LEASE
LEASE, dated November 5, 1997, between THE QUADRANT CORPORATION, a
Washington corporation ("Landlord"), and ADVANCED DIGITAL INFORMATION
CORPORATION, a Washington corporation, ("Tenant").
1. BASIC LEASE TERMS. This Section sets forth certain basic terms of
this Lease for reference purposes. This Section is to be read in
conjunction with the other provisions of this Lease; provided, however, to
the extent of any inconsistency between this Section and the other
provisions of this Lease, this Section shall control.
LEASED PREMISES (See Section 2)
Business Park Quadrant Willows
Corporate Center
Building Name Building A
Address 00000 Xxxxxxx Xxxx
Xxxxxxx XX 00000
Rentable Sq. Ft. ("RSF") Approx. 64,780 RSF
RENT; PREPAID RENT; SECURITY DEPOSIT
(See Sections 5 and 6)
Base Monthly Rent
Mo. 1 - 36: $79,032/Mo.
($14.64/RSF/year)
Mo. 37 - 72: $86,157/Mo.
($15.96/RSF/year) Mo. 73 - 120:
$93,877/Mo.
($17.39/RSF/year)
Security Deposit $79,032
Prepaid Rent $ -0 -
TERM (See Section 3)
Commencement Date 4/1/98
Rent Commencement Date 4/1/98
Expiration Date 3/31/2008
Length of Term 120 months
Extension Options See Section 1A.2
PERMITTED USE (See Section 7)
Office, laboratory, light manufacturing, and repair and maintenance of
electronic products, sales activities directly related thereto and such
other lawful uses permitted by and in compliance with applicable
governmental regulations
OPERATING EXPENSES (See Section 8)
Tenant's Share 100%
Additional Rent Estimated to be
$30,500/Month
($5.65/RSF/year) until first
annual adjustment
PARKING (See Section 24) 195 stalls
CC&R'S (See Sections 8 and 22)
Declaration of Covenants, Conditions, Easements & Restrictions Applicable to
Quadrant Willows Corporate Center
BROKERS (See Section 36)
For Tenant CB Commercial
For Landlord CB Commercial
ADDRESSES FOR NOTICES (See Section 29)
Landlord:
The Quadrant Corporation
Xxxxxxxx Xxxxx, Xxxxx 000
XX 0xx Xxxxxx at 000xx Xxx. XX
Xxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxx Xxxxxxxx
Tenant:
Advanced Digital Information Corporation
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Rock
Tel: 000-000-0000
Fax: 000-000-0000
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1A. SPECIAL LEASE TERMS. The following additional Lease terms shall
apply. To the extent of any inconsistency between this Section 1A and the other
provisions of this Lease, this Section 1A shall control.
1A.1 CONSTRUCTION OF PREMISES. The Premises are to be constructed
pursuant to the terms and conditions of the Work Letter of even date
herewith attached as EXHIBIT B hereto (the "Work Letter"), together with
such additional written understandings and agreements as may be mutually
entered into concerning the construction of the Premises. (The Work Letter
and all such additional understandings and agreements regarding the
construction of the Premises shall be collectively referred to as the "Work
Documents").
1A.1.1 MEASUREMENT. The [RSF] contained in the Premises has been
determined under this Lease to be 64,780 S. F. [RSF] based upon a
measurement equal to the "Construction Area" (for a single-tenant
building), as defined in the Building Owners and Managers Association
International (BOMA) American National Standard Method for Measuring
Floor Area in Office Buildings, as approved June 7, 1996, by reference
to the Building Shell Construction Documents as defined in the Work
Letter, which measurement Landlord and Tenant accept, approve and
agree. Landlord and Tenant further acknowledge and agree that the
calculation of Base Monthly Rent on a per [RSF] basis is for
convenience of calculation purposes only in order to determine the
Base Monthly Rent. Any actual measurement of the square footage or
rentable square footage of the Premises and Building shall not be
relevant to or control the calculation of Base Monthly Rent.
1A.1.2 DELIVERY OF POSSESSION. Except as provided in the Work Letter,
if Landlord, for any reason whatsoever, cannot deliver possession of
the Premises to the Tenant at the Scheduled Commencement Date, this
Lease shall not be void or voidable, nor shall Landlord be liable to
Tenant for any loss or damage resulting therefrom, except as provided
in the Work Letter. Delays which may occur in achieving Substantial
Completion of construction of the Building and Premises shall be
addressed as set forth in the Work Letter; and Landlord and Tenant
understand and agree that such delays may result in extension of the
Scheduled Commencement Date as set forth in the Work Letter.
1A.2 OPTIONS TO EXTEND TERM.
1A.2.1 Tenant shall have two successive options to extend the
Term of this Lease for an additional three years. Each such option
may be exercised by Tenant only by written notice of exercise to
Landlord no earlier than 18 months and no later than 12 months prior
to the expiration of the then-effective Term.
1A.2.2 Upon such exercise, the parties shall be obligated under
all the terms and conditions of this Lease through the extended Term,
except that Monthly Base Rent during the extension of the Term shall
be equal to the higher of (i) the Monthly Base Rent in the final month
of the then-effective Term or (ii) 95% of the fair market rent for the
Premises as of 90 days after Tenant's notice of exercise.
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1A.2.3 Within 20 days of Tenant's notice of exercise, Landlord
shall propose a Base Monthly Rent for the extended Term. The parties
shall negotiate in good faith, but if they are unable to agree upon
such Base Monthly Rent by 30 days after the delivery of Landlord's
proposal, then either party may elect to cause such Base Monthly Rent
to be determined by reference to the appraised fair market rent. Such
election shall be made by such party by notice to the other party,
including in such notice the designation of an appraiser. The other
party may accept such appraiser or designate another appraiser within
10 days of such notice. If it does not designate another appraiser in
such period, it shall be deemed to have accepted the first appraiser.
If a second appraiser is designated, the two appraisers shall promptly
appoint a third appraiser.
1A.2.4 Each appraiser shall determine the fair market rent for
the Premises for the extended Term by reference to all factors deemed
appropriate in his or her professional opinion, and notify the parties
within 30 days of the date of appointment of the last appraiser of
such fair market rent. The Base Monthly Rent for the extended Term
shall be calculated as provided in Section 1.A.2.1 by reference to the
fair market monthly rent determined by the single appraiser or, if
there are three appraisers, the mean average of the two closest fair
market monthly rents.
1A.2.5 All appraisers under this appraisal provision shall be
independent certified professional appraisers with at least five
years' experience appraising office properties/business park complexes
in the Cities of Redmond and Bellevue. If there are three appraisers,
each party shall pay for the cost of its designated appraiser and 50%
of the cost of the third appraiser. If there is only one appraiser,
each party shall pay 50% of the cost of such appraiser.
1A.2.6 Tenant may not exercise its option to renew the Term at
any time in which it is in Default under this Lease. If Tenant
becomes in Default under this Lease after exercise of its option to
extend the Term but before the commencement of the extended Term,
Landlord may, in addition to its other remedies under this Lease,
elect to terminate such extension by notice in writing to Tenant,
whereupon the Term shall expire without any such extension.
1A.3 SUBLEASE; ASSIGNMENT. Tenant will be given the right to
sublease or assign any or all of the leased premises so long as Tenant
remains liable for the lease. Landlord's consent to any proposed sublease
or assignment of all or any part of the Premises shall not be unreasonably
withheld; provided, however, that Landlord's rejection of any proposed
subtenant or assignee based upon Landlord's determination, in the exercise
of its sole discretion, that use of the Premises by such proposed subtenant
or assignee is inconsistent or incompatible with the uses then allowed in
the Business Park shall not be deemed to be an unreasonable withholding of
Landlord's consent.
1A.4 SIGNAGE. Exterior signage shall be provided by Landlord
identifying Tenant at the main entrance on the west side of the Building;
and Business Park directory signage shall be provided by Landlord (or by
the Owner' Association under the CC&R's) identifying Tenant at the entrance
to the Business Park; provided, however, maintenance of such signage shall
constitute an Operating Expense. At Tenant's expense, Tenant shall have
the right to install an identifying signage (with no greater than 30 inch
high letters) on the east elevation of the Building visible to Willows
Road; and exterior identification signage on the west side of the Building.
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1.A.5 PARKING. The covered parking spaces contained within the
Building shall be exclusively available to Tenant and shall not be
available for use in common with other tenants, owners or occupants of the
Business Park.
1.A.6 UTILITIES. At Tenant's request, Tenant may be billed directly
by utility providers for some or all of utility services provided to the
Building and Premises. In such event those utility expenses will not be
considered as Operating Expenses or Additional Rent, however, if Tenant
fails to timely pay for such utility services, Landlord shall have the
right to pay such utility expenses on behalf of Tenant and Tenant shall
reimburse Landlord as Additional Rent for such payment within five (5) days
of Landlord's demand. In addition, if Tenant fails to timely pay any
utility expenses, Tenant shall forfeit at Landlord's option the right to
pay utility expenses through direct billing and utility expenses shall then
be included as Operating Expenses.
1.A.7 RETURN OF SECURITY DEPOSIT. If Tenant is not in Default on the
first day of Month 61 of the Term, then the Security Deposit shall either
by returned to Tenant within five business days of notice of its election,
or shall be applied to the Rent due for Month 62 of the Term, at Tenant's
option.
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2. PREMISES. Landlord agrees to lease to Tenant and Tenant agrees to
lease from Landlord the Premises described on EXHIBIT A-1 and consisting of
approximately the RSF designated in Section 1. The Premises constitute the
entirety of the Building, located on the real property described on EXHIBIT A-2
( "Property"). The Premises, Building, and Property are part of a business park
described on EXHIBIT A-3 ("Business Park").
3. TERM.
3.1 The term of this Lease ("Term") shall commence on the
Commencement Date set forth in Section 1, subject to Section 4.
3.2 The Term shall expire on the Expiration Date set forth in
Section 1, unless sooner terminated or extended as provided in this Lease.
4. CONSTRUCTION OF PREMISES; EARLY POSSESSION; DELAYED DELIVERY OF
POSSESSION.
