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EXHIBIT 10.10
AGREEMENT TO LEASE
This Agreement ("Lease"), as of the 1st day of June, 1996 is by and between
SIXTH & VIRGINIA PROPERTIES, a Washington General Partnership, hereinafter
called "Owner," and InterNAP Network Services, L.L.C., a Washington Limited
Liability corporation, hereinafter called "Tenant."
1. NONSTANDARD PROVISIONS
The following constitute the nonstandard provisions of this Lease and are
referred to elsewhere herein.
a. FLOOR OF THE WESTIN BUILDING ON WHICH PREMISES ARE LOCATED:
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b. AGREED FLOOR AREA OF PREMISES:
Five thousand eight hundred fifty four (5854) square feet that
includes an allowance for core and/or common areas used by Tenant.
c. THE TERM OF THIS LEASE (hereinafter "Lease Term") shall be Five (5)
years and shall commence on the 1st day of June, 1996, and end on the
31st day of May, 2001.
d. MONTHLY BASE RENT:
June 1, 1996 - May 31, 1997 $8781
June 1, 1997 - May 31, 1998 $9269
June 1, 1998 - May 31, 1999 $9757
June 1, 1999 - May 31, 2000 $10,245
June 1, 2000 - May 31, 2001 $10,732
e. RENT PER DAY during any occupancy prior to commencement of Lease Term:
none
f. Reimbursement to Owner for Special Improvements:
Total tenant improvement costs and utility upgrades are projected to
cost $137,775.00. Owner and Tenant agree to split the cost of such
improvements described in exhibit C. Tenant agrees to pay interest at
10% per annum on any amounts paid for by Owner. One half of the Tenant
Improvement balance held by the Owner plus any accrued interest at 10%
per annum will be paid on the first day of the second year of the
lease. The remaining balance plus accrued interest at 10% per annum
will be paid on the first day of the third year.
g. USE PERMITTED ON PREMISES:
Internet communications facilities and general office use.
h. TENANT'S ADDRESS FOR NOTICES IF OTHER THAN PREMISES:
none
i. TENANT'S BILLING ADDRESS IF OTHER THAN PREMISES:
n/a
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j. PARKING:
During the Lease Term, Owner shall provide Tenant with unreserved parking
space for five (5) automobiles in The Westin Building Garage. The space
shall be made available during periods of typical office use from 7:00 a.m.
to 6:00 p.m. five days per week, Monday through Friday, and at other times
for the person to whom such space is regularly rented who wishes to work
in building.
Tenant shall pay in advance the charge established by Owner for said
spaces, in addition to rent hereunder. If Tenant fails to timely pay such
charge, Owner may by written notice to Tenant elect either to proceed as
provided in Article 14 or to cease to provide the foregoing parking spaces.
Upon initial occupancy of Garage, the charge for these spaces shall be
$138.00 per month (including tax). From time to time during this Lease, the
charge for spaces shall be increased to the then-prevailing rate for
similar service in the immediate area.
Owner shall maintain the right to pass on to Tenant all applicable parking
taxes.
k. RELOCATION OF PREMISES:
Owner shall have the right to relocate the Premises in Building on the
following terms and conditions:
1) The floor area of the new location shall be approximately the same as
the floor area of the original location;
2) Tenant will be reimbursed for all reasonable expenses incurred in
connection with the relocation, including but not limited to the net
cost of putting the new Premises in the same condition as the original
location, moving, signage, telephone & computer equipment relocation
and reasonable quantities of new stationery;
3) Owner shall give Tenant at least Ninety (90) days written notice of
relocation.
l. SECURITY DEPOSIT:
Concurrently with the execution of this Lease, Tenant shall deliver to
Owner a sum equal to Seventeen Thousand Five Hundred Sixty two Dollars
($17,562.00), this as security for the performance by Tenant of every
covenant and condition of this Lease. Upon payment of deposit, Tenant
shall request and Owner shall deliver to Tenant a written receipt therefor.
Deposit may be commingled with other funds of Owner and shall bear no
interest. If Tenant shall default with respect to any covenant or condition
of this Lease, including but not limited to the payment of rent, Owner may
apply the whole or any part of deposit to the payment of any sum in default
or any other sum which Owner may be required to spend by reason of Tenant's
default. Should Tenant comply with all of the covenants and conditions of
this Lease, deposit shall be returned to Tenant (or, at the option of
Owner, to the last assignee of Tenant's interest in this Lease) at the
expiration of the term hereof. Tenant shall not move into Premises until
said deposit has been paid to Owner.
m. SIGNAGE:
Owner will provide signage, according to building standards, to Tenant with
Tenant's business name at Three (3) separate locations:
1) Main Lobby Directory - Sixth Avenue
2) Third Floor Lobby Directory - Skybridge entrance from Garage
3) Elevator Lobby Directory on Tenant's floor
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n. HOLDING OVER:
If Tenant shall continue its occupancy of the Premises after the
expiration of the Lease Term, the occupancy shall not be deemed to
extend or renew the term of this Lease, and such occupancy shall
constitute a tenancy from month to month, subject to all of the terms
of this Lease, except the term, and except that the Rent for each
month of continued occupancy shall be double the Rent for the last
full month of the Lease Term. Tenant shall also be liable for Owner's
incidental and consequential damages sustained by virtue of Tenant's
holding.
o. SQUARE FOOTAGE ADJUSTMENT:
Owner and Tenant agree that reasonable attempts have been made to
determine the correct square footage used in this Lease. Owner grants
Tenant the option to remeasure and challenge the new premises square
footage calculation at Tenant's expense. If Tenant's square footage
calculation differs from the number used in this Lease, Owner will
remeasure at Owner's expense to determine which calculation is
correct. Owner and Tenant agree that any challenge of the square
footage calculation must be carried out within one month of the
commencement date. After that time, Owner and Tenant agree to mutually
waive any and all rights, claims, or liabilities against each other
as it relates to the calculation of square footages to determine
rents and other costs in this Lease.
p. MEET-ME ROOM ACCESS
Tenant shall have the right to share usage of the 19th floor Meet-Me
Room and associated wiring conduit. Owner shall supervise the
maintenance of the room by tenant-users and shall use all reasonable
means to ensure this facility is always available to Tenant. Tenant
agrees to abide by the regulations set jointly by owners and
tenant-users or, should its practices conflict with those
regulations, to vacate immediately upon written request. As in
Article 7, Owner shall not be liable for damages nor shall the rental
herein be abated for failure to furnish or interruption in service
in this facility.
