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EXHIBIT 10.11
REDMOND EAST BUSINESS CAMPUS
LEASE
THIS LEASE, dated as of the 20th day of May, 1991, is between XXXXXXX X.
XXXXXX, a married man as to his separate estate, and REDMOND EAST ASSOCIATES, a
Washington general partnership (together "Lessor") and DIGITAL SYSTEMS
INTERNATIONAL, INC., a Washington corporation, ("Lessee").
R E C I T A L S
Lessor holds an enforceable right to purchase certain real property
legally described on Exhibit A attached. Lessor intends to construct an office
building known as Building 17 ("Building") on a portion of said real property
with approximately 165,125 square feet of land area. The location of the
Building and the general configuration of such portion of the real property
(such portion being referred to herein as the "Property") shall be as indicated
on the site plan attached as Exhibit B. The Building shall contain approximately
83,000 square feet. Lessee wishes to lease the Property and the Building (herein
"Premises") from Lessor on the terms and conditions set out below.
A G R E E M E N T
1. Premises. Lessor hereby leases the Premises to Lessee, upon the terms
and conditions herein set forth. Upon commencement of the Lease Term, the
parties shall sign a statement confirming the total square footage of the
Premises as shown on the architect's plan.
2. Common Areas. Lessee shall have nonexclusive use of all areas of the
Property designated by Lessor as common areas for the use generally of tenants
of the Property.
3. Use of Premises. The Premises shall be used for corporate
headquarters, general office uses, manufacturing, assembly, and production of
computer equipment and products developed by Lessee, and uses incidental thereto
and for no other purpose without the prior consent of Lessor. Lessee shall not
allow undue noise or vibration. Lessee shall not allow use of the Premises in a
manner which would increase Lessor's insurance premiums, in a manner which would
interfere with any other tenant in the Property, or for any illegal purpose.
Lessee shall comply with all governmental rules, orders , regulations, or
requirements relating to the use and occupancy of the Premises. Lessee shall not
use, store or dispose of any hazardous or toxic waste or materials on the
Premises or the Property at any time except in accordance with all applicable
laws, rules, regulations, and ordinances.
4. Term. This Lease shall be for a term of seven (7) years, commencing
on the Commencement Date as set out in Section 40 below. In the event that the
lease term commences on a day other than the first day of a calendar month, then
the lease term as specified in the preceding sentence shall be deemed to have
commenced as of the first day of the next calendar month, and the Tenant shall
be deemed to have been given early occupancy as of the date specified in the
preceding sentence, with all terms of the Lease, including rent, and other
amounts due to Lessor, which shall be prorated on an actual per diem basis,
applicable to the period of early occupancy.
5. Rental. Lessee agrees to pay Lessor, at Lessor's address set forth in
Section 27 hereof or at such other place as Lessor may designate in writing,
monthly rent ("Basic Rental") in accordance with Section 41 below.
Upon execution of this Lease, Lessee shall pay to Lessor the sum of
$53,400 to be applied against payment of the Basic Rental due for the first
month of the Lease term. The obligation of Lessee to pay Basic Rental and
Additional Rental is absolute and unconditional, and shall not at any time be
subject to offset, discount, or reduction of any kind whatsoever.
6. Additional Rental. This is a "triple-net" lease. In addition to the
Basic Rental provided in Section 5 above and subject to the provisions of
Section 42 of this Lease, Lessee agrees to pay Lessor "Additional Rental" during
each Lease Year equal to the "Operating Expenses" of the Premises.
The term "Operating Expenses" means all costs of ownership, management,
operation, and maintenance of the Premises, including, without limitation, the
following: wages and salaries of employees; janitorial, cleaning, landscaping,
guard and other services; gas, electricity, water, sewer, waste disposal, and
other utilities; heating, ventilation and air-conditioning; window-washing;
materials and supplies; painting, repairs, and other maintenance; parking lot
resurfacing and restriping; maintenance, repair and service agreements of any
kind, including without limitation those for the HVAC system, alarm systems,
elevator equipment, and other equipment; reserves for any common area
improvements; costs of independent contractors; management fees; insurance;
depreciation on personal property; and any other expense or charge which in
accordance with generally accepted accounting and management principles would be
considered a cost of ownership, management, operation, and maintenance of the
Premises, subject, however, to the limitations in paragraph 42 hereof. The
determination of Operating Expenses shall be made by Lessor.
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Prior to commencement of each Lease Year, or as soon thereafter as
practicable, Lessor shall give Lessee notice of its estimate of amounts payable
under this section for the ensuing Lease Year. On the first day of each month
during the ensuing Lease Year, Lessee shall pay to Lessor 1/12th of such
estimated amounts, provided, that if such notice is not given prior to the
commencement of such ensuing Lease Year, Lessee shall continue to pay on the
basis of the prior Lease Year's estimate until the month after such notice is
given. If at any time or times it appears to Lessor that the amounts payable
under this section for the current Lease Year will vary from its estimate,
Lessor may, by thirty (30) days prior written notice to Lessee, revise its
estimate for such Lease Year, and subsequent payments by Lessee for such Lease
Year shall be based upon such revised estimate.
"Lease Year" shall mean calendar year. If this Lease commences or
terminates on a day other than the first or last day of a calendar year, the
amount of additional rental payable by Lessee applicable to the Lease Year in
which such commencement or termination occurs shall be prorated on the basis of
a 365-day year.
7. [intentionally deleted]
8. [intentionally deleted]
9. Quiet Enjoyment. Lessor covenants and agrees that so long as Lessee
remains in full compliance with all of Lessee's obligations under this Lease,
Lessee shall lawfully and quietly hold, occupy, and enjoy the Premises during
the term of this Lease, subject to the other terms and provisions of this Lease
and subject to all mortgages, underlying leases, and other underlying matters of
record to which this Lease is or may become subject and subordinate.
10. Construction; Acceptance of Premises.
[replaced by Section 43]
11. Utilities and Other Services by Lessor. Lessor agrees that there
will be available at the Premises the following utilities and services:
(a) Electricity.
(b) Water for drinking, restroom and office cleaning purposes.
(c) Heating, air conditioning, and ventilation required for Lessee's
normal business operations.
(d) Gas.
All such utilities and services shall be paid for by Lessee by separate
metering. Lessor does not warrant the adequacy of such utilities for Lessee's
needs or that any of the foregoing utilities and services will be free from
interruption. Interruption of utilities or services shall not be deemed an
eviction or excuse performance of any of Lessee's obligations under this Lease
or render Lessor liable for damages unless caused by the gross negligence or
willful misconduct of Lessor, its agents, employees, invitees, licensees, or
contractors. Lessee agrees to pay for all utility service provided to the
Premises when due. Lessee shall, at Lessee's expense, provide all other
utilities and other services to the Premises required by Lessee, and shall pay
for the same when due.
12. Maintenance by Lessor. Lessor shall maintain in good condition
(normal wear and tear excepted) the structural and exterior components of the
Building including, without limitation, the foundations, bearing and exterior
walls, subflooring, roof, unexposed electrical, plumbing and sewage systems,
heating, ventilating, and air conditioning systems. Lessor shall maintain in
good condition and repair the plumbing and the electrical system. However,
Lessor shall not be obligated to repair or replace any fixtures or equipment
installed by Lessee and Lessor shall not be obligated to make any repair or
replacement occasioned by any act or omission of Lessee, its employees, agents,
invitees, or licensees. Lessor shall maintain the Building in first class
condition.
Upon written notice given by Lessee of the need for repairs for which
Lessor is responsible hereunder, Lessor shall promptly repair the Premises in a
good, workmanlike manner. Lessor shall have thirty (30) days after notice from
Lessee to commence to perform its obligations under this paragraph, except that
Lessor shall perform its obligations as promptly as reasonably possible if the
nature of the problem presents a hazard or emergency. If Lessor fails to perform
its obligations within the time limits herein provided, Lessee may perform the
obligations and Lessee shall have the right to be reimbursed by Lessor for the
sum Lessee actually expends in the performance thereof.
13. Alterations, Repairs, and Maintenance by Lessee. After the
Commencement Date, Lessee shall make no changes, improvements, or alterations to
the Premises costing more than $25,000 without the prior consent of Lessor which
shall not be unreasonably withheld, conditioned, or delayed for nonstructural
alterations or for structural alterations which do not impair the structural
integrity of the Building. Such consent shall be deemed to have been given if
not denied in writing within ten (10) business days of Lessee's request therefor
which request shall be in writing and shall describe the proposed alterations in
reasonable detail. All such changes, improvements, and alterations and repairs,
if any, made by Lessee (other than to Lessee's trade fixtures)
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shall remain on the Premises and shall become the property of Lessor upon the
expiration or sooner termination of this Lease.
Lessee shall keep the Premises in a neat, clean, and sanitary condition,
and shall keep the Premises and all items therein installed by Lessee in good
condition, except only for reasonable wear and tear. Lessee shall provide, at
its sole expense, janitorial services for the Premises. All maintenance of the
Premises shall be conducted by Lessee, except as provided in Section 12.
14. Taxes. Subject to Sections 6 and 42, Lessor shall pay, before the
same become delinquent, all taxes and special assessments levied against the
Property. Lessee shall pay, before the same become delinquent, all taxes
assessed against Lessee's furniture, fixtures, equipment, and other property in
the Premises.
Lessee shall pay to Lessor as additional rental, within 10 days after
notice of the amount thereof, any tax upon rent payable under this Lease or any
tax or fee in any form payable by Lessor because of or measured by receipts or
income of Lessor derived from this Lease. The preceding sentence shall not apply
to general income tax or business and occupation tax of Lessor, except to the
extent a rental receipt tax is imposed as a business and occupation tax.
15. Signs. Lessee will not cause or permit the display of any sign,
notice, or advertising matter in or about the Premises or the Property without
Lessor's prior written consent which will not be unreasonably withheld, delayed,
or conditioned.
16. Lessor's Access to Premises. Lessor may inspect the Premises at all
reasonable times after reasonable prior notice to Lessee (except in the case of
emergency) and enter the same for the purpose of cleaning, repairing, altering,
improving, or during the last three (3) months of the Lease term, exhibiting the
same, but nothing herein shall be construed as imposing any obligation on Lessor
to perform any such work except as is set forth in Section 12 hereof. Lessor
shall repair any damage to the Premises or Lessee's property therein or thereon
which is caused by such entry. Lessor shall conduct its activities on the
Premises in a manner which causes the least inconvenience reasonably possible to
Lessee.
