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EXHIBIT 10.21
▇▇▇▇▇▇ ▇▇▇▇▇ INC
▇▇▇ ▇▇▇▇▇▇▇▇▇ TOWER OFFICE LEASE
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ 215 COLUMBIA BUILDING
TEL ▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇-▇▇▇▇
THIS LEASE is made this 20th day of March 1998 by and between PACIFIC
NW TITLE BUILDING, INC., A WASHINGTON CORPORATION ("Landlord"), and ▇▇▇▇▇▇.▇▇▇,
INC., A DELAWARE CORPORATION ("Tenant"), who agree as follows:
1. FUNDAMENTAL TERMS. As used in this Lease, the following capitalized
terms shall have the following meanings:
(a) "Land" means the land on which the Building is located, situated in
the City of Seattle, County of King, State of Washington, which is described on
Exhibit A.
(b) "Building" means the building in which the Premises are located,
commonly known as the 215 Columbia Building, the street address of which is ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(c) "Premises" means that certain space outlined in red in Exhibit B
and located on the third and fourth floors of the Building designated as Suite
400.
(d) "Agreed Areas" means the agreed amount of rentable square feet of
space in the Building and the Premises. Landlord and Tenant stipulate and agree
for all purposes under this Lease that the Building contains approximately
43,840 rentable square feet of space (the "Building Area") and that the Premises
contain approximately 22,820 rentable square feet of space (the "Premises
Area"). Landlord and Tenant further agree that the Building Area may exclude
portions of the Building which are used for other than office purposes, such as
areas used for retail purposes or for storage purposes.
(e) "Tenant's Share" means the Premises Area divided by the Building
Area, expressed as a percentage, which is fifty-two and five one-hundredths
percent (52.05%).
If a portion of the Building is damaged or condemned, or any other
event occurs which alters the number of rentable square feet of space in the
Premises or the Building, then Landlord shall adjust Tenant's Share to equal the
number of rentable square feet of space then existing in the Premises (as
altered by such event) divided by the number of rentable square feet of space
then existing in the Building (as altered by such event).
(f) "Commencement Date" means May 1, 1998, or such earlier date as
provided in Section 4 hereof.
(g) "Expiration Date" means May 31, 1999.
(h) "Term" means the period of time commencing on the Commencement Date
and ending on the Expiration Date, unless sooner terminated pursuant to this
Lease.
(i) "Minimum Monthly Rent" means Twenty-eight Thousand Five Hundred
Twenty-five and 00/100ths Dollars ($28,525.00) per month during the Term of this
Lease:
(j) "Permitted Use" means use for purposes of general
business/administrative offices for an internet- based bookseller.
(k) "Base Year" means the calendar year 1998.
(l) "Prepaid Rent" means Twenty-eight Thousand Five Hundred Twenty-five
and 00/100ths Dollars ($28,525.00).
(m) "Security Deposit" means Twenty-eight Thousand Five Hundred
Twenty-five and no/100ths Dollars ($28,525.00).
(n) "Landlord's Address for Notice" means 215 Columbia Building, c/o
▇▇▇▇▇▇ ▇▇▇▇▇ Inc, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
(o) "Landlord's Address for Payment of Rent" means 215 Columbia
Building, c/o ▇▇▇▇▇▇ ▇▇▇▇▇ Inc, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
(p) "Tenant's Address for Notice" means ▇▇▇▇▇▇.▇▇▇, Inc., Attn: General
Counsel, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(q) "Landlord's Agent" means ▇▇▇▇▇▇ ▇▇▇▇▇ Inc or such other agent as
Landlord may appoint from time to time.
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(r) "Broker(s)" means ▇▇▇▇▇▇ ▇▇▇▇▇ Inc representing the Landlord and
Washington Partners, Inc. representing the Tenant.
(s) "Exhibits" means the following Exhibits to this Lease:
Exhibit A - Legal Description of the Property
Exhibit B - Outline Drawing of the Premises
Exhibit C - Work Letter
Exhibit D - Rules and Regulations
(t) "Rider" means the following Rider which is attached hereto: Rider
dated March 20, 1998 by and between PACIFIC NW TITLE BUILDING, INC., A
WASHINGTON CORPORATION ("Landlord"), and ▇▇▇▇▇▇.▇▇▇, INC., A DELAWARE
CORPORATION ("Tenant").
(u) "Definitions" means the words and phrases defined in Section 42
captioned "Definitions".
2. PREMISES. Landlord leases to Tenant and Tenant leases from Landlord the
Premises for the Term.
3. APPURTENANCES. Tenant, and its authorized representatives, shall have
the right to use, in common with others and subject to the Rules and
Regulations, the Common Areas of the Building. Landlord shall have the right, in
Landlord's sole discretion, from time to time to (i) make changes to the
Building interior and exterior and Common Areas, including without limitation,
changes in the location, size, shape, number and appearance thereof, (ii) to
close temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available, and (iii) to use the Common
Areas while engaged in making additional improvements, repairs or alterations to
the Building. All of the windows and exterior walls of the Premises and any
space in the Premises used for shafts, stacks, pipes, conduits, ducts,
electrical equipment or other utilities or Building facilities are reserved
solely to Landlord and Landlord shall have rights of access through the Premises
for the purpose of operating, maintaining and repairing the same, provided,
however, that such changes shall not materially affect Tenant's access to, or
use and occupancy of, the Premises.
4. TERM.
(a) COMMENCEMENT DATE. This Lease shall become legally binding as of
the earlier of the date Landlord and Tenant execute this Lease or the date
Tenant enters onto the Premises or any portion thereof with Landlord's consent,
and shall remain in full force and effect thereafter until the expiration of the
Term, unless sooner terminated pursuant to this Lease. The Term shall commence
on the Commencement Date and expire on the Expiration Date, unless sooner
terminated pursuant to this Lease. The Commencement Date shall be the date
specified in Section 1.
(i) Notwithstanding anything to the contrary in this Section,
Tenant shall have the right to enter onto the Premises at any time after full
execution of this Lease by Landlord and Tenant solely for the purpose of
installation of cabling, communications equipment, office equipment and office
furniture. No Rent shall be due for such early access to the Premises.
(ii) If Tenant shall occupy the Premises or any portion thereof for
the Permitted Use prior to the Commencement Date specified in Section 1 then
Tenant shall pay Minimum Monthly Rent for such occupancy from and after the date
of such early occupancy. Landlord acknowledges that Tenant intends to occupy the
third floor in the Premises for the operation of its business as soon as
possible, and Tenant may so occupy the third floor prior to the Commencement
Date.
(b) TENANT TERMINATION RIGHTS. If Landlord is unable to deliver
possession of the Premises to Tenant on the Commencement Date as a result of
causes beyond its reasonable control, Landlord shall not be liable for any
damage caused by failing to deliver possession and this Lease shall not be void
or voidable. Tenant shall not be liable for Rent until Landlord delivers
possession of the Premises to Tenant. No delay in delivery of possession of the
Premises to Tenant shall change the Expiration Date or operate to extend the
Term. If Landlord does not deliver possession of the Premises to Tenant within
thirty (30) days of the Commencement Date, then Tenant may elect to terminate
this Lease by giving notice to Landlord within thirty (30) days following the
end of such thirty (30) day period.
(c) CONFIRMATION OF COMMENCEMENT DATE. When the Commencement Date as
provided herein has been established as an earlier or later date than the
Commencement Date specified in Section 1, Landlord shall confirm the
Commencement Date by notice to Tenant.
5. MINIMUM MONTHLY RENT; LATE CHARGE.
(a) MINIMUM MONTHLY RENT. Tenant shall pay to Landlord the Minimum
Monthly Rent without deduction, offset, prior notice or demand, in advance on
the first day of each month during the Term. Minimum Monthly Rent for any
partial month shall be prorated at the rate of 1/30th of the Minimum Monthly
Rent per day. Minimum Monthly Rent is exclusive of any sales, franchise,
business or occupation or other tax based on rents (other than Landlord's
general income taxes) and should such taxes apply during the Term, the Minimum
Monthly Rent shall be increased by the amount of such taxes. All Rent shall be
paid to Landlord at Landlord's Address for Payment of Rent or at such other
address as Landlord may specify by notice to Tenant.
(b) LATE CHARGE. Tenant acknowledges that the late payment by Tenant of
any Rent will cause Landlord to incur administrative, collection, processing and
accounting costs and expenses not contemplated under this Lease, the exact
amount of which are extremely difficult or impracticable to fix. Therefore, if
any
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Rent is not received by Landlord from Tenant by the fifth (5th) BUSINESS day
after such Rent is due, Tenant shall immediately pay to Landlord a late charge
equal to five percent (5%) of the amount of such Rent or Seventy-five and
No/100th Dollars ($75.00), whichever is greater. Landlord and Tenant agree that
this late charge represents a reasonable estimate of such costs and expenses and
is fair compensation to Landlord for its loss caused by Tenant's nonpayment.
Should Tenant pay said late charge but fail to pay contemporaneously therewith
all unpaid amounts of Rent, Landlord's acceptance of this late charge shall not
constitute a waiver of Tenant's default with respect to Tenant's nonpayment nor
prevent Landlord from exercising all other rights and remedies available to
Landlord under this Lease or under law.
6. PREPAID RENT AND SECURITY DEPOSIT. On execution of this Lease, Tenant
shall deposit with Landlord the Prepaid Rent, as monthly rent for the first full
month of the Term for which Rent is payable, and the Security Deposit, as a
Security Deposit for the performance by Tenant of the provisions of this Lease.
If Tenant is in default, Landlord may use the Security Deposit, or any portion
of it, to cure the default, including without limitation, paying for the cost of
any work necessary to restore the Premises, the Tenant improvements and any
alterations to good condition or to compensate Landlord for all damage sustained
by Landlord resulting from Tenant's default. Tenant shall within five (5) days
of demand pay to Landlord a sum equal to the portion of the Security Deposit
expended or applied by Landlord as provided in this Section so as to maintain
the Security Deposit in the sum initially deposited with Landlord. If Tenant is
not in default as of the expiration or termination of the Term, including
without limitation, in default in payment of the Rent for the last month of the
Term, then Landlord shall return the Security Deposit, without interest, to
Tenant within a reasonable period of time after the expiration or termination of
the Term. Landlord's obligations with respect to the Security Deposit are those
of a debtor and not a trustee. Landlord may commingle the Security Deposit with
Landlord's general and other funds.
7. REAL PROPERTY TAXES.
(a) PAYMENT OF TENANT'S SHARE OF INCREASES IN REAL PROPERTY TAXES.
Commencing January 1, 1999, Tenant shall pay to Landlord, as Additional Rent,
monthly, in advance on the first day of each month during the Term, an amount
equal to one-twelfth (1/12th) of Tenant's Share of all increases in Real
Property Taxes that are or will be levied or assessed against the Property
during each calendar year during the Term over and above the Real Property Taxes
that are levied or assessed against the Property during the Base Year as
reasonably estimated by Landlord. Such Additional Rent is exclusive of any
sales, franchise, business or occupation or other tax based on rents and should
such taxes apply during the Term, such Additional Rent shall be increased by the
amount of such taxes. Within one hundred twenty (120) days after the end of each
calendar year during the Term, Landlord shall furnish to Tenant a statement of
the Real Property Taxes for the preceding calendar year and Tenant's Share of
the increase in Real Property Taxes. If Tenant's Share of the increase in such
Real Property Taxes for that calendar year over such Real Property Taxes for the
Base Year exceeds the monthly payments made by Tenant, then Tenant shall pay
Landlord the deficiency within thirty (30) days after receipt of the statement.