For Meet-Me Room usage, Tenant shall pay a one-time usage fee of Five
Hundred Dollars ($500.00) no later than Thirty (30) days following
Commencement Date and a recurring monthly charge of $50.00 per DSX
panel installed within the room.
q. CABLE RIGHT OF WAY
Owner gives to Tenant the right of way to install cable from the
Premises to the "Meet Me Room" on the 19th floor. Such installation
is at Tenant's expense and subject to limitations and exclusions
presented within Lease. Such installation must be coordinated with
and approved by The Westin Building Engineer. Cabling to areas of the
building other than the Meet-Me Room shall be governed by the same
terms and conditions set forth above but shall additionally be
subject to monthly recurring charges as established by Owner for all
other cable run by users throughout the building.
r. CLASS "A" ENTRY
Tenant acknowledges owners requirement for the premises to have an
entry that is compatible with the Class "A" image of the building.
Tenant shall cooperate with Owner in developing an entry plan that
meets Owner's need for appearance and Tenant's need for privacy and
control. Owner agrees that the common areas of the floor specifically
the lobby and restrooms will be renovated within a reasonable time
consistent with the class A image.
s. OPTION TO EXTEND:
Provided that Tenant is not in default hereunder at the time of the
exercise of the Option to Extend and/or at the commencement of the
extended term, Tenant shall have the option to extend the term of
this lease beyond the Initial Term for an additional period of Five
(5) years (the "Extended Term") subject to expansion rights of a full
floor tenant on the 7th or 9th floors. In this event however tenant
shall first have the option to renew this lease by taking the entire
eighth floor. The option provided hereunder shall be exercised, if at
all, only by
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written notice to Owner not later than August 31, 2000. The same
terms and conditions applicable to the Initial Term of this
Lease shall apply during the Extended Term, except that the
monthly Rent shall be an amount equal to the product of (1) the
agreed floor area of the Premises multiplied by (2) the monthly
rent per rentable square foot established by Owner, in its
reasonable judgment, for new leases in the Building for
substantially equivalent size and located space as of the date
of Tenant's exercise of its Option to Extend.
t. EQUIPMENT AND FIXTURES:
Owner and Tenant agree that the premises contains the following
mechanical systems: specialized HVAC system to include two (2)
twenty (20) ton Liebert floor mounted air conditioning units and
associated piping; specialized fire protection system consisting
of a halon system and hydraulic preaction valve; and a domestic
water backup system for the HVAC units. These systems are to be
considered fixtures which Tenant shall take possession of and
have the right to use. Tenant shall be responsible for
maintaining the systems and preserving their functionality
through out their normal life cycle. Should any of the components
of these systems fail and require replacement, Tenant
shall at its option and its expense, replace necessary
components or restructure the system to eliminate the unwanted
component in a manner approved by the Building Engineer. If
Tenant elects to replace components at substantial capital cost,
it shall have the option to designate such components as trade
fixtures which Tenant will then be entitled to remove upon
expiration of this Lease and vacation of the Premises.
2 EXHIBITS
The following Drawings and Special Provisions are attached hereto as
exhibits and made a part of this Lease:
Exhibit A -- Floor plan of the Westin Building, herein called
"Building."
Exhibit B -- Site plan showing relation and location of Building and
Westin Building Garage.
Exhibit C -- Details of Premises Approved by Owner and Tenant.
3 PREMISES
Owner hereby leases to Tenant, and Tenant hereby leases of Owner, upon the
terms and conditions herein set forth, those certain Premises, described
in Article 1(a) and (b) and shown outlined in red on the standard floor
plan attached hereto marked "Exhibit A" and made a part hereof in that
certain Building, known as the Westin Building situated in the City of
Seattle, County of King, State of Washington, at Sixth Avenue and Virginia
Street, and located on the following real property:
Lots 11 and 12 (less portion for street), Block 15 of Addition to
town of Seattle, as laid off by Heirs of Xxxxx X. Xxxx, deceased
(commonly known as Heirs of Xxxxx X. Xxxx'x Addition to the City of
Seattle), as per plat recorded in Volume I of plats, page 103, records
of King County, Washington.
The areas so leased are hereinafter called "Premises."
4 RENT
Tenant covenants and agrees to pay Owner the monthly rent which is set
forth in Article 1(d) to be adjusted as provided elsewhere in this Lease,
in United States currency in advance on or before the first day of each
calendar month during said term, at the office of Owner in Building or at
such other place as Owner may from time to time designate in writing. It
is agreed that since collection of any amount past due imposes an
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administrative cost on Owner, in addition to all other sums that may be
charged by Owner hereunder, Tenant shall pay to Owner a sum equal to Five
Cents ($0.05) for every Dollar not paid when due.
