EXHIBIT 10.6.1
1. BASIC LEASE TERMS
A. DATE OF LEASE: June 28, 2001
B. TENANT: Blue Nile, Inc., a Delaware corporation
Trade Name:
Address (Leased Premises): 0000 Xxxxxx Xxx. S., Seattle,
WA 98134
Building Unit:____________________
Address (For Notices):
At the Premises.
Attention:________________________
Telephone:________________________
Facsimile:________________________
With copy to:
Blue Nile, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx XX 00000
Attention: Chief Operating Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
C. LANDLORD: Gull Industries Inc., a Washington corporation
Address (For Notices): P.O. Box 24687, Seattle, WA 98124
Attention: Xxxxxxx X. Xxxxxx
Xxxxxxxxx: (000) 000-0000
Facsimile: (000) 000-0000
or to such other place as Landlord may from time to time
designate by written notice to Xxxxxx.
D. TENANT'S USE OF PREMISES: General office and uses related to a
wholesale and/or retail jewelry fulfillment center, including
but not limited to, shipping, receiving, warehousing and
manufacturing of high-end jewelry products.
E. PREMISES AREA: Approximately 9,400 Rentable Square Feet
F. PROJECT AREA: Approximately 27,200 Rentable Square Feet
G. TERM OF LEASE: The term ("Term") of this Lease shall commence
on the Commencement Date as set forth in Section 3 and shall
terminate on the last day of the sixtieth (60th) full calendar
month after the Commencement Date (the "Expiration Date"). The
anticipated date for the Commencement Date is August 24, 2001.
H. BASE MONTHLY RENT (months refer to period through the
applicable full calendar month):
Period Rent/RSF/Year
------ -------------
Commencement Date - Month 12 $9.50 7441.67/MO
Month 13 - Month 24 $10.00 7833.33/MO
Month 25 - Month 36 $10.50 8225.00/MO
Month 37 - Month 48 $11.00 8616.67/MO
Month 49 - Month 60 $12.00 9400.00/MO
I. PREPAID RENT (for months in addition to first month's rent):
N/A
J. SECURITY DEPOSIT: See Section 6.
X. XXXXXX(S): Tenant's Broker: Xxxxx Xxxxxxxx, Xxxxxx Xxxxxxx
Xxxxxx; Landlord's Broker: Xxx Xxxxxxxx, Xxxxxxxx
L. GUARANTOR(S): None.
M. EXHIBITS:
Exhibit A - The Premises
Exhibit B - The Project
Exhibit C - Landlord's Work and Work Letter Agreement
Exhibit D - Rules and Regulations
Exhibit E - Tenant Sign Criteria
Exhibit F - Additional Utilities or Services [if applicable]
Exhibit G - Permitted Substances
Exhibit H - Location of Reserved Parking Stalls
2. PREMISES/COMMON AREAS/PROJECT.
A. PREMISES. Landlord leases to Tenant the premises described in
Section 1 and in Exhibit A (the "Premises"), located in this
project described on Exhibit B (the "Project"). By entry on
the Premises, Xxxxxx acknowledges that it has examined the
Premises and accepts the Premises in their present condition,
subject to any Landlord's Work required under this Lease.
Landlord's Work shall consist of such work, if any, as is
specifically identified as Landlord's construction
responsibility under Exhibit C. Unless otherwise identified in
the punchlist or otherwise in written notice from Tenant to
Landlord prior to the dates specified below, Landlord's Work
shall be deemed approved by Tenant in all respects on the date
Tenant begins to move its personal property into the Premises.
Prior to the Commencement Date, Landlord shall schedule with
Tenant an inspection of Landlord's Work. Following such
inspection, Xxxxxxxx's architect shall prepare a "punch list"
(as such term is used in the construction industry) of such
Landlord's Work. The existence of defects of a nature commonly
found on a punchlist shall not postpone the date of
substantial completion of Landlord's Work or result in a delay
or abatement of Tenant's obligation to pay rent or give rise
to a damage claim against Landlord. Landlord shall use
reasonable best efforts to complete all items on the punch
list within thirty (30) days after preparation thereof.
2.
B. COMMON AREAS. As used in this Lease, "Common Areas" shall mean
all portions of the Project not leased or demised for lease to
specific tenants. During the Lease Term, Tenant and its
licensees, invitees, customers and employees shall have the
non-exclusive right to use the public portions of the Common
Areas, including all parking areas, landscaped areas,
entrances, lobbies, elevators, stairs, corridors, and public
restrooms in common with Landlord, other Project tenants and
their respective licensees, invitees, customers and employees.
Landlord shall at all times have exclusive control and
management of the Common Areas and no diminution thereof shall
be deemed a constructive or actual eviction or entitle Tenant
to compensation or a reduction or abatement of rent. Landlord
in its discretion may increase, decrease or change the number,
locations and dimensions of any Common Areas and other
improvements shown on Exhibit A which are not within the
Premises, so long as the same does not materially interfere
with Xxxxxx's use and enjoyment of and access to the Premises
and parking rights hereunder.
C. PROJECT. Landlord reserves the right in its sole discretion to
modify or alter the configuration or number of buildings in
the Project so long as the same does not materially interfere
with Tenant's use and enjoyment of and access to the Premises
and parking rights hereunder, and provided further that upon
such modification or alteration, the Project Area as set forth
in Section 1(f) shall be adjusted to reflect such modification
or alteration.
D. RENTABLE SQUARE FOOTAGE. Within ninety (90) days after the
Commencement Date of this Lease, Landlord shall cause its
architect to compute (with copy to Tenant) the Rentable Square
Footage of the Premises and the Project to be computed in
accordance with American National Standard Z65.1-1996 Method
of Measuring Floor Space in Office Buildings as published by
the Building Owners and Managers Association, as amended from
time to time, and this Lease shall be deemed amended to
incorporate such measurement.
3. TERM. The Commencement Date listed in Section I of this Lease
represents an estimate of the Commencement Date. This Lease shall
commence on the estimated Commencement Date if tenant improvement work
required of Landlord pursuant to this Lease ("Landlord's Work") is
substantially completed (as that term is used in the construction
industry) by such date and Tenant has had at least 75 days access to
the premises for construction of Tenant's Work (which access may
require coordination with Landlord's Work), but otherwise the
Commencement Date shall be first to occur of the following events (i)
the date on which Landlord notifies Tenant that Landlord's Work is
substantially complete, and Tenant has had at least 75 days access to
the premises for construction of Tenant's Work (which access may
require coordination with Landlord's Work), (ii) the date on which
Xxxxxx takes possession or commences beneficial occupancy of the
Premises, or (iii) if substantial completion of Landlord's Work is
delayed due to Tenant's failure to perform its obligations under this
Lease, then the date determined by Landlord as the date upon which
Xxxxxxxx's Work would have been substantially completed, and Tenant has
had at least 75 days access to the premises for construction of
Tenant's Work (which access may require coordination with Landlord's
3.
Work), but for Xxxxxx's failure to perform. If this Commencement Date
is later than the Section 1 Commencement Date, this Lease shall not be
void or voidable, nor shall Landlord be liable to Tenant for any loss
or damage resulting therefrom. Landlord shall confirm the Commencement
Date by written notice to Tenant. This Lease shall be for a term
("Lease Term") beginning on the Commencement Date and ending on the
Expiration Date, unless extended or sooner terminated in accordance
with the terms of this Lease. All provisions of this Lease, other than
those relating to payment of Base Monthly Rent and Additional Rent,
shall become effective on the date that Tenant or its officers, agents,
employees or contractors is first present on the Premises for
inspection, construction or move in purposes.
4. RENT
A. BASE MONTHLY RENT. Tenant shall pay Landlord monthly base rent
in the initial amount in Section 1 which shall be payable
monthly in advance on the first day of each and every calendar
month ("Base Monthly Rent") provided, however, the first
month's Base Monthly Rent (in the estimated amount of $7,441)
is due and payable upon execution of this Lease.
For purposes of Section 467 of the Internal Revenue Code, the
parties to this Lease hereby agree to allocate the stated
Rents, provided herein, to the periods which correspond to the
actual Rent payments as provided under the terms and
conditions of this agreement.
B. EXPENSES. The purpose of this Section 4(b) is to ensure that
Tenant bears a share of all Expenses related to the use,
maintenance, ownership, repair or replacement, and insurance
of the Project. Accordingly, beginning on the date Tenant
takes possession of the Premises, Tenant shall each month pay
to Landlord one-twelfth (1/12) of Tenant's Share of Expenses
related to the Project. As used in this Lease, "Tenant's
Share" shall mean the Premises Area, as defined in Section
1(e), divided by the Project Area, as defined in Section 1(f),
and "Tenant's Share of Expenses" shall mean the total Expenses
for the Project for the applicable calendar year multiplied by
Xxxxxx's Share. Landlord may specially allocate individual
expenses where and in the manner necessary, in Xxxxxxxx's
reasonable discretion, to appropriately reflect the
consumption of the expense or service. Where multiple premises
are served by a common meter, Landlord shall allocate charges
based on Landlord's reasonable estimate of proportionate
usage.
1) EXPENSES DEFINED. The term "Expenses" shall mean all
costs and expenses of the ownership, operation, maintenance,
repair or replacement, and insurance of the Project, including
without limitation, the following costs:
(a) All supplies, materials, labor, equipment,
and utilities used in or related to the operation and
maintenance of the Project,
4.
(b) All maintenance, janitorial, legal,
accounting, insurance, service agreement and
management (including on-site management office)
costs related to the Project;
(c) All maintenance, replacement and repair
costs relating to the areas within or around the
Project, including, without limitation, air
conditioning systems, sidewalks, landscaping, service
areas, driveways, parking Areas (including
resurfacing and restriping parking areas), walkways,
building exteriors (including painting), signs and
directories, repairing and replacing roofs, walls,
etc. These costs may be included either based on
actual expenditures or the use of an accounting
reserve based on past cost experience for the
Project.
(d) Amortization (along with reasonable
financing charges) of capital additions or
improvements made to the Project which may be
required by any government authority or which will
improve the operating efficiency of the Project
(provided, however, that the amount of such
amortization for improvements not mandated by
government authority shall not exceed in any year the
amount of costs reasonably determined by Landlord in
its sole discretion to have been saved by the
expenditure either through the reduction or
minimization of increases which would have otherwise
occurred).
(e) Real Property Taxes including all taxes,
assessments (general and special) and other
impositions or charges which may be taxed, charged,
levied, assessed or imposed upon all or any portion
of or in relation to the Project or any portion
thereof, any leasehold estate in the Premises or
measured by Rent from the Premises, including any
increase caused by the transfer, sale or encumbrance
of the Project or any portion thereof "Real Property
Taxes" shall also include any form of assessment,
levy, penalty, charge or tax (other than estate,
inheritance, net income, or franchise taxes) imposed
by any authority having a direct or indirect power to
tax or charge, including, without limitation, any
city, county, state federal or any improvement or
other district, whether such tax is (1) determined by
the value of the Project or the Rent or other sums
payable under this Lease; (2) upon or with respect to
any legal or equitable interest of Landlord in the
Project or any part thereof, (3) upon this
transaction or any document to which Tenant is a
party creating a transfer in any interest in the
Project, (4) in lieu of or as a direct substitute in
whole or in part of or in addition to any real
property taxes on the Project, (5) based on any
parking spaces or parking facilities provided in the
Project, 6) in consideration for services, such as
police protection, fire protection, street, sidewalk
and roadway maintenance, refuse removal or other
services that may be provided by any governmental or
quasi-governmental agency from time to time which
were formerly provided without charge or with less
charge to property owners or occupants, or (7)
otherwise based on the operation of the Project (such
as transit, carpooling or environmental facilities.
5.
