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EXHIBIT 2.2
LEASE AGREEMENT
THIS LEASE AGREEMENT ("LEASE"), is made and entered into as of September
12, 2001 by and between Microsoft Corporation, a Washington corporation
("LANDLORD"), and Spacelabs Medical, Inc., a California corporation ("TENANT"),
1. PREMISES AND TERM.
1.1. In consideration of the obligation of Tenant to pay rent as
provided in this Lease, and in consideration of the other terms, provisions and
covenants of this Lease, Landlord leases to Tenant, and Tenant leases from
Landlord the real property described on Exhibit "A" attached hereto (the
"PREMISES"), including the buildings and parking areas located thereon and
appurtenances thereto and commonly known as 15120 and 00000 X.X. 00xx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx. The Premises consist of two buildings, a "Manufacturing
Building" and an "Office Building."
1.2. The term of this Lease shall be for eighteen (18) months
commencing on September 12, 2001 (the "COMMENCEMENT DATE") and ending March 12,
2003 (the "LEASE TERM").
1.3. Immediately before the commencement of this Lease, Tenant
and its affiliate, Spacelabs Medical, Inc. a Delaware corporation ("SLMD-DE")
owned the Premises and sold them pursuant to a Real Estate Purchase and Sale
Agreement dated as of September 5, 2001 between Tenant and SLMD-DE as seller and
USREA, Inc. a Delaware corporation as buyer (the "PURCHASE AGREEMENT").
Therefore, Tenant is and has been in possession of the Premises. Tenant
acknowledges that no representations as to the condition or repair of the
Premises have been made by Landlord, and Tenant accepts the Premises "As Is,
Where-Is" in their present condition, including known and unknown defects,
having owned and had a full and complete opportunity to inspect the same.
1.4. Tenant shall have the option to terminate this Lease by
written notice to Landlord, such termination to be effective as of the date
specified in such notice, provided, however, that such effective date shall be
(i) not less than 60 days after the date of such notice, and (ii) no earlier
than September 12, 2002. Upon the effective date of such termination, the
parties shall have no further rights or obligations with respect to this Lease,
except those which have accrued prior to the termination date or expressly
survive termination.
2. BASE RENT AND SECURITY DEPOSIT.
2.1. Tenant agrees to pay to Landlord Base Rent for the Premises,
in advance, without demand, deduction or set off except as expressly provided
herein, for the entire Lease Term at the monthly rate as set forth below,
consisting of a combined monthly payment for both the Manufacturing Building and
the Office Building:
Building Months of Term Monthly Rent
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Manufacturing 1-12 $317,958
13-18 $326,437
Office 1-12 $301,501
13-18 $308,262
Total 1-12 $619,459
13-18 $634,699
One monthly installment shall be due and payable on the date of this Lease and a
monthly installment shall be due and payable on or before the first day of each
calendar month following the Commencement Date during the Lease Term, except
that the rental payment for any fractional calendar month at the commencement or
end of the Lease period shall be prorated on the basis of a 30-day month. It is
the purpose and intent of Landlord and Tenant that this Lease shall yield to
Landlord the Base Rent specified in this Section 2.1 and that all costs,
expenses and obligations
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of every kind and nature whatsoever relating to the Premises that may arise or
become due during the Lease Term shall be paid by Tenant as provided in this
Lease and, except for such obligations and charges as have otherwise expressly
been assumed by Landlord in accordance with the terms and conditions of this
Lease, including pursuant to Sections 5, 6 and 12 hereof.
2.2. All rent and other payments required to be made by Tenant to
Landlord shall be payable to Landlord at the address set forth in Section 22 or
at such other address as Landlord may specify from time to time by written
notice. Tenant's obligation to pay rent and any other amounts to Landlord under
the terms of this Lease shall not be deemed satisfied until such rent and other
amounts have been actually received as good funds by Landlord.
2.3. Tenant has deposited $619,459 with Landlord, which shall be
held by Landlord as a security deposit for Tenant's performance of all of the
terms, covenants and conditions of this Lease (the "SECURITY DEPOSIT"). If
Tenant defaults under any provision of this Lease, Landlord may (but shall not
be required to) use, apply or retain all or any part of this Security Deposit
for the payment of any amount Landlord may spend by reason of Tenant's default
beyond notice and cure periods or to compensate Landlord for any loss or damage
Landlord may suffer because of Tenant's default. If any portion of the Security
Deposit is so used or applied, Tenant shall, within ten (10) days after written
demand, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount. Landlord shall not be required to keep
the Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on the Security Deposit. If Tenant performs each of its
obligations under this Lease, the Security Deposit, or any balance thereof,
shall be returned to Tenant within ten (10) days after the later of the
expiration of the Lease term or the date Tenant vacates the Premises.
3. USE. The Manufacturing Building and the Office Building shall be used
only for the purposes of the development, manufacture, sale and commercial
distribution of the Tenant's or its affiliates' products and services, or other
lawful purposes as may be incidental thereto, in a manner consistent with
Tenant's usage prior to the purchase of the Premises by Landlord. Outside
storage, including without limitation, trucks and other vehicles, is prohibited
without Landlord's prior written consent (which shall not be unreasonably
withheld or delayed), except temporary parking of trucks or containers will not
constitute outside storage. Tenant shall at its own cost and expense obtain any
and all licenses and permits necessary for its particular business in the
Premises. Tenant shall comply with all governmental laws, ordinances and
regulations applicable to its particular use of the Premises (collectively,
"Governmental Requirements"), and shall promptly comply with all governmental
orders and directives applicable to Tenant's particular use of the Premises,
including but not limited to those regarding the correction, prevention and
abatement of nuisances in or upon, or connected with, the Premises, all at
Tenant's sole expense but excluding modifications, alterations or capital
improvements necessitated by Government Requirements to be paid for by Landlord
pursuant to Section 6 herein. Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the
Premises, nor take any other action that would constitute a nuisance or would
disturb or endanger any person. Tenant will not permit the Premises to be used
for any purpose or in any manner (including without limitation any method of
storage) that would render the insurance thereon void or increase the insurance
risk. If Tenant's use of the Premises results in an increase in insurance
premiums, Tenant shall be solely responsible for and pay the increase within ten
(10) days after Landlord's demand therefore.
4. TAXES AND OTHER CHARGES.
4.1. Tenant agrees to pay any and all real and personal property
taxes, regular and special assessments, license fees and other charges of any
kind and nature payable by Landlord as a result of any public or quasi-public
authority, private party, or owner's association levy, assessment or imposition
against, or arising out of Landlord's ownership of or interest in, the Premises
(collectively referred to as the "CHARGES"), but expressly excluding any federal
or state income taxes, franchise taxes, sales taxes or the like. Tenant shall
pay such Charges directly to the proper recipients of such Charges and shall
provide Landlord proof of such payment. Any Charges that may be paid in
installments shall be so paid, and, Tenant shall only be responsible for the
portion of the installments due during the Lease Term, except that, since there
was no proration of such taxes under the Purchase Agreement, Tenant shall pay
all real and personal property taxes for the second half of 2001 notwithstanding
that the term of this Lease does not commence until September 12, 2001. At the
expiration of the Lease Term, any real estate taxes or other Charges shall be
pro rated for any partial year and (i) if Tenant has paid amounts for periods
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attributable to periods after the expiration of the Lease Term, Landlord shall
refund such amounts to Tenant and (ii) if there are amounts not yet paid by
Tenant attributable to periods during the Lease Term, such amounts shall be paid
by Tenant to Landlord.
4.2. If Tenant does not pay any amounts required to be paid by
Tenant under Section 4.1 within the cure period specified in Section 17(a), in
addition to any other remedies provided in this Lease, Landlord may, if it so
elects, pay the Charges. Any sums so paid by Landlord shall be deemed to be
additional rental owing by Tenant to Landlord and due and payable upon demand
plus interest at the rate of ten percent (10%) per annum (the "DEFAULT RATE")
from the date of payment by Landlord until repaid by Tenant.
