EXHIBIT 10.27
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (this "Sublease") is made and entered into this 23rd
day of February, 2000, by and between Attachmate Corporation, a Washington
corporation ("Attachmate") and Mercata, Inc., a Delaware corporation,
("Mercata").
WHEREAS, by that certain Office Building Lease, dated April 29, 1998 and the
First Amendment to Four Newport Office Building Lease, dated July 28, 1999,
(collectively known as the "Master Lease"), attached hereto as Exhibit A and
----------
incorporated by reference herein, Attachmate leased from Bentall Newport
Centre L.L.C., ("Bentall") certain premises consisting of approximately One
Hundred Fifty Three Thousand Four Hundred Three (153,403) square feet (the
"Premises") in the Four Newport Building located in Bellevue, Washington (the
"Building"); and
WHEREAS, Attachmate has agreed to sublease a portion of the Premises,
consisting of the approximately Twenty Six Thousand Four Hundred Sixty
(26,460) square feet on the sixth (6th) floor of the Building as depicted on
Exhibit B attached hereto and made a part hereof (the "Subleased Premises") to
----------
Mercata on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the rents, covenants, agreements,
stipulations and provisions contained herein to be paid, kept and performed by
both Mercata and Attachmate, the parties do hereby agree as follows:
1. LEASE DATA AND EXHIBITS:
-----------------------
1.1 Land, Building and Subleased Premises. "Newport Corporate Center" as used
-------------------------------------
in this Sublease means all of the buildings, grounds, streets, parking
areas and other improvements comprising the Newport Corporate Center as
described in the Master Lease. "Land" as used in this Sublease shall mean
the real property legally described on "Exhibit A" of the Master Lease.
"Building" as used in this Sublease means Four Newport Building comprised
of approximately 153,403 rentable square feet and shown on Exhibits A-2
through A-7 of the Master Lease. "Subleased Premises" as used in this
Sublease means that space consisting of approximately 26,460 square feet of
rentable area on the sixth (6th) floor of the Building, as outlined on the
floor plan attached hereto as Exhibit B of this Sublease, including the
---------
applicable Tenant Improvements described in "Exhibit C" of the Master
Lease. As the precise number of rentable square feet in the Subleased
Premises cannot be determined as of the date of this Sublease, the rentable
square feet of the Subleased Premises shall be calculated by Attachmate
within thirty (30) days after the Commencement Date of this Sublease based
on Bentall's final determination of the square footage of the Premises as
set forth in Section 1.3 of the Master Lease. Attachmate shall thereafter
notify Mercata of any necessary adjustments due to such final measurement.
1.2 Term. The term of this Sublease shall be for twenty-four (24) months and
----
fourteen (14) days (the "Term"). Mercata hereby acknowledges that the
Master Lease commences upon Substantial Completion of the Building Shell,
parking, common areas and Tenant Improvements, as such term is defined
under Section 1.4 of the Master Lease. Attachmate hereby subleases the
Subleased Premises to Mercata and Mercata hereby subleases the Subleased
Premises from Attachmate commencing as of the date of Substantial
Completion of the Subleased Premises (the "Commencement Date"). The Master
Lease contemplates that the date of Substantial Completion of the Subleased
Premises will be March 8, 2000 (the "Estimated Commencement Date"), but
such date may be extended as provided in the Master Lease. In the event the
Commencement Date does not occur on or before June 8, 2000, Mercata shall
have the right to terminate this Sublease by giving written notice to
Attachmate of such termination at any time between June 9, 2000 and July 1,
2000 or
1
Mercata's right to so terminate shall lapse and be of no further force and
effect. Attachmate shall provide written notice to Mercata of any
anticipated or actual delay in the Estimated Commencement Date within three
(3) business days of learning of such delay. Mercata hereby acknowledges
that under certain conditions the Master Lease may be terminated pursuant
to Section 2 of the Master Lease, and that if the Master Lease is so
terminated this Sublease shall be terminated after written notice of such
termination to Mercata, and Attachmate shall have no further obligation to
Mercata. If this Sublease is so terminated, all deposits, Rent and other
payments paid in advance by Mercata shall be immediately refunded to
Mercata.
1.3 Option to Extend. Attachmate hereby grants to Mercata the right, privilege
----------------
and option to extend the Term of this Sublease for one (1) period of one
(1) year ("First Extended Term") from the date of expiration of the initial
Term, upon the same terms and conditions as herein contained, except as
indicated below in Section 3. Mercata will be given the option to extend
for the additional one year in the event Attachmate does not intend to
occupy the Subleased Premises at the end of the initial Term. Attachmate
shall provide Mercata with six (6) months prior written notice of its
intention to occupy or not. If Attachmate does not intend to occupy,
Mercata shall exercise the option to extend by providing Attachmate with a
minimum of four (4) months written notice and evidence of the renewal of
the Letter of Credit for the duration of the First Extended Term as
required in Section 4 below.
2. USE:
---
2.1 The Subleased Premises shall be used for Mercata's office and related uses,
and for no other use whatsoever. Mercata shall comply as to the Subleased
Premises with all requirements under the Master Lease as to the Premises,
including, without limitation, Article 7. Provided Mercata complies with
all of the terms of this Sublease, including the payment of Rent, Mercata
shall have the right to leave the Subleased Premises unoccupied. Mercata
acknowledges that neither Bentall nor Attachmate nor any agent acting on
their behalf has made any representation or warranty with respect to the
suitability of the Subleased Premises for the conduct of Mercata's
business.
2.2 Normal building hours are from 7 a.m. to 6 p.m. weekdays and 7 a.m. to 1
p.m. on Saturdays, except for holidays. Access to the building shall be 24
hours per day, 365 days per year for Mercata employees with key cards.
Mercata shall be entitled to all utilities and services provided to
Attachmate under the Master Lease. Mercata will be billed by Attachmate
according to actual usage of after hours HVAC at the rate provided in
Section 6(b) of the Master Lease. Mercata shall be entitled to the same
and as frequent of janitorial and maintenance services to the Subleased
Premises as Attachmate is allowed under the Master Lease, including
janitorial service five (5) days per week.
3. RENT: Beginning on a date fourteen (14) days after the Commencement Date
----
(the "Rent Commencement Date"), Mercata covenants and agrees to pay to
Attachmate, without deduction or set off, base rental for the Term (the
"Base Rent") in monthly installments at the annual rate of $21.00 per
rentable square foot. It is estimated, based on the estimated number of
rentable square feet, that the monthly installment of Base Rent shall be
$46,305.00 per month for each month of the Term. Notwithstanding the
foregoing, Mercata shall be entitled to any abatement of Rent as set forth
in this Sublease or that Attachmate is entitled to with respect to the
Subleased Premises under the Master Lease. Attachmate shall confirm the
exact amount of Base Rent in the Notice, attached hereto as Exhibit C,
---------
within thirty (30) days after the Commencement Date based on its final
determination of the number of rentable square feet in the Subleased
Premises. Should Mercata exercise its option to extend the term of the
Sublease by the additional one year, the Base Rent will be an annual rate
of $22.00 per rentable square foot.
4. SECURITY DEPOSIT: Within fourteen (14) days after the execution and
----------------
delivery of this Sublease, Mercata shall deliver to Attachmate an
irrevocable and unconditional standby Letter of Credit (herein, together
with all replacements thereof, being called the "Letter of Credit") issued
by U.S. Bank of Washington, National Association, Bank of America, or
another bank or financial institution reasonably acceptable to Attachmate.
The Letter of Credit shall secure Mercata's payment obligations under the
Sublease and shall be in an
2
amount equal to $200,000. The term of the Letter of Credit shall extend
from the Commencement Date of the Sublease to the earlier of (i) ninety
(90) days after the expiration of the Term (including any extensions
thereof) or earlier termination of this Sublease; or (ii) in the event
Mercata is not in default under this Sublease, the day after Mercata has
fully surrendered the Subleased Premises to Attachmate in the manner
required under Section 9 below. Further, the Letter of Credit shall contain
an evergreen renewal provision with not less than 90 days notice to
Attachmate on nonrenewal), provided, however, Mercata's notice exercising
it's option to extend the Term shall contain evidence of renewal of the
Letter of Credit for the First Extended Term.
The Letter of Credit shall be in a form reasonably acceptable to
Attachmate, shall be irrevocable, multiple draw, and subject only to the
condition that a proper draw certificate or claim be presented and to no
other condition. The Letter of Credit shall be transferable and assignable
by Attachmate, in whole or in part without cost to Attachmate, upon a
transfer of all of Attachmate's interest in the Premises. Mercata shall pay
all reasonable costs and shall take all reasonable steps necessary for any
such proposed transfer or assignment of the Letter of Credit. If Mercata
shall fail to pay such costs or take such steps in connection with a
proposed transfer or assignment of the Letter of Credit, then Attachmate
may, after written notice to Mercata as required under Section 18 below,
draw upon the Letter of Credit in whole or in part and may transfer the
proceeds of such draw. The Letter of Credit may be drawn in whole or in
part by Attachmate from time to time (and more than one time for partial
draws) upon the occurrence of any event of default by Mercata under the
Sublease, after notice and the expiration of any applicable cure period,
and without further notice to Mercata. Attachmate may draw upon the Letter
of Credit without proceeding against any person or exhausting any other
remedies that Attachmate may have and without resorting to any other
security held by Attachmate. Attachmate may apply the proceeds of the
Letter of Credit in any order or manner to any amounts owed by Mercata
under or pursuant to this Sublease. In the event of a draw by Attachmate
upon the Letter of Credit as provided for herein, Mercata shall be required
to replace the amount of the draw by a like amount to the Letter of Credit
so the balance of the Letter of Credit remains $200,000. Such application
shall not cure an event of default by Mercata under this Sublease until
such time as Mercata has reinstated the drawn amount of the Letter of
Credit in full. Furthermore, in no event shall the Letter of Credit, or
Attachmate's right to draw upon the Letter of Credit, be affected or
impaired by (i) the waiver, compromise, settlement, termination or other
release of the performance or observance by any person liable or to become
liable for the obligations under this Sublease; (ii) the modification or
amendment (whether material or otherwise) of any obligation, covenant or
agreement set forth in this Sublease; (iii) the voluntary or involuntary
liquidation, dissolution, sale of all or substantially all of the assets,
marshalling of assets and liabilities, receivership, conservatorship,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or any similar
proceeding affecting Mercata, or any allegation or contest of the validity
of this Sublease; or (iv) the taking or the omission of any of the actions
referred to in this Sublease.
5. TIME AND PLACE OF PAYMENT: As used herein, the term "Rent" shall include
-------------------------
Base Rent, Additional Rent, and any other payment obligations of Mercata
under this Sublease. Rent shall be due on the first day of each calendar
month after the Rent Commencement Date provided for herein. If the Rent
Commencement Date occurs on a day other than the first (1st) day of the
month, the Rent for such partial month shall be prorated based on a 365-day
year and shall be paid on the Rent Commencement Date of this Sublease. In
the event any payment of Rent is not paid within five (5) days following
the due date, Mercata shall pay to Attachmate upon demand a late charge
equal to 5% of the amount overdue. All payments of Rent shall be made
payable to the order of "Attachmate Corporation" and addressed to
Attachmate Corporation, X.X. Xxx 00000, Xxxxxxxx, XX., 00000-0000 ATTN:
Controller, Finance Department or to such other person or at such other
place as Attachmate may from time to time designate in writing.
6. RENTAL ADJUSTMENT - OPERATING COSTS: Effective with the first payment of
-----------------------------------
Base Rent, and each month thereafter for the balance of the Term, and any
extended Term, Mercata shall pay to Attachmate Additional Rent applicable
to the Subleased Premises as defined in the Master Lease at Section 4. It
is estimated that Mercata's pro rata share of building operating costs and
real estate taxes shall be 17.25%
3
and Mercata's share of operating costs attributable to the Newport
Corporate Centre Common Areas shall be 3.92%. Attachmate shall confirm the
exact amount of Tenant's Percentage in the Notice, attached hereto as
Exhibit C, within thirty (30) days after the Commencement Date. All such
---------
payments shall be made on or prior to the date Attachmate is required under
the Master Lease to make payments of Additional Rent. Attachmate shall
furnish to Mercata no later than ten (10) days after receipt; a copy of all
accountings of Operating Expenses (as defined in the Master Lease)
furnished pursuant to the Master Lease.
7. DESTRUCTION OR DAMAGE TO SUBLEASED PREMISES: In the event the Subleased
-------------------------------------------
Premises or any part thereof are, at any time prior to or during the Term
of this Sublease, damaged by fire or other casualty, this Sublease shall
remain in full force and effect unless and until the Master Lease is
canceled; provided that if more than fifty percent (50%) of the rentable
square feet of the Subleased Premises is damaged by fire or other casualty
on or before the Commencement Date, Mercata shall have the right to
terminate this Sublease upon fifteen (15) days' prior written notice to
Attachmate. If the Master Lease is canceled for such cause, Mercata's
obligations hereunder shall xxxxx as of the effective date thereof.
Otherwise, such obligations shall xxxxx only to the actual monetary extent
and for the duration that Attachmate's obligations are reduced in
accordance with the terms of the Master Lease.
8. RIGHT OF ENTRY: During the initial construction period Mercata shall be
--------------
provided reasonable access to the Subleased Premises for the purpose of
inspecting the Subleased Premises, in the manner and under the same terms
and condition such inspection is available to Attachmate under the Master
Lease. After the Commencement Date, Attachmate, and it's employees, and
contractors shall have the right to enter the Subleased Premises upon
twenty-four (24) hour's prior written notice to Mercata; provided that
Mercata shall have the right to require Attachmate and it's employees and
contractors to sign Mercata's standard non-disclosure agreement and be
accompanied by a representative from Mercata to inspect those two (2) rooms
within the Subleased Premises which contain highly confidential information
of Mercata as highlighted on Exhibit B. Notwithstanding the forgoing,
---------
Bentall shall have the right to enter the Subleased Premises under the
terms and conditions of the Master Lease and in the event of an emergency,
Attachmate shall have the right to gain access to the Subleased Premises
without written notice to Mercata. During the fourteen (14) day period
between the Commencement Date and the Rent Commencement Date Mercata shall
have the right to access the Subleased Premises for the purpose of
installing it's personal property, furniture and equipment, to the same
extent that Attachmate would be allowed to install Attachmate's Personal
Property, as defined in the Master Lease. Mercata and Attachmate shall meet
prior to such date to work out a reasonable and mutually acceptable
schedule for such installation, including, but not limited to the use of
the freight elevator.
9. ACCEPTANCE AND SURRENDER OF SUBLEASED PREMISES: Mercata acknowledges and
----------------------------------------------
agrees that the Subleased Premises will be constructed and improved as
outlined in "Exhibit C" of the Master Lease. Mercata agrees to accept the
Subleased Premises when it is Substantially Complete, as determined by
Attachmate and Bentall pursuant to the Master Lease. Any further
improvements to the Subleased Premises desired by Mercata shall be
submitted to Bentall and Attachmate in the manner required under Section
25A of the Master Lease, except that Mercata shall not be excluded from
seeking approval from Attachmate (but shall be excluded from seeking
approval from Bentall) for improvements which cost less than Ten Thousand
and No/100 Dollars ($10,000.00). Attachmate shall not unreasonably
withhold, condition or delay its approval of such further improvements.
Mercata acknowledges that if approval is given, a condition of such
approval shall be a requirement that Mercata restore the Subleased Premises
to the original Attachmate Tenant Improvements at the end of the Term,
reasonable wear and tear, casualty or condemnation accepted. Mercata shall
bear the full cost and expense of modifying or renovating the Subleased
Premises for its use. All wiring and cabling of the Subleased Premises for
Mercata's purposes shall be at its own expense. Mercata and Attachmate
shall meet prior to such date to work out a reasonable and mutually
acceptable schedule for such installation, including, but not limited to
the use of the freight elevator.
4
Mercata shall, at the end of the Term, or upon sooner termination of this
Sublease pursuant to the terms hereof, promptly surrender the Subleased
Premises in good order and condition and in conformity with the applicable
provisions of this Sublease, and the Master Lease, excepting only
reasonable wear and tear, fire or other casualties or condemnation. Mercata
shall at the request of Attachmate remove any improvements made to the
Subleased Premises in accordance with this Section, so that only the
Attachmate Tenant Improvements are surrendered with the Subleased Premises.
10. ALTERATIONS AND MODIFICATIONS: Mercata agrees to obtain Attachmate's and
-----------------------------
Bentall's prior written approval of alterations, modifications, repairs or
renovations made to the Subleased Premises and such request shall be
submitted to Bentall and Attachmate in the manner required under Section
25A of the Master Lease, except that Mercata shall not be excluded from
seeking approval from Attachmate (but shall be excluded from seeking
approval from Bentall) for improvements which cost less than Ten Thousand
and No/100 Dollars ($10,000.00). Mercata acknowledges that Attachmate and
Bentall's approval of alterations, modifications, repairs or renovations
may be conditioned as set forth in the Master Lease.
Any alterations, modifications or renovations of or to the Subleased
Premises shall be limited to partition changes (non-bearing walls),
electrical and mechanical alterations, telephone relocations, and
decorating. The structural integrity of the Building will not be disturbed
in any way. Mercata shall provide Attachmate and Bentall with a release of
liens at the completion of any alterations or modifications to the
Subleased Premises executed by all contractors who performed such
alterations or modifications. In addition, Mercata agrees that all work
performed upon the Subleased Premises shall be done in a good and
workmanlike manner and shall be in accordance with all applicable law. All
permanent alterations, modifications and renovations, upon completion of
construction thereof, at the option of Attachmate, shall become part of the
Subleased Premises and the property of Attachmate without payment therefor
by Attachmate and shall, at the option of Attachmate, be surrendered to
Attachmate at the end of the Term, any extended term or upon sooner
termination of this Sublease pursuant to the terms of the Sublease or
Master Lease.
11. OBLIGATIONS UNDER MASTER LEASE CONTROLLING: Except as herein provided, and
------------------------------------------
except for Attachmate's obligation to pay the Basic Rent and Additional
Rent pursuant to Sections 3 and 4 of the Master Lease, Mercata agrees to
comply with all of the terms and conditions set forth in the Master Lease
applicable to Attachmate and related to the Subleased Premises and that are
to be performed by Mercata as subtenant under this Sublease; provided that
Mercata shall not have any liability for any default arising due to the
action or inaction of Attachmate, whether monetary or otherwise, under the
Master Lease. All of the terms and conditions of the Master Lease related
to the Subleased Premises shall apply in the same manner to Mercata as they
are expressed therein to apply to Attachmate under the Master Lease except
as modified or deleted pursuant to the terms of this Sublease. Attachmate
covenants and agrees to perform all of its obligations under the Master
Lease and will assist Mercata in coordinating Bentall's services and
obligations required to be provided and fulfilled by Bentall under the
Master Lease. Notwithstanding the foregoing, Attachmate shall have no
obligation to pursue available remedies provided for in the Master Lease in
the event Bentall defaults under the Master Lease or Bentall fails to
comply with or perform any of its services, duties, obligations or
covenants under the Master Lease. Mercata shall have all self-help rights
and other rights and remedies that Attachmate has under the Master Lease,
including rights and remedies in the event Bentall defaults under the
Master Lease or Bentall fails to comply with or perform any of its
services, duties, obligation or covenants under the Master Lease. Mercata's
obligations under this Sublease, including without limitation Mercata's
obligations to pay Rent, shall xxxxx to the same extent that Attachmate's
obligations under the Master Lease would xxxxx with respect to the
Subleased Premises.
12. MASTER LEASE IN EFFECT: Attachmate represents and warrants, to the best of
----------------------
its knowledge, that the Master Lease is in full force and effect, and that
neither Attachmate nor Bentall are in default thereunder. Attachmate shall
not do or permit anything to be done which would be a default under the
Master Lease after the expiration of any applicable cure periods or which
would cause the Master Lease to be terminated or forfeited, and Attachmate
shall indemnify, defend and hold Mercata harmless from and against any and
5
all claims, demands, losses, damages, and costs and expenses arising out of
or relating to Attachmate's default under the Master Lease.
13. SUBLEASING OR ASSIGNMENT: In the event Mercata desires to sublease or
------------------------
assign all or any portion of the Subleased Premises or this Sublease, it
shall be bound to the terms and conditions of Section 8 of the Master
Lease, except all notices shall be delivered and all approvals obtained
from both Bentall and Attachmate. The obligation of Bentall and Attachmate
to consent to such subletting or assignment shall be as outlined in the
Master Lease; provided that in no event shall Attachmate's consent be
unreasonably withheld, conditioned or delayed. Any sublease or assignment
by Mercata shall be subject to the terms and conditions of the Master
Lease, including, without limitation Section 8.4 and 8.5 of the Master
Lease. Attachmate and Mercata acknowledge that the terms and conditions of
Section 8.8 of the Master Lease shall not apply, as the Sublease Limit will
not be reached due to this Sublease. The consent to a sublease or
assignment from Attachmate shall not be construed as relieving Mercata or
any assignee of the Sublease or sublessee of the Subleased Premises from
obtaining the express written consent of Bentall and Attachmate to any
further assignment or subletting or obligation hereunder whether or not
then accrued.
Any modifications or improvements necessary as a result of such sublease or
assignment must be approved as required in Section 10 above and Mercata
agrees to restore the Subleased Premises to the condition required in
Section 9 at the end of the term of such sub-sublease or assignment.
14. INSURANCE AND INDEMNITY; WAIVER:
-------------------------------
14.1 Mercata shall obtain and keep in full force and effect the insurance
required by Attachmate under Section 13 of the Master Lease and shall name
Bentall and Attachmate as additional insureds. Within fifteen (15)
business days of execution of this Sublease, Mercata shall furnish to
Bentall and Attachmate a certificate or certificates of insurance
confirming that the required insurance is in full force and effect with
all premiums paid current. Mercata further agrees to indemnify and hold
harmless Attachmate and Bentall from all liability arising out of the
filing of any mechanic's or materialman's lien against the Subleased
Premises by reason of any act or omission of Mercata.
14.2 Attachmate and Mercata each waive their right to xxx and recover damages
against each other with respect to any liability arising under the Master
Lease or this Sublease and which is or is required to be covered by any
insurance policy maintained by any party, regardless of the cause of such
damage.
15. PERSONAL PROPERTY: Mercata agrees to assume full responsibility for its
-----------------
personal property located at the Subleased Premises, and to indemnify and
hold harmless Attachmate and Bentall against damage to Mercata's personal
property sustained by fire, theft or other casualty loss.