(f) Notwithstanding any other provision of this
Lease to the contrary, Landlord agrees that Expenses
as defined in Section 4(b) shall not include: leasing
commissions, attorneys' fees, costs, disbursements,
and other expenses incurred in connection with
leasing, renovating, or improving space for tenants
or other occupants or prospective tenants or other
occupants of the Project; the cost of any service
sold to any tenant (including Tenant) or other
occupant for which Xxxxxxxx receives reimbursement as
an additional charge or rental over and above the
basic rent and escalations payable under the lease
with that tenant; any depreciation on the Project;
capital additions except as provided in subsection
(d) above; overhead profit increments paid to
Landlord's subsidiaries or affiliates for management
or other services on or to the building or for
supplies or other materials to the extent that the
cost of the services, supplies, or materials exceeds
the cost that would have been paid had the services,
supplies, or materials been provided by unaffiliated
parties on a competitive basis; all interest, loan
fees, and other carrying costs related to any
mortgage or deed of trust or related to any capital
item not chargeable as an Expense, and all rental and
other payable due under any ground or underlying
lease, or any lease for any equipment ordinarily
considered to be of a capital nature unless the
purchase of such equipment would have been chargeable
as an Expense (and except janitorial equipment which
is not affixed to the Project); any compensation paid
to clerks, attendants, or other persons in commercial
concessions operated by Landlord; advertising and
promotional expenditures; any costs, fines, or
penalties incurred due to violations by Landlord of
any governmental rule or authority, this Lease or any
other lease in the Project, or due to Landlord's
gross negligence or willful misconduct; the cost of
correcting any building code or other violations
which were violations prior to the Commencement Date
of this Lease; the cost of containing, removing, or
otherwise remediating any contamination of the
Project (including the underlying land and ground
water) by any toxic or hazardous materials
(including, without limitation, asbestos and "PCB's")
where such contamination was present as of the
Commencement Date or was brought onto the Project
thereafter by Landlord, its employees or contractors;
management costs to the extent they exceed management
costs charged for similar facilities in the area;
costs for sculpture, paintings, or other objects of
art (and insurance thereon or extraordinary security
in connection therewith); wages, salaries, or other
compensation paid to any executive employees above
the grade of building manager.
2) ANNUAL ESTIMATE OF EXPENSES. When Xxxxxx takes
possession of the Premises, Landlord shall estimate Tenant's
Share of Expenses for the remainder of the calendar year, and
at the commencement of each calendar year thereafter, Landlord
shall provide Tenant with an estimate of Xxxxxx's Share of
Expenses for the ensuing calendar year.
6.
3) MONTHLY PAYMENT OF EXPENSES. Tenant shall pay to
Landlord, monthly in advance, as Additional Rent, one-twelfth
(1/12) of the Annual Estimate of Xxxxxx's Share of Expenses
beginning on the date Tenant takes possession of the Premises.
As soon as practical following each calendar year, Landlord
shall prepare an accounting of actual Expenses incurred during
the prior calendar year and such accounting shall reflect
Tenant's Share of Expenses. If the Additional Rent paid by
Tenant under this Section 4(b)(3) during the preceding
calendar year was less than the actual amount of Tenant's
Share of Expenses, Landlord shall so notify Tenant and Tenant
shall pay such amount to Landlord within 30 days of receipt of
such notice. Such amount shall be deemed to have accrued
during the prior calendar year and shall be due and payable
from Tenant even though the term of this Lease has expired or
this Lease has been terminated prior to Xxxxxx's receipt of
this notice. Tenant shall have thirty (30) days from receipt
of such notice to contest the amount due, failure to so notify
Landlord shall represent final determination of Tenant's Share
of Expenses. If Tenant's payments were greater than the actual
amount, then such overpayment shall be credited by Landlord to
Tenant's Share of Expenses due under this Section 4(b)(3).
C. RENT WITHOUT OFFSET AND LATE CHARGE. As used herein, "Rent"
shall mean all monetary sums due from Tenant to Landlord. All
Base Monthly Rent shall be paid by Tenant to Landlord without
prior notice or demand in advance on the first day of every
calendar month, at the address shown in Section 1, or such
other place as landlord may designate in writing from time to
time. Whether or not so designated, all other sums due from
Tenant under this Lease shall constitute "Additional Rent",
payable without prior notice or demand when specified in this
Lease, but if not specified, then within thirty (30) days of
demand. All Rent shall be paid without any deduction or offset
whatsoever. All Rent shall be paid in lawful currency of the
United States of America. Proration of Rent due for any
partial month shall be calculated by dividing the number of
days in the month for which Rent is due by the actual number
of days in that month and multiplying by the applicable
monthly rate. Tenant acknowledges that late payment by Tenant
to Landlord of any Rent or other sums due under this Lease
will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such cost being extremely difficult
and impracticable to ascertain. Such costs include, without
limitation, processing and accounting charges and late charges
that may be imposed on Landlord by the terms of any
encumbrance or note secured by the Premises. Therefore, if any
Rent or other sum due from Tenant is not received when due,
Tenant shall pay to Landlord an additional sum equal to 10% of
such overdue payment. Landlord and Tenant hereby agree that
such late charge represents a fair and reasonable estimate of
the costs that Landlord will incur by reason of any such late
payment and that the late charge is in addition to any and all
remedies available to the Landlord and that the assessment
and/or collection of the late charge shall not be deemed a
waiver of any other default. Additionally, all such delinquent
Rent or other sums, plus this late charge, shall bear interest
at the rate of 18 percent per annum. If the interest rate
specified in this Lease is higher than the rate permitted by
law, the interest rate is hereby decreased to the maximum
legal interest rate permitted by law. Any payments of any kind
7.
returned for insufficient funds will be subject to an
additional handling charge of $25.00, and thereafter, Landlord
may require Tenant to pay all future payments of Rent or other
sums due by money order or cashier's check.
5. PREPAID RENT. [intentionally omitted -- See Section 4(a) for first
month's rent]
6. LETTER OF CREDIT.
A. LETTER OF CREDIT. Tenant shall, within fifteen (15) days after
the date of full execution of this Lease and in accordance
with this Section 6, (i) cause a Letter of Credit in the
amount of Fifty Thousand Dollars ($50,000) (the "Letter of
Credit") to be issued by the L/C Bank in favor of Landlord,
and its successors, assigns and transferees and will cause
delivery of such letter of credit to Landlord.
B. INTENTIONALLY OMITTED.
C. MAINTENANCE OF LETTER OF CREDIT. Tenant will cause the Letter
of Credit to remain in full force and effect during the entire
Term and thereafter until the earlier of the date Landlord
acknowledges Tenant has completed all restoration obligations
under the lease or 60 days after expiration or earlier
termination of the Lease. The specific requirements for the
Letter of Credit and the rights of Landlord to make draws
thereon will be as set forth in this Section 6. Subject to
this Section 6, but anything else in this Lease to the
contrary notwithstanding, all of Tenant's rights and all of
Landlord's obligations under this Lease are strictly
contingent on Tenant's causing the Letter of Credit to remain
in full force and effect during the entire Term.
D. PAYMENT AND HOLDING OF DRAW PROCEEDS. Immediately upon, and at
any time or from time to time after, the occurrence of any one
or more Draw Events, Landlord will have the unconditional
right to draw on the Letter of Credit, in the full amount
thereof or in any lesser amount or amounts as Landlord may
determine, in its sole and absolute discretion, in accordance
with this Section 6. Upon the payment of Landlord of the Draw
Proceeds, Landlord will hold the Draw Proceeds in its own name
and for its own account, without liability for interest, and
as security for the performance by Tenant of Tenant's
covenants and obligations (theretofore or thereafter arising)
under this Lease, and will be entitled to use and apply any
and all of the Draw Proceeds from time to time solely to
compensate Landlord hereunder. Among other things, it is
expressly understood that the Draw Proceeds will not be
considered an advance payment of Basic Rent or Additional Rent
or a measure of Landlord's damages resulting from any Event of
Default hereunder (past, present or future). Further,
immediately upon the occurrence of any one or more Draw
Events, Landlord may, from time to time and without prejudice
to any other remedy, use the Draw Proceeds (whether from a
contemporaneous or prior draw on the Letter of Credit) to the
extent necessary to make good any arrearages of Basic Rent or
Additional Rent, to pay to Landlord any and all amounts to
which Landlord is entitled in connection with the pursuit of
any one or more of its remedies hereunder, and to compensate
Landlord for any
8.
and all other damage, injury, expense or liability caused to
Landlord by any and all such Events of Default. Any delays in
Landlord's draw on the Letter of Credit or in landlord's use
of the Draw Proceeds will not constitute a waiver by Landlord
of any of its rights hereunder with respect to the Letter of
Credit or the Draw Proceeds. Following any such application of
the Draw Proceeds, Tenant will either pay to Landlord on
demand the cash amount so applied in order to restore the Draw
Proceeds to the fall amount thereof immediately prior to such
application or cause the Letter of Credit to be replenished to
its full amount thereunder. Landlord will not be liable for
any indirect, consequential, special or punitive damages
incurred by Tenant arising from a claim that Landlord violated
the bankruptcy code's automatic stay in connection with any
draw by Landlord of any Draw Proceeds, Landlord's liability
under such circumstances being limited to the reimbursement of
direct costs as and to the extent expressly provided in this
Section 6. Nothing in this Lease or in the Letter of Credit
will confer upon Tenant any property rights or interests in
any Draw Proceeds; provided, however, that upon the expiration
or earlier termination of this Lease, and so long as there
then exist no Draw Events or Event of Default hereunder,
Xxxxxxxx agrees to return any remaining unapplied balance of
the Draw Proceeds then held by Landlord, and the Letter of
Credit itself (if and to the extent not previously drawn in
full) to Tenant.
E. TRANSFERABILITY. If Landlord transfers its interest in the
Project during the Term, Landlord may transfer the Letter of
Credit and any and all Draw Proceeds then held by Landlord to
the transferee and thereafter will have no further liability
with respect to the Letter of Credit or the Draw Proceeds,
including, without limitation, any liability for the return of
the Letter of Credit, so long as the transferee has assumed
all of Landlord's obligations under this Lease accruing after
the date of transfer. Tenant is responsible for any and all
fees or costs (whether payable to the L/C Bank or otherwise)
in order to effect such transfer of the Letter of Credit.
F. ADDITIONAL TERMS. In addition to compliance with the other
terms and conditions of this Section 6, the Letter of Credit
shall provide as follows:
In the event that you receive, prior to the expiration date
herein set forth, any payment (from a source other than drafts
drawn under this Letter of Credit) for invoices on the
debtor's account and within ninety (90) days after receipt of
said payment (i) a petition is filed by or against (Account
Debtor) with a United States Bankruptcy Court; (ii) (Account
Debtor) is the subject of any other proceeding, voluntary or
involuntary, which under applicable State or Federal law could
result in the return of such payment, then the expiration date
hereof shall automatically be extended to a date that is one
hundred twenty (120) days after the date of such filing,
assignment or proceeding and, if this Letter of Credit has
previously expired, our obligations hereunder shall be
reinstated up to the amount of such payment only, but in no
event more than (face amount) in aggregate.
G. APPLICABLE DEFINITIONS.
9.