4.3. If at any time during the Lease Term, the present method of
taxation shall be changed so that in lieu of the whole or any part of any real
estate taxes, assessments, fees or charges levied, assessed or imposed on real
estate and the improvements thereon, there shall be levied, assessed or imposed
on Landlord a capital levy or other tax directly on the rents received therefrom
and/or a franchise tax, assessment, levy or charge measured by or based, in
whole or in part, upon such rents or the present or any future building or
buildings, then all such taxes, assessments, fees or charges, or the part
thereof so measured or based, shall be deemed to be included within the term
"Charges" for the purposes of this Lease.
4.4. Tenant shall be liable for all taxes levied against personal
property and trade fixtures placed by Tenant in the Premises. If any such taxes
are levied against Landlord or Landlord's property and if Landlord elects to pay
the same or if the assessed value of Landlord's property is increased by
inclusion of personal property and trade fixtures placed by Tenant in the
Premises and Landlord elects to pay the taxes based on such increase, Tenant
shall pay to Landlord upon demand that part of such taxes for which Tenant is
primarily liable.
5. TENANT'S MAINTENANCE.
5.1. Landlord and Tenant acknowledge that except as otherwise
expressly provided herein it is the intent of the parties that Tenant shall not
be obligated to make any capital replacements or modifications to the Premises
and shall only be responsible for repairs and maintenance (including structural
repairs) required as a result of (i) ordinary wear and tear during the Lease
Term, (ii) Tenant's particular use or manner of use of the Premises, or (iii)
Tenant's negligence or breach of the Lease. As between Landlord, and Tenant,
Landlord shall make any repairs or replacements necessary to keep the Premises
in good operating order, other than those listed in clauses (i) - (iii) above.
Tenant shall, at its sole cost and expense, provide for termite and pest
extermination, regular removal of trash and debris, landscape maintenance, plant
material replacement, sweeping, window cleaning, and keeping the parking areas,
driveways and shall keep the whole of the Premises in a clean and sanitary
condition.
5.2. Tenant shall, at its own cost and expense, enter into a
regularly scheduled preventive maintenance/service contract with a maintenance
contractor for servicing all heating, ventilating and air conditioning systems
and equipment serving the Premises.
5.3. As initially stated in Section 5.1 above, Tenant shall have
no obligation to make or pay for any capital replacement (as determined under
generally accepted accounting principles) to the Premises with the exception of
Tenant's obligation to pay the cost of the repair or replacement of the roof at
the Manufacturing Building. Pursuant to Section 5.7 of the Purchase Agreement,
Tenant has established an escrow in the amount of $250,000 to be held under a
separate escrow agreement (the "Roof Escrow"), which amount shall be applied by
Landlord to the costs of such work. Landlord shall be obligated to complete such
roof work within one year after executing this Lease and any amounts remaining
in the Roof Escrow following the completion of such work shall be refunded to
Tenant. Landlord shall use diligent efforts (short of litigation) to minimize
the cost of the roof work, including making claims under existing warranties, as
assigned to Landlord, or "make goods." Under no circumstances shall Tenant be
responsible for any costs in connection with the Roof work in excess of
$250,000.
5.4. With Landlord's consent, which shall not be unreasonably
withheld or delayed, Tenant may, subject to Section 7, make capital replacements
as are necessary to continue its customary operations on the Premises, at its
sole cost and expense and without reimbursement of any kind from Landlord.
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6. LANDLORD OBLIGATIONS. Landlord shall be responsible for all repairs
and maintenance except as required of Tenant under Sections 5 and 7 hereof,
including but not limited to deferred maintenance items and capital improvements
(including restoration of casualty losses) at the Premises.
7. ALTERATIONS. Tenant shall not make any alterations, additions or
improvements to the Premises that are structural in nature or exceed a cost of
$25,000, except with Landlord's consent (not to be unreasonably withheld or
delayed). Landlord may condition its consent to any such alterations on Tenant's
agreement to remove any such alterations at its expense at the termination of
the Lease Term, to restore the Premises to its condition prior to such
alterations, and/or to repair any damage to the Premises resulting from such
removal. Tenant shall also be responsible at its expense for any additional
alterations to the Premises required by the Americans With Disabilities Act
required as the result of the alterations made by Tenant. In addition, it shall
not be unreasonable for Landlord to withhold its consent to a proposed
alteration if the making of such alteration will require Landlord to comply with
land use or building code requirements at a cost in excess of $50,000.00. All
shelves, bins, machinery, other personal property and trade fixtures installed
by Tenant may be removed by Tenant before the expiration of the Term if Tenant
so elects. In addition, paragraph A of Schedule 7.1 sets forth those items that
constitute fixtures but that are important to Tenant's business and that Tenant
may remove prior to the expiration of the Term if Tenant so elects. Paragraph B
of Schedule 7.1 lists certain items that may be considered personal property but
which Tenant agrees to leave in the Premises at the end of the Lease Term. If
Tenant installs any item during the Lease Term that constitutes a fixture,
Tenant may notify Landlord that upon Tenants election Tenant may remove the
same. If Tenant elects to remove any items of property as permitted by this
Section 7, Tenant shall repair any damage to the Premises resulting from such
removal. In addition, Tenant shall, at the end of the Lease Term, remove those
items of property identified on paragraph A of Schedule 7.1 ("Required Removal
Items"), and shall repair any damage to the Premises resulting from the removal
of such Required Removal Items. To the extent that this Section 7 requires (or
permits Landlord to require) any repair of damage to the Premises resulting from
removal (as opposed to restoration of the Premises to its prior condition) such
repair shall be reasonably consistent with the remainder of the Premises and
Tenant shall be entitled to reasonably mitigate cost and expense through
patching, spot painting, and similar measures. All such work constituting new
improvements or installations shall be accomplished in good workmanlike manner
so as not to damage the primary structure or structural qualities of the
building and other improvements on the Premises.
8. SIGNS. Tenant shall not install exterior signs upon the Premises
beyond those existing as of the date of this Lease without Landlord's consent,
not to be unreasonably withheld or delayed. Tenant may, at its option remove all
such signs prior to the termination of this Lease and shall, at the termination
of this Lease, remove such signs and repair any damage to the building caused by
such removal. Such installations and removals shall be made so as to avoid
injury or defacement of the building and other improvements. To the extent that
this Section 8 requires any repair of damage to the Premises as a result of the
removal of such signs, such repair shall be reasonably consistent with the
remainder of the Premises and Tenant shall be entitled to reasonably mitigate
cost and expense through patching, spot painting and similar measures.
9. INSPECTION.
9.1. Upon 48 hours prior notice (which notice may be telephonic)
to Tenant's manager at the Premises, except in the event of an emergency in
which case notice is not required, Landlord and Landlord's agents and
representatives shall have the right to enter the Premises during normal
business hours, accompanied by Tenant's employee(s) to inspect the Premises, or
in connection with the design of improvements to the be made to the Premises
after the termination of this Lease, or make repairs permitted pursuant to the
Lease. During the period that is three (3) months before the end of the Lease
term, upon twenty-four (24) hours prior telephonic notice to Tenant's designated
representative, Landlord and Landlord's representatives may enter the Premises
during normal business hours for the purposes of design and construction
planning and showing the Premises to prospective tenants or purchasers. In
addition during such period, Landlord shall have the right to erect a suitable
sign on the Premises stating that the Premises are available. In exercising its
rights under this Section 9.1, Landlord shall not unreasonably interfere with
Tenant's use of the Premises.
9.2. At the end of the Lease Term and before vacating the
Premises, Tenant shall arrange to meet with Landlord for a joint inspection of
the Premises to confirm that the Premises are in the Agreed Upon Condition. As
used herein, "Agreed Upon Condition" means removal of all trash, broom cleaning,
cleaning and
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wiping down of all fixtures, and landscape maintenance, repair of any damage
resulting from the removal of items required or permitted by Section 7, subject
to the limitations contained in such Section 7 with respect to repairs, and the
repair of any damage as specified and pursuant to Section 26 below, all of which
shall be done at the latest practical date before vacation of the Premises.
