EXHIBIT 10.25
MASTER LEASE
1. BASIC LEASE TERMS
a. DATE OF LEASE: October 1, 1994
b. TENANT: NeoPath, Inc., a Washington corporation
Trade Name: NeoPath, Inc.
Address (Leased Premises): 8271 154th Avenue N.E., Redmond, WA 98052
Building/Unit: H/8271
Address (For Notices): 8271 154th Avenue N.E., Redmond, WA 98052
Building/Unit: H/8271
Facsimile: __________________
c. LANDLORD: Teachers Insurance & Annuity Association, a New York
corporation
Address (For Notices): 730 Third Avenue N.E., 7th Floor, New York, New
York 10017
Facsimile: _____________
with a copy to Koll Management Services, 4343 Von Karman Avenue,
Newport Beach, CA 92660, Facsimile: (714) 833-3755; or to such other
place as Landlord may from time to time designate by notice to Tenant.
d. TENANT'S USE OF PREMISES: Light manufacturing of medical testing
devices, office and warehouse uses relating to same, and incidental
related research and development uses.
e. PREMISES AREA: approximately 29,771 Rentable Square Feet
f. PROJECT AREA: approximately 39,451 Rentable Square Feet
g. TERM OF LEASE: The Lease shall have a Commencement Date of December 1,
1994 or such sooner or later date as is set forth in Section 3. The
Expiration Date of this Lease shall be sixty (60) months after the
Commencement Date
h. BASE MONTHLY RENT: The Base Monthly Rent under this Lease shall be as
follows:
Months Base Monthly Rent
1 $ 0.00
2-5 $ 11,837.00
6 $ 0.00
7-10 $ 25,680.00
(provided that all of the Premises
are substantially complete as of such
date)
11-12 $ 0.00
13-17 $ 25,680.00
18 $ 0.00
19-22 $ 25,680.00
23-24 $ 0.00
25-29 $ 25,680.00
30 $ 0.00
31-34 $ 25,680.00
35-36 $ 0.00
37 $ 27,044.00
38-60 $ 27,044.00
i. [Intentionally deleted.]
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j. LEASE CONSIDERATION: In consideration of Landlord's agreement to
construct the Premises Improvements and to enter into this Lease,
Tenant shall, at the time of full execution of this Lease, pay to
Landlord Lease Consideration in the sum of Two Hundred Thirty-Five
Thousand Nine Hundred Sixty-One Thousand Dollars ($235,961.00), which
amount shall be held in a diminishing escrow for the sole purpose of
allowing Tenant to receive the interest on the diminishing amount
thereof, all as more fully set forth in Section 5 and Exhibit E.
k. SECURITY DEPOSIT: $27,044
NON-REFUNDABLE CLEANING FEE: [Intentionally Omitted]
1. BROKER(S): Paul Jerue, CB Commercial Real Estate Group, Inc.
m. GUARANTORS: N/A
n. NON-STANDARD SECTIONS:
Non-standard sections of this lease numbered 29 through 33 are
included herein and made a part hereof.
o. ADDITIONAL EXHIBITS:
The following Exhibits are attached hereto and made a part hereof.
Exhibit A - The Premises
Exhibit B - The Project
Exhibit C - Signage Regulations
Exhibit D - Plans and Specifications
Exhibit E - Escrow Instructions
2. PREMISES/COMMON AREAS/PROJECT/Improvements.
a. PREMISES. Landlord leases to Tenant the premises described in Section
1 and shown on Exhibit A (the "Premises"), located in this project
being that portion of the WestPark crosshatched on Exhibit B (the
"Project"). By entry on the Premises, Tenant acknowledges that it has
examined the Premises and accepts the Premises in their then present
condition, subject to any additional work Landlord has agreed to do.
The actual Rentable Square Footage of the Premises may vary from the
amount set forth in Section l(e), depending on the final contract
documents for the Premises agreed to between Landlord and Tenant.
Within thirty (30) days after substantial completion of the entire
Premises, Landlord shall certify in writing to Tenant the actual
Rentable Square Footage of the Premises (with any unimproved mezzanine
space calculated based on Landlord's reasonable estimate). If the
actual Rentable Square Footage varies from that stated in Section
l(e), (i) Base Monthly Rent shall be adjusted pro rata to reflect the
actual Rentable Square Footage of the Premises, and (ii) Tenant's
Share shall be adjusted in accordance with the formula stated in
Section 4(c). "Rentable Square Footage" shall be calculated
consistent with Landlord's calculations for other Tenants in WestPark.
b. COMMON AREAS. As used in this Lease, "Common Areas" shall mean all
portions of the Project not leased or demised for lease to specific
tenants. During the Lease Term, Tenant and its licensees, invitees,
customers and employees shall have the non-exclusive right to use the
public portions of the Common Areas, including all parking areas,
landscaped areas, entrances, lobbies, elevators, stairs, corridors,
and public restrooms in common with Landlord, other Project tenants
and their respective licensees, invitees, customers and employees.
Landlord shall at all times have exclusive control and management of
the Common Areas and no diminution thereof shall be deemed a
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constructive or actual eviction or entitle Tenant to compensation or a
reduction or abatement of rent. Landlord in its discretion may
increase, decrease or change the number, locations and dimensions of
any Common Areas and other improvements shown on Exhibit A which are
not within the Premises, provided Landlord shall not make a
modification that materially adversely affects the habitability of the
Premises for the Permitted Use.
c. PROJECT. Landlord reserves the right in its sole discretion to modify
or alter the configuration or number of buildings in the Project,
provided only that upon such modification or alteration, the Project
Area as set forth in Section l(f) shall be adjusted to reflect such
modification or alteration, and provided further that Landlord shall
not make a modification that materially adversely affects the
habitability of the Premises for the Permitted Use.
d. IMPROVEMENTS. Landlord shall improve the Premises in accordance with
the plans and specifications attached hereto as Exhibit D (the
"Premises Improvements"). The Premises Improvements shall include an
elevator serving the mezzanine and second floor space, and shall also
include construction of shell improvements of approximately 4,574
Rentable Square Feet of mezzanine space (the "Mezzanine Space") which
may be further improved and occupied as set forth in Section 33. If
Tenant requests any changes to Exhibit D, such changes shall be
processed as a change order, and any cost thereof shall be paid by
Tenant prior to commencement of the changed work. Notwithstanding the
above, the entrance improvements shown in crosshatching on Exhibit D
shall be constructed on an "allowance" basis (as such term is commonly
used in the construction industry), with Tenant being provided an
allowance of Ten Thousand Dollars ($10,000) for the cost of improvements
to the crosshatched area (including the cost of design, permitting and
construction of those entrance improvements). Any cost of such
improvements in excess of Ten Thousand Dollars ($10,000) shall be paid
by Tenant as and when invoiced by Landlord's contractor.
3. TERM.
a. COMMENCEMENT DATE. The Commencement Date listed in Section l(g) of
this Lease represents an estimate of the Commencement Date. This Lease
shall commence on the estimated Commencement Date if the Premises
Improvements are substantially completed by fourteen (14) days prior to
such date, but otherwise the Commencement Date shall be first to occur
of the following events (i) fourteen (14) days after the date on which
Landlord notifies Tenant that the Premises Improvements are
substantially completed in accordance with Exhibit D, (ii) the date on
which Tenant commences beneficial occupancy of any portion of the
Premises other than for move in purposes, or (iii) if substantial
completion of the Premises Improvements is delayed due to Tenant's
failure to perform its obligations under this Lease, then the date
determined by Landlord as fourteen (14) days after the date upon which
the Premises Improvements would have been substantially completed, but
for Tenant's failure to perform. If this Commencement Date is later than
the Section 1 Commencement Date, this Lease shall not be void or
voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting therefrom, provided only that if substantial completion of
manufacturing space on the first floor (the "Manufacturing Space") has
not occurred by December 31, 1994 for any reason other than force
majeure or delay caused by Tenant, or if the Premises Improvements are
not all substantially complete by the seven month anniversary of the
Commencement Date for any reason other than
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force majeure or delay caused by Tenant (which Tenant caused delay shall
include delay caused by Tenant's failure to timely respond to plan
proposals), then Tenant shall be entitled to cancel this Lease on thirty
(30)days written notice to Landlord given within ten (10) days after
Landlord's failure to meet an applicable deadline, and neither party
shall have any further obligation to the other. Landlord shall confirm
the Commencement Date by written notice to Tenant. This Lease shall be
for a term ("Lease Term") beginning on the Commencement Date and ending
on the Expiration Date, unless extended or sooner terminated in
accordance with the terms of this Lease.
b. OCCUPANCY BEFORE COMMENCEMENT DATE. If any reasonably segregatable
portion or portions of the Premises Improvements is substantially
complete prior to the Commencement Date, Tenant may occupy such area,
provided that (a) Tenant shall not interfere with Landlord's
construction of Premises Improvements and shall coordinate with
Landlord's activities and comply with Landlord's reasonable directives,
and (b) all provisions of Sections 15 and 16 of this Lease shall apply
to any such presence.
4. RENT
a. BASE MONTHLY RENT. Tenant shall pay Landlord monthly base rent in the
initial amount in Section 1 which shall be payable monthly in advance on
the first day of each and every calendar month ("Base Monthly Rent"). If
the term of this Lease contains any rental abatement period, Tenant
hereby agrees that if Tenant breaches the Lease and fails to cure such
breach within the applicable cure period, if any, and/or abandons the
Premises before the end of the Lease term, or if Tenant's right to
possession is terminated by Landlord because of Tenant's breach of the
Lease, the rental abatement period shall be deemed extinguished, and
there shall be immediately due from Tenant to Landlord, in addition to
any damages otherwise due Landlord under the terms and conditions of the
Lease, Base Monthly Rent prorated for the entirety of the rental
abatement period at the average Base Monthly Rent for the Lease, plus
any and all other charges (such as Expenses) that were abated during
such rental abatement period.
b. RENT ADJUSTMENT. Base Monthly Rent shall be adjusted from time to
time as set forth in Section l(h).
c. EXPENSES. The purpose of this Section 4(c) is to ensure that Tenant
bears a share of all Expenses related to the use, maintenance,
ownership, repair or replacement, and insurance of the Project. Tenant
shall not be required to pay Tenant's Share of Expenses for the first
month of the Lease Term. Accordingly, beginning with the second month of
the Lease Term, Tenant shall each month pay to Landlord one- twelfth
(1/12) of Tenant's Share of Expenses related to the Project. Tenant
shall pay such sums as Additional Rent payable simultaneous with Base
Monthly Rent (pro-rated for any partial month at the commencement or end
of this Lease). As used in this Lease, "Tenant's Share" shall mean the
Premises Area, as defined in Section 1.e, divided by the Project Area,
as defined in Section 1.f, and "Tenant's Share of Expenses" shall mean
total Expenses for the Project, multiplied by Tenant's Share.
1) Expenses Defined. The term "Expenses" shall mean a11 costs and
expenses of the ownership, operation, maintenance, repair or
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replacement, and insurance of the Project, including without limitation,
the following costs:
(a) All supplies, materials, labor, equipment, and utilities
used in or related to the operation and maintenance of the
Project,
(b) All maintenance, management, janitorial, legal, accounting,
insurance, and service agreement costs related to the Project;
(c) All maintenance, replacement and repair costs relating to
the areas within or around the Project, including, without
limitation, air conditioning systems, sidewalks, landscaping, service
areas, driveways, parking Areas (including resurfacing and restriping
parking areas), walkways, building exteriors (including painting),
signs and directories, repairing and replacing roofs, walls, etc.
These costs may be included either based on actual expenditures or
the use of an accounting reserve based on past cost experience for
the Project.
(d) Amortization (along with reasonable financing charges) of
capital improvements made to the Project which may be required by any
government authority or which will improve the operating efficiency
of the Project (provided, however, that the amount of such
amortization for improvements not mandated by government authority
shall not exceed in any year the amount of costs reasonably
determined by Landlord in its sole discretion to have been saved by
the expenditure either through the reduction or minimization of
increases which would have otherwise occurred).
(e) Real Property Taxes including all taxes, assessments (general and
special) and other impositions or charges which may be taxed,
charged, levied, assessed or imposed upon all or any portion of or in
relation to the Project or any portion thereof, any leasehold estate
in the Premises or measured by Rent from the Premises, including any
increase caused by the transfer, sale or encumbrance of the Project
or any portion thereof. "Real Property Taxes" shall also include any
form of assessment, levy, penalty, charge or tax (other than estate,
inheritance, net income, or franchise taxes) imposed by any authority
having a direct or indirect power to tax or charge, including,
without limitation, any city, county, state federal or any
improvement or other district, whether such tax is (1) determined by
the value of the Project or the Rent or other sums payable under this
Lease; (2) upon or with respect to any legal or equitable interest of
Landlord in the Project or any part thereof; (3) upon this
transaction or any document to which Tenant is a party creating a
transfer in any interest in the Project, (4) in lieu of or as a
direct substitute in whole or in part of or in addition to any real
property taxes on the Project, (5) based on any parking spaces or
parking facilities provided in the Project, or (6) in consideration
for services, such as police protection, fire protection, street,
sidewalk and roadway maintenance, refuse removal or other services
that may be provided by any governmental or quasigovernmental agency
from time to time which were formerly provided without charge or with
less charge to property owners or occupants. Notwithstanding the
above, Real Property Taxes shall not include impact fees for
development of portions of the Project exclusive of the Premises.