"DRAW EVENT" means each of the following events:
(1) the occurrence of any one or more of the following:
(i) Tenant's filing of a petition under any chapter of the
Bankruptcy Code, or under any federal, state or foreign
bankruptcy or insolvency statute now existing or hereafter
enacted, or Xxxxxx's making a general assignment or general
arrangement for the benefit of creditors, (ii) the filing of
an involuntary petition under any chapter of the Bankruptcy
Code, or under any federal, state or foreign bankruptcy or
insolvency statute now existing or hereafter enacted, or the
filing of a petition for adjudication of bankruptcy or for
reorganization or rearrangement, by or against Tenant (or its
guarantor hereunder) and such filing not being dismissed
within 60 days, (iii) the entry of an order for relief under
any chapter of the Bankruptcy Code, or under any federal,
state or foreign bankruptcy or insolvency statute now existing
or hereafter enacted, (iv) the appointment of a "custodian,"
as such term is defined in the Bankruptcy Code (or of an
equivalent thereto under any federal, state or foreign
bankruptcy or insolvency statute now existing or hereafter
enacted), for Tenant, or the appointment of a trustee or
receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this
Lease and possession not being restored to Tenant within 60
days, or (v) the subjection of all or substantially all of
Tenant's assets located at the Premises or of Tenant's
interest in this Lease to attachment, execution or other
judicial seizure and such subjection not being discharged
within 60 days; or
(2) the failure of Tenant, not less than 30 days prior to
the stated expiration date of the Letter of Credit then in
effect, to cause an extension, renewal or replacement issuance
of the Letter of Credit, at the reduced amount, if any,
applicable under Section 6, to be effected, which extension,
renewal or replacement issuance will be made by the L/C Bank,
and, except as expressly provided in Section 6, will otherwise
meet all of the requirements of the initial Letter of Credit
hereunder, which failure will be an Event of Default under
this Lease; or
(3) the failure of Tenant to make when due any payment of
Basic Rent, of any monthly installment of any Additional Rent,
or pay any other monetary obligation within three days after
the amount is due; or
(4) the failure by Xxxxxx to pay any amount due hereunder
within 10 days after the amount is due; or
(5) the breach by Tenant of any non-monetary obligation
hereunder which is not cured within 30 days after notice of
the default from Landlord, which notice may be in the form of
a proof of claim in the event of a bankruptcy filing, provided
that if such failure cannot with due diligence by cured within
30 days, Tenant will have the right to cure the default if
Tenant commences such cure promptly and within the 30 day
period and thereafter diligently and prosecutes such cure to
completion.
10.
"DRAW PROCEEDS" means the proceeds of any draw or draws made by
Landlord under the Letter of Credit, together with any and all
interest accruing thereon.
"L/C BANK" means Union Bank, as agent of GE Capital Corporation, or any
other United States bank or other financial institution which
is approved by Landlord in Landlord's reasonable discretion.
"LETTER OF CREDIT" means that certain irrevocable Letter of Credit, in
the amounts set forth in Section 6, issued by the L/C Bank, as
required under Section 6 and, if applicable, as extended,
renewed, replaced or modified from time to time in accordance
with this lease, which Letter of Credit will be in a form
reasonably acceptable to Landlord. Any Letter of Credit
provided hereunder shall state that the beneficiary thereunder
must submit with any draw request a signed and dated statement
worded as follows with the instructions in brackets therein
complied with: "The undersigned, an authorized representative
of [insert beneficiary name] hereby certifies that a Draw
Event has occurred under the terms of the lease between Gull
Industries, as landlord, and Tenant dated [insert date]
relating to the premises located at 0000 Xxxxxx Xxx. S.,
Seattle, Washington."
7. USE OF PREMISES AND PROJECT FACILITIES. Tenant shall use the Premises
solely for the purposes set forth in Section 1 and for no other purpose
whatsoever without obtaining the prior written consent of Landlord,
which shall not be unreasonably withheld so long as Xxxxxx's proposed
use meets Xxxxxxxx's then-existing use criteria for the Project and
complies with all applicable zoning regulations. Except as provided in
writing in this Lease, Xxxxxx acknowledges that neither Landlord nor
any agent of Landlord has made any representation or warranty with
respect to the Premises or with respect to the suitability of the
Premises or the Project for the conduct of Xxxxxx's business, nor has
Landlord agreed to undertake any modification, alteration or
improvement to the Premises or the Project. Tenant acknowledges that
Landlord may from time to time, at its sole discretion, make such
modifications, alterations, deletions or improvements to the Project as
Landlord may deem necessary or desirable, without compensation or
notice to Tenant, so long as the same does not materially interfere
with Xxxxxx's use and enjoyment of the Premises and the Common Areas of
the Project nor with Xxxxxx's parking rights hereunder. Tenant shall
promptly comply with all laws, ordinances, orders and regulations
affecting the Premises and the Project, including, without limitation,
the rules and regulations attached hereto as Exhibit D and any
reasonable modifications to these rules and regulations as Landlord may
adopt from time to time. Tenant acknowledges that, except for
Landlord's obligations pursuant to Section 13, Landlord's Work and the
Tenant Improvements, Tenant is solely responsible for ensuring that the
Premises comply with any and all governmental regulations applicable to
Tenant's conduct of business on the Premises, and that Tenant is solely
responsible for any alterations or improvements that may be required by
such regulations, now existing or hereafter adopted. Tenant shall not
do or permit anything to be done in or about the Premises or bring or
keep anything in the Premises that will in any way increase the
premiums paid by Landlord on its insurance related to the Project,
unless Xxxxxx agrees to reimburse Landlord for any increase directly
related to Tenant's use, or which will in any way increase the premiums
for fire or casualty insurance carried by
11.
other tenants in the Project. Tenant will not perform any act or carry
on any practices that may injure the Premises or the Project; that may
be a nuisance or menace to other tenants in the Project; or that shall
in any way materially interfere with the quiet enjoyment of such other
tenants. Tenant shall not use the Premises for sleeping, washing
clothes, cooking (except for preparation of employee meals) or the
preparation, or manufacture or mixing of anything that might emit any
reasonably objectionable odor, noises, vibrations or lights onto such
other tenants. If sound insulation is required to muffle noise produced
by Tenant on the Premises, Tenant at its own cost shall provide all
necessary insulation. Tenant shall not do anything on the Premises
which will overload any existing parking or service to the Premises.
Pets and/or animals of any type shall not be kept on the Premises,
except for guide dogs to assist the physically disabled.
8. HAZARDOUS SUBSTANCES; DISRUPTIVE ACTIVITIES
a. HAZARDOUS SUBSTANCES.
(1) Presence and Use of Hazardous Substances. As used in
this Lease, "Hazardous Substances" shall mean anything which
may be harmful to persons or property, including, but not
limited to, materials designated as a "Hazardous Substance"
pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as now or
hereafter amended, 42 USC 9601, et seq., or as a Hazardous
Substance, Hazardous Household Substance, Moderate Risk Waste
or Hazardous Waste under RCW 70.105 .010, or which is
regulated by any federal, state, or local law, statute,
ordinance or regulation pertaining to health, industrial
hygiene or the environment. Tenant shall not, without
Landlord's prior written consent, keep on or around the
Premises, Common Areas or Building, for use, disposal,
treatment, generation, storage or sale, any Hazardous
Substances except such Hazardous Substances as are commonly
used in general administrative office operations and those
which are listed on Exhibit G attached hereto and a made a
part hereof ("Permitted Substances"). Tenant shall have the
right to periodically update the list of Permitted Substances
by provided written notice thereof to Landlord for Landlord's
consent in Xxxxxxxx's discretion. With respect to any
Hazardous Substance, Tenant shall:
(i) Comply promptly, timely, and completely with
all governmental requirements for reporting, keeping,
and submitting manifests, and obtaining and keeping
current identification numbers;
(ii) Submit to Landlord true and correct copies
of all reports, manifests, and identification numbers
at the same time as they are required to be and/or
are submitted to the appropriate governmental
authorities;
(iii) Within five (5) days of Landlord's request,
submit written reports to Landlord regarding Tenant's
use, storage, treatment, transportation, generation,
disposal or sale of Hazardous Substances and provide
evidence
12.
satisfactory to Landlord of Tenant's compliance with
the applicable government regulations;
(iv) Allow Landlord or Landlord's agent or
representative to come on the Premises in conformance
with the entry rights and notice requirements
specified in Section 22 to check Tenant's compliance
with all applicable governmental regulations
regarding Hazardous Substances, provided that
Landlord shall use reasonable means to minimize
interference with the Tenant's use of the Premises;
(v) Comply with minimum levels, standards or
other performance standards or requirements which may
be set forth or established for certain Hazardous
Substances (if minimum standards or levels are
applicable to Hazardous Substances present on the
Premises, such levels or standards shall be
established by an on-site inspection by the
appropriate governmental authorities and shall be set
forth in an addendum to this Lease); and
(vi) Comply with all applicable governmental
rules, regulations and requirements regarding the
proper and lawful use, sale, transportation,
generation, treatment, and disposal of Hazardous
Substances.
(2) If Landlord has reasonable cause to believe that
Tenant is not in compliance with this Section 8, then any and
all costs incurred by Landlord and associated with Landlord's
monitoring of Tenant's compliance with this Section 8,
including Landlord's reasonable attorneys' fees and costs,
shall be Additional Rent and shall be due and payable to
Landlord immediately upon demand by Landlord.
B. CLEANUP COSTS, DEFAULT AND INDEMNIFICATION.
(1) Tenant shall be fully and completely liable to
Landlord for any and all cleanup costs, and any and all other
charges, fees, penalties (civil and criminal) imposed by any
governmental authority with respect to Tenant's use, disposal,
transportation, generation and/or sale of Hazardous
Substances, in or about the Premises, Common Areas, or
Building.
(2) Tenant shall indemnify, defend and save Landlord and
Xxxxxxxx's lender, if any, harmless from any and all of the
costs, fees, penalties and charges assessed against or imposed
upon Landlord (as well as Xxxxxxxx's and Landlord's lender's
attorneys' fees and costs) as a result of Tenant's use,
disposal, transportation, generation and/or sale of Hazardous
Substances.
(3) Upon Tenant's default under this Section 8, in
addition to the rights and remedies set forth elsewhere in
this Lease, Landlord shall be entitled in addition to all
other rights and remedies under this Lease to recover any and
all damages associated with the default, including, but not
limited to cleanup costs and charges, civil and criminal
penalties and fees, loss of business and sales by
13.
Landlord and other tenants of the Building arising from
Tenant's default under this Section 8, any and all damages and
claims asserted by third parties which arise from Tenant's
default under this Section 8, and Landlord's reasonable
attorneys' fees and costs.
C. DISPOSAL OF WASTE.
(1) Refuse Disposal. Tenant shall not keep any trash,
garbage, waste or other refuse on the Premises except in
sanitary containers and shall regularly and frequently remove
same from the Premises. Tenant shall keep all incinerators,
containers or other equipment used for storage or disposal of
such materials in a clean and sanitary condition.
(2) Sewage Disposal. Tenant shall properly dispose of all
sanitary sewage and shall not use the sewage disposal system
(a) for the disposal of anything except sanitary sewage or (b)
in excess of the lesser amount (i) reasonably contemplated by
the uses permitted under this Lease or (ii) permitted by any
governmental entity. Tenant shall keep that portion of the
sewage disposal system located within the Premises free of all
obstructions and in good operating condition.
(3) Disposal of Other Waste. Tenant shall properly
dispose of all other waste or other matter delivered to,
stored upon, located upon or within, used on, or removed from,
the Premises in such a manner that it does not, and will not,
adversely affect the (a) health or safety of persons, wherever
located, whether on the Premises or elsewhere (b) condition,
use or enjoyment of the Premises or Project, or (c) Premises
or any of the improvements thereto or thereon including
buildings, foundations, pipes, utility lines, landscaping or
parking areas.
D. Disruptive Activities. Tenant shall not:
(1) Produce, or permit to be produced, any intense glare,
light or heat except within an enclosed or screened area and
then only in such manner that the glare, light or heat shall
not, outside the Premises, be materially different that the
light or heat from other sources outside the Premises;
(2) Create, or permit to be created, any sound pressure
level which will interfere with the quiet enjoyment of any
real property outside the Premises, or which will create a
nuisance or violate any governmental law, rule, regulation or
requirement;
(3) Create, or permit to be created, any ground vibration
that is materially discernible outside the Premises;
(4) Transmit, receive or permit to be transmitted or
received, any electromagnetic, microwave or other radiation
which is harmful or hazardous to any person or property in, or
about the Project; or
14.
(5) Create, or permit to be created, any noxious odor
that is disruptive to the business operations of any other
tenant in the Project.
9. SIGNAGE. All signage installed by Tenant shall comply with rules and
regulations set forth by Landlord as may be modified from time to time.
Current rules and regulations relating to signs are described on
Exhibit E [PLEASE PROVIDE FOR REVIEW]. Tenant shall have the right to
install window blinds or screens within the Premises. Tenant shall
place no stickers, signs, lettering, banners or advertising or display
material on or near exterior windows or doors if such materials are
visible from the exterior of the Premises, without Landlord's prior
written consent. Any material violating this provision may be destroyed
by Landlord without compensation to Tenant.
10. PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency all taxes,
assessments, license fees and public charges levied, assessed or
imposed upon its business operations as well as upon all trade
fixtures, leasehold improvements, merchandise and other personal
property in or about the Premises.
11. PARKING. Landlord grants to Tenant and Tenant's customers, suppliers,
employees and invitees, a right to use forty (40) stalls in the
designated parking areas in the Project for the use of full-sized
passenger automobiles during the term of this Lease. Of the total 40
stalls which Tenant is entitled to use, those stalls which are located
within the first three (3) rows of parking adjacent to the Premises and
south of the demising wall of the Premises as identified on Exhibit H
hereto shall be made available to Tenant on a reserved, exclusive basis
at no extra charge to Tenant. Landlord reserves the right at any time
to grant non-exclusive use to other tenants with respect to the
unreserved stalls within the parking area, to promulgate rules and
regulations relating to the use of such parking areas, including
reasonable restrictions on parking by tenants and employees, to
designate specific spaces for the use of any tenant, and to make
changes in the parking layout from time to time, so long as the same
does not reduce the number of parking stalls which Tenant is entitled
to use and the new location of such stalls is in reasonably close
proximity to the Premises and accomplishes the security purpose of the
three row reservation. Employees of Tenant shall have the right to park
their vehicles on an overnight basis where necessitated by the work
schedules of such employees. Any vehicle violating any vehicle
regulation adopted by Landlord and posted in the parking area is
subject to removal at the owner's expense.
12. UTILITIES; SERVICES. Subject to the next paragraph, Landlord shall
furnish the Premises with electricity for Tenant's use as set forth in
Section 1(d), including lighting and low power usage for office
machines and light manufacturing, and water for restroom facilities.
From 7:00 a.m. to 6:00 p.m. on weekdays and 9:00 a.m. to 1:00 p.m. on
Saturday, excluding legal holidays ("Normal Business Hours"), Landlord
shall furnish the Premises with heat and air conditioning services as
required, in Landlord's reasonable judgment, for the comfortable use
and occupancy of the Premises. Landlord shall provide further services
(such as janitorial services and trash disposal) if Landlord and Tenant
specifically agree to such additional services and identify such
services with specificity on Exhibit F hereto [SUBJECT TO DISCUSSION].
If requested by Xxxxxx, Landlord shall furnish heat and air
conditioning services at times other than Normal Business
15.
Hours, and supplements to Exhibit F special services, and Tenant shall
pay for such additional services as additional rent at such reasonable
rates as Landlord may establish from time to time.
Tenant has examined the existing electrical and mechanical systems and
is familiar with their capacities. If Tenant requires any additional
capacity, Tenant shall install such additional capacity as part of the
Tenant Improvements pursuant to Exhibit C (which cost shall be paid
pursuant to Section 7 of Exhibit C). If, in Landlord's reasonable
estimation, Xxxxxx's usage of electrical or mechanical systems exceeds
the consumption of spaces jointly metered or maintained with the
Premises, Landlord may specially allocate to Tenant the actual cost of
such excess consumption, and Tenant shall pay Landlord in advance, as
additional rent, on the first day of each month during the Term, the
amount reasonably estimated by Landlord as the cost of such excess
consumption. Landlord shall be entitled to install and operate, at
Tenant's cost, a monitoring/metering system in the Premises to measure
the added demands on electricity and the HVAC systems resulting from
such equipment and lights, and from Tenant's HVAC requirements during
other than Normal Business Hours. Tenant acknowledges that Landlord
shall have sole control over the determination of what utility
providers serve the Project, and Landlord shall have no obligation to
give access or easement rights or otherwise allow onto the Project any
utility providers except those approved by Landlord in its discretion.
If, for any reason, Landlord permits Tenant to purchase utility
services from a provider other than Landlord's designated compan(ies),
such provider shall be considered a contractor of Tenant and Tenant
shall indemnify defend and hold Landlord harmless from such provider's
acts and omissions while in, or in connection with their services to,
the Building or Project in accordance with the terms and conditions of
Article 15. In addition, Tenant shall allow Landlord to purchase such
utility service from Tenant's provider at Tenant's rate or at such
lower rate as can be negotiated by the aggregation of Landlord's
tenants' requirements for such utility.
Except for the costs of above-building standard and/or after-hours
services, which shall be paid directly by Tenant, the costs of all
utilities and services provided pursuant to this Section 12 shall be
Expenses allocated to Tenant as part of Tenant's Share of Expenses
pursuant to Section 4(b), above. Tenant shall pay when due and directly
to the service provider any telephone or other services metered,
chargeable or provided to the Premises and not charged as part of
Tenant's Share of Expenses.
Landlord does not warrant that any utilities or services will be free
from interruption including by reason of accident, repairs, alterations
or improvements and including by reason of computer programming
weaknesses. No utility interruption shall be deemed an eviction or
disturbance of Tenant, or render Landlord liable to Tenant for damages,
or relieve Tenant from the full and complete performance of all of
Tenant's obligations under this Lease.
Landlord may provide such security for the Project as it deems
appropriate. Landlord understands that Tenant will independently be
providing security for the Premises. During other than Normal Business
Hours, Landlord may restrict access to the Project in accordance with
the Project's security system. Except to the extent caused by the gross
16.
negligence or willful misconduct of Landlord, its agents or
contractors, Landlord shall not be liable to Tenant for injury to
Tenant's agents, employees, customers or invitees, or for losses due to
theft or burglary, or for damages done by unauthorized persons in the
Project.
13. MAINTENANCE. Landlord shall maintain, in good condition and repair, the
structural parts of the Premises, which shall include only the
foundations, bearing and exterior walls (excluding glass), subflooring
and roof (including support and membrane but excluding skylights), the
unexposed electrical, plumbing and sewerage systems, including those
portions of the systems lying outside the Premises, gutters and
downspouts on the Building and the heating, ventilating and air
conditioning system servicing the Premises; provided, however, the cost
of all such maintenance shall be subject to the relevant provisions of
Section 4(b). Except as provided above, Tenant shall maintain and
repair the interior portions of the Premises in good condition and
repair, including, without limitation, maintaining and repairing all
internal walls, storefronts, floors, ceilings, interior and exterior
doors, exterior and interior windows and fixtures and interior exposed
plumbing, as well as damage caused by Tenant, its agents, employees or
invitees. Upon expiration or termination of this Lease, Tenant shall
surrender the Premises to Landlord in the same condition as existed at
the commencement of the Term, except for reasonable wear and tear or
damage caused by fire or other casualty.
14. ALTERATIONS. Other than Landlord's Work and Tenant's Work, which shall
be governed by the Work Letter, Tenant shall not make any alterations
to the Premises, or to the Project, including any changes to the
existing landscaping, without Xxxxxxxx's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing, Tenant shall have the right to make
alterations and improvements to the Premises without Landlord's consent
(but only after having provided not less than 15 days prior written
notice to Landlord) where the same (i) will not materially affect the
structural components of the building in which the Premises is located
or the building systems, and (ii) will not exceed the cost of $10,000.
If Landlord gives its consent to alterations, Landlord may post notices
of non-responsibility in accordance with the laws of the state in which
the premises are located. Tenant may, at the time of requesting
Landlord's consent to alterations, further request in writing that
Landlord elect, at the time of granting consent, whether such
alterations must be removed upon termination of the Lease. If Tenant so
requests, Landlord shall make such election at the time of granting
consent to the alteration (or if no consent is required, then within
fifteen days of Tenant's request). Failure of Landlord to respond to
Xxxxxx's request shall be deemed an election that the alteration need
not be removed on termination of this Lease. Any alterations made shall
remain on and be surrendered with the Premises upon expiration or
termination of this Lease, except that Landlord may, within 30 days
before or 30 days after expiration of the term, elect to require Tenant
to remove any alterations which Tenant may have made to the Premises
except such alterations as Xxxxxx has received consent to leave as
provided above. If Landlord elects to require removal of an alteration,
at its own cost Tenant shall restore the Premises to the condition
designated by Landlord in its election, before the last day of the term
or within 30 days after notice of its election is given, whichever is
later.
17.
Should Landlord consent in writing to Tenant's alteration of the
Premises, Tenant shall contract with a contractor approved by Landlord
for the construction of such alterations, which approval shall not be
unreasonably withheld, delayed or conditioned, shall secure all
appropriate governmental approvals and permits, and shall complete such
alterations with due diligence in compliance with plans and
specifications reasonably approved by Landlord. All such construction
shall be performed in a manner which will not unreasonably interfere
with the quiet enjoyment of other tenants of the Project. Tenant shall
pay all costs for such construction and shall keep the Premises and the
Project free and clear of all mechanics' liens which may result from
construction by Tenant. Tenant shall not use any portion of the common
areas in connection with an alteration without the prior written
consent of Landlord.
15. RELEASE AND INDEMNITY.
A. INDEMNITY. Except to the extent caused by the gross negligence
or willful misconduct of Landlord, its agents, employees or
contractors, Tenant shall indemnify, defend (using legal
counsel acceptable to Landlord) and save Landlord and its
property manager harmless from all claims, suits, losses,
damages, fines, penalties, liabilities and expenses (including
Landlord's personnel and overhead costs and reasonable
attorneys fees and other costs incurred in connection with
claims, regardless of whether such claims involve litigation
but excluding consequential damages such as lost profits)
resulting from any actual or alleged injury (including death)
of any person or from any actual or alleged loss of or damage
to, any property arising out of or in connection with (i)
Tenant's occupation, use or improvement of the Premises, or
that of its employees, agents or contractors, or (ii) any act
or omission of Tenant, its officers, agents or employees in or
about the Premises. Xxxxxx agrees that the foregoing indemnity
specifically covers actions brought by its own employees. This
indemnity with respect to acts or omissions during the term of
this Lease shall survive termination or expiration of this
Lease. The foregoing indemnity is specifically and expressly
intended to, constitute a waiver of Tenant's immunity under
Washington's Industrial Insurance Act, RCW Title 51, to the
extent necessary to provide Landlord with a full and complete
indemnity from claims made by Tenant and its employees, to the
extent provided herein. Tenant shall promptly notify Landlord
of casualties or accidents occurring in or about the Premises.
Except to the extent caused by the gross negligence or willful
misconduct of Tenant, its agents, employees or contractors,
Landlord shall indemnify, defend and save Tenant harmless from
all claims, suits, losses, damages, fines, penalties,
liabilities and expenses (including reasonable attorneys fees
and other costs incurred in connection with claims, regardless
of whether such claims involve litigation but excluding
consequential damages such as lost profits) resulting from any
actual or alleged injury (including death) of any person or
from any actual or alleged loss of or damage to, any property
to the extent caused by (i) the activities of Landlord during
improvement of the Premises or Project, or the activities of
its employees, agents or contractors or (ii) any act or
omission of Landlord, its officers, agents or employees in the
Common Areas. Xxxxxxxx agrees that the
18.
foregoing indemnity specifically covers actions brought by its
own employees. This indemnity with respect to acts or
omissions during the term of this Lease shall survive
termination or expiration of this Lease. The foregoing
indemnity is specifically and expressly intended to,
constitute a waiver of Landlord's immunity under Washington's
Industrial Insurance Act, RCW Title 51, to the extent
necessary to provide Tenant with a full and complete indemnity
from claims made by Landlord and its employees, to the extent
provided herein.
XXXXXXXX AND TENANT ACKNOWLEDGE THAT THE INDEMNIFICATION
PROVISIONS OF SECTION 8 AND THIS SECTION 15 WERE SPECIFICALLY
NEGOTIATED AND AGREED UPON BY THEM.
B. RELEASE. Tenant hereby fully and completely waives and
releases all claims against Landlord for any losses or other
damages sustained by Tenant or any person claiming through
Tenant resulting from any accident or occurrence in or upon
the Premises, including but not limited to: any defect in or
failure of Project equipment; any failure to make repairs; any
defect, failure, surge in, or interruption of Project
facilities or services; any defect in or failure of Common
Areas; broken glass; water leakage; the collapse of any
Building component; or any act, omission or negligence of
co-tenants, licensees or any other persons or occupants of the
Building, provided only that the release contained in this
Section 15(b) shall not apply to claims for actual damage to
persons or property (excluding consequential damages such as
lost profits) resulting directly from Xxxxxxxx's breach of its
express obligations under this Lease which Landlord has not
cured within a reasonable time after receipt of written notice
of such breach from Tenant.
