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EXHIBIT 10.11
SUNSET NORTH CORPORATE CAMPUS
LEASE AGREEMENT
BETWEEN
WRC SUNSET NORTH LLC ("LANDLORD")
AND
BSQUARE CORPORATION ("TENANT")
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OFFICE LEASE AGREEMENT
This Office Lease Agreement (the "Lease") is made and entered into as of
the 15th day of January, 1999, by and between WRC SUNSET NORTH LLC, a Washington
limited liability company ("Landlord") and BSQUARE CORPORATION, a Washington
corporation ("Tenant").
ARTICLE 1. BASIC LEASE INFORMATION; DEFINITION.
A. The following are some of the basic lease information and defined
terms used in this Lease.
1. "ADDITIONAL BASE RENTAL" shall mean Tenant's Pro Rata Share of
Basic Costs and any other sums (exclusive of Base Rental) that are required to
be paid by Tenant to Landlord hereunder, which sums are deemed to be additional
rent under this Lease. Additional Base Rental and Base Rental are sometimes
collectively referred to herein as "Rent".
2. "BASE RENTAL" shall mean Twenty and no/100 Dollars ($20.00) per
rentable square foot of the Premises per year during year one (1) of the Lease
Term; Twenty-One and no/100 Dollars ($21.00) per rentable square foot of the
Premises per year during years two (2) and three (3) of the Lease Term;
Twenty-Two and no/100 Dollars ($22.00) per rentable square foot of the Premises
per year during years four (4) and five (5) of the Lease Term; Twenty-Three and
no/100 Dollars ($23.00) per rentable square foot of the Premises per year during
years six (6) and seven (7) of the Lease Term; Twenty-Four and no/100 Dollars
($24.00) per rentable square foot of the Premises per year during years eight
(8) and nine (9) of the Lease Term; and Twenty-Five and no/100 Dollars ($25.00)
per rentable square foot of the Premises per year during year ten (10) of the
Lease Term.
3. "BUILDING" shall mean the office building commonly known as
Building 4 of Sunset North Corporate Campus, located at the Northeast corner of
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Southeast 32nd Street, Bellevue, King County,
Washington. "BUILDINGS" means the Building and Building 3 and Building 5,
collectively.
4. "CAMPUS" means the Sunset North Corporate Campus located at the
Northeast corner of 139th Avenue Southeast and Southeast 32nd Street in
Bellevue, King County, Washington. The Campus contains the Building (commonly
known as Building 4), and the office buildings commonly known as BUILDING 3 AND
BUILDING 5.
5. The "COMMENCEMENT DATE," "INITIAL LEASE TERM," "LEASE TERM" and
"TERMINATION DATE" shall have the following meanings: The "INITIAL LEASE TERM"
shall mean a period of one hundred twenty (120) months commencing on the
Commencement Date, as defined in Section 3(A) (the "COMMENCEMENT DATE"). The
target commencement date is August 15, 1999 (the "TARGET COMMENCEMENT DATE").
The "TERMINATION DATE" shall, unless sooner terminated as provided herein, mean
the last day of the Lease Term. Notwithstanding the foregoing, if the
Termination Date, as determined herein, does not occur on the last day of a
calendar month, the Lease Term shall be extended by the number of days necessary
to cause the Termination Date to occur on the last day of the last calendar
month of the Lease Term. Tenant shall pay Base Rental and Additional Base Rental
for such additional days at the same rate
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payable for the portion of the last calendar month immediately preceding such
extension. Tenant has the option of extending the term of this Lease beyond the
Initial Lease Term pursuant to the provisions of Section 5(C) below. The term of
this Lease, as so extended, is referred to in this Lease as the "LEASE TERM."
6. "INDEX" shall mean the "Consumer Price Index (United States City
Average for All Urban Consumers) -- All Items (Reference Base 1982-84=100)"
published by the United States Department of Labor, Bureau of Labor Statistics.
In the event the Index shall hereafter be converted to a different standard
reference base or otherwise revised, the determination of the percentage
increase shall be made with the use of such conversion factor, formula or table
for converting such index as may be published by the Bureau of Labor Statistics
or, if said Bureau shall not publish the same, then with the use of such
conversion, factor, formula or table as may be published by Prentice Hall, Inc.
or any other nationally recognized publisher of similar statistical information.
In the event any such index shall cease to be published, then for the purposes
of this Section, there shall be substituted such other index as Landlord and
Tenant shall reasonably agree. References to the Index as of a particular date
shall mean the Index most recently published on such date.
7. "INITIAL PREMISES" shall mean the area located on the entire third
(3rd), fourth (4th) and fifth (5th) floors of the Building, as outlined on
Exhibit A attached hereto and incorporated herein, containing approximately
ninety-four thousand one hundred eighty-two (94,182) rentable square feet of
area and eighty-four thousand eight hundred forty-nine (84,849) usable square
feet of area, measured on a single tenant per floor basis, using BOMA standards.
The area of the Premises may be adjusted or expanded in accordance with the
provisions of Section 5(A) below. The Initial Premises, as later modified or
expanded, is referred to in this Lease as the "PREMISES."
8. "PERMITTED USE" shall mean only sales, general office, computer
research, engineering, development and testing, and administration, together
with uses ancillary thereto (such as cafeteria and related kitchen facilities),
and any other legally permitted use consistent with the character of the
Building.
9. "RENTABLE AREA," "RENTABLE SQUARE FEET" and similar terms shall
mean Rentable Area as determined in accordance with the American National
Standard Method of measuring floor space in office buildings as published by the
Building Owners and Managers Association International dated June 7, 1996
("BOMA").
10. "TENANT'S PRO RATA SHARE" shall mean twenty and four hundred forty
five one thousandths percent (20.445%), which is the quotient (expressed as a
percentage), derived by dividing the Rentable Area of the Premises (94,182) by
the Rentable Area of Buildings 3,4 and 5 (460,663). At such time as the
construction of all of the Buildings is completed, Landlord will cause the
rentable square feet of the Buildings and the Premises to be determined in
accordance with BOMA standards, will notify Tenant of such rentable square feet,
and Tenant's Pro Rata Share shall be adjusted accordingly if the Rentable Area
differs from that set forth above.
11. "USABLE AREA," "USABLE SQUARE FEET" and similar terms shall mean
Usable Area as determined in accordance with BOMA.
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12. "NOTICE ADDRESSES" shall mean the following addresses for Tenant
and Landlord, respectively:
Tenant: On and after the Commencement Date, notices shall be
sent to Tenant at the Premises.
Prior to tile Commencement Date, notices shall be sent
to Tenant at the following address:
BSQUARE Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Landlord: WRC Sunset North LLC
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to:
Equity Office Properties Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Regional Counsel - Western Region
Payments of Rent only shall be made payable to the order of WRC Sunset
North LLC at the address of the Landlord set forth above, or such other address
as may be specified in the Commencement Letter delivered to Tenant pursuant to
Section 3(C).
B. The following are additional definitions of some of the defined terms
used in the Lease.
1. "BASIC COSTS" are defined below in Section 7(B) hereof.
2. "BROKER" means The ▇▇▇▇▇▇▇▇▇ Group and Leibsohn & Company
3. "BUILDING STANDARD" shall mean the type, grade, brand, quality
and/or quantity of materials Landlord designates from time to time to be the
minimum quality and/or quantity to be used in the Building.
4. "BUSINESS DAY(S)" shall mean Mondays through Fridays exclusive of
the normal business holidays ("Holidays") of New Year's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Landlord, from
time to time during the
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Lease Term, shall have the right to designate additional Holidays, provided such
additional Holidays are nationally recognized by other office buildings.
5. "COMMON AREAS" shall mean those areas provided for the common use
or benefit of all tenants generally and/or the public, such as corridors,
elevators, elevator foyers, common mail rooms, restrooms, vending areas, lobby
areas (whether at ground level or otherwise), walkways, parking areas and
landscaping and other similar facilities.
6. "LANDLORD WORK" shall mean the construction of the shell and core
of the Building, including the Common Areas. The Landlord Work is described on
Exhibit D attached hereto.
7. "NORMAL BUSINESS HOURS" for the Building shall mean 7:00 a.m. to
7:00 p.m. Mondays through Fridays, and 7:00 a.m. to 2:00 p.m. on Saturdays,
exclusive of Holidays.
8. "PRIME RATE" shall mean the prime rate reported in the Money Rates
column or section of the Wall Street Journal or any successor thereof from time
to time.
9. "PROPERTY" shall mean the Buildings and the Parcel(s) of land on
which they are located, all other property in the Campus and, at Landlord's
discretion, the garages serving the Buildings, and all other improvements owned
by Landlord and serving the Buildings and the tenants thereof and the parcel(s)
of land on which they are located. The legal description for the Property is set
forth on Exhibit A-1, attached hereto and incorporated herein by this reference.
10. "INITIAL TENANT IMPROVEMENTS" shall mean the tenant improvements
to be constructed in the Initial Premises pursuant to Tenant's plans and
specifications, as approved by Landlord pursuant to the terms of Exhibit D
attached hereto, and "Tenant Improvements" shall include the Initial Tenant
Improvements.
ARTICLE 2: LEASE GRANT.
Subject to and upon the terms herein set forth, Landlord leases to Tenant
and Tenant leases from Landlord the Premises, together with the right, in common
with others, to use the Common Areas.
ARTICLE 3: ADJUSTMENT OF COMMENCEMENT DATE/POSSESSION.
A. Commencement Date: Landlord and Tenant shall use their best efforts to
complete the Building and the Initial Tenant Improvements in accordance with
Exhibit D hereto on the Target Commencement Date or as soon thereafter as
practicable.
The determination of the Commencement Date with respect to the Initial
Premises shall depend on which contractor is selected to construct the Initial
Tenant Improvements. If Tenant selects the contractor engaged by Landlord to
construct the shell and core of the Building (the "SHELL AND CORE CONTRACTOR"),
Landlord shall use its commercially reasonable best efforts to cause the
Commencement Date to occur by August 15, 1999. If the Initial Tenant Improvement
work is bid, and if the Shell and Core Contractor's bid is the lowest received
by Tenant for the
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construction of the Tenant Improvements, or is within two percent (2%) of the
lowest bid received, and Tenant chooses a contractor other than the Shell and
Core Contractor, the Commencement Date shall be deemed to occur on the date that
it otherwise would have occurred (as determined by the following paragraph) had
the Shell and Core Contractor been chosen to construct the Initial Tenant
Improvements (as reasonably determined based on the Shell and Core Contractor's
proposed schedule included in its tenant work bid but taking into consideration
Force Majeure events that are not the result of Tenant's selection of a
contractor other than the Shell and Core Contractor (e.g. no adjustment shall be
made for material shortages or labor disputes that would not have applied to the
Shell and Core Contractor.) If the Shell and Core Contractor is not the lowest
bidder or within two percent (2%) of the lowest bidder, and Tenant chooses such
lowest bidder, the Commencement Date shall be deemed to occur on the earlier of
(i) the date three (3) weeks after the date that it otherwise would have
occurred had the Shell and Core Contractor been chosen to construct the Initial
Tenant Improvements (as reasonably determined based on the Shell and Core
Contractor's proposed schedule included in its tenant work bid but taking into
consideration Force Majeure events that are not the result of Tenant's selection
of a contractor other than the Shell and Core Contractor (e.g. no adjustment
shall be made for material shortages or labor disputes that would not have
applied to the Shell and Core Contractor), or (ii) the date the Commencement
Date would otherwise occur pursuant to the following paragraph. All of the
foregoing dates are subject to the delay provisions contained in Section 38(D)
below. The contractor so selected to construct the Tenant Improvements shall be
hereinafter referred to as the "TENANT IMPROVEMENTS CONTRACTOR." The
Commencement Date with respect to the Initial Premises shall be deemed to occur
on (A) the later of (I) the completion date specified in the notice ("30 Day
Notice") delivered to Tenant at least thirty (30) days prior to the date that
the Initial Premises will be completed for occupancy or (II) the date the
entirety of the Initial Premises is in fact delivered to Tenant with all of
Landlord's Work and the Initial Tenant Improvements substantially completed, or
(B) such earlier date as Landlord would have been able to so deliver the entire
Premises to Tenant but for Tenant Delay (defined below). Subject to Tenant Delay
or other causes beyond Landlord's control, Landlord shall use its best efforts
to deliver the Premises to Tenant no later than the completion date specified in
the 30 Day Notice. Notwithstanding the foregoing, (i) if the Initial Premises
have been delivered to Tenant with all of Landlord's Work and the Initial Tenant
Improvements substantially completed, the Commencement Date shall be deemed to
have occurred with respect to the Initial Premises on the date Tenant first
occupies any portion of the Initial Premises for normal business operations, if
such date is earlier than the dates described above; and (ii) if all of
Landlord's Work and the Initial Tenant Improvements have not been completed in
the Initial Premises, but Tenant occupies all or some portion of the Initial
Premises for normal business operations, Rent and Additional Rent shall be
payable only on the space so occupied by Tenant until the Commencement Date. Any
such occupancy of the Premises prior to the Commencement Date shall be subject
to all of the other terms and conditions of this Lease except that the Initial
Lease Term shall not commence until the Commencement Date.
As used herein, the term "TENANT DELAY" shall mean any delay
experienced by Landlord in its work on the Building or the Tenant Improvements
resulting from: (a) any interference or delay caused by occurrences within the
reasonable control of Tenant; (b) any delay caused by Tenant's failure or
refusal to furnish plans, or approve or disapprove plans for the Tenant
Improvements, within the periods set out in Exhibit D; (c) any delay
attributable to changes in or additions to Landlord's plans requested by Tenant
or Tenant's selection of non-Building Standard Tenant Improvements; (d) any
other delay in acts of Tenant required under
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Exhibit D; or (e) any delay attributable to Tenant's selection as the Tenant
Improvement Contractor of a party other than the Shell and Core Contractor, as
described in this Section 3(A); provided that the foregoing clauses (a) through
(c) shall apply only to the extent that such delay impedes or otherwise
adversely affects Landlord's Work or the schedule for preparing the Premises for
occupancy. Landlord shall notify Tenant as soon as reasonably possible when
Landlord becomes aware of an event which constitutes or may constitute a Tenant
Delay.
The occurrence of the Commencement Date prior to the completion in
full of all work required to be performed by Landlord as provided herein shall
not relieve Landlord of its obligation thereafter to complete the same with due
dispatch and in a workmanlike manner. Without waiving any rights of Tenant,
Landlord, Tenant, and Landlord's and Tenant's architects shall prepare within
thirty (30) days after the Commencement Date or as soon thereafter as
practicable a "punch-list" which shall consist of the items that have not been,
but should have been, finished or furnished by Landlord in the Premises or in
connection with Landlord's Work, or which have not been completed in accordance
with the plans and specifications, or in a ▇▇▇▇▇▇▇ like manner, with respect to
the Landlord's Work or Initial Tenant Improvements. Upon presentation of such
punch-list to Landlord, Landlord shall, with all due diligence, proceed to
complete and furnish all punch-list items. If such items relate to Landlord's
Work, they shall be completed at Landlord's sole cost and expense. If such items
relate to the Initial Tenant Improvements, they shall be paid in the same manner
that the costs of the Initial Tenant Improvements are paid. With respect to such
items that relate to the Initial Tenant Improvements, if within thirty (30) days
after presentation of the punch-list, Landlord shall not have commenced, and be
proceeding with due diligence, to complete and furnish such items, or if
Landlord thereafter fails to prosecute its work on such items to completion with
due diligence, Tenant may deliver written notice of such failure to Landlord,
and if Landlord does not commence and proceed with due diligence to complete
such items within ten (10) days after Landlord's receipt of such notice, Tenant
may complete such items and, to the extent Landlord is responsible for such
costs as set forth above, Landlord will reimburse Tenant upon demand for the
reasonable costs incurred by Tenant for such work. If such costs are properly
chargeable to Landlord and are not paid within ten (10) days after written
demand, such costs shall be credited to and deducted from Tenant's next monthly
installments of Rent and Additional Rent payable hereunder as an offset against
such amounts owing by Tenant. Any such punch-list items which do not materially
interfere with Tenant's enjoyment of the portion of the Premises involved shall
not delay the Commencement Date with respect thereto.
Landlord shall promptly correct all defects in Landlord's Work and
Tenant Improvement work performed by the Tenant Improvement Contractor, and all
failures of such work to conform to the plans and specifications for such work
which have been agreed upon by Landlord and Tenant, which defects or
non-conformities are discovered before or within one year after the Commencement
Date or, with respect to latent defects or defects not discoverable as a result
of a visual review of the Premises, within three (3) years after the
Commencement Date. Landlord shall bear all costs of correcting Landlord's Work
and, to the extent caused by the act or omission of Landlord, Tenant Improvement
work performed by the Tenant Improvement Contractor. Landlord and Tenant shall
each give the other prompt written notice after discovering the existence of any
such defects or non-conformities in Landlord's work and Tenant Improvement work
performed by the Tenant Improvement Contractor.
B. Installation Period. Tenant shall have the right to enter the Premises
at no cost for up to thirty (30) days prior to the Commencement Date for
purposes of installing
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furniture, fixtures, cabling, wiring and equipment (the "INSTALLATION PERIOD"),
provided that the Installation Period shall not delay the Commencement Date.
Tenant shall coordinate its work with the Shell and Core Contractor and the
Tenant Improvements Contractor and shall not interfere with any such contractors
or their subcontractors. Tenant's occupancy of the Premises during the
Installation Period shall be subject to all of the terms and conditions of this
Lease, except Tenant shall not be charged Rent during the Installation Period
unless Tenant has occupied any portion of the Premises during such period for
normal business operations, in which event, Rent shall commence as set forth in
Section 3(A) above.
C. Confirmation of Commencement Date: The Commencement Date shall be
confirmed in writing using the form contained in Exhibit C.
D. Failure of Commencement Date: If the Commencement Date has not
occurred on or before December 1, 1999, as extended for Force Majeure and Tenant
Delay (provided any such extension for Force Majeure shall not exceed sixty (60)
days in the aggregate), Tenant shall have the option, to be exercised in
Tenant's sole discretion, upon thirty (30) days' prior written notice to
Landlord, to terminate this Lease and all obligations of Tenant hereunder
(unless the Commencement Date occurs within such 30-day period), or to ▇▇▇ to
specifically enforce this Lease, as Tenant's sole remedies as a result of such
delay.
ARTICLE 4: INTENTIONALLY DELETED
ARTICLE 5: PREMISES
A. Initial Premises. The Initial Premises are depicted on Exhibit A
attached hereto and contain approximately ninety-four thousand one hundred
eighty-two (94,182) rentable square feet of area. The precise square footage of
the Initial Premises shall be determined based upon Tenant's Final Plans, and
once so determined shall not be further adjusted except to reflect additions to
or other modifications of the Premises.
B. Expansion Option. Landlord hereby grants Tenant one (1) option to expand
(the "Expansion Option") in accordance with the provisions of this Section 5(B),
provided:
1. Tenant is not in default under this Lease beyond any applicable
cure periods at the time Landlord receives the Expansion Notice; and
2. no part of the Premises aggregating to fifty percent (50%) or more
of the Rentable Area of the Premises is sublet (other than pursuant to a
Corporate Transfer, as defined in Section 16(E) below) at the time Landlord
receives the Expansion Notice (for purposes of this Subsection 2, the Rentable
Area of the Premises shall include any area that Tenant elects to lease pursuant
to the Expansion Notice described below); and
3. this Lease has not been assigned (other than pursuant to a
Corporate Transfer) prior to the time Landlord receives the Expansion Notice.
Landlord agrees to take the second floor of the Building off the market until
March 31, 1999 and Tenant has the option to lease such floor (the entire floor
or portion thereof) until such date. To exercise the Expansion Option, Tenant
shall provide to Landlord written notice on or before March 31, 1999 (the
"Expansion Notice"), that Tenant is exercising the Expansion Option, at
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which time Tenant shall designate the approximate number of rentable square feet
Tenant desires to occupy on the second floor. In the event Tenant leases any
portion of the second floor, the rental rate shall be the same Base Rental rate
applicable to the Initial Premises, the lease term shall be co-terminus and the
tenant improvement Allowance shall be the same as initially provided for the
Initial Premises. In addition, the Security Deposit as defined in Section 9 will
increase proportionately based on the amount of additional area leased. If
Tenant leases less than the full floor pursuant to this provision, Landlord
reserves the right to determine the location of the partial floor leased,
subject to Tenant's reasonable approval. Upon exercise of the Expansion Option
by Tenant, Landlord and Tenant shall enter into an amendment to this Lease which
reflects the additional space to be leased by Tenant, and which shall set forth
the respective dates, in accordance with Exhibit D, by which the various items
to be completed by Landlord and Tenant are to be so completed (the number of
days shall be the same approximate number of days as exist with respect to the
Initial Premises). The additional Security Deposit payment shall be paid pro
rata at the same time as payments are due in accordance with Article 9; provided
that the "execution of this Lease" shall refer to execution of the amendment to
the Lease with respect to the Expansion Option, and the "Commencement Date"
shall refer to the Commencement Date of the Lease with respect to the expansion
space. For purposes of the Lease, the Commencement Date with respect to the
expansion space shall be determined solely with reference to the expansion space
and shall occur on the earlier of Tenant's occupancy of any portion of such
expansion space for normal business purposes or October 15, 1999, but in no
event earlier than the Commencement Date for the Initial Premises.
C. Option to Expand. Landlord hereby grants Tenant the option to
extend the Lease Term for four (4) periods of five (5) years each, upon all of
the terms and conditions contained in this Lease, except for Base Rental,
provided:
1. Tenant is not in default under this Lease beyond any
applicable cure periods at the time that Tenant delivers any Extension Notice or
at the time Tenant delivers any Binding Notice; and
2. No part of the Premises aggregating to thirty-three percent
(33%) or more of the Rentable Area of the Premises is sublet (other than
pursuant to a Corporate Transfer) at the time that Tenant delivers any Extension
Notice or at the time Tenant delivers any Binding Notice; and
3. The Lease has not been assigned (other than pursuant to a
Corporate Transfer) prior to the date that Tenant delivers any Extension Notice
or prior to the date Tenant delivers any Binding Notice.
The Base Rental shall be one hundred percent (100%) of the projected net fair
market rental rate on the effective date of such renewal for comparable term
extensions for comparable space in comparable first class buildings in the
Eastside area, excluding the Bellevue central business district (the "FAIR
MARKET RENEWAL RATE"), provided that in no event shall the Fair Market Renewal
Rate be less than the then current Base Rental being paid by Tenant. If Tenant
wishes to exercise this extension option, Tenant shall provide written notice of
its intent to extend (an "Extension Notice") at least twelve (12) months, but
not more than fifteen (15) months, prior to the expiration of the then current
Lease Term. Within thirty (30) days after receipt of the Extension Notice,
Landlord shall inform Tenant of the proposed Fair Market Renewal Rate. If
Landlord and Tenant cannot agree on a Base Rental within sixty (60) days after
Tenant's receipt
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of Landlord's notice, then Tenant may either (i) elect not to so extend the
Lease Term; or (ii) irrevocably elect to extend the Lease Term with the market
rent to be determined in accordance with the following binding arbitration
provisions (a "Binding Notice"). The Fair Market Renewal Rate will include the
following if offered in comparable buildings to a renewing tenant: rental
concession, refurbishment allowance, tenant improvement allowance, any other
incentives, and any brokerage commission. The Fair Market Renewal Rate will also
reflect the refurbishment allowance granted by Landlord to Tenant pursuant to
Section 6(E) below.
(a) Within fifteen (15) business days after Tenant's irrevocable
election to extend the Lease term, Landlord and Tenant shall each identify an
impartial person to act as a valuation expert and notify the other thereof. The
expert specified in each such notice must be a commercial real estate
professional having not less than ten (10) years' active experience as a real
estate professional in the downtown and suburban office leasing market in
Bellevue, Washington, but who may not be a real estate broker or sales person.
If either party falls to appoint an expert within such fifteen (15) business day
period, then the determination of the expert first appointed shall be final,
conclusive and binding on both parties.
(b) The named experts shall together determine the Fair Market
Renewal Rate. If the experts fail to agree on the Fair Market Renewal Rate
within thirty (30) days of their appointment and the difference in their
conclusions about Fair Market Renewal Rate is ten percent (10%) or less of the
lower of the two determinations, Fair Market Renewal Rate shall be the average
of the two determinations.
(c) If the two experts fail to agree on Fair Market Renewal Rate
and the difference between the two determinations exceeds ten percent (10%) of
the lower of the two determinations, then the experts shall, within tell (10)
business days after the expiration of the 30-day period described in
subparagraph (2) above, appoint a third expert, similarly impartial and
qualified, to determine the Fair Market Renewal Rate. Such third expert shall
determine the Fair Market Renewal Rate within thirty (30) days of his or her
appointment, and the average of the determinations of the two closest experts is
final, conclusive and binding on Landlord and Tenant. Landlord and Tenant shall
each execute and deliver an agreement confirming annual Base Rental for the
extended term.
(d) Landlord and Tenant shall each pay the fees of any expert
appointed by Landlord and Tenant, respectively, and Landlord and Tenant shall
each pay one-half (1/2) of the fees of the third expert, if any.
