SUNSET CORPORATE CAMPUS II
BELLEVUE, WASHINGTON
OFFICE LEASE AGREEMENT
BETWEEN
OBAYASHI CORPORATION
a Japan corporation
Landlord
and
THE BOEING COMPANY
a Delaware corporation
Tenant
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OFFICE LEASE AGREEMENT
Sunset Corporate Campus - Building II
TABLE OF CONTENTS
PAGE
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1. LEASE DATA AND EXHIBITS............................................... 1
1.1 Building........................................................ 1
1.2 Premises........................................................ 1
1.3 Usable Area of the Premises; Rentable Area of the Premises...... 1
1.4 Basic Plans Delivery Date....................................... 2
Final Plans Delivery Date....................................... 2
1.5 Commencement Date............................................... 2
1.6 Lease Term...................................................... 2
1.7 Rent............................................................ 2
1.8 Security Deposit................................................ 2
1.9 Parking......................................................... 2
1.10 Notice Addresses................................................ 3
1.11 Payment Addresses............................................... 3
1.12 Exhibits........................................................ 4
1.13 Tenant's Leasing Broker/Agent................................... 4
2. PREMISES.............................................................. 4
3. COMMENCEMENT AND EXPIRATION DATES..................................... 5
3.1 Commencement Date............................................... 5
3.2 Tenant Obligations.............................................. 5
3.3 Tenant Late Possession and Termination Rights................... 5
3.4 Expiration Date................................................. 6
4. ACCEPTANCE OF PREMISES................................................ 6
5. RENT.................................................................. 7
6. SECURITY DEPOSIT...................................................... 7
7. PARKING............................................................... 7
8. USES.................................................................. 8
9. COMMON AREAS AND FACILITIES........................................... 8
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10. SERVICES AND UTILITIES............................................... 9
10.1 Standard Services.............................................. 9
10.2 Interruption of Services....................................... 9
10.3 Additional Services............................................ 10
11. COSTS OF OPERATIONS AND REAL ESTATE TAXES............................ 10
11.1 Additional Rent................................................ 10
11.2 Definitions.................................................... 10
11.3 Estimated Operating Costs...................................... 14
11.4 Actual Operating Costs......................................... 14
11.5 Records and Adjustments........................................ 14
11.6 Personal Property Taxes........................................ 15
12. CARE OF PREMISES..................................................... 15
13. ACCESS............................................................... 15
14. DAMAGE OR DESTRUCTION................................................ 16
14.1 Damage and Repair.............................................. 16
14.2 Destruction During Last Year of Lease Term..................... 16
14.3 Tenant Improvements............................................ 16
15. WAIVER OF CLAIMS AND SUBROGATION..................................... 16
16. INDEMNIFICATION...................................................... 17
16.1 Tenant Indemnity............................................... 17
16.2 Landlord's Indemnity........................................... 18
17. INSURANCE............................................................ 18
17.1 Liability Insurance............................................ 18
17.2 Property Insurance............................................. 18
17.3 Insurance Policy Requirements.................................. 19
18. ASSIGNMENT AND SUBLETTING............................................ 19
18.1 Assignment or Sublease......................................... 19
18.2 Assignee Obligations........................................... 20
18.3 Sublessee Obligations.......................................... 20
19. SIGNS................................................................ 20
20. LIENS AND INSOLVENCY................................................. 21
20.1 Liens.......................................................... 21
20.2 Insolvency..................................................... 21
20.3 Financial Statements........................................... 21
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21. DEFAULT............................................................... 22
21.1 Cumulative Remedies............................................. 22
21.2 Tenant's Right to Cure.......................................... 22
21.3 Abandonment..................................................... 22
21.4 Landlord's Reentry.............................................. 22
21.5 Reletting the Premises.......................................... 23
21.6 Damages......................................................... 23
21.7 Nonpayment of Additional Rent................................... 23
21.8 Landlord's Default.............................................. 24
22. PRIORITY.............................................................. 24
23. SURRENDER OF POSSESSION............................................... 24
24. REMOVAL OF PROPERTY................................................... 25
25. NON-WAIVER............................................................ 25
26. HOLDOVER.............................................................. 25
27. CONDEMNATION.......................................................... 25
27.1 Entire Taking................................................... 25
27.2 Partial Taking.................................................. 26
27.3 Awards and Damages.............................................. 26
28. NOTICES............................................................... 26
29. COSTS AND ATTORNEYS FEES.............................................. 26
30. LANDLORD'S LIABILITY.................................................. 27
31. ESTOPPEL CERTIFICATES................................................. 27
32. TRANSFER OF LANDLORD'S INTEREST....................................... 27
33. RIGHT TO PERFORM...................................................... 27
34. QUIET ENJOYMENT....................................................... 28
35. HAZARDOUS MATERIALS................................................... 28
35.1 Hazardous Substances Use........................................ 28
35.2 Representation.................................................. 28
35.3 Indemnification................................................. 28
35.4 Definition of "Hazardous Substances"............................ 29
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36. TELECOMMUNICATIONS LINES AND EQUIPMENT............................... 34
36.1 Location of Tenant's Equipment and Landlord Consent............ 34
36.2 Electromagnetic Fields......................................... 35
37. RULES AND REGULATIONS................................................ 35
38. GENERAL.............................................................. 35
38.1 Headings....................................................... 35
38.2 Heirs and Assigns.............................................. 35
38.3 Payment of Brokers............................................. 35
38.4 No Partnership................................................. 36
38.5 Severability................................................... 36
38.6 Overdue Payments............................................... 36
38.7 Force Majeure.................................................. 36
38.8 Right to Change Public Spaces.................................. 36
38.9 Governing Law; Venue........................................... 37
38.10 Building Directory............................................. 37
38.11 Building Name.................................................. 37
38.12 Recordation.................................................... 37
38.13 Time of Performance............................................ 37
38.14 Execution Authority............................................ 37
38.15 Addenda and Exhibits........................................... 37
38.16 Entire Agreement............................................... 37
39. PRECONSTRUCTION EXPANSION OPTIONS.................................... C-1
39.1 Building I Expansion Space..................................... C-1
39.2 Building II Expansion Space.................................... C-1
40. OPTION TO LEASE ADDITIONAL SPACE IN BUILDING I....................... C-2
41. EARLY TERMINATION RIGHT.............................................. C-2
42. OPTION TO RENEW...................................................... C-2
42.1 Terms and Conditions........................................... C-2
42.2 Determination of Rent.......................................... C-3
42.3 Procedure for Rent Arbitration................................. C-3
43. RIGHT OF FIRST OFFER IN THE BUILDING................................. C-4
44. NO RELOCATION........................................................ C-5
45. RIGHT TO REDUCE AREA OF PREMISES..................................... C-5
46. TENANT'S RIGHT TO EARLY ENTRY........................................ C-5
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47. REDOCORATING ALLOWANCE............................................... C-5
48. ADDITIONAL BUILDOUT ALLOWANCE........................................ C-6
49. TENANT'S ANTENNAE AND SATELLITE DISHES............................... C-6
EXHIBIT A - FLOOR PLAN OF PREMISES
EXHIBIT B - TENANT IMPROVEMENTS
EXHIBIT C - ADDENDUM TO LEASE
EXHIBIT D - CERTIFICATE OF LEASE INFORMATION
EXHIBIT E - JANITORIAL SPECIFICATIONS FOR BUILDING
EXHIBIT F - BUILDING SIGNAGE POLICY
EXHIBIT G - BUILDING RULES AND REGULATIONS
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OFFICE LEASE AGREEMENT
Sunset Corporate Campus - Building II
THIS LEASE is dated September 30, 1997, between OBAYASHI CORPORATION, a
Japan corporation ("LANDLORD"), and THE BOEING COMPANY, a Delaware corporation,
acting through its Information, Space and Defense Systems Group ("TENANT").
As parties hereto, Landlord and Tenant agree:
1. LEASE DATA AND EXHIBITS. When used in this Lease, the following terms and
phrases shall have the meanings provided in this Section, unless otherwise
specifically stated in this Lease:
1.1 BUILDING. Building and improvements related thereto located on the
real property described in SECTION 2 hereof, known as Sunset Corporate Campus
Building II ("BUILDING") with an address of 13920 Southeast Eastgate Way,
Bellevue, Washington 98005.
1.2 PREMISES. Consisting of the entire second, third and fourth floors of
the Building, as outlined on the floor plan(s) attached hereto as EXHIBIT A,
including tenant improvements, as described in EXHIBIT B, and any additional
spaces in the Building leased to Tenant pursuant to EXHIBIT C.
1.3 USABLE AREA OF THE PREMISES; RENTABLE AREA OF THE PREMISES. Landlord
and Tenant agree that, for purposes of this Lease, the Usable Area of the
Premises is deemed to be approximately 86,000 square feet and the Rentable Area
of the Premises is deemed to be approximately 89,400 square feet of Rentable
Area, pending completion of the Building and the tenant improvements to the
Premises and subject to the possible expansion of the Premises to include the
additional areas referred to in EXHIBIT C. Upon substantial completion of the
Building and the Premises, the Usable Area of the Premises, Rentable Area of the
Premises, and net rentable area of the Building shall be computed by Landlord
and Landlord and Tenant shall sign a certificate stating the agreed figures. In
the event the Usable Area of the Premises or the Rentable Area of the Premises
or the net rentable area of the Building is altered during the Term, Landlord
may adjust the Usable Area of the Premises, Rentable Area of the Premises and
Tenant's pro rata share (as defined in SECTION 11.2 below) to properly reflect
such event. Landlord and Tenant agree that the overall full-floor load factor
representing the difference between Usable Area of the Premises and the Rentable
Area of the Premises shall not exceed 5.01 percent of the Usable Area of the
Premises. All measurements of "USABLE AREA" and "RENTABLE AREA" shall be made by
Landlord and confirmed by Tenant in writing within sixty(60) days after the
Commencement Date in accordance with the most current standards published by the
Building Owners and Managers Association on the date of such measurements. If
Tenant does not provide such
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confirmation or a written objection to Landlord's measurements within such sixty
(60) day period, Landlord's measurements shall be conclusively deemed accurate.
