OFFICE BUILDING LEASE
TABLE OF CONTENTS
PAGE
----
Article 1 LEASE OF PREMISES 3
Article 2 DEFINITIONS 3
Article 3 EXHIBITS AND ADDENDA 4
Article 4 DELIVERY OF POSSESSION 4
Article 5 RENT 5
Article 6 INTEREST AND LATE CHARGE 6
Article 7 SECURITY DEPOSIT 6
Article 8 TENANT'S USE OF THE PREMISES 6
Article 9 SERVICES AND UTILITIES 6
Article 10 CONDITION OF THE PREMISES 7
Article 11 CONSTRUCTION, REPAIRS AND MAINTENANCE 7
Article 12 ALTERATIONS AND ADDITIONS 8
Article 13 LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY 9
Article 14 RULES AND REGULATIONS 9
Article 15 CERTAIN RIGHTS RESERVED BY LANDLORD 9
Article 16 ASSIGNMENT AND SUBLETTING 10
Article 17 HOLDING OVER 11
Article 18 SURRENDER OF PREMISES 1l
Article 19 DESTRUCTION OR DAMAGE 11
Article 20 EMINENT DOMAIN 12
Article 21 INDEMNIFICATION 12
Article 22 TENANT'S INSURANCE 13
Article 23 WAIVER OF SUBROGATION 14
Article 24 SUBORDINATION AND ATTORNMENT 14
Article 25 TENANANT ESTOPPEL CERTIFICATES 14
ARTICLE 26 TRANSFER OF LANDLORD'S INTEREST 14
Article 27 DEFAULT 15
Article 28 BROKERAGE FEES 16
Article 29 NOTICES 17
Article 30 GOVERNMENT ENERGY OR UTILITY CONTROLS 17
Article 31 RELOCATION OF PREMISES 17
Article 32 QUIET ENJOYMENT 17
Article 33 OBSERVANCE OF LAW 17
Article 34 FORCE MAJEURE' 17
Article 35 CURING TENANTS DEFAULT 18
Article 36 SIGN CONTROL 18
Article 37 HAZARDOUS WASTE 18
Article 38 MISCELLANEOUS 19
Article 39 OPTION TO EXTEND LEASE TERM 20
ACKNOWLEDGMENT OF LESSOR 22
ACKNOWLEDGMENT OF LESSEE (CORPORATE) 23
EXHIBIT A - FLOOR PLAN OF PREMISES 24
EXHIBIT B - LEGAL DESCRIPTION 25
EXHIBIT C - WORK LETTER 26
EXHIBIT D - RULES AND REGULATIONS 30
2
OFFICE BUILDING LEASE
This Lease between The Bartell Drug Company ("Landlord"), and Pacific Trail,
Inc. ("Tenant") is dated August 23, 1994
1. LEASE OF PREMISES.
In consideration of the Rent (as defined at Section 5.4) and the provisions of
this Lease, Landlord leases to Tenant and Tenant leases from Landlord the
Premises shown by diagonal lines on the floor plan attached hereto as Exhibit
"A," and further described at Section 2.1. The Premises are located within the
Building and Project described in Section 2m. Tenant shall have the
non-exclusive right (unless otherwise provided herein) in common with Landlord,
other tenants, subtenants and invitees to use the Common Areas (as defined at
Section 2e).
2. DEFINITIONS
As used in this Lease, the following terms shall have the following meanings:
a. Base Rent: $ 329,657.51 per year
b. Base Year: The calendar year of 1995
c. Brokers:
Landlord's: Chiles & Company, Inc./Donoghue & Associates
Tenant's: Cushman and Wakefield
d. Commencement Date: March 1, 1995
e. Common Areas: the building lobbies, common corridors and hallways, common
area restrooms and parking areas, stairways, elevators and other generally
understood public or common areas. Landlord shall have the right to
regulate or restrict the use of the Common Areas.
f. Expense Stop: S NONE (No Pass Through Expenses)
g. Expiration Date: 2/29/2000, unless otherwise sooner terminated or extended.
h. Index (section 5.2): United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index for All Urban Consumers, Seattle Washington
Average, Subgroup "All Items"
i. Landlord's Mailing Address:
(Rent Remittance) The Bartell Drug Company
4727 Denver Avenue South
Seattle, WA 98134
(All other Correspondence
and Documentation) Chiles & Company, Inc.
70l Fifth Avenue
670l Columbia Seafirst Center
Seattle, WA 98104
3
TENANT'S MAILING ADDRESS: COPY TO:
Mike Green Mark Goldstone, Esq., General Counsel
Pacific Trail, Inc.- London Fog Industries
1310 Mercer Street 1332 Londontown Boulevard
Seattle, WA 98109 Eldersburg, MD 21784-2395
j. Monthly Installments of Base Rent: $27,471.46 per month for first 12 months
(one month free rent credited at the twelfth month)
k. Parking: Tenant shall be permitted to park up to 35 cars, $40/uncovered,
$50/covered-rental for one year only, and market rate thereafter-on a
non-exclusive basis in the area(s) designated by Landlord for parking.
Tenant shall abide by any and all parking regulations and rules established
from time to time by Landlord or Landlord's parking operator.
1. Premises: That portion of the Building containing approximately 17,563
square feet of Rentable Area, shown by diagonal lines on Exhibit "A,"
located on the 1st & 2nd floor(s) of the Building and known as Suite 200
and Suite 100.
m. Project: The building of which the Premises are a great part (the
"Building") and any other buildings or improvement on the real property
(the "Property'), excluding marina, located at 1700 Westlake Avenue North -
Seattle, WA and further described as Exhibit "B". The Project is known as
THE LAKE UNION BUILDING.
n. Rentable Area: As to both the Premises and the Project, the respective
measurements of floor area as may from time to time be subject to lease by
Tenant and all tenants of the Project, respectively, as determined by
Landlord and applied on a consistent basis throughout the Project.
o. Security Deposit (Article 7): $ WAIVED
p. State: The State of Washington.
q. Tenant's Adjustment Date (Section 5.2): The first day of the calendar month
following the Commencement Date plus 12 months.
r. Tenant's Use Clause (Article 8): General office space, design,
administration, and sample apparel making.
s. Term: The Period commencing on the Commencement Date and expiring at
midnight on the Expiration Date.
3. EXHIBITS AND ADDENDA.
The exhibits and addenda listed below (unless lined out) are incorporated by
reference in this Lease.
a. Exhibit "A" - Floor Plan showing the Premises.
b. Exhibit "B" - Legal Description.
c. Exhibit "C' - Work Letter.
d. Exhibit "D"- Rules and Regulations.
4. DELIVERY OF POSSESSION.
If for any reason Landlord does not deliver possession of the Premises to Tenant
on the Commencement Date, Landlord shall not be subject to any liability for
such failure, the Expiration Date shall not change and the validity of this
Lease shall not be impaired, but Rent shall be abated until delivery of
possession. "Delivery of possession" shall
4
be deemed to occur on the date Landlord completes Landlord's Work as defined in
Exhibit "C." If Landlord permits Tenant to enter into possession of the Premises
before the Commencement Date, such possession shall be subject to the provisions
of this Lease, including, without limitation, the payment of Rent.
5. RENT
5.1 Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises.
Tenant shall pay Landlord the first month's Base Rent when Tenant executes
the Lease.
5.2 ADJUSTED BASE RENT.
a. The Base Rent (and the corresponding Monthly Installment of Base Rent) set
forth at Section 2a shall be adjusted annually (the "Adjustment Date"),
commencing on Tenant's Adjustment Date. Adjustments, if any, shall be based
upon increases (if any) in the index, and shall not exceed 5% for any
annual adjustment. The index in publication three (3) months before the
Commencement Date shall be the "Base Index." The index in publication three
(3) months before each Adjustment Date shall be the "Comparison Index." As
of each Adjustment Date, the Base Rent payable during the ensuing
twelve-month period shall be determined by increasing the Base Rent by a
percentage equal to or less than the Comparison Index for the preceding
Adjustment Date (or the Base Index) the Base Rent for the ensuing
twelve-month period shall remain the amount of the Base Rent payable during
the preceding twelve-month period. When the Base Rent payable as of each
Adjustment Date is determined, Landlord shall promptly give Tenant written
notice of such adjusted Base Rent and the manner in which it was computed.
The Base Rent as so adjusted from time to time shall be the "Base Rent" for
all purposes under this Lease.
b. If at any Adjustment Date the index no longer exists in the form described
in this Lease, Landlord may substitute any substantially equivalent
official index published by the Bureau of Labor Statistics or its
successor. Landlord shall use any appropriate conversion factors to
accomplish such substitution. The substitute index shall then become the
"index" hereunder.
5.3 Definition of Rent. All costs and expenses which Tenant assumes or agrees
to pay to Landlord (other than base rent) under this Lease shall be deemed
additional rent (which, together with the Base Rent is sometimes referred
to as the "Rent"). The Rent shall be paid to The Bartell Drug Company (or
other person) and at such place, as Landlord may from time to time
designate in writing, without any prior demand therefore and without
deduction or offset, in lawful money of the United States of America.
5.4 Rent Control. If the amount of Rent or any other payment due under this
Lease violates the terms of any government restrictions on such Rent or
payment, then the Rent or payment due during the period of such
restrictions shall be the maximum amount allowable under those
restrictions. Upon termination of the restrictions, Landlord shall, to the
extent it is legally permitted, recover from the Tenant the difference
between the amounts received during the period of the restrictions and the
amounts Landlord would have received had there been no restrictions.
5.5 Taxes Payable by Tenant. In addition to the Rent and any other charges to
be paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand
for any and all taxes payable by Landlord (other than net income taxes)
which are not otherwise reimbursable under this Lease, whether or not now
customary or within the contemplation of the parties, where such taxes are
upon, measured by or reasonably attributable to (a) the cost or value of
Tenant's equipment, furniture, fixtures and other personal property located
in the Premises, or the cost or value of any leasehold improvements made in
or to the Premises by or for Tenant, other than Building Standard Work made
by Landlord, regardless of whether title to such improvements performed
after initial occupancy is held by Tenant or Landlord; (b)the gross or net
Rent payable under this Lease, including, without limitation, any rental or
gross receipts tax levied by any taxing authority 'with respect to the
receipt of the Rent hereunder; (c) the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of
the Premises or any portion thereof; or (d) this transaction or any
document to which Tenant is a party creating or transferring an interest or
an estate in the Premises. If it becomes unlawful for Tenant to reimburse
Landlord for any costs as required under this Lease, the Base Rent shall be
revised to net Landlord the same net Rent after imposition of any tax or
other charge upon Landlord as would have been payable to Landlord but for
the reimbursement being unlawful.
5
6. INTEREST AND LATE CHARGES
If Tenant fails to pay when due Rent or other amounts or charges which Tenant is
obligated to pay under the terms of this Lease, the unpaid amounts shall bear
interest at the maximum rate then allowed by law. Tenant acknowledges that the
late payment of any Monthly Installment of Base Rent will cause Landlord to lose
the use of that money and incur costs and expenses not contemplated under this
Lease, including without limitation, administrative and collection costs and
processing and accounting expenses, the exact amount of which is extremely
difficult to ascertain. Therefore, in addition to interest, if any such
installment is not received by, Landlord within ten (10) days from the date it
is due, Tenant shall pay Landlord a late charge equal to ten percent (10%) of
such installment. Landlord and Tenant agree that this late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the loss suffered from such nonpayment by Tenant. Acceptance of any
interest or late charge shall not constitute a waiver of Tenant's default with
respect to such nonpayment by Tenant nor prevent Landlord from exercising any
other rights or remedies available to Landlord under this Lease.