16. NOTICES: All notices required shall be given by registered or certified
-------
mail, postage prepaid, return receipt requested. Notice to Attachmate shall
be addressed to:
If by regular mail:
Attachmate Corporation
X.X. Xxx 00000
Xxxxxxxx, XX 00000-0000
Attn: Legal Department
6
If by express delivery:
Attachmate Corporation
0000-000xx Xxxxxx XX
Xxxxxxxx, XX 00000
Attn: Legal Department
Notice to Mercata shall be addressed to:
If before the Commencement Date:
Mercata, Inc.
000 - 000xx Xxxxxx XX
Xxxxxxxx, XX 00000-0000
Attn: General Counsel
If after the Commencement Date:
Mercata, Inc.
0000 - 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: General Counsel
with a copy to (until July 1, 2000):
Mercata, Inc.
000 - 000xx Xxxxxx XX
Xxxxxxxx, XX 00000-0000
Attn: General Counsel
All notices shall be deemed received two (2) days after mailing or upon
receipt if sent by nationally recognized overnight courier. Attachmate
shall forward to Mercata copies of all notices affecting the Subleased
Premises received from Bentall, under the Master Lease, promptly upon
receipt or dispatch.
17. HOLD OVER: Notwithstanding any provision of law or any judicial decision to
---------
the contrary, and unless Mercata has exercised its option to extend the
Term, no notice shall be required to terminate the Term on the date herein
specified as the end of the Term, and the Term shall expire on the date
herein mentioned without notice being required from either party. In the
event that Mercata remains beyond the expiration date of the Term or as
extended, without the prior written consent of Attachmate, it is the
intention of the parties and it is hereby agreed that a tenancy at
sufferance shall arise at a monthly rent equal to One Hundred Fifty Percent
(150%) of the Rent due under this Sublease.
18. MERCATA'S DEFAULT: The occurrence of any one or more of the following
-----------------
events shall constitute an event of default under this Sublease by Mercata:
a. The failure by Mercata to make any payment of Rent or any other payment
required to be made by it hereunder on the date due where such failure
shall continue for a period of five (5) days after receipt of written
notice of such failure from Attachmate.
7
b. The failure by Mercata to observe or perform any of the covenants,
conditions or provisions of this Sublease other than as described in the
immediately preceding paragraph and/or the failure by Mercata to observe or
perform any of the covenants, conditions or provisions of the Master Lease
to which Mercata has agreed to be bound pursuant to the terms of this
Sublease, where such failure shall continue for a period of fifteen (15)
days after written notice thereof from Attachmate to Mercata and such
additional time, if any, as is reasonably necessary to cure such default if
such default is of such a nature that it cannot reasonably be cured within
fifteen days, provided that Mercata diligently prosecutes such cure in good
faith and with due diligence and provided that such cure is completed
within sixty (60) days from the date of such notice from Attachmate.
c. The making by Mercata of any general arrangement or assignment for the
benefit of creditors; Mercata becomes a "debtor" as defined in 11 U.S.C.
101 or any successor statute thereto (unless, in the case of a petition
filed against Mercata, the same be dismissed within sixty (60) days); the
appointment of a trustee or receiver to take possession of all or
substantially all of Mercata's assets or of Mercata's interest in this
Sublease, where possession is not restored to Mercata within thirty (30)
days; or the attachment, execution or other judicial seizure of all or
substantially all of Mercata's assets or of Mercata's interest in this
Sublease, where such seizure is not discharged within thirty (30) days.
19. REMEDIES: In the event of any such default by Mercata, Attachmate may at
--------
any time thereafter, without limiting Attachmate in the exercise of any
right or remedy which Attachmate may have by reason of such default or
breach:
a. Upon the occurrence of an event of default, Attachmate at any time
thereafter may give written notice to Mercata specifying such event of
default and stating that either this Sublease shall expire or Mercata's
right to possession shall expire on the date specified in such notice but
not less than thirty (30) days after the date that Mercata receives said
notice and upon the date specified in such notice.
b. Upon the termination of this Sublease or Mercata's possession of the
Subleased Premises pursuant to paragraph a. of this Section, Mercata shall
peacefully surrender the Subleased Premises to Attachmate, and Attachmate,
upon or at any time after any such expiration, may without further notice
reenter the Subleased Premises and repossess it by summary proceedings,
ejectment, or otherwise, and may dispossess Mercata and remove Mercata and
all other persons and Mercata's property from the Subleased Premises and
may have, hold, and enjoy the Subleased Premises including the right to
receive all rental income therefrom.
c. At any time after any such termination, Attachmate may relet the
Subleased Premises or any part thereof, in the name of Attachmate or on
behalf of Mercata, for such term (which may be greater or less than the
period which would otherwise have constituted the balance of the term of
this Sublease) and on such conditions (which may include concessions or
free rent) as Attachmate, in its reasonable discretion, may determine, and
may collect and receive the rent therefore. Attachmate shall mitigate its
damage by making reasonable efforts to relet the Premises on reasonable
terms. Attachmate shall be entitled to all reasonable expenses incurred in
connection with such mitigation, including without limitation, all
repossession costs, brokerage commissions, legal expenses, reasonable
attorneys fees, and expenses of preparation for such reletting (but
excluding any tenant allowances or tenant improvement costs).
d. No such termination of this Sublease or Mercata's possession of the
Subleased Premises shall relieve Mercata of its liability and obligations
under this Sublease, and such liability and obligations shall survive any
such termination. In the event of any termination of this Sublease, if the
Subleased Premises has not been relet, Mercata shall pay to Attachmate the
present value of the Rent and any other amounts required to be paid by
Mercata until the end of what would have been the Term of this Sublease,
less the present value of the anticipated fair and reasonable rental value
of the Subleased Premises over the same period.
8
e. In the event of a termination of this Sublease after the Subleased
Premises has been relet or the termination of Mercata's possession of the
Subleased Premises, Mercata shall pay to Attachmate as damages for
Mercata's default:
(1) The amount of the Rent and any other amounts which would be payable
under this Sublease by Mercata if this Sublease were still in effect,
less
(2) The net proceeds of any reletting affected pursuant to paragraph c. of
this Section.
Mercata shall pay such current damages, herein called deficiency, to
Attachmate monthly on the days on which the Rent would have been payable
under this Sublease if this Sublease were still in effect, and Attachmate
shall be entitled to recover from Mercata each monthly deficient, as or at
any time after such deficiency shall arise. If the Subleased Premises or
any part thereof is relet by Attachmate for the unexpired Term, including
any extension thereof, or any part thereof, before presentation of proof of
such damages to any court, commission, or tribunal, the amount of rent
reserved upon such reletting shall be deemed prima facie to be the fair and
reasonable rental value for the part or the whole of the Subleased Premises
so relet during the term of the reletting. Nothing herein contained shall
limit or prejudice the right of Attachmate to prove for and obtain as
damages by reason of such termination an amount equal to the maximum
allowed by any statute or rule of law in effect at the time when, and
governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
f. Pursue any other remedy now or hereafter available to Attachmate under
the laws of the State of Washington or in equity. All remedies available to
Attachmate hereunder shall be cumulative and concurrent. No waiver or delay
in enforcement by Attachmate of any breach of Mercata's obligations
hereunder shall constitute a waiver of any such breach or any subsequent
breach.
20. INTEREST: In the event that any sums due and payable to Attachmate pursuant
--------
to the terms of this Sublease are not paid when due, such sums shall bear
interest at the rate specified in Section 3.3 of the Master Lease, but in
no event less than the prime rate as published by Bank of America, N.A.
plus two percent (2%), as published from time to time, from the due date
until actually paid, unless that rate is usurious as applied to Mercata in
which event the rate shall be reduced to the highest non-usurious rate.
Neither the accrual nor the payment of interest shall cure any default by
Mercata under this Sublease.
21. BROKERS: Mercata is represented by The Xxxxxxxxx Group, Inc. and Attachmate
-------
is represented by Colliers International in connection with the negotiation
of this Sublease. Attachmate is responsible for a commission to Colliers
International with whom it has a separate agreement.
22. COMPLIANCE WITH LAWS: This Sublease will be construed and enforced in
--------------------
accordance with the laws of the State of Washington.
23. AUTHORITY: If Mercata executes this Sublease as a corporation, then Mercata
---------
and the person executing this Sublease on behalf of Mercata represents and
warrants that the individuals executing this Sublease on Mercata's behalf
are duly authorized to execute and deliver this Sublease on its behalf in
accordance with a duly adopted resolution of the Board of Directors of
Mercata, a copy of which is to be delivered to Attachmate on execution
hereof, and in accordance with the Bylaws of Mercata and that this Sublease
is binding upon Mercata in accordance with its terms. If Attachmate
executes this Sublease as a corporation, then Attachmate and the person
executing this Sublease on behalf of Mercata represents and warrants that
the individuals executing this Sublease on Attachmate's behalf are duly
authorized to execute and deliver this Sublease on its behalf in accordance
with a duly adopted resolution of the Board of Directors of Attachmate.
9
24. FURTHER DOCUMENTS: Each party agrees to execute and deliver to the other
-----------------
all instruments which may reasonably be required to carry out all terms and
provisions of this Sublease.
25. RECOVERY OF COSTS AND FEES: If either party shall bring any civil action to
--------------------------
enforce any of its rights under this Sublease or for any relief against the
other party with regard to the matters contained in this Sublease or if
either party incurs any legal or professional fees whatsoever (including
but not limited to those of appraiser's accountant's or any payments to
collection agents) to enforce this Sublease whether or not such enforcement
efforts proceed to the filing of a lawsuit, then all reasonable costs and
expenses, including without limitation reasonable attorney's and
professional fees of the prevailing party shall be paid by the losing
party.
26. BINDING EFFECT: This Sublease shall be binding upon the successors and
--------------
permitted assigns of Mercata and Attachmate.
27. LEGAL RELATIONSHIP OF THE PARTIES: This Sublease shall not be interpreted
---------------------------------
or construed as establishing a partnership or joint venture between
Attachmate and Mercata, and neither party shall be liable for the debts or
obligations of the other, except as expressly agreed to herein.
28. INTEGRATED DOCUMENT: This instrument embodies all of the agreements between
-------------------
the parties with respect to the Subleased Premises, and no oral agreements,
prior correspondence or other prior writings shall be held to vary the
provisions hereof. Any subsequent changes or modifications shall become
effective only by a written instrument duly executed by Mercata and
Attachmate.
29. CONSENT REQUIRED: This Sublease is contingent upon, and shall have no force
----------------
or effect until receipt of consent by Bentall.
30. RIGHT OF FIRST OFFER: Mercata shall have an exclusive, ongoing Right of
--------------------
First Offer on all additional space Attachmate wishes to sublease on floor
five of the Building. In the event any such space becomes available,
Attachmate shall so notify Mercata in writing. Mercata shall notify
Attachmate in writing within thirty (30) days thereafter regarding whether
Mercata desires to sublease such space. If Mercata notifies Attachmate of
its desire to sublease such space, then such space shall be added to the
Subleased Premises as of the date that is thirty (30) days after
Attachmate's receipt of Mercata's notice that it is willing to sublease
such space. Any sublease of such space shall be on the same terms and
conditions contained in this Sublease, except that Base Rent for such space
shall be at the then prevailing market rent for comparable Bellevue area
office space but in no instance less than the rate Mercata is paying to
lease the Subleased Premises per this Sublease. The term for the additional
subleased space shall be coterminous with the Sublease Term. In the event
Mercata fails to respond to Attachmate's notice within the thirty (30) day
period, Mercata's right to exercise the Right of First Offer shall lapse
and be of no further force or effect.
31. PARKING: Mercata shall have the right to use four (4) parking stalls per
-------
thousand rentable square feet of the Subleased Premises (as the same may be
expanded as provided in Section 30 or otherwise) during the sublease Term
or any extensions free of charge in the Four Newport garage.
32. ROOF ACCESS: Mercata shall have access to roof rights for communications
-----------
equipment at no additional charge throughout the Term or any extensions
thereof. All installations and/or access rights shall be at Mercata's
expense and shall be governed by the terms of the Master Lease.
33. MERCATA SIGNAGE: Subject to Attachmate's approval, Mercata shall be
---------------
permitted to display a sign or plaque on the reception desk at the entry to
the Building. Interior signage installed by Mercata in the Subleased
Premises shall be at its own expense and such signage will be removed at
the end of the Term and any extension thereof at Mercata's expense and
subject to repair of damage caused by such removal.
10
34. QUIET ENJOYMENT: Attachmate covenants and agrees that so long as Mercata
---------------
performs all of the covenants on Mercata's part to be observed and
performed under this Sublease (including without limitation remedying any
potential default within the times permitted for cure in this Sublease),
Mercata shall and peaceably quietly have, hold and enjoy the Subleased
Premises.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease
Agreement as of the day and year first above written.
MERCATA, INC. ATTACHMATE CORPORATION
By: /s/ Xxx Xxx Xxxx By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------- ------------------------
Its: President & CEO Its: President
---------------------- -----------------------
11
Mercata Notary
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day of February 23, 2000, before me personally appeared Xxx Xxx Xxxx,
to me known to be the President and CEO of Mercata, Inc., the corporation that
executed the within and foregoing instrument, and acknowledged said instrument
to be the free and voluntary act and deed of said corporation, for the uses
and purposes therein mentioned, and on oath stated that he/she is authorized
to execute said instrument and that the seal affixed, if any, is the corporate
seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year first above written.
/s/ Xxxxx X. Xxxxxxx
-------------------------------------------------
Notary Public in and for the State of Washington,
residing at Fall City
[Notary Seal] My commission expires: 5-26-02
Xxxxx X. Xxxxxxx
-------------------------------------------
[Type or Print Notary Name]
Attachmate Notary
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day of February 25, 2000, before me personally appeared
Xxxxxxx X. Xxxxxxxx, to me known to be the President of
Attachmate Corporation, the corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation, for the uses and purposes therein mentioned, and
on oath stated that he/she is authorized to execute said instrument and that
the seal affixed, if any, is the corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year first above written.
/s/ Xxxxx X. Main
-------------------------------------------------
Notary Public in and for the State of Washington,
residing at Seattle
[Notary Seal] My commission expires: 12/14/01
Xxxxx X. Main
-------------------------------------------
[Type or Print Notary Name]
12
List of Exhibits:
Exhibit A - Master Lease
Exhibit B - Subleased Premises
Exhibit C - Notice
13
EXHIBIT A
---------
MASTER LEASE
------------
(See attached)
ATTACHMATE CORPORATION
FOUR NEWPORT
OFFICE BUILDING LEASE
TABLE OF CONTENTS
-----------------
1. PREMISES......................................................... 1
2. TERM............................................................. 8
3. BASIC RENT....................................................... 13
4. RENTAL ADJUSTMENT................................................ 14
5. SECURITY DEPOSIT................................................. 20
6. UTILITIES AND SERVICES........................................... 20
7. CARE AND USE OF THE PREMISES..................................... 23
7A. HAZARDOUS MATERIALS.............................................. 25
8. ASSIGNMENT AND SUBLETTING........................................ 26
9. INTENTIONALLY DELETED............................................ 28
10. DAMAGE OR DESTRUCTION............................................ 28
11. INDEMNIFICATION.................................................. 30
12. DAMAGE TO TENANT'S PROPERTY...................................... 31
13. INSURANCE........................................................ 31
14. WAIVER OF SUBROGATION............................................ 32
15. EMINENT DOMAIN................................................... 33
16. BANKRUPTCY....................................................... 34
17. DEFAULT RE-ENTRY: REMEDIES....................................... 34
18. INTENTIONALLY DELETED............................................ 37
19 SUBORDINATION QUIET ENJOYMENT.................................. 37
20. ESTOPPEL CERTIFICATES.......................................... 38
21. ATTORNEYS' FEES................................................ 39
22. INTENTIONALLY DELETED.......................................... 39
23. NOTICES........................................................ 39
24. HOLDING OVER................................................... 40
25. CONSTRUCTION OF BUILDING AND IMPROVEMENTS...................... 40
25A. ALTERATIONS AND ADDITIONS BY TENANT............................ 42
26. RENT TAX....................................................... 43
27. PRIOR AGREEMENT, AMENDMENTS.................................... 43
28. PERSONAL PROPERTY TAXES........................................ 43
29. SUCCESSORS..................................................... 43
30. RIGHT TO PERFORM............................................... 44
31. FORCE MAJEURE.................................................. 44
32. LIMITATION ON LIABILITY........................................ 44
33. INTENTIONALLY DELETED.......................................... 45
34. MISCELLANEOUS.................................................. 45
35. RIDERS......................................................... 49
36. LEASE AND AMENDMENTS........................................... 49
2
EXHIBIT "A" - FOUR NEWPORT LEGAL DESCRIPTION................................. 1
EXHIBIT "A-1" - FOUR NEWPORT OVERALL SITE PLAN............................... 2
EXHIBIT "A-2" - FOUR NEWPORT FIRST (1st) FLOOR PREMISES...................... 3
EXHIBIT "A-3" - FOUR NEWPORT SECOND (2nd) FLOOR PREMISES..................... 4
EXHIBIT "X-0" - XXXX XXXXXXX XXXXX (0xx) XXXXX PREMISES...................... 5
EXHIBIT "A-5" - FOUR NEWPORT FOURTH (4th) FLOOR PREMISES..................... 6
EXHIBIT "A-6" - FOUR NEWPORT FIFTH (5th) FLOOR PREMISES...................... 7
EXHIBIT "A-7" - FOUR NEWPORT SIXTH (6th) FLOOR PREMISES...................... 8
EXHIBIT "A-8" - ONE NEWPORT LEGAL DESCRIPTION................................ 9
EXHIBIT "A-9" - ONE NEWPORT FIRST (1st) FLOOR PREMISES....................... 10
EXHIBIT "A-10" - ONE NEWPORT SECOND (2nd) FLOOR PREMISES..................... 11
EXHIBIT "X-00" - XXX XXXXXXX XXXXX (0xx) XXXXX PREMISES...................... 12
EXHIBIT "A-12" - ONE NEWPORT FOURTH (4th) FLOOR PREMISES..................... 13
EXHIBIT "A-13" - NEWPORT TOWER SECOND (2nd) FLOOR PREMISES................... 14
EXHIBIT "B" - BUILDING AREA.................................................. 15
EXHIBIT "C" - CONSTRUCTION AGREEMENT FOR LEASE...................... 1 (of "C")
EXHIBIT "C-1" - WORK SCHEDULE..................................... 20 (of "C-1")
EXHIBIT "C-2" - IDENTIFICATION OF BUILDING AND PARKING GARAGE SHELL
CONSTRUCTION DOCUMENTS...................................................... 18
EXHIBIT "C-3" - DESCRIPTION OF BUILDING AND PARKING GARAGE SHELL............ 21
EXHIBIT "C-4" - IDENTIFICATION OF LINK SCHEMATIC PLANS....................... 26
3
EXHIBIT "C-5" - BUILDING STANDARD TENANT IMPROVEMENT'S OUTLINE
SPECIFICATIONS......................................................... 27
EXHIBIT "D" - LEASE SUMMARY AND CONFIRMATION OF DATES................... 28
EXHIBIT "E" - BUILDING RULES AND REGULATIONS............................ 29
EXHIBIT "F" - BENTALL CONSTRUCTION RULES AND REGULATIONS................ 32
EXHIBIT "G" - ROOFTOP AGREEMENT......................................... 00
XXXXXXX "X-0" - XXXXXXXX AND EQUIPMENT PLAN............................. 38
EXHIBIT "G-2" - SCHEDULE OF ANTENNAE AND EQUIPMENT...................... 39
EXHIBIT "G-3" - BENTALL CONSTRUCTION RULES AND REGULATIONS.............. 40
EXHIBIT "H" - MEMORANDUM OF LEASE....................................... 41
EXHIBIT "H-1" - FOUR NEWPORT LEGAL DESCRIPTION.......................... 43
EXHIBIT "H-2" - ONE NEWPORT LEGAL DESCRIPTION........................... 44
EXHIBIT "I" - GENERAL SPECIFICATIONS FOR JANITORIAL SERVICES FOR THE
BUILDING............................................................... 45
EXHIBIT "J" - ONE NEWPORT BUILDING PROPERTY MANAGEMENT PLAN............. 53
EXHIBIT "K" - TENANT RULES AND REGULATIONS................................1
4
ATTACHMATE CORPORATION
FOUR NEWPORT
OFFICE BUILDING LEASE
THIS LEASE, dated as of April 29, 1998, is made and entered into by and
between Bentall Newport Centre L.L.C., a Washington limited liability company
("Landlord"), and Attachmate Corporation, a Washington corporation ("Tenant").
WITNESSETH, THAT:
1. PREMISES
1.1 Land, Building & Link. Landlord shall erect, pursuant to the Building
---------------------
Shell Construction Documents and Description of Building and Parking Garage
Shell attached as Exhibit "C-2" and "C-3" hereto, on the real property described
in Exhibit "A" located in King County, Washington (the "Real Property"), a six
(6) story office building as further specified in this Lease and Exhibits
attached hereto, collectively known as the Four Newport Building (the
"Building"), together with an enclosed walkway between the Building and the
adjoining Newport Terrace Building (the "Link") as further specified in this
Lease and Exhibits attached hereto. Landlord's obligation to construct the
Building, Tenant Improvements (as defined in Exhibit "C"), and Link is set forth
in Section 25 herein. Landlord shall obtain all permits required by local,
state or federal law relating to the construction of the Building Shell (as
defined in Exhibit "C") and will otherwise comply with any and all laws related
to the construction thereof. Tenant's sole and exclusive remedy for Landlord's
failure to obtain all permits relating to the construction of the Building shell
and core in accordance with the preceding sentence shall be to terminate this
Lease in accordance with the provisions of Section 2.1(d)(iii) below. Landlord
shall also use its good faith reasonable best efforts to obtain all permits
required by local, state or federal law relating to the construction of the Link
and will otherwise comply with any and all laws related to the construction
thereof, provided, however, Landlord shall have no liability to Tenant for a
delay in the completion of the Link if Landlord is unable, despite Landlord's
good faith efforts, to obtain all permits and governmental approvals necessary
for the construction of the Link.
1.2 Premises. Landlord, subject to the terms and conditions hereof, hereby
--------
leases to Tenant and Tenant hereby leases from Landlord the entire first (1st),
second (2nd), third (3rd) and fourth (4th) floors of the Building, which
includes approximately 100,328 square feet of Rentable Area, and 87,682 square
feet of Useable Area, together with access thereto (including without limitation
the Link) and parking as provided in Section 34.6 of this Lease (collectively
the "Premises"). The floor plates for the first (1st), second (2nd), third (3rd)
and fourth (4th) floors of the Building are shown on Exhibits "A-2" through
"A-5." Tenant may use the Premises for general office purposes, computer
operations, research and development laboratories, athletic facilities for
Tenant's employees, food services for Tenant's employees, warehouse, product
assembly, distribution center, storage, shipping and receiving and for no other
use without Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed.
