SCHNITZER NORTH CREEK LEASE AGREEMENT S/I NORTH CREEK III, LLC (Landlord) and LUMERA CORPORATION (Tenant) Dated: July 11, 2005
Exhibit
10.1
SCHNITZER
NORTH CREEK
S/I
NORTH CREEK III, LLC
(Landlord)
and
LUMERA
CORPORATION
(Tenant)
Dated:
July 11, 2005
TABLE
OF
CONTENTS
|
ARTICLE
I: DEFINITIONS
|
4
|
|
|
1.01
|
Defined
terms
|
4
|
|
ARTICLE
II: PREMISES AND COMMON AREAS LEASED
|
6
|
|
|
2.01
|
Premises
|
6
|
|
2.02
|
Common
Areas
|
7
|
|
ARTICLE
III: IMPROVEMENTS
|
7
|
|
|
3.01
|
Premises
Accepted "AS IS"
|
7
|
|
3.02
|
Tenant's
Right to Make Improvements to Premises
|
7
|
|
ARTICLE
IV: TERM
|
8
|
|
|
4.01
|
Term
|
8
|
|
4.02
|
Notice
of Commencement Date
|
8
|
|
4.03
|
Option
to Extend
|
9
|
|
ARTICLE
V: RENT
|
10
|
|
|
5.01
|
Base
Rent
|
10
|
|
5.02
|
Additional
Rent
|
11
|
|
5.03
|
Late
Payment
|
11
|
|
5.04
|
Security
Deposit
|
11
|
|
5.05
|
Credit
Enhancement/Letter of Credit
|
12
|
|
ARTICLE
VI: ADDITIONAL RENT AND CHARGES
|
13
|
|
|
6.01
|
Operating
Expenses
|
13
|
|
6.02
|
Tenant's
Personal Property Taxes
|
17
|
|
ARTICLE
VII: INSURANCE
|
17
|
|
|
7.01
|
Landlord's
Insurance
|
17
|
|
7.02
|
Tenant’s
Public Liability
|
18
|
|
7.03
|
Tenant's
Property and Other Insurance
|
18
|
|
7.04
|
Form
of Insurance/Certificates
|
18
|
|
7.05
|
Tenant's
Failure
|
19
|
|
7.06
|
Waiver
of Subrogation
|
19
|
|
7.07
|
Tenant's
Properties and Fixtures
|
19
|
|
7.08
|
Indemnification
|
20
|
|
7.09
|
Damage
to Tenant's Property
|
21
|
|
ARTICLE
VIII: REPAIRS AND MAINTENANCE
|
22
|
|
|
8.01
|
Landlord
Repairs and Maintenance
|
22
|
|
8.02
|
Utilities
and Services
|
22
|
|
8.03
|
Tenant
Repairs and Maintenance
|
22
|
|
8.04
|
Non-liability
of Landlord
|
23
|
|
8.05
|
Inspection
of Premises
|
23
|
|
ARTICLE
IX: FIXTURES, PERSONAL PROPERTY AND ALTERATIONS
|
23
|
|
|
9.01
|
Fixtures
and Personal Property
|
23
|
|
9.02
|
Alterations
|
24
|
|
9.03
|
Liens
|
25
|
|
ARTICLE
X: USE AND COMPLIANCE WITH LAWS
|
26
|
|
|
10.01
|
General
Use and Compliance with Laws
|
26
|
|
10.02
|
Hazardous
Materials
|
26
|
|
10.03
|
Signs
|
28
|
|
10.04
|
Exterior
HVAC Unit
|
29 |
|
ARTICLE
XI: DAMAGE AND DESTRUCTION
|
29
|
|
|
11.01
|
Reconstruction
|
29
|
|
11.02
|
Rent
Abatement
|
29
|
|
11.03
|
Excessive
Damage or Destruction
|
30
|
|
11.04
|
Uninsured
Casualty
|
30
|
|
11.05
|
Waiver
|
30
|
|
11.06
|
Mortgagee's
Right
|
30
|
|
11.07
|
Damage
Near End of Term
|
31
|
|
ARTICLE
XII: EMINENT DOMAIN
|
31
|
|
|
12.01
|
Eminent
Domain
|
31
|
|
ARTICLE
XIII: DEFAULT
|
31
|
|
|
13.01
|
Events
of Default
|
31
|
|
13.02
|
Remedies
|
32
|
|
13.03
|
Landlord's
Default
|
34
|
|
ARTICLE
XIV: FILING OF PETITION
|
34
|
|
|
14.01
|
Tenant's
Bankruptcy
|
34
|
|
ARTICLE
XV: ASSIGNMENT AND SUBLETTING
|
36
|
|
|
15.01
|
Prohibition
|
36
|
|
15.02
|
Excess
Rental
|
36
|
|
15.03
|
Scope
|
37
|
|
15.04
|
Waiver
|
37
|
|
15.05
|
Change
in Control
|
37
|
|
ARTICLE
XVI: ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION
|
37
|
|
|
16.01
|
Estoppel
Certificates
|
37
|
|
16.02
|
Attornment
|
38
|
|
16.03
|
Subordination
|
38
|
|
16.04
|
Recording
|
38
|
|
ARTICLE
XVII: MISCELLANEOUS
|
38
|
|
|
17.01
|
Notices
|
38
|
|
17.02
|
Successors
Bound
|
39
|
|
17.03
|
Waiver
|
39
|
|
17.04
|
Subdivision
and Easements
|
39
|
|
17.05
|
Landlord's
Reserved Rights in Common Areas
|
39
|
|
17.06
|
Accord
and Satisfaction
|
40
|
|
17.07
|
Limitation
of Landlord's Liability
|
40
|
|
17.08
|
Survival
|
40
|
|
17.09
|
Attorneys'
Fees
|
40
|
|
17.10
|
Captions
and Article Numbers
|
40
|
|
17.11
|
Severability
|
40
|
|
17.12
|
Applicable
Law
|
41
|
|
17.13
|
Submission
of Lease
|
41
|
|
17.14
|
Holding
Over
|
41
|
|
17.15
|
Rules
and Regulations
|
41
|
|
17.16
|
Parking
|
41
|
|
17.17
|
No
Nuisance
|
42
|
|
17.18
|
Broker;
Agency Disclosure
|
42
|
|
17.19
|
Landlord's
Right to Perform
|
42
|
|
17.20
|
Assignment
by Landlord
|
42
|
|
17.21
|
Entire
Agreement
|
43
|
|
17.22
|
Financial
Covenants
|
43
|
|
17.23
|
Consents
|
43
|
|
17.24
|
Conditions
|
43
|
|
17.25
|
Exhibits
|
43
|
|
17.26
|
Submission
of Lease
|
43
|
|
17.27
|
Time
|
44
|
|
17.28
|
Prior
Agreement or Amendment
|
44
|
|
17.29
|
Independently
Provided Services
|
44
|
|
17.30
|
Authority
to Bind Landlord
|
44
|
|
17.31
|
Authority
to Bind Tenant
|
44
|
|
17.32
|
No
Usury
|
44
|
|
17.33
|
Interpretation
|
45
|
|
17.34
|
Excused
Delays
|
45
|
|
17.35
|
Roof
Rights
|
45
|
THIS
LEASE ("Lease") dated as of the 11th day of July, 2005, is made by and between
S/I NORTH CREEK III, LLC, A WASHINGTON LIMITED LIABILITY COMPANY ("Landlord"),
and LUMERA CORPORATION, a Delaware corporation ("Tenant”).
ARTICLE
I: DEFINITIONS
1.01 Defined
terms.
The
following terms shall have the meanings specified in this Section, unless
otherwise specifically provided. Other terms may be defined in other parts
of
the Lease.
|
(a)
|
Landlord:
|
S/I
NORTH CREEK III, LLC
|
|
|
(b)
|
Landlord's
Address:
|
c/o
Schnitzer Xxxxxxxxx
|
|
|
000
- 000xx
Xxxxxx XX, Xxxxx 000
|
|||
|
Xxxxxxxx,
Xxxxxxxxxx 00000
|
|||
|
Telephone:
(000) 000-0000
|
|||
|
Facsimile:
(000) 000-0000
|
|||
|
With
a Copy to:
|
Xxxxxxx
Xxxxxxx Xxxxxx &
|
||
|
Lombard,
P.L.L.C.
|
|||
|
000
Xxxxx Xxxxxx, Xxxxx 0000
|
|||
|
Xxxxxxx,
Xxxxxxxxxx 00000
|
|||
|
Attn:
Xxxxxxxx Xxxx
|
|||
|
Telephone:
(000) 000-0000
|
|||
|
Facsimile:
(000) 000-0000
|
|||
|
(c)
|
Tenant:
|
LUMERA
CORPORATION
|
|
|
(d)
|
Tenant's
Address:
|
00000
Xxxxx Xxxxx Xxxxxxx
|
|
|
Xxxxxxx,
Xxxxxxxxxx 00000
|
|||
|
(e)
|
Tenant's
Use:
|
General
office, bio-tech facility and related uses consistent with a
Class A
office park and subject to compliance with Section 10.01.
|
|
|
(f)
|
Project:
|
Technology
Campus I, including all buildings and Common Areas thereon and
related
thereto as legally described in Exhibit “A” and depicted on the Project
Site Plan attached as Exhibit “B.”
|
4
|
(g)
|
Property:
|
The
real property described in Exhibit "A" and depicted on the Project
Site
Plan attached as Exhibit "B."
|
|
|
(h)
|
Building:
|
That
certain building designated as Building F on the Project Site
Plan
attached hereto as Exhibit B.
|
|
|
(i)
|
Premises:
|
Approximately
32,172 rentable square feet, consisting of the entire rentable
area of the
first floor of the Building, as depicted on the Floor Plan attached
as
Exhibit "C."
|
|
|
(j)
|
Term:
|
Commencing
upon the Commencement Date (as defined in Section 4.01) and expiring
on
the date five (5) years (60 months) thereafter.
|
|
|
(k)
|
Commencement
Date
|
April
7, 2006
|
|
|
(l)
|
Base
Rent:
|
| Months | Annual Rate(psf) | Monthly Rental* | |||||
|
1-3:
|
00.00
|
$0.00
|
|||||
|
4-12:
|
$15.00
|
$40,215.00
|
|||||
|
13-24:
|
$15.50
|
$41,555.50
|
|||||
|
25-36:
|
$16.00
|
$42,896.00
|
|||||
|
37-48:
|
$16,50
|
$44,236.50
|
|||||
|
49-60:
|
$17.00
|
$45,577.00
|
|
(m)
|
Prepaid
Rent:
|
$40,215
applicable to Month 1
|
|
|
(n)
|
Security
Deposit:
|
$45,577
|
|
|
(o)
|
Tenant's
Share of Building:
|
48%*
(32,172 RSF ¸67,333
RSF)*
|
|
|
(p)
|
Tenant’s
Share of Project:
|
10%*
(32,172 RSF ¸
325,850 RSF)*
|
|
|
(q)
|
Parking
Spaces:
|
112
uncovered, unreserved surface parking spaces in the Project shall
be
provided for the non-exclusive use of Tenant, its employees and
visitors
during the Term and the Extended Term.
|
|
|
(r)
|
Broker(s):
|
CB
Xxxxxxx Xxxxx/Xxx X’Xxxxx, representing Tenant (“Tenant’s
Broker”)
|
5
|
(s)
|
Guarantor(s)
and
Address(es):
|
N/A
|
|
|
(t)
|
Exhibits:
|
Exhibit
A:
|
Legal
Description of Project
|
|
Exhibit
B:
|
Project
Site Plan
|
||
|
Exhibit
C:
|
Floor
Plan Identifying Leased Premises
|
||
|
Exhibit
D:
|
Form
of Letter of Credit
|
||
|
Exhibit
E
|
Multi-Tenant
Lobby Plan
|
||
|
Exhibit
F:
|
Lease
Confirmation
|
||
|
Exhibit
G:
|
Estoppel
Certificate
|
||
|
Exhibit
H:
|
Rules
and Regulations
|
||
|
Exhibit
I:
|
Form
of SNDA
|
*
Subject
to adjustment upon measurement pursuant to Section 2.01(b).
ARTICLE
II: PREMISES
AND COMMON AREAS LEASED
2.01 Premises.
(a) Landlord
hereby leases to Tenant, and Tenant hereby leases from Landlord, subject to
the
provisions of this Lease, certain premises described in Subsection 1.01(i)
above
("Premises") located within the building described in Subsection 1.01(h) (the
“Building") owned by Landlord, and which is a portion of the "Project"
identified in Subsection 1.01(f). The Site Plan for the Project attached hereto
as Exhibit
B
is
attached for location reference purposes only and shall not constitute a
representation or warranty by Landlord to be the final plan of the Project,
or
to require Landlord to build any improvements, or to otherwise comply with
the
site plan or require Landlord to lease space to a particular tenant or type
of
tenant.
(b) Upon
completion of the Tenant Improvements, the Rentable Area of the Premises shall
be remeasured
in
accordance with BOMA publication ANSI Z65.1-1996 for a multi-tenant building
without deduction of area associated with Tenant’s special purpose HVAC shaft
requirements. Further, second floor area lost to specialty mechanical shafts
serving the Premises will be added back into the Rentable Area of the Premises.
Upon completion of such remeasurement, the Base Rent shall be adjusted to
reflect the recalculated area of the Premises. Tenant acknowledges that, except
as otherwise expressly set forth in this Lease, neither Landlord nor any agent,
property manager or broker of Landlord has made any representation or warranty
with respect to the Premises, the Building, the Common Areas or the Project
or
their suitability for the conduct of Tenant's business and, that except only
for
any improvements that Landlord has expressly agreed herein to construct and
install, the Premises are leased in the “AS IS” condition existing at the time
of execution of this Lease.
6
2.02 Common
Areas.
In
addition to the Premises, Tenant shall have the non-exclusive right to use
in
common with other tenants and/or occupants of the Property and Project, the
following areas appurtenant to the Building: parking areas and facilities,
roadways, sidewalks, walkways, parkways, plazas, levees, driveways and
landscaped areas and similar areas and facilities situated within the exterior
areas of the Property and Project and not otherwise designated for the exclusive
or restricted use by Landlord and/or individual tenants of other buildings
located within the Project (collectively, "Common Areas"). Tenant acknowledges
that, except as required by applicable law, Landlord shall have no obligation
to
construct or complete any additional buildings within the Project or
improvements to the Common Areas. Tenant's right to utilize the Common Areas
shall at all times be subject to Landlord's reserved rights therein as described
in Section 17.05 hereof, the Rules and Regulations referred to in Section 17.15
hereof and all encumbrances, easements, ground leases, and covenants, conditions
and restrictions ("CC&Rs") now or hereafter affecting or encumbering the
Project.
ARTICLE
III: PREMISES/IMPROVEMENTS
3.01 Premises
Accepted “AS IS”. Tenant
agrees and acknowledges that it is currently in occupancy of a portion of the
Premises and has inspected the Premises and agrees to lease and possess the
same
in their existing AS-IS, WHERE-IS condition and improvement, subject to its
rights to make certain improvements and alterations pursuant to 3.02 below.
Notwithstanding the above, Tenant acknowledges that Landlord will be required
to
alter and modify the first floor of the Building to contemplate a multi-tenant
building lobby, which shall be completed in substantial accordance with the
plan
attached as Exhibit E. Tenant shall allow Landlord access to the Premises in
order for Landlord to complete such alterations and waives any claims against
Landlord for disruption of Tenant’s use of the Premises in connection
therewith.
3.02 Tenant’s
Right to Make Improvements to Premises.
Tenant
may construct improvements to the Premises (“Tenant Improvements”) pursuant to
the following procedures and conditions:
(a) Construction
of the Tenant Improvements shall commence no later than the
date
twelve (12) mont date
twelve (12) months after the Commencement Date and shall be completed no later
than December 31, 2007 (subject to Excused Delays as defined in Section 17.34
below).