7. SECURITY DEPOSIT. (Paragraph deleted)
8. TENANT'S USE OF THE PREMISES.
Tenant shall use the Premises solely for purposes of general office space,
administration, design and apparel sample making. Tenant shall not use or occupy
the Premises in violation of law or any covenant, condition or restriction
affecting the Building or Project or the certificate of occupancy issued for the
Building or Project, and shall, upon notice from Landlord, immediately
discontinue any use of the Premises which is declared by any governmental
authority having jurisdiction to be a violation of law or of occupancy. Tenant,
at Tenant's own cost and expense, shall comply with all laws, ordinances,
regulations, rules and/or any directions of any governmental agencies or
authorities having jurisdiction which shall, by reason of the nature of Tenant's
use or occupancy of the Premises, impose any duty upon Tenant or Landlord with
respect to the Premises or its use or occupation. A judgment of any court of
competent jurisdiction or the admission by Tenant in any action or proceeding
against Tenant that Tenant has violated any such laws, ordinances, regulations,
rules and/or any directions of any governmental agencies or authorities having
jurisdiction which shall, by reason of the nature of Tenant's use or occupancy
of the Premises, impose any duty upon Tenant or Landlord with respect to the
Premises or its use or occupation. A judgment of any court of competent
jurisdiction or the admission by Tenant in any action or proceeding against
Tenant that Tenant has violated any such laws, ordinances, regulations, rules
and/or directions in the use of the Premises shall be deemed to be a conclusive
determination of that fact as between Landlord and Tenant. Tenant shall not do
or permit to be done anything which will invalidate or increase the cost of any
fire, extended coverage or other insurance policy covering the Building or
Project and/or property located therein, and shall comply with all rules,
orders, regulations, requirements and recommendations of the Insurance Services
Office or any other organization performing a similar function. Tenant shall
promptly upon demand reimburse Landlord for any additional premium charged for
such policy by reason of Tenant's failure to comply with the provisions of this
Article. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of other
tenants or occupants of the Building or Project or injure or annoy them, or use
or allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises. Tenant shall not commit or suffer to be committed
any waste in or upon the Premises.
9. SERVICES AND UTILITIES.
Provided that Tenant is not in default hereunder, Landlord agrees to furnish to
the Premises during generally recognized business days, and during hours
determined by Landlord in its sole discretion, and subject to the Rules and
Regulations of the Building or Project, electricity for normal desk top office
equipment and normal copying equipment, and heating, ventilation and air
conditions ("HVAC") as required in Landlord's judgment for the comfortable use
and occupancy of the Premises. If Tenant desires HVAC at any other time,
Landlord shall use reasonable efforts to furnish such service upon reasonable
notice from Tenant and Tenant shall pay Landlord's charges therefore on demand.
Landlord shall also maintain and keep lighted the common stairs, common entries
and restrooms in the Building. Landlord shall not be in default hereunder or be
liable for any damages directly or indirectly resulting from, nor shall the Rent
be abated by reason of (i) the installation, use or interruption of use of any
equipment in connection with the furnishing of any of the foregoing services,
(ii) failure to furnish or delay in furnishing any such services where such
failure or delay is caused by accident or any condition or event beyond the
reasonable control of Landlord, or by the making of necessary repairs or
improvements to the Premises, Building or Project, or (iii) the limitation,
curtailment or rationing of, or restrictions on, use of water, electricity, gas
or any other
6
form of energy serving the Premises, Building or Project. Landlord shall not be
liable under any circumstances for a loss of or injury to property or business,
however occurring, through or in connection with or incidental to failure to
furnish any such services. If Tenant uses heat generating machines or equipment
in the Premises which affect the temperature otherwise maintained by HVAC
system, Landlord reserves the right to install supplementary air conditioning
units in the Premises and the cost thereof, including the cost of installation,
operation and maintenance thereof shall be paid by Tenant to Landlord upon
demand by Landlord.
Tenant shall not, without the written consent of Landlord, use any apparatus or
device in the Premises, including without limitation, electronic data processing
machines, punch card machines, or machines using in excess of 120 volts, which
consumes more electricity than is usually furnished or supplied for the use of
premises as general office space as determined by Landlord. Tenant shall not
connect any apparatus with electric current except through existing electrical
outlets in the Premises. Tenant shall not consume water or electric current in
excess of that usually furnished or supplied for the use of premises as defined
in paragraph 8(as determined by Landlord), without first procuring the written
consent of Landlord, which Landlord may refuse, and in the event of consent,
landlord may have installed a water meter or electrical current meter in the
Promises to measure the amount of water or electric current consumed. The cost
of any such meter and of its installation, maintenance and repair shall be paid
for by the Tenant and Tenant agrees to pay to Landlord promptly upon demand for
all such water and electric current consumed as shown by said meters, at the
rates charged for such services by the local public utility plus any additional
expense incurred in keeping account of the water and electric current so
consumed. If a separate meter is not installed, the excess cost for such water
and electric current shall be established by an estimate made by a utility
company or electrical engineer hired by Landlord at Tenant's expense.
Nothing contained in this Article shall restrict Landlord's right to require at
any time separate metering of utilities furnished to the Premises. In the event
utilities are separately measured, Tenant shall pay promptly upon demand for all
utilities consumed at utility rates charged by the local public utility plus any
additional expense incurred by Landlord in keeping account of the utilities so
consumed. Tenant shall be responsible for the maintenance and repair of any such
meters at its sole cost.
Landlord shall furnish elevator service, lighting replacement for building
standard lights, restroom supplies, window washing and janitor services in a
manner that such services are customarily furnished to comparable office
buildings in the area.
10. CONDITION OF THE PREMISES.
Tenant's taking possession of the Premises shall be deemed conclusive evidence
that as of the date of taking possession the Premises are in good order and
satisfactory conditions, except for such matters as to which Tenant gave
Landlord notice on or before the Commencement Date. No promise of Landlord to
alter, remodel, repair or Improve the Premises, the Building or the Project and
no representation, express or implied, respecting any matter or thing relating
to the Premises, Building, Project or this Lease (including, without limitation,
the condition of the Premises, the Building or the Project) have been made to
Tenant by Landlord or its Broker or Sales Agent, other than as may be contained
herein or in a separate exhibit or addendum signed by Landlord and Tenant.
11. CONSTRUCTION, REPAIRS AND MAINTENANCE.
a. Landlord's Obligations.
Landlord shall perform Landlord's Work to the Premises as described in
Exhibit "C." Landlord shall maintain in good order, condition, and repair
the Building and all other portions of the Premises not the obligation of
Tenant or of any other tenant in the Building.
b Tenant's Obligations.
(1) Tenant shall perform Tenant's Work to the Premises as described in
working drawings such as cables, telephone installation,
wiring(non-electrical) and the like.
(2) Tenant at Tenant's sole expense shall, except for services furnished
by Landlord pursuant to Article 9 hereof, maintain the Premises in
good order, condition and repair, including the interior surfaces of
the ceilings, walls and floors, all doors, all interior windows, all
plumbing, pipes and fixtures, electrical wiring, switches and
fixtures, Building Standard furnishings and special items and
equipment installed by or at the expense of Tenant.
7
(3) Tenant shall be responsible for all repairs and alterations in and to
the Premises, Building and Project and the facilities and systems
thereof, the need for which arises out of (i) Tenant's use or
occupancy of the Premises, (ii) the installation, removal, use or
operation of Tenant's Property (as defined in Article 13) in the
Premises, (iii) the moving of Tenant's Property into or out of the
Building, or (iv) the act, omission, misuse or negligence of Tenant,
its agents, contractors employees or invitees.
(4) If Tenant fails to maintain the Premises in good order, conditions and
repair, Landlord shall give Tenant notice to do such acts as are
reasonably required to so maintain the Premises. If Tenant fails to
promptly commence such work and diligently prosecute it to completion,
then Landlord shall have the right to do such acts and expend such
funds at the expense of Tenant as are reasonably required to perform
such work. Any amount so expended by Landlord shall be paid by Tenant
promptly after demand with interest at the prime commercial rate then
being charged by Bank of America NT&SA plus 2 percent (2%) per annum,
from the date of such work, but not to exceed the maximum rate then
allowed by law. Landlord shall have no liability to Tenant for any
damage, inconvenience, or interference with the use of the Premises by
Tenant as a result for performing any such work.
c. Compliance With Law. Landlord and Tenant shall each do all acts required to
comply with all applicable laws, ordinances, and rules of any public
authority relating to their respective maintenance obligations as set forth
herein.
d. Waiver by Tenant. Tenant expressly waives the benefits of any statute now
or hereafter in effect which would otherwise afford the Tenant the right to
make repairs at Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Premises in good order, condition and
repair.
e. Load and Equipment Limits. Tenant shall not place a load upon any floor of
the Premises which exceeds the load per square foot which such floor was
designed to carry, as determined by Landlord or Landlord's structural
engineer. The cost of any such determination made by Landlord's structural
engineer shall be paid for by Tenant upon demand. Tenant shall not install
Business machines or mechanical equipment which cause noise or vibration to
such a degree as to be objectionable to Landlord or other Building tenants.
f. Except as otherwise expressly provided in this Lease, Landlord shall have
no liability to Tenant nor shall Tenant's obligations under this Lease be
reduced or abated in any manner whatsoever by reason of any inconvenience,
annoyance, interruption or injury to business arising from Landlord's
making any repairs or changes which Landlord is required or permitted by
this Lease or by any other tenant's lease or required by law to make in or
to any portion of the Project, Building or the Premises.
g Tenant shall give Landlord prompt notice of any damage to or defective
condition in any part or appurtenance of the Building's mechanical,
electrical, plumbing, HVAC or other systems serving, located in, or passing
through the Premises.
h. Upon the expiration or earlier termination of this Lease, Tenant shall
return the Premises to Landlord clean and in the same condition as on the
date Tenant took possession, except for normal wear and tear. Any damage to
the Premises, including any structural damage, resulting from Tenant's use
or from the removal of Tenant's fixtures, furnishings and equipment
pursuant to Section 13b shall be repaired by Tenant at Tenant's expense.
12. ALTERATIONS AND ADDITIONS.
a. Tenant shall not make any additions, alterations or improvements to the
Premises without obtaining the prior written consent of Landlord.
Landlord's consent may be conditioned on Tenant's removing any such
additions, alterations or improvements upon the expiration of the Term and
restoring the Premises to the same condition as on the date Tenant took
possession. All work with respect to any addition, alteration or
improvement shall be done in a good and workmanlike manner by properly
qualified and licensed personnel approved by Landlord, and such work shall
be diligently prosecuted to completion. Landlord may, at Landlord's option,
require that any such work be performed by landlord's contractor, in which
case
8
the cost of such work shall be paid for before commencement of the work.
Tenant shall pay to landlord upon completion of any such work by Landlord's
contractor, the cost of the work.
b. Tenant shall pay the costs of any work done on the Premises pursuant to
Section 12a and shall keep the Premises, Building and Project free and
clear of liens of any kind. Tenant shall indemnify, defend against and keep
Landlord free and harmless from all liability, loss, damage, costs,
attorneys' fees and any other expense incurred on account of claims by any
person performing work or furnishing materials or supplies for Tenant or
any person claiming under Tenant.
Tenant shall keep Tenant's leasehold interest, and any additions or
improvements which are or become the property of Landlord under this Lease,
free and clear of all attachment or judgment liens. Before the actual
commencement of any work for which a claim or lien may be filed, Tenant
shall give Landlord notice of the intended commencement date a sufficient
time before that date to enable Landlord to post notices of
non-responsibility or any other notices which Landlord deems necessary, for
the proper protection of Landlord's interest in the Premises, Building or
the Project, and Landlord shall have the right to enter the Premises and
post such notices at any reasonable time.
c. Landlord may require, at Landlord's sole option, that Tenant provide to
Landlord, at Tenant's expense, a lien and completion bond in an amount
equal to at least one and one-half (l 1/2) times the total estimated cost
of any additions, alterations or improvements to be made in or to the
Premises, to protect Landlord against any liability for mechanic's and
material men's liens and to insure timely completion of the work. Nothing
contained in this Section 12c shall relieve Tenant of its obligation under
Section 12b to keep the Premises, Building and Project free of all liens.
d. Unless their removal is required by Landlord as provided in Section 12a,
all additions, alterations and improvements made to the Premises shall
become the property of Landlord and be surrendered with the Premises upon
the expiration of the Term; provided, however, Tenant's equipment,
machinery and trade fixtures which can be removed without damage to the
Premises shall remain the property of Tenant and maybe removed, subject to
the provisions of Section 13b.
