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EXHIBIT 10.14
LEASE AGREEMENT
1. PARTIES. This Lease Agreement (this "Lease"), dated for reference
purposes only, ____________, 1998, is made by and between CHILDREN'S HEALTHCARE
SYSTEM, a Washington non-profit corporation, hereinafter referred to as
"Landlord," and SEAMED, INC., a Delaware corporation, hereinafter referred to as
"Tenant."
2. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, for the term, at the rental, and upon all the conditions set
forth herein, that certain space (herein called "Premises") containing nine
thousand six hundred twenty-eight (9,628) square feet of floor area, in the
building located at 0000 - 000xx Xxxxxx X.X., Xxxxxxx, Xxxxxxxxxx 00000 (the
"Building"), situated on the real estate described in Exhibit A (the
"Property"). The Building and the location of the Premises within the Building
are indicated on the floor plan(s) depicted on Exhibit B attached hereto and
incorporated herein by reference.
3. TERM.
3.1 INITIAL TERM. The Lease term shall commence on the later of
either the date on which Landlord completes Landlord's work as described in
Section 5.1 or this Lease, or May 1, 1998, (the "Commencement Date") and shall
continue for five (5) years unless sooner terminated pursuant to any provision
hereof (the "Initial Term").
In the event Landlord is unable to deliver possession of the Premises
within one hundred eighty (180) days from the date of the execution of this
Lease, Landlord shall not be liable for any damage caused thereby, but in such
event either Tenant or Landlord may cancel this Lease by giving the other Party
written notice within ten (10) days thereafter.
For the purpose of this Lease, the term "Lease Year" shall mean and refer
to that period of twelve (12) full consecutive calendar months beginning with
the first full calendar month of the Term and each subsequent period of twelve
(12) consecutive calendar months during the Term, provided that if the Term
commences on other than the first day of a calendar month, then the initial
fractional month of the Term plus the next succeeding twelve (12) full calendar
months shall constitute the first Lease Year of the Term.
3.2 EXTENSION OPTION. Provided Tenant is not in default under this
Lease, Tenant shall have the option to extend the term of this Lease for one (1)
five (5) year period (the "Extension Term"), upon the same terms and conditions
as contained in this Lease, except for Base Rent which shall be adjusted as set
forth below. To exercise the extension option, Tenant shall give Landlord
written notice at least one hundred eighty (180) days prior to the expiration
date of the Initial Term. At any time after Tenant has exercised its option to
extend this Lease, Tenant and Landlord shall sign and acknowledge a written
memorandum evidencing Tenant's exercise of the option and stating the date to
which the Extension Term will extend and the rental
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rates that will be applicable during such Extension Term. Base Rent for any
Extension Term shall be adjusted to the fair market rental rate for similar
space in similar buildings in the general vicinity of the Premises as reasonably
determined by Landlord. In no event shall Base Rent for the Extension Term be
less than Base Rent during the last Lease Year of the Initial Term.
Notwithstanding anything herein to the contrary, Tenant's option to extend
this Lease for the Extension Term is expressly subject and subordinate to the
rights of HealthTeam Northwest to expand into all or some portion of the
Premises.
4. RENT.
4.1 COMMENCEMENT OF RENT. All rental payments due under this Lease
shall commence on the Commencement Date.
4.2 BASE RENT. Tenant shall pay to Landlord base rent as follows
("Base Rent") during the Initial Term:
Monthly Annual Rent Per Square Foot
Lease Year Installments Annual Rent Per Year
---------- ------------ ----------- ---------------
1-3 $5,500.00 $66,000.00 $6.855
4-5 $6,160.00 $73,920.00 $7.678
Tenant shall pay Base Rent in monthly installments on or before the first
day of every month. Base Rent for any period less than one calendar month shall
be prorated on a daily basis based on a three hundred sixty (360) day year.
4.3 ADDITIONAL RENT. In addition to the Base Rent, Tenant shall pay
to Landlord, as additional rent ("Additional Rent"), all Operating Charges, as
defined in Section 6, and all other amounts to be paid by Tenant hereunder. All
Additional Rent for any period which is for less than one (1) month shall be a
pro rata portion of the monthly rent.
4.4 DEPOSITS. Upon the execution of this Lease, Tenant shall pay to
Landlord the sum of Five Thousand Five Hundred Dollars ($5,500) to be applied
against Base Rent for the first month of the Initial Term. In addition, upon
execution of this Lease, Tenant shall pay to Landlord the sum of Six Thousand
One Hundred Sixty Dollars ($6,160) as a deposit securing Tenant's full
performance of Tenant's obligations under this Lease ("Security Deposit"). In
the event that Tenant fails to pay Base Rent, Additional Rent, or any other
charges due hereunder, Landlord may elect to apply the Security Deposit toward
the payment of such default. Should Landlord elect to apply any portion of the
Security Deposit as provided hereunder, Tenant shall, upon ten (10) days written
notice, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to the full amount stated under this Section 4.4. In no event
shall Tenant be entitled to any interest paid or accrued on the Security
Deposit. If Tenant performs all of Tenant's obligations under this Lease, the
Security Deposit (or so much as has not been applied by Landlord).shall be
returned to Tenant (or, at Landlord's option to the last assignee, if any, of
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Tenant's interest under the Lease) within a reasonable time. Landlord may
transfer the Security Deposit to a purchaser of its interest hereunder. In the
event of such a transfer Tenant shall look solely to such purchaser for return
of the Security Deposit.
4.5 LATE CHARGE. If any payment of rent, Operating Charges or other
amount to be paid by Tenant is not paid by the due date, then there shall be due
as additional rent a late charge in an amount equal to five percent (5%) of the
delinquent payment for each month or partial month that the delinquent payment
remains due and unpaid.
4.6 PAYMENT OF RENT. All rent shall be payable without notice or
demand and without deduction, offset or abatement. All rent payments shall be
sent to Landlord at the address identified in Section 25 of this Lease, or to
such other address as Landlord may from time to time designate.