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2) EXCLUSIONS FROM EXPENSES. Notwithstanding anything to the contrary
contained in this Lease, the following items shall be excluded (or, as
applicable, deducted) in calculating Tenant's Share of Expenses: (a)
costs of any special services rendered to individual tenants (including
Tenant) for which a special charge is made; (b) attorneys fees and costs
related to defaults by other tenants in the Project; (c) depreciation or
amortization of the cost of the Project and any improvements or any
costs which are required to be capitalized under generally accepted
accounting principles excepting only amounts amortized by Landlord to
cover the cost of replacements of Project systems and equipment and to
cover such capital improvements as are either required by law or are
reasonably expected to lower Operating Costs, with such amortization to
be based on the estimated useful lives of such items and annualized on a
straight line basis, over such useful lives; (d) costs of entering into
or enforcing Tenant leases or in connection with the financing or
transfer of the Project; (e) costs of repairing casualty damage to the
extent the same is covered by insurance carried or required to be
carried under this Lease; (f) costs reimbursed from insurance or
condemnation proceeds or from Tenant or any other tenant of the Project
pursuant to other lease clauses; (g) costs of fines and penalties
imposed as a result of Landlord's failure to comply with any applicable
rule or regulation; (h) costs paid to parties affiliated with Landlord
in excess of fair market value; (i) costs of correcting structures or
equipment in the Project or elements of the Common Areas that were, as
of the Commencement Date, not in compliance with applicable laws or
regulations; (j) costs of preparing space in the Project (including the
Premises) for tenant occupancy; (k) lease brokerage commissions and
advertising; (1) costs for services rendered to any tenant whose space
is not included in the Rentable Area of the Project; (m) the cost of
debt service; (n) wages, salaries and other compensation paid to
employees of Landlord who are above the level of Project manager; and
(o) all other items for which Tenant or any other tenant, occupant or
other party compensates Landlord, so that no duplication of payments by
Tenant or to Landlord shall occur.
3) ANNUAL ESTIMATE OF EXPENSES, TENANT'S SHARE. When Tenant takes
possession of the Premises, Landlord shall estimate Tenant's Share of
Expenses for the remainder of the calendar year, and at the commencement
of each calendar year thereafter, Landlord shall estimate Tenant's Share
of Expenses for the coming year by multiplying the estimated annual
Project Expenses by Tenant's Share. Landlord shall, on request, provide
Tenant with a reasonable line item listing of the elements constituting
Expenses for the purpose of this Section 4.
4) MONTHLY PAYMENT OF EXPENSES. Tenant shall pay to Landlord,
monthly in advance, as Additional Rent, one-twelfth (1/12) of the Annual
Estimate of Tenant's Share of Expenses for the period beginning with the
second month of the Lease Term. As soon as practical following each
calendar year, Landlord shall prepare an accounting of actual Expenses
incurred during the prior calendar year and such accounting shall
reflect Tenant's Share of Expenses. If the Additional Rent paid by
Tenant under this Section 4(c) (4) during the preceding calendar year
was less than the actual amount of Tenant's Share of Expenses, Landlord
shall so notify Tenant and Tenant shall pay such amount to Landlord
within 30 days of receipt of such notice. Such amount shall be deemed to
have accrued during the prior calendar year and shall be due and payable
from Tenant even though the term of this Lease has expired or this Lease
has been terminated prior to Tenant's receipt of this notice. Tenant
shall have thirty (30) days
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from receipt of such notice to contest the amount due, failure to so
notify Landlord shall represent final determination of Tenant's Share of
Expenses. If Tenant's payments were greater than the actual amount, then
such overpayment shall be credited by Landlord to Tenant's Share of
Expenses due under this Section 4(c)(3).
5) RENT WITHOUT OFFSET AND LATE CHARGE. As used herein, "Rent" shall
mean all monetary sums due from Tenant to Landlord. All Base Monthly
Rent shall be paid by Tenant to Landlord without prior notice or demand
in advance on the first day of every calendar month, at the address
shown in Section 1, or such other place as landlord may designate in
writing from time to time. Whether or not so designated, all other sums
due from Tenant under this Lease shall constitute Additional Rent,
payable without prior notice or demand when specified in this Lease, but
if not specified, then within ten (10) days of demand. All Rent shall be
paid without any deduction or offset whatsoever. All Rent shall be paid
in lawful currency of the United States of America. Proration of Rent
due for any partial month shall be calculated by dividing the number of
days in the month for which Rent is due by the actual number of days in
that month and multiplying by the applicable monthly rate. Tenant
acknowledges that late payment by Tenant to Landlord of any Rent or
other sums due under this Lease will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of such cost being
extremely difficult and impracticable to ascertain. Such costs include,
without limitation, processing and accounting charges and late charges
that may be imposed on Landlord by the terms of any encumbrance or note
secured by the Premises. Therefore, if any Rent or other sum due from
Tenant is not received by the end of the 10th day after the due date
(e.g. by the end of the 10th of the month when due on the 1st), Tenant
shall pay to Landlord an additional sum equal to 10% of such overdue
payment. Landlord and Tenant hereby agree that such late charge
represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of any such late payment and that the late charge
is in addition to any and all remedies available to the Landlord and
that the assessment and/or collection of the late charge shall not be
deemed a waiver of any other default. Additionally, all such delinquent
rent or other sums not paid within 10 days of the date due, plus this
late charge, shall bear interest at the rate of 18 percent per annum,
with interest commencing on the due date for the rent or late charge, as
applicable. If the interest rate specified in this Lease is higher than
the rate permitted by law, the interest rate is hereby decreased to the
maximum legal interest rate permitted by law. Any payments of any kind
returned for insufficient funds will be subject to an additional
handling charge of $25.00, and thereafter, Landlord may require Tenant
to pay all future payments of Rent or other sums due by money order or
cashier's check.
5. LEASE CONSIDERATION. In consideration for Landlord's agreement to
construct the Premises Improvements and to enter into this Lease, Tenant
shall, upon full execution of this Lease, pay to Landlord the Lease
Consideration set forth in Section 1(j), provided that if this Lease is
terminated based on Landlord's failure to construct the Premises
Improvements as set forth in this Lease, then the Lease Consideration shall
be promptly refunded to Tenant. The Lease Consideration shall be held in an
escrow account pursuant to the Escrow Instructions attached as Exhibit E
hereto, which escrow account is established for the sole purpose of allowing
Tenant to collect the interest earned on the diminishing balance thereof.
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6. DEPOSIT. Upon execution of this Lease, Tenant shall deposit a security
deposit as set forth in Section 1(k) with Landlord. If Tenant is in default,
Landlord can use the security deposit or any portion of it to cure the
default or to compensate Landlord for any damages sustained by Landlord
resulting from Tenant's default. Upon demand, Tenant shall immediately pay
to Landlord a sum equal to the portion of the security deposit expended or
applied by Landlord to restore the security deposit to its full amount. In
no event will Tenant have the right to apply any part of the security
deposit to any Rent or other sums due under this Lease. If Tenant is not in
default at the expiration or termination of this Lease, Landlord shall
return the security deposit to Tenant. Landlord's obligations with respect
to the deposit are those of a debtor and not of a trustee, and Landlord can
commingle the security deposit with Landlord's general funds. Landlord shall
not be required to pay Tenant interest on the deposit. Landlord shall be
entitled to immediately endorse and cash Tenant's prepaid deposit; however,
such endorsement and cashing shall not constitute Landlord's acceptance of
this Lease. In the event Landlord does not accept this Lease, Landlord shall
return said prepaid deposit.
7. USE OF PREMISES AND PROJECT FACILITIES. Tenant shall use the Premises
solely for the purposes set forth in Section 1 and for no other purpose
without obtaining the prior written consent of Landlord. Landlord may
withhold consent to a change of use in Landlord's sole discretion. Tenant
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the Premises or with respect to
the suitability of the Premises or the Project for the conduct of Tenant's
business, nor has Landlord agreed to undertake any modification, alteration
or improvement to the Premises or the Project, except as provided in writing
in this Lease. Tenant acknowledges that Landlord may from time to time, at
its sole discretion, make such modifications, alterations, deletions or
improvements to the Project as Landlord may deem necessary or desirable,
without compensation or notice to Tenant, provided that Landlord shall not
make a modification that materially adversely affects the habitability of
the Premises for the Permitted Uses. Tenant shall promptly comply with all
laws, ordinances, orders and regulations affecting the Premises and the
Project, including, without limitation, any rules and regulations that may
be attached to this Lease and to any reasonable modifications to these rules
and regulations as Landlord may adopt from time to time. Tenant acknowledges
that, except for Landlord's obligations pursuant to Section 13, Tenant is
solely responsible for ensuring that the Premises comply with any and all
governmental regulations applicable to Tenant's conduct of business on the
Premises, and that Tenant is solely responsible for any alterations or
improvements that may be required by such regulations, now existing or
hereafter adopted. Tenant shall not do or permit anything to be done in or
about the Premises or bring or keep anything in the Premises that will in
any way increase the premiums paid by Landlord on its insurance related to
the Project or which will in any way increase the premiums for fire or
casualty insurance carried by other tenants in the Project. Tenant will not
perform any act or carry on any practices that may injure the Premises or
the Project; that may be a nuisance or menace to other tenants in the
Project; or that shall in any way interfere with the quiet enjoyment of such
other tenants. Tenant shall not use the Premises for sleeping, washing
clothes, cooking (except such minor cooking as is consistent with general
office use) or the preparation, manufacture or mixing of anything that might
emit any objectionable odor, noises, vibrations or lights onto such other
tenants. If sound insulation is required to muffle noise produced by Tenant
on the Premises, Tenant at its own cost shall provide all necessary
insulation. Tenant shall not do anything on the premises
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which will overload any existing parking or service to the Premises. Pets
and/or animals of any type shall not be kept on the Premises.
8. EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE.
a. EMISSIONS. Tenant shall not:
1) Permit any of Tenant's vehicles on the premises to emit exhaust
which creates any hazard to human health or the environment;
2) Discharge, emit or permit to be discharged or emitted, any
liquid, solid or gaseous matter, or any combination thereof, into the
atmosphere, the ground or any body of water which matter, as
reasonably determined by Lessor or any governmental entity, does, or
may, pollute or contaminate the same, or is, or may become,
radioactive or does, or may, adversely affect the (a) health or
safety of persons, wherever located, whether on the Premises or
anywhere else, (b) condition, use or enjoyment of the Premises or any
other real or personal property, whether on the Premises or anywhere
else, or (c) Premises or any of the improvements thereto or thereon
including buildings, foundations, pipes, utility lines, landscaping
or parking areas;
3) Produce, or permit to be produced, any intense glare, light or
heat except within an enclosed or screened area and then only in such
manner that the glare, light or heat shall not be discernible from
outside the Premises;
4) Create, or permit to be created, any sound pressure level which
will interfere with the quiet enjoyment of any real property outside
the Premises, or which will create a nuisance or violate any
governmental law, rule, regulation or requirement;
5) Create, or permit to be created, any ground vibration that is
discernible outside the Premises; and
6) Transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation which is harmful or
hazardous to any person or property in, or about the Premises, or
anywhere else.
Notwithstanding the above, Tenant shall be entitled to manufacture medical
testing equipment not involving any radioactive materials, but using such
materials as are commonly used in light manufacturing, so long as Tenant
strictly complies with all applicable governmental laws and regulations
regulating such materials.
b. STORAGE AND USE.
1) Storage. Subject to the uses permitted and prohibited to Tenant
under this lease, Tenant shall store in appropriate leak proof
containers all solid, liquid or gaseous matter, or any combination
thereof, which matter, if discharged or emitted into the atmosphere,
the ground or any body of water, does or may (a) pollute or
contaminate the same, or (b) adversely affect the (i) health or
safety of persons, whether on the Premises or anywhere else,
(ii) condition, use or enjoyment of the Premises or any real or
personal property, whether on the Premises or anywhere else, or
(iii) Premises or any of the improvements thereto or thereon.
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2) USE. In addition, without Landlord's prior written consent,
Tenant shall not use, store or permit to remain on the Premises any
solid, liquid or gaseous matter which is, or may become radioactive. If
Landlord does give its consent, Tenant shall store the materials in such
a manner that no radioactivity will be detectable outside designated
storage area and Tenant shall use the materials in such manner that (a)
no real or personal property outside the designated storage area shall
become contaminated thereby or (b) there are and shall be no adverse
effects on the (i) health or safety of persons, whether on the Premises
or anywhere else, (ii) condition, use or enjoyment of the Premises or any
real or personal property thereon or therein, or (iii) Premises or any of
the improvements thereto or thereon.
c. DISPOSAL OF WASTE
1) Refuse Disposal. Tenant shall not keep any trash, garbage, waste or
other refuse on the Premises except in sanitary containers and shall
regularly and frequently remove same from the Premises. Tenant shall keep
all incinerators, containers or other equipment used for storage or
disposal of such materials in a clean and sanitary condition.
