EXHIBIT 10.12
[_]===========[_]
OFFICE LEASE AGREEMENT
BY AND BETWEEN
XXXXX CORPORATION,
A WASHINGTON CORPORATION
LANDLORD
AND
EXODUS COMMUNICATIONS, INC.
A CALIFORNIA CORPORATION
TENANT
TABLE OF CONTENTS
Page
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1. FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS; EXHIBITS................... 1
1.1 Broker.......................................................... 1
1.2 Building........................................................ 1
1.3 Premises........................................................ 1
1.4 Tenant's Share.................................................. 1
1.5 Lease Year...................................................... 1
1.6 Commencement Date............................................... 1
1.7 Expiration Date................................................. 1
1.8 Term............................................................ 1
1.9 Base Rent....................................................... 1
1.10 Early Occupancy................................................. 2
1.11 Additional Rent................................................. 2
1.12 Base Year....................................................... 2
1.13 Security Deposit................................................ 2
1.14 Parking......................................................... 2
1.15 Landlord's Payment Address...................................... 2
1.16 Notice Addresses................................................ 2
1.17 Permitted Uses.................................................. 2
1.18 Landlord's Work................................................. 2
1.19 Tenant's Work................................................... 2
1.20 Guarantor....................................................... 3
1.21 Exhibits........................................................ 3
2. PREMISES.............................................................. 3
2.1 Acceptance of Premises.......................................... 3
2.2 Tenant Allowance................................................ 3
2.3 Tenant's Right of First Refusal................................. 3
3. LEASE TERM............................................................ 4
3.1 Duration of Lease Term.......................................... 4
3.2 Extension Option................................................ 4
3.3 Base Rent During Option Term.................................... 4
3.4 Tenant Termination Right........................................ 5
3.5 Confirmation of Commencement Date............................... 5
3.6 Surrender of Premises........................................... 5
3.7 Holding Over With Consent....................................... 5
3.8 Holding Over Without Consent.................................... 5
4. RENT.................................................................. 6
4.1 Payment......................................................... 6
4.2 Interest on Late Payments; Late Charge.......................... 6
4.3 Address for Payments............................................ 6
5. SECURITY DEPOSIT...................................................... 6
6. USES; COMPLIANCE WITH LAWS............................................ 6
6.1 Permitted Uses.................................................. 6
6.2 Duties and Prohibited Conduct................................... 7
6.3 Environmental, Health And Safety Laws........................... 7
7. SERVICES AND UTILITIES; REPAIRS AND MAINTENANCE....................... 8
7.1 Services and Utilities; Landlord's Obligations.................. 8
7.1.1 Additional Services Or Utilities......................... 9
7.2 Services and Utilities; Tenant's Obligations.................... 9
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7.3 Interruption.................................................... 9
7.4 Landlord's Repair and Maintenance Obligations................... 9
7.5 Tenant's Repair and Maintenance Obligations..................... 10
8. ADDITIONAL RENT: OPERATING COSTS AND REAL ESTATE TAXES................ 10
8.1 Definitions..................................................... 10
8.1.1 Taxes.................................................... 10
8.1.2 Operating Costs.......................................... 10
8.1.3 Tenant's Share........................................... 11
8.2 Payment of Additional Rent for Estimated Increases in Operating
Costs and Taxes................................................. 11
8.3 Actual Operating Costs and Taxes................................ 11
8.4 Determinations.................................................. 12
8.5 Tenant's Personal Property Taxes................................ 12
8.6 Tenant's Utility and Janitorial Charges......................... 12
9. IMPROVEMENTS AND ALTERATIONS.......................................... 13
10. ACCESS................................................................ 13
11. DAMAGE OR DESTRUCTION................................................. 13
11.1 Damage and Repair............................................... 13
11.2 Destruction During Last Year of Term............................ 14
11.3 Business Interruption........................................... 14
11.4 Tenant Improvements............................................. 14
11.5 Express Agreement............................................... 14
12. WAIVER OF SUBROGATION................................................. 14
13. INDEMNIFICATION....................................................... 14
14. INSURANCE............................................................. 15
14.1 Liability Insurance............................................. 15
14.2 Property Insurance.............................................. 15
14.3 Insurance Policy Requirements................................... 16
15. ASSIGNMENT AND SUBLETTING............................................. 16
15.1 Assignment or Sublease.......................................... 16
15.2 Documentation and Expenses...................................... 16
15.3 Transferee Obligations.......................................... 17
16. SIGNS................................................................. 17
17. LIENS................................................................. 17
18. BANKRUPTCY............................................................ 17
18.1 Assumption of Lease............................................. 17
18.1.1 Definition of Adequate Assurances....................... 18
18.2 Assignment of Lease............................................. 18
18.3 Adequate Protection............................................. 18
19. DEFAULT............................................................... 18
19.1 Cumulative Remedies............................................. 18
19.2 Tenant's Default; Right to Cure................................. 18
19.3 Landlord's Rights And Remedies.................................. 19
19.3.1 Termination of Lease.................................... 19
19.3.2 Re-entry of the Premises................................ 19
19.3.3 Termination After Reentry............................... 19
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19.4 Landlord's Damages.............................................. 19
19.4.1 Delinquent Rent......................................... 19
19.4.2 Rent After Termination Until Judgment................... 19
19.4.3 Rent After Judgment..................................... 19
19.4.4 Leasing Concessions..................................... 19
19.4.5 Other Compensation...................................... 20
19.4.6 Additional or Alternative Damages....................... 20
19.5 Fixtures........................................................ 20
19.6 No Waiver....................................................... 20
19.7 Waiver of Notice................................................ 20
19.8 Waiver of Redemption Rights..................................... 20
19.9 Default by Landlord............................................. 21
20. SUBORDINATION AND ATTORNMENT.......................................... 21
21. REMOVAL OF PROPERTY................................................... 21
22. CONDEMNATION.......................................................... 21
22.1 Entire Taking................................................... 22
22.2 Constructive Taking of Entire Premises.......................... 22
22.3 Partial Taking.................................................. 22
22.4 Awards and Damages.............................................. 22
23. NOTICES............................................................... 22
24. COSTS AND ATTORNEYS' FEES............................................. 22
25. LANDLORD'S LIABILITY.................................................. 22
26. LANDLORD'S CONSENT.................................................... 23
27. ESTOPPEL CERTIFICATES................................................. 23
28. RIGHT TO PERFORM...................................................... 23
29. PARKING............................................................... 23
30. AUTHORITY............................................................. 23
31. GENERAL............................................................... 24
31.1 Headings........................................................ 24
31.2 Heirs and Assigns............................................... 24
31.3 No Brokers...................................................... 24
31.4 Entire Agreement................................................ 24
31.5 Severability.................................................... 24
31.6 Force Majeure................................................... 24
31.7 Right to Change Public Spaces................................... 24
31.8 Governing Law................................................... 24
31.9 Building Directory.............................................. 24
31.10 Building Name................................................... 24
31.11 Quiet Enjoyment................................................. 24
31.12 Survival........................................................ 25
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OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT ("Lease") is made this 24 day of April, 1997
("Effective Date"), between Xxxxx Corporation, a Washington corporation, as
Landlord, ("Landlord"), and Exodus Communications, Inc., a California
corporation, as Tenant, ("Tenant"). The parties agree as follows:
1. FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS; EXHIBITS. The capitalized
terms set forth below in this Section 1 shall have the meanings provided in this
Section 1, unless otherwise specifically modified by provisions of this Lease.
1.1 BROKER. "Broker" shall mean Xxxxxxx and Xxxxxxxx Inc. A
commission shall be paid by Landlord to Broker pursuant to a separate agreement
between Landlord and Broker.
1.2 BUILDING. "Building" shall mean the structure commonly known as
Riverfront Technical Park. The Building is situated on a portion of the real
property legally described in Exhibit A and has a postal address of 0000 X.
000xx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000. The Building together with the real
property described above shall constitute the "Property."
1.3 PREMISES. The "Premises" shall mean the space consisting of
approximately 12,000 net rentable square feet located on the 1st floor of the
Building and depicted on the floor plan attached to this Lease as Exhibit B,
subject to recalculation in accordance with Section 2. The Premises shall
include the tenant improvements, if any, described in Exhibit C.
1.4 TENANT'S SHARE. "Tenant's Share" shall mean "Tenant's Share of
the Property". "Tenant's Share of the Property" shall mean six and 99/100
percent (6.99%), calculated by dividing the net rentable area of the Premises by
the net rentable area of the Building (approximately 171,718 net rentable square
feet. The Building load factor is seven and 90/100 percent (7.90%). In the event
the rentable area of the Premises or Building is altered or recalculated in
accordance with Section 2, Landlord shall adjust Tenant's Share of the Building
to properly reflect such event. Landlord's adjustment of such Tenant's Share
shall be final.
1.5 LEASE YEAR. "Lease Year" shall mean the twelve-month period
commencing January 1 and ending December 31.
1.6 COMMENCEMENT DATE. Subject to Section 3.1, "Commencement Date"
shall mean July 1, 1997.
1.7 EXPIRATION DATE. "Expiration Date" shall mean the date that is
ten (10) years after the Commencement Date, unless sooner terminated or extended
in accordance with this Lease.
1.8 TERM. "Term" shall mean a period of Ten (10) years, commencing on
the Commencement Date and terminating on the Expiration Date, unless sooner
terminated or extended in accordance with this Lease.
1.9 BASE RENT. "Base Rent" from the Commencement Date through the
end of the 24th month shall mean the net rentable square feet multiplied by
$12.50 per square foot per year, based on 12,000 rentable square feet of
Premises, (Twelve thousand five hundred and 00/100 Dollars ($12,500.00) per
month). "Base Rent" from the start of month 25 through the end of month 60 shall
mean the net rentable square feet multiplied by $13.50 per square foot per year,
based on 12,000 rentable square feet of Premises (Thirteen thousand five hundred
and 00/100 Dollars ($13,500.00) per month). "Base Rent" from the start of month
61 through the Expiration Date shall mean the net rentable square feet
multiplied by $14.00 per square foot per
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year, based on 12,000 rentable square feet of Premises ( Fourteen thousand and
00/100 Dollars ($14,000.00) per month). Prior to the Commencement Date, the net
rentable square feet shall be recalculated in accordance with Section 2. Base
Rent shall be payable as provided in Section 4.
1.10 EARLY OCCUPANCY. The tenant will be allowed to occupy any square
feet they feel is ready for occupancy before the commencement date. Early
Occupancy shall mean any use of the space not directly related to the
installation of equipment or constructing the premises. "Base Rent" will be
calculated by multiplying the actual occupied square feet by $12.50 per rentable
square foot. Tenant will be responsible for all "Additional Rent" as described
in Section 8 on the portion of the space that they occupy early.
1.11 ADDITIONAL RENT. "Additional Rent" shall mean the amounts
described in Section 8 as Real Property Taxes, Personal Property Taxes,
Operating Costs, and all other amounts except Base Rent which are payable by
Tenant under this Lease.
1.12 BASE YEAR. The Base Year shall mean 1997.
1.13 SECURITY DEPOSIT AND MINIMUM NET WORTH REQUIREMENT. "Security
Deposit" shall mean Thirteen thousand and 00/100 Dollars ($13,000.00). The
Security Deposit shall be deposited with Landlord in accordance with Section 5.
1.14 PARKING. Subject to Section 29.
1.15 LANDLORD'S PAYMENT ADDRESS. "Landlord's Payment Address" shall
mean: Xxxxx Corporation, Dept. 599, X.X. Xxx 00000, Xxxxxxx, Xxxxxxxxxx
00000-0000.
1.16 NOTICE ADDRESSES.
If to Landlord: Xxxxx Corporation
000 Xxxxxxx Xxxxxx X., Xxxxx 000
Xxxxxxx, XX 00000
Attn: Executive Vice President
with a copy to: Xxxxx Corporation
000 Xxxxxxx Xxxxxx X., Xxxxx 000
Xxxxxxx, XX 00000
Attn.: Facilities Manager
If to Tenant: Exodus Communications, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Regency Plaza - Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxx
with a copy to: Mr. Xxxx Gregorus, Esq.
Fenwick & West, LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
1.17 PERMITTED USES. "Permitted Uses" shall mean Tenant's use of the
Premises for a computer operations center, and general office purposes, subject
to the terms and conditions of this Lease.
1.18 LANDLORD'S WORK. "Landlord's Work" shall mean the improvements
to be made by Landlord in accordance with Exhibit C.
1.19 TENANT'S WORK. "Tenant's Work" shall mean the improvements, if
any,
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to be made by Tenant in accordance with Exhibit C.
1.20 GUARANTOR. Intentionally omitted.
1.21 EXHIBITS. The following exhibits or riders are attached to this
Lease and are incorporated into this Lease by this reference:
(a) Exhibit A - Legal Description
(b) Exhibit B - Floor Plan of Premises
(c) Exhibit C - Tenant Improvements
(d) Exhibit C-1 - Tenant's Removable Property
(e) Exhibit D - Rules And Regulations
(f) Exhibit E - Parking Area
(g) Exhibit F - General Conditions for Construction
2. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the Premises described in Section 1.3 together with the tenant
improvements described on Exhibit C ("Tenant Improvements") and together with
rights of ingress and egress over public and common areas in the Building and on
the land legally described on Exhibit A ("Land"). Tenant's lease of the Premises
shall be subject to all of the terms and conditions of this Lease. The Premises,
Building, Land, and the improvements on the Land other than the Building, are
sometimes collectively referred to in this Lease as the "Property".
Landlord shall complete Landlord's Work in accordance with Exhibit C.
Landlord represents that the Building Improvements, upon substantial completion,
shall materially comply with all applicable codes, regulations, ordinances and
laws including without limitation the American With Disabilities Act.
Notwithstanding anything to the contrary in this Lease, Tenant shall provide
Landlord and Landlord's contractor with such access to the Premises as may be
required by Landlord and Landlord's contractor to efficiently perform Landlord's
Work. Tenant acknowledges and agrees that Landlord shall have no obligation to
improve the Premises except as may be expressly set forth on Exhibit C.