If Tenant's payments made during that calendar year exceed Tenant's Share of the
increase in such Real Property Taxes for that calendar year over such Real
Property Taxes for the Base Year, then, at Landlord's option, either Landlord
shall pay Tenant the excess at the time Landlord furnishes the statement to
Tenant, or Tenant shall be entitled to offset the excess against the next
installment(s) of Minimum Monthly Rent and Additional Rent, provided, however,
that at the end of the Term Landlord shall pay Tenant the excess at the time
Landlord furnishes the statement to Tenant.
(b) GENERAL AND SPECIAL ASSESSMENTS. With respect to any general or
special assessments which may be levied against or upon the Property, or which
under the laws then in force may be evidenced by improvement or other bonds or
may be paid in annual installments, only the amount of such annual installment,
and interest due thereon, shall be included in the computation of Real Property
Taxes.
(c) PRORATION. Tenant's Share of Real Property Taxes shall be prorated
on the basis of a 360-day year to account for any fractional portion of a tax
year included in the Term at its commencement and expiration.
(d) NO EFFECT ON MINIMUM MONTHLY RENT. Notwithstanding anything to the
contrary in this Section, the Minimum Monthly Rent payable by Tenant shall in no
event be less than the Minimum Monthly Rent specified in Section 1.
8. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
personal property taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other personal property of Tenant contained in
the Premises or elsewhere. If possible, Tenant shall cause such trade fixtures,
furnishings, equipment and all other personal property of Tenant to be assessed
and billed separately from the Property.
9. OPERATING COSTS.
(a) PAYMENT OF TENANT'S SHARE OF INCREASES IN OPERATING COSTS.
Commencing January 1, 1999, Tenant shall pay to Landlord, as Additional Rent,
monthly, in advance on the first day of each month during the Term, an amount
equal to one-twelfth (1/12th) of Tenant's Share of the increase in the Operating
Costs of the Property for each calendar year during the Term over the Operating
Costs for the Base Year as reasonably estimated by Landlord. Landlord shall
reasonably estimate the Operating Costs for the Base Year and for each calendar
year during the Term based on the Operating Costs that would have been incurred
if the Building had been 95% occupied during the Base Year or each such calendar
year, as the case may be, taking into account historical operating costs for the
Building. Such Additional Rent is exclusive of any sales, franchise, business or
occupation or other tax based on rents and should such taxes apply during the
Term, such Additional Rent shall be increased by the amount of such taxes.
Within one hundred twenty (120) days after the end of each calendar year during
the Term, Landlord shall furnish to Tenant a statement of the Operating Costs
for the preceding calendar year and Tenant's Share of the increase in the
Operating Costs. If Tenant's Share of the
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increase in the Operating Costs for that calendar year over the Operating Costs
for the Base Year exceeds the monthly payments made by Tenant, then Tenant shall
pay Landlord the deficiency within thirty (30) days after receipt of the
statement. If Tenant's payments made during that calendar year exceed Tenant's
Share of the increase in the Operating Costs for that calendar year over the
Operating Costs for the Base Year, then, at Landlord's option, either Landlord
shall pay Tenant the excess at the time Landlord furnishes the statement to
Tenant, or Tenant shall be entitled to offset the excess against the next
installment(s) of Minimum Monthly Rent and Additional Rent, provided, however,
that at the end of the Term Landlord shall pay Tenant the excess at the time
Landlord furnishes the statement to Tenant.
(b) PRORATION. Tenant's Share of Operating Costs shall be prorated on
the basis of a 360 day year to account for any fractional portion of a year
included in the Term at its commencement and expiration.
(c) NO EFFECT ON MINIMUM MONTHLY RENT. Notwithstanding anything to the
contrary in this Section, the Minimum Monthly Rent payable by Tenant shall in no
event be less than the Minimum Monthly Rent specified in Section 1.
(d) RIGHT TO EXAMINE LANDLORD'S BOOKS AND RECORDS. Tenant or its
authorized representative shall have the right to examine Landlord's books and
records relating to Operating Costs of the Property upon reasonable prior notice
specifying such records Tenant desires to examine, during normal business hours
at the place or places where such records are normally kept by sending such
notice no later than ninety (90) days following the furnishing of the Landlord's
statement of the Operating Costs for the preceding calendar year and Tenant's
Share of the increase in the Operating Costs. Tenant may take exception to
matters included in Operating Costs, or Landlord's computation of Tenant's
Share, by sending notice specifying such exception and the reasons therefor to
Landlord no later than thirty (30) days after Landlord makes such records
available for examination. Landlord's statement of the Operating Costs for the
preceding calendar year and Tenant's Share of the increase in the Operating
Costs shall be considered final, except as to matters to which exception is
taken after examination of Landlord's books and records relating to Operating
Costs of the Property in the foregoing manner and within the foregoing times.
Tenant acknowledges that Landlord's ability to budget and incur expenses depends
on the finality of such statement, and accordingly agrees that time is of the
essence of this Section. If Tenant takes exception to any matter contained in
such statement as provided herein, Landlord shall refer the matter to an
independent certified public accountant, whose certification as to the proper
amount shall be final and conclusive as between Landlord and Tenant. Tenant
shall promptly pay the cost of such certification unless such certification
determines that Landlord's statement of the Operating Costs overstated the
Operating Costs by more than five percent (5%). Pending resolution of any such
exceptions in the foregoing manner, Tenant shall continue paying Tenant's Share
of Operating Costs in the amounts determined by Landlord, subject to adjustment
after any such exceptions are so resolved. If such certification determines that
Landlord's statement of the Operating Costs overstated the Operating Costs, then
Tenant shall receive a credit for Tenant's Share of the amount of such
overstatement against payments of Rent next due.
10. USE. Tenant shall use the Premises for the Permitted Use and for no
other use without Landlord's prior consent. Tenant agrees that it has determined
to its satisfaction that the Premises can be used for the Permitted Use. Tenant
waives any right to terminate this Lease if the Premises cannot be used for the
Permitted Use during the Term unless the prohibition on use is the result of
actions taken by Landlord. Tenant's use of the Premises shall be in accordance
with the following:
(a) INSURANCE. Tenant shall not do, bring, or keep anything in or about
the Premises or the Property that will cause a cancellation of any insurance
covering the Property. If the rate of any insurance carried by Landlord on the
Property as published by the Washington Survey and Rating Bureau, or any
successor rating bureau or agency, is increased as a result of Tenant's use,
then Tenant shall pay to Landlord not less than ten (10) days before the date
Landlord is obligated to pay a premium on the insurance, a sum equal to the
difference between the original premium and the increased premium.
(b) COMPLIANCE WITH LAWS. Tenant shall comply with all Laws concerning
the Premises and Tenant's use of the Premises. Landlord shall comply with all
Laws concerning the Building and the Building common areas and the operation and
maintenance thereof.
(c) WASTE, NUISANCE AND IMPROPER USE. Tenant shall not use the Premises
in any manner that will constitute waste, nuisance or unreasonable annoyance to
other tenants in the Building, including without limitation, (i) the use of
loudspeakers or sound or light apparatus that can be heard or seen outside the
Premises, (ii) for cooking or other activities that cause odors that can be
detected outside the Premises, or (iii) for lodging or sleeping rooms.
(d) DAMAGE TO PROPERTY. Tenant shall not do anything in, on or about
the Premises that will cause damage to the Property.
(e) RULES AND REGULATIONS. Tenant and its authorized representatives
shall comply with the Rules and Regulations set forth on Exhibit D attached
hereto. Landlord shall have the right to amend, on thirty (30) days advance
written notice, the Rules and Regulations from time to time. In the event of a
conflict between this Lease and the Rules and Regulations, as amended, this
Lease shall control. Landlord shall have the right to enforce the Rules and
Regulations. Landlord shall have no liability or responsibility whatsoever with
respect to the noncompliance by other tenants or their authorized
representatives with any of such Rules and Regulations.
11. HAZARDOUS SUBSTANCES. Tenant shall not dispose of or otherwise allow
the release of any Hazardous Substances in, on or under the Premises, or the
Property, or in any tenant improvements or alterations placed on the Premises by
Tenant. Tenant represents and warrants to Landlord that Tenant's intended use of
the
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Premises does not involve the use, production, disposal or bringing on to the
Premises of any Hazardous Substances, except for products normally used in
general business offices which constitute Hazardous Substances, provided that
such products are used, stored and disposed of in accordance with applicable
laws and manufacturer's and supplier's guidelines. Tenant shall promptly comply
with all laws and with all orders, decrees or judgments of governmental
authorities or courts having jurisdiction, relating to the use, collection,
treatment, disposal, storage, control, removal or cleanup of Hazardous
Substances, on or under the Premises or the Property, or incorporated in any
tenant improvements or alterations, at Tenant's expense.
(a) COMPLIANCE; NOTIFICATION. After notice to Tenant and a reasonable
opportunity for Tenant to effect such compliance, Landlord may, but is not
obligated to, enter upon the Premises and take such actions and incur such costs
and expenses to effect such compliance as it deems advisable to protect its
interest in the Premises and the Property, provided, however that Landlord shall
not be obligated to give Tenant notice and an opportunity to effect such
compliance if (i) such delay might result in material adverse harm to the
Premises, or the Property, or (ii) an emergency exists. Tenant shall reimburse
Landlord for the full amount of all costs and expenses incurred by Landlord in
connection with such compliance activities, and such obligation shall continue
even after expiration or termination of the Term. Tenant shall notify Landlord
immediately of any release of any Hazardous Substances on the Premises or the
Property.
(b) INDEMNITY BY TENANT. Tenant agrees to hold Landlord harmless from
and against any and all damages, charges, cleanup costs, remedial actions, costs
and expenses, which may be imposed on, incurred or paid by, or asserted against
Landlord, the Premises or the Property by reason of, or in connection with (1)
any misrepresentation, breach of warranty or other default by Tenant under this
Lease, or (2) the acts or omissions of Tenant, its authorized representatives,
or any subtenant or other person for whom Tenant would otherwise be liable,
resulting in the release of any Hazardous Substances on the Premises or the
Property.
(c) INDEMNITY BY LANDLORD. Landlord agrees to hold Tenant harmless from
and against any and all damages, charges, cleanup costs, remedial actions, costs
and expenses, which may be imposed on, incurred or paid by, or asserted against
Tenant, the Premises or the Property by reason of, or in connection with (i) any
misrepresentation, breach of warranty or other default by Landlord under this
Lease or (ii) the acts or omissions of Landlord, its authorized representatives,
or any other person for whom Landlord would otherwise be liable, resulting in
the release of any Hazardous Substances on the Premises or the Property.
(d) ACKNOWLEDGMENT AS TO HAZARDOUS SUBSTANCES. Tenant acknowledges that
the Premises may contain Hazardous Substances, and Tenant accepts the Premises
and the Building notwithstanding such Hazardous Substances. Landlord represents
to Tenant that, to the best of Landlord's knowledge without independent
investigation or inquiry, as of the date of execution of this Lease; (i) there
has been no release in the Premises or the Building of any Hazardous Substances
in violation of any applicable Laws, and (ii) the Premises and the Building
contain no asbestos-containing materials. The term "Landlord's knowledge" means
and includes only the actual knowledge of Landlord, without giving effect to any
principles of imputed or constructive knowledge and without any duty of inquiry.
If Landlord is required by any law to take any action to remove or ▇▇▇▇▇ any
Hazardous Substances, or if Landlord deems it necessary to conduct special
maintenance or testing procedures with regard to any Hazardous Substances, or to
remove or ▇▇▇▇▇ any Hazardous Substances, Landlord may take such action or
conduct such procedures at times and in a manner that Landlord deems appropriate
under the circumstances, and Tenant shall permit the same.
