landlord and Tenant
16
(the "Letter of Credit") issued by a bank reasonably approved by Landlord
(hereinafter referred to as the "Bank") in favor of Landlord, in the amount of
One Million Dollars ($1,000,000.00). The Letter of Credit shall have a term
which expires no sooner than the date which is four (4) years from the
Commencement Date, or alternatively Tenant may deliver a one (1) year Letter of
Credit which by its terms automatically renews for successive one (1) year
periods until the date which is four (4) years from the Commencement Date unless
the Bank provides no less than thirty (30) days written notice to Landlord that
such Letter of Credit shall not be renewed. If the Bank provides Landlord
written notice that the Letter of Credit shall not be renewed, Landlord shall
have the right to draw down the entire amount of the Letter of Credit unless
Tenant substitutes, prior to the expiration of such Letter of Credit, a new
Letter of Credit which meets the requirements of this Section 7. If Tenant is
not in default of this Lease for the failure to pay Basic Rent beyond any
applicable cure period and has not previously been in default in the payment of
Basic Rent beyond any applicable cure period more than two (2) times in any
preceding twelve (12) month period on the date which is two (2) years from the
Commencement Date, then on such date or the immediately succeeding date on which
such conditions have been satisfied, (A) the amount of the Letter of Credit may,
in Tenant's sole discretion, be reduced to Five Hundred Thousand Dollars
($500,000.00), or (B) if the Bank has paid any sums to Landlord based upon the
Letter of Credit and Landlord still holds such sums or any portion thereof, then
Landlord shall return a portion of such sums to Tenant such that Landlord shall
retain only Five Hundred Thousand Dollars ($500,000.00). The Letter of Credit
shall be held by Landlord as security for the faithful performance and
observance by Tenant of the terms, conditions and provisions of this Lease. If
Tenant defaults in any of the terms, conditions or provisions of this Lease
including, but not limited to, the payment of Rent, and Tenant fails to cure any
such default after any required notice and within any applicable cure period
hereunder (i) Landlord shall have the right to require the Bank to make payment
to Landlord or its designee of the entire proceeds of the Letter of Credit, and
(ii) Landlord may, at the option of Landlord (but Landlord shall not be required
to) apply or retain the whole or any part of such sum so paid to it by Tenant or
the Bank to the extent required for the payment of any Rent or any other
reasonable sums incurred by Landlord as a result of such default, and (iii)
Landlord shall hold the remainder of such sum paid to it by the Bank or Tenant,
if any, for Landlord's benefit, as security for the faithful performance and
observance by Tenant of the terms, covenants, and conditions of this Lease on
Tenant's part to be observed and performed, with the same rights as hereinabove
set forth to apply or retain the same in the event of any further default by
Tenant under this Lease; provided that if Tenant, on its own accord at any time
thereafter or within ten (10) business days after written demand by Landlord,
shall deposit with Landlord or its designee the amount so applied or retained so
that Landlord or its designee shall have the full deposit on hand, then Landlord
shall immediately return the entire deposit to the Bank provided that the Bank
or such other Bank reasonably acceptable to Landlord issues, simultaneously with
Landlord's return of such deposit, a substitute letter of credit which meets the
requirements of this Section 7, which substitute letter of credit shall then be
the Letter of Credit. Tenant's failure to deposit with Landlord the amount so
applied or retained so that the Landlord or its designee shall have the full
deposit on hand within ten (10) business days of Landlord's written demand shall
constitute a breach of this Lease.
In the event of a transfer, sale or lease of Landlord's interest in the
Building, Landlord shall transfer or cause to be transferred both the Letter of
Credit and any sums collected thereunder by Landlord, together with any other
sums then held by Landlord or its designee as such security, to the transferee,
and Landlord thereupon shall be released by Tenant from all liability under this
Section. Tenant agrees to look solely to the new landlord for the return of the
Letter of Credit or any sums collected thereunder and any other security.
Tenant further covenants that it shall not assign or encumber, or attempt to
assign or encumber, any part of such security and that neither Landlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment, or attempted encumbrance. Landlord shall not be required
to exhaust its remedies against Tenant before having recourse to the Letter of
Credit or such cash security held by Landlord. Recourse by Landlord to the
Letter of Credit or such security shall not affect any remedies of Landlord
which are provided in this Lease or which are available to Landlord in law or
equity.
In the event that Tenant is not in default of this Lease in the payment of
Basic Rent beyond any applicable cure period and has not previously been in
default in the payment of Basic Rent beyond any applicable cure period more than
two (2) times in any preceding twelve (12) month period on the date which is
four (4) years from the Commencement Date, then on such date, or the immediately
succeeding date on which such conditions have been satisfied, the Letter of
Credit or any sums held by Landlord as a result of a payment to Landlord by the
Bank under the Letter of Credit, except as the same may have been applied by
Landlord in accordance with this Lease, shall be
17
returned to Tenant; provided, however, Tenant shall have deposited with Landlord
on or before such date a cash security deposit in the amount of the last months'
Basic Rent, which shall be held by Landlord as a cash security deposit in lieu
of the Letter of Credit and Landlord and Tenant shall have the same rights and
obligations with respect thereto as they had with respect to the Letter of
Credit except that upon termination of this Lease Landlord shall refund or
credit to Tenant (or Tenant's successor) the unused portion of the cash security
deposit, provided that a reasonable amount of the deposit may be retained by
Landlord until Tenant has vacated the Premises and the final Operating Costs
reconciliation under Section 6 has been completed, at which time the balance
shall be promptly refunded to Tenant.
________________________________________________________________________________
8. UTILITIES AND SERVICES
________________________________________________________________________________
(a) Landlord's Duties. Provided that Tenant is not in default under this
-----------------
Lease beyond any applicable cure period, Landlord will provide the following
services:
(i) Maintain normal and usual Building business hours, Monday
through Friday, from 6:00 a.m. to 6:00 p.m. and on Saturday from 8:00 a.m. to
1:00 p.m.; Sundays and holidays excepted (the "Building Business Hours").
(ii) Furnish utilities to provide for lighting, convenience
power, and heat and air conditioning during such Building Business Hours for the
comfortable occupancy of the Premises. Such utilities shall also be available
after Building Business Hours provided that utilities used by Tenant during
other than the Building Business Hours shall be billed to Tenant at the hourly
rate charged by Landlord (but without profit to Landlord). Tenant agrees to
cooperate fully at all times with Landlord, and to abide by all reasonable
regulations and requirements which Landlord may prescribe for the proper
function and protection of said air conditioning system. Tenant agrees not to
connect any apparatus, device, conduit or pipe to the Building chilled and hot
water air conditioning supply lines. Tenant further agrees that neither Tenant
nor its servants, employees, agents, visitors, licensees or contractors shall at
any time enter mechanical installations or facilities of the Building or adjust,
tamper with, touch or otherwise in any manner affect said installations or
facilities. The cost of maintenance and service calls to adjust and regulate the
air conditioning system shall be charged to Tenant if the need for maintenance
work results from either Tenant's adjustment of room thermostats or Tenant's
failure to comply with its obligations under this Section 8.
(iii) Provide twenty-four (24) hour per day, three hundred sixty-
five (365) day per year access to the Building and Premises without prior notice
to Landlord. Landlord shall provide Tenant with sufficient keys or access
devices for Tenant's employees. The cost of such keys or access devices shall be
paid as provided in Section 9(l).
(iv) Provide non-attended passenger elevator facilities (if
applicable) during all working days (Saturday, Sunday and holidays one elevator
subject to call).
(v) Provide janitorial service to the Premises five (5) days per
week (Sunday through Thursday, except national holidays) in accordance with the
Janitorial Standards described in Exhibit "H", provided the same are kept
-----------
reasonably in order by Tenant. Any and all additional janitorial service
desired by Tenant shall be contracted for by Tenant directly with Landlord's
janitorial agent, and the cost and payment thereof shall be Tenant's
responsibility.
(vi) Provide water for drinking, lavatory and toilet purposes
drawn through fixtures installed by Landlord.
(vii) Payment for all services rendered under this Section 8 shall
be in accordance with Section 8 of this Lease.
(viii) Utilities or services provided to Tenant in excess of the
services provided herein, or other than during the Building Business Hours
described herein, shall be charged to Tenant as Additional Rent at reasonable
rates established by Landlord as to services and as set forth in Section 8(a)ii)
as to utilities, and shall be payable monthly.
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(ix) Except as provided in Section 9(p), Landlord shall, as of
the Commencement Date and throughout the entire term of this Lease, comply with
the provisions of the Americans with Disabilities Act ("ADA") as regards the
Building, Land and Common Areas. Landlord reserves the right to object to and
appeal any determination that it must take any specific action to comply with
the ADA; provided Landlord shall hold Tenant harmless from any adverse effects
or cost of such objection or appeal.
(b) Interruption. It is understood that Landlord does not warrant that
------------
any of the services referred to above will be free from interruption by virtue
of a strike or a labor trouble or any other cause beyond Landlord's reasonable
control. Except as otherwise provided in this Lease, such interruption of
service shall not be deemed an eviction or disturbance of Tenant's use or
possession of the Premises, or any part thereof, nor shall it render Landlord
liable to Tenant for damages, by abatement or reduction of Rent or otherwise,
nor shall it relieve Tenant from performance of Tenant's obligations under this
Lease, nor shall Tenant be relieved from the performance of any covenant or
agreement in this Lease because of such failure or interruption. Landlord
reserves the right to stop service of the elevator, plumbing, ventilation, air-
conditioning, and electrical systems, when necessary, by reason of accident or
emergency, or for repairs, alterations or improvements, which are in the
reasonable judgment of Landlord desirable or necessary, until said repairs,
alterations or improvements shall have been completed; provided, Landlord shall
use its good faith efforts to minimize interruption to Tenant's business
operations.
(c) Self-Help Rights. If an interruption of services or utilities which is
----------------
caused by the intentional or negligent act or omission of Landlord materially
interferes with the conduct of Tenant's business in the Premises for three (3)
consecutive business days after notice thereof from Tenant to Landlord, Rent
shall be abated thereafter in proportion to the extent of the interference until
such services or utilities are restored and, if such services or utilities are
not restored within such three (3) day period, Tenant shall have the right,
after giving Landlord at least 24 hours prior written notice of the actions
Tenant proposes to take, to take such reasonable actions as may be necessary to
remedy the situation. Landlord shall, within thirty (30) days of receipt of
evidence thereof, reimburse Tenant for Tenant's reasonable out-of-pocket costs
incurred in connection with Tenant's corrective actions taken pursuant to this
Section.
________________________________________________________________________________
9. CARE OF PREMISES
________________________________________________________________________________
Tenant agrees that it shall:
(a) Not use or occupy the Premises in violation of law or of the
certificate of occupancy issued for the Building, and shall, upon written notice
from Landlord, discontinue any use of the Premises which is declared by any
governmental authority having jurisdiction to be a violation of law or of said
certificate of occupancy. Tenant shall comply with any direction of any
governmental authority having jurisdiction which shall, by reason of the nature
of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to the Premises or with respect to the use or occupancy
thereof.
(b) Give Landlord access to the Premises at all reasonable times, without
charge or diminution of Rent, to enable Landlord to examine the same and to make
such repairs, additions and alterations as Landlord reasonably may deem
advisable, including, upon reasonable advance notice, the right to show the
Premises for the purpose of a potential sale or lease; provided, Landlord shall
only have the right to show the Premises to a prospective tenant during the last
ten (10)months of the Lease Term and, provided further, that any third party
which Landlord shows the Premises to shall be accompanied by a Tenant
representative and shall required to sign a non-disclosure agreement in a form
reasonably acceptable to Tenant prior to such third party entering Tenant's
server room or any other confidential areas. If Landlord gives notice to Tenant
and Tenant fails to respond to Landlord within twenty-four (24) hours then
Landlord shall have the right to enter the Premises.
(c) At Tenant's own cost and expense and without liens, keep, repair,
maintain and replace the Premises, and every part thereof, including all
fixtures, equipment and Tenant Improvements, in first class order, condition and
repair and shall make all replacements necessary to keep the same in such
condition, ordinary wear and tear and damage caused by Landlord, casualty or
condemnation excepted; provided that Landlord shall keep, maintain, repair
19
and replace in good condition and repair (1) the structural elements of the
Building (including without limitation the foundations, exterior walls, roof and
roof membrane) and the gutters and downspouts of the Building, (2) the sewer,
water, gas, telephone and power lines and meters serving the Premises, and (3)
the plumbing, heating, ventilating, air conditioning, elevator and electrical
system installed or furnished by Landlord; provided further that Landlord shall
make such repairs to the Premises as may be required or become necessary because
of any latent defects not ascertainable from a visual inspection by Tenant
within a reasonable time after Landlord receives notice of such defects. If
Tenant shall fail to commence to so repair and maintain the Premises after five
(5) days notice from Landlord to do so (or such shorter period as Landlord, in
the exercise of its good faith business judgment, may decide that the
circumstances warrant), Landlord may, but in no event shall be obligated to,
make the repairs and Tenant shall pay the reasonable cost thereof to Landlord
within five (5) days after written demand as Additional Rent. Except to the
extent they are excluded from Operating Costs under Section 6, maintenance and
repair costs incurred by Landlord with respect to the structural elements of the
Building and the plumbing, heating, ventilating, air conditioning, elevator and
electrical system installed or furnished by Landlord shall be part of the
Operating Costs defined in Section 6; provided that, except to the extent
Landlord has waived its right of recovery against Tenant in Section 15, if such
maintenance and repairs are caused in part or in whole by the act, neglect, or
omission by Tenant, its agents, employees, sublessees, licensees, or invitees,
Tenant shall pay to Landlord, as Additional Rent, that portion of the cost of
such maintenance and repairs which, in Landlord's good faith business judgment,
is reasonably attributable to the act, neglect, or omission by Tenant, its
agents, employees, sublessees, licensees, or invitees.
(d) Recognize that improvements attached to the Premises (excluding all
property that shall remain the property of Tenant as provided in Section 25(c))
become the property of the Building and may not be removed without approval of
Landlord which approval shall not be unreasonably withheld, unreasonably
conditioned or unreasonably delayed, except that such approval may be subject to
the Tenant's paying for the cost of repairs resulting from the removal of such
improvements.
(e) Upon the termination of this Lease in any manner whatsoever, remove
Tenant's property and those of any other person claiming under Tenant, and quit
and deliver up the Premises to Landlord peaceably and quietly in as good order
and condition as the same is as of the Commencement Date (as to the Third Floor)
or as of the Second Floor Commencement Date (as of the Second Floor) or
hereafter may be put in by Landlord or Tenant, reasonable use, wear and tear
thereof, damage by Landlord, casualty or condemnation, and permitted alterations
or improvements not required to be removed at the time of the installation of
the same as provided in Section 25(c) excepted. Any and all reasonable costs
incurred by Landlord to restore the Premises to such good order and condition
will be billed to Tenant, and property not removed by Tenant at the termination
of this Lease, however terminated, shall be considered abandoned and Landlord
may dispose of the same as it deems expedient with reasonable cost thereof to be
billed to the Tenant.
(f) Except as may otherwise be provided in this Lease, not place signs on
the Premises except as authorized and approved by Landlord, such authorization
and approval not to be unreasonably withheld, unreasonably conditioned or
unreasonably delayed, and subject to all applicable governmental rules and
restrictions, as well as the "Building Rules and Regulations" as set forth in
Exhibit "F".
-----------
(g) Except as expressly provided in this Lease, not make any alteration
of, improvements to, or addition to the Premises without the prior written
approval of Landlord, which approval shall not be unreasonably withheld,
unreasonably conditioned or unreasonably delayed; provided that Tenant shall
have the right to install an electronic security system within the Premises,
serving only the Premises, as its sole cost and expense, and Tenant shall, upon
the expiration or earlier termination of this Lease, remove such security system
and repair any damage caused by such removal and restore the portion of the
Premises affected thereby to its original condition as it existed as of the
Commencement Date.
(h) Not install or authorize the installation of more than six (6) coin
operated vending machines without obtaining prior written consent from Landlord,
which consent shall not be unreasonably withheld, unreasonably conditioned or
unreasonably delayed; provided, however, that Tenant shall obtain Landlord's
prior approval of the location of all vending machines and such machines shall
be located in an area with sufficient structural support.