17. Liability Insurance. Commencing on the Commencement Date, Lessee
shall, at Lessee's sole expense, maintain public liability and property damage
insurance insuring against any and all claims for injury to or death of persons
and loss of or damage to property occurring upon, in, or outside of the
Premises. Such insurance shall have liability limits of not less than $1,000,000
in respect of injury or death to any one person, not less than $1,000,000 in
respect of any and one occurrence or accident, and not less than $500,000 for
property damage with a maximum deductible amount of $2,500. All such insurance
shall name Lessor and Lessee as co-insureds, with severability of interests
endorsement. All such insurance shall be issued by carriers acceptable to Lessor
and shall contain provision whereby the carrier agrees not to cancel or modify
the insurance without thirty (30) days' prior written notice to Lessor.
On or before taking possession of the Premises pursuant to this Lease,
Lessee shall furnish Lessor with a certificate evidencing the aforesaid
insurance coverage, and renewal certificates shall be furnished to Lessor at
least 30 days prior to the expiration date of each policy for which a
certificate was theretofore furnished.
18. Lessee's Fire Insurance. Lessee shall, at Lessee's sole expense,
maintain on all of Lessee's personal property and leasehold improvements and
alterations on the Premises, a policy of standard fire insurance, with extended
coverage, in the amount of their replacement value. Such insurance shall name
Lessor and Lessee as co-insureds. All proceeds of any such insurance shall be
applied to the restoration of fixtures, improvements, and alterations to the
extent provided in Sections 21 and 45. Any proceeds of such insurance remaining
after such restoration shall belong to Lessee.
19. Lessor's Fire Insurance. Subject to Section 6, Lessor shall maintain
on the Building a policy of standard fire insurance with extended coverage in an
amount of its replacement value. All proceeds of any such insurance shall be
payable to Lessor and shall be applied to the restoration of the Building to the
extent provided in Sections 21 and 45. Any proceeds of such insurance remaining
after such restoration shall belong to Lessor.
20. Assignment and Subletting. Subject to Section 60, neither this Lease
nor any right hereunder may be assigned, transferred, encumbered, or sublet in
whole or in part by Lessee, by operation of law or otherwise, without Lessor's
prior consent, which shall not be unreasonably withheld, delayed, or
conditioned. No assignment or sublease shall relieve Lessee of its liabilities
hereunder and no consent to any assignment or sublease shall be deemed a consent
to any further assignment or sublease. Except as provided in Section 60, if
Lessee is a corporation, any merger, consolidation, liquidation, or any change
in ownership of or the power to vote the majority of its outstanding voting
stock, shall constitute an assignment, whether the result of a single
transaction or a series of transactions. Lessor may assign its interest in this
Lease.
21. Damage or Destruction. Subject to Section 45, if the Premises are
damaged or destroyed by fire or any other cause, Lessor shall restore the
Premises (except for tenant improvements, trade fixtures, and personal property
which shall be restored by Lessee at Lessee's sole expense) as nearly as
practicable to their condition immediately prior to such damage or destruction.
The obligations to restore provided in this paragraph shall be subject to
Lessor's termination rights provided below and shall be subject to any
institutional lender
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which holds a mortgage or deed of trust against the Property and Building making
insurance proceeds available for restoration provided that Lessor shall have
used its reasonable best efforts to obtain the agreement of such lender to make
the proceeds available for restoration. Any restoration shall be promptly
commenced and diligently prosecuted. Lessor shall not be liable for any
consequential damages by reason of any such damage or destruction.
Notwithstanding any of the foregoing provisions of this section, in the
event the Premises shall be destroyed or damaged to the extent of thirty percent
(30%) of their insurable value and Lessor deems that it is not economically
feasible to restore the same, then Lessor may terminate this Lease as of the
date of the damage or destruction by giving Lessee written notice to that effect
within thirty (30) days after the date of such damage or destruction.
If Lessor undertakes to restore the Premises as provided above in this
section, then commencing with the date of the damage or destruction and
continuing through the period of restoration, the rent for the Premises shall be
abated for such period in the same proportion as the untenantable portion of the
Premises bears to the whole thereof.
22. Liens. Lessee shall not suffer or permit any lien to be filed
against the Property or any part thereof or the Lessee's leasehold interest, by
reason of work, labor, services, or materials performed or supplied to Lessee or
anyone holding the Premises or any part thereof under Lessee. Subject to Section
46, if any such lien is filed against the Property or Lessee's leasehold
interest, Lessee shall cause the same to be discharged of record within 30 days
after the date of filing the same.
23. Indemnity by Lessee. Lessee agrees that Lessor shall not be liable
for any claims for death of or injury to persons or damages to or destruction of
property sustained by Lessee or by any other person in or outside of the
Premises, including without limiting the generality of the foregoing, any claims
caused by or arising from the condition or maintenance of any part of the
Premises, unless such damage is caused by the negligence or intentional
misconduct of Lessor or the breach of this Lease by Lessor. Lessee hereby waives
all claims therefor and agrees to indemnify Lessor against any such loss,
damage, or liability or any expense (including attorneys' fees) incurred by
Lessor in connection therewith.
24. Default; Remedies; Late Charges. The occurrence of any one or more
of the following events shall be a default under this Lease, namely: If Lessee
shall fail to pay rent or any other charge within five (5) business days after
written notice from Lessor, or if Lessee shall fail to perform any other
obligations under this Lease within thirty (30) days after written notice from
Lessor (or if such performance cannot reasonably be completed within thirty (30)
days, within a reasonable period of time provided Lessee is diligently pursuing
performance to completion); or if Lessee shall make an assignment for the
benefit of creditors or shall file a voluntary petition under any bankruptcy act
or under any other law for the relief of debtors' or if an involuntary petition
is filed against Lessee under any such law and is not dismissed within sixty
(60) days after filing; or if a receiver be appointed for the property of Lessee
and is not discharged or removed within sixty (60) days; or if any department of
any government or any officer thereof shall take possession of the business or
property of Lessee; or if the Lessee is adjudicated a bankrupt. Upon any such
occurrence Lessor, at its option, may terminate this Lease by notice to Lessee
and upon such termination Lessee shall quit and surrender the Premises to
Lessor, but Lessee shall remain liable as hereinafter provided.
If this Lease shall be terminated as herein provided, Lessor may
immediately or at any time thereafter re-enter the Premises and remove any and
all persons and property therefrom, by any suitable proceeding at law or
otherwise, without liability therefor, and re-enter the Premises, without such
re-entry diminishing Lessee's obligation to pay rental for the full term hereof,
and Lessee agrees to pay Lessor any deficiency arising from re-entry and
reletting of the Premises at a lesser rental than provided herein. Lessor shall
apply the proceeds of any reletting in the following order:
(a) First, to the payment of such reasonable expenses as Lessor
may have incurred in recovering possession of the Premises, including without
limitation, removing persons and property therefrom, and in putting the same
into good order or condition;
(b) Second, to all reasonable expenses incurred by Lessor for
reletting the Premises, including without limitation, preparing and/or altering
the same for reletting; and
(c) Then to Lessee's obligation to pay rental. Any such reletting
may be for the remainder of the term of this Lease or for a longer or shorter
period. In any such case, and whether or not the Premises or any part thereof be
relet, Lessee shall pay to Lessor the rent and all other charges required to be
paid by Lessee up to the time of such termination of this Lease, and thereafter,
Lessee agrees to pay the equivalent of the amount of all rent reserved herein
and all other charges required to be paid by Lessee, less the net proceeds of
reletting, if any, and the same shall be due and payable by Lessee monthly as
the amount thereof is ascertained by Lessor, and Lessor may bring an action
therefor as such monthly deficiencies arise. In any of the circumstances
hereinabove mentioned, Lessor shall have the option, instead of holding Lessee
liable for the amount of all rent and all other charges required to be paid by
lessee less the net proceeds of reletting, if any, forthwith to recover from
Lessee an aggregate sum representing, at the time of such termination of this
Lease, the then present worth of the excess, if
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any, of the aggregate of the rent and all other charges payable by Lessee
hereunder that would have accrued until the end of the Lease term over the
aggregate rental value of the Premises during such term.
In the event Lessee fails to pay any Basic Rental, Additional Rental, or
other payment or reimbursement due to Lessor within ten (10) days of the date
when due, the amount so delinquent shall bear interest at the rate of fifteen
percent (15%) per annum from the due date until paid. In addition, Lessee shall
pay to Lessor a late charge equal to five percent (5%) of the amount so
delinquent, which late charge shall be liquidated damages (and not a penalty) to
compensate Lessor for the costs of handling such delinquency, the parties
agreeing that actual damages would be inconvenient, uncertain, and difficult to
ascertain. Such interest and late charges shall be deemed Additional Rental and
shall be due upon demand.
25. Trade Fixtures. Lessee may install on the Premises such equipment as
is customarily used in the type of business conducted by Lessee on the Premises.
Upon the expiration or sooner termination of this Lease, Lessee shall, at
Lessee's expense, remove from the Premises all such equipment and all other
property of Lessee and repair any damage to the Premises occasioned by the
removal thereof. Any property left in the Premises after the expiration or
sooner termination of this Lease shall be deemed to have been abandoned by
Lessee and become the property of Lessor to dispose of as Lessor deems expedient
without accounting to Lessee therefor.
26. Condemnation. If all of the Building or Property are taken by any
public authority under the power of eminent domain, this Lease shall terminate
as of the date possession is taken by said public authority pursuant to such
condemnation.
If any part of the Building or Property is so taken and, in the opinion
of either Lessor or Lessee, it is not economically feasible to continue this
Lease in effect, either party may terminate this Lease. Such termination by
either party shall be made by written notice to the other given not later than
30 days after possession is so taken, the termination to be effective as of the
later of 30 days after said notice or the date possession is so taken.
If part of the Premises or part of the Property is so taken, and neither
Lessor nor Lessee elects to terminate this Lease, or until termination is
effective, as the case may be, the rental shall be abated in the same proportion
as the portion of the Premises so taken bears to the whole of the Premises, and
Lessor shall make such repairs or alterations, if any, as are required to render
the remainder of the Premises tenantable.
All damages awarded for the taking or damaging of all or any part of the
Property or the Premises shall belong to and be the property of Lessor, and
Lessee hereby assigns to Lessor any and all claims to such award, but nothing
herein contained shall be construed as precluding Lessee from asserting any
claim Lessee may have against such public authority for disruption or relocation
of Lessee's business on the Premises or for damages to Lessee's property in the
Premises.
