1
LEASE AGREEMENT
1. Parties. This Lease, dated for reference purposes only, July
28, 1995 is made by and between S.E. 30th Company, a Joint Venture (herein
called "Landlord"), and Optiva Corporation, a Washington Corporation [herein
called "Tenant").
2. Premises. Landlord hereby leases to Tenant and Tenant leases from
Landlord for the term, at the rental, and upon all of the conditions set forth
herein, that certain real property situated in the City of Bellevue, County of
King, State of Washington, commonly known as 29,380 square feet of office and
warehouse space located at 00000 X.X. 00xx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx and
described as see Legal Description attached as Exhibit "A". Said real property,
including the land and all improvements thereon, is herein called the
"Premises". A map showing the Premises outlined in red is attached hereto as
Exhibit "B" and is by this reference made a part hereof.
3. Term.
3.1 Term. The term of this Lease shall be for sixty (60)
months commencing on November 1, 1995 and ending on October 31, 2000 unless
sooner terminated pursuant to any provisions hereof.
3.2 Delay in Commencement. Notwithstanding said commencement
date, if for any reason Landlord cannot deliver possession of the Premises to
Tenant on said date, Landlord shall not be subject to any liability therefore,
nor shall such failure affect the validity of this Lease or the obligations of
Tenant hereunder or extend the term hereof, but in such case Tenant shall not be
obligated to pay rent until possession of the Premises is tendered to Tenant. If
the actual term commencement date be a date other than the scheduled term
commencement date, all dates set forth in this Lease Agreement shall be adjusted
accordingly. However, if Landlord shall not have delivered possession of the
Premises within ninety (90) days from said commencement date, Tenant may, at
Tenant's option, by notice in writing to Landlord within ten (10) days
thereafter, cancel this lease. If either party cancels as herein provided,
Landlord shall return any money previously deposited by Tenant and the parties
shall be discharged from all obligations hereunder.
3.3 Early Possession. In the event that Landlord shall permit
Tenant to occupy the Premises prior to the commencement date of the term, such
occupancy shall be subject to all of the provisions of this Lease. Said early
possession shall not advance the termination date of this Lease.
3.4 Delivery of Possession. Tenant shall be deemed to have
taken possession of the Premises when the Premises has been vacated by the
current tenant.
4. Rent. Tenant shall, without notice or demand, pay to Landlord
as rent for the Premises equal monthly installments of Sixteen Thousand & No/100
Dollars ($16,000.00) for the period November 1, 1995 through October 31, 1998,
increasing to Seventeen Thousand & No/100 Dollars ($17,000.00) for the period
November 1, 1998 through October 31, 2000, in advance, on the first day of each
month of the term hereof. Tenant shall pay Landlord prior to occupancy the sum
of Sixteen Thousand & No/100 Dollars ($16.000.00) representing the first month's
rent. 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 any deduction, offset, or
abatement, in lawful money of the United States of America to Landlord at the
address stated herein or to such other persons or at such places as Landlord may
designate in writing.
5. Security Deposit. Tenant shall deposit with Landlord upon
execution hereof the sum of Seventeen Thousand & No/100 Dollars ($17,000.00) as
security for Tenant's faithful performance of Tenant's obligations hereunder. If
Tenant fails to pay rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Landlord may use, apply or retain
all or any portion of said deposit for the payment of any rent
2
or other charge in default or for the payment of any other sum to which Landlord
may become obligated by reason of Tenant's default, or to compensate Landlord
for any loss or damage which Landlord may suffer thereby. If Landlord so uses or
applies all or any portion of said deposit, Tenant shall within ten (10) days
after written demand therefore deposit cash with Landlord in an amount
sufficient to restore said deposit to the full amount hereinabove stated, and
Tenant's failure to do so shall be a breach of this Lease and Landlord may at
its option terminate this Lease. Landlord shall not be required to keep said
deposit separate from its general accounts. If Tenant performs all of Tenant's
obligations hereunder, said deposit or so much thereof as has not theretofore
been applied to Landlord, shall be returned, without payment of interest or
other increment for its use, to Tenant (or, at Landlord's option, to the last
assignee, if any, of Tenant's interest hereunder) within fifteen (15) days after
the expiration of the term hereof, or after Tenant has vacated the Premises,
whichever is later.
6. Use.
6.1 Use. The Premises shall be used and occupied only for
office administration, research and development, production, warehousing of
non-durable goods and for no other purpose without prior written consent of
Landlord, which consent may be withheld or conditioned as Landlord may deem
appropriate within the exercise of its sole discretion.
6.2 CompIiance with Law. Tenant shall, at Tenant's expense,
comply promptly with all laws, rules, orders, ordinances, directions,
regulations, and requirements of federal, state, county and municipal
authorities, including without limitation, those relating to persons with
disabilities (ADA) now in force or which may hereafter be in force, which shall
impose any duty upon Landlord or Tenant with respect to the use, occupation or
alteration of the Premises. 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 tenant of the building containing the Premises,
which shall tend to unreasonably disturb such other tenants.