5. TENANT IMPROVEMENTS.
5.1 LANDLORD'S WORK. Landlord shall complete all items described on
Exhibit C attached hereto and by this reference incorporated herein to this
Lease ("Landlord's Work") at its sole cost and expense in a good workmanlike
manner before delivering the Premises to Tenant. Landlord shall notify Tenant in
writing when the Premises are ready for Tenant's occupancy.
5.2 SUBSEQUENT TENANT IMPROVEMENTS. After Landlord has performed all
Landlord's work as required under Section 5.1, Tenant shall, at its sole cost
and expense, be responsible for the design, construction, and installation of
Tenant's own future leasehold improvements and trade fixtures ("Tenant's
Improvements"), including lights, branch wiring beyond the panel, floor
coverings, interior partitioning, decor, shelves, racks, and counters; provided,
that the design and decor shall be subject to the reasonable approval of
Landlord, and Tenant shall provide Landlord with appropriate design drawings for
approval prior to the construction and installation of Tenant's Improvements.
Landlord agrees to examine Tenant's design drawings on receipt and to notify
Tenant in writing when the same have been approved, and Tenant agrees to
commence Tenant's Improvements promptly, proceed diligently, and complete them
as soon as possible.
All necessary future modifications to plumbing, electrical, and fire and
life safety protection systems within the Premises shall be performed by Tenant
at Tenant's expense by a licensed and insured contractor or other worker
approved by Landlord in writing. In order to maintain all existing roof
warranties, any and all roof penetrations required by Tenant shall be by
Landlord's roofing contractor at Tenant's expense. Tenant agrees, at Tenant's
expense, to obtain and maintain public liability insurance and workers'
compensation insurance adequate to fully protect Landlord as well as Tenant from
and against any and all liability for death of or injury to persons or damage to
property caused in or about, or by reason of, the construction of Tenant's
Improvements. In construction of Tenant's Improvements, Tenant shall conform to
and comply with all federal, state and local laws, ordinances, permits, rules
and regulations applicable thereto. During construction, fixturing and
installation, Tenant at Tenant's expense shall remove
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on a daily basis all trash from the Premises. On completion of construction of
Tenant's Improvements, Tenant shall submit a contractor's affidavit of
completion and waiver of lien to Landlord.
5.3 REMOVAL. All leasehold improvements which cannot be removed
without material damage to the Premises shall, at Landlord's option, become the
property of Landlord upon termination of the Lease. At expiration of the Lease
term or earlier termination as herein provided, Tenant shall promptly remove all
Tenant's leasehold improvements (other than those which Landlord elects to
retain) and shall repair all damage occasioned by such removal and remove all
dirt, trash and debris from the Premises.
6. OPERATING CHARGES. As used herein, "Tenant's Share" shall be equal to
seventeen and 1/4 percent (17.25%) which is the ratio of the total area of the
Premises including any mezzanines (nine thousand six hundred twenty-eight
(9,628) square feet), to the total rentable area of the Building (fifty-five
thousand eight hundred seven (55,807) square feet). In addition to the Base Rent
provided for hereunder, and commencing at the same time as Base Rent commences
under this Lease, Tenant shall pay as additional rent to Landlord Tenant's Share
of the following items, herein called "Operating Charges":
6.1 TAXES AND INSURANCE. All real estate taxes and insurance
premiums related to the Property, including land, building, and improvements
thereon. Real estate taxes shall include all real estate taxes and assessments
that are levied upon and/or assessed against the Property, including any taxes
which may be levied on rents. Insurance shall include all insurance premiums for
fire or other hazard with all-risk extended coverage, including special perils,
liability, loss of income due to business interruption or loss of rentals, and
any other insurance that Landlord deems necessary on the Property.
6.2 COMMON AREA MAINTENANCE. The total cost of the following items:
6.2.1 Maintenance, repair and replacement of parking lots,
sidewalks, driveways, landscaping, lobbies, restrooms and other areas used in
common by the tenants of the Building, and of exterior walls (including periodic
painting thereof), roofs and foundations.
6.2.2 Maintenance, illumination, operation and repair of
common signs for the Property;
6.2.3 Repair and maintenance of utility services, including
without limitation water, gas and electrical mains, and sanitary and storm
sewers, surface water management and drainage systems, telephone and
telecommunications lines; and
6.2.4 A management fee to Landlord (or a third party property
manager) for management and supervision of the Property, an amount equal to four
percent (4%) of the total gross revenues derived from the Property;
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6.3 UTILITIES. All water, gas, heat, light, power, sewer, garbage
collection, telephone and telecommunications service and all other services and
utilities supplied to the Premises together with any taxes thereon; provided,
however, that if any utility services are separately metered and/or billed to
Tenant, Tenant shall pay for such services as and when billed and will indemnify
Landlord against and hold Landlord harmless from any and all loss, cost, damage
or expense, including reasonable attorneys' fees suffered or incurred by
Landlord in connection therewith.
Upon commencement of the Lease term, Landlord shall advise Tenant of
Tenant's pro rata share through the end of the period for which the taxes or
insurance premiums have been prepaid and Tenant shall pay the amount thereof
concurrently with payment of the first month's rent; and Landlord also shall
submit to Tenant a statement of all other anticipated monthly Operating Charges
for the period between such commencement and the following January, and Tenant
shall pay these Operating Charges on a monthly basis concurrently with the
payment of the rent, beginning with the first payment of rent. By March 1 of
each year, Landlord shall provide Tenant a statement showing the total Operating
Charges for the Property for the prior calendar year and Tenant's allocable
share thereof, pro rated from the commencement of the Lease term, if
appropriate. In the event the total of the monthly payments which Tenant has
made for the prior calendar year is less than Tenant's actual share of such
Operating Charges, then Tenant shall pay the difference in a lump sum within ten
(10) days after receipt of such statement from Landlord. In the event that the
total monthly payments exceed Tenant's actual share, Tenant shall receive credit
against the next payment of Additional Rent due.