27. Notices. All notices, demands, and requests to be given by either
party to the other shall be in writing. All notices, demands, and requests by
Lessor to Lessee shall be personally delivered or sent by United States
registered or certified mail, postage prepaid, (or by private overnight courier)
addressed to Lessee at the Premises after the Commencement Date and at Redmond
Science Park, 0000 - 000xx Xxxxx X.X., Xxxxxxx, Xxxxxxxxxx 00000, Attn: Vice
President - Finance and Administration, prior to the Commencement Date or to
such other place as Lessee may from time to time designate by written notice to
Lessor. All notices, demands, and requests by Lessee to the Lessor shall be
personally delivered or sent by United States registered or certified mail,
postage prepaid, (or by private overnight courier) addressed to Lessor at: 00000
X.X. Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxx 00000, or such other place
as Lessor may from time to time designate by notice to Lessee. Notices, demands,
and requests served upon Lessor or Lessee as provided in this section in the
manner aforesaid shall be deemed sufficiently served or given for all purposes
hereunder upon personal delivery or one (1) business day after such notice,
demand, or request shall be so deposited with private courier or three (3)
business days after mailed.
28. Performance of Covenants. If Lessee shall fail to make any payment
or perform any of Lessee's obligations under this Lease, Lessor may, without
notice to or demand upon Lessee and without waiving or releasing Lessee from any
obligations of Lessee under this Lease, make any such payment or perform any
such obligation on Lessee's behalf in such manner and to such extent as Lessor
deems desirable. All sums so paid by Lessor and all necessary costs and expenses
in connection with the performance of any such obligation by Lessor, together
with interest thereon at the rate of fifteen (15%) per annum from the date of
the making of such expenditure by Lessor, shall be deemed Additional Rental
hereunder and shall be payable to Lessor on demand.
29. For Rent Signs; Showing Premises. During the last six (6) months of
the Lease term or any Renewal Term, Lessor may place for rent or for sale signs
on the exterior of the Premises and may enter the Premises for the purpose of
showing the Premises or the Property to prospective tenants, purchasers, and
lenders.
30. Waiver of Subrogation. Lessor and Lessee shall each procure, if
obtainable without payment of an additional premium, an appropriate clause in,
or an endorsement on, any policy of fire or extended coverage insurance covering
the Premises and the Property, and the personal property, fixtures, and
equipment located in or on the Premises, pursuant to which the insurance
companies waive subrogation or consent to a waiver of right of recovery, and,
conditioned upon a party having obtained such clauses or endorsements or waiver
of subrogation or consent to a waiver or right of recovery, such party hereby
agrees that it shall not make any claim
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against or seek to recover from the other for any loss or damage to its
property, or the property of the other, resulting from fire or other hazards
covered by such insurance, notwithstanding other provisions of this Lease;
provided, however, that the release, discharge, exoneration, and covenant not to
xxx herein contained shall be limited by the terms and provisions of the waiver
of subrogation clauses or endorsement consenting to a waiver of right of
recovery, and shall be coextensive therewith. If either Lessor or Lessee is
unable to obtain such clause or endorsement, such party shall promptly give the
other party notice of such inability and the other party shall be relieved of
its obligations under this Section. If either Lessor or Lessee is able to obtain
such clause or endorsement only upon payment of an additional premium, such
party shall promptly give the other party notice to that effect, in which event
the other party shall have the right to pay such additional premium, and upon
such payment, the party whose insurer requires such payment shall promptly
procure such clause or endorsement.
31. Subordination of Lessee's Interest. [See Section 49.]
32. Surrender of Premises. Lessee, at the expiration or sooner
termination of this Lease, shall quit and surrender the Premises in broom clean
and sanitary condition, except for reasonable wear and tear and damage by the
elements.
33. Rules and Regulations. Provided Lessor has given Lessee written
notice thereof, Lessee shall use the Premises and the common areas in the
Property in accordance with such reasonable rules and regulations not
inconsistent with this Lease as may from time to time be made by Lessor for the
general safety, comfort, and convenience of Lessor and tenants of the Property,
and shall cause Lessee's employees, agents, invitees, and licensees to abide by
such rules and regulations.
34. Holdover. If Lessee holds over after the expiration of the term of
this Lease, such tenancy shall be a month-to-month tenancy. During such tenancy
Lessee agrees to pay Lessor one hundred fifty percent (150%) the rate of rental
as provided herein, and to be bound by all of the terms, covenants, and
conditions herein specified.
35. Memorandum of Lease. If either party so requests, Lessee and Lessor
agree to execute and place of record an instrument, in recordable form, and in
the form attached as Exhibit D, evidencing the commencement date and expiration
date of this Lease and Lessee's options under Sections 50 and 56.
36. Force Majeure. Except as expressly provided in this Lease, Lessee
and Lessor shall have no liability whatsoever on account of the following acts
of "force majeure," which shall include (a) the inability to fulfill, or delay
in fulfilling, any of their obligations under this Lease by reason of strike,
lockout, other labor trouble, dispute or disturbance; (b) governmental
regulation, moratorium, action, preemption or priorities or other controls; (c)
shortages of fuel, supplies or labor; (d) any failure or defect in the supply,
quantity or character of electricity or water furnished to the Premises by
reason of any requirement, act or omission of the public utility or others
furnishing the Premises with electricity or water; and (e) for any other reason,
other than financial inability whether similar or dissimilar to the above, or
for Act of God, beyond Lessee's or Lessor's reasonable control. If this Lease
specifies a time period for performance of an obligation of Lessor, that time
period shall be extended by the period of any delay in Lessor's or Lessee's
performance caused by any of the events of force majeure described herein.
37. Light, Air, and View. Lessor does not guarantee the continued
present status of light, air, or view over any premises adjoining or in the
vicinity of the Property.
38. Lessor's Liability. Anything in this Lease to the contrary
notwithstanding, covenants, undertakings and agreements herein made on the part
of Lessor are made and intended not as personal covenants, undertakings and
agreements for the purpose of binding Lessor personally or the assets of Lessor
except Lessor's interest in the Premises and the proceeds thereof, but are made
and intended for the purpose of binding only the Lessor's interest in the
Premises and the proceeds thereof, as the same may from time to time be
encumbered. While Lessee may bring a legal action against Lessor, judgments may
be enforced only against Lessor's interest in the Premises and the proceeds
thereof. No personal liability or personal responsibility is assumed by, nor
shall at any time be asserted or enforceable against, Lessor or its partners or
agents or their respective heirs, legal representatives, successors, and assigns
on account of this Lease or on account of any covenant, undertaking or agreement
of Lessor in this Lease contained.
39. Miscellaneous.
(a) Nonwaiver. No failure of Lessor to insist upon the strict
performance of any provision of this Lease shall be construed as depriving
Lessor of the right to insist on strict performance of such provision or any
other provision in the future. No waiver by Lessor of any provision of this
Lease shall be deemed to have been made unless expressed in writing and signed
by Lessor. No acceptance of rent or of any other payment by Lessor from Lessee
after any default by Lessee shall constitute a waiver of any such default or any
other default. Consent by Lessor in any one instance shall not dispense with
necessity of consent by Lessor in any other instance.
-6-
7
(b) Attorneys' Fees. If an action be commenced to enforce any of
the provisions of this Lease, the prevailing party shall, in addition to its
other remedies, be entitled to recover its reasonable attorneys' fees.
(c) Captions and Construction. The captions in this Lease are for
the convenience of the reader and are not to be considered in the interpretation
of its terms.
(d) Partial Invalidity. If any term or provision of this Lease or
the application thereof to any person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and be enforced as written to the fullest
extent permitted by law.
(e) Governing Law. This Lease shall be governed by the laws of
the State of Washington.
(f) Estoppel Certificates. Lessee shall, from time to time, upon
written request of Lessor, execute, acknowledge and deliver to Lessor or its
designee a written statement stating: The date this Lease was executed and the
date it expires; the date the term commenced and the date Lessee accepted the
Premises; the amount of Basic Rental and Additional Rental and the date to which
such Basic and Additional Rental has been paid; and certifying, if true and
correct: That this Lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way (or specifying the date and terms
of agreement so affecting this Lease); that this Lease represents the entire
agreement between the parties as to this leasing; that as of such date all
conditions under this Lease to be performed by the Lessor have been satisfied;
that all required contributions by Lessor to Lessee on account of Lessor's
improvements as of such date have been received; that to the best of Lessee's
knowledge there are no existing claims, defenses or offsets which the Lessee has
against the enforcement of this Lease by the Lessor; that no Rental has been
paid more than one month in advance; and the amount of any security has been
deposited with Lessor. It is intended that any such statement delivered pursuant
to this section may be relied upon by a prospective purchaser or assignee of
Lessor's interest or by any lender. If Lessee shall fail to respond within ten
(10) business days of receipt by Lessee of a written request by Lessor as herein
provided, Lessee shall be deemed to have given such certificate as above
provided without modification and shall be deemed to have admitted that this
Lease is in full force and effect, that there are no uncured defaults in
Lessor's performance, that the security deposit is as stated in this Lease, and
that not more than one month's Rental has been paid in advance.
(g) Transfer of Lessor's Interest. In the event of any transfer
or transfers of Lessor's interest in the Premises, other than a transfer for
security purposes only, the transferor shall be automatically relieved of any
and all obligations and liabilities on the part of Lessor accruing from and
after the date of such transfer and Lessee agrees to attorn to the transferee
upon the receipt of written notice of such transfer from Lessor, which shall
specify the transferee's name and address for notices and the payment of rent
hereunder. Any such transfer shall be made expressly subject to this Lease, and
the transferee must assume Lessor's obligations hereunder.
(h) Entire Agreement. This document contains the entire and
integrated agreement of the parties, supersedes and replaces any and all other
agreements, leases, or understandings between the parties in any way related to
the Premises, and may not be modified except in writing signed and acknowledged
by both parties.
(i) Interpretation. This Lease has been submitted to the scrutiny
of all parties hereto and their counsel if desired, and shall be given a fair
and reasonable interpretation in accordance with the words hereof, without
consideration or weight being given to its having been drafted by any party
hereto or its counsel.
(j) Remedies Cumulative. The specified remedies to which Lessor
may resort under the terms of this Lease are cumulative and are not intended to
be exclusive of any other remedies or means of redress to which Lessor may
lawfully be entitled in case of any breach or threatened breach by Lessee of any
provision of this Lease. In addition to the other remedies in this Lease
provided, Lessor shall be entitled to the restraint by injunction of the
violation, or attempted or threatened violation, of any of the covenants,
conditions, provisions of this lease.
