Exhibit 10.7
HIDDEN VALLEY OFFICE PARK
LEASE AGREEMENT
Landlord: ASA PROPERTIES, INC. a Washington corporation
Tenant: GraphOn Corporation a California corporation
OFFICE-LEASE
BASIC-LEASE-INFORMATION
Date of Lease:
Landlord: ASA Properties, Inc., a Washington
corporation
Tenant: GraphOn Corporation, a California corporation
Name and Location of Building: Hidden Valley Office Park
[Paragraph 1(a)] 1750 112th Ave. NE, Bellevue, WA 98004
Net Rentable Area of Premises: 2,277 rsf (Suite C-242)
[Paragraph l(b))
Base Year: 1998
[Paragraph l(c))
Tenant's Percentage Share: 1.91% (.0191)
[Paragraph 1(k)]
Net Rentable Area of Building: 119,710 sf
[Paragraph 1 (k)
Term Commencement: June 8, 1998
[Paragraph 3]
Term Expiration: May 3l, 2001
[Paragraph 3]
Minimum Rent: $3,890.00/mo. Months 1-12
[Paragraph 4(a)] $4,006.70/mo. Months 13-24
$4,126.90/mo. Months 25-36
(The first month's rental is prorated if less
than a full month)
Security Deposit: $4,126.90
[Paragraph 32]
Tenant's Address for Notices: 1750 - 112th Avenue N.E., Bellevue, WA 98004
[Paragraph 37] Suite C-242
Landford's Address for Notices: 8805 148th Ave. NE
[Paragraph 37] Redmond, WA 98052
Exhibits: A, B, C, D & E
[Paragraph 44])
Additional Provisions: Tenant to pay the first month's basic rent
[Paragraph 45] and security deposit in advance at the
execution of this Lease by Tenant.
The provisions of the Lease identified above in brackets are those provisions
where reference to particular Basic Lease Information appear. Each reference to
an item of basic Lease Information set forth above. In the event of any conflict
between any Basic Lease Information and the Lease, the latter shall control.
TENANT LANDLORD
GraphOn Corporation, ASA Properties, Inc.,
a California corporation a Washington Corporation
Please Initial: Please Initial:
--------- ---------
TABLE OF CONTENTS
1. Definitions 4
2. Premises 5
3. Term 5
4. Rent 5
5. Taxes and Assessments 6
6. Operating Expenses 6
7. Estimated Payments 6
8. Common Areas 7
9. Use 7
10. Services 8
11. Alterations, Fixtures and Improvements 8
12. Liens 8
13. Repair and Maintenance of Premises 9
14. Damage and Destruction 9
15. Indemnification 10
16. Insurance 10
17. Condemnation 11
18. Compliance with Legal Requirements 11
19. Assignment and Subletting 12
20. Rules and Regulations 13
21. Landlord's Access 13
22. Default 14
23. Landlord's Right to Cure Default 15
24. Attorneys' Fees 15
25. Subordination 15
26. No Merger 16
27. Sale by Landlord 16
28. Estoppel Certificate 16
29. Holdover Tenancy 16
30. Building Security 16
31. Parking 17
32. Security Deposit 17
33. No Partnership 17
34. Recording 17
35. Modification and Financing Conditions 17
36. Waiver 18
37. Notices and Consents 18
38. Complete Agreement 18
39. Corporate Authority 18
40. Limits to Tenant's Remedy 18
41. Brokers 19
42. No Light and Air Easement 18
43. Miscellaneous 18
44. Basic Lease Information and Exhibits 19
45. Additional Provisions
EXHIBITS C - Rules and Regulations 20
Parking Rules and Regulations 24
OFFICE LEASE
THIS LEASE, DATED June 5, 1998, for purposes of reference only, is made and
entered into by and between ASA-Properties,-Inc., a Washington corporation
("Landlord") and GraphOn-Corporation a Califomia corporation ("Tenant")
WITNESSETH:
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord
the premises described in paragraph I (b) below for the term and subject to the
terms, covenants, agreements and conditions hereinafter set forth, to each and
all of which Landlord and Tenant hereby mutually agree.
1. Definitions. Unless the context otherwise specifies or requires, the
following terms shall have the meanings herein specified:
(a) The term "Building" shall mean the parcel of real property described on
Exhibit A attached hereto, situated in the location and commonly know by the
name specified in the Basic Lease Information, which name Landlord may change at
any time, and all other improvements on or appurtenances to such parcel.
(b) The term "Premises" or "premises" shall mean that portion of a floor of
the Building outlined in red on the diagrams attached hereto as Exhibit B. The
premises contain the net rentable area specified in the Basic Lease Information.
(c) The term "Base Year" shall mean the calendar year specified in the
Basic Lease Information as the Base Year.
(d) The term "Operating Expenses" shall mean (1) all costs of management,
operation and maintenance of the Building including, without limitation, wages,
salaries and payroll burden of employees, janitorial, maintenance, guard and
other services, fees to any property manager (including Landlord if Landlord
performs property management services) license, permit and inspection fees,
charges and fees for transit development, housing or any other purpose, Building
office rent or rental value, power, water, waste disposal and other utilities,
materials and supplies, maintenance and repairs, Property Taxes (as defined in
subparagraph 16) below), depreciation on personal prop" and insurance, including
without limitation, casualty (including, without limitation, extended and broad
form coverage risks, mudslide, land subsidence, volcanic eruption, flood, and
earthquake), public liability, workmen's compensation, and rental loss
insurance, (2) the cost of compliance with all state, federal or local
governmental regulations affecting the Building, including, without limitation,
any cleanup, removal, remedial or restoration work required by any federal,
state or local governmental agency or political subdivision because of Hazardous
Material (defined in paragraph 9 below) present in or about any part of the
Building, including, without limitation, the soil or ground water under the
Building; all costs of legal proceedings contesting any matter concerning
operating and
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managing the Building or the amount or the validity of any taxes, assessments,
fees, or other impositions levied, assessed or imposed against the Building or
use, occupancy or operation thereof, (3) the cost of any capital improvements
made to the Building by Landlord after the Base Year that reduce other Operating
Expenses or made to the Building by Landlord after the date of this Lease that
are required under any governmental law or regulation that was not applicable to
the Building at the time it was constructed, such cost or allocable portion
thereof to be amortized over such reasonable period as Landlord shall determine
together with interest on the unamortized balance at the rate of 10% per annum
or such higher rate as may have been paid by Landlord on funds borrowed for the
purpose of constructing such capital improvements and (4) a fee to Landlord (in
addition to any property management fee) to supervise and administer property
management in an amount not in excess of 10% of Operating Expenses; provided,
however, that Operating Expenses shall not include depreciation on the Building
other than depreciation on exterior window draperies provided by Landlord and
carpeting in public corridors and common areas, costs of tenants' improvements,
real estate brokers' commissions, interest and capital items other than those
refined to in clause (3) above. There shall be deducted from Operating Expenses
all amounts that have been included in Operating Expenses which have in fact
been paid by any tenant, including Tenant, on account o the cost or repairs or
services for which such tenant is directly and solely responsible. Actual
Operating Expenses for both the Base Year and each subsequent calendar year
shalI be adjusted to equal Landlord's reasonable estimate of Operating Expenses
had the total rentable area of the Building been occupied.
(e) The term "Base Operating Expenses" shall mean the Operating Expenses
paid or incurred by Landlord in the Base Year.
(f) The term "net rentable area" shall mean:
(1) as to a floor leased entirely by Tenant, all areas within exterior
permanent Building walls, measured to the inside surface of exterior Building
walls, including rest rooms, janitor, telephone and electrical closets,
mechanical areas, and columns and projections necessary to the Building, but
excluding public stairs, elevator shafts and pipe shafts, together with the
enclosing walls thereof,
(2) as to a floor only a portion of which is leased by Tenant, the
aggregate of the net usable area of the portion of the floor occupied by Tenant,
plus the result obtained by multiplying the area of the common area on such
floor times a fraction, whose numerator is the net usable area of Tenant's
portion of the floor and whose denominator is the net usable area of all tenant
space on such floor.
(g) The term "net usable area" shall mean all floor area in a tenant space,
measured to the inside surface of exterior Building walls, to the office side of
corridors and i*her permanent partitions, and to the center of partitions that
separate the tenant space
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from adjoining tenant spaces, without deduction for columns and projections
necessary to the Building.
(h) The term "common area" shall mean the total area on the floor dedicated
to rest rooms, janitor, telephone and electrical closets, mechanical area, and
public corridors providing access to tenant space an such floor, but excluding
public stairs elevator shafts and pipe shags, together with the enclosing walls
thereof.
(i) The term "Lease Year" shall mean each twelve month period during the
term hereof ending on December 3 1, provided that the First Lease Year shall
commence upon the commencement of the term hereof and shall end on the next
succeeding December 3 1, and the last Lease Year shall end upon the expiration
of the term hereof.
(j) The term "Property Taxes" shall mean any form of real or personal
property taxes, assessments, special assessments, fees, charges, levies,
penalties, service payments in lieu of taxes, excises, assessments and charges
for transit, housing or any other purpose, impositions or taxes of every kind
and nature whatsoever, assessed or levied or imposed by any authority having the
direct or indirect power to tax, including, without limitation, any city,
county, state or federal government, or any improvement or assessment district
of any kind or nature whatsoever, whether or not consented to or joined in by
Landlord, against the Building or any legal or equitable interest of Landlord
therein or any personal property of Landlord used in the operation thereof,
whether now or hereafter imposed, whether or not now customary or in the
contemplation of the parties on the date of this Lease, excepting only taxes
measured by the net income of Landlord from all sources, any state, local,
federal, personal, franchise, capital stock, inheritance, estate, gift or
corporate income tax, or any other tax measured by the income of landlord;
provided that Property taxes shall not include any taxes, assessments or other
charges payable by Tenant pursuant to paragraph 5 below.
(k) The term "Tenant's percentage share" shall mean the percentage figure
specified in the Basic Lease information. Landlord and Tenant acknowledge that
Tenant's percentage share has been obtained by dividing the net rentable area of
the Premises specified in the Basic Lease information by the total net rentable
area of the existing rental space in the Building specified in the Basic Lease
information and multiplying such quotient by100, In the event either the net
rentable area of the premises or the total net rentable area of the buiIding is
changed, Tenant's percentage share shall be appropriately adjusted, and as to
the calendar year in which such change occurs, Tenant's percentage share shall
be determined on the basis of the number of days during such calendar year at
each such percentage share.
2. Premises.
(a) Tenant hereby acknowledges that the premises shall be delivered in an
"as
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is" condition and that Landlord, except as may be expressly agreed by Landlord
in writing, has no obligation to alter, repair, renovate, or render fit for
tenant's occupancy, any part of the premises. Landlord reserves to itself the
use of the roof, exterior walls and the area beneath the premises, together with
the right to install, maintain, use, repair and replace plumbing, telephone
facilities, equipment, machinery, connections, pipes, ducts, conduits, and wires
leading through the premises and serving other parts of the Building in a manner
and in locations which will not unreasonably interfere with Tenant's use.
(b) In the event Landlord determines to permit early occupancy of the
premises and, therefore, informs Tenant in writing that the premises are ready
for occupancy prior to the date set forth in the Basic Lease Information for the
commencement of the term of the Lease, Tenant shall have the right to take early
occupancy of the premises on such date as Landlord and Tenant shall agree, and
notwithstanding the provisions of paragraph 3 below, the term of the Lease shall
commence upon such occupancy.