6.3 Condition of Premises. Tenant hereby accepts the Premises
in their condition existing as of the date of the possession hereunder, subject
to all applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Premises, and accepts this
Lease subject thereto and to all matters disclosed thereby and by any exhibits
attached hereto. Tenant acknowledges that neither Landlord nor Landlord's agent
has made any representation or warranty as to the suitability of the Premises
for the conduct of Tenant's business.
6.4 Insurance Cancellation. Notwithstanding the provisions of
Article 6.1 hereinabove, no use shall be made or permitted to be made of the
Premises nor acts done which will cause the cancellation of any insurance policy
covering said Premises or any building of which the Premises may be a part, and
if Tenant's use of the Premises causes an increase in said insurance rates,
Tenant shall pay any such increase.
7. Maintenance, Repairs and Alterations.
7.1 Landlord's Obligations. Subject to the provisions of
Article 9, and except for damage caused by any negligent or intentional act or
omission of Tenant, Tenant's agents, employees, or invitees, Landlord, at
Landlord's expense, shall keep in good order, condition and repair the
foundations and exterior walls of the Premises. Landlord shall not however, be
obligated to paint such exterior, nor shall Landlord be required to maintain the
interior surface of exterior walls, windows, doors or plate glass. Landlord
shall have no obligations to make repairs under this Article 7.1 until a
reasonable time after receipt of written notice of the need for such repairs.
Tenant expressly waives the benefits of any statute now or hereafter in effect
which would otherwise afford Tenant the right to make repairs at Landlord's
expense or to terminate this Lease because of Landlord's failure to keep the
Premises in good order, condition and repair.
-2-
3
7.2 Tenant's Obligations. Subject to the provisions of Article
7.1 and Article 9. Tenant, at Tenant's expense, shall keep in good order,
condition and repair the Premises and every part thereof (regardless of whether
the damaged portion of the Premises or the means of repairing the same are
accessible to Tenant) including, without limiting the generality of the
foregoing, all plumbing, heating, air conditioning, ventilating, electrical and
lighting facilities and equipment, fixtures, interior walls, ceilings, roof,
windows, doors, plate glass, and skylights, tenant identification signs and
fences surrounding the Premises including but not limited to damage due to
break-ins, theft or vandalism. If the Premises include a fire sprinkler system
Tenant shall be responsible for all repairs and maintenance including performing
an annual inspection of said system and providing Landlord with a copy of the
inspection report. If the system is monitored by a central monitoring station
Tenant shall be responsible for all costs. Roof repairs up to $5,000 per year
shall be at the expense of Tenant while costs exceeding $5,000 shall be mutually
agreed upon and borne by the Landlord. During the term of this Lease, Tenant
shall contract for preventative maintenance and a minimum of four (4) filter
changes per year on the heating, ventilating and air conditioning (HVAC)
systems. Annually Tenant shall provide Landlord with evidence that a maintenance
contract exists. Tenant shall be directly responsible for any repairs to the
HVAC System serving the Premises. Tenant is responsible for maintenance
(including periodic cleaning) of the catch basins serving the parking lot areas.
Tenant shall reimburse Landlord for all damage done to the Premises, normal wear
and tear excepted, occasioned by any act or omission of Tenant or Tenant's
officers, contractors, agents, invitees, licensees, or employees, including, but
not limited to, cracking or breaking of glass.
7.3 Surrender. On the last day of the term hereof, or on any
sooner termination, Tenant shall surrender the Premises to Landlord in good
condition, broom clean, ordinary wear and tear and damage by an insured peril
excepted. Tenant shall repair any damage to the Premises occasioned by its use
thereof, or by the removal of Tenant's trade fixtures, signs, furnishings and
equipment pursuant to Article 7.5, which repair shall include the patching and
filling of holes and repair of structural damage.
7.4 Landlord's Rights. If Tenant fails to perform Tenant's
obligations under this Article 7, Landlord may, at its option (but shall not be
required to) enter upon the Premises, after ten (10) days prior written notice
to Tenant or with no prior written notice if an emergency, and put the same in
good order, condition and repair, and the cost thereof together with interest
thereon at the rate of sixteen percent (16%) per annum, shall become due and
payable as additional rent to Landlord together with Tenant's next rental
installment.
7.5 Alterations and Additions.
(a) Tenant shall not, without Landlord's prior
written consent, make any alterations, improvements, or additions in, on, or
about the Premises, except for non structural alterations not exceeding Five
Thousand Dollars ($5,000) in cost. As a condition to giving such consent,
Landlord may require that Tenant remove any such alterations, improvements,
additions or utility installations at the expiration of the term, and to restore
the Premises to their prior condition.