(b) Tenant’s
architect shall prepare preliminary and final working drawings and
specifications for the Tenant Improvements and submit the same to Landlord
for
approval or comment, and such approval and/or consent will not be unreasonably
denied, delayed or conditioned. Such plans, when approved by Landlord, are
referred to herein as the “Tenant Improvement Plans”.
(c) Tenant
shall use Pennon Construction, as its general contractor and SME Electric,
Xxxxxxx Parks and Patriot Fire Protection as the design/build subcontractors,
to
complete the Tenant Improvements pursuant to the Tenant Improvement Plans.
Prior
to commencing construction of the Tenant Improvements, Tenant shall obtain
all
required permits and governmental improvements required for construction of
the
Tenant Improvements.
7
(d) Upon
approval of the Tenant Improvement Plans, the execution by Tenant and its
contractor of a construction contract (which contract shall be subject to
Landlord’s approval, which approval shall not be unreasonably withheld), Tenant
shall cause its contractor to diligently pursue construction of the Tenant
Improvements pursuant to the Tenant Improvement Plans; provided, however,
construction of such improvements will not commence until after the Commencement
Date and shall be completed no later than December 31, 2007. Upon completion
of
the Tenant Improvements, Tenant shall provide Landlord with “as-built” plans for
the Tenant Improvements. Except as otherwise required by this Section 3.02,
Tenant shall comply with the provisions of Sections 9.02 and 9.03 in completion
of the Tenant Improvements.
(e) Tenant
shall pay all costs associated with the improvements to the Premises pursuant
to
the Tenant Improvement Plans, subject to reimbursement by Landlord of the
allowance referred to below. Landlord will provide an allowance (the "Tenant
Improvement Allowance") of $12.00 per rentable square foot of the Premises
toward the cost of the Tenant Improvements as reflected in the construction
contract and changes thereto. Any costs for the Tenant Improvements in excess
of
the Tenant Improvement Allowance, as reflected in the construction contract,
shall be paid and expended by Tenant prior to Landlord’s payment of the Tenant
Improvement Allowance (“Tenant Contribution”) and Tenant shall provide Landlord
with evidence of such funds prior to commencement of construction. After Tenant
has expended the full Tenant Contribution and provided Landlord with evidence
of
the same, then upon Tenant's written request, Landlord shall fund installments
of the Tenant Improvements Allowance, for amounts expended by Tenant in
construction of the Tenant Improvements, not more frequently than monthly within
thirty (30) days of receipt by Landlord of invoices or receipts for Tenant
Improvement work completed together with lien releases for such work to
date.
ARTICLE
IV: TERM
4.01 Term.
The
Term shall commence on the Commencement Date set forth in Section 1.01(k) (the
“Commencement Date”). If for any reason Landlord is unable to deliver possession
of the Premises to Tenant by the Commencement Date in Section 1.01(k), Landlord
shall not be liable to Tenant for any loss or damage resulting therefrom, but
in
that event Rent shall be abated until Landlord delivers possession of the
Premises to Tenant. The Term shall expire upon the date set forth in Section
1.01(j), unless sooner terminated as hereinafter provided.
4.02 Lease
Confirmation.
After
the Commencement Date, Landlord may deliver to Tenant a written confirmation
in
the form attached hereto as Exhibit
F
("Lease
Confirmation") of the Commencement Date and Tenant shall promptly execute and
return the same to Landlord. The Lease Confirmation shall be binding upon Tenant
unless Tenant objects to the notice in writing delivered to Landlord within
five
(5) days of Tenant's receipt of said Lease Confirmation.
8
4.03 Option
to Extend.
Subject
to the terms and conditions set forth below, Landlord
hereby grants Tenant the right to extend the term of the Lease for one
additional period of five (5) years (such extended period is hereinafter
referred to as the "Extended Term") on the same terms and conditions contained
in the Lease, except that (i) Base Rent for the Extended Term shall be as set
forth hereinbelow, and (ii) no additional options to extend shall apply
following the expiration of the Extended Term. Written notice of Tenant's
exercise of its option to extend ("Option to Extend") the Term of this Lease
for
the Extended Term must be given to Landlord no less than nine (9) months prior
to the date the Term of the Lease would otherwise expire. If an Event of Default
is then occurring under this Lease, Tenant shall have no right to extend the
Term of this Lease until such default is cured; provided, that the period of
time within which said Option to Extend may be exercised shall not be extended
or enlarged by reason of Tenant's inability to exercise said Option to Extend
because of a material default. In addition, Tenant’s right to exercise the
Option to Extend shall be conditioned upon Landlord’s review and approval of
Tenant’s credit at the time of exercise of said Option and, if required by
Landlord, Tenant’s posting and maintaining of a Letter of Credit or other
security satisfactory to Landlord during the Extended Term; provided, however,
in the event Tenant satisfies the financial criteria set forth in the last
paragraph of Section 5.05 at the time of exercise of Tenant’s Option to Extend,
the Letter of Credit required to be posted for the Extended Term shall not
exceed $700,000. Subject to the above conditions, in the event Tenant validly
exercises its Option to Extend the Term of this Lease as herein provided, Base
Rent shall be adjusted as of the commencement date of the Extended Term as
follows:
(a) Within
thirty (30) days after exercise of its Option to Extend by Tenant, Landlord
shall provide Tenant with Landlord's determination of the fair market Base
Rent
for the Extended Term, including periodic increases as dictated by the current
market ("Landlord's Determination of Base Rent for Extended Term"). Tenant
shall
provide notice to Landlord within ten (10) days after receipt of such notice
from Landlord as to whether Tenant accepts Landlord's Determination of Base
Rent
for Extended Term. In the event Tenant does not agree to Landlord's
Determination of Base Rent for Extended Term, Landlord and Tenant shall attempt
to agree upon Base Rent for the Premises for the Extended Term, such rent to
be
the fair market rental value of the Premises for the Extended Term, as defined
in Subsection (c) below. If the parties are unable to agree upon the Base Rent
for the Extended Term by the date six (6) months prior to the commencement
of
the Extended Term, then within ten (10) days thereafter each party, at its
own
cost and by giving notice to the other party, shall appoint a real estate
appraiser with at least five (5) years full-time commercial real estate
appraisal experience in the area in which the Premises are located to appraise
and set Base Rent for the Extended Term. If a party does not appoint an
appraiser within ten (10) days after the other party has given notice of the
name of its appraiser, the single appraiser appointed shall be the sole
appraiser and shall set Base Rent for the Extended Term. If each party shall
have so appointed an appraiser, the two appraisers shall meet promptly and
attempt to set the Base Rent for the Extended Term. If the two appraisers are
unable to agree within thirty (30) days after the second appraiser has been
appointed, they shall attempt to select a third appraiser meeting the
qualifications herein stated within ten (10) days after the last day the two
appraisers are given to set Base Rent. If the two appraisers are unable to
agree
on the third appraiser within such ten (10) day period, either of the parties
to
this Lease, by giving five (5) days notice to the other party, may apply to
the
then presiding judge of the Superior Court of King County for the selection
of a
third appraiser meeting the qualifications stated in this paragraph. Each of
the
parties shall bear one-half (1/2) of the cost of appointing the third appraiser
and of paying the third appraiser's fee. The third appraiser, however selected,
shall be a person who has not previously acted in any capacity for either
party.
9
(b) Within
thirty (30) days after the selection of the third appraiser, a majority of
the
appraisers shall set Base Rent for the Extended Term. If a majority of the
appraisers are unable to set Base Rent within the stipulated period of time,
the
three appraisals shall be added together and their total divided by three (3).
The resulting quotient shall be the Base Rent for the Premises during the
Extended Term. If, however, the low appraisal and/or the high appraisal is/are
more than ten percent (10%) lower and/or higher than the middle appraisal,
the
low appraisal and/or the high appraisal shall be disregarded. If only one (1)
appraisal is disregarded, the remaining two (2) appraisals shall be added
together and their total divided by two (2), and the resulting quotient shall
be
Base Rent for the Premises during the Extended Term.
(c) For
purposes of the appraisal, the term "Fair Market Base Rent" shall mean the
price
that a ready and willing tenant would pay, as of the Extended Term commencement
date, as a base rent to a ready and willing landlord of office/bio-tech premises
of comparable to the Premises, in terms of size and quality in their
then-improved state with new paint and carpet, for a comparable term, if such
premises were exposed for lease for a reasonable period of time in the
Bothell/Xxxxxxxx/Bellevue market; including any rent increases over the Extended
Term as dictated by the current market. In no event shall there be deducted
from
such fair market rental the value of any concessions, including without
limitation, tenant improvements, commissions, free rent and/or “down-time”.
Notwithstanding anything above to the contrary, Base Rent for any applicable
Extended Term shall not be less than the Base Rent in effect during the month
immediately preceding the commencement of such Extended Term.
ARTICLE
V: RENT
5.01 Base
Rent.
The
Base Rent ("Base Rent") shall be as set forth in Section 1.01(l). The Base
Rent
shall be paid in advance on the first day of each and every month during the
Term to Landlord at the address set forth in Section 1.01(b) hereof or at such
other place as Landlord may direct in writing, without any prior notice or
demand therefor and without any abatement, deduction, offset or setoff
whatsoever. If the Term commences on any day other than the first day of a
calendar month and/or ends on any day other than the last day of a calendar
month, Base Rent for the fraction(s) of a month at the commencement and/or
upon
the expiration of the Term shall be prorated based upon the actual number of
days in such fractional month(s). On or before November 1, 2005, Tenant shall
deposit with Landlord the Prepaid Rent identified in Section 1.01(m), which
sum
shall be applied by Landlord as indicated in said Section 1.01(m).
10
5.02 Additional
Rent.
In
addition to Base Rent, Tenant shall pay to Landlord all sums of money or other
charges required to be paid by the Tenant under this Lease (other than Base
Rent
and the Prepaid Rent), including but not limited to Tenant’s Share of Operating
Expenses (as defined in Article VI hereof) (all such sums being herein deemed
"Additional Rent"), and whether or not the same are designated "Additional
Rent"
the same shall be payable in lawful money of the United States of America
without deduction, set-off or abatement whatsoever. Any Additional Rent provided
for in this Lease shall become due with the next monthly installment of Base
Rent unless otherwise provided. The term "Rent", as used in this Lease, shall
refer collectively to "Base Rent" and "Additional Rent."
5.03 Late
Payment.
If any
payment of Rent is not received by Landlord within five (5) business days after
the same is due, Tenant shall pay to Landlord a late payment charge equal to
five percent (5%) of the amount of such delinquent payment of Rent in addition
to the installment of Rent then owing, regardless of whether or not a notice
of
default has been given by Landlord. In addition, Tenant shall pay interest
on
such late payment and late charge from the due date of the late payment at
a
nominal annual interest rate equal to the higher of: (a) twelve percent (12%)
or
(b) the prevailing prime (reference) rate as published by Bank of America (or
any successor bank) at its Seattle main branch office, or any successor rate
of
interest, plus three (3) percentage points, but in no event higher than the
maximum rate permitted by applicable law (hereafter the "Default Rate"), until
such amounts are paid. Landlord and Tenant recognize that the damages which
Landlord will suffer as a result of Tenant's failure to timely pay Rent are
difficult or impracticable to ascertain, and agree that said interest and late
charge are a reasonable approximation of the damages which Landlord will suffer
in the event of Tenant's late payment. This provision shall not relieve Tenant
from payment of Rent at the time and in the manner herein specified. Acceptance
by Landlord of any such interest and late charge shall not constitute a waiver
of Tenant's default with respect to said overdue amount, nor shall it prevent
Landlord from exercising any other rights or remedies available to
Landlord.
5.04 Security
Deposit. Tenant
will, on or before November 1, 2005, deposit with Landlord the sum specified
in
Section 1.01(n) of this Lease. This sum shall belong to Landlord and shall
constitute partial consideration for the execution of this Lease. Landlord
shall
pay Tenant the remaining balance thereof, without any liability for interest
thereon, within thirty (30) days after the expiration or prior termination
of
the Lease Term, or any extension thereof, if and only if Tenant has fully
performed all of its financial obligations under the terms of this Lease.
Landlord shall be entitled to withdraw from the deposit the amount of any unpaid
Base Rent, Additional Rent or other charges not paid to Landlord when due,
and
Tenant shall immediately re-deposit an amount equal to that so withdrawn within
five (5) business days of demand.
11
5.05 Credit
Enhancement/Letter of Credit. Not
later
than January 5, 2006, Tenant
shall deliver to Landlord a site draft irrevocable letter of credit issued
by a
bank acceptable to Landlord in its sole discretion, in the amount of $700,000.00
and in the form attached hereto as Exhibit
D (the
"LC"), as security for the full and faithful performance of every provision
of
this Lease to be performed by Tenant. The LC shall be (i) unconditional and
irrevocable, (ii) permit partial draws by Landlord at any time upon written
notice by Landlord that an Event of Default has occurred pursuant to Section
13.01 of this Lease, and (iii) have a term of at least one year, which shall
be
renewable each year throughout the Lease Term, and the Extended Term if the
Option to Extend is exercised. Not later than November 1, 2005, Tenant shall
deliver to Landlord a letter from a bank reasonably acceptable to Landlord
confirming that such bank is prepared to issue the LC as and when required
above.
If
Tenant
defaults with respect to any provision of this Lease, including but not limited
to the provisions relating to the payment of Rent, the repair of damage to
the
Premises caused by Tenant and/or cleaning the Premises upon termination of
this
Lease, Landlord may draw on all or any part of the LC for the payment of any
Rent or any other sum in default and any and all other amounts to which Landlord
may be entitled under this Lease, including without limitation Landlord’s
remedies pursuant to Section 13.02. Upon any draw upon the LC by Landlord,
Tenant shall, upon demand by Landlord, restore the LC to its original amount.
Tenant
shall cause the LC to be renewed for each year of the Lease Term.
If
Tenant shall fail to provide such LC by January 5, 2006, or fails to replace
it
with an approved LC not less than thirty (30) days prior to the expiration
date
of any such LC, then the Tenant shall be considered to be in default under
the
terms of this Lease and Landlord shall have the right to exercise any of its
available remedies pursuant to Section 13.02 of this Lease and shall, in
addition, have the right to draw against the full amount of the LC and
thereafter hold the same as security for Tenant’s obligations under this Lease
for the entire Lease Term, which funds shall be refunded by Landlord to the
LC
issuer or Tenant, as appropriate, if and only if Tenant posts a new LC from
a
financial institution acceptable to Landlord and meeting the terms of this
Section 5.05 prior to the expiration date of the expiring LC, and Tenant is
not
otherwise in default under the Lease. Landlord shall be entitled to withdraw
from such sums the amount of any unpaid Base Rent, Additional Rent or other
charges not paid to Landlord when due. Landlord shall pay Tenant the remaining
balance thereof, if any, without any liability for interest thereon, within
thirty (30) days after the expiration or prior termination of the Lease Term,
if
and only if Tenant has fully performed all of its obligations under the terms
of
this Lease.
Notwithstanding
the above, in the event that as of the commencement of the 25th month of the
Lease Term, Tenant’s most recent 10Q financial statement shows that Tenant has
(a) a tangible net worth equal to or greater than $20,000,000; (b) a current
ratio (current assets divided by current liabilities) of 2.0 or greater, and
(c)
a debt-to-equity ratio equal to or less than 1.0, then the Letter of Credit
amount may be reduced to $600,000. If the criteria set forth in (a)-(c) above
has not been met, the Letter of Credit shall be renewed in the amount of
$700,000.
In
the
event that as of the commencement of the 49th month of the Lease Term, Tenant’s
most recent 10Q financial statement shows that Tenant has (a) a tangible net
worth equal to or greater than $20,000,000; (b) a current ratio of 2.0 or
greater, and (b) a debt-to-equity ration equal to or less than 1.0, then the
Letter of Credit amount may be reduced to $500,000. If the criteria set forth
in
(a)-(c) above has not been met, the Letter of Credit shall be renewed or
replaced with a Letter of Credit in the amount of $700,000.
12
ARTICLE
VI: ADDITIONAL
RENT AND CHARGES
6.01 Operating
Expenses.
