Exhibit 10.37
LEASE
LAKE UNION STEAM PLANT BUILDING
THIS LEASE is entered into and effective as of October 4, 2002 ("Effective
Date"), between ARE-1201/1208 EASTLAKE AVENUE, LLC, a Delaware limited liability
company ("Landlord") and ZYMOGENETICS, INC., a Washington corporation
("Tenant").
The parties agree as follows:
1. PREMISES/LEASE
1.1 Premises. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord on the terms contained herein all property purchased by
Landlord from Tenant and located at 1201 Eastlake Avenue East, Seattle,
Washington ("Premises"), including (Section 27.2) the land described on Exhibit
A, together with the easements, rights and appurtenances thereto and the
buildings and other improvements located thereon ("Improvements"); including the
Fixed Equipment (Section 8.8) and excluding the Removable Equipment (Section
8.8).
1.2 Operating Lease. Landlord and Tenant stipulate that this Lease
is a true lease and does not represent a financing arrangement. Each party shall
reflect the transactions represented by this Lease in a manner consistent with
"true lease" treatment rather than "financing" treatment in all applicable
books, records and reports (including income tax filings). Tenant intends to
record this Lease as an operating lease for SEC reporting purposes in accordance
with generally accepted accounting principles ("GAAP"), but failure to do so
shall not be considered a default under this Lease.
1.3 Acceptance of Premises. As the prior owner of the Premises,
Tenant designed and constructed substantial modifications to the Improvements on
the Premises and has occupied the Improvements since completion of those
modifications and is therefore completely familiar with the condition of the
Improvements. By entering this Lease, Tenant is deemed to have accepted the
Premises in its current condition, AS-IS and with all faults. To the extent
necessary to comply with its obligations to maintain and repair the Premises,
Tenant shall enforce the warranties and other obligations of contractors and
suppliers for the original construction of the Premises and Landlord shall
cooperate with Tenant in doing so, but Landlord shall have no other
responsibility or liability for the design, construction or condition of
Premises and makes no warranties with respect thereto and Tenant shall reimburse
Landlord for all its reasonable out-of-pocket third party costs and expenses,
including its attorneys' fees, incurred in connection with its cooperation.
Landlord shall not be required to make any repairs or replacements of any kind
whatsoever during the Term. Notwithstanding the sale of the Premises to
Landlord, all warranties and guaranties regarding the development of the
Premises remain with Tenant for the Term and any remaining warranties and
guaranties will be deemed automatically transferred to Landlord upon termination
of this Lease.
2. TERM
2.1 Initial Term. The "Initial Term" of this Lease shall be 15
years commencing on October 4, ("Commencement Date") and ending on October 3,
2017, unless sooner terminated pursuant to any provision hereof. Tenant and
Landlord's affiliate are parties to the Earl Davie Building Lease (Section
15.2). If the Initial Term of the Earl Davie Building Lease is extended by
operation of Section 24.11 of the Earl Davie Building Lease, then the Initial
Term of this Lease will be extended to the same expiration date, and the parties
shall enter into an amendment to this Lease in the form of Exhibit I evidencing
such extension. As used herein, "Term" shall mean the Initial Term and any
Renewal Term (Section 2.2) which becomes effective hereunder.
2.2 Extensions. Provided that Tenant is not in default on exercise
of a right to extend or on the commencement of the Renewal Term (unless such
default is cured within any applicable cure period),
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Tenant shall have the right to extend this Lease for 4 consecutive renewal terms
(each, a "Renewal Term") of 5 years each, with at least 16 months prior written
notice to Landlord. If Landlord does not receive such notice 16 months prior to
the end of a current Term, Tenant's renewal rights shall lapse. The rights to
extend the Lease for the Renewal Terms are personal to Tenant and may not be
assigned, pledged or transferred to any third party. Notwithstanding the
foregoing, such rights may be assigned or transferred to Tenant's Affiliates
(Section 13.2).
2.3 Rent For Renewal Terms. As of the commencement of each Renewal
Term, the Base Rent (Section 3.1) shall be adjusted to the greater of (a) the
fair market rental value of the Premises as of the commencement of the Renewal
Term, or (b) 90% of the Base Rent applicable to the last year of the term prior
to commencement of the applicable Renewal Term. Fair market rental value shall
be the amount of rent which a well-informed tenant, willing, but not obliged to
lease the Premises, would pay, and which a well-informed landlord, willing, but
not obligated to lease, would accept, taking into consideration all uses to
which the Premises is adapted and might in reason be applied, and the then
market terms being offered in the Seattle metropolitan area (e.g. including
Elliott Bay, the University District, Queen Anne/Interbay, Lake Union, Denny
Triangle, etc.) for space reasonably comparable to the Premises. If, after
bargaining in good faith for 30 days (the "Bargaining Period"), the parties have
not reached agreement on the fair market rental value, it shall be established
by binding arbitration in accordance with Section 2.4. Commencing at the start
of the second year of each Renewal Term and continuing each year thereafter, the
Renewal Term's Base Rent shall be increased by 3.5%.
2.4 Arbitration. The arbitration process outlined below must be
commenced no more than 18 months before the first day of the ensuing Renewal
Term and pursued in good faith. Each arbitrator shall be an MAI real estate
appraiser with at least 7 years experience in appraising real property used for
comparable "wet science" biological laboratory and research and development
facilities or such similar uses to which the parties agree ("Arbitrator"). If
the parties are able to reach agreement on a single Arbitrator within 10 days
after the end of the Bargaining Period, that Arbitrator shall determine the fair
market rental value. Otherwise, each party shall select its own Arbitrator and
shall provide the name to the other party within 15 days following expiration of
the Bargaining Period. The two Arbitrators shall meet within 20 days following
their selection and attempt in good faith during such 20 days to reach agreement
on the fair market rental value of the Premises. If the two Arbitrators are
unable to agree, they shall jointly select a third Arbitrator. If they fail to
either agree on the fair market rental value or appoint a third Arbitrator
within 20 days following their appointments, the third Arbitrator shall be
selected by the then Presiding Judge of King County Superior Court upon the
request of either party. Within 10 days after the appointment of the third
Arbitrator, the first two Arbitrators shall each submit in writing to the third
Arbitrator the amount which they propose be established as the Renewal Term's
Base Rent ("Submissions"). The Submissions shall not be disclosed by the third
Arbitrator until the third Arbitrator has received both of the other
Arbitrators' Submissions. Each Arbitrator may include in such Submissions any
information which he/she deems relevant or helpful to the third Arbitrator in
determining the fair market rental value of the Premises, and the third
Arbitrator may not obtain, accept or consider any additional information in
making its decision. The third Arbitrator's determination of the fair market
rental value is strictly limited to selection, as the more reasonable
approximation of the fair market rental value of the Premises, of the amount
stated in one of the Submissions, and third Arbitrator may not select or declare
any third number. The third Arbitrator's decision shall be made within 20 days
after delivery of the Submissions, by a report in writing to each of the parties
and in any event at least 12 1/2 months before the commencement of the Renewal
Term. Each party shall pay the costs of its own Arbitrator and one-half of the
single Arbitrator or the third Arbitrator's fee. If the Arbitrator's
determination of fair market rental value is greater than 110% of the then Base
Rent payable during the 12 months immediately preceding the applicable Renewal
Term, Tenant may elect to rescind exercise of the option by written notice to
Landlord given at least 12 months before the commencement of the Renewal Term.
Notwithstanding the provisions of this Section 2.4, if during the arbitration
period, Tenant and Landlord reach agreement on fair market rental value
(independent of Arbitrator's findings), the arbitration shall be terminated and
the determination of the parties shall govern.
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3. RENT
3.1 Base Rent. Commencing on the Commencement Date, and continuing
on the first of each month thereafter, Tenant shall pay to Landlord $284,220.54
per month ("Base Rent"). Base Rent shall be remitted to the Landlord at its
address stated for notices in this Lease as the same may be amended from time to
time or to such other address required by Landlord in a written notice to Tenant
and shall be due and payable on the first day of each month during the Term and
tendered in cash. Base Rent for any partial month shall be prorated based on the
number of days in the applicable calendar month.
3.2 Increases in Base Rent. Commencing one year after the
Commencement Date and continuing annually thereafter, the Base Rent shall be
increased by 3.5%.
3.3 Intentionally Omitted
3.4 Additional Rent. All amounts other than Base Rent due by
Tenant to Landlord under this Lease shall be deemed "Additional Rent" and
Landlord shall have all of the same remedies for Tenant's failure to pay
Additional Rent as for failure to pay Base Rent. The term "Rent" shall mean the
combined Base Rent and Additional Rent. Tenant's obligations to pay Rent are in
the nature of independent covenants and all Rent shall be paid without demand,
notice, abatement, reduction or offset, except that Additional Rent may be
subject to demand or notice where provided in this Lease.
3.5 Late Fee. If any installment of Base Rent is not received by
Landlord by the 5/th/ of the month, Tenant shall pay to Landlord, on demand, a
late charge equal to six percent (6%) on such overdue installment of Base Rent
(the "Late Fee"). Notwithstanding the foregoing, Landlord agrees that pursuant
to Section 15.2 below, Landlord will deliver notice to Tenant of any such
delinquency and, not more than once each Lease Year, Landlord will waive the
Late Fee if such delinquency is paid within three business days after Tenant's
receipt of such notice. Tenant acknowledges that such late charge represents a
reasonable estimate of the costs Landlord will incur as a result of such late
payment.
3.6 Fines/Penalties. Subject to Section 22, Tenant shall pay and
discharge when due all other amounts and obligations which Tenant assumes or
agrees to pay pursuant to this Lease.
3.7 Abatement of Rent. Except as expressly agreed upon in Sections
10 and 12 below, Tenant's obligations to pay Rent shall not abate during any
period that the Premises or any part thereof are untenantable regardless of the
cause of such untenantability.
3.8 Asset Management Fee. In addition to the Base Rent, Tenant
shall pay to Landlord each month with the Base Rent an asset management fee
equal to one-half of one percent (0.5%) of the Base Rent.
4. USE
4.1 Use. Tenant may use the Premises only for office and
laboratory, and research and development facilities and uses that are a
reasonably necessary adjunct thereto. "Laboratory" as used herein refers to that
portion of the Premises devoted to "wet" laboratory and related research and
development use. Exhibit H shows the current allocation of Laboratory and office
spaces. Changes resulting in more than 50% or less than 25% of the net rentable
square feet of the Premises designated for office use will be considered a
change in use. The methodology which will be used for calculating the percent of
use will be calculated consistent with the methodology as was employed to
calculate the current use percentage as described on Exhibit H (said uses and
the permitted deviation in the ratio being hereinafter referred to as the "Use
Requirements"). Any other uses or changes in uses shall require Landlord's
approval, in accordance with the approval standards set forth in Section 8. The
Premises shall not be used for any purpose which would constitute a public or
private nuisance or waste, or violate the agreements listed on Exhibit B ("Title
Encumbrances").
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4.2 Compliance with Laws. Tenant shall, at its cost, comply with all
Laws (Section 27.2) and the requirements of any board of fire underwriters,
including all modifications required thereby, relating to or affecting the
condition, use or occupancy of the Premises. Upon request of Landlord, Tenant
shall provide Landlord with copies of all documents evidencing Tenant's
compliance with any particular Law specified by Landlord. Tenant shall notify
Landlord in writing immediately of any threatened or actual notice or citation,
regarding an alleged failure of the Premises to comply with any Law.
4.3 Mechanic's Liens. Except for claims for delinquent payments
for which Landlord is contractually obligated, which shall be the sole
responsibility of Landlord, Tenant agrees that during the Term hereof it shall
not do or suffer any waste to the Premises, or cause, suffer or permit any liens
for labor, services or materials to attach to the Premises by reason of any act
or omission of Tenant or person claiming through Tenant. If any lien is filed
arising out of work performed for Tenant, Tenant shall either discharge the lien
or post a bond pursuant to RCW 60.04.161 to remove the lien from the Premises
within 30 days after it receives notice of the lien.
4.4 Quiet Enjoyment. So long as no Event of Default (Section 15.2)
exists hereunder, Landlord covenants that Tenant shall have quiet occupation and
enjoyment of the Premises from any person claiming through Landlord.
4.5 Development Agreement. During the Term, Tenant shall be
responsible for all of Tenant's obligations under that certain Real Estate
Agreement, Development Conditions, and Physical Restrictions for Lake Union
Steam Plant dated May 5, 1993 (the "Development Agreement"). Capitalized terms
used in this Section 4.5 which are not defined in this Lease shall have the
meanings set forth in the Development Agreement. Tenant's obligations under the
Development Agreement shall not include the following:
(a) without impairing Tenant's own obligations to cooperate,
any failure of Landlord to cooperate with the City of Seattle (the "City") as
required by Section 7.1.1 of the Development Agreement;
(b) any exoneration of the City from liability under the
Development Agreement as a result of Landlord's entering into a consent decree
or consent order under Section 7.1.4 of the Development Agreement without the
consent of Tenant;
(c) the costs of any remediation of Hazardous Materials under
any consent decree or consent order under Section 7.1.4 of the Development
Agreement that was entered into without the consent of Tenant unless such
remediation is otherwise an obligation of Tenant under this Lease and its
failure to pursue the same is an Event of Default;
(d) any costs, expenses, penalties, attorneys' or consultants'
fees which become owed to the City under Section 7.1.5 of the Development
Agreement as a result of the release of Historic Contamination by Landlord or
Landlord Related Parties (Section 14); or
(e) any costs, expenses, damages, fees or penalties relating
to the remediation of Historic Contamination that become owed to the City under
Section 7.5 of the Development Agreement as a result of the action of Landlord
or Landlord Related Parties; provided, however, Tenant's use and occupancy of
the Premises and the obligations of Tenant under the Lease to maintain,
construct, alter, expand, repair, or restore any existing or future improvements
on the Premises shall be deemed the sole acts of Tenant hereunder, whether the
same are performed by (a) Tenant, or (b) Landlord on behalf of Tenant as a
result of any Event of Default.
5. MAINTENANCE AND REPAIR
5.1 Tenant's Obligations. Tenant shall keep and maintain all
portions of the Premises in good order and condition, in a manner typical of
other properly maintained and operated facilities of a
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similar nature and in accordance with all Laws and with the standards of
maintenance and repair adhered to by Tenant prior to the Commencement Date.
Tenant shall promptly make all repairs and replacements required in order to
keep and maintain the Premises in such order and condition. Tenant shall also
keep the Premises in compliance with all Laws and the requirements of the
property and environmental insurance coverages. The provisions of this Section
shall not conflict with Tenant's rights to obtain insurance and condemnation
proceeds under Sections 10, 11 and 12. If Tenant fails to perform the required
maintenance and repairs, Landlord shall have the cure rights described in
Section 15.7.
5.2 Condition on Surrender. Upon termination of this Lease, Tenant
shall remove its personal property, repair any damage caused by removal, comply
with any removal and Restoration Requirements (Section 8), and leave the
Premises in good repair and condition, subject to Section 10.3. In addition,
prior to termination of the Lease, Tenant shall perform all decommissioning
required by governmental agencies and shall provide copies of all
decommissioning reports to Landlord. If Tenant has failed to complete the
governmental decommissioning process by the expiration or earlier termination
date of this Lease, and as a result, the Premises cannot be relet, the Tenant
shall be required to continue to pay full Rent and perform its obligations
hereunder until such decommissioning is complete. The foregoing shall also be
considered holding over and be subject to the terms of Section 27.13 if, and for
so long as, Tenant fails to pursue such decommissioning with due diligence. The
Fixed Equipment then existing in the Premises shall be surrendered with the
Premises in good and operating condition and free of any liens, financing leases
or other encumbrances created by or imposed against Tenant, and belong solely to
Landlord.
6. UTILITIES AND TAXES
6.1 Utilities. Subject to Section 22, Tenant shall pay when due
all charges for utility services provided to the Premises including power, water
and sewer, and gas. No interruption of utility service shall give Tenant the
right to abate Rent or terminate this Lease.
6.2 Taxes. Subject to Section 22, Tenant shall pay when due all
Real Property Taxes. "Real Property Taxes" shall mean: (i) the ad valorem
property taxes and other similar taxes levied against the Premises which become
due and payable during the Term, (ii) all installments of assessments imposed by
governmental entities on the Premises which become due and payable during the
Term, and (iii) governmental licensing or similar fees. Real Property Taxes
shall include all taxes and assessments levied against the Premises other than
conveyance taxes arising from Landlord's transfer of the Premises, Landlord's
rental taxes (if any), Landlord's business and occupation taxes, franchise or
net income taxes of Landlord, any estate, succession, gift, capital levy or
similar taxes. If any assessment may be paid in installments, Tenant shall be
responsible only for those installments due and payable during the Term and for
those portions of installments to the extent they accrued during the Lease Term,
even if they are payable thereafter. If Landlord enters into private agreements
for off-site improvements for the benefit of the Premises which are in lieu of
government imposed improvements, Tenant shall pay Landlord's installments
thereunder to the extent they accrued during the Term. Notwithstanding the
foregoing, if the amortization period used in calculating the amount of the
installments is less than the amortization period that would have been used for
the government assessment that would have otherwise been imposed, then Tenant
shall pay a portion of the Landlord's installments due under such private
agreements, to the extent they accrued during the Term, recalculated using the
same amortization period as would have been used for the government assessment.
Tenant shall pay all personal property taxes levied against the Premises as and
when due to the extent the levy thereof is attributable to the Term and all such
taxes are assessed against its own property. It is Landlord's and Tenant's
express intent that all Fixed Equipment identified on Exhibit G and all
substitutions, modifications or additions thereto, is part of the real property
and not personal property. No personal property is being leased by Landlord to
Tenant. Notwithstanding the foregoing, if the Department of Revenue assesses any
personal property taxes relating to the Premises, the Fixed Equipment or this
Lease, Tenant shall pay such taxes, subject to Section 22.
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7. SECURITY DEPOSIT
7.1 General Requirements. Upon execution of this Lease, Tenant
will provide to Landlord a security deposit ("Security Deposit") in the amount
of $568,441.08 (i.e. two months Base Rent). Tenant shall increase the amount of
the Security Deposit to correspond to increases in Base Rent at the time such
adjustments become effective. Tenant can elect to provide the Security Deposit
in the form of either a letter of credit ("LOC"), or pledged marketable
securities from Tenant's corporate cash investment portfolio, or a combination
thereof, variable over the Term. Landlord will hold the Security Deposit as
security for the performance of Tenant's obligations under the Lease. The
Security Deposit will not be considered an advance payment of Rent or a measure
of Tenant's liability for damages. Landlord may, from time to time, without
prejudice to any other remedy, upon the occurrence of an Event of Default, use
all or a portion of the Security Deposit to cure any Event of Default. Following
any such application of the Security Deposit, Tenant will replenish the Security
Deposit to its required amount. Landlord shall transfer the Security Deposit to
any subsequent owner of the Premises. Landlord and its successors and assigns
will not be bound by any assignment or encumbrance of the Security Deposit by
Tenant, provided, however, if Tenant's interest in the Lease has been assigned,
Landlord will return the Security Deposit to such assignee in accordance with
the terms and conditions hereof. Within 30 days following the expiration of this
Lease and the performance by Tenant of all of its obligations hereunder,
Landlord shall return the then existing balance of the Security Deposit to
Tenant. Landlord shall have no obligation to pay interest on the Security
Deposit. If Landlord returns the Security Deposit to Tenant's assignee as
aforesaid, Landlord will have no further obligation to any party with respect
thereto. Tenant shall not encumber the Security Deposit.
7.2 Letter of Credit. During any period that Tenant elects to
satisfy all or any portion of the Security Deposit with an LOC, the LOC must be
an irrevocable and unconditional standby letter of credit, issued by the Bank of
America or its successors or another financial institution reasonably
satisfactory to Landlord and with a term of at least one year substantially in
the form of Exhibit D. Landlord may draw upon the LOC to cure any Event of
Default, as described in Section 7.1. In addition, if at any time there are less
than 30 days remaining before the expiration of the LOC, and if Tenant does not
deliver an extension or replacement of the LOC within 5 business days after
notice from Landlord, Landlord may draw upon the LOC; provided that if Tenant
subsequently provides a replacement LOC, and to the extent Landlord has not
applied the same to any default, Landlord will return the funds drawn to Tenant
without interest.
7.3 Pledged Securities. So long as Tenant's reported Cash Position
(defined below) is at least $50,000,000.00 (the "Cash Position Minimum"), Tenant
may satisfy all or any portion of the Security Deposit with marketable
securities satisfying the criteria stated in this Section 7.3. "Cash Position"
is defined as the sum of unrestricted cash, cash equivalents and marketable
securities as determined by reference to GAAP. If Tenant's reported Cash
Position drops below the Cash Position Minimum at any time, then Tenant shall
immediately convert all of its Security Deposit to an LOC. Tenant may
subsequently satisfy its Security Deposit with marketable securities once Tenant
has again exceeded the Cash Position Minimum for at least two consecutive
quarters. During any period that Tenant elects to satisfy all or any portion of
the Security Deposit with marketable securities, the pledge will be of short
term (2 years or less) fixed income marketable securities from Tenant's
corporate cash investment portfolio, including money market funds, rated not
lower than Aa, AA, A1 or P1 or equivalent by a nationally recognized credit
rating service. The pledged marketable securities will be held by Union Bank of
California or another bank or financial institution mutually approved by
Landlord and Tenant as custodian for Landlord, either in a separate custodian
account or as specially designated securities within a larger custodian account.
The pledge agreement must be substantially in the form of Exhibit E and provide
Landlord with a perfected first lien security interest in the pledged
securities. The custodial agreement must be substantially in the form of Exhibit
F and provide direct access authorization which would permit Landlord in an
Event of Default, without approval of Tenant, to authorize the sale of the
securities and the withdrawal of the proceeds thereof (not to exceed the amount
of the then required Security Deposit) for application by Landlord to cure any
Event of Default, as described in Section 7.1. So long as the value of the
pledged securities comply with the requirements of this Lease, Tenant will be
entitled to retain all interest and other earnings generated by the pledged
securities. If the market value
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of the pledged securities drops below the required amount of the Security
Deposit, Tenant will immediately add additional marketable securities to the
pledge to increase the value of the pledged securities to equal or exceed the
required level. Failure of Tenant to increase the pledged securities as required
within 3 business days of notice from Landlord and/or the account custodian will
constitute an Event of Default. Tenant will have the right to substitute
marketable securities meeting the rating criteria and having all of the other
characteristics specified above for the securities subject to the pledge.
8. ALTERATIONS
8.1 General. All alterations of Premises shall be made at Tenant's
sole cost and expense. All alterations shall be made in a good and workmanlike
manner and in compliance with all Laws and insurance requirements and Tenant
shall enforce any warranties to the extent necessary to cause any defects in
workmanship or materials to be corrected. Subject to Section 8.6, all
alterations shall be fully consistent with the overall character of the Premises
as a first class scientific research and development facility (the "Function
Requirements") and the Use Requirements. Tenant shall indemnify, defend and hold
Landlord harmless from all claims, costs (including attorneys' fees and costs)
or damage occurring in connection with Tenant's alterations; notwithstanding the
foregoing, Tenant shall not be liable to reimburse Landlord for Landlord's
overhead and expenses in reviewing any plans, specifications and other documents
or in otherwise confirming Tenant's conformance to the requirements of this
Section 8 ("Review Costs") except that for Category D and E Alterations, Tenant
shall pay Landlord a fee equal to the lesser of $10,000 or 5% of all costs
incurred by Tenant or its contractors or agents in connection with any Category
D or E Alteration, to defray Landlord's Review Costs. Prior to commencing any
alterations, Tenant shall obtain all necessary permits from governmental
authorities. Irrespective of Landlord's receipt, review and any approval of the
plans and specifications for Tenant's alterations, Tenant, and not Landlord,
shall have sole responsibility for the accuracy or sufficiency of the plans and
specifications, their compliance with applicable Laws, codes, regulations or
statutes, and their fitness for Tenant's purpose. If any alterations by Tenant
trigger any legal requirements to make other modifications to the Premises,
Tenant shall make such modifications at its sole cost and expense. Tenant shall
provide to Landlord as-built drawings for all alterations by Tenant promptly
after completion of the alteration. Except for Removable Equipment, all
alterations shall become the property of Landlord immediately upon installation
or completion and shall be subject to all of the terms of this Lease. Prior to
commencing any Category "B-E" Alteration, Tenant must deliver to Landlord
evidence of insurance from all contractors and subcontractors reasonably
satisfactory to Landlord to protect Landlord against liability for personal
injury or property damage during construction, naming Landlord as an additional
insured.
8.2 Category "A" Alterations. An alteration is a "Category A
Alteration" if the estimated cost of such alteration is less than $5,000 and the
alteration does not fall within the definition of Category D or E Alterations.
For Category A Alterations, in addition to the requirements of Section 8.1,
Tenant will deliver notice to Landlord describing the alteration promptly after
its completion, in the manner stated in Section 27.3.
8.3 Category "B" Alterations. An alteration is a "Category B
Alteration" if the estimated cost of such alteration is between $5,000 and
$25,000, and the alteration does not fall within the definition of Category D or
E Alterations. For Category B Alterations, in addition to the requirements of
Section 8.1, Tenant shall notify Landlord, in the manner stated in Section 27.3,
of the planned alteration at least 5 business days prior to commencement of the
work, providing a brief description of the work, the estimated cost, and any
permit drawings, if applicable.