(c) The occupancy by Tenant of the premises shall constitute an
acknowledgment by Tenant that the premises are then in good, sanitary and
tenantable condition and repair. Notwithstanding the foregoing, Iandlord
represents and warrants, to (he best of its knowledge without inquiry, to Tenant
that, as of the Commencement Date, tile Premises, including any improvements
made by Landlord, shall be in compliance with all laws and regulations, and
built in a good and workmanlike manner with good materials and the equipment and
Building services serving the Premises shall be in good working order.
3. Term. The term of this Lease shall commence and, unless sooner terminated,
shall end on the date respectively specified in the Basic Lease Information. If
Landlord for any reason cannot deliver possession of the premises to Tenant by
the date specified for term commencement, this Lease shall not be void or
voidable nor shall Landlord be liable to Tenant for any damage resulting
therefrom, but in that event, provided that the delay is not occasioned by the
act or omission of tenant, rental shall be waived for the period between the
commencement of such term and the date when possession is delivered. Provided,
however, if Landlord has not delivered the premises to Tenant within sixty (60)
days of the Term Commencement, this Lease shall be deemed null and void without
liability to either party, so long as such failure is not due to a delay caused
by the act of omission of Tenant.
4. Rent. Tenant shall pay to Landlord as rental for the use and occupancy of
the premises, at the times and in the manner hereinafter provided, the following
sums of money:
(a) Tenant shall pay to Landlord minimum rent in the amount specified in
the Basic Lease Information per year, payable in equal monthly installments in
advance on the commencement of the term hereof and on or before the first day of
each and every successive calendar month during the term hereof. If the term
commences on other than
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the first day of a calendar month, the first payment of rent shall be
appropriately prorated on the basis of a 30-day month.
(b) Tenant shall pay, as additional rent, all sums of money required to be
paid to Landlord pursuant to paragraphs 5, 6, 7, 10, 13 and 16 below, and all
other sums of money or charges required to be paid by Tenant hereunder in
addition to minimum rental, whether or not the some are designated "additional
rent". If such amounts or charges are not paid at the time provided in this
Lease, they shall nevertheless be collectible as additional rent with the next
installment of minimum rental thereafter falling due, but nothing herein
contained shall be deemed to suspend or delay the payment of any amount of money
or charge at the time the same becomes due and payable hereunder, or limit any
other remedy of Landlord. All amounts of money payable by Tenant to Landlord
under this Lease, if not paid when due, shall bear interest from the due date
until paid at the rate of the greater of 15% per annum or the prime rate
publicly announced by the Seafirst Bank at its main office in Seattle Washington
or its successor or its equivalent size competitor in the Seattle market place
should Seafirst Bank cease to exist, but not to exceed the maximum rate of
interest permitted by law ("Default Interest"). All payments due from Tenant to
Landlord hereunder shall be made to Landlord without deduction or offset in
lawful money of the United States of America at Landlord's address for notices
hereunder, or to such other person at such other place as Landlord may from time
to time designate in writing to Tenant.
(c)Tenant hereby acknowledges that late payment by Tenant to Landlord of
rent and other sums due hereunder after the expiration of any applicable grace
period will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any mortgage or trust
deed covering the premises. Accordingly, if any installment of rent or any other
sums due from Tenant shall not be received by Landlord when due Tenant shall pay
to Landlord a late charge equal to 6% of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of late payment by Tenant, Acceptance of
such late charge by Landlord shall in no event constitute a waiver of Tenant's
default as provided above, or prevent Landlord from exercising any of the other
rights and remedies available to Landlord hereunder or at law.
5. Taxes and Assessments. In addition to the monthly rental and other charges
to be paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for
any and all taxes, assessments, levies, fees, charges and impositions whatsoever
levied or imposed or assessed by any authority having the direct or indirect
power to tax, including, without limitation, any city, county, state or federal
government or any improvement or other assessment district, whether or not
consented to or joined in by Landlord, payable by Landlord (other than income
taxes, measured by the net income of Landlord from all
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sources), whether or not now customary or within the contemplation of the
parties hereto on the date of this Lease: (a) upon, measured by or reasonably
attributable to the cost or value of tenant's equipment, furniture, fixtures and
other personal property located in the premises or by the cost or value of any
leasehold improvements made in or to the premises by or for Tenant, other then
building standard tenant improvements made by Landlord, regardless of whether
title to such improvements shall be in Tenant or Landlord; (b) upon or measured
by the rental payable hereunder, including without limitation any gross income
tax or excise tax levied by any city, county, state, federal or other
governmental body with respect to the receipt of such rental; (c) upon or with
respect to the possession, leasing, operation, management, maintenance,
improvement, alteration, repair, use or occupancy by Tenant of the premises or
any portion thereof; (d) upon (his transaction or any document to which Tenant
is a party creating or transferring an interest or an estate in the premises. In
the event that it shall not be lawful for Tenant so to reimburse Landlord, the
monthly rental payable to Landlord under this Lease shall be revised to net
Landlord the same net rental after such imposition as would have been payable to
Landlord prior to such imposition.
6. Operation Expenses. Tenant shall, during the entire term hereof, pay to
Landlord Tenant's percentage share of the amount by which all Operating Expenses
paid or incurred by Landlord in any Lease Year exceed Base Operating Expenses.
The amount of all sums payable hereunder shall be paid by Tenant to Landlord in
the manner set forth in paragraph 7 below.
7. Estimated Payments. Unless otherwise expressly designated herein, all
monetary amounts payable to Tenant to Landlord pursuant to this Lease shall be
payable as follows:
(a) During December of each Lease Year or as soon thereafter as
practicable, Landlord shall give Tenant notice of its estimate of amounts
payable hereunder for the ensuing Lease Year. On or before the first day of each
month during the ensuing Lease Year, Tenant shall pay to Landlord 1/12 of such
estimated amounts, provided that if such notice is not given in December Tenant
shall continue to pay on the basis of the prior year's estimate until the month
after such notice is given. If, at any time or times, it appears to Landlord
that the amounts payable for the current Lease Year will vary from its estimate
by more than 5%, Landlord shall, by notice to Tenant, revise its estimate for
such year, in which case subsequent payments by Tenant for such year shall be
based upon such revised estimate.
(b) Within 90 day after the close of each Lease Year or as soon after such
90- day period as practicable, Landlord shall deliver to Tenant a statement of
amounts payable for such Lease Year. If on the basis of such statement Tenant
owes an amount that is less than the estimated payments for such Lease Year
previously made by Tenant and Tenant is not in default hereunder, Tenant shall
receive a credit in the amount if such excess against the next installments due
under paragraphs 6 and 7 hereof. If on the basis
6
of such statement Tenant owes an amount that is more than the estimated payments
for such Lease Year previously made by Tenant, Tenant shall pay the deficiency
to Landlord within 30 days after delivery of the statement.
(c) If this Lease shall terminate an other than the last day of a calendar
year, the adjustment in rent applicable to the Lease Year in which such
termination shall occur shall be prorated on the basis which the number of days
from the commencement of such Lease Year to and including such expiration date
bears to 365. If the adjustment in rent is not determined until after the
termination of this Lease, any excess amounts due Tenant or deficiency amounts
due Landlord shall be paid in cash within 30 days after delivery of the
statement setting forth such adjustment determination.
(d) Notwithstanding the foregoing, if, at any time, Landlord incurs for any
item actual costs or expenses which are reimbursable in whole or in part by
Tenant pursuant to this Lease and such costs or expenses are in excess of the
estimated amount budgeted for such item and otherwise payable by Tenant, then,
upon written demand ftom Landlord accompanied by a statement of such costs of
expenses, Tenant shall immediately pay to Landlord the full amount of any excess
reimbursable costs or expenses.
8. Common Areas.
(a) The use and occupation by Tenant of the premises shall include a right
to the use in common with others entitled thereto of the common areas and other
facilities as may be designated from time to time by Landlord, subject, however,
to the terms and conditions of this Lease. All common areas and facilities not
within the premises, which Tenant may be permitted to use and occupy pursuant to
this paragraph, are to be Used and occupied tinder a revocable license. If the
measure of such areas is diminished by Landlord, Landlord shall not be subject
to any liability nor shall Tenant be entitled to any compensation or diminution
or abatement of rent, nor shall such diminution of such areas be deemed
constructive or actual eviction.
(b) Landlord shall at all times during the term of this Lease have the
following rights with respect to the common area and other facilities:
(1) Landlord shall have the right from time to time to alter and
modify the common areas and other facilities as it deems desirable in its sole
discretion;
(2) Landlord may discontinue the existence of the common area subject
to the requirements of laws and ordinances applicable thereto;
(3) Landlord may promulgate and enforce such rules and regulations
relating to the use of the common areas and other facilities as Landlord deems
necessary or desirable.
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Landlord shall exercise the foregoing rights in such a manner as to minimize the
interference with Tenant's beneficial enjoyment of the premises.
9. Use.
(a) The premises shall be used solely for general office purposes and no
other, except chiropractic services are permitted to the extent they are
permitted under codes for the City of Bellevue. Tenant shall not use or permit
the premises to be used for any other purpose without Landlord's prior written
consent. Landlord and Tenant hereby further acknowledge that the identity of
Tenant, the specific character of Tenant's business and anticipated use of the
premises and the relationship between such use and other uses within the
Building has been a material consideration to Landlord's entry into this Lease.
Any material change in the character if Tenant's business or use shall
constitute a default under this Lease.
(b) Tenant shall not do or permit to be done in, on or about he premises,
nor bring or keep or permit to be brought or kept therein, anything which is
prohibited by or will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated, or which is prohibited by the standard form of fire insurance
policy or will in any way increase the existing rate of or affect any fire or
other insurance upon the Building, or cause a cancellation of any insurance
policy covering the Building or any part thereof of any of its contents. Tenant
shall not do or permit anything to be done in or about the premises which will
in any way obstruct or interfere with the rights of other tenants of the
Building, or injure or annoy them, or use or allow the premises to be used for
any improper, immoral, unlawful or objectionable purpose. Nor shall Tenant
cause, maintain or permit any nuisance in, or about the premises or commit or
stiffer to be committed any waste in or upon the premises.
(c) Except for normal office and janitorial supplies in customary
quantities, Tenant shall not cause or permit any Hazardous Material to be
brought upon, kept or used in or about the premises or the Building. If Tenant
breaches the obligations stated in the preceding sentence, or if the presence of
Hazardous Material on the premises or the Building caused or permitted by Tenant
results in contamination of the premises or the Building the Tenant shall
indemnify, defend and hold Landlord harmless for, from and against any and all
claims, judgments, damages, penalties, fines, costs, liabilities or losses
(including, without limitation, diminution in value of the Building, damages for
the loss or restriction on use of rentable or usable space or of any amenity of
the Building, damages arising from any adverse impact on marketing of space in
the Building, and sums paid in settlement of claims, reasonable attorneys' fees,
consultant fees and expert fees) which arise during or after the Lease Term as a
result of such contamination. This indemnification of Landlord by Tenant
includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or
8
restoration work required by any federal, state or local governmental agency or
political subdivision because of hazardous Material present in or about any part
of the Building, including, without limitation, the soil or ground water under
the Building.
As use herein, the term "Hazardous Material" means any hazardous or toxic
substance, material or waste which is or becomes regulated by any federal, state
or other local governmental authority, including, without limitation, any
material or substance which is designated as a "hazardous substance" pursuant to
Section 31 1 of the Federal Water Pollution Control Act (33 U.S.C. ss.1317),
defined as a "hazardous waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, (42 U.S.C. 6901 ET SEQ.), or defined as a
"hazardous substance" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act, (42 U.S.C. ss. 9601 ET SEQ.)