20
(i) Not do or permit anything to be done in or about the Premises which
will in any way unreasonably obstruct or interfere with the rights of other
tenants or occupants of the Building, or injure or annoy them, or use or allow
the Premises to be used for any unlawful purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. Tenant shall not
commit or suffer to be committed any waste in or upon the Premises.
(j) Not do or permit to be done anything which will invalidate or increase
the cost of any fire, extended coverage or any other insurance policy covering
the Building and/or property located therein, unless Tenant agrees, after
Landlord gives thirty (30) days' prior written notice to Tenant of the cost
thereof, to reimburse Landlord for any increase in the cost of such insurance
and subject to Landlord's lender's approval. Tenant shall promptly, upon
demand, reimburse Landlord for any additional premium charges for such policy by
reason of Tenant's failure to comply with the provisions of this subsection
9(j).
(k) Observe the "Building Rules and Regulations" described in Exhibit "F",
-----------
which may be modified by Landlord from time to time upon reasonable written
notice from Landlord to Tenant; provided that the same or any such modifications
thereto are reasonable and do not discriminate against any tenant of the
Building.
(l) Monitor issuance of keys. Unless specifically provided otherwise in
the Lease, all keys and/or Building security card devices for access to the
Premises and Building are provided at Tenant's cost after Tenant receives its
initial allotment of two (2) keys and/or Building security card devices per
1,000 square feet of useable square feet in the Premises. Any re-keying of the
Premises and/or Building due to lost or missing keys shall be at Tenant's cost.
No additional locks shall be placed upon any doors without the written consent
of Landlord. Additional keys and/or Building security card devices shall be
furnished at Tenant's cost. Upon termination of this Lease, all keys and
Building security card devices shall be surrendered to Landlord.
(m) Install Tenant's communications equipment and cabling in accordance
with Landlord's Building Rules and Regulations.
(n) Remove, upon Landlord's request, all cabling provided in Tenant's
Premises, at Tenant's sole cost, upon Lease termination.
(o) Not place any other equipment of any kind or nature whatsoever which
will or may necessitate any changes, replacements or additions to or require the
use of the water system, plumbing system, heating system, air conditioning
system or the electrical system of the Premises or Building without the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
unreasonably conditioned or unreasonably delayed, unless Tenant agrees, after
Landlord gives thirty (30) days' prior written notice to Tenant of the actual
cost of such changes, replacements or additions or the actual usage costs of
such systems, to reimburse Landlord for any such actual costs.
All heating, ventilation and air conditioning (HVAC) equipment
installed in the Premises for Tenant's specific requirements, separate or in
addition to the Building HVAC system, shall be maintained at Tenant's sole cost
and expense. Any maintenance contractor hired by Tenant to maintain or repair
Tenant's separate HVAC equipment must have Landlord's written approval in
advance of any work, which approval shall not be unreasonably withheld,
unreasonably conditioned or unreasonably delayed.
(p) Comply with the Americans Disabilities Act with respect to Tenant's
use and occupancy of the Premises.
________________________________________________________________________________
10. ASSIGNMENT AND SUBLETTING
________________________________________________________________________________
(a) Except as specifically provided otherwise in this Section 10, Tenant
shall not, either voluntarily or by operation of law, assign, hypothecate or
transfer this Lease, or sublet the Premises or any part thereof, without the
prior written consent of Landlord in each instance, which consent shall not be
unreasonably withheld, unreasonably conditioned, or unreasonably delayed.
21
(b) In the event Tenant desires to assign, hypothecate or otherwise
transfer this Lease or sublet the Premises, then at least fifteen (15) days
prior to the date when Tenant desires the assignment or sublease to be effective
(the "Assignment Date"), Tenant shall give Landlord a written notice (the
"Assignment Notice"), which shall set forth the name, address and business of
the proposed assignee or sublessee, information (including references)
concerning the character, ownership, and financial condition of the proposed
assignee or sublessee, the Assignment Date, any ownership or commercial
relationship between Tenant and the proposed assignee or sublessee, and the
consideration and all other material terms and conditions of the proposed
assignment or sublease, all in such detail as Landlord shall reasonably require.
Within five (5) business days after Landlord's receipt of Tenant's Assignment
Notice, Landlord shall notify Tenant of whether or not Landlord consents to the
proposed transfer (but Landlord shall not be required to actually execute
transfer documents within such five day period) or if Landlord needs additional
detail. If Landlord requests additional detail, the Assignment Notice shall not
be deemed to have been received until Landlord receives such additional detail
and Landlord may withhold consent to any assignment or sublease until such
information is provided to it. Without limiting Landlord's right to withhold
consent to a proposed sublease for other reasons, Landlord shall have the right
to withhold consent to a proposed sublease which is a "Qualifying Transfer" as
defined in subsection 10(f) below if, in Landlord's reasonable judgment, the
proposed sublease is on terms and conditions which are below the then current
fair market terms and conditions for comparable space in a comparable building.
(c) The subletting of substantially all of the Premises for all or any
part of the remaining Term of this Lease shall be deemed an assignment rather
than a sublease for purposes of this clause. Notwithstanding the foregoing,
Landlord shall consent to the assignment or transfer, if the Assignment Notice
states that Tenant desires to assign the Lease to any entity into which Tenant
is merged, with which Tenant is consolidated, with which Tenant completes a
share exchange, or which acquires all or substantially all of the assets of
Tenant or all or substantially all of the outstanding shares of capital stock of
Tenant (a "Permitted Assignee"), provided that the assignee first executes,
acknowledges and delivers to Landlord an agreement whereby the assignee agrees
to be bound by all of the covenants and agreements in this Lease which Tenant
has agreed to keep, observe or perform, that the assignee agrees that the
provisions of this Section 10 shall be binding upon it as if it were the
original Tenant hereunder and that the assignee shall have a net worth
(determined in accordance with generally accepted accounting principles
consistently applied) immediately after such assignment which is at least equal
to the net worth (as so determined) of Tenant at the time this Lease was entered
into.
(d) If Tenant shall sublet all or any portion of the Premises, then one-
half (1/2) of any consideration paid by the sublessee for the portion of the
Premises being sublet that exceeds the Basic Rent and rental adjustments
provided by this Lease for such portion of the Premises being sublet shall be
due, owing and payable from Tenant to Landlord when paid or owing by the
sublessee under the sublease without any deduction or adjustment whatsoever for
costs incurred by Tenant in connection with the sublease. All costs incurred in
connection with any sublease including, without limitation, brokers fees and
tenant improvement costs, shall be paid by Tenant.
(e) Any sale, assignment, hypothecation or transfer of this Lease or
subletting of the Premises that is not in compliance with the provisions of this
Section 10 shall be void and shall, at the option of Landlord, terminate this
Lease. The consent by Landlord to any assignment or subletting shall not be
construed as relieving Tenant or any assignee of this Lease or sublessee of the
Premises from obtaining the express written consent of Landlord to any further
assignment or subletting, or as releasing Tenant or any assignee or sublessee of
Tenant from any liability or obligation hereunder whether or not then accrued.
Tenant shall pay Landlord as Additional Rent a reasonable fee for costs incurred
in connection herewith, including but not limited to costs for attorneys,
accountants, architects, Tenant Improvement oversight and administration at the
time Tenant requests in writing that Landlord consent to any assignment or
subletting of the Lease. At a minimum, Landlord shall charge a fee of Five
Hundred and No/100 Dollars ($500.00) for all assignments and subleases which
require or do not require Landlord's consent, whether or not an assignment or
sublease is executed. This Section 10 shall be fully applicable to all further
sales, hypothecations, transfers, assignments and subleases of any portion of
the Premises by any successors or assignee of Tenant, or any sublessee of the
Premises.
(f) For the purposes of this Section 10, a "Qualifying Transfer" shall
mean (i) any proposed assignment of this Lease, (ii) any proposed sublease of
any portion of the Premises with a term expiring within one year of the
expiration date of the Lease Term, (iii) any proposed sublease of any portion of
the Premises with a term of more than
22
two (2) years, (iv) if Tenant leases two or more floors in the Building, any
proposed sublease of a portion of the Premises which exceeds one full floor, or
(v) if Tenant leases less than two floors in the Building, any proposed sublease
of any portion of the Premises. Notwithstanding any provisions of this Section
10 to the contrary, after the Landlord receives a request from Tenant to consent
to any Qualifying Transfer, Landlord shall have the option, to be exercised by
written notice within thirty (30) days after the receipt of such request, to
terminate this Lease and the Term hereof with respect to the portion of the
Premises covered by the proposed assignment or sublease on not less than thirty
(30) days and not more than ninety (90) days notice to the Tenant. If the
Landlord elects to terminate this Lease as aforesaid, the Tenant shall have the
right, to be exercised by written notice to the Landlord within ten (10) days
after receipt of such notice of termination, to withdraw the request for consent
to the proposed assignment or sublease, in which case the Tenant shall not
proceed with such assignment or sublease, the notice of termination shall be
null and void and this Lease shall continue in full force and effect in
accordance with its terms. In the event Landlord elects to terminate this Lease
as provided herein, then Landlord shall have the additional right to negotiate
directly with Tenant's proposed assignee or subtenant and to enter into a direct
lease with such party on such terms as shall be acceptable to Landlord in its
sole and absolute discretion, and Tenant hereby waives any claims against
Landlord related thereto, including, without limitation, any claims for any
compensation or profit related to such lease. In addition, in the event Landlord
elects to terminate this Lease as provided herein, then upon the applicable
termination date Tenant shall pay to Landlord, as Additional Rent, a termination
fee equal to Landlord's unamortized costs incurred in connection with this Lease
including, without limitation, brokerage fees, tenant improvement allowances,
free rent, and any other concessions granted by Landlord in connection with this
Lease.
The term "assign," as used herein, shall include an assignment of a part of
interest in this Lease, as well as any assignment from one co-tenant to another;
and an assignment to any prior owner of the Tenant's interest herein or part
thereof.
________________________________________________________________________________
11. DAMAGE OR DESTRUCTION
________________________________________________________________________________
(a) In the event the Building and/or the Premises is damaged by fire or
other perils covered by Landlord's insurance, Landlord shall:
i) In the event of a partial destruction of the Building and/or
the Premises, to an extent not exceeding twenty-five percent (25%) of the full
insurable value thereof, and if the damage thereto is such that the Building
and/or the Premises may be repaired, reconstructed or restored within a period
of one hundred twenty (120) days from the date of the happening of such casualty
and if Landlord will receive insurance proceeds sufficient to cover the cost of
such repairs, then Landlord shall commence and proceed diligently with the work
of repair, reconstruction or restoration and this Lease shall continue in full
force and effect;
ii) If such repair, reconstruction, or restoration shall require
a period longer than one hundred twenty (120) days or exceeds twenty-five
percent (25%) of the full insurable value thereof, or if said insurance proceeds
will not be sufficient to cover the cost of such repairs, then Landlord either
may elect to so repair, reconstruct or restore and the Lease shall continue in
full force and effect or Landlord may elect not to repair, reconstruct, or
restore and the Lease shall then terminate; and
iii) Under any of the conditions of this subsection 11(a) or
subsection 11(e), Landlord shall give written notice to Tenant of its intention
within ninety (90) days after the occurrence of such damage or destruction. If
Landlord fails to provide such written notice within such ninety (90) day
period, then Landlord shall be deemed to have elected not to restore the
Building and/or Premises. In the event Landlord elects not to restore the
Building and/or the Premises, this Lease shall be deemed to have terminated as
of the date of such partial destruction. In the event Landlord elects to
restore the Building and/or the Premises, but it is reasonably estimated that
such restoration will take longer than ten (10) months from the date of the
casualty, then Tenant may terminate this Lease on written notice to Landlord.
Notwithstanding anything contained in this Section 11(a) to the contrary,
provided that Tenant leases at least fifty percent (50%) of the Building, if any
casualty does not render the Premises untenantable, regardless of the amount
23
of damage or destruction to the remainder of the Building, then Landlord shall
not have the right to terminate this Lease under this Section 11(a).
(b) Upon any termination of this Lease under any of the provisions of this
Section 11, the parties shall be released without further obligation to the
other from the date possession of the Premises is surrendered to Landlord except
for items which have theretofore accrued and are then unpaid; provided that
Landlord shall, upon such termination, return to Tenant any unearned Rent or
other unearned sums paid to Landlord.
(c) In the event of repair, reconstruction, or restoration by Landlord as
herein provided, the Rental payable under this Lease shall be abated
proportionately with the degree to which Tenant's use of the Premises is
impaired during the period of such repair, reconstruction or restoration.
Tenant's recovery for damages, if any, is limited to Rental abatement. Tenant
shall not be entitled to any compensation or damages for loss in the use of the
whole or any part of the Premises and/or any inconvenience or annoyance
occasioned by any damage, repair, reconstruction or restoration.
(d) Tenant shall not be released from any of its obligations under this
Lease except to the extent and upon the conditions expressly stated in this
Section 11 or as otherwise provided in this Lease. Notwithstanding anything to
the contrary contained in this Section 11, if Landlord is delayed or prevented
from repairing or restoring the damaged Premises within one year after the
occurrence of such damage or destruction by reason of acts of God, war,
governmental restrictions, inability to procure the necessary labor or materials
after diligent efforts to obtain such labor or materials, or other cause beyond
the reasonable control of Landlord, Landlord shall be relieved of its obligation
to make such repair or restoration and Tenant shall be released from its
obligations under this Lease as of the end of said one year period and this
Lease shall be deemed terminated.
(e) If damage is due to any cause other than fire or other peril covered
by extended coverage insurance, Landlord may elect to terminate this Lease.
(f) If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall be obligated to make repair or restoration only of
those portions of the Building and/or the Premises which were originally
provided at Landlord's expense, and the repair and restoration of items not
provided at Landlord's expense shall be the obligation of Tenant.
(g) Notwithstanding anything to the contrary contained in this Section 11,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises when the damage resulting from any casualty covered under
this Section 11 occurs during the last twelve (12) months of the then current
Term of this Lease. However, if Landlord chooses not to restore, Tenant may
elect to terminate this Lease.
________________________________________________________________________________
12. INDEMNIFICATION
________________________________________________________________________________
(a) Tenant shall indemnify, defend and hold Landlord harmless from all
claims arising from Tenant's use of the Premises or the conduct of its business
or from any activity, work, or thing done, permitted or suffered by Tenant in or
about the Premises. Tenant shall further indemnify, defend and hold Landlord
harmless from all claims arising from any breach or default in the performance
of any obligation to be performed by Tenant under the terms of this Lease, or
arising from any act, neglect, fault or omission of Tenant or of its agents or
employees, and from and against all costs, reasonable attorneys' fees, expenses,
and liabilities incurred in or about such claim or any action or proceeding
brought thereon. In case any action or proceeding shall be brought against
Landlord by reason of any such claim, Tenant upon notice from Landlord shall
defend the same at Tenant's expense by counsel approved in writing by Landlord;
provided that the foregoing provision shall not be construed to make Tenant
responsible for loss, damage, liability or expense resulting from injuries to
third parties caused by the negligence of Landlord, or its officers,
contractors, agents or employees.
(b) Landlord shall indemnify, defend and hold Tenant harmless from all
claims arising from any activity, work or thing done or permitted by Landlord in
or about the Building, Land or Common Area. Landlord shall further indemnify,
defend and hold Tenant harmless from all claims arising from any breach or
default in the performance of
24
any obligation to be performed by Landlord under the terms of this Lease, or
arising from any act, neglect, fault or omission of Landlord or of its agents or
employees, and from and against all costs, reasonable attorneys' fees, expenses,
and liabilities incurred in or about such claim or any action or proceeding
brought thereon. In case any action or proceeding shall be brought against
Tenant by reason of any such claim, Landlord, upon notice from Tenant, shall
defend the same at Landlord's expense by counsel approved in writing by Tenant;
provided that the foregoing provision shall not be construed to make Landlord
responsible for loss, damage, liability or expense resulting from injuries to
third parties caused by the negligence of Tenant, or its officers, contractors,
agents or employees.