D. Right of First Offer and Other Rights.
(1) Landlord hereby grants Tenant a continuing right of first
offer in accordance with the provisions of this Section 5(D)(1), provided
Tenant shall have no rights under this Section 5(D)(1) and shall not be entitled
to a Landlord's Notice if:
(a) Tenant is in default under this Lease beyond any
applicable cure periods at the time Landlord would
otherwise deliver the Landlord's Notice; or
(b) the Premises, or any portion thereof aggregating at the
time Landlord would otherwise deliver Landlord's
Notice, either to
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(i) fifty percent (50%) or more of the Rentable Area of
the Premises if Landlord's Notice would be delivered
during the first five (5) years of the Initial Term, or
to (ii) thirty-three percent (33%) or more of the
Rentable Area of the Premises if Landlord's Notice
would be delivered after the first five (5) years of
the Initial Term, is sublet (other than pursuant to a
Corporate Transfer). For purposes of this Subsection
(b), the Rentable Area of the Premises shall include
any rentable area which is the subject of the
Landlord's Notice; or
(c) the Lease has been assigned (other than pursuant to a
Corporate Transfer) prior to the date Landlord would
otherwise deliver the Landlord's Notice; or
(d) the Tenant is not occupying any portion of the Premises
on the date Landlord would otherwise deliver the
Landlord's Notice.
In addition to and subject to Tenant's rights pursuant to Section 5(B), Tenant
shall have a right of first offer on the second (2nd) floor of the Building,
which is currently available or which becomes available during the Lease Term.
In the event Landlord is prepared to issue or issues a proposal to a third party
for space on the second (2nd) floor of the Building, Landlord shall deliver a
notice ("Landlord's Notice") to Tenant identifying such third party and the
space subject to such proposal. Tenant shall have five (5) business days after
receipt of Landlord's Notice to elect to lease such space upon the terms and
conditions offered or to irrevocably commit to lease such space at the Fair
Market Rental Rate. As used herein, the "FAIR MARKET RENTAL RATE" shall mean one
hundred percent (100%) of the projected net fair market rental rate on the date
such space will first be leased by Tenant for comparable space in comparable
first class buildings in the Eastside area, excluding the Bellevue central
business district, provided that in no event shall the Fair Market Rental Rate
be less than the then current Base Rental being paid by Tenant on the remainder
of the Premises. The Fair Market Rental Rate will include the following if
offered in such comparable buildings: rental concessions, refurbishment
allowances, tenant improvement allowances, any other incentives, and any
brokerage commissions. If Landlord and Tenant are unable to agree on the Fair
Market Rental Rate within fifteen (15) business days after Tenant's receipt of
Landlord's Notice, the Fair Market Rental Rate shall be determined in the same
manner that the Fair Market Renewal Rate is determined pursuant to Section 5(C)
above. If Tenant elects not to lease such space, or if Tenant fails to respond
within such five (5) business day period, Landlord shall be free to lease such
space to the party specified in Landlord's Notice on such terms as Landlord may
desire; provided that if negotiations with the third party identified in
Landlord's Notice terminate, or if Landlord does not lease such space to such
third party within six (6) months following the date of Landlord's notice to
Tenant, the provisions of this Section 5(D)(1) shall again apply and Landlord
shall not lease such space until Landlord has provided to Tenant the right of
first offer as provided in this Section 5(D)(1).
(2) In addition to the right of first offer granted to Tenant pursuant
to Section 5D (1) above, Tenant shall have an additional a right of offer in
accordance with the
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provisions of this Section 5(D)(2), provided Tenant shall have no rights under
this Section 5(D)(2) and shall not be entitled to a Landlord's Notice if:
(a) Tenant is in default under this Lease beyond any
applicable cure periods at the time Landlord would
otherwise deliver the Landlord's Notice; or
(b) the Premises, or any portion thereof aggregating at the
time Landlord would otherwise deliver Landlord's
Notice, either to (i) fifty percent (50%) or more of
the Rentable Area of the Premises if Landlord's Notice
would be delivered during the first five (5) years of
the Initial Term, or to (ii) thirty-three percent (33%)
or more of the Rentable Area of the Premises if
Landlord's Notice would be delivered after the first
five (5) years of the Initial Term, is sublet (other
than pursuant to a Corporate Transfer). For purposes of
this Subsection (b), the Rentable Area of the Premises
shall include any rentable area which is the subject of
the Landlord's Notice; or
(c) the Lease has been assigned (other than pursuant to a
Corporate Transfer) prior to the date Landlord would
otherwise deliver the Landlord's Notice; or
(d) the Tenant is not occupying any portion of the Premises
on the date Landlord would otherwise send the
Landlord's Notice.
The rights contained in this Section 5(D)(2) shall apply to the remainder of the
leasable space in the Building (the "Second Offer Space") and shall be subject
and subordinate to all currently existing rights of expansion, first offer,
first refusal and similar rights with respect to such space that are presently
existing or that are subsequently granted to tenants in the Property. Tenant
acknowledges that its rights hereunder may be subject and subordinate to the
rights of more than one other tenant. In the event Landlord is prepared to issue
or issues a proposal to a third party for all or any portion of the Second Offer
Space, and all prior rights granted to other tenants with respect to such space
have expired or otherwise terminated, Landlord shall deliver a notice
("Landlord's Notice") to Tenant identifying the space subject to such proposal.
Tenant shall have five (5) business days after receipt of Landlord's Notice to
elect to lease such space upon the terms and conditions offered, or upon other
terms and conditions agreed upon. If Tenant elects not to lease such space, or
if Tenant fails to respond within such five (5) business day period, Landlord
shall be free to lease such space to any other party on such terms as Landlord
may desire; provided that if negotiations with the third party identified in
Landlord's Notice terminate, or if Landlord does not lease such space to such
third party within six (6) months following the date of Landlord's notice to
Tenant, the provisions of this Section 5(D)(2) shall again apply and Landlord
shall not lease such space until Landlord has provided to Tenant the right of
first offer as provided in this Section 5(D)(2).
E. Termination Option. Tenant shall have the right to terminate all or
a portion of this Lease in accordance with the provisions of this Section 5(E),
provided:
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1. Tenant is not in default under this Lease beyond any
applicable cure periods at the time that Tenant delivers the termination Notice;
and
2. The Lease has not been assigned (other than pursuant to a
Corporate Transfer) prior to the date that Tenant delivers the Termination
Notice.
Tenant shall have the option to terminate the Lease or terminate a portion of
the Lease on a floor by floor basis effective at the end of the seventh (7th)
year of the Initial Lease Term by providing not less than twelve (12) months
prior written notice to Landlord ("Termination Notice"). If Tenant exercises
this option, Tenant shall pay a termination fee for that portion of the space
terminated equal to six (6) months Base Rental (at the Year 8 scheduled Base
Rental rate as defined in Article A.2. above) plus the unamortized principal
balance of the tenant improvement allowance ($30.15 per useable square foot of
the space terminated), and leasing commissions ($5.50 per rentable square foot
of the area terminated) provided by Landlord assuming a 12% per annum interest
rate. Such termination fee shall be payable fifty percent (50%) on the notice
date and fifty percent (50%) upon the effective date of termination. For the
purpose of computing the termination fee, the Tenant Improvement Allowance and
the leasing commission shall be deemed to be amortized by Landlord in equal
monthly installments over 120 months, commencing on the Commencement Date, with
interest at twelve percent (12%). By way of example, if the rentable square
footage is 94,000 square feet, and Landlord pays a broker's commission in
connection therewith in an amount equal to $5.50 per rentable square foot, or
$517,000, and if the useable square footage is 82,000 square feet and Landlord
pays a Tenant Improvement Allowance of $30.15 per usable square foot, or
$2,472,300, the total Tenant Improvement Allowance and real estate commissions
to be amortized would be $2,989,300. If Tenant terminated one floor of the Lease
(aggregating 31,333 rentable square feet and 27,333 useable square feet)
effective the end of the seventh (7th) lease year, the unamortized principal
balance of the Tenant Improvement Allowance and leasing commissions for three
floors would be $1,291,244. One third of that amount, applicable to the one of
three floors terminated, equals $430,415. In addition, six (6) months of Base
Rental using year eight (8) rents ($24.00 per rentable square foot), multiplied
by the number of rentable square feet on one floor (31,333) equals $375,996. The
total termination fee for one (1) floor is thus $806,411 ($430,415 + $375,996).
F. Parking. Landlord shall provide Tenant with no fewer than four (4)
unassigned parking spaces in the parking garage serving the Building for each
one thousand (1,000) usable square feet of leased space in the Premises, as set
forth in Section 1(A)(7) above. The number of spaces provided to Tenant
hereunder shall proportionally change as the area of the Premises changes.
Tenant may change the number of spaces Tenant wishes to use from time to time,
subject to the above maximum, provided Tenant gives Landlord at least thirty
(30) days prior notice of such change and the changes are effective on the first
day of a calendar month. The rate for monthly parking for each such space during
the first thirty-six (36) months of the term shall be Forty-Five Dollars
($45.00) per month per space plus Washington State sales tax. The parking rate
shall be adjusted every thirty-six (36) months to the comparable rates for
office buildings on the I-90 corridor, but not less than $45.00 per stall plus
applicable sales tax. A designated limited number of executive parking spaces
will be located directly below the Building on the top garage level. The exact
size of this area will depend upon how many parkers desire this service. The
cost for stalls for these executive parking spaces will initially be Sixty-Five
Dollars ($65.00) per month per stall plus Washington State sales tax. Landlord
shall monitor the access to and parking in the parking garage to ensure that
Tenant has reasonable
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access to the number of parking spaces desired by Tenant from time to time.
Landlord shall make available to Tenant not less than four (4) executive parking
spaces within the above permitted number of spaces. No reserved stalls will be
available.
ARTICLE 6: TENANT IMPROVEMENTS
A. Tenant Improvements for the Initial Premises ("INITIAL TENANT
IMPROVEMENTS") shall be constructed pursuant to Tenant's plans for the Premises
approved by Landlord to the extent and in the manner set forth in Exhibit D.
Landlord shall enter into the contract with the Initial Tenant Improvements
contractor, who shall be selected in accordance with the provisions of Exhibit
D. Tenant is aware that its selection of an Initial Tenant Improvements
contractor other than the Shell and Core Contractor may result in delays in
completion of the Initial Tenant Improvements.
B. Landlord shall provide Tenant with an allowance (the "ALLOWANCE") of
Thirty and 15/100 Dollars ($30.15) per square foot of usable area in the Initial
Premises (i.e. $30.00 per usable square foot for tenant improvements and $0.15
per usable square foot for the space planning allowance). The Allowance may be
applied to costs of designing and constructing the tenant Improvements, Tenant's
signage costs and the acquisition and installation of Tenant's furniture,
fixtures and equipment. The Landlord shall contract with the contractor chosen
by Tenant to construct the Tenant Improvement (the terms and conditions of which
contract shall be subject to Tenant's prior written approval, acting reasonably)
and shall pay all payments owed to such contractor when and as due; provided
that at such time as Landlord has paid the total sum of the Allowance to such
contractor, or to others at the direction of Tenant, Tenant shall thereafter be
responsible to pay the balance owed to the contractor, which balance shall be
paid by Tenant to Landlord, for payment to the contractor, on or before the same
day that payments are owed by Landlord to such contractor in connection with the
construction of the Tenant Improvements. Any unused portion of the Allowance may
be taken as a credit against Rent or may be applied to additional build-out,
wiring or cabling costs, as Tenant may elect. Any costs of constructing Tenant
Improvements in excess of the Allowance shall be borne solely by Tenant.
C. Landlord and Tenant mutually agree on the selection of JPC, Incorporated
as Tenant's architect to plan, design, and complete construction documents for
the Initial Tenant Improvements. The cost for such services as well as
engineering costs attributable to the same shall be charged against the
Allowance; provided that the contract with JPC, Incorporated, as well as with
any engineer, the costs of which will be charged against the Allowance, shall be
subject to the prior written approval of Tenant, acting reasonably.
D. All disputes, controversies and claims arising out of or relating to the
construction of the Tenant Improvements in the Initial Premises shall be settled
by expedited mandatory arbitration as set forth in this Section 6(D). All
statutes of limitations which would otherwise be applicable and any limitations
upon claims set forth in this Agreement shall apply to any arbitration
proceeding under this Section 6(D).
1. Notice of Demand. Either party may demand arbitration by notifying
the other party in writing in accordance with the notice provisions of Section
6(D). The notice shall describe the reasons for such demand, the amount
involved, if any, and the particular remedy sought. The notice shall also list
the name of one arbitrator qualified in accordance with subsection 3.
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2. Response. The party that has not demanded arbitration shall respond
to the notice of demand within five (5) business days of receipt of such notice
by delivering a written response in accordance with the notice provisions of
Section 34. The response shall list the name of a second arbitrator qualified in
accordance with Subsection 3. The response shall also describe counterclaims, if
any, the amount involved, and the particular remedy sought. If a party falls to
respond timely to the notice of demand, the arbitrator selected by the party
making such demand under Subsection 1 shall resolve the dispute, controversy or
claim within seven (7) business days of the deadline for response.
3. Qualified Arbitrator. Any arbitrator selected in accordance with
Subsections 1 and 2 shall be any natural person not currently or previously
employed by, nor having or had, directly or indirectly, any contractual
relationship with either of the parties or any parent or affiliated partnership,
corporation or other enterprise thereof, who shall also be a construction
professional with at least ten (10) years experience in the downtown Seattle or
Bellevue or the outlying Bellevue real estate markets.
4. Appointment of Third Arbitrator. If a party responds timely to a
notice of demand for expedited arbitration under Subsection 2 the two
arbitrators shall appoint a third arbitrator who shall be qualified in
accordance with subsection 3. Such third arbitrator shall be appointed within
seven (7) business days of receipt by the party demanding arbitration of notice
of response provided for under Subsection 3. If the two arbitrators fail to
timely appoint a third arbitrator, the third arbitrator shall be appointed by
the parties if they can agree within a period of five (5) business days. If the
parties cannot timely agree, then either party may request the appointment of
such third arbitrator by the Presiding Judge of the Superior Court of King
County, Washington; provided that the other party shall not raise any question
as to the court's full power and jurisdiction to entertain such application and
to make such appointment.
5. Arbitration Hearing; Discovery; Venue. The arbitration hearing
shall commence within five (5) business days of appointment of the third
arbitrator as described in Subsection 4. The hearing shall in no event last
longer than two (2) business days. There shall be no discovery or dispositive
motion practice (such as motions for summary judgment or to dismiss or the like)
except as may be permitted by the arbitrators; and any such discovery or
dispositive motion practice permitted by the arbitrators shall not in any way
conflict with the time limits contained herein. The arbitrators shall not be
bound by any rules of civil procedure or evidence, but rather shall consider
such writings and oral presentations as reasonable business persons would use in
the conduct of their day to day affairs, and may require the parties to submit
some or all of their case by written declaration or such other manner of
presentation as the arbitrators may determine to be appropriate. It is the
intention of the parties to limit live testimony and cross examination to the
extent absolutely necessary to insure a fair hearing to the parties on
significant and material issues. Venue of any arbitration hearing conduct
pursuant to this agreement shall be in Seattle, Washington. It is also the
intention of the parties that any such arbitration shall not interfere with the
continued construction of the Tenant Improvements, and unless the dispute in
question makes it impossible for such construction to continue, the pending
arbitration shall not affect such construction schedule.
6. Decision. The arbitrators' decision shall be made in no event later
than seven (7) business days of the commencement of the arbitration hearing
described in Subsection 5. If only two (2) arbitrators are appointed, the
decision shall require unanimous approval of both arbitrators. If three (3)
arbitrators are appointed, a majority decision shall
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prevail. The award shall be final and judgment may be entered in any court
having jurisdiction thereof. The arbitrators may award specific performance of
this Agreement. The arbitrators may also require remedial measures as part of
any award. The arbitrators may award attorneys' fees and costs to the more
prevailing party.
E. Refurbishment Allowance. At the end of the initial sixty (60) months of
the Initial Lease Term, Landlord will repaint, using Building Standard quality
paint the initial Premises and the expansion space, if any, acquired by Tenant
pursuant to the Expansion Option. Further, on the commencement date of each five
year renewal, Landlord will provide a market comparable refurbishment allowance
for a renewing tenant, such allowance to be not less than the cost of replacing
Building Standard quality carpet and repainting the Premises.
ARTICLE 7: RENT.
A. Tenant shall pay to Landlord, throughout the Lease Term, the Base
Rental, in equal monthly installments on the first day of each calendar month,
without demand, notice or offset. In addition, during each calendar year, or
portion thereof, falling within the Lease Term, Tenant shall pay to Landlord as
Additional Base Rental hereunder Tenant's Pro Rata Share of Basic Costs (as
defined below) for the applicable calendar year. Prior to the Commencement Date
and prior to January 1 of each calendar year during the Lease Term, or as soon
thereafter as practical, Landlord shall make a good faith estimate of Basic
Costs for the applicable calendar year and Tenant's Pro Rata Share thereof. On
or before the first day of each month during such calendar year, Tenant shall
pay to Landlord, as Additional Base Rental, a monthly installment equal to
one-twelfth of Tenant's Pro Rata Share of Landlord's estimate of Basic Costs.
Landlord shall have the right from time to time during any such calendar year,
if it reasonably believes the costs will vary by more than five percent (5%), to
revise the estimate of Basic Costs for such year and provide Tenant with a
revised statement therefor, and thereafter the amount Tenant shall pay each
month shall be based upon such revised estimate. If Landlord does not provide
Tenant with an estimate of the Basic Costs by January 1 of any calendar year,
Tenant shall continue to pay a monthly installment based on the previous year's
estimate until such time as Landlord provides Tenant with an estimate of Basic
Costs for the current year. Upon receipt of such current year's estimate, an
adjustment shall be made for any month during the current year with respect to
which Tenant paid monthly installments of Additional Base Rental based on the
previous year's estimate. Tenant shall pay to Landlord for any underpayment
within ten (10) days after demand. Any overpayment shall, at Landlord's option,
be refunded to Tenant or credited against the next due installment or
installments of Base Rental due for the months immediately following the
furnishing of such estimate. Any amounts paid by Tenant based on any estimate
shall be subject to adjustment pursuant to tile immediately following paragraph
when actual Basic Costs are determined for such calendar year.
As soon as is practical following the end of each calendar year during
the Lease Term, Landlord shall furnish to Tenant a statement of Landlord's
actual Basic Costs for the previous calendar year. If the amount of estimated
Basic Costs actually paid by Tenant for the prior year is in excess of Tenant's
actual Pro Rata Share of Basic Costs for such prior year, then Landlord shall
apply such overpayment against Base Rental next due or to become due hereunder,
provided if the Lease Term expires prior to the determination of such
overpayment, Landlord shall within ten (10) days following such termination,
refund such overpayment to Tenant after first deducting the amount of any Rent
due hereunder. Likewise, Tenant shall pay to Landlord, within ten (10) days
after demand, any underpayment with respect to the prior year,
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whether or not the Lease has terminated prior to receipt by Tenant of a
statement for such underpayment. This clause shall survive the expiration of the
Lease.
B. "BASIC COSTS" shall mean all reasonable and customary costs and expenses
paid or incurred in each calendar year in connection with operating,
maintaining, repairing and managing the Building and the Property, including but
not limited to the following (but only to the extent such costs and expenses are
commercially reasonable in amount and of a type customarily passed through to
tenants in buildings comparable to the Building):
1. All labor costs for all persons at or below the grade of Building
manager performing services required or utilized in connection with the
operation, repair, replacement and maintenance of and control of access to the
Building and the Property, including but not limited to amounts incurred for
wages, salaries and other compensation for services, payroll, social security,
unemployment and other similar taxes, workers' compensation insurance, uniforms,
training, disability benefits, pensions, hospitalization, retirement plans,
group insurance premiums or any other similar or like expenses or benefits. The
building manager shall be an on-site, full time employee dedicated solely to the
Property or, if such on-site manager has other building management
responsibilities, then the Property shall be charged only a pro-rata share of
the cost of such manager.
2. All management fees, the cost of equipping and maintaining a
management office at the Building (but excluding rent), accounting services,
legal fees (subject to the exclusions described below), and all other
administrative costs relating to the Building and the Property. If management
services are not provided by a third party, Landlord shall be entitled to a
management fee comparable to that due and payable to third parties provided
Landlord or management companies owned by, or management divisions of, Landlord
perform actual management services of a comparable nature and type as normally
would be performed by third parties.
3. All rental and/or purchase costs of materials, supplies, tools and
equipment used in the operation, repair, replacement and maintenance and the
control of access to the Building and the Property.
4. All amounts charged to Landlord by contractors and/or suppliers for
services, replacement parts, components, materials, equipment and supplies
furnished in connection with the operation, repair, maintenance, replacement of
and control of access to any part of the Building, or the Property generally,
including the heating, air conditioning, ventilating, plumbing, electrical,
elevator and other systems and equipment. Major repair items that would be
capitalized in accordance with generally accepted accounting principles shall be
amortized over the useful life of such items.
5. All premiums and deductibles paid by Landlord for fire and extended
coverage insurance, earthquake and extended coverage insurance, liability and
extended coverage insurance, rental loss insurance, elevator insurance, boiler
insurance and other insurance customarily carried from time to time by landlords
of comparable office buildings or required to be carried by Landlord's
Mortgagee.
6. Charges for water, gas, steam and sewer, but excluding those
charges for which Landlord is otherwise reimbursed by tenants, and charges for
Electrical Costs. For
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purposes hereof, the term "ELECTRICAL COSTS" shall mean: (i) all charges paid by
Landlord for electricity supplied to the Building, Property and Premises,
regardless of whether such charges are characterized as distribution charges,
transmission charges, generation charges, public good charges, disconnection
charges, competitive transaction charges, stranded cost recoveries or
otherwise; and (ii) except to the extent otherwise included in Basic Costs, any
costs incurred in connection with the energy management program for the
Building, Property and Premises, including any costs incurred for the
replacement of lights and ballasts and the purchase and installation of sensors
and other energy saving equipment. Notwithstanding the foregoing, Electrical
Costs shall be adjusted as follows: (a) any amounts received by Landlord as
reimbursement for above standard electrical consumption shall be deducted from
Electrical Costs, (b) the cost of electricity incurred in providing overtime
HVAC to specific tenants shall be deducted from Electrical Costs, and (c) if
Tenant is billed directly for the cost of electricity to the Premises as a
separate charge in addition to Base Rental and Basic Costs, the cost of
electricity to individual tenant spaces in the Building shall be deducted from
Electrical Costs.
7. "TAXES", which for purposes hereof, shall mean: (a) all real estate
taxes and assessments on the Property, the Building or the Premises, and taxes
and assessments levied in substitution or supplementation in whole or in part of
such taxes, (b) all personal property taxes for the Building's personal
property, including license expenses, (c) all taxes imposed on services of
Landlord's agents and employees, (d) all other taxes, fees or assessments now or
hereafter levied by any governmental authority on the Property, the Building or
its contents or on the operation and use thereof (except as relate to specific
tenants), and (e) all costs and fees incurred in connection with seeking
reductions in or refunds in Taxes including, without limitation, any costs
incurred by Landlord to challenge the tax valuation of the Building, but
excluding gross or net income or franchise taxes. For the purpose of determining
real estate taxes and assessments for any given calendar year, the amount to be
included in Taxes for such year shall be as follows: (1) with respect to any
special assessment that is payable in installments, Taxes for such year shall
include the amount of the installment (and any interest) due and payable during
such year; and (2) with respect to all other real estate taxes, Taxes for such
year shall include the amount due and payable for such year. If a reduction in
Taxes is obtained for any year of the Lease Term during which Tenant paid its
Pro Rata Share of Basic Costs, then Basic Costs for such year will be
retroactively adjusted and Landlord shall provide Tenant with a credit, if any,
based on such adjustment. If requested by Tenant, Landlord shall, in good faith
and acting reasonably, challenge the tax valuation of the Building and/or
Property.
8. All landscape expenses and costs of maintaining, repairing,
resurfacing, resealing and striping of the parking areas and garages of the
Property
9. Cost of all maintenance service agreements, including those for
equipment, alarm service, window cleaning, drapery or venetian blind cleaning,
janitorial services, pest control, uniform supply, plant maintenance,
landscaping, and any parking equipment.
10. Cost of all other repairs, replacements and general maintenance of
the Property and Building neither specified above nor directly billed to
tenants, and all similar common area costs of the Property allocable to the
Building.
11. The amortized cost of capital improvements made to the Building or
the Property after the Commencement Date which are: (a) primarily for the
purpose of reducing
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operating expense costs or otherwise improving the operating efficiency of the
Property or Building; or (b) required to comply with any laws, rules or
regulations of any governmental authority enacted after the Commencement Date
(unless such law must be complied with due solely to another tenant's use of the
Building or Property). The cost of such capital improvements shall be amortized
over a period of the useful life of such improvement and shall, at Landlord's
option, include interest at a rate that is reasonably equivalent to the interest
rate that Landlord would be required to pay to finance the cost of the capital
improvement in question as of the date such capital improvement is performed,
provided if the savings generated from any capital improvement are sufficient to
pay back the cost of such improvement over a period shorter than the useful life
of such improvement, Landlord may amortize the cost of such capital improvement
over the payback period.
12. Any other expense or charge of any nature whatsoever which, in
accordance with general industry practice with respect to the operation of a
comparable first-class office building, would be construed as an operating
expense.