10. Services.
(a) Landlord shall maintain the public and common areas of the Building,
including lobbies, stairs, elevators, corridors, restrooms, windows, mechanical,
plumbing and electrical systems and the structure itself, in reasonably good
order and condition except for damage occasioned by the act of Tenant or
Tenant's invites, which damage shall be repaired by Landlord at Tenant's
expense.
(b) Landlord shall furnish the premises with (1) electricity for fighting
and the operations of office machines, (2) heat and air conditioning to the
extent reasonably required for comfortable occupancy by Tenant in its use of the
premises during the period from 7:30 a.m. to 6 p.m. on weekdays (except
holidays), or such shorter period as may be prescribed by any applicable
policies or regulations adopted by any utility or governmental agency, (3)
elevator service, (4) initial lighting installation (for building standard
lights), (5) restroom supplies, (6) window washing with reasonable frequency,
(7) janitorial service five nights per week (except labor holidays) furnished in
the manner that such service is customarily famished in comparable office
buildings in the locale of the Building. Landlord shall not be in default
hereunder or be liable for any damages directly or indirectly resulting from,
nor shall the rental herein reserved be abated by reason of (i) the
installation, use or interruption of use of any equipment in connection with the
furnishing of any of the foregoing services, (it) failure to furnish or delay in
furnishing any such services when such failure or delay is caused by accident or
any improvements to the premises or to the Building, or (iii) the limitation,
curtailment, rationing or restrictions on use of water, electricity, gas or any
other form of energy serving the premises or the Building. Landlord shall use
reasonable efforts diligently to remedy any interruption in the furnishing of
such services.
(c) Whenever heat generating machines or equipment or lighting other than
building standard lights are used in the premises by Tenant which affect the
temperature
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otherwise maintained by the air conditioning system, Landlord shall have the
right to install supplementary air conditioning facilities in the premises or
otherwise modify the ventilating and air conditioning system serving the
premises, and the cost of such facilities and modifications shall be home by
Tenant. Tenant shall also pay as additional rent the cost of providing all
heating or cooling energy to the premises in excess of that required for normal
office use or during hours requested by Tenant when heat or air conditioning is
not other-wise furnished by Landlord. If Tenant installs lighting requiring
power in excess of that required for normal office use in the Building or if
Tenant installs equipment requiring power in excess of that required for normal
desk-top office equipment or normal copying equipment, Tenant shall pay for the
cost of such excess power as additional rent, together with the cost of
installing any additional risers or other facilities that may be necessary to
furnish such excess power to the premises.
(d) Landlord at the commencement of this Lease shall equip the standard
electrical fixtures of the premises with light globes and fluorescent tubes and
ballasts, as the case may be; replacement thereof shall be Tenant's
responsibility and cost, and if Tenant shall request Landlord to replace same,
then the cost shall be paid by Tenant to Landlord.
11. Alteration, Fixtures and Improvements.
(a) Tenant shall not make or suffcr to be made any alterations, additions,
or improvements to or of the premises or any part thereof, or attach any fixture
or equipment thereto, without first obtaining Landiord's written consent which
consent shall not be unreasonably withheld, conditioned or delayed. At the time
Landlord consents to any alterations, additions or improvements, Landlord shall
inform Tenant inwriting whether Tenant is responsible for the removal of such
alterations and improvments at the expiration or earlier termination of the term
of this Lease. Nothwithstanding anything to the contrary herein, Tenant shall
have the right to make non-stnicrtiral alterations to the Premises which do not
affect the Building systems,or structural components, which cost less than Ten
Thousand Dollars ($1 0,000) each (each a "Permitted Alteration") with the prior
written consent of Landlord which shall not be unreasonably withheld,
conditioned or delayed, provided that such alterations are otherwise made in
compliance with the terms of this Lease, permits are applied for and approved by
the City of Bellevue and such such improvements enhance the Premises' ability to
be re-)et in the ftinire. Any alterations, additions or improvements to the
premises consented to by Landlord shall be made by Tenant at Tenant's sole cost
and expense according to plans and specifications approved by Landlord, and any
contractor or person selected by Tenant to make the same must first be approved
by Landlord. Landlord may require, at it option, that Tenant provide Landlord at
Tenant's sole cost and expense payment and performance bonds, in an amount equal
to 150% the estimated cost of any contemplated alterations, fixtures, and
improvements, to insure Landlord against any liability for mechanics' or
niatcrialmen's liens and to insure the completion of such work. All alterations,
additions, fixtures and improvements,
10
whether temporary or pen-nanent in character, made in or upon the premises
either by Tenant of Landlord (other than furnishings, trade fixtures and
equipment installed by Tenant), shall be Landiord's property and zit the end of
the term hereof, shall remain on the premises without compensation to Tenant,
provided that, if Landlord requested in Landlord's consent as provided for in
this Section 11, Tenant shall remove all such alterations, fixtures and
improvements from the premises and return the premises to the condition in which
they were delivered to Tenant. Upon such removal Tenant shall immediately and
fully repair any damage to the premises occasioned by the removal.
(b) Landlord may perform, or cause to be performed, substantial renovation
and remodeling to the exterior and interior of the Building and Landlord
reserves the right to enter the premises in connection therewith. Landlord shall
reasonably attempt to minimize any iptemiption of tenant's business caused by
such renovation and remodeling.
12. Liens. Tenant shall keep the premises and the Building free from any liens
arising out of any work performed, materials fumished or obligations incurred by
Tenant. In the event that Tenant shall not, within 10 days following the
imposition of any such lien, cause the same to be released of record, Landlord
shall have, in addition to all other remedics provided herein and by law, the
right but not the obligation to cause the same to be released by such means as
it shall deem proper, including payment of the claim giving rise to such lien.
All sums paid by Landlord for such purpose, and all expenses incurred by it in
connection therewith including, without limitation, any attorneys' fees, court
costs, and expenses of litigation, together with Default interest thereon, shall
be payable to Landlord by Tenant on demand. Nothing in this Lease shall be
construed in any way as constituting the consent or request of the Landlord,
expressed or imposed, by inference or otherwise, to any contractor,
subcontractor, laborer, or materialmen, for t ie performance of any labor, or
the furnishing of any materials for any specific improvement, alteration and
repair of or to the premises or as giving Tenant the right, power or authority,
to contract for or permit the rey deicing of any service or the furnishing of
any material that would give rise to the filing of any mechanic's I ens against
the premises. Landlord shall have the right to post and keep posted on the
premises any notices, it at may be provided by law or which Landlord may deem to
be proper for the protection of Landlord, the premises and the Building from
such liens, and Tenant shall give Landlord at least 5 days' prior notice of the
date of commencement of any construction on the premises in order to permit the
posting of such notices.
13. Repairs and Maintenance of Premises.
(a) Tenant shall at all times during the term hereof and at Tenant's sole
cost and expense, keep the premises and every part thereof in reasonably good
condition and repair, ordinary wear and tear, damage thereto by fire,
earthquake, act of God or the elements excepted. Subject to the provisions of
paragraph 11I above concerning the
11
removal of alterations, additions and improvements, Tenant shall at the end of
the term hereof surrender to Landlord the premises and all alterations,
additions and improvements thereto in the same condition as when received or
when first installed, ordinary wear and tear and damage by fire, earthquake, act
of God or the elements excepted. Landlord has no obligation and has made no
promise to alter, remodel, improve, repair, decorate or paint the premises or
any part thereof. No representations respecting the condition of the premises or
the Building have been made by Landlord to Tenant, except as specifically herein
set forth. The Tenant hereby waives any and all express or implied warranties
relating to or arising from this Lease, the Premises or the tenancy.
(b) Landlord shall assign to Tenant, and Tenant shall have the benefit of,
any guarantee or warranty to which Landlord is entitled under any purchase,
construction or installation contract relating to a component of the premises
which Tenant is obligated to repair and maintain. Tenant shall have the right to
call upon the contractor to make such adjustments, replacements, or repairs
which are required to be made by the contractor under such contract.
(c) Notwithstanding the provisions of subparagraph 13(a) above, Landlord
shall repair and maintain the structural portions of the Building, including the
basic plumbing, air conditioning, heating and electrical systems, installed and
furnished by Landlord, unless such maintenance and repairs are caused in
material part or in whole by the act, neglect, fault or omission of any duty by
Tenant, its agents, servants, employees or invitees, in which case Tenant shall
pay to Landlord the reasonable cost of such maintenance and repairs. Landlord
shall not be liable for any failure to make any such repairs or to perform any
maintenance unless such failures shall persist for an unreasonable time,
considering all factors, including the availability of material, utilities and
labor, after written notice of the need of such repairs or maintenance is given
to Landlord by Tenant. There shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making or failure to make any repairs, alterations or
improvements in or to any portion of the Building or the premises or in or to
fixtures, appurtenances, and equipment therein.
(d) Tenant hereby waives any right to make repairs at landlord's expense
under the provisions of any laws permitting repairs by a tenant at the expense
of a landlord to the extent allowed by law; Landlord an Tenant have by this
Lease made specific provision for such repairs and have expressly defined their
respective obligations.
14. Damage and Destruction.
(a) If the premises or the portion of the Building necessary for Tenant's
occupancy should be damaged or destroyed during the term hereof by any casualty
insurable under standard fire and extended coverage insurance policies, Landlord
shall (except as hereafter provided) repair or rebuild tile premises to
substantially the condition
12
in which the premises were immediately prior to such destruction.
(b) Landlord's obligation tinder this paragraph shall in no event exceed
the lesser of (1) with respect to the premises, the scope of building standard
improvements installed by Landlord in the original construction of the premises,
or (2) the extent of proceeds received by Landlord or any insurance policy
maintained by Landlord pursuant to paragraph 16(a) below, unless Landlord
nevertheless elects to repair or rebuild the premises.
(c) The minimum rent shall be abated proportionately during any period in
which, by reason of any damage or destruction not occasioned by the negligence
or willful misconduct of Tenant or Tenant's employees or invitees, there is a
substantial interference with the operation of the business of Tenant. Such
abatement shall be proportional to the measure of business in the premises which
Tenant may be required to discontinue. The abatement shall continue for the
period commencing with such destruction or damage and ending with the completion
by the Landlord of such work, repair or reconstruction as Landlord is obligated
to do.
(d) Notwithstanding the foregoing, if the premises, or the portion of the
Building necessary for Tenant's occupancy should be damaged or destroyed (1) to
the extent of 10% or more of the then replacement value of either, (2) in the
last year of the term hereof, (3) by a cause or casualty other than those
covered by fire and extended coverage insurance, or (4) to the extent that it
would take, in Landlord's opinion, in excess of 90 days to complete the
requisite repairs, then Landlord may either terminate this Lease or elect to
repair or restore said damage or destruction, in which event Landlord shall
repair or rebuild the same as provided in subparagraph (a) above. If such damage
or destruction occurs and this Lease is not so terminated by Landlord, this
Lease shall remain in full force and effect. The parties hereby waive the
provisions of any law that would dictate automatic termination or grant either
party an option to terminate in the event of damage or destruction. Landlord's
election to terminate Landlord's obligation under this paragraph shall be
exercised by written notice to Tenant given within 60 days following the damage
or destruction. Such notice shall set forth the effective date of the
termination of this Lease.
(e) Upon the completion of any such work of repair or restoration by
Landlord, Tenant shall forthwith repair and restore all other parts of the
premises including without limitation, non-building standard leasehold
improvements and all trade fixtures, equipment, furnishings, signs and other
improvements originally installed by Tenant, subject to the requirements of
subparagraph 11 (a) above.