2) Sewage Disposal. Tenant shall properly dispose of all sanitary sewage
and shall not use the sewage disposal system (a) for the disposal of
anything except sanitary sewage or (b) in excess of the lesser amount (i)
reasonably contemplated by the uses permitted under this Lease or (ii)
permitted by any governmental entity. Tenant shall keep the sewage
disposal system free of all obstructions and in good operating condition.
3) Disposal of Other Waste. Tenant shall properly dispose of all other
waste or other matter delivered to, stored upon, located upon or within,
used on, or removed from, the Premises in such a manner that it does not,
and will not, adversely affect the (a) health or safety of persons,
wherever located, whether on the Premises or elsewhere (b) condition, use
or enjoyment of the Premises or any other real or personal property,
wherever located, whether on the Premises or anywhere else, or (c)
Premises or any of the improvements thereto or thereon including
buildings, foundations, pipes, utility lines, landscaping or parking
areas.
d. INFORMATION. Tenant shall provide Landlord with any and all
information regarding hazardous or toxic materials in the Premises,
including copies of all filings and reports to governmental entities at
the time they are originated, and any other information requested by
Landlord. In the event of any accident, spill or other incident involving
hazardous or toxic matter, Tenant shall immediately report the same to
Landlord and supply Landlord with all information and reports with
respect to the same, together with Tenant's clean-up or remediation plan
and schedule. If such clean-up or remediation plan is not acceptable to
Landlord in Landlord's sole discretion, Landlord may so notify Tenant
and, upon 48 hours prior written notice (or without notice if so required
by an emergency) may enter on the Premises to conduct the clean-up or
remediation and charge Tenant the costs thereof as Additional Rent. All
information described herein shall be provided to Landlord regardless of
any claim by Tenant that it is confidential or privileged.
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e. COMPLIANCE WITH LAW. Notwithstanding any other provision in this
Lease to the contrary, Tenant shall comply with all laws, statutes,
ordinances, regulations, rules and other governmental requirements in
complying with its obligations under this lease, and in particular,
relating to the storage, use and disposal of hazardous or toxic matter.
f. INDEMNIFICATION. Tenant shall indemnify, defend and hold Landlord
and lenders to Landlord ("Lender") harmless from any and all of the
costs, fees, penalties, charges and expenses assessed against, or
imposed, upon Landlord, and Lender (as Well as Landlord's and Lender's
attorneys fees and costs) as a result of Tenant's use, disposal,
transportation, generation and/or sale of Hazardous Substances.
9. SIGNAGE. All signing shall comply with rules and regulations set forth by
Landlord as may be modified from time to time. Current rules and regulations
relating to signs are described on Exhibit C. Tenant shall place no window
covering (e.g., shades, blinds, curtains, drapes, screens, or tinting
materials), stickers, signs, lettering, banners or advertising or display
material on or near exterior windows or doors if such materials are visible
from the exterior of the Premises, without Landlord's prior written consent.
Similarly, Tenant may not install any alarm boxes, foil protection tape or
other security equipment on the Premises without Landlord's prior written
consent. Any material violating this provision may be destroyed by Landlord
without compensation to Tenant. Landlord acknowledges that Tenant will be
designing and installing a security system.
10. PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency all taxes,
assessments, license fees and public charges levied, assessed or imposed
upon its business operations as well as upon all trade fixtures, leasehold
improvements, merchandise and other personal property in or about the
Premises.
11. PARKING. Landlord grants to Tenant and Tenant's customers, suppliers,
employees and invitees, a non-exclusive license to use the designated
parking areas in the Project for the use of motor vehicles during the term
of this Lease. Landlord reserves the right at any time to grant similar
non-exclusive use to other tenants, to promulgate rules and regulations
relating to the use of such parking areas, including reasonable restrictions
on parking by tenants and employees, to designate specific spaces for the
use of any tenant, to make changes in the parking layout from time to time,
and to establish reasonable time limits on parking. Overnight parking is
prohibited and any vehicle violating this or any other vehicle regulation
adopted by Landlord is subject to removal at the owner's expense. The
Project's current parking ratio is three (3) stalls available on a
non-exclusive basis per 1,000 square feet of rentable area, which shall not
be reduced except as may be needed to accomplish compliance with changes in
governmental regulations.
12. UTILITIES. Tenant shall pay for all water, gas, heat, light, power, sewer,
electricity, telephone or other service metered, chargeable or provided to
the Premises and not otherwise charged as part of Tenant's Share of
Expenses. If Tenant, in Landlord's reasonable estimation, uses more of
commonly metered utilities than other tenants in the Project, Landlord may
specially allocate the cost of same to Tenant. Landlord reserves the right
to install separate meters for any such utility and to charge Tenant
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for the cost of such installation. Landlord shall be responsible for
maintaining, as an Expense, elevator service and maintenance.
13. MAINTENANCE. Landlord shall maintain, in good condition, Common Areas,
the structural parts of the Premises, which shall include only the
foundations, bearing and exterior walls (excluding glass), subflooring and
roof (excluding skylights), the unexposed electrical, plumbing and sewerage
systems, including those portions of the systems lying outside the Premises,
gutters and downspouts on the Building and the heating, ventilating and air
conditioning system servicing the Premises; provided, however, the cost of
all such maintenance shall be considered "Expenses" for purposes of Section
4.c. Except as provided above, Tenant shall maintain and repair the Premises
in good condition, including, without limitation, maintaining and repairing
all walls, storefronts, floors, ceilings, interior and exterior doors,
exterior and interior windows and fixtures and interior plumbing as well as
damage caused by Tenant, its agents, employees or invitees. Upon expiration
or termination of this Lease, Tenant shall surrender the Premises to
Landlord in the same condition as existed at the commencement of the term,
except for reasonable wear and tear or damage caused by fire or other
casualty that is not Tenant's obligation under this Lease to repair.
14. ALTERATIONS. Tenant shall not make any alterations to the Premises, or to
the Project, including any changes to the existing landscaping, without
Landlord's prior written consent, provided that Landlord's consent shall not
be required for alterations costing less than $5,000 that are not affixed to
the Premises and do not affect building structure or building systems. If
Landlord gives its consent to such alterations, Landlord may post notices in
accordance with the laws of the state in which the premises are located. Any
alterations made shall remain on and be surrendered with the Premises upon
expiration or termination of this Lease, except that Landlord may, within 30
days before or 30 days after expiration of the term, elect to require Tenant
to remove any alterations which Tenant may have made to the Premises. Tenant
may accompany a request for Landlord's consent to alterations with a request
for Landlord's election whether such alterations are to be removed on
termination of the Lease. If Tenant so requests, then Landlord shall notify
Tenant at time of consent whether Landlord will require removal of the
alterations. If Landlord elects under this Lease to require removal of
alterations, then at its own cost Tenant shall restore the Premises to the
condition designated by Landlord in its election, before the last day of the
term or within 30 days after notice of its election is given, whichever is
later.
Should Landlord consent in writing to Tenant's alteration of the Premises,
Tenant shall contract with a contractor approved by Landlord for the
construction of such alterations, shall secure all appropriate governmental
approvals and permits, and shall complete such alterations with due
diligence in compliance with plans and specifications approved by Landlord.
All such construction shall be performed in a manner which will not
interfere with the quiet enjoyment of other tenants of the Project. Tenant
shall pay all costs for such construction and shall keep the Premises and
the Project free and clear of all mechanics' liens which may result from
construction by Tenant.
15. RELEASE AND INDEMNITY.
a. TENANT INDEMNITY. Except as otherwise provided in this section,
Tenant shall indemnify, defend (using legal counsel acceptable to Landlord)
and save Landlord harmless from all claims, suits, losses,
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damages, fines, penalties, liabilities and expenses (including Landlord's
personnel and overhead costs and attorneys fees and other costs incurred in
connection with claims, regardless of whether such claims involve
litigation) resulting from any actual or alleged injury (including death) of
any person or from any actual or alleged loss of or damage to, any property
arising out of or in connection with (i) Tenant's occupation, use or
improvement of the Premises, or that of its employees, agents or
contractors, (ii) Tenant's breach of its obligations hereunder, or (iii) any
act or omission of Tenant or any subtenant, licensee, assignee or
concessionaire of Tenant, or of any officer, agent, employee, guest or
invitee of Tenant, or of any such entity in the Premises. Tenant agrees that
the foregoing indemnity specifically covers, actions brought by its own
employees. This indemnity with respect to acts or omissions during the term
of this Lease shall survive termination or expiration of this Lease. The
foregoing indemnity is specifically and expressly intended to, constitute a
waiver of Tenant's immunity under Washington's Industrial Insurance Act, RCW
Title 51, to the extent necessary to provide Landlord with a full and
complete indemnity from claims made by Tenant and its employees, to the
extent of their negligence. Tenant shall promptly notify Landlord of
casualties or accidents occurring in or about the Premises. LANDLORD AND
TENANT ACKNOWLEDGE THAT THE INDEMNIFICATION PROVISIONS OF THIS SECTION 15
WERE SPECIFICALLY NEGOTIATED AND AGREED UPON BY THEM.
b. Landlord Indemnity. Except as otherwise provided in this Section 15,
Landlord shall indemnify, defend (using legal counsel acceptable to Tenant)
and save Tenant harmless from all claims, suits, losses, damages, fines,
penalties, liabilities and expenses (including Tenant's personnel and
overhead costs and attorneys' fees and other costs incurred in connection
with claims, regardless of whether such claims involve litigation) resulting
from any actual or alleged injury (including death) of any person or from
any actual or alleged loss of or damage to, any property arising out of or
in connection with any act of Landlord on the Common Areas. Landlord agrees
that the foregoing indemnity specifically covers actions brought by its own
employees. This indemnity with respect to actions or omissions during the
term of this Lease shall survive termination or expiration of this Lease.
The foregoing indemnity is specifically and expressly intended to constitute
a waiver of Landlord's immunity under Washington's Industrial Insurance Act,
RCW Title 51, to the extent necessary to provide Tenant with a full and
complete indemnity from claims made by Landlord and .its employees to the
extent of their negligence. LANDLORD AND TENANT ACKNOWLEDGE THAT THE
INDEMNIFICATION PROVISIONS OF SECTION 15 WERE SPECIFICALLY NEGOTIATED AND
AGREED UPON BY THEM.
c. Release. Notwithstanding any other provision of this Lease, Tenant hereby
fully and completely waives and releases all claims against Landlord for any
losses or other damages sustained by Tenant or any person claiming through
Tenant resulting from any accident or occurrence in or upon the Premises,
including but not limited to: any defect in or failure of Project equipment;
any failure to make repairs; any defect, failure, surge in, or interruption
of Project facilities or services; any defect in or failure of Common Areas;
broken glass; water leakage; the collapse of any Building component; or any
act, omission or negligence of co-tenants, licensees or any other persons or
occupants of the Building, provided only that the release contained in this
Section 15.c shall not apply to claims for actual damage to persons or
property (excluding consequential damages such as lost profits) resulting
directly from (i) Landlord's breach of its express obligations under this
Lease which Landlord has not cured within a reasonable time after receipt of
written notice of such breach from Tenant or (ii) Landlord's gross
negligence or willful misconduct.
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d. Limitation on Indemnity. In compliance with RCW 4.24.115 as in effect on
the date of this Lease, all provisions of this Lease pursuant to which
Landlord or Tenant (the "Indemnitor") agrees to indemnify the other (the
"Indemnitee") against liability for damages arising out of bodily injury to
Persons or damage to property relative to the construction, alteration,
repair, addition to, subtraction from, improvement to, or maintenance of,
any building, road, or other structure, project, development, or improvement
attached to real estate, including the Premises, (i) shall not apply to
damages caused by or resulting from the sole negligence of the Indemnitee,
its agents or employees, and (ii) to the extent caused by or resulting from
the concurrent negligence of (a) the Indemnitee or the Indemnitee's agents
or employees, and (b) the Indemnitor or the Indemnitor's agents or
employees, shall apply only to the extent of the Indemnitor's negligence;
PROVIDED, HOWEVER, the limitations on indemnity set forth in this Section
shall automatically and without further act by either Landlord or Tenant be
deemed amended so as to remove any of the restrictions contained in this
Section no longer required by then applicable law.
e. Definitions. As used in any Section establishing indemnity or release of
Landlord, "Landlord" shall include Landlord, its partners, officers, agents,
employees and contractors, and "Tenant" shall include Tenant and any person
or entity claiming through Tenant.
