LEASE AGREEMENT
ARTICLE I BASIC LEASE PROVISIONS
1.1 "Landlord": Eastlake at ▇▇▇▇▇▇, LLC, d.b.a. Remi
1.2 "Tenant": Online Specialty Retailing, Inc.,
d.b.a. ▇▇▇▇▇▇▇▇▇.▇▇▇
1.3 "Premises": ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇., ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇. The Premises
consists of approximately 2,875 square
feet of office area located within the
Building Complex hereinafter referred
to as "Property". The Property and
Premises are more clearly defined and
legally described on Exhibits A and B.
1.4 "Term": Commencing upon the Commencement Date
(as defined in Article III herein) and
expiring thirty-six (36) months
thereafter.
1.4.1 "Termination Option": Any time after the eighteenth (18th)
month of the initial Lease term. Six
(6) months prior written notice
required.
1.4.2 "Renewal Option": One (1), three (3) year option to
renew. Rent shall be at "market rate,"
subject to annual CPI increases.
1.5 Scheduled "Commencement Date": March 1, 1999
1.6 Scheduled "Termination Date": February 28, 2002
1.7 "Basic Monthly Rent": See Exhibit C.
1.8 "Allowed Use": General office purposes
1.9 "Advance Rent": On signing this Lease, Tenant shall
pay Landlord Four Thousand Three
Hundred Twelve & 50/100 Dollars
($4,312.50) to be applied toward
payment of rent for the first month of
the term of this Lease.
1.10 "Operating Expenses/Utilities": Tenant shall pay for janitorial
service for the Premises and for
electricity used at the Premises,
which shall be separately metered (any
meters, if not existing, shall be
installed at Landlord's expense). (See
Article IV, Section 4.2.)
1.11 "Security Deposit": Four Thousand Three Hundred Twelve &
50/100 Dollars ($4,312.50)
1.12 Notice Address of Tenant: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇.,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.13 Notice Address of Landlord: Eastlake at ▇▇▇▇▇▇
c/o TEUTSCH PARTNERS
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.14 Date: This Lease is dated, for reference
purposes only, as of 1/25/99.
1.15 Agency Disclosure:
1.15.1 At the time of the signing of this
Agreement, ▇▇▇▇ ▇▇▇▇ of ▇▇▇▇▇▇▇
Partners LLC represented Tenant, and
▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇ Partners LLC
represented Landlord.
1.15.2 Landlord and Tenant confirm that prior
oral or written disclosure of agency
was provided to them in this
transaction.
1.16 Exhibits Exhibit A: Legal Description of
Property
Exhibit B: Premises
Exhibit C: Base Rent Schedule
Exhibit D: Base Plans
Exhibit E: Work Schedule
ARTICLE II PREMISES
Landlord hereby leases to Tenant and Tenant leases from Landlord for the term,
at the rental, and on all of the terms and conditions of this Lease, the
Premises.
ARTICLE III TERM
3.1.1 Term. The term of this Lease shall commence (the "Commencement Date") on
the date set forth in Section 1.5. The Term shall expire on the Termination Date
as set forth in Article I, unless sooner terminated pursuant to any provision
hereof.
3.1.2 Termination Option. Tenant shall have the option to terminate the Lease
any time after the eighteenth (18th) month of the initial Lease term. Tenant
shall provide Landlord with six (6) months minimum, prior written notice of its
intent to exercise this option. No option to terminate may be assigned by
Tenant, and no assignee or subtenant shall have any right to exercise any such
option.
3.1.3 Renewal Option.
(a) Grant of Option. Provided Tenant is not in default at the time of
notice of exercise of its extension rights or commencement of the
renewal term, Tenant is granted the right to extend the term of this
Lease beyond the expiration date of the initial Lease Term for one
(1) period of thirty-six (36) months (the "Extended Term"). Tenant's
extension rights shall apply to all of the Premises under lease to
Tenant at the time. Tenant's right to extend the term of this Lease
shall be personal and may not be exercised by any assignee or
sublessee. To exercise Tenant's option to extend the Lease Term,
Tenant shall give Landlord written notice of its election to extend
on or before the last day of the thirtieth (30th) month of the Lease
Term. From and after the commencement of an Extended Term, all of
the terms, covenants, and conditions of the Lease shall continue in
full force and effect as written, except that no option to terminate
shall be granted to Tenant, and Base Rent shall be adjusted as
provided in Paragraph (b) of this Section 3.1.3.
(b) Rental Rate. If Tenant exercises an extension right pursuant to
Paragraph (a) of this Section 3.1.3, the Base Rent for the Extended
Term shall be equal to the market rate for a three (3) year term for
comparable space in comparable buildings in the Seattle, Lake Union
submarket ("Fair Market Rent"). Fair Market Rent shall take into
account the value of any benefits to be made available to Tenant
under the Lease. Landlord shall give Tenant notice of Landlord's
estimation of Fair Market Rent not later than four (4) months before
the end of the initial Lease Term. If Tenant disagrees with such
estimate, it shall advise Landlord in writing thereof within fifteen
(15) days of the Tenant's receipt of its notice. If there is a
disagreement on such estimation, the parties shall promptly meet to
attempt to resolve their differences. If the differences as to Fair
Market Rent are not resolved within forty-five (45) days of Tenant's
receipt of its notice, then the parties shall submit the matter to
arbitration in accordance with the terms of Paragraph (c) of this
Section 3.1.3 so that Fair Market Rent is determined no later than
the first day of the Extended Term.
(c) Arbitration. If the parties are unable to reach agreement on Fair
Market Rent during the period specified in Paragraph (b) of this
Section 3.1.3, then within ten (10) days thereafter either party may
notify the other in writing of the name and address of its
arbitrator. The arbitrator shall be qualified as a real estate
appraiser familiar with rental rates in the Seattle, Lake Union
submarket who would qualify as an expert witness. Within ten (10)
days after receipt of such notice from the initiating party (the
"Instigator") designating its arbitrator, the other party (the
"Recipient) shall give notice to Instigator, specifying the name and
address of the person designated by Recipient to act as arbitrator
on its behalf who shall be similarly qualified. If Recipient fails
to notify Instigator of the appointment of its arbitrator, within or
by the time above specified, then the arbitrator appointed by
Instigator shall be the arbitrator and determine the issue. The duty
of the arbitrator(s) shall be to determine the Fair Market Rent
based solely on rental rates in the Lake Union area.
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If the two (2) arbitrators are so chosen the arbitrators so chosen
shall meet within ten (10) days after the second arbitrator is
appointed and, if within ten (10) days after such first meeting the
two arbitrators shall be unable to agree promptly upon a
determination of Fair Market Rent, they, themselves, shall appoint a
third arbitrator, who shall be a competent and impartial person with
qualifications similar to those required of the first two
arbitrators. If they are unable to agree upon such appointment
within five (5) days after expiration of said ten (10) day period,
the third arbitrator shall be selected by the parties themselves, if
they can agree thereon, within a further period of ten (10) days. If
the parties do not so agree, then either party, on behalf of both,
may request appointment of such a qualified person by the then
presiding judge of King County Superior Court. The three (3)
arbitrators shall decide the dispute, if it has not been previously
resolved, by following the procedure set forth in this Section
3.1.3. Where the issue cannot be resolved by agreement between the
two arbitrators selected by Landlord and Tenant or settlement
between the parties during the course of arbitration, the issue
shall be resolved by the three arbitrators in accordance with the
following procedure. The arbitrator selected by each of the parties
shall state in writing his determination of the Fair Market Rent
supported by the reasons therefor with counterpart copies to each
party. The arbitrators shall arrange for a simultaneous exchange of
such proposed resolutions. The role of the third arbitrator shall be
to select which of the two proposed resolutions most closely
approximates his determination of Fair Market Rent. The third
arbitrator shall have no right to propose a middle ground or any
modification of either of the two proposed resolutions. The
resolution he chooses as most closely approximating his
determination shall constitute the decision of the arbitrators and
be final and binding upon the parties. In the event of a failure,
refusal or inability of any arbitrator to act, his successor shall
be appointed by him, but in the case of the third arbitrator, his
successor shall be appointed in the same manner as provided for
appointment of the third arbitrator. The arbitrators shall attempt
to decide the issue within ten (10) days after the appointment of
the third arbitrator. Any decision in which the arbitrator appointed
by Landlord and the arbitrator appointed by Tenant concur shall be
binding and conclusive upon the parties. Each party shall pay the
fee and expenses of its respective arbitrator and both shall share
equally the fee and expense of the third arbitrator, if any, and the
attorneys' fees and expenses of counsel for the respective parties
and of witnesses shall be paid by the respective parties engaging
such counsel or calling such witnesses. The arbitrators shall have
the right to consult experts and competent authorities with factual
information or evidence pertaining to a determination of Fair Market
Rent, but any such consultation shall be made in the presence of
both parties with full right on their part to cross-examination. The
arbitrators shall render their decision and award in writing with
counterpart copies to each party. The arbitrators shall have no
power to modify the provisions of this Lease. Time is of the essence
in this Section 3.1.3.