15. Indemnification. Except to the extent caused by the gross negligence or
willful misconduct of Landlord or Landlord's agents, employees or invitees,
Landlord shall not be liable to Tenant and Tenant hereby waives all claims
against Landlord for any injury to or
13
death of any person of damage to or destruction of property in or about the
premises or the Building by or from any cause whatsoever, including, without
limitation, acts of other tenants or other third parties, gas, fire, oil,
electricity or leakage of any character from the roof, walls, basement or other
portion of the premises or the Building. Except to the extent caused by the
gross negligence or willful misconduct of Landlord or Landlord's agents,
employees or invitees, Tenant shall hold Landlord and any ground Landlord
harmless for, from and against and defend Landlord against any and all claims,
liability, damage or loss, and for, from and against all costs and expenses,
including reasonable attorneys' fees, arising out of any injury to or death of
any person or damage to or destruction of any property, from any cause
whatsoever (except any cause resulting solely from the gross negligence or
willful act of Landlord, its authorized agents or employees) occurring in or
about the premises or the Building and, if occurring on or about any portion of
the common areas or elsewhere in or about the Building, when such injury or
damage shall be caused in whole or in part by the act, neglect, default or
omission of any duty by Tenant, its agents, employees or invitees or otherwise
by any conduct or transactions of any of said persons in or about or concerning
the premises, including any failure of Tenant to observe or perform any of its
obligations hereunder. 'Me provisions of this paragraph 15 shall survive the
termination of this Lease with respect to any damage, injury or death occurring
prior to such termination.
16. Insurance.
(a) Tenant shall procure and maintain in full force and effect during the
entire term hereof, at its own expense and in companies acceptable to Landlord,
the following policy or policies of insurance.
(1) Comprehensive liability insurance, including property damage,
insuring Landlord and the Building, as Landlord may designate, hereinafter
called "additional designated insured") from and against all claims, demands,
actions or liability for injury to or death of any persons, and for damage to
property arising from or related to the use of occupancy of the premises or the
operation of Tenant's business. No deductible shall be carried under this
coverage without the prior written consent of Landlord. Such policy shall
contain but not be limited to, coverage for premises and operations, products
and completed operations, blanket contractual, personal injury, operations,
ownership, maintenance and use of owned, non-owned, or hired automobiles, bodily
injury and property damage. The policy shall have limits in amounts not less
than $1,000,000 per person and per occurrence, with an aggregate limit of
$2,000,000. This insurance shall carry a contractual coverage endorsement
specifically insuring the performance by Tenant of its indemnity agreement
contained in paragraph 15 above. If in the opinion of Landlord's insurance
advisor, based on a substantial increase in recovered liability claims, the
aforesaid amounts of coverage are no longer adequate, then such coverage shall
be proportionately increased.
14
(2) Worker's Compensation Insurance and Employer's Liability Insurance
with a limit of no less than that amount required by law, provided that
Employer's Liability Insurance shall have a minimum coverage of $1,000,000 per
person and per occurrence.
(3) Fire insurance with standard extended coverage of "all risk"
endorsement, including, without limitation, vandalism and malicious mischief, to
extent of 90% of the replacement value of all furnishings, trade fixtures,
leasehold improvements, equipment, merchandise and other personal property and
leasehold improvements from time to time situated in, on or upon the premises.
As long as this Lease is improvements from time to time in effect, the proceeds
from any such insurance shall be held in trust to be used only for the repair or
replacement of the improvements, fixtures and other property so insured.
(b) Landlord may elect to procure and maintain liability insurance and
insurance covering fire and such other risks of direct indirect loss or damage
as it reasonably deems appropriate, including extended and broad form coverage
risks, mudslide, land subsidence, volcanic eruption, flood and earthquake, on
leasehold as improvements in the Building. Tenant shall reimburse Landlord for
the costs of all such insurance as part of Operating Expenses reimbursable
pursuant to paragraph (6). Any insurance coverage herein provided shall be for
the benefit of Landlord, Tenant and any additional designated insured, as their
interests may appear, Tenant shall not adjust losses or execute proofs of loss
under such policies without Landlords prior written approval.
(c) Should this Lease be canceled pursuant to the provisions of paragraph
14 above by reason of damage or destruction and Tenant is thus relieved of its
obligation to restore or rebuild the improvements on the premises, any insurance
proceeds for damage to the premises, including all fixtures and leasehold
improvements thereon, shall belong to Landlord, free and clear of any claims by
Tenant.
(d) All policies of insurance described in this paragraph 16 of which
Tenant is to procure and maintain, shall be issued by good, responsible
companies, reasonably acceptable to Landlord and qualified to do business in the
state in which the Building is situated. Executed copies of such policies of
insurance or, at Landlord's election, certificates thereof, shall be delivered
to Landlord and any additional designated insureds within 10 days after delivery
of possession of the premises to Tenant and thereafter within 30 days prior to
the termination or expiration of the term of each existing policy. All public
liability and property damage policies shall contain the following provisions:
(1) Landlord, and any additional designated insureds although named as insured,
shall nevertheless be entitled to recovery under said policies for any loss
occasioned to them, their servant , agents and employees by reason of the
negligence of Tenant, its officers, agents or employees; (2) the company writing
such policy shall agree to give Landlord and any additional designated insured
not less than 30 days' notice in writing prior to any cancellation, reduction or
modification of such insurance; and (3) at the election of
15
Landlord's mortgagee, the proceeds of any insurance shall be paid to a trustee
or depository designated by Landlord's mortgagee. All public liability, property
damage and other casualty policies shall be written as primary policies, not
entitled to contribution from, nor contributing with, any coverage which
Landlord may carry.
Tenant hereby acknowledges that the late delivery by Tenant to Landlord of
the insurance certificates or policies referred to above will cause Landlord to
incur costs nol contemplated by this lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges and penalties which may be imposed on Landlord
by the terms of any mortgage or trust deed covering the premises. Accordingly,
if any insurance certificate or policy required to be delivered by Tenant above
shall not be received by Landlord at the time prescribed above, Tenant shall pay
to Landlord a charge in the sum of $300. The parties hereby agree that such
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late delivery by Tenant, and acceptance of such charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such late delivery, nor prevent Landlord from exercising any of the other
rights and remedies available to Landlord hereunder or at law.
(e) Notwithstanding anything to the contrary contained within this
paragraph, Tenant's obligations to carry the insurance provided for herein may
be brought within the coverage of the so-called blanket policy or policies of
insurance carried and maintained by Tenant; provided, however, that (1) Landlord
and such other persons shall be named as additional insureds thereunder as their
interests may appear; (2) the coverage afforded to Landlord and such other
persons will not be reduced of diminished by reason of the use of such blanket
policy of insurance; and (3) all other requirements set forth herein are
otherwise satisfied.
If Tenant should fail either to acquire the insurance required pursuant to
this paragraph 16 and to pay the premiums therefor or to deliver required
certificates or policies, Landlord may in addition to any other rights and
remedies available to Landlord, acquire such insurance and pay the requisite
premiums therefor, which premiums shall be payable by Tenant to Landlord
immediately upon demand.
(g) Landlord and Tenant hereby waive any rights each may have against the
other for loss or damage to its property or property in which it may have an
interest where such loss is caused by a peril of the type generally covered by
fire insurance with extended coverage or arising from any cause which the
claiming party was obligated to insure against under this Lease, and each party
on behalf of its insurer waives any right of subrogation that the insurer might
otherwise have against the other party. The parties agree to cause their
respective insurance companies insuring the premises or insuring their property
on or in the premises to execute a waiver of any such rights of subrogation.
16
17. Condemnation.
(a) The term "total taking" means the taking of the fee title or Landlord's
master leasehold estate to so much of the premises or a portion of the Building
necessary for Tenant's occupancy by right of eminent domain or other authority
of law, or a voluntary transfer tinder the threat of the exercise thereof, that
the premises are not suitable for Tenant's intended use. The term "partial
taking" means the taking of only a portion of the premises or the Building which
does not constitute a total taking as above defined.
(b) If during the term hereof there shall be a total taking then this
Lease, and the leaschold estate of Tenant in and to the premises, shall cease
and terminate as of the date possession is taken. As used in this paragraph, the
phrase "date possession is taken" means the date of taking actual physical
possession thereof by the condemning authority or such earlier date as the
condemning authority gives notice that it shall be deemed to have taken
possession.
(c) If during the term hereof there shall be a partial taking of the
premises, this Lease shall terminate as to the portion of the premises taken on
the date on which actual possession of the portion of the premises is taken
pursuant to the eminant domain proceedings and this Lease shall continue in full
force and effect as the remainder of the premises. The minimum rent payable by
Tenant for the balance of the term shall be abated in the ratio that the net
rentable area of the premises taken bears to the net rentable area of the
premises immediately prior to such taking, and Landlord shall make all necessary
repairs or alterations to make the remaining premises a complete architectural
unit, suitable for Tenant's permitted use hereunder.
(d) All compensation and damages awarded for the taking of the premises,
any portion thereof, or the whole or any portion of the common area or Building
shall, except as otherwise herein provided, belong to and be the sole property
of Landlord, and Tenant shall not have any claim or be entitled to any award for
diminution in value of its rights hereunder or for the value of any unexpired
term of this Lease; provided, however, that Tenant shall be entitled to make its
own claim for, and receive separate award that may be made for Tenant's loss of
business or for the taking of or injury to Tenant's improvements, or on account
of any cost or loss Tenant may sustain the removal of Tenant's trade fixtures,
equipment, and furnishings, or as a result of any alterations, modifications or
repairs which may be reasonably required by Tenant in order to place the
remaining portion of the premises not so condemned in a suitable condition for
the continuance of Tenant's occupancy. The Tenant's award pursuant to this
subparagraph shall not reduce Landlord's award.
(e) If this Lease is terminated pursuant to the provisions of this
paragraph 17, then all rentals and other charges payable by Tenant to Landlord
hereunder shall be paid up to the date upon which possession shall be taken by
the condemning agency and any
17
rentals and other charges paid in advance and allocable to the period after the
date possession is taken, shall be repaid to Tenant by Landlord, and the parties
shall thereupon be released from all further liability hereunder.
18. Compliance With Legal Requirements. Tenant shall at its sole cost and
expense promptly comply with all laws, statutes, ordinances and governmental
rules, regulations or requirements now in force or which may hereafter be in
force, with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted, with any direction or occupancy certificate
issued pursuant to any low by any public officer or officers, as well as the
provisions of all recorded documents affecting the premises, as they relate to
or affect the condition, use or occupancy of the premises, excluding
requirements of structural changes not related to or affected by improvements
made by or for Tenant or Tenant's use of the premises.
19. Assignment and Subletting.
(a) Tenant shall not transfer, assign, sublet, enter into license or
concession agreements, or hypothecate this Lease or the Tenant's interest in and
to the premises without first procuring the written consent of Landlord, which
consent shall not unreasonably be withheld, coaditioned or delayed. Any
attempted transfer, assignment, subletting license or concession agreement or
hypothecation without Landiord's consent shall be void and shall, at the option
of Landlord, terminate this Lease. This Lease shall not, nor shall any interest
herein, be assignable as to the interest of Tenant by operation of law without
the consent of Landlord. Tenant agrees to reimburse Landlord for Landiord's
reasonable attorneys' fees incurred in conjunction with the processing and
documentation of any such requested transfer, assignment, subletting, licensing
or concession agreement, or hypothecation of this Lease or Tenant's interest in
and to the premises. As it pertains to this Lease, any overage or other
compensation above the base rental established herein paid to Tenant in any
sublease or assignment shall belong in its entirety to Landlord.