10. UTILITIES. Tenant shall pay for all water, gas, heat, light, power,
telephone, sewer, sprinkler connection or consumption charges and other
utilities and services used on or from the Premises, together with any taxes,
penalties, surcharges, or the like pertaining thereto and any maintenance
charges for utilities and shall furnish all electric light bulbs and tubes for
the Premises. Landlord shall in no event be liable for any interruption of
failure of utility services on the Premises.
11. ASSIGNMENT AND SUBLETTING. Tenant shall not have the right,
voluntarily or involuntarily, to assign, convey, transfer, mortgage or sublet
the whole or any part of the Premises under this Lease. For purposes of this
paragraph, the term "transfer" shall include a transfer of a controlling
interest in Tenant. Notwithstanding the foregoing, Tenant shall have the right
without Landlord's consent (but upon prior written notice to Landlord which
notice shall include such information as reasonably necessary for Landlord to
confirm Tenant's compliance with this Section 11) to assign this Lease to
Tenant's parent, affiliate or a wholly owned subsidiary, or to a successor in
interest of substantially all of Tenant's stock or assets, provided that no
default in Tenant's obligations hereunder exists beyond any applicable cure
period and the assignee assumes Tenant's obligations hereunder. No such
assignment shall relieve Tenant from any liability for Tenant's or its
assignee's obligations hereunder; provided, however, that if (i) substantially
all of Tenant's assets are transferred (ii) the transferee assumes Tenant's
obligations under this Lease pursuant to an assumption agreement reasonably
acceptable to Landlord, and (iii) Tenant is not then in default hereunder, then
Tenant shall be released from liability hereunder to the extent of obligations
arising after the date of such assumption.
12. INSURANCE, FIRE AND CASUALTY DAMAGE.
12.1. Landlord shall maintain insurance covering the building in
the amount of its replacement cost, which shall insure against the perils of
Fire, Earth Movement, including Earthquake and Flood, Lightning, Extended
Coverage, Vandalism, Boiler and Machinery and Malicious Mischief, extended by
Special Extended Coverage Endorsement to insure against all other Risks of
Direct Physical Loss, and such other coverages as are customary for properties
such as the Premises and as Landlord reasonably elects (the "INSURANCE").
Subject to the provisions of Sections 12.3, 12.4, 12.5 the Insurance shall be
for the sole benefit of Landlord and under its sole control.
12.2. Tenant agrees to pay Landlord's cost of carrying Insurance.
During each month of the term of this Lease, Tenant shall make a monthly payment
to Landlord equal to one-twelfth of the annual cost of the Insurance that will
be due and payable for that particular year. Each Insurance payment shall be due
and payable, as additional rent, at the same time and manner of the payment of
the monthly Base Rent. The monthly Insurance payment is subject to increase or
decrease as determined by Landlord to reflect premium charges. The Insurance
payments of Tenant shall be reconciled annually and upon expiration or
termination of the Lease. If Tenant's total Insurance payments are less than
Landlord's actual Insurance cost, Tenant shall pay to Landlord upon demand the
difference; if the total Insurance payments of Tenant are more than Landlord's
actual Insurance cost, Landlord shall credit the excess to the next monthly
payment by Tenant for Insurance.
12.3. Tenant shall notify Landlord immediately after a casualty
occurs to the Premises. (1) If more than 40% of either building is damaged by
fire or other casualty, (2) if rebuilding or repairs cannot in Landlord's
estimation be completed within one hundred eighty (180) days after the date upon
which Landlord is notified by Tenant of such damage, or (3) the damage occurs
more than nine (9) months after the Commencement Date, then either Landlord or
Tenant may elect to terminate this Lease effective upon the date of the
occurrence of such damage. Any notice of termination under this provision shall
be given within ninety (90) days following the date of the occurrence of such
damage. Notwithstanding the above, Landlord's termination of the Lease shall not
be effective under this subsection 12.3 if Tenant gives written notice to
Landlord within five (5) business days of Tenant's receipt of Landlord's
termination notice that Tenant shall at its sole cost and expense make such
repairs as necessary to allow Tenant to legally use and occupy the Premises and
Tenant promptly makes such repairs.
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12.4. If this Lease is not terminated pursuant to Section 12.3,
Landlord shall at its sole cost and expense with reasonable diligence rebuild
and repair the structural elements of the building (including the roof and
exterior walls) to serviceable condition. Landlord shall not be required to
rebuild in the same configuration as now existing so long as the rebuilt
Premises are reasonably useable by Tenant for its business as conducted prior to
the casualty, taking into consideration the remaining Lease Term. Landlord shall
not be required to rebuild, repair or replace any part of the partitions,
fixtures, additions and other improvements that may have been placed in, or
about the Premises by Tenant all of which shall be restored and repaired by
Tenant at its sole cost and expense to the extent necessary for Tenant to
lawfully occupy the Premises and only if Tenant desires to continue to occupy
the Premises, provided that Landlord shall make available to Tenant for
reimbursement of Tenant's costs of restoration the insurance proceeds, if any,
that remain after Landlord completes its restoration. If the Premises are
untenantable in whole or in part following such damage, the Base Rent payable
during the period in which they are untenantable shall be reduced to such extent
as may be fair and reasonable under all of the circumstances. The Base Rent
shall xxxxx in proportion to that part of the Premises that is unfit for use in
Tenant's business. The abatement shall consider the nature and extent of
interference with Tenant's ability to conduct business in the Premises and the
need for access and essential services. The abatement shall continue from the
date the damage occurred until ten (10) business days after (1) Landlord
completes the repairs and restoration, and (2) Landlord gives notice to Tenant
that the repairs and restoration are completed. If Landlord does not complete
such repairs and rebuilding within one hundred eighty (180) days after the date
upon which Landlord is notified by Tenant of such damage, Tenant may at its
option terminate this Lease by delivering written notice of termination to
Landlord within ten (10) days after the end of such 180-day period as Tenant's
exclusive remedy for Landlord's failure, whereupon this Lease shall terminate.
12.5. Tenant shall, during the Term and any other period of
occupancy, at its sole cost and expense, keep in full force and effect the
following insurance:
(1) Commercial General Liability Insurance insuring Tenant
against any liability arising out of lease, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be in the
amount of not less than Two Million and No/100 Dollars ($2,000,000.00) per
occurrence for injury to, or death of one or more persons, and for damage to
tangible property (including loss of use). The policy shall insure the hazards
of premises and operations, independent contractors, contractual liability
(covering the indemnity contained in Sections 13 and 23 hereof) and shall (a)
name Landlord and the Trustee and certificate holder under the Synthetic Lease
Trust (as defined in Section 29) as additional insureds, (b) contain a
severability of interests provision, a provision that the insurance provided to
Landlord as additional insured shall be primary to and not contributory with
insurance maintained by Landlord, and a provision that an act or omission of one
of the insureds or additional insureds that would void or otherwise reduce
coverage shall not reduce or void the coverage as to the other named and
additional insureds, and (c) may be carried pursuant to a blanket or umbrella
policy. Landlord has reviewed and approved Tenant's current coverages and
carriers.
All policies shall be written in a form satisfactory to Landlord and shall be
taken out with insurance companies holding a General Policyholders Rating of
"A:VII" as set forth in the most current issue of Bests Insurance Guide. Within
ten (10) days after the execution of the Lease, but in any event before Tenant
occupies the Premises, Tenant shall deliver to Landlord copies of policies or
certificates evidencing the existence of the amounts and forms of coverage
satisfactory to Landlord, which shall be kept current throughout the Lease Term.
No policy shall be cancelable except after thirty (30) days prior written notice
to Landlord. Tenant shall furnish Landlord with renewals or "binders" thereof,
and if Tenant fails to do so within a reasonable period, then Landlord may order
such insurance and charge the cost thereof to Tenant as additional rent.
