EXHIBIT 10.23
LEASE AGREEMENT
BY AND BETWEEN
BELLEVUE TRADE CENTER, LLC,
A WASHINGTON LIMITED LIABILITY COMPANY ("LANDLORD")
AND
ICOS CORPORATION, A DELAWARE CORPORATION ("TENANT")
NOVEMBER 1, 2002
TABLE OF CONTENTS
1. LEASE............................................................... 1
2. TERM AND POSSESSION................................................. 1
2.1 TERM......................................................... 1
2.2 DELIVERY OF POSSESSION; CONDITION OF PREMISES................ 1
2.3 OPTIONS TO EXTEND............................................ 1
3. BASIC RENT.......................................................... 2
3.1 BASIC RENT DURING INITIAL TERM............................... 2
3.2 BASIC RENT DURING EXTENSION TERMS............................ 2
4. USE OF PREMISES; PARKING............................................ 4
5. MAINTENANCE BY LANDLORD............................................. 4
6. MAINTENANCE BY TENANT; SURRENDER.................................... 4
7. UTILITIES; ABATEMENT OF RENT........................................ 5
7.1 UTILITIES.................................................... 5
7.2 COSTS OF ELECTRICAL SERVICE.................................. 5
7.3 INTERRUPTION OF SERVICES OR UTILITIES........................ 6
8. COMPLIANCE WITH LAW................................................. 6
9. INSURANCE........................................................... 7
9.1 LANDLORD'S INSURANCE......................................... 7
9.2 TENANT'S INSURANCE........................................... 7
10. TAXES............................................................... 8
10.1 REAL ESTATE TAXES............................................ 8
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10.2 TENANT TO PAY REAL ESTATE TAXES.............................. 8
10.3 CONTESTING REAL ESTATE TAXES................................. 9
10.4 INSTALLMENT PAYMENTS......................................... 9
10.5 PERSONAL PROPERTY TAXES...................................... 10
11. ALTERATIONS AND REPAIRS............................................. 10
11.1 LANDLORD'S CONSENT AND CONDITIONS............................ 10
11.3 COMPLIANCE WITH LAW.......................................... 10
11.4 SALES TAX DEFERRAL........................................... 11
12. DEFAULTS............................................................ 11
12.1 DEFAULT BY TENANT............................................ 11
12.1.1 RENT DEFAULT.......................................... 11
12.1.2 OTHER PERFORMANCE DEFAULT............................. 11
12.1.3 CREDIT DEFAULT........................................ 11
12.2 LANDLORD'S REMEDIES.......................................... 12
12.2.1 TERMINATION OF LEASE OR POSSESSION.................... 12
12.2.2 LEASE TERMINATION DAMAGES............................. 12
12.2.3 POSSESSION TERMINATION DAMAGES........................ 12
12.2.4 LANDLORD'S REMEDIES CUMULATIVE........................ 13
12.3 LANDLORD'S DEFAULT........................................... 13
13. ESTOPPEL CERTIFICATES............................................... 14
14. HOLDOVER............................................................ 14
15. ASSIGNMENT AND SUBLETTING........................................... 14
16. LANDLORD'S ACCESS................................................... 15
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17. INDEMNIFICATION; RELEASE AND WAIVER OF SUBROGATION.................. 16
17.1 TENANT'S INDEMNIFICATION..................................... 16
17.2 LANDLORD'S INDEMNIFICATION................................... 16
17.3 WAIVER OF CONSEQUENTIAL DAMAGES.............................. 16
17.4 RELEASE AND WAIVER OF SUBROGATION............................ 17
17.5 INDEMNIFICATION PURSUANT TO RCW 4.24.115..................... 17
18. DAMAGE AND DESTRUCTION.............................................. 18
18.1 NOTICE OF CASUALTY........................................... 18
18.2 TOTAL DESTRUCTION............................................ 18
18.3 PARTIAL DESTRUCTION.......................................... 18
19. CONDEMNATION........................................................ 19
19.1 TOTAL TAKING................................................. 19
19.2 PARTIAL TAKING............................................... 19
19.3 AWARD........................................................ 19
20. SUBORDINATION, RECOGNITION, NON-DISTURBANCE AND ATTORNMENT.......... 20
20.1 SUBORDINATION................................................ 20
20.2 HOLDER'S ELECTION............................................ 21
21. NOTICES............................................................. 21
22. RIGHT OF FIRST OFFER................................................ 22
23. CONFIDENTIALITY OF LEASE AND LEASE MATTERS.......................... 23
24. AGENTS AND BROKERS.................................................. 23
25. OTHER PROVISIONS.................................................... 24
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25.1 LATE CHARGE AND INTEREST ON LATE PAYMENTS.................... 24
25.2 SIGNS........................................................ 24
25.3 CONSENT AND DISCRETION....................................... 24
25.4 NO WAIVER.................................................... 24
25.5 GOVERNING LAW................................................ 24
25.6 ATTORNEYS' FEES.............................................. 25
25.7 ENTIRE AGREEMENT............................................. 25
25.8 NEGOTIATION AND CONSTRUCTION................................. 25
25.9 PARTIAL INVALIDITY........................................... 25
25.10 BINDING ON SUCCESSORS........................................ 25
25.11 LANDLORD'S LIMITED LIABILITY................................. 25
25.12 TIME IS OF THE ESSENCE....................................... 26
26. CONDITIONS TO EFFECTIVENESS......................................... 26
27. COMPLIANCE WITH HAZARDOUS MATERIALS LAWS............................ 26
27.1 COST OF COMPLIANCE WITH HAZARDOUS MATERIALS LAWS............. 27
27.2 LANDLORD'S REPRESENTATION; INDEMNIFICATION................... 27
27.3 ENVIRONMENTAL AUDIT.......................................... 28
28. EXHIBITS............................................................ 28
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LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is made and entered into this 1st day of
November, 2002, by and between BELLEVUE TRADE CENTER, LLC, a Washington limited
liability company ("Landlord") and ICOS CORPORATION, a Delaware corporation
("Tenant"). The parties desire that Landlord lease to Tenant and Tenant lease
from Landlord the Premises defined below, on the terms and conditions contained
in this Lease. Landlord and Tenant agree as follows:
1. LEASE
Landlord Leases to Tenant and Tenant Leases from Landlord, for the Term,
at the rental, and upon all of the conditions set forth in this Lease, the
Premises, being approximately 33,020 rentable square feet of space in the
building located at 0000 000xx Xxx. XX, Xxxxxxxx, Xxxxxxxxxx 00000 (the
"Building") and located on the real property that is more particularly described
on EXHIBIT A to this Lease (the "Land").
2. TERM AND POSSESSION
2.1 TERM
The term of this Lease shall be five (5) years, commencing on the date of
this Lease (the "Commencement Date") and expiring at 11:59 p.m. on the day prior
to the fifth (5th) anniversary of the Commencement Date ("Expiration Date"). The
term, as it may be extended pursuant to Section 2.4 below, is referred to as the
"Term."
2.2 DELIVERY OF POSSESSION; CONDITION OF PREMISES
The Premises shall be delivered to Tenant on the Commencement Date in the
same condition they were in on October 30, 2002 ("Agreement Date"), "as-is,
where-is" and broom clean.
2.3 OPTIONS TO EXTEND
Tenant shall have two (2) options to extend the term of this Lease for
successive extension terms (each an "Extension Term") of five (5) years each.
Each option to extend the Term shall be exercised by written notice given to
Landlord at least twelve (12) months prior to the end of the Term or the first
Extension Term (as the case may be). Each Extension Term shall be on the same
terms and conditions as are set forth in this Lease except that Basic Rent
during each of the first and second
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Extension Terms shall be 95% of the fair market value of the Premises determined
in the manner set forth in Section 3.2 below.
3. BASIC RENT
3.1 BASIC RENT DURING INITIAL TERM
Commencing on the Commencement Date, and continuing on the first day of
each month thereafter for the succeeding months during the balance of the Term,
Tenant shall pay to Landlord monthly basic rent ("Basic Rent"), in advance,
according to the following schedule:
Months 1-12 $60,536.66
Months 13-24 $62.352.76
Months 25-36 $64,223.35
Months 37-48 $66,150.07
Months 49-60 $68,134.55
Monthly installments of Basic Rent shall be prorated on a per diem basis
for the first and last month of the Term if the Commencement Date or Expiration
Date, as the case may be, is not the first day or last day of a calendar month.
All other payments required by this Lease to be made by Tenant during the
Term are "Additional Rent" and shall be considered Rent. Payments of Rent shall
be made at Landlord's Address or at such other address as Landlord may from time
to time designate in writing. All Rent shall be paid without demand, setoff,
adjustment, deduction or abatement, except as may be specifically provided in
this Lease.