4.1 Any improvements to or construction on the Premises shall be
carried out in accordance with the Work Documents.
4.2 If Landlord permits Tenant to occupy the Premises prior to the
Commencement Date set forth in Section 1, the Commencement Date shall be
such date of occupancy. Tenant's occupancy prior to the originally
scheduled Commencement Date shall be subject to all the provisions of this
Lease and shall not advance the Expiration Date.
4.3 If Landlord for any reason cannot deliver possession of the
Premises to Tenant at the Commencement Date, (i) the Commencement Date
shall be the date on which possession of the Premises is delivered to
Tenant, (ii) this Lease shall not be void or voidable, nor shall Landlord
be liable to Tenant for any loss or damage resulting therefrom, (iii) the
Rent Commencement Date shall be delayed to the same extent as the delay in
the Commencement Date, except as provided in Section 4.4, (iv) the
Expiration Date shall be adjusted so that the length of the Lease Term
remains as provided in Section 1, and (v) Landlord and Tenant shall execute
an amendment to this Lease setting forth the adjusted Commencement Date and
Expiration Date.
4.4 If Tenant causes any delay in Landlord's completion of the
Premises, thereby delaying Tenant's occupancy of the Premises beyond the
Commencement Date set forth in Section 1, then Landlord may at its option
require Tenant to commence payment of Rent on the Rent Commencement Date
set forth in Section 1 notwithstanding such delay in delivery of
possession.
5. RENT.
5.1 Tenant shall pay to Landlord the Base Monthly Rent specified in
Section 1 and the Additional Rent as set forth in Section 8 and elsewhere
in this Lease (the Base Monthly Rent and the Additional Rent are
collectively referred to as "Rent"). Rent shall be paid in advance, on or
before the first day of each calendar month of the Lease Term.
5.2 Rent shall be paid without prior notice, demand, set off,
counterclaim, deduction or defense and, except as otherwise expressly
provided in this Lease, without abatement or suspension.
5.3 Payment of Rent shall begin on the Rent Commencement Date set
forth in Section 1, subject to Section 4. Rent for any period during the
Lease term that is for less than one month shall be prorated for the actual
number of days in such period.
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5.4 All Rent shall be paid to Landlord at the address for notices
set forth in Section 1, in lawful money of the United States of America, or
to such other person or at such other place as Landlord may from time to
time designate in writing.
6. PREPAID RENT AND SECURITY DEPOSIT.
6.1 Upon execution of this Lease, Tenant shall pay to Landlord the
Prepaid Rent and Security Deposit set forth in Section 1 (the Prepaid Rent
and the Security Deposit being collectively referred to as the "Deposit").
6.2 Landlord shall have the right to all or any part of the Deposit
to cure any Default by Tenant under this Lease or to compensate Landlord
for any damage sustained by it resulting from such Default. In the event
of any such application of the Deposit, Tenant shall, on demand,
immediately pay to Landlord the amount necessary to replenish the Deposit
to the amount set forth in Section 1.
6.3 If Tenant is not in Default at the expiration or termination of
this Lease, Landlord shall return the remaining Security Deposit to Tenant,
less any amounts necessary to return the Premises to their original
condition, reasonable wear and tear excepted.
6.4 In the event this Lease is terminated before the end of the
Term for any reason, any Rent paid for any period after the date of such
termination shall be treated as an addition to the Security Deposit.
6.5 Landlord's obligations with respect to the Security Deposit are
those of a debtor and not a trustee. Landlord may maintain the security
deposit separate from Landlord's general funds or may commingle the
Security Deposit with other funds of Landlord. No interest shall accrue
for Tenant on the Deposit.
7. USE OF PREMISES.
7.1 Tenant shall use the Premises only for the purpose set forth in
Section 1. Tenant acknowledges that it has determined to its satisfaction
that the Premises can be used for those purposes. Tenant waives any right
to terminate this Lease in the event the Premises cannot be used for such
purposes during the Term. The Premises may not be used for any other
purpose without Landlord's written consent.
7.2 Tenant shall not do or permit anything to be done in or about
the Premises or bring or keep anything therein which will in any way
increase the cost of or affect any fire or other insurance upon the
Building or any part thereof or any of its contents, or cause cancellation
of any insurance policy covering the Building or any part thereof or any of
its contents.
7.3 Tenant shall not do or permit anything to be done in or about
the Premises that will obstruct or interfere with the rights of other
tenants or occupants of the Building or Business Park or injure them or
their property, or use or allow the Premises to be used for any unlawful
purpose or in any way constituting a nuisance.
8. ADDITIONAL RENT FOR OPERATING EXPENSES.
8.1 TENANT PAYMENT. Tenant shall pay, as Additional Rent, all
Operating Expenses. Operating Expenses shall be payable on or before the
first day of the first full calendar month of the Term or upon the
Commencement Date, whichever first occurs, and
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on the first day of each successive calendar month thereafter during the
Term in the same manner as Base Monthly Rent.
8.2 ACCOUNTING PERIOD. An accounting period is a calendar year;
except the first accounting period shall commence on the Commencement Date
and end on December 31 of the same calendar year. The last accounting
period shall end on the Expiration Date of the Lease Term. Annualized
Operating Expenses shall be prorated on a per diem basis for any accounting
period that is less than a full calendar year.
8.3 ADJUSTMENT. Landlord can adjust the Operating Expenses at the
commencement of each new accounting period throughout the Lease term,
whereupon Tenant's Additional Rent shall be adjusted accordingly. Prior to
each January 1 of the Term, Landlord shall furnish Tenant a written
statement of the estimated monthly Operating Expenses for the coming
calendar year. The estimated monthly Operating Expenses for the period
before the first January 1 after the Commencement Date will be provided by
Landlord to Tenant no later than 90 days prior to the Commencement Date.
Landlord may, by written notice to Tenant, revise its estimate of Operating
Expenses from time to time.
8.4 RECONCILIATION. Within 90 days after each January 1 during the
Term, or as soon thereafter as practicable, Landlord shall deliver to
Tenant a written statement setting forth the actual Operating Expenses
during the preceding calendar year (or portion of such calendar year after
the Commencement Date). To the extent actual Operating Expenses exceeded
the estimated Operating Expenses paid by Tenant, Tenant shall pay
Additional Rent to Landlord within 30 days after receipt of such statement
by Tenant. To the extent actual Operating Expenses were less than the
estimated Operating Expenses paid by Tenant, Tenant shall receive a credit
against its next payable Rent or such amount shall otherwise be refunded to
Tenant as Landlord determines in its sole discretion.
8.5 DEFINITIONS. "Operating Expenses" means all expenses and
charges incurred by Landlord in the operation of the Building, Property and
Common Areas (as defined in the CC&R's), as a first-class facility,
including without limitation the following costs by way of illustration:
(i) all real property taxes, assessments and other general or special
charges levied during the Term by any public, governmental or
quasi-governmental authority against the real or personal property included
in the Building or the Property, including without limitation Landlord's
personal property used in the maintenance, repair or operation of the
Building or the Property, or any other tax on the leasing of the Building
or on the rents from the Building (other than any federal, state or local
income or franchise tax); (ii) any and all assessments, fees, charges and
impositions Landlord must pay for the Building, Property or Common Areas
pursuant to the CC&R's, transportation or any other improvement monitoring
or management plans, or any other covenant, condition or reciprocal
easement agreements; (iii) electricity, gas and similar energy sources,
refuse collection, water, sewer and other utilities' services for the
Building and the Property; (iv) all licenses, permits and inspection fees,
property management fees paid to independent or affiliated contractors or
to Landlord, and legal, accounting and other professional expenses; (v) all
costs and expenses relating to the Premises Maintenance Obligations (as
defined in Section 9.1), including reasonable reserves; (vi) all costs and
expenses relating to the Premises Services Obligations (as defined in
Section 9.2), including reasonable reserves; (vii) all costs of
improvements or alterations to the Building and Property required by Laws,
or to save labor, or to reduce Operating Expenses; (viii) all premiums and
deductibles for liability, property damage, casualty, automobile, rental
loss, compensation or other insurance maintained by Landlord for the
Building or Property; (ix) the cost (amortized over such reasonable period
of time as Landlord shall determine together with market rate interest as
reasonably determined by Landlord on the unamortized balance ) of any
capital improvements made to the Property or Building by Landlord for the
replacement of any
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Building' equipment needed to operate the Building at the same quality
levels as prior to the replacement;(x) costs incurred in the management of
the Building and Property (including supplies, wages and salaries of
employees used in the management, operation and maintenance thereof and
payroll taxes and similar governmental charges with respect thereto, and
Building management office rental, if any; (xi) any other expense or charge
whether or not described above that in accordance with generally accepted
accounting and management practices is properly an expense of maintaining,
operating or repairing the Building or Property. Operating Expenses shall
not include depreciation on the Building or equipment therein, Landlord's
executive salaries, real estate brokers' commissions, and costs or expenses
for which Landlord is reimbursed or indemnified, by an insurer or
condemnor. Landlord shall not collect more than 100% of Operating Expenses
and shall not recover any item of cost more than once.
8.6 TENANT OBLIGATION. Landlord shall have the same rights with
respect to Tenant's nonpayment of Operating Expenses as required under this
Lease as it has with respect to any other nonpayment of Rent under this
Lease.
9. PREMISES MAINTENANCE AND SERVICES OBLIGATIONS.
9.1 PREMISES MAINTENANCE OBLIGATIONS. Landlord shall cause to be
performed all repairs, maintenance, replacements, resurfacing and
monitoring to the entirety of the Premises, Building and Property, and
every part thereof, including, without limitation, the elevator equipment
and system, the signs, windows, doors, skylights, landscaping, irrigation
system, parking lot, patios, decks, service areas, exterior and interior
finishes and painting, roof (so long as such roof repair and maintenance is
not a Structural Repair as defined in Section 10.1), heating, ventilating
and air conditioning systems, cleaning and refuse removal systems, and
similar items, including reasonable reserves, (but excluding the telephone,
data, cable television, satellite transmission, computer and security
systems of the Premises), and any other reasonable and necessary
maintenance, repair and replacement (but excluding Tenant's trade fixtures)
required to keep the Premises, Building and Property in first class order,
condition and repair and in compliance with all service and maintenance
requirements imposed by any warranty, service or maintenance contract in
effect for any portion of the Premises, Building or Property (collectively,
"Premises Maintenance Obligations").
