Exhibit 10.1
2200 FIRST AVENUE SOUTH
LEASE AGREEMENT
(OFFICE FORM)
This Lease is made as of August 24, 1999, by and between 2200 First Avenue South
LLC, a Washington limited liability company ("Landlord"), and The Cobalt Group,
Inc., a Washington corporation ("Tenant").
In consideration of the obligations of Tenant to pay rent and other charges as
provided in this Lease and in consideration of the other terms, covenants and
conditions of this Lease, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises described in this Lease for the term and
subject to the terms and conditions set forth in this Lease.
1. LEASE SUMMARY. Certain Lease provisions are summarized in this Section for
convenient reference:
1.1 Tenant's Trade Name..................................The Cobalt Group
1.2 Term......................6 years and 2 months (74 months total) plus
any partial month at the beginning of the Lease Term......(Section 4)
1.3 Renewal Terms.........................two consecutive five year terms
.......................................................(Sections 4, 6)
1.4 Premises Address.................Suite 400, 2200 First Avenue South,
Seattle, WA 98134 (all of the second, third and fourth floors
of the Building)
1.5 GLA in Premises....................................75,433 square feet
..................................................(Sections 5.1, 5.4)
1.6 GLA in Building....................................92,560 square feet
.........................................................Section 5.4)
1.7 Tenant's Pro Rata Share.........................................81.5%
........................................................(Section 5.4)
1.8 Initial Basic Rent Per Sq. Ft. of Gross Leasable Area ("GLA")..$21.00
($132,007.75 per month)...................................(Section 5)
1.9 Rent Adjustment ..........................................(Section 6)
Effective Date of Rent Increase New Basic Rent Per Monthly Basic Rent
Square Foot of GLA
November 1, 2000 $22.00 $138,293.83
November 1, 2001 $23.00 $144,579.92
November 1, 2002 $24.00 $150,866.00
November 1, 2003 $25.00 $157,152.08
November 1, 2004 $26.00 $163,438.17
1.10 Commencement Date: The earlier of (i) sixty (60) days after the Notice
Date, or (ii) the date on which Tenant first opens for business in the
Premises, but not earlier than November 1, 1999; provided, however, if
Landlord's Work is not completed to the extent required for Tenant to
open for business in the Premises on the Commencement Date, then the
Commencement Date shall be delayed until the date Landlord's Work is
sufficiently completed to enable Tenant to open for business in the
Premises; notwithstanding the foregoing, there shall be no delay of
the Commencement Date for any delay in the performance of Landlord's
Work caused by Tenant or its agents, employees, contractors or
subcontractors............................................(Section 4)
1.11 Use: General office use and for no other purpose.........(Section 14)
1.12 Guarantors.......................................................None
1.13 Security Deposit..........................................$861,193.42
..........................................................(Section 3)
1.14 First Month Basic Rent Deposit..................................$None
..........................................................(Section 3)
1.15 Operational Expenses Base Year: .................................2000
..........................................................(Section 7)
1.16 Brokers.............................Colliers International represents
Landlord; Flinn Ferguson Corporate Real Estate represents Tenant; both
brokers' commissions payable by Landlord.................(Section 28)
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1.17 Address for Notice Purposes:
To Landlord: c/o Zarett Properties
114 Alaskan Way South, Suite 120
Seattle, WA 98101
To Tenant: Suite 400
2200 First Avenue South
Seattle, WA 98134
References appearing in Section 1 are to designate some of the other places in
this Lease where additional provisions applicable to the particular Lease
provisions appear. Each reference in this Lease to any of the Lease provisions
contained in Section 1 shall be construed to incorporate all of the terms
provided for under such provisions, and such provisions shall be read in
conjunction with all other applicable provisions of this Lease. If there is any
conflict between any of the Lease provisions set forth in Section 1 and any
other provisions of this Lease, the terms of the more specific clause shall
prevail.
2. LEASE. Landlord leases to Tenant the exclusive use of the interior of the
area outlined on the floor plan attached as EXHIBIT A (the "Premises") being a
portion of the building located at 2200 First Avenue South, Seattle, Washington
("Building"), which constitutes a portion of the real property legally described
in EXHIBIT B ("Property"). Tenant acknowledges and agrees that the Premises will
be delivered to Tenant in its current "as-is" condition with the addition of
only those items of work described on EXHIBIT C. Tenant's exclusive rights of
occupancy are of the Premises only; Landlord also grants a non-exclusive license
to Tenant for the term of this Lease to use the Common Area, exclusive of the
parking areas, for access and uses expressly provided in this Lease only.
Landlord reserves for itself, the right from time to time to install, use,
maintain, repair, replace and relocate pipes, ducts, conduits, wires and
appurtenant meters and equipment above the ceiling surfaces, below the floor
surfaces and within the walls of the Building and Premises.
3. DEPOSITS. Tenant has deposited with Landlord the amount set forth in
Section 1.14 to be credited toward payment of the Basic Rent for the initial
month of the Lease term with any balance to be credited toward payment of the
Basic Rent for the following month(s) of the Lease term in the absence of a
default by Tenant. If Tenant defaults, Landlord may apply the deposits set forth
in Sections 1.13 and 1.14 to payment of any default. If Landlord sells or
otherwise transfers the Property, Landlord may transfer the deposit(s) to the
purchaser and Tenant shall look solely to such purchaser for return of the
deposit(s) and Landlord shall be released from all liability and obligations
under this Lease arising out of any act, occurrence or omission relating to the
Premises or this Lease occurring after such sale or transfer. Landlord may
commingle all deposits with other funds of Landlord; provided, however, Landlord
shall not commingle the deposit set forth in Section 1.13 ("Security Deposit")
with other funds of Landlord. Landlord shall notify Tenant of the separate
account where the Security Deposit is kept. All interest accrued on the Security
Deposit shall be the sole property of Landlord. Landlord shall refund to Tenant
any unapplied portion of the Security Deposit, without interest, within thirty
(30) days after termination of this Lease for any reason other than Tenant's
default. In the event of termination of this Lease due to Tenant's default,
Landlord shall refund to Tenant any unapplied portion of the Security Deposit,
without interest, within thirty (30) days after a final determination as to the
amount due Landlord, or other remedy to which Landlord is entitled as a result
of Tenant's default, and payment to Landlord of the full amount due and
fulfillment of any other remedy to which Landlord is entitled. So long as Tenant
is not then in default beyond expiration of any applicable cure period, Landlord
shall apply any unapplied portion of the Security Deposit, without interest,
towards payment of the Basic Rent due for the first, thirteenth, fourteenth,
twenty-fifth, twenty-sixth and seventy-fourth months of this Lease (exclusive of
any partial month at the beginning of the Lease term). Landlord shall not
withdraw any portion of the Security Deposit from the Security Deposit account
except under the following circumstances: (i) for the payment of Basic Rent when
due for the first, thirteenth, fourteenth, twenty-fifth, twenty-sixth and
seventy-fourth months of this Lease; (ii) to cure a default of Tenant which has
continued beyond expiration of any applicable cure period, and (iii) interest
may be withdrawn at any time. The Security Deposit shall be paid to Landlord in
cash in full no later than the next business day after execution of this Lease
by both Landlord and Tenant. If the Security Deposit is not timely paid, this
Lease may be terminated immediately upon delivery of notice of termination by
Landlord to Tenant.
4. TERM.
4.1 The term of this Lease is as set forth in Section 1.2 beginning on the
Commencement Date as defined in Section 1.10.
Tenant shall have no duty to pay rent until the Commencement Date. Tenant agrees
to sign a memorandum stating the Commencement Date at the request of Landlord.
4.2 The first Lease Year shall begin on the Commencement Date and end on
the last day of the twelfth full calendar month thereafter (unless the
Commencement Date is the first day of the month, in which event the first Lease
Year shall end on the last day of the eleventh full calendar month thereafter.
For example, if the Commencement Date is November 1, 1999, the first Lease Year
would end on October 31, 2000; if the Commencement Date is November 2, 1999, the
first Lease Year would end on November 30, 2000. After the first Lease Year,
"Lease Year" means each successive twelve (12) month period during the term of
this Lease.
PAGE - 2
4.3 If Tenant occupies the Premises prior to the Commencement Date
for the purpose of completing Tenant's Work or for any other purpose with
Landlord's prior written consent, such early occupancy shall be subject to all
of the terms and conditions of this Lease, including without limitation, the
provisions of Section 15, except that provided Tenant does not commence the
operation of business from the Premises, Tenant will not be obligated to pay
rent during the period of such early occupancy. Tenant agrees to provide
Landlord with prior notice of any such intended early occupancy and to cooperate
with Landlord during the period of any such early occupancy so as not to
interfere with Landlord in the completion of Landlord's Work.
4.4 The work on the Premises to be performed by Landlord is
described in EXHIBIT C ("Landlord's Work"). The work on the Premises to be
performed by Tenant is described in EXHIBIT D ("Tenant's Work"). When Landlord
has substantially completed Landlord's Work such that Tenant may reasonably
commence Tenant's Work and installation of equipment (even though a portion of
Landlord's Work may remain to be completed during or after Tenant's Work),
Landlord shall notify Tenant that the Premises are available for the
commencement of Tenant's Work; the date of such notice shall be the "Notice
Date."
4.5 Landlord shall not be liable for nor shall this Lease be
affected by any delay in the occurrence of the Commencement Date because of
delays caused to Landlord's Work by strikes, riots, fire, shortage of required
materials, acts of God, governmental intervention, delays or the like which are
not within its reasonable control. In the event Landlord fails to deliver
possession of the Premises to Tenant within one hundred and twenty (120) days
after execution of this Lease by both Landlord and Tenant, with Landlord's Work
sufficiently completed so that Tenant may reasonably commence Tenant's Work,
then Tenant shall have the right to terminate this Lease upon thirty (30) days
written notice to Landlord unless Landlord so delivers possession of the
Premises to Tenant before expiration of the thirty (30) days notice. In the
event of termination of this Lease by Tenant under this paragraph, all deposits
and prepaid rents shall be refunded in full to Tenant without interest.
4.6 Tenant shall have the right to extend the term of this Lease
for the additional number of consecutive five-year periods stated in Section 1.3
(each a "Renewal Term") on the conditions set forth in this paragraph. Tenant
shall exercise its right to extend the term of this Lease through the first
Renewal Term by written notice delivered to Landlord no earlier than twelve (12)
months but no later than six (6) months before the last day of the initial term
of this Lease. Tenant shall exercise its right to extend the term of this Lease
through each following Renewal Term by written notice delivered to Landlord no
earlier than twelve (12) months but no later than six (6) months before the last
day of the then Renewal Term. During the Renewal Terms, all of the terms and
conditions of this Lease shall continue to apply, including but not limited to
Tenant's payment of Tenant's Pro Rata Share of Excess Operational Expenses,
except that there shall be no Landlord's Work performable by Landlord and there
shall be no additional Renewal Terms. After the exercise of an option to extend,
all references in this Lease to the term shall be considered to mean the term as
extended, and all references to the end of the term shall be considered to mean
the term as extended. Tenant's option to extend the term of this Lease under
this paragraph may not be exercised if an event of default exists beyond
expiration of any applicable cure period. Tenant's option to extend the term of
this Lease under this paragraph shall also be deemed null and void if Tenant has
been late in the payment of rent on three (3) or more occasions within any
twelve (12) month period. For purposes of the preceding sentence, a payment
shall be deemed to be late if it is received by Landlord after the fifth day of
the month for which such rent is due.
5. RENT.
5.1 The initial annual Basic Rent shall be the product of the GLA
in the Premises as set forth in Section 1.5 multiplied by the Basic Rent per
square foot of GLA as set forth in Section 1.8. The annual Basic Rent shall be
paid monthly in twelve equal installments due and payable on the first day of
each month during each Lease Year. At Landlord's request, Tenant shall pay all
rent due under this Lease including Basic Rent and additional rent, by direct
deposit to such account as Landlord may designate from time to time.
5.2 In the event that the Commencement Date is other than the
first day of a calendar month, the rent for the initial partial month of the
first Lease Year shall be prorated accordingly and shall be due and payable on
the Commencement Date.
5.3 Basic Rent shall be increased periodically to the amounts and at
the times set forth in Section 1.9.