(c) Notwithstanding anything contained above in this Section, in the event
of concurrent negligence of Tenant, its agents, employees or contractors, on the
one hand, and that of Landlord, its agents, employees or contractors on the
other hand, which concurrent negligence results in injury or damage to persons
or property, either party's obligation to indemnify the other as set forth in
this Section shall be limited to the extent of the negligence of the
indemnifying party and that of its agents, employees or contractors, including
the indemnifying party's proportional share of costs, attorneys' fees and
expenses incurred in connection with any claim, action or proceeding brought
with respect to such injury or damage.
________________________________________________________________________________
13. DAMAGE TO TENANT'S PROPERTY
________________________________________________________________________________
Notwithstanding anything in this Lease to the contrary, Landlord or its
agents shall not be liable for any damage to Tenant's property which is caused
by the following:
(a) Any damage to any property entrusted to employees of the Landlord;
(b) Loss or damage to any property by theft or otherwise unless caused by
Landlord's or Landlord's employees' negligence or willful misconduct and not
covered by Tenant's insurance;
(c) Any injury or damage to property resulting from fire, explosion,
falling plaster, steam, gas, electricity, water or rain which may leak from any
part of the Building or the pipes, appliances or plumbing work therein or from
the roof, street or sub-surface or from any other place or resulting from
dampness unless caused by Landlord's or Landlord's employees' negligence or
willful misconduct and not covered by Tenant's insurance; and
(d) Landlord or its agents shall not be liable for interference with light
or other incorporeal hereditaments, nor shall Landlord be liable for any latent
defect in the Premises or in the Building; provided that nothing in this Section
13(d) shall release Landlord from its duties under this Lease to repair any
latent defects in the Premises or Building within a reasonable time after
receiving notice of such defects.
Tenant shall give prompt notice to Landlord in case of fire or accidents in
the Premises or in the Building or of defects therein or in the fixtures or
equipment.
________________________________________________________________________________
14. INSURANCE
________________________________________________________________________________
(a) Tenant shall, during the term hereof and any other period of
occupancy, at its sole cost and expense, keep in full force and effect
Commercial General Liability Insurance insuring Tenant against any liability
arising out of lease, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto. Such insurance shall be in the amount of not less
than Three Million and No/100 Dollars ($3,000,000.00) Combined Single Limit for
injury to, or death of one or more persons in an occurrence, and for damage to
tangible property (including loss of use) in an occurrence. The policy shall
insure the hazards of Premises and operations, independent contractors,
contractual liability (covering the indemnity contained in Section 12 hereof)
and shall (1) name Landlord as an additional insured, and (2) contain a
provision that "the insurance provided Landlord hereunder shall be primary and
non-contributing with any other insurance available to Landlord."
(b) Landlord shall, during the term hereof any other period of occupancy
by Tenant, keep in full force and effect the following insurance:
25
i) Commercial General Liability Insurance insuring Landlord
against any liability arising out of Landlord's use, occupancy or maintenance of
the Building and Land and all areas appurtenant thereto. Such insurance shall be
in the amount of not less than Three Million and No/100 Dollars ($3,000,000.00)
Combined Single Limit for injury to, or death of one or more persons in an
occurrence, and for damage to tangible property (including loss of use) in an
occurrence. The policy shall insure the operations of the Building and Land and
of independent contractors, and include contractual liability (covering the
indemnity contained in Section 12 hereof) and shall contain a provision that
"the insurance provided Tenant hereunder shall be primary and non-contributing
with any other insurance available to Tenant."
ii) Property insurance together with coverage for earthquake
(excluding any property which Tenant is obligated to insure), for the full
replacement value of the Building, and all improvements and betterments to the
Building, with a deductible not to exceed twenty thousand dollars ($20,000.00).
(b) All policies shall be written in a form satisfactory to Landlord and
shall be taken out with insurance companies holding a General Policyholders
Rating of "A" and a Financial Rating of "A5" or better, as set forth in the most
current issue of Bests Insurance Guide. Within five (5) days after occupancy of
the Premises, Tenant shall deliver to Landlord certificates evidencing the
existence of the amounts and forms of coverage required above. No such policy
shall be cancelable or reducible in coverage except after thirty (30) days prior
written notice to Landlord. Tenant shall within ten (10) days prior to the
expiration of such policies, furnish Landlord with renewals or "binders"
thereof, or Landlord may order such insurance and charge the cost thereof to
Tenant as Additional Rent. If Landlord obtains any insurance that is the
responsibility of Tenant under this Section 14, Landlord shall deliver to Tenant
a written statement setting forth the cost of any such insurance and showing in
reasonable detail the manner in which it has been computed.
________________________________________________________________________________
15. WAIVER OF SUBROGATION AND RELEASE
________________________________________________________________________________
Notwithstanding anything to the contrary contained in this Lease, Landlord
and Tenant, for themselves and their respective insurers, each release the other
from liability and waive any and all rights to recover against the other for any
loss or damage to the property of such waiving party, both real and personal and
including without limitation earnings derived from such property,
notwithstanding that any such loss or damage may be due to or result from the
negligence of either of the parties hereto or their respective employees or
agents; provided, that this waiver shall not affect or relieve Tenant of its
obligation to maintain the Premises, or the right of Landlord to recover against
Tenant the amount of any deductible under Landlord's insurance where Tenant
causes the damage covered by Landlord's insurance. Each party shall make
reasonable attempts to obtain a written consent to the waiver of subrogation
contained in this Section from its insurer.
________________________________________________________________________________
16. EMINENT DOMAIN
________________________________________________________________________________
If more than twenty-five percent (25%) of the Building shall be taken or
condemned for public or quasi-public use, under any statute or by right of
eminent domain, or private purchase in lieu thereof, by any competent authority,
Tenant shall have no claim against Landlord and shall not have any claim or
right to any portion of the amount that may be awarded as damages or paid as a
result of any such condemnation. All rights of the Tenant to damages therefore
are hereby assigned by the Tenant to Landlord; provided, nothing contained in
this Section 16 shall be deemed to give Landlord any interest in any award made
to Tenant for the taking of personal property and fixtures belonging to Tenant
or for any relocation costs provided to Tenant, and Tenant shall have the right
to claim the same from such condemning authority. Upon such condemnation or
taking, at the option of either Landlord or Tenant, the term of this Lease shall
cease and terminate from the date such governmental agency takes possession, and
the Tenant shall have no claim against Landlord for the value of any unexpired
term of the Lease. If less than twenty-five percent (25%) of the Building shall
be so taken, but if such taking shall substantially affect the Premises or the
means of access thereto, or if such taking shall be of a material part of the
Premises, Landlord or Tenant shall have the right, by delivery of notice in
writing to the other party, to terminate this Lease as of the date when
possession shall be so taken. If neither party shall so elect, this Lease shall
be and remain unaffected by such taking except that, effective as of the date
26
when possession shall be so taken, the Rent payable hereunder shall be
diminished by an amount which shall bear the same ratio to the rent as the area
of the part of the Premises taken bears to the area of the Premises before such
taking.
________________________________________________________________________________
17. BANKRUPTCY
________________________________________________________________________________
If Tenant shall file a petition in bankruptcy under any provision of the
Bankruptcy Code as then in effect, or if Tenant shall be adjudicated bankrupt in
involuntary bankruptcy proceedings and such adjudication shall not have been
vacated within thirty (30) days from the date thereof, or if a receiver or
trustee shall be appointed of Tenant's property and the order appointing such
receiver or trustee shall not be set aside or vacated within sixty (60) days
after the entry thereof, or if Tenant shall assign Tenant's estate or effects
for the benefit of creditors, or if this Lease shall, by operation of law or
otherwise, pass to any person or persons other than Tenant, then in any such
event Landlord may terminate this Lease, if Landlord so elects, with or without
notice of such election and with or without entry or action by Landlord. In
such case, notwithstanding any other provisions of this Lease, Landlord, in
addition to any and all rights and remedies allowed by law or equity, shall,
upon such termination, be entitled to recover damages in the amount provided for
by Section 18 of this Lease. Neither Tenant nor any person claiming through or
under Tenant or by virtue of any statute or order of any court shall be entitled
to possession of the Premises but shall surrender the Premises to Landlord.
Nothing contained herein shall limit or prejudice the right of Landlord to
recover damages by reason of any such termination equal to the maximum allowed
by any statute or rule of law in effect at the time when, and governing the
proceedings in which, such damages are to be proved; whether or not such amount
is greater, equal to, or less than the amount of damages recoverable under the
provisions of this Section 17.
________________________________________________________________________________
18. DEFAULT AND REMEDIES
________________________________________________________________________________
(a) The occurrence of any one or more of the following events shall
constitute a default hereunder by Tenant:
i) The abandonment of the Premises by Tenant. Abandonment is
herein defined to include, but is not limited to, any absence by Tenant from the
Premises for ten (10) business days or longer while Tenant is in default of any
provisions or term of this Lease.
ii) The failure by Tenant to make any payment of Rent or any
other payment required to be made by Tenant hereunder within ten (10) days after
written notice from Landlord that such payment is overdue.
iii) The failure by Tenant to observe or perform any of the
express or implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in (i) or (ii) above, where such
failure shall continue for a period of ten (10) days after written notice
thereof from Landlord to Tenant. If the nature of Tenant's default is such that
more than ten (10) days are reasonably required for its cure, then Tenant shall
not be deemed to be in default if Tenant shall commence such cure within said
ten (10) day period and thereafter diligently prosecute such cure to completion,
which completion shall occur not later than sixty (60) days from the date of
such notice from Landlord.
iv)
a) The making by Tenant of any general assignment for the
benefit of creditors;
b) The filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or arrangement under
any law relating to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days);
c) The appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within sixty (60) days; or
27
d) The attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease where such seizure is not discharged within sixty (60)
days.
(b) In the event of any such default by Tenant, in addition to any other
remedies available to Landlord at law or in equity, Landlord shall have the
immediate option to terminate this Lease and all rights of Tenant hereunder. In
the event that Landlord shall elect to so terminate this Lease then Landlord may
recover from Tenant:
i) The amount of any unpaid Rent which had been earned at the
time of such termination; plus
ii) The amount by which the unpaid Rent which would have been
earned after termination and for the present value at the time of the award of
the amount by which the unpaid Rent for the balance of the Lease Term exceeds
the amount of such Rental loss that Tenant proves could have been reasonably
avoided; plus
iii) Any interest charged on delinquent Rent; plus
iv) The reasonable costs incurred by Landlord in reletting the
Premises which costs shall include, but not be limited to, real estate broker's
fees incurred by Landlord, the reasonable costs of repairing the Premises and
putting the same into a tenantable condition, and an amount equal to the
difference between the Basic Rent as specified in this Lease and the basic rent
payable by the replacement tenant(s) (provided such basic rent is substantially
similar to fair market rent for such space),, but shall exclude the cost of
tenant improvements, alterations, renovations and decorating the Premises for
the new tenant(s), any allowances or credits which Landlord grants such new
tenant(s), any expenses or costs related to any assumption by Landlord of the
lease of such replacement tenant(s);, and the attorneys' fees and costs incurred
by Landlord; plus
v) Any other amount necessary to compensate Landlord for all
the actual damages proximately caused by Tenant's failure to perform Tenant's
obligation under this Lease.
(c) In the event of any such default by Tenant, and in addition to all
other remedies, Landlord shall also have the right, with or without terminating
this Lease, to re-enter the Premises and remove all persons and property from
the Premises; such property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant. Landlord shall be
entitled to hold and sell Tenant's property in a commercially reasonable manner
as specified in the Uniform Commercial Code as enacted in the State of
Washington. No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 18 shall be construed as an election to terminate this
Lease unless a written notice of such intention is given to Tenant or unless the
termination thereof is decreed by a court of competent jurisdiction.
(d)
i) In the event of any such default by Tenant and in the event
that Landlord shall elect to re-enter as provided above or shall take possession
of the Premises pursuant to legal proceeding or pursuant to any notice provided
by law, Landlord may from time to time, without terminating this Lease, and
without waiving its right to recover all Rent as it becomes due, relet the
Premises or any part thereof for the Term of this Lease on terms and conditions
as Landlord in its sole discretion may deem advisable with the right to make
alterations and repairs to the Premises.
ii) In the event that Landlord shall elect to so relet, then
Rentals received by Landlord from such reletting shall be applied; first, to the
payment of any cost of such reletting (including the costs described in
subsection 18(b)(iv) above); second, to the payment of the cost of any
alterations and repairs to the Premises; third, to the payment of an
indebtedness other than Rent due hereunder from Tenant to Landlord; and fourth,
to the payment of Rent due and unpaid hereunder, and the residue, if any, shall
be held by Landlord and applied to payment of future Rent as the same may become
due and payable hereunder. Should the portion of such Rentals received from such
reletting during any month, which is applied to the payment of Rent hereunder,
be less than the Rent payable during
28
that month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord immediately upon demand therefor by Landlord.
(e) Tenant acknowledges that certain benefits or concessions provided by
Landlord are conditioned upon Tenant's timely, full and faithful performance of
each and every obligation, covenant, representation and warranty of this Lease
throughout the entire Term, even though such benefits or concessions may be
realized by Tenant over less than the entire Term. Accordingly, notwithstanding
anything to the contrary contained herein, in the event Landlord brings an
action against Tenant for default under this Lease, Landlord shall become
immediately entitled to receive from Tenant as Additional Rent the amount of all
such benefits and concessions allocable to the balance of the Lease term on a
pro rata basis, including, without limitation,
i) any amounts theretofore paid by Landlord to Tenant or to any
third party or any amounts credited to Tenant or to any third party, for or on
account of
a) any moving, tenant improvement, decorating or other
allowance or credit granted to Tenant,
b) any real estate commission paid on account of this
Lease,
c) any expenses or costs related to assumption by Landlord
of any other lease, plus
ii) Rent for any period for which this Lease provides any zero
or nominal Rent, including any period of early occupancy of the Premises prior
to the commencement of the Term of this Lease, plus
iii) The amount spent by Landlord for any tenant improvements to
the Premises.
(f) All rights, options and remedies of either party contained in this
Lease shall be construed and held to be cumulative, and no one of them shall be
exclusive of the other, and the parties shall have the right to pursue any one
or all of such remedies or any other remedy or relief which may be provided by
law, whether or not stated in this Lease. No waiver of any default of either
party hereunder shall be implied from any acceptance by the non-defaulting party
of any Rent or other payments due hereunder or any omission by the non-
defaulting party to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect defaults other than
as specified in said waiver. The consent or approval of Landlord to or of any
act by Tenant requiring Landlord's consent or approval shall not be deemed to
waive or render unnecessary Landlord's consent or approval to or of any
subsequent similar acts by Tenant.
(g) Landlord shall be in default under this Lease if Landlord fails to
make any payment required to be made by Landlord hereunder within ten (10) days
after written notice from Tenant that such payment is overdue. Landlord shall
also be in default in the performance of any non-monetary obligation required to
be performed by Landlord under the Lease if Landlord has failed to perform such
obligation within thirty (30) days after the receipt of notice from Tenant
specifying in detail Landlord's failure to perform; provided, however, that if
the nature of Landlord's obligation is such that more than thirty (30) calendar
days are required for its performance, then Landlord shall not be deemed in
default if it shall commence such performance within thirty (30) days and
thereafter diligently pursues the same to completion.
(h) Notwithstanding anything herein to the contrary, both Landlord and
Tenant shall have the obligation to take reasonable steps to mitigate their
damages caused by any default under this Lease.
(i) Except with respect to actions by Landlord to recover possession of
the Premises through an unlawful detainer or similar procedure, and except with
respect to emergency matters for which a restraining order or other similar
equitable relief is necessary, the parties agree to attempt to resolve any
disputes under this Lease as follows: both parties covenant to provide a person
authorized and empowered to resolve any dispute that may arise to meet face to
face with the person from the other party upon ten (10) days prior notice at a
mutually convenient place. Such persons shall negotiate in good faith to attempt
to resolve the dispute for as long as either party so desires and in
29
good faith believes progress can be made, but no party shall be obligated to
continue negotiations for longer than ten (10) days. Failing a resolution of the
dispute by this method, the parties shall submit to non-binding mediation of the
dispute with a mediator of their choice with experience in mediating commercial
disputes. Both parties shall pay an equal share of the fees of the mediator
prior to the commencement of the mediation. Otherwise the parties shall each pay
their own costs and expenses of such mediation. Failing resolution of the
dispute by this method, the parties shall resort to any other remedies provided
at law.