(b) 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 and from
time to time to post and maintain on the Premises such notices as Landlord
reasonably deems necessary to protect the Premises and Landlord from mechanic's
liens, materialmen's liens, or any other liens. In any event, Tenant shall pay,
when due, all claims for labor or materials furnished to or for Tenant or for
use in the Premises. Tenant shall not permit any mechanic's or materialmen's
liens to be levied against the Premises for any labor or material furnished to
Tenant or claimed to have been furnished to Tenant or to Tenant's agents or
contractors in connection with work of any character performed or claimed to
have been performed on the Premises by or at the direction of Tenant.
(c) Unless Landlord requires their removal, as
set forth in Article 7.5(a), all alterations, improvements, or additions which
may be made on the Premises shall become the property of Landlord and
-3-
4
remain upon and be surrendered with the Premises at the expiration of the term.
Notwithstanding the provisions of this Article 7.5(c). 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 subject to the
provisions of Article 7.3.
8. Insurance Indemnity.
8.1 Insuring Party. With reference to insurance described in
Articles 8.2 and 8.3 the term "insuring party" shall mean the Tenant and
Landlord respectively. Tenant shall reimburse Landlord for the cost of the
insurance stated in Article 8.3, as additional rent, upon fifteen (15) days
advance written notice.
8.2 Liability Insurance. Tenant shall, at its sole expense,
obtain and keep in force during the term of this Lease a policy of comprehensive
public liability insurance insuring Landlord and Tenant against all liability
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be in an amount of not less
than One Million Dollars ($1,000,000) for injury or death of any person in any
one accident or occurrence. Such insurance shall further insure Landlord and
Tenant against liability for property damage of at least Five Hundred Thousand
Dollars ($500,000). The limits of said insurance shall not, however, limit the
liability of Tenant hereunder. In the event that the Premises constitute a part
of a larger property said insurance shall have a Landlord's Protective Liability
endorsement attached thereto. If Tenant shall fail to procure and maintain said
insurance Landlord may, but shall not be required to, procure and maintain the
same, but at the expense of Tenant.
8.3 Property Insurance. The Landlord shall obtain and keep in
force during the term of this Lease a policy or policies of insurance covering
loss or damage to the Premises, in the amount of the full replacement value
thereof, or as required by any lender, providing protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk to included earthquake and
flood) and sprinkler leakage. Said policy may include a deductible, the cost of
said deductible shall be borne in accordance with Articles 7.1 and 7.2. In
addition thereto, the Landlord shall maintain (i) full coverage plate glass
insurance on the Premises, (ii) air conditioning equipment, and other pressure
vessels systems located in, on, or about the Premises with limits of not less
than One Hundred Thousand Dollars ($100,000) per occurrence and (iii) rent loss
insurance in favor of Landlord insuring Landlord against any loss of rental from
damage or destruction of the premises for a period of least twelve (12) months
from the date of such damage or destruction. Said insurance shall provide for
payment for loss thereunder to Landlord or to the holder of a first mortgage or
deed of trust on the Premises. If the Landlord fails to procure and maintain
said insurance, the Tenant may, but shall not be required to, procure and
maintain the same at its expense.
8.4 Insurance Policies. Insurance required hereunder shall be
in companies rated A1, AAA or better in "Best Insurance Guide." The insuring
party shall deliver prior to possession, to the other party, copies of policies
of such insurance or certificates evidencing the existence and amounts of such
insurance with loss payable clauses satisfactory to Landlord. No such policy
shall be cancelable or subject to reduction of coverage or other modification
except after ten (10) days prior written notice to Landlord. If Tenant is the
insuring party, Tenant shall, within ten (10) days prior to the expiration of
such policies, furnish Landlord with renewals thereof, or Landlord may order
such insurance and charge the cost thereof to Tenant, which amount shall be
payable by Tenant upon demand. Tenant shall not do or permit to be done anything
which shall invalidate the insurance policies referred to in Article 8.3. Tenant
shall forthwith, upon Landlord's demand, reimburse Landlord for any additional
premiums attributable to any act or omission or operation of Tenant causing such
increase in the cost of insurance. If Landlord is the insuring party, and if the
insurance policies maintained hereunder cover other improvements in addition to
the Premises, Landlord shall deliver to Tenant a written statement seeing forth
the amount of any such cost increase and showing in reasonable detail the manner
in which it has been computed.
8.5 Waiver of Subrogation. Tenant and Landlord each waive any
and all rights of recovery against the other, or against the officers,
employees, agents and representatives of the other, for loss of or damage to
-4-
5
such waiving party or its property or the property of others under its control,
where such loss or damage is insured against under any insurance policy in force
at the time of such loss or damage provided that this waiver of subrogation
shall not in any manner absolve Tenant of its obligations to make repairs
pursuant to Article 7.2 or its obligation to indemnify Landlord pursuant to
Article 8.6. Tenant and Landlord shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.