16. INSURANCE. Tenant, at its cost, shall maintain public liability and
property damage insurance and products liability insurance with a single
combined liability limit of $1,000,000, insuring against all liability of
Tenant and its representatives, employees, invitees, and agents arising out
of or in connection with Tenant's use or occupancy of the Premises. Public
liability insurance, products liability insurance and property damage
insurance shall insure performance by Tenant of the indemnity provisions of
Section 15. Landlord shall be named as additional insured and the policy
shall contain cross-liability endorsements. On all its personal property, at
its cost, Tenant shall maintain a policy of standard fire and extended
coverage insurance with vandalism and malicious mischief endorsements and
"all risk" coverage on all Tenant's improvements and alterations, including
without limitation, all items of Tenant responsibility described in Section
13 in or about the Premises, to the extent of at least 90% of their full
replacement value. The proceeds from any such policy shall be used by Tenant
for the replacement of personal property and the restoration of Tenant's
improvements or alterations. All insurance required to be provided by Tenant
under this Lease shall release Landlord from any claims for damage to
business or to any person or the Premises and the Project, and to Tenant's
fixtures, personal property, improvements and alterations in or on the
Premises or the Project, caused by or resulting from risks insured against
under any insurance policy carried by Tenant in force at the time of such
damage. In addition, Tenant hereby independently releases Landlord from (and
waives any rights of subrogation as to) any and all claims for damage to
business or to any person or the Premises and the Project, and to Tenant's
fixtures, personal property, improvements and alterations in or on the
Premises or the Project, caused by or resulting from risks that would have
been insured against under any insurance policy required by this Lease to be
carried by Tenant, even if Tenant failed to so carry the required insurance.
Landlord hereby releases Tenant from (and waives any rights of subrogation
as to) any and all claims for damage to business or to any person or the
Premises and the Project that would have been covered by a standard
commercial fire and extended coverage insurance policy covering the Project.
All
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insurance required to be provided by Tenant under this Lease: (a) shall be
issued by Insurance companies authorized to do business in the state which
the premises are located with a financial rating of at least an A+XII status
as rated in the most recent edition of Best's Insurance Reports; (b) shall
be issued as a primary policy; and (c) shall contain endorsement requiring
at least 30 days prior written notice cancellation to Landlord and
Landlord's lender, before cancellation or change in coverage, scope or
amount of any policy. Tenant shall deliver a certificate or copy of such
policy together with evidence of payment of all current premiums to Landlord
within 30 days of execution of this Lease. Tenant's failure to provide
evidence of such coverage to Landlord may, in Landlord's sole discretion,
constitute a default under this Lease.
17. DESTRUCTION. If during the term, the Premises is more than 30% destroyed
from any cause, or any portion of the Project is destroyed so as to
substantially impair access to or use of the Premises, Landlord may, in its
sole discretion, terminate this Lease by delivery of notice to Tenant within
30 days of such event without compensation to Tenant. If in Landlord's
estimation, the Premises cannot be restored within 180 days following such
destruction, the Landlord shall notify Tenant and Tenant may terminate this
Lease by delivery of notice to Landlord within 30 days of receipt of
Landlord's notice. If neither Landlord nor Tenant terminates this Lease as
provided above, then Landlord shall commence to restore the Premises in
compliance with then existing laws and shall complete such restoration with
due diligence. In such event, this Lease shall remain in full force and
effect, but there shall be an abatement of Base Monthly Rent and Tenant's
Share of Expenses between the date of destruction and the date of completion
of restoration, based on the extent to which destruction interferes with
Tenant's use of the Premises.
18. CONDEMNATION.
a. Taking. If all of the Premises are taken by Eminent Domain, this Lease
shall terminate as of the date Tenant is required to vacate the premises and
all Base and Additional Rent shall be paid to that date. The term "Eminent
Domain" shall include the taking or damaging of property by, through or
under any governmental or statutory authority, and any purchase or
acquisition in lieu thereof, whether the damaging or taking is by government
or any other person. If, in the reasonable judgment of Landlord, a taking of
any part of the Premises by Eminent Domain, or a taking of part or all of
the parking for the Project, renders the Premises or any remainder thereof
unusable for the business of Tenant (or the cost of restoration of the
Premises or the parking is not commercially reasonable), the Lease may, at
the option of either party, be terminated by written notice given to the
other party not more than thirty (30) days after Landlord gives Tenant
written notice of the taking, and such termination shall be effective as of
the date when Tenant is required to vacate the portion of the Premises so
taken. If this Lease is so terminated, all Base and Additional Rent shall be
paid to the date of termination. Whenever any portion of the Premises is
taken by Eminent Domain and this Lease is not terminated, Landlord shall at
its expense proceed with all reasonable dispatch to restore, to the extent
of available proceeds and to the extent it is reasonably prudent to do so,
the remainder of the Premises to the condition they were in immediately
prior to such taking, and Tenant shall at its expense proceed with all
reasonable dispatch to restore its personal property and all improvements
made by it to the Premises to the same condition they were in immediately
prior to such taking. The Base and Additional Rent payable hereunder shall
be reduced from the date Tenant is required to partially Vacate the Premises
in the same proportion that the Rentable Square Footage taken
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bears to the total Rentable Square Footage of the Premises prior to taking.
b. AWARD. Landlord reserves all right to the entire damage award or payment
for any taking by Eminent Domain, and Tenant waives all claim whatsoever
against Landlord for damages for termination of its leasehold interest in
the Premises or for interference with its business, provided only that
Tenant shall be entitled to any award specifically allocated to a taking of
Tenant's personal property. Tenant hereby grants and assigns to Landlord any
right Tenant may now have or hereafter acquire to such damages and agrees to
execute and deliver such further instruments of assignment as Landlord may
from time to time request. Tenant shall, however, have the right to claim
from the condemning authority all compensation that may be recoverable by
Tenant on account of any loss incurred by Tenant in moving Tenant's
merchandise, furniture, trade fixtures and equipment, provided, however,
that Tenant may claim such damages only if they are awarded separately in
the eminent domain proceeding and not out of or as part of Landlord's
damages.
19. ASSIGNMENT OR SUBLEASE. Tenant shall not assign or encumber its interest
in this Lease or the Premises or sublease all or any part of the Premises or
allow any other person or entity (except Tenant's authorized
representatives, employees, invitees, or guests) to occupy or use all or any
part of the Premises without first obtaining Landlord's consent which
Landlord may withhold or condition in its sole discretion, provided only
that Landlord's consent shall not be withheld for an assignment or
sublease in connection with a merger or acquisition where the surviving
entity has a net worth immediately after the merger or acquisition equal to
or greater than that of Tenant immediately prior to the merger or
acquisition and the surviving entity will be carrying on the same business
as Tenant was engaged in or is carrying on a business compatible with the
other businesses in the Project and approved by Landlord, which approval
shall not be unreasonably withheld. No assignment or sublease shall release
Tenant from the obligation to perform all obligations under this Lease. Any
assignment, encumbrance or sublease without Landlord's written consent shall
be voidable and at Landlord's election, shall constitute a default. If
Tenant is a partnership, a withdrawal or change, voluntary, involuntary or
by operation of law of any partner, or the dissolution of the partnership,
shall be deemed a voluntary assignment. If Tenant consists of more than one
person, a purported assignment, voluntary or involuntary or by operation of
law from one person to the other shall be deemed a voluntary assignment. If
Tenant is a corporation, any dissolution, merger, consolidation or other
reorganization of Tenant, or sale or other transfer of a controlling
percentage of the capital stock of Tenant, or the sale of at least 25% of
the value of the assets of Tenant shall be deemed a voluntary assignment,
provided that Landlord's consent shall not be required for any public
offering of securities. The phrase "controlling percentage" means ownership
of and right to vote stock possessing at least 25% of the total combined
voting power of all classes of Tenant's capital stock issued, outstanding
and entitled to vote for election of directors. This Section 19 shall not
apply to corporations the stock of which is traded through an exchange or
over the counter. All rent received by Tenant from its subtenants in excess
of the Rent payable by Tenant to Landlord under this Lease shall be paid to
Landlord, or any sums to be paid by an assignee to Tenant in consideration
of the assignment of this Lease shall be paid to Landlord. If Tenant
requests Landlord to consent to a proposed assignment or subletting, Tenant
shall pay to Landlord, whether or not consent is ultimately given, $100 or
Landlord's reasonable attorney's fees incurred in connection with such
request, whichever is greater.
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No interest of Tenant in this Lease shall be assignable by involuntary
assignment through operation of law (including without limitation the
transfer of this Lease by testacy or intestacy). Each of the following acts
shall be considered an involuntary assignment: (a) if Tenant is becomes
bankrupt or insolvent, makes an assignment for the benefit of creditors, or
institutes proceedings under the Bankruptcy Act in which Tenant is the
bankrupt; or if Tenant is a partnership or consists of more than one person
or entity, if any partner of the partnership or other person or entity is or
becomes bankrupt or insolvent, or makes an assignment for the benefit of
creditors; or (b) if a writ of attachment or execution is levied on this
Lease; or (c) if in any proceeding or action to which Tenant is a party, a
receiver is appointed with authority to take possession of the Premises. An
involuntary assignment shall constitute a default by Tenant and Landlord
shall have the right to elect to terminate this Lease, in which case this
Lease shall not be treated as an asset of Tenant.
20. DEFAULT. The occurrence of any of the following shall constitute a default
by Tenant: (a) a failure to pay Rent or other charge when due provided that
Landlord shall not exercise any of its rights under this Section 20(a) until
Landlord has given Tenant notice of such default and Tenant has failed to
pay such rent or other charge within three (3) days of the effective date of
such notice; (b) abandonment and vacation of the Premises (failure to occupy
and operate the Premises for ten consecutive days while in default under
this Lease shall be conclusively deemed an abandonment and vacation); or (c)
failure to perform any other provision of this Lease, provided that Landlord
shall not exercise any of its rights under this Section 20(c) until Landlord
has given Tenant notice of such default and Tenant has failed to cure such
default and provided further that if more than thirty (30) days are required
to complete such performance, Landlord shall not exercise any of its rights
if Tenant commences to cure such default within the thirty (30) day period
and thereafter diligently pursues such cure completion. The notice required
by this Section is intended to satisfy any and all notice requirements
imposed by law on Landlord and is not in addition to any such requirement.
21. LANDLORD'S REMEDIES. Landlord shall have the following remedies if Tenant
is in default. (These remedies are not exclusive; they are cumulative and in
addition to any remedies now or later allowed by law): Landlord may
terminate Tenant's right to possession of the Premises at any time. No act
by Landlord other than giving notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises, or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession.
Upon termination of Tenant's right to possession, Landlord has the right to
recover from Tenant: (1) the worth of the unpaid Rent that had been earned
at the time of termination of Tenant's right to possession; (2) the worth of
the amount of the unpaid Rent that would have been earned after the date of
termination of Tenant's right to possession; (3) any other amount, including
but not limited to, expenses incurred to relet the Premises, court, attorney
and collection costs, necessary to compensate Landlord for all detriment
caused by Tenant's default. "The Worth," as used for Item (1) in this
Paragraph 21 is to be computed by allowing interest at the rate of 18
percent per annum. If the interest rate specified in this Lease is higher
than the rate permitted by law, the interest rate is hereby decreased to the
maximum legal interest rate permitted by law. "The Worth" as used for Item
(2) in this Paragraph 21 is to be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of
termination of
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Tenant's right of possession. Landlord shall use reasonable business
practices to mitigate any damages resulting from Tenant's breach.
22. ENTRY ON PREMISES. Landlord and its authorized representatives shall have
the right to enter the Premises at all reasonable times on reasonable notice
(except in an emergency, when no notice shall be required) for any of the
following purposes: (a) to determine whether the Premises are in good
condition and whether Tenant is complying with its obligations under this
Lease; (b) to do any necessary maintenance and to make any restoration to
the Premises or the Project that Landlord has the right or obligation to
perform; (c) to post "for sale" signs at any time during the term, to post
"for rent" or "for lease" signs during the last 90 days of the term, or
during any period while Tenant is in default; (d) to show the Premises to
prospective lenders, brokers, agents, or buyers at any time during the term;
(e) to show the Premises to prospective lessees during the last 120 days of
the term, or during any period while Tenant is in default; or (f) to repair,
maintain or improve the Project and to erect scaffolding and protective
barricades around and about the Premises but not so as to prevent entry to
the Premises and to do any other act or thing necessary for the safety or
preservation of the Premises or the Project. Landlord shall not be liable in
any manner for any inconvenience, disturbance, loss of business, nuisance or
other damage arising out of Landlord's entry onto the Premises as provided
in this Section 22. Tenant shall not be entitled to an abatement or
reduction of Rent if Landlord exercises any rights reserved in this Section
22, provided only that if any such entry renders all or part of the Premises
unusable for more than five (5) days, then rent shall abate as to the
portion rendered unusable until the Premises or the affected portion are
returned to usable condition. Landlord shall conduct its activities on the
Premises as provided herein in a commercially reasonable manner so as to
limit inconvenience, annoyance or disturbance to Tenant to the maximum
extent practicable. 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, provided that Tenant and Landlord shall consult
in good faith over the establishment of Tenant's security systems and
"secure" areas, and Landlord shall use reasonable best efforts to respect
such systems and areas. Tenant shall not alter any lock or install a new or
additional security system or lock or bolt on any door of the Premises
without prior written consent of Landlord. If Landlord gives its consent,
Tenant shall furnish Landlord with a key for any such lock or the code for
any such system.