________________________________________________________________________________
19. SUBORDINATION, QUIET ENJOYMENT
________________________________________________________________________________
(a) Without the necessity of any additional document being executed by
Tenant for the purpose of effective subordination, and at the election of
Landlord or any mortgagee or beneficiary of a deed of trust with a lien on the
Building, Common Areas, or Land or any ground lessor (collectively referred to
in this Lease as "Mortgagee"), this Lease shall be subject and subordinate at
all times to:
i) All ground leases or underlying leases which may now exist
or hereafter be executed affecting the Building, Common Areas or the Land or
both; and
ii) The lien of any mortgage or deed of trust which may now
exist or hereafter be executed in any amount for which the Building, Common
Areas, Land, ground leases or underlying leases, or Landlord's interest or
estate in any of said items is specified as security (collectively referred to
as "Mortgages").
(b) Notwithstanding the foregoing, Landlord shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or Mortgages to this Lease.
(c) In the event that any ground lease or underlying lease terminates for
any reason or any Mortgage is foreclosed or a conveyance in lieu of foreclosure
is made for any reason, Tenant shall, notwithstanding any subordination, attorn
to and become the Tenant of the successor-in-interest to Landlord, at the option
of such successor-in-interest. Tenant covenants and agrees to execute and
deliver, upon demand by Landlord and in the form reasonably requested by
Landlord, any reasonable additional documents evidencing the priority of
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such Mortgage. Should Tenant fail to sign and return
any such documents within twenty (20) business days of such request, Tenant
shall, at Landlord's election, be in default under this Lease.
(d) The provisions of subsections (a) and (c) of this Section are
conditioned upon Landlord obtaining and delivering to Tenant a nondisturbance
agreement in which any Mortgagee currently or hereafter holding a Mortgage to
which this Lease is to be subordinate agrees to recognize this Lease upon
foreclosure, trustee's sale or deed in lieu thereof so long as Tenant is not in
default under this Lease; provided that, even if Landlord has not obtained such
a nondisturbance agreement, in the event of any such subordination of this Lease
by operation of law or otherwise, Tenant's possession of the Premises shall
remain undisturbed and Tenant's rights under this Lease shall be recognized and
shall not be adversely affected so long as Tenant is not in default under this
Lease, including upon any foreclosure, trustee's sale or deed in lieu thereof.
________________________________________________________________________________
20. ESTOPPEL CERTIFICATES
________________________________________________________________________________
Tenant shall, from time to time, upon written request of Landlord, execute,
acknowledge and deliver to Landlord or its designee a written statement stating:
the date this Lease was executed; the Term Commencement Date, as well as the
date of Term expiration; the date Tenant entered into occupancy of the Premises;
the amount of minimum monthly Rental and the date through which such Rental has
been paid; and certifying to the extent true: that this Lease is in full force
and effect and has not been assigned, modified, supplemented or amended in any
way (or specifying the date of the agreement so affecting this Lease); that this
Lease represents the entire agreement between the parties as to this leasing;
that all conditions under this Lease to be performed by Landlord have been
satisfied; that all required contributions by Landlord to Tenant on account of
Tenant's improvements have been received; that on this date there are no
existing defenses or offsets which the Tenant has against the enforcement of
this Lease by Landlord, and that not more than one month's Rental has been paid
in advance; and such other matters as Landlord may reasonably request. It
30
is intended that any such statement delivered pursuant to this paragraph may be
relied upon by a prospective purchaser of Landlord's interest or a mortgagee of
Landlord's interest or assignee of any mortgage upon Landlord's interest in the
Building. If Tenant shall fail to respond within ten (10) business 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, that
this Lease is in full force and effect, that there are no uncured defaults in
Landlord's performance, that the Security Deposit is as stated in this Lease,
and that not more than one month's Rental has been paid in advance.
________________________________________________________________________________
21. ATTORNEYS' FEES
________________________________________________________________________________
(a) Payment to Prevailing Party. If either party shall bring an action or
---------------------------
proceeding (including, without limitation, any cross-complaint, counterclaim or
third party claim) against any other party by reason of the breach or alleged
violation of any covenant, term or obligation hereof, or for the enforcement of
any provision hereof, or to interpret the Lease, or for any other claim
otherwise arising out of this Lease, the Prevailing Party (as defined below) in
such action or proceeding shall be entitled to its costs and expenses of suit,
including but not limited to reasonable attorneys' fees, which shall be payable
whether or not such action is prosecuted to judgment. "Prevailing Party" within
the meaning of this Section 21 shall include, without limitation, a party who
dismisses an action for recovery hereunder in exchange for payment of the sums
allegedly due, performance of covenants allegedly breached or consideration
substantially equal to the relief sought in the action.
(b) Attorneys' Fees in Third Party Litigation. If either party is
-----------------------------------------
required to initiate or defend any action or proceeding with a third party
(including, without limitation, any cross-complaint, counterclaim or third party
claim) because of the other party's breach of this Lease, or otherwise arising
out of this Lease, and such party is the Prevailing Party in such action or
proceeding, then the party so initiating or defending shall be entitled to
reasonable attorneys' fees from the other party.
(c) Scope of Fees. Attorneys' fees under this Section 21 shall include
-------------
attorneys' fees on any appeal, attorney fees on any confirmation of an
arbitration award or in enforcing any judgment on an arbitration award, and, in
addition, a party entitled to attorneys' fees shall be entitled to all other
reasonable costs and expenses occurred in connection with such action.
________________________________________________________________________________
22. LATE CHARGES
________________________________________________________________________________
Tenant acknowledges that a late payment of Rent or other sums due hereunder
will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which is difficult to ascertain. Such costs may include, but not be
limited to, processing and accounting charges, and penalties imposed by terms of
any contracts, mortgages or deeds of trust covering the Building. Therefore, in
the event Tenant should fail to pay any installment of Rent or any sum due
hereunder within five (5) days after written notice from Landlord that such
amount is due, then Tenant shall pay Landlord as Additional Rent, a late charge
equal to five percent (5%) of the amount owing. Notwithstanding the above,
nothing contained in this Section 22 shall be deemed to preclude Landlord from
exercising any other right or remedy Landlord may have under this Lease in law
or equity, in addition to or in lieu of the above late charges. Tenant shall
also pay Landlord an "NSF" fee of Fifty and No/100 Dollars ($50.00) for all
checks of Tenant returned for insufficient funds.
________________________________________________________________________________
23. NOTICES
________________________________________________________________________________
Any notice required or permitted to be given hereunder must be in writing
and may be given by personal delivery, overnight air courier or by mail, and if
given by mail shall be mailed by certified mail, return receipt requested,
addressed to Tenant or to Landlord at the addresses designated in subsection
1(h). Notice shall be deemed sufficiently given
(a) When tendered, if written notice is personally delivered; or
31
(b) On the date delivered (or on the date delivery is refused) if sent by
overnight air courier; or
(c) If mailed, forty-eight (48) hours after deposit of the above-described
certified mail with the United States Postal Service. Either party may specify
a different address for notice purposes by written notice to the other.
________________________________________________________________________________
24. HOLDING OVER
________________________________________________________________________________
Should Tenant continue to occupy the Premises after expiration or
termination of the Term or any renewal or renewals thereof with Landlord's
written consent, such tenancy shall be from month-to-month at a monthly Rent
equal to one hundred fifty percent (150%) of the Rent and Additional Rent paid
for the last month of the Term of this Lease and all other charges due hereunder
for each month or any part thereof of any such holdover period. In the event of
any unauthorized holding over by Tenant, Tenant shall indemnify Landlord against
all claims for damages by any other tenant to whom Landlord may have leased all
or any part of the Premises covered hereby effective upon termination of this
Lease.
________________________________________________________________________________
25. ALTERATIONS
________________________________________________________________________________
(a) Approval Process.
----------------
i) Interior Finishes or Structural Work. Tenant shall not make
------------------------------------
or cause to be made interior finish work (alterations, additions or
improvements) to the Premises or structural interior alterations (structural
interior alterations include but are not limited to alterations involving the
Building electrical, mechanical, plumbing, fire safety, life or other Building
systems), without the prior written approval of Landlord, which approval shall
not be unreasonably withheld, unreasonably conditioned or unreasonably delayed.
All contractors used by Tenant shall be licensed and bonded and approved by
Landlord in writing and in advance of any work. In addition, Tenant and
Tenant's contractor shall comply with the terms and conditions provided in the
Construction Rules and Regulations attached hereto as Exhibit "G." Tenant
-----------
shall provide Landlord with written notice of its intent to make changes at
least thirty (30) days prior to the start of any proposed work. Notice shall
include detailed information concerning the following items:
(a) General description of the changes to be made including
the description of any demolition work;
(b) List of proposed licensed and bonded contractors to do
the work (Tenant is required to select from Landlord's third-party contractors
for architectural, electrical, mechanical, fire or life safety systems work.);
all contractors shall provide Landlord with a certificate of insurance complying
with Landlord's insurance requirements prior to commencement of any work;
(c) Estimate of the cost of work;
(d) Intended work schedule including duration and
indicating whether the work will be accomplished during "normal Building hours"
or on an off-hours basis; and
(e) Plans and specifications for the work, including all
cabling and mechanical/electrical plans (unless work involves, e.g., decorating,
floorings, wall coverings, carpeting, painting, where plans and specifications
are not applicable).
Notwithstanding the above to the contrary, in the event any proposed
alterations are estimated by Landlord to cost in excess of $15,000.00, Landlord
shall have the right, in Landlord's sole discretion, to contract directly with
the approved contractor for the installation of the alterations. If Landlord
contracts directly with the approved contractor for the installation of the
alterations, (1) Tenant shall reimburse Landlord for the costs of installation,
as Additional Rent, within ten (10) days of Tenant's receipt of an invoice for
such costs and/or, at Landlord's election, Tenant shall deposit with Landlord
prior to the commencement of installation of the alterations up to one hundred
32
percent (100%) of the estimated costs of installation, which Landlord shall
apply toward such costs upon completion of the alterations, and (2) Tenant shall
pay Landlord a construction management fee equal to two percent (2%) of the
total cost of designing and installing the alterations, inclusive of taxes,
permit fees, design fees, and construction fees.
(b) Work at Tenant's Risk. Tenant shall complete any work done by Tenant
---------------------
pursuant to subsection 25(a) at Tenant's sole risk, cost and expense in
accordance with the Construction Rules and Regulations attached hereto as
Exhibit "G." Tenant shall keep the Premises, Building and Land free and clear
-----------
of liens of any kind. If any such liens are filed, Tenant shall have thirty
(30) days (or ten (10) days if Landlord is in the process of refinancing) from
the receipt of notice from Landlord informing Tenant of such filing to either
remove such liens or to provide a bond in the amount of one hundred fifty
percent (150%) of the lien claim indemnifying Landlord as security for the
removal or certification thereof. At Landlord's option, Landlord may reasonably
require a lien search on the Land at Tenant's cost and expense. Tenant
covenants and agrees that all work done shall comply with the requirements of
all governmental agencies, offices and boards having jurisdiction over the
Premises. Further, Tenant shall provide to Landlord, within thirty (30) days of
completion of any work, copies of all as-builts and plans and specifications
(including all cabling and electrical plans), as applicable. Tenant agrees to
hold harmless and indemnify Landlord in the event of any breach of Tenant's
obligations.
(c) Title to Property. Landlord shall notify Tenant in writing prior to
-----------------
the commencement of any improvements under this Section 25 if Tenant will be
required to remove such additions, alterations or improvements at the end of the
Lease term and restore the Premises to the same condition it was in prior to
such installation, reasonable wear and tear and damage by Landlord, casualty or
condemnation excepted. Notwithstanding the foregoing sentence, Tenant shall be
obligated to remove, at Tenant's cost, all cabling within the Premises, and to
restore the Premises to the condition it was in prior to the installation of
such cabling, reasonable wear and tear excepted. At the expiration or earlier
termination of this Lease, all alterations, additions or improvements made by
Tenant after the Commencement Date shall, at Tenant's option (unless otherwise
required by Landlord) either be removed and the Premises returned to their
original configuration (normal, reasonable wear and tear and damage due to or
caused by fire or other casualty, condemnation or Landlord excepted), or shall
become the property of Landlord, free and clear of liens, claims and
encumbrances, to remain upon and be surrendered with the Premises.
Notwithstanding anything to the contrary herein, all movable partitions,
business and trade fixtures, machinery and equipment, communications equipment
and office equipment affixed to or located within the Premises, which can be
removed without damage to the Building, shall remain the property of Tenant;
provided, Tenant shall promptly repair any damage to the Premises and Building
upon their removal. Furniture, furnishings and other articles of personal
property owned by Tenant and located in the Premises shall be and remain the
property of Tenant and may be removed by Tenant at any time during the Term and
any extensions thereof.
All alterations to the Premises with or without Landlord's written approval
shall be made in accordance with Landlord's Construction Rules and Regulations
attached hereto as Exhibit "G." Landlord reserves the right to modify such
----------
rules and regulations as Landlord determines in its sole discretion; provided
such modifications are reasonable and do not discriminate against any tenant of
the Building.
________________________________________________________________________________
26. RENT TAX
________________________________________________________________________________
If, during the Term of this Lease, any tax be imposed upon the privilege of
renting the space leased hereunder or upon the amount of Rentals collected
therefore, Tenant will pay as Additional Rent each month a sum equal to such tax
or charge that is so imposed, but nothing herein shall be taken to require
Tenant to pay any federal income tax imposed upon Landlord.
________________________________________________________________________________
27. PRIOR AGREEMENT, AMENDMENTS
________________________________________________________________________________
Neither party hereto has made any representations or promises except as
contained herein or in some further writing signed by the party making such
representation or promises. No agreement hereinafter made shall be effective to
change, modify, discharge or effect an abandonment of this Lease, in whole or in
part, unless such agreement is in
33
writing and signed by or on behalf of the party against whom enforcement of the
change, modification, discharge or abandonment is sought.
--------------------------------------------------------------------------------
28. PERSONAL PROPERTY TAXES
--------------------------------------------------------------------------------
Tenant shall pay, or cause to be paid, before delinquency, any and all
taxes levied or assessed which become payable during the term hereof upon all
Tenant's Tenant Improvements, equipment, furniture, fixtures and personal
property located in the Premises; except that which has been paid for by
Landlord and is standard in the Building. In the event any of the Tenant's
Tenant Improvements, equipment, furniture, fixtures and personal property shall
be assessed and taxed with the Building, Tenant shall pay to Landlord its share
of such taxes within thirty (30) days after delivery to Tenant by Landlord of a
statement in writing setting forth the amount of such taxes applicable to
Tenant's property; provided, however, Tenant shall have the right to contest
such taxes at Tenant's sole cost and expense and, if requested by Tenant,
Landlord shall pay such taxes under protest to preserve Tenant's rights to
contest them.
--------------------------------------------------------------------------------
29. SUCCESSORS
--------------------------------------------------------------------------------
All of the covenants, agreements, terms and conditions contained in this
Lease shall apply to and be binding upon Landlord and Tenant and their
respective heirs, executors, administrators, legal representatives, successors
and assigns and upon any person or persons coming into ownership or possession
of any interest in the Premises by operation of law or otherwise.
--------------------------------------------------------------------------------
30. RIGHT TO PERFORM
--------------------------------------------------------------------------------
If Tenant shall fail to pay any sum of money, other than Basic Rent and
Additional Rent required to be paid by it hereunder, or shall fail to perform
hereunder, and such failure shall continue for ten (10) business days after
written 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 any 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
nonpayment of sums due under this Section 30 as in the case of default by Tenant
in the payment of Rent.
--------------------------------------------------------------------------------
31. FORCE MAJEURE
--------------------------------------------------------------------------------
Whenever performance is required of either party hereunder, that party
shall use all due diligence to perform and shall take all necessary measures in
good faith to perform; provided, however, that , except with respect to Tenant's
obligation to pay Rent or any other charges due under this Lease, if completion
of performance shall be delayed at any time by reason of acts of God, war, civil
commotion, riots, strikes, picketing, or other labor disputes, governmental
actions, Landlord's inability to obtain permits or other governmental approvals,
inability to obtain materials, or damage to work in progress by reason of fire
or other casualty, or other cause beyond the reasonable control of said party
(except to the extent of such party's negligence), then the time for performance
as herein specified shall be appropriately extended by the amount of the delay
actually so caused. The provisions of this Section 31 shall not apply to a
damage or destruction covered by Section 11 (Damage or Destruction).