(e) SURVIVAL. The provisions of this Section shall survive the
expiration or sooner termination of the Term. No subsequent modification or
termination of this Lease by agreement of the parties or otherwise shall be
construed to waive or to modify any provisions of this Section unless the
termination or modification agreement or other document expressly so states in
writing.
12. LANDLORD'S MAINTENANCE; INCLUSION IN OPERATING COSTS.
(a) LANDLORD'S MAINTENANCE. Except as provided in Section 13 captioned
"Tenant's Maintenance; Remedies", Section 23 captioned "Destruction" and Section
24 captioned "Condemnation" and except for damage caused by any negligent or
intentional act or omission of Tenant or its authorized representatives,
Landlord shall maintain in good condition and repair the following:(i) the
structural parts of the Building, which structural parts include only the
foundations, bearing and exterior walls (excluding glass and doors), subflooring
and roof, (ii) the building standard lighting fixtures, window coverings and
ceiling tiles and the unexposed electrical, plumbing and sewage systems,
including without limitation, those portions lying outside the Premises, (iii)
the heating, ventilating and air-conditioning system, if any, servicing the
Building, (iv) the lobbies, corridors, elevators, public or common restrooms and
other common areas of the Building, and (v) the sidewalks, grounds, landscaping,
parking and loading areas, if any, and other common areas of the Property.
(b) INCLUSION IN OPERATING COSTS. The cost of maintaining, repairing,
replacing or servicing the portions of the Building that Landlord is required to
maintain pursuant to this Section shall be included in Operating Costs to the
extent provided in Section 9 captioned "Operating Costs".
13. TENANT'S MAINTENANCE; REMEDIES.
(a) TENANT'S MAINTENANCE. Except as provided in Section 12 captioned
"Landlord's Maintenance; Inclusion in Operating Costs", Section 23 captioned
"Destruction" and Section 24 captioned "Condemnation" and except for damage
caused by any negligent or intentional act or omission of Landlord or its
authorized representatives, Tenant, at its cost, shall maintain in good
condition and repair the Premises (ordinary wear and tear excepted), including
without limitation, all of the Tenant Improvements (except for latent defects),
Tenant's alterations, Tenant's trade fixtures, Tenant's personal property,
signs, walls, interior partitions, wall coverings, windows, non-building
standard window coverings, glass, doors, carpeting and resilient flooring,
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non-building standard ceiling tiles, plumbing fixtures and non-building standard
lighting fixtures. Tenant shall be liable for any damage to the Premises and the
Building resulting from the acts or omissions of Tenant or its authorized
representatives.
(b) LANDLORD'S REMEDIES. If Tenant fails to maintain the Premises in
good condition and repair as required by Subsection 13(a) and if such failure is
not cured within thirty (30) days after notice of such failure is given by
Landlord to Tenant, then Landlord may, at its option, cause the Premises to be
maintained in good condition and repair and Tenant shall promptly reimburse
Landlord for all costs incurred by Landlord in performance of Tenant's
obligation to maintain the Premises.
14. TENANT IMPROVEMENTS AND ALTERATIONS; TRADE FIXTURES.
(a) TENANT IMPROVEMENTS AND ALTERATIONS. Tenant accepts the Premises in
"AS IS" condition without any obligations for the performance of improvements or
other work by Landlord. Tenant shall not make any improvements or alterations
(other than cabling) to the Premises without Landlord's prior written consent,
which consent shall not be unreasonably withheld. If Tenant desires to make any
improvements or alterations to the Premises and obtains Landlord's consent as
described herein, Tenant shall pay for such improvements and alterations as
described in the Work Letter attached hereto as Exhibit C. If Tenant's
improvements and alterations coincide with Landlord's long-term plans for the
building, Landlord may, in Landlord's sole discretion, pay for all or a portion
of such improvements and alterations made to the Premises. Tenant shall not make
any other improvements or alterations to the Premises without Landlord's prior
consent. Any improvements and alterations made by either party shall remain on
and be surrendered with the Premises on expiration or termination of the Term,
except that Landlord can elect, at the time Landlord gives it consent, to
require Tenant to remove any improvements and alterations that Tenant has made
to the Premises. If Landlord so elects, Tenant, at its cost, shall restore the
Premises to the condition designated by Landlord in its election, before the
last day of the Term. Any improvements and alterations that remain on the
Premises on expiration or termination of the Term shall automatically become the
property of Landlord and title to such improvements and alterations shall
automatically pass to Landlord at such time without any payment therefor by
Landlord to Tenant. If Tenant or its authorized representatives make any
improvements or alterations to the Premises as provided in this Section, then
such improvements and alterations (i) shall be made in a first class manner in
conformity with then building standard improvements, (ii) shall be made
utilizing then building standard materials, (iii) shall be made in compliance
with the Rules and Regulations and the reasonable directions of Landlord, (iv)
shall be made pursuant to a valid building permit to be obtained by Tenant, at
its cost, (v) shall be made in conformity with then applicable Laws, including
without limitation, building codes, and (vi) shall not be commenced until five
(5) days after Landlord has received notice from Tenant stating the date the
installation of such improvements and alterations is to commence so that
Landlord can post and record an appropriate notice of nonresponsibility.
(b) TRADE FIXTURES. Tenant may install any trade fixtures in or on the
Premises with Landlord's prior consent, which shall not be unreasonably
withheld.
15. MECHANICS' LIENS. Tenant shall pay, or cause to be paid, all costs of
labor, services and/or materials supplied in connection with any Work. Tenant
shall keep the Property free and clear of all mechanics' liens and other liens
resulting from any Work. Prior to the commencement of any Work or the supply or
furnishing of any labor, services and/or materials in connection with any Work,
Tenant shall provide Landlord with a labor and material payment bond in an
amount equal to one hundred percent (100%) of the aggregate price of all
contracts therefor, with release of the bond conditioned on Tenant's payment in
full of all claims of lien claimants for such labor, services and/or materials
supplied in the prosecution of the Work. Said payment bond shall name Landlord
as a primary obligee, shall be given by a surety which is satisfactory to
Landlord, and shall be in such form as Landlord shall approve in its sole
discretion. Tenant shall have the right to contest the correctness or validity
of any such lien if, immediately on demand by Landlord, it procures and records
a lien release bond issued by a responsible corporate surety in an amount
sufficient to satisfy statutory requirements therefor in the State of
Washington. Tenant shall promptly pay or cause to be paid all sums awarded to
the claimant on its suit, and, in any event, before any execution is issued with
respect to any judgment obtained by the claimant in its suit or before such
judgment becomes a lien on the Premises, whichever is earlier. If Tenant shall
be in default under this Section, by failing to provide security for or
satisfaction of any mechanic's or other liens, then Landlord may (but shall not
be obligated to), in addition to any other rights or remedies it may have,
discharge said lien by (i) paying the claimant an amount sufficient to settle
and discharge the claim, (ii) procuring and recording a lien release bond, or
(iii) taking such other action as Landlord shall deem necessary or advisable,
and, in any such event, Tenant shall pay as Additional Rent, on Landlord's
demand, all costs (including reasonable attorney fees) incurred by Landlord in
settling and discharging such lien together with interest thereon in accordance
with Section 39 captioned "Interest on Unpaid Rent" from the date of Landlord's
payment of said costs. Landlord's payment of such costs shall not waive any
default of Tenant under this Section.
16. UTILITIES AND SERVICES.
(a) UTILITIES AND SERVICES FURNISHED BY LANDLORD. Landlord shall
furnish the Premises with:
(i) Electricity for lighting and power suitable for the use of the
Premises for ordinary general office purposes; provided, however, that Tenant
shall not at any time have a connected electrical load for lighting purposes in
excess of the wattage per square foot of Premises Area required for building
standard amounts of lighting, or a connected load for all other power
requirements in excess of four (4) ▇▇▇▇▇ per square foot of Premises Area as
determined by Landlord, and the electricity so provided for lighting and power
shall not exceed such limits, subject to any lower limits set by any
governmental authority with respect thereto;
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(ii) Subject to the reasonable limitations of the existing
building systems, heating, ventilating and air-conditioning to maintain a
temperature range in the Premises which is customary for similar office space in
the Seattle, Washington area (but in compliance with any applicable governmental
regulations with respect thereto). Tenant agrees to keep closed, when necessary,
blinds, draperies and windows which must be closed to provide for the efficient
operation of the heating and air conditioning systems, if any, and Tenant agrees
to cooperate with Landlord and to abide by the regulations and requirements
which Landlord may prescribe for the proper functioning and protection of the
heating, ventilating and air-conditioning system, if any. If Tenant requires
heating, ventilating and air conditioning to the Premises other than during
normal business hours from 7:00 A.M. to 6:00 P.M. Mondays through Fridays and
from the hours of 9:00 A.M. to 1:00 P.M. on Saturdays, except other than the
stated Saturday hours, Sundays and those legal holidays generally observed in
the State of Washington, Landlord shall, upon Tenant's request made not less
than 24 hours before the time Tenant requires the after hour service, and not
later than Noon on the Friday before any Saturday or Sunday on which Tenant
requires such service, and not later than Noon of the day before any holiday on
which Tenant requires such service (except as otherwise provided in the Rules
and Regulations), furnish such heating, ventilating and air conditioning. If
Tenant receives such services, then Tenant shall pay, upon demand, an amount
equal to Tenant's proportionate share of the actual direct cost to Landlord in
providing the heating, ventilating and air conditioning outside of normal
business hours;
(iii) Water for restroom and drinking purposes and access
to restroom facilities;
(iv) Elevator service for general office pedestrian usage
if the Building is serviced by elevators;
(v) Relamping of building-standard light fixtures;
(vi) Washing of interior and exterior surfaces of exterior
windows with reasonable frequency; and
(vii) Janitorial service five (5) times per week, except
holidays.
(b) PAYMENT FOR EXCESS UTILITIES AND SERVICES. All services and
utilities for the Premises not required to be furnished by Landlord pursuant to
Section 16(a) shall be paid for by Tenant. If Tenant requires, on a regular
basis, water, heat, air conditioning, electric current, elevator or janitorial
service in excess of that provided for in Section 16(a), then Tenant shall first
obtain the consent of Landlord which consent shall not be unreasonably withheld.
If Landlord consents to such excess use, Landlord may install an electric
current or water meter (including, without limitation, any additional wiring,
conduit or panel required therefor) to measure the excess electric current or
water consumed by Tenant or may cause the excess usage to be measured by other
reasonable methods (e.g. by temporary "check" meters or by survey). Tenant shall
pay to Landlord upon demand (i) the cost of any and all water, heat, air
conditioning, electric current, janitorial, elevator or other services or
utilities required to be furnished to Tenant in excess of the services and
utilities required to be furnished by Landlord as provided in Section 16(a);
(ii) the cost of installation, maintenance and repair of any meter installed in
the Premises; (iii) the cost of all electricity and water consumed by Tenant in
connection with any dedicated heating, ventilating and/or air conditioning,
computer power and/or air conditioning, telecommunications or other special
systems of Tenant, including any power usage other than through existing
standard 110-volt AC outlets; and (iv) any cost incurred by Landlord in keeping
account of or determining such excess utilities or services furnished to Tenant.
Landlord's failure to ▇▇▇▇ Tenant for any such excess utilities or services
shall not waive Landlord's right to ▇▇▇▇ Tenant for the excess at a later time.