1
1.3 Agreed Floor Areas. The agreed Building Rentable Area of the Building is
------------------
approximately 153,181 square feet. The Premises contains approximately 100,328
square feet of Rentable Area and 87,682 square feet of Useable Area, subject to
final measurement and space planning in accordance with and based on the
definitions of those phrases in the Standard Method for Measuring Floor Area in
Office Buildings (An American National Standard ANSI/BOMA Z65.1-1996 (Revised
and readopted June 7, 1996) published by Building Owners and Managers
Association International ("BOMA Standard"), as set forth on Exhibit "B" (which
may be amended based on final measurements). All final square footages shall be
determined by Landlord's architect (the "Architect") and verified by Tenant's
architect. Verification shall be per BOMA Standard for a multi-tenant
building unless Tenant leases the entire Building, in which case verification
shall be based on a single-tenant building. Any dispute regarding the
determination of the final square footages shall be resolved in accordance with
Section 17.7 below. Initial square footage calculations have been completed
prior to Lease execution, and shall be redone prior to the Commencement Date (as
defined in Section 2.1 below). Notwithstanding the foregoing or the BOMA
Standard, the parties agree that the square footage of the Link shall not be
used in calculations to determine the Useable Area or Rentable Area of the
Premises, and no Rent (as defined in Section 3.2 below) shall be payable during
the Term (as defined in Section 2 below) for the Link except as expressly set
forth in subsection 3.1A below.
1.4 Acceptance of Property and Premises. Neither Landlord nor its agents
-----------------------------------
have made any representations with respect to the Building, the Real Property,
or the Premises, except as expressly set forth herein and no rights, easements,
or licenses are acquired by the Tenant by implication or otherwise except as
expressly set forth in this Lease, together with its Exhibits. Landlord shall
deliver the Premises on the date of Substantial Completion of the Building and
Tenant Improvements, as defined more fully below.
(a) "Substantial Completion" or "Substantially Complete" means that the
Building Shell, parking, common areas, and Tenant Improvements (as defined in
Exhibit "C") in the Premises shall have been completed in accordance with the
Building Shell Construction Documents and the Tenant Improvement Construction
Documents (as those terms are defined in Exhibit "C"), but specifically
excluding the Link (which shall be completed in accordance with Section 25.6
below), which Substantial Completion shall be conclusively deemed to have
occurred upon issuance by the City of Bellevue of a temporary certificate of
occupancy for the Building and Premises (such temporary certificate of occupancy
to be obtained by Landlord) and issuance by the Architect of a Certificate of
Substantial Completion for the Tenant Improvements, which Certificate of
Substantial Completion shall be in the form of AIA Document G704. The existence
of punchlist items or additional work required for issuance of a final
certificate of occupancy by the City of Bellevue shall not be matters which will
delay Substantial Completion from having occurred; provided that Landlord shall
use diligent efforts to obtain Final Completion (as defined below) within sixty
(60) days thereafter or as soon as reasonably practical if any such punchlist
item or work required for issuance of a final certificate of occupancy cannot be
completed within such sixty (60) day period. If Landlord fails to obtain Final
Completion within sixty (60) days after Substantial Completion or as soon as
reasonably practical if any punchlist item or work required for issuance of a
final certificate of occupancy cannot be completed within sixty (60) days,
Tenant shall have the right, after five (5) days written notice to Landlord, to
complete the work necessary for Final Completion and Landlord shall reimburse
Tenant for the reasonable cost of completing such work within ten (10) days of
2
Landlord's receipt of invoices for such work. Notwithstanding the above to the
contrary, if, after the execution of this Lease, Tenant's design decisions,
revisions, or additional work of Tenant or its agents or architect delays
Substantial Completion, then to the extent such delay is determined to be caused
by or attributable to Tenant or its agents or architect, the date of Substantial
Completion shall be deemed to have occurred on the date Substantial Completion
would otherwise be established absent such delay.
(b) "Final Completion" with reference to the Building Shell, parking and
common areas, and Tenant Improvements in the Premises means such items are
Substantially Complete, all punchlist items have been complete, and a final
certificate of occupancy for the Building Shell, parking, common areas and
Tenant Improvements in the Premises has been issued.
(c) Landlord warrants to Tenant that the materials and equipment used and
installed in the Building Shell, Tenant Improvements and the Link, are new, of a
first class quality, are in conformance with the documents attached hereto as
Exhibit "C" and that all work shall be in compliance with all applicable codes.
Landlord shall proceed diligently with all aspects of the construction and any
repairs due to initial construction defects and latent defects, upon Landlord's
knowledge thereof. Landlord agrees it will enforce its contractual agreements
with Landlord's architect and general contractor. For a period of one (1) year
from the date of Substantial Completion of each of the Building Shell, Tenant
Improvements, and Link (if constructed), Landlord shall remedy, repair or
replace, in the manner specified by Tenant all defects, deficiencies in
workmanship and materials in the Building Shell, Tenant Improvements, and Link.
1.5 Common Areas.
------------
(a) Building Common Areas. Tenant shall have the nonexclusive right to
---------------------
use in common with other tenants in the Building the following areas ("Building
Common Areas") appurtenant to the Premises: The Building's common entrances,
lobbies, trash areas, restrooms, elevators, stairways and access ways, loading
docks, shipping and receiving areas, ramps, drives and platforms and any
passageways and service ways thereto, and the common pipes, conduits, wires and
appurtenant equipment serving the Premises (provided however, that
notwithstanding the foregoing, the Link is not a common area and is reserved for
the exclusive use of the Tenant). Landlord agrees to install at no cost to
Tenant two conduits (with pull-strings) leading from the Newport Terrace
Building to the Building and agrees to use its reasonable best efforts to
dedicate one conduit within the Newport Corporate Center (as hereafter defined)
for Tenant's exclusive use provided that such dedication can be accomplished at
no additional cost and provided that Tenant shall remove all cabling within such
conduits at the expiration or termination of this Lease if requested by Landlord
by cutting and pulling the cabling out of the conduit(s). If Landlord is unable
to dedicate a conduit for Tenant's exclusive use, Landlord shall use its
reasonable best efforts to minimize any interruptions within the conduits from
use by other tenants.
(b) Newport Corporate Center Common Areas. Tenant shall also have the
-------------------------------------
nonexclusive right to use in common with other tenants of the Newport Corporate
Center (as defined below) the following areas ("Newport Corporate Center Common
Areas"): Common facilities made available for or for the benefit of all tenants
within the Newport Corporate Center
3
including, without limitation, landscaping, roadways, pedestrian walkways, and
parking areas, but specifically excluding the use of any future fitness center.
The term "Newport Corporate Center" shall mean the properties and buildings
located thereon commonly known as One Newport, Two Newport, Newport Tower,
Newport Heights, Newport Terrace and Four Newport (the names of which Landlord
may change from time to time subject to Section 34.14), together with such other
additional properties and/or buildings which Landlord may add in the future.
(c) Definition of Common Areas. The term "Common Areas" as used in this
--------------------------
Lease shall include the Building Common Areas and the Newport Corporate Center
Common Areas.
(d) Landlord reserves the right from time to time, upon reasonable prior
notice to Tenant and without either expense to Tenant or unreasonable or
prolonged interference with Tenant's use:
(i) To install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the Building above the ceiling surfaces, below the floor surfaces, within the
walls and in the central core areas of the Premises, and to relocate any pipes,
ducts, conduits, wires and appurtenant meters and equipment included in the
Premises for the benefit of the Premises or other parts of the Building;
(ii) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, (as long as the parking ratio of four (4) parking spaces per 1000 square
feet of Useable Area, as stated in Section 34.6 is maintained) parking areas (as
long as not substantially different from the plans approved by Tenant for such
parking areas), loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas and walkways;
(iii) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available and the
maintenance promptly started and diligently pursued to completion;
(iv) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Building, or any portion thereof;
(v) To establish, reasonably modify or change rules governing the move-
in and move-out procedures of Tenant's furniture, equipment, and fixtures, so
long as not adversely discriminatory against Tenant compared to other tenants of
the Building and effective only after Tenant has received a copy of such rules;
(vi) To designate other land located within Newport Corporate Center to
be part of the Newport Corporate Center Common Areas for the use of all tenants
of Newport Corporate Center associated with a building yet to be built now known
as Five Newport;
(vii) To add additional improvements to the Common Areas which, with
respect to the Building Common Areas shall be for the general benefit of all
tenants of the
4
Building and, with respect to the Newport Corporate Center Common Areas shall be
for the general benefit of the Newport Corporate Center.
Nothing contained in this Section 1.5(d) shall (1) limit Landlord's right
to charge or Tenant's obligation to pay "Operating Costs" as that term is
defined in Section 4.3 below, or (2) expand on Landlord's right to charge or
Tenant's obligation to pay capital costs as set forth in Section 4.3 below. In
addition, notwithstanding the provisions of this Section to the contrary, Tenant
shall have the right to approve alterations to the Common Areas which materially
affect the Building (other than alterations required by governmental
authorities) during such time(s) as Tenant occupies the entire Building.
(e) If Landlord makes any changes, alterations or additions to the
Premises, the Common Areas, or to the Newport Corporate Center common areas
(including, without limitation, the construction of new buildings), such
changes, alterations or additions shall not interfere with the public
accessibility to the Premises, including without limitation Tenant's parking,
and shall not interfere with Tenant's utility services, including without
limitation all electricity, gas, water, sewer, and telecommunications services
to the Premises. If such interference should occur for any reason, Landlord
shall make immediate efforts to restore such accessibility or services in
coordination and cooperation with Tenant. Further, if such interference should
occur due to the acts or omissions of Landlord or its agents, then following
notice to Landlord and two (2) business days' opportunity to cure the
interference, Rent due under this Lease shall xxxxx to the extent of the
interference from the date of the interference until such interference is cured
and Tenant shall be entitled to recover its damages arising from such
interference (excluding consequential damages such as lost profits).
(f) Since Tenant is also an existing tenant of the existing building
("Newport Terrace") to the north of the Building as well as other buildings in
the Newport Corporate Center, the parties anticipate the need for Landlord to
take reasonable steps to minimize any interference with the operation of
Tenant's business at Newport Corporate Center and Tenant's quiet enjoyment
during the period in which the balance of Newport Corporate Center is
constructed (including the construction of the Building as well as any future
buildings). Therefore, Landlord shall give Tenant advance notice on a regular
basis of construction activities at Newport Corporate Center, and particularly
of any activity at Newport Corporate Center that may result in interference with
Tenant's operations at the buildings occupied by Tenant. Examples of these
activities might include excavation around existing utilities, grading and
construction of roads, and access ways, and work on drainage systems. To the
extent reasonably possible, Landlord shall accommodate Tenant's wishes
concerning any planned interruptions of access or utilities at the buildings
occupied by Tenant. Any such planned interruptions shall be done in consultation
and coordination with Tenant. Any accidental interference by Landlord with
Tenant's use of space at Newport Corporate Center, whether interference with
access, utilities or otherwise, shall be promptly remedied by Landlord. If
interference with Tenant's use of the Premises should occur due to the acts or
omissions of Landlord or its agents, then following notice to Landlord and two
(2) business days' opportunity to cure the interference, Rent due under this
Lease shall xxxxx to the extent of the interference from the date of the
interference until such interference is cured and Tenant shall be entitled to
recover its damages arising from such interference (excluding consequential
damages such as lost profits). The same provision as is set forth in the
5
preceding sentence shall be included in each of the Amendments (as defined in
Section 36 below) to cover the space leased by Tenant in the other buildings in
Newport Corporate Center.
(g) In the event of any interference with Tenant's use of the Premises
which is not due to the acts or omissions of Landlord or its agents nor due to
the acts or omissions of Tenant or its agents and such interference is not
remedied within one hundred twenty (120) days from the date of interruption,
Rent due under this Lease shall xxxxx to the extent of the interference from the
date of the interference until such interference is cured.
1.6 Exclusive Expansion Right. Landlord hereby grants Tenant an exclusive
-------------------------
expansion right to lease the entire fifth (5th) floor, or the entire sixth (6th)
floor, or the entirety of both the fifth (5th) and sixth (6th) floors of the
Building (the "Four Newport Expansion Space") on the terms set forth in this
Section 1.6. The Four Newport Expansion Space encompasses approximately 52,853
square feet of rentable area and 46,056 square feet of useable area, as
delineated on Xxxxxxxx "X-0" -"X-0", subject to final measurement and space
planning according to the BOMA Standard. This exclusive expansion right is
subject to the following terms and conditions:
(a) Exercise. Tenant exercises this exclusive expansion right by giving
--------
Landlord written notice of exercise (the "Exercise Notice") on or before 6:00
p.m. Seattle, Washington time on the date which is the later to occur of
November 12, 1998, or twelve (12) months prior to the date of Substantial
Completion (based on the estimated date of Substantial Completion as set forth
in the Construction Agreement (as defined below in Section 2.1(b)) and as such
estimated date may change from time to time based on the most recent schedule
prepared by the General Contractor). The Exercise Notice shall state the amount
of the Four Newport Expansion Space it wishes to add to the Premises under this
Lease, which must be the entire fifth (5th) floor, or the entire sixth (6th)
floor, or the entirety of both floors. Notice is not effective if Tenant is in
default under this Lease at the time of the exercise. If, within ninety (90)
days following Tenant's delivery of the Exercise Notice, the Scheduled
Substantial Completion Date (as defined in the Construction Agreement) in effect
on the date of the delivery of Tenant's Exercise Notice is changed to a date
more than ninety (90) days later than such Scheduled Substantial Completion
Date, then Tenant shall have three (3) business days from Tenant's receipt of
notice of such change to rescind the Exercise Notice by giving written notice of
rescission to Landlord. Landlord agrees to notify Tenant of any changes in the
Scheduled Substantial Completion Date when Landlord becomes aware of such
changes.
(b) Addition to Premises. If Tenant exercises this exclusive expansion
--------------------
right in accordance with Subsection 1.6(a) above, then the portion of the Four
Newport Expansion Space described in the Exercise Notice shall be added to the
definition of Premises so that it is constructed in accordance with this Lease
and leased to and rent is payable by Tenant beginning on Substantial Completion
of the Tenant Improvements for the applicable portion of the Four Newport
Expansion Space, including Rent (defined in Section 3 below) and otherwise
leased on the same terms and conditions as contained in this Lease. An amendment
to this Lease shall be prepared by Landlord and signed by the parties adding
that portion of the Four Newport Expansion Space stated in the Exercise Notice
to the Premises under this Lease, including Exhibits similar to those attached
as Exhibit "A-6" and "A-7" describing such space.
6
(c) Termination. This exclusive expansion right automatically terminates
-----------
at 6:01 p.m. on the date which is the later to occur of November 12, 1998, or
twelve (12) months prior to the date of Substantial Completion (based on the
estimated date of Substantial Completion as set forth in the Construction
Agreement and as such estimated date may change from time to time based on the
most recent schedule prepared by the General Contractor), and Landlord shall
thereafter be free to lease the Four Newport Expansion Space to any third party
that is not a Direct Competitor (as defined in Section 1.8 below).
(d) Limitation. This exclusive expansion right is not assignable
----------
separate and apart from this Lease, and may only be exercised by Tenant or its
assignee as permitted under Section 8 of this Lease.
1.7 Right of First Opportunity. Landlord hereby grants Tenant a "Right of
--------------------------
First Opportunity" to lease any space which becomes available in the One Newport
Building (the "Opportunity Space"), which space is legally described in Exhibit
"A-8" attached hereto, and delineated on Exhibits "A-9" through "A-12" attached
hereto. This Right of First Opportunity is subject to the following terms and
conditions:
(a) Availability of Opportunity Space. Opportunity Space shall be deemed
---------------------------------
available for purposes of triggering Landlord's Notice (as defined below) when
one hundred fifty (150) or fewer days remain in the term of any lease of any
such Opportunity Space (subject, however, to any existing leases, rights of
extension or other option rights of leases existing on the date hereof). If,
however, the tenant who has possession of and/or rights to the affected
Opportunity Space does not vacate the Opportunity Space at the end of the lease
term and if Tenant elects to lease that Opportunity Space, then Landlord shall
promptly undertake eviction proceedings to make the space available and pursue
them to completion at its cost, but shall have no liability to Tenant for delay
in delivering possession of such space. Within three (3) days of Tenant's
request, Landlord shall provide Tenant with a list of all anticipated dates and
square footages of Opportunity Space which may become available.
(b) Landlord's Notice. Landlord shall give Tenant written notice
-----------------
("Landlord's Notice") at such time as any portion of the Opportunity Space
becomes available. Tenant shall have ten (10) working days from receipt of
Landlord's Notice to elect to take the Opportunity Space described in Landlord's
Notice. Tenant must make this election by written notice to Landlord within this
ten (10) working day period. Tenant's election to lease the Opportunity Space
offered is not effective if Tenant is in default under this Lease at the time of
Tenant's election or on the first day of the lease of such space. If Tenant
fails to exercise its Right of First Opportunity following receipt of a
Landlord's Notice within the ten (10) working day period, then Landlord is free
to lease that portion of the Opportunity Space described in Landlord's Notice to
any third party on any terms within six (6) months following the expiration of
such ten (10) working day period. If Landlord does not lease that portion of the
Opportunity Space described in Landlord's Notice within such six (6) month
period, Tenant's Right of First Opportunity with respect the space described in
Landlord's Notice shall continue with respect to that space. If Tenant exercises
its Right of First Opportunity with respect to any Opportunity Space, Tenant
shall not have any future right of first opportunity on that particular
Opportunity Space.
7
(c) Terms of Opportunity Space Lease. If Tenant elects to lease
--------------------------------
Opportunity Space described in any Landlord's Notice, Tenant's lease of the
applicable Opportunity Space shall commence on the date Tenant takes occupancy
of such space (so long as Tenant does not delay its occupancy for reasons within
its control for more than sixty (60) days following the date such space becomes
vacant, in which case the lease of such space shall commence on the sixtieth
(60th) day following such date). The lease of such Opportunity Space shall
be for a minimum lease term of three (3) years and shall otherwise be based on
fair market terms and conditions at the time the First Right of Opportunity is
exercised, including Basic Rent (described in Section 3 below), storage rent,
parking charges, and on such other terms and concessions as the parties may in
good faith negotiate, using this Lease as a starting point; provided, however,
if Landlord and Tenant are unable to agree on such fair market terms within
thirty (30) days following Landlord's receipt of Tenant's notice of Tenant's
election to lease the applicable Opportunity Space, then the "fair market terms"
shall be determined in accordance with the appraisal procedure described in
Section 2.2(a) below provided, however, the determination of "fair market terms"
shall not be limited to a determination of Basic Rent but shall include a
determination of all essential business terms including, without limitation,
Basic Rent, lease term, renewal options, allowances, storage space rent, parking
charges, and any other Landlord concessions. If the fair market terms are
determined through the procedure described in Section 2.2(a), Landlord and
Tenant agree that the provisions of this Lease other than the business terms
shall be used for the lease of the applicable Opportunity Space. Landlord shall
not be required to pay any brokerage commissions with respect to leases of the
Opportunity Space as provided in this Section.
(d) Termination. This Right of First Opportunity automatically terminates
-----------
on the date which is twelve (12) months prior to the expiration of the Term of
this Lease (including any Extended Terms as described in Section 2.2 below).
(e) Limitation. This exclusive expansion right is not assignable
----------
separate and apart from this Lease, and may only be exercised by Tenant or its
assignee as permitted under Section 8 of this Lease.
1.8 Leases With Direct Competitors and Software Companies. For the purposes
-----------------------------------------------------
of this Lease, the term "Direct Competitor" shall mean Wall Data and Walker,
Ritcher, Xxxxx, and their successors. For so long as Tenant leases and occupies
the Premises pursuant to the provisions of this Lease, Landlord agrees not to
enter into any lease(s) for space in Newport Corporate Center with a Direct
Competitor. This prohibition shall not apply to assignments or subleases of
existing leases. In addition, commencing with the date Tenant exercises its
Expansion Right pursuant to Section 1.6 above with respect to the fifth (5th)
floor of the Building, and continuing for so long as Tenant leases and occupies
floors one (1) through five (5) of the Building pursuant to the terms of this
Lease, Landlord shall not, without Tenant's prior written consent, enter into a
lease with a software company for space in the Building.
2. TERM
2.1 Initial Term. The term of this Lease shall be for a period of six and
------------
one-half (6.5) years, as extended as provided in Subsection 2.1(a) below if the
Commencement Date falls on a date other than the first of the month ("Initial
Term"). The Initial Term as well as the Tenant's obligation to pay Rent shall
commence on the date (but not prior to September 30, 1999, and
8
subject to the provisions of Subsection 2.1(e) below) of Substantial Completion
of Floors 1 through 4 of the Building (the "Commencement Date"); except that if,
after the execution of this Lease, Tenant's design decisions, revisions, or
additional work of Tenant or it's agents or architect delays Substantial
Completion, then to the extent such delay is determined to be caused by or
attributable to Tenant or its agents or architect, the Commencement Date which
would otherwise be established shall be accelerated to a new date by the number
of days of said delay. See Exhibit "C" attached hereto for further provisions
regarding Substantial Completion delay procedures.
(a) The terms and provisions of this Lease are effective as of the date of
this Lease. If the Commencement Date does not occur on the first day of the
month, then the Term shall be extended by the number of days remaining in that
fractional first month such that the Termination Date is the last day of a
month. In that event, however, the fractional month shall be added to the end of
the Initial Term for the purposes of determining Basic Rent under Section 3.1
below and Tenant shall pay Rent for the fractional first month on a per diem
basis (calculated on the basis of a thirty-day month) until the first day of the
month following the Commencement Date. Thereafter the Basic Rent, as well as the
Tenant's share of Operating Costs (defined herein) shall be paid in advance in
equal monthly installments on the first day of each and every month. Upon the
Commencement Date, the parties shall execute a written acknowledgment of this
Lease setting forth the precise Commencement Date and expiration date (the
"Expiration Date") of this Lease. Said acknowledgment shall be in the form
attached hereto as Exhibit "D". Failure to execute such acknowledgment, however,
shall not affect Landlord's or Tenant's liability hereunder.
(b) Early Possession. If Landlord offers and Tenant chooses to occupy
----------------
the Premises and performs its regular business operations therein prior to the
Commencement Date set forth in Section 2.1, then the Commencement Date shall be
such date of such occupancy. Tenant's occupancy prior to the originally
scheduled Commencement Date shall be subject to all the provisions of this Lease
and shall not advance the Expiration Date. Tenant shall have the right of access
to the Premises prior to the Commencement Date as provided in Section 3.3.2 of
the Construction Agreement for Lease attached hereto as Exhibit "C" (the
"Construction Agreement").