3.2 BASIC RENT DURING EXTENSION TERMS
Basic Rent for each Extension Term shall be 95% of the then-current fair
market rent for a five-year renewal term for comparable space in the Bellevue
Eastside (i.e., Bothell to Issaquah), Washington area, of like quality, size and
amenities and on comparable terms (e.g., comparable provisions for payment of
expenses), and taking into account the location of the Building ("Fair Market
Rent"); provided that in no event shall the monthly Basic Rent for any Extension
Term be less that the monthly Basic Rent due for the last month of the term
immediately preceding the Extension Term.
Landlord and Tenant shall attempt in good faith to agree upon the Fair
Market Rent. If they do not reach agreement on the Fair Market Rent within
thirty (30) days of Tenant's notice exercising its Option to Extend, then the
parties shall submit the
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matter to arbitration in accordance with this Section 3.2 so that the Fair
Market Rent is determined no later than one (1) month prior to the first day of
the Extension Term.
Each party shall select a neutral, licensed and qualified MAI real estate
appraiser (the "Appraisers") having at least ten (10) years' experience with
rental rates in the Bellevue, Washington office-space market and with
significant experience with leasing for technology and biotechnology uses. If
the two Appraisers so chosen are not able to agree on the Fair Market Rent
within ten (10) days after their selection, then they shall together select a
neutral and similarly qualified third appraiser ("Neutral Appraiser"). If they
are unable to agree on that selection within ten (10) days after expiration of
the ten (10) day period, then either party, on behalf of both, may request
appointment of such a qualified person by the then-presiding judge of the King
County Superior Court acting in his or her private, non-judicial capacity, and
the other party shall not raise any question as to that judge's full power and
jurisdiction to entertain the application and to make the appointment. The
parties agree to indemnify and hold the presiding judge fully and completely
harmless from and against all claims arising out of the presiding judge's
appointment of the Neutral Appraiser.
If the three Appraisers so selected are not able to agree unanimously on
the Fair Market Rent within fourteen (14) days after selection of the Neutral
Appraiser, then the issue shall be determined in the following manner. The
Appraiser selected by each of the parties shall state in writing his or her
determination of the Fair Market Rent, supported by the reasons for that
determination. Counterpart copies of the determination shall be given to each of
the parties and each of the other Appraisers. The Appraisers shall arrange for a
simultaneous exchange of their proposed resolutions. The role of the Neutral
Appraiser shall be to select which of the two proposed resolutions most closely
approximates his or her determination of Fair Market Rent. The Neutral Appraiser
shall have no authority or right to propose a middle ground or any modification
of either of the two proposed resolutions. The resolution chosen by the Neutral
Appraiser as most closely approximating his or her determination shall
constitute the decision of the appraisers as to the Fair Market Value of the
Premises and shall be final and binding upon the parties. The Appraisers shall
have no power to modify the provisions of this Lease. Notwithstanding anything
herein to the contrary, Basic Rent for any Extension Term shall not be less that
the monthly Basic Rent due for the last month of the term immediately preceding
the Extension Term.
If the Basic Rent for an Extension Term has not been determined at the
time that the Extension Term begins, then Tenant shall pay Basic Rent at the
rate applicable in the last month of the previous Term until the new Basic Rent
is determined. Within thirty (30) days after determination of the new Basic Rent
Tenant shall pay to Landlord the difference (if any) between the total amount
due to that date at the new
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Basic Rent rate and the total amount actually paid by Tenant as Basic Rent to
that date.
Each party shall pay the fees and expenses of its respective Appraiser and
both shall share equally the fees and expenses of the Neutral Appraiser, if any.
Each party shall bear its own attorneys' fees and witness fees.
4. USE OF PREMISES; PARKING
The Premises shall be used and occupied for general office, research,
development, lifescience laboratory, vivarium, production and sale of materials,
products and services used in the biotechnology/pharmaceutical and lifesciences
industry, and for any other lawful purpose; provided, however, that Tenant shall
not use or occupy the Premises, or permit them to be used or occupied, contrary
to any statute, rule, order, ordinance, requirement or regulation applicable
thereto (the "Laws") and Tenant shall be solely responsible for determining
whether Tenant's intended use of the Premises complies with such Laws. Tenant
acknowledges that the Building is (or at one time was) subject to Laws that
classify the Building as a multi-tenant building, and that the existence of any
such Laws shall not invalidate this Lease or otherwise release Tenant from its
obligations hereunder. Landlord agrees to cooperate with Tenant in the event
Tenant desires to contest or obtain a variance with respect to any Laws. Tenant
shall have the exclusive right to use all of the parking area located on the
Land, subject to the rights (if any) of the successor to Eagle Hardware &
Garden, Inc. ("Eagle") under that certain Parking License Agreement dated
January 22, 1998 between Landlord and Eagle.
5. MAINTENANCE BY LANDLORD
Landlord shall be responsible for and shall maintain in good condition
(normal wear and tear excepted) the structural components of the Building
including, without limitation, the structural components of the roof, the walls
and foundations, and portions of the electrical, plumbing and sewage systems
located outside of the Premises (exclusive, however, of any portions of those
systems that are located under the Building). Landlord shall not be obligated to
repair or replace any fixtures or equipment installed by or for Tenant and
Landlord shall not be obligated to make any repair or replacement occasioned by
any act or omission of Tenant, its employees, agents, invitees, or licensees.
6. MAINTENANCE BY TENANT; SURRENDER
Tenant shall be responsible for and shall maintain in the same condition
in which they are delivered, or such better condition as they may be put to by
Tenant
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(excepting, however, normal wear and tear and damage by fire and other casualty
and by condemnation) the Premises, the landscaping and parking surrounding the
Building, the exterior of the Building, the roof membrane, and the electrical,
plumbing, mechanical and alarm monitoring systems that are a part of the
Premises. Tenant shall adopt and implement a program for maintenance by Tenant
of the Building systems. Upon request of Landlord, made no more frequently than
once every twelve months, Tenant shall provide to Landlord a written report of
the maintenance performed on the Building systems during the previous
twelve-month period.
If Tenant fails to perform the maintenance obligations hereunder and such
failure continues for more than thirty (30) days after written notice thereof
from Landlord (except that if Tenant begins to cure its failure within the
thirty-day period but cannot reasonably complete the work within such period,
then only if Tenant fails to diligently proceed to complete the work), then
Landlord shall have the right to perform such maintenance on Tenant's behalf and
Tenant shall reimburse Landlord for the commercially reasonable cost thereof as
additional rent promptly after demand.
Upon the expiration or earlier termination of the Term, Tenant shall
promptly and peacefully surrender the Premises to Landlord, broom clean and in
good condition and repair, except for conditions occasioned by reasonable wear
and tear, fire and other casualty, and condemnation. Tenant shall remove all of
its movable property and trade fixtures upon surrender of possession and shall
repair any damage to the Premises caused by the removal; provided, however, that
Tenant shall not at any time remove any fixtures and equipment that are owned by
Landlord as of the date of this Lease, or that are located on the Premises as of
the date of this Lease and that are listed on EXHIBIT B to this Lease
("Reversion Property"). Tenant shall not be required to remove alterations or
improvements made by and for the account of Landlord.
7. UTILITIES; ABATEMENT OF RENT
7.1 UTILITIES
Tenant shall pay or cause to be paid when due all charges for public or
private utility services provided to or for the Premises during the Term,
including, without limitation, all charges for water, gas, electrical, HVAC,
sewer, irrigation charges, sprinkler charges, charges for elevators, fire
protection systems, and related monitor and telephone lines, and other utilities
and services used on or from the Building, and any maintenance or hook up
charges or fees for utilities.
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7.2 COSTS OF ELECTRICAL SERVICE
Landlord and Tenant acknowledge that various federal and state initiatives
are under way that are expected, over time, to result in deregulation of the
electric utility industry so that the historic, vertically integrated monopoly
for generation and delivery of electrical power and services is replaced by
market-priced elements of production, capacity, transmission and ancillary
services.
In order to maximize the benefit of this opportunity, throughout the Term
Tenant shall have the right, upon thirty (30) days' prior written notice to
Landlord, to acquire its electrical energy or other electrical utility service
directly from a third party or parties that has or have the legal authority to
provide such service and, from time to time, upon thirty (30) days' prior notice
to Landlord, to change such third party or parties; provided, however, Tenant
shall not enter into any agreement with a utility provider that binds Landlord
or the Building for a term that exceeds the term of this Lease. All improvements
and modifications to the Building to accommodate such alternate service
providers shall be installed without expense to Landlord and shall be subject to
Landlord's prior written approval, which shall not be unreasonably withheld;
provided, however, Landlord may require as a condition of its approval that
Tenant restore all lines, meters, feeders, and other fixtures and appurtenances
necessary to receive electrical utility service from Landlord's selected service
provider at the expiration or earlier termination of this Lease. Landlord shall
cooperate with Tenant in giving effect to this Section 7.2 so that Tenant is
afforded the opportunity to purchase electrical energy and electrical utility
service from such third party or parties as Tenant in its sole discretion may
choose, subject to reasonable conditions imposed by Landlord with respect to the
Building.