5 USE
Premises may be used only for the purpose set forth in Article 1(g) and
for no other purpose or purposes without the written consent of Owner. No
use shall be made of Premises, nor act done in or about Premises, which is
unlawful, or which may increase the existing rate of insurance upon
Building. Tenant shall not commit or allow to be committed any waste upon
Premises, or any public or private nuisance or other act or thing which
disturbs the quiet enjoyment of any other tenant in Building, nor shall
Tenant, without the written consent of Owner, use any apparatus, machinery
or device in or about Premises that shall cause any substantial noise or
vibration. If any of Tenant's office machines and equipment should disturb
the quiet enjoyment of any other tenant in Building, then Tenant shall
provide adequate insulation or take such other action as may be necessary
to eliminate the disturbance. Tenant shall observe such reasonable rules
and regulations as may be adopted by Owner for the safety, care and
cleanliness of Premises or Building and the preservation of good order
therein.
6 POSSESSION
In the event of Owner's inability to deliver possession of Premises ready
for occupancy at the commencement of the Lease Term, Owner shall not be
liable for any damage caused thereby, except as otherwise expressly stated
herein, nor shall this Lease become void or voidable, nor shall the Lease
Term be extended, but in such event, no rental shall be payable by Tenant
to Owner for any portion of the Lease Term prior to actual delivery to
Tenant of possession of Premises ready for occupancy by Tenant unless
Tenant shall have failed to meet its obligations under Article 23 or
unless the term of this Lease does not commence on or before July 1, 1996
without fault on the part of Tenant in which event Tenant's sole remedy
shall be to cancel the Lease by giving thirty (30) days written notice of
its said election to Owner. If Tenant, with Owner's permission, enters
into possession of Premises prior to commencement of the Lease Term, all
of the terms and conditions of this Lease shall apply during such prior
period, except that rental shall be the amount set forth in article 1(e)
for each calendar day during such prior period.
7 SERVICES PROVIDED BY OWNER
Owner shall, at its sole cost and expense, maintain Premises and the
public and common areas of Building, such as lobbies, stairs, landscaping,
corridors and restrooms, together with the Westin Building Garage, in
reasonably good order and condition except for damage occasioned by the
act of Tenant.
Owner, at its sole cost, shall furnish Premises from 7:00 a.m. to 6:00
p.m. Monday through Friday (exclusive of holidays), hereinafter called
"Standard Work Week," with electricity for lighting and the operating of
office machines, heat and air conditioning as may be reasonably required
for the occupation of Premises, and shall provide elevator service,
lighting replacement, toilet room supplies, window washing with reasonable
frequency, and daily janitorial service on the basis of a Standard Work
Week during the times and in the manner that such janitorial services are
customarily furnished in general office buildings in the area. Owner
shall not be liable for damages, nor shall the rental herein reserved be
abated, for failure to furnish or delay in furnishing any of the foregoing
services, when such failure or delay is caused by accident or conditions
beyond the control of Owner, or by labor disturbances or labor disputes of
any character, or by inability to secure fuel, supplies, machinery,
equipment or labor after reasonable efforts to do so, or by the making of
improvements or necessary repairs to Premises or Building, nor shall the
temporary failure to furnish any of such services be construed as an
eviction of Tenant or relieve Tenant from the duty of observing and
performing any of the provisions of this Lease.
Tenant acknowledges that the 24-hour nature of its business exceeds the
Standard Work Week described above. Owner shall at Tenant's cost install a
meter in the electrical system supplying Tenant's equipment room, measure
usage and xxxx Tenant monthly at the same rate, including demand charges,
billed by Seattle City Light plus a monthly billing fee of $10.00.
Additionally, Tenant shall pay for all other expenses incurred by Owner as
a result of Tenant using Premises in excess of Standard Work Week.
8 REPAIRS AND ALTERATIONS
Tenant agrees by taking possession of the Premises that Premises are then
in a tenantable and good condition, that Tenant will take good care of
Premises, and the same will not be altered or in any way changed without
the written consent of Owner. Tenant hereby waives any right to make
repairs at Owner's
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expense. Tenant shall not make changes to locks on doors or add, disturb,
or in any way change any plumbing or wiring without first obtaining
written consent of Owner. All damages or injury done to the Premises by
Tenant, or by any persons who may be in or upon Premises with the consent
of Tenant, shall be paid for by Tenant and Tenant shall pay for all
damages to Building caused by Tenant's misuse of Premises or the
appurtenances thereto. All other repairs to Premises necessary to maintain
Premises in a tenantable and good condition shall be done by or under the
direction of Owner and at Owner's expense except as otherwise specifically
provided herein. Tenant shall pay for the replacement of Special
Improvements as provided in Article 23 and the replacement of doors or
windows of Premises which are cracked or broken by Tenant, its employees,
agents, or invitees, and Tenant shall not put any curtains, draperies or
other hangings on or beside the windows in Premises without first
obtaining Owner's consent. Owner agrees that it will repaint the interior
of Premises at least once every five years with a color mutually agreed
upon between Tenant and Owner. Owner may make any alterations or
improvements which Owner may deem necessary for the preservation, safety
or improvement of Premises or Building. All alterations, additions and
improvements, except trade fixtures installed by Tenant and which are
removable without damage to Building, shall become the property of Owner.
Tenant shall, at the termination of this Lease by the expiration of time
or otherwise, surrender and deliver up Premises to Owner in as good
condition as when received by Tenant from Owner, reasonable use and wear
and damage by fire or other casualty excepted.
Should Owner be required to make changes or additions to Building or
Westin Building Garage at any time during the term of this Lease as a
result of any law, rule, code or regulation which becomes effective after
the Commencement Date, the Tenant shall pay on demand by Owner, as
additional rent, a monthly charge equal to the area of Premises as stated
in Article 1(b) divided by 350,000 times 1 and 1/3 percent of the cost of
the change or addition. Such additional rent shall commence upon
substantial completion of each such change or addition and shall continue
to the end of the term of this Lease.