8.6 Hold Harmless. Tenant shall indemnify, defend and hold
Landlord harmless from any and all claims arising from Tenant's use of the
Premises or from the conduct of its business or from any activity, work or
things which may be permitted or suffered by Tenant in or about the Premises and
shall further indemnify, defend and hold Landlord harmless from and against any
and all claims arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the provisions of this Lease
or arising from any negligence of Tenant or any of its agents, contractors,
employees or invitees and from any and all costs, attorney's fees, expenses and
liabilities incurred in the defense of any such claim or action or proceeding
brought thereon. Tenant hereby assumes all risk of damage to property or injury
to persons in or about the Premises from any cause, and Tenant hereby waives all
claims in respect thereof against Landlord, excepting where said damage arises
out of negligence of Landlord.
8.7 Exemption of Landlord from Liability. Except to the extent
of Landlord's negligence or breach of express provisions of this Lease, Tenant
hereby agrees that Landlord shall not be liable for injury to Tenant's business
or any loss of income therefrom or from damage to the goods, wares, merchandise
or other property of Tenant, or about the Premises, nor shall Landlord be liable
for injury to the person of Tenant, Tenant's employees, agents, contractors and
invitees, 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, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether the said
damage or injury results from conditions arising upon the Premises or upon other
portions of the building of which the Premises are a part, 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 inaccessible to Landlord or Tenant. Landlord
shall not be liable for any damages arising from any act or neglect of any other
tenant, if any, of the building in which the Premises are located.
9. Damage or Destruction. Partial damage is defined as not
greater than forty percent (40%) of the total rentable square feet improved
building area within the Tenant space.
9.1 Partial Damage Insured. Subject to the provisions of
Article 7.1, if the Premises are damaged and such damage was caused by a
casualty covered under an insurance policy required to be maintained pursuant to
Article 8.3, Landlord shall, at Landlord's expense, repair such damage as soon
as reasonably possible, and this Lease shall continue in full force and effect.
9.2 Damage - Uninsured. In the event the Premises may be
damaged or destroyed by a casualty which is not covered by fire and extended
coverage insurance carried by Landlord, the Landlord shall restore same,
provided that if the damage or destruction is to an extent greater than ten
percent (10%) of the then replacement cost of improvements on the Premises
(exclusive of Tenant's trade fixtures and equipment and exclusive of
foundations) then Landlord may elect not to restore and to terminate this Lease.
Landlord must give Tenant written notice of its election not to restore within
thirty (30) days from the date Landlord received notice of such damage and, if
not given, Landlord shall be deemed to have elected to restore and in such event
shall repair any damage as soon as reasonably possible. In the event Landlord
elects to give such notice of Landlord's intention to cancel and terminate this
Lease, Tenant shall have the right within ten (10) days after receipt of such
notice to give written notice to Landlord of Tenant's intention to repair such
damage at Tenant's expense, without reimbursement from Landlord, in which event
this Lease shall continue in full force and effect and Tenant shall proceed to
make such repairs as soon as reasonably possible. If Tenant does not give such
notice within such ten (10) day period, this Lease shall be canceled and
terminated as of the date of the occurrence of such damage.
-5-
6
9.3 Total Destruction. If at any time during the term hereof
the Premises are totally destroyed to an extent greater than forty percent (40%)
of rentable square feet from any cause whether or not covered by the insurance
required to be maintained by the insuring party pursuant to Article 8.3
(including total destruction required by any authorized public authority), this
Lease shall automatically terminate as of the date of such total destruction,
unless Landlord elects to repair per Paragraph 9.1.
9.4 Damage Near End of Term. If the Premises are partially
destroyed or damaged during the last twelve (12) months 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.
9.5 Abatement of Rent.
(a) If the Premises are partially destroyed or
damaged and Landlord or Tenant repairs or restores them pursuant to the
provisions of this Article 9, the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated in proportion
to the degree to which Tenant's reasonable use of the Premises is substantially
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.
(b) If Landlord shall be obligated to repair or
restore the Premises under the provisions of this Article 9 and shall not
commence such repair or restoration within ninety (90) days after such
obligations shall accrue, Tenant may, at Tenant's option, cancel and terminate
this Lease by giving Landlord written notice of Tenant's election to do so at
any time prior to the commencement of such repair or restoration. In such event
this Lease shall terminate as of the date of such notice. Any abatement in rent
shall be computed as provided in Article 9.5(a).
10. Real Property Taxes.
10.1 Payment of Taxes. Tenant shall pay all real property
taxes, as additional rent, upon fifteen (15) days advance written notice,
applicable to the Premises during the term of this Lease including reasonable
costs for attorneys or tax experts secured by Landlord in seeking reduction of
the taxes assessed on the Premises. If any such taxes shall cover any period of
the time prior to or after expiration of the term hereof, Tenant's share of such
taxes shall be equitably prorated to cover only the period of time within the
tax fiscal year during which this Lease shall be in effect.