5.4 It is understood and agreed that the GLA figures set forth in
Sections 1.5 and 1.6 are approximations as the Building is presently undergoing
renovation. At any time within ninety (90) days after the Commencement Date,
Landlord or Tenant may remeasure the Premises and Building in accordance with
the Standard Method for Measuring Floor Area in Office Buildings, ANSI/BOMA
Z65.1-1996, as promulgated by the Building Owners and Managers Association
("BOMA Standard"). In the event that subsequent remeasurement of the Premises
and Building, within the time period specified above, indicates that the actual
GLA of the Building or Premises is greater or less than the GLA set forth in
Section 1, any payments due to Landlord from Tenant based upon the amount of GLA
shall be proportionally, retroactively and prospectively reduced or increased,
as appropriate, to reflect the actual number of GLA, as properly remeasured
under the BOMA Standard. If either party disputes the final accuracy of the
remeasurement, such dispute will be resolved pursuant to binding arbitration
with a single arbitrator in accordance with Washington law. If the parties do
not agree as to the identity of the arbitrator, the then Presiding Judge of the
Superior Court for the county in which the Premises are
PAGE - 3
located, upon an appropriate request which either party may make, shall appoint
the arbitrator. The Premises and Building shall not otherwise be again
remeasured except in connection with an actual change in the size of the
Premises or a change in the space available for lease in the Building. Tenant's
Pro Rata Share is set forth in Section 1.7 and is equal to the GLA of the
Premises divided by the GLA of the Building and shall be revised to comport with
any remeasurement. The Tenant Improvement Allowance and any deposits paid by
Tenant shall also be revised to comport with any remeasurement. Landlord and
Tenant shall at the request of the other execute a memorandum to memorialize the
actual GLA of the Building and Premises, Tenant's Pro Rata Share, and Basic Rent
over the term of this Lease, based upon any remeasurement under this paragraph.
6. RENEWAL TERM BASIC RENT.
6.1 During the first Lease Year of each Renewal Term, the Basic
Rent per square foot of GLA shall be an amount equal to one hundred percent
(100%) of the Fair Market Rental Rate of the Premises as of the commencement of
such Renewal Term; provided, however, that the Basic Rent shall not be less than
one hundred percent (100%) nor more than one hundred and fifty percent (150%) of
the Basic Rent payable during the immediately preceding Lease Year. For the
purposes of this Lease, the term "Fair Market Rental Rate" shall mean the annual
amount per leasable square foot that Landlord has accepted in current
transactions between non-affiliated parties from new, non-expansion, non-renewal
and non-equity tenants of comparable credit-worthiness, for comparable space,
for a comparable use for a comparable period of time ("Comparable Transactions")
in the Building, or if there are not a sufficient number of Comparable
Transactions in the Building, what a landlord of a comparable building in the
vicinity of the Building would accept in Comparable Transactions. In any
determination of Comparable Transactions for the first Renewal Term, expenses
associated with a new lease will be disregarded including but not limited to
brokerage fees, tenant improvement allowances, free rent periods, and so forth
(i.e., the Fair Market Rental Rate will not be adjusted to take into account
such factors so that Landlord retains the benefit of not having to realize those
expenses). In any determination of Comparable Transactions for the second
Renewal Term, expenses associated with a new lease will be taken into account
including but not limited to brokerage fees, tenant improvement allowances, free
rent periods, and so forth (i.e., the Fair Market Rental Rate will be adjusted
to take into account such factors so that Landlord realizes those expenses). For
both Renewal Terms, appropriate consideration shall be given to the annual
rental rates per leasable square foot, the type of escalation clause (e.g.,
whether rent increases over the applicable period), and the costs passed through
to the tenant compared to the payment by Tenant of Tenant's Pro Rata Share of
Excess Operational Expenses under this Lease.
6.2 If, after bargaining in good faith, either party determines
that the parties cannot agree on the Fair Market Rental Rate of the Premises,
the Fair Market Rental Rate shall be established by binding arbitration with a
single arbitrator in accordance with Washington law. If the parties do not agree
as to the identity of the arbitrator, the then Presiding Judge of the Superior
Court for the county in which the Premises are located, upon an appropriate
request which either party may make, shall appoint the arbitrator. Within ten
(10) days of the appointment of the arbitrator, each party shall submit in
writing to the arbitrator the amount which each proposes be established as the
Fair Market Rental Rate at the commencement of the Renewal Term ("Submissions").
The arbitrator shall not disclose any Submission to the other party until the
arbitrator has received both parties' Submissions. The arbitrator shall study
such evidence and information as the arbitrator deems appropriate to determine
the Fair Market Rental Rate of the Premises; provided that the Arbitrator's
determination of the Fair Market Rental Rate of the Premises shall be confined
and strictly limited to selection, as the more reasonable approximation of the
Fair Market Rental Rate of the Premises, of the amount stated in the Submission
of Tenant or the Submission of Landlord, and the arbitrator may not select or
declare any third number to be the Fair Market Rental Rate of the Premises. Any
Submission which proposes a Fair Market Rental Rate which is less than one
hundred percent (100%) or more than one hundred and fifty percent (150%) of the
Basic Rent payable during the immediately preceding Lease Year shall be
disregarded by the arbitrator. In its determination of Fair Market Rental Rate,
the arbitrator shall take into account the factors set forth in the preceding
paragraph. Except as to the Parties' Submissions, any other communication by a
party to the arbitrator shall be in writing with a copy to the other party. Upon
completion of the arbitrator's investigation of the Fair Market Rental Rate of
the Premises, the arbitrator shall report in writing to each of the parties
which party's Submission has been selected by the arbitrator as the more
reasonable approximation of the Fair Market Rental Rate of the Premises without
requirement of further substantiation or information. Upon receipt of such
report from the arbitrator, the arbitrator's assignment shall be complete, and
each of the parties to this Lease agrees to accept such determination by the
arbitrator as binding and conclusive without any right of appeal. Tenant and
Landlord each shall pay its own costs of arbitration and one-half of the fee due
to the arbitrator for the arbitration services.
7. ADDITIONAL RENT.
7.1 In addition to Basic Rent, Tenant shall pay to Landlord, as
additional rent, Tenant's Pro Rata Share of the Operational Expenses incurred by
Landlord in excess of the Operational Expenses for the Base Year set forth in
Section 1.15 ("Tenant's Pro Rata Share of Excess Operational Expenses").
Landlord shall reasonably estimate the monthly amount of Operational Expenses
payable by Tenant, and Tenant shall pay Landlord such estimated amount together
with Tenant's monthly payment of Basic Rent, but failure by Landlord to give
such estimate shall not constitute a waiver by Landlord of its right to require
payment by Tenant of Tenant's Pro Rata Share of Excess Operational Expenses.
Landlord may adjust the estimated monthly amount to be paid based upon
Landlord's actual Operational Expenses.
7.2 On or before April 1st of each calendar year during the term
of this Lease, Landlord shall endeavor to compute any charge or credit to the
Tenant for any difference between the actual and the
PAGE - 4
estimated Excess Operational Expenses, but failure by Landlord to complete such
computation by said date shall not constitute a waiver by Landlord of its right
to require payment of Tenant's Pro Rata Share of Excess Operational Expenses.
Any deficit shall be paid by Tenant within ten (10) days after notice. If
overpaid, Landlord may either apply such overpayment to Tenant's rent
obligations next coming due or reimburse Tenant. Landlord may establish a
reserve account for the payment of Excess Operational Expenses, commingle such
reserve with other funds and, subject to an accounting, withdraw when payments
are due without notice to Tenant. No interest shall be due on any reserve
account. The reserve account shall not exceed five percent (5%) of the annual
Operational Expenses. Tenant's obligation for Tenant's Pro Rata Share of Excess
Operational Expenses for any partial calendar year during the term of the Lease
shall be prorated.
7.3 Operational Expenses shall include all costs of operation and
maintenance of the Property (including any other areas which Landlord may elect
to add for use for tenant, customer or employee parking) incurred by Landlord
including but not limited to: water, electricity, natural gas if supplied, heat,
sewer and garbage removal; licenses, permits and inspection fees; landscaping,
irrigation, parking lot and garage maintenance, directional and other signage,
lighting, repaving and restriping; roof maintenance; customary and reasonable
property management fees not to exceed three percent (3%) of gross rents;
maintaining and repairing sewer main, ducts, conduits and similar items, fire
protection systems, sprinkler and security alarm systems, elevators, storm and
sanitary drainage systems and other utility and mechanical systems; backflow
prevention; expenses of any special events conducted by Landlord in the Common
Area; materials and services for operation, maintenance or the security or
protection of the Property including any janitorial services, pest control, HVAC
service contracts and any other repair and maintenance by Landlord; Insurance
Premiums and Taxes; but shall not include cost of improvements for individual
tenants, depreciation on the Building, Capital Improvements, any insurance
deductible in excess of $10,000, any uninsured casualty loss, costs of repair of
latent defects in the Building, remediation of any environmental condition not
caused by Tenant, and any alteration of the Building required by any laws in
force on the date of execution of this Lease by Landlord and not required due to
Tenant's use of the Premises. Capital Improvements shall be defined as repairs
by Landlord of foundations, roofs and exterior walls, exclusive of glass,
painting, signage, and routine maintenance, which are classified as capital
expenditures under standard and reasonable accounting principles employed by
Landlord. Operational Expenses shall include capital improvements required by
any law newly enacted after execution of this Lease or which will improve
operating efficiency, provided that such capital expenditures shall be amortized
by dividing the original cost of such capital expenditure by the number of years
of useful life of the subject of the capital expenditure and provided, further,
that capital expenditures to improve operating efficiency shall be limited to
the savings generated by the operating efficiency. "Insurance Premiums" are the
expense of insurance maintained by Landlord as contemplated by this Lease
together with any reasonably required insurance including rental loss insurance
for an amount equal to the then gross rents of the Property for a loss period of
approximately twelve months. "Taxes" are all real estate taxes, any installment
of any improvement or other special assessment or personal property taxes
charged to the Property now or in the future and all other governmental charges
or requirements whether ordinary or extraordinary and including those intended
to benefit the environment (exclusive of charges for remediation of any
environmental condition on the Property not caused by Tenant and not general to
the geographical area of the Property). Landlord shall elect to pay any new
assessments or charges over the longest period available and Tenant shall pay
only those installments allocable to Tenant's Lease term. Federal and state
income taxes computed on Landlord's net income shall not be included in Taxes.
If the assessed value of the Property in the Base Year does not reflect the
renovation of the Building and the Tenant Improvements made to the Premises,
then the real estate taxes charged in the Base Year shall be adjusted, for the
purpose of calculating Excess Operational Expenses payable by Tenant, to the
amount of real estate taxes which would have been charged if the assessed value
of the Property in the Base Year took into account the renovation of the
Building and the Tenant Improvements made to the Premises.
7.4 If less than one hundred percent (100%) of the GLA of the Building
is occupied during any calendar year period, then the variable portion of the
Operational Expenses for such period shall be deemed to be equal to the total of
the variable portion of Operational Expenses which would have been incurred by
Landlord if one hundred percent (100%) of the GLA of the Building had been
occupied for the entirety of such calendar year with all tenants paying full
rent, as contrasted with free rent, half rent or the like. Notwithstanding the
foregoing, Landlord shall not recover as Excess Operational Expenses more than
100% of the Excess Operational Expenses actually paid by Landlord. Operational
Expenses shall be computed according to the cash or accrual basis of accounting,
as Landlord may elect in accordance with standard and reasonable accounting
principles employed by Landlord. In the event of any change during the term of
this Lease between a cash and accrual basis of accounting, the amount of Excess
Operational Expenses payable by Tenant shall not be more than five percent (5%)
greater than if such change had not been made. Landlord presently uses a cash
basis of accounting.
7.5 If Landlord causes utilities for the Premises to be separately
metered from utilities for other portions of the Property or otherwise provides
services (including air conditioning and heating) separately for either the
Premises or other portions of the Property, Landlord may elect to require the
recipient of such services or utilities to pay directly for all such separately
metered or provided utilities or services as received. In the event that such
utilities or services to the Premises or other areas of the Property are so
separately metered or charged, Tenant's Pro Rata Share of Excess Operational
Expenses (as to such utilities or services) shall be adjusted to equitably
compensate for separate charging of such utilities or services. Landlord shall
not be liable for any interruption or failure in utility services.
PAGE - 5
7.6 Tenant shall pay directly and when due any personal property tax
assessed against any personal property or leasehold improvements owned by Tenant
and any governmental charges resulting from Tenant's use or occupancy of the
Premises.
7.7 Should any governmental taxing authority acting under any present
or future law, ordinance or regulation levy, assess or impose a tax, excise or
assessment (other than an income or franchise tax) upon or against or measured
by rent, or any part of it, Tenant shall pay such tax, excise and/or assessment
when due or shall on demand reimburse Landlord for the amount thereof, as the
case may be.
7.8 Any Lease provision providing for Landlord to pay an expense or
perform a service shall not limit Tenant's agreement to pay, as additional rent,
Tenant's Pro Rata Share of Excess Operational Expenses.
8. PAYMENT.
8.1 Tenant will pay all rents, without any deduction or offset, at the
office of Landlord, in advance, on or before the first day of each calendar
month, at such reasonable location as Landlord designates.