On or before the Commencement Date, Landlord shall recalculate the "net
rentable square feet" of the Premises. The recalculated net rentable square feet
shall be certified by Tenant's architect prior to the Commencement Date. Net
rentable square feet shall be calculated in accordance with BOMA standards,
utilizing a load factor of Seven and 90/100 percent (7.9%) for the Building
which may be changed upon the alteration of tenant spaces or building common
areas before the confirmation date letter to be sent according to section 3.5.
2.1 ACCEPTANCE OF PREMISES. Landlord and Tenant hereby agree that
Landlord's Work as set forth in Exhibit C shall be constructed by Landlord's
contractor, Xxxxx Construction Inc. Tenant's acceptance of the Premises shall be
"as-is" as of the date the Tenant commences construction on the Premises.
Within five (5) days ("Inspection Period") after the date Landlord informs
Tenant of such substantial completion of Landlord's Work, Tenant shall make such
inspection of the Premises as Tenant deems appropriate. Except as otherwise
specified by Tenant in writing to Landlord within the Inspection Period, Tenant
shall be deemed to have accepted the Landlord's Work in its condition and except
for latent defects, as of such date of substantial completion. If, as a result
of such inspection, Tenant discovers items of Landlord's Work of a nature
commonly found on a "punch list" (as such term is commonly used in the
construction industry), which it reasonably believes are not completed in
accordance with Exhibit C, Tenant shall notify Landlord of such items prior to
the expiration of the Inspection Period. Landlord shall promptly complete repair
of all punch list items identified in Tenant's notice which it reasonably
believes require repair. The existence of such punch list items shall not
postpone the Commencement Date or the obligation of Tenant to pay Base Rent or
Additional Rent.
2.2 TENANT ALLOWANCE. Intentionally Deleted.
2.3 TENANT'S RIGHT OF FIRST REFUSAL. Landlord grants Tenant the
right of first
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refusal during the Term of this Lease to lease the space consisting of
approximately 15,006 net rentable square feet and depicted on Exhibit B as the
First Refusal Space ("First Refusal Space") that Landlord proposes to lease,
subject to the terms and conditions of this Section 2.3. If Tenant is not then
in default under this Lease beyond applicable notice and cure periods and if
Landlord receives a bona fide offer to lease all or part of the First Refusal
Space (the "Offer"), then Landlord shall notify Tenant in writing ("Landlord's
Offer Notice") of the lease term, base rent and additional rent and all other
provisions of the Offer. Within ten (10) days of Tenant's receipt of Landlord's
Offer Notice, Tenant shall notify Landlord in writing ("Tenant's Offer Notice")
of Tenant's election to lease that portion of the First Refusal Space from
Landlord on the lease term, base rent and additional rent provisions of the
Offer. All of the other terms and provisions of such lease shall be the same as
those contained in this Lease (but not including the Tenant Improvement
Allowance described in Section 2.2), to the extent applicable. If Tenant fails
to give Tenant's Offer Notice as provided in this Section 2.3, then Tenant shall
be deemed to have waived its right of first refusal with respect to the First
Refusal Space offered. Time is of the essence with respect to this paragraph. If
Tenant elects not to lease the First Refusal Space, then Landlord shall have the
right to lease the First Refusal Space described in the Offer on any combination
of base rent and additional rent that in the aggregate is equal to or greater
than the base rent and additional rent contemplated by the Offer. In the event
Tenant assigns or subleases all or more than one-half (1/2) of the Premises,
Tenant's right of first refusal under this Section shall automatically terminate
as to such assignee or subtenant.
2.4 RELOCATION OR TERMINATION. Intentionally Deleted.
3. LEASE TERM.
3.1 DURATION OF LEASE TERM. Tenant's lease of the Premises shall
commence on the Commencement Date and terminate on the Expiration Date or such
earlier or later date as may be provided for under this Lease. Notwithstanding
anything to the contrary in Section 1.6, if Landlord is unable to deliver
possession of the Premises to Tenant with Landlord's Work constructed by
Landlord's contractor substantially completed in accordance with Exhibit C on
the date specified in Section 1.6 and such delay (to the extent of such delay)
is due to no fault on the part of Tenant, then the Commencement Date shall be
the earlier of the date on which Tenant first occupies the Premises or the date
that is Fifteen (15) days from the date of Landlord's written notice to Tenant
of substantial completion of Landlord's Work and Tenant Improvements constructed
by Landlord's contractor provided for in Section 2, above.
3.2 EXTENSION OPTION. Provided that Tenant is in compliance with all
the terms and conditions of this Lease or not in default beyond any applicable
cure period both at the time of Tenant's exercise of this option and at the time
the Option Term is scheduled to commence, Tenant shall have the option("Option")
to extend the term of this Lease for two (2) additional periods of five (5)
years (the "Option Term") on the same terms and conditions of this Lease as are
provided for in the initial Term, except as provided below in this Section 3.2
or in Section 3.3 and without any free rent periods or Tenant Improvement
allowances. The Option Term shall commence upon the date of expiration of the
initial Term, or first option term, of this Lease. To exercise its Option,
Tenant must give written notice to Landlord that Tenant is exercising its Option
at least six (6) months before the date of expiration of the initial Term, or
first option term. If, in Landlord's reasonable discretion, Landlord determines
that the creditworthiness of Tenant is materially less than the creditworthiness
of Tenant as of the Lease's execution date, Landlord may nullify Tenant's
exercise of its Option by written notice to Tenant. Tenant acknowledges and
agrees that notwithstanding anything to the contrary in this Lease, the right to
exercise the Option shall not extend to any assignee or subtenant of Tenant, or
to any space assigned or subleased by Tenant, and any attempt to exercise the
Option by any such assignee or subtenant, or by Tenant in connection with such
assigned or subleased space, shall be deemed null and void. Tenant further
acknowledges and agrees that the amount of the Security Deposit payable by
Tenant for the Option Term shall be increased to an amount equal to the first
monthly installment of Fixed Rent payable by Tenant during the Option Term.
3.3 BASE RENT DURING OPTION TERM. In the event that Tenant elects
to exercise its Option to extend the Term of this Lease in accordance with the
terms of Section 3.2, the Base Rent for the Option Term shall be equal to the
then-market rate for similarly improved
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space in comparable buildings for comparable use in the South Seattle/Tukwila
region; provided,however, that in no event shall the Base Rent during the Option
Term be less than the Base Rent for the last year of the initial Lease Term. The
adjusted Base Rent shall commence on and be payable on the first day of the
Option Term and shall continue thereafter throughout the Option Term.
3.4 TENANT TERMINATION RIGHT. Subject to the terms and conditions
of this Section 3.4, Tenant shall have a right to terminate this Lease at the
end of the 60th month of this Lease. Tenant's termination right under this
Section 3.4 may be exercised only by Tenant providing Landlord with written
notice, one hundred eighty (180) days prior to the end of the 60th month, of
this lease, of its intent to exercise its termination right and payment to
Landlord of a termination fee in the amount equal to the unamortized (at 10%)
costs of the Commission and Landlord's costs to provide the demising walls and
to replace or bring in the 1,200 amps of power to be provided in accordance with
Exhibit C, plus 5 months base rent. Landlord will provide Tenant such costs upon
completion of Landlord's Work in accordance with Exhibit C. Tenant's right to
terminate the Lease under this Section 3.4 shall be wholly conditioned upon
Tenant not being in default, after expiration of any applicable notice or cure
periods, under this Lease either at the time of Tenant's exercise of its
termination right or on the date of Tenant's termination of the Lease under this
Section 3.4. In the event Tenant does not exercise its termination right as set
forth in this Section 3.4, then Tenant's termination right shall expire
automatically and have no further force or effect without necessity of notice or
other action by Landlord. Any purported exercise by Tenant of its termination
right other than strictly in accordance with this Section 3.4 shall be void and
have no force or effect.
3.5 CONFIRMATION OF COMMENCEMENT DATE. Landlord shall confirm the
Commencement Date to Tenant in writing within a reasonable time after delivery
of the Premises in accordance with this Lease.
3.6 SURRENDER OF PREMISES. Subject to Section 12, Tenant shall
promptly and peacefully surrender the Premises to Landlord upon the termination
of the Lease Term in as good a condition as when received by Tenant from
Landlord and/or as thereafter improved, if applicable, normal wear and tear
excepted. Unless Landlord expressly provides otherwise in writing to Tenant,
upon the expiration or termination of this Lease, all improvements and additions
to the Premises except those items set forth on Exhibit C-1 shall be deemed
property of Landlord and shall not be removed by Tenant from the Premises.
Tenant shall be solely responsible for, and shall repair, all damage to the
Property arising out of its surrender of the Premises. In addition to all other
requirements under this Lease, Tenant shall remove any Hazardous Substances, as
such term is defined in Section 6.3, on the Premises which were placed on the
Premises by Tenant, its employees, agents, contractors and/or invitees, prior to
its surrender and vacation of the Premises.
3.7 HOLDING OVER WITH CONSENT. If Tenant remains in possession of
the Premises after termination or expiration of the Lease Term with Landlord's
written permission, such tenancy shall be deemed a month-to-month tenancy which
may be terminated by either party upon thirty (30) days notice. During such
tenancy, Tenant shall be bound by all of the terms, covenants and conditions in
this Lease so far as applicable, except that the Base Rent shall be increased to
the greater of (i) the then-quoted rates for similar space in the Building or
(ii) one hundred fifty percent (150%) multiplied by the sum of the monthly
installment of Base Rent and Additional Rent payable for the last month of the
Lease Term.
3.8 HOLDING OVER WITHOUT CONSENT. If Tenant remains in possession of
the Premises after the termination or expiration of the Lease Term without
Landlord's prior written consent, Tenant shall become a tenant at sufferance
only, subject to all the provisions of this Lease so far as applicable, except
that Base Rent shall be increased to an amount equal to two hundred percent
(200%) multiplied by the sum of the monthly installments of Base Rent and
Additional Rent payable by Tenant during the last month of the Lease Term,
prorated on a daily basis. Acceptance by Landlord of Rent after the termination
of the Lease Term shall not result in a renewal or extension of this Lease. The
provisions of Section 3.7 and this Section 3.8 are in addition to, and shall not
act as a waiver of or otherwise affect, Landlord's right of re-entry or any
other rights of Landlord under this Lease or as provided by law or in equity. If
Tenant fails to
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surrender the Premises upon the termination of the Lease Term, despite
Landlord's demand to do so, Tenant shall indemnify, defend and hold Landlord
harmless from and against all loss and liability, including, without limitation,
any claim made by any succeeding tenant founded on, or resulting from, such
failure to surrender, including without limitation, any attorneys' fees or costs
associated therewith.
4. RENT.
4.1 PAYMENT. Tenant shall pay Landlord the monthly installments of
Base Rent provided in Section 1.9 and Additional Rent provided in Section 1.11
in lawful money of the United States, in advance, on the Commencement Date and
thereafter on or before the first day of each month throughout the Lease Term.
Base Rent and Additional Rent shall be paid by Tenant without notice or demand,
deduction, abatement, or offset, except as expressly provided herein. Base Rent
and Additional Rent for any partial month at the beginning or end of the Lease
Term shall be prorated in proportion to the number of days in such month. Base
Rent and Additional Rent are collectively referred to in this Lease as "Rent."
4.2 INTEREST ON LATE PAYMENTS; LATE CHARGE. If any Base Rent or
Additional Rent is not paid on the due date thereof: (i) such overdue amounts
shall bear interest at a rate equal to three (3) percentage points above the
prime rate of interest stated from time to time by Seattle-First National Bank
or its successor, or, in the absence of an established prime rate, five (5)
percentage points over that bank's rate for one year certificates of deposit,
but not in excess of the highest lawful rate permitted under applicable laws,
calculated from the original due date thereof to the date of payment; and (ii)
Tenant shall pay Landlord a late charge equal to five percent (5%) of such
overdue amount. The parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant, the exact amount of which would be difficult to ascertain.
Acceptance by Landlord of any partial amounts due under this Section 4 shall in
no event constitute a waiver of Tenant's default with respect to any overdue
amount, nor prevent Landlord from exercising any of its other rights and
remedies granted under this Lease or by law or in equity.
4.3 ADDRESS FOR PAYMENTS. Tenant shall pay all Rent to Landlord at
Landlord's Payment Address, or at such other place as may be designated by
Landlord from time to time by written notice to Tenant at least thirty (30) days
prior to the next ensuing payment date.
5. SECURITY DEPOSIT. As security for the full and faithful performance
of every covenant and condition of this Lease to be performed by Tenant, Tenant
shall pay to Landlord the Security Deposit specified in Section 1.13. If Tenant
defaults with respect to any covenant or condition of this Lease, including but
not limited to, the payment of Base Rent or Additional Rent, Landlord may apply
all or any part of the Security Deposit to the payment of any sum in default or
payment of any other sum which Landlord may be required or may in its reasonable
discretion deem necessary to spend or incur by reason of Tenant's default. In
such event, Tenant shall deposit with Landlord the amount so applied within five
(5) days of written demand from Landlord. If Tenant shall have fully complied
with all of the covenants and conditions of this Lease the amount of the
Security Deposit then held by Landlord shall be repaid to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interest under this Lease)
within thirty (30) days after the expiration or sooner termination of this
Lease. In the event of Tenant's default under this Lease, Landlord's right to
retain the Security Deposit shall be deemed to be in addition to any and all
other rights and remedies available to Landlord under this Lease, at law or in
equity. Landlord shall not be required to keep any Security Deposit separate
from its general funds and Tenant shall not be entitled to any interest on the
Security Deposit.
