1
EXHIBIT 10.6A
OFFICE LEASE AGREEMENT
----------------------
Dated February 28, 1996
BETWEEN
GRAND PACIFIC LIMITED PARTNERSHIP,
A WASHINGTON LIMITED PARTNERSHIP, LANDLORD
AND
xxxx.xxx CORPORATION,
A WASHINGTON CORPORATION, TENANT
2
TABLE OF CONTENTS
-----------------
Page
----
1. BASIC LEASE PROVISIONS AND EXHIBITS 1
1.1 Basic Terms 1
1.2 Exhibits and Addenda 4
2. LEASE OF PREMISES 5
2.1 Building Premises 5
2.2 Parking 5
3. COMMENCEMENT AND EXPIRATION DATES 5
3.1 Commencement Date 5
3.2 Expiration Date 5
3.3 Option to Extend 5
3.4 Tenant's Obligations 7
4. RENT 7
4.1 Minimum Rent 7
4.2 Minimum Rent Increases 7
4.3 Additional Charges 7
4.4 Method of Payment 7
4.5 Prorated Installments 8
4.6 Interest and Late Charges 8
4.7 Security Deposit 8
5. TENANT'S SHARE OF EXPENSES 9
5.1 Direct Expenses 9
5.2 Base Year 11
5.3 Excess Expenses 11
5.4 Tenant's Share of Excess Expenses 11
5.5 Books of Account 12
6. PROPERTY TAXES 12
7. USE AND CARE OF PREMISES 12
i
3
7.1 Permitted Use 12
7.2 Operation 12
7.3 Insurance 13
7.4 Disturbance of Other Occupants 13
7.5 Care of the Premises 13
7.6 Compliance with Rules and Regulations 13
7.7 Signs 14
7.8 Compliance with Laws 14
7.9 Hazardous Material 15
Page
----
8. LANDLORD MAINTENANCE; SERVICES AND UTILITIES 16
8.1 Maintenance 16
8.2 Other Services and Utilities 16
8.3 Tenant's Negligence 17
8.4 Landlord's Negligence 17
8.5 Rent 18
8.6 Failure or Interruption of Services 18
8.7 Waiver of Self Help and Deduct 18
9. COMMON AREAS 18
9.1 Definition 18
9.2 Licenses 19
10. IMPROVEMENTS AND ALTERATIONS TO THE PREMISES 19
10.1 Initial Improvements 19
10.2 Alterations 19
10.3 Rules and Regulations 20
10.4 Landlord's Property 20
10.5 Locks, Plumbing and Wiring 21
11. LIENS 21
11.1 Mechanics' Liens 21
11.2 Landlord's Lien 21
12. INSURANCE AND INDEMNIFICATION 22
12.1 Indemnification 22
ii
4
12.2 Concurrent Negligence 22
12.3 Liability Insurance 23
12.4 Property Insurance 23
12.5 Policy Requirements 23
12.6 Delivery of Policies 24
12.7 Failure to Maintain 24
12.8 Waiver of Subrogation 24
12.9 Landlord's Insurance 24
13. CASUALTY DAMAGE OR DESTRUCTION 25
13.1 Obligation to Repair 25
13.2 Option to Repair 25
13.3 Right to Terminate 25
13.4 Rent 25
13.5 Scope of Repairs 26
Page
----
14. CONDEMNATION 26
14.1 Definitions 26
14.2 Total Taking 26
14.3 Partial Taking 26
14.4 Restoration and Repair 27
14.5 Exercise of Options 27
14.6 Unearned Rent and Rent Adjustment 27
14.7 Award 27
14.8 Temporary Taking 28
15. ASSIGNMENT AND SUBLETTING 28
15.1 General 28
15.2 Notice of Proposed Assignment
or Sublease 28
15.3 Landlord's Options 29
15.4 Limitations on Landlord's Options 29
15.5 Approved Assignment or Sublease 30
15.6 Costs Paid by Tenant 30
15.7 Transfer of Stock or Other Assets 31
16. INVOLUNTARY TRANSFER 31
iii
5
16.1 Bankruptcy; Insolvency 31
16.2 Receivership 31
16.3 Attachment; Judicial Seizure 32
17. QUIET ENJOYMENT 32
18. ACCESS TO PREMISES 32
18.1 Access to Building 32
18.2 Pipes, Ducts and Conduits 32
18.3 Access to Premises 32
18.4 Obstruction of Windows 33
18.5 Access to Premises One Month Prior
to Expiration 33
18.6 Building Changes 33
19. SURRENDER OF PREMISES AND HOLDING OVER 33
19.1 Condition of Premises 33
19.2 Removal of Tenant's Property 33
19.3 Holding Over with Landlord's
Written Consent 34
19.4 Holding Over without Landlord's
Written Consent 34
19.5 Survival of Tenant's Obligations 34
Page
----
20. ESTOPPEL CERTIFICATES 34
21. SUBORDINATION 35
21.1 Priority 35
21.2 Mortgagee Protection 36
22. DEFAULT BY TENANT 36
22.1 Events of Xxxxxxx 00
00. LANDLORD'S REMEDIES 37
23.1 Right to Reenter and Relet 37
iv
6
23.2 Right to Receiver 37
23.3 Right to Terminate Lease 38
23.4 Right to Cure 38
24. DEFAULT BY LANDLORD 38
25. TENANT'S REMEDIES 39
26. WAIVER 39
26.1 Nonwaiver of Defaults 39
26.2 Surrender of Premises 39
26.3 Consents and Approvals 39
26.4 Written Waivers 39
27. NOTICES 40
27.1 Method 40
27.2 Effective Date 40
27.3 Notice of Occurrences 40
28. MISCELLANEOUS PROVISIONS 40
28.1 Time of Essence 40
28.2 Authority 40
28.3 Commissions 41
28.4 Attorneys' Fees 41
28.5 Exhibits and Addenda 41
28.6 Interpretation and Construction 41
28.7 Integrated Agreement and
Modifications 41
28.8 Appointment of Landlord as Agent 41
28.9 Captions 42
28.10 Singular and Plural 42
28.11 Joint and Several Obligations 42
28.12 Severability 42
Page
----
28.13 Recordation 42
28.14 Transfer and Assignment of Premises
by Landlord 42
28.15 Light and Air 42
28.16 Name 42
v
7
28.17 Cumulative Remedies 43
28.18 Successors and Assigns 43
28.19 "Landlord" - Release 43
28.20 Corporate Representatives 43
vi
8
OFFICE LEASE AGREEMENT
dated February 28, 1996
between
Grand Pacific Limited Partnership,
a Washington Limited Partnership, Landlord
and
xxxx.xxx CORPORATION, a Washington corporation, Tenant
1. BASIC LEASE PROVISIONS AND EXHIBITS
1.1 Basic Terms. As used in this Lease, unless the context clearly
requires otherwise, or it is otherwise expressly provided, the following terms
shall have the following meanings, and the parties agree to the following basic
terms and provisions:
1.1.1 Building and Property. The Property is the commercial
portion of the building in Seattle, Washington commonly known as the Grand
Pacific Building ("Building"), as more particularly described in Exhibit 1
("Legal Description"), and appurtenant areas, facilities, equipment and other
improvements and property in the Building.
1.1.2 Commercial Complex. The Commercial Complex is that portion
of the Property leased or available for lease for retail and office uses,
together with common and public areas and facilities provided for the general
use and convenience of Tenant and other tenants and occupants of the Building.
1.1.3 Premises. Premises is 0000 Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxx, which consists of four thousand six hundred ninety-five (4,695)
square feet of rentable area on the second floor of the Building, outlined in
red on the Floor Plan of Premises attached as Exhibit 2. Pursuant to Addendum A
hereof, the Premises may be increased to include the Expansion Space located on
the second floor of the Building and outlined in blue on Exhibit 2.
1.1.4 Areas and Percentages. Landlord and Tenant agree to the
following areas and percentages.
1.1.4.1 Rentable Area of Premises: 4,695 square feet.
1.1.4.2 Tenant's Percentage of Direct
9
Expenses of Commercial Complex: 12.08%
1.1.5 (a) Occupancy Commencement Date. Tenant shall be entitled
to occupy the Premises for the purpose of performing tenant improvements on the
date that this Lease is duly executed by Landlord and Tenant and Tenant has paid
to Landlord the Security Deposit described in Section 1.1.9 below.
1.1.5 (b) Minimum Rent Commencement Date. The Minimum Rent
Commencement Date shall be the earlier of (i) six (6) weeks from the date
hereof, and (ii) the date that Tenant occupies the Premises for the purpose of
conducting its business therein.
1.1.6 Expiration Date. The fifth anniversary of the Minimum Rent
Commencement Date.
1.1.7 Minimum Rent. Three Thousand Five Hundred Ninety-Nine and
50/100 Dollars ($3,599.50) per month calculated as follows: Twelve Dollars and
50/100 ($12.50) per square foot per annum, less a credit (the "Construction
Credit") equal to Three Dollars and 30/100 ($3.30) per square foot per annum for
the first twelve (12) months of the Lease term. Minimum Rent will increase each
year as provided in Section 1.1.8 hereof.
The Construction Credit is granted to Tenant to compensate
Tenant for general disturbances, disruptions and inconveniences (including,
without limitation, dust, construction noise, and street closures) associated
with the ongoing construction on the adjacent property known as the Harbor
Steps. Changes in construction activity on the Harbor Steps project, including
cessation or early completion of construction, shall not modify the Construction
Credit. Tenant's acceptance of the Construction Credit shall not be deemed to be
a waiver of its right to quiet enjoyment of the Premises and shall not relieve
Landlord of its obligations or maintenance and repair under this Lease. Tenant
shall be granted a Construction Credit for the second twelve (12) month period
of the Lease term equal to One Dollar and 5/100 ($1.05) per square foot per
annum.
1.1.8 Minimum Rent Increases.
Rent Per
Square Foot New Monthly
2
10
Effective Date Per Annum Minimum Rent
-------------- --------- ------------
April 15, 1997 11.95* $4,675.44
April 15, 1998 14.00 $5,477.50
April 15, 1999 14.50 $5,673.12
April 15, 2000 15.00 $5,868.75
(*Includes a Construction Credit of One Dollar and 5/100 ($1.05) per
square foot per annum.)
The Effective Date shall be adjusted to the anniversary of the Minimum
Rent Commencement Date if such date occurs before April 15, 1996. The parties
agree that the Premises shall be deemed to contain the number of square feet
referred to in Section 1.1.4.1 hereof and there shall be no adjustment in
Minimum Rent set forth hereinabove (other than as provided in Sections 14.6 and
15.3.1 hereof) due to the fact that the Premises contain less or more than the
number of square feet set forth in Section 1.1.4.1.
1.1.9 Security Deposit. Five Thousand Eight Hundred Sixty-Eight
and 75/100 Dollars ($5,868.75) is to be held as a security deposit pursuant to
Section 4.7, below.
1.1.10 Permitted Use. Office use.
1.1.11 Normal Business Hours. For the purposes of Section 8.2
hereof, Normal Business Hours shall be from 7:30 a.m. to 7:30 p.m. on weekdays
and 8:00 a.m. to 12:00 p.m. on Saturdays. Subject to additional charges for
services as provided herein, Tenant has the right to access to and use of the
Premises at all times.
1.1.12 Tenant Improvement Allowance. Up to Fifty-Two Thousand
Two Hundred Fifty-Five and No/100 Dollars ($52,255.00), to be provided and
applied as more specifically set forth in Exhibit 3. Any portion of the Tenant
Improvement Allowance not paid by Landlord for improvements to the Premises, up
to a maximum of Fourteen Thousand Eighty-Five and No/100 Dollars ($14,085.00)
shall be deemed to be a credit against Minimum Rent and shall be deducted in
equal monthly installments over the first twenty-four (24) months of the term of
this Lease. Up to Ten Thousand and No/100 Dollars of the Tenant Improvement
Allowance may be used by Tenant to pay for costs incurred for improvements to
the Expansion Space (as defined in Addendum A
3
11
hereto). Any payments made by Landlord for tenant improvements shall be subject
to the terms and conditions set forth in Exhibit 3 hereof.
1.1.13 Guaranty. The Guaranty is the Personal Guaranty of Xxx
Fine in the form attached hereto as Exhibit 6, which Guaranty shall be executed
simultaneously with this Lease as a condition to Landlord's obligations
hereunder.
1.1.14 Minimum Liability Insurance Limits.
(a) One Million Dollars ($1,000,000) combined single
limit (for policies without a general aggregate limit); or
(b) One Million Dollars ($1,000,000) and Two Million
Dollars ($2,000,000) general aggregate.
1.1.15 Notice Addresses.
(a)Landlord:
Grand Pacific Limited Partnership
c/o The Whitehall Companies
0000 Xxxx Xxxxxx Xxxxx Xxxx, #00
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxx
With a Copy to:
Xx. Xxxxx X. Xxxxxxxx
MaKensay Real Estate Services, Inc.
00 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxx X-000
Xxxxxxx, Xxxxxxxxxx 00000
And a Copy to:
Xx. Xxxxx X. Xxxxxx, III
Mundt, MacGregor, Happel, Falconer,
Xxxxxx & Hall
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
(b)Tenant: (before Commencement Date)
xxxx.xxx CORPORATION
0000 - 0xx Xxxxxx, Xxxxx 000
4
12
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxx Xxxxxxxxxx
(c)Tenant: (after Commencement Date)
xxxx.xxx CORPORATION
0000 Xxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxxxx
1.1.16 Broker. MaKensay Real Estate Services, Inc.
Landlord shall be responsible for payment of all the
aforementioned Broker's fees and commissions.
1.1.17 Tenant. xxxx.xxx CORPORATION, a Washington corporation.
1.1.18 Moving Allowance. Upon completion of Tenant Improvements
and Tenant's occupancy of the Premises for the purpose of conducting its
business therein, Landlord shall pay to Tenant a Moving Allowance of Four
Thousand Six Hundred Ninety-Five and No/100 Dollars ($4,695.00).
1.2 Exhibits and Addenda. The following exhibits or riders are
attached to this Lease and incorporated herein:
Exhibit 1: Legal Description
Exhibit 2: Floor Plan of Premises
Exhibit 3: Tenant Improvements
Exhibit 4: Rules and Regulations
Exhibit 5: Declaration of Condominium
Exhibit 6: Personal Guaranty
Addendum A: First Right of Refusal for
Expansion Space
2. LEASE OF PREMISES
2.1 Building Premises. On and subject to the terms, covenants and
conditions set forth in this Lease, Landlord hereby leases the Premises to
Tenant and Tenant hereby leases the Premises from Landlord.
2.2 Parking. Landlord is undertaking to obtain use of
5
13
at least two (2) outside parking stalls located north of the Building on Seneca
Street (the "Parking Area"). For the fee set forth hereinbelow, Tenant shall
have the right to the exclusive use of two (2) parking stalls in the Parking
Area during all periods throughout the Lease Term, as it may be extended, that
Landlord has the right to use the Parking Area. Tenant shall pay to Landlord a
monthly fee for use of the two (2) stalls equal to the current monthly parking
rate for two (2) spaces charged by the Watermark Garage (located west of the
Building), less forty dollars ($40.00). Throughout the Lease Term, Landlord
shall provide Tenant with at least ten (10) days' notice of any period during
which the parking stalls will not be available for Tenant's exclusive use.
During all periods throughout the Lease Term, as it may be extended, that
Landlord does not make the parking stalls in the Parking Area available for
Tenant's exclusive use, Tenant shall be entitled to a credit against Monthly
Minimum Rent equal to Eighty Dollars ($80.00) per month.
3. COMMENCEMENT AND EXPIRATION DATES
3.1 Commencement Date.
3.1.1 The Commencement Date shall be the date specified in
Section 1.1.5(a).