(c) Landlord Delay. If for any reason, other than a Tenant delay or a
--------------
delay for any of the reasons stated in Section 31, Landlord cannot deliver
possession of the Premises to Tenant on or before October 15, 1999 (the
"Scheduled Substantial Completion Date"), then subject to the provisions of the
Construction Agreement relating to such delay, the following shall occur: (i)
the Commencement Date shall be the date of Substantial Completion, (ii) the
liquidated damages set forth in the Construction Agreement shall apply, (iii)
the Expiration Date shall be adjusted so that the length of the Term remains as
provided in Section 2.1 and (iv) Landlord and Tenant shall execute an amendment
to this Lease setting forth the adjusted Commencement Date and Expiration Date.
(d) Liquidated Damages and Termination Rights. Anything in this Lease
-----------------------------------------
to the contrary notwithstanding, the parties agree that the actual damages that
Tenant would suffer as a consequence of delays in Substantial Completion beyond
the Scheduled Substantial Completion Date are too difficult to quantify, and
that in the event of such a delay, not due to a
9
Tenant delay and not due to a delay for any of the reasons described in Section
31 below ("Force Majeure"), the following liquidated damages and remedial
actions are agreed by the parties:
(i) Liquidated Damages. The liquidated damages provisions of Section
------------------
7.4 of the Construction Agreement shall apply.
(ii) No Rent. Until Substantial Completion occurs, no Rent is due
-------
under this Lease.
(iii) Tenant's Right to Terminate. If Substantial Completion does not
---------------------------
occur on or by April 1, 2000, then Tenant may terminate this Lease and the
Amended and Restated Newport Terrace Lease (as defined in Section 36 below) by
notice to Landlord, which notice must be given on or before April 10, 2000, and
shall be effective April 30, 2000. If Tenant does not elect to terminate this
Lease and the Amended and Restated Newport Terrace Lease by giving notice
thereof by April 10, 2000, this Lease and the Amended and Restated Newport
Terrace Lease shall continue in full force and effect. If Tenant elects to
terminate, the provisions of subsection 2.1(d)(v) below shall be effective.
(iv) Landlord's Right to Terminate. If Substantial Completion does not
-----------------------------
occur on or by July 1, 2000, due to delays beyond Landlord's control, then
Landlord may terminate this Lease and the Amended and Restated Newport Terrace
Lease by notice to Tenant, which notice must be given on or before July 10,
2000, and shall be effective July 30, 2000. If Landlord does not elect to
terminate this Lease and the Amended and Restated Newport Terrace Lease by
giving notice thereof by July 10, 2000, this Lease and the Amended and Restated
Newport Terrace Lease shall continue in full force and effect. If Landlord
elects to terminate, the provisions of subsection 2.1(d)(v) below shall be
effective.
(v) Effect of Termination. If either Tenant terminates this Lease under
---------------------
subsection 2.1(d)(iii) above or Landlord terminates this Lease under subsection
2.1(d)(iv) above, then:
(1) All of the terms and conditions of the Newport Terrace Lease,
Newport Tower Lease, One Newport Lease and Two Newport Lease (as those terms are
defined in Section 36 below) shall remain in full force and effect as they
existed prior to this Lease and the Amendments (as defined in Section 36),
including the Amended and Restated Newport Terrace Lease, shall be null and
void;
(2) Tenant shall have the option to renew the Newport Tower Lease, One
Newport Lease and Two Newport Lease for a minimum of five (5) years at the end
of the existing terms in accordance with the terms and provisions of the
Amendments; and
(3) Tenant shall reimburse Landlord for the full Newport Terrace
Allowance (as defined in the Amended and Restated Newport Terrace Lease) or, in
the alternative, shall exercise its option to renew the Newport Terrace Lease
for five (5) years in accordance with the terms and provisions of the Newport
Terrace Lease provided, however, if Tenant renews the Newport Terrace Lease,
Landlord shall not be obligated to provide any allowance other than the Newport
Terrace Allowance.
10
(e) Interim Space. Landlord agrees to lease to Tenant approximately
-------------
17,000 rentable square feet of space in Newport Tower in the location identified
on Exhibit "A-13" attached hereto (the "Interim Space") at the rate of $16.50
per square foot, triple net, commencing on or about April 1, 1999, and
continuing until the first to occur of Substantial Completion or the termination
of this Lease. Except with respect to the business terms, the lease agreement
for the Interim Space shall be based on the format and legal provisions of this
Lease. Landlord and Tenant shall use their reasonable best efforts to prepare a
mutually acceptable short term lease agreement within sixty (60) days after the
date of this Lease.
(f) Delay in Occupancy. Notwithstanding the above provisions of this
------------------
Section 2.1 to the contrary, if Substantial Completion occurs between November
1, 1999 and December 31, 1999, Tenant may, by written notice to Landlord within
five (5) days of Substantial Completion, elect not to take occupancy of the
Premises until February 10, 2000, in which case the Commencement Date shall be
January 10, 2000; provided, however, if Substantial Completion occurs between
November 1, 1999 and December 31, 1999, Tenant may, by notice to Landlord at any
time between the date of Substantial Completion and January 10, 2000, elect to
occupy any portion of the Premises, in which case Tenant shall pay Rent on all
space which Tenant elects to occupy (as well as Rent on other space occupied by
Tenant in other buildings) and Basic Rent shall be paid at the per square foot
rate specified for Years 1 - 2 of the Lease Term in Section 3.1 below .
2.2 Option to Extend. Landlord hereby grants to Tenant the right, privilege,
-----------------
and option to extend the Term of this Lease for three (3) periods of five (5)
years ("First, Second and Third Extended Terms" respectively), from the date of
expiration of the Initial Term, upon the same terms and conditions as herein
contained, except Basic Rent. Basic Rent shall be determined in the method set
forth below for each Extended Term. Tenant shall give written notice to
Landlord at least three hundred sixty (360) days prior to the expiration of the
then expiring Term of Tenant's intention to exercise said option. In the event
that Tenant fails to give notice by the specified deadline of its intention to
exercise said option, then Tenant's right to extend this Lease for the remaining
available Extended Terms shall terminate and be of no further force and effect.
(a) If Tenant validly exercises its option to extend the Term of this
Lease as herein provided, Basic Rent shall be adjusted as of the first day of
the applicable Extended Terms as follows:
(i) Commencing within ten (10) days after Landlord's receipt of
Tenant's notice of its intention to exercise its option, Landlord and Tenant
shall attempt to agree upon Basic Rent for the Premises for the applicable
Extended Term, such rent to equal one hundred percent (100%) of the estimated
fair market rental value of the Premises for the applicable Extended Term. If
the parties are unable to agree upon the Basic Rent within thirty (30) days
after Landlord's receipt of the notice, then within thirty (30) days thereafter
each party, at its own cost and by giving notice to the other party, shall
appoint a real estate appraiser with at least five (5) years full-time
commercial real estate appraisal experience in the area in which the Premises
are located to appraise and set the Basic Rent for the applicable Extended Term.
If a party does not appoint an appraiser within ten (10) days after the other
party has given notice of
11
the name of its appraiser, the single appraiser appointed shall be the sole
appraiser and shall set Basic Rent for the applicable Extended Term. If each
party shall have so appointed an appraiser, the two appraisers shall meet
promptly and attempt to set the Basic Rent for the applicable Extended Term. If
the two appraisers are unable to agree within thirty (30) days after the second
appraiser has been appointed, they shall attempt to select a third appraiser
meeting the qualifications herein stated within ten (10) days after the last day
the two appraisers are given to set Basic Rent. If the two appraisers are unable
to agree on the third appraiser within such ten (10) day period, either of the
parties to this Lease, by giving five (5) days notice to the other party, may
apply to the then presiding judge of the Superior Court of King County for the
selection of a third appraiser meeting the qualifications stated in this
paragraph. Each of the parties shall bear one-half (1/2) of the cost of
appointing the third appraiser and of paying the third appraiser's fee. The
third appraiser, however selected, shall be a person who has not previously
acted in any capacity for either party.
(ii) Within thirty (30) days after the selection of the third
appraiser, a majority of the appraisers shall set Basic Rent for the applicable
Extended Term. If a majority of the appraisers are unable to agree upon the
Basic Rent within the stipulated period of time, the three appraisals shall be
added together and their total divided by three (3). The resulting quotient
shall be the Basic Rent for the Premises during the applicable Extended Term.
If, however, the low appraisal and/or the high appraisal is/are more than five
percent (5%) lower and/or higher than the middle appraisal, the low appraisal
and/or the high appraisal shall be disregarded. If only one (1) appraisal is
disregarded, the remaining two (2) appraisals shall be added together and their
total divided by two (2), and the resulting quotient shall be Basic Rent for the
Premises during the applicable Extended Term.
(iii) For purposes of determining the Basic Rent for an Extended
Term, including the determination of Basic Rent by the appraisers, the "fair
market rental value" shall be based on the actual rental rates which ready and
willing renewal tenants are paying as of the date of the notice of Tenant's
election to extend the Term, as annual rent for a primary renewal premises (as
distinguished from the rent payable for a sublet premises or with respect to an
assignment of an interest in an existing lease or for the initial term for newly
constructed or existing premises) to a ready and willing landlord of such
primary renewal premises for space comparable to the Premises in a building
comparable to the Building. Rental rates quoted or used under sublease
agreements shall be considered rates of special circumstances and shall be
excluded from the definition of "fair market rental value" under this Section.
(iv) Notwithstanding the above to the contrary, such arbitration
procedure shall be completed prior to the commencement date of the Extended Term
and shall be final, binding and non appealable.
(b) If Tenant timely and properly exercises an option to extend, then
Landlord agrees to provide Tenant with an allowance (the "Renewal Allowance")
with respect each option exercised for the actual cost to re-paint and re-carpet
the Premises (the "Renewal Improvements") in Building standard materials as
defined in the Building Standard Tenant Improvement Specifications attached
hereto as Exhibit "C-5". The Renewal Allowance shall be paid by Landlord to
Tenant within ten (10) days of completion of the Renewal Improvements and
receipt by Landlord of copies of paid invoices for the Renewal Improvements.
12
(c) The option to extend the Term in this Section is not assignable
separate and apart from this Lease, and may only be exercised by Tenant or its
assignee as permitted under Section 8 of this Lease.
(d) If Tenant timely and properly exercises its option to extend, then
Landlord and Tenant shall within fifteen (15) days after the determination of
Basic Rent for the Extended Term in question, execute an amendment to this Lease
extending the Term on the terms and conditions set forth in this Section 2.2.
(e) Tenant shall not have the right to exercise the option to extend,
notwithstanding anything to the contrary set forth above:
(i) During the time commencing from the date Landlord gives to
Tenant a written notice that Tenant is in material nonmonetary default under any
provisions of this Lease, and continuing until the default alleged in said
notice is cured; or
(ii) During the period of time commencing on the day that written
notice is given that a monetary obligation to Landlord is due from Tenant and
unpaid continuing until the obligation is paid.
(f) The period of time within which the option may be exercised shall
not be extended or enlarged by reason of Tenant's inability to exercise the
option because of the provisions and/or restrictions in Section 2.2(e).
(g) All rights of Tenant under the provisions of this option shall
terminate and be of no further force or effect even after Tenant's due and
timely exercise of the option, if after such exercise, but prior to the first
day of the Extended Term in question, (1) Tenant fails to pay to Landlord a
monetary obligation of Tenant for a period of five (5) business days after
written notice thereof from Landlord; or (2) Tenant fails to commence to cure a
default within thirty (30) days after the date Landlord, during the term of this
Lease, gives notice to Tenant of such default; provided, however, the time
periods set forth in this subsection shall be tolled during the time period
necessary to resolve any dispute if Tenant is, in good faith, contesting an
alleged default.
3. BASIC RENT
3.1 Annual/Monthly Rent, Tenant shall pay to Landlord the annual and
-------------------
monthly Rent defined below, (the "Basic Rent") for the Premises, which is
subject to adjustment in accordance with Section 1.3 and Section 1.6 above.
-----------------------------------------------------------------------------------------------------
Period Rate/SF of Rentable Monthly Rent Annual Rent
Area
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
Years 1 - 2 $19.00 $158,853 $1,906,232
-----------------------------------------------------------------------------------------------------
Years 3 - 4 $20.00 $167,213 $2,006,560
-----------------------------------------------------------------------------------------------------
Year 5 $22.00 $183,935 $2,207,216
-----------------------------------------------------------------------------------------------------
13
-----------------------------------------------------------------------------------------------------
Years 6 - 6.5 $23.00 $192,295 $2,307,544
-----------------------------------------------------------------------------------------------------
Each monthly installment shall be paid, in advance, on the first day of each and
every calendar month during the Term unless the Commencement Date is on a day
other than the first day of a calendar month, in which event the Basic Rent for
such month shall be prorated as provided above.
3.1A. Link Rent. When Substantially Completed, Tenant shall pay
---------
Landlord $6.35 per square foot (per BOMA) of the Link as Rent for the Link in
the same manner and time as the payment of Basic Rent through the initial Term
and such Rent shall be increased for any Extended Terms in an amount equal to
the percentage change in Basic Rent for the Extended Terms for the same period.
3.2 Definition of Rent. All amounts due from Tenant to Landlord under
------------------
this Lease other than Basic Rent shall be due as "Additional Rent." The terms
"Rent" and "Rental" as used in this Lease shall mean all amounts to be paid
hereunder by Tenant whether those sums are designated Basic Rent or Additional
Rent or otherwise and as adjusted by the terms of this Lease. Failure by Tenant
to pay any sum of Rent due under this Lease shall entitle Landlord to pursue any
or all remedies specified in this Lease as well as remedies specified in RCW
Chapter 59.12 or otherwise allowed by law, subject to Landlord giving Tenant
prior notice of such default and the expiration of any applicable cure period
without cure having been accomplished.
3.3 Payment of Base Rent - No Deduction or Offset, The Tenant shall pay
---------------------------------------------
said Rent to Landlord (checks should be made out to Bentall Newport Centre
L.L.C.), at the office of Landlord at 0000 000xx Xxxxxx X.X., Xxxxx 000,
Xxxxxxxx, XX 00000-0000, or to such other party or to such other address as
Landlord may designate from time to time by written notice to Tenant, without
demand and without deduction, setoff or counterclaim, except as otherwise
provided herein. If Landlord shall at any time or times accept said Rent after
it shall become due and payable, such acceptance shall not excuse delay upon
subsequent occasions, or constitute, or be construed as a waiver of any or all
of Landlord's rights hereunder. In the event Rent is not paid when it becomes
due, Tenant shall pay interest at the rate of two percent (2%) per annum above
the prime rate charged from time to time by Seafirst Bank on all late payments
past due.
4. RENTAL ADJUSTMENT - OPERATING COSTS
4.1 Acknowledged Net Terms. Tenant acknowledges that this Lease is, in all
----------------------
respects, considered to be a net Lease and it is the intent of the parties that
Tenant shall pay for its Tenant's Percentage (defined below) of the Operating
Costs (defined below) relating to the Building, Real Property, and Common Areas.
All Operating Costs shall be treated as Additional Rent hereunder.
4.2 Tenant Percentage.
-----------------
(a) Building. Tenant shall, for each calendar year of the Lease term,
--------
or any Extended Term, pay to Landlord as Additional Rent Sixty-five and 50/100
Percent (65.50%)
14
("Tenant's Percentage") (subject to adjustment upon re-measurement of the
Premises and/or Building prior to the Commencement Date and if Tenant exercises
Tenant's exclusive expansion right to lease additional space on the fifth (5th)
and/or sixth (6th) floors of the Building) of the Operating Costs of the
Building, Building Common Areas and Real Property; provided, Real Property taxes
and assessments will be prorated in the event of a partial lease year. If an
Operating Cost is not attributable to one hundred percent (100%) of the
Building, Building Common Areas or Real Property, then Tenant shall pay its
reasonable proportionate share thereof. Tenant shall pay 100% of any Operating
Costs directly attributable to Tenant's Premises, not resulting from the
negligence or intentional misconduct of Landlord, its agents and invitees.
(b) Newport Corporate Center. If an Operating Cost is attributable to
------------------------
the Newport Corporate Center Common Areas, "Tenant's Percentage" of such cost
shall be based on the total rentable square footage of Newport Corporate Center
and, as of the date of this Lease, is Fourteen and 83/100 percent (14.83%)
(subject to the same adjustment as Tenant's Percentage set forth above).
4.3 Operating Costs Definition.
--------------------------
(a) Except as otherwise excluded in subsection 4.3(b) below, the term
"Operating Costs" shall include all Operating Costs incurred in maintaining and
operating the Building, Real Property and Common Areas. The Operating Costs
shall include (without limiting the generality of the foregoing) the following:
(1) all real estate taxes and assessments on the Real Property and
Building which are attributable to the Lease term;
(2) heat, air conditioning, utilities, insurance, janitorial and
cleaning services;
(3) a management fee (to cover the cost of salaries, wages, payroll
taxes and other personnel cost of engineers, superintendents,
and other employees in connection with the maintenance and
operation of the Premises, Building and Real Property) in an
amount equal to three and one-half percent (3.5%) of gross rent
in the Building (defined as Basic Rent and Operating Costs less
real estate taxes, assessments, insurance and excess electrical
consumption, and excluding payment of the Link and Excess Cost
Amortization (as defined in the Construction Agreement), Rent
paid for the Link and Storage and, if Tenant elects to provide
certain services as allowed under Section 6.1(b) or 6.1(e),
less the cost of the services provided by Tenant);
(4) all charges under third party maintenance and service contracts
for heating and air conditioning equipment and controls,
exterior window cleaning and Building and parking facilities
maintenance;
(5) security;
(6) insurance provided by Landlord as set forth in Section 13;
15
(7) personal property taxes (if any) in connection with personal
property used in the operation of the Building and Real
Property (but not for any particular tenant);
(8) maintenance, operation, repair and replacement expenses and
supplies for the Building, Real Property, and Building Common
Areas which are deducted for any calendar year and not
capitalized under generally accepted accounting principles
(GAAP) and practices, consistently applied;
(9) maintenance, operation, repair and replacement expenses and
supplies for the Newport Corporate Center Common Areas which
are deducted for any calendar year under generally accepted
accounting principles (GAAP) and practices, consistently
applied, which may include, without limitation, landscaping,
sweeping, flower rotations, storm drains, and pressure washing,
but will specifically exclude costs associated with a common
fitness center, common day care, or common deli;
(10) capital purchases charged to all tenants of the Building by
amortizing the cost thereof over the allowable useful life and
to the extent they are made for and directly contribute to the
lowering of the Operating Costs; and
(11) landscape fees.
Real estate taxes shall be deemed to be the taxes payable in the respective
calendar years, even though the levy or assessment thereof may be for a
different fiscal year, and shall include all real and personal property taxes
and assessments imposed by any governmental authority or agency on the Building
and Real Property; any assessments levied in lieu of taxes; any non-progressive
tax on or measured by gross rentals received from the rental of space in the
Building; and other costs levied or assessed by, or at the direction of, any
federal, state, or local government authority in connection with the use or
occupancy of the Premises or the parking facilities serving the Premises; any
sales or excise tax on this transaction or any document to which Tenant is a
party creating or transferring an interest in the Premises and any expenses,
including costs of attorneys or experts, reasonably incurred by Landlord solely
for the purpose of seeking reduction by the taxing authority of the above-
referenced taxes, but shall not include any income, franchise, capital stock,
estate or inheritance taxes. Landlord agrees to make reasonable efforts so all
assessments against the Real Property and Building are at favorable interest
rates and are calculated based on payment of all assessments over the longest
permitted time.
(b) Notwithstanding anything to the contrary herein, Operating Costs
shall not include the following:
(1) leasing commissions;
(2) payments of principal or interest on any mortgages, deeds of
trust, ground leases or other encumbrances upon the Real
Property or Building;
(3) repairs to the foundation, structural, roof and window
system repairs and replacements (unless such items are
ordinary
16
maintenance and repair items, in which event they are
included as Operating Costs under subsection 4.3(a));
(4) all costs incurred in connection with the original
construction of the Building and Tenant Improvements;
(5) capital improvements, replacements and expenditures, which
under generally accepted accounting principles (GAAP) and
practices, consistently applied, would be classified as
capital expenditures (except as allowed in subsection 4.3(a)
above);
(6) depreciation of machinery, tools and equipment (except as
allowed in Subsection 4.3(a) above);
(7) any bad debt, Rent loss, or reserves for bad debts or Rent
loss;
(8) any expense for which Landlord is compensated through
proceeds of insurance;
(9) unreasonable consulting fees, market study fees, advertising
and promotional expenditures;
(10) legal, accounting or auditing fees (except as allowed in
Subsection 4.3(a);
(11) governmental fines, penalties or interest imposed upon
Landlord except governmental interest imposed on
assessments;
(12) damages incurred by Landlord for any default, breach, claim,
judgment or settlement arising out of this Lease;
(13) finance charges for any future capital expenditures;
(14) fees, costs or expenses incurred in refinancing the Building
or Real Property;
(15) taxes on the sale or transfer of any ownership of or
interest in the Building or Real Property;
(16) repairs and replacements arising from construction and
design defects;
(17) depreciation of the Building, Premises or Tenant
Improvements;
(18) lease or rent payments or leasing or rental costs or
expenses for leased equipment unless such costs or equipment
are used for normal maintenance or repair procedures and are
equitably assessed by Landlord if used for other buildings,
(19) cost of repair of the Building caused by fire or other
casualty or due to the exercise of the right of eminent
domain;
(20) any costs related to public transportation, transit, or
vanpool, unless imposed by governmental authority or at the
request of Tenant;
(21) taxes attributable to Landlord's income, excess profit
taxes, franchise taxes, costs or other taxes on Landlord's
business, costs of selling, syndicating, financing,
mortgaging and costs of any disputes between Landlord and
its employees agents, contractors or building management;
(22) executive salaries;
(23) expenses incurred for the leasing, renovating or improving
space in the Building for tenants and costs (including
permit, license and
17
inspection fees) incurred in building, renovating,
improving, decorating, painting, or redecorating vacant
space for tenants;
(24) costs (including increased insurance premiums) incurred
because Landlord or another tenant violated the terms of
this Lease or any other lease;
(25) compensation paid to clerks, attendants, or other persons in
commercial concessions operated by Landlord;
(26) items and services for which Tenant reimburses Landlord or
pays third parties or that Landlord provides selectively to
one or more tenants of the Building other than Tenant
without reimbursement;
(27) costs incurred to remedy structural defects in original
construction materials or installations, or to remedy
defects or violations in the Building by reason of any laws;
(28) any costs, fines, or penalties incurred because Landlord
violated any Law, government rule or authority; and
(29) original construction costs of the roads, interchanges,
traffic signals, access ways, drainage systems, detention
ponds, street signs, street lights, curbs and gutters, and
all other infrastructure improvements and betterments of the
area surrounding the Building, and any one-time water or
sewer connection fees for the Building,
(30) costs incurred to test, survey, cleanup, contain,
xxxxx, remove, or otherwise remedy hazardous wastes or
asbestos-containing materials from the Building, unless the
wastes or asbestos-containing materials were in or on the
Building because of Tenant's negligence or intentional acts;
(31) overhead and profit paid to subsidiaries or affiliates of
Landlord for management or other services on or to the
Building for supplies or other materials, to the extent that
the costs of the services, supplies, or materials exceed the
competitive costs of the services, supplies, or materials
were they not provided by the subsidiary or affiliate;
(32) advertising and promotional expenditures;
(33) expenses for the replacement of any item to the extent
covered under warranty;
(34) if Landlord charges for parking at the Building, the costs
of Landlord's parking facilities personnel or, if Landlord
contracts with a third-party operator, the costs of such
parking facilities operator, except to the extent that such
costs exceed the revenue generated from the parking
facilities;
(35) assessments or charges of any kind for capital improvements
to the Building or surrounding area called for by any
governmental authority;
(36) marketing expenses and the costs of promotions for the
Building or any tenant therein; and
18
(37) costs of construction or maintenance of any common area
improvements to benefit retail tenants in the Building.
