INDUSTRIAL LEASE
[SINGLE TENANT - TRIPLE NET]
This INDUSTRIAL LEASE ("Lease") is entered into as of the 27 day of
May, 1999, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a Delaware limited liability
company ("Landlord"), and CUTTER & BUCK, INC., a Washington corporation
("Tenant").
1. BASIC LEASE TERMS. For purposes of this Lease, the following
terms have the following definitions and meanings:
(a) LANDLORD'S ADDRESS (For Notices):
c/o Zelman Development Co., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇,
----------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------------------------
or such other place as Landlord may from time to time designate
by notice to Tenant.
(b) TENANT'S ADDRESS (For Notices):
Cutter & Buck, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-Operations
WITH A COPY TO: Cutter & Buck, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
or such other place as Tenant may from time to time designate
by notice to Landlord.
(c) DEVELOPMENT: The parcel(s) of real property commonly
known as Oakesdale Business Campus and located in the City of Renton (the
"City"), County of King (the "County"), State of Washington ("State"), as
shown on the site plan attached hereto as Exhibit "A-I".
(d) PREMISES: That certain building (the "Building") located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ SW, which Building will contain approximately
170,500 square feet. The Premises are more particularly depicted on the Site
Plan shown on Exhibit "A-I" and the base specifications and plans for the
Building are more particularly described on Exhibit "A-II."
(e) TENANT'S PERCENTAGE: The square footage of the Building
as compared to the square footage of all buildings in the Development. The
square footage of the Building will be determined as described on Exhibit "B".
(f) TERM: Seven (7) Lease Years and No Months.
(g) ESTIMATED COMMENCEMENT DATE: November 1, 1999.
(h) ESTIMATED EXPIRATION DATE: October 31, 2006.
(i) COMMENCEMENT DATE: The date on which the Term of this
Lease will commence as determined in accordance with the provisions of
Exhibit "C".
(j) INITIAL MONTHLY BASE RENT: $.3325 per square foot of the
Building per month, plus an additional $.65 per square foot of office space
within the Building per month, subject to adjustment as described on Exhibit
"B" and as otherwise provided in this Lease. By way of example, if the
Building contains 170,500 square feet, of which 6,000 square feet comprise
office space, the Initial Monthly Base Rent shall be equal to the sum of (A)
$.3325 X 170,500 (i.e., $56,691.25) plus (B) $.65 X 6,000 (i.e., $3,900.00),
for a total Initial Monthly Base Rent of $60,591.25.
(k) SECURITY DEPOSIT: None.
(l) TENANT IMPROVEMENTS: All tenant improvements installed
or to be installed by Landlord or Tenant within the Premises to prepare the
Premises for occupancy pursuant to the terms of the Work Letter Agreement
attached hereto as Exhibit "C".
(m) PERMITTED USE: Labeling, distribution, light
manufacturing and warehousing of non-Hazardous Materials and related office
uses and no other use without the express written consent of Landlord, which
consent Landlord may withhold in its reasonable discretion.
(n) BROKER(S): ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
(o) GUARANTOR(S): None
(p) INTEREST RATE: Ten percent (10%) per annum.
(q) PARKING: Not less than One Hundred Fifty (150)
unreserved, in-common spaces within 80 feet of the Building as provided in
Paragraph 32 hereof.
(r) EXHIBITS: A-I through H, inclusive, which Exhibits are
attached to this Lease and incorporated herein by this reference.
(s) ADDENDUM PARAGRAPHS: 41 through 44, inclusive, which
Addendum Paragraphs are attached to this Lease and incorporated herein by
this reference.
This Paragraph 1 represents a summary of the basic terms and
definitions of this Lease. In the event of any inconsistency between the
terms contained in this Paragraph 1 and any specific provision of this Lease,
the terms of the more specific provision shall prevail.
2. PREMISES AND COMMON AREAS.
(a) PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the Premises as improved or to be improved with
the Tenant Improvements described in the Work Letter Agreement, a copy of
which is attached hereto as Exhibit "C".
(b) MUTUAL COVENANTS. Landlord and Tenant agree that the
letting and hiring of the Premises is upon and subject to the terms,
covenants and conditions contained in this Lease and each party covenants as
a material part of the consideration for this Lease to keep and perform their
respective obligations under this Lease.
(c) TENANT'S USE OF COMMON AREAS. During the Term of this
Lease, Tenant shall have the nonexclusive right to use in common with
Landlord and all persons, firms and corporations conducting business in the
Development and their respective customers, guests, licensees, invitees,
subtenants, employees and agents (collectively, "Development Occupants"),
subject to the terms of this Lease, the Rules and Regulations referenced in
Paragraph 28 below and all covenants, conditions and restrictions now or
hereafter affecting the Development (provided Tenant's use of the Premises as
contemplated herein is not materially and adversely impacted), the following
common areas of the Development (collectively, the "Common Areas"): the
parking facilities of the Development which serve the Building, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, and similar areas and facilities situated within
the Development and appurtenant to the Building which are not reserved for
the exclusive use of any Development Occupants. If Landlord hereafter grants
reserved parking to any other Development Occupants, then Tenant may demand
that Landlord grant to Tenant substantially similar reserved parking rights
for the Premises and any other space leased by Tenant pursuant to this Lease.
(d) LANDLORD'S RESERVATION OF RIGHTS. Provided Tenant's use
of and access to the Premises is not interfered with in an unreasonable
manner, Landlord reserves for itself and for all other owner(s) and
operator(s) of the Common Areas and the balance of the Development, the right
from time to time to: (i) make changes to the design and layout of the
Development, including, without limitation, changes to buildings, driveways,
entrances, loading and unloading areas, direction of traffic, landscaped
areas and walkways, parking spaces and parking areas; and (ii) use or close
temporarily the Common Areas, and/or other portions of the Development while
engaged in making improvements, repairs or alterations to the Building, the
Development, or any portion thereof.
3. TERM. The term of this Lease ("Term") will be for the period
designated in Subparagraph 1(f), commencing on the Commencement Date, and
ending on the last day of the month in which the expiration of such period
occurs, including any extensions of the Term pursuant to any provision of
this Lease or written agreement of the parties. Notwithstanding the
foregoing, if the Commencement Date falls on any day other than the first day
of a calendar month then the Term of this Lease will be measured from the
first day of the month following the month in which the Commencement Date
occurs. Each consecutive twelve (12) month period of the Term of this Lease,
commencing on the Commencement Date, will be referred to herein as a "Lease
Year". Landlord's Notice of Lease Term Dates ("Notice"), in the form of
Exhibit "D" attached hereto, will confirm the Commencement Date and the date
upon which the Term of this Lease shall end, and will be delivered to Tenant
after Landlord delivers possession of the Premises to Tenant and a punch-list
has been prepared.
4. POSSESSION.
(a) DELIVERY OF POSSESSION. Landlord agrees to deliver
possession of the Premises to Tenant in accordance with the terms of the Work
Letter Agreement attached hereto as Exhibit "C". Notwithstanding the
foregoing and except as provided in Subparagraph 4(c) below, Landlord will
not be obligated to deliver possession of the Premises to Tenant until
Landlord has received from Tenant all of the following: (i) a copy of this
Lease fully executed by Tenant; (ii) the first installment of Monthly Base
Rent (subject to the provisions of Paragraph 42 of the Addendum attached
hereto); (iii) executed copies of policies of insurance or certificates
thereof as required under Paragraph 19 of this Lease; (iv) copies of all
governmental permits and authorizations, if any, required in connection with
Tenant's operation of its business within the Premises; and (v) if Tenant is
a corporation or partnership, such evidence of due formation, valid existence
and authority as Landlord may reasonably require, which may include, without
limitation, a certificate of good standing, certificate of secretary,
articles of incorporation, statement of partnership, or other similar
documentation.
(b) CONDITION OF PREMISES. Thirty (30) days following the
Commencement Date and in accordance with the Work Letter Agreement attached
hereto as Exhibit "C", Landlord and Tenant will jointly conduct a
walk-through inspection of the Premises and will jointly prepare a punch-list
("Punch-List") of items required to be installed by Landlord under the Work
Letter Agreement which require finishing or correction. The Punch-List will
not include any items of damage to the Premises caused by Tenant's move-in or
early entry, if permitted, which damage will be corrected or repaired by
Landlord, at Tenant's expense or, at Landlord's election, by Tenant, at
Tenant's expense. Other than latent defects of which Landlord is notified
within one (1) year after the Commencement Date, Landlord's obligations under
Paragraph 14 of this Lease, and the items specified in the Punch-List, by
taking possession of the Premises, Tenant will be deemed to have accepted the
Premises in its condition on the date of delivery of possession, subject to
all applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use and occupancy of the Premises
and to have acknowledged that the Tenant Improvements have been installed as
required by the Work Letter Agreement and that there are no additional items
needing work or repair by Landlord. Landlord will cause all items in the
Punch-List to be repaired or corrected within thirty (30) days following the
preparation of the Punch-List or as soon as practicable after the preparation
of the Punch-List. Tenant acknowledges that neither Landlord nor any agent
of Landlord has made any representation or warranty with respect to the
Premises, the Development or any portions thereof or with respect to the
suitability of same for the conduct of Tenant's business.
(c) EARLY ENTRY. Landlord agrees to provide Tenant with at
least forty-five (45) days' prior written notice of the date ("Shell Delivery
Date") on which the Building shell will be substantially complete. Tenant
may elect to enter upon the Premises commencing on the Shell Delivery Date in
order to install communications cable, fixtures and racking and the like, at
Tenant's sole cost and expense (collectively, "Tenant's Work"). Any such
entry by Tenant for the purpose of Tenant's Work will be subject to the
following conditions: (i) Tenant, together with its employees, agents,
independent contractors, suppliers and any other personnel under Tenant's
control ("Tenant's Personnel") entering the Premises, will cooperate with
Landlord and Landlord's general contractor; (ii) Tenant agrees that any such
early entry is subject to all of the terms and conditions of the Lease except
for those
-2-
relating to the payment of Rent and other monetary obligations, which
provisions will become applicable in accordance with the terms of this Lease;
(iii) Prior to any entry upon the Premises by Tenant or Tenant's Personnel,
Tenant agrees to pay for and provide to Landlord certificates evidencing the
existence and amounts of liability insurance carried by Tenant, which
coverage must comply with the provisions of this Lease relating to insurance;
(iv) Tenant and Tenant's Personnel agree to comply with all applicable laws,
regulations, permits and other approvals required to perform Tenant's Work or
by the early entry on the Premises by Tenant and Tenant's Personnel; and (v)
Tenant agrees to indemnify, protect, defend and save Landlord harmless from
and against any and all liens, liabilities, losses, damages, costs, expenses,
demands, actions, causes of action and claims (including, without limitation,
attorneys' fees and legal costs) arising out of the early entry, use,
construction, or occupancy of the Premises by Tenant or Tenant's Personnel.
If, in Landlord's reasonable judgment, Tenant's Personnel and/or the work
that is being performed by Tenant's Personnel interferes with Landlord's
construction of the Tenant Improvements, or detrimentally affects Landlord's
ability to comply with its commitments for completing its improvements on the
Premises or cause labor difficulties, Landlord will have the right to order
Tenant's early entry to cease in the event Tenant has not taken action to
remedy such interference within forty-eight (48) hours following Landlord's
notice to Tenant of the existence of the same, and if Landlord so requires in
connection therewith because such items are interfering with Landlord's Work,
Tenant agrees to cause Tenant's Personnel to remove all tools, equipment and
materials from the Premises.
5. RENT.
(a) MONTHLY BASE RENT. Tenant agrees to pay Landlord the
Monthly Base Rent for the Premises (subject to adjustment as hereinafter
provided) in advance on the first day of each calendar month during the Term
without prior notice or demand, except that Tenant agrees to pay the Monthly
Base Rent for the first month of the Term directly to Landlord concurrently
with Tenant's delivery of the executed Lease to Landlord; provided, that
payment of rent shall not commence prior to December 1, 1999. If the Term of
this Lease commences or ends on a day other than the first day of a calendar
month, then the rent for such period will be prorated in the proportion that
the number of days this Lease is in effect during such period bears to the
number of days in such month. All rent must be paid to Landlord, without any
deduction or offset, in lawful money of the United States of America, at the
address designated by Landlord or to such other person or at such other place
as Landlord may from time to time designate in writing. Monthly Base Rent
will be adjusted during the Term of this Lease as provided in Exhibit "B".
(b) ADDITIONAL RENT. All amounts and charges to be paid by
Tenant hereunder, including, without limitation, payments for Operating
Expenses, real property taxes, insurance and repairs, will be considered
additional rent for purposes of this Lease, and the word "rent" as used in
this Lease will include all such additional rent unless the context
specifically or clearly implies that only Monthly Base Rent is intended.
(c) LATE PAYMENTS. Late payments of Monthly Base Rent and/or
any item of additional rent will be subject to interest and a late charge as
provided in Subparagraph 22(f) below.
6. OPERATING EXPENSES.
(a) OPERATING EXPENSES. In addition to Monthly Base Rent,
throughout the Term of this Lease, Tenant agrees to pay Landlord as
additional rent in accordance with the terms of this ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇'▇
▇▇▇▇▇▇▇▇▇▇ of Operating Expenses for the Development as defined in Exhibit
"E" attached hereto.
(b) ESTIMATE STATEMENT. Prior to the Commencement Date and
on or about April 1st of each subsequent calendar year during the Term of
this Lease, Landlord will endeavor to deliver to Tenant a statement
("Estimate Statement") wherein Landlord will estimate both the Operating
Expenses and Tenant's Percentage of Operating Expenses for the then current
calendar year. Tenant agrees to pay Landlord, as additional rent, one-twelfth
(1/l2th) of the estimated Tenant's Percentage of Operating Expenses each
month thereafter, beginning with the next installment of rent due, until such
time as Landlord issues a revised Estimate Statement or the Estimate
Statement for the succeeding calendar year; except that, concurrently with
the regular monthly rent payment next due following the receipt of each such
Estimate Statement, Tenant agrees to pay Landlord an amount equal to one
monthly installment of the estimated Tenant's Percentage of Operating
Expenses (less any applicable Operating Expenses already paid) multiplied by
the number of months from January, in the current calendar year, to the month
of such rent payment next due, all months inclusive. If at any time during
the Term of this Lease, but not more often than quarterly, Landlord
reasonably determines that Tenant's Percentage of Operating Expenses for the
current calendar year will be greater than the amount set forth in the then
current Estimate Statement, Landlord may issue a revised Estimate Statement
and Tenant agrees to pay Landlord, within thirty (30) days of receipt of the
revised Estimate Statement, the difference between the amount owed by Tenant
under such revised Estimate Statement and the amount owed by Tenant under the
original Estimate Statement for the portion of the then current calendar year
which has expired. Thereafter Tenant agrees to pay Tenant's Percentage of
Operating Expenses based on such revised Estimate Statement until Tenant
receives the next calendar year's Estimate Statement or a new revised
Estimate Statement for the current calendar year.
(c) ACTUAL STATEMENT. By April 1st of each calendar year
during the Term of this Lease, Landlord will also endeavor to deliver to
Tenant a statement ("Actual Statement") which states the actual Operating
Expenses for the preceding calendar year. If the Actual Statement reveals
that Tenant's Percentage of the actual Operating Expenses is more than the
total Additional Rent paid by Tenant for Operating Expenses on account of the
preceding calendar year, Tenant agrees to pay Landlord the difference in a
lump sum within thirty (30) days of receipt of the Actual Statement. If the
Actual Statement reveals that Tenant's Percentage of the actual Operating
Expenses is less than the Additional Rent paid by Tenant for Operating
Expenses on account of the preceding calendar year, Landlord will credit any
overpayment toward the next monthly installment(s) of Monthly Base Rent and
Tenant's Percentage of the Operating Expenses due under this Lease.
(d) MISCELLANEOUS. Any delay or failure by Landlord in
delivering any Estimate Statement or Actual Statement pursuant to this
Paragraph 6 will not constitute a waiver of its right to require an increase
in additional rent nor will it relieve Tenant of its obligations pursuant to
this Paragraph 6, except that Tenant will not be obligated to make any
payments based on such Estimate Statement or Actual Statement until thirty
(30) days after receipt of such Estimate Statement or Actual Statement. Even
though the Term has expired and Tenant has vacated the Premises, when the
final determination is made of Tenant's Percentage of the actual Operating
Expenses for the year in which this Lease terminates, Tenant agrees to
promptly pay any increase due over the estimated expenses paid and,
conversely, any overpayment made in the event said expenses decrease shall
promptly be rebated by Landlord to Tenant. Such obligation will be a
continuing one which will survive the expiration or termination of this
Lease. Prior to the expiration or sooner termination of the Lease Term and
Landlord's acceptance of Tenant's surrender of the Premises, Landlord will
have the right to estimate the actual Operating Expenses for the then current
Lease Year and to collect from Tenant prior to Tenant's surrender of the
Premises, Tenant's Percentage of any excess of such actual Operating Expenses
over the estimated Operating Expenses paid by Tenant in such Lease Year.
-3-
(e) AUDIT RIGHT. In the event of any dispute as to the
amount of Tenant's Percentage of Operating Expenses, Tenant or an accounting
firm selected by Tenant and reasonably satisfactory to Landlord (billing
hourly and not on a contingency fee basis) will have the right, by prior
written notice ("Audit Notice") given within eighteen (18) months ("Audit
Period") following receipt of an Actual Statement and at reasonable times
during normal business hours, to audit Landlord's accounting records with
respect to Operating Expenses relative to the year to which such Actual
Statement relates at the offices of Landlord's property manager. In no event
will Landlord or its property manager be required to (i) photocopy any
accounting records or other items or contracts, (ii) create any ledgers or
schedules not already in existence, (iii) incur any costs or expenses
relative to such inspection, or (iv) perform any other tasks other than
making available such accounting records as aforesaid. Tenant must pay its
Percentage of Operating Expenses when due pursuant to the terms of this Lease
and may not withhold payment of Operating Expenses or any other rent pending
results of the audit or during a dispute regarding Operating Expenses. The
audit must be completed within sixty (60) days of the date of Tenant's Audit
Notice and the results of such audit shall be delivered to Landlord within
ninety (90) days of the date of Tenant's Audit Notice. If Tenant does not
comply with any of the aforementioned time frames, then such Actual Statement
will be conclusively binding on Tenant. If such audit or review correctly
reveals that Landlord has overcharged Tenant and Landlord agrees with the
results of such audit, then within thirty (30) days after the results of such
audit are made available to Landlord, Landlord agrees to reimburse Tenant the
amount of such overcharge. If the audit reveals that Tenant was
undercharged, then within thirty (30) days after the results of the audit are
made available to Tenant, Tenant agrees to reimburse Landlord the amount of
such undercharge. Tenant agrees to pay the cost of such audit, provided that
if the audit reveals that Landlord's determination of Tenant's Percentage of
Operating Expenses as set forth in the relevant Actual Statement was in error
in Landlord's favor by more than five percent (5%) of the amount charged by
Landlord to Tenant pursuant to such Actual Statement, then Landlord agrees to
pay the reasonable, third-party cost of such audit incurred by Tenant. To
the extent Landlord must pay the cost of such audit, such cost shall not
exceed a reasonable hourly charge for a reasonable amount of hours spent by
such third-party in connection with the audit, and in no event will exceed
the amount of the error. Tenant agrees to keep the results of the audit
confidential and will cause its agents, employees and contractors to keep
such results confidential. To that end, Landlord may require Tenant and its
auditor to execute a confidentiality agreement provided by Landlord.
7. SECURITY DEPOSIT. N/A
8. USE.
(a) TENANT'S USE OF THE PREMISES. The Premises may be used
for the use or uses set forth in Subparagraph 1(m) only.
(b) COMPLIANCE. At Tenant's sole cost and expense, Tenant
agrees to procure, maintain and hold available for Landlord's inspection, all
governmental licenses and permits required for the proper and lawful conduct
of Tenant's business from the Premises, if any. Tenant agrees not to use,
alter or occupy the Premises or allow the Premises to be used, altered or
occupied in violation of, and Tenant, at its sole cost and expense, agrees to
use and occupy the Premises and cause the Premises to be used and occupied in
compliance with: (i) any and all laws, statutes, zoning restrictions,
ordinances, rules, regulations, orders and rulings now or hereafter in force
and any requirements of any insurer, insurance authority or duly constituted
public authority having jurisdiction over the Premises now or hereafter in
force, (ii) the requirements of the Board of Fire Underwriters and any other
similar body, (iii) the Certificate of Occupancy issued for the Building, and
(iv) any recorded covenants, conditions and restrictions and similar
regulatory agreements, if any, which affect the use, occupation or alteration
of the Premises. Tenant agrees to comply with the Rules and Regulations
referenced in Paragraph 28 below. Tenant agrees not to do or permit anything
to be done in or about the Premises which will in any manner obstruct or
interfere with the rights of other tenants or occupants of the Development,
or injure or unreasonably annoy them, or use or allow the Premises to be used
for any unlawful or unreasonably objectionable purpose. Tenant agrees not to
cause, maintain or permit any nuisance or waste in, on, under or about the
Premises. Notwithstanding anything contained in this Lease to the contrary,
all transferable development rights related in any way to the Development are
and will remain vested in Landlord, and Tenant hereby waives any rights
thereto.