3.1.2 Tenant shall be obligated to pay Minimum Rent to Landlord
on the date first set forth in Section 1.1.5(b).
3.2 Expiration Date. The Lease Term shall expire on the Expiration
Date specified in Section 1.1.6, unless extended pursuant to Section 3.3 below.
3.3 Option to Extend. Landlord hereby grants Tenant an option to
extend the Lease Term for one (1) period of three (3) years and zero (0) months,
commencing on the day after the Expiration Date.
3.3.1 Exercise of Option. To exercise this option, Tenant shall
give written notice to Landlord of its desire to extend the Lease Term at least
two hundred twenty (220) days prior to the Expiration Date (the "Option
Notice"). Landlord is under no obligation to notify Tenant of this deadline.
Tenant understands and agrees that time is of the essence and unless so
exercised by this deadline, the option hereby granted shall
6
14
terminate and be null and void. This option to renew is expressly conditioned on
the full and faithful compliance by Tenant with each and every of its
obligations contained in the Lease.
3.3.2 Terms of Lease During Option Period. If Tenant properly
exercises the option to renew, it shall thereby bind itself to the lease of the
Leased Premises for the period of three (3) years. During the extended term,
each and every provision of the Lease shall remain unchanged and in full force
and effect, including periodic Additional Charges, except as provided in this
Section 3.3.2.
3.3.2.1 The monthly Minimum Rent for the extended term
shall be ninety-five percent (95%) of the "Market Minimum Rental" for the Leased
Premises. The Market Minimum Rental for the Leased Premises shall be specified
by Landlord and shall be the then current monthly base rental rate being offered
by landlords for comparable space in comparable locations in downtown Seattle,
Washington for a term equal to the extended term. Landlord shall notify Tenant
in writing of the Market Minimum Rental for the extended term within twenty (20)
business days after receipt of the Option Notice. If Tenant disagrees with the
Market Minimum Rental specified by Landlord in such notice, it shall so notify
Landlord within twenty (20) business days of delivery thereof by Landlord, and
the parties shall meet as soon as possible thereafter in a good faith effort to
resolve their disagreement. If the parties are still in disagreement twenty (20)
business days after delivery of such notice from Tenant to Landlord, Tenant
shall have three (3) business days thereafter to notify Landlord in writing of
its irrevocable election to (i) cancel its option to extend to Lease Term, in
which event the Lease shall terminate on the Expiration Date, or (ii) agree to
submit the disagreement concerning the Market Minimum Rental to an M.A.I
appraiser, as set forth herein below, whose decision shall be binding on the
parties. Landlord and Tenant shall have five (5) business days to choose an
M.A.I. appraiser familiar with rental rates for Seattle, Washington office
space, and the appraiser shall then have twenty (20) business days to determine
the Market Minimum Rental for the Leased Premises as provided herein. If
Landlord and Tenant are unable to agree on the selection of an M.A.I. appraiser
within such five (5) business days, each party shall have three (3) business
days thereafter to select their own appraiser and such party appraisers shall
have five (5) business days to select a
7
15
third appraiser whose appraisal shall be completed within twenty (20) business
days and shall be determinative of the Market Minimum Rental. The appraiser
shall be instructed to set the Market Minimum Rental based on all relevant
market factors for a new lease and considering the new Base Year for expenses as
set forth in Section 3.3.2.2 and the tenant improvement allowance set forth in
Section 3.3.2.3. Until the Market Minimum Rental is determined as provided
herein, the Tenant shall pay Minimum Rent based on the Market Minimum Rental
specified by the Landlord, and if the Market Minimum Rental is subsequently
determined to be different than the Market Minimum Rental specified by the
Landlord, the Landlord or Tenant, as the case may be, shall reimburse the other
for such difference.
3.3.2.2 Tenant's Share of Excess Expenses payable during
the extended term shall be calculated based on the Base Year of 2001.
3.3.2.3 Landlord shall reimburse Tenant for up to Nine
Thousand Three Hundred Ninety and No/100 Dollars ($9,390.00) for tenant
improvements undertaken by Tenant after Tenant exercises its option to renew the
Lease in accordance with this Section 3.3. Landlord shall pay Tenant's cost of
such improvements upon completion of the tenant improvements and delivery to
Landlord of satisfactory evidence of the cost of such improvements. All such
improvements shall comply with the terms of Sections 10.2 and 10.3 hereof.
3.4 Tenant's Obligations. If the Tenant Improvements, as defined
in Exhibit 3 hereto, are not completed within ninety (90) days of the date
specified in Section 1.1.5(a) due to delays caused by Tenant or Tenant's failure
to fulfill any of its obligations under this Lease (including, without
limitation, Tenant's failure to comply with the plan delivery dates described in
Exhibit 3), Landlord may at its option terminate this Lease. In the event of
termination pursuant to this Section 3.3, Landlord shall retain any monies
previously deposited by Tenant, and the parties shall have no further rights or
obligations hereunder. Landlord shall not be liable or responsible for any
claims, damages, or liabilities in connection with any delay in the completion
of the Tenant Improvements, or any termination of this Lease as a result hereof.
8
16
4. RENT
4.1 Minimum Rent. Commencing on the date set forth in Section 1.1.5(b),
Tenant agrees to pay to Landlord the minimum rent set forth in Section 1.1.7
("Minimum Rent").
4.2 Minimum Rent Increases. The monthly Minimum Rent shall be increased
as set forth in Section 1.1.8, effective on the dates provided therein, and
Tenant shall promptly pay the same.
4.3 Additional Charges. In addition to Minimum Rent (as it may be
increased), Tenant shall also pay, as additional charges, all other sums of
money as shall become due and payable by Tenant to Landlord under this Lease,
including, but not limited to, Tenant's Share of Excess Expenses defined in
Section 5.4 (collectively called "Rent").
4.4 Method of Payment. Tenant shall pay Rent to Landlord in lawful
money of the United States without demand and without any reduction, abatement,
counterclaim or offset at Landlord's address set forth in Section 1.1.15(a) or
to such other person or entity or at such address as may be designated by
Landlord from time to time, as follows:
4.4.1 The Minimum Rent set forth in Sections 1.1.7 and 1.1.8 shall
be due and payable in advance on the first day of each calendar month during the
Lease Term and any extension or renewals thereof.
4.4.2 Except as otherwise expressly provided in this Lease, all
other Rent (including, but not limited to, Tenant's Share of Excess Expenses)
shall be due and payable in twelve (12) equal monthly installments in advance on
the first day of each calendar month during the Lease Term and any extensions or
renewals thereof.
4.5 Prorated Installments. If the Lease Term commences on other than
the first day of a month or ends on other than the last day of a month, then the
Rent provided for herein for such month or months shall be prorated and the
installment or installments so prorated shall be paid in advance.
4.6 Interest and Late Charges. All payments of Rent not received by
Landlord on or before each respective due date
9
17
shall bear interest at an annual rate equal to eighteen percent (18%), from the
date the Rent is due until paid; provided that if the maximum annual rate of
interest permitted by applicable law shall be less than the rate of interest
provided for herein, then all past due payments shall bear interest at the
maximum rate permitted by applicable law from due date until paid. Tenant
acknowledges the late payment by Tenant to Landlord of Rent will cause Landlord
to incur costs not contemplated by this Lease, the exact amount of such costs
being extremely difficult and economically impractical to ascertain. Therefore,
if any payment of Rent due from Tenant is not received by Landlord within ten
(10) days after the due date, Tenant shall pay to Landlord (in addition to the
interest above provided) a late charge of Fifty Dollars ($50.00) or two percent
(2%) of the overdue Rent, whichever shall be greater. The parties agree that
this late charge represents a fair and reasonable estimate of the costs that
Landlord will incur by reason of late payment by Tenant and is in addition to
any interest charges on past due Rent. Acceptance of any late charge shall not
constitute a waiver of Tenant's default with respect to the overdue amount nor
prevent Landlord from exercising any of the other rights and remedies available
to Landlord. The provisions of this Section 4.8 in no way relieve Tenant of the
obligation to payment Rent on or before the due dates.
4.7 Security Deposit. Upon execution of this Lease, Tenant shall
deposit with Landlord as a security deposit the amount set forth in Section
1.1.9. This deposit shall constitute a security deposit for the performance by
Tenant of the provisions of this Lease. If Tenant is in default, Landlord may,
but shall not be obligated to, use the security deposit or any portion of it to
cure Tenant's default or to compensate Landlord for any loss or damage which
Landlord may suffer by reason of Tenant's default. In such event, Tenant shall,
within five (5) days of written demand by Landlord, deposit with Landlord the
amount so applied. The Security Deposit shall not be available to Landlord to
repair ordinary wear and tear to the Premises or to remove any of the approved
Tenant Improvements installed by Tenant. Landlord shall have no obligation to
keep the security deposit separate from its general funds. Tenant shall not be
entitled to interest on the deposit. If Tenant is not in default under this
Lease, then the security deposit or the balance not so used or retained shall be
returned to Tenant within thirty (30) days after the end of the Lease Term. If
Landlord sells, assigns or otherwise transfer its
10
18
interest in this Lease, Landlord shall also transfer the security deposit. On
such transfer, Landlord shall be relieved from all liability for the return of
the deposit, and Tenant shall look solely to the new landlord for the return of
the deposit. Tenant may not assign or encumber its deposit, and Landlord may
treat any attempted assignment or encumbrance as void.
5. TENANT'S SHARE OF EXPENSES
5.1 Direct Expenses. As used in this Lease, "Direct Expenses" shall
mean all costs and expenses (except specific costs which are separately billed
to and paid by specific tenants) of every kind and nature which Landlord shall
pay or become obligated to pay because of or in connection with the ownership,
operation, maintenance and repair of the Property and such additional facilities
now and in subsequent years as may be determined by Landlord to be necessary to
the Property. All such Direct Expenses shall be determined by Landlord in
accordance with generally accepted accounting and management practices which
shall be consistently applied (with reserves appropriate to Landlord's
business). Direct Expenses include but are not limited to the following:
5.1.1 All taxes, payments in lieu of taxes, excises, assessments
(other than assessments that were levied in connection with the original
construction of the Building), levies, fees, charges, general and special,
ordinary and extraordinary, unforeseen as well as foreseen, of any kind which
are assessed, levied, charged, confirmed or imposed by any public authority upon
the Property, its operations or the rent provided for in this Lease (excluding
any income taxes payable by Landlord). If any assessments are payable in annual
installments, Tenant shall be responsible only for the pro-rata portion thereof
due during the Lease Term. Tenant will be directly responsible for all taxes and
assessments or payments in lieu thereof on Tenant's Personal Property, Tenant's
Tenant Improvements and Tenant's Alterations which are not part of the Premises,
as set forth in Section 6;
5.1.2 Costs of all insurance, including but not limited to fire,
casualty, liability and rental abatement insurance applicable to the Property
and Landlord's equipment and other property used in connection therewith;
11
19
5.1.3 All supplies, material and equipment used in the operation
and maintenance of the Property;
5.1.4 Wages, salaries and related expenses and benefits of all
employees engaged in the operation, maintenance and security (if any) of the
Property;
5.1.5 Costs of repairs, replacements and general maintenance
(excluding repairs and general maintenance paid by proceeds of insurance or by
Tenant and third parties, and alterations attributable solely to tenants of the
Property other than Tenant);
5.1.6 Costs of utilities, including water, sewer, trash, power,
heating, lighting, air conditioning and ventilating the entire Property (except
specific costs which are separately billed to and paid by specific tenants).
This is a "full service" Lease and Tenant's utility costs for usage during
Normal Business Hours in the quantities set forth in Sections 8.2.2 and 8.2.3
hereof shall be included in the Direct Expenses (and Excess Expenses after the
Base Year) of the Commercial Complex;
5.1.7 Management costs and the costs of all maintenance, janitorial
and service agreements for the Property and the equipment therein, including,
without limitation, fire and life safety system, alarm service (if any), window
cleaning (if any), and elevator maintenance (if any);
5.1.8 Amortization of capital improvements made to the Property
subsequent to the execution of this Lease which will improve the operating
efficiency of the Property or which may be required by governmental authorities,
provided that amortization of tenant improvements of Tenant or any other tenants
shall not be considered a Direct Expense;
5.1.9 Any license, permit, and inspection fees (except those
incurred in connection with tenant improvement work);
5.1.10 Reasonable reserves as determined by Landlord to cover costs
of long-term programmed maintenance, including but not limited to air
conditioning, heating and elevator maintenance (if any);
12
20
5.1.11 If any equipment, repairs, replacements or improvements are
capital in nature with a useful life in excess of one (1) year, Landlord shall
xxxx Tenant in any one (1) year only that fraction of such cost as represents
the cost divided by the useful life of such repair, capital improvement or
assessment. Such useful life shall be determined by Landlord in accordance with
generally accepted accounting and management practices and the bases of such
determination shall be available to Tenant pursuant to Section 5.5;
5.1.12 Fees, charges and other costs, including management fees,
consulting fees and accounting fees, of all independent contractors engaged by
Landlord or reasonably charged by Landlord if Landlord performs management
services in connection with the Commercial Complex; and
5.1.13 Assessments levied against the Property by the downtown
business association.
5.2 Base Year. The "Base Year" for the purpose of calculating Direct
Expenses for the initial five year term of the Lease shall be the 1996 calendar
year. The Base Year for the extended term of the Lease, if any (as provided in
Section 3.3), shall be 2001.
5.3 Excess Expenses. Excess Expenses with respect to any Expense Year
(defined below) after the initial year of the Lease Term shall be the amount by
which the Direct Expenses for such Expense Year exceed the annualized Direct
Expenses for the Base Year. No Excess Expenses shall be due or payable by Tenant
during the 1996 calendar year. Provided, however, that if the Commercial Complex
is less than ninety-five percent (95%) occupied in the Base Year, Landlord shall
calculate Direct Expenses for 1996 as if the Commercial Complex was ninety-five
percent (95%) occupied. As used herein, "Expense Year" shall mean each twelve
(12) consecutive month period commencing on January 1st of each year.
5.4 Tenant's Share of Excess Expenses. Tenant shall pay to Landlord as
Additional Charges, one twelfth (1/12) of Tenant's Share of Excess Expenses for
each Expense Year on or before the first day of each month of such Expense Year,
in advance, in an amount estimated by Landlord and billed by Landlord to Tenant.
Tenant's Share shall mean the total of Landlord's
13
21
Excess Expenses for the Commercial Complex, multiplied by the percentage set
forth in Section 1.1.4.2 hereof. With reasonable promptness after the expiration
of each Expense Year in which Tenant is obligated to pay Excess Expenses,
Landlord shall furnish Tenant with a statement ("Landlord's Expense Statement"),
setting forth in reasonable detail the Direct Expenses for such Expense Year,
and Tenant's Share. If Tenant's Share exceeds the estimated Excess Expenses paid
by Tenant for such Expense Year, Tenant shall pay to Landlord the difference
between the amount paid by Tenant and Tenant's Share of actual Excess Expenses
within fifteen (15) days after the receipt of Landlord's Expense Statement. If
the total amount paid by Tenant for Excess Expenses for any such Expense Year
shall exceed Tenant's Share of actual Excess Expenses for such Expense Year,
such excess shall be credited against the next installment of estimated Excess
Expenses or other Rent due from Tenant to Landlord hereunder. If any part of the
first or last years of the Lease Term, as extended, includes less than an entire
Expense Year, Tenant's obligations under this Section 5.4 shall be apportioned
so that Tenant shall pay only for such parts of such Expense Year as are
included in the Lease Term. Landlord may, pending the determination of the
amount of actual Excess Expenses for the partial Expense Year in which the term
ends, furnish Tenant with a statement of estimated Excess Expenses and Tenant's
Share thereof for such partial Expense Year. Within fifteen (15) days after
receipt of such estimated statement, Tenant shall remit to Landlord, as
Additional Charges, the amount of Tenant's Share of anticipated Excess Expenses.