Landlord shall not recover any item of cost more than once.
4.4 Operating Costs and Adjustment. Before the commencement of each calendar
------------------------------
year of the Lease term, or as soon thereafter as practicable, Landlord will
notify Tenant in writing of Landlord's good faith estimate of the Operating
Costs and Tenant's Percentage times said Operating Costs for the next succeeding
year (until the following January 1). Effective January 1 and each month
thereafter, Tenant shall pay to Landlord as Additional Rent one-twelfth (1/12th)
of Tenant's Percentage of said estimated Operating Costs. On the next
succeeding January 1, or as soon thereafter as possible, but not later than the
next succeeding March 31, or upon sooner termination of the Lease, Landlord will
compute Tenant's total rental adjustment for such previous year or portion
thereof if applicable, based on the actual Operating Costs and, shall provide
Tenant with a written statement showing the actual Operating Costs and Tenant's
Percentage of said Operating Costs. Such statement shall provide an itemized
breakdown of the actual Operating Costs. If the total amount of Additional Rent
paid by Tenant for such previous year or portion thereof is less than Tenant's
Percentage of actual Operating Costs, then Tenant shall pay Landlord any
deficiency. If the total amount paid by Tenant for such previous year or
portion thereof exceeds the Tenant's Percentage of actual Operating Costs, then
Landlord shall credit such excess to the payment of Rent and Additional Rent
which may thereafter become due. Any adjustment payment required to be made
pursuant to this section shall be made within thirty (30) days after Landlord
has notified Tenant thereof. Landlord shall make available for Tenant's review
and upon request by Tenant, the accounting information on which any Operating
Cost adjustment is based. If this Lease commences at a time other than at the
commencement of a calendar year, or expires at a time other than the expiration
of the calendar year, Landlord shall estimate Tenant's contributions for that
portion of the calendar year contained in the Lease term and Tenant shall pay
such charge in equal monthly installments on the first day of those months of
that calendar year which are in the Lease term. If at any time Landlord obtains
or receives additional information regarding the actual amounts of the
contributions, Landlord may, at its election, adjust the amount of the monthly
installments due during the balance of the calendar year of the Lease term to
reflect such additional information.
Even though the term has expired and Tenant has vacated the Premises, when the
final determination is made of Tenant's Percentage of Operating Costs for the
year in which this Lease terminates Tenant shall within thirty (30) days pay any
increase due over the estimated expenses paid and, conversely, if Tenant has
otherwise complied with all other terms and conditions of this Lease, Landlord
shall refund any excess to Tenant within thirty (30) days following the date of
termination.
Any increase in Tenant's Percentage of Operating Costs pursuant to this
Section shall be deemed Additional Rent payable by Tenant hereunder, and in the
event of nonpayment thereof, Landlord shall have similar rights with respect to
such nonpayment as it has with respect to any other nonpayment of Basic Rent
hereunder.
4.5 Right to Audit. Landlord agrees to keep books and records showing the
--------------
Operating Costs in accordance with a system of accounts and accounting practices
consistently
19
maintained on a year-to-year basis. Tenant shall have the right to audit, at
Tenant's expense, Landlord's books and records pertaining to Operating Costs and
Real Property taxes. In the event that any such audit conducted in accordance
with generally accepted accounting principles, consistently applied, reveals a
discrepancy of five percent (5%) or more in Landlord's favor between Landlord's
statement of the actual operating and tax costs for the calendar year and the
amount of such operating and tax costs determined by such audit, then Landlord
shall reimburse to Tenant the excess amount, if any, paid by Tenant and shall
pay for the cost of such audit. Tenant's right to audit shall be limited to one
(1) time per calendar year. The time period covered by the audit shall be
limited to the previous twenty-four (24) months from the date of such audit.
4.6 Credits/Reimbursements. Operating Costs shall be reduced by
----------------------
reimbursements, credits, discounts, reductions, or other allowances received or
receivable by Landlord for items of cost included in Operating Costs. If
Landlord receives a refund of any portion of real estate taxes that were
included in the real estate taxes paid by Tenant, then Landlord shall reimburse
Tenant its pro rata share of the refunded taxes, less any expenses that Landlord
reasonably incurred to obtain the refund.
5. SECURITY DEPOSIT
It is hereby agreed that no security deposit will be required.
6. UTILITIES AND SERVICES
6.1 Landlord's Duties. Provided that Tenant is not in default or beyond
-----------------
any applicable cure period, under any of the material terms, covenants,
conditions, provisions or agreements of this Lease, Landlord will provide the
following services:
(a) Maintain normal and usual Building business hours (the "Normal
Business Hours"), Monday through Friday, from 7:00 a.m. to 6:00 p.m. and on
Saturday from 8:00 a.m. to 1:00 p.m.; Sundays and holidays excepted.
(b) Furnish utilities to provide for lighting, convenience power, and
heat and air conditioning twenty-four (24) hours a day for the comfortable
occupancy of the Premises; provided, however, utilities used by Tenant during
other than the Normal Business Hours shall be billed to Tenant at the actual
hourly rate charged to Landlord. Tenant agrees to cooperate fully at all times
with Landlord, and to abide by all regulations and requirements which Landlord
may prescribe for the proper function and protection of said air conditioning
system. Tenant agrees not to connect any apparatus, device, conduit or pipe to
the Building chilled and hot water air conditioning supply lines. Tenant further
agrees that without prior Landlord notice and approval, neither Tenant nor its
servants, employees, agents, visitors, licensees or contractors shall at any
time enter mechanical installations or facilities of the Building or adjust,
tamper with, touch or otherwise in any manner affect said installations or
facilities. The cost of maintenance and service calls to adjust and regulate the
air conditioning system shall be charged to Tenant if the need for maintenance
work results from either Tenant's adjustment of room thermostats or Tenant's
failure to comply with its obligations under this Section. In the event Tenant
occupies the entire Building, Tenant shall have the right, upon notice to
Landlord,
20
to pay for Tenant's electricity directly to the utility provider so long as such
payments are made as and when due. Landlord agrees not to install or utilize its
own power plant for the Building without Tenant's prior written consent, which
consent may be withheld in Tenant's discretion. In addition, Landlord agrees not
to contract with an independent utility provider without Tenant's full
involvement and Tenant's prior written consent, which consent shall not be
unreasonably withheld, conditioned, or delayed, provided that it shall be
reasonable for Tenant to withhold consent if the proposed utility provider is
not a reputable quality utility provider, does not provide the services at
competitive market rates, and does not have local maintenance and emergency
response personnel.
(c) Provide Tenant twenty four (24) hours per day, seven (7) days per
week, fifty-two (52) weeks per year access to the Building and Premises without
the requirement of prior notice to Landlord. Landlord shall provide Tenant with
sufficient keys or access devices for Tenants employees and guests who will be
utilizing the Premises. The cost of such keys or access devices shall be drawn
from the Tenant Improvement Allowance. Landlord shall also provide security
services for the Building comparable as to coverage, control and responsiveness
(but not necessarily as to means for accomplishing same) to first class multi-
tenant (unless the Building is a single tenant building) office buildings in the
area in which the Building is located including, without limitation, electronic
security monitoring of all entrances and exits to the Building on a twenty-four
(24) hour per day basis; provided, however, Landlord shall have no
responsibility to prevent and Landlord shall not be liable to Tenant for any
liability or loss to Tenant, its agents, employees and visitors arising out of
losses due to theft, burglary, or damage or injury to persons or property caused
by persons gaining access to the Building and Premises unless caused by
Landlord's negligence. Tenant shall have the right to install an electronic
security system within the Premises, serving only the Premises, at its sole cost
and expense, provided, however, Landlord shall have the right to approve the
design, plans and specifications for such security systems and the installations
thereof.
(d) Provide non-attended passenger elevator facilities during all
working days (and on Saturday, Sunday and holidays provide at least one elevator
subject to call). Tenant acknowledges that the elevator cars will not be
equipped with card-key access devices.
(e) Provide janitorial and maintenance services to the Premises in
accordance with the Janitorial Services described in Exhibit "I" attached hereto
provided the Premises are kept in reasonable order by Tenant. Any and all
additional janitorial service desired by the Tenant shall be contracted for by
the Tenant directly with Landlord's janitorial agent and the cost and payment
thereof shall be and remain the sole responsibility of the Tenant. In addition,
Tenant may elect to contract directly with Landlord's janitorial agent for
normal janitorial and cleaning services for the Premises and may also elect to
replace the lights in the Premises at Tenant's cost.
(f) Make all repairs to the Premises, excluding repairs to or any
special treatment of walls, floors or ceilings made by or at the request of
Tenant and excluding repairs to any fixtures or other improvements installed or
made by or at the request of Tenant. In the event any repairs are required
because of any act or omission of Tenant, its agents, employees, customers, or
invitees, Landlord may make such repairs and add the cost thereof to the next
installment of Rent. Landlord shall proceed in a reasonable manner and with due
diligence in
21
performing all Landlord obligations hereunder which involve the delivery of
services and utilities to Tenant.
(g) Provide water for drinking, lavatory and toilet purposes drawn
through fixtures installed by Landlord.
(h) Repair and maintain the structural, foundational, window systems,
elevator, HVAC, electrical, plumbing and roof portions of the Building, along
with areas of ingress and egress at Landlord's sole cost except to the extent
such costs are "Operating Costs" as defined in Section 4.3(a) and except to the
extent that such costs are the obligation of Tenant under this Lease.
(i) Except with respect to matters related to Tenant's particular use
of the Premises, which shall be Tenant's responsibility, comply with the
provisions of the Americans with Disabilities Act (ADA) Title III, "Commercial
Facilities." Landlord reserves the right to object to and appeal any
determination that it must take any specific action to comply with the ADA;
provided Landlord will hold Tenant harmless from any adverse effects or cost of
such objection or appeal.
(j) Perform property management services in accordance with the
standards and terms set forth on Exhibit "J" attached hereto.
(k) Tenant shall have the right to have telecommunications services
provided to Tenant by a service provider other than US West (Landlord's initial
service provider) provided that Tenant pays all costs and expenses associated
with the connection of the new service provider to the Building and to the
Premises.
6.2 Interruption. It is understood that Landlord does not warrant that any
-------------
of the services referred to above will be free from interruption by virtue of
strike or labor trouble or any other cause beyond Landlord's control. Such
interruption of service shall not be deemed an eviction or disturbance of
Tenant's use or possession of the Premises, or any part thereof, nor shall it
render Landlord liable to Tenant for damages, by abatement or reduction of Rent
or otherwise, except as provided in Subsection 6.3 herein, nor shall it relieve
Tenant from performance of Tenant's obligations under this Lease, nor shall
Tenant be relieved from the performance of any covenant or agreement in this
Lease because of such failure or interruption. Landlord reserves the right to
stop service of the elevator, plumbing, ventilation, air-conditioning, and
electrical systems, when necessary, by reason of accident or emergency, or, upon
reasonable advance notice to Tenant, for repairs, alterations or improvements,
which are in the reasonable judgment of Landlord necessary, until said repairs,
alterations or improvements shall have been completed. Landlord shall use good
faith best efforts to minimize the disruption to Tenant's business in making
such repairs.
6.3 Rent Abatement. If there occurs an interruption or failure of services
--------------
or utilities as referred to in Section 6.2 which is caused by Landlord's
negligence or other wrongful conduct or the negligence or wrongful conduct of
Landlord's agents, employees or contractors and Landlord fails to commence
within two (2) business days and thereafter diligently proceed to complete
repairs required to be made by Landlord under this Lease, and if the condition
22
referred to continues for a period of three (3) business days (or for more than
five (5) days in any ten (10) day period), then from the first day of the
existence of such condition (or the occurrence requiring repairs or
corrections), the Rent payable by Tenant hereunder (including Additional Rent)
shall be abated for the portion of the Premises for which normal and usual
utilization by Tenant is made impractical, such abatement to be effective for
the full period such condition exists and until the repairs or corrections are
made or the services or utilities are restored.
6.4 Self-Help and Remedies. If after written notice of the failure to
----------------------
perform is given to Landlord by Tenant; provided, however, that if any such
failure by Landlord to perform such service shall render the Premises
untenantable or unfit for Tenant's intended use then Tenant shall have the right
to take such reasonable actions as may be necessary to remedy the situation and
shall give Landlord contemporaneous notice of the actions it is taking.
6.5 Cost of Services. The cost of all services provided by Landlord under
----------------
this Section 6 shall be considered Operating Costs under Section 4; except for
Landlord's costs which are specifically set forth under Subsection 4.3(b) and
except for costs which are the responsibility of Tenant under this Lease.
Payment for all services rendered under this Section 6 shall be in accordance
with Section 4 of this Lease.
6.6 Tenant's Rules and Regulations. Landlord agrees to comply with the
------------------------------
"Tenant's Rules and Regulations" attached hereto as Exhibit K.
---------
7. CARE AND USE OF THE PREMISES
7.1 Tenant's Duties. Tenant agrees that it shall during the Term:
---------------
(a) Not use or occupy the Premises in violation of law or of the
certificate of occupancy issued for the Building, and shall, upon written notice
from Landlord, discontinue any use of the Premises which is declared by any
governmental authority having jurisdiction to be a violation of law or of said
certificate of occupancy. Tenant shall comply with any direction of any
governmental authority having jurisdiction which shall, by reason of the nature
of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to the Premises or with respect to the use or occupation
thereof.
(b) Give Landlord access to the Premises at all reasonable times, upon
reasonable advance notice to Tenant (which notice shall be directed to Tenant's
"Facilities Department" in addition to any other person to whom notices are
required to be given under this Lease), without charge or diminution of Rent, to
enable Landlord to examine the same and to make such repairs, additions and
alterations as are required under the terms of this Lease, including the right
to show the Premises for the purpose of a potential sale or lease. If Tenant
fails to respond to Landlord's request for access within one (1) business day,
Tenant shall be deemed to have agreed to the time and manner of Landlord's
requested access. If Landlord proposes to show the Premises, Tenant will be
allowed to limit or prevent access to those portions of the Premises Tenant
deems, in its sole business judgment, sensitive or confidential. Furthermore, if
Landlord proposes to show the Premises to a prospective Tenant, Landlord may be
precluded from doing so, except during the last six (6) months of the Lease
term.
23
(c) Keep the Premises in good order and condition, reasonable wear and
tear and casualty damage excepted, and replace all broken glass with glass of
the same quality as that broken, save only glass broken by fire and extended
coverage type risks.
(d) Recognize that improvements attached to the Premises become the
property of the Building and may not be removed without approval of Landlord
which approval may be subject to the Tenant's paying for the cost of repairs
resulting from the removal of such improvements.
(e) Upon the termination of this Lease in any manner whatsoever,
remove Tenant's property and those of any other person claiming under Tenant,
and quit and deliver up the Premises to Landlord peaceably and quietly in as
good order and condition as the same are in on the Commencement Date, reasonable
use and wear thereof, casualty damage and permitted alterations and additions
not specifically required to be removed upon termination of the Lease as they
were added excepted. The foregoing property required to be removed that is not
removed by Tenant at the termination of this Lease, however terminated, shall be
considered abandoned and Landlord may dispose of the same in the manner it deems
expedient with reasonable cost to be billed to the Tenant.
(f) Not place signs on the outside of the Premises or in places
visible from the outside by the public, without the prior written consent of
Landlord and subject to all applicable governmental rules and restrictions, as
well as the "Building Rules and Regulations as set forth in Exhibit "E".
(g) Not use or allow the Premises to be used for any unlawful purpose,
nor cause, maintain or permit any nuisance in, on or about the Premises. Tenant
shall not commit or suffer to be committed any waste in or upon the Premises.
(h) Not do or permit to be done anything which will invalidate or
increase the cost of any fire, extended coverage or any other insurance policy
covering the Building and/or property located therein unless Tenant agrees,
after Landlord gives thirty (30) days prior written notice to Tenant of the cost
thereof, to reimburse Landlord for any increase in the cost of such insurance
and subject to lender's approval. Tenant shall promptly, upon demand, reimburse
Landlord for any additional premium charges for such policy by reason of
Tenant's failure to comply with the provisions of this Section.
(i) Observe the "Building Rules and Regulations" described in Exhibit
"E", and which may be modified by Landlord from time to time provided Tenant is
given at least ten (10) business days prior written notice of such now or
amended rules and provided further that such new or amended rules do not
materially interfere with the terms and conditions of this Lease or unreasonably
interfere with Tenant's quiet enjoyment and its intended use of the Real
Property, the Building or the Premises or materially increase Tenant's cost of
operations or occupying the Premises and, provided further, that the Building
Rules and Regulations shall not discriminate against Tenant and are enforced by
Landlord in a non-discriminatory manner.
24
(j) Notify Landlord in writing promptly upon Tenant's discovery of any
latent defects in the Building and/or the Premises. So long as Tenant has
promptly notified Landlord in writing of any latent defect(s) (of which Tenant
has knowledge) in the building shell construction and the Tenant Improvements
owned by Landlord, then Tenant shall not be responsible for the costs and
expense of repairing latent defect(s) in the building shell construction and the
tenant improvements owned by Landlord. Provided, if Tenant fails to notify
Landlord of a latent defect of which Tenant has knowledge, then the failure to
notify Landlord must be a proximate cause of Landlord's damage before Tenant
would be responsible for the costs and expenses to repair such latent defect(s).
7.2 Use of Rooftop. The parties anticipate that Tenant will require
--------------
rooftop installation of one or more of the following: (a) satellite dish; (b)
microwave dish; and (c) communications equipment. The installation of such
equipment shall be in accordance with Landlord's Rooftop Agreement attached
hereto as Exhibit "G".
7.3 Maintenance of Link. Except with respect to construction defects,
-------------------
which shall be the obligation of Landlord, Tenant shall be solely responsible,
at Tenant's expense, for the cost of maintaining and repairing the Link. In the
event Tenant elects to have Landlord maintain and repair the Link, such
maintenance and repair shall be done at Tenant's cost and Tenant shall pay
Landlord a fee equal to 3.5% of such reasonable maintenance and repair costs.
7A. HAZARDOUS MATERIALS
7A.1 Tenant Representations. Tenant represents and warrants that it shall
----------------------
not generate, treat, store or discharge on or at the Premises, the Building or
the Real Property any hazardous wastes or hazardous substances as defined in
applicable federal, state and/or local statutes or regulations; provided, Tenant
shall not be in violation of the foregoing by its use and storage of standard
office products, otherwise defined as hazardous, which products are used by
Tenant with due care and in accordance with the instructions of the product
manufacturer in the reasonable and prudent conduct of Tenant's business on the
Premises, and/or by Tenant's generation of a byproduct connected with its
permissible uses, which byproduct is otherwise defined as hazardous, so long as
Tenant uses due care in connection therewith.
7A.2 Landlord Representations. Landlord represents and warrants the
------------------------
following:
(a) To the best of Landlord's knowledge, there exists no
environmental liability from hazardous substances or toxic materials as defined
by the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), 42 U.S.C. (S) 9601, et seq., and amendments thereto, or
------
hazardous waste as defined by the Resource Conservation Recovery Act ("RCRA"),
42 U.S.C. (S) 6901, 21 et seq., and amendments thereto, or
------
hazardous waste or substance as defined in any federal, state or local law,
statute or regulation within, on, in, or under any portion of the Premises, the
Building, or the Real Property. Landlord further warrants and represents that,
to the best of Landlord's knowledge, no hazardous substances have been dumped,
stored or manufactured on or are now being stored or manufactured on the
Premises, the Building, or the Real Property. Landlord will not in the future
generate, treat, store or discharge such hazardous wastes or substances on or at
the
25
Premises, Building, or Real Property except in accordance with applicable
federal state and/or local statutes or regulations;
(b) The Premises and Building will be free from asbestos; and
(c) Landlord will not knowingly allow another tenant or Landlord's
contractors to generate, treat, store or discharge hazardous wastes or hazardous
substances on or at the Premises, Building, or Real Property except in
accordance with applicable federal, state and/or local statutes or regulations.
8. ASSIGNMENT AND SUBLETTING
8.1 Except as allowed by the provisions of this Section 8, Tenant shall
not, either voluntarily or by operation of law, assign, hypothecate or transfer
this Lease, or sublet the Premises or any part thereof, without the prior
written consent of Landlord in each instance, which shall not be unreasonably
withheld, conditioned or delayed.
8.2 In the event Tenant desires to assign, hypothecate or otherwise
transfer this Lease or sublet the Premises, then at least thirty (30) days prior
to the date when Tenant desires the assignment or sublease to be effective (the
"Assignment Date"), Tenant shall give Landlord a notice (the "Assignment
Notice"), which shall set forth the name, address and business of the proposed
assignee or sublessee, information (including references) concerning the
character, ownership, and financial condition of the proposed assignee or
sublessee, the Assignment Date, any ownership or commercial relationship between
Tenant and the proposed assignee or sublessee, and the consideration and all
other material terms and conditions of the proposed assignment or sublease, all
in such detail as Landlord shall reasonably require.