7.3 INTERRUPTION OF SERVICES OR UTILITIES
If all or any part of the Premises is rendered untenantable for a period
of five (5) consecutive business days or more because of an interruption of
utilities due to Landlord's negligence, then Basic Rent shall xxxxx in
proportion to the portion of the Premises that are unusable until that portion
of the Premises can once again be occupied for its intended purposes.
8. COMPLIANCE WITH LAW
Tenant shall comply with all statutes, laws, ordinances, regulations and
rules applicable to the use or occupancy of the Premises, and shall promptly
comply with all governmental orders and directives relating to the Premises and
Tenant's use of the Premises. Tenant will not permit the Premises to be used for
any purpose or in any
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manner (including without limitation any method of storage) that would render
the Building uninsurable.
9. INSURANCE
9.1 LANDLORD'S INSURANCE
At all times during the Term, Landlord shall maintain (a) Commercial
General Liability Policy, with such limits as Landlord may elect in its
reasonable discretion, and (b) a standard form property insurance policy with
responsible insurers covering the Premises and the Building (including fixtures
owned by Landlord and that are located in the Building as of the date of this
Lease and including the items listed on EXHIBIT B) against the perils of fire,
extended coverage, vandalism, malicious mischief, special extended coverage
("All Risk") and sprinkler leakage with an endorsement to cover the cost of law
mandated changes to the Building(s) in connection with restoration after a
casualty ("Landlord's Insurance"). Such property insurance shall provide
coverage for all property in which Landlord holds an interest in an amount not
less than ninety-five percent (95%) of the replacement value of the property
insured. Tenant shall pay annually upon invoice from Landlord, as Additional
Rent, all premiums for Landlord's Insurance.
9.2 TENANT'S INSURANCE
Tenant, at its expense, shall purchase and keep in force during the Term a
Commercial General Liability Policy with limits of not less than Five Million
Dollars ($5,000,000) for each occurrence, covering bodily injury to persons,
including death, and damage to property. Such insurance shall be with
responsible insurers reasonably acceptable to Landlord. Tenant shall cause its
Commercial General Liability insurer to name Landlord as an additional insured
under such insurance to the extent of Tenant's insurable contractual liability
assumed in Section 17.1 below. The insurance policy shall contain a severability
of interests provision, a provision that the insurance provided to Landlord as
additional insured shall be primary to and not contributory with insurance
maintained by Landlord, and a provision that an act or omission of one of the
insureds or additional insureds that would void or otherwise reduce coverage
shall not reduce or void the coverage as to the other named and additional
insureds. A certificate of insurance evidencing that the foregoing insurance is
in effect shall be delivered to Landlord prior to Tenant's occupancy of the
Premises, and shall be kept current throughout the Term. Such certificate shall
reflect the status of Landlord as additional insured, and shall provide for at
least thirty (30) days' advance notice to Landlord in the event of cancellation.
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Tenant shall also maintain insurance coverage (including loss of use and
business interruption coverage) on Tenant's personal property, equipment and
trade fixtures against loss or damage by fire, windstorm or other casualties or
causes for such amount as Tenant may desire.
10. TAXES
10.1 REAL ESTATE TAXES
The term "Real Estate Taxes" means all real and personal property taxes,
regular and special assessments, license fees, public service impact fees and
other charges payable by Landlord as a result of any public or quasi-public
authority levy, assessment or imposition against, or arising out of Landlord's
ownership of or interest in, the Land, and/or the Building and grounds, parking
areas, driveways, roads and alleys around the Building or any part thereof
(including any fixtures owned by Landlord that are a part of the Land), and any
tax that may be due upon or with respect to the leasehold estate created by this
Lease. Real Estate Taxes shall exclude any income, franchise, corporation,
capital levy, excess profits, inheritance, gift, estate, payroll or stamp tax or
any tax upon the sale, transfer or assignment of Landlord's title or estate
which at any time may be assessed against or become a lien upon all or any part
of the Premises or this leasehold, except that Real Estate Taxes shall include
any tax on Landlord's right to receive, or the receipt of, rent or income from
the Project other than federal, state or local income tax.
10.2 TENANT TO PAY REAL ESTATE TAXES
Tenant shall pay as Additional Rent the Real Estate Taxes that are payable
in each tax period or portion thereof included within the Term and which during
the Term are levied or imposed upon or become a lien or liens upon the Premises
or any part thereof. Tenant shall have the election either to pay Real Estate
Taxes to Landlord upon receipt of invoice, or to discharge all the Real Estate
Taxes by payment directly to the taxing authority, in either case such payment
to be made on or before their due date(s). Otherwise, Tenant shall pay Real
Estate Taxes to Landlord upon receipt of invoice. If Tenant is to pay Real
Estate Taxes to Landlord, then Landlord shall provide its invoice to Tenant at
least thirty (30) days prior to the due date(s) of each installment of such
taxes. If Tenant is entitled to, and does, elect to pay Real Estate Taxes
directly to the taxing authority, then Landlord shall provide to Tenant the
appropriate tax xxxx(s) at least thirty (30) days prior to the due date of any
such taxes. If Tenant pays Real Estate Taxes directly to the taxing authority,
then Tenant shall furnish Landlord with evidence of payment of same within ten
(10) days after their due date(s). Tenant shall pay all interest and penalties
assessed with respect to Tenant's failure to timely pay Real Estate Taxes,
unless the interest or penalties are
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assessed as a result of the failure of Landlord to provide Tenant with the
appropriate invoice or tax xxxx(s) within the thirty (30) day period. Real
Estate Taxes for the tax years in which the Term of this Lease commences and
expires shall be apportioned between Landlord and Tenant by dividing the amount
of Real Estate Taxes by three hundred sixty-five (365) and multiplying the
result by the number of days falling within the Term.
Landlord shall pay Real Estate Taxes that are due on October 31, 2002, and
Tenant shall reimburse to Landlord its share of those Real Estate Taxes,
determined in the manner set forth above, within ten (10) business days of
receipt of Landlord's invoice.
10.3 CONTESTING REAL ESTATE TAXES
Tenant shall have the right to contest or review (in the name of Tenant,
or of Landlord, or both, as Tenant shall elect) by appropriate proceedings
(which may be instituted either during or after the Term of this Lease, and if
instituted shall be with the cooperation of Landlord if requested) any valuation
of the Land and Building for Real Estate Tax assessment purposes and/or any
increase in the tax rate, provided, however, that Tenant shall have paid all
Real Estate Taxes when due. Landlord shall furnish, on a timely basis, such
data, documents, information and assistance and make such appearances as may be
reasonably required by Tenant for purposes of the contests, and will execute all
necessary instruments in connection with any such protest, appeal or other
proceedings. Notwithstanding the foregoing, Tenant shall not contest, protest or
oppose the formation of any local improvement district that may include the
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed. If any proceeding may only be
instituted and maintained by Landlord, then Landlord shall do so at the request
and expense of Tenant, and shall follow Tenant's reasonable instructions with
respect to the proceeding. Landlord shall not settle any appeal or other
proceeding commenced by Tenant under the authorization of this Section 10.3
without obtaining Tenant's prior written approval in each instance. Tenant shall
be entitled to any refund (net of Tenant's or Landlord's expenses in obtaining
same) obtained by reason of any such proceeding or otherwise whether obtained
during or after the expiration of the Term and whether obtained by Landlord or
Tenant, except that if the refund shall relate to the year in which the Term of
this Lease commences or expires, the refund (after deducting all costs of
Landlord or Tenant in obtaining same) shall be apportioned between Landlord and
Tenant according to the number of days within the Term.
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10.4 INSTALLMENT PAYMENTS
If, by law, any Real Estate Taxes may at Landlord's option be paid in
installments (whether or not interest accrues on the unpaid balance), then
Landlord shall exercise such option, in which case the Real Estate Taxes shall
be paid in installments as they become due and before any fine or penalty may be
added for nonpayment.
10.5 PERSONAL PROPERTY TAXES
Tenant shall be liable for all taxes levied against personal property and
trade fixtures placed in the Premises by Tenant.
11. ALTERATIONS AND REPAIRS
11.1 LANDLORD'S CONSENT AND CONDITIONS
Tenant shall not make any improvements or alterations to the Premises (the
"Work") that are structural in nature or that exceed a cost in any calendar year
of $50,000 without in each instance submitting plans and specifications for the
Work to Landlord and obtaining the prior written consent of Landlord. Landlord
will not unreasonably withhold, condition or delay its consent. Landlord shall
advise Tenant at the time it gives its consent whether Landlord will require
Tenant to remove such improvements or alterations at the expiration or earlier
termination of the Term.