Notwithstanding any other provision of this Lease, and to the
fullest extent permitted by law, Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business
or any loss of income therefrom, whether such injury or loss
results from conditions arising upon the Premises or the
Project, or from other sources or places including, without
limitation, any interruption of services and utilities or any
casualty, or from any cause whatsoever, including, Landlord's
negligence, and regardless of whether the cause of such injury
or loss or the means of repairing the same is inaccessible to
Landlord or Tenant. Tenant may elect, at its sole cost and
expense, to obtain business interruption insurance with
respect to such potential injury or loss.
C. LIMITATION ON INDEMNITY. In compliance with RCW 4.24.115 as in
effect on the date of this Lease, all provisions of this Lease
pursuant to which Landlord or Tenant (the "Indemnitor") agrees
to indemnify the other (the "Indemnitee") against liability
for damages arising out of bodily injury to Persons or damage
to property relative to the construction, alteration, repair,
addition to, subtraction from, improvement to, or maintenance
of, any building, road, or other structure, project,
development, or improvement attached to real estate, including
the Premises, (i) shall not apply to damages caused by or
resulting from the sole
19.
negligence of the Indemnitee, its agents or employees, and
(ii) to the extent caused by or resulting from the concurrent
negligence of (a) the Indemnitee or the Indemnitee's agents or
employees, and (b) the Indemnitor or the Indemnitor's agents
or employees, shall apply only to the extent of the
Indemnitor's negligence; PROVIDED, HOWEVER, the limitations on
indemnity set forth in this Section shall automatically and
without further act by either Landlord or Tenant be deemed
amended so as to remove any of the restrictions contained in
this Section no longer required by then applicable law.
D. DEFINITIONS. As used in any Section establishing indemnity or
release of Landlord, "Landlord" shall include Landlord, its
partners, officers, agents, employees and contractors, and
"Tenant" shall include Tenant and any person or entity
claiming through Tenant.
16. INSURANCE. Landlord shall maintain, or cause to be maintained, standard
fire and extended coverage insurance on the Project (excluding
leasehold improvements by Tenant in excess of those standard for the
building and Tenant's property) in amounts considered by Landlord to be
reasonable and customary. The insurance required to be obtained by
Landlord may be obtained by Landlord through blanket or master policies
insuring other entities or properties owned or controlled by Landlord.
Tenant shall, throughout the term of this Lease and any renewal hereof,
at its own expense, keep and maintain in full force and effect, a
policy of commercial general liability (occurrence form) insurance,
including contractual liability (including Tenant's indemnification
obligations under this Lease) insuring Tenant's activities upon, in or
about the Premises or the Project, against claims of bodily injury or
death or property damage or loss with a combined single limit of not
less than One Million Dollars ($1,000,000) per occurrence and Three
Million Dollars ($3,000,000) in the aggregate, with such increases in
limits as Landlord may from time to time require consistent with
insurance requirements of institutional landlords in similar projects
in the area. If Tenant manufactures on the Premises consumer goods
using any materials supplied by Landlord (including but not limited to
water supplied as part of utilities to the Premises), Tenant's
insurance shall include products liability insurance in the amounts
specified for the commercial general liability insurance.
Tenant shall further, throughout the term of this Lease and any renewal
thereof, at its own expense, keep and maintain in full force and
effect, what is commonly referred to as "Special Cause of Loss" or
"Special" coverage insurance (excluding earthquake and flood) on
tenant's leasehold improvements in an amount equal to one hundred
percent (100%) of the replacement value thereof with a coinsurance
waiver. The proceeds from any such policy shall be used by Tenant for
the restoration of Tenant's improvements or alterations. As used in
this Lease, "tenant's leasehold improvements" shall mean any
alterations, additions or improvements installed in or about the
Premises by or with Landlord's permission or otherwise permitted by
this Lease, whether or not the cost thereof was paid for by Xxxxxx.
20.
All insurance required to be provided by Tenant under this Lease: (a)
shall be issued by Insurance companies authorized to do business in the
state in which the premises are located with a financial rating of at
least an AVIII status as rated in the most recent edition of Best's
Insurance Reports or equivalent rating organization; (b) shall be
issued as a primary policy; shall be on an occurrence basis; (c) name
Landlord and Landlord's property manager as additional insured; and (d)
shall contain an endorsement requiring at least 30 days prior written
notice of cancellation to Landlord and Landlord's lender, before
cancellation or change in coverage, scope or amount of any policy.
Tenant shall deliver a certificate or copy of such policy together with
evidence of payment of all current premiums to Landlord within 30 days
of execution of this Lease and at the time of all renewals thereof. If
Tenant fails at any time to maintain the insurance required by this
Lease, and fails to cure such default within five (5) business days of
written notice from Landlord then, in addition to all other remedies
available under this Lease and applicable law, Landlord may purchase
such insurance on Tenant's behalf and the cost of such insurance shall
be Additional Rent due within thirty (30) days of written invoice from
Landlord to Tenant.
Each party hereto waives all rights of recovery, claims, actions or
causes of actions arising in any manner in its (the "Injured Party's")
favor and against the other party for loss or damage to the Injured
Party's property located within or constituting a part or all of the
Project, to the extent the loss or damage: (a) is covered by the
Injured Party's insurance; or (b) would have been covered by the
insurance the Injured Party is required to carry under this Lease,
whichever is greater, regardless of the cause or origin, including the
sole, contributory, partial, joint, comparative or concurrent
negligence of the other party. All insurance carried by either Landlord
or Tenant covering the losses and damages described in this section
shall provide for such waiver of rights of subrogation by the Injured
Party's insurance carrier to the maximum extent that the same is
permitted under the laws and regulations governing the writing of
insurance within the state in which the building is located. Both
parties hereto are obligated to obtain such a waiver and provide
evidence to the other party of such waiver. The waiver set forth in
this section shall be in addition to, and not in substitution for, any
other waivers, indemnities or exclusions of liability set forth in this
Lease.
17. DESTRUCTION. If during the term, the Premises or Project are more than
30% destroyed from any cause, or rendered inaccessible or unusable from
any cause, Landlord may, in its sole discretion, terminate this Lease
by delivery of notice to Tenant within 30 days of such event without
compensation to Tenant. If in Landlord's estimation, the Premises
cannot be restored within 90 days following such destruction, the
Landlord shall notify Tenant and Tenant may terminate this Lease by
delivery of notice to Landlord within 30 days of receipt of Landlord's
notice. If neither Landlord nor Tenant terminates this Lease as
provided above, then Landlord shall commence to restore the Premises in
compliance with then existing laws and shall complete such restoration
with due diligence. In such event, this Lease shall remain in full
force and effect, but there shall be an abatement of Base Monthly Rent
and Xxxxxx's Share of Expenses between the date of destruction and the
date of completion of restoration, based on the extent to which
destruction interferes with Xxxxxx's use of the Premises.
21.
18. CONDEMNATION.
a. TAKING. If all of the Premises are taken by Eminent Domain,
this Lease shall terminate as of the date Tenant is required
to vacate the Premises and all Base and Additional Rent shall
be paid to that date. The term "Eminent Domain" shall include
the taking or damaging of property by, through or under any
governmental or statutory authority, and any purchase or
acquisition in lieu thereof, whether the damaging or taking is
by government or any other person. If, in the reasonable
judgment of Landlord, a taking of any part of the Premises by
Eminent Domain renders the remainder thereof unusable for the
business of Tenant (or the cost of restoration of the Premises
is not commercially reasonable), the Lease may, at the option
of either party, be terminated by written notice given to the
other party not more than thirty (30) days after Landlord
gives Tenant written notice of the taking, and such
termination shall be effective as of the date when Tenant is
required to vacate the portion of the Premises so taken. If
this Lease is so terminated, all Base and Additional Rent
shall be paid to the date of termination. Whenever any portion
of the Premises is taken by Eminent Domain and this Lease is
not terminated, Landlord shall at its expense proceed with all
reasonable dispatch to restore, to the extent of available
proceeds, the remainder of the Premises to the condition they
were in immediately prior to such taking, including the
Landlord's Work and Xxxxxx's Work described in the Work
Letter, and Tenant shall at its expense proceed with all
reasonable dispatch to restore its personal property and all
improvements and alterations other than the Tenant's Work made
by it to the Premises to the same condition they were in
immediately prior to such taking. The Base and Additional Rent
payable hereunder shall be reduced from the date Tenant is
required to partially vacate the Premises in the same
proportion that the Rentable Area taken bears to the total
Rentable Area of the Premises prior to taking.
b. AWARD. Landlord reserves all right to the entire damage award
or payment for any taking by Eminent Domain, and Tenant waives
all claim whatsoever against Landlord for damages for
termination of its leasehold interest in the Premises or for
interference with its business. Tenant hereby grants and
assigns to Landlord any right Tenant may now have or hereafter
acquire to such damages and agrees to execute and deliver such
further instruments of assignment as Landlord may from time to
time request. Tenant shall, however, have the right to claim
from the condemning authority all compensation that may be
recoverable by Tenant on account of any loss incurred by
Tenant in moving Tenant's merchandise, furniture, trade
fixtures and equipment, provided, however, that Tenant may
claim such damages only if they are awarded separately in the
eminent domain proceeding and not out of or as part of
Landlord's damages.
19. ASSIGNMENT OR SUBLEASE. Tenant shall not assign or encumber its
interest in this Lease or the Premises or sublease all or any part of
the Premises or allow any other person or entity (except Tenant's
authorized representatives, employees, invitees, or guests) to occupy
or use all or any part of the Premises without first obtaining
Landlord's consent which shall not be unreasonably withheld for tenants
meeting Landlord's
22.
then-existing standards for creditworthiness and use. No assignment or
sublease shall release Tenant from the obligation to perform all
obligations under this Lease. Any assignment, encumbrance or sublease
without Landlord's written consent shall be voidable and at Landlord's
election, shall constitute a default. If Tenant is a partnership, a
withdrawal or change, voluntary, involuntary or by operation of law of
any partner, or the dissolution of the partnership, shall be deemed a
voluntary assignment. If Tenant consists of more than one person, a
purported assignment, voluntary or involuntary or by operation of law
from one person to the other shall be deemed a voluntary assignment. If
Tenant is a corporation, any dissolution, merger, consolidation or
other reorganization of Tenant, or sale or other transfer of a
controlling percentage of the capital stock of Tenant, or the sale of
at least 25% of the value of the assets of Tenant shall be deemed a
voluntary assignment. The phrase "controlling percentage" means
ownership of and right to vote stock possessing at least 25% of the
total combined voting power of all classes of Tenant's capital stock
issued, outstanding and entitled to vote for election of directors.
This Section 19 shall not apply to corporations the stock of which is
traded through an exchange or over the counter. Seventy-five (75%) of
all rent received by Tenant from its subtenants in excess of the Rent
payable by Tenant to Landlord under this Lease, or any sums to be paid
by an assignee to Tenant in consideration of the assignment of this
Lease after deducting therefrom brokers' commissions, reasonable
attorneys' fees and costs for improving the Premises for such
subtenants or assignee (said costs to be amortized, without interest,
over the term of the sublease or remaining term of the Lease, as
applicable), shall be paid to Landlord. If Tenant requests Xxxxxxxx to
consent to a proposed assignment or subletting, Tenant shall pay to
Landlord, whether or not consent is ultimately given, $100 or
Landlord's reasonable attorney's fees, not to exceed $ 1,000, incurred
in connection with such request, whichever is greater.