Also, by March 1 of each year (the "current year"), Landlord shall submit
to Tenant a statement of the budgeted Operating Charges for the current year, as
reasonably established by Landlord. Tenant shall then pay Landlord the
difference between the prior established Operating Charges and the budgeted
current Operating Charges for the months which have passed since the first of
the current year and shall continue to pay the budgeted current Operating
Charges for the remainder of the current year, subject to adjustment by March 1
of the following year in the manner provided above. Even though the term has
expired and Tenant has vacated the Premises, when the final determination is
made of Tenant's share of said Operating Charges for the year in which this
Lease terminates, Tenant shall immediately pay any increase due over the
estimated Operating Charges previously paid, and, conversely, any overpayment
made shall be promptly rebated by Landlord to Tenant. Failure of Landlord to
submit statements as called for herein shall not be deemed to be a waiver of
Tenant's requirement to pay sums as herein provided.
Landlord estimates that Tenant's Share of Operating Charges shall be Two
and 40/100 Dollars ($2.40) per square foot of rentable area in the Premises per
year. Notwithstanding anything herein to the contrary, Landlord agrees that
Tenant's Share of Additional Rent attributable to Operating Charges for the
first full Lease Year shall not exceed Two and 76/100 Dollars ($2.76) per square
foot of rentable area in the Premises per year.
7. USE. The Premises shall be used and occupied only for storing and
warehousing medical devices and equipment that Tenant makes available for lease
or sale in the ordinary course of Tenant's business. Tenant shall not use the
Premises for any other purpose without the
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prior written consent of Landlord. No act shall be done in or about the Premises
that is unlawful or that will increase the rate of insurance on the Building.
Tenant shall not commit or allow to be committed any waste upon the Premises or
any public or private nuisance or other act or thing which disturbs the quiet
enjoyment of any other tenants in the Business Park. Tenant shall comply with
all laws relating to its use of the Premises (including, without limitation, the
Americans with Disabilities Act and regulations promulgated thereunder) and
shall observe such reasonable rules and regulations as may be adopted and
published by Landlord for the safety, care, and cleanliness of the Premises
and/or the Building for the preservation of good order therein.
8. MAINTENANCE, REPAIRS AND ALTERATIONS.
8.1 LANDLORD'S OBLIGATIONS. Subject to the provisions of. Sections
8.2 and 10 and except for damage caused by the negligence or intentional act or
omission of Tenant or Tenant's agents, employees or invitees, Landlord shall
keep in good order, condition and repair the common areas of the Building and
the Property and the foundations and structural portions of the exterior walls
and exterior roof of the Building, all bathrooms located on the Premises, and
the HVAC system for the Building; and the cost thereof shall be charged to
Tenant on a pro rata basis under the provisions of Section 6.2 hereof. Landlord
shall not, however, be obligated to maintain plate glass or the interior surface
of the ceiling, walls, windows or doors on the Premises; provided, that if
Landlord does perform such maintenance, it shall be at the expense of Tenant,
and the cost thereof shall be charged to Tenant on a pro rata basis under the
provisions of Section 6.2 hereof. Landlord shall have no obligation to make
repairs under this Section 8.1 until a reasonable time after receipt of written
notice of the need for such repairs.
8.2 TENANT'S OBLIGATIONS. Subject to the provisions of Sections 8.1,
8.2 and 10, Tenant, at Tenant's expense, shall keep in good order, condition and
repair the Premises and all Tenant Improvements, including but not limited to
plumbing, mechanical or electrical apparatus, doors, window frames, hardware,
glass, and nonstructural ceilings and walls. Tenant shall provide and maintain,
at Tenant's expense, a security system for the Premises that Landlord deems
acceptable. Tenant shall also provide its own janitorial services and shall
replace all light bulbs and robes for the Premises. Tenant shall, at the
expiration or termination of this Lease, surrender and deliver the Premises to
Landlord in as good condition as when received by Tenant from Landlord or as
thereafter improved, reasonable use and wear excepted. Tenant shall repair any
damage to the Premises or the Building occasioned by its use thereof or by the
removal of Tenant's trade fixtures, furnishings and equipment, which repair
shall include, without limitation, the patching and filling of holes and repair
of structural damage.
8.3 LANDLORD'S RIGHTS. If Tenant fails to perform Tenant's
obligations hereunder relating to the repair, maintenance or upkeep of the
Premises or the Building, Landlord may, at its option (but shall not be required
to), enter upon the Premises after three (3) days prior written notice to Tenant
and put the same in good order, condition, and repair or otherwise cure the
default, and the cost of such action plus fifteen percent (15%) thereof shall
become due and payable as additional rent to Landlord at the time Tenant's next
rental installment is due.
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8.4 ALTERATIONS AND ADDITIONS. Tenant shall not make any
alterations, additions or improvements in the Premises without Landlord's prior
written consent, which may be withheld in Landlord's discretion. As a condition
to giving such consent, Landlord may require that Tenant remove any such
alterations, improvements, additions or utility installations at the expiration
of the term and restore the Premises to their prior condition. All work on the
Premises shall be done in compliance with all applicable governmental codes and
regulations. At Landlord's option, all alterations, improvements or additions
which may be made on the Premises shall become the property of Landlord and
remain upon and be surrendered with the Premises at the expiration of the term.
If Landlord elects not to have the improvements become Landlord's property, then
Tenant shall remove such improvements and shall restore Premises to the
condition at the Commencement Date. Tenant's machinery, equipment, and trade
fixtures other than those which are affixed to the Premises so that they cannot
be removed without material damage to the Premises shall remain the property of
Tenant and may be removed by Tenant, subject to the provisions of Section 8.2
and 10.