1.4 BASIC PLANS DELIVERY DATE. See EXHIBIT B.
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FINAL PLANS DELIVERY DATE. See EXHIBIT B.
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1.5 COMMENCEMENT DATE. August 1, 1998, or such earlier or later date as
provided in SECTION 3 below, and as set forth on the Certificate of Lease
Information to be signed by the parties promptly following the Commencement
Date.
1.6 LEASE TERM. Seven years, or as otherwise provided in SECTION 3 below
or in EXHIBIT C.
1.7 RENT. Rent shall be payable monthly in accordance with SECTION 5
below. The Rent for the Initial Lease Term shall be as follows:
Years 1 - 3: $24.00 per square foot of Rentable Area of the Premises per
year
Years 4 & 5: $24.50 per square foot of Rentable Area of the Premises per
year
Years 6 & 7: $26.50 per square foot of Rentable Area of the Premises per
year
1.8 SECURITY DEPOSIT. $ -0-
1.9 PARKING. Tenant shall have the right to four automobile parking stalls
per 1,000 square feet of Usable Area of the Premises allocated as follows: (1)
approximately 69% of the parking stalls shall be located in the underground
parking garage adjacent to the Building ("GARAGE PARKING"); (2) approximately
13% of the stalls shall be located in the executive parking portion of the
underground parking garage located directly beneath Building ("EXECUTIVE
PARKING"); and (3) approximately 18% of the parking stalls shall be located on
the surface parking lots located near the Building ("SURFACE PARKING"). Tenant
may elect to take less parking and may designate whether its Garage, Executive
or Surface Parking is to be so reduced upon thirty (30) days' prior written
notice to Landlord, but Tenant shall not have the right to increase the number
of its initial allocated Garage, Executive or Surface Parking spaces without
Landlord's prior written consent. All stalls shall be on an unassigned self-park
(or executive valet) basis (as designated by Landlord from time to time
consistent with this Section) at the prevailing monthly rates established by
Landlord from time to time in accordance with SECTION 7 below; provided,
however, that for the first three hundred sixty-five (365) days of the Lease
Term, Tenant's parking fees have been included in its Rent, and thereafter
Tenant shall be required to purchase permits to park automobiles, with the rates
for each type of parking stall to be in addition to the Rent amounts stated in
SECTION 1.7 or otherwise referred to in this Lease and fixed until the end of
the first full thirty-six (36) calendar months of the Lease Term as follows:
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Garage Parking $20 per stall per month
Executive Parking $35 per stall per month
Surface Parking No charge
Commencing as of the first day of the thirty-seventh (37th) full calendar month
of the Lease Term, the parking permits shall be purchased at Landlord's
published monthly rates for Buildings I and II in the project in which the
Premises are located from time to time in addition to the Rent amounts stated in
Section 1.7 or otherwise referred to in this Lease; provided, however, such
rates for the fourth year of the Lease Term shall not be increased by more than
Fifteen Dollars ($15) per parking stall per month over the initial rates, and
for each of the fifth through seventh years of the Lease Term shall not be
increased by more than Five Dollars ($5.00) per parking stall per month over
such rates for the immediately preceding year. No charge shall be made for
Surface Parking during the initial seven year Lease Term. Landlord agrees that
the parking rates that are charged to Tenant shall be consistent with the rates
charged by Landlord from time to time to a majority of the other tenants in the
project in which the Building is located (excluding any tenants to which parking
rate concessions are provided during the initial months of their tenancy).
1.10 NOTICE ADDRESSES.
Landlord: Obayashi Corporation
c/o Wright Runstad & Company
13810 S.E. Eastgate Way, Suite 180
Bellevue, Washington 98005
with a copy to: O.C. Real Estate Management, Inc.
420 East Third Street, Suite 600
Los Angeles, CA 90013
Attn: Mr. William H. Cunningham, Jr.
Tenant: The Boeing Company
P.O. Box 3999, M/S 46-26
Seattle, WA 98124-2499
Attn: Real Property
1.11 PAYMENT ADDRESSES.
Landlord: Obayashi Corporation
c/o Wright Runstad & Company
13810 S.E. Eastgate Way, Suite 180
Bellevue, Washington 98005
Tenant: The Boeing Company
P.O. Box 3999, M/S 46-26
Seattle, WA 98124-2499
Attn: Real Property
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1.12 EXHIBITS. The following Exhibits or riders are made a part of this
Lease:
Exhibit A - Floor Plan of Premises
Exhibit B - Tenant Improvements
Exhibit C - Addendum to Lease
Exhibit D - Certificate of Lease Information
Exhibit E - Janitorial Specifications for Building
Exhibit F - Building Signage Policy
Exhibit G - Building Rules and Regulations
1.13 TENANT'S LEASING BROKER/AGENT.
Cushman & Wakefield of Washington, Inc.
700 Fifth Avenue, Suite 2700
Seattle, WA 98104
Attn: Gary Danklefsen, Senior Director
2. PREMISES. Landlord does hereby lease to Tenant, and Tenant does hereby
lease from Landlord, upon the terms and conditions herein set forth, the
Premises described in SECTION 1.2 above, as shown on EXHIBIT A attached hereto
and incorporated by this reference, together with rights of ingress and egress
over common areas in the Building located on the land ("Land") more particularly
described as:
LOTS 1, 2, 3, 4, 5 AND TRACT A OF SUNSET RIDGE 1-90 CORPORATE CAMPUS,
A BINDING SITE PLAN, AS PER INSTRUMENT RECORDED UNDER KING COUNTY
RECORDING NO. 9012180243;
EXCEPT THAT PORTION CONVEYED TO THE CITY OF BELLEVUE FOR USE AS A
PUBLIC STREET RECORDED UNDER KING COUNTY RECORDING NO 9101280422;
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
PARCEL II:
AN UNDIVIDED 40% INTEREST IN:
LOT 3 OF CITY OF BELLEVUE BOUNDARY LINE ADJUSTMENT NO. 90-5248
RECORDED UNDER RECORDING NO. 9012049030;
EXCEPT THAT PORTION CONVEYED TO THE CITY OF BELLEVUE FOR USE AS A
PUBLIC STREET RECORDED UNDER KING COUNTY RECORDING NO. 9101280422;
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SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
3. COMMENCEMENT AND EXPIRATION DATES.
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3.1 COMMENCEMENT DATE. Provided that the Premises together with common
facilities for access and service thereto have been substantially completed, the
Commencement Date shall be the date specified in Section 1.5 or such earlier or
later date upon which the Premises and common facilities shall be substantially
completed as may be specified in a notice delivered to Tenant at least thirty
(30) days prior to the Commencement Date specified in such notice; or any
earlier date when the Tenant occupies the Premises for Permitted Uses. In the
event the Commencement Date is established as a later or earlier date than the
date provided in Section 1.5 hereof, Landlord shall confirm the same to Tenant
in writing, which Tenant shall promptly acknowledge in writing. Promptly
following the Commencement Date, the parties shall complete, sign and deliver to
each other a Certificate of Lease Information in the form attached as Exhibit D.
For the purposes of this Agreement, "substantial completion" shall be deemed to
have occurred at such time as (a) Tenant is legally permitted to occupy the
Premises under all applicable government regulations, and (b) Landlord has
completed construction of all of the improvements Initially being made by
Landlord to the Premises to the extent required to conform with the standards of
"substantial completion" promulgated by the American Institute of Architects
(General Conditions of the Contract for Construction, MA Document A201), subject
to completion of "punch list" items.
3.2 TENANT OBLIGATIONS. If completion of the Premises is delayed due to
actions of Tenant or its agents, including without limitation the failure of
Tenant or its agents to fulfill any obligation under this Lease or any Exhibit
hereto, such as Tenant's failure to comply with the Plan Delivery Dates in
Exhibit B, then the Lease shall be deemed to have commenced upon the date when
the Premises would have been substantially completed but for such delay by
Tenant. Landlord shall provide Tenant with written notice of any such actions or
failures.
3.3 TENANT LATE POSSESSION AND TERMINATION RIGHTS. Landlord acknowledges
that delays in the substantial completion of the Building or Premises will cause
substantial harm to Tenant and Tenant's business, and that the resulting damages
will be difficult or impossible to measure. Therefore, if, due to delays from
any cause, except to the extent that such delay is caused by the actions or
omissions of Tenant or its agents, the Building or Premises are not so
substantially completed on August 15, 1998 (with the exception of punch list
items) and subject to the delay provisions of this Section, Landlord shall pay
to Tenant One Thousand Dollars ($1,000) per day thereafter commencing on August
16, 1998, to and including September 15, 1998, and Seventy-five Thousand Dollars
($75,000) for each month thereafter that the Premises are unavailable (prorated
at an equal amount per day up to a maximum of Seventy-five Thousand Dollars
($75,000) per month) which the parties agree is a reasonable estimate of
Tenant's damages resulting from such delay. If this Lease is not executed by
Landlord and Tenant on or before September 1, 1997, then the date on which said
liquidated damages commence shall be postponed for one day for every day between
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September 1, 1997, and the date this Lease is signed by Landlord and Tenant;
provided, however, for the purpose of this sentence, the date of Landlord's
signature shall be deemed to be the earlier of the actual date thereof or five
(5) days after Landlord receives a copy of this Lease executed by Tenant. The
above dates upon which said liquidated damages shall be payable shall each be
extended by up to sixty (60) days to the extent substantial completion of the
Premises is delayed for reasons beyond Landlord's control. There is no
acceleration of the date on which liquidated damages commence if this Lease is
signed prior to September 1, 1997. If Landlord has not made the Premises
available for Tenant's occupancy within six (6) months following August 15, 1998
(or such later date as may result from a delay in the execution of this Lease
under the prior sentence) and such six-month delay in the delivery of the
Premises is not due to actions or omissions of Tenant or its agents, then either
party may terminate this Lease by written notice to the other. Tenant shall also
have the right to terminate this Lease by written notice to Landlord any time
prior to the Commencement Date after it receives written notice from Landlord
that Landlord has determined that it will permanently abandon the construction
of the Building prior to substantial completion, whereupon Tenant's rights to
liquidated damages under this Section shall terminate for any period after the
date of Tenant's notice. If Tenant elects not to give such notice, said damages
shall continue until the date this Lease otherwise terminates. The above-
mentioned liquidated damages and the right to terminate this Lease under this
Section shall be Tenant's sole remedies for delayed delivery or failure to
deliver the Premises, and Tenant shall have no other rights or claims hereunder
at law or in equity.