No interest of Tenant in this Lease shall be assignable by involuntary
assignment through operation of law (including without limitation the
transfer of this Lease by testacy or intestacy). Each of the following
acts shall be considered an involuntary assignment: (a) if Tenant is or
becomes bankrupt or insolvent, or institutes proceedings under the
Bankruptcy Act in which Tenant is the bankrupt; or if Tenant is a
partnership or consists of more than one person or entity, if any
partner of the partnership or other person or entity is or becomes
bankrupt or insolvent, or makes an assignment for the benefit of
creditors; or (b) if a writ of attachment or execution is levied on
this Lease; or (c) if in any proceeding or action to which Xxxxxx is a
party, a receiver is appointed with authority to take possession of the
Premises. An involuntary assignment shall constitute a default by
Tenant and Landlord shall have the right to elect to terminate this
Lease, in which case this Lease shall not be treated as an asset of
Tenant.
Notwithstanding anything to the contrary contained in this Lease,
provided that the net worth of the succeeding entity is not less than
75% of the net worth of Tenant, Tenant may assign this Lease or sublet
the Premises, or any portion thereof, without Landlord's consent, to
any entity which controls, is controlled by, or is under common control
with Tenant; to any entity which results from a merger of,
reorganization of, or consolidation with Tenant; to any entity engaged
in a joint venture with Tenant; or to any entity which acquires
substantially all of the stock or assets of Tenant, as a going concern,
with respect to the business that is being conducted in the Premises
(hereinafter each a "Permitted
23.
Transfer"). In addition, a sale or transfer of the capital stock of
Tenant shall be deemed a Permitted Transfer if (1) such sale or
transfer occurs in connection with any bona fide financing or
capitalization for the benefit of Tenant, or (2) Tenant is or becomes a
publicly traded corporation. Landlord shall have no right to terminate
the Lease in connection with, and shall have no right to any sums or
other economic consideration resulting from any Permitted Transfer.
20. EVENT OF DEFAULT. The occurrence of any of the following shall
constitute a default by Tenant: (a) a failure to pay Rent or other
charge when due, provided that Landlord shall not exercise any of its
rights under this Section 20(a) until Landlord has given Tenant notice
of such default and a cure period of three (3) days from receipt of
such notice, and Tenant has failed to pay such rent or other charge or
establish the entry system within such cure period; (b) abandonment and
vacation of the Premises (failure to occupy and operate the Premises
for ten consecutive days while in monetary default under this Lease
shall be conclusively deemed an abandonment and vacation); or (c)
failure to perform any other provision of this Lease, provided that
Landlord shall not exercise any of its rights under this Section 20(c)
until Landlord has given Tenant notice of such default and a cure
period of thirty (30) days from receipt of such notice, and Tenant has
failed to cure such default within such cure period, provided further
that if more than thirty (30) days are required to complete such
performance, the cure period shall not be deemed to have run so long as
Tenant commences to cure such default within the thirty (30) day period
and thereafter diligently pursues its completion. The notice required
by this Section is intended to satisfy any and all notice requirements
imposed by law on Landlord and is not in addition to any such
requirement.
21. LANDLORD'S REMEDIES. If an Event of Default by Tenant occurs, Landlord
shall have the following remedies. (These remedies are not exclusive;
they are cumulative and in addition to any remedies now or later
allowed by law): Landlord may terminate Tenant's right to possession of
the Premises at any time. No act by Landlord other than giving notice
to Tenant shall terminate this Lease. Acts of maintenance, efforts to
relet the Premises, or the appointment of a receiver on Landlord's
initiative to protect Xxxxxxxx's interest under this Lease shall not
constitute a termination of Tenant's right to possession. Upon
termination of Tenant's right to possession, Landlord has the right to
recover from Tenant: (1) the worth of the unpaid Rent that had been
earned at the time of termination of Tenant's right to possession; (2)
the worth of the amount of the unpaid Rent that would have been earned
after the date of termination of Tenant's right to possession less the
amount that Tenant proves Landlord should be able to earn during such
period net of all releasing costs; (3) any other amount, including but
not limited to, expenses incurred to relet the Premises, court,
attorney and collection costs, necessary to compensate Landlord for all
detriment caused by Xxxxxx's default. "The Worth," as used for Item (1)
in this Paragraph 21 is to be computed by allowing interest at the rate
of 12 percent per annum. If the interest rate specified in this Lease
is higher than the rate permitted by law, the interest rate is hereby
decreased to the maximum legal interest rate permitted by law. "The
Worth" as used for Item (2) in this Paragraph 21 is to be computed by
discounting the amount at the discount rate of the Federal Reserve Bank
of San Francisco at the time of termination of Tenant's right of
possession.
24.
22. ENTRY ON PREMISES. Landlord and its authorized representatives shall
have the right to enter the Premises at all reasonable times on
reasonable prior notice (provided that no notice shall be required in
an emergency) for any of the following purposes: (a) to determine
whether the Premises are in good condition and whether Tenant is
complying with its obligations under this Lease; (b) to do any
necessary maintenance and to make any restoration to the Premises or
the Project that Landlord has the right or obligation to perform; (c)
to post "for sale" signs at any time during the term, to post "for
rent" or "for lease" signs during the last 90 days of the Term, or
during any period while Tenant is in default; (d) to show the Premises
to prospective brokers, agents, buyers or persons interested in
purchasing the Project, at any time during the Term, or to prospective
tenants interested in leasing the Premises during the last 90 days of
the Term; or (e) to repair, maintain or improve the Project and to
erect scaffolding and protective barricades around and about the
Premises, and to do any other act or thing necessary for the safety or
preservation of the Premises or the Project; provided, however, with
respect to each of subclauses (a) through (e) above, Landlord agrees
that any entry into the Premises will be limited to accomplishment of
tasks set forth in Landlord's notice, and Landlord shall use
commercially reasonable best efforts not to prevent entry to the
Premises or otherwise interfere with Xxxxxx's use and enjoyment of the
Premises and Project, and Landlord shall diligently perform the
relevant work or task to completion. Tenant shall have the right to
have a representative present during any entry within the Premises by
Landlord. Notwithstanding the foregoing, in the event that Landlord
requires access to the Premises during any time period when no Tenant
representative is available and Landlord reasonably believes that a
condition exists within any portion of the Premises, which condition
poses an immediate threat of harm to any person or property (i.e., an
"emergency"), Tenant hereby instructs Landlord to use whatever force
and means are reasonably necessary to gain access to the Premises.
Except to the extent caused by Xxxxxxxx's gross negligence or willful
misconduct (and in any event excluding consequential damages such as
lost profits), Landlord shall not be liable in any manner for any
inconvenience, disturbance, loss of business, nuisance or other damage
arising out of Landlord's entry onto the Premises as provided in this
Section 22. Except as otherwise set forth in this Lease, Tenant shall
not be entitled to an abatement or reduction of Rent if Landlord
exercises any rights reserved in this Section 22. Without limiting any
other requirement of Landlord herein, Landlord shall conduct its
activities on the Premises in a commercially reasonable manner so as to
limit inconvenience, annoyance or disturbance to Tenant to the maximum
extent practicable.
23. SUBORDINATION; ESTOPPEL CERTIFICATE.
a. SUBORDINATION. Without the necessity of any additional
document being executed by Tenant for the purpose of effecting
a subordination, and at the election of Landlord or any
mortgagee or any beneficiary of a Deed of Trust with a lien on
the Project or any ground lessor with respect to the Project,
this Lease shall be subject and subordinate at all times to
(a) all ground leases or underlying leases which may now exist
or hereafter be executed affecting the Project, and (b) the
lien of any mortgage or deed of trust which may now exist or
hereafter be executed in any amount for which the Project,
ground leases or underlying leases, or Landlord's interest or
estate in any of said items is specified as security. In the
25.
event that any ground lease or underlying lease terminates for
any reason or any mortgage or Deed of Trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason,
Tenant shall, notwithstanding any subordination, attorn to and
become the Tenant of the successor in interest to Landlord, at
the option of such successor in interest. Tenant covenants and
agrees to execute and deliver, upon demand by Xxxxxxxx and in
the form requested by Landlord any additional documents
evidencing the priority or subordination of this Lease with
respect to any such ground lease or underlying leases or the
lien of any such mortgage or Deed of Trust. Notwithstanding
the foregoing, Tenant shall not be required to subordinate its
interest under this Lease unless (a) such subordination does
not materially increase Tenant's obligations, or materially
decrease its rights under this Lease, and (b) Landlord first
obtains from the holder of the mortgage, deed of trust, or
other instrument of security to which this Lease is to become
subordinated a written agreement that provides substantially
the following: "As long as Tenant performs its obligations
under this Lease, Tenant shall not be disturbed in its quiet
enjoyment under this Lease by any foreclosure of, deed given
in lieu of foreclosure of, or sale under the encumbrance, or
steps or procedures taken under the encumbrance."
b. ESTOPPEL CERTIFICATE. Tenant shall, within 10 days of demand,
execute and deliver to Landlord a written statement
certifying: (i) the commencement and the expiration date of
the Term; (ii) the amount of Base Rent and the date to which
it has been paid; (iii) that this Lease is in full force and
effect and has not been assigned or amended in any way (or
specifying the date and terms of each agreement so affecting
this Lease) and that no part of the Premises has been sublet
(or to the extent such is not the case, a copy of any
sublease); (iv) that Landlord is not in default under this
Lease (or if such is not the case, the extent and nature of
such default); (v) on the date of such certification, there
are no existing defenses or claims which Tenant has against
Landlord (or if such is not the case, the extent and nature of
such defenses or claims); (vi) the amount of the Security
Deposit held by Landlord; and (vii) any other fact or
representation that a mortgagee or purchaser may reasonably
request. It is intended that any such statement shall be
binding upon Tenant and may be relied upon by a prospective
purchaser or mortgagee. If Tenant fails to respond within 10
days of receipt of a written request by Landlord therefor, (a)
Tenant shall be deemed to have given a certificate as above
provided, without modification, and shall be conclusively
deemed to have admitted the accuracy of any information
supplied by Landlord to a prospective purchaser or mortgagee,
and (b) Landlord may impose a fee of $100 per day for each day
of delay in providing the statement by Xxxxxx after the 10 day
period.
24. NOTICE. Any notice, demand or request required hereunder shall be given
in writing to the party's facsimile number or address set forth in
Section 1 hereof by any of the following means: (a) personal service;
(b) electronic communication, whether by telex, telegram or facsimile
with electronic confirmation; (c) overnight courier; or (d) registered
or certified, first class mail, return receipt requested. Such
addresses may be changed by notice to the other parties given in the
same manner as above provided. Any notice,
26.
demand or request sent pursuant to either subsection (a) or (b) hereof
shall be deemed received upon such personal service or upon dispatch by
electronic means with electronic confirmation of receipt. Any notice,
demand or request sent pursuant to subsection (c) hereof shall be
deemed received on the business day immediately following deposit with
the overnight courier and, if sent pursuant to subsection (d), shall be
deemed received forty-eight (48) hours following deposit in the U.S.
mail. Tenant hereby appoints as its agent to receive the service of all
dispossessory or distraint proceedings and notices thereunder the
person in charge of or occupying the Premises at the time, and, if no
person shall be in charge of occupying the same, then such service may
be made by attaching the same on the main entrance of the Premises.
25. WAIVER. No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a waiver.
No act or conduct of Landlord, including without limitation, acceptance
of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by Tenant before the expiration of the term.
Only written notice from Landlord to Tenant shall constitute acceptance
of the surrender of the Premises and accomplish termination of the
Lease. Xxxxxxxx's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by
Xxxxxx. Any waiver by Landlord of any default must be in writing and
shall not be a waiver of any other default concerning the same or any
other provision of the Lease. TENANT SPECIFICALLY ACKNOWLEDGES AND
AGREES THAT, WHERE TENANT HAS RECEIVED A NOTICE TO CURE DEFAULT
(WHETHER RENT OR NON-RENT), NO ACCEPTANCE BY LANDLORD OF RENT SHALL BE
DEEMED A WAIVER OF SUCH NOTICE, AND, INCLUDING BUT WITHOUT LIMITATION,
NO ACCEPTANCE BY LANDLORD OF PARTIAL RENT SHALL BE DEEMED TO WAIVE OR
CURE ANY RENT DEFAULT. LANDLORD MAY, IN ITS DISCRETION, AFTER RECEIPT
OF PARTIAL PAYMENT OF RENT, REFUND SAME AND CONTINUE ANY PENDING ACTION
TO COLLECT THE FULL AMOUNT DUE, OR MAY MODIFY ITS DEMAND TO THE UNPAID
PORTION. IN EITHER EVENT THE DEFAULT SHALL BE DEEMED UNCURED UNTIL THE
FULL AMOUNT IS PAID IN GOOD FUNDS.