12.6. Each party waives and releases claims arising in any manner
in its ("INJURED PARTY'S") favor and against the other party for loss or damage
to Injured Party's property, the Premises or its contents located within or
constituting a part or all of the Premises. This waiver applies to the extent
the loss or damage is covered by: (1) the Injured Party's insurance; or (2) the
insurance the Injured Party is required to carry under this Section 12,
whichever is greater. This waiver applies whether or not the loss is due to the
negligent acts or omissions of Landlord or Tenant, or their respective officers,
directors, employees, agents, contractors, or invitees. This waiver and release
extends to anyone claiming through or under a party as a result of a right of
subrogation. This waiver and release does not apply to claims caused by a
party's willful misconduct. Each party shall obtain from its insurance carrier a
waiver of subrogation as a clause in or endorsement to its policy, provided
however, that the
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endorsement shall not be required if the applicable policy of insurance permits
the named insured to waive rights of subrogation on a blanket basis, in which
case the blanket waiver shall be acceptable.
13. INDEMNITY.
13.1. Landlord shall not be liable to Tenant or Tenant's
employees, agents, servants, guests, invitees or visitors, or to any other
person for any injury to person or damage to property whatsoever on or about the
Premises, resulting from and/or caused in part or whole by any acts or omissions
of Tenant, its employees, agents, servants, guests, invitees, contractors and
visitors, or of any other person entering upon the Premises, or caused by the
building and improvements located on the Premises becoming out of repair (to the
extent of Tenant's obligations to repair), or caused by leakage of gas, oil,
water or steam or by electricity emanating from the Premises, or due to any
other cause except injury to persons or damage to property caused by the
negligence or willful misconduct of Landlord.
13.2. Subject to the waiver in Section 12.6, Tenant shall
indemnify and hold harmless Landlord from claims, suits, actions, or liabilities
for personal injury, death or for loss or damage to property that arises out of
(a) any activity, work or thing permitted or suffered to be done by Tenant, or
any of its agents or contractors, on or about the Premises during the Term, or
(b) any act or omission of Tenant, its employees, agents, contractors, or
invitees, or (c) any breach or default by Tenant in the performance of any
obligation to be performed under this Lease. This indemnity does not apply (i)
to claims, suits, actions or liabilities to the extent they are caused by the
negligence or willful misconduct of Landlord, its agents, employees, contractors
or invitees, (ii) to damage, claims, suits, actions or liabilities waived under
Section 12.6, or (iii) to the matters indemnified against in Article 23.
In the absence of comparative or concurrent negligence on the part of
Landlord, its agents, their affiliates and subsidiaries, or their respective
directors, employees or contractors the foregoing indemnity shall also include
reasonable costs, expenses and attorney's fees incurred in connection with any
indemnified claim or incurred by Landlord in successfully establishing the right
to indemnity. Tenant shall have the right to assume the defense of any claim
subject to this indemnity. Landlord agrees to cooperate fully with Tenant and
Tenant's counsel in any matter where Tenant elects to defend, provided Tenant
promptly reimburses Landlord for reasonable costs and expenses incurred in
connection with its duty to cooperate.
The foregoing indemnity is conditioned upon Landlord providing prompt
notice to Tenant of any claim or occurrence that is likely to give rise to a
claim, suit, action or liability that will fall within the scope of the
foregoing indemnity, along with sufficient details that will enable Tenant to
make a reasonable investigation of the claim.
When the claim is caused by the joint negligence or willful misconduct
of Tenant and Landlord or Tenant and a third party unrelated to Tenant (except
Tenant's agents, officers, employees or invitees), Tenant shall have the duty to
defend except that portion arising out of the Landlord's sole negligence, gross
negligence or willful misconduct.
13.3. Subject to the waiver in Section 12.6, Landlord shall
indemnify and hold harmless Tenant from claims, suits, actions, or liabilities
for personal injury, death or for loss or damage to property to the extent
arising from (a) the negligence or willful misconduct of Landlord, its
employees, agents or contractors; or (b) any breach or default by Landlord in
the performance of any obligation on Landlord's part to be performed under this
Lease. This indemnity does not apply to claims, suits, actions or liabilities
caused in whole or in part by the negligent acts or omissions or willful
misconduct of Tenant, its agents, employees, contractors or invitees, to damage,
claims, suits, actions or liabilities waived under Section 12.6.
In the absence of comparative or concurrent negligence on the part of
Tenant, its agents, their affiliates and subsidiaries, or their respective
directors, employees or contractors the foregoing indemnity shall also include
reasonable costs, expenses and attorney's fees incurred in connection with any
indemnified claim or incurred by Tenant in successfully establishing the right
to indemnity. Landlord shall have the right to assume the defense of any claim
subject to this indemnity with counsel reasonably satisfactory to Tenant. Tenant
agrees to cooperate fully with Landlord and Landlord's counsel in any matter
where Landlord elects to defend, provided Landlord shall promptly reimburse
Tenant for reasonable costs and expenses incurred in connection with its duty to
cooperate.
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The foregoing indemnity is conditioned upon Tenant providing prompt
notice to Landlord of any claim or occurrence that is likely to give rise to a
claim, suit, action or liability that will fall within the scope of the
foregoing indemnity, along with sufficient details that will enable Landlord to
make a reasonable investigation of the claim.
13.4. The indemnification obligations contained in this Section
13 shall not be limited by any worker's compensation, benefit or disability
laws, and each indemnifying party hereby waives any immunity that said
indemnifying party may have under the Industrial Insurance Act, Title 51 RCW and
similar worker's compensation, benefit or disability laws.
13.5. LANDLORD AND TENANT ACKNOWLEDGE BY THEIR EXECUTION OF THIS
LEASE THAT EACH OF THE INDEMNIFICATION PROVISIONS OF THIS LEASE (SPECIFICALLY
INCLUDING BUT NOT LIMITED THOSE RELATING TO WORKER'S COMPENSATION BENEFITS AND
LAWS) WERE SPECIFICALLY NEGOTIATED AND AGREED TO BY LANDLORD AND TENANT.
13.6. THE INDEMNIFICATION OBLIGATION HEREUNDER SHALL SURVIVE THE
EXPIRATION OR EARLIER TERMINATION OF THIS LEASE.
14. CONDEMNATION.
14.1. If all or any substantial part of the Premises is taken for
any public or quasi-public use under government law, ordinance or regulation, or
by right of eminent domain, or by private purchase in lieu thereof and the
taking would prevent or materially interfere with the use of the Premises for
the purpose for which they are being leased, this Lease shall terminate upon the
earlier of (i) on the date the condemning authority first takes possession of
the Premises, or (ii) the date title vests in the condemning authority.
14.2. If part of the Premises is taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain, or by private purchase in lieu thereof, and this Lease
is not terminated as provided in Section 14.1, this Lease shall not terminate
but the Base Rent payable during the unexpired portion of this Lease shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances.
14.3. Landlord shall receive the entire award for any such taking
or private purchase in lieu thereof. Tenant shall be entitled to make a claim in
any condemnation proceedings, that does not reduce the amount of Landlord's
award.
14.4. Landlord shall not agree to a sale in lieu of condemnation
if the effect would be to cut short the Lease term stated in Section 1.2.
15. HOLDING OVER. Tenant will, at the termination of this Lease, by
lapse of time or otherwise, immediately yield possession to Landlord. If
Landlord agrees in writing that Tenant may hold over after the expiration or
termination of this Lease, unless the parties otherwise agree in writing on the
terms of such holding over, the hold over tenancy shall be subject to
termination by Landlord or by Tenant at any time upon thirty (30) days advance
written notice, and all of the other terms and provisions of this Lease shall be
applicable during that period except that Tenant shall pay Landlord monthly, as
rental for the period of any hold over, an amount equal to two (2) times the
Base Rent in effect on the termination date, plus all additional rental as
defined herein. No holding over by Tenant, whether with or without consent of
Landlord, shall operate to extend this Lease except as otherwise expressly
provided. The provisions of this Section 15 shall not be construed as Landlord's
consent for Tenant to hold over.