Basic Costs shall not include (I) costs of any special services
rendered to individual tenants for which a separate charge is collected; (II)
leasing commissions and other leasing expenses; (III) the cost of capital
improvements (except as set forth above in subparagraph 11); (IV) executives'
salaries above the grade of Building manager; (V) costs reimbursed to Landlord
through proceeds of insurance to the extent the proceeds are compensation for
expenses which were previously included in Basic Costs hereunder; (VI) cost of
repair or replacements incurred by reason of fire or other casualty or by the
exercise of the right of eminent domain and deductible amounts paid by Landlord
under any insurance policy; (VII) consulting fees, marketing fees, advertising
and promotional expenditures; (VIII) legal fees in connection with the
negotiation and preparation of leases of space or legal fees in connection with
the sale of all or any portion of the Property or Building in which the Premises
are located, or an interest therein, or the financing or refinancing of
Landlord's interest in all or any portion of the Property or Building in which
the Premises are located, or in connection with disputes with tenants, and legal
and auditing fees, other than legal and auditing fees reasonably incurred in
connection with the maintenance and operation of all or any portion of such
Building or in connection with the preparation of the statements required
pursuant to additional rent or lease escalation provisions contained in leases
of space in such Building; (IX) depreciation or loan payments (both principal
and interest); (X) costs resulting from the correction of any patent or latent
construction defects in all or any portion of the Premises or Building; (XI)
penalties due to any violation of law by Landlord or other tenants; (XII) costs
of preparing tenant space for tenant occupancy; (XIII) costs allocable to
properties in which Landlord has an interest other than the Property; (XIV)
damages incurred by Landlord for any default, negligent or wrongful act, breach,
claim, judgment or settlement; and (XV) structural replacements (including
replacements to the roof and foundations). If the Building is not at least
ninety-five percent (95%) occupied during any calendar year of the Lease Term or
if Landlord is not supplying services to at least ninety-five percent (95%) of
the total Rentable Area of the Building at any time during any calendar year of
the Lease Term, actual Basic Costs for purposes hereof shall, at Landlord's
option, be determined as if the Building had been ninety-five percent (95%)
occupied and Landlord had been supplying services to ninety-five percent (95%)
of the Rentable Area of the Building during such year. Any necessary
extrapolation of Basic Costs under this Article shall be performed by adjusting
the cost of those components of Basic Costs that are impacted by changes in the
occupancy of the Building (including, at Landlord's option, Taxes) to the cost
that would have been incurred if the Building had been ninety-five percent (95%)
occupied and
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Landlord had been supplying services to ninety-five percent (95%) of the
Rentable Area of the Building. In no event shall Landlord be entitled to
collect more than the actual Basic Costs incurred.
C. Tenant, within three (3) years after receiving Landlord's statement of
actual Basic Costs for a particular calendar year (or up to five (5) years if
Tenant can demonstrate a reasonable basis to believe prior statements might be
incorrect), shall have the right to provide Landlord with written notice (the
"Review Notice") of its intent to review Landlord's books and records relating
to the Basic Costs for such calendar year. Within a reasonable time after
receipt of a timely Review Notice, Landlord shall make such books and records
available to Tenant or Tenant's agent for its review at either Landlord's home
office or at the office of the Building, provided that if Tenant retains an
agent to review Landlord's books and records for any calendar year, such agent
must be CPA firm licensed to do business in the state. in which the Building is
located. Tenant shall be solely responsible for any and all costs, expenses and
fees incurred by Tenant or Tenant's agent in connection with such review,
provided that if such review determines that Basic Costs were overstated by five
percent (5%) or more, Landlord shall pay the cost of such review. If Tenant
elects to review Landlord's books and records, within thirty (30) days after
such books and records are made available to Tenant, Tenant shall have the right
to give Landlord written notice stating in reasonable detail any objection to
Landlord's statement of actual Basic Costs for such calendar year. If Tenant
fails to give Landlord written notice of objection within such thirty (30) day
period or fails to provide Landlord with a Review Notice within the period
provided above, Tenant shall be deemed to have approved Landlord's statement of
Basic Costs in all respects and shall thereafter be barred from raising any
claims with respect thereto. Upon Landlord's receipt of a timely objection
notice from Tenant, Landlord and Tenant shall work together in good faith to
resolve the discrepancy between Landlord's statement and Tenant's review. If
Landlord and Tenant determine that Basic Costs for the calendar year in question
are less than reported, Landlord shall provide Tenant with a credit against
future Base Rental in the amount of any overpayment by Tenant. Likewise, if
Landlord and Tenant determine that Basic Costs for the calendar year in question
are greater than reported, Tenant shall forthwith pay to Landlord the amount of
underpayment by Tenant. Any information obtained by Tenant pursuant to the
provisions of this Section shall be treated as confidential. Notwithstanding
anything herein to the contrary, Tenant shall not be permitted to examine
Landlord's books arid records or to dispute any statement of Basic Costs unless
Tenant has paid to Landlord the amount due as shown on Landlord's statement of
actual Basic Costs, said payment being a condition precedent to Tenant's right
to examine Landlord's books and records.
D. Tenant covenants and agrees to pay to Landlord during the Lease Term,
without any setoff or deduction whatsoever except as otherwise set forth in this
Lease, the full amount of all Base Rental and Additional Base Rental due
hereunder. In addition, Tenant shall pay and be liable for, as additional rent,
all rental, sales and use taxes or other similar taxes, (other than gross or net
income taxes) if any, levied or imposed by any city, state, county or other
governmental body having authority, such payments to be in addition to all other
payments required to be paid to Landlord by Tenant under the terms and
conditions of this Lease. Any such payments shall be paid concurrently with the
payments of the Rent on which the tax is based. The Base Rental, Tenant's Pro
Rata Share of Basic Costs and any recurring monthly charges due hereunder shall
be due and payable in advance on the first day of each calendar month during the
Lease Term without demand, provided that the installment of Base Rental for the
first full calendar month of the Lease Term shall be payable two (2) days after
Landlord
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gives Tenant the 30-Day Notice described in Section 3(A) above. All other items
of Rent shall be due and payable by Tenant on or before ten (10) days after
billing by Landlord. If the Lease Term commences on a day other than the first
day of a calendar month, then the monthly Base Rental and Tenant's Pro Rata
Share of Basic Costs for such month shall be prorated for the number of days in
such month occurring within the Lease Term based on a fraction, the numerator of
which is the number of days of the Lease Term that fell within such calendar
month and the denominator of which is the number of days in such month. All such
payments shall be by a good and sufficient check in lawful money of the United
States. No payment by Tenant or receipt or acceptance by Landlord of a lesser
amount than the correct amount of Rent due under this Lease shall be deemed to
be other than a payment on account of the earliest Rent due hereunder, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment be deemed an accord and satisfaction, and Landlord may accept such
check or payment without prejudice to Landlord's right to recover the balance or
pursue any other available remedy. The acceptance by Landlord of any Rent on a
date after the due date of such payment shall not be construed to be a waiver of
Landlord's right to declare a default for any other late payment. Tenant's
covenant to pay Rent shall be independent of every other covenant set forth in.
this Lease.
E. All Rent not paid within five (5) days of the date it is due and payable
shall bear interest from the date due until paid at fourteen percent (14%) per
annum. In addition, if Tenant fails to pay any installment of Rent within five
(5) days after receipt of written notice that it is overdue and payable
hereunder, a service fee equal to four percent (4%) of such unpaid amount will
be due and payable immediately by Tenant to Landlord.
F. In lieu of requiring Tenant to pay Rent by good and sufficient check in
the manner described in Section 7(D) above, and subject to Tenant's approval
(which may be withheld in Tenant's sole discretion), Tenant shall pay Rent by
means of an automated debit system (the "Automatic Debit System") whereby any or
all payments of Rent shall be debited from Tenant's account in a bank or
financial institution designated by Tenant and credited to Landlord's account in
a bank or financial institution designated by Landlord. In the event Landlord
desires, and Tenant agrees, to have Tenant pay all or any portion of Rent by
means of the Automatic Debit System, Tenant, within thirty (30) days after
written request by Landlord, shall execute and deliver to Landlord any
authorizations, certificates or other documentation as may be required to
establish and give effect to the Automatic Debit System. If Landlord elects to
have less than all items of Rent paid by the Automatic Debit System, Landlord
shall advise Tenant in writing as to those items of Rent that will be paid by
the Automatic Debit System (e.g. Base Rental only or Base Rental and Tenant's
Pro Rata Share of Basic Costs only). Either party shall have the right to change
its bank or financial institution from time to time, provided that Tenant, no
less than thirty (30) days prior to the effective date of any such change, shall
provide Landlord with written notice of such change and any and all
authorizations, certificates or other documentation as may be required to
establish and give effect to the Automatic Debit System at Tenant's new bank or
financial institution. Tenant shall promptly pay all service fees and other
charges imposed upon Landlord or Tenant in connection with the Automatic Debit
System, including, without limitation, any charges resulting from insufficient
funds in Tenant's bank account. In the event that any Rent is not paid on time
as a result of insufficient funds in Tenant's account, Tenant shall be liable
for any interest and/or service fee in accordance with Section 7(E) above.
Tenant shall remain liable to Landlord for all payments of Rent due hereunder
regardless of whether Tenant's account is incorrectly debited in any given
month, it
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being agreed that a debit of less than the full amount of Rent due shall not be
construed as a waiver by Landlord of its right to receive any unpaid balance of
Rent.
ARTICLE 8: USE.
The Premises shall be used for the Permitted Use and for no other purpose.
Tenant agrees not to use or permit the use of the Premises for any purpose
which is, in Landlord's reasonable opinion, illegal, dangerous to life, limb or
property or which creates a nuisance or which would increase the cost of
insurance coverage with respect to the Building. Tenant shall conduct its
business and control its agents, servants, contractors, employees, customers,
licensees, and invitees in such a manner as not to interfere with, annoy or
disturb other tenants, or in any way interfere with Landlord in the management
and operation of the Building. Tenant will maintain the Premises in a clean and
healthful condition, and comply with all laws, ordinances, orders, rules and
regulations of any governmental entity with reference to the operation of
Tenant's business and to the use, condition, configuration or occupancy of the
Premises, including without limitation, the Americans with Disabilities Act
(collectively referred to as "Laws"). Landlord will maintain the Building,
Property and the Common Areas in a clean and healthful condition, and to a
condition consistent with a first class office building, and comply with all
laws, ordinances, orders, rules and regulations of any governmental entity with
reference to the use, condition, configuration or occupancy of the Building
(excluding areas leased to tenants), including without limitation, the Laws.
Tenant, within ten (10) days after receipt thereof, shall provide Landlord with
copies of any notices it receives with respect to a violation or alleged
violation of any Laws. Tenant will comply with the rules and regulations of the
Building attached hereto as Exhibit B and such other rules and regulations
relating to Building operations adopted and altered by Landlord from time to
time and will cause all of its agents, servants, contractors, employees,
customers, licensees and invitees to do so. All changes to such rules and
regulations shall be reasonable, shall not be inconsistent with the terms of
this Lease, and shall be sent by Landlord to Tenant in writing.
ARTICLE 9: SECURITY DEPOSIT.
A. Tenant shall deposit with Landlord the following amounts on the dates
set forth below to serve as a security deposit under this Lease (collectively
the "Security Deposit"):
1. One Hundred Thousand and no/100 Dollars ($100,000.00) upon
execution of this Lease by Tenant and Landlord;
2. An additional Two Hundred Thousand and no/100 Dollars ($200,000.00)
upon commencement of construction of Tenant's improvements in the Premises;
3. An additional Two Hundred Thousand and no/100 Dollars ($200,000.00)
on the Commencement Date.
4. An additional Two Hundred Fifty Thousand and no/100 Dollars
($250,000.00) shall be required if Tenant's Working Capital (as defined below)
is less than Two Million Five Hundred Thousand and no/100 Dollars
($2,500,000.00) as of the Commencement Date.
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5. If the Initial Premises is increased in size pursuant to the
Expansion Option defined in Section 5(B), then the amount of the Security
Deposit shall be proportionately increased.
B. As used herein, "Working Capital" means from time to time the amount
determined by subtracting the aggregate of all current liabilities from the
aggregate of all current assets of Tenant. For purposes of this definition,
deferred revenue shall not be considered a current liability.
C. All such deposits constituting the Security Deposit shall, at Tenant's
option, be made in the form of cash or in the form of a letter of credit issued
by a financial institution, and upon such terms, as may be reasonably approved
by Landlord. Any letter of credit delivered by Tenant shall have a minimum term
of one (1) year, and shall be renewed by Tenant on an annual basis for so long
as Tenant elects to deposit a letter of credit instead of cash hereunder. If
Landlord is not provided notice of such renewal at least fifteen (15) days
prior to the expiration date of the then current letter of credit, Landlord may
draw down the entire amount of the current letter of credit. Without limiting
the foregoing, the issuing bank must have assets of at least $100,000,000, and
such letter of credit must be irrevocable and subject to no conditions other
than Landlord's presentation thereof to the issuing bank with a demand for
payment that certifies that an Event of Default (as defined in this Lease) has
occurred under this Lease and that Landlord is entitled to draw on the letter of
credit in accordance with and pursuant to this Lease.
D. Once established, the Security Deposit and Additional Security Deposit,
if any, shall be reduced by twenty percent (20%) of its maximum amount on each
of the first through fifth anniversaries of the Commencement Date, provided that
on each such anniversary date Tenant has Working Capital of at least Two Million
Five Hundred Thousand and no/100 Dollars ($2,500,000). Such reduction shall be
cumulative, so that if a reduction is not made in one year but is made in the
Subsequent year, the reduction in the second year shall be forty percent (40%)
of the maximum amount of the Security Deposit. In no event shall a reduction in
the Security Deposit or the Additional Security Deposit, if any, be made if
Tenant is then in default hereunder or if there exists a state of circumstances
which with the giving of notice or passage of time or both would constitute a
default hereunder. Provided Tenant is not in default at the end of the seventh
(7th) year of the Lease Term, Tenant shall have no further obligation to make
the Security Deposit or Additional Security Deposit, if any, for the remainder
of the Lease Term, and Landlord shall return the Security Deposit and the
Additional Security Deposit, if any, to Tenant, regardless of the level of
Tenant's Working Capital at such date.
E. The Security Deposit shall not be considered an advance payment of Rent
or a measure of Tenant's liability for damages. Landlord may, from time to time,
without prejudice to any other remedy, use all or a portion of the Security
Deposit to make good any arrearage of Rent, to repair damages to the Premises,
to clean the Premises upon termination of this Lease or otherwise to satisfy any
other covenant or obligation of Tenant hereunder, but only to the extent that
Tenant is obligated to perform the act or make the payment for which the
Security Deposit is to be used by Landlord. Following any such application of
the Security Deposit, Tenant shall pay to Landlord on demand the amount so
applied in order to restore the Security Deposit to its original amount. If
Tenant is not in default at the termination of this Lease, after Tenant
surrenders the Premises to Landlord in accordance with this Lease and all
amounts due Landlord from Tenant are finally determined and paid by Tenant or
through application of the Security Deposit, the balance of the Security
Deposit remaining after any such application shall be
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returned to Tenant. If Landlord transfers its interest in the Premises during
the Lease Term, Landlord may assign the Security Deposit to the transferee and
thereafter shall have no further liability for the return of such Security
Deposit, so long as the transferee assumes this Lease, acknowledges receipt of
the Security Deposit and agrees to return the same to Tenant in accordance with
the provisions of this Lease. Tenant agrees to look solely to such transferee or
assignee for the return of the Security Deposit. Landlord and its successors and
assigns shall not be bound by any actual or attempted assignment or encumbrance
of the Security Deposit by Tenant, provided, however, if Tenant's interest in
this Lease has been assigned, Landlord shall, provided that Landlord has been
furnished with a fully executed copy of the agreement assigning such Security
Deposit, return the Security Deposit to such assignee in accordance with the
terms and conditions hereof. If Landlord returns the Security Deposit to
Tenant's assignee as aforesaid, Landlord will have no further obligation to any
party with respect thereto. Landlord shall not be required to keep the Security
Deposit separate from its other accounts. In no event shall the Security Deposit
serve as a limitation on the damages payable by Tenant as a result of its
default under this Lease.
ARTICLE 10: SERVICES TO BE FURNISHED BY LANDLORD.
A. Landlord, as part of Basic Costs (except as otherwise provided), agrees
to furnish Tenant the following services:
1. Hot and cold water for use in the lavatories on the floor(s) on
which the Premises is located. If Tenant desires water in the Premises for any
approved reason, including a private lavatory or kitchen, cold water shall be
supplied, at Tenant's sole cost and expense, from the Building water main
through a line and fixtures installed at Tenant's sole cost and expense with the
prior reasonable consent of Landlord. If Tenant desires hot water in the
Premises, Tenant, at its sole cost and expense and subject to the prior
reasonable consent of Landlord, may install a hot water heater in the Premises.
Tenant shall be solely responsible for maintenance and repair of any such hot
water heater.
2. Central heat, ventilating and air conditioning at such temperatures
and in such amounts as are standard for first-class office buildings of similar
class, size, age and location, or as required by governmental authority;
provided that such heat, ventilation and air conditioning shall in any event be
installed, maintained and operated to provide heating and cooling to the
standard set forth on Exhibit D-2 hereto. In the event that Tenant requires
central heat, ventilation or air conditioning at hours other than Normal
Business Hours, such central heat, ventilation or air conditioning shall be
furnished when and as desired by Tenant, unless fire services so required cannot
be activated by Tenant using the Building's automated system, but must be
activated by Landlord using the Building's central systems, in which event
Tenant must deliver a request for such services (which may be by telephone or in
person) to Landlord at the office of the Building prior to 3:00 p.m. of the same
day. Tenant shall pay Landlord, as Additional Base Rental, the actual direct
utility costs of additional service and a reasonable charge for the extra wear
and tear on Building equipment, without a profit to or overhead charge by
Landlord.
3. Maintenance and repair of all Common Areas in the manner and to the
extent standard for first-class office buildings of similar class, size, age and
location.
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4. Janitorial services, consistent with those provided to other first
class office buildings in Bellevue, Washington, Monday through Thursday and
Sunday nights; provided, however, if Tenant's use, floor covering or other
improvements require special services, Tenant shall pay the additional cost
reasonably attributable thereto as Additional Base Rental. In the event the
janitorial services provided to the Premises are not at or above a level
comparable to those provided to comparable first class office buildings, Tenant
shall so notify Landlord in writing, and if the level of services does not rise
to a level at least comparable with those provided to other comparable first
class office buildings within sixty (60) days after Landlord's receipt of such
notice, Tenant may arrange for its own janitorial service for the Premises and
Tenant's Basic Costs will not include a charge for such service.
5. Passenger elevator service during and after Normal Business Hours
in common with other tenants of the Building.
6. Electricity to the Premises during and after Normal Business Hours
for Tenant's office use, in accordance with and subject to the terms and
conditions set forth in Article 14 of this Lease. Landlord warrants that the
electricity and air-conditioning available in the Premises will be sufficient
for the normal operation of the equipment described on Exhibit F attached
hereto.
7. Landlord shall provide, at Landlord's expense, a multi-level card
key security system that will control access to the Building and the garage and
elevators therein. Tenant shall have access to and use of the Premises 24 hours
a day, 7 days a week. Additional card readers may be installed in the stairwells
to facilitate controlled access between Tenant's floors by way of the
stairwells. Tenant shall bear the cost of any such additional card readers or
other security measures. Tenant shall have the right at any time to install such
other or additional security systems in or about the Premises to control access
to and from the Premises, including, but not limited, camera surveillance
systems, controlling and monitoring access to and from the Premises from
corridors and stairwells, all of which may be independent of Landlord's access
control system, and Tenant shall have the right to limit and restrict card
access thereto; provided that Landlord shall be provided a card for access in
emergencies, maintenance or as otherwise permitted pursuant to this Lease. The
cost of such Tenant's security system shall be Tenant's sole cost and expense.
8. Such other reasonable services as are commonly provided to tenants
in comparable first class office buildings in the area.
B. The failure by Landlord to any extent to furnish, or the interruption or
termination of, any services in whole or in part, resulting from adherence to
laws, regulations and administrative orders, wear, use, repairs, improvements,
alterations or any causes beyond the reasonable control of Landlord shall not
render Landlord liable in any respect nor be construed as a constructive
eviction of Tenant, nor give rise to an abatement of Rent, nor relieve Tenant
from the obligation to fulfill any covenant or agreement hereof, provided that
if any such interruption or termination continues for seventy-two (72) hours
and was not caused by Tenant, Rent shall thereafter ▇▇▇▇▇ to the extent the
Premises are rendered untenantable as a result thereof as Tenant's sole and
exclusive remedy as a result of such interruption. Should any of the equipment
or machinery used in the provision of such services for any cause cease to
function properly, Landlord shall use reasonable diligence to repair such
equipment or machinery.
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C. Tenant expressly acknowledges that if Landlord, from time to time,
elects to provide security services, Landlord shall not be deemed to have
warranted the efficiency of any security personnel, service, procedures or
equipment and Landlord shall not be liable in any manner for the failure of any
such security personnel, services, procedures or equipment to prevent or
control, or apprehend anyone suspected of personal injury, property damage or
any criminal conduct in, on or around the Property.
ARTICLE 11: LEASEHOLD IMPROVEMENTS.
Any trade fixtures, unattached and movable equipment or furniture, or other
personalty brought into the Premises by Tenant ("Tenant's Property") shall be
owned and insured by Tenant. Tenant shall remove all such Tenant's Property from
the Premises in accordance with the terms of Article 37 hereof. Any and all
alterations, additions and improvements to the Premises, including any built-in
furniture (but excluding any trade fixtures) (collectively, "Leasehold
Improvements") shall be owned and insured by Landlord and shall remain upon the
Premises, all without compensation, allowance or credit to Tenant. Upon
expiration of this Lease, the Leasehold Improvements shall remain with and as
part of the Building and are not required to be removed by Tenant. Upon vacation
of the Premises by Tenant, Tenant shall leave the Premises in a broom clean
condition, less ordinary wear and tear and damage caused by fire or casualty.
Tenant, at its sole cost and expense, may install a standby generator in
the Building garage in a location acceptable to Landlord and Tenant. Tenant
shall be responsible for obtaining all permits and shall be responsible for
operating such generator in conformity with all applicable codes and regulations
and Building rules and regulations.
ARTICLE 12: SIGNAGE.
Subject to the conditions listed below, Tenant shall be provided signage on
the Building monument located at the Building entrance and one (1) exterior sign
on the Building, provided such signs comply with the Signage Criteria attached
as Exhibit E hereto and with all applicable laws and codes. The cost of such
exterior signs shall be borne by Tenant, which Tenant may pay from the
Allowance. Landlord shall provide Tenant identification on the Building
directory, at Landlord's expense. The cost of Tenant's interior signage, except
for the Building's lobby directory, will be charged against the tenant
improvement Allowance. The Building is currently known as Sunset North Building
4. Subject to the conditions listed below, Landlord shall not change (i) the
name of the Building to include the name of an entity that, in the reasonable
judgment of Tenant, directly competes with Tenant in the Windows CE tools,
services or applications software development business as such entity's primary
line of business, or (ii) change the name of the Building to include the name or
identity of another tenant in the Campus without Tenant's prior written consent,
which shall not be unreasonably withheld. Tenant's rights to place exterior
signage on the Building or to enforce any rights granted above with respect to
the name of the Building shall be contingent upon the following conditions being
satisfied as of the date in question:
1. Tenant is not in default under this Lease beyond any applicable cure
periods;
2. Tenant has not previously assigned its interest in this Lease (other
than pursuant to a Corporate Transfer); and
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3. Tenant leases and occupies at least two full floors of the Building.
ARTICLE 13: REPAIRS AND ALTERATIONS.
A. Except to the extent such obligations are imposed upon Landlord
hereunder, Tenant, at its sole cost and expense, shall perform all maintenance
and repairs to the Premises as are necessary to keep the same in good condition
and repair throughout the entire Lease Term, reasonable wear and tear and damage
by fire or casualty excepted. Tenant's repair and maintenance obligations with
respect to the Premises shall include, without limitation, any necessary repairs
with respect to: (1) any carpet or other floor covering, (2) any interior
partitions, (3) any doors, (4) the interior side of any demising walls, (5) any
telephone and computer cabling that serves Tenant's equipment exclusively, (6)
any supplemental air conditioning units, private showers and kitchens, including
any plumbing in connection therewith, and similar facilities serving Tenant
exclusively, and (7) any alterations, additions or improvements performed by
contractors retained by Tenant. All such work shall be performed in accordance
with Section 13(B) below and the rules, policies and procedures reasonably
enacted by Landlord from time to time for the performance of work in the
Building. If Tenant fails to make any necessary repairs to the Premises which
are required to be made by Tenant within a reasonable time after written notice
from Landlord (except in case of emergency), Landlord may, at its option, make
such repairs, and Tenant shall pay the cost thereof to the Landlord on demand as
Additional Base Rental, together with an administrative charge in an amount
equal to ten percent (10%) of the cost of such repairs. Landlord shall, at its
expense (except as included in Basic Costs), keep and maintain in good repair
and working order, in accordance with the standards of a first-class office
building in the area, and make all repairs to and perform necessary maintenance
upon: (a) all structural elements of the Building (including the roof and roof
membrane, and foundations); and (b) all elevator, mechanical, electrical and
plumbing systems that serve the Building in general; and (c) the Common Areas,
Property and Building facilities common to all tenants including, but not
limited to, the ceilings, walls and floors in the Common Areas.