3.4 EXPIRATION DATE. The Lease shall expire at the end of the last day of
the eighty-fourth (84th) full calendar month of the Lease Term unless renewed in
accordance with Section 42 of Exhibit C.
4. ACCEPTANCE OF PREMISES. The acceptance of the Premises by Tenant shall be
deferred until Landlord informs Tenant of the substantial completion of the
Building and Premises. Tenant shall commence its inspection of the Premises as
soon as practicable thereafter. Within fifteen (15) working days "INSPECTION
PERIOD") after Landlord informs Tenant of such completion, Tenant shall make
such inspection of the Premises as Tenant deems appropriate. Except as otherwise
specified by Tenant in writing to Landlord within the Inspection Period and
except for latent defects not reasonably observable by Tenant, Tenant shall be
deemed to have accepted the Premises in their then condition. If, as a result of
such inspection, Tenant discovers minor deviations or variations from the plans
and specifications for Tenant's improvements which adversely affect Tenant's use
of the Premises or which are inconsistent with the standards ordinarily adhered
to by first-class office buildings in Bellevue, Washington, Tenant shall, during
the Inspection Period, notify Landlord of such deviations. Landlord shall
promptly repair all such items. The existence of such items shall not postpone
the Commencement Date of this Lease or the obligation of Tenant to pay Rent.
5. RENT. Tenant shall pay without notice the Rent and Additional Rent (as
defined in Section 11 and Exhibit C below) without demand, deduction or offset
in lawful money of the United States in advance on or before the first day of
each month at Landlord's Payment Address set forth in Section 1.11 hereof, or to
such other party or at such other place as
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Landlord may hereafter from time to time designate in writing. Rent and
Additional Rent for any partial month at the beginning or end of the Lease Term
shall be prorated in proportion to the number of days in such month. The first
payment of Rent shall include any prorated Rent for the period from the
Commencement Date through the first day of the first full month of the Lease
Term.
6. SECURITY DEPOSIT. No security deposit shall be paid by Tenant in connection
with this Lease unless the same is otherwise agreed to by Tenant or its
successor in interest in writing. Landlord may apply all or any part of any
Security Deposit made or hereafter made by Tenant to the payment of any sum in
default or any other sum which Landlord may be required or may in its reasonable
discretion deem necessary to spend or incur by reason of Tenant's default. In
such event, Tenant shall, within five (5) days of written demand therefor by
Landlord, deposit with Landlord the amount so applied. The amount of the
Security Deposit held by Landlord at the expiration or sooner termination of
this Lease and not applied by Landlord under the provisions of this Section
shall be repaid to Tenant within thirty (30) days after the expiration or sooner
termination of this Lease. Landlord shall not be required to keep any Security
Deposit separate from its general funds and Tenant shall not be entitled to any
interest thereon.
7. PARKING. Tenant shall be entitled to parking spaces as provided in SECTION
1.9 above. All parking spaces are leased to Tenant subject to the rules of
Landlord and the garage operator, and laws, codes and regulations set forth by
authorities having jurisdiction over the Building and Premises. In accordance
with state and city requirements to minimize the use of single occupant vehicles
and to generally reduce parking requirements, Tenant shall participate in
Landlord's transportation management program, provided that Tenant shall not be
subject to any obligation or requirement in connection with Landlord's program
which is in addition to any obligation or requirement otherwise imposed on
Tenant by any governmental agency in connection with any commute trip reduction
or similar regulation. Landlord's program may include providing information and
referral service to Tenant and Tenant's employees regarding bus schedules, car
pooling, van pooling, flex-time and job sharing and may include other
transportation management programs as are deemed appropriate by Landlord from
time-to-time. During Normal Business Hours, as defined in SECTION 10 herein,
Landlord shall make available in or near the Building transient parking for
Tenant's clients and guests. Tenant assumes full financial responsibility for
all parking leased to Tenant or Tenant's employees or used by Tenant's clients
or guests. The parking garage shall be secured by a cardkey access system twenty
four (24) hours per day. At Tenant's option, from and after the end of the first
full twelve (12) calendar months of the Lease Term parking costs shall be added
to Additional Rent rather than invoiced separately.
8. USES. The Premises are to be used only for general office purposes,
including extensive computer use and training purposes ("PERMITTED USES"), and
for no other business or purpose without the prior written consent of Landlord,
which consent may be withheld if Landlord determines that any proposed use is
inconsistent with or detrimental to the maintenance and operation of the
Building as a first-class office building in Bellevue, Washington, or is
inconsistent with any public or private restriction on use of the Premises, the
Building or the Land contained in any statute or ordinances or any lease,
mortgage or
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other agreement or instrument by which the Landlord is bound or to which any of
such property is subject. Tenant shall not commit any act that will increase the
then existing cost of insurance on the Building without Landlord's consent.
Tenant shall promptly pay upon demand the amount of any increase in insurance
costs caused by any act or acts of Tenant. Tenant shall not commit or allow to
be committed any waste upon the Premises, or any public or private nuisance or
other act which disturbs the quiet enjoyment of any other tenant in the Building
or which is unlawful or which will cause any substantial noise, vibration, odor,
smoke or fumes. If Landlord and Tenant shall permit smoking in the Premises,
Tenant shall be required to install, at Tenant's sole cost, special tenant
improvements designed to alleviate the spread of smoke outside the Premises,
including extending demising walls from structure to structure and installing a
dedicated exhaust system for the Premises. If Tenant should disturb the quiet
enjoyment of any other tenant in the Building beyond what is customary in a
Class A office building, Tenant shall provide adequate insulation or take other
action as may be necessary to eliminate the disturbance. Tenant shall comply
with all laws relating to its use, occupancy or alteration of the Premises and
shall observe such reasonable rules and regulations (not inconsistent with the
terms of this Lease) as may be adopted and made available to Tenant by Landlord
from time to time for the safety, care and cleanliness of the Premises or the
Building, and for the preservation of good order therein.
9. COMMON AREAS AND FACILITIES. Landlord gives to Tenant and its agents,
employees, contractors and invitees a nonexclusive license to use the common
areas of the Building subject to Landlord's rights to:
9.1 Establish and enforce reasonable rules and regulations for the
maintenance, management, use and operation of the common areas.
9.2 Close any of the common areas to the extent required in the reasonable
opinion of Landlord to prevent a dedication of any of the common areas or the
accrual of any rights of any person or of the public to the common areas.
9.3 Close any of the common areas temporarily for purposes of cleaning,
maintenance, repair, alterations, improvements or additions.
9.4 Designate other property to become part of the common areas.
9.5 Make changes to the common areas, including, without limitation,
changes in the arrangement and/or location of passageways, doors, doorways,
corridors, elevators, stairs, or toilets; provided, however, Landlord shall not
make any change which will prevent access to the Premises or change the
character of the Building from that of a first-class office building in
Bellevue, Washington.
10. SERVICES AND UTILITIES.
10.1 STANDARD SERVICES. Landlord shall furnish the Premises with
electricity for normal office use, including lighting and operation of low power
usage office machines and the power requirements for the Permitted Uses, water
and elevator service at all times during
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the Lease Term. Landlord shall also provide lamp replacement service for
building standard light fixtures, toilet room supplies, window washing at
reasonable intervals, and customary building janitorial service. The current
customary building janitorial specifications are attached as Exhibit E and may
be amended from time to time by Landlord, consistent with maintaining a Class A
office building in Bellevue, Washington. Tenant shall have the right, upon
thirty (30) days' prior written notice to Landlord, to increase or decrease the
scope of janitorial services from time to time, and any resulting increases or
decreases in Landlord's actual costs of such services shall be paid by or
credited to Tenant, respectively; provided, however, Tenant shall not have the
right to obtain such services from any other provider, and any such increased
service shall be within the services Landlord is reasonably able to provide and
any such decreased service shall not impair Tenant's obligation to maintain the
Premises in a condition typically associated with Class A office buildings. No
janitorial service shall be provided Saturdays, Sundays or legal holidays. The
costs of any janitorial or other service provided by Landlord to Tenant which
are in addition to the services ordinarily provided Building tenants shall be
repaid by Tenant as Additional Rent upon receipt of billings therefor.
From 7:00 a.m. to 6:00 p.m., Monday through Friday, and 8:00 a.m. to 12:00 noon
Saturday, excluding New Years' Day, Memorial Day, July 4th, Labor Day,
Thanksgiving Day and Christmas Day ("NORMAL BUSINESS HOURS"), Landlord shall
furnish heat and air conditioning to the Premises. If requested by Tenant,
Landlord shall furnish heat and air conditioning at times other than Normal
Business Hours and the cost of such services, as established by Landlord from
time to time, shall be paid by Tenant as Additional Rent upon receipt of
billings therefor. Tenant shall have control over activation of heat and air
conditioning within the Premises at times other than Normal Business Hours.
During other than Normal Business Hours, Landlord may restrict access to the
Building in accordance with the Building's security system, provided that,
except when precluded for reasons beyond Landlord's reasonable control, Tenant
shall have at all times during the Lease Term (24 hours of all days) reasonable
access to the Premises. Landlord may provide access to the Building during other
than Normal Business Hours by a cardkey access system with control points at the
garage parking entrance, building front entry, and in the three building
elevator cabs.