(k) Number; Gender; Permissive Versus Mandatory Usage. Where the
context permits, references to the singular shall include the plural and vice
versa, and to the neuter gender shall include the feminine and masculine. Use of
the word "may" shall denote an option or privilege and shall impose no
obligation upon the party which may exercise such option or privilege; use of
the word "shall" shall denote a duty or an obligation.
(1) Lessee's Liability. Each Lessee, and all general partners of
any partnership which is a Lessee, shall be jointly and severally liable under
this Lease.
(m) Time. Time is of the essence to this Lease.
-7-
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(n) Binding Effect. Subject to the provisions of Sections 20 and
60 hereof, this Agreement shall be binding upon the parties hereto and upon
their respective executors, administrators, legal representatives, successors,
and assigns.
SEE RIDER ATTACHED AND MADE A PART HEREOF.
EXECUTED as of the date first above written.
LESSOR:
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
XXXXXXX X. XXXXXX, a married man as to
his separate estate
REDMOND EAST ASSOCIATES
By /s/ Xxxxxxx Xxxxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxxxx
By /s/ Xxxxx Xxxxx
--------------------------------------
Xxxxx Xxxxx
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
LESSEE:
DIGITAL SYSTEMS INTERNATIONAL, INC.
By /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: XXXXXXX XXXXXX
------------------------------------
Title: VP, Finance
------------------------------------
-8-
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day personally appeared before me XXXXXXX X. XXXXXX, to me known
to be the individual described in and who executed the within and foregoing
instrument as Lessor, and acknowledged that he signed the same as his free and
voluntary act and deed, for the uses and purposes therein mentioned.
Given under my hand and official seal this 16th day of May, 1991.
[Notarial Seal] /s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
---------------------------------------
NOTARY PUBLIC in and for the
State of Washington, residing at Auburn
------
My commission expires 2/17/94
-----------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 20th day of May, 1991, before me, the undersigned, a Notary
Public in and for the Sate of Washington, duly commissioned and sworn,
personally appeared Xxxxxxx Xxxxxxxxxx, to me known to be a general partner of
REDMOND EAST ASSOCIATES, a Washington general partnership and, on behalf of such
general partnership, acknowledged to me that he signed and sealed the foregoing
instrument as the free and voluntary act and deed of said general partnership,
for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
[Notarial Seal] /s/ X. Xxxxxx
X. Xxxxxx
---------------------------------------
NOTARY PUBLIC in and for the State of
Washington, residing at Bellevue
---------------
My commission expires 12/27/94
-----------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 20th day of May, 1991, before me, the undersigned, a Notary
Public in and for the Sate of Washington, duly commissioned and sworn,
personally appeared Xxxxx Xxxxx, to me known to be a general partner of REDMOND
EAST ASSOCIATES, a Washington general partnership and, on behalf of such general
partnership, acknowledged to me that he signed and sealed the foregoing
instrument as the free and voluntary act and deed of said general partnership,
for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
[Notarial Seal] /s/ X. Xxxxxx
X. Xxxxxx
---------------------------------------
NOTARY PUBLIC in and for the State of
Washington, residing at Bellevue
---------------
My commission expires 12/27/94
-----------------
-9-
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 16th day of May, 1991, before me, the undersigned, a Notary
Public in and for the Sate of Washington, duly commissioned and sworn,
personally appeared Xxxxxxx X. Xxxxxx, to me known to be a general partner of
REDMOND EAST ASSOCIATES, a Washington general partnership and, on behalf of such
general partnership, acknowledged to me that he signed and sealed the foregoing
instrument as the free and voluntary act and deed of said general partnership,
for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
[Notarial Seal] /s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
---------------------------------------
NOTARY PUBLIC in and for the
State of Washington, residing at Auburn
------
My commission expires 2/17/94
-----------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day personally appeared before me XXXXXXX X. XXXXXXX, to me
known to be the VP, Finance of DIGITAL SYSTEMS INTERNATIONAL, the corporation
that executed the foregoing instrument as Lessee, and acknowledged the same
instrument to be the free and voluntary act and deed of said corporation for the
uses and purposes therein mentioned, and on oath stated that he was authorized
to execute the said instrument, and that the seal affixed (if any) is the
corporate seal of said corporation.
WITNESS MY HAND AND OFFICIAL SEAL HERETO AFFIXED this 13th day of May,
1991.
/s/ Xxxxx [SIC]
---------------------------------------
NOTARY PUBLIC in and for the State
of Washington, residing at Redmond
------------
My commission expires 5/5/95
-----------------
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EXHIBIT A
Legal Description
The land referred to is situated in the county of King, State of
Washington, and described as follows:
That portion of the southeast quarter of the southwest quarter of
Section 7, Township 25 North, Range 6 East, X.X., described as
follows:
Commencing at the south quarter of Section 7, Township 25 North,
Range 6 East, X.X., in King County, Washington;
thence north 581.58 feet along the east line of the southwest
quarter to the northeast corner of tract conveyed to Xxxxxxxx X.
Xxxxxx by deed of record under Recording Number 2648544 of said
county;
thence south 89 degrees12'47" west along the north line of said
Xxxxxx Tract 550 feet for the TRUE POINT OF BEGINNING of this
description;
thence south 89 degrees12'47" west along the north line of said
Xxxxxx Tract 568.52 feet, more or less, to the east line of Xxxxx
Xxxxxxxx County Road Number 2712, as the same was conveyed to
King County by deed recorded under Recording Number 2646727;
thence northerly and easterly along the easterly and southerly
line of the said Xxxxx Xxxxxxxx Road to an intersection with the
west line of the east half of the southeast quarter of the
southwest quarter of said Section 7;
thence southerly along said line 200 feet, more or less, to the
southwest corner of a tract of land conveyed to Redmond Sportman
Assoc., Inc. by deed recorded under Recording Number 2647686;
thence north 88 degrees54'06" east along the south line of said
Redmond Sportman Assoc., Inc. Tract 100 feet, more or less, to a
point from which the TRUE POINT OF BEGINNING bears south
01'34'27" east; thence south 01 degrees34'27" east 544.335 feet,
more or less, to the TRUE POINT OF BEGINNING
-11-
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EXHIBIT B
Map of Property and Building
[Graphic omitted]
-12-
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EXHIBIT C
General Specifications for Building
1. 5" structural reinforced first floor slab.
2. Roof structure of steel columns, steel beams and metal decking.
3. Exterior walls of reinforced job cast, tilt-up concrete panels with
two coats of paint on the exterior surfaces; windows shall be insulated tinted
glass with anodized aluminum frames. (Contrary to the Preliminary Plans there
will be no exposed aggregate on the Building exterior.)
4. Insulation of exterior walls and roof, such insulation shall meet the
applicable requirements of the Washington Energy Code.
5. Fire protection to meet City of Xxxxxxx requirements on a standard
grid with fire sprinkler heads, installed for fire protection of the building
shell.
6. 480/277 volt three phase, 1600 amp electrical service.
7. Covered parking areas for at least eight (8) spaces with covered
walkway to the building entrance.
8. Roof skylights as required by space plan to be prepared by Lessee.
(Provided, however that no more than 400 square feet of skylights will be paid
for by Lessor and the increased cost attributable to additional square footage
of skylights will be included within the Leasehold Improvements (See Section
43)).
9. Sewer and water lines stubbed to two restroom areas on the first
floor.
-13-
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EXHIBIT D
Short Form of Lease
After recording, return to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
SHORT FORM LEASE
This Short Form Lease ("Short Form Lease"), dated as of ______________,
1991, is made by and between XXXXXXX X. XXXXXX, a married man, with respect to
his separate property, and REDMOND EAST ASSOCIATES, a Washington general
partnership (collectively, "Lessor"), and DIGITAL SYSTEMS INTERNATIONAL, INC., a
Washington corporation ("Lessee").
1. LONG FORM LEASE.
Lessor and Lessee entered into a lease dated May ____, 1991 ("Long Form
Lease") for certain space ("Premises") in the building ("Building 17") that is
located on the parcel of real property situated in the City of Xxxxxxx, Xxxx
County, Washington ("Property") that is more particularly described on EXHIBIT A
attached hereto and made a part thereof.
2. INCORPORATION OF LONG FORM LEASE.
All the terms and conditions of the Long Form Lease are incorporated
herein and made a part hereof. The Long Form Lease and this Short Form Lease
shall be construed to be one lease, but if there is any conflict between the
terms and conditions of the Long Form Lease and the terms and conditions of this
Short Form Lease, the terms and conditions of the Long Form Lease shall prevail.
(The Long Form Lease and this Short Form Lease are collectively referred to as
the "Lease".)
3. SHORT FORM LEASE.
Lessor and lessee are entering into this Short Form Lease in order to
record the Lease and give notice of the terms and conditions of the Lease.
4. TERM.
The initial term of the Lease shall be 7 years, commencing on
________________________ and expiring on _____________________________.
5. OPTIONS.
Under the Lease, Lessee has options to (a) extend the term of the Lease
for one period of 5 years, (b) lease additional space in the building that may
be located on the property more particularly described on EXHIBIT B attached
hereto and made a part hereof ("Building 19"), which is located adjacent to the
Property.
6. RIGHT OF FIRST REFUSAL.
Under the Lease, Lessee has a right of first refusal to lease additional
space in Building 19.
7. ADDITIONAL PROVISIONS.
Additional and supplementary terms, conditions, covenants and agreements
pertaining to Building 17, the Property and Building 19 are set forth in the
Long Form Lease, executed copies of which shall be retained by Lessor and Lessee
to exhibit to any person having lawful right to knowledge of the details
thereof, including without limitation, any purchasers, prospective purchasers,
lenders, prospective lenders and title insurance companies in connection with
Building 17, the Property and Building 19.
8. TERMINATION OF SHORT FORM LEASE.
This Short Form Lease shall terminate, be of no further force or effect
and be automatically removed as a matter of record upon the earlier to occur of
(a) the expiration of the term of the Long Form Lease or (b) the termination of
the Long Form Lease pursuant to the terms thereof.
-14-
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LESSOR:
----------------------------------------
XXXXXXX X. XXXXXX, a married man, with
respect to his separate property
REDMOND EAST ASSOCIATES,
a Washington general partnership
By
--------------------------------------
Xxxxxxx Xxxxxxxxxx
General Partner
By /s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx Xxxxx
General Partner
By
--------------------------------------
Xxxxxxx X. Xxxxxx
General Partner
LESSEE:
DIGITAL SYSTEMS INTERNATIONAL, INC., a
Washington corporation
By
--------------------------------------
Its
-----------------------------------
-15-
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STATE OF WASHINGTON )
) ss.