B. Tenant shall not make or allow to be made any alterations, additions or
improvements to the Premises without first obtaining the written consent of
Landlord in each such instance, which consent Landlord shall not unreasonably
withhold. Landlord's consent shall be deemed granted if Landlord does not
respond to Tenant's written request for approval within ten (10) business days
(and in such event, Landlord shall be deemed to have elected not to require
Tenant to remove such alterations or improvements at the expiration of the
Lease). Prior to commencing any such work and as a condition to obtaining
Landlord's consent, Tenant must furnish Landlord with plans and specifications
reasonably acceptable to Landlord; names and addresses of contractors reasonably
acceptable to Landlord; copies of contracts; necessary permits and approvals;
evidence of contractor's and subcontractor's insurance in accordance with
Section 19(B) hereof; and payment bond or other security, all in form and amount
satisfactory to Landlord. All such improvements, alterations or additions shall
be constructed in a good and workmanlike manner using Building Standard
materials or other new materials of equal or greater quality. Landlord, to the
extent reasonably necessary to avoid any disruption to the tenants and occupants
of the Building, shall have the right to designate the time when any such
alterations, additions and improvements may be performed and to otherwise
designate reasonable rules, regulations and procedures for the performance of
work in the Building. Upon
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completion, Tenant shall furnish "as-built" plans, contractor's affidavits and
full and final waivers of lien and receipted bills covering all labor and
materials. All improvements, alterations and additions shall comply with all
insurance requirements, codes, ordinances, laws and regulations, including
without limitation, the Americans with Disabilities Act. Tenant shall reimburse
Landlord upon demand as Additional Base Rental for all sums, if any, expanded by
Landlord for third party examination of the architectural, mechanical, electric
and plumbing plans for any alterations, additions or improvements. In addition,
if Landlord so requests, Landlord shall be entitled to oversee the construction
of any alterations, additions or improvements that may affect the structure of
the Building or any of the mechanical, electrical, plumbing or life safety
systems of the Building and Tenant shall pay Landlord the reasonable costs
incurred by Landlord for any such reasonably necessary oversight. Landlord's
approval of Tenant's plans and specifications for any work performed for or on
behalf of Tenant shall not be deemed to be a representation by Landlord that
such plans and specifications comply with applicable insurance requirements,
building codes, ordinances, laws or regulations or that the alterations,
additions and improvements constructed in accordance with such plans and
specifications will be adequate for Tenant's use.
Notwithstanding the foregoing, Tenant may make nonstructural
alterations, additions or improvements to the interior of the Premises,
including wiring within the Premises, nonstructural partitioning, and painting
and redecorating, without the necessity of obtaining Landlord's consent,
provided in all such cases (other than cabling, painting or decoration solely
within the Premises) Tenant shall give Landlord five (5) business days' prior
written notice of such modifications. Any such alterations, additions or
improvements shall be installed by Tenant at its sole cost and in compliance
with all laws, orders and regulations of any applicable governing body and
Tenant at its expense shall furnish to Landlord drawings for such work to enable
the Building's record drawings to be updated to reflect such changes.
ARTICLE 14: USE OF ELECTRICAL SERVICE BY TENANT.
A. All electricity used by Tenant in the Premises shall be paid for by
Tenant by a separate charge billed directly to Tenant by Landlord and payable by
Tenant as Additional Base Rental within ten (10) days after billing. It is
understood that electrical service to the Premises may be furnished by one or
more companies providing electrical generation, transmission and/or distribution
services and that the cost of electricity may be billed as a single charge or
divided into and billed in a variety of categories such as distribution charges,
transmission charges, generation charges, public good charges or other similar
categories. Landlord shall have the exclusive right to select the company(ies)
providing electrical service to the Building, Premises and Property, to
aggregate the electrical service for the Building, Premises and Property with
other buildings, to purchase electricity for the Building, Premises and Property
through a broker and/or buyers group and to change the providers and/or manner
of purchasing electricity from time to time so long as and to the extent that
such does not interfere with Tenant's use of the Premises in accordance with
this Lease. Landlord shall make available to Tenant upon Tenant's request, such
information and documents and Tenant shall reasonably request to calculate and
verify charges to Tenant for electricity usage by Tenant.
B. Tenant's use of electrical service in the Premises shall not exceed,
either in voltage, rated capacity, or overall load, the design specifications
for the Building (the electrical design specifications for the Building are set
forth on Exhibit D-2 hereto). In the event Tenant shall consume (or request that
it be allowed to consume) electrical service in excess of the design
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specifications for the Building, Landlord may refuse to consent to such excess
usage or may condition its consent to such excess usage upon such conditions as
Landlord reasonably elects (including the installation of utility service
upgrades, submeters, air handlers or cooling units), and all such additional
usage (to the extent permitted by law), installation and maintenance thereof
shall be paid for by Tenant as Additional Base Rental. Landlord, at any time
during the Lease Term, shall have the right to separately meter electrical usage
for the Premises or to measure electrical usage by survey or any other method
that Landlord, in its reasonable judgment, deems to be appropriate.
C. Notwithstanding Section A above to the contrary, if Landlord permits
Tenant to purchase electrical power for the Premises from a provider other than
Landlord's designated company(ies), such provider shall be considered to be a
contractor of Tenant and Tenant shall indemnify and hold Landlord harmless from
such provider's acts and omissions while in, or in connection with their
services to, the Building or Premises in accordance with the terms and
conditions of Article 18. In addition, at the request of Landlord, Tenant shall
allow Landlord to purchase electricity from Tenant's provider (at no additional
cost or liability to Tenant and only if such provider is willing to sell such
electricity to Landlord) at such rates as Landlord is able to negotiate with
such provider.
ARTICLE 15: ENTRY BY LANDLORD.
Landlord and its agents or representatives shall have the right to enter
the Premises to inspect the same, or to show the Premises to prospective
purchasers, mortgagees, tenants (during the last twelve months of the Lease Term
or earlier in connection with a potential relocation) or insurers, or to clean
or make repairs, alterations or additions thereto, including any work that
Landlord deems necessary for the safety, protection or preservation of the
Building or any occupants thereof, or to facilitate repairs, alterations or
additions to the Building or any other tenants' premises. Except for any entry
by Landlord in an emergency situation or to provide normal cleaning and
janitorial service, Landlord shall provide Tenant with reasonable prior notice
of any entry into the Premises, which notice may be given verbally, and shall
access the Premises only with a designated representative of Tenant being
present. If reasonably necessary for the protection and safety of Tenant and its
employees, Landlord shall have the right to temporarily close the Premises to
perform repairs, alterations or additions in the Premises, provided that
Landlord shall use reasonable efforts to perform all such work on weekends and
after Normal Business Hours. Entry by Landlord hereunder shall not constitute a
constructive eviction or entitle Tenant to any abatement or reduction of Rent by
reason thereof.
ARTICLE 16: ASSIGNMENT AND SUBLETTING.
A. Tenant shall not assign, sublease, transfer or encumber this Lease or
any interest therein or grant any license, concession or other right of
occupancy of the Premises or any portion thereof or otherwise permit the use of
the Premises or any portion thereof by any party other than Tenant (any of which
events is hereinafter called a "Transfer") without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed with
respect to any proposed Transfer. Landlord's consent shall not be considered
unreasonably withheld if: (1) the proposed transferee's financial responsibility
does not meet the same criteria Landlord uses to select Building tenants; (2)
the proposed transferee's business is not suitable for the Building considering
the business of the other tenants or would result in a violation of an exclusive
right granted to another tenant in the Building; (3) the proposed use is
different than
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the Permitted Use; (4) the proposed transferee is a government agency or
occupant of the Building; (5) Tenant is in Default; or (6) any portion of the
Building or Premises would become subject to additional or different
governmental laws or regulations as a consequence of the proposed Transfer
and/or the proposed transferee's use and occupancy of the Premises in a way that
would have a material adverse effect on the Premises or Building. Tenant
acknowledges that the foregoing is not intended to be an exclusive list of the
reasons for which Landlord may reasonably withhold its consent to a proposed
Transfer. Any attempted Transfer in violation of the terms of this Article
shall, at Landlord's option, be void. Consent by Landlord to one or more
Transfers shall not operate as a waiver of Landlord's rights as to any
subsequent Transfers. In addition, Tenant shall not, without Landlord's consent,
publicly advertise the proposed rental rate for any Transfer.
B. If Tenant requests Landlord's consent to a Transfer, Tenant, together
with such request for consent, shall provide Landlord with the name of the
proposed transferee and the nature of the business of the proposed transferee,
the term, use, rental rate and all other material terms and conditions of the
proposed Transfer, including, without limitation, a copy of the proposed
assignment, sublease or other contractual documents and evidence satisfactory to
Landlord that the proposed transferee is financially responsible.
Notwithstanding Landlord's agreement to act reasonably under Section 16(A)
above, with respect to Transfers other than those described in Subsection 16(E)
below, if such Transfer is made for the full remaining balance of the Term,
excluding extension options (whether with respect to all or only a portion or
the Premises), Landlord may, within fifteen (15) business days after its receipt
of all information and documentation required herein, either, (1) consent to or
reasonably refuse to consent to such Transfer in writing; or (2) for any
sublease or assignment of one floor or more, cancel and terminate this Lease, as
to the portion of the Premises proposed to be transferred, upon thirty (30)
days' notice and recapture the space proposed for such subletting or assignment.
In the event Landlord consents to any such Transfer, the Transfer and consent
thereto shall be in a form approved by Landlord, and, whether or not Landlord
consents to such Transfer, Tenant shall bear all costs and expenses incurred by
Landlord in connection with the review and approval of such documentation, which
costs and expenses shall be deemed to be at least Two Hundred Fifty Dollars
($250.00), and not to exceed One Thousand Five Hundred Dollars ($1,500.00) and
further provided that any net proceeds from assignment or subleasing the
Premises shall be shared on an equal basis by Tenant and Landlord after
deducting Tenant's reasonable subleasing/assignment costs.
C. Landlord shall respond to any requested Transfer by Tenant, within
fifteen (15) business days of Tenant's written request.
D. If Tenant is a corporation, limited liability company or similar
entity, the transfer, in a single transaction or a series of related
transactions occurring within a twelve (12) month period, of 50% or more of the
voting stock of Tenant shall constitute a Transfer. The preceding sentence shall
not apply whenever Tenant is a corporation, the outstanding stock of which is
listed on a recognized security exchange, or if at least eighty percent (80%) of
its voting stock is owned by another corporation, the voting stock of which is
so listed.
E. Notwithstanding anything herein to the contrary, provided Tenant is not
in default under this Lease, Landlord hereby consents to an assignment of this
Lease, or a subletting of all or part of the Premises, to (i) the parent of
Tenant, a wholly owned subsidiary of Tenant or of such parent, or another
affiliate which Tenant controls, is controlled by or is under common
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control with Tenant, (ii) any corporation in whom or with which Tenant may be
merged or consolidated, or (iii) any entity to whom Tenant sells all or
substantially all of its assets, provided that in each such instance such entity
expressly assumes all of Tenant's obligations hereunder and has a net worth at
least equal to the greater of (A) the net worth of Tenant on the date hereof or
(B) the net worth of Tenant immediately prior to such assignment or transaction.
With respect to the transactions described in Subsections (i) and (ii) above,
such net worth may be on a consolidated basis with Tenant and Tenant's
affiliated entity. An initial public offering of Tenant's stock and any
subsequent transfers shall not be considered a Transfer hereunder. A Transfer
meeting all of the requirements of this Section 16(E) shall be deemed a
"Corporate Transfer."
F. Any Transfer consented to by Landlord in accordance with this Article 16
shall be only for the Permitted Use and for no other purpose. In no event shall
any Transfer release or relieve Tenant from any obligations under this Lease.
ARTICLE 17: LIENS.
Tenant will not permit any mechanic's liens or other liens to be placed
upon the Premises or Tenant's leasehold interest therein, the Building, or the
Property. Landlord's title to the Building and Property is and always shall be
paramount to the interest of Tenant, and nothing herein contained shall empower
Tenant to do any act that can, shall or may encumber Landlord's title. In the
event any such lien does attach, Tenant shall, within ten (10) days of notice of
the filing of said lien, either discharge or bond over such lien to the
satisfaction of Landlord and Landlord's Mortgagee (as hereinafter defined), and
in such a manner as to remove the lien as an encumbrance against the Building
and Property. If Tenant shall fail to so discharge or bond over such lien, then,
in addition to any other right or remedy of Landlord, Landlord may, but shall
not be obligated to bond over or discharge the same. Any amount paid by Landlord
for any of the aforesaid purposes, including reasonable attorneys' fees (if and
to the extent permitted by law) shall be paid by Tenant to Landlord on demand as
Additional Base Rental. Landlord shall have the right to post and keep posted on
the Premises any notices that may be provided by law or which Landlord may deem
to be proper for the protection of Landlord, the Premises and the Building from
such liens.
ARTICLE 18: INDEMNITY AND WAIVER OF CLAIMS.
A. Tenant shall indemnify, defend and hold Landlord, its members,
principals, beneficiaries, partners, officers, directors, employees,
Mortgagee(s) and agents, and the respective principals and members of any such
agents (collectively the "Landlord Related Parties") harmless against and from
all liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including, without limitation, reasonable attorneys' fees and other
professional fees (if and to the extent permitted by law), which may be imposed
upon, incurred by, or asserted against Landlord or any of the Landlord Related
Parties and arising, directly or indirectly, out of or in connection with the
use, occupancy or maintenance of the Premises by, the rough or under Tenant
including, without limitation, any of the following (to the extent they were
done by, under or through the Tenant): (1) any work or thing done in, on or
about the Premises or any part thereof by Tenant or any of its transferees,
agents, servants, contractors, employees, customers, licensees or invitees; (2)
any use, non-use, possession, occupation, condition, operation or maintenance of
the Premises or any part thereof, (3) any act or omission of Tenant or any of
its transferees, agents, servants, contractors, employees, customers, licensees
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or invitees, regardless of whether such act or omission occurred within the
Premises; (4) any injury or damage to any person or property occurring in, on or
about the Premises or any part thereof, or (5) any failure on the part of Tenant
to perform or comply with any of the covenants, agreements, terms or conditions
contained in this Lease with which Tenant must comply or perform.
B. Landlord and the Landlord Related Parties shall not be liable for, and
Tenant hereby waives, all claims for loss or damage to Tenant's business or
damage to person or property sustained by Tenant or any person claiming by,
through or under Tenant [including Tenant's principals, agents and employees
(collectively, the "Tenant Related Parties")] resulting from any accident or
occurrence in, on or about the Premises, the Building or the Property,
including, without limitation, claims for loss, theft or damage resulting from:
(1) the Premises, Building, or Property, or any equipment or appurtenances
becoming out of repair; (2) wind or weather; (3) any defect in or failure to
operate, for whatever reason, any sprinkler, heating or air conditioning
equipment, electric wiring, gas, water or steam pipes; (4) broken glass; (5) the
backing up of any sewer pipe or downspout; (6) the bursting, leaking or running
of any tank, water closet, drain or other pipe; (7) the escape of steam or
water; (8) water, snow or ice being upon or coming through the roof, skylight,
stairs, doorways, windows, walks or any other place upon or near the Building;
(9) the falling of any fixture, plaster, tile or other material; (10) any act,
omission or negligence of other tenants, licensees or any other persons or
occupants of the Building or of adjoining or contiguous buildings, or owners of
adjacent or contiguous property or the public, or by construction of any
private, public or quasi-public work; or (11) any other cause of any nature
except, as to items 1-9, where such loss or damage is due to Landlord's
negligence or willful misconduct, or due to Landlord's willful failure to make
repairs required to be made pursuant to other provisions of this Lease, after
the expiration of a reasonable time after written notice to Landlord of the need
for such repairs. To the maximum extent permitted by law, Tenant agrees to use
and occupy the Premises, and to use such other portions of the Building as
Tenant is herein given the right to use, at Tenant's own risk.
C. Landlord shall indemnify, defend and hold Tenant harmless from and
against all liabilities, damages, losses, claims, and expenses, including
reasonable attorneys' fees arising from any negligent act or willful misconduct
of Landlord or its officers, contractors, licensees, agents, employees, clients,
or customers in or about the Building or Premises, or arising from any breach or
default under this Lease by Landlord. Landlord shall not be liable for any act
or neglect of Tenant or any other tenant or occupant of the Building or any
third parties. In no event shall Landlord be liable to Tenant for any damage to
the Premises or for any loss, damage or injury to any property therein or
thereon occasioned by bursting, rupture, leakage or overflow of any plumbing or
other pipes (including, without limitation, water, steam and/or refrigerant
lines), sprinklers, tanks, drains, drinking fountains or washstands or other
similar cause in, above, upon or about the Premises or the Building, unless due
to the negligence or willful misconduct of Landlord or its officers,
contractors, licensees, agents, employees, clients or customers.
ARTICLE 19: TENANT'S INSURANCE.
A. At all times commencing on and after the earlier of the Commencement
Date and the date Tenant or its agents, employees or contractors enters the
Premises for any purpose, Tenant shall carry and maintain, at its sole cost and
expense:
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1. Commercial General Liability Insurance applicable to the Premises
and its appurtenances providing, on an occurrence basis, a minimum combined
single limit of Two Million Dollars ($2,000,000.00), with a Contractual
liability endorsement covering Tenant's indemnity obligations under this Lease.
2. All Risks of Physical Loss Insurance written at replacement cost
value and with a replacement cost endorsement covering all of Tenant's Property
in the Premises.
3. Workers' Compensation Insurance as required by the state of
Washington and in amounts as may be required by applicable statute, and
Employers' Liability Coverage of One Million Dollars ($1,000,000.00) per
occurrence.
4. Whenever good business practice, in Landlord's reasonable judgment,
indicates the need of additional insurance coverage or different types of
insurance in connection with the Premises or Tenant's use and occupancy thereof,
Tenant shall, upon request, obtain such insurance at Tenant's expense and
provide Landlord with evidence thereof.
B. Except for items for which Landlord is responsible under Exhibit D, the
Work Letter Agreement, before any repairs, alterations, additions, improvements,
or construction are undertaken by or on behalf of Tenant, Tenant shall carry and
maintain, at its expense, or Tenant shall require any contractor performing work
on the Premises to carry and maintain, at no expense to Landlord, in addition to
Workers' Compensation Insurance as required by the jurisdiction in which the
Building is located, All Risk Builder's Risk Insurance in the amount of the
replacement cost of any alterations, additions or improvements (or such other
amount reasonably required by Landlord) and Commercial General Liability
Insurance (including, without limitation, Contractor's Liability coverage,
Contractual Liability coverage and Completed Operations coverage,) written on an
occurrence basis with a minimum combined single limit of Two Million Dollars
($2,000,000.00) and adding "the named Landlord hereunder (or any successor
thereto) and its respective members, principals, beneficiaries, partners,
officers, directors, employees, agents and any Mortgagee(s)", and other
designees of Landlord as the interest of such designees shall appear, as
additional insureds (collectively referred to as the "Additional Insureds").
C. Any company writing any insurance which Tenant is required to maintain
or cause to be maintained pursuant to the terms of this Lease (all such
insurance as well as any other insurance pertaining to the Premises or the
operation of Tenant's business therein being referred to as "TENANT'S
INSURANCE"), as well as the form of such insurance, shall at all times be
subject to Landlord's reasonable approval, and each such insurance company shall
have an A.M. Best rating of "A-" or better and shall be licensed and qualified
to do business in the state in which the Premises is located. All policies
evidencing Tenant's Insurance (except for Workers' Compensation Insurance) shall
specify Tenant as named insured and the Additional Insureds as additional
insureds. Provided that the coverage afforded Landlord and any designees of
Landlord shall not be reduced or otherwise adversely affected, all of Tenant's
Insurance may be carried under a blanket policy covering the Premises and any
other of Tenant's locations. All policies of Tenant's Insurance shall contain
endorsements that the insurer(s) will give to Landlord and its designees at
least thirty (30) days' advance written notice of any cancellation, termination
or lapse of said insurance. Tenant shall be solely responsible for payment of
premiums for all of Tenant's Insurance. Tenant shall deliver to Landlord at
least fifteen (15) days prior to the time Tenant's Insurance is first required
to be carried by Tenant, and upon
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happening of the casualty. Notwithstanding the foregoing, Landlord's obligation
to restore the Building, and the Tenant Improvements, if any, shall not require
Landlord to expend for such repair and restoration work more than the insurance
proceeds actually received by the Landlord as a result of the casualty plus any
deductible. Tenant shall have the right to terminate this Lease if (i) any such
restoration of the Premises is not completed within 225 days after the date of
such casualty and such delays prevent Tenant from occupying the Premises for
Tenant's normal business operations; or (ii) the Premises are damaged within the
last two (2) years of the Lease Term and such damage prevents Tenant from
occupying the Premises for Tenant's normal business operations. When repairs to
the Premises have been completed by Landlord, Tenant shall complete the
restoration or replacement of all Tenant's Property necessary to permit Tenant's
reoccupancy of the Premises, and Tenant shall present Landlord with evidence
satisfactory to Landlord of Tenant's ability to pay such costs prior to
Landlord's commencement of repair and restoration of the Premises. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or injury to
the business of Tenant resulting in any way from such damage or the repair
thereof, except that, subject to the provisions of the next sentence, Landlord
shall allow Tenant a fair diminution of Rent on a per diem basis during the time
and to the extent any damage to the Premises causes the Premises to be rendered
untenantable and not used by Tenant. If the Premises or any other portion of the
Building is damaged by fire or other casualty resulting from the negligence of
Tenant or any Tenant Related Parties, the Rent hereunder shall not be diminished
during any period during which the Premises, or any portion thereof, is
untenantable (except to the extent Landlord is entitled to be reimbursed by the
proceeds of any rental interruption insurance), and Tenant shall be liable to
Landlord for the cost of the repair and restoration of the Building caused
thereby to the extent such cost and expense is not covered by insurance
proceeds. Landlord and Tenant hereby waive the provisions of any law from time
to time in effect during the Lease Term relating to the effect upon leases of
partial or total destruction of leased property. Landlord and Tenant agree that
their respective rights in the event of any damage to or destruction of the
Premises shall be those specifically set forth herein.
Notwithstanding anything to the contrary contained in this Article 22
above, in the event Landlord (i) is obligated or elects to restore the Premises
or the Building after any casualty; (ii) such casualty has not had a material
adverse effect on the Premises or Tenant's ability to use the Premises; and
(iii) Tenant's continued occupancy of the Premises will not materially adversely
affect Landlord's construction activity in restoring the Premises and the
Building, nor prohibit or restrict Landlord's ability to obtain any necessary
permits for such restoration work, then Landlord shall not terminate Tenant's
lease as a result of such casualty.
ARTICLE 23: INTENTIONALLY DELETED
ARTICLE 24: CONDEMNATION
If (a) the whole or any substantial part of the Premises or (b) any portion
of the Building or Property which would leave the remainder of the Building
unsuitable for use as an office building comparable to its use on the
Commencement Date, shall be taken or condemned for any public or quasi-public
use under governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, then Landlord may, at its
option, terminate this Lease effective as of the date the physical taking of
said Premises or said portion of the Building or Property shall occur. In the
event this Lease is not terminated, the Rentable Area of the Building, the
Rentable Area of the Premises and Tenant's Pro Rata Share shall be appropriately
adjusted. In addition, Rent for any portion of the Premises so taken or
condemned
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shall be abated during the unexpired term of this Lease effective when the
physical taking of said portion of the Premises shall occur. All compensation
awarded for any such taking or condemnation, or sale proceeds in lieu thereof,
shall be the property of Landlord, and Tenant shall have no claim thereto, the
same being hereby expressly waived by Tenant, except for any portions of such
award or proceeds which are specifically allocated by the condemning or
purchasing party for the taking of or damage to trade fixtures of Tenant, which
Tenant specifically reserves to itself.
ARTICLE 25: EVENTS OF DEFAULT
The following events shall be deemed to be events of default under this
Lease:
A. Tenant shall fail to pay when due any Base Rental, Additional Base
Rental or other Rent under this Lease and such failure shall continue for five
(5) business days after receipt of written notice from Landlord (hereinafter
sometimes referred to as a "Monetary Default").
B. Any failure by Tenant (other than a Monetary Default) to comply with any
term, provision or covenant of this Lease, including, without limitation, the
rules and regulations, which failure is not cured within thirty (30) days after
receipt of notice of the occurrence of such failure, provided that if any such
failure creates a hazardous condition, such failure must be cured immediately,
and further provided, however, that with respect to any such nonhazardous
default capable of being cured by Tenant which cannot be cured within thirty
(30) days, the default shall not be deemed to be uncured if Tenant commences to
cure within thirty (30) days and for so long as Tenant is diligently pursuing
the care thereof.
C. Tenant shall become insolvent, or shall make a transfer in fraud of
creditors, or shall commit an act of bankruptcy or shall make an assignment for
the benefit of creditors, or Tenant shall admit in writing its inability to pay
its debts as they become due.
D. Tenant shall file a petition under any section or chapter of the United
States Bankruptcy Code, as amended, pertaining to bankruptcy, or under any
similar law or statute of the United States or any State thereof, or Tenant
shall be adjudged bankrupt or insolvent in proceedings filed against Tenant
thereunder; or a petition or answer proposing the adjudication of Tenant as a
debtor or its reorganization under any present or future federal or state
bankruptcy or similar law shall be filed in any court and such petition or
answer shall not be discharged or denied within sixty (60) days after the filing
thereof.