23. SUBORDINATION. This Lease shall be automatically subordinate to all of
Landlord's mortgages or deeds of trust which heretofore and hereafter affect
the Premises or Building to any sale and leaseback to any and all advances
made or to be made thereunder, to the interest on the obligations secured
thereby, and to all renewals, modifications, consolidations, replacements or
extensions thereof. This subordination shall be self operative, and no
further instrument of subordination shall be necessary to effect such
subordination, provided that so long as Tenant is not in default hereunder
beyond the applicable Section 20 cure period, Tenant shall, have continued
enjoyment of the Premises free from any disturbance or interruption by
reason of any foreclosure of Lender's deed of trust or mortgage;
nevertheless, Tenant shall execute such additional instrument of
subordination as may be required by any Lender if such instrument of
subordination shall provide that so long as Tenant is not in default
hereunder beyond the applicable Section 20 cure period, Tenant shall have
continued enjoyment of the Premises free from any disturbance or
interruption by reason of any foreclosure of Lender's deed of trust or
mortgage. In the event of sale or foreclosure of any such mortgage or
18
deed of trust, or exercise of the power of sale thereunder, or in the event
of a transfer in lieu of foreclosure, Tenant shall attorn to the purchaser
(or transferee) of the Building at such foreclosure or sale and recognize
such purchaser (or transferee) as Landlord under this Lease if so requested
by such purchaser (or transferee). Such attornment shall be self operative
and no further instruments need be executed to effect such attornment. If
any Lender elects to have this Lease superior to its mortgage or deed of
trust and gives notice of its election to Tenant, then this Lease shall
thereupon become superior to the lien of such mortgage or deed of trust,
whether this Lease is dated or recorded before or after the mortgage or deed
of trust.
Tenant, within ten business days from notice from Landlord, shall execute
and deliver to Landlord, in recordable form, certificates stating that this
Lease is not in default, is unmodified and in full force and effect, or in
full force and effect as modified, and stating the modifications. This
certificate should also state the amount of current monthly Rent, the dates
to which Rent has been paid in advance, and the amount of any security
deposit and any unapplied Lease Consideration. Failure to deliver this
certificate to Landlord within ten days shall be conclusive upon Tenant that
this Lease is in full force and effect and has not been modified except as
may be represented by Landlord.
24. NOTICE. Any notice, demand or request required hereunder shall be given
in writing to the party's facsimile number or address set forth in Section 1
hereof by any of the following means: (a) personal service; (b) electronic
communication, whether by telex, telegram or facsimile; (c) overnight
courier; or (d) registered or certified, first class mail, return receipt
requested. Such addresses may be changed by notice to the other parties
given in the same manner as above provided. Any notice, demand or request
sent pursuant to either subsection (a) or (b) hereof shall be deemed
received upon such personal service or upon dispatch by electronic means
with electronic confirmation of receipt. Any notice, demand or request sent
pursuant to subsection (c) hereof shall be deemed received on the business
day immediately following deposit with the overnight courier and, if sent
pursuant to subsection (d), shall be deemed received forty-eight (48) hours
following deposit in the U.S. mail.
25. WAIVER. No delay or omission in the exercise of any right or remedy 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 shall constitute acceptance of the surrender of the
Premises and accomplish termination of the Lease. Landlord's consent to or
approval of any act by Tenant requiring Landlord's consent or approval shall
not be deemed to waive or render unnecessary Landlord's consent to or
approval of 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 the Lease. TENANT SPECIFICALLY
ACKNOWLEDGES AND AGREES THAT, WHERE TENANT HAS RECEIVED A NOTICE TO CURE
DEFAULT (WHETHER RENT OR NON-RENT), NO ACCEPTANCE BY LANDLORD OF RENT
(EXCEPT WHERE SUCH RENT CURES THE DEFAULT IN ITS ENTIRETY) SHALL BE DEEMED A
WAIVER OF SUCH NOTICE, AND, INCLUDING BUT WITHOUT LIMITATION, NO ACCEPTANCE
BY LANDLORD OF PARTIAL RENT SHALL BE DEEMED TO WAIVE OR CURE ANY RENT
DEFAULT. LANDLORD MAY, IN ITS DISCRETION, AFTER RECEIPT OF PARTIAL PAYMENT
OF RENT, REFUND SAME AND CONTINUE ANY PENDING ACTION TO COLLECT THE FULL
AMOUNT DUE, OR MAY MODIFY ITS DEMAND TO THE UNPAID PORTION. IN EITHER EVENT
THE DEFAULT SHALL BE
19
DEEMED UNCURED UNTIL THE FULL AMOUNT IS PAID IN GOOD FUNDS OR A NON-RENT
DEFAULT IS FULLY CURED.
26. SURRENDER OF PREMISES; HOLDING OVER. Upon expiration of the term, Tenant
shall surrender to Landlord the Premises and all Tenant improvements and
alterations in good condition, except for ordinary wear and tear,
alterations Tenant has the right or is obligated to remove under the
provisions of Section 14 herein, and damage caused by fire or other casualty
that is not Tenant's obligation under this Lease to repair. Tenant shall
remove all personal property including, without limitation, all wallpaper,
paneling and other decorative improvements or fixtures and shall perform all
restoration made necessary by the removal of any alterations or Tenant's
personal property before the expiration of the term, including for example,
restoring all wall surfaces to their condition prior to the commencement of
this Lease. Landlord can elect to retain or dispose of in any manner
Tenant's personal property not removed from the Premises by Tenant prior to
the expiration of the term. Tenant waives all claims against Landlord for
any damage to Tenant resulting from Landlord's retention or disposition of
Tenant's personal property. Tenant shall be liable to Landlord for
Landlord's cost for storage, removal or disposal of Tenant's personal
property.
If Tenant, with Landlord's consent, remains in possession of the Premises
after expiration or termination of the term, or after the date in any notice
given by Landlord to Tenant terminating this Lease, such possession by
Tenant shall be deemed to be a month-to-month tenancy terminable as provided
under Washington law, by either party. All provisions of this Lease, except
those pertaining to term and Rent, shall apply to the month- to-month
tenancy. During any holdover term, Tenant shall pay Base Monthly Rent in an
amount equal to 125% of Base Monthly Rent for the last full calendar month
during the regular term plus 100% of Tenant's share of Expenses pursuant to
Section 4.c.3.
27. LIMITATION OF LIABILITY. In consideration of the benefits accruing
hereunder, Tenant agrees that, in the event of any actual or alleged
failure, breach or default of this Lease by Landlord, if Landlord is a
partnership:
a. The sole and exclusive remedy shall be against the partnership
its partnership assets;
b. No partner of Landlord shall be sued or named as a party in any suit or
action;
c. No service of process shall be made against any partner of Landlord;
d. No partner of Landlord shall be required to answer or otherwise plead to
any service or process;
e. No judgment may be taken against any partner of Landlord;
f. Any judgment taken against any partner of Landlord shall be vacated and
set aside at any time without hearing;
g. No writ of execution will ever be levied against the assets of any
partner of Landlord;
h. These covenants and agreements are enforceable both by Landlord and also
by any partner of Landlord.
20
Tenant agrees that each of the foregoing provisions shall be applicable to
any covenant or agreement either expressly contained in this Lease or
imposed by statute or at common law.
28. BUILDING PLANNING. [intentionally deleted]
29. MISCELLANEOUS PROVISIONS.
a. TIME OF ESSENCE. Time is of the essence of each provision of this lease.
b. SUCCESSOR. This Lease shall be binding on and inure to the benefit of the
parties and their successors, except as provided in Section 19 herein.
c. LANDLORD'S CONSENT. Any consent required by Landlord under this Lease
shall not be effective unless and until granted in writing. Except with
respect to assignment or subletting or modification of the Permitted Use, no
consent by Landlord shall be unreasonably withheld or delayed and any
discretionary judgments of Landlord (as in allocation of costs) must be a
reasonable exercise of discretion. No consent of Tenant required hereunder
shall be unreasonably withheld or delayed.
d. COMMISSIONS. 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 identified in Section 1, who shall be
compensated by Landlord. Landlord and Tenant recognize that it is possible
that they may hereafter make additional agreements regarding further
extension or renewal of this Lease or a new lease or leases for all or one
or more parts of the Premises or other space in the Project for a term or
terms commencing after the Commencement Date of this Lease. Landlord and
Tenant recognize that it is also possible that they may hereafter modify
this Lease to add additional space or to substitute space as part of the
Premises. If any such additional agreements, new leases or modifications to
this Lease are made, Landlord shall not have any obligation to pay any
compensation to any real estate broker or to any other third person engaged
by Tenant to render services to Tenant in connection with negotiating such
matters, regardless of whether under the circumstances such person is or is
not regarded by the law as an agent of Landlord.
e. OTHER CHARGES. If either party commences any litigation against the other
party or files an appeal of a decision arising out of or in connection with
the Lease, the prevailing party shall be entitled to recover from the other
party reasonable attorney's fees and costs of suit. If Landlord employs a
collection agency to recover delinquent charges, Tenant agrees to pay all
collection agency and attorneys' fees charged to Landlord in addition to
Rent, late charges, interest and other sums payable under this Lease. Tenant
shall pay a charge of $75 to Landlord for preparation of a demand for
delinquent Rent.
f. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
the "Rules and Regulations", a copy of which is attached hereto, and all
reasonable and nondiscriminatory modifications thereof and additions thereto
from time to time put into effect by Landlord. Landlord shall not be
responsible to Tenant for the violation or non-performance by any other
tenant or occupant of the building or Project of said tenant or occupant's
lease or of any of said Rules and Regulations.
21
g. LANDLORD'S SUCCESSORS. In the event of a sale or conveyance by Landlord
of the Project, where the buyer or transferee assumes the liabilities of
Landlord hereunder, the transfer shall operate to release Landlord from any
liability under this Lease accruing after the date of transfer, and in such
event Landlord's successor in interest shall be solely responsible for all
obligations of Landlord under this Lease thereafter. If Landlord transfers
its interest in this Lease without transferring to its successor its
interest in the Escrow Account established pursuant to Section 5 and Exhibit
E, then Landlord shall indemnify and hold Tenant harmless from any claim by
such successor landlord that it is entitled to any disbursements from the
Escrow Account.
h. INTERPRETATION. This Lease shall be construed and interpreted in
accordance with the laws of the state in which the premises are located.
This Lease constitutes the entire agreement between the parties with respect
to the Premises and the Project, except for such guarantees or modifications
as may be executed in writing by the parties from time to time. When
required by the context of this Lease, the singular shall include the
plural, and the masculine shall include the feminine and/or neuter. "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.
30. RENEWAL OPTION
a. GRANT OF OPTION. Tenant is granted the right to extend the term of this
Lease beyond the expiration date of the initial Lease Term for one (1)
consecutive term of sixty (60) months (the "Extended Term"). If Tenant has
defaulted in its obligations under this Lease, and failed to cure such
defaults within any applicable cure period, then Tenant's right to extend
this Lease for the Extended Term shall automatically terminate. Tenant's
extension rights shall apply to all of the Premises under lease to Tenant on
the last day of the preceding term. Tenant's right to extend the term of
this Lease shall be personal and may not be exercised by any assignee or
sublessee (except an assignee or sublessee as to whom Landlord's consent may
not be withheld under the terms of Section 19).
b. LANDLORD'S ESTIMATE OF FAIR MARKET RENT. If Tenant so requests in writing
at any time after the forty-eighth (48th) monthly anniversary of the
Commencement Date, Landlord shall, within thirty (30) days of the request,
provide Tenant with a market study or rent comparison analysis prepared by
Landlord or by an established and experienced broker or appraiser, setting
forth an analysis of the Fair Market Rent for the Premises, together with
the underlying date on which such analysis is based. If Tenant wishes to
exercise Tenant's option to extend the Lease Term, then Tenant shall give
Landlord notice of such exercise not later than the fifty-second (52nd)
monthly anniversary of the Commencement Date, and in such notice shall elect
to have rent established pursuant to either subsection (c) below (CPI
Formula Adjustment) or subsection (d) below (Fair, Market Rent). From and
after the commencement of the Extended Term, all of the terms, covenants,
and conditions of the Lease shall continue in full force and effect as
written, except that Base Monthly Rent for the Extended Term shall be
established pursuant to subsection (c) or d) below, as elected by Tenant.
c. RENTAL RATE/CPI FORMULA ADJUSTMENT. If Tenant so elects in writing at the
time of exercising its right to extend the Lease Term, the Base Monthly Rent
for the Extended Term shall be adjusted (the "CPI Adjustment
22
Formula") based upon the increase in the Consumer Price Index, all Urban
Consumers, for the Seattle/Tacoma SMSA, published by the United States
Department of Labor, Bureau of Labor Statistics ("Index"), as follows. In
each computation, the "Beginning Index shall be the Index which is in effect
ninety (90) days prior to the Base Date and the "Extension Index" shall be
the Index that is in effect ninety (90) days prior to the date of rent
increase. For the first thirty-six (36) months of the Extended Term, rent
shall be set using a Base Date of the first day of the thirty-seventh (37th)
month of the initial Lease Term; on the first day of the thirty- seventh
(37) month of the Extended Term, there shall be an additional adjustment, in
which the Base Date shall be the first day of the Extended Term. For the
first thirty-six (36) months of the Extended Term, Base Monthly Rent shall
be increased to equal the product achieved by multiplying (i) Base Monthly
Rent due with respect to the thirty-seventh (37th) month of the initial
Lease Term plus sixteen cents ($0.16) times the Rentable Square Footage of
the Occupiable Mezzanine Space and plus seventy cents ($0.70) times the
Rentable Square Footage of Improved Mezzanine Space by (ii) a fraction, the
numerator of which is the Extension Index applicable to such adjustment and
the denominator of which is the Beginning Index applicable to such
adjustment. For the remaining twenty-four (24) months of the Extended Term,
Base Monthly Rent shall be increased to equal the product achieved by
multiplying the Base Monthly Rent due with respect to the first month of the
Extended Term by a fraction, the numerator of which is the Extension Index
applicable to such adjustment and the denominator of which is the Beginning
Index applicable to such adjustment. If, at any time, the method of
computing the Index is changed from that in effect when the Beginning Index
was established, then the Beginning Index and all Extension Indexes shall be
converted in accordance with the conversion factor published by the United
States Department of Labor, Bureau of Labor Statistics. If during the Term,
the Index is (a) discontinued or (b) revised without such a Conversion
Factor being so published, such other government index or computation with
which it is replaced shall be used in order to obtain substantially the same
result as would be obtained if the Index had not been discontinued or
revised.
d. FAIR MARKET RENT.