(c) HAZARDOUS MATERIALS; TENANT. Except for ordinary and
general office supplies, such as copier toner, liquid paper, glue, ink and
common household cleaning materials and other supplies or materials (in
customary amounts) necessary for the operation of Tenant's business (some or
all of which may constitute "Hazardous Materials" as defined in this Lease),
Tenant agrees not to cause or knowingly permit any Hazardous Materials to be
brought upon, stored, used, handled, generated, released or disposed of on,
in, under or about the Premises, the Building, the Development or any portion
thereof by Tenant, its agents, employees, subtenants, assignees, licensees or
contractors (collectively, "Tenant's Parties"), without the prior written
consent of Landlord, which consent Landlord may withhold in its sole and
absolute discretion. Concurrently with the execution of this Lease, Tenant
agrees to complete and deliver to Landlord an Environmental Questionnaire in
the form of Exhibit "H" attached hereto. Upon the expiration or earlier
termination of this Lease, Tenant agrees to promptly remove from the
Premises, at its sole cost and expense, any and all Hazardous Materials,
including any equipment or systems containing Hazardous Materials which are
installed, brought upon, stored, used, generated or released upon, in, under
or about the Premises, the Building, the Development or any portion thereof
by Tenant or any of Tenant's Parties. To the fullest extent permitted by
law, Tenant agrees to promptly indemnify, protect, defend and hold harmless
Landlord and Landlord's partners, officers, directors, employees, agents,
successors and assigns (collectively, "Landlord Indemnified Parties") from
and against any and all claims, damages, judgments, suits, causes of action,
losses, liabilities, penalties, fines, expenses and costs (including, without
limitation, clean-up, removal, remediation and restoration costs, sums paid
in settlement of claims, attorneys' fees, consultant fees and expert fees and
court costs) which arise directly or result directly from the release of
Hazardous Materials on, in, under or about the Premises, the Building or any
other portion of the Development and which are caused or knowingly permitted
by Tenant or any of Tenant's Parties. Tenant agrees to promptly notify
Landlord of any release of Hazardous Materials at the Premises, which Tenant
becomes aware of during the Term of this Lease, whether caused by Tenant or
any other persons or entities. In the event of any release of Hazardous
Materials caused or permitted by Tenant or any of Tenant's Parties, Landlord
shall have the right, but not the obligation, to cause Tenant to immediately
take all steps Landlord deems necessary or appropriate to remediate such
release and prevent any similar future release to the satisfaction of
Landlord and Landlord's mortgagee(s). As used in this Lease, the term
"Hazardous Materials" shall mean and include any hazardous or toxic
materials, substances or wastes as now or hereafter designated under any law,
statute, ordinance, rule, regulation, order or ruling of any agency of the
State, the United States Government or any local governmental authority,
including, without limitation, asbestos, petroleum, petroleum hydrocarbons
and petroleum based products, urea formaldehyde foam insulation,
polychlorinated biphenyls ("PCBs"), and freon and other chlorofluorocarbons.
The term "Environmental Law" means any federal, state or local law, statute,
ordinance, regulation or order pertaining to health, industrial hygiene,
environmental conditions or Hazardous Materials. The provisions of this
Subparagraph 8(c) will survive the expiration or earlier termination of this
Lease.
(d) HAZARDOUS MATERIALS; LANDLORD. Prospective Purchaser
Consent Decree Re: Sternco Property, Renton, Washington (King County Cause
No. 97-2-1-17988-2SEA) ("Consent Decree"), entered on July 22, 1997, pursuant
to the
-4-
Washington State Model Toxics Control Act (Chapter 70.105D RCW), requires
Landlord to complete the remediation of releases of certain Hazardous
Materials at a site consisting of approximately 45 acres, and including the
legal parcel on which the Premises are located. Landlord did not cause or
contribute to the release or threatened release of Hazardous Materials that
required remediation under the terms of the Decree. Landlord has completed
all remediation activities required under the terms of the Decree at the
legal parcel on which the Premises are located. Pursuant to the terms of the
Decree, the Washington State Department of Ecology has certified in writing
that all clean-up activities required under the terms of Decree at the legal
parcel on which the Premises are located have been completed and that no
further action is necessary under the terms of the Decree on such legal
parcel, with the exception of continuing groundwater monitoring and
maintenance of institutional controls, which Landlord shall undertake at
Landlord's sole expense. The interest conveyed hereby is subject to the
effect of a Restrictive Covenant recorded in the public land records as
Document No. 97-2-17988-2SEA, in favor of, and enforceable by, the State of
Washington. Landlord shall promptly protect, indemnify, defend and hold
harmless Tenant and its directors, officers, employees, agents, parents,
subsidiaries, successors and assigns ("Tenant Indemnified Parties") from and
against any and all claims, judgments, suits, causes of action, penalties,
fines, loss, damage, cost, expense or liability (including without
limitation, clean-up, removal, remediation and restoration costs, sums paid
in settlement of claims, consultant fees and expert fees, attorneys' fees and
costs) arising directly out of, or resulting directly from, the presence at
the Premises of Hazardous Materials on, in, under or about the Building or
the Development prior to the date of this Lease or caused by Landlord or its
agents, contractors or employees. Nothing in this indemnity shall require
Landlord to protect, indemnify, defend or hold harmless Tenant or any Tenant
Indemnified Parties from any loss, damage, cost, expense or liability
(including reasonable attorneys' fees and costs) arising out of Tenant's
release (or release by any of Tenant's Parties) of Hazardous Materials and/or
Tenant's violation (or the violation by any of Tenant's Parties) of any
Environmental Law. The provisions of this Subparagraph 8(d) shall survive
expiration or earlier termination of this Lease.
9. NOTICES. Any notice required or permitted to be given
hereunder must be in writing and may be given by personal delivery (including
delivery by overnight courier or an express mailing service) or by mail, if
sent by registered or certified mail. Notices to Tenant shall be sufficient
if delivered to Tenant at the address designated in Subparagraph 1(b) and
notices to Landlord shall be sufficient if delivered to Landlord at the
address designated in Subparagraph 1(a). Either party may specify a
different address for notice purposes by written notice to the other, except
that the Landlord may in any event use the Premises as Tenant's address for
notice purposes.
10. BROKERS. The parties acknowledge that the broker(s) who
negotiated this Lease are stated in Subparagraph 1(n). Each party represents
and warrants to the other, that, to its knowledge, no other broker, agent or
finder (a) negotiated or was instrumental in negotiating or consummating this
Lease on its behalf, and (b) is or might be entitled to a commission or
compensation in connection with this Lease. Landlord and Tenant each agree
to promptly indemnify, protect, defend and hold harmless the other from and
against any and all claims, damages, judgments, suits, causes of action,
losses, liabilities, penalties, fines, expenses and costs (including
attorneys' fees and court costs) resulting from any breach by the
indemnifying party of the foregoing representation, including, without
limitation, any claims that may be asserted by any broker, agent or finder
undisclosed by the indemnifying party. The foregoing mutual indemnity shall
survive the expiration or earlier termination of this Lease.
11. SURRENDER; HOLDING OVER.
(a) SURRENDER. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, shall not constitute a
merger, and shall, at the option of Landlord, operate as an assignment to
Landlord of any or all subleases or subtenancies. Upon the expiration or
earlier termination of this Lease, Tenant agrees to peaceably surrender the
Premises to Landlord broom clean and in a state of good order, repair and
condition, ordinary wear and tear and casualty damage (if this Lease is
terminated as a result thereof pursuant to Paragraph 20) excepted, together
with all of Tenant's personal property and Alterations (as defined in
Paragraph 13) removed from the Premises to the extent required under
Paragraph 13 and all damage caused by such removal repaired as required by
Paragraph 13. The delivery of keys to any employee of Landlord or to
Landlord's agent or any employee thereof alone will not be sufficient to
constitute a termination of this Lease or a surrender of the Premises.
(b) HOLDING OVER. Tenant will not be permitted to hold over
possession of the Premises after the expiration or earlier termination of the
Term. If Tenant holds over after the expiration or earlier termination of
the Term, Landlord may, at its option, treat Tenant as a tenant at sufferance
only, and such continued occupancy by Tenant shall be subject to all of the
terms, covenants and conditions of this Lease, so far as applicable, except
that the Monthly Base Rent for any such holdover period shall be equal to one
hundred fifty percent (150%) of the Monthly Base Rent in effect under this
Lease immediately prior to such holdover, prorated on a daily basis.
Acceptance by Landlord of rent after such expiration or earlier termination
will not result in a renewal of this Lease. The foregoing provisions of this
Paragraph 11 are in addition to and do not affect Landlord's right of
re-entry or any rights of Landlord under this Lease or as otherwise provided
by law. If Tenant fails to surrender the Premises upon the expiration of
this Lease in accordance with the terms of this Paragraph 11 despite demand
to do so by Landlord, Tenant agrees to promptly indemnify, protect, defend
and hold Landlord harmless from all claims, damages, judgments, suits, causes
of action, losses, liabilities, penalties, fines, expenses and costs
(including attorneys' fees and costs), including, without limitation, costs
and expenses incurred by Landlord in returning the Premises to the condition
in which Tenant was to surrender it and claims made by any succeeding tenant
founded on or resulting from Tenant's failure to surrender the Premises. The
provisions of this Subparagraph 11(b) will survive the expiration or earlier
termination of this Lease.
12. TAXES.
(a) PAYMENT OF TAXES. If the Premises are separately
assessed, Tenant agrees to pay all real property taxes, as defined in
Paragraph 12(b) below, applicable to the Premises during the term of this
Lease. All such payments shall be made at least ten (10) days prior to the
due date of such payment. Tenant agrees to promptly furnish Landlord with
satisfactory evidence that such real property taxes have been paid. If any
such real property taxes paid by Tenant shall cover any period of time prior
to or after the expiration of the term thereof, Tenant's share of such real
property taxes is to be equitably prorated to cover only the period of time
within the tax fiscal year during which this Lease shall be in effect, and
Landlord will promptly reimburse Tenant to the extent required. If Tenant
fails to pay any such real property taxes, Landlord will have the right to
pay the same, in which case Tenant will repay such amount to Landlord with
Tenant's next rent installment together with interest at the rate at the
Interest Rate. In the event real property taxes are billed to Landlord,
Tenant shall pay its pro rata share as determined in Paragraph 12(c) below of
said taxes within thirty (30) days after billing by Landlord.
(b) DEFINITION OF "REAL PROPERTY TAXES". As used herein, the
term "real property taxes" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license fee,
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on or with respect to the Premises
by any authority having the direct or indirect power to tax, including any
city, state or federal government, or any school, agricultural, sanitary,
fire,
-5-
street, drainage or other improvement district thereof, as against any legal
or equitable interest of Landlord in the Premises or in the real property of
which the Premises are a part, as against Landlord's right to rent or other
income therefrom, and as against Landlord's business of leasing the Premises.
Assessments and improvement bonds shall be amortized over the longest
allowable period and Tenant shall be responsible for only those portions
coming due during the Term of this Lease. The term "real property taxes"
shall also include any tax, fee, levy, assessment or charge (i) in
substitution of, partially or totally, any tax, fee, levy, assessment or
charge herein above included within the definition of "real property tax";
(ii) the nature of which was hereinabove included within the definition of
"real property tax"; (iii) which is measured by or reasonably attributable to
the cost or value of Tenant's equipment, fixtures or other property located
on the Premises or Tenant's leasehold improvements made in or to the
Premises, regardless of whether title to such improvements shall be in
Landlord or Tenant (except to the extent covered b Subparagraph 12(d) below);
(iv) upon or measured by the rent payable hereunder; and (v) upon or with
respect to the possession, leasing, operation, maintenance, management,
repair, use or occupancy of the Premises or any portion thereof.
(c) JOINT ASSESSMENT. If the Premises are not separately
assessed, Tenant's liability shall be an equitable proportion of the real
property taxes for all of the land and improvement included within the tax
parcel assessed, such proportion to be determined by Landlord from the
respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available.
(d) PERSONAL PROPERTY TAXES. Tenant agrees to pay prior to
delinquency all taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of Tenant contained in
the Premises or elsewhere. When possible, Tenant will cause said trade
fixtures, furnishings, equipment and all other personal property !o be
assessed and billed separately from the real property of Landlord. If any of
Tenant's personal property is assessed with Landlord's real property, Tenant
shall pay Landlord the taxes attributable to Tenant within thirty (30) days
after receipt of a written statement setting forth the taxes applicable to
Tenant's property.
13. ALTERATIONS. After installation of the initial Tenant
Improvements for the Premises pursuant to Exhibit "C", Tenant may, at its
sole cost and expense, make alterations, additions, improvements, "Utility
Installations" and decorations to the Premises (collectively, "Alterations")
subject to and only upon the following terms and conditions:
(a) PROHIBITED ALTERATIONS. Tenant may not make any
Alterations which: (i) affect any area outside the Premises; (ii) affect the
Building's structure, roof, equipment, services or systems, or the proper
functioning thereof, or Landlord's access thereto; (iii) affect the outside
appearance or character of the Building or affect the appearance, character
or use of the Common Areas; (iv) in the reasonable opinion of Landlord,
lessen the value of the Building; or (v) will violate any occupancy
certificate applicable to the Premises. As used in this Paragraph 13, the
term "Utility Installations" means carpeting, window coverings, air lines,
power panels, electrical distribution systems, heating, ventilation and air
conditioning systems, plumbing systems, fencing, landscaping, or gas lines.
(b) LANDLORD'S APPROVAL. Before proceeding with any
Alterations which are not prohibited in Subparagraph 13(a) above, Tenant must
first obtain Landlord's written approval of the plans, specifications and
working drawings for such Alterations, which approval Landlord will not
unreasonably withhold or delay; provided, however, Landlord's prior approval
will not be required for any such Alterations which are not prohibited by
Subparagraph 13(a) above and which cost less than One Hundred Thousand
Dollars ($100,000) per Lease Year as long as (i) Tenant delivers to Landlord
notice and a copy of any final plans, specifications and working drawings for
any such Alterations at least ten (10) days prior to commencement of the work
thereof, and (ii) the other conditions of this Paragraph 13 are satisfied,
including, without limitation, conforming to Landlord's rules, regulations
and insurance requirements which govern contractors. Landlord's approval of
plans, specifications and/or working drawings for Alterations will not create
any responsibility or liability on the part of Landlord for their
completeness, design sufficiency, or compliance with applicable permits,
laws, rules and regulations of governmental agencies or authorities.
(c) CONTRACTORS. Alterations may be made or installed only
by contractors and subcontractors which have been approved by Landlord, which
approval Landlord will not unreasonably withhold or delay. Before proceeding
with any Alterations, Tenant agrees to provide Landlord with ten (10) days'
prior written notice and Tenant's contractors must obtain and maintain, on
behalf of Tenant and at Tenant's sole cost and expense, all necessary
governmental permits and approvals for the commencement and completion of
such Alterations. Throughout the performance of any Alterations, Tenant
agrees to obtain, or cause its contractors to obtain, workers compensation
insurance and general liability insurance in compliance with the provisions
of Paragraph 19 of this Lease.
(d) MANNER OF PERFORMANCE. All Alterations must be
performed: (i) in accordance with the approved plans, specifications and
working drawings; (ii) in a lien-free and first-class and workmanlike manner;
(iii) in compliance with all applicable permits, laws, statutes, ordinances,
rules, regulations, orders and rulings now or hereafter in effect and imposed
by any governmental agencies and authorities which assert jurisdiction; (iv)
in such a manner so as not to interfere with the occupancy of any other
tenant of the Development, nor impose any additional expense upon Landlord;
and (v) at such times, in such manner, and subject to such rules and
regulations as Landlord may from time to time reasonably designate.
(e) OWNERSHIP. The Tenant Improvements and all Alterations
will become the property of Landlord and will remain upon and be surrendered
with the Premises at the end of the Term of this Lease; provided, however,
Landlord may, by written notice delivered to Tenant concurrently with
Landlord's approval of the final working drawings for any Alterations,
identify those Alterations which Landlord will require Tenant to remove at
the expiration or earlier termination of this Lease. Landlord may also
require Tenant to remove Alterations which Landlord did not have the
opportunity to approve as provided in this Paragraph 13. If Landlord
requires Tenant to remove any Alterations, Tenant, at its sole cost and
expense, agrees to remove the identified Alterations on or before the
expiration or earlier termination of this Lease and repair any damage to the
Premises caused by such removal (or, at Landlord's option, Tenant agrees to
pay to Landlord all of Landlord's costs of such removal and repair).
(f) PLAN REVIEW. Tenant agrees to pay Landlord, as
additional rent, the reasonable costs of professional services and costs for
general conditions of Landlord's third party consultants if utilized by
Landlord (but not Landlord's "in-house" personnel) for review of all plans,
specifications and working drawings for any Alterations, within thirty (30)
days after Tenant's receipt of invoices either from Landlord or such
consultants.
(g) PERSONAL PROPERTY. All articles of personal property
owned by Tenant or installed by Tenant at its expense in the Premises
(including Tenant's business and trade fixtures, furniture, movable
partitions and equipment [such as telephones, copy machines, computer
terminals, refrigerators and facsimile machines]) will be and remain the
property of Tenant, and must be removed by Tenant from the Premises, at
Tenant's sole cost and expense, on or before the expiration or earlier
termination of
-6-
this Lease. Tenant agrees to repair any damage caused by such removal at its
cost on or before the expiration or earlier termination of this Lease.
(h) REMOVAL OF ALTERATIONS. If Tenant fails to remove by the
expiration or earlier termination of this Lease all of its personal property,
or any Alterations identified by Landlord for removal, Landlord may, at its
option, treat such failure as a hold-over pursuant to Subparagraph 11(b)
above, and/or Landlord may (without liability to Tenant for loss thereof)
treat such personal property and/or Alterations as abandoned and, at Tenant's
sole cost and expense, and in addition to Landlord's other rights and
remedies under this Lease, at law or in equity: (a) remove and store such
items; and/or (b) upon ten (10) days' prior notice to Tenant, sell, discard
or otherwise dispose of all or any such items at private or public sale for
such price as Landlord may obtain or by other commercially reasonable means.
Tenant shall be liable for all costs of disposition of Tenant's abandoned
property and Landlord shall have no liability to Tenant with respect to any
such abandoned property. Landlord agrees to apply the proceeds of any sale
of any such property to any amounts due to Landlord under this Lease from
Tenant (including Landlord's attorneys' fees and other costs incurred in the
removal, storage and/or sale of such items), with any remainder to be paid to
Tenant.
14. REPAIRS.
(a) TENANT'S OBLIGATIONS. Subject to Landlord's obligations
under Subparagraph 14(c) below, Tenant agrees to keep in good order,
condition and repair the Premises and every part thereof, including, without
limiting the generality of the foregoing, all plumbing, heating, ventilation,
air conditioning (notwithstanding the foregoing, Landlord shall procure and
maintain, at Tenant's sole cost and expense, a heating, ventilation and air
conditioning system maintenance contract and Tenant shall pay direct to
Landlord's contractor the actual and reasonable costs incurred in connection
therewith as additional rent under this Lease), electrical, lighting
facilities and equipment within the Premises, fixtures, walls (interior
only), ceilings, floors, windows, doors, plate glass and skylights located
within the Premises, dock levelers, dock bumpers, truck doors, interior pest
control, and signs located on the Premises. Tenant agrees to cause any
mechanics' liens or other liens arising as a result of work performed by
Tenant or at Tenant's direction to be eliminated as provided in Paragraph 15
below.
(b) TENANT'S FAILURE TO REPAIR. If Tenant refuses or
neglects to repair and maintain the Premises properly as required hereunder
to the reasonable satisfaction of Landlord, Landlord, at any time following
thirty (30) days from the date on which Landlord makes a written demand on
Tenant to effect such repair and maintenance, may enter upon the Premises and
make such repairs and/or maintenance, and upon completion thereof, Tenant
agrees to pay to Landlord as additional rent, Landlord's costs for making
such repairs plus an amount not to exceed ten percent (10%) of such costs for
overhead, within thirty (30) days of receipt from Landlord of a written
itemized ▇▇▇▇ therefor. Any amounts not reimbursed by Tenant within such
thirty (30) day period will bear interest at the Interest Rate until paid by
Tenant.
(c) LANDLORD'S OBLIGATIONS. At Landlord's sole cost,
Landlord shall maintain and repair the structural roof, foundation and the
structural soundness of the exterior walls of the Building in good condition,
ordinary wear and tear and damage by fire or casualty, excepted; provided,
however, to the extent repairs to such items are required as a result of the
negligent or intentionally willful acts or omissions of Tenant or its
employees, agents, contractors or subtenants, such repairs plus an
administration fee of ten percent (10%) shall be made by Landlord at the sole
cost of Tenant. As part of Operating Expenses, Landlord shall be responsible
for the landscaping, parking lot and driveway sweeping and repaving, exterior
painting, and nonstructural roof. Except for the obligations of Landlord in
this Paragraph 14 above, under Paragraph 20 relating to damage or destruction
of the Premises, or under Paragraph 21 relating to eminent domain, it is
intended by the parties that Landlord have no obligation of any kind
whatsoever, (i) to repair or maintain the Premises or any portion thereof or
any equipment therein, all of which obligations are intended to be Tenant's
obligations, or (ii) to pay any other cost or expense whatsoever directly or
indirectly relating to the ownership, management, lease, operation or use of
the Premises. Except as expressly provided in this Lease, Tenant waives the
right to make repairs at Landlord's expense under any law, statute,
ordinance, rule, regulation, order or ruling.
(d) SELF-HELP. Notwithstanding anything to the contrary
contained in Paragraph 14(a) of this Lease, and in addition to any other
available remedies, if Landlord fails to perform any obligation under this
Lease which it is obligated to perform within the time periods set forth in
Paragraph 23 of this Lease following receipt of written notice from Tenant,
and if Landlord does not in good faith dispute that it is supposed to be
performing such obligation but fails to diligently attempt to do so, then
Tenant shall be permitted to perform such obligations on Landlord's behalf in
the Premises, provided Tenant first delivers to Landlord an additional two
(2) business days prior written notice that Tenant will be performing such
obligations, and provided Landlord fails to commence to perform such
obligations within such additional two (2) business day period. If the
obligations to be performed by Tenant will affect the structure of the
Building or the Building's life safety, electrical, plumbing, HVAC or
sprinkler systems, then Tenant shall use only those contractors used by
Landlord in the Building for work thereon, provided Landlord notifies Tenant
of the names of such contractors upon Tenant's request (unless such
contractors are unwilling or unable to perform such work, in which event
Tenant may utilize the services of any other qualified contractor approved by
Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed). All other contractors shall be subject to Landlord's reasonable
approval, and Landlord agrees to approve or reject any contractor proposed to
be used by Tenant within eight (8) business hours (i.e., between 8:00 a.m.
and 6:00 p.m., Monday through Friday) of receipt of Tenant's second notice,
provided that if a proposed contractor is licensed and bonded and all
requisite permits have been obtained for the desired work, then Landlord
agrees not to withhold its approval of the proposed contractor. Any work
performed by or on behalf of Tenant shall be performed in accordance with
provisions of clauses (ii), (iii) and (iv) of Paragraph 13(d) of this Lease.
Landlord agrees to promptly reimburse Tenant following the receipt of a
written statement of all reasonable and actual costs incurred by Tenant in
performing such obligations on behalf of Landlord ("Costs"). If Landlord
disputes Tenant's entitlement to some or all of the Costs and fails or
refuses to reimburse such Costs to Tenant within thirty (30) days after
Tenant's written demand therefor, then Tenant may deduct the Costs from rent
due under this Lease after and only to the extent Tenant has been authorized
to do so by the arbitrator pursuant to and in accordance with the terms of
Paragraph 44 of the Addendum hereof.