(c) TEMPERATURE BALANCE. Landlord makes no representation to
Tenant regarding the adequacy or fitness of the heating, ventilating and
air-conditioning systems, if any, in the Building to maintain temperatures that
may be required for, or because of, any of Tenant's equipment which uses other
than the fractional horsepower normally required for office equipment, and
Landlord shall have no liability for loss or damage suffered by Tenant or others
in connection therewith. If the temperature otherwise maintained in any portion
of the Premises by the heating, air conditioning or ventilation system is
affected as a result of (i) any lights, machines or equipment (including without
limitation electronic data processing machines) used by Tenant in the Premises,
(ii) the occupancy of the Premises by more than one person per two hundred (200)
square feet of rentable area therein, (iii) an electrical load for lighting or
power in excess of the limits per square foot of rentable area of the Premises
specified in Section 16(a), or (iv) any rearrangement of partitioning or other
improvements, Landlord may install any equipment, or modify any existing
equipment (including the standard air conditioning equipment) Landlord deems
necessary to restore the temperature balance. The cost of any such equipment,
including without limitation, the cost of design and installation thereof, and
the cost of operating, metering, maintaining or repairing the same, shall be
paid by Tenant to Landlord upon demand. Tenant shall not install or operate
window-mounted heating or air-conditioning units.
(d) SPECIAL ELECTRICAL OR WATER CONNECTIONS; ELECTRICITY USE.
Tenant will not, without the prior consent of Landlord, which shall not be
unreasonably withheld, connect or use any apparatus or device in the Premises
(i) using current in excess of 110 volts or (ii) which will cause the amount of
electricity, water, heating, air conditioning or ventilation furnished to the
Premises to exceed the amount required for use of the Premises for ordinary
general office purposes during normal business hours or (iii) which would cause
Tenant's connected load to exceed any limits established in Section 16(a).
Tenant shall not connect with electric current except through existing outlets
in the Premises and shall not connect with water pipes except through existing
plumbing fixtures in the Premises. In no event shall Tenant's use of electricity
exceed the capacity of existing feeders to the Building or the risers or wiring
installation, and Landlord may prohibit the use of any electrical equipment
which in Landlord's opinion will overload such wiring or interfere with the use
thereof by other tenants in the Building. If Landlord consents to the use of
equipment requiring such changes, Tenant shall pay the cost of installing any
additional risers, panels or other facilities that may be necessary to furnish
energy to the Premises.
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Landlord will not permit additional coring of the floor of the Premises
in order to install new electric outlets in the Premises unless Tenant furnishes
Landlord with X-ray scans of the floor area where the Tenant wishes to place
additional electrical outlets and Landlord, in its absolute discretion, is
satisfied, on the basis of such X-ray scans and other information obtained by
Landlord, that coring of the floor in order to install such additional outlets
will not weaken the structure of the floor.
(e) LANDLORD'S DUTIES. Landlord shall not be in default under this
Lease or liable for any damages resulting from, or incidental to, any of the
following, nor shall any of the following be an actual or constructive eviction
of Tenant, nor shall the Rent be abated by reason of: (i) failure to furnish or
delay in furnishing any of the services described in this Section when such
failure or delay is caused by accident or any condition beyond the reasonable
control of Landlord, including the making of necessary repairs or improvements
to the Premises or to the Building, (ii) any electrical surges or spikes, or
(iii) failure to make any repair or to perform any maintenance, unless such
failure shall persist for an unreasonable time after notice of the need for such
repair or maintenance is given to Landlord by Tenant. Landlord shall use
reasonable efforts to remedy any interruption in the furnishing of such
services.
(f) GOVERNMENTAL REGULATIONS. Any other provisions of this Section
notwithstanding, if any governmental authority or utility supplier imposes any
laws, controls, conditions, or other restrictions upon Landlord, Tenant, or the
Building, relating to the use or conservation of energy or utilities, mandated
changes in temperatures to be maintained in the Premises or the Building or the
reduction of automobile or other emissions (collectively, the "Controls"), or in
the event Landlord is required or elects to make alterations to the Building in
order to comply with the Controls, Landlord may, in its reasonable discretion,
comply and may require Tenant to comply with the Controls or make such
alterations to the Building in order to comply with the Controls. Such
compliance and the making of such alterations shall not constitute an actual or
constructive eviction of Tenant, impose on Landlord any liability whatsoever, or
entitle Tenant to any abatement of Rent.
17. INDEMNITY.
(a) GENERALLY. Tenant shall hold Landlord harmless from and against any
and all damages arising out of any damage to any persons or property occurring
in, on or about the Premises or the Property resulting from the acts or
omissions of Tenant or its authorized representatives. Landlord shall hold
Tenant harmless from and against any and all damages arising out of any damage
to any persons or property occurring in, on or about the Premises or the
Property resulting from the acts or omissions of Landlord or its authorized
representatives. A party's obligation under this Section to indemnify and hold
the other party harmless shall be limited to the sum that exceeds the amount of
insurance proceeds, if any, received by the party being indemnified.
(b) CONCURRENT NEGLIGENCE OF LANDLORD AND TENANT. Notwithstanding
Section 17(a) above, in the event of concurrent negligence of Tenant, or its
authorized representatives, on the one hand, and that of Landlord, or its
authorized representatives, on the other hand, which concurrent negligence
results in damage to any persons or property occurring in, on or about the
Premises or the Property, either party's obligation to indemnify the other party
as set forth in Section 17(a) shall be limited to the extent of the negligence
of the indemnifying party, or its authorized representatives, including the
indemnifying party's proportional share of costs and attorneys' fees incurred in
connection with any claims, actions or proceedings brought with respect to such
damage.
(c) WAIVER OF WORKER'S COMPENSATION IMMUNITY. The indemnification
obligations contained in this Section shall not be limited by any worker's
compensation, benefit or disability laws, and each indemnifying party hereby
waives (solely for the benefit of the indemnified party) any immunity that said
indemnifying party may have under the Industrial Insurance Act, Title 51 RCW and
similar worker's compensation, benefit or disability laws.
(d) PROVISIONS SPECIFICALLY NEGOTIATED. LANDLORD AND TENANT ACKNOWLEDGE
BY THEIR EXECUTION OF THIS LEASE THAT EACH OF THE INDEMNIFICATION PROVISIONS OF
THIS LEASE (SPECIFICALLY INCLUDING BUT NOT LIMITED TO THOSE RELATING TO WORKER'S
COMPENSATION BENEFITS AND LAWS) WERE SPECIFICALLY NEGOTIATED AND AGREED TO BY
LANDLORD AND TENANT.
18. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord and Landlord's Agent
shall not be liable for injury to Tenant's business or loss of income therefrom
or for damage which may be sustained by the person, goods, wares, merchandise or
property of Tenant, its authorized representatives, or any other person in or
about the Premises, caused by or resulting from fire, steam, electricity, gas,
water or rain, which may leak or flow from or into any part of the Premises, or
from the breakage, leakage, obstruction or other defects of the pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
of the same, whether the said damage or injury resulting from conditions arising
upon the Premises or upon other portions of the Building or the Property unless
such injury or damage is caused by the negligence or willful misconduct of
Landlord or its authorized representatives.
19. COMMERCIAL GENERAL LIABILITY AND PROPERTY DAMAGE INSURANCE. Tenant, at
its cost, shall maintain commercial general liability insurance (including
contractual liability and products and completed operations liability) with
liability limits of not less than $1,000,000 per occurrence and $2,000,000
annual aggregate, insuring against all liability of Tenant and its authorized
representatives arising out of or in connection with Tenant's use and occupancy
of the Premises and property damage insurance with liability limits of not less
than $500,000. All such commercial general liability and property damage
insurance shall insure performance by Tenant of the indemnity provisions of
Section 17 captioned "Indemnity". Landlord and Landlord's Agent shall be
additional named insureds on such insurance policy.
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20. TENANT'S FIRE INSURANCE. Tenant, at its cost, shall maintain on all of
Tenant's Alterations, Trade Fixtures and Personal Property in, on or about the
Premises, a policy of standard All Risk fire insurance, in an amount equal to at
least their full replacement cost. The proceeds of any such policy shall be used
by Tenant for the restoration of Tenant's Alterations and Trade Fixtures and the
replacement of its Personal Property. Any portion of such proceeds not used for
such restoration shall belong to Tenant.
21. WAIVER OF SUBROGATION. Landlord and Tenant release each other, and
their respective authorized representatives, from any claims for damage to any
person or to the Premises and the Building and to Tenant's Alterations, Trade
Fixtures and Personal Property that are caused by or result from risks insured
against under any insurance policies carried by the parties, in force at the
time of any such damage and collectible. Landlord and Tenant shall cause each
insurance policy obtained by it to provide that the insurance company waives all
right of recovery by way of subrogation against either party in connection with
any damage covered by any insurance policy. Neither party shall be liable to the
other for any damage caused by fire or any of the risks insured against under
any insurance policy required by this Lease.
22. OTHER INSURANCE MATTERS. All insurance required to be carried by Tenant
under this Lease shall: (i) be issued by insurance companies authorized to do
business in the State of Washington with a rating of A/VI or better as rated in
the most recent edition of Best's Insurance Reports; (ii) be issued as a primary
policy, and (iii) contain an endorsement requiring thirty (30) days' prior
written notice from the insurance company to both parties, to Landlord's Agent,
and, if requested by Landlord, to Landlord's lender, before cancellation or
change in the coverage, scope, or amount of any policy. Each policy or a
certificate of the policy, together with evidence of payment of premiums, shall
be deposited with Landlord on or before the Commencement Date, and on renewal of
the policy not less than ten (10) days before expiration of the term of the
policy.
23. DESTRUCTION.
(a) INSURED DAMAGE. If during the Term the Premises or the Building are
partially or totally destroyed by any casualty that is covered by any insurance
carried by Landlord covering the Building, rendering the Premises partially or
totally inaccessible or unusable, Landlord shall restore the Premises or the
Building to substantially the same condition as they were in immediately before
such destruction, if (i) the insurance proceeds available to Landlord equal or
exceed the cost of such restoration, (ii) in the opinion of a registered
architect or engineer appointed by Landlord such restoration can be completed
within one hundred eighty (180) days after the date of destruction, and (iii)
such restoration is permitted under then existing laws to be done in such a
manner as to return the Premises, or the Building, as the case may be, to
substantially the same condition as they were in immediately before such
destruction. To the extent that the insurance proceeds must be paid to a
mortgagee under, or must be applied to reduce any debt secured by, a mortgage
covering the Property, the insurance proceeds shall be deemed not to be
available to Landlord unless such mortgagee permits Landlord to use the
insurance proceeds for such restoration. Such destruction shall not terminate
this Lease.
(b) MAJOR OR UNINSURED DAMAGE. If during the Term the Premises or the
Building are partially or totally destroyed by any casualty and Landlord is not
obligated under Section 23(a) captioned "Insured Damage" to restore the Premises
or the Building, as the case may be, then (i) Landlord may, at its election,
restore the Premises or the Building to substantially the same condition as they
were in immediately before such destruction, or (ii) either party may terminate
this Lease effective as of the date of such destruction on notice to the other
party within sixty (60) days after the date of destruction. If Landlord does not
give Tenant notice within sixty (60) days after the date of such destruction of
its election to restore the Premises or the Building, as the case may be,
Landlord shall be deemed to have elected to terminate this Lease. If Landlord
elects to restore the Premises or the Building, as the case may be, Landlord
shall use commercially reasonable efforts to complete such restoration within
one hundred eighty (180) days after the date on which Landlord obtains all
permits necessary for such restoration, provided, however, that such one hundred
eighty (180) day period shall be extended by a period equal to any delays caused
by Force Majeure, and such destruction shall not terminate this Lease.
(c) DAMAGE TO THE BUILDING. If during the Term the Building is
partially destroyed by any casualty and if in the opinion of Landlord the
Building should be restored in such a way as to materially alter the Premises,
then Landlord may, at Landlord's election, terminate this Lease by giving notice
to Tenant of Landlord's election to do so within sixty (60) days after the date
of such destruction.