10.2 INTERRUPTION OF SERVICES. Landlord shall not be liable for any loss,
injury or damage to person or property caused by or resulting from any
variation, interruption, or failure of any utility services due to any cause
beyond Landlord's reasonable control. No temporary interruption or failure of
such services incident to the making of repairs, alterations or improvements, or
due to accident, strike or conditions or events beyond Landlord's reasonable
control shall be deemed an eviction of Tenant or relieve Tenant from any of
Tenant's obligations hereunder, except if the Premises are not served with
electricity, water, elevator service, heating or air conditioning for any reason
within Landlord's reasonable control for a period of more than forty-eight (48)
consecutive hours, Rent shall abate after such forty-eight (48) hour period to
the extent the same causes any portion of the Premises to be unusable by Tenant
for the Permitted Uses until such time as the Premises are again so usable by
Tenant.
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10.3 ADDITIONAL SERVICES. The Building standard mechanical system is
designed to accommodate heating loads generated by lights using up to 1.2 watts
per square foot and equipment using up to 4.9 watts per square foot. Before
installing lights and equipment in the Premises which in the aggregate exceed
such amount, Tenant shall obtain the written permission of Landlord. Landlord
may refuse to grant such permission unless Tenant shall agree to pay the costs
of Landlord for installation of supplementary air conditioning or electrical
systems as necessitated by such equipment or lights.
In addition, Tenant shall in advance, as Additional Rent on the first day of
each month during the Lease Term, pay Landlord the reasonable amount estimated
by Landlord as the cost of furnishing electricity for the operation of such
equipment or lights and the reasonable amount estimated by Landlord as the cost
of operation and maintenance of supplementary air conditioning units
necessitated by Tenant's use of such equipment or lights. The actual additional
costs of such items shall be determined by Landlord and the amount paid by
Tenant as an estimate shall be adjusted in the same manner in which Estimated
Operating Costs are adjusted to Actual Operating Costs, as provided in SECTIONS
11.3 and 11.4, and subject to the obligation of Landlord to maintain and keep
records and the rights of Tenant in connection with audit of such records
provided in SECTION 11.5. Landlord shall be entitled to install and operate at
Landlord's cost a monitoring/metering system in the Premises to measure the
added demands on electrical, heating, ventilation and air conditioning systems
resulting from such equipment and lights and from Tenant's after-hours heating,
ventilation and air conditioning service requirements. Tenant shall comply with
Landlord's reasonable instructions for the use of blinds and thermostats in the
Building.
11. COSTS OF OPERATIONS AND REAL ESTATE TAXES.
11.1 ADDITIONAL RENT. Tenant shall pay as Additional Rent Tenant's Pro Rata
Share of increases in Operating Costs and Taxes over the actual Operating Costs
and Taxes incurred by Landlord for the calendar year 1998 adjusted to reflect a
fully assessed building and a fill calendar year of expenses (the "BASE
AMOUNT").
11.2 DEFINITIONS. For the purposes of this Section, "TAXES" shall mean
taxes and assessments on real and personal property payable during any calendar
year with respect to the Land, the Building and all property of Landlord, real
or personal, used directly in the operation of the Building and located in or on
the Building; and any assessments upon the Land or the Building for off-site
common area costs, together with any taxes levied or assessed in addition to or
in lieu of any such taxes or any tax upon leasing of the Building or the rents
collected (excluding any net income or franchise tax).
"OPERATING COSTS" shall mean all expenses of Landlord for maintaining,
operating and repairing the Land and Building and the personal property used in
connection therewith, including without limitation insurance premiums,
utilities, customary management fees and other expenses which in accordance with
generally accepted accounting and management practices would be considered an
expense of maintaining, operating or repairing the Building; excluding, however:
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(i) costs of any special services rendered to individual tenants for
which a separate charge is collected by Landlord;
(ii) leasing commissions and other expenses, including legal fees
and disbursements, of obtaining Building tenants;
(iii) costs of improvements required to be capitalized in accordance
with generally accepted accounting principles, except Operating Costs shall
include straight-line amortization over their useful life of capital
improvements (A) made subsequent to initial development of the Building which
are designed with a reasonable probability of improving the operating efficiency
of the Building, or (B) which are incurred because of requirements imposed with
respect to the Building under any amendment to any applicable building, health,
safety, fire, personal disabilities, nondiscrimination or similar law or
regulation ("LAW"), or any new Law, or any new interpretation of a Law;
(iv) costs associated with the operation of any fitness center or
any day care or food services provided by Landlord;
(v) attorneys' fees, costs, disbursements, and other expenses
incurred by Landlord or its agents in connection with disputes with and/or
enforcement of any leases with other tenants, other occupants, or prospective
tenants or other occupants of the Building;
(vi) salaries of executives not involved in the day-to-day
management of the Building;
(vii) franchise taxes or income taxes of Landlord;
(viii) except for such costs for which Tenant is responsible under
Section 11.2(iii)(B) above, costs or expenses (including fines, penalties, and
legal fees) incurred due to violation by Landlord, its employees, agents, and/or
contractors, any tenant (other than Tenant) or other occupant of the Building,
of any terms or conditions of this Lease or of the leases of other tenants in
the Building, and/or of any valid, applicable laws, rules, regulations, and
codes of any federal, state, county, municipal, or other government authority
having jurisdiction over the Building that would not have been incurred but for
such violation by Landlord, its employees, agents, and/or contractors, it being
intended that each party shall be responsible for the costs resulting from its
own violation of such leases and laws, rules, regulations, and codes as such
shall pertain to the Building;
(ix) payments of principal, finance charges, interest, or fees on
debt or amortization of any mortgage, deed of trust, or other debt, and rental
payments (or increases in same) under any ground or underlying lease or leases
(except to the extent that the same may be made to pay or reimburse, or may be
measured by, real estate taxes);
(x) any compensation paid to clerks, attendants or other persons in
any commercial concessions operated by Landlord which are not related to the
operation of the Building;
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(xi) advertising and promotional expenditures that are not
required by law;
(xii) expenses incurred for the correction of any latent or patent
defects in the original construction of the improvements in the Premises or
Building made by Landlord, including any such violations of any building, fire,
electrical, mechanical, safety or other code and any violation of the Americans
with Disabilities Act or any state or local law relating to accessibility;
(xiii) management fees assessed against the Additional Allowance or
to the extent they exceed the lesser of (A) the then prevailing market rate for
management fees paid to third parties for managing Class A office buildings in
Bellevue, Washington, outside of the central business district, or (B) five
percent (5%) of the sum of Rent and Additional Rent;
(xiv) costs of repairs, replacements or other work necessitated by
fire, windstorm, or other casualty to the extent covered by the waiver of claims
provision of this Lease set out in Section 15, or the exercise by governmental
authorities of the right of eminent domain;
(xv) "Tenant allowances," "tenant concessions," workletters and
other costs or expenses (including permit, license, and inspection fees)
incurred in completing, fixturing, furnishing, renovating or otherwise
improving, decorating, or redecorating space for tenants or other occupants of
the Building, or vacant, leasable space in the Building, including space
planning/interior design fees for the same;
(xvi) costs resulting directly from the gross negligence or willful
misconduct of Landlord, its employees, agents, and/or contractors;
(xvii) real estate taxes allocable to the leasehold improvements of
other tenants in the Building;
(xviii) except to the extent Tenant would otherwise be responsible
for the amortized costs thereof pursuant to Section 11.2(iii) if the same had
been purchased, rentals or other related expenses, if any, incurred in leasing
air conditioning systems, elevators, or other equipment ordinarily considered to
be of a capital nature, except equipment which is used in providing janitorial
services and which is not affixed to the Building;
(xix) costs or expenses for sculpture, paintings, or other works of
fine art not typically employed in the common areas of Class A office buildings,
including costs incurred with respect to the purchase, ownership, leasing,
showing, promotion, repair, and/or maintenance of same;
(xx) costs of correcting or repairing defects in any equipment or
in replacing defective equipment to the extent that such costs are covered by
warranties of manufacturers, suppliers, or contractors, or are otherwise borne
by parties other than Landlord;
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(xxi) initial costs of interior and exterior landscaping;
(xxii) costs incurred in removing the property of former tenants
and/or other occupants of the Building other than Tenant;
(xxiii) costs of any "tap fees" or one-time lump sum sewer or water
connection fees assessed in connection with the initial construction of the
Building or any other permit fees, mitigation expenses, exactions or other
assessments levied by any governmental authority as a condition to its approval
of such initial construction;
(xxiv) costs or fees relating to the defense of Landlord's title to
or interest in the Building, the Property, or any part thereof;
(xxv) any inequitable allocation of wages, salaries, and other
compensation and benefits of Landlord's employees' and personnel's work on other
projects, including without limitation, those being periodically developed,
managed, and/or operated by Landlord, in addition to the Building and/or the
Property, among all such projects in reasonable proportions to their time spent
in performing services other than in respect of the Property; or
(xxvi) any costs representing payment to an entity related to
Landlord to the extent that such costs are unreasonable and exceed the fair
market price of goods and services supplied by such related entity.
In the event the average occupancy level of the Building for the base year
and/or any subsequent year was or is not 95% or more of full occupancy, then the
Operating Costs for such year shall be proportionately adjusted by Landlord to
reflect those Operating Costs which would have occurred had the Building been
95% occupied during such year. The foregoing adjustment is intended to eliminate
from consideration changes in total Operating Expenses that result solely from
differences in the occupancy level of the Building.
"TENANT'S PRO RATA SHARE" shall mean a percentage determined by dividing
the Rentable Area of the Premises by the Rentable Area of the Building. If the
Rentable Area of the Premises or the Rentable Area of the Building change,
Tenant's pro rata share shall be adjusted accordingly.
"YEAR" shall mean the calendar year.