3.2 Early Possession. If Tenant occupies the Premises before the Commencement
Date of the term, all of Tenant's Lease obligations (including payment of
Operating Expenses, but not Basic Monthly Rent) shall become effective
immediately although such early possession shall not accelerate the Termination
Date of this Lease.
ARTICLE IV RENT
4.1 Basic Monthly Rent. Tenant shall pay to Landlord as rent for the Premises
the Basic Monthly Rent, in advance, on the first day of each month of the term
hereof. Rent for any period during the term hereof which is for less than one
(1) month shall be a pro-rata portion of the monthly installment. Rent shall be
payable without notice or demand and without deduction, offset, or abatement, in
lawful money of the United States of America to Landlord at such address or to
such other persons or at such other places as Landlord may designate in writing.
4.2 Operating Expenses. Tenant shall pay for janitorial service for the Premises
and for electricity used at the Premises, which shall be separately metered (any
meters, if not existing, shall be installed at Landlord's expense). Landlord
shall pay all other operating expenses (defined as the total costs and expenses
in connection with the ownership, operation, maintenance, and repair of the
Property, including, without limitation: taxes, insurance, water, security,
maintenance and repair costs for any building system (such as plumbing, heating,
ventilating, and air conditioning), common area maintenance, roof repair and
replacement, landscaping, common area signage, common area lighting, elevator
maintenance, disposal expenses, and reasonable property management fees. Tenant
shall pay its proportionate share of all increases in operating expenses over
the base year, 1999. Upon Tenant's written request, Landlord shall provide
documentation of any increases.
ARTICLE V SECURITY DEPOSIT
The Security Deposit shall be security for Tenant's full performance of Tenant's
lease obligations. If Tenant fails to pay rent or any other charges due from
Tenant under this Lease, Landlord may elect to apply the Security Deposit toward
the payment of
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such default. If Landlord applies any portion of the Security Deposit, Tenant
shall, on ten (10) days written notice, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to the full amount stated in Article
1; Tenant's failure to do so shall be a default. Landlord may commingle the
Security Deposit with Landlord's other funds and no interest shall be paid or
accrued on the Security Deposit. If Tenant performs all of Tenant's lease
obligations, the Security Deposit (or so much as has not been applied by
Landlord) shall be returned to Tenant (or, at Landlord's option, to the last
assignee, if any, of Tenant's interest under the Lease) within a reasonable
time. Landlord may transfer the security deposit to the purchaser of his
interest in the event of sale and Tenant shall look solely to such purchaser for
return of the deposit.
ARTICLE VI USE
6.1 Allowed Use. The Premises shall be used and occupied only for the Allowed
Use and for no other purpose without prior written consent of Landlord, which
consent may be withheld or conditioned as Landlord deem appropriate within its
sole, unrestricted discretion. The designation of Tenant's Allowed Use shall not
be deemed to be an agreement by Landlord to refrain from leasing other property
to others for a similar use. Tenant shall not use or permit the use of the
Premises in any manner that will tend to create waste or a nuisance, or, if
there shall be more than one (1) tenant of the building containing the Premises,
which shall tend to unreasonably disturb other tenants.
6.2 Compliance with Law. Tenant shall, at Tenant's expense, comply promptly with
all present and future laws and requirements regulating the use of the Premises
by Tenant or Tenant's business together with any laws providing for
accessibility of the Premises, including access by disabled persons (ADA).
Tenant shall not create or allow waste or a nuisance, or unreasonably disturb
any other person.
6.3 Insurance Cancellation. Despite any other provision of this Lease, no use of
the Premises may be made or permitted nor acts done which will adversely affect
or increase the cost of any insurance policy maintained by Landlord.
6.4 Landlord's Rules and Regulations. Tenant shall comply with reasonable
regulations made or changed by Landlord from time to time which regulations
shall not conflict with any express provision of this Lease. Landlord shall not
be responsible to Tenant for the nonperformance of any said rules and
regulations by any other tenants or occupants.
6.5 Exterior Storage. Exterior storage, either permanent or temporary, of any
materials, supplies or equipment in the Common Areas is strictly prohibited.
Should Tenant violate this provision of the Lease, then in such event, Landlord
may, at its option, without notice to Tenant, remove said materials, supplies or
equipment and place such items in storage or dispose of at a refuse facility,
the cost thereof to be reimbursed by Tenant within ten (10) days from receipt of
a statement from Landlord.
6.6 Parking. Tenant shall, for the duration of the Lease term, have the
exclusive use of the two (2) western-most stalls, free of charge, in the upper
level, surface parking area. Tenant acknowledges that the remainder of the upper
level surface parking area shall be reserved on a nonexclusive basis for the
short term use by customers and invitees for those tenants with uses of a
retail, service or consulting nature. Landlord shall provide Tenant with up to
seven (7) additional parking stalls within The Building garage, for which Tenant
shall pay the current market rate, subject to market adjustment not more than
once per year. Employee parking shall be restricted to street parking on the
east and west sides of the Property. Landlord reserves the right, in its sole
discretion, to allocate a portion of the upper level parking lot for employee
parking of certain office tenants. Landlord reserves the right to impose, from
time to time, other reasonable parking regulations for the benefit of all
tenants.
ARTICLE VII MAINTENANCE, REPAIRS AND ALTERATION
7.1 Landlord's Obligation. Except for damage caused or allowed by Tenant, its
agents, representatives, employees, invitees, and/or assigns, Landlord shall
maintain, at Landlord's expense and not as an Operating Expense, the structural
foundations (floor, load-bearing walls), columns, and roof of the Property and
Premises. In this Lease the term "structural foundations" is defined as the
building foundations and footings, and concrete walls.
7.1.1 Common Areas. The term "Common Areas" refers to all areas within the
Property which are made available, from time to time, for general use of all
tenants and Landlord, which areas shall include, but not necessarily be limited
to, parking areas, driveways, sidewalks, landscaped and planted areas, exterior
of the buildings and shared systems on the Property and the like. The Landlord
reserves the right, from time to time, to make changes in the shape, size, and
location and extent of the land and improvements constituting the Common Areas.
During the term of this Lease, Landlord shall operate, manage and maintain the
Common Areas in a neat, clean, and orderly condition, properly lighted and
landscaped, and shall repair any damage to the facilities thereof. Operating
expenses for Common Areas shall include, but not be limited to, all sums
expended in connection with the Common Areas for all general maintenance and
repairs, relocation of facilities, resurfacing, painting of
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the building exterior or common areas, striping, restriping, cleaning, snow
removal, sweeping, janitorial services, maintenance and repair of sidewalks and
curbs, signage, landscaping and irrigation systems, common area lighting and
other utilities; directional signs and other markers and bumpers; and all
maintenance including the repair or patching of the exterior roof, maintenance
and repair of any heating, ventilation and air conditioning system, fire
protection systems, common area lighting systems, storm drainage systems, and
any utility systems; repairs or modifications to the Property for energy or
safety purposes, and replacement of existing capital improvements in the Common
Areas. Except as provided in this Section and as provided in this Lease as to
damage by casualty, Landlord shall have no obligation to make any repair, change
or improvement of the interior of the Premises.
7.2 Tenant's Obligations. Tenant, at Tenant's expense, shall maintain in good
condition and appearance all and every part of the Premises (regardless whether
the damaged portion of the Premises or the means of repairing the same are
directly accessible from the interior of the Premises), including lighting
facilities and equipment within the Premises, fixtures, walls, ceilings, and
glass.
7.3 Construction of Premises. Landlord is, as of the date of this lease,
currently converting the Premises from retail space to office space. Landlord
agrees to complete the construction of the Premises in accordance with the Plans
and Specifications which are attached as Exhibit D (the "Base Plans"). Landlord
has provided an allowance (the "TI Allowance") in the amount of Twenty-Five
Thousand Dollars ($25,000) to improve approximately 2,875 s.f. of ground floor
office. The TI Allowance shall include all costs associated with the
construction of the office improvements including architectural fees, permits
and Washington State sales tax. The office improvements shall be constructed in
accordance with the Base Plans. Any costs associated with the office
improvements in excess of the TI Allowance shall be the responsibility of the
Tenant.