9 ENTRY AND INSPECTION
Tenant will permit Owner and its agents to enter into and upon Premises
at all reasonable times for the purpose of inspecting the same or for the
purpose of cleaning, repairing, altering or improving Premises or
Building and when reasonably necessary may close entrances, doors,
corridors, elevators or other facilities without liability to Tenant by
reason of such closure and without such action by Owner being construed
as an eviction of Tenant or relieving the Tenant from the duty of
observing and performing any of the provisions of this Lease. Owner shall
have the right to enter Premises for the purpose of showing Premises to
prospective tenants for a period of 180 days prior to the expiration of
the Lease Term.
10 DAMAGE OR DESTRUCTION
If Premises or Building are damaged by fire, wind, or other such casualty,
the damage shall be repaired by and at the expense of Owner, provided such
repairs (to restore Premises to usable condition) can be made within sixty
(60) days after the occurrence of such damage without the payment of
overtime or other premiums, and until such repairs are completed, the rent
shall be abated in proportion to the part of Premises which is unusable by
Tenant in the conduct of its business (but there shall be no abatement of
rent by reason of any portion of Premises being unusable for a period
equal to one day or less).
If such repairs cannot be made within sixty (60) days, Owner may, at its
option, make them within a reasonable time, and in such event this Lease
shall continue in effect and the rent shall be abated in the manner
provided above. Owner's election to make repairs must be evidenced by
written notice to Tenant within thirty (30) days after the occurrence of
the damage.
If Owner does not elect to make such repairs that cannot be made within
sixty (60) days, then either party may, by written notice to the other,
terminate this Lease. A total destruction of Building shall automatically
terminate this Lease.
11 ADVERTISING
Tenant shall not inscribe any inscription, post, place, or in any manner
display any sign, notice, picture, placard or poster, or any advertising
matter whatsoever, anywhere in or about Premises or Building at places
visible (either directly or indirectly as an outline or shadow on a glass
pane) from any where outside Premises without first obtaining Owner's
written consent thereto.
12 INDEMNITY, LOSS AND WAIVER OF SUBROGATION
Tenant shall defend and indemnify Owner and save it harmless from and
against any and all liability, damages, costs, or expenses, including
attorneys' fees, arising from any act, omission or negligence of Tenant
or the officers, contractors, licensees, agents, servants, employees,
guests, invitees, or visitors of Tenant in or about Building, or arising
from any accident, injury, or damage, howsoever and by
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whomsoever caused, to any person or property, occurring in or about
Premises, provided that the foregoing provision shall not be construed to
make Tenant responsible for loss, damage, liability, or expense resulting
from injuries to third parties caused by the negligence of Owner or of any
officer, contractor, licensee, agent, servant, or employee of Owner. Owner
shall not be responsible for providing security and Tenant hereby releases
Owner from any claim for damage or loss of property that may arise as a
result of vandalism or theft in Building or Westin Building Garage. Owner
and Tenant each release the other from responsibility for, and waive their
entire claim of recovery for (i) any loss or damage to the real or personal
property of either located anywhere in Building and Westin Building Garage,
arising out of or incident to the occurrence of any of the perils which may
be covered by a fire and lightning insurance policy, with extended coverage
endorsement in common use in the Seattle locality or (ii) loss resulting
from business interruption at Premises or loss of rental income from
Building, arising out of or incident to the occurrence of any of the perils
that may be covered by a business interruption insurance policy and by the
loss of rental income insurance policy in common use in the Seattle
locality. To the extent that such risks under (i) and (ii) are in fact
covered by insurance, each party shall cause its insurance carriers to
consent to such waiver and to waive all rights of subrogation against the
other party.
13 LIENS AND INSOLVENCY
Tenant shall keep Premises and Building free from any liens or encumbrances
arising out of any work performed by Tenant, materials furnished by Tenant,
or obligations incurred by Tenant. Owner may terminate this Lease by giving
Tenant notice of its election to do so, if; (i) Tenant files a voluntary
petition in bankruptcy, or for reorganization under the bankruptcy laws, or
is adjudged a bankrupt by a court of competent jurisdiction, (ii) if
Tenant makes an assignment for the benefit of creditors, or if a receiver
is appointed for Tenant's business, or (iii) any other action is taken by
or against Tenant under any State or Federal insolvency or bankruptcy act.
No interest in this Lease or estate hereby created in favor of Tenant shall
pass by operation of law under any such bankruptcy or insolvency act to any
person whomsoever without the prior express written consent of Owner. Any
purported transfer in violation of this Article shall constitute a default
by Tenant.
14 DEFAULT AND RE-ENTRY
Except for a default under the preceding paragraph for which immediate
right of termination is given to Owner, if Tenant fails to pay any
installment of rent when due (plus interest on past due amounts at the
maximum legal rate from the date due) after 3 days written notice, or to
perform any other covenant under this Lease within thirty (30) days after
written notice from Owner stating the nature of the default, Owner may
re-enter and take possession of Premises using all reasonable force to do
so; provided, however, that if the nature of such default other than for
non-payment of rent is such that the same cannot reasonably be cured within
such thirty-day period, Tenant shall not be deemed to be in default if
Tenant shall within such period commence such cure and thereafter
diligently prosecute the same to completion. Notwithstanding such retaking
of possession by Owner, Tenant's liability for the rent provided herein
shall not be extinguished for the balance of the term of this Lease. Upon
such re-entry, Owner may elect either (i) to terminate this Lease, in which
event Tenant shall immediately pay to Owner a sum equal to that by which
the then cash value of the total rent reserved under this Lease for the
balance of the Lease Term exceeds the reasonable rental value of the
Premises for the balance of the Lease Term plus costs incident to releasing
the Premises including, but not limited to remodeling expenses, attorney's
fees and real estate commissions; or (ii) without terminating this Lease,
to relet all or any part of the Premises as the agent of and for the
account of Tenant upon such terms and conditions as Owner may deem
advisable, in which event the rents received on such reletting shall be
applied first to the expenses of reletting and collection, including
necessary renovation and alteration of Premises, reasonable attorney's fees
and real estate commissions paid, and thereafter to payment of all sums due
to or to become due Owner hereunder, and if a sufficient sum shall not be
thus realized to pay such sums and other charges, Tenant shall pay Owner
any deficiency monthly, and Owner may bring an action therefor as such
monthly deficiency shall arise.