E. A receiver or trustee shall be appointed for all or substantially all of
the assets of Tenant or of the Premises or of any of Tenant's Property located
thereon in any proceeding brought by Tenant, or any such receiver or trustee
shall be appointed in any proceeding brought against Tenant and shall not be
discharged within sixty (60) days after such appointment or Tenant shall consent
to or acquiesce in such appointment.
F. The leasehold estate hereunder shall be taken on execution or other
process of law or equity in any action against Tenant.
G. The liquidation, termination, dissolution, forfeiture of right to do
business, or death of Tenant.
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ARTICLE 26: REMEDIES
A. Upon the occurrence of any event or events of default under this Lease,
Landlord shall have the option to pursue any one or more of the following
remedies without any notice (except as expressly prescribed in Article 25 above)
or demand whatsoever (and without limiting the generality of the foregoing,
Tenant hereby specifically waives notice and demand for payment of Rent or other
obligations due [except as expressly prescribed in Article 25 above] and waives
any and all other notices or demand requirements imposed by applicable law):
1. Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord. If Tenant fails to surrender the Premises
upon termination of the Lease hereunder, Landlord may without prejudice to any
other remedy which it may have, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying said
Premises, or any part thereof, and Tenant hereby agrees to pay to Landlord on
demand the amount of all loss and damage, including consequential damage, which
Landlord may suffer by reason of such termination (but only to the extent
proximately caused by such damage), whether through inability to relet the
Premises on satisfactory terms or otherwise, specifically including but not
limited to all Costs of Reletting (hereinafter defined) and any deficiency that
may arise by reason of any reletting or failure to relet.
2. Enter upon and take possession of the Premises and expel or remove
Tenant or any other person who may be occupying said Premises, or any part
thereof, without having any civil or criminal liability therefor and without
terminating this Lease. Landlord may (but shall be under no obligation to) relet
the Premises or any part thereof for the account of Tenant, in the name of
Tenant or Landlord or otherwise, without notice to Tenant for such term or terms
which may be greater or less than the period which would otherwise have
constituted the balance of the Lease Term and on such conditions (which may
include concessions, free rent and alterations of the Premises) and for such
uses as Landlord, acting reasonably, shall determine, and Landlord may collect
and receive any rents payable by reason of such reletting. Tenant agrees to pay
Landlord on demand all reasonable Costs of Reletting and any deficiency that may
arise by reason of such reletting or failure to relet. Landlord shall not be
responsible or liable for any failure to relet the Premises or any part thereof
or for any failure to collect any Rent due upon any such reletting so long as
Landlord acts in good faith and makes reasonable efforts to mitigate its
damages. No such re-entry or taking of possession of the Premises by Landlord
shall be construed as an election on Landlord's part to terminate this Lease
unless a written notice of such termination is given to Tenant.
3. Enter upon the Premises without having any civil or criminal
liability therefor, and do whatever Tenant's obligated to do under the terms of
this Lease, and Tenant agrees to reimburse Landlord on demand for any reasonable
expense which Landlord may incur in thus effecting compliance with Tenant's
obligations under this Lease together with interest at the lesser of a per annum
rate equal to: (a) the Maximum Rate, or (b) the Prime Rate plus five percent
(5%). Maximum Rate means the maximum rate of interest which may be charged
without violation of applicable usury laws.
4. In order to regain possession of the Premises and to deny Tenant
access thereto in any instance in which Landlord has terminated this Lease or
Tenant's right to possession, or to limit access to the Premises in accordance
with local law in the event of a
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default by Tenant, Landlord or its agent may, at the expense and liability of
the Tenant, alter or change any or all locks or other security devices
controlling access to the Premises without posting or giving notice of any kind
to Tenant. Landlord shall have no obligation to provide Tenant a key or grant
Tenant access to the Premises so long as Tenant is in default under this Lease
which default has not been cured within any time limits granted pursuant to this
Lease. Tenant shall not be entitled to recover possession of the Premises,
terminate this Lease, or recover any actual, incidental, consequential,
punitive, statutory or other damages or award of attorneys' fees, by reason of
Landlord's alteration or change of any lock or other security device as a result
of any uncured default of Tenant. Landlord may, without notice, remove and
either dispose of or store, at Tenant's expense, any property belonging to
Tenant that remains in the Premises after Landlord has regained possession
thereof.
5. Terminate this Lease, in which event, Tenant shall immediately
surrender the Premises to Landlord and pay to Landlord the sum of: (a) all Rent
accrued hereunder through the date of termination, and, upon Landlord's
determination thereof, (b) an amount equal to: the total Rent that Tenant would
have been required to pay for the remainder of the Lease Term discounted to
present value at the Prime Rate then in effect, minus the then present fair
rental value of the Premises for the remainder of the Lease Term, similarly
discounted, after deducting all anticipated Costs of Reletting (as defined
below).
B. For purposes of this Lease, the term "COSTS OF RELETTING" shall mean all
reasonable costs and expenses incurred by Landlord in connection with the
reletting of the Premises, including without limitation, the cost of cleaning,
renovation, repairs, decoration and alteration of the Premises for a new tenant
or tenants, advertisement, marketing, brokerage and legal fees (if and to the
extent permitted by law), the cost of protecting or caring for the Premises
while vacant, the cost of removing and storing any property located on the
Premises, any increase in insurance premiums caused by the vacancy of the
Premises and any other out-of-pocket expenses reasonably incurred by Landlord
including tenant incentives, allowances and inducements.
C. Except as otherwise herein provided, no repossession or reentering of
the Premises or any part thereof pursuant to Article 26 hereof or otherwise
shall relieve Tenant of its liabilities and obligations hereunder, all of which
shall survive such repossession or re-entering. Notwithstanding any such
repossession or re-entering by reason of the occurrence of an event of default,
Tenant will pay to Landlord the Rent required to be paid by Tenant pursuant to
this Lease.
D. No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing by agreement, applicable law or in
equity. In addition to other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable law, to injunctive relief, or to
a decree compelling performance of any of the covenants, agreements, conditions
or provisions of this Lease, or to any other remedy allowed to Landlord at law
or in equity. Forbearance by Landlord to enforce one or more of the remedies
herein provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default.
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E. This Article 26 shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable law, and the unenforceability of any
portion thereof shall not thereby render unenforceable any other portion.
ARTICLE 27: LIMITATION OF LIABILITY
A. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD HEREUNDER) TO TENANT SHALL
BE LIMITED TO THE INTEREST OF LANDLORD IN THE PROPERTY AND ANY PROCEEDS THEREOF,
SUBJECT TO THE INTEREST OF ANY MORTGAGEES, AND TENANT AGREES TO LOOK SOLELY TO
LANDLORD'S INTEREST IN THE PROPERTY AND THE PROCEEDS THEREOF, SUBJECT TO THE
INTEREST OF ANY MORTGAGEES, FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST
THE LANDLORD, IT BEING INTENDED THAT NEITHER LANDLORD NOR ANY MEMBER, PRINCIPAL,
PARTNER, SHAREHOLDER, OFFICER, DIRECTOR OR BENEFICIARY OF LANDLORD SHALL BE
PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY. TENANT HEREBY COVENANTS THAT,
PRIOR TO THE FILING OF ANY SUIT FOR AN ALLEGED DEFAULT BY LANDLORD HEREUNDER, IT
SHALL GIVE LANDLORD AND ALL MORTGAGEES WHOM TENANT HAS BEEN NOTIFIED HOLD
MORTGAGES OR DEED OF TRUST LIENS ON THE PROPERTY, BUILDING OR PREMISES NOTICE
AND REASONABLE TIME TO CURE SUCH ALLEGED DEFAULT BY LANDLORD. IN ADDITION,
TENANT ACKNOWLEDGES THAT ANY ENTITY MANAGING THE BUILDING ON BEHALF OF LANDLORD,
OR WHICH EXECUTES THIS LEASE AS AGENT FOR LANDLORD, IS ACTING SOLELY IN ITS
CAPACITY AS AGENT FOR LANDLORD AND SHALL NOT BE LIABLE FOR ANY OBLIGATIONS,
LIABILITIES, LOSSES OR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS LEASE,
ALL OF WHICH ARE EXPRESSLY WAIVED BY TENANT.
ARTICLE 23: NO WAIVER
Failure of Landlord to declare any default immediately upon its occurrence,
or delay in. taking any action in connection with an event of default shall not
constitute a waiver of such default, nor shall it constitute an estoppel against
Landlord, but Landlord shall have the right to declare the default at any time
and take such action as is lawful or authorized under this Lease. Failure by
Landlord to enforce its rights with respect to any one default shall not
constitute a waiver of its rights with respect to any subsequent default.
Receipt by Landlord of Tenant's keys to the Premises shall not constitute an
acceptance or surrender of the Premises.
ARTICLE 29: EVENT OF BANKRUPTCY
In addition to, and in no way limiting the other remedies set forth
herein, Landlord and Tenant agree that if Tenant ever becomes the subject of a
voluntary or involuntary bankruptcy, reorganization, composition, or other
similar type proceeding under the federal bankruptcy laws, as now enacted or
hereinafter amended, then, to the extent permitted by law:
A. "ADEQUATE PROTECTION" of Landlord's interest in the Premises pursuant to
the provisions of Section 361 and 363 (or their successor sections) of the
Bankruptcy Code, 11 U.S.C. Section 101 et. seq., (such Bankruptcy Code as
amended from time to time being
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herein referred to as the "Bankruptcy Code"), prior to assumption and/or
assignment of the Lease by Tenant shall include, but not be limited to all (or
any part) of the following:
1. the continued payment by Tenant of the Base Rental and all other
Rent due and owing hereunder and the performance of all other covenants and
obligations hereunder by Tenant;
2. the furnishing of an additional/new security deposit by Tenant in
the amount of three (3) times the then current monthly Base Rental.
B. "ADEQUATE ASSURANCE OF FUTURE PERFORMANCE" by Tenant and/or any assignee
of Tenant pursuant to Bankruptcy Code Section 365 will include (but not be
limited to) payment of an additional/new Security Deposit in the amount of three
(3) times the then Current monthly Base Rental payable hereunder.
C. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed without further act or deed
to have assumed all of the obligations of Tenant arising under this Lease on and
after the effective date of such assignment. Any such assignee shall, upon
demand by Landlord, execute and deliver to Landlord an instrument confirming
such assumption of liability as well as a subordination agreement in the form of
Exhibit G attached hereto.
D. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of the Landlord under this Lease, whether or
not expressly denominated as "Rent," shall constitute "rent" for the purposes of
Section 502(b)(6) of the Bankruptcy Code.
E. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other considerations
payable or otherwise to be delivered to Landlord (including Base Rentals and
other Rent hereunder), shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the bankruptcy estate of
Tenant. Any and all monies or other considerations constituting Landlord's
property under the preceding sentence not paid or delivered to Landlord shall be
held in trust by Tenant or Tenant's bankruptcy estate for the benefit of
Landlord and shall be promptly paid to or turned over to Landlord.
F. If Tenant assumes this Lease and proposes to assign the same pursuant to
the provisions of the Bankruptcy Code to any person or entity who shall have
made a bona fide offer to accept an assignment of this Lease on terms acceptable
to the Tenant, then notice of such proposed offer/assignment, setting forth: (1)
the name and address of such person or entity, (2) all of the terms and
conditions of such offer, and (3) the adequate assurance to be provided Landlord
to assure such person's or entity's future performance under the Lease, shall be
given to Landlord by Tenant no later than twenty (20) days after receipt by
Tenant, but in any event no later than ten (10) days prior to the date that
Tenant shall make application to a court of competent jurisdiction for authority
and approval to enter into such assumption and assignment, and Landlord shall
thereupon have the prior right and option, to be exercised by notice to Tenant
given at any time prior to the effective date of such proposed assignment, to
accept an assignment of this Lease upon the same terms and conditions and for
the same consideration, if any, as the bona fide offer made by such persons or
entity, less any brokerage commission which
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may be payable out of the consideration to be paid by such person for the
assignment of this Lease.
G. To the extent permitted by law, Landlord and Tenant agree that this
Lease is a contract under which applicable law excuses Landlord from accepting
performance from (or rendering performance to) any person or entity other than
Tenant within the meaning of Sections 365(c) and 365(e)(2) of the Bankruptcy
Code.
ARTICLE 30: WAIVER OF JURY TRIAL
Landlord and Tenant hereby waive any right to a trial by jury in any action
or proceeding based upon, or related to, the subject matter of this Lease. This
waiver is knowingly, intentionally, and voluntarily made by Tenant, and Tenant
acknowledges that neither Landlord nor any person acting on behalf of Landlord
has made any representations of fact to induce this waiver of trial by jury or
in any way to modify or nullify its effect. Tenant further acknowledges that it
has been represented (or has had the opportunity to be represented) in the
signing of this Lease and in the making of this waiver by independent legal
counsel, selected of its own free will, and that it has had the opportunity to
discuss this waiver with counsel.
ARTICLE 31: HOLDING OVER
In the event of holding over by Tenant after expiration or other
termination of this Lease or in the event Tenant continues to occupy the
Premises after the termination of Tenant's right of possession pursuant to
Articles 25 and 26 hereof, occupancy of the Premises subsequent to such
termination or expiration shall be that of a tenancy at sufferance and in no
event for month-to-month or year-to-year. Tenant shall, throughout the entire
holdover period, be subject to all the terms and provisions of this Lease and
shall pay for its use and occupancy an amount (on a per month basis without
reduction for any partial months during any such holdover) equal to 135% of the
sum of the Base Rental and Additional Base Rental due for the period immediately
preceding such holding over, provided that in no event shall Base Rental and
Additional Base Rental during the holdover period be less than the fair market
rental for the Premises. No holding over by Tenant or payments of money by
Tenant to Landlord after the expiration of the term of this Lease shall be
construed to extend the Lease Term or prevent Landlord from recovery of
immediate possession of the Premises by summary proceedings or otherwise. In
addition to the obligation to pay the amounts set forth above during any such
holdover period, Tenant also shall be liable to Landlord for all damage which
Landlord may suffer by reason of any holding over by Tenant, and Tenant shall
indemnify Landlord against any and all claims made by any other tenant or
prospective tenant against Landlord for delay by Landlord in delivering
possession of the Premises to such other tenant or prospective tenant.
ARTICLE 32: SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE
Tenant accepts this Lease subject and subordinate to any mortgage, deed of
trust, ground lease or other lien presently existing or hereafter arising upon
the Premises, or upon the Building and/or the Property and to any renewals,
modifications, refinancings and extensions thereof (any such mortgage, deed of
trust, lease or other lien being hereinafter referred to as a "Mortgage", and
the person or entity having the benefit of same being referred to hereinafter as
a "Mortgagee"), provided that with respect to the current first-lien Mortgage on
the Property, Tenant hereby approves and agrees to execute, upon execution of
this Lease, the form of
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Subordination Agreement attached hereto as Exhibit G, but Tenant shall not be
bound thereunder until the lender under such Subordination Agreement becomes
bound by such Subordination Agreement. Tenant agrees that any such Mortgagee
shall have the right at any time to subordinate such Mortgage to this Lease on
such terms and subject to such conditions as such Mortgagee may deem appropriate
in its discretion. Landlord is hereby irrevocably vested with full power and
authority to subordinate this Lease to any Mortgage, and Tenant agrees upon
demand to execute such further instruments subordinating this Lease,
acknowledging the subordination of this Lease or attorning to the holder of any
such Mortgage as Landlord may request. Notwithstanding the foregoing, any such
subordination of this Lease shall be conditioned upon Tenant's receipt from the
Mortgagee of a nondisturbance agreement on terms reasonably acceptable to
Tenant. If any person shall succeed to all or part of Landlord's interests in
the Premises whether by purchase, foreclosure, deed in lieu of foreclosure,
power of sale, termination of lease or otherwise, and if and as so requested or
required by such successor-in-interest, Tenant shall, without charge, attorn to
such successor-in-interest. Tenant agrees that it will upon its initial
occupancy of the Premises and from time to time upon request by Landlord, within
five (5) business days of the date of such request, execute and deliver to such
persons as Landlord shall request an estoppel certificate or other similar
statement in recordable form certifying that (i) this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same is in
full force and effect as so modified), (ii) this Lease as so modified
constitutes the entire agreement between Landlord and Tenant with respect to the
Premises, (iii) the obligations of Tenant hereunder are valid and binding, (iv)
the dates to which Rent and other charges payable under this Lease have been
paid, (v) that no deposits or prepayments have been made under this Lease except
as specified herein, (vi) to the best of Tenant's knowledge, there exists no
breach, default, or event or condition which, with the giving of notice or the
passage of time or both, would constitute a breach or default under this Lease
(or if Tenant alleges a default stating the nature of such alleged default),
(vii) to the best of Tenant's knowledge, there are no existing claims, defenses
or offset against rental due or to become due hereunder, and (viii) such other
matters as Landlord shall reasonably require.
ARTICLE 33: ATTORNEYS' FEES
In the event that Landlord or Tenant should retain counsel and/or institute
any suit against the other for violation of or to enforce any of the covenants
or conditions of this Lease, or should either party institute any suit against
the other for violation of any of the covenants or conditions of this Lease, or
should either party intervene in any suit in which the other is a party to
enforce or protect its interest or rights hereunder, the prevailing party in any
such suit shall be entitled to all of its costs, expenses and reasonable fees of
its attorney(s) (if and to the extent permitted by law) in connection therewith.
ARTICLE 34: NOTICE
Whenever any demand, request, approval, consent or notice ("Notice") shall
or may be given to either of the parties by the other, each such Notice shall be
in writing and shall be sent by registered or certified mail with return receipt
requested, or sent by personal delivery or by overnight courier service (such as
Federal Express) at the respective addresses of the parties for notices as set
forth in Section 1(A)(12) of this Lease. Any Notice under this Lease delivered
by registered or certified mail shall be deemed to have been given, delivered,
received and effective on the earlier of (a) the third business day following
the day on which the same shall have been mailed with sufficient postage prepaid
or (b) the delivery date indicated on the return receipt.
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Notice sent by overnight courier service shall be deemed given, delivered,
received and effective upon the business day after such notice is delivered to
or picked up by the overnight courier service, and notice by personal delivery
shall be deemed given on the day received. Either party may, at any time, change
its Notice Address by giving the other party Notice stating the change and
setting forth the new address.
ARTICLE 35: LANDLORD'S LIEN
Landlord shall have all statutory lien rights for Rent.
ARTICLE 36: EXCEPTED RIGHTS
This Lease does not grant any rights to light or air over or about the
Building. Except as provided in Section 38(S), Landlord specifically excepts and
reserves to itself the use of any roofs, the exterior portions of the Premises,
all rights to the land and improvements below the improved floor level of the
Premises, the improvements and air rights above the Premises and the
improvements and air rights located outside the demising walls of the Premises,
and such areas within the Premises as are required for installation of utility
lines and other installations required to serve any occupants of the Building
and the right to maintain and repair the same, and no rights with respect
thereto are conferred upon Tenant unless otherwise specifically provided herein.
Landlord further reserves to itself the right from time to time to perform the
following, the cost of which shall be borne in accordance with the provisions
contained in Article 7 or elsewhere in this Lease: (a) to change the Building's
name (subject to the provisions of Article 12 above) or street address; (b) to
install, fix and maintain signs on the exterior and interior of the Building
(subject to the restriction on Landlord of naming the Building); (c) to
designate and approve window coverings; (d) to make any decorations,
alterations, additions, improvements to the Building, or any part thereof
(including the Premises) which Landlord shall desire, or deem necessary for the
safety, protection, preservation or improvement of the Building, or as Landlord
may be required to do by law, provided that Landlord shall use all reasonable
efforts to minimize interference with Tenant's business operations when
performing such functions; (e) to have access to the Premises to perform its
duties and obligations and to exercise its rights under this Lease (subject to
compliance with Tenant's security and limitation on access procedures as
described in Section 10(A)(7) above); (f) to retain at all times and to use
pass-keys to all locks within and into the Premises (subject to compliance with
Tenant's security and limitation on access procedures as described in Section
10(A)(7) above); (g) to approve the weight, size, or location of heavy
equipment, or articles in and about the Premises; (h) to close or restrict
access to the Building at all times other than Normal Business Hours, subject to
Tenant's right to admittance at all times under such regulations as Landlord may
reasonably prescribe from time to time, or to close (temporarily or permanently)
any of the entrances to the Building; (i) to change the arrangement and/or
location of entrances of passageways, doors and doorways, corridors, elevators,
stairs, toilets and public parts of the Building so long as it does not
unreasonably interfere with Tenant's access, ingress or egress to or from the
Premises; and (j) if Tenant has vacated the Premises during the last six (6)
months of the Lease Term, to perform additions, alterations and improvements to
the Premises in connection with a reletting or anticipated reletting thereof
without being responsible or liable for the value or preservation of any then
existing improvements to the Premises. Landlord, in accordance with Article 15
hereof, shall have the right to enter the Premises in connection with the
exercise of any of the rights set forth herein and such entry into the Premises
and the performance of any work therein shall not
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constitute a constructive eviction or entitle Tenant to any abatement or
reduction of Rent by reason thereof.
ARTICLE 37: SURRENDER OF PREMISES
At the expiration or earlier termination of this Lease or Tenant's right of
possession hereunder, Tenant shall remove all Tenant's Property from the
Premises, remove all Required Removables designated by Landlord at the time of
initial consent to Tenant's alterations and quit and surrender the Premises to
Landlord, broom clean, and in good order, condition and repair, ordinary wear
and tear and damage by fire and casualty excepted. If Tenant fails to remove any
of Tenant's Property within one (1) day after the termination of this Lease or
Tenant's right to possession hereunder, Landlord, at Tenant's sole cost and
expense, shall be entitled to remove and/or store such Tenant's Property and
Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay Landlord, upon demand, any and all
expenses caused by such removal and all storage charges against such property so
long as the same shall be in the possession of Landlord or under the control of
Landlord. In addition, if Tenant falls to remove any Tenant's Property from the
Premises or storage, as the case may be, within ten (10) days after written
notice from Landlord, Landlord, at its option, may deem all or any part of such
Tenant's Property to have been abandoned by Tenant and title thereof shall
immediately pass to Landlord.
ARTICLE 38: MISCELLANEOUS.
A. If any term or provision of this Lease, or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, arid each term and provision of
this Lease shall be valid and enforced to the fullest extent permitted by law.
This Lease represents the result of negotiations between Landlord and Tenant,
each of which has been (or has had opportunity to be) represented by counsel of
its own selection, and neither of which has acted under duress or compulsion,
whether legal, economic or otherwise. Consequently, Landlord and Tenant agree
that the language in all parts of the Lease shall in all cases be construed as a
whole according to its fair meaning and neither strictly for nor against
Landlord or Tenant.
B. Landlord agrees that Tenant may record a memorandum of this Lease,
provided the form thereof shall be subject to Landlord's reasonable prior
written approval.
C. This Lease and the rights and obligations of the parties hereto shall be
interpreted, construed, and enforced in accordance with the laws of the state of
Washington.
D. Events of "FORCE MAJEURE" shall include strikes, riots, acts of God,
shortages of labor or materials, war, governmental law, regulations or
restrictions and any other cause (other than financial ability) that is beyond
the reasonable control of Landlord. Whenever a period of time is herein
prescribed for the taking of any action by Landlord, Landlord shall not be
liable or responsible for, and there shall be excluded from the computation of
such period of time, any delays due to events of Force Majeure, except as
otherwise set forth in this Lease.
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E. Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations hereunder and in the Building and
Property referred to herein, and in such event and upon such transfer, following
assumption of this Lease by the transferee, Landlord shall be released from any
further obligations hereunder, and Tenant agrees to look solely to such
successor in interest of Landlord for the performance of such obligations.
F. Tenant hereby represents to Landlord that it has dealt directly with and
only with the Broker as a broker in connection with this Lease. Tenant agrees to
indemnify and hold Landlord and the Landlord Related Parties harmless from all
claims of any brokers other than the Broker claiming to have represented Tenant
in connection with this Lease. Landlord agrees to indemnify and hold Tenant and
the Tenant Related Parties harmless from all claims of the Broker and any
brokers claiming to have represented Landlord in connection with this Lease.
Landlord agrees to pay a brokerage commission to Broker in accordance with the
terms of a written commission agreement between Landlord and Broker.
G. Agency Disclosure. Leibsohn & Company, Inc. represents Tenant in
connection with this Lease. Landlord shall pay Leibsohn & Company a commission
of Four and no/100 Dollars ($4.00) per rentable square foot of the Initial
Premises, which commission shall be earned and paid one-half (1/2) upon
execution of this Lease and one-half (1/2) upon Tenant's occupancy of the
Premises. No commission shall be paid on any option or expansion space except
for expansion space with a Rent Commencement Date within the first six (6)
months of the commencement of the Initial Term.
H. Landlord and Tenant, by their execution of this Lease, each acknowledge
and agree that they have timely received a pamphlet on the law of real estate
agency as required under RCW 18.86.030(l)(f).
I. If there is more than one Tenant, or if the Tenant is comprised of more
than one person or entity, the obligations hereunder imposed upon Tenant shall
be joint and several obligations of all such parties. All notices, payments, and
agreements given or made by, with or to any one of such persons or entities
shall be deemed to have been given or made by, with or to all of them.