--------------------------------------------------------------------------------
32. LIMITATION ON LIABILITY
--------------------------------------------------------------------------------
In consideration of the benefits accruing hereunder, Tenant and all
successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord:
(a) The sole and exclusive remedy shall be against Landlord's interest in
the Building and all proceeds therefrom;
34
(b) No general or limited partner of any partnerships who have any
interest in the property, or member or manager of Landlord shall be sued or
named as a party in any suit or action (except as may be necessary to secure
jurisdiction of the partnership or limited liability company);
(c) No service of process shall be made against any general or limited
partner of any partnerships who have any interest in the property, or member or
manager of Landlord (except as may be necessary to secure jurisdiction of the
partnership or limited liability company);
(d) No general or limited partner of any partnerships who have any
interest in the property, or member or manager of Landlord shall be required to
answer or otherwise plead to any service or process;
(e) No judgment will be taken against any general or limited partner of
any partnerships who have any interest in the property, or member or manager of
Landlord;
(f) Any judgment taken against any general or limited partner of any
partnerships who have any interest in the property, or member or manager of
Landlord may be vacated and set aside at any time nunc pro tunc;
(g) No writ of execution will ever be levied against the asset of any
general or limited partner of any partnerships who have any interest in the
property, or member or manager of Landlord; and
(h) These covenants and agreements are enforceable both by Landlord and
also by any partner of any partnerships who have any interest in the property,
or member or manager of Landlord.
--------------------------------------------------------------------------------
33. Intentionally Omitted.
--------------------------------------------------------------------------------
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34. MISCELLANEOUS
--------------------------------------------------------------------------------
(a) Accord and Satisfaction. No payment by Tenant or receipt by Landlord
-----------------------
of a lesser amount than any installment or payment of the Rent due shall be
deemed to be other than on account of the amount due, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment as
Rent be deemed an accord and satisfaction. Landlord's right to recover the
balance of such Rent or any installment, or to pursue any other remedy provided
in this Lease, shall be unaffected by said payment, endorsement or statement.
Landlord reserves the right, in the absence of instructions to the contrary, to
apply payment received from Tenant in whatever manner Landlord chooses.
(b) Authority.
---------
i) Tenant. If Tenant is a corporation, each individual executing
------
this Lease on behalf of said corporation represents and warrants that she/he is
duly authorized to execute and deliver this Lease on behalf of said corporation
in accordance with a duly adopted resolution of the Board of Directors of said
corporation in accordance with the Bylaws of said corporation, and that this
Lease is binding upon said corporation in accordance with its terms.
Concurrently with the execution of this Lease, Tenant shall deliver to Landlord
a certified copy of a resolution of the Board of Directors of said corporation
authorizing the execution of this Lease. If Tenant is a partnership, each
individual executing this Lease on behalf of said partnership represents and
warrants that she/he is duly authorized to execute and deliver this Lease on
behalf of said partnership and that this Lease is binding upon said partnership
in accordance with its terms, and concurrently with execution of this Lease,
Tenant shall deliver to Landlord such evidence of authorization as Landlord may
require. If Tenant is a marital community, or a member of a marital community,
both members of the marital community shall execute this Lease, or concurrently
with execution of this Lease, Tenant shall deliver to Landlord such evidence as
Landlord may require that the member signing this Lease has the authority to
sign on behalf of the marital community or, with Landlord's prior written
consent, that Tenant's interest in this Lease is to be the separate estate of
the signing member.
35
ii) Landlord. The individual executing on behalf of Landlord
--------
represents and warrants that she/he is duly authorized to execute and deliver
this Lease on behalf of Landlord and that this Lease is binding upon said
Landlord.
(c) Brokerage Commissions. Tenant represents and warrants to Landlord
---------------------
that it has not engaged any broker, finder or other person who would be entitled
to any commission or fees in respect to the negotiation, execution or delivery
of this Lease with the exception of Tenant's broker identified in subsection
1(f). Tenant shall indemnify and hold harmless Landlord against any loss, cost,
liability or expense, including reasonable attorneys' fees and costs, incurred
by Landlord as a result of any claim asserted by any broker, finder or other
person, except Tenant's broker identified in subsection 1(f), on the basis of
any arrangement or agreements made or alleged to have been made by or on behalf
of Tenant. The provisions of this subsection 34(c) shall not apply to brokers
with whom Landlord has an express written brokerage agreement.
(d) Intentionally omitted.
(e) Captions. The captions of the paragraphs in this Lease are inserted
--------
and included solely for convenience and shall never be considered or given any
effect in construing or interpreting the provisions hereof if any question of
intent should arise.
(f) Construction. This Lease shall be construed in accordance with the
------------
laws of the State of Washington.
(g) Definition of "Landlord". The term "Landlord", as used in this Lease,
-----------------------
so far as covenants or obligations on the part of Landlord are concerned, shall
be limited to mean and include only the owner or owners, at the time in
question, of the fee title of the Premises or the lessees under any master
lease, if any. In the event of any transfer, assignment or other conveyance or
transfers of any such title, Landlord herein named (and in case of any
subsequent transfers or conveyances, the then grantor) shall be automatically
freed and relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed, provided that the transferee of such title assumes and agrees to
observe and perform any and all obligations and liabilities of Landlord
hereunder, during its ownership of the Premises. Landlord may transfer its
interest in the Premises without the consent of the Tenant and such transfer or
subsequent transfer shall not be deemed a violation on Landlord's part of any of
the terms and conditions of this Lease.
(h) Definition of "Tenant". The word "Tenant", wherever used in this
---------------------
Lease, shall be construed to mean tenants in all cases where there is more than
one tenant, and the necessary grammatical changes required to make the
provisions hereof apply to corporations, partnerships or individuals, men or
women, shall in all cases be assumed as though in each case fully expressed.
Each provision hereof shall extend to and shall, as the case may require,
obligate or inure to the benefit of Landlord and Tenant and their respective
agents and employees.
(i) Examination of Lease. Submission of this instrument for examination
--------------------
or signature by Tenant does not constitute a reservation of or option of Lease,
and it is not effective as a Lease or otherwise until execution by and delivery
to both Landlord and Tenant.
(j) Exhibits. All exhibits attached to this Lease are incorporated herein
--------
by reference.
(k) Light and Air. This Lease does not grant any right of access to
-------------
light, air, or view, over the property, and Landlord shall not be liable for any
diminution of such light, air, or view by an adjacent structure and/or
vegetation. Tenant agrees and covenants that no diminution of light, air or
view by any structure which may hereafter be erected shall entitle Tenant to any
reduction in Basic or Additional Rent under this Lease, result in any liability
or obligation of Landlord to Tenant, or in any way affect this Lease or Tenant's
obligations hereunder.
36
(l) Merger. This Lease supersedes any and all other agreements, either
------
oral or in writing between the parties hereto with respect to the Premises and
contains all of the covenants, agreements and other obligations between the
parties with respect to the Premises.
(m) Name. Tenant shall not, without the written consent of Landlord,
----
which consent shall not be unreasonably withheld, unreasonably conditioned, or
unreasonably delayed, use the name of the Building for any purpose other than as
the address of the business to be conducted by Tenant in the Premises, and in no
event shall Tenant acquire any rights in or to such names.
(n) Parking. Tenant shall have the right to the non-exclusive,
-------
non-specific use of four (4) parking stalls per 1,000 Usable Square Feet of
space in the Premises, as the Premises may be expanded as provided herein, which
parking stalls shall be located in the parking garage under the Building. The
initial parking rates shall be Fifty-five Dollars ($55) per parking stall per
month, which rate shall remain fixed for the first twenty-four (24) months of
the Term. From the twenty-fifth (25th) month of the Term through the end of
the Term, as the same may be extended, the monthly rate for such parking stalls
shall be the market rate for underground parking stalls in buildings located in
the Bellevue I-90 corridor; provided that such rate shall be adjusted no more
than one time each year during such period. Such parking shall be subject to
such reasonable rules, regulations, and codes as may from time to time be
established by Landlord and/or governing authorities. If a parking
administration program needs to be implemented at the Building, Tenant and
Landlord agree to cooperate in the program implementation and Tenant
acknowledges that Landlord costs associated with the program will be borne by
Tenant on a pro rata basis as an Operating Cost.
(o) Partial Invalidity. If any term, covenant or condition of this Lease
------------------
is held invalid or unenforceable, the validity and enforceability of the Lease
shall not be affected thereby; all remaining terms, covenants or conditions of
this Lease shall be valid and be enforceable to the fullest extent of the law.
(p) Recording. Neither Landlord nor Tenant shall record this Lease.
----------
Simultaneously with the signing of this Lease and upon the request of either
party thereafter , the parties shall execute and cause to be properly recorded a
short form memorandum of this Lease, with the cost of recording to be paid by
the party requesting it.
(q) Severability. Any provision of this Lease which shall prove to be
------------
invalid, void or illegal in no way affects, impairs, or invalidates any other
provision hereof, and such other provisions shall remain in full force and
effect.
(r) Signage. Tenant shall have the right to install one exterior, lighted
-------
sign with Tenant's name on the Building facing I-90 at its sole cost, subject to
Landlord's prior approval of the design and location, which shall not be
unreasonably withheld, unreasonably conditioned, or unreasonably delayed, and
subject to all applicable codes, ordinances, and regulations of the City of
Bellevue. Unless required by the City of Bellevue, Landlord will not require
the size of the exterior sign to be smaller than the existing "VoiceStream"
building sign. Additionally, Landlord shall provide Tenant with one (1)
directory and one (1) interior building sign at Landlord's cost. Tenant's
rights under this section shall be personal to Tenant and any Permitted
Assignee, and no other party shall be entitled to the sign rights granted to
Tenant hereunder.
(s) Time. Time is of the essence of this Lease with respect to the
----
performance of every provision of this Lease in which time or performance is a
factor.
(t) Transportation Management Program. Tenant shall cooperate, to the
---------------------------------
extent reasonable, with Landlord in meeting the objectives and complying with
the terms and conditions of any transportation management plan applicable to the
Building or Newport Corporate Center. 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 Park.
(u) Waivers. The waiver by Landlord of any breach of any term, covenant
--------
or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or condition herein
contained, nor shall any custom or practice which may grow up between the
parties in the
37
administration of the terms hereof be deemed a waiver of or in any way affect
the right of Landlord to insist upon the performance by Tenant in strict
accordance with said terms. The subsequent acceptance of Rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, other than the failure of Tenant
to pay the particular Rent so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Rent.
(v) Communications Equipment. Subject to Landlord and Tenant agreeing on
------------------------
a reasonably monthly fee for the use thereof, Tenant, at its sole cost and
expense, shall have the non-exclusive right (it being understood that Landlord
may grant, extend or renew similar rights to others provided that the exercise
of any rights which are granted after Tenant has installed its Dish do not
interfere with the rights granted to Tenant hereunder) to install, maintain, and
from time to time replace certain satellite dishes, PCS antennas and related
equipment (collectively, a "Dish") on the roof of the Building, provided that
prior to commencing any installation or maintenance, Tenant shall (i) obtain
Landlord's prior approval of the proposed size, weight and location of the Dish
and method for fastening the Dish to the roof, (ii) such installation and/or
replacement shall comply strictly with all laws and the conditions of any bond
or warranty maintained by Landlord on the roof, (iii) use the Dish solely for
its non-revenue producing use, and (iv) obtain, at Tenant's sole cost and
expense, any necessary federal, state, and municipal permits, licenses and
approvals, and deliver copies thereof to Landlord. Landlord may supervise or
perform any roof penetration related to the installation of a Dish, and Landlord
may charge the reasonable, out-of-pocket cost thereof to Tenant. Tenant agrees
that all installation, construction and maintenance shall be performed in a
neat, responsible, and workmanlike manner, using generally acceptable
construction standards, consistent with such reasonable requirements as shall be
imposed by Landlord. Tenant further agrees to label each cable or wire placed by
Tenant in the telecommunications pathways of the Building, with identification
information as required by Landlord. Tenant shall repair any damage to the
Building caused by Tenant's installation, maintenance, replacement, use or
removal of the Dish. The Dish shall remain the property of Tenant, and Tenant
may remove the Dish at its cost at any time during the Term. Tenant shall
remove the Dish at Tenant's cost and expense upon the expiration or termination
of this Lease. Tenant agrees that the Dish, and any wires, cables or
connections relating thereto, and the installation, maintenance and operation
thereof shall in no way interfere with the use and enjoyment of the Building, or
the operation of communications (including, without limitation, other satellite
dishes) or computer devices by Landlord or by other tenants or occupants of the
Newport Corporate Center. If such interference shall occur, Landlord shall give
Tenant written notice thereof and Tenant shall correct the same within twenty-
four (24) hours of receipt of such notice. Landlord reserves the right to
disconnect power to any Dish if Tenant fails to correct such interference within
twenty-four (24) hours after such notice. Landlord makes no warranty or
representation that the Building or any portions thereof are suitable for the
use of a Dish, it being assumed that Tenant has satisfied itself thereof.
Tenant shall protect, defend, indemnify and hold harmless Landlord from and
against claims, damages, liabilities, costs and expenses of every kind and
nature, including reasonable attorneys' fees, incurred by or asserted against
Landlord arising out of Tenant's installation, maintenance, replacement, use or
removal of the Dish.
(w) Data Center and Power Supply. Tenant shall have the right to install
----------------------------
and construct a data center in the Premises to be located within the "Lab Room"
identified on Exhibit "A". Electricity to the data center shall be separately
metered and Tenant shall pay all electricity costs in connection therewith. In
connection with such data center, Tenant shall have the right to construct and
install in the Building parking garage (or such other location as Landlord and
Tenant may mutually agree upon) an uninterrupted power supply. Tenant's
installation and construction of said data center and uninterrupted power supply
shall be in accordance with Section 25 hereof.
--------------------------------------------------------------------------------
35. HAZARDOUS MATERIALS
--------------------------------------------------------------------------------
(a) "Hazardous Material" means any substance, waste or material which is
deemed hazardous, toxic, a pollutant or a contaminate, under any federal, state,
or local statute, law, ordinance, rule regulation, or judicial or administrative
order or decision, now or hereafter in effect.
(b) Tenant shall not cause or permit any Hazardous Material to be brought
upon, kept or used in or about the Premises, Building and/or Land by Tenant, its
agents, employees, contractors, or invitees without the prior written consent of
Landlord. In order to obtain Landlord's consent, Tenant must demonstrate to
Landlord's reasonable satisfaction that such Hazardous Material is necessary or
useful to Tenant's business and will be used, kept, stored and
38
disposed of in a manner that complies with all laws regulating any such
Hazardous Material so brought upon or used or kept in or about the Premises.
Provided, Tenant shall not be in violation of the foregoing by its use and
storage of standard office products, otherwise defined as hazardous, which
products are used by Tenant with due care and in accordance with the
instructions of the product manufacturer, in the reasonable and prudent conduct
of Tenant's business on the Premises, Building and/or Real Property.
(c) Tenant shall be liable to Landlord for any and all clean-up costs and
any and all other charges, fees, and penalties imposed by any governmental
authority with respect to Tenant's use, disposal, transportation, generation
and/or sale of hazardous materials or other waste materials in or about the
Property. Tenant shall indemnify, defend and save Landlord harmless from any
and all costs, fees, penalties and charges assessed against or imposed upon
Landlord as a result of Tenant's use, disposal, transportation, generation
and/or sale of hazardous substances or other waste materials.
(d) Landlord represents and warrants that, to the best of Landlord's
knowledge, (1) no Hazardous Materials have been dumped, stored or manufactured
on or are now being dumped, stored or manufactured on the Premises, Building or
Land, and (2) there currently exists no environmental liability relating to any
environmental contamination on the Premises, Building or Land. Landlord shall
indemnify, defend and save Tenant harmless from any and all costs, fees,
penalties and charges assessed against or imposed upon Tenant as a result of
Landlord's use, disposal, transportation, generation and/or sale of hazardous
substances or other waste materials.
--------------------------------------------------------------------------------
36. RIDERS
--------------------------------------------------------------------------------
Clauses, plats and riders, if any, signed by Landlord or Tenant and affixed
to this Lease are a part hereof.