In the event of any such retaking of possession of Premises by Owner as
herein provided, Tenant shall remove all personal property located thereon
and, upon failure to do so upon demand of Owner, Owner may, in addition to
any other remedies allowed by law, remove and store the same in any such
place selected by Owner, including but not limited to a public warehouse,
at the expense and risk of Tenant. If Tenant shall fail to pay any sums due
hereunder or the cost of storing any such property after it has been stored
for a period of thirty (30) days or more, Owner may sell any or all such
property at public or private sale and shall apply the proceeds of such
sale first, to the cost of such sale; second, to the payment of the charges
for storage, if any; and third, to the payment of any other sums of money
which may be due from Tenant to Owner under the terms of this Lease, and
the balance, if any, to Tenant.
Tenant hereby waives all claims for damages that may be caused by Owner's
lawfully re-entering and taking possession of Premises or lawfully removing and
storing or selling the property of Tenant as herein
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provided, and will save Owner harmless from loss, costs, or damages
occasioned thereby, and such lawful re-entry shall not be considered or
construed to be a forcible entry.
15 SURRENDER OF POSSESSION
Upon expiration of the term of this Lease, whether by lapse of time or
otherwise, Tenant shall promptly and peacefully surrender Premises to
Owner.
16 COSTS AND ATTORNEYS' FEES
If Tenant or Owner shall bring any action for any relief against the other,
declaratory or otherwise, arising out of this Lease, including any suit by
Owner for the recovery of rent or possession of Premises, the losing party
shall pay the successful party a reasonable sum for attorneys' fees in such
suit, and such attorneys' fees shall be deemed to have accrued on the
commencement of such action.
17 NON-WAIVER
Waiver by Either Party of any breach of any term, covenant or condition
herein contained shall not be deemed to be a waiver of such term, covenant,
or condition, or of any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Owner 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 rental so accepted
regardless of Owner's knowledge of such preceding breach at the time of
acceptance of such rent.
18 ASSIGNMENT AND SUBLETTING
Tenant shall not assign this Lease or sublet Premises or any part thereof
without first obtaining Owner's written consent, which shall not be
unreasonably withheld. No such assignment or subletting shall relieve
Tenant of Tenant's liability under the Lease, except, if at the time of
such assignment or subletting, Tenant establishes to the reasonable
satisfaction of Owner that such assignee or sublessee is of satisfactory
financial responsibility at least equal to that of Tenant and the
Guarantors at the time Tenant executed the Lease. Consent to any such
assignment or subletting shall not operate as a waiver of the necessity for
a consent to any subsequent assignment, and the terms of such consent shall
be binding upon any person holding by, under or through Tenant. In no event
shall a sublessee of Tenant sublet or assign any interest in this Lease.
In the event of an assignment or subletting that requires Owner's time
and/or expense, Tenant shall reasonably compensate Owner for such expenses.
Notwithstanding anything to the contrary herein, Owner's consent shall not
be required for the following transfers:
a) An assignment, sublease or other transfer of Tenant's interest in the
Lease to any other entity with which Tenant is affiliated or under common
control, provided the Owner is notified not later than ten (10) days after
the effective date of such event;
b) An assignment or transfer of this Lease to any person or entity
acquiring by asset or stock transfer, consolidation, merger, liquidation,
spin-off or reorganization, all or substantially all of the assets of
Tenant; provided, that the assignee or transferee agrees to assume and
perform all obligations of Tenant under this Lease and that immediately
following such acquisition the assignee's or transferees net worth equals
the net worth of Tenant on the date immediately preceding such assignment
or transfer; and provided further that Owner is notified not later than ten
(10) days after the effective date of such event;
c) Any (i) public offering of the stock of Tenant pursuant to the
Securities Act of 1933 and/or the Securities Exchange Act of 1934 as
amended, or (ii) transfer of stock between shareholders of Tenant, or (iii)
sale of additional shares of
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stock to individuals or entities currently not shareholders of
Tenant; provided, that immediately following such offering,
transfer or sales the net worth of Tenant equals or exceeds the
net worth of Tenant on the date immediately preceding such
offering, transfer or sale or
d) the mortgage, pledge, hypothecation or encumbrance of any
of the stock of Tenant.
19 SUCCESSORS
All of the covenants, agreements, terms and conditions contained
in this Lease shall apply to and be binding upon Owner and Tenant
and their respective heirs, executors, administrators, successors
and assigns.
20 TAX ON RENTAL
If any governmental authority or unit under any present or future
law effective at any time during the term of this Lease shall in
any manner levy a tax on rentals payable under this Lease or on
rentals accruing from use of Premises under this Lease, or a tax
in any form against Owner because of or measured by income
derived from the leasing or rental of Premises, the amount of
the next succeeding month's rent following payment of such tax by
Owner shall be increased by an amount equal to such tax paid by
Owner, and for Tenant's default in paying the rent thus revised,
Owner shall have the same remedies as upon failure to pay rent.