7.3.1 Work Schedule. Attached as Exhibit E is a schedule (the "Work
Schedule") setting forth the estimated timetable for the construction and
completion of the Premises. Landlord shall use its good faith efforts to secure
substantial completion of the work in accordance with the Work Schedule. If
there shall be a delay in substantial completion of the Premises or the issuance
of a Certificate of Occupancy for the same, then the Commencement Date shall be
delayed by the number of days of such delay.
7.3.2 Landlord's Work. Landlord shall construct the Premises substantially
in accordance with the Base Plans. Unless work is shown on the Base Plans as
Landlord's Work or provided to be such herein, Landlord shall have no
responsibility to perform or pay for such work.
7.3.3 Tenant's Work. Tenant shall be responsible for constructing at its
sole cost and expense including all costs for architectural fees, permits, etc.,
any additional improvements to the Premises beyond the improvements identified
as Landlord's Work.
7.3.4 Condition of Premises. Tenant acknowledges that neither Landlord,
nor any agent of Landlord, has made any representation or warranty regarding the
Premises and the Common Areas with respect to their suitability for the conduct
of Tenant's business.
7.4 Surrender. On the Termination Date of this Lease, or on any sooner
termination of this Lease, Tenant shall surrender the Premises to Landlord in
good condition and in accordance with Tenant's maintenance obligations and broom
clean, ordinary wear and tear excepted. Tenant shall patch, fill and paint any
holes resulting from attachment of any of Tenant's trade fixtures, furnishings
and equipment. Lighting, doors, skylights, fixtures, heating, ventilating and
air conditioning systems will all be surrendered in good serviceable condition.
Tenant shall, at Landlord's option, remove any alterations or improvements made
by Tenant without the prior written approval of Landlord.
7.5 Landlord's Rights. If Tenant fails to perform Tenant's maintenance
obligations, Landlord may, at its option (but shall not be required to) enter
the Premises, after ten (10) days prior written notice to Tenant or with no
prior written notice in an emergency, and perform Tenant's maintenance
obligations and Tenant shall immediately, fully reimburse Landlord for such
expense together with interest thereon at the rate of twelve percent (12%) per
annum.
7.6 Alterations and Additions.
7.6.1 Without Landlord's prior written consent, Tenant shall not make any
alterations, improvements or additions to the Premises, except for non-permanent
changes costing less than Ten Thousand Dollars ($10,000) in the aggregate per
year. As a condition of consent, Landlord may require that Tenant be responsible
to remove any such alterations, improvements or additions at the expiration of
the term, and to restore the Premises to the prior condition; Landlord may
impose such other conditions as are reasonable. Tenant shall secure all
governmental permits required in connection with any such work.
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Landlord may, at its sole option, require Tenant, at Tenant's expense, to obtain
for Landlord's benefit a surety bond in an amount equal to the estimated cost of
such work, to insure Landlord and the Property against any liability for liens
arising from such work and to insure completion of the work.
7.6.2 Before commencing any work relating to alterations, additions and
improvements affecting the Premises (none of which are required or requested by
Landlord, nor any obligation of Tenant under this Lease), Tenant shall notify
Landlord in writing of the expected date of commencement thereof Landlord shall
then have the right at any time to maintain on the Premises such notices as
Landlord reasonably deems necessary to protect the Premises and Landlord from
any lien. In any event, Tenant shall pay, when due, all charges incurred by
Tenant. Tenant shall not permit any lien to be asserted against the Premises or
Property for any charge incurred or alleged to have been incurred by Tenant, and
Tenant shall indemnify, defend Landlord against, and hold Landlord harmless from
any and all liability, costs, damages therefrom.
7.6.3 Unless Landlord requires removal, as provided elsewhere in this
Lease, all alterations, improvements or additions which may be made on the
Premises shall become the property of Landlord and remain upon and be
surrendered with the Premises at the expiration of the term; provided Tenant's
machinery, equipment and trade fixtures, other than that which is affixed to the
Premises so that it cannot be removed without material damage to the Premises,
shall remain the property of Tenant and may be removed by Tenant prior to the
end of the term of the Lease and subject to Tenant's obligations to maintain the
Premises.
ARTICLE VIII HAZARDOUS SUBSTANCES
8.1 As used in this Lease, the term "Hazardous Substance" means any substance or
material, the storage, use or disposal of which is or becomes regulated under
any law, now or hereafter in effect.
8.2 Landlord warrants to Tenant that Landlord has not released or deposited on
the Premises any Hazardous Substance, and Landlord has no knowledge of the
presence of any Hazardous Substance on the Premises.
8.3 Without Landlord's prior written consent, Tenant shall not receive, store or
otherwise allow any Hazardous Substance on the Premises or Property, except
Hazardous Materials that are (A) used in Tenant's normal operation of properties
similar to the Premise, provided the same are used, stored, or otherwise managed
and disposed of in compliance in all material respects with applicable
environmental laws, or (B) approved in writing by Landlord. In the event of any
release by Tenant, its agents, representatives, employees, invitees, and/or
assigns of any Hazardous Substances on or about the Premises or Property
occurring on or after the Commencement Date of this Lease, Tenant agrees to
immediately, fully and completely remove (and to dispose of such in accordance
with applicable law) all of such Hazardous Substance from the Premises or
Property even if the quantity or concentration of such Hazardous Substance would
not require remediation under the provisions of law. Tenant further agrees to
defend, indemnify, and hold harmless Landlord, its employees, agents and
contractors and Lender from and against any and all losses, claims, liabilities,
damages, demands, fines, costs, and expenses (including reasonable attorneys'
fees) arising out of or resulting from any release by Tenant, its agents,
representatives, employees, invitees, and/or assigns of any Hazardous Substances
on or about the Premises or Property; the provisions of this sentence shall
survive (and be enforceable after) the termination or expiration of this Lease
and the surrender of the Premises by Tenant. If Tenant becomes aware of the
release or presence on the Premises or Property of any Hazardous Substance,
Tenant shall immediately advise Landlord of such release or presence, and Tenant
further shall provide Landlord with copies of any reports, studies,
recommendations or requirements received by Tenant from any third person
including a governmental agency.
ARTICLE IX INSURANCE; INDEMNITY
9.1 Payment of Premium. "Insurance Premiums " are the actual cost of the
insurance applicable to improvements on the Property and required to be carried
by Landlord by this Lease and include, but are not limited to, requirements of a
Lender. Landlord shall pay the cost of Insurance Premiums.
9.2 Liability Insurance.
9.2.1 Carried by Tenant. Tenant shall, at Tenant's sole cost and expense,
obtain and keep in force during the term of this Lease a commercial
(comprehensive) liability insurance policy protecting Tenant, Landlord and any
Lender(s) whose names have been provided to Tenant in writing (as additional
insureds) against claims for bodily injury, personal injury and property damage
based upon, involving or arising out of the ownership, use, occupancy or
maintenance of the Premises. For the purposes of this Lease, a "Lender" is a
mortgagee under a mortgage or a beneficiary under a deed of trust granted by
Landlord or Landlord's predecessor and which is a lien on the Premises. Such
insurance shall be on an occurrence basis providing single limit coverage in an
amount not less than $1,000,000 per occurrence with an "Additional Insured -
Managers
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or Landlords of Premises" endorsement and contain the "Amendment of the
Pollution Exclusion" endorsement for damage caused by heat, smoke or fumes from
a hostile fire. The policy shall not contain any inter-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an "insured contract" for the performance
of Tenant's indemnity obligations under this Lease. The limits of said insurance
required by this Lease or as carried by Tenant shall not, however, limit the
liability of Tenant nor relieve Tenant of any obligation hereunder. All
insurance to be carried by Tenant shall be primary to and not contributory with
any similar insurance carried by Landlord, whose insurance shall be considered
excess insurance only.
9.2.2 Carried by Landlord. Landlord may also maintain liability insurance
similar to that described in the preceding Section, in addition to and not in
lieu of, the insurance required to be maintained by Tenant. Tenant shall not be
named as an additional insured therein.