J. In the event Tenant is a corporation (including any form of professional
association), partnership (general or limited), or other form of organization
other than an individual (each such entity is individually referred to herein as
an "ORGANIZATIONAL ENTITY"), then Tenant hereby covenants, warrants and
represents: (1) that such individual is duly authorized to execute or attest and
deliver this Lease on behalf of Tenant in accordance with the organizational
documents of Tenant; (2) that this Lease is binding upon Tenant; (3) that Tenant
is duly organized and legally existing in the state of its organization, and is
qualified to do business in the state in which the Premises is located; and (4)
that the execution and delivery of this Lease by Tenant will not result in any
breach of, or constitute a default under any mortgage, deed of trust, lease,
loan, credit agreement, partnership agreement or other contract or instrument to
which Tenant is a party or by which Tenant may be bound. If Tenant is an
Organizational Entity, upon request, Tenant will, prior to the Commencement
Date, deliver to Landlord true and correct copies of an appropriate resolution
or consent of Tenant's board of directors or other appropriate governing body of
Tenant authorizing or ratifying the execution and delivery of this Lease, which
resolution or consent will be duly certified by an appropriate individual with
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authority to certify such documents, such as the secretary or assistant
secretary or the managing general partner of Tenant.
K. Tenant acknowledges that the financial capability of Tenant to perform
its obligations hereunder is material to Landlord and that Landlord would not
enter into this Lease but for its belief, based on its review of Tenant's
financial statements, that Tenant is capable of performing such financial
obligations. Tenant hereby represents, warrants and certifies to Landlord that
its financial statements previously furnished to Landlord were at the time given
true and correct in all material respects and that there have been no material
subsequent changes thereto as of the date of this Lease. At any time during the
Lease Term, Tenant shall provide Landlord, upon ten (10) days' prior written
notice from Landlord, with a current financial statement and financial
statements of the two (2) years prior to the current financial statement year
and such other information as Landlord or its Mortgagee may reasonably request
in order to create a "business profile" of Tenant and determine Tenant's ability
to fulfill its obligations under this Lease. Such statement shall be prepared in
accordance with the accounting principles consistently applied by Tenant in its
financial reporting, and, if such is the normal practice of Tenant, shall be
audited by an independent certified public accountant. All such financial
information shall be treated as confidential by Landlord and shall be disclosed
to third parties such as Mortgagees only as reasonably necessary and only with
direction to such third party to maintain the confidentiality of such
information.
L. Except as expressly otherwise herein provided, with respect to all
required acts of Tenant and Landlord, time is of the essence of this Lease. This
Lease shall create the relationship of Landlord and Tenant between the parties
hereto.
M. This Lease and the covenants and conditions herein contained shall inure
to the benefit of and be binding upon Landlord and Tenant and their respective
permitted successors and assigns,
N. Notwithstanding anything to the contrary contained in this Lease, the
expiration of the Lease Term, whether by lapse of time or otherwise, shall not
relieve Tenant from Tenant's obligations accruing prior to the expiration of the
Lease Term, and such obligations shall survive any such expiration or other
termination of the Lease Term.
0. The headings and titles to the paragraphs of this Lease are for
convenience only and shall have no affect upon the construction or
interpretation of any part hereof.
P. Landlord has delivered a copy of this Lease to Tenant for Tenant's
review only, and the delivery hereof does not constitute an offer to Tenant or
option. This Lease shall not be effective until an original of this Lease is
executed by both Landlord and Tenant.
Q. Quiet Enjoyment. Tenant shall, and may peacefully have, hold, and enjoy
the Premises, subject to the other terms of this Lease (and without interference
from any Mortgagee to whom this Lease is subordinated), provided that Tenant
pays the Rent herein recited to be paid by Tenant and performs all of Tenant's
covenants and agreements herein contained. This covenant and any and all other
covenants of Landlord shall be binding upon Landlord and its successors only
during its or their respective periods of ownership of the Landlord's interest
hereunder.
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R. Americans With Disabilities Act. Landlord will insure that at the
Commencement Date the Common Areas of the Building, and the shell and core,
shall be in compliance with the Americans With Disabilities Act. Tenant shall be
responsible for seeing that the Tenant Improvements are designed in accordance
with the Americans With Disabilities Act.
S. Roof Space Dish/Antenna.
1. Tenant shall have the right, without rental cost, to lease space on
the roof of the Building for the purpose of installing (in accordance with
Section 13(B) of the Lease), operating and maintaining one or more dish, antenna
or other communication device approved by the Landlord (collectively the
"Dish/Antenna"). The exact location of the space on the roof to be leased by
Tenant shall be designated by Landlord and shall not exceed Tenant's
proportionate share of the roof space suitable for the placement of such
communication devices based on the portion of the Building leased by Tenant
hereunder (the "Roof Space"). Landlord reserves the right to relocate the Roof
Space as reasonably necessary during the Lease Term. Landlord's designation
shall take into account Tenant's use of the Dish/Antenna. Notwithstanding the
foregoing, Tenant's right to install the Dish/Antenna shall be subject to the
approval rights of Landlord and Landlord's architect and/or engineer with
respect to the plans and specifications of the Dish/Antenna, the manner in which
the Dish/Antenna is attached to the roof of the Building and the manner in which
any cables are run to and from the Dish/Antenna. The precise specifications and
a general description of the Dish/Antenna along with all documents Landlord
reasonably requires to review the installation of the Dish/Antenna (the "Plans
and Specifications") shall be submitted to Landlord for Landlord's written
approval no later than twenty (20) days before Tenant commences to install the
Dish/Antenna. Tenant shall be solely responsible for obtaining all necessary
governmental and regulatory approvals and for the cost of installing, operating,
maintaining and removing the Dish/Antenna. Tenant shall notify Landlord upon
completion of the installation of the Dish/Antenna. If Landlord determines that
the Dish/Antenna equipment does not comply with the approved Plans and
Specifications, that the Building has been damaged during installation of the
Dish/Antenna or that the installation was defective, Landlord shall notify
Tenant of any noncompliance or detected problems and Tenant immediately shall
cure the defects. If the Tenant fails to immediately cure the defects, Tenant
shall pay to Landlord upon demand the cost, as reasonably determined by
Landlord, of correcting any defects and repairing any damage to the Building
caused by such installation. If at any time Landlord, in its sole discretion,
deems it necessary, Tenant shall provide and install, at Tenant's sole cost and
expense, appropriate aesthetic screening, reasonably satisfactory to Landlord,
for the Dish/Antenna (the "Aesthetic Screening").
2. Landlord agrees that Tenant, upon reasonable prior written notice
to Landlord, shall have access to the roof of the Building and the Roof Space
for the purpose of installing, maintaining, repairing and removing the
Dish/Antenna, the appurtenances and the Aesthetic Screening, if any, all of
which shall be performed by Tenant or Tenant's authorized representative or
contractors, which shall be approved by Landlord, at Tenant's sole cost and
risk. It is agreed, however, that only authorized engineers, employees or
properly authorized contractors of Tenant, FCC inspectors, or persons under
their direct supervision will be permitted to have access to the roof of the
Building and the Roof Space. Tenant further agrees to exercise firm control over
the people requiring access to the roof of the Building and the Roof Space in
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order to keep to a minimum the number of people having access to the roof of
the Building and the Roof Space and the frequency of their visits.
3. It is further understood and agreed that the installation,
maintenance, operation and removal of the Dish/Antenna, the appurtenances and
the Aesthetic Screening, if any, will in no way damage the Building or the roof
thereof, or interfere with the use of the Building and roof by Landlord. Tenant
agrees to be responsible for any damage caused to the roof or any other part of
the Building, which may be caused by Tenant or any of its agents or
representatives.
4. Tenant agrees to install only equipment of types and frequencies
which will not cause unreasonable interference to Landlord or existing tenants
of the Building. In the event Tenant's equipment causes such interference,
Tenant will change the frequency on which it transmits and/or receives and take
any other steps necessary to eliminate the interference. If said interference
cannot be eliminated within a reasonable period of time, in the judgment of
Landlord, then Tenant agrees to remove the Dish/Antenna from the Roof Space.
5. Tenant shall, at its sole cost and expense, and at its sole risk,
install, operate and maintain the Dish/Antenna in a good and workmanlike manner,
and in compliance with all Building, electric, communication, and safety codes,
ordinances, standards, regulations and requirements, now in effect or hereafter
promulgated, of the Federal Government, including, without limitation, the
Federal Communications Commission (the "FCC"), the Federal Aviation
Administration ("FAA") or any successor agency of either the FCC or FAA having
jurisdiction over radio or telecommunications, and of the state, city and county
in which the Building is located. Under this Lease, the Landlord and its agents
assume no responsibility for the licensing, operation and/or maintenance of
Tenant's equipment. Tenant has the responsibility of carrying out the terms of
its FCC license in all respects. The Dish/Antenna shall be connected to
Landlord's power supply in strict compliance with all applicable Building,
electrical, fire and safety codes. Neither Landlord nor its agents shall be
liable to Tenant for any stoppages or shortages of electrical power furnished to
the Dish/Antenna or the Roof Space because of any act, omission or requirement
of the public utility serving the Building, or the act or omission of any other
tenant, invitee or licensee or their respective agents, employees or
contractors, or for any other cause beyond the reasonable control of Landlord,
and Tenant shall not be entitled to any rental abatement for any such stoppage
or shortage of electrical power. Neither Landlord nor its agents shall have any
responsibility or liability for the conduct or safety of any of Tenant's
representatives, repair, maintenance and engineering personnel while in or on
any part of the Building or the Roof Space.
6. The Dish/Antenna, the appurtenances and the Aesthetic Screening, if
any, shall remain the personal property of Tenant, and shall be removed by
Tenant at its own expense at the expiration or earlier termination of this Lease
or Tenant's right to possession hereunder. Tenant shall repair any damage caused
by such removal, including the patching of any holes to match, as closely as
possible, the color surrounding the area where the equipment and appurtenances
were attached. Tenant agrees to maintain all of the Tenant's Dish/Antenna
equipment placed on or about the roof or in any other part of the Building in
proper operating condition and maintain same in satisfactory condition as to
appearance, in Landlord's sole discretion, and satisfactory condition as to
safety, in Landlord's reasonable discretion. Such maintenance and operation
shall be performed in a manner to avoid any interference with any other tenants
or Landlord. Tenant agrees that at all times during the Lease Term, it will keep
the
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roof of the Building and the Roof Space free of all trash or waste materials
produced by Tenant or Tenant's agents, employees or contractors.
7. In light of the specialized nature of the Dish/Antenna, Tenant
shall be permitted to utilize the services of its choice for installation,
operation, removal and repair of the Dish/Antenna, the appurtenances and the
Aesthetic Screening, if any, subject to the reasonable approval of Landlord.
Notwithstanding the foregoing, Tenant must provide Landlord with prior written
notice of any such installation, removal or repair and coordinate such work with
Landlord in order to avoid voiding or otherwise adversely affecting any
warranties granted to Landlord with respect to the roof. If necessary, Tenant,
at its sole cost and expense, shall retain any contractor having a then existing
warranty in effect on the roof to perform such work (to the extent that it
involves the roof), or, at Tenant's option, to perform such work in conjunction
with Tenant's contractor. In the event the Landlord contemplates roof repairs
that could affect Tenant's Dish/Antenna, or which may result in an interruption
of the Tenant's telecommunication service, Landlord shall formally notify Tenant
at least thirty (30) days in advance (except in cases of an emergency) prior to
the commencement of such contemplated work in order to allow Tenant to make
other arrangements for such service.
8. Tenant shall not allow any provider of telecommunication, video,
data or related services ("Communication Services") to locate any equipment on
the roof of the Building or in the Roof Space for any purpose whatsoever, nor
may Tenant use the Roof Space and/or Dish/Antenna to provide Communication
Services to an unaffiliated tenant, occupant or licensee of another building, or
to facilitate the provision of Communication Services on behalf of another
Communication Services provider to an unaffiliated tenant, occupant or licensee
of the Building or any other building.
9. Tenant acknowledges that Landlord may at some time establish a
standard license agreement (the "License Agreement") with respect to the use of
roof space by tenants of the Building. Tenant, upon request of Landlord, shall
enter into such License Agreement with Landlord provided that such agreement is
reasonably acceptable to Tenant and does not materially alter the rights of
Tenant hereunder with respect to the Roof Space.
10. Tenant specifically acknowledges and agrees that the terms and
conditions of Article 18 of the Lease (Indemnity and Waiver of Claims) shall
apply with full force and effect to the Roof Space and any other portions of the
roof accessed or utilized by Tenant, its representatives, agents, employees or
contractors.
11. If Tenant defaults under any of the terms and conditions of this
Section or the Lease, and Tenant fails to cure said default within the time
allowed by Article 25 of the Lease, Landlord shall be permitted to exercise all
remedies provided under the terms of the Lease, including removing the
Dish/Antenna, the appurtenances and the Aesthetic Screening, if any, and
restoring the Building and the Roof Space to the condition that existed prior to
the installation of the Dish/Antenna, tile appurtenances and the Aesthetic
Screening, if any. If Landlord removes the Dish/Antenna, the appurtenances and
the Aesthetic Screening, if any, as a result of an uncured default, Tenant shall
be liable for all costs and expenses Landlord incurs in removing the
Dish/Antenna, the appurtenances and the Aesthetic Screening, if any, and
repairing any damage to the Building, the roof of the Building and the Roof
Space caused by the installation, operation or maintenance of the Dish/Antenna,
the appurtenances, and the Aesthetic Screening, if any.
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12. Tenant shall be allowed to install fiber optics and related
equipment in the Building for Tenant's personal use, the design, location, and
operating characteristics of which shall be subject to Landlord's reasonable
approval.
T. Environmental.
(1) Hazardous Materials. Tenant shall not bring on to the Property any
hazardous substances or materials except those used for normal office purposes,
and Tenant shall not (either with or without negligence) cause or permit the
escape, disposal or release of any biologically or chemically active or other
hazardous substances, or materials in violation of any applicable environmental
laws. Tenant shall not knowingly allow the storage or use of such substances or
materials in any manner not sanctioned by law or by the highest standards
prevailing in the industry for the storage and use of such substances of
materials, nor allow to be brought into the Project any such materials or
substances except to use for general office purposes and the other permitted
uses in the ordinary course of Tenant's business. Without limitation, hazardous
substances and materials shall include those described in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., any applicable state or local laws and the
regulations adopted under these acts. If any governmental agency or lender (in
its reasonable judgment) shall ever require testing to ascertain whether or not
there has been any release of hazardous materials and as a result of such
testing it is determined that Tenant has violated any of the terms and
conditions of this section, then, in addition to any other rights and remedies
available hereunder or at law or in equity, the reasonable costs of such testing
shall be reimbursed by Tenant to Landlord upon demand as additional charges. In
addition, Tenant shall execute affidavits, representations and the like from
time to time at Landlord's request concealing Tenant's best knowledge and belief
regarding the presence of hazardous substances or materials on the Premises. In
all events, Tenant shall indemnify Landlord in the manner elsewhere provided in
this Lease from any release of hazardous materials on the Premises caused by
Tenant or persons acting under Tenant. The within covenants shall survive the
expiration or earlier termination of the Lease Term.
(2) Landlord's Representation. To the actual knowledge of Landlord,
neither the Building nor the Property contains any hazardous substances or
materials in excess of levels permitted by applicable laws.
U. Storage Space. A limited amount of storage space, on a first-come
first-serve basis is available in the Building garage. If Available, Tenant may
lease up to 2,000 square feet of storage space. The rate for storage space shall
initially be $12.00 per usable square foot per year, increasing each year by the
increase in the Index as defined in Section 1(A)6.
V. Consent. Landlord and Tenant confirm that in all cases where consent or
approval shall be required of either Tenant or Landlord pursuant to the Lease,
the granting of such consent shall not be unreasonably withheld or delayed by
the party from whom such consent is required, unless otherwise specified in the
Lease.
W. Year 2000 Compliant. Landlord agrees to use commercially reasonable
efforts to: (i) investigate with its management and vendors the ability of the
computer time clocks and software which operate and/or control the Building
equipment and tenant ▇▇▇▇▇▇▇▇ to continue to
50
50
operate without unreasonable interruption or disruption after January 1, 2000
(the "Millennium Assessment"); and (ii) undertake commercially reasonable
measures to address any potential problems identified by the Millennium
Assessment so as to avoid, to the extent reasonably possible, unreasonable
interruption and/or disruption to the operation of the Building equipment and
tenant ▇▇▇▇▇▇▇▇. The Millennium Assessment shall include an assessment of the
Building elevators, mechanical equipment, life safety systems, invoice billing
and any other devices or software which are necessary for the operation of the
Building in accordance with the provisions of the Lease. Tenant and Landlord
acknowledge that, notwithstanding Landlord's commercially reasonable efforts to
prevent the same, problems may occur in connection with the operation of the
Building's equipment and systems as a result of the Millennium and that such
problems, if any, will not excuse Tenant from fulfilling its duties and
obligations under the Lease, render Landlord liable for damages of any type or
nature or be considered a Landlord default under the Lease.
ARTICLE 39: ENTIRE AGREEMENT
This Lease Agreement, including the following Exhibits:
Exhibit A - Legal Description and Outline and Location of Premises
Exhibit A-1 - Legal Description of Property
Exhibit B - Rules and Regulations
Exhibit C - Commencement Letter
Exhibit D - Landlord's Work
Exhibit D-1 - Shell and Core and Landlord Provided Tenant Improvements
Exhibit D-2 - Plans and Specifications for Building
Exhibit E - Signage Criteria
Exhibit F - Tenant Equipment List and Electrical/HVAC Related
Specifications
Exhibit G - Subordination Agreement, Acknowledgement of Lease
Assignment, Estoppel, Attornment and Non-Disturbance
Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter of this Lease and supersedes all prior agreements and
understandings between the parties related to the Premises, including all lease
proposals, letters of intent and similar documents. TENANT EXPRESSLY
ACKNOWLEDGES AND AGREES THAT LANDLORD HAS NOT MADE AND IS NOT MAKING, AND
TENANT, IN EXECUTING AND DELIVERING THIS LEASE, IS NOT RELYING UPON, ANY
WARRANTIES, REPRESENTATIONS, PROMISES OR STATEMENTS, EXCEPT TO THE EXTENT THAT
THE SAME ARE EXPRESSLY SET FORTH IN THIS LEASE. ALL UNDERSTANDINGS AND
AGREEMENTS HERETOFORE MADE BETWEEN THE PARTIES ARE MERGED IN THIS LEASE WHICH
ALONE FULLY AND COMPLETELY EXPRESSES THE AGREEMENT OF THE PARTIES, NEITHER PARTY
RELYING UPON ANY STATEMENT OR REPRESENTATION NOT EMBODIED IN THIS LEASE. THIS
LEASE MAY BE MODIFIED ONLY BY A WRITTEN AGREEMENT SIGNED BY LANDLORD AND TENANT
51
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
LANDLORD: WRC SUNSET NORTH LLC, a Washington
limited liability company
By: EOP SUNSET NORTH, L.L.C., a Delaware
limited liability company, its manager
By: EOP OPERATING LIMITED PARTNERSHIP,
a Delaware limited partnership,
its sole member
By: EQUITY OFFICE PROPERTIES TRUST,
a Maryland real estate
investment trust, its managing
general partner
By: [Signature Illegible]
----------------------------
Its: SVP
---------------------------
By: ▇▇▇▇▇▇ RUNSTAD ASSOCIATED LIMITED
PARTNERSHIP, a Washington limited
partnership its manager
By: ▇▇▇▇▇▇ RUNSTAD & COMPANY, a
Washington corporation, its sole
general partner
By: [Signature Illegible]
----------------------------
Its: [Illegible]
---------------------------
TENANT: BSQUARE Corporation, a Washington
corporation
By: [Signature Illegible]
--------------------------------
Its: CEO
--------------------------------
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52
LANDLORD ACKNOWLEDGMENT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I, the undersigned, a Notary Public, in and for the County and State
aforesaid, do hereby certify that ▇▇▇ ▇. ▇▇▇▇▇▇, personally known to me to be
the Executive V.P. of ▇▇▇▇▇▇ Runstad & Company, the general partner of ▇▇▇▇▇▇
Runstad Associates Limited Partnership, a Member of WRC SUNSET NORTH LLC, a
Washington limited liability company, the Landlord in the foregoing instrument,
and personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that as such officer of said entity being authorized so to do, he executed the
foregoing instrument on behalf of said entity, by subscribing the name of such
entity by himself as such officer, as a free and voluntary act, and as the free
and voluntary act and deed of said entity under the foregoing instrument for the
uses and purposes therein set forth.
GIVEN under my hand and official seal this 15th day of January, 1999.
Notary Public: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Residing at: Seattle
---------------------------
My Commission expires: 2-28-01
-----------------
[SEAL]
STATE OF WASHINGTON )
) ss. SEE ATTACHED NOTARY PAGE
COUNTY OF KING )
GIVEN under my hand and official seal this _____ day of January, 1999.
Notary Public:
-------------------------
Printed Name:
--------------------------
Residing at:
---------------------------
My Commission expires:
-----------------
53
53
Attachment to Page 53
of Lease Agreement between
WRC Sunset North LLC and BSquare Corporation
STATE OF COLORADO )
) ss
County of Arapahoe )
I, the undersigned, a Notary Public, in and for the County and State
aforesaid, do hereby certify that ▇▇▇ ▇. ▇▇▇▇▇, personally known to me to be the
Senior Vice President of Equity Office Properties Trust, the general partner of
EOP Operating Limited Partnership, the sole member of EOP Sunset North, L.L.C.,
the manager of WRC Sunset North LLC, a Washington limited liability company, the
Landlord in the foregoing instrument, and personally known to me to be the same
person whose name is subscribed to the foregoing instrument, appeared before me
this day in person and acknowledged that as such office of said entity being
authorized so to do, he executed the foregoing instrument on behalf of said
entity, by subscribing the name of such entity by himself as such officer, as a
free and voluntary act, and as the free and voluntary act and deed of said
entity under the foregoing instrument for the uses and purposes therein set
forth.
GIVEN under my hand and official seal this 26th day of January 1999.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
[SEAL] ----------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, Notary Public
Residing at: Castle Rock, Colorado
My Commission expires: January 14, 2001
54
TENANT ACKNOWLEDGMENT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this the 15th day of January, 1999, before me a Notary Public duly
authorized in and for the said County in the State aforesaid to take
acknowledgments personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be CEO of
BSQUARE CORPORATION the Tenant in the foregoing instrument, and acknowledged
that as such officer, being authorized so to do, (s)he executed the foregoing
instrument on behalf of said corporation by subscribing the name of such
corporation by himself/herself as such officer and caused the corporate seal of
said corporation to be affixed thereto, as a free and voluntary act, and as the
free and voluntary act of said corporation, for the uses and purposes therein
set forth.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Residing at: Bellevue, WA
---------------------------
My Commission expires: 6-6-2002
-----------------
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EXHIBIT A
PREMISES
This Exhibit is attached to and made a part of the Lease dated as of
January 15, 1999, by and between WRC SUNSET NORTH LLC, a Washington limited
liability company ("Landlord") and BSQUARE CORPORATION, a Washington corporation
("Tenant") for space on the third (3rd), fourth (4th) and fifth (5th) floors in
Building Four (4) located at the Northeast corner of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
Southeast 32nd Street, Bellevue, King County, Washington. The legal description
for the property upon which the Premises is located is set forth on Exhibit A-1,
attached hereto and incorporated herein by this reference. The Premises is
outlined on Exhibit A-2 and A-3 attached hereto and incorporated herein by this
reference.
Exhibit A
56
EXHIBIT A-1
LEGAL DESCRIPTION OF PROPERTY
This Exhibit is attached to and made a part of the Lease dated as of
January 15, 1999, by and between WRC SUNSET NORTH LLC, a Washington limited
liability company ("Landlord") and BSQUARE CORPORATION, a Washington corporation
("Tenant") for space on the third (3rd), fourth (4th) and fifth (5th) floors in
Building Four (4) located at the Northeast corner of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
Southeast 32nd Street, Bellevue, King County, Washington.
▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇-▇▇ CORPORATE CAMPUS, A BINDING
SITE PLAN, AS PER PLAT RECORDED IN VOLUME 154 OF PLATS, PAGES 77
THROUGH 80, RECORDS OF KING COUNTY;
EXCEPT ANY PORTION CONVEYED FOR 139TH AVE. S.E., BY DEED RECORDED
UNDER RECORDING NO. 9101280422;
TOGETHER WITH AN UNDIVIDED 60% INTEREST IN ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇
▇▇▇▇;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN
INSTRUMENT RECORDED UNDER RECORDING NO. 9601091040;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN
INSTRUMENT RECORDED UNDER RECORDING NO. 9107260572;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN
INSTRUMENT RECORDED UNDER RECORDING NO. ▇▇▇▇▇▇▇▇▇▇;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇.
Exhibit A1-1
57
EXHIBIT A-2
Floors 3 and 4
[FLOOR PLAN]
58
EXHIBIT A-3
Floor 5
[FLOOR PLAN]
59
EXHIBIT B
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking garage associated therewith (if any), the
Property and the appurtenances thereto:
1. Sidewalks, doorways, vestibules, halls, stairways and other similar
areas shall not be obstructed by Tenant or used by Tenant for any purpose other
than ingress and egress to and from the Premises. No rubbish, litter, trash, or
material of any nature shall be placed, emptied, or thrown in those areas.
2. Plumbing fixtures and appliances shall be used only for the purposes for
which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or placed therein. Damage resulting to any such fixtures or
appliances from misuse by Tenant or its agents, employees or invitees, shall be
paid for by Tenant, and Landlord shall not in any case be responsible therefor.