6. USES; COMPLIANCE WITH LAWS.
6.1 PERMITTED USES. The Premises are to be used only for the
Permitted Uses, and for no other business or purpose without the prior written
consent of Landlord, which consent may be withheld if Landlord, in its
reasonable discretion, determines that any proposed use is inconsistent with or
detrimental to the maintenance and operation of the Building as a similar office
building or is inconsistent with any restriction on use of the Property
contained in
6
any lease, mortgage or other agreement or instrument by which the Landlord may
be bound or to which any of the Property may be subject.
6.2 DUTIES AND PROHIBITED CONDUCT. Notwithstanding anything to the
contrary in this Lease, Tenant shall not commit any act that will increase the
then-existing rate of insurance on the Building without Landlord's prior written
consent. Tenant shall promptly pay upon demand the amount of any increase in
insurance rates caused by the Permitted Uses or by any act or acts of Tenant or
its employees, agents or representatives. Tenant shall not commit or allow to be
committed any waste upon the Premises, or any public or private nuisance or
other act which disturbs the quiet enjoyment of any other tenant of the Property
or which is unlawful. Tenant shall not, without the written consent of Landlord,
use any apparatus, machinery or device in or about the Premises, or act in any
way, which will cause any substantial noise, or any vibration, fumes, or
releases of Hazardous Substances into the surrounding environment. If any of
Tenant's office machines, equipment or activities should disturb the quiet
enjoyment of any other tenant in the Building, cause any substantial noise, or
cause any vibration, fumes or releases of Hazardous Substances, then Tenant, at
Tenant's sole expense, shall provide adequate insulation or take such other
action as may be necessary to eliminate such disturbance, noise, vibration,
fumes or releases. Tenant, at Tenant's expense, shall comply with all laws,
rules, regulations, orders, ordinances and permits relating to the Premises, or
its use or occupancy of the Premises, and shall observe such rules and
regulations as may be adopted by Landlord and made available to Tenant from time
to time. This Lease shall be subject to all applicable zoning ordinances and to
all municipal, county, state and federal laws and regulations governing or
regulating the use of the Premises.
6.3 ENVIRONMENTAL, HEALTH AND SAFETY LAWS. Without limiting Tenant's
obligations under this Section 6, Tenant in the exercise of its rights and the
performance of its obligations under this Lease shall comply, at Tenant's
expense, with all local, state, or federal laws, rules, regulations, ordinances,
orders and permits now existing, or as hereafter enacted, amended, or issued
concerning environmental, health, or safety matters (collectively, the
"Environmental Laws"). Tenant shall not use the Premises for, or permit anything
to be done in or about the Property which may subject Landlord, any guarantor,
or any mortgagee under any mortgage covering the Property, to liability for
remediation costs or other damages or penalties under any Environmental Laws
resulting from Tenant's use of, or conduct on, the Property, including without
limitation, the use, generation, transportation, management, handling,
treatment, storage, manufacture, emission, release, disposal or deposit of any
radioactive material, hazardous or toxic wastes, hazardous or toxic substances,
any material containing hazardous wastes or hazardous substances (except as they
occur in normal office products or household cleaning products), or any other
pollutant, contaminant, human pathogen or infectious agent as such terms may now
or in the future be defined in any Environmental Laws (collectively, "Hazardous
Substances"), on the Property, adjacent surface waters, soils, underground
waters, or air.
Landlord shall have the right at all reasonable times upon notice to Tenant
to conduct environmental investigations, including the taking of samples, for
the purpose of detecting or measuring the presence of Hazardous Substances on
the Property. Tenant shall keep Landlord continuously informed by written notice
of all Hazardous Substances which Tenant, or Tenant's employees, agents,
representatives, or contractors, generates, stores or otherwise allows on the
Property. Tenant shall provide Landlord with copies of all documents received or
prepared by Tenant concerning any release of a Hazardous Substance at the
Property, all documents Tenant receives or prepares in connection with any
violation, or alleged violation, of an Environmental Law by Tenant, and all
reports or other documents Tenant is required to provide any governmental
authority under any Environmental Law concerning any Hazardous Substance. Upon
request by Landlord, Tenant shall provide Landlord with all other information
which Landlord reasonably deems necessary or useful for the purpose of
determining whether Tenant is in compliance with all Environmental Laws and
whether the Property, or any part of the Property, is contaminated by any
Hazardous Substances. If Tenant or the Premises is in violation of any
Environmental Law, or in the event of a release of Hazardous Substances into or
on the Property or adjacent surface waters, soils, underground waters, or air,
Tenant shall (i) immediately notify Landlord in writing of such occurrence and
the action necessary to correct or mitigate such occurrence, and (ii) take such
action as is necessary to mitigate and correct such
7
violation or release. Provided, however, Landlord reserves the right, but not
the obligation, to enter the Premises, to act in place of the Tenant (and Tenant
hereby appoints Landlord as its agent for such purposes) and to take such action
as Landlord deems necessary to ensure compliance or to mitigate the violation,
at Tenant's expense. If Landlord has a reasonable belief that Tenant is in
violation of any Environmental Law, or that Tenant's actions or inaction
presents a threat of violation or a threat of damage to the Property, Landlord
reserves the right to enter the Premises and take such corrective or mitigating
action as Landlord reasonably deems necessary. All costs and expenses incurred
by Landlord in connection with any such actions shall become immediately due and
payable by Tenant upon presentation of an invoice therefor.
Tenant shall not conduct or permit others to conduct environmental testing
on the Premises without first obtaining Landlord's written consent. Tenant shall
promptly inform Landlord of the existence of any environmental study,
evaluation, investigation or results of any environmental testing conducted on
the Premises whenever the same becomes known to Tenant and Tenant shall provide
copies to Landlord, upon request by Landlord and at no cost to Landlord.
Notwithstanding the foregoing, in no event shall Tenant be responsible for or
liable to Landlord for any Hazardous Substances located in the Premises that
existed or were released upon the Premises prior to the Commencement Date of
this Lease. In addition, Landlord hereby agrees to indemnify Tenant for all
remediation costs and other damages resulting form any spill or discharge of
hazardous substances caused by the gross negligence of Landlord to the full
extent of Landlord's negligence. Landlord represents and warrants that to the
best of its knowledge, the Premises are free of any Hazardous Substances.
7. SERVICES AND UTILITIES; REPAIRS AND MAINTENANCE.
7.1 SERVICES AND UTILITIES; LANDLORD'S OBLIGATIONS.
Landlord warrants that the Building's mechanical, electrical and plumbing
systems are designed and suitable for the delivery of heating, ventilation, air-
conditioning ("HVAC"), electrical and water (including sewer) services
sufficient for standard office use. Landlord shall supply the Premises with HVAC
(at 5 xxxxx per square foot), electricity (at 8 xxxxx per square foot connected
load) and, if applicable, water sufficient for standard office use, the cost of
which shall be paid by the Tenant in accordance with Section 8.6. HVAC service
will be limited to 7:00 a.m to 6:00 p.m on weekdays (excluding holidays
recognized by Landlord) ("Normal Business Hours"), except for additional service
as provided for in this Lease. Landlord shall supply Landlord's standard
Building and Property security and fire monitoring services and elevator
service, Landlord's standard trash removal services (excluding disposal of
Hazardous Substances or medical or biological waste) from the Building
compactor, bulb replacement services for Building standard light fixtures, and
Landlord's standard exterior window washing services for Premises' windows.
Landlord shall also provide any janitorial services to the Premises if so
requested by tenant.
Any service or utility which is separately metered to the Premises by the
utility provider shall be billed directly to Tenant and paid directly by Tenant
to the utility provider. The Base rental rate excludes the cost of janitorial
services to the Premises, and utilities to the Premises, including the estimated
utilities to supply the Premises with building standard HVAC. All other services
or utilities which are required to be provided by Landlord under Section 7.1
which are not separately metered by the service or utility provider shall be
included within "Operating Costs" and shall be paid by Tenant each month as
provided in Section 8. The cost for any services or utilities which are not
separately metered or sub-metered shall be based on Landlord's reasonable
estimate of Tenant's consumption of such utilities. If in the Landlord's
reasonable opinion the Tenant's consumption of any utility is extraordinary,
Landlord shall be entitled to install, maintain and operate, at Tenant's cost, a
monitoring/ metering system(s) in the Premises to measure Tenant's consumption
of water, electricity (including electricity to Tenant's signage, if any) HVAC
or other utilities or services, or to measure the added demands on the Premises
electrical or HVAC systems resulting from Tenant's equipment or lights,
including without limitation, Tenant's improvements pursuant to Exhibit C.
Landlord's obligation to provide the services and utilities described in
this Section 7.1 is subject to Section 11 (Damage And Destruction) and Section
22 (Condemnation).
8
7.1.1 ADDITIONAL SERVICES OR UTILITIES. The Building standard
mechanical system is designed to accommodate standard office use heating loads
generated by lights or equipment using up to Five (5) xxxxx per square foot.
Before installing fixtures, lights or equipment in the Premises which in the
aggregate exceed such amount, or which otherwise consume or require services or
utilities exceeding standard office-type levels, Tenant shall obtain the written
permission of Landlord. Landlord may refuse to grant such permission unless
Tenant agrees to pay Landlord's costs, including Landlord's administrative fee,
for installation of supplementary air conditioning capacity or electrical
systems as necessitated by such equipment or lights. In addition, Tenant shall
pay Landlord as Additional Rent the amount estimated by Landlord (including
Landlord's administrative fee) as the cost of furnishing services or utilities
for the operation of such equipment or lights and the cost of operation and
maintenance of any supplementary air conditioning units necessitated by Tenant's
use of such equipment or lights.
Landlord may restrict access to the Building in accordance with the
Building's security system, provided that Tenant shall have at all times during
the term of this Lease (24 hours of all days) reasonable access to the Premises.
If after request by Tenant, Landlord furnishes HVAC or other services or
utilities in addition to the utilities or services required to be provided by
Landlord under this Lease, including without limitation, furnishing utilities or
services at times other than Normal Business Hours or in amounts exceeding
standard office use, then the cost of such non-standard or additional services
or utilities, as reasonably established by Landlord, shall be paid by Tenant as
Additional Rent.
7.2 SERVICES AND UTILITIES; TENANT'S OBLIGATIONS. Tenant shall be
solely responsible for providing, and shall pay directly, all charges for
janitorial services to the Premises and for any security services desired by
Tenant in addition to Landlord's standard Building and site security services.
Tenant shall be solely responsible for providing, at Tenant's cost, any backup
electricity generator desired by Tenant. It is understood that except as
provided in Sections 7.1 or 7.4, Landlord shall not be required to provide any
services or utilities to Tenant, and Tenant shall make all necessary
arrangements to have such services and utilities billed directly to Tenant and
paid directly by Tenant. Tenant shall pay its share, as reasonably determined by
Landlord, of any unique services or equipment used by Tenant which are shared by
other tenants of the Building, such as generators, dilution tanks and air
compressors.
7.3 INTERRUPTION. Landlord shall not be liable for any loss, injury
or damage to persons or property caused by or resulting from any variation,
interruption, or failure of services or utilities to be provided by Landlord
under this Lease due to any cause whatsoever, including without limitation,
Landlord's failure to make any repairs or perform any maintenance required to be
performed by Landlord under this Lease. However, if Landlord fails to make
repairs within a reasonable time after receiving written notice of the need for
repairs, Tenant shall be allowed to an abatement for rent to the extent said
failure to make said repairs interferes with Tenant's reasonable occupancy of
the Premises. No temporary variation, interruption or failure of services or
utilities to be provided by Landlord under this Lease incident to the making of
repairs, alterations or improvements, or due to accident, strike or conditions
or events beyond Landlord's reasonable control, shall be deemed an eviction of
Tenant or relieve Tenant from any of Tenant's obligations under this Lease.
7.4 LANDLORD'S REPAIR AND MAINTENANCE OBLIGATIONS. Except as provided
in Sections 9 (Improvements and Alterations by Tenant), 11 (Damage or
Destruction) or 22 (Condemnation), Landlord shall cause to be maintained in
reasonably good order and condition the Premises and the public and common areas
of the Property, such as lobbies, elevators, stairs, corridors, restrooms,
foundation, exterior walls and all aspects of the roof, except with respect to
Tenant's modification of any or all of these areas; provided, however, Tenant
shall be responsible for the cost of repair of damage occasioned by any act or
omission of Tenant or Tenant's officers, contractors, agents, invitees,
licensees or employees, subject to Section 12, Waiver of Subrogation. Landlord
shall maintain and repair the Premises, water, if applicable, and elevator
service at all times during the term of the Lease.
7.5 TENANT'S REPAIR AND MAINTENANCE OBLIGATIONS. Except for
9
maintenance, replacements and repairs required to be made or provided by
Landlord under Sections 7.1 or 7.4, Tenant, at its sole cost and expense, shall
provide for the maintenance, repair and replacement within the Premises and all
built-in appliances and equipment which are in the Premises for Tenant's
exclusive use and any security systems or services desired by Tenant in addition
to any such systems or services as may be provided by Landlord under this Lease.
In performing its obligations under this Section 7, Tenant, at Tenant's
expense, shall comply with all Environmental Laws and all other applicable laws,
ordinances, codes, orders, rules or regulations of any governmental authority.
Tenant shall retain, and shall provide Landlord upon request, copies of Tenant's
maintenance and service contract(s). Except as provided in Section 9 in
connection with Alterations, before making or performing any work, repairs, or
replacement of any kind in the Premises, if such work shall affect the building
systems or costs of operation to Landlord then Tenant shall obtain Landlord's
prior written approval, which approval may be conditioned, on Tenant providing
Landlord with plans and specifications therefor, if applicable, which are
reasonably acceptable to Landlord. All work, maintenance, repairs and
replacements by Tenant under this Lease shall be performed by licensed
contractors acceptable to Landlord. Tenant shall provide Landlord with copies of
all contracts or purchase orders, for such work, maintenance, repairs and
replacements prior to having such work, maintenance, repairs or replacements
performed. Before installing any heavy equipment or fixtures in the Premises,
Tenant shall submit the plans and specifications therefor to Landlord for
Landlord's written approval.
