Exhibit 10.1
FIRST AMENDMENT OF LEASE
THIS FIRST AMENDMENT OF LEASE, dated this 5th day of October, 2005, by and
between 1130 Rainier LLC, a Washington LLC, a Washington limited liability
company (hereafter "LESSOR") and Loudeye Corp., and Loudeye Enterprise
Communications, Inc., both Delaware corporations (hereafter jointly and
severally "LESSEE").
RECITALS OF FACT
A. LESSOR and LESSEE have entered into a written lease dated December 20, 2003,
(hereafter "the Lease") whereby LESSOR leased to LESSEE and LESSEE leased from
LESSOR, premises in the County of King, State of Washington more particularly
described in the Lease and in Exhibit A attached hereto, and by this reference
incorporated herein:
B. LESSOR AND LESSEE desire to amend the Lease.
Now, therefore incorporating the foregoing recitals of fact and for valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
LESSOR and LESSEE agree to amend the Lease effective January 1, 2006, as
follows:
(1) Paragraph 1 (f) TERM shall be amended by adding thereto the
following new language: "The Lease term shall be extended for a
period of two (2) years beginning January 1, 2006, and ending
December 31, 2007; provided, however, LESSEE shall have the option
to terminate the Lease as of December 31, 2006, upon giving LESSOR
written notice of its exercise of this option on or before June 30,
2006."
(2) Addendum A, paragraph 1, ANNUAL BASIC RENT, shall be amended by
adding the following:
Year Annual Rent Monthly Rent
2006 $939,442.50 $78,286.88
2007 $960,319.00 $80,026.58
(3) Addendum A, paragraph 2, LANDLORD'S RIGHT TO TERMINATE LEASE, shall
be amended by adding the following new language: "In the event
Landlord exercises its right to terminate the Lease in part, Tenant
shall have the option to terminate the entire Lease, which option
shall be exercised, if at all, by a written notice thereof,
delivered to Landlord within ten (10) business days of Tenant's
receipt of Landlord's notice of termination of the Lease in part. In
addition, to assist Tenant in the planning of its vacation of all or
part of the leased premises, Landlord will notify Tenant of its
receipt of an acceptable offer from a prospective tenant to lease
substantially all the leased premises, within ten (10) business days
of said receipt."
(4) Addendum A, paragraph 3, TIMING OF TENANT'S PAYMENTS, shall be
amended by deleting entirely the existing language and substituting
therefore the following: "Rent, utilities, other charges and
expenses due from Tenant to Landlord shall be prepaid monthly, in
advance, so long as: (1) Tenant has not defaulted on its lease
obligations and (2) Tenant's unrestricted (1) cash, (2) cash
equivalents, and (3) marketable securities (hereafter "unrestricted
cash on hand") cover its current monthly burn rate for the then
remaining unpaid lease term, less the amount of the security deposit
(assuming through June 30, 2006, that the lease term will terminate
on December 31, 2006, and thereafter that the lease term will end on
December 31, 2007, if Tenant does not exercise its option to
terminate and set forth in subparagraph 1, above). For example, on
January 1, 2006, the required unrestricted cash on hand shall be
equal to the then current announced monthly burn rate times twelve
(12) less the amount of the security deposit and less the four (4)
months prepaid rent. As a further example, assuming the Lease is
not terminated by Tenant on or before June 30, 2006,on July 1, 2006,
the required unrestricted cash on hand shall be equal to the then
current announced monthly burn rate times eighteen (18) less the
amount of the security deposit and less the four (4) months prepaid
rent. If either of these two (2) conditions is not met, Tenant
thereafter shall pay rent, utilities, other charges and expenses
quarterly, in advance."
(5) Paragraph 1 (l) DIRECT EXPENSE BASE shall be amended by deleting the
"Year 2000" and substituting therefore "Year 2005".
(6) Addendum A, paragraph 4, ADDITIONAL EXPENSE REIMBURSEMENTS, shall be
amended by deleting entirely the existing language and substituting
therefore the following language: "To the extent Tenant occupies the
leased premises during normal business hours (Monday through
Friday, 8:00 a.m. through 5:00 p.m., excluding state and national
holidays) Tenant shall not be charged separately for electricity,
trash, telephone, janitorial or water used on the second floor or
the "non Computer Room" portions of the first floor as these
expenses shall be part of the fully serviced lease, subject only to
adjustment for increases therein over the base year 2005.
If Tenant occupies the second or non computer room portions of the
first floor beyond normal business hours, Tenant shall pay for
trash, electricity and water for those extra hours on a
proportionate basis comparing the number of occupied hours versus
normal business hours. The comparison shall be accomplished by
analyzing the hours of HVAC usage unless Tenant abuses the system by
utilizing the building system during periods when the HVAC system is
off in which case the security system shall be analyzed.
In any event, Loudeye shall pay for all electricity consumed by the
Computer Room (at pass through rates, to be calculated by separate
metering if currently in place or if not currently in place by
subtracting from the entire electrical cost allocable to the leased
premises the cost of electricity for the non computer room space
measured by comparing the cost of electricity per occupied square
foot at the Prefontaine Building (a similar aged and renovated
historical building) and for Computer Room UPS, generator,
satellite, wiring, HVAC, security, life safety, maintenance (at
pass through rates), insurance, trash, telephone, janitorial, and
damage to its equipment not otherwise covered by Landlord's or
Tenant's insurance. Tenant shall obtain its own maintenance
contracts on Landlord's UPS, generator, satellite systems, and shall
provide Landlord with copies of said contracts and receipts for
payments for said services."