(d) EXTENT OF LANDLORD'S OBLIGATION TO RESTORE. If Landlord is required
or elects to restore the Premises as provided in this Section, Landlord shall
not be required to restore alterations made by Tenant, Tenant's trade fixtures
and Tenant's personal property, such excluded items being the sole
responsibility of Tenant to restore.
(e) ABATEMENT OR REDUCTION OF RENT. In case of damage to, or
destruction of, the Premises or the Building the Rent shall be abated or
reduced, between the date of destruction and the date of completion of
restoration, by an amount that is in the same ratio to the Rent as the total
number of square feet of the Premises that are so damaged or destroyed bears to
the total number of square feet in the Premises.
24. CONDEMNATION. If during the Term there is any taking of part or all of
the Premises or the Building by condemnation, then the rights and obligations of
the parties shall be as follows:
(a) MINOR TAKING. If there is a taking of less than ten percent (10%)
of the Premises, this Lease shall remain in full force and effect.
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(b) MAJOR TAKING. If there is a taking of ten percent (10%) or more of
the Premises and if the remaining portion of the Premises is of such size or
configuration that Tenant is unable to conduct its business in the Premises,
then the Term shall terminate as of the date of taking.
(c) TAKING OF PART OF THE BUILDING. If there is a taking of a part of
the Building other than the Premises and if in the opinion of Landlord the
Building should be restored in such a way as to materially alter the Premises,
then Landlord may terminate the Term by giving notice to such effect to Tenant
within sixty (60) days after the date of vesting of title in the condemnor and
the Term shall terminate as of the date specified in such notice, which date
shall not be less than sixty (60) days after the giving of such notice.
(d) AWARD. The entire award for the Premises, the Building and the
Property, shall belong to and be paid to Landlord, Tenant hereby assigning to
Landlord Tenant's interest therein, if any, provided, however, that Tenant shall
have the right to claim and recover from the condemnor compensation for the loss
of any alterations made by Tenant, Tenant's trade fixtures, Tenant's personal
property, moving expenses and business interruption.
(e) ABATEMENT OF RENT. If any part of the Premises is taken by
condemnation and this Lease remains in full force and effect, on the date of
taking the Rent shall be reduced by an amount that is in the same ratio to the
Rent as the total number of square feet in the Premises taken bears to the total
number of square feet in the Premises immediately before the date of taking.
25. ASSIGNMENT AND SUBLETTING.
(a) LANDLORD'S CONSENT; DEFINITIONS. Tenant acknowledges that the
Building is a multi-tenant office building, occupied by tenants specifically
selected by Landlord, and that Landlord has a legitimate interest in the type
and quality of such tenants, the location of tenants in the Building and in
controlling the leasing of space in the Building so that Landlord can better
meet the particular needs of its tenants and protect and enhance the relative
image, position and value of the Building in the office building market. Tenant
further acknowledges that the rental value of the Premises may fluctuate during
the Term in accordance with market conditions, and, as a result, the Rent paid
by Tenant under the Lease at any particular time may be higher or lower than the
then market rental value of the Premises. Landlord and Tenant agree, and the
provisions of this Section are intended to so provide, that, if Tenant
voluntarily assigns its interest in this Lease or in the Premises or subleases
any part or all of the Premises, one-half (1/2) of the net profits from any
increase in the market rental value of the Premises shall belong solely to
Landlord. Tenant acknowledges that, if Tenant voluntarily assigns this Lease or
subleases any part or all of the Premises, Tenant's investment in the subject
portion of the Premises (specifically including, but not limited to, tenant
improvements, good will or other assets) may be lost or reduced as a result of
such action.
(b) CONSENT REQUIRED. Tenant shall not voluntarily assign or encumber
its interest in this Lease or in the Premises, or sublease any part or all of
the Premises, without Landlord's prior consent, which consent shall not be
unreasonably withheld. Any assignment, encumbrance or sublease without
Landlord's consent shall be voidable and, at Landlord's election, shall
constitute a default by Tenant under this Lease. In determining whether to
approve a proposed assignment or sublease, Landlord shall place primary emphasis
on the proposed transferee's reputation and creditworthiness, the character of
the business to be conducted by the proposed transferee at the Premises and the
affect of such assignment or subletting on the tenant mix in the Building. In
addition, Landlord shall have the right to approve the specific form of any
assignment or sublease agreement. In no event shall Landlord be obligated to
consent to any assignment or subletting which increases (i) the Operating Costs,
(ii) the burden on the Building services, or (iii) the foot traffic, elevator
usage or security concerns in the Building, or creates an increased probability
of the comfort and/or safety of the Landlord and other tenants in the Building
being unreasonably compromised or reduced (for example, but not exclusively,
Landlord may deny consent to an assignment or subletting where the space will be
used for a school or training facility, an entertainment, sports or recreation
facility, retail sales to the public (unless Tenant's permitted use is retail
sales), a personnel or employment agency, a medical office, or an embassy or
consulate or similar office. Landlord shall not be obligated to approve an
assignment or subletting to (x) a current tenant of the Building or (y) a
prospective tenant of the Building with whom Landlord is then negotiating.
Landlord's foregoing rights and options shall continue throughout the entire
term of this Lease. No consent to any assignment, encumbrance or sublease shall
constitute a waiver of the provisions of this Section and no other or subsequent
assignment, encumbrance or sublease shall be made without Landlord's prior
consent. Neither an assignment or subletting nor the collection of Rent by
Landlord from any person other than Tenant, nor the application of any such Rent
as provided in this Section shall be deemed a waiver of any of the provisions of
this Section or release Tenant from its obligation to comply with the terms and
provisions of this Lease and Tenant shall remain fully and primarily liable for
all of Tenant's obligations under this Lease, including the obligation to pay
Rent under this Lease. Any personal guarantee(s) of Tenant's obligations under
this Lease shall remain in full force and effect following any such assignment
or subletting. Landlord may condition approval of an assignment or subletting
hereunder on an increase in the amount of the Security Deposit or on receipt of
personal guarantees of the assignee's or sublessee's obligations under this
Lease. If Landlord approves of an assignment or subletting hereunder and this
Lease contains any renewal options, expansion options, rights of first refusal,
rights of first negotiation or any other rights or options pertaining to
additional space in the Building, such rights and/or options shall not run to
the assignee or subtenant, it being agreed by the parties hereto that any such
rights and options are personal to Tenant named herein and may not be
transferred.
(c) CONDITIONS TO ASSIGNMENT OR SUBLEASE. Tenant agrees that any
instrument by which Tenant assigns or sublets all or any portion of the Premises
shall expressly provide that the assignee or subtenant may not further assign or
sublet the assigned or sublet space without Landlord's prior consent (which
consent shall not, subject to Landlord's rights under Section 25(b), be
unreasonably withheld or delayed), and that the
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assignee or subtenant will comply with all of the provisions of this Lease and
that Landlord may enforce the Lease provisions directly against such assignee or
subtenant. If this Lease is assigned, whether or not in violation of the terms
and provisions of this Lease, Landlord may collect Rent from the assignee. If
the Premises, or any part thereof, is sublet, Landlord may, upon a default under
this Lease, collect rent from the subtenant. In either event, Landlord may apply
the amount collected from the assignee or subtenant to Tenant's obligation to
pay Rent under this Lease.
(d) EVENTS CONSTITUTING AN ASSIGNMENT OR SUBLEASE. For purposes of this
Section, the following events shall be deemed an assignment or sublease, as
appropriate:(i) the issuance of equity interests (whether stock, partnership
interests or otherwise) in Tenant, or any assignee or subtenant, if applicable,
or any entity controlling any of them, to any person or group of related
persons, in a single transaction or a series of related or unrelated
transactions, such that, following such issuance, such person or group shall
have Control (as defined below) of Tenant, or any assignee or subtenant, if
applicable; or (ii) a transfer of Control of Tenant, or any assignee or
subtenant, if applicable, or any entity controlling any of them, in a single
transaction or a series of related or unrelated transactions (including, without
limitation, by consolidation, merger, acquisition or reorganization), except
that the transfer of outstanding capital stock or other listed equity interests
by persons or parties other than "insiders" within the meaning of the Securities
Exchange Act of 1934, as amended, through the "over-the-counter" market or any
recognized national or international securities exchange, shall not be included
in determining whether Control has been transferred. "Control" shall mean direct
or indirect ownership of fifty percent (50%) or more of all the legal and
equitable interest in any business entity.
Notwithstanding anything to the contrary in this Section, Tenant may
assign this Lease or sublet the whole or any part of the Premises, including the
Right of First Offer granted to Tenant by Landlord as set forth in Section 43 of
the Rider, to: (a) any corporation in whom or with which Tenant may be merged or
consolidated, provided that the net worth of the resulting corporation is at
least equal to the greater of (i) the net worth of Tenant on the date hereof, or
(ii) the net worth of Tenant immediately prior to such merger or consolidation,
or (b) any entity to whom Tenant sells all of its assets; provided that such
corporation or such entity described in (a) and (b) above expressly assumes all
of Tenant's obligation hereunder and otherwise complies with the provisions of
Subsection 25(c) entitled "Conditions to Assignment or Sublease".
(e) PROCESSING EXPENSES. Tenant shall pay to Landlord the amount of
Landlord's cost of processing each proposed assignment or subletting, including
without limitation, attorneys' and other professional fees, and the cost of
Landlord's administrative, accounting and clerical time (collectively,
"Processing Costs"), and the amount of all direct and indirect expense incurred
by Landlord arising from the assignee or sublessee taking occupancy of the
subject space, including without limitation, costs of freight elevator operation
for moving of furnishings and trade fixtures, security service, janitorial and
cleaning service, rubbish removal service, costs of changing signage, and costs
of changing locks and making new keys (collectively, "Occupancy Costs").
Notwithstanding anything to the contrary herein, Landlord shall not be required
to process any request for Landlord's consent to an assignment or subletting
until Tenant has paid to Landlord the amount of Landlord's estimate of the
Processing Costs and the Occupancy Costs.
(f) CONSIDERATION TO LANDLORD. In the event of any assignment or
sublease, whether or not requiring Landlord's consent, Landlord shall be
entitled to receive, as Additional Rent, one-half (1/2) of any net
consideration, including without limitation, payment for leasehold improvements
owned by Landlord, paid by the assignee or subtenant for the assignment or
sublease and, in the case of sublease, one-half (1/2) of the excess of the
amount of rent paid for the sublet space by the subtenant over the total amount
of Minimum Monthly Rent under Section 5 and Additional Rent under Sections 7 and
9. Upon Landlord's request, Tenant shall assign to Landlord all amounts to be
paid to Tenant by the assignee or subtenant and shall direct such assignee or
subtenant to pay the same directly to Landlord. If there is more than one
sublease under this Lease, the amounts (if any) to be paid by Tenant to Landlord
pursuant to the preceding sentence shall be separately calculated for each
sublease and amounts due Landlord with regard to any one sublease may not be
offset against rental and other consideration pertaining due under any other
sublease.
With regard to an approved assignment or subletting, Tenant
acknowledges that Landlord's agreement to deal directly with the assignee or
subtenant with regard to such party's occupancy of the Premises and the
administration of the Lease, without requiring Tenant to monitor or become
directly involved in such matters, constitutes appropriate and acceptable
consideration for the capture by Landlord of any rent or consideration paid by
the assignee or subtenant in excess of that required to be paid by Tenant under
the Lease.