Tenant shall pay for the cost of all Work. All Work shall remain the
property of Tenant for all purposes during the Term. Upon surrender of the
Premises to Landlord after expiration of the Term, the Work shall be and become
a part of the real property and remain with the Premises, except for Tenant's
trade fixtures and equipment and except for items that Landlord has required
Tenant to remove pursuant to this Section 11.1.
11.2 NO LIENS
Tenant has no authority to cause or permit any lien or encumbrance of any
kind to affect the Building or the Premises. If any construction lien shall be
filed or claim of lien made for work or materials furnished to Tenant, then
Tenant shall discharge the lien or claim at its expense within ten (10) days
thereafter. Recording a bond the effect of which is to remove the lien or claim
of lien from the Land, Building and Premises shall be deemed to discharge the
lien. If Tenant does not do so, then Landlord may discharge the lien or claim,
and the amount paid, as well as reasonable attorney's fees and other
out-of-pocket expenses incurred by Landlord, shall become Rent payable by Tenant
on demand.
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11.3 COMPLIANCE WITH LAW
Tenant shall cause all work to be done in a good and workerlike manner
using suitable materials equal to or better than those used in the construction
of the Premises and shall comply with or cause compliance with all applicable
laws and with any direction given by any public officer pursuant to law. Tenant
shall obtain or cause to be obtained and maintain in effect, as necessary, all
building permits, licenses, and other governmental approvals that may be
required in connection with the making of any alterations. Landlord shall
cooperate with Tenant in obtaining them and shall execute any documents
reasonably required in furtherance of that purpose.
11.4 SALES TAX DEFERRAL
Tenant's improvements to the Premises may qualify for certain sales tax
deferrals under the laws of the State of Washington. Landlord agrees to
cooperate with Tenant in applying for any such deferrals, including, but not
limited to, certifying that the benefit of the deferrals shall accrue to Tenant.
Tenant shall hold Landlord harmless against any liability for sales tax on work
performed for Tenant that is deferred but thereafter becomes due and payable.
12. DEFAULTS
12.1 DEFAULT BY TENANT
Any of the following shall constitute a default by Tenant:
12.1.1 RENT DEFAULT
If any installment of Rent is not timely received by Landlord, Tenant
fails to pay that Rent within five (5) days of written notice given by Landlord
that the Rent has not been received and is due and payable; and
12.1.2 OTHER PERFORMANCE DEFAULT
Tenant fails to perform any other obligation to Landlord under this Lease,
and this failure continues for thirty (30) days after written notice from
Landlord, except that if Tenant begins to cure its failure within the thirty
(30) day period but cannot reasonably complete its cure within such period, then
Tenant shall not be in default so long as Tenant continues to diligently cure
its failure;
12.1.3 CREDIT DEFAULT
One of the following credit defaults occurs:
LEASE AGREEMENT PAGE 11
(1) Tenant commences any proceeding under any law relating to
bankruptcy, insolvency, reorganization or relief of debts, or seeks
appointment of a receiver, trustee, custodian or other similar official
for Tenant or for any substantial part of its property, or any such
proceeding is commenced against Tenant and either remains undismissed for
a period of ninety days or results in the entry of an order for relief
against Tenant that is not fully stayed within fifteen days after entry;
(2) Tenant becomes insolvent or bankrupt, does not generally pay its
debts as they become due, or admits in writing its inability to pay its
debts, or makes a general assignment for the benefit of creditors;
(3) Any third party obtains a levy or attachment under process of
law against Tenant's leasehold interest.
12.2 LANDLORD'S REMEDIES
12.2.1 TERMINATION OF LEASE OR POSSESSION
If Tenant defaults, then Landlord may elect by notice to Tenant either to
terminate this Lease or to terminate Tenant's possession of the Premises without
terminating this Lease. In either case, Tenant shall immediately vacate the
Premises and deliver possession to Landlord, and Landlord may repossess the
Premises and may, at Tenant's sole cost, remove any of Tenant's signs and any of
its other property, without relinquishing its right to receive Rent or any other
right against Tenant.
12.2.2 LEASE TERMINATION DAMAGES
If Landlord terminates this Lease, then Tenant shall pay to Landlord all
Rent due on or before the date of termination, plus Rent that would have been
payable from the date of termination through the Expiration Date, reduced by the
reasonably projected rental value of the Premises as of the Expiration Date for
the same period, taking into account anticipated vacancy prior to reletting,
reletting expenses and market concessions, both discounted to present value at
the rate of ten percent (10%) per annum. If Landlord shall relet any part of the
Premises for any part of such period before such present value amount shall have
been paid by Tenant or finally determined by a court, then the amount of Rent
payable pursuant to such reletting (taking into account vacancy prior to
reletting and any reletting expenses or concessions) shall be deemed to be the
reasonable rental value for that portion of the Premises relet during the period
of the reletting.
LEASE AGREEMENT PAGE 12
12.2.3 POSSESSION TERMINATION DAMAGES
If Landlord terminates Tenant's right to possession without terminating
the Lease and Landlord takes possession of the Premises itself, Landlord may
relet any part of the Premises for such Rent, for such time, and upon such
terms, as Landlord in its sole discretion shall determine. Any proceeds from
reletting the Premises shall first be applied to the expenses of reletting,
including redecoration, repair, alteration, advertising, brokerage, legal, and
other reasonably necessary expenses. If the reletting proceeds after payment of
expenses are insufficient to pay the full amount of Rent under this Lease,
Tenant shall pay such deficiency to Landlord monthly upon demand as it becomes
due. Any excess proceeds shall be retained by Landlord.
12.2.4 LANDLORD'S REMEDIES CUMULATIVE
All of Landlord's remedies under this Lease shall be in addition to all
other remedies Landlord may have at law or in equity. After notice and
expiration of any applicable cure periods, Landlord may advance such monies and
take such other actions for Tenant's account as reasonably may be required to
cure or mitigate the particular default by Tenant. Tenant shall immediately
reimburse Landlord for any such advance, and such sums shall bear interest at
the Default Interest Rate (as that term is defined in Section 25.1 below) until
paid.
12.3 LANDLORD'S DEFAULT
Landlord shall not be in default under this Lease unless Landlord fails to
perform obligations required of Landlord within a time that is reasonable under
the circumstances, but in no event less than thirty (30) days after written
notice by Tenant to Landlord and to the holder of any mortgage or deed of trust
covering the Premises whose name and address have been furnished to Tenant in
writing. Tenant's notice shall specify the manner in which Landlord has failed
to perform such obligation; provided, however, that if the nature of 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 performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion. In the event Landlord or Landlord's mortgagee and/or deed of trust
holder fails to cure or commence cure within the periods described in this
Section 12.3, then Tenant may (but shall not be obligated to) perform the
obligation of Landlord while at all times being in compliance with all
applicable laws, rules and regulations pertaining to such performance, and the
reasonable cost of the cure shall be payable from Landlord to Tenant upon
demand. If Landlord shall dispute the existence or nature of the claimed default
within ten (10) days of receipt of Tenant's notice, then Tenant shall not take
any unilateral action to remedy the claimed default unless such action is
required to allow Tenant to continue
LEASE AGREEMENT PAGE 13
or to resume full use and occupancy of the Premises for their intended purposes,
or is required for the protection of persons or property. In that case Tenant
may contest the alleged default on the part of Landlord by proceedings in any
court of competent jurisdiction in King County, Washington. Notwithstanding
anything herein to the contrary, if any judgment against Landlord resulting from
such an action is not promptly paid by Landlord, then the amount of the judgment
may be offset by Tenant against Rent next accruing under the terms of this
Lease.
13. ESTOPPEL CERTIFICATES
Upon request of either party, at any time and from time to time, Landlord
and Tenant shall execute and deliver to the other within fifteen (15) business
days after receipt of the request, a written instrument, duly executed:
(a) Certifying that this Lease has not been amended or modified and
is in full force and effect or, if there has been a modification or amendment,
that this Lease is in full force and effect as modified or amended, and stating
the modifications or amendments;
(b) Specifying the date to which the Rent has been paid;
(c) Stating whether to the best knowledge of the party executing the
instrument, the other party is in default and, if so, stating the nature of the
default;
(d) Stating the commencement date of the Term and whether any option
to extend the Term has been exercised; and
(e) Stating such other matters relating to the status of this Lease
and the parties performance thereunder as the requesting party may reasonably
request.
14. HOLDOVER
Tenant shall have no right to holdover in possession of the Premises after
the expiration or termination of this Lease without Landlord's prior written
consent. If Tenant retains possession of any part of the Premises after the Term
with Landlord's consent, then Tenant shall become a month-to-month tenant for
the entire Premises upon all of the terms of this Lease as might be applicable
to such month-to-month tenancy, except that Tenant shall pay Basic Rent at 125%
the rate in effect immediately prior to such holdover, computed on a monthly
basis for each full or partial month Tenant remains in possession. No acceptance
of Rent or other payments by Landlord under these holdover provisions shall
operate as a waiver of Landlord's right to regain possession or any other of
Landlord's remedies.