8.4 Category "C" Alterations. An alteration is a "Category C
Alteration" if the estimated cost of such alteration exceeds $25,000 and the
alteration does not fall within the definition of Category D or E Alterations.
For Category C Alterations, in addition to the requirements of Section 8.1,
Tenant shall notify Landlord, in the manner stated in Section 27.3, of the
planned alteration at least 10 business days prior to the commencement of the
work, providing a description of the work, the estimated cost and any permit
drawings for Landlord's review and approval. Landlord will not withhold its
approval of the alteration, however Landlord may impose reasonable conditions on
the alteration to the extent necessary to protect its investment, provided that
Landlord may not require Tenant to restore the Premises or
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remove the Category C Alteration as a condition of its consent. For Category C
Alterations, if Landlord does not respond to Tenant's notice of such alteration
within the 10 business day period, Landlord shall be deemed to have approved
such alteration without conditions.
8.5 Category "D" Alterations. An alteration is a "Category D
Alteration," regardless of estimated cost, if such alteration does not fall
within the definition of a Category E Alteration, and either (a) such alteration
when aggregated with past alterations and concurrent alterations, fails to
comply with the Use Requirements, or (b) such alteration results in a net change
in rentable square footage for any Function which is outside of the "Function
Tolerances" set forth in the Table of Uses contained in Exhibit H.
"Function" is defined by reference to physical and functional
distinctions evident in the floor plans attached as Exhibit H. For Category D
Alterations, in addition to the requirements of Section 8.1, Tenant must obtain
Landlord's prior written approval, which shall not be unreasonably withheld. To
request Landlord's approval, Tenant shall provide to Landlord schematic drawings
for Category D Alterations and Landlord shall respond with its comments on such
proposed alteration within 10 business days after receipt thereof. Such approval
is also subject to Landlord's subsequent 10 business day review and approval of
the construction drawings for the proposed alteration. Landlord shall be
required to approve the Category D Alteration and the construction drawings, if
(i) Landlord had previously approved the schematic drawings, and (ii) the
construction drawings reflect the same alterations as such schematic drawings.
If Landlord disapproves of either the schematic drawings or the construction
drawings, it shall provide Tenant with reasonably detailed reasons therefor.
Failure to provide any such notice shall not be construed as an approval of or
consent to any alteration. Landlord may condition its approval of Category D
Alterations on a Restoration Requirement (Section 8.7).
8.6 Category "E" Alterations. An alteration is a "Category E
Alteration," regardless of estimated cost, if such alteration (a) fails to
comply with the Function Requirements, (b) incorporates materials or employs
construction standards that are of a materially lesser quality than those used
in the then existing Premises, (c) decreases the number of net rentable square
feet in the Premises, (d) involves any alterations to the foundation, roof or
structural components of the Improvements, (e) alters the exterior appearance of
the Premises (but specifically excluding landscaping, Removable Equipment,
antennas or mechanical systems on the roof, and signage when reasonably required
for Tenant's business); (f) is designed for any use that is not expressly
permitted under Section 4.1; (g) results in Laboratory space being improved for
use as a "Process Lab" (defined by reference to Exhibit H) outside of the
"Extreme Max" Function Tolerances set forth in Exhibit H; (h) results in more
than 60% of the Premises being improved for office use; or (i) results in more
than 80% of the Premises being improved for Laboratory use (Section 4.1). For
Category E Alterations, in addition to the requirements of Section 8.1, Tenant
must request Landlord's prior written approval, which is subject to Landlord's
sole discretion. To request Landlord's approval, Tenant shall provide to
Landlord schematic drawings for Category E alterations and Landlord shall
respond with its comments on the proposal within 10 business days after receipt
thereof, which is subject to Landlord's subsequent 10 business day review and
approval of the construction drawings. Landlord shall approve the Category E
Alteration and the construction drawings, if (i) Landlord had previously
approved the schematic drawings, and (ii) the construction drawings reflect the
same alterations as such schematic drawings. If Landlord disapproves of either
the schematic drawings or the construction drawings, it shall provide Tenant
with reasonably detailed reasons therefor. Failure to provide any such notice
shall not be construed as an approval of or consent to any alteration. Landlord
may condition its approval of Category E Alterations on a Restoration
Requirement.
8.7 Restoration Requirement and Restoration Deposit. Landlord may
condition its approval of Category D and E Alterations on a requirement that
Tenant remove such alterations at the end of the Term and fully restore the
Premises to the location, size, design, configuration, condition and state of
improvement and fixturing that existed immediately prior to making such
alterations and consistent with the degree of maintenance and repair required by
this Lease (the "Restoration Requirement"). If Landlord conditions its approval
of a Category D or E Alteration on a Restoration Requirement, Landlord may
further require that Tenant post a deposit (the "Restoration Deposit") in an
amount equal to Landlord's reasonable estimate of the removal and restoration
costs in any circumstance
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in which the same exceed $100,000 and which shall be subject to the same terms
and conditions as those that are applicable to the Security Deposit; provided,
however, the Restoration Deposit shall be returned to Tenant to the extent and
at the earlier of such time as (a) Landlord waives its requirement in writing
that such alterations be removed and the Premises restored, which election shall
be at Landlord's sole and absolute discretion, or (b) Tenant completes the
removals and restorations, Landlord accepts the same as having complied with
Tenant's obligations under this section, and Tenant provides Landlord with final
lien waivers and evidence of payment for all of the costs and expenses incurred
to do so. Notwithstanding the foregoing, in no event shall Tenant be required to
post a Restoration Deposit unless (a) Landlord has made a good faith
determination that Restoration will likely be required and (b) Tenant's cash
flow position drops below the Cash Position Minimum (Section 7.3).
8.8 Fixed and Removable Equipment. This Lease arises
simultaneously with the sale of the Premises by Tenant to Landlord pursuant to
that certain Agreement of Purchase and Sale dated August 29, 2002, as amended
(the "Purchase Agreement"). In order to establish which elements and/or pieces
of equipment within the Premises were included in the sale and which were not,
the parties applied the criteria listed below to develop the listing contained
on Exhibit G containing those items which were considered affixed and part of
the Premises. All other items not listed on Exhibit G were considered personal
property retained by Tenant. "Fixed Equipment" is defined as the equipment
listed on Exhibit G, plus any new equipment brought onto the Premises which
either replaces the items listed on Exhibit G, has the same the physical and
functional distinctions as the equipment listed on Exhibit G, or satisfies the
criteria stated below.
FIXED EQUIPMENT CRITERIA:
1) Equipment that is built into the facility in such a manner
that it will require the removal of walls, floors, ceilings or
additions to or modifications of existing structural support,
whether temporary or permanent, to install or relocate it;
2) Equipment that is connected to common building systems in such
a way that the service must be modified outside the local area
or room where the equipment is located when the equipment is
disconnected; or
3) Equipment that provides service to other Fixed Equipment or
without which such other Fixed Equipment would not be
functional.
As new equipment is brought into the Premises, the determination of
whether such equipment is considered Fixed Equipment or Removable Equipment will
be made by using the physical and functional distinctions evident in the listing
attached as Exhibit G and where that does not provide sufficient guidance,
applying the above Fixed Equipment criteria. If any alteration is intended to
include attached equipment, Tenant shall give written notice to Landlord of its
suggested classification as either Fixed or Removable when it gives the notices
or requests the approvals as required above. New Fixed Equipment shall become
Landlord's property immediately. No Fixed Equipment may be leased or subject to
any lien or security interest by Tenant.
9. INSURANCE
9.1 Tenant's Insurance. Tenant shall maintain at its sole cost and
expense the following insurance on the Premises, and in all cases such policies
shall name as additional insureds (a) Landlord, (b) any lender of Landlord
holding any security interest in the Premises, and (c) any management company
retained by Landlord to manage the Premises:
9.1.1 Property. Insurance against loss or damage to the
Premises on an all risk basis, including sprinkler damage and flood for an
amount not less than the actual replacement cost of the Premises. The insurance
shall include coverage from business interruption and extra expense for a period
of not less than 18 months. Tenant shall also carry earthquake insurance and
insurance against damage caused by terrorism and acts of war to the extent the
same is or are available at commercially
9
reasonable rates and is required by Landlord. In determining whether such
insurance is available at a commercially reasonably rate, the parties will take
into consideration the cost and availability of similar policies for Landlord's
(or its affiliates') other Seattle properties (or in similarly rated seismic
areas if Landlord or its affiliates no longer own other Seattle properties). At
Tenant's option, the Premises may be included in Landlord's (or its affiliates')
blanket policy of insurance, if and for so long as the same is maintained by
Landlord (or its affiliates), in which case the cost of insurance allocable to
the Premises will be based on the insurer's cost calculations. In addition,
Tenant shall maintain during the Term all risk insurance for Tenant's personal
property (including business interruption and extra expense coverage) covering
the full replacement cost of all property, improvements and equipment placed in
or on the Premises by Tenant, with the understanding that the proceeds of such
policies shall be paid to and belong to Tenant.
9.1.2 Liability. Commercial liability insurance with a
combined single limit (including umbrella) of at least $10 million per
occurrence and $10 million in the aggregate, naming Landlord as an additional
insured and such insurance shall be primary to and not contributory with any
insurance carried by Landlord regarding events that occur in the Premises.
9.1.3 Boiler. Insurance against loss or damage from explosion
of any steam or pressure boilers or similar apparatus located in or about the
Premises in an amount not less than the actual cost to repair or replace the
insured equipment/machinery. At Tenant's option, the Premises may be included in
Landlord's (or its affiliates') blanket policy of insurance, if and so long as
the same is maintained by Landlord (or its affiliates), in which case the cost
allocable to the Premises will be based on the insurer's cost calculations.
9.1.4 Builder's Risk. Whenever Tenant, whether as Landlord's
construction agent or otherwise, is engaged in alterations costing in excess of
$5 million, Tenant shall obtain completed value builder's risk insurance.
9.1.5 Environmental Insurance. To the extent available at a
commercially reasonable rate, pollution legal liability insurance with a limit
of not less than $10,000,000 covering the Premises and contamination therefrom.
In determining whether such insurance is available at a commercially reasonable
rate, the parties will take into consideration the cost and availability of
similar policies for other of Landlord's (or its affiliates') similar
properties. Such insurance shall be on a claims-made basis. At Tenant's option,
the Premises may be included in Landlord's (or its affiliates') blanket policy
of insurance, if and for so long as Landlord (or its affiliates) maintains such
policies, in which case the cost of such insurance allocable to the Premises
will be based on the insurer's cost calculations.
9.1.6 Workers' Compensation. Tenant shall maintain workers'
compensation insurance with no less than the minimum limits required by law.
9.1.7 Other Tenant Insurance. In addition to the insurance
coverage listed above in this Section 9.1, at Tenant's and Landlord's option,
Tenant may be included in Landlord's (or its affiliates') blanket policy for
other insurance (e.g. mold insurance), if and for so long as Landlord (or its
affiliates) maintains such policies, in which case the cost of such insurance
allocable to the Premises will be based on the insurer's cost calculations.
9.1.8 Landlord's Evidence of Insurance. In those instances
where Tenant is included in Landlord's (or its affiliates') blanket policies of
insurance, at Tenant's request, Landlord shall provide Tenant with insurance
certificates, or such other reasonable evidence of coverage under such policies.
9.2 Rating. The insurance required by Section 9.1 shall be written
by companies rated not less than A - and having a size rating of X or higher in
the current edition of A. M. Best's Key Rating Guide, and all such companies
shall be authorized to do insurance business in Washington, or otherwise agreed
to by Landlord. The insurance policies shall be in amounts sufficient at all
times to satisfy any coinsurance requirements thereof. If said insurance or any
part thereof shall expire or be withdrawn,
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Tenant shall immediately obtain new or additional insurance reasonably
satisfactory to Landlord. As of the date of the Lease, Tenant's insurers are
rated A++ (Chubb) and A+ (FM Global).
9.3 Mortgagee. Each insurance policy referred to in Sections 9.1.1,
9.1.3 and 9.1.4, shall contain standard non-contributory mortgagee clauses in
favor of any mortgagee. Each such policy shall provide that the issuer will
endeavor to notify the mortgagee if there are any material changes to the
policy.
9.4 Renewal. Tenant shall pay when due all premiums for the insurance
required by this Section 9 and shall deliver to Landlord copies of any insurance
policy upon Landlord's request and a certificate or other evidence (reasonably
satisfactory to Landlord) of the existing policies and of renewal or replacement
policies prior to the policy expiration date (which may be by extension of the
existing policy). If Tenant fails to comply with the requirements of this
Section 9 within 5 business days after written notice by Landlord to Tenant,
Landlord shall be entitled to procure such insurance pursuant to Section 15.7.
9.5 Landlord's Blanket Policies. As noted in Sections 9.1.1, 9.1.3, and
9.1.5, Tenant shall have the option of obtaining the insurance through
Landlord's (or its affiliates') blanket insurance policies for its portfolio to
obtain improved coverage or cost savings, if and for so long as Landlord (or its
affiliates) maintains such policies. At Tenant's request, Landlord will provide
Tenant with premium rating information, copies of insurance policies, and other
information reasonably necessary to facilitate Tenant's evaluation of this
option.
9.6 Landlord's Insurance. Landlord, at its expense, shall carry
comprehensive general liability insurance with a combined single limit
(including umbrella) of at least $5 million per occurrence and $5 million in the
aggregate.
9.7 Waiver of Subrogation. Notwithstanding any other provisions of
this Lease to the contrary, Landlord and Tenant waive their respective rights of
recovery against the other and the officers, employees, agents and
representatives of such other party for damage to the property of the other by
fire or other casualty to the extent such damage is insured or required
hereunder to be insured. The insurance policies carried by Landlord and Tenant
shall include a waiver of the insurer's rights of subrogation.
10. CASUALTY; OBLIGATION TO RESTORE
10.1 Definitions.
"Casualty" shall mean damage to or destruction of the Premises by
storm, fire, lightning, earthquake, or from any other cause, other than such
damage or destruction which is the subject of a Condemnation (Section 12).
"Excess Insurance Proceeds" shall mean that portion of any Insurance
Proceeds which are received by the Landlord or its mortgagee that are not used
to pay the third party costs of restoring any damage to the Premises or any
other third party out of pocket costs incurred, including attorneys' fees, in
connection with the Casualty, including such costs to obtain the Insurance
Proceeds, but in any event excluding Tenant's Proceeds. The determination of
Excess Insurance Proceeds shall be made upon completion of the Casualty
Restoration.
"Excess Insurance Proceeds Rent Reduction" shall mean a dollar for
dollar reduction to the Base Rent for the then remainder of the Term until
exhausted, from and after the date Landlord receives any Excess Insurance
Proceeds.
"Fair Market Value of Premises" for purposes of this Section 10 is
defined in Exhibit L.
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"Insurance Proceeds" shall mean the proceeds of any insurance
maintained by Tenant under Section 9, which is paid for a Casualty Restoration
(Section 10.4), but excludes Tenant's Proceeds.
"Substantial or Full Casualty" shall mean a Casualty which is
certified, by an affidavit from Tenant's president, chief executive officer or
chief financial officer, stating with a reasonable basis that such event has
rendered the Premises (taken separately from any other properties owned or
leased by Tenant) unavailable for Tenant's continued business operations in
compliance with the Use Requirements and Function Requirements for more than 12
months and the cost of restoring the Premises is reasonably estimated to exceed
$10,000,000.
"Tenant's Proceeds" shall mean any proceeds of insurance policies
payable for Tenant's business interruption or damage to Tenant's personal
property.
10.2 Substantial or Full Casualty in Last 18 Months of Term. If and
only if there is a Substantial or Full Casualty of the Premises during the last
18 months of the then current Term, then (i) Landlord will receive the Insurance
Proceeds; and (ii) provided Tenant has maintained the insurance coverages
required under this Lease, the Lease will terminate effective as of the date of
the Casualty, and Tenant's obligations under the Lease will be replaced by an
obligation for Tenant to pay any deductibles under applicable insurance
policies, plus Rent for the balance of the then current Term.
10.3 Substantial or Full Casualty Prior to Last 18 Months of Term.
If and only if there is a Substantial or a Full Casualty of the Premises prior
to the last 18 months of the then current Term, then Tenant shall have the
option to either (i) continue the Lease pursuant to Section 10.3.1 below; or
(ii) make a rejectable offer to purchase pursuant to Section 10.3.2 below. If
Tenant makes a rejectable offer to purchase, unless and until Tenant closes on
the purchase, or the Lease terminates pursuant to 10.3.2, Tenant shall continue
to pay Rent when due.
10.3.1 Lease Continuation. If there is a Substantial or Full
Casualty of the Premises prior to the last 18 months of the then current Term,
unless Tenant delivers a Termination Notice under Section 10.3.2 below, the
Lease shall continue in full force and effect, and no Rent shall abate under
this Lease as a result of such Substantial or Full Casualty; provided, however,
the Base Rent under this Lease shall be subject to an Excess Insurance Proceeds
Rent Reduction (as defined above). In such event, Tenant's restoration
obligations set forth in Section 10.4 below shall apply. If Tenant elects to
restore, and pursuant to Tenant's rights to sublet or assign under Section 13,
Tenant may exercise up to 2 of its remaining 5 year Renewal Options. In such
event Tenant waives its rescission right under Section 2.4 as it relates to such
exercise only.
10.3.2 Lease Termination. If there is a Substantial or Full
Casualty of the Premises prior to the last 18 months of the then current Term,
and Tenant will not be re-occupying the Premises following such Substantial or
Full Casualty Restoration, then Tenant may elect to terminate this Lease by
delivering notice of such election to Landlord within 90 days after the Casualty
("Casualty Termination Notice"). The Casualty Termination Notice shall include
an offer by Tenant to purchase the Premises from Landlord for the greater of (i)
the original purchase price paid by Landlord for the Premises; or (ii) the Fair
Market Value of the Premises. Within 60 days from Landlord's receipt of the
Casualty Termination Notice, Landlord will notify Tenant whether it will accept
or reject Tenant's offer to purchase the Premises, with Landlord's silence
deemed rejection.
If Landlord accepts Tenant's offer to purchase, then notwithstanding
Section 10.5 below, Tenant shall be entitled to all Insurance Proceeds, and such
purchase shall close on the later of (i) 10 business days after Tenant's receipt
of all Insurance Proceeds; or (ii) 30 days after Tenant's receipt of Landlord's
acceptance of such offer.
If Landlord rejects, or is deemed to have rejected, Tenant's offer to
purchase, then the Lease will be deemed terminated effective as of the date of
Landlord's rejection, with Landlord retaining the Insurance Proceeds. In such
event, Tenant shall also be liable to pay Landlord any applicable deductibles on
insurance policies relating to the Casualty Restoration, and Tenant shall pay
such
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deductible amount to Landlord within 30 days of the date of Landlord's rejection
and the Lease's termination date.
10.4 Obligation to Restore. If there is a Casualty and the Lease
has not terminated by the application of Sections 10.2 or 10.3 above, then,
irrespective of the extent of the Casualty or whether the cause is covered by
insurance, Tenant shall repair, restore and rebuild the Premises in accordance
with the Function Requirements and the Use Requirements and all applicable
building and zoning codes at the time of rebuilding to substantially the same
location, size, design, configuration and condition immediately prior to damage
or destruction (with any departures from said characteristics in accordance with
Section 8 for Alterations) and this Lease shall remain in full force and effect.
Such repair, restoration and rebuilding, including the repair, restoration or
replacement of Fixed Equipment (all of which are herein called a "Casualty
Restoration") shall be commenced as soon as reasonably practical and taking into
consideration a reasonable time for the insurance adjustment of the loss, the
work to design the repairs/replacements, and permitting delays; and shall be
diligently pursued to completion.
10.5. Insurance Proceeds. Insurance Proceeds shall be paid to Tenant
for application to costs of Casualty Restoration; provided that if the proceeds
exceed $3 million (unless Landlord's mortgagee should require a lesser amount,
but in no event less than $1 million), they shall be held by an insurance
trustee pursuant to Section 11. If the Insurance Proceeds are insufficient to
cover the cost of repair, the deficit shall be paid by Tenant. Any Excess
Insurance Proceeds shall be paid and belong to Landlord. For avoidance of doubt,
this Section 10.5 shall not apply to Tenant's Proceeds; in every instance
Tenant's Proceeds shall be paid to and be the sole property of Tenant.
10.6 No Casualty Termination. Notwithstanding any other provisions
of this Lease to the contrary, unless Sections 10.2 or 10.3 above apply, this
Lease may not be terminated by Tenant or Landlord as a result of a Casualty to
the Premises, irrespective of the extent thereof, whether such loss is insured
or when such Casualty occurs, or whether such damage is legally permitted to be
restored, and Tenant and Landlord waive the provisions of any Law permitting
termination of a lease due to destruction of the Premises.
10.7 No Abatement of Rent. Except to the extent stated in Sections
10.2 and 10.3 above, no Rent shall abate under this Lease as a result of any
Casualty, whether or not or to the extent the same may be insured, and
irrespective of whether or not such damage or destruction is prohibited from
being repaired or restored; provided, however, the Base Rent shall be subject to
an Excess Insurance Proceeds Rent Reduction.
11. INSURANCE TRUSTEE
11.1 Procedure. If the Insurance Proceeds exceed $3 million (unless
Landlord's mortgagee should require a lesser amount, but in no event less than
$1 million) and this Lease has not terminated by application of Sections 10.2 or
10.3, then such Insurance Proceeds shall be held by an insurance trustee which
shall be a financial institution jointly selected by Landlord and Tenant and
reasonably satisfactory to any mortgagee(s) (the "Trustee"). If Landlord's
mortgagee is an institutional lender, such lender may elect to be the Trustee.
Each insurer is authorized to make payment directly to the Trustee; and Tenant
and Landlord each appoints such Trustee as its attorney-in-fact to endorse any
check for Insurance Proceeds after approval by Tenant of the Trustee (if other
than Landlord's mortgagee). The Insurance Proceeds, net of reasonable expenses
incurred in obtaining them, shall be retained in a separate interest-bearing
federally insured account by the Trustee for application to restoration, with
the interest added to the proceeds. The Trustee shall make the net Insurance
Proceeds available to Tenant for restoration, in accordance with the provisions
of this Section 11. The net Insurance Proceeds held by the Trustee shall be
disbursed in accordance with the following conditions:
11.1.1 Landlord's Approval. The plans and specifications for
the restoration shall be subject to Landlord's reasonable approval, which
approval shall be granted to the extent that the plans and specifications
conform with the conditions specified in Section 10.4.
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11.1.2 No Default. At the time of any disbursement, no Event
of Default shall exist and no mechanics' or materialmen's liens shall have been
filed and remain undischarged or unbonded except to the extent the disbursement
would satisfy and discharge such liens.
11.2 Disbursements. After all of the uninsured costs to repair and
restore the Premises have been paid by Tenant out of its own funds,
disbursements shall be made monthly by the Trustee to reflect that percentage of
the work that is being paid for with the Insurance Proceeds that has been
completed since the prior disbursement upon receipt of (1) a Draw Certificate
(Section 11.3), (2) completion and performance of the work to date in a good and
workmanlike manner in accordance with the contracts, plans and specifications,
(3) customary lien waivers for the work covered by the prior progress payments,
and (4) other reasonable evidence of cost and payment so that Trustee can verify
that the amounts disbursed from time to time constitute the same percentage of
the total budgeted Casualty Restoration costs, as such budget may be adjusted
from time to time.
11.3 Draw Certificates. Each request for disbursement shall be
accompanied by a certificate using AIA Forms G702 and G703 ("Draw
Certificates"), as the same may be amended or replaced by AIA or a similar
entity describing the work, materials or other costs or expenses, for which
payment is requested, stating the cost incurred in connection therewith and
stating that Tenant has not previously received payment for such work or
expense. For soft costs, where the referenced AIA Forms would not apply,
Tenant's delivery of reasonable documentation of such costs shall satisfy the
Draw Certificate requirement. The Draw Certificate to be delivered by Tenant
upon completion of the work shall, in addition, state that the work covered by
the request has been substantially completed.
12. CONDEMNATION
12.1 Definitions.
"Condemnation" shall mean any taking of the Premises by condemnation or
other eminent domain proceedings pursuant to any Law or any conveyance under
threat thereof.
"Excess Condemnation Award" shall mean that portion of any Condemnation
Award which is paid to Landlord or its mortgagee and not used by Landlord, its
mortgagee or Tenant to pay the third party out of pocket costs of restoring any
damage to the Premises caused by the Condemnation or any third party out of
pocket costs, including attorneys' fees, incurred by Landlord or its mortgagee
in connection with the Condemnation.
"Fair Market Value of Premises" for purposes of this Section 12 is
defined in Exhibit L.
"Substantial or Complete Condemnation" shall mean a Condemnation that
is not a Temporary Taking, which is certified by an affidavit from Tenant's
president, chief executive officer or chief financial officer, stating with a
reasonable basis that such Condemnation has rendered the Premises (taken
separately from any other properties owned or leased by Tenant) unavailable for
Tenant's continued business operations in compliance with this Lease's Use
Requirements and Function Requirements and results in a loss of 35% or more of
the rentable square feet of the Premises.
"Temporary Taking" shall mean a condemnation of all or part of the
Premises for up to two (2) years.