8.2 A late charge shall be paid for any payment not received by
Landlord within five (5) days of its due date, which late charge shall be equal
to ten percent (10%) of the late payment. The first time in any calendar year
that a late charge is due, Landlord shall deliver a three (3) day notice to
Tenant of the payment due and the late charge. If the payment due is paid before
expiration of the three (3) day notice, no late charge shall be due. No notices
shall be required with respect to any subsequent late charges in the calendar
year.
8.3 In the event any payment is not received within twenty days of its
due date, an additional late charge shall be assessed, which additional late
charge shall be equal to 5% of the payment so due for each calendar month or
portion thereof until paid in full, together with any other late charges.
9. QUIET ENJOYMENT. Landlord warrants it has the right to make this Lease,
and Tenant, if not in default, shall have quiet and peaceful possession and
enjoyment of the Premises for the term of this Lease.
10. ASSIGNMENT AND SUBLETTING.
10.1 Without Landlord's prior written consent, Tenant shall not assign,
mortgage, or in any manner transfer this Lease whether voluntarily or
involuntarily or by operation of law, or sublet or license the Premises or any
part of it. Consent to an assignment or sublease shall not be considered to be
consent to any subsequent assignment or sublease. Landlord shall not
unreasonably withhold, delay or condition Landlord's consent to an assignment or
sublease. Landlord's consent to an assignment or sublease shall be deemed
granted if Landlord fails to deliver to Tenant Landlord's reasons for
withholding Landlord's consent to such assignment or sublease, in writing,
within ten (10) business days after delivery to Landlord of Tenant's written
request for such consent together with information respecting the proposed
subtenant or assignee, financial statements of the proposed subtenant or
assignee, the terms of the proposed sublease or assignment, and any other
information or documents reasonably requested by Landlord.
10.2 If Landlord's consent to an assignment or sublease is requested on
or after November 1, 2001, Landlord reserves the right to terminate this Lease,
or if consent is requested for subletting less than the entire Premises,
Landlord reserves the right to terminate this Lease with respect to the portion
for which such consent is requested at the proposed effective date of such
subletting. In such event, Landlord may enter into the relationship of Landlord
and Tenant with any such subtenant or assignee based on the rent (and/or other
compensation) and the term agreed to by such subtenant or assignee and otherwise
upon the terms and conditions of this Lease. Landlord will notify Tenant in
writing of Landlord's election under this paragraph to terminate this Lease with
respect to all or any portion of the Premises ("Termination Notice"). Tenant may
notify Landlord in writing, within five (5) business days after delivery of the
Termination Notice to Tenant, that Tenant withdraws its request for Landlord's
consent to the assignment or sublease and no assignment or sublet shall occur.
In the event of Tenant's timely withdrawal notice, the Termination Notice shall
be void.
10.3 One-half of all rent or other consideration received by Tenant
from its subtenants or assignees in excess of the rent payable by Tenant to
Landlord under this Lease for the applicable portion of the Premises (and net of
expenses reasonably incurred by Tenant in connection with such sub-let or
assignment including but not limited to brokerage fees), with respect to the
time period on and after November 1, 2001, shall be paid to Landlord. Any sums
to be paid by a subtenant or assignee to Tenant in consideration of the
assignment of this Lease or sublease of the Premises or any portion of the
Premises, if paid in one or more lump sums before November 1, 2001, shall be
amortized in equal monthly payments over the term of the sublease or assignment
and one-half of the amount allocable to the period of time on and after November
1, 2001, shall be paid to Landlord no later than November 1, 2001.
10.4 Tenant shall reimburse Landlord for any expense incurred by
Landlord as a result of any request for such consent including any new or
revised signage and attorney fees for review or preparation of related
documents. Subtenants or assignees shall become directly liable to Landlord for
all of Tenant's Lease obligations without limiting the liability of Tenant for
the full, complete and prompt performance of
PAGE - 6
Tenant's obligations under this Lease. Tenant agrees that any modification,
release or extension granted by Landlord to any subtenant or assignee shall not
relieve Tenant of any liability to Landlord. If Tenant is an entity other than a
natural person, any change in the ownership of, or power to vote, a controlling
interest in the entity shall constitute an assignment for the purposes of this
paragraph, except for changes resulting from (i) publicly traded stock, and (ii)
mergers or acquisitions so long as the surviving entity has a net worth equal to
or greater than the previously existing tenant and the surviving entity assumes
all of Tenant's obligations under this Lease. In connection with any sublease or
assignment, Tenant shall provide Landlord with copies of all assignments,
sublease and assumption instruments.
11. ALTERATIONS.
11.1 Tenant shall not alter the Premises without first obtaining the
written consent of Landlord. Landlord may impose reasonable conditions on its
consent including approval of plans, contractor and waiver of lien rights, and
the provision by Tenant of "Builder's All Risk" insurance in a customary and
reasonable amount approved by Landlord covering the construction of such
alterations. Tenant shall provide to Landlord, before commencement of Tenant's
Work, sufficiently detailed drawings and specification of Tenant's Work together
with copies of all required building permits for Landlord's advance review and
approval. Prior to the termination of the Lease, Tenant shall, at Tenant's
expense, remove any alterations made by Tenant (other than the original Tenant's
Work), designated by Landlord to be removed, and repair any damage to the
Premises caused by the alteration or removal. Unless designated by Landlord for
removal, any alterations made by Tenant shall become the property of Landlord at
the termination of the Lease. If Tenant desires any alteration requiring boring
or cutting, Landlord will direct where and how the boring and cutting for
installation will be permitted. All work done by Tenant with respect to any
alterations must be done in a good and workmanlike manner and diligently
prosecuted to completion.
11.2 No approval by Landlord of Tenant's construction plans for
Tenant's Work or any other alterations shall be deemed to be any warranty or
assurance of the completeness or feasibility of such plans. Tenant agrees that
it will not install any equipment that will exceed or overload the capacity of
any equipment serving the Property and that, if any equipment installed by
Tenant shall require additional capacity, the same shall be installed at
Tenant's expense. Tenant shall not install any automatic teller machine or other
remote banking device.
12. SERVICES AND UTILITIES.
12.1 Landlord agrees to furnish to the Premises between the hours of
7:00 a.m. through 6:00 p.m., Monday through Friday, and 7:00 a.m. through noon
Saturday, exclusive of holidays, electricity for normal lighting and fractional
horsepower office machines, and heat and air conditioning required in Landlord's
judgment for the comfortable use and occupation of the Premises. Tenant shall
pay as additional rent the cost of heat, air conditioning and utilities
furnished during other than the normal hours established by Landlord, at a
minimum hourly fee as determined by Landlord from time to time and in no event
less than Thirty and No/100 Dollars ($30.00) per hour of such use. Tenant shall
provide Landlord with Forty-Eight (48) hours advance written notice of the need
for such additional use. Landlord shall provide janitorial service as provided
in this Lease. Landlord shall provide lamp replacement for Landlord-furnished
lighting, toilet room supplies, and exterior glass washing with reasonable
frequency. Landlord shall also maintain and keep lighted the common stairs,
common entries and toilet rooms in the Building. Landlord shall not be liable
for, and Tenant shall not be entitled to, any reduction of Rent by reason of
Landlord's failure to furnish any of the foregoing when such failure is caused
by accident, breakage, repairs, strikes, utility outages, lockouts or other
labor disturbances or labor disputes of any character or by any other cause,
similar or dissimilar, beyond the reasonable control of Landlord, and; no
temporary interruption or failure of such services incident to the making of
repairs, alterations or improvements shall be deemed as an eviction of Tenant or
relieve Tenant from any of Tenant's obligations hereunder. Landlord shall not be
liable under any circumstances for a loss or injury to property, however
occurring, through or in connection with or incidental to failure to furnish any
of the foregoing. Wherever heat generating machines or equipment are used in the
Premises which affect the temperature otherwise maintained by the air
conditioning system, Landlord reserves the right to install supplementary air
conditioning units in the Premises, and the cost thereof, including the cost of
installation and the cost of operation and maintenance thereof, shall be paid by
Tenant to Landlord upon demand by Landlord.
12.2 Tenant shall not, without written consent of Landlord, use any
apparatus or device in the Premises, including, but without limitation thereto,
electronic data processing machines and punch card machines, which will in any
way increase the amount of electricity usually furnished or supplied for the use
of the Premises as general office space; nor connect with electric current
except through existing electrical outlets in the Premises, any apparatus or
device, for the purpose of using electric current. If Tenant shall require water
or electric current in excess of that usually furnished or supplied for the use
of the Premises as general office space, Tenant shall first procure the written
consent of Landlord, which Landlord may refuse, to the use thereof, and Landlord
may cause a water meter or electrical current meter to be installed in the
Premises, so as to measure the amount of water and electric current consumed for
any such use. The cost of any such meters and of installation, maintenance and
repair thereof shall be paid for by the Tenant, and Tenant agrees to pay
Landlord promptly upon demand therefor by Landlord for all such water and
electric current consumed as shown by said meters, at the rates charged for such
services by the local public utility furnishing the same, plus any additional
expense incurred in keeping account of the water and electric current so
consumed. If a separate meter is not
PAGE - 7
installed, such excess cost for such water and electric current will be
established by an estimate made by a utility company or consulting engineer.
12.3 Tenant acknowledges, understands and agrees that Landlord shall
have no obligation or responsibility to provide guard service or other security
measures for the benefit of the Premises or the Property other than the card-key
access system which is part of Landlord's Work. Tenant assumes sole
responsibility for the protection of Tenant, its agents and invitees and the
property of Tenant and of Tenant's agents and invitees from acts of third
parties. Landlord may, at its sole option, however, provide security protection
for the Premises or Property, in which event such costs and expenses shall be
included within the definition of Operational Expenses.
13. MAINTENANCE. Landlord shall provide daily janitorial service to the
Premises (exclusive of Saturdays, Sundays and holidays) including vacuuming,
dusting, trash removal and such regular maintenance as is normally conducted in
a comparable class office building in the geographical area of the Premises
including but not limited to window cleaning, pest control and snow shoveling;
provided that janitorial service shall not include shampooing the carpets.
Tenant shall make repairs and replacements to the Premises and Common Area, or
Building needed because of any negligent or intentional act or omission of
Tenant or Tenant's agents, employees or invitees, except to the extent that the
repairs or replacements are covered by or required by the terms of this Lease to
be covered by Landlord's insurance. Except for the repairs and replacements that
Tenant must make under the preceding sentence, Landlord shall pay for and make
all other repairs and replacements to the Premises, Common Area and Building,
and shall maintain the Building in good condition including but not limited to:
the foundations, bearing and exterior walls (including glass), subflooring and
roof (including skylights), electrical, plumbing and sewage systems, gutters and
down spouts, the heating, ventilating and air conditioning system, interior
walls, floors, ceilings, interior and exterior doors and windows and their
appurtenant sills and frames, together with all fixtures, appliances, elevators,
equipment, and plumbing and utility lines. Landlord shall have no obligation to
perform any maintenance under the preceding sentence until a reasonable time
after receipt of written notice of the need for such maintenance. In no event
shall Tenant be entitled to undertake any such maintenance or repairs, whether
at the expense of Tenant or Landlord, and Tenant hereby waives the benefits of
any law now or hereafter in effect which would otherwise provide Tenant with
such right. Notwithstanding the foregoing, if action on the part of Tenant is
required immediately to prevent property damage, personal injury or material
interference with Tenant's business conducted at the Premises, then Tenant may
take such reasonably required preventative action and request reimbursement for
the cost of such action from Landlord. Landlord shall promptly reimburse Tenant
for such cost if the action taken by Tenant was reasonable and required due to a
cause for which Landlord is responsible under the terms of this Lease. If
Landlord fails to reimburse Tenant for an amount due under the preceding
sentence within thirty (30) days of Tenant's notice to Landlord of the amount
due, then the amount due shall bear interest at the rate of twelve percent (12%)
per annum. Tenant shall in no event be entitled to offset against rents any
amount claimed to be owed by Landlord. The Lease and Tenant's obligations
hereunder shall in no way be affected, impaired or excused because Landlord is
unable to fulfill any of its obligations under this Lease due to fire,
earthquake, inclement weather or other acts of God, acts of the public enemy,
riot, insurrection, governmental regulation of the sales of materials or
supplies or the transportation thereof, strikes or boycotts, shortages of
materials or labor, or any other cause beyond the control of Landlord.
14. USE OF PREMISES.
14.1 Tenant shall use the Premises solely for the purposes set forth in
Section 1.11 and for no other purpose. Neither Landlord nor any agent of
Landlord has made any representation or warranty respecting the Premises or the
Property or the suitability of the Premises or the Property for the conduct of
Tenant's business, nor has Landlord agreed to undertake any alteration or
improvement to the Premises or the Property, except for the Landlord's Work.