9.2 PREMISES SERVICES OBLIGATIONS. Landlord shall arrange for and
cause to be provided, all services to the Premises, Building and Property
of a continuing nature, including without limitation, janitorial, landscape
and irrigation system maintenance, parking lot sweeping and maintenance,
window washing, rubbish removal, maintenance of the heating, ventilating,
and air conditioning systems, property management services and other
similar desired and necessary services (but excluding telephone, cable
television, data transmission, satellite transmission, and security system
services or computer cabling or wiring) (collectively "Premises Services
Obligations").
9.3 OPERATING EXPENSE. In the manner and to the extent provided in
Section 8, any and all costs arising from the performance of the Premises
Maintenance and Services Obligations shall be paid in full by Tenant as
Additional Rent and Operating Expenses under this Lease.
9.4 LANDLORD DEFAULT. Landlord shall perform the Premises
Maintenance and Service Obligations diligently and promptly as
circumstances warrant, but so long as Landlord acts with such diligence,
Landlord shall not be liable for any failure to perform the Premises
Maintenance and Services Obligations unless such failure shall persist for
the period beyond that cure period stated in Section 18.2 after written
notice of the failure to
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perform such Premises Maintenance and Services Obligations is given to
Landlord by Tenant.
9.5 SURRENDER. Tenant shall surrender the Premises to Landlord
upon the expiration or sooner termination of this Lease, in the same
condition as when received, excluding ordinary wear and tear. Upon
expiration or termination of this Lease, any and all damage done to the
Premises as a result of Tenant's removal of any personal property, fixtures
or furnishings shall be repaired and the Premises restored, at Tenant's
expense.
9.6 NO OBLIGATION TO ALTER. Except as specifically provided
elsewhere in this Lease, Landlord shall have no obligation whatsoever to
alter, remodel, improve, repair, decorate, or paint the Premises or any
part thereof. Tenant affirms that Landlord has made no representations to
Tenant about the condition of the Premises or the Building, except as
specifically herein set forth.
9.7 TENANT WAIVER. Tenant waives the right to make repairs at
Landlord's expense under any law, statute, or ordinance now or hereafter in
effect.
10. STRUCTURAL AND UTILITY MAINTENANCE AND REPAIR RESPONSIBILITY.
10.1 STRUCTURAL REPAIRS. Subject to the provisions of Section 15,
Landlord shall, at Landlord's expense, maintain, repair and replace the
roof structure, all exterior and bearing walls, the floor slab and the
foundation of the Building ("Structural Repairs"). Landlord shall give
reasonable advance notice to Tenant of such repairs to the extent practical
and feasible.
10.2 UTILITIES REPAIRS. Subject to the provisions of Section 15,
Landlord shall, at Landlord's expense, if required, or cause the utility
purveyor to maintain, repair and replace the underground electrical, water,
sewer and plumbing utility systems serving the Buildings insofar as such
utility systems are located outside the Building between the public right
of way and the Building , and the conduits and pipes or wiring located
therein and forming a part thereof, ("Utility Systems Repairs").
10.3 TENANT'S RESPONSIBILITY. To the extent that such Structural
Repairs or Utility Systems Repairs are necessitated in part or in whole by
the act, neglect, fault, or omission of any duty by the Tenant, its agents,
servants, employees, or invitees, Tenant shall pay to Landlord the
reasonable costs of such Structural Repairs or Utility Systems Repairs,
within thirty (30) days after Landlord's submission of a reasonably
detailed invoice for the same, but only to the extent such costs were
necessitated by the act, neglect, fault or omission of any duty by the
Tenant. Landlord shall not be liable for any failure to make any such
Structural Repairs or Utility Systems Repairs, unless such failure shall
persist after Landlord's receipt of written notice from Tenant and beyond
the cure periods set forth in Section 18.2.
11. UTILITIES AND SERVICES.
11.1 LANDLORD RESPONSIBILITY. Landlord shall arrange for and cause
to be provided, at Tenant's expense, heat, light, water, electricity, gas
and any and all other utility services, excluding, however,
telecommunicaions and data communications services, telephone service,
cable television service, satellite transmission service, if any, or
computer cabling or wiring.
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11.2 TENANT RESPONSIBILITY. Tenant shall pay, as Additional Rent,
prior to delinquency, for heat, light, water, electricity, gas and any and
all other utility services supplied to the Premises and will pay any
required deposits therefor.
11.3 FAILURE OF SERVICES. In the event of any failure or
interruption of such utilities and services, Landlord shall diligently
attempt to resume service promptly. Tenant shall not be entitled to any
abatement or reduction of Rent by reason of any failure or interruption of
utilities or services, no eviction of Tenant shall result from any such
failure or interruption, and Tenant shall not be relieved from the
performance of any obligation in this Lease because of such failure or
interruption.
12. LIMITS ON LANDLORD'S LIABILITY. Landlord's liability in respect of
its obligations under Sections 9, 10 and 11 to repair and maintain portions of
the Premises and Building and to provide utilities and services (collectively,
"Repair and Service Obligations") is subject to the following limitations:
12.1 CIRCUMSTANCES BEYOND LANDLORD'S CONTROL. Landlord shall not be
liable for any failure of Repair and Service Obligations when such failure
is caused by (i) strikes, lockouts or other labor disturbance or labor
dispute of any character, (ii) governmental regulation, moratorium or other
governmental action, (iii) inability despite the exercise of reasonable
diligence to obtain electricity, water or fuel from the providers thereof,
(iv) acts of God or (v) any other cause beyond Landlord's reasonable
control.
12.2 LANDLORD LIABILITY. Subject to Section 12.1, Landlord shall
not be liable for any failure of Repair and Service Obligations, unless
such failure shall persist for an unreasonable time after written notice of
the need of such repairs or maintenance or of the interruption of services
is given to Landlord by Tenant. Landlord shall not be liable for any injury
to or interference with Tenant's business arising from the making of any
repairs, alterations, or improvements in or to any portion of the Building,
the Premises, or the Property, or to fixtures, appurtenances, and equipment
therein, or the failure of Repair and Service Obligations. Without
limiting the generality of this Section 12, in no event shall Landlord have
any liability for consequential damages resulting from any act or omission
of Landlord in respect of its Repair and Service Obligations, even if
Landlord has been advised of the possibility of such consequential damages.
12.3 RENT ABATEMENT. Except as specifically provided in Sections 15
and 16, there shall be no abatement of Rent in any circumstance under this
Lease.
13. ALTERATIONS AND ADDITIONS BY TENANT. With the prior written consent
of Landlord, Tenant may make at its expense additional improvements or
alterations to the Premises. Any repairs or new construction by Tenant shall be
done in conformity with plans and specifications approved by Landlord, by
contractors approved by Landlord (including a requirement for union labor), and
subject to Landlord's reasonable rules and regulations regarding such
construction. All work performed shall be done lien-free in a workmanlike
manner and shall become the property of Landlord. Landlord may require that
Tenant provide to Landlord, at Tenant's expense, a lien and completion bond in
an amount equal to 150% of the estimated cost of any improvements, additions, or
alterations in the Premises. Landlord shall not unreasonably withhold its
consent to Tenant's proposed alterations or improvements if the conditions of
this Section 13 are satisfied. Landlord may require Tenant to remove any
improvements or alterations at the expiration or termination of the Term, such
removal to occur at Tenant's expense; and Tenant shall repair all damage to the
Premises or Building occurring as a result of such removal. In the event Tenant
fails to remove any improvements or alterations as required by Landlord or
repair any damage occurring during such removal, Landlord shall be entitled to
remove any improvements or alterations or make such repairs, at Tenant's
expense, and shall further be entitled to draw upon the Deposit.
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14. INSURANCE; INDEMNITY.
14.1 TENANT WAIVER. Landlord shall not be liable to Tenant, and
Tenant hereby waives all claims against Landlord, for injury or damage to
any person or property in or about the Premises, Building, Property or
Common Areas by or from any cause whatsoever, including without limitation
any acts or omissions of any other tenants, licensees or invitees of the
Building.
14.2 TENANT INDEMNITY. Tenant shall indemnify and defend (using
legal counsel acceptable to Landlord) Landlord and hold Landlord harmless,
from and against any and all loss, cost, damage, liability and expense
(including reasonable attorneys' fees) whatsoever that may arise out of or
in connection with Tenant's occupation, use or improvement of the Premises,
or that of its employees, agents or contractors, or Tenant's breach of its
obligations under this Lease. To the extent necessary to fully indemnify
Landlord from claims made by Tenant or its employees, this indemnity
constitutes a waiver of Tenant's immunity under the Washington Industrial
Insurance Act, RCW Title 51. This indemnity shall survive the expiration
or termination of the Term.
14.3 LANDLORD RESPONSIBILITY. The exculpation, release and
indemnity provisions of Sections 14.1 and 14.2 shall not apply to the
extent the subject claims thereunder were caused by Landlord's gross
negligence or willful misconduct. However, in no event shall Landlord be
liable to Tenant for consequential damages.
14.4 TENANT INSURANCE. Tenant shall procure and maintain throughout
the Term at Tenant's expense, the following insurance:
14.4.1 Comprehensive general public liability insurance,
insuring Tenant against liability arising out of the Lease and the
use, occupancy, or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be in the amount of not
less than $5,000,000 combined single limit for injury to or death of
one or more persons in an occurrence, and for damage to tangible
property (including loss of use) in an occurrence (or in such amount
as Landlord determines in its reasonable discretion). Such policy
shall insure the operations of independent contractors and contractual
liability (covering the indemnity in Section 14.2) and shall: (i) name
Landlord as an additional insured, (ii) provide a waiver of
subrogation endorsements with respect to Landlord, and (iii) provide
that it is primary and noncontributing with any insurance in force or
on behalf of Landlord.