12.2 Notice/Award. Either party, promptly upon obtaining knowledge of
any Condemnation proceeding affecting the Premises, shall notify the other party
and both parties shall be entitled to participate in any Condemnation
proceeding. Subject to the provisions of this Section 12, Tenant hereby
irrevocably assigns to Landlord any award or payment with respect to any
Condemnation of Landlord's interest in the Premises (the "Condemnation Award"),
except that nothing in this Lease shall be deemed to preclude Tenant from making
a separate claim for an award on account of the Removable Equipment,
14
moving expenses, relocation costs, business interruption or out-of-pocket
expenses incidental to the move so long as in doing so the amount of Landlord's
award is not reduced.
12.3 Substantial or Complete Condemnation. If there is a
Substantial or Complete Condemnation of the Premises Tenant will deliver notice
thereof to Landlord within 120 days after receipt of demand for turnover from
the condemning agency ("Condemnation Termination Notice")and this Lease shall
terminate. The Condemnation Termination Notice shall verify the Substantial or
Complete Condemnation and include an offer by Tenant to terminate the Lease by
paying Landlord the greater of (i) the original purchase price paid by Landlord
for the Premises; or (ii) the Fair Market Value of the Premises (the
"Termination Fee"). Within 60 days from Landlord's receipt of the Termination
Notice, Landlord will notify Tenant whether it will accept or reject Tenant's
offer to terminate the Lease with Landlord's silence deemed rejection.
If Landlord accepts Tenant's offer to terminate the Lease, then
notwithstanding Section 12.2 above, Tenant shall be entitled to the entire
Condemnation Award, and Tenant shall pay Landlord the Termination Fee by the
later of (y) 10 business days after Tenant's receipt of the Condemnation Award;
or (z) 30 days after Tenant's receipt of Landlord's acceptance of such offer. If
there is less than a total condemnation, Landlord shall transfer to Tenant fee
title to any remainder of the Premises, upon Landlord's receipt of the
Termination Fee.
If Landlord rejects, or is deemed to have rejected Tenant's offer to
terminate the Lease, then the Lease will be deemed terminated effective as of
the date the Premises are surrendered to the condemning authority, with Landlord
retaining the Condemnation Award (subject to Section 12.2).
Tenant shall continue to pay Rent until the latest of date on which (a)
the Termination Fee is paid, (b) the Lease is deemed terminated, or (c) the
Tenant vacates the Premises.
12.4 Partial Condemnation. If there is a partial Condemnation which
is not a Substantial or Complete Condemnation, Section 12.3 shall not apply,
this Lease will not terminate and the Condemnation Award shall be made available
to Tenant to restore the Premises to a complete architectural unit with the
character, function and commercial value as nearly as possible equal to the
value of the Premises immediately prior to the taking. For such purposes,
Landlord may require that the Condemnation Award be deposited with and disbursed
by a trustee in the same manner that would have been applicable had the Premises
been damaged by a casualty that invoked the provisions of Section 11. The Base
Rent shall then be reduced to reflect the reduction in the Premises. If the
reduction is to the interior, the Rent would be proportionately reduced to
reflect the reduction in the rentable square feet; if the reduction affects the
number of parking spaces available, the Rent reduction will reflect the excess
cost to Tenant for comparable parking. There will be no Rent reduction for the
Condemnation of unimproved or landscaped areas. Notwithstanding the foregoing,
in no event shall the net present value of the Rent reduction exceed the Excess
Condemnation Award.
12.5 Temporary Taking. If there is a Temporary Taking, then
notwithstanding Section 12.2 above, the entire Condemnation Award shall be paid
to Tenant to the extent it is attributable to the Term and Tenant shall continue
to pay the Rent due hereunder without abatement or adjustment.
13. SUBLETTING AND ASSIGNMENT
13.1 General. Tenant shall have the right to assign or sublet the
Premises, in whole or in part (any of which events being a "Transfer" and any
assignee or sublessee being a "Transferee"), with the consent of Landlord, which
shall not be unreasonably withheld as further detailed in this Section 13.
Landlord will be deemed to have approved the Transfer unless within 10 business
days after receipt of Tenant's request complying with this Section 13, Landlord
gives written notice specifying its objections to the Transfer. Such request
shall be accompanied by a complete and accurate copy of the proposed assignment
or sublease, the name of the proposed assignee or sublessee, its address,
telephone number and principal representative who may be contacted for
information and inquiries, the uses it intends to make of the Premises, if and
how it is affiliated with Tenant, and a then current credit report, an operating
15
statement for the immediately preceding 12 months and a then current financial
statement reflecting its financial condition in accordance with GAAP (Section
1.2).
13.2 Affiliates/Cooperative Business Arrangements. Notwithstanding
Section 13.1, Tenant shall have the right, upon not less than 30 days' advance
written notice to Landlord but without Landlord's consent, to Transfer this
Lease in whole or in part to Affiliates. "Affiliates" shall mean (a) entities
which control, are controlled by or are under common control with Tenant; (b)
Tenant's successor entities by merger or acquisition; and (c) entities in which
Tenant is a 50% or more owner or joint venturer, and jointly pursuing business
objectives consistent with Tenant's business operations, such as discovery or
development of pharmaceutical products, so long as such entity has a Cash
Position equal to or greater than Tenant's then Cash Position (Section 7.3).
13.3 Landlord's Consent. Landlord will not withhold its consent to
a Transfer if:
(a) The proposed uses of the Transferee comply with the
provisions of Section 4.1.
(b) In the case of a sublease, the demising configuration
between the retained space and the subleased space does not unreasonably impair
the marketability of the remaining space.
13.4 No Release. No Transfer shall release Tenant from any
obligations hereunder and Tenant shall remain primarily liable for performance
of its obligations under this Lease. Landlord may accept any Rent or performance
of Tenant's obligations from any Transferee and such acceptance shall not
constitute a waiver of Landlord's rights. If an Event of Default occurs,
Landlord may proceed directly against Tenant, or any Transferee, without first
exhausting Landlord's remedies against any other person or entity responsible
therefor.
13.5 Assumption. Any assignee of this Lease shall execute an
assumption agreement in form and substance reasonably satisfactory to Landlord
in which such assignee becomes jointly and severally liable with Tenant for the
performance of Tenant's obligations under the Lease to the extent claims arise
after the effective date of the assumption.
13.6 Subleases. Each sublease shall provide that (a) it is subject
and subordinate to this Lease; (ii) the term is not longer than the then Term of
this Lease, plus any extensions which have been irrevocably exercised, and (iii)
if this Lease is terminated for any reason, Landlord may, at its option, either
(A) terminate the sublease, or (B) takeover all of the rights and interest of
Tenant under the sublease, in which case the sublessee shall attorn to Landlord.
If Landlord elects to takeover the rights and interest of Tenant, Landlord shall
not (1) be liable for any previous act or omission of Tenant under the sublease,
(2) be subject to any defense or offset in favor of the sublessee against
Tenant, (3) be bound by any modification to the sublease made without Landlord's
written consent or by any prepayment by sublessee of more than one month's rent,
or (4) be liable for the application or return of any security deposit not
actually received by Landlord. Landlord will agree to the same waiver of
subrogation with sublessees as is set forth in Section 9.7.
13.7 Assignment and Sublease Profit. Landlord and Tenant shall each
be entitled to 50% of the rent profit on assignment consideration (i.e.
consideration for assignment of the Lease) and sublease rents. The assignment
consideration shall be determined and paid as and when received by Tenant. For
any nonmonetary consideration, Tenant will have option of assigning half of such
non-monetary consideration to Landlord, or having the nonmonetary consideration
fairly valued and half of such value paid to Landlord in immediately available
funds within a reasonable time after receipt by Tenant of the consideration, to
allow for liquidation/valuation. The rent profit on subleases will be determined
and paid each month during the sublease term. The rent profit on subleases shall
be calculated by taking the rent and other consideration and reimbursements
payable by the sublessee to Tenant or to any third party pursuant to the
sublease and subtracting (a) the Base Rent due from Tenant hereunder with
respect to the subleased space over the same period to which the sublessee's
rent applies (per square foot allocation), (b) the monthly amortization of the
costs incurred in connection with the sublease for commissions, tenant
improvement costs and legal fees (all amortized on a straight-line basis over
the
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sublease term), (c) any reasonable amounts specified in the sublease as rental
payments for use of equipment owned by Tenant, (d) Tenant's reasonable estimate
of those third party costs payable by Tenant under the Lease or under the
sublease and other direct actual reimbursements of third party costs incurred at
sublessee's request in connection with the Premises or sublessee's business
operations at the Premises, (e) Tenant's reasonable estimate of the cost of
providing additional services to the sublessee such as maintaining agreed
temperature ranges with regard to the HVAC system and specified air pressures to
fume hoods that are in addition to the costs Tenant would otherwise incur for
such portion of the Premises. If the sublease is subsequently extended, the then
outstanding balance of costs described in clause (b) above shall be reamortized
over the remainder of the then sublease term and including the extension.
Landlord shall have the right to require Tenant to provide subsequent reports
for and confirmations and calculations of the amounts subtracted for (b) through
(e) above and the parties agree that Landlord's share of the rent profit may be
adjusted from time to time to more closely reflect the actual costs incurred by
Tenant and reasonably allocated to sublessee pursuant to this Section.
14. TENANT'S INDEMNIFICATION
Except to the extent caused by the gross negligence or willful
misconduct of Landlord or any Landlord Related Parties, and subject to the
waiver of subrogation in Section 9.7, Tenant shall indemnify, defend and hold
Landlord, its employees, mortgagee(s) and agents ("Landlord Related Parties")
harmless from and against all claims, liabilities, damages and costs (including
attorneys fees and costs) arising out of (a) its use of or activities on the
Premises, (b) any acts or omissions (including violations of Law) by Tenant or
Tenant Related Parties (Section 19.1), and (c) any breach of this Lease by
Tenant or Tenant Related Parties.
15. TENANT'S INSOLVENCY OR DEFAULT
15.1 Insolvency. Tenant shall be in default upon the occurrence of
one or more of the following events (each, an "Event of Default"): (i) Tenant
files a petition in bankruptcy or otherwise seeks any judicial protection, stay
or relief against its creditors generally, (ii) an involuntary petition in
bankruptcy against Tenant or any request for the appointment of a receiver or a
custodian or other similar officer for any portion of the Tenant's property is
filed or made and not dismissed within 90 days; or (iii) the assignment for the
benefit of creditors of any portion of the Tenant's property is made; or (iv)
Tenant's interests in this Lease shall be attached, levied upon or judicially
seized, whereupon Landlord may, by notice to Tenant, terminate this Lease, and
neither Tenant nor any person claiming through or under Tenant shall be entitled
to be in possession of the Premises but shall forthwith surrender the same, and
Landlord, in addition to the other rights Landlord may have, retains as security
for its damages any Rent, Security Deposit or other monies received by Landlord
on behalf of Tenant. If any such action, case or petition has been commenced by
an unrelated third party against Tenant and is dismissed within a period of 90
days, then the Event of Default shall be deemed cured for purposes hereof. This
Lease is upon the further condition that if a petition for relief under any
chapter of the Bankruptcy Code is filed by an unrelated third party against
Tenant and the trustee or debtor or debtor in possession has not cured all
defaults hereunder and assigned or assumed this Lease under the Bankruptcy Code
within 90 days after the entry of the Order for Relief, then this Lease shall,
at Landlord's sole option, terminate. In case of termination pursuant to this
Section 15.1, Tenant shall indemnify Landlord against all costs and expenses and
loss of Rent, including amounts due under Section 15.3.
15.2 Defaults. Tenant shall be in default hereunder if: (i) Tenant
fails to pay any installment of Base Rent or Additional Rent when due; or (ii)
Tenant abandons the Premises, or (iii) Tenant fails to perform any other
covenant, term, agreement or condition of this Lease not referred to in (i),
(ii) or (iv) when required; or (iv) any insurance required to be maintained by
Tenant is cancelled or reduced below its required limits or in its scope of
coverage and Tenant does not replace the same at least 20 business days before
the effective date of such cancellation or reduction (an "Insurance Default").
An "Event of Default" will exist if (a) Tenant is in default under subsection
(i) and the default is not cured within 5 days after Landlord gives Tenant
written notice of such default; (b) Tenant abandons the Premises, (c) Tenant is
in default under subsection (iii) and the default is not cured within 30 days
after Landlord gives Tenant written notice specifying the default (provided that
if the default can not be cured within the 30 day period,
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Tenant shall have such additional time to cure the default as is reasonably
necessary so long as Tenant commences the cure within 10 days after such notice
is given and diligently prosecutes the cure to completion within 90 days after
Tenant is given the default notice, and such deadline may be further extended
for Force Majeure (Section 27.11), provided that Tenant delivers notice to
Landlord of such Force Majeure and monthly written status reports during any
further extension arising therefrom), (d) an Insurance Default has occurred and
Tenant has not cured such default by the sooner of 5 days after Landlord's
notice of default or 10 days before the effective date of such cancellation or
reduction, or (e) a default by Tenant occurs and is not cured within any
applicable cure period, under (i) the Purchase Agreement, (ii) the Lease between
Landlord's affiliate and Tenant dated concurrently herewith for the property
located at 1208 Eastlake Avenue East, Seattle, WA ("Earl Davie Building Lease"),
or (iii) the Line of Credit Loan (Section 26). When there is an Event of
Default, Landlord may, at any time thereafter, exercise any of its legal,
equitable or contractual remedies for a Tenant default, which may include an
election to terminate this Lease by notice, lawful entry or otherwise, in which
latter event Landlord shall be entitled to recover possession of the Premises
from Tenant and those claiming through Tenant. Any termination of this Lease and
any repossession of the Premises shall be without prejudice to any remedies
which Landlord might otherwise have. In case of such termination, Tenant shall
indemnify Landlord against all third party out of pocket costs and expenses
including the amounts due under Section 15.3 and loss of Rent. All notice and
cure periods provided for in this Lease shall run concurrently with any notice
and cure periods provided for in any and all of the agreements referred to in
part (e) of this Section.
15.3 Expense Recovery. Expenses for which Tenant shall indemnify
Landlord shall include all third-party out of pocket collection costs, including
attorneys' fees and all other third party out of pocket costs proximately caused
by the Event of Default, with or without litigation, including any such costs
incurred in connection with issues that are particular to a bankruptcy or any
other type of proceeding and on appeal. These sums shall be due immediately upon
notice from Landlord and shall bear interest at the Default Rate (Section 15.8)
if not paid within 5 business days after written demand. If proceedings are
brought under the Bankruptcy Code which relate to this Lease, Landlord shall be
paid the costs incurred by Landlord in connection with the proceedings.
15.4 Damages. Notwithstanding termination of this Lease and reentry
by Landlord pursuant to Section 15.1 or Section 15.2, Landlord shall be entitled
to recover from Tenant:
(i) The worth at the time of an award (including interest at the
Default Rate) of any unpaid Rent which had been earned by Landlord at the time
of termination; plus
(ii) The worth at the time of an award (including interest at the
Default Rate) of the amount by which the unpaid Rent which would have been
earned after termination until the time of an award exceeds the amount of loss
of Rent that Tenant proves could have been reasonably avoided; plus
(iii) The worth at the time of an award of the amount by which the
unpaid Rent and Additional Rent for the balance of the Term (as extended, if at
all prior to termination) exceeds the amount of such loss of Rent that Tenant
proves could have been reasonably avoided (including Default Interest from the
date of the award until paid). Such worth at the time of award shall be computed
at the discount rate of the Federal Reserve Bank of San Francisco, or successor
Federal Reserve Bank, on the date of termination; plus
(iv) Any other amount necessary to compensate Landlord for all the
damage proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, including amounts due and payable pursuant to Section 15.3.
15.5 Non-Termination of Lease. If Landlord reenters the Premises
pursuant to Section 15.1, Landlord may elect, by notice to Tenant, not to
terminate this Lease, in which case Tenant shall indemnify Landlord for the loss
of Rent by a payment at the end of each month during the remaining Term
representing the difference between the Rent due in accordance with this Lease
and the rental actually
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derived from the Premises by Landlord for such month. Without any previous
notice or demand, separate actions may be maintained by Landlord against Tenant
from time to time to recover any damages which, at the commencement of any
action, have then or theretofore become due and payable to Landlord under this
Section 15 without waiting until the end of the Term.
15.6 Reletting. If this Lease is terminated as hereinabove provided
or by summary proceedings or otherwise, Landlord may at any time and from time
to time relet the Premises in whole or in part either in its own name or as
agent of Tenant for any period equal to or greater or less than the remainder of
the then-current Term. All rentals received by Landlord from such reletting
shall be applied first to the payment of the costs of the reletting and
alterations and repairs; second, to the payment of any amounts other than Base
Rent due to Landlord; third, to Rent due and unpaid hereunder, and the residual,
if any, shall be held by Landlord and applied in payment of future Rent when it
becomes due.
15.7 Right of Landlord to Cure Defaults. If an Event of Default
occurs, Landlord may, but shall not be required to, cure the Event of Default,
for the account and at the expense of Tenant, if Tenant has not cured the
default within 15 business days' after written notice from Landlord that
Landlord intends to take action to cure Tenant's Event of Default; provided,
however, such notice need not precede Landlord's payment or action in any
circumstance that involves an immediate risk of foreclosure, loss or impairment
of any insurance, property damage, personal injury, or enforcement by any
governmental entity. Where an Event of Default concerns a release or imminent
release of Hazardous Materials, Landlord will not have the ability to exercise
self-help if Tenant (a) has previously delivered to Landlord a Hazardous
Materials Response Plan (the "Response Plan") which outlines methods and persons
reasonably acceptable to Landlord to address, treat, abate, forestall or prevent
the release or imminent release of Hazardous Materials; and (b) promptly
delivers written notice to Landlord of any release or imminent release of
Hazardous Materials along with confirmation that Tenant is complying with the
Response Plan. Tenant shall reimburse Landlord for any third party out of pocket
expenses incurred in such cure, with interest accruing pursuant to Section 15.8,
as Additional Rent, within 30 days after receipt of Landlord's invoice.
15.8 Default Interest. Any amounts owing from Tenant to Landlord
under this Lease which are not paid when due shall bear interest at the greater
of (a) 12% per annum or (b) 4% higher than and varying daily with the prime rate
quoted by any of the three largest banks in the United States (as measured by
assets) or such similar rate that is generally publicly announced by commercial
lending institutions as an index for loans to its most credit-worthy customers
(said prime rate or similar rate being hereinafter referred to as the "Prime
Rate"), in either event calculated from the date due or expended until and
including the date of payment (the "Default Rate").
15.9 Other Available Remedies. At Landlord's election, upon an
Event of Default, Landlord may pursue such other amounts or other remedies in
addition to or in lieu of any one or more of the specific remedies listed in
this Section and no articulation of any remedy shall be construed to be in lieu
of any others that may be available to Landlord at law or in equity.
16. LANDLORD'S DEFAULT
16.1 Default. Landlord shall be in default hereunder if Landlord
fails to perform any of its obligations hereunder within 30 business days after
receipt of written notice from Tenant specifying such failure; provided that if
the nature of the default is such that more than 30 business days are necessary
for the cure, Landlord shall have such additional time as is reasonably
necessary so long as Landlord commences the cure within the cure period and
diligently pursues it to completion. Tenant shall not have the right to
terminate the Lease due to a Landlord default.
16.2 Limitations on Landlord's Liability. The term "Landlord" as
used herein shall mean only the owner or owners, at the time in question, of the
fee title of the Premises. If Landlord transfers its interest in this Lease
other than for security purposes, Landlord shall cause its assignee or
transferee to assume the provisions of this Lease and Landlord shall deliver
notice of such assignment or transfer and a copy of the effective instrument of
transfer to Tenant within 15 business days after the date of transfer.
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Tenant shall be entitled to continue to pay Rent and give all notices to
Landlord until Tenant has received the foregoing from Landlord. Landlord shall
deliver all funds in which Tenant has an interest except those which are then in
the possession of an insurance or condemnation trustee, including but not
limited to Tenant's Security Deposit to Landlord's purchaser or assignee. From
and after such transfer, Landlord shall be released from all liability toward
Tenant arising from this Lease due to any act, occurrence or omission of
Landlord's successors occurring after the transfer of Landlord's interest in
this Lease, provided Landlord's purchaser or assignee expressly assumes
Landlord's duties and covenants under this Lease subject to the same limitations
upon its personal liability as are applicable to Landlord in Section 16.3.
Landlord's liability hereunder is limited to the extent agreed upon in
Section 16.3 below, and except for Landlord's gross negligence or intentional
misconduct, Landlord shall not be liable for any business interruption, property
damage or personal injury (including death) sustained by Tenant or any person
claiming through Tenant resulting from any accident, casualty, or other event or
matter of any kind or nature occurring on or about the Premises and Tenant
hereby waives and covenants not to bring any action based upon any claims or
losses for which Landlord is not liable as stated above.
16.3 Further Limitations on Landlord's Liability. NOTWITHSTANDING
ANYTHING SET FORTH HEREIN OR IN ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT
TO THE CONTRARY: (A) LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY OTHER PERSON
FOR (AND TENANT AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS, DAMAGE OR
INJURY, WHETHER ACTUAL OR CONSEQUENTIAL TO: ANY TENANT'S PERSONAL PROPERTY OF
EVERY KIND AND DESCRIPTION, INCLUDING, WITHOUT LIMITATION TRADE FIXTURES,
REMOVABLE EQUIPMENT, INVENTORY, SCIENTIFIC RESEARCH, SCIENTIFIC EXPERIMENTS,
LABORATORY ANIMALS, PRODUCT, SPECIMENS, SAMPLES, AND/OR SCIENTIFIC, BUSINESS,
ACCOUNTING AND OTHER RECORDS OF EVERY KIND AND DESCRIPTION KEPT AT THE PREMISES
AND ANY AND ALL INCOME DERIVED OR DERIVABLE THEREFROM; (B) TENANT WAIVES ALL
CLAIMS FOR CONSEQUENTIAL DAMAGES; (C) THERE SHALL BE NO PERSONAL RECOURSE TO
LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR ARISING IN
ANY WAY UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND ANY LIABILITY OF LANDLORD HEREUNDER
SHALL BE STRICTLY LIMITED SOLELY TO LANDLORD'S INTEREST IN THE PREMISES AND ANY
PROCEEDS FROM SALE, CONDEMNATION THEREOF OR ANY INSURANCE PROCEEDS PAYABLE IN
RESPECT OF LANDLORD'S INTEREST IN THE PREMISES OR IN CONNECTION WITH ANY SUCH
LOSS AND (D) IN NO EVENT SHALL ANY PERSONAL LIABILITY BE ASSERTED AGAINST ANY OF
LANDLORD'S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS. UNDER NO
CIRCUMSTANCES SHALL LANDLORD OR ANY OF LANDLORD'S OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR CONTRACTORS BE LIABLE FOR INJURY TO TENANT'S BUSINESS OR
FOR ANY LOSS OF INCOME OR PROFIT THEREFROM. NOTWITHSTANDING THE CONTRARY,
NOTHING IN THIS SECTION 16.3 WILL LIMIT THE LIABILITY OF THOSE LANDLORD'S
CONTRACTORS OR AGENTS WHO EXECUTE A SEPARATE "ACCESS AND CONFIDENTIALITY
AGREEMENT" (SECTION 21.2) DIRECTLY WITH TENANT, AND SUCH AGENTS AND CONTRACTORS'
LIABILITY DIRECTLY TO TENANT SHALL BE AS AGREED UPON IN THOSE SEPARATE
AGREEMENTS ALTHOUGH IN NO EVENT SHALL TENANT HAVE A CLAIM AGAINST LANDLORD UNDER
SUCH SEPARATE AGREEMENT, AS LANDLORD'S LIABILITY FOR THE ACTIONS OF ITS
CONTRACTORS AND AGENTS IS LIMITED TO THE EXTENT AGREED UPON IN THIS SECTION 16.3
AND IN SECTION 21.5.
17. LANDLORD'S FINANCING. So long as Tenant's rights of possession to the
Premises will not be disturbed in the absence of a Tenant's Event of Default
under this Lease, Tenant shall, upon request, enter into a Subordination,
Non-Disturbance and Attornment Agreement ("SNDA") with any Landlord mortgagee in
the form customarily required by such mortgagee, provided that such form does
not require Tenant to adversely modify its rights or obligations under this
Lease. Tenant agrees to provide Landlord's ,mortgagees with copies of notices
sent to Landlord pursuant to Section15, upon Landlord's request and pursuant to
the SNDA.
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18. TENANT'S FINANCING. Tenant shall not pledge or encumber this Lease or enter
into a financing lease and leaseback or comparable financing arrangement.
Landlord shall cooperate with Tenant regarding any financing by Tenant which
encumbers Removable Equipment or other personal property, including the
execution of reasonable confirmations regarding the status of this Lease and the
extent to which Tenant's lender may have access to the Premises to inspect or
remove the Removable Equipment during the term hereof, and Tenant shall
reimburse Landlord of all of its third party out of pocket costs and expenses,
including its attorneys' fees in doing so. Tenant may enter into UCC fixture
filings and/or financing statements for its Removable Equipment and other
personal property.
19. HAZARDOUS SUBSTANCES
19.1 Prohibition. Tenant shall not cause or permit any Hazardous Materials
(Section 19.8) to be brought upon, kept, used, stored, handled, treated,
generated in or about, or released or disposed of from, the Premises in
violation of applicable Environmental Requirements (as hereinafter defined) by
Tenant, its Affiliates and their respective assignees, sublessees, employees,
agents or contractors (collectively "Tenant Related Party").