16. QUIET ENJOYMENT. Landlord represents and warrants that it has full
right and authority to enter into this Lease and that Tenant, upon paying the
rent and performing its other covenants and agreements set forth in this Lease,
shall peaceably and quietly have, hold and enjoy the Premises for the term
without hindrance or molestation from Landlord or by anyone having title
paramount to Landlord or claiming through or under Landlord, subject to the
terms and provisions of this Lease.
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17. EVENTS OF DEFAULT. The following events shall constitute events of
defaults by Tenant under this Lease:
(a) Tenant does not pay any installment of the rent or other
payments owed Landlord when due, and such failure shall continue for a period of
five (5) business days after written notice of such default.
(b) Tenant does not comply with any term, provision or covenant
of this Lease (other than as described in subparagraph 17(a)), and does not cure
such failure within thirty (30) days after written notice of the breach is given
to Tenant (or if the breach requires longer than thirty (30) days to cure,
Tenant fails to start curing within thirty (30) days after receipt of written
notice and to promptly and diligently prosecute the cure to completion within
ninety (90) days thereafter.
(c) Tenant makes an assignment for the benefit of creditors.
(d) The filing by or against Tenant of a petition to have Tenant
adjudged bankrupt or a petition for reorganization under any law relating to
bankruptcy (unless in the case of a petition filed against Tenant, the petition
is dismissed within 90 days).
(e) A receiver or trustee is appointed for all or substantially
all of the assets of Tenant.
18. REMEDIES. Upon the occurrence of any event of default described in
Section 17, Landlord shall have the option to pursue any one or more of the
following remedies without notice or demand.
18.1. Cure the default and charge the costs to Tenant, in which
case Tenant shall pay such costs as additional rent promptly on demand, together
with interest thereon at the Default Rate.
18.2. Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails so to do,
Landlord may, without prejudice to any other remedy it may have for possession
or unpaid rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying such Premises or any
part thereof. In such event, Landlord shall be entitled to accelerate the rent
obligation and recover from Tenant all damages incurred by Landlord by reason of
Tenant's default, including (i) the worth at the time of the award of the unpaid
Base Rent, additional rent and other charges that Landlord had earned at the
time of the award, (ii) the worth at the time of the award of the amount of the
unpaid Base Rent, additional rent and other charges that Tenant would have paid
for the balance of the Lease Term after the time of award, and (iii) any other
reasonable amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under the
Lease, including, but not limited to, the cost of recovering possession of the
Premises, reasonable expenses of reletting, and Landlord's reasonable attorneys'
fees incurred in connection, therewith. As used in subpart (i) above, the "worth
at the time of the award" is computed by allowing interest on unpaid amounts at
the Default Rate. As used in subparagraph (ii) above, the "worth at the time of
the award" is computed by discounting such amounts at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award, plus one percent
(1%).
18.3. Without terminating the Lease, enter upon and take
possession of the Premises and expel or remove Tenant and any other person who
may be occupying such Premises or any part thereof, and relet the Premises for
such terms ending before, on or after the expiration date of the Lease Term, at
such rentals and upon such other conditions (including concessions and prior
occupancy periods) as Landlord in its sole discretion may determine, and receive
the rent therefor; and Tenant agrees to pay to the Landlord on demand any
deficiency that may arise by reason of such reletting. Landlord shall mitigate
its damage by making reasonable efforts to relet the Premises on reasonable
terms. If Landlord is successful in reletting the Premises at a rental in excess
of that agreed to be paid by Tenant under the terms of this Lease, Landlord and
Tenant agree that Tenant shall not be entitled, any circumstances, to the excess
rental, and Tenant specifically waives any claim to the excess rental. Landlord
may relet for a shorter or longer period of time than the Lease Term and make
reasonably necessary repairs or alterations. If Landlord relets for a period
longer than the Lease Term, then any special concessions given to the new tenant
shall be allocated throughout the entire reletting term so that Tenant is
charged only with the proportion of the concessions allocated to the remainder
of the Lease Term. All sums collected from reletting shall be applied first to
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Landlord's expenses of reletting described in Section 18.2, and then to the
payment of amounts due from Tenant to Landlord under this Lease.
18.4. Enter upon the Premises, and do whatever Tenant is
obligated to do under the terms of this Lease. Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in thus effecting
compliance with Tenant's obligations under this Lease, and Tenant further agrees
that Landlord shall not be liable for any damages resulting to the Tenant from
such action, whether caused by the negligence of Landlord or otherwise.
18.5. Whether or not Landlord retakes possession or relets the
Premises, Landlord shall have the right to recover unpaid rent and all damages
caused by Tenant's default, including attorney's fees. Damage shall include,
without limitation: all rentals lost, all legal expenses and other related costs
incurred by Landlord following Tenant's default, all costs incurred by Landlord
in restoring the Premises to good order and condition, or in remodeling,
renovating or otherwise preparing the Premises for reletting, all costs
(including without limitation any brokerage commissions and the value of
Landlord's time) incurred by Landlord, plus interest thereon from the date of
expenditure until fully repaid at the Default Rate.
18.6. If Tenant is in default more than once during the Lease
Term in its obligation to pay any installment of Base Rent, additional rent or
other charges owed Landlord under this Lease within ten (10) days from when due,
then to help defray the additional cost to Landlord for processing late payments
Tenant shall pay to Landlord on demand a late charge in an amount equal to five
percent (5%) of the payment. The late charge shall be in addition to all of
Landlord's other rights and remedies under this Lease or at law and shall not be
construed as liquidated damages or as limiting Landlord's remedies in any
manner.
18.7. To the extent not prohibited by law, pursuit of one remedy
shall not preclude pursuit of any other remedies, such remedies being cumulative
and non-exclusive, nor shall pursuit of any remedy constitute a forfeiture or
waiver of any rent due Landlord or of any damages accruing to Landlord by reason
of Tenant's breach of this Lease. No act or thing done by the Landlord or its
agents during the Lease Term shall be deemed a termination of this Lease or an
acceptance of the surrender of the Premises. No agreement to terminate this
Lease or accept a surrender of said Premises shall be valid unless in writing
signed by Landlord. No waiver by Landlord of any violation or breach of this
Lease shall be deemed or construed to constitute a waiver of any other violation
or breach of any of the terms of this Lease. Landlord's acceptance of the
payment of rental or other payments after the occurrence of an event of default
shall not be deemed or construed as a waiver of such default, or as an accord
and satisfaction. Forbearance by Landlord to enforce one or more of the remedies
upon an event of default shall not be deemed or construed to constitute a waiver
of such default or of Landlord's right to enforce any remedies with respect to
such default or any subsequent default.
18.8. If either party employs the services of an attorney in
connection with an event of default by the other party under this Lease, the
nondefaulting party will be entitled to recover from the defaulting party its
reasonable attorney's fees and costs, and if either party brings an action or
proceeding against the other party arising out of or concerning performance or
interpretation of this Lease, the prevailing party shall be entitled to recover
from the other party its attorneys fees and costs.
19. {INTENTIONALLY DELETED}
20. MORTGAGES. Tenant accepts this Lease subject and subordinate to any
mortgage(s) and/or deed(s) of trust ("SECURITY INSTRUMENT") now or at any time
hereafter constituting a lien or charge upon the Premises or the improvements
situated thereon. Within ten (10) business days after written request, Tenant
shall execute a subordination agreement in form and substance reasonably
acceptable to Tenant confirming such subordination. Landlord covenants not to
take any actions or fail to take any actions that could be expected to result in
a default under any such Security Instruments, and agrees to indemnify and hold
Tenant harmless against and from any claims, damages, or losses resulting from
any default under any such Security Instruments. The indemnification provision
of this Section 20 shall survive the expiration or earlier termination of this
Lease.