LEASE AGREEMENT PAGE 14
15. ASSIGNMENT AND SUBLETTING
Provided that Tenant gives Landlord written notice thereof, and, in the
event any assignment results in a change in the name of Tenant, Landlord
receives a written instrument signed by Tenant and the assignee by which the
assignee agrees to perform the obligations of Tenant hereunder from and after
the date of the assignment (but by which Tenant is not released from its
obligations under this Lease), Tenant may assign this Lease, in whole or in
part, and may sublease all or any part of the Premises, to (a) a parent or
subsidiary of Tenant, the entity with which or into which Tenant may merge
(whether or not Tenant is the survivor of that merger), or an entity that is
controlled by, controls or is under common control with Tenant or (b) the
purchaser of substantially all of the assets of any operating division of Tenant
that is occupying the Premises (the foregoing being collectively referred to as
"Affiliates"), all so long as Tenant (as assignor or sublessor) is and remains
principally and primarily liable for the obligations of Tenant under this Lease.
For the purposes of this Section 15, the term "control" means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person or entity, or at least a fifty percent
(50%) ownership of any sort, whether through the ownership of voting securities,
by contract or otherwise. Landlord acknowledges that Tenant is a publicly owned
corporation.
All other subleases, and any assignment of Tenant's interest under this
Lease, shall be subject to Landlord's prior written consent, which consent shall
not be unreasonably withheld, conditioned or delayed. Landlord shall be entitled
to 100% of the Sublease Profits from subleases to parties other than Affiliates,
except that this sentence and the following sentence shall not apply to any
sublease or subleases that are required in order to comply with City of Bellevue
Laws that classify the Building as a multi-tenant building. The term "Profits"
shall mean the following: the gross revenue received from the assignee or
sublessee during the sublease term or during the assignment, with respect to the
space covered by the sublease or the assignment ("Transferred Space") less: (a)
the gross revenue paid to Landlord by Tenant during the period of the sublease
term or as a result of the assignment with respect to the Transferred Space; (b)
any commercially reasonable improvement allowance or other commercially
reasonable economic concession (planning allowance, moving expenses, etc.), paid
by Tenant to sublessee or assignee, (c) commercially reasonable brokers'
commissions; and (d) reasonable attorneys' fees; provided, however, under no
circumstance shall Landlord be paid any Profits until Tenant has recovered all
the items set forth in subparts (a) through (d) for such Transferred Space. No
sublease or assignment shall release Tenant from its obligations under this
Lease.
LEASE AGREEMENT PAGE 15
16. LANDLORD'S ACCESS
Landlord shall be entitled to have access to the Premises only when
accompanied by a representative of Tenant, and upon no less than twenty-four
(24) hours' prior written notice specifying the purpose for the access and
identifying by name and business any persons other than Landlord who will
accompany Landlord; provided, however, that in the case of an emergency that
gives rise to imminent danger to persons or property, Landlord shall give Tenant
such notice as may be practicable under the circumstances. Access by Landlord
shall be strictly in accordance with any security and confidentiality
requirements that Tenant may impose from time to time, including, without
limitation, a requirement that any person having access to the Premises sign and
deliver to Tenant a nondisclosure and confidentiality agreement in form and
content acceptable to Tenant. At Tenant's request, Landlord shall prevent access
to the Premises by any prospective purchaser or tenant or other visitor whom
Landlord intends to bring onto the Premises who is or may reasonably be
suspected by Tenant to be or to represent a competitor of Tenant. In exercising
its right of entry, Landlord shall cause the least interference with Tenant's
business that is reasonably possible.
17. INDEMNIFICATION; RELEASE AND WAIVER OF SUBROGATION
17.1 TENANT'S INDEMNIFICATION
Tenant shall indemnify, defend and hold harmless Landlord from and against
all losses, costs, damages, expenses and liabilities, including, without
limitation, reasonable attorneys' fees and disbursements, that Landlord may
incur or pay out (including, without limitation, to Landlord) by reason of (a)
any accidents, damages or injuries to persons or property occurring in, on or
about the Premises during the Term or while Tenant is otherwise occupying the
Premises (unless the same shall have been caused by Landlord's negligence or
wrongful act or the negligence or wrongful act of Landlord), (b) any work done
during the Term of this Lease in or to the Premises except if done by Landlord
or Landlord's officers, partners, employees, agents and/or invitees (other than
Tenant), and (c) any accidents, damages or injuries to persons or property
occurring in, on or about the Building during the Term or while Tenant is
otherwise occupying the Premises to the extent resulting from any act, omission
or negligence on the part of Tenant and/or its officers, partners, employees,
agents, customers and/or invitees.
17.2 LANDLORD'S INDEMNIFICATION
Landlord shall indemnify, defend and hold harmless Tenant from and against
all losses, costs, damages, expenses and liabilities, including, without
limitation,
LEASE AGREEMENT PAGE 16
reasonable attorneys' fees and disbursements, that Tenant may incur or pay out
(including, without limitation, to Landlord) by reason of any accidents, damages
or injuries to persons or property occurring in, on or about the Land to the
extent resulting from any act, omission or negligence on the part of Landlord
and/or its officers, partners, employees, agents, customers and/or invitees
(other than Tenant).
17.3 WAIVER OF CONSEQUENTIAL DAMAGES
Landlord and Tenant each waive any claim that it may have against the
other under this Lease for consequential damages.
17.4 RELEASE AND WAIVER OF SUBROGATION
Neither Landlord nor Tenant shall be liable to the other or to any
insurance company or companies (by way of subrogation or otherwise) insuring the
other party or parties for any loss or damage to any building, structure or
tangible personal property of the other party or parties or of any third party
occurring in or about the Premises or Building, even though such loss or damage
might have been occasioned by the negligence of such party, its agents or
employees, if such loss or damage would fall within the scope of a fire and
extended coverage (all risk) policy of insurance, whether or not the party or
parties suffering the loss actually maintained such insurance. Each party shall
obtain from its respective insurer under each insurance policy it maintains a
waiver of all rights of subrogation which the insurer of that party may have
against the other parties, and Landlord and Tenant shall indemnify the others
against any loss or expense, including reasonable attorneys' fees, resulting
from the failure to obtain such a waiver.
17.5 INDEMNIFICATION PURSUANT TO RCW 4.24.115
In compliance with RCW 4.24.115 as in effect on the date of this Lease,
all provisions of this Lease pursuant to which Landlord or Tenant (the
"Indemnitor") agrees to indemnify the other (the "Indemnitee") against liability
for damages arising out of bodily injury to persons or damage to property
relative to the construction, alteration, repair, addition to, subtraction from,
improvement to or maintenance of any building, road or other structure, project,
development or improvement attached to Land, including the Premises, (i) shall
not apply to damages caused by or resulting from the sole negligence of the
Indemnitee, its agents or employees, and (ii) to the extent caused by or
resulting from the concurrent negligence of (a) the Indemnitee or the
Indemnitee's agents or employees and (b) the Indemnitor or the Indemnitor's
agents or employees, shall apply only to the extent of the Indemnitor's
negligence; provided, however, the limitations on indemnity set forth in this
paragraph shall automatically and without further act by either Landlord or
Tenant be deemed
LEASE AGREEMENT PAGE 17
amended so as to remove any of the restrictions contained in this paragraph that
are no longer required by then applicable law.
Landlord and Tenant specifically agree that the provisions of this Section
17.5 also apply to any claim of injury or damage to the parties' respective
employees or their property. Each of Landlord and Tenant acknowledges and agrees
that as to such claims, it waives any right of immunity that it may have under
Title 51 RCW as amended or replaced. This waiver and agreement was specifically
negotiated by Landlord and Tenant and is solely for their benefit and is not
intended as a waiver of their immunity under Title 51 RCW for any other purpose.
18. DAMAGE AND DESTRUCTION
18.1 NOTICE OF CASUALTY
If the Premises, the Building, or any part thereof, should be damaged or
destroyed by fire, tornado or other casualty, Tenant shall promptly give notice
thereof to Landlord.