In
addition to Base Rent and other sums payable by Tenant under this Lease, Tenant
shall pay to Landlord, as Additional Rent, Tenant's Share of the Operating
Expenses (as such term is defined below).
(a) Estimated
Expenses; Annual Reconciliation.
(i) Upon
the
Commencement of the Lease Term, and thereafter prior to the commencement of
each
calendar year occurring wholly or partially within the Term or as soon
thereafter as practical, Landlord shall estimate the annual Operating Expenses
payable by Tenant pursuant to this provision, and Tenant shall pay to Landlord
on the first day of each month in advance, one-twelfth (1/12th) of Tenant's
Share of such estimated amount. In the event that during any calendar year
of
the Term, Landlord determines that the actual Operating Expenses for such year
will exceed the estimated Operating Expenses, Landlord may revise such estimate
by written notice to Tenant, and Tenant shall pay to Landlord, concurrently
with
the regular monthly rent payment next due following the receipt of the revised
estimate, an amount equal to the difference between the initial monthly estimate
and the revised monthly estimate multiplied by the number of months expired
during such calendar year and shall also pay an amount equal to the revised
monthly estimate for the month of such payment. Subsequent installments shall
be
payable concurrently with the regular monthly Base Rent due for the balance
of
the calendar year and shall continue until the next calendar year's estimate
is
rendered or Landlord next revises its estimate of Operating Expenses, whichever
occurs sooner.
(ii) Within
one hundred twenty (120) days following the end of each year or a reasonable
time thereafter, Landlord shall provide Tenant with a written statement of
the
actual total Operating Expenses for such year and there shall be an adjustment
made to account for any difference between Tenant's Share of the actual and
the
estimated Operating Expenses for the previous year. If Tenant has overpaid
the
amount of Operating Expenses owing pursuant to this provision, Landlord shall,
provided Tenant is not in default hereunder, credit such overpayment to Tenant's
account. If Tenant has underpaid the amount of Operating Expenses owing pursuant
to this provision, Tenant shall pay the total amount of such deficiency to
Landlord as Additional Rent with the next payment of Base Rent due under
this
Lease following delivery of written notice of said deficiency from Landlord
to
Tenant. Notwithstanding anything in this section 6.01 to the contrary,
commencing with the second calendar year of the Lease Term, Tenant’s Share of
Controllable Operating Expenses, (defined as the cost of landscaping, parking
lot sweeping and snow removal, maintenance and other controllable expenses
associated with the physical upkeep of the Common Areas) shall not increase
by
more than 6% per calendar year on a cumulative basis.
13
(iii) In
the
event the average occupancy level of the Building or Project, as the case may
be, for any calendar year was or is not one hundred percent (100%) of full
occupancy, then the estimated Operating Expenses and actual Operating Expenses
for such year shall be proportionately adjusted by Landlord to reflect those
costs which have occurred had the Building and/or Project, as the case may
be,
been one hundred percent (100%) occupied during such year.
(iv) Landlord
shall keep its books of account and records concerning Operating Expenses in
compliance with generally accepted accounting principles and retain the same
for
one (1) years after the calendar year for which they were prepared; provided,
however in the event Tenant has given written notice to Landlord of a specified
dispute or objection regarding Operating Expenses charged by Landlord hereunder,
Landlord will retain such books of account and records for the applicable period
until final resolution of the dispute or objection. Unless Tenant objects in
writing regarding specific discrepancies in the Operating Expense calculations
for any calendar year within ninety (90) days after receipt of Landlord's final
calculations for such calendar year, Tenant shall be deemed to have approved
the
same and to have waived the right to object to such calculations.
(b) Defined
terms.
(i) Operating
Expenses Inclusions.
For
purposes of this Lease, "Operating Expenses" means an amount equivalent to
the
total of all expenses and costs incurred in connection with the ownership,
operation, management, maintenance, repair and replacement of the Project,
the
Property, the Building, the Premises and the Common Areas, including, but in
no
way limited to, the following:
A. The
costs
of operating, maintaining and repairing the Project, the Property, the Building,
the Premises and the Common Areas, including but not limited to: janitorial
services, gardening and landscaping; painting; lighting; sanitary control;
personal property taxes; public liability insurance and property damage
insurance; utilities for Common Areas; licenses and fees for Common Area
facilities; sweeping; removal of snow and ice, trash, rubbish, garbage and
other
refuse; repairing, restriping and resurfacing of parking area; and maintenance
of and property taxes on personal property, machinery and equipment used in
Common Area maintenance.
B. All
Real
Property Taxes (as defined below) assessed against the Project, the Building
and/or the Common Areas, as applicable, including land, building(s) (including
the Building) and improvements thereon or thereto.
C. All
premiums for liability, terrorism, fire, extended coverage and other insurance
the Landlord reasonably deems necessary and keeps in force on or with respect
to
the Project, the Property, the Building of which the Premises are a part and/or
the Common Areas, as the case may be, and commercially reasonable deductibles
payable in connection therewith.
14
D. The
cost
of operating, maintaining and repairing any electrical, mechanical, automatic
fire sprinkler and other utilities systems serving the Premises which serve
the
Premises in common with the entire Building.
E. The
cost
of maintenance and repairof the structural and non-structural portions of the
roof, roof membrane, exterior walls, foundation, and other exterior portions
of
the Project and Building, and reasonable reserves for the same.
F. Reasonable
property management charges not to exceeed current market rates, together with
the
costs
incurred in the operation of a management office relating to the Project,
including, but not limited to the cost of rent and utilities with respect
thereto.
G. Costs
of
replacements and improvements which are necessary to adequately maintain or
protect the Project, the Building and/or the Common Areas, as the case may
be,
and/or which are required by law or governmental regulation enacted after the
date of this Lease, which are of a capital nature (as determined by GAAP
accounting) to the extent amortization over the useful life thereof with
interest at 11% per annum is applicable to the periods during the Lease Term,
and reasonable reserves for the same.
H. Any
other
costs levied, assessed or imposed by or at the direction of, or resulting from
statutes or regulations or interpretations thereof promulgated by any federal
or
governmental authority in connection with the use or occupancy of the Project.
I. Assessments
made on or with respect to the Project made pursuant to any CC&Rs , Public
Utility District conditions, Local Improvement District conditions and/or
owner’s associations affecting the Project, or any portion thereof.
J. Reasonable
reserves for replacement of improvements located in, on or under the Project,
Property or Common Areas.
K. Compensation
(including wages and employer paid benefits and taxes ) of employees and
contractors engaged in the operation and maintenance of the Project, Property
and/or Building.
(ii) Operating
Expense Exclusions.
Notwithstanding the foregoing, Operating Expenses to be reimbursed by Tenant
shall not include:
A. Expenses
which are separately metered or calculated for the Premises or other leased
area
of the Project or the Building, as the case may be, which expenses shall be
billed separately to Tenant or such other tenant(s), as applicable.
15
B. Costs
incurred in connection with the initial construction or design of the Building
or to correct defects in the original construction or design of the
Building.
C. Depreciation.
D. Costs,
fines or penalties incurred due to violation by Landlord of any applicable
law.
E. Expenses
incurred by Landlord in respect of individual tenants and/or the improvement
or
renovation of tenants' leasehold improvements, including leasing commissions,
attorneys' fees arising from lease disputes and other specific costs incurred
for the account of, separately billed to and paid by specific
tenants.
F. Repairs
or replacements to the extent that the cost of the same is recoverable by the
Landlord pursuant to original construction warranties.
G. Interest
on debt or capital retirement of debt, and costs of capital improvements except
as expressly provided above.
H. Legal
fees and disbursements relating to legal matters other than such fees and costs
directly relating to Operating Expense issues in connection with the Project,
the Building, the Premises and/or the Common Areas.
I. Costs
incurred due to the gross negligence of Landlord or breach by Landlord of its
obligations under any lease.
Additional
Rent payable by Tenant which would not otherwise be due until after the date
of
the expiration or earlier termination of the Lease shall, if the exact amount
is
uncertain at the time this Lease expires or terminates, be paid by Tenant to
Landlord upon such expiration or termination in an amount to be determined
by
Landlord, with an adjustment to be made once the exact amount is
known.
(iii) Tenant's
Share.
For
purposes of this Lease, "Tenant's Share" means the percentage, as set forth
in
Section 1.01(o) or Section 1.01(p), as appropriate, and obtained by dividing
the
Rentable Area of the Premises by the aggregate Rentable Area of all premises
available for lease, whether leased or not, in the Building or the Project,
as
applicable with respect to any specific Operating Expense, subject to adjustment
in the event of changes in Rentable Area of the Project, Building and/or
Premises. Notwithstanding the above, Landlord shall have the right, but not
the
obligation, to equitably adjust Tenant's Share of any specific Operating Expense
so as to render such expense payable proportionately by those tenants benefited
by the same or otherwise in order to appropriately allocate such Operating
Expense to cover the area covered by such Operating Expense.
16
(iv) Real
Property Taxes.
For
purposes of this Lease, "Real Property Taxes" shall consist of all real estate
taxes and all other taxes relating to the Building, the Common Areas and/or
the
Project, as applicable, all other taxes which may be levied in lieu of real
estate taxes, all assessments, local improvement districts, assessment bonds,
levies, fees and other governmental charges, including, but not limited to,
charges for traffic facilities and improvements, water service studies, and
improvements or amounts necessary to be expended because of governmental orders,
whether general or special, ordinary or extraordinary, unforeseen as well as
foreseen, of any kind and nature for public improvements, services, benefits,
or
any other purpose, which are assessed, levied, confirmed, imposed or become
a
lien upon the Building or any portion of the Project, the Property and/or the
Common Areas, or become payable during the Term (or which become payable after
the expiration or earlier termination hereof and are attributable in whole
or in
part to any period during the Term hereof), together with all costs and expenses
incurred by Landlord in successfully contesting, resisting or appealing any
such
taxes, rates, duties, levies or assessments. "Real Property Taxes" shall exclude
any franchise, estate, inheritance or succession transfer tax of Landlord,
or
any federal or state income, profits or revenue tax or charge upon the net
income of Landlord from all sources; provided, however, that if at any time
during the Term there is levied or assessed against Landlord a federal, state
or
local tax or excise tax on rent, or any other tax however described on account
of rent or gross receipts or any portion thereof, Tenant shall pay one hundred
percent (100%) of the Tenant's Share of any said tax or excise applicable to
Tenant's Rent as Additional Rent.
6.02 Tenant's
Personal Property Taxes.
Tenant
shall pay or cause to be paid, prior to delinquency, any and all taxes and
assessments levied upon all trade fixtures, inventories and other real or
personal property placed or installed in and upon the Premises by Tenant. If
any
such taxes on Tenant's personal property or trade fixtures are levied against
Landlord or Landlord's property or if the assessed value of the Building is
increased by the inclusion therein of a value placed upon such real or personal
property or trade fixtures of Tenant, and if Landlord pays the taxes based
upon
such increased assessment, Tenant shall, upon demand, repay to Landlord the
taxes so levied or the portion of such taxes resulting from such increase in
the
assessment.
ARTICLE
VII: INSURANCE
7.01 Landlord's
Insurance.
During
the Term, Landlord shall procure and maintain in full force and effect with
respect to the Building (i) a policy or policies of property insurance
(including, to the extent required, sprinkler leakage, vandalism and malicious
mischief coverage, and any other endorsements required by the holder of any
fee
or leasehold mortgage and earthquake, flood and terrorism insurance to the
extent Landlord reasonably deems prudent and/or to the extent required by any
mortgagee); and (ii) a policy of commercial liability insurance, in the form
and
content acceptable to Landlord, insuring Landlord’s activities with respect to
the Premises, the Common Areas and the Project for loss, damage or liability
for
personal injury or death of any person or loss or damage to property occurring
in, upon or about the Premises, Common Areas or Project in an amount of not
less
than Three Million Dollars ($3,000,000) combined single limit. If the annual
premiums charged Landlord for such casualty and/or liability insurance exceed
the standard premium rates because the nature of Tenant's operations results
in
increased exposure, then Tenant shall, upon receipt of appropriate premium
invoices, reimburse Landlord for such increased amount. Landlord shall have
the
right, at its option, to keep and maintain in full force and effect during
the
Term such other insurance in such amounts and on such terms as Landlord and/or
any mortgagees or the beneficiary of any trust deed against the Building, or
all
or a portion of the Project, may reasonably require from time to time in form,
in amounts and for insurance risks against which a prudent Landlord would
protect itself, including but not limited to rental abatement, rental
interruption, earthquake, flood and terrorism insurance.
17
7.02 Tenant’s
Public Liability.
Tenant
shall, at its own cost and expense, keep and maintain in full force during
the
Term and any other period of occupancy of the Premises by Tenant, a policy
or
policies of commercial liability insurance, written by a reputable insurance
company authorized to do business in the State of Washington in form and content
acceptable to Landlord insuring Tenant's activities with respect to the
Premises, the Common Areas and the Project for loss, damage or liability for
personal injury or death of any person or loss or damage to property occurring
in, upon or about the Premises in an amount of not less than Three Million
Dollars ($3,000,000) combined single limit or such larger amounts as may
hereafter be reasonably requested by Landlord. The policy shall insure the
hazards of the Premises and Tenant's operations therein, shall include
independent contractor and contractual liability coverage (covering the
indemnity contained in Section 7.08 hereof) and shall (a) name Landlord.
Landlord’s managing agent and the Landlord’s mortgagee under a mortgage or
beneficiary under a deed of trust either having a first lien against the
Building or Project (the “Lender”) as an additional insured; (b) contain a
cross-liability provision and; (c) contain a provision that the insurance
provided hereunder shall be primary and non-contributing with any other
insurance available to Landlord.
7.03 Tenant's
Property and Other Insurance.
Tenant
shall, at its own cost and expense, keep and maintain in full force during
the
Term and any other period of occupancy of the Premises, a policy or policies
of
standard form property insurance insuring against the perils of fire, extended
coverage, vandalism, malicious mischief, special extended coverage and sprinkler
leakage. This insurance policy shall be upon all property owned by Tenant,
for
which Tenant is legally liable or that was installed at Tenant's expense, and
which is located in the Premises, including without limitation, furniture,
fittings, installations, cabling, fixtures (other than the improvements
installed by Landlord), and any other personal property, in the amount of not
less than one hundred percent (100%) of the full replacement costs thereof.
This
insurance policy shall also insure direct or indirect loss of Tenant's earning
attributable to Tenant's inability to use fully or obtain access to the
Premises.
7.04 Form
of Insurance/Certificates.
All
policies shall be written in a form satisfactory to Landlord and shall be taken
out with insurance companies licensed in the state in which the Building is
located and holding a General Policy Holder's Rating of "A-" and a financial
rating of "X" or better, as set forth in the most current issues of Best's
Insurance Guide. Tenant shall furnish to Landlord, prior to Tenant's entry
into
the Premises and thereafter within ten (10) days prior to the expiration of
each
such policy, a certificate of insurance (or renewal thereof) issued by the
insurance carrier of each policy of insurance carried by Tenant pursuant hereto
and, upon request by Landlord, a copy of each such policy of insurance. Said
certificates shall expressly provide that such policies shall not be cancelable
or subject to reduction of coverage below the minimum amounts required by this
Lease or required by any lender having an interest in the Building or otherwise
be subject to modification except after thirty (30) days prior written notice
to
the parties named as insured in this Section 7.04.
18
7.05 Tenant's
Failure.
If
Tenant fails to maintain any insurance required in the Lease, Tenant shall
be
liable for any loss or cost resulting from said failure, and Landlord shall
have
the right to obtain such insurance on Tenant's behalf and at Tenant's sole
expense. This Section 7.05 shall not be deemed to be a waiver of any of
Landlord's rights and remedies under any other Section of this Lease. If
Landlord obtains any insurance which is the responsibility of Tenant to obtain
under this Article VII, Landlord shall deliver to Tenant a written statement
setting forth the cost of any such insurance and showing in reasonable detail
the manner in which it has been computed and Tenant shall promptly remit said
amount as Additional Rent to Landlord.