(i) DEFINITION/ESTIMATE. If Tenant does not elect the CPI Adjustment.
Formula, the Base Monthly Rent for the applicable Extended Term shall be
equal to ninety-five percent (95%) of the market rate for a sixty (60) month
term for comparably improved and located space in comparable buildings in
the Willows/Marymoor High-Tech/Office Park Market with comparable pass
throughs (the undiscounted rate being referred to herein as the "Fair Market
Rent"), provided that (i) Fair Market Rent of the Premises shall be valued
exclusive of improvements constructed by Tenant pursuant to Section 14, to
the extent such improvements have increased the rental value of the Premises
from that existing immediately prior to the improvement, and (ii) in no
event shall the Base Monthly Rent set pursuant to this Section 30 (d) be
less than the Base Monthly Rent (which does not include any Additional Rent
pursuant to Section 33) for the last month of the initial Lease term.
Landlord's initial estimate of Fair Market Rent shall be deemed the market
study set forth in subsection (b) above, or if Landlord has not previously
provided such estimate, then Landlord shall provide such an estimate within
thirty (30) days of Tenant's notice of election to extend. If Tenant
disagrees with such estimate, it shall advise Landlord in writing thereof
before thirty (30) days after the later of (i) Tenant's notice of election
to extend (if Landlord's estimate had previously been provided) or (ii)
23
Tenant's receipt of Landlord's estimate. If there is a disagreement on such
estimation, the parties shall promptly meet to attempt to resolve their
differences. If the differences as to Fair Market Rent are not resolved
within thirty (30) days after Tenant's notice of disagreement, then the
parties shall submit the matter to arbitration in accordance with the terms
of Section 30(d) (ii) so that Fair Market Rent is determined no later than
the first day of the Extended Term.
(ii) ARBITRATION. If the parties are unable to reach agreement on Fair
Market Rent during the period specified in Paragraph (i) of this Section
30(d), then within ten (10) days thereafter either party may advise the
other in writing of the name and address of its arbitrator. The arbitrator
shall be qualified as a real estate appraiser familiar with rental rates in
the Willows/Marymoor High-Tech Office Park Market who would qualify as an
expert witness. Within ten (10) days after receipt of such notice from the
initiating party (the "Instigator") designating its arbitrator, the other
party (the "Recipient") shall give notice to Instigator, specifying the name
and address of the person designated by Recipient to act as arbitrator on
its behalf who shall be similarly qualified. If Recipient fails to notify
Instigator of the appointment of its arbitrator, within or by the time above
specified, then the arbitrator appointed by Instigator shall be the
arbitrator or determine the issue. The duty of the arbitrator(s) shall be to
determine the Fair Market Rent based solely on rental rates for comparably
improved and located space in comparable buildings in the Willows/Marymoor
High Tech Office Park Market. If the two (2) arbitrators are so chosen the
arbitrators so chosen shall meet within ten (10) days after the second
arbitrator is appointed and, if within ten (10) days after such first
meeting the two arbitrators shall be unable to agree promptly upon a
determination of Fair Market Rent, they, themselves, shall appoint a third
arbitrator, who shall be a competent and impartial person with
qualifications similar to those required of the first two arbitrators. If
they are unable to agree upon such appointment within five (5) days after
expiration of said ten (10) day period, the third arbitrator shall be
selected by the parties themselves, if they can agree thereon, within a
further period of ten (10) days. If the parties do not so agree, then either
party, on behalf of both, may request appointment of such a qualified person
by the then presiding judge of King County Superior Court acting in his
private non-judicial capacity, and the other party shall not raise any
question as to such Judge's full power and jurisdiction to entertain the
application for and make the appointment, and the parties agree to indemnify
and hold the presiding judge fully and completely harmless from and against
all claims arising out of the presiding judge's appointment of an
arbitrator. The three (3) arbitrators shall decide the dispute, if it has
not been previously resolved, by following the procedure set forth in this
Section 30. Where the issue cannot be resolved by agreement between the two
arbitrators selected by Landlord and Tenant or settlement between the
parties during the course of arbitration, the issue shall be resolved by the
three arbitrators in accordance with the following procedure. The arbitrator
selected by each of the parties shall state in writing his determination of
the Fair Market Rent supported by the reasons therefor with counterpart
copies to each party. The arbitrators shall arrange for a simultaneous
exchange of such proposed resolutions. The role of the third arbitrator
shall be to select which of the two proposed resolutions most closely
approximates his determination of Fair Market Rent. The third arbitrator
shall have no right to propose a middle ground or
24
any modification of either of the two proposed resolutions. The resolution
he chooses as most closely approximating his determination shall constitute
the decision of the arbitrators and be final and binding upon the parties.
In the event of a failure, refusal or inability of any arbitrator to act,
his successor shall be appointed by him, but in the case of the third
arbitrator, his successor shall be appointed in the same manner as provided
for appointment of the third arbitrator. The arbitrators shall attempt to
decide the issue within ten (10) days after the appointment of the third
arbitrator. Any decision in which the arbitrator appointed by Landlord and
the arbitrator appointed by Tenant concur shall be binding and conclusive
upon the parties. Each party shall pay the fee and expenses of its
respective arbitrator and both shall share equally the fee and expenses of
the third arbitrator, if any, and the attorneys' fees and expenses of
counsel for the respective parties and of witnesses shall be paid by the
respective party engaging such counsel or calling such witnesses. The
arbitrators shall have the right to consult experts and competent
authorities with factual information or evidence pertaining to a
determination of Fair Market Rent, but any such consultation shall be made
in the presence of both parties with full right on their part to
cross-examine. The arbitrators shall render their decision and award in
writing with counterpart copies to each party. The arbitrators shall have no
power to modify the provisions of this Lease. Time is of the essence in this
Section 30.
31. RIGHT OF FIRST OPPORTUNITY. Landlord hereby grants Tenant the Right of
First Opportunity ("Right of First Opportunity") on all leasable space in
Building H of WestPark (the "RFO Space"), subordinate to any other pre-
existing Building H Tenants' rights as of the date of mutual execution of
this Lease (as of September 14, 1994, there were no such rights except a
renewal option for Kemco on 8275 154th, a renewal option for A.B. Dick on
8279 154th, and a right of first opportunity for A.B. Dick on 8275 154th and
on 8280 154th (the later being 702 Rentable Square Feet) ; Tenant must check
as of date of execution whether intervening rights have been created). This
Right of First Opportunity shall remain in effect until the RFO Space has
been leased by Tenant or a third party, at which time this Right of First
Opportunity shall terminate and be of no force and effect.
a. The Right of First Opportunity shall be subject to the following terms
and conditions:
(1) Landlord shall provide Tenant with a written notice at such time
as Landlord submits a lease proposal and completed space plan to a
third party to lease all or a portion of the RFO Space.
(2) Tenant shall have until the end of the fifth (5th) business day
after receipt of such notice within which to elect to take all of the
RFO Space identified in Landlord's notice, which election shall be in
writing, and received by Landlord within said five (5) business day
period.
(3) Failure of tenant to elect to take all of the RFO Space
identified in Landlord's notice within the five (5) business day
period in the manner set forth above shall be conclusively deemed a
waiver of that right to lease all or any part of the RFO Space.
(4) Tenant's exercise of a Right of First Opportunity is conditioned
on Tenant having not ever been in default under this Lease beyond any
25
applicable cure period and being in occupancy of the Premises: (a) on the
date Tenant elects in writing to exercise the Right of First Opportunity
and (b) on the date Tenant occupies the RFO Space.
b. If the Right of First Opportunity is exercised at the time and in the
manner as set forth above, Tenant shall take the RFO Space under all of the
terms and conditions of this Lease (except that there shall be no
Construction Allowance) and other provisions (including Tenant's Share)
shall automatically be amended to include the RFO Space, except that the
Base Monthly Rent for the RFO Space shall be at the lesser of (i) Landlord's
market rate for similarly improved space in the Project or (ii) a rate
equal to Fifty-Five Cents ($0.55) per Rentable Square Foot per month for
warehouse space and One Dollar Ten Cents ($1.10) per Rentable Square Foot
per month for office space, each amount increased by the increase in the
Index (as defined in Section 30) between the date ninety (90) days prior to
the Commencement Date and the date ninety (90) days prior to the date the
RFO space is added to the Premises.
Notwithstanding any other provision of this Section 31, Landlord shall be
entitled to renew the leases of existing Building H without having such
renewals subject to this Right of First Opportunity.
32. SIGNAGE. Tenant shall be allowed to install building signage at both the
approximate center of the building and on the East (154th Avenue N.E.) side
of Building H, provided that Tenant complies with Landlord's Signage
Regulations and obtains all necessary governmental permits and approvals.
33. MEZZANINE.
a. OCCUPATION OF UNIMPROVED SPACE/ADDITIONAL RENT. The Premises includes
approximately 4,574 Rentable Square Feet of shell Mezzanine Space that will
not be improved as of the Commencement Date. Tenant may, at any time during
the initial Lease Term, in its discretion, declare all or any portion of the
unimproved Mezzanine Space "Occupiable" for storage or other uses permitted
under applicable codes. Once Tenant has declared all or any portion of the
improved Mezzanine Space Occupiable, it shall remain Occupiable for the
remaining term of this Lease and any extensions, provided that upon
improvement of such space pursuant to subsection 33(b), such space shall
become Improved Mezzanine Space. Tenant shall pay Additional Rent on any
Occupiable Mezzanine Space at the rate of ten cents ($0.10) per Rentable
Square Foot during the initial Thirty-Six (36) Months of the Lease Term, and
at the rate of sixteen cents ($0.16) per Rentable Square Foot for the
balance of the initial Lease Term.
b. IMPROVEMENT OF MEZZANINE SPACE/ADDITIONAL RENT. Tenant shall be entitled
to improve all or any portion of the Mezzanine Space with improvements and
alterations reasonably approved by Landlord, utilizing a contractor
reasonably approved by Landlord. Upon request by Tenant, Landlord shall
reimburse Tenant for the actual out-of-pocket costs of such improvements,
not to exceed a total reimbursement of thirty dollars ($30.00) per Rentable
Square Foot of Mezzanine Space so improved (the "Mezzanine Allowance") ,
provided that (i) Tenant shall be entitled to utilize the Mezzanine
Allowance only if Tenant has not been in default under any material term of
this Lease more than twice in any twelve (12) month period, (ii) the
Mezzanine Allowance shall be paid in one lump sum payment upon substantial
completion of the improvements to the Mezzanine Space and release of any
contractor's lien claims thereto, (iii) such improvements shall be
substantially complete not later than the end of the thirty-fourth (34th)
month of the initial Lease Term, (iv) upon payment of the Mezzanine
Allowance, the improved space shall become Improved
26
Mezzanine Space, and (v) beginning with the first payment of Base Monthly
Rent coming due after payment of the Mezzanine Allowance, Tenant shall pay
Additional Rent on the Improved Mezzanine Space in the amount necessary to
amortize the Mezzanine Allowance actually paid by Landlord, with interest at
ten percent (10%) per annum from date of payment, the amortization to be in
equal monthly installments over the remaining months of the initial Lease
Term. The Additional Rent specified in the preceding sentence shall be in
lieu of any Additional Rent due under subsection (a) above.
Landlord: TEACHERS INSURANCE & ANNUITY ASSOCIATION
----------------------------------------
By Mark J. Wood
-----------------------------------
Its Mark J. Wood
Assistant Secretary
Tenant: NEOPATH, INC.
-----------------------------------------
By Alan C. Nelson
----------------------------------------
Alan C.Nelson
Its President
27
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
I certify that I know or have satisfactory evidence that Mark J. Wood is the
person who appeared before me, to be known to be the Assisant Secretary of
Teachers Insurance & Annuity Association, and said person acknowledged that
he signed this instrument, on oath stated that he was authorized to execute
the instrument and acknowledged it as the said instrument to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated: November 28, 1994
-----------------------------
Robert D. Loverro
-----------------------------------
(Signature)
Robert D. Loverro
-----------------------------------
(Print Name)
Notary Public in and for the
State of New York, residing
at ________________________________
My Commission Expires _____________
ROBERT D. LOVERRO
NOTARY PUBLIC, STATE OF N.Y.