(g) PROCEDURES. If Tenant desires to assign this Lease or any interest
therein or sublet all or part of the Premises, Tenant shall give Landlord
written notice thereof designating the space proposed to be sublet and the terms
proposed. Landlord shall have the prior right and option (to be exercised by
written notice to Tenant given within fifteen (15) days after receipt of
Tenant's notice) (i) to sublet from Tenant any portion of the Premises proposed
by Tenant to be sublet, for the term for which such portion is proposed to be
sublet, but at the same Rent (including Additional Rent as provided for in
Sections 7 and 9) as Tenant is required to pay to Landlord under this Lease for
the same space, computed on a pro rata square footage basis, and during the term
of such sublease Tenant shall be released of its obligations under the Lease
with regard to the subject space, (ii) if the term of the sublease (including
any renewal terms) will expire during the final eighteen (18) months of the Term
(or if Tenant has exercised a renewal option, if any, then during the final
eighteen (18) months of the subject renewal period), to terminate this Lease as
it pertains to the portion of the Premises so proposed by Tenant to be sublet,
or (iii) to approve Tenant's proposal to sublet conditional upon Landlord's
subsequent written approval of the specific sublease obtained by Tenant and the
specific subtenant named therein. If Landlord exercises its option in (i) above,
then Landlord may, at Landlord's sole cost, construct improvements in the
subject space and, so long as the improvements are suitable for general office
purposes, Landlord shall have no obligation to restore the subject space to its
original condition following the termination of the sublease. If Landlord
exercises its option described in (iii) above, Tenant shall submit to Landlord
for
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Landlord's written approval Tenant's proposed sublease agreement (in which the
proposed subtenant shall be named) together with a current reviewed or audited
financial statement prepared by a certified public accountant for such proposed
subtenant and a credit report on such proposed subtenant prepared by a
recognized credit reporting agency. If Landlord fails to exercise any aforesaid
option to sublet or to terminate, this shall not be construed as or constitute a
waiver of any of the provisions of this Section. If Landlord exercises any such
option to sublet or to terminate, Landlord shall not have any liability for any
real estate brokerage commission(s) or with respect to any of the costs and
expenses that Tenant may have incurred in connection with its proposed
subletting, and Tenant agrees to hold Landlord harmless from and against any and
all claims (including, without limitation, claims for commissions) arising from
such proposed subletting. Landlord's foregoing rights and options shall continue
throughout the Term. For purposes of this Section, a proposed assignment of this
Lease in whole or in part shall be deemed a proposed subletting of such space.
(h) DOCUMENTATION. No permitted subletting by Tenant shall be effective
until there has been delivered to Landlord a counterpart of the sublease in
which the subtenant agrees to be and remain jointly and severally liable with
Tenant for the payment of Rent pertaining to the sublet space and for the
performance of all of the terms and provisions of this Lease; provided, however,
that the subtenant shall be liable to Landlord for rent only in the amount set
forth in the sublease. No permitted assignment shall be effective unless and
until there has been delivered to Landlord a counterpart of the assignment in
which the assignee assumes all of Tenant's obligations under this Lease arising
on or after the date of the assignment. The failure or refusal of a subtenant or
assignee to execute any such instrument shall not release or discharge the
subtenant or assignee from its liability as set forth above.
(i) NO MERGER. Without limiting any of the provisions of this Section,
if Tenant has entered into any subleases of any portion of the Premises, the
voluntary or other surrender of this Lease by Tenant, or a mutual cancellation
by Landlord and Tenant, shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or, at the
option of Landlord, operate as an assignment to Landlord of any or all such
subleases or subtenancies.
26. DEFAULT. The occurrence of any of the following shall constitute a
default by Tenant under this Lease:
(a) FAILURE TO PAY RENT. Failure to pay Rent when due, if the failure
continues for a period of three (3) days after notice of such default has been
given by Landlord to Tenant.
(b) FAILURE TO COMPLY WITH RULES AND REGULATIONS. Failure to comply
with the Rules and Regulations, if the failure continues for a period of ten
(10) days after notice of such default is given by Landlord to Tenant. If the
failure to comply cannot reasonably be cured within ten (10) days, then Tenant
shall not be in default under this Lease if Tenant commences to cure the failure
to comply within ten (10) days and diligently and in good faith continues to
cure the failure to comply.
(c) OTHER DEFAULTS. Failure to perform any other provision of this
Lease, if the failure to perform is not cured within thirty (30) days after
notice of such default has been given by Landlord to Tenant. If the default
cannot reasonably be cured within thirty (30) days, then Tenant shall not be in
default under this Lease if Tenant commences to cure the default within thirty
(30) days and diligently and in good faith continues to cure the default.
(d) APPOINTMENT OF TRUSTEE OR RECEIVER. The appointment of a trustee or
receiver to take possession of substantially all of the Tenant's assets located
at the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within sixty (60) days; or the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is not discharged
within sixty (60) days.
27. REMEDIES. If Tenant commits a default, Landlord shall have the
following alternative remedies, which are in addition to any remedies now or
later allowed by law:
(a) MAINTAIN LEASE IN FORCE. Maintain this Lease in full force and
effect and recover the Rent and other monetary charges as they become due,
without terminating Tenant's right to possession, irrespective of whether Tenant
shall have abandoned the Premises. If Landlord elects to not terminate the
Lease, Landlord shall have the right to attempt to re-let the Premises at such
rent and upon such conditions and for such a term, and to do all acts necessary
to maintain or preserve the Premises as Landlord deems reasonable and necessary
without being deemed to have elected to terminate the Lease including removal of
all persons and property from the Premises; such property may be removed and
stored in a public warehouse or elsewhere at the cost of and for the account of
Tenant. In the event any such re-letting occurs, this Lease shall terminate
automatically upon the new Tenant taking possession of the Premises.
Notwithstanding that Landlord fails to elect to terminate the Lease initially,
Landlord at any time during the term of this Lease may elect to terminate this
Lease by virtue of such previous default of Tenant.
(b) TERMINATE LEASE. Terminate Tenant's right to possession by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default including without limitation thereto, the
following: (i) The worth at the time of award of any unpaid Rent which had been
earned at the time of such termination; plus (ii) the worth at the time of award
of the amount by which the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus (iii) the worth at the
time of award of the amount by which the unpaid Rent for the balance of the Term
after the time of award exceeds the amount of such rental loss that is proved
could be reasonably avoided; plus (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to
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perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including without limitation, any
costs or expenses incurred by Landlord in (A) retaking possession of the
Premises, including reasonable attorney fees therefor, (B) maintaining or
preserving the Premises after such default, (C) preparing the Premises for
reletting to a new tenant, including repairs or necessary alterations to the
Premises for such reletting, (D) leasing commissions, and (E) any other costs
necessary or appropriate to relet the Premises; plus (v) at Landlord's election,
such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by applicable state law. Upon any such re-entry
Landlord shall have the right to make any reasonable repairs, alterations or
modifications to the Premises, which Landlord in its sole discretion deems
reasonable and necessary. As used in Subsection 27(b)(i) the "worth at the time
of award" is computed by allowing interest at the rate of eighteen percent (18%)
per year from the date of default. As used in Subsections 27(b)(ii) and
27(b)(iii) the "worth at the time of award" is computed by discounting such
amounts at the discount rate of eight percent (8%) per year.
28. BANKRUPTCY.
(a) ASSUMPTION OF LEASE. If 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.
(ii) For purposes of this Section, 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; (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 two (2) month's Minimum Monthly Rent to be
held by Landlord (without any allowance for interest thereon) to secure Tenant's
future performance under the Lease.
(b) ASSIGNMENT OF LEASE. If the Trustee or Tenant has assumed the Lease
pursuant to the provisions of this Section 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.
(c) 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, the payment of Minimum Monthly Rent, Tenant's Share of Real
Property Taxes, Tenant's Share of Operating Costs and any other sums payable by
Tenant to Landlord under this Lease 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.
29. LIMITATION OF ACTIONS. Any claim, demand, right or defense of any kind
by Tenant which is based upon or arises in connection with this Lease or the
negotiations prior to its execution, shall be barred unless Tenant commences an
action thereon, or interposes in a legal proceeding a defense by reason thereof,
within one (1) year after the date of the act or omission on which such claim,
demand, right or defense is based.
30. LIMITATION ON LANDLORD'S LIABILITY. Anything in this Lease to the
contrary notwithstanding, covenants, undertakings and agreements herein made on
the part of Landlord are made and intended not as personal
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covenants, undertakings and agreements or for the purpose of binding Landlord
personally or the assets of Landlord except Landlord's interest in the Property,
but are made and intended for the purpose of binding only the Landlord's
interest in the Property. No personal liability or personal responsibility is
assumed by, nor shall at any time be asserted or enforceable against Landlord or
its partners and their respective heirs, legal representatives, successors and
assigns on account of this Lease or on account of any covenant, undertaking or
agreement of Landlord contained in this Lease.
31. SIGNS. Tenant shall not have the right to place, construct or maintain
any sign, advertisement, awning, banner or other exterior decoration without
Landlord's consent, which shall not be unreasonably withheld. Any sign that
Tenant has Landlord's consent to place, construct and maintain shall comply with
all laws, and Tenant shall obtain any approval required by such laws. Landlord
makes no representation with respect to Tenant's ability to obtain such
approval.
32. LANDLORD'S RIGHT TO ENTER THE PREMISES. Landlord and its authorized
representatives shall have the right to enter the Premises at reasonable times
and upon reasonable prior notice (except in an emergency when no such notice
shall be required) for any of the following purposes:(i) to determine whether
the Premises are in good condition and whether Tenant is complying with its
obligations under this Lease, (ii) to do any maintenance; to make any
restoration to the Premises or the Building that Landlord has the right or the
obligation to perform, and to make any improvements to the Premises or the
Building that Landlord deems necessary, (iii) to serve, post or keep posted any
notices required or allowed under the provisions of this Lease, (iv) to post any
ordinary "For Sale" signs at any time during the Term and to post any ordinary
"For Lease" signs during the last ninety (90) days of the Term, and (v) to show
the Premises to prospective brokers, agents, purchasers, tenants or lenders, at
any time during the Term.
Landlord shall not be liable in any manner for any inconvenience,
annoyance, disturbance, loss of business, nuisance, or other damage arising out
of Landlord's entry on the Premises as provided in this Section, except damage
resulting from the negligent or willful acts of Landlord or its authorized
representatives. Tenant shall not be entitled to an abatement or reduction of
Rent if Landlord exercises any right reserved in this Section. Landlord shall
conduct its activities on the Premises as allowed in this Section in a
reasonable manner so as to cause minimal inconvenience, annoyance or disturbance
to Tenant.
33. SUBORDINATION. This Lease is and shall be prior to any mortgage
recorded after the date of this Lease affecting the Property. If, however, a
lender requires that this Lease be subordinate to any mortgage, this Lease shall
be subordinate to that mortgage if Landlord first obtains from the lender a
written agreement that provides substantially the following:
"As long as Tenant performs its obligations under this 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 attorn to any purchaser at any foreclosure sale, or to any
grantee or transferee designated in any deed given in lieu of foreclosure.
Tenant shall execute the written agreement and any other documents required by
the lender to accomplish the purposes of this Section.
34. RIGHT TO ESTOPPEL CERTIFICATES. Tenant, within ten (10) days after
notice from Landlord, shall execute and deliver to Landlord, in recordable form,
a certificate stating that this Lease is unmodified and in full force and
effect, or in full force and effect as modified and stating the modifications.
The certificate shall also state the amount of Minimum Monthly Rent, the dates
to which Rent has been paid in advance, and the amount of any Prepaid Rent or
Security Deposit and such other matters as Landlord may reasonably request.