10.2 Definition of "Real Property Taxes". As used herein, the
term "Real property tax" shall include any form of assessment, license fee, tax
on rent, levy, penalty, or tax (other than income taxes, inheritance or estate
taxes) imposed by any authority having the direct or indirect power to tax,
including city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement district thereof, as
against any legal or equitable interest of Landlord in the Premises or in the
real property of which the Premises are a part, as against Landlord's right to
rent or other income therefrom, or as against Landlord's business of leasing the
Premises, and Tenant shall pay any and all charges and fees which may be imposed
by the EPA or other similar governmental regulations or authorities.
10.3 Personal Property Taxes.
(a) Tenant shall pay prior to delinquency all taxes
assessed against and levied upon leasehold improvements, fixtures, furnishings,
equipment and all other personal property of Tenant contained in the Premises or
elsewhere. Tenant shall cause said leasehold improvements, trade fixtures,
furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Landlord.
-6-
7
(b) If any of Tenant's personal property shall be
assessed with Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written statement
setting forth the taxes applicable to Tenant's property.
11. Exterior Parking and Landscape Areas. During the term of this
Lease, Tenant shall manage and maintain the exterior parking lot areas,
sidewalks and landscape areas so that they are clean and free from accumulation
of debris, filth, rubbish and garbage. Landscape maintenance shall include
pruning, fertilization, maintenance of the irrigation system (if any) and/or
watering, weeding and rebarking of the landscaped areas.
12. Utilities. Tenant shall pay for all water, gas, heat, light,
power, telephone and other utilities and services supplied to the Premises,
together with any taxes thereon.
13. 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 in the
Premises without Landlord's prior written consent, which Landlord shall not
unreasonably withhold. Any attempted assignment, transfer mortgage, encumbrance,
or subletting without consent shall be void and shall constitute a breach of
this Lease. Any transfer of Tenant's interest in this Lease or in the Premises
from Tenant by merger, consolidation, or liquidation, or by any subsequent
change in the ownership of fifty percent (50%) or more of the capital stock of
Tenant or fifty percent (50%) or more partnership interest of Tenant shall be
deemed a prohibited assignment within the meaning of this Article 13. No option
to extend, if any, may be assigned by Tenant and no subtenant shall have any
right to exercise any such option.
13.2 No Release of Tenant. Regardless of Landlord's consent,
no subletting or assignment shall release Tenant of Tenant's obligation to pay
the rent and to perform all other obligations to be performed by Tenant
hereunder for the term of this Lease. The acceptance of rent by Landlord from
any other person 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.
13.3 Assignment Fee. In the event that Landlord shall consent
to a sublease or assignment under Article 13.1, Tenant shall pay to Landlord
reasonable fees not to exceed Five Hundred Dollars ($500) incurred in connection
with giving such consent.
All rent received by Tenant from its subtenants in excess of
the rent payable by Tenant to Landlord under this Lease shall be paid to
Landlord, or any sums to be paid by an assignee to Tenant in consideration of
the assignment of this Lease shall be paid to Landlord.
13.4 Assignment by Landlord. Landlord shall be permitted
freely to assign all of its rights and obligations hereunder, and upon such
assignment of its obligations, Landlord shall no longer be liable under this
Lease. Tenant hereby agrees to attorn to any assignee of Landlord's interest
hereunder, whether such assignment is voluntary or by operation of law.
13.5 Reasonable Consent. In aid to the Landlord's
determination whether to consent to any assignment, transfer or subletting but
without limiting reasons for which such consent may be withheld, Tenant, at
Landlord's request, shall submit in writing to Landlord: (1) the name and legal
composition of the proposed subtenant, assignee or transferees, and the nature
of the transaction contemplated and purposes of it; (2) the nature of the
proposed subtenant's business to be carried on in the Premises; (3) the terms
and provisions of the proposed sublease, assignment or transfer; and (4) current
financial statements of the subtenant or assignee and such other reasonable
financial information as Landlord may request concerning the proposed
transaction and the proposed subtenant, assignee or transferee without limiting
the authority of the Landlord to withhold reasonably its consent, Landlord may
-7-
8
require any assignee or subtenant to assume all of the obligations of the Tenant
with respect to this Lease, but such assumption shall not release the Tenant.
14. 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:
(a) The vacation or abandonment of the Premises
by Tenant for a period of thirty (30) days or more.
(b) The failure by Tenant to make any payment of
rent or any other payment required to be made by Tenant hereunder, as and when
due, where such failure shall continue for a period of ten (10) days.
(c) The failure by Tenant to observe or perform
any of the covenants, conditions, or provisions of this Lease to be observed or
performed by Tenant, other than described in Paragraph (b) above, where such
failure shall continue for a period of thirty (30) 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.
(d) (i) The making by Tenant of any general
assignment, or general assignment for the benefit of creditors; (ii) the filing
by or against 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 thirty (30) days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the Premises of
Tenant's interest in this Lease where such seizure is not discharged within
thirty (30) days.