7.06 Waiver
of Subrogation.
Any all
risk policy or policies of fire, extended coverage or similar casualty insurance
which either party obtains in connection with the Building, the Premises or
Tenant's personal property therein shall include a clause or endorsement denying
the insurer any rights of subrogation against the other party to the extent
rights have been waived by the insured prior to the occurrence of injury or
loss. Landlord and Tenant waive any rights of recovery against the other for
liability, injury or loss due to hazards covered by insurance containing such
a
waiver of subrogation clause or endorsement to the extent of the liability,
injury or loss covered thereby.
7.07 Tenant's
Properties and Fixtures.
Tenant
assumes the risk of damage to any furniture, equipment, machinery, goods,
supplies or fixtures which are or remain the property of Tenant or as to which
Tenant retains the right of removal from the Premises, except to the extent
due
to the negligent act or omission, or willful misconduct of Landlord. Tenant
shall not do or keep anything in or about the Premises (except those things
Tenant presently does and keeps in connection with the uses set forth in Section
10.01) which will in any way tend to increase insurance rates paid by Landlord
and maintained with respect to the Premises and/or the Project unless Tenant
pays directly to Landlord the increase cost of the premiums. In no event shall
Tenant carry on any activities which would invalidate any insurance coverage
maintained by Landlord. If Tenant's occupancy or business in, or on, the
Premises, whether or not Landlord has consented to the same, results in any
increase in premiums for the insurance carried by Landlord with respect to
the
Building and/or the Project, Tenant shall pay any such increase in premiums
as
Additional Rent within ten (10) days after being billed therefore by Landlord.
In determining whether increased premiums are a result of Tenant's use of the
Building, a schedule issued by the organization computing the insurance rate
on
the Building and/or the Project showing the various components of such rate
shall be conclusive evidence of the several items and charges which make up
such
rate. Tenant shall promptly comply with all reasonable requirements of the
insurance underwriters and/or any governmental authority having jurisdiction
thereover, necessary for the maintenance of reasonable fire and extended
insurance for the Building and/or the Project.
19
7.08 Indemnification.
(a) (i) Except
and to the extent as may arise out of the negligence or willful misconduct
of
Landlord and/or its agents, employees or contractors, Tenant, as a material
part
of the consideration to be rendered to Landlord, hereby indemnifies and agrees
to defend and hold Landlord, Landlord’s managing agent and Lender, the Premises
and the Project harmless for, from and against (i) any and all liability,
penalties, losses, damages, costs and expenses, demands, causes of action,
claims, judgments or appeals arising from any injury to any person or persons
or
any damage to any property to the extent as a result of Tenant's or Tenants'
officers, employees, agents, assignees, subtenants, concessionaires, licensees,
contractors or invitees' use, maintenance, occupation, operation or control
of
the Premises during the Term, or resulting from any breach or default in the
performance of any obligation to be performed by Tenant hereunder or for which
Tenant is responsible under the terms of the Lease or pursuant to any
governmental or insurance requirement, or to the extent arising from any act,
neglect, fault or omission of Tenant or any of Tenant's officers, employees,
agents, servants, subtenants, concessionaires, licensees, contractors or
invitees, and (ii) from and against all reasonable legal costs and charges,
including reasonable attorneys' and other reasonable professional fees, incurred
in and about any of such matters and the defense of any action arising out
of
the same or in discharging the Project, the Property and/or Premises or any
part
thereof from any and all liens, charges or judgments which may accrue or be
placed thereon by reason of any act or omission of the Tenant,
(ii) Landlord,
as a material part of the consideration to be rendered to Tenant, hereby
indemnifies and agrees to defend and hold Tenant and the Premises harmless
from
and against (i) any and all liability, penalties, losses, damages, costs and
expenses, demands, causes of action, claims, judgments or appeals arising from
any injury to any person or persons or any damage to any property to the extent
as a result of Landlord's or Landlord's' officers, employees, agents,
maintenance, occupation, operation or control of the Building, Common Areas
or
Project during the Term, or contractors, negligence or willful misconduct,
or
arising from any act, neglect, fault or omission of Landlord or any of
Landlord's officers, employees, agents, servants, subtenants, concessionaires,
licensees, contractors or invitees, and (ii) from and against all reasonable
legal costs and charges, including reasonable attorneys' and other reasonable
professional fees, incurred in and about any of such matters and the defense
of
any action arising out of the same or in discharging Tenant and/or Premises
or
any part thereof from any and all liens, charges or judgments which may accrue
or be placed thereon by reason of any act or omission of the Landlord, except
and to the extent as may arise out of the negligence or willful misconduct
of
Tenant and/or its officers, agents, employees, assignees, subtenants,
concessionaires, licensees, contractors, or invitees.
(b) In
the
event of the concurrent negligence of Tenant, its sublessees, assignees,
invitees, agents, employees, contractors, or licensees on the one hand and
the
negligence of Landlord, its agents, employees or contractors on the other hand,
which concurrent negligence results in injury or damage to persons or property
of any nature and howsoever caused, and relates to the construction, alteration,
repair, addition to, subtraction from, improvement to or maintenance of the
Common Areas or Premises such that RCW 4.24.115 is applicable, then (i) Tenant's
obligation to indemnify Landlord as set forth in this Section 7.08 shall be
limited to the extent of Tenant's negligence and that of Tenant's officers,
sublessees, assignees, invitees, agents, employees, contractors or licensees,
including Tenant's proportional share of costs, reasonable attorneys' fees
and
expenses incurred in connection with any claim, action or proceeding brought
with respect to such injury or damage; and (ii) Landlord’s obligation to
indemnify Tenant as set forth in this Section 7.08 shall be limited to the
extent of Landlord's negligence and that of Landlord’s officers, agents,
employees, contractors or licensees, including Tenant's proportional share
of
costs, reasonable attorneys' fees and expenses incurred in connection with
any
claim, action or proceeding brought with respect to such injury or damage.
20
(c) LANDLORD
AND TENANT HEREBY WAIVE AND AGREE THAT IT WILL NOT ASSERT ITS INDUSTRIAL
INSURANCE IMMUNITY UNDER TITLE 51 RCW IF SUCH ASSERTION WOULD BE INCONSISTENT
WITH THE RIGHT OF THE OTHER PARTY TO INDEMNIFICATION PURSUANT TO THIS ARTICLE
7.
THE PARTIES AGREE THAT THIS PROVISION WAS MUTUALLY NEGOTIATED AND RELATES ONLY
TO A WAIVER OF IMMUNITY WITH RESPECT TO THE OTHER PARTY AND NO THIRD PARTY,
INCLUDING BUT NOT LIMITED TO, ANY INJURED EMPLOYEE OF EITHER PARTY, SHALL BE
A
THIRD PARTY BENEFICIARY OF THIS PROVISION.
(d) In
no
event shall Landlord, its agents, employees and/or contractors be liable for
any
personal injury or death or property damage caused by other lessees or persons
unrelated to Landlord in or about the Premises, the Project and/or the Building,
as the case may be, or caused by public or quasi-public work, or for
consequential damages arising out of any loss of the use of the Premises or
any
equipment or facilities therein by Tenant or any person claiming through or
under Tenant.
7.09 Damage
to Tenant's Property.
Notwithstanding the provisions of Section 7.08 to the contrary, except to the
extent due to the negligence or willful misconduct of Landlord, Landlord, its
agents, employees and/or contractors shall not be liable for (i) any damage
to
property entrusted to employees or security officers of the Project, Building
or
the Property, (ii) loss or damage to any property by theft or otherwise, or
(iii) any injury or damage to persons or property resulting from fire,
explosion, falling substances or materials, steam, gas, electricity, water
or
rain which may leak from any part of the Building, the Common Areas, Project
or
the Property or from the pipes, appliances or plumbing work therein or from
the
roof, street, or subsurface or from any other place or resulting from dampness
or any other cause, except to the extent Landlord receives consideration for
such damage or injury from a third party. Neither Landlord nor its agents,
employees or contractors shall be liable for interference with light. Tenant
shall give prompt notice to Landlord and appropriate emergency response
officials if Tenant is or becomes aware of fire or accidents in the Building,
the Common Areas or any other portion of the Project or of defects therein
in
the fixtures or equipment.
21
ARTICLE
VIII: REPAIRS
AND MAINTENANCE
8.01 Landlord
Repairs and Maintenance.
Subject
to Landlord's right to reimbursement from Tenant pursuant to Sections 6.01
and
8.03, to the extent applicable, Landlord shall at its expense maintain in good
condition and repair the structural portions of the Building including without
limitation the foundation, roof and membrane and shall maintain in good
condition the exterior of the Building, utilities to their point of connection
to the Premises and the Common Areas of the Project. Landlord shall not be
liable for any failure to make any repairs or to perform any maintenance unless
such failure shall persist for an unreasonable time after written notice of
the
need for such repairs or maintenance is given to Landlord by Tenant. There
shall
be no abatement of Rent and, except for the gross negligence or willful
misconduct of Landlord or its employees, no liability of Landlord by reason
of
any injury to or interference with Tenant's business arising from the making
of
any repairs, alterations or improvement in or to any portion of the Premises
or
in or to fixtures, appurtenances and equipment therein; provided, that Landlord,
its employees, agents and contractors use reasonable efforts not to unreasonably
interfere with Tenant's business in exercise of Landlord's rights or obligations
hereunder. Except as may otherwise be expressly set forth herein, Tenant affirms
that (a) neither Landlord nor any agent, employee or officer of Landlord has
made any representation regarding the condition of the Premises, the Building,
the Common Areas or the Project, and (b) Landlord shall not be obligated to
undertake any repair, alteration, remodel, improvement, painting or
decorating.
8.02 Utilities
and Services.
Subject
to reimbursement pursuant to Sections 6.01 and 8.03 hereof, to the extent
applicable, Landlord shall furnish or cause to be furnished to the Premises
lines for water, electricity, sewage and telephone. Tenant shall pay before
delinquency, at its sole cost and expense, all charges for water, heat,
electricity, power, telephone service, sewer service charges and other utilities
or services charged or attributable to the Premises; provided, however, that
if
any such services or utilities shall be billed to Landlord and are not
separately billed to the Premises, Tenant shall pay to Landlord as Additional
Rent, an amount equal to that proportion of the total charges therefor which
the
Rentable Area of the Premises bears to the rentable area of leased area covered
by such charges. Notwithstanding the above, in the event Tenant uses any such
services during non-standard building hours, Tenant shall pay the actual cost
of
such after-hours services used by Tenant.
8.03 Tenant
Repairs and Maintenance.
Except
as otherwise set forth in Sections 8.01 and 8.02 above, Tenant shall, at
Tenant's sole cost and expense, keep, maintain and, to the extent reasonably
required, replace the entire Premises, including but not by way of limitation,
all interior walls, doors, ceiling, fixtures, furnishings, drapes, specialty
lamps, light bulbs, starters and ballasts, subfloors, carpets and floor
coverings, and heating, ventilation, air-conditioning and other utility and
mechanical systems within the Premises to the extent serving the Premises
exclusively, in good repair and in a clean and safe condition; provided that,
upon five (5) days written notice to Tenant, Landlord shall have the right
to
perform such work on behalf of Tenant in which event Tenant shall reimburse
Landlord for the cost thereof promptly upon demand therefor. In addition, if
any
repair or maintenance is necessary or prudent under Sections 8.01 or 8.02 as
a
result of an act or omission of Tenant or its agents, employees or contractors,
Tenant shall reimburse Landlord for the entire cost of any such repair or
maintenance immediately upon written demand therefor. Upon expiration or earlier
termination of the Term, Tenant shall surrender the Premises to Landlord in
the
same condition as when leased, reasonable wear and tear, permanent improvements
existing in the Premises as of the Commencement Date or thereafter approved
by
Landlord (except to the extent Landlord gives notice to Tenant at the time
of
approval of any such future improvements (including without limitation the
improvements constructed by Tenant pursuant to Section 3.02 above) that Tenant
will be required to remove and restore the same upon expiration or termination
of this Lease), and damage by fire or other casualty not required to be repaired
by Tenant pursuant to this Lease excepted.
22
8.04 Non-liability
of Landlord.
Notwithstanding anything to the contrary contained in Sections 8.01 or 8.02
above or elsewhere in this Lease, Landlord shall not be in default hereunder
or
be liable for any damages directly or indirectly resulting from, nor shall
the
Rent herein reserved be abated or rebated by reason of (a) the interruption
or
curtailment of the use of the Premises as a result of the installation of any
equipment in connection with the Building or Project; or (b) any failure to
furnish or delay in furnishing any services required to be provided by Landlord,
unless and to the extent such failure or delay is caused by accident or any
condition created by Landlord's active gross negligence; or (c) the limitation,
curtailment, rationing or restriction of the use of water or electricity, gas
or
any other form of energy or any other service or utility whatsoever serving
the
Premises or Project.
8.05 Inspection
of Premises.
Landlord may enter the Premises to complete construction undertaken by Landlord
on the Premises, to inspect, clean, improve or repair the same, to inspect
the
performance by Tenant of the terms and conditions hereof, show the Premises
to
prospective purchasers, tenants and lenders and for all other purposes as
Landlord shall reasonably deem necessary or appropriate; provided, that Landlord
shall use reasonable efforts not to interfere with Tenant's business in exercise
of Landlord's rights hereunder and shall comply with any reasonable security
procedures developed by Tenant and conveyed in writing to Landlord; and
provided, further that Landlord shall give Tenant not less than 24-hours notice
of its right to enter the Premises (except in the event of an emergency). Tenant
hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment
of
the Premises and any other loss in, upon or about the Premises, arising from
exercise by Landlord of its rights hereunder except as otherwise provided in
Article XI hereof.
ARTICLE
IX: FIXTURES,
PERSONAL PROPERTY AND ALTERATIONS
9.01 Fixtures
and Personal Property.
Tenant,
at Tenant's expense, may install any necessary trade fixtures, equipment and
furniture in the Premises, provided that such items are installed and are
removable without damage to the structure of the Premises, including, but not
limited to, damage to drywall, doors, door frames and floors. Landlord reserves
the right to approve or disapprove of any interior improvements which are
visible from outside the Premises or which violate the CC&R's on wholly
aesthetic grounds. Such improvements must be submitted for Landlord's written
approval prior to installation, or Landlord may remove or replace such items
at
Tenant's sole expense. Said trade fixtures, equipment, furniture, cabling and
personal property shall remain Tenant's property and shall be maintained in
good
condition while on the Premises and removed by Tenant upon the expiration or
earlier termination of the Lease except as otherwise agreed by Landlord and
Tenant. As a covenant which shall survive the expiration or earlier termination
of the Lease, Tenant shall repair, at Tenant's sole expense, or, if Tenant
fails
to complete such repairs prior to such expiration or termination date, then,
at
Landlord’s election, reimburse Landlord for the cost to repair all damage caused
by the installation or removal of said trade fixtures, equipment, cabling,
furniture, personal property or temporary improvements; provided that, except
as
otherwise expressly provided by this Lease, Tenant shall not be required to
remove or restore any permanent improvements which have been approved by
Landlord (except to the extent Landlord gives notice to Tenant at the time
of
approval that removal of any such improvements will be required to be removed
upon termination or expiration of the Lease). If Tenant fails to remove the
foregoing items prior to or upon the expiration or earlier termination of this
Lease, Landlord, at its option and without liability to Tenant for loss thereof,
may keep and use them or remove any or all of them and cause them to be stored
or sold in accordance with applicable law, and Tenant shall, upon demand of
Landlord, pay to Landlord as Additional Rent hereunder all costs and expenses
incurred by Landlord in so storing and/or selling said items. In the event
any
such fixtures, equipment, and/or furniture of Tenant are sold by Landlord,
the
proceeds of such sale shall be applied, first, to all expenses of Landlord
incurred in connection with storage and sale; second, to any amounts owed by
Tenant to Landlord under this Lease or otherwise, and, third, the remainder,
if
any, shall be paid to Tenant.