NO. 01LO5018561
QUALIFIED IN NASSAU
COMM. EXPIRES 10/04/95
STATE OF WASHINGTON )
) SS.
COUNTY OF King )
(Signature)
I certify that I know or have satisfactory evidence that Alan Nelson is the
person who appeared before me, and said person acknowledged that (he/she)
signed this instrument, on oath stated that (he/she) was authorized to
execute the instrument and acknowledged it as the President of NeoPath, Inc. to
be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
Dated: 11/29/94
--------------------------
Judith A. Christiansen
--------------------------------
(Signature)
Judith A. Christiensen
--------------------------------
(Print Name)
Notary Public, in and for the
State of Washington, residing
at Seattle WA
My Commission Expires 1/31/96
28
SCHEDULE "A"
Amounts to be paid to T.I.A.A., due on the first (lst) day of each
designated month of the term of the Lease. Escrow Agent will be instructed
by T.I.A.A. and NeoPath (jointly in writing), at least one (1) month prior
to commencement of the Lease term, as to the first month of the Lease term
and the date of the first payment.
AMOUNT TO BE REQUIRED
MONTHS DISTRIBUTED BALANCE
1 $18,684 $217,277
6 11,837 205,440
11 25,680 179,760
12 25,680 154,080
18 25,680 128,400
23 25,680 102,720
24 25,680 77,040
30 25,680 51,360
35 25,680 25,680
36 25,680 -0-
29
EXHIBIT A
(The Premises)
30
EXHIBIT A-1
(The Premises)
31
EXHIBIT B
(The Project)
Cross hatched area denotes Project.
154TH AVE.
SAMMAMISH RIVER
LEGAL DESCRIPTION (Building H)
Lot 3 of City Redmond Short Plat No. SS-85-11,
recorded under Recording Number 8512260700,
said Short Plat being a subdivision of the
east half of the southwest quarter of Section
2, Township 25 north, Range 5 east, W.M., in
King County, Washington.
32
EXHIBIT C
(Tenant Sign Criteria)
WESTPARK
The following signage criteria has been established for the purpose of
allowing sufficient business identification for businesses locating within
WestPark. The criteria has also been established to provide maximum
continuity with the environment and an architectural integration with the
project. The signage guidelines are in accordance with the Redmond Community
Development Code, Section 20c.20.230.
I. In accordance with the previously established and adopted sign program for
WestPark, the following specifications outline more specifically the nature
of the intended signage.
A. Ground Monument
1. A ground monument may be located at the two locations along the
southeast corner of the property. The monument shall be designed to
identify the project only.
2. The monument shall be a double sided, seamless, monolithic monument
with metal faced letters permanently laminated to concrete structure.
The dimensions of the sign are 43" high, 168" long and 8" wide. The
graphics will be placed 18" from the top of the face.
3. The sign will have a concrete base 32" deep, 8" high and 192" long.
The re-bar will be cast in concrete base.
4. Monument sign color scheme to correspond with the building and be
approved by the City of Redmond.
B. Building Signage
1. Tenants' names will be limited to the upper facade of the individual
tenant space. First-floor-only tenants shall locate signage over main
entry doors where possible. Tenants on the second floor and
2-story tenants shall locate signage on the panel designated by
Landlord.
2. The letters for each tenant shall be 12" maximum, dimensional foam
letters painted of a color approved by the Landlord. The letters will
be mounted with adhesive directly to the building surface. Maximum
sign coverage will not exceed 25 square feet. Tenant signage may
contain more than one row of information provided that the total sign
area of 25 square feet is not exceeded and the number of rows of
information presents a professional appearance.
3. Logos for each tenant will be allowed and shall be included within the
25 square feet allowed within item 2 of this section. Maximum size is
limited to 24" high.
II. Additional Signage
A. No additional exterior signage shall be granted on the face of the
structure.
III. Approval of Tenant Signage for Building
A. With the submittal of each set of construction drawings for tenant
improvements, a request for approval to add the tenant's name to the
building shall be made.
B. If no tenant improvements are required, tenant shall submit copy of
signage layout to Landlord for final approval prior to subnfitting to
City for permit process.
33
EXHIBIT D
(Premises Condition)
BLDG/UNIT: H/8271
QUANTITY AND/OR SIZE
HEIGHT, LENGTH, ETC.
ITEM:
____ STANDARD IMPROVEMENTS ONLY
XX STANDARD IMPROVEMENTS PLUS THOSE SHOWN BELOW
- ----
PARTITIONS:
CEILINGS:
DOORS:
FLOOR COVERING:
PLUMBING:
LIGHTS:
SWITCHES:
WALL ELECTRICAL OUTLETS:
TELEPHONE OUTLETS:
AIR CONDITIONING OR VENT FAN:
AIR CONDITIONING HOOK UP:
WATER HEATER:
PAINTING:
OTHER: See space plan dated September 12, 1994 by Robert S. Miller & Associates
attached as Exhibit A and Exhibit A-1.
34
FIRST AMENDMENT TO LEASE
Date Change
That certain Lease dated October 1, 1994, by and between Teachers Insurance &
Annuity Association, a New York corporation, Landlord, and NeoPath, Inc., a
Washington corporation, Tenant, for the premises located at 8271 154th Avenue
N.E., Redmond, WA 98052, Building H, Unit 8271, is amended this 16th day of
February 1995, solely as hereinafter described by substituting the clauses below
in place of the like number clauses in the Lease.
1. TERM OF LEASE: Commencement: January 5, 1995
Expiration: December 31, 1999 Number of Months 60.
All other terms and conditions of said Lease shall remain in full force and
effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
date first written above.
Landlord: Teachers Insurance & Annuity Association
By:/s/James Garofalo
--------------------------------
James Garofalo
Its:Assistant Secretary
-------------------------------
Tenant: NeoPath, Inc.
By:/s/Alan C. Nelson
--------------------------------
Alan C. Nelson
Its:President
-------------------------------
STATE OF New York )
) ss.
COUNTY OF Nassau )
I certify that I know or have satisfactory evidence that James Garofalo
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 the Assistant Secretary of Teachers Insurance
& Annuity Association to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.
Dated: 2/28/96
--------------------------------------
/s/Maryanne Mazzone
---------------------------------------------
(Signature)
Maryanne Mazzone
---------------------------------------------
(Print Name)
(Notary Public, in and for the State of N.Y.,
residing at Lynbrook
My Commission Expires: 11-23-96
----------------------
STATE OF Washington )
) ss.
COUNTY OF King )
I certify that I know or have satisfactory evidence that Alan C. Nelson
is the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute the
instrument and acknowledged it as the President of NeoPath, Inc. to be the free
and voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated: 2-21-95
--------------------------------------
/s/Tanya M. Davis
---------------------------------------------
(Signature)
Tanya M. Davis
---------------------------------------------
(Print Name)
(Notary Public, in and for the State of W.A.,
residing at Seattle
My Commission Expires: 1-6-99
----------------------
SECOND AMENDMENT TO LEASE
This SECOND AMENDMENT TO LEASE (this "Second Amendment") is made this 21st
day of November, 1995 by and between TEACHERS INSURANCE & ANNUITY ASSOCIATION
("Landlord") and NEOPATH, INC. ("Tenant").
RECITALS
Landlord and Tenant are landlord and tenant under that certain lease dated
October 1, 1994 (the "Lease") for space in Building H, WestPark, Redmond,
Washington (the "Initial Premises").
Landlord and Tenant wish to provide for the amendment of the Lease to
provide tenant improvement allowances and to add to the Premises by adding
thereto the following spaces:
a. The space shown on Exhibit A in vertical shading (the "789 Space") and
consisting of an agreed 789 Rentable Square Feet;
b. The Space shown on Exhibit A in horizontal shading (the "Kemco Office
Space") and consisting of an agreed 2,760 Rentable Square Feet;
c. The space shown on Exhibit A in diagonal shading (the "Kemco Warehouse
Space") and consisting of an agreed 2,872 Rentable Square Feet; and
d. A new mezzanine to be constructed in the Kemco Warehouse Space (the
"Kemco Mezzanine") consisting of an agreed 2,872 Rentable Square Feet;
The 789 Space, the Kemco Office Space, the Kemco Warehouse Space, and the
New Kemco Mezzanine are referred to herein collectively as the "Second Amendment
Spaces"). The legal description of the Project and Building in which the Second
Amendment Spaces are located is attached hereto as Exhibit B.
AGREEMENT
Now, therefore, for good and valuable consideration, the parties hereto
agree as follows:
1. ADDITION OF 789 SPACE. On the Amendment Effective Date, the 789 Space
shall be deemed added to the Premises, Tenant's Share of Expenses shall be
increased to reflect the addition of the 789 Space, and the Base Monthly Rent
otherwise due under the Lease shall be increased for every remaining month of
the initial Lease Term by the following amounts: $395 from the Amendment
Effective Date through May 31, 1996; $1,097 (including the prior increase) from
June 1, 1996 through December 31, 1997; and by $1,155 (including the prior
increases) from January 1, 1998 through the end of the initial Lease term.
2. ADDITION OF KEMCO OFFICE SPACE. On the Amendment Effective Date, the
Kemco Office Space shall be deemed added to the Premises, Tenant's Share of
Expenses shall be increased to reflect the addition of the Kemco Office Space,
and the Base Monthly Rent otherwise due under the Lease shall be increased for
every remaining month of the initial Lease Term by the following amounts: $2,760
from the Amendment Effective Date through December 31, 1997; and by $2,906
(including the prior increase) from January 1, 1998 through the end of the
initial Lease term.
3. ADDITION OF KEMCO WAREHOUSE SPACE. On the Amendment Effective Date, the
Kemco Warehouse Space shall be deemed added to the Premises, Tenant's Share of
Expenses shall be increased to reflect the addition of the Kemco Warehouse
Space, and the Base Monthly Rent otherwise due under the Lease shall be
increased for every remaining month of the initial Lease Term by the following
amounts: $1,436 from the Amendment Effective Date through May 31, 1996; by
$2,714 (including the prior increase) from June 1, 1996 through July 31, 1996;
by $3,992 (including the prior increases) August 1, 1996 through December 31,
1997; and by $4,204 (including the prior increases) from January 1, 1998
through the end of the initial Lease term.
1
4. ADDITION OF THE KEMCO MEZZANINE. As provided in Section 6 below, Tenant
has agreed to construct the Kemco Mezzanine in the Kemco Warehouse Space.
Regardless of the completion of such construction, on June 1, 1996 (the "Kemco
Mezzanine Effective Date") the Kemco Mezzanine shall be deemed added to the
Premises, and the deemed rentable square footage of both the Premises and the
Project and Tenant's Share of Expenses shall be adjusted to reflect the addition
of the Kemco Mezzanine Space, and the Base Monthly Rent otherwise due under the
Lease for every remaining month of the initial Lease Term shall be increased by
$4,132.
5. CALCULATION OF LEASE SECTION 30 FORMULAE. For purposes of calculating
the CPI Adjustment Formula pursuant to Section 30.c of the Lease, the Base
Monthly Rent for the thirty-seventh (37th) month of the initial Lease Term,
accounting for the addition of the Second Amendment Spaces, shall be deemed to
be the Base Monthly Rent that would have been due under the Lease absent this
Second Amendment plus $11,337. For the purposes of calculating the "Base Monthly
Rent for the last month of the initial Lease Term" that is the minimum Base
Monthly Rent pursuant to Section 30.d of the Lease, the Base Monthly Rent for
the last month of the initial Lease Term, accounting for the addition of the
Second Amendment Spaces, shall be deemed to be the Base Monthly Rent that would
have been due under the Lease absent this Second Amendment plus $11,337.
6. IMPROVEMENTS TO THE SECOND AMENDMENT SPACES. Landlord shall deliver the
Second Amendment Spaces to Tenant broom clean but otherwise "as is" and
unimproved except such improvements as may exist on the date of full execution
of this Lease (and subject to Kemco's right to remove its furniture, fixtures
and equipment). Landlord shall make up to One Hundred Ninety-Eight Thousand Four
Hundred Ninety Dollars ($198,490) (the "Second Amendment Tenant Improvement
Allowance") available to Tenant to reimburse Tenant for actual out-of-pocket
costs of designing, permitting, coordinating and constructing tenant
improvements to the Second Amendment Spaces pursuant to plans reasonably
approved by Landlord. Tenant agrees that the improvements to the Second
Amendment Spaces shall include construction of the Kemco Mezzanine to a level
suitable for general office use. Landlord shall pay the Second Amendment Spaces
Tenant Improvement Allowance to Tenant in two (2) equal installments payable
June 1, 1996 and August 1, 1996, provided that Tenant shall, prior to each such
date, submit to Landlord invoices showing actual out-of-pocket expenditures by
Tenant at least equal to the total amounts being drawn.
7. CONTINGENCY. This Second Amendment is contingent on Landlord obtaining
from Kemeo a fully executed lease satisfactory to Landlord in its discretion
allowing relocation of Kemco out of the Kemco Office Space and Kemco Warehouse
Space. If this contingency is not satisfied on or before December 1, 1995, then
this Second Amendment shall be deemed null and void, and neither party shall
have any further right against the other with respect thereto.