Tenant shall not be liable to pay any amount because of income
tax of a general nature applicable to Owner's various interests
or sources of income. In the event that it shall not be lawful
for Tenant to pay such tax, the rental payable to Owner under
this Lease shall be revised to net Owner the same net rental
after imposition of any such tax as would have been payable to
Owner prior to the imposition of any such tax.
21 PRIORITY
This Lease shall automatically be subordinate to any mortgage or
deed of trust heretofore or hereafter placed upon Building, to
any and all advances made or to be made thereunder, to the
interest on the obligations secured thereby, and to all renewals,
replacements and extensions thereof; provided, however, that in
the event of foreclosure of any such mortgage or deed of trust or
exercise of the power of sale thereunder, Tenant shall attorn to
the purchaser of Building at such foreclosure or sale and
recognize such purchaser as Owner under this Lease if so
requested by such purchaser. If any mortgagee or beneficiary
elects to have this Lease superior to its mortgage or deed of
trust and gives notice of its election to Tenant, then this Lease
shall thereupon become superior to the lien of such mortgage or
deed of trust, whether this Lease is dated or recorded before or
after the mortgage or deed of trust. Within fifteen days of
presentation, Tenant shall execute, acknowledge, and deliver to
Owner (i) any reasonable subordination or nondisturbance
agreement or other instrument that Owner may require to carry out
the provisions of this article, and (ii) any reasonable estoppel
certificate requested by Owner from time to time in the standard
form of any such mortgagee or beneficiary certifying in writing,
if such be true, that Tenant shall be in occupancy, that this
Lease is unmodified and in full force and effect (or if there
have been modifications, that the same is in full force and
effect as modified and stating the modifications) and the dates
to which the rent and other charges shall have been paid, and
that there shall be no rental offsets or claims.
22 CONDEMNATION
If the whole of Premises, or if such portion of either Premises
or the facilities in Building as may be required for the
reasonable use of Premises, shall be taken by virtue of any
condemnation or notice of condemnation or eminent domain
proceeding, or by purchase in lieu thereof, or for public or
quasipublic use, directly or indirectly, this Lease shall
automatically terminate as of the date of such condemnation, or
purchase in lieu of condemnation, or as of the date possession is
taken by the condemning authority, whichever is earlier. Current
rent shall be apportioned as of the date of such termination. In
case of a taking of a part of Premises or a portion of the
facilities in Building not required for the reasonable use of
Premises, then this Lease shall continue in full force and effect
and the rental shall be equitably reduced based on the proportion
by which the rentable area of Premises is reduced, such rent
reduction to be effective on the date of such partial taking. No
award of any partial or entire taking shall be apportioned, and
Tenant hereby assigns to Owner any award which may be made in
such taking or condemnation together with any and all rights of
Tenant now or hereafter arising in or to the same or any part
thereof, provided, however, that nothing herein shall be deemed
to give Owner any interest in, or to require Tenant to assign to
Owner, any award made to Tenant for the taking of personal
property or fixtures belonging to Tenant, for the interruption of
or damage to Tenant's business or for Tenant's moving expenses.
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23 SPECIAL IMPROVEMENTS
The term "Special Improvements" as used in this Lease refers to all
improvements to Premises, whether provided at the expense of Owner or
Tenant, other than accoustical ceilings, lighting fixtures, air
conditioning grilles, air ducts and temperature controls, draperies,
corridor and demising partitions, and concrete floor ready for pad and
carpet. Tenant shall reimburse Owner for Owner's necessary expense of
repairing or replacing all Special Improvements to maintain Special
Improvements in first-class condition. Tenant shall pay Owner that certain
sum as set forth in Article 1(f) as payment for certain of Special
Improvements made to Premises. In addition, Tenant shall pay Owner for
installation of any additional Special Improvements if they have been
installed by Owner pursuant to Tenant's request. Where Special
Improvements are to be installed by Owner, Tenant shall give Owner written
notice of its final color selection and all other details of its office
layout in sufficient time to permit Owner's completion of all work by the
commencement date hereunder using its normal crews on a regular time
basis, and such notice shall in any event be given not later than fifteen
working days before such commencement date.
24 REAL PROPERTY TAXES
Owner shall pay all real property taxes and assessments that may be levied
against Building and the underlying land. If the amount of such real
property taxes and assessments shall, in any calendar year during the
Lease Term, exceed the amount of real property taxes and assessments
payable for the calendar year 1996, then on the tax payment dates in 1997
and on these dates of each succeeding year, Tenant shall reimburse Owner
for Tenant's proportionate share of such increase based upon the ratio
which area of Premises, as set forth in Article 1(b), bears to 350,000
square feet. Owner shall submit to Tenant, if so requested by Tenant, a
copy of the real property tax statement for the year in which payment is
requested. The foregoing charges constitute additional rent that shall be
deemed to have accrued uniformly during the calendar year in which payment
is due. The final payment under the provision of this Article shall be
prorated based on reasonable projections of the increase through the
termination of this Lease and shall be due thirty days before such
termination.
25 ANNUAL RENT ADJUSTMENT
To partially compensate for the effect of inflation, a portion of the
rental rate (viz. $7.50 per square foot per year) shall be adjusted to
reflect reductions, if any, in the purchasing power of the dollar. Three
separate generic elements of cost (namely: labor, materials and energy)
shall be deemed to be representative of all operational costs. Indices for
measuring changes in the dollar value for each of these cost elements
shall be: janitorial hourly labor rate, Consumer Price Index, and the
average cost per kilowatt-hour of electricity (including without
limitation all demand charges), respectively. Changes in each of these
shall adjust rent as provided below:
Generic Element's Cost
Element of Cost Index Share
--------------- ----- --------------
1. Labor Janitorial rate $3.00
2. Material C.P.I. $3.00
3. Energy Average kwh cost $1.50
The base index for each of these indices shall be established from data
for the month of September of the year preceding the year in which this
Lease commences. Indices for each succeeding year shall be calculated
annually using September experience data, and the ratio that these annual
indices bear to their respective base index shall be reduced by 1.00 then
multiplied by the individual element's cost share as specified in Items 1,
2 and 3 above, and by the area of Premises as set forth in Article 1(b).