8.3 The subletting of substantially all of the Premises for all or any
part of the remaining term of this Lease shall be deemed an assignment rather
than a sublease for purposes of this clause. Notwithstanding the foregoing,
Landlord shall consent to the assignment or transfer, if the Assignment Notice
states that Tenant desires to assign the Lease to any entity into which Tenant
is merged, that controls, is controlled by or is under common control with
Tenant, or with which Tenant is consolidated or which acquired all or
substantially all of the assets of Tenant, provided that the assignee first
executes, acknowledges and delivers to Landlord an agreement whereby the
assignee agrees to be bound by all of the covenants and agreements in this Lease
which Tenant has agreed to keep, observe or perform, that the assignee agrees
that the provisions of this Section shall be binding upon it as if it were the
original Tenant hereunder and that the assignee shall have a net worth
(determined in accordance with generally accepted accounting principals
consistently applied) immediately after such assignment which is at least equal
to the net worth (as so determined) of Tenant immediately prior to the
assignment.
8.4 If Tenant shall sublet all or any portion of the Premises, any
consideration paid by the sublessee for the portion of the Premises being sublet
that exceeds one hundred percent (100%) of the Basic Rent and Rental Adjustments
provided by this Lease for such portion of the Premises being sublet shall be
due, owing and payable from Tenant to Landlord when owing by the sublessee under
the sublease; provided, however, that Tenant may retain out of
26
such excess rent an amount sufficient to reimburse Tenant for Tenant's actual
and reasonable out-of-pocket costs associated with the sublease (such as
commissions and allowances) not to exceed $5.00 per rentable square foot of
subleased space.
8.5 Any sale, assignment, hypothecation or transfer of this Lease or
subletting of the Premises that is not in compliance with the provisions of this
Section 8 shall be void. The consent by Landlord to any assignment or
subletting shall not be construed as relieving Tenant or any assignee of this
Lease or sublessee of the Premises from obtaining the express written consent of
Landlord to any further assignment or subletting, or as releasing Tenant or any
assignee or sublessee of Tenant from any liability or obligation hereunder
whether or not then accrued. In the event Landlord shall consent to any
assignment or sublease, Tenant shall pay Landlord as Additional Rent a
reasonable attorneys and administrative fee for costs incurred in connection
with evaluating the Assignment Notice up to a limit of $500. This Section 8
shall be fully applicable to all further sales, hypothecations, transfers,
assignments and subleases of any portion of the Premises by any successors or
assignee of Tenant, or any sublessee of the Premises.
8.6 The term "assign," as used herein, shall include (i) an assignment of
a part of interest in this Lease, as well as any assignment from one cotenant to
another; and (ii) an assignment to any prior owner of the Tenant's interest
herein or part thereof.
8.7 An assignment requiring consent within the meaning of this Section,
shall be deemed to include one or more sales or transfers, by operation of law
or otherwise, or creation of new stock, by which an aggregate of more than fifty
percent (50%) of Tenant's stock shall be vested in a party or parties who are
nonstockholders as of the date hereof. This Section 8.7 shall not apply and
consent shall not be required if Tenant's stock is listed on a recognized
security exchange. This paragraph shall not apply and consent shall not be
required if the stock is transferred:(i) for bona fide estate planning purposes
or due to the death of any member(s) of the family of Xxxxx Xxxxx; (ii) to
Welsh, Carson, Xxxxxxxx & Xxxxx, or any entity in which Xxxxx Xxxxx or his
family members own at least fifty percent (50%) of the beneficial interest
therein, provided, the net worth (determined by generally accepted accounting
principles, consistently applied) of any such entity together with the net worth
of Tenant (as so determined) at the time of such transfer shall be equal to or
greater than the net worth of Tenant immediately prior to the transfer;
provided, the assignee will agree to be bound by all of the covenants and
agreements of this Lease which Tenant has agreed to keep, observe or perform and
the assignee will execute such documents as Landlord or its lender shall
reasonably require or request to evidence such agreement.
8.8 Notwithstanding any provision of this Section 8 to the contrary, after
Landlord receives a request from Tenant to consent to either an assignment or
sublease, Landlord shall have the option, to be exercised by written notice
within thirty (30) days after the receipt of such request, to terminate this
Lease (in the case of an assignment or sublease of all of the Premises) or
recapture a portion of the Premises (in the case of a sublease of part of the
Premises) within such thirty (30) day period by notice to the Tenant. If
Landlord elects to terminate this Lease or recapture a portion of the Premises,
Tenant shall have the right, to be exercised by written notice to the Landlord
within ten (10) days after receipt of such notice of termination or recapture
from Landlord, to withdraw its request for consent to the proposed
27
assignment or sublease, in which case the Tenant shall not proceed with the
proposed assignment or sublease, Landlord notice of termination or recapture
shall be null and void and this Lease shall continue in full force and effect in
accordance with its terms. Notwithstanding the above provisions of this Section
8.8 to the contrary, Landlord shall not have the right to recapture a portion of
the Premises with respect to the first 45,000 rentable square feet of space
subleased by Tenant and, if Tenant exercises its Expansion Right under Section
1.6 above with respect to both the fifth (5th) and sixth (6th) floors of the
Building, then Landlord shall not have the right to recapture with respect to
the amount of rentable square feet of space which equals the total rentable
square footage of the largest two floors in the Building subleased by Tenant
(which 45,000 square feet or two floor square footage, as applicable, is
hereafter referred to as the "Sublease Limit"). Once the Sublease Limit is
reached, Landlord shall have the right to recapture space in excess of the
Sublease Limit in accordance with the timing and other terms set forth above in
this Section. In addition, if Landlord does not elect to recapture space in
excess of the Sublease Limit prior to a sublease being entered into by Tenant,
Landlord shall have the right to recapture such space at the expiration of the
sublease term if Tenant does not re-occupy the space within ninety (90) days
after the expiration of the sublease term. With respect to Tenant's options to
extend under Section 2.2, Landlord agrees to respond to Tenant's request to
include any of such options in a proposed sublease at the time of Tenant's
request for consent. Further, in the event Tenant requests Landlord's consent to
a sublease to a single subtenant which covers a portion of the Premises in
excess of the Sublease Limit in addition to the Sublease Limit, and Tenant
desires to include Tenant's options to extend in the sublease terms, Landlord
agrees not to unreasonably withhold its consent to such request provided that
the proposed subtenant is of a quality comparable to other office tenants in the
Newport Corporate Center.
9. INTENTIONALLY DELETED
10. DAMAGE OR DESTRUCTION
10.1 In the event the Building and/or the Premises is damaged by fire or
other perils covered by Landlord's insurance, Landlord shall:
(a) In the event of a partial destruction of the Building and/or the
Premises, to an extent not exceeding fifty percent (50%) of the full insurable
value thereof, and if the damage thereto is such that the Building and/or the
Premises may be repaired, reconstructed or restored within a period of one
hundred twenty (120) days from the date of the happening of such casualty and if
Landlord will receive insurance proceeds sufficient to cover the cost of such
repairs, then Landlord shall commence and proceed diligently with the work of
repair, reconstruction and restoration and this Lease shall continue in full
force and effect.
(b) If such repair, reconstruction, and restoration shall require a
period longer than one hundred twenty (120) days or exceeds fifty percent (50%)
of the full insurable value thereof, or if said insurance proceeds will not be
sufficient to cover the cost of such repairs, then Landlord either may elect to
so repair, reconstruct or restore and the Lease shall continue in full force and
effect or Landlord may elect not to repair, reconstruct, or restore and the
Lease shall then terminate. Under any of the conditions of this Section 10.1(b),
Landlord shall give written notice to Tenant of its intention within ninety (90)
days after the occurrence
28
of such damage or destruction. In the event Landlord elects not to restore the
Building and/or the Premises, this Lease shall be deemed to have terminated as
of the date of such partial destruction.
(c) If the Newport Terrace Building continues to be leased by Tenant
following any destruction of the Building and there remains at least eleven (11)
months on the term of this Lease and Tenant has exercised an option to extend,
and Tenant requests within thirty (30) days of the date of destruction, Landlord
shall rebuild the Building and Tenant Improvements regardless of the degree of
damage or time required to rebuild, provided Tenant agrees to pay any costs not
reimbursed by insurance and such payment is made to Landlord prior to the
commencement of construction.
(d) Notwithstanding the foregoing provisions of this Section 10.1,
if the parties are unable to agree on the extent of damage or whether or not the
damage can be repaired within any applicable time limits within ten (10) days
after Landlord's notice to Tenant of its election, then the dispute resolution
procedures of Section 17.6 shall be used to resolve the issue.
10.2. Upon any termination of this Lease under any of the provisions of
this Section 10, the parties shall be released without further obligation to the
other from the date possession of the Premises is surrendered to Landlord except
for items which have therefore accrued and are then unpaid or any items which
have been prepaid by Tenant and a refund shall be then due.
10.3 In the event of repair, reconstruction, and restoration by Landlord
as herein provided, the Rent payable under this Lease shall be abated
proportionately with the degree to which Tenant's use of the Premises is
impaired during the period of such repair, reconstruction or restoration unless
the damage or destruction was caused by the negligence or willful misconduct of
Tenant in which event the Rent payable hereunder will continue unabated. Tenant
shall not be entitled to any compensation or damages for loss in the use of the
whole or any part of the Premises and/or any inconvenience or annoyance
occasioned by such damage, repair, reconstruction or restoration, unless cause
in whole or in part by Landlord's negligence or willful misconduct.
10.4 Tenant shall not be released from any of its obligations under this
Lease except to the extent and upon the conditions expressly stated in this
Section 10. Notwithstanding anything to the contrary contained in this Section
10, if Landlord is delayed or prevented from repairing or restoring the damaged
Premises within twelve (12) months after the occurrence of such damage or
destruction by reason of acts of God, war, governmental restrictions, inability
to procure the necessary labor or materials, or other cause beyond the control
of Landlord, Landlord shall be relieved of its obligation to make such repair or
restoration and Tenant shall be released from its obligations under this Lease
as of the end of said one (1) year period and this Lease shall be deemed
terminated.
10.5 If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall be obligated to make repair or restoration only of
those portions of the Building and/or the Premises and/or Tenant Improvements
which were originally provided at Landlord's
29
expense, and the repair and restoration of items not provided at Landlord's
expense shall be the obligation of Tenant.
10.6 Notwithstanding anything to the contrary contained in this Section
10, if any damage or destruction is due to any cause other than a cause covered
by the insurance required to be carried by Landlord under this Lease and such
damage or destruction will cost in excess of ten percent (10%) of the then
current full replacement cost of the Building, Landlord may elect to terminate
this Lease by giving notice thereof to Tenant provided, however, if Landlord
elects to terminate this Lease, Tenant shall have the right to cause Landlord to
repair such damage if, within twenty (20) days of receipt of Landlord's notice
of termination, Tenant agrees to pay for the repair cost in excess of such ten
percent (10%) and provides Landlord with reasonably adequate assurances of
Tenant's ability to pay for such excess cost.
10.7 Notwithstanding anything to the contrary contained in this Section
10, Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premise when the damage resulting from any casualty covered under
this Section 10 occurs during the last twelve (12) months of the then current
term of this Lease. However, if Landlord chooses not to restore, Tenant may
elect to terminate this Lease.
11. INDEMNIFICATION
11.1 Indemnity by Tenant. Tenant shall indemnify, defend and hold
-------------------
Landlord harmless from all claims arising from Tenant's use of the Real
Property, Building and Premises or the conduct of its business or from any
activity, work, or thing done, permitted or suffered by Tenant in or about the
Real Property, Building or Premises. Tenant shall further indemnify, defend and
hold Landlord harmless from all claims arising from any breach or default in the
performance of any obligation to be performed by Tenant under the terms of this
Lease, or arising from any act, neglect, fault or omission of Tenant or of its
agents, contractors or employees, and from and against all costs, reasonable
attorneys' fees, expenses, and liabilities incurred in or about such claim or
any action or proceeding brought thereon. In case any action or proceeding shall
be brought against Landlord by reason of any such claim, Tenant, upon notice
from Landlord, shall defend the same at Tenant's expense; provided that the
foregoing provision shall not be construed to make Tenant responsible for loss,
damage, liability or expense resulting from injuries to third parties caused by
the negligence of Landlord, or its officers, contractors, agents or employees.
11.2 Indemnity by Landlord. Landlord shall indemnify, defend and hold
---------------------
Tenant harmless from all claims arising from any activity, work, or thing done
or permitted by Landlord in or about Real Property, Building and Premises.
Landlord shall further indemnify, defend and hold Tenant harmless from all
claims arising from any breach or default in the performance of any obligation
to be performed by Landlord under the terms of this Lease, or arising from any
act, neglect, fault or omission of Landlord or of its agents, contractors or
employees, and from and against all costs, reasonable attorneys' fees, expenses,
and liabilities incurred in or about such claim or any action or proceeding
brought thereon. In case any action or proceeding shall be brought against
Tenant by reason of any such claim, Landlord, upon notice from Tenant, shall
defend the same at Landlord's expense; provided that the foregoing provision
shall not be construed to make Landlord responsible for loss, damage, liability
or
30
expense resulting from injuries to third parties caused by the negligence of
Tenant, or its officers, contractors, agents or employees.
11.3 Limitation. Notwithstanding anything contained above in this
----------
Section, in the event of concurrent negligence of Tenant, its agents, employees
or contractors, on the one hand, and that of Landlord, its agents, employees, or
contractors on the other hand, which concurrent negligence results in injury or
damage to persons or property, Tenant's obligation to indemnify Landlord and
Landlord's obligation to indemnify Tenant as set forth in this Section shall be
limited to the extent of the defaulting party's negligence, and that of its
agents, employees, or contractors, including the defaulting party's proportional
share of costs, attorneys fees and expenses incurred in connection with any
claim, action or proceeding brought with respect to such injury or damage.
12. DAMAGE TO TENANT'S PROPERTY
Notwithstanding anything in this Lease to the contrary, Landlord or its agents
shall not be liable for any damage to Tenant's property which is caused by the
following: (a) loss or damage to any property by theft or otherwise (unless
caused by Landlord's or its employees', agents' or contractors' negligence), or
(b) any injury or damage to property resulting from fire, explosion, falling
plaster, steam, gas, electricity, water or rain which may leak from any part of
the Building or from the pipes, appliances or plumbing work therein or from the
roof, street or sub-surface or from any other place or resulting from dampness
(unless caused by Landlord's negligence or willful misconduct). Landlord or its
agents shall not be liable for interference with light or other incorporeal
hereditaments. Tenant shall give prompt notice to Landlord in case of fire or
accidents in the Premises or in the Building or of defects herein or in the
fixtures or equipment.
13. INSURANCE
13.1 Tenant's Insurance. Tenant shall, during the Term and any other
------------------
period of occupancy, at its sole cost and expense, keep in full force and effect
the following insurance:
(a) Commercial general liability insurance insuring Tenant against
any liability arising out of Lease, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be in the
amount of not less that Five Million Dollars ($5,000,000.00) combined single
limit per occurrence and aggregate for injury to, or death of one or more
persons and for damage to tangible property (including loss of use). The policy
shall insure the operations of independent contractors, and include contractual
liability (covering the indemnity contained in Section 11 above) and shall (1)
name Landlord as an additional insured (limited to liabilities arising out of or
in connection with Tenant's operations or Premises), and (2) contain a provision
that "the insurance provided Landlord hereunder shall be primary and non-
contributing with any other insurance available to Landlord."
13.2 Landlord's Insurance. Landlord shall, during the Term and any other
--------------------
period of occupancy, keep in full force and effect the following insurance:
31
(a) Commercial general liability insurance insuring Landlord against
any liability arising out of Landlord's use, occupancy or maintenance of the
Building and all areas appurtenant thereto. Such insurance shall be in the
amount of not less that Five Million Dollars ($5,000,000.00) combined single
limit per occurrence and aggregate for injury to, or death of one or more
persons and for damage to tangible property (including loss of use). The policy
shall insure the operations of independent contractors, and include contractual
liability (covering the indemnity contained in Section 11 above) and shall (1)
name Tenant as an additional insured (limited to liabilities arising out of or
in connection with Tenant's operations or the Premises), and (2) contain a
provision that "the insurance provided Landlord hereunder shall be primary and
non-contributing with any other insurance available to Landlord."
(b) Property insurance on a "special perils" form together with
coverage for earthquake and sewer backup (excluding any property which Tenant is
obligated to insure), for the full replacement value of the Building, all
personal property owned by Landlord at the Building, and all improvements and
betterments to the Building, with a deductible not to exceed $20,000.00. Such
policy shall also include coverage for loss of rental income, covering direct or
indirect loss of Landlord's earnings attributable to abatement of Rent under
this Lease or termination of this Lease as provided herein in an amount as will
properly reimburse Landlord.
(c) Landlord may at its own expense obtain and carry any other form
or forms of insurance as it or Landlord's mortgagees may determine advisable.
13.3 Policies. All policies shall be written in a form satisfactory to
--------
Landlord and shall be taken out with insurance companies holding a General
Policyholders Rating of "A" and a Financial Rating of "V" or better, as set
forth in the most current issue of Bests Insurance Guide. Prior to taking
occupancy of the Premises, Tenant shall deliver to Landlord certificates
evidencing the existence of the amounts and forms of coverage required in
Section 13.1 above. No such policy shall be cancelable or reducible in coverage
except after forty-five (45) days prior written notice to Landlord or after ten
(10) days prior written notice for nonpayment of premiums. Tenant shall within
ten (10) days prior to the expiration of such policies, furnish Landlord with
renewals or "binders" thereof. If Landlord obtains any insurance that is the
responsibility of Tenant under this Section 13, Landlord shall deliver to Tenant
a written statement setting forth the cost of any such insurance and showing in
reasonable detail the manner in which it has been computed. All insurance
passed through to tenants as an Operating Cost shall be at market based premiums
and deductibles, as evidenced by bids if requested by Tenant.
13.4 Evidence of Insurance. All insurance policies shall be written in a
---------------------
form and with an insurance company as required in Section 13.3. Within fifteen
(15) days after Tenant takes possession of the Premises, upon Tenant's request
Landlord shall deliver to Tenant certificates evidencing the existence of the
amounts and forms of coverage required by this Lease. Landlord shall within ten
(10) days prior to the expiration of such policies, upon Tenant's request
furnish Tenant with renewals or "binders" thereof.
14. WAIVER OF SUBROGATION
32
Tenant and Landlord agree to mutually release each other from liability, and to
waive all right of recovery against the other, for any loss of or damage to the
property of each, including earnings derived there from caused by or resulting
from fire, the perils of the commonly referred to special form coverage and
leakage from automatic sprinkler systems, if any, or from perils insured against
under any insurance policies maintained by the parties hereto, regardless of the
cause of such loss or damage even though it results from some act or negligence
of a party hereto, its agents or representatives; provided, however, that this
provision shall be inapplicable if it should have the effect, but only to the
extent that it would have the effect, of invalidating any insurance coverage of
the parties thereto.
15. EMINENT DOMAIN
15.1 If all of the Premises, access to the Premises, or such portion of
the Premises or the Newport Corporate Center or access thereto as would, in
Landlord's or Tenant's reasonable judgment, materially interfere with the
continuation of Tenant's business operations in substantially the same manner
and space, shall be permanently taken or condemned for any public purpose, then
this Lease, at the option of Tenant or Landlord upon the giving of written
notice to the other party, shall forthwith cease and terminate upon the date
when title vests in the condemning or taking entity. If this Lease is terminated
as provided above, then this Lease shall cease and expire as if the date of
transfer of possession of the Premises, the Newport Corporate Center, or any
portion thereof, was the Expiration Date of this Lease.
15.2 In the event that this Lease is not terminated by either Landlord or
Tenant under the prior Section, Tenant shall pay Rent up to the date of transfer
of possession of such portion of the Premises so taken or condemned and this
Lease shall thereupon cease and terminate with respect to such portion of the
Premises so taken or condemned as if the date of transfer of possession of the
Premises was the Expiration Date of the term of this Lease relating to such
portion of the Premises. Thereafter the Rent shall be adjusted on a pro rata,
net rentable square foot basis.
15.3 In the event of any such condemnation or taking and this Lease is not
so terminated, Landlord shall promptly repair the Premises or the Newport
Corporate Center, as the case may be, to the condition that existed at the
Commencement Date, so that the remaining portion of the Premises or Newport
Corporate Center, as the case may be, shall constitute a complete architectural
unit, fit for Tenant's occupancy and business; provided, however, that
Landlord's obligation to repair hereunder shall be limited to the extent of the
net proceeds made available to Landlord for such repair from any such
condemnation or taking. Landlord shall promptly make available to Tenant any and
all net proceeds made available to Landlord from such condemnation or taking to
the extent such proceeds are attributable to Tenant Improvements owned by and/or
paid for by Tenant and are not used in repairing or restoring such Tenant
Improvements to the condition that existed at the Commencement Date.
15.4 In the event of any temporary taking or condemnation for any public
purpose of the Premises or any portion thereof, then this Lease shall continue
in full force and effect except that Rent shall be adjusted on a pro rata net
rentable square foot basis for the period of time that the Premises are so taken
as of the date of transfer of possession of the Premises, and Landlord shall be
under no obligation to make any repairs or alterations.
33
15.5 In the event of any condemnation or taking of the Premises, Tenant
hereby assigns to Landlord the value of all or any portion of the unexpired term
of the Lease and all Tenant Improvements and Tenant may not assert a claim for a
condemnation award therefor; provided, however, Tenant may pursue a separate
attempt to recover an award or compensation against or from the condemning
authority for (i) the value of any fixtures, furniture, furnishings, and other
personal property which were condemned but which under the terms of this Lease
Tenant is permitted to remove at the end of the Term, (ii) the unamortized cost
of Tenant Improvements, which are not so removable by Tenant at the end of the
term of this Lease but which were installed solely at Tenant's expense, (iii)
relocation and moving expenses, and (iv) compensation for loss to Tenant's
business.
15.6 Subject to Section 15.5, Landlord shall have the exclusive authority
to grant possession and use to the condemning authority and to negotiate and
settle all issues of just compensation or, in the alternative, to conduct
litigation concerning such issues; provided, however, that Landlord shall keep
Tenant informed of the proceedings and negotiations concerning the Premises.