8. ADDITIONAL RENT: OPERATING COSTS AND REAL ESTATE TAXES
8.1 DEFINITIONS. In addition to the Base Rent, Tenant shall pay to
Landlord each month as Additional Rent Tenant's Share of Taxes and of Operating
Costs as provided in this Section 8, using the following definitions:
8.1.1 TAXES. "Taxes" shall mean taxes on real property and
personal property, charges and assessments (or any installments thereof due
during the Lease Year) levied with respect to the Property, any improvements,
fixtures and equipment on the Property, and all other property of Landlord, real
or personal, used directly in the operation of the Property, and any taxes
levied or assessed (or any installment thereof due during the Lease Year) in
addition to or lieu of, in whole or in part, such real property or personal
property taxes, or any other tax upon leasing of the Property and/or Building or
rents collected, but not including any federal or state income, estate, business
and occupation, inheritance or franchise tax.
8.1.2 OPERATING COSTS. "Operating Costs" shall mean all expenses
other than Taxes paid or incurred by Landlord for obtaining services and
products for maintaining, operating, equipment replacement, and repairing the
Property, including without limitation, the Property public and common areas,
and the personal property used in conjunction therewith, and which shall
include, without limitation, the costs of Landlord performing its maintenance
and repair obligations under this Lease, depreciation and amortization of
capital improvements made subsequent to the initial development of the Property
or Building which are designed with a reasonable probability of enhancing the
health and/or safety of the Property or improving the operating efficiency of
the Property or Building, security services for the Property, fire alarm system
monitoring and testing, refuse collection, maintaining water, sewer, storm
drainage and other utility systems and services, common area electricity, gas
and other similar energy sources (excluding electricity for the Premises which
will be charged to the Tenant subject to paragraph 8.6 below), supplies, common
area janitorial and cleaning services, exterior window washing, landscape
planting, maintenance and irrigation, services of independent contractors
(including any market-rate management fees which may be or become payable to
third parties), compensation (including employment taxes and fringe benefits) of
all persons who perform duties in connection with the operation, maintenance and
repair of the Property and its equipment, the maintenance, resurfacing, repair
and striping of parking areas and curbs, downspouts and gutters, lighting and
outdoor facilities, premiums for Landlord's insurance, licenses, permits and
inspection fees, a management fee, reasonable legal, administrative and
accounting expenses, and any other expense or charge whether or not hereinabove
described, which in accordance with generally accepted accounting principles and
management practices would be considered an expense of maintaining, operating,
or repairing the Property, excluding
10
or deducting, as appropriate costs of any special services rendered to
individual tenants (including Tenant) for which a special charge is collected
including, without limitation, any specially metered charges. Notwithstanding
the foregoing, Operating Costs shall not include the following:
(1) attorney's fees, accounting fees and other expenditures incurred in
connection with negotiations, disputes and claims of other tenants or occupants
of the Building, except as specifically otherwise provided in the Lease;
(2) costs directly attributable to or for the sole benefit of a tenant,
including Tenant;
(3) rental on ground leases or other underlying leases;
(4) cost of any work or services to the extent performed for any facility
other than the Building (provided Landlord shall have the right to reasonably
allocate the cost of services provided to more than one facility);
(5) costs due to Landlord's willful violation of any governmental rule or
authority;
(6) charitable or political contributions;
(7) any fees paid to related parties of Landlord which exceed the market
rate for similar services; and
(8) costs of refinancing or selling the property.
8.1.3 TENANT'S SHARE. "Tenant's Share" in connection with
Operating Costs and Taxes shall mean Tenant's Share of the Property multiplied
by actual or estimated, as the case may be, Operating Costs or Taxes allocated
to the Property, respectively. Notwithstanding anything to the contrary in this
Section 8.1.3, for purposes of the determination of Operating Costs, to the
extent Operating Costs vary depending upon occupancy type or level of the areas
served, such varying Operating Costs shall be adjusted so that such Operating
Costs shall not reflect material changes to the extent attributable to changes
in occupancy type and/or levels.
8.2 PAYMENT OF ADDITIONAL RENT FOR ESTIMATED INCREASES IN OPERATING
COSTS AND TAXES. Within ninety (90) days of the Commencement Date or the close
of each Lease Year, as applicable, or as soon thereafter as is practicable,
Landlord shall provide Tenant with a written statement of Tenant's Share of
estimated Operating Costs and increases in Operating Costs and Taxes for such
Lease Year over actual Operating Costs and Taxes for the Base Year. Tenant shall
pay 1/12 of the amount of such estimated Operating Costs, and increases in
Operating Costs and Taxes as Additional Rent as provided in Section 4 each month
during such Lease Year and until such time as Landlord provides Tenant with a
statement of estimated increases for the subsequent Lease Year. If at any time
or times during such Lease Year, it appears to Landlord that Tenant's Share of
actual Operating Costs and/or actual Taxes will vary from the estimated
Operating Costs and/or Taxes by more than five percent (5%) on an annual basis,
Landlord may, by written notice to Tenant, revise its estimate for such Lease
Year and Additional Rent payable by Tenant under this Section 8.2 for such Lease
Year shall be increased based on Landlord's revised estimate.
8.3 ACTUAL OPERATING COSTS AND TAXES. Landlord will make reasonable
efforts within ninety (90) days after the close of each Lease Year during the
Term hereof for which an estimated statement was delivered to Tenant pursuant to
Section 8.2, to deliver to Tenant a written statement ("Reconciliation
Statement") setting forth Tenant's Share of the actual Operating Costs and Taxes
paid or incurred by Landlord during the preceding Lease Year (or such prorated
portion of such Lease Year if this Lease commences or terminates on a day other
than the first or last day of a Lease Year, based on a 365-day Lease Year). If
the actual Operating Costs and/or Taxes shown on the Reconciliation Statement
for any Lease Year exceed estimated Operating Costs and/or Taxes paid by Tenant
to Landlord pursuant to Section 8.2, Tenant shall pay the excess to Landlord as
Additional Rent within thirty (30) days after the date
11
of the Reconciliation Statement. If the Reconciliation Statement shows that
actual Operating Costs and/or Taxes are less than the estimated Operating Costs
and/or Taxes paid by Tenant to Landlord pursuant to Section 8.2, then the amount
of such overpayment shall be credited by Landlord to the next Additional Rent
payable by Tenant (or refunded to Tenant in the event of the termination or
expiration of this Lease within thirty (30) business days of the date of said
termination or expiration ). Notwithstanding anything to the contrary in this
Section 8.3, Tenant's Share of Operating Costs and Taxes for any partial Lease
Year at the end of the Term shall be as shown on Landlord's statement of
estimated Operating Costs and Taxes furnished to Tenant pursuant to Section 8.2.
8.4 DETERMINATIONS. The determination of actual and estimated
Operating Costs and Taxes shall be made by Landlord. Landlord or its agent shall
keep records in reasonable detail showing all expenditures made for the items
enumerated in this Section 8.
Tenant shall have the right at its own cost and expense to review and/or
inspect Landlord's records once in any calendar year with respect to any
Operating Costs shown on Landlord's annual reconciliation statement provided to
Tenant. Tenant shall give Landlord written notice of its intention to conduct
any such audit within ninety (90) days of the date of Landlord's annual
reconciliation statement or Tenant shall be deemed to have waived its audit and
inspection right with respect to the period of time covered in such statement.
Tenant's audit shall be conducted at Landlord's main business office, or at such
other location as Landlord may keep its relevant business records, and on a date
mutually agreed upon by Landlord and Tenant, but in no event earlier than sixty
(60) days from the date of Tenant's notice. Tenant, and its employees, agents,
attorneys and representatives agree that any and all information concerning
Operating Costs or any other information disclosed by Landlord pursuant to any
such audit shall not be disclosed to any other person or entity without the
prior written consent of Landlord, which consent shall be at Landlord's sole
discretion. Prior to providing such confidential information to any of Tenant's
employees, agents, attorneys or representatives, Tenant shall deliver to
Landlord a written acknowledgement of such parties' agreement to be bound by the
terms of this paragraph, in a form satisfactory to Landlord. Nothing in this
paragraph shall relieve Tenant of its obligation under Section 8 to pay
Additional Rent without notice, demand, offset or deduction.
8.5 TENANT'S PERSONAL PROPERTY TAXES. Tenant shall pay prior to
delinquency all Personal Property Taxes payable with respect to all Property of
Tenant located on the Premises or the Property and, upon Landlord's request,
shall promptly provide Landlord with written proof of such payment. Solely for
purposes of this Section 8.5, "Property of Tenant" shall include Landlord's
Work, Tenant's Work and all other improvements which are paid for by Tenant, and
"Personal Property Taxes" shall include all property taxes assessed against the
Property of Tenant, whether assessed as real or personal property.
8.6 TENANT'S UTILITY AND JANITORIAL CHARGES. Landlord and Tenant
agree that utilities to the Premises including the cost of utilities to provide
Building standard HVAC are not included in the Base Rent. Landlord will
estimate, by meter if possible, the cost of the Tenant's usage of electricity
and natural gas for its Premises, including the cost of utilities to heat and
cool the Premises. Tenant shall pay to the Landlord as Additional Rent each
month the Landlord's estimate of such charges. At the end of each calendar year
the Landlord shall compare the previous 12 months actual charges to its
estimates. Any amounts owing shall be paid by Tenant, and credit amounts shall
be refunded to Tenant in accordance with Section 8.3. Landlord shall adjust its
estimates as provided for in Section 8.2.
Tenant will also be responsible for any Janitorial services to be provided
to the Premises, but at all times must maintain or have a Janitorial plan in
place to keep the Premises in a clean and orderly condition. Landlord may
request in writing to see such plan or contract of third party service provider.
9. IMPROVEMENTS AND ALTERATIONS BY TENANT. Except for the Tenant
Improvements, Tenant shall not make any changes, alterations, additions or
improvements in or to the Premises ("Alterations"), including, without
limitation, changes to locks on doors or to plumbing or wiring, without first
obtaining the written consent of Landlord,
12
which shall not unreasonably be withheld, and, where required by Landlord, such
Alterations shall be made under the supervision of a competent architect and/or
a licensed structural engineer, and in accordance with plans and specifications,
approved by Landlord, which approval shall not be unreasonably withheld. Prior
to commencing any Alterations, Tenant shall notify Landlord of such work and
Landlord shall perform a good faith asbestos inspection in accordance with
applicable laws and regulations. All work with respect to any Alterations shall
be done in a good and workmanlike manner and shall be diligently prosecuted to
completion. In no event shall Tenant's Alterations change or affect the
strength, exterior appearance, or the mechanical, electrical, or plumbing
services or systems, of the Building without Landlord's consent. Tenant shall
reimburse Landlord upon demand for any sums expended by Landlord for examination
and approval of plans and specifications for any and all Alterations. Tenant
shall also pay Landlord a sum equal to the costs incurred by Landlord during any
inspection or supervision of any and all Alterations. All damages or injury to
the Property caused by any act or omission of Tenant, or Tenant's officers,
contractors, agents, invitees, licensees or employees, or by any persons who may
be in or upon the Property with the express or implied consent of Tenant,
including but not limited to, damage from cracked or broken glass in windows or
doors, shall be paid by Tenant upon demand by Landlord.
10. ACCESS. During other than Normal Business Hours, Landlord may restrict
access to the Building in accordance with the Building's security system,
provided that Tenant shall have at all times during the Lease Term (24 hours of
all days) reasonable access to the Premises. Landlord, at Tenant's cost, shall
provide Tenant with security access cards to the Premises if such cards are a
part of the Building's security system at Landlord's cost. Tenant shall permit
Landlord and its agents to enter the Premises at all reasonable times (except in
cases of emergency) for the purpose of inspecting or improving the Premises or
the Building or for performing any of its obligations under this Lease, upon
advance notice to Tenant. Nothing contained in this Section 10 shall be deemed
to impose any obligation upon Landlord not expressly stated elsewhere in this
Lease. When reasonably necessary Landlord may temporarily close entrances,
doors, corridors, elevators or other facilities without liability to Tenant by
reason of such closure and without such action by Landlord being construed as an
eviction of Tenant or release of Tenant from the duty of observing and
performing any of the provisions of this Lease, so long as such action does not
materially and unreasonably interfere with Tenant's access to the leased
Premises. Landlord shall have the right to enter the Premises for the purpose of
showing the Premises to prospective tenants within the period of one hundred
eighty (180) days prior to the expiration or sooner termination of the Lease
Term, provided, Landlord gives at least twenty-four (24) hour notice and abides
by Tenant's reasonable security measures to protect Tenant's trade secrets.
11. DAMAGE OR DESTRUCTION.
11.1 DAMAGE AND REPAIR. If the Building is damaged by fire or any
other cause to such extent that the cost of restoration, as estimated by
Landlord, will equal or exceed thirty percent (30%) of the replacement value of
the Building (exclusive of foundations) just prior to the occurrence of the
damage, or if insurance proceeds sufficient for restoration are for any reason
unavailable, then Landlord may no later than the one hundred twentieth (120th)
day following the damage, give Tenant a notice of its election to terminate this
Lease. In the event of such election; (a) this Lease shall be deemed to
terminate on the date that is thirty (30) days from the date of Tenant's receipt
of such notice ("Termination Date"); (b) Tenant shall surrender possession of
the Premises on the Termination Date; and (c) Rent and Additional Rent shall be
apportioned as of the date of Tenant's surrender and any Rent paid for any
period beyond such date shall be repaid to Tenant. If the cost of restoration
as estimated by Landlord shall amount to less than thirty percent (30%) of said
replacement value of the Building or Property and insurance proceeds sufficient
for restoration are available, or if Landlord does not elect to terminate this
Lease, Landlord shall restore the Building and the Premises (to the extent of
the improvements to the Premises originally provided by Landlord hereunder but
excluding any improvements paid for by Landlord with any tenant allowance or
credits) with reasonable promptness, subject to delays beyond Landlord's control
and delays in the making of insurance adjustments by Landlord, and Tenant shall
have no right to terminate this Lease except as provided in this Section 11. To
the extent that the Premises are rendered untenantable by such damage or by
Landlord's restoration work under this Section, the Base Rent (but not
Additional
13
Rent) shall proportionately xxxxx, provided, however, in the event such damage
resulted from or was contributed to, directly or indirectly, by the act, fault
or neglect of Tenant, Tenant's officers, contractors, agents, employees,
invitees or licensees, Base Rent shall xxxxx only to the extent Landlord
receives proceeds from any rental income insurance policy received by Landlord
for loss of Rent under this Lease.