9.3 Property Insurance - Building, Improvements and Rental Value.
9.3.1 Building and Improvements. Landlord shall obtain and keep in force
during the term of this Lease a policy or policies in the name of Landlord, with
loss payable to Landlord and to any Lender(s), insuring against loss or damage
to the Premises with such deductible amount as is selected by Landlord. Such
insurance shall be for full replacement cost, as the same shall exist from time
to time, or the amount required by any Lender(s), but in no event more than the
commercially reasonable and available insurable value thereof if, by reason of
the unique nature or age of the improvements involved, such latter amount is
less than full replacement cost. If the coverage is available and commercially
reasonable, Landlord's policy or policies may insure against all risks of direct
physical loss or damage (including the perils of flood and/or earthquake),
including coverage for any additional costs resulting from debris removal and
reasonable amounts of coverage for the enforcement of any ordinance or law
regulating the reconstruction or replacement of any undamaged sections of the
Premises required to be demolished or removed by reason of the enforcement of
any building, zoning, safety or land use laws as the result of a covered loss.
Such policies may also contain an agreed valuation provision in lieu of any
co-insurance clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage amount by a factor
selected by the insurer.
9.3.2 Rental Value. Landlord shall also obtain and keep in force during
the term of this Lease a policy or policies in the name of Landlord, with loss
payable to Landlord and any Lender(s), insuring the loss of the full rental and
other charges payable by Tenant to Landlord for one year. Said insurance may
provide that in the event the Lease is terminated by reason of an insured loss,
the period of indemnity for such coverage shall be extended beyond the date of
the completion of repairs or replacement of the Premises, to provide for one
full year's loss of rental revenues from the date of any such loss. Said
insurance shall contain an agreed valuation provision in lieu of any
co-insurance clause, and the amount of coverage shall be adjusted annually to
reflect the projected payments payable by Tenant for the next 12-month period.
9.4 Tenant's Property Insurance. Tenant, at its sole cost and expense, shall
maintain insurance coverage on all of Tenant's personal property, trade fixtures
and Tenant-owned alterations and improvements in the Premises similar in
coverage to that required by this Lease to be carried by Landlord. Such
insurance shall be full replacement cost coverage with a deductible not to
exceed Five Thousand Dollars ($5,000) per occurrence. The proceeds from any such
insurance shall be used by Tenant for the replacement of personal property,
trade fixtures and the restoration of any Tenant owned improvements. Upon
request from Landlord, Tenant shall provide Landlord with written evidence that
such insurance is in force.
9.5 Insurance Policies. Insurance required hereunder shall be in companies duly
licensed to transact business in the state where the Premises are located, and
maintaining during the policy term a "General Policyholders Rating" of at least
B+, V or such other rating as may be required by a Lender, as set forth in the
most current issue of "Best's Insurance Guide." Tenant shall not do or permit to
be done anything which shall invalidate the insurance policies maintained by
Landlord. Tenant shall cause to be delivered to Landlord, within seven (7) days
after the earlier of the Early Possession Date or the Commencement Date,
certified copies of, or certificates evidencing the existence and amounts of,
the insurance required of Tenant by this Lease. No such policy shall be
cancelable or subject to modification except after thirty (30) days' prior
written notice to Landlord. At least thirty (30) days prior to the expiration of
such policies, Tenant shall furnish Landlord with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Landlord, after notice to
Tenant and a reasonable opportunity for Tenant to cure, may obtain such
insurance and charge the cost thereof to Tenant, which amount shall be payable
by Tenant to Landlord upon demand.
9.6 Waiver of Subrogation. Without affecting any other rights or remedies,
Tenant and Landlord each hereby release and relieve the other, and waive their
entire right to recover damages (whether in contract or in tort) against the
other, for loss or damage to their property arising out of or incident to the
perils required to be insured against under this Lease to the actual extent of
the insurance actually retained. Landlord and Tenant agree to have their
respective insurance companies issuing
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property damage insurance waive any right to subrogation that such companies may
have against Landlord or Tenant, as the case may be, so long as the insurance is
not invalidated thereby.
9.7 Indemnity.
9.7.1 Landlord's Indemnity. Except to the extent of Tenant's comparative
negligence or breach of an express provision of this Lease, Landlord shall
indemnify, protect, defend and hold harmless the Tenant from and against all
claims, loss of rent and damages, costs, liens, judgments, penalties, loss of
permits, attorneys' and consultants' fees, expenses and liabilities arising out
of any act, omission or neglect of Landlord, its agents, contractors, employees
or invitees, and out of any Default or Breach by Landlord in the performance in
a timely manner of any obligation on Landlord's part to be performed under this
Lease. The foregoing shall include, but not be limited to, the defense or
pursuit of any claim or any action or proceeding involved therein, and whether
or not (in the case of claims made against Tenant) litigated or reduced to
judgment. In case any action or proceeding be brought against Tenant by reason
of any of the foregoing matters, Landlord upon notice from Tenant shall defend
the same at Landlord's expense by counsel reasonably satisfactory to Tenant and
Tenant shall cooperate with Landlord in such defense. Tenant need not have first
paid any such claim in order to be so indemnified. In the event of concurrent
negligence of Landlord and Tenant resulting in injury or damage to persons or
property and which relates to the construction, alterations, repair, addition
to, subtraction from, improvement to or maintenance of the Premises, the
indemnifying parties obligation to indemnify the other party as set forth in
this Section shall be limited to the extent of the indemnifying party's
negligence, and that of its agents, employees, sublessees, invitees, licensees
or contractors.
9.7.2 Tenant's Indemnity. Except to the extent of Landlord's comparative
negligence or breach of an express provision of this Lease, Tenant shall
indemnify, protect, defend and hold harmless the Landlord and its Lenders from
and against all claims, loss of rent and damages, costs, liens, judgments,
penalties, loss of permits, attorneys' and consultants' fees, expenses and
liabilities arising out of, involving, or in connection with, the occupancy of
the Premises by the Tenant, the conduct of the Tenant's business, any act,
omission or neglect of Tenant, its agents, contractors, employees or invitees,
and out of any Default or Breach by Tenant in the performance in a timely manner
of any obligation on Tenant's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of any
claim or any action or proceeding involved therein, and whether or not (in the
case of claims made against Landlord) litigated or reduced to judgment. in case
any action or proceeding be brought against Landlord by reason of any of the
foregoing matters, Tenant upon notice from Landlord shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord and Landlord
shall cooperate with Tenant in such defense. Landlord need not have first paid
any such claim in order to be so indemnified. In the event of concurrent
negligence of Landlord and Tenant resulting in injury or damage to persons or
property and which relates to the construction, alterations, repair, addition
to, subtraction from, improvement to or maintenance of the Premises, the
indemnifying parties obligation to indemnify the other party as set forth in
this Section shall be limited to the extent of the indemnifying party's
negligence, and that of its agents, employees, sublessees, invitees, licensees
or contractors.
9.8 Exemption of Landlord from Liability. Except as provided in Section 9.7.1,
Landlord shall not be liable for injury or damage to the person or property of
Tenant, Tenant's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether said injury or damage results from conditions arising upon the
Premises or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
Notwithstanding Landlord's negligence or breach of this Lease, Landlord shall
under no circumstances be liable for any loss of income or profit of Tenant's
business or any other consequential damage.
ARTICLE X DAMAGE OR DESTRUCTION
10.1 Partial Damage - Insured. If the Premises or Property are Partially Damaged
and such damage was caused by a casualty covered under an insurance policy
required to be maintained by Tenant or Landlord pursuant to this Lease, Landlord
shall repair such damage as soon as reasonably possible, and this Lease shall
continue in full force and effect. If, however, the insurance proceeds actually
available to Landlord (after deduction of any proceeds required by a Lender to
be applied to reduction of indebtedness) are not sufficient to effect such
repair, Landlord shall not be obligates to make such repairs unless Tenant
elects, without obligation to do so, to contribute, without right of
reimbursement, the required amount. In the event that Landlord is not obligated
and does not voluntarily agree to repair such damage, either Tenant or Landlord
may declare this Lease terminated by thirty (30) days written notice to the
other party.
10.2 Damage - Uninsured. In the event the Premises are damaged or destroyed by a
casualty which is not covered under an insurance policy required to be
maintained by Tenant or Landlord, the Landlord may elect to repair such damage
as soon as reasonably possible, and this Lease shall continue in full force and
effect. If Landlord does not so elect within thirty (30) days
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after the occurrence of the casualty to repair, either Tenant or Landlord may
declare this Lease terminated by ten (10) days written notice to the other
party; provided Tenant may avoid termination of this Lease if Tenant voluntarily
agrees to pay, without right of reimbursement, all of the costs of such repairs
by Landlord.
10.3 Total Destruction. If the Premises are Totally Destroyed by a casualty
covered under an insurance policy required to be maintained by Tenant or
Landlord pursuant to this Lease, this Lease shall automatically terminate as of
the date of such total destruction.