14.2 Remedies in Default. In the event of any such default
or breach by Tenant, Landlord may at any time thereafter, with or without notice
or demand and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such default or breach:
(a) Terminate Tenant's right to possession of
the Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. In
such event Landlord shall be entitled to recover from tenant all damages
incurred by Landlord by reason of Tenant's default, including but not limited
to: (i) the cost of recovering possession of the Premises; and (ii) expenses of
reletting, including necessary renovation and alteration of the Premises; and
(iii) reasonable attorney's fees, and any real estate commission actually paid
applicable to the unexpired term of this Lease; and liv) the worth at the time
of award determined by the court having jurisdiction thereof, of the unpaid rent
that had been earned at the time of termination of this Lease; and (v) any other
amount, and court costs necessary to compensate Landlord for all detriment
proximately caused by Tenant's default. In the event Tenant shall have abandoned
the Premises, Landlord shall have the option of (1) retaking possession of the
Premises, taking possession of all personal property remaining in the Premises
and recovering from Tenant the amount specified in this Article 14.2(a) and
14.2(d), or (2) proceeding under Article 14.2(b). As used in this Paragraph, the
term "the worth at the time of award" is to be computed by discounting the total
rent payable by the amount of the discount rate of the Federal Reserve Bank of
San Francisco at the time of the award, plus one percent (1%).
-8-
9
(b) Maintain Tenant's right to possession, in
which case this Lease shall continue in effect whether or not Tenant shall have
abandoned the Premises. In such event, Landlord shall be entitled to all of
Landlord's rights and remedies under this Lease including the right to recover
the rent as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state in which
the Premises are located.
(d) Any rent or other charge that is not paid
when due shall bear interest from the date due until paid at the rate of sixteen
(16%) per annum; provided, however, that in no event shall such rate to be
charged Tenant exceed the rate otherwise permitted by law.
14.3 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 later than thirty (30) days after written
notice by Tenant to Landlord and to the holder of any first mortgage or deed of
trust covering the Premises, where name and address shall have theretofore 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.
14.4 Late Charges. Tenant hereby acknowledges that late
payment by Tenant to Landlord of rent and other sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges, and late charges which may be
imposed on Landlord by the term of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of rent or any other sums due from
Tenant shall not be received by Landlord or Landlord's designee within ten (10)
days after said amount is due then Tenant shall pay to Landlord a late charge of
ten percent (10%) of such overdue amount, per each monthly period, but not any
interest thereon. In no event shall any late charge be required in violation of
any law. Further, the parties agree that a Twenty-Five Dollar ($25.00) charge
shall be paid by Tenant to Landlord for any returned check.
The parties hereby agree that such late charge represents a
fair and reasonable estimate of the cost Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue amount, nor
prevent Landlord from exercising any of the other rights and remedies granted
hereunder.
14.5 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 by reason of Tenant's default, pays any sum or does any act that requires
the payment of any sum, the sum paid by Landlord at the time the sum is paid
shall be due from Tenant to Landlord, and if paid at a later date shall bear
interest at the rate of sixteen percent (16%) per annum from the date the sum is
paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with
interest shall be deemed additional rent hereunder.
15. Condemnation. If the Premises or any portion thereof 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 herein referred to as "condemnation"),
this Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession; whichever occurs first. If more than
twenty-five percent (25%) of the floor area of any building on the Premises, or
more than twenty-five percent (25%) of the land area of the Premises not covered
with buildings, 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.
-9-
10
If this Lease is not terminated by either Landlord or Tenant, then
it shall remain in full force and effect as to the portion of the Premises
remaining, provided the rental shall be reduced in proportion to the floor area
of the buildings taken within the Premises as bears to the total floor area of
all buildings located on the Premises. In the event this Lease is not so
terminated, then Landlord agrees, at Landlord's sole costs, as soon as
reasonably possible, to restore the Premises to a complete unit of like quality
and character as existed prior to the condemnation. 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
fees or as severance damages; provided, however, that Tenant shall be entitled
to any award for loss of or damage to Tenant's trade fixtures and removable
personal property.
16. General Provisions.
16.1 Estoppel Certificate.
(a) Tenant shall, at any time, upon not less
than ten (10) days prior written notice from Landlord, execute, acknowledge and
deliver to Landlord 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 Tenant's knowledge, any uncured defaults on the part of Landlord hereunder,
or specifying such defaults, if any, which are claimed. Any such statement may
be conclusively relied upon by any prospective purchaser or encumbrances of the
Premises.
(b) 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 not uncured defaults in Landlord's performance, and
(iii) not more than one (1) month's rent has been paid in advance.
(c) If Landlord desires to finance or refinance
the Premises, or any part thereof, Tenant hereby agrees to deliver (no more than
2x per year) 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. Tenant shall execute any estoppel
certificate, subordination agreement, and/or attornment agreement submitted to
Tenant by Landlord for purposes of said financing; provided however, that Tenant
shall be allowed the quiet use and enjoyment of the Premises as long as Tenant
is not in default under the terms of this Lease.
16.2 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, subject to aforesaid, be binding upon Landlord's successors and assigns,
only during their respective periods of ownership.
16.3 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.