15. LIENS. Tenant agrees not to permit any mechanic's,
materialmen's or other liens to be filed against all or any part of the
Premises or the Development, nor against Tenant's leasehold interest in the
Premises, by reason of or in connection with any repairs, alterations,
improvements or other work contracted for or undertaken by Tenant or any
other act or omission of Tenant or Tenant's agents, employees, contractors,
licensees or invitees. At Landlord's request, Tenant agrees to provide
Landlord with enforceable, conditional and final lien releases (or other
evidence reasonably requested by Landlord to demonstrate protection from
liens) from all persons furnishing labor and/or materials at the Premises.
Landlord will have the right at all reasonable times to post on the Premises
and record any notices of non-responsibility which it deems necessary for
protection from such liens. If any such liens are filed, Tenant will, at its
sole cost, promptly cause such liens to be released of record or bonded so
that it no longer affects title to the Premises or the Development. If
Tenant fails to cause any such liens to be so released or bonded within
thirty (30) days after receiving notice of the filing thereof, such failure
will be deemed a material breach by Tenant under this Lease without the
benefit of any additional notice or cure period described in Paragraph 22
below, and Landlord may, without waiving its rights and remedies
-7-
based on such breach, and without releasing Tenant from any of its
obligations, cause such liens to be released by any means it shall deem
proper, including payment in satisfaction of the claims giving rise to such
liens. Tenant agrees to pay to Landlord within thirty (30) days after
receipt of invoice from Landlord, any sum paid by Landlord to remove such
liens, together with interest at the Interest Rate from the date of such
payment by Landlord.
16. ENTRY BY LANDLORD. Landlord and its employees and agents will
at all times (during normal business hours and after at least 48 hours prior
written notice to Tenant, except in the case of emergency, in which event no
prior notice to Tenant shall be required) have the right to enter the
Premises to inspect the same, to show the Premises to prospective purchasers
or, during the last 180 days of the Term, to tenants, to post notices of
nonresponsibility, and/or to repair the Premises as permitted or required by
this Lease. In exercising such entry rights, Landlord will endeavor to
minimize, as reasonably practicable, the interference with Tenant's business,
and will provide Tenant with reasonable advance notice of any such entry
(except in emergency situations). Landlord may, in order to carry out such
purposes, erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed. Landlord will at all
times have and retain a key with which to unlock all doors in the Premises,
excluding Tenant's vaults and safes. Landlord will have the right to use any
and all means which Landlord may reasonably deem proper to open said doors in
an emergency in order to obtain entry to the Premises. Any entry to the
Premises obtained by Landlord by any of said means, or otherwise, will not be
construed or deemed to be a forcible or unlawful entry into the Premises, or
an eviction of Tenant from the Premises.
17. UTILITIES AND SERVICES. Tenant agrees to contract directly
for and to pay for all water, gas, heat, light, power, telephone, waste/trash
removal, sewer and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately
metered to Tenant, Tenant agrees to pay a reasonable proportion to be
determined by Landlord of all charges jointly metered with other Premises.
Landlord will not be liable to Tenant for any failure to furnish any of the
foregoing utilities and services if such failure is caused by all or any of
the following: (i) accident, breakage or repairs; (ii) strikes, lockouts or
other labor disturbance or labor dispute of any character; (iii) governmental
regulation, moratorium or other governmental action or inaction; (iv)
inability despite the exercise of reasonable diligence to obtain electricity,
water or fuel; or (v) any other cause beyond Landlord's reasonable control.
In addition, in the event of any stoppage or interruption of services or
utilities, Tenant shall not be entitled to any abatement or reduction of rent
(except as expressly provided in Subparagraphs 20(f) or 21(b) if such failure
results from a damage or taking described therein), no eviction of Tenant
will result from such failure and Tenant will not be relieved from the
performance of any covenant or agreement in this Lease because of such
failure. Notwithstanding anything in this Lease to the contrary, if, as a
result of the negligent acts or omissions of Landlord or its agents,
contractors or employees, for more than three (3) consecutive business days
following written notice to Landlord, there is no elevator service to the
Premises, or no HVAC or electricity to the Premises, or such an interruption
of other essential utilities and building services, such as fire protection
or water, so that any portion of the Premises cannot be and is not used by
Tenant, in Tenant's judgment reasonably exercised, then Tenant's rent shall
thereafter be abated until the Premises are again usable by Tenant in
proportion to the extent to which Tenant's use of the Premises is interfered
with; provided, however, that if Landlord is diligently pursuing the repair
of such utilities or services and Landlord provides substitute services
reasonably suitable for Tenant's purposes, as for example, bringing in
portable air-conditioning equipment, then there shall not be an abatement of
rent. This paragraph shall not apply in case of damage to, or destruction
of, the Building, which shall be governed by a separate provision of this
Lease. Notwithstanding the foregoing, Tenant may not ▇▇▇▇▇ rent if Landlord
disputes Tenant's right to ▇▇▇▇▇ or the amount thereof until and only to the
extent the arbitrator provides that Tenant may do so in accordance with and
pursuant to the terms of Paragraph 44 hereof.
18. ASSUMPTION OF RISK AND INDEMNIFICATION.
(a) ASSUMPTION OF RISK. Tenant, as a material part of the
consideration to Landlord, hereby agrees that neither Landlord nor any
Landlord Indemnified Parties (as defined in Subparagraph 8(c) above) will be
liable to Tenant for, and Tenant expressly assumes the risk of and waives any
and all claims it may have against Landlord or any Landlord Indemnified
Parties with respect to, (i) any and all damage to property or injury to
persons in, upon or about the Premises (except that resulting from the
negligent or willful act or omission of Landlord or its employees, agents or
contractors), (ii) any such damage caused by other tenants or persons in or
about the Premises, or caused by quasi-public work, (iii) any loss of or
damage to property by theft or otherwise, or (iv) any injury or damage to
persons or property resulting from any casualty, explosion, falling plaster
or other masonry or glass, steam, gas, electricity, water or rain which may
leak from any part of the Building or from the pipes, appliances or plumbing
works therein or from the roof, street or subsurface or from any other place,
or resulting from dampness (except to the extent resulting from the negligent
or willful act or omission of Landlord or its employees, agents or
contractors). Notwithstanding anything to the contrary contained in this
Lease, neither Landlord nor any Landlord Indemnified Parties will be liable
for consequential damages arising out of any loss of the use of the Premises
or any equipment or facilities therein by Tenant or any Tenant Parties.
(b) INDEMNIFICATION. Tenant will be liable for, and agrees,
to the maximum extent permissible under applicable law, to promptly
indemnify, protect, defend and hold harmless Landlord and Landlord
Indemnified Parties, from and against, any and all claims, damages,
judgments, suits, causes of action, losses, liabilities, penalties, fines,
expenses and costs, including attorneys' fees and court costs (collectively,
"Indemnified Claims"), arising or resulting from (i) any negligent act or
omission of Tenant or any Tenant Parties (as defined in Subparagraph 8(c)
above); (ii) the use of the Premises and conduct of Tenant's business by
Tenant or any Tenant Parties, or any other activity, work or thing done,
knowingly permitted or suffered by Tenant or any Tenant Parties, in or about
the Premises; and/or (iii) any default by Tenant of any obligations on
Tenant's part to be performed under the terms of this Lease. In case any
action or proceeding is brought against Landlord or any Landlord Indemnified
Parties by reason of any such Indemnified Claims, Tenant, upon notice from
Landlord, agrees to promptly defend the same at Tenant's sole cost and
expense by counsel approved in writing by Landlord, which approval Landlord
will not unreasonably withhold.
(c) SURVIVAL; NO RELEASE OF INSURERS. Tenant's
indemnification obligations under Subparagraph 18(b) will survive the
expiration or earlier termination of this Lease. Tenant's covenants,
agreements and indemnification obligation in Subparagraphs 18(a) and 18(b)
above, are not intended to and will not relieve any insurance carrier of its
obligations under policies required to be carried by Tenant pursuant to the
provisions of this Lease.
(d) INDEMNITY BY LANDLORD. Notwithstanding anything to the
contrary contained in Paragraph 18 of, or elsewhere in, this Lease, Tenant
shall not be required to indemnify and hold Landlord harmless from any
Indemnified Claims resulting from the negligence or willful misconduct of
Landlord or Landlord's agents, employees or contractors (except for damage to
Tenant's personal property, fixtures, furniture and equipment in the
Premises, to the extent Tenant is required to obtain insurance coverage
therefor pursuant to the terms of this Lease), and, subject to the
limitations contained in (i) the second to the last sentence of Paragraph
18(a) of this Lease, and (ii) Paragraph 35 of this Lease, Landlord agrees to
indemnify and hold Tenant harmless from and against any and all such
Indemnified Claims and all Indemnified Claims arising or resulting from (i)
any negligent act or omission of Landlord or its employees, agents or
contractors, and/or (ii) any default by Landlord of any of its obligations
under this Lease.
-8-
Landlord's indemnification obligations under this paragraph will survive the
expiration or earlier termination of this Lease and are not intended to and
will not relieve any insurance carrier of its obligations under policies
required to be carried by Landlord and/or by Tenant pursuant to the
provisions of this Lease.
19. INSURANCE.
(a) TENANT'S INSURANCE. On or before the date Tenant is
permitted any access to the Premises pursuant to this Lease (which may be
prior to the Commencement Date), and continuing throughout the entire Term
hereof and any other period of occupancy, Tenant agrees to keep in full force
and effect, at its sole cost and expense, the following insurance:
(i) "All Risks" property insurance including at least
the following perils: fire and extended coverage, smoke damage, vandalism,
malicious mischief, and sprinkler leakage. This insurance policy must be
upon all property owned by Tenant, for which Tenant is legally liable, or
which is installed at Tenant's expense, and which is located in the Premises
including, without limitation, any Alterations and all furniture, fittings,
installations, fixtures and any other personal property of Tenant, in an
amount not less than the full replacement cost thereof.
(ii) One (1) year insurance coverage for business
interruption and loss of income and extra expense insuring the same perils
described in Subparagraph 19(a)(i) above, in such amounts as will reimburse
Tenant for any direct or indirect loss of earnings attributable to any such
perils including prevention of access to the Premises, Tenant's parking areas
or the Building as a result of any such perils.
(iii) Commercial General Liability Insurance (on an
occurrence form) insuring bodily injury, personal injury and property damage
including the following divisions and extensions of coverage: Premises and
Operations; Owners and Contractors protective; blanket contractual liability
(including coverage for Tenant's indemnity obligations under this Lease); and
products and completed operations. Such insurance must have the following
minimum limits of liability: bodily injury, personal injury and property
damage - $5,000,000 each occurrence, provided that if liability coverage is
provided by a Commercial General Liability policy the general aggregate limit
shall apply separately and in total to this location only (per location
general aggregate).
(iv) Comprehensive Automobile Liability insuring bodily
injury and property damage arising from all owned, non-owned and hired
vehicles, if any, with minimum limits of liability of $1,000,000 per accident.
(v) Worker's Compensation or similar insurance as
required by the laws of the State.
(vi) Any other form or forms of insurance as Tenant or
Landlord or any mortgagees of Landlord may reasonably require from time to
time in form, in amounts, and for insurance risks against which, a prudent
tenant would protect itself, but only to the extent coverage for such risks
and amounts are available in the insurance market at commercially acceptable
rates. Landlord makes no representation that the limits of liability required
to be carried by Tenant under the terms of this Lease are adequate to protect
Tenant's interests and Tenant should obtain such additional insurance or
increased liability limits as Tenant deems appropriate.
(b) SUPPLEMENTAL TENANT INSURANCE REQUIREMENTS. All policies
must be in a form reasonably satisfactory to Landlord and issued by an
insurer admitted to do business in the State. All policies must be issued by
insurers with a minimum policyholder rating of "A-" and a financial rating of
"VII" in the most recent version of Best's Key Rating Guide. All policies
must contain a requirement to notify Landlord (and Landlord's property
manager and any mortgagees or ground lessors of Landlord who are named as
additional insureds, if any) in writing not less than thirty (30) days prior
to any material change, reduction in coverage, cancellation or other
termination thereof. Tenant agrees to deliver to Landlord, as soon as
practicable after placing the required insurance, but in any event within the
time frame specified in Subparagraph 19(a) above, certificate(s) of insurance
evidencing the existence of such insurance and Tenant's compliance with the
provisions of this Paragraph 19. Tenant agrees to cause replacement
certificates to be delivered to Landlord not less than thirty (30) days prior
to the expiration of any such policy or policies. If any such initial or
replacement certificates are not furnished within the time(s) specified
herein, Tenant will be deemed to be in material default under this Lease
without the benefit of any additional notice or cure period provided in
Subparagraph 22(a)(iii) below, and Landlord will have the right, but not the
obligation, to procure such insurance as Landlord deems necessary to protect
Landlord's interests at Tenant's expense. If Landlord obtains any insurance
that is the responsibility of Tenant under this ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ agrees
to 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 and Tenant agrees to promptly reimburse Landlord for such costs as
additional rent. General Liability and Automobile Liability policies under
Subparagraphs 19(a)(iii) and (iv) must name Landlord and Landlord's property
manager (and at Landlord's request, Landlord's mortgagees and ground lessors
of which Tenant has been informed in writing) as additional insureds and must
also contain a provision that the insurance afforded by such policy is
primary insurance and any insurance carried by Landlord and Landlord's
property manager or Landlord's mortgagees or ground lessors, if any, will be
excess over and non-contributing with Tenant's insurance.
(c) BUILDING INSURANCE. Landlord shall obtain, as an
Operating Expense, a policy or policies of insurance covering loss or damage
to the Premises, in the amount of the full replacement value thereof, as the
same may exist from time to time, but in no event less than the total amount
required by lenders having liens on the Premises, against all perils included
within the classification of fire, extended coverage, vandalism, malicious
mischief, and special extended perils ("All Risk" as such term is used in the
insurance industry), including twelve (12) months rent loss insurance.
Landlord may also elect to insure the perils of flood and/or earthquake.
Said insurance shall provide for payment of loss to Landlord, or to the
holders of mortgages or the beneficiaries under deeds of trust on the
Premises. If such insurance coverage has a deductible clause, the deductible
amount shall not exceed Ten Thousand ($10,000) per occurrence, and Tenant
will be liable for such deductible and Tenant agrees to reimburse Landlord
for the entire cost of such premiums within thirty (30) days after demand
therefor by Landlord. If the Premises are part of a group of buildings owned
by Landlord which are adjacent to the Premises, then Tenant shall pay for any
increase in the property insurance of such other buildings if said increase
is caused by Tenant's acts, omissions, use or occupancy of the Premises.
(d) TENANT'S USE. Tenant will not keep, use, sell or offer
for sale in or upon the Premises any article which may be prohibited by any
insurance policy periodically in force covering the Premises. If Tenant's
occupancy or business in, or on, the Premises, whether or not Landlord has
consented to the same, results in any increase in premiums for the insurance
periodically carried by Landlord with respect to the Building or results in
the need for Landlord to maintain special or additional insurance, Tenant
agrees to pay Landlord the cost of any such increase in premiums or special
or additional coverage as additional rent within thirty (30) days after being
billed therefor by Landlord. In determining whether increased premiums are a
result of Tenant's use of the Premises, a schedule issued by the organization
computing the insurance rate on the Building showing the various components
of such rate, will be
-9-
conclusive evidence of the several items and charges which make up such rate.
Tenant agrees to promptly comply with all reasonable requirements of the
insurance authority or any present or future insurer relating to the Premises.
(e) CANCELLATION OF LANDLORD'S POLICIES. If any of
Landlord's insurance policies are canceled or cancellation is threatened or
the coverage reduced or threatened to be reduced in any way because of the
use of the Premises or any part thereof by Tenant or any assignee or
subtenant of Tenant or by anyone Tenant permits on the Premises and, if
Tenant fails to remedy the condition giving rise to such cancellation,
threatened cancellation, reduction of coverage, threatened reduction of
coverage, increase in premiums, or threatened increase in premiums, within
forty-eight (48) hours after notice thereof, Tenant will be deemed to be in
material default of this Lease and Landlord may, at its option, either
terminate this Lease or enter upon the Premises and attempt to remedy such
condition, and Tenant shall promptly pay Landlord the reasonable costs of
such remedy as additional rent. If Landlord is unable, or elects not to
remedy such condition, then Landlord will have all of the remedies provided
for in this Lease in the event of a default by Tenant.
(f) WAIVER OF CLAIMS. Notwithstanding any provision of this
Lease to the contrary, whenever (a) any loss, cost, damage or expense
(collectively, "damage") resulting from fire, explosion or any other casualty
is incurred by either Landlord or by Tenant or by anyone claiming by, through
or under Landlord or Tenant in connection with the Premises, its contents, or
the Development, and (b) such party is covered in whole or in part by
insurance with respect to such damage or is required under this Lease to be
so insured, then the party so insured (or so required) hereby waives (on its
own behalf and on behalf of its insurer) any claims against and releases the
other party from any liability said other party may have on account of such
damage. The foregoing is not intended to release Tenant from liability for
damage in connection with any such casualty up to the amount of the insurance
deductible as described in Paragraph 19(c) above.
(g) WAIVER OF WORKER'S COMPENSATION IMMUNITY. The
indemnification obligations contained in this Lease shall not be limited by
any worker's compensation, benefit or disability laws, and each indemnifying
party hereby waives any immunity that said indemnifying party may have under
the Industrial Insurance Act, Title 51 RCW and similar worker's compensation,
benefit or disability laws.
(h) PROVISIONS SPECIFICALLY NEGOTIATED. LANDLORD AND TENANT
ACKNOWLEDGE BY THEIR EXECUTION OF THIS LEASE THAT EACH OF THE INDEMNIFICATION
PROVISIONS OF THIS LEASE (SPECIFICALLY INCLUDING BUT NOT LIMITED TO THOSE
RELATING OT WORKER'S COMPENSATION BENEFITS AND LAWS) WERE SPECIFICALLY
NEGOTIATED AND AGREED TO BY LANDLORD AND TENANT.
20. DAMAGE OR DESTRUCTION.
(a) PARTIAL DESTRUCTION. If the Premises are damaged by fire
or other casualty to an extent not exceeding thirty-five percent (35%) of the
full replacement cost thereof, and Landlord's contractor reasonably estimates
in a writing delivered to Landlord and Tenant that the damage thereto may be
repaired, reconstructed or restored to substantially its condition
immediately prior to such damage within one hundred twenty (120) days from
the date of such casualty, and Landlord will receive insurance proceeds
sufficient to cover the costs of such repairs, reconstruction and restoration
(including proceeds from Tenant and/or Tenant's insurance which Tenant is
required to deliver to Landlord pursuant to Subparagraph 20(e) below to cover
Tenant's obligation for the costs of repair, reconstruction and restoration
of any portion of any Alterations for which Tenant is responsible under this
Lease), then Landlord agrees to commence and proceed diligently with the work
of repair, reconstruction and restoration and this Lease will continue in
full force and effect.
(b) SUBSTANTIAL DESTRUCTION. Any damage or destruction to
the Premises or the Building which Landlord is not obligated to repair
pursuant to Subparagraph 20(a) above will be deemed a substantial
destruction. In the event of a substantial destruction, Landlord may elect
to either: (i) repair, reconstruct and restore the portion of the Premises
damaged by such casualty, in which case this Lease will continue in full
force and effect, subject to Tenant's termination right contained in
Subparagraph 20(d) below; or (ii) terminate this Lease effective as of the
date which is thirty (30) days after Tenant's receipt of Landlord's election
to so terminate.
(c) NOTICE. Under any of the conditions of Subparagraph
20(a) or (b) above, Landlord agrees to give written notice to Tenant of its
intention to repair or terminate, as permitted in such paragraphs, within the
earlier of forty-five (45) days after the occurrence of such casualty, or
fifteen (15) days after Landlord's receipt of the estimate from Landlord's
contractor (the applicable time period to be referred to herein as the
"Notice Period").
(d) TENANT'S TERMINATION RIGHTS. If Landlord elects to
repair, reconstruct and restore pursuant to Subparagraph 20(b)(i)
hereinabove, and if Landlord's contractor estimates that as a result of such
damage, Tenant cannot be given reasonable use of and access to the Premises
within two hundred ten (210) days after the date of such damage, then Tenant
may terminate this Lease effective upon delivery of written notice to
Landlord within ten (10) days after Landlord delivers notice to Tenant of its
election to so repair, reconstruct or restore.
(e) TENANT'S COSTS AND INSURANCE PROCEEDS. In the event of
any damage or destruction of all or any part of the Premises, Tenant agrees
to immediately (i) notify Landlord thereof, and (ii) deliver to Landlord all
property insurance proceeds received by Tenant with respect to any
Alterations, but excluding proceeds for Tenant's furniture, fixtures,
equipment and other personal property, whether or not this Lease is
terminated as permitted in this Paragraph 20, and Tenant hereby assigns to
Landlord all rights to receive such insurance proceeds. If, for any reason
(including Tenant's failure to obtain insurance for the full replacement cost
of any Alterations from any and all casualties), Tenant fails to receive
insurance proceeds covering the full replacement cost of any Alterations
which are damaged, Tenant will be deemed to have self-insured the replacement
cost of such items, and upon any damage or destruction thereto, Tenant agrees
to immediately pay to Landlord the full replacement cost of such items, less
any insurance proceeds actually received by Landlord from Landlord's or
Tenant's insurance with respect to such items.
(f) ABATEMENT OF RENT. In the event of any damage, repair,
reconstruction and/or restoration described in this Paragraph 20, rent will
be abated or reduced, as the case may be, in proportion to the degree to
which Tenant's use of the Premises is impaired during such period of repair
until such use is restored. Except for abatement of rent as provided
hereinabove, Tenant will not be entitled to any compensation or damages for
loss of, or interference with, Tenant's business or use or access of all or
any part of the Premises or for lost profits or any other consequential
damages of any kind or nature, which result from any such damage, repair,
reconstruction or restoration.
-10-
(g) INABILITY TO COMPLETE. Notwithstanding anything to the
contrary contained in this Paragraph 20, if Landlord is obligated or elects
to repair, reconstruct and/or restore the damaged portion of the Building or
the Premises pursuant to Subparagraph 20(a) or 20(b)(i) above, but is delayed
from completing such repair, reconstruction and/or restoration beyond the
date which is sixty (60) days after the date estimated by Landlord's
contractor for completion thereof by reason of any causes (other than delays
caused by Tenant, its subtenants, employees, agents or contractors or delays
which are beyond the reasonable control of Landlord as described in Paragraph
33), then either Landlord or Tenant may elect to terminate this Lease upon
ten (10) days' prior written notice given to the other after the expiration
of such sixty (60) day period.
