EXHIBIT 28
INDUSTRIAL LEASE - MULTIPLE TENANT
THIS LEASE AGREEMENT made this 6th day of July, 1998, by and between Benaroya
Capital Company, LLC, a Washington limited liability company (the "Lessor") and
Teltone Corporation, a Washington Corporation (the "Lessee").
1. PREMISES. Lessor does hereby lease to Lessee those certain premises, to
wit: 46,134 square feet of space in the Building located at ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ in Bothell, Washington as outlined on Exhibit A attached hereto
(hereinafter called "Premises"). The multiple building complex of which
the Building is a part is hereafter sometimes referred to as the "Project".
In addition, the Lessee has the right, in common with other tenants in the
Project and subject to the Rules and Regulations, to use of the Common
Areas including the parking areas. See Legal Description attached as
Exhibit B which Exhibit is incorporated herein by reference.
2. TERM. This Lease shall be for a term of sixty (60) months commencing
February 1, 1999 (the "Commencement Date") and terminating January 31, 2004
3. RENT. Lessee covenants and agrees to pay Lessor at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or to such other party or at such other
place as Lessor may hereafter designate, monthly rent in advance without
offset or deduction, on or before the first (1st) day of each month of the
Lease term in the amounts as follows:
Months: Base Rent:
1 through 12 $40,000 per month
13 through 24 $43,000 per month
25 through 36 $45,000 per month
37 through 60 $46,170 per month
IV. SECURITY DEPOSIT. Lessee will deposit with Lessor on the date hereof forty
six thousand one hundred seventy and No/100 dollars ($46,170). Said sum
shall be held by Lessor as security for the faithful performance by Lessee
of all the terms, covenants and conditions of this Lease to be kept and
performed by Lessee during the entire Term hereof. If Lessee defaults with
respect to any provision of this Lease, including, but not limited to, the
provisions relating to the payment of Base Rent, Additional Rent,
Percentage Rent, Adjustments or other charges or sums due under this Lease,
Lessor may (but shall not be required to) use, apply or retain all or any
part of the security deposit for the payment of any Base Rent, Additional
Rent, Percentage Rent, Adjustments or other charges or sums due under this
Lease or any sum in default, or for the payment of any amount which Lessor
may spend or become obligated to spend by reason of Lessee's default, or to
compensate Lessor for any other loss, damage, cost or expense (including
attorneys' fees) which Lessor may suffer or incur by reason of Lessee's
default. If any portion of said security deposit is so used or applied,
Lessee shall, within five (5) days after written demand therefor, deposit a
certified or cashier's check with Lessor in an amount sufficient to restore
the security deposit to its original amount and Lessee's failure to do so
shall be a default under this Lease. Lessor shall not be required to keep
the security deposit separate from its general funds and Lessee shall not
be entitled to interest on such deposit. If Lessee shall fully and
faithfully perform every provision of this Lease to be performed by it, the
security deposit or any balance thereof after deduction hereunder by Lessor
shall be returned to Lessee (or, at Lessor's option, to the last assignee
of Lessee's interest hereunder) within thirty (30) days following
expiration of the Lease Term; provided, that in the event this Lease shall
be terminated upon the default of the Lessee, the security deposit shall be
retained by Lessor and all of Lessee's interest therein shall terminate and
the security deposit will be applied against the damages
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suffered by Lessor by reason of the Lessee's default. In the event of
termination of Lessor's interest in this Lease, Lessor shall transfer
said deposit to Lessor's successor in interest.
Notwithstanding the above, Lessor agrees to waive payment of the Security
Deposit by Lessee provided Lessee has not been late in the payment of any
amount due under this Lease (as defined in Section 28 below), more than
once in any consecutive twelve (12) month period. The Security Deposit
referenced in this Section 4 will be immediately due and payable by Lessee
to Lessor upon the second such occurrence.
5. USE. Lessee shall use and occupy the Premises for the purposes of general
office and assembly space and for no other purposes, without prior written
consent of Lessor, and shall comply with all governmental laws, ordinances,
regulations, orders and directives and insurance requirements applicable to
Lessee's use of the Premises. Lessee shall not occupy or use or permit any
portion of the Premises to be occupied or used in such a manner or for any
purpose which would increase the cost of insurance coverage upon the
Premises, the building or the contents thereof.
6. RULES AND REGULATIONS. Lessee agrees to comply with any Rules and
Regulations attached hereto, any recorded Covenants, Conditions and
Restrictions affecting the Project, as well as such other reasonable rules
and regulations as may from time to time be adopted by Lessor for the
management, good order and safety of common areas, the building and its
Lessee(s). Lessee shall be responsible for the compliance with such rules
and regulations by its employees, agents and invitees. Lessor's failure to
enforce any of such rules and regulations against Lessee or any other
Lessee shall not be deemed to be a waiver of same.
7. MAINTENANCE. Lessee agrees by taking possession that the Premises are in
tenantable and good condition. Lessee shall at its expense and at all
times keep, maintain, repair and replace the Premises, including but not
limited to storefronts, exterior doors and windows, Lessee division walls
and mechanical, electrical, sprinkler and other utility systems, together
with connections to utility distribution systems, in good condition, repair
and order and in accordance with applicable laws, ordinances, rules,
regulations and requirements of government authorities and insurance rating
bureaus. Lessee agrees to maintain a preventative maintenance contract
providing for the regular inspection and maintenance of the heating and air
conditioning systems with a licensed mechanical contractor and containing
terms and specifications acceptable to Lessor. Lessee shall further keep
the Premises and adjoining common areas in a neat, clean, safe and sanitary
condition; protect water, drain, gas and other pipes to prevent freezing or
clogging and repair all leaks and damage caused thereby; replace all glass
and panels in windows and doors of the Premises which become cracked,
broken or damaged; and remove ice and snow from entries and common areas
immediately adjacent to the Premises. After reasonable notice from Lessee,
Lessor shall repair the roof, exterior walls (excluding storefronts, doors
and windows), foundations and common areas and facilities, if any, and the
cost thereof shall be shared as provided in Section 9 hereof.