18.2 TOTAL DESTRUCTION
If the Building should be totally destroyed by fire, tornado or other
casualty, or if it should be so damaged thereby that rebuilding or repairs
cannot be completed within one hundred eighty (180) days after the date of the
casualty, then, at Tenant's option, this Lease shall terminate and Rent shall be
abated during the unexpired portion of the Term, effective upon the date of the
casualty. If the Building can be restored within such one-hundred eighty (180)
day period, but (i) the cost to repair the damage caused by such a casualty is
reasonably estimated to exceed $500,000, and (ii) the casualty is not a peril
named in the policies of insurance Landlord maintains or is required to maintain
under the terms of this Lease, then Landlord shall have the right to terminate
this Lease by written notice to Tenant given within thirty (30) days following
the date of the casualty and Rent shall be abated during the unexpired portion
of the Term, effective upon the date of the casualty. Notwithstanding anything
herein to the contrary, if the Building is substantially damaged during the last
year of the then-current Term, either party may terminate this Lease by written
notice to the other given within fifteen (15) days of the occurrence of the
damage, in which event Rent shall xxxxx during the unexpired Term effective upon
the date of occurrence of the damage; provided, however, that any termination
notice given by Landlord shall be null and void if Tenant elects, within fifteen
(15) days of receipt of that notice, to exercise its option to extend the Term
and gives written notice of that election to Landlord.
LEASE AGREEMENT PAGE 18
18.3 PARTIAL DESTRUCTION
If the Building should be damaged by fire or other casualty and this Lease
does not terminate pursuant to Section 18.2 above, then Landlord shall at its
sole cost and expense thereupon proceed with reasonable diligence to rebuild and
repair the Building to substantially the condition in which it existed prior to
such damage, except that Landlord shall not be required to rebuild, repair or
replace any part of the partition, fixtures, additions and other improvements
which may have been placed in, or about the Premises by Tenant or that are owned
by Tenant. If the Premises are untenantable or inaccessible in whole or in part
following such damage, then Rent payable during the period in which they are
untenantable shall be reduced in proportion to the untenantable or inaccessible
portion(s) of the Premises. In the event that Landlord shall fail to complete
such repairs and rebuilding within two hundred seventy (270) days after the date
on which Landlord receives notice of the casualty ("Notice Date"), Tenant may at
its option terminate this Lease by written notice of termination given to
Landlord.
19. CONDEMNATION
19.1 TOTAL TAKING
If the whole or any substantial part of the Premises or a substantial
portion of the parking (such that Tenant cannot reasonably use the Premises for
their intended purposes) should be taken for any public or quasi-public use
under governmental law, ordinance or regulation, or by right of eminent domain,
or by private purchase in lieu thereof and the taking would prevent or
materially interfere with the use of the Premises for the purpose for which they
are being used, this Lease shall terminate and Rent shall be abated during the
unexpired portion of this Lease, effective when the physical taking of said
Premises shall occur.
19.2 PARTIAL TAKING
If part of the Premises shall be taken for any public or quasi-public use
under any governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, and this Lease is not terminated
as provided in the subparagraph above, this Lease shall not terminate but the
Rent payable hereunder during the unexpired portion of this Lease shall be
reduced in proportion to the portion of the Premises taken.
19.3 AWARD
In the event of any such taking or private purchase in lieu thereof,
Landlord shall be entitled to receive the entire award, and Tenant hereby
assigns to Landlord
LEASE AGREEMENT PAGE 19
any right it may have to any such award, except that Tenant shall be entitled to
make a separate claim for any of its personal property that is taken and for
moving expenses. Notwithstanding the foregoing, if Landlord receives an award
that exceeds the cost of any repairs that Landlord is required to make to the
Premises, then Landlord shall pay to Tenant from any remaining portion of the
award the unamortized cost of improvements made or otherwise owned by Tenant and
taken by the condemning authority.
20. SUBORDINATION, RECOGNITION, NON-DISTURBANCE AND ATTORNMENT
20.1 SUBORDINATION
This Lease shall be automatically subordinate to the lien of any deed of
trust or mortgage that now or hereafter affects the Premises or Building, and to
any renewals, modifications or extensions thereof ("Mortgage"), provided that a
Subordination, Attornment and Non-Disturbance Agreement ("SAND Agreement") in
commercially reasonable form is executed, acknowledged and delivered by the
mortgagee to Tenant. The SAND Agreement must be in form suitable for recording
and shall contain, among other things, substantially the following provisions:
(a) Mortgagee consents to and approves this Lease;
(b) Tenant shall not be named or joined as a party defendant in any
suit, action or proceeding for the foreclosure of the Mortgage or to enforce any
rights under the Mortgage or obligation secured thereby except to the extent
that naming Tenant is necessary to obtain jurisdiction of the Premises, and not
so as to make Tenant a party to any such proceeding;
(c) So long as Tenant is not in default under this Lease, the
possession by Tenant of the Premises and the Tenant's rights in the Premises
shall not be disturbed, affected or impaired by, nor will the Lease or the Term
be terminated or otherwise affected by
(1) any suit, action or proceeding upon the Mortgage or the
obligation secured thereby, or for the foreclosure of the Mortgage or the
enforcement of any rights under the Mortgage or any other documents held by the
Mortgagee, or by any judicial sale or execution or other sale of the Premises,
or by any deed given in lieu of foreclosure, or by the exercise of any other
rights given to the Mortgagee by any other documents or as a matter of law, or
(2) any default under the Mortgage or the obligation secured;
LEASE AGREEMENT PAGE 20
(d) Mortgagee acknowledges and agrees that all trade fixtures,
equipment and other personal property owned by Tenant and located on the
Premises shall be and remain the property of Tenant and may be removed by Tenant
in accordance with the terms of this Lease. In no event (including a default
under the Lease or Mortgage) shall Mortgagee have any liens, rights or claims in
Tenant's personal property, and Mortgagee expressly waives all rights of levy,
distraint, or execution with respect to that property;
(e) This Lease shall continue in full force and effect without the
necessity of executing any new lease upon all of the same terms, covenants and
conditions contained in this Lease, and Tenant shall attorn to and recognize
Mortgagee, or any purchaser at a foreclosure sale, as landlord under this Lease;
(f) Any agreement between Mortgagee and Tenant shall bind and inure
to the benefit of and be enforceable by the parties thereto and their respective
heirs, personal representatives, successors and assigns;
(g) Tenant agrees with Mortgagee that if Mortgagee succeeds to the
interest of Landlord under the Lease, Mortgagee shall not be:
(1) liable for any action or omission of any prior landlord
under the Lease;
(2) subject to any offsets or defenses which Tenant might have
against any prior landlord;
(3) bound by any Rent that Tenant has paid for more than
thirty (30) days in advance to any prior landlord; or
(4) bound by any security deposit that Tenant may have paid to
any prior landlord, unless such deposit is in an escrow fund available to
Mortgagee.
Tenant shall execute and send to Landlord any such SAND Agreement within
thirty (30) days of receipt if the SAND Agreement contains substantially the
provisions set forth above and is otherwise in commercially reasonable form, or
within fifteen (15) days after agreement of the parties to the contents of same.
20.2 HOLDER'S ELECTION
If the holder of any Mortgage on the Premises requires that this Lease
have priority over its Mortgage, Tenant shall, upon request of the holder,
execute, acknowledge and deliver to the holder an agreement acknowledging such
priority.
LEASE AGREEMENT PAGE 21
21. NOTICES
All notices and demands that are required or permitted under this Lease
shall be in writing, and shall be personally delivered or sent by a nationally
recognized private carrier of overnight mail (e.g. FedEx) or by United States
Certified Mail, return receipt requested and postage prepaid, to the parties at
the addresses listed below or at such other addresses as the parties may
designate by notice from time to time. Notices shall be deemed to have been
given upon receipt or attempted delivery where delivery is not accepted.
To Landlord: Bellevue Trade Center, LLC
X.X. Xxx 0000
Xxxxxxxx, XX 00000
To Tenant: ICOS Corporation
00000 00xx Xxxxxx XX
Xxxxxxx, XX 00000-0000
Attn: Facilities Director
with a copy to ICOS Corporation
00000 00xx Xxxxxx XX
Xxxxxxx, XX 00000-0000
Attn: General Counsel
22. RIGHT OF FIRST OFFER
Tenant shall have the right of first offer (the "Right of First Offer") to
purchase Landlord's interest in the Property (as that term is hereinafter
defined) as provided in this Section 22. In the event Landlord desires to sell
all or any portion of its interest in the Land and Building (together, the
"Property") at any time during the Term, Landlord shall give notice to Tenant in
writing ("Notice") at least sixty (60) days prior to the proposed sale
specifying the terms and conditions, including the nature of the interest, the
purchase price and the closing date, upon which Landlord is willing to sell.
Following receipt of the Notice, Tenant shall have fifteen (15) business days to
elect to purchase the interest identified in the Notice on the terms and
conditions therein set forth, such election to be exercised by written notice
given to Landlord. If Tenant does not elect within that fifteen (15) business
day period to purchase the interest specified in the Notice, then Landlord may
sell that interest to any third party on terms no less favorable to the buyer
than the terms and conditions that are described in the Notice. If Landlord does
not sell that interest within eighteen (18) months after the date of the Notice
on the same terms and conditions that are
LEASE AGREEMENT PAGE 22
described in the Notice, then before any sale of all or any part of Landlord's
interest in the Property, Landlord shall again comply with the terms of this
Section 22.