Landlord may from time to time, in its sole discretion, make such alterations,
deletions or improvements to the Property as Landlord may deem necessary or
desirable, without compensation or notice to Tenant. Tenant shall promptly
comply with and be responsible for its agents, employees or invitees complying
with all laws, orders and regulations affecting its use of the Property. Tenant
shall not do or permit anything to be done in or about the Premises or Property
or bring or keep anything in the Premises that will in any way increase the
premium for fire or casualty insurance. Tenant will not perform any act or carry
on any practice that may injure the Premises or the Property; that may be a
nuisance or menace to other tenants of the Property; or that shall in any way
interfere with the quiet enjoyment of such other tenants.
14.2 Tenant shall faithfully observe and comply with the rules that
Landlord shall from time to time promulgate. Landlord reserves the right from
time to time to make all reasonable modifications to such rules. The additions
and modifications to those rules shall be binding upon Tenant upon delivery of a
copy of them to Tenant; provided, however, that such additions or modifications
shall not impose additional monetary obligations on Tenant. Landlord shall not
be responsible to Tenant for the non-compliance with any such rules by other
tenants or occupants. The parties acknowledge that the rules attached hereto as
EXHIBIT E are presently the rules which are in effect.
14.3 Tenant will not permit anything in the Premises that will increase
the rate of any insurance or prevent Landlord from taking advantage of any
ruling of an insurance bureau which would allow reduced rates for insurance
policies or that may be dangerous to any person or the Property; Tenant will not
permit any objectionable noise or odor to be emitted from the Premises, and;
Tenant will not permit the Premises to be used for any illegal purpose. Tenant
will comply at Tenant's own cost and expense with all orders, notices,
regulations, or requirements of any municipality, state or other
PAGE - 8
governmental authority arising from Tenant's use of said Premises. No article or
articles which in the aggregate would exceed the design standard of the Premises
shall be moved into the Premises; Landlord shall have the right to fix the
position within the Premises of any article of unusual weight.
14.4 Tenant agrees that the opening of its business in the Premises
will be its acknowledgement that it has inspected and examined the Premises,
knows the condition thereof, and accepts same from Landlord in its present
condition, and Landlord has satisfactorily completed all of Landlord's Work and
thereby fulfilled any obligations of Landlord to prepare the Premises for
Tenant's use; provided, however, Landlord shall remain responsible for the
repair of latent defects in the following portions of the Building: (i)
structural portions, (ii) the roof, and (iii) the utility systems.
14.5 Tenant shall not use or permit the use of the Premises for the
generation, storage, treatment, use, transportation, handling or disposal of any
chemical, material or substance which is regulated as toxic or hazardous or
exposure to which is prohibited, limited or regulated by any governmental
authority, or which, even if not so regulated, may or could pose a hazard to the
health or safety of persons on the Premises or other tenants or occupants of the
Property or property adjacent thereto, and no such chemical, material or
substance shall be brought onto the Premises without the Landlord's express
written approval. Tenant agrees that it will at all times observe and abide by
all laws and regulations relating to the handling of such materials and will
promptly notify Landlord of (a) the receipt of any warning notice, notice of
violation, or complaint received from any governmental agency or third party
relating to environmental compliance and (b) any release by Tenant, or otherwise
known to Tenant, of hazardous materials on the Premises and/or Property. Tenant
shall, in accordance with all applicable laws, carry out, at its sole cost and
expense, any remediation required as a result of the release of any hazardous
substance by Tenant or by Tenant's agents, employees, contractors or invitees,
from the Premises and/or Property. Notwithstanding the foregoing, Tenant shall
have the right to bring on to the Premises reasonable amounts of cleaning
material and the like necessary for the operation of the Tenant's business, but
Tenant's liability with respect to such materials shall be as set forth in this
paragraph.
15. MECHANICS' LIEN. Tenant agrees that it will pay, when due, all costs
for work caused to be done by it on the Premises, and will keep the Premises
free and clear of all mechanics' liens and other liens on account of work done
for it. Tenant agrees to and shall indemnify, defend and hold Landlord harmless
against liability, loss, damage, costs, attorneys' fees and all other expenses
on account of claims of lien of laborers or materialmen or others for work
performed or material or supplies furnished for Tenant. If Tenant shall desire
to contest any claim of lien, it shall furnish Landlord adequate security in the
value or in the amount of the claim, plus estimated costs and interest. If a
judgment establishing a lien for any amount is entered which affects the
Premises or Landlord, Tenant shall pay and satisfy the same at once. Should any
claims of lien be filed against the Premises or any action affecting the title
to the Property be commenced, Tenant shall forthwith give Landlord written
notice thereof and provide adequate security to Landlord for the payment of such
claim.
16. INSURANCE BY LANDLORD.
16.1 Landlord shall maintain insurance covering the Property, including
any alterations by Landlord for full insurable replacement cost during the term
of this Lease, providing protection against any peril included within the
classification "fire and extended coverage," together with insurance against
sprinkler damage, vandalism and malicious mischief. Any insurance proceeds
payable under such policy shall be used to perform any obligation of Landlord to
repair or rebuild the Premises or Property, if Landlord elects to repair or
rebuild as provided in this Lease.
16.2 In addition to the insurance described in Section 16.1, Landlord
may maintain all risk, casualty and liability, including boiler and machinery,
rental abatement, flood, earthquake and other insurance coverages deemed
necessary by Landlord with respect to the Building and its operation.
16.3 The premiums, costs and deductibles of all such insurance policies
carried by Landlord shall be Operational Expenses with respect to which Tenant
shall pay Tenant's Pro Rata Share of Excess Operational Expenses.
Notwithstanding the foregoing, in the event Landlord adds a new type of
insurance coverage after the Base Year (unless such addition is required by
law), then the additional premium charged for the new type of insurance coverage
will not be included in Tenant's Pro Rata Share of Excess Operational Expenses
but all increases in such premium shall be included in future years.
17. INSURANCE BY TENANT. Tenant shall maintain, at its expense, and naming
Landlord as an additional insured, the following insurance policies and furnish
Landlord a certificate from the insurance carrier evidencing the insurance (at
the beginning of this Lease and at each renewal of the insurance), that Landlord
is a named insured, and that the insurance cannot be terminated, discontinued or
diminished without giving Landlord at least twenty (20) days prior written
notice.
17.1 Comprehensive general liability insurance ("Liability Policy")
with an insurance company having a Best's Rating of A-XI or higher with minimum
limits of $500,000 (per accident) for property damage and $1,000,000 (per
person) and $3,000,000 (per accident or occurrence) for bodily injuries and
death, naming as insureds Tenant, and as additional insureds, Landlord and any
lender secured by the Premises whose name has been provided to Tenant. Tenant
may carry said insurance under a blanket policy. The Liability Policy shall
insure against claims for bodily injury, personal injury and property damage
based upon, involving or arising out of the use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. The Liability Policy shall include
an "Additional Insured - Managers or Landlords of Premises" endorsement and
contain the "Amendment of the Pollution Exclusion" endorsement for damage caused
by heat, smoke or fumes from a hostile fire. The Liability Policy shall
PAGE - 9
not contain any inter-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Tenant's indemnity obligations
under this Lease. The limits of said insurance required by this Lease or as
carried by Tenant shall not, however, limit the liability of Tenant nor relieve
Tenant of any obligation hereunder. All insurance required to be carried by
Tenant under this Lease shall be primary to and not contributory with any
similar insurance carried by Landlord, whose insurance shall be considered
excess insurance only.
17.2 Insurance covering Tenant's property including Tenant's original
improvements to the Premises and any Tenant alterations in the Premises in an
amount not less than one hundred percent (100%) of their full insurable
replacement cost from time to time during the term of this Lease providing
protection against any peril included within the classification "fire and
extended coverage," together with insurance against sprinkler damage, vandalism
and malicious mischief. Policy proceeds shall be used to repair or replace
property damaged or destroyed, and to return the Premises to a condition
generally approximating the condition existing prior to such damage.
18. WAIVER OF SUBROGATION. Landlord and Tenant hereby waive any rights they
may have against each other and other tenants on account of any loss or damage
occasioned to Landlord or Tenant, as the case may be, their respective property,
the Premises, or its contents or to other portions of the Property, arising from
any risk generally covered by fire and extended coverage insurance; and the
parties each, on behalf of their respective insurance companies insuring the
property of either Landlord or Tenant against any such loss, waive any right of
subrogation that it may have against Landlord or Tenant or other tenants, as the
case may be. The foregoing waivers of subrogation shall be operative only to the
extent of the policy limits provided for above or the actual policy limits,
whichever are greater and so long as available in the state in which the
Property is located. If necessary, Landlord and Tenant agree to cause
appropriate riders to be attached to their insurance policies to effectuate such
waivers.
19. INDEMNITY AND RISK OF LOSS.
19.1 Tenant will save and hold Landlord harmless from all loss, damage,
liability or expense resulting from any injury to any person or property
including the Premises or Property, caused by or resulting from any act or
omission of Tenant, its employees, customers or suppliers except to the extent
that the loss is covered by insurance maintained by Landlord or Tenant and
subrogation is waived under this Lease. Tenant's obligation to indemnify
Landlord under this paragraph includes an obligation to indemnify for losses
resulting from death or injury to Tenant's employees, and Tenant accordingly
hereby waives any and all immunities it now has or hereafter may have under any
Industrial Insurance Act, or other worker's compensation, disability benefit or
other similar act which would otherwise be applicable in the case of such a
claim. The parties acknowledge that the foregoing provisions of this paragraph
have been specifically and mutually negotiated between the parties.
19.2 Landlord shall not be liable for damage to property or to any
person occurring in the Premises, Common Area or the Property arising out of any
act or omission of any tenant, its employees, customers or suppliers.
19.3 All property (whether owned by Tenant, its employees or others) in
the Premises shall be at Tenant's sole risk. Landlord shall not be liable for
any damage to or loss of such property.
20. SECTION 20 INTENTIONALLY DELETED.
21. REMEDIES FOR DEFAULT.
21.1 If Tenant fails to pay any sum for more than three (3) business
days after notice that payment of such sum is due or in the event of Tenant's
default in performing any of the other terms of this Lease for more than ten
(10) days after notice of such non-monetary default (or within such additional
time as is reasonably required to correct any default other than payment of
money by Tenant), or if Tenant assigns or otherwise transfers this Lease or
subleases the Premises without Landlord's prior written consent, Landlord, in
addition to the other rights or remedies it may have, shall have the right to
immediately terminate this Lease or re-enter and attempt to relet without
terminating this Lease and remove all persons and property from the Premises
(which property may be removed and stored in a public warehouse or elsewhere at
the cost and risk of, and for the account of Tenant) all without service of
notice or resort to legal process and without being deemed guilty of trespass,
or any liability of Landlord for any loss or damage which may be occasioned
thereby.
21.2 It shall be a material breach of this Lease if Tenant or any
guarantor of Tenant shall become bankrupt or insolvent, or commence any
proceedings under any bankruptcy or insolvency laws, or if Tenant or any
guarantor of Tenant shall take or have taken against it in federal or state
court a petition in bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of Tenant's or such
guarantor's property, if Tenant or any guarantor makes an assignment for the
benefit of creditors, of if any assets of Tenant (whether located in the
Premises or elsewhere) are seized or attached by any creditor of Tenant or a
governmental agency.
21.3 If Landlord, without terminating this Lease, either (1) elects to
re-enter the Premises and attempt to relet or (2) takes possession of the
Premises pursuant to legal proceedings, or (3) takes possession of the Premises
pursuant to any notice provided by law, then Landlord may, from time to time,
make such alterations and repairs as may be necessary in order to relet the
Premises or any part thereof for such term or terms (which may be for a term
extending beyond the term of this Lease) and at such rent and other terms as
Landlord in its reasonable discretion deems advisable. Upon such reletting, all
PAGE - 10
rents received by Landlord from such reletting shall be applied, first, to the
payment of any indebtedness of Tenant (other than any rents due hereunder) to
Landlord; second, to the payment of any costs and expenses of obtaining
possession and any such reletting, including expense of alterations and repairs,
brokerage fees and attorney's fees; third, to the payment of any rents due and
unpaid hereunder. If such rents and any other amounts received from such
reletting during any month be less than that to be paid during that month by
Tenant, Tenant shall immediately pay such deficiency to Landlord. No such
re-entry or taking possession of the Premises by Landlord shall be construed as
an election by Landlord to terminate this Lease unless a notice of such
intention be given to Tenant. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for such previous breach. Should Landlord at any time terminate this Lease for
any breach, in addition to any other remedies it may have, Landlord may recover
from Tenant all damages it may incur by reason of such breach, including the
cost of recovering the Premises, reimbursement of any brokerage fees incurred by
Landlord in connection with Tenant's lease, and all rent as follows which, at
Landlord's election, shall be accelerated and be due in full on demand:
21.3.1 The unpaid rent and additional rent payable hereunder
which had been earned at the date of such termination
plus interest at the rate of 18% per annum from the
date due until paid in full; plus
21.3.2 The present worth of the amount by which the unpaid
rent and additional rent which would have been earned
after termination for the balance of the term exceeds
the amount of such rental loss which Tenant proves
could reasonably have been avoided.