8. UTILITIES AND FEES. Lessee agrees to pay promptly when due all charges for
light, heat, water, sewer, garbage, fire protection and other utilities and
services to the Premises, and all license fees and other governmental
charges levied on Lessee's property and the operation of Lessee's business
on the Premises. Lessor shall not be liable for any injury or damages
suffered as a result of the interruption of utilities or services by fire,
or other casualty, strike, riot, vandalism, the making of necessary repairs
or improvements, or other causes beyond Lessor's reasonable control.
9. MONTHLY OPERATING EXPENSE ADJUSTMENTS. Lessee shall pay as additional
monthly rent its prorata share of all expenses incurred by Lessor for
operation of the Project during the term or any extension hereof, as
follows:
A. Real Estate taxes and assessments, together with any assessments
levied by the Owner's
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Association, if any.
B. Usual and necessary costs of operation, maintenance and repair
(including replacement) as determined by standard accounting practice,
including without limitation, all utilities and services not metered
or charged directly to Lessee, insurance (including, but not limited
to the insurance provided for under Paragraph 16 C below), painting,
upkeep and repair of building exterior, roofing, parking, landscaping,
and all common areas and facilities. If any portion of the Property,
or any system or equipment is replaced by Lessor, and if the useful
life of such replaced item extends beyond the term of this Lease (as
such term may be extended by the exercise of any options), the cost of
such replacement will be prorated over its useful life and Lessee will
be responsible only for that portion of the cost which is applicable
to the lease term (as extended).
C. A Management fee equal to three percent (3%) of Lessee's monthly rent,
including Base Rent and any Additional Rent. Lessor shall from time
to time estimate and provide notice to Lessee of its monthly expense
based upon existing or expected costs. Such monthly estimated amount
shall be paid by Lessee on or before the first day of each month.
Lessor, annually or upon termination hereof, shall compute Lessee's
actual expenses. Any overpayment shall be applied as a credit to
Lessee against future expense payments. Any deficiency shall be paid
to Lessor by Lessee within fifteen (15) days after the date of
Lessor's statement. Lessor's records showing expenditures made for
such expenses shall be available for Lessee's inspection at any
reasonable time.
The determination of actual costs and estimated costs allocable to the
Premises shall be made by Lessor. Lessor or its agent shall keep
records showing all expenditures made for the items enumerated above,
which records shall be available for inspection and audit by Lessee.
The Lessee shall have the right, at reasonable times and upon
reasonable prior notice to the Lessor to audit the Lessor's records
relating to the actual costs and estimated costs allocable to the
Premises for a particular Lease Year, which audit must be conducted
within one (1) year after Lessee's receipt of the statement of actual
costs allocable to the Premises for that particular Lease Year. If
such audit is not conducted within such one (1) year period, then the
matters set forth in the statement of actual costs allocable to the
Premises for that particular Lease Year shall be deemed conclusive.
The Lessee shall pay the costs and expenses of such audit unless such
audit reveals that the Lessor has overstated the amount due from
Lessee for the Lease Year in question by an amount equal to 5% or more
of the actual costs allocable to the Premises for that particular
Lease Year in which event the Lessor shall pay up to $1,000 in payment
of the actual costs incurred by Lessee in the performance of such
audit.
10. LESSOR'S RESERVATIONS. Lessor reserves the right without liability to
Lessee: (a) to inspect the Premises, and to show them to prospective
Lessees, partners or lenders and if they are vacated, to prepare them for
re-occupancy; (b) to retain at all times and to use in appropriate
instances keys to doors within and into the Premises; (c) to make repairs,
alterations, additions or improvements, whether structural or otherwise, in
or about the building, and for such purposes to enter upon the Premises and
during the continuance of any work, to close common areas and to interrupt
or temporarily suspend building services and facilities, all without
affecting any of Lessee's obligations hereunder, so long as the Premises
are reasonably accessible; and (d) generally to perform any act relating to
the safety, protection and preservation of the Premises or building.
11. POSSESSION. If Lessor does not deliver possession of the Premises at the
Commencement Date of the term of this Lease, then, unless such delay is
caused by Lessee, Lessee may give Lessor written notice of its intention to
cancel this Lease if possession is not delivered within ninety (90) days
after receipt of such notice by Lessor. Lessor shall not be liable for any
damages caused by failure to
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deliver possession of the Premises and Lessee shall not be liable for
any rent until such time as Lessor delivers possession. A delay of
possession shall not extend the termination date. Notwithstanding the
above, in the event the delay was caused by Lessee, then the payment of
Rent shall commence on the Commencement Date and Lessee shall not have
any right to cancel this Lease as a result of such delay. If Lessor
offers possession of the Premises or any portion thereof prior to the
Commencement Date of the term of this Lease, and if Lessee accepts such
early possession, then both parties shall be bound by all of the
covenants and terms contained herein during such period of early
possession including the payment of rent which shall be pro-rated
accordingly and for the number of days of such early possession.
12. ASSIGNMENT AND SUBLETTING. Lessee shall not either voluntarily or by
operation of law assign, transfer, convey or encumber this Lease or any
interest under it, or sublet its right to occupy or use all or any portion
of the Premises without Lessor's prior written consent. Among the criteria
to be used by Lessor in evaluating a request for assignment or subletting
will be (i) the proposed use of the Premises; (ii) the anticipated impact,
if any, on parking; (iii) the financial capacity of the assignee/sublessee
to perform the obligations under this Lease; (iv) the compatibility of the
proposed user with the remainder of the tenants and operation of the
Building. Lessor reserves the right to recapture the Premises or
applicable portion thereof in lieu of giving its consent by notice given to
Lessee within twenty (20) days after receipt of Lessee's written request
for assignment or subletting. Such recapture shall terminate this Lease as
to the applicable space effective on the prospective date of assignment or
subletting, which shall be the last day of a calendar month and not earlier
than sixty (60) days after receipt of Lessee's request hereunder. In the
event that Lessor shall not elect to recapture and shall thereafter give
its consent, Lessee shall pay Lessor a reasonable fee, not to exceed One
Thousand And No/100 Dollars ($1,000.00) to reimburse Lessor for processing
costs incurred in connection with such consent. Lessor's consent shall not
release or discharge Lessee from future liability under this Lease and
shall not waive Lessor's right to consent to any future assignment or
sublease. Any assignment or subletting without Lessor's consent shall be
void and shall, at Lessor's option, constitute a default under this Lease.