COUNTY OF ___________ )
On this _____________ day of ______________________, 199___, before me,
a Notary Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Xxxxxxx X. Xxxxxx, to me known to be the individual who
executed the within and foregoing instrument, and acknowledged that he signed
the same as his free and voluntary act and deed, for the uses and purposes
therein mentioned.
Given under my hand and official seal hereto affixed the day and year in
this certificate first above written.
---------------------------------------
NOTARY PUBLIC in and for the State of
Washington, residing at .
----------------
My commission expires .
------------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _______ day of _________________, 19___, before me, the
undersigned, a Notary Public in and for the Sate of Washington, duly
commissioned and sworn, personally appeared XXXXXXX XXXXXXXXXX, to me known to
be the person who signed as General Partner of REDMOND EAST ASSOCIATES, the
Washington general partnership that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of REDMOND EAST ASSOCIATES for the uses and purposes therein mentioned;
and on oath stated that he was authorized to execute the said instrument on
behalf of REDMOND EAST ASSOCIATES.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
_______________________________________
NOTARY PUBLIC in and for the State of
Washington, residing at ______________.
My commission expires ________________.
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _______ day of _________________, 19___, before me, the
undersigned, a Notary Public in and for the Sate of Washington, duly
commissioned and sworn, personally appeared XXXXX XXXXX, to me known to be the
person who signed as General Partner of REDMOND EAST ASSOCIATES, the Washington
general partnership that executed the within and foregoing instrument, and
acknowledged said instrument to be the free and voluntary act and deed of
REDMOND EAST ASSOCIATES for the uses and purposes therein mentioned; and on oath
stated that he was authorized to execute the said instrument on behalf of
REDMOND EAST ASSOCIATES.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
_______________________________________
NOTARY PUBLIC in and for the State of
Washington, residing at ______________.
My commission expires ________________.
-16-
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _______ day of _________________, 19___, before me, the
undersigned, a Notary Public in and for the Sate of Washington, duly
commissioned and sworn, personally appeared XXXXXXX X. XXXXXX, to me known to be
the person who signed as General Partner of REDMOND EAST ASSOCIATES, the
Washington general partnership that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of REDMOND EAST ASSOCIATES for the uses and purposes therein mentioned;
and on oath stated that he was authorized to execute the said instrument on
behalf of REDMOND EAST ASSOCIATES.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year first above written.
_______________________________________
NOTARY PUBLIC in and for the State of
Washington, residing at ______________.
My commission expires ________________.
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _______ day of _________________, 19___, before me, the
undersigned, a Notary Public in and for the Sate of Washington, duly
commissioned and sworn, personally appeared __________________________________,
to me known to be the person who signed as ________________________ of DIGITAL
SYSTEMS INTERNATIONAL, INC., the Washington corporation that executed the within
and foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that ________ was duly elected, qualified and
acting as said officer of the corporation, that __________ was authorized to
execute said instrument and that the seal affixed, if any, is the corporate seal
of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and the year first above written.
_______________________________________
NOTARY PUBLIC in and for the State of
Washington, residing at ______________.
My commission expires ________________.
-17-
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EXHIBIT E
Preliminary Plans Submitted as Design Review Documents to the City of Xxxxxxx
(2 pages)
[Graphics omitted]
-18-
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RIDER attached to and forming a part of the lease between XXXXXXX X. XXXXXX and
REDMOND EAST ASSOCIATES as Lessor and DIGITAL SYSTEMS INTERNATIONAL, INC. as
Lessee.
--------------------------------------------------------------------------------
ADDITIONAL PROVISIONS
40. Term. Supplementing Section 4 hereof, the term of this Lease shall commence
upon the date ("Commencement Date") which is the earlier to occur of (a) the
later of (i) August 1, 1991, or (ii) the date upon which the Building and the
Leasehold Improvements are substantially completed (as defined in Section 43
hereof) or (b) the date Lessee actually occupies the Premises for the conduct of
its business, and the term shall expire on the last day of the 84th full month
thereafter. When the Commencement Date has been determined, Lessor and Lessee
shall, within 5 business days thereafter, execute a written agreement confirming
such date as the Commencement Date.
41. Basic Rental. The Basic Rental shall be $0.91 per square foot of the
Building per month through the 60th month of the term of this Lease and $0.92
per square foot of the Building per month thereafter.
42. Operating Expenses and Real Property Taxes. This Section supplements Section
6.
(a) Operating Expenses. Supplementing Section 6 hereof, commencing on
the Commencement Date Lessee shall pay to Lessor as "Additional Rental", the
Operating Expenses (as defined in Section 6 hereof) of the Premises.
(1) Exclusions.
(A) Notwithstanding anything in Section 6 to the contrary,
Operating Expenses shall exclude or have deducted from them:
(i) Leasing commissions;
(ii) Managing agents' fees or commissions in excess
of four percent (4%) of the Basic Rental payable under this Lease;
(iii) Executive's salaries above the grade of
building manager;
(iv) Expenditures for capital improvements except
those which, under generally accepted accounting principles, are expenses or
regarded as deferred expenses and except for capital expenditures required by
law;
(v) Amounts received by Lessor through proceeds of
insurance to the extent the proceeds are compensation for expenses which were
previously included in Operating Expenses hereunder;
(vi) Cost of repair or replacements incurred by
reason of fire or other casualty or by the exercise of the right of eminent
domain;
(vii) Consulting fees, marketing fees, advertising
and promotional expenditures;
(viii) Legal fees in connection with the
negotiation and preparation of leases of space or legal fees in connection with
the sale of all or any portion of the Property, or an interest therein, or the
refinancing of Lessor's interest in all or any portion of the Property, or in
connection with disputes with tenants, and legal and auditing fees, other than
legal and auditing fees reasonably incurred in connection with the maintenance
and operation of all or any portion of the Property or in connection with the
preparation of the statements required pursuant to Additional Rental or lease
escalation provisions contained in leases of space in the Building;
(ix) Principal and interest payments on loans
secured by mortgages or deeds of trust on, or assignment of rents from, all or
any portion of the Property;
(x) Rents payable in connection with any ground or
underlying lease of all or any portion of the Property;
(xi) All Operating Expenses for which Lessor has
received reimbursement, except by way of Basic Rental or escalation rents;
(xii) Depreciation, except for depreciation on
equipment used in the repair and maintenance of the Property over the useful
life of such equipment;
(xiii) Costs resulting from the correction of any
latent construction defects in all or any portion of the Property;
(xiv) Penalties due to any violation of law by
Lessor or other tenants;
(xv) Costs of preparing tenant space for tenant
occupancy;
-19-
20
(xvi) Costs of any utilities, services, or capital
improvements relating to all or any portion of the Property which were paid
directly by Lessee or any other tenant;
(xvii) Costs allocable to properties other than the
Property in which Lessor has an interest;
(xviii) Damages incurred by Lessor for any default,
breach, claim, judgment or settlement;
(xix) Costs related to public transportation,
transit or van pool unless imposed by governmental authority;
(xx) Structural repairs or replacements;
(xxi) Costs incurred in performing work or
furnishing services for individual tenants (including Lessee) at such tenant's
expense to the extent that such work or service is in excess of any work or
service Lessor at its expense is obligated to furnish to Lessee; costs of
performing work or furnishing services to tenants other than Lessee at Lessor's
expense to the extent that such work or service in excess of any work or service
Lessor is obligated to furnish to Lessee at Lessor's expense; and
(xxii) Lessor's general administrative overhead.
(2) Reconciliation of Operating Expenses. Within 90 days
following the expiration of each Lease Year, Lessor shall prepare and deliver to
Lessee an itemized accounting (together with copies of bills and invoices) of
actual Operating Expenses incurred during the prior Lease Year with respect to
the Property. If the Additional Rental paid by Lessee under this Section during
the preceding Lease Year was less than the actual amount of the Operating
Expenses payable by Lessee under this Lease for such Lease Year, Lessor shall so
notify Lessee and Lessee shall pay the difference to Lessor within 30 days after
receipt of such notice. Such amount shall be deemed to have accrued during the
prior Lease Year and shall be due and payable from Lessee even though the term
of this Lease shall have expired or this Lease shall have been terminated prior
to Lessee's receipt of this notice. If the Additional Rental paid by Lessee
under this Section was greater than the actual amount of the Operating Expenses
payable by Lessee under this Lease for such Lease Year, then the amount of such
overpayment shall be promptly refunded to Lessee.
(3) Statements Binding. The statements of Operating Expenses to
be furnished by Lessor under paragraph (3) as provided above shall be certified
as true and correct by Lessor, and shall be prepared in reasonable detail by
Lessor. The statements thus furnished to Lessee shall constitute a final
determination as between Lessor and Lessee of Operating Expenses for the periods
represented thereby, unless Lessee, within 30 days after they are furnished,
shall give notice to Lessor that it disputes their accuracy or their
appropriateness, which notice shall specify the particular respects in which the
statement is inaccurate or inappropriate. Pending the resolution of such
dispute, Lessee shall pay to Lessor the uncontested portion of Operating
Expenses. Any such dispute shall be resolved by binding arbitration in
accordance with Section 54 of this Lease. Within 30 days after the resolution of
such dispute, Lessee shall pay to Lessor any deficiency in the amount of
Operating Expenses previously paid by it to Lessor. Lessee shall have the right,
during business hours and upon 3 business days' prior written notice to Lessor,
to examine and/or audit Lessor's books and records with respect to Operating
Expenses paid or payable by Lessee, and if such examination reveals that Lessor
overstated Operating Expenses by 5% or more, the cost of such examination and/or
audit shall be paid by Lessor upon demand.
(b) Real Property Taxes. Real Property Taxes against the Property and
the Building shall be prorated between Lessor and Lessee as of the Commencement
Date. On the Commencement Date, Lessee shall pay Lessor Lessee's prorated share
of such Real Property Taxes for the half of the fiscal year in which the
Commencement Date occurs. Thereafter, Lessee shall pay as Additional Rental all
Real Property Taxes against the Property and the Building at least twenty (20)
days before delinquency and shall promptly provide Lessor with proof of each
such payment.
(1) Real Property Taxes Defined. "Real Property Taxes" shall mean
all taxes, assessments (general and special) and other impositions or charges
which may be taxed, charged, levied, assessed or imposed upon all or any portion
of, or in relation to the Property or the Building (other than estate,
inheritance, net income or franchise taxes).
(2) Statement of Real Property Taxes. No later than 30 days prior
to the Commencement Date, Lessor shall deliver to Lessee a copy of the statement
from the taxing authority for Real Property Taxes for the fiscal year in which
the Commencement Date occurs.