23
9.02 Alterations.
Tenant
shall not make or allow to be made any material alterations, additions or
improvements to the Premises (defined as alterations, additions or improvements
costing in excess of $10,000 individually or $25,000 in the aggregate with
respect to separate items relating to the same improvement or alteration, or
alterations, additions or improvements which affect the structure or exterior
of
the Building or any building, mechanical, electrical or life safety system),
either at the inception of the Lease or subsequently during the Term, without
obtaining the prior written consent of Landlord, that consent may be withheld
in
Landlord’s sole discretion with respect to any alteration, addition or
improvement that affects the structure or exterior of the Building or any
building, mechanical, electrical or life safety systems. Tenant shall deliver
to
Landlord the contractor's name, references and state license number, a
certificate of liability insurance naming Landlord and Landlord’s manager and
lender(s) as an additional insured, as well as full and complete plans and
specifications of all such alterations, additions or improvements, and any
subsequent modifications or additions to such plans and specifications, and
no
proposed work shall be commenced or continued by Tenant until Landlord has
received and given its written approval of each of the foregoing. Landlord
shall
either approve or disapprove any proposed alteration, addition or improvement
on
or before twenty (20) days following receipt of all of the foregoing items.
Landlord does not expressly or implicitly covenant or warrant that any plans
or
specifications submitted by Tenant are accurate, safe or sufficient or that
the
same comply with any applicable laws, ordinances, building codes, or the like.
Further, Tenant shall indemnify, protect, defend and hold Landlord and
Landlord’s agents, employees and contractors and the Building harmless for, from
and against any loss, damage, liability, claims, cost or expense, including
attorneys' fees and costs, incurred as a result of any defects in design,
materials or workmanship resulting from Tenant's alterations, additions or
improvements to the Premises. All alterations, telephone or telecommunications
lines, cables, conduits and equipment and all other additions or improvements
to
the Premises made by Tenant shall remain the property of Tenant until
termination of the Lease, at which time they shall, unless otherwise elected
by
Landlord by written notice to Tenant, be and become the property of Landlord.
Landlord may, as a condition to approval of any such alterations, additions
or
improvements, require Tenant to remove any partitions, counters, railings,
telephone and telecommunications lines, cables, conduits and equipment and/or
other improvements installed by Tenant during the Term, and Tenant shall repair
all damage resulting from such removal or, in the event Tenant fails to do
so,
at Landlord's option, shall pay to Landlord all costs arising from such removal.
All repairs, alterations, additions and restorations by Tenant hereinafter
required or permitted shall be done in a good and workmanlike manner and in
compliance with the plans and specifications approved by Landlord and in
compliance with all applicable laws and ordinances, building codes, bylaws,
regulations and orders of any federal, state, county, municipal or other public
authority and of the insurers of the Premises and as-built plans and
specifications shall be provided to Landlord by Tenant upon completion of the
work. If required by Landlord, Tenant shall secure at Tenant's own cost and
expense a completion and lien indemnity bond or other adequate security,
including without limitation an indemnity agreement from Tenant's parent in
form
and substance reasonably satisfactory to Landlord. Tenant shall reimburse
Landlord for Landlord's reasonable charges (including any professional fees
incurred by Landlord and a reasonable administrative fee as established by
Landlord from time to time) for reviewing and approving or disapproving plans
and specifications for any proposed alterations.
24
9.03 Liens.
Tenant
shall promptly file and/or record, as applicable, all notices of completion
provided for by law, and shall pay and discharge all claims for work or labor
done, supplies furnished or services rendered at the request of Tenant or at
the
request of Landlord on behalf of Tenant, and shall keep the Premises, the
Property and the Project free and clear of all mechanics' and materialmen's
liens in connection therewith. Landlord shall have the right, and shall be
given
ten (10) business days written notice by Tenant prior to commencement of the
work, to post or keep posted on the Premises, or in the immediate vicinity
thereof, any notices of non-responsibility for any construction, alteration,
or
repair of the Premises by Tenant. If any such lien is filed, Tenant shall cause
same to be discharged of record within ten (10) days following written notice
thereof, or if Tenant disputes the correctness or validity of any claim of
lien,
Landlord may, in its reasonable discretion, permit Tenant to post or provide
security in a form and amount acceptable to Landlord to insure that title to
the
Project remains free from the lien claimed. If said lien is not timely
discharged Landlord may, but shall not be required to, take such action or
pay
such amount as may be necessary to remove such lien and Tenant shall pay to
Landlord as Additional Rent any such amounts expended by Landlord, together
with
interest thereon at the Default Rate (as defined in Section 5.03 hereof), within
five (5) days after notice is received from Landlord of the amount expended
by
Landlord.
25
ARTICLE
X: USE
AND COMPLIANCE WITH LAWS
10.01 General
Use and Compliance with Laws.
Tenant
shall only use the Premises for offices related to Tenant's business described
in Section 1.01(e) above, and uses customarily incidental thereto and which
are
consistent with a Class A office project, and for no other use without the
prior
written the consent of Landlord. Tenant shall, at Tenant's sole cost and
expense, comply with applicable requirements of municipal, county, state,
federal and other applicable governmental authorities now or hereafter in force
pertaining to Tenant's business operations, alterations and/or specific use
of
the Premises and/or the Project, and shall secure any necessary permits
therefore and shall faithfully observe in the use of the Premises and the
Project, applicable municipal, county, state, federal and other applicable
governmental entities' requirements which are now or which may hereafter be
in
force. Tenant, in Tenant's use and occupancy of the Premises, shall not subject
or permit the Premises and/or the Project to be used in any manner which would
tend to damage any portion thereof, or which would increase the cost of any
insurance paid by Landlord with respect thereto, including without limitation
exceeding maximum legal or customary occupancy and density ratios. Tenant shall
not do or permit anything to be done in or about the Premises, the Common Areas
and/or the Project which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Common Areas and/or the Project or use
or
allow the Premises or any portion of the Project to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain
or
permit a nuisance in, on or about the Premises, the Common Areas and/or the
Project. Tenant shall comply with all covenants and obligations in the
CC&R's which affect the use and operation of the Premises, the Common Areas
and/or the Project.
10.02 Hazardous
Materials.
(a) Defined
terms.
(i) “Hazardous
Materials” means, among other things, any of the following, in any amount: (a)
any petroleum or petroleum derived or derivative product, asbestos in any form,
urea formaldehyde and polychlorinated biphenyls and medical wastes; (b) any
radioactive substance; (c) any toxic, infectious, reactive, corrosive, ignitable
or flammable chemical or chemical compound; and (d) any chemicals, materials
or
substances, whether solid, liquid or gas, defined as or included in the
definitions of “hazardous substances,”“hazardous wastes,”“hazardous
materials,”“extremely hazardous wastes,”“restricted hazardous wastes,”“toxic
substances,”“toxic pollutants,”“solid waste,” or words of similar import in any
federal, state or local statute, law, ordinance or regulation or court decisions
now existing or hereafter existing as the same may be interpreted by government
offices and agencies.
(ii) “Hazardous
Materials Laws” means any federal, state or local statutes, laws, ordinances or
regulations or court decisions now existing or hereafter existing that control,
classify, regulate, list or define Hazardous Materials or require remediation
of
Hazardous Materials contamination.
26
(b) Compliance
with Hazardous Materials Laws.
Tenant
will not cause any Hazardous Material to be brought upon, kept, generated or
used on the Project in a manner or for a purpose prohibited by or that could
result in liability under any Hazardous Materials Law; provided, however, in
no
event shall Tenant allow any Hazardous Material to be brought upon, kept,
generated or used on the Project other than those Hazardous Materials which
are
disclosed in the Summary
Table (Maximum Quantity on Hand) Dated June 6, 2000
and the
Hazardous
Materials Inventory Statement Dated June 6, 2000
or
otherwise used by Tenant in the ordinary course of its business and of which
Tenant has given Landlord prior written notice and received Landlord’s approval,
all of which shall be used, kept, maintained and disposed of in compliance
with
all applicable laws and regulations (other than small quantities of cleaning
or
other/industrial supplies as are customarily used by a tenant in the ordinary
course in a general office facility). Tenant, at its sole cost and expense,
will
comply with (and obtain all permits required under) all Hazardous Materials
Laws, groundwater wellhead protection
laws,
storm water management laws, fire protection provisions, and prudent industry
practice relating to the presence, storage, transportation, disposal, release
or
management of Hazardous Materials in, on, under or about the Project that Tenant
brings upon, keeps, generates or uses on the Project (including, without
limitation, but subject to this Section 10.2, immediate remediation of any
Hazardous Materials in, on, under or about the Project that Tenant brings upon,
keeps, generates or uses on the Project in compliance with Hazardous Materials
Laws) and in no event shall Tenant allow any liens or encumbrances pertaining
to
Tenant’s use of Hazardous Materials to attach to any portion of the Project. On
or before the expiration or earlier termination of this Lease, Tenant, at its
sole cost and expense, will completely remove from the Project (regardless
whether any Hazardous Materials Law requires removal), in compliance with all
Hazardous Materials Laws, all Hazardous Materials Tenant causes to be present
in, on, under or about the Project. Tenant will not take any remedial action
in
response to the presence of any Hazardous Materials in on, under or about the
Project, nor enter into (or commence negotiations with respect to) any
settlement agreement, consent decree or other compromise with respect to any
claims relating to or in any way connected with Hazardous Materials in, on,
under or about the Project, without first notifying Landlord of Tenant’s
intention to do so and affording Landlord reasonable opportunity to investigate,
appear, intervene and otherwise assert and protect Landlord’s interest in the
Project. Landlord shall have the right from time to time to inspect the Premises
to determine if Tenant is in compliance with this Section 10.2.
(c) Notice
of
Actions.
Tenant
will notify Landlord of any of the following actions affecting Landlord, Tenant
or the Project that result from or in any way relate to Tenant’s use of the
Project immediately after receiving notice of the same: (a) any enforcement,
clean-up, removal or other governmental or regulatory action instituted,
completed or threatened under any Hazardous Materials Law; (b) any claim made
or
threatened by any person relating to damage, contribution, liability, cost
recovery, compensation, loss or injury resulting from or claimed to result
from
any Hazardous Material; and (c) any reports made by any person, including
Tenant, to any environmental agency relating to any Hazardous Material,
including any complaints, notices, warnings or asserted violations. Tenant
will
also deliver to Landlord, as promptly as possible and in any event within five
(5) business days after Tenant first receives or sends the same, copies of
all
claims, reports, complaints, notices, warnings or asserted violations relating
in any way to the Project or Tenant’s use of the Project. Upon Landlord’s
written request, Tenant will promptly deliver to Landlord documentation
acceptable to Landlord reflecting the legal and proper disposal of all Hazardous
Materials removed or to be removed from the Premises. All such documentation
will list Tenant or its agent as a responsible party and the generator of such
Hazardous Materials and will not attribute responsibility for any such Hazardous
Materials to Landlord or Landlord’s property manager, except to the extent
Landlord or Landlord’s property manager or any of their respective employees,
agents or contractors were responsible for such Hazardous Materials on the
Premises.
27
(d) Disclosure
and Warning Obligations.
Tenant
acknowledges and agrees that all reporting and warning obligations required
under Hazardous Materials Laws resulting from or in any way relating to Tenant’s
use of the Premises or Project are Tenant’s sole responsibility, regardless
whether the Hazardous Materials Laws permit or require Landlord to report or
warn.
(e) Indemnification.
Tenant
releases and will indemnify, defend (with counsel reasonably acceptable to
Landlord), protect and hold harmless the Landlord and Landlord’s agents,
employees and contractors for, from and against any and all claims, liabilities,
damages, losses, costs and expenses whatsoever arising or resulting, in whole
or
in part, directly or indirectly, from the presence, treatment, storage,
transportation, disposal, release or management of Hazardous Materials in,
on,
under, upon or from the Project (including
water
tables and atmosphere) that Tenant brings upon, keeps, generates or uses on
the
Premises or the Project. Tenant’s obligations under this Section include,
without limitation and whether foreseeable or unforeseeable, (a) the costs
of
any required or necessary repair, clean-up, detoxification or decontamination
of
the Project; (b) the costs of implementing any closure, remediation
or
other required action in connection therewith as stated above; (c) the value
of
any loss of use and any diminution in value of the Project, and (d) consultants’
fees, experts’ fees and response costs. The Tenant’s obligations under this
Section survive the expiration or earlier termination of this
Lease.
(f) Hazardous
Materials Representation by Landlord.
Landlord represents to Tenant that, to its actual knowledge, Landlord has not
caused the generation, storage or release of Hazardous Materials upon the
Premises, except in accordance with Hazardous Materials Laws and prudent
industry practices regarding construction of the Premises.
(g) Environmental
Site Assessments.
Upon
request by Landlord during the Term of this Lease, prior to the exercise of
any
renewal Term and/or prior to vacating the Premises, Tenant will obtain and
submit to Landlord an environmental site assessment from an environmental
consulting company reasonably acceptable to Landlord.
10.03 Signs.
The
Tenant shall not paint, display, inscribe, place or affix any sign, picture,
advertisement, notice, lettering, or direction on any part of the outside of
the
Building or the Project or visible from the outside of the Premises, the
Building or the Project, except as first approved by Landlord or as may be
set
forth in the Tenant Improvement Plans. Landlord shall provide initial building
standard identification of Tenant on the Building directory, elevator lobby
and
suite location. Tenant
shall have a non-exclusive right to install a non-illuminated sign on the
Building exterior in the same location as the existing “Microvision” sign and to
place its identification on the Building monument sign. All signage shall be
in
compliance with North Creek Signage & Design Guidelines and shall be subject
to approval by Landlord, the North Creek Owner’s Association and the City of
Bothell.
28
10.04 Exterior
HVAC Unit. Tenant
shall have the right to install pad-mounted exterior HVAC equipment subject
to
the provisions of this Section 10.04. The equipment shall be located on the
east
side of Building. Review and approval shall be at the reasonable discretion
of
Landlord and Landlord may require that the mechanical equipment be screened
and
sound attenuated, consistent with other installations in the Project, that
the
landscaping be installed around the equipment to soften its mass and such other
conditions as reasonably required by Landlord. Additionally, to the extent
the
mechanical improvements cause a reduction in the project’s parking count, the
Tenant’s parking stall count shall be reduced by one stall for every stall
displaced by the mechanical improvements. All costs associated with the
mechanical equipment installation and maintenance shall be at the sole cost
of
Tenant. Tenant shall be liable for and shall indemnify Landlord with respect
to,
any contamination resulting from the location, installation, use, operation
or
maintenance of the proposed mechanical equipment. Tenant shall retain ownership
to the additional pad mounted exterior HVAC equipment and shall have the right
to remove the equipment at any time during the lease Term. Tenant shall provide
Landlord written notice no later than twelve (12) months prior to expiration
of
the initial Term if tenant intends to so remove the equipment. If Tenant does
not so elect to remove the equipment, then, at Landlord’s option, (a) the
equipment shall become the property of the Landlord upon expiration of the
Term,
or (b) by written election to Tenant no later than six (6) months prior to
lease
expiration, Landlord may require Tenant to remove the mechanical equipment
and
restore the affected landscape and parking areas upon expiration of the lease
Term. Tenant shall have the right to install a nitrogen tank, in a location
approved by Landlord and Tenant, which will be maintained by Air Products,
Xxxxx
Specialty Gases or other professional in the industry approved by Landlord.
Tenant shall obtain all required local, state and/or federal permits and
installation of nitrogen tank shall be maintained in compliance with all
applicable local, state and/or federal regulations.
ARTICLE
XI: DAMAGE
AND DESTRUCTION
11.01 Reconstruction.
If the
Building is damaged or destroyed during the Term, Landlord shall, except as
hereinafter provided, diligently repair or rebuild it to substantially the
condition in which it existed immediately prior to such damage or destruction.
If Landlord is obligated or elects to repair or restore as herein provided,
Landlord shall be obligated to make repair or restoration of only those portions
of the Premises which were initially provided at Landlord's expense or as part
of the original installation by Landlord for Tenant and the repair and/or
restoration of other items within the Premises shall be the obligation of the
Tenant.