A transfer by the present majority shareholders of ownership or control of
a majority of the voting stock of a corporate Lessee, or the change in form
of entity of the Lessee, shall be deemed an assignment.
The Lessee shall not assign its interest in or under this Lease for
security purposes, nor shall the Lessee grant any security interest, lien
or encumbrance against its interest in this Lease or in or to any property
in or affixed to the Premises without the prior written consent of the
Lessor, which consent shall be granted, withheld or conditioned in Lessor's
sole discretion. In no event shall the Lessee grant, or allow to exist,
any security interest in, or lien or encumbrance against the fee title to
the Premises, the building in which the Premises is located or the real
property on which the building is located.
13. ALTERATIONS. After obtaining the prior written consent of Lessor, Lessee
may make minor alterations, additions and improvements in said Premises (so
long as such alterations, additions or improvements are not structural in
nature and not visible from the exterior of the Premises) at its sole cost
and expense. Lessee agrees to save Lessor harmless from any damage, loss,
or expense arising therefrom and to comply with all laws, ordinances, rules
and regulations. Upon termination of this Lease, all alterations,
additions and improvements made in, to or on the Premises (including
without limitation all electrical, lighting, plumbing, heating, air
conditioning, and communications equipment and systems, doors, windows,
partitions, drapery, carpeting, shelving, counters, and physically attached
fixtures unless excluded by written agreement annexed hereto), shall remain
upon and be surrendered as a part of the Premises; provided however, upon
Lessor's request, Lessee shall remove those additions, alterations, or
improvements as may be specified by Lessor, and repair and restore the
Premises to is original condition at Lessee's sole cost and expense prior
to expiration of the Term.
14. LIENS. Lessee shall keep the Premises free from any liens arising out of
any work performed,
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materials furnished, equipment supplied, or obligations incurred by or
on behalf of Lessee. No work performed, material furnished, equipment
supplied or obligations incurred by or on behalf of Lessee shall be
deemed to be for the immediate use and benefit of Lessor so that no
mechanic's lien or other lien shall be allowed against Lessor's estate
in the premises. Lessee shall provide, at Lessee's own cost, waivers of
lien signed by any party (including the Lessee) who performs work,
furnishes materials, or supplies equipment to the Premises. Lessor may
require, at Lessee's sole cost and expense, a lien release and
completion bond in an amount equal to either the actual contract price
or one and one-half times the estimated cost of any improvements,
additions or alterations in the Premises which Lessee desires to make,
to insure Lessor against any liability for lien and to insure completion
of the work.
15. SIGNS. All signs or symbols placed by Lessee in the windows and doors of
the Premises, or upon any exterior part of the building, shall be subject
to Lessor's prior written approval. Prior to termination of this Lease,
Lessee will remove all signs placed by it upon the Premises, and will
repair any damages caused by such removal.
16. INSURANCE.
A. Lessee shall pay for and maintain, during the entire Lease Term, the
following policies of insurance:
(i) Commercial general liability insurance, including products,
completed operations coverage and auto liability insurance
covering Lessee's operations and the Premises with limits of not
less than $2,000,000 per occurrence. Such policies shall be
endorsed to provide contractual liability insurance covering all
liability assumed by Lessee under the provisions of this Lease
and a copy of said endorsement will be delivered to Lessor prior
to commencement of the Term.
(ii) Special cause of loss "all risk" perils and sprinkler leakage
property insurance upon all building improvements and alterations
on the Premises for which Lessee is responsible and upon Lessee's
property in the amount of one hundred percent (100%) full
replacement cost. The policy shall include Lessor and Lessor's
mortgagee, if any, as additional insureds, as their interests may
appear, with a loss payable clause in favor of Lessor and
Lessor's mortgagee to the extent of their interest in the
property.
B. Each policy provided by Lessee shall expressly provide that it shall
not be subject to cancellation or material change without at least
thirty (30) days prior written notice to the Lessor. Lessee shall
furnish Lessor, prior to commencement of the Term, with insurance
certificates naming Lessor as additional insured and, upon request,
copies of such policies required to be maintained hereunder.
▇. ▇▇▇▇▇▇ shall pay for and maintain property insurance during the entire
Lease Term for the perils of Special cause of loss ("all risk") and
earthquake. Such insurance shall be in the amount of one hundred
percent (100%) full replacement value of the Building and Lessor's
improvements.
17. INDEMNITY AGAINST LIABILITY FOR LOSS OR DAMAGE
A. Lessee assumes all liability for and shall indemnify, hold harmless
and defend Lessor from and against all loss, damage or expense which
the Lessor may sustain or incur, and against any and all claims,
demands, suits and actions whatsoever, including expense of
investigation and litigation, on account of injury to or death of
persons, including without
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limitation employees of Lessor, employees of Lessee or its
affiliated companies or on account of damage to or destruction of
property, including without limitation property owned by and property in
the care, custody or control of Lessor during the Term, due to or
arising in any manner from:
(i) The acts or negligence of Lessee or any contractor,
subcontractor, or agent of Lessee or their respective
employees;
(ii) The condition, use or operation of the Premises and/or
materials or substances used by Lessee or any of its
contractors, subcontractors or agents of Lessee or by their
respective employees, regardless of whether or not furnished by
Lessor under this Lease or otherwise;
(iii) Any damage or injury to persons or property arising out of
Lessee's breach or this Lease, including, but not limited to,
obligations of Lessee under Section 7, Maintenance.
▇. ▇▇▇▇▇▇ shall have no liability to Lessee as a result of loss or damage
to Lessee's property or for death or bodily injury caused by the acts
or omissions of other tenants in the project or by third parties
(including criminal acts).
C. Lessee shall not be obligated to indemnify Lessor for the portion of
any claim or liability caused by or arising from the act, or
negligence of Lessor.