21.3.3 As used in subparagraph 21.3.2 above, the "present
worth" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San
Francisco as of the date of termination plus one
percent. The present worth amount due under
subparagraph 21.3.2 shall bear interest at the rate
of 18% per annum from the date of termination until
paid in full.
21.4 Landlord's rights and remedies in this Lease are cumulative and no
one of such rights and remedies shall be exclusive at law or in equity of the
rights and remedies which Landlord might otherwise have by virtue of a default
under this Lease, and the exercise of one such right or remedy by Landlord shall
not impair Landlord's standing to exercise any other right or remedy. Landlord
and Tenant shall, and do hereby, waive trial by jury in any action, suit or
proceeding related to, arising out of or in connection with the terms,
conditions and covenants of this Lease.
21.5 In the event that Tenant and Landlord are parties to any other
agreement in addition to this lease, any breach of such other agreement shall
also be deemed, at the sole election of Landlord, to be a breach of this Lease
and vice versa.
22. DAMAGE BY CASUALTY. In the event of damage to the Property or the Premises
by casualty which renders the Property, in whole or in part, or the Premises
untenantable, Landlord shall within ninety (90) days after said casualty notify
the Tenant whether or not Landlord elects to reconstruct ("Reconstruction
Notice"). If in Landlord's good faith estimation, the Premises cannot be
restored within one hundred eighty (180) days after Landlord receives notice of
damage, Landlord shall so notify Tenant in Landlord's Reconstruction Notice.
Tenant may terminate this Lease by delivery of notice to Landlord within thirty
(30) days after delivery of Landlord's Reconstruction Notice notifying Tenant
that the Premises cannot be restored within one hundred eighty (180) days. If
Landlord elects not to reconstruct or if Tenant elects under the preceding
sentence to terminate this Lease, this Lease shall be terminated as of the date
of such damage and rents will be prorated as of that date. If the Lease is not
so terminated, there shall be an abatement of rent and additional rent for the
entire period of time between the date of such destruction and the date on which
the Premises shall be placed in tenantable condition. If the Property is
partially destroyed by casualty and the damage does not amount to the above
extent, Landlord shall repair the Property with all convenient speed and shall
have the right to take possession of and occupy, to the exclusion of Tenant, all
or any portion of the Property necessary to complete repairs, in which event
there shall be an abatement of rent and additional rent as the nature of the
damage and its interference with the occupancy of the Premises by Tenant shall
warrant. If the Premises are only slightly damaged so as not to cause any
material interference with Tenant's occupancy, there shall be no abatement of
rent and Landlord shall repair the damage as soon as possible. In the event of
any casualty (with or without election to rebuild), Landlord shall have no
obligation to replace, rebuild or repair any property of Tenant including
alterations by Tenant, but such Tenant property or alterations shall be
replaced, rebuilt or repaired by Tenant as soon as possible.
23. CONDEMNATION. If the entire Premises, or a portion of the Property required
for reasonable use of the Premises, shall be taken by virtue of any condemnation
or eminent domain proceeding, this Lease shall automatically terminate as of the
date of such condemnation, or as of the date possession is taken by the
condemning authority, whichever is earlier. Rent shall be apportioned as of the
date of such termination. In case of a taking of a part of the Premises or a
portion of the Property not required for the reasonable use of the Premises,
then this Lease shall continue in full force and effect and the rental shall be
equitably reduced based on the proportion by which the floor area of Premises is
reduced, effective as of the date of such partial taking. No award for any
partial or entire taking or any taking of Common Area shall be apportioned, and
Tenant hereby assigns to Landlord any award which may be made in such taking or
condemnation together with any and all rights of Tenant now or hereafter arising
in or to the same or any part thereof; provided, however, that nothing herein
shall be deemed to give Landlord any
PAGE - 11
interest in or to require Tenant to assign to Landlord any award made to Tenant
for interruption of Tenant's business or Tenant's moving expenses.
24. PRIORITY AND ATTORNMENT.
24.1 So long as the mortgagee or lienholder shall agree to recognize
this Lease in the event of foreclosure if the Tenant is not in default, this
Lease shall be subordinate to any mortgages now a lien or hereafter placed upon
the Property and to all advances made thereunder, all interest thereon and to
all sums secured thereby, and all renewals, replacements, consolidations and
extensions thereof together with such other restrictions or covenants as may be
placed of public record during the term of this Lease. Any mortgagee may elect
to have this Lease prior in right to its mortgage, and in the event of such
election, and upon notification by such mortgagee to Tenant to that effect, this
Lease shall be deemed to have priority over the lien of such mortgage, whether
this Lease is dated prior or subsequent to such mortgage. Tenant shall execute
and deliver whatever instruments may be required from time to time by any
mortgagee for any of the foregoing purposes, and in the event Tenant fails so to
do within ten (10) days after demand, Tenant hereby makes and irrevocably
appoints Landlord as its attorney-in-fact and in its name, place and stead so to
do.
24.2 Tenant waives any right of election to terminate this Lease in the
event any foreclosure proceeding is brought by any mortgagee. Tenant agrees, in
the event of any foreclosure proceedings, to attorn to the purchaser, at such
purchaser's request, at such foreclosure sale and to recognize such purchaser as
Landlord under this Lease.
24.3 Tenant covenants and agrees that, in the event of one or more
sales or assignments of Landlord's interest in the Property, Tenant will attorn
to the transferee(s) of Landlord's interest in the Property and will recognize
such transferee(s) as Tenant's Landlord under this Lease. Tenant agrees, on ten
(10) days' prior notice by Landlord, to execute and deliver, from time to time,
any instrument which may be appropriate to evidence Tenant's attornment and
Tenant irrevocably appoints Landlord its attorney-in-fact to execute,
acknowledge, and deliver for and on behalf of Tenant any such instrument.
24.4 "Mortgage" and "mortgagee" herein shall include a mortgage, deed
of trust or security agreement and the mortgagee, the beneficiary of a deed of
trust or secured party. Tenant shall within ten (10) days of request by Landlord
deliver an executed and acknowledged instrument amending this Lease in such
respects as may be required by any present or future mortgagee, provided that
such amendment does not materially alter or impair Tenant's rights or remedies
under this Lease or increase its rent.
24.5 In the event of any default by Landlord, Tenant will give notice
by registered or certified mail to any mortgagee holding a mortgage covering the
Premises or any leasehold interest therein whose address shall have been
furnished to Tenant, and shall offer such mortgagee a reasonable opportunity to
cure the default, including time to obtain possession of the Premises by power
of sale or a judicial foreclosure, if such should prove necessary to effect a
cure.
24.6 Promptly upon execution of this Lease by Landlord and Tenant,
Landlord shall request ____________________, its lender holding a security
interest in the Property, to execute an agreement to not disturb Tenant's
possession of the Premises under this Lease so long as Tenant performs its
obligations under this Lease (commonly known as, and referred to herein as, a
"subordination, non-disturbance and attornment agreement" and/or as an "SNDAA").
If the executed SNDAA has not been delivered to Tenant within fifteen (15) days
after execution of this Lease by Landlord and Tenant, then Tenant may terminate
this Lease by written notice delivered to Landlord no later than thirty (30)
days after execution of this Lease by Landlord and Tenant. Upon such
termination, all prepaid rents and/or deposits shall be refunded in full to
Tenant without interest. If Tenant does not timely terminate this Lease, Tenant
shall be deemed to have forever waived any requirement of delivery of the SNDAA.
25. RULES, REGULATIONS AND MISCELLANEOUS.
25.1 REGULATIONS. Landlord may from time to time make regulations
appropriate for the use and operation of the Property and Common Area so long as
not inconsistent with the terms, covenants and conditions of this Lease and so
long as such regulations do not unreasonably, adversely affect Tenant's
business. Landlord may condition its approval of Tenant's use of Common Area for
special events upon increased insurance coverage for the duration of such
special events.
25.2 SIGNAGE. Landlord shall install a sign on each floor of the
Premises, in the main lobby of the Building, and if one exists the building
monument near the entrance to the Building. Each sign shall be in Landlord's
standard building form, which form may be changed from time to time by Landlord
in its sole discretion, and shall identify Tenant's name and suite number.
Tenant shall not place any additional signs on the Property including on any
entrance to Tenant's suite without prior written consent of Landlord. Landlord
shall not unreasonably withhold its consent to Tenant signage on the exterior of
the Building (exclusive of the south side) which, if such consent is granted,
shall be installed at Tenant's sole expense and in compliance with all
applicable sign ordinances. Withholding of Landlord's consent to Tenant signage
on the exterior of the Building for the purpose of reserving reasonable signage
area for the ground floor tenants of the Building shall be deemed to be
reasonable. Landlord may also withhold consent to Tenant signage on the south
side of the Building in Landlord's sole discretion. Any sign erected or
maintained in violation hereof may be removed by Landlord at Tenant's expense.
Landlord may at any time during the last one hundred eighty (180) days of the
term of the Lease place on or about the Premises "for rent" signs. Landlord may
at any time place on or about the Premises "for sale" signs. Tenant shall not
obliterate or hide Landlord's "for rent" or "for sale" signs.
PAGE - 12
25.3 LANDLORD ACCESS AND ALTERATIONS. Landlord reserves the right to
make alterations to the Property and Common Area and to enter the Premises for
such purpose or to accomplish any repairs for which Landlord is responsible or
Landlord deems to be necessary to avoid damage to the Property or Premises. Such
entry and/or actions shall not constitute an assumption of responsibility for
such repairs by Landlord or an eviction and, except as may be specifically
provided in this Lease, shall not cause any abatement of rent. Landlord may also
enter the Premises for purposes of inspection and to show the Premises to
prospective purchasers, mortgagees and tenants. Landlord will exercise its
rights under the preceding sentence in a manner that will not cause unreasonable
interference with Tenant's business. Landlord shall at all times have and retain
a key with which to unlock all the doors in, upon and about the Premises,
excluding Tenant's vaults and safes. Tenant shall not alter any lock or install
a new or additional lock or bolt on any door of the Premises without prior
written consent of Landlord. If Landlord shall give its consent, Tenant shall in
each case furnish Landlord with a key for any such lock.
25.4 DELIVERIES. Deliveries shall be received and trash removed only at
such hours and in such manner as shall least inconvenience other tenants.
Landlord retains the right to designate both point of entry to the Property for
use by such trucks, unloading and loading areas and the hours during which
deliveries may be received or trash removed.
25.5 NAME AND USE OF NAME. The name of the Property may be changed by
Landlord during the term of this Lease unless the Building has been named after
The Cobalt Group pursuant to Section 30 of this Lease.
25.6 SECTION 25.6 INTENTIONALLY DELETED.
25.7 COMMON AREA. From time to time during the term of this Lease
Landlord shall designate as Common Area such portions of the Property which are
licensed for use in common by the tenants of the Property. No area which is
subject to lease or exclusive rights of occupancy by any person shall be
considered to be Common Area. Landlord shall be entitled, from time to time, to
lease portions of the Common Area to others, to change the location, size,
entrances to or the configuration of the Common Area or any improvement on the
Property or to otherwise increase or decrease the area designated as Common Area
so long as Landlord does not violate the applicable zoning code. Landlord shall
be entitled to allow the use of the Common Area by such other persons and on
such terms and for such uses as Landlord deems appropriate.
25.8 FUTURE PARKING AGREEMENTS. Tenant agrees that Landlord shall have
the right, but not the obligation, to agree with owners of other properties to
impose joint parking rights on the Property and such other properties; any such
action by Landlord shall have no effect on this Lease except that Tenant shall
be subject to the terms of such agreement.
25.9 PARKING. Tenant acknowledges that the Property is subject to a
Transportation Management Plan and that all parking on the Property is subject
to the terms of the Transportation Management Plan. Any rights of Tenant to
parking on or about the Property shall be solely by separate agreement entered
into by Landlord and Tenant and shall not arise under this Lease. Landlord shall
have the sole right to regulate and allow usage of and to lease parking areas
located on the Property including parking by tenants of the Property or adjacent
properties and any parking which is a condition of complying with a governmental
regulation or is a condition of a building or occupancy permit.
25.10 MEMORANDUM OF LEASE. This Lease shall not be recorded. Upon
request of either party, the parties hereto will execute a memorandum of lease
which may be recorded by either party to provide record notice of the existence
of this Lease but shall not disclose any of the economic terms.