(h) DAMAGE NEAR END OF TERM. Landlord and Tenant shall each
have the right to terminate this Lease if any material damage to the Building
occurs during the last twelve (12) months of the Term of this Lease where
Landlord's contractor estimates in a writing delivered to Landlord and Tenant
that the repair, reconstruction or restoration of such damage cannot be
completed within sixty (60) days after the date of such casualty. If either
party desires to terminate this Lease under this Subparagraph (h), it shall
provide written notice to the other party of such election within ten (10)
days after receipt of Landlord's contractor's repair estimates.
(i) WAIVER OF TERMINATION RIGHT. Landlord and Tenant agree
that the foregoing provisions of this Paragraph 20 are to govern their
respective rights and obligations in the event of any damage or destruction
and supersede and are in lieu of the provisions of any applicable law,
statute, ordinance, rule, regulation, order or ruling now or hereafter in
force which provide remedies for damage or destruction of leased premises.
(j) TERMINATION. Upon any termination of this Lease under
any of the provisions of this Paragraph 20, the parties will be released
without further obligation to the other from the date possession of the
Premises is surrendered to Landlord except for items which have accrued and
are unpaid as of the date of termination and matters which are to survive any
termination of this Lease as provided in this Lease.
21. EMINENT DOMAIN.
(a) SUBSTANTIAL TAKING. If the whole of the Premises or a
material portion thereof or of the parking areas for the Premises is taken
for any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation or eminent domain, or
sold to prevent such taking, either party will have the right to terminate
this Lease effective as of the date possession is required to be surrendered
to such authority. For purposes of the preceding sentence, a "material"
portion of the Premises or of the parking areas for the Premises is deemed to
be any portion without which Tenant can no longer viably operate its business
in the Premises.
(b) PARTIAL TAKING; ABATEMENT OF RENT. In the event of a
taking of a portion of the Premises which does not constitute a material
taking under Subparagraph 21(a) above, then, neither party will have the
right to terminate this Lease and Landlord will thereafter proceed to make a
functional unit of the remaining portion of the Premises (but only to the
extent Landlord receives proceeds therefor from the condemning authority),
and rent will be abated in proportion to percentage of parking or the floor
area of the Premises which Tenant is deprived of on account of such taking;
provided, however, there will be no abatement of rent if the only area taken
is that which does not have a building or parking area used by Tenant located
thereon.
(c) CONDEMNATION AWARD. In connection with any taking of all
or any portion of the Premises, Landlord will be entitled to receive the
entire amount of any award which may be made or given in such taking or
condemnation, without deduction or apportionment for any estate or interest
of Tenant, it being expressly understood and agreed by Tenant that no portion
of any such award will be allowed or paid to Tenant for any so-called bonus
or excess value of this Lease, and such bonus or excess value will be the
sole property of Landlord. Tenant agrees not to assert any claim against
Landlord or the taking authority for any compensation because of such taking
(including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Tenant will have the right
to recover from the condemning authority (but not from Landlord) any
compensation as may be separately awarded or recoverable by Tenant for the
taking of Tenant's furniture, fixtures, equipment and other personal property
within the Premises, for Tenant's relocation expenses, and for any other
damage to Tenant's business by reason of such taking.
(d) TEMPORARY TAKING. In the event of taking of the Premises
or any part thereof for temporary use, (i) this Lease will remain unaffected
thereby and rent will equitably ▇▇▇▇▇ for the duration of the taking, and
(ii) Landlord will be entitled to receive such portion or portions of any
award made for such use with respect to the period of the taking, provided
that if such taking remains in force at the expiration or earlier termination
of this Lease, Tenant will then pay to Landlord a sum equal to the reasonable
cost of performing Tenant's obligations under Paragraph 11 with respect to
surrender of the Premises and upon such payment Tenant will be excused from
such obligations. For purpose of this Subparagraph 21(d), a temporary taking
shall be defined as a taking for a period of ninety (90) days or less.
22. DEFAULTS AND REMEDIES.
(a) DEFAULTS. The occurrence of any one or more of the
following events will be deemed a default by Tenant:
(i) The abandonment of the Premises by Tenant.
(ii) The failure by Tenant to make any payment of rent
or additional rent or any other payment required to be made by Tenant
hereunder, as and when due, where such failure continues for a period of ten
(10) days after written notice thereof from Landlord to Tenant.
(iii) The failure by Tenant to observe or perform any of
the express covenants or provisions of this Lease to be observed or performed
by Tenant, other than as specified in Subparagraph 22(a)(i) or (ii) above,
where such failure continues for a period of thirty (30) days (or such
shorter or longer period of time as may otherwise be specified in this Lease
as to any particular provision hereof) after written notice thereof from
Landlord to Tenant. If the nature of Tenant's default is such that more than
thirty (30) days are reasonably required for its cure, then Tenant will not
be deemed to be in default if Tenant commences such cure within such thirty
(30) day period and thereafter diligently prosecutes such cure to completion.
-11-
(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
thirty (30) days; or (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
thirty (30) days.
(b) LANDLORD'S REMEDIES; TERMINATION. In the event of any
default by Tenant, in addition to any other remedies available to Landlord at
law or in equity under applicable law, Landlord will have the immediate right
and option to terminate this Lease and all rights of Tenant hereunder. If
Landlord elects to terminate this Lease then, to the extent permitted under
applicable law, Landlord may recover from Tenant: (i) the worth at the time
of award of any unpaid rent which had been earned at the time of such
termination; plus (ii) the worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time
of award exceeds the amount of such rent loss that Tenant proves could have
been reasonably avoided; plus (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the Term after the time of
award exceeds the amount of such rent loss that Tenant proves could be
reasonably avoided; plus (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which, in the ordinary course of
things, results therefrom including, but not limited to: attorneys' fees and
costs; brokers' commissions; the costs of refurbishment, alterations,
renovation and repair of the Premises, and removal (including the repair of
any damage caused by such removal) and storage (or disposal) of Tenant's
personal property, equipment, fixtures, Alterations and any other items which
Tenant is required under this Lease to remove but does not remove, as well as
the unamortized value of any free or reduced rent or any tenant improvement
allowance or other costs or economic concessions provided, paid, granted or
incurred by Landlord pursuant to this Lease. The unamortized value of such
concessions shall be determined by taking the total value of such concessions
and multiplying such value by a fraction, the numerator of which is the
number of months of the Lease Term not yet elapsed as of the date on which
this Lease is terminated, and the denominator of which is the total number of
months of the Lease Term.
As used in Subparagraphs 22(b)(i) and (ii) above, the "worth
at the time of award" is computed by allowing interest at the Interest Rate.
As used in Subparagraph 22(b)(iii) above, the "worth at the time of award" is
computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
(c) LANDLORD'S REMEDIES; RE-ENTRY RIGHTS. In the event of
any default by Tenant, in addition to any other remedies available to
Landlord under this Lease, at law or in equity, Landlord will 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 and/or disposed of at
the sole cost and expense of and for the account of Tenant in accordance with
the provisions of Subparagraph 13(h) of this Lease or any other procedures
permitted by applicable law. No re-entry or taking possession of the
Premises by Landlord pursuant to this Subparagraph 22(c) will 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) LANDLORD'S REMEDIES; RE-LETTING. In the event of the
vacation or abandonment of the Premises by Tenant or in the event that
Landlord elects to re-enter the Premises or takes possession of the Premises
pursuant to legal proceeding or pursuant to any notice provided by law, then
if Landlord does not elect to terminate this Lease, Landlord may from time to
time, without terminating this Lease, either recover all rent as it becomes
due or relet the Premises or any part thereof on terms and conditions as
Landlord in its reasonable discretion may deem advisable with the right to
make alterations and repairs to the Premises in connection with such
reletting. If Landlord elects to relet the Premises, then rents received by
Landlord from such reletting will be applied: first, to the payment of any
indebtedness other than rent due hereunder from Tenant to Landlord; second,
to the payment of any cost of such reletting; third, to the payment of the
cost of any alterations and repairs to the Premises incurred in connection
with such reletting; fourth, to the payment of rent due and unpaid hereunder
and the residue, if any, will be held by Landlord and applied to payment of
future rent as the same may become due and payable hereunder. Should that
portion of such rents received from such reletting during any month, which is
applied to the payment of rent hereunder, be less than the rent payable
during that month by Tenant hereunder, then Tenant agrees to pay such
deficiency to Landlord immediately upon demand therefor by Landlord. Such
deficiency will be calculated and paid monthly.
(e) LANDLORD'S REMEDIES; PERFORMANCE FOR TENANT. All
covenants and agreements to be performed by Tenant under any of the terms of
this Lease are to be performed by Tenant at Tenant's sole cost and expense
and without any abatement of rent. If Tenant fails to pay any sum of money
owed to any party other than Landlord, for which it is liable under this
Lease, or if Tenant fails to perform any other act on its part to be
performed hereunder, and such failure continues for thirty (30) days after
written notice thereof by Landlord, Landlord may, without waiving or
releasing Tenant from its obligations, but shall not be obligated to, make
any such payment or perform any such other act to be made or performed by
Tenant. Tenant agrees to reimburse Landlord upon demand for all sums so paid
by Landlord and all necessary incidental costs, together with interest
thereon at the Interest Rate, from the date of such payment by Landlord until
reimbursed by Tenant. This remedy shall be in addition to any other right or
remedy of Landlord set forth in this Paragraph 22.
(f) LATE PAYMENT. If Tenant fails to pay any installment of
rent within five (5) days of when due or if Tenant fails to make any other
payment for which Tenant is obligated under this Lease within five (5) days
of when due, such late amount will accrue interest at the Interest Rate and
Tenant agrees to pay Landlord as additional rent such interest on such amount
from the date such amount becomes due until such amount is paid. In
addition, Tenant agrees to pay to Landlord concurrently with such late
payment amount, as additional rent, a late charge equal to five percent (5%)
of the amount due to compensate Landlord for the extra costs Landlord will
incur as a result of such late payment. The parties agree that (i) it would
be impractical and extremely difficult to fix the actual damage Landlord will
suffer in the event of Tenant's late payment, (ii) such interest and late
charge represents a fair and reasonable estimate of the detriment that
Landlord will suffer by reason of late payment by Tenant, and (iii) the
payment of interest and late charges are distinct and separate in that the
payment of interest is to compensate Landlord for the use of Landlord's money
by Tenant, while the payment of late charges is to compensate Landlord for
Landlord's processing, administrative and other costs incurred by Landlord as
a result of Tenant's delinquent payments. Acceptance of any such interest
and late charge will not constitute a waiver of the Tenant's default with
respect to the overdue amount, or prevent Landlord from exercising any of the
other rights and remedies available to Landlord. If Tenant incurs a late
charge more than three (3) times in any period of twelve (12) months during
the Lease Term, then, notwithstanding that Tenant cures the late payments for
which such late charges are imposed, Landlord will have the right to require
Tenant thereafter to pay all installments of Monthly Base Rent quarterly in
advance throughout the remainder of the Lease Term. Notwithstanding anything
to the contrary in this subparagraph (f), with respect to the first
delinquent installment of Monthly Base Rent in each Lease Year, no interest
shall accrue and no late charge shall be payable provided that Tenant
-12-
pays to Landlord such delinquent installment of Monthly Base Rent within five
(5) days after Landlord's delivery of written notice that such installment is
past due.
(g) RIGHTS AND REMEDIES CUMULATIVE. All rights, options and
remedies of Landlord contained in this Lease will be construed and held to be
cumulative, and no one of them will be exclusive of the other, and Landlord
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 or in equity, whether or not
stated in this Lease. Nothing in this Paragraph 22 will be deemed to limit
or otherwise affect Tenant's indemnification of Landlord pursuant to any
provision of this Lease.
23. LANDLORD'S DEFAULT. Landlord will not be in default in the
performance of any obligation required to be performed by Landlord under this
Lease unless Landlord fails to perform such obligation within thirty (30)
days after the receipt of written 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) days are required
for performance, then Landlord will not be deemed in default if it commences
such performance within such thirty (30) day period and thereafter diligently
pursues the same to completion. Upon any default by Landlord, Tenant may
exercise any of its rights provided at law or in equity, subject to the
limitations on liability set forth in Paragraph 35 of this Lease.
24. ASSIGNMENT AND SUBLETTING.
(a) RESTRICTION ON TRANSFER. Except as expressly provided in
this Paragraph 24, Tenant will not, either voluntarily or by operation of
law, assign or encumber this Lease or any interest herein or sublet the
Premises or any part thereof, or permit the use or occupancy of the Premises
by any party other than Tenant (any such assignment, encumbrance, sublease or
the like will sometimes be referred to as a "Transfer"), without the prior
written consent of Landlord, which consent Landlord will not unreasonably
withhold.
(b) CORPORATE AND PARTNERSHIP TRANSFERS. For purposes of
this Paragraph 24, if Tenant is a corporation, partnership or other entity,
any transfer, assignment, encumbrance or hypothecation of fifty percent (50%)
or more (individually or in the aggregate) of any stock or other ownership
interest in such entity, and/or any transfer, assignment, hypothecation or
encumbrance of any controlling ownership or voting interest in such entity,
will be deemed a Transfer and will be subject to all of the restrictions and
provisions contained in this Paragraph 24. Notwithstanding the foregoing,
the immediately preceding sentence will not apply to any transfers of stock
of Tenant if Tenant is a publicly-held corporation and such stock is
transferred publicly over a recognized security exchange or over-the-counter
market.
(c) PERMITTED CONTROLLED TRANSFERS. Notwithstanding the
provisions of this Paragraph 24 to the contrary, Tenant may assign this Lease
or sublet the Premises or any portion thereof ("Permitted Transfer"), without
Landlord's consent, to any parent, subsidiary or affiliate entity which
controls, is controlled by or is under common control with Tenant, or to any
entity resulting from a merger or consolidation with Tenant, or to any person
or entity which acquires substantially all the assets of Tenant's business as
a going concern, provided that: (i) at least ten (10) days prior to such
assignment or sublease, Tenant delivers to Landlord the financial statements
and other financial and background information of the assignee or sublessee
described in Subparagraph 24(d) below; (ii) if an assignment, the assignee
assumes, in full, the obligations of Tenant under this Lease (or if a
sublease, the sublessee of a portion of the Premises or Term assumes, in
full, the obligations of Tenant with respect to such portion); (iii) the
financial net worth of the assignee or sublessee immediately after the
effective date of the proposed assignment or sublease is sufficient to
fulfill the obligations imposed by the Transfer and this Lease; (iv) Tenant
remains fully liable under this Lease; and (v) the use of the Premises under
Paragraph 8 remains unchanged.
(d) TRANSFER NOTICE. If Tenant desires to effect a Transfer,
then at least fifteen (15) days prior to the date when Tenant desires the
Transfer to be effective (the "Transfer Date"), Tenant agrees to give
Landlord a notice (the "Transfer Notice"), stating the name, address and
business of the proposed assignee, sublessee or other transferee (sometimes
referred to hereinafter as "Transferee"), reasonable information (including
references) concerning the character, ownership, and financial condition of
the proposed Transferee, the Transfer Date, any ownership or commercial
relationship between Tenant and the proposed Transferee, and the
consideration and all other material terms and conditions of the proposed
Transfer, all in such detail as Landlord may reasonably require. If
Landlord reasonably requests additional detail, the Transfer Notice will not
be deemed to have been received until Landlord receives such additional
detail, and Landlord may withhold consent to any Transfer until such
information is provided to it.
(e) LANDLORD'S OPTIONS. Within ten (10) days of Landlord's
receipt of any Transfer Notice, and any additional information requested by
Landlord concerning the proposed Transferee's financial responsibility,
Landlord will elect to do one of the following: (i) consent to the proposed
Transfer; (ii) refuse such consent, which refusal shall be on reasonable
grounds including, without limitation, those set forth in Subparagraph 24(f)
below; or (iii) terminate this Lease and recapture the Premises for reletting
by Landlord.
(f) REASONABLE DISAPPROVAL. Landlord and Tenant hereby
acknowledge that Landlord's disapproval of any proposed Transfer pursuant to
Subparagraph 24(e) will be deemed reasonably withheld if based upon any
reasonable factor, including, without limitation, any or all of the following
factors: (i) the proposed Transferee is a governmental entity; (ii) the
portion of the Premises to be sublet or assigned is irregular in shape with
inadequate means of ingress and egress; (iii) the use of the Premises by the
Transferee (A) is not permitted by the use provisions in Paragraph 8 hereof,
or (B) poses a risk of increased liability to Landlord; (iv) the Transferee
does not have the financial capability to fulfill the obligations imposed by
the Transfer and this Lease, or (v) the Transferee poses a business or other
economic risk which Landlord deems unacceptable.
(g) ADDITIONAL CONDITIONS. A condition to Landlord's consent
to any Transfer of this Lease will be the delivery to Landlord of a true copy
of the fully executed instrument of assignment, sublease, transfer or
hypothecation, and, in the case of an assignment, the delivery to Landlord of
an agreement executed by the Transferee in form and substance reasonably
satisfactory to Landlord, whereby the Transferee assumes and agrees to be
bound by all of the terms and provisions of this Lease and to perform all of
the obligations of Tenant hereunder. As a condition to Landlord's consent to
any sublease, such sublease must provide that in the event of termination of
this Lease for any reason, including without limitation a voluntary surrender
by Tenant, or in the event of any reentry or repossession of the Premises by
Landlord, Landlord may, at its option, either (i) terminate the sublease, or
(ii) take over all of the right, title and interest of Tenant, as sublessor,
under such sublease, in which case such sublessee will attorn to Landlord,
but that nevertheless Landlord will not (1) be liable for any previous act or
omission of Tenant under such sublease, (2) be subject to any defense or
offset previously accrued in favor of the sublessee against Tenant, or (3) be
bound by any previous modification of any sublease made without Landlord's
written consent, or by any previous prepayment by sublessee of more than one
month's rent.
-13-
(h) EXCESS RENT. If Landlord consents to any assignment of
this Lease, Tenant agrees to pay to Landlord, as additional rent, fifty
percent (50%) of all sums and other consideration payable to and for the
benefit of Tenant by the assignee on account of the assignment, as and when
such sums and other consideration are due and payable by the assignee to or
for the benefit of Tenant (or, if Landlord so requires, and without any
release of Tenant's liability for the same, Tenant agrees to instruct the
assignee to pay such sums and other consideration directly to Landlord). If
for any sublease, Tenant receives rent or other consideration, either
initially or over the term of the sublease, in excess of the rent fairly
allocable to the portion of the Premises which is subleased based on square
footage, Tenant agrees to pay to Landlord as additional rent fifty percent
(50%) of the excess of each such payment of rent or other consideration
received by Tenant promptly after its receipt. In calculating excess rent or
other consideration which may be payable to Landlord under this paragraph,
Tenant will be entitled to deduct commercially reasonable third party
brokerage commissions and attorneys' fees and other amounts reasonably and
actually expended by Tenant in connection with such assignment or subletting
if acceptable written evidence of such expenditures is provided to Landlord.
(i) TERMINATION RIGHTS. If Tenant requests Landlord's
consent to any assignment or subletting of all or substantially all of the
Premises, Landlord will have the right, as provided in Subparagraph 24(e), to
terminate this Lease effective as of the date Tenant proposes to sublet or
assign. Landlord will exercise such termination right, if at all, by giving
written notice to Tenant within ten (10) days of receipt by Landlord of the
financial responsibility information required by this Paragraph 24. Tenant
understands and acknowledges that the option, as provided in this Paragraph
24, to terminate this Lease rather than approve the subletting or assignment,
is a material inducement for Landlord's agreeing to lease the Premises to
Tenant upon the terms and conditions herein set forth.
(j) NO RELEASE. No Transfer will release Tenant of Tenant's
obligations under this Lease or alter the primary liability of Tenant to pay
the rent and to perform all other obligations to be performed by Tenant
hereunder. Landlord may require that, while Tenant is in default under this
Lease, any Transferee remit directly to Landlord on a monthly basis, all
monies due Tenant by said Transferee. However, the acceptance of rent by
Landlord from any other person will not be deemed to be a waiver by Landlord
of any provision hereof. Consent by Landlord to one Transfer will not be
deemed consent to any subsequent Transfer. In the event of default by any
Transferee of Tenant or any successor of Tenant in the performance of any of
the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such Transferee or successor.
Landlord may consent to subsequent assignments of this Lease or sublettings
or amendments or modifications to this Lease with assignees of Tenant,
without notifying Tenant, or any successor of Tenant, and without obtaining
its or their consent thereto and any such actions will not relieve Tenant of
liability under this Lease.
(k) ADMINISTRATIVE AND ATTORNEYS' FEES. If Tenant effects a
Transfer or requests the consent of Landlord to any Transfer (whether or not
such Transfer is consummated), then, upon demand, Tenant agrees to pay
Landlord a non-refundable administrative fee of Two Hundred Fifty Dollars
($250.00), plus any reasonable attorneys' and paralegal fees (not to exceed
$1,000 for each such Transfer) incurred by Landlord in connection with such
Transfer or request for consent (whether attributable to Landlord's in-house
attorneys or paralegals or otherwise). Acceptance of the Two Hundred Fifty
Dollar ($250.00) administrative fee and/or reimbursement of Landlord's
attorneys' and paralegal fees will in no event obligate Landlord to consent
to any proposed Transfer.
25. SUBORDINATION. Without the necessity of any additional
document being executed by Tenant for the purpose of effecting a
subordination, and at the election of Landlord or any mortgagee or
beneficiary with a deed of trust encumbering the Premises, or any lessor of a
ground or underlying lease with respect to the Premises, this Lease will 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 Premises;
and (ii) the lien of any mortgage or deed of trust which may now exist or
hereafter be executed for which the Premises, or Landlord's interest and
estate in any of said items, is specified as security; provided that Tenant
receives a commercially reasonable non-disturbance agreement from the
respective lessor, mortgagee or beneficiary. Notwithstanding the foregoing,
Landlord reserves the right to subordinate any such ground leases or
underlying leases or any such liens to this Lease. If any such ground lease
or underlying lease terminates for any reason or any such mortgage or deed of
trust is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, at the election of Landlord's successor in interest, Tenant agrees to
attorn to and become the tenant of such successor in which event Tenant's
right to possession of the Premises will not be disturbed as long as Tenant
is not in default under this Lease. Tenant hereby waives its rights under
any law which gives or purports to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder
in the event of any such foreclosure proceeding or sale. Tenant covenants
and agrees to execute and deliver, upon demand by Landlord and in the form
reasonably required by Landlord, any additional documents evidencing the
priority or subordination of this Lease and Tenant's attornment agreement
with respect to any such ground lease or underlying leases or the lien of any
such mortgage or deed of trust. If Tenant fails to sign and return any such
documents within ten (10) days of receipt, Tenant will be in default
hereunder.