19.2 Tenant's Indemnity. If Tenant breaches the obligation stated in Section
19.1, or if the presence of any Hazardous Materials in the Premises results in
contamination of the Premises prior to or during the Term, any Renewal Term or
any holding over by Hazardous Materials brought into, kept, used, stored,
handled, treated, generated in or about, or released or disposed of from, the
Premises by anyone other than Landlord and Landlord's employees, agents and
contractors (collectively the "Relevant Contamination"), Tenant hereby
indemnifies and shall defend and hold Landlord, its officers, directors,
employees, agents and contractors harmless from any and all actions (including,
without limitation, remedial or enforcement actions of any kind, administrative
or judicial proceedings, and orders or judgments arising out of or resulting
therefrom), costs, claims, damages (including, without limitation, punitive
damages and damages based upon diminution in value of the Premises or the loss
of, or restriction on, use of the Premises), expenses (including, without
limitation, attorneys', consultants' and experts' fees, court costs and amounts
paid in settlement of any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other relief (whether or not
based upon personal injury, property damage, or contamination of, or adverse
effects upon, the environment, water tables or natural resources), liabilities
or losses (collectively, "Environmental Claims") which arise prior to, during or
after the Term as a result of Relevant Contamination. This indemnification of
Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any cleanup, treatment,
remediation, removal, or restoration work required by any federal, state or
local governmental authority because of Hazardous Materials present in the air,
soil or ground water above, on, or under the Premises. Without limiting the
foregoing, if the presence of any Hazardous Materials on the Premises or any
adjacent property caused or permitted by Tenant or any Tenant Related Party
results in the Relevant Contamination of the Premises or any adjacent property,
Tenant shall promptly take all actions at its sole expense and in accordance
with applicable Environmental Requirements as are necessary to return the
Premises or any adjacent property to the condition existing prior to the time of
such contamination, provided that Landlord's approval of such action shall first
be obtained, which approval shall not be unreasonably withheld so long as such
actions would not potentially have any material adverse long-term or short-term
effect on the Premises. The foregoing obligations include all Historic
Contamination present on the Premises, but subject to the limitations contained
in Section 19.10(b) and(c) below. Notwithstanding anything to the contrary
stated in this Section 19, (a) for claims relating to Relevant Contamination of
property adjacent to the Premises, Tenant's obligations under this Section 19.2
are limited to any clean up requirement imposed by a governmental entity; and
(b) in no event shall Tenant's obligations in this Section 19 include any
Hazardous Materials releases to the extent they are caused by Landlord, its
employees, agents or contractors.
19.3 Tenant's Business. Landlord acknowledges that it is not the intent of
this Section to prohibit Tenant from using the Premises pursuant to the Use
Requirements. Tenant may operate its business according to prudent industry
practices so long as the use or presence of Hazardous Materials is strictly and
properly monitored according to all applicable Environmental Requirements.
Tenant shall deliver to Landlord prior to the Commencement Date copies of
Tenant's current Hazardous Materials
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reports, which list each type of Hazardous Materials currently present at the
Premises and thereafter to annually provide Landlord with copies of updated
reports to incorporate any additional Hazardous Materials which Tenant has
brought upon, kept, used, stored, handled, treated, generated on or released or
disposed of from the Premises during the past year, along with copies of
citations, claims of noncompliance or liability, Remediation Plans relating to
Hazardous Materials, if any and Hazardous Materials assessments provided by
third parties, if any. Landlord agrees that Tenant's annual delivery of reports
Tenant has prepared and delivered to governmental entities to comply with
Environmental Requirements reporting requirements will satisfy this Section 19.3
and specifically, Landlord agrees that either the HMIS (Hazardous Material
Inventory Statement) Report submitted to the Seattle Fire Department or the
Dangerous Waste Annual Report filed with the Washington State Department of
Ecology, satisfy this reporting requirement. To the extent not included in any
other written report given by Tenant to Landlord, and reasonably requested by
Landlord, Tenant shall provide Landlord with copies of permits and permit
applications relating to Hazardous Materials at the Premises. To the extent
reasonably requested by Landlord, Tenant will summarily explain requested
matters regarding information provided to Landlord by Tenant under this Section
19.3. Tenant is not required, to include in the annual Hazardous Materials
reports information of a proprietary nature. It is not the intent of this
Section to provide Landlord with proprietary information which could be
detrimental to Tenant's business should such information become possessed by
Tenant's competitors.
19.4 Tenant's Representations and Warranties. Tenant hereby represents
and warrants to Landlord that as of the Effective Date, except as related to
1150 Eastlake Ave. East in Seattle and as disclosed in Property Documents (as
defined in the Purchase Agreement) and except for the Historic Contamination (i)
Tenant has not been required by any prior landlord, lender or governmental
authority at any time to take remedial action in connection with Hazardous
Materials contaminating any property which contamination was permitted by Tenant
or its predecessors or resulted from Tenant's or its predecessors' action or use
of the Premises, and (ii) Tenant is not subject to any enforcement order for any
property issued by any governmental authority in connection with the use,
storage, handling, treatment, generation, release or disposal of Hazardous
Materials (including, without limitation, any order related to the failure to
make a required reporting to any governmental authority).
19.5 Testing. Subject to the terms of Section 21.5, Landlord shall have
the right to conduct annual tests and examinations of the Premises, at
Landlord's sole expense, to determine whether any contamination of the Premises
or on the Premises has occurred as a result of Tenant's use. Tenant shall be
required to pay Landlord's third-party out of pocket expenses relating to such
annual test or examination of the Premises only if such test or examination
discloses unreported Relevant Contamination for which Tenant is liable pursuant
to Section 19.2. If Tenant conducts its own tests of the Premises, at Tenant's
expense, using third party contractors and test procedures reasonably acceptable
to Landlord, and the tests are certified to Landlord, Landlord shall accept such
tests in lieu of Landlord's annual tests. Landlord's right to conduct Hazardous
Materials testing of the Premises at all other times to determine if
contamination has occurred as a result of Tenant's use of the Premises shall be
governed by Sections 15.7 and 21. In connection with Landlord's Hazardous
Materials testing or examination, upon the request of Landlord, Tenant shall
deliver to Landlord or its consultant such non-proprietary information
concerning the use of Hazardous Materials in or about the Premises by Tenant or
any Tenant Related Party. Landlord shall provide Tenant with a copy of all third
party, non-confidential reports and tests of the Premises made by or on behalf
of Landlord during the Term without representation or warranty and subject to a
confidentiality agreement. If necessary and pursuant to Section 15.7 and a
Response Plan referenced therein, Tenant shall, at its sole cost and expense,
promptly and satisfactorily remediate any environmental conditions identified by
such testing in accordance with all Environmental Requirements. Landlord's
receipt of or satisfaction with any environmental assessment in no way waives
any rights which Landlord may have against Tenant.
19.6 Underground Tanks. Tenant will not install underground storage
tanks storing Hazardous Materials on the Premises without first obtaining
Landlord's advance written consent, which will be given or withheld at
Landlord's sole discretion. If Tenant is permitted to install underground
storage tanks, it shall install, use, monitor, operate, maintain, upgrade and
manage such storage tanks, maintain appropriate records, obtain and maintain
appropriate insurance, implement reporting
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procedures, properly close any underground storage tanks, and take or cause to
be taken all other actions necessary or required under applicable state and
federal Environmental Requirements, as such now exists or may hereafter be
adopted or amended in connection with the installation, use, maintenance,
management, operation, upgrading and closure of such underground storage tanks.
19.7 Tenant's Obligations. Tenant's obligations under this Section 19
shall survive the expiration or earlier termination of the Lease. During any
period of time after the expiration or earlier termination of this Lease
required by Tenant or Landlord to complete the removal from the Premises of any
Hazardous Materials (including, without limitation, the release and termination
of any licenses or permits restricting the use of the Premises and the
completion of a surrender plan reasonably approved by Landlord), Tenant shall
continue to pay the pro-rata Rent as reasonably adjusted to reflect the
differential rental values of different portions of the Premises, in accordance
with this Lease for that portion of the Premises which cannot be relet by
Landlord due to and during such clean up, provided such Rent shall be pro-rated
daily and provided further that Tenant's obligation to pay the pro-rated Rent
under this Section 19.7 is conditioned on Tenant having full access to such
portion of the Premises.
19.8 Definitions. As used herein, the term "Environmental Requirements"
means all applicable present and future statutes, regulations, ordinances,
rules, codes, judgments, orders or other similar enactments of any governmental
authority regulating or relating to health, safety, or environmental conditions
on, under, or about the Premises, or the environment, including without
limitation, the following: the Comprehensive Environmental Response,
Compensation and Liability Act; the Resource Conservation and Recovery Act; and
all state and local counterparts thereto, and any regulations or policies
promulgated or issued thereunder. As used herein, the term "Hazardous Materials"
means and includes any substance, material, waste, pollutant, or contaminant
listed or defined as hazardous or toxic, or regulated by reason of its impact or
potential impact on humans, animals and/or the environment under any
Environmental Requirements, asbestos and petroleum, including crude oil or any
fraction thereof, natural gas liquids, liquefied natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas) and
Stacchybotris chartarum and other toxic molds. As defined in Environmental
Requirements, Tenant is and shall be deemed to be the "operator" of Tenant's
"facility" and the "owner" of all Hazardous Materials brought on the Premises by
Tenant or any Tenant Related Party, and the wastes, by-products, or residues
generated, resulting, or produced therefrom.
19.9 Notice to Landlord. To the extent that Tenant or Landlord has
actual knowledge thereof, such party shall promptly provide notice to the other
of any of the following matters:
(i) any proceeding or investigation commenced or threatened by any
governmental authority, against Tenant or Landlord, with respect to the
presence, suspected presence, release or threatened release of
Hazardous Materials on or from the Premises;
(ii) all written notices of any pending or threatened claims or
citations regarding Hazardous Materials on the Premises or released
from the Premises;
(iii) all written notices given to or received from the City of Seattle
in connection with the Development Agreement or to or from the
Landmarks Preservation Board in connection with the condition or use of
the Premises;
(iv) the discovery of any occurrence or condition on the Premises, or
written notice received by Tenant of an occurrence or condition on any
real property adjoining or in the vicinity of the Premises, which
reasonably could be expected to lead to the Premises or any portion
thereof being in violation of Environmental Requirements or which might
subject Landlord to any claim alleging potential liability arising out
of (A) the presence, or release into the environment, of any Hazardous
Materials at the Premises, or (B) circumstances forming the basis of
any violation, or alleged violation, of any Environmental Requirement;
and
(v) the commencement, nature, extent and completion of any remedial
work.
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19.10 Historical Contamination.
(a) In connection with Tenant's acquisition of the Premises, Tenant and the
City entered into the Development Agreement. Capitalized terms used in this
Section 19.10 which are not defined in this Lease shall have the definitions set
forth in the Development Agreement. This Section 19.10 expressly modifies
Section 19.2 for those Hazardous Materials which are defined as Historic
Contamination in the Development Agreement. In addition to the indemnities
provided by Tenant pursuant to Section 19.2 above, until and unless Tenant
obtains from the City consent to the assignment of the Development Agreement to
Landlord in which the City acknowledges Landlord is a successor to Tenant's
rights thereunder, confirms that Tenant is not in default under the Development
Agreement, and does not contain any requirement for Landlord to assume any
obligations thereunder ("City Confirmation"), Tenant shall indemnify, defend and
hold Landlord, its agents and employees, harmless from and against any claims,
costs (including attorneys' fees and other litigation costs) and damages arising
from the failure of the City of Seattle to perform it's obligations relating to
the remediation of Historic Contamination pursuant to the Development Agreement.
(b) From and after the date Tenant obtains the City Confirmation in the
form described herein, or such other confirmation of assignment from the City
which Landlord accepts, Landlord agrees to first pursue its rights under the
Development Agreement before seeking recovery against Tenant for matters related
to Historic Contamination, except that Tenant may be named in or joined to any
such action by Landlord to the extent such joinder is compulsory or is otherwise
required for Landlord to preserve all of its rights against Tenant. It is the
parties' intent that Tenant's obligations in Section 19.10(a) above shall only
be obviated by this Section 19.10(b) to the extent of the City's performance.
(c) Tenant's obligations and indemnities in Sections 19.10(a) and (b) above
shall not apply to the extent that Landlord or Landlord's Related Parties
actions or failures to act cause the City to be exonerated from liability or
performance of its obligations under the Development Agreement.
20. FIRST OFFER. Tenant shall have a "Right of First Offer" if Landlord elects
to market or sell the Premises to an unrelated third party. In such event,
Landlord shall provide Tenant with a notice in writing of its intention to sell,
setting forth the terms under which Landlord is prepared to sell the Premises.
Tenant shall have 30 days to notify Landlord in writing whether it wishes to
purchase the Premises on the proposed terms. If Landlord's notice states that
its affiliate also intends to sell the Earl Davie Building property also leased
by Tenant, Tenant will be required to purchase both unless Landlord and its
affiliate specifically provides a single building alternative. If Tenant
notifies Landlord that it wishes to purchase the applicable property (the "Sale
Property") on the terms and conditions stated in Landlord's notice, the parties
will negotiate in good faith for 30 days to reach agreement on a purchase and
sale agreement. In the event that Tenant does not notify Landlord of its intent
to purchase the Sale Property or the parties are unable to reach an agreement on
a purchase and sale agreement within the prescribed time frames, Landlord shall
be free to sell the Sale Property to any third party on such terms and
conditions that Landlord finds acceptable. If Landlord does not transfer
ownership of the Sale Property within 18 months of its original notice to
Tenant, Tenant's Right of First Offer shall be reinstated. If Landlord does
transfer ownership within 18 months of its original notice to Tenant to any
unrelated third party, Tenant's Right of First Offer shall automatically
terminate and be of no further force or effect for that or any subsequent sale
of any property demised by this Lease or the Earl Davie Building Lease. All of
Tenant's rights under this Section are personal to Tenant and may not be
assigned, pledged or transferred to any third party. Notwithstanding the
foregoing, such rights may be assigned or transferred to Tenant's Affiliate
(Section 13.2). Tenant also agrees that its rights provided for in this Section
shall not apply (a) so long as any Event of Default exists hereunder at the time
Landlord's notice was otherwise required to be given to Tenant, in which event
Landlord may proceed to negotiate and consummate a sale free of such right, (b)
to any lease, mortgage or encumbrance of the Premises or other transfer of less
than fee simple title thereto or any portion thereof, (c) to any transfer of any
kind of any portion or all of the membership interests in Landlord, or (d) to
any conveyance of the Premises or any portion thereof to (i) any entity that
controls, is controlled by or under the common control with Landlord or any of
their respective affiliates, or (ii) any entity in condemnation or in lieu of
condemnation, or (iii) any judicial or nonjudicial foreclosure or deed in lieu
of a judicial or nonjudicial foreclosure, and Tenant's right of first offer
shall automatically
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terminate with respect to the Premises or any portion thereof which are conveyed
pursuant to part (ii) or (iii) of this Section.
21. ACCESS BY LANDLORD
21.1 Access. Subject to the terms and provisions of this Section 21, Tenant
shall permit Landlord and its employees and authorized agents, consultants,
contractors, and representatives (with Landlord, the "Landlord Representatives")
to enter upon the Premises during normal business hours to inspect, examine, and
show the Premises for lease (during the last 12 months of the Term), financing
or sale, or to cure an Event of Default pursuant to Section 15.7 (generally,
"Inspections"); provided, however, Landlord may enter the Premises during other
hours when it is reasonably necessary to either address an emergency or an Event
of Default. This right specifically excludes the right to obtain proprietary
information relating to Tenant's business operations. Hazardous Materials tests
and responses are specifically limited by Sections 15.7 and 19.5.
21.2 Conditions to Entry. At least 2 business days prior to entering the
Premises or conducting any Inspections, Landlord shall (a) give Tenant oral or
written notice of the times and dates it wishes to do so, (b) make arrangements
with Tenant to have the Landlord Representatives to be accompanied by a
representative of Tenant ("Tenant's Representative"), and (c) cause each
Landlord Representative (other than the Landlord) accessing the Premises to sign
an "Access and Confidentiality Agreement" in the form attached as Exhibit C or
such other form reasonably acceptable to Tenant. The advance notice agreed upon
shall apply in emergencies and following a default; provided that Tenant
promptly delivers to Landlord reasonable assurances that such emergency or
default is being adequately and diligently addressed (and for Hazardous
Materials, so long as Tenant delivers and confirms compliance with its Response
Plan). All Inspections shall be in accordance with all applicable Laws and
regulations. Tenant agrees to make reasonable efforts to cause Tenant's
Representatives to be available for such purposes during normal business hours.
Tenant agrees that Landlord shall have no liability for any breach of an Access
and Confidentiality Agreement by anyone other than Landlord except to the extent
of Landlord's indemnity set forth in Section 21.5 below.
21.3 Inspection Costs. Except for any salary to be paid to Tenant's
Representatives or as otherwise stated in this Lease or when necessitated by an
Event of Default, Landlord shall bear the cost of all Inspections.
21.4 Inspection Obligations. (a) In conducting any Inspections, Landlord
Representatives shall: (i) not materially interfere with the use of the Premises
by any occupant; (ii) not materially interfere with the operation and
maintenance of the Premises or any construction on the Premises; (iii) not
damage any part of the Premises or personal property located at the Premises;
(iv) not injure or otherwise cause bodily harm to any Tenant's Representative or
any other person or entity or their respective employees, agents, contractors,
representatives, guests, or invitees; (iv) at Tenant's request, provide Tenant
with complete and accurate copies of all of the third-party reports and
assessments of the Premises that are not proprietary to Landlord (collectively
"Inspection Reports"); and (v) provide Tenant with copies of any Inspection
Reports which provide information relating to Tenant's obligations under this
Lease. No Landlord Representative will conduct any invasive Inspections which
damage the Premises, unless such Inspections are (1) otherwise permitted by this
Lease, (2) required by any governmental entity, (3) subject to Section 21.2, and
except as restricted under Section 15.7, reasonably necessary in connection with
a release or potential release of Hazardous Materials or there exists a
reasonable belief that Environmental Requirements have been violated and such
access and testing is conducted only by Landlord Representatives who are
appropriately qualified as experts; or (4) are otherwise reasonably necessary
and Landlord has first obtained Tenant's consent, which consent will not be
unreasonably withheld. For Inspections relating to Hazardous Materials, the
terms of Section 19.5 shall also apply. If the Premises are damaged during an
Inspection, Landlord will immediately repair such damage and restore the
Premises, pursuant to Section 21.5 below. Tenant acknowledges and agrees that
Landlord shall have no responsibility for the accuracy or completeness of any
such report or assessment or the suitability thereof for use by any person other
than Landlord.
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(b) Landlord and all Landlord Related Parties, including their
respective partners, members, officers, directors, and attorneys will treat as
confidential the information disclosed to them by Tenant or discovered on
account of or pursuant to Landlord's Inspections (which information is disclosed
orally, in writing or in visual or electronic form, and including any
observations, knowledge, information, reports (written or oral), tests, or
studies (together with the results of such studies and tests) obtained by or
provided to Landlord or any Landlord Related Parties regarding the Premises,
whether in connection with the Inspections, or otherwise, but shall not include
information known by Landlord or Landlord Related Parties prior to any
disclosures by Tenant or any Inspections or any other information that is
generally known or available to the public) (the "Information"), giving it at
least the same care as Landlord's own confidential information, and make no use
of any such Information except in connection with (a) verifying Tenant's
compliance with the terms of this Lease, (b) disclosing the condition of the
Premises in connection with a sale, financing or lease of the Premises, or (c)
to the extent required by court or legal requirements (which may include SEC
regulations, NYSE and NASDAQ requirements). In addition, and except as required
by applicable law, neither Landlord nor Tenant shall make or agree to any press
releases in which the other party is identified without the prior written
consent of the other party, and when such consent is given, the information
disclosed and the persons to whom it is disclosed shall be limited to such
releases. To the extent that the terms, provisions, and obligations of this
Section 21, are inconsistent with the other provisions of this Lease, the terms
of this Section 21 will control, but subject to limitations stated in Section
16.3. This Section 21.4(b) is not applicable to any Landlord Related Party who
is also a Landlord Representative (Section 21.2) who executes a Access and
Confidentiality Agreement pursuant to Section 21.2.
21.5 Indemnification and Repair. Landlord hereby agrees to indemnify,
defend (with counsel reasonably acceptable to Tenant), and hold Tenant and its
officers, directors, successors, and assigns harmless from and against any and
all liens, claims, causes of action, liabilities, demands, suits, obligations,
losses, penalties, costs, and expenses (including reasonable attorneys' fees)
(generally, "Damages") including without limitation Damages for any actual
physical damage to the Premises or any injury to persons, all to the extent
caused by or in connection with the entry onto the Premises by a Landlord
Representative or an act of a Landlord Representative in connection with the
Inspections; provided, however, that Landlord's indemnity hereunder shall be
limited to actual, direct damages only and shall not include (a) any
consequential damages, or (b) any damages to the extent resulting from (i) the
acts or omissions of any Tenant's Representative, or (ii) the discovery of any
condition of the Premises that existed prior to Landlord's entry thereon (a
"Pre-Existing Condition"), except that such indemnity shall apply to the extent,
and only to the extent, such Pre-Existing Condition is directly exacerbated,
aggravated, or worsened by the entry onto the Premises by an Landlord
Representative or an act of an Landlord Representative in connection with the
Inspections. In addition, Landlord shall promptly repair any physical damage to
the Premises caused by any Landlord Representative (including without limitation
damage relating to an Inspection) and shall promptly restore the Premises to the
condition in which it existed prior to such entry; provided, however, that
Landlord shall have no obligation to repair any damage caused by the acts or
omissions of any Tenant's Representative or to remediate, remove, contain,
abate, or control any Pre-Existing Condition, except to the extent, and only to
the extent, necessary to restore the Pre-Existing Condition to the condition in
which it existed prior to such entry. As an example only, if a Landlord
Representative should cause a limited and confined release of asbestos while
taking a sample of ceiling materials within the Premises, Landlord's sole
obligation would be to remove, control and abate any released asbestos,
indemnify and defend Tenant for any personal injury Damages claimed relating to
the release, and to re-seal the ceiling materials where the sample was taken;
Landlord would have no further obligation to remediate, remove, contain, abate,
control, or take any further action whatsoever with respect to the asbestos
contained in the sampled or any other ceiling materials. Landlord's obligations
under this Section 21 shall survive termination of the Lease; provided that
Tenant will only have two years from the expiration or termination of this Lease
to commence an action against Landlord under this Section.
21.6 Building Signage. Landlord hereby agrees not to modify or require any
changes to the current signage at the Premises, and further agrees that during
the Term, Tenant shall have the sole right to designate the name of the
Premises', but subject to Landlord's consent, which will not be unreasonably
withheld (e.g., the Tenant's name on the Steam Stacks). Tenant's right under
this Section 21.6 are
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personal to Tenant and Tenant may not Transfer (Section 13.1) such rights,
except to Tenant's Affiliates (Section 13.2).
22. CONTESTS
22.1 Notice. Notwithstanding the provisions of this Lease which require
Tenant pay certain amounts to third parties ("Third Party Payments") on or
before the date due (Sections 3.4, 4.3 and 6), Tenant shall not be required to
(i) pay any Third Party Amounts, (ii) comply with any Law, or (iii) discharge or
remove any lien arising out of Tenant, so long as Tenant contests, in good faith
and at its expense, the existence, the amount or the applicability or validity
thereof, and by appropriate proceedings so long as during the pendency thereof
Tenant takes any necessary steps to prevent (A) the collection of, or other
realization upon, the claim so contested, (B) the sale, forfeiture or loss of
any of the Premises, or the Rent to satisfy the same, (C) any interference with
the use or occupancy of any of the Premises, and (D) the cancellation of any
insurance Tenant is required to carry pursuant to Section 9.
22.2 Conditions. In no event shall Tenant pursue any contest in such manner
that exposes Landlord to (i) criminal liability, penalty or sanction, or (ii)
defeasance of its interest in the Premises.
22.3 Hold Harmless. Tenant agrees that each contest shall be promptly and
diligently prosecuted to a final conclusion, except that Tenant shall have the
right to attempt to settle or compromise such contest through negotiations;
provided that if such contest is not concluded and all amounts for which Tenant
is liable are not paid prior to the expiration of this Lease, then Tenant agrees
that its obligation to diligently pursue or settle such contest and its
liability for such unpaid amounts shall survive the expiration of this Lease.
Tenant shall pay and save Landlord harmless against any and all losses,
judgments, decrees and costs (including all attorneys' fees and expenses) in
connection with any such contest and shall, promptly after the final
determination of such contest, fully pay and discharge the amounts which shall
be levied, assessed, charged or imposed or be determined to be payable therein
or in connection therewith, together with all penalties, fines, interest, costs
and expenses thereof or in connection therewith, and perform all acts the
performance of which shall be ordered or decreed as a result thereof.
23. ESTOPPEL CERTIFICATE. Each party shall at any time and from time to time
upon not less than 20 days written notice from the other and without charge,
execute and deliver to the other an estoppel certificate in the form of Exhibit
J.
24. INTENTIONALLY OMITTED
25. PARKING FOR EARL DAVIE BUILDING. During the Term, Landlord grants to the
tenant under the Earl Davie Building Lease (the "EDB Tenant") the right to
utilize up to 49 parking stalls at the Premises which have been specifically
covenanted and reserved for the EDB Tenant; provided that the EDB Tenant shall
make commercially reasonable efforts to minimize or eliminate the need for the
EDB Tenant to utilize such parking.