Notwithstanding anything herein to the contrary, Tenant shall not have the
right to exercise its Right of First Offer at any time that Tenant is in default
after any notice and opportunity to cure to which it is entitled under the terms
of this Lease, or if Tenant has assigned all of its interest in this Lease to
any party other than an Affiliate for the full remaining Term, or if Tenant has
subleased more than 50% of the Premises to any party other than an Affiliate for
the full remaining Term.
If Tenant timely exercises this Right of First Offer, then Tenant shall
have the obligation to purchase the Property on the terms specified in the
Notice, Tenant shall continue to pay Rent through closing, and this Lease shall
terminate upon the transfer of title to Tenant.
The right of first offer described in this Section 22 shall not apply to
any transfer to a member of the family of Landlord or to an entity that is owned
or controlled by Landlord.
Upon any sale of the Property to a third party pursuant to this Section
22, Tenant's Right of First Offer shall terminate.
23. CONFIDENTIALITY OF LEASE AND LEASE MATTERS
Landlord agrees that the terms and conditions of this Lease and details
regarding its negotiation are and shall remain confidential between Landlord and
Tenant, except that Landlord shall have the right to disclose this Lease and its
terms to its accountants, lawyers and lenders having a need to review its terms
in connection with rendering services to Landlord. Landlord shall not
distribute, copy or otherwise submit this Lease or any summary thereof, orally
or in writing, to any other person or entity. Landlord shall make no
announcements regarding Tenant's proposed or actual occupancy of the Premises
without Tenant's prior written consent, which Tenant may withhold in its sole
discretion. In addition, all information learned by or disclosed to Landlord
with respect to Tenant's business or information disclosed or discovered during
an entry by Landlord into the Premises, shall be kept strictly confidential by
Landlord, Landlord's legal representatives, successors, assigns, employees,
servants and agents and shall not be used (except for Landlord's confidential
internal purposes) or disclosed to others by Landlord, or Landlord's servants,
agents, employees, legal representatives, successors or assigns, without the
express prior written consent of Tenant, which Tenant may withhold in its sole
and absolute discretion.
LEASE AGREEMENT PAGE 23
24. AGENTS AND BROKERS
At the signing of this Lease, Insignia Xxxxxx Xxxxxxx represented Tenant.
Landlord shall pay a commission to Insignia Xxxxxx Xxxxxxx pursuant to a
separate agreement. Each party represents to the other that it has engaged no
other agent or broker in connection with the negotiations leading to this Lease,
and shall hold the other harmless from any claim or demand from any other agent
or broker claiming to have acted on behalf of the indemnifying party in
connection with this Lease.
25. OTHER PROVISIONS
25.1 LATE CHARGE AND INTEREST ON LATE PAYMENTS
If Tenant fails to pay any installment of Rent or other charge to be paid
by Tenant pursuant to this Lease within five (5) business days after the same
becomes due and payable, then Tenant shall pay a late charge equal to the
greater of five percent (5%) of the amount of such payment or $250. In addition,
interest shall be paid by Tenant to Landlord on any payments of Rent not paid
within five (5) business days after the same becomes due and payable from the
date due until paid at the rate equal to five percent (5%) over the prime rate
announced from time to time by Bank of America ("Default Interest Rate"). Such
late charge and interest shall constitute Rent.
25.2 SIGNS
Tenant shall have the right to install and maintain its signage on and in
the Building provided Tenant obtains all permits required by the City of
Bellevue. Tenant shall remove its signage and repair any damage occasioned by
such removal promptly upon expiration of the Term.
25.3 CONSENT AND DISCRETION
Whenever the consent of a party to this Lease is required, except as may
otherwise be expressly provided herein, such consent shall not be unreasonably
withheld, conditioned or delayed. Whenever a party exercises its discretion
under the terms of this Lease, except as may otherwise be expressly provided
herein, that discretion shall be exercised reasonably.
25.4 NO WAIVER
No waiver by either party of any breach of this Lease shall be effective
unless it is in writing, and shall not be deemed a waiver of any other breach,
or any subsequent breach of the same obligation. Landlord's acceptance of Rent
after a default by
LEASE AGREEMENT PAGE 24
Tenant shall not constitute a waiver of any breach other than the one for which
payment is made.
25.5 GOVERNING LAW
This Lease shall be governed by, and construed and enforced in accordance
with, the laws of the State of Washington.
25.6 ATTORNEYS' FEES
If Landlord or Tenant shall commence an action against the other arising
out of or in connection with this Lease, the prevailing party shall be entitled
to recover its costs of suit and reasonable attorney's fees.
25.7 ENTIRE AGREEMENT
This Lease, including all Exhibits attached to it, constitutes the entire
agreement between Landlord and Tenant with respect to the Premises and may not
be amended or altered except by written agreement executed by both parties. The
captions and section numbers appearing in this Lease are inserted only as a
matter of convenience and are not intended to define, limit, construe, or
describe the scope or intent of any section or paragraph.
25.8 NEGOTIATION AND CONSTRUCTION
This Lease and each of the terms and provisions of it are deemed to have
been explicitly negotiated between the parties, and the language in all parts of
this Lease shall, in all cases, be construed according to its fair meaning and
not strictly for or against either party.
25.9 PARTIAL INVALIDITY
If any term, covenant or condition of this Lease or the application
thereof to any person or circumstance is, to any extent, invalid or
unenforceable, the remainder of this Lease, or the application of such term,
covenant or condition to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
other term, covenant or condition of this Lease shall be valid and be enforced
to the fullest extent permitted by law.
25.10 BINDING ON SUCCESSORS
This Lease shall bind the parties' respective heirs, successors,
representatives and permitted assigns.
LEASE AGREEMENT PAGE 25
25.11 LANDLORD'S LIMITED LIABILITY
Tenant shall look solely to Landlord's interest in the Premises for
recovery of any judgment against Landlord, it being agreed that Landlord (and if
Landlord is a partnership or limited liability company, its partners or members,
and if Landlord is a corporation, its directors, officers or shareholders) shall
never be personally liable for any personal judgment or deficiency decree or
judgment against it.
25.12 TIME IS OF THE ESSENCE
Time is of the essence with respect to the performance of every provision
of this Lease in which time of performance is a factor.
26. CONDITIONS TO EFFECTIVENESS
This Lease, and Tenant's obligations under it, are expressly conditioned
upon the following having occurred prior to November 4, 2002:
Closing of the acquisition by Tenant certain personal property and
fixtures from Molecumetics, Ltd.
27. COMPLIANCE WITH HAZARDOUS MATERIALS LAWS
Tenant shall at all times and in all respects comply with all federal,
state and local laws, ordinances and regulations ("Hazardous Materials Laws")
relating to the industrial hygiene, environmental protection or the use,
analysis, generation, manufacture, storage, presence, disposal or transportation
of any oil, petroleum products, flammable explosives, asbestos, urea
formaldehyde, polychlorinated biphenyls, radioactive materials or waste, or
other hazardous, toxic, contaminated or polluting materials, substances or
wastes, including without limitation any "hazardous substances", "hazardous
wastes", "hazardous materials" or "toxic substances" under any such laws,
ordinances or regulations (collectively, "Hazardous Materials").
Tenant shall at its own expense procure, maintain in effect and comply
with all conditions of any and all permits, licenses and other governmental and
regulatory approvals required for Tenant's use of the Premises, including,
without limitation, discharge of (appropriately treated) materials or waste into
or through any sanitary sewer system serving the Premises. Except as discharged
into the sanitary sewer in strict accordance and conformity with all applicable
Hazardous Materials Laws, if and to the extent required by Laws, Tenant shall
cause any and all Hazardous Materials to be removed from the Premises and
transported solely by duly licensed haulers to duly licensed facilities for
final disposal of such Hazardous Materials and wastes. Tenant shall in all
respects, handle, treat, deal with and manage any and all Hazardous
LEASE AGREEMENT PAGE 26
Materials in, on, under or about the Premises in conformity with all applicable
Hazardous Materials Laws. All reporting obligations to the extent imposed upon
Tenant by Hazardous Materials Laws are solely the responsibility of Tenant. Upon
expiration or earlier termination of this Lease, Tenant shall cause all
Hazardous Materials (to the extent such Hazardous Materials are generated,
stored, released or disposed of on the Premises by Tenant during the Term) to be
removed from the Premises and transported for use, storage or disposal in
accordance and in compliance with all applicable Hazardous Materials Laws.
Tenant shall not enter into any settlement agreement, consent, decree or other
compromise in respect to any claims relating to any way connected with the
Premises or the Land without first notifying Landlord of Tenant's intention to
do so and affording Landlord ample opportunity to appear, intervene or otherwise
appropriately assert and protect Landlord's interest with respect thereto. In
addition, at Landlord's request, at the expiration of the Term of this Lease,
Tenant shall remove all tanks or fixtures which were placed on the Premises
during the term of this Lease and which contain, have contained or are
contaminated with, Hazardous Materials.