3. No signs, advertisements or notices shall be painted or affixed on or to
any windows, doors or other parts of the Building, except those of such color,
size, style and in such places as shall be first approved in writing by
Landlord. No nails, hooks or screws shall be driven or inserted into any part of
the Premises or Building except for normal decoration, nor shall any part of the
Building be defaced by Tenant.
4. Landlord shall provide and maintain in the first floor (main lobby) of
the Building an alphabetical directory board listing all Tenants, and no other
directory shall be permitted unless previously consented to by Landlord in
writing.
5. Tenant will install proprietary locks on the doors to the perimeter of
the Premises and provide a reasonable number of keys to those doors to the
Landlord. Tenant shall have the right to place any additional locks on any
interior doors of Premises without notice to or approval of Landlord, and
without providing Landlord keys thereto; provided that Landlord shall be
provided a reasonable number of keys to those interior doors in the Premises
controlling access to Building mechanical, electrical and fire protection
systems and shall be provided access at all times for emergency and maintenance
purposes. All keys shall be returned to Landlord at the expiration or earlier
termination of this Lease.
6. All contractors, contractor's representatives, and installation
technicians performing work in the Building shall be subject to Landlord's prior
approval, which shall not be unreasonably withheld or delayed, and shall be
required to comply with Landlord's standard rules, regulations, policies and
procedures, as the same may be revised from time to time. Tenant shall be solely
responsible for complying with all applicable laws, codes and ordinances
pursuant to which said work shall be performed.
7. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of any merchandise or materials which require the
use of elevators, stairways, lobby areas, or loading dock areas, shall be
restricted to hours reasonably designated by Landlord. If approved by Landlord,
such activity shall be under the supervision of Landlord and performed in the
manner stated by Landlord. Landlord may reasonably prohibit any article,
Exhibit B-1
60
equipment or any other item from being brought into the Building. Tenant is to
assume all risk for damage to articles moved and injury to any persons resulting
from such activity. If any equipment, property, and/or personnel of Landlord or
of any other tenant is damaged or injured as a result of or in connection with
such activity, Tenant shall be solely liable for any and all damage or loss
resulting therefrom.
8. Landlord shall have the power to prescribe the weight and position of
safes and other heavy equipment or items, which in all cases shall not in the
opinion of Landlord exceed acceptable floor loading and weight distribution
requirements. All damage done to the Building by the installation, maintenance,
operation, existence or removal of any property of Tenant shall be repaired at
the expense of Tenant.
9. Corridor doors, when not in use, shall be kept closed.
10. Tenant shall not: (1) make or permit any improper, objectionable or
unpleasant noises or odors in the Building, or otherwise interfere in any way
with other tenants or persons having business with them; (2) solicit business or
distribute, or cause to be distributed, in any portion of the Building any
handbills, promotional materials or other advertising; or (3) conduct or permit
any other activities in the Building that might constitute a nuisance.
11. No animals, except seeing eye dogs, shall be brought into or kept in,
on or about the Premises.
12. No inflammable, explosive or dangerous fluid or substance (other than
normal office supplies and cleaning compounds) shall be used or kept by Tenant
in the Premises or Building. Tenant shall not, without Landlord's prior written
consent and except for normal office supplies and cleaning compounds, use,
store, install, spill, remove, release or dispose of within or about the
Premises or any other portion of the Property, any asbestos-containing materials
or any solid, liquid or gaseous material now or hereafter considered toxic or
hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other
applicable environmental law which may now or hereafter be in effect. If
Landlord does give written consent to Tenant pursuant to the foregoing sentence,
Tenant shall comply with all applicable laws, rules and regulations pertaining
to and governing such use by Tenant, and shall remain liable for all costs of
cleanup or removal in connection therewith.
13. Tenant shall not use or occupy the Premises in any manner or for any
purpose which would injure the reputation or impair the present or future value
of the Premises or the Building; without limiting the foregoing, Tenant shall
not use or permit the Premises or any portion thereof to be used for lodging,
sleeping or for any illegal purpose.
14. Tenant shall not take any action which would knowingly violate
Landlord's labor contracts affecting the Building or which would cause any work
stoppage, picketing, labor disruption or dispute, or any interference with the
business of Landlord or any other tenant or occupant of the Building or with the
rights and privileges of any person lawfully in the Building. Tenant shall take
any actions necessary to resolve any such work stoppage, picketing, labor
disruption, dispute or interference and shall have pickets removed and, at the
request of Landlord, immediately terminate at any time any construction work
being performed in the Premises giving rise to such labor problems, until such
time as Landlord shall have given its written consent for such work to resume.
Tenant shall have no claim for damages of any nature
Exhibit B-2
61
against Landlord or any of the Landlord Related Parties in connection therewith,
nor shall the date of the commencement of the Term be extended as a result
thereof.
15. Tenant shall utilize the termite and pest extermination service
designated by Landlord to control termites and pests in the Premises. Except as
included in Basic Costs, Tenant shall bear the cost and expense of such
extermination services.
16. Tenant shall not install, operate or maintain in the Premises or in any
other area of the Building, any electrical equipment which does not bear the U/L
(Underwriters Laboratories) seal of approval, or which would overload the
electrical system or any part thereof beyond its capacity for proper, efficient
and safe operation as determined by Landlord, taking into consideration the
overall electrical system and the present and future requirements therefor in
the Building. Tenant shall not furnish any cooling or heating to the Premises,
including, without limitation, the use of any electronic or gas heating devices,
without Landlord's prior written consent. Tenant shall not use more than its
proportionate share of telephone lines available to service the Building.
17. Tenant shall not operate or permit to be operated on the Premises any
coin or token operated vending machine or similar device (including, without
limitation, telephones, lockers, toilets, scales, amusement devices and machines
for sale of beverages, foods, candy, cigarettes or other goods), except for
those vending machines or similar devices which are for the sole and exclusive
use of Tenant's employees.
18. Bicycles and other vehicles are not permitted inside or on the walkways
outside the Building, except in those areas specifically designated by Landlord
for such purposes. Landlord shall provide in the common areas of the Building a
bicycle rack.
19. Landlord may from time to time adopt appropriate systems and procedures
for the security or safety of the Building, its occupants, entry and use, or its
contents. Tenant, Tenant's agents, employees, contractors, guests and invitees
shall comply with Landlord's reasonable requirements relative thereto.
20. Landlord shall have the right to prohibit publicity by Tenant that in
Landlord's opinion may tend to impair the reputation of the Building or its
desirability for Landlord or other tenants. Upon written notice from Landlord,
Tenant will refrain from and/or discontinue such publicity immediately.
21. Tenant shall carry out Tenant's permitted repair, maintenance,
alterations, and improvements in the Premises only during times reasonably
agreed to in advance by Landlord and in a manner which will not interfere with
the rights of other tenants in the Building.
22. Canvassing, soliciting, and peddling in or about the Building is
prohibited. Tenant shall cooperate and use its best efforts to prevent the same.
23. At no time shall Tenant permit or shall Tenant's agents, employees,
contractors, guests, or invitees smoke in any common area of the Building,
unless such common area has been declared a designated smoking area by Landlord
(and Landlord agrees to designate one or more dry smoking area(s) in the common
areas of the Building or the garage), or to allow any
Exhibit B-3
62
smoke from the Premises to emanate into the common areas or any other tenant's
premises (other than from Landlord's designated smoking areas).
24. Tenant shall observe Landlord's rules with respect to maintaining
standard window coverings at all windows in the Premises so that the Building
presents a uniform exterior appearance. Tenant shall ensure that to the extent
reasonably practicable, window coverings are closed on all windows in the
Premises while they are exposed to the direct rays of the sun.
25. Tenant shall not permit the process of deliveries to or from the
Premises to occur in a manner which will unreasonably interfere with the use by
any other tenant of its premises or of any common areas, any pedestrian use of
such area, or any use which is inconsistent with good business practice.
Landlord will make available reasonable areas and accesses for deliveries to and
from the Premises and Building.
26. The work of cleaning personnel shall not be hindered by Tenant after
6:00 p.m. windows, doors and fixtures may be cleaned at any time with reasonable
prior notice to Tenant. Tenant shall provide adequate waste and rubbish
receptacles necessary to prevent unreasonable hardship to Landlord regarding
cleaning service.
Exhibit B-4
63
EXHIBIT C
COMMENCEMENT LETTER
Date
Tenant
Address
Re: Commencement Letter with respect to that certain Lease dated
_____________________ by and between WRC SUNSET NORTH LLC as Landlord, and
BSQUARE CORPORATION, a Washington corporation as Tenant, for approximately
ninety-four thousand one hundred eighty-two (94,182) square feet of Rentable
Area on the third (3rd), fourth (4th) and fifth (5th) floors of the Building
located at the Northeast corner of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Southeast 32nd
Street, Bellevue, King County, Washington.
Dear :
In accordance with the terms and conditions of the above referenced Lease,
Tenant hereby accepts possession of the Premises and agrees as follows:
1. The Commencement Date of the Lease is _________________________________;
2. The Termination Date of the Lease is _________________________________.
Please acknowledge your acceptance of possession and agreement to the terms set
forth above by signing all three (3) copies of this Commencement Letter in the
space provided and returning two (2) fully executed copies of the same to my
attention.
Sincerely,
Property Manager
Agreed and Accepted:
Tenant:
By:
Name:
Title:
Date:
Exhibit C
64
EXHIBIT D
WORK LETTER AGREEMENT
The parties to this Work Letter Agreement ("AGREEMENT") are WRC SUNSET
NORTH LLC, a Washington limited liability company ("LANDLORD") and BSQUARE
CORPORATION, a Washington corporation ("TENANT"). Landlord and Tenant are
parties to that certain Lease Agreement dated as of January 15, 1999 (the "
LEASE") for space on the third (3rd), fourth (4th) and fifth (5th) floors in
Building Four (4) of the Sunset North Corporate Campus located at the Northeast
corner of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Southeast 32nd Street, Bellevue, King
County, Washington. The Premises are more particularly described in the Lease.
Defined terms used in this Agreement shall have the same meanings given
them in the Lease.
I. IMPROVEMENTS PROVIDED BY LANDLORD: Landlord agrees to provide improvements to
the Building and the Premises pursuant to the attached Exhibit 1, Base Building
Condition, and plans and specifications listed on Exhibit 2.
II. IMPROVEMENTS BY TENANT/REIMBURSEMENT BY LANDLORD: Design and construction of
all improvements in the Initial Premises beyond those listed in Exhibit 1 shall
be provided at Tenant's expense, provided Landlord shall pay the Allowance
defined below. Landlord shall provide Tenant with an allowance of Thirty and
no/100 Dollars ($30.00) (tenant improvements allowance) plus Zero and 15/100
Dollars ($0.15) (space plan allowance) per square foot of usable area in the
Initial Premises (the "ALLOWANCE"). The Allowance may be applied to costs of
designing and constructing the Tenant Improvements, Tenant's signage costs and
the acquisition and installation of Tenant's furniture, fixture and equipment.
The Allowance shall be paid as provided in Paragraph 6B of the Lease. Any unused
portion of the Allowance may be taken as a credit against Rent or may be applied
to additional build-out, wiring or cabling costs, as Tenant may elect. Any costs
of constructing Tenant Improvements in excess of the Allowance shall be borne
solely by Tenant.
Landlord shall obtain all permits and government approvals and assume
specific responsibility for delivery of the Premises as defined in the Lease and
this Agreement, provided Tenant shall have met the drawing delivery dates
herein. If Shell and Core Contractor is not initially selected to construct the
Initial Tenant Improvements, then Landlord shall manage the bidding of tenant
improvements to at least three (3) firms acceptable to. Landlord, one of which
shall be the Shell and Core Contractor. The contractor selected by Tenant to
construct the Tenant Improvements shall be hereinafter known as the "TENANT
IMPROVEMENT CONTRACTOR."
III. BUILDING STANDARD IMPROVEMENTS: Tenant shall use Building Standard
lighting, window coverings, doors, relites, hardware, ceiling treatment and
heating, ventilating and air conditioning distribution equipment and controls.
IV. DESIGN OF TENANT IMPROVEMENTS: Tenant, at Tenant's cost and with the
approval of Landlord, has retained JPC, Incorporated ("TENANT'S OFFICE PLANNER")
to prepare the necessary drawings for Basic Plans and supply the information
necessary to complete the Working Drawings and Engineering Drawings referred to
in Section IV(B) of this Agreement for construction of the tenant improvements
in Tenant's area. All Tenant's Plans shall be subject to
Exhibit D - Page 1
65
approval of Landlord (not to be unreasonably withheld or delayed) in accordance
with Section IV(C) of this Agreement, and Landlord agrees to respond in writing
with approval or comments within five (5) business days after receipt of each
component of Tenant's Plans.
Tenant's Office Planner shall ensure that the work shown on Tenant's Plans
is compatible with the basic Building Plans and that necessary basic Building
modifications are included in Tenant's Plans. Such modifications shall be
subject to Landlord approval. If such approved basic Building modifications are
made subsequent to completion of the shell and core documents or Landlord's
Architect reasonably charges Landlord for such changes, then such modifications
shall be subject to Landlord's approval and the cost of the changes to the
documents as well as any increased shell and core construction costs shall be
paid by Tenant.
On or before the indicated dates, Tenant shall supply Landlord with one (1)
reproducible copy and five (5) black line prints of the following Tenant Plans
with respect to the Tenant Improvements in the Initial Premises and in any other
portion of the Premises constructed at the same time as those in the Initial
Premises:
A. BASIC PLANS DELIVERY DATE: JANUARY 22, 1999
The Basic Plans due on this date shall be signed by Tenant and
include:
Architectural Floor Plans: These shall be fully dimensioned floor
plans showing partition layout and identifying each room with a number and each
door with a number. The Basic Plans must clearly identify and locate equipment
requiring plumbing or other special mechanical systems, area(s) subject to
above-normal floor loads, special openings in the floor, and other major or
special features.
B. WORKING DRAWINGS DELIVERY DATE: FEBRUARY 22, 1999
On this date and at Tenant's expense, Tenant's Office Planner shall
produce four (4) sets of Full Working Drawings for construction from the Basic
Plans using the Pin Bar or CADD System, which system shall be approved by
Landlord for compatibility with the other Building drawings. The four (4) sets
of Working Drawings due on this date shall be sufficient to obtain all necessary
permits, shall be signed by the Tenant and shall include all items in the Basic
Plans referenced in Section IV(A) above plus the following additional
information:
(1) Electrical and Telephone Outlets: Locate all power and telephone
requirements: Dimension the position from a corner and give height above
concrete slab for all critically located outlets. Identify all dedicated
circuits and identify all power outlets greater than 120 volts. For the
equipment used in these outlets which require dedicated circuits and/or which
require greater than 120 volts, identify the type of equipment, the
manufacturer's name and the manufacturer's model number, and submit a brochure
for each piece of equipment. Also identify the manufacturer's name of the phone
system to be used and the power requirements, size, and location of its
processing equipment.
(2) Reflected Ceiling Plan: Lighting layout showing location and type
of all Building Standard and special lighting fixtures.
(3) Furniture Layout: Layout showing furniture location so that
Landlord's engineer can review the location of all light fixtures.
Exhibit D - Page 2
66
The Allowance shall be applied to the cost of the engineers retained by Tenant's
Office Planner. The Allowance shall also be applied to any necessary review of
the Engineering Drawings by Landlord's shell and core engineers: electrical
(▇▇▇▇▇▇ Electric), mechanical (▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇) and structural plans (KPFF)
(Engineering Drawings) for Tenant's improvements based on the signed Working
Drawings.
C. FINAL PLANS REVIEW DATE: MARCH 26, 1999
On this date, Tenant's Office Planner shall deliver to Landlord and
Tenant for review and approval four (4) complete sets of Final Plans which shall
be sufficient for purposes of obtaining construction bids and shall incorporate
the Working Drawings referenced in Section IV(B) above, plus the following
additional information:
(1) Millwork Details: These drawings shall be in final form with
Tenant's Office Planner's title block along the right border of the drawing, and
shall include construction details of all cabinets, paneling, trim, bookcases,
and door and jamb details for non-Building Standard doors and jambs.
(2) Keying Schedules and Hardware Information: This information shall
be in final form and include a preliminary Keying Schedule indicating which
doors are locked, plus an "X" on the side of the door where the key will be
inserted if a keyed door. Complete specifications for all non-Building Standard
hardware will also be provided. The final keying schedule will be completed by
March 26, 1999.
(3) Room Finish and Color Schedule: This information shall be in final
form and include locations and specifications for all wall finishes, floor
covering and base for each room.
(4) Construction Notes and Specifications: Complete specifications for
every item included except those specified by the Landlord.
D. FINAL PLANS DELIVERY DATE: APRIL 1, 1999
The four (4) sets of Final Plans approved by Landlord and Tenant and
due on this date shall include all the Final Plans referenced in Section IV(C)
above. Final Plans are to be signed by Tenant and delivered to Landlord by the
Final Plans Delivery Date. Landlord shall return one (1) signed set to Tenant
for Tenant's records. Landlord will incorporate or submit Engineering Drawings
with Tenant's Final Plans for transmittal to. the Shell and Core Contractor.
Tenant shall be responsible for delays and additional costs in
completion of the Tenant Improvements incurred as a result of changes made to
any of Tenant's Plans after the specified Plan Delivery Date, delays caused by
Tenant's failure to comply with the Plan Delivery Dates, Tenant's failure to
provide adequate specifications or information for the completion of Tenant's
Plans, or by delays caused by Tenant's specification of special materials; but
only to the extent any of the foregoing delays or prevents critical path work or
adversely affects completion.
V. CONSTRUCTION OF TENANT IMPROVEMENTS
A. AUTHORIZATION TO PROCEED. Upon completion of Tenant's Final Plans, the
Final Plans will be submitted to Shell and Core Contractor and, if not initially
selected, then to at least two (2) other contractors acceptable to Landlord and
Tenant for pricing. Those contractors shall
Exhibit D - Page 3
67
have at least two (2) weeks to provide their bid proposal with respect to
completion of the Initial Tenant Improvement Work pursuant to the Final Plans.
The final construction contract to be entered into between Landlord and the
Tenant Improvement Contractor (including, but not limited to, the guaranteed
maximum price to be contained therein) shall also be subject to Tenant's review
and approval, such approval not to be unreasonably withheld. Landlord and Tenant
shall review all pricing documentation received from the bidding tenant
improvement contractors, including sub bids, quantities, and unit prices. Within
ten (10) days of receipt of such prices and prior to execution of the Initial
Tenant Improvements construction contract, Tenant shall give Landlord written
authorization to complete the Premises in accordance with such Final Plans and
naming the Tenant Improvement Contractor. Tenant may in such authorization
delete any or all items of extra cost; however if the Shell and Core Contractor
is selected, then if Landlord deems these changes to be extensive, at its
option, Landlord may within three (3) business days of Tenant's written
authorization refuse to accept the authorization to proceed until all changes
have been incorporated in the Final Plans signed by Tenant and written
acceptance of the revised price has been received by Landlord from Tenant. In
the absence of such written authorization to proceed and if Landlord's
contractor is selected, then Landlord shall not be obligated to commence work on
the Premises and Tenant shall be responsible for any costs due to any resulting
delay in completion of the Premises and as provided in Section 3(A) of the
Lease.
B. PAYMENTS. Refer to Section 6(B) from the body of the Lease.
C. FINAL PLANS AND MODIFICATIONS. If Tenant shall request any change after
the Final Plans are submitted, Tenant shall request such change in writing to
Landlord and such request shall be accompanied by all plans and specifications
necessary to show and explain changes from the approved Final Plans. After
receiving this information, Landlord shall give Tenant within five (5) business
days a written price for the cost of engineering design services and an estimate
of construction costs to incorporate the change in Tenant's Final Plans. If
Tenant approves such price in writing within five (5) business days, Tenant
shall within five (5) business days have such Final Plans changes made to
engineering drawings and Tenant shall have changes made to other Final Plan
design documents. Within three (3) business days after completion of such
changes in the Final Plans, Landlord shall provide Tenant a written breakdown of
the final costs, if any, which shall be chargeable or credited to Tenant for
such change, addition or deletion and any impact such changes shall have on the
schedule. Landlord shall not charge for its services in relation to any such
modifications unless such modifications constitute material change to Tenants'
Final Plans. Apart from any fee due with respect to such material changes,
Landlord shall not charge Tenant a construction management fee for Landlord's
work on the Tenant Improvements. If Tenant wishes to proceed with such changes,
Tenant shall within five (5) business days to notify Landlord in writing. In the
absence of such notice, Landlord shall proceed in accordance with the previously
approved Final Plans before such change, addition or deletion was requested. In
accordance with Section 3(A) of the Lease, Tenant shall be responsible for any
resulting delay in completion of the Premises due to modification of Final
Plans. Tenant shall also be responsible for any demolition work required as a
result of the change.
D. IMPROVEMENTS CONSTRUCTED BY TENANT. If any work is to
be performed in connection with the Initial Tenant Improvements on the Premises
by Tenant or Tenant's contractor:
(1) Such work shall proceed upon Landlord's written approval (not to
be unreasonably withheld) of (i) Tenant's contractor, (ii) general liability and
property damage insurance satisfactory to Landlord carried by Tenant's
contractor, which insurance shall not be required to exceed levels carried by
Shell and Core Contractor, (iii) detailed plans and
Exhibit D - Page 4
68
specifications for such work; and (iv) amount of general conditions directly
attributable to work performed by Tenant's contractor and approved in advance by
Tenant to be paid by Tenant to Landlord for the services still provided by Shell
and Core Contractor or Tenant Improvement Contractor.
(2) All work shall be done in conformity with a valid building permit
when required, a copy of which shall be furnished for Landlord before such work
is commenced, and in any case, all such work shall be performed in accordance
with all applicable governmental regulations. Notwithstanding any failure by
Landlord to object to any such work, Landlord shall have no responsibility for
Tenant's failure to meet all applicable regulations.
(3) All work by Tenant or Tenant's contractor shall be done with union
labor in accordance with all union labor agreements applicable to the trades
being employed, unless otherwise agreed to in writing by Landlord.
(4) All work by Tenant or Tenant's contractor shall be scheduled
through Landlord or, with Landlord's approval, directly with the Shell and Core
Contractor or Tenant Improvement Contractor. Landlord shall make best efforts to
accommodate work by Tenant or Tenant's contractor during times requested.
(5) Tenant or Tenant's contractor shall arrange for necessary utility,
hoisting and elevator service with the Shell and Core Contractor or the Tenant
Improvement Contractor and shall pay such reasonable charges for such services
as may be charged by the Shell and Core Contractor or the Tenant Improvement
Contractor. This will be included in the general conditions of Subsection
(1)(iv) above.
(6) Tenant shall promptly reimburse Landlord for costs incurred by
Landlord due to faulty work done by Tenant or its contractors, or by reason of
any delays caused by such work, or by reason of inadequate clean-up. Tenant
shall receive notice from Landlord and a reasonable opportunity to cure damages
prior to Landlord undertaking corrective action.
(7) Prior to commencement of any work on the Premises by Tenant or
Tenant's contractor, Tenant or Tenant's contractor shall enter into an indemnity
agreement and a lien priority agreement satisfactory to Landlord indemnifying
and holding harmless Landlord, any Mortgagees, and the Shell and Core Contractor
or the Tenant Improvement Contractor for any liability, losses or damages
directly or indirectly from lien claims affecting the land, the Building or the
Premises arising out of Tenant's or Tenant's contractor's work or that of
subcontractor or suppliers, and subordinating any such liens to the liens of
construction and permanent financing for the Building.
(8) Landlord shall have the right to post a notice or notices in
conspicuous places in or about the Premises announcing its non-responsibility
for the work being performed therein.
E. TENANT'S ENTRY TO PREMISES. Tenant's entry to the Premises for any
purpose, including without limitation, inspection or performance of Tenant
Construction by Tenant's agents, prior to the Commencement Date as specified in
Section 3(A) of the Lease shall be scheduled in advance with Landlord and shall
be subject to all the terms and conditions of the Lease, except the payment of
Rent and Additional Rent. Tenant's entry shall mean entry by Tenant, its
officers, contractors, Tenant's Office Planner, licensees, agents, servants,
employees, guests, invitees, or visitors. Landlord will make reasonable efforts
to accommodate Tenant's
Exhibit D - Page 5
69
request for access to the Premises at all times. Tenant will supply Landlord
with a pre-approved list of individuals who will be allowed to have access to
the Premises prior to the Commencement Date.
F. TENANT'S TELEPHONE AND COMPUTER/DATA SERVICE. Tenant is responsible for
Tenant's telephone service, computer and data service, obtaining any applicable
permits, and related cabling. Tenant shall select and coordinate installation of
such communication and information systems with the Landlord pursuant to item
V(D)(4) of this Agreement.
IN WITNESS WHEREOF, Landlord and Tenant have executed this exhibit as of the
15th day of January, 1999.
LANDLORD: WRC SUNSET NORTH LLC, a Washington limited
liability company
By: EOP SUNSET NORTH, L.L.C., a Delaware
limited liability company, its manager
By: EOP OPERATING LIMITED PARTNERSHIP, a
Delaware limited partnership, its
sole member
By: EQUITY OFFICE PROPERTIES TRUST, a
Maryland real estate investment
trust, its managing general
partner
By:
-----------------------------
Its:
-----------------------------
By: ▇▇▇▇▇▇ RUNSTAD ASSOCIATED LIMITED
PARTNERSHIP, a Washington limited
partnership its manager
By: ▇▇▇▇▇▇ RUNSTAD & COMPANY, a
Washington corporation, its sole
general partner
By:
---------------------------------
Its:
---------------------------------
TENANT: BSQUARE CORPORATION, a Washington corporation
By:
---------------------------------
Its:
--------------------------------
Exhibit D - Page 6
70
EXHIBIT D-1
SUNSET NORTH
Shell and Core and Landlord Provided
Tenant Improvements
Landlord shall provide bare shell and core floor ready for tenant improvements
as follows:
Building Standard restrooms completed.