10.4 Damage Near End of Term. If the premises are Partially Damaged during the
last two (2) years of the term of this Lease, Landlord may, at Landlord's
option, cancel and terminate this Lease as of the date of occurrence of such
damage by giving written notice to Tenant of Landlord's election to do so within
thirty (30) days after Landlord receives notice of occurrence of such damage;
provided Landlord shall continue to have all rights to receive the proceeds of
any insurance policy required by the Lease to be maintained by Tenant.
10.5 Abatement of Rent. If the Premises are Partially Damaged, the rent payable
while such damage, repair or restoration continues shall be abated in proportion
to the degree to which Tenant's reasonable use of the Premises is impaired.
Except for abatement of rent, if any, Tenant shall have no claim against
Landlord for any damage suffered by reason of any such damage, destruction,
repair or restoration.
10.6 Definitions. For the purposes of this Lease, the term Partially Damaged
shall be deemed to mean damage to the Premises (excluding any damage to Tenant
owned property or alterations) which is reasonably estimated to cost to repair
less than fifty percent (50%) and Totally Destroyed shall be deemed to mean
damage to the Premises or Property (excluding any damage to Tenant owned
property or alterations) which is reasonably estimated to cost to repair more
than fifty percent (50%) of the reasonable fair market value of the improvements
constituting the Premises (but not the land) calculated immediately prior to the
occurrence of the damage. Cost shall include the cost to rebuild all of the
damaged improvements owned by Landlord including demolition, debris removal,
requirements of applicable building codes and other laws, mitigation
requirements and without regard for depreciation.
ARTICLE XI TAXES
11.1 Taxes. As used herein, the term Taxes shall include any form of required
payment, assessment, license fee, tax on rent, levy, penalty, or tax (other than
Landlord's net income tax and inheritance or estate taxes) imposed by any
authority having the direct or indirect power to tax any legal or equitable
interest of Landlord in the Property or Landlord's right to rent or other income
therefrom.
11.2 Personal Property Taxes. Tenant shall pay prior to delinquency all taxes
assessed against and levied on any leasehold improvements, fixtures,
furnishings, equipment and other property of Tenant. Tenant shall cause such
Tenant property to be assessed separately from Landlord's Property or reimburse
Landlord for the taxes attributable to Tenant within ten (10) days after receipt
of a written statement from Landlord setting forth the taxes applicable to
Tenant's property.
ARTICLE XII UTILITIES
With the exception of electricity, which shall be separately metered for the
Premises, and telephone service, Landlord shall pay for all utilities serving
the Premises, which shall include all water, gas, drainage service, sewer
service, garbage service, and other utilities and services supplied to the
Premises, together with any taxes thereon. If the Landlord shall determine, in
the exercise of Landlord's good faith review, that the Tenant's use of utilities
is in excess of that normally used by a tenant occupying similar space, then
Tenant shall pay Landlord upon demand as additional rent, the cost of such
excess utility usage in addition to any other rent or charge due from Tenant
under this Lease. In no event shall Landlord be liable for an interruption or
failure in the supply of any such utilities to the Premises.
ARTICLE XIII ASSIGNMENT AND SUBLETTING
13.1 Landlord's Consent Required. Tenant shall not voluntarily or by operation
of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all
or any part of Tenant's interest in this lease or the Premises without
Landlord's prior written consent, which consent may be conditioned, in addition
to any other reasonable conditions, on a written assumption by the assignee or
sublessee of the obligations of Tenant, a written guarantee of payment and
performance by Tenant and a consent or reaffirmation of any guarantor of Tenant.
Any purported assignment, transfer, mortgage, encumbrance, or subletting without
consent shall be void and constitute a breach of this Lease. No option to renew
or extend, if any, may be assigned by Tenant and no assignee or subtenant shall
have any right to exercise any such option. The acceptance of rent by
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Landlord from a person other than Tenant shall not be deemed to be a waiver by
Landlord of any provision hereof. Consent to one assignment or subletting shall
not be deemed consent to any subsequent assignment or subletting.
13.2 No Release of Tenant. Regardless of Landlord's consent, no subletting or
assignment shall release Tenant's primary obligation to pay or perform any
obligation under this Lease.
13.3 Assignment Fee. In the event that Landlord shall consent to a sublease or
assignment under Article 13.1, Tenant agrees to reimburse Landlord for the
reasonable out-of-pocket expenses incurred by Landlord in connection with such
consent.
13.4 Assignment by Landlord. Landlord shall be permitted freely to assign all of
its rights and obligations hereunder. In the event of a sale or other transfer
of the Premises, whether by foreclosure or otherwise, in connection with a sale
or financing of the Property the Tenant agrees to attorn to the new owner and to
recognize such owner as the Landlord under this Lease and Tenant shall
thereafter look solely to such transferee for performance of this Lease, with
respect to obligations arising after such transfer. Landlord will notify Tenant
in the event of an assignment, thereby establishing that all future liability
and/or obligations of Tenant under this Lease shall be to assignee.
13.5 Permitted Assignment. Notwithstanding the foregoing, Tenant shall be
permitted without Landlord's consent to assign this lease or sublet the Premises
to any Affiliated Entity. The term "Affiliated Entity" includes any parent,
successor by merger, or subsidiary of the Tenant and any person controlled by or
under the common control with the Tenant, and any partnership of which the
Tenant or any parent, successor by merger, or subsidiary of the Tenant, or any
person controlled by or under common control with the Tenant, is a partner;
provided, however, that Tenant shall not, without Landlord's prior written
consent and approval (which written consent and approval shall not be
unreasonably withheld or delayed) assign or sublet the Premises to any such
partnership unless such partnership has a net worth equal to or surpassing that
of Tenant.
ARTICLE XIV DEFAULTS; REMEDIES
14.1 Defaults. The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Tenant:
14.1.1 The vacation or abandonment of the Premises by Tenant.
14.1.2 The failure by Tenant to make any payment required to be made by
Tenant hereunder, as and when due where such failure shall continue for a period
of three (3) days after written notice thereof from Landlord to Tenant.
14.1.3 The failure by Tenant to observe or perform any of the provisions
of this Lease (other than the payment of money) to be observed or performed by
Tenant where such failure shall continue for a period of ten (10) days after
written notice thereof from Landlord to Tenant; provided, however, that if the
nature of Tenant's default is such that more than thirty (30) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commenced such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.
14.1.4 The making by Tenant or any guarantor of Tenant of any general
assignment, or general assignment for the benefit of creditors; (ii) the filing
by or against Tenant or any guarantor of Tenant of a petition to have Tenant
adjudged a bankrupt or petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days; (iii) the appointment of a trustee
or receiver to take possession of substantially all of Tenant's assets located
at the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within ten (10) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within ten (10) days.
14.2 Remedies in Default. Subject to applicable law, Upon the occurrence of a
Default by Tenant, Landlord, without notice to Tenant (except where expressly
provided for in this Lease or by applicable law) may do any one or more of the
following:
14.2.1 Elect to terminate this Lease and the tenancy created hereby by
giving notice of such election to Tenant, and reenter the Premises, and remove
Tenant and all other persons and property from the Premises, and may store such
property in a public warehouse or elsewhere at the cost of and for the account
of Tenant without Landlord being deemed guilty of trespass or becoming liable
for any loss or damage occasioned thereby; and
14.2.2 Exercise any other legal or equitable right or remedy which it may
have.
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14.3 Damages. If this Lease is terminated by Landlord pursuant to this section,
Tenant nevertheless shall remain liable for (a) any rents and damages which may
be due or sustained prior to such termination, all reasonable costs, fees and
expenses including, but not limited to, reasonable attorneys' fees, costs and
expenses incurred by Landlord in pursuit of its remedies hereunder, or in
re-letting the Premises to others from time to time until the original
Termination Date of this Lease (all such rents, damages, costs, fees and
expenses being referred to herein as "Termination Damages"), and (b) additional
damages ("Post-Termination Damages"). In the event of Default by Tenant,
Tenant's total liability shall be limited to the remaining gross Lease value.