21. MECHANIC'S LIENS. Tenant shall have no authority, express or
implied, to create or place any lien or encumbrance of any kind or nature upon,
or in any manner to bind, the interest of Landlord in the
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Premises or to charge the rentals payable under this Lease for any claim in
favor of any person dealing with Tenant, including those who may furnish
materials or perform labor for any construction or repairs, and each such claim
shall affect and each such lien shall attach to, if at all, only the leasehold
interest granted to Tenant by this instrument. Tenant will pay or cause to be
paid all sums due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the Premises on
which any lien is or can be validly and legally asserted against its leasehold
interest in the Premises or the improvements thereon. Tenant will discharge, by
bond or otherwise, any mechanic's lien filed against the Premises or the
Building for work claimed to have been done for, or materials claimed to have
been furnished to Tenant, within ten (10) days after filing. Tenant will
indemnify, defend and hold Landlord harmless from any and all loss, cost or
expense based on or arising out of asserted claims or liens against the
leasehold estate or against the right, title and interest of the Landlord in the
Premises or under the terms of this Lease arising out of Tenant's actions during
the Lease Term.
22. NOTICES. All notices, demands or requests which may or are required
to be given by one party to the other under this Lease shall be given in writing
and sent by United States Registered or Certified Mail, postage prepaid, return
receipt requested, or nationally recognized overnight air carrier, and addressed
to the Landlord's address or Tenant's address below, as the case may be. Notices
shall be deemed to have been given upon receipt or attempted delivery where
delivery is not accepted. Either party may change its address upon notice given
to the other. Tenant shall also give default notices to Landlord's mortgagee
after receiving notice from Landlord of the mortgagee's name and address.
LANDLORD: TENANT:
Microsoft Corporation Spacelabs Medical, Inc.
0 Xxxxxxxxx Xxx 00000 X.X. 00xx Xx.
Xxxxxxx, Xxxxxxxxxx 00000 Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx Attn: Xxxx XxXxxxxx
Facsimile No.: (000) 000-0000 General Counsel
Facsimile No.: (000) 000-0000
With a copy to: With a copy to:
Microsoft Corporation King & Spalding
Law and Corporate Affairs 1185 Avenue of the Americas
0 Xxxxxxxxx Xxx Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxxxxxxx 00000 Attn: Xxxxxxxxxxx X. Xxxxx
Attn: Xxx Xxxxxx Facsimile No.: (000) 000-0000
Facsimile No.: (000) 000-0000
23. HAZARDOUS MATERIALS.
(a) The term "Hazardous Materials" refers to any substances,
materials, and wastes that are or become regulated as hazardous or toxic
substances, dangerous wastes, hazardous wastes, extremely hazardous wastes,
special wastes or universal wastes under any applicable local, state or federal
law, regulation or order. Pursuant to the Purchase Agreement, Landlord has
purchased the Premises from Tenant and SLMD-DE. Existing Hazardous Materials on
the Premises disclosed to Landlord before closing of the purchase are referred
to as the "Existing Hazardous Materials". Notwithstanding the foregoing, the
term "Existing Hazardous Materials" shall not include the following to the
extent the same are located on the Premises as of the date of this Lease
(collectively, the "REMOVABLE HAZARDOUS MATERIALS"):
(i) any Hazardous Materials held for distribution by Tenant in
the ordinary course of business;
(ii) any waste Hazardous Materials being stored before disposal
in the ordinary course of business (collectively, the
"WASTE HAZARDOUS Materials"), specifically including the
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following: wastes stored in any dangerous or medical waste
areas (including all containers of Hazardous Materials,
medical sharps, paints, roofing materials, acid
neutralizers, chemical sorbent pads, lubricants,
adhesives, used mercury vapor light bulbs, used
fluorescent lights bulbs, used fluorescent light ballasts
and other materials similar to the foregoing); and
(iii) any other containers of maintenance chemicals stored on
the Premises and used by Tenant in the ordinary course of
business for maintaining the Premises.
(b) The term "New Hazardous Materials" shall mean any Hazardous
Materials that are brought onto, released or discharged on, under, in, above, to
or from the Premises during the Lease Term, and shall not include the Existing
Hazardous Materials. During the Lease Term, Tenant shall not cause or permit the
presence, use, generation, release, discharge, storage, disposal, or
transportation of any New Hazardous Materials or Removable Hazardous Materials
on, under, in, above, to, or from the Premises, other than in strict compliance
with all applicable federal, state and local laws, regulations and orders. On or
before vacating the Premises, Tenant shall remove from the Premises all New
Hazardous Materials and Removable Hazardous Materials, and shall properly
dispose of the same except to the extent the same are being held by Tenant for
distribution or reuse in the ordinary course of business.
(c) Tenant shall indemnify, defend and hold Landlord harmless
from and against the following:
(i) any loss, cost, expense, claim, or liability arising out
of any investigation, monitoring, clean-up, containment,
removal, storage, or restoration work required by, or
incurred by Landlord or any nongovernmental or
governmental entity or person in a reasonable belief that
such work is required by any applicable federal, state or
local law, governmental agency, or political subdivision,
but only to the extent arising out of the presence,
release or discharge on, under, in, above, to, or from the
Premises of any Removable Hazardous Materials or New
Hazardous Materials ("REMEDIAL WORK"); and
(ii) any claims of third parties for loss, injury, expense, or
damage arising out of the presence, release or discharge
on, under, in, above, to, or from the Premises of any
Removable Hazardous Materials or New Hazardous
Materials("THIRD PARTY ENVIRONMENTAL CLAIMS").
Upon obtaining actual knowledge of any claim for Remedial Work or any Third
Party Environmental Claims that could give rise to a claim for indemnification
under this Xxxxxxxxx 00, Xxxxxxxx shall notify Tenant promptly in writing (a
"NOTICE OF CLAIM") of such information as Landlord may have with respect to such
indemnification claim (including copies of any pleadings and any written claim,
demand, invoice or other document evidencing or asserting the same). Tenant
shall have 30 days after receipt of the Notice of Claim to notify Landlord of
Tenant's election to defend such claim on behalf of Landlord. If Tenant elects
to defend such claim, Landlord shall reasonably cooperate with Tenant to assist
in the defense of such claim.
(d) If any Remedial Work is required under any applicable
federal, state or local law during the term of this Lease, Tenant shall perform
or cause to be performed the Remedial Work in compliance with such law,
regulation or order. All Remedial Work shall be performed by one or more
contractors under the supervision of a consulting engineer, each selected by
Tenant and approved in advance in writing by Landlord. If Tenant does not
commence the Remedial Work in a timely fashion or does not diligently prosecute
the Remedial Work to completion, Landlord may, but shall not be required to,
cause the Remedial Work to be performed, subject fully to the indemnification of
this Paragraph 23. The foregoing indemnification obligation shall survive
termination of this Lease.
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24. MISCELLANEOUS.
24.1. BINDING EFFECT; COUNTERPARTS. This Lease shall apply to,
inure to the benefit of, and be binding upon, the parties and their respective
heirs, legal representatives, successors and permitted assigns, except as
otherwise expressly provided in this Lease. Landlord shall have the right to
assign any of its rights and obligations under this Lease. This Lease may be
executed in counterparts for the convenience of the parties.
24.2. AUTHORITY. Each person signing this Lease on behalf of a
party represents and warrants that he/she is duly authorized to execute this
Lease on behalf of such party, and that such party is authorized to enter into
this Lease.
24.3. CAPTIONS AND GOVERNING LAW. The captions inserted in this
Lease are for convenience only, they in no way define, limit or otherwise
describe the scope or intent of this Lease, and shall not be used to interpret
or construe this Lease. This Lease shall be governed by the laws of the State of
Washington.