Tenant shall immediately notify Landlord in writing of (a) any
enforcement, clean-up, removal or other governmental or regulatory action
instituted, completed or threatened against Tenant pursuant to any Hazardous
Materials Laws and pertaining to Tenant's activities on the Premises; (b) any
claim of which Tenant has knowledge made or threatened by any person against
Landlord, or the Premises, relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from or claimed to result from any
Hazardous Materials in, on or about the Premises, Land or Building; and (c) any
reports of which Tenant has knowledge made to any environmental agency arising
out of or in connection with any Hazardous Materials in, on or about the
Premises during the Term or with respect to any Hazardous Materials removed from
the Premises during the Term, including, any complaints, notices, warnings,
reports or asserted violations in connection therewith. Upon written request of
Landlord (to enable Landlord to defend itself from any claim or charge related
to any Hazardous Materials Law), Tenant shall promptly deliver to Landlord
notices of hazardous waste manifests in Tenant's possession reflecting the legal
and proper disposal of all such Hazardous Materials removed or to be removed
from the Premises. All such manifests shall list the Tenant or its agent as a
responsible party and in no way shall attribute responsibility for any such
Hazardous Materials to Landlord.
27.1 COST OF COMPLIANCE WITH HAZARDOUS MATERIALS LAWS
Tenant shall be responsible only for that part of the cost of compliance
with Hazardous Materials Laws which relates to a breach by Tenant of the
covenants contained in this Lease to be kept and performed by Tenant.
LEASE AGREEMENT PAGE 27
27.2 LANDLORD'S REPRESENTATION; INDEMNIFICATION
Landlord represents that to the best of Landlord's knowledge, Landlord
knows of no Hazardous Materials on, in or under the Land, the Building or the
Premises, and of no condition on, in or under the Land, the Building or the
Premises that may give rise to liability under Hazardous Materials Laws.
Tenant shall indemnify, defend (with counsel reasonably acceptable to
Landlord), protect and hold harmless Landlord and each of Landlord's officers,
directors, partners, employees, agents, successors and assigns from and against
any and all claims, liabilities, damages, costs, penalties, forfeitures, losses
or expenses (including attorneys' fees) for death or injury to any person or
damage to any property whatsoever (including water tables and atmosphere)
arising or resulting, directly or indirectly, from the presence or discharge of
Hazardous Materials, in, on, under, upon or from the Premises during the Term or
from the transportation or disposal of Hazardous Materials to or from the
Premises during the Term to the extent caused by Tenant, whether knowingly or
unknowingly, the standard herein being one of strict liability. Tenant's
obligations hereunder shall include, without limitation, and whether foreseeable
or unforeseeable, all costs of any required or necessary repairs, clean-up or
detoxification or decontamination of the Premises or the Land, and the presence
and implementation of any closure, remedial action or other required plans in
connection therewith, and shall survive the expiration of or early termination
of the Term. For purposes of the indemnity provided herein, any acts or
omissions of Tenant, or its employees, agents, customers, sub-lessees,
contractors or sub-contractors of Tenant (whether or not they are negligent,
intentional, willful or unlawful) shall be strictly attributable to Tenant.
27.3 ENVIRONMENTAL AUDIT
Upon request by Landlord, upon expiration or earlier termination of the
Term, Tenant shall, at Tenant's expense, undertake and submit to Landlord, a
Phase 1 environmental audit and a written report of the final and approved
decommissioning of any portion of the Premises that needs to be decommissioned,
both from an environmental company or companies reasonably acceptable to
Landlord.
28. EXHIBITS
The following Exhibits are attached to and by this reference incorporated
into this Lease as though fully set forth in it.
EXHIBIT A Legal Description of the Premises
EXHIBIT B Reversion Property
LEASE AGREEMENT PAGE 28
IN WITNESS WHEREOF, the parties hereto execute this Lease as of the day
and year first above written.
LANDLORD:
BELLEVUE TRADE CENTER, LLC
/s/ Xxxx X. Xxxx
------------------------------------------
Name: Xxxx X. Xxxx
-------------------------------------
Title: Manager
------------------------------------
TENANT:
ICOS CORPORATION
/s/ Xxxx Xxxxxx
------------------------------------------
Name: Xxxx Xxxxxx
-------------------------------------
Title: EVP, Operations
------------------------------------
LEASE AGREEMENT PAGE 29
STATE OF WASHINGTON )
) ss.
COUNTY OF King )
On this 1st day of November, 2002, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared XXXXXXX X. XXXX, to me known to be the Managing Member of
BELLEVUE TRADE CENTER LLC, the limited liability company that executed the
within and foregoing instrument, and acknowledged said 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 he was duly qualified and acting as said
Managing Member of the company and that he was authorized to execute said
instrument on behalf of the company.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
(Signature of Notary)
Xxxxxxx X. Xxxxxxx
--------------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at Bellevue, WA
My appointment expires: 1-20-05.
LEASE AGREEMENT PAGE 30
STATE OF WASHINGTON )
) ss.
COUNTY OF Snohomish )
On this 1st day of November, 2002, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared XXXX XXXXXX, to me known to be the person who signed as EVP,
OPERATIONS of ICOS CORPORATION, the corporation that executed the within and
foregoing instrument, and acknowledged said 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 he was duly elected, qualified and acting as
said officer of the corporation, that he was authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
/s/ Xxxxx Xxxxx
-------------------------------------------
(Signature of Notary)
Xxxxx Xxxxx
-------------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at King County.
My appointment expires: 8-9-06.
LEASE AGREEMENT PAGE 31
EXHIBIT A
LEGAL DESCRIPTION OF THE PREMISES
PARCEL A:
Xxx 0 xx Xxxxx Xxxx Xx. 00-00, Xxxx of Bellevue recorded under Auditor's File
No. 8510119003, being a portion of the West half of the Northwest Quarter of
Section 28, Township 25 North, Range 5 East, X.X., in Xxxx County, Washington.
PARCEL B:
An easement for ingress and egress purposes over a strip of land in the City of
Bellevue, County of King, State of Washington, being a portion of the Northwest
Quarter of the Northwest Quarter of Section 28, Township 25 North, Range 5 East,
X.X., in Xxxx County, Washington, and being more particularly described as
follows:
Beginning at the Southeasterly corner of Xxx 0 xx xxx Xxxx xx Xxxxxxxx Xxxxx
Xxxx No. 84-42, recorded in Book 46 of Surveys at page 279, under Auditor's File
No. 8510119003, King County Records;
Thence from said point of beginning along the Westerly right-of-way line of
120th Avenue N.E. South 01(degree)12'00" West 45.00 feet;
Thence leaving said Westerly right-of-way line North 88(degree)32'06" West 52.00
feet;
Thence North 01(degree)27'54" East 45.00 feet to the Southerly line of said Lot
3;
Thence along said Southerly line South 88(degree)32'06" East 51.79 feet to the
point of beginning.
PARCEL C:
Together with an Easement for landscape purposes over a 6.00 foot wide strip of
land in the City of Bellevue, County of King, State of Washington, being more
particularly described as follows:
Beginning at the Southwesterly corner of Xxx 0 xx xxx Xxxx xx Xxxxxxxx Xxxxx
Xxxx No. 84-42, recorded in Block 46 of Surveys, page 279, under Auditor's File
No. 8510119003, King County Records;
Thence from said point of beginning along the Southerly line of said Xxx 0 Xxxxx
00(xxxxxx)00'00" Xxxx 203.19 feet;
Thence leaving said Southerly line South 01(degree)27'43" West 6.00 feet;
Thence North 88(degree)32'06" West 203.19 feet;
Thence North 01(degree)27'54" East 6.00 feet to the point of beginning.
PAGE 1
All situate in the City of Bellevue, County of King, State of Washington.
LEASE AGREEMENT PAGE 2
EXHIBIT B
REVERSION PROPERTY
All walls
All doors and windows
All ceilings
All floor coverings
All water distribution systems, water tanks and water fixtures
All air distribution systems
All mechanical infrastructure
All built in cabinetry and shelving
All built in rack systems
Peg Boards
Purified and deionized water systems
All electrical power systems, boxes, lights, plugs and distribution
All backup power systems including power generators
Lab benchwork
Bio Safety Cabinets
Chemical fume hoods
Any attached chemical storage cabinets (whether ground or ceiling exhausted)
Toilet accessories, signs and lockers
All Security systems and lock systems
Computer systems dedicated to the operation of the Building
All HVAC equipment
Building management systems
Dark room
Lab specific plumbing components
Lab gas systems
Air compressors
Vacuum pumps
Glasswash equipment (glassware washers, dryers, autoclaves)
Acid neutralization tanks
Cold rooms and freezer rooms
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