11.3 ESTIMATED OPERATING COSTS. At the beginning of each year, Landlord
shall furnish Tenant a written statement of estimated Operating Costs and Taxes
for such year; a calculation of the amount, if any, by which such estimated
Operating Costs and Taxes will exceed the Base Amount; and a calculation of
Tenant's Pro Rata Share of any such amount. Tenant shall pay one-twelfth (1/12)
of said Share as Additional Rent for each month during the year. If at any time
during the year Landlord reasonably believes that the actual Operating Costs and
Taxes will vary from such estimated Operating Costs and Taxes by more than five
percent (5%), Landlord may by written notice to Tenant revise the estimate
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for such year, and Additional Rent for the balance of such year shall be paid
based upon such revised estimates.
11.4 ACTUAL OPERATING COSTS. Within ninety (90) days after the end of each
year or as soon thereafter as practicable, Landlord shall deliver to Tenant a
written statement setting forth Tenant's Pro Rata Share of the actual Operating
Costs and Taxes in excess of the Base Amount during the preceding year. If the
actual Operating Costs and Taxes in excess of the Base Amount exceed the
estimates for such amounts paid by Tenant during the year, Tenant shall pay the
amount of such excess to Landlord as Additional Rent within thirty (30) days
after receipt of such statement. If the actual Operating Costs and Taxes in
excess of the Base Amount are less than the amount paid by Tenant to Landlord,
then the amount of such overpayment by Tenant shall be credited against the next
Additional Rent payable by Tenant hereunder.
11.5 RECORDS AND ADJUSTMENTS. Landlord shall keep records showing all
expenditures made in connection with Operating Costs and Taxes for thirty-six
(36) months thereafter, and such records shall be available for inspection by
Tenant at Tenant's sole cost and expense and upon reasonable prior written
notice to Landlord. Any audit of Landlord's records of Operating Costs and Taxes
shall be performed by an accountant approved by Landlord or by a qualified
employee of Tenant, and shall be completed no later than twelve (12) months
following the end of the year audited. Operating Costs and Taxes shall be
prorated for any portion of a year at the beginning or end of the Lease Term.
Notwithstanding this Section, the Rent payable by Tenant shall in no event be
less than the Rent specified in SECTION 1.7 hereof. If such audit indicates that
the amount charged by Landlord is more than one hundred five percent (105%) of
the amount actually payable by Tenant, Landlord shall be responsible for paying
the costs of the audit and Tenant shall be entitled to audit the two (2)
previous years notwithstanding the expiration of the twelve-month period
referred to above in this SECTION 11.5.
11.6 PERSONAL PROPERTY TAXES. Tenant shall pay all Personal Property Taxes
with respect to Tenant's Property located on the Premises or in the Building.
"TENANT'S PROPERTY" shall include all improvements which are paid for by Tenant
and "PERSONAL PROPERTY TAXES" shall include all property taxes assessed against
Tenant's Property, whether assessed as real or personal property.
12. CARE OF PREMISES. Landlord shall perform all normal maintenance and repairs
to the Premises which Landlord reasonably determines necessary to maintain the
Premises and the Building as a first-class office building; provided that
Landlord shall not be required to maintain or repair any Tenant's Property or
any appliances (such as water heaters, refrigerators, microwaves and the like)
which are part of the Premises (but the foregoing is not intended to relieve
Landlord from its obligation to maintain electrical and plumbing lines supplying
such appliances to the extent such lines are outside of the Premises). Tenant
shall take good care of the Premises. Tenant shall not make any alterations,
additions or improvements ("ALTERATIONS") in or to the Premises, or make changes
to locks on doors, or add, disturb or in any way change any plumbing or wiring
("CHANGES") without first
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obtaining the written consent of Landlord and, where appropriate, in accordance
with plans and specifications approved by Landlord, provided that Tenant may
make Alterations without obtaining the consent of Landlord so long as (a) the
cost of any such Alteration or any similar Alterations in the aggregate does not
exceed Twenty-five Thousand Dollars ($25,000), (b) the Alteration is not to any
structural component of the Building, (c) the Alteration does not involve any
penetration of any floor, ceiling, or structural or exterior wall or affect the
electrical or HVAC systems in the Building, and (d) Tenant adheres to the
requirements of SECTION 4.4 of EXHIBIT B. Any Alterations or Changes required to
be made to the Premises by any amendment to any Law or any new Law shall be made
at Tenant's sole expense and shall be subject to the prior written consent of
Landlord. In such consent, Landlord shall indicate whether or not such
Alternation or Change is to be restored to its original condition at the
termination of this Lease. Tenant shall reimburse Landlord for any reasonable
sums paid to third parties for examination and approval of architectural or
mechanical plans and specifications of the Alterations and Changes and direct
costs reasonably incurred during any inspection or supervision of the
Alterations or Changes. Subject to SECTIONS 14 and 15, all damages or injury
done to the Premises or Building by Tenant or by any persons who may be in or
upon the Premises or Building with the express or implied consent of Tenant,
including but not limited to the cracking or breaking of any glass of windows
and doors, shall be paid for by Tenant.
13. ACCESS. Tenant shall permit Landlord and its agents to enter into and
upon the Premises at all reasonable times and with at least twenty-four (24)
hours' notice for the purpose of inspecting the same or for the purpose of
cleaning, repairing, altering or improving the Premises or the Building. Upon
reasonable notice, which shall not be less than twenty-four (24) hours, Landlord
shall have the right to enter the Premises for the purpose of showing the
Premises to prospective tenants within nine (9) months prior to the expiration
or sooner termination of the Lease Term. Landlord may enter the Premises
without notice in the event of an emergency.
14. DAMAGE OR DESTRUCTION.
14.1 DAMAGE AND REPAIR. If the Building is damaged by fire or any other
cause to such extent that the cost of restoration, as reasonably estimated by
Landlord, will equal or exceed thirty percent (30%) of the replacement value of
the Building (exclusive of foundations) just prior to the occurrence of the
damage, or if insurance proceeds sufficient for restoration are for any reason
unavailable (except for loss deductibles and provided that Landlord has obtained
and maintained the insurance policies required to be maintained by Landlord
pursuant to this Lease), then Landlord may no later than the sixtieth (60th) day
following the damage, give Tenant a notice of election to terminate this Lease.
In the event of such election, this Lease shall be deemed to terminate on the
third day after the giving of such notice, and Tenant shall surrender possession
of the Premises within a reasonable time thereafter, and the Rent and Additional
Rent shall be apportioned as of the date and to the extent such fire or other
cause materially interferes with Tenant's Permitted Uses of the Premises and any
Rent and Additional Rent paid for any period beyond such date shall be repaid to
Tenant. If the cost of restoration as estimated by Landlord shall amount to less
than thirty percent (30%) of said replacement value of the Building and if the
insurance
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proceeds (plus any loss deductibles) are sufficient for restoration are
available (Landlord having obtained and maintained the insurance policies
required to be maintained by Landlord pursuant to this Lease), Landlord shall
restore the Building and the Premises (with improvements substantially
comparable in quality to the improvements to the Premises originally provided by
Landlord hereunder) with reasonable promptness, subject to delays beyond
Landlord's control and delays in the making of insurance adjustments by
Landlord. To the extent that the Premises are rendered untenantable, the Rent
shall proportionately abate, except in the event such damage resulted from or
was contributed to, directly or indirectly, by the act, fault or neglect of
Tenant, Tenant's officers, contractors, agents, employees, clients, customers or
licensees, in which event Rent shall abate only to the extent Landlord receives
proceeds from any rental income insurance policy to compensate Landlord for loss
of Rent hereunder. No damages, compensation or claim shall be payable by
Landlord for inconvenience, loss of business or annoyance arising from any
repair or restoration of any portion of the Premises or the Building.
14.2 DESTRUCTION DURING LAST YEAR OF LEASE TERM. In case the Building shall
be substantially destroyed by fire or other cause at any time during the last
twelve (12) months of the Lease Term, either Landlord or Tenant may terminate
this Lease upon written notice to the other within sixty (60) days of the date
of such destruction.
14.3 TENANT IMPROVEMENTS. Landlord will not be required to carry insurance
of any kind on any improvements paid for by Tenant, with an allowance or
otherwise, as provided in EXHIBIT B or on Tenant's furniture, furnishings,
fixtures, equipment or appurtenances of Tenant under this Lease and Landlord
shall not be obligated to repair any damage thereto or replace the same.
15. WAIVER OF CLAIMS AND SUBROGATION.
15.1 MUTUAL WAIVER OF CLAIMS. Landlord and Tenant do each herewith and
hereby release and relieve the other, and waive their entire claims of recovery
for loss of or damage to Landlord's or Tenant's property arising out of or
incident to fire, lightning, or any other perils normally included in an "All
Risk" property insurance policy when such property constitutes the Premises or
the Building or is in or about the Premises, Building, or land which the
Building is situated, whether or not such loss or damage is due to the
negligence of Landlord or Tenant, their agents, employees, guests, licensees,
invitees, or contractors.
15.2 MUTUAL WAIVER OF SUBROGATION. Each of Landlord and Tenant shall cause
its insurance carriers to waive all rights of subrogation against the other
party hereto to the extent of Landlord's or Tenant's undertaking set forth in
SECTION 16 entitled "Indemnity" and SECTION 15.1 entitled "Mutual Waiver of
Claims."
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16. INDEMNIFICATION.
16.1 TENANT INDEMNITY. Tenant shall indemnify and hold Landlord harmless
from and against any and all claims or liability for bodily injury to or death
of any person or damage to any property arising out of the use of the Premises
or the Building by Tenant or any sublessee, agent, employee, contractor, invitee
or licensee of Tenant or from the conduct of Tenant's business, or from any
activity, work, or thing done, permitted, or suffered by Tenant in or about the
Premises or the Building, except:
(i) to the extent of claims and liabilities caused by the negligent
acts or omissions of Landlord, its agent or employees; or
(ii) claims and liabilities for property damage addressed in SECTION
15.1 entitled "Mutual Waiver of Claims."