26. SURRENDER OF PREMISES; HOLDING OVER. Upon expiration of the term,
Xxxxxx shall surrender to Landlord the Premises and all Tenant's Work
and Tenant Improvements and alterations in good condition, except for
ordinary wear and tear and alterations Tenant has the right or is
obligated to remove under the provisions of Section 14 herein. Tenant
shall remove all personal property including, without limitation, all
data and phone wires, wallpaper, paneling and other decorative
improvements or fixtures which were not part of the Tenant Improvements
and shall perform all restoration made necessary by the removal of any
alterations or Tenant's personal property before the expiration of the
Term, including for example, restoring all wall surfaces to their
condition prior to the commencement of this Lease. Landlord can elect
to retain or dispose of in any manner Tenant's personal property not
removed from the Premises by Tenant prior to the expiration of the
Term. Tenant waives all claims against Landlord for any damage to
Tenant resulting from Xxxxxxxx's retention or
27.
disposition of Xxxxxx's personal property. Tenant shall be liable to
Landlord for Landlord's cost for storage, removal or disposal of
Tenant's personal property.
If Xxxxxx, with Xxxxxxxx's 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 as provided under Washington law, by either party. All
provisions of this Lease, except those pertaining to term and Rent,
shall apply to the month-to-month tenancy. During any holdover term,
Tenant shall pay Base Monthly Rent in an amount equal to 150% of Base
Monthly Rent for the last full calendar month during the regular term
plus 100% of Tenant's share of Expenses pursuant to Section 4(b)(3). If
Xxxxxx fails to surrender possession of the Premises upon termination
or expiration of this Lease and if Tenant does not obtain Landlord's
written consent to Xxxxxx's continued occupancy, then Tenant shall be
deemed a trespasser and shall be liable to Landlord for all damages
sustained by Landlord as a result thereof, together with Base Rate at a
rate double the Latest Rate.
27. LIMITATION OF LANDLORD'S LIABILITY. In consideration of the benefits
accruing hereunder, Xxxxxx agrees that, in the event of any actual or
alleged failure, breach or default of this Lease by Landlord,
Landlord's liability under this Lease shall be limited to, and Tenant
shall look only to Landlord interest in the Project and the rents and
proceeds thereof.
28. BUILDING PLANNING. If Landlord requires the Premises for use in
conjunction with another suite or for other reasons connected with the
Project planning program, upon notifying Tenant in writing, Landlord
shall have the right to move Tenant to other space in the Project that
is substantially the same in size, configuration and tenant
improvements, such move (including out-of-pocket ancillary costs such
as reprinting of stationary) to be at Landlord's sole cost and expense.
Upon such move, the terms and conditions of the original Lease shall
remain in full force and effect, save and excepting that a revised
Exhibit "A" shall become part of this Lease and shall reflect the
location of the new space and Section 1 of this Lease shall be amended
to include and state all correct data as to the new space.
29. MISCELLANEOUS PROVISIONS.
a. TIME OF ESSENCE. Time is of the essence of each provision of
this Lease.
b. SUCCESSOR. This Lease shall be binding on and inure to the
benefit of the parties and their successors, except as
provided in Section 19 herein.
c. LANDLORD'S CONSENT. Any consent required by Landlord under
this Lease must be granted in writing and may be withheld or
conditioned by Landlord in its sole and absolute discretion.
d. COMMISSIONS. Each party represents that it has not had
dealings with any real estate broker, finder or other person
with respect to this Lease in any manner, except for the
broker(s) identified in Section 1. Landlord shall pay a
commission,
28.
to be divided equally among the brokers, of Five Percent of
Base Monthly Rent for the first 60 months, to be paid one-half
on lease execution and one-half on occupancy. Each party shall
be responsible for, and indemnify the other party against, any
additional sums claimed by its broker. Landlord and Tenant
recognize that it is possible that they may hereafter make
additional agreements regarding further extension or renewal
of this Lease or a new lease or leases for all or one or more
parts of the Premises or other space in the Project for a term
or terms commencing after the Commencement Date of this Lease.
Landlord and Xxxxxx recognize that it is also possible that
they may hereafter modify this Lease to add additional space
or to substitute space as part of the Premises. If any such
additional agreements, new leases or modifications to this
Lease are made, Landlord shall not have any obligation to pay
any compensation to any real estate broker or to any other
third person engaged by Tenant to render services to Tenant in
connection with negotiating such matters, regardless of
whether under the circumstances such person is or is not
regarded by the law as an agent of Landlord.
e. OTHER CHARGES. If either party commences any litigation
against the other party or files an appeal of a decision
arising out of or in connection with the Lease, the prevailing
party shall be entitled to recover from the other party
reasonable attorney's fees and costs of suit. If Landlord
employs a collection agency to recover delinquent charges,
Xxxxxx agrees to pay all collection agency and reasonable
attorneys' fees charged to Landlord in addition to Rent, late
charges, interest and other sums payable under this Lease.
Tenant shall pay a charge of $75 to Landlord for preparation
of a demand for delinquent Rent.
f. FORCE MAJEURE. Landlord shall not be deemed in default hereof
nor liable for damages arising from its failure to perform its
duties or obligations hereunder if such is due to causes
beyond its reasonable control, including, but not limited to,
acts of God, acts of civil or military authorities, fires,
floods, windstorms, earthquakes, strikes or labor
disturbances, civil commotion, delays in transportation,
governmental delays or war.
g. RULES AND REGULATIONS. Tenant shall faithfully observe and
comply with the "Rules and Regulations", a copy of which is
attached hereto, and all reasonable and nondiscriminatory
modifications thereof and additions thereto from time to time
put into effect by Xxxxxxxx. Landlord shall not be responsible
to Tenant for the violation or non-performance by any other
tenant or occupant of the building or Project of said tenant
or occupant's lease or of any of said Rules and Regulations.
h. XXXXXXXX'S SUCCESSORS. In the event of a sale or conveyance by
Landlord of the Project, the same shall operate to release
Landlord from any liability under this Lease, and in such
event Landlord's successor in interest shall be solely
responsible for all obligations of Landlord under this Lease.
29.
i. INTERPRETATION. This Lease shall be construed and interpreted
in accordance with the laws of the state in which the premises
are located. This Lease constitutes the entire agreement
between the parties with respect to the Premises and the
Project, except for such guarantees or modifications as may be
executed in writing by the parties from time to time. When
required by the context of this Lease, the singular shall
include the plural, and the masculine shall include the
feminine and/or neuter. "Party" shall mean Landlord or Tenant.
If more than one person or entity constitutes Landlord or
Tenant, the obligations imposed upon that party shall be joint
and several. The enforceability, invalidity or illegality of
any provision shall not render the other provisions
unenforceable, invalid or illegal.
j. PRIOR UNDERSTANDINGS. Tenant acknowledges that neither
Xxxxxxxx nor anyone representing Landlord has made statements
of any kind whatsoever on which Xxxxxx has relied in entering
into this Lease. Tenant further acknowledges that Tenant has
relied solely on its independent investigation and its own
business judgment in entering into this Lease. Xxxxxxxx and
Xxxxxx agree that: this Lease supersedes all prior and
contemporaneous understandings and agreement; the provisions
of this Lease are intended by them as the final expression of
their agreement; this Lease constitutes the complete and
exclusive statement of its terms; and no extrinsic evidence
whatsoever may be introduced in any judicial proceeding
involving this Lease. No provision of this Lease may be
amended except by an agreement in writing signed by the
parties hereto or their respective successors in interest,
whether or not such amendment is supported by new
consideration.
k. AUTHORITY. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents
and warrants that he/she is duly authorized to execute and
deliver this Lease on behalf of said corporation. If Xxxxxx is
a partnership, each individual executing this Lease on behalf
of said partnership represents and warrants that he/she is
duly authorized to execute and deliver this Lease on behalf of
said partnership and that this Lease is binding upon said
partnership in accordance with its terms, and concurrently
with execution of this Lease, Tenant shall deliver to Landlord
such evidence of authorization as Landlord may require. If
Tenant is a marital community, or a member of a marital
community, both members of the marital community shall execute
this Lease. Where Tenant is comprised of more than one person
or entity, all covenants, agreements and obligations of Tenant
hereunder shall be the joint and several covenants, agreements
and obligations of each person or entity comprising.
l. CLEAN AIR ACT. Tenant acknowledges that Landlord has not made
any portion of the Premises or the Building accessible for
smoking in compliance with WAC 000-00-00000. If Tenant wishes
to make any portion of the Premises accessible for smoking,
Tenant shall make all improvements necessary to comply with
all applicable governmental rules and regulations. Xxxxxx
acknowledges that the indemnity contained in Section 15 of the
Lease includes, but is not limited to
30.
claims based on the presence of tobacco smoke as a result of
the activities of Tenant, its employees, agents, or guests.
30. OPTION TO RENEW. Tenant is granted the right to extend the term of this
Lease beyond the expiration date of the initial term for one period of
sixty (60) months (the "Extended Term"). Tenant may not exercise its
Extension Right if it is then in default beyond any applicable cure
period or if it has ever been in default beyond any applicable cure
period more than two (2) times in any twelve (12) month period. Tenant
may exercise its Extension Right by delivering written notice thereof
to Landlord not later than one hundred eighty (180) days prior to the
expiration of the initial term. In the Extended Term, all terms and
conditions of this Lease shall apply, except (i) the Work Letter
Agreement shall not apply, and (ii) the Base Monthly Rent for the
Extended Term shall be ninety-five percent (95%) of the Fair Market
Rent for a similar lease and term for similarly situated and improved
space, provided that in no event shall the Base Monthly Rent for the
Extended Term be less than the Base Monthly Rent for the last month of
the initial term. Extension Rights shall apply to all of the Premises
then under lease to Tenant. Tenant's Extension Right is personal and
may not be exercised by any assignee or sublessee other than an
affiliate of Tenant or a successor by merger or consolidation.
The term "Fair Market Rent" for the purposes of this Lease shall mean
the annual amount per rentable square foot that Lessor has accepted in
current, new comparable transactions in the Project for comparable
space, for a comparable period of time, with improvements comparable to
those existing in the Premises on the date Tenant exercises its
Extension Right (or with such restoration as Tenant would be required
to make upon termination of the Lease, if such would increase the Fair
Market Rent) from non-expansion, non-renewal and non-equity tenants, or
if there are not a sufficient number of current comparable transactions
in the Project, what a willing, comparable, new, non-expansion,
non-renewal, non-equity tenant would pay, and a willing, comparable
landlord of a comparable building would accept under the transaction as
further defined above.
If Landlord and Tenant are not able to agree on the Fair Market Rent
component for the Extended Term within thirty days after Xxxxxx's
notice of election to renew, then such Fair Market Rent shall be
determined as follows. Landlord and Tenant shall each select an
appraiser with at least ten years experience in the SODO/Dwamish area.
If the two appraisers are unable to agree within ten days after their
selection, they shall select a similarly qualified third appraiser (the
"Neutral Appraiser"). Within twenty days after selection of the Neutral
Appraiser, the three appraisers shall simultaneously exchange
determinations of Fair Market Rent. If the lowest appraisal is not less
than ninety percent (90%) of the highest appraisal, then the three
appraisals shall be averaged and the result shall be the Fair Market
Rent. If the lowest appraisal is less than ninety percent (90%) of the
highest appraisal, then the Fair Market Rent shall be deemed the rent
set forth in the appraisal submitted an appraiser appointed by a party
that is closest in dollar amount to the appraisal submitted by the
Neutral Appraiser.