Building Standard drinking fountains installed.
DRYWALL. Drywall installed around the core areas only and firetaped (excludes
drywall at the perimeter of the building and columns).
MAIN LOBBY. The main lobby serving the building is completed.
ELEVATOR LOBBY. All finishes are part of tenant improvements (except Building
Standard elevator doors, frames, and buttons).
LIFE SAFETY. Life safety includes fire sprinkler riser, code minimum tenant
distribution, central life safety system with Conduit, and wire to floor.
Dropping of heads, detectors, strobe lights, and speakers are part of
tenant improvements.
MECHANICAL. Mechanical includes the main system with medium pressure duct (the
main loop) serving the floor and return air systems. VAV boxes and low
pressure ductwork from main loop is a part of tenant improvements. The base
building will include a central automated system pursuant to which Tenant
may activate after hours HVAC from within the Premises, but Tenant's in
Premises link to that system will be part of tenant improvements.
ELECTRICAL. Electrical includes panels in the electrical closets based on a
design load as set forth on Exhibit F attached to the Lease. The main
system includes expansion capabilities for additional panels installed
during tenant improvements.
PERIMETER FINISHES. Perimeter finishes include the exterior of the building,
support structure, and insulation.
CEILING GRID. Ceiling grid and panels are excluded and considered tenant
improvements.
ELEVATORS AND STAIRWELLS. Elevators and stairwells (with Building Standard
finishes) serving the floor are completed.
Exhibit ▇-▇ - ▇▇▇▇ ▇
▇▇
▇▇▇▇▇▇▇ ▇-▇
LIST OF BUILDING PLANS AND SPECIFICATIONS
Architectural Plans prepared by ▇▇▇▇▇▇ Gunsal ▇▇▇▇▇▇ Partnership dated 8/10/98;
Civil Plans prepared by KPFF dated 8/10/98;
Landscape Plans prepared by The ▇▇▇▇▇▇ Partnership dated 8/10/98;
Structural Plans prepared by KPFF dated 8/10/98;
HVAC Plans prepared by ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ dated 8/10/98;
Plumbing Plans prepared by ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ dated 8/10/98;
Electrical Plans prepared by ▇▇▇▇▇▇ Electric dated 8/10/98;
Fire Protection Plans prepared by Cosco dated 8/10/98.
Exhibit D-2 - Page 1
72
EXHIBIT E
SIGNAGE CRITERIA
This Exhibit is attached to and made a part of the Lease dated as of
January 15, 1999, by and between WRC SUNSET NORTH LLC, a Washington limited
liability company ("Landlord") and BSQUARE CORPORATION, a Washington corporation
("Tenant") for space on the third (3rd), fourth (4th) and fifth (5th) floors in
Building Four (4) located at the Northeast corner of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
Southeast 32nd Street, Bellevue, King County, Washington.
GENERAL
Tenant will have the right to place one sign on the west face of the Building.
Tenant will have the first choice of a location.
The components of all signs including size, design, and color and materials
shall be approved by Landlord and shall conform to the specific requirements
identified below. Tenant shall submit to the Landlord a preliminary drawing
showing the sign located on the Building's entire elevation and a dimensioned
drawing of the entire sign describing the size and character of the proposed
letters together with samples of all colors and materials prior to entering into
a final contract with a sign company. In no case shall a sign be fabricated or
installed without Tenant receiving the Landlord's approval and obtaining
Landlord's signature on a shop drawing(s) prior to fabrication.
BUILDING SIGNAGE CRITERIA
Shop drawings shall be fully dimensioned and indicate location, type of
lettering, illumination (if applicable), all colors and materials, and
specifications for the entire assembly, including details describing how the
sign will be mounted to the Building.
The sign shall consist of the Tenant's trade name and/or logo if the logo is a
part of Tenant's common trademark. The wording shall not include the product or
service sold except as part of the trade name.
The letter style and color may be proposed by the individual tenants.
Signs shall be internally illuminated and constructed of individual
letters/numerals with a translucent face and opaque back.
Maximum height shall be 24" for letters and logos.
Signage is limited to a maximum length of 16 lineal feet of signage, including
letter characters and symbols.
Exhibit E-1
73
EXHIBIT E (CONT'D.)
SIGNAGE CRITERIA
All portions of any sign must be within 2'0" x 16'0" area centered horizontally
between specified columns. The lower edge of the letters shall all align 3"
above the lower edge of the panel. See Exhibit A attached.
No moving, flashing, or audible signs will be permitted.
The sign, including its raceway and letters, shall not project more than 13"
from the face of the panel to which it is mounted (8" for the raceway and 5" for
the letter). There shall be no overhanging signs or signage perpendicular to the
Building.
No signs shall be attached to the Building in other than the designated area.
There will be no exposed labels bearing the name of the sign contractor,
fabricator, or underwriter's approval.
All costs associated with the design, fabrication, installation, and maintenance
shall be paid by the Tenant.
Signs shall comply with all governing building and electrical codes and
regulations, and shall bear the UL label. Cost of obtaining all permits,
approvals, etc. required for installation shall be the responsibility of the
Tenant.
Electrical service to approved illuminated sign shall originate from the
Tenant's electrical panel.
Tenant shall pay the additional electrical cost.
Exhibit ▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
TENANT'S ELECTRICAL EQUIPMENT LIST
The electricity and the heating, ventilation and air-conditioning ("HVAC")
available to the Premises will be sufficient to support an average of two (2)
standard personal computer central processing units and two (2) monitors per
office, based on offices with an average size of 200 rentable square feet evenly
distributed throughout the Premises. Central computer rooms and laboratories are
NOT included in these calculations. Supporting calculations are as follows:
1. Based on the foregoing, Tenant's electrical loads have been calculated as
follows:
-1.2 ▇▇▇▇▇ per square foot for the lighting load for electrical (code
requirement).
-5.0 ▇▇▇▇▇ per square foot electrical load for tenant equipment (as defined
above).
6.2 ▇▇▇▇▇ total electrical capacity needed.
2. Based on the foregoing, Tenant's HVAC loads have been calculated as
follows:
-1.2 ▇▇▇▇▇ per square foot for the lighting load for HVAC (code
requirement).
-2.1 ▇▇▇▇▇ per square foot for the HVAC load for tenant equipment (as
defined above).
3.3 ▇▇▇▇▇ total HVAC capacity needed
3. The base building utilities design shall provide the following electrical
capacities:
-1.2 ▇▇▇▇▇ per square foot is provided to meet maximum allowed by
Washington State Energy Code.
-6.0 ▇▇▇▇▇ per square foot for tenant equipment loads.
7.2 ▇▇▇▇▇* total electrical capacity to be provided
*NOTE: An additional 4.0 ▇▇▇▇▇ per square foot will be provided to power
the building HVAC System.
4. The base building utilities design shall provide the following HVAC
capacities:
-1.2 ▇▇▇▇▇ per square foot is provided to meet maximum allowed by
Washington State Energy Code.
-2.8 ▇▇▇▇▇ Per square foot for tenant equipment loads.
4.0 ▇▇▇▇▇ total HVAC capacity to be provided.
Exhibit F-1
75
In summary, based on the above-described level of electrical usage, the
base building will provide a surplus electrical load of 1.0 ▇▇▇▇▇ per square
foot (7.2-6.2) and a Surplus HVAC load of 0.7 ▇▇▇▇▇ per square foot (4.0-3.3).
Exhibit F-2
76
EXHIBIT G
FORM OF SUBORDINATION AGREEMENT
RETURN NAME AND ADDRESS:
▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION
Real Estate Group, MAC 6101-121
1300 S.W. 5th Avenue, l2th Floor
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇
SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT,
ESTOPPEL, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
GRANTORS: (1) WRC SUNSET NORTH LLC; (2) BSQUARE CORPORATION
GRANTEE: ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
LEGAL LOTS 6 THROUGH 10 AND AN UNDIVIDED INTEREST IN ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇-▇▇ CORPORATE CAMPUS, VOLUME 154 OF
PLATS, PAGES 77-80, KING COUNTY, WASHINGTON
Additional legal description is on Exhibit A of this
document.
ASSESSOR'S 813530-0060-02
PROPERTY TAX 813530-0070-00
PARCEL 813530-0080-08
ACCOUNT 813530-0090-06
NUMBER(S): 813530-0100-04
813530-0110-02
▇▇▇▇▇▇-▇▇▇▇-▇▇
Exhibit G-1
77
SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT,
ESTOPPEL, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
(Lease To Deed of Trust)
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR LEASE BECOMING SUBJECT
TO AND OF LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST
(DEFINED BELOW).
THIS SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT, ESTOPPEL,
ATTORNMENT AND NON-DISTURBANCE AGREEMENT ("Agreement") is made as of January 15,
1999, by and between WRC SUNSET NORTH LLC, a Washington limited liability
company ("Owner"), BSQUARE CORPORATION, a Washington corporation ("Lessee") and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ("Lender").
R E C I T A L S
1. Pursuant to the terms and provisions of a lease dated as of January 15, 1999
("Lease") Owner, as "Lessor", granted to Lessee a leasehold estate in and to a
portion of the property described on Exhibit A attached hereto and incorporated
herein by this reference (which property, together with all improvements now or
hereafter located on the property, is defined as the "Property").
2. Owner has executed, or proposes to execute, a deed of trust with absolute
assignment of leases and rents, security agreement and fixture filing ("Deed of
Trust") securing, among other things, a promissory note ("Note") in the
principal sum of SIXTY EIGHT MILLION DOLLARS ($68,000,000), dated September 1,
1998, in favor of Lender, which Note is payable with interest and upon the terms
and conditions described therein ("Loan"). The Deed of Trust is to be recorded
concurrently herewith.
3. As a condition to making the Loan secured by the Deed of Trust, Lender
requires that the Deed of Trust be, and at all times remain, a lien on the
Property, prior and superior to all the rights of Lessee under the Lease on the
terms set forth in this document.
4. Owner, Lessee and Lender desire to enter into the agreements set forth in
this document.
Exhibit G-2
78
NOW THEREFORE, for valuable consideration, Owner, Lessee and Lender hereby
agree as follows:
6 SUBORDINATION. Owner and Lessee hereby agree that:
6.1 Prior Lien. The Deed of Trust securing the Note in favor of Lender, and
any modifications, renewals or extensions thereof, shall be and at all times
remain a lien on the Property prior and superior to the Lease;
6.2 Subordination. Lender has advised Owner that Lender would not make the
Loan without this agreement to subordinate; and
6.3 Whole Agreement. This Agreement shall be the whole agreement and only
agreement with regard to the subordination of the Lease to the lien of the Deed
of Trust and shall supersede and cancel, but only insofar as would affect the
priority between the Deed of Trust and the Lease, any prior agreements as to
such subordination, including, without limitation, those provisions, if any,
contained in the Lease which provide for the subordination of the Lease to a
deed or deeds of trust or to a mortgage or mortgages.
AND FURTHER, Lessee declares, agrees and acknowledges for the benefit of
Lender, that:
6.4 Use of Proceeds. Lender, in making disbursements pursuant to the
Note, the Deed of Trust or any loan agreements with respect to the Property, is
under no obligation or duty to, nor has Lender represented that it will, see to
the application of such proceeds by the person or persons to whom Lender
disburses such proceeds, and any application or use of such proceeds for
purposes other than those provided for in such agreement or agreements shall not
defeat this agreement to subordinate in whole or in part;
6.5 Subordination. Lessee intentionally and unconditionally subordinates
all of Lessee's right, title and interest in and to the Property to the lien of
the Deed of Trust and understands that in reliance upon, and in consideration
of, this subordination, specific loans and advances are being and will be made
by Lender and, as part and parcel thereof, specific monetary and other
obligations are being and will be entered into which would not be made or
entered into but for said reliance upon this subordination.
7. ASSIGNMENT. Lessee acknowledges and consents to the assignment of the Lease
by Owner in favor of Lender.
8. ESTOPPEL. Lessee acknowledges and represents that:
8.1 Lease Effective. The Lease has been duly executed and delivered by
Lessee and, subject to the terms and conditions thereof, the Lease is in full
force and effect, the obligations of Lessee thereunder are valid and binding and
there have been no modifications or additions to the Lease, written or oral;
8.2 No Default. To the best of Lessee's knowledge, as of the date hereof:
(i) there exists no breach, default, or event or condition which, with the
giving of notice or the passage of
Exhibit G-3
79
time or both, would constitute a breach or default under the Lease; and (ii)
there are no existing claims, defense's or offsets against rental due or to
become due under the Lease;
8.3. Entire Agreement. The Lease constitutes the entire agreement between
Lessor and Lessee with respect to the Property and Lessee claims no rights with
respect to the Property other than as set forth in the Lease; and
8.4 No Prepaid Rent. No deposits or prepayments of rent have been made in
connection with the Lease, except as follows: (if none, state "None") NONE.
9. ADDITIONAL AGREEMENTS. Lessee covenants and agrees that, during all such
times as Lender is the Beneficiary under the Deed of Trust:
9.1 Modification, Termination and Cancellation. Lessee will not consent to
any modification, amendment, termination or cancellation of the Lease (in whole
or in part) except to the extent expressly permitted by the terms of the Lease
or as a result of default of Owner pursuant to the Lease without Lender's prior
written consent and will not make any payment to Owner in consideration of any
modification, termination or cancellation of the Lease (in whole or in part)
except to the extent expressly permitted by the terms of the Lease without
Lender's prior written consent;
9.2 Notice of Default. Lessee will notify Lender in writing concurrently
with any notice given to Owner of any default by Owner under the Lease, and
Lessee agrees that Lender has the right (but not the obligation) to cure any
breach or default specified in such notice within the time periods set forth in
the Lease;
9.3 No Advance Rents. Lessee will make no payments or prepayments of rent
more than one (1) month in advance of the time when the same become due under
the Lease; and
9.4 Assignment of Rents. Upon receipt by Lessee of written notice from
Lender that Lender has elected to terminate the license granted to Owner to
collect rents, as provided in the Deed of Trust, and directing the payment of
rents by Lessee to Lender, Lessee shall comply with such direction to pay and
shall not be required to determine whether Owner is in default under the Loan
and/or the Deed of Trust, and Owner hereby so directs and authorizes Lessee to
make such payments upon receipt of such notice from Lender.
Notwithstanding the foregoing, if Lessee after notice from Lender, is
uncertain in Lessee's sole discretion, as to whether payments are to be made to
Owner or to Lender, Lessee may deposit the payments in an interpleader action
with the Superior Court for King County, State of Washington and interplead
Owner and Lender therein, provided Lessee shall not so deposit such funds in an
interpleader action if (i) Lender has had a receiver appointed for the Property
by a court with appropriate jurisdiction and Lessee has received written notice
of such appointment with direction by the court to pay rent to such receiver;
(ii) a court with appropriate jurisdiction has issued an order directing such
payments to be made to Lender, and Lessee has received a copy of such order; or
(iii) Lessee receives written evidence of Owner's concurrence with the payments
of such amounts to Lender.
Exhibit G-4
80
10. ATTORNMENT. Lessee agrees for the benefit of Lender (including for this
purpose any transferee of Lender or any transferee of Owner's title in and to
the Property by Lender's exercise of the remedy of sale by foreclosure under the
Deed of Trust), and Lender agrees, that following transfer of title to the
Property to Lender by exercise of Lender's remedy of sale by foreclosure under
the Deed of Trust and assumption of the Lease by Lender (subject to the same
limitations on personal liability contained in Section 27 of the Lease) with
respect to obligations of the Lessor to be performed under the Lease after the
date of transfer of title of the Property to Lender:
10.1 Payment of Rent. Lessee shall pay to Lender all rental payments
required to be made by Lessee pursuant to the terms of the Lease for the
duration of the team of the Lease;
10.2 Continuation of Performance. Lessee shall be bound to Lender in
accordance with all of the provisions of the Lease for the balance of the term
thereof, and Lessee hereby attorns to Lender as its landlord, such attornment to
be effective and self-operative without the execution of any further instrument
immediately upon Lender succeeding to Owner's interest in the Lease and giving
written notice thereof to Lessee;
10.3 No Offset. Lender shall not be liable for, nor subject to, any offsets
or defenses which Lessee may have by reason of any act or omission of Owner
under the Lease prior to the date of transfer of title to the Property to
Lender, nor for the return of any sums which Lessee may have paid to Owner under
the Lease as and for security deposits, advance rentals or otherwise, except to
the extent that such sums are actually delivered by Owner to Lender or Lender
otherwise has received credit therefor. Notwithstanding the foregoing provisions
of this Section 10.3, (i) nothing in this Section 10.3 shall create a right of
offset under the Lease that does not otherwise exist; and (ii) Tenant may
enforce the offset rights granted to Tenant in Section 3(A) of the Lease against
Lender provided (A) Tenant drivers to Lender a copy of Tenant's notice to
Landlord stating that certain punchlist items have not been timely completed,
and a copy of Tenant's written demand for payment of the cost of Tenant's
completion of such items, both of which notices are required under Section 3(A)
of the Lease and shall be given in accordance with Section 9.2 of this
Agreement; and (B) Tenant promptly exercises such offset rights once those
offset rights have accrued; and
10.4 Subsequent Transfer. Lender, by succeeding to the interest of Owner
under the Lease, shall become obligated to perform the agreements and covenants
of Owner thereunder with respect to those agreements and covenants first
becoming due after Lender succeeds to the interest of Owner, and, upon any
further transfer of Owner's interest by Lender, all of such obligations shall
terminate as to Lender with respect to obligations first becoming due after the
date of transfer by Lender.
11. NON-DISTURBANCE. In the event of a foreclosure under the Deed of Trust, so
long as there shall then exist no breach, default, or event of default on the
part of Lessee under the Lease beyond any applicable cure periods stated in the
Lease, Lender agrees for itself and its successors and assigns that the
leasehold interest of Lessee under the Lease shall not be extinguished or
terminated by reason of such foreclosure, but rather the Lease shall continue in
full force and effect and Lender shall recognize and accept Lessee as tenant
under the Lease subject to the terms and provisions of the Lease.
Exhibit ▇-▇
▇▇
▇▇. MISCELLANEOUS.
12.1 Heirs, Successors, Assigns and Transferees. The covenants herein shall
be binding upon, and inure to the benefit of, the heirs, successors and assigns
of the parties hereto; and
12.2 Notices. All notices or other communications required or permitted to
be given pursuant to the provisions hereof shall be deemed served upon delivery
or, if mailed, upon the first to occur of receipt or the expiration of three (3)
days after deposit in United States Postal Service, certified mail, postage
prepaid and addressed to the address of Owner, Lessee or Lender appearing below:
"OWNER" "LENDER"
WRC SUNSET NORTH LLC ▇▇▇▇▇ FARGO BANK, NATIONAL
c/o Wright Runstad & Company ASSOCIATION
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Group, MAC 6101-121
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇
Loan No.
"LESSEE"
BSQUARE CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
provided, however, any party shall have the right to change its address for
notice hereunder by the giving of written notice thereof to the other party in
the manner set forth in this Agreement; and
12.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute and be construed as one and the same instrument; and
12.4 Paragraph Headings. Paragraph headings in this Agreement are for
convenience only and are not to be construed as part of this Agreement or in any
way limiting the provisions hereof.
12.5 INCORPORATION. Exhibit A is attached hereto and incorporated herein by
this reference.
Exhibit G-6
82
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH
ALLOWS THE OWNER TO OBTAIN A LOAN, THE PROCEEDS OF WHICH MAY
BE EXPENDED FOR PURPOSES OTHER THAN THE IMPROVEMENT OF THE
PROPERTY. IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF
THIS AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS
WITH RESPECT HERETO.
"OWNER"
WRC SUNSET NORTH LLC, a Washington
limited liability company
By: EOP SUNSET NORTH, L.L.C., a Delaware
limited liability company, its manager
By: EOP OPERATING LIMITED PARTNERSHIP, a
Delaware limited partnership, its
sole member
By: EQUITY OFFICE PROPERTIES TRUST, a
Maryland real estate investment
trust, its managing general
partner
By:
------------------------------
Its:
--------------------------
By: ▇▇▇▇▇▇ RUNSTAD ASSOCIATED LIMITED
PARTNERSHIP, a Washington limited
partnership its manager
By: ▇▇▇▇▇▇ RUNSTAD & COMPANY, a
Washington corporation, its sole
general partner
By:
------------------------------
Its:
--------------------------
Exhibit G-7
83
"LENDER"
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
By:
---------------------------------
Its:
-----------------------------
"LESSEE"
BSQUARE, CORPORATION, a Washington
corporation
By:
---------------------------------
Its:
-----------------------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I, the undersigned, a Notary Public, in and for the County and State
aforesaid, do hereby certify that ____________________________, personally known
to me to be the _______________ of ▇▇▇▇▇▇ Runstad & Company, the general partner
of ▇▇▇▇▇▇ Runstad Associates Limited Partnership, a Member of WRC SUNSET NORTH
LLC, a Washington limited liability company, the Owner in the foregoing
instrument, and personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that as such officer of said entity being authorized so to do,
he executed the foregoing instrument on behalf of said entity, by subscribing
the name of such entity by himself as such officer, as a free and voluntary act,
and as the free and voluntary act and deed of said entity under the foregoing
instrument for the uses and purposes therein set forth.
GIVEN under my hand and official seat this ______ day of January, 1999.
Notary Public:
-------------------------
Printed Name:
--------------------------
Residing at:
---------------------------
My Commission expires:
-----------------
Exhibit ▇-▇
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.
COUNTY OF KING )
I, the undersigned, a Notary Public, in and for the County and State
aforesaid, do hereby certify that ____________________________, personally known
to me to be the _______________ of Equity Office Properties Trust, the general
partner of EOP Operating Limited Partnership, the sole member of EOP Sunset
North, L.L.C., a Member of WRC SUNSET NORTH LLC, a Washington limited liability
company, the Owner in the foregoing instrument, and personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person and acknowledged that as such officer of said
entity being authorized so to do, he executed the foregoing instrument on behalf
of said entity, by subscribing the name of such entity by himself as such
officer, as a free and voluntary act, and as the free and voluntary act and deed
of said entity under the foregoing instrument for the uses and purposes therein
set forth.
GIVEN under my hand and official seal this ______ day of January, 1999.
Notary Public:
-------------------------
Printed Name:
--------------------------
Residing at:
---------------------------
My Commission expires:
-----------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this the _____ day of January, 1999, before me a Notary Public duly
authorized in and for the said County in the State aforesaid to take
acknowledgments personally appeared ________________ known to me to be
________________ of ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION the Lender in the
foregoing instrument, and acknowledged that as such officer, being authorized so
to do, (s)he executed the foregoing instrument on behalf of said corporation by
subscribing the name of such corporation by himself/herself as such, as a free
and voluntary act, and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public:
-------------------------
Printed Name:
--------------------------
Residing at:
---------------------------
My Commission expires:
-----------------
Exhibit ▇-▇
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.
COUNTY OF KING )
On this _____ the day of January, 1999, before me a Notary Public duly
authorized in and for the said County in the State aforesaid to take
acknowledgments personally appeared ________________ known to me to be
________________ of BSQUARE CORPORATION the Lessee in the foregoing instrument,
and acknowledged that as such officer, being authorized so to do, (s)he executed
the foregoing instrument on behalf of said corporation by subscribing the name
of such corporation by himself/herself as such, as a free and voluntary act, and
as the free and voluntary act of said corporation, for the uses and purposes
therein set forth.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public:
-------------------------
Printed Name:
--------------------------
Residing at:
---------------------------
My Commission expires:
-----------------
Exhibit G-10
86
EXHIBIT A
Loan No. _____________
DESCRIPTION OF PROPERTY
EXHIBIT A to Subordination Agreement; Acknowledgment of Lease Assignment,
Estoppel, Attornment and Non-Disturbance Agreement dated as of January 15, 1999,
executed by WRC SUNSET NORTH LLC, a Washington limited liability company as
"Owner", BSQUARE CORPORATION, a Washington corporation, as "Lessee", and ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION, as "Lender".
All that certain real property located in the County of King, State of
Washington, described as follows:
▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇-▇▇ CORPORATE CAMPUS, A BINDING
SITE PLAN, AS PER PLAT RECORDED IN VOLUME 154 OF PLATS, PAGES 77
THROUGH 80, RECORDS OF KING COUNTY;
EXCEPT ANY PORTION CONVEYED FOR 139TH AVE. S.E., BY DEED RECORDED
UNDER RECORDING NO. 9101280422;
TOGETHER WITH AN UNDIVIDED 60% INTEREST IN ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇
▇▇▇▇;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN
INSTRUMENT RECORDED UNDER RECORDING NO. 9601091040;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN
INSTRUMENT RECORDED UNDER RECORDING NO. 9107260572;
AND TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS AS DELINEATED IN
INSTRUMENT RECORDED UNDER RECORDING NO. ▇▇▇▇▇▇▇▇▇▇;
SITUATE IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ OF WASHINGTON.
Exhibit G-11