26. CROSS DEFAULTS. At Tenant's option, Landlord (or its affiliate) and Tenant
may be parties to a $3,000,000 line of credit loan ("Line of Credit Loan") which
will be documented by the forms attached to the fourth amendment to the Purchase
Agreement, with such forms executed upon Tenant's election to draw on the Line
of Credit Loan. Regardless of the actual date of execution of the Line of Credit
Loan documents, the maturity date thereunder shall be five years from the
Effective Date. As provided in Section 15.2, any Event of Default under the Line
of Credit Loan or the Earl Davie Building Lease (Section 15.2) shall be an Event
of Default hereunder and any default under this Lease shall be a default under
the Earl Davie Building Lease and the Line of Credit Loan.
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27. MISCELLANEOUS
27.1 Tenant's Obligations Unconditional. Tenant acknowledges and agrees
that except as otherwise specifically stated in this Lease it shall be
absolutely and unconditionally obligated to pay all Rent and all of the costs
and expenses that relate to the ownership, occupancy, use, maintenance,
insurance, repair, restoration, replacement, and remediation of the Premises and
all utilities and other services provided thereto and taxes and installments of
assessments levied thereon during the Initial Term and any Renewal Term and for
those portions of installments of assessments to the extent they accrued during
the Term of this Lease, even if they are payable thereafter and to take such
other actions at its sole expense as are required to comply with all existing
and future Laws with respect thereto and such obligations shall not be subject
to abatement, offset or impairment for any cause or reason whatsoever. Except as
otherwise stated in this Lease, nothing in this Section 27.1 is intended to
require Tenant to pay or reimburse Landlord for (a) those taxes and assessments
excluded from Tenant's obligations in Section 6.2, (b) Landlord's internal costs
and expenses, (c) Landlord's third party out of pocket expenses, or (d) any
Hazardous Materials remediation costs in excess of those agreed upon by the
parties in Section 19 above.
27.2 Additional Definitions. "Landlord" as used in this Lease shall include
the original Landlord hereunder, its successors, and if this Lease shall be
validly assigned, shall also include Landlord's assignees. "Tenant" shall
include the original Tenant hereunder, its successors, and if this Lease shall
be validly assigned or sublet, shall include also Tenant's assignee or sublessee
as to premises covered by such assignment or sublease. References to "Tenant's
knowledge" shall refer to the actual personal knowledge of any one or more of
the officers of Tenant, not the actual or constructive knowledge of any other
employee, agent, officer, director or other representative of Tenant and shall
in no case impose upon Tenant any duty or obligation to investigate or verify
the information. References herein to "Law" shall mean any governmental statute,
ordinance, rule or regulation now in force or which may hereafter be enacted,
promulgated or modified and any easement, reservation, restriction or covenant
now or hereafter recorded against the Premises or any portion thereof to the
extent applicable to the particular matter at issue (collectively "CC&Rs"),
excluding CC&Rs to the extent that they are created without Tenant's consent
after the Effective Date and that they interfere with Tenant's use of the
Premises or cause Tenant to incur additional cost. References to "including" or
"includes" shall mean "includes, without limitation" and "including, but not
limited to." References to "business days" shall mean Monday through Friday,
excluding federal and national bank holidays. If any time period is to expire on
a date which is not a business day, the time period shall be extended to the
next business day.
27.3 Notices. Any notice or consent required to be given by or on behalf of
either party to the other shall be in writing and given by mailing such notice
or consent by either (i) one business day after sending by an overnight courier
service when deposited with the courier in time for delivery the next business
day or otherwise on the next business day thereafter, or (ii) 2 business days
after deposit with the United States Post Office by registered or certified
mail, return receipt requested, as evidenced by the date of the postmark
thereon, or (iii) on the day transmitted via facsimile if completed in time for
receipt by 12:00 p.m. recipient's time on a business day or otherwise on the
next business day thereafter (provided that facsimile notice is only effective
if notice is also delivered pursuant to Sections 27.3(i) or (ii) the next
business day following the transmission of the facsimile notice); addressed to
the other party as follows:
If to Landlord: ARE-1201/1208 Eastlake Avenue, LLC
135 N. Los Robles Ave., Ste. 250
Pasadena, CA 91101
Attn: Corporate Secretary
Telephone: (626) 578-0777
Fax: (626) 578-0770
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With a copy to: Stoel Rives LLP
Attn: David H. Rockwell
600 University Street, Suite 3600
Seattle, WA 98101-3197
Telephone: (206) 386-7694
Fax: (206) 386-7500
If to Tenant: ZymoGenetics, Inc.
Attn: Chief Financial Officer
1201 Eastlake Avenue E.
Seattle, WA 98102
Telephone: (206) 442-6600
Fax: (206) 442-6808
With a copy to: Real Property Law Group, PLLC
Attn: Cynthia Thomas
1218 Third Avenue, Suite 1900
Seattle, WA 98101
Telephone: (206) 625-1717
Fax: (206) 374-2782
or to such other addresses as the parties may designate in writing by the means
above described.
In addition to the foregoing, any notice Tenant gives to Landlord which in any
manner relates to any Alterations shall be given to:
Alexandria Real Estate Equities, Inc.
9820 Willow Creek Road
Suite 440
San Diego, CA 98131
Attn: Senior Vice President,
Construction & Development
Telephone: (858) 530-8190
Fax: (858) 530-8191
The time period in which to respond to any notice or consent shall commence to
run on the date on which such notice is deemed effective as stated above. Any
notices of the same matter that are required by or given in connection with this
Lease, the Earl Davie Building Lease, the Purchase Agreement or the Line of
Credit Loan need be given once to a party and not duplicated for each such
contract.
27.4 Survival. The obligations of each party applicable to time periods
prior to the termination or expiration of this Lease shall survive termination
or expiration of this Lease, including each party's right to indemnification and
defense from claims arising from matters occurring prior to termination even
though the claim is asserted after termination.
27.5 No Oral Agreements. It is expressly agreed between Landlord and
Tenant that there is no verbal understanding or agreement which in any way
changes the terms, covenants and conditions herein set forth, and that no
modification of this Lease shall be effective unless made in writing and duly
executed by the authorized officers of the necessary parties or party and
consented to by Landlord's mortgagee, if any. Landlord and Tenant hereby agree
that all prior or contemporaneous oral understandings, agreements or
negotiations relative to the leasing of the Premises are merged into this Lease.
27.6 No Waiver. The failure of Landlord or Tenant to insist, in one or
more instances, upon the strict performance by Tenant or Landlord of any of the
provisions of this Lease shall not be construed as a waiver of any right or
remedy available for any future breach of such provisions. Receipt by Landlord
of Rent with knowledge of the breach of any provisions hereof shall not be
deemed a waiver of any right or remedy available for such breach.
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27.7 Time of Essence. Time is of the essence of this Lease.
27.8 Waiver of Common Law. Tenant waives any of the following rights, to
the extent they exist now or will exist in the future under Law(including common
law): the right to terminate this Lease, any right to offset amounts due against
Rent, and/or any right to make repairs at the expense of Landlord. Landlord
waives any statutory landlord's lien against Tenant's personal property,
including its Removable Equipment.
27.9 Legal Expense. If either party incurs any third party out of pocket
costs or expenses, including those of a collection agency and any attorneys'
fees, to collect any sum which is past due hereunder, the defaulting party shall
reimburse the nondefaulting party therefor, with or without litigation. If any
action, arbitration or proceeding (including any appeal thereof) is brought by
either party to enforce its rights under this Lease or to collect a judgment
against the other arising from this Lease ("Action"), the unsuccessful party
therein shall pay all enforcement costs incurred by the prevailing party
therein, including reasonable attorneys' fees and costs.
27.10 Governing Law/Venue/Waiver of Jury. This Lease shall be performed,
construed and enforced in accordance with the laws of the State of Washington
and the parties agree that venue shall lie in King County, Washington. Landlord
and Tenant each unconditionally waives any right to trial by jury to resolve any
claim, action or demand asserted in connection with any matter arising in
connection with this Lease.
27.11 Force Majeure. Except as specifically provided otherwise herein, and
except for the periods during which either party may cure a default hereunder
the time periods for Landlord's or Tenant's performance hereunder (except for
the payment of money) shall be extended for periods of time during which the
non-performing party's performance is prevented due to circumstances beyond the
party's control, including, without limitation, strikes, embargoes, newly
imposed governmental regulations, inclement weather and other acts of God, war
or other strife (collectively "Force Majeure"). Notwithstanding the foregoing, a
Force Majeure may apply to certain Events of Default pursuant to Section 15.2.
27.12 Headings. The headings used in this Lease are for convenience only
and shall not have any bearing or meaning with respect to the content or context
of this instrument.
27.13 Holding Over. Tenant shall have no right to retain possession of the
Premises beyond the expiration or earlier termination of the Lease. If Tenant
holds over after the expiration of the Term, with the express consent of
Landlord, such tenancy shall be from month-to-month only, and not a renewal
hereof or an extension for any further Term, and such month-to-month tenancy
shall be subject to each and every term, covenant and agreement contained
herein; provided, however, that Tenant shall pay as rent during any holding over
period, an amount equal to 150% of the Base Rent payable immediately preceding
the expiration of the Term plus all Additional Rent. Nothing in this Section
shall be construed as a consent by Landlord to any holding over by Tenant and
Landlord expressly reserves the right to require Tenant to surrender possession
of the Premises upon the expiration of the Term or upon the earlier termination
thereof and to assert any remedy in law or equity to evict Tenant and/or collect
damages in connection with such holding over.
27.14 Rights Are Cumulative. All rights, powers and privileges conferred
hereunder upon the parties shall be cumulative, but not restricted to those
given by law.
27.15 Severability. If any term or provision of this Lease shall be held
invalid or unenforceable to any extent, the remaining terms, conditions and
covenants of this Lease shall not be affected thereby and each of said terms,
covenants and conditions shall be valid and enforceable to the fullest extent
permitted by law, unless an essential purpose of this Lease would be defeated by
loss of the invalid or unenforceable provision.
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27.16 Interpretation. This Lease has been fully negotiated and no
provision shall be construed for or against either Tenant or Landlord, and this
Lease shall be interpreted in accordance with its general tenor in an effort to
reach an equitable result. Whenever words such as "herein," "hereunder," etc.,
are used in this Lease, they shall mean and refer to this Lease in its entirety
and not to any specific section, paragraph or other part of this Lease.
27.17 Brokers. The Staubach Company represents Tenant and
Insignia/Kidder Mathews represents Landlord. Each party shall be responsible for
paying any commissions or fees due to its broker and shall hold the other party
harmless from any claims for commissions or finders fees due from any other
third parties claiming to have been engaged by that party.
27.18 Counterparts. This Lease may be executed in counterparts which,
when taken together, will comprise a single original agreement. Facsimile
signatures shall be binding upon transmission.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed as of
the day and year first written above.
LANDLORD:
ARE-1201/1208 Eastlake Avenue, LLC,
a Delaware limited liability company
By: ALEXANDRIA REAL ESTATE EQUITIES, L.P.
a Delaware limited partnership, its managing member
By: ARE-QRS CORP.,a Maryland corporation,
general partner
By: /s/ Peter J. Nelson
----------------------------
Peter J. Nelson, Chief Financial
Officer
TENANT:
ZYMOGENETICS, INC.
a Washington corporation
By: /s/ James A. Johnson
----------------------------------------------
James A. Johnson
Senior Vice President - Chief Financial Officer
EXHIBITS:
Exhibit A: Legal Description
Exhibit B: Title Encumbrances
Exhibit C: Access and Confidentiality Agreement
Exhibit D: Letter of Credit
Exhibit E: Pledge Agreement
Exhibit F: Custodial Agreement
Exhibit G: Fixed Equipment
Exhibit H: Use and Function of Leased Space
Exhibit I: Intentionally Deleted
Exhibit J: Estoppel
Exhibit K: Intentionally Deleted
Exhibit L: Fair Market Value Determination
Exhibit M: Amendment to Lease
31
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
I certify that I know or have satisfactory evidence that PETER J.
NELSON is the person who appeared before me, and said person acknowledged that
he signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it as the Chief Financial Officer of ARE-QRS, CORP.,
a Maryland corporation, which is the General Partner of ALEXANDRIA REAL ESTATE
EQUITIES, L.P., a Delaware limited partnership, which is the Managing Member of
ARE-1201/1208EASTLAKE AVENUE, LLC, to be the free and voluntary act of such
party for the uses and purposes mentioned in this instrument.
DATED: October 15, 2002
/s/ Teresa A. Flores
-------------------------------
(Signature of Notary Public)
Teresa A. Flores
-------------------------------
(Printed Name of Notary Public)
My Appointment expires: 6-24-05
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that James A.
Johnson is the person who appeared before me, and said person acknowledged that
he/she signed this instrument, on oath stated that he/she was authorized to
execute the instrument and acknowledged it as the Senior Vice President and
Chief Financial Officer of ZYMOGENETICS, INC. to be the free and voluntary act
of such party for the uses and purposes mentioned in this instrument.
DATED: October 16, 2002
/s/ Carol A. Alto
-------------------------------
(Signature of Notary Public)
Carol A. Alto
-------------------------------
(Printed Name of Notary Public)
My Appointment expires: 3-7-06
32
EXHIBIT A
LEGAL DESCRIPTION
PARCEL A (Lake Union Steam Plant):
THAT PORTION OF LOTS 1 THROUGH 7, INCLUSIVE, BLOCK 4, R. C. GRAVES ADDITION TO
THE CITY OF SEATTLE, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 3 OF
PLATS, PAGE(S) 120, IN KING COUNTY, WASHINGTON, LYING SOUTHEASTERLY OF FAIRVIEW
AVENUE EAST AS CONDEMNED IN KING COUNTY SUPERIOR COURT CAUSE NUMBER 67239 UNDER
CITY OF SEATTLE ORDINANCE NUMBER 20186;
ALSO, LOTS 1 THROUGH 3 AND LOTS 6 THROUGH 10, BLOCK 4, FRANCE'S ADDITION TO THE
CITY OF SEATTLE, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 1 OF PLATS,
PAGE(S) 195, IN KING COUNTY, WASHINGTON;
EXCEPT THAT PORTION THEREOF CONDEMNED FOR EXTENSION OF LAKE AVENUE (NOW
EASTLAKE AVENUE EAST) UNDER CITY OF SEATTLE ORDINANCE NUMBER 1284;
ALSO, THAT PORTION OF GOVERNMENT LOT 1 OF SECTION 29, TOWNSHIP 25 NORTH, RANGE 4
EAST, WILLAMETTE MERIDIAN, IN KING COUNTY, WASHINGTON, BOUNDED ON THE NORTH BY
LOT 6, BLOCK 4, FRANCE'S ADDITION TO THE CITY OF SEATTLE, ACCORDING TO THE PLAT
THEREOF, RECORDED IN VOLUME 1 OF PLATS, PAGE 195, IN KING COUNTY, WASHINGTON; ON
THE SOUTH BY THE NORTH LINE OF LOT 9 AND THE SOUTHEASTERLY PRODUCTION THEREOF,
BLOCK 11, EAST PARK ADDITION TO THE CITY OF SEATTLE, ACCORDING TO THE PLAT
THEREOF, RECORDED IN VOLUME 8 OF PLATS, PAGE 83, IN KING COUNTY, WASHINGTON; ON
THE EAST BY EASTLAKE AVENUE EAST; AND ON THE WEST BY LOT 12, BLOCK 68, LAKE
UNION SHORELANDS, IN KING COUNTY, WASHINGTON, AS SHOWN ON THE OFFICIAL MAPS ON
FILE IN THE OFFICE OF THE COMMISSIONER OF PUBLIC LANDS AT OLYMPIA, WASHINGTON,
ON JULY 1, 1907;
ALSO, LOTS 8 AND 9, BLOCK 11, EAST PARK ADDITION TO THE CITY OF SEATTLE,
ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 8 OF PLATS, PAGE(S) 83, IN KING
COUNTY, WASHINGTON;
ALSO, LOTS 5 THROUGH 14, BLOCK 68, LAKE UNION SHORELANDS, IN KING COUNTY,
WASHINGTON, AS SHOWN ON THE OFFICIAL MAPS ON FILE IN THE OFFICE OF THE
COMMISSIONER OF PUBLIC LANDS AT OLYMPIA, WASHINGTON, ON JULY 1, 1907; EXCEPT
THAT PORTION OF LOTS 5 THROUGH 8, LYING WITHIN FAIRVIEW AVENUE EAST AS CONDEMNED
IN KING COUNTY SUPERIOR COURT CAUSE NUMBER 67239 UNDER CITY OF SEATTLE ORDINANCE
NUMBER 20186;
ALSO, THAT PORTION OF VACATED BELLEVUE AVENUE EAST, FORMERLY OREGON STREET,
AS ESTABLISHED IN THE PLAT OF FRANCE'S ADDITION TO THE CITY OF SEATTLE,
ACCORDING TO THE PLAT THEREOF, RECORDED IN VOLUME 1 OF PLATS, PAGE 195, IN KING
COUNTY, WASHINGTON, LYING NORTHWESTERLY OF THE NORTHWESTERLY MARGIN OF LAKE
AVENUE (NOW EASTLAKE AVENUE EAST), AS ESTABLISHED BY ORDINANCE NUMBER 1284;
A-1
ALSO, THAT PORTION OF VACATED LAKE AVENUE (NOW EASTLAKE AVENUE EAST), AS
ESTABLISHED IN THE PLAT OF EAST PARK ADDITION TO THE CITY OF SEATTLE, ACCORDING
TO THE PLAT THEREOF, RECORDED IN VOLUME 8 OF PLATS, PAGE 83, IN KING COUNTY,
WASHINGTON, LYING NORTHWESTERLY OF THE NORTHWESTERLY MARGIN OF SAID LAKE AVENUE
(NOW EASTLAKE AVENUE EAST), AS ESTABLISHED BY ORDINANCE NUMBER 1284, AND
ADJACENT TO LOT 9, BLOCK 11 OF SAID PLAT;
ALSO, THAT PORTION OF VACATED EASTLAKE AVENUE EAST AT EAST NELSON PLACE
DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST EASTERLY CORNER OF BLOCK 11, EAST PARK ADDITION TO THE
CITY OF SEATTLE, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 8 OF PLATS,
PAGE(S) 83, IN KING COUNTY, WASHINGTON; THENCE SOUTH 34(degree)41'22" WEST ALONG
THE SOUTHEASTERLY LINE OF SAID BLOCK TO THE INTERSECTION WITH THE PRODUCTION
SOUTHWESTERLY OF THE NORTHWESTERLY MARGIN OF EASTLAKE AVENUE NORTH AS
ESTABLISHED BY ORDINANCE NUMBER 1284 AND THE TRUE POINT OF BEGINNING; THENCE
CONTINUING SOUTHWESTERLY ALONG SAID SOUTHEASTERLY LINE OF SAID BLOCK 11, A
DISTANCE OF 17.96 FEET; THENCE NORTH 41(degree)17'56" EAST, A DISTANCE OF 91.02
FEET TO THE NORTHWESTERLY MARGIN OF EASTLAKE AVENUE NORTH AS ESTABLISHED BY
ORDINANCE NUMBER 1284; THENCE SOUTH 42(degree)55'03" WEST ALONG SAID
NORTHWESTERLY MARGIN OF EASTLAKE AVENUE NORTH AND ITS PROJECTION, A DISTANCE OF
73.21 FEET, TO THE TRUE POINT OF BEGINNING.
(BEING KNOWN AS LOTS 1 AND 2 OF CITY OF SEATTLE LOT BOUNDARY ADJUSTMENT NUMBER
9604526, RECORDED UNDER RECORDING NUMBER 9611060361).
A-2
EXHIBIT B
CURRENT ENCUMBRANCES
EASEMENT AND THE TERMS AND CONDITIONS THEREOF:
GRANTEE: CITY OF SEATTLE, A MUNICIPAL CORPORATION
PURPOSE: WATER DRAIN PIPE AND APPURTENANCES, AND FOR THE INSTALLATION,
OPERATION, MAINTENANCE, PROTECTION, REPAIR, ALTERATION OR RECONSTRUCTION THEREOF
RECORDED: MAY 5, 1993
RECORDING NUMBER: 9305051203
EXCEPTIONS AND RESERVATIONS CONTAINED IN DEEDS FROM THE STATE OF WASHINGTON,
WHEREBY THE GRANTOR EXCEPTS AND RESERVES ALL OIL, GASES, COAL, ORES, MINERALS,
FOSSILS, ETC., AND THE RIGHT OF ENTRY FOR OPENING, DEVELOPING AND WORKING THE
SAME AND PROVIDING THAT SUCH RIGHTS SHALL NOT BE EXERCISED UNTIL PROVISION HAS
BEEN MADE FOR FULL PAYMENT OF ALL DAMAGES SUSTAINED BY REASON OF SUCH ENTRY;
RECORDED UNDER RECORDING NUMBERS 2326072, 575452, 774699, 867187, 531949, 868275
AND 544487.
RIGHT OF STATE OF WASHINGTON OR ITS SUCCESSORS, SUBJECT TO PAYMENT OF
COMPENSATION THEREFOR, TO ACQUIRE RIGHTS OF WAY FOR PRIVATE RAILROADS,
SKID ROADS, FLUMES, CANALS, WATER COURSES OR OTHER EASEMENTS FOR
TRANSPORTING AND MOVING TIMBER, STONE, MINERALS AND OTHER PRODUCTS FROM
THIS AND OTHER PROPERTY, AS RESERVED IN DEEDS REFERRED TO ABOVE.
AGREEMENT AND THE TERMS AND CONDITIONS THEREOF:
BETWEEN: ZYMOGENETICS, INC. AND: CITY OF SEATTLE
RECORDED: MARCH 15, 1993
RECORDING NUMBER: 9303150948
REGARDING: TRANSPORTATION MANAGEMENT PLAN
AGREEMENT AND THE TERMS AND CONDITIONS THEREOF:
BETWEEN: ZYMOGENETICS, INC., A WASHINGTON CORPORATION AND: CITY OF SEATTLE, A
MUNICIPAL CORPORATION RECORDED: MAY 5, 1993
RECORDING NUMBER: 9305051200
REGARDING: DEVELOPMENT AND USE OF SAID PREMISES AND RESTRICTIONS RELATED THERETO
RELEASE OF DAMAGE AGREEMENT AND THE TERMS AND CONDITIONS THEREOF:
BETWEEN: ZYMOGENETICS INC., A WASHINGTON CORPORATION AND: CITY OF SEATTLE
RECORDED: MAY 10, 1993
RECORDING NUMBER: 9305100412
RELEASING CITY OF SEATTLE FROM ALL FUTURE CLAIMS FOR DAMAGES RESULTING FROM:
PERMISSION TO OCCUPY PUBLIC RIGHT OF WAY ALONG EASTLAKE AVENUE EAST FROM 155
FEET NORTH OF EAST NELSON AND CONTINUING NORTH 110 FEET BY ERECTING AND
MAINTAINING THEREIN A SHORING SYSTEM WITH EXTERIOR TIEBACKS.
COVENANTS, CONDITIONS AND RESTRICTIONS CONTAINED IN CITY OF SEATTLE ORDINANCE
NUMBER 117251 RELATING TO HISTORIC PRESERVATION:
RECORDED: SEPTEMBER 6, 1994
RECORDING NUMBER: 9409060952
SAID INSTRUMENT IS A RE-RECORDING OF DOCUMENT RECORDED UNDER RECORDING
NUMBER 9408150393.
B-1
COVENANTS, CONDITIONS AND RESTRICTIONS RELATING TO LANDMARK PRESERVATION
CONTAINED IN INSTRUMENT:
RECORDED: JANUARY 26, 1995
RECORDING NUMBER: 9501260857
COVENANTS, CONDITIONS, RESTRICTIONS, EASEMENTS, NOTES, DEDICATIONS AND SETBACKS,
IF ANY, SET FORTH IN OR DELINEATED ON THE BOUNDARY/LOT LINE ADJUSTMENT RECORDED
UNDER RECORDING NUMBER 9611060361.
AGREEMENT AND THE TERMS AND CONDITIONS THEREOF:
BETWEEN: ZYMOGENETICS, INC.AND: CITY OF SEATTLE
RECORDED: MAY 1, 1997
RECORDING NUMBER: 9705011660
REGARDING: TRANSPORTATION MANAGEMENT PLAN
RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON PROPERTY HEREIN DESCRIBED
AS RESERVED IN CITY OF SEATTLE ORDINANCE NUMBER 115487, RECORDED UNDER RECORDING
NUMBER 9101221562.
RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON PROPERTY HEREIN DESCRIBED
AS RESERVED IN CITY OF SEATTLE ORDINANCE NUMBER 116905, RECORDED UNDER RECORDING
NUMBER 9311021657.
MATTERS DISCLOSED BY UNRECORDED SURVEY BY BUSH, ROED & HITCHINGS, INC., DATED
JUNE 2, 2002, JOB NO. 96189.09.
NON-DELINQUENT TAXES AND ASSESSMENTS WHICH ARE NOT SHOWN AS EXISTING LIENS BY
THE RECORDS OF ANY TAXING AUTHORITY THAT LEVIES TAXES OR ASSESSMENTS ON REAL
PROPERTY OR BY THE PUBLIC RECORD.
GENERAL TAXES AND RELATED CHARGES PAYABLE THEREWITH, IF ANY, FOR 2002, A LIEN
NOW PAYABLE, BUT NOT YET DELINQUENT.