IN WITNESS WHEREOF, the respective parties hereto have executed this Lease
or caused this Lease to be executed by their duly authorized representatives the
day and year first hereon written.
LANDLORD TENANT
Bentall Newport Centre L.L.C., a Mercata, Inc., a
Washington limited liability company Delaware corporation
By: Bentall U.S. L.L.C., a
Washington limited liability company
its Manager
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇ ▇▇▇▇
----------------------------------------- -----------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: ▇▇▇ ▇▇▇ ▇▇▇▇
Its: Chief Operating Officer Its: President and Chief Executive Officer
/s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇
Its: Director of Leasing
39
--------------------------------------------------------------------------------
Landlord's Acknowledgment
--------------------------------------------------------------------------------
STATE OF WASHINGTON )
)
COUNTY OF KING )
On this 22nd day of February, 2000, before me, a Notary Public in and
for the State of Washington, personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇ ▇. ▇▇▇▇ to me known to be the Chief Operating Officer and Director of
Leasing, respectively, of Bentall U.S. L.L.C., a Washington limited liability
company, the Manager of Bentall Newport Centre L.L.C., a Washington limited
liability company, the limited liability company that executed the within and
foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said limited liability company, for the uses and
purposes therein mentioned, and on oath stated that they were authorized to
execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
NOTARY PUBLIC in and for the State of Washington,
residing at: Seattle
-------------------------------------
My commission expires: 7-23-03
40
--------------------------------------------------------------------------------
Mercata, Inc.'s Acknowledgment
--------------------------------------------------------------------------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 18th day of February, 1999, before me the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared ▇▇▇ ▇▇▇ ▇▇▇▇, to me known to be the President and Chief
Executive Officer of Mercata, Inc., a Delaware corporation, the entity that
executed the foregoing instrument, and acknowledged the same instrument to be
the free and voluntary act and deed of Mercata, Inc. for the uses and purposes
therein mentioned, and on oath stated that they are authorized to execute said
instrument.
IN WITNESS WHEREOF my hand and official seal hereto affixed the day and
year in this instrument above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
[SEAL] Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
NOTARY PUBLIC in and for the State of Washington,
residing at Fall City
-------------------------------------
My commission expires: 5-26-02
--------------------------
41
--------------------------------------------------------------------------------
EXHIBIT "A"
FLOOR PLAN OF PREMISES
(Show existing Lab Room)
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
Exhibit A
42
[Architect's Rendering of Second
Floor Plan of One Newport]
--------------------------------------------------------------------------------
EXHIBIT "A-1"
FLOOR PLAN OF EXPANSION SPACE
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
Exhibit A
43
[Architect's Rendering of First
Floor Plan of One Newport]
--------------------------------------------------------------------------------
EXHIBIT "B"
LEGAL DESCRIPTION OF LAND
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
ONE NEWPORT
-----------
▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ACCORDING TO THE SHORT PLAT RECORDED UNDER KING
COUNTY RECORDING NO. 8809220297;
TOGETHER WITH EASEMENTS FOR INGRESS, EGRESS AND PARKING OVER COMMON AREAS AS
DESCRIBED IN INSTRUMENT RECORDED UNDER KING COUNTY RECORDING NO. 9012040117;
AND TOGETHER WITH THOSE EASEMENT RIGHTS AS DESCRIBED IN INSTRUMENTS RECORDED
UNDER KING COUNTY RECORDING NOS. 9102120210, 9102130456 AND ▇▇▇▇▇▇▇▇▇▇;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ OF WASHINGTON.
44
--------------------------------------------------------------------------------
EXHIBIT "B-1"
LEGAL DESCRIPTION OF NEWPORT CORPORATE CENTER
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
ONE NEWPORT
-----------
▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ACCORDING TO THE SHORT PLAT RECORDED UNDER KING
COUNTY RECORDING NO. 8809220297;
TOGETHER WITH EASEMENTS FOR INGRESS, EGRESS AND PARKING OVER COMMON AREAS AS
DESCRIBED IN INSTRUMENT RECORDED UNDER KING COUNTY RECORDING NO. 9012040117;
AND TOGETHER WITH THOSE EASEMENT RIGHTS AS DESCRIBED IN INSTRUMENTS RECORDED
UNDER KING COUNTY RECORDING NOS. 9102120210, 9102130456 AND ▇▇▇▇▇▇▇▇▇▇;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ OF WASHINGTON.
TWO NEWPORT
-----------
▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ACCORDING TO THE SHORT PLAT RECORDED
UNDER KING COUNTY RECORDING NO. 8112079004, BEING A REVISION OF SHORT PLATS
RECORDED UNDER RECORDING NO. 8101270743 AND 7809200912;
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND UTILITIES, 30 FEET IN WIDTH
DESCRIBED AS EASEMENT "X" AS DELINEATED ON SHORT PLAT NO. 278125 REVISION,
RECORDED UNDER RECORDING NO. 8112079004;
AND TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND UTILITIES, 30 FEET IN
WIDTH DESCRIBED AS EASEMENT "Y" AS DELINEATED ON SHORT PLAT NO. 278125 REVISION,
RECORDED UNDER RECORDING NO. 8112079004;
AND TOGETHER WITH ACCESS EASEMENTS AS DESCRIBED IN PARAGRAPH 1.1 AND EXHIBITS
"E" AND "F" OF DECLARATION RECORDED UNDER KING COUNTY RECORDING NO. 9102130456;
AND TOGETHER WITH THOSE EASEMENT RIGHTS GRANTED IN DOCUMENTS RECORDED UNDER
RECORDING NOS. 9012040117 AND ▇▇▇▇▇▇▇▇▇▇;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇.
NEWPORT TOWER
-------------
▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ACCORDING TO THE SHORT PLAT RECORDED UNDER KING
COUNTY RECORDING NO. 8809220297;
45
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND UTILITIES OVER, ACROSS AND
THROUGH TRACTS "X" AND "Y" OF SHORT PLAT NO. 278125, ACCORDING TO THE SHORT PLAT
RECORDED UNDER KING COUNTY RECORDING NO. 7809200912 AND REVISED UNDER RECORDING
NOS. 8101270743 AND 8112079004;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇.
NEWPORT HEIGHTS
---------------
▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇-▇▇, ACCORDING TO THE SHORT PLAT RECORDED UNDER KING
COUNTY RECORDING NO. 8407179002;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ OF WASHINGTON.
NEWPORT TERRACE
---------------
▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ACCORDING TO THE SHORT PLAT RECORDED UNDER KING
COUNTY RECORDING NO. 8809220297;
TOGETHER WITH A PORTION OF ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ACCORDING TO THE
SHORT PLAT RECORDED UNDER KING COUNTY RECORDING NO. 8809220297 BEING A REVISION
OF SHORT PLAT RECORDED UNDER RECORDING NO. 8809200141 AND DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHERLY MOST NORTHEAST CORNER OF SAID LOT 4;
THENCE SOUTH 01 degrees 26'03" WEST 96.00 FEET;
THENCE NORTH 89 degrees 00'20" WEST 194.90 FEET;
THENCE NORTH 01 degrees 23'24" EAST 97.34 FEET;
THENCE SOUTH 88 degrees 36'36" EAST 194.97 FEET TO THE TRUE POINT OF BEGINNING;
ALSO TOGETHER WITH A PORTION OF ▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ACCORDING
TO THE SHORT PLAT RECORDED UNDER KING COUNTY RECORDING NO. 8112079004 (VOLUME 29
OF SURVEYS, PAGE 299) BEING A REVISION OF SHORT PLATS RECORDED UNDER RECORDING
NOS. 8101270743 AND 7809200912 DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 2;
THENCE SOUTH 01 degrees 23'24" WEST 200.46 FEET;
THENCE SOUTH 88 degrees 36'36" EAST 28.00 FEET TO A POINT ON THE EAST LINE OF
SAID ▇▇▇ ▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇;
THENCE SOUTH 01 degrees 23'24" WEST 268.35 FEET;
THENCE NORTH 89 degrees 00'20" WEST 15.05 FEET;
THENCE NORTH 01 degrees 23'24" EAST 268.45 FEET;
THENCE SOUTH 88 degrees 36'36" EAST 15.05 FEET TO THE TRUE POINT OF BEGINNING;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ OF WASHINGTON.
FOUR NEWPORT
------------
▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ACCORDING TO THE SHORT PLAT RECORDED UNDER KING
COUNTY RECORDING NO. 8809220297, BEING A REVISION OF SHORT PLAT RECORDED UNDER
KING COUNTY RECORDING NO. 8809200141;
Exhibit "B-1"
46
EXCEPT THAT PORTION THEREOF DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHERLY MOST NORTHEAST CORNER OF SAID LOT 4;
THENCE SOUTH 01 degrees 26' 03" WEST 96.00 FEET;
THENCE NORTH 89 degrees 00' 20" WEST 194.90 FEET;
THENCE NORTH 01 degrees 23' 24" EAST 97.34 FEET;
THENCE SOUTH 88 degrees 36' 36" EAST 194.97 FEET TO THE POINT OF BEGINNING;
(BEING KNOWN AS ▇▇▇ ▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇, RECORDED
UNDER RECORDING NO. 9105200930.)
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇.
Exhibit "B-1"
47
--------------------------------------------------------------------------------
EXHIBIT "C"
WORK LETTER AGREEMENT
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
This Work Letter Agreement is entered into upon the date this Lease is fully
executed by and between Landlord and Tenant.
RECITALS
A. Concurrently with the execution of this Work Letter Agreement,
Landlord and Tenant have entered into a lease (the "Lease") covering certain
premises (the "Premises") more particularly described in the Lease.
B. In order to induce Tenant to enter into the Lease (which is hereby
incorporated by reference to the extent that the provisions of this Work Letter
Agreement may apply thereto) and in consideration of the mutual covenants herein
after contained, Landlord and Tenant hereby agree:
1. Space Plan and Related Requirements.
-----------------------------------
(a) Landlord and Tenant have agreed upon standard Building
specifications (the "Uniform Building Specifications") for the tenant
improvements to be constructed in the Premises. The Uniform Building
Specifications are attached hereto as Exhibit "C-2". On or before February 25,
------------
2000, Tenant shall submit to Landlord for its review and approval a proposed,
preliminary space plan (the "Space Plan") for the Tenant Improvements to be
constructed on the Third Floor showing the location of demising walls,
partitions, doors, electrical devices, communication devices and indicating in
general, the improvements to be done in Premises pursuant to this Work Letter
Agreement (which improvements are hereafter referred to as the "Tenant
Improvements"). The Preliminary Space Plan shall be attached to this Lease as
"Exhibit C-1". Tenant shall submit a preliminary Space Plan for the Second
-----------
Floor on or before a date which is three (3) months prior to the Second Floor
Delivery Date. Tenant shall submit a preliminary Space Plan for the Expansion
Space on or before a date which is three (3) months prior to the Expansion Space
Availability Date. The term "Tenant Improvements" shall include the tenant
improvements to be installed in the Second Floor and Expansion Space.
(b) Within seven (7) calendar days following the date Tenant submits
the preliminary Space Plan to Landlord, Tenant shall approve the preliminary
Space Plan and shall furnish to Landlord any final adjustments to the
preliminary Space Plan, including final location of partitions, doors, ceiling
devices, and final specifications for materials and finishes, electrical
devices, electrical loads, heat loads, extraordinary floor loads, special
equipment and all other requirements (all of which must be in conformance with
the Uniform Building Specifications). Final adjustments to the preliminary
Space Plan shall not materially change the defined scope of the Tenant
Improvements set forth in Exhibit "C-1" attached hereto. Any increases in cost
------------
due to Tenant's changes not covered by the Tenant Improvement Allowance shall be
paid for by Tenant as Additional Rent. Tenant agrees to meet and cooperate with
Landlord's architects and engineers and provide complete information as
requested. Landlord shall be entitled, in all respects, to rely upon
information so supplied by Tenant's Representative (defined below). If Tenant
does not provide Landlord with any adjustments to the preliminary Space Plan
within the seven (7) day period referenced above, the preliminary Space Plan
attached hereto as Exhibit "C-1" shall be the final Space Plan.
------------
(c) All space plans and related requirements referred to herein above
shall be subject to Landlord's prior approval, which approval shall not be
unreasonably withheld, unreasonably conditioned or unreasonably delayed, except
to the extent there are variations from the Uniform Building Specifications, in
which case Landlord may withhold its approval in Landlord's sole discretion.
48
(d) Tenant shall be allowed up to a maximum of three (3) adjustments
to the preliminary Space Plan. Any adjustments beyond the first three (3) shall
be at Tenant's sole cost and expense.
(e) Landlord appoints ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("Landlord's Representative") to
act for Landlord in all matters associated with this Work Letter Agreement.
Tenant appoints ▇▇▇▇▇▇ ▇▇▇▇▇ of TenantWorks ("Tenant's Representative") to act
for Tenant in all matters associated with this Work Letter Agreement. All
inquiries, requests, instructions, authorizations and other communications with
respect to the matters covered by this Work Letter Agreement will be made to
Landlord's Representative or Tenant's Representative, as the case may be.
Neither party will make any inquiries of or requests to, and neither party will
give any instructions or authorizations to, any employee or agent of the other
party, including without limitation Tenant's architect, engineers and
contractors working at the Building, or any of their agents or employees, with
regard to matters associated with this Work Letter Agreement without providing
notice of the same to the respective Landlord's Representative or Tenant's
Representative. Either party may change its Representative at any time by
providing three (3) days' prior written notice to the other party of the name,
address, and contact numbers of the new Representative.
2. Work Schedule.
-------------
Provided Tenant does not delay in providing any final adjustments to
the Space Plan within the time period described in subsection 1(b) above, then
within ten (10) business days following the date Landlord receives the Space
Plan with any final adjustments, Landlord shall provide Tenant with a
preliminary work schedule (the "Preliminary Work Schedule") setting forth the
various items of work and duration of each task.
3. Construction Drawings and Specifications.
----------------------------------------
(a) Within five (5) business days of Tenant's approval of the final
Space Plan, Tenant shall cause its architects and engineers to prepare the
initial set of construction drawings and specifications (the "Construction
Drawings") detailing the complete scope of the Tenant Improvements (the "Work")
based on the approved Space Plan. The Construction Drawings shall include
architectural, structural, plumbing, mechanical, electrical, and fire protection
drawings as required and shall be prepared by duly licensed or registered
architects as required by regulatory agencies, and shall utilize the Uniform
Building Specifications. Any additional drawings or revisions shall be at
Tenant's sole cost and expense.
(b) Tenant and Landlord shall approve Construction Drawings in
writing within five (5) business days from their completion, such approval not
to be unreasonably withheld, unreasonably conditioned or unreasonably delayed.
If neither party disapproves of the Construction Drawings within such five (5)
business day period, approval shall be deemed granted. If either party
disapproves of the Construction Drawings, Landlord shall cause the drawings to
be corrected within five business (5) days. After final approval, no further
changes may be made to the Construction Drawings without the prior written
approval of Tenant and Landlord, which approval not to be unreasonably withheld,
unreasonably conditioned or unreasonably delayed. Additional revisions requested
by the Tenant resulting in additional costs shall be the sole responsibility of
the Tenant. Approval of Construction Drawings shall be considered final
authorization to proceed.
(c) Landlord shall cause approved Construction Drawings to be
submitted to the appropriate governmental agencies for plan review and building
permit and attached to this Lease as Exhibit "C-3." Revisions which may be
------------
required by governmental agencies as a result of the plan review process shall
be reviewed by Tenant and Landlord and modifications reflecting same shall be
mutually agreed upon in a timely manner so as not to delay progress of the Work.
The final work schedule and Substantial Completion date shall be extended as
required to reflect time lost, if any, to incorporate any such revisions.
(d) Tenant shall be allowed up to a maximum of three (3) adjustments
to the approved Construction Drawings. Any adjustments beyond the first three
(3) shall be at Tenant's sole cost and expense.
EXHIBIT "C"
49
4. Construction of Tenant Improvements.
-----------------------------------
After the Construction Drawings have been prepared and approved,
Landlord shall submit for a building permit for the Tenant Improvements.