16. BANKRUPTCY
If Tenant shall file a petition in bankruptcy under any provision of the
Bankruptcy Code as then in effect, or if Tenant shall be adjudicated a bankrupt
in involuntary bankruptcy proceedings and such adjudication shall not have been
vacated within ninety (90) days from the date thereof, or if a receiver or
trustee shall be appointed of Tenant's property and the order appointing such
receiver or trustee shall not be set aside or vacated within ninety (90) days
after the end thereof, or if Tenant shall assign Tenant's estate or effects for
the benefit of creditors, or if this Lease shall, by operation of law or
otherwise, pass to any person or persons other than Tenant, then in any such
event Landlord may terminate this Lease, if Landlord so elects, with notice of
such election and with or without entry or action by Landlord. In such case,
notwithstanding any other provisions of this Lease, Landlord, in addition to any
and all rights and remedies allowed by law or equity, shall, upon such
termination, be entitled to recover damages in the amount provided in Section
17.2 hereof. Neither Tenant nor any person claiming through or under Tenant or
by virtue of any statute or order of any court shall be entitled to possession
of the Premises but shall surrender the Premises to Landlord. Nothing contained
herein shall limit or prejudice the right of Landlord to recover damages by
reason of any such termination equal to the maximum allowed by any statute or
rule of law in effect at the time when, and governing the proceedings in which,
such damages are to be provided; whether or not such amount is greater, equal
to, or less than the amount of damages recoverable under the provisions of this
Section.
17. DEFAULT AND RE-ENTRY: REMEDIES
17.1 Default. The occurrence of any one or more of the following events
-------
shall constitute a default hereunder by the party acting or failing to act:
34
(a) The failure to make any payment required by this Lease as and
when due, where such failure shall continue after three (3) days' written notice
that the same was not paid when due.
(b) The failure to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in Section 17.1(a) above, where such failure shall
continue for a period of fifteen (15) days after written notice thereof from the
other party. If the nature of the default is such that more than fifteen (15)
days are reasonably required for its cure, then no default shall occur if the
party shall commence such cure within said fifteen (15) day period and
thereafter diligently prosecute such cure to completion. Notwithstanding the
above to the contrary, Tenant may contest mechanic liens and other claims
against the Building and/or Premises made by third parties without being in
default so long as it takes reasonably adequate steps to protect the Landlord's
interest.
(c) Subject to Section 365(b)(2) and (e)(1), Bankruptcy Reform Act of
1978, as amended by the Bankruptcy Amendments and Federal Judgeship Act of 1984,
(a) The making of any general assignment for the benefit of creditors; (b) the
filing by or against a party a petition to have that party adjudged a bankrupt
or a petition for reorganization or arrangement under any law relating to
bankruptcy (unless, in the case of a petition filed against a party, the same is
dismissed within thirty (30) days); (c) the appointment of a trustee or receiver
to take possession of substantially all of a party's assets located at the
Premises or of that party's interest in this Lease, where possession is not
restored within one hundred twenty (120) days; or (d) the attachment, execution
or other judicial seizure of substantially all of a party's assets located at
the Premises or of that party's interest in this Lease where such seizure is not
discharged within one hundred twenty (120) days.
17.2 Remedies on Default. In the event of any such default by Tenant,
-------------------
then Landlord may elect either (a) to cancel and terminate this Lease, (b) to
terminate Tenant's right to possession only without terminating the Lease, or
(c) pursue any other remedy available at law or equity.
In the event of election under 17.2(b) above to terminate Tenant's right to
possession only, Landlord may, at Landlord's option, enter into the Premises,
change the locks and take and hold possession of the Premises in accordance with
applicable law, without such entry into possession terminating this Lease or
releasing Tenant in whole or in part from Tenant's obligation to pay the Rent
hereunder for the full stated term. Upon such re-entry, Landlord may remove all
persons and property from the Premises, and such property may be removed and
stored in a public warehouse or elsewhere at the cost of and for the account of
Tenant. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section shall be construed as an election to terminate this Lease unless
a written notice of such intention is given to Tenant or unless the termination
thereof is decreed by a court of competent jurisdiction. Upon and after entry
into possession without termination of the Lease, Landlord shall use good faith
best efforts to relet the Premises, or any part thereof, for the account of
Tenant, to any person, firm or corporation, other than Tenant, for such rent,
for such time and upon such terms as Landlord, using reasonable discretion,
shall determine, subject to Landlord's legal duty to mitigate its damages and
re-let the Premises, but Landlord shall not be
35
required to accept any tenant offered by Tenant or to observe any instruction
given by Tenant about such reletting. In any such case, Landlord may make
repairs and redecorate the Premises to the extent reasonably necessary to secure
a replacement tenant, and Tenant shall, upon demand, pay the costs thereof,
together with all of Landlord's reasonable expenses of reletting. If the
consideration collected by Landlord upon any such reletting for Tenant's
account, and after deducting all expenses incident thereto, including reasonable
brokerage fees and legal expenses, is not sufficient to pay monthly the full
amount of the Rent provided in this Lease, Tenant shall pay to Landlord the
amount of each monthly deficiency upon demand. In the event that Landlord shall
have terminated Tenant's right to possession only, Landlord shall have the right
to further pursue any remedy at law or in equity that may be available to
Landlord.
17.3 Rent After Termination. In the event Tenant ceases to conduct its
-----------------------
business operations on the Premises or, if Landlord shall at any time be
entitled to Rent under this Lease pursuant to any of the covenants, conditions
or agreements of this Lease either (1) after termination of Tenant's right to
possession without termination of this Lease, or (2) after the termination of
this Lease, then Landlord shall recover and Tenant agrees to pay the Basic Rent
and any Additional Rent, together with late fees and interest, as provided in
this Lease. In the event that Landlord shall elect to terminate this Lease then
upon such termination Tenant shall (if it has not already done so) quit and
surrender the Premises to Landlord and Landlord may recover from Tenant:
(a) Any unpaid Rent which had been earned at the time of such
termination; plus
(b) The unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such Rent loss that Tenant proves
could have been reasonably avoided; plus
(c) The present value at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds the
amount of such Rent loss that Tenant proves could be reasonably avoided; plus
(d) Any other amount necessary to compensate Landlord for all the
damage proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom.
17.4 Cumulative Remedies; No Waiver. Except as otherwise provided in this
-------------------------------
Lease, all rights, options and remedies of either party contained in this Lease
shall be construed and held to be cumulative, and no one of them shall be
exclusive of the other, and Landlord or Tenant shall have the right to pursue
any one or all of such remedies or any other remedy or relief which may be
provided by law, whether or not stated in this Lease. No waiver of any default
of Tenant or Landlord hereunder shall be implied from any acceptance by Landlord
or Tenant of any Rent or other payments due hereunder or any omission by
Landlord or Tenant to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect defaults other than
as specified in said waiver. The consent or approval of Landlord or Tenant to
or of any act by the other requiring the other's consent or approval shall
36
not be deemed to waive or render unnecessary Landlord's or Tenant's consent or
approval to or of any subsequent similar acts by Tenant or Landlord.
17.5 Tenant Remedies. As more specifically provided elsewhere in this
---------------
Lease, upon Landlord's default, Tenant may pursue the remedies given in this
Lease.
17.6 Mitigation. Notwithstanding anything to the contrary herein, both
----------
Landlord and Tenant shall have the obligation to take reasonable steps to
mitigate their damages caused by any default under this Lease.
17.7 Dispute Resolution Procedures. Except with respect to actions by
-----------------------------
Landlord to recover possession of the Premises through an unlawful detainer or
similar procedure, and except with respect to emergency matters for which a
restraining order or other similar equitable relief is necessary, the parties
agree to attempt to resolve any disputes under this Lease and related agreements
as follows: both parties covenant to provide a person authorized and empowered
to resolve any dispute that may arise to meet face to face with the person from
the other party upon ten (10) days prior notice at a mutually convenient place.
Such persons shall negotiate in good faith to attempt to resolve the dispute for
as long as either party so desires and in good faith believes progress can be
made. Failing a resolution of the dispute by this method, the parties shall
submit to non-binding mediation of the dispute with a mediator of their choice
with experience in mediating commercial disputes. Both parties shall pay an
equal share of the fees of the mediator prior to the commencement of the
mediation. Otherwise the parties shall each pay their own costs and expenses of
such mediation. Failing resolution of the dispute by this method, the parties
shall resort to arbitration or litigation as provided herein. Any dispute under
this Lease shall not be subject to arbitration unless and to the extent required
by law or as otherwise agreed to by the parties or specifically stated herein.
When any dispute is to be arbitrated, the parties shall choose one arbitrator.
If the parties do not agree on an arbitrator within fifteen (15) days after
being requested to do so in writing, then either party may petition the Superior
Court of Washington to appoint an arbitrator. Each of the parties shall pay one-
half of the arbitrators' fees. The arbitration shall be conducted in accordance
with Rules 2.3 through 8.1 of the Superior Court Mandatory Arbitration Rules
(MAR), 1997 official edition of the Washington Rules of Court, as they may be
amended from time to time. All disputes not required to be arbitrated after the
procedures of this Section have been undertaken shall be resolved by litigation
in an appropriate court of law.
18. INTENTIONALLY DELETED
19. SUBORDINATION, QUIET ENJOYMENT
19.1 Subordination. This Lease is subject to and is hereby subordinated
to all present and future mortgages, deeds of trust and other encumbrances
affecting the Premises, Building and Real Property subject to Tenant's right to
peaceful and quiet enjoyment and exclusive possession during the Lease term and
any extensions thereof, so long as Tenant is not in default hereunder. The
foregoing sentence is conditioned upon Landlord obtaining and delivering to
Tenant a nondisturbance agreement in which any person currently or hereafter
holding a mortgage, deed of trust or other encumbrance to which this Lease is to
be subordinate agrees to recognize this Lease upon foreclosure, trustee's sale
or deed in lieu thereof so long as the
37
Tenant is not in default under this Lease beyond the expiration of any
applicable cure period. Tenant will, upon demand by Landlord, execute such
instruments as may be reasonably required at any time, and from time to time, to
subordinate the rights and interests of the Tenant under this Lease to the lien
of any mortgage or trust deed at any time placed on the land or which the
Premises are a part; provided however, that such subordination shall not affect
Tenant's right to possession, use and occupancy of the Premises as long as
Tenant shall not be in default under any of the terms and conditions of this
Lease.
19.2 Attornment and Estoppel. Tenant further agrees:
------------------------
(a) That any such subordination agreement will contain a provision
satisfactory to Landlord's financing lender whereby Tenant will agree, in the
event of foreclosure of any such mortgage or trust deed to attorn to and
recognize as its Landlord under the terms of this Lease said lender or any
purchaser of the leased property at a foreclosure sale or their heirs,
successors, or assigns; and
(b) That it will execute and deliver to such lender a true Estoppel
Certificate in a form reasonably satisfactory to such lender.
20. ESTOPPEL CERTIFICATES
Tenant shall, from time to time, upon written request of Landlord, execute,
acknowledge and deliver to Landlord or its designee a written statement stating:
the date this Lease was executed; the Commencement Date and Expiration Date; the
amount of minimum monthly Rent and the date to which such Rent has been paid;
and certifying to the extent true: that this Lease is in full force and effect
and has not been assigned, modified, supplemented or amended in any way (or
specifying the date of the agreement so affecting this Lease); that this Lease
together with all Exhibits represents the entire agreement between the parties
as to this leasing; that all conditions under this Lease to be performed by
Landlord have been satisfied; that all required contributions by Landlord to
Tenant on account of Tenant's improvements have been received; that on this date
there are no existing defenses or offsets which the Tenant has against the
enforcement of this Lease by Landlord, and that not more than one month's Rent
has been paid in advance. It is intended that any such statement delivered
pursuant to this Section may be relied upon by a prospective purchaser of
Landlord's interest or a mortgagee of Landlord's interest or assignee of any
mortgage upon Landlord's interest in the Building. If Tenant shall fail to
respond within ten (10) days of receipt by Tenant of Landlord's written request,
Landlord shall give Tenant a second identical notice advising Tenant it has to
respond within five (5) business days after receipt by Tenant of said second
request by Landlord as herein provided, otherwise Tenant shall be deemed to have
given such certificate as above provided without modification and shall be
deemed to have admitted the accuracy of any information supplied by Landlord to
a prospective purchaser of mortgagee, that this Lease is in full force and
effect, that there are no uncured defaults in Landlord's performance, that the
security deposit is as stated in this Lease, and that not more than one month's
Rent has been paid in advance. If, in Tenant's good faith opinion, there are
discrepancies between the terms stated on the Estoppel Certificates and the
agreement then in effect, including any known current defaults under this Lease
by either Landlord or Tenant, including written modifications to the Lease and
stating the date and nature of such modifications and including the date to
which the Basic Rent
38
and other sums payable under this Lease have been paid, that Tenant be allowed
to describe all such exceptions.
21. ATTORNEY'S FEES
21.1 Payment to Prevailing Party. If either party shall bring an action or
---------------------------
proceeding (including without limitation, any cross-complaint, counterclaim or
third party claim) against any other party by reason of the breach or alleged
violation of any covenant, term or obligation hereof, or for the enforcement of
any provision hereof, or to interpret, or otherwise arising out of this Lease,
except for the appraisal procedures of Section 2.2, the prevailing party in such
action or proceeding shall be entitled to its costs and expenses of suit,
including but not limited to reasonable attorneys' fees, which shall be payable
whether or not such action is prosecuted to judgment. "Prevailing party" within
the meaning of this Section shall include, without limitation, a party who
dismisses an action for recovery hereunder in exchange for full payment of the
sums allegedly due, performance of covenants allegedly breached or consideration
substantially equal to all of the relief sought in the action.
21.2 Attorneys' Fees in Third Party Litigation. If either party is
-----------------------------------------
required to initiate or defend any action or proceeding with a third party
(including, without limitation, any cross-complaint, counterclaim or their party
claim) because of the other party's breach of this Lease, or otherwise arising
out of this Lease, and such party is the prevailing party in such action or
proceeding, then the party so initiating or defending shall be entitled to its
costs and expenses of suit, including but not limited to reasonable attorneys'
fees from the other party.
21.3 Scope of Fees. Attorneys' fees under this Section shall include
-------------
attorneys' fees on any appeal, and, in addition, a party entitled to attorneys'
fees shall be entitled to all other reasonable costs and expenses occurred in
connection with such action.
22. INTENTIONALLY DELETED
23. NOTICES
All bills, statements, notices or communications which either party may desire
or be required to give to the other party pursuant to this Lease shall be in
writing and either delivered to the other party personally or sent by courier or
registered or certified mail addressed to Tenant or Landlord as the case may be,
at the address below, all such notices being effective upon receipt as shown on
the return receipt from the postal service or courier, if mailed by registered
or certified mail or courier addressed to Tenant or to Landlord at the addresses
designated as follows:
To Tenant: Attachmate Corporation
Attn: Legal Department
0000 000xx Xxxxxx X.X.
Xxxxxxxx, XX 00000
Facsimile No. (000) 000-0000
with copy to: Xxxxxxxx X. Xxxxxxx
00
Xxxxx Xxxxx LLP
000 Xxxxxxxxxx Xxxxxx
3600 Xxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile No. (000) 000-0000
To Landlord: Bentall Newport Centre L.L.C.
0000 000xx Xxx. X.X., Xxxxx 000
Xxxxxxxx, XX 00000-0000
Facsimile No. (000) 000-0000
In addition, any notice or other communication sent hereunder by hand delivery
or certified or registered United States mail shall also be sent by facsimile to
the recipient; provided, however, any notice or other communication sent by
facsimile shall not be deemed given for purposes of the computation of time
within which a response is required since it is the express intent of the
parties that all official notices or communications hereunder be given by hand
delivery or certified or registered United States mail. Either party may
specify a different address for notice purposes by written notice to the other.
Any notice by Tenant may be addressed to Landlord at the address where the last
previous Rent hereunder was payable or in the case of subsequent change upon
notice given, to the latest address furnished.
24. HOLDING OVER
Should Tenant continue to occupy the Premises after expiration of the Lease
term or any renewal or renewals thereof, or after a forfeiture should occur,
such tenancy shall be from month to month at a monthly Rent equal to one hundred
fifty percent (150%) of the Rent paid for the last month of the Term.
25. CONSTRUCTION OF BUILDING AND TENANT IMPROVEMENTS
25.1 Initial Shell Construction. Landlord, at its sole cost and expense,
---------------------------
shall construct the Building Shell and parking garage shell as defined in the
construction drawings and specifications listed in Exhibit "C-2" and as
generally described in Exhibit "C-3". Tenant shall have the ability to
participate in the process of finalizing and approving the final construction
drawings and specifications for the Building and in the selection of materials
and colors as required by same. Additions and/or modifications to the Building
which are requested by the Tenant shall be subject to Landlord's prior approval
pursuant to the provisions of the Construction Agreement. Additions and/or
modifications to the Building which are requested by the Tenant shall be
incorporated at Tenant's expense if the changes involve any increase in the
design and/or construction related costs of the Building, provided such requests
by Tenant are made in a timely manner so as not to delay Substantial Completion.
If Tenant's requested additions and/or modifications to the Building will result
in a delay of Substantial Completion, Landlord shall so notify Tenant prior to
the commencement of such work. If Tenant elects to continue with such work, and
a delay in Substantial Completion results therefrom, Tenant shall be liable for
any additional costs and expenses incurred by Landlord. If the modifications
requested by Tenant do not increase the cost or delay construction of the
Building and are otherwise approved by Landlord, then they shall be made without
cost to Tenant.
40
25.2 Initial Tenant Improvements. Landlord's sole tenant improvement
---------------------------
obligation is set forth in Exhibit "C" and it is the Tenant's obligation to pay
for the cost of constructing the Link as set forth in Exhibit "C-4", if it is
constructed, which is Tenant's choice. Landlord shall enter into a construction
contract with its contractor for the construction of said improvements in
accordance with Exhibit "C" and shall thereafter monitor the completion of such
work. Tenant Improvements shall be in accordance with construction drawings and
specifications prepared by Tenant's architect from space plans indicating
Tenant's finalized requirements for partitions, electric, telephone and all
other requirements Tenant's space plans shall be signed off by Tenant and
approved by Landlord. Tenant agrees to provide said space plans and
construction drawings at its sole cost per the work schedule set forth in
Exhibit "C-1".
25.3 Tenant Improvement Allowance. In addition, it is hereby agreed and
----------------------------
understood that Landlord will contribute the amount of Twenty-Five Dollars
($25.00) per square foot of Useable Area of the Premises (the "Improvement
Allowance") toward the cost of the Tenant Improvements to be made to the
Premises, including without limitation engineering fees, permits and Washington
state sales tax. Tenant shall pay its space planning and architectural fees
directly and not from the Improvement Allowance. Said Improvement Allowance
shall be in addition to those costs and expenses for which Landlord is
responsible under Section 25.1 above. However, Landlord shall have no
additional responsibility or obligation to pay any amounts in excess of the
Improvement Allowance and any cost or expenses incurred by Tenant in excess of
the Improvement Allowance shall be the sole and exclusive responsibility of the
Tenant.
25.4 Pricing. Landlord agrees that, following Landlord's receipt of Tenant's
-------
space plans and design development documents, the construction drawings and the
contractor's price schedule for such work, Landlord will promptly notify Tenant
in writing of such prices. Landlord will require of the contractor that all
construction costs and expenses for core, shell and Tenant Improvements shall be
competitive. Landlord will further require of its architect and engineers that
all fees and expenses in connection with this project shall be competitive.
25.5 Title to Tenant Improvements. Legal title to all Tenant Improvements
----------------------------
shall immediately vest in Landlord upon substantial completion thereof.
25.6 Link Construction. Landlord shall use its reasonable best efforts to
-----------------
construct the Link at the same time as Landlord constructs the Building Shell
and to obtain all necessary governmental permits and approvals for the Link
provided, however, that any delays in the construction of the Link or in
obtaining necessary permits for the Link shall not result in a delay of
Substantial Completion or Final Completion. The specific provisions regarding
the design and construction of the Link are set forth in more detail in Exhibit
"C". Landlord agrees to provide Tenant with weekly updates on the status of the
governmental permits and approvals for the Link. If Landlord is delayed in
obtaining the necessary governmental permits and approvals beyond December 31,
1998, Tenant shall have the right to work in a coordinated effort with Landlord
to obtain such permits and approvals or, at Tenant's election, take over the
permit and approval process provided, however, that if Tenant takes over the
permit and approval process Tenant shall provide Landlord with weekly updates on
the status of the
41
permits and approvals and shall use its good faith reasonable best efforts to
obtain all of the necessary permits and approvals promptly.
25A. ALTERATIONS AND ADDITIONS BY TENANT
25A.1 Alterations Process. Following the Commencement Date:
-------------------
(a) Tenant may make or cause to be made non-structural, interior
alterations, additions or improvements to the Premises without the prior
approval of Landlord when such alterations, additions or improvements are under
Ten Thousand Dollars ($10,000.00). Within thirty (30) days of completion of such
work Tenant shall provide Landlord with copies of all as-builts and plans and
specifications. All contractors shall be licensed and bonded.
(b) Tenant may make or cause to be made non-structural, interior
alterations, additions or improvements to the Premises in excess of Ten Thousand
Dollars ($10,000.00) without the prior approval of Landlord if Tenant has
provided Landlord with written notice of its intent to make changes at least
fourteen (14) days prior to the start of any work. Notice shall include detailed
information concerning the following items:
(i) general description of the changes to be made including the
description of any demolition work;
(ii) list of licensed and bonded contractors selected to do the work;
(iii) estimate of the costs of work;
(iv) intended work schedule including duration and indicating whether
the work will be accomplished during "normal building hours" or on an off-hours
basis;
(v) plans and specifications for the work.
(c) Tenant shall complete any work done pursuant to this Section and in
accordance with the Building Rules and Regulations and the Construction Rules
and Regulations attached and incorporated hereto as Exhibits "E" and "F",
respectively, at Tenants sole risk, cost and expense, and shall keep the
Premises, Building and Real Property free and clear of liens of any kind. If any
such liens are filed, Tenant shall have ten (10) days from the receipt of notice
from Landlord informing Tenant of such filing to either remove such liens or to
provide a bond in the amount of one hundred fifty percent (150%) of the lien
claim indemnifying Landlord as security for the removal or certification
thereof. Tenant covenants and agrees that all work done by Tenant shall be
performed in full compliance with all laws, rules, orders, ordinances,
regulations and requirements of all governmental agencies, offices and boards
having jurisdiction over the Premises. Further, Tenant shall provide to
Landlord, within thirty (30) days of completion of any work, copies of all as-
builts and plans and specifications. Tenant agrees to hold harmless and
indemnify Landlord in the event of any breach of Tenant's obligations.