D. It is mutually understood and agreed that the assumption of
liabilities and indemnification provided for in this Section 17 shall
survive any termination of this Lease.
18. DAMAGE OR DESTRUCTION. If any of the Premises, or a substantial part of
the building in which the Premises are located, shall be damaged or
destroyed by fire or other insured casualty, and repair of the damage can
not be completed within one hundred twenty (120) days, following receipt by
Lessor of actual notice of such damage or destruction Lessor shall have the
option either (a) to repair or rebuild within a reasonable time utilizing
the insurance proceeds to effect such repair, or (b) not to repair or
rebuild, and to cancel this Lease on thirty (30) days notice. If Lessor
fails to give Lessee written notice of its election within thirty (30) days
from the date of damage, or if the restoration of the Premises cannot be
completed within one hundred twenty (120) days from date of notice, Lessee
may cancel this Lease at its option on three (3) days notice. During the
period of untenantability, rent shall ▇▇▇▇▇ in the same ratio as the
portion of the Premises rendered untenantable bears to the whole of the
Premises; provided that if the damage is due to the fault or neglect of
Lessee, there shall be no abatement of rent.
If the Premises or the building in which the Premises are located shall be
damaged or destroyed by fire or other insured casualty, and repair of the
damage can be completed within one hundred twenty (120) days, Lessor shall
repair or rebuild within a reasonable time utilizing the insurance proceeds
to effect such repair.
If any part of the Premises or the building in which the Premises are
located shall be damaged or destroyed by an uninsured casualty Lessor
shall have the option either (a) to repair or rebuild within a reasonable
time, or (b) not to repair or rebuild, and to cancel this Lease on thirty
(30) days notice. In the event of cancellation by Lessor as a result of an
uninsured casualty, Lessee shall have the right, within five (5) days
following Lessor's notice of cancellation, to override such cancellation by
agreeing to repair the damage at Lessee's sole cost and expense. In such
event, the Lessee shall repair or rebuild within a reasonable time
following the damage or destruction.
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19. EMINENT DOMAIN. If the whole of the Premises shall be taken by any
public authority under the power of eminent domain, or purchased by the
condemnor in lieu thereof, then the term of this Lease shall cease as of
the date possession is taken by such public authority. If only part of the
Premises shall be so taken, the Lease shall terminate only as to the
portion taken, and shall continue in full force and effect as to the
remainder of said Premises, and the monthly rent shall be reduced
proportionately; provided, however, if the remainder of the Premises cannot
be made tenantable for the purposes for which Lessee has been using the
Premises or if more than twenty-five percent (25%) of the rentable square
footage of the Premises shall be so taken, then either party, by written
notice to the other, given at least thirty (30) days prior to the date that
possession must be surrendered to the public authority, may terminate this
Lease effective as of such surrender of possession. If any part of the
building other than the Premises shall be so taken so as to render in
Lessor's opinion the termination of this Lease beneficial to the remaining
portion of the building, Lessor shall have the right within sixty (60) days
of said taking to terminate this Lease upon thirty (30) days written notice
to Lessee. In the event of any taking, whether whole or partial, Lessor
shall be entitled to all awards, settlements, or compensation which may be
given for the land and buildings. Lessee shall have no claim against
Lessor for the value of any unexpired term of this Lease. Lessee shall
have the right to seek an independent and separate award from the
condemning authority so long as such award does not diminish the amount of
the award payable to Lessor.
20. INSOLVENCY. If Lessee shall be declared insolvent or bankrupt, or if
Lessee's leasehold interest herein shall be levied upon or seized under
writ of any court of law, or if a trustee, receiver or assignee be
appointed for the property of Lessee, whether under operation of State or
Federal statutes, then Lessor may, at its option, immediately, without
notice (notice being expressly waived), terminate this Lease and take
possession of said Premises.
21. DEFAULT AND RE-ENTRY. If Lessee fails to keep or perform any of the
covenants and agreements herein contained, then the same shall constitute a
breach hereof, and if Lessee has not remedied such breach within three (3)
days after written notice thereof from Lessor if the breach is non-payment
of rent or other charges, or within ten (10) days after written notice
thereof from Lessor in the event of the breach of any other covenant,
except that if the breach cannot reasonably be cured within such ten (10)
day period, then if Lessee fails to commence to cure within such ten (10)
day period and thereafter, diligently prosecute such cure to completion,
then Lessor may, at its option, without further notice or demand:
A. Cure such breach for the account and at the expense of Lessee
(including entry upon the Premises to make repairs on behalf of the
Lessee where Lessee has failed to make such repairs as required under
this Lease) and such expense shall be deemed additional rent due on
the first of the following month; or
B. Re-enter the Premises, remove all persons therefrom, take possession
of the Premises and remove all personal property therein at Lessee's
risk and expense and (1) terminate this Lease, or (2) without
terminating the Lease or in any way affecting the rights and remedies
of Lessor or the obligations of Lessee, re-let the whole or any part
of the Premises as agent for Lessee, upon such terms and conditions as
Lessor may deem advisable. In either event, any moneys received from
Lessee and any deposit or other amounts held by Lessor may first be
applied by Lessor to any damages suffered by Lessor as a result of
such default, including without limitation, costs and expenses
incurred on re-entry and re-letting, any unamortized tenant
improvements and commissions, cleaning, necessary repairs, restoration
and alteration, and any commissions incurred on re-letting, and the
balance of such amounts may be applied toward payment of other sums
due to Lessor hereunder. In the event the Premises are re-let for
Lessee's account, Lessee shall pay to Lessor monthly any deficiency;
however, Lessor shall not be required to pay any excess to Lessee.
Upon termination of this Lease or of Lessee's right to possession,
Lessor has the right to recover from Lessee: (1) The worth
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of the unpaid rent that had been earned at the time of such
termination; (2) The worth of the amount of the unpaid rent that would
have been earned after the date of such termination; and (3) Any other
amount, including court, attorney and collection costs, necessary to
compensate Lessor. "The Worth," as used in Section (1) is to be
calculated allowing interest at 18% per year (or, if applicable, at
such lower rate as may represent the highest legal limit allowed in
the State of Washington). "The worth" as used for Section (2) is to
be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of termination. The
above remedies of Lessor are cumulative and in addition to any other
remedies now or hereafter allowed by law or elsewhere provided for in
this Lease.