14.4.2 Standard form property insurance insuring against the
perils of fire, extended coverage, vandalism, malicious mischief,
special extended coverage ("All-Risk") and sprinkler leakage. This
insurance policy shall be upon all personal property for which Tenant
is legally liable or that was installed at Tenant's expense, and that
is located in the Building or Premises, including without limitation
all Tenant's furnishings, fixtures, furniture, fittings, and equipment
and all improvements to the Premises installed by Tenant, in an amount
not less than 90% of the full replacement cost thereof. In the event
of a dispute as to the amount of full replacement cost, the decision
of Landlord or any mortgagees of Landlord shall be conclusive. Such
policy shall also include business interruption coverage, covering
direct indirect loss of Tenant's earnings attributable to Tenant's
inability to use fully or obtain access to the Premises or Building,
in an amount as will properly reimburse Tenant. Such policy shall
name Landlord and any mortgagees of Landlord as insured parties, as
their respective interests may appear.
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14.4.3 Xxxxxxx'x Compensation and Employer's Liability
Insurance (as required by state law).
14.4.4 Any other form or forms of insurance as Tenant or
Landlord or any mortgagees of Landlord may reasonably require from
time to time in form, in amounts and for insurance risks against which
a prudent tenant would protect itself.
14.5 POLICIES. All policies of insurance to be obtained by Tenant
hereunder shall be in a form satisfactory to Landlord and shall be issued
by insurance companies holding a General Policyholder Rating of "A" and a
Financial Rating of "X" or better in the most current issue of Best's
Insurance Guide. Tenant shall provide Landlord with certificates of such
insurance. No such policy shall be cancelable or reducible in coverage
except after 30 days' prior written notice to Landlord. Tenant shall,
within ten days prior to the expiration of such policies, furnish Landlord
with renewals or "binders" thereof, or Landlord may order such insurance
and charge the cost thereof to Tenant as Additional Rent.
14.6 LANDLORD'S INSURANCE. Landlord shall maintain liability and
casualty insurance for the Building and Property adequate in Landlord's
judgment to cover (with deductibles deemed appropriate by Landlord) the
risks customarily insured against by owners of properties similar to the
Building.
14.7 PROCEEDS. The proceeds of any insurance policies maintained by
or for the benefit of Landlord shall belong to and be paid over to
Landlord. Any interest or right of Tenant in any such proceeds shall be
subject to Landlord's interest and right in such proceeds.
14.8 WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Tenant and Landlord each waives its entire right of
recovery, claims, actions, or causes of action against the other for loss
or damage to the Premises, Building, or Property or any personal property
of such party therein that is caused by or incident to the perils covered
by normal extended coverage clauses of standard fire insurance policies
carried by the waiving party and in force at the time of damage or loss.
Tenant and Landlord each waives any right of subrogation it may have
against the other party to the extent of recovery under any such insurance,
and shall cause each insurance policy obtained by it to provide that the
insurance company waives all right to recovery by way of subrogation
against the other party in connection with any such loss or damage. If
either Landlord or Tenant is unable to obtain its insurer's permission to
waive any claim against the other party, such party shall promptly notify
the other party of such inability.
14.9 NOTICE OF ACCIDENTS. Tenant shall promptly notify Landlord of
any casualty or accident occurring in or about the Premises.
15. DESTRUCTION.
15.1 If the Premises or the Building is destroyed by fire,
earthquake, or other casualty to the extent that they are untenantable in
whole or in part as reasonably determined by Landlord, then Landlord shall
have the right but not the obligation to proceed with reasonable diligence
to rebuild and restore the Premises or the Building or such part thereof.
15.2 Landlord shall within 30 days after such destruction or injury
notify Tenant whether Landlord intends to rebuild. If Landlord fails to
notify Tenant within such period, then this Lease shall terminate as of the
end of such period.
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15.3 During the period from destruction or damage until restoration
(or termination of this Lease), Rent shall be abated in the same ratio as
that portion of the Premises which Landlord determines is unfit for
occupancy shall bear to the whole Premises. If damage is due to the fault
or neglect of Tenant or its agents, employees, invitees, or licensees,
there shall be no abatement of Rent.
15.4 Landlord shall not be required to repair any injury or damage
by fire or other cause, or to make any repairs or replacements of any
panels, decoration, office fixtures, paintings, floor covering, or any
other improvements to the Premises installed by Tenant. Instead, if
Landlord repairs or rebuilds the Premises under this Section 15, Tenant
shall repair or rebuild such Tenant-installed improvements and other items
of property
15.5 Tenant shall not be entitled to any compensation or damages
from Landlord for loss of the use of the whole or any part of the Premises,
the property of Tenant, or any inconvenience or annoyance occasioned by
such damage, repair, reconstruction, or restoration.
16. CONDEMNATION.
16.1 If all or part of the Premises are taken under power of eminent
domain, or sold under the threat of the exercise of said power, this Lease
shall terminate as to the part so taken as of the date the condemning
authority takes possession.
16.2 If more than 25% of the floor area of Premises is taken by
condemnation, Landlord or Tenant may, by written notice to the other within
ten days after notice of such taking, terminate this Lease as to the
remainder of the Premises as of the date the condemning authority takes
possession.
16.3 If Landlord or Tenant does not so terminate, this Lease shall
remain in effect as to such remainder, except that the Rent shall be
reduced in the proportion that the rentable floor area taken bears to the
original rentable total floor area. However, if circumstances make
abatement based on floor area unreasonable, the Rent shall xxxxx by a
reasonable amount to be determined by Landlord. In the event that neither
Landlord nor Tenant elects to terminate this Lease, Landlord's
responsibility to restore the remainder of the Premises shall be limited to
the amount of any condemnation award allocable to the Premises, as
determined by Landlord.
16.4 Any award for the taking of all or part of the Premises under
the power of eminent domain, including payment made under threat of the
exercise of such power, shall be the property of Landlord, whether made as
compensation for diminution in value of the leasehold or for the taking of
the fee or as severance damages. Tenant shall only be entitled to such
compensation as may be separately awarded or recoverable by Tenant in
Tenant's own right for the loss of or damage to improvements to the
Premises installed by Tenant, Tenant's trade fixtures and removable
personal property. Landlord shall not be liable to Tenant for the loss of
the use of all or any part of the Premises taken by condemnation.
16.5 Landlord shall have the exclusive authority to grant possession
and use to the condemning authority and to negotiate and settle all issues
of just compensation or, in the alternative, to conduct litigation
concerning such issues; provided, however, that Landlord shall not enter
into any settlement of any separate award that may be made to Tenant as
described in Section 16.4 without Tenant's prior approval of such
settlement, which approval shall not be unreasonably withheld.
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17. ASSIGNMENT AND SUBLETTING.
17.1 Tenant shall not assign this Lease, or sublet the Premises or
any part thereof, either by operation of law or otherwise, or permit any
other party to occupy all or any part of the Premises, without first
obtaining the written consent of Landlord. Tenant shall propose such
assignment or sublease by written notice to Landlord, and such notice shall
specify the use of the Premises or such part thereof as contemplated by
such proposed assignee or sublessee and an effective date which shall be
the first day of a calendar month and shall be not less than 60 days after
the date of such notice. This Lease shall not be assignable by operation
of law. Tenant shall further provide to Landlord other information and
creditworthiness materials concerning any proposed assignee or sublessee as
is requested by Landlord.
17.2 If Tenant is a corporation, any transfer of this Lease from
Tenant by merger, consolidation, or liquidation, or any change in the
ownership of or power to vote 50% or more of the outstanding voting stock
of Tenant shall constitute an assignment under this Lease. If Tenant is a
partnership or limited liability company, any change in the identity or
majority ownership of partners or members in Tenant serving as general
partner or manager or owning 50% or more of the outstanding economic
interests in such entity shall constitute an assignment under this Lease.
17.3 In the alternative to consenting to a proposed assignment or
sublease, Landlord shall have the right to recapture the Premises, or
applicable portion thereof. Landlord may exercise such right by notice to
Tenant within 20 days after receipt of Tenant's notice. Such recapture
shall terminate this Lease as to the applicable portion of the Premises
effective on the effective date proposed in Tenant's notice.
17.4 If Landlord elects not to recapture and thereafter elects to
gives its consent to the proposed assignment or sublease, (i) Landlord may
charge Tenant a reasonable sum to reimburse Landlord for legal and
administrative costs incurred in connection with such consent; (ii) in the
event of an assignment or a sublease, Tenant shall remain liable to
Landlord for the performance of all of Tenant's obligations under this
Lease.
17.5 If this Lease is assigned pursuant to the provisions of the
Revised Bankruptcy Act, 11 U.S.C. Section 101 et seq., any and all
consideration paid or payable in connection with such assignment shall be
Landlord's exclusive property and paid or delivered to Landlord, and shall
not constitute the property of tenant or tenant's estate in bankruptcy.
Any person or entity to whom the Lease is assigned pursuant to the Revised
Bankruptcy Act shall be deemed automatically to have assumed all of
Tenant's obligations under this Lease.
17.6 In the event of any sale of the Building or Property, or any
assignment of this Lease by Landlord, Landlord shall be relieved of all
liability under this Lease arising out of any act, occurrence, or omission
occurring after sale or assignment; and the purchaser or assignee at such
sale or assignment or any subsequent sale or assignment of Lease, the
Property, or Building, shall be deemed without any further agreement to
have assumed all of the obligations of the Landlord under this Lease
accruing after the date of such sale or assignment.
17.7 Subject to the provisions of this Section 17, this Lease shall
be binding upon and inure to the benefit of the parties, their heirs,
successors and assigns.