Such indemnity shall include all reasonable costs, attorneys' fees, and expenses
incurred in the defense of any such claim or any action or proceeding brought
thereon and any such liability arising during the Lease Term shall survive the
expiration or termination of this Lease. This indemnity will be applicable to a
claim only if Landlord:
(a) notifies Tenant of the claim or liability in writing within
sixty (60) days after Landlord receives written notice of the claim or
liability;
(b) permits Tenant to defend or settle the claim or liability
(unless Landlord is also obligated to indemnify Tenant under SECTION 16.2) so
long as Tenant promptly undertakes such defense or settlement and pursues the
same in good faith and with due diligence; and
(c) cooperates with Tenant at Tenant's expense in any defense or
settlement of the claim or liability.
16.2 LANDLORD'S INDEMNITY. Landlord shall indemnify and hold Tenant
harmless from and against any and all claims or liability for bodily injury to
or death of any person or damage to any property caused by the negligent or
intentionally wrongful acts of Landlord or any agent, employee, contractor,
invitee or licensee of Landlord, except:
(i) to the extent of claims and liabilities caused by the negligent
acts or omissions of Tenant, its sublessees, agents, employees, contractors,
invitees or licensees; or
(ii) claims and liabilities for property damage addressed in Section
15.1 entitled "Mutual Waiver of Claims."
Such indemnity shall include all reasonable costs, attorneys' fees, and expenses
incurred in the defense of any such claim or any action or proceeding brought
thereon and any such liability arising during the Lease Term shall survive the
expiration or termination of this Lease. This indemnity will be applicable to a
claim only if Tenant:
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(a) notifies Landlord of the claim or liability in writing
within sixty (60) days after Tenant receives written notice of the claim or
liability;
(b) permits Landlord to defend or settle the claim or liability
(unless Tenant is also obligated to indemnify Landlord under SECTION 16.1) so
long as Landlord promptly undertakes such defense or settlement and pursues the
same in good faith and with due diligence; and
(c) cooperates with Landlord at Landlord's expense in any
defense or settlement of the claim or liability.
17. INSURANCE.
17.1 LIABILITY INSURANCE. Tenant, at Tenant's own cost and expense, will
provide and keep in full force and effect during the term of this Lease
commercial general liability insurance with limits of not less than Three
Million Dollars ($3,000,000) per occurrence and Five Million Dollars
($5,000,000) in the aggregate, covering bodily injury to persons, including
death and loss of or damage to real and personal property. Such insurance may be
provided under Tenant's general liability insurance policy. During the term of
this Lease, Landlord shall be named as an additional insured under such
insurance to the extent of Tenant's undertaking set forth in SECTION 16,
entitled "Indemnity." A certificate evidencing such insurance coverage shall be
delivered to Landlord not less than fifteen (15) days prior to the commencement
of the Lease Term or the date when Tenant shall enter into possession, whichever
occurs earlier. Such certificate of insurance will provide for thirty (30) days'
advance written notice to Landlord in the event of cancellation.
17.2 PROPERTY INSURANCE. Tenant shall, throughout the Lease Term and any
renewal hereof, at its own expense, keep and maintain in full force and effect,
what is commonly referred to as "All Risk" or "Special" coverage (excluding
earthquake and flood) on Tenant's leasehold improvements for not less than one
hundred percent (100%) of the replacement value, subject to customary and
reasonable deductibles. Landlord shall, throughout the Lease Term and any
renewal hereof, keep and maintain in full force and effect what is commonly
referred to as "All Risk" or "Special" coverage (including earthquake and flood
to the extent Landlord so elects from time to time) on the Building, exclusive
of Tenant's leasehold improvements, for not less than one hundred percent (100%)
of the replacement value, subject to customary and reasonable loss deductibles.
17.3 INSURANCE POLICY REQUIREMENTS. All insurance required under this
Section shall be with companies rated AX or better by A.M. Best or otherwise
reasonably approved by Landlord or Tenant as the case may be. No insurance
policy required under this Section shall be canceled or reduced in coverage
except after thirty (30) days prior written notice to Landlord or Tenant, as the
case may be.
All policies required under this Section shall be written as primary
policies and not contributing to or in excess of any coverage Landlord, as the
case may be, may choose to maintain.
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18. ASSIGNMENT AND SUBLETTING.
18.1 ASSIGNMENT OR SUBLEASE. Tenant shall not assign, mortgage, encumber or
otherwise transfer this Lease or sublet the whole or any part of the Premises
without in each case first obtaining Landlord's prior written consent. Such
consent shall not be unreasonably withheld or delayed except: (1) Landlord may
withhold its consent if the assignee, subtenant or other transferee will not use
the Premises for office purposes consistent with the maintenance and operation
of a Class A office building or the Building; (2) Landlord may withhold in its
absolute and sole discretion consent to any mortgage, hypothecation, pledge or
other encumbrance of any interest in this Lease or the Premises by Tenant or any
subtenant, whereby this Lease or any interest therein becomes collateral for any
obligation of Tenant; and (3) Landlord may withhold its consent to the extent
Landlord determines necessary to comply with a public or private restriction on
use of the Premises, the Building or the Land contained in any statute or
ordinance or any lease, mortgage, or other agreement or instrument by which the
Landlord is bound or to which any of such property is subject. No such
assignment, sublease or other transfer shall relieve Tenant from any liability
under this Lease. Consent to any such assignment, subletting or transfer shall
not operate as a waiver of the necessity for consent to any subsequent
assignment, subletting or transfer. In lieu of granting any such consent,
Landlord reserves the right to notify Tenant within five (5) days of receipt of
Tenant's request for Landlord's consent that Landlord intends to terminate this
Lease or, in the case of a subletting of less than all the Premises, to
terminate this Lease with respect to such portion of the Premises, as of the
proposed effective date of such subletting or assignment, in which event Tenant
may withdraw its request for consent by so notifying Landlord within five (5)
days of Landlord's notice of intent to terminate, or Tenant may allow Landlord
to terminate this Lease, in which case Landlord may enter into the relationship
of landlord and tenant with such proposed assignee or subtenant (subject to the
agreement of such proposed assignee or subtenant) based upon the Rent and other
compensation and terms agreed to by such subtenant or assignee and otherwise
upon the terms and conditions of this Lease. In connection with each request for
an assignment or subletting, Tenant shall pay $500.00 for the cost of processing
such assignment or subletting, including attorneys' fees, upon demand of
Landlord. Tenant shall provide Landlord with copies of all assignments,
subleases and assumption instruments.
If Tenant is a partnership, conversion of Tenant to a limited liability
company or partnership or to a corporation (or to another entity by which the
parties in Tenant would be relieved of liability to any creditors of Tenant)
shall constitute an assignment for purposes of this Section. The foregoing to
the contrary notwithstanding, Landlord's consent shall not be required for any
sublease or assignment by Tenant to a subsidiary or affiliate of Tenant so long
as such subsidiary's or affiliate's use of the Premises is consistent with the
maintenance and operation of a Class A office building along the Interstate 90
corridor in the City of Bellevue, Washington. A subsidiary or affiliate of
Tenant shall mean an entity which controls, is controlled by or is under common
control with Tenant. No such assignment, sublease or other transfer shall
relieve Tenant from any liability under this Lease.
One-half (1/2) of any sums or other economic consideration received by
Tenant as a result of such assignment or subletting, however denominated under
the assignment or
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sublease, which exceed, in the aggregate, (i) the Rent and Additional Rent
Tenant is obligated to pay Landlord under this Lease over the same period
(prorated to reflect obligations allocable to any portion of the Premises
subleased), plus (ii) any customary real estate brokerage commissions or fees
paid by Tenant to an unrelated licensed broker or agent to procure such
assignment or sublease, shall be paid to Landlord as Additional Rent under this
Lease as and when the same are paid to Tenant without affecting or reducing any
other obligations of Tenant hereunder.
18.2 ASSIGNEE OBLIGATIONS. As a condition to Landlord's approval, any
potential assignee otherwise approved by Landlord shall assume in writing all
obligations of Tenant under this Lease and shall be jointly and severally liable
with Tenant for the payment of Rent and performance of all terms, covenants and
conditions of this Lease.
18.3 SUBLESSEE OBLIGATIONS. Any sublessee shall assume all obligations of
Tenant as to that portion of the Premises which is subleased to such sublessee
and shall be jointly and severally liable with Tenant for rental and other
payments and performance of all terms, covenants, and conditions of this Lease
with respect to such portion of the Premises (but with respect to payment of
rentals and other amounts, such sublessee's obligation shall not exceed its
obligation under the sublease).
19. SIGNS. At Tenant's sole cost and expense, Tenant may maintain a single sign
on the exterior of the Building facing Interstate 90 identifying Tenant. The
location, installation and maintenance of the sign shall comply with any and all
applicable codes, laws or regulations, and as well as the Building signage
policy attached hereto as EXHIBIT F as the same may be amended from time to time
by Landlord. Tenant shall be identified in the lobby directory on the main floor
of the Building at Landlord's cost. Tenant shall also have the right, at
Tenant's sole cost and expense to maintain signage identifying Tenant in the
lobby adjacent to the elevators on any floor of the Building occupied
exclusively by Tenant, and on the entrance to the Premises. The allowance
provided in EXHIBIT B may be applied toward the cost of signage allowed under
this Section. Except as provided herein, Tenant shall not place or in any manner
display any sign, graphics, or any advertising matter anywhere in or about the
Premises or the Building at places visible (either directly or indirectly) from
anywhere outside the Premises without first obtaining Landlord's written consent
thereto, such consent to be at Landlord's sole discretion. Tenant shall remove
any and all signs at the expiration or sooner termination of this Lease and
Tenant shall repair any damage to the Premises or the Building caused thereby,
all at Tenant's sole cost and expense. Landlord shall not unreasonably withhold
its consent to normal Tenant identification signs and logos which are consistent
with the Building signage and graphics program.