25.11 CERTIFICATES. At Landlord's request from time to time after the
beginning of the Lease term, Tenant agrees within fifteen (15) days of demand to
execute, acknowledge and deliver to Landlord a certificate which acknowledges
tenancy and possession of the Premises and recites such other facts concerning
any provision of this Lease or payment made under this Lease which a prospective
mortgagee or purchaser may reasonably request. Tenant's failure to deliver such
statement within such time shall be conclusive upon Tenant that this Lease is in
full force and effect, without modification except as may be represented by
Landlord, that there are no uncured defaults in Landlord's performance, and that
not more than one month's rent has been paid in advance or, at Landlord's
option, such failure shall constitute a default by Tenant under this Lease. At
Landlord's request from time to time, Tenant further agrees to provide to
Landlord Tenant's most recent profit and loss statement and balance sheet.
25.12 NOTICES. Any notice provided for in this Lease shall be
considered received on the third (3rd) day following deposit of the notice into
the mails or the date actually received, whichever is earlier. Any notices may
be given to the other party at the address set forth in Section 1.17. Either
party may change its address by giving notice of such change.
25.13 REMEDY. Tenant agrees, at all times, to look only to Landlord's
interest in the Property (and the proceeds of the rental, sale, insured losses
or condemnation of the Property) for satisfaction of any claim whatsoever
against Landlord and not to any other property or assets of Landlord.
25.14 TENANT AUTHORITY. 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. If Tenant is an entity other than a
natural person, Tenant shall, within ten (10) days after execution of this
Lease, deliver to Landlord a certified copy of a resolution of Tenant's
governing board or other governing persons, committee or organization,
authorizing or ratifying the execution of this Lease.
PAGE - 13
25.15 LEASES ARE INDEPENDENT. Tenant shall not be deemed to be a third
party beneficiary of any other lease of the Property; Landlord retains the sole
right to determine, in its discretion, whether to enforce and the method of
enforcement of compliance by other tenants and their employees with the terms of
their respective leases including any restrictions on use and parking; the
existence of any violation of any lease provision by any other tenant shall not
be deemed to be a violation of this Lease by Landlord.
25.16 ENTIRE AGREEMENT. This Lease and any attachments or exhibits
attached hereto, if any, set forth all of the agreements and understandings
between Tenant and Landlord as to the subject matter of this Lease and all prior
negotiations, discussions or agreements are replaced by this Lease. No
subsequent alteration, amendment, change or addition to this lease shall be
binding upon Tenant or Landlord unless in writing and signed by both Tenant and
Landlord.
25.17 LANDLORD'S CONSENT. Any consent required by Landlord under this
Lease must be granted in writing and may be withheld by Landlord in its sole and
absolute discretion, except where otherwise expressly stated in this Lease, and
any delay in consenting will not be a breach of this Lease.
25.18 SECTION 25.18 INTENTIONALLY DELETED.
25.19 INTERPRETATION. This Lease shall be construed and interpreted in
accordance with the laws of the state in which the Premises are located. When
required by the context of this Lease, the singular shall include the plural,
and the masculine shall include the feminine and/or neuter. The headings and
titles to the paragraphs of this Lease are not a part of this Lease and shall
have no effect upon the construction or interpretation of any part hereof.
"Party" shall mean Landlord or Tenant. If more than one person or entity
constitutes Landlord or Tenant, the obligations imposed upon that party shall be
joint and several. The enforceability, invalidity or illegality of any provision
shall not render the other provisions unenforceable, invalid or illegal. All
provisions, whether conditions or covenants on the part of Tenant, shall be
deemed to be both conditions and covenants. Subject to the restrictions on
assignment or subletting, the rights, liabilities and remedies provided for
herein shall extend to the heirs, legal representatives, successors and, as far
as the terms of this Lease permit, assigns of the parties hereto.
25.20 WAIVER. No delay or omission in the exercise of any right or
remedy or acceptance of any payment or portion thereof due hereunder by Landlord
shall impair such right or remedy or be construed as a waiver. No act or conduct
of Landlord, including, without limitation, acceptance of the keys to the
Premises, shall constitute an acceptance of the surrender of the Premises by
Tenant before the expiration of the term. Only written notice from Landlord to
Tenant of such acceptance shall constitute acceptance of the surrender of the
Premises and accomplish termination of this Lease. Landlord's consent to any act
by Tenant shall not be deemed to waive or render unnecessary Landlord's consent
to any subsequent act by Tenant. Any waiver by Landlord of any default must be
in writing and shall not be a waiver of any other default concerning the same or
any other provision of this Lease.
25.21 SECTION 25.21 INTENTIONALLY DELETED.
25.22 SECTION 25.22 INTENTIONALLY DELETED.
25.23 ATTORNEYS' FEES. In the event of any default under this Lease,
the defaulting party agrees to pay the cost of legal counsel incurred by the
other party, whether incurred with or without commencement of litigation and on
appeal or in the course of collection.
25.24 HOLDING OVER. If Tenant shall hold over after the expiration of
the term of this Lease, and shall not have agreed in writing with Landlord upon
the terms and provisions of a new lease prior to such expiration, Tenant shall
remain bound by all the terms, covenants and agreements hereof, except that the
tenancy shall be from month to month and the Basic Rent shall be equal to one
hundred fifty percent (150%) of the Basic Rent due for the last month of the
term of the Lease.
25.25 SUBMISSION OF LEASE. Submission of this Lease for examination,
even though executed by Tenant, shall not bind Landlord in any manner, and no
Lease or other obligation on the part of the Landlord shall arise, until this
Lease is executed and delivered by Landlord to Tenant.
26. SURRENDER OF PREMISES. Tenant shall surrender and deliver to Landlord
possession of the Premises upon the expiration or earlier termination of this
Lease, broom clean, free of debris, and in substantially the same condition as
the date Tenant opened for business at the Premises (except as may be Landlord's
obligation under this Lease, damage by casualty or condemnation, and ordinary
wear and tear), and shall deliver the keys to Landlord.
27. FUTURE SUBDIVISION OF PROPERTY. In the event Landlord elects to subdivide
the Property or to declare all or parts of the Property to be condominiums,
Tenant agrees to cooperate with Landlord in such process and to disclaim any
interest in the Property, except for Tenant's Premises so long as the area of
Tenant's Premises is not reduced and the parking available to Tenant, if any, is
not materially, adversely affected.
28. BROKERS. Each party represents that it has not had dealings with any real
estate broker, finder or other person with respect to this Lease in any manner,
except for the broker(s) identified in Section 1.16, who shall be compensated by
the party identified in Section 1.16. To the extent Landlord does not pay when
due a commission payable by Landlord under Section 1.16, Tenant shall have the
right, but not the obligation, to pay such commission and deduct the amount of
same from the rents next due and
PAGE - 14
owing under this Lease, together with interest at the rate of twelve percent
(12%) per annum (computed from the date such commission was paid by Tenant until
the date of the offset). Tenant shall deliver written notice to Landlord of
Tenant's intention to pay any commission at least ten (10) days before the date
of payment.
29. RIGHT OF FIRST REFUSAL. On condition that Tenant is not then in default
beyond expiration of any applicable cure period, Tenant shall have the Right of
First Refusal to lease space ("Expansion Space") in the remainder of the
Building (exclusive of the roof and basement). Tenant's Right of First Refusal
shall not be effective with respect to the lease of space on the ground floor of
the Building until after the first Lease Year. Expansion Space leased by Tenant
pursuant to exercise of the Right of First Refusal shall become part of the
Premises under all the terms and conditions of this Lease, including, without
limitation, Tenant's payment of Tenant's Pro Rata Share of Excess Operational
Expenses, and the then current Lease term and options to extend the term, except
that the Basic Rent for the Expansion Space shall be established as provided in
this Section of this Lease and except that any tenant improvement allowance or
other concessions with respect to the Expansion Space shall be established as
provided in this section of this Lease.
29.1 If and when Landlord procures an executed letter of intent to
lease all or part of the Expansion Space to another tenant, Landlord shall
notify Tenant in writing and provide Tenant a copy of such letter of intent
("Preliminary Notice"). Tenant shall have ten (10) days within which to notify
Landlord in writing ("Tenant's Notice") of its agreement to lease the Expansion
Space described in the Preliminary Notice on the terms described in the
Preliminary Notice as adjusted to take into account the terms and conditions of
this Lease, including, without limitation, Tenant's payment of Tenant's Pro Rata
Share of Excess Operational Expenses, and the then current Lease term. For
example, if the letter of intent in the Preliminary Notice provides for a lease
term of ten (10) years and a tenant improvement allowance of $20 per useable
square foot and there are only two (2) years remaining on the term of this
Lease, then the tenant improvement allowance of $20 per useable square foot
would be pro-rated to $4 per useable square foot (2/10th of $20). If Landlord
would be required to pay a leasing commission in connection with lease of the
Expansion Space to another tenant but would be required to pay no leasing
commission or a smaller leasing commission if Tenant exercises its Right of
First Refusal with respect to the Expansion Space, then Tenant shall receive no
payment, rent credit or other concession in lieu of payment of the leasing
commission. Tenant shall begin paying rent with respect to the Expansion Space
(regardless of the terms of the Preliminary Notice) on the earlier of (i) sixty
(60) days after the date of delivery of Landlord's Preliminary Notice to Tenant
(or thirty (30) days after delivery of possession of the Expansion Space to
Tenant, if later), or (ii) the date Tenant commences business in the Expansion
Space. If Tenant does not timely deliver Tenant's Notice to Landlord, then
Tenant shall be deemed to have waived its Right of First Refusal with respect to
the Expansion Space identified in the Preliminary Notice and Landlord shall be
free to lease such Expansion Space on such terms as are no more favorable to the
tenant than those described in the Preliminary Notice.
29.2 If, after bargaining in good faith, the parties cannot agree on
and execute an amendment to this Lease to add the Expansion Space to the
Premises on the terms set forth in the Preliminary Notice, as adjusted to take
into account the terms and conditions of this Lease ("Expansion Space Lease
Amendment"), within thirty (30) days after delivery to Tenant of the Preliminary
Notice, then the terms of the Expansion Space Lease Amendment shall be
established by binding arbitration with a single arbitrator in accordance with
Washington law. If the parties do not agree as to the identity of the
arbitrator, the then Presiding Judge of the Superior Court for the county in
which the Premises are located, upon an appropriate request which either party
may make, shall appoint the arbitrator. Within ten (10) days of the appointment
of the arbitrator, each party shall submit in writing to the arbitrator its
proposed Expansion Space Lease Amendment and any supporting documentation
("Submissions"). The arbitrator shall not disclose any Submission to the other
party until the arbitrator has received both parties' Submissions. The
arbitrator shall study such evidence and information as the arbitrator deems
appropriate to determine the terms of the Expansion Space Lease Amendment;
provided that the Arbitrator's determination of the terms of the Expansion Space
Lease Amendment shall be confined and strictly limited to selection, as the more
reasonable interpretation of the terms of this Lease, of the proposed Expansion
Space Lease Amendment set forth in the Submission of Tenant or the Submission of
Landlord, and the arbitrator may not draft a third Expansion Space Lease
Amendment. Except as to the Parties' Submissions, any other communication by a
party to the arbitrator shall be in writing with a copy to the other party. Upon
completion of the arbitrator's investigation of the terms of the Expansion Space
Lease Amendment, the arbitrator shall report in writing to each of the parties
which party's Submission has been selected by the arbitrator as the more
reasonable interpretation of this Lease without requirement of further
substantiation or information. Upon receipt of such report from the arbitrator,
the arbitrator's assignment shall be complete, and each of the parties to this
Lease agrees to accept such determination by the arbitrator as binding and
conclusive without any right of appeal. Tenant and Landlord each shall pay its
own costs of arbitration and one-half of the fee due to the arbitrator for the
arbitration services.
30. BUILDING NAME. Landlord will rename the Building after The Cobalt Group at
Tenant's option on condition that all of the following conditions are satisfied:
30.1 Tenant delivers written notice to Landlord of Tenant's desired
Building name on or before October 1, 1999;
30.2 The Building name proposed by Tenant is approved by Landlord which
approval Landlord will not unreasonably withhold; and
PAGE - 15
30.3 The Building name does not violate any applicable laws, rules,
ordinances or regulations with respect to building names or addresses including
but not limited to any rules of the U.S. Post Office.
In the event the Building is named after The Cobalt Group, Landlord may continue
use of the Building name after termination of this Lease, in Landlord's sole
discretion, unless Tenant requests Landlord to remove Tenant's name from the
Building name. If Tenant requests Landlord to remove Tenant's name from the
Building name, Landlord shall do so within a reasonable period of time on
condition that Tenant pays all of the expenses related to the name change
including changes in signage, stationery, and so forth.
31. ROOFTOP DECK. Tenant shall have the exclusive right to install a deck on the
roof of the Building for the use of Tenant's employees as a "break" area. The
deck shall not exceed six thousand (6,000) square feet in area and shall be
located on the roof in an area approved by Landlord which approval Landlord
shall not unreasonably withhold. Installation and maintenance of the deck shall
be at Tenant's sole expense, and shall be subject to all of the requirements
with respect to alterations set forth in Section 11 of this Lease. Tenant shall
be strictly liable for the repair of and payment for any damages caused by or
resulting from roof damage caused by installation or use of the deck.