13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY.
a. All fixtures, equipment, improvements and appurtenances attached to or
built into the Premises at the commencement of or during the Term, whether
or not by or at the expense of Tenant ("Leasehold Improvements"), shall be
and remain a part of the Premises, shall be the property of Landlord and
shall not be removed by Tenant, except as expressly provided in Section
13b. Antique apparel display boxes shall remain the exclusive property of
tenant.
b. All movable partitions, business and trade fixtures, machinery and
equipment, communications equipment and office equipment located in the
Premises and acquired by or for the account of Tenant, without expense to
Landlord, which can be removed without structural damage to the Building,
and all furniture, furnishings and other articles of movable personal
property owned by Tenant and located in the Premises (collectively
"Tenant's Property) shall be and shall remain the property of Tenant and
may be removed by Tenant at any time during the Term; provided that if any
of Tenant's Property is removed, Tenant shall promptly repair any damage to
the Premises or to the Building resulting from such removal.
14. RULES AND REGULATIONS.
Tenant agrees to comply with (and cause its agents, contractors, employees and
invitees to comply with) the rules and regulations attached hereto as Exhibit
"D" and with such reasonable modifications thereof and additions thereto as
Landlord may from time to time make. Landlord shall not be responsible for any
violation of said rules and regulations by other tenants or occupants of the
Building or Project.
15. CERTAIN RIGHTS RESERVED BY LANDLORD.
Landlord reserves the following rights, exercisable without liability to Tenant
for (a) damage or injury to property, person or business, (b) causing an actual
or constructive eviction from the Premises, or (c) disturbing Tenant's use or
possession of the Premises:
a. To name the Building and Project and to change the name or street address
of the Building or Project;
9
b. To install and maintain all signs on the exterior and interior of the
Building and Project;
c. To have pass keys to the Premises and all doors within the Premises,
excluding Tenant's vaults and safes;
d. At any time during the Term, and on reasonable prior notice to Tenant, to
inspect the Premises, and to show the Premises to any prospective purchaser
or mortgagee of the Project, or to any assignee of any mortgage on the
Project, or to others having an interest in the Project or Landlord, and
during the last six months of the Term, to show the Premises to prospective
tenants thereof; and
e. To enter the Premises for the purpose of making inspections, repairs,
alterations, additions or improvements to the Premises or the Building
(including, without limitation, checking, calibrating, adjusting or
balancing controls and other parts of the HVAC system), and to take all
steps as may be necessary or desirable for the safety, protection,
maintenance or preservation of the Premises or the Building or Landlord's
interest therein, or as may be necessary or desirable for the operation or
improvement of the Building or in order to comply with laws, orders or
requirements of governmental or other authority. Landlord agrees to use its
best efforts (except in any emergency) to minimize interference with
Tenant's business in the Premises in the course of any such entry.
16. ASSIGNMENT AND SUBLETTING.
No assignment of this Lease or sublease of all or any part of the Premises shall
be permitted, except as provided in this Article 16.
a. Tenant shall not, without the prior written consent of Landlord, assign or
hypothecate this Lease or any interest herein or sublet the Premises or any
part thereof, or permit the use of the Premises by any party other than
Tenant. Any of the foregoing acts without such consent shall be void and
shall, at the option of Landlord, terminate this Lease. This Lease shall
not, nor shall any interest of Tenant herein, be assignable by operation of
law without the written consent of Landlord.
b. If at any time, or from time to time, during the Term Tenant desires to
assign this Lease or sublet all or any part of the Premises, Tenant shall
give notice to Landlord setting forth the terms and provisions of the
proposed assignment or sublease, and the identity of the proposed assignee
or subtenant. Tenant shall promptly supply Landlord with such information
concerning the business background and financial condition of such proposed
assignee or subtenant as Landlord may reasonably request. Landlord shall
have the option, exercisable by notice given to Tenant within twenty (20)
days after Tenant's notice is given, either to sublet such space from
Tenant at the rental and on the other terms set forth in this Lease for the
term set forth in Tenant's notice, or, in the case of an assignment, to
terminate this Lease. If Landlord does not exercise such option, Tenant may
assign the Lease or sublet such space to such proposed assignee or
subtenant on the following further conditions:
(l) Landlord shall have the right to approve such proposed assignee or
subtenant, which approval shall not be unreasonably withheld;
(2) The assignment or sublease shall be on the same terms set forth in the
notice given to Landlord;
(3) No assignment or sublease shall be valid and no assignee or sublessee
shall take possession of the Premises until an executed counterpart of
such assignment or sublease has been delivered to Landlord;
(4) No assignee or sublessee shall have a further right to assign or
sublet except on the terms herein contained; and
(5) Any sums or other economic consideration received by Tenant as a
result of such assignment or subletting, however dominated under the
assignment or sublease, which exceed, in the aggregate, (i) the total
sums which Tenant is obligated to pay Landlord under this Lease
(prorated to reflect obligations allocable to any portion of the
Premises subleased), plus (ii) any real estate brokerage commissions
or fees payable in connection with such assignment or subletting,
shall be paid to Landlord as additional rent under this Lease without
affecting or reducing any other obligations of Tenant hereunder.
10
c. Not withstanding the provisions of paragraphs a and b above, Tenant may
assign this Lease or sublet the Premises or any portion thereof, without
Landlord's consent and without extending any recapture or termination
option to Landlord, to any corporation which controls, is controlled by or
is under common control with Tenant, or to any corporation resulting from a
merger or consolidation with Tenant, or to any person or entity which
acquires all the assets of Tenant's business as a going concern, provided
that (i) the assignee or sublessee assumes, in full, the obligations of
Tenant under this Lease, (ii) Tenant remains fully liable under this Lease,
and (iii) the use of the Premises under Article 8 remains unchanged.
d. No subletting or assignment shall release Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the Rent
and to perform all other obligations to be performed by Tenant hereunder.
The acceptance of Rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by an assignee or
subtenant of Tenant or any successor of Tenant in the performance of any of
the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such assignee, subtenant or
successor.
e. If Tenant assigns the Lease or sublets the Premises or requests the consent
of Landlord to any assignment or subletting or if Tenant requests the
consent of Landlord for any act that Tenant proposes to do, the Tenant
shall, upon demand, pay Landlord any attorneys' fees reasonably incurred by
Landlord in connection with such act or request.
17. HOLDING OVER.
If after expiration of the Term, Tenant remains in possession of the Premises
with Landlord's permission (express or implied), Tenant shall become a tenant
from month to month only, upon all the provisions of this Lease (except as to
term and Base Rent), but the "Monthly Installments of Base Rent" payable by
Tenant shall be increased to one hundred twenty-five percent (125%) of the
Monthly Installments of Base Rent payable by Tenant at the expiration of the
Term or other amount agreed to by the parties. Such monthly rent shall be
payable in advance on or before the first day of each month. If either party
desires to terminate such month to month tenancy, it shall give the other party
not less than thirty (30) days advance written notice of the date of
termination.
18. SURRENDER OF PREMISES.
a. Tenant shall peaceably surrender the Premises to Landlord on the Expiration
Date, in broom-clean condition and in as good condition as when Tenant took
possession, except for (i) reasonable wear and tear, (ii) loss by fire or
other casualty and (iii) loss by condemnation. Tenant shall, on Landlord's
request, remove Tenant's Property on or before the Expiration Date and
promptly repair all damage to the Premises or Building caused by such
removal.
b. If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any of Tenant's Property left on the Premises
shall be deemed to be abandoned, and at Landlord's option, title shall pass
to Landlord under this Lease as by a bill of sale. If Landlord elects to
remove all or any part of such Tenant's Property; the cost of removal,
including repairing any damage to the Premises or Building caused by such
removal shall be paid by Tenant. On the Expiration Date, Tenant shall
surrender all keys to the Premises.
19. DESTRUCTION OR DAMAGE
a. If the Premises or the portion of the Building necessary for Tenant's
occupancy is damaged by fire, earthquake, act of God, the elements or other
casualty, Landlord shall, subject to the provisions of this Article,
promptly repair the damage, if such repairs can, in Landlord's opinion, be
completed within (90) ninety days. If Landlord determines that repairs can
be completed within ninety (90) days, this Lease shall remain in full force
and effect, except that if such damage is not the result of the negligence
or willful misconduct of Tenant or Tenants agents, employees, contractors,
licensees or invitees, the Rent shall be abated to the extent Tenant's use
of the Premises is impaired, commencing with the date of damage and
continuing unti1 completion of the repairs required of Landlord under
Section 19d.
b. If in Landlord's opinion, such repairs to the Premises or portion of the
Building necessary for Tenant's occupancy cannot be completed within
ninety (90)days, Landlord may elect, upon notice to Tenant given
11
within thirty (30) days after the date of such fire or other casualty, to
repair such damage, in which event this Lease shall continue in full force
and effect, but the Base Rent shall be partially abated as provided in
Section 19a. If Landlord does not so elect to make such repairs, this Lease
shall terminate as of the date of such fire or other casualty.
c. If any other portion of the Building or Project is totally destroyed or
damaged to the extent that in Landlord's opinion repair thereof cannot be
completed within ninety (90) days, Landlord may elect upon notice to Tenant
given within thirty (30) days after the date of such fire or other
casualty, to repair such damage, in which event this Lease shall continue
in full force and effect, but the Base Rent shall be partially abated as
provided in Section 19a. If Landlord does not elect to make such repairs,
this Lease shall terminate as of the date of such fire or other casualty.
d. If the Premises are to be repaired under this Article, Landlord shall
repair at its cost any injury or damage to the Building and Building
Standard Work in the Premises. Tenant shall be responsible at its sole cost
and expense for the repair, restoration and replacement of any other
Leasehold Improvements and Tenant's Property. Landlord shall not be liable
for any loss of business, inconvenience or annoyance arising from any
repair or restoration of any portion of the Premises, Building or Project
as a result of any damage from fire or other casualty.
20. EMINENT DOMAIN.
a. If the whole of the Building or Premises is lawfully taken by condemnation
or in any other manner for any public or quasi-public purpose, this Lease
shall terminate as of the date of such taking, and Rent shall be prorated
to such date. If less than the whole of the Building or Premises is so
taken, this Lease shall be unaffected by such taking, provided that (i)
Tenant shall have the right to terminate this Lease by notice to Landlord
given within ninety (90) days after the date of such taking if twenty
percent (20%) or more of the Premises is taken and the remaining area of
the Premises is not reasonably sufficient for Tenant to continue operation
of its business, and (ii) Landlord shall have the right to terminate this
Lease by notice to Tenant given within ninety (90) days after the date of
such taking. If either Landlord or Tenant so elects to Terminate this
Lease, the Lease shall terminate on the thirtieth (30th) day after either
such notice. The Rent shall be prorated to the date of termination. If this
Lease continues in force upon such partial taking, the Base Rent and
Tenant's Proportionate Share shall be equitably adjusted according to the
remaining Rentable Area of the Premises and Project.
b. In the event of any taking, partial or whole, all of the proceeds of any
award, judgment or settlement payable by the condemning authority shall be
the exclusive property of Landlord, and Tenant hereby assigns to Landlord
all of its right, title and interest in any award, judgment or settlement
from the condemning authority. Tenant, however, shall have the right, to
the extent that Landlord's award is not reduced or prejudiced, to claim
from the condemning authority (but not from Landlord) such compensation as
may be recoverable by Tenant in its own right for relocation expenses and
damage to Tenant's personal property.
c. In the event of a partial taking of the Premises which does not result in a
termination of this Lease, Landlord shall restore the remaining portion of
the Premises as nearly as practicable to its condition prior to the
condemnation or taking, but only to the extent of Building Standard Work.