18. DEFAULT.
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18.1 The occurrence of any one or more of the following events shall
constitute a material default and breach of the Lease by Tenant
("Default"):
18.1.1 vacation or abandonment of all or any portion of the
Premises;
18.1.2 failure by Tenant to make any payment required as and
when due, where such failure shall continue after three days' written
notice from Landlord;
18.1.3 failure by Tenant to observe or perform any of the
covenants, conditions, or provisions of this Lease, other than the
making of any payment, where such failure shall continue after 30
days' written notice from Landlord;
18.1.4 the making by Tenant of any general assignment or
general arrangement for the benefit of creditors; (ii) the filing by
or against Tenant of a petition in bankruptcy, including
reorganization or arrangement, unless, in the case of a petition filed
against Tenant, the same is dismissed within 30 days; (iii) the
appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease; (iv) the seizure by any department of
any government or any officer thereof of the business or property of
Tenant; and (v) adjudication that Tenant is bankrupt.
18.2 Tenant shall notify Landlord promptly of any Default by Tenant
(or event or occurrence which, with the passage of time, the giving of
notice, or both, would become a Default) that by its nature is not
necessarily known to Landlord.
18.3 Landlord shall be in default if it fails to observe or perform
any of the covenants, conditions, or provisions of this Lease, where such
failure shall continue after 30 days' written notice from Tenant; provided,
however, that if the nature of Landlord's obligation is such that more than
30 days are required for performance, Landlord shall not be in default if
Landlord commences performance within 30 days after Tenant's notice and
thereafter completes such performance diligently and within a reasonable
time. Tenant shall copy Landlord's lender with any such notice of default,
if Tenant has been provided with the name and address of any such lender.
18.4 In no event shall a default by Landlord under this Lease give
rise to any right of Tenant to terminate this Lease or withhold or offset
the payment of Base Monthly Rent or Additional Rent. The obligations of
Tenant to pay Base Monthly Rent and Additional Rent shall continue
unaffected in all events unless suspended or terminated pursuant to an
express provision of this Lease.
19. REMEDIES IN DEFAULT.
19.1 In the event of any Default by Tenant, Landlord may, at any
time without waiving or limiting any other right or remedy, do any one or
more of the following: (i) re-enter and take possession of the Premises,
(ii) pursue any remedy allowed by law or equity, and/or (iii) terminate
this Lease.
19.2 Whether Landlord has elected to terminate this Lease or not,
Tenant agrees to pay Landlord the cost of recovering possession of the
Premises, the expenses of reletting, and any other costs or damages arising
out of Tenant's Default, including without limitation the costs of removing
persons and property from the Premises, the costs of preparing or altering
the Premises for reletting, broker's commissions, and attorneys' fees.
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19.3 No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 19, or acceptance of Tenant's keys to or surrender
of the Premises shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant.
19.4 Notwithstanding any reentry or termination, the liability of
Tenant for the Rent shall continue for the balance of the Term, and Tenant
shall make good to Landlord any deficiency arising from reletting the
Premises at a lesser rent than the Rent provided for in this Lease. Tenant
shall pay such deficiency each month as the amount thereof is ascertained
by Landlord.
20. ACCESS. Tenant shall permit Landlord to enter the Premises at all
reasonable times for the purpose of inspecting, altering, and repairing the
Premises and the Building and ascertaining compliance with the provisions of
this Lease by Tenant. The existence or exercise of such right of access shall
not be construed as imposing any obligation on Landlord to inspect, discover or
correct or repair any condition in the Premises or the Building. Landlord may
also show the Premises to prospective purchasers or tenants at reasonable times,
provided that Landlord shall not materially interfere with Tenant's business
operation.
21. HOLD-OVER TENANCY. If without execution of a new Lease or written
extension Tenant shall hold over after the expiration or termination of the
Term, with Landlord's written consent, Tenant shall be deemed to be occupying
the Premises as a Tenant from month to month, which tenancy may be terminated as
provided by law, unless the parties agree otherwise at the time of Landlord's
consent. If Tenant shall hold over after expiration or termination of the Term
without Landlord's written consent, the Base Monthly Rent payable shall be 200%
of the Base Monthly Rent payable in the last month prior to expiration or
termination of the Term, and Tenant shall continue to pay Additional Rent.
During any such tenancy, Tenant shall continue to be bound by all of the terms,
covenants, and conditions of this Lease, insofar as applicable.
22. COMPLIANCE WITH LAWS. Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict with
any applicable law, statute, ordinance, or governmental rule or regulation and
the CC&R's and any other restrictive covenants and obligations created by
private contracts which affect the use and operation of the Premises, Building,
Common Areas or Business Park, now or hereafter in force ("Laws"). Tenant shall
at its sole cost and expense promptly comply with all Laws, including without
limitation the Americans with Disabilities Act, and with the requirements of any
board of fire insurance underwriters, Insurance Service Office, or other similar
bodies now or hereafter constituted, relating to, or affecting the use or
occupancy of the Premises. The judgment of any court of competent jurisdiction,
or the admission of Tenant in any action, whether Landlord be a party thereto or
not, that Tenant has violated any Laws, shall be conclusive of the fact as
between Landlord and Tenant.
23. RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with the rules and regulations that Landlord shall from time to time promulgate.
Landlord reserves the right from time to time to make all reasonable
modifications to such rules and regulations. Additions and modifications to
rules and regulations shall be binding on Tenant upon delivery of a copy of them
to Tenant. Landlord shall not be responsible to Tenant for the nonperformance
of any rules or regulations by any other tenants or occupants of the Building.
24. PARKING. Tenant shall have the right to use, on a first-come, first
served basis, in common with other tenants and occupants of the Building and
Business Park, in compliance with all Laws, up to the number of parking stalls
specified in Section 1, as designated by Landlord and available for use by all
tenants of the Business Park, their guests and invitees, located within the
Building or the Business Park (which designated parking facilities Landlord may
change at any time
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and from time to time in its sole discretion), subject to the rules and
regulations and any charges that may be established or altered for such parking
facilities from time to time.
25. ESTOPPEL CERTIFICATES. Tenant shall execute, within ten business days
following Landlord's request, a certificate in such reasonable form as may be
required by Landlord or a prospective purchaser, mortgagee or trust deed
beneficiary, or Landlord's successor after a sale or foreclosure, certifying:
(i) the Commencement Date of this Lease, (ii) that the Lease is unmodified and
in full force and effect, (or if there have been modifications hereto, that this
Lease is in full force and effect, and stating the date and nature of such
modifications); (iii) that there have been no current defaults under this Lease
by either Landlord or Tenant except as specified in Tenant's statement, (iv) the
dates to which the Base Monthly Rent, Additional Rent and other charges have
been paid, and (v) any other information reasonably requested by the requesting
party. Such certificate may be relied upon by Landlord and/or such other
requesting party. Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant that this Lease is in full force and effect,
without modification except to the extent represented by Landlord, that there
are no uncured defaults in Landlord's performance under this Lease, and that not
more than one month's Rent has been paid in advance. Tenant's failure to
deliver said statement within ten business days of request, shall constitute
Tenant's Default.
26. SUBORDINATION. Tenant agrees that this Lease shall be subordinate to
the lien of any mortgage, deeds of trust, or ground leases now or hereafter
placed against the Property or Building, and to all renewals and modifications,
supplements, consolidations, and extensions thereof. Notwithstanding the
foregoing, Landlord reserves the right, however, to subordinate or cause to be
subordinated any such mortgage, deed of trust or ground lease to this Lease.
Upon a foreclosure or conveyance in lieu of foreclosure under such mortgage or
deed of trust, or a termination of such ground lease, and a demand by Landlord's
successor, Tenant shall attorn to and recognize such successor as Landlord under
this Lease. Tenant shall execute and deliver on request and in the form
requested by Landlord, any instruments reasonably necessary or appropriate to
evidence, effect or confirm such subordination. Should Tenant fail to sign and
return any such documents within ten business days of request, Tenant shall be
in Default. Tenant hereby irrevocably appoints Landlord as attorney-in-fact of
Tenant to execute, deliver and record any such document in the name and on
behalf of Tenant.
27. REMOVAL OF PROPERTY. On expiration or other termination of this
Lease, Tenant shall remove (i) all personal property of Tenant on the Premises,
including without limitation all Tenant's furnishings, fixtures, furniture,
fittings, cabling, wiring and equipment; (ii) all improvements to the Premises
installed by or at the expense of Tenant other than such improvements as have
become the property of Landlord under Section 13; and (iii) at Landlord's
request, all non-standard or specialty improvements made to the Premises by
Landlord or Tenant. Tenant shall repair or reimburse Landlord for the cost of
repairing any damage to the Premises resulting from the installation or removal
of such property of Tenant. All property of Tenant remaining on the Premises
after reentry or termination of this Lease shall conclusively be deemed
abandoned and may be removed by Landlord. Landlord may store such property of
Tenant in any place selected by Landlord, including but not limited to a public
warehouse, at the expense and risk of the owner thereof, with the right to sell
such stored property of Tenant without notice to Tenant. The proceeds of such
sale shall be applied first to the cost of such sale, second to the payment of
the cost of removal and storage, if any, and third to the payment of any other
amounts that may then be due from Tenant to Landlord under this Lease, and any
balance shall be paid to Tenant.
28. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
personal property taxes payable with respect to all property of Tenant located
on the Premises or the Building and promptly upon request of Landlord shall
provide satisfactory evidence of such
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payment. "Personal property taxes" under this Section 28 shall include all
property taxes assessed against the property of Tenant, whether assessed as real
or personal property.
29. NOTICES. All notices under this Lease shall be in writing. Notices
shall be effective (i) when mailed by certified mail, return receipt requested
(ii) when personally delivered, or (iii) when sent by fax, in each case to the
address or fax number of the receiving party set forth in Section 1. Either
party may change its address and fax number for notices by notice to the other
from time to time.
30. CONDITION OF PREMISES. Except as otherwise provided in Landlord's
warranties set forth in the Work Letter, by taking possession of the Premises,
Tenant accepts the Premises as being in good, sanitary order, condition and
repair, and further accepts all aspects of the Premises, Building, Property and
Business Park in their present condition, AS IS, including latent defects,
without any representations or warranties, express or implied, from Landlord.