20. LIENS AND INSOLVENCY.
20.1 LIENS. Tenant shall keep its interest in this Lease and any Tenant's
Property (other than unattached personal property) and the Premises, the Land
and the Building free from any liens arising out of any work performed or
materials ordered or obligations incurred by or on behalf of Tenant and hereby
indemnities and holds Landlord harmless from any liability from any such lien,
including, without limitation, liens arising from any work
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performed pursuant to SECTION 4 of EXHIBIT B hereto. In the event any lien is
filed against the Building, the Land or the Premises by any person claiming by,
through or under Tenant, Tenant shall, upon request of Landlord, at Tenant's
expense immediately either cause such lien to be released of record or at
Landlord's option, furnish to Landlord a bond in form and amount and issued by a
surety reasonably satisfactory to Landlord, indemnifying Landlord, the Land and
the Building against all liability, costs and expenses, including attorneys
fees, which Landlord may incur as a result thereof. Provided that such bond has
been furnished to Landlord, Tenant, at its sole cost and expense and after
written notice to Landlord, may contest, by appropriate proceedings conducted in
good faith and with due diligence, any lien, encumbrance or charge against the
Premises arising from work done or materials provided to or for Tenant, if, and
only if, such proceedings suspend the collection thereof against Landlord,
Tenant and the Premises and neither the Premises, the Building nor the Land nor
any part thereof or interest therein is or will be in any danger of being sold,
forfeited or lost.
20.2 INSOLVENCY. If Tenant becomes insolvent or voluntarily or
involuntarily becomes a debtor or alleged debtor in a bankruptcy proceeding, or
if a receiver, assignee or other liquidating officer is appointed for the
business of Tenant, Landlord at its option may terminate this Lease and Tenant's
right of possession under this Lease and in no event shall this Lease or any
rights or privileges hereunder be an asset of Tenant in any bankruptcy,
insolvency or reorganization proceeding.
20.3 FINANCIAL STATEMENTS. Tenant shall, from time to time during the Lease
Term upon the request of Landlord, submit to Landlord such financial statements
or other financial information as Landlord may reasonably request. Such
statements shall be prepared in accordance with generally accepted accounting
principles consistently applied and, so long as Tenant is in default under this
Lease, shall be audited by an independent certified public accountant at
Tenant's expense not more often than annually. Tenant's obligations under this
Section shall be suspended for so long as Tenant is subject to the reporting
requirements of the Securities Exchange Act of 1934.
21. DEFAULT.
21.1 CUMULATIVE REMEDIES. All rights of Landlord herein enumerated shall be
cumulative, and none shall exclude any other right or remedy allowed by law. In
addition to the other remedies provided in this Lease, Landlord shall be
entitled to restrain by injunction the violation or attempted violation of any
of the covenants, agreements or conditions of this Lease.
21.2 TENANT'S RIGHT TO CURE. Tenant shall have a period of five (5)
business days from the date of written notice from Landlord to Tenant within
which to cure any default in the payment of Rent, Additional Rent or other sums
due hereunder. Tenant shall have a period of fifteen (15) days from the date of
written notice from Landlord to Tenant within which to cure any other default
hereunder which is capable of being cured by Tenant; provided, however, that
with respect to any default capable of being cured by Tenant but which cannot be
cured within such fifteen (15) day period, the default shall not be deemed to
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be uncured if Tenant commences to cure within fifteen (15) days after Landlord's
notice and for so long as Tenant is diligently prosecuting the cure thereof.
21.3 ABANDONMENT. Abandonment means an absence from the Premises of five
(5) consecutive days or more while Tenant is in default or Landlord otherwise
reasonably determines that Tenant has abandoned the Premises and its interest
under this Lease. Abandonment by Tenant shall be considered a default with no
right to cure, allowing Landlord to reenter the Premises under SECTION 21.4. The
Premises shall not be deemed to be abandoned during any period of time when
Tenant is current in the payment of Rent and Additional Rent; provided, however,
during any period in which the Premises are not occupied by Tenant or any
sublessee or assignee of Tenant, Tenant shall be responsible for any additional
costs and insurance premiums incurred by Landlord as a result of such vacancy
and Tenant shall continue to maintain the Premises, including the daily removal
of mail, periodicals and other documents and packages which are delivered to
Tenant at the Premises.
21.4 LANDLORD'S REENTRY. Upon a default under this Lease by Tenant and
expiration of any applicable cure period, Landlord, at its option, may enter the
Premises or any part thereof, and expel, remove or put out Tenant or any other
persons who may be thereon, together with all personal property found therein;
and Landlord may terminate this Lease, or it may from time to time, without
terminating this Lease and as agent of Tenant, relet the Premises or any part
thereof for such term or terms (which may be for a term less than or extending
beyond the Lease Term) and at such rental or rentals and upon such other terms
and conditions as Landlord in its sole discretion may deem advisable, with the
right to repair, remodel and change the Premises, Tenant remaining liable for
any deficiency computed as provided in SECTION 21.5. In the case of any default,
reentry and/or dispossession by summary proceedings or otherwise, all Rent and
Additional Rent shall become due thereupon and be paid up to the time of such
reentry or dispossession, together with such expenses as Landlord may reasonably
incur for attorneys' fees, advertising expenses, brokerage fees and/or putting
the Premises in good order or preparing the same for re-rental, together with
interest thereon as provided in SECTION 38.6 hereof, accruing from the date of
any such expenditure by Landlord.
21.5 RELETTING THE PREMISES. At the option of Landlord, rents received by
Landlord from such reletting shall be applied first to the payment of any
indebtedness from Tenant to Landlord other than Rent and Additional Rent due
hereunder; second, to the payment of reasonable costs and expenses of such
reletting and including, but not limited to, attorneys' fees, advertising fees
and brokerage fees, and to the payment of any repairs, remodeling and changes in
the Premises; third, to the payment of Rent and Additional Rent due and to
become due hereunder, and, if after so applying said Rents there is any
deficiency in the Rent or Additional Rent to be paid by Tenant under this Lease,
Tenant shall pay any deficiency to Landlord monthly on the dates specified
herein and any payment made or suits brought to collect the amount of the
deficiency for any month shall not prejudice in any way the right of Landlord to
collect the deficiency for any subsequent month. Subject to any applicable duty
to mitigate damages imposed by law and all reasonable costs and expenses of
reletting, including, but not limited to, attorneys' fees, advertising fees and
brokerage fees,
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and the costs of any repairs, remodeling and changes in the Premises, the
failure of Landlord to relet the Premises or any part or parts thereof shall not
release or affect Tenant's liability hereunder, nor shall Landlord be liable for
failure to relet, or in the event of reletting, for failure to collect the Rent
thereof, and in no event shall Tenant be entitled to receive any excess of net
Rents collected over sums payable by Tenant to Landlord hereunder. No such
reentry or taking possession of the Premises shall be construed as an election
on Landlord's part to terminate this Lease unless a written notice of such
intention be given to Tenant. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for such previous breach and default. Should Landlord at any time terminate this
Lease by reason of any default, in addition to any other remedy it may have, it
may recover from Tenant the amount of Rent and Additional Rent reserved in this
Lease for the balance of the Lease Term, as it may have been extended, in excess
of the then fair market rental value of the Premises for the same period, plus
all court costs and reasonable attorneys' fees incurred by Landlord in the
collection of the same.
21.6 DAMAGES. Subject to the provisions of SECTIONS 21.4 and 21.5 with
respect to Tenant's liability for unaccrued Rent and Additional Rent, Tenant
shall be liable for all damages incurred by Landlord as a result of Tenant's
default under this Lease, including, without limitation, Tenant's failure to
surrender possession of the Premises upon the expiration or termination of this
Lease, the same to include all costs, expenses, liabilities, commissions and
attorneys' fees for which Landlord becomes obligated to any third party.
21.7 NONPAYMENT OF ADDITIONAL RENT. All costs and expenses which Tenant
assumes or agrees to pay to Landlord pursuant to this Lease shall be deemed
Additional Rent and, in the event of nonpayment thereof, Landlord shall have all
the rights and remedies herein provided for in case of nonpayment of Rent.
21.8 LANDLORD'S DEFAULT. Landlord shall not be in default unless Landlord
fails to perform its obligations under this Lease within a reasonable time, but
in no event later than fifteen (15) days after written notice by Tenant to
Landlord and to the holder of any first mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been furnished to Tenant
in writing and specifying how Landlord has failed to perform such obligations
and the acts required to cure the same; provided, however, that if the nature of
Landlord's obligation is such that more than fifteen (15) days are required for
performance, Landlord shall not be in default if Landlord commences performance
within such fifteen (15) day period and thereafter diligently prosecutes the
same to completion. In no event shall Tenant have the right to terminate this
Lease as a result of Landlord's default and Tenant's remedies shall be limited
to (1) damages and/or (2) an injunction and/or (3) following an additional
fifteen (15) days' written notice to Landlord specifying the alleged defaults
and the actions Tenant intends to undertake, Tenant may cure any Landlord
default which Landlord fails to cure within the time limit set forth in this
Section and said additional fifteen (15) day period so long as such default
results in a material impairment of Tenant's ability to conduct its business at
the Premises or an immediate threat of the lapse of any insurance policy
required to be maintained by Landlord by this Lease. Any sums so expended by
Tenant for the reasonable costs of effecting such cure shall be reimbursed by
Landlord upon demand.
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22. PRIORITY. This Lease shall be subordinate to any first mortgage or deed of
trust (and any other mortgage or deed of trust upon the written election of
Landlord to which the holder of such first mortgage or deed of trust consents)
now existing or hereafter placed upon the Land, the Building or the Premises,
created by or at the instance of Landlord, and to any and all advances to be
made thereunder and to interest thereon and all modifications, renewals and
replacements or extensions thereof ("LANDLORD'S MORTGAGE"), provided that
the holder of such mortgage or deed of trust and Landlord shall execute in
recordable form a nondisturbance agreement in form reasonably satisfactory to
Tenant and Landlord agrees to obtain such an agreement from any holder of any
such interest existing at the time of execution of this Lease and shall make a
good faith effort to do so within sixty (60) days of the date of execution of
this Lease from any holder of any other interest concurrently with such interest
attaching to the Building. Upon request of such holder, Tenant shall attorn to
the holder of any Landlord's Mortgage or any person or persons purchasing or
otherwise acquiring the Land, Building or Premises at any sale or other
proceeding under any Landlord's Mortgage. Tenant shall properly execute,
acknowledge and deliver documents which the holder of any Landlord's Mortgage
may reasonably require to effectuate the provisions of this Section.