11.2 DESTRUCTION DURING LAST YEAR OF TERM. Notwithstanding anything
to the contrary in this Lease, in case the Building shall be substantially
destroyed by fire or other cause at any time during the last Lease Year of this
Lease, either Landlord or Tenant may terminate this Lease upon written notice to
the other given within thirty (30) days of the date of such destruction.
11.3 BUSINESS INTERRUPTION. No damages, compensation or claim shall
be payable by Landlord for inconvenience, loss of business or annoyance arising
from any damage or destruction, repair or restoration of any portion of the
Premises or the Building. Landlord shall use reasonable efforts to effect such
repairs promptly.
11.4 TENANT IMPROVEMENTS. Landlord will not carry insurance of any
kind on any improvements or alterations paid for by Tenant under this Lease or
paid for pursuant to any tenant allowance or credits from Landlord, or on
Tenant's furniture, furnishings, fixtures, equipment or appurtenances of Tenant
under this Lease and Landlord shall not be obligated to repair any damage
thereto or replace the same. Tenant shall insure its improvements in accordance
with Section 14.2 and proceeds of such insurance shall be used in any repair or
restoration of the Premises.
11.5 EXPRESS AGREEMENT. The provisions of this Section 11 shall be
considered an express agreement governing any case of damage or destruction of
the Building or Premises by fire or other casualty.
12. WAIVER OF SUBROGATION. Whether loss or damage is due to the negligence
of either Landlord or Tenant, their agents or employees, or any other cause,
Landlord and Tenant do each hereby release and relieve the other, their agents
or employees, from responsibility for, and waive their entire claim of recovery
for, (i) any loss or damage to the real or personal property of either party
located anywhere on the Property, including the Building itself, arising out of
or incident to the occurrence of any of the perils which are covered, or are
required to be covered under this Lease, by their respective property and
related insurance policies, and (ii) any loss resulting from business
interruption at the Premises or loss of rental income from the Building, arising
out of or incident to the occurrence of any of the perils covered by any
business interruption insurance policy, or by any loss of rental income
insurance policy, which may be held by Landlord or Tenant. Each party shall use
best efforts to cause its insurance carriers to consent to the foregoing waiver
of rights of subrogation against the other party. Notwithstanding the foregoing,
no such release shall be effective unless and to the extent the aforesaid
insurance policy or policies shall expressly permit such a release or contain a
waiver of the carrier's right to be subrogated.
13. INDEMNIFICATION. Landlord shall not be liable for, and Tenant shall
defend (unless Landlord waives its right to such defense, and in any event with
counsel reasonably satisfactory to Landlord), indemnify, hold harmless and
protect Landlord and its employees and agents from any claim, demand, liability,
judgment, award, fine, mechanics' lien or other lien, loss, damage, expense,
penalty, charge or cost of any kind or character (including actual attorney fees
and court costs) which may be made, incurred or asserted by Tenant, Tenant's
agents or employees, contractors, or any third parties (including but not
limited to Landlord's agents, servants or employees), arising directly or
indirectly from: (a) any labor dispute involving Tenant or its agents or
contractors (but excluding labor disputes involving Landlord or its contractors,
subcontractors, or agents); (b) the construction, repair, alteration,
improvement, use, occupancy or enjoyment of the Premises by Tenant its
contractors, agents, employees and/or customers or invitees, (c) injury to, or
death of, any person or persons or damage to, or destruction of, any property
(including without limitation the costs of investigation, removal or remedial
action and disposal of any hazardous or toxic substances, as such terms may be
defined under any applicable federal, state, or municipal law, statute, rule or
regulation) occurring in, on or about
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the Premises, unless it is the result of Landlord's negligence or (d) Tenant's
breach of this Lease or the acts or omissions of Tenant or its officers,
directors, shareholders, employees, contractors, subcontractors, or agents (the
"Claims"). Notwithstanding anything to the contrary in this Section 13, nothing
in this Section 13 shall relieve Landlord from responsibility for its
proportionate share of its fault attributable to its negligence or wilful
misconduct in causing any such Claims. TENANT HEREBY WAIVES ITS IMMUNITY WITH
RESPECT TO LANDLORD UNDER THE INDUSTRIAL INSURANCE ACT (RCW TITLE 51) AND/OR THE
LONGSHOREMEN'S AND HARBOR WORKER ACT, AND/OR ANY EQUIVALENT ACTS AND TENANT
EXPRESSLY AGREES TO ASSUME POTENTIAL LIABILITY FOR ACTIONS BROUGHT AGAINST
LANDLORD BY TENANT'S EMPLOYEES. THIS WAIVER HAS BEEN SPECIFICALLY NEGOTIATED BY
THE PARTIES TO THIS LEASE AND TENANT HAS HAD THE OPPORTUNITY TO, AND HAS BEEN
ENCOURAGED TO, CONSULT WITH INDEPENDENT COUNSEL REGARDING THIS WAIVER.
Without limiting Tenant's obligations under this Section 13, Tenant agrees
to defend, indemnify and hold Landlord harmless from and against any and all
claims, causes of action, regulatory demands, liabilities, fines, penalties,
losses, and expenses, including without limitation, clean-up or other remedial
costs (including attorneys' fees, costs and all other reasonable litigation
expenses when incurred and whether incurred in defense of actual litigation or
in reasonable anticipation of litigation), arising from the existence or
discovery of any Hazardous Substance on the Premises, or the migration of any
Hazardous Substance from the Premises to other properties or into the
surrounding environment, whether (i) made, commenced or incurred during the term
of this Lease, or (ii) made, commenced or incurred after the expiration or
termination of this Lease if arising out of events occurring during the term of
this Lease.
Tenant shall not be liable for, and Landlord shall defend (unless Tenant
waives its rights to defense, and in any event with counsel reasonably
satisfactory to Tenant), indemnify, hold harmless and protect Tenant and its
employees and agents from any claim, demand, liability, judgment, award, fine,
mechanics lien or other lien, loss, damage, expense, penalty, change or cost of
any kind of character (including reasonable attorneys' fees and court costs)
which may be made, incurred or asserted against Tenant by third parties arising
or resulting from damage to property or injury to person to the extent caused by
the negligence or willful misconduct of Landlord, its employees, agents,
servants or representatives.
14. INSURANCE.
14.1 LIABILITY INSURANCE. Commencing on the earlier of the
Commencement Date or the date Tenant first enters onto the Premises and
continuing throughout the term of this Lease and any renewal hereof, Tenant
shall, at its own expense, keep and maintain in full force and effect, a policy
of commercial general liability insurance including a contractual liability
endorsement covering Tenant's obligations under Section 13, insuring Tenant's
activities upon, in or about the Premises or the Building against claims of
bodily injury or death or property damage or loss with a limit of not less than
$2,000,000 combined single limit per occurrence and annual aggregate.
14.2 PROPERTY INSURANCE. Commencing on the earlier of the
Commencement Date or the date Tenant first enters onto the Premises and
continuing throughout the Term of this Lease and any renewal hereof, Tenant
shall, at its own expense, keep and maintain in full force and effect, what is
commonly referred to as "all risk" coverage insurance (but excluding earthquake
and flood) on Tenant's leasehold improvements, including without limitation, any
improvements made by Landlord on behalf of Tenant or pursuant to a tenant
allowance or credit, in an amount not less than the current 100% replacement
value thereof. Landlord shall not carry insurance on Tenant's leasehold
improvements.
14.3 INSURANCE POLICY REQUIREMENTS. All policies of insurance required
under this Section 14 shall be issued by companies qualified to do business in
the State of Washington and holding a general policy holder's rating of not less
than "A" and a financial rating of not less than "Class XI" as rated in the most
current available edition of "Best's
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Insurance Reports." All such policies shall contain cross-liability endorsements
and shall name Xxxxx Corporation, Xxxxx X. Xxxxx and Xxxxxx X. Xxxxx ,
Landlord's mortgagees or beneficiaries and such additional individuals or
entities as Landlord may from time to time designate as primary additional
insureds. No insurance policy required under this Section 14 shall be cancelled
or reduced in coverage and each insurance policy shall provide that it is not
subject to cancellation or a reduction in coverage except after thirty (30) days
prior written notice to Landlord. Tenant shall deliver to Landlord upon
Commencement Date or the date Tenant first enters onto the Premises and from
time to time thereafter, a cop of the certificate of insurance evidencing the
existence, endorsements, and amounts of same as required by Landlord. In no
event shall the limits of any insurance policy required under Section 14 be
considered as limiting the liability of Tenant under this Lease. All public
liability, property damage and other policies shall be written as primary
policies, not contributing with or secondary to coverage which Landlord may
carry.
15. ASSIGNMENT AND SUBLETTING.
15.1 ASSIGNMENT OR SUBLEASE. Tenant shall not assign, mortgage,
encumber or otherwise transfer this Lease or sublet the whole or any part of the
Premises without in each case first obtaining Landlord's prior written consent,
which consent may not be unreasonably conditioned, delayed or withheld.
In no event shall an assignment, subletting or other transfer of the Lease
relieve Tenant of any of its obligations under this Lease. Consent to any such
assignment, subletting or transfer shall not operate as a waiver of the
necessity for consent to any subsequent assignment, subletting or transfer.
If such consent is requested and Tenant has subleased at least fifty
percent (50%) of the net rentable square footage of the Premises at any given
time during the term of this Lease, Landlord reserves the right to terminate
this Lease, or, if consent is requested for subletting less than the entire
Premises, to terminate this Lease with respect to the portion for which such
consent is requested, at the proposed effective date of such subletting, in
which event Landlord shall enter into the relationship of Landlord and Tenant
with any such subtenant or assignee, based on the rent (and/or other
compensation) and the term agreed to by such subtenant or assignee and otherwise
upon the terms and conditions of this Lease.
If Tenant is a corporation, any transfer of this Lease by merger,
consolidation or liquidation, or any change in the ownership of a majority of
its outstanding voting stock, or power to vote a majority of its outstanding
voting stock, shall constitute an assignment for the purpose of this Section 15;
provided, however, for the purposes of this Section 15, a public offering of
stock registered with the SEC, shall not constitute a transfer. Notwithstanding
any of the foregoing in this Section 15.1, Tenant may merge with or be acquired
by another corporation, Landlord's consent will not be unreasonably withheld
provided that the successor entity (upon consummation of such transaction) has a
net worth at least equal to the net worth of Tenant as of the date of the
execution of this Lease. If Tenant is a partnership, any transfer of this
Lease by merger, consolidation, liquidation, dissolution, or any change in the
ownership of a majority of the partnership interests shall constitute an
assignment for the purpose of this Section 15.
15.2 DOCUMENTATION AND EXPENSES. In connection with each request for
an assignment or subletting Tenant shall: (i) submit in writing to Landlord the
name and legal composition of the proposed subtenant or assignee, the nature of
the proposed subtenant's or assignee's business to be carried on in the
Premises, the terms and provisions of the proposed sublease or assignment and
such reasonable financial information as Landlord may request concerning the
proposed subtenant or assignee; and (ii) pay Landlord's reasonable costs of
processing such assignment or subletting, including attorneys' fees, upon demand
of Landlord. Tenant shall provide Landlord with copies of all assignments,
subleases and assumption instruments.
15.3 TRANSFEREE OBLIGATIONS. As a condition to Landlord's approval of
an assignment, any potential assignee otherwise acceptable to Landlord shall
assume, in writing, all of Tenant's obligations under this Lease and Tenant and
such assignee shall agree, in writing, to
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be jointly and severally liable for the performance of all of Tenant's
obligations under this Lease. As a condition to Landlord's approval of any
sublessee otherwise acceptable to Landlord such sublessee shall assume, in
writing, all of Tenant's obligations under this Lease as to the subleased
portion of the Premises and Tenant and such sublessee shall agree, in writing,
to be jointly and severally liable with Tenant for rent and performance of all
of the terms, covenants, and conditions of such approved sublease.
16. SIGNS. Tenant shall not inscribe any inscription, or post, place, or
in any manner display any sign, graphics, notice, picture, placard or poster, or
any advertising matter whatsoever, anywhere in or about the Property at places
visible (either directly or indirectly as an outline or shadow on a glass pane)
from anywhere outside the Premises without first obtaining Landlord's written
consent, such consent to be at Landlord's sole discretion. Any such consent by
Landlord shall be upon the understanding and condition that Tenant shall remove
the same at the expiration or sooner termination of this Lease and Tenant, at
its expense, shall repair any damage to the Property, or any portion thereof,
caused by such removal. Notwithstanding the foregoing, Tenant is permitted to
place signage on the Building in a location that is acceptable on the East
facade of the building. Tenant will also be permitted to place their name on a
monument sign to be constructed at the main entrance to the property. Such
signage must be pre-approved by Landlord's architect and must comply with local
laws. The cost of such signage, maintenance, repair and operation shall be
borne exclusively by Tenant.