11.02 Rent
Abatement.
Rent
due and payable hereunder shall be abated proportionately during any period
in
which, by reason of any such damage or destruction, there is substantial
interference with the operation of Tenant's business in the Premises. Such
abatement shall continue for the period commencing with such damage or
destruction and ending with a substantial completion by Landlord of the work
of
repair or reconstruction which Landlord is obligated or undertakes to do. If
it
be determined that continuation of business is not practical pending
reconstruction, and if Landlord does not elect to or is unable to provide
alternative temporary space for continuation of such business, then Rent due
and
payable hereunder shall xxxxx, until reconstruction is substantially completed
or until business is totally or partially resumed, whichever is the earlier.
Tenant shall not be entitled to any claim, compensation or damages for loss
in
the use in the whole or any part of the Premises (including loss of business)
and/or any inconvenience or annoyance occasioned by such damage, repair,
reconstruction or restoration.
29
11.03 Excessive
Damage or Destruction.
If the
Building or the Premises is damaged or destroyed to the extent that it cannot
within Landlord’s reasonable discretion, with reasonable diligence, be fully
repaired or restored by Landlord within the earlier of (i) one hundred twenty
(120) days after the date of the damage or destruction, or (ii) the expiration
of the Term hereof, Landlord may terminate this Lease by written notice to
Tenant within thirty (30) days of the date of the damage or destruction. If
Landlord does not terminate the Lease, this Lease shall remain in full force
and
effect and Landlord shall diligently repair and restore the damage as soon
as
reasonably possible.
11.04 Uninsured
Casualty.
Notwithstanding anything contained herein to the contrary, in the event of
damage to or destruction of all or any portion of the Building, which damage
or
destruction is not fully covered by the insurance proceeds received by Landlord
under the insurance policies required under Article 7.01 hereinabove, Landlord
may terminate this Lease by written notice to Tenant given within sixty (60)
days after the date of notice to Landlord that said damage or destruction is
not
so covered. If Landlord does not elect to terminate this Lease, the Lease shall
remain in full force and effect and the Building shall be repaired and rebuilt
in accordance with the provisions for repair set forth in Section 11.01
hereinabove.
11.05 Waiver.
With
respect to any damage or destruction which Landlord is obligated to repair
or
may elect to repair under the terms of this Article XI, and to the extent
permitted by law, Tenant hereby waives any rights to terminate this Lease
pursuant to rights otherwise accorded by law to tenants, except as expressly
otherwise provided herein.
11.06 Mortgagee's
Right.
Notwithstanding anything herein to the contrary, if the holder of any
indebtedness secured by a mortgage or deed of trust covering the Property,
the
Building and/or the Project requires that the insurance proceeds be applied
to
such indebtedness, then Landlord shall have the right to terminate this Lease
by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made. Upon any termination of this Lease under the
provisions hereof, the parties shall be released without further obligation
to
the other from date possession of the Premises is surrendered to Landlord,
except for items which are theretofore accrued and are then unpaid.
30
11.07 Damage
Near End of Term.
Notwithstanding anything to the contrary contained in this Article XI, in the
event the Premises or the Building are subject to excessive damage (as defined
in Section 11.03) during the last twelve (12) months of the Term or any
applicable extension periods, Landlord may elect to terminate this Lease by
written notice to Tenant within thirty (30) days after the date of such
damage.
ARTICLE
XII: EMINENT
DOMAIN
12.01 Eminent
Domain.
In the
event the whole of the Premises, Building, Project and/or Common Areas, as
the
case may be, and/or such part thereof as shall substantially interfere with
Tenant's use and occupation thereof, shall be taken for any public or
quasi-public purpose by any lawful power or authority by exercise of the right
of appropriation, condemnation or eminent domain, or is sold in lieu of or
to
prevent such taking, then Tenant shall have the right to terminate this Lease
effective as of the date possession is required to be surrendered to said
authority. In the event the whole of the Premises, Building, Project and/or
Common Areas, as the case may be, or such part thereof as shall substantially
interfere with Landlord’s use and occupation thereof, or if any access points to
adjoining streets, shall be taken for any public or quasi-public purpose by
any
lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or is sold in lieu of or to prevent such taking,
then Landlord shall have the right to terminate this Lease effective as of
the
date possession is required to be surrendered to said authority. Except as
provided below, Tenant shall not assert any claim against Landlord or the taking
authority for any compensation because of such taking, and Landlord shall be
entitled to receive the entire amount of any award without deduction for any
estate or interest of Tenant in the Premises. Nothing contained in this Article
12 shall be deemed to give Landlord any interest in any separate award made
to
Tenant for the taking of personal property and fixtures belonging to Tenant
or
for Tenant's moving expenses. In the event the amount of property or the type
of
estate taken shall not materially interfere with the conduct of Tenant's
business, Landlord shall be entitled to the entire amount of the award without
deduction for any estate or interest of Tenant, Landlord shall promptly proceed
to restore the Building to substantially their same condition prior to such
partial taking less the portion thereof lost in such condemnation, and the
Base
Rent shall be proportionately reduced by the time during which, and the portion
of the Premises which, Tenant shall have been deprived of possession on account
of said taking and restoration.
ARTICLE
XIII: DEFAULT
13.01 Events
of Default.
The
occurrence of any of the following events shall constitute an "Event of Default"
on the part of the Tenant with or without notice from Landlord:
(a) Tenant
shall fail to pay on or before the due date any installment of Rent or other
payment required pursuant to this Lease with three (3) days after receipt of
written notice from Landlord (which notice shall be deemed to run simultaneously
with any notice required under applicable eviction or unlawful detainer
statutes);
31
(b) Tenant
shall abandon the Premises, whether or not Tenant is in default of the Rent
payments due under this Lease;
(c) Tenant
shall fail to comply with any Term, provision, or covenant of this Lease, other
than the payment of Rent or other sums of money due hereunder, and such failure
is not cured within twenty (20) days after written notice thereof to Tenant
(said notice being in lieu of, and not in addition to, any notice required
as a
prerequisite to a forcible entry and detainer or similar action for possession
of the Premises); provided that if the nature of such cure is such that a longer
cure period is necessary, Tenant shall only be in default if Tenant shall have
failed to commence such cure within said twenty (20) day period and thereafter
to have diligently prosecuted such cure to completion;
(d) Tenant
shall file a petition or be adjudged a debtor or bankrupt or insolvent under
the
United States Bankruptcy Code, as amended, or any similar law or statute of
the
United States or any State; or a receiver or trustee shall be appointed for
all
or substantially all of the assets of Tenant and such appointment or petition,
if involuntary, is not dismissed within sixty (60) days of filing;
or
| (e) |
Tenant
shall make an assignment for the benefit of
creditors.
|
13.02 Remedies.
(a)
Upon
the occurrence of any Event of Default set forth in this Lease, in addition
to
any other remedies available to Landlord at law or in equity, Landlord shall
have the immediate option to terminate this Lease and all rights of Tenant
hereunder. In the event that Landlord shall elect to so terminate this Lease,
then Landlord may recover from Tenant: (i) any unpaid rent which as been earned
at the time of such termination plus interest at the rates contemplated by
this
Lease; plus (ii) the amount by which the unpaid rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided plus interest
at the rates contemplated by this Lease; plus (iii) the worth at the time of
award of the amount by which the unpaid rent for the balance of the Term after
the time of award exceeds the amount of such rental loss that Tenant proves
could be reasonably avoided; plus (iv) the unamortized balance of the value
of
any free Rent, tenant improvement costs, commissions and any other monetary
concessions provided to Tenant pursuant to this Lease, as amortized over the
initial Term of this Lease; plus (v) any other amount necessary to compensate
Landlord for all the damage proximately caused by Tenant's failure to perform
Tenant's obligation under this Lease or which in the ordinary course of things
would be likely to result therefrom, including, but not limited to, costs to
restore the Premises to good condition, costs to remodel, renovate or otherwise
prepare the Premises, or portions thereof, for a new tenant, leasing
commissions, marketing expenses, reasonable attorneys’ fees, and free rent,
moving allowances and other types of leasing concessions (“Costs of Reletting”).
As used in Subsections 13.02(a) (iii) above, the "worth at the time of award"
is
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).
Notwithstanding the above, if Landlord relets the Premises for a term (the
"Relet Term") that extends past the expiration date of this Lease, the Costs
of
Reletting which may be included in Landlord’s damages under this Lease shall be
limited to a prorated portion of the Costs of Reletting, based on the percentage
that the length of the Term remaining on the date Landlord terminates this
Lease
or Tenant's right to possession bears to the length of the Relet Term.
32
(b) In
the
event of any such default by Tenant, Landlord shall also have the right with
or
without terminating this Lease, to re-enter the Premises and remove all persons
and property from the Premises; such property may be removed and stored in
a
public warehouse or elsewhere at the cost of and for the account of the Tenant.
No re-entry or taking possession of the Premises by Landlord pursuant to this
Section 13.02(b) shall be construed as an acceptance of a surrender of the
Premises or an election to terminate this Lease unless a written notice of
such
intention is given to Tenant or unless the termination thereof is decreed by
a
court of competent jurisdiction.
(c) In
the
event of the vacation or abandonment of the Premises by Tenant or in the event
that Landlord shall elect to re-enter as provided above or shall take possession
of the Premises pursuant to legal proceedings or pursuant to any notice provided
by law, then if Landlord does not elect to terminate this Lease as provided
above, Landlord may from time to time, without terminating this Lease, either
recover all Rent as it becomes due or relet the Premises or any part thereof
for
the Term of this Lease on terms and conditions as Landlord at its sole
discretion may deem advisable with the right to make alterations and repairs
to
the Premises.
(d) In
the
event that Landlord shall elect to so relet, the rents received by Landlord
from
such reletting shall be applied: first to the payment of any indebtedness other
than Rent due hereunder from Tenant to Landlord; second to the payment of any
costs of such reletting; third, to the payment of the cost of any alterations
and repairs to the Premises; fourth, to the payment of Rent due and unpaid
hereunder; and the residual, if any, shall be held by Landlord and applied
to
payment of future Rent as the same shall become due and payable hereunder.
Should that portion of such rents received from such reletting during the month
which is applied to the payment of Rent be less than the Rent payable during
that month by Tenant hereunder, then Tenant shall pay any such deficiency to
Landlord immediately upon demand therefor by Landlord. Such deficiency shall
be
calculated and paid monthly. Tenant shall also pay to Landlord, as soon as
is
certain, any of the costs and expenses incurred by Landlord in such reletting
or
in making such alterations and repairs not covered by the rents received from
such reletting.
(e) All
rights, options and remedies of Landlord contained in this Lease shall be
construed and held to be cumulative, and no one of them shall be exclusive
of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law, whether
or
not stated in this Lease. No waiver of any default of Tenant hereunder shall
be
implied from any acceptance by Landlord of any Rent or other payments due
hereunder or any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect defaults other than as specified in said waiver. The consent or approval
of Landlord to or of any act by Tenant requiring Landlord's consent or approval
shall not be deemed to waive or render unnecessary Landlord's consent or
approval to or of any subsequent similar acts by Tenant.
33
(f) In
the
event that in any twelve (12) month period during the Term of this Lease, Tenant
commits more than two (2) acts or omissions of default for which default notices
are given by Landlord pursuant to this Article XIII (whether or not such
defaults are cured by Tenant), Landlord may, at its option by written notice
to
Tenant within three (3) months of such second act of default, elect to terminate
this Lease. Landlord’s election to exercise its early termination rights shall
be effective only upon written notice delivered to Tenant specifying Landlord’s
election to cause an early termination of this Lease. Such early termination
shall be in effect when such written notice is provided to Tenant. Landlord’s
right of early termination shall be in addition to all other rights and remedies
available to Landlord at law or in equity.
13.03 Landlord's
Default.
Landlord shall not be in default unless Landlord fails to perform its
obliga-tions under this Lease within thirty (30) days after written notice
by
Tenant, or if such failure is not reasonably capable of being cured within
such
thirty (30) day period, Landlord shall not be in default unless Landlord has
failed to commence the cure and diligently pursue the cure to completion. In
no
event shall Tenant have the remedy to terminate this Lease except upon final
adjudication of competent jurisdiction authorizing such default. In no event
shall Landlord be liable to Tenant or any person claiming through or under
Tenant for consequential, exemplary or punitive damages.
ARTICLE
XIV: FILING
OF PETITION
14.01 Tenant's
Bankruptcy.
Landlord
and Tenant (as either debtor or debtor-in-possession) agree that if a petition
("Petition") is filed by or against tenant under any chapter of Title 11 of
the
United States Code (the "Bankruptcy Code"), to the fullest extent permitted
by
law, the following provisions shall apply:
(a) Adequate
protection for Tenant's obligations accruing after filing of the Petition and
before this Lease is rejected or assumed shall be provided within 15 days after
filing in the form of a security deposit equal to three months' Base Rent and
Additional Rent and other Lease charges, to be held by the court or an escrow
agent approved by Landlord and the court.
34
(b) The
sum
of all amounts payable by Tenant to Landlord under this Lease constitutes
reasonable compensation for the occupancy of the Premises by
Tenant.
(c) Tenant
or
Trustee shall give Landlord at least 30 days written notice of any abandonment
of the Premises or any proceeding relating to administrative claims. If Tenant
abandons without notice, Tenant or Trustee shall stipulate to entry of an order
for relief from stay to permit Landlord to reenter and relet the
Premises.
(d) If
Tenant
failed to timely and fully perform any of its obligations under this Lease
before the filing of the Petition, whether or not Landlord has given Tenant
written notice of that failure and whether or not any time period for cure
expired before the filing of the Petition, Tenant shall be deemed to have been
in default on the date the Petition was filed for all purposes under the
Bankruptcy Code.
(e) For
the
purposes of Section 365(b)(1) of the Bankruptcy Code, prompt cure of defaults
shall mean cure within 30 days after assumption.
(f) For
the
purposes of Section 365(b)(1) and 365(f)(2) of the Bankruptcy Code, adequate
assurance of future performance of this Lease by Tenant, Trustee or any proposed
assignee will require that Tenant, Trustee or the proposed assignee deposit
three months of Base Rent and Additional Rent into an escrow fund (to be held
by
the court or an escrow agent approved by Landlord and the court) as security
for
such future performance. In addition, if this Lease is to be assigned, adequate
assurance of future performance by the proposed assignee shall require that:
(i)
the assignee have a tangible net worth not less than the net worth of Tenant
as
of the Commencement Date or that such assignee's performance be unconditionally
guaranteed by a person or entity that has a tangible net worth not less than
the
net worth of Tenant as of the Commencement Date; (ii) the assignee demonstrate
that it possesses a history of success in operating a business of similar size
and complexity in a similar market as Tenant's business; and (iii) assignee
assume in writing all of Tenant's obligations relating to the Premises or this
Lease.
(g) If
Tenant
or Trustee intends to assume and/or assign this Lease, Tenant or Trustee shall
provide Landlord with 30 days written notice of the proposed action, separate
from and in addition to any notice provided to all creditors. Notice of a
proposed assumption shall state the assurance of prompt cure, compensation
for
loss and assurance of future performance to be provided to Landlord. Notice
of a
proposed assignment shall state: (i) the name, address, and federal tax
identification and registration numbers of the proposed assignee; (ii) all
of
the terms and conditions of the proposed assignment, and (iii) the assignee's
proposed adequate assurance of future performance to be provided to
Landlord.
(h) If
Tenant
is in default under this Lease when the Petition is filed, Landlord shall not
be
required to provide Tenant or Trustee with services or supplies under this
Lease
or otherwise before Tenant assumes this Lease, unless Tenant compensates
Landlord for such services and supplies in advance.