9. INSURANCE; INDEMNITY
9.1 LIABILITY INSURANCE. Tenant shall maintain in force during the
term of this Lease a policy of comprehensive public liability insurance issued
by a company acceptable to Landlord and insuring Tenant and Landlord against any
liability, including without limitation personal injury to any person and damage
to other portions of the Business Park, arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be in an amount of not less than Two Million Dollars
($2,000,000) combined simple limit for personal injury and property damage, or
in such higher amount as Landlord may reasonably require to reflect the
inflation rate in the area. The limits of said insurance shall not, however,
limit the liability of Tenant hereunder. Such policies shall name Landlord and
Landlord's agents as additional insureds and shall provide that they may not be
cancelled or changed materially without fifteen (15) days prior written notice
to Landlord. Landlord shall be furnished with a certificate evidencing issuance
of such policy of liability insurance, which certificate shall recite that the
policy may not be cancelled or changed materially without such prior written
notice to Landlord. If Tenant shall fail to maintain said insurance, Landlord
may but shall not be required to procure and maintain the same, at the sole
expense of Tenant.
9.2 PROPERTY INSURANCE.
9.2.1 LANDLORD'S OBLIGATION. Landlord shall maintain in force
during the term of this Lease a policy of insurance insuring the Building for an
amount not less than replacement cost against damage or destruction by fire
and/or by perils covered by the standard form of extended coverage endorsements
to fire insurance policies in the State of Washington in effect at the time when
the policies are obtained, with vandalism and malicious mischief endorsements.
Said policies shall also cover loss of income due to business interruption or
loss of rental. Tenant shah pay Tenant's proportionate share of the premiums on
any such policies, as provided in Section 6.1.
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9.2.2 TENANT'S OBLIGATION. Tenant shall maintain in force
during the term of this lease a policy of insurance issued by a company
acceptable to Landlord insuring Tenant's fixtures, equipment, leasehold
improvements, and any other personal property of Tenant located on the Premises
in the amount of their full replacement value. If Tenant shall fail to maintain
said insurance, Landlord may but shall not be required to procure and maintain
the same, at Tenant's sole expense.
9.3 WAIVER OF SUBROGATION. Landlord and Tenant hereby mutually waive
their respective rights of recovery against each other for any property loss
insured by fire and extended coverage, or other property insurance policies
existing for the benefit of the respective parties, each such waiver to be
effective only to the extent it does not invalidate the insurance afforded by
the waiving party's insurance policy.
9.4 HOLD HARMLESS. Tenant shall indemnify, defend, and hold Landlord
harmless from any and all claims arising from Tenant's use of the Premises or
from the conduct of its business or from any activity, work, or thing which may
be permitted or suffered by Tenant in or about the Premises and shall further
indemnify, defend, and hold Landlord harmless from and against any and all
claims arising from any breach or default in the performance of any obligation
on Tenant's part to be performed under the provisions of this Lease or arising
from any negligence of Tenant or any of its agents, contractors, employees or
invitees and from any and all costs, attorneys' fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon. Tenant hereby assumes all risk of damage to property or injury to
persons in or about the Premises from any cause, and Tenant hereby waives all
claims in respect thereof against Landlord, excepting where said damage arises
solely out of the negligence of Landlord.
9.5 EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be
liable for injury to Tenant's business or any loss of income therefrom or for
damage to the goods, wares, merchandise or other property of Tenant or Tenant's
employees, invitees, customers, or any other person in or about the Premises;
nor, unless caused solely by its negligence, shall Landlord be liable for
personal injury to Tenant or Tenant's employees, agents, contractors and
invitees, whether said damage or injury results from conditions arising upon the
Premises or upon other portions of the Building or the Property or from other
sources or places, and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible to Landlord or Tenant.
Landlord shall not be liable for any damages arising from any act or neglect of
any other Tenant, if any, of the Building.
10. DAMAGE OR DESTRUCTION. In the event the Premises are destroyed or are
damaged such that twenty-five percent (25%) or more of the rentable area in the
Premises is rendered untenantable, then it shall be optional with Landlord to
repair or rebuild the same, but in no event shall Landlord be required to repair
or rebuild any Tenant's Improvements, which shall remain the responsibility of
Tenant; and after the happening of any such event, Tenant shall give landlord or
Landlord's agent immediate written notice thereof. Landlord shall have thirty
(30) days after the date of such notification to notify Tenant in writing of
Landlord's intentions to repair or rebuild the Premises or the part so damaged
as aforesaid, and if Landlord elects to repair
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or rebuild the Premises, Landlord shall prosecute the work of such repairing or
rebuilding without unnecessary delay, and during such period the Base Rent shall
be abated in the same ratio that that portion of the Premises rendered for the
time being unfit for occupancy shall bear to the whole of the Premises. If
Landlord shall fail to give the notice aforesaid, Tenant shall have the right to
declare this Lease terminated by written notice served upon Landlord.
If the Building is damaged (even though the Premises hereby leased shall
not be damaged thereby) to such extent that, in the opinion of Landlord, it
shall not be practicable to repair or rebuild, or is destroyed, then it shall be
optional with Landlord to terminate this Lease by written notice served on
Tenant within thirty (30) days after such damage or destruction.
If the Premises are partially damaged or destroyed such that less than
twenty-five percent (25%) of the rentable area of the Premises is rendered
untenantable, then Landlord shall restore the same with reasonable promptness,
excluding any Tenant's Improvements, which shall be the responsibility of
Tenant, and all insurance proceeds received by Landlord pursuant to the
provisions of this Lease, less the cost of recovery of such proceeds, if any,
shall be held in trust and applied to the payment of such restoration as such
restoration progresses; provided, however, that there shall be no abatement,
diminution or reduction of rent in the event of such damage to or destruction of
the Premises while Tenant restores the Premises. Notwithstanding the foregoing
Landlord's obligation to restore the Premises shall be limited to the extent of
the insurance proceeds available to Landlord for such restoration (less any
amounts claimed by the holder of any first mortgage or the beneficiary of any
first deed of trust coveting the Premises), and Landlord shall have no
obligation to restore the Premises if such damage or destruction occurs during
the last two (2) years of the Lease term.