Tenant shall be responsible at its sole cost and expense for the repair,
restoration and replacement of any other Leasehold Improvements and
Tenant's Property.
21. INDEMNIFICATION.
a. Tenant shall indemnify and hold Landlord harmless against and from
liability and claims of any kind for loss or dam age to property of Tenant
or any other person, or for any injury to or death of any person, arising
out of: (l) Tenant's use and occupancy of the Premises, or any work,
activity or other things allowed or suffered by Tenant to be done in, on or
about the Premises; (2) any breach or default by Tenant of any of Tenant's
obligations under this lease; or (3) any grossly negligent or otherwise
tortious act or omission of Tenant, its agents, employees, invitees or
contractors. Tenant shall at Tenant's expense, and by counsel satisfactory
to Landlord, defend Landlord in any action or proceeding arising from any
such claim and shall indemnify Landlord against all costs, attorneys' fees,
expert witness fees and any other expenses incurred in such action or
proceeding. As a material part of the consideration for Landlord's
execution of this Lease,
12
Tenant hereby assumes all risk of damage or injury to any person or
property in, on or about the Premises from any cause.
b. Landlord shall not be liable for injury or damage which may be sustained by
the person or property of Tenant, its employees, invitees or customers, or
any other person in or about the Premises, caused by or resulting from
fire, steam, electricity, gas, water or rain which may leak or flow from or
into any part of the Premises, or from the breakage, leakage, obstruction
or other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, whether such damage or injury results
from conditions arising upon the Premises or upon other portions of the
Building or Project or from other sources. Landlord shall not be liable for
any damages arising from any act or omission of any other tenant of the
Building or Project.
22. TENANT'S INSURANCE.
a. All insurance required to be carried by Tenant hereunder shall be issued by
responsible insurance companies acceptable to Landlord and Landlord's
lender and qualified to do business in the State. Each policy shall name
Landlord, and at Landlord's request any mortgagee of Landlord, as an
additional insured, as their respective interests may appear. Each policy
shall contain (i) a cross-liability endorsement, (ii) a provisions that
such policy and the coverage evidenced thereby shall be primary and
non-contributing with respect to any policies carried by Landlord and that
any coverage carried by Landlord shall be excess insurance, and (iii) a
waiver by the insurer of any right of subrogation against Landlord, its
agents, employees and representatives, which arises or might arise by
reason of any payment under such policy or by reason of any act or omission
of Landlord, its agents, employees or representatives. A copy of each paid
up policy (authenticated by the insurer) or certificate of the insurer
evidencing the existence and amount of each insurance policy required
hereunder shall be delivered to Landlord before the date Tenant is first
given the right of possession of the Premises, and thereafter within thirty
(30) days after any demand by Landlord therefore. Landlord may, at any time
and from time to time, inspect and/or copy any insurance policies required
to be maintained by Tenant hereunder. No such policy shall be cancelable
except after twenty (20) days written notice to Landlord and Landlord's
lender. Tenant shall furnish Landlord with renewals or "binders" of any
such policy at least ten (10) days prior to the expiration thereof. Tenant
agrees that if Tenant does not take out and maintain such insurance,
Landlord may (but shall not be required to) procure said insurance on
Tenant's behalf and charge the Tenant the premiums together with a
twenty-five percent (25%) handling charge, payable upon demand. Tenant
shall have the right to provide such insurance coverage pursuant to blanket
policies obtained by the Tenant, provided such blanket policies expressly
afford coverage to the Premises, Landlord, Landlord's mortgagee and Tenant
as required by this Lease.
b. Beginning in the date Tenant is given access to the Premises for any
purpose and continuing until the expiration of the Term. Tenant shall
procure, pay for and maintain in effect policies of casualty insurance
covering (i) all Leasehold Improvements (including any alterations,
additions or improvements as may be made by Tenant pursuant to the
provisions of Article 12 hereof), and (ii) trade fixtures, merchandise and
other personal property from time to time in, on or about the premises, in
the amount not less than one hundred percent (l00%) of their actual
replacement cost from time to time, providing protection against any peril
included within the classification "Fire and Extended Coverage" together
with insurance against sprinkler damage, vandalism and malicious mischief.
The proceeds of such insurance shall be used for the repair or replacement
of the property so insured. Upon termination of this lease following a
casualty as set forth herein, the proceeds under (i) shall be paid to
Landlord, and the proceeds under (ii) above shall be paid to Tenant.
c. Beginning in the date Tenant is given access to the Premises for any
purpose and continuing until the expiration of the Term. Tenant shall
procure, pay for and maintain in effect workers' compensation insurance as
required by law and comprehensive public liability and property damage
insurance with respect to the construction of improvements on the Premises,
the use, operation or condition of the Premises and the operation of Tenant
in, on or about the Premises, providing personal injury and broad from
property damage coverage for not less than One Million Dollars
($1,000.000.00) combined single limit for bodily injury, death and property
damage liability.
Tenant shall deposit the policy or policies of such required insurance or
certificates thereof with Landlord prior to the Commencement Date, which
policies shall name Landlord and Landlord's designee (Chiles &
13
Company, Inc.) as additional named insured and shall also contain a
provision stating that such policy or policies shall not be canceled or
materially altered except after thirty (30) days written notice to
Landlord.
d. Not less than every three(3) years during the Term, Landlord and Tenant
shall mutually agree to increases in all Tenant's insurance policy limits
for all insurance carried by Tenant as set forth in this Article. In the
event Landlord and Tenant cannot mutually agree upon the amounts of said
increases, then Tenant agrees that all insurance policy Limits as set forth
in this Article shall be adjusted for increases in the cost of living in
the same manner as is set forth in Section 5.2 hereof for the adjustment of
the Base Rent
23. WAIVER OF SUBROGATION.
Landlord and Tenant each hereby waive all rights of recovery against the other
and against the officers, employees, agents and representatives of the other, on
account of loss by or damage to the waiving party of its property or the
property of others under its control, to the extent that such loss or damage is
insured against under any fire and extended coverage insurance policy which
either may have in force at the time of the loss or damage. Tenant shall, upon
obtaining the policies of insurance required under this Lease, give notice to
its insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.
24. SUBORDINATION AND ATTORNMENT.
Upon written request of Landlord, or any first mortgagee or first deed of trust
beneficiary of Landlord, or ground lessor of Landlord, Tenant shall, in writing,
subordinate its rights under this Lease to the lien of any first mortgage or
first deed of trust, or to the interest of any lease in which Landlord is
lessee, and to all advances made or hereafter to be made thereunder. However,
before signing any subordination agreement, Tenant shall have the right to
obtain from any lender or lessor or Landlord requesting such subordination, an
agreement in writing providing that, as long as Tenant is not in default
hereunder, this Lease shall remain in effect for the full Term. The holder of
any security interest may, upon written notice to Tenant, elect to have this
Lease prior to its security interest regardless of the time of the granting or
recording of such security interest.
In the event of any foreclosure sale, transfer in lieu of foreclosure or
termination of the lease in which Landlord is lessee, Tenant shall attorn to the
purchaser, transferee or lessor as the case may be, and recognize that party as
Landlord under this Lease, provided such party acquires and accepts the Premises
subject to this Lease.
25. TENANT ESTOPPEL CERTIFICATES.
Within ten (10) days after written request from Landlord, Tenant shall execute
and deliver to Landlord or Landlord's designee, a written statement certifying
(a) that this Lease is unmodified and in full force and effect, or is in full
force and effect as modified and stating the modifications; (b) the amount of
Base Rent and the date to which Base Rent and additional rent have been paid in
advance; (c) the amount of any security deposited with Landlord; and (d) that
Landlord is not in default hereunder, or if Landlord is claimed to be in
default, stating the nature of any claimed default. Any such statement may be
relied upon by a purchaser, assignee or lender. Tenant's failure to execute and
deliver such statement within the time required shall at Landlord's election be
a default under this Lease and shall also be conclusive upon Tenant that: (1)
this Lease is in full force and effect and has not been modified except as
represented by Landlord; (2) there are not incurred defaults in Landlord's
performance and that Tenant has no right of offset, counter-claim or deduction
against Rent; and (3) not more than one month's Rent has been paid in advance.
26. TRANSFER OF LANDLORD'S INTEREST.
In the event of any sale or transfer by Landlord of the Premises, Building or
Project, and assignment of this Lease by Landlord, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission relating to the Premises, Building, Project or Lease occurring after
the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under this
Lease. If any security deposit or prepaid Rent has been paid by Tenant, Landlord
may transfer the security deposit or prepaid Rent to Landlord's successor and
upon such transfer, Landlord shall be relieved of any and all further liability
with respect thereto.
14
27. DEFAULT.
27.1 Tenant's Default. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:
a. If Tenant abandons or vacates the Premises; or
b. If Tenant fails to pay any Rent or any other charges required to be
paid by Tenant under this Lease three times during this lease, and
such failure continues for ten (10) days after such payment is due and
payable; or
c. If Tenant fails to promptly and fully perform any other covenant,
condition or agreement contained in this Lease and such failure
continues for thirty (30) days after written notice thereof from
Landlord to Tenant; or
d. If a writ of attachment or execution is levied on this Lease or any of
Tenant's Property; or
e. If Tenant makes a general assignment for the benefit of creditors, or
provides for an arrangement, composition, extension or adjustment with
its creditors; or
f. If Tenant files a voluntary petition for relief or if a petition
against Tenant in a proceeding under the federal bankruptcy laws or
other insolvency laws is filed and not withdrawn or dismissed within
forty-five (45) days thereafter, or if under the provisions of any law
providing for reorganization or winding up of corporations, any court
of competent jurisdiction assumes jurisdiction, custody or control of
Tenant or any substantial part of its property and such jurisdiction,
custody or control remains in force unrelinquished, unstayed or
unterminated for a period of forty-five (45) days; or
g. If in any proceeding or action in which Tenant is a party, a trustee,
receiver, agent or custodian is appointed to take charge of the
Premises or Tenant's Property (or has the authority to do so) for the
purpose of enforcing a lien against the Premises or Tenant's Property;
or
h. If Tenant is a partnership or consists of more than one (1) person or
entity, if any partner of the partnership or other person or entity is
involved in any of the acts or events described in subparagraphs d
through g above.
27.2 Remedies. In the event of Tenant's default hereunder, then in addition to
any other rights or remedies Landlord may have under any law, Landlord
shall have the right, at Landlord's option, without further notice or
demand of any kind to do the following:
a. Terminate this Lease and Tenant's right to possession of the Premises
and re-enter the Premises and take possession thereof, and Tenant
shall have no further claim to the Premises or under this Lease; or
b. Continue this Lease in effect, re-enter and occupy the Premises for
the account of Tenant, and collect any unpaid Rent or other charges
which have or thereafter become due and payable; or
c. Re-enter the premises under the provisions of subparagraph b, and
thereafter elect to terminate this Lease and Tenant's right to
possession of the Premises.
If Landlord re-enters the Premises under the provisions of subparagraphs b or c
above, Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter accruing,
unless Landlord notifies Tenant in writing of Landlord's election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any part
of Tenant's Property in the Premises and to place such property in storage at a
public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such reletting; third, to the payment of the cost of any
alterations or repairs to the Premises; fourth, to the payment of Rent due and
unpaid hereunder; and the balance, if any, shall be held by Landlord and applied
in payment of future Rent as it becomes due. If that portion of rent received
from the reletting which is applied against the Rent due hereunder is less than
15
the amount of the Rent due, Tenant shall pay the deficiency to Landlord promptly
upon demand by Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as determined, any costs and expenses
incurred by Landlord in connection with such reletting or in making alterations
and repairs to the Premises, which are not covered by the rent received from the
reletting.