Post-Termination Damages, at the election of Landlord, shall be either:
14.3.1 an amount equal to the rents which, but for termination of this
Lease, would have become due during the remainder of the Term, less the amount
of rents, if any, which Landlord shall receive during such period from others to
whom the Premises may be rented, in which case such Post-Termination Damages
shall be computed and payable in monthly installments, in advance, on the first
day of each calendar month following termination of the Lease and continuing
until the date on which the Term would have expired but for such termination,
and any suit or action brought to collect any such Post-Termination Damages for
any month shall not in any manner prejudice the right of Landlord to collect any
Post-Termination Damages for any subsequent month by a similar proceeding; or
14.3.2 an amount equal to the present worth (as of the date of such
termination) of rents which, but for termination of this Lease, would have
become due during the remainder of the Term, less the fair rental value of the
Premises, as determined by an independent real estate appraiser named by
Landlord, in which case such Post-Termination Damages shall be payable to
Landlord in one lump sum on demand and shall bear interest at the Default Rate
until paid. For purposes of this section, "present worth" shall be computed by
discounting such amount to present worth at a discount rate equal to one
percentage point above the discount rate then in effect at the Federal Reserve
Bank nearest to the Premises; provided that Tenant may avoid the application of
this section so long as Tenant voluntarily agrees to pay, and, in fact, does pay
all sums due to date under the immediately preceding section within forty-five
(45) days of receipt of notice of Landlord's declaration of the termination of
this Lease and Tenant continues thereafter to pay such amounts monthly until the
Termination Date.
14.4 Miscellaneous. If Landlord elects to terminate this Lease following the
default of Tenant, Landlord may relet the Premises or any part thereof, alone or
together with other premises, for such term or terms (which may be greater or
less than the period which otherwise would have constituted the balance of the
Term) and on such terms and conditions (which may include concessions or free
rent, alterations of the Premises and payment of brokers) as Landlord, in its
sole discretion, may determine, and the costs thereof shall be included in the
total of Landlord's Termination Damages which shall be paid by Tenant. Nothing
contained in this Lease shall limit or prejudice the right of Landlord to prove
for and obtain, in proceedings for the termination of this Lease by reason of
bankruptcy or insolvency, an amount equal to the maximum allowed by any statute
or rule of law in effect at the time when, and governing the proceedings in
which, the damages are to be proved, whether or not the amount be greater, equal
to, or less than the amount of the loss or damages referred to above. The
failure or refusal of Landlord to relet the Premises or any part or parts
thereof shall not release or affect Tenant's liability for damages.
14.5 Default By Landlord. Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event sooner than ten (10) days after written notice by Tenant to Landlord and
any Lender whose name and address shall have been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligation;
provided, however, that the nature of the Landlord's obligation is such that
more than thirty (30) days are required for performance, then Landlord shall not
be in default if Landlord commences performances within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
14.6 Late Charges and Interest. Tenant hereby acknowledges that late payment by
Tenant to Landlord of any sum due under this Lease will cause Landlord to incur
costs not contemplated by this Lease and the amount of which is difficult to
predict in advance. Accordingly, if any sum due from Tenant shall not be
received by Landlord within ten (10) days after that said amount is due, then
Tenant shall pay to Landlord a late charge of five percent (5%) of such overdue
amount. In addition, any amount due to Landlord not paid when due shall bear
interest at twelve percent (12%) per annum ("Default Rate") from the due date.
Payment of such interest or late charge shall not excuse or cure any default by
Tenant under this Lease. In the event that a check from Tenant is returned
unpaid by Tenant's bank, Tenant shall pay an additional returned check charge of
twenty-five dollars ($25) which Tenant agrees is reasonable and which is in
addition to a late charge and interest charges if otherwise applicable.
14.7 Cure by Landlord. Landlord, at any time after Tenant commits a default, may
cure the default at Tenant's cost. If Landlord at any time pays any sum or does
any act that requires the payment of any sum, repayment of the sum paid by
Landlord shall be due immediately from Tenant together with interest at the
Default Rate.
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14.8 Condemnation. If all of the Premises or any portion of the Premises which
is reasonably necessary for the reasonably convenient use of the Premises are
taken under the power of eminent domain, or sold by Landlord under the threat of
the exercise of said power (all of which is in referred to in this Lease as
"condemnation") or if more than twenty-five percent (25%) of the floor area of
all buildings constituting the Premises, or more than fifty percent (50%) of the
parking areas on the Property is taken by condemnation, either Landlord or
Tenant may terminate this Lease as of the date the condemning authority takes
possession by notice in writing of such election within twenty (20) days after
Landlord shall have notified Tenant of the taking, or, in the absence of such
notice, then within twenty (20) days after the condemning authority shall have
taken possession. If this Lease is not terminated by either Landlord or Tenant
then it shall remain in full force and effect as to the portion that the
Premises remaining, provided the Basic Monthly Rent shall be reduced by the
proportion to the floor area of the Premises taken by condemnation bears to the
total floor area of the Premises. All awards for the taking of any part of the
Premises or any payment made under the threat of the exercise of power of
eminent domain shall be the property of Landlord, whether made as compensation
for diminution of value of the leasehold or for the taking of the fee or as
severance damages; provided, however, that Tenant shall be entitled to any
separately made award for moving and relocation expenses, loss of or damage to
Tenant's trade fixtures and removable personal property.
ARTICLE XV GENERAL PROVISIONS
15.1 Reasonableness of Consent. Whenever the consent of Landlord or Tenant is
required by the terms of this Lease, such consent shall not be unreasonably
withheld or delayed although it may be subject to reasonable conditions.
15.2 Payments Are Rent. All payments due to Landlord from Tenant shall be deemed
to be rent due under this Lease.
15.3 Estoppel Certificate.
15.3.1 Each of Landlord and Tenant shall, at any time, on not less than
fifteen (15) days prior written notice from Landlord, sign and deliver to the
other a statement in writing (i) 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 rent, security deposit, and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to such party's
knowledge, any uncured defaults on the part of Landlord or Tenant under this
lease, or specifying such defaults, if any, which are claimed, and agreeing to
give reasonable written notice to a Lender of any future default. Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises.
15.3.2 Tenant's failure to deliver such statement within such time period
shall be conclusive upon Tenant that (i) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) there are no
uncured defaults in Landlord's performance, and (iii) not more than one (1)
month's rent has been paid in advance.
15.3.3 If Landlord desires to sell, finance or refinance the Property, or
any part thereof, Tenant hereby agrees to deliver to any Lender designated by
Landlord such financial statements of Tenant as may be reasonably required by
such Lender. Such statements shall include the past three (3) years financial
statements of Tenant. All such financial statements shall be received by
Landlord in confidence and shall be used only for the purposes herein set forth.
15.4 Landlord's Interest. The term "Landlord" as used herein shall mean only the
owner or owners at the time in question of the fee title, vendee's interest
under a real estate contract, or a tenant's interest in a ground lease of the
Premises. In the event of any transfer of such title or interest, Landlord
herein named (and in case of any subsequent transfers, the then grantor) shall
be relieved from and after the date of such transfer of all liability as
respects Landlord's obligations thereafter to be performed, provided that any
funds in the hands of Landlord or the then grantor at the time of such transfer,
in which Tenant has an interest, shall be delivered to the grantee. The
obligations contained in this Lease to be performed by Landlord shall be binding
upon Landlord's successors and assigns, only during their respective periods of
ownership.
15.5 Signs. At Tenant's own expense, Tenant may place one or more signs on the
Property so long as (i) Tenant has obtained Landlord's prior written consent for
the specific sign proposed by Tenant, (ii) such sign(s) conform to all
applicable governmental rules and regulations, (iii) Tenant maintains such sign
is good condition and appearance and (iv) at the termination of this Lease,
Tenant shall remove all such signs and repair any damage caused by such sign or
its removal at Tenant's sole expense.
15.6 Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
15.7 Time of Essence. Time is of the essence.
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15.8 Captions. Article and paragraph captions are for convenience only are not a
part of this Lease.
15.9 Incorporation of Prior Agreement; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
agreement or understanding pertaining to any such matter shall be effective.
This Lease may be modified in writing only, signed by the parties in interest at
the time of the modification.
15.10 Waiver. No waiver by Landlord of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provision. Landlord's consent to or approval of any act
shall not be deemed to render unnecessary the obtaining of Landlord's consent to
or approval of any subsequent act by Tenant. The acceptance of rent hereunder by
Landlord shall not be a waiver of any preceding breach by Tenant of any
provision hereof, other than the failure of Tenant to pay the particular rent so
accepted regardless of Landlord's knowledge of such preceding breach at the time
of acceptance of such rent.
15.11 Recording. Tenant shall not record this Lease or allow the filing of a UCC
financing statement containing the legal description of the Property without
Landlord's prior written consent, and such recordation or filing shall, at the
option of Landlord, constitute a noncurable default of Tenant hereunder.