11. ADVERTISING AND WINDOWS. Tenant shall comply with all rules and
specifications that Landlord shall from time to time promulgate and/or modify
with respect to signs on the Premises or Building, and shall not place any sign
on the Premises or Building without the approval and consent of Landlord, which
may be withheld in Landlord's discretion. Any such approval or consent by
Landlord shall be upon the understanding and condition that Tenant will remove
the same at the expiration or sooner termination of this Lease and that Tenant
shall repair any damage to the Premises or the Building caused thereby. Tenant
shall use window coverings that conform to standards set by Landlord.
12. PERSONAL PROPERTY TAXES. Tenant shall pay or cause to be paid before
delinquency any and all taxes levied or assessed and which become payable during
the term hereof upon all Tenant's leasehold improvements, equipment, furniture,
fixtures, and any other personal property located in the Premises. In the event
any or all of Tenant's leasehold improvements, equipment, furniture, fixtures,
and other personal property shall be assessed and taxed with the Property,
Tenant shall pay to Landlord its shares of such taxes within ten (10) days after
delivery to Tenant by Landlord of a statement in writing setting forth the
amount of such taxes applicable to Tenant's property.
13. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
the rules and regulations that Landlord shall from time to time promulgate
and/or modify. The rules and
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regulations shall be binding upon Tenant upon delivery of a copy to Tenant.
Landlord shall not be responsible to Tenant for the nonperformance of any of
said rules and regulations by any other tenants or occupants.
14. LIENS AND INSOLVENCY. Tenant shall keep the Premises, the Building and
the Property free from any liens arising out of any work performed, materials
ordered or obligations incurred by Tenant, and shall indemnify and defend
Landlord against and hold Landlord harmless from any loss, damage or expense,
including attorneys' fees, resulting therefrom. Tenant shall have no authority,
express or implied, to create or place any lien or encumbrance of any kind or
nature whatsoever upon, or in any manner to bind, the interest of Landlord in
the Premises or to charge the rentals payable hereunder for any claim in favor
of any person dealing with Tenant, including those who may furnish materials or
perform labor for any construction or repairs, and each such claim shall affect
and each such lien shall attach to, if at all, only the leasehold interest
granted to Tenant by this instrument. If Tenant becomes insolvent or voluntarily
or involuntarily bankrupt or if a receiver, assignee, or other liquidating
officer is appointed for the business of Tenant and if the receivership,
assignment, or other liquidating action is not terminated within thirty (30)
days of any such appointment, then to the extent permitted under applicable law
Landlord may terminate this Lease and Tenant's right of possession under this
Lease at Landlord's option.
15. DEFAULTS. The occurrence of any one or more of the following events
shall constitute a default of this Lease by Tenant:
15.1 VACATION OF PREMISES. The vacating or abandonment of the
Premises by Tenant.
15.2 FAILURE TO PAY RENT OR ADDITIONAL CHARGES. Notwithstanding the
provision for late charges, the failure by Tenant to make any payment of rent or
any other payment required to be made by Tenant hereunder as and when due, and
such failure shall continue for a period of three (3) days after written notice
thereof by Landlord to Tenant.
15.3 FAILURE TO PERFORM COVENANTS. The failure by Tenant to observe
or perform any of the covenants, conditions, or provisions of this Lease to be
observed or performed by Tenant, other than described in Section 15.2 above,
where such failure shall continue for a period of ten (10) days after written
notice thereof by Landlord to Tenant; provided, however, that if the nature of
Tenant's default is such that more than ten (10) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant
commences such cure within said ten- (10-) day period and thereafter diligently
prosecutes such cure to completion.
16. REMEDIES ON DEFAULT. In the event of any such default by Tenant,
Landlord may, at any time thereafter, in its sole discretion, with or without
notice or demand and without limiting Landlord in the exercise of any other
right or remedy which Landlord may have by reason of such default:
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16.1 TERMINATION. Terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall thereafter have no further rights hereunder or in the Premises;
provided, however, that upon such termination Landlord shall be entitled to
recover from Tenant all damages incurred by Landlord by reason of Tenant's
default, including but not limited to the cost of recovering possession of the
Premises; expenses of reletting, including necessary renovation and alteration
of the Premises; reasonable attorneys' fees; all accrued and unpaid rent,
Operating Charges and other mounts due from Tenant with interest thereon as
provided herein; the worth at the time of award by the court having jurisdiction
thereof of the amount by which the unpaid rent and other charges and Operating
Charges called for herein for the balance of the term after the time of such
award exceeds the amount of such loss for the same period that Tenant proves
could be reasonably avoided; and that portion of any leasing commission paid by
Landlord and applicable to the unexpired term of this Lease; or
16.2 ENFORCE RIGHTS. Maintain Tenant's right to possession, in which
case this Lease shall continue in effect whether or not Tenant shall have
abandoned the Premises, and Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the rent and any other charges and Operating Charges due or to become due
hereunder with interest as provided herein; or
16.3 OTHER REMEDIES. Pursue any other remedy or remedies now or
hereafter available to Landlord under the laws Or judicial decisions of the
state in which the Premises are located.
17. SUBORDINATION. Tenant agrees that this Lease shall be subordinate to
any first mortgage or first deed of trust now or at any time hereafter
constituting a lien upon the Premises and to any and all advances made or to be
made thereunder, and to the interest thereon, and to all renewals, replacements
and extensions thereof, if the mortgagee or the beneficiary named in such
mortgage or deed of trust agrees therein or in a separate instrument to
recognize this Lease in the event of foreclosure where Tenant is not in default
hereunder and agrees to attorn to the mortgagee or any purchaser at a
foreclosure sale. Upon demand by Landlord, Tenant shall execute and deliver any
documents that may be required by such mortgagees or beneficiaries to further
evidence subordination of this Lease to any such mortgages or deeds of trust,
and shall execute and deliver estoppel certificates as requested by Landlord
from time to time in the standard form of any such mortgagee or beneficiary.