Failure to deliver the certificate within such ten (10) day period shall be
conclusive upon Tenant for the benefit of Landlord and any successor to
Landlord, that this Lease is in full force and effect and has not been modified
except as may be represented by Landlord requesting the certificate.
35. TRANSFER OF LANDLORD'S INTEREST. If Landlord sells or transfers the
Property, Landlord, on consummation of the sale or transfer, shall be released
from any liability thereafter accruing under this Lease if Landlord's successor
has assumed in writing, for the benefit of Tenant, Landlord's obligations under
this Lease. If any Security Deposit or Prepaid Rent has been paid by Tenant,
Landlord shall transfer such Security Deposit or Prepaid Rent to Landlord's
successor and on such transfer Landlord shall be discharged from any further
liability with respect to such Security Deposit or Prepaid Rent.
36. ATTORNEYS' FEES. If either party shall bring any action for relief against
the other party, declaratory or otherwise, arising out of this Lease, including
any action by Landlord for the recovery of Rent or possession of the Premises,
the losing party shall pay the successful party a reasonable sum for attorneys'
fees which shall be deemed to have accrued on the commencement of such action
and shall be paid whether or not such action is prosecuted to judgment.
37. SURRENDER; HOLDING OVER.
(a) SURRENDER. On expiration or ten (10) days after termination of the
Term, Tenant shall surrender the Premises and all Tenant's improvements and
alterations to Landlord broom clean and in good condition. Tenant shall remove
all of its trade fixtures and personal property within the time period stated in
this Section. Tenant, at its cost, shall perform all restoration made necessary
by, and repair any damage to the Premises caused by, the removal of its trade
fixtures, personal property and signs to Landlord's reasonable satisfaction
within the time period stated in this Section. Landlord may, at its election,
retain or dispose of in any manner any of Tenant's trade fixtures or personal
property that Tenant does not remove from the Premises on expiration or within
ten (10) days after termination of the Term as allowed or required by the
provisions of this
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Lease by giving ten (10) days notice to Tenant. Title to any such trade fixtures
and personal property that Landlord elects to retain or dispose of on expiration
of such ten (10) day period shall vest in Landlord. Tenant waives all claims
against Landlord for any damage to Tenant resulting from Landlord's retention or
disposition of any such trade fixtures and personal property. Tenant shall be
liable to Landlord for Landlord's costs for storing, removing and disposing of
Tenant's trade fixtures and personal property. If Tenant fails to surrender the
Premises to Landlord on expiration or ten (10) days after termination of the
Term as required by this Section, Tenant shall pay Landlord Rent in an amount
equal to one and one-half (1-1/2) times the Minimum Monthly Rent applicable for
the month immediately prior to the expiration or termination of the Term for the
entire time Tenant thus remains in possession and Tenant shall hold Landlord
harmless from all damages resulting from Tenant's failure to timely surrender
the Premises, including without limitation, (i) any Rent payable by, or any
damages claimed by, any prospective tenant of any part or all of the Premises,
and (ii) Landlord's damages resulting from such prospective tenant rescinding or
refusing to enter into the prospective lease of part or all of the Premises by
reason of Tenant's failure to timely surrender the Premises. If Tenant, without
Landlord's prior consent, remains in possession of the Premises after expiration
or termination of the Term, or after the date in any notice given by Landlord to
Tenant terminating this Lease, such possession by Tenant shall be deemed to be a
tenancy at sufferance terminable at any time by either party.
(b) HOLDING OVER WITH LANDLORD'S CONSENT. If Tenant, with Landlord's
prior consent, remains in possession of the Premises after expiration or
termination of the Term, or after the date in any notice given by Landlord to
Tenant terminating this Lease, such possession by Tenant shall be deemed to be a
month-to-month tenancy terminable by Landlord by a notice given to Tenant at
least twenty (20) days prior to the end of any such monthly period or by Tenant
by a notice given to Landlord at least thirty (30) days prior to the end of any
such monthly period. During such month-to-month tenancy, Tenant shall pay Rent
in the amount then agreed to in writing by Landlord and Tenant. All provisions
of this Lease, except those pertaining to term, shall apply to the
month-to-month tenancy.
38. AGENCY DISCLOSURE; BROKER.
(a) AGENCY DISCLOSURE. ▇▇▇▇▇▇ ▇▇▇▇▇ Inc hereby discloses that it
represents the Landlord in this transaction.
(b) BROKER. Landlord and Tenant each represent to the other that
neither is represented by any broker, agent or finder with respect to this Lease
in any manner, except the Broker(s). The commission due to the Broker(s) shall
be paid by Landlord pursuant to a separate agreement. Each party agrees to
indemnify and hold the other party harmless from and against any and all
liability, costs, damages, causes of action or other proceedings instituted by
any broker, agent or finder, licensed or otherwise, claiming through, under or
by reason of the conduct of the indemnifying party in any manner whatsoever in
connection with this Lease. If Tenant engages a broker, agent or finder other
than Washington Partners, Inc. to represent Tenant in connection with any
renewal of this Lease, then the commission or any fee of such broker, agent or
finder shall be paid by Tenant.
39. INTEREST ON UNPAID RENT. In addition to the Late Charge as provided in
Section 5(b), Rent not paid when due shall bear interest from the date due until
paid at the rate of eighteen percent (18%) per year, or the maximum legal rate
of interest, whichever is less.
40. CONSENT. Whenever the consent of either Landlord or Tenant is required
under this Lease, such consent shall not be effective unless given in writing
and shall not be unreasonably withheld or delayed, provided, however, that such
consent may be conditioned as provided in this Lease.
41. DEFINITIONS. As used in this Lease, the following words and phrases,
whether or not capitalized, shall have the following meanings:
(a) "Additional Rent" means pass-throughs of increases in Operating
Costs and Taxes, as defined in this Lease, and other monetary sums to be paid by
Tenant to Landlord under the provisions of this Lease.
(b) "Alteration" means any addition or change to, or modification of,
the Premises made by Tenant, including without limitation, fixtures, but
excluding trade fixtures as defined in this Section.
(c) "Authorized representatives" means any officer, agent, employee,
independent contractor or invitee of either party.
(d) "Award" means all compensation, sums or anything of value awarded,
paid or received on a total or partial condemnation.
(e) "Common Areas" means all areas outside the Premises and within the
Building or on the Land that are provided and designated by Landlord from time
to time for the general, non-exclusive use of Landlord, Tenant and other tenants
of the Building and their authorized representatives, including without
limitation, common entrances, lobbies, corridors, stairways and stairwells,
elevators, escalators, public restrooms and other public portions of the
Building.
(f) "Condemnation" means the exercise of any governmental power,
whether by legal proceedings or otherwise, by a condemnor and a voluntary sale
or transfer by Landlord to any condemnor, either under threat of condemnation or
while legal proceedings for condemnation are pending.
(g) "Condemnor" means any public or quasi-public authority or entity
having the power of condemnation.
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(h) "Damage" means any injury, deterioration, or loss to a person,
property, the Premises or the Building caused by another person's acts or
omissions or by Acts of God. Damage includes death.
(i) "Damages" means a monetary compensation or indemnity that can be
recovered in the courts by any person who has suffered damage to his person,
property or rights through another's acts or omissions.
(j) "Date of taking" means the date the condemnor has the right to
possession of the property being condemned.
(k) "Encumbrance" means any mortgage, deed of trust or other written
security device or agreement affecting the Premises, and the note or other
obligation secured by it, that constitutes security for the payment of a debt or
performance of an obligation.
(l) "Expiration" means the coming to an end of the time specified in
the Lease as its duration, including any extension of the Term.
(m) "Force majeure" means strikes, lockouts, labor disputes, shortages
of labor or materials, fire or other casualty, Acts of God or any other cause
beyond the reasonable control of a party.
(n) "Good condition" means the good physical condition of the Premises
and each portion of the Premises, including without limitation, all of the
Tenant Improvements, Tenant's alterations, Tenant's trade fixtures, Tenant's
Personal Property, all as defined in this Section, signs, walls, interior
partitions, windows, window coverings, glass, doors, carpeting and resilient
flooring, ceiling tiles, plumbing fixtures and lighting fixtures, all of which
shall be in conformity with building standard finishes, ordinary wear and tear,
damage by fire or other casualty and taking by condemnation excepted.
(o) "Hazardous substances" means any industrial waste, toxic waste,
chemical contaminant or other substance considered hazardous, toxic or lethal to
persons or property or designated as hazardous, toxic or lethal to persons or
property under any laws, including without limitation, asbestos material or
materials containing asbestos.
(p) "Hold harmless" means to defend and indemnify from all liability,
losses, penalties, damages as defined in this Section, costs, expenses
(including without limitation, attorneys' fees), causes of action, claims or
judgments arising out of or related to any damage, as defined in this Section,
to any person or property.
(q) "Law" means any constitution, statute, ordinance, regulation, rule,
resolution, judicial decision, administrative order or other requirement of any
federal, state, county, municipal or other governmental agency or authority
having jurisdiction over the parties or the Property, or both, in effect either
at the time of execution of this Lease or at any time during the Term, including
without limitation, any regulation or order of a quasi-official entity or body
(e. g. board of fire examiners or public utilities) and any legally effective
conditions, covenants or restrictions affecting the Property.
(r) "Lender" means the mortgagee, beneficiary, secured party or other
holder of an encumbrance, as defined in this Section.
(s) "Lien" means a charge imposed on the Premises by someone other than
Landlord, by which the Premises are made security for the performance of an act.
(t) "Maintenance" means repairs, replacement, repainting and cleaning.
(u) "Mortgage" means any deed of trust, mortgage or other written
security device or agreement affecting the Premises, and the note or other
obligation secured by it, that constitutes security for the payment of a debt or
performance of an obligation.
(v) "Mortgagee" means the beneficiary under a deed of trust or
mortgagee under a mortgage.
(w) "Mortgagor" means the grantor or trustor under a deed of trust or
mortgagor under a mortgage.