22. REMOVAL OF PROPERTY. Any property of Lessee removed by Lessor in
accordance with Section 21 above may be stored by Lessor or may be
deposited on any area adjacent to the building at the sole risk and expense
of Lessee and without any further responsibility of Lessor, and Lessor may
at its sole discretion without or after removing said property, without
obligation to do so and without notice to Lessee, sell or dispose of the
same at public or private sale for the account of Lessee, in which event
the proceeds therefrom may be applied by Lessor upon any indebtedness due
from Lessee to Lessor. Lessee waives all claims for damages that may be
caused by Lessor re-entering the Premises and removing or disposing of said
property as herein provided.
23. COSTS AND ATTORNEYS' FEES. In the event either party shall commence legal
action to enforce any provision of this Lease, the court shall award to the
prevailing party all reasonable attorneys' fees and all costs incurred in
connection therewith, including fees and costs on appeal. Any action
relating to this Lease shall be brought in the County in which the Premises
are located or, at Lessor's election, in King County, Washington.
24. SUBROGATION WAIVER. Lessor and Lessee each herewith and hereby release and
relieve the other and waive its entire right of recovery against the other
for loss or damage arising out of or incident to the perils of fire,
explosion or any other perils described in the "all risk" insurance and the
events covered under the liability insurance coverages required under this
Lease, whether due to the negligence of either party, their agents,
employees or otherwise. Each party shall obtain from its respective
insurer under each insurance policy that it maintains a waiver of all
rights of subrogation which the insurer may have against the other party
for claims that are released under this Section 24.
25. HOLDING OVER. If Lessee, with the express consent of Lessor, shall hold
over after the expiration of the term of this Lease, Lessee shall remain
bound by all the covenants and agreements herein, except that (a) the
tenancy shall be from month-to-month and (b) the monthly rent to be paid by
Lessee shall be determined by multiplying the monthly rent in effect
immediately preceding such expiration times 150%. If Lessee holds
possession of the Demised Premises after the expiration of the Lease
without the express written consent of Lessor, Lessee shall remain bound by
all the covenants and agreements herein, except that (a) the tenancy shall
be from month-to-month and (b) the monthly rent to be paid by Lessee shall
the greater of twice the Monthly Minimum Rent in effect immediately
preceding such expiration or the total rent which other Lessees have agreed
to pay for the Premises during the period of such holdover, if Lessor has
leased all or part of the Premises to other Lessees effective upon the
expiration or termination of this Lease. Any such tenancy may be
terminated with twenty (20) days prior notice as provided by Washington
State law.
In the event of any unauthorized holding over, Lessee shall also indemnify
and hold Lessor harmless from and against all liability, losses, claims,
causes of action, damages, costs and expenses (including without limitation
attorney fees) resulting from Lessee's failure to surrender the Premises,
including without limitation claims made by succeeding Lessees resulting
from Lessee's failure to surrender the Premises.
SURVIVAL OF LESSEE'S OBLIGATIONS. Lessee's obligations under this Section
25 shall survive the
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expiration or termination of this Lease.
26. SUBORDINATION AND ATTORNMENT; MORTGAGE PROTECTION.
A. SUBORDINATION-NOTICE TO MORTGAGEE. At the request of Lessor, Lessee
shall promptly execute, acknowledge and deliver, all instruments which
may be required to subordinate this Lease to any existing or future
mortgages, deeds of trust and/or other security documents on or
encumbering the Premises or on the leasehold interest held by Lessor,
and to any extensions, renewals, or replacements thereof, provided
that the mortgagee or beneficiary, as the case may be, shall agree to
recognize this Lease in the event of foreclosure if Lessee is not in
material default at such time.
B. LESSEE'S CERTIFICATE. Lessee shall at any time and from time to time
within five (5) days after written notice from Lessor execute,
acknowledge and deliver to Lessor a statement in writing (a)
certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and
certifying that this Lease as so modified is in full force and
effect), and the date to which the rental and other charges are paid
in advance, if any; and (b) acknowledging that there are not, to
Lessee's knowledge, any uncured defaults on the part of the Lessor or
Lessee hereunder, or specifying such defaults if any are claimed; and
(c) setting forth the date of commencement of rents and expiration of
the Lease Term hereof; and, (d) such other information as the Lessor
shall reasonably require. Any such statement may be relied upon by
any prospective purchaser or encumbrancer of all or any portion of the
Premises of which the Premises are a part.
C. MORTGAGEE PROTECTION CLAUSE. Lessee agrees to notify any mortgagee
and/or trust deed holders, by registered mail, with a copy of any
notice of default served upon the Lessor, provided that prior to such
notice Lessee has been notified in writing (by way of Notice of
Assignment of Rents and Lease, or otherwise) of the addresses of such
mortgagees and/or trust deed holders. Lessee further agrees that if
Lessor shall have failed to cure such default, then the mortgagees
and/or trust deed holders have thirty (30) days within which to cure
such default or if such default cannot be cured within that time, then
such additional times as may be necessary if within such thirty (30)
days any mortgagee and/or trust deed holder has commenced and is
diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings
if necessary to affect such cure), in which event this Lease shall not
be terminated if such remedies are being so diligently pursued.
27. SURRENDER OF POSSESSION. Lessee shall, prior to the termination of this
Lease or of Lessee's right to possession, remove from the Premises all
personal property which Lessee is entitled to remove and those alterations,
additions, improvements or signs which may be required by Lessor to be
removed, pursuant to Sections 13 and 15 above, and shall repair or pay for
all damage to the Premises caused by such removal. All such property
remaining and every interest of Lessee in the same shall be conclusively
presumed to have been conveyed by Lessee to Lessor under this Lease as a
▇▇▇▇ of sale, without compensation, allowance, or credit to Lessee. Lessee
shall upon termination of this Lease or of Lessee's right of possession,
deliver all keys to Lessor and peacefully quit and surrender the Premises
without notice, neat and clean, and in as good condition as when Lessee
took possession, except for reasonable wear and tear as determined by
Lessor and except for damage by casualty or condemnation.