Should Landlord elect to terminate this Lease under the provisions of
subparagraph a or c above, Landlord may recover as damages from Tenant the
following:
1. Past Rent. The worth at the time of the award of any unpaid Rent which
had been earned at the time of termination; plus
2. Rent Prior to Award. The worth at the time of award of the amount by
which the unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus
3. Rent After Award. The worth at the time of the award of the amount by
which the unpaid Rent for the balance of the Term after the time of
award exceeds the amount of the rental loss that Tenant proves could
be reasonably avoided; plus
4. Proximately Caused Damages. Any other amount necessary to compensate
Landlord for all detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including, but
not limited to, any costs or expenses (including attorneys fees),
incurred by Landlord in (a) retaking possession of the Premises, (b)
maintaining the Premises after Tenant's default, (c) preparing the
Premises for reletting to a new tenant, including any repairs or
alterations, and (d) reletting the Premises, including broker's
commissions.
"The worth at the time of the award" as used in subparagraph 3 above, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank situated nearest to the Premises at the time of the award plus one percent
(1%).
The waiver by Landlord of any breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition.
Acceptance of Rent by Landlord subsequent to any breach hereof shall not be
deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord's knowledge of any breach at
the time of such acceptance of Rent. Landlord shall not be deemed to have waived
any term, covenant or condition unless Landlord gives Tenant written notice of
such waiver.
27.3 Landlord's Default. If Landlord fails to perform any covenant, condition or
agreement contained in this Lease within thirty (30) days after receipt of
written notice from Tenant specifying such default, or if such default
cannot reasonably be cured within thirty (30) days, if Landlord fails to
commence to cure within that thirty (30) day period, then Landlord shall be
liable to Tenant for any damages sustained by Tenant as a result of
Landlord's breach; provided, however, it is expressly understood and agreed
that if Tenant obtains a money judgment against Landlord resulting from any
default or other claim arising under this Lease, that judgment shall be
satisfied only out of the rents, issues, profits, and other income actually
received on account of Landlord's right, title and interest in the
Premises, Building or Project, and no other real personal or mixed property
of Landlord (or of any of the partners which comprise Landlord, if any)
wherever situated, shall be subject to levy to satisfy such judgment. If,
after notice to Landlord of default, Landlord (or any first mortgagee or
first deed of trust beneficiary of Landlord) fails to cure the default as
provided herein, then Tenant shall have the right to cure that default at
Landlord's expense. Tenant shall not have the right to terminate this Lease
or to withhold, reduce or offset any amount against any payments of Rent or
any other charges due and payable under this Lease except as otherwise
specifically provided herein.
28. BROKERAGE FEES.
Tenant warrants and represents that it has not dealt with any real estate broker
or agent in connection with this Lease or its negotiation except Chiles &
Company, Cushman and Wakefield, and Donoghue and Associates. Tenant shall
indemnify and hold Landlord harmless from any cost, expense or liability
(including costs of suit and
16
reasonable attorneys' fees) for any compensation, commission or fees claimed by
any other real estate broker or agent in connection with this Lease or its
negotiation by reason of any act of Tenant.
29. NOTICES.
All notices, approvals and demands permitted or required to be given under this
Lease shall be in writing and deemed duly served or given if personally
delivered or sent by certified or registered U.S. mail, postage prepaid, and
addressed as follows: (a) if to Landlord, to Landlord's Mailing Address and to
the Building manager, and (b) if
to Tenant, to Tenant's Mailing Address; provided however, notices to Tenant
shall be deemed duly served or given if delivered or mailed to Tenant at the
Premises. Landlord and Tenant may from time to time by notice to the other
designate another place for receipt of future notices.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS.
In the event of imposition of federal, state or local government controls,
rules, regulations, or restrictions on the use or consumption of energy or other
utilities during the Term, both Landlord and Tenant shall be bound thereby. In
the event of a difference in interpretation by Landlord and Tenant of any such
controls, the interpretation of Landlord shall prevail, and Landlord shall have
the right to enforce compliance therewith, including the right of entry into the
Premises to effect compliance.
31. RELOCATION OF PREMISES. (Paragraph deleted)
32. QUIET ENJOYMENT.
Tenant, upon paying the Rent and performing all of its obligations under this
Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of
this Lease and to any mortgage, lease, or other agreement to which this Lease
maybe subordinate.
33. OBSERVANCE OF LAW,
Tenants shall not use the Premises or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the
requirements of any board of rite insurance underwriters or other similar bodies
now or hereafter constituted, relating to, or affecting the condition, use or
occupancy of the Premises, excluding structural changes not related to or
affected by Tenant's improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant,
whether Landlord is a party thereto or not, that Tenant has violated any law,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between Landlord and Tenant.
It shall be the Landlord's responsibility to maintain compliance with the
Americans With Disabilities Act on the exterior of the leased space, including
all common areas. The inside of Tenant's leased property shall be Tenant's
responsibility to fully comply with the provisions of the Americans With
Disabilities Act.
34. FORCE MAJEURE.
Any prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes therefore, acts of God, governmental
restrictions or regulations or controls, judicial order, enemy or hostile
government actions, civil commotion, fire or other casualty or other causes
beyond the reasonable control of the party obligated to perform hereunder, shall
excuse performance of the work by that party for a period equal to the duration
of that prevention, delay or stoppage. Nothing in this Article 34 shall excuse
or delay Tenant's obligation to pay Rent or other charges under this Lease.
17
35. CURING TENANT'S DEFAULTS.
If Tenant defaults in the performance of any of its obligations under this
Lease, Landlord may (but shall not be obligated to) without waiving such
default, perform the same for the account at the expense of Tenant. Tenant shall
pay Landlord all costs of such performance promptly upon receipt of a bill
therefore.
36. SIGN CONTROL.
Tenant shall not affix, paint, erect, or inscribe any sign, projection, awning,
signal or advertisement of any kind to any Part of the Premises, Building or
Project, including without limitation, the inside or outside of windows or
doors, without the written consent of Landlord. Landlord shall have the right to
remove any signs or other matter, installed without Landlord's permission,
without being liable to Tenant by reason of such removal, and to charge the cost
of removal to Tenant as additional rent hereunder, payable within ten (10) days
of written demand by Landlord. Tenant has the right to a monument sign on the
grounds near the entrance door, as well as interior signage and interior apparel
display cases visible from the second floor lobby.
37. HAZARDOUS WASTE.
Tenant shall not transport, use, store, maintain, generate, manufacture, handle,
dispose, release, or discharge any "Hazardous Material" (as defined below) upon
or about the Property, or permit Tenant's employees, agents, contractors and
other occupants of the Premises to engage in such activities upon or about the
Property. However, the foregoing provisions shall not prohibit the
transportation to and from, and use, storage, maintenance and handling within,
the Premises of substances customarily used in offices (or such other business
or activity expressly permitted to be undertaken in the Premises: (a) such
substances shall be used and maintained only in such quantities as are
reasonably necessary for such permitted use of the Premises, strictly in
accordance with applicable law and the manufacturers' instructions therefore,
(b) such substances shall not be disposed of, released or discharged on the
Property, and shall be transported to and from the premises in compliance with
all applicable Laws, and as Landlord shall reasonably require, (c) if any
applicable Law of Landlord's trash removal contractor requires that any such
substances be disposed of separately from ordinary trash, Tenant shall make
arrangements at Tenant's expense for such disposal directly with a qualified and
licensed disposal company at a lawful disposal site (subject to scheduling and
approval by Landlord), and qualified and licensed disposal company at a lawful
disposal site (subject to scheduling and approval by Landlord), and shall ensure
that disposal occurs frequently enough to prevent unnecessary storage of such
substances in the Premises, and (d) any remaining such substances shall be
completely, properly and lawfully removed from the Property upon expiration or
earlier termination of this Lease.
Tenant shall promptly notify Landlord of: (i) any enforcement, cleanup or other
regulatory action taken or threatened by any governmental or regulatory
authority with respect to the presence of any Hazardous Material on the Premises
of the migration thereof from or to other property, (ii) any demand claims made
or threatened by any Party against Tenant or the Premises relating to any loss
or injury resulting from any Hazardous Material, (iii) any release, discharge or
non routine, improper or lawful disposal or transportation of any Hazardous
Material on or from the Premises, and (iv) any matters where Tenant is required
by Law to give a notice to any governmental or regulatory authority respecting
any Hazardous Material on the Premises. Landlord shall have the right (but not
the obligation) to join and participate as a party in legal proceedings or
actions affecting the Premises initiated in connection with any environmental,
health or safety Law. At such times as Landlord may reasonably request, Tenant
shall provide Landlord with a written list identifying any Hazardous Material
then used, stored, or maintained upon the Premises, the use and approximate
quantity of each such material, a copy of any material safety data sheet
("MSDS") issued by the manufacturer therefore, written information concerning
the removal, transportation and disposal of the same, and such other information
as Landlord may reasonably require or as may be required by Law. The term
"Hazardous Material" for purposed hereof shall mean any chemical, substance,
material or waste or component thereof by any federal, state or local governing
body having jurisdiction, or which would trigger any employee or community
"right-to-know" requirements adopted by any such body, or for which any such
body has adopted any requirements for the preparation or distribution of an
MSDS.
If any Hazardous Material is released, discharged or disposed of by Tenant or
any other occupant of the Premises, or their employees, agents or contractors,
on or about the Property in violation of the foregoing provisions, Tenant shall
immediately, properly and in compliance with applicable Laws clean up and remove
the Hazardous Material from the Property and any other affected property and
clean or replace any affected personal property (whether or not owned by
Landlord), at Tenant's expense. Such clean up and removal work shall be subject
to Landlord's prior written approval (except in emergencies) and shall include,
without limitation, any testing, investigation, and the
18
preparation and implementation of any remedial action plan required by any
governmental body having jurisdiction or reasonably required by Landlord. If
Tenant shall fail to comply with the provisions of this Article within five (5)
days after written notice by Landlord, or such shorter time as may be required
by Law or in order to minimize any hazard to Persons or property, Landlord may
(but shall not be obligated to) arrange for such compliance directly or as
Tenant's agent through contractors or other parties selected by Landlord, at
Tenant's expense (without limiting Landlord's other remedies under this Lease or
applicable Law). If any Hazardous Material is released, discharged or disposed
of on or about the Property and such release, discharge or disposal is not
caused by Tenant or other occupant of the Premises, or their employees, agents
or contractors, such release, discharge or disposal shall be deemed casualty
damage under Article 19 to the extent that the Premises or common areas serving
the Premises are affected thereby; in such case, Landlord and Tenant shall have
the obligations and rights respecting such casualty damage provided under
Article 19.
38. MISCELLANEOUS.
a. Accord and Satisfaction; Allocation of Payments. No payment by Tenant or
receipt by Landlord of a lesser amount than the Rent provided for in this
Lease shall be deemed to be other than on account of the earliest due Rent,
nor shall any endorsement or statement on any check or letter accompanying
any check or payment as Rent be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's
right to recover the provision contained in the addendum shall control,
unless otherwise provided in the addendum balance of the Rent or pursue any
other remedy provided for in this Lease. In connection with the foregoing,
Landlord shall have the absolute right in its sole discretion to apply any
payment received from Tenant to any account or other payment of Tenant then
not current and due or delinquent.
b. Addenda. If any provisions contained in an addendum to this Lease is
inconsistent with any other provision herein, the provision contained in
the addendum shall control, unless otherwise provided in the addendum.
c. Attorneys' Fees. If any action or proceeding is brought by either party
against the other pertaining to or arising out of this Lease, the finally
prevailing party shall be entitled to recover all costs and expenses,
including reasonable attorneys' fees, incurred on account of such action or
proceeding.
d. Captions, Articles and Section Numbers. The captions appearing within the
body of this Lease have been inserted as a matter of convenience and for
reference only and in no way define, limit or enlarge the scope or meaning
of this Lease. All references to Article and Section numbers refer to
Articles and Sections in this Lease.
e. Changes Requested by Lender. Neither Landlord nor Tenant shall unreasonably
withhold its consent to changes or amendments to this Lease requested by
the lender on Landlord's interest, so long as these changes do not alter
the basic business terms of this Lease or otherwise materially diminish any
rights or materially increase any obligations of the party from whom
consent to such charge or amendment is requested.
f. Choice of Law. This Lease shall be construed and enforced in accordance
with the laws of the State of Washington
g. Consent. Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have no claim, and hereby waives the right to any claim
against Landlord for money damages by reason of any refusal, withholding or
delaying by Landlord of any consent, approval or statement of satisfaction,
and in such event, Tenant's only remedies therefore shall be an action for
specific performance, injunction or declaratory judgment to enforce any
right to such consent, etc.
h. Corporate Authority. If Tenant is a corporation, each individual signing
this Lease on behalf of Tenant represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation,
and that this Lease is binding on Tenant in accordance with its terms.