B-2
EXHIBIT C
ACCESS AND CONFIDENTIALITY AGREEMENT
This ACCESS AND CONFIDENTIALITY AGREEMENT (this "Agreement") is
executed effective as of the date indicated below, by undersigned ("Contractor")
for the benefit of ZYMOGENETICS, INC., a Washington corporation ("ZGI").
A. ZGI owns certain real property and improvements commonly known as
1201 and 1208 Eastlake Avenue East in Seattle, Washington (the "Property").
B. ZGI is the tenant and _______________________________.("ARE") is the
landlord under those certain Leases dated _______________________, 2002 for the
Property (the "Leases"). Pursuant to Section 21 of each of the Leases, Landlord
has various rights of access to the Property and a corresponding right to extend
that right of access to its agents, consultants, contractors and
representatives.
C. ARE requested that ZGI allow Contractor to enter the______________
Property (the "Subject Property") for the following purpose:
_____________________________________ (the "Access Purpose").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Contractor agrees and acknowledges as follows:
1. Purpose. Subject to the terms and provisions of this Agreement and
the Leases, Contractor, as ARE's agent, will be entering upon the Subject
Property to perform the Access Purpose at ARE's request and direction.
2. Conditions to Entry. Contractor's access to the Property will be
limited to regular business hours. At least 2 business days prior to entering
onto or into the Subject Property, Contractor shall contact ZGI's
representative, Scott Anderson at (206) 442-6747 or Cecil Weight at (206)
442-6689 who will make arrangements to have the Contractor accompanied by a ZGI
representative ("ZGI Representative"). Contractor must be accompanied by a ZGI
Representative at all times Contractor is on the Subject Property, and all of
Contractor's activities shall be in accordance with all applicable Laws and
regulations.
3. Costs. Contractor is engaged by ARE. ARE is not acting as ZGI's
agent and ZGI is not liable to pay Contractor for any services provided by
Contractor to ARE.
4. Inspection Obligations. While on the Subject Property and while
performing the Access Purpose, Contractor shall: (a) not interfere with the use
of the Subject Property by any occupant; (b) not interfere with the operation
and maintenance of the Subject Property or any construction on the Subject
Property; (c) not damage any part of the Subject Property or personal property
located at the Subject Property owned or held by any person or entity; (d) not
injure or otherwise cause bodily harm to any ZGI Representative or any other
person or entity; (e) maintain comprehensive general liability (occurrence)
insurance covering any accident arising in connection with the presence of the
Contractor on the Subject Property in an amount not less than $2,000,000,
evidence of such insurance shall name ZGI as an additional insured and be
delivered to the ZGI Representative prior to accessing the Subject Property; (f)
not permit any liens to attach to the Subject Property by reason of Contractor's
work; and (g) not conduct any invasive activities, unless Contractor confirms in
advance that ZGI has consented to each such invasive inspection.
C-1
5. Confidentiality. Contractor and all of Contractor's partners,
members, officers, directors, and attorneys (collectively the "Contractor
Parties") will treat as confidential all the information disclosed to them by
ZGI and/or ARE or discovered in connection with its access to the Subject
Property (whether information is disclosed orally, in writing or in visual or
electronic form, and including any observations, knowledge, information, reports
(written or oral), tests, or studies (together with the results of such studies
and tests) obtained by or provided to any of the Contractor Parties regarding
the Subject Property, whether in connection with the Inspections, Contractor's
review of the due diligence materials delivered or made available to Contractor,
or otherwise, but not including information known by Contractor prior to any
disclosures by ZGI and/or ARE or any information that is generally known or
available to the public) (the "Information"), giving it no less care than
Contractor's own confidential information, and make no use of any such
Information except in connection with its engagement by ARE and subject to the
limitations on ARE's use of the Information pursuant to Section 21.4 of the
Leases, or to the extent required by court or legal requirements (which may
include SEC regulations, NYSE and NASDAQ requirements). Contractor will not
record any memorandum disclosing this Agreement.
If Contractor receives any Information from ZGI, it will return
originals and all copies of Information to ZGI immediately upon request (except
for the copy delivered to ARE). In addition, and except as required by
applicable law, Contractor shall not issue any release, make any statement to,
or confirm or deny any statement made by the media without both ZGI and ARE's
advance written consent, which may be withheld in their sole and absolute
discretion.
6. Indemnification and Repair. Contractor hereby agrees to indemnify,
defend (with counsel acceptable to ZGI), and hold ZGI and its officers,
directors, successors, and assigns harmless from and against any and all liens,
claims, causes of action, liabilities, demands, suits, obligations, losses,
penalties, costs, and expenses (including reasonable attorneys' fees)
(generally, "Damages"), including without limitation, Damages for any actual
physical damage to the Subject Property or any injury to persons, all to the
extent caused by or in connection with the entry onto the Subject Property by a
Contractor Party or an act of a Contractor Party; provided, however, that
Contractor's indemnity hereunder shall not include any Damages to the extent
resulting from the acts or omissions of any ZGI Representative; and provided
further, if there are any liens arising from or relating to Contractor's entry
or any other activity of the Contractor Parties relating to the Subject
Property, then Contractor will cause such liens to be removed from the Subject
Property within 10 business days after notice thereof, and if Contractor fails
to timely perform, then ZGI shall thereafter have the right but not the
obligation to pay the amount claimed on the lien and collect from Contractor all
costs incurred in removing the lien, including attorney's fees. In addition,
Contractor shall promptly repair any physical damage to the Subject Property
caused by any Contractor Party. ZGI will only have two years from the last date
of Contractor's access to the Subject Property to commence an against Contractor
under this Section.
7. No Right of Contribution from ARE. Contractor agrees that if it
breaches its rights hereunder and such breach results in a payment to ZGI, then
Contractor will not have any right to seek contribution or reimbursement from
ARE.
8. Entire Agreement. This Agreement reflects the entire Agreement
between Contractor and ZGI, and there are no other agreements, oral or written,
between Contractor and ZGI regarding the Subject Property. This Agreement can be
amended only by written agreement signed by both ZGI and Contractor.
9. Survival. This Agreement, and the terms, covenants, and conditions
herein contained, shall inure to the benefit of and be binding upon the heirs,
personal representatives, successors, and assigns of each of the Contractor and
ZGI. Contractor agrees that all of the Contractor Parties' access to the Subject
Property is subject to this Agreement.
10. Governing Law, Legal Expenses. This Agreement will be construed,
performed, and enforced in accordance with the laws of the State of Washington.
Supplementing ZGI's rights under Section 6 above, if any action, arbitration or
proceeding (including any appeal thereof) is brought by ZGI to enforce its
rights under this Agreement or to collect a judgment against Contractor arising
from this
C-2
Agreement, the unsuccessful party therein shall pay all enforcement costs
incurred by the prevailing party therein, including reasonable attorneys' fees
and costs.
11. Notice. For purposes of this Agreement only, any notice (including
written notice) required by this Agreement may be provided either to:
ZGI: ZYMOGENETICS, INC.
Attn: Chief Financial Officer
1201 Eastlake Avenue East
Seattle, WA 98121
Telephone: (206)442-6600
Facsimile: (206)442-6608
Contractor: see address below signature
IN WITNESS WHEREOF, Contractor has executed this Agreement effective as of
_______________, 2002.
Contractor:
_____________________________________________
a____________________________________________________
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
Notice Address:______________________________________
_____________________________________________________
Fax:_________________________________________________
Telephone:___________________________________________
C-3
EXHIBIT D
LETTER OF CREDIT
IRREVOCABLE STANDBY LETTER OF CREDIT
PLACE AND DATE OF ISSUE: CREDIT NUMBER: ___________
____________________[PLACE] DATE AND PLACE OF EXPIRY:
____________________[DATE] ___________ [DATE]
IN __________________[PLACE]
BENEFICIARY: APPLICANT: [TENANT]
__________________________________ ____________________________
__________________________________ ____________________________
__________________________________ ____________________________
Up to an aggregate amount of ____________________ US DOLLARS (US$____________).
Dear Sirs:
We hereby issue in your favor this Standby Letter of Credit which is available
by your drafts at sight drawn on [ISSUER], at [OFFICE OF ISSUER] and accompanied
by one of the following documents:
1. Your notarized signed written certification, stating substantially the
following (all blank spaces shall be completed by Beneficiary):
In reference to [ISSUER] Letter of Credit No. ____________, we
hereby certify and affirm that an event has occurred which
entitles [BENEFICIARY] to draw on this Letter of Credit pursuant
to that certain lease dated [LEASE DATE] between [BENEFICIARY],
"Landlord," and [TENANT] "Tenant."
We hereby irrevocably instruct [ISSUER] to pay the sum of $
_______ Such sum shall be paid directly to [BENEFICIARY] at
___________________________________.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Certificate as of the ____ day of _______________, 200__.
__________________________________,
By: _______________________________
Name:
Title:
2. Your notarized signed written certification, notarized, stating
substantially the following (all blank spaces shall be completed by
Beneficiary):
In reference to [ISSUER] Letter of Credit No. ________ we hereby
certify that this Letter of Credit is to expire within 30
business days and Tenant has not provided a renewal of this
Letter of Credit or an acceptable security replacement after 5
business days notice as required by that certain Lease dated
[LEASE DATE] between [BENEFICIARY], "Landlord," and [TENANT]
"Tenant."
We hereby irrevocably instruct [ISSUER] to pay the sum of
$__________ directly to [BENEFICIARY] at
_______________________________ ____________________.
D-1
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Certificate as of the ____ day of _______________, 200___.
___________________________________,
By: _______________________________
Name:
Title:
This Letter of Credit may be drawn in whole or in part from time to time to the
aggregate of its face amount.
This Letter of Credit is transferable. Transfer of this Letter of Credit is
subject to our receipt of beneficiary's instructions in the form attached hereto
as Exhibit A accompanied by the original Letter of Credit and amendment(s) if
any, costs or expenses of such transfer shall be for the account of the
beneficiary.
We hereby agree with the beneficiary that documents presented to our office in
compliance with the terms and conditions of this letter of credit will be duly
honored as specified herein.
This Letter of Credit is subject to the International Standby Practices 1998,
ICC Publication No. 590. [or other convention selected by Issuer]
All inquiries and/or correspondence pertaining to this Letter of Credit must be
in writing and directed to the attention of _____________________, telephone
number _____________________ at the above mentioned address and must
specifically refer to this Letter of Credit No. ____________________.
Very truly yours,
[ISSUER]
By: _______________________________
Authorized Signature
Title:
D-2
EXHIBIT A
REQUEST FOR ENTIRE TRANSFER OF LETTER OF CREDIT
WITHOUT SUBSTITUTION OF INVOICES
{Issuer}
________________________ Letter of Credit No.________
ADDRESS
________________________
TO: [Issuer]
We request you to transfer all of our rights as beneficiary under the Letter of
Credit referenced above to a second beneficiary named below:
________________________________________________________________________________
NAME OF SECOND BENEFICIARY
________________________________________________________________________________
ADDRESS
By this transfer, all our rights as the original beneficiary, including all
rights to make drawings under the Letter of Credit, go to the second
beneficiary. The second beneficiary shall have sole rights as beneficiary,
whether existing now or in the future, including sole rights to agree to any
amendments, including increases or extensions or other changes. All amendments
will be sent directly to the second beneficiary without the necessity of consent
by or notice to us.
We enclose the original letter of credit and any amendments. Please indicate
your acceptance of our request for the transfer by endorsing the letter of
credit and send it to the second beneficiary with your customary notice of
transfer.
__ Enclose is our check for $_________________
__ You may debit my/our account No. _________
We also agree to pay you on demand any expenses which may be incurred by you in
connection with this transfer.
The signature and title below conform with those shown in our files as
authorized to sign for the beneficiary. Policies governing signature
authorization as required for withdrawals from customer accounts shall also be
applied to the authorization of signatures on this form.
_________________________________________
NAME OF BENEFICIARY
_________________________________________
NAME OF AUTHORIZED SIGNER AND TITLE
_________________________________________
AUTHORIZED SIGNATURE
D-3
- -----------------------------------------
Date: __________________________
_________________________________________
NAME OF BANK
_________________________________________
AUTHORIZED SIGNATURE AND TITLE
- -----------------------------------------
D-4
EXHIBIT E
PLEDGE AGREEMENT
SECURITY DEPOSIT PLEDGE AGREEMENT
THIS SECURITY DEPOSIT PLEDGE AGREEMENT (the "Agreement"), dated as of
_______________, 20__, is between ZYMOGENETICS, INC, a Washington corporation
("Tenant"), and ____________________________, a _______________ ("Landlord").
The parties hereto agree as follows:
1. Definitions
For purposes of this Agreement, the following terms have the meanings set
forth below:
"Collateral" has the meaning specified in Section 5.
"Collateral Securities" means fixed income securities that meet the
following requirements:
(a) are rated AA or A1 or better by Standard & Poor's Rating Group;
(b) are freely transferable without restriction of any kind (including any
restrictions that may be imposed under federal or state securities laws); and
(c) have remaining maturities of not more than 2 years.
"Control Account" means the account established by Tenant in its name at
_________________ or such other brokerage firm or bank as Landlord may
reasonably approve, which account is subject to the terms and conditions of the
Control Account Agreement.
"Control Account Agreement" means the "Security, Custodian and Control
Account Agreement" in substantially the form of EXHIBIT A hereto, which is
entered into with respect to the Control Account.
"Event of Default" has the meaning specified in Section 8.
"Lease" means the "Lease" between Tenant and Landlord dated ______________,
2002, as now or hereafter amended, relating to_____________ [street address],
Seattle, Washington.
"Market Value" means, as of any date of determination, the market value of
the Collateral Securities then held in the Control Account, as reflected, at
Landlord's option, as of the end of a business day in the Wall Street Journal or
other any nationally recognized business publication of similar stature
containing the current bid and asked prices for securities traded on a major
exchange in the United States or on the most recently monthly account statement
delivered to Landlord and Tenant pursuant to the Control Account Agreement.
2. Purpose
This Agreement is for the purpose of securing the prompt payment and
performance in full when due, whether at stated maturity, by acceleration or
otherwise, of Tenant's obligations (the "Obligations") with respect to the
security deposit (the "Security Deposit") that are detailed in Section 7 of the
Lease. The amount of the Security Deposit which is to be covered by the
Collateral described in this Agreement is $______________ and is referred to
herein as the "Required Balance."
3. Collateral Securities
As collateral for the Obligations throughout the term of the Lease, Tenant
will pledge to Landlord, and grant Landlord, a perfected, first priority
security interest in, Collateral Securities held in the Control
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Account with a Market Value at all times equal to the Required Balance. A list
of the initial Collateral Securities pledged by Tenant and held in the Control
Account is attached to this Agreement as EXHIBIT B.
4. Control Account
Subject to the terms of the Agreement and the Control Account Agreement,
the Collateral Securities pledged by Tenant pursuant to this Agreement shall at
all times be held in the Control Account. The maintenance, disposition and
transfer of the Control Account and all Collateral Securities held therein shall
at all times be subject to the terms of the Agreement and the Control Account
Agreement.
5. Grant of Perfected First Lien Security Interest
Throughout the term of the Lease, as security for the Obligations, Tenant
hereby delivers, pledges, grants, transfers, assigns and sets over to Landlord,
and hereby grants to Landlord a continuing perfected first lien security
interest in, the following (the "Collateral"):
(a) All Collateral Securities, cash and other assets held in the Control
Account;
(b) The Control Account;
(c) All securities entitlements and financial assets relating to the
foregoing; and
(d) All proceeds and products of any of the foregoing held in the Control
Account.
6. Consent Rights, Trading Rights and Payments in Respect of the Collateral
(a) So long as no Event of Default has occurred and is continuing, Tenant
shall be entitled (i) to exercise (but not in a manner inconsistent with this
Agreement or the Control Account Agreement) all consent or other voting rights
with respect to the Collateral Securities, (ii) to receive and retain all
regularly scheduled payments of interest or dividends in respect of the
Collateral Securities or (iii) to substitute at any time during the term of the
Lease the Collateral Securities with other Collateral Securities, provided
Landlord obtains a perfected first priority security interest in the substitute
Collateral Securities prior to the release of the pledged Collateral Securities
and provided that Market Value of all Collateral Securities after the
substitution is equal to or greater than the Required Balance. Upon such
substitution, release and withdrawal of such released assets from the Control
Account, such released assets will no longer be subject to a security interest
in favor of Landlord and, unless subsequently re-deposited into the Control
Account, will no longer be "Collateral": within the meaning of this Agreement.
(b) If an Event of Default (as defined in the Lease) has occurred and is
continuing, Landlord shall be entitled (i) to exercise all consent or other
voting rights with respect to the Collateral Securities, (ii) to any and all
rights of sale, conversion, exchange, subscription, withdrawal and any other
rights, privileges or options pertaining to the Collateral as if Landlord were
the absolute owner thereof and (iii) to receive and retain, as additional
Collateral hereunder, any and all interest, dividends or other payments at any
time and from time to time paid on the Collateral; provided, however, that prior
to any exercise by Landlord of any of the preceding rights with respect to the
Collateral Securities, Landlord agrees to provide Tenant 3 business days' prior
written notice of its intent to exercise its rights to the Collateral.
(c) Any principal amount at any time paid in respect of the Collateral
Securities (whether at the acceleration thereof, as a scheduled or mandatory
sinking fund payment, in redemption or prepayment thereof or at the maturity
thereof) shall constitute part of the Collateral and shall be held in the
Control Account until reinvested as provided in the Collateral Account
Agreement. If for any reason Tenant should receive any such payment of principal
in respect of the Collateral Securities, Tenant shall receive and hold the same
in trust, for the benefit of Landlord, and shall promptly deposit such payment
(or, at Tenant's option, substitute Collateral Securities) in the Control
Account.
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7. Representations, Warranties and Covenants by Tenant
(a) Tenant represents that the execution, delivery and performance of this
Agreement does not violate any agreement to which it is bound or any law or
regulation applicable to Tenant, and that it has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder.
(b) Tenant represents that it is the sole beneficial owner of the
Collateral Securities and the proceeds thereof free and clear of any security
interest or other encumbrance other than the first priority security interest
created favor of Landlord pursuant to and in accordance with this Agreement and
Tenant will not create or permit to exist any other security interest or other
encumbrance against the Collateral. Tenant further represents, except as
permitted under this Agreement and the Control Account Agreement, that for the
term of this Agreement it will not sell, convey, transfer or otherwise dispose
of any of the Collateral Securities.
(c) Tenant represents that this Agreement and delivery of the Collateral
into the Collateral Account creates a valid, perfected, and first priority
security interest in the Collateral in favor of Landlord, and all actions
necessary to achieve such perfection have been duly taken.
(d) Tenant represents that this Agreement and delivery of the substitute
Collateral Securities into the Collateral Account pursuant to clause (iii) of
Section 6(a) will create a valid, perfected, and first priority security
interest in the substitute Collateral in favor of Landlord, and all actions
necessary to achieve such perfection, upon delivery to the Custodian, will have
been duly taken.
(e) Tenant at all times will cause the Control Agreement to remain in full
force and effect and will cause the Collateral Securities to be held in the
Control Account.
(f) Upon demand by Landlord, Tenant will permit inspection of the
Collateral Securities by Landlord.
(f) Tenant at all times will cause the Market Value of Collateral
Securities held in the Control Account to equal or exceed the Required Balance.
If, at any time, the Market Value of Collateral Securities held in the Control
Account is less than the Required Balance, Tenant shall immediately cause to be
deposited in the Control Account additional Collateral Securities with a Market
Value sufficient to cause the aggregate Market Value of all Collateral
Securities then held in the Collateral Account to equal or exceed the Required
Balance.
8. Liability
Tenant shall indemnify the financial institution party to the Control
Account Agreement for any and all costs and expenses, and attorney's fees and
court costs, which directly result from any sale of Collateral Securities and
the withdrawal of the settlement proceeds thereof (not to exceed the amount of
the Security Deposit Amount) authorized by Landlord to fulfill any of Tenant's
Obligations; provided, however, that nothing in this indemnification provision
shall operate or be construed to limit Tenant's rights against Landlord under
the terms of the Lease or Landlord's rights against Tenant thereunder. Tenant
shall indemnify and defend, with counsel reasonably acceptable to Landlord,
Landlord's right, title and first priority security interest in the Collateral
and Substitute Collateral. After Landlord delivers a Notice of Exclusive Control
to the financial institution party to the Control Account Agreement, (a)
Landlord may liquidate or sell all or any part of the Collateral in a
commercially reasonable manner and whether or not the value of any of the
Collateral is rising, falling or holding, and (b) Landlord is not required to
exercise any right, option or privilege arising from or relating to the
Collateral. The provisions of this section shall survive expiration or
termination of this Agreement or any determination that this Agreement or any
portion is void or voidable.
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9. Assignment and Amendment
(a) This Agreement may not be amended without the prior written consent
of both parties.
(b) This Agreement may not be assigned by either party without the prior
written consent of the other party; provided, however, that:
(i) Landlord may, at any time, and without notice to or the necessity of
obtaining Tenant's consent, assign to any financial institution providing a
loan to Landlord in connection with the property subject of the Lease
(together with any such financial institution's successors or assigns, the
"Lender") all of its rights under, and interest in, this Agreement. Within one
(1) business day after making any such assignment, Landlord shall deliver to
Tenant written notice of the assignment and a copy of the instrument of
assignment. Upon receipt by Tenant of the aforementioned notice, Lender shall
thereafter succeed to all of the rights and privileges of Landlord and shall
be subject to the same obligations, terms, conditions and restrictions
applicable to Landlord under the terms of this Agreement, provided that after
Lender sends Custodian a Lender Notice of Exclusive Control pursuant to
Section 10(b) of the Control Account Agreement, Lender shall also be subject
to the same obligations (including indemnification obligations arising from
and after the date of the Lender Notice of Exclusive Control) as Landlord.
Lender will not be liable for any act, omission or breach by Landlord of any
obligation under this Agreement or the Control Account Agreement which occurs
prior to the date of the Lender Notice of Exclusive Control and will, upon any
sale or transfer by Lender of its interest in the property and the Lease,
automatically be released and discharged from any and all liability thereafter
accruing under this Agreement or the Control Account Agreement; and
(ii) If Landlord assigns its interest in the Lease, whether voluntarily or
through involuntary assignment or transfer such as bankruptcy or foreclosure,
such assignment will automatically and without further action or notice to
Tenant, cause an assignment of Landlord's rights in this Agreement and the
Collateral to the assignee and upon the assignee's assumption of Landlord's
obligations under the Lease (including Landlord's obligations with respect to
this Agreement and the Collateral), Landlord will thereafter accrue no further
liability for the return of the Collateral. Upon request of either party,
Landlord and Tenant agree to execute such documents as may be necessary or
desirable to reflect or better confirm such assignment, assumption and/or
release.
10. Waivers
A waiver by either party of a breach of any provision of this Agreement
shall not constitute a waiver of any subsequent breach of such provision or of
any other provision hereof. Failure of either party to enforce at any time or
from time to time any provision of this Agreement shall not be construed as a
waiver thereof.
11. Severability
Each provision of this Agreement is intended to be severable from the
others so that if any provision or term hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remaining provisions and terms hereof.
12. Governing Law: Successors Bound
This Agreement shall be construed in accordance with the internal laws of
the State of Washington, determined without regard to conflicts of law. Subject
to all the terms and provisions hereof, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Each party hereto consents to submit to the jurisdiction of the courts
of the State of Washington and of the United States of America located in King
County, Washington for any action, suit or proceeding arising out of or relating
to this Agreement. Each party further waives any objection to the laying of
venue of any such action, suit or proceeding in such courts, and further agrees
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not to plead or claim in any such court that any such action, suit or proceeding
has been brought in an inconvenient forum.
13. Notices
All notices must be in writing and must be sent by personal delivery,
United States registered or certified mail (postage prepaid) or by an
independent overnight courier service, addressed to the addresses specified
below or at such other place which is not a post office box as either party may
designate to the other party by written notice given in accordance with this
section. Notices given by mail are deemed effective within 3 business days after
the party sending the notice deposits the notice with the United States Post
Office. Notices delivered by courier are deemed effective on the next business
day after the day the party delivering the notice timely deposits the notice
with the courier for overnight (next day) delivery.
If to Tenant: ZymoGenetics, Inc.
Attn: Chief Financial Officer
1201 Eastlake Avenue E.
Seattle, WA 98121
Telephone: (206) 442-6600
Fax: (206) 442-6608
With a copy to: Real Property Law Group, PLLC
Attn: Cynthia Thomas
1218 Third Avenue, Suite 1900
Seattle, WA 98101
Telephone: (206) 625-1717
Fax: (206) 374-2782
If to Landlord: _________________________
Attn: ___________________
_________________________
_________________________
Telephone: ______________
Fax: ____________________
With a copy to: Stoel Rives LLP
Attn: David H. Rockwell
600 University Street, Suite 3600
Seattle, WA 98101-3197
Telephone: (206) 386-7694
Fax: (206) 386-7500
14. Entire Agreement
This Agreement, together with the Lease and the Control Account Agreement,
embody the entire agreement and understanding between the parties pertaining to
the subject matters hereof and thereof, and supersedes any prior agreements,
understandings, negotiations, representations and discussions, whether oral or
written, of the parties, pertaining to such subject matters. The parties
acknowledge that they have all participated in the drafting of this Agreement,
and that they all have been represented by legal counsel of their own choosing
and the language of all parts of this Agreement shall in all cases be construed
as a whole, according to its fair meaning, and not strictly for or against any
of the parties.