(b) Before entering into any assignment of this Lease or into a sublease of
all or part of the premises, Tenant shall give wri"cn notice to Landlord
identifying the intended assignee or subtenant by name and address and
specifying the terms of the intended assignment or sublease. For a period of
thirty (30) days after such notice is given, Landlord shall have the right by
written notice to Tenant to (i) in the case of a proposed sublease, either (A)
sublet from tenant any portion of the premises proposed to be sublet for the
term for which such portion is proposed to be sublet but at the same rent as
Tenant is required by pay to Landlord under this Lease for the same space,
computed on a pro rata square footage basis, or (B) if the proposed subletting
is for substantially the remaining period of the term of this Lease, terminate
this Lease or terminate this Lease as is pertains to the portion of the premises
so proposed by Tenant to be sublet, or (it) in the case of a proposed
assignment, terminate this Lease. If Landlord so terminates this
18
Lease, such termination shall be as of the date specified in Landlord's notice,
If Landlord so terminates this Lease, Landlord may, if it elects, enter into a
ne%v lease covering the premises or a portion thereof with the intended assignee
or subtenant on such terms as Landlord and such person may agree, or enter into
a new lease covering the premises or a portion thereof with any other person; in
such event, Tenant shall not be entitled to any portion of the profit, if any,
which Landlord may realize on account of such termination and reletting.
Landlord's exercise of its aforesaid option shall not be construed to impose any
liability upon Landlord with respect to any real estate brokerage commission(s)
or any other costs or expenses incurred by Tenant in connection with its
proposed subletting or assignment.
(c) If Tenant complies with the provisions of this section and Landlord
does not exercise an option provided to Landlord under lb) above, Landlord's
consent to a proposed assignment or sublet shall not be unreasonably withheld,
conditioned or delayed. Without limiting the other instances in which it may be
reasonable for Landlord to witlihold its consent to an assignment or subletting,
Landlord and Tenant acknowledge that is shall be reasonable for Landlord to
williliold its consent in any of the following instances:
(1) the proposed assignee or stiblessee is a governmental agency;
(2) in Landlord's reasonable judgment, the use of the premises by the
proposed assignee or sublessee would entail any alterations which would lessen
the value of the leaschold improvements in the premises, or would require
material increased services by Landlord;
(3) in Landlord's reasonablejudgment, the financial wonh of the
proposed assignee or sublessce does not meet the credit standards applied by
Landlord for other tenants under leases with comparable terms;
(4) in Landlord's reasonable judgment, the character, reputation or
business of tenant is inconsistent with the desired tenant-mix or the quality of
other tenancies in the Building;
(5) Landlord has received from any prior lessor to the proposed
assignee or subtenant a negative report concerning such prior lessor's
experience with the proposed assignee or subtenant;
(6) Landlord has experienced previous defaults by or is in litigation
with the proposed assignee or subtenant;
(7) (i) the proposed assignee's or subtenant's anticipated use of the
premises involves the generation, storage, use, treatment or disposal of
Hazardous Material; (ii) the proposed assignee or subtenant has been required by
any prior landlord,
19
lender or governmental authority to take remedial action in connection with
Hazardous Material contaminating a property if the contamination resulted from
such assignee's or subtenant's actions or use of the property in question; or
(iii) the proposed assignee or subtenant is subject to an enforcement order
issued by any governmental authority in connection with the use, disposal or
storage of a Hazardous Material;
(8) the use of the premises by the proposed assignee or subtenant will
violate any applicable law, ordinance or regulation;
(9) the proposed assignment or sublease will create a vacancy
elsewhere in the Building;
(10) the proposed assignee or subtenant, or any person that, directly
or indirectly, controls, is controlled by, or is under conunon control with the
proposed assignee or subtenant, is then an occupant of the Building;
(11) the proposed assignee or subtenant is a person with whom Landlord
is negotiating to lease space in the Building;
(12) the proposed assignment or sublease fails to include all of the
terms and provisions required to be included therein pursuant to this paragraph;
(13) Tenant is in default of any obligation of Tenant under this
Lease, or Tenant has defaulted under this Lease on three (3) or more occasions
during the twelve (I 2) months preceding the date that Tenant shall request
consent; or
(14) in the case of a subletting of less that the entire premises, if
the subletting wou Id resu It in the division of the premises into more than two
subparcels or would require access to be provided through space leased or held
for lease to another tenant or improvements to be made outside of the premises.
(d) in the case of an assignment, 100% of any sums or other economic
consideration received by Tenant as a result of such assignment shall be paid to
Landlord after first deducting the unamortized cost of leasehold improvements
paid by Tenant, and the cost of any real estate commissions incurred in
connection with such assignment. In the case of a subletting, 100% of any sum or
economic consideration received by Tenant as a result of such subletting shall
be paid to Landlord after first deducting (1) the rental due hereunder, prorated
to reflect only rental allocable to the sublet portion of the premises, and (2)
the cost of any real estate commissions incurred in connection with such
subletting, amortized over the term of the sublease. Upon Landiord's request,
Tenant shall assign to Landlord all amounts to be paid to Tenant by any such
subtenant or assignee and shall direct such subtenant or assignee to pay the
same directly to Landlord.
(e) Notwithstanding the provisions of sxibparagraphs (a) and lb) above,
Tenant
20
may assign this Lease or sublet the premises or any portion thereof, without
Landiord's consent, to any corporation which controls, is controlled by or is
tinder common control with Tenant or to any corporation resulting from the
merger or consolidation with Tenant so long as there is no change in control of
Tenant, provided that said assignee assumes, in full, the obligations of Tenant
under this Lease.
(f) Regardless of Landiord's consent, no subletting, assignment,
hypothecation, license or concession shall release Tenant of Tenant's obligation
or alter the primary liability of Tenant to pay the rental and to perform all
other obligations to be performed by Tenant hereunder. The acceptance of rental
by Landlord from any other person shall not be deemed to be a waiver by Landlord
of any provision hereof Consent to one assignment, subletting, hypothecation,
license or concession agreement shall not be deemed consent to any subsequent
assignment, subletting, hypothecation, license or concession agreement. In the
event of default by any assignee of Tenant or any successor of Tenant in the
performance of any of the terms hereof, Landlord may proceed directly against
Tenant without he necessity of exhausting remedies against such assignee or
successor. Landlord may consent to subsequent assignments or modifications to
this Lease, with assignees of Tenant %without notifying Tenant or any successor
of Tenant, and without obtaining its or their consent thereto and such action
shall not relieve Tenant of liability under this Lease.
(g) Each transfer, assignment, subletting, license, concession agreement
and hypothecation to which there has been consent or which has been permitted
pursuant to subparagraph (e) above, shall be by an instrument in form
satisfactory to Landlord and shall be executed by the ttansfcror, assignor,
sublessor, licenser, concessionaire, hypothecator or mortgagor and the
transferee, assignee, sublessce, licensee, concessionaire or mortgagee in each
instance, as the case may be; and each transferee, assignee or sublessee shall
agree in writing t-or the benefit of Landlord to assume, to be bound by, and to
perform the terms, covenants and conditions of this Lease to be done, kept and
performed by Tenant. One executed copy of such instrument shall be delivered to
Landlord. No sublessee other than Landlord shall have the right further to
sublet.
(h) In the event Tenant shall assign or sublet the premises or request
Landiord's consent to a proposed assignment, subletting, or other act, then
Tenant shall pay (1) to Landlord and administrative fee in the sum of $300 and
(ii) Landlord's reasonable attorneys' fees incurred in connection therewith.
(i) For the purpose of this Lease, a transfer of more than (i) 50% of the
partnership interest in Tenant if Tenant is a partnership, or (ii) 50% of the
outstanding voting stock if Tenant is a corporation, shall constitute an
assignment of this Lease. Notwithstanding anything to the contrary in the Lease,
the terms of this Section 19 (i) shall not apply to Tenant if Tenant is a
publicly traded company. Further, an initial public trading of Tonant's stock
shall not constitute an assignment or transfer for purposes of this
21
Section 19 (i).
20. Rules and Regulations. Tenant shall faithfully observe and comply with the
rules and regulations a"aclied to this Lease as Exhibit C and, after notice
thereof, all reasonable modifications thereof and additions thereto from time to
time promulgated in writing by Landlord. Landlord shall not be responsible to
Tenant for the nonperformance by any other tenant or occupant of the Building of
any of such rules and regulations.
21. Landlord's Access. Landlord may enter the premises at reasonable hours to
(1) inspect he same; (2) exhibit the same to prospective purchasers, mortgagees
or tenants; (3) determine whether Tenant is complying with all its obligations
hereunder; (4) supply any service to be provided by Landlord to Tenant
hereunder; (5) post notices of non-responsibility; (6) post "to Lease" signs of
reasonable size upon the premises during the last 90 day of the term hereof; and
(7) make repairs required of Landlord under the terms hereof or repairs to any
adjoining space or utility services or make repairs, alterations or additions to
the premises or any other portion of the Building, provided, however, that all
such work shall be done as promptly as reasonably possible and so as to cause as
little interference to Tenant as reasonably possible and that any repairs,
alterations, or additions to the premises shall, when completed, not materially
and adversely affect Tenant's use of the premises. Tenant hereby waives any
claim for damages for any injury or inconvenience to or interference with
Tenant's business and any loss of occupancy or quiet enjoyment of the premises
Landlord shall at all times have and retain a key with which to unlock all of
the doors in, on or about the premises (excluding Tenant's vaults, safes and
similar areas designated in writing by Tenant in advance) and Landlord shall
have the right to use any and all means which Landlord may deem proper to open
such doors in an emergency in order to obtain entry to the premises. Any entry
to the premises obtained by Landlord by any of such means, or otherwise, shall
not under any circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the premises or an eviction, actual or constructive,
of tenant from the premises, or any portion thereof.
22. Default. If: (1) Tenant shall fail to pay any rent or other sum payable
hereunder for a period of 5 days after written notice from Landlord and the same
is due; (2) Tenant shall fail to observe, keep or perform any of the other
terms, covenants, agreements or conditions contained herein or in the rules and
regulations to be observed or performed by Tenant and such default continues for
a period of 30 days after notice by Landlord or beyond the time reasonably
necessary for cure if such default is of a nature to require in excess of 30
days to remedy-, (3) Tenant shall become banknipt or insolvent or make a
transfer if fraud of creditors, or make an assignment for the benefit of
creditors, or take or have taken against Tenant any proceedings of any kind
under any provision of the Federal Bankruptcy Act or under any other insolvency,
bankruptcy or reorganization act or, in the event any such proceedings are
involuntary, such involuntary proceedings are not dismissed within 60 days
thereafter-, (4) a receiver is appointed for a substantial part of
22
the assets of Tenant; (5) Tenant shall vacate or abandon the premises; or (6)
this Lease or any interest of Tenant hereunder shall be levied upon by any
attachment or execution, then any such event shall constitute an event of
default by Tenant. Upon the occurrence of any event of default by Tenant
hereunder, Landlord may, at its option and without any further notice or demand,
in addition to 3ny other rights and remedies given hereunder or by law, do any
of the following:
(a) Landlord shall have the right, so long as such default continues, to
give notice of termination to Tenant. On the date specified in such notice
(which shall not be less than 3 days after the giving of such notice) this Lease
shall terminate.