31. HAZARDOUS SUBSTANCES.
31.1 Tenant shall not, without first obtaining Landlord's prior
written approval, generate, release, store, deposit, transport, or dispose
of (collectively "Release") any hazardous substances, sewage, petroleum
products, hazardous materials, toxic substances or any pollutants or
substances, defined as hazardous or toxic in applicable federal, state and
local laws and regulations ("Hazardous Substances") in, on or about the
Premises. In the event, and only in the event, Landlord approves such
Release of Hazardous Substances on the Premises, such Release shall occur
safely and in compliance with all applicable federal, state, and local laws
and regulations.
31.2 Tenant shall indemnify and defend (with counsel approved by
Landlord) Landlord, and hold Landlord harmless, from and against any and
all claims, liabilities, losses, damages, cleanup costs, and expenses
(including reasonable attorneys' fees) arising out of or in any way
relating to the Release by Tenant or any of its agents, representatives,
employees or invitees, or the presence of any Hazardous Substances in, on
or about the Premises occurring as a result of or in connection with
Tenant's use or occupancy of the Premises at any time after the
Commencement Date.
31.3 Landlord shall have the right from time to time to enter the
Premises, Building and Property and inspect the same for the presence of
Hazardous Substances and compliance with the provisions of this Section 31
and inspect the Premises, Building and Property. Landlord may cause tests
to be performed for Hazardous Substances on the Premises from time to time.
Tenant shall bear the cost of the first such test in any calendar year and
any other such test that occurs upon a reasonable suspicion by Landlord
that there may be Hazardous Substances in the Premises in violation of
Tenant's obligations under this Lease.
31.4 The provisions of this Section 31 shall survive the expiration
or termination of this Lease with respect to any occurrences during the
Term.
32. SIGNS. Tenant shall not place upon or install in windows or other
openings or exterior sides of doors or walls of the Premises any symbols,
drapes, or other materials without the written consent of Landlord. Tenant
shall observe and comply with the requirements of all Laws.
33. GENERAL PROVISIONS.
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33.1 ATTORNEYS' FEES. In the event Landlord reasonably requires the
services of any attorney in connection with any Default or violation by
Tenant of the terms of this Lease or the exercise by Landlord of its
remedies for any Default by Tenant under this lease, or a request by Tenant
for Landlord's waiver of any terms of this Lease or extension of time to
perform or pay any obligation of Tenant under this Lease, Tenant shall
promptly on demand reimburse Landlord for its reasonable attorneys' fees
incurred in such instance. In the event of any litigation, arbitration or
other proceeding (including proceedings in bankruptcy and probate and on
appeal) brought to enforce or interpret or other wise arising under this
Lease, the substantially prevailing party therein shall be entitled to the
award of its reasonable attorneys' fees, witness fees, and court costs
incurred therein and in preparation therefor.
33.2 GOVERNING LAW. This Lease shall be governed by and construed
in accordance with the laws of the State of Washington.
33.3 CUMULATIVE REMEDIES. No remedy or election under this Lease
shall be deemed exclusive but shall, wherever possible, be cumulative with
all other remedies at law or in equity.
33.4 EXHIBITS; ADDENDA. Exhibits and Addenda, if any, affixed to
this Lease are a part of and incorporated into this Lease.
33.5 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.
33.6 JOINT OBLIGATION. If there is more than one Tenant under this
Lease, the obligations hereunder imposed upon Tenants shall be joint and
several.
33.7 KEYS. Upon expiration or termination of this Lease, Tenant
shall surrender all keys to the Premises to Landlord at the place then
fixed for payment of Rent and shall inform Landlord of all combination
locks, safes, and vaults, if any, in the Premises.
33.8 LATE CHARGES; INTEREST. Late payment by Tenant to Landlord of
Rent or other sums due under this Lease will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which would be
difficult and impractical to ascertain. Such costs include without
limitation processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any mortgage or trust deed covering the
Premises. Accordingly, Tenant shall pay to Landlord as Additional Rent a
late charge equal to five percent of such installment as liquidated damages
for such late payment, other than for time value damages. Payment of the
Rent via Tenant's delivery of a check returned for "Insufficient Funds"
shall constitute the delinquent payment of Rent and shall be subject to the
late charge and interest provisions of this Section. In addition, any
Rent or other sums due under this Lease to Landlord that is not paid when
due shall bear interest at the rate per annum of two percent over the prime
rate in effect at Seattle-First National Bank, Main Office, on the day such
Rent or other sum was due. The existence or payment of charges and
interest under this Section shall not cure or limit Landlord's remedies for
any Default under this Lease.
33.9 LIGHT, AIR, AND VIEW. Landlord does not guarantee the
continued present status of light, air, or view in, to or from the
Premises.
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33.10 MEASUREMENTS. All measurements of the Premises stated in
this Lease, even if approximations, shall govern and control over any
actual measurement of the Premises. The Rent provided in this Lease and
Tenant's Share shall not be modified or changed by reason of any
measurement or re-measurement of the Premises or the Building that may
occur after the date of this Lease, and is agreed by Landlord and Tenant to
constitute the negotiated rent for the Premises. The foregoing shall not
be deemed to modify any obligation of Landlord to construct the Premises in
accordance with the Work Letter.
33.11 NAME. Tenant shall not use the name of the Building or
Business Park for any purpose other than as an address of the business
conducted by the Tenant in the Premises.
33.12 PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all of
the agreements of the parties with respect to any matter covered or
mentioned in this Lease, and no prior agreements of understandings
pertaining to any such matters shall be effective for any purpose. No
provision of this Lease may be amended or added to except by an agreement
in writing signed by the parties or their respective successors in
interest. This Lease shall not be effective or binding on any party until
fully executed by both parties hereto.
33.13 RECORDATION. Tenant shall not record this Lease or a short
form memorandum of this Lease without the prior written consent of
Landlord.
33.14 LIABILITY. If Landlord is a partnership, any claim by
Tenant against Landlord shall be limited to the assets of such partnership,
and Tenant expressly waives any right to proceed against the partners or
the officers, directors, or shareholders of any partner in Landlord, except
to the extent necessary to subject the assets of such partnership to such
claim.
33.15 SEVERABILITY. That any provision of this Lease is invalid,
void, or illegal shall in no way affect, impair, or invalidate any other
provision of this Lease and such other provision shall remain in full force
and effect.
33.16 TIME. Time is of the essence of this Lease and each of its
provisions.
33.17 WAIVER. No provision of this Lease shall be deemed to have
been waived by Landlord unless such waiver is in writing signed by
Landlord's duly authorized representatives. The waiver by either party of
any provision of this Lease shall not be deemed to be a waiver of such
provision or any other provision, in any subsequent instance. The
acceptance of Rent by Landlord shall not be deemed to be a waiver of any
preceding Default or breach by Tenant under this Lease, whether known or
unknown to Landlord, other than the failure of the Tenant to pay the
particular Rent so accepted.
33.18 NO WASTE. Tenant shall not commit or suffer to be committed
any waste, damage or nuisance in or upon the Premises.
33.19 QUIET ENJOYMENT. Provided Tenant observes its obligations
under this Lease, its quiet enjoyment of the Premises throughout the Term
shall not be disturbed.
34. AUTHORITY OF TENANT.
34.1 If Tenant is a corporation, each individual executing this
Lease on behalf of Tenant represents and warrants that (s)he is duly
authorized by all necessary action of
20
the directors of Tenant to execute and deliver this Lease on behalf of
Tenant, and that this Lease is binding upon Tenant in accordance with its
terms.
34.2 If Tenant is a partnership or limited liability company, each
individual executing this Lease on behalf of Tenant represents and warrants
that (s)he is duly authorized in accordance with Tenant's partnership
agreement or limited liability company agreement by all necessary action of
the partners or members or managers of Tenant to execute and deliver this
Lease on behalf of Tenant, and, and that this Lease is binding upon Tenant
in accordance with its terms.
35. FINANCIAL STATEMENTS. Tenant shall furnish to Landlord from time to
time, within 30 days of request, Tenant's most recent financial statements,
including at a minimum a balance sheet, income statement and statement of
changes in financial condition, or the equivalent, dated as of and for a period
ending not more than one quarter prior to the date of delivery. Such statements
shall be in the form furnished to Tenant's principal lender and/or to Tenant's
shareholders or other owners, but at a minimum shall be reviewed or compiled by
an independent certified public accountant. Landlord shall not request financial
statements under this Section more than once each calendar year.
36. COMMISSIONS. Any commissions payable as a result of the execution of
this Lease shall be paid pursuant to a separate commission contract. Each party
represents and warrants to the other that it has not had dealings with any real
estate broker, agent or salesperson, other than the Broker identified in Section
1 of this Lease, if any, with respect to this Lease that would cause the other
party to have any liability for any commissions or other compensation to such
broker, agent or salesperson, and that no such broker, agent or salesperson has
asserted any claim or right to any such commission or other compensation. Such
representing party shall defend and indemnify the other party and hold the other
party harmless from and against any and all loss, cost, liability, damage and
expense (including reasonable attorneys' fees) whatsoever that may arise out of
the breach of such representation and warranty.
EXECUTED the day and year above written.
LANDLORD:
THE QUADRANT CORPORATION
By______________________________________
__________________, its ______________
TENANT:
ADVANCED DIGITAL INFORMATION CORPORATION
By______________________________________
__________________, its ______________
STATE OF WASHINGTON )
)ss.
COUNTY OF ________ )
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On this ____ day of ______________, 19____, before me, the undersigned, a
Notary Public in and for the State of Washington, personally appeared
______________ ___________________, to me known to be the ____________________
of THE QUADRANT CORPORATION, the corporation that executed the foregoing
instrument, and acknowledged the 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 he/she was authorized to execute the said instrument on
behalf of said corporation.
WITNESS MY HAND AND OFFICIAL SEAL hereto affixed the day and year first
above written.
________________________________________
Name ___________________________________
NOTARY PUBLIC in and for the State of
Washington,
residing at ___________________________.
My commission expires _________________.
STATE OF __________________ )
)ss.