17. LIENS. Tenant shall keep its interest in this Lease, any property of
Tenant located on the Property (other than the unattached personal property set
forth on Exhibit C-1), and the Property free from any liens arising out of any
work performed or materials ordered or obligations incurred by or on behalf of
Tenant and Tenant hereby agrees to indemnify, defend and hold Landlord harmless
from and against any liability from any such lien, including without limitation,
liens arising from Tenant's Work. In the event any lien is filed against the
Property, or any portion thereof, by any person claiming by, through or under
Tenant, Tenant shall, upon request of Landlord and at Tenant's expense,
immediately either cause such lien to be released of record or furnish to
Landlord a bond, in form and amount and issued by a surety, satisfactory to
Landlord, indemnifying Landlord and the Property against all liability, costs
and expenses, including attorneys' fees, which Landlord may incur as a result
thereof. Provided that such bond has been furnished to Landlord, Tenant, at its
sole cost and expense and after written notice to Landlord, may contest, by
appropriate proceedings conducted in good faith and with due diligence, any
lien, encumbrance or charge against the Property arising from work done or
materials provided to and for Tenant, if, and only if, such proceedings suspend
the collection thereof against Landlord, Tenant and the Property and neither the
Property nor any part thereof or interest therein is or will be in any danger of
being sold, forfeited or lost.
18. BANKRUPTCY.
18.1 ASSUMPTION OF LEASE. In the event Tenant becomes a Debtor under
Chapter 7 of the Bankruptcy Code ("Code") or a petition for reorganization or
adjustment of debts is filed concerning Tenant under Chapters 11 or 13 of the
Code, or a proceeding is filed under Chapter 7 of the Code and is transferred to
Chapters 11 or 13 of the Code, the Trustee or Tenant, as Debtor and as Debtor-
In-Possession, may not elect to assume this Lease unless, at the time of such
assumption, the Trustee or Tenant has: (i) Cured all defaults under the Lease
and paid all sums due and owing under the Lease or provided Landlord with
"Adequate Assurance" (as defined below) that: (i) within ten (10) days from the
date of such assumption, the Trustee or Tenant will completely pay all sums due
and owing under this Lease and compensate Landlord for any actual pecuniary loss
resulting from any existing default or breach of this Lease, including without
limitation, Landlord's reasonable costs, expenses, accrued interest, and
attorneys' fees incurred as a result of the default or breach; (ii) within
twenty (20) days from the date of such assumption, the Trustee or Tenant will
cure all non-monetary defaults and breaches under this Lease, or, if the nature
of such non-monetary defaults is such that more than twenty (20) days are
reasonably required for such cure, that the Trustee or Tenant will commence to
cure such non-monetary defaults within twenty (20) days and thereafter
diligently prosecute such cure to completion; and (iii) the assumption will be
subject to all of the provisions of this Lease.
18.1.1 DEFINITION OF ADEQUATE ASSURANCES. For purposes of this
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Section 18, Landlord and Tenant acknowledge that in the context of a bankruptcy
proceeding involving Tenant, at a minimum, "Adequate Assurance" shall mean: (i)
the Trustee or Tenant has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that the Trustee or Tenant will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and (ii) the Bankruptcy
Court shall have entered an Order segregating sufficient cash payable to
Landlord and/or the Trustee or Tenant shall have granted a valid and perfected
first lien and security interest and/or mortgage in or on property of Trustee or
Tenant acceptable as to value and kind to Landlord, to secure to Landlord the
obligation of the Trustee or Tenant to cure the monetary and/or non-monetary
defaults and breaches under this Lease within the time periods set forth above;
and (iii) the Trustee or Tenant, at the very minimum, shall deposit a sum equal
to 2 month's Base Rent to be held by Landlord (without any allowance for
interest thereon) to secure Tenant's future performance under the Lease.
18.2 ASSIGNMENT OF LEASE. If the Trustee or Tenant has assumed the
Lease pursuant to the provisions of this Section 18 for the purpose of assigning
Tenant's interest hereunder to any other person or entity, such interest may be
assigned only after the Trustee, Tenant or the proposed assignee have complied
with all of the terms, covenants and conditions of this Lease, including,
without limitation, those with respect to Additional Rent. Landlord and Tenant
acknowledge that such terms, covenants and conditions are commercially
reasonable in the context of a bankruptcy proceeding of Tenant. Any person or
entity to which this Lease is assigned pursuant to the provisions of the Code
shall be deemed without further act or deed to have assumed all of the
obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall upon request execute and deliver to Landlord an
instrument confirming such assignment.
18.3 ADEQUATE PROTECTION. Upon the filing of a petition by or against
Tenant under the Code, Tenant, as Debtor and as Debtor-In-Possession, and any
Trustee who may be appointed agree to adequately protect Landlord as follows:
(i) to perform each and every obligation of Tenant under this Lease until such
time as this Lease is either rejected or assumed by Order of the Bankruptcy
Court; (ii) to pay all monetary obligations required under this Lease, including
without limitation, payment of Rent and Additional Rent payable hereunder which
is considered reasonable compensation for the use and occupancy of the Premises;
(iii) provide Landlord a minimum of thirty (30) days prior written notice,
unless a shorter period is agreed to in writing by the parties, of any
proceeding relating to any assumption of this Lease or any intent to abandon the
Premises, which abandonment shall be deemed a rejection of this Lease; and (iv)
to perform to the benefit of Landlord as otherwise required under the Code. The
failure of Tenant to comply with the above shall result in an automatic
rejection of this Lease.
19. DEFAULT.
19.1 CUMULATIVE REMEDIES. All rights of Landlord in this Lease shall
be cumulative, and none shall exclude any other right or remedy allowed by law
in force when the default occurs or in equity. In addition to the other
remedies provided in this Lease, Landlord shall be entitled to restrain by
injunction (without bond) the violation or attempted violation of any of the
covenants, agreements or conditions of Tenant under this Lease.
19.2 TENANT'S DEFAULT; RIGHT TO CURE. The failure of Tenant to perform
any obligation of Tenant as provided in this Lease shall be a default under this
Lease. Tenant shall have a period of five (5) business days from the date of
Tenant's receipt of written notice from Landlord to Tenant within which to cure
any default in the payment of Rent or Additional Rent. Tenant shall have a
period of ten (10) business days from the date of written notice from Landlord
to Tenant to cure any other default under this Lease; provided, however, that
with respect to any such default which cannot be cured within such ten (10) day
period, the default shall not be deemed to be uncured if Tenant commences to
cure within ten (10) days and for so long as Tenant is diligently prosecuting
the cure thereof.
19.3 LANDLORD'S RIGHTS AND REMEDIES. Upon the occurrence of an uncured
default by Tenant, Landlord, in addition to all other rights or remedies it may
have, at its option, may exercise any of the following rights without further
notice or demand of any kind to Tenant
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or any other person, except as required by applicable State law:
19.3.1 TERMINATION OF LEASE. The right of Landlord to
terminate this Lease and Tenant's right to possess the Premises and to reenter
the Premises, take possession thereof and remove all person from the Premises,
following which Tenant shall have no further claim thereon or hereunder;
19.3.2 RE-ENTRY OF THE PREMISES. The right of Landlord,
without terminating this Lease and Tenant's right to possess the Premises, to
reenter the Premises and occupy the whole or any part of the Premises for and on
account of Tenant
and to collect any unpaid Rents which have become payable, or which may
thereafter become payable; or
19.3.3 TERMINATION AFTER REENTRY. The right of Landlord, even
though it may have reentered the Premises in accordance with Section 19.3.2, to
elect thereafter to terminate this Lease and Tenant's right to possess the
Premises.
Should Landlord reenter the Premises under Section 19.3.2, Landlord shall
not be deemed to have terminated this Lease or to have accepted a surrender
thereof by any such reentry, unless Landlord shall have notified Tenant in
writing that it has so elected to terminate this Lease and Tenant's right of
possession. Tenant further covenants that Landlord's service of any notice
pursuant to the unlawful detainer statutes of the State of Washington and
Tenant's surrender of possession pursuant to such notice shall not (unless
Landlord elects to the contrary at the time of, or at any time subsequent to,
the serving of such notice and such election is evidenced by a notice to Tenant)
be deemed to be a termination of this Lease. In the event of any reentry or
taking of possession of the Premises as provided above in this Section 19,
Landlord shall have the right, but not the obligation, to remove from the
Premises all or any part of Tenant's property located in the Premises and to
place such property in storage at a public warehouse at the expense and risk of
Tenant.
19.4 LANDLORD'S DAMAGES. If Landlord terminates this Lease and
Tenant's right to possession of the Premises pursuant to the terms of this
Section 19, Landlord may recover from Tenant as damages, all of the following:
19.4.1 DELINQUENT RENT. The worth at the time of award of any
unpaid Rent earned at the time of such termination;
19.4.2 RENT AFTER TERMINATION UNTIL JUDGMENT. The worth at the
time of award of the amount by which the unpaid Rent that would have been earned
after termination until the time of award exceeds such rent loss that Tenant
proves could have been reasonably avoided;
19.4.3 RENT AFTER JUDGMENT. The worth at the time of award of
the amount by which the unpaid Rent for the balance of the Lease Term after the
time of award exceeds the amount of such rent loss that Tenant proves could be
reasonably avoided;
19.4.4 LEASING CONCESSIONS. The unamortized portion of any
financial concessions incurred by Landlord on Tenant's behalf to arrange for
Tenant's leasing of the Premises that Landlord conditionally waived at the
commencement of the Lease in consideration of Tenant's full performance of this
Lease, but which upon termination of the Lease pursuant to this Section 19 shall
accrue as rent, which costs include, but are not limited to, leasing
commissions, tenant allowances and improvements (including without limitation,
the cost of any improvements to the Premises by Landlord pursuant to Exhibit C),
"free rent" allowances and other such concessions in this Lease, amortized on a
straight-line basis over the number of months during the Lease Term in which
Tenant is obligated to pay Base Rent, and such amounts shall become immediately
due and payable as Rent earned at the time of such termination of the Lease;
19.4.5 OTHER COMPENSATION. Any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its
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obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including, without limitation, any cost or expense
incurred by Landlord in (i) retaking possession of the Premises, including
reasonable attorney fees therefor, (ii) maintaining or preserving the Premises
after such default, (iii) preparing the Premises for reletting to a new tenant,
including repairs necessary to the Premises for such reletting, (iv) leasing
commissions, limited to those years remaining in the initial term, and (v) any
other costs necessary or appropriate to relet the Premises; and
19.4.6 ADDITIONAL OR ALTERNATIVE DAMAGES. At Landlord's
election, such other amounts in addition to or in lieu of the foregoing in this
Section 19.4 as may be permitted from time to time by the laws of the State of
Washington; and
19.4.7 CALCULATION OF DAMAGES. As used in Sections 19.4.1 and
19.4.2, the "worth at the time of award" is to be computed by allowing interest
at the rate specified in Section 4.2. As used in Section 19.4.3, the "worth at
the time of award" is computed by discounting such amount at a discount rate
equal to six percent (6%) per year or the maximum rate allowed by any usury or
similar law, if any, of the State of Washington applicable to Tenant, whichever
is less. All Rent, other than Base Rent, shall, for the purposes of calculating
any amount due under the provisions of Section 19.4.3 be computed on the basis
of the average monthly amount thereof accruing during the immediately preceding
sixty (60) month period, except that if it becomes necessary to compute such
rent before such a sixty (60) month period has occurred, then such rent shall be
computed on the basis of the average monthly amount hereof accruing during such
shorter period.
19.5 FIXTURES. Without limiting any of Landlord's rights under this
Lease, in the event of Tenant's default, Tenant's property specified on Exhibit
C-l and any other property which pursuant to the terms of this Lease may be
removed by Tenant at the termination of this Lease shall (i) remain on the
Premises and continuing during the length of such default Landlord shall have
the right to take the exclusive possession of such property and to use such
property free of rent or charge until all defaults have been cured, (ii) be
removed by Landlord from the Premises and placed in storage at a public
warehouse at the expense and risk of Tenant, or (iii) be removed by Tenant upon
demand by Landlord.
19.6 NO WAIVER. The waiver by Landlord of any breach of any term,
covenant or condition contained in this Lease shall not be deemed to be a waiver
of such term, covenant or condition or any subsequent breach thereof, or of any
other term, covenant or condition contained in this Lease. Landlord's
subsequent acceptance of partial rent or performance by Tenant shall not be
deemed to be an accord and satisfaction or a waiver of any preceding breach by
Tenant of any term, covenant or condition of this Lease or of any right of
Landlord to a forfeiture of the Lease by reason of such breach, regardless of
Landlord's knowledge of such preceding breach at the time of Landlord's
acceptance. No term, covenant or condition of this Lease shall be deemed to
have been waived by Landlord unless such waiver is in writing and signed by
Landlord.
19.7 WAIVER OF NOTICE. Notwithstanding anything to the contrary in
this Section 19, Tenant waives (to the fullest extent permitted under law) any
written notice, other than such notice as this Section 19 or any other provision
of this Lease specifically requires, which any statute or law now or hereafter
in force prescribes be given Tenant.
19.8 WAIVER OF REDEMPTION RIGHTS. Tenant, for itself, and on behalf
of any and all persons claiming through or under it, including creditors of all
kinds, does hereby waive and surrender all right and privilege which they or any
of them might have under or by reason of any present or future law, to redeem
the Premises or to have a continuance of this Lease for the term hereof, as it
may have been extended, after having been dispossessed or ejected therefrom by
process of law or under the terms of this Lease or after the termination of this
Lease as herein provided.
19.9 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 any mortgagee whose name
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and address has been provided to Tenant in writing ("Mortgagee"); 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 30-day period and
thereafter diligently prosecutes the same to completion. Any mortgagee may also
cure such default within the above time period. If Landlord fails to cure any
such default within the allotted time, Tenant may, with reasonable written
notice, undertake cure of such default itself and Landlord shall pay the
reasonable cost thereof on demand.