18. CONDEMNATION. If all of the Premises shall be taken by eminent domain
(or by a voluntary conveyance made in lieu of a taking by eminent domain), this
Lease shall automatically terminate as of the date Tenant is required to vacate
or will be deprived of the reasonable use of the Premises, and all rentals and
Operating Charges shall be paid to that date. In the case of a taking of
twenty-five percent (25%) or more of the rentable area of the Premises, Tenant
may, at its election within ten (10) days after receipt of notice of the
proposed taking, terminate this Lease, effective as of entry of a final judgment
or order confirming the taking or delivery of a deed in lieu of a taking by
eminent domain, by giving notice of termination to Landlord; if Tenant does not
terminate this Lease because of a taking of a part of the Premises,
12
this Lease shall continue in full force and effect, and the minimum rental 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 when
possession of such portion is delivered to the condemning authority. In the case
of a taking of fifty percent (50%) or more of the Property, Landlord may, at is
election within sixty (60) days after receipt of notice of the proposed taking,
terminate this Lease, effective as of entry of a final judgment or order
confirming the taking or delivery of a deed in lieu of a taking by eminent
domain, or earlier at Landlord's option, by giving notice of termination to
Tenant. Landlord reserves all rights to damages to the Premises for any 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
for damages for termination of the leasehold interest or for interference with
Tenant's business.
19. PARKING AND COMMON AREAS.
19.1 LANDLORD'S OBLIGATIONS AND RIGHTS. Landlord covenants that the
common areas, parking areas, and loading docks are for the nonexclusive use of
Tenant and other tenants; provided, that the condemnation or other taking by any
public authority or sale or transfer in lieu of condemnation of any or all of
such common and parking areas shall not constitute a violation of this covenant.
Notwithstanding anything herein contained to the contrary, Landlord shall
be entitled to alter the Property services or facilities and the location of
driveways, sidewalks or other common areas, and expand the existing Building or
common areas of the Building, or add new common areas to the Property; and upon
any alteration of the common areas or upon commencement of construction of any
addition or additions to the Building and upon any addition of the new common
areas, Landlord and Tenant shall execute such further and other documents as may
be required to reflect such alterations of the common areas to exclude areas
taken for construction of additional space or to include areas added as new
common areas, as the case may be.
19.2 TENANT'S RIGHTS. Tenant, for the use and benefit of Tenant arid
its agents, employees, customers, licensees, and subtenants approved by
Landlord, shall have the nonexclusive right during the Initial Term and any
Extension Term for ingress, egress and automobile parking, subject to Landlord's
rules and regulations applicable thereto. During the Initial Term and any
Extension Term Landlord shall provide ten (10) unreserved vehicle parking spaces
for use by Tenant and its employees and invitees.
19.3 RULES AND REGULATIONS. Tenant agrees to comply with such
reasonable rules and regulations as Landlord may adopt from time to time for the
orderly and proper operation of common and parking areas. Such rules may include
but shall not be limited to the regulation of the removal, storage and disposal
of Tenant's refuse and other rubbish at the sole cost and expense of Tenant.
20. HAZARDOUS MATERIALS.
20.1 DEFINITIONS.
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20.1.1 ENVIRONMENTAL LAW. The term "Environmental Law" means
any federal, state, local law, statute, ordinance, regulation, or order and all
amendments thereto pertaining to health, industrial hygiene, environmental
conditions or Hazardous Materials.
20.1.2 HAZARDOUS MATERIALS. The term "Hazardous Materials"
shall mean any hazardous or toxic substances, materials or wastes, or pollutants
or contaminants as defined, listed or regulated by any Environmental Law or by
common law decision including, without limitation, chlorinated solvents;
petroleum products or by-products; asbestos; and polychlorinated biphenyl.
20.2 TENANT'S COVENANT. Tenant covenants, represents and warrants to
Landlord that no Hazardous Materials shall be generated, stored, deposited,
disposed of, or released in, on or under the Premises, the Building or the
Property, other than materials used in the ordinary course of Tenant's business
and in full compliance with applicable laws, rules and regulations. Tenant
further represents and warrants that Tenant's improvements and equipment on the
Premises shall not incorporate lead, asbestos or PCBs or any other Hazardous
Material. Tenant shall require each of its employees, agents, contractors,
subcontractors, or any other-person or entity over whom Tenant has supervision
or control or fight of the same to comply with all environmental laws including,
without limitation, any federal, state, local law, statute, ordinance,
regulation or order and all amendments thereto pertaining to health, industrial
hygiene, environmental conditions or Hazardous Materials. Tenant agrees to
indemnify and defend Landlord against and hold Landlord harmless from any loss,
damage, liability, cost or expense, including reasonable attorneys' and
consultants' fees, arising out of any breach of the terms of Section 20 of this
Lease, including without limitation (i) those related to any claims of third
parties for personal injury, property damage, or other harm, and (ii) any
response costs and costs of remedial, restoration or cleanup actions suffered or
incurred by Landlord arising out of or related to such introduction, use or
incorporation of Hazardous Materials in, on or under the Premises by Tenant. The
terms, covenants, representations and warranties contained herein shall survive
the termination or expiration of this Lease.