(b) In the event of any such termination of this Lease, Landlord may then
or at any time thereafter, re-enter the premises and remove therefrom all
persons and property and again repossess and enjoy the premises, without
prejudice to any other remedies that Landlord may have by reason of Tenant's
default or of such termination.
(c) The amount of damages which Landlord may recover in event of such
termination shall include, without limitation, (1) the amount at the time of
award of (A) unpaid rental earned and other sums owed by Tenant to Landlord
hereunder, as of the time of termination, together with interest thereon as
provided on this Lease, (B) the amount by which the unpaid rent which would have
been earned during the period from termination until the award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided and
(C) the amount by which the unpaid rent for the balance of the term after the
time of the award exceeds the amount of such rental loss that Tenant proves
could be reasonably avoided (computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
percent), (2) all legal expenses and other related costs incurred by Landlord
following Tenant's default including reasonable attorneys' fees incurred in
collecting any amount owed hereunder, (3) all costs incurred by Landlord in
restoring the premises to good order and condition, or in remodeling, renovating
or otherwise preparing tile premises for relenting, and (4) all costs (including
without limitation any brokerage commissions) incurred by Landlord in teletting
the premises. For the purpose o(determining the unpaid rent in the event of a
termination of this Lease, the monthly rent reserved in this Lease shall be
deemed to be the sum of (1) the minimum rent and (2) the Operating Expense
charge and any other amounts last payable by Tenant pursuant to Paragraphs 5, 6,
7, 10, 13, and 16 above.
(d) Following tile termination of this Lease or Tenant's right of
possession hereunder (or upon Tenant's failure to remove its personal property
from the premises after the expiration of the term of the Lease), Landlord may
remove its personal property from the premises after the expiration of the term
of such property in a public or private warehouse or elsewhere at the sole cost
and expense of Tenant; such warehouser shall have all rights and remedies
provided by law against Tenant as the owner of such
23
property. In addition, in the event that Tenant shall not immediately pay the
cost of storage of such property after the same has been stored for a period of
30 days or more, Landlord may sell any or all thereof at a public or private
sale in such manner and at such times and places as Landlord in its sole
discretion may deem proper, without notice to or demand upon Tenant. Tenant
waives all claims for damages that may be caused by Landlord's removing or
storing or selling the property as herein provided, and Tenants shall indemnify
and hold Landlord free and harmless for, from and against any and all losses,
costs and damages, including without limitation all costs of court and
attorneys' fees of Landlord occasioned thereby.
(e) Landlord shall have the right to cause a receiver to be appointed in
any action against Tenant to take possession of the premises and to collect the
rents or profits derived therefrom. The appointment of such receiver shall not
constitute an election on the part oflandiord to terminate this Lease unless
notice of such intention is given to Tenant.
(f) Even though Tenant has breached this Lease and/or abandoned tile
premises, this Lease shall continue in effect for so long as Landlord does not
terminate this Lease, and Landlord may enforce all its rights and remedies under
this Lease, including the right to recover the rental in periodic actions as it
becomes due under this Lease. In such event, Landlord may re-enter the premises
and remove all persons and property if the premises have not been vacated, using
any available summary proceedings, without such re-entry or removal being deemed
a termination or acceptance of surrender of this Lease. Landlord may then elect
to relet the premises for the account of tenant for a period which may extend
beyond the term hereof, and upon such other ten- ns as Landlord may reasonably
deem appropriate. Tenant shall reimburse Landlord upon demand for all costs
incurred by Landlord in connection with such reletting, including, without
limitation, necessary restoration, renovation, or improvement costs, reasonable
attorneys' fees and brokerage commissions. The proceed of such reletting shall
be applied first to any sums then due and payable Landlord from Tenant,
including the reimbursement described above. In balance, if any, shall be
applied to the payment of future rent as it becomes due hereunder.
23. Landlord's Right to Cure Default. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be at its sole
cost and expense and without any abatement of rent. If Tenant shall fail to pay
any sum of money, other than rent, required to be paid by it hereunder or shall
fail to perform any other act on its part to be performed hereunder and such
failure shall have become an event of default tinder paragraph 22 above,
Landlord may, but shall not be obligated to do so, and without waiving or
releasing Tenant from any obligations of tenant, make any such payment or
perform any such other act on Tenant's part to be made or performed as in this
Lease provided. All sums so paid by Landlord and all necessary incidental costs
shall be deemed additional rent hereunder and shall be payable to Landlord on
demand together
24
with Default Interest from the date of expenditure by Landlord until repaid.
24. Attorneys' Fees. If as a result of any breach or default in the performance
of any of the provisions of this Lease or in order to enforce its rights
hereunder, Landlord uses the services of an attorney in a nonjudicial action, at
trial, or upon an appeal, to secure compliance with such provisions or recover
damages therefor, to exercise such rights, or to terminate this Lease or evict
Tenant, Tenant shall reimburse Landlord upon demand for any and 211 reasonable
attorneys' fees and expenses so incurred by Landlord. If tenant shall be the
prevailing party in any legal action brought by Landlord against Tenant, Tenant
shall be entitled to recover for tile fees of its attorneys in such amount as
the court may adjudge reasonable. Tenant, to the extent permitted by law, does
hereby waive any further right to attorneys' fees provided by applicable state
or federal law.
25. Subordination.
(a) This Lease shall be subject and subordinated at all times to all ground
or underlying leases which may hereafter be executed affecting the Building, and
the lien of all mortgages and deeds of trust in any amount or amounts whatsoever
now or hereafter placed on or against the Building or on or against Landlord's
interest or estate therein or on or against all such ground or underlying
leases, all without the necessity of having further instruments executed on the
part of Tenant to effectuate such subordination. Notwithstanding the foregoing
(1) in the event of termination for any reason whatsoever of any ground or
underlying lease hereafter executed, this Lease shall not be barred, terminated,
cut off or foreclosed nor shall the rights and possession of tenant hereunder be
disturbed if tenant shall not then be in default in the payment of rental or
other sums or be otherwise in default under the terms of this Lease, and Tenant
shall attorn to the Landlord of any such ground or underlying Lease, or, if
requested, enter into a new lease for the balance of the original or extended
term hereof then remaining upon the same terms and provisions as are in this
Lease contained; (2) in the event of a foreclosure of any such mortgage or deed
of trust hereafter executed or of any other action or proceeding for the
enforcement thereof, or of any sale thereunder, this Lease will not be barred,
terminated, cut off or foreclosed nor will the rights and possession oftenant
thereunder be disturbed if Tenant shall not then be in default in the payment of
rental or other sums or be otherwise in default tinder the terms of this Lease,
and Tenant shall attom to the purchaser at such foreclosure, sale or other
action or proceeding; and (3) Tenant agrees to execute and deliver upon demand
such further reasonable instruments evidencing such subordination of this lease,
ground or underlying leases, and to the lien of any such mortgages or deed of
mist as may reasonably be required by Landlord. Tenant's covenant to subordinate
this Lease to ground or underlying leases, and mortgages or deeds of trust
hereafter executed is conditioned upon each such senior instrument containing
the commitments specified in the preceding clauses (1) and (2); and (4) Tenant
further waives the provisions of any statute of rule of law, now or hereafter in
25
effect, which may give or purport to give Tenant any right or election to
terminate or otherwise adversely affect the Lease and the obligations of Tenant
hereunder in the event of such foreclosure or sale.
(b) Tenant shall mail by certified or registered post, return receipt
requested, or personally deliver to any Landlord under a ground lease or
mortgage lender a duplicate copy of any and all notices in writing which Tenant
may from time to time give to or serve upon Landlord pursuant of the provisions
of this Lease, and such copy shall be mailed or delivered at, or as near as
possible to, the same time such notices are given or served by Tenant. No notice
by Tenant to Landlord hereunder shall be deemed to have been given unless and
until a copy thereof shall have been so mailed or delivered to any ground lease
landlord or mortgage lender. Upon the execution of any ground lease or mortgage,
Tenant shall be informed in writing of the vesting of the interest evidenced by
the ground lease or mortgage.
(c) Should any event of default by Landlord under this Lease occur, any
ground lease landlord or mortgage lender shall have 30 days after receipt of
written notice from Tenant sening forth the nature of such event of default
within which to remedy the default; provided that in the case of a default which
cannot with due diligence be cured within such 30-day period, the ground lease
landlord or mortgage lender shall have the additional time reasonably necessary
to accomplish the cure, provided that (i) it has conunenced the curing within
such 30 days and (ii) thereafter diligently prosecutes the cure to completion.
If the default is such that the possession of the premises may be reasonably
necessary to remedy the default, any ground lease landlord or mortgage lender
shall have a reasonable additional time after the expiration of such 30-day
period within which to remedy such default, provided that (i) it shall have
fully cured any default in the payment of any monetary obligations of Landlord
under this Lease within 30 day period and shall continue to pay currently such
monetary obligations as and when the same are due and (ii) it shall have
acquired Landiord's estate or commenced foreclosure or other appropriate
proceedings within such period, or prior thereto, and is diligently prosecuting
any such proceedings.
26. No Merger. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not work a merger, and shall, at the option
of Landlord, terminate all or any existing subleases or stibtenancies, or may,
at the option of Landlord. operate as a assignment to it of any or all such
subleases or subtenancies.
27. Sale by Landlord. In the event the original Landlord hereunder, or any
successor owner of the Building, shall sell or convey the Building, all
liabilities and obligations on the part of the original Landlord, or such
successor owner, under this Lease accruing thereafter shall terminate, and
thereupon all such liabilities and obligations shall be binding upon the new
owner. Tenant agrees to attorn to such new owner.
26
28. Estoppel Certificate. At any time from time to time, but on not less than
10 days prior notice by Landlord, Tenant will execute, acknowledge and deliver
to Landlord, promptly upon request, a certificate certifying (a) that this Lease
is unmodified and in full force and effect (or, if there have been
modifications, that his Lease is in full force andeffect, as modified, and
stating the date and nature of each such modification), lb) the date, if any, to
which rental and other sums payable hereunder have been paid, (c) that no notice
has been received by tenant of any default which has not been cured, except as
to defaults specified in said certificate, and (d) such other matters as may be
reasonably requested by Landlord. Tenant hereby appoints Landlord as Tenant's
atiomey-in-fact to execute, acknowledge and deliver such certificate if Tenant
shall fail to do so within the above-prescribed time penod. Any such certificate
may be relied upon by any prospective purchaser, mortgagee of beneficiary under
any deed or trust of the Building.
29. Holdover Tenancy. If, without objection by Landlord, Tenant holds
possession of the premises after expiration of the term of this Lease, Tenant
shall become a Tenant from month to month upon all of the terms specified in
ibis Lease as applicable immediately prior to expiration of such term, except
that minimum rent will be 150% of that applicable immediately prior to
expiration of such term. Each party shall give the other notice of its intention
to terminate such tenancy at least one month prior to the date of such
termination.
30. Building Security.
(a) Landlord shall have the right, but not the obligation, from time to
time to adopt such policies, procedures and programs as it shall deem necessary
or appropriate for the security of the Building, and Tenant shall cooperate with
Landlord in tile enforcement of the policies, procedures and programs adopted by
Landlord.