35
ARTICLE
XV: ASSIGNMENT
AND SUBLETTING
15.01 Prohibition.
Tenant
shall have the right to assign, mortgage, pledge or otherwise transfer or
encumber this Lease, in whole or in part, and to sublet, assign, or permit
occupancy by any party other than Tenant of all or any part of the Premises,
only with the prior written consent of Landlord, which will not be unreasonably
withheld or conditioned. Tenant shall at the time the Tenant requests the
consent of Landlord, deliver to Landlord such information in writing as Landlord
may reasonably require respecting the proposed assignee or subtenant including,
without limitation, the name, address, nature of business, ownership, financial
responsibility and standing of such proposed assignee or subtenant and Landlord
shall have not less than ten (10) business days after receipt of all required
information to elect one of the following: (a) consent to such proposed
assignment, encumbrance or sublease, or (b) refuse such consent, or (c) elect
to
terminate this Lease, in the case of a proposed assignment, or, in the event
of
a cumulative sublease of more than 50% of the Premises, elect to terminate
the
Lease with respect to the portion of the Premises proposed to be subleased,
as
applicable. In addition, as a condition to Landlord's consent to any assignment,
sublease or encumbrance of this Lease shall be the delivery to Landlord of
a
true copy of the fully executed instrument of assignment, transfer or
encumbrance and an agreement executed by the assignee, sublessee or other
transferee in form and substance satisfactory to Landlord and expressly
enforceable by Landlord, whereby the assignee assumes and agrees to be bound
by
the terms and provisions of this Lease and perform all the obligations of Tenant
hereunder with respect to the assigned or subleased portion of the Premises.
No
assignment or subletting by Tenant shall relieve Tenant of any obligation under
this Lease, including Tenant's obligation to pay Base Rent and Additional Rent
hereunder. Any purported assignment or subletting contrary to the provisions
hereof without consent shall be void. The consent by Landlord to any assignment
or subletting shall not constitute a waiver of the necessity for such consent
to
any subsequent assignment of subletting. Tenant
shall pay Landlord’s reasonable processing costs and attorneys’ fees incurred in
reviewing any proposed Assignment or sublease. Notwithstanding anything herein
to the contrary, the
parties agree that, in addition to other reasonable grounds for withholding
consent, it shall be reasonable for Landlord to withhold its consent to any
such
assignment or sublease if in the event (a) Landlord or its affiliates has
existing vacant space in Schnitzer Northcreek (“Master Project”) that could
reasonably meet the needs of the proposed assignee or sublessee, and (b) the
rent for the proposed assignment or sublease for which Tenant is requesting
consent is under market rent by 10% or more, based on rates for recent lease
transactions for comparable space in the Master Project and/or the
Bothell/Xxxxxxxx/Bellevue submarket and/or current asking rates for vacant
space
in the Master Project and/or the Bothell/Xxxxxxxx/Bellevue market. In the event
Landlord withholds consent based upon the rental rate being below market
pursuant to the preceding sentence, Landlord shall, upon request by Tenant,
provide Tenant with substantiation of such market rent
determination.
15.02 Excess
Rental.
If
pursuant to any assignment or sublease, Tenant receives rent, either initially
or over the Term of the assignment or sublease, in excess of the Rent called
for
hereunder, or in the case of this sublease of a portion of the Premises in
excess of such Rent fairly allocable to such portion, after appropriate
adjustments to assure that all other payments called for hereunder are
appropriately taken into account, Tenant shall pay to Landlord, as Additional
Rent hereunder, fifty percent (50%) of the excess of each such payment of rent
received by Tenant after its receipt.
36
15.03 Scope.
The
prohibition against assigning or subletting contained in this Article XV shall
be construed to include a prohibition against any assignment or subletting
by
operation of law. If this Lease be assigned, or if the underlying beneficial
interest of Tenant is transferred, or if the Premises or any part thereof be
sublet or occupied by anybody other than Tenant, Landlord may collect rent
from
the assignee, subtenant or occupant and apply the net amount collected to the
Rent herein reserved and apportion any excess rent so collected in accordance
with the terms of the immediately preceding paragraph, but no such assignment,
subletting, occupancy or collection shall be deemed a waiver of this covenant,
or the acceptance of the assignee, subtenant or occupant as tenant, or a release
of Tenant from the further performance by Tenant of covenants on the part of
Tenant herein contained. No assignment or subletting shall affect the continuing
primary liability of Tenant (which, following assignment, shall be joint and
several with the assignee), and Tenant shall not be released from performing
any
of the terms, covenants and conditions of this Lease.
15.04 Waiver.
Notwithstanding any assignment or sublease, or any indulgences, waivers or
extensions of time granted by Landlord to any assignee or sublessee or failure
of Landlord to take action against any assignee or sublease, Tenant hereby
agrees that Landlord may, at its option, and upon not less than ten (10) days'
notice to Tenant, proceed against Tenant without having taken action against
or
joined such assignee or sublessee, except that Tenant shall have the benefit
of
any indulgences, waivers and extensions of time granted to any such assignee
or
sublessee.
15.05 Change
in Control.
If
Tenant is a partnership or limited liability company, a withdrawal of or change
in general partners or members, in one or more transfers, owning more than
a
fifty percent (50%) interest in the partnership, shall constitute a voluntary
assignment and shall be subject to the provisions of this Article XV. If the
Tenant is a corporation, a transfer of fifty percent (50%) or more of the
corporation's stock or assets in one or more transfers to a single party and/or
its affiliates, or a change in the control of such company pursuant to a merger,
consolidation, sale of assets or otherwise, shall be deemed for the purposes
hereof to be an assignment of this Lease, and shall be subject to the provisions
of this Article XV.
ARTICLE
XVI: ESTOPPEL
CERTIFICATE, ATTORNMENT AND SUBORDINATION
16.01 Estoppel
Certificates.
Within
ten (10) business days after request therefor by Landlord, or if on any sale,
assignment or hypothecation by Landlord of Landlord's interest in the Property,
the Project and/or the Premises, or any part thereof, an estoppel certificate
shall be required from Tenant, Tenant shall deliver a certificate in the form
attached hereto as Exhibit
G,
or in
such other form as requested by Landlord, to any proposed mortgagee or
purchaser, and to Landlord, certifying (if such be the case) that this Lease
is
in full force and effect, the date of Tenant's most recent payment of Rent,
and
that Tenant has no defenses or offsets outstanding, or stating those claimed
by
Tenant, and any other information contained in such Exhibit
G
or
reasonably requested by Landlord or such proposed mortgagee or purchaser.
Tenant's failure to deliver said statement within said period shall, at
Landlord's option be an Event of Default hereunder and shall in any event be
conclusive upon Tenant that: (i) this Lease is in full force and effect, without
modification except as may be represented by Landlord; (ii) there are no uncured
defaults in Landlord's performance and Tenant has no right to offset,
counterclaim or deduction against Rent hereunder; and (iii) no more than one
period's Base Rent has been paid in advance.
37
16.02 Attornment.
Tenant
shall, in the event any proceedings are brought for the foreclosure of, or
in
the event of exercise of the power of sale under, any mortgage or deed of trust
made by Landlord, its successors or assigns, encumbering the Building, or any
part thereof or in the event of termination of a ground lease, if any, and
if so
requested, attorn to the purchaser upon such foreclosure or sale or upon any
grant of a deed in lieu of foreclosure and recognize such purchaser as Landlord
under this Lease; provided, that such purchaser recognizes Tenant's rights
under
this Lease and agrees not to disturb Tenant's quiet possession of the Premises
for so long as Tenant is not in default hereunder.
16.03 Subordination.
The
rights of Tenant hereunder are and shall be, at the election of any mortgagee
or
the beneficiary of a deed of trust encumbering the Project (or the portion
thereof on which the Building is located) and/or Building, subject and
subordinate to the lien of such mortgage or deed of trust, or the lien resulting
from any other method of financing or refinancing, now or hereafter in force
against the Project (or the portion thereof on which the Building is located)
and/or the Building, and to all advances made or hereafter to be made upon
the
security thereof. If requested, Tenant agrees to execute such documentation
as
may be required by Landlord or its lender to further effect the provisions
of
this Article in the form attached hereto as Exhibit H or in such other form
as
reasonably requested by Landlord or its Lender.
16.04 Recording.
Tenant
covenants and agrees with Landlord that Tenant shall not record this Lease
or
any memorandum thereof without Landlord's prior written consent. Notwithstanding
the provisions of Section 16.03, in the event that Landlord or its lender
requires this Lease or a memorandum thereof to be recorded in priority to any
mortgage, deed of trust or other encumbrance which may now or at any time
hereafter affect in whole or in part the Building, the Project (or the portion
thereof on which the Building is located), and whether or not any such mortgage,
deed of trust or other encumbrance shall affect only the Building, the Project
(or the portion thereof on which the Building is located), or shall be a blanket
mortgage, deed of trust or encumbrance affecting other premises as well, the
Tenant covenants and agrees with Landlord that the Tenant shall execute promptly
upon request from Landlord any certificate, priority agreement or other
instrument which may from time to time be requested to give effect
thereto.
ARTICLE
XVII: MISCELLANEOUS
17.01 Notices.
All
notices required to be given hereunder shall be in writing and mailed postage
prepaid by certified or registered mail, return receipt requested, or by
personal delivery or nationally recognized courier service, to the appropriate
address indicated in Section 1.01(b) or Section 1.01(d), as appropriate, at
such
street address or street addresses (but not more than three such addresses)
as
either Landlord or Tenant may, from time to time, respectively, designate in
a
written notice given to the other. Notices shall be deemed sufficiently served
upon the earlier of actual receipt or the expiration of three (3) days after
the
date of mailing thereof.
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17.02 Successors
Bound.
This
Lease and each of its covenants and conditions shall be binding upon and shall
inure to the benefit of the parties hereto and their respective assignees,
subject to the provisions hereof. Whenever in this Lease a reference is made
to
Landlord, such reference shall be deemed to refer to the person in whom the
interest of Landlord shall be vested, and Landlord shall have no obligation
hereunder as to any claim arising after the transfer of its interest in the
Building. Any successor or assignee of the Tenant who accepts an assignment
of
the benefit of this Lease and enters into possession or enjoyment hereunder
shall thereby assume and agree to perform and be bound by the covenants and
conditions thereof. Nothing herein contained shall be deemed in any manner
to
give a right of assignment without the prior written consent of Landlord
pursuant to, or otherwise as provided in, Article XV hereof.
17.03 Waiver.
No
waiver of any default or breach of any covenant by either party hereunder shall
be implied from any omission by either party to take action on account of such
default if such default persists or is repeated, and no express waiver shall
affect any default other than the default specified in the waiver and said
waiver shall be operative only for the time and to the extent therein stated.
Waivers of any covenant, term or condition contained herein by either party
shall not be construed as a waiver of any subsequent breach of the same
covenant, term or condition. The consent or approval by either party to or
of
any act by either party requiring further consent or approval shall not be
deemed to waive or render unnecessary their consent or approval to or of any
subsequent similar acts.
17.04 Subdivision
and Easements.
Landlord reserves the right to: (a) subdivide the Project; (b) alter the
boundaries of the Project; and (c) grant easements on the Project and dedicate
for public use portions thereof; provided, however, that no such grant or
dedication shall materially interfere with Tenant's use of the Premises. Tenant
hereby consents to such subdivision, boundary revision, and/or grant or
dedication of easements and agrees from time to time, at Landlord's request
and
expense, to execute, acknowledge and deliver to Landlord, in accordance with
Landlord's instructions, any and all documents, instruments, maps or plats
necessary to effectuate Tenant's consent thereto.
17.05 Landlord's
Reserved Rights in Common Areas.
Landlord reserves the right from time to time, provided that Tenant's use and
enjoyment of the Premises is not materially and adversely affected thereby,
to:
(a) install, use, maintain, repair and replace pipes, ducts, conduits, wires
and
appurtenant meters and equipment for service to other parts of the Building
above the ceiling surfaces, below the floor surfaces, within the walls and
in
the central core areas, and to relocate any pipes, ducts, conduit, wires and
appurtenant meters in the Building which are so located or located elsewhere
outside the Building; (b) make changes to the Common Areas and/or the parking
facilities located thereon, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas and walkways; (c) close temporarily all or any portion
of the Common Areas and/or the Building in order to perform any of the foregoing
or any of Landlord's obligations under this Lease, so long as reasonable access
to the Building remains available during normal business hours; and (d) alter,
relocate or expand, and/or to add additional structures and improvements to,
or
remove same from, all or any portion of the Common Areas or other portions
of
the Project. Landlord shall, to the extent possible, give Tenant at least five
(5) business days prior advanced notice of any such alterations, closures,
relocations or other work which would be reasonably anticipated to cause any
interference with Tenant’s access to or use of the Premises.
39
17.06 Accord
and Satisfaction.
No
payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein
stipulated shall be deemed to be other than on account of the Rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such Rent or pursue any other remedy provided in this
Lease.
17.07 Limitation
of Landlord's Liability.
The
obligations of Landlord under this Lease do not constitute personal obligations
of the individual partners, directors, officers, members, employees or
shareholders of Landlord or its partners, and Tenant shall look solely to the
Building, and the rents and profits therefrom, for satisfaction of any liability
in respect of this Lease and will not seek recourse against the individual
partners, directors, officers, members, employees or shareholders of Landlord
or
its partners or any of their personal assets for such satisfaction.
17.08 Survival.
The
obligations and liabilities of each party which are incurred or accrue prior
to
the expiration of this Lease or the termination of this Lease or of Tenant’s
right of possession shall survive such expiration or termination, as shall
all
provisions by which a party is to provide defense and indemnity to the other
party, all provisions waiving or limiting the liability of Landlord, and all
attorneys’ fees provisions.
17.09 Attorneys'
Fees.
In the
event either party requires the services of an attorney in connection with
enforcing the terms of this Lease or in the event suit is brought for the
recovery of any Rent due under this Lease or the breach of any covenant or
condition of this Lease, or for the restitution of the Premises to Landlord
and/or eviction of Tenant during the Term of this Lease, or after the expiration
thereof, the substantially prevailing party will be entitled to a reasonable
sum
for attorneys' fees, witness fees and other court costs, both at trial and
on
appeal.
17.10 Captions
and Article Numbers.
The
captions, article, paragraph and Section numbers and table of contents appearing
in this Lease are inserted only as a matter of convenience and in no way define,
limit, construe or describe the scope or intent or such Sections or articles
of
this Lease nor in any way affect this Lease.
17.11 Severability.
If any
Term, covenant, condition or provision of this Lease, or the application thereof
to any person or circumstance, shall to any extent be held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, covenants, conditions or provisions of this Lease, or the application
thereof to any person or circumstance, shall remain in full force and effect
and
shall in no way be affected, impaired or invalidated.
40
17.12 Applicable
Law.
This
Lease, and the rights and obligations of the parties hereto, shall be construed
and enforced in accordance with the laws of the state in which the Building
is
located.
17.13 Submission
of Lease.
The
submission of this document for examination and negotiation does not constitute
an offer to lease, or a reservation of or option for leasing the Premises.
This
document shall become effective and binding only upon execution and delivery
hereof by Landlord and Tenant. No act or omission of any officer, employee
or
agent of Landlord or Tenant shall alter, change or modify any of the provisions
hereof.
17.14 Holding
Over.
Should
Tenant, or any of its successors in interest, hold over the Premises or any
part
thereof after the expiration or earlier termination of this Lease without
Landlord's prior written consent, such holding over shall constitute and be
construed as tenancy at sufferance only, at a monthly rent equal to one hundred
fifty percent (150%) of the Base Rent owed during the final month of the Term
of
this Lease and otherwise upon the terms and conditions in the Lease, so far
as
applicable. Should Tenant, or any of its successors in interest, hold over
the
Premises or any part thereof after the expiration or earlier termination of
this
Lease with
Landlord's prior written consent, such holding over shall constitute and be
construed as a tenancy from month to month only, at a fair market monthly rent
as agreed by Landlord and Tenant and otherwise upon the terms and conditions
of
this Lease, so far as applicable. The acceptance by Landlord of Rent after
such
expiration or early termination shall not result in a renewal or extension
of
this Lease. The foregoing provisions of this Section 17.14 are in addition
to
and do not affect Landlord's right of re-entry or any other rights of Landlord
hereunder or as otherwise provided by law. If Tenant fails to surrender the
Premises on the expiration of this Lease and/or to remove all Tenant's fixture
and/or personal property pursuant to Section 9.01 hereof, Tenant shall indemnify
and hold Landlord harmless for, from and against all claims, damages, loss
or
liability, including without limitation, any claim made by any succeeding tenant
resulting from such failure to surrender by Tenant and any attorneys' fees
and
costs incurred by Landlord with respect to any such claim.