8. AMENDMENT EFFECTIVE DATE. As used herein, the "Amendment Effective Date"
shall mean the later of January 1, 1996 or the date Landlord delivers possession
of both the Kemco Office Space and the Kemco Warehouse Space, provided that
Landlord shall deliver possession of both the Kemco Office Space and the Kemco
Warehouse Space not later than February 1, 1996.
9. NO OTHER AMENDMENT. Except as provided in this Second Amendment, the
Lease is and remains unamended and in full force and effect.
2
LANDLORD:
TEACHERS INSURANCE & ANNUITY
ASSOCIATION
By:
---------------------------------
James Garofalo
Its:
--------------------------------
Assistant Secretary
TENANT:
NEOPATH, INC.
By: /s/ Alan Nelson
---------------------------------
Alan Nelson
Its: President
--------------------------------
STATE OF ______________)
)ss.
COUNTY OF _____________)
I certify that I know or have satisfactory evidence that James Garofalo
signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it in his capacity as Assistant Secretary of
TEACHERS INSURANCE & ANNUITY ASSOCIATION to be the free and voluntary act of
such party for the uses and purposes mentioned in the instrument.
Dated this ___________ day of __________________, 1995.
----------------------------------
(Signature)
----------------------------------
(Print Name)
Notary Public, in and for the State
of ______, residing at ____________
My Commission Expires _____________
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Alan Nelson
signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it in his capacity as President of NEOPATH, INC. to
be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
Dated this 6th day of December, 1995
/s/ Shawn E. Kennedy
----------------------------------
(Signature)
Shawn E. Kennedy
----------------------------------
(Print Name)
Notary Public, in and for the State
of Washington, residing at Monroe
My Commission Expires 11-20-96
3
EXHIBIT A
[FIRST FLOOR PLAN MAP]
FIRST FLOOR PLAN
--------------------
WESTPARK BUILDING H
THIRD AMENDMENT TO LEASE ADDITION OF SQUARE FEET
Teachers Insurance and Annuity Association, a New York corporation,
Landlord and Neopath, Inc., a Washington corporation Tenant, being parties to
that certain Lease dated October 1, 1997 for premises located at 8271 154th
avenue NE, Redmond, WA 98052 Building H, Units 8271 is amended this 6th day of
November, 1997 solely as hereinafter described.
Effective the 15th day of May, 1998, the portions of the Lease below shall
be amended as follows:
1. b. TENANT: Neopath, Inc., a Washington Corporation
Address (Leased Premises): 8271 154th Avenue NE, Redmond WA 98052
and 8210 154th Avenue NE, Redmond WA 98052
Building/Units: H/8271, and K/8210
Address (For Notices): 8271 154th Avenue NE, Redmond WA 98052
Building H Building K
8271 154th Avenue NE 8210 154th Avenue NE
Redmond WA 98052 Redmond WA 98052
e. PREMISES AREA: 39,064 rentable sq. ft. 30,000 rentable sq. ft.
f. PROJECT AREA: 42,172 rentable sq. ft. 52,153 rentable sq. ft.
g. TERM OF LEASE: Commencement: January 15, 1995 Commencement: May 15, 1998
Expiration: December 31, 1999 Expiration: December 31, 1999
h. BASE MONTHLY Effective Dates Base Monthly Effective Dates Base Monthly
RENT: Rent Rent
1st Month $0.00 5/15/98 through
2nd through 5th $11,837.00 12/31/99 $24,900.00
6th $0.00
7th through 10th $25,680.00
11th through 12th $0.00
13th through 17th $30,271.00
18th month $10,703.00
19th month $36,383.00
20th through 22nd $37,661.00
23rd through 24th $11,981.00
25th through 29th $37,661.00
3Oth month $11,981.00
31st through 34th $37,661.00
35th through 36th $11,981.00
37th through 60th $39,441.00
2. a. PREMISES: Landlord leases to Tenant the additional expansion premises as
shown on Exhibit A-l, (the "Expansion Premises"). Landlord reserves the
right to modify Tenant's percentage of the Project as set forth in
Section 1 if the Project size is increased through the development of
additional property. By entry on the Premises, Tenant acknowledges that it
has examined the Premises and accepts the Premises in their present
condition, subject to any additional work Landlord has agreed to do.
All other terms and conditions of the above described Lease shall remain in full
force and effect.
Landlord: Teachers Insurance & Annuity Association
By: /s/ James Garofalo
---------------------------------------------
James Garofalo
Its: Assistant Secretary
Tenant: Neopath, Inc. a Washington corporation
By: /s/ William Scott
---------------------------------------------
William Scott
Its: VP-CFO
STATE OF New York )
)ss.
COUNTY OF New York )
I certify that I know or have satisfactory evidence that James Garofalo is
the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute the
instrument and acknowledge it as the Assistant Secretary of Teachers Insurance &
Annuity Association to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
Dated: December 22, 1997
/s/ Gladys Bolella
------------------------------
(Signature)
GLADYS BOLELLA
Notary Public, State of N.Y.
No. 01 B04922705
Qualified in Rich County
Commission Expires 3/14/98
------------------------------
(Print Name)
Notary Public, in and for the State
of Washington, residing at ________
My Commission Expires _____________
STATE OF WASHINGTON )
)ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that William Scott is the
person who appeared before me, and said person acknowledged that he/she signed
this instrument, on oath stated that he/she was authorized to execute the
instrument and acknowledge it as the Chief Financial Officer of Neopath, Inc. to
be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.
Dated: November 20, 1997
[NOTARY OF JUDITH E. SIME]
/s/ Judith E. Sime
------------------------------
(Signature)
Judith E. Sime
------------------------------
(Print Name)
Notary Public, in and for the State
of Washington, residing at
8271 - 154th Avenue
Redmond, WA
My Commission Expires 2-24-99
EXHIBIT A-1
(The Expansion Premises)
[WESTPARK BUILDING K PLAN]
[8214] [8210]
[8220] [8218] [8216] [8210]
WESTPARK BUILDING K
FOURTH AMENDMENT TO LEASE
ADDITION OF SQUARE FEET
TIAA Realty Inc., a Delaware corporation, as successor to Teachers Insurance and
Annuity Association, Landlord and Neopath, Inc., A Washington Corporation
Tenant, being parties to that certain Lease dated October 1, 1994 for premises
located at 8271 154th Avenue NE, Redmond, WA 98052 Building H, Units 8271 is
amended this 15th day of October, 1998 solely as hereinafter described.
Effective the 1st day of February, 1999, the portions of the Lease below
shall be amended as follows:
1. b. TENANT: Neopath, Inc., A Washington Corporation
Address (Leased Premises): 8271 154th Avenue NE, Redmond, WA 98052
& 8210 154th Avenue NE, Redmond, WA 98052
& 8279 154th Avenue NE, Redmond, WA 98052
Building/Units: H/8271, K/8210, and H/8279
Address (For Notices): 8271 154th Avenue NE, Redmond, WA 98052
Building H Building K
8271 & 8279 154th Ave NE 8210 154th Ave NE
Redmond, WA 98052 Redmond, WA 98052
e. PREMISES AREA: 42,172 Rentable Sq. Ft. 30,000 Rentable Sq. Ft.
f. PROJECT AREA: 42,172 Rentable Sq. Ft. 52,153 Rentable Sq. Ft.
g. TERM OF LEASE: Commencement 1/15/95 Commencement: 5/15/98
Expiration: 12/31/99 Expiration: 12/31/99
h. BASE MONTHLY RENT:
Base Monthly Base Monthly
Effective Date Rent Effective Date Rent
1st month $0.00 5/15/98 through
2nd through 5th $11,837.00 12/31/99 $24,900.00
6th month $0.00
7th through 10th $25,680.00
11th through 12th $0.00
13th through 17th $30,271.00
18th month $10,703.00
19th month $36,383.00
20th through 22nd $37,661.00
23rd through 24th $11,981.00
25th through 29th $37,661.00
30th month $11,981.00
31st through 34th $37,661.00
35th through 36th $11,981.00
37th through 49th $39,441.00
50th through 60th $42,829.00
2. a. PREMISES: Landlord leases to Tenant the additional expansion
premises as shown on Exhibit A-1, (the "Expansion Premises").
Landlord reserves the right to modify Tenant's percentage of the
Project as set forth in Section 1 if the Project size is increased
through the development of additional property. By entry on the
Premises, Tenant acknowledges that it has examined the Premises
and accepts the Premises in their present condition, subject to
any additional work Landlord has agreed to do.
All other terms and conditions of the above described Lease shall remain in
full force and effect.
Landlord: TIAA REALTY INC., a Delaware corporation
By: Teachers Insurance and Annuity Association
of America, a New York Corporation, its
authorized represents.
By: /s/ James Garofalo
-------------------------------------------
James Garofalo
Its: Assistant Secretary
-------------------------------------------
Tenant: Neopath, Inc. a Washington corporation
By: /s/ David H. Robison
------------------------------------------
David H. Robison
Its: Vice President Operations
------------------------------------------
EXHIBIT A-1
(The Expansion Premises)
FIFTH AMENDMENT TO LEASE
THIS FIFTH AMENDMENT TO LEASE (the "Fifth Amendment") is made as of this
29th of September, 1999 between NEOPATH, INC., a Washington corporation,
("Tenant") and TIAA REALTY, INC., a Delaware corporation, as successor to
Teachers Insurance and Annuity Association ("Landlord").
RECITALS
A. Landlord and Tenant are parties to that certain Lease dated October
1994, as amended by First Amendment to Lease, Second Amendment to Lease, Third
Amendment to Lease, Fourth Amendment to Lease (collectively, the "Lease") for
lease of certain premises commonly known as Building H and Building K, WestPark
in Redmond, Washington, as more particularly described in the Lease.
B. The parties wish to amend certain provisions of the Lease as more
particularly provided herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. INSURANCE. Section 16 of the Lease is hereby amended to require that
the single combined liability limit to be provided by Tenant Shall be increased
from $1,000,000 to $2,000,000, effective as of October 1, 1999.
2. MEZZANINE IMPROVEMENT PAYMENTS. Landlord and Tenant agree that
Landlord constructed certain improvements to the Mezzanine Space as defined
in Section 33 of the Lease, and that as of the date of this Fifth Amendment
Tenant owes Landlord the amount of $126,780 as reimbursement for the costs of
such improvements (the "Mezzanine Reimbursement"), together with accrued and
unpaid interest on the Mezzanine Reimbursement in the amount of $27,923.90
("Interest"). No later than the end of business on October 1, 1999, Tenant shall
pay to Landlord the full amount of the Interest. Section 33 of the Lease is
hereby amended to provide that commencing October 1, 1999, and continuing on the
first day of each month thereafter, until paid in full, as Additional Rent,
Tenant shall pay to Landlord the Mezzanine Reimbursement, amortized over a
twelve month period at the rate of 12% per annum, in the amount of $11,264.25
per month. A failure of Tenant to pay the monthly amount of the Mezzanine
Reimbursement as Additional Rent shall be a default under the Lease.
3. EXTENDED TERM OF THE LEASE: Tenant has exercised its option to extend
the term of the Lease an additional 60 months, and the Extended Term shall
commence on January 1, 2000, and shall terminate on December 31, 2004.
1
4. RENT ADJUSTMENT. During the Extended Term, Base Monthly Rent shall be
adjusted as provided in Section 30(c) of the Lease, on the first and thirty
seventh month of the Extended Term, modified as follows. The fourth sentence of
Section 30(c) of the Lease is hereby deleted in its entirety, and the following
is substituted:
For the first thirty-six (36) months of the Extended Term, Base Monthly
Rent shall be increased to equal the product achieved by multiplying Base
Monthly Rent due with respect to the thirty-seventh (37th) month of the initial
Lease Term by a fraction, the numerator of which is the Extension Index
applicable to such adjustment and the denominator of which is the Beginning
Index applicable to such adjustment.
5. RATIFICATION. Except as expressly modified by this Fifth Amendment,
all other terms, covenants and conditions of the Lease shall remain in full
force and effect and are hereby ratified by the parties.
LANDLORD:
TIAA REALTY, INC., a Delaware corporation
By: Teachers Insurance and Annuity Association
of America, a New York corporation
Its: Authorized Representative
By: /s/ James Garofalo
---------------------------------------
James Garofalo
Its: Assistant Secretary
Date:
TENANT:
NEOPATH, INC., a Washington
corporation
By: /s/ David H. Robison
---------------------------------------
David H. Robison
Its: Vice President, Operations
2
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
I certify that I know or have satisfactory evidence that James Garofalo 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 acknowledge it as the Assistant Secretary of Teachers Insurance & Annuity
Association to be the free and voluntary act of such party for the uses and
purposes mentioned in the instrument.
Dated: October 19, 1999
/s/ Marian Useloff
-------------------------------------
(Signature)
Marian Useloff
-------------------------------------
(Printed Name)
Notary Public in and for the State of
New York, residing at NY Co.
My commission expires 3/30/00.
STATE OF WASH. ) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that David Robison 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 acknowledge it as the Vice President of Neopath, Inc. to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated: 9-30-99
/s/ Susan W. Lubash
------------------------------------
(Signature)
Susan W. Lubash
------------------------------------
(Printed Name)
Notary Public in and for the State
of WASH., residing at Redmond.
My commission expires 3-29-01.
3