(b) Without limiting the generality of subparagraph (a) above, Landlord
reserves the right to exclude from the 13iiilding between the hours of 6 p.m.
and 7 a.m. and at all hours on Saturdays, Sundays and holidays all persons who
do not present a valid pass to the Building. If Landlord does elect to adopt
such pass system, Landlord shall fumish passes to persons for whom Tenant
requests the same in writing, and Tenant shall be responsible for all person for
whom it request passes and shall be liable to Landlord for all acts of such
persons. Landlord shall in no case be liable for damages for any error with
regard to the admission to or exclusion form the Building of any person. In case
of invasion, mob, riot, public demonstration or other circumstances rendering
such action advisable in Landiord's opinion, Landlord reserves the right to
prevent access to the Bkii[ding during the continuance of the same by such
action as Landlord may deem appropriate, including closing doors.
(c) In the event of any picketing, public demonstration or other threat to
the security of the Building that is directly attributable to Tenant, Tenant
shall reimburse
27
Landlord for any costs incurred by Landlord in connection with such picketing,
demonstration or other threat in order to protect the security of the Building.
31. Parking.
(a) Any parking areas appurtenant or within the Building, or designated
portions thereof, shall be available for the use of Tenants of the Building,
and, to the extent designated by Landlord, the employees, agents, customers and
invitees of said tenants, subject to the rules, regulations, charges, and rates
as set forth by the Landlord from time to time; provided, however, that Landlord
may restrict to certain portions of the parking areas, parking for Tenant or
other tenants of the Building and their employees and agents, and may designate
other areas to be used only by customers and invitees of Tenants of the
Building. Notwithstanding anything herein contained, Landlord reserves the right
from time to time to make reasonable changes in ,additions to, and deletions
from parking areas as now or hereafter constituted.
(b) Landlord, or its agents, shall have the right to cause to be removed
any cars, trucks, trailers or other motorized or nonmotorized vehicles of
tenants, its employees, agents, guests or invitees that are parked in violation
hereof or in violation of regulations of the Building, without liability of any
kind to Landlord, its agents or employees, and Tenant agrees to hold Landlord
harmless from and defend it against any and all claims, losses, or damages and
demands asserted or arising in respect to or in connection with the removal of
any such vehicles as aforesaid. Tenant shall from time to time upon request of
Landlord supply Landlord with a list of license plate numbers of all vehicles
owned by its employees and agents who are to have parking privileges hereunder.
Landlord may, as a part of the regulations promulgated by it for the use of the
parking areas, require that Tenant cause any identification sticker issued by
Landlord to be affixed to the bumpers or other designated location on all
vehicles of tenant and its employees and agents who are authorized to park in
the parking areas.
32. Security Deposit. Tenant has deposited with Landlord the Security Deposit
sum specified in the Basic Lease Information (the 'Deposit'). The Deposit shall
be held by Landlord as security for the faithful performance by Tenant of all of
the provisions of the Lease to be performed or observed by Tenant. If Tenant
fails to pay rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Landlord may use, apply or retain all or
any portion of the Deposit for the payment of any rent or other charge in
default or for reason of Tenant's default, or compensate Landlord for any loss
or damage which Landlord may suffer thereby. If Landlord so uses or applies all
or any portion of the Deposit, Tenant shall within ten (10) days after demand
therefor deposit cash with Landlord in an amount sufficient to restore the
Deposit to the full amount thereof and Tenant's failure to do so shall be a
material breach of this Lease.
28
Landlord shall not be required to keep the Deposit separate from its general
accounts. If Tenant performs all of Tenant's obligations hereunder, the Deposit,
or so much thereof as has not theretofore been applied by Landlord, shall be
returned, without payment of interest or other increment for its use, to Tenant
(or, at Landlord's option, to the last assignee, if any, of Tenant's interest
hereunder) at the expiration of the Term hereof, and after Tenant has vacated
the Premises. No trust relationship is created herein between Landlord and
Tenant with respect to the Deposit.
33. No Partnership. It is expressly understood that Landlord does not, in any
way or for any purpose, become a partner of Tenant in the conduct of its
business, or otherwise, or joint vent-,ire or a member of a joint enterprise
with Tenant.
34. Recording. Tenant shall not record this Lease without the prior written
consent of Landlord.
35. Modification and Financing Conditions. Landlord has obtained financing and
may seek to obtain further financing for the Building, portions thereof, and the
operation thereof, secured by mortgages or deeds of trust encumbering the
Building. Landlord may also elect to enter into a ground lease of the Building.
If any mortgage lender should require, as a condition to such financing, or
pursuant to rights of approval set forth in tile mortgage or deed of trust
encumbering the Building, or if any ground lease should require, as a condition
to such ground lease or pursuant to rights of approval set forth therein, any
modification of the terms or conditions of this Lease, Tenant agrees to execute
such modification or amendment, provided that, such modification or amendment
(a) shall not increase the rental or Tenant's share of any costs in addition to
minimum rent or increase any other Tenant obligation or reduce any right under
the terms hereof which are not provided for hereunder, (b) shall not materially
interfere with Tenant's use or occupancy, and (c) if requested by a mortgage
lender with a lien on the Building or a ground lessee pursuant to a ground lease
effective as of the date hereof, shall have been requested prior to 30 days
after the date hereof. If Tenant should refuse to execute any modifications so
required within 10 days after receipt of same, Landlord shall have the right by
notice to Tenant to cancel this Lease, and upon such cancellation Landlord shall
refund any unearned rental or security deposit, and neither party shall have any
liability thereafter accruing under this Lease, except as provided in paragraph
15 above.
36. Waiver. The waiver by Landlord of any term, covenant, agreement or
condition herein contained shall not be deemed to be a waiver of any other then
existing or subsequent breach of the same of any other term, covenant, agreement
or condition herein contained. Nor shall any custom or practice which may
develop between the parties in the administration of the terms hereof be
construed to waive or to lessen the right of the Landlord to insist upon the
performance by Tenant in strict accordance with such terms. The subsequent
acceptance of rent or any other sum of money or other performance hereunder by
Landlord shall not be deemed to be waiver of any preceding
29
breach by Tenant of any term, covenant, agreement or condition of this Lease,
other than the failure of Tenant to pay tile particular rent or other sum so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent or other sum or performance.
37. Notices and Consents. All notices, demand, consents or approval which may
be given by either parry to the other hereunder shall be in writing and shall be
deemed to have been fully given when deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid, and
addressed as follows: to Tenant at the address specified in the Basic Lease
Information, or to such other place as Tenant may from time to time designate in
a notice to Landlord; to Landlord at the address specified in the Basic Lease
Information, or to such place as Landlord may from time to time designate in a
notice to Tenant; or, in case of Tenant, delivered to Tenant at the premises.
Tenant hereby appoints as its agent to receive the service of all dispossessory
or restraint proceedings and notices thereunder and person or persons in charge
of our occupying the premises at the time, and, if no person shall be in charge
of or occupying the same, then such service may be made by attaching tile same
on the main entrance of the premises.
38. Complete Agreement. There are no oral agreements between Landlord and
Tenant affecting this Lease, and this Lease supersedes and cancels any and all
previous negotiation, arrangements, brochures, agreements and understandings, if
any, between Landlord and Tenant or displayed by Landlord to Tenant with respect
tot the subject matter of this Lease or the Building. 'Mere are no
representations between Landlord and Tenant other than those contained in this
Lease and all reliance with respect to any representations is solely upon the
representations contained herein. This lease may not be amended or modified in
any respect whatsoever except by an instrument in writing signed by Landlord and
Tenant.
39. Corporate Authority. If Tenant signs as a corporation, each of the person
executing this Lease on behalf of the Tenant does hereby covenant and warrant
that Tenant is a 4uly authorized and existing corporation, that Tenant is
qualified to do business in the State in which the Building s situated, that the
corporation has full right and authority to enter into this Lease. and that each
person signing on behalf of the corporation is authorized to do so.
40. Limits to Tenant's Remedy. If Landlord should default in the performance of
its obligations hereunder, it is understood and agreed that any claims by Tenant
against Landlord shall be limited in recourse to Landlord's interest in the
Building. Tenant expressly waives any and all rights otherwise to proceed on a
recourse basis against Landlord, tile individual partners of Landlord, or the
officers, directors and shareholders of any corporate partner of Landlord.
41. Brokers. Tenant warrants that it has had no dealings with any real estate
broker or
30
agents in connection with tile location or negotiation of this Lease other than
any broker or agent identified in paragraph 45 below.
42. No Light and Air Easement. No diminution or shutting off of light, air, or
view by any structure which may be erected on land adjacent to or in the
vicinity of the Building shall in any way affect this Lease or impose any
liability on Landlord.
43. Miscellaneous. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. If there be more that one Tenant,
tile obligations hereunder imposed upon Tenant shall be joint and several. Time
is of the essence of this Lease and each and all of its provisions. Submission
of this instrument for examination or signature by Tenant does not constitute a
reservation of or option for lease, and it is not effective as a lease or
otherwise until execution and delivery by both Landlord and Tenant. The terms,
covenants, agreements and conditions herein contained shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of the parties hereto. lf any provisions of this
Lease shall be determined to be illegal or unenforceable, such determination
shall not affect any other provisions of this Lease and all such other
provisions shall remain in full force and effect. Landlord and Tenant agree that
each parry and its counsel have reviewed this Lease and that the normal rule of
construction to the effect that ambiguities are to be resolved against the
drafting party is not appropriate and shall be governed by and construed
pursuant to the laws of the State in which the Building is situated.
31
Exhibit A
Schedule A 31885-D
Page 2
5. THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED AS FOLLOWS:
That portion of the southeast quarter of the northeast quarter of
Section 29, Township 25 North, Range 5 East, W.M., in King County,
Washington, described as follows:
Commencing at the southwest corner of the southeast quarter of the
northeast quarter of said Section 29;
thence south 88'30'24' east along the south line of said
subdivision 50.00 feet to the easterly margin of 112th
Avenue Northeast (S.S.H. Number 2-A) and the point of beginning;
thence north 01'16'26" east along said easterly margin 859.41 feet;
thence south 88'43'37" east 111.50 feet; thence south 47'40'00" east
70.00 feet;
thence south 77'00100' east 167.42 feet to the westerly margin of
Interstate 405 (P.S.H. Number 1-R.E.);
thence southerly along said westerly margin by the following courses and
distances:
south 02'45'43' west 212.79 feet;
south 09'19'44' east 305.00 feet;
south 01'03'36" west 268.35 feet to the south line of said
southeast quarter of the northeast quarter of Section 29;
thence north 88'30'24" west along said line 379.81 feet to the point of
beginning;
ALSO known as Lot Number 3 of City of Bellevue Short Plat Number 79-20, as
recorded under Recording Number 7905221049, being a revision of City of
Bellevue Short Plat Numbers 79-02 and 78-63, as recorded under Recording
Numbers 7901160937 and 7809150288, respectively.
32
EXHIBIT C
Rules and Regulations
1. The sidewalks, halls, passages, exists, entrances, elevators and stairways
of the Building shall not be obstructed by any of the Tenants or used by them
for any purpose other than for ingress to and egress from their respective
premises. The halls, passages, exists, entrances, elevators, and stairways are
not for the general public, and Landlord shall in all cases retain the right to
control and prevent access thereto of all persons whose presence in the judgment
of Landlord would be prejudicial to the safety, character, reputation and
interests of the Building and its Tenants, provided that nothing herein
contained shall be construed to prevent such access to persons with whom any
Tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. No Tenant and no employee or invitee
of any Tenant shall go upon the roof of the Building.
2. No sign, placard, picture, name, advertisement or notice visible from the
exterior of any Tenant's premises shall be inscribed, painted, affixed or
otherwise displayed by any Tenant on any part of the Building without the prior
written consent of Landlord. Landlord will adapt and furnish to Tenant general
guidelines relating to signs inside tile Building on the office floors. Tenant
agrees to conform to such guidelines, but may request approval of Landlord for
modifications, which approval will not be unreasonably withheld. All approved
signs or lettering on doors shall be printed, painted, affixed or inscribed at
the expense of the Tenant by a person approved by Landlord, which approval will
not be unreasonably withheld. Material visible from outside the Building will
not be permitted.