15. Further Assurances
Tenant shall, upon the request of Landlord, execute and deliver such other
instruments and take and cause to be taken such further actions as may be
reasonably necessary or reasonably appropriate to
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carry out the provisions and purposes of this Agreement, and specifically to
continue the creation, attachment and perfection of the security interest
granted hereunder.
IN WITNESS WHEREOF, Tenant and Landlord have caused this Agreement to
be executed by their proper corporate officers as of the day and year first
above written.
TENANT
ZymoGenetics, Inc.
a Washington corporation
By_______________________________
Name:_________________________
Title:________________________
LANDLORD:
_________________________,
a _____________________
By_______________________________
Name:_________________________
Title:________________________
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EXHIBIT F
CUSTODIAL AGREEMENT
ACCOUNT CONTROL AGREEMENT
THIS ACCOUNT CONTROL AGREEMENT (this "Agreement") is made and entered into
as of the _____________day of _________________, 200_, by and among UNION BANK
OF CALIFORNIA, N.A., a national banking association ("Securities Intermediary'),
___________________________________, a ___________________("Customer"), and
____________________________________, a
_________________________________________("Secured Party").
RECITALS:
A. Pursuant to a Personal Custody Agreement, dated _______________, 200_
(the "Account Agreement"), by and between Customer and Securities Intermediary,
Customer has established a securities account, bearing Account No. _________
_______________________ (the "Account"), with Securities Intermediary.
B. Pursuant to a ____________________________ , dated __________________,
200_ (the "Security Agreement"). Customer has granted to Secured Party a
security interest in certain personal property of Customer, including without
limitation (i) the Account, (ii) all securities entitlements, investment
property and other financial assets now or hereafter credited to the Account,
(iii) all of Customer's rights in respect of the Account, such securities
entitlements, investment property and other financial assets, and (iv) all
products, proceeds and revenues of and from any of the foregoing personal
property (collectively, the "Collateral").
C. Securities Intermediary, Customer and Secured Party are entering into
this Agreement in order to perfect Secured Party's security interest in the
Account by means of control.
AGREEMENT:
In consideration of the foregoing recitals, Securities Intermediary, Customer
and Secured Party hereby agree as follows:
1. All terms used in this Agreement which are defined in the Commercial Code of
the state whose law governs this Agreement ("Commercial Code") but are not
otherwise defined herein shall have the meanings assigned to such terms in the
Commercial Code, as in effect on the date of this Agreement.
2. Upon receipt of a fully executed and acknowledged Notice of Exclusive
Control, substantially in the form attached as Exhibit A, Securities
Intermediary will comply with all entitlement orders originated by Secured Party
with respect to the Collateral, or any portion of the Collateral, without
further consent by Customer.
3. Securities Intermediary hereby represents and warrants (a) that the records
of Securities Intermediary show that Customer is the sole owner of the
Collateral, (b) that Securities Intermediary has not been served with any notice
of levy or received any notice of any security interest in or other claim to the
Collateral, or any portion of the Collateral, other than Secured Party's claim
pursuant to this Agreement, and (c) that Securities Intermediary is not
presently obligated to accept any entitlement order from any person with respect
to the Collateral, except for entitlement orders that Securities Intermediary is
obligated to accept from Secured Party under this Agreement and entitlement
orders that Securities Intermediary, subject to the provisions of Section 5
below, is obligated to accept from Customer.
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4. Without the prior written consent of Secured Party, Securities Intermediary
will not enter into any agreement by which Securities Intermediary agrees to
comply with any entitlement order of any person other than Secured Party or,
subject to the provisions of Section 5 below, Customer, with respect to any
portion or all of the Collateral. Securities Intermediary shall promptly notify
Secured Party and Customer if any person requests Securities Intermediary to
enter into any such agreement or otherwise assert or seeks to assert a lien,
encumbrance or adverse claim against any portion or all of the Collateral.
5. Except as otherwise provided in this Section 5, Securities Intermediary may
allow Customer to effect sales, trades, transfers and exchanges of Collateral
within the Account, but will not, without the prior written consent of Secured
Party, allow Customer to withdraw any Collateral from the Account (other than
withdrawals consisting solely of ordinary cash dividends or interest income).
Securities Intermediary acknowledges that Secured Party reserves the right, by
delivery of a fully executed and acknowledged Notice of Exclusive Control to
Securities Intermediary, to prohibit Customer from effecting any further
withdrawals (including withdrawals of ordinary cash dividends and interest
income), sales, trades, transfers or exchanges of any Collateral held in the
Account. Further, upon receipt of such fully executed and acknowledged Notice of
Exclusive Control, Securities Intermediary hereby agrees from thereafter to
comply with any and all written instructions delivered by Secured Party to
Securities Intermediary and from thereafter has no obligation to and will not,
investigate the reason for any action taken by Secured Party, the amount of any
obligations of Customer to Secured Party, the validity of any of Secured Party's
claims against or agreements with Customer, the existence of any defaults under
such agreements, or any other matter.
6. Customer hereby irrevocably waives any rights Customer may have under the
Account Agreement to the extent such rights are inconsistent with the provisions
of this Agreement, and hereby irrevocably authorizes Securities Intermediary to
comply with all instructions and entitlement orders delivered by Secured Party
to Securities Intermediary.
7. Securities Intermediary will not attempt to assert control, and does not
claim and will not accept any security or other interest in any part of the
Collateral, and Securities Intermediary will not exercise, enforce or attempt to
enforce any right of setoff against the Collateral, or otherwise charge or
deduct from the Collateral any amount whatsoever, except for any right
Securities Intermediary may have to collect account maintenance or similar fees
under the Account Agreement.
8. Securities Intermediary and Customer shall not amend, supplement or otherwise
modify the Account Agreement (including, without limitation the choice of law
provision and provisions providing for treatment of property held in the Account
as a financial asset) in any respect without Secured Party's prior written
consent.
9. Securities Intermediary shall not terminate the Account, and shall not permit
Customer to terminate the Account, without Secured Party's prior written
consent.
10. This Agreement shall remain in full force and effect until Securities
Intermediary receives written notice of its termination given by Secured Party.
11. Securities Intermediary and Customer hereby agree that any property held in
the Account shall be treated as a financial asset under such section of the
Commercial Code as corresponds with Section 8-102 of the Uniform Commercial
Code, notwithstanding any contrary provision of any other agreement to which
Securities Intermediary may be a party.
12. Securities Intermediary is hereby authorized and instructed, and hereby
agrees, to send to Secured Party at its address set forth in Section 18 below,
concurrently with the sending thereof to Customer, duplicate copies of any and
all monthly Account statements or reports issued or
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sent to Customer with respect to the Account. In addition, Securities
Intermediary shall (i) issue a confirmation or safekeeping receipt to both
Customer and Secured Party for each transaction made on the Account; and (ii)
upon request will provide Secured Party with information on the Account and the
financial assets held therein, and will provide Customer with a copy of any
information provided to Secured Party.
13. This Agreement does not create any obligation or duty on the part of
Securities Intermediary other than those expressly set forth herein. Secured
Party and Customer hereby acknowledge that Securities Intermediary has no
obligation to monitor the value of the Collateral for Secured Party or Customer.
14. Secured Party and Customer hereby agree, jointly and severally, to indemnify
and hold harmless Securities Intermediary from and against any and all losses,
liabilities, demands, claims, expenses and attorneys' fees which Securities
Intermediary may incur or suffer if all or any portion of the Collateral is
found to be fraudulent in nature or otherwise worthless or invalid for any
reason excepting only such losses, liabilities, demands, claims, expenses and
attorneys' fees which result solely from the gross negligence or willful
misconduct of Securities Intermediary.
15. Any forbearance or failure or delay by Secured Party in exercising any right
hereunder shall not be deemed a waiver thereof and any single or partial
exercise of any right shall not preclude the further exercise thereof. This
Agreement may be amended only in writing signed by all parties hereto.
16. Notwithstanding the terms of any other agreement, the parties hereto agree
that this Agreement shall be governed under and in accordance with the laws of
the State of California and, for purposes of this Agreement, such state shall be
deemed to be Securities Intermediary's jurisdiction.
17. This Agreement constitutes the entire agreement among Securities
Intermediary, Customer and Secured Party with respect to the subject matter
hereof, and all prior communications, whether verbal or written, between any of
the parties hereto with respect to the subject matter hereof shall be of no
further effect or evidentiary value.
18. Any notice or other communication provided for or allowed hereunder shall be
effective only when given by one of the following methods and addressed to the
respective party at its address provided below (or at such other address as the
party changing its address shall notify the others as provided herein) and shall
be considered to have been validly given (a) upon delivery, if delivered
personally, (b) upon receipt, if mailed, first class postage prepaid with the
United States Postal Service, (c) on the next business day, if sent by overnight
courier service of recognized standing, and (d) upon telephoned confirmation of
receipt, if telecopied:
If to Securities Intermediary:
Union Bank of California, N.A.
_______________________________
_______________________________
_______________________________
If to Secured Party:
_______________________________
_______________________________
_______________________________
If to Customer:
_______________________________
_______________________________
_______________________________
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19. To the extent that the terms or conditions of this Agreement are
inconsistent with the Account Agreement or any other document, instrument or
agreement between Securities Intermediary and Customer, the terms and conditions
of this Agreement shall prevail.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.
"Securities Intermediary" "Customer" "Secured Party"
{Signature blocks to be inserted}
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EXHIBIT A
TO
ACCOUNT CONTROL AGREEMENT
Form of Notice of Exclusive Control
____________, __
TO: [Name and address of Custodian]
___________________________________
___________________________________
___________________________________
Re: Notice of Exclusive Control--Account No. ___________ (the "Account")
Dear Sir/Madam:
Pursuant to the provisions of the Account Control Agreement dated as of
___________, among the undersigned as Secured Party, ZymoGenetics, Inc. as
Customer and you as Securities Intermediary (the "Agreement"), the undersigned
hereby gives notice of the exercise of exclusive control over the Account due to
the occurrence and continuance of an Event of Default under the security
agreement between Customer and the undersigned. Subject to the provisions of the
Agreement, you are hereby notified that from this date forward you are
instructed to comply only with entitlement orders for the Account issued by the
undersigned.
In accordance with the Agreement, you are hereby notified to cease
complying with entitlement orders or other directions concerning the Account or
the Financial Assets therein, or from making any withdrawals from the Account,
if such directions, orders or requests are originated by Customer or its
representatives.
The undersigned hereby affirms and certifies under penalty of perjury that
three (3) business days prior to the date hereof it has given notice to Customer
that it is in default under the security agreement, that Customer has not cured
such default, and such notice informed Customer that the undersigned intended to
exercise its remedies under the Agreement.
All capitalized terms used herein without definition have the same meanings
as are ascribed to such terms in the Agreement.
Very truly yours,
______________________________
By____________________________
Name:_______________________
Title:______________________
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STATE OF _____________ )
) ss.
COUNTY OF ___________ )
I certify that I know or have satisfactory evidence that ____________________ is
the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute the
instrument and acknowledged it as the __________________ of ___________________,
to be the free and voluntary act of such party for the uses and purposes
mentioned in this instrument.
DATED: ____________________.
______________________________________
(Signature of Notary Public)
______________________________________
(Printed Name of Notary Public)
My Appointment expires:_______________
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EXHIBIT G
FIXED EQUIPMENT
Equipment No. Description
------------- -----------
AC-002 AIR, CONDITIONER, WALL MOUNT
AC-1 BIG BOX, LAB AIR
AC-1N BIG BOX, NORTH
AC-1N-EF FAN, EXHAUST, BIG BOX, NORTH
AC-1N-SF FAN, SUPPLY, BIG BOX, NORTH
AC-1S BIG BOX, SOUTH
AC-1S-EF FAN, EXHAUST, BIG BOX, SOUTH
AC-1S-SF FAN, SUPPLY, BIG BOX, SOUTH
AC-2 OFFICE AIR HANDLER
BLDG-CONT-SYS BUILDING, CONTROL SYSTEM
BLDG-SEC-SYS BUILDING SECURITY SYSTEM AXXESS 200
BOIL-H20-L001 BOILER, HOTWATER, FORCED DRAFT
BOIL-H20-L002 BOILER, HOTWATER, FORCED DRAFT
BOIL-STM-L001 BOILER, STEAM, NATURAL DRAFT, 125 PSI
CC-003 COOLING COIL, IF-8, ROOF
COMPACTOR-001 TRASH COMPACTOR, AUGER
COMP-AIR-001 COMPRESSOR, AIR, LAB, 120 PSI
COMP-AIR-002 COMPRESSOR, AIR, DRY FIRE SPRINKLER SYS
COMP-REF-001 COMPRESSOR, REFRIG, AC-1S
COMP-REF-002 COMPRESSOR, REFRIG, AC-1S
COMP-REF-003 COMPRESSOR, REFRIG, AC-1S
COMP-REF-004 COMPRESSOR, REFRIG, AC-1N
COMP-REF-005 COMPRESSOR, REFRIG, AC-1N
COMP-REF-006 COMPRESSOR, REFRIG, AC-1N
COMP-REF-007 COMPRESSOR, REFRIG, AC-1N
CP-L001 PUMP, HW PRODUCTION
CP-L002 PUMP, HW PRODUCTION
CP-L003 PUMP, HW DISTRIBUTION
CP-L004 PUMP, HW DISTRIBUTION
CP-L006 PUMP, CONDENSOR WATER,
CP-L007 PUMP, CONDENSOR WATER,
CP-L008 PUMP, HW DISTRIBUTION, IF-8
CP-L009 PUMP, HEAT RECOVERY, BIGBOX
CT-1 COOLING TOWER W/4 MOTORS
CU-DP-L001 CONDENSING UNIT, DXFC-DP-1, FREEZERS
CU-L001 CONDENSING UNIT, DXFC-1, EXERCISE
CU-L002 CONDENSING UNIT, DXFC-2, CAFETERIA
CU-L004 CONDENSING UNIT, DXFC-4, COMPUTER RM
CU-L005 CONDENSING UNIT, IF-8, VIVARIUM
CU-L006 CONDENSING UNIT, DXFC-6, 1ST FL CMPTR RM
CU-L007 CONDENSING UNIT, DXFC-7, 3RD FL COMTR RM
CU-RU-L001 CONDENSING UNIT, COLD RM. 321
DH-1 DUCT HEATER
DH-2 DUCT HEATER
DOOR-FIRE-001 DOOR,FIRE,WON
DOOR-ROLL-001 DOOR, ROLLUP,GARAGE, ENTRANCE
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DOOR-ROLL-002 DOOR, ROLLUP,GARAGE, EXIT
DOOR-ROLL-003 DOOR, ROLLUP,GARAGE,ENTRANCE
DOOR-ROLL-004 DOOR, ROLLUP,GARAGE,EXIT
DOOR-ROLL-005 DOOR, ROLLUP, SHIPPING & RECEIVING
DXFC-1 DIRECT EXCHANGE FAN COIL, EXERCISE
DXFC-2 DIRECT EXCHANGE FAN COIL, CAFETERIA
DXFC-4 DIRECT EXCHANGE FAN COIL, COMPUTER RM
DXFC-6 DIRECT EXCHANGE FAN COIL, COMPUTER RM
DXFC-7 DIRECT EXCHANGE FAN COIL, COMPUTER RM
DXFC-DP-L001 DIRECT EXCHANGE FAN COIL, -80 FREEZERS
ELEVATOR-001 ELEVATOR, PASSENGER,LUSP
ELEVATOR-002 ELEVATOR, SERVICE, LUSP
EUH-L1 HEATER, ELECTRICAL, RO/DI ROOM
EUH-L2 HEATER, ELECTRICAL, ISOTOPE ROOM
EUH-L3 HEATER, ELECTRICAL, PUMP/SPRINKLER ROOM
EUH-L4 HEATER, ELECTRICAL, PUMP/SPRINKLER ROOM
EUH-L5 HEATER, ELECTRICAL, ELEVATOR SOUTH MECH.
EUH-L6 HEATER, ELECTRICAL, ELEVATOR NORTH MECH.
EUH-L7 HEATER, ELECTRICAL, MAIN WATER ROOM
FILTER-HEPA-001 FILTER, HEPA, IN-LINE, UEF-14
FILTER-HEPA-002 FILTER, HEPA, IN-LINE, UEF-15
FILTER-HEPA-003 FILTER, HEPA, IN-LINE, RAD-COMPACTOR
FIRE-SYS-001 FIRE ALARM SYSTEM AT LUSP [SITE #01]
GENERATOR-001 GENERATOR, 250 KW
HC-L003 HEATING COIL, IF-8, VIVARIUM
HOOD-BSC-016 BIO SAFETY CABINET, 6FT WIDE
HOOD-BSC-046 BIO SAFETY CABINET, 4 FT WIDE, CLASS II
HOOD-BSC-059 BIO SAFETY CABINET, CLASS II TYPE B2
HOOD-BSC-067 BIO SAFETY CABINET, CLASS II TYPE B2
HOOD-BSC-068 BIO SAFETY CABINET, CLASS II TYPE B2
HOOD-FUME-003 HOOD, FUME
HOOD-FUME-004 HOOD, FUME
HOOD-FUME-005 HOOD, FUME
HOOD-FUME-006 HOOD, FUME
HOOD-FUME-007 HOOD, FUME
HOOD-FUME-008 HOOD, FUME
HOOD-FUME-010 HOOD, FUME
HOOD-FUME-011 HOOD, FUME
HOOD-FUME-012 HOOD, FUME
HOOD-FUME-014 HOOD, FUME
HOOD-FUME-015 HOOD, FUME
HOOD-FUME-016 HOOD, FUME
HOOD-FUME-017 HOOD, FUME
HOOD-FUME-018 HOOD, FUME
HOOD-FUME-021 HOOD, FUME
HOOD-FUME-024 HOOD, FUME
HOOD-FUME-027 HOOD, FUME
HOOD-FUME-028 HOOD, FUME
HOOD-FUME-032 HOOD, FUME
HOOD-FUME-034 HOOD, FUME
G-2
HOOD-FUME-035 HOOD, FUME
HOOD-FUME-036 HOOD, FUME
HOOD-FUME-037 HOOD, FUME
HOOD-FUME-038 HOOD, FUME
HOOD-FUME-039 HOOD, FUME
HOOD-FUME-040 HOOD, FUME
HOOD-FUME-050 HOOD, FUME, 4 FT
HRC-L005 HEAT RECLAIM COIL, UEF-1
HRC-L006 HEAT RECLAIM COIL, UEF-2
HRC-L007 HEAT RECLAIM COIL, UEF-3
HRC-L008 HEAT RECLAIM COIL, UEF-4
HRC-L009 HEAT RECLAIM COIL, UEF-6
HRC-L011 HEAT RECLAIM COIL, UEF-8
HRC-L012 HEAT RECLAIM COIL, UEF-9
HRC-L013 HEAT RECLAIM COIL, UEF-10
HRC-L014 HEAT RECLAIM COIL, UEF-11
HRC-L015 HEAT RECLAIM COIL, UEF-12
HRC-L017 HEAT RECLAIM COIL, UEF-14
HRC-L019 HEAT RECLAIM COIL,UEF-20
HRC-L020 HEAT RECLAIM COIL,UEF-21
HRC-L021 HEAT RECLAIM COIL, UEF-22
HUMIDIFIER-001 HUMIDIFIER, IF-8, VIVARIUM
HWFC-1 FAN COIL, HOT WATER
IF-1 FAN, IN-LINE, 37 DEG. WARM RM
IF-2 FAN, IN-LINE, 30 DEG. WARM RM
IF-3 FAN, IN-LINE, H.H. SHOWERS AND DELI R.R.
IF-4 FAN, IN-LINE, FLAMMABLE STORAGE
IF-5 FAN, IN-LINE, RADIOACTIVE RECEIVE
IF-6 FAN, IN-LINE, GAS CYLINDER RM.
IF-7 FAN, IN-LINE, BIOHAZARD STORAGE
IF-8 FAN, IN-LINE, VIVARIUM SUPPLY AIR
IF-9 FAN, IN-LINE, RADIOACTIVE COMPACTOR
LOOP-DHW-001 DOMESTIC HOT WATER SYSTEM
LOOP-HHW-001 LOOP, HEATING HOT WATER
LOOP-HR-001 LOOP, HEAT RECOVERY
PUMP-HSVAC-001 PUMP,VACUUM, HOUSE, LUSP
REF-1 RESTROOM EXHAUST FAN
RO-DI-001 WATER SYSTEM, RO-DI
SPRINK-DRY-001 SPRINKLER, FIRE, DRY,LOWERPARKING
SPRINK-DRY-002 SPRINKLER, FIRE, DRY,UPPERPARKING
SPRINK-DRY-003 SPRINKLER, FIRE, DRY,FAN FARM
SPRINK-WET-001 SPRINKLER, FIRE, WET
TAF-1 FAN, EXHAUST, TUBE AXIAL, FREIGHT ELEV.
TAF-2 FAN, EXHAUST, TUBE AXIAL, PASSENGR ELEV.