28. LATE PAYMENT AND INTEREST. If any amount due from Lessee is not received
in the office of Lessor on or before the third (3rd) day following the date
upon which such amount is due and payable, a late charge of five percent
(5%) of said amount shall become immediately due and payable, which late
charge Lessor and Lessee agree represents a fair and reasonable estimate of
the processing and
33
accounting costs that Lessor will incur by reason of such late payment.
All past due amounts owing to Lessor under this Lease, including rent,
shall be assessed interest at an annual percentage rate of eighteen
percent (18%) from the date due until paid.
29. NOTICE. Any notice, communication or remittance required or permitted by
this Lease by either party to the other shall be deemed given, served or
delivered, in writing, delivered personally or by courier or by telephonic
facsimile transmission with automatic confirmation, addressed to the Lessor
at the address specified for the payment of rent under paragraph 3 of this
Lease or to Lessee at the Premises or to such other address as either party
may designate to the other in writing from time to time.
30. NO WAIVER OR COVENANTS. Time is of the essence of this Lease. Any waiver
by either party of any breach hereof by the other shall not be considered a
waiver of any future similar or other breach.
31. ENTIRE AGREEMENT. It is expressly understood and agreed by Lessor and
Lessee that there are no promises, agreements, conditions, understandings,
inducements, warranties, or representations, oral or written, express or
implied, between them, other than as herein set forth and that this Lease
shall not be modified in any manner except by an instrument in writing
executed by the parties.
32. BINDING ON HEIRS, SUCCESSORS AND ASSIGNS. The covenants and agreements of
this Lease shall be binding upon the heirs, executors, administrators,
successors and assigns of both parties hereto, except as hereinabove
provided.
33. LESSOR'S ASSIGNMENT. It is fully understood that Lessor shall have the
full right to assign this Lease, without any notice to Lessee, thereby
relieving Lessor from all and any liabilities; provided however, that the
assignee assumes all Lessor's responsibilities as set forth in this Lease.
34. ENVIRONMENTAL. See Rider One attached and incorporated into this Lease by
this reference.
33. BROKERS; AGENCY DISCLOSURE; BROKERAGE RELATIONSHIPS. Lessee and Lessor
each represent they that they have not engaged the services of any real
estate agent or broker in connection with this Lease. Each party agrees to
defend and hold the other harmless from any claims resulting from a breach
of this representation.
36. FORCE MAJEURE. Lessor shall have no liability to Lessee on account of the
following acts of "force majeure," which shall include (a) the inability of
Lessor to fulfill, or delay in fulfilling, any of Lessor's obligations
under this Lease by reason of strike, lockout, other labor trouble, dispute
or disturbance; (b) governmental regulation, moratorium, action, inaction,
preemption or priorities or other controls, including delays in receipt of
permits; (c) shortages of fuel, supplies or labor; (d) any failure or
defect in the supply, quantity or character of electricity or water
furnished to the Premises by reason of any requirement, act or omission of
the public utility or others furnishing the Building with electricity or
water; or (e) for any other reason, whether similar or dissimilar to the
above, or for act of God, beyond Lessor's reasonable control. If this
Lease specifies a time period for performance of an obligation of Lessor,
that time period shall be extended by the period of any delay in Lessor's
performance caused by any of the events of force majeure described herein.
37. LIMITATION OF LIABILITY. The recourse of Lessee to recover any claim
against Lessor arising under this Lease shall be limited to Lessor's
interest in the Building and to the rents, issues and profits from the
Building. Lessee waives any and all recourse for any such liability
against Lessor's members, partners, shareholders, trustees or
beneficiaries, or any property or assets of Lessor other than the Building.
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38. EXHIBITS. The following exhibits or riders are made a part of this Lease
and are incorporated herein by reference:
Rider One - Environmental
Exhibit A - Premises
Exhibit B - Legal Description
Exhibit C - Rules and Regulations
39. TENANT IMPROVEMENTS. Prior to the commencement of this Lease, Lessor will:
1) provide a new demising wall at the location depicted on Exhibit A
segregating the Premises from the adjacent space, and; 2) Modify the
existing HVAC in the assembly area so that it is separated from the
adjacent space.
40. OPTION TO RENEW. Provided Lessee has not been in default of any term or
condition of the Lease, Lessee shall have the Option to Renew this Lease
under all of the terms and conditions contained in this Lease, except
Rent, for a term (commencing February 1, 2004) of: two, three, four or
five years ("Extended Term") as requested by Lessee. The Rent for the
Extended Term shall be the market rent as reasonably determined by
Lessor. Lessee shall notify Lessor, in writing, of its intent to
exercise this Option to Renew (specifying which length of term Lessee
chooses) at least eight (8) months prior to the expiration of the
Initial Term of this Lease. Within ten (10) days following receipt of
such notice from Lessee, Lessor will inform Lessee of market rent.
Within ten (10) days thereafter, Lessee shall notify Lessor of its
exercise of the Option to Renew on the defined terms. If Lessee either
waives its right or fails to exercise its right within such ten (10) day
period, then this option will terminate and be of no further force or
effect.
LESSOR: LESSEE:
Benaroya Capital Company, LLC Teltone Coporation
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Manager Its: President & CEO
Date: July 27, 1998 Date: July 21, 1998
STATE OF WASHINGTON ]
] ss.
COUNTY OF KING ]
I certify that I know or have satisfactory evidence that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
is the person who appeared before me, a Notary Public in and for the State of
Washington duly commissioned and sworn, and acknowledged that he is the Manager
of Benaroya Capital Company, LLC, a Washington limited liability company, who
executed the within and foregoing instrument, and acknowledged the instrument to
be the free and voluntary act and deed of said company for the uses and purposes
therein mentioned, and on oath stated that affiant is authorized to execute said
instrument on behalf of said company.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the
day and year first above written.