26. ESTOPPEL CERTIFICATE. Within fifteen (15) days following any
written request which Landlord may make from time to time, Tenant agrees to
execute and deliver to Landlord a statement, in a form substantially similar
to the form of Exhibit "F" attached hereto or as may reasonably be required
by Landlord's lender, certifying: (i) the date of commencement of this
Lease; (ii) the fact that this Lease is unmodified and in full force and
effect (or, if there have been modifications, that this Lease is in full
force and effect, and stating the date and nature of such modifications);
(iii) the date to which the rent and other sums payable under this Lease have
been paid; (iv) that, to the best of Tenant's knowledge, there are no current
defaults under this Lease by either Landlord or Tenant except as specified in
Tenant's statement; and (v) such other matters reasonably requested by
Landlord. Landlord and Tenant intend that any statement delivered pursuant
to this Paragraph 26 may be relied upon by any mortgagee, beneficiary,
purchaser or prospective purchaser of the Premises or any interest therein.
Tenant's failure to deliver such statement within such time will be
conclusive upon Tenant (i) that this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in Landlord's performance, and (iii) that not
more than one (1) month's rent has been paid in advance. Without limiting
the foregoing, if Tenant fails to deliver any such statement within such
fifteen (15) day period, Landlord may deliver to Tenant an additional request
for such statement and Tenant's failure to deliver such statement to Landlord
within five (5) days after delivery of such additional request will
constitute a default under this Lease.
27. EASEMENTS. Landlord reserves to itself the right, from time
to time, to grant such easements, rights and dedications that Landlord deems
necessary or desirable, and to cause the recordation of parcel maps and
restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably or materially interfere with the use of the
Premises by Tenant. Tenant shall sign any of the aforementioned documents
upon request of Landlord and failure to do so shall constitute a material
breach of this Lease.
28. RULES AND REGULATIONS. Tenant agrees to faithfully observe
and comply with the "Rules and Regulations," a copy of which is attached
hereto and incorporated herein by this reference as Exhibit "G", and all
reasonable and nondiscriminatory modifications thereof and additions thereto
from time to time put into effect by Landlord.
-14-
29. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND
LESSORS. If, in connection with Landlord's obtaining or entering into any
financing or ground lease affecting the Premises, the lender or ground lessor
requests modifications to this Lease, Tenant, within twenty (20) days after
request therefor, agrees to execute an amendment to this Lease incorporating
such modifications, provided such modifications are acceptable to Tenant in
the exercise of its reasonable discretion. In no event will Tenant be
required to modify the Lease to increase the obligations of Tenant under this
Lease or adversely affect the leasehold estate created by this Lease. In the
event of any default on the part of Landlord, Tenant will give notice by
registered or certified mail to any beneficiary of a deed of trust or
mortgage covering the Premises or ground lessor of Landlord whose address has
been furnished to Tenant, and Tenant agrees to offer such beneficiary,
mortgagee or ground lessor the same opportunity to cure the default as is
provided to Landlord under this Lease.
30. DEFINITION OF LANDLORD. The term "Landlord," as used in this
Lease, so far as covenants or obligations on the part of Landlord are
concerned, means and includes only the owner or owners, at the time in
question, of the fee title of the Premises or the lessees under any ground
lease, if any. In the event of any transfer, assignment or other conveyance
or transfers of any such title (other than a transfer for security purposes
only), Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) will be automatically 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, so long as the
transferee assumes in writing all such covenants and obligations of Landlord
arising after the date of such transfer. Landlord and Landlord's transferees
and assignees have the absolute right to transfer all or any portion of their
respective title and interest in the Premises, the Building, the Development
and/or this Lease without the consent of Tenant, and such transfer or
subsequent transfer will not be deemed a violation on Landlord's part of any
of the terms and conditions of this Lease.
31. WAIVER. The waiver by either party of any breach of any term,
covenant or condition herein contained will not be deemed to be a waiver of
any subsequent breach of the same or any other term, covenant or condition
herein contained, nor will any custom or practice which may develop between
the parties in the administration of the terms hereof be deemed a waiver of
or in any way affect the right of either party to insist upon performance in
strict accordance with said terms. The subsequent acceptance of rent or any
other payment hereunder by Landlord will 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. No acceptance by Landlord of a lesser sum than the
basic rent and additional rent or other sum then due will be deemed to be
other than on account of the earliest installment of such rent or other
amount due, nor will any endorsement or statement on any check or any letter
accompanying any check be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the balance of such installment or other amount or pursue any other remedy
provided in this Lease. The consent or approval of Landlord to or of any act
by Tenant requiring Landlord's consent or approval will not be deemed to
waive or render unnecessary Landlord's consent or approval to or of any
subsequent similar acts by Tenant.
32. PARKING. So long as this Lease is in effect and provided
Tenant is not in default hereunder, Landlord grants to Tenant and Tenant's
customers, suppliers, employees and invitees ("Tenant's Authorized Users") a
non-exclusive license to use up to the number of parking spaces designated in
Paragraph 1(q) hereof in the designated parking areas in the Common Areas.
All visitor parking will be on a non-exclusive, in common basis with all
other visitors and guests of the Development. Tenant will not use or allow
any of Tenant's Authorized Users to use any parking spaces which have been
specifically assigned by Landlord for other uses such as visitor parking or
which have been designated by any governmental entity as being restricted to
certain uses. Landlord may assign any unreserved and unassigned parking
spaces and/or make all or any portion of such spaces reserved, if Landlord
reasonably determines that it is necessary for orderly and efficient parking
or for any other reasonable reason. Tenant and Tenant's Authorized Users
shall comply with all rules and regulations regarding parking set forth in
Exhibit "G" attached hereto and Tenant agrees to cause its employees,
subtenants, assignees, contractors, suppliers, customers and invitees to
comply with such rules and regulations. Landlord reserves the right from
time to time to modify and/or adopt such other reasonable and
non-discriminatory rules and regulations for the parking facilities as it
deems reasonably necessary for the operation of the parking facilities.
Subject to Tenant's compliance with laws, Landlord agrees that Tenant may
park in the loading bay areas for the Premises which are not being used as
loading bays during the Lease Term.
33. FORCE MAJEURE. If either Landlord or Tenant is delayed,
hindered in or prevented from the performance of any act required under this
Lease by reason of strikes, lock-outs, labor troubles, inability to procure
standard materials, failure of power, riots, civil unrest or insurrection,
war, fire, earthquake, flood or other natural disaster, unusual and
unforeseeable delay which results from an interruption of any public
utilities (e.g., electricity, gas, water, telephone) or other unusual and
unforeseeable delay not within the reasonable control of the party delayed in
performing work or doing acts required under the provisions of this Lease (a
"force majeure delay"), then performance of such act will be excused for the
period of the delay and the period for the performance of any such act will
be extended for a period equivalent to the period of such delay. Except with
regard to the initial build-out of the Premises as contemplated in Exhibit
"C", force majeure delays will also include restrictive governmental laws,
regulations or orders or governmental action or inaction (including failure,
refusal or delay in issuing permits, approvals and/or authorizations which is
not the result of the action or inaction of the party claiming such delay).
The provisions of this Paragraph 33 will not operate to excuse Tenant from
prompt payment of rent or any other payments required under the provisions of
this Lease.
34. SIGNS. Subject to Tenant's compliance with the terms of this
Paragraph 34, Tenant is hereby granted the right (i) to install on the
Northeast corner of the Building one Tenant identification sign and (ii) to
install one monument sign on the Premises and (iii) such other identification
signs as Tenant may deem necessary for the operation of its business and
which are approved by Landlord in advance in writing. Landlord and Tenant
will mutually determine the exact locations on the Premises for Tenant's
signs. Tenant agrees to have Landlord install and maintain Tenant's signs in
such designated locations in accordance with this Paragraph 34 at Tenant's
sole cost and expense. Tenant has no right to install Tenant identification
signs in any other location in, on or about the Premises or the Development
in any interior or exterior common areas. The size, design, color and other
physical aspects of any and all permitted sign(s) will be subject to (i)
Landlord's written approval prior to installation, which approval may be
withheld in Landlord's reasonable discretion, (ii) any covenants, conditions
or restrictions governing the Premises, and (iii) any applicable municipal or
governmental permits and approvals. Tenant will be solely responsible for
all costs for installation, maintenance, repair and removal of any Tenant
identification sign(s). If Tenant fails to remove Tenant's sign(s) upon
termination of this Lease and repair any damage caused by such removal,
Landlord may do so at Tenant's sole cost and expense. Tenant agrees to
reimburse Landlord for all costs incurred by Landlord to effect any
installation, maintenance or removal on Tenant's account, which amount will
be deemed additional rent, and may include, without limitation, all sums
disbursed, incurred or deposited by Landlord including Landlord's costs,
expenses and actual attorneys' fees with interest thereon at the Interest
Rate from the date of Landlord's demand until paid by Tenant.
35. LIMITATION ON LIABILITY. In consideration of the benefits
accruing hereunder, Tenant on behalf of itself and all successors and assigns
of Tenant covenants and agrees that, in the event of any actual or alleged
failure, breach or default
-15-
hereunder by Landlord: (a) tenant's recourse against Landlord for monetary
damages will be limited to Landlord's interest in the Premises including,
subject to the prior rights of any Mortgagee, Landlord's interest in the
rents of the Premises and any insurance proceeds payable to Landlord; (b)
except as may be necessary to secure jurisdiction of Landlord, no member or
partner of Landlord shall be sued or named as a party in any suit or action
and no service of process shall be made against any member or partner of
Landlord; (c) no member or partner of Landlord shall be required to answer or
otherwise plead to any service of process; (d) no judgment will be taken
against any member or partner of Landlord and any judgment taken against any
member or partner of Landlord may be vacated and set aside at any time after
the fact; (e) no writ of execution will be levied against the assets of any
member or partner of Landlord; (f) the obligations under this Lease do not
constitute personal obligations of the individual members, partners,
directors, officers or shareholders of Landlord, and Tenant shall not seek
recourse against the individual members, partners, directors, officers or
shareholders of Landlord or any of their personal assets for satisfaction of
any liability in respect to this Lease; and (g) these covenants and
agreements are enforceable both by Landlord and also by any member or partner
of Landlord.
36. FINANCIAL STATEMENTS. Prior to the execution of this Lease by
Landlord and at any time during the Term of this Lease upon ten (10) days
prior written notice from Landlord, Tenant agrees to provide Landlord with a
current financial statement for Tenant and any guarantors of Tenant and
financial statements for the two (2) years prior to the current financial
statement year for Tenant and any guarantors of Tenant. Such statements are
to be prepared in accordance with generally accepted accounting principles
and, if such is the normal practice of Tenant, audited by an independent
certified public accountant.
37. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant
that upon Tenant paying the rent required under this Lease and paying all
other charges and performing all of the covenants and provisions on Tenant's
part to be observed and performed under this Lease, Tenant may peaceably and
quietly have, hold and enjoy the Premises in accordance with this Lease
without hindrance or molestation by Landlord or its agents.
38. AUCTIONS. Tenant shall not conduct, nor permit to be
conducted, either voluntarily or involuntarily, any auction upon the Premises
without first having obtained Landlord's prior written consent.
39. MISCELLANEOUS.
(a) CONFLICT OF LAWS. This Lease shall be governed by and
construed solely pursuant to the laws of the State, without giving effect to
choice of law principles thereunder.
(b) SUCCESSORS AND ASSIGNS. Except as otherwise provided in
this Lease, all of the covenants, conditions and provisions of this Lease
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns.
(c) PROFESSIONAL FEES AND COSTS. If either Landlord or
Tenant should bring suit against the other with respect to this Lease, then
all costs and expenses, including without limitation, actual professional
fees and costs such as appraisers', accountants' and attorneys' fees and
costs, incurred by the party which prevails in such action, whether by final
judgment or out of court settlement, shall be paid by the other party, which
obligation on the part of the other party shall be deemed to have accrued on
the date of the commencement of such action and shall be enforceable whether
or not the action is prosecuted to judgment. As used herein, attorneys' fees
and costs shall include, without limitation, attorneys' fees, costs and
expenses incurred in connection with any (i) postjudgment motions; (ii)
contempt proceedings; (iii) garnishment, levy, and debtor and third party
examination; (iv) discovery; and (v) bankruptcy litigation.
(d) TERMS AND HEADINGS. The words "Landlord" and "Tenant" as
used herein shall include the plural as well as the singular. Words used in
any gender include other genders. The paragraph headings of this Lease are
not a part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.
(e) TIME. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is
a factor.
(f) PRIOR AGREEMENT; AMENDMENTS. This Lease constitutes and
is intended by the parties to be a final, complete and exclusive statement of
their entire agreement with respect to the subject matter of this Lease.
This Lease supersedes any and all prior and contemporaneous agreements and
understandings of any kind relating to the subject matter of this Lease.
There are no other agreements, understandings, representations, warranties,
or statements, either oral or in written form, concerning the subject matter
of this Lease. No alteration, modification, amendment or interpretation of
this Lease shall be binding on the parties unless contained in a writing
which is signed by both parties.
(g) SEPARABILITY. The provisions of this Lease shall be
considered separable such that if any provision or part of this Lease is ever
held to be invalid, void or illegal under any law or ruling, all remaining
provisions of this Lease shall remain in full force and effect to the maximum
extent permitted by law.
(h) RECORDING. Neither Landlord nor Tenant shall record this
Lease nor a short form memorandum thereof without the consent of the other.
(i) COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which
shall be one and the same agreement.
(j) NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute
proprietary information of Landlord. Disclosure of the terms could adversely
affect the ability of Landlord to negotiate other leases and impair
Landlord's relationship with other tenants. Accordingly, Tenant agrees that
it, and its partners, officers, directors, employees, agents and attorneys,
shall not intentionally and voluntarily disclose the terms and conditions of
this Lease to any newspaper or other publication or any other tenant or
apparent prospective tenant of the Building or other portion of the
Development, or real estate agent, either directly or indirectly, without the
prior written consent of Landlord, provided, however, that Tenant may
disclose the terms to prospective subtenants or assignees under this Lease.
-16-
40. EXECUTION OF LEASE.
(a) JOINT AND SEVERAL OBLIGATIONS. If more than one person
executes this Lease as Tenant, their execution of this Lease will constitute
their covenant and agreement that (i) each of them is jointly and severally
liable for the keeping, observing and performing of all of the terms,
covenants, conditions, provisions and agreements of this Lease to be kept,
observed and performed by Tenant, and (ii) the term "Tenant" as used in this
Lease means and includes each of them jointly and severally. The act of or
notice from, or notice or refund to, or the signature of any one or more of
them, with respect to the tenancy of this Lease, including, but not limited
to, any renewal, extension, expiration, termination or modification of this
Lease, will be binding upon each and all of the persons executing this Lease
as Tenant with the same force and effect as if each and all of them had so
acted or so given or received such notice or refund or so signed.
(b) TENANT AS CORPORATION OR PARTNERSHIP. If Tenant executes
this Lease as a corporation or partnership, then Tenant and the persons
executing this Lease on behalf of Tenant represent and warrant that such
entity is duly qualified and in good standing to do business in California
and that the individuals executing this Lease on Tenant's behalf are duly
authorized to execute and deliver this Lease on its behalf, and in the case
of a corporation, in accordance with a duly adopted resolution of the board
of directors of Tenant, a copy of which is to be delivered to Landlord on
execution hereof, if requested by Landlord, and in accordance with the
by-laws of Tenant, and, in the case of a partnership, in accordance with the
partnership agreement and the most current amendments thereto, if any, copies
of which are to be delivered to Landlord on execution hereof, if requested by
Landlord, and that this Lease is binding upon Tenant in accordance with its
terms.
(c) EXAMINATION OF LEASE. Submission of this instrument by
Landlord to Tenant for examination or signature by Tenant does not constitute
a reservation of or option for lease, and it is not effective as a lease or
otherwise until execution by and delivery to both Landlord and Tenant.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed by their duly authorized representatives as of the date first above
written.
TENANT: LANDLORD:
CUTTER & BUCK, INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC,
a Washington corporation a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇▇▇ Industrial Partners, Inc.,
-------------------------------- a California corporation,
Its: Managing Member
Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: VP Operations -------------------------------
------------------------- ▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
-17-
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I now or have satisfactory evidence that
▇▇▇▇▇▇ ▇▇▇▇▇ is the person who appeared before me, and said person
acknowledged that he/she was authorized to execute the instrument and
acknowledged it as the Vice President of Operations of Cutter and Buck to be
the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
Dated: May 27, 1999
-----------------------------
---------------------------------------- /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Notary Public
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
My commission expires 4/6/03
------------
----------------------------------------
(Use this space for notarial stamp/seal)
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I now or have satisfactory evidence that ▇▇▇▇
▇. ▇▇▇▇▇ is the person who appeared before me, and said person acknowledged
that he/she was authorized to execute the instrument and acknowledged it as
the Vice President of ▇▇▇▇▇▇ ▇▇▇▇▇▇ to be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated: May 27, 1999
-----------------------------
---------------------------------------- /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Notary Public
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
My commission expires 4/6/03
------------
----------------------------------------
(Use this space for notarial stamp/seal)
-18-
ADDENDUM TO INDUSTRIAL LEASE
THIS ADDENDUM TO INDUSTRIAL LEASE ("Addendum") is attached to and
constitutes a part of that certain Industrial Lease [Single Tenant - Triple
Net] between ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a Delaware limited liability company
("Landlord"), and CUTTER & BUCK, INC., a Washington corporation ("Tenant").
Landlord and Tenant agree that, notwithstanding anything contained in the
Lease to the contrary, the provisions set forth in this Addendum will be
deemed to be a part of the Lease and will supersede any contrary provisions
in the Lease and shall prevail and control for all purposes. All references
in the Lease and in this Addendum to the defined term "Lease" are to be
construed to mean the Lease as amended and supplemented by this Addendum.
Capitalized terms which are not defined in this Addendum have the meanings
given to them in the Lease. The paragraphs below are numbered consecutively
with those of the Lease.
41. OPTION TO EXTEND.
(a) EXTENSION OPTION. Subject to the terms of this Paragraph 41
and Paragraph 43 below, Landlord hereby grants to Tenant the option (the
"Extension Option") to extend the Term of this Lease with respect to the
entire Premises for one (1) additional period of five (5) years (the "Option
Term"), on the same terms, covenants and conditions as provided for in this
Lease during the initial Lease Term, except that (i) Tenant shall have no
further extension rights, and (ii) Monthly Base Rent shall be established
based on the "fair market rental rate" for the Premises for the Option Term
as defined and determined in accordance with the provisions of this Paragraph
41 below. As used in this Paragraph 41, the term "Premises" shall mean and
refer to the Premises and, in the event Tenant exercises the Expansion Option
(as defined in Paragraph 42 below), the Expansion Space (as defined in
Paragraph 42 below).
(b) EXERCISE OF EXTENSION OPTION. The Extension Option must be
exercised, if at all, by written notice ("Extension Notice") delivered by
Tenant to Landlord no later than the date which is two hundred ten (210)
days, and no earlier than the date which is one (1) year prior to the
expiration of the then current Term of this Lease.
(c) FAIR MARKET RENTAL RATE. The term "fair market rental rate"
as used in this Addendum shall mean the annual amount per rentable square
foot, projected during the relevant period, that a willing, comparable,
non-equity, renewal tenant (excluding sublease and assignment transactions)
would pay, and a willing, comparable, institutional landlord of a comparable
quality industrial building located in the Renton, Tukwila and North Kent,
Washington area North of ▇▇▇▇▇ ▇▇▇▇▇▇ ("Comparison Area") would accept, at
arm's length (what Landlord is accepting in current transactions for other
buildings within the Development may be considered), for space comparable in
size and quality as the leased area at issue taking into account the age,
quality and layout of the existing improvements in the leased area at issue
and taking into account items that professional real estate brokers
customarily consider, including, but not limited to, rental rates, industrial
space availability, tenant size, tenant improvement allowances, parking,
loading, power, ceiling height, sprinkler capacity, and any other economic
matters then being charged by Landlord or the lessors of such similar
industrial buildings. In no event will Monthly Base Rent decrease from that
payable in the last year of the original Lease Term as a result of the fair
market rental rate determination provided for in this Paragraph 41. In no
event will any consideration be given, in the fair market rental rate
determination, to any amounts to be paid by Tenant during the Option Term as
repayment of the Above Standard Allowance described in Paragraph 5(b) of the
Work Letter Agreement.
(d) TENANT'S REVIEW PERIOD. Landlord's determination of fair
market rental rate shall be delivered to Tenant in writing not later than
thirty (30) days following Landlord's receipt of Tenant's Extension Notice.
Tenant will have thirty (30) days ("Tenant's Review Period") after receipt of
Landlord's notice of the fair market rental rate within which to accept such
fair market rental rate or to object thereto in writing. Tenant's failure to
object to the fair market rental rate submitted by Landlord in writing within
Tenant's Review Period will conclusively be deemed Tenant's approval and
acceptance thereof. If Tenant objects to the fair market rental rate
submitted by Landlord within Tenant's Review Period, then Landlord and Tenant
will attempt in good faith to agree upon such fair market rental rate using
their best good faith efforts. If Landlord and Tenant fail to reach agreement
on such fair market rental rate within fifteen (15) days following the
expiration of Tenant's Review Period (the "Outside Agreement Date"), then
each party's determination will be submitted to appraisal in accordance with
the provisions below.
(e) APPRAISAL.
(i) Landlord and Tenant shall each appoint one independent,
unaffiliated real estate broker (referred to herein as an "appraiser" even
though only a broker) who has been active over the five (5) year period
ending on the date of such appointment in the leasing of industrial space in
the Comparison Area. Each such appraiser will be appointed within thirty (30)
days after the Outside Agreement Date.
(ii) The two (2) appraisers so appointed will within fifteen
(15) days of the date of the appointment of the last appointed appraiser
agree upon and appoint a third appraiser who shall be qualified under the
same criteria set forth herein above for qualification of the initial two (2)
appraisers.
(iii) The determination of the appraisers shall be limited
solely to the issue of whether Landlord's or Tenant's last proposed (as of
the Outside Agreement Date) new Monthly Base Rent for the Premises is the
closest to the actual new Monthly Base Rent for the Premises as determined by
the appraisers, taking into account the requirements of Paragraph 41(c) and
this Paragraph 41(e) regarding same.
(iv) The three (3) appraisers shall within thirty (30) days
of the appointment of the third appraiser reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted new Monthly Base Rent, and
shall notify Landlord and Tenant thereof.