16.4 Interest on Past Due Obligations. Except as expressly
herein provided, any amount due to Landlord not paid when due shall bear
interest at sixteen percent (16%) per annum from the due date. Payment of such
interest shall not excuse or cure any default by Tenant under this Lease.
-10-
11
16.5 Time of Essence. Time is of the essence.
16.6 Captions. Article and Paragraph captions are not a
part hereof.
16.7 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 modification.
16.8 Waivers. 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.
16.9 Recording. Tenant shall not record this Lease
without Landlord's prior written consent, and such recordation shall, at the
option of Landlord, constitute a noncurable default of Tenant hereunder. Either
party shall, upon request of the other, execute, acknowledge and deliver to the
other a "short form" memorandum of this Lease for recording purposes.
16.10 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 in the amount of 125% of the last monthly rental plus
all other charges payable hereunder, and upon the terms hereof applicable to
month to month tenancy.
16.11 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.
16.12 Covenants and Conditions. Each provision of this
Lease performable by Tenant shall be deemed both a covenant and a condition.
16.13 Binding Effect; Choice of Law; Proration. Subject to
any provisions hereof restricting assignment or subletting by Tenant and subject
to the provision of Article 13.2, this Lease shall bind the parties, their
representatives, successors and assigns. This Lease shall be governed by the
laws of the state where the Premises are located. All prorations shall be on the
basis of a thirty (30) day month.
16.14 Subordination.
(a) This Lease, at Landlord's option, shall be
subordinate to any ground lease, mortgage, deed of trust, or any 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. Notwithstanding such subordination, Tenant's right to quiet possession
of the Premises shall not be disturbed if Tenant is not in default and so long
as Tenant shall pay the rent and observe and perform all of the provisions of
this Lease, unless this Lease is otherwise terminated pursuant to its terms. If
any mortgagee, trustee 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, whether this Lease is dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease, or the date of
recording thereof.
-11-
12
(b) Tenant agrees to execute and deliver any
documents reasonably 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.
(c) Tenant shall have the right to request a
non-disturbance agreement from the existing lender. However, Landlord will not
warrant that lender will agree to such request.
16.15 Attorneys' Fees. If either party named herein 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 attorney's fees to be paid by the losing party as fixed by the court.
16.16 Landlord's Access. Landlord and Landlord's agents
shall have the right to enter the Premises at reasonable times upon 24 hours
notice or in the case of emergencies access shall be immediate for the purpose
of inspecting the same, showing the same to prospective tenants, purchasers or
lenders, and making such alterations or improvements as may be necessary to
maintain the structural integrity of the building, repairs, 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 any ordinary
"For Sale" or "For Lease" signs, and Landlord may at any time during the last
one hundred twenty (120) days of the term hereof place on or about the Premises
any ordinary signs all without rebate or rent or liability to Tenant.
16.17 Signs. Tenant shall not place any sign upon the
Premises without Landlord's prior written consent. All signs installed by Tenant
shall be removed upon termination of this Lease with the sign location restored
to its former state.
16.18 Merger. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and
shall, at the option of Landlord, terminate all or any existing subtenancies, or
may, at the option of Landlord, operate as an assignment to Landlord of any or
all of such subtenancies.
16.19 Corporate Authority. If Tenant is a corporation,
each individual executing this Lease on behalf of said corporation represents
and warrants that he is duly authorized to execute and deliver this Lease on
behalf of said corporation in accordance with a duly adopted resolution of the
Board of Directors of said corporation or in accordance with the bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
16.20 Landlord's Liability. If Landlord is a joint
venture or limited partnership, the liability of the partners of Landlord
pursuant to this Lease shall be limited to assets of the partnership, and
Tenant, its successors and assigns, hereby waive all rights to proceed against
any of the partners, or the officers, shareholders, or directors of any
corporate partner of Landlord, except to the extent of their interest in the
partnership. As used in this Article, the term "Landlord" 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 its interest in a ground lease of the Premises,
and 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, and any funds in the hands of
Landlord or the obligations thereafter to be performed; provided that nay 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, subject as aforesaid,
be binding on Landlord's successors and assigns only during the respective
period of ownership.
16.21 Financing. Tenant shall not execute any document
purporting to affect the Premises or any other property of which the Premises
are a part, including, without limitation; any financing statement, without
prior written consent of Landlord, which may be withheld or conditioned in
Landlord's sole discretion.
-12-
13
16.22 Inability to Perform. This Lease and the obligations
of the Tenant hereunder shall not be effected or impaired because the Landlord
is unable to fulfill any of its obligations hereunder or is delayed in doing so,
if such inability or delay is caused by reason of strike, labor troubles, force
majeure, weather and acts of God, or any other cause beyond the reasonable
control of the Landlord, and Landlord shall not be liable for any such delay.