21. ENERGY CONSERVATION LEGISLATION. In the event that any legislative
enactment or decree of governmental authority shah require changes in the
heating, lighting and electrical systems or the fuel or power source utilized by
such systems, Landlord reserves the right, at any time and from time to time, to
make changes in, additions to, subtractions from, Or rearrangements of the
Premises and the common areas of the Property to accommodate the required
changes to such systems or conversion to a different fuel or power source; and
Landlord reserves the right to install a central heating system to serve all
premises in the Property and to erect, use, and maintain wiring, maim, pipes,
conduits, and other means of distributing heat to the Premises and in and
through the Premises for the benefit of other portions of the Building; and
Landlord and all persons authorized by it shall have the fight, from time to
time, to enter upon the Premises for the purpose of access thereto for
installation, maintenance and repair, and such entry shall not be deemed to be
an interference with Tenant's possession under this Lease, nor shall Tenant make
any claim for damages or indemnification against Landlord by reason of such
changes to the Premises or by reason of the installation, maintenance and repair
of new or
14
alterations to existing systems, nor shall there by any diminution or abatement
of rent by reason thereof. All costs incurred by Landlord pursuant to this
Section shall be charged to Tenant, pro rated in the manner set forth in Section
6 hereof.
22. NONWAIVER. Any waiver of any right or remedy hereunder must be in
writing, signed by the waiving party. Forbearance by Landlord with respect to
any breach of any term, covenant or condition hereof contained shall not be a
waiver of such term, covenant or condition or of any subsequent breach of the
same or any other term, covenant or condition. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent.
23. HOLDING OVER. This Lease shall terminate without further notice at the
expiration of the Lease Term. Any holding over by Tenant without the express
written consent of Landlord shall not constitute the renewal of extension of
this Lease or give Tenant any rights in or to the Premises. In the event of such
a holding over by Tenant without the express written consent of Landlord, the
monthly rent payments to be paid by Tenant shall be subject to increase at the
sole discretion of Landlord in an mount equal to one hundred twenty-five percent
(125%) of the then applicable rental rate; provided, however, no payment of such
increased rental by Tenant shall be deemed to extend or renew the term of this
Lease, and such rental payments shall be fixed by Landlord only to establish the
amount of liability for payment of rent on the part of Tenant during such period
of holding over. In the event Landlord shall give its express written consent to
Tenant to occupy the Premises beyond the expiration of the term, that occupancy
shall be construed to be a month-to-month tenancy upon all the same tern and
conditions as set forth herein unless modified by Landlord in such' written
consent; provided that rent charged during any period of holding over shall be
as stated above.
24. ASSIGNMENT AND SUBLETTING. Tenant shall not assign this Lease nor
sublet the whole or any part of the Premises to any person or entity without the
prior written consent of Landlord, which shall not be unreasonably withheld, and
any such assignment or subletting without such consent shall be void. Landlord
may withhold its consent to any proposed assignment or sublease if Landlord
determines that the use or parking demand of the proposed assignee or sublessee
will have an adverse impact on the Building or other tenants' use and enjoyment
thereof. As used herein the term "assignment" includes without limitation
transfers to a subsidiary or affiliated entity, transfers of interest by or
between individual partners if Tenant is a partnership, transfers of stock by
stockholders if Tenant is a corporation, transfers of membership interests if
Tenant in a limited liability company, and any assignment in connection with any
corporate merger or consolidation. In the event of any such assignment or
sublease, Tenant shall remain at all times primarily liable under this Lease and
Landlord shall be entitled to fifty percent (50%) of the aggregate of all rent
and other consideration paid to Tenant by any assignee or subtenant in excess of
Base Rent due hereunder, and Tenant shall remit to Landlord its share promptly
after Tenant's receipt thereof. In the event Landlord is requested hereunder to
consent to any assignment or sublease, Tenant agrees to reimburse Landlord for
its reasonable
15
out-of-pocket expenses (including attorneys' fees) incurred in connection with
Landlord's review of such request.
25. NOTICES. Whenever a provision is made under this Lease for any demand,
notice, or declaration of any kind, or where it is deemed desirable or necessary
by either party to give or serve any such notice, demand, or declaration to the
other party, it shall be in writing and served either personally or sent by
United States mail, certified, postage prepaid, addressed at the addresses set
forth below or at such address as either party may advise the other ,from time
to time.
To Landlord at: Children's Health Care System -
0000 Xxxx Xxxxx Xxx XX
Xxxxxxx, XX 00000
Attn: General Counsel
To Tenant at: SeaMed, Inc.
00000 X.X. 00xx Xxxxxx
Xxxxxxx, XX 00000
Attn: Facilities
Notices given hereunder shall be deemed to have been given on the date of
personal delivery (or the first business day thereafter if delivered on a
nonbusiness day) or two (2) days after the date of mailing.
26. COSTS AND ATTORNEYS' FEES. In any suit, action or appeal therefrom to
enforce any provision hereof, or to interpret this Lease, the prevailing party
shall be entitled to recover its costs incurred therein including costs of suit,
reasonable attorneys' fees and disbursements of counsel. In addition, if it
becomes necessary for Landlord to employ an attorney by reason of any default on
the part of Tenant where no suit or action is commenced, Tenant agrees to pay on
demand from Landlord all costs or expenses incurred by Landlord in connection
with such default including attorneys' fees.
27. LANDLORD'S ACCESS. Landlord and its agents shall have the right to
enter the Premises at reasonable times for the purpose of inspecting it, showing
it to prospective purchasers or lenders, and making such repairs as Landlord may
deem necessary or desirable. Landlord may, at any time, place on or about the
Premises any ordinary "For Sale" signs and may, during the last ninety (90) days
of the term, place on or about the Premises any ordinary "For Sale or Lease"
signs, without rebate of rent or liability to Tenant.
28. CAPTIONS AND CONSTRUCTION. The titles to the sections of this Lease
are not a part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.
29. REMOVAL OF PROPERTY. If Tenant shall fail to remove any of its
property of any nature whatsoever from the Premises, the Building or the
Property at the term/nation of this Lease or when Landlord has the fight of
reentry, Landlord may, at its option, remove and store
16
said property without liability for loss thereof or damage thereto, such storage
to be for the account and at the expense of Tenant. If Tenant shall not 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 of 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, and shall apply the proceeds of such sale as follows:
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
removing and 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 hereof; and fourth, the balance, if any, to Tenant.