(v) The decision of the majority of the three (3)
appraisers shall be binding upon Landlord and Tenant and neither party will
have the right to reject the determination or undo the exercise of the
Extension Option. The cost of each party's appraiser shall be the
responsibility of the party selecting such appraiser, and the cost of the
third appraiser (or arbitration, if necessary) shall be shared equally by
Landlord and Tenant.
ADDENDUM
Page 1
(vi) If either Landlord or Tenant fails to appoint an
appraiser within the time period in Paragraph (e)(i) herein above, the
appraiser appointed by one of them shall reach a decision, notify Landlord
and Tenant thereof and such appraiser's decision shall be binding upon
Landlord and Tenant and neither party will have the right to reject the
determination or undo the exercise of the Extension Option.
(vii) If the two (2) appraisers fail to agree upon and
appoint a third appraiser, both appraisers shall be dismissed and the matter
to be decided shall be forthwith submitted to binding arbitration under the
provisions of the American Arbitration Association.
(viii) In the event that the new Monthly Base Rent is not
established prior to end of the initial Term of the Lease, the Monthly Base
Rent immediately payable at the commencement of the Option Term shall be
based on $0.40 per square foot of space then in the Premises (which rate
shall not be considered a factor in determining the new Monthly Base Rent).
Notwithstanding the above, once the fair market rental is determined in
accordance with this section, the parties shall settle any under or
overpayment on the next Monthly Base Rent payment date falling not less than
thirty (30) days after such determination.
42. EXPANSION OPTION. Subject to the terms of this Paragraph 42 and
Paragraph 43 below, Landlord hereby grants to Tenant a right to expand the
Premises ("Expansion Option") to include not less than approximately 117,000
square feet (subject to reduction as provided in subparagraph (c) below) of
contiguous space (as determined by Tenant in accordance with this Paragraph
42) located within a new building ("New Building") to be constructed within
the Development, which New Building is to consist of approximately 234,000
square feet and is depicted on ADDENDUM SCHEDULE "1" attached hereto (the
"Expansion Space").
(a) PROCEDURE FOR EXERCISE OF EXPANSION OPTION.
(i) PROCEDURE FOR OFFER. Prior to November 1, 2000 (the
"Expansion Expiration Date"), Tenant shall notify Landlord in writing of its
desire to exercise its Expansion Option and how much space Tenant requires.
If Tenant duly notifies Landlord of its desire to exercise its Expansion
Option, Landlord shall notify Tenant (the "Expansion Offer Notice") of the
precise area of the New Building in which the Expansion Space will be
located. Landlord's Expansion Offer Notice shall also set forth the
Expansion Space Rent (as that term is defined in Paragraph 42(d) below).
(ii) PROCEDURE FOR ACCEPTANCE. After receipt of Landlord's
Expansion Offer Notice, if Tenant thereafter wishes to exercise Tenant's
Expansion Option with respect to the space described in Landlord's Expansion
Offer Notice, then within ten (10) business days following delivery of
Landlord's Expansion Offer Notice to Tenant, Tenant shall deliver written
notice (the "Expansion Exercise Notice") to Landlord of Tenant's exercise of
its Expansion Option setting forth the amount of the space described in
Landlord's Expansion Offer Notice which, in accordance with the terms of this
Paragraph 42, Tenant desires to lease. If Tenant does not send to Landlord
the Expansion Exercise Notice within the ten (10) business day period, then
Landlord shall be free to lease the space described in the Expansion Offer
Notice to anyone to whom Landlord desires on any terms and conditions
Landlord desires and Tenant shall have no further right to expand the
Premises. Concurrently with its delivery of the Expansion Exercise Notice,
Tenant shall deliver to Landlord current, certified financial statements of
Tenant for Tenant's most recent two (2) fiscal years.
(b) DELIVERY OF THE EXPANSION SPACE. In the event Tenant duly
delivers the Expansion Exercise Notice, Landlord shall deliver the Expansion
Space to Tenant on or after October 1, 2001 but before January 1, 2002 (which
period shall be extended day for day by Force Majeure Delays and Tenant
Delays [as such terms are defined in the Work Letter Agreement]).
(c) COMPLETION OF NEW BUILDING; REDUCTION OPTION. Landlord may
elect to complete the New Building on or before December 31, 2000. In the
event Landlord makes such election, Tenant shall have the right to reduce the
minimum size of the Expansion Space by increments of exactly ten percent
(10%) (i.e., if the minimum Expansion Space is to consist of 104,000 square
feet, Tenant may reduce the minimum size of the Expansion Space only by
increments of 10,400 square feet) by providing Landlord with written notice
("Option Reduction Notice"), not later than ten (10) business days following
Tenant's receipt of notice that Landlord has elected to complete the
construction of the New Building on or before December 31, 2000, of Tenant's
election to reduce the minimum size of the Expansion Space and specifying in
increments of ten percent (10%) the square footage by which the minimum
Expansion Space is to be reduced. If Tenant timely delivers the Option
Reduction Notice, then within thirty (30) days thereafter, Landlord shall, at
Landlord's election, pay Tenant or provide Tenant with a credit against Base
Rent an amount equal to $25,000 for each increment of ten percent (10%) by
which Tenant elected to reduce the square footage of the minimum Expansion
Space.
(d) EXPANSION SPACE RENT. The Base Rent payable by Tenant for the
Expansion Space (the "Expansion Space Base Rent") shall be as follows:
Rate Per Square
Months of Expansion Foot of Expansion
Space Term Premises Per Month
---------- ------------------
1 - 30 $.3350
31 - 60 $.3600
61 - Expiration of Initial Term $.3850
Prior to the Expansion Commencement Date (as defined in Paragraph
42(f) below), Landlord will cause its architect to measure and certify in
writing to Landlord the square footage of the Expansion Space, following
which time the Expansion Space Base Rent and other figures based upon the
square feet contained in the Expansion Space shall be determined in
accordance with the rental rates set forth above. Except in the case of
manifest error, the certification from Landlord's architect shall be binding
upon Landlord and Tenant.
(e) EARLY ENTRY. Landlord agrees to provide Tenant with at least
forty-five (45) days' prior written notice of the date ("Expansion Delivery
Date") on which the Expansion Building shell will be substantially complete.
Tenant may elect to enter upon the Expansion Space commencing on the
Expansion Delivery Date in order to install communications cabling, fixtures
and racking and the like, at Tenant's sole cost and expense (collectively,
"Tenant's Expansion Work"). Any such entry by Tenant for the purpose of
Tenant's Expansion Work will be subject to all of the terms and conditions
applicable to Tenant's early entry of the Premises pursuant to Paragraph 4(c)
of the Lease.
ADDENDUM
Page 2
(f) EXPANSION SPACE TERM; RENT COMMENCEMENT; AMENDMENT TO LEASE.
(i) TERM. Tenant shall commence payment of Expansion Space
Base Rent and the term of Tenant's leasing of the Expansion Space shall
commence upon substantial completion by Landlord of the shell Expansion Space
containing (a proportionate share where applicable of ) the base
specifications set forth in Exhibit "A-II" attached to the Lease (the
"Expansion Commencement Date") and shall expire concurrently with the
expiration of the initial Term for the initial Premises; provided, however,
that the Expansion Commencement Date shall not be deemed to have occurred,
and Tenant shall have no right or obligation to occupy the Expansion Space,
prior to October 1, 2001, unless otherwise agreed to by Landlord and Tenant
in writing. Notwithstanding the foregoing, in the event (A) Landlord has
elected to complete construction of the New Building on or before December
31, 2000, and (B) Tenant will occupy more than fifty percent (50%) but less
than seventy percent (70%) of the New Building, then Tenant shall be required
to pay (but shall not be entitled to occupy any portion of the Expansion
Space until the Expansion Commencement Date) Expansion Space Base Rent with
respect to that portion of the Expansion Space in excess of fifty percent
(50%) of the New Building commencing on the date on which Landlord obtains a
temporary certificate of occupancy or other required equivalent approval from
the local governmental authority permitting occupancy of the New Building
notwithstanding that the Expansion Commencement Date shall not be deemed to
have occurred. If Tenant elects to occupy more than 70% of the New Building,
Landlord shall not be permitted to charge any rent in connection therewith
prior to October 1, 2001.
(ii) IN GENERAL. If Tenant timely exercises Tenant's right
to lease the Expansion Space as set forth herein, Landlord and Tenant shall
within thirty (30) days thereafter execute an amendment to this Lease (the
"New Building Amendment") for such Expansion Space upon the terms set forth
in the Expansion Offer Notice, but otherwise upon the terms and conditions
set forth in this Paragraph 42 (including the Extension Option set forth in
Paragraph 41 above) and in this Lease (provided that Tenant shall not be
entitled to any Allowance [as defined in the Work Letter Agreement] in
connection with Tenant's lease of the Expansion Space). Notwithstanding the
foregoing, Landlord may, at its sole option, require that a separate lease be
executed by Landlord and Tenant in connection with Tenant's leasing of the
Expansion Space, in which event such lease (the "New Building Lease") shall
be on the same terms and conditions as affect the initial Premises, except as
provided in this Paragraph 42. The New Building Lease, if applicable, shall
be executed by Landlord and Tenant within thirty (30) days following Tenant's
exercise of its right to lease the Expansion Space. At Landlord's sole
election, Tenant's obligations under the New Building Lease shall be
cross-defaulted with Tenant's obligations hereunder, such that a default by
Tenant under this Lease or the New Building Lease shall also constitute a
default by Tenant under the other lease.
(f) PARKING. During the term of Tenant's lease of the Expansion
Space, Landlord shall provide and Tenant shall have the right to use at a
minimum one unreserved parking space per 1,500 square feet of the Expansion
Space in addition to the parking provided for in Paragraph 1(q) of this
Lease, in accordance with the terms of Paragraph 32 of this Lease.
(g) TERMINATION OF EXPANSION RIGHT. The rights contained in this
Paragraph 42 shall expire on the Expansion Expiration Date if Tenant has not
duly delivered its Expansion Exercise Notice by such date.
(h) TENANT'S CREDITWORTHINESS. Landlord's performance of its
obligations under this Paragraph 42 and Tenant's right to the Expansion
Option are subject to there being no adverse change in the financial
condition of Tenant.
43. OPTIONS.
(a) As used in this Paragraph 43, the word "Options" means the
Extension Option pursuant to Paragraph 41 herein and the Expansion Option
pursuant to Paragraph 42 herein (each, an "Option").
(b) The Options are personal to the original Tenant executing this
Lease and may be exercised only by the original Tenant executing this Lease
while occupying the entire Premises and without the intent of thereafter
assigning this Lease or subletting the Premises and may not be exercised or
be assigned, voluntarily or involuntarily, by any person or entity other than
the original Tenant executing this Lease; provided, that the Options may be
exercised by the assignee (but not sublessee) of this Lease pursuant to a
Permitted Transfer in accordance with Paragraph 24(c). The Options are not
assignable separate and apart from this Lease, nor may the Options be
separated from this Lease in any manner, either by reservation or otherwise.
(c) Tenant shall have no right to exercise either Option,
notwithstanding any provision of the grant of either Option to the contrary,
and Tenant's exercise of either Option may be nullified by Landlord and
deemed of no further force or effect, if Tenant shall be in default of any
monetary obligation or material non-monetary obligation under the terms of
this Lease as of Tenant's exercise of the applicable Option or at the
commencement of the applicable Option event.
44. ARBITRATION. If any dispute referenced in the last sentence of either
Paragraph 14 or Paragraph 17 of this Lease arises ("Dispute"), and if no
other specific procedure is included in this Lease to resolve such Dispute,
then such Dispute, if timely demanded pursuant to Subparagraph (a) below,
shall be resolved and adjudicated by binding arbitration in accordance with
this Paragraph 44. The arbitrator shall be a neutral, disinterested retired
judge selected by the parties from a panel of retired judges available
through the Judicial Arbitration and Mediation Service ("JAMS") or, if JAMS
or its successor does not then exist, by any other arbitrator or retired
judge affiliated with a private, disinterested association providing
arbitration services. Should the parties fail to agree on the selection of a
disinterested, neutral arbitrator within twenty (20) days of written demand
accompanied by written notice of the Dispute by either party, either party
may petition a Washington court of competent jurisdiction and proper venue to
appoint an arbitrator. The arbitration shall be held within sixty (60) days
after the selection of the arbitrator. The parties hereby agree to allow the
taking of depositions for discovery purposes in the arbitration proceedings.
Any hearings required for purposes of the arbitration shall be in Seattle,
Washington at the offices of the arbitrator or such other place designated by
the arbitrator. The arbitration procedure shall be subject to the following:
(a) Any demand for arbitration shall be in writing and must be
made and served on the other party within a reasonable time after the Dispute
has arisen and in no event shall the demand for arbitration be made after the
earlier of the date which is (i) thirty (30) days after service by either
party of summons and complaint, the subject matter of which is essentially
identical with the subject matter of the demand for arbitration, or (ii) the
date that institution of legal or equitable proceedings based on such Dispute
would be barred by the applicable statute of limitations.
(b) The provisions of this Paragraph 44 are not intended to
require Landlord or Tenant to arbitrate any matters relating to any default
under this Lease, which matters shall be governed by the applicable
provisions of this Lease and/or applicable law.
ADDENDUM
Page 3
(c) All proceedings involving the parties shall be reported by a
certified shorthand court reporter and written transcripts of the proceedings
shall be prepared and made available to the parties.
(d) The arbitrator shall prepare and deliver to the parties
factual findings in writing which shall include the reasons on which the
decision of the arbitrator is based. The arbitrator shall be bound by the
provisions of this Lease, and shall not add to, subtract from or otherwise
modify such provisions.
(e) Final decision by the arbitrator must be provided to the
parties within thirty (30) days from the date on which the matter is
submitted to the arbitrator.
(f) The prevailing party (as defined below) shall be awarded
interest on the amount awarded (at the Interest Rate), reasonable attorneys'
fees, expert and nonexpert witness costs and expenses (including without
limitation the fees and costs of the court reporter described in Subparagraph
(c) above), and other costs and expenses incurred in connection with the
arbitration, unless the arbitrator for good cause determines otherwise.
(g) As used herein, the term "prevailing party" shall mean the
party, if any, that the arbitrator determines is "clearly the prevailing
party."
(h) Costs and fees of the arbitrator shall be borne by the
nonprevailing party, unless the arbitrator for good cause determines
otherwise. If there is no prevailing party, the parties shall bear their own
fees and costs and split the fees and costs of the arbitrator and court
reporter.
(i) The award or decision of the arbitrator, which may include
equitable relief, shall be final and judgment may be entered on it in
accordance with applicable law in any court having jurisdiction over the
matter. The provisions of this Paragraph 44 are not intended to alter the
applicable provisions of law which provide the grounds on which a court may
vacate an arbitration award.
TENANT: LANDLORD:
CUTTER & BUCK, INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC,
a Washington corporation a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇▇▇ Industrial Partners, Inc.,
-------------------------------- a California corporation,
Its: Managing Member
Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: VP Operations -------------------------------
------------------------- ▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
ADDENDUM
Page 4
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I now or have satisfactory evidence that
▇▇▇▇▇▇ ▇▇▇▇▇ is the person who appeared before me, and said person
acknowledged that he/she was authorized to execute the instrument and
acknowledged it as the Vice President of Operations of Cutter and Buck to be
the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
Dated: May 27, 1999
-----------------------------
---------------------------------------- /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Notary Public
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
My commission expires 4/6/03
------------
----------------------------------------
(Use this space for notarial stamp/seal)
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I now or have satisfactory evidence that ▇▇▇▇
▇. ▇▇▇▇▇ is the person who appeared before me, and said person acknowledged
that he/she was authorized to execute the instrument and acknowledged it as
the Vice President of ▇▇▇▇▇▇ ▇▇▇▇▇▇ to be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated: May 27, 1999
-----------------------------
---------------------------------------- /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Notary Public
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
My commission expires 4/6/03
------------
----------------------------------------
(Use this space for notarial stamp/seal)
ADDENDUM
Page 5
NEW BUILDING
[To Be Attached]
SCHEDULE "I"
to
ADDENDUM
SITE PLAN SHOWING PREMISES
[To be supplied]
EXHIBIT "A-I"
BASE SPECIFICATIONS AND DESCRIPTION OF PLANS
FOR THE BUILDING
BASE SPECIFICATIONS:
- 30' MINIMUM Clear Height
- 52'X40' Column Spacing (60' at doors)
- ESFR Sprinkler System
- Gas Heaters in the Warehouse Per Code @ 8BTU/Hr/Sq.Ft.
- 1200 Amp Electrical Service @277/480 ▇. ▇ ▇▇▇▇▇ ▇ ▇▇▇▇
- ▇▇▇▇▇ ▇▇▇▇▇▇ Warehouse Lighting @ 15 Fc
- Asphalt Paving and Landscaping of Entire Site
- 30 (more or less) - 9'X10' Dock-High 48" Truck Doors with 4ft Metal Canopy
- 2-12'X14' Truck Door with Ramp into Building
- Site Lighting with Wall Pacs on Building
- 2-Story Glass Entry
- Concrete Tilt-Up Exterior ▇▇▇▇▇
- ▇▇▇▇ Panelized Roof Structure with steel open web bar joists and girders
- 6" Thick Reinforced Concrete Floor Slab (with>250 lb./sf load)
- 4 Ply Built-up Roofing
- R-11 Rigid Insulation on Roof Deck
- 62 (more or less) - 4'X8' Smoke Vents/Skylights
DESCRIPTION OF PLANS:
Sheet Nos. Prepared By Date
T1 - T5 Barghausen Consulting Engineers 11/2/98
T1.1 Barghausen Consulting Engineers 11/2/98
C1 - C15 Barghausen Consulting Engineers 3/1/99
1 Barghausen Consulting Engineers 3/1/99
2 Barghausen Consulting Engineers 3/1/99
A0.1 - A9.2 CNA Architecture 3/1/99
S1.1 - S4.5 CNA Architecture 3/1/99
EXHIBIT "A-II"
ADJUSTMENTS TO
MONTHLY BASE RENT
Rate Per Square Foot Additional Rate Per Square Foot
Months of the Building Per Month of Office Space Per Month
------ ------------------------- -------------------------
1 $.3325 $.65
2* $0 $0
3 - 48 $.3325 $.65
49 - 84 $.3725 $.72
Prior to the Commencement Date, Landlord will cause its architect
to measure and certify in writing to Landlord the square footage of the
Premises and the office space within the Premises, following which time the
Monthly Base Rent and other figures based upon the square feet contained in
the Premises and the office space within the Premises shall be determined in
accordance with the rental rates set forth above. Except in the case of
manifest error, the certification from Landlord's architect shall be binding
upon Landlord and Tenant.
* Tenant's obligation to pay Monthly Base Rent shall be abated during the
second (2nd) month of the Term.
EXHIBIT "B"
WORK LETTER AGREEMENT
[ALLOWANCE]
[LANDLORD BUILD]
This WORK LETTER AGREEMENT ("Work Letter Agreement") is entered into as of
the 27 day of May, 1999 by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a Delaware limited
liability company ("Landlord"), and CUTTER & BUCK, INC., a Washington
corporation ("Tenant").
R E C I T A L S :
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. All terms not
defined herein have the same meaning as set forth in the Lease. To the
extent applicable, the provisions of the Lease are incorporated herein by
this reference.
B. In order to induce Tenant to enter into the Lease and in consideration
of the mutual covenants hereinafter contained, Landlord and Tenant agree as
follows:
1. BUILDING SHELL; TENANT IMPROVEMENTS. As used in this Work Letter
Agreement, the term "Building Shell" shall mean the industrial building to be
constructed by Landlord at Landlord's sole expense in accordance with the
plans and specifications described in Exhibit "A-II" to the Lease
(collectively, the "Building Plans"), which Building Plans have been approved
by Landlord and Tenant. As used in the Lease and this Work Letter Agreement,
the term "Tenant Improvements" or "Tenant Improvement Work" means
collectively those items of tenant improvement construction relating to the
office portion of the Premises ("Office Improvements") shown on the Tenant's
Final Plans (described in Paragraph 4 below) and the Above-Standard
Improvements (described in Paragraph 5 below).
2. WORK SCHEDULE. Within thirty (30) days after the execution of this
Lease, Landlord will deliver to Tenant, for Tenant's review and approval, a
schedule ("Work Schedule") which will set forth the timetable for the
construction of the Building Shell and the planning and completion of the
installation of the Tenant Improvements and the Commencement Date of the
Lease. The Work Schedule will set forth each of the various items of work to
be done or approval to be given by Landlord and Tenant in connection with the
completion of the Tenant Improvements. The Work Schedule will be submitted
to Tenant for its approval, which approval Tenant agrees not to unreasonably
withhold, and, once approved by both Landlord and Tenant, the Work Schedule
will become the basis for completing the Tenant Improvements. All plans and
drawings required by this Work Letter Agreement and all work performed
pursuant thereto are to be prepared and performed in accordance with the Work
Schedule. If Tenant fails to approve the Work Schedule, as it may be
modified after discussions between Landlord and Tenant within ten (10)
business days after the date the Work Schedule is first received by Tenant,
the Work Schedule shall be deemed to be approved by Tenant as submitted.
3. CONSTRUCTION REPRESENTATIVES. Landlord hereby appoints the following
person(s) as Landlord's representative ("Landlord's Representative") to act
for Landlord in all matters covered by this Work Letter Agreement: ▇▇▇▇ ▇▇▇▇▇.
Tenant hereby appoints the following person(s) as Tenant's representative
("Tenant's Representative") to act for Tenant in all matters covered by this
Work Letter Agreement: ▇▇▇▇ ▇▇▇▇▇, Vice President-Operations.
All communications with respect to the matters covered by this Work Letter
Agreement are to made to Landlord's Representative or Tenant's
Representative, as the case may be, in writing in compliance with the notice
provisions of the Lease. Either party may change its representative under
this Work Letter Agreement at any time by written notice to the other party
in compliance with the notice provisions of the Lease.
4. TENANT IMPROVEMENT PLANS.
(a) PREPARATION OF SPACE PLANS. In accordance with the Work Schedule,
Tenant agrees to meet with Landlord's architect and/or space planner for the
purpose of promptly preparing preliminary space plans for the interior layout
of Premises ("Space Plans"). The Space Plans are to be sufficient to convey
the architectural design of the interior of the Premises and layout of the
interior of the Office Improvements therein and are to be submitted to
Landlord in accordance with the Work Schedule for Landlord's approval. If
Landlord reasonably disapproves any aspect of the Space Plans, Landlord will
advise Tenant in writing of such disapproval and the reasons therefor in
accordance with the Work Schedule. Tenant will then submit to Landlord for
Landlord's approval, in accordance with the Work Schedule, a redesign of the
Space Plans incorporating the revisions reasonably required by Landlord.