17. Completion Bond. At any time, Tenant either desires to or is
required to make any repairs, alterations, additions, improvements or utility
installations thereon, pursuant to Articles 7.5 or 9.2 herein or otherwise which
exceed $5,000. Landlord may at its sole option, require Tenant, at Tenant's sole
cost and expense, to obtain and provide to Landlord a lien and completion bond
in an amount equal to one and one-half (1-1/2) times the estimated cost of such
improvements, to insure Landlord against any liability for mechanic's and
materialmen's liens and to insure completion of the work.
18. 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 United States mail, postage prepaid, addressed to the
address set forth herein below:
To Landlord: S.E. 30th Company
c/o Kidder, Xxxxxxx & Xxxxxx, Inc.
Attn: Xxxxx X. Xxxxxx
00000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
To Tenant: Optiva Corporation
00000 X.X. 00xx Xxxxxx
Xxxxxxxx, XX 00000
Notices will be deemed given when personally delivered, or three (3)
days after mailing as set forth in this Section 18.
19. Hazardous and Toxic Waste Materials. Tenant shall be
responsible for all expenses, damages, liabilities, including reasonable
attorneys' fees, occurring as a result of Tenant's use or release of any
hazardous and toxic waste materials as they may affect the leased premises.
"Release" means any spill, visible leak, pumping, pouring, explosion, emission,
discharge, injection, escape, dumping, disposing or other entering into the
environment of any substance, chemical, material, pollutant or contaminant at,
in, by, from or related to the leased premises. Tenant's obligations in this
regard shall survive and extend beyond the termination date of this lease
Whereby the statute of limitation for any indemnification action shall not begin
to run until Landlord has sustained damage. Landlord is entitled to indemnity
under the terms of this Agreement.
20. Special Articles. The following numbered articles are made a
part hereof, 21,22 & 23 and appear below as well as the attached Exhibit(s) A &
B.
21. Early Termination Option. Tenant shall have the opportunity to
terminate this lease any time after the 36th month by giving Landlord nine (9)
months advance written notice and upon such notice paying the Landlord a Lease
Termination Fee equal to the unamortized Lease Commission through the date
Tenant vacates the Premises.
22. Early Occupancy. Landlord understands that Tenant is interested
in occupying the Premises as soon as possible. The existing tenant's, Software
Productions, lease runs through October 31, 1995. In the event that Software
Productions vacates the Premises earlier, Landlord will provide Tenant with
thirty (30) days notice of the date on which Tenant may occupy the Premises. All
provisions of the lease, including base rent, shall apply during this early
occupancy period.
-13-
14
23. Communication Cabling. Landlord hereby grants its approval to
allow Tenant to install cabling connected to Tenant's existing facility. The
location and installation shall be approved by the Landlord prior to
installation.
The parties hereto have executed this Lease at the place and on the
dates specified immediately adjacent to their respective signatures.
Dated this _______ day of ___________________, 19__,
at_________________________________________________.
"Landlord": S.E. 30th Company
a Joint Venture
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, President
Puget Pacific, Inc., Venturer
Dated this _______ day of ___________________, 19__,
at_________________________________________________.
"Tenant": OPTIVA CORPORATION
a Washington Corporation
By /s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
Title: President & CEO
-14-
15
CORPORATE
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 7th day of August A.D. 1995, before me personally appeared
Xxxxx Xxxxxxxx to me known to be the President/CEO of Optiva Corp. the
corporation that executed the within and foregoing instrument and acknowledged
the same 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
they were authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
/s/ Xxxxxx X. XxXxxxxxxxx
-----------------------------------------
Notary Public in and for the State of
Washington, residing at Kirkland
CORPORATE
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 8th day of August A.D. 1995, before me personally appeared
Xxxxxx X. Xxxxxxx to me known to be the President and ____________ to me known
to be the _______________ of Puget Pacific, Inc. the corporation that executed
the within and foregoing instrument, and acknowledged the same 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 they were authorized to
execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
/s/ Xxxxx X. Xxxxx
----------------------------------------
Notary Public in and for the State of
Washington, residing at Vashon.
16
INDIVIDUAL
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
This is to certify that on this ______________ day of _________________
A.D. 19___, before me the undersigned, a Notary Public in and for the State of
Washington, duly commissioned and qualified, personally appeared
________________________________________________________________________________
________________________________________________________________________________
to me known to be the individual described in and who executed the within and
foregoing instrument, and acknowledged to me that ___________________ signed and
sealed the same as ___________________ free and voluntary act and deed, for the
purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
_________________________________________
Notary Public in and for the State of
Washington, residing at
_______________________________________.
INDIVIDUAL
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
This is to certify that on this ______________ day of _________________
A.D. 19___, before me the undersigned, a Notary Public in and for the State of
________________________, duly commissioned and qualified, personally appeared
________________________________________________________________________________
________________________________________________________________________________
to me known to be the individual described in and who executed the within and
foregoing instrument, and acknowledged to me that ___________________ signed and
sealed the same as ___________________ free and voluntary act and deed, for the
uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
_________________________________________
Notary Public in and for the State of
________________________________________,
residing at_____________________________.
-2-