24.4. ESTOPPEL CERTIFICATE. Tenant agrees from time to time, but
no more frequently than three times during the Lease term, within ten (10)
business days after request of Landlord, to deliver to Landlord, or a
prospective purchaser of or lender against the Property, an estoppel certificate
that this Lease is in full force and effect, the date to which rent has been
paid, the unexpired term of this Lease and such other matters pertaining to the
status of this Lease as may be reasonably requested by Landlord. It is
understood and agreed that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord's
execution of this Lease.
24.5. AMENDMENT. This Lease may not be altered, changed or
amended except by an instrument in writing signed by both parties.
24.6. SURVIVAL. All obligations of the parties hereunder not
fully performed as of the expiration or earlier termination of the term of this
Lease and the indemnity provisions of the parties shall survive the expiration
or earlier termination of the Term hereof, including without limitation all
payment obligations with respect to taxes and insurance and all obligations
concerning the condition of the Premises. Any security deposit held by Landlord
shall be credited against the amount payable by Tenant under this Section 24.6.
24.7. SEVERABILITY. If any clause or provision of this Lease is
found to be illegal, invalid or unenforceable, then the remainder of this Lease
shall not be affected thereby.
24.8. NO OFFER. Submission of this Lease for examination or
signature by Tenant does not constitute a reservation of or option to Lease, and
it is not effective as a Lease or otherwise until execution by and delivery to
both Landlord and Tenant.
24.9. EFFECTIVE DATE. All references in this Lease to "the date"
of this Lease or similar references shall be deemed to refer to the date set
forth in the opening paragraph of this Lease.
24.10. TIME. Time is of the essence of this Lease with respect to
the performance of every provision in which time of performance is a factor.
24.11. RECORDING. Neither party shall record this Lease or a
memorandum thereof without the consent of the other party.
24.12. LIGHT AND AIR. This Lease does not grant any right of
access to light, air or view over the property, and Landlord shall not be liable
from any diminution of light, air or view by an adjacent structure or
vegetation.
25. LIABILITY OF LANDLORD. If Landlord sells or transfers the Premises,
Landlord, on consummation of the sale or transfer, shall be released from any
liability thereafter accruing under this Lease but only if Landlord's successor
has assumed in writing, for the benefit of Tenant, Landlord's obligations under
this
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Lease. If any security deposit or prepaid rent has been paid by Tenant, Landlord
shall transfer such security deposit or prepaid rent to Landlord's successor and
on such transfer and the assumption by such transferee of Landlord's obligations
under this Lease, Landlord shall be discharged from any further liability with
respect to such security deposit or prepaid rent. Tenant agrees that no officer,
employee, agent, or individual partner of Landlord, or its constituent entities,
shall be personally liable for any obligation of Landlord under this Lease, and
that Tenant must look solely to the interest of Landlord, or its constituent
entities in the subject real estate and the rents, proceeds, profits and income
therefrom, for the enforcement of any claims against Landlord arising under or
in connection with this Lease.
26. NO WASTE. Subject to the limitations contained in Section 5 above:
(i) Tenant shall make all repairs to the Premises necessitated by the negligence
or willful misconduct during the Lease term of Tenant, its agent, employees or
invitees, and (ii) Tenant shall not commit or suffer any waste to the Premises
during the Lease term, provided, that in each of subsection (i) and (ii) there
shall be excepted repairs due to reasonable wear and tear, casualty and
condemnation, and any other damage that is covered by the insurance described in
Section 12.
27. WAIVER OF TRIAL BY JURY. Landlord and Tenant each agree to and they
hereby do waive trial by jury in any action, proceeding or counterclaim brought
by either party against the other on any matter arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, Tenant's use
or occupancy of the Premises, any claim of injury or damage, or any statutory
remedy.
28. GUARANTY. This Lease shall be effective only if SLMD-DE executes,
concurrently with the execution of this Lease, the Lease Guaranty attached
hereto as Exhibit B
29. SUBLEASE. This Lease is a sublease, subject and subordinate, to the
terms of that certain Lease Agreement between Xxxxx Fargo Bank Northwest,
National Association, not in its individual capacity, but solely as trustee
under MS Trust 2001-1 (the "Synthetic Lease Trust"), as landlord, and Landlord,
as tenant, (as amended, modified, supplemented, or restated from time to time,
the "Synthetic Lease"). Landlord covenants not to take any actions or fail to
take any actions that could be expected to result in a default under the
Synthetic Lease, and agrees to indemnify and hold Tenant harmless against and
from any claims, damages, or losses resulting from a default under the Synthetic
Lease.
LANDLORD:
MICROSOFT CORPORATION, a Washington corporation
By ______________________________________________
Its _________________________________________
TENANT:
SPACELABS MEDICAL, INC., a California corporation
By ______________________________________________
Its _________________________________________
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STATE OF WASHINGTON )
) ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that
_____________________ is the person who appeared before me, and said person
acknowledged that he signed this instrument, on oath stated that he was
authorized to execute the instrument and acknowledged it as the of Microsoft
Corporation to be the free and voluntary act of such party for the uses and
purposes mentioned in the instrument.
Dated: ________________
____________________________________
Notary Public
____________________________________
[Printed Name]
My appointment expires _____________
STATE OF WASHINGTON )
) ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that
___________________________ is the person who appeared before me, and said
person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the
____________________________ of Spacelabs Medical, Inc. to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated: _________________
____________________________________
Notary Public
____________________________________
[Printed Name]
My appointment expires _____________
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EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
PARCEL 1:
THAT PORTION OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF THE SOUTHWEST 1/4 OF
SECTION 14, TOWNSHIP 25 NORTH, RANGE 5 EAST, X.X., LYING WEST OF SR 520, AS
CONVEYED TO THE STATE OF WASHINGTON, BY DEED RECORDED OCTOBER 28, 1971, UNDER
RECORDING NO. 7110280156;
TOGETHER WITH THE NORTH 1/2 AND THE WEST 236.028 FEET, AS MEASURED AT RIGHT
ANGLES, OF THE SOUTH 1/2 OF THE FOLLOWING DESCRIBED TRACT OF LAND:
THE SOUTHWEST 1/4 OF THE SOUTHEAST 1/4 OF THE SOUTHWEST 1/4 OF SECTION 14,
TOWNSHIP 25 NORTH, RANGE 5 EAST, X.X., LYING WEST OF SR 520, AS CONVEYED TO THE
STATE OF WASHINGTON, BY DEED RECORDED OCTOBER 28, 1971, UNDER RECORDING NO.
7110280156;
EXCEPT THE SOUTH 30.00 FEET THEREOF FOR ROAD;
AND EXCEPT THAT PORTION CONVEYED TO THE CITY OF XXXXXXX BY DEED RECORDED UNDER
KING COUNTY RECORDING NO. 8310180010;
AND EXCEPT THAT PORTION CONVEYED TO THE STATE OF WASHINGTON BY DEED RECORDED
UNDER KING COUNTY RECORDING NO. 7209270505;
AND EXCEPT THAT PORTION THEREOF CONVEYED TO THE STATE OF WASHINGTON BY DEED
RECORDED UNDER KING COUNTY RECORDING NO. 9902252351;
AND TOGETHER WITH THAT PORTION OF THE NORTH 3/4 OF THE EAST 1/2 OF THE SOUTHWEST
1/4 OF THE SOUTHWEST 1/4 OF SECTION 14, TOWNSHIP 25 NORTH, RANGE 5 EAST, X.X.,
DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE EAST LINE OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4
OF SAID SECTION, SAID POINT BEING 737.34 FEET NORTH OF THE SOUTHEAST CORNER
THEREOF; THENCE NORTH 89 DEGREES 58'18" WEST ALONG THE NORTH LINE OF THE SOUTH
737.34 FEET OF SAID SUBDIVISION, A DISTANCE OF 177.21 FEET; THENCE SOUTH 00
DEGREES 25'37" EAST A DISTANCE OF 398.01 FEET; THENCE SOUTH 89 DEGREES 45'23"
EAST A DISTANCE OF 177.22 FEET TO A POINT ON THE EAST LINE OF SAID SUBDIVISION
WHICH IS 398.67 FEET SOUTH OF THE POINT OF BEGINNING; THENCE NORTH 00 DEGREES
25'37" WEST ALONG SAID EAST LINE A DISTANCE OF 398.67 FEET TO THE POINT OF
BEGINNING;
(BEING KNOWN AS LOTS 2 AND 3 OF LOT LINE REVISION NO. LLR 90-0013, ACCORDING TO
THE LOT LINE ADJUSTMENT RECORDED UNDER KING COUNTY RECORDING NO. 9103059015,
EXCEPT THAT PORTION THEREOF LYING EASTERLY OF SR 520 AS CONVEYED BY DEED NO.