Tenant shall, at Landlord's request, deliver a certified copy of a
resolution of its board of directors authorizing such execution.
i. Counterparts. This Lease may be executed in multiple counterparts, all of
which shall constitute one and the same Lease.
19
j. Execution of Lease; No Option. The submission of this Lease to Tenant shall
be for examination purposes only, and does not and shall not constitute a
reservation of or option for Tenant to lease, or otherwise create any
interest of Tenant in the Premises or any other premises within the
Building or Project. Execution of this Lease by Tenant and its return to
Landlord shall not be binding on Landlord notwithstanding any time
interval, until Landlord has in fact signed and delivered this Lease to
Tenant.
k. Furnishing of Financial Statements; Tenant's Representations. In order to
induce Landlord to enter into this Lease Tenant agrees that it shall
promptly furnish Landlord, from time to time, upon Landlord's written
request, with financial statements reflecting Tenants current financial
condition. Tenant represents and warrants that all financial statements,
records and information furnished by Tenant to Landlord in connection with
this Lease are true, correct and complete in all respects.
l. Further Assurances. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.
m. Mortgagee Protection. Tenant agrees to send by certified or registered mail
to any first mortgagee or first deed of trust beneficiary of Landlord whose
address has been furnished to Tenant, a copy of any notice of default
served by Tenant on Landlord. If Landlord fails to cure such default within
the time provided for in this Lease, such mortgagee or beneficiary shall
have an additional ten (10) days to cure such default; provided that if
such default cannot reasonably be cured within that ten (l0) day period,
then such mortgagee or beneficiary, shall have such additional time to cure
the default as is reasonably necessary under the circumstances.
n. Prior Agreements; Amendments. This Lease contains all of the agreements of
the parties with respect to any matter covered or mentioned in this Lease,
and no prior agreement or understanding pertaining to any such matter shall
be effective for any purpose. No provisions of this Lease may be amended or
added to except by an agreement in writing signed by the parties or their
respective successors in interest.
o. Recording. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute
and acknowledge a "short form" memorandum of this Lease for recording
purposes.
p. Severability. A final determination by a court of competent jurisdiction
that any provision of this Lease is invalid shall not affect the validity
of any other provisions, and any provisions so determined to be invalid
shall, to the extent possible, be construed to accomplish its intended
effect.
q. Successors and Assigns. This Lease shall apply to and bind the heirs,
personal representatives, and permitted successors and assigns of the
parties.
r. Time of the Essence. Time is of the essence of this Lease.
s. Waiver. No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant shall impair such right or remedy or be
construed as a waiver of such default.
39. OPTION TO EXTEND LEASE TERM.
Grant of Options
Landlord hereby grants to Tenant one option (the "Option") to extend the
Lease Term for additional term of five years (the "Extension)", on the same
terms and conditions as set forth in the Lease, but at an increased rent as
negotiated. The Option shall be exercised only by written notice delivered
to Landlord at least one hundred twenty (120) days before the expiration of
the Lease Term. If Tenant fails to deliver Landlord written notice of the
exercise of an Option within the prescribed time period, such Option shall
lapse, and there shall be no further right to extend the Lease Term. The
Option shall be exercisable by Tenant on the express conditions that (a) at
the time of the exercise, and at all times prior to the commencement of
such Extension, Tenant shall not be in default under any of the provisions
of this Lease and (b) Tenant has not been ten (10) or more days late in the
payment of rent more than a total of three (3) times during the Lease Term
.
The receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default; it shall constitute only a waiver of timely payment
for the particular Rent payment involved.
20
No act or conduct of landlord, including, without limitation, the acceptance of
keys to the Premises shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only a written notice from
Landlord to Tenant shall constitute acceptance of the surrender of the Premises
and accomplish a 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.
The parties hereto have executed this Lease as of the dates set forth below.
LANDLORD TENANT
THE BARTELL DRUG COMPANY PACIFIC TRAIL, INC./LONDON FOG INDUSTRIES
By: By:/s/ William D. Richins
--------------------------- -------------------------
Title: Title:EVP & CFO
------------------------ ----------------------
By:
-------------------------
Title:
----------------------
CONSULT YOUR ADVISORS - This document has been prepared for approval by your
attorney. No representation or recommendation is made by Chiles & Company as to
the legal sufficiency or tax consequences of this document or the transaction to
which it relates. These are questions for your attorney.
In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial hygienist or other person,
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.
21
ACKNOWLEDGMENT OF LESSOR
STATE OF WASHINGTON )
) SS.
COUNTY OF KING )
On this ____________________ day of _____________________________ ,19__ ,
before the undersigned, a Notary Public in and for the State of Washington,
personally appeared
____________________________________________________________________________ to
me known to be the __________________________ and _______________________ of the
corporation that executed the within and foregoing lease, and acknowledged the
said instrument to be the free and voluntary act and deed of said corporation,
for the uses and purposes therein mentioned, and on oath stated that they were
authorized to execute said instrument and that the seal affixed is the corporate
seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
-------------------------------------
NOTARY PUBLIC in and for the State of
Washington, residing at________________
22
ACKNOWLEDGMENT OF LESSEE
(Corporate)
STATE OF CONNECTICUT )
) ss.
COUNTY OF FAIRFIELD )
On this 30 day of Sept. ,1994, before me personally appeared William D.
Richins and to me known to be the Exec. V.P. & CFO and respectively, of the
corporation that executed the within and foregoing lease, and acknowledged the
said instrument to be the free and voluntary act and deed of said corporation,
for the uses and purposes therein mentioned, and on oath stated that they were
authorized to execute said instrument and that the seal affixed is the corporate
seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.
/s/
-------------------------------------
NOTARY PUBLIC in and for the State of
Connecticut, residing at Darien Fairfield County.
23
EXHIBIT A
Floor Plan of Premises
24
[GRAPHIC OMMITTED]
[GRAPHIC OMMITTED]
EXHIBIT B
Legal Description
The Property, situated in the City of Seattle, County of King, State of
Washington, is located at 1700 Westlake Avenue North, and further described as
LAKE UNION SHORE LANDS ADDITION; LOT 1 THRU 10 BLOCK 92
25
EXHIBIT C
Work Letter
This workletter is dated August 23, 1994 between The Bartell Drug Company as
Lessor and Pacific Trail, Inc. as Lessee.
A. This workletter is attached to and forms a part of the certain office lease
date August 23, 1994, pursuant to which landlord had leased to tenant office
space in the building to be known as Lake Union Building.
B. Landlord desires to make improvements to the premises, and tenant desires to
have landlord make them, prior to occupancy, upon the terms and conditions
contained in this workletter.
1. Definitions. In this workletter, some defined terms are used. They are:
(a) Tenant's representative: Gary Hansen
(b) Landlord's representative: Lyn Saucier
(c) Turnkey improvements will be provided pursuant to preliminary
space plan by Ken Slater of Marvin Stein & Associates dated August 8, 1994.
(d) Programming information has been provided by architect regarding
business manner of operation, number and size of rooms, special
requirements, functional requirements, anticipated growth and the like.
(e) Programming information provided is considered final.
(f) Final space plan: a drawing of the premises clearly showing the
layout and relationship of all departments and offices, depicting
partitions, door locations, types of electrical and data and telephone
outlets, and delineation of furniture and equipment. The final space plan
has been preceded by preliminary space plans.
(g) Preliminary estimates of construction costs have been received and
serve as the basis for the negotiated rental rate.
(h) Working drawings: construction documents detailing the
improvements and conforming to codes, complete in form and content and
containing sufficient information and detail to allow for competitive
bidding or negotiated pricing by contractors selected and engaged by
landlord.
(s) Construction schedule: a schedule depicting the relative time
frames for various activities related to the construction of the
improvements in the premises.
(j) Tenant improvement cost proposal: a final estimate of costs of the
improvements that are depicted on the working drawings, including all
architectural, engineering, contractor, and any other costs, and clearly
indicating the cost, if any, that is to be paid by tenant pursuant to
paragraph 7.
(k) Maximum approved cost: $600,000
(l) Improvements:
(1) The development of space plans and working drawings, including
supportin engineering studies (that is, structural design or analysis,
lighting or acoustical evaluations, or others as, determined by landlord's
architect).
(2) All construction work necessary to augment the base building,
creating the details and partitioning shown on the space plan. The work
will create finished ceilings, walls, and floor surfaces, as well as
complete HVAC, lighting, electrical, and fire protection systems.
(m) Cost of the improvements: the cost includes, but is not limited
to, the following:
(1) All architectural and engineering fees and expenses.
(2) All contractor and construction manager costs and fees.
(3) All permits and taxes.
(n) Change order: any change, modification, or addition to the final
space plan or working drawings after tenant has approved the same.
26
(o) Base building is in place and ready for demolition and new
improvements.
(p) Building standard: component elements utilized in the design and
construction of the improvements that have been pre-selected by the
landlord to ensure uniformity of quality, function, and appearance
throughout the building. These elements include, but are not limited to,
ceiling systems, doors, hardware, walls, unspecified floor coverings,
window coverings, light fixtures, and HVAC components.
2 . Representative. Landlord appoints landlord's representative to act for
landlord in all matters associated with this workletter. Tenant appoints
tenant's representative to act for tenant in all matters associated with this
workletter. All inquiries, requests, instructions, authorization, and other
communications with respect to the matters covered by this workletter will be
made to landlord's representative or tenant's representative, as the case may
be. Tenant will not make any inquiries of or request to, and will not give any
instructions or authorizations to, any employee or agent of landlord, including
without limitation landlord's architect, engineers, and contractors, or any of
their agents or employees, with regard to matters associated with this
workletter. Either party may change its representative under this workletter at
any time by providing 3 days' prior written notice to the other party.
3. Project Design and Construction. All work will be performed by designers and
contractors selected and engaged by landlord.
4. Cost Responsibilities.
(a) Landlord: Landlord will pay up to the amount of $600,000 for the
cost of improvements. The conservative preliminary estimate is $575,000.
Should total cost of tenant improvements fall below $573,000, landlord
shall give tenant a dollar for dollar credit for free rent is available to
tenant to be applied to the first months rent (or successive months rent)
if tenant spends $573,000 or less for tenant improvements.
(b) Tenant:: Tenant will pay for:
(1)Tenant-initiated changes to the final space plan or working
drawings after tenant's approval.
(2) Tenant-initiated change orders, modifications, or additions to the
improvements after tenant's approval of the working drawings.
(3) All costs in excess of the $600,000 that are not included in (1)
or (2).
5. Landlord's Approval. Landlord, in its sole discretion, may withhold the
approval of any final space plan, working drawings, or change order that:
(a) Exceeds or adversely affects the structural integrity of the
building, or any part of the heating, ventilating, air conditioning,
plumbing, mechanical, electrical, communication, or other systems of the
building;
(b) Is not approved by the holder of any mortgage or deed of trust
encumbering the building at the time the work is proposed;
(c) Would not be approved by a prudent owner of property similar to
the building;
(d) Violates any agreement that affects the building or binds
landlord;
(e) Landlord reasonably believes will increase the cost of operation
or maintenance of any of the systems of the building;
(f) Landlord reasonably believes will reduce the market value of the
premises or the building at the end of the term;
(g) Does not conform to applicable building code or is not approved by
any governmental, quasi-governmental, or utility authority with
jurisdiction over the premises; or
(h) Does not conform to the building standard.