(b) PREPARATION OF TENANT'S FINAL PLANS. Based on the approved Space Plans,
and in accordance with the Work Schedule, Landlord's architect will prepare
complete architectural plans, drawings and specifications and complete
engineered mechanical, structural and electrical working drawings for all of
the Office Improvements for the Premises (collectively, the "Tenant's Final
Plans"). The Tenant's Final Plans will show: (a) the subdivision (including
partitions and walls), layout, lighting, finish and decoration work
(including carpeting and other floor coverings) for the office portion of the
Premises; (b) all internal and external communications and utility facilities
relating to the office portion of the Premises which will require conduiting
or other improvements from the base Building Shell work and/or within common
areas; and (c) all other specifications for the Office Improvements. The
Tenant's Final Plans will be submitted to Tenant for signature to confirm
that they are consistent with the Space Plans. If Tenant reasonably
disapproves any aspect of the Tenant's Final Plans based on any inconsistency
with the Space Plans, Tenant agrees to advise Landlord in writing of such
disapproval and the reasons therefor within the time frame set forth in the
Work Schedule (which shall be no less than five (5) business days after
Tenant's receipt of Tenant's Final Plans). In accordance with the Work
Schedule, Landlord will then cause Landlord's architect to redesign the
Tenant's Final Plans incorporating the revisions reasonably requested by
Tenant so as to make the Tenant's Final Plans consistent with the Space Plans.
(c) REQUIREMENTS OF TENANT'S FINAL PLANS. Tenant's Final Plans will include
locations and complete dimensions, and the Office Improvements, as shown on
the Tenant's Final Plans, will: (i) be compatible with the Building Shell
and with the design, construction
EXHIBIT "C"
Page 1
and equipment of the Building; (ii) comply with all applicable laws,
ordinances, rules and regulations of all governmental authorities having
jurisdiction, and all applicable insurance regulations; (iii) not require
Building service beyond the level normally provided to other tenants in the
Development and will not overload the Building floors; and (iv) be of a
nature and quality consistent with the overall objectives of Landlord for the
Building, as determined by Landlord in its reasonable but subjective
discretion.
(d) SUBMITTAL OF TENANT'S FINAL PLANS. Once approved by Landlord and
Tenant, Landlord's architect will submit the Tenant's Final Plans to the
appropriate governmental agencies for plan checking and the issuance of a
building permit. Landlord's architect, with Tenant's cooperation, will make
any changes to the Tenant's Final Plans which are requested by the applicable
governmental authorities to obtain the building permit. After approval of
the Tenant's Final Plans no further changes may be made without the prior
written approval of both Landlord and Tenant, and then only after agreement
by Tenant to pay any excess costs resulting from the design and/or
construction of changes requested by Tenant. Tenant hereby acknowledges that
any such changes will be subject to the terms of Paragraph 9 below.
(e) CHANGES TO SHELL OF BUILDING. If the Tenant's Final Plans or any
amendment thereof or supplement thereto shall require changes in the Building
Plans and/or the Building Shell, the increased cost thereof will be paid for
by Tenant or charged against the "Allowances" described in Paragraph 5 below.
Any changes to the Building Plans shall require the prior written approval
of Tenant and Landlord (not to be unreasonably withheld or delayed), provided
that Landlord shall not need the consent or approval of Tenant for changes to
the Building Plans that do not affect the Tenant Improvements and/or the
Premises or materially alter the character of the Building.
(f) WORK COST ESTIMATE AND STATEMENT. Prior to the commencement of
construction of any of the Office Improvements shown on the Tenant's Final
Plans and/or the Above-Standard Improvements, Landlord will submit to Tenant
a written estimate of the cost to complete the Tenant Improvement Work, which
written estimate will be based on the Tenant's Final Plans taking into
account any modifications which may be required to reflect changes in the
Tenant's Final Plans required by the City or County in which the Premises are
located (the "Work Cost Estimate"). Tenant will either approve the Work Cost
Estimate or disapprove specific items and submit to Landlord revisions to the
Tenant's Final Plans to reflect deletions of and/or substitutions for such
disapproved items. Submission and approval of the Work Cost Estimate will
proceed in accordance with the Work Schedule. Upon Tenant's approval of the
Work Cost Estimate (such approved Work Cost Estimate to be hereinafter known
as the "Work Cost Statement"), Landlord will have the right to purchase
materials and to commence the construction of the items included in the Work
Cost Statement pursuant to Paragraph 6 hereof. If the total costs reflected
in the Work Cost Statement exceed the applicable Allowance described in
Paragraph 5 below, Tenant agrees to pay such excess, as additional rent,
prior to the Commencement Date.
5. PAYMENT FOR THE TENANT IMPROVEMENTS.
(a) OFFICE ALLOWANCE. Landlord hereby grants to Tenant a tenant improvement
allowance of $35.00 per square foot of the office portion of the Premises,
not to exceed $210,000 (the "Office Allowance"). The Office Allowance is to
be used only for:
(i) Payment of the cost of preparing the Space Plans and the Tenant's
Final Plans, including mechanical, electrical, plumbing and structural
drawings and of all other aspects necessary to complete the Tenant's Final
Plans. The Office Allowance will not be used for the payment of
extraordinary design work or for payments to any other consultants, designers
or architects other than Landlord's architect and/or Tenant's architect.
(ii) The payment of plan check, permit and license fees relating to
construction of the Office Improvements.
(iii) Construction of the Office Improvements, including, without
limitation, the following:
(aa) Installation within the office portion of the Premises of all
partitioning, doors, floor coverings, ceilings, wall coverings and painting,
millwork and similar items;
(bb) All electrical wiring, lighting fixtures, outlets and switches, and
other electrical work necessary for the office portion of the Premises;
(cc) The furnishing and installation of all duct work, terminal boxes,
diffusers and accessories necessary for the heating, ventilation and air
conditioning systems within the office portion of the Premises, including the
cost of meter and key control for after-hour air conditioning;
(dd) Any additional improvements to the office portion of the Premises
required by Tenant for Tenant's use of the Premises including, but not
limited to, odor control, special heating, ventilation and air conditioning,
noise or vibration control or other special systems or improvements;
(ee) All fire and life safety control systems such as fire walls, sprinklers,
halon, fire alarms, including piping, wiring and accessories, necessary for
the office portion of the Premises;
(ff) All plumbing, fixtures, pipes and accessories necessary for the office
portion of the Premises;
(gg) Testing and inspection costs; and
(hh) Fees for Landlord's tenant improvement coordinator in the amount of
Twenty Five Thousand Dollars ($25,000), and fees for the contractor
including, but not limited to, fees and costs attributable to general
conditions; provided, however, in the event the actual Work Cost exceeds One
Million Dollars ($1,000,000), then Landlord reserves the right to charge
Tenant an additional fee for Landlord's tenant improvement coordinator in the
amount of five percent (5%) of the actual Work Cost in excess of One Million
Dollars ($1,000,000).
(iv) OTHER COSTS. All other costs to be expended by Landlord in the
construction of the Tenant Improvements, including those costs incurred by
Landlord for construction of elements of the Tenant Improvements in the
Premises, which construction was performed by Landlord prior to the execution
of the Lease by Landlord and Tenant and which construction is for the benefit
of tenants and is customarily performed by Landlord prior the execution of
leases for space in the Building for reasons of economics (examples of such
construction would include, but not be limited to, the extension of
mechanical [including heating, ventilating and air conditioning
EXHIBIT "C"
Page 2
systems] and electrical distribution systems outside of the core of the
Building, wall construction, column enclosures and painting outside of the
core of the Building, ceiling hanger wires and window treatment).
(b) ABOVE STANDARD ALLOWANCE. Landlord hereby grants to Tenant an
additional allowance of $401,000 ("Above Standard Allowance") for the
purchase, construction and installation of the above-standard improvements
described on SCHEDULE "1" to this Exhibit "C" ("Above-Standard
Improvements"). The Office Allowance and the Above-Standard Allowance are
sometimes each individually referred to as an "Allowance" and sometimes
collectively referred to as the "Allowances." All costs disbursed or
expended by Landlord as part of the Above Standard Allowance shall be fully
amortized over seven (7) years of the Term and the five (5) year extension
term (i.e., a 12-year amortization), plus interest at a rate of eleven
percent (11%) per year, and the annual amortized amount shall be paid by
Tenant monthly, as additional rent under the Lease, in equal installments
throughout such twelve (12) year period until such excess costs have been
fully repaid; provided, however, that if the term of the Lease is not
extended beyond the initial seven (7) year term, Tenant shall not be
obligated to make any repayment of the Above Standard Allowance which would
otherwise have been payable had the Lease term been extended.
(c) EXCESS COSTS. The cost of each item referenced in Paragraphs 5(a) and
5(b) above shall be charged against the respective Allowance. If the Work
Cost for either the Office Improvements or the Above-Standard Improvements
exceeds the respective Allowance, Tenant agrees to pay to Landlord such
excess including reasonable fees for the contractor prior to the commencement
of construction (less any sums previously paid by Tenant for such excess
pursuant to the Work Cost Estimate). In no event will the Allowances be used
to pay for Tenant's furniture, artifacts, equipment, telephone systems or any
other item of personal property which is not affixed to the Premises.
(d) CHANGES. If, after the Tenant's Final Plans have been prepared and the
Work Cost Statement has been established, Tenant requires any changes or
substitutions to the Tenant's Final Plans, any additional costs related
thereto including reasonable fees for the contractor are to be paid by Tenant
to Landlord prior to the Commencement Date. Any changes to the Tenant's
Final Plans will be approved by Landlord and Tenant in the manner set forth
in Paragraph 4 above and will, if necessary, require the Work Cost Statement
to be revised and agreed upon between Landlord and Tenant in the manner set
forth in Subparagraph 4(f) above. Landlord will have the right to decline
Tenant's request for a change to the Tenant's Final Plans if such changes are
inconsistent with the provisions of Paragraph 4 above, or if the change would
unreasonably delay construction of the Tenant Improvements and the
Commencement Date of the Lease.
(e) UNUSED ALLOWANCE AMOUNTS. Except as provided in the following sentence,
any unused portion of either Allowance upon completion of the Tenant
Improvements will not be refunded to Tenant or be available to Tenant as a
credit against any obligations of Tenant under the Lease. The unused portion
of either Allowance, if any, shall be credited against the excess costs, if
any, associated with improvements made with respect to the other Allowance.
(f) AMENDMENT TO LEASE. Within fifteen (15) business days following the
Commencement Date (as defined in Paragraph 8(a) below), Landlord and Tenant
shall execute an amendment to the Lease setting forth a new rent schedule
which incorporates the amortization of any costs funded by Landlord with
respect to the Above Standard Allowance.
6. CONSTRUCTION OF TENANT IMPROVEMENTS. Until Tenant approves the Tenant's
Final Plans and Work Cost Statement, Landlord will be under no obligation to
cause the construction of any of the Tenant Improvements. Following Tenant's
approval of the Work Cost Statement described in Subparagraph 4(f) above,
Landlord's contractor will commence and diligently proceed with the
construction of the Tenant Improvements, subject to Tenant Delays (as
described in Paragraph 9 below) and Force Majeure Delays (as described in
Paragraph 10 below).
7. CONSTRUCTION AND PAYMENT FOR THE BUILDING SHELL. Landlord hereby agrees
to use its commercially reasonable efforts to cause the Building Shell to be
constructed in accordance with the Building Plans. Except as provided in
Paragraph 4(e) above, Landlord shall pay the cost of designing and
constructing the Building Shell in accordance with the Building Plans.
8. COMMENCEMENT DATE AND SUBSTANTIAL COMPLETION.
(a) COMMENCEMENT DATE. The Term of the Lease will commence on the date (the
"Commencement Date") which is the earlier of: (i) the date Tenant moves into
the Premises to commence operation of its business in all or any portion of
the Premises; or (ii) the date the Building Shell and the Tenant Improvements
have been "substantially completed" (as defined below); provided, however,
that if substantial completion of the Building Shell or the Tenant
Improvements is delayed as a result of any Tenant Delays described in
Paragraph 9 below, then the Commencement Date as would otherwise have been
established pursuant to this Subparagraph 8(a)(ii) will be accelerated by the
number of days of such Tenant Delays; provided, further, that the
Commencement Date (and Tenant's rights to occupy the Premises) shall not
occur prior to that date which is forty-two (42) days after the Shell
Delivery Date (as defined in Paragraph 4(c) of the Lease).
(b) SUBSTANTIAL COMPLETION; PUNCH-LIST. For purposes of Subparagraph
8(a)(ii) above, the Building Shell and the Tenant Improvements will be deemed
to be "substantially completed" when Landlord's contractor certifies in
writing to Landlord and Tenant that Landlord: (a) is able to provide Tenant
with reasonable access to the Premises; (b) has substantially performed all
of the Tenant Improvement Work required to be performed by Landlord under
this Work Letter Agreement, other than decoration and minor "punch-list" type
items and adjustments which do not materially interfere with Tenant's access
to or use of the Premises; and (c) has obtained a temporary certificate of
occupancy or other required equivalent approval from the local governmental
authority permitting occupancy of the Premises. Within thirty (30) days
after receipt of such certificate from Landlord's contractor, Tenant will
conduct a walk-through inspection of the Premises with Landlord and provide
to Landlord a written punch-list specifying those decoration and other
punch-list items which require completion, which items Landlord will
thereafter diligently complete.
(c) DELIVERY OF POSSESSION. Landlord agrees to deliver possession of the
Premises to Tenant when the Building Shell and the Tenant Improvements have
been substantially completed in accordance with Subparagraph (b) above. The
parties estimate that Landlord will deliver possession of the Premises to
Tenant and the Term of this Lease will commence on or before the estimated
commencement date set forth in the Work Schedule delivered to Tenant pursuant
to Paragraph 2 above (the "Projected Commencement Date"). Landlord agrees to
use its commercially reasonable efforts to cause the Premises to be
substantially completed on or before the Projected Commencement Date. In the
event Landlord does not substantially complete construction of the Tenant
Improvements on or before December 1, 1999, which date shall be extended
day-for-day for each day of Tenant Delays and/or Force Majeure Delays (as
such terms are defined in Paragraphs 9 and 10 below) (as so extended, the
"First Damage Date"), for reasons solely attributable to the fault of
Landlord, then the sole remedy of Tenant will be the right to receive one and
one-half (1-1/2) day's worth of Monthly Base Rent credit for every day past
the First Damage Date that Landlord is late in substantially completing
construction of the Tenant Improvements. In
EXHIBIT "C"
Page 3
the event Landlord does not substantially complete construction of the Tenant
Improvements on or before February 1, 2000, which date shall be extended
day-for-day for each day of Tenant Delays and/or Force Majeure Delays (as so
extended, the "Second Damage Date"), for reasons solely attributable to the
fault of Landlord, then the sole remedy of Tenant will be the right to
receive two and one-half (2-1/2) days worth of Monthly Base Rent credit for
every day past the Second Damage Date that Landlord is late in substantially
completing construction of the Tenant Improvements. Notwithstanding anything
to the contrary in this Lease, if the Commencement Date has not occurred by
December 1, 2000 for any reason other than Tenant Delays, then Tenant may, at
its option by notice to Landlord prior to the Commencement Date, elect to
terminate this Lease.
9. TENANT DELAYS. For purposes of this Work Letter Agreement, "Tenant
Delays" means any delay in the completion of the Building Shell or the Tenant
Improvements resulting from any or all of the following: (a) Tenant's
failure to timely perform any of its obligations pursuant to this Work Letter
Agreement, including any failure to complete, on or before the due date
therefor, any action item which is Tenant's responsibility pursuant to the
Work Schedule delivered by Landlord to Tenant pursuant to this Work Letter
Agreement; (b) Tenant's changes to Space Plans or Tenant's Final Plans after
Landlord's approval thereof; (c) changes to the Building Plans resulting from
changes to the Tenant's Final Plans after Landlord's approval thereof; (d)
Tenant's request for materials, finishes, or installations which are not
readily available or which are incompatible with Landlord's standard
specifications for tenant improvements for the Development; (e) any delay of
Tenant in making payment to Landlord for Tenant's share of the Work Cost; or
(f) any other act or failure to act by Tenant, Tenant's employees, agents,
architects, independent contractors, consultants and/or any other person
performing or required to perform services on behalf of Tenant.
10. FORCE MAJEURE DELAYS. For purposes of this Work Letter, "Force Majeure
Delays" means any actual delay in the construction of the Tenant
Improvements, which is beyond the reasonable control of Landlord or Tenant,
as the case may be, as described in Paragraph 33 of the Lease.
IN WITNESS WHEREOF, the undersigned Landlord and Tenant have caused this Work
Letter Agreement to be duly executed by their duly authorized representatives
as of the date of the Lease.
TENANT: LANDLORD:
CUTTER & BUCK, INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC,
a Washington corporation a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇▇▇ Industrial Partners, Inc.,
-------------------------------- a California corporation,
Its: Managing Member
Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Print Title: VP Operations -------------------------------
------------------- ▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
EXHIBIT "C"
Page 4
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I now or have satisfactory evidence that ▇▇▇▇▇▇
▇▇▇▇▇ is the person who appeared before me, and said person acknowledged that
he/she was authorized to execute the instrument and acknowledged it as the
Vice President of Operations of Cutter and Buck to be the free and voluntary
act of such party for the uses and purposes mentioned in the instrument.
Dated: May 27, 1999
-----------------------------
---------------------------------------- /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Notary Public
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
My commission expires 4/6/03
------------
----------------------------------------
(Use this space for notarial stamp/seal)
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I now or have satisfactory evidence that ▇▇▇▇ ▇.
▇▇▇▇▇ is the person who appeared before me, and said person acknowledged that
he/she was authorized to execute the instrument and acknowledged it as the
Vice President of ▇▇▇▇▇▇ ▇▇▇▇▇▇ to be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated: May 27, 1999
-----------------------------
---------------------------------------- /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Notary Public
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
My commission expires 4/6/03
------------
----------------------------------------
(Use this space for notarial stamp/seal)
EXHIBIT "C"
Page 5
ABOVE-STANDARD IMPROVEMENTS
Item Estimated Additional Cost
---- -------------------------
R-21 Roof Insulation (for heating requirement) 62,000
R-11 Wall Insulation (for heating requirement) 43,000
Dock Equipment (10 - 30,000 lb. Levelers/Lights) 50,000
Warehouse Heating 182,000
Lighting Upgrade 56,000
Power Upgrade 8,000
Contractors General Conditions/Supervision/Insurance 40,000
---------
Total $401,000
---------
---------
SCHEDULE "1"
TO
EXHIBIT "C"
NOTICE OF LEASE TERM DATES
AND TENANT'S PERCENTAGE
To: Date:
------------------------------------ -----------------------
------------------------------------
------------------------------------
Re: Lease dated _______________________, 19 (the "Lease"),
between __________________________________________, Landlord, and ___________
____________________________________________________, Tenant, concerning the
building located at _________________________________________________________
(the "Premises").
To Whom It May Concern:
In accordance with the subject Lease, we wish to advise and/or
confirm as follows:
1. That the Premises have been accepted by the Tenant as being
substantially complete in accordance with the subject Lease and that there is
no deficiency in construction except for latent defects as may be indicated
on the "Punch-List" prepared by Landlord and Tenant, a copy of which is
attached hereto.
2. That the Tenant has possession of the subject Premises and
acknowledges that under the provisions of the Lease the Commencement Date is
____________________________________, and the Term of the Lease will expire
on _______________.
3. That in accordance with the Lease, rent commenced to accrue on
______________________.
4. If the Commencement Date of the Lease is other than the first
day of the month, the first billing will contain a pro rata adjustment. Each
billing thereafter will be for the full amount of the monthly installment as
provided for in the Lease.
5. Rent is due and payable in advance on the first day of each
and every month during the Term of the Lease. Your rent checks should be
made payable to ________________________________________________________ at
_________________________________________________________.
6. The number of square feet within the Premises is _____________
square feet as determined by Landlord's architect in accordance with the
terms of the Lease.
7. Tenant's Percentage, as adjusted based upon the number of
square feet within the Premises, is _______%.
LANDLORD:
▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC,
a Delaware limited liability company
By: ▇▇▇▇▇▇ Industrial Partners, Inc.,
a California corporation,
Its: Managing Member
By:
--------------------------------
▇▇▇ ▇▇▇▇▇▇▇
Its: President
EXHIBIT "D"
INDUSTRIAL LEASE
[SINGLE TENANT - TRIPLE NET]
DEFINITION OF OPERATING EXPENSES
1. ITEMS INCLUDED IN OPERATING EXPENSES. The term "Operating
Expenses" as used in the Lease to which this Exhibit "E" is attached means:
all costs and expenses of operation and maintenance all buildings (exterior
maintenance costs) and Common Areas of the Development (as such terms are
defined in the Lease), as determined by generally accepted accounting
practices, including the following costs by way of illustration but not
limitation, but excluding those items specifically set forth in Paragraph 2
below: (a) real property taxes (as defined in Paragraph 12 of the Lease);
(b) any and all assessments imposed with respect to the Building pursuant to
any covenants, conditions and restrictions affecting the Development, the
Common Areas or the Building amortized over the longest allowable period; (c)
Common Area water charges and other Common Area utilities; (d) utilities
surcharges and any other costs, levies or assessments resulting from statutes
or regulations promulgated by any government or quasi-government authority in
connection with the use, occupancy or alteration of the Building or the
Premises or the parking facilities serving the Building or the Premises; (e)
costs of insurance (including reasonable deductibles) obtained by Landlord
pursuant to Paragraph 19 of the Lease; (f) repair and maintenance of storm
drainage facilities; (g) security (if deemed necessary by Landlord); (h)
labor; (i) costs incurred in the management of the Development, including,
without limitation: (i) supplies, (ii) Development management office rental,
supplies, equipment and related operating expenses, and (iii) a
management/administrative fee determined as a percentage of the annual gross
revenues of the Development exclusive of the proceeds of financing or a sale
of the Development or any portion thereof, which management/administrative
fee shall not exceed three percent (3%) of such annual gross revenues, and an
administrative fee for the management of the Common Area (not to exceed five
percent (5%) of Common Area Operating Expenses); (j) supplies, materials,
equipment and tools including rental of personal property used for
maintenance; (k) repair and maintenance of the buildings (including, without
limitation, the exterior roofs) within the Development; (l) maintenance,
costs and upkeep of all parking and other Common Areas, including sidewalks,
curbs and drives; (m) depreciation on a straight line basis and rental of
personal property used in maintenance; (n) amortization on a straight line
basis over the useful life [together with interest at the Interest Rate on
the unamortized balance] of all capitalized expenditures which are: (i)
reasonably intended to produce a reduction in operating charges or energy
consumption; or (ii) required under any governmental law or regulation that
was not applicable to the Development at the time it was originally
constructed; or (iii) for replacement of any Development equipment needed to
operate the Development at the same quality levels as prior to the
replacement; (o) costs and expenses of gardening and landscaping; (p)
maintenance of signs (other than signs of tenants of the Development); (q)
personal property taxes levied on or attributable to personal property used
in connection with the Common Areas; (r) reasonable accounting, audit,
verification, legal and other consulting fees; (s) repair, maintenance and
monitoring of fire protection systems; (t) exterior pest control; (u)
exterior window washing; and (v) costs and expenses of repairs, resurfacing,
repairing, maintenance, painting, exterior lighting, cleaning, and similar
items, including appropriate reserves.