30. SUCCESSORS. This Lease shall apply to and be binding upon Landlord and
its successors and assigns, and Tenant and its heirs, personal representatives,
successors and permitted assigns. This provision shall not limit the prohibition
on assignment and subletting by Tenant.
31. ACCEPTANCE OF PREMISES. Tenant accepts the Premises "As Is" at the
commencement of the term of this Lease, in their then present condition and
subject to all applicable municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Premises. Tenant
acknowledges that neither landlord nor Landlord's agents have made any
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business.
32. SALE OF PROPERTY BY LANDLORD. At closing of any sale of the Property
by Landlord or of a subsequent sale thereof, the purchaser shall be deemed to
have assumed and agreed to carry out all of the covenants and obligations of
Landlord hereunder; and Tenant agrees that Landlord and any subsequent owner of
the Building or Business Park shall be released and discharged from any
liability hereunder arising out of any act or omission occurring after closing
of such sale.
33. TENANT'S STATEMENT. Tenant shall, at any time and from time to time,
upon not less than three (3) days prior written notice from Landlord, execute,
acknowledge and deliver to Landlord a statement in writing (a) certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Lease as so modified is
in full force and effect) and the date to which the rental and other charges are
paid in advance, if any; (b) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder or specifying
what defaults, if any, are claimed; and (c) setting forth the date of
commencement of rents and expiration of the term hereof. Any such statement may
be relied upon by any prospective purchaser or encumbrancer of all or any
portion of the Property.
34. RECORDATION/MEMORANDUM OF LEASE. Tenant shall not record this Lease
without the prior written consent of Landlord. Upon Landlord's request to
Tenant, at any time, the parties will execute and record a memorandum of this
Lease.
17
35. SEVERABILITY. The invalidity or unenforceability of any provision of
this Lease shall not affect the validity or enforceability of any other
provision.
36. ENTIRE AGREEMENT. This Lease sets forth the entire understanding and
agreement of Landlord and Tenant with respect to the Premises and the lease
thereof, and all prior understandings or agreements are merged herein. This
Lease may be amended or modified only in writing signed by both parties.
37. NAME OF BUILDING. In the event Landlord chooses to change the name of
the Building, Tenant agrees that such change shall not affect in any way its
obligations under the Lease, and that, except for the name change, all terms and
conditions of this Lease shall remain in full force and effect. Tenant agrees
further that such name change shall not require a formal amendment to this
Lease, but shall be effective upon Tenant's receipt of written notification from
Landlord of said change.
38. BROKER'S COMMISSION. Tenant represents and warrants that it has
incurred no liabilities of claims for brokerage commissions or finder's fees in
connection with the negotiation and/or execution of this Lease and that it has
not dealt with or has any knowledge of any real estate broker/agent or
salesperson in connection with this Lease other than Xxxx Xxx and Xxxx Xxxx of
Xxxxxx, Xxxxxxx & Xxxxxx, Inc., who represented Tenant. Tenant shall indemnify,
defend, and hold Landlord harmless from and against, all of such liabilities and
claims (including, without limitation, attorneys' fees and costs) made by any
other broker/agent or salesperson claiming to represent Tenant in connection
with this Lease. Upon execution of this Lease Landlord agrees to pay a brokerage
commission to Xxxxxx, Xxxxxxx & Xxxxxx, Inc., for services provided in
connection with this Lease as provided for under a separate agreement between
Landlord and Xxxxxx, Xxxxxxx & Xxxxxx, Inc.
39. LIMITATION OF LANDLORD'S LIABILITY. Notwithstanding anything to the
contrary in this Lease, Landlord makes no personal covenants, undertakings, or
agreements for the purpose of binding Landlord or Landlord's assets except
Landlord's interest in the Property. Any liability incurred by Landlord arising
from its performance or non-performance under this Lease shall not exceed the
value of Landlord's interest in the Property.
The parties hereto have executed this Lease as of the date set forth
above.
LANDLORD: CHILDREN'S HEALTH CARE SYSTEM, a
Washington nonprofit corporation
By /s/ XXXXX X. XXXXXXX
--------------------------------------
Its VP & CFO
-----------------------------------
18
TENANT: SEAMED, INC., a Washington corporation
By /s/ XXXXXX XXXX
--------------------------------------
Its Sr. VP, Operations
-----------------------------------
EXHIBITS:
A Legal Description of Property
B Building and Location of Premises
C Landlord's Work
19
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 7th day of May, 1998, before me, a Notary Public in and for the
State of Washington, personally appeared Xxxxxx X. Xxxxxxx, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person who
executed this instrument, on oath stated that he/she was authorized to execute
the instrument, and acknowledged it as the VP & CFO of CHILDREN'S HEALTH CARE
SYSTEM, a Washington nonprofit corporation, to be the free and voluntary act and
deed of said corporation for the uses and purposes mentioned in the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day
and year first above written.
[signature]
-------------------------------------------
NOTARY PUBLIC in and for the State of
Washington, residing at Mill Creek
My appointment expires 7-1-99
Print Name Xxxxx X. Xxxxxxx
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 27th day of April, 1998, before me, a Notary Public in and for the
State of Washington, personally appeared Xxxxxx Xxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed this instrument, on oath stated that he/she was authorized to execute
the instrument, and acknowledged it as the Sr. VP, Operations of SEAMED, INC., a
Washington nonprofit corporation, to be the free and voluntary act and deed of
said corporation for the uses and purposes mentioned in the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day
and year first above written.
[signature]
-------------------------------------------
NOTARY PUBLIC in and for the State of
Washington, residing at 00000 XX 00xx Xx.
Xxxxxxx, XX 00000
My appointment expires October 30, 2001
Print Name Xxxxx X. Xxxx