15.12 Holding Over. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term hereof without the express written
consent of Landlord, such occupancy shall be a tenancy from month to month at a
rental equal to one hundred fifty percent (150%) of the Basic Monthly Rent due
for the last month of the Lease term plus all other charges payable hereunder,
and upon the terms hereof applicable to a month to month tenancy.
15.13 Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive, but shall wherever possible, be cumulative with all other remedies at
law or in equity.
15.14 Covenants and Conditions. Each provision of this Lease performable by
Tenant shall be deemed both a covenant and a condition.
15.15 Binding Effect; Choice of Law; Proration. Subject to any provisions hereof
restricting assignment or subletting by Tenant or as may be expressly provided
in this Lease, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the state where the Premises are located.
15.16 Subordination.
15.16.1 This Lease, at Landlord's option, shall be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation for security
now or hereafter placed upon the real property of which the Premises are a part
and to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof. If any
Lender or ground lessor shall elect to have this Lease prior to the lien of its
mortgage, deed of trust or ground lease, and shall give written notice thereof
to Tenant, this Lease shall be deemed prior to such mortgage, deed of trust, or
ground lease, regardless whether this Lease is dated prior or subsequent to such
mortgage, deed of trust or ground lease, or the date of recording thereof.
15.16.2 Provided that the mortgagee or beneficiary, as the case may be,
shall agree to recognize this Lease in the event of foreclosure if Tenant is not
in default at such time subject to such provisions relating to the disposition
or application of insurance or condemnation proceeds as may be contained in such
mortgagee or beneficiary's loan documents, Tenant agrees to execute any
documents required to effectuate such subordination or to make this Lease prior
to the lien of any mortgage, deed of trust or ground lease, as the case may be,
and failing to do so within ten (10) days after written demand, does hereby
make, constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact
and in Tenant's name, place and stead, to do so.
15.17 Attorneys Fees. If Tenant or Landlord brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, on trial or appeal, shall be entitled to his reasonable attorneys fees
to be paid by the losing party as fixed by the court.
15.18 Landlord's Access. Landlord and Landlord's agents shall have the right to
enter the Premises at reasonable times for the purpose of inspecting the same,
showing the same to prospective purchasers or Lenders, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part as Landlord may deem necessary or desirable.
Landlord may at any time place on or about the Premises signs advertising the
availability for sale of the Property or a portion thereof, and, during the last
one hundred twenty (120) days of the term of this Lease, Landlord may place
signs on
13
the Premises advertising the availability for lease of the Premises so long as
such signs do not unreasonably obscure Tenant's existing signs identifying its
business.
15.19 Auctions. Tenant shall not advertise or conduct any auction or going out
of business sale in the Premises.
15.20 Corporate Authority. If Tenant is a legal entity, each individual
executing this Lease on behalf of such entity represents and warrants that he or
she is duly authorized to execute and deliver this Lease on behalf of such
entity and that this Lease is binding upon such entity in accordance with its
terms.
15.21 Landlord's Liability. Any claim by Tenant against Landlord shall be
limited to the Landlord's interest in the Property, and Tenant expressly waives
any and all rights to proceed against any other assets of Landlord or any owner
of Landlord.
15.22 Notices. Wherever under this Lease provision is made for any demand,
notice or declaration of any kind, or where it is deemed desirable or necessary
by either party to give or serve any such notice, demand or declaration to the
other party, it shall be in writing and served either personally or sent by
registered or certified United States mail, postage prepaid, addressed to the
address stated at the beginning of this Lease or such subsequent address as may
have been specified for such purpose in a written notice given to the other
party.
15.23 Arbitration. Any dispute or difference which shall arise between the
parties relating to the construction, meaning or effect of this Lease, or of the
rights or liabilities of the parties hereunder, shall be referred to arbitration
by a single arbitrator unless such arbitrator does not have the legal authority
to provide the complete remedy or complete relief sought by the initiating party
or if any person or entity relevant to such dispute or difference cannot be
brought before the arbitrator and bound by the judgment thereof. If the parties
cannot agree, within ten (10) days of demand of a party on the identity of the
arbitrator, the Presiding Judge of the Superior Court for King County, upon an
appropriate request which either party may make, shall appoint the arbitrator.
15.24 Resolutions. Contemporaneously with the signing of this Lease, Tenant
shall provide to Landlord a certified copy of resolutions of its board of
directors authorizing the execution and delivery of this Lease by its specified
representative.
15.25 Broker Commissions. Tenant hereby warrants and represents to Landlord that
Tenant has not engaged or dealt with any broker, finder or other person (other
than the brokers listed in Paragraph 1.15, Agency Disclosure) who would be
entitled to any commission or fees for the negotiation, execution, or delivery
of this Lease. Tenant shall indemnify and hold Landlord harmless against any
loss, cost, liability or expense incurred by Landlord as a result of any claim
asserted by such broker or finder on the basis of any arrangements or agreements
made or alleged to have been made by or on behalf of Tenant. Landlord shall pay
Tenant's agent a standard real estate fee in the amount of five percent (5%) of
the gross lease value, one half due upon lease execution, one half upon lease
commencement.
15.26 Exhibits. The Exhibits as listed in Article I are attached and are a part
of this Lease:
LANDLORD: TENANT:
BY: /s/ ▇▇▇ ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------- ----------------------
ITS: Manager ITS: Chairman
-------------- ----------------------
▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the
person who appeared before me, and said person acknowledged that he signed this
instrument, on oath stated that he was authorized to execute the instrument and
acknowledged it as the _________________ of ____________________, to be the free
and voluntary act of such party for the uses and purposes stated therein.
Dated: 03/01/99
Name: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
NOTARY PUBLIC, state of Washington
My appointment expires 07/28/02
TENANT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that ▇▇▇ ▇▇▇▇▇▇, is the
person who appeared before me, and said person acknowledged that he signed this
instrument, on oath stated that he was authorized to execute the instrument and
acknowledged it as the Manager of Eastlake at ▇▇▇▇▇▇, LLC, to be the free and
voluntary act of such party for the uses and purposes stated therein.
Dated: 03/03/99
Name: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
NOTARY PUBLIC, state of Washington
My appointment expires 11/18/01
15
Exhibit "A"
LEGAL DESCRIPTION
▇▇▇▇ ▇▇, ▇▇ & ▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ADDITION TO CITY OF SEATTLE ACCORDING TO
PLAT RECORDED IN VOLUME 7 OF PLATS PAGE 34 RECORDS OF KING COUNTY, WA.
16
Exhibit "B"
PREMISES
[diagram]
17
Exhibit "C"
BASE RENT SCHEDULE
Months 1 - 36 March 1, 1999 to February 28, 2002 $4,312.50 per month
18
Exhibit "D"
BASE PLANS
▇▇▇▇▇ CONSTRUCTION SERVICES, INC.
Scope of Work
December 21, 1998
Revised January 25, 1999
Eastlake and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇.▇▇▇
The following scope of work is based on a verbal outline by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of
▇▇▇ ▇▇▇▇▇▇ Inc.
General Conditions includes the following:
a) A project duration of three weeks
b) Building permit obtained by General Contractor. Cost of permit paid
by owner.
Asbestos Removal includes the following:
a) Asbestos testing and removal, if required, provided by landlord
Continuous and Final Clean includes the following:
a) Continuous clean up of jobsite during construction
b) Final cleaning by landlord
Demolition includes the following:
a) Remove damaged ceiling tile and grid in conference room area
b) Remove pipe stubs in floor
d) Remove approximately 27 LF built in cabinet stem wall
d) Remove mirror trim from two columns
e) Remove steel pedestals mounted in floor
f) Remove miscellaneous debris found in space
g) Remove carpet and pad
h) Dump fees for above debris
Insulation includes the following:
a) Approximately 380 SF insulation
Wood Doors includes the following:
a) One (1) EA 3/0 x 7/0 paint grade wood door with 1 x 2 paint grade
casing
Finish Hardware includes the following:
a) An allowance of $100.00 for a cylindrical lever latch set, 1 1/2
pair hinges, and door stop
19
Gypsum Wallboard includes the following:
a) Patch all holes in walls
b) 26 LF new partition at conference room
c) Re-skim columns where mirror removed
d) Finish tape "greenboard" as required
Acoustic Ceiling includes the following:
a) Approximately 160 SF new acoustic ceiling at previous walk-in cooler
b) Approximately 192 SF new acoustic ceiling at conference room
c) Acoustic ceiling soffit at change in elevation
Ceramic Tile includes the following:
a) Grout holes in 12" x 12" tile
b) Install new 4 x 4 white tile where colored tiles and tiles with
holes occur
c) Please note: Infill of 4" ceramic tile on walls is not included
Floor Prep includes the following:
a) Infill holes in floor where plumbing removed with new concrete plugs
b) Infill grout joints of existing tile that remains
c) Infill areas of missing file with topping compound
Carpet includes the following:
a) 254 SY of 28 oz. level loop carpet in a glue down application by an
allowance of $12.10 per SY to include installation
Painting includes the following:
a) Seal and paint wallcovering
b) All new walls to receive 1 coat primer and 1 coat finish
c) New millwork to receive 1 coat primer and 1 coat finish
d) All existing walls to receive 2 coats finish
e) Ceiling deck, mechanical, acoustical ceiling tile and grid and
electrical conduits painted out
f) Plastic laminate "▇▇▇▇" soffit to be sanded and painted to match
ceiling
Fire Protection includes the following:
a) Modify five (5) EA existing heads to new height / location to
provide for code coverage.