Each January 1, following the calendar year in which the Lease becomes
effective, the Monthly Rent in Article 1(d) shall be increased by
one-twelfth (1/12) of the sum of the amounts so determined. No changes in
the rent as specified above shall take place during the calendar year in
which the Lease Term commences.
The janitorial hourly labor rate shall be that as established by the Hotel
Employees Restaurant Employees, Union Local No. 8 for journeymen janitors
including all applicable taxes and fringe benefits payable by employers.
The labor rate to be used as a base index for this Lease shall be $12.72.
The Consumer Price Index to be used shall be the Revised Consumer Price
Index for Urban Wage Earners and Clerical Workers, U.S. City Average,
All-Items Series (1982-1984 = 100), as published by the U.S. Department of
Labor, Bureau of Statistics. If this index is revised or changed (as, for
example, by taking the average index for different years as the base
figure of 100), the base index shall be adjusted accordingly. In the event
such index is discontinued, the index promulgated by the Department of
Labor most closely
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approximating the above referenced index shall be used as the base index.
The Consumer Price Index to be used as the base index for this Lease shall
be 150.6.
The cost per kilowatt-hour of electricity consumed in the Westin Building
(including seasonal factors and any tax or surcharge that may be imposed),
shall be determined by dividing the total amount billed to Account No.
171001453015 for the supply of electricity consumed primarily during the
month of September by the consumption shown in the billing column entitled
"Consumption kwh/kvarh." The cost to be used as a base index for this
Lease shall be $.036 per kilowatt-hour.
26 NOTICES
All notices under this Lease shall be in writing and delivered in person
or sent by registered or certified mail to Owner at its offices in
Building and to Tenant at Premises, or to such other place as may be set
forth in Article 1(h) or hereafter designated by either party in writing.
27 NAME OF BUILDING
Owner reserves the right in its sole discretion to change the name of
Building from that specified in Article 3.
28 CONSTRUCTION
The titles to articles of this Lease are not a part of this Lease and
shall have no effect upon the construction or interpretation of any part
thereof. This Lease shall be construed and governed by the law of the
State of Washington.
29 TIME OF ESSENCE
Time is of the essence of this Lease.
30 FORCE MAJEUR
In the event either Owner or Tenant shall be delayed or hindered in or
prevented from the performance of any act required hereunder by reason of
strikes, lockouts, labor troubles, inability to procure materials, failure
of power, restrictive governmental laws or regulations, riots,
insurrection, war or any reason of a like nature, not the fault of the
party delayed in performing work or doing acts required under the terms of
this Lease, then performance of such act shall be excused for the period
of such delay, provided that the provisions hereof shall not operate to
excuse Tenant from prompt payment of rent or any other payments required
by Tenant hereunder.
IN WITNESS WHEREOF, Owner and Tenant have signed this Lease on the dates noted
below.
OWNER: TENANT:
SIXTH & VIRGINIA PROPERTIES InterNAP Network Services L.L.C.
A Washington General Partnership A Washington Limited Liability
By Xxxxx Properties, Inc., a Partner Corporation
By /s/ A. M. XXXXX By /s/ XXXXXXX X. XXXXXXXX
---------------------------------- ----------------------------------
Its President Its President/CEO
-------------------------------- ----------------------------------
Date 6-10-96 Date 6-6-96
-------------------------------- --------------------------------
By Xxxxx Company, a Partner
By Retail Realty, Inc.
By /s/ A. M. XXXXX
----------------------------------
Its President
--------------------------------
Date 6-10-96
--------------------------------
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GUARANTEE
For and in consideration of execution of this Lease, Big Xxxxx
Telecommunications, Inc., as the primary guarantor of first recourse in the
event that Tenant defaults on any of its obligations under this Lease,
guarantees the performance of all obligations of Tenant and Tenant's Successors
as said obligations exist under all terms and conditions of this Lease and any
modifications thereto. In further consideration of execution of this Lease,
Xxxxxxx Xxxxxxxx and Xxxx XxXxxxx, as Corporate Officers of Tenant shall be
secondary guarantors of next recourse in the event that Tenant defaults on any
of its obligations under this Lease, and the primary guarantor is unable to
guarantee performance of such obligations on behalf of the Tenant. The
obligations of Xxxxxxx Xxxxxxxx and Xxxx XxXxxxx as secondary guarantors shall
cease after Tenant completes reimbursement to Owner of Owner's tenant
improvement outlay on the 1st day of the third year of the term of this Lease.
Big Xxxxx Telecommunications, Inc.'s obligation may be modified or removed as
part of an assignment transaction that Owner must consent to under this Lease.