Construction and use of the deck shall comply with all applicable safety
regulations, building codes, and any requirements or restrictions imposed by any
insurer issuing liability or property insurance in connection with the Building.
Tenant understands that access to the roof of the Building is limited. Landlord
shall have no obligation to improve such access. In the event such access is
required to be improved due to the application of the Americans with
Disabilities Act or pursuant to any other law, Tenant shall at its sole expense
effect such access improvements unless the improvements are required solely as a
result of use of the rooftop by Landlord or another tenant of Landlord. If the
access improvements are required due to a combination of the use by Tenant and
other tenants or Landlord, then the cost to effect such access improvements will
be equitably divided between the relevant parties in a manner determined by
Landlord. If the access improvements would not be required if Tenant ceased use
of the rooftop deck, then Tenant shall be relieved of any obligation to make
such access improvements if Tenant agrees to cease use of the rooftop deck and
complies with such requirements as may be imposed by the relevant governing
agency as a condition of rescinding the requirement of access improvements. For
all purposes under this Lease, the rooftop deck shall be deemed part of the
Premises, provided, however, Tenant shall not be required to pay any additional
Basic Rent or any greater Pro Rata Share of Excess Operational Expenses as a
result of such rooftop deck.
32. OTHER ROOF USE. Tenant may install on the roof of the Building a generator
and telecommunications equipment subject to Landlord's approval, other's
equipment and related agreements. Tenant acknowledges that it has been advised
that Landlord has entered into or will enter into cell site leases for the lease
of space on the roof of the Building to communications providers regulated by
the Federal Communications Commission including but not necessarily limited to
AirTouch Communications, Inc., Nextel West Corp., and Western PCS BTA
Development Corporation ("Communications Providers"). Tenant agrees that it will
not install or operate on the roof of the Building any telecommunications
equipment which constitutes a transmission facility of the type operated by
Communications Providers without first obtaining the written consent of those
Communications Providers operating equipment on the roof of the Building.
Landlord acknowledges that use of roof space by Communications Providers may not
reduce the area available to Tenant for Tenant's rooftop deck. Landlord shall
include in any cell site lease with a Communications Provider the obligation of
the Communications Provider to comply with all Federal Communications Commission
requirements and to operate its facilities in a manner that will not cause
interference to tenants of the Building. For all purposes under this Lease, the
rooftop area used by Tenant under this paragraph shall be deemed part of the
Premises, provided, however, Tenant shall not be required to pay any additional
Basic Rent or any greater Pro Rata Share of Excess Operational Expenses as a
result of such rooftop use.
33. TENANT IMPROVEMENTS.
33.1 Tenant will contract, with a general contractor who meets with
Landlord's reasonable approval to make certain tenant improvements to the
Premises at Tenant's sole expense ("Tenant Improvements"). Tenant shall have
final working drawings and specifications prepared which show all improvements
to be constructed in the Premises ("Final Plans") and the Final Plans shall be
submitted to Landlord for approval which approval shall not be unreasonably
withheld. The Final Plans may be submitted in one or more parts and at one or
more times, provided, however, that all of the Final Plans shall be submitted no
later than September 30, 1999. The Final Plans shall be a reasonable
extrapolation of the preliminary plans previously reviewed and approved by
Landlord (and addressing any concerns expressed by Landlord with respect to the
preliminary plans), with the scope and magnitude of the Tenant Improvements not
being materially reduced. If Landlord fails to deliver to Tenant approval or
disapproval, in writing, within five (5) business days after delivery of the
Final Plans to Landlord, then Landlord shall be deemed to have approved the
Final Plans. Landlord may condition Landlord's approval of the Final Plans on
Tenant's agreement to remove and restore, upon the termination of this Lease,
any floor penetrations such as stairwells or slides between floors of the
Premises. Any disapproval must specifically point out what was disapproved and
why. The Final Plans to the extent approved by Landlord shall be itemized on
Exhibit D attached to this Lease. After Landlord's approval of the Final Plans,
no material changes shall be made without the approval of Landlord and the
Tenant Improvements shall be constructed in material accordance with the Final
Plans. If Tenant requests a change to the Final Plans, Landlord shall not
unreasonably withhold its consent, and Landlord shall approve or disapprove any
change order within two (2) business days of receipt. Any change in Tenant's
contractor shall be subject to Landlord's reasonable approval. Tenant shall
assume responsibility for assuring that the Final Plans
PAGE - 16
are satisfactory for the operation of its business, all permits for
construction of the Tenant Improvements are obtained, and that the Tenant
Improvements are made in accordance with all building code and other
governmental requirements. Tenant shall retain an architect who meets with
Landlord's reasonable approval to prepare and monitor construction of the
Tenant Improvements, to assure compliance with the Final Plans approved by
Landlord, and to issue a certificate of completion to Landlord attesting to
the fact that the Tenant Improvements have been substantially completed in
accordance with the approved Final Plans (as amended by any change orders)
and the date of such substantial completion.
33.2 As a condition of Landlord's approval of its contractor, Tenant
shall cause its contractor to acknowledge that (i) its contract is solely with
Tenant, (ii) Tenant is neither the statutory nor actual agent of Landlord and
(iii) that Landlord is not responsible for any payment due from Tenant to such
contractor and (iv) such contractor will not allow any laborer, supplier,
equipment renter or subcontractor to assert a lien against the Premises. Tenant
shall further require its contractor to provide such warranties and insurance
for Landlord's benefit as Landlord reasonably requires. As between Landlord and
Tenant's contractor, the contractor shall specifically assume potential
liability for actions brought by the contractor's own employees against Landlord
and for that purpose shall specifically waive any immunity against claims by
Landlord under the Workers Compensation Act, RCW Title 51; and the contractor
shall acknowledge that such waiver was specifically entered into pursuant to the
provisions of RCW 4.24.115 and was the subject of mutual negotiation.
33.3 Landlord's rights of consent or approval are for the benefit and
protection of Landlord only. No consent or approval given by Landlord shall be
construed as any assurance to Tenant or anyone else as to the suitability or
sufficiency of any such matter receiving Landlord's consent or approval.
33.4 In addition to all of its other obligations of indemnity under
this Lease, Tenant shall indemnify, defend and hold Landlord harmless from any
and all damages, claims, liabilities, attorneys' fees and expenses (including
attorneys' fees and expenses incurred in enforcing this indemnity) relating to
any claim of or loss of life, personal injury or damage to real and personal
property arising from or related to the Tenant Improvements or acts or omissions
of Tenant, its contractors, subcontractors or agents or any failure of Tenant to
strictly comply with all laws or governmental requirements. Tenant's obligation
to indemnify Landlord arising from bodily injury or damage to property caused by
or resulting from the concurrent negligence of Landlord, its agents or
employees, and the Tenant, its agents or employees, shall be valid and
enforceable only to the extent of the negligence of the Tenant, its agents and
employees. Furthermore, in the situations described in this section, Tenant
shall not be obligated to indemnify Landlord for the sole negligence of
Landlord, its agents or employees.
33.5 Landlord shall receive no fee for supervision, profit, overhead or
general conditions in connection with the Tenant Improvements, unless Landlord's
services are required in connection with the Tenant Improvements.
33.6 Neither Tenant nor its contractor shall be charged for, and
Landlord shall provide for Tenant's architects, designers, contractors and
subcontractors (including those people working on the Tenant Improvements),
electricity, water, and elevators, during the construction of the Tenant
Improvements and during the move into the Premises.
34. TENANT IMPROVEMENT ALLOWANCE.
34.1 Landlord shall pay to Tenant in cash a tenant improvements
allowance in the amount of twenty-five and no/100 dollars ($25.00) per leasable
square foot in the Premises ("Tenant Improvement Allowance") (i.e., the product
of $25 multiplied by the GLA in the Premises as set forth in Section 1.5 subject
to the remeasurement terms of this Lease). The Tenant Improvement Allowance
shall be available thirty (30) days after the commencement of the Tenant
Improvements work at the Premises, and shall be paid to Tenant or to one or more
contractors, designers and/or subcontractors designated by Tenant within ten
(10) days after Tenant has confirmed in writing to Landlord that the portion of
the Tenant Improvements covered by the request by Tenant have been completed to
Tenant's satisfaction and accepted by Tenant and that all lien releases
applicable thereto have been obtained by Tenant. Landlord may also condition
advance of any of the Tenant Improvement Allowance on the following:
34.1.1 Receipt by Landlord of lien waivers from all persons
supplying labor or materials for the Tenant
Improvements and a certification from Tenant's
architect that the percentage of the total work and
materials constituting the Tenant Improvements which
has been completed in accordance with the approved
construction contract exceeds the percentage of the
total amount of the Tenant Improvement Allowance
which, together with the then current draw request,
has been disbursed to date;
34.1.2 Written documentation in the form of confirmation of
funds or otherwise providing reasonable assurance to
Landlord that Tenant has available sufficient funding
for the full performance of the Tenant Improvements;
and
34.1.3 There is no material default under the Lease by
Tenant beyond expiration of any applicable cure
period.
34.2 To the extent Landlord does not pay the Tenant Improvement
Allowance within thirty (30) days of the date due, Tenant may deduct the unpaid
amount from the rents next due and owing under
PAGE - 17
this Lease, together with interest at the rate of twelve percent (12%) per annum
(computed from the date such payment was due until the date of the offset).
34.3 In addition to payment of the Tenant Improvement Allowance,
Landlord shall reimburse Tenant upon execution of this Lease up to fifteen cents
($0.15) per leasable square foot in the Premises for costs of preliminary space
planning. Preparation of construction documents, engineering, city permits and
working drawing costs shall be paid out of the Tenant Improvement Allowance.
34.4 In addition to payment of the Tenant Improvement Allowance,
Landlord shall pay to Tenant at the time that the last installment of the Tenant
Improvement Allowance is due, the following amounts: (i) $2,900 in lieu of
Landlord's installation of the upper floor lobby carpeting and lighting (which
shall be installed by Tenant at Tenant's expense as part of the Tenant
Improvements), and (ii) $2,500 in lieu of Landlord's installation of a ramp or
handicap lift to provide handicapped access to a portion of the second floor of
the Building (Tenant shall install a handicap lift at Tenant's expense as part
of the Tenant Improvements).
LANDLORD: TENANT:
2200 First Avenue South LLC, The Cobalt Group, Inc.,
a Washington limited liability company a Washington corporation
By: By:
----------------------------------- ---------------------------------
David Zarett, Member
By:
---------------------------------
LANDLORD ACKNOWLEDGMENT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that David Zarett
is the person who appeared before me, and said person acknowledged that he
signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it as a member of 2200 First Avenue South LLC, to be
the free and voluntary act of such party for the uses and purposes stated
therein.
Dated ______________________________.
-------------------------------------
Name:
--------------------------------
NOTARY PUBLIC, State of Washington
My appointment expires
--------------
TENANT ACKNOWLEDGMENT
REPRESENTATIVE FORM OF ACKNOWLEDGMENT
STATE OF _________________ )
) ss.
COUNTY OF _______________ )
I certify that I know or have satisfactory evidence that
______________________ and ______________________ are the persons who appeared
before me, and said persons acknowledged that they signed this instrument, on
oath stated that they are authorized to execute the instrument and acknowledged
it as the President and Secretary, respectively, of The Cobalt Group, Inc., to
be the free and voluntary act of such party for the uses and purposes stated
therein.
Dated ______________________________.
-------------------------------------
Name:
--------------------------------
NOTARY PUBLIC, State of Washington
My appointment expires
--------------
PAGE - 18
EXHIBIT A
(FLOOR PLAN OF PREMISES)
EXHIBIT B
(LEGAL DESCRIPTION OF PROPERTY)
LOTS 1, 2, 3 AND 4 IN BLOCK 317 OF SEATTLE TIDE LANDS; SITUATE IN THE CITY OF
SEATTLE, COUNTY OF KING, STATE OF WASHINGTON.