After the actual Excess Expenses have been determined, Tenant shall remit the
amount of any underpayment to Landlord within fifteen (15) days of receipt of
Landlord's Expense Statement, and, if there shall have been an overpayment by
Tenant, Landlord shall remit the amount of any such overpayment to Tenant within
fifteen (15) days of the issuance of Landlord's Expense Statement.
5.5 Books of Account. Landlord shall keep full and accurate books of
account covering Direct Expenses and Excess Expenses at the office of Landlord
stated in Section 1.1.15 or another convenient location in Seattle selected by
Landlord. During the term of this Lease, Tenant shall have the right to inspect
such books of account annually at a reasonable time on ten (10) days prior
written notice to Landlord.
6. PROPERTY TAXES
14
22
Tenant shall pay or cause to be paid, before delinquency, any and all taxes
or charges in lieu thereof, levied or assessed and which become payable during
the Term hereof upon Tenant's Personal Property located on the Property and any
Tenant Improvements and Alterations which are not part of the Premises. In the
event any or all such improvements or Personal Property shall be assessed and
taxed with the Building, Tenant shall pay to Landlord Tenant's share of such
taxes within ten (10) days after delivery to Tenant by Landlord of a statement
in writing setting forth the amount of such taxes owed by Tenant.
7. USE AND CARE OF PREMISES
7.1 Permitted Use. The Premises shall be used and occupied by Tenant
solely for the Permitted Use described in Section 1.1.10 and for no other use or
purpose without the prior written consent of Landlord. Tenant agrees that it has
determined to its satisfaction that the Premises can be used for these purposes,
and waives any right to terminate this Lease in the event the Premises cannot be
used for such purposes during the Lease Term.
7.2 Operation. Tenant shall occupy the Premises subject to the
following:
7.2.1 If the Premises are damaged or destroyed or partially taken by
condemnation and this Lease shall remain in full force and effect, Tenant shall
continue the operation of its business at the Premises to the extent reasonably
practical during any period of repair.
7.2.2 If the Premises should be closed and the business of Tenant
temporarily discontinued because of strikes, walkouts, or similar causes beyond
Tenant's control, Tenant shall be temporarily relieved of its obligation to keep
the Premises open for, and to conduct business on, the Premises during the hours
and days specified above; provided that if Tenant's business on the Premises
shall be discontinued for a period of sixty (60) consecutive days by reason of
any such cause beyond Tenant's control, then Landlord may, at its option,
terminate this Lease by written notice to Tenant. Such notice shall be effective
on receipt thereof by Tenant. All Rent owed up to the time of effective date of
such notice shall be paid by Tenant and this Lease shall terminate as of the
effective date of such notice.
15
23
The parties agree that lack of financial resources is not a cause beyond
Tenant's control.
7.3 Insurance. Tenant shall not do, bring, keep or permit anything to
done, brought, or kept in or about the Premises or the Property that will
increase the existing rate of insurance on the Property or any part thereof, or
any of its contents, or that will cause the cancellation of any insurance
policies covering the Premises, the Property, any part, or any of the contents
thereof. If any insurance premium is increased as a result of Tenant's use or
activity, Tenant shall pay the increase within ten (10) days after receipt of
Landlord's invoice therefor.
7.4 Disturbance of Other Occupants. Tenant shall conduct its business
and control its agents, employees, contractors and invitees in such a manner as
not to obstruct or interfere with the rights of other tenants or occupants of
the Building or injure, annoy or disturb them. Tenant shall not use or allow the
Premises to be used for any improper, unlawful, disreputable or objectionable
purpose, nor shall Tenant cause or permit any nuisance in, on or about the
Premises or the Property, nor do or permit anything to be done in the Premises
at any time which impairs the character and reputation of the Commercial Complex
as a first-class retail and office complex as reasonably determined by Landlord.
7.5 Care of the Premises. Tenant's taking possession of the Premises
shall constitute Tenant's acknowledgment that the Premises are in good condition
and repair; provided, however, that the foregoing acknowledgement shall not
limit Landlord's obligations of maintenance and repair set forth in this Lease.
Tenant shall take good care of the Premises and shall not commit or suffer to be
committed any waste, damage or injury to the Premises or the Property.
7.6 Compliance with Rules and Regulations. The Rules and Regulations
attached to this Lease as Exhibit 4 are a part of this Lease and Tenant shall
comply with them. Landlord shall have the right from time to time to promulgate
amendments and additional rules and regulations for the safety, care and
cleanliness of the Premises and the Property, and for the preservation of good
order. On delivery of a copy of such amendments and additional rules and
regulations to Tenant, Tenant shall comply with them, and a violation of any of
them shall
16
24
constitute a default by Tenant under this Lease. The Rules and Regulations are
not made to restrict Tenant unnecessarily, but to enable Landlord to operate the
Property in a way which will be beneficial and advantageous to both parties. If
there is an express and direct conflict between the Rules and Regulations and
any of the provisions of this Lease, the provisions of the Lease shall control.
Landlord shall not be liable to Tenant or to any third parties for failure of
other tenants and occupants of the building to perform or observe the Rules and
Regulations.
7.7 Signs. Landlord will include Tenant's name on the existing building
directory located in the lobby of the Post Alley entrance, and will provide, at
Landlord's expense, signage indicating Tenant's name on the exterior of the
doors of the Building on Post Alley and Seneca Street. All such signage shall be
of a size, style and character consistent with existing signage at those
locations and consistent with the character of the building and the
neighborhood. At Tenant's expense, Tenant may install a sign bearing its name on
the exterior of the building at Post Alley and Seneca Street of a size, style
and character comparable to the existing signage at such location for the tenant
Xxxxxxx Xxxx & Associates. Tenant shall submit the design and placement of such
signage to Landlord in advance for Landlord's approval. Tenant shall not place
upon or install in windows, walls or exterior doors of the Premises or any part
of the Premises visible from the exterior of the Premises any signs, symbols,
canopies, awning, window coverings or other advertising or decorative material
without obtaining the prior written consent of Landlord.
7.8 Compliance with Laws. Tenant shall not use the Premises or suffer
or permit anything to be done in or about the Premises or the Property at any
time which will in any way conflict with any judicial decision, constitution,
statute, ordinance, resolution, regulation, rule, administrative order, or other
requirement of any municipal, county, state, federal, or other governmental
agency or authority having jurisdiction over the parties, the Premises or the
Property in effect now or at any time during the Lease Term, including, without
limitation, any regulation or order of a quasi-official entity or body such as a
board of fire examiners, underwriters or public utility. Tenant shall, at its
sole cost and expense, promptly comply with all laws relating to or affecting
the condition, use or occupancy of the Premises, except that Tenant shall not be
required to make any
17
25
repairs, alterations or additions to the roof, foundations, bearing walls or
other structural parts of the Property ("structural alterations") required by
law or to cure a violation of codes or laws existing prior to the Occupancy
Commencement Date. Landlord shall make or cause to be made structural
alterations required by law provided that if such structural alterations are
required as a result of Tenant's particular and specific use of the Premises at
the time, Tenant shall pay all costs and expenses incurred by Landlord in making
such structural alterations within ten (10) days after receipt of Landlord's
invoice therefor. Tenant shall pay all the costs, expenses, fines, penalties and
damages which may be imposed upon Landlord by reason of or arising out of
Tenant's failure to fully and promptly comply with and observe the provisions of
this Section 7.8.
7.9 Hazardous Material.
7.9.1 Tenant's Obligations. As used herein, the term "Hazardous
Material" means any hazardous, dangerous, toxic or harmful substance, material
or waste which is or becomes regulated by any local governmental authority, the
State of Washington or the United States Government. Tenant shall not cause or
permit any Hazardous Material to be brought upon, kept or used in or about the
Premises by Tenant, its agents, employees, contractors or invitees, without the
prior written consent of Landlord. If Tenant breaches the obligations stated in
the preceding sentence, or if the presence of Hazardous Material on the Premises
caused or permitted by Tenant results in contamination of the Premises or any
part of the Building, or if contamination of the Premises or any part of the
Building by Hazardous Material otherwise occurs for which Tenant is legally
liable to Landlord for damage resulting therefrom, then Tenant shall indemnify,
defend and hold Landlord harmless for any and all claims, judgments, damages,
penalties, fines, costs, liabilities or losses (including, without limitation,
diminution in value of the Property, damages for the loss or restriction on use
of rentable or usable space, or of any amenity of the building or the Premises,
damages arising from any adverse impact on marketing of space at the Building,
and sums paid in settlement of claims, attorneys' fees, consultant fees and
expert fees) which arise during or after the Lease Term as a result of such
contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions, or any clean-up, remedial, removal or restoration work required by
any federal,
18
26
state or local governmental agency or political subdivision because of Hazardous
Material present in the soil or ground water on or under the Building, without
limiting the foregoing, if the presence of any Hazardous Material on the
Premises caused or permitted by Tenant results in any contamination of the
Premises or any part of the Building. Tenant shall promptly take all actions at
its sole expense as are necessary to return the Premises and the Building to the
condition existing prior to the introduction of any such Hazardous Material
caused or permitted by Tenant; provided that Landlord's approval of such actions
shall first be obtained, which approval shall not be unreasonably withheld or
delayed so long as such action would not potentially have any material adverse
long-term or short-term effect on the Premises or the Building.
7.9.2 Landlord's Obligation. If the presence of Hazardous
Materials on the Premises caused or permitted by Landlord (and not caused by
Tenant) results in contamination of the Premises or any part of the Building, or
if contamination of the Premises or any part of the Building by Hazardous
Materials otherwise occurs for which Landlord is legally liable to Tenant for
damage resulting therefrom, then Landlord will remove or encapsulate such
Hazardous Materials, at its sole cost and expense, as necessary to correct such
contamination or comply with applicable laws and regulations.
8. LANDLORD MAINTENANCE; SERVICES AND UTILITIES
Landlord covenants and agrees with Tenant that so long as Tenant is not
in default of any of its obligations under this Lease, Landlord shall undertake
the following:
8.1 Maintenance. Landlord shall maintain or cause to be maintained
in reasonably good order and condition the Premises and the Common Areas,
including lobbies, stairs, restrooms, the central heating, ventilation and air
conditioning system, water, sewer, fire protection and mechanical and electrical
distribution systems and equipment serving the Property and the structural
portions of the Property. Any injury to or interference with Tenant's business
arising from any repairs, maintenance, alteration or improvement in or to any
portion of the Property, including the Premises, or in or to the fixtures,
appurtenances and equipment therein, shall not be deemed to be an eviction of
Tenant or relieve Tenant of any of its obligations hereunder, it
19
27
being agreed that such repairs, maintenance, alterations and improvements will
be accomplished with as little inconvenience to Tenant as reasonably possible.
The costs of any maintenance of or repairs to the Premises provided or caused to
be provided by Landlord which are in addition to the maintenance and repair
services ordinarily provided to tenants in the Commercial Complex will be paid
in the manner provided for payment of extra electricity in Section 8.2.3 of this
Lease.
8.2 Other Services and Utilities. Landlord shall:
8.2.1 Furnish or cause to be furnished janitorial services to the
Premises Monday through Thursday and Sundays (excluding legal holidays) of the
kind and with the frequency that such services are, in Landlord's judgment,
customarily furnished to tenants in comparable retail buildings in the immediate
marketing area. Such janitorial services shall include lamp replacement service
for Building Standard light fixtures, rest room supplies and exterior window
washing at reasonable intervals. The cost of any janitorial services that are
provided or caused to be provided by Landlord which are in addition to service
ordinarily provided to tenants in the Commercial Complex shall be paid in the
manner provided for the payment of extra electricity in Section 8.2.3 of this
Lease.
8.2.2 Provide or cause to be provided HVAC required in Landlord's
judgment for the comfortable use and occupancy of the Premises during Normal
Business Hours set forth in Section 1.1.11 of this Lease.
8.2.3 Furnish or cause to be furnished to the Premises during
Normal Business Hours electricity for lighting and the operation of low power
usage office machinery, and water, both in quantities usually furnished or
supplied by Landlord to tenants leasing space in the Commercial Complex. The
cost of furnishing HVAC, electricity and water in the quantities set forth in
Sections 8.2.2 and this Section 8.2.3 during Normal Business Hours shall be
included in Direct Expenses (as defined in Section 5.1).
8.2.4 The Building's mechanical system is designed to accommodate
heating loads generated by lights and equipment using up to two and one-half
(2.5) xxxxx per square foot. Before installing lights and equipment in the
Premises which in the
20
28
aggregate would exceed such amount, Tenant shall obtain the prior written
consent of Landlord. Landlord may refuse to grant its consent unless Tenant
agrees to pay the costs of installing supplementary air conditioning capacity or
electrical systems necessitated by such equipment or lights. In addition, Tenant
shall, on the first day of each month during the Lease Term, pay Landlord in
advance the reasonable amount estimated by the Landlord as the cost of (i)
furnishing electricity for the operation of such equipment or lights, (ii)
operating and maintaining supplementary air conditioning units necessitated by
Tenant's use of such equipment or lights, and (iii) electricity and HVAC to
Tenant during other than Normal Business Hours. Landlord shall be entitled to
install and operate at Tenant's cost a monitoring/metering system in the
Premises to measure the added demands on electricity and the HVAC systems
resulting from such equipment and lights and from Tenant's HVAC or electricity
requirements during other than Normal Business Hours. Tenant shall comply with
Landlord's instruction for the use of drapes, blinds and thermostats in the
Building.
8.2.5 Furnish elevator service, which shall mean service by
nonattended automatic elevators.
8.2.6 Maintain or cause to be maintained in the lobby of the
Property a directory board which shall include the name of Tenant.
8.3 Tenant's Negligence. Tenant has a positive obligation to care for
the Premises as set forth in Section 7.5. In the event any repair or maintenance
described in Section 8.1 is occasioned by the act, omission, or neglect of
Tenant or any persons who may be in or upon the Premises or the Property with
the express or implied consent of Tenant (including Tenant's officers,
contractors, agents, invitees, guests and employees), Tenant shall pay Landlord
the costs of such maintenance and repair on Landlord's demand.
8.4 Landlord's Negligence. Landlord shall not be in default under this
Lease and shall not be liable to Tenant for any loss or damage to person or
property, or any inconvenience or interference with Tenant's business caused by
or resulting from Landlord's failure to perform its obligations under Section
8.1 unless such failure shall persist, due to Landlord's negligence,
21
29
for an unreasonable period of time after written notice of the need for repair
or maintenance has been given by Tenant to Landlord.
8.5 Rent. There shall be no abatement of rent (except as provided in
Sections 13.4 and 14.6) and Landlord shall not be liable or responsible to
Tenant for any loss or damage to person or property or for inconvenience to, or
interference with Tenant which may arise through repair, maintenance or
alteration of any part of the Property.
8.6 Failure or Interruption of Services. Landlord does not warrant that
any of the services and utilities described above will be free from variation,
interruption, or failure. Should any of the facilities utilized in bringing the
above-described services to the Premises break down, or for any cause cease to
function properly, Landlord shall use reasonable diligence to repair the same
promptly, but Tenant shall have no right to terminate this Lease, and shall have
no claim for rebate of Rent or for damages directly or indirectly caused by or
resulting from:
8.6.1 The installation, use or interruption of use of any equipment
in connection with the furnishing of any of the foregoing utilities or services.
8.6.2 The failure to perform or furnish, or the delay in performing
or furnishing, any such maintenance, repair, utilities or services where such
failure or delay is caused by acts of God, the elements, labor disturbances of
any character, any other accidents or other conditions beyond the reasonable
control of Landlord, or by the making of repairs or improvements to the Premises
or the Building; or
8.6.3 The limitation, curtailment, rationing or restriction of use
of water or electricity, gas or any other form of energy or any other service or
utility serving the Premises or the Property. Landlord shall be entitled to
cooperate voluntarily in a reasonable manner with the efforts of national, state
or local government agencies or utility suppliers in reducing energy or other
resource consumption.
8.7 Waiver of Self Help and Deduct. Tenant waives the right to make
repairs at Landlord's expense under any law,
22
30
statute, ordinance now or hereafter in effect.
9. COMMON AREAS
9.1 Definition. The term "Common Areas" means those parts of the
Property in which the Premises are located and related areas and facilities
outside the Premises that are provided and designated by Landlord from time to
time for the general use and convenience of Tenant and of other tenants of the
Building and their respective authorized representatives, guests and invitees.
Common Areas may include, without limitation, designated pedestrian walkways and
patios, landscaped areas, public lobbies, elevators, sidewalks, loading areas,
parking areas, service corridors, rest rooms, stairways, arcades and roads, and
mechanical, telephone and electrical rooms.
9.2 License. Landlord gives to Tenant and its agents, employees,
contractors, authorized representatives, invitees and guests, the nonexclusive
right to use the Common Areas with others who are entitled to use the Common
Areas, subject to Landlord's rights to:
9.2.1 Establish and enforce reasonable rules and regulations
applicable to all tenants concerning the maintenance, management, use and
operation of the Common Areas;
9.2.2 Close any of the Common Areas to the extent required in the
reasonable opinion of Landlord to prevent a dedication of any of the Common
Areas or the accrual of any rights of any person or of the public to the Common
Areas;
9.2.3 Close temporarily any of the Common Areas for purposes of
cleaning, maintenance, repair, alterations, improvements or additions;
9.2.4 Designate other property to become part of the Common Areas;
and
9.2.5 Makes changes to the Common Areas including, without
limitation, changes in the arrangement and/or location of passageways, doors,
doorways, corridors, elevators, stairs, or toilets; provided, however, Landlord
shall not make any change which will prevent access to the Premises.
23
31
10. IMPROVEMENTS AND ALTERATIONS TO THE PREMISES
10.1 Initial Improvements. The design and construction of, and
payment for, all initial leasehold improvements to the Premises ("Tenant
Improvements") shall be as provided in Exhibit 3.
10.2 Alterations. After the completion of Tenant Improvements,
Tenant may make, at its expense (except as provided in Section 3.3.2.3), such
non-structural alterations, additions and improvements (collectively called
"Alterations") to the interior of the Premises during the term of this Lease
that Tenant requires in order to use the Premises for the Permitted Use,
provided that the following requirements have first been satisfied:
10.2.1 Tenant shall submit to Landlord reasonably detailed
final plans and specifications and working drawings of the proposed Alterations,
and the name of Tenant's proposed contractor who must provide Landlord with a
Certificate of Insurance covering Contractor's Liability, Workmen's Compensation
and Property Damage, and naming Landlord as additional insured. Said Certificate
shall be issued prior to the commencement of the Alterations.
10.2.2 Landlord shall have given Tenant written notice of
Landlord's approval of said final plans, specifications, working drawings, the
proposed contractor, and insurance carried by the proposed contractor. Landlord
shall be deemed to have approved said plans, specifications, drawings,
contractor and insurance if Landlord has not disapproved the same within ten
(10) business days after Landlord receives them. Landlord may withhold its
approval for any reason which Landlord deems sufficient, but shall give Tenant
written notice of the reasons for Landlord's disapproval.
10.2.3 The Alterations shall be approved by all appropriate
government agencies and all applicable permits and authorizations shall be
obtained before commencement of any Alterations.
10.2.4 Prior to the commencement of construction of any
Alterations which will cost more than $5,000.00 (exclusive of the costs of
decorating work and items constituting Tenant's
24
32
Property), as estimated by a reputable contractor designated by Landlord, Tenant
as its sole cost shall cause its selected contractor to furnish to Landlord a
performance and completion bond (issued by a corporate surety or an insurance
company qualified to do business in the State of Washington) in a sum equal to
one hundred twenty-five percent (125%) of the estimated cost of such Alterations
(as determined by the construction contract between Tenant and its contractor)
guaranteeing the completion of such Alterations free and clear of all liens and
other charges in accordance with the plans and specifications approved by
Landlord.
10.2.5 Tenant's Contractor shall carry the minimum liability
limits as specified for Tenant in Section 1.1.14 of the Lease.
Alterations shall be completed with due diligence in compliance with all
applicable laws, with plans, specifications and working drawings approved by
Landlord, and by the contractor approved by Landlord.
10.3 Rules and Regulations. All work by Tenant or Tenant's
contractor shall be done in compliance with the Rules and Regulations attached
as Exhibit 4 to this Lease. All debris, trash, refuse and waste materials shall
be stored only within the Premises and shall be regularly removed therefrom by
Tenant at its cost. All Alterations shall be made in a manner that will not
unreasonably disturb or interfere with other tenants in the Building. Tenant
shall also comply with the use restrictions set forth in the Declaration of
Condominium for the Building attached hereto as Exhibit 5.
10.4 Landlord's Property. All Tenant Improvements and Alterations
(expressly including without limitation all light fixtures and floor coverings,
but expressly excluding any unattached trade fixtures, appliances, and equipment
which do not become a part of the Premises) shall become the property of
Landlord and shall remain on and be surrendered with the Premises on expiration
or earlier termination of the Lease, except that Landlord may, at the time of
Landlord's approval of Alterations as set forth in Section 10.2.2 above,
identify any Alterations which Tenant shall be required to remove upon
expiration or termination of the Lease Term, and Tenant shall remove the same
and, at its sole cost and expense, shall repair and restore the Premises to
25
33
its standard condition. For purposes of this Section, "standard condition" means
the Premises with the Tenant Improvements described in Exhibit 3, reasonable
wear and tear excepted.
10.5 Locks, Plumbing and Wiring. Tenant shall not make changes to
locks on doors or add to, disturb or in any way change any plumbing or wiring
without the prior written consent of Landlord and in accordance with the
requirements of this Section.
11. LIENS
11.1 Mechanics' Liens. Tenant shall keep the Premises and the
Property free and clear from any liens or lien claims arising out of work
performed, materials furnished or obligations incurred by or on behalf of
Tenant. Tenant shall indemnify and hold Landlord harmless from any liability for
losses or damages resulting directly or indirectly from any such liens or lien
claims and from any work performed on or about the Premises by Tenant, its
agents, employees, contractors or subcontractors. If any lien or lien claim is
filed against any part of the Property (including the Premises) by any person
claiming by, through or under Tenant, Tenant shall, upon request of Landlord at
Tenant's expense, immediately furnish to Landlord a bond in form and amount and
issued by a surety satisfactory to Landlord indemnifying Landlord and the
Property against all liability, cost and expenses, including attorneys' fees,
which may result therefrom. If such bond has been furnished to Landlord, Tenant,
at its sole cost and expense and after written notice to Landlord, may contest
by appropriate proceeding conducted in good faith and with due diligence any
lien, encumbrance or charge against the Premises arising from work done or
materials provided to or for Tenant if such proceedings suspend the enforcement
and collection of the lien or lien claim and neither the Premises nor any part
of the Property nor any interest therein is or will be in any danger of being
sold, forfeited or lost.
11.2 Landlord's Lien. In addition to any statutory lien for rent in
Landlord's favor, Landlord shall have and Tenant hereby grants to Landlord a
continuing security interest for all rentals and other sums of money becoming
due hereunder from Tenant, upon all fixtures, furniture, and inventory,
including all proceeds thereof, of Tenant situated on the Premises, and such
property shall not be removed therefrom without the consent of Landlord until
all arrearages in rent as well as any and all other
26
34
sums of money then due to Landlord hereunder shall first have been paid and
discharged. In the event of a default under this Lease, Landlord shall have, in
addition to any other remedies provided herein or by law, all rights and
remedies under the Uniform Commercial Code, including without limitation the
right to sell the property described in this Section 11.2 at public or private
sale. Tenant hereby agrees to execute such financing statements and other
instruments necessary or desirable in Landlord's discretion to perfect the
security interest hereby created. Any statutory lien for rent is not hereby
waived, the express contractual lien herein granted being in addition and
supplementary thereto.
27
35
12. INSURANCE AND INDEMNIFICATION
12.1 Indemnification. Landlord shall not be liable for injury to
any person, or for the loss of or damage to any property (including property of
Tenant) occurring in or about the Leased Premises from any cause whatsoever,
except, and to the extent of any loss or damage caused by Landlord's gross
negligence or willful misconduct. Notwithstanding anything in this Lease,
Landlord shall in no event be liable to Tenant for any damage to the Premises
for any loss, damage or injury to any Property in or on the Premises occasioned
by bursting, rupture, leakage, or overflow of any plumbing or other pipes
(including but not limited to water, steam and/or refrigerant lines),
sprinklers, tanks, drains, drinking fountains or wash stands or other similar
cause in, above, upon or about the Premises or the Property. Except to the
extent caused by Landlord's negligence or willful misconduct, Tenant shall
defend, indemnify and hold Landlord harmless from and against any and all
claims, charges, liabilities, obligations, penalties, damages, costs and
expenses (including attorneys' fees) arising, claimed, charged or incurred
against, or by Landlord from any matter or thing arising from Tenant's use of
the Premises, the conduct of its business or from any activity, work or other
things done, permitted or suffered by Tenant in or about the Premises, and
Tenant shall further indemnify and hold Landlord harmless from and against any
and all claims arising from any breach or default in the performance of any
obligation on Tenant's part or to be performed under the terms of the lease, or
arising from any act or negligence of Tenant, or any officer, agent, employee,
guests, or invitee of Tenant, and from all costs, attorneys' fees, and
liabilities incurred in or about the defense of any such claim or any action or
proceeding is brought against Landlord by reason of such claim, Tenant, upon
notice from Landlord, shall defend the same at Tenant's expense by legal counsel
reasonably satisfactory to Landlord.
12.2 Concurrent Negligence. In the event of concurrent negligence
of Tenant, its agents, employees, sublessees, invitees, licensees or contractors
on the one hand, and that of Landlord, its partners, agents, employees or
contractors on the other hand, which concurrent negligence results in injury or
damage to persons or property and relates to the construction, alteration,
repair, addition to, subtraction from, improvement to or maintenance of the
Premises or the Building, Tenant's obligation to indemnify Landlord as set forth
in this Section 12.2 shall be limited to the
28
36
extent of Tenant's negligence, and that of its agents, employees, sublessees,
invitees, licensees, or contractors, including Tenant's proportional share of
costs, and attorneys' fees and expenses incurred in connection with any claim,
action or proceeding brought with respect to such injury or damage. Tenant
hereby agrees to waive its immunity under Industrial Insurance, Title 51 of the
Revised Code of Washington, but only to the extent required so that Tenant shall
be obligated to indemnify Landlord, its partners, agents, employees or
contractors as set forth in this Section 12.2. Tenant and Landlord further agree
that this indemnification provision was specifically negotiated and agreed to by
the parties hereto. None of the events or conditions set forth in this Section
shall be deemed constructive or actual eviction or entitle Tenant to any
abatement or reduction of rent.
12.3 Liability Insurance. Tenant shall, at its own cost and
expense, keep and maintain in full force and effect during the Lease Term, a
policy of comprehensive general liability insurance insuring Tenant's activities
with respect to the Premises against loss, damage or liability for personal
injury or death or loss or damage to property with the limits set forth in
Section 1.1.14. For such policies with a general aggregate limit such general
aggregate limit shall be not less than Two Million Dollars ($2,000,000) with the
occurrence limit not less than One Million Dollars ($1,000,000). In the event
Tenant obtains a policy with the general aggregate limit, Tenant shall
immediately notify Landlord if claims covered by such policy or policies at any
time are made against Tenant which claims exceed fifty percent (50%) or more of
the aggregate limit. Notwithstanding the foregoing, if during the Lease Term, in
Landlord's reasonable judgment, the policy limits required hereunder are no
longer adequate to provide reasonable protection to Landlord, Landlord may
notify Tenant of such inadequacy and an appropriate level of coverage, and
Tenant within thirty (30) days of receiving such a notice, shall obtain such
additional amounts of insurance and provide Landlord with satisfactory evidence
thereof. Reference may be made to policy amounts required by other landlords for
similar space of similar quality in the immediate market area in determining
what is reasonable protection thereunder.
12.4 Property Insurance. During the Lease Term, Tenant shall also
maintain, at its own cost and expense, property insurance covering the
furniture, fixtures and equipment in an amount equal to ninety percent (90%) of
the replacement cost
29
37
thereof.
12.5 Policy Requirements. The insurance required under this Section
12 shall be with companies rated A-VIII or better in Best's Insurance Guide (or
such comparable or better rating as selected by Landlord in the event of a
change in rating designations). Landlord and its managing agent shall be named
as an additional insured. The insurance policy shall bear an endorsement that
the policy shall not be cancelled or the policy limits reduced below the
coverage required by this Lease for any reason other than non-payment of
premiums except upon forty-five (45) days prior written notice to Landlord, and
only after ten (10) days prior written notice to Landlord for non-payment of
premiums.
12.6 Delivery of Policies. Tenant shall deliver to Landlord upon
the Commencement Date, and thereafter, not less than five (5) days before the
expiration of any expiring policies, and from time to time thereafter as
requested by Landlord copies of all policies of such insurance or certificates
thereof showing Landlord as an additional insured and the applicable policy
limits thereof. In no event shall the limits of such policies be considered as
limiting the liability of Tenant under the Lease.
12.7 Failure to Maintain. If Tenant fails or refuses to maintain
any insurance required by this Section 12, Landlord, at its discretion, may
obtain and maintain insurance for such items and interests to protect Landlord
in such amounts as Landlord may determine to be appropriate to protect Landlord,
and any and all premiums paid or payable by Landlord therefor shall be deemed to
be Additional Charges and shall be due on the payment date of the next
installment of Rent due hereunder. The failure to obtain or maintain any
insurance required by this Section shall constitute a default under the Lease.
12.8 Waiver of Subrogation. Landlord and Tenant hereby mutually
release each other from liability, and waive all right of recovery against each
other for any loss or damage to any building, structure or other tangible
property, or any resulting loss of income, or losses under workers' compensation
laws and benefits, whether due to negligence or any other cause, if such loss or
damage is covered by insurance benefiting the party suffering such loss or
damage, or was required to be covered by the Lease; provided that this Section
12 shall be inapplicable if
30
38
it would have the effect, but only to the extent it would have the effect, of
invalidating any insurance coverage of Landlord or Tenant.
12.9 Landlord's Insurance. Landlord agrees to maintain or cause to
be maintained policies of insurance for the full replacement value of the
Building insuring the Building against the perils of fire. Notwithstanding the
foregoing, if during the Lease Term and in Landlord's reasonable judgment the
policy limits set forth hereunder are no longer adequate or no longer necessary
to provide reasonable protection to Landlord or the Building, Landlord may so
notify Tenant and modify its insurance accordingly. Reference may be made to
policy amounts and coverages maintained by other landlords for buildings of a
similar quality in the immediate market area in determining what is reasonable
protection thereunder. The requirements of any lender of Landlord holding a
security interest in the Building shall also be considered in determining what
is reasonable protection thereunder. Subject to the provisions of 12.8 hereof,
such insurance shall be for the sole benefit of Landlord and under its sole
control.
13. CASUALTY DAMAGE OR DESTRUCTION
13.1 Obligation to Repair. Subject to the provisions of Sections
13.2 and 13.3, if the Premises or the Property are damaged by fire or other
casualty, Landlord shall repair or cause the same to be repaired.
31
39
13.2 Option to Repair. Repair shall be at the option of Landlord if
insurance proceeds sufficient to pay the costs of repair are for any reason
unavailable, or if Landlord determines that such repairs cannot be made within
ninety (90) days from the date repair work begins. Landlord shall have the
option ("Landlord's Option") within ninety (90) days after the date of such
damage (except as otherwise provided herein) either to: (a) notify Tenant of
Landlord's intention to repair such damage and diligently undertake such repair,
in which event this Lease shall continue in full force and effect subject to the
Rent adjustment provisions of Section 13.4; or (b) notify Tenant of Landlord's
election to terminate this Lease as of the date specified in such notice, which
date shall be not less than thirty (30) nor more than sixty (60) days after
notice is given. If Landlord estimates that repairs cannot be completed within
one hundred eighty (180) days from the date such repair work begins, Landlord
shall, within ninety (90) days from the date of such damage, notify each tenant
whose premises are so affected, stating the period of time which Landlord
estimates will be required to complete the repair ("Landlord's Notice"). Each
such tenant shall thereafter have the option to terminate its lease by
delivering written notice of the exercise of the option to terminate ("Tenant's
Notice") to Landlord within thirty (30) days from the date such tenant receives
Landlord's Notice. Within thirty (30) days after the expiration of the time
within which any such tenant may give Tenant's Notice, Landlord shall exercise
Landlord's Option to repair or terminate.
13.3 Right to Terminate. If the Building shall be so damaged
(whether or not the Premises shall be affected) that the owner or owners of the
Building (or the condominium units then comprising the Building) shall decide
not to repair or restore, or shall decide to demolish or to completely rebuild
the building in such a way as to alter the Premises materially, Landlord may,
within ninety (90) days after the date of such damage (or such later date as
such decision shall be made in cases where the decision must be made by the
owners of such condominium units), terminate this Lease by written notice to
Tenant as of the date specified in such written notice, which date shall be not
less than thirty (30) nor more than sixty (60) days after notice is given.
13.4 Rent. Until repairs are completed, or until termination of this
Lease is effective, whichever may be the case,
32
40
Minimum Rent shall be abated in the same proportion as the Rentable Area of the
Premises which Landlord reasonably determines is unfit for occupancy bears to
the Rentable Area of the Premises prior to the damage. There shall be no
abatement of Minimum Rent if the damage was caused in whole or in part by the
act or omission of Tenant, its agents, employees, licensees, contractors or
invitees. If this Lease shall be terminated as provided in this Section 13,
Minimum Rent (as so abated and adjusted) shall be prorated to the effective date
of termination, and if not paid prior to termination, Tenant's obligation to pay
the same shall survive any termination of this Lease. Landlord shall refund to
Tenant any unearned Rent previously paid to Landlord.
13.5 Scope of Repairs. If Landlord is obligated or elects to repair
the Premises or the Property, modifications to conform to then applicable
governmental rules and regulations or then available means of construction may
be made. Landlord will not carry insurance of any kind on Tenant's trade
fixtures, equipment, furniture, furnishings or other personal property and has
no obligation to repair or replace any of them.
14. CONDEMNATION
14.1 Definitions.
14.1.1 "Condemnation" means (a) the exercise of any
governmental power to acquire property, whether by legal proceedings or
otherwise, by a condemnor and (b) a voluntary sale or transfer of property to
any condemnor either under threat of the exercise of such governmental power or
while legal proceedings for the exercise of such governmental power are pending.
14.1.2 "Condemnor" means any public or quasi-public authority
or private corporation or individual having the power of Condemnation.
14.1.3 "Date of Taking" means the date the Condemnor has the
right to possession of the property being condemned.
14.2 Total Taking. If all of the Premises or such portions of the
Building as are required for the reasonable use of the Premises are taken by
Condemnation, this lease shall automatically terminate as of the Date of Taking
and Rent shall be
33
41
paid to that date by Tenant.
14.3 Partial Taking. If a portion of the Property is taken by
Condemnation (whether or not the Premises are affected) and (i) Landlord (or the
owners of the condominium units then comprising the Property) determine that the
remaining portions cannot be economically and effectively used by it (or them)
or (ii) if the Property or any part thereof has been submitted to the Horizontal
Property Regimes Act and such Condemnation results in a termination of the
condominium pursuant to the condominium declaration or (iii) in the opinion of
Landlord (or the owners of the condominium units then comprising the Property)
the Building should be restored in such a way as to alter the Premises
materially, then Landlord shall have the option to terminate this Lease. If a
portion of the Premises is taken by Condemnation, this Lease shall automatically
terminate as to the portion so taken as of the Date of Taking. If the portion of
the Premises taken renders the remaining portion untenable and unusable by
Tenant, Tenant shall have the option to terminate this Lease.
14.4 Restoration and Repair. If a portion of the Premises shall be
so taken and neither party shall elect to terminate this Lease, then Landlord
shall, to the extent of severance damages received by Landlord and equitably
allocated by Landlord among the Premises and other portions of the Property,
repair the damage to the Premises at Landlord's cost and expense; provided,
however, that Landlord shall have no obligation to repair or replace any Tenant
Improvements, Alterations or Tenant's Personal Property, and any sums received
by Tenant as a result of the taking shall be applied by it to restoration and
repair of same.
14.5 Exercise of Options. If either party elects to exercise any
option to terminate the Lease under this Section 14, it shall do so by giving
written notice of the election to the other party not later than ninety (90)
days after the date the nature and the extent of the taking by Condemnation have
been finally determined (whether by issuance of a certificate of public use and
necessity or its equivalent by a court or other tribunal having jurisdiction
over the Property or otherwise), and if such notice is so given, this Lease
shall terminate on the earlier of the date stated in the Notice or the Date of
Taking; provided, however, that the time for Landlord to give such notice shall
be extended until such time as the owners of the condominium units,
34
42
if any, then comprising the Building have reached a decision regarding
disposition of those portions of the Building not taken by Condemnation.
14.6 Unearned Rent and Rent Adjustment. If this Lease shall be
terminated as provided in this Section 14, Rent shall be prorated to the
effective date of termination, and Tenant's obligation to pay such prorated Rent
shall survive any termination of this Lease. Landlord shall refund to Tenant any
unearned Rent previously paid to Landlord. If this Lease shall not be so
terminated, Minimum Rent shall be reduced effective on the Date of Taking in the
same proportion that the Rentable Area of the portion of the Premises taken or
rendered untenable by such Condemnation bears to the Rentable Area of the
portion of the Premises immediately prior to the taking (provided that if
circumstances make abatement based on square footage unreasonable, Minimum Rent
shall be abated by a reasonable amount to be determined by Landlord), and
Tenant's Share of Direct Expenses shall be recalculated effective on the Date of
Taking.
14.7 Award. All damages, compensation and any other proceeds from or
for the taking or damaging of all or any part of the Property or the Premises,
including, without limitation, any award made for the value of the leasehold
estate created by the Lease (the "Award") shall belong to and be the property of
Landlord, and Tenant hereby assigns to Landlord any and all claims to the Award
except that Tenant shall be entitled to receive from the Award a sum equal to
the lesser of (a) the unamortized cost of any Tenant Improvements and
Alterations to the Premises paid for by Tenant which are taken by Condemnation
or (b) the amount by which such Tenant Improvements and Alterations paid for by
Tenant have enhanced the value of the property taken by Condemnation, subject
however to the rights and claims of the holders or any mortgages or deeds of
trust on the property taken by Condemnation. Nothing contained herein shall be
construed as precluding Tenant from asserting any claim for damages which Tenant
may have against the Condemnor for the disruption or relocation of Tenant's
business on the Premises or for damages to any trade fixtures, equipment,
furniture or furnishings owned by Tenant.
14.8 Temporary Taking. The taking of all or any part of the Premises
or the Property by military or other public authority shall not constitute a
taking by Condemnation unless the use and occupancy by the taking authority
continues for longer
35
43
than one hundred eighty (180) consecutive days. During the 180-day period, all
the provisions of this Lease shall remain in full force and effect except that
Minimum Rent shall be abated or reduced during such period of taking based on
the extent to which the taking interferes with Tenant's use of the Premises.
Landlord shall be entitled to whatever award may be paid for the use and
occupation of the Premises for the period involved.
15. ASSIGNMENT AND SUBLETTING
15.1 General. Tenant shall not voluntarily assign, encumber,
mortgage, pledge, hypothecate, or otherwise transfer or dispose of this Lease or
all or any part of its interest in this Lease or the Premises, or sublease all
or any part of the Premises, or allow any other person (except Tenant's
authorized representatives) to occupy or use all or any part of the Premises,
without first obtaining Landlord's written consent, which consent shall not be
unreasonably withheld. Provided, however, Tenant may sublet a portion of the
Premises to an affiliated entity, defined as an entity over which Tenant or Xxx
Fine has majority ownership and control, provided that Tenant gives Landlord
written notice of such sublease and provided such affiliate complies with the
covenants and restrictions of this Lease, including Section 1.1.10 concerning
use of the Premises. Any other voluntary assignment, encumbrance, mortgage,
pledge, hypothecation, sublease, occupation or use by another person, or other
transfer or disposition without Landlord's written consent shall be voidable
and, at Landlord's election, and shall constitute a default by Tenant.
15.2 Notice of Proposed Assignment or Sublease. If Tenant wishes to
assign this Lease or sublet the Premises or any part thereof, Tenant shall first
given written notice to Landlord of its intention to do so ("Tenant's Notice")
which notice shall contain the name of the proposed assignee or subtenant
(collectively "Transferee"), the nature of the proposed Transferee's business to
be carried on in the Premises, the terms and provisions of the proposed
assignment or sublease, and such financial and other information with respect to
the proposed Transferee and transfer as Landlord may reasonably require.
15.3 Landlord's Options. At any time within sixty (60) days after
Landlord's receipt of Tenant's Notice, Landlord may by written notice
("Landlord's Notice") to Tenant elect to:
36
44
15.3.1 Recapture the affected space by terminating this Lease
as to the portion of the Premises covered by the proposed sublease or assignment
effective upon a date specified in Landlord's Notice which date shall not be
earlier than thirty (30) days nor later than sixty (60) days after Landlord's
Notice, with a proportionate reduction of all rights and obligations hereunder
that are based on the square footage of the Premises;
15.3.2 Consent to the proposed sublease or assignment; or
15.3.3 Disapprove the proposed sublease or assignment.
In the event Landlord's Notice states that Landlord elects to exercise the
recapture option described in Section 15.3.1, above, Tenant shall have the
option to withdraw Tenant's Notice of proposed transfer and not to proceed with
the proposed sublease or assignment.
15.4 Limitations on Landlord's Options. Notwithstanding the
foregoing, in the event of a proposed assignment or sublease by Tenant, Landlord
shall not unreasonably withhold its consent to the proposed sublease or
assignment if all of the following conditions are satisfied:
15.4.1 The use of the Premises by the proposed Transferee
would be substantially the same as Tenant's use of the Premises;
15.4.2 The proposed Transferee is reputable and of sound
financial condition;
15.4.3 The operations of the proposed assignee or sublessee
would be managed in a manner and by persons whose qualifications and experience
are acceptable to Landlord in its reasonable discretion;
15.4.4 The merchandise and/or services to be sold from the
Premises by the proposed assignee or sublessee and the manner and methods of
merchandising (including but not limited to advertising) are of a first-class
quality, all as reasonably determined by Landlord; and
37
45
15.4.5 If the monthly Minimum Rent payable under the
assignment or sublease agreement is more than the Minimum Rent being paid by
Tenant to Landlord, Tenant shall pay to Landlord eighty percent (80%) of the
difference between the Minimum Rent payable under said assignment or sublease
and the Minimum Rent then being paid under this Lease. Brokerage fees and any
direct expenses incurred by Tenant in preparing the space for the proposed
assignee or sublessee, may be deducted from the Landlord's eighty percent (80%)
share of the "profits."
15.5 Approved Assignment or Sublease. If Landlord should fail to
notify Tenant in writing of such election within the sixty (60) day period set
forth in Section 15.3, Landlord shall be deemed to have elected the option
described in Section 15.3.2, but subsequent written approval by Landlord of the
proposed assignment or sublease shall be required as provided in that Section.
Landlord's consent to any proposed sublease or assignment shall be subject to
the following provisions.
15.5.1 Tenant may enter into such assignment or sublease, but
only to the Transferee and upon the specific terms and conditions set forth in
the Tenant's Notice.
15.5.2 Any sublease or assignment shall be subject to, and in
full compliance with, all of the terms and provisions of this Lease.
15.5.3 No consent by Landlord to any assignment or sublease
shall relieve Tenant of any obligation under this Lease.
15.5.4 Each Transferee shall assume all obligations of Tenant
under this Lease and shall be and remain jointly and severally liable with
Tenant for the payment of Rent and the performance of all of the terms,
covenants, conditions and agreements herein contained on Tenant's part to be
performed; provided, however, that without limiting the obligations of Tenant
under this Lease, the Transferee shall be liable to Landlord for rent only in
the amount set forth in the assignment or sublease, unless otherwise agreed by
the parties thereto.
15.5.5 No assignment shall be binding on Landlord unless
Tenant and the Transferee shall deliver to Landlord a counterpart of the
assignment and an instrument in recordable form that contains a covenant of
assumption by the Transferee
38
46
satisfactory in form and substance to Landlord and consistent with the
requirements of this Section 15. The failure or refusal of the Transferee to
execute an instrument of assumption shall not release or discharge the
Transferee from its obligations set forth above.
15.6 Costs Paid by Tenant. Whether or not Landlord consents to a
proposed assignment or sublease, Tenant shall reimburse Landlord on demand for
any and all costs that may be incurred by Landlord in connection with any
proposed assignment or sublease including, without limitation, the cost of
investigating the acceptability of the proposed Transferee, legal costs incurred
in connection with each proposed assignment or sublease, and all other
reasonable costs, including Landlord's overhead expenses.
15.7 Transfer of Stock or Other Assets. If Tenant is a corporation,
any merger, consolidation, liquidation, dissolution, or any change in the
ownership of or power to vote a majority of its outstanding voting stock,
whether voluntary, involuntary or by operation of law, shall be deemed a
voluntary assignment of this Lease for purposes of this Section 15 unless
Tenant's stock is listed on a recognized securities exchange. If Tenant is a
partnership, any merger, consolidation, liquidation, dissolution, or any change
in the ownership of a majority of the partnership interests, whether voluntary,
involuntary or by operation of law, shall be deemed a voluntary assignment of
this Lease for purposes of this Section 15. If Tenant consists of more than one
person, any transfer, whether voluntary, involuntary, or by operation of law,
from one person to the other, shall be deemed a voluntary assignment. Any direct
or indirect sale or other transfer of all or a substantial part of the assets or
control of Tenant to another person or entity, whether voluntary, involuntary or
by operation of law, shall also be deemed a voluntary assignment for purposes of
this Section 15.
39
47
16. INVOLUNTARY TRANSFER
No interest of Tenant in this Lease or the Premises shall be assignable or
transferable by operation of law (including, without limitation, any transfers
to testacy or intestacy). An involuntary assignment or transfer shall be deemed
a default by Tenant, and Landlord may, at its option and without notice, to the
extent allowed by law, terminate this Lease in which case this Lease shall not
be treated as an asset of Tenant. Without limiting the generality of the
foregoing, each of the following shall be deemed an involuntary assignment:
16.1 Bankruptcy; Insolvency. If Tenant or any guarantor of Tenant's
obligations is or becomes bankrupt or insolvent, makes an assignment for benefit
of creditors, or a proceeding is instituted by or against Tenant under any
insolvency, bankruptcy, reorganization or other debtor relief proceedings
(unless, in the case of an involuntary proceeding against Tenant, the same is
dismissed within sixty (60) days); or if Tenant is a partnership or consists of
more than one person or entity, any partner, person or entity is or becomes
bankrupt or insolvent, makes an assignment for benefit of creditors, or a
proceeding is instituted by or against such partner, person or entity under any
insolvency, bankruptcy, reorganization or other debtor relief proceedings
(unless, in the case of an involuntary proceeding, the same is dismissed within
sixty (60) days).
16.2 Receivership. A receiver or trustee is appointed with authority
to take possession of all or substantially all of the Premises, Tenant's
interest in this Lease or Tenant's assets located at the Premises and such
receiver or trustee is not removed within sixty (60) days.
16.3 Attachment; Judicial Seizure. The attachment, execution or
other judicial seizure of all or substantially all of Tenant's assets located at
the Premises, or of any right or interest of Tenant under this Lease which is
not removed or discharged within thirty (30) days.
40
48
17. QUIET ENJOYMENT
Landlord covenants that it has full right and authority to make this Lease
and that Tenant, upon fully complying with and promptly performing all of the
terms, covenants and conditions of this Lease to be observed and performed by
it, and upon payment of Rent due hereunder as and when due, shall have quiet and
peaceful possession of the Premises for the Lease Term as against any adverse
claim of Landlord or any party claiming under Landlord, subject to the
provisions of this Lease.
18. ACCESS TO PREMISES
18.1 Access to Building. Except for the space within the inside
surfaces of all walls, hung ceilings, floors, windows and doors bounding the
Premises, all of the Building, including, without limitation, exterior Building
walls, core corridor walls and doors and any core corridor entrance, any
terraces or roofs adjacent to the Premises, and any space in or adjacent to the
Premises used for shafts, pipes, conduits, fan rooms, ducts, electric or other
utilities, sinks or other Building facilities, and the use thereof, as well as
access thereto through the Premises for the purposes of operation, maintenance,
decoration and repair, are reserved to Landlord.
18.2 Pipes, Ducts and Conduits. Landlord reserves the right and
Tenant shall permit Landlord, to install, erect, use and maintain pipes, ducts
and conduits in and through the Premises.
18.3 Access to Premises. Landlord and its authorized representatives
shall have the right to enter the Premises at reasonable times to inspect,
clean, make repairs, alterations or additions to the Premises or the Building,
or to render any services to be provided by Landlord hereunder, to show the
Premises to prospective tenants, purchasers or others, and for other reasonable
purposes deemed necessary or desirable by Landlord. Any such actions by Landlord
shall not be deemed to be an eviction of Tenant nor relieve Tenant of any of its
obligations hereunder, it being agreed such will be accomplished with as little
inconvenience to Tenant as reasonably possible. Except in cases of an emergency,
Landlord shall provide Tenant with reasonable prior notice of its entry onto the
Premises for all purposes other than for the purpose of providing janitorial and
other regularly scheduled services. Nothing in this Xxxxxxx 00
00
00
xxxxx xx deemed to impose any obligation upon Landlord not expressly stated
elsewhere in this Lease.
18.4 Obstruction of Windows. If at any time windows of the Premises
are temporarily darkened or obstructed by reason of repairs, improvements,
maintenance or cleaning in or about the Building, or if any part of the
Building, other than the Premises, is temporarily or permanently closed or
inoperable, the same shall be without liability to Landlord and without any
reduction or diminution of Tenant's obligation under this Lease.
18.5 Access to Premises One Month Prior to Expiration. If, during
the last month of the Lease term, Tenant has removed all or substantially all of
Tenant's Property from the Premises, Landlord may, with three (3) days' prior
notice to Tenant, immediately enter the Premises and alter, renovate and
decorate the same, without liability to Tenant and without reducing or otherwise
affecting Tenant's covenants and obligations hereunder.
18.6 Building Changes. Landlord reserves the right, at any time,
without incurring any liability to Tenant therefor, and without affecting or
reducing any of Tenant's covenants and obligations hereunder, to make such
changes, alterations and improvements in or to the Building as Landlord shall
deem necessary or desirable. Notwithstanding the foregoing, Landlord shall
obtain Tenant's prior consent to any changes, alterations or improvements which
materially impair the appearance, configuration, or accessibility of the
Premises.
19. SURRENDER OF PREMISES AND HOLDING OVER
19.1 Condition of Premises. Subject to Section 13, upon expiration
or earlier termination of this Lease, Tenant shall surrender the Premises and
Tenant Improvements and any Alterations to the Premises (except those
Alterations which Tenant is required to remove pursuant to Section 10.5) in good
condition, ordinary wear and tear excepted.
19.2 Removal of Tenant's Property. Tenant's movable equipment,
furniture, furnishings, merchandise and other unattached movable property,
including trade fixtures (collectively called "Tenant's Personal Property")
installed or located at the Premises, shall be and remain the property of
Tenant. In addition to Tenant's obligations under Section 10.5
42
50
hereof, upon the expiration or termination of the Lease, Tenant shall at its
expense remove all of Tenant's Personal Property and the property of all persons
claiming under Tenant, and shall repair or reimburse Landlord for the costs of
repairing any damage to the Premises or the Property resulting from the
installation or removal of such property. Any such property not so removed by
Tenant shall be deemed abandoned and shall become the property of Landlord to
dispose of as Landlord deems expedient without accounting to Tenant therefor.
Except as otherwise required by law, Landlord may store such property in any
place selected by Landlord, including but not limited to a public warehouse, at
the expense and risk of Tenant, with the right to sell any or all of such stored
property at public or private sale in such manner and at such times and places
as Landlord in its sole discretion may deem proper, with notice to Tenant as
required by law; and the proceeds of such sale shall be applied first to the
cost of such sale, second to the payment of the costs of removal and storage,
and third to payment of any other sums which may then be due from Tenant to
Landlord under any of the terms of this Lease with the balance, if any, to be
paid over to Tenant. Tenant waives all claims against Landlord for any damages
resulting from Landlord's retention or disposition of any such property as
provided herein.
19.3 Holding Over with Landlord's Written Consent. If Tenant, with
Landlord's written consent, remains in possession of the Premises after the
expiration or termination of this Lease, such possession by Tenant shall be
deemed to be a month-to-month tenancy terminable as provided by law. During such
month-to-month tenancy, Tenant shall pay all Rent provided in this Lease and all
provisions of this Lease shall apply to the month-to-month tenancy, except those
pertaining to term and option to extend (if any).
19.4 Holding Over without Landlord's Written Consent. If Tenant,
without Landlord's written consent, remains in possession of the Premises after
the expiration or termination of this Lease, Tenant shall pay the greater of:
19.4.1 One hundred fifty percent (150%) of the Rent which
Tenant was obligated to pay for the month immediately preceding the month in
which this Lease expires or terminates for each complete or partial month of any
such holdover; or
19.4.2 The total rent which other tenants have
43
51
agreed to pay for the Premises during the period of such holdover, if Landlord
has leased all or part of the Premises to other tenants effective upon the
expiration or termination of this Lease.
In the event of any unauthorized holding over, Tenant shall indemnify and hold
Landlord harmless from and against all liability, losses, claims, causes of
action, damages, costs and expenses (including without limitation attorneys'
fees) resulting from Tenant's failure to surrender the Premises, including
without limitation claims made by succeeding tenants resulting from Tenant's
failure to surrender the Premises.
19.5 Survival of Tenant's Obligations. Tenant's obligations under
this Section 19 shall survive the expiration or termination of this Lease.
44
52
20. ESTOPPEL CERTIFICATES
Tenant shall, upon written request of Landlord, execute, acknowledge and
deliver to Landlord, or its designee, a written certificate of Tenant stating:
(a) that Tenant has accepted the Premises (or if Tenant has not done so, that
Tenant has not accepted the Premises and specifying the reasons therefor); (b)
the Commencement and Expiration Dates of this Lease; (c) the date to which Rent
under this Lease has been paid; (d) that this Lease is in full force and effect
and has not been modified (or if there have been modifications, that this Lease
is in full force and effect as modified and stating the modifications); (e)
whether or not there are, to Tenant's knowledge, then existing any defaults by
the Landlord in the performance of its obligations under this Lease (and if so,
specifying the same); (f) whether or not there are then existing any defenses
against the enforcement of any obligations of Tenant under this Lease (and if
so, specifying the same); (g) the amount of the security and prepaid Rent (if
any) that has been deposited with Landlord; and (h) any other information
requested. It is agreed that any such certificate delivered pursuant to this
Section 20 may be relied upon by a prospective purchaser or a mortgagee of any
part of Landlord's interest in the Property, or an assignee of any mortgagee
upon any part of the Landlord's interest in the Property. If Tenant shall fail
to respond within five (5) days after receipt by Tenant of a written request by
Landlord as herein provided, Tenant shall be deemed to have admitted the
accuracy of any information supplied by Landlord to such prospective purchaser,
mortgagee or assignee.
21. SUBORDINATION
21.1 Priority. Without the necessity of any additional document
being executed by Tenant for the purpose of effecting a subordination, this
Lease shall be subject and subordinate at all times to the lien of any mortgage
or deed of trust which may now exist or hereafter be executed in any amount for
which all or a portion of the Property or all of a part of Landlord's interest
in the Property is specified as security and to all future advances thereon, and
to all renewals, modifications, extensions, substitutions, replacements and/or
consolidations thereof. Notwithstanding the foregoing, Landlord shall have the
right to subordinate or cause to be subordinated any such liens to this Lease if
the mortgagee under such mortgage or beneficiary under
45
53
such deed of trust (collectively called "Landlord's Mortgagee") so requires. In
the event that any such mortgage or deed of trust is foreclosed or a conveyance
in lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the tenant of the purchaser at such
foreclosure sale or grant of such deed at the request of the then owner,
provided that such purchaser or grantee agrees, if Tenant is not in default
hereunder at the time of foreclosure or grant of deed, to recognize this Lease
and be bound by the covenants and conditions of Landlord hereunder in effect or
accruing after the effective date of such foreclosure or deed in lieu. Tenant
covenants and agrees to execute and deliver, upon demand by Landlord and in the
form requested by Landlord, any additional documents evidencing the priority or
subordination of this Lease with respect to the lien of any such mortgage or
deed of trust. If Tenant shall fail to execute and deliver any of the
instruments or documents described above within the ten (10) days after the
receipt of written demand therefor, Tenant shall be deemed to have appointed
Landlord as Tenant's attorney-in-fact in Tenant's name and place to do so.
21.2 Mortgagee Protection. Tenant agrees to give to Landlord's
mortgagees a copy of any notice of default served upon Landlord, provided that
Tenant has been notified in writing of the names and addresses of such
mortgagees. Tenant further agrees that Landlord's Mortgagees shall have the
right to cure such default on behalf of Landlord within thirty (30) days after
the receipt of such notice. Tenant further agrees not to invoke any of the
remedies which it may have against Landlord under the Lease until said thirty
(30) days have elapsed, or during any period that Landlord's Mortgagee is
proceeding to cure such default with due diligence, or is diligently taking
steps to obtain the right to enter the Premises and cure the default, whichever
is later.
22. DEFAULT BY TENANT
22.1 Events of Default. The occurrence of any of the following
shall constitute a default by Tenant under this Lease:
22.1.1 Abandonment. Abandonment of the Premises;
22.1.2 Vacation. Absence of Tenant and its employees from the
Premises for thirty (30) consecutive days or thirty (30) days in any twelve (12)
month period;
46
54
22.1.3 Nonpayment of Rent. Failure by Tenant to make any
payment of Rent as and when due where such failure shall continue for five (5)
days after the due date or failure to pay rent as and when due more than two (2)
times in any twelve (12) month period;
22.1.4 Insurance Default. Failure by Tenant to perform or
observe any of Tenant's obligations under Section 12.3 to 12.7 hereof;
22.1.5 Prohibited Transfer. Any assignment, encumbrance,
mortgage, pledge, hypothecation, sublease or other transfer or disposition made
in violation of Section 15; or
22.1.6 Breach of Other Lease Provisions. Failure by Tenant to
perform or observe any other provision of this Lease if the failure is not cured
within fifteen (15) days after written notice has been given by Landlord to
Tenant. If the default is curable but cannot reasonably be cured within fifteen
(15) days, Tenant shall not be in default if Tenant commences to cure the
default with the 15-day period and thereafter diligently and continuously
completes the same. Notices under this Section 22 shall specify the alleged
default and the applicable Lease provisions, and shall demand that Tenant
perform the provisions of the Lease within the applicable period of time.
22.1.7 Guaranty. A default by Guarantor under the Guaranty.
23. LANDLORD'S REMEDIES
In the event of a default by Tenant, Landlord may exercise any one or more
of the following remedies, in addition to all other rights and remedies now or
hereafter available at law or in equity, which rights and remedies are in
addition to Landlord's rights to assess and collect interest and late charges,
as provided in Section 4.6, and in addition to Landlord's rights under the
Guaranty.
23.1 Right to Reenter and Relet. To the extent allowed by Washington
law, Landlord may continue this Lease in full force and effect, and Landlord
shall have the right and power as
47
55
attorney-in-fact for Tenant to enter the Premises and remove therefrom all
persons and property, to store such property in a public warehouse or elsewhere
at the cost of and for the account of Tenant, and to sell such property and
apply the proceeds therefrom pursuant to applicable State of Washington law.
Landlord, as attorney-in-fact for Tenant, may from time to time sublet the
Premises or any part thereof for the account of Tenant for such term or terms
(which may extend beyond the Lease Term) and at such rent and on such other
conditions as Landlord in its sole discretion may deem advisable, with the right
to make alterations and repairs to the Premises. Tenant shall be liable to
Landlord for all costs incurred by Landlord in reletting all or any part of the
Premises, including but not limited to: all costs and expenses of re-entering
and recovering possession of the Premises; all costs and expenses of
decorations, repairs, changes, alterations and additions to the Premises
required by the reletting; brokers' commissions; all costs and expenses incurred
by Landlord in collecting the rent accruing from such reletting. If a sufficient
sum shall not be realized from reletting to pay (a) all costs and expenses of
reletting, (b) Rent due at the time of reletting together with interest thereon
at the rate provided in Section 4.8, and (c) Rent coming due hereunder, then
Tenant shall satisfy and pay any such deficiency upon demand therefor from time
to time. If the Premises are not relet, then Tenant shall pay to Landlord the
Rent reserved in this Lease upon demand therefor from time to time. In no event
shall Tenant be entitled to any excess rent received by Landlord. To the extent
allowed by Washington law, Landlord may recover sums coming due under the terms
of this Section 23 from time to time, on one or more occasions, and Landlord
shall not be obligated to wait until the expiration or termination of the Lease
term. Any such reletting shall not be construed as an election on the part of
Landlord to terminate this Lease unless a written notice of such intention is
given to Tenant by Landlord. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for Tenant's previous default.
23.2 Right to Receiver. Landlord may have a receiver appointed for
Tenant, upon application by Landlord, to take possession of the Premises and to
apply any rent collected from the Premises and to exercise all other rights and
remedies granted to Landlord as attorney-in-fact for Tenant pursuant to Section
23.1 above.
48
56
23.3 Right to Terminate Lease. Landlord may terminate this Lease at
any time after such default, and may, in addition to any other remedy it may
have, forthwith repossess the Premises and remove all persons and property
therefrom, and shall be entitled to recover forthwith as damages the sums of
money equal to the total of (a) the cost of recovering the Premises, (b) the
unpaid Rent owed at the time of termination, plus interest on the unpaid Rent
from due date at the rate provided in Section 4.6, (c) the amount by which the
balance of the Rent for the remainder of the term exceeds the amount of the loss
of rent that Tenant proves could have been reasonably avoided, and (d) any other
sum of money and damages owed by Tenant to Landlord. No act by Landlord other
than giving notice to Tenant shall terminate this Lease. Acts of maintenance,
efforts to relet the Premises, or the appointment of a receiver on Landlord's
initiative to protect Landlord's interest under this Lease shall not constitute
a termination of this Lease.
23.4 Right to Cure. At any time after Tenant commits a default,
Landlord may, but shall not be obligated to, cure the default at Tenant's cost.
If Landlord at any time, by reason of Tenant's default, pays any sum or does any
act that requires the payment of any sum, the sum paid by Landlord shall be due
immediately from Tenant to Landlord at the time the sum is paid, and if paid at
a later date shall bear late charges and interest as provided in Section 4.6
from the date the sum is paid by Landlord until Landlord is reimbursed by
Tenant. Notwithstanding any provision hereof, if this Lease is terminated by
Landlord or by operation of law, Tenant's liability to Landlord for damages
shall survive such termination.
24. DEFAULT BY LANDLORD
Subject to the provisions of Section 21.2, failure by Landlord to perform
any of its obligations under this Lease shall constitute a default by Landlord
if the failure is not cured within fifteen (15) days after written notice
thereof has been given by Tenant to Landlord; provided, however, that if the
nature of Landlord's obligation is such that more than fifteen (15) days are
required to cure, then Landlord shall not be in default if Landlord commences
performance within such fifteen (15) day period and thereafter diligently
prosecutes the same to completion. Notices given under this Section 24 shall
specify the alleged default and the applicable Lease provisions, and shall
demand that Landlord perform the provisions of this Lease within the
49
57
applicable period of time. If Landlord shall fail to cure a default of any
covenant of this Lease to be performed by it and, as a consequence of such
uncured default, Tenant shall recover a money judgment against Landlord, such
judgment shall be satisfied solely out of the proceeds of sale received upon
execution of such judgment against the right, title and interest of Landlord in
the building and its underlying realty and out of the rents, or other income
from said property receivable by Landlord, or out of the consideration received
by Landlord's right, title and interest in said property, but neither Landlord
nor any partner or joint venture of Landlord shall be personally liable for any
deficiency.
25. TENANT'S REMEDIES
In the event of a default by Landlord, Tenant's remedies shall be limited
to an action for damages and/or an injunction and/or, in the event of a material
uncured default, the right to terminate this Lease upon no less than thirty (30)
days' written notice to Landlord. If Tenant shall recover a judgment against
Landlord, the judgment shall be satisfied only out of Landlord's interest in the
Property whether by the execution by Tenant on the judgment against the Property
or the garnishment of rents payable to Landlord. It is agreed that if Landlord
is a partnership, its partners (whether general or limited), shall not be
personally liable for any deficiency. Wherever Landlord is given discretion
hereunder and Tenant claims that Landlord has unreasonably acted or refused to
act, Tenant's sole remedy shall be an action for injunctive relief without
recovery of damages, and shall only be available when this Lease expressly
provides Landlord must act reasonably.
26. WAIVER
26.1 Nonwaiver of Defaults. No delay or omission in the exercise of
any right or remedy of either party on any default by the other party shall
impair such right or remedy or be construed as a waiver of any default. The
receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default, but only a waiver of timely payment for the
particular Rent payment involved.
26.2 Surrender of Premises. No act or conduct of Landlord, including
acceptance of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by
50
58
Tenant before the Expiration Date. Only notice from Landlord to Tenant shall
constitute acceptance of the surrender of the Premises and accomplish a
termination of the Lease.
26.3 Consents and Approvals. Landlord's consent to or approval of
any act by Tenant requiring Landlord's consent or approval shall not be deemed
to waive or render unnecessary Landlord's consent to or approval of any
subsequent act by Tenant.
26.4 Written Waivers. Any waiver by Landlord of any default
must be in writing and shall not be a waiver of any other default concerning
the same or any other provisions of this Lease.
27. NOTICES
27.1 Method. Any notice, demand, request, consent, or approval under
this Lease shall be in writing and shall be personally delivered or sent by U.S.
registered or certified mail, postage prepaid, return receipt acknowledged: (a)
to Tenant, prior to the Commencement Date, at Tenant's Notice Address set forth
in Section 1.1.15(b) hereof, or, subsequent to the Commencement Date, at
Tenant's Notice Address set forth in Section 1.1.15(c) hereof, or at any place
where Tenant may be found if sent subsequent to Tenant's vacating, deserting,
abandoning or surrendering the Premises; and (b) to Landlord, at Landlord's
Notice Address set forth in Section 1.1.15(a) hereof; or (c) to such other
persons or at such other addresses as from time to time may be reasonably
requested by either party or any other person in writing.
27.2 Effective Date. All such notices and communications shall be
effective on the day of receipt at the applicable address as evidenced by the
return receipt if sent by registered or certified mail, or if personally
delivered, upon the date of personal delivery as evidenced by an affidavit of
service.
27.3 Notice of Occurrences. Tenant shall give prompt notice to
Landlord of:
27.3.1 Any occurrence in or about the Premises for which
Landlord might be liable;
27.3.2 Any fire or other casualty in the Premises;
51
59
27.3.3 Any damage to or defect in the Premises including the
fixtures, equipment and appurtenances thereof, for the repair of which Landlord
might be responsible; and
27.3.4 Damage to or defect in any part or appurtenance of the
Building's sanitary, electrical, heating, ventilating, air-conditioning,
elevator or other systems located in or passing through the Premises or any part
thereof.
28. MISCELLANEOUS PROVISIONS
28.1 Time of Essence. Time is of the essence of each provision
of this Lease.
28.2 Authority. Each party represents and warrants to the other that
it has authority to enter into this Lease and that its execution and delivery of
this Lease has been duly authorized. Each individual executing this Lease on
behalf of a party represents and warrants that he/she is duly authorized to
execute and deliver this Lease on behalf of said party, and if Tenant is a
corporation, that such authorization is in accordance with a duly adopted
resolution of Tenant's board of directors, and that this Lease is valid and
enforceable against Tenant in accordance with its terms. Upon Landlord's
request, Tenant shall provide Landlord with a certified copy of a resolution
adopted by Tenant's board of directors authorizing the execution of this Lease
by such individual.
28.3 Commissions. Each party represents to the other that there are
no individuals or entities entitled to brokerage commissions or finder's fees in
connection with this Lease except the broker (if any) named in Section 1.1.16
hereof. The party named in Section 1.1.16 shall pay all commissions and fees
that are payable to the broker named in such section. If any other claims for
brokerage commissions or finder's fees, or like payments, arise out of or in
connection with this Lease, such claims shall be defended by, and if sustained,
paid by, the party whose alleged actions or commitment form the basis of such
claims.
28.4 Attorneys' Fees. If either party commences an action against
the other party arising out of or in connection with this Lease, the prevailing
party in any such action, at trial or on appeal, shall be entitled to have and
recover from the other party in addition to costs, such sums as the court may
adjudge
52
60
reasonable as attorneys' fees.
28.5 Exhibits and Addenda. All exhibits and addenda identified in
Section 1.2 are attached to this Lease and incorporated herein. The Premises
described in Exhibit 2 shall be determinative of the location of the Leased
Premises and shall be deemed to contain the number of square feet referred to in
Section 1.1.4.1 and there shall be no adjustment in Rent due to the fact that
the premises contain less or more than the number of square feet set forth in
Section 1.1.4.1.
28.6 Interpretation and Construction. This Lease shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
Washington.
28.7 Integrated Agreement and Modifications. This Lease contains all
covenants and agreements between Landlord and Tenant relating in any manner to
the rent, use and occupancy of the Premises and all other matters set forth in
this Lease. No prior agreements or understanding pertaining to the same shall be
valid or of any force or effect; and the terms, covenants, conditions and
agreements of this Lease shall not be altered, modified or added to except in
writing signed by Landlord and Tenant, and approved in writing by Landlord's
Mortgagees.
28.8 Appointment of Landlord as Agent. It is understood and agreed
between the parties that Tenant's failure to pay when due all obligations owing
to the State of Washington, including but not limited to, employment security
taxes, sales taxes, business and occupation taxes, and any and all obligations
owing to the Department of Labor and Industries, may, in certain instances,
result in liability for the same to the Landlord not contemplated under the
terms of this Lease. In consideration thereof, Tenant consents to and does
hereby appoint Landlord to act as Tenant's agent and attorney in fact to obtain
from the State of Washington or any agency thereof any and all relevant
information regarding Tenant's taxpayer status, specifically including the
amounts of any delinquencies. This power of attorney shall take effect
immediately and shall remain in full force and effect throughout the term of
this Lease, including any extension periods, and shall terminate no earlier than
one (1) year from the lease termination date.
28.9 Captions. The captions of this Lease shall have
53
61
no effect on its interpretation.
28.10 Singular and Plural. When required by the context of this
Lease, the singular shall include the plural.
28.11 Joint and Several Obligations. "Party" shall mean Landlord or
Tenant and if more than one person or entity is Landlord or Tenant, the
obligations imposed on that party shall be joint and several.
28.12 Severability. The unenforceability, invalidity or illegality
of any provision of this Lease shall not render any other provisions
unenforceable, invalid or illegal.
28.13 Recordation. This Lease shall not be recorded, except that, at
the request of either party, the parties shall execute a memorandum of this
Lease in recordable form and in a form acceptable to the parties, and shall
record the same.
28.14 Transfer and Assignment of Premises by Landlord. Landlord
shall have the right to transfer and assign, in whole or in part, all of its
rights and obligations hereunder in the Premises and/or the Property. In the
event of any such transfer or transfers, the transferor shall be automatically
relieved of any and all obligations and liabilities on the part of Landlord
accruing from and after the effective date of the transfer, provided that the
transferee agrees to assume the obligations and liabilities of Landlord
hereunder accruing after the effective date of the transfer.
28.15 Light and Air. Tenant covenants and agrees that no diminution
of light, air or view by any structure which may hereafter be erected shall
entitle Tenant to any reduction of Rent under this Lease, result in any
liability or obligation of Landlord to Tenant, or in any way affect this Lease
or Tenant's obligations hereunder.
28.16 Name. Tenant shall not use the name of the Building, the
Condominium (if any), or the Property for any purpose other than as an address
of the business to be conducted by the Tenant on the Premises. Landlord shall
have the right at any time to change the name, number or designation by which
the Building, Property or Condominium (if any) is known without liability to
Tenant.
54
62
28.17 Cumulative Remedies. All rights and remedies of Landlord under
this Lease shall be cumulative and shall not exclude any rights or remedies
otherwise available.
28.18 Successors and Assigns. Except as provided in Section 15, all
of the terms, conditions, covenants and agreements of this Lease apply to, inure
to the benefit of, and are binding upon Landlord, Tenant and their respective
heirs, administrators, executors, successors and assigns.
28.19 "Landlord" - Release. 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 Premises; and in the event of any transfer or transfers of title
thereto, 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 or conveyance of all liability as respects
the performance of any covenants or obligations hereunder of the part of
Landlord to be performed thereafter. Nothing herein shall be deemed to relieve
Landlord of its obligations required to be performed prior to and as of the date
of such transfer or conveyance.
55
63
28.20 Corporate Representatives. If Tenant hereunder is a
corporation, the parties executing this Lease on behalf of Tenant represent and
warrant to Landlord that: They have the authority to bind Tenant; Tenant is a
valid and existing corporation; all things necessary to qualify Tenant to do
business in Washington have been accomplished prior to the date of this Lease;
all franchise and other corporate taxes have been paid to the date of this
Lease; all forms, reports, fees, and taxes required to be filed or paid by said
corporation in compliance with applicable laws will be filed and paid when due.
LANDLORD:
GRAND PACIFIC LIMITED PARTNERSHIP, a
Washington limited partnership
By WHITEHALL CAPITAL CORPORATION,
a Washington corporation
/s/
By ___________________________
Its President
TENANT:
xxxx.xxx CORPORATION
a Washington corporation
/s/ Xxxxxx X. Fine
By _______________________________
Its President
56
64
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that
____________________________ is the person who appeared before me, and said
person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the
President of Whitehall Capital Corporation, general partner of GRAND PACIFIC
LIMITED PARTNERSHIP, to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
Dated:
(Seal or stamp) __________________________________
(Signature)
__________________________________
(Printed Name)
Title ____________________________
My appointment expires ___________
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that
_______________________________ is the person who appeared before me, and said
person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the of
xxxx.xxx CORPORATION to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
Dated: __________
(Seal or stamp) __________________________________
57
65
(Signature)
__________________________________
(Printed Name)
Title ____________________________
My appointment expires ___________
58
66
OFFICE LEASE AGREEMENT
Dated February 28, 1996
between
Grand Pacific Limited Partnership,
a Washington Limited Partnership, Landlord,
and
xxxx.xxx CORPORATION, a Washington corporation, Tenant
EXHIBIT 1
LEGAL DESCRIPTION OF THE PROPERTY
That certain real property located in King County, Washington and described as
the Colonial/Grand Pacific, a condominium according to Condominium Declaration
recorded under King County Recording No. 9202101191.
67
OFFICE LEASE AGREEMENT
Dated February 28, 1996
between
Grand Pacific Limited Partnership,
a Washington Limited Partnership, Landlord,
and
xxxx.xxx CORPORATION, a Washington corporation, Tenant
EXHIBIT 2
FLOOR PLAN OF PREMISES
AND EXPANSION SPACE
[See Attached]
68
OFFICE LEASE AGREEMENT
Dated February 28, 1996
between
Grand Pacific Limited Partnership,
a Washington Limited Partnership, Landlord,
and
xxxx.xxx CORPORATION, a Washington corporation, Tenant
EXHIBIT 3
TENANT IMPROVEMENTS
1. BASE CONDITION PROVIDED BY LANDLORD
Tenant has inspected the Premises and accepts the Premises in their presently
built-out condition. Landlord agrees to provide the Premises to Tenant free from
all debris on or before March 1, 1996. All improvements to the Premises after
the date hereof are called "Tenant Improvements."
2. TENANT IMPROVEMENTS
Design and construction of all Tenant Improvements shall be provided at Tenant's
expense. Landlord shall pay Tenant's costs of approved Tenant Improvements up to
Fifty-Two Thousand Two Hundred Fifty-Five and No/100 Dollars ($52,255.00) (the
"Allowance") on the following terms and conditions.
2.1 General Terms of Disbursement Requests. Tenant may request
disbursements to pay for costs of Tenant Improvements actually incurred by
delivering a disbursement request to Landlord, together with all supporting
documents required in this Exhibit 3, no more frequently than once every seven
(7) days. Each disbursement request shall be executed by X. Xxxxxx Construction
(or such other contractors performing approved Tenant Improvements on the
Premises) and Tenant. Landlord shall use its best efforts to make approved
disbursements within three (3) business days of receipt of each disbursement
request made in compliance with the terms hereof. The Allowance will be
disbursed by Landlord only for work performed or in place at the date of each
disbursement request. Landlord shall have the right, but not the obligation, to
inspect the Premises for the purpose of determining Tenant's compliance with the
terms of this Section 2. Tenant hereby acknowledges that X. Xxxxxx Construction
and such other contractors who execute a disbursement request are acting as
69
Tenant's agent for the purposes of making disbursement requests and receiving
funds for the payment of the costs of Tenant Improvements. Tenant further agrees
that any payments made by Landlord to such contractors pursuant to any
disbursement request shall be deemed to be payment of the Allowance to Tenant.
To the extent that Landlord makes disbursements of the Allowance without
requiring Tenant to strictly comply with the terms of this Exhibit 3, such
action by Landlord shall not be deemed to constitute a waiver or grounds for
estoppel, and Landlord may, at any time thereafter, insist on strict compliance
by Tenant with the terms and conditions hereof.
2.2 Conditions to Progress Payments. The following are conditions
precedent to Landlord's obligation to make each disbursement of the Allowance
or any portion thereof:
(a) Landlord shall have received a list of all contractors and
subcontractors performing work on the Premises, including their names, addresses
and phone numbers;
(b) Landlord shall have received a copy of the duly executed
construction contract with X. Xxxxxx Construction, which is reasonably
acceptable to Landlord, and same shall include a cost breakdown of Tenant
Improvements;
(c) Landlord shall have received one reproducible set of the Final
Plans for the Tenant Improvement in the form approved by Landlord;
(d) For each disbursement after the initial disbursement, Landlord
shall have received satisfactory evidence that the disbursement covered by the
preceding disbursement request has been properly applied to pay the
subcontractors and materialmen for which the disbursement was requested;
(e) No liens have been filed against the Premises in connection
with the work performed thereon;
(f) Tenant remains solvent and is not in breach or default,
anticipatorily or otherwise, under the terms of the Lease;
(g) Tenant's contractor has certified to Landlord that the
improvements completed to the date of request for payment are,
2
70
to the best of the contractor's knowledge and information, completed in
accordance with the Final Plans approved by Landlord, in a good and workmanlike
manner and in compliance with all governmental requirements; and
(h) Landlord has received invoices, receipts or other evidence
reasonably satisfactory to Landlord showing that the costs of labor and
materials incurred by Tenant to date are at least the amount requested by
Tenant.
2.3 Holdback/Final Disbursement. Landlord shall be entitled to withhold
a portion of the Allowance equal to no more than $5,225.00 of Tenant's costs
incurred for Tenant Improvements until Tenant has provided Landlord with
evidence reasonably satisfactory to Landlord that the following conditions have
been satisfied. Such conditions to the final disbursement by Landlord shall be
in addition to the conditions set forth in Section 2.2 above:
(a) Tenant's contractor has certified to Landlord that all Tenant
Improvements have been completed in accordance with the Final Plans approved by
Landlord, in a good and workmanlike manner, and in compliance with all
governmental requirements; and
(b) Landlord has received a waiver or release of lien claim, in
recordable form reasonably satisfactory to Landlord, from the contractor and
each subcontractor or vendor supplying the work or goods for the Tenant
Improvements. Landlord shall have no obligation to pay any portion of the
holdback sum to Tenant or Tenant's contractor if any work or materials are not
covered by a waiver or release of lien claim in satisfactory form.
3. DESIGN OF TENANT IMPROVEMENTS
At Tenant's expense, Tenant has retained the services of a qualified planner, X.
Xxxxxx Construction, to prepare the necessary drawings for Preliminary Plans and
supply the information necessary to complete the Final Plans for construction of
the Tenant Improvements. Tenant's Final Plans for Tenant Improvements for the
Premises prepared by X. Xxxxxx Construction dated February 22, 1996 have been
delivered to and approved by Landlord.
3
71
OFFICE LEASE AGREEMENT
Dated February 28, 1996
between
Grand Pacific Limited Partnership,
a Washington Limited Partnership, Landlord,
and
xxxx.xxx CORPORATION, a Washington corporation, Tenant
EXHIBIT 4
RULES AND REGULATIONS
1. Tenant will deposit all garbage in the receptacles the Landlord provides
for garbage and will not leave or accumulate any boxes, packing
material, or other trash of any kind on the premises or common areas.
2. Tenant shall not display any merchandise outside the premises at any
time without the prior written consent of the Landlord.
3. Tenant shall not erect or install any signs or advertising material
or devices in or about the premises without the previous approval of
the Landlord.
4. Tenant shall ensure that no animals are kept in or about the premises
and that the premises are not used for sleeping quarters.
5. Tenant shall not bring upon the premises any machinery, equipment, or
article or thing that by reason of its weight, size, or use might damage
the premises and that it will not at any time overload the floors of the
premises.
6. Any directory provided by the Landlord for the Building will be for
display of the name and location of tenants and Landlord reserves the
right to exclude any other names.
7. Tenant shall not place any new or additional locks on any doors of
the premises or rekey any existing locks without the consent of the
Landlord.
8. Landlord reserves the right to exclude or expel from the common areas
any person who, in the judgment of the
72
Landlord, is intoxicated, under the influence of drugs, or who shall in
any manner violate any of the rules and regulations.
9. Tenant shall not do or permit to be done within the premises anything
which would unreasonably annoy or interfere with the rights of other
tenants of the Building.
10. Tenant shall not permit its employees or invitees to loiter in or about
the common areas, or to obstruct any of the parking, truck maneuvering,
or other common areas, or to place, empty, or throw any rubbish, litter,
trash or material of any nature upon any common areas.
11. No storage of materials, equipment, or property of any kind is permitted
outside the premises (except in designated locations with Landlord's
consent) and any such property may be removed by Landlord at Tenant's
risk and expense.
12. Tenant shall not make or permit any use of the premises which may be
dangerous to life, limb or property, or any noise, odor or vibrations to
emit from the premises which are objectionable to Landlord or other
occupants of the Building; or to create, maintain, or permit a nuisance
or any violation of any regulation of any governmental agency thereon.
13. Tenant shall not commit or permit to be committed any waste, damage or
injury to the premises or other premises within the Building or parking,
loading and other common areas adjoining the Building and shall promptly
repair the same at its expense.
14. Tenant shall not at any time display a "For Rent" sign upon the
premises.
15. Tenant shall be responsible for keeping a copy of the Lease and
Landlord's current rules and regulations upon the premises.
16. Tenant shall not waste electricity or water and agrees to cooperate
fully with Landlord to assure the most effective and economical use of
utilities services as may be provided to the Building by Landlord.
2
73
17. Tenant shall keep Landlord advised of the current telephone numbers
of Tenant's employees who may be contacted in any emergency; i.e.,
fire, break-in, vandalism, etc. If Landlord shall deem it necessary
to respond to such emergency in Tenant's behalf, Tenant shall pay all
costs incurred for services ordered by Landlord to secure or
otherwise protect the premises and the contents thereof, including a
premium charge for any time spent by Landlord's employees in
responding to such an emergency.
18. In addition to all of the foregoing, the Tenant shall comply with the
use restrictions set forth in the Declaration of Condominium for the
Building, a copy of which Tenant has received.
3
74
OFFICE LEASE AGREEMENT
Dated February 28, 1996
between
Grand Pacific Limited Partnership,
a Washington Limited Partnership, Landlord,
and
xxxx.xxx CORPORATION, a Washington corporation, Tenant
EXHIBIT 5
DECLARATION OF CONDOMINIUM
[Attached]
75
Addendum A
To
OFFICE LEASE AGREEMENT
Dated February 28, 1996
between
Grand Pacific Limited Partnership,
a Washington Limited Partnership, Landlord,
and
xxxx.xxx CORPORATION, a Washington corporation, Tenant
Right of First Refusal to Lease Adjacent Space
This Addendum to the Office Lease Agreement is entered into between the
Landlord and Tenant executing this Addendum for the purpose of amending such
Lease as provided herein.
1. Grant of Right. On the terms and conditions set forth herein,
Landlord hereby grants Tenant a first right of refusal to lease approximately
one thousand seventy-two (1,072) square feet of space adjacent to the Premises
as outlined in blue on the Floor Plan attached to the Lease as Exhibit 2 (the
"Expansion Space").
2. Exercise of Right. If Landlord desires to lease all or any portion of
the Expansion Space to any third party and obtains from such third party a bona
fide offer to lease the Expansion Space on terms and conditions acceptable to
Landlord, then Landlord shall deliver notice of such offer to Tenant. Tenant
shall have ten (10) days from receipt of Landlord's notice to deliver written
notice to Landlord exercising its first right of refusal to lease no less than
all of the Expansion Space on the terms set forth herein below (the "Acceptance
Notice"). The failure of Tenant to deliver the Acceptance Notice exercising its
first right of refusal within said ten (10) day period shall result in the
termination of its first refusal right. Tenant shall have a single opportunity
to exercise its first right of refusal and, if Tenant fails to timely exercise
such right, Landlord shall have no obligation to notify Tenant of any subsequent
offers from third parties to lease the Expansion Space and all rights of Tenant
hereunder in respect to the Expansion Space shall terminate. Notwithstanding
anything contained herein to the contrary, Tenant shall have no right to
exercise its right of first refusal for occupancy of the Expansion Space after
the expiration of the initial Lease Term.
76
3. Terms of Lease. If Tenant properly exercises its first right of
refusal, it shall thereby bind itself to the lease of the Expansion Space for
the remainder of the Lease Term, as same may be extended. Each and every
provision of the Lease shall remain unchanged and shall apply to the Expansion
Space in full force and effect, including Tenant's obligation to pay periodic
Additional Charges, except as expressly provided herein below.
3.1. Occupancy Commencement Date. Tenant shall be entitled to
occupy the Expansion Space for the purpose of performing tenant improvements on
a date three (3) days after the Acceptance Notice is properly and timely
delivered to Landlord and Tenant has paid to Landlord the Security Deposit
described in Section 3.5 below.
3.2 Minimum Rent Commencement Date. Tenant's obligation to begin
paying monthly Minimum Rent for the Expansion Space shall begin on the earlier
of (i) ten (10) weeks from the date of delivery of the Acceptance Notice; and
(ii) the date that Tenant occupies the Expansion Space for purpose of conducting
its business therein.
3.3 Minimum Rent. The Minimum Monthly Rent payable by Tenant for
the Expansion Space beginning on the Effective Date, and until the next
succeeding Effective Date set forth below, shall be as follows:
Rent Per
Square Foot New Monthly
Effective Date Per Annum Minimum Rent
-------------- --------- ------------
April 15, 1996 $ 9.20* $ 821.87
April 15, 1997 $11.95** $1,067.53
April 15, 1998 $14.00 $1,250.67
April 15, 1999 $14.50 $1,295.33
April 15, 2000 $15.00 $1,340.00
(*Includes a Construction Credit of Three Dollars and 30/100
2
77
($3.30) per square foot per annum.)
(**Includes a Construction Credit of One and 5/100 Dollars ($1.05) per
square foot per annum.)
The Effective Date shall be adjusted to the anniversary of the Minimum
Rent Commencement Date as defined in Section 3.2 above if such Minimum Rent
Commencement Date occurs before or after April 15, 1996. Monthly Minimum Rent
payable by Tenant during any properly exercised extension of the Lease Term
shall be at the Market Minimum Rental for the Expansion Space, as determined in
accordance with Section 3.3.2.1 of the Lease. The parties agree that the
Expansion Space shall be deemed to contain one thousand seventy-two (1,072)
square feet and there shall be no adjustment in Minimum Rent set forth
hereinabove due to the fact that the Expansion Space contains less or more than
1,072 square feet.
3.4 Tenant's Share of Direct Costs. 2.76% shall be Tenant's
Percentage of Excess Expenses of the Commercial Complex attributable to the
Expansion Space.
3.5 Security Deposit. Upon exercising its first right of
refusal, Tenant shall deliver to Landlord a Security Deposit for the Expansion
Space equal to the monthly Minimum Rent payable by Tenant for the Expansion
Space for the last month of the then current term of the Lease. The Security
Deposit shall be held by Landlord in accordance with Section 4.7 of the Lease.
4. Tenant Improvements
4.1 Tenant Improvement Allowance. By exercising its first right
of refusal, Tenant agrees to accept the Expansion Space in its then current
condition, including any alterations that Landlord has performed after the date
hereof. Provided, however, that Landlord shall reimburse Tenant for an amount up
to the Improvement Allowance (defined hereinbelow) for tenant improvements
undertaken by Tenant in the Expansion Space. Landlord shall pay Tenant's costs
of such improvements on the terms and conditions set forth in Exhibit 3 of the
Lease. The Improvement Allowance shall be equal to Nine Thousand Six Hundred and
Forty-Eight and No/100 Dollars ($9,648.00) multiplied by a fraction, the
numerator of which is the total number of months remaining in the initial term
of the Lease, and the denominator of which is sixty (60). Any calculations for
time periods which are
3
78
less than a full month shall be prorated based on a thirty (30) day month. All
improvements shall comply with the terms of Sections 10.2 and 10.3 of the Lease.
4.2 Plans and Specifications. All Tenant's plans for tenant
improvements shall be subject to approval by Landlord. Tenant's planner shall
ensure that the work shown on Tenant's plans is compatible with the basic
Building plans and that necessary Building modifications are included in
Tenant's plans. Such modifications shall be subject to the Landlord's approval
and the cost thereof shall be paid by Tenant. Such approval shall not be
unreasonably withheld. It is understood that the rejection of any such proposed
modification by any Historical Conservation Board or Agency shall not constitute
unreasonable disapproval by Landlord.
On or before the indicated dates, Tenant shall supply Landlord with the
following Tenant plans:
(a) Preliminary Plans: No later than twenty (20) days
after delivery of the Acceptance Notice, at the Tenant's expense, Tenant's
office planner shall deliver to Landlord for its approval one (1) signed black
line print of preliminary plans for improvements to the Expansion Space (the
"Preliminary Plans"). These shall be fully dimensioned floor plans showing
partition layout and identifying each room by use and by a number, and each door
by a number. The preliminary plans must clearly identify and locate equipment
requiring plumbing or special mechanical systems, area(s) subject to above
normal floor loads, special openings in the floor, and other major or special
features.
(b) Final Plans: No later than thirty (30) days after
delivery of the Acceptance Notice, at Tenant's expense, Tenant's office planner
shall deliver to Landlord for its approval one (1) reproducible and one (1)
black line print of the final plans for improvements to the Expansion Space (the
"Final Plans"), which shall be signed by Tenant and shall incorporate such
information as Landlord may reasonably request.
5. Confirmation of Terms. Except as expressly provided herein, all other
provisions of the Lease and the Exhibits and Addenda thereto shall remain as set
forth therein. In the event of a conflict between this Addendum and the Lease
proper, the provisions of the Lease proper shall prevail.
4
79
LANDLORD: TENANT:
GRAND PACIFIC LIMITED PARTNERSHIP, xxxx.xxx CORPORATION, a
a Washington limited partnership Washington corporation
By WHITEHALL CAPITAL CORPORATION,
a Washington corporation
By ______________________
Its __________________
By _____________________________
Its _________________________
GUARANTOR'S CONSENT AND ACKNOWLEDGEMENT
The undersigned, Xxx Fine ("Guarantor"), hereby acknowledges and
confirms that he has read this Amendment, and that he consents and agrees to its
terms. Guarantor further acknowledges and confirms that this Amendment neither
amends nor diminishes in anyway the obligations that Guarantor owes to Landlord
pursuant to the terms and conditions of that certain guarantee dated February
28, 1996 (the "Guarantee") executed by Guarantor in Landlord's favor, and that
the Guarantee continues in full force and effect.
DATED this _____ day of March, 1997.
5
80
______________________________
Xxx Fine
I, _______________________ , spouse of Xxx Fine, have read the
foregoing Consent and Acknowledgment and understand its terms and conditions. I
hereby acknowledge and consent to the execution of said Consent and
Acknowledgment by Xxx Fine on behalf of himself separately and on behalf of our
joint marital community, and I acknowledge that said Consent and Acknowledgment
is binding on our joint marital community.
DATED this ______ day of March, 1997.
______________________________
Print Name: __________________