Within 10 business days after Lessor's receipt of a statement from the
taxing authority for Real Property Taxes for each Lease Year following the Lease
Year in which the Commencement Date occurs, Lessor shall deliver the original of
such statement to Lessee. Lessee shall pay the Real Property Taxes for each
Lease Year, based upon such statements, in as many installments as Lessor is
permitted to pay Real Property Taxes for such Lease Year, and Lessee shall pay
each such installment to the taxing authority no later than twenty (20) days
prior to delinquency. If any lender which holds a mortgage or deed of trust
against the Property requires the periodic payment of reserves for Real Property
Taxes, Lessee shall pay to Lessor the amount of the required installments for
reserves no less than 5 business days prior to each installment due date. Lessor
will use its reasonable best efforts to persuade any such lender to waive the
reserve requirement.
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(3) Reconciliation of Real Property Taxes. If, after Lessee shall
have made a payment of Additional Rental under this Section 42(b), Lessor shall
receive a refund of any Real Property Taxes payable during any Lease Year on
which such payment shall have been based, as a result of a reduction of Real
Property Taxes by final determination of legal proceedings, settlement or
otherwise, Lessor shall, within 10 days of receiving such refund, pay to Lessee
such refund.
43. Construction; Substantial Completion.
(a) Construction of Building and Premises. Lessor shall be responsible
for construction of the Building and the payment of all the costs of
construction. The Building shall be a concrete, two-story, tilt wall building
containing approximately 83,000 square feet. The general specifications for the
Building are outlined on Exhibit C attached. Included within the general
specifications for the Building are 400 feet of skylights. Lessee may require
more than 400 feet of skylights in the Building, provided that Lessor is able to
secure the necessary building permits. However, Lessor shall not be required to
pay for more than 400 feet of skylights and any increased cost attributable to
additional skylights shall be included within the Leasehold Improvements
(defined below). Lessor shall also be responsible for construction of all site
improvements required for the Building and for all landscaping and for paying
the entire cost thereof. Lessor shall also be responsible for finishing the
interior of the Premises (herein "Leasehold Improvements") and for payment of
the costs thereof to a maximum of $75,000 plus $32.10 per square foot of the
Premises (inclusive of sales tax and the costs of permits, but exclusive of the
costs of plans and specifications) and reduced by one-half of the actual cost to
construct the temporary water tank required by the City of Xxxxxxx as a
condition to issuance of a building permit for the Building; provided, however,
that such reduction on account of the water tank shall not exceed $62,500.00
("Lessee's Improvement Allowance"). Construction of the Building and the site
improvements, installation of the landscaping and construction of the Leasehold
Improvements shall be done in a good and workmanlike manner and in accordance
with the final plans and specifications provided for herein and in accordance
with all applicable laws, rules, regulations and ordinances. Lessor will by the
date of substantial completion of the Building or as soon thereafter as
reasonably possible, provide to Lessee reasonably acceptable evidence of the
cost of construction of the temporary water tank. Lessor agrees to pay Lessee
one-half of any amount realized by Lessor from the sale of the water tank (or
any component parts thereof) after deducting any costs incurred by Lessor in
realizing such amount, such payment to Lessee to be made promptly upon receipt
of such amount by Lessor.
(b) Preparation and Approval of Plans and Specifications for Building
and Property. At the request of Lessor, Xxxxx Xxxxxxx & Associates, Inc.,
("Architect") has prepared preliminary plans and specifications dated September
13, 1990, Revision 3, November, 1990, for the Building and the landscaping and
other site improvements (including parking) on the Property (the "Preliminary
Plans"). The Preliminary Plans have been submitted as design review documents to
the City of Xxxxxxx (File #SPR-90-66) and copies thereof are attached hereto as
Exhibit E. Lessee has approved the Preliminary Plans. When the City of Xxxxxxx
has completed its review and has given design review approval Lessor will
proceed as quickly as reasonably possible to prepare final plans and
specifications for the Building and the landscaping and other site improvements
(including parking) on the Property. The final plans and specifications shall
include the skylights requested by Lessee provided that the Architect believes
the same are structurally feasible. The final plans and specifications shall be
submitted to Lessee for approval, but so long as there is no material deviation
from the Preliminary Plans, Lessee's approval shall be required and shall be
promptly given in writing. If there are material changes so that Lessee's
approval is required, it shall not be unreasonably withheld, delayed, or
conditioned and shall be deemed to have been given if Lessee does not disapprove
the final plans and specifications within ten (10) business days after
submittal.
(c) Preparation of Plans and Specifications for Leasehold Improvements.
Lessor shall be responsible for payment of the costs of designing the Leasehold
Improvements (the "Design Costs") up to a maximum of $0.75 per square foot of
the Building (the "Design Allowance"). If the Design Costs exceed the Design
Allowance, the excess shall be paid by Lessee when the costs are due and
payable. The Design Costs shall include the costs of space planning through the
preparation of final plans and specifications for the Leasehold Improvements.
Lessee shall work with a space planner or architect reasonably acceptable to
Lessor to develop a space plan and plans and specifications for the Leasehold
Improvements. From the space plan such architect or space planner (or another
architect or space planner reasonably acceptable to Lessor) shall prepare plans
and specifications for the Leasehold Improvements which fairly incorporate the
space plan. Lessee may require revisions to the plans and specifications prior
to finalization and shall be given reasonable time for "value engineering", but
Lessee agrees to act in a commercially reasonable manner in doing so and to not
delay the preparation of final plans and specifications for the Leasehold
Improvements beyond a date when construction of the Leasehold Improvements must
commence in order for Lessor to meet the construction schedule set out below.
(d) Construction Contract. Lessor will enter into a construction
contract for construction of the Building and the Leasehold Improvements with a
contractor or contractors who shall be from a list of contractors approved by
Lessee, which approval shall not be unreasonably withheld, delayed, or
conditioned. If required by Tenant, the final plans and specifications for the
Leasehold Improvements shall be submitted for bid to at least three contractors
from the approved list of contractors. Lessor shall provide copies of the bids
to Lessee and Lessee may discuss the bids with such contractors so long as
Lessee acts reasonably. Lessor will keep Lessee informed as to the bidding and
contracting process. Lessor will award the construction contract for the
Leasehold Improvements to the lowest bidder unless directed otherwise by Lessee.
Each construction contract shall identify by line item breakdown, the entire
construction cost of the Building and the Leasehold Improvements, separately
designated and identified including the additional cost attributable to more
than 400 feet in skylights. Each construction contract shall include a
guaranteed maximum price, subject to
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increases only for the matters recited in the AIA form general construction
contract and change orders initiated or approved by Lessee. If the construction
cost of the Leasehold Improvements, as set out in the construction contract,
including any increases resulting from change orders initiated or approved by
Lessee in writing, exceeds Lessee's Improvement Allowance, Lessor shall pay the
excess to the contractor as and when due and Lessee shall be responsible for
reimbursement to Lessor of the excess
[Graphics Omitted of:
Network/Xxxxx Conceptual Site Grading and Utility Plan
Redmond East Business Campus (Xxxxx Property)
Redmond East (Xxxxx Property)
Redmond East Business Campus (Xxxxx Property)]
(herein "Lessee's Share"). Lessee shall have the option to pay all or a portion
of Lessee's Share in cash on the Commencement Date or to increase the Basic
Rental payable under this Lease by $0.008 per square foot for each $0.50 per
square foot of the cost of the Leasehold Improvements above Lessee's Improvement
Allowance if and to the extent not paid in cash on the Commencement Date. If the
construction cost for the Leasehold Improvements as set out in the construction
contract, including any increases for change orders initiated or approved by
Lessee, is less than Lessee's Improvement Allowance, the difference will be paid
by Lessor to Lessee in cash on the Commencement Date (or as soon thereafter as
the amount due can be calculated with certainty).
(e) Substantial Completion. Construction of the Building and the
Leasehold Improvements shall be deemed substantially completed when: (1) the
supervising architect has executed a certificate to Lessor and Lessee certifying
that the Building and the Leasehold Improvements have been substantially
completed in accordance with the final plans and specifications, and (2) the
appropriate governmental authority has issued a certificate of occupancy for the
Premises, and (3) the landscaping of the Property has been substantially
completed in accordance with landscaping plans approved by Lessee (unless
landscaping cannot then be completed because of weather conditions in which case
it shall be completed as soon as reasonably possible). Lessor shall give Lessee
at least 30 days' prior written notice of the date Lessor anticipates that the
Building and the Leasehold Improvements will be substantially completed. Within
5 business days thereafter, Lessor, the contractor, Lessee and the supervising
architect will jointly conduct an inspection of the Premises and create a
punchlist of items to be completed by Lessor. Lessor shall cause the punchlist
items to be completed as soon as reasonably possible. Final completion shall be
evidenced by a certificate of final completion to Lessor and Lessee executed by
the supervising architect.
(f) Commencement and Completion. Lessor agrees to commence construction
of the Building as soon as Lessor obtains the necessary permits from the City of
Redmond, Washington, permitting it to commence construction. Lessor agrees to
use its reasonable best efforts to obtain the permits as soon as possible. If
Lessor has not obtained clearing and grading permits for the Building by July
15, 1991, Lessee may at its option terminate this Lease by giving Lessor written
notice by no later than July 31, 1991. If Lessee does not elect to terminate
this Lease Lessor shall continue to use its reasonable best efforts to obtain
the building permits as soon as possible. If Lessor has not obtained the
building permits necessary for construction of the Building by September 15,
1991 (unless prevented for reasons beyond Lessor's reasonable control) Lessee
may, at its option, terminate this lease by giving written notice to Lessor by
no later than October 1, 1991. If Lessor was prevented from obtaining such
building permits for reasons beyond Lessor's reasonable control or if Lessee
does not exercise its option to terminate this Lease, Lessor shall continue to
use its reasonable best efforts to obtain such building permits as soon as
possible. If, however, despite its reasonable best efforts Lessor has not
obtained such building permits by December 15, 1991, either Lessor or Lessee may
terminate this Lease by written notice to the other given by December 31, 1991.