3. No Tenant shall employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the premises, unless other wise agreed to
by Landlord in writing. Except with the written consent of Landlord, no person
or persons other than those approved by Landlord shall be permitted to enter the
Building for tile purpose of cleaning the same. No Tenant shall cause any
unnecessary labor by reason of such Tenant's carelessness or indifference in
tile preservation of good order and cleanliness. Janitor service will not be
furnished on nights when rooms are occupied after 9:30 P.M. unless, by agreement
in writing, service is extended to a later hour for specifically designated
rooms.
4. The premises shall not be used for lodging or the storage of merchandise
held for sale to the public, and unless ancillary to a restaurant or other food
service use specifically authorized in the lease of a particular Tenant, no
cooking shall be done or permitted by any Tenant on the premises, except that
the preparation of coffee, tea, hot chocolate and similar items for Tenants and
their employees shall be permitted.
5. Landlord will furnish each Tenant with two keys free of charge. Landlord
may make reasonable charge for any additional keys. No Tenant shall have any
keys made. No
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Tenant shall alter any lock or install a new or additional lock or any bolt on
any door of its premises without the prior consent of Landlord. Each Tenant
shall in each case furnish Landlord with a key for any such lock. Each Tenant
upon the termination of its tenancy, shall deliver to Landlord all keys to doors
in the Building which shall have been furnished to Tenant. Each Tenant shall see
that the doors of its premises are closed and securely locked at such times as
Tenant's employees leave the premises.
6. No Tenant shall use or keep in the premises or the Building any kerosene,
gasoline or inflammable or combustible fluid or material or use any method of
heating or air conditioning other than that supplied by Landlord, No Tenant
shall use, keep or permit to be used or kept any foreign or noxious gas or
substance in the premises, or permit or suffer the premises to be occupied or
used in a manner offensive or objectionable to Landlord or other occupants of
the Building by reason of noise, odors, or vibrations. or interfere in any way
with other Tenants or those having business therein.
7. In the case of invasion, mob, riot, public excitement, or other
circumstances rendering such action advisable in Landlord's opinion, Landlord
reserves the right to prevent access to the Building during the continuance of
the same by such an action as Landlord may deem appropriate. including closing
entrances to the Building.
8. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown therein. The expense
of any breakage, stoppage of damage resulting from the violation of this rule
shall be borne by the Tenant who, or whose employees or invitees, shall have
caused it.
9. Except with prior consent of Landlord, no Tenant shall sell, or permit the
sale in the premises or use or permit the use of any common area for the sale of
newspapers, magazines, periodicals, theater tickets or any other goods
merchandise or service. Tenant shall not carry on, or permit or allow any
employee or other person to carry on the business of stenography, typewriting,
or any similar business in or from the premises for the service or accommodation
of occupants of any other portion of the Building, nor shall the premises of any
Tenant be used for manufacturing of any kid, or any business or activity other
than that specifically provided for in such Tenant's lease.
10. Tenant shall not use any advertising media which may be heard outside of
the premises and Tenant shall not place or permit the placement of any radio or
television, or other communications antenna, loudspeaker, sound amplifier,
phonograph, searchlight, flashing light or other device of any nature on the
roof or outside of the boundaries of the premises (except for Tenant's approved
identification sign or signs) or at any place where the same may be seen or
heard outside of the premises.
11. All loading and unloading of merchandise, supplies, materials, garbage and
refuse
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shall be made only throng such entryways and elevators and at such times as
Landlord shall designate. In its use of the loading areas the Tenant shall not
obstruct or permit the obstruction of said loading area and at no time shall
park or allow its officers, agents or employees to park vehicles therein except
for leading and unloading.
12. Landlord shall have the right, exercisable without notice and without
liability to any Tenant, to change the name and street address of the Building.
13. The freight elevator shall be available for use by all Tenants in the
Building, subject to such reasonable scheduling as Landlord in its discretion
shall deem appropriate. The persons employed to move such equipment in or out of
the Building must be acceptable to Landlord. Landlord shall have the right to
prescribe the weight, size and position of all equipment, materials, furniture
or other property brought into the Building. Heavy objects shall, if considered
necessary by Landlord, stand on wood strips of such thickness as is necessary to
properly distribute the weight. Landlord will not be responsible for loss of or
damage to any such property from any cause, and all damage done to the Building,
by moving or maintaining such property shall be repaired at the expense of
Tenant.
14. The directory of the Building will be provided for the display of the name
and location of Tenants and a reasonable number of the principal officers,
partners and employees of Tenants, and Landlord reserves the right to exclude
any other names therefrom. Any additional name which Tenant shall desire to
place upon said bulletin board must first be approved by Landlord, and, if so
approved, a charge will be made therefor.
15. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, hangings or decorations shall be attached to, hung or placed in, or
used in connection with any window of the Building without the prior written
consent of Landlord. In any event, with the prior written consent of Landlord,
such items shall be installed on the office side of Landlord's standard window
covering and shall in no way be visible from the exterior of the Building.
16. No Tenant shall obtain for use in the premises, ice, drinking water, food
beverage, towel or other similar services, except at such reasonable hours and
under such reasonable regulations as may be fixed by Landlord.
17. Each Tenant shall see that the doors of its premises are closed and locked
and that all water faucets, water apparatus and utilities are shut of before
Tenant or Tenant's employees leave the premises, so as to prevent waste or
damage, and for any default or carelessness in this regard Tenant shall be
liable for, and shall indemnify Landlord against and hold Landlord harmless for,
from and against all injuries sustained by other tenants or occupants of the
Building or Landlord. On multiple-tenancy floors, all Tenants shall keep the
doors to the Building corridors closed at all times except for ingress and
egress.
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18. No Tenant shall use any portion of the common area for any purpose when the
premises of such Tenant are not open for business or conducting work in
preparation therefor.
19. The requirements of the Tenants will be attended to only upon application
by telephone or in person at the office of the Building. Employees of Landlord
shall not perform any work or do anything outside of their regular duties unless
under special instructions from Landlord.
20. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular Tenant or Tenants, but no such waiver by Landlord
shall, be construed as a waiver of such Rules and Regulations in favor of any
other Tenant or Tenants, nor prevent Landlord from thereafter enforcing any such
Rules and Regulation against any or all of the Tenants of the Building.
21. These Rules and Regulations are in addition to and shall not be construed
to in any way modify, alter or amend, in whole or in part, the terms, covenants,
agreements and conditions of any Lease of premises in the Building.
22. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care and cleanliness of the Building, and for the preservation of good order
herein.
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EXHIBIT D
Guaranty
(Deleted On Purpose)
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Exhibit E
Other Conditions
Landlord agrees, at its sole cost and expense, to have the carpet in the
Premises shampooed prior to the commencement date of this Lease.
Landlord agrees to paint the entire suite as soon as possible to the building
standard color. To the extent Tenant moves into the space prior to the Suite
being painted, Tenant can either not have specific rooms painted or be fully
responsible for damage to any of Tenant's property due to such painting.
Subject to the rights of any other existing tenants at the Property having prior
rights thereto, to the extent Tenant is not in default under the Lease at the
date of its intent to exercise its right to expand, nor has it been in default
under the Lease more than once previously during the Lease term, Tenant shall be
afforded the right to expand into larger space in the Building, if available,
for the period between 12 and 24 months from the commencement date hereof under
the same terms and conditions of this Lease, except for the base rental which
shall be negotiated between Landlord and Tenant and the term shall be for an
additional three years from the commencement date of the expansion space, by
delivering to Landlord written notification of its intent to exercise such right
to expand not later than 15 days after Landlord has given written notice to
Tenant that such space is available in the Building and no other existing tenant
in the Building has a right to lease such space. If, in the event, Tenant
sublets or assigns its interest in this Lease, in part or whole, at any time
prior the commencement of the any such expansion, or in case of any default of
this Lease by Tenant, this expansion right becomes null and void. Should Tenant
exercise its rights to expand and subsequently does expand within the Building,
Tenant may elect to terminate its leasing of Suite C-242. or it may elect to
keep leasing such Suite, as long as Tenant gives Landlord written notice of such
election prior to the lease commencement date of the expansion space. Notices
not delivered in a timely manner shall be deemed to be conclusive that no
election is made herewith.
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PARKING RULES AND REGULATIONS
THESE PARKING RULES AND REGULATIONS supplement the parking requirements for
Hidden Valley Office Park. All Tenants, subtenants, employees, guests, invitees
and customers of Tenants must conform to these Parking Rules and Regulations.
1. To the extent not designated to individual tenants by clearly marked
lettering or numbers on stalls, all uncovered parking spaces are permitted to be
used in common with all Tenant's employees, subtenants, invitees, guests and
customers within the lot of the building which Tenant leases. Parking is not
allowed in areas previously designated for other Tenant use.
2. During the Term hereof Landlord reserves the sole right to institute
controls of all the parking areas serving the Building and its lot including,
but not limited to, changing the methods by which vehicles are parked,
repainting the parking lot, allocating individual space it designated areas for
specific license plate numbers or named Persons or companies, and allocating
visitor only parking, allocating compact car spaces, and issuing parking decals.
3. Tenant's rights and privileges under these Parking Rules and Regulations
are conditioned upon the valid existence of the Lease between Landlord and
Tenant at the Property. Tenant's rights hereunder are also conditioned upon
Tenant not being in default of any provision of said lease nor in default of the
any Rules and Regulations which are incorporated therein.
4. Tenant's rights are further subject to the parking rules and regulations as
follows:
i. Restriction or Removal. Landlord reserves the right to restrict access
to the parking areas of the Building, or to have removed from the parking
areas, at the vehicle owner's expense, any vehicle which, in the opinion of
the Landlord: (a) represents a hazard to the health and welfare of the
tenants of the Building or the general public; (b) is not in operable
condition; (c) contains explosive cargo (other than gasoline or fuel in the
original equipment vehicle tanks); (d) is leaking fluids of any kind,
including water; (e) contains illegal goods or contraband; (f) disregards
the posted speed limit signs or other posted signage; (g) or any other
vehicle normally not considered acceptable in the area of a high quality
office park. Landlord shall park only in such areas or spaces as are
authorized by Landlord. Landlord reserves the right to remove any vehicle
not authorized to park in the classification of parking area in which it is
located. Tenant shall ensure strict compliance with parking areas marked
for the handicapped.
ii. Speed and Traffic Controls. Tenant, its employees, subtenants invitees,
guests
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and customers shall observe all speed and traffic controls established by
Landlord from time to time.
iii. Violations. The vehicles of Tenant's who violate any of the provisions
of these Parking Rules and Regulations may be impounded and/or removed from
the parking facilities at the option of the Landlord of the lot, or
casement area, being violated at the expense of the Tenant.
iv. Changes or Additions to Parking Regulations. Landlord reserves the
right to from time to time to amcnd, modify, expand or change in any way
these Parking Rules and Regulations.
5. Landlord reserves the right to refuse access or to exclude or expel from
said parking areas, to any individual who fails to observe any of the provisions
of these Parking Rules and Regulations.
6. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgement may from time to time be needed for the safety,
care and cleanliness of the parking areas, for the preservation of good order
herein, and for the common well being of the Building's tenants.
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Landlord's Initials Tenant's Initials
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