Plumbing includes the following:
a) Provide new sink at back wall area
b) Terminate and cap old waste lines
c) Terminate and cap gas lines
d) Cap and fill in floor sinks and drains
HVAC includes the following:
a) Add three (3) EA new supply diffusers
d) Relocate return grill and add one (1) return grill
e) Inspect and verify operation of existing equipment
f) Miscellaneous demolition
g) Simple mechanical permit
20
Electrical includes the following:
a) Cap power in removed walls
b) Firecaulk openings where conduit terminated
c) Modify boxes at tiled wall
d) Relocate one (1) 1 EA 2 x 4 fluorescent fixture at new conference
room
e) Add two (2) 1 EA 2 x 4 fluorescent fixture at new conference room
f) Add three (3) 1 EA 2 x 4 fluorescent fixture at old walk in freezer
area
g) Add four (4) EA track heads
h) Label electrical panel
i) Clean up and demolition of abandoned circuits
i) 150 LF of Wiremold 4000 at perimeter walls with 20 EA duplex outlets
k) Ten (10) EA power poles with twenty (20) EA duplex outlets
l) Forty (40) EA outlets wired with Cat 5 cable for phone and data.
Please Note: Terminations at patch panel performed by others.
m) Twenty (20) EA circuits for above outlets
n) Miscellaneous lighting repair
o) Permit for above work
A construction contingency is not included in this proposal.
Other clarifications:
Washington State Sales Tax is not included in this proposal.
No work other than specifically outlined above is included in this proposal.
Additions and alterations due to local building officials and governing
agencies.
All work during regular business hours.
21
▇▇▇▇▇ Construction Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇ # ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
PROJECT: Eastlake & ▇▇▇▇▇▇ "▇▇▇▇▇▇▇▇▇.▇▇▇"
Date: December 21, 1998 Revised January 25, 1999
---------------------------------------------------------------------------------------
CODE DESCRIPTION QUALIFY LABOR MAT'L SUBS EQUIP MISC TOTAL
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
01100 GENERAL CONDITIONS 1260 250 0 0 -- 1510
---------------------------------------------------------------------------------------
01060 PERMITS & FEES Owner 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
01400 TESTS & INSPECTIONS Owner 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
01530 BARRICADE/ENCLOSE None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
01710 CONT/FINAL CLEAN 200 125 0 0 -- 325
---------------------------------------------------------------------------------------
02050 DEMOLITION 480 250 0 0 -- 730
---------------------------------------------------------------------------------------
02080 ASBESTOS REMOVAL Owner -- -- -- -- -- 0
---------------------------------------------------------------------------------------
06100 ROUGH CARPENTRY None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
06200 FINISH CARPENTRY None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
06400 CUSTOM CASEWORK None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
07200 INSULATION 0 0 148 0 -- 148
---------------------------------------------------------------------------------------
08200 WOOD DRS & FRAMES 100 375 0 0 -- 475
---------------------------------------------------------------------------------------
08700 FINISH HARDWARE 25 100 0 0 -- 125
---------------------------------------------------------------------------------------
08800 GLASS & GLAZING None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
09250 GYPSUM WALLBOARD 0 0 2172 0 -- 2172
---------------------------------------------------------------------------------------
09500 ACOUSTICAL CEILING 0 0 993 0 -- 993
---------------------------------------------------------------------------------------
09650 CERAMIC TILE 0 0 481 0 -- 481
---------------------------------------------------------------------------------------
09678 RUBBER BASE None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
09680 CARPET 0 0 3099 9 -- 3099
---------------------------------------------------------------------------------------
09700 FLOOR PREP 192 175 0 0 -- 367
---------------------------------------------------------------------------------------
09900 PAINT 0 0 2886 0 -- 2886
---------------------------------------------------------------------------------------
10150 TOILET PARTITIONS None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
10400 SIGNAGE None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
10800 TOILET ACCESSORIES None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
11450 APPLIANCES None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
12500 WINDOW TREATMENT None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
15300 FIRE PROTECTION 0 0 875 0 -- 875
---------------------------------------------------------------------------------------
15400 PLUMBING 0 0 1724 0 -- 1724
---------------------------------------------------------------------------------------
15500 HVAC 0 0 1679 0 -- 1679
---------------------------------------------------------------------------------------
16000 ELECTRICAL Allow 0 0 8114 0 -- 8114
---------------------------------------------------------------------------------------
16400 LIFE SAFETY None 0 0 0 0 -- 0
---------------------------------------------------------------------------------------
17000 CONTINGENCY None 0 0 0 0 0 0
---------------------------------------------------------------------------------------
TOTALS 2257 1275 22171 0 0 25703
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
TOTALS 2257 1275 22171 0 0 25703
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
00610-100 PERFORMANCE BOND N.I.C
---------------------------------------------------------------------------------------
W.S.S.T. N.I.C
---------------------------------------------------------------------------------------
01000-200 LABOR BURDEN 790
---------------------------------------------------------------------------------------
01060-230 B & O Tax 198
---------------------------------------------------------------------------------------
00650-100 P/L INSURANCE 160
---------------------------------------------------------------------------------------
00650-100 P/D INSURANCE 69
---------------------------------------------------------------------------------------
00650-140 BUILDERS RISK INSUR. 53
---------------------------------------------------------------------------------------
1270 1270
---------------------------------------------------------------------------------------
SUBTOTAL 26973
---------------------------------------------------------------------------------------
O & P 2697
---------------------------------------------------------------------------------------
TOTAL 29670
---------------------------------------------------------------------------------------
22
Exhibit "E"
WORK SCHEDULE
▇▇▇▇▇ CONSTRUCTION SERVICES, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇. #▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Prepared By:___________
Sheet ______ of _______
Short Interval Schedule For:
AS OF: ____________________
Dates
-------------------------------------------------------------------------------------------------------------------
Activity M T W T F W/E M T W T F W/E M T W T F W/E M T W T F
-------------------------------------------------------------------------------------------------------------------
Demolition X X
-------------------------------------------------------------------------------------------------------------------
Infill Floor X X
-------------------------------------------------------------------------------------------------------------------
Acoustic
Ceiling X
-------------------------------------------------------------------------------------------------------------------
HVAC X X
-------------------------------------------------------------------------------------------------------------------
Sprinklers X X
-------------------------------------------------------------------------------------------------------------------
Plumbing X X
-------------------------------------------------------------------------------------------------------------------
Gypsum
Wallboard X X X
-------------------------------------------------------------------------------------------------------------------
Door/Hardware X
-------------------------------------------------------------------------------------------------------------------
Paint X X X
-------------------------------------------------------------------------------------------------------------------
Demo Elect.
-------------------------------------------------------------------------------------------------------------------
Electrical X X X X X
-------------------------------------------------------------------------------------------------------------------
Carpet X X
-------------------------------------------------------------------------------------------------------------------
Rubber Base X
-------------------------------------------------------------------------------------------------------------------
Final Clean X
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Dates
---------------------------------------------
Activity W/E M T W T F W/E
---------------------------------------------
Demolition
---------------------------------------------
Infill Floor
---------------------------------------------
Acoustic
Ceiling
---------------------------------------------
HVAC
---------------------------------------------
Sprinklers
---------------------------------------------
Plumbing
---------------------------------------------
Gypsum
Wallboard
---------------------------------------------
Door/Hardware
---------------------------------------------
Paint
---------------------------------------------
Demo Elect.
---------------------------------------------
Electrical
---------------------------------------------
Carpet
---------------------------------------------
Rubber Base
---------------------------------------------
Final Clean
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------