EXHIBIT C
(LANDLORD'S WORK)
a. Finished common areas including all restrooms, elevators, elevator lobbies,
stairways and parking areas (finish to be consistent with similar class
office building);
b. HVAC stubbed to Tenant's space (HVAC to be distributed by Tenant);
c. Exterior windows installed and sealed;
d. Finished window systems including frames, sills, casing and Building
standard window coverings;
e. Landlord shall install electrical panels providing capability for Tenant to
operate standard office computer equipment, HVAC, and lighting in its
Premises;
f. Emergency lighting shall be installed and operational throughout all
Building common areas as required by code;
g. Life Safety: sprinkler heads installed and operational throughout the
Building;
h. Floor ready for Tenant's floor coverings;
i. Parking lot blacktopped and striped; underground garage shall be remote
controlled and secured by steel doors; lighting of exterior of Building and
parking lot.
j. Utility costs during Tenant's build-out;
k. A telecommunications conduit in central location for Tenant's use;
l. Landlord shall provide Tenant with 200 card keys. Additional cards shall be
at Tenant's cost.
m. The Building envelope shall comply with all applicable energy code
requirements.
n. Landlord's Work shall be executed in substantial compliance with the
following plans and specifications:
- Building Shell and Core Improvement Detail attached (note that the
upper floor lobby carpeting and lighting is to be installed by Tenant
at Tenant's expense as part of the Tenant Improvements as provided in
Section 34.4 of the Lease; run out ducts and diffusers also to be
installed by Tenant at Tenant's expense as part of the Tenant
Improvements as provided in the HVAC System section of the attached
Detail)
- Basement Plan dated June 6, 1998 by Broderick Architects attached
- Second Floor Plan by Burgess Design, Inc. attached
- Third Floor Plan by Burgess Design, Inc. attached
- Fourth Floor Plan by Burgess Design, Inc. attached
Tenant acknowledges that it is the sole responsibility of Tenant to assure the
adequacy of any improvements to the Premises and that Landlord is relying on
Tenant to determine Tenant's needs; the expense of any improvements beyond those
listed in this Exhibit shall be paid by Tenant.
EXHIBIT D
(TENANT'S WORK)
A. TENANT'S WORK.
All work not specifically described as Landlord's Work in EXHIBIT C
shall be the obligation of the Tenant and shall be performed in accordance with
approved plans and specifications at the sole cost of Tenant.
B. GENERAL.
1. Landlord, Tenant or utility company shall have the right, subject to
Landlord's approval, to run utility lines, pipes, roof drainage pipes, conduit,
wire or duct work, where necessary, through attic space, column space or other
parts of the Premises, and to maintain same in a manner which does not interfere
unnecessarily with Tenant's use thereof.
2. The Tenant shall prepare all its plans and perform all its work to
comply with all governing statutes, ordinances, regulations, codes and insurance
rating boards; take out all necessary permits and obtain certificates of
occupancy for the work performed by Tenant - all subject to Landlord's approval.
Tenant shall further pay all utility deposits and government impact fees.
3. The floor will be designed to support a uniformly distributed loan.
Should the Tenant desire a heavier loading, Tenant agrees to pay the cost of
engineering and the cost of providing such heavier loading capacity.
4. All work done on the Premises by Tenant must be performed by
licensed contractors approved by Landlord. Tenant's contractors shall be
required to waive all lien rights against Landlord's interest in the Property.
C. FINAL PLANS. The Finals Plans for the Tenant Improvements to be constructed
by Tenant are as follows:
[TO BE INSERTED AS PROVIDED IN LEASE]
EXHIBIT E
LANDLORD RULES
1. ENTRANCE AND EXITS
The sidewalks, entrances, elevators, stairways and halls shall not be
obstructed or used for any purpose other than ingress or egress. The
common areas of the Property are not for the use of the general public,
and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgment of
Landlord shall be prejudicial to the safety, character, reputation or
interests of the Property and its tenants, provided that nothing herein
contained shall be construed to prevent such access by persons with
whom Tenant normally deals in the ordinary course of its business,
unless such persons are engaged in illegal activities. Tenant shall not
enter the mechanical rooms, air handler rooms, electrical closets or
janitorial closets or go upon the roof of the Building without the
prior written consent of Landlord.
2. AWNINGS
No awning or other projections shall be attached to the outside walls
of the Building, and no window shades, blinds, drapes or other window
coverings shall be hung in the Premises, without the prior written
consent of Landlord. Except as otherwise specifically approved by
Landlord, all electrical ceiling fixtures hung in the Building must be
approved by Landlord.
3. RESTROOMS
The toilets, wash basins and other plumbing fixtures shall be used
solely for the purposes for which they were constructed, and no garbage
shall be thrown therein. All damage resulting from any misuse of such
fixtures shall be borne by the tenant who, or whose employees, agents,
or invitees shall have caused the same.
4. DEFACEMENT
No tenant shall in any way deface any part of the Premises or the
Property. No boring or cutting for wires, stringing of wires or laying
of linoleum or other similar floor coverings shall be permitted without
the prior written consent of Landlord and then only as Landlord may
direct.
5. PROHIBITED ACTIVITIES
No vehicles or animals of any kind shall be brought into or kept in or
about the Premises, and no cooking shall be done or permitted on the
Premises without the prior written consent of Landlord, except the
preparation of coffee, tea and other beverages for the tenant, its
employees and visitors. No tenant shall cause or permit any unusual or
objectionable odors to escape the Premises. The Premises shall not be
used for lodging or sleeping or for any immoral or illegal purposes. No
tenant shall make, or permit to be made, any unseemly or disturbing
noises, sounds or vibrations, or otherwise disturb or interfere with
occupants of the Property or those having business with them. No tenant
shall throw anything out of doors or in the corridors, stairways or
other common areas of the Property. Tenant shall not obtain access to,
or permit its agents, servants, employees or contractors to obtain
access to utility lock boxes, janitorial and building storage areas, or
other storage compartments not leased to Tenant, without Landlord's
prior written approval.
6. DELIVERIES AND PICK -UPS
All removals or deliveries of freight must take place during normal
business hours and in the locations designated by Landlord from time to
time. The moving of fixtures, furniture or other large objects must be
made upon previous notice to the manager of the Property and under its
supervision, and the persons employed by Tenant for such work must be
acceptable to Landlord. Landlord reserves the right to prohibit or
impose conditions upon the installation in the Premises of heavy
objects which might overload the Building floors.
7. ENTRY
Landlord reserves the right to exclude unauthorized parties from the
Property or the Building at all times other than the reasonable hours
of generally recognized business days determined by Landlord. All doors
opening onto public corridors shall be kept closed, except when in use
for ingress or egress. On weekends and legal holidays, and
on other days between the hours of 6 p.m. and 8 a.m. the following
day, access to the Property, the Building or the Premises may be
refused unless the person who seeks access is known to the employees
of the Property in charge or is properly identified. Landlord shall in
no case be liable for damages for any error respecting the admission
to or exclusion from the Property, the Building or the Premises of any
person. In case of riot or other commotion, Landlord reserves the
right to prevent access to the Property or the Building during the
continuance of the same by closing the door or otherwise, for the
safety of the tenants and protection of property at the Property. All
of Tenant's agents, employees and invitees shall comply with all
security regulations established from time to time by Landlord.
8. SOLICITORS
Canvassing, soliciting and peddling on the Property are prohibited, and
Tenant shall cooperate to prevent the same.
9. TELEPHONES
Landlord will direct technicians as to where and how telephone wires
are to be installed. The location of telephones and other office
equipment affixed to the Premises shall be subject to the approval of
Landlord.
10. EXPLOSIVES OR FIREARMS
No explosives, firearms or flammables of any kind shall be brought into
the Premises or onto the Property.
11. BUILDING DIRECTORY
The bulletin board or directory of the Building (1) will be provided
exclusively for the display of the name and location of tenants only,
(2) shall be maintained exclusively by Landlord, and (3) shall be in
the form determined by Landlord in its sole discretion.
12. EXPULSION
Landlord reserves the right to exclude or expel from the Property any
person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner violate the
rules of the Property.
13. REFUSE AND GARBAGE
Refuse and garbage shall be removed from the Premises at such times and
intervals, through such exits thereof and over such routes of egress
therefrom as Landlord may designate from time to time. No refuse or
garbage will be stored anywhere except inside the Premises or in areas
designated by Landlord.
"NOTICE DATE" RIDER TO
2200 FIRST AVENUE SOUTH
LEASE AGREEMENT
(OFFICE FORM)
This "Notice Date" Rider is dated as of the date of the 2200 First
Avenue South Lease Agreement (Office Form) ("Lease") to which this Rider is
attached and modifies the attached Lease by and between 2200 First Avenue South
LLC, a Washington limited liability company ("Landlord"), and The Cobalt Group,
Inc., a Washington corporation ("Tenant"), concerning certain premises commonly
referred to as Suite 400, 2200 First Avenue South, Seattle, Washington, and
legally described in the Lease ("Premises"). References in this Rider to the
Lease shall refer to the attached Lease as modified by the terms of this Rider
unless the context requires otherwise. To the extent the terms of this Rider are
inconsistent with the other terms of the Lease, the terms of this Rider shall
control. Unless specifically stated otherwise, all capitalized terms in this
Rider shall have the same meaning as defined in the Lease.
1. "NOTICE DATE." Section 4.4 of the Lease provides in part:
When Landlord has substantially completed Landlord's Work such that
Tenant may reasonably commence Tenant's Work and installation of
equipment (even though a portion of Landlord's Work may remain to be
completed during or after Tenant's Work), Landlord shall notify Tenant
that the Premises are available for the commencement of Tenant's Work;
the date of such notice shall be the "Notice Date."
Landlord and Tenant acknowledge and agree that the Premises will be available
for the commencement of Tenant's Work before final inspection and approval of
all of Landlord's Work by the City of Seattle building department. In the event,
after the Notice Date, Tenant's Work is subject to a "stop work" order issued by
the City of Seattle building department based upon incorrectly completed or
uncompleted Landlord's Work, then the Notice Date shall be deemed to be extended
one day for each day that such "stop work" order remains in effect with respect
to Tenant's Work after Tenant delivers to Landlord notice of the "stop work"
order based upon which Tenant is entitled to extension of the Notice Date,
together with a copy of the "stop work" order, any associated correspondence and
a description of the corrective action required to be taken by Landlord.
Notwithstanding the foregoing, if the "stop work" order with respect to Tenant's
Work is lifted within twenty-four (24) hours (exclusive of weekends and
holidays) after Tenant delivers written notice to Landlord of the "stop work"
order, then there shall be no extension of the Notice Date based upon such "stop
work" order. If a "stop work" order with respect to Tenant's Work is issued for
reasons other than incorrectly completed or uncompleted Landlord's Work or if a
"stop work" order with respect to Tenant's Work is erroneously issued, then
there shall be no extension of the Notice Date based upon such "stop work"
order.
2. DELIVERY OF NOTICE. Any notice delivered under this Rider shall be
delivered in writing either personally, by mail or by facsimile transmission. In
the event notice is delivered by mail, it shall be deemed to have been
delivered, whether actually received or not, on the date three days after the
day the notice is deposited in the United States mail, certified mail, return
receipt requested, addressed to the party entitled thereto at the address of
such party set forth below; provided, however, that notice by mail shall not be
deemed delivered until actually received if the address to which such notice is
sent is outside of the United States. In the event notice is delivered by
facsimile transmission, it shall be deemed to have been delivered, whether
actually received or not, on the date the facsimile machine of the party sending
the notice prints a confirmation report that the facsimile transmission was
received by the facsimile machine at the facsimile number set forth below as the
facsimile number of the party receiving the notice; provided, however, if the
time of delivery at the receiver's facsimile machine was not between the hours
of 9:00 a.m. and 5:00 p.m. local time on a business day, then the notice shall
be deemed to have been delivered the next business day, and provided, further,
that contemporaneously with
the facsimile transmission the party sending the notice shall telephone the
party receiving the notice at the telephone number set forth below and leave a
message concerning the facsimile transmission being sent. Copies of all notices
delivered by facsimile shall be promptly mailed to the parties being notified
but such mailing shall only be for the convenience of the parties and shall not
affect the effectiveness of the notice delivered by facsimile. The address and
facsimile number to which notice shall be delivered may be changed by notice to
the other parties. Copies of notice shall be simultaneously delivered to the
counsel of the party receiving the notice as indicated below.
To Landlord: c/o Zarett Properties
114 Alaskan Way South, Suite 120
Seattle, WA 98101
Facsimile No. 206-682-9439
Telephone No. 206-621-8949
With a copy to: Camille Taylor Ralston
Montgomery, Purdue, Blankinship & Austin P.L.L.C.
5800 Columbia Seafirst Center
701 - Fifth Avenue
Seattle, Washington 98104
Fax: (206) 625-9534
Telephone: (206) 682-7090
To Tenant: Suite 400
2200 First Avenue South
Seattle, WA 98134
With a copy to: David Rockwell
Stoel Rives
600 University Street, #3600
Seattle, Washington 98101
Fax: (206) 386-7510
Telephone: (206) 386-7694
3. RATIFICATION. Except as specifically amended herein, all of the
terms, conditions and covenants of the Lease are hereby ratified and shall
continue in full force and effect.
LANDLORD: TENANT:
2200 First Avenue South LLC, The Cobalt Group, Inc.,
a Washington limited liability company a Washington corporation
By: By:
----------------------------------- --------------------------------
David Zarett, Member
By:
--------------------------------