/s/ XXXXXX X. XXXXXX, XX., President
-------------------------------------
Big Xxxxx Telecommunications, Inc.,
/s/ XXXX XXXXXXX
-------------------------------------
Xxxx XxXxxxx
/s/ XXXXXXX XXXXXXXX
-------------------------------------
Xxxxxxx Xxxxxxxx
State of Washington )
County of King )
I certify that I know or have satisfactory evidence that A. M. Xxxxx 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 President of XXXXX PROPERTIES, INC., a partner of SIXTH
& VIRGINIA PROPERTIES, a Washington general partnership, to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated 6/10/96
/s/ XXXXXXXX X. XXXXXXXX
------------------------------------------------
Notary Public in and for the State of Washington
My appointment expires 2-7-99
Xxxxxxxx X. Xxxxxxxx
State of Washington )
County of King )
I certify that I know or have satisfactory evidence that A. M. Xxxxx 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 President of RETAIL REALTY, INC., a partner of XXXXX
COMPANY, a partnership, for and on behalf of XXXXX COMPANY, which in turn is a
partner of SIXTH & VIRGINIA PROPERTIES, a Washington general partnership, to be
the free and voluntary act of such party for the uses and purposes mentioned in
the instrument.
Dated 6/10/96
/s/ XXXXXXXX X. XXXXXXXX
------------------------------------------------
Notary Public in and for the State of Washington
My appointment expires 2-7-99
Xxxxxxxx X. Xxxxxxxx
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EXHIBIT A
[Floor Plan]
14
EXHIBIT B
[Site Plan]
15
EXHIBIT C
[Floor Plan]
16
RENT ANALYSIS AND PROPOSAL
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Statistics
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USF 5,117 Total base rent $ 654,275 Total TI's $ 137,774.83
RSF 5,054 Ave. annual rent $ 130,855 T TI's per RSF $ 23.54
Lease terms (yrs) 5 Ave. monthly rent $ 10,905 Amort per year $ 27,554.97
Ave. rent per RSF $ 20.00 Acceleration rate 0.00% Amort per RSF $ 4.71
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--------------------------------------------------------------------------------------------------
Description Cost Sixth & Virginia InterNAP
--------------------------------------------------------------------------------------------------
Demo $ 2,800.00 $ 2,800.00
--------------------------------------------------------------------------------------------------
Construction/permit fees $ 650.00 650.00
--------------------------------------------------------------------------------------------------
Doors/hardware $ 3,000.00 $ 3,000.00
--------------------------------------------------------------------------------------------------
Cabinets/shelving $ 1,800.00 $ 1,800.00
--------------------------------------------------------------------------------------------------
Refiles $ 5,740.00 $ 5,740.00
--------------------------------------------------------------------------------------------------
Partitions $ 9,976.00 $ 9,976.00
--------------------------------------------------------------------------------------------------
Ceiling $ 4,068.00 $ 4,068.00
--------------------------------------------------------------------------------------------------
Carpet $ 6,800.00 $ 6,800.00
--------------------------------------------------------------------------------------------------
Painting $ 2,800.00 $ 2,800.00
--------------------------------------------------------------------------------------------------
Draperies $ 2,500.00 $ 2,500.00
--------------------------------------------------------------------------------------------------
Sprinklers $ 3,000.00 $ 3,000.00
--------------------------------------------------------------------------------------------------
HVAC - Office $ 14,250.00 $ 3,315.50 $ 10,934.50
--------------------------------------------------------------------------------------------------
HVAC - Computer room $ 30,465.00 $ 30,465.00
--------------------------------------------------------------------------------------------------
Electrical $ 12,250.00 $ 4,950.00 $ 7,300.00
--------------------------------------------------------------------------------------------------
Signage $ 150.00 $ 150.00
--------------------------------------------------------------------------------------------------
Access floor ramp $ 1,500.00 $ 1,500.00
--------------------------------------------------------------------------------------------------
Cleanup $ 1,050.00 $ 1,050.00
--------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------- InterNAP [PIE CHART] Sixth &
Subtotal $ 102,799.00 $ 51,399.50 $ 51,399.50 50% Virginia
-------------------------------------------------------------------------------------------------- 50%
W/17% $ 17,475.83 $ 17,475.83
--------------------------------------------------------------------------------------------------
AC Backup $ 12,500.00
--------------------------------------------------------------------------------------------------
Misc. Electrical $ 5,000.00
--------------------------------------------------------------------------------------------------
TOTAL $ 120,274.83 $ 66,875.33 $ 68,899.50
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Cost per RSF $ 20.55 $ 11.77 $ 11.77
--------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 5-Year Total
------------------------------------------------------------------------------------------------------------------------------------
Base $ 20.00 $ 20.00 $ 20.00 $ 20.00 $ 20.00 $ 100.00
TI's $ 2.35 $ 2.35 $ 2.35 $ 2.35 $ 2.35 $ 11.77
Total $ 22.35 $ 22.35 $ 22.35 $ 22.35 $ 22.35 $ 111.77
Net Increase $ -- $ -- $ -- $ -- $ --
RSF 5,854 5,854 5,854 5,854 5,854
Annual Rent 130,855 $ 130,855 $ 130,855 $ 130,855 $ 130,855 $ 654,275.33
Monthly Rent $ 10,905 $ 10,905 $ 10,905 $ 10,905 $ 10,905
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 5-Year Total
------------------------------------------------------------------------------------------------------------------------------------
Base $ 18.00 $ 19.00 $ 20.00 $ 21.00 $ 22.00 $ 100.00
TI's $ --
Total $ 18.00 $ 19.00 $ 20.00 $ 21.00 $ 22.00 $ 100.00
Net Increase $ -- $ 1.00 $ 1.00 $ 1.00 $ 1.00
RSF 5,854 5,854 5,854 5,854 5,854
Annual TI
Payment* $ 41,325 $ 37,881
Annual Rent $ 105,372 $ 152,551 $ 154,961 $ 122,934 $ 128,788 $ 654,606.63
Monthly Rent $ 8,781 $ 9,269 $ 9,757 $ 10,245 $ 10,732
------------------------------------------------------------------------------------------------------------------------------------
*Lump sum payment at beginning of lease year. TI allowance accrues interest at
10% per year.
Exhibit C 1