17.15 Rules
and Regulations.
At all
times during the Term, Tenant shall comply with Rules and Regulations for the
Building and the Project, as set forth in Exhibit H attached hereto, together
with such amendments thereto as Landlord may from time to time reasonably adopt
and enforce in a non-discriminatory fashion.
17.16 Parking.
Unless
Tenant is in default hereunder, Tenant shall be entitled to the number of
unreserved vehicle parking spaces designated in Section 1.01(q) hereof for
the
non-exclusive use of Tenant, its employees, visitors and customers. All parking
spaces shall be available for the common use of the tenants, subtenants and
invitees of the Project on a non-exclusive basis, subject to any reasonable
restrictions from time to time imposed by Landlord. Tenant shall not use or
permit its officers, employees or invitees to use more than the number of spaces
designated in Section 1.01(q) or any spaces which have been specifically
reserved by Landlord to other tenants or for such other uses as have been
designated by appropriate governmental entities as being restricted to certain
uses. Tenant shall at all times comply and cause its officers, employees and
invitees to comply with any parking Rules and Regulations as Landlord may from
time to time reasonably adopt.
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17.17 No
Nuisance.
Tenant
shall conduct its business and control its agents, employees, invitees and
visitors in such a manner as not to create any nuisance, or interfere with,
annoy or disrupt any other tenant or Landlord in its operation of the Building
or Project.
17.18 Broker;
Agency Disclosure.
(a) Each
of
Tenant and Landlord warrant that it has had no discussions, negotiations and/or
other dealings with any real estate broker or agent in connection with the
negotiation of this Lease other than the Broker(s) identified in Section 1.01(r)
("Brokers"), and that it knows of no other real estate broker or agent who
is or
may be entitled to any commission or finder's fee in connection with this Lease.
Landlord shall pay Brokers a commission pursuant to separate agreements. Brokers
shall be obligated to pay any co-brokers a portion of the commission received
by
such Broker. Each Tenant and Landlord agrees to indemnify the other and hold
the
other harmless from and against any and all claims, demands, losses,
liabilities, lawsuits, judgments, costs and expenses (including without
limitation, attorneys' fees and costs) with respect to any leasing commission
or
equivalent compensation alleged to be owing on account of such party's
discussions, negotiations and/or dealings with any real estate broker or agent.
This Section 17.18 is not intended to benefit any third parties and shall not
be
deemed to give any rights to brokers or finders. No commission(s) or finders
fee(s) shall be paid to Tenant, employee(s) of Tenant or any unlicensed
representative of Tenant.
17.19 Landlord's
Right to Perform.
Upon
Tenant's failure to perform any obligation of Tenant hereunder after notice
from
Landlord pursuant to Section 13.01 above (if notice is required pursuant to
Section 13.01 above), including without limitation, the Tenant’s failure to pay
Tenant's insurance premiums, charges of contractors who have supplied materials
or labor to the Premises, etc., Landlord shall have the right to perform such
obligation of Tenant on behalf of Tenant and/or to make payment on behalf of
Tenant to such parties. Tenant shall reimburse Landlord the reasonable cost
of
Landlord's performing such obligation on Tenant's behalf, including
reimbursement of any amounts that may be expended by Landlord, plus interest
at
the Default Rate, as Additional Rent.
17.20 Assignment
by Landlord.
In the
event of a sale, conveyance, or other transfer by Landlord of the Building,
the
Project, or portion thereof on which the Building is located, or the Project
or
in the event of an assignment of this Lease by Landlord, the same shall operate
to release Landlord from any further liability upon any of the covenants or
conditions, express or implied, herein contained on the part of Landlord, and
from any and all further liability, obligations, costs and expenses, demands,
causes of action, claims or judgments arising out of this Lease from and after
the effective date of said release. In such event, Tenant agrees to look solely
to the successor in interest of transferor. If any Security Deposit is given
by
Tenant to secure performance of Tenant's covenants hereunder, Landlord may
transfer such Security Deposit to any purchaser and thereupon Landlord shall
be
discharged from any further liability in reference thereto. Notwithstanding
anything in this Lease to the contrary, however, (i) in no event shall
Landlord’s lender, who may have succeeded to the interest of Landlord by
foreclosure, deed in lieu of foreclosure, or any other means, have any liability
for any obligation of Landlord to protect, defend, indemnify or hold harmless
Tenant or any other person or entity except for those matters arising from
the
lender’s breach of the terms of this Lease after the date of such foreclosure,
deed in lieu of foreclosure or any other means, and (ii) such succeeding
lender shall have no liability for any representations or warranties of the
Landlord contained herein except for those matters arising from the lender’s
breach of the terms of this Lease after the date of such foreclosure, deed
in
lieu of foreclosure or any other means.
42
17.21 Entire
Agreement.
This
Lease sets forth all covenants, promises, agreements, conditions and
understandings between Landlord and Tenant concerning the Building and the
Project, and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between Landlord and Tenant other than
as are herein set forth. No subsequent alteration, amendment, change or addition
to the Lease shall be binding upon Landlord or Tenant unless reduced to writing
and signed by Landlord and Tenant.
17.22 Financial
Covenants. At
Landlord’s request, Tenant shall provide Landlord with current annual audited
financial statements and quarterly unaudited financial statements (all such
statements shall be prepared in compliance with GAAP standards) setting forth
Tenant’s financial condition. Notwithstanding
anything to the contrary set forth herein, Tenant shall not be obligated to
comply with the foregoing sentence so long as, (a) Tenant is a publicly held
entity and (b) Tenant’s financial information is readily available in the public
domain.
17.23 Consents.
Whenever
the approval or consent of Landlord or Tenant is required under the terms of
this Lease, such consent shall not be unreasonably withheld or delayed unless
a
different standard of approval is specifically set forth in the particular
Section containing that particular consent requirement.
17.24 Conditions.
Landlord’s obligations under this Lease are conditioned upon approval of this
Lease by Landlord’s board of directors on or before August 1, 2005. In the event
the above condition is not met or waived by the specified date, this Lease
shall
terminate at the election of Landlord, in which event neither party shall have
any further rights or obligations hereunder.
17.25 Exhibits.
Exhibits
A through I are attached to this Lease after the signatures and by this
reference incorporated herein.
17.26 Submission
of Lease. Submission
of this instrument for examination or signature by Tenant does not constitute
a
reservation of or option for lease, and it is not effective as a lease or
otherwise until execution and delivery to both Landlord and Tenant.
43
17.27 Time.
Time
is
of the essence with respect to the performance of every provision of this Lease
in which time of performance is a factor.
17.28 Prior
Agreement or Amendment. This
Lease contains all of the agreements of the parties hereto with respect to
any
matter covered or mentioned in the Lease, and no prior agreement or
understanding pertaining to any such matter shall be effective for any purpose.
No provisions of this Lease may be amended or added to except by an agreement
in
writing signed by the parties hereto or their respective
successors-in-interest.
(a) This
Lease is entirely separate and distinct from and independent of any and all
agreements that Tenant may at any time enter into with any third party for
the
provision of services, which include, but are not limited to,
telecommunications, office automation, repair, maintenance services, computer,
and photocopying (“Independent Services”). Tenant acknowledges that Landlord has
no obligation of any type concerning the provision of Independent Services,
and
agrees that any cessation or interruption of Independent Services or any other
act or neglect by the third party providing the Independent Services shall
not
constitute a default or constructive eviction by Landlord.
(b) Tenant
agrees, except to the extent of the negligence of Landlord, its partners,
employees, agents and/or assigns, to hold harmless and defend Landlord, its
partners, employees, agents and assigns from any claim Tenant may have arising
in any way out of the provision (or lack thereof) of the Independent Services
which Tenant has contracted to receive from the third parties.
17.30 Authority
to Bind Landlord. The
individuals signing this Lease on behalf of Landlord hereby represent and
warrant that they are empowered and duly authorized to bind Landlord to this
Lease.
17.31 Authority
to Bind Tenant. The
individuals signing this Lease on behalf of Tenant hereby represent and warrant
that they are empowered and duly authorized to bind Tenant to this Lease. If
Tenant is a corporation, limited liability company or limited or general
partnership, each individual executing this Lease on behalf of Tenant represents
and warrants that he or she is duly authorized to execute and deliver this
Lease
on behalf of Tenant, in accordance with a duly adopted resolution or consents
of
all appropriate persons or entities required therefor and in accordance with
the
formation documents of tenant, and that this Lease is binding upon Tenant in
accordance with its terms. Simultaneously with execution of this Lease, Tenant
shall deliver to Landlord a copy of the appropriate resolution or consent,
certified by an appropriate officer, partner or manager of Tenant, authorizing
or ratifying the execution of this Lease.
17.32 No
Usury.
No
interest charged, or chargeable by Landlord under this Lease (including but
not
limited to the interest chargeable under Section 5.03 and/or any late charge,
fee or other sum charged or withheld by Landlord and which is deemed to be
interest) shall exceed the maximum amount of interest permitted by any
applicable law. If any such interest, fee or charge would exceed such maximum,
then such interest, fee or charge shall be automatically reduced to the maximum
amount allowed by law and any sums already collected in excess of such maximum
amount shall be refunded by Landlord in cash or by granting Tenant a credit
in
the applicable amount which credit shall be applied against the next Base Rent
coming due.
44
17.33 Interpretation.
The
parties hereto specifically acknowledge and agree that the terms of this Lease
have been mutually negotiated and the parties hereby specifically waive the
rule
or principle of contract construction which provides that any ambiguity in
any
term or provision of a contract will be interpreted or resolved against the
party which drafted such term or provision.
17.34 Excused
Delays.
Except
as otherwise set forth in this Section 17.34, neither party shall have liability
to the other on account of the following acts (each of which is an “Excused
Delay” and jointly all of which are “Excused Delays”)” which shall include: (a)
the inability to fulfill, or delay in fulfilling, any obligations under this
Lease by reason of strike, lockout, other labor trouble, dispute or disturbance;
(b) governmental regulation, moratorium, action, preemption or priorities
or other controls; (c) shortages of fuel, supplies or labor; (d) any
failure or defect in the supply, quantity or character of electricity or water
furnished to the Premises by reason of any requirement, act or omission of
the
public utility or others furnishing the Building with electricity or water;
or
(e) for any other reason, whether similar or dissimilar to the above, or for
act
of God beyond a party’s reasonable control. If this Lease specifies a time
period for performance of an obligation of a party, that time period shall
be
extended by the period of any delay in the party’s performance caused by any of
the events of Excused Delay described herein; provided, that notwithstanding
anything to the contrary above, no payment of money (whether as Base Rent,
Tenant’s Share of Operating Expenses, or any other payment due under this Lease)
shall be postponed, delayed or forgiven by reason of any of the foregoing events
of Excused Delay.
17.35 Roof
Rights.
(a) General.
Tenant
shall have the right, at Tenant’s sole cost, to use a portion of the roof of the
Building for the installation, maintenance, repair and replacement of one or
more satellite dish(s) or antenna(e) and related equipment, including but not
limited to computer wires, cables and related devices (collectively, the
"Antenna Equipment") which is used in or serving the Premises. The size,
quantity, location, design, screening and weight of such Antenna Equipment
shall
be approved by Landlord, which approval shall not be unreasonably withheld
and
as required by the any governmental authority having jurisdiction thereof.
Any
request for consent hereunder shall contain detailed plans, drawings and
specifications identifying all work to be performed, the time schedule for
completion of the work, the identity of the entity that will provide service
to
the Antenna Equipment and the identity of the entity that will perform the
proposed work (which entity shall be subject to Landlord's reasonable approval,
and such approval shall be deemed granted if not denied within ten (10) business
days following written request). Landlord shall have ten (10) business days
in
which to evaluate the request after it is submitted by Tenant, and failure
to
deny such request with such ten (10) day business period shall be deemed
consent. The Landlord shall have the right to grant others the right to use
the
roof of the Building so long as such use does not materially and adversely
affect the rights of the Tenant.
45
(b) No
Warranty.
Landlord's approval of, or requirements concerning, the Antenna Equipment or
any
equipment related thereto, the plans, specifications or designs related thereto,
the contractor or subcontractor, or the work performed hereunder, shall not
be
deemed a warranty as to the adequacy thereof, and Landlord hereby disclaims
any
responsibility or liability for the same. Landlord disclaims all responsibility
for the condition or utility of the intra-building network cabling ("INC"),
if
any, and makes no representation regarding the suitability of the INC for
Tenant's intended use.
(c) Tenant’s
Obligations.
If
Landlord consents to Tenant's proposal, Tenant shall (i) pay all costs in
connection therewith (including all costs related to new Antenna Equipment);
(ii) undertake and all work related to the particular proposal, and the
installation, maintenance, repair and replacement of the Antenna Equipment
throughout the Lease Term, and the removal of the Antenna Equipment at the
expiration, or earlier termination, of the Lease in a good and workmanlike
manner at Tenant’s sole cost and expense without liens; (iii) use, maintain and
operate the Antenna Equipment and related equipment in accordance with and
subject to all laws governing the Antenna Equipment; (iv) repair and restore
the
roof (including structural and non-structural portions thereof) and the roof
membrane which are damaged or penetrated in the installation, maintenance,
repair, replacement or removal of the Antenna Equipment; and (v) not use or
operate any Antenna Equipment which unreasonably interferes with the satellite
dish or antenna reception of any other party using the roof of the Building.
Tenant shall be responsible to cause (I) Tenant's contractor to comply with
the
provisions of this Section and Landlord's reasonable requirements governing
any
work performed; (II) Tenant's contractor to provide all reasonable insurance
required by Landlord; (III) any work performed to comply with all applicable
statutes, ordinances and governmental rules and regulation; and (IV) "as-built"
drawings to be delivered to the Landlord promptly upon completion of any work.
The Tenant shall contract with, and use, the Landlord’s roof contractor (or a
roof contactor approved by Landlord if Landlord has no roof contractor) with
respect to all work relating to the roof, including but not limited to roof
penetrations. All contractors used for the installation, maintenance, repair,
replacement and/or removal of the Antenna Equipment must be approved by Landlord
in advance.
(d) No
Landlord Liability.
Except
to the extent arising from causes within the reasonable control of Landlord
or
Landlord's agents, contractors or employees, Landlord shall have no liability
for damages arising from, and Landlord does not warrant that the Tenant's use
of
any Antenna Equipment will be free from the following (collectively called
"Line
Problems"): (A) any shortages, failures, variations, interruptions,
disconnections, loss or damage caused by the installation, maintenance, or
replacement, use or removal of communications equipment by or for other tenants
or occupants at the Shopping Center and/or Building, by any failure of the
environmental conditions or the power supply for the Shopping Center and/or
Building to conform to any requirement of the Antenna Equipment or any
associated equipment, or any other problems associated with any Antenna
Equipment by any other cause; (B) any failure of any Antenna Equipment to
satisfy Tenant's requirements; or (C) any eavesdropping or wire-tapping by
unauthorized parties. Landlord in no event shall be liable for damages by reason
of loss of profits, business interruption or other consequential damage arising
from any Line Problems. Under no circumstances shall any Line Problems be deemed
an actual or constructive eviction of Tenant, render Landlord liable to Tenant
for abatement of Rent, or relieve Tenant from performance of Tenant's
obligations under this Lease.
46
| "Landlord" | "Tenant" | |||
| S/I NORTH CREEK III, LLC | LUMERA CORPORATION | |||
| By: | /s/ Xxxxxxx X. Xxxxxx | By: | /s/ Xxxxxx X. Xxxx | |
| Its: | Senior Investment Director | Its: | Chief Executive Officer | |
47