31. AMERICANS WITH DISABILITIES ACT. Tenant shall be responsible for
compliance with any requirements of the Americans with Disabilities Act
of 1990 ("ADA") that may be imposed as a result of the Tenant's Work or
Tenant Improvements
31.
constructed pursuant to the Work Letter Agreement. Landlord shall be
responsible, at Xxxxxxxx's expense, for the cost of remedying any
violations of the ADA existing as of the Commencement Date, except that
the cost of constructing the Tenant Improvements and Tenant's Work
shall be paid in compliance with the Work Letter. Landlord hereby
assumes responsibility for compliance with post-Commencement Date
amendments or reinterpretations of the ADA relating to the Common
Areas, and the cost of such compliance shall be an Expense. Tenant
shall be responsible for ensuring that its Tenant's Work and Tenant
Improvements do not cause violations of the ADA and for compliance with
post-Commencement Date amendments or reinterpretations of the ADA
relating to the Premises.
32. BUILDING CODES. Landlord shall be responsible, at Xxxxxxxx's expense,
for the cost of remedying any violations of the such building codes
existing as of the Commencement Date except such violations as may be
created by Xxxxxx's construction of Tenant's Work and Tenant
Improvements. Landlord hereby assumes responsibility for compliance
with post-Commencement Date amendments or reinterpretations of the
applicable building codes relating to the Common Areas, and the cost of
such compliance shall be subject to Section 4(b). Tenant acknowledges
that with respect to Landlord's obligations pursuant to Sections 31 and
32, Landlord shall be entitled to contest any notices of violation, and
shall not be obligated to make any alterations or improvements until so
ordered by the applicable governmental entities, and any contested
matters have been finally resolved.
32.
Landlord: GULL INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Its VICE PRESIDENT
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Its COO
Tenant: BLUE NILE, INC.
By:________________________________
Its
By:________________________________
Its
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Xxxxxxx X.
Xxxxxx is the person who appeared before me, and said person acknowledged that
he signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it as the Vice President of Gull Industries to be
the free and voluntary act of such party for the uses and purposes mentioned in
the instrument.
Dated: 6/28/01
/s/ Xxxxxx Xxxxxxx Xxxxxx
-----------------------------------
(Signature)
Xxxxxx Xxxxxxx Xxxxxx
-----------------------------------
(Print Name)
Notary Public, in and for the State
of Washington, residing at Kent
My Commission Expires 9/1/01
33.
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Xxxxxx X.
Xxxxxx is the person who appeared before me, and said person acknowledged that
he signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it as the Chief Operating Officer of Blue Nile Inc.
to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
Dated: 6/28/01
/s/ Xxxxxx Xxxxxxx Xxxxxx
-----------------------------------
(Signature)
Xxxxxx Xxxxxxx Xxxxxx
-----------------------------------
(Print Name)
Notary Public, in and for the State
of Washington, residing at Kent
My Commission Expires 9/1/01
34.
EXHIBIT A
PREMISES
[KEY PLAN & EXIT PATH]
EXHIBIT B
PROJECT
EXHIBIT C
LANDLORD'S WORK AND
WORK LETTER AGREEMENT
[LANDLORD CONSTRUCTING IMPROVEMENTS]
This Work Letter Agreement is part of that certain Lease ("Lease") by
and between Gull Industries, Inc. ("Landlord") and Blue Nile, Inc. ("Tenant").
This Work Letter Agreement shall govern the initial improvements to the
Premises.
Capitalized terms used but not defined herein shall have the meanings
set forth in the Lease.
1. TENANT IMPROVEMENTS.
Reference herein to "Tenant Improvements" shall include all work to be
done in the Premises pursuant to the Tenant Improvement Plans described in
Paragraph 3 below, including, but not limited to, partitioning, doors, ceilings,
floor coverings, wall finishes (including paint and wall covering), electrical
(including lighting, switching, telephones, outlets, etc.), plumbing, heating,
ventilating and air conditioning, fire protection, cabinets and other millwork.
The parties specifically contemplate that the Tenant Improvements will include:
Security bars on skylight windows on east and west end of 18 foot high portion
of space, floor to roof partition to the extent it does not presently exist
along demising wall, enclosure of shop area, painting of entire Premises, new
ceiling, energy efficient lighting, and new floor covering throughout space
(areas of both VCT and industrial carpeting will be used). "Landlord's Work", as
referenced in the Lease, shall consist of the Tenant Improvements constructed by
Landlord pursuant to this Work Letter Agreement. The parties recognize that in
addition, Landlord may construct (at its expense) earthquake bracing and/or a
new roof, which work shall not be Landlord's Work and shall not be charged as a
Tenant Improvement but which shall be coordinated with construction of the
Tenant Improvements.
2. TENANT IMPROVEMENT PLANS.
Tenant shall deliver final working drawings and specifications by JPC
Architects to Landlord at the time Tenant signs the Lease. Such final working
drawings and specifications shall have been approved by Tenant for use as the
"Tenant Improvement Plans." The "Tenant Improvement Plans" must be consistent
with Landlord's' standard specifications (the "Standards") for tenant
improvements for the Building, as the same may be changed from time to time by
Landlord. Landlord, with Tenant's cooperation, shall cause changes to be made in
the Tenant Improvement Plans only as necessary to obtain the building permit. No
further changes to the Tenant Improvement Plans may be made without the prior
written approval from both Landlord and Tenant, and then only after agreement by
Tenant to pay any excess costs resulting from the design and/or construction of
such changes.
37.
3. NON-STANDARD TENANT IMPROVEMENTS.
Landlord shall permit Tenant to deviate from the Standards for the
Tenant Improvements; provided that (a) the deviations shall not be of a lesser
quality than the Standards; (b) the total lighting for the Premises shall not
exceed 1.65 xxxxx per rentable square foot; (c) the deviations conform to
applicable governmental regulations and necessary governmental permits and
approvals have been secured; (d) the deviations do not require building service
beyond the level normally provided to other tenants in the Building and do not
overload the floors; and (e) Landlord has reasonably determined that the
deviations are of a nature and quality that are consistent with the overall
objectives of the Landlord for the Building.
4. FINAL PRICING.
Landlord shall deliver final pricing to Tenant within 14 days after
execution of the Lease and receipt of approved Tenant Improvement Plans. Tenant
shall have the right to timely review of the cost components and approval of the
final pricing. Said approval shall be provided by Tenant to Landlord within 72
hours of Xxxxxx's receipt of the final pricing.
5. COMPLETION SCHEDULE.
Landlord shall deliver a time table for completion of the installation
of the Tenant Improvements to be constructed in the Premises, and Commencement
Date for the Lease Term, to the Tenant within 14 days after execution of the
Lease and receipt of approved Tenant Improvement Plans. Tenant shall then have
the right to timely review of the time components and approval of the final
schedule. Said approval shall be provided by Tenant to Landlord within 72 hours
of receipt Xxxxxx's of the final schedule.
6. CONSTRUCTION OF TENANT IMPROVEMENTS.
Landlord shall enter into a construction contract with its contractor
for the installation of the Tenant Improvements in accordance with the Tenant
Improvement Plans. Landlord shall cause the Tenant Improvements to be
constructed in a good and workmanlike manner in accordance with the Tenant
Improvement Plans. Landlord shall be solely responsible to interpret Tenant
Improvement Plans and shall supervise the completion of such work and shall use
its commercially reasonable best efforts to secure substantial completion of the
work in accordance with the Completion Schedule. Landlord shall not be liable
for any direct or indirect damages as a result of delays in construction beyond
Landlord's reasonable control, including, but not limited to, acts of God,
inability to secure governmental approvals or permits, governmental
restrictions, strikes, availability of materials or labor or delays by Tenant
(or its architect or anyone performing services on behalf of Tenant).
7. PAYMENT OF COST OF THE TENANT IMPROVEMENTS.
a. Landlord hereby grants to Tenant an allowance ("Tenant Allowance") of up to
Ten Dollars ($10.00) per Rentable Square Foot of the Premises, which is
initially estimated as Ninety-Four Thousand Dollars ($94,000) and shall be
reconciled upon final measurement of the Premises.
38.
b. (Subsection Intentionally Omitted)
c. The Tenant Allowance shall be used only for:
(1) Payment of the cost of preparing the space plan and the final
working drawings and specifications, including mechanical, electrical, plumbing
and structural drawings and of all other aspects of the Tenant Improvement
Plans. The Tenant Allowance will not be used for the payment of extraordinary
design work not included within the scope of Landlord's building standard
improvements or for payments to any other consultants, designers or architects
other than Xxxxxxxx's architect and/or space planner.
(2) The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements.
(3) Construction of the Tenant Improvements (specifically
excluding, however, earthquake bracing and/or a new roof), including, without
limitation, the following:
(a) Installation within the Premises of all partitioning,
doors, floor coverings, ceilings, wall coverings and painting, millwork
and similar items.
(b) All electrical wiring, lighting fixtures, outlets and
switches, and other electrical work to be installed within the
Premises.
(c) The furnishing and installation of all duct work,
terminal boxes, diffusers and accessories required for the completion
of the heating, ventilation and air conditioning systems within the
Premises, including the cost of meter and key control for after-hour
air conditioning.
(d) Any additional Tenant requirements including, but not
limited to, odor control, special beating, ventilation and air
conditioning, noise or vibration control or other special systems.
(e) All fire and life safety control systems such as fire
walls, sprinklers, halon, fire alarms, including piping, wiring and
accessories installed within the Premises.
(f) All plumbing, fixtures, pipes and accessories to be
installed within the Premises.
(g) Testing and inspection costs.
(h) Contractor's fees, including but not limited to any
fees based on general conditions.
(4) All other costs to be expended by Landlord in the construction
of the Tenant Improvements, including those costs incurred by Landlord for
construction of elements of the Tenant Improvements in the Premises.
39.
(5) Notwithstanding the above, the Tenant allowance may not be
used for the vault or work inside or to the exterior thereof, cabling and
security system constructed as Tenant's Work pursuant to Section 8 below or for
earthquake bracing and/or a new roof.
d. The cost of each item shall be charged against the Tenant Allowance. In
the event that the cost of installing the Tenant Improvements, as established by
the final pricing schedule approved by Tenant and the construction contract
approved by Tenant (including any change orders required to deal with plan
inconsistencies or deficiencies or unanticipated conditions or changes requested
by Xxxxxx), shall exceed the Tenant Allowance, the excess shall be paid or
bonded by Tenant to Landlord prior to the commencement of construction of the
Tenant Improvements.
e. (Subsection Intentionally Omitted)
f. (Subsection Intentionally Omitted)
g. Any unused portion of the Tenant Allowance shall be retained by
Landlord.
8. TENANT'S WORK.
Tenant Improvements shall not include Tenant's vault (which shall be a
six-sided vault), Xxxxxx's cabling or Tenant's security system (collectively
"Tenant's Work"). Tenant may, simultaneous with construction of the Tenant
Improvements contract for Tenant's Work, provided that (i) all such construction
shall be pursuant to the approvals and requirements of Section 14 of the Lease,
and (ii) Tenant shall coordinate Tenant's Work with the Tenant Improvements so
as to prevent the Tenant's Work from causing any delay in construction of the
Tenant Improvements.
40.
EXHIBIT D
RULES AND REGULATIONS
TO BE DEVELOPED SUBJECT TO TENANT'S REASONABLE REVIEW AND APPROVAL OF RULES
AND REGULATIONS SIMILAR TO THOSE COMMONLY FOUND IN PROJECTS OF
THIS TYPE IN THE AREA
41.
EXHIBIT E
SIGN CRITERIA
TO BE DEVELOPED SUBJECT TO TENANT'S REASONABLE REVIEW AND APPROVAL OF SIGN
CRITERIA SIMILAR TO THOSE COMMONLY FOUND IN PROJECTS OF
THIS TYPE IN THE AREA
42.
EXHIBIT F
ADDITIONAL UTILITIES OR SERVICES
[IF APPLICABLE]
43.
EXHIBIT G
PERMITTED SUBSTANCES
Propane tanks, oxygen tanks, acid-based rhodium plating solution, sulphuric
acid, and rhodium sulfate.
44.
EXHIBIT H
PRESERVED PARKINGS