Landlord shall obtain three (3) competitive bids, on an open book basis, from
Landlord's preferred contractor list. Landlord and Tenant shall approve one (1)
bid within three (3) days from Landlord's notice to Tenant of the bids. Upon
approval, Landlord shall enter into a construction contract with its contractor
for the installation of Tenant Improvements in accordance with the Construction
Drawings. The construction contract shall be a guaranteed maximum price
contract and shall not be signed until approved by Tenant, which approval shall
not be unreasonably withheld, unreasonably conditioned or unreasonably delayed.
Landlord shall include a provision in its contracts with the contractors and
subcontractors who perform the Work that Tenant is a direct third party
beneficiary of all warranties provided to Landlord. All such warranties shall
be for the longest period the Landlord can obtain. Within five (5) business
days from the date Landlord enters into the construction contract Landlord shall
obtain from the contractor a final work schedule (the "Final Work Schedule")
which shall replace the Preliminary Work Schedule. Landlord shall supervise the
completion of the Work and shall use its reasonable best efforts to secure
completion of the Work by the date which is forty-five (45) days after the Third
Floor Availability Date provided that Tenant meats all required time lines and
such completion date is reasonably possible. Tenant shall pay to Landlord a fee
for overhead and coordination of the Work equal to two percent (2%) of the gross
value (less any sales taxes and other amounts paid by Tenant directly to any
vendor) of the amount of the general contractor's final application for payment
related to such Work. The scope of the services provided by Landlord shall
include without limitation the services listed on Exhibit "C-4".
------------
5. Payment for Tenant Improvements.
-------------------------------
(a) Landlord shall provide Tenant with an allowance of up to $14.00 per
usable square foot of space on the Second Floor and $10.00 per useable square
foot of space on the Third Floor (the "Tenant Improvement Allowance") towards
the cost of the installation of the Tenant Improvements excluding Tenant's
furniture, fixtures and equipment. Tenant shall have the right to allocate all
or any portion of the total Tenant Allowance between the Tenant Improvements on
the Second Floor and Third Floor as Tenant deems necessary in its sole
discretion. Landlord shall have no additional responsibility or obligation to
pay any amount in excess of the Tenant Improvement Allowance. All costs or
expenses incurred by Landlord in excess of the Tenant Improvement Allowance
shall be the sole and exclusive responsibility of Tenant and shall be payable to
Landlord as Additional Rent within thirty (30) days of Tenant receipt of an
invoice for such costs or expenses, but not prior to Landlord's substantial
completion of the Work. Tenant shall have the right to apply the Tenant
Improvement Allowance to the costs of purchasing, designing and constructing the
following, in Tenant's sole discretion: (i) all costs of constructing the Tenant
Improvements; (ii) all construction manager costs and fees, including the costs
and fees of Tenant's Representative; (iii) all permit and governmental fees;
(iv) any applicable sales taxes; (v) the costs of any as-built plans; and (vi)
architect and engineering costs.
(b) Design Allowance. Upon Landlord's receipt of copies of paid invoices
----------------
from Tenant's design professionals, Landlord provided Tenant with a design
allowance (the "Design Allowance") of up to $0.15 per useable square foot of
space on the Second and Third Floors, which may be used by Tenant for space
planning costs for the Second and Third Floors. Tenant shall have the right to
allocate all or any portion of the total Design Allowance between the design
planning for the Second Floor and Third Floor as Tenant deems necessary in its
sole discretion. Landlord shall pay all invoices from Tenant's design
professionals no later than thirty (30) days after receipt.
6. Additional Work.
---------------
(a) Any changes to the Tenant Improvements requested by the Tenant
after final approval of the Space Plan ("Additional Work") shall be made in
writing to Landlord. Thereafter, Landlord shall submit to Tenant a written cost
estimate of the Additional Work, at Tenant's sole cost and expense, including
costs associated with: (i) revisions to the Space Plan and/or Construction
Drawings; (ii) construction of the Additional Work; (iii) required permits,
governmental fees, and inspections; (iv) Washington State sales tax; (v) as-
built record documentation; and
50
(vi) delay of the Final Work Schedule. Upon written approval thereof by Tenant,
Landlord shall authorize its contractor, architect, engineer and/or vendor to
proceed with the Additional Work, and to submit actual costs by Change Order to
the construction contract for invoicing to Tenant. Failure by Tenant to approve
the cost estimate or Final Work Schedule within (5) days receipt thereof shall
be deemed a withdrawal of request and contractor shall proceed with the Work as
defined prior to such Change Order. Under no circumstances shall the Substantial
Completion Date or the Rent Commencement Date change as a result of Tenant's
Additional Work.
(b) Tenant shall pay to Landlord a fee for overhead and coordination
of the Additional Work equal to two percent (2%) of the gross value (less any
sales taxes and other amounts paid by Tenant directly to any vendor) of the
amount of the general contractor's final application for payment related to such
Additional Work.
(c) Tenant shall utilize Uniform Building Specifications as defined
in Exhibit "C-2" to the extent such finishes and materials are applicable to the
------------
scope of the Additional Work. Tenant shall be responsible for all costs related
to the proper design, operation and maintenance of the Additional Work whether
or not installed by Landlord's contractor at Tenant's request.
(d) All Additional Work referred to herein above shall be subject to
Landlord's approval, which approval shall not be unreasonably withheld,
conditioned or delayed.
7. Substantial Completion and Commencement of Term.
-----------------------------------------------
(a) The terms "Substantial Completion," "Substantially Complete" and
words of similar import as used herein, shall mean the date on which both the
Landlord's work as described in this Work Letter Agreement is substantially
complete, except for punch list items, Additional Work and/or Change Orders, and
a temporary certificate of occupancy for the Premises has been issued.
(b) Notwithstanding the provisions of Paragraph 6(a) above, if there
is a delay in Substantial Completion as a result of:
i) Tenant's failure to approve any item or to perform any other
obligation by the date specified in the Work Letter;
ii) Tenant's request for materials, finishes or methods of
construction not readily available; or
iii) Tenant's request for Additional Work (whether or not
agreeable to Landlord),
such a delay shall cause the Commencement Date to accelerate by the number of
days delayed from the date the Commencement Date would otherwise have occurred.
(c) Within three (3) days prior to the date Landlord anticipates
delivering the Premises to Tenant, Tenant will conduct a walk-through inspection
of the Premises with Landlord and prepare a punch list of items needing
additional work by Landlord. Landlord will complete all reasonable punch list
items within a reasonably time after the walk-through inspection. In addition,
Landlord shall repair any latent defects in the Work as soon as practicable
after written notification from Tenant at any time during the Term.
8. ADA Compliance; Compliance with Laws.
------------------------------------
(a) With respect to any Tenant Improvements designed and installed by
Landlord, Landlord warrants that the same shall comply with the provisions of
the Americans with Disabilities Act (ADA), Title III, "Commercial Facilities"
and all other applicable federal, state and local laws, regulations and building
codes.
(b) The Tenant shall determine and provide for reasonable
accommodation to persons with disabilities within the Premises in accordance
with the Americans with Disabilities Act (ADA) Title I, "Employment".
EXHIBIT "C"
51
9. Cooperation. The parties agree to use their reasonable best efforts to
-----------
cause each of their respective consultants, architects and/or engineers to
cooperate with one another so that the Tenant Improvements are promptly,
diligently and efficiently constructed in accordance with the Work Schedule.
10. Force Majeure. Landlord shall have no liability whatsoever to Tenant
-------------
for the inability or delay of Landlord to fulfill any of Landlord's obligations
under this Work Letter Agreement on account of any cause beyond Landlord's
reasonable control including, without limiting the generality of the foregoing,
lock-outs (including lock-outs decreed or recommended for its members by a
recognized contractors' association of which the Landlord is a member or to
which the Landlord is otherwise bound), strikes, labor disputes, inability to
procure materials or services, restrictive governmental laws or regulations,
inability to procure necessary permits, fire, act of God, floods, delays in
transportation, acts of civil or military authorities, riots, insurrection,
sabotage, rebellion and war, and delays in construction caused by weather
conditions. If the Lease, this Work Letter Agreement or the Work Schedule
specifies a time period for performance of an obligation of Landlord, 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 above.
EXHIBIT "C"
52
--------------------------------------------------------------------------------
EXHIBIT "C-1"
SPACE PLAN
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
SPACE PLAN
----------
[To be attached following Lease execution.]
EXHIBIT "C-1"
53
--------------------------------------------------------------------------------
EXHIBIT "C-2"
UNIFORM BUILDING STANDARD SPECIFICATIONS
--------------------------------------------------------------------------------
UNIFORM BUILDING STANDARD SPECIFICATIONS
----------------------------------------
Construction of the Tenant Improvements shall be per the space plan attached
herein and detailed per industry and building standard practice. All materials
and finishes shall be per the uniform Building standard specifications as
defined herein. The intent of the uniform Building standard specifications is
to achieve a uniform and consistent appearance throughout the Building.
Materials and finishes not specifically defined herein, if requested by Tenant
and approved by Landlord, shall be at Tenant's sole cost and expense and may be
subject to an additional Tenant cost to restore the premises to a uniform
Building standard condition upon termination of the Lease. Payment terms for
all items subject to restoration shall be agreed upon prior to the start of any
Work.
Partitions:
----------
Demising walls - 2-1/2" x 9'-0"--25 gauge--metal studs, 5/8" gypsum wall board
each side taped with smooth finish, sound attenuating blanket in wall cavity and
ceiling plenum 2'-0" each side of wall.
Partitions attach to mullions with double back tape
Interior walls - 2-1/2" x 9'-0" metal studs, 5/8" gypsum wall board each side
taped with smooth finish. All walls terminating at exterior window system shall
attach to vertical window mullion. 1/2" "Black Reveal at top of walls.
Finish - one coat latex primer, two coats latex paint with eggshell finish,
neutral colors.
Ceilings:
--------
Existing 2' x 2' exposed suspended ceiling grid at 9'-0" A.F.F., existing lay-in
acoustical mineral fiber panels with fissured pattern finish, off-white uniform
Building standard color.
Floors:
------
Carpet - 30 oz. cut pile, glue down installation or similar quality as
determined by Landlord.
Vinyl composition tile - ▇▇▇▇▇▇▇▇▇ "Excelon" 12"x12" tiles, Imperial texture
finish, neutral colors.
Doors, frames and hardware:
--------------------------
Doors and frames - 3'-0" uniform Building standard full height 1-3/4" solid core
with 5-ply plain sliced red oak veneer, red oak throated frame.
Wood finish - uniform Building standard stain to match, sanding sealer, clear,
water based lacquer semi-gloss finish coat.
Hardware - ADA compliant commercial grade lever action passage latch set by
uniform Building standard manufacturer, 2 pair butt hinges, brushed aluminum
finish.
EXHIBIT "C-2"
54
Window treatment:
----------------
Existing 1" mini-blinds on exterior walls, uniform Building standard color.
Millwork:
--------
Cabinetry - prefabricated particle board modular units with standard
manufacturer's laminated finish.
Plumbing:
--------
Stainless steel faucet and sink, ▇▇▇▇ single lever faucet and 6 gallon electric
hot water heater in the ceiling.
Electrical, lighting and communication systems:
----------------------------------------------
Convenience power - one 120V/180W duplex outlet per office mounted at interior
partition and/or one 120V/20A circuit in junction box per group of eight modular
workstations mounted at plenum or interior partition.
Electrical panel must be re-labeled.
Equipment power - one dedicated 120V/20A copier circuit mounted at interior
partition.
Telephone and data - mud ring with pull string, one per office and/or one per
group of eight modular workstations mounted at interior partition. Installation
of system wiring by Tenant's vendor in accordance with Item 3 of the Building
Rules and Regulations attached hereto as Exhibit "F." Location of telephone /
----------
data processing equipment shall be in Tenant premises.
Ambient light fixtures - existing 2x4 fluorescent lay-in fixture with parabolic
louver, existing cool white lamps, quantity per Washington State Energy Code.
Approximately one (1) per 80 square feet.
Switching - one switch per office and/or open area per Washington State Energy
Code.
Mechanical systems:
------------------
Existing Building shell heating, ventilating and air conditioning system per
Building design standard specifications.
All 24 hour cooling must be separately metered.
Fire protection and life safety systems:
---------------------------------------
Type, quantity and location of devices per Fire ▇▇▇▇▇▇▇▇, Uniform Fire Code and
all applicable municipal regulatory agencies.
EXHIBIT "C-2"
55
--------------------------------------------------------------------------------
EXHIBIT "C-3"
CONSTRUCTION DRAWINGS
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
[To be attached following Lease execution.]
EXHIBIT "C-3"
56
--------------------------------------------------------------------------------
EXHIBIT "C-4"
LANDLORD'S SCOPE OF WORK
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
The scope of services provided by Landlord as set forth in Section 4 of the
Work Letter Agreement will include at least the following elements:
PROJECT MANAGEMENT:
. Requests for proposals
. Value engineering
. General oversight and management
PERMITTING:
. Cooperate with Tenant's architect, who will submit for the Tenant
Improvement permit(s)
. Coordination with Tenant's architect and Representative to facilitate
and/or expedite the building permit process to the extent possible
BIDDING (PUBLIC/PRIVATE):
. Assemble bid packages/specifications
. Evaluate and make recommendation on bids
. Value engineering
CONTRACT ADMINISTRATION:
. Prepare contracts (when applicable)
. Facilitate change orders
PROJECT CLOSE OUT:
. Punchlists
. Cooperate with Tenant's architect in the preparation of as-builts
. Owner/maintenance manuals
. Assist Tenant's Representative and architect in conducting the punch list
walk-through
. Permit finals/certificate of occupancy
EXHIBIT "C-3"
57
--------------------------------------------------------------------------------
EXHIBIT "D"
SAMPLE LETTER AGREEMENT
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement. The
summary of Lease terms herein shall not vary the terms, provisions and/or
obligations of the Lease.
Date
Tenant
Suite
Address
City, State, Zip
Re: Basic Lease Terms
In accordance with Section 3 of the Lease dated February 6, 1998 by and between
Bentall Newport Tower L.L.C., and Western Wireless Corporation, a Delaware
corporation, Landlord and Tenant hereby mutually agree that the Section 1 of the
Lease is hereby deleted and replaced as follows:
(a) Premises:
---------
Building Name:
Building Address:
Floor:
Suite:
Premises Area: (Subject to subsection 2(a) below)
Rentable Square Feet: Approximately _____
Useable Square Feet: Approximately _____
Building Area: _________ Rentable Square Feet
Load Factor: _______%
Tenant's Percentage: _______%, subject to adjustment in
accordance with subsection 2(a)
below
(b) Term of the Lease: Subject to Section 3,
the term of this Lease shall be for _______________
commencing on _______________
(c) Basic Rent (Subject to Section 4 below):
----------
Basic Rent Per Rentable Square
Lease Months per Month Foot (Annual)
------------ --------- --------------------
1 to 12 $________ $______, NNN
13 to 24 $________ $______, NNN
25 to 36 $________ $______, NNN
37 to 48 $________ $______, NNN
49 to 60 $________ $______, NNN
(d) Security Deposit:
----------------
EXHIBIT "D"
58
(e) N/A
(f) N/A
(g) Parking: Pursuant to the terms of subsection 32(p): ___________ parking
-------
passes per 1,000 usable square feet of leased Premises.
(h) N/A
(i) N/A
Sincerely,
Landlord's Representative
LANDLORD TENANT
(Bentall) L.L.C., a (Tenant), a ___________________
Washington limited liability company
By: Bentall U.S. L.L.C., a
Washington limited liability company
its Manager
(SAMPLE) (SAMPLE)
------------------------------ -------------------------------
By: By:
Its: Its:
Date: ________________________ Date: ________________________
(SAMPLE)
------------------------------
By:
Its:
Date: ________________________
EXHIBIT "D"
59
--------------------------------------------------------------------------------
EXHIBIT "E"
OPERATING COSTS
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
The following list represents the categories of the Operating Costs per
subsection 6(d) of the Lease:
Janitorial
Security and Life Safety
Utilities and Waste Disposal
Mechanical and Electrical
Signage
General Repairs and Maintenance
Insurance
Administration
Real Estate Taxes and Assessments
EXHIBIT "E"
60
--------------------------------------------------------------------------------
EXHIBIT "F"
BUILDING RULES AND REGULATIONS
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement, which
Landlord shall have the right to amend from time to time. To the extent there
are any inconsistencies between these rules and regulations and the provisions
of the Lease, the provisions of the Lease shall prevail.