After construction has commenced, Lessor will diligently and continuously
proceed with construction and agrees to substantially complete construction of
the Building and the Leasehold Improvements within one hundred thirty-five (135)
days after the necessary building permits have been issued by the City of
Xxxxxxx. If construction of the Building and the Leasehold Improvements is not
substantially completed within said one hundred thirty-five (135) day period,
Lessor shall continue to diligently proceed with construction and agrees to pay
to Lessee, within ten (10) business days after Lessee's request and submittal of
paid receipts, any and all temporary occupancy costs reasonably incurred by
Lessee as a result of construction of the Building and Leasehold Improvements
not being substantially completed within said one hundred thirty-five (135) day
period. Such costs shall include, without limitation, moving costs associated
with moving to temporary space and rental (including minimum rent, additional
rent, and holdover rent) in excess of the Basic Rental and a reasonable estimate
of Additional Rental that would have been payable under this Lease for the same
period. In any event, if the Building and Leasehold Improvements are not
substantially completed for any reason, including events force majeure within
two hundred seventy (270) days after the necessary building permits have been
first issued, Lessee shall have the right, by irrevocable written notice to
Lessor to terminate this Lease. Upon such termination, (except for any unpaid
temporary occupancy costs incurred up to the date of termination) neither Lessor
nor Lessee shall have any further rights or obligations hereunder. In addition,
if at any time it reasonably appears to Lessee and the supervising architect
that construction is not progressing with sufficient speed to substantially
complete within said two hundred seventy (270) day period, Lessee may give
Lessor written notice thereof. If within thirty (30) days of such notice Lessor
does not take action which, in the good faith opinion of the supervising
architect, will permit construction to be substantially completed by that
deadline, Lessee may terminate this Lease by irrevocable written notice to
Lessor. Except for the payment of temporary occupancy costs as provided above
(which obligation shall cease to accrue on the date this Lease is terminated),
termination of this Lease shall be Lessee's sole and exclusive remedy for
failure to proceed with or complete construction (unless Lessor has failed
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or refused to use its reasonable best efforts). Notwithstanding the foregoing,
the time limits for completion of construction set out above shall be extended
to accommodate the delay caused by change orders initiated or approved by
Lessee.
(g) Measurement of Premises. Lessor and Lessee acknowledge and agree
that the precise square foot area of the Building cannot be determined until
such time as the Building is substantially completed. Upon the substantial
completion of the Building, Lessor and Lessee shall, at Lessor's expense,
determine the precise square feet of rentable area of the Building using the
BOMA standard of measurement except that the rentable area of the second floor
of the Building shall be reduced by vertical penetrations as defined in the BOMA
standards. However, no more than 400 square feet of skylights or lightwells
shall be considered as vertical penetrations. Upon such determination, Lessor
and Lessee shall execute a certificate setting forth such area and based upon
such area, the Basic Rental payable under Section 5 hereof and Lessee's
Improvement Allowance under this Section 43. If Lessor and Lessee fail to agree
upon such area within 30 days after the substantial completion of the Building,
such area shall be determined by binding arbitration pursuant to Section 54
hereof. Until such determination is made, the amount by which Lessor's
determination of Basic Rental exceeds Lessee's determination shall be deposited
into an escrow and disbursed in accordance with the decision of the arbitrator.
Any reference in this Lease to "square feet" shall mean the "rentable area" as
defined in the BOMA American National Standard (ANSI Z65-1-1980) ("BOMA") with
the exclusion of second floor vertical penetrations as set out above.
(h) Correction of Lessor's Work. Lessor shall promptly correct all
defects in the Building and the interior of the Premises and all failures of
construction to conform to the final plans and specifications, which defects or
nonconformities are discovered before or within one year after the Commencement
Date. Lessor shall bear all costs of correcting such work. Lessor and Lessee
shall each give the other prompt written notice after discovering the existence
of any such defects or nonconformities in such work.
44. Parking. Lessor grants to Lessee, and its agents, employees, suppliers,
customers, invitees, and licensees a non-exclusive license to use the designated
parking areas on the Property. Lessor agrees during the term of this Lease to
provide parking on the Property for no less than two hundred forty-seven (247)
vehicles.
45. Damage or Destruction. Supplementing Section 21 hereof, if in Lessor's
reasonable estimation the Premises cannot be restored within 12 months following
any damage or destruction, (including the unavailability of insurance proceeds)
Lessor shall immediately notify Lessee thereof in writing and Lessee may
terminate this Lease by delivering irrevocable written notice to Lessor within
30 days of its receipt of Lessor's notice. If Lessor does not or is not
permitted to terminate this Lease, and if in Lessor's reasonable estimation the
Premises can be restored within 12 months, then Lessor shall commence to restore
the Premises and the Building in compliance with then-existing laws, and shall
complete such restoration with due diligence. In such event, this Lease shall
remain in full force and effect, but there shall be an abatement of rent between
the date of destruction and the date restoration is completed, based on the
extent to which the destruction interferes, in the determination of Lessor and
Lessee, with the use of the Premises for Lessee's normal business operations. If
Lessor and Lessee fail within 30 days of the date of the casualty to agree upon
the extent to which rent shall be abated, then the determination thereof shall
be submitted to binding arbitration pursuant to Section 54 of this Lease, and
until such determination is made, any excess in the rent claimed by Lessor over
that claimed by Lessee shall be deposited into an escrow and after such
determination is made, disbursed in accordance with the decision of the
arbitrator. The foregoing notwithstanding, if Lessor elects to restore the
Premises but fails to complete the restoration within 12 months of the date of
the casualty, Lessee may terminate this Lease by giving Lessor irrevocable
written notice of termination within 20 days after the expiration of such 12
month period. Notwithstanding anything contained in this Section 45 to the
contrary, either Lessor or Lessee may terminate this Lease by written notice
given within 30 days after any damage or destruction occurring during the last
12 months of the Lease term or any renewal term.
46. Lessee's Right to Contest Liens. Supplementing Section 22 hereof, Lessee
shall have the right to contest the validity of any lien, tax or assessment
which Lessee is required to bear, pay and discharge hereunder by appropriate
legal proceedings, provided that Lessee, before instituting any such contest,
(a) gives Lessor written notice of its intention to contest such lien, tax or
assessment, and (b) pays such lien, tax or assessment in full under protest or
posts with Lessor such bond as Lessor may reasonably deem appropriate to protect
Lessor and the Premises or Property against the nonpayment of such lien, tax or
assessment (including interest, penalties and attorneys' fees). Lessor agrees to
cooperate with Lessee in good faith during the course of such contest, at
Lessee's cost and expense. Lessee shall diligently prosecute any such contest,
at all times effectually stay or prevent any official or judicial sale therefor
under any execution or otherwise, and pay any final judgment enforcing the tax
or assessment so contested and thereafter promptly procure record satisfaction
thereof.
47. Indemnity by Lessee and Lessor. Supplementing Section 23 hereof, Lessee
shall indemnify and hold Lessor harmless from all damages arising out of (a) any
damage to any person or property occurring in, or about the Premises, (b)
Lessee's use of the Premises, or (c) Lessee's breach of the terms of this Lease,
except to the extent any of the foregoing is due to the negligence or wilful
misconduct of Lessor or Lessor's agents, employees, invitees, licensees or
contractors. Lessor shall indemnify, defend, and hold Lessee harmless from all
damages arising out of: (a) negligence or willful misconduct of Lessor or
Lessor's agents, employees, invitees, licensees, or contractors including,
without limitation, damage to any person or property, and (b) Lessor's breach of
any of the terms of this Lease (except as otherwise limited herein).
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Notwithstanding the foregoing, in the event of the concurrent negligence
of Lessee, its agents, employees, sublessees, invitees, licensees or
contractors, on the one hand, and that of Lessor, its partners, directors,
officers, agents, employees, invitees, licensees or contractors, on the other
hand, which concurrent negligence results in injury or damage to persons or
property and relates to the construction, alteration, repair, addition to,
subtraction from, improvement to or maintenance of the Premises, Lessee's and
Lessor's obligation to indemnify the other as set forth in this Section shall be
limited to the extent of Lessee's or Lessor's (as the case may be) negligence
and that of its agents, employees, lessee's, sublessees, invitees, licensees or
contractors and shall include Lessee's or Lessor's (as the case may be)
proportional share of costs, reasonable attorneys' fees, and expenses incurred
in connection with any claim, action or proceeding brought with respect to such
injury or damage.
48. Default; Remedies.
(a) Default by Lessor. Supplementing Section 24 hereof, the occurrence
of the following shall constitute a default by Lessor: a failure to perform any
provision of this Lease within 30 days after written notice of default from
Lessee, or, if such performance cannot reasonably be completed within 30 days,
within a reasonable period of time, provided Lessor is diligently pursuing
performance to completion.
(b) Remedies of Lessee. Without limiting Lessee's rights under Section
43(f), Lessee shall have the following remedy if Lessor is in default: Lessee
may at its option pay any sum or perform any act on Lessor's part to be paid or
performed under this Lease. Lessor shall, within 5 business days after receiving
a written statement therefor, refund to Lessee the amount of any such payment
made or any such expense incurred by Lessee on account of Lessor's default,
together with interest thereon at the rate of fifteen (15%) per annum from the
date Lessee makes such expenditure.
49. Subordination of Lessee's Interest. Subject to the provisions of this
Section, at the election of Lessor or any mortgagee or any beneficiary of a deed
of trust with a lien on the Premises, this Lease shall be subject and
subordinate at all times to the lien of any mortgage or deed of trust which may
now exist or hereafter be executed for which the Premises is specified as
security. In the event that any such mortgage or deed of trust is foreclosed, or
a conveyance in lieu of foreclosure is made for any reason, Lessee shall,
notwithstanding any subordination, attorn to and become the Lessee of the
successor in interest to Lessor, at the option of such successor in interest,
provided that Lessee shall not so subordinate or attorn unless such successor in
interest shall have delivered to Lessee an agreement, in recordable form,
whereby such successor agrees not to disturb Lessee's possession and occupancy
(so long as Lessee is not in default hereunder) and agrees to perform all of
Lessor's obligations hereunder and recognize all Lessee's rights hereunder
during the term of such successor's ownership of the Building. Lessor agrees
that it will not cause the Property to be encumbered by a mortgage or deed of
trust unless the holder thereof agrees to give Lessee a non-disturbance
agreement in the form typically required by institutional first mortgage
lenders.
50. Right of First Refusal to Lease Building No. 19. On the map attached as
Exhibit B, there is shown adjacent to the Property to the south the location of
proposed Building No. 19 which is to contain between 50,000 and 80,000 square
feet and which is to be located on a portion of the real property legally,
described on Exhibit A attached (such portion to be configured generally as
shown on Exhibit B and referred to herein as the "Building 19 Property"). The
Building 19 Property includes approximately 101,074 square feet of land area.