2. ITEMS EXCLUDED FROM OPERATING EXPENSES. Notwithstanding the
provisions of Paragraph 1 above to the contrary, "Operating Expenses" will not
include: (a) Landlord's federal or state income, franchise, inheritance or
estate taxes; (b) any ground lease rental; (c) costs incurred by Landlord for
the repair of damage to the extent that Landlord is reimbursed by insurance or
condemnation proceeds or by tenants, warrantors or other third persons; (d)
depreciation, amortization and interest payments, except as specifically
provided herein, and except on materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services Landlord
might otherwise contract for with a third party, where such depreciation,
amortization and interest payments would otherwise have been included in the
charge for such third party's services, all as determined in accordance with
generally accepted accounting practices; (e) brokerage commissions, finders'
fees, attorneys' fees, space planning costs and other costs incurred by
Landlord in leasing or attempting to lease space in the Development; (f) costs
of a capital nature, including, without limitation, capital improvements,
capital replacements, capital repairs, capital equipment and capital tools, all
as determined in accordance with generally accepted accounting practices;
provided, however, the capital expenditures set forth in Subparagraph 1(n)
above will in any event be included in the definition of Operating Expenses;
(g) interest, principal, points and fees on debt or amortization on any
mortgage, deed of trust or other debt encumbering the Building or the
Development; (h) costs, including permit, license and inspection costs,
incurred with respect to the installation of tenant improvements for tenants in
the Development (including the original Tenant Improvements for the Premises),
or incurred in renovating or otherwise improving, decorating, painting or
redecorating space for tenants or other occupants of the Development, including
space planning and interior design costs and fees; (i) attorneys' fees and
other costs and expenses incurred in connection with negotiations or disputes
with present or prospective tenants or other occupants of the Development;
provided, however, that Operating Expenses will include those attorneys' fees
and other costs and expenses incurred in connection with negotiations, disputes
or claims relating to items of Operating Expenses, enforcement of rules and
regulations of the Development, and such other matters relating to the
maintenance of standards required of Landlord under the Lease; (j) except for
the administrative/management fees described in Subparagraph 1(i) above, costs
of Landlord's general corporate overhead; (k) all items and services for which
Tenant or any other tenant in the Development reimburses Landlord (other than
through operating expense pass-through provisions); (l) electric power costs
for which any tenant directly contracts with the local public service company;
(m) costs arising from Landlord's charitable or political contributions; and
(n) any costs relating to the initial development and construction of the
Development.
EXHIBIT "E"
ESTOPPEL CERTIFICATE
The undersigned, _______________________________________________________
_______________ ("Tenant"), hereby certifies to _______________________________
___________________________________, as follows:
1. Attached hereto is a true, correct and complete copy of that
certain lease dated _________________________, 19__, between _______________
("Landlord") and Tenant (the "Lease"), regarding the premises located at _______
______________________________________________________________________ (the
"Premises"). The Lease is now in full force and effect and has not been
amended, modified or supplemented, except as set forth in Paragraph 4 below.
2. The Term of the Lease commenced on ___________________________,
19______.
3. The Term of the Lease shall expire on ________________________,
19______.
4. The Lease has: (Initial one)
(______________) not been amended, modified, supplemented,
extended, renewed or assigned.
(______________) been amended, modified, supplemented, extended,
renewed or assigned by the following described terms or agreements, copies of
which are attached hereto:
_____________________________________________________________________
_____________________________________________________________________
5. Tenant has accepted and is now in possession of the Premises.
6. Tenant and Landlord acknowledge that Landlord's interest in the
Lease will be assigned to _____________________________________________________
and that no modification, adjustment, revision or cancellation of the Lease or
amendments thereto shall be effective unless written consent of _______________
_______________________________ is obtained, and that until further notice,
payments under the Lease may continue as heretofore.
7. The amount of Monthly Base Rent is $___________________.
8. The amount of Security Deposit (if any) is $________________.
No other security deposits have been made except as follows: ___________________
________________________________________________________________________________
___________________________________.
9. Tenant is paying the full lease rental which has been paid in
full as of the date hereof. No rent or other charges under the Lease have been
paid for more than thirty (30) days in advance of its due date except as
follows: _______________________________________________________________________
__________________________________________________.
10. All work required to be performed by Landlord under the Lease
has been completed except as follows: _________________________________________
_____________________________________________________________________.
11. To the best of Tenant's knowledge, there are no defaults on the
part of the Landlord or Tenant under the Lease except as follows: _____________
_______________________________________________________________________________.
12. To the best of Tenant's knowledge, tenant has no defense as to
its obligations under the Lease and claims no set-off or counterclaim against
the other party except as follows: _____________________________________________
________________________________________________________________________________
___________________________________.
13. Tenant has no right to any concession (rental or otherwise) or
similar compensation in connection with renting the space it occupies other
than as provided in the Lease except as follows: _______________________________
________________________________________________________________________________
________________________________________.
All provisions of the Lease and the amendments thereto (if any) referred to
above are hereby ratified.
The foregoing certification is made with the knowledge that ___________
_________________________ is about to fund a loan to Landlord or _______________
___________________________________ is about to purchase the Building from
Landlord and that _____________________________________________________________
is relying upon the representations herein made in funding such loan or in
purchasing the Building.
IN WITNESS WHEREOF, this certificate has been duly executed and
delivered by the authorized officers of the undersigned as of _______________,
19__.
TENANT:
,
--------------------------------------
a
-------------------------------------
By:
-----------------------------------
Print Name:
-----------------------
Title:
----------------------------
SAMPLE ONLY
[NOT FOR EXECUTION]
EXHIBIT "F"
RULES AND REGULATIONS
A. GENERAL RULES AND REGULATIONS. The following rules and
regulations govern the use of the Building and the Common Areas. Tenant will
be bound by such rules and regulations and agrees to cause Tenant's
Authorized Users, its employees, subtenants, assignees, contractors and
suppliers to observe the same.
1. Except as specifically provided in the Lease to which these
Rules and Regulations are attached, no sign, placard, picture, advertisement,
name or notice may be installed or displayed on any part of the outside or
inside of the Building without the prior written consent of Landlord.
Landlord will have the right to remove, at Tenant's expense and without
notice, any sign installed or displayed in violation of this rule. All
approved signs or lettering on doors and walls are to be printed, painted,
affixed or inscribed at the expense of Tenant and under the direction of
Landlord by a person or company designated or approved by Landlord.
2. If Landlord objects in writing to any curtains, blinds,
shades, screens or hanging plants or other similar objects attached to or
used in connection with any window or door of the Premises, or placed on any
windowsill, which is visible from the exterior of the Premises, Tenant will
immediately discontinue such use. Tenant agrees not to place anything
against or near glass partitions or doors or windows which may appear
unsightly from outside the Premises.
3. Tenant will not obstruct any sidewalks, passages, exits or
entrances of the Development. The sidewalks, passages, exits and entrances
are not open to the general public, but are open, subject to reasonable
regulations, to Tenant's business invitees. Landlord will in all cases retain
the right to control and prevent access thereto of all persons whose presence
in the reasonable judgment of Landlord would be prejudicial to the safety,
character, reputation and interest of the Development and its tenants,
provided that nothing herein contained will be construed to prevent such
access to persons with whom any tenant normally deals in the ordinary course
of its business, unless such persons are engaged in illegal or unlawful
activities. No tenant and no employee or invitee of any tenant will go upon
the roof of the Building.
4. Landlord expressly reserves the right to absolutely prohibit
solicitation, canvassing, sales and displays of products, goods and wares in
all portions of the Development except for such activities as may be
expressly requested by a tenant and conducted solely within such requesting
tenant's premises. Landlord reserves the right to restrict and regulate the
use of the Common Areas of the Development by invitees of tenants providing
services to tenants on a periodic or daily basis including food and beverage
vendors. Such restrictions may include limitations on time, place, manner
and duration of access to a tenant's premises for such purposes.
5. Landlord reserves the right to prevent access to the
Development in case of invasion, mob, riot, public excitement or other
commotion by closing the doors or by other appropriate action.
6. Tenant shall not alter any lock or install any new additional
lock or bolt on any door of the Premises. Tenant, upon the termination of
its tenancy, will deliver to Landlord the keys to all doors which have been
furnished to Tenant, and in the event of loss of any keys so furnished, will
pay Landlord therefor.
7. If Tenant requires telegraphic, telephonic, burglar alarm,
satellite dishes, antennae or similar services, it will first obtain
Landlord's approval, and comply with, Landlord's reasonable rules and
requirements applicable to such services.
8. No deliveries will be made which impede or interfere with
other tenants or the operation of the Development.
9. Tenant will not permit or allow the Premises to be occupied or
used in a manner offensive or objectionable to Landlord or other occupants of
the Building by reason of noise, odors or vibrations, nor will Tenant bring
into or keep in or about the Premises any birds or animals.
10. The toilet rooms, toilets, urinals, wash bowls and other
apparatus will not be used for any purpose other than that for which they
were constructed and no foreign substance of any kind whatsoever shall be
thrown therein. The expense of any breakage, stoppage or damage resulting
from any violation of this rule will be borne by the tenant who, or whose
employees or invitees, break this rule.
11. Tenant will not sell, or permit the sale at retail of
newspapers, magazines, periodicals, theater tickets or any other goods or
merchandise to the general public in or on the Premises. Tenant will not
make any building-to-building solicitation of business from other tenants in
the Development. Tenant will not use the Premises for any business or
activity other than that specifically provided for in this Lease.
Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in the Development are prohibited, and Tenant will
cooperate with Landlord to prevent such activities.
12. Tenant will not install any radio or television antenna,
loudspeaker, satellite dishes or other devices on the roof(s) or exterior
walls of the Building or the Development without signing Landlord's license
agreement with respect thereto. Tenant will not interfere with radio or
television broadcasting or reception from or in the Development or elsewhere.
13. Tenant will not affix any floor covering to the floor of the
Premises in any manner except as approved by Landlord. Tenant shall repair
any damage resulting from noncompliance with this rule.
14. Landlord reserves the right to exclude or expel from the
Development any person who, in Landlord's judgment, is in violation of any of
the Rules and Regulations.
15. Tenant will store all its trash and garbage within its
Premises or in other facilities provided by Landlord. Tenant will not place
in any trash box or receptacle any material which cannot be disposed of in
the ordinary and customary manner of trash and garbage disposal. All garbage
and refuse disposal is to be made in accordance with directions issued from
time to time by Landlord.
16. The Premises will not be used for lodging nor shall the
Premises be used for any improper, immoral or objectionable purpose.
EXHIBIT "G"
Page 1
17. Tenant agrees to comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency.
18. Tenant assumes any and all responsibility for protecting its
Premises from theft, robbery and pilferage, which includes keeping doors
locked and other means of entry to the Premises closed.
19. Tenant shall use at Tenant's cost such pest extermination and
control contractor(s) as Landlord may direct and at such intervals as
Landlord may reasonably require.
20. To the extent Landlord reasonably deems it necessary to
exercise exclusive control over any portions of the Common Areas for the
mutual benefit of the tenants in the Development, Landlord may do so subject
to reasonable, non-discriminatory additional rules and regulations (so long
as the parking, access and visibility of the Premises are not affected).
21. Tenant's requirements will be attended to only upon
appropriate application to Landlord's asset management office for the
Development by an authorized individual of Tenant. Employees of Landlord
will not perform any work or do anything outside of their regular duties
unless under special instructions from Landlord, and no employee of Landlord
will admit any person (Tenant or otherwise) to any office without specific
instructions from Landlord.
22. These Rules and Regulations are in addition to, and will not
be construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease. 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 will 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 Development.
23. Landlord reserves the right to make such other and reasonable
and non-discriminatory Rules and Regulations as, in its judgment, may from
time to time be needed for safety and security, for care and cleanliness of
the Development and for the preservation of good order therein. Tenant
agrees to abide by all such Rules and Regulations herein above stated and any
additional reasonable and non-discriminatory rules and regulations which are
adopted. Tenant is responsible for the observance of all of the foregoing
rules by Tenant's employees, agents and contractors.
B. PARKING RULES AND REGULATIONS. The following rules and
regulations govern the use of the parking facilities which serve the
Building. Tenant will be bound by such rules and regulations and agrees to
cause its employees, subtenants, assignees, contractors and suppliers to
observe the same:
1. Tenant will not permit or allow any vehicles that belong
to or are controlled by Tenant or Tenant's employees, subtenants, customers
or invitees to be loaded, unloaded or parked in areas other than those
designated by Landlord for such activities. No vehicles are to be left in
the parking areas overnight and no vehicles are to be parked in the parking
areas other than normally sized passenger automobiles, motorcycles and
pick-up trucks. Trucks may park in loading areas only during the time such
trucks are being loaded or unloaded. No extended term storage of vehicles is
permitted.
2. Vehicles must be parked entirely within painted stall
lines of a single parking stall.
3. All directional signs and arrows must be observed.
4. The speed limit within all parking areas shall be five
(5) miles per hour.
5. Parking is prohibited:
(a) in areas not striped for parking;
(b) in aisles or on ramps;
(c) where "no parking" signs are posted;
(d) in cross-hatched areas; and
(e) in such other areas as may be designated from time
to time by Landlord or Landlord's parking operator.
6. Landlord reserves the right, without cost or liability to
Landlord, to tow any vehicle if such vehicle's audio theft alarm system
remains engaged for an unreasonable period of time.
7. Washing, waxing, cleaning or servicing of any vehicle in
any area not specifically reserved for such purpose is prohibited.
8. Landlord may refuse to permit any person to park in the
parking facilities who violates these rules with unreasonable frequency, and
any violation of these rules shall subject the violator's car to removal, at
such car owner's expense. Tenant agrees to use its best efforts to acquaint
its employees, subtenants, assignees, contractors, suppliers, customers with
these parking provisions, rules and regulations.
9. Parking stickers, access cards, or any other device or
form of identification supplied by Landlord as a condition of use of the
parking facilities shall remain the property of Landlord. Parking
identification devices, if utilized by Landlord, must be displayed as
requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Parking identification
devices, if any, are not transferable and any device in the possession of an
unauthorized holder will be void. Landlord reserves the right to refuse the
sale of monthly stickers or other parking identification devices to Tenant or
any of its agents, employees or representatives who willfully refuse to
comply with these rules and regulations and all unposted city, state or
federal ordinances, laws or agreements.
EXHIBIT "G"
Page 2
10. Loss or theft of parking identification devices or access
cards must be reported to the management office in the Development
immediately, and a lost or stolen report must be filed by the Tenant or user
of such parking identification device or access card at the time. Landlord
has the right to exclude any vehicle from the parking facilities that does
not have a parking identification device or valid access card. Any parking
identification device or access card which is reported lost or stolen and
which is subsequently found in the possession of an unauthorized person will
be confiscated and the illegal holder will be subject to prosecution.
11. Landlord is not responsible for damage by water or fire,
or for the acts or omissions of others, or for articles left in vehicles.
12. Landlord reserves the right, without cost or liability to
Landlord, to tow any vehicles which are used or parked in violation of these
rules and regulations.
13. Landlord reserves the right from time to time to modify
and/or adopt such other reasonable and non-discriminatory rules and
regulations for the parking facilities as it deems reasonably necessary for
the operation of the parking facilities.
EXHIBIT "G"
Page 3
OAKESDALE BUSINESS CAMPUS
TENANT ENVIRONMENTAL QUESTIONNAIRE
The purpose of this form is to obtain information regarding the use or
proposed use of hazardous materials at the premises. Prospective tenants
should answer the questions in light of their proposed operations at the
premises. Existing tenants should answer the questions as they relate to
ongoing operations at the premises and should update any information
previously submitted. If additional space is needed to answer the questions,
you may attach separate sheets of paper to this form.
Your cooperation in this matter is appreciated.
1. GENERAL INFORMATION
Name of Responding Company:
---------------------------------------------
Check the Applicable Status: Prospective Tenant Existing Tenant
--- ---
Mailing Address:
--------------------------------------------------------
-------------------------------------------------------------------------
Contact Person and Title:
-----------------------------------------------
Telephone Number: ( )
----- -----------------------------------------------
Address of Leased Premises:
---------------------------------------------
Length of Lease Term:
------------------------------------------
Describe the proposed operations to take place on the premises, including
principal products manufactured or services to be conducted. Existing
tenants should describe any proposed changes to ongoing operations.
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be used or stored on-site?
Wastes Yes No
----- -----
Chemical Products Yes No
----- -----
2.2 Attach a list of any hazardous materials to be used or stored, the
quantities that will be on-site at any given time, and the location
and method of storage (e.g., 55-gallon drums on concrete pad).
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel or other
hazardous substances in tanks or sumps proposed or currently conducted
at the premises?
Yes No
----- -----
If yes, describe the materials to be stored, and the type, size and
construction of the sump or tank. Attach copies of any permits
obtained for the storage of such substances.
--------------------------------------------------------------------
--------------------------------------------------------------------
3.2 Have any of the tanks or sumps been inspected or tested for leakage?
Yes No
----- -----
If so, attach the results.
EXHIBIT "H"
Page 1
3.3 Have any spills or leaks occurred from such tanks or sumps?
Yes No
----- -----
If so, describe.
--------------------------------------------------------------------
--------------------------------------------------------------------
3.4 Were any regulatory agencies notified of the spill or leak?
Yes No
----- -----
If so, attach copies of any spill reports filed, any clearance letters
or other correspondence from regulatory agencies relating to the spill
or leak.
3.5 Have any underground storage tanks or sumps been taken out of service
or removed?
Yes No
----- -----
If yes, attach copies of any closure permits and clearance obtained
from regulatory agencies relating to closure and removal of such
tanks.
4. SPILLS
4.1 During the past year, have any spills occurred at the premises?
Yes No
----- -----
If yes, please describe the location of the spill.
--------------------------------------------------------------------
--------------------------------------------------------------------
4.2 Were any agencies notified in connection with such spills?
Yes No
----- -----
If yes, attach copies of any spill reports or other correspondence
with regulatory agencies.
4.3 Were any clean-up actions undertaken in connection with the spills?
Yes No
----- -----
Attach copies of any clearance letters obtained from any regulatory
agencies involved and the results of any final soil or groundwater
sampling done upon completion of the clean-up work.
5. WASTE MANAGEMENT
5.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
Number?
Yes No
----- -----
5.2 Has your company filed a biennial report as a hazardous waste
generator?
Yes No
----- -----
If so, attach a copy of the most recent report filed.
5.3 Attach a list of the hazardous wastes, if any, generated or to be
generated at the premises, its hazard class and the quantity generated
on a monthly basis.
5.4 Describe the method(s) of disposal for each waste. Indicate where and
how often disposal will take place.
On-site treatment or recovery
----- -------------------------
Discharged to sewer
----- -------------------------
Transported and Disposal of off-site
----- -------------------------
Incinerator
----- -------------------------
EXHIBIT "H"
Page 2
5.5 Indicate the name of the person(s) responsible for maintaining copies
of hazardous waste manifests completed for off-site shipments of
hazardous waste.
--------------------------------------------------------------------
5.6 Is any treatment of processing of hazardous wastes currently conducted
or proposed to be conducted at the premises:
Yes No
----- -----
If yes, please describe any existing or proposed treatment methods.
--------------------------------------------------------------------
--------------------------------------------------------------------
5.7 Attach copies of any hazardous waste permits or licenses issued to
your company with respect to its operations at the premises.
6. WASTEWATER TREATMENT/DISCHARGE
6.1 Do you discharge wastewater to:
storm drain? sewer?
----- -----
surface water? no industrial discharge
----- -----
6.2 Is your wastewater treated before discharge?
Yes No
----- -----
If yes, describe the type of treatment conducted.
--------------------------------------------------------------------
--------------------------------------------------------------------
6.3 Attach copies of any wastewater discharge permits issued to your
company with respect to its operations at the premises.
7. AIR DISCHARGES
7.1 Do you have any filtration systems or stacks that discharge into the
air?
Yes No
----- -----
7.2 Do you operate any of the following types of equipment or any other
equipment requiring an air emissions permit?
Spray booth
------
Dip tank
------
Drying oven
------
Incinerator
------
Other (please describe)
------ ------------------------------------
No equipment requiring air permits
------
7.3 Are air emissions from your operations monitored?
Yes No
----- -----
If so, indicate the frequency of monitoring and a description of the
monitoring results.
--------------------------------------------------------------------
7.4 Attach copies of any air emissions permits pertaining to your
operations at the premises.
8. HAZARDOUS MATERIALS DISCLOSURES
8.1 Does your company handle hazardous materials in a quantity equal to or
exceeding an aggregate of 500 pounds, 55 gallons, or 200 cubic feet
per month?
Yes No
----- -----
EXHIBIT "H"
Page 3
8.2 Has your company prepared a hazardous materials management plan
pursuant to any applicable requirements of a local fire department or
governmental agency
Yes No
----- -----
If so, attach a copy of the business plan.
8.3 Has your company adopted any voluntary environmental, health or safety
program?
Yes No
----- -----
If so, attach a copy of the program.
9. ENFORCEMENT ACTIONS, COMPLAINTS
9.1 Has your company ever been subject to any agency enforcement actions,
administrative orders, or consent decrees?
Yes No
----- -----
If so, describe the actions and any continuing compliance obligations
imposed as a result of these actions.
--------------------------------------------------------------------
9.2 Has your company ever received requests for information, notice or
demand letters, or any other inquiries regarding its operations?
Yes No
----- -----
9.3 Have there ever been, or are there now pending, any lawsuits against
the company regarding any environmental or health and safety concerns?
Yes No
----- -----
9.4 Has an environmental audit ever been conducted at your company's
current facility?
Yes No
----- -----
If so, identify who conducted the audit and when it was conducted.
--------------------------------------------------------------------
--------------------------------------------------------------------
---------------------------------------
Company
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
EXHIBIT "H"
Page 4