UEF-001 FAN, EXHAUST, VIVARIUM
UEF-002 FAN, EXHAUST, HUMAN FLUIDS, BL-3
UEF-003 FAN, EXHAUST, FUME HOOD, SW 4TH FLR
UEF-004 FAN, EXHAUST, 5TH FLOOR FUME HOOD
UEF-005 FAN, EXHAUST, ETHERIZING HOOD, RM 466
UEF-006 FAN, EXHAUST, FUME HOOD, SW 2ND FLR
G-3
UEF-008 FAN, EXHAUST, FUME HOOD, NW 2ND FLR
UEF-009 FAN, EXHAUST, FUME HOOD, VIVARIUM
UEF-010 FAN, EXHAUST, FUME HOOD, SW 3RD FLR
UEF-011 FAN, EXHAUST, FUME HOOD, SE 3RD FLR
UEF-012 FAN, EXHAUST, FUME HOOD, NW 3RD FLR
UEF-014 FAN, EXHAUST, FUME HOOD, RI 3RD SOUTH
UEF-015 FAN, EXHAUST, FUME HOOD, RI 3RD NORTH
UEF-018 FAN, EXHAUST, GLASS WASH
UEF-019 FAN, EXHAUST, CAGE WASH
UEF-020 FAN, EXHAUST, FUME HOOD, FERMENTATION
UEF-021 FAN, EXHAUST, RESTROOM
UEF-022 FAN, EXHAUST, RESTROOM
UPS-001 UNINTERUPTABLE POWER SOURCE
UPS-003 UNINTERUPTABLE POWER SOURCE
UPS-004 UNINTERUPTABLE POWER SOURCE
VAV-FAN-Z101 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z102 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z103 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z104 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z105 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z106 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z107 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z108 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z109 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z110 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z111 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z112 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z113 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z114 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z115 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z116 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z117 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z118 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z119 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z121 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z122 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z123 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z124 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z125 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z126 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z127 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z128 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z129 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z130 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z131 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z132 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z260 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z261 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z262 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z263 VAV, WITH ELECTRIC HEAT, FAN POWERED
G-4
VAV-FAN-Z264 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z265 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z266 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z267 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z268 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z269 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z270 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z271 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z272 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z360 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z361 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z362 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z363 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z364 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z365 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z366 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z367 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z368 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z369 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z370 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z431 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z432 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z433 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z434 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z435 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z436 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z531 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z532 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z533 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z534 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z535 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-FAN-Z536 VAV, WITH ELECTRIC HEAT, FAN POWERED
VAV-Z140 VAV, WITH HOT WATER REHEAT
VAV-Z141 VAV, WITH HOT WATER REHEAT
VAV-Z201 VAV, WITH HOT WATER REHEAT
VAV-Z202 VAV, WITH HOT WATER REHEAT
VAV-Z203 VAV, WITH HOT WATER REHEAT
VAV-Z204 VAV, WITH HOT WATER REHEAT
VAV-Z205 VAV, WITH HOT WATER REHEAT
VAV-Z206 VAV, WITH HOT WATER REHEAT
VAV-Z207 VAV, WITH HOT WATER REHEAT
VAV-Z208 VAV, WITH HOT WATER REHEAT
VAV-Z209 VAV, WITH HOT WATER REHEAT
VAV-Z210 VAV, WITH HOT WATER REHEAT
VAV-Z211 VAV, WITH HOT WATER REHEAT
VAV-Z212 VAV, WITH HOT WATER REHEAT
VAV-Z213 VAV, WITH HOT WATER REHEAT
VAV-Z214 VAV, WITH HOT WATER REHEAT
VAV-Z215 VAV, WITH HOT WATER REHEAT
VAV-Z216 VAV, WITH HOT WATER REHEAT
G-5
VAV-Z217 VAV, WITH HOT WATER REHEAT
VAV-Z218 VAV, WITH HOT WATER REHEAT
VAV-Z219 VAV, WITH HOT WATER REHEAT
VAV-Z230 VAV, WITH HOT WATER REHEAT
VAV-Z231 VAV, WITH HOT WATER REHEAT
VAV-Z232 VAV, WITH HOT WATER REHEAT
VAV-Z233 VAV, WITH HOT WATER REHEAT
VAV-Z234 VAV, WITH HOT WATER REHEAT
VAV-Z235 VAV, WITH HOT WATER REHEAT
VAV-Z236 VAV, WITH HOT WATER REHEAT
VAV-Z237 VAV, WITH HOT WATER REHEAT
VAV-Z238 VAV, WITH HOT WATER REHEAT
VAV-Z239 VAV, WITH HOT WATER REHEAT
VAV-Z240 VAV, WITH HOT WATER REHEAT
VAV-Z241 VAV, WITH HOT WATER REHEAT
VAV-Z242 VAV, WITH HOT WATER REHEAT
VAV-Z243 VAV, WITH HOT WATER REHEAT
VAV-Z244 VAV, WITH HOT WATER REHEAT
VAV-Z245 VAV, WITH HOT WATER REHEAT
VAV-Z246 VAV, WITH HOT WATER REHEAT
VAV-Z247 VAV, WITH HOT WATER REHEAT
VAV-Z248 VAV, WITH HOT WATER REHEAT
VAV-Z301 VAV, WITH HOT WATER REHEAT
VAV-Z302 VAV, WITH HOT WATER REHEAT
VAV-Z303 VAV, WITH HOT WATER REHEAT
VAV-Z304 VAV, WITH HOT WATER REHEAT
VAV-Z305 VAV, WITH HOT WATER REHEAT
VAV-Z306 VAV, WITH HOT WATER REHEAT
VAV-Z307 VAV, WITH HOT WATER REHEAT
VAV-Z308 VAV, WITH HOT WATER REHEAT
VAV-Z309 VAV, WITH HOT WATER REHEAT
VAV-Z310 VAV, WITH HOT WATER REHEAT
VAV-Z312 VAV, WITH HOT WATER REHEAT
VAV-Z313 VAV, WITH HOT WATER REHEAT
VAV-Z314 VAV, WITH HOT WATER REHEAT
VAV-Z315 VAV, WITH HOT WATER REHEAT
VAV-Z330 VAV, WITH HOT WATER REHEAT
VAV-Z331 VAV, WITH HOT WATER REHEAT
VAV-Z332 VAV, WITH HOT WATER REHEAT
VAV-Z333 VAV, WITH HOT WATER REHEAT
VAV-Z334 VAV, WITH HOT WATER REHEAT
VAV-Z335 VAV, WITH HOT WATER REHEAT
VAV-Z336 VAV, WITH HOT WATER REHEAT
VAV-Z338 VAV, WITH HOT WATER REHEAT
VAV-Z339 VAV, WITH HOT WATER REHEAT
VAV-Z340 VAV, WITH HOT WATER REHEAT
VAV-Z341 VAV, WITH HOT WATER REHEAT
VAV-Z342 VAV, WITH HOT WATER REHEAT
VAV-Z343 VAV, WITH HOT WATER REHEAT
VAV-Z401 VAV, WITH HOT WATER REHEAT
G-6
VAV-Z402 VAV, WITH HOT WATER REHEAT
VAV-Z403 VAV, WITH HOT WATER REHEAT
VAV-Z404 VAV, WITH HOT WATER REHEAT
VAV-Z405 VAV, WITH HOT WATER REHEAT
VAV-Z406 VAV, WITH HOT WATER REHEAT
VAV-Z407 VAV, WITH HOT WATER REHEAT
VAV-Z408 VAV, WITH HOT WATER REHEAT
VAV-Z409 VAV, WITH HOT WATER REHEAT
VAV-Z410 VAV, WITH HOT WATER REHEAT
VAV-Z411 VAV, WITH HOT WATER REHEAT
VAV-Z412 VAV, WITH HOT WATER REHEAT
VAV-Z413 VAV, WITH HOT WATER REHEAT
VAV-Z414 VAV, WITH HOT WATER REHEAT
VAV-Z415 VAV, WITH HOT WATER REHEAT
VAV-Z416 VAV, WITH HOT WATER REHEAT
VAV-Z417 VAV, WITH HOT WATER REHEAT
VAV-Z418 VAV, WITH HOT WATER REHEAT
VAV-Z419 VAV, WITH HOT WATER REHEAT
VAV-Z420 VAV, WITH HOT WATER REHEAT
VAV-Z421 VAV, WITH HOT WATER REHEAT
VAV-Z422 VAV, WITH HOT WATER REHEAT
VAV-Z423 VAV, WITH HOT WATER REHEAT
VAV-Z538 VAV, WITH HOT WATER REHEAT
VAV-Z539 VAV, WITH HOT WATER REHEAT
VAV-Z540 VAV, WITH HOT WATER REHEAT
VAV-Z541 VAV, WITH HOT WATER REHEAT
VAV-Z542 VAV, WITH HOT WATER REHEAT
VAV-Z543 VAV, WITH HOT WATER REHEAT
VID-CON-002 VIDEO CONFRENCING SYSTEM
WARM-RM-001 WARM ROOM, WALK IN, 30 DEG
WARM-RM-002 WARM ROOM, WALK IN, 37 DEG
WATER-PUR-007 PURIFIER, WATER
WEF-001 FAN, EXHAUST, GARAGE
WEF-002 FAN, EXHAUST, GARAGE
WEF-003 FAN, EXHAUST, TRANSFORMER VAULT
WEF-004 FAN, EXHAUST, PASSENGER ELEVATOR
WEF-005 FAN, EXHAUST, FREIGHT ELEVATOR
G-7
EXHIBIT H - Floor Plans and Functions
H-1
EXHIBIT I - INTENTIONALLY DELETED
I-1
EXHIBIT J-1
Landlord Estoppel Certificate
THIS LANDLORD ESTOPPEL CERTIFICATE ("Certificate"), dated as of ________
__, 2001, is executed by ____________________, a _____________ ("Landlord") in
favor of_____________________________, ( "Subtenant"[or other appropriate
identifier, such as "Assignee"]).
RECITALS
A. Tenant and Landlord have entered into that certain Lease Agreement
dated as of ________ ___, 20___ (together with all amendments, modifications,
supplements, guarantees and restatements thereof, the "Lease"), for a portion of
the improved real property located in the City of Seattle, County of King, State
of Washington, more particularly described on Exhibit A attached hereto ( the
"Property").
B. Pursuant to the Lease, Landlord has agreed that upon the request of
Tenant, Landlord would execute and deliver an estoppel certificate certifying
the status of the Lease.
C. Tenant has requested that Landlord execute this Certificate with an
understanding that Subtenant will rely on the representations and agreements
below in [subleasing space in the Premises from Tenantinsert appropriate
description of transaction] (the "Transaction").
NOW, THEREFORE, Landlord certifies and represents to Subtenant as follows:
1. Lease. Attached hereto as Exhibit B is a true, correct and complete
copy of the Lease, including the following amendments, modifications,
supplements, guarantees and restatements thereof, which together represent all
of the amendments, modifications, supplements, guarantees and restatements
thereof: __
________________________________________________________________________________
(If none, please state "None.")
2. Premises. Pursuant to the Lease, Tenant leases those certain premises
(the "Premises") consisting of approximately ___________ rentable square feet
within the Property, as more particularly described in the Lease. In addition,
pursuant to the terms of the Lease, Tenant has the right to use [_______ parking
spaces/the parking area] located on the Property during the term of the Lease.
3. Full Force of Lease. The Lease has been duly authorized, executed and
delivered by Landlord, is in full force and effect has not been terminated and
constitutes a legally valid instrument, binding and enforceable against Landlord
in accordance with its terms, subject only to applicable limitations imposed by
laws relating to bankruptcy and creditor's rights.
4. Complete Agreement. The Lease constitutes the complete agreement
between Landlord and Tenant for the Premises and the Property, except as
modified by the Lease amendments noted above (if any), has not been modified,
altered or amended.
5. Lease Term. The term of the Lease commenced on ________ ___, 20___ and
ends on ________ ___, 20___, subject to the following options to extend:
_______________________________________________________________________________.
(If none, please state "None.")
6. Purchase Rights. Tenant has no option, right of first refusal, right
of first offer, or other right to acquire or purchase all or any portion of the
Premises or all or any portion of, or interest in, the
J-1-1
Property, except as follows: ___________________________________________________
_______________________________________________________________________________.
(If none, please state "None.")
7. Rights of Tenant. Except as expressly stated in this Certificate,
Tenant:
(a) has no right to renew or extend the term of the Lease, except as
follows: _____________________________________________________;
(b) has no right, title, or interest in the Premises, other than as Tenant
under the Lease or as the owner of all Removable Equipment and personal property
not identified as Fixed Equipment under the Lease.
8. Rent.
(a) The obligation to pay Rent under the Lease commenced on ________ ___,
20___. The Rent under the Lease is curRent, and to the best of Landlord's actual
knowledge, Tenant is not in default in the performance of any of its obligations
under the Lease.
(b) Tenant is currently paying Base Rent under the Lease in the amount of
$________ per month. Tenant has not received and is not, presently, entitled to
any abatement, refunds, rebates, concessions or forgiveness of Rent or other
charges, free Rent, partial Rent, or credits, offsets or reductions in Rent,
except as follows: ____________________________________________________________
_______________________________________________________________________________.
(If none, please state "None.")
(c) There are no existing defenses or offsets against Rent due or to
become due under the terms of the Lease, and there presently is no default or
other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Premises, nor to the best of
Landlord's actual knowledge is there a state of facts which with the passage of
time or the giving of notice or both could ripen into a default on the part of
Tenant, , except as follows: _______________________
_______________________________________________________________________________.
(If none, please state "None.")
9. Security Deposit. Tenant's compliance with the Security Deposit
provision of the Lease (Section 7) is through a Letter of Credit in the amount
of $______ and pledged marketable securities of $________.
10. Prepaid Rent. The amount of prepaid Rent, separate from the security
deposit, is $___________, covering the period from ________ ___, 20___ to
________ ___, 20___.
11. Insurance. To the best of Landlord's actual knowledge, all insurance,
if any, required to be maintained by Tenant under the Lease is presently in
effect.
12. Pending Actions. There is not pending or, to the best of Landlord's
actual knowledge, threatened against or contemplated by the Landlord, any
petition in bankruptcy, whether voluntary or otherwise, any assignment for the
benefit of creditors, or any petition seeking reorganization or arrangement
under the federal bankruptcy laws or those of any state.
13. Tenant Improvements. As of the date of this Certificate, to the best
of Landlord's actual knowledge: Tenant has performed all obligations required of
Tenant pursuant to the Lease; no offsets, counterclaims, or defenses of Landlord
under the Lease exist against Tenant; and no events have occurred that, with the
passage of time or the giving of notice, would constitute a basis for offsets,
counterclaims, or defenses against Tenant, except as follows: __________________
_________________. (If none, please state "None.")
J-1-2
14. Assignments by Tenant. To the best of Landlord's actual knowledge,
Tenant has not sublet or assigned the Premises or the Lease or any portion
thereof to any sublessee or assignee. No one except Tenant and its employees
will occupy the Premises. The address for notices to be sent to Tenant is as set
forth in the Lease or is:
15. Reliance. Landlord makes this Certificate with the knowledge that it
will only be relied upon by Subtenant in agreeing to complete the Transaction.
Landlord has executed this Certificate as of the date first written above
by the person named below, who is duly authorized to do so.
LANDLORD: ______________________________________________
a ____________________________________________
By:___________________________________________
Name: _______________________________
Its:_________________________________
J-1-3
Exhibit J-2
Tenant Estoppel Certificate
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of ________ __,
2001, is executed by ____________________, a _____________ ("Tenant") in favor
of_____________________________, ( "Buyer"[or other appropriate identifier, such
as "Lender"]).
RECITALS
A. Tenant and Landlord have entered into that certain Lease Agreement
dated as of ________ ___, 20___ (together with all amendments, modifications,
supplements, guarantees and restatements thereof, the "Lease"), for a portion of
the improved real property located in the City of Seattle, County of King, State
of Washington, more particularly described on Exhibit A attached hereto ( the
"Property").
B. Pursuant to the Lease, Tenant has agreed that upon the request of
Landlord, Tenant would execute and deliver an estoppel certificate certifying
the status of the Lease.
C. Landlord has requested that Tenant execute this Certificate with an
understanding that Buyer [Lender} will rely on the representations and
agreements below in [acquiring the Property and Landlord's interest under the
Lease] [connection with a loaninsert appropriate description of transaction]
(the "Transaction").
NOW, THEREFORE, Tenant certifies and represents to Buyer as follows:
16. Lease. Attached hereto as Exhibit B is a true, correct and complete
copy of the Lease, including the following amendments, modifications,
supplements, guarantees and restatements thereof, which together represent all
of the amendments, modifications, supplements, guarantees and restatements
thereof:___
_______________________________________________________________________________.
(If none, please state "None.")
17. Leased Premises. Pursuant to the Lease, Tenant leases those certain
premises (the "Premises") consisting of approximately ___________ rentable
square feet within the Property, as more particularly described in the Lease. In
addition, pursuant to the terms of the Lease, Tenant has the right to use
[_______ parking spaces/the parking area] located on the Property during the
term of the Lease.
18. Full Force of Lease. The Lease has been duly authorized, executed and
delivered by Tenant, is in full force and effect has not been terminated and
constitutes a legally valid instrument, binding and enforceable against Tenant
in accordance with its terms, subject only to applicable limitations imposed by
laws relating to bankruptcy and creditor's rights.
19. Complete Agreement. The Lease constitutes the complete agreement
between Landlord and Tenant for the Premises and the Property, except as
modified by the Lease amendments noted above (if any), has not been modified,
altered or amended.
20. Acceptance of Premises. Tenant has accepted possession and is
currently occupying the Premises.
21. Lease Term. The term of the Lease commenced on ________ ___, 20___ and
ends on ________ ___, 20___, subject to the following options to extend:________
(If none, please state "None.")
J-2-1
22. Purchase Rights. Tenant has no option, right of first refusal, right
of first offer, or other right to acquire or purchase all or any portion of the
Premises or all or any portion of, or interest in, the Property, except as
follows: _______________________________________________________________________
_______________________________________________________________________________.
(If none, please state "None.")
23. Rights of Tenant. Except as expressly stated in this Certificate,
Tenant:
(a) has no right to renew or extend the term of the Lease except as
follows: ___________________________________________________________;
(b) has no right, title, or interest in the Premises, other than as Tenant
under the Lease or as the owner of all Removable Equipment and personal property
not identified as Fixed Equipment under the Lease.
24. Rent.
(a) The obligation to pay rent under the Lease commenced on ________ ___,
20___. The Rent under the Lease is current, and Tenant is not in default in the
performance of any of its obligations under the Lease.
(b) Tenant is currently paying Base Rent under the Lease in the amount of
$________ per month. Tenant has not received and is not, presently, entitled to
any abatement, refunds, rebates, concessions or forgiveness of Rent or other
charges, free rent, partial Rent, or credits, offsets or reductions in rent,
except as follows: _____________________________________________________________
_______________________________________________________________________________.
(If none, please state "None.")
(c) There are no existing defenses or offsets against Rent due or to
become due under the terms of the Lease, and there presently is no default or
other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Premises, nor is there a state of
facts which with the passage of time or the giving of notice or both could ripen
into a default on the part of Tenant, or to the best of Tenant's actual
knowledge, or could ripen into a default on the part of Landlord under the
Lease, except as follows: ______________________________________________________
_______________________________________________________________________________.
(If none, please state "None.")
25. Security Deposit. Tenant's compliance with the Security Deposit
provision of the Lease (Section 7) is through a Letter of Credit in the amount
of $______ and pledged marketable securities of $________.
26. Prepaid Rent. The amount of prepaid Rent, separate from the Security
Deposit, is $___________, covering the period from ________ ___, 20___ to
________ ___, 20___.
27. Insurance. All insurance, required to be maintained by Tenant under
the Lease is presently in effect.
28. Pending Actions. There is not pending or, to the best of Tenant's
actual knowledge, threatened against or contemplated by the Tenant, any petition
in bankruptcy, whether voluntary or otherwise, any assignment for the benefit of
creditors, or any petition seeking reorganization or arrangement under the
federal bankruptcy laws or those of any state.
29. Tenant Improvements. As of the date of this Certificate, to the best
of Tenant's actual knowledge: Landlord has performed all obligations required of
Landlord pursuant to the Lease; no offsets, counterclaims, or defenses of Tenant
under the Lease exist against Landlord; and no events have
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occurred that, with the passage of time or the giving of notice, would
constitute a basis for offsets, counterclaims, or defenses against Landlord,
except as follows: _____________________________________________________________
_______________________________________________________________________________.
(If none, please state "None.")
30. Assignments by Landlord. Tenant has received no notice of any
assignment, hypothecation or pledge of the Lease or rentals under the Lease by
Landlord. Tenant hereby consents to an assignment of leases and rents to be
executed by Landlord to Buyer in connection with the Transaction and
acknowledges that said assignment does not violate the provisions of the Lease.
The address for notices to be sent to Landlord is as set forth in the Lease or
is: _________________________________________________.
31. Assignments by Tenant. Tenant has not sublet or assigned the Premises
or the Lease or any portion thereof to any sublessee or assignee. No one except
Tenant and its employees will occupy the Premises. The address for notices to be
sent to Tenant is as set forth in the Lease or is: ____________________________.
32. Environmental Matters. Tenant is in compliance with the Lease and
Environmental Requirements in connection with its generation, treatment,
storage, disposal or release into the environment of any Hazardous Materials at
the Premises. Environmental Requirements and Hazardous Materials are defined by
reference to Lease Section 19.8. Concerning Lease Section 19 specifically, there
presently is no default or other wrongful act or omission by Tenant under the
Lease or otherwise in connection with Tenant's occupancy of the Premises, nor is
there a state of facts which with the passage of time or the giving of notice or
both could ripen into a default under Lease Section 19 on the part of Tenant;
except as follows: _____________________________ (If none, please state "None.")
33. Succession of Interest. Tenant agrees that, in the event Buyer
succeeds to interest of Landlord under the Lease:
(a) Buyer shall not be bound by any amendments or modifications of the
Lease, subsequent to the date of this Certificate, made without prior consent of
Buyer which will not be unreasonably withheld, delayed or conditioned; with the
understanding that this Section 17(a) shall not longer apply if the Transaction
terminates;
34. Reliance. Tenant makes this Certificate with the knowledge that it
will only be relied upon by Buyer in agreeing to complete the Transaction.
Tenant has executed this Certificate as of the date first written above by
the person named below, who is duly authorized to do so.
TENANT: _________________________________________
a________________________________________
By:______________________________________
Name:____________________________
Its:_____________________________
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EXHIBIT K
INTENTIONALLY DELETED
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EXHIBIT L
Fair Market Value Determination For Premises (Lease Sections 10 and 12)
Determination of "Fair Market Value" of the Premises under paragraphs 10 and 12
of this Lease shall be made in accordance with the following procedures, which
shall be valued assuming the Premises are encumbered by the Lease and Renewal
Options, with the sum of such determinations being the Fair Market Value of the
Premises as a whole:
(a) Fair Market Value of the Premises shall be determined by the agreement of
two (2) appraisers (each, an "Initial Appraiser"), one of which shall be
selected by Landlord and the other of which shall be selected by Tenant as
set forth in this Exhibit L. Each of the parties shall concurrently
identify in writing, an Initial Appraiser selected and retained by such
party and specifically identify such Initial Appraiser's name, address,
phone number and qualifications as an appraiser. Within five (5) days after
the parties have designated their Initial Appraisers, each of Landlord and
Tenant shall direct, in writing with a copy to the other party, its Initial
Appraiser to work with the other party's Initial Appraiser to endeavor to
determine and reach agreement upon the Fair Market Value of the Premises
(including the land and the improvements), considered as encumbered by this
Lease and its extensions, and considered as not having been the subject of
a casualty or condemnation, as applicable, and thereafter to deliver in
writing to Landlord and Tenant within thirty (30) days (such 30-day period,
the "Valuation Period") the agreed-upon Fair Market Value (the "Valuation
Notice"). The costs and expenses of each Initial Appraiser shall be paid by
the party selecting such Initial Appraiser. If Tenant fails to identify in
writing an Initial Appraiser as required by this Exhibit, Landlord shall
identify an Initial Appraiser on behalf of Tenant; provided, however,
Tenant shall be liable for the costs and expenses of such Initial Appraiser
identified on Tenant's behalf by Landlord as if Tenant had selected such
Initial Appraiser.
(b) If the Initial Appraisers are not able to reach agreement upon the Fair
Market Value within the Valuation Period, within ten (10) days after the
end of the Valuation Period each Initial Appraiser shall deliver a written
notice to Landlord, Tenant, and the other Initial Appraiser setting forth
(i) such Initial Appraiser's valuation of the Fair Market Value (each, an
"Initial Valuation") and (ii) the name, address and qualifications of a
third appraiser selected jointly by the Initial Appraisers (the "Third
Appraiser"). The Initial Appraisers shall, in writing with a copy to
Landlord and Tenant, direct the Third Appraiser (or substitute Third
Appraiser) to determine a valuation of the Fair Market Value of the
Premises (including the land and the improvements), considered as
encumbered by this Lease and its extensions, and considered as not having
been the subject of a casualty or condemnation, as applicable, and to
deliver in writing to Landlord, Tenant and the Initial Appraisers such
valuation (the "Third Valuation") within twenty (20) days of the date of
the written direction retaining such Third Appraiser. The Fair Market Value
shall be the arithmetic mean of (A) the Third Valuation and (B) the Initial
Valuation closer to the Third Valuation. If the Third Valuation is exactly
between the two Initial Valuations, then the Fair Market Value shall be the
Third Valuation. If the Initial Appraisers are unable to agree upon the
designation of a Third Appraiser within the requisite time period or if the
Third Appraiser selected does not make a valuation of the Fair Market Value
within twenty (20) days after being directed by the Initial Appraisers,
then such Third Appraiser or a substitute Third Appraiser, as applicable,
shall, at the request of Landlord or Tenant, be appointed by the President
or Chairman of the American Arbitration Association in the area in which
the Premises exist which is the subject of the fair market valuation
determination determined hereunder. The costs and expenses of the Third
Appraiser (and substitute Third Appraiser and the American Arbitration
Association, if applicable) shall be divided evenly between, and paid for
by, Landlord and Tenant.
(c) All appraisers selected or appointed pursuant to this Exhibit shall be
independent qualified appraisers and shall be, at a minimum, MAI real
estate appraisers with at least 7 years experience in appraising real
property used for comparable "wet science" biological laboratory
L-1
and research and development facilities or such similar uses to which the
parties agree. Such appraisers shall have no right, power or authority to
alter or modify the provisions of this Lease, and such appraisers shall
determine the Fair Market Value of the Premises, as applicable, considered
as encumbered by this Lease including assuming all Extension Terms have
been exercised by Tenant and considered as not having been the subject of a
casualty or condemnation, as applicable.
(d) Notwithstanding the foregoing, if Landlord and Tenant are able to agree
upon a Fair Market Value of the Premises, Landlord and Tenant shall execute
an agreement setting forth such agreed-upon Fair Market Value of the
Premises, as applicable, and waiving each party's right to have the Fair
Market Value of the Premises, as applicable, determined in accordance with
the procedures set forth in paragraphs (a) and (b) of this Exhibit.
(e) If Tenant elects not to make an offer to purchase the Premises under
Sections 10 or 12 after this valuation process has been conducted, Tenant
shall reimburse Landlord its out of pocket third party costs (including
attorney's fees and the costs of Landlord's Initial Appraiser). and pay all
charges assessed by the Third Appraiser.
L-2
EXHIBIT M
Lease Amendment Form
AMENDMENT NO. __ TO LEASE
This AMENDMENT NO. ____ TO LEASE (this "Amendment") is entered into as of
the below date between ARE-1201/1208 EASTLAKE AVENUE, LLC, a Delaware limited
liability company("Landlord") and ZYMOGENETICS, INC., a Washington corporation
("Tenant").
Landlord and Tenant are parties to that certain Lease dated October ___,
2002 {, as amended by Amendment No. to Lease ___ dated ____________ - to be
included if there are any prior amendments at that time} (as amended, the
"Lease"). Capitalized terms not defined herein shall have the meanings set forth
in the Lease. Pursuant to Section 2.1 of the Lease, the initial term has been
extended and the purpose of this Amendment is to reflect the extension.
Now, therefore, Landlord and Tenant agree as follows:
1. EXTENSION OF INITIAL TERM. Effective on _________________, expiration
date of the Initial Term of the Lease is extended to ____________________.
2. NO OTHER AMENDMENTS. Except as modified by this Amendment {and by
Amendment No. ____ dated ______________}, the Lease remains in full force and
effect and has not been modified or amended.
DATED: _______________________.
LANDLORD:
ARE-1201/1208 Eastlake Avenue, LLC,
a Delaware limited liability company
By: ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
a Delaware limited partnership,
managing member
By: ARE-QRS CORP.,
a Maryland corporation,
general partner
By: ___________________________
Peter J. Nelson, CFO
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TENANT:
ZYMOGENETICS, INC.,
a Washington corporation
By _______________________________________
Name:__________________________________________________
Title:_________________________________________________
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that ______________________
signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it as the _____________________________ of
ZymoGenetics, Inc. to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
Dated: ______________.
____________________________________
(Signature)
____________________________________
Title
My appointment expires _____________
STATE OF __________ )
) ss.
COUNTY OF _________ )
I certify that I know or have satisfactory evidence that Peter J. Nelson is
the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute the
instrument and acknowledged it as the Chief Financial Officer of ARE-QRS Corp.,
general partner of Alexandria Real Estate Equities, L.P., the Managing Member of
ARE-1201/1208 Eastlake Avenue, LLC, to be the free and voluntary act of such
party for the uses and purposes mentioned in this instrument.
DATED:________________.
______________________________
(Signature of Notary Public)
______________________________
(Printed Name of Notary Public)
My Appointment expires:_______
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