One of the reasons Lessee is entering into this Lease with Lessor is because
Lessee may wish to lease all or a portion of Building No. 19 from Lessor. During
the term of this Lease, Lessor will give Lessee prior written notice if Lessor
intends to accept an offer to enter into a lease with respect to all or any
portion of Building No. 19, which notice shall describe the size and location of
the area to be leased, the economic terms of any such lease and the expected
commencement date. Lessor will not accept any such third party offer prior to
Commencement Date of this Lease. If during the initial term of this Lease,
Lessee wishes to lease such space in Building No. 19 on the economic terms and
the expected commencement date set out in such notice, it shall, within ten (10)
business days after receipt of such notice, notify Lessor in writing. Lessor and
Lessee shall then enter into a lease for the area described in Lessor's notice
to Lessee which shall incorporate such economic terms and commencement date and
shall otherwise be in the form of this Lease. If Lessee does not exercise this
right of first refusal with respect to such space in Building No. 19, such right
of first refusal shall terminate as to such space until the expiration of the
lease for such space between Lessor and such third party and shall continue with
respect to any other space in Building No. 19. If Lessee does not exercise its
right of first refusal with respect to such space, and if Lessor fails to enter
into a lease for such space with such third party within ninety (90) days after
the date of Lessor's notice to Lessee offering such space, Lessee's right of
first refusal shall continue in full force with respect to such space. Nothing
in this section is intended or shall be constructed to obligate Lessor to build
Building 19.
51. [INTENTIONALLY DELETED]
52. Brokers. At the signing of this Lease, Evergreen Management Company
("Broker") represented Lessee. Each party signing this document confirms that
prior oral and/or written disclosure of agency was provided to it in this
transaction by the Broker.
Lessor agrees to pay any and all commissions due to the Broker in
conjunction with this transaction, subject to this Lease not being terminated
prior to the Commencement Date. Lessor and Lessee each represent to the other
that there are no other brokers or selling/leasing agents involved in this
transaction other than the Broker, and shall indemnify, defend, and hold each
other harmless from and against any breach of this representation.
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53. Hazardous Substances. Lessor represents and warrants to Lessee that as of
the date hereof and as of the Commencement Date (a) it has not received
notification of any kind from any regulatory agency stating that the Property is
or may be targeted for a federal or state Hazardous Substances cleanup or may be
contaminated with any Hazardous Substances, and (b) Lessor has no actual
knowledge of a release of any Hazardous Substances on the Property. "Hazardous
Substances" shall mean any substances designated as, or containing components
designated as, hazardous, dangerous, toxic or harmful or which are subject to
regulation by any federal, state or local law, regulation, statute or ordinance.
Lessor shall indemnify, defend, and hold Lessee harmless from and
against any and all loss, damage, claims, penalties, liabilities, suits, costs
and expenses (including, without limitation, reasonable attorneys' fees and also
including, without limitation, cost of remedial action or cleanup), suffered or
incurred by Lessee arising out of or related to the use, disposal,
transportation, generation or sale of Hazardous Substances in or about the
Property or the breach of the above representation, including, without
limitation, any such matter suffered or incurred arising out of the matters
described in the Level I Site Assessment for the "Xxxxx Property" prepared for
Network Real Estate Services (W-6661) by Xxxxxxxxxxx Xxxxx dated February, 1990.
This indemnity shall not apply to Hazardous Substances which are placed on,
under or in the Property by Lessee, its employees, agents, licensees,
contractors or invitees or Hazardous Substances which are placed on, under or in
the Property after the Commencement Date and before Lessee vacates the Premises
(unless placed on, under, or in the Property by Lessor, its employees, agents,
contractors, licensees or invitees), and Lessee shall hold harmless, protect,
indemnify and defend Lessor with respect thereto. Lessee covenants and agrees
with Lessor that Lessee will not permit the use of any Hazardous Substance in
connection with any of its activities on the Property except in strict
accordance with all the requirements of all applicable laws, rules, regulations
and ordinances, and Lessee agrees to hold harmless, protect, indemnify and
defend Lessor with respect to any breach of this covenant and agreement.
54. Arbitration. If Lessor and Lessee cannot mutually agree upon (1) Operating
Expenses pursuant to Section 42(a) hereof, or (2) the actual rentable square
foot area of the Building or any portion thereof pursuant to Section 43(g)
hereof, or (3) the extent to which the rent shall be abated under Section 45
hereof, or (4) the market rental under Section 56 hereof, then the determination
shall be submitted to binding arbitration upon the written demand of either
party delivered to the other party. Such arbitration shall be conducted in
accordance with the commercial arbitration rules or the real estate valuation
rules, as appropriate, of the American Arbitration Association then in effect
and judgment upon the award may be entered in any court having jurisdiction. The
costs and expenses of the arbitration shall be divided equally between Lessor
and Lessee.
55. Lessor's Representations, Warranties and Covenants. Lessor represents,
warrants and covenants to Lessee that: (a) as of the date the Building and the
Leasehold Improvements are substantially completed, all persons and entities
supplying labor, materials and equipment to the Premises, Building or Property
will be paid when due, and there shall be no claims of liens affecting the
Premises, Building or Property; (b) as of the Commencement Date, the Premises,
Building and Property do not and shall not, to the best of Lessor's actual
knowledge after reasonable inquiry, violate any applicable building or zoning
ordinances; (c) as of the Commencement Date, no assessments for public
improvements will have been made against the Premises, Building or Property
which are delinquent; (d) Lessor has good right and full power to execute and
enter into this Lease; (e) as of the commencement of construction Lessor will be
the sole owner in fee of the Property and as of the Commencement Date, Lessor
will be the sole owner in fee of the Building 19 Property; (f) as of the
Commencement Date, the Property and the Building 19 Property will each be a
separate legal lot or parcel and will be properly subdivided, platted,
designated, and zoned so as to permit the uses of the Property and the Building
19 Property contemplated by this Lease. Upon the Property and the Building 19
Property being properly subdivided, the parties agree to substitute for Exhibit
A separate legal descriptions of the Property and the Building 19 Property.
Lessor warrants and represents to Lessee that as of the date hereof Lessor
(either by itself or through an affiliate whose interests are freely assignable
to Lessor) holds an enforceable right to purchase the Property and the Building
19 Property. Lessor agrees that it will keep its right to purchase the Property
and the Building 19 Property in good standing and in full force and effect and
that it will take all necessary steps to close the purchase of the Property and
the Building 19 Property in sufficient time to perform all its obligations
hereunder. On or before the commencement of construction Lessor shall deliver to
Lessee a copy of the recorded deed and the owner's title insurance policy
showing that Lessor is vested in title to the Property and by the Commencement
Date Lessor shall deliver to Lessee a copy of the recorded deed and the owner's
title insurance policy showing that Lessor is vested in title to the Building 19
Property.
56. Renewal Option. Lessee shall have the option to renew this Lease for an
additional period of 5 years ("Renewal Term") on all the terms and conditions of
this Lease, except that the Basic Rental shall be adjusted to ninety-five
percent (95%) of the then current market rent, but in no event less than $0.92
per square foot of the Premises. In determining market rent, the rental value
for tenant improvements that are installed and paid for by Lessee or that
installed by Lessor and paid for by Lessee shall not be included. In order to
exercise its option to renew, Lessee shall deliver to Lessor written notice of
its election to renew at least 180 days prior to the expiration of the initial
term. If Lessor and Lessee cannot agree on market rent within sixty (60) days
after the date of such notice, market rent shall be established by arbitration
pursuant to Section 54 hereof. If at the Commencement Date of the Renewal Term,
the amount of Basic Rental payable during the Renewal Term shall not have been
determined, pending such determination Lessee shall pay to Lessor the Basic
Rental last payable before the Renewal Term commenced.
Prior to commencement of the Renewal Term, Lessor shall, upon Lessee's
written request and at Lessor's cost and expense, repaint the interior walls and
ceilings of the Premises and recarpet the floors of the Premises.
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57. Financial Information. Upon request from Lessor, Lessee agrees to provide
such financial statements and other financial information concerning Lessee as
may be reasonably required by any institutional lender to whom Lessor is
applying for financing on the Property.
58. Construction of Rider. If there is any conflict or discrepancy between the
provisions of this Rider and the provisions of the printed lease form to which
this Rider is attached, the provisions of this Rider shall prevail.
59. Submission of Lease. Lessor and Lessee agree that this Lease shall not bind
Lessor and Lessee until (a) Lessor has executed, acknowledge, and delivered
originals of this Lease to Lessee, and (b) Lessee has duly executed and
delivered one of such of originals to Lessor. The foregoing notwithstanding,
this Lease shall be voidable by written notice from either party if the events
described in items (a), and (b) of this Section do not occur on or before May
21, 1991.
60. Assignment and Subletting. Supplementing Section 20 hereof, any assignment
or transfer of this Lease and any encumbrance or subletting in whole or in part
of the Premises by Lessee by operation of law or otherwise shall not be
permitted without Lessor's prior written consent, which shall not be
unreasonably withheld, conditioned, or delayed. If Lessee requests that Lessor
consent to any assignment, transfer, encumbrance or subletting of all or any
part of the Premises, Lessee shall pay Lessor's reasonable attorneys' fees
incurred in connection with such request, not to exceed $500 for each request.
Fifty percent (50%) of the amount by which any rental or other compensation or
consideration payable to Lessee with respect to any such assignment or
subletting exceeds (after deducting the reasonable out of pocket costs incurred
by Lessee in effecting such assignment or subletting including, without
limitation, commission, alteration costs, and legal fees) the Basic Rental and
Additional Rental payable to Lessor under this Lease (with respect to the
portion of the Premises which is sublet or assigned) shall be payable to Lessor
and shall be deemed to have increased the Basic Rental due hereunder until the
expiration of the sublease.
The restrictions on transfer of stock set out in Section 20 hereof shall
not apply to corporations, the stock of which is traded through an exchange or
over-the-counter. Anything contained herein to the contrary notwithstanding,
Lessor hereby consents to an assignment of this Lease or subletting of all or
part of the Premises to: (a) the parent of Lessee or the parent of such parent
or to a wholly owned subsidiary of Lessee or of such parent or the parent of
such parent; (b) any corporation in whom or with which Lessee may be merged or
consolidated, provided that the net worth of the resulting corporation is at
least equal to the greater of (1) the net worth of Lessee on the date hereof, or
(2) the net worth of Lessee immediately prior to such merger or consolidation;
or (c) any entity to whom Lessee sells all or substantially all of its assets,
provided that such entity expressly assumes all Lessee's obligations hereunder.
No assignment or subletting shall relieve Lessee of any of its
obligations under this Lease and Lessee shall continue to be primarily liable
therefor.
END OF RIDER
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