6. Schedule of Improvement Activities
(a) After tenant's final approval of a preliminary space plan (which
will then be the "final space plan"), landlord will promptly cause to be
prepared an estimate of construction costs. If the estimated construction
cost is less than the tenant finish allowance, the estimated construction
cost will be deemed approved without a required response from tenant. If
the estimated construction cost is more than the tenant finish allowance
landlord will so notify tenant in writing and tenant will establish the
maximum approved cost by either:
27
(1) Agreeing in writing to pay the amount by which the estimated
construction cost exceeds the tenant finish allowance or;
(2) Agreeing to have the space plan revised by landlord's architect in
order to assure that the estimated construction cost is either:
(A) No more than the tenant finish allowance; or
(B) Exceeds the tenant finish allowance by an amount that the
tenant agrees to pay pursuant to (1)
Tenant will give immediate attention to establishing the maximum approved
cost and respond to landlord within 2 business days. Upon tenant's timely
fulfillment of its obligations in either clause (1) or clause (2), the
maximum approved cost will be established.
(b) Upon establishment of the maximum approved cost, landlord will
cause to be prepared and delivered to tenant the working drawings, the
construction schedule, and the tenant cost proposal for the improvements in
accordance with the final space plan. If the tenant cost proposal is less
than the maximum approved cost, the landlord will take steps necessary to
commence construction of the improvements to the premises. If the tenant
cost proposal is more than the maximum approved cost, landlord will so
notify tenant in writing and tenant will (1) agree in writing to pay the
amount by which the tenant cost proposal exceeds the maximum approved cost
or (2) request landlord to revise the working drawings in order to assure
that the tenant cost proposal is no more than the maximum approved cost.
Tenant will give its immediate attention to the tenant cost proposal
approval process and to respond to landlord within 3 business days after
submissions.
(c) Following approval of the working drawings, and tenant cost
proposal, by landlord and tenant, landlord will cause application to be
made to the appropriate governmental authorities for necessary approvals
and building permits. Upon receipt of the necessary approvals and permits,
landlord will begin construction of the improvements, subject to the rights
of tenant in possession or upon vacation of premises by tenant in
possession.
7. Payment by Tenant: The amount payable by tenant for tenant improvements above
$600,000 will be billed periodically, as the work proceeds, and tenant agrees to
pay each such invoice within 15 business days following its delivery.
8. Change Orders. Tenant may authorize changes to the improvements during
construction only by written instructions to landlord's representative, on a
form approved by landlord. All such changes will be subject to landlord's prior
written approval in accordance with paragraph 5. Prior to commencing any change,
landlord will prepare and deliver to tenant, for tenant's approval, a change
order setting forth the total cost of such change, which will include associated
architectural, engineering, construction contractor's costs and fees, completion
schedule changes, and the cost of landlord's overhead. If tenant fails to
approve such change order within 5 business days after delivery by landlord,
tenant will be deemed to have withdrawn the proposed change and landlord will
not proceed to perform the change. Upon landlord's receipt of tenant's approval,
landlord will proceed with the change.
9. Completion and Commencement Date. Tenant's obligation for payment of rent
pursuant to the lease will commence on date of possession, however, the
commencement date and the date for the payment of rent may be delayed on a
day-by-day basis for each day the substantial completion of the improvements
are delayed by landlord or its contractors or agents. The payment of rent will
not be delayed by a delay of substantial completion due to tenant. The following
are some examples of delays that will not affect the commencement date and the
date of which rent is to commence under the lease:
(a) Late submissions of programming information;
(b) Change orders requested by tenant;
(c) Delays in obtaining non-building standard construction materials
requested by tenant;
28
(d) Tenant's failure to approve timely any item requiring tenant's
approval; and
(e) Delays by tenant according to paragraph 6, in accordance of
Article 2(d) in the lease.
In the event that substantial completion of the improvements is delayed by
landlord, its contractors, or agents, the commencement date will be the
date of substantial completion of the improvements, subject only to the
completion of landlord's punchlist items(that is, those items which do not
materially interfere with tenant's use and enjoyment of the premises).
Landlord and tenant will confirm the commencement date in accordance with
Article 2(d) of the lease.
10. Condition of the Premises
(a) Prior to the commencement date, tenant will conduct a walk-through
inspection of the premises with landlord and prepare a punch-list of items
needing additional work by landlord. Other than the items specified in the
punch-list and latent defects (as defined below), by taking possession of
the premises, tenant will be deemed to have accepted the premises in their
condition on the date of delivery of possession and to have acknowledged
that landlord has installed the improvements as required by this workletter
and that there are no items needing additional work or repair. The
punch-list will not include any damage to the premises caused by tenant's
move-in or early access, if permitted. Damage caused by tenant will be
repaired or corrected by landlord at tenant's expense. Tenant acknowledges
that neither landlord nor its agents or employees have made any
representation or warranties as to the suitability or fitness of the
premises for the conduct of tenant's business or for any other purpose, nor
has landlord or its agents or employees agreed to undertake any alterations
or construct any tenant improvements to the premises except as expressly
provided in this lease and this workletter. If tenant fails to submit a
punch-list to landlord prior to the commencement date, it will be deemed
that there are no items needing additional work or repair. Landlord's
contractor will complete all reasonable punch-list items within 30 days
after the walk-through inspection or as soon as practicable after such
walk-through.
(b) A "latent defect" is a defect in the condition of the premises,
caused by landlord's failure to construct the improvements in a good and
workmanlike manner and in accordance with the working drawings, which would
not ordinarily be observed during a walk-through inspection. If tenant
notifies landlord of a latent defect within one year following the
commencement date, then landlord, at its expense, will repair the latent
defect as soon as practicable. Except as set forth in this paragraph 10,
landlord will have no obligation or liability to tenant for latent defects.
11. Adjustments upon Completion. As soon as practicable, upon completion of the
improvements in accordance with this work-letter, landlord will notify
tenant of the rentable area of the premises, the rentable area of the
building, monthly rent, and tenant's share, if such information, was not
previously determinable by landlord. Tenant, within 10 days of landlord's
written request, will execute a certificate confirming such information.
12. Early Occupancy
(a) If, prior to the commencement date of the lease, improvements are
completed to tenant's satisfaction or by mutual agreement, tenant may
occupy the space and pay rent and modify the commencement date of the
lease. If tenant elects early occupancy for a portion of the space, tenant
agrees to pay pro-rata share of the rent.
LANDLORD: TENANT:
/s/ William D. Richins
- ------------------------------ ------------------------------
(For London Fog Industries)
9/23/94
- ------------------------------ ------------------------------
DATE DATE
29
EXHIBIT D
RULES AND REGULATIONS
1. Landlord may from time to time adopt appropriate system(s) and procedures
for the security and/or safety of the building, any person occupying,
using, or entering the building, or any equipment, finishing, or contents
of the building, and tenant will comply with landlord's reasonable
requirements relative to such system s and procedures.
2. The sidewalks, halls, passages, exits, entrances, elevators, and stairways
of the building will not be obstructed by any tenants or used by any of
them for any purpose other than for ingress to and egress from their
respective premises. The halls, passages, exits, entrances, elevators, and
stairways are not for the general public, and landlord will in all cases
retain the right to control and prevent access to such halls, passages,
exits, entrances, elevators, and stairways of all persons whose presence in
the judgment of landlord would be prejudicial to the safety of the building
and its tenants, provided that nothing contained in these rules and
regulations will be construed to prevent such access to persons with whom
any tenant normally deals in the ordinary course of its business, unless
such persons are engaged in illegal activities. No tenant and no employee
or invitee of any tenant will go upon the roof of the building. No tenant
will be permitted to place or install any object (including without
limitation radio and television antennas, loudspeakers, sound amplifiers,
microwave dishes, solar devices or similar devices) on the exterior of the
building or on the roof of the building.
3. No sign, placard, picture, name, advertisement, or written notice visible
from the exterior of tenant's premises will be inscribed, painted, affixed,
or otherwise displayed by tenant on any part of the building or the
premises without the prior written consent of landlord. Landlord will adopt
and furnish to tenant general guidelines relating to signs inside the
building on the office floors. Tenant agrees to conform to such guidelines.
All approved signs or lettering on doors will be printed, painted, affixed,
or inscribed at the expense of the tenant by a person approved by landlord.
Other than draperies expressly permitted by landlord and building standard
mini-blinds, material visible from the outside the building will not be
permitted. In the event of the violation of this rule by tenant, landlord
may remove the violating items without any liability, and may charge the
expense incurred by such removal to the tenant or tenants violating this
rule.
4. No cooking will be done or permitted by any tenant on the premises, except
in areas of the premises which are specially constructed for cooking and
except that the use by the tenant of microwave ovens and Underwriters'
Laboratory approved equipment for brewing coffee, tea, hot chocolate, and
similar beverages will be permitted, provided that such use is in
accordance with all applicable federal, state, and city laws, codes,
ordinances, rules, and regulations.
5. No tenant will employ any person or persons other than the cleaning service
of landlord for the purpose of cleaning the premises, unless otherwise
agreed to by landlord in writing. Except with the written consent of
landlord, no person or persons other than those approved by landlord will
be permitted to enter the building for the purpose of cleaning it. No
tenant will cause any unnecessary labor by reason of such tenant's
carelessness or indifference in the preservation of good order and
cleanliness. Should tenant's actions result in any increased expense for
any required cleaning, landlord reserves the right to assesss tenant for
such expenses.
6. The toilet rooms, toilets, urinals, wash bowls and other plumbing fixtures
will not be used for any purposes other than those for which they were
constructed, and no sweepings, rubbish, rags, or other foreign substances
will be thrown in such plumbing fixtures. All damages resulting from any
misuse of the fixtures will be borne by the tenant who, or whose servants,
employees, agents, visitors, or licensees, caused the same.
7. No tenant will in any way deface any part of the premises or the building
of which they form a part. In those portions of the premises where carpet
has been provided directly or indirectly by landlord, tenant will
30
at its own expense install and maintain pads to protect the carpet under
all furniture having caster other than carpet casters.
8. No tenant will alter, change, replace, or rekey any lock or install a new
lock on any door of the premises. Landlord, its agents, or employees will
retain a pass (master) key to all door locks on the premises. Any new door
locks required by tenant or any change in keying of existing locks will be
installed or changed by landlord following tenant's written request to
landlord and will be at tenant's expense. All new locks and rekeyed locks
will remain operable by landlord's pass (master) key. Landlord will furnish
each tenant, free of charge, with two (2) keys to each door lock on the
premises and two (2) building/access cards. Landlord will have the right to
collect a reasonable charge for additional keys and cards requested by any
tenant. Each tenant, upon termination of its tenancy, will deliver to
landlord all keys and access cards for the premises and building that have
been furnished to such tenant.
9. The elevator designated for freight by landlord will be available for use
by all tenants in the building during the hours and pursuant to such
procedures as landlord may determine from time to time. The moving company
must be a locally recognized professional mover, whose primary business is
the performing of relocation services, and must be bonded and fully
insured. A certificate or other verification of such insurance must be
received and approved by landlord prior to the start of any moving
operations. Insurance must be sufficient, in landlord's sole opinion, to
cover all personal liability, theft or damage to the project, including but
not limited to floor coverings, doors, walls, elevators, stairs, foliage,
and landscaping. Special care. must be taken to prevent damage to foliage
and landscaping during adverse weather. All moving operations will be
conducted at such times and in such a manner as landlord will direct, and
all moving will take place during non-business hours unless landlord agrees
in writing otherwise. Tenant will be responsible for the provision of
building security during all moving operations, and will be liable for all
losses and damages sustained by any party as a result of the failure to
supply adequate security. Landlord will have the right to prescribe the
weight, size, and position of all equipment, materials, furniture, or other
property brought into the building. Heavy objects will, if considered
necessary by landlord, stand on wood strips of such thickness as is
necessary to properly distribute the weight. Landlord will not be
responsible for loss of or damage to any such property from any cause, and
all damage done to the building by moving or maintaining such property will
be repaired at the expense of tenant. Landlord reserves the right to
inspect all such property to be brought into the building and to exclude
from the building all such property which violates any of these rules and
regulations or the lease of which these rules and regulations are a part.