9902252351);
SITUATE IN XXX XXXX XX XXXXXXX, XXXXXX XX XXXX, XXXXX XX XXXXXXXXXX.
PARCEL 2:
THE SOUTH 1/2 OF THE SOUTHEAST 1/4 OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF
SECTION 14, TOWNSHIP 25 NORTH, RANGE 5 EAST, X.X.;
EXCEPT THE EAST AND WEST 30 FEET THEREOF;
A-1
17
AND EXCEPT THE SOUTH 40 FEET THEREOF CONVEYED TO KING COUNTY FOR N.E. 00XX
XXXXXX BY DEED RECORDED UNDER KING COUNTY RECORDING NO. 2442028 AND CONVEYED TO
THE CITY OF XXXXXXX BY DEED RECORDED UNDER KING COUNTY RECORDING NO. 8102050557;
SITUATE IN XXX XXXX XX XXXXXXX, XXXXXX XX XXXX, XXXXX XX XXXXXXXXXX.
PARCEL 3:
THE EAST 30 FEET OF THE SOUTH 1/2 OF THE SOUTHEAST 1/4 OF THE SOUTHWEST 1/4 OF
THE SOUTHWEST 1/4 OF SECTION 14, TOWNSHIP 25 NORTH, RANGE 5 EAST, X.X.;
AND EXCEPT THE SOUTH 40 FEET THEREOF CONVEYED TO KING COUNTY FOR N.E. 00XX
XXXXXX BY DEED RECORDED UNDER KING COUNTY RECORDING NO. 2442028 AND CONVEYED TO
THE CITY OF XXXXXXX BY DEED RECORDED UNDER KING COUNTY RECORDING NO. 8102050557;
SITUATE IN XXX XXXX XX XXXXXXX, XXXXXX XX XXXX, XXXXX XX XXXXXXXXXX.
PARCEL 4:
A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS AS CREATED IN ACCESS
EASEMENT AND MAINTENANCE AGREEMENT RECORDED UNDER RECORDING NO. 9102251395.
PARCEL 5:
A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS AS CREATED IN EASEMENT AND
BUSINESS APPROVAL AGREEMENT RECORDED UNDER RECORDING NO. 8310030552.
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EXHIBIT B
GUARANTY
In consideration of the execution of that certain Lease Agreement
between Microsoft Corporation, a Washington corporation ("Landlord") as
landlord, and Spacelabs Medical, Inc., a California corporation ("Tenant") , as
tenant (the "Lease") of even date herewith, affecting premises more particularly
described therein and commonly known as 15120 and 00000 X.X. 00xx, Xxxxxxx,
Xxxxxxxxxx, the undersigned ("Guarantor") hereby guarantees to Landlord, and its
successors and assigns, the performance of all obligations of the Tenant under
the Lease, including, without limitation, the payment of all rent and other sums
payable by Tenant under the Lease, and agrees to pay to Landlord all damages
that may arise in consequence of any default by Tenant under the Lease,
including, without limitation, all reasonable attorneys' fees incurred by
Landlord in connection with any default by Tenant under the Lease or in
connection with the enforcement of this Guaranty.
This Guaranty is an absolute and unconditional guaranty of payment and
of performance. It shall be enforceable against Guarantor without the necessity
of any suit or proceedings on the Landlord's part against the Tenant or its
successors and assigns, and without the necessity of any notice of non-payment,
non-performance, or non-observance, or of any notice of acceptance of this
Guaranty, or of any other notice or demand to which the Guarantor might
otherwise be entitled, all of which Guarantor hereby waives. Guarantor agrees
that this Guaranty and the obligations of the Guarantor hereunder shall not be
terminated, affected, diminished, or impaired by reason of (i) any failure by
Landlord to assert against Tenant or its successors or assigns any right or
remedy Landlord may have, (ii) any assignment, renewal, modification or
extension of the Lease, (iii) any waiver by Landlord of any term or provision of
the Lease, (iv) any bankruptcy or insolvency of Tenant, or its successors or
assigns, or (v) any dealings or transactions between Landlord and Tenant,
whether or not Guarantor has consented to or received notice of any of the
foregoing.
Dated: September 12, 2001.
SPACELABS MEDICAL, INC., a Delaware corporation
By ____________________________________________
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SCHEDULE 7.1
A. Items that could be considered fixtures, but that Tenant may remove
during the Lease Term and shall remove at the end of the Lease Term:
Equipment used in Manufacturing and as part of Spacelabs' business
Reception Desks
Security system
Computer projection systems in conference rooms
Enclosed white boards
EMI test chamber
TM antennas
Clock system (both buildings)
Reader boards (both buildings)
TV's on mounts (both buildings)
Vent hoods above gas work benches (both buildings)
All telephone switch equipment (both buildings)
Air compressors (both buildings)
Wire cage systems throughout both buildings
Eye wash systems
Pallet Wrapper
Kitchens: (both buildings)
Refrigerators
Stoves
Grills
Fryers
Dishwashers
Stainless work counters
B. Items that might be considered personal property but will stay in the
Premises at the end of the Lease Term:
Building supplies unique to these buildings (matching carpet, tiles and
like items)
Projection screens in demo rooms and ECR
Raised floor and tiles in computer rooms
Hoods to stoves in kitchens
Schedule 7.1-1
20
TABLE OF CONTENTS
1. PREMISES AND TERM............................................ 1
2. BASE RENT AND SECURITY DEPOSIT............................... 1
3. USE.......................................................... 2
4. TAXES AND OTHER CHARGES...................................... 2
5. TENANT'S MAINTENANCE......................................... 3
6. LANDLORD OBLIGATIONS......................................... 4
7. ALTERATIONS.................................................. 4
8. SIGNS........................................................ 4
9. INSPECTION................................................... 4
10. UTILITIES.................................................... 5
11. ASSIGNMENT AND SUBLETTING.................................... 5
12. INSURANCE, FIRE AND CASUALTY DAMAGE.......................... 5
13. INDEMNITY.................................................... 7
14. CONDEMNATION................................................. 8
15. HOLDING OVER................................................. 8
16. QUIET ENJOYMENT.............................................. 8
17. EVENTS OF DEFAULT............................................ 9
18. REMEDIES..................................................... 9
19. {INTENTIONALLY DELETED}...................................... 10
20. MORTGAGES.................................................... 10
21. MECHANIC'S LIENS............................................. 10
22. NOTICES...................................................... 11
23. HAZARDOUS MATERIALS.......................................... 11
24. MISCELLANEOUS................................................ 13
24.1. Binding Effect; Counterparts.......................... 13
24.2. Authority............................................. 13
24.3. Captions and Governing Law............................ 13
24.4. Estoppel Certificate.................................. 13
24.5. Amendment............................................. 13
24.6. Survival.............................................. 13
24.7. Severability.......................................... 13
24.8. No Offer.............................................. 13
24.9. Effective Date........................................ 13
24.10. Time ............................................... 13
24.11. Recording............................................. 13
24.12. Light and Air......................................... 13
25. LIABILITY OF LANDLORD........................................ 13
26. NO WASTE..................................................... 14
27. WAIVER OF TRIAL BY JURY...................................... 14
28. GUARANTY..................................................... 14
29. SUBLEASE..................................................... 14
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