20. SUBORDINATION AND ATTORNMENT. This Lease shall be subordinate to any
mortgage or deed of trust now existing or hereafter placed upon the Land, the
Building or the Premises, created by or at the instance of Landlord, and to any
and all advances to be made thereunder and to interest thereon and all
modifications, renewals and replacements or extensions thereof ("Landlord's
Mortgage"); provided, however, that the holder of any Landlord's Mortgage or any
person or persons purchasing or otherwise acquiring the Land, Building or
Premises at any sale or other proceeding under any Landlord's Mortgage may elect
to continue this Lease in full force and effect and, in such event, Tenant shall
attorn to such person or persons. Notwithstanding the foregoing, if a lender
requires that the Lease be subordinate to any mortgage recorded after the date
the Lease affecting the Property, the Lease shall be subordinate to such
mortgage if Landlord first obtains from such lender a written statement
providing that so long as Tenant performs its obligations under the Lease, no
foreclosure of, deed given in lieu of foreclosure of, or sale under the
mortgage, and no steps or procedures, taken under the mortgage, shall affect
Tenant's rights under this Lease. Tenant shall execute, acknowledge and deliver
documents which the Holder of any Landlord's Mortgage may require to effectuate
the provisions of this Section 20 within ten (10) days of the date of Landlord's
request therefor. In the event of any transfer of Landlord's interest in the
Premises or in the Property, other than a transfer for security purposes only,
the transferor shall be automatically relieved of any and all obligations and
liabilities on the part of Landlord accruing from and after the date of such
transfer and such transferee shall have no obligation or liability with respect
to any matter occurring or arising prior to the date of such transfer. Tenant
agrees to attorn to such transferee, provided transferee assumes all of
Landlord's responsibilities.
21. REMOVAL OF PROPERTY. Subject to Section 19.5, upon the expiration or
sooner termination of the Lease, Tenant shall remove Tenant's personal property
not permanently affixed to the Premises and as specified on Exhibit C-1, and
shall pay Landlord any damages for injury to the Premises or Property resulting
from such removal. If Tenant fails to remove any such property from the
Premises at the termination of this Lease or when Landlord has the right of re-
entry, Landlord may remove and store said property without liability for loss
thereof or damage thereto, provided Landlord uses commercially reasonable
standards in performance of such removal rights. Such storage shall be for the
account and at the expense of Tenant. If Tenant fails to pay the cost of
storing any such property after it has been stored for a period of thirty (30)
days or more, Landlord may, at its option, sell, or permit to be sold, any or
all such property at public or private sale, in such manner and at such times
and places as Landlord in its sole discretion may deem proper, without notice to
Tenant, unless notice is required under applicable statutes, and shall apply the
proceeds of such sale first, to the cost and expense of such sale, including
reasonable attorneys' fees actually incurred; second, to the payment of the
costs or charges for storing any such property; third, to the payment of any
other sums of money which may then be or thereafter become due Landlord from
Tenant under any of the terms of this Lease; and, fourth, the balance, if any,
shall be paid to Tenant.
22. CONDEMNATION.
22.1 ENTIRE TAKING. If all of the Premises, or such portion of the
Building as may be required for the reasonable use of the Premises, in
Landlord's determination, are taken by eminent domain, this Lease shall
automatically terminate as of the date title vests in the condemning authority
and all Rent, Additional Rent and other payments shall be paid to that date.
22.2 CONSTRUCTIVE TAKING OF ENTIRE PREMISES. In the event of a
taking by eminent domain of a material part of but less than all of the
Building, if Landlord determines that
21
the remaining portions of the Building cannot be economically and effectively
used by it (whether on account of physical, economic, aesthetic or other
reasons) or if Landlord determines the Building should be restored in such a way
as to materially alter the Premises, then Landlord shall forward a written
notice to Tenant of such determination not more than sixty (60) days after the
date of taking. The term of this Lease shall expire upon the date specified by
Landlord in such notice but not earlier than sixty (60) days after the date of
such notice.
22.3 PARTIAL TAKING. Subject to the provisions of the preceding
Section 22.2, in case of taking by eminent domain of a part of the Premises, or
a portion of the Building not required for the reasonable use of the Premises,
then this Lease shall continue in full force and effect and the Rent shall be
equitably reduced based on the proportion by which the floor area of the
Premises is reduced, such Rent reduction to be effective as of the date title to
such portion vests in the condemning authority. If more than twenty-five
percent (25%) of the Premises is taken and Landlord cannot replace such space
with space in the Building which is mutually acceptable to Landlord and Tenant,
then with sixty (60) days written notice by either party, Landlord or Tenant
shall have the right to terminate this Lease.
22.4 AWARDS AND DAMAGES. Landlord reserves all rights to damages to
the Premises for any partial, constructive, or entire taking by eminent domain,
and Tenant hereby assigns to Landlord any right Tenant may have to such damages
or award, and Tenant shall make no claim against Landlord or the condemning
authority for damages for termination of the leasehold interest or interference
with Tenant's business. Tenant shall have the right, however, to claim and
recover from the condemning authority compensation for any loss to which Tenant
may be put for Tenant's moving expenses, business interruption, loss of
goodwill, or taking of Tenant's personal property (not including Tenant's
leasehold interest) provided that such damages may be claimed only if they are
awarded separately in the eminent domain proceedings and not out of or as part
of the damages recoverable by Landlord.
23. NOTICES. All notices under this Lease shall be in writing and
delivered in person or sent by registered or certified mail, postage prepaid, or
by facsimile, to Landlord and to Tenant at their respective Notice Addresses set
forth in Section 1.16 (provided that after the Commencement Date any such notice
shall be mailed, delivered by hand or transmitted by facsimile to Tenant at the
Premises) or such other addresses as may from time to time be designated by any
such party in writing. Notices mailed as provided in this Section shall be
deemed given and received on the date that is Three (3) business days following
the date of post xxxx, in the case of mailing, or the date of transmission
confirmation by the sender's facsimile machine, in the case of facsimile
transmission.
24. COSTS AND ATTORNEYS' FEES. If Tenant or Landlord bring any action
for any relief against the other, declaratory or otherwise, arising out of this
Lease, each party shall, and hereby does to the extent permitted by law, waive
trial by jury and the losing party shall pay the substantially prevailing
party's attorneys' fees in connection with such suit, at trial and on appeal,
and such attorneys' fees shall be deemed to have accrued on the commencement of
such action.
25. LANDLORD'S LIABILITY. Notwithstanding anything in this Lease to the
contrary, covenants, undertakings and agreements herein made on the part of
Landlord in this Lease are made and intended not as personal covenants,
undertakings and agreements for the purpose of binding Landlord personally or
the assets of Landlord except Landlord's interest in the Premises and Building
and rents and proceeds thereof, but are made and intended for the purpose of
binding only the Landlord's interest in the Premises and Building, as the same
may from time to time be encumbered. No personal liability or personal
responsibility is assumed by Landlord, nor shall at any time be asserted or
enforceable against Landlord or its heirs, legal representatives, successors or
assigns on account of the Lease or on account of any covenant, undertaking or
agreement of Landlord in this Lease.
26. LANDLORD'S CONSENT. Except as may be provided otherwise in this
Lease, whenever Landlord's consent is required under this Lease, such consent
shall not be unreasonably withheld, conditioned or delayed, provided, however,
Landlord's withholding of consent due to any mortgagee's refusal to grant its
consent shall not be deemed unreasonable.
22
27. ESTOPPEL CERTIFICATES. Tenant shall, from time to time upon the
written request of Landlord, execute, acknowledge and deliver to Landlord or its
designee a written statement stating: the Effective Date, Commencement Date and
Expiration Date, the date the term commenced and the date Tenant accepted the
Premises; the amount of Base Rent and the date to which such Base Rent has been
paid; and certifying such additional information as may be requested by
Landlord. It is intended that any such statement delivered pursuant to this
Section may be relied upon by a prospective purchaser of Landlord's interest or
assignee of any mortgage upon Landlord's interest in the Building. If Tenant
shall fail to respond within ten (10) days of receipt by Tenant of a written
request by Landlord as herein provided, Tenant shall be deemed to have given
such certificate as above provided without modification and shall be deemed to
have admitted the accuracy of any information supplied by Landlord to a
prospective purchaser or mortgagee and to have certified that this Lease is in
full force and effect, that this Lease represents the entire agreement between
the parties as to this leasing, that there are no existing claims, defenses or
offsets which Tenant has against enforcement of the Lease by Landlord, that
there are no uncured defaults in Landlord's performance, that the security
deposit is as stated in the Lease, and that not more than one month's Base Rent
or Additional Rent has been paid in advance.
28. RIGHT TO PERFORM. If Tenant fails to pay any sum of money required to
be paid by it under this Lease or fails to perform any other act on its part to
be performed under this Lease, and such failure continues for ten (10) days
after notice thereof by Landlord, Landlord may, but shall not be obligated so to
do, and without waiving or releasing Tenant from any obligations of Tenant, make
such payment or perform any such other act on Tenant's part to be made or
performed as provided in this Lease. Landlord shall have (in addition to any
other right or remedy of Landlord) the same rights and remedies in the event of
the nonpayment of sums due under this Section 28 as in the case of default by
Tenant in the payment of Rent.
29. PARKING. Landlord shall provide, at no cost to Tenant for the term of
this Lease, Tenant twenty-five (25) unassigned and five (5) assigned parking
stalls in the parking area(s) servicing the Building, as outlined on Exhibit E.
The assigned parking stalls will be in a mutually agreeable location near the
Tenant's entrance and shall be identified as Tenant's spaces. The provision of
parking stalls under this Lease shall be subject to such rules and regulations
as Landlord and/or Landlord's parking operator may adopt from time to time.
Landlord retains the right to alter such rules and regulations and to relocate
within the area as outlined on Exhibit E, or reconfigure the parking area in
which Tenant's parking stalls are located, with reasonable notice to Tenant, but
Landlord shall at all times continue to provide the designated number of spaces
to Tenant. Tenant shall pay, upon demand by Landlord, Landlord's costs incurred
to stencil any changes to reserved parking stalls provided to Tenant under this
Lease.
30. AUTHORITY. If Tenant is a corporation, each individual executing this
Lease on behalf of Tenant represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of Tenant, in accordance
with a duly adopted resolution of the Board of Directors of Tenant and in
accordance with the bylaws of Tenant, and that this Lease is binding upon Tenant
in accordance with its terms. If Tenant is a partnership, each individual
executing this Lease on behalf of Tenant represents and warrants that he or she
is duly authorized to execute and deliver this Lease on behalf of Tenant, in
accordance with the partnership agreement of Tenant, and that this Lease is
binding upon Tenant in accordance with its terms.
31. GENERAL.
31.1 HEADINGS. Titles to Sections of this Lease are not a part of
this Lease and shall have no effect upon the construction or interpretation of
this Lease.
31.2 HEIRS AND ASSIGNS. All of the covenants, agreements, terms and
conditions contained in this Lease shall inure to and be binding upon the
Landlord and Tenant and their respective heirs, executors, administrators,
successors and assigns.
31.3 NO BROKERS. Except as provided in Section 1, Landlord and
Tenant represent and warrant to one another that they have not engaged any
broker, finder or other
23
person who would be entitled to any commission or fees in respect of the
negotiation, execution or delivery of this Lease and Landlord and Tenant shall
indemnify and hold one another harmless from and against any loss, cost,
liability or expense incurred by the other party as a result of any claim
asserted by any such broker, finder or other person on the basis of any
arrangements or agreements made or alleged to have been made by or on behalf of
Tenant.
31.4 ENTIRE AGREEMENT. This Lease contains all covenants and
agreements between Landlord and Tenant relating in any manner to the leasing,
use and occupancy of the Premises, to Tenant's use of the Building and other
matters set forth in this Lease. No prior agreements or understanding
pertaining to the same shall be valid or of any force or effect and the
covenants and agreements of this Lease shall not be altered, modified or added
to except in writing signed by Landlord and Tenant.
31.5 SEVERABILITY. Any provision of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and the remaining provisions hereof shall nevertheless
remain in full force and effect.
31.6 FORCE MAJEURE. Except for the payment of Rent, time periods
for Tenant's or Landlord's performance under any provisions of this Lease shall
be extended for periods of time during which Tenant's or Landlord's performance
is prevented due to circumstances beyond Tenant's or Landlord's respective
control, including without limitation, strikes, embargoes, shortages of labor or
materials, governmental regulations, acts of God, war or other strife.
31.7 RIGHT TO CHANGE PUBLIC SPACES. Landlord shall have the right at
any time without thereby creating an actual or constructive eviction or
incurring any liability to Tenant therefor, to change the arrangement or
location of such of the following as are not contained within the Premises or
any part thereof: entrances, passageways, doors and doorways, corridors,
stairs, toilets and other public portions of the Property. In no event,
however, shall Landlord diminish any service provided by Landlord under this
Lease, make any change which reduces the area of the Premises, make any change
which, on other than a temporary basis, either changes the character of the
Building from that of an office building or materially interferes with Tenant's
access to and use of the Building.
31.8 GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of Washington.
31.9 BUILDING DIRECTORY. In the event Landlord maintains in the
lobby of Building a directory of tenants, such directory shall include the name
of Tenant and any other names reasonably requested by Tenant in proportion to
the number of listings given to comparable tenants of the Building. Tenant will
also be required to provide suite signage consistent with the Building standard
or subject to Landlord's architects' approval.
31.10 BUILDING NAME. The Building will be known as Riverfront
Technical Park or by such name as Landlord may designate from time to time.
31.11 QUIET ENJOYMENT. Landlord agrees that Tenant, upon paying the
Rent and performing all other terms, covenants and conditions of this Lease to
be performed by Tenant, may quietly have, hold and enjoy the Premises from and
after the Commencement Date until the Expiration Date, subject, however, to the
provisions of Section 11 (Damage Or Destruction), 22 (Condemnation), and to any
sale or Landlord's Mortgage to which this Lease is, or may become, subordinate.
31.12 SURVIVAL. The representations, warranties and indemnification
obligations of the parties to this Lease shall survive the termination or
expiration of this Lease.
IN WITNESS WHEREOF this Lease has been executed the day and year first
above set forth.