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_______________________________________
Notary Public in and for the
State of_______________________________
residing at____________________________
Commission expires_____________________
Print Name_____________________________
STATE OF WASHINGTON ]
] ss.
COUNTY OF ______________ ]
I certify that I know or have satisfactory evidence that _____________ is
the person who appeared before me, a Notary Public in and for the State of
Washington duly commissioned and sworn, and acknowledged that he/she is the
_________________, of _________________________, a _________________________,
who executed the within and foregoing instrument, and acknowledged the
instrument to be the free and voluntary act and deed of said corporation for the
uses and purposes therein mentioned, and on oath stated that affiant is
authorized to execute said instrument on behalf of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the
day and year first above written.
_______________________________________
Notary Public in and for the
State of_______________________________
residing at____________________________
Commission expires_____________________
Print Name_____________________________
36
RIDER ONE
EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE
a. EMISSIONS. Lessee shall not (i) discharge, emit or permit to be discharged
or emitted, any liquid, solid or gaseous matter, or any combination
thereof, into the atmosphere, the ground or any body of water, which does
or may pollute or contaminate the same, or does or may adversely affect the
health or safety of persons, or the use or enjoyment of the Premises; nor
(ii) transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation in, on or about the Premises.
b. STORAGE. If, with or without violation of this Lease, Lessee possesses at
the Premises any matter described in Section A above or any Hazardous
Substances (as defined below), Lessee shall store the same in appropriate
leak proof containers and/or areas which comply with all laws and all
prudent practices.
c. DISPOSAL OF WASTE. Lessee shall not keep any trash, garbage, waste or
other refuse on the Premises except in sanitary containers and shall
regularly and frequently remove same from the Premises. Lessee shall keep
all such containers in a clean and sanitary condition. Lessee shall
properly dispose of all sanitary sewage and shall not use the sewage system
for the disposal of anything except sanitary sewage, nor in excess of
capacity. Lessee shall not cause any obstruction in the sewage disposal
system.
d. COMPLIANCE OF LAW. Notwithstanding any other provision in the Lease to the
contrary, Lessee shall comply with all Laws in complying with its
obligations under this Lease, and in particular, Laws relating to the
storage, use and disposal of Hazardous Substances (as defined below).
e. INDEMNIFICATION FOR BREACH. Lessee shall defend, indemnify and hold
Lessor, the Project and the holder of a trust deed or mortgage on the
Project harmless from any loss, claim, liability or expense, including,
without limitation, attorneys fees and costs, at trial and/or on appeal and
review, arising out of or in connection with its failure to observe or
comply with the provisions of this Rider. This indemnity shall survive the
expiration or earlier termination of the term of the Lease or the
termination of Lessee's right of possession and be fully enforceable
thereafter.
f. INDEMNIFICATION REGARDING HAZARDOUS SUBSTANCES. In addition to the
indemnity obligations contained elsewhere herein, Lessee shall indemnify,
defend and hold harmless Lessor, the Premises, the Project, and the holder
of a trust deed or mortgage on the Project, from and against all claims,
losses, damages, monitoring costs, response costs, liabilities, and other
costs expenses caused by, arising out of, or in connection with, the
generation, release, handling, storage, discharge, transportation, deposit
or disposal in, on, under or about the Premises by Lessee or any of
Lessee's agents of the following (collectively referred to as "Hazardous
Substances"): hazardous materials, hazardous substances, toxic wastes,
toxic substances, pollutants, petroleum products, underground tanks, oils,
pollution, asbestos, PCB's, radioactive materials, or contaminants, as
those terms are commonly used or as defined by federal, state, and/or local
law or regulation related to protection of health or the environment as any
of same may be amended from time to time, and/or by any rules and
regulations promulgated thereunder. Such damages, costs, liability and
expenses shall include such as are claimed by any regulating and/or
administering agency, any ground lessor or master lessor of the Project,
the holder of any Mortgage or Deed of Trust on the Project, and/or any
successor of the Lessor named herein. This indemnity shall include (i)
claims of third parties, including governmental agencies, for damages,
fines, penalties, response costs, monitoring costs, injunctive or other
relief; (ii) the costs, expenses or losses resulting from any injunctive
relief, including preliminary or temporary injunctive relief; (iii) the
expenses, including fees of attorneys and experts, of report the existence
of Hazardous Substances to an agency of the State of which the Premises is
located or of the United States as required by applicable laws and
regulations; and (iv) any and all expenses or obligations, including
attorney's fees, incurred at, before and after any administrational
proceeding, trial, appeal and review. This indemnity shall survive the
expiration or earlier termination of the term of the Lease or the
termination of Lessee's right of possession and shall remain fully
enforceable thereafter.
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g. INFORMATION. Lessee shall give prior written notice to Lessor of any use,
whether incidental or otherwise, of Hazardous Substances on the Premises,
and shall immediately deliver to Lessor a copy of any notice of any
violation of any Law with respect to such use. Lessee shall also provide
to Lessor, upon request, with any and all information regarding Hazardous
Substances in the Premises, including contemporaneous copies of all filings
and reports to governmental entities, and any other information requested
by Lessor. In the event of any accident, spill or other incident involving
Hazardous Substances, Lessee shall immediately report the same to Lessor
and supply Lessor with all information and reports with respect to the
same. All information described herein shall be provided to Lessor
regardless of any claim by Lessee that it is confidential or privileged.
38
EXHIBIT A
PREMISES
39
EXHIBIT B
LEGAL DESCRIPTION
LOT 9 OF BINDING SITE PLAN RECORDED MAY 10, 1985, UNDER AUDITOR'S FILE ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, WASHINGTON, SAID LOT 9 BEING A PORTION
OF THE NORTHEWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 29, TOWNSHIP 27
NORTH, RANGE 5 EAST, ▇.▇., SNOHOMISH COUNTY, WASHINGTON.
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EXHIBIT C
RULES AND REGULATIONS
1. Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, advertisement, name
or notice shall be installed or displayed on any part of the outside or
inside of the Building or Project without the prior written consent of
Lessor. Lessor shall have the right to remove, at Lessee's expense and
without notice, any sign installed or displayed in violation of this rule.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Lessee by a person
approved by Lessor.