25A.2 Title to Property. Landlord shall notify Tenant in writing prior to
-----------------
commencement of any alterations or additions under Section 25A.1(b) if Tenant
will be required to remove such alterations or additions at the end of the Term
and restore the Premises to the same condition they were in prior to such
installation. At the expiration or earlier
42
termination of this Lease, all alterations or additions made by Tenant after the
Commencement Date shall, at Tenant's option, unless otherwise required by
Landlord at the time constructed or added, either be removed and the Premises
returned to their original configuration or shall become the property of
Landlord, free and clear of liens, claims and encumbrances and to remain upon
and to be surrendered with the Premises. Notwithstanding anything to the
contrary herein, all movable partitions, business and trade fixtures, machinery
and equipment, communications equipment and office equipment affixed to or
located within the Premises, which can be removed without structural damage to
the Building shall remain the property of Tenant; provided, Tenant shall
promptly repair any damage to the Premises upon their removal. Furniture,
furnishings and other articles of personal property owned by Tenant and located
in the Premises shall be and shall remain the property of Tenant and may be
removed by Tenant at any time during the Term.
26. RENT TAX
If during the term of this Lease, any tax be imposed upon the privilege of
renting the space leased hereunder or upon the amount of Rents collected
therefore, Tenant will pay as Additional Rent each month a sum equal to such tax
or charge that is so imposed, but nothing herein shall be taken to require
Tenant to pay any income tax imposed upon Landlord.
27. PRIOR AGREEMENT, AMENDMENTS
Neither party hereto has made any representations or promises except as
contained herein or in some further writing signed by the party making such
representation or promises. No agreement hereinafter made shall be effective to
change, modify, discharge or effect an abandonment of this Lease, in whole or in
part, unless such agreement is in writing and signed by or on behalf of the
party against whom enforcement of the charge, modification, discharge or
abandonment is sought.
28. PERSONAL PROPERTY TAXES
Tenant shall pay, or cause to be paid, before delinquency, any and all taxes
levied or assessed which become payable during the term hereof upon all Tenant's
leasehold improvements, equipment, furniture, fixtures and personal property
located in the Premises; except that which has been paid for by Landlord and is
standard in the Building. In the event any of the Tenant's leasehold
improvements, equipment, furniture, fixtures and personal property shall be
assessed and taxed with the Building, Tenant shall pay to Landlord its share of
such taxes within thirty (30) days after delivery to Tenant by Landlord of a
statement in writing setting forth the amount of such taxes applicable to
Tenant's property. If any such taxes on Tenant's personal property or trade
fixtures are levied against Landlord or Landlord's property, or if the assessed
value of the Premises is increased by the inclusion therein of a value placed
upon such personal property or trade fixtures of Tenant, Landlord shall not pay
such taxes until after prior written notice thereof to Tenant, which Landlord
shall have the right to do, but only under proper protest if requested by
Tenant.
29. SUCCESSORS
43
All of the covenants, agreements, terms and conditions contained in this Lease
shall apply to and be binding upon Landlord and Tenant and their respective
heirs, executors, administrators, successors and assigns.
30. RIGHT TO PERFORM
If Tenant shall fail to pay any sum of money, other than Rent and Additional
Rent required to be paid by it hereunder, or shall fail to perform hereunder,
and such failure shall continue for ten (10) days after notice thereof by
Landlord, Landlord may, but shall not be obligated to, and without waiving or
releasing Tenant from any obligations of Tenant, make any such payment
(provided, Landlord will pay "under protest" upon Tenant's request) or perform
any such other act on Tenant's part to be made or performed as provided in this
Lease. Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of nonpayment of sums due
under this Section as in the case of default by Tenant in the payment of Rent.
31. FORCE MAJEURE
Whenever performance is required of either party hereunder, that party shall use
all due diligence to perform and take all necessary measures in good faith to
perform; provided, however, that if completion of performance shall be delayed
at any time by reason of acts of God, war, civil commotion, riots, strikes,
picketing, or other labor disputes, or damage to work in progress by reason of
fire or other casualty, or other cause beyond the reasonable control of said
party (financial inability or negligence of that party or its agents excepted),
then the time for performance is herein specified shall be appropriately
extended by the amount of the delay actually so caused, except as otherwise
provided in Section 10.
32. LIMITATION ON LIABILITY
In consideration of the benefits accruing hereunder, Tenant and all successors
and assigns covenant and agree that, in the event of any actual or alleged
failure, breach or default hereunder by Landlord:
32.1 The sole and exclusive remedy shall be against Landlord's interest in
the Building;
32.2 No general or limited partner of any partnerships who have any interest
in the property, or member or manager of Landlord shall be sued or named as a
party in any suit or action (except as may be necessary to secure jurisdiction
of the partnership or limited liability company);
32.3 No service of process shall be made against any general or limited
partner of any partnerships who have any interest in the property, or member or
manager of Landlord (except as may be necessary to secure jurisdiction of the
partnership or limited liability company);
44
32.4 No general or limited partner of any partnerships who have any interest
in the property, or member or manager of Landlord shall be required to answer or
otherwise plead to any service or process;
32.5 No judgment will be taken against any general or limited partner of any
partnerships who have any interest in the property, or member or manager of
Landlord;
32.6 Any judgment taken against any general or limited partner of any
partnerships who have any interest in the property, or member or manager of
Landlord may be vacated and set aside at any time nunc pro tunc;
32.7 No writ of execution will ever be levied against the asset of any
general or limited partner of any partnerships who have any interest in the
property, or member or manager of Landlord; and
32.8 These covenants and agreements are enforceable both by Landlord and also
by any partner of any partnerships who have any interest in the property, or
member or manager of Landlord.
33. INTENTIONALLY DELETED
34. MISCELLANEOUS
34.1 Brokerage Commissions. Tenant represents and warrants to Landlord that
---------------------
it has not engaged any broker, finder or other person who would be entitled to
any commission or fees in respect of the negotiation, execution or delivery of
this Lease, except for Colliers, Macaulay, Nicolls International, and shall
indemnify and hold harmless Landlord against any loss, cost, liability or
expense, including attorneys' fees, incurred by Landlord as a result of any
claim asserted by any such broker, finder or other person on the basis of any
arrangement or agreements made or alleged to have been made by or on behalf of
Tenant. The provisions of this Section 34.1 shall not apply to brokers with
whom Landlord has an agreement, including Colliers, Macaulay, Nicolls
International, with whom Landlord has a separate agreement.
34.2 Definition of "Landlord". The term "Landlord", as used in this Lease,
-------------------------
so far as covenants or obligations on the part of Landlord are concerned, shall
be limited to mean and include only the owner or owners, at the time in
question, of the fee title of the Premises or the Lessees under any ground
lease, if any. In the event of any transfer, assignment or other conveyance or
transfers of any such title, Landlord herein named (and in case of any
subsequent transfers or conveyances, the then grantor) shall be automatically
freed and relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed. Without further agreement, the transferee of such title shall be
deemed to have assumed and agreed to observe and perform any and all obligations
of Landlord hereunder, during its ownership of the Premises. Landlord may
transfer its interest in the Premises without the consent of the Tenant and such
transfer or subsequent transfer shall not be deemed a violation on Landlord's
part of any of the terms and conditions of this Lease.
45
34.3 Captions. The captions of the paragraphs in this Lease are inserted and
--------
included solely for convenience and shall never be considered or given any
effect in construing or interpreting the provisions hereof if any question of
intent should arise.
34.4 Waivers. The waiver by Landlord or Tenant of any breach of any term,
-------
covenant or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or condition herein
contained, nor shall any custom or practice which may grow up between the
parties in the administration of the terms hereof be deemed a waiver of or in
any way affect the right of either party to insist upon the performance by the
other party in strict accordance with said terms. The subsequent acceptance or
payment of Rent shall not be deemed to be a waiver of any preceding breach by
either party of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of either
party's knowledge of such preceding breach at the time of acceptance of such
Rent.
34.5 Quiet Enjoyment. Provided Tenant observes its obligations under this
---------------
Lease, Tenant shall have peaceable and quiet enjoyment of the Premises
throughout the Term, and Landlord shall not act or permit any third person to
act in any manner which would interfere with or disrupt Tenant's business or
frustrate Tenant's business purposes at the Premises.
34.6 Parking. Tenant shall have the right to non-exclusive use of non-
-------
specific contiguous parking stalls under the Building, at no cost during the
initial Term, for up to four (4) cars per 1,000 square feet of Useable Area in
the Premises leased by Tenant. Tenant's parking shall be located on contiguous
floors of the Building parking garage. Landlord agrees to designate at least
twelve (12) parking stalls in the Building parking garage for visitor parking
only (which number may be adjusted by mutual agreement of the parties). Tenant
acknowledges that the lower three (3) floors of the Building parking garage
(except for the loading docks and shipping and receiving areas located on P-9,
together with all access ways thereto, which are Common Areas as defined in
1.5(a)(i) above) may be designated by Landlord for the exclusive use of a new
building in the Newport Corporate Center located adjacent to the Building. Such
parking shall be subject to such rules, regulations, and codes as may from time
to time be established by Landlord and/or governing authorities. If a parking
administration program needs to be implemented at the Building, Tenant and
Landlord agree to cooperate in the program implementation and Tenant
acknowledges that Landlord's reasonable costs associated with the program will
be borne by all tenants in the Building on a pro rata basis, using the Tenant's
Percentage for each of the tenants affected. In the event Tenant requests
reserved parking, Tenant shall pay rent for reserved parking at the rate of
$25.00 per stall, which rate may be adjusted by Landlord at the expiration of
the initial Term to market rate. The thirty-three (33) parking stalls
designated for the Building located on parking level P-6 shall not be considered
"reserved" for Tenant despite the fact that they will be designated as reserved
parking for the Building.
34.7 Examination of Lease. Submission of this instrument for examination or
--------------------
signature by Tenant does not constitute a reservation of or option of Lease, and
it is not effective as a Lease or otherwise until execution by and delivery to
both Landlord and Tenant.
46
34.8 Time. Time is of the essence of this Lease with respect to the
-----
performance of every provision of this Lease in which time or performance is a
factor.
34.9 Severability. Any provision of this Lease which shall prove to be
------------
invalid, void or illegal in no way affects, impairs, or invalidates any other
provision hereof, and such other provisions shall remain in full force and
effect.
34.10 Recording. Neither Landlord or Tenant shall record this Lease.
---------
Landlord and Tenant shall execute simultaneously with the signing of this Lease
and, at the Landlord's or Tenant's request, thereafter record a short form
memorandum hereof in the form attached hereto as Exhibit "H".
34.11 Consents. Whenever the consent or approval of either party is required
--------
hereunder such consent or approval shall not be unreasonably withheld,
conditioned or delayed including all Exhibits incorporated into this Lease.
34.12 Light and Air. This Lease does not grant any right of access to light
-------------
air, or view, over the property, and Lessor shall not be liable for any
diminution of such light, air, or view by an adjacent structure and/or
vegetation.
34.13 Name. Tenant shall not, without the written consent of Landlord, use
----
the name of the Building or the Project for any purpose other than as the
address of the business to be conducted by Tenant in the Premises, and in no
event shall Tenant acquire any rights in or to such names. Landlord agrees to
not change the project name of Newport Corporate Center or the name of the
Building to a company name or trade name without Tenant's consent, which consent
shall not be unreasonably withheld, conditioned or delayed.
34.14 Construction. This Lease shall be construed in accordance with the laws
------------
of the State of Washington.
34.15 Merger. This Lease supersedes any and all other agreements, either
------
oral or in writing between the parties hereto with respect to the Premises and
contains all of the covenants, agreements and other obligations between the said
parties with respect to said Premises. Landlord and Tenant specifically agree
that this Lease represents the complete agreement of the parties, unless
specifically amended, and that the parties specifically waive their rights to
resort to extrinsic evidence contained in earlier Lease drafts and
correspondence in connection with the Lease negotiations. In that regard, the
parties waive their rights as set forth in Xxxx x. Xxxxxxxx, 115 Wn.2d 657
----------------
(1990).
34.16 Accord and Satisfaction. No payment by Tenant or receipt by Landlord
-----------------------
of a lesser amount than the Rent payment herein stipulated shall be deemed to be
other than on account of the Rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as Rent be deemed an
accord and satisfaction, and Landlord's right to recover the balance of such
Rent or pursue any other remedy provided in this Lease, shall be unaffected by
said payment, endorsement or statement.
47
34.17 Rule Against Perpetuities. If this Lease has not been previously
-------------------------
terminated pursuant to the terms and provisions contained herein, and the term
of this Lease and/or the accrual of Rent hereunder shall not have commenced
within two (2) years for the date of this Lease, then and in that event this
Lease shall thereupon become null and void and have no further force and effect
whatsoever in law or equity.
34.18 Corporate Authority. The persons executing this Lease on behalf of
-------------------
both parties do hereby covenant and warrant that both parties are duly
authorized and are qualified to do business in the State of Washington, that
each party has full right and authority to enter into this Lease, and that each
person signing on behalf of each party was authorized to do so.
34.19 Exhibits. All exhibits attached to this Lease are
--------
incorporated herein by reference.
34.20 Building Signage. Provided Tenant's occupancy does not drop below
----------------
50,000 rentable square feet in the Building, Tenant shall have the exclusive
right to install signage on the Building that complies with applicable
governmental regulations, upon Landlord's prior written approval. Such approval
shall not be unreasonably withheld, conditioned or delayed.
34.21 Interior Signage. Landlord, at Landlord's cost, shall provide Tenant
----------------
with Building standard suite signage and tenant directory signage.
34.22 Storage. Tenant shall have the option to lease from Landlord from time
-------
to time some or all of the storage space on parking levels P-1 through P-5
within the Building (the "Storage Space") on the following terms:
(a) If Tenant occupies the entire Building, Landlord agrees not to lease
storage space on parking levels P-1 through P-5 to any third party (provided
that Landlord may use storage space not leased by Tenant) and Tenant shall have
the right, by giving notice to Landlord, to lease up to all of the Storage Space
on levels P-1 through P-5; and
(b) In the event Tenant occupies Floors 1 - 4 of the Building, Tenant shall
have the right, by giving notice to Landlord, to lease up to Tenant's Percentage
(as defined in Section 4.2) of the Storage Space.
Tenant's lease of Storage Space shall be for a minimum of twelve (12) continuous
months at a time. In the event Tenant leases Floors 1 - 4 of the Building, the
Storage Space shall be leased at a rental rate of $12.00 per square foot per
year and if Tenant leases the entire Building the Storage Space shall be leased
at a rental rate of $12.00 per square foot per year for space located on levels
P-6 through P-9 and $6.00 per square foot per year for space located on levels
P-1 through P-5 (the "Storage Rent"). Storage Rent shall be paid monthly in
advance at the same time and in the same manner as monthly Basic Rent. Landlord
agrees to build-out the Storage Space pursuant to specifications approved by
both Landlord and Tenant, which approval shall not be unreasonably withheld,
unreasonably conditioned, or delayed.
34.23 Confidentiality. The confidentiality of all business information
---------------
provided by either party to this Lease to the other pursuant to the terms of
this Lease shall be preserved and
48
protected by the party receiving such information, unless the party providing
the information has expressly stated in writing to the other party that the
information provided is not confidential.
34.24 Limitations on Compliance with Laws. Except to the extent that
-----------------------------------
alterations or remedial work is required as a result of Tenant's particular use
of the Premises, Tenant's agreement to comply with all laws does not extend to
making structural alterations or doing remedial work required by any existing
statute, code or ordinance, or to correct pre-existing conditions or defects in
the Building and/or the Tenant Improvements constructed by Landlord which are
existing on the Commencement Date.
34.25 Survival. The indemnities between the Landlord and Tenant contained in
--------
this Lease and any liabilities arising during or attributable to the Lease term
shall survive the termination of this Lease.
34.26 Transportation Management. Tenant acknowledges that Landlord is
-------------------------
required to comply with the Transportation Management Program imposed with
respect to the Building by the City of Bellevue pursuant to Bellevue City Code
("BCC") Section 14.60.070. Tenant agrees to comply with the provisions of the
BCC which are applicable to Tenant and Tenant's employees, including, without
limitation, providing financial incentives under BCC Section 14.60.070.F.5 and
satisfying the guaranteed ride home requirements of BCC Section 14.60.070.F.6.
35. RIDERS
Clauses, plats and riders, if any, signed by Landlord or Tenant and affixed to
this Lease are a part hereof.
36. LEASE AND LEASE AMENDMENTS
Tenant currently leases or subleases space in other buildings within Newport
Corporate Center commonly known as Newport Terrace, One Newport, Two Newport,
and Newport Tower. The leases pursuant to which Tenant leases space in these
buildings are referred to in this Lease as the Newport Terrace Lease, One
Newport Lease, Two Newport Lease, and Newport Tower Lease, respectively. This
Lease is conditioned upon execution of the following:
(a) Newport Terrace. An Amended and Restated Newport Terrace Lease
---------------
intended as of the Commencement Date of this Lease to: (1) extend the term of
the Newport Terrace Lease to be coterminous with this Lease; (2) delete Tenant's
options to additional space in the entire Newport Corporate Center in favor of
the Right of First Opportunity granted in this Lease; (3) grant Tenant extension
options like those in this Lease; (4) provide Tenant a refurbishment allowance
for the Newport Terrace; (5) delete Tenant's option to purchase; and (6) provide
Tenant with a "Sublease Limit" of 45,000 feet similar to the provisions of
Section 8.8 of this Lease, among other things.
(b) One Newport. An amendment to the One Newport Lease intended as of the
-----------
Commencement Date of this Lease to: (1) provide that the One Newport Lease
will terminate
49
upon Tenant's occupancy of the Premises and provide for a 100% hold-over rate
during Tenant's staged move-in into the Premises for up to thirty (30) days; (2)
grant Tenant an option to lease space in One Newport for a term of five (5)
years at the following rates: Year 1, $18.50; Years 2-3, $19.00; Year 4, $20.00;
and Year 5, $21.00, with parking to be paid at published market rates, the
option to be exercised by the later of May 12, 1999, or six (6) months prior to
the Scheduled Substantial Completion Date (as set forth in the Construction
Agreement and as may adjusted from time to time) and with an allowance of $5.00
per useable square foot, and (3) provide that there will be no rate increase on
March 31, 1999.
(c) Two Newport. An amendment to the Two Newport Lease intended as of the
-----------
Commencement Date of this Lease to provide that the Two Newport Lease will
terminate upon Tenant's occupancy of the Premises and provide for a 100% hold-
over rate during Tenant's staged move-in into the Premises for up to thirty (30)
days.
(d) Newport Tower. An agreement that the then existing Newport Tower
-------------
Lease will terminate upon Tenant's occupancy of the Premises and provide for a
100% hold-over rate during Tenant's staged move-in into the Premises for up to
thirty (30) days.
For the purposes of this Lease, the Amended and Restated Newport Terrace Lease
described in subsection (a) above, the amendment to the One Newport Lease
described in subsection (b) above, the amendment to the Two Newport Lease
described in subsection (c) above, and the amendment to the Newport Tower lease
described in subsection (d) above are collectively referred to as the
"Amendments".
IN WITNESS WHEREOF, the respective parties hereto have executed this Lease or
caused this Lease to be executed by their duly authorized representative the day
and year first hereon written.
LANDLORD TENANT
Bentall Newport Centre, L.L.C., a Attachmate Corporation, a
Washington limited liability company Washington corporation
By: Bentall U.S. L.L.C., a
Washington limited liability
company its Manager
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
____________________________________ _______________________________________
By: Xxxx X. Xxxxxxxxx By: Xxxxxxx X Xxxxxxxx, its President
Its: Chief Operating Officer Its: Executive Vice
50
/s/ Xxxx X. Xxxx
____________________________________
By: Xxxx X. Xxxx
Its: Director of Leasing
00
Xxxxxxx Xxxxxxx Xxxxxx L.L.C.'s Acknowledgment
STATE OF WASHINGTON )
)
COUNTY OF KING )
On this 1st day of May, 1998, before me, a Notary Public in and for the State
of Washington, personally appeared Xxxx X. Xxxxxxxxx and Xxxx X. Xxxx to me
known to be the Chief Operating Officer and Director of Leasing, respectively,
of Bentall U.S. L.L.C., a Washington limited liability company, the Manager of
Bentall Newport Centre L.L.C., a Washington limited liability company, the
limited liability company that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said limited liability company, for the uses and purposes therein mentioned, and
on oath stated that they were authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year first above written.
/s/ Xxxxxxxx X. Border
--------------------------------------
Printed Name: Xxxxxxxx X. Border
[Notary Seal] NOTARY PUBLIC in and for the State of
Washington,
residing at Bothell, WA
My commission expires: 6/23/2000
52
Attachmate Corporation's Acknowledgment
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 29th day of April, 1998, before me the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared Xxxxxxx X. Bolvert to me known to be the President of Attachmate
Corporation, a Washington corporation, the entity that executed the foregoing
instrument, and acknowledged the same instrument to be the free and voluntary
act and deed of Attachmate Corporation for the uses and purposes therein
mentioned, and on oath stated that he is authorized to execute said instrument.
IN WITNESS WHEREOF my hand and official seal hereto affixed the day and year
in this instrument above written.
/s/ Xxxxx X. Xxxxx
--------------------------------------
Printed Name: Xxxxx X. Xxxxx
[Notary Seal] NOTARY PUBLIC in and for the State of
Washington,
residing at Seattle
My commission expires: 3-19-2000
53
EXHIBIT B
---------
SUBLEASED PREMISES
------------------
(see attached)
NEWPORT 4-6TH
N.T.S.
-------------
2.23.00
[Architectural Rendering of the Subleased Premises]
EXHIBIT C
---------
NOTICE
------
THIS NOTICE made on ___________________, 20_____, between Attachmate
Corporation, a Washington corporation, ("Attachmate") and Mercata, Inc., a
Delaware corporation ("Mercata");
WITNESSETH:
WHEREAS, Attachmate and Mercata entered into a Sublease Agreement
dated _________, 2000 for certain real property located at: the Four Newport
Building, Bellevue, Washington, which Sublease provides that it is for a Term
of Two (2) years beginning on the fourteenth (14th) day following the date of
Substantial Completion; and
WHEREAS, Mercata was in possession of the Substantially Complete
Subleased Premises on _____________, 2000.
NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. The rentable square feet of the Subleased Premises are
______________ and the usable square feet are _____________________.
2. That the Term shall be for two (2) years beginning
______________ and ending _____________ at an annual Base Rent of
______________ DOLLARS ($__________), payable in advance on the first (1st)
day of each month in equal monthly installments of ___________________ DOLLARS
($__________) each.
3. Mercata's pro rata share of building operating costs and real
estate taxes shall be ___% and Mercata's share of operating costs attributable
to the Newport Corporate Centre Common Areas shall be ___%.
Except as herein stated to the contrary all of the covenants,
agreements, and conditions contained in said Sublease dated ________, 2000 are
hereby ratified and confirmed.
IN WITNESS WHEREOF, Attachmate and Mercata have caused this
agreement to be executed as of the day and year first above mentioned.
MERCATA, INC. ATTACHMATE CORPORATION
By:______________________ By:_______________________
Its:_______________________ Its:________________________
14