24
LANDLORD:
XXXXX CORPORATION
By: /s/ ILLEGIBLE
------------------------------
Date: 4/24/97 Its: EXECUTIVE V.P
----------- -----------------------------
TENANT:
EXODUS COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Date: 4/22/97 Its: Coo/CFO
----------- -----------------------------
25
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _______ day of April, 1997, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn as such,
personally appeared __________________________________, to me known to be the
___________________ of XXXXX CORPORATION, the corporation that executed the
within and foregoing instrument, and acknowledged the 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 authorized to execute said
instrument, and that the seal affixed is the corporate seal of said corporation.
WITNESS my hand and official seal the day and year in this certificate
first above written.
_____________________________________________
Printed Name:___________________________
NOTARY PUBLIC in and for the State of
Washington, residing at
_____________________________________________
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _______ day of April, 1997, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn as such,
personally appeared __________________________________, to me known to be the
_______________ of Exodus Communications, Inc., the corporation that executed
the within and foregoing instrument, and acknowledged the 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/she was authorized to
execute said instrument, and that the seal affixed is the corporate seal of said
corporation.
WITNESS my hand and official seal the day and year in this certificate
first above written.
_____________________________________________
Printed Name:___________________________
NOTARY PUBLIC in and for the State of
California, residing at __________________________
26
EXHIBIT A
TO
LEASE AGREEMENT
LEGAL DESCRIPTION
A-1
[Diagram of Premises]
EXHIBIT B
TO
LEASE AGREEMENT
FLOOR PLAN OF PREMISES
B-1
[Diagram of Premises]
EXHIBIT C
TO
LEASE AGREEMENT
LANDLORD'S WORK AND TENANT'S WORK
I. IMPROVEMENTS PROVIDED BY LANDLORD
Landlord's Work to the Premises shall consist of the following:
1. Build any new demising walls surrounding the Premises, and any common area
corridor necessitated by the location of Exodus in the building.
2. Make available 1,200 amps of connected load electrical service for the
discretionary use of Exodus.
3. Landlord will make available an adequate amount of rooftop space and access
to the roof for the installation of satellite dishes, antenna and other forms of
communications equipment at Tenant's sole expense and maintenance.
4. Landlord will make a second location available for a backup generator. The
location will be in a mutually agreeable location to both Tenant and Landlord,
and will comply with all rules and regulations from the City of Tukwila for
screening. The Tenant will be responsible for all costs associated with said
generator, including the payment for any parking which may be removed to
accommodate the generator.
Except for such Landlord's Work, Landlord shall deliver, and Tenant shall
accept (except as provided for in Section IV. G. below), the Premises in its
"AS-IS" condition and configuration as provided in the Lease. Without limiting
the foregoing, Landlord shall not be required to modify or improve the existing
heating, exhaust, ventilation or air-conditioning equipment, to reinforce or
level the flooring of the Premises or the existing electrical system, to
accommodate Tenant.
II. IMPROVEMENTS BY TENANT/CONSTRUCTED BY LANDLORD'S CONTRACTOR
Design and construction of all improvements in the Premises beyond
Landlord's Work listed in Section I of this Exhibit C shall be provided at
Tenant's expense, subject to Landlord's payment of the Tenant Allowance if any.
III. BUILDING STANDARD IMPROVEMENTS
Landlord will choose the contractor to do Landlord Improvements if any.
IV. CONSTRUCTION OF TENANT IMPROVEMENTS
A. AUTHORIZATION TO PROCEED. Upon completion of Tenant's Final Plans,
Landlord shall provide to Tenant written notice of the price for such
improvements. Within five (5) days of receipt of such price, Tenant shall give
Landlord written authorization to complete the Premises in accordance with such
Final Plans. Tenant may in such authorization delete any or all items of extra
cost; however, if Landlord deems these changes to be extensive, at it option,
Landlord may refuse to accept the authorization to proceed until all changes
have been incorporated in the Final Plans signed by Tenant and written
acceptance of the revised price has been received by Landlord from Tenant. In
the absence of such written authorization to proceed, Landlord shall not be
obligated to commence work on the Premises and Tenant shall be responsible for
any costs due to any resulting delay in completion of the Premises.
B. PAYMENTS. Landlord's contractor shall complete Tenant's improvements
if chosen to do so in accordance with Tenant's approved Final Plans. Tenant
shall pay, within ten (10)
C-1
days after receipt of monthly progress statements from Landlord, the full amount
of such progress billing. Tenant may retain an amount equal to five percent (5%)
of the estimated cost of such improvements from the last payment due before
acceptance of the premises. Final billing shall be rendered and payable within
ten (10) days after acceptance of the Premises by Tenant in accordance with the
terms of the Lease. Retainage pursuant to the terms of this paragraph shall be
payable with such final billing. In the event acceptance of the Premises is
subject to punch list items as provided in the Lease, a portion of the retainage
equal to the cost to complete each outstanding punch list item may be retained
until such punch list item is complete.
C. FINAL PLANS AND MODIFICATIONS. If Tenant shall request any change,
Tenant shall request such change in writing to Landlord and such request shall
be accompanied by all plans and specifications necessary to show and explain
changes from the approved Final Plans. After receiving this information,
Landlord shall give Tenant a written price for the cost of engineering and
design services to incorporate the changes in Tenant's Final Plans. If Tenant
approves such price in writing, Landlord shall have such Final Plans changes
made and Tenant shall promptly pay Landlord for this cost. Promptly upon
completion of such changes in the Final Plans, Landlord shall notify Tenant in
writing of the cost, if any, which shall be chargeable or credited to Tenant for
such change, addition or deletion. The cost for such change, whether chargeable
or credited to Tenant, shall include Landlord coordination fee equal to fifteen
percent (15%) of the amount of such change. Tenant shall within five (5) days
notify Landlord in writing to proceed with such change, addition or deletion.
In the absence of such notice, Landlord shall proceed in accordance with the
previously approved Final Plans before such change, addition or deletion was
requested. Tenant shall also be responsible for any demolition work required as
a result of the change.
D. IMPROVEMENTS CONSTRUCTED BY TENANT, EXCEPT FOR THOSE CONSTRUCTED BY
LANDLORD'S CONTRACTOR. If any work is to be performed in connection with Tenant
Improvements on the Premises by Tenant or Tenant's contractor:
(1) Such work shall proceed upon Landlord's written approval of (i)
Tenant's contractor, (ii) public liability and property damage insurance
satisfactory to Landlord carried by Tenant's contractor, and (iii) detailed
plans and specifications for such work.
(2) All work shall be done in conformity with a valid building
permit when required, a copy of which shall be furnished to Landlord before such
work is commenced, and in any case, all such work shall be performed in
accordance with all applicable governmental regulations. Notwithstanding any
failure by Landlord to object to any such work, Landlord shall have no
responsibility for Tenant's failure to meet all applicable regulations.
(3) All work by Tenant or Tenant's contractor shall be scheduled
through Landlord.
(4) Tenant or Tenant's contractor shall arrange for necessary
utility, hoisting and elevator service with Landlord's contractor and shall pay
such reasonable charges for such services as may be charged by Landlord's
contractor. Tenant shall reimburse Landlord upon demand for any sums expended by
Landlord for examination and approval of plans and specifications for any and
all Alterations. Tenant shall also pay Landlord a sum equal to the costs
incurred by Landlord during any inspection or supervision of any and all
Alterations.
(5) Tenant shall promptly reimburse Landlord for costs incurred by
Landlord due to faulty work done by Tenant or its contractors, or by reason of
any delays caused by such work, or by reason of inadequate clean-up.
(6) Prior to commencement of any work on the Premises by Tenant or
Tenant's contractor, Tenant and Tenant's contractor shall enter into an
indemnity agreement and a lien priority agreement satisfactory to Landlord
indemnifying and holding harmless Landlord and Landlord's contractor for any
liability, losses or damages directly or indirectly from lien claims affecting
the Land, the Building or the Premises arising out of Tenant's or Tenant's
contractor's work or that of subcontractors or suppliers, and subordinating any
such liens to the liens of
C-2
construction and permanent financing for the Building.
(7) Landlord shall have the right to post a notice or notices in
conspicuous places in or about the Premises announcing its non-responsibility
for the work being performed therein.
(8) Notwithstanding the foregoing, Tenant and Tenant's contractor
shall comply with the general conditions for construction, as referenced in
Exhibit F.
E. TENANT'S ENTRY TO PREMISES. Tenant's entry to the Premises for any
purpose, including without limitation, inspection or performance of Tenant
Construction by Tenant's agents, prior to the Commencement Date as specified in
Section 1.6 of the Lease shall be scheduled in advance with Landlord and shall
be subject to all the terms and conditions of the Lease, except the payment of
Rent. Tenant's entry shall mean entry by Tenant, its officers, contractors,
office planner, licensees, agents, servants, employees, guests, invitee, or
visitors.
F. TENANT'S TELEPHONE. Tenant is responsible for Tenant's telephone
service. Tenant shall select Tenant's telephone system and shall coordinate its
installation with the Landlord.
G. LANDLORD'S WARRANTIES. Landlord shall complete any Tenant
Improvements in the Premises, if chosen as the contractor, in a good and
workmanlike manner. All warranties provided with such work shall be assigned to
Tenant.
C-3
EXHIBIT C-1
TO
LEASE AGREEMENT
TENANT'S REMOVABLE PROPERTY
Subject to the terms and conditions of this Lease, the fixtures,
improvements, furniture, equipment and other property of Tenant which may be
removed by Tenant from the Premises at the expiration or earlier termination of
this Lease are as set forth below in this Exhibit C-1. No other improvements,
alterations or property shall be removed from the Premises at the expiration or
termination of this Lease except as may be provided otherwise in the Lease or as
may be agreed upon by Landlord and Tenant and added to this Exhibit C-1 by
amendment to this Lease.
1. Upon the termination or expiration of this Lease Tenant, at Tenant's
expense, shall remove all cabling and wiring included within the scope of
Tenant's Work, Landlord's Work, Tenant's Alterations, or which was otherwise
installed by Tenant, from all interstitial/ceiling plenum areas.
2. Furniture, and personal property.
C-1-1
EXHIBIT D
TO
LEASE AGREEMENT
RULES AND REGULATIONS
1. Any directory provided by Landlord for the Building will be for the display
of the name and location of tenants of the Building, and Landlord reserves
the right to exclude any other names from inclusion in any such directory.
2. Tenant shall not place any new or additional locks on any doors of the
Premises or re-key any existing locks without the prior written consent of
landlord.
3. Landlord reserves the right to exclude or expel from the common areas any
person who, in the sole judgment of Landlord, is intoxicated, under the
influence of drugs or who shall in any manner violate any of these Rules
and Regulations.
4. Tenant shall not do or permit to be done within the Premises, the building
or parking loading or other adjoining common areas, anything which would
unreasonably annoy or interfere with the rights of other tenants of the
Building.
5. Tenant shall not permit its employees or invitees to loiter in or about the
common areas or obstruct any of the parking, truck maneuvering or other
common areas, or to place, empty or throw away rubbish, litter, trash or
material of any nature upon any common areas.
6. No storage of materials, equipment or property of any kind is permitted
outside the Premises unless otherwise approved in writing by Landlord and
any such property may be removed by Landlord at Tenant's risk and expense.
7. Tenant shall not make or permit any use of the Premises which in the sole
judgment of Landlord, may be dangerous to persons or property; permit any
noise, odor or vibrations to emit from the Premises which are objectionable
to Landlord or other occupants of the Building; or to create, maintain or
permit a nuisance or any violation of any regulation of any governmental
agency thereon.
8. Tenant shall not commit or permit to be committed any waste, damage or
injury to the Premises, the Building or parking, loading and other common
areas adjoining and shall promptly notify Landlord in writing of such
waste, damage or injury and repair the same at its expense.
9. Tenant understands that any equipment required for maintenance of the
Premises is Tenant's responsibility and that Landlord has no equipment
available for Tenant's use therefore (e.g. ladders or lifts for re-xxxxxxx,
etc.).
10. Tenant shall use the Premises and shall operate its equipment on the
Premises in a safe and prudent manner, and any damage or cracks occurring
in the floor of the Premises caused by Tenant shall be promptly brought to
the attention of Landlord by written notice and repaired by Tenant at its
expense.
11. Tenant shall not at any time display a "For Rent" sign upon the Premises.
12. Tenant shall be responsible for keeping a copy of the Lease and Landlord's
current rules and regulations upon the Premises.
13. Tenant agrees to cause its employees to park only in such designated areas
as may be designated by Landlord from time to time for employee parking and
shall abide by any rules or regulations concerning parking promulgated by
Landlord, or Landlord's
D-1
agent, from time to time.
14. Tenant shall not waste electricity or water and agrees to cooperate fully
with Landlord to assure the most effective and economical use of utilities
services as may be provided to the Building by Landlord.
15. Tenant shall keep Landlord advised of current telephone numbers of Tenant's
employees who may be contacted in an emergency, i.e., fire, break-in,
vandalism, etc., and shall also post such telephone numbers in a location
which is clearly visible from the exterior of the Premises. If Landlord
shall deem it necessary, in its sole judgment, to respond to such emergency
in Tenant's behalf, Tenant shall pay all costs incurred for services
ordered by Landlord to secure or otherwise protect the Premises and the
contents thereof, including a premium charge for any time spent by
Landlord's employees in responding to such emergency.
16. Tenant shall not smoke, and shall cause its employees, contractors, agents
and invitees to refrain from smoking, in the Building except in such areas
as may be designated as smoking areas by Landlord, if any. In the event
that Tenant desires to allow smoking in its Premises and such smoking is
permitted under applicable laws, then Tenant, at Tenant's sole expense and
subject to the requirements of Section 9 (Improvements And Alterations By
Tenant), shall first take such action as may be necessary to have a smoke
exhaust system installed in the Premises that is acceptable to Landlord.
17. No pets or other animals are permitted on the Property, including the
Premises, at any time except: (i) dogs which are present on the Property or
Premises in their capacity of providing assistance to a disabled person;
and (ii) laboratory animals of tenants leasing laboratory space and
pursuant to terms agreed upon by Landlord in writing prior to such animals
being brought onto the Property.
D-2