2. If Lessor objects in writing to any objects attached to or used in
connection with any window or door of the Premises, or placed on any
windowsill, which is visible from the exterior of the Premises, Lessee
shall immediately discontinue such use. Lessee shall not place anything
against or near glass partitions or doors or windows which may appear
unsightly from outside the Premises.
3. Lessee shall not obstruct any sidewalks, exits, entrances, or stairways of
the Project. The exits, entrances, and stairways are not open to the
general public, but are open, subject to reasonable regulations, to
Lessee's business invitees. No Lessee and no employee or invitee of any
Lessee shall go upon the roof(s) of the Project except for Lessee's
mechanical contractor to access the HVAC equipment. Lessee's choice of a
contractor is subject to the reasonable approval of Lessor.
4. Lessor will furnish Lessee, free of charge, with two keys to each door
lock in the Premises. Lessor may make a reasonable charge for any
additional keys. Lessee shall not alter any lock or install a new
additional lock or bolt on any door of its Premises without Lessor's prior
consent, which will not be unreasonably withheld. In the event of such an
alteration or installation, Lessee will promptly deliver a copy of any new
keys to Lessor. Lessee, upon the termination of its tenancy, shall
deliver to Lessor the keys of all doors which have been furnished to
Lessee, and in the event of loss of any keys so furnished, shall pay
Lessor therefor.
5. If Lessee requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Lessor's instructions in
their installation.
6. Lessee shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which
is allowed by Law. Heavy objects shall, if considered necessary by
Lessor, stand on such platforms as determined by Lessor to be necessary to
properly distribute the weight, which platforms shall be provided at
Lessee's expense. Equipment belonging to Lessee which cause noise or
vibration that may be transmitted to the structure of the Building or to
any space therein shall be placed and maintained by Lessee, at Lessee's
expense, on vibration eliminators, or other devices sufficient to
eliminate noise or vibration. The persons employed to move such equipment
in or out of the Building must be acceptable to Lessor. Lessor will not
be responsible for loss of, or damage to, any such equipment or other
property from any cause, and all damage done to the building by
maintaining or moving such equipment or other property shall be repaired
at the expense of Lessee.
7. Lessee shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited
quantities necessary for the operation or maintenance of Lessee's
equipment. Lessee shall not use or permit to be used in the Premises any
foul or noxious gas or substance, or permit or allow the Premises to be
occupied or used in manner offensive or objectionable to Lessor or other
occupants of the building by reason of noise, odors or vibrations, nor
shall Lessee bring into or keep in or about the Premises any animals.
8. Lessee shall not use any method of heating or air conditioning other than
that supplied by Lessor.
9. Lessee shall not waste water and agrees to cooperate fully with Lessor to
assure the most effective
41
operation of the Building and to comply with any governmental
energy-saving rules, laws or regulations of which Lessee has actual
notice.
10. Lessor reserves the right, exercisable without notice and without
liability to Lessee, to change the name and street address of the
Building.
11. Lessee shall entirely shut off any water faucets or other water apparatus,
and adjustable electricity, gas or air outlets before Lessee and its
employees leave the Premises. Lessee shall be responsible for any damage
or injuries sustained by other Lessees or occupants of the Building or by
Lessor for noncompliance with this rule.
12. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be
thrown therein.
13. Lessee shall not make any room-to-room solicitation of business from other
Lessees in the Project. Lessee shall not use the Premises for any
business or activity other than that specifically provided for in Lessee's
Lease. Canvassing, soliciting and distribution of handbills or any other
written material, and peddling in the Project are prohibited, and Lessee
shall cooperate to prevent such activities.
14. Lessee shall not install any radio or television antenna, loudspeaker or
other devices on the roof(s) or exterior walls of the Building or Project.
Lessee shall not interfere with radio or television broadcasting or
reception from or in the Project or elsewhere.
15. Lessee shall not in any way deface the Premises or any part thereof,
except in accordance with the provisions of the Lease pertaining to
alterations. Lessor reserves the right to direct electricians as to where
and how telephone and telegraph wires are to be introduced to the
Premises. Lessee shall not cut or bore holes for wires. Lessee shall not
affix any floor covering to the floor of the Premises in any manner except
as approved by Lessor. Lessee shall repair any damage resulting from
noncompliance with this rule.
16. Lessee shall not install, maintain or operate upon the Premises any
vending machines other than those to be used by employees of Lessee
without the written consent of Lessor.
17. Lessor reserves the right to exclude or expel from the Project any person
who, in Lessors' judgment, is intoxicated or under the influence of liquor
or drugs or who is in violation of any of the Rules and Regulations of the
Building.
18. The Premises shall not be used for lodging, nor shall the Premises be used
for any improper, immoral or objectionable purpose. No cooking shall be
done or permitted on the Premises without Lessor's consent, except that
used by Lessee of Underwriters' Laboratory approved equipment for brewing
coffee, tea, hot chocolate and similar beverages or use of microwave ovens
for employee use shall be permitted, provided that such equipment and use
is in accordance with all applicable Laws.
19. Lessee shall comply with all safety, fire protection and evacuation
procedures and regulations established by Lessor or any governmental
agency.
20. Lessee assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and
other means of entry to the Premises closed.
21. Employees of Lessor shall not be required to perform any work or do
anything outside of their regular duties unless under special instructions
from Lessor.
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22. Lessor may waive any one or more of these Rules and Regulations for the
benefit of Lessee or any other Lessee, but no such waiver by Lessor shall
be construed as a waiver of such Rules and Regulations in favor of Lessee
or any other Lessee, nor prevent Lessor from thereafter enforcing any such
Rules and Regulations against any or all of the Lessees of the Project.
23. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of the Lease.
24. Lessor reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for
safety and security, for care and cleanliness of the Project and for the
preservation of good order therein. Lessee agrees to abide by all such
Rules and Regulations hereinabove stated and any additional rules and
regulations which are adopted.
25. Lessee shall be responsible for the observance of all of the foregoing
rules by Lessee's employees, agents, clients, customers, invitees and
guests.
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