COUNTY OF ________ )
On this ____ day of ______________, 19___, before me, the undersigned, a
Notary Public in and for the State of __________, personally appeared
______________ ___________________, to me known to be the ____________________
of ADVANCED DIGITAL INFORMATION CORPORATION, the corporation that executed the
foregoing instrument, and acknowledged the 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 he/she was authorized to execute the said
instrument on behalf of said corporation.
WITNESS MY HAND AND OFFICIAL SEAL hereto affixed the day and year first
above written.
________________________________________
Name ___________________________________
NOTARY PUBLIC in and for the State of
Washington,
residing at ___________________________.
My commission expires _________________.
22
EXHIBIT A-1
THE BUILDING
The entirety of Floors 1 and 2 of the Building located on the Property, bearing
a street address of 00000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx.
23
EXHIBIT A-2
PROPERTY DESCRIPTION
Xxx 0, Xxxxxxxx Xxxxxxx Xxxxxxxxx Xxxxxx as delineated on according to the
Binding Site Plan, filed in Volume 181 of Plats, Pages 5 through 11, inclusive,
and recorded July 9, 1997 under Recording No. 9707091343, records of King
County, Washington.
00
XXXXXXX X-0
XXXXXXXX XXXX DESCRIPTION
Lots 1, 2, 3, 4, 5, 6 and 7, Quadrant Willows Corporate Center as delineated on
according to the Binding Site Plan, filed in Volume 181 of Plats, Pages 5
through 11, inclusive, and recorded July 9, 1997 under Recording No. 9707091343,
records of King County, Washington, excepting therefrom that portion conveyed to
the City of Xxxxxxx by Deed recorded July 9, 1997, under Recording No.
9707091385, records of King County Washington.
25
WORK LETTER AGREEMENT
Work Letter Agreement ("Agreement"), dated as of the 5 day of November,
1997, by and between THE QUADRANT CORPORATION, a Washington corporation
("Landlord"), and ADVANCED DIGITAL INFORMATION CORPORATION, a Washington
corporation ("Tenant").
RECITALS
Concurrently with the execution of this Agreement, Landlord and Tenant have
entered into a lease ("Lease") covering certain premises ("Premises") more
particularly described in EXHIBIT A-1 attached to the Lease.
In order to induce Tenant to enter into the Lease and in consideration of
the mutual covenants hereinafter contained, Landlord and Tenant hereby agree as
follows. Capitalized terms used herein shall have the meanings ascribed to them
in the Lease.
1. COMPLETION SCHEDULE
1.1. Attached is a schedule ("Work Schedule") setting forth a timetable for
the planning and completion of the installation of the Tenant
Improvements to be constructed in the Premises prior to the
Commencement Date of the Lease. The Work Schedule sets forth each of
the various items of work to be done by or approval to be given by
Landlord and Tenant in connection with the completion of the Tenant
Improvements. The Work Schedule shall be the basis for completing the
Tenant Improvement work. Landlord and Tenant shall each exert their
good faith, reasonable and diligent efforts to achieve completion or
approval of the matters described in the Work Schedule on or before
the dates set forth therein; and Landlord and Tenant each agree to
promptly and diligently respond to all questions and concerns raised
by architects, engineers and other consultants in connection
therewith. If Landlord or Tenant, as the case may be, do not complete
the stated approval or item by the applicable date shown in the Work
Schedule, the provisions of Section 8 shall apply.
2. CONSTRUCTION OF BUILDING SHELL
2.1. Landlord shall cause the Building Shell to be substantially completed
sufficient for the issuance of a temporary certificate of occupancy
for the Premises on or before the Commencement Date of the Lease in
substantial accordance with those certain drawings and specifications
issued by Xxxxx Xxxxxxx & Associates: Building A design drawings
marked "Construction Set for Building 'A'", dated 30-May-97;
Construction Specification for Quadrant Willows Corporate Center,
dated Mar-1996; Building A supplemental drawings marked "Building 'A'
Core Bid Set", dated 18-Aug-997; "Building 'A' Lobby Finish
Supplement", dated 18-Aug-97 ("Building Shell Plans").
2.2. The Building Shell shall include the following improvements
constructed in substantial accordance with the Building Shell Plans,
which shall not
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constitute any part of the Tenant Improvements and shall not be
included within the Tenant Improvement Allowance described in
Section 7:
2.2.1. Heating, ventilating and air conditioning system ("HVAC")
properly sized for Tenant with the main distribution of the
HVAC to each floor of the Building;
2.2.2. Finished lobby serving the Building;
2.2.3. Installation of the elevator serving the Building;
2.2.4. Restrooms on each floor of the Building large enough to
accommodate each entire floor;
2.2.5. Showers on one floor with one stall for men and one stall for
women.
2.2.6 Main electrical service brought to the electrical room.
3. TENANT IMPROVEMENTS; TENANT IMPROVEMENT PLANS
3.1. In this Agreement "Tenant Improvements" shall include all work to be
done in the Premises pursuant to the Tenant Improvements Plans
described in and developed in accordance with this Section 3, as
modified by Tenant pursuant to Section 4. Landlord and Tenant shall
prepare Schematic Space Plan for the Tenant Improvements in
accordance with the Work Schedule, upon which Schematic Space Plan,
Landlord and Tenant shall then prepare the Tenant Improvements
construction documents, (i.e., final working drawings and
specifications for the Tenant Improvements) for the approval of
Landlord and Tenant in accordance with the Work Schedule, which
Tenant Improvements construction documents shall then constitute the
"Tenant Improvements Plans".
3.2. After determination of the Tenant Improvements Plans, the same shall
be submitted to the appropriate governmental body for plan checking
and issuance of necessary permits and approvals. Landlord, with
Tenant's cooperation, shall cause to be made any changes in the
Tenant Improvements Plans necessary to obtain such permits and
approvals.
4. TENANT REQUESTED CHANGES TO TENANT IMPROVEMENTS PLANS
4.1. After determination of the Tenant Improvements Plans, Tenant may, at
Tenant's election, request revisions, modifications, changes and
amendments to the Tenant Improvements Plans; and, subject to
Landlord's consent and approval, in the exercise of Landlord's
reasonable discretion, the Tenant Improvements Plans shall be so
revised, provided, however, that all costs relating to re-design of
the Tenant Improvements for such change, costs for changes to the
Tenant Improvements Plans, additional permitting or fees which may
be required in connection with such change, and any increased Tenant
Improvements construction costs shall be paid first from any Tenant
Improvement Allowance savings and second by Tenant.
2
Additionally, delays resulting from any such changes together with
the time period for the preparation of estimates and review and
approval by Landlord and Tenant shall constitute a Tenant Delay in
accordance with the provisions of Section 8 herein. If approved by
Landlord, changes to the Tenant Improvements Plans shall be
evidenced by written change order signed by Landlord, Tenant and the
construction contractor. Landlord shall have the right to decline
Tenant's request for a change to the Tenant Improvements Plans if
such changes are inconsistent with the other provisions of this
Agreement or if the change would, in Landlord's opinion, delay
completion of the Tenant Improvements beyond the Commencement Date.
5. DETERMINATION OF FINAL PRICING
5.1. After the determination of the Tenant Improvements Plans, Landlord
shall prepare a final pricing for tenant's approval in accordance
with the Work Schedule, taking into account any modifications which
may be required to reflect changes in the Tenant Improvements Plans
required by such governmental body in connection with the issuance
of permits and approvals. In Landlord's preparation of such final
pricing, Landlord and Tenant shall have the opportunity to obtain
competitive subcontractor bids for the construction of the Tenant
Improvements.
6. CONSTRUCTION OF TENANT IMPROVEMENTS
6.1. Landlord shall cause the Tenant Improvements to be substantially
completed sufficient for the issuance of a temporary certificate of
occupancy for the Premises on or before the Commencement Date of the
Lease in accordance with the provisions set forth in this Work
Letter. Landlord shall supervise the completion of such work and
shall use diligent efforts to secure substantial completion of the
work in accordance with the Work Schedule. The cost of such work
shall be paid as provided in Section 7.
6.2. In connection with the construction of the Tenant Improvements,
Landlord and Tenant shall arrange for Tenant to have access to the
Premises commencing approximately 10 days prior to the estimated
date for substantial completion shown on the Work Schedule, in order
to allow Tenant to install telephone lines and telephone systems,
fiber optics, computer cabling, and related similar matters, and, on
a "space ready" basis only, to commence installation of Tenant's
trade fixtures. Tenant shall schedule installation of such items
with Landlord and Landlord's contractor so as not to unreasonably
impede, interfere with or delay the progress of construction of the
Tenant Improvements; and Tenant shall perform such installation in
accordance with guidelines promulgated by Landlord's contractor.
Delay, interference or damage arising out of Tenant's installation
of such items shall constitute a Tenant Delay under Section 8. Any
and all costs of installation of such items shall be at Tenant's
sole cost and expense.
6.3. During the period of construction of the Tenant Improvements,
Landlord shall consult with Tenant from time to time as necessary to
achieve approval of certain matters and installations related to the
Tenant Improvements.
3
Such approvals shall be forthcoming from Tenant within a reasonable
time period as requested by Landlord, which time period shall enable
Landlord to maintain the schedule for substantial completion of the
Tenant Improvements stated in the Work Schedule. Failure of Tenant
to respond within such requested time period shall constitute a
Tenant Delay.
6.4. During the period of construction of the Tenant Improvements,
Landlord and Tenant shall meet at regular meetings occurring at
least once monthly regarding the status of the construction and
occurring at least once weekly during the final month of
construction. If timely, matters requiring Tenant's approval may be
determined at such meetings and decisions shall be reflected in the
minutes of such meetings.
7. PAYMENT OF COST OF THE TENANT IMPROVEMENTS
7.1. Tenant is entitled to a "Tenant Improvement Allowance" of $22 per
rentable square foot ("RSF" as defined in the Lease), plus $165,000.
Such Tenant Allowance shall be used only for:
7.1.1. Payment of the cost of preparing the space plan and final
working drawings and specifications, including mechanical,
electrical, plumbing and structural drawings and of all
other aspects of the Tenant Improvement Plans; provided,
however that Landlord shall provide $0.15/RSF allowance to
Tenant for the cost of preliminary space plans with respect
to the Tenant Improvements.