Supplies, goods, materials, packages, furniture, and all other items of
every kind delivered to or taken from the premises will be delivered or
removed through the entrance and route designated by landlord, and landlord
will not be responsible for the loss or damage of any such property unless
such loss or damage results from the negligence of landlord, its agents, or
employees.
10. No tenant will use or keep in the premises or the building any kerosene,
gasoline, or inflammable or combustible or explosive fluid or material or
chemical substance other than limited quantities of such materials or
substances reasonably necessary for the operation or maintenance of office
equipment or limited quantities of cleaning fluids and solvents required in
tenant's normal operations in the premises. Without landlord's prior
written approval, no tenant will use any method of heating or air
conditioning other than that supplied by landlord. No tenant will use or
keep or permit to be used or kept any foul or noxious gas or substance in
the premises.
11. Landlord will have the right, exercisable upon written notice and without
liability to any tenant, to change the name and street address of the
building.
12. Landlord will have the right to prohibit any advertising by tenant
mentioning the building that, in landlord's reasonable opinion, tends to
impair the reputation of the building or its desirability as a building for
offices, and upon written notice from landlord, tenant will refrain from or
discontinue such advertising.
13. Tenant will not bring any animals (except "Seeing Eye' dogs) or birds into
the building, and will not permit bicycles or other vehicles inside or on
the sidewalks outside the building except in areas designated from time to
time by landlord for such purposes
14. All persons entering or leaving the building between the hours of 6pm and
7am Monday through Friday, and at all hours on Saturday, Sundays, and
holidays will comply with such off-hour regulations as landlord
31
may establish and modify from time to time. Landlord reserves the right to
limit reasonably or restrict access to the building during such time
periods.
15. Each tenant will store all its trash and garbage within its premises. No
material will be placed in the trash boxes or receptacles if such material
is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage without
being in violation of any law or ordinance governing such disposal. All
garbage and refuse disposal will be made only through entryways and
elevators provided for such purposes and at such times as landlord
designates. Removal of any furniture or furnishings, large equipment,
packing crates, packing materials, and boxes will be the responsibility of
each tenant and such items may not be disposed of in the building trash
receptacles nor will they be removed by the building's janitorial service,
except at landlord's sole option and at the tenant's expense. No furniture,
appliance, equipment, or flammable products of any type may be disposed of
in the building trash receptacles.
16. Canvassing, peddling, soliciting, and distributing handbills or any other
written materials in the building are prohibited, and each tenant will
cooperate to prevent the same.
17. The requirements of the tenants will be attended to only upon application
by written, personal, or telephone notice at the office of the property
manager of landlord. Property manager may not do anything outside of their
regular duties unless under special instructions from landlord.
18. A directory of the building will be provided for the display of the name
and location of tenants. Any additional name(s) that tenant desires to
place in such directory must first be approved by landlord, and if so
approved, tenant will pay to landlord a charge, set by landlord, for each
such additional name. All entries on the building directory display will
conform to standards and style set by landlord in its sole discretion.
Space on any exterior signage will be provided in landlord's sole
discretion. No tenant will have any right to the use of any exterior sign.
19. Tenant will see that the doors of the premises are closed and locked and
that all water faucets, water apparatus, and utilities are shut off before
tenant or tenant's employees leave the premises, so as to prevent waste or
damage, and for any default or carelessness in this regard tenant will make
good all injuries sustained by other tenants or occupants of the building
or landlord. On multiple-tenancy floors, all tenants will keep the doors to
the building corridors closed at all times except for ingress and egress.
20. Tenant will not conduct itself in any manner that is inconsistent with the
character of the building as a first quality building or that will impair
the comfort and convenience of the tenants in the building.
21. Neither landlord nor any operator of the parking areas within the project,
as the same are designated and modified by landlord, in its sole
discretion, from time to time (the "parking areas") will be liable for loss
of or damage to any vehicle or any contents of such vehicle or accessories
to any such vehicle, or any property left in any of the parking areas,
resulting from fire, theft, vandalism, accident, conduct of other users of
the parking areas and other persons, or any other casualty or cause.
Further, tenant understands and agrees that: (a) landlord will not be
obligated to provide any traffic control, security protection or operator
for the parking areas; (b) tenant uses the parking areas at its own risk;
and (c) landlord will not be liable for personal injury or death, or theft,
loss of, or damage to property. Tenant waives and releases landlord from
any and all liability arising out of the use of the parking areas by
tenant, its employees, agents, invitees, and visitors, whether brought by
any of such persons or any other person.
22. Tenant (including tenant's employees, agents, invitees, and visitors) will
use the parking spaces solely for the purpose of parking passenger model
cars, small vans, and small trucks and will comply in all respects with any
rules and regulations that may be promulgated by landlord from time to time
with respect to the parking areas. The parking areas may be used by tenant,
its agents, or employees, for occasional overnight parking of vehicles.
Tenant will ensure that any vehicle parked in any of the parking spaces
will be kept in proper repair and will not leak excessive amounts of oil or
grease or any amount of gasoline. If any of the parking spaces are at any
time used (a) for any purpose other than parking as provided above; (b) in
any way or manner reasonably objectionable to landlord; or (c) by tenant
after default by tenant under the lease, landlord, in addition to any other
rights otherwise available to landlord, may consider such default an event
of default under the lease.
32
23. Tenant's right to use the parking areas will be in common with other
tenants of the project and with other parties permitted by landlord to use
the parking areas. Landlord reserves the right to assign and reassign, from
time to time, particular parking spaces for use by persons selected by
landlord, provided that tenant's rights under the lease are preserved.
Landlord will not be liable to tenant for any unavailability of tenant's
designated spaces, if any, nor will any unavailability entitle tenant to
any refund, deduction, or allowance. Tenant will not park in any space
designated as: RESERVED, HANDICAPPED, VISITORS ONLY, or LIMITED TIME
PARKING (or similar designation).
24. If the Parking areas are damaged or destroyed, or if the use of the parking
areas is limited or prohibited by any governmental authority, or the use or
operation of the parking areas is limited or prevented by strikes or other
labor difficulties or other causes beyond landlord's control, tenant's
inability to use the parking spaces will not subject landlord or any
operator of the parking areas to any liability to tenant and will not
relieve tenant of any of its obligations under the lease and lease will
remain in full force and effect.
25. Tenant has no right to assign or sublicense any of its rights in the
parking spaces, except as part of a permitted assignment or sublease of the
lease; however tenant may allocate the parking spaces among its employees
or contractors.
26. No act or thing done or omitted to be done by landlord or landlord's agent
during the term of the lease in connection with the enforcement of these
rules and regulations will constitute an eviction by landlord of any tenant
nor will it be deemed an acceptance of surrender of the premises by any
tenant, and no agreement to accept such termination or surrender will be
valid unless in a writing signed by landlord. The delivery of keys to any
employee or agent of landlord will not operate as a termination of the
lease or a surrender of the premises unless such delivery of keys is done
in connection with a written instrument executed by landlord approving the
termination or surrender.
27. In these rules and regulations, tenant includes the employees, agents,
invitees, and licensees of tenant and others permitted by tenant to use or
occupy the premises.
28. Landlord may waive anyone or more of these rules and regulations for the
benefit of any particular tenant or tenants, but no such waiver by landlord
will be construed as a waiver of such rules and regulations in favor of any
other tenant or tenants, nor prevent landlord from enforcing any such rules
and regulations against any or all of the tenants of the building after
such waiver.
29. These rules and regulations are in addition to, and will not be construed
to modify or amend, in whole or in part, the terms, covenants, agreements,
and conditions of the lease.
30. Tenant shall keep landlord advised of the current telephone numbers of
tenants' employees who may be contacted in an emergency; i.e.. fire,
break-in, vandalism, etc..
31. Tenant will not smoke or permit its employee or invitees to smoke in the
building.
33
February 21, 1995
Mr. Gary Hansen
Pacific Trail, Inc.
1310 Mercer Street
Seattle. WA 98109
RE: The Lake Union Building
Pacific Trail Lease Commencement/T.I. Cost
Dear Gary:
This letter is attached to and made a part of that certain office "Lease" and
"Work Letter" dated August 23, 1994, pursuant to which Landlord ("The Bartell
Drug Company") has leased to Tenant ("Pacific Trail. Inc.") office space in The
Lake Union Building.
AMENDMENT TO LEASE AGREEMENT
Lease Commencement Date and Lease Expiration Date
Landlord as a result of unforeseen delays relating to tenant improvements herein
agrees to change the "Commencement of Rent" date from March 1, 1995, to April 1,
1995, and further agrees to add one (1) month to the term of the agreement from
February 29, 2000, to March 31, 2000.
It is understood that rent commencement shall not be subject to "possession" or
completion of tenant improvements, unless possession delayed solely by fault of
landlord or landlords contractors.
Also, please let this letter serve as a technical notification, pursuant to the
"Lease" and "Work Letter" dated August 23, 1994, relating to paragraph six (6).
page twenty-seven (27) entitled "Schedule of Improvement Activities." that the
cost is more than the tenant finish allowance provided by Landlord.
Tenant herein agrees to pay any amounts that exceed the maximum Landlord tenant
finish allowance of $ 600.000.00. pursuant to terms described herein: provided,
however, in no case shall tenant be required to pay more that the sum of
$183.890.50 (tenant cost as of 2/21/95-see attached), unless tenant signs change
orders for additional work.
The total estimated cost of the improvements (as of this writing - per attached
recapitulation) is $783.890.50 of which the Landlords participation
approximates seventy-seventy percent (77%) and Tenants participation
approximates twenty-three percent (23%). Should the total cost change, the
pro-rata shares of the Landlord and Tenant will be adjusted for payment
purposes, until the $600.000.00 maximum has been paid by the Landlord.
Upon the $600.000.00 maximum being paid, the Tenant will be responsible for any
additional amounts as defined in the "Work Letter." subject to the foregoing
limitations.
Paragraph seven (7). page twenty-eight (28)" Payment by Tenant"
Beginning Feb. 28. 1995, and each month end thereafter until paid in full,
Landlord will bill Tenant based on Tenants pro-rata share of tenant improvement
cost, as of that date. Tenant agrees to promptly pay such invoices pursuant to
paragraph seven (7) of the "Work Letter." The first invoice will include tenants
share of the approximate amounts already paid by Landlord as of this writing.
Mr. Gary Hansen
February 17. 1995
Page Two
It is understood that all change orders and requests for payments shall be
directed to Ms Cindy Marks, for review and approval.
London Fog Industries
1332 Londontown Boulevard
Eldersburg, Maryland 21784
Telephone: 410 549-8111
Fax: 410 549-8026
All term and conditions of that certain "Lease" and 'Work Letter' dated August
23, 1994, not expressly changed herein remain in full force and effect.
If this meets with your approval, please sign in the space provided below, and
return two signed copies to me for Landlords signature. Upon full execution, I
will return one copy to you.
Sincerely,
CHILES & COMPANY, INC.
Lyn Saucier
Property Manager
Attachment
cc: Ms. Cindy Marks - London Fog Industries
Mr. Smart Fisher - London Fog Industries
LANDLORD TENANT
By /s/ Jean L. Barber By /s/ C. William Crain
----------------------------- ------------------------------
The Bartell Drug Company/ Pacific Trail, Inc.
G. Henbart Company
Date 2/27/95 Date 2/22/95
----------------------------------- ----------------------------