1. The sidewalks, entries, passages, court corridors, stairways and
elevators shall not be obstructed by Tenant, its employees or agents, or used by
them for purposes other than ingress and egress to and from Premises.
2. Notwithstanding any of the terms and provisions of this Lease, Tenant
will refer all contractors, contractors' representatives and installation
technicians rendering any service on or to the Premises for Tenant to Landlord
for Landlord's approval and supervision before performance of any contractual
service. This provision shall apply to all work performed in the Building,
including installation of telephones, telegraph equipment, electrical devices
and attachments and installations of any nature affecting floors, walls
woodwork, trim, windows, ceilings, or any other physical portion of the
Building. Such approval, if given, shall in no way make Landlord a party to any
contract between Tenant and any such contractor, and Landlord shall have no
liability therefor. In the event a contractor is hired by Tenant, the Tenant
and the contractor shall execute Landlord's standard form Hold Harmless
Agreement, which indemnifies Landlord, its agents and invitees from any and all
liability in connection with contractors work.
3. Tenant's communication equipment, cabling, telegraphic, telephonic,
security systems or other electrical connections shall not be installed without
Landlord's prior written approval, which approval shall not be unreasonably
withheld, unreasonably conditioned, or unreasonably delayed. Tenant shall
install its phone and computer systems in Tenant's suite and Landlord will
require Tenant to label all such installations at the point of beginning to the
end point. Within thirty (30) days of final completion of any such work Tenant
shall provide Landlord a final as-built detailing the routes and locations of
such installation.
4. Except as otherwise indicated herein, no signs, advertisement or
notice shall be inscribed, painted or affixed on any part of the inside or
outside of the Building unless of such color, size and style and in such place
upon or in the Building as shall first be designated in writing by Landlord.
Except as otherwise provided in the Lease, there shall be no obligation or duty
on Landlord to allow any sign, advertisement notice to be inscribed, painted or
affixed on any part of the inside or outside of the Building. Signs on doors
will be painted for the Tenant by a sign writer approved by Landlord, the cost
of the painting to be paid by the Tenant. No furniture shall be placed in front
of the Building or in any lobby or corridor without the prior written consent of
Landlord. Landlord shall have the right to remove all other signs and furniture
without notice to Tenant at the expense of Tenant.
5. Landlord's acceptance of any name for listing on the Building
Directory will not be deemed, nor will it substitute for, Landlord's consent, as
required by this Lease, to any sublease, assignment, or other occupancy of the
Premises.
6. Tenant shall have the non-exclusive use in common with Landlord, other
tenants, their guests and invitees, of the automobile parking areas, driveways
and footways, subject to reasonable rules and regulations for the use thereof as
prescribed from time to time by Landlord. Landlord shall have the right to
designate parking areas for the use of the Building tenants and their employees,
and the tenants and their employees shall not park in parking areas not so
designated, specifically including driveways, fire lanes, load/unloading areas,
handicapped zones, walkways and building entrances. Tenant agrees that upon
written notice from Landlord, it will furnish to Landlord, within ten (10) days
from receipt of such notice, the state automobile license numbers assigned to
the automobiles of the Tenant and its employees. Landlord shall not be liable
for any vehicle of the Tenant or its employees that Landlord shall have towed
EXHIBIT "F"
61
from the Premises. Landlord will not be liable for damage to vehicles in the
parking areas or for theft of vehicles, personal property from vehicles, or
equipment of vehicles. Cars parked overnight may be towed, at Tenant's expense,
unless Tenant has prior written permission from Landlord.
7. No Tenant shall do or permit anything to be done in the Premises, or
bring or keep anything therein, which will in any way increase the rate of
casualty insurance on the Building, or on property kept therein, or obstruct or
interfere with the rights of other tenants, or in any way injure or annoy them,
or conflict with the laws relating to fire, or with any regulations of the fire
department, or with any insurance policy upon said buildings or any part
thereof, or conflict with any rules and ordinances of any governmental agency or
department.
8. No windows or other openings that reflect or admit light into the
corridors or passageways, or to any other place in said Building shall be
covered or obstructed by Tenant.
9. No person shall disturb the occupants of the Building by the making of
loud or objectionable noises, or any other unreasonable or offensive conduct or
activity including, but not limited to, smoking, which is in violation of any
applicable law or as designated by Landlord. In the absence of a designated
smoking area, no person shall smoke within thirty (30) feet from any posted "No
Smoking" signs or any Building entrance. No dogs or other animals or pets of
any kind will be allowed in the Building.
10. The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed, and any damage
resulting to them from misuse, or by the defacing or injury of any part of the
Building, shall be borne by the Tenant who, or whose employees or agents shall
have caused it.
11. No bicycles or similar vehicles will be allowed in the Building (but
are allowed in the garage).
12. Nothing shall be thrown out the windows of the Building or down the
stairways or other passages.
13. Tenant shall not be permitted to use or to keep in the Building any
kerosene, gasoline or any inflammable or combustible fluids or materials,
without the prior written consent of Landlord.
14. If Tenant desires, at its cost, shades, draperies, or awnings, they
must be of such shape, color, materials and make as shall be designated by
Landlord. Any outside awning may be prohibited by Landlord. Landlord or its
agents shall have the right to enter the Premises to examine the same or to make
such repairs, alterations or additions as Landlord shall deem necessary for the
safety, preservation or improvement of the Building. Landlord or its agents may
show said Premises and may place on the windows or doors thereof, a notice "For
Rent" for six (6) months prior to the expiration of the Lease.
15. No portion of the Building shall be used for the purpose of lodging
rooms or for any unlawful purposes.
16. All glass, locks and trimmings in or about the doors and windows and
all electric fixtures belonging to the Building shall be kept whole, and
whenever broken by anyone shall be immediately replaced or repaired and put in
order by Tenant under the direction and to the satisfaction of Landlord, and on
removal shall be left whole and in good repair.
17. Landlord reserves the right at any time to take one elevator out of
service for the exclusive use by the Building management in servicing the
Building.
18. All safes, furniture or other heavy articles shall be carried up or
into the Premises only at such times and in such manner as shall be prescribed
by Landlord at Tenant's sole cost and expense. Landlord requires Common Area
walls and corners to be protected and masonite board to be installed and used in
all Common Areas for all furniture moves. Landlord shall in all cases have the
right to specify the proper weight and position of any such safe or other heavy
article. Any damage done to the Building by taking in or removing any such
equipment or from
EXHIBIT "F"
62
overloading any floor in any way shall be the responsibility of the Tenant.
Defacing or injuring in any way any part of the Building by the Tenant, its
agents or employees, shall be paid for by the Tenant.
19. Landlord may waive any one or more of these Rules and Regulations for
the benefit of Tenant or any other tenant, but no such waiver by Landlord shall
be construed as a waiver of such Rules and Regulations in favor of Tenant or any
other tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building.
20. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of Tenant's Lease of its Premises in the
Building.
21. Tenant shall fully cooperate in allowing, from time to time, such
examinations, tests, inspections, and reviews of the Premises as Landlord, in
its sole and absolute discretion, shall determine to be advisable in order to
evaluate any potential environmental problems. Landlord expressly reserves the
right to conduct examinations, test (including but not limited to a
geohydrologic survey of soil and subsurface conditions), inspections, and review
of the premises as Landlord in its sole and absolute discretion may determine to
be necessary.
22. Landlord reserves the right to make such other and reasonable Rules
and Regulations as, in its judgment, may from time to time be needed for safety
and security, for care and cleanliness of the Building and for the preservation
of good order therein. Tenant agrees to abide by all such Rules and Regulations
hereinabove stated and any additional rules and regulations which are adopted.
23. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, contractors, clients, customers, invitees
and guests.
24. If Tenant's use of heating, cooling or convenience power exceeds the
design load parameters of the Building and a service call is requested, then
Tenant is responsible for such service as a direct Tenant cost.
25. Tenant shall pay for all additional security costs and Landlord
maintenance personnel required in connection with Tenant's move-in or move-out.
Landlord shall have the right to establish and modify from time to time rules
governing the move-in and move-out of Tenant's furniture, fixtures and equipment
and Tenant shall fully comply with such rules as established and modified.
EXHIBIT "F"
63
--------------------------------------------------------------------------------
EXHIBIT "G"
BENTALL CONSTRUCTION RULES & REGULATIONS
--------------------------------------------------------------------------------
This exhibit is a continuation of that certain Lease dated February 17, 2000,
between Bentall Newport Centre L.L.C., a Washington limited liability company
and Mercata, Inc., a Delaware corporation on real property in King County,
Washington, and by this reference shall become part of that agreement.
1. All finishes must be matched to the building standard including doors and
frames, hardware, interior partition detail, column details, etc.
2. Any materials not reused in Tenant's alterations must be returned to
Landlord. Tenant agrees to have Tenant's contractor store such items in
the areas designated by Landlord.
3. All workmanship must be done in conformity with commercial standards in a
first class office building and in accordance with all local and federal
governmental codes including any requirements necessary to bring the
Premises into compliance therewith.
4. Building electrical panel must be labeled to show electrical changes
including but not limited to electrical outlets and lighting relocations
and additions.
5. All common areas including but not limited to entrances carpeted areas,
elevators and ceilings affected by the performance of Tenant's alterations
must be restored to their original condition immediately upon request of
Landlord. Landlord hereby states that all common areas are in excellent
condition and do not show any signs of wear and tear. Should Tenant or
Tenant's contractor notice any common areas which have an existing
condition of wear and tear, Tenant or Tenant's contractor shall notify
Landlord in writing prior to commencement of improvements.
6. Addition of any equipment which will in any way increase the consumption of
electricity beyond the building standard use or will have a significant
impact on the HVAC system, must be specified and detailed in writing to
Landlord for review and approval.
7. Any work which will affect any of the building systems including but not
limited to fire protection, mechanical and electrical shall be coordinated
with the Landlord. All systems are required to be restored at the end of
the day.
8. All work performed must not affect the structural integrity of the
Building.
9. Work performed during regular business hours must not disrupt the business
or operations of adjoining tenants. Specifically, all work which creates
disruptive noise or odors must be completed during nonbusiness hours.
Please note that the perimeter doors are locked from 6:00 pm until 7:00 am,
Monday through Friday and 24 hours per day on Saturday and Sunday. If any
work is required to be done while the doors are locked, the
contractor/Tenant must notify Bentall 24 hours in advance to arrange for
access and additional security. Any access or additional security required
as a result of Tenant's work shall be billed to Tenant as Additional Rent.
10. Tenant must obtain all governmental permits and approvals before commencing
work.
11. Tenant indemnifies, defends and holds Landlord harmless from and against
all losses, liabilities, damages, liens, costs, penalties and expenses
arising from or out of the performance of such alterations.
EXHIBIT "G"
64
12. Work related to the roof of the Building:
. Access by authorized personnel only.
. No objects shall be left unattended.
. Core penetrations shall be performed by Landlord's contractor at
Tenants cost.
13. In addition to the conditions listed above, Tenant's contractor shall fully
comply with the following additional conditions:
. No smoking is allowed except in areas designated as smoking areas, or
a minimum of thirty (30) feet from any Building entrance.
. All common areas must be kept clear of contractor's supplies and
materials.
. All perimeter doors shall not be held open during non-business hours.
Violation of this condition will result in fines to Tenant and
Tenant's contractor.
. No loading or unloading of contractor's supplies or materials shall be
done during normal business hours. Loading and unloading during non-
business hours must be done with protection to the common areas of the
building. Landlord must be advised 24 hours in advance of deliveries
in or out of the Building.
. Contractor shall not use any existing lines of communication to the
building for its own use.
. Restoring the premises to the condition delivered to Tenant including
labor and materials of the suspended ceiling, lights, mechanical
systems or any other condition existing prior to the alterations.
65
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EXHIBIT "H"
JANITORIAL SPECIFICATIONS
--------------------------------------------------------------------------------
Janitorial Specifications
General Areas, Offices, Lounges, & Lobby, Etc.
---------------------------------------------
A. Services Performed Nightly
1. Empty wastebaskets
2. Transport trash to designated areas
3. Dust all furniture including desks, chairs, etc.
4. Empty and damp clean all ashtrays
5. Dust all exposed bookcases, shelves and cabinets
6. Sanitize and clean drinking fountains
7. Low dust all horizontal surfaces to hand height (70") including walls,
baseboards, ledges, moldings, shelves, picture frames, vents, radiators,
etc.
8. Spot clean desk surfaces
9. Clean counter surfaces
10. Spot clean lobby glass including entrance doors
11. Spot interior glass in partitions and doors
12. Remove fingerprints from front doors, frames, light switches, kick and push
plates, handles, railings, and walls, etc.
13. Check and clean furniture in conference room
14. Clean and service receptacles and screens furnished by client
15. Personal papers on desks, cabinets, etc, are not to be disturbed
16. Damp clean blackboards/whiteboards if requested
17. Clean and polish bright work to hand height
18. Sweep, vacuum, and dust all carpeted stairways
19. Dust and spot clean elevators and polish interior brass
20. Clean elevator tracks on all floors
21. Spot clean "Exit" on stairwells
B. Services Performed Semi-Weekly
1. Dust all telephones
C. Services Performed Weekly
1. High dust above hand height all horizontal surfaces, ledges, shelves,
and moldings
2. Clean desk surfaces
3. Remove dust and cobwebs from ceiling
4. Sweep and clean "Exit" stairwells
D. Services Performed Monthly
1. Wash all wastebaskets
2. Dust venetian blinds
3. Vacuum diffuser outlets in ceiling and windowsills
4. Dry clean area adjacent to diffuser outlet
Washrooms
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A. Services Performed Nightly
1. Clean and sanitize all toilet bowl flush rings, drain and overflow
outlets
2. Clean, sanitize and polish all vitreous fixtures, including toilet
bowls, urinals, and hand basins
3. Clean and sanitize toilet seats
4. Clean and polish all chrome fittings
5. Clean and polish all glass and mirrors
6. Wash and sanitize exterior of all receptacles
7. Empty and sanitize interior sanitary container
8. Empty all trash receptacles and containers and replace liners
9. Dust metal stall partitions
10. Spot clean stall partitions
11. Empty and damp clean all ashtrays
12. Remove fingerprints from doors, frames, light switches, kick and push
plates, handles and walls
13. Remove spots, stains, splashes from wall area and near hand basin
14. Refill all dispensers to normal limits, this includes soap, napkins,
tissue, hand towels, liners, seat cover and cup dispensers
15. Dust all furniture including tables and chairs
16. Low dust all horizontal surfaces to hand height including ▇▇▇▇▇,
ledges, shelves, frames, vents, and heating outlets
17. Damp mop floors
18. Flush toilet bowls with "Bowlclene"
B. Services Performed Weekly
1. Wash and sanitize stall partitions
2. High dust above hand height all horizontal surfaces including ledges,
shelves, and moldings
C. Services Performed Monthly
1. Vacuum diffuser outlets in ceilings and/or walls
2. Machine scrub and seal (if applicable) restroom floors
D. Services Performed Quarterly
1. Dry clean are adjacent to diffuser outlet
Floors: Resilient and Hard
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A. Services Performed Nightly
1. Dust mop or sweep: tile, marble, terrazzo, and hardwood flooring
2. Damp mop: tile, marble and terrazzo
B. Services Performed Monthly
1. Scrub and refinish to maintain adequate protective coating
2. Strip, clean, refinish and machine polish
Carpets
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A. Services Performed Nightly
1. Vacuum entire carpeted area including open areas, lobbies, leg space
under desks, tables, and other non-traffic areas
2. Inspect and remove spots and stains
B. Services Performed as requested at added cost
1. Provide service mats as requested
Walls and ceilings
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A. Services Performed Nightly
1. Remove spots, stains, and splashes to hand height
Furniture: Fabric
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A. Services Performed Monthly
1. Services to be performed as requested at additional cost
General
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A. Daily services
1. Leave notice of any observed irregularities (i.e. defective plumbing,
unlocked doors, lights left on and supply shortage)
2. All lights are to be turned off except those specified. Doors and
windows closed and locked
3. Provide owner with action request to be checked daily
B. Weekly services
1. Provide copies of action request logs to owner
C. Bi-Weekly services
1. Provide copies to walk-through reports to owner
D. Services to be provided as requested at additional cost
1. Emergency cleanup