23. SURRENDER OF POSSESSION. Subject to the terms of SECTION 14 relating to
damage and destruction, upon expiration or sooner termination of this Lease,
Tenant shall promptly and peacefully surrender the Premises to Landlord in as
good condition as when received by Tenant from Landlord or as thereafter
improved, except for (i) reasonable use, wear and tear, (ii) damage or
destruction covered by SECTION 14; (iii) matters covered by the waiver of claims
set forth in SECTION 15; and (iv) Alterations and Changes, other than those
which Landlord stated in its written consent were required to be removed at
termination of this Lease.
24. REMOVAL OF PROPERTY. Tenant shall remove all of its moveable personal
property and trade fixtures paid for by Tenant which can be removed without
damage to the Premises at the expiration or sooner termination of this Lease,
and shall pay Landlord any damages for injury to the Premises or Building
resulting from such removal; and all other improvements and additions to the
Premises shall, at Landlord's option, thereupon become the property of Landlord.
25. NON-WAIVER. Waiver by Landlord or Tenant of any term, covenant or condition
herein contained or any breach thereof shall not be deemed to be a waiver of
such term, covenant, or condition or of any subsequent breach of the same or any
other term, covenant, or condition herein contained. The subsequent acceptance
of Rent or Additional Rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach by Tenant of any term, covenant or condition of
this Lease, other than the failure of Tenant to pay the particular Rent or
Additional Rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such Rent or Additional Rent.
26. HOLDOVER. If Tenant shall, with the written consent of Landlord, hold
over after the expiration of the Lease Term, such tenancy shall be deemed a
month-to-month tenancy
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which may be terminated as provided by applicable law. During such tenancy, and
during any period in which Tenant wrongfully occupies the Premises without
Landlord's consent, Tenant shall be bound by all of the terms, covenants and
conditions herein so far as applicable, except Rent, which shall be equivalent
to one hundred twenty-five percent (125%) of the monthly Rent stated herein for
the immediately preceding month, together with the Additional Rent herein
provided for.
27. CONDEMNATION.
27.1 ENTIRE TAKING. If all of the Premises or such portions of the Building
as may be required for the reasonable use of the Premises are taken by eminent
domain, this Lease shall automatically terminate as of the date title vests in
the condemning authority. In the event of a taking of a material part of but
less than all of the Building, where Landlord shall determine that the remaining
portions of the Building cannot be economically and effectively used by it
(whether on account of physical, economic, aesthetic or other reasons) or where
Landlord determines the Building should be restored in such a way as to
materially alter the Premises, Landlord shall forward a written notice to Tenant
of such determination not more than sixty (60) days after the date of taking.
The Lease Term shall expire upon such date as Landlord shall specify in such
notice but not earlier than sixty (60) days after the date of such notice.
27.2 PARTIAL TAKING. Subject to the provisions of the preceding Section
27.1, in case of taking of a part of the Premises, or a portion of the Building
not required for the reasonable use of the Premises, then this Lease shall
continue in full force and effect and the Rent shall be equitably reduced based
on the proportion by which the floor area of the Premises is reduced, such Rent
reduction to be effective as of the date title to such portion vests in the
condemning authority. If a portion of the Premises shall be so taken which
renders the remainder of the Premises unsuitable for continued occupancy by
Tenant under this Lease, Tenant may terminate this Lease by written notice to
Landlord no later than sixty (60) days after the date of such taking and the
Lease Term shall expire upon such date as Tenant shall specify in such notice
not later than sixty (60) days after the date of such notice.
27.3 AWARDS AND DAMAGES. Landlord reserves all rights to damages to the
Premises for any partial, constructive, or entire taking by eminent domain, and
Tenant hereby assigns to Landlord any right Tenant may have to such damages or
award. Tenant shall make no claim against Landlord or the condemning authority
for damages for termination of the leasehold interest or interference with
Tenant's business. Tenant shall have the right, however, to claim and recover
from the condemning authority compensation for any loss to which Tenant may be
put for Tenant's moving expenses, business interruption or taking of Tenant's
personal property and leasehold improvements paid for by Tenant (not including
Tenant's leasehold interest) provided that such damages may be claimed only if
they are awarded separately in the eminent domain proceedings and not out of or
as part of the damages recoverable by Landlord.
28. NOTICES. All notices under this Lease shall be in writing and delivered in
person or sent by registered or certified mail, postage prepaid, to Landlord and
to Tenant at the
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Notice Addresses provided in SECTION 1.10 (provided that after the Commencement
Date any such notice to Landlord may be mailed or delivered by hand to
Landlord's principal office in the Building) and to the holder of any mortgage
or deed of trust at such place as such holder shall specify to Tenant in
writing; or such other addresses as may from time to time be designated by any
such party in writing. Notices mailed as aforesaid shall be deemed given on the
date of such mailing. Either party may change its address for notices by giving
the other thirty (30) days' advance notice thereof by the means above described.
29. COSTS AND ATTORNEYS FEES. If Tenant or Landlord shall bring any action for
any relief against the other, declaratory or otherwise, arising out of this
Lease, including any suit by Landlord for the recovery of Rent, Additional Rent
or other payments hereunder or possession of the Premises, each party shall, and
hereby does, to the extent permitted by law, waive trial by jury and the losing
party shall pay the prevailing party a reasonable sum for attorneys fees in such
suit, at trial and on appeal, and such attorneys fees shall be deemed to have
accrued on the commencement of such action. Such fees and costs shall include
those incurred in any insolvency, bankruptcy, probate, arbitration, mediation or
other proceedings and include the adjudication of issues particularly related to
any such proceeding.
30. LANDLORD'S LIABILITY. Anything in this Lease to the contrary
notwithstanding, covenants, undertakings and agreements herein made on the part
of Landlord are made and intended not as personal covenants, undertakings and
agreements for the purpose of binding Landlord personally or the assets of
Landlord except Landlord's interest in the Premises and Building (including the
proceeds of any insurance policy and any condemnation awards to the extent such
proceeds or awards are riot used to repair or restore any damage to any portion
of the project in which the Building is located caused by the insured loss or
condemnation, or any sale of the Premises and/or Building), but are made and
intended for the purpose of binding only the Landlord's interest in the Premises
and Building (and proceeds as stated above), as the same may from time to time
be encumbered. No personal liability or personal responsibility is assumed by,
nor shall at any time be asserted or enforceable against Landlord or its
partners or their respective heirs, legal representatives, successors or assigns
on account of the Lease or on account of any covenant, undertaking or agreement
of Landlord in this Lease contained.
31. ESTOPPEL CERTIFICATES. Tenant shall, from time to time, upon written
request of Landlord, execute, acknowledge and deliver to Landlord or its
designee a written statement stating: The date this Lease was executed and the
date it expires; the date the Lease Term commenced and the date Tenant accepted
the Premises; the amount of minimum monthly Rent and the date to which such Rent
has been paid; and certifying to the extent true: That this Lease is in full
force and effect; that all conditions under this Lease to be performed by the
Landlord have been satisfied; that there are no claims, defenses or offsets
which the Tenant has against the enforcement of this Lease; that no Rent has
been paid more than one month in advance; and such other matters as Landlord may
reasonably request. Any such statement delivered pursuant to this Section may be
relied upon by a prospective purchaser of Landlord's interest or holder of any
mortgage upon Landlord's interest in the Building. If Tenant shall fail to
respond within twenty (20) days of receipt by Tenant of a
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written request by Landlord as herein provided, Tenant shall be deemed to have
given such certificate as above provided without modification and shall be
deemed to have admitted the accuracy of any information supplied by Landlord to
a prospective purchaser or mortgagee and to have certified that this Lease is in
full force and effect, that there are no uncured defaults in Landlord's
performance, that the security deposit is as stated in the Lease, and that not
more than one month's Rent has been paid in advance.
32. TRANSFER OF LANDLORD'S INTEREST. In the event of any transfers of
Landlord's interest in the Premises or in the Building, other than a transfer
for security purposes only, the transferor shall be automatically relieved of
any and all obligations and liabilities on the part of Landlord accruing from
and after the date of such transfer and such transferee shall have no obligation
or liability with respect to any matter occurring or arising prior to the date
of such transfer. Tenant agrees to attorn to the transferee.
33. RIGHT TO PERFORM. If Tenant shall fail to pay any sum of money 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 continue for ten (10) days after
notice thereof by Landlord, Landlord may, but shall not be obligated so to do,
and without waiving or releasing Tenant from any obligations of Tenant, make
such payment or perform any such other act on Tenant's part to be made or
performed as provided in this Lease. Landlord shall have (in addition to any
other right or remedy of Landlord) the same rights and remedies in the event of
the nonpayment of sums due under this Section as in the case of default by
Tenant in the payment of Rent.
34. QUIET ENJOYMENT. Landlord warrants to Tenant that Landlord holds sufficient
title to Buildings I and II to execute and perform its obligations under this
Lease and Tenant shall have the right to the peaceable and quiet use and
enjoyment of the Premises subject to the provisions of this Lease, as long as
Tenant is not in default hereunder. Landlord shall require other tenants in the
Building to agree not to disturb Tenant beyond what is customary in a Class A
office building.
35. HAZARDOUS MATERIALS.
35.1 HAZARDOUS SUBSTANCES USE. Any and all use, storage, release, handling,
transportation, treatment or storage by Tenant of Hazardous Substances on the
Leased Premises shall be carried out in compliance with all applicable federal,
state and local laws, ordinances and regulations. Tenant shall not use, handle
or store any Hazardous Substances on the Premises or within the project in which
the Building is located under any circumstances, except in accordance with all
laws, to the extent such Hazardous Substances and the quantities thereof are
reasonