1
EXHIBIT 10.11
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00 XXXXX XXXXXXX
Xxxxxxx, Xxxxxxxxxx 00000
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LEASE AGREEMENT
BETWEEN
XXXXXXX PLACE, LLC
Landlord
And
FREESHOP INTERNATIONAL, INC.
Tenant
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TABLE OF CONTENTS
PAGE
1. LEASE DATA AND EXHIBITS............................................... 1
(a) BUILDING......................................................... 1
(b) PREMISES......................................................... 1
(c) TENANT'S PERCENTAGE OF THE BUILDING.............................. 1
(d) COMMENCEMENT DATE................................................ 1
(e) EXPIRATION DATE.................................................. 1
(f) RENT............................................................. 1
(g) SECURITY DEPOSIT................................................. 2
(h) PARKING.......................................................... 2
(i) NOTICE ADDRESSES................................................. 2
(j) EXHIBITS......................................................... 2
2. PREMISES.............................................................. 2
3. COMMENCEMENT AND EXPIRATION DATES..................................... 2
(a) COMMENCEMENT DATE................................................ 2
(b) TENANT OBLIGATIONS............................................... 2
(c) TENANT TERMINATION RIGHT......................................... 3
(d) CONFIRMATION OF COMMENCEMENT DATE................................ 3
(e) EXPIRATION DATE.................................................. 3
4. RENT.................................................................. 3
5. SECURITY DEPOSIT...................................................... 3
6. USES.................................................................. 3
7. SERVICES AND UTILITIES................................................ 4
(a) STANDARD SERVICES................................................ 4
(b) INTERRUPTION OF SERVICES......................................... 4
(c) ADDITIONAL SERVICES.............................................. 4
(d) SECURITY SERVICES................................................ 5
8. COSTS OF OPERATIONS AND REAL ESTATE TAXES............................. 4
(a) DEFINITIONS...................................................... 5
(b) BASE AMOUNTS..................................................... 6
(c) ADDITIONAL RENT FOR SERVICE AND UTILITY COSTS.................... 7
(d) ADDITIONAL RENT FOR REAL PROPERTY TAXES.......................... 7
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(e) CALCULATIONS.......................................................8
(f) FURTHER ADJUSTMENT.................................................8
(g) BASE RENT..........................................................8
(i) PERSONAL PROPERTY TAXES............................................8
9. TENANT IMPROVEMENTS AND ALTERATIONS.....................................8
(a) TENANT IMPROVEMENTS................................................8
(b) ALTERATIONS........................................................8
10. CARE OF PREMISES........................................................9
(a) TENANT'S MAINTENANCE...............................................9
(b) LANDLORD'S MAINTENANCE.............................................9
11. ACCEPTANCE OF PREMISES..................................................9
12. ACCESS.................................................................10
13. DAMAGE OR DESTRUCTION..................................................10
(a) DAMAGE AND REPAIR.................................................10
(b) DESTRUCTION DURING LAST YEAR OF TERM..............................10
(c) BUSINESS INTERRUPTION.............................................10
(d) TENANT IMPROVEMENTS...............................................10
(e) EXPRESS AGREEMENT.................................................11
14. WAIVER OF SUBROGATION..................................................11
15. INDEMNIFICATION........................................................11
16. INSURANCE..............................................................11
(a) LIABILITY INSURANCE...............................................11
(b) PROPERTY INSURANCE................................................11
(c) INSURANCE POLICY REQUIREMENTS.....................................11
17. ASSIGNMENT AND SUBLETTING..............................................12
(a) ASSIGNMENT OR SUBLEASE............................................12
(b) ASSIGNEE OBLIGATIONS..............................................13
(c) SUBLESSEE OBLIGATIONS.............................................13
18. SIGNS..................................................................13
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PAGE
19. LIENS AND INSOLVENCY ............................................... 13
(a) LIENS ......................................................... 13
(b) INSOLVENCY....................................................... 13
20. DEFAULT .............................................................. 13
(a) CUMULATIVE REMEDIES.............................................. 13
(b) TENANT'S RIGHT TO CURE........................................... 13
(c) VACATION AND ABANDONMENT......................................... 14
(d) LANDLORDS RE-ENTRY............................................... 14
(e) RELETTING THE PREMISES........................................... 14
(f) WAIVER OF REDEMPTION RIGHTS...................................... 14
(g) NONPAYMENT OF ADDITIONAL RENT.................................... 15
21. PRIORITY.............................................................. 15
22. SURRENDER OF POSSESSION............................................... 15
23. REMOVAL OF PROPERTY................................................... 15
(a) SIGNS AND PERSONAL PROPERTY...................................... 15
(b) ALTERATIONS...................................................... 15
24. NON-WAIVER............................................................ 15
25. HOLDOVER.............................................................. 16
26. CONDEMNATION.......................................................... 16
(a) ENTIRE TAKING.................................................... 16
(b) CONSTRUCTIVE TAKING OF ENTIRE PREMISES........................... 16
(c) PARTIAL TAKING................................................... 16
(d) AWARDS AND DAMAGES............................................... 16
27. NOTICES............................................................... 16
28. COSTS AND ATTORNEYS' FEES............................................. 17
29. LANDLORD'S LIABILITY.................................................. 17
30. LANDLORD'S CONSENT.................................................... 17
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31. ESTOPPEL CERTIFICATES..................................................17
32. TRANSFER OF LANDLORD'S INTEREST........................................17
33. RIGHT TO PERFORM.......................................................17
34. AUTHORITY..............................................................18
(a) CORPORATE AUTHORITY...............................................18
(b) PARTNERSHIP AUTHORITY.............................................18
35. OPTION TO RENEW........................................................18
36. RIGHT OF FIRST OPPORTUNITY.............................................18
37. GENERAL................................................................18
(a) HEADINGS..........................................................18
(b) HEIRS AND ASSIGNS.................................................18
(c) NO BROKERS........................................................18
(d) ENTIRE AGREEMENT..................................................19
(e) SEVERABILITY......................................................19
(f) OVERDUE PAYMENTS..................................................19
(g) FORCE MAJEURE.....................................................19
(h) RIGHT TO CHANGE PUBLIC SPACES.....................................19
(i) GOVERNING LAW.....................................................19
(j) BUILDING DIRECTORY................................................19
(k) BUILDING NAME.....................................................20
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LEASE AGREEMENT
95 SOUTH XXXXXXX
THIS LEASE made this 23rd day of September, 1997, between XXXXXXX PLACE
LLC, a Washington limited liability company ("Landlord"), and FREESHOP
INTERNATIONAL, INC. ("Tenant").
As parties hereto, Landlord and Tenant agree:
1. LEASE DATA AND EXHIBITS. The following terms as used herein shall
have the meanings provided in this Section 1, unless otherwise specifically
modified by provisions of this Lease.
(a) BUILDING. The improvements situated on a portion of the real
property (the "Property") more particularly described on Exhibit A attached
hereto and incorporated herein by reference, with a postal address of 00 Xxxxx
Xxxxxxx, Xxxxxxx, Xxxxxxxxxx 00000. All of the structures on the property are
referred to herein as the "Building."
(b) PREMISES. Consisting of the 9,670 square feet of office floor
area on the third floor and 2,117 square feet of balcony floor area of the
Schwabacher Warehouse Building, as outlined on the floor plan(s) attached
hereto as Exhibit B, attached hereto and incorporated herein by reference,
including tenant improvements, if any, as described in Exhibit C, attached
hereto and incorporated herein by reference.
(c) TENANT'S PERCENTAGE OF THE BUILDING. _____% calculated by
dividing the area of the Premises (________ net rentable square feet) by the
area of the Building utilized for office space (______ net rentable square
feet). In the event the rentable area of the Premises or the rentable area of
the Building is altered, Landlord shall adjust "Tenant's Percentage of the
Building" to properly reflect such event.
(d) COMMENCEMENT DATE. The earlier of October 15, 1997, or the date
Tenant occupies the Premises.
(e) EXPIRATION DATE. September 30, 2000.
(f) RENT. The rental per month set forth below which is payable on
or before the first day of each month. Additional Rent shall be adjusted from
time to time as provided in Section 7 and Section 8 hereof. Tenant has
deposited with Landlord on the date hereof $5,238.00 to be applied to the first
Rent payment due hereunder.
Office Space:
Months Monthly Rate $/RSF/Year
------ ------------ ----------
1-3 $ 5,238.00 $ 6.50
4-12 $16,117.00 $20.00
13-24 $16,923.00 $21.00
25-36 $17,728.00 $22.00
Tenant will pay to Landlord in addition to the monthly rate above of
$5,238.00 for months 1-3, an amount equal to $10,879.00 per month for months 1-3
totaling $32,637.00 in Tenant's common stock valued at today's value of $0.41
per share or 79,602 shares.
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Balcony Space:
Months Monthly Rate $/RSF/Year
------ ------------ ----------
1-36 $705.66 $4.00
(g) SECURITY DEPOSIT. $17,728.00.
(h) PARKING. Tenant shall have the right to lease ten (10) parking
stalls in the parking garage portion of the Building on an unassigned basis at
the prevailing monthly rates as established by Landlord from time to time. The
leasing of parking stalls by Tenant shall be subject to such rules and
regulations as Landlord or its parking operator may adopt from time to time. In
addition to the above-referenced ten (10) parking stalls, Landlord will provide
up to twenty-five (25) parking stalls on a month-to-month basis at market
rates; until such time that Landlord, at Landlord's sole discretion, needs up
to said twenty-five (25) parking stalls for other building purposes. Landlord
agrees that such time will not be prior to August 31, 1998. If Landlord needs
such stalls for other building purposes, Landlord agrees to use its best
efforts to assist Tenant in securing, at Tenant's sole cost and expense,
additional parking stalls in the immediate vicinity of the Building.
(i) NOTICE ADDRESSES.
Landlord: 00 Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
______________________________
Tenant: ______________________________
______________________________
______________________________
(j) EXHIBITS. The following exhibits or riders are made a part of
this Lease:
Exhibit A - Legal Description of the Property
Exhibit B - Floor Plan of Premises
Exhibit C - Tenant Improvements
Exhibit D - Memorandum of Lease
Exhibit E - Additional Terms of Lease
2. PREMISES. Landlord does hereby lease to Tenant, and Tenant does
hereby lease from Landlord, upon the terms and conditions herein set forth, the
Premises described in Section 1(b) hereof as shown on Exhibit B, together with
the appurtenances, including without limitation the right to use, in common
with others, the lobbies, elevators and other common areas in the Building
located on the Property.
3. COMMENCEMENT AND EXPIRATION DATES.
(a) COMMENCEMENT DATE. The Commencement Date shall be the earlier of
the date specified in Section 1(d) or the date Tenant occupies the Premises.
(b) TENANT OBLIGATIONS. If Tenant's tenant improvements are not
completed on the Commencement Date due to the failure of Tenant to fulfill any
obligation pursuant to the terms of this Lease or any exhibit hereto, the Lease
shall be deemed to have commenced upon the Commencement Date.
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(c) TENANT TERMINATION RIGHT. In the event, due to delays from any
cause other than Tenant's failure to comply with the terms of this Lease, the
Premises are not available for occupancy by Tenant within ninety (90) days
following the date specified in Section 1(d), Tenant may terminate this Lease
by written notice. Termination under this Section 3(c) shall be Tenant's sole
remedy for such delay and Tenant shall have no other rights or claims hereunder
at law or in equity.
(d) CONFIRMATION OF COMMENCEMENT DATE. In the event the Commencement
Date is established as a later or earlier date than the date provided in
Section 1(d) hereof, Landlord shall confirm the Commencement Date to Tenant in
writing and, at Landlord's request the parties will execute a Memorandum of
Lease in the form attached hereto as Exhibit D.
(e) EXPIRATION DATE. The Lease shall expire on the date specified in
Section 1(e).
4. RENT. Tenant shall pay Landlord without notice the Rent stated in
Section 1(f) hereof and Additional Rent as provided in Section 7 and Section 8
and any other additional payments due under this Lease without deduction or
offset in lawful money of the United States in advance on or before the first
day of each month at Landlord's Notice Address set forth in Section 1(i)
hereof, or to such other party at such other place as Landlord may hereafter
from time to time designate in writing. Rent and Addition Rent for any partial
month at the beginning or end of the Lease term shall be adjusted for the
proportionate fraction of the month.
5. SECURITY DEPOSIT. As security for the full and faithful performance
of every covenant and condition of this Lease to be performed by Tenant, Tenant
has paid to Landlord the Security Deposit as specified in Section 1(g) hereof,
receipt of which is hereby acknowledged. If Tenant shall default with respect
to any material covenant or condition of this Lease, including but not limited
to the payment of Rent, Additional Rent or any other payment due under this
Lease, Landlord may apply all or any part of the Security Deposit to the
payment of any sum in default or any other sum which Landlord may be required
or may in its reasonable discretion deem necessary to spend or incur by reason
of Tenant's default. In such event, Tenant shall, within five (5) days of
written demand therefor by Landlord, deposit with Landlord the amount so
applied. If Tenant shall have fully complied with all of the covenants and
conditions of this Lease, but not otherwise, the amount of the Security Deposit
then held by Landlord shall be repaid to Tenant (or, at Landlord's option, to
the last assignee of Tenant's interest hereunder) within thirty (30) days after
the expiration or sooner termination of this Lease. In the event of Tenant's
default under this Lease, Landlord's right to retain the Security Deposit shall
be deemed to be in addition to any and all other rights and remedies at law or
in equity available to Landlord. Landlord shall not be required to keep any
Security Deposit separate from its general funds and Tenant shall not be
entitled to any interest thereon.
6. USES. The third floor office portion of the Premises are to be used
only for general office purposes, and the balcony portion of the Premises may
only be used for storage and related business purposes ("Permitted Uses"), and
for no other business or purpose without the prior written consent of Landlord,
which consent may be reasonably withheld if Landlord, in its sole discretion,
determines that any proposed use is inconsistent with or detrimental to the
maintenance and operation of the Building as a first-class office building in
Seattle, Washington or is inconsistent with any restriction on use of the
Premises, the Building or the Property contained in any lease, mortgage or other
agreement or instrument by which the Landlord is bound or to which any of such
property is subject. Tenant shall not commit any act that will increase the then
existing rate of insurance on the Building without Landlord's consent. Tenant
shall promptly pay upon demand the amount of any increase in insurance rates
caused by any act or acts of Tenant. Tenant shall not commit or allow to be
committed any waste upon the Premises, or any public or nuisance or other act
which disturbs the quiet enjoyment of any other tenant in the Building or which
is unlawful. Tenant shall not, without the written consent of Landlord, use any
apparatus, machinery or device in or about the Premises which will cause any
substantial noise, vibration or fumes. If any of Tenant's office machines or
equipment should disturb the quiet enjoyment of any other tenant in the
Building, then Tenant shall provide adequate insulation or take other action as
may be necessary to eliminate the disturbance.
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Tenant shall comply with all laws relating to its use or occupancy of the
Premises and shall observe such reasonable rules and regulations (not
inconsistent with the terms of this Lease) as may be adopted and made available
to Tenant by Landlord from time to time for the safety, care and cleanliness of
the Premises or the Building, and for the preservation of good order therein.
7. SERVICES AND UTILITIES.
(a) STANDARD SERVICES. Landlord shall cause to be maintained the
Premises and the public and common areas of the Building, such as lobbies,
elevators, stairs, corridors and restrooms, in reasonably good order and
condition consistent with the operation and maintenance of the Building as a
first-class office building in Seattle, Washington, except for damage
occasioned by any act or omission of Tenant or Tenant's officers, contractors,
agents, invitees, licensees or employees, the repair of which damage shall be
paid by Tenant. Landlord shall furnish the Premises with electricity for normal
office use, including lighting and operation of personal computers, low power
usage office machines, water and elevator service at all times during the term
of the Lease. Landlord shall also provide lamp replacement service for
building standard light fixtures, toilet room supplies, window washing at
reasonable intervals and customary building janitorial service five (5) days
each week. No janitorial service shall be provided Saturdays, Sundays or legal
holidays. The Rent stated in Section 1(f) hereof does not include the costs of
any janitorial or other services provided or caused to be provided by Landlord
to Tenant which are in addition to the services ordinarily provided Building
tenants and such costs for additional services, if any, shall be paid by Tenant
as Additional Rent on the first day of the month following the month in which
such additional services are provided.
From 7:00 a.m. to 6:00 p.m. on weekdays and from 8:00 a.m. to 1:00
p.m. on Saturdays, excluding legal holidays ("Normal Business Hours"), Landlord
shall furnish to the Premises heat and air conditioning at times other than
Normal Business Hours and the cost of such services as established by Landlord
shall be paid by Tenant as Additional Rent. During other than Normal Business
Hours, Landlord may restrict access to the Building in accordance with the
Building's security system, provided that Tenant shall have at all times during
the term of this Lease (24 hours of all days) reasonable access to the Premises.
(b) INTERRUPTION OF SERVICES. Landlord shall not be liable for any
loss, injury or damage to person or property caused by or resulting from any
variation, interruption, or failure of such service due to any cause whatsoever,
unless such loss, injury or damage is caused by Landlord's negligence. No
temporary interruption or failure of such services incident to the making of
repair, alterations or improvements for a reasonable duration, or due to
accident, strike or conditions or events beyond Landlord's reasonable control
shall be deemed an eviction of Tenant or relieve Tenant from any Tenant's
obligations hereunder.
(c) ADDITIONAL SERVICES. The Building Standard mechanical system is
designed to accommodate heating loads generated by lights and equipment using
up to 3.0 xxxxx per square foot. Before installing lights and equipment in the
Premises which in the aggregate exceed such amount, Tenant shall obtain the
written permission of Landlord. Landlord may refuse to grant such permission
unless Tenant shall agree to pay the costs of Landlord for installation of
supplementary air conditioning capacity or electrical systems as necessitated by
such equipment or lights. In addition, Tenant shall in advance, on the first day
of each month during the Lease term, pay Landlord the reasonable amount
estimated by Landlord as the cost of furnishing electricity for the operation of
such equipment or lights and the reasonable amount estimated by Landlord as the
cost of operation and maintenance of supplementary air conditioning units
necessitated by Tenant's use of such equipment or lights. The Rent stated in
Section 1(f) hereof does not include any amount to cover the cost of furnishing
electricity or such additional air conditioning for such purposes and such costs
shall be paid by Tenant as Additional Rent. 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 electrical, heating, ventilation and
air conditioning systems
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resulting from such equipment and lights and from Tenant's after-hours heating,
ventilation and air conditioning service requirements. Landlord and Tenant
shall mutually agree upon the cost of a monitoring/metering system in the
Premises prior to installation. Tenant shall comply with Landlord's
instructions for the use of thermostats in the Building.
(d) SECURITY SERVICES. Landlord will provide security guards to
patrol the Building and parking garage 24 hours per day. In addition, such
security guards will be available to escort personnel to and from the Building
upon request at any time of day or night. Entrance to the Building after hours
will be controlled by a computerized cardkey entry/exit system which
electronically records who enters and exits the Building, and also the date and
time of entry. Landlord will provide CATV cameras to monitor the access points
of the Building.
8. COSTS OF OPERATIONS AND REAL ESTATE TAXES.
(a) DEFINITIONS. In addition to the Rent provided in Section 1(f) of
this Lease, Tenant shall pay to Landlord increases under this Section 8 as
"Additional Rent," utilizing the following definitions.
(i) "OPERATING COSTS" shall include Real Property Taxes,
Services and Utility Costs.
(1) "REAL PROPERTY TAXES" shall mean taxes on real
property and personal property; charges and assessments (or any installments
thereof due during the Lease Year) levied with respect to the Property, the
Building, any improvements, fixtures and equipment, and all other property of
Landlord, real or personal, used directly in the operation of the Building and
located in or on the Building; and any taxes levied or assessed (or any
installment thereof due during the Lease Year) in addition to or in lieu of, in
whole or in part, such real property or personal property taxes, or any other
tax upon leasing of the Building or rents collected, but not including any
federal or state income, estate, inheritance or franchise tax.
(2) "SERVICE AND UTILITY COSTS" shall mean all other
expenses paid or incurred by Landlord for obtaining services and products for
maintaining, operating and repairing the Building and the personal property used
in conjunction therewith, including, without limitation, the costs of refuse
collection, water, sewer and other utilities services, electricity, gas and
other similar energy sources, supplies, janitorial and cleaning services, window
washing, landscape maintenance, services of independent contractors,
compensation (including employment taxes and fringe benefits) of all persons who
perform duties in connection with the operation, maintenance and repair of the
Building, its equipment and the Property upon which it is situated, insurance
premiums, licenses, permits, and inspection fees, customary management fees,
legal and accounting expenses and any other reasonable expenses or charges
whether or not hereinabove described, which in accordance with generally
accepted accounting and management practices would be considered an expense of
maintaining, operating or repairing the Building, excluding or deducting, as
appropriate:
(A) Costs of any special services rendered to individual
tenants (including Tenant);
(B) Depreciation or amortization of costs required to be
capitalized in accordance with generally accepted accounting practices (except
other Operating Costs shall include amortization of capital improvements made
subsequent to the initial development of the Building which are designed with a
reasonable probability of improving the operating efficiency of the Premises or
the Building, provided that such amortization expense shall not exceed
reasonably expected savings in operating costs resulting from such capital
improvements).
(C) Expenses incurred in leasing to or procuring new
tenants;
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(D) Interest or amortization payments on any mortgage
on the Premises or the Building;
(E) Expenses for repairs or other work occasioned by
fire, windstorm or other insured casualty; and
(F) Legal expenses incurred in enforcing the terms of
any lease.
(ii) "LEASE YEAR" shall mean the twelve month period
commencing January 1 and ending December 31.
(iii) ACTUAL OPERATING COSTS.
(A) "ACTUAL SERVICE AND UTILITY COSTS" shall mean the
actual expenses paid or incurred by Landlord for Service and Utility Costs
during any Lease Year of the term hereof.
(B) "ACTUAL REAL PROPERTY TAXES" shall mean the
amount of Real Property Tax paid or incurred by Landlord during any Lease Year
of the term hereof.
(iv) ACTUAL OPERATING COSTS ALLOCABLE TO THE PREMISES.
(A) "ACTUAL SERVICE AND UTILITY COSTS ALLOCABLE TO
THE PREMISES" shall mean the Tenant's share of the Actual Service and Utility
Costs determined by multiplying Tenant's Percentage of the Building described
in Section 1(c) by the Actual Service and Utility Costs except that, to the
extent such costs vary depending upon occupancy of the areas served, the
variable portion shall be allocated in accordance with Tenant's share of the
weighted average leased area of the Building during the Lease Year.
(B) "ACTUAL REAL PROPERTY TAXES ALLOCABLE TO THE
PREMISES" shall mean the Tenant's share of the Actual Real Property Taxes
determined by multiplying Tenant's Percentage of the Building described in
Section 1(c) by the Actual Real Property Taxes.
(v) ESTIMATED OPERATING COSTS ALLOCABLE TO THE PREMISES.
(A) "ESTIMATED SERVICE AND UTILITY COSTS ALLOCABLE TO
THE PREMISES" shall mean Landlord's estimate of Actual Service and Utility
Costs Allocable to the Premises for the following Lease Year to be given by
Landlord to Tenant pursuant to Section 8(c)(i) below.
(B) "ESTIMATED REAL PROPERTY TAXES ALLOCABLE TO THE
PREMISES" shall mean Landlord's estimate of Real Property Taxes Allocable to
the Premises for the following Lease Year to be given by Landlord to Tenant
pursuant to Section 8(c)(ii) below.
(vi) "BASE SERVICE YEAR" shall mean 1997.
(b) BASE AMOUNTS
(i) REAL PROPERTY TAXES BASE AMOUNT. For purposes of this
Section 8, the Real Property Taxes Base Amount for the initial lease term shall
be the Actual Real Property Taxes Allocable to the Premises for the Base
Service Year.
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(ii) SERVICE AND UTILITY COSTS BASE AMOUNT. For purposes of
this Section 8, the Service and Utility Costs Base Amount for the initial lease
term shall be an annualized amount equal to the Actual Service and Utility
Costs Allocable to the Premises for the Base Service Year.
(c) ADDITIONAL RENT FOR SERVICE AND UTILITY COSTS.
(i) ADDITIONAL RENT FOR ESTIMATED INCREASES IN SERVICE AND
UTILITY COSTS. At the beginning of each Lease Year after the Base Service Year,
during the term hereof, Landlord shall furnish Tenant a written statement of
the Estimated Service and Utility Costs Allocable to the Premises, for such
Lease Year, and a calculation of the Additional Rent as follows: One-Twelfth
(1/12) of the amount, if any, by which such amount exceeds the Service and
Utility Costs Base Amount shall be Additional Rent payable by Tenant as
provided in Section 4 for each month during such Lease Year. If at any time or
times during such Lease Year, it appears to Landlord that the Actual Service
and Utility Costs Allocable to the Premises will vary from the Estimated
Service and Utility Costs Allocable to the Premises by more than five percent
(5%) on an annual basis, Landlord may, by written notice to Tenant, revise its
estimate for such Lease Year and Additional Rent payments by Tenant for the
remainder of such Lease Year shall be based on such revised estimate.
(ii) ACTUAL SERVICE AND UTILITY COSTS. Within ninety (90)
days after the close of each Lease Year during the term hereof for which an
estimated statement was delivered to Tenant pursuant to subsection (c)(i), or
as soon thereafter as practicable, Landlord shall deliver to Tenant a written
statement setting forth the Actual Service and Utility Costs Allocable to the
Premises during the preceding Lease Year or such prorated portion thereof if
this Lease commences or terminates on a day other than the first or last day of
a Lease Year (based on a 365-day Lease Year). If such costs for any Lease Year
exceed Estimated Service and Utility Costs Allocable to the Premises paid by
Tenant to Landlord pursuant to subsection (c)(i), Tenant shall pay the amount
of such excess to Landlord as Additional Rent within thirty (30) days after
receipt of such statement by Tenant. If such statement shows such costs to be
less than the amount paid by Tenant to Landlord pursuant to subsection (c)(i),
then the amount of such overpayment by Tenant shall be credited by Landlord to
the next Rent payable by Tenant or, if the Lease has terminated, will be paid
to Tenant.
(d) ADDITIONAL RENT FOR REAL PROPERTY TAXES.
(i) ADDITIONAL RENT FOR ESTIMATED INCREASES IN REAL
PROPERTY TAXES. At the beginning of each Lease Year during the term hereof,
Landlord shall furnish Tenant a written statement of the Estimated Real
Property Taxes Allocable to the Premises, for such Lease Year, and a
calculation of the Additional Rent as follows: One-twelfth (1/12) of the
amount, if any, by which such amount exceeds the Real Property Taxes Base
Amount shall be Additional Rent payable by Tenant as provided in Section 4 for
each month during such Lease Year. If at any time or times during such Lease
Year it appears to Landlord that the Actual Real Property Taxes Allocable to
the Premises will vary from the Estimated Real Property Taxes Allocable to the
Premises by more than five percent (5%) on an annual basis, Landlord shall, by
written notice to Tenant, revise its estimate for such Lease Year and
Additional Rent payments by Tenant for the remainder of such Lease Year shall
be based on such revised estimate.
(ii) ACTUAL REAL PROPERTY TAXES. Within ninety (90) days
after the close of each Lease Year during the term hereof for which an
estimated statement was delivered to Tenant pursuant to subsection (d)(i), or
as soon thereafter as practicable, Landlord shall deliver to Tenant a written
statement setting forth the Actual Real Property Taxes Allocable to the
Premises during the preceding Lease Year or such prorated portion thereof if
this Lease commences or terminates on a day other than the first or last day of
a Lease Year (based on a 365-day Lease Year). If such taxes for any Lease Year
exceed Estimated Real Property Taxes Allocable to the Premises paid by Tenant
to Landlord pursuant to subsection (d)(i), Tenant shall pay the amount of such
excess to Landlord as Additional Rent within thirty (30) days after receipt of
such statement by tenant. If
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such statement shows such cost to be less than the amount paid by Tenant to
Landlord pursuant to subsection (d)(i), then the amount of such overpayment by
Tenant shall be credited by Landlord to the next Rent payable by Tenant or, if
the Lease has terminated, will be paid to Tenant.
(e) CALCULATIONS. The calculation of Actual Costs and Taxes and
Estimated Costs and Taxes Allocable to the Premises shall be made by Landlord.
Landlord or its agent shall keep records in reasonable detail showing and
supporting all expenditures made for the items enumerated above, which records
and receipts shall be available for inspection by Tenant at any reasonable time.
(f) FURTHER ADJUSTMENT. In the event the Building for any Lease Year
is not fully occupied then the Estimated Costs and Actual Costs for such year
shall be proportionately adjusted by Landlord to reflect those costs which would
have occurred had the Building been fully occupied during such year.
(g) BASE RENT. Notwithstanding anything to the contrary in this
Section 8, the Rent payable by Tenant shall in no event be less than the Rent
specified in Section 1(f) of this Lease.
(i) PERSONAL PROPERTY TAXES. Tenant shall pay, prior to delinquency,
all Personal Property Taxes payable with respect to all personal property of
Tenant located on the Premises or the Building and promptly, upon request of
Landlord, shall provide written proof of such payment. As used herein, "personal
property of Tenant" shall include all improvements which are paid for by Tenant.
"Personal Property Taxes" shall include all property taxes assessed against the
property of Tenant, whether assessed as real or personal property.
9. TENANT IMPROVEMENTS AND ALTERATIONS. Prior to the Commencement Date,
Landlord will, at its sole expense, paint the office space and clean the carpet
in the Premises. In addition to this work, Landlord will provide Tenant with a
tenant improvement allowance of $6.00 per rentable square feet of office space
leased or $58,020.00. Said allowance is to be used solely for the improvement of
the Premises and must be used within the first eighteen (18) months of the Lease
term after which it becomes null and void. To utilize such allowance, Tenant
will provide Landlord with written notice of the specific improvements Tenant
desires to be made. It is agreed that Landlord, or a contractor reasonably
approved in good faith by Landlord, will construct all such improvements, and
Tenant will pay the cost of any improvements in excess of the tenant improvement
allowance.
(a) TENANT IMPROVEMENTS. Landlord shall deliver the Premises to
Tenant with the improvements shown and/or described in Exhibit C, and will
provide an allowance for additional improvements as described in Exhibit C.
All of the work to be performed by Landlord shall be completed in a
xxxxxxx-like manner in conformance with all applicable building codes, laws,
rules and regulations. Tenant shall, subject to the provisions of paragraph (b)
below, also have the right to construct and install at its sole cost and expense
such additional tenant improvements as are in its judgment necessary or
convenient for its use of the Premises.
(b) ALTERATIONS. Tenant shall not make any structural alterations or
improvements in or additions ("Alterations") to the Premises or make any changes
to locks on doors or add to, disturb or in any way change any of the wiring or
plumbing in the Premises or the Building, without first obtaining the written
consent of Landlord, and, when appropriate, in accordance with plans and
specifications approved by Landlord, which consent shall not be unreasonably
withheld. All such Alterations shall be at the sole cost and expense of Tenant
and shall be performed by contractors or mechanics approved by Landlord, which
consent shall not be unreasonably withheld. All work with respect to any such
Alterations shall be done in good and workmanlike manner, shall be of a quality
equal to or exceeding the then existing construction standards for the Building
and must be of a type, and the floors and ceilings must be finished in a manner,
customary for general office use and
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other uses common to similar office buildings in the vicinity. Such Alterations
shall be diligently prosecuted to completion. All such Alterations shall be
made strictly in accordance with all laws, regulations and ordinances relating
thereto, and no interior improvements installed by Landlord in the Premises
(including Tenant's Work) may be removed unless the same are promptly restored
to a condition similar or better. Landlord hereby reserves the right to require
any contractor or mechanic working the Premises to provide lien waivers and
liability insurance covering such Alterations to the Premises. Tenant shall
give Landlord ten (10) days' written notice of the commencement of any
Alterations and agrees to allow Landlord and its Lender to enter the Premises
at reasonable times and post appropriate notices to avoid liability to
contractors or material suppliers for payment for such Alterations.
Notwithstanding anything contained herein to the contrary. Tenant may make any
nonstructural interior Alterations that do not adversely affect the value of
the Premises, the structural integrity of the Building or any Building system
without Landlord's consent.
No Alterations shall adversely affect either the strength or exterior
appearance, or the mechanical, electric or plumbing services of the Building.
Tenant shall reimburse Landlord for any reasonable sums expended by Landlord
for examinations and approval of architectural or mechanical plans and
specifications of the Alterations. Tenant shall also reimburse Landlord for
reasonable direct costs incurred during any inspection of the Alterations. All
damages or injury done to the Premises or Building by Tenant or by any persons
who may be in or upon the Premises or Building with the express or implied
consent of Tenant, including but not limited to the cracking or breaking of any
glass of windows and doors, shall be paid for by Tenant and Tenant shall pay
for all damage to the Building caused by negligent acts or omissions of Tenant
or Tenant's officers, contractors, agents, invitees, licenses, or employees.
10. CARE OF PREMISES.
(a) TENANT'S MAINTENANCE. Tenant shall take good care of the
Premises throughout the term of the Lease.
(b) LANDLORD'S MAINTENANCE. Landlord shall make, at its sole cost
and expense, all repairs and replacements and perform all maintenance necessary
to keep the Premises, the Building and the common areas in good working order
and repair and to maintain the Building and Premises in a clean, safe and
tenantable condition comparable to other first class office buildings in
Seattle, Washington. This maintenance and repair shall include without
limitation the roof, foundation, exterior walls, interior walls, all structural
components, utility lines, all systems, equipment and facilities serving the
Premises and the Building, such as mechanical, electrical, HVAC, plumbing and
sewer, replacement of lighting tubes, lamp ballasts and bulbs, and
extermination and pest control when necessary, and snow and ice removal, unless
such repair is Tenant's responsibility pursuant to Section 10(a). Landlord's
work under this Section 10 shall be accomplished with the least possible amount
of interference with the conduct of Tenant's business and, to the extent
practicable, shall be done after normal business hours.
11. ACCEPTANCE OF PREMISES. If this Lease shall be entered into prior
to the completion of tenant improvements in the Premises, the acceptance of the
Premises by Tenant shall be deferred until Landlord informs Tenant of the
completion of such construction. Within ten (10) days ("Inspection Period")
after Landlord informs Tenant of such completion, Tenant shall make such
inspection of the Premises as Tenant deems appropriate. Except as otherwise
specified by Tenant in writing to Landlord within the Inspection Period, Tenant
shall be deemed to have accepted the Premises in their then condition. If, as a
result of such inspection, Tenant discovers minor deviations or variations from
the plans and specifications for Tenant's improvements of a nature commonly
found on a "punch list" (as the term is used in the construction industry),
Tenant shall during the Inspection Period, notify Landlord of such deviations.
Landlord shall promptly repair all punch list items. The existence of such
punch list items, provided the correction thereof does not unreasonably
interfere with Tenant's
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use of the Premises, shall not postpone the Commencement Date of this Lease or
the obligation of Tenant to pay Rent.
12. ACCESS. Tenant shall permit Landlord and its agents to enter into
and upon the Premises at all reasonable times upon timely notice to Tenant,
except in emergencies, for the purpose of inspecting the same or for the
purpose of cleaning, repairing, altering or improving the Premises or the
Building. Nothing contained in this Section 12 shall be deemed to impose any
obligation upon Landlord not expressly stated elsewhere in this Lease. When
reasonably necessary Landlord may temporarily close entrances, doors,
corridors, elevators or other facilities for a reasonable duration, without
liability to Tenant by reason of such closure and without such action by
Landlord being construed as an eviction of Tenant or release of Tenant from the
duty of observing and performing any of the provisions of this Lease. Landlord
shall have the right to enter the Premises upon timely notice to Tenant, except
in emergencies, for the purpose of showing the Premises to prospective tenants
within the period of one hundred eighty (180) days prior to the expiration or
sooner termination of the Lease term. Landlord will use its best efforts to
minimize the impact on Tenant's business of any entry by Landlord on the
Premises.
13. DAMAGE OR DESTRUCTION.
(a) DAMAGE AND REPAIR. If the Building or the Premises are
damaged by fire or any other cause to such extent that the cost of restoration,
as reasonably estimated by Landlord, will equal or exceed thirty percent (30%)
of the replacement value of the Building (exclusive of foundations) just prior
to the occurrence of the damage, or if insurance proceeds sufficient for
restoration are for any reason unavailable, then Landlord may no later than the
sixtieth day following the damage, give Tenant a notice of Landlord's election
to terminate this Lease. In the event of such election this Lease shall be
deemed to terminate on the third day after the giving of such notice, and
Tenant shall surrender possession of the Premises within a reasonable time
thereafter, and the Rent and Additional Rent shall be apportioned as of the
date of Tenant's surrender and any Rent paid for any period beyond such date
shall be repaid to Tenant. If the cost of restoration as estimated by Landlord
shall amount to be less than thirty percent (30%) of said replacement value of
the Building and insurance proceeds sufficient for restoration are available,
or if Landlord does not elect to terminate this Lease, Landlord shall restore
the Building and the Premises (to a functional unit similar to the Premises
prior to such damages) with reasonable promptness, subject to delays beyond
Landlord's control and delays in making of insurance adjustments by Landlord,
and Tenant shall have no right to terminate this Lease except as provided in
this Section 13. If the Premises are to be restored, the Rent shall be reduced,
based on the proportion of the square footage of the Premises rendered
untenantable, except in the event such damage resulted from or was contributed
to, directly or indirectly, by the act, fault or neglect of Tenant, Tenant's
officers, contractors, agents, employees, invitees or licensees, in which event
Rent shall xxxxx only to the extent Landlord receives proceeds from any rental
income insurance policy to compensate Landlord for loss of Rent hereunder.
(b) DESTRUCTION DURING LAST YEAR OF TERM. In case the Building
shall be substantially destroyed by fire or other cause at any time during the
last Lease Year of this Lease, either Landlord or Tenant may terminate this
Lease by written notice to the other party.
(c) BUSINESS INTERRUPTION. No damages, compensation or claim
shall be payable by Landlord for inconvenience, loss of business or annoyance
arising from any repair or restoration of any portion of the Premises or the
Building. Landlord shall use its best efforts to effect such repairs promptly.
(d) TENANT IMPROVEMENTS. Landlord will not be required to carry
insurance of any kind for any improvement paid for by Tenant as provided in
Exhibit C or for Tenant's furniture, furnishings, fixtures, equipment or
appurtenances of Tenant under this Lease and Landlord shall not be obligated to
repair any damage thereto or replace the same, unless such damage is caused by
Landlord's negligence.
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(e) EXPRESS AGREEMENT. The provisions of this Section 13 shall be
considered an express agreement governing any case of damage or destruction of
the Building or Premises by fire or other casualty.
14. WAIVER OF SUBROGATION. Whether any loss or damage to the Premises,
the Building, or any property therein, is due to the negligence of either
Landlord or Tenant, their agents or employees, or any other cause, Landlord and
Tenant do each hereby waive any rights each may have against the other on
account of any loss or damage arising from any risk actually covered by
insurance policies held by the damaged party. Each party shall use best efforts
to cause its insurance carriers to consent to the foregoing waiver of rights of
subrogation against the other party. This clause shall be effective if, and
only to the extent, that it does not impair any insurance carried by either
party, only if the required waiver of subrogation endorsements can be obtained
at a commercially reasonable cost, and only to the extent of proceeds actually
received.
15. INDEMNIFICATION. Each party shall indemnify and hold the other
harmless from and against all common law or statutory liabilities, damages,
injuries, obligations, losses, claims, civil actions, costs, or expenses,
including attorneys fees, arising with respect to Tenant, from any act,
omission, or negligence of Tenant or its officers, contractors, licensees,
agents, servants, employees, guests, or invitees, in or about the Building or
the Premises, with respect to Landlord, from any act, omission or negligence of
Landlord or its officers, agents and employees, occurring in or about the
Building or the Premises or with respect to either party arising from any
breach or default under this Lease. As part of such indemnity, each party
waives its immunity from suit under the provisions of RCW 51, et seq.
Neither party shall be liable for any loss or damage to persons or
property sustained by the other party or other persons, which may be caused by
theft, or by any act or neglect of any tenant or occupant of the Building or
any other third parties unless such loss or damage is due to the other party's
negligence.
16. INSURANCE.
(a) LIABILITY INSURANCE. Tenant shall, throughout the term of this
Lease and any renewal hereof, at its own expense, keep and maintain in full
force and effect, a policy of comprehensive general liability insurance
including a contractual liability endorsement covering Tenant obligations under
Section 15, insuring Tenant's activities upon, in or about the Premise, the
Building, or the Property, against claims of bodily injury or death or property
damage or loss with a limit of not less than One Million Dollars ($1,000,000)
combined single limit.
(b) PROPERTY INSURANCE. Tenant shall throughout the term of this
Lease and any renewal hereof at its own expense, keep and maintain in full
force and effect, what is commonly referred to as "all risk" coverage insurance
(but excluding earthquake and flood) on the leasehold improvements constructed
by Tenant in the Premises and on the personal property of Tenant in the
Premises in an amount not less than the current one hundred percent (100%)
replacement value thereof.
(c) INSURANCE POLICY REQUIREMENTS. All insurance required under this
Section 16 shall be with companies reasonably approved by Landlord. No
insurance policy required under this Section 16 shall be cancelled or reduced
in coverage and each insurance policy shall provide that it is not subject to
cancellation or a reduction in coverage except after thirty (30) days prior
written notice to Landlord.
Tenant shall deliver to Landlord on or before the Commencement Date
and from time to time thereafter, copies of policies of such insurance or
certificates evidencing the existence and amounts of same and naming Landlord
as additional insured thereunder. In no event shall the Limits of any insurance
policy required under Section 16 be considered as limiting the liability of
Tenant under this Lease.
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17. ASSIGNMENT AND SUBLETTING.
(a) ASSIGNMENT OR SUBLEASE. Tenant shall not assign, mortgage,
encumber or otherwise transfer this Lease or sublet the whole or any part of
the Premises without in each case first obtaining Landlord's prior written
consent. Such consent shall not be withheld except, (1) Landlord may withhold
its consent if in Landlord's judgment occupancy by any proposed assignee,
subtenant or other transferee; (i) is not consistent with the maintenance and
operation of a first-class office building due to the proposed occupant's
nature or manner of conducting business, (ii) is likely to cause disturbance to
the customary use and occupancy of the Building by other tenants, their
employees, customers, clients or other guests or visitors, or (iii) is not
reasonably deemed by Landlord to be financially responsible, (2) Landlord may
withhold, in its absolute and sole discretion, consent to any mortgage,
hypothecation, pledge or other encumbrance of any interest in this Lease by
Tenant or any subtenant, whereby this Lease or any interest therein becomes
collateral for any obligation of Tenant or any other person; and (3) Landlord
may withhold its consent to the extent Landlord determines necessary to comply
with a restriction on use of the Premises, the Building or the Property
contained in any lease, mortgage, or other agreement or instrument by which the
Landlord is bound or to which any of such property is subject. No such
assignment, subletting or other transfer shall relieve Tenant of any liability
under this Lease. Consent to any such assignment, subletting or transfer shall
not operate as a waiver of the necessity for consent to any subsequent
assignment, subletting or transfer. Landlord reserves the right to terminate
this Lease in the event of a requested assignment, subletting or transfer of
this Lease by Tenant. In the event less than the entire Premises are to be
subleased, Landlord retains the right to terminate this Lease with respect to
the portion of the Premises for which such consent is requested, at the proposed
effective date of such subletting, in which event Landlord shall enter into the
relationship of Landlord and Tenant with any such subtenant or assignee as to
the subleased portion, based on the rent (and/or other compensation) and the
term agreed to by such subtenant or assignee and otherwise upon the terms and
conditions of this Lease. In connection with an assignment or subletting, Tenant
shall pay the reasonable cost of processing such assignment or subletting,
including attorneys fees, upon demand of Landlord. Tenant shall provide Landlord
with copies of all assignments, subleases and assumption instruments.
If Tenant is a corporation, any transfer of this Lease by merger,
consolidation or liquidation, or any change in the ownership of, a majority of
its outstanding voting stock shall constitute an assignment for the purpose of
this Section 17.
Notwithstanding anything herein to the contrary, Landlord shall not
reasonably withhold its consent to the following transfers:
(i) the issuance and private placement of additional shares of
Tenant's corporate stock for the sole purpose of infusing venture capital
monies into the Tenant; or
(ii) any transfer of shares of stock of Tenant which are
publicly traded or listed or which constitute an initial public offering; or
(iii) any sale or merger by Tenant with a corporation which is
publicly traded; or
(iv) any sale or transfer of shares of Tenant's stock which
does not result in a change in the present control of Tenant by the person(s)
now owning a majority of the Tenant's shares.
If Tenant is a partnership, any transfer of this Lease by merger,
consolidation liquidation, dissolution, or any change in the ownership of a
majority of the partnership interests shall constitute an assignment for the
purpose of this Section 17.
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(b) ASSIGNEE OBLIGATIONS. As a condition to Landlord's approval
of any assignment, any potential assignee otherwise approved by Landlord shall
assume in writing all obligations of Tenant under this Lease and shall be
jointly and severally liable with Tenant for the payment of Rent and
performance of all terms, covenants and conditions of this Lease.
(c) SUBLESSEE OBLIGATIONS. Any sublessee shall assume all
obligations of Tenant as to the portion of the Premises which is subleased to
such sublessee and shall be jointly and severally liable with Tenant for rental
and other payments and performance of all terms, covenants and conditions of
such approved sublease.
18. SIGNS. Tenant shall not inscribe any inscription, or post, place,
or in any manner display any sign, graphics, notice, picture, placard or
poster, or any advertising matter whatsoever upon the glass panes or supports
of the windows and doors, or upon the exterior walls of the Premises or the
Building, or at any places visible (either directly or indirectly as an outline
or shadow on a glass pane) from anywhere outside the Premises without first
obtaining Landlord's written consent thereto, such consent to be at Landlord's
sole discretion. Any such consent by Landlord shall be upon the understanding
and condition that Tenant shall remove the same at the expiration or sooner
termination of this Lease and Tenant shall repair any damage to the Premises or
the Building caused thereby.
19. LIENS AND INSOLVENCY.
(a) LIENS. Tenant shall keep its interest in this Lease and any
property of Tenant in the Premises (other than unattached personal property),
the Premises, the Property and the Building free from all liens arising out of
any work performed or materials ordered or obligations incurred or on behalf of
Tenant and Tenant hereby indemnifies and holds Landlord harmless from any
liability from any such lien. In the event any lien is filed against the
Building, the Property or the Premises by any person claiming by, through or
under Tenant, Tenant shall, upon request of Landlord, at Tenant's expense,
immediately either cause such lien to be released of record or furnish to
Landlord a bond in form and amount and issued by a surety satisfactory to
Landlord, indemnifying Landlord, the Property and the Building against all
liability, costs and expenses, including attorneys fees, which Landlord may
incur as a result thereof. Provided that such bond has been furnished to
Landlord, Tenant, at its sole cost and expense and after written notice to
Landlord, may contest, by appropriate proceedings conducted in good faith and
with due diligence, any lien, encumbrance or charge against the Premises, the
Property or the Building arising from work done or materials provided to and for
Tenant, provided such proceedings suspend the collection thereof against
Landlord, and the Premises, Building and Property, and neither the Premises, the
Building, the Property nor any part thereof or interest therein is or will be in
any danger of being sold, forfeited or lost.
(b) INSOLVENCY. If Tenant becomes insolvent or voluntarily or
involuntarily bankrupt, or if a receiver, assignee or other liquidating officer
is appointed for the business of Tenant, Landlord at its option may terminate
this Lease and Tenant's right of possession under this Lease and in no event
shall this Lease or any rights or privileges hereunder be an asset of Tenant in
any bankruptcy, insolvency or reorganization proceeding.
20. DEFAULT.
(a) CUMULATIVE REMEDIES. All rights of Landlord and Tenant herein
enumerated shall be cumulative, and none shall exclude any other right or
remedy allowed by law. In addition to the other remedies in this Lease
provided, either party shall be entitled to restrain by injunction the
violation or attempted violation by the other party of any of the covenants,
agreements or conditions of this Lease.
(b) TENANT'S RIGHT TO CURE. Tenant shall have a period of ten
(10) business days from the day of written notice from Landlord to Tenant
within which to cure any default in the payment of Rent, Additional
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Rent or other sums due hereunder. Each party shall have a period of ten (10)
days from the date of written notice from the other party within which to cure
any other default hereunder, provided, however, that with respect to any such
default which cannot be cured within ten (10) days, the default shall not be
deemed to be uncured if the defaulting party commences to cure within ten (10)
days and for so long as such party is diligently prosecuting the cure thereof.
(c) VACATION AND ABANDONMENT. Vacation shall be defined as a
prolonged absence from the Premises. Abandonment shall be defined as an absence
from the Premises of five (5) business days or more while Tenant is in default
after the expiration of all cure periods. Any vacation or abandonment by Tenant
shall be considered a default with no right to cure, allowing Landlord to
re-enter the Premises under Section 20(d).
(d) LANDLORDS RE-ENTRY. Upon an uncured default of this Lease by
Tenant, Landlord, besides other rights or remedies it may have, at its option,
may enter the Premises or any part thereof, either with or without process of
law, and expel, remove or put out Tenant or any other persons who may be
thereon, together with all personal property found therein; and Landlord may
terminate this Lease, or it may from time to time, without terminating this
Lease and as agent of Tenant, rent the Premises or any part thereof for such
term or terms (which may be for a term less than or extending beyond the term
hereof), and at such rental or rentals and upon such other reasonable terms and
conditions as Landlord in its sole discretion may deem advisable, with the
right to repair, renovate, remodel, redecorate, alter and change the Premises,
Tenant remaining liable for any deficiency computed as hereinafter set forth.
In the case of any default, re-entry and/or dispossession, by summary
proceedings or otherwise, all Rent and Additional Rent shall become due
thereupon and be paid up to the time of such re-entry or dispossession together
with such expenses as Landlord may reasonably incur for attorneys fees,
advertising expenses, brokerage fees and/or putting the Premises in good order
or preparing the same for re-rental together with interest thereon as provided
in Section 35(f) hereof, accruing from the date of any such expenditure by
Landlord.
(e) RELETTING THE PREMISES. At the option of Landlord, rents
received by Landlord from such reletting shall be applied first to the payment
of any indebtedness from Tenant to Landlord other than Rent and Additional Rent
due hereunder; second, to the payment of any costs and expenses of such
reletting and including, but not limited to, attorneys fees and brokerage fees,
and to the payment of any repairs, reasonable renovations, reasonable
remodeling, reasonable redecoration, reasonable alterations and changes in the
Premises; third, to the payment of Rent and Additional Rent due and to become
due hereunder, and if after so applying said rents there is any deficiency in
the Rent or Additional Rent to be part by Tenant under this Lease, Tenant shall
pay any deficiency to Landlord monthly on the dates specified herein and any
payment made or suits brought to collect the amount of the deficiency for any
month shall not prejudice in any way the right of Landlord to collect the
deficiency for any subsequent month. The failure of Landlord to relet the
Premises or any part or parts thereof shall not release or affect Tenant's
ability hereunder. In no event shall Tenant be entitled to receive any excess
of net rents collected over sums payable by Tenant to Landlord hereunder. No
such re-entry or taking possession of the Premises shall be construed as an
election on Landlord's part to terminate this Lease unless a written notice of
such intention be given to Tenant. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for such pervious breach and default. Should Landlord at any time terminate
this Lease by reason of any default, in addition to any other remedy it may
have, it may recover from Tenant any deficiency in the Rent and Additional Rent
reserved in this Lease for the balance of the Term, plus all court costs and
attorneys fees incurred by Landlord in the collection of the same.
(f) WAIVER OF REDEMPTION RIGHTS. Tenant, for itself, and on
behalf of any and all persons claiming through or under it, including creditors
of all kinds, does hereby waive and surrender all rights and privilege which
they or any of them might have under or by reason of any present or future law,
to redeem the Premises or to have a continuance of this Lease for the term
hereof, as it may have been extended, after having
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been dispossessed or ejected therefrom by process of law or under the terms of
this Lease or after the termination of this Lease as herein provided.
(g) NONPAYMENT OF ADDITIONAL RENT. All costs and expenses which
Tenant assumes or agrees to pay to Landlord pursuant to this Lease shall be
deemed Additional Rent and, in the event of nonpayment thereof, Landlord shall
have all the rights and remedies herein provided for in case of nonpayment of
Rent.
21. PRIORITY. This Lease shall be subordinate to any first mortgage or
deed of trust (and any other mortgage or deed of trust upon the written
election of Landlord) now existing or hereafter placed upon the Property, the
Building or the Premises, created by or at the instance of Landlord, and to any
and all advances to be made thereunder and to interest thereon and all
modifications, renewals and replacements or extensions thereof ("Landlord's
Mortgage"), provided that, so long as Tenant is not in default under this
Lease, Tenant's peaceable possession of the Premises and its rights under this
Lease will not be disturbed on account thereof. In the event of any foreclosure
or sale pursuant to the Landlord's Mortgage, Tenant agrees to attorn to such
beneficiary or purchaser. Tenant shall properly execute, acknowledge and
deliver documents which the holder of any Landlord's Mortgage may require to
effectuate the provisions of this Section 21.
22. SURRENDER OF POSSESSION. Subject to the terms of Section 13
relating to damage and destruction, upon expiration of the term of this Lease,
whether by lapse of time or otherwise Tenant shall promptly and peacefully
surrender the Premises to Landlord in as good condition as when received by
Tenant from Landlord or as thereafter improved, reasonable use, wear and tear
and damage by casualty, described in Section 13 excepted.
23. REMOVAL OF PROPERTY.
(a) SIGNS AND PERSONAL PROPERTY. Tenant shall remove (i) all
identifying insignia and design elements which are unique to Tenant's business
and installed by Tenant in or on the Premises, and (ii) all articles of
personal property and all business and trade fixtures, machinery and equipment,
furniture and movable partitions owned by Tenant or installed by Tenant at its
expense in the Premises which can be removed without damage to the Premises at
the expiration or sooner termination of this Lease. Tenant shall pay Landlord
for any damages for injury to the Premises or Building resulting from such
removal. If Tenant shall fail to remove any of its property of any nature
whatsoever from the Premises or the Building within five (5) business days
after the expiration or earlier termination of this Lease, Landlord may remove
and store said property without liability for loss thereof or damage thereto,
such storage to be for the account and at the expense of Tenant. If Tenant
shall not pay the cost of storing any such property after it has been stored
for a period of thirty (30) days or more, Landlord may, at its option, sell, or
permit to be sold, any or all such property at public or sale, in such manner
and at such times and places as Landlord in its sole discretion may deem proper,
without notice to Tenant, unless notice is required under applicable statutes,
and shall apply the proceeds of such sale: first, to the cost and expense of
such sale, including reasonable attorneys fees actually incurred; second, to the
payment of the costs or charges for storing any such property; third, to the
payment of any other sums of money which may then be or thereafter become due
Landlord from Tenant under any of the terms hereof; and, fourth, the balance, if
any, to Tenant.
(b) ALTERATIONS. All Alterations shall remain in and be
surrendered with the Premises as a part thereof at the expiration or earlier
termination of this Lease, without disturbance, molestation or injury, provided
that Landlord may, together with the written notice consenting to the
construction of any such Alterations notify Tenant that they be removed upon
the expiration or earlier termination of this Lease. In such event, all expense
to remove such Alterations and to restore the Premises to standards, prior to
such Alterations, less normal wear and tear, shall be borne by Tenant.
24. NON-WAIVER. Waiver by either party of any term, covenant or
condition herein contained any breach thereof shall not be deemed to be a
waiver of such term, covenant, or condition or of any subsequent
-15-
21
breach of the same or any other term, covenant, or condition herein
contained. In addition, the subsequent acceptance of Rent or Additional Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent or Additional Rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such Rent or Additional Rent.
25. HOLDOVER. If Tenant shall, with the written consent of Landlord, hold
over after the expiration of the term of this Lease, such tenancy shall be
deemed a month-to-month tenancy which may be terminated as provided by
applicable state law. During such tenancy, Tenant shall be bound by all of the
terms, covenants and conditions herein so far as applicable, except rental which
shall be greater of (a) the ten quoted rates for similar space in the Building,
or (b) the Rent and Additional Rent stated herein.
26. CONDEMNATION.
(a) ENTIRE TAKING. If all of the Premises or such portions of the
Building as may be required for the reasonable use by Tenant of the Premises,
are taken by eminent domain, this Lease shall automatically terminate as of the
date title vests in the condemning authority and all Rent, Additional Rent and
other payments shall be paid to or reimbursed as of that date.
(b) CONSTRUCTIVE TAKING OF ENTIRE PREMISES. In the event of a taking
of a material part of but less than all of the Building, where Landlord shall
determine that the remaining portions of the Building cannot be economically and
effectively used by it (whether on account of physical, economic, aesthetic or
other reasons) or where the Landlord determines the Building should be restored
in such a way as to materially alter the Premises, Landlord shall forward a
written notice to Tenant of such determination not more than sixty (60) days
after the date of taking. The terms of this Lease shall expire upon such date as
Landlord shall specify in such notice but not earlier than sixty (60) days after
the date of such notice. In the event of a taking of a material part, but less
than all, of the Premises, Tenant shall have the right to terminate this Lease
as of the date of such taking.
(c) PARTIAL TAKING. Subject to the provisions of the preceding
Section 26(b), in case of taking of a thirty percent (30%) or less of the square
footage of the Premises, or a portion of the Building not required for the
reasonable use of the Premises, than this Lease shall continue in full force and
effect and the Rent shall be equitably reduced based on the proportion by which
the square footage of the Premises is reduced, such Rent reduction to be
effective as of the date title to such portion vests in the condemning
authority.
(d) AWARDS AND DAMAGES. Landlord reserves all rights to damages to
the Premises for any partial, constructive, or entire taking by eminent domain,
and Tenant hereby assigns to Landlord any right Tenant may have to such damages
or award and Tenant shall make no claim against Landlord or the condemning
authority for damages for termination of the leasehold interest. Tenant shall
have the right, however, to claim and recover from the condemning authority
compensation for any loss to which Tenant may be put for Tenant's moving
expenses, business interruption or taking of Tenant's personal property (not
including Tenant's leasehold interest) provided that such damages may be claimed
only if they are awarded separately in the eminent domain proceedings and not
out of or as part of the damages recoverable by Landlord.
27. NOTICES. All notices under this Lease shall be in writing and
delivered in person or sent by registered or certified mail, postage prepaid, to
Landlord and to Tenant at the Notice Addresses provided in Section 1(j)
(provided that after the Commencement Date any such notice shall be mailed or
delivered by hand to Tenant at the Premises) and to the holder of any Landlord's
Mortgage at such place as such holder shall specify to Tenant in writing, or
such other addresses as may from time to time be designated by any such party in
writing. Notices mailed as aforesaid shall be deemed given on the date of such
mailing.
-16-
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28. COSTS AND ATTORNEYS' FEES. If Tenant or Landlord shall bring any
action for any relief against the other, declaratory or otherwise, arising out
of this Lease, including any suit by Landlord for the recovery of Rent,
Additional Rent or other payments hereunder or possession of the Premises, the
losing party shall pay the prevailing party a reasonable sum for attorney's and
paralegal's fees in such suit, at trial and on appeal, and such attorneys fees
shall be deemed to have accrued on the commencement of such action.
29. LANDLORD'S LIABILITY. Anything in this Lease to the contrary
notwithstanding, covenants, undertakings and agreements herein made on the part
of Landlord are made and intended not as personal covenants, undertakings and
agreements for the purpose of binding Landlord personally or the assets of
Landlord but are made and intended for the purpose of binding only the
Landlord's interest in the Premises, the Building, and the Property, as the
same may from time to time be encumbered. No personal liability or personal
responsibility is assumed by, nor shall at any time be asserted or enforceable
against Landlord or its members or their respective heirs, legal
representatives, successors or assigns on account of the Lease or on account of
any covenant, undertaking or agreement of Landlord in this Lease contained.
30. LANDLORD'S CONSENT. Except as specified in other provisions of this
Lease, whenever Landlord's consent is required under the terms hereof, such
consent shall not be unreasonably withheld, provided, the withholding of
Landlord's consent due to any mortgagee's refusal to grant its consent, shall
not be deemed unreasonable.
31. ESTOPPEL CERTIFICATES. Tenant shall, from time to time, upon written
request of Landlord, execute, acknowledge and deliver to Landlord or its
designee a written statement stating the date this Lease was executed and the
date it expires; the date the term commenced and the date Tenant accepted the
Premises; the amount of minimum monthly Rent and the date to which such Rent
has been paid; and certifying; that this Lease is in full force and effect and
has not been assigned, ratified, supplemented or amended in any way (or
specifying the date and terms of agreement so affecting this Lease); that this
Lease represents the entire agreement between the parties as to this leasing;
that all conditions under this Lease to be performed by the Landlord have been
satisfied; that all required contributions by Landlord to Tenant on account of
Tenant's improvements have been received; that on this date there are no
existing claims, defenses or offsets which the Tenant has against the
enforcement of this Lease by the Landlord; that no Rent has been paid more than
one month in advance; and that no security has been deposited with Landlord
(or, if so, the amount thereof). It is intended that any such statement
delivered pursuant to this paragraph may be relied upon by a prospective
purchaser of Landlord's interest or assignee of any mortgage upon Landlord's
interest in the Building. If Tenant shall fail to respond within ten (10) days
of receipt by Tenant of a written request by Landlord as herein provided,
Tenant shall be deemed to have given such certificate as above provided without
modification and shall be deemed to have admitted the accuracy of any
information supplied by Landlord to a prospective purchaser or mortgagee and
to have certified that this Lease is in full force and effect, that there are
no uncured defaults in Landlord's performance, that the security deposit is as
stated in the Lease, and that not more than one month's Rent has been paid in
advance.
32. TRANSFER OF LANDLORD'S INTEREST. In the event of any transfer or
transfers of Landlord's interest in the Premises, the Building, or the Property
other than a transfer for security purposes only, the transferor shall be
automatically relieved of any and all obligations and liabilities on the part
of Landlord accruing from and after the date of such transfer, provided the
transferee accepts the obligations of Landlord under the Lease, and such
transferee shall have no obligation or liability with respect to any matter
occurring or arising prior to the date of such transfer. Tenant agrees to
attorn to the transferee.
33. RIGHT TO PERFORM. If Tenant shall fail to pay any sum of money
required to be paid by it hereunder, or shall fail to perform any other act on
its part to be performed hereunder, and such failure shall continue for ten
(10) days after notice thereof by Landlord, Landlord may, but shall not be
obligated so to do, and
-17-
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by any such broker, finder or other person on the basis of any arrangements or
agreement made or alleged to have been made by or on behalf of Tenant. The
provisions of this Section 37(c) shall not apply to brokers with whom Landlord
has an express written broker agreement.
(d) ENTIRE AGREEMENT. This Lease contains all covenants and
agreements between Landlord and Tenant relating in any manner to the leasing,
use and occupancy of the Premises, and to Tenant's use of the Building and
other manners set forth in this Lease. No prior agreements or understanding
pertaining to the same shall be valid or of any force or effect. The covenants
and agreements of this Lease shall not be altered, modified or added to except
in writing signed by Landlord and Tenant.
(e) SEVERABILITY. Any provision of this Lease which shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and the remaining provisions hereof shall nevertheless
remain in full force and effect.
(f) OVERDUE PAYMENTS. Any Rent, Additional Rent or other sums
payable by Tenant to Landlord under this Lease which shall not be paid upon the
due date thereof, shall bear interest at a rate equal to three percentage
points above the prime rate of interest stated from time to time by
Seattle-First National Bank or its successor, or, in the absence of an
established prime rate, five percentage points over that bank's rate for one
year certificates of deposit, but not in excess of the highest lawful rate
permitted under applicable laws, calculated from the original due date thereof
to the date of payment.
(g) FORCE MAJEURE. Except for the payment of Rent, Additional
Rent or other sums payable by Tenant to Landlord, time periods for Tenant's or
Landlord's performance under any provision, of this Lease shall be extended for
periods of time during which Tenant's or Landlord's performance is prevented
due to circumstances beyond Tenant's or Landlord's control, including without
limitation, strikes, embargoes, shortages of labor or materials, governmental
regulations, acts of God, war or other strife.
(h) RIGHT TO CHANGE PUBLIC SPACES. Landlord shall have the right
at any time after the completion of the Building, without thereby creating an
actual or constructive eviction or incurring any liability to Tenant therefor,
to change the arrangement or location of such of the following as are not
contained within the Premises or any part thereof: entrances, passageways, doors
and doorways, corridors, stairs, toilets, and other like public service
portions of the Building. Nevertheless, in no event shall Landlord diminish any
service, change the arrangement or location of the elevators serving the
Premises, make any change which shall diminish the area of the Premises, or
make any change which shall change the character of the Building from that of a
first-class office building.
(i) GOVERNING LAW. This Lease shall be governed by and construed
in accordance with the laws of the state of Washington.
(j) BUILDING DIRECTORY. Landlord shall maintain in the lobby of
Building a directory which shall include the name of Tenant and any other names
reasonably requested by Tenant in proportion to the number of listings given to
comparable tenants of the Building.
-19-
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(k) BUILDING NAME. The Building will be known by such name as
Landlord may designate from time to time.
IN WITNESS WHEREOF this Lease has been executed the day and year first
above set forth.
LANDLORD: XXXXXXX PLACE, LLC, a Washington limited
liability company
By /s/ [SIGNATURE ILLEGIBLE]
------------------------------------------
Its Manager
---------------------------------------
TENANT: FREESHOP INTERNATIONAL, INC.
By /s/ [SIGNATURE ILLEGIBLE]
------------------------------------------
Its President & CEO
---------------------------------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Xxxxx Xxxxxxx 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 as the Manager of XXXXXXX PLACE, LLC to be the free and
voluntary act and deed of said limited liability company, for the uses and
purposes mentioned in the instrument.
WITNESS my hand and official seal hereto affixed this 23rd date of
September, 1997.
/s/ XXXXX XXXXXXX
--------------------------------------
(Print name) XXXXX XXXXXXX
--------------------------
Notary Public in and for the State of
Washington.
My appointment expires 8-19-00
----------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Xxxxxxx
Xxxxxxxxx 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 as the President & CEO of
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25
FREESHOP INTERNATIONAL, INC. to be the free and voluntary act and deed of said
corporation, for the uses and purposes mentioned in the instrument.
WITNESS my hand and official seal hereto affixed this 23 day of September,
1997.
/s/ XXXX XXXXXXXXX
----------------------------------------
(Print Name) Xxxx XxXxxxxxx
Notary Public in and for the State of
Washington.
My appointment expires 1-10-99
-21-
26
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
27
EXHIBIT A
LEGAL DESCRIPTION
LEGAL DESCRIPTION:
PARCEL 1:
THAT PORTION OF BLOCK 4 OF X. X. XXXXXXX'X PLAT OF SEATTLE, AS PER PLAT RECORDED
IN VOLUME 1 OF PLATS, PAGE 23, RECORDS OF KING COUNTY, AND OF VACATED ALLEY IN
SAID BLOCK, AND OF AN UNPLATTED STRIP OF LAND IN SECTION 6, TOWNSHIP 24 NORTH,
RANGE 4 EAST X.X., DESCRIBED AS FOLLOWS:
BEGINNING ON THE NORTHERLY LINE OF XXX 0 XX XXXX XXXXX XX X XXXXX 9.0 FEET
WESTERLY OF THE NORTHEAST CORNER THEREOF; THENCE SOUTHERLY PARALLEL WITH THE
EASTERLY LINE OF SAID BLOCK, A DISTANCE OF 75.00 FEET; THENCE WESTERLY PARALLEL
WITH THE NORTHERLY LINE OF SAID BLOCK, A DISTANCE OF 119.00 FEET TO THE
CENTERLINE OF THE ALLEY THEREIN; THENCE SOUTHERLY ALONG THE CENTERLINE OF SAID
ALLEY, 165.00 FEET TO THE EASTERLY PRODUCTION OF THE SOUTHERLY LINE OF SAID LOT
4 IN SAID BLOCK; THENCE CONTINUING SOUTHERLY ALONG THE PRODUCTION OF THE
CENTERLINE OF SAID ALLEY, A DISTANCE OF 16.716 FEET TO THE GOVERNMENT MEANDER
LINE, THENCE WEST ALONG SAID MEANDER LINE, 150.408 FEET TO AN ANGLE POINT IN
SAID MEANDER LINE; THENCE NORTHERLY ALONG SAID MEANDER LINE TO A POINT XXX XXXX
OF THE NORTHWEST CORNER OF LOT 1 IN SAID BLOCK; THENCE EAST TO THE NORTHWEST
CORNER OF SAID LOT 1; THENCE EASTERLY ALONG THE NORTHERLY LINE OF SAID BLOCK, A
DISTANCE OF 247.00 FEET TO THE POINT OF BEGINNING;
EXCEPT ALL COAL AND MINERALS AND THE RIGHT TO EXPLORE FOR AND MINE THE SAME, AS
EXCEPTED BY DEED RECORDED UNDER KING COUNTY RECORDING NO. 3528837, COVERING THE
SOUTH 45 FEET OF LOT 2, ALL OF LOTS 3 AND 4, THAT PORTION OF THE WEST 1/2 OF
VACATED ALLEY ADJOINING, AND THOSE PORTIONS OF THE UNPLATTED STRIP IN SECTION 6
ADJOINING;
SITUATE IN XXX XXXX XX XXXXXXX, XXXXXX XX XXXX, XXXXX XX XXXXXXXXXX.
PARCEL 2:
THE WEST 111 FEET OF XXX 0 XX XXXXX 0 XX X. X. XXXXXXX'X XXXX OF SEATTLE, AS PER
PLAT RECORDED IN VOLUME 0 XX XXXXX, XXXX 00, XXXXXXX XX XXXX XXXXXX;
TOGETHER WITH THAT PORTION OF UNPLATTED STRIP OF LAND IN XXXXXXX 0, XXXXXXXX 00
XXXXX, XXXXX 0 XXXX X.X., LYING BETWEEN THE WEST 111 FEET OF XXX 0 XX XXXXX 0 XX
X. X. XXXXXXX'X XXXX OF SEATTLE, AS PER PLAT RECORDED IN VOLUME 1 OF PLATS, PAGE
23, RECORDS OF KING COUNTY, AND THE GOVERNMENT MEANDER LINE, DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 5; THENCE SOUTHERLY 16.801 FEET TO
THE SAID MEANDER LINE;
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28
THENCE EASTERLY ALONG THE SAID MEANDER LINE 111.00 FEET, MORE OR LESS TO THE
WEST MARGINAL LINE OF FIRST AVENUE SOUTH; THENCE NORTHERLY ALONG THE WEST
MARGINAL LINE OF FIRST AVENUE SOUTH 17.971 FEET TO THE SOUTH MARGINAL LINE OF
SAID LOT 5; THENCE WESTERLY 111.00 FEET TO THE POINT OF BEGINNING;
AND TOGETHER WITH THAT PORTION OF THE EASTERLY 1/2 OF THE VACATED ALLEY IN
BLOCK 4 OF X. X. XXXXXXX'X PLAT OF SEATTLE, AS PER PLAT RECORDED IN VOLUME 1 OF
PLATS, PAGE 23, RECORDS OF KING COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF XXX 0 XX XXXXX 0 XX XXXX XXXX; THENCE WEST
8 FEET; THENCE SOUTHERLY ALONG THE CENTERLINE OF SAID VACATED ALLEY 76.716 FEET
TO THE GOVERNMENT MEANDER LINE; THENCE EASTERLY ALONG THE SAID MEANDER LINE 8
FEET, MORE OR LESS, TO THE EASTERLY MARGINAL LINE OF SAID VACATED ALLEY PRODUCED
SOUTH; THENCE NORTHERLY 76.801 FEET TO THE POINT OF BEGINNING;
SITUATE IN XXX XXXX XX XXXXXXX, XXXXXX XX XXXX, XXXXX OF WASHINGTON.
PARCEL 3:
THE WEST 111 FEET OF XXX 0 XXX XXX XXXX 000 XXXX XX XXX XXXXX 00 FEET OF XXX 0
XX XXXXX 0 XX X. X. XXXXXXX'X XXXX OF SEATTLE, AS PER PLAT RECORDED IN VOLUME 0
XX XXXXX, XXXX 00, XXXXXXX XX XXXX XXXXXX;
TOGETHER WITH THE EAST 1/2 OF VACATED ALLEY ADJOINING;
SITUATE IN XXX XXXX XX XXXXXXX, XXXXXX XX XXXX, XXXXX OF WASHINGTON.
29
EXHIBIT B
FLOOR PLAN OF PREMISES
30
EXHIBIT B
[OVERALL & DEMOLITION 3RD FLOOR PLAN]
31
EXHIBIT C
TENANT IMPROVEMENTS
32
To be attached
33
EXHIBIT D
MEMORANDUM OF LEASE
34
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE, made as of 9/23, 1997, by and between XXXXXXX
PLACE, LLC, a Washington limited liability company ("Landlord") and FREESHOP
INTERNATIONAL, INC. ("Tenant").
WITNESSETH:
IN CONSIDERATION of the rents reserved in that certain Lease Agreement
between the parties dated September 23, 1997, and of the terms, covenants,
conditions and agreements on the part of Tenant therein, Landlord leases to
Tenant certain real property located in the City of Seattle, County of King,
State of Washington, upon which Landlord owns a building to be used for
Tenant's offices, which property is designated in said Lease Agreement and
located on a portion of the real property described on Exhibit A attached
hereto and made a part hereof; together with all and singular the building or
buildings, privileges and advantages, with any and all appurtenances belonging
or in any way appertaining to the real property hereby leased, including the
right in Tenant, its successors, assigns, subtenants, employees, customers,
licensees and invitees or use the sidewalks, common areas and access areas to
and from public streets and highways.
TO HAVE AND TO HOLD the premises for the initial term of three (3) years,
ending September 30, 2000, with one option to extend the term for one (1)
additional period of three (3) years each, upon the terms, covenants and
conditions specified in the Lease Agreement.
IN WITNESS WHEREOF, the parties executed this instrument the date first
above written.
"LANDLORD" XXXXXXX PLACE LLC
By NSD, LLC, its Manager
By: /s/ XXXXX XXXXXXX
------------------------------
Member
"TENANT" FREESHOP INTERNATIONAL, INC.
By: /s/ XXXXXXX XXXXXXXXX
-----------------------------
Its President & CEO
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Xxxxx Xxxxxxx 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 as the Manager of XXXXXXX PLACE, LLC to be the free and
voluntary act and deed of said limited liability company, for the uses and
purposes mentioned in the instrument.
35
WITNESS my hand and official seal hereto affixed this 23rd day of
September, 1997.
/s/ XXXXX XXXXXXX
----------------------------------------
(Print name) Xxxxx Xxxxxxx
Notary Public in and for the State of
Washington
My appointment expires 0-00-00
XXXXX XX XXXXXXXXXX )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Xxxxxxx Xxxxxxxxx
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 as the President & CEO of FREESHOP INTERNATIONAL, INC. to be the
free and voluntary act and deed of said corporation, for the uses and purposes
mentioned in the instrument.
WITNESS my hand and official seal hereto affixed this 23 day of September,
1997.
/s/ XXXXX XXXXXXXXX
----------------------------------------
(Print name) Xxxxx XxXxxxxxx
Notary Public in and for the State of
Washington.
My appointment expires 1-10-99
36
EXHIBIT E
ADDITIONAL TERMS OF LEASE
37
None
38
AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE (the "Amendment") is made and entered into this
_____ day of February, 1999, by and between XXXXXXX PLACE, LLC, a Washington
limited liability company ("Landlord"), and FREESHOP INTERNATIONAL, INC.
("Tenant").
RECITALS:
A. On the 23rd day of September, 1997, Landlord and Tenant entered into
a Lease Agreement (the "Lease"), which Lease provides for the lease by Landlord
to Tenant of certain premises consisting of 9,670 square feet of office floor
area on the third floor and 2,117 square feet of balcony floor area (the
"Original Premises") of the Schwabacher Warehouse Building located at 00 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxxxx, Xxxxxxxxxx (the "Warehouse Building").
B. Tenant has exercised its right of first opportunity to lease
additional space in the Building pursuant to Paragraph 36 of the Lease.
C. The parties hereto desire by these presents to amend the Lease in
certain respects to reflect the lease of such additional space by Landlord to
Tenant.
NOW, THEREFORE, for and in consideration of the recitals, which are
incorporated herein, and other good and valuable consideration, the parties
hereto agree that the Lease shall be, and the same is hereby amended as follows:
1. Additional Space. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, approximately 900 rentable square feet of floor area on
the first floor and approximately 8,233 rentable square feet of floor area on
the second floor of the Warehouse Building (the "Additional Space") (hereinafter
the Original Premises and Additional Space are collectively called the
"Premises"), upon the same terms and conditions contained in the Lease, except
as provided otherwise herein. The Additional Space is shown on the drawing
attached hereto as Exhibit A and incorporated herein by this reference.
2. Rentable Area. The exact measurement of the Additional Space will be
computed by an AIA architect based upon BOMA standards and, upon completion, the
parties will execute an addendum to this Amendment setting forth the actual
square footage of the Premises and the percentage of square footage of the
Premises compared to the area of the Building utilized for office space.
3. Pocket Space. Tenant will be allowed to pocket up to 4,000 rentable
square feet of the Additional Space shown on the drawing attached hereto as
Exhibit B and incorporated herein by this reference (the "Pocket Space") through
December 31, 1999, upon written notice to Landlord. The Pocket Space can be
occupied by Tenant at any time but must be taken in increments of a minimum of
1,000 square feet. Tenant will commence paying rent for the Pocket Space upon
the earlier to occur of the date of its occupancy of the Pocket Space or
December 31, 1999.
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39
4. Commencement Date for Additional Space. The Lease commencement date
for the Additional Space (the "Commencement Date for the Additional Space")
shall be the later to occur of June 1, 1999, or the date of substantial
completion of the Tenant Improvements (defined below); provided that if Tenant
causes delays in the construction schedule set forth in paragraph 12 below, the
Commencement Date for the Additional Space will be June 1, 1999.
5. Expiration Date. The expiration date of the Lease is hereby extended
from September 30, 2000, to May 31, 2003 (the "Termination Date"). All of
Tenant's rights to lease the Premises will terminate on the Termination Date.
6. No Further Options to Renew. Paragraph 35 of the Lease (Option to
Renew) is hereby deleted in its entirety, and Tenant shall have no option to
renew the Lease term after the Termination Date.
7. Early Termination. Tenant may terminate the Lease upon the second and
third anniversary of the Commencement Date for the Additional Space, at no
additional cost to Tenant, provided that Tenant gives at least 270 days prior
written notice to Landlord. Notwithstanding the foregoing, this early
termination right is contingent upon Landlord not being able to provide Tenant
with additional expansion space within Xxxxxxx Place to meet Tenant's expansion
requirements noted to in its termination notice.
8. Rent for Additional Space. Tenant shall pay Landlord rent based on
the following schedule for all occupied office space commencing on the
Commencement Date for the Additional Space:
ADDITIONAL SPACE ORIGINAL PREMISES
MONTHS $/RSF/YEAR $/RSF/YEAR
1-12 $18.50 $21.00
13-24 $19.50 $22.00
25-36 $20.50 $23.00
37-48 $21.50 $24.00
Rent for the balcony space shall remain at $4.00 per square foot per year
throughout the term of the Lease.
9. Right of First Opportunity. Paragraph 36 is hereby amended to read as
follows:
36. RIGHT OF FIRST OPPORTUNITY. During the term of the Lease,
provided Tenant is not in default, Tenant shall have the right of first
opportunity to lease all office space in the Building (the "Expansion
Space") when the same becomes available, prior to the Expansion Space
being offered to a third party. Landlord will notify Tenant in writing
of the availability of the Expansion Space, and Tenant shall have five
(5) business days to accept the space. The Expansion Space will be
leased on the terms and conditions to be negotiated by Landlord and
Tenant prior to Tenant's occupancy of the Expansion Space.
-2-
40
10. Operating Expenses. Paragraph 8(vi) of the Lease is hereby amended
to read as follows:
"Base Service Year" shall mean 1997 for the Original Premises and 1999
for the Additional Space.
11. Landlord Improvements. Landlord agrees to make the following
improvements to or for the Additional Space and its systems (the "Landlord
Improvements"):
a. Landlord will provide adequate electrical capacity for normal
office use to the main distribution panel. Distribution throughout the
Additional Space is part of Tenant Improvement costs.
b. Landlord will upgrade and add new HVAC equipment into the
Additional Space at its sole cost, but distribution from each heat pump unit is
part of the Tenant Improvement costs.
c. Landlord will contribute up to a maximum of $20,000 for the
installation of new windows on the south exterior of the Premises (either floor)
or for improvements or repairs to the current windows. Any additional costs
above $20,000 will be borne by Tenant as part of the Tenant Improvements.
12. Tenant Improvements. Landlord will construct all improvements to the
Premises requested by Tenant (the "Tenant Improvements") according to plans and
specifications approved by Landlord and Tenant. The Commencement Date for the
Additional Space of June 1, 1999, is contingent upon Landlord and Tenant meeting
the following construction schedule:
FEBRUARY 15, 1999. Tenant's architect will deliver to Landlord an
approved set of permit ready construction documents initialed by Tenant.
Landlord will review said documents for completeness and then submit them to the
City of Seattle for building permits immediately upon Landlord's approval of the
drawings.
MARCH 1, 1999. Demolition of the Additional Space commences. Tenant
acknowledges that demolition and construction of the Tenant Improvements to the
Additional Space could cause some inconvenience to its current occupancy of the
Original Premises.
MARCH 15, 1999. Anticipated date that building permit will be issued.
Upon issuance of the building permit, construction of the Tenant Improvements
will begin.
JUNE 1, 1999. Anticipated delivery date of Additional Space.
Landlord agrees to obtain a minimum of two (2) construction bids from
qualified contractors, and to select the lowest bid, subject to bid
qualification by Landlord.
-3-
41
13. Tenant Improvement Allowance. Landlord will provide Tenant with an
improvement allowance for the Tenant Improvements in the Additional Space of
$13.00 per rentable square feet of Additional Space. Tenant agrees to pay, on or
before the Commencement Date for the Additional Space, for all costs of the
Tenant Improvements in excess of this tenant improvement allowance.
14. Parking. Paragraph 1(h) of the Lease is hereby amended to read as
follows:
(h) PARKING. During the term of this Lease, Landlord will provide
parking stalls for up to eighteen (18) cars on a nonreserved basis for
ninety percent (90%) of the posted market rental rate. This rental rate
will commence on the date this Amendment is fully executed, but in any
event, not later than March 1, 1999. Landlord will also provide Tenant
with one Executive Reserved parking space at the same rental rate.
Additional monthly parking stalls may be available to Tenant's employees
and visitors on a first come, first served basis.
15. Counterparts. This Amendment may be executed in one or more
counterparts, and all of the counterparts shall constitute but one and the same
agreement, notwithstanding that all parties hereto are not signatories to the
same or original counterpart.
16. All Other Terms Remain Unchanged. Except as amended herein, all
other terms and conditions of the Lease shall remain unchanged and in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
"LANDLORD" XXXXXXX PLACE, LLC,
a Washington limited liability company
By: NSD, LLC, a Washington limited liability
company, its manager
By: /s/ XXXXX XXXXXXX
-----------------------------------
Xxxxx Xxxxxxx, Member
"TENANT" FREESHOP INTERNATIONAL, INC.
By: /s/ XXXX XXXX
-----------------------------------
Its: Chief Financial Officer
-----------------------------------
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42
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that XXXXX XXXXXXX
is the person who appeared before me, and said person acknowledged that he
signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it as a Member of NSD, LLC, in its capacity as the
Manager of XXXXXXX PLACE LLC, to be the free and voluntary act and deed of each
of said limited liability companies, for the uses and purposes mentioned in the
instrument.
WITNESS my hand and official seal hereto affixed this 10th day of
February, 1999.
/s/ XXXXX XXXXXXX
---------------------------------------
(Signature of Notary)
Xxxxx Xxxxxxx
---------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington
My Appointment Expires: 8-19-00
---------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Xxxx Xxxx 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 Chief Financial Officer of FREESHOP
INTERNATIONAL, INC., to be the free and voluntary act and deed of said
corporation, for the uses and purposes mentioned in the instrument.
WITNESS my hand and official seal hereto affixed this 16th day of
February, 1999.
/s/ XXXXX XXXXXXXX
---------------------------------------
(Signature of Notary)
Xxxxx Xxxxxxxx
---------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington
My Appointment Expires: Oct. 2, 2002
--------------
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43
EXHIBIT A
(DRAWING OF ADDITIONAL SPACE)
44
EXHIBIT B
(DRAWING OF POCKET SPACE)