7.1.2. The payment of plan check, permit and license fees relating
to construction of the Tenant Improvements.
7.1.3. Construction of the Tenant Improvements, including without
limitation the following:
7.1.3.1. Installation within the Premises of all
partitioning, doors, floor coverings, ceilings,
wall coverings and painting, millwork and similar
items.
7.1.3.2. All electrical wiring, lighting fixtures, outlets
and switches and other electrical work to be
installed within the Premises.
7.1.3.3. The furnishing and installation of all duct work,
terminal boxes, diffusers and accessories required
for the completion of the heating, ventilation and
air conditioning systems within the Premises,
including the cost of meter and key control for
after-hour heating, ventilation and air
conditioning.
7.1.3.4. Any additional Tenant requirements including but
not limited to odor control, special heating,
ventilation and air conditioning, noise or
vibration control or other special systems.
4
7.1.3.5. All fire and life safety control systems such as
fire walls, sprinklers, halon, fire alarms,
including piping, wiring and accessories installed
within the Premises.
7.1.3.6. All plumbing, fixtures, pipes and accessories to
be installed within the Premises.
7.1.3.7. All exterior dock improvements in substantial
accordance with those specifications for exterior
dock improvements ("Dock Plans").
7.1.3.8. Installation within the parking garage of a two
stop elevator or product lift in substantial
accordance with those specifications for parking
garage lift ("Lift Plans").
7.1.3.9. Testing and inspection costs.
7.1.3.10. Contractor's fees, including but not limited to
any fees based on general conditions.
7.1.3.11. All applicable Washington State sales taxes.
7.2. Retail sales taxes otherwise applicable to portions of construction
of the Building Shell and Tenant Improvements may be eligible for
deferral pursuant to RCW 82.63 and WAC 000-00-00000 as a result of
the uses intended by Tenant of the Premises. Landlord agrees that
in the event Tenant elects to seek such tax deferral, Landlord will
cooperate with Tenant's application for the same and shall agree as
a part of such application to state that the economic benefit of any
such deferral shall be passed to Tenant, provided, however, that:
7.2.1. Under no circumstances shall such application delay
commencement of construction of the Building Shell or any
other activity contemplated hereunder;
7.2.2. In the event retail sales tax for Building Shell or Tenant
Improvements is deferred, and if, for any reason, any part
of the retail sales tax so deferred is subsequently required
to be paid, Tenant shall promptly pay the same, together
with any interest, penalties or other charges that are or
become due in connection therewith; and
7.2.3. Tenant shall indemnity and hold Landlord harmless from any
and all costs, expenses and claims arising out of or related
to any retail sales tax deferral for the Building Shell and
Tenant Improvements. The provisions of this Section 7.2
shall survive termination of this Agreement and shall
specifically benefit The Quadrant Corporation whether or not
The Quadrant Corporation is Landlord under the Lease.
5
7.3. The cost of each item shall be charged against the Tenant
Improvement Allowance. In the event that the cost of installing the
Tenant Improvements, as established by the final pricing schedule to
be determined by Landlord and Tenant, exceeds the Tenant Improvement
Allowance, or if any of the Tenant Improvements are not to be paid
out of the Tenant Improvement Allowance, then the excess shall be
paid by Tenant to Landlord not later than ten (10) days after
invoice from Landlord to Tenant for the same.
7.4. If, after the Tenant Improvement Plans have been established and the
final pricing has occurred, Tenant shall require changes or
substitutions to the Tenant Improvement Plans, any additional costs
thereof shall be paid first from any Tenant Improvement Allowance
savings and second by Tenant to Landlord not later than ten days
after invoice from Landlord to Tenant for the same. Landlord shall
have the right to decline Tenant's request for a change to the
Tenant Improvement Plans if such changes are inconsistent with the
other provisions of this Agreement or if the change would, in
Landlord's opinion, delay completion of the Tenant Improvements
beyond the Commencement Date.
7.5. In the event that the cost of the Tenant Improvements increases as
set forth in Landlord's final pricing due to the requirements of any
governmental agency and such increases exceed any available
remaining amount of the Tenant Improvement Allowance, Tenant shall
pay Landlord the amount of such increase within ten days after
receipt of Landlord's invoice for the same.
7.6. Any unused portion of the Tenant Improvement Allowance upon
completion of the Tenant Improvements shall be paid by Landlord to
Tenant or available to Tenant as a credit against any obligations of
Tenant under the Lease, as elected by Tenant.
8. DELAY IN DELIVERY OF POSSESSION
8.1. To the extent there occurs a delay in completing the Tenant
Improvements and delivering possession of the Premises at the
Commencement Date, which delay is caused by reason other than: (i)
Tenant's failure to meet its obligations under the Lease or this
Work Letter Agreement, (ii) Tenant initiated changes to the Tenant
Improvements Plans (iii) Tenant's failure to complete its approval
of actions in accordance with the Work Schedule, or (iv)
interference or damage arising out of Tenant's installation of
telephone lines and telephone systems, fiber optics, computer
cabling, and related similar matters pursuant to Section 6.3
(collectively subsections (ii) through (v) being referred to as
"Tenant Delay"), then Landlord and Tenant agree that as Tenant' s
sole remedy for such delay, the Rent Commencement Date shall be
postponed one (1) day for each day that the Commencement Date is
later than April 1, 1998.
8.2. To the extent that the delay in delivering possession of the
Premises at the Commencement Date is caused by Tenant Delays, then
Rent Commencement Date pursuant to the Lease shall be the earlier of
the Commencement Date and April 1, 1998. Upon the occasion of a
Tenant
6
Delay, other than Tenant's failure to meet the requirements of the
Work Schedule, Landlord shall notify Tenant of the commencement of
such period of Tenant Delay and, if it can be reasonably determined
or is known to Landlord, the extent of the Tenant Delay.
9. SUBSTANTIAL COMPLETION
9.1. The Tenant Improvements shall be deemed substantially complete
notwithstanding the fact that minor details of construction,
mechanical adjustments or decorations which do not materially
interfere with Tenant's use and enjoyment of the Premises remain to
be performed (items normally referred to as "punch list" items).
10. TENANT REPRESENTATIVE
10.1. Tenant appoints Xxxxxx X. Rock as Tenant's Representative to act for
Tenant in all xxxxxx under this Agreement. All inquiries, requests,
instructions, authorizations, and other communications under this
Agreement may be made by Landlord to Tenant's Representative.
Tenant may change the identity of Tenant Representative by notice in
writing to Landlord.
11. LIABILITY FOR PROFESSIONALS
11.1. Neither Landlord nor Tenant is an architect, contractor, engineer or
other licensed professional and, except as otherwise provided in
this Agreement or the Lease, neither Landlord nor Tenant shall be
responsible or liable to the other for the work performed on their
behalf by their respective architects, contractors, engineers, or
other licensed professionals.
12. SIGNAGE DURING CONSTRUCTION
12.1. During the construction period, to the extent permitted by the City
of Xxxxxxx and if requested by Tenant, Landlord shall provide at
Landlord's expense, signage as large as permitted, stating "Future
Home of Advanced Digital Information Corporation".
13. WARRANTIES
13.1. Landlord's delivery of occupancy to Tenant shall constitute
Landlord's warranty that the Building Shell and Tenant Improvements
shall be free of material defects in construction (whether latent or
patent) and constructed pursuant to the terms of this Work Letter,
and Landlord shall be responsible for the cost of repair or
reconstruction of the Building Shell and Tenant Improvements to the
extent Landlord is notified in writing by Tenant on or before the
expiration of twelve (12) months from the Commencement Date of the
particular defects believed to be covered by the warranty made in
this sentence. In no event shall Landlord be liable for
consequential damages or lost profits in connection with such
warranty, even though Landlord may be aware of the possibility that
such damages may be suffered. Tenant waives
7
any claim for any such consequential damages or lost profits as a
material part of the inducement to Landlord to make such warranty.
13.2. Landlord shall obtain from all contractors and subcontractors
providing material and labor in the construction of the Building and
Tenant Improvements all commercially reasonable warranties
(including manufacturers' warranties) for their respective materials
or labor which are available from such contractors or
subcontractors. All such warranties shall be in writing and shall
run to Landlord. To the extent there exists any defect in the
Building Shell or Tenant Improvements, which is covered by the
warranties obtained under this Section, Landlord shall seek to
enforce such warranties in accordance with their terms.
14. GENERAL
14.1. The provisions of the Lease and of the Exhibits hereto are made a
part of this Agreement. The parties shall execute such further
documents and instruments and take such other further actions as may
be reasonably necessary to carry out the intent and provisions of
this Agreement.
EXECUTED as of the date first above written.
LANDLORD:
THE QUADRANT CORPORATION
By: ___________________________________
__________________________, its
____________________
TENANT:
ADVANCED DIGITAL INFORMATION
CORPORATION
By: ___________________________________
______________, its ____________________
8
WORK SCHEDULE
10/24/97 Selection of Space Planner
10/28/97 Determination of Schematic Space Plan
10/31/97 Architect Completion of Draft Tenant Improvement
Plans "Check Set" and Submission to Tenant
11/7/97 Landlord and Tenant Approve Tenant Improvements Plans
11/19/97 Approved Tenant Improvements Plans
Submitted for Tenant Improvements Construction Permit
12/5/97 Determination of Final Pricing
12/17/97 Landlord and Tenant approve pricing and any changes to
Tenant Improvement plans.
1/15/98 Tenant Improvements Construction Permit Issued
3/18/98 Premises available for Tenant to begin installation of
Tenant owned improvements such as furniture, fixtures,
telephone and cable. (Tenant and Landlord agreed to work
together on the schedule to allow Tenant access for
telephone and cable earlier than 3/18/98.)
4/1/98 Substantial Completion and Issuance of Temporary Certificate
of Occupancy
April 1, 1998 Lease Commencement Date
[REMAINING DATES TO BE INSERTED AS MUTUALLY AGREED PRIOR TO LEASE
EXECUTION]
1