(x) "Operating Costs" means all costs of any kind incurred by Landlord
in operating, cleaning, equipping, protecting, lighting, repairing, replacing,
heating, air-conditioning, maintaining and insuring the Property. Operating
Costs shall include, without limitation, the following costs:(i) salaries,
wages, bonuses and other compensation (including hospitalization, medical,
surgical, retirement plan, pension plan, union dues, life insurance, including
group life insurance, welfare and other fringe benefits, and vacation, holidays
and other paid absence benefits) relating to employees of Landlord or its agents
directly engaged in the operation, repair, or maintenance of the Property; (ii)
payroll, social security, workers' compensation, unemployment and similar taxes
with respect to such employees of Landlord or its authorized representatives,
and the cost of providing disability or other benefits imposed by law or
otherwise, with respect to such employees; (iii) uniforms (including the
cleaning, replacement and pressing thereof) provided to such employees; (iv)
premiums and other charges incurred by Landlord with respect to fire,
earthquake, other casualty, all risk, rent loss and liability insurance, any
other insurance as is deemed necessary or advisable in the reasonable judgment
of Landlord and, after the Base Year, costs of repairing an insured casualty to
the extent of the deductible amount under the applicable insurance policy; (v)
water charges and sewer rents or fees; (vi) license, permit and inspection fees;
(vii) sales, use and excise taxes on goods and services purchased by Landlord in
connection with the operation, maintenance or repair of the Property and
Building systems and equipment; (viii) telephone, facsimile, messenger, express
delivery service, postage, stationery supplies and other expenses incurred in
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connection with the operation, management, maintenance, or repair of the
Property; (ix) property management fees and expenses; (x) repairs to and
physical maintenance of the Property, including building systems and
appurtenances thereto and normal repair and replacement of worn-out equipment,
facilities and installations, but excluding the replacement of major building
systems (except to the extent provided in (xvi) and (xvii) below); (xi)
janitorial, window cleaning, security, extermination, water treatment, rubbish
removal, plumbing and other services and inspection or service contracts for
elevator, electrical, HVAC, mechanical and other building equipment and systems
or as may otherwise be necessary or proper for the operation or maintenance of
the Property; (xii) supplies, tools, materials, and equipment used in connection
with the operation, maintenance or repair of the Property; (xiii) accounting,
legal and other professional fees and expenses; (xiv) painting the exterior or
the public or common areas of the Building and the cost of maintaining the
sidewalks, landscaping and other common areas of the Property; (xv) all costs
and expenses for electricity, chilled water, air conditioning, water for
heating, gas, fuel, steam, heat, lights, power and other energy related
utilities required in connection with the operation, maintenance and repair of
the Property; (xvi) the cost of any improvements which Landlord elects to
capitalize made by Landlord to the Property during the Term in compliance with
the requirements of any laws or regulation or insurance requirement with which
the Property was not required to comply during the Base Year, as reasonably
amortized by Landlord, with interest on the unamortized balance at the rate of
twelve percent (12%) per year, or the maximum legal rate of interest, whichever
is less; (xvii) the cost of any improvements which Landlord elects to capitalize
made by Landlord to the Property during the term of this Lease for the
protection of the health and safety of the occupants of the Property or that are
intended to reduce other Operating Costs, as reasonably amortized by Landlord,
with interest on the unamortized balance at the rate of twelve percent (12%) per
year, or the maximum legal rate of interest, whichever is less; (xviii) a
reasonable reserve for repair or replacement of equipment used in the
maintenance or operation of the Property; (xix) the cost of furniture,
draperies, carpeting, landscaping and other customary and ordinary items of
personal property (excluding paintings, sculptures and other works of art)
provided by Landlord for use in common areas of the Building or in the Building
office (to the extent that such Building office is dedicated to the operation
and management of the Property), such costs to be amortized over the useful life
thereof; (xx) any such expenses and costs resulting from substitution of work,
labor, material or services in lieu of any of the above itemizations, or for any
such additional work, labor, services or material resulting from compliance with
any laws or orders applicable to the Property; (xxi) Building office rent or
rental value; and (xxii) all other costs which, in accordance with generally
accepted accounting principles used by Landlord, as applied to the maintenance
and operation of office and/or retail buildings, are properly chargeable to the
operation and maintenance of the Property.
Operating Costs shall not include the following:(i) depreciation on the
Building; (ii) debt service; (iii) capital improvements, except as otherwise
provided in clauses (xvi) and (xvii) above, (iv) rental under any ground or
underlying leases; (v) Real Property Taxes, (vi) attorneys' fees and expenses
incurred in connection with lease negotiations with prospective tenants; (vii)
the cost of tenant improvements; (viii) advertising expenses; or (ix) real
estate broker's or other leasing commissions.
(y) "Parties" means Landlord and Tenant.
(z) "Party" means Landlord or Tenant.
(aa) "Person" means one or more human beings, or legal entities or
other artificial persons, including without limitation, partnerships,
corporations, trusts, estates, associations and any combination of human beings
and legal entities.
(bb) "Property" means the Premises, Building and Land.
(cc) "Provision" means any term, agreement, covenant, condition,
clause, qualification, restriction, reservation, or other stipulation in the
Lease that defines or otherwise controls, establishes, or limits the performance
required or permitted by either party.
(dd) "Real Property Taxes" means any form of tax, assessment, general
assessment, special assessment, lien, levy, bond obligation, license fee,
license tax, tax or excise on rent, or any other levy, charge or expense,
together with any statutory interest thereon, (individually and collectively,
the "Impositions"), now or hereafter imposed or required by any authority having
the direct or indirect power to tax, including any federal, state, county or
city government or any school, agricultural, lighting, drainage or other
improvement or special assessment district thereof, (individually and
collectively, the "Governmental Agencies") on any interest of Landlord or Tenant
or both (including any legal or equitable interest of Landlord or its mortgagee,
if any) in the Premises or the Property, including without limitation:
(i) any Impositions upon, allocable to or measured by the area
of the Premises or the Property, or the rental payable hereunder, including
without limitation, any gross income tax or excise tax levied by any
Governmental Agencies with respect to the receipt of such rental; or
(ii) any Impositions upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair or use or
occupancy by Tenant of the Premises or any portion thereof; or
(iii) any Impositions upon or with respect to the building
equipment and personal property used in connection with the operation and
maintenance of the Property or upon or with respect to the furniture, fixtures
and decorations in the common areas of the Property.
(iv) any Impositions upon this Lease or this transaction or any
document to which Tenant is a party creating or transferring an interest or an
estate in the Premises; or
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(v) any Impositions by Governmental Agencies (whether or not
such Impositions constitute tax receipts) in substitution, partially or totally,
of any impositions now or previously included within the definition of real
property taxes, including those calculated to increase tax increments to
Governmental Agencies and to pay for such services as fire protection, water
drainage, street, sidewalk and road maintenance, refuse removal or other
governmental services formerly provided without charge to property owners or
occupants; or
(vi) any and all costs, including without limitation, the fees of
attorneys, tax consultants and experts, incurred by Landlord should Landlord
elect to negotiate or contest the amount of such real property taxes in formal
or informal proceedings before the Governmental Agency imposing such real
property taxes; provided, however, that real property taxes shall in no event
include Landlord's general income, inheritance, estate, gift or franchise taxes.
(ee) "Rent" means Minimum Monthly Rent, as adjusted from time to time
under this Lease, Additional Rent, Prepaid Rent, Security Deposit, all as
defined in this Section, payments of Tenant's Share of increases in Real
Property Taxes and Operating Costs, insurance, utilities and other charges
payable by Tenant to Landlord.
(ff) "Rentable square feet of space" as to the Premises or the
Building, as the case may be, means the number of usable square feet of space
times the applicable R/U Ratio(s) as defined in this Section.
(gg) "Restoration" means the reconstruction, rebuilding, rehabilitation
and repairs that are necessary to return damaged portions of the Premises and
the Building to substantially the same physical condition as they were in
immediately before the damage.
(hh) "R/U Ratio" means the rentable area of a floor of the Building
divided by the usable area of such floor, both of which shall be computed in
accordance with American National Standard ▇▇▇.▇-▇▇▇▇ ▇▇▇▇▇▇ of Measuring Floor
Space in Office Buildings as published by the Building Owners and Managers
Association, as amended from time to time.
(ii) "Substantially complete" or "substantially completed" or
"substantial completion" means the completion of Landlord's construction
obligation, subject to completion or correction of "punch list" items, that is,
minor items of incomplete or defective work or materials or mechanical
maladjustments that are of such a nature that they do not materially interfere
with or impair Tenant's use of the Premises for the Permitted Use.
(jj) "Successor" means assignee, transferee, personal representative,
heir, or other person or entity succeeding lawfully, and pursuant to the
provisions of this Lease, to the rights or obligations of either party.
(kk) "Tenant Improvements" means (i) the improvements and alterations
set forth in Exhibit C, (ii) window coverings, lighting fixtures, plumbing
fixtures, cabinetry and other fixtures installed by either Landlord or Tenant at
any time during the Term, and (iii) any improvements and alterations of the
Premises made for Tenant by Landlord at any time during the Term.
(ll) "Tenant's personal property" means Tenant's equipment, furniture,
and movable property placed in the Premises by Tenant.
(mm) "Tenant's trade fixtures" means any property attached to the
Premises by Tenant.
(nn) "Termination" means the ending of the Term for any reason before
expiration, as defined in this Section.
(oo) "Work" means the construction of any improvements or alterations
or the performance of any repairs done by Tenant or caused to be done by Tenant
on the Premises as permitted by this Lease.
42. MISCELLANEOUS PROVISIONS.
(a) ENTIRE AGREEMENT. This Lease sets forth the entire agreement of the
parties as to the subject matter hereof and supersedes all prior discussions and
understandings between them. This Lease may not be amended or rescinded in any
manner except by an instrument in writing signed by a duly authorized officer or
representative of each party hereto.
(b) GOVERNING LAW. This Lease shall be governed by, and construed and
enforced in accordance with, the laws of the State of Washington.
(c) SEVERABILITY. Should any of the provisions of this Lease be found
to be invalid, illegal or unenforceable by any court of competent jurisdiction,
such provision shall be stricken and the remainder of this Lease shall
nonetheless remain in full force and effect unless striking such provision shall
materially alter the intention of the parties.
(d) JURISDICTION. In the event any action is brought to enforce any of
the provisions of this Lease, the parties agree to be subject to exclusive in
personam jurisdiction in the Superior Court, King County, for the State of
Washington or in the United States District Court for the Western District of
Washington and agree that in any such action venue shall lie exclusively at
Seattle, Washington.
(e) WAIVER. No waiver of any right under this Lease shall be effective
unless contained in a writing signed by a duly authorized officer or
representative of the party sought to be charged with the waiver and no
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waiver of any right arising from any breach or failure to perform shall be
deemed to be a waiver of any future right or of any other right arising under
this Lease.
(f) CAPTIONS. Section captions contained in this Lease are included for
convenience only and form no part of the agreement between the parties.
(g) NOTICES. All notices or requests required or permitted under this
Lease shall be in writing. If given by Landlord such notices or requests may be
personally delivered or sent by certified mail, return receipt requested,
postage prepaid. If given by Tenant such notices or requests may be personally
delivered or sent by certified mail, return receipt requested, postage prepaid.
Such notices or requests shall be deemed given when so delivered or mailed,
irrespective of whether such notice or request is actually received by the
addressee. All notices or requests to Landlord shall be sent to Landlord at
Landlord's Address for Notice and all notices or requests to Tenant shall be
sent to Tenant at Tenant's Address for Notice. Either party may change the
address to which notices shall be sent by notice to the other party.
(h) BINDING EFFECT. Subject to the provisions of Section 25 captioned
"Assignment and Subletting", this Lease shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns. No
permitted assignment of this Lease or Tenant's rights hereunder shall be
effective against Landlord unless and until an executed counterpart of the
instrument of assignment shall have been delivered to Landlord and Landlord
shall have been furnished with the name and address of the assignee. The term
"Tenant" shall be deemed to include the assignee under any such permitted
assignment.
(i) EFFECTIVENESS. This Lease shall not be binding or effective until
properly executed and delivered by Landlord and Tenant.
(j) GENDER AND NUMBER. As used in this Lease, the masculine shall
include the feminine and neuter, the feminine shall include the masculine and
neuter, the neuter shall include the masculine and feminine, the singular shall
include the plural and the plural shall include the singular, as the context may
require.
(k) TIME OF THE ESSENCE. Time is of the essence in the performance of
all covenants and conditions in this Lease for which time is a factor.
DATED the date first above written.
LANDLORD: TENANT:
Pacific NW Title Building, Inc., a ▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation
Washington corporation
/s/ ▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By________________________________ By______________________________________
President Vice President - Operations
Its_______________________________ Its_____________________________________
By________________________________ By______________________________________
Its_______________________________ Its_____________________________________
This Lease has been prepared for submission to you and your attorney. ▇▇▇▇▇▇
▇▇▇▇▇ Inc is not authorized to give legal or tax advice. Neither Landlord nor
▇▇▇▇▇▇ ▇▇▇▇▇ Inc makes any representations or recommendations as to the legal
sufficiency, legal effect or tax consequences of this document or any
transaction relating thereto. These are questions for your attorney with whom
you should consult before signing the document to determine whether your legal
rights are adequately protected.
[Notary attached]
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