(7) Paragraph 1 (n) SECURITY DEPOSIT shall be amended by adding the
following language: "Upon the later of January 3, 2006, or the
execution of this Lease Amendment, Tenant shall deliver to Landlord
(a) as prepayment of rent for the final four months of Rent that
become due prior to the scheduled termination of the extended term
of the Lease, and (b) as additional security for Tenant's
performance of the Lease, $320,106.34. The security deposit shall
not be mortgaged, assigned, or encumbered by Tenant without the
prior written consent of Landlord. On or after a date that is thirty
days prior to the first day of a calendar month which month is the
fourth month prior to the termination of the Lease term, the
Landlord shall apply said funds, in whole or in part, as payment of
rent for the final four months of the Lease term, without default by
the Tenant.
If an event of default by the Tenant occurs, Landlord may, but shall
not be required to, apply all or any portion of the security deposit
for payment of any Rent or sums otherwise due Landlord to cure said
default, or to hold as a cash security deposit. The use of the
security deposit or any part of it by Landlord shall not prevent
Landlord from exercising any other right or remedy provided by this
Lease or by law. Landlord shall not be required to proceed against
the security deposit. The security deposit shall not operate as a
limitation on any recovery to which Landlord may be entitled. If any
portion of the security deposit is applied by reason of a default by
the Tenant, Tenant shall, within five (5) days after written demand,
deposit cash with Landlord in an amount sufficient to return the
amount of the security deposit to be equal to the amount of the
security deposit required under this Lease ($473,164.34). If
Landlord transfers or
mortgages the Building, Landlord may transfer the security deposit
to the transferee or mortgagee and Tenant will look solely to the
transferee or mortgagee for the return of the security deposit."
(8) Addendum A, paragraph 8, BUILDING REPAIR, shall be added by the
addition of the following language: "Landlord shall spend up to,
but not more than, $83,506 to provide for mutually agreeable
protection of the first and second floor equipment from leaks that
may occur in the first, second, or third floor restrooms. By
undertaking this work, Landlord shall not be deemed to be
guaranteeing or warranting the future water tightness of the rest
rooms. Landlord shall repair the freight elevator on or before
January 1, 2006."
(9) Addendum A, paragraph 9, RENEWAL OPTION, shall be added by the
addition of the following language: "Subject to Landlord's
continuing right to terminate the Lease, and assuming Tenant has not
earlier exercised its right to terminate the Lease as of December
31, 2006, Tenant shall have one (1) option to extend the Lease for
the premises then leased for a period of three (3) years by
providing Landlord with its written exercise of said option no later
than March 31, 2007. The rent to be paid during the option period
shall be fair market including all concessions then available in the
marketplace (tenant improvement allowances, free parking, space
pockets, etc.) but in no event shall the rent be less than the rent
owing during 2007.
(10) Addendum A, paragraph 10, EXPANSION OPTION, shall be added by the
addition of the following language: "Tenant, like any other
prospective tenant, may offer to lease any other space in the
building that may come under Landlord's direct control during the
term of the Lease, and any extension thereof, at the same rates
available under the Lease. Landlord shall continue to lease all
unoccupied space without notice to Tenant. Landlord may refuse to
lease additional space to Tenant should Tenant's financial condition
not meet the satisfaction of Landlord in the exercise of Landlord's
absolute discretion.
(11) Paragraph 1 (o) PARKING shall be amended by deleting entirely the
existing language and substituting therefore the following language:
"Tenant shall pay thirty dollars ($30.00) per month per space for
its lease of 81.5 uncovered spaces and seventy dollars ($70.00) per
month per space for its lease of 8 covered spaces. Landlord shall
have the right to provide parking for Tenant either to the immediate
east or the immediate north of the leased premises."
(12) Paragraph 15 (a) REPAIRS SHALL be amended by adding the following
language: "Upon expiration of the Lease, the leased premises shall
be delivered back to Landlord by Tenant in broom clean condition,
normal wear and tear excepted. Tenant shall be responsible for the
repair/restoration of any and all damage done to the premises by
Tenant during its occupancy, including, without limitation, its
removal during its move out of any computer racks in the computer
room (which removal shall require the repair of the sub floor and
the replacement of the raised floor where the sub and raised floors
are penetrated to allow for the structural tie down of the racks).
At its option, but only with Landlord's prior written approval,
which may be withheld in the exercise of Landlord's absolute
discretion, Tenant may choose to leave the computer racks in the
computer room rather than removing them and repairing/replacing the
sub/raised floor."
(13) Addendum A, paragraph 11, BUILDING SIGNAGE, shall be added by the
addition of the following language: "Tenant has the non exclusive
right to install signage on the building at its sole cost subject to
prior written approval by Landlord and the city of Seattle."
Except as expressly amended herein, the remainder of the terms and
conditions, rights and obligations, as contained in the lease shall remain
in full force and effect.
Dated this 5th day of October, 2005.
1130 Rainier LLC Loudeye Corp., a Delaware corporation
By Seavest Financial Corporation
A Washington Corporation By /s/ Ron Stevens
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its CFO
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/s/ Paul E. Krug
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By PAUL E. KRUG
President
Loudeye Enterprise Communications Inc
By /s/ Eric S Carnell
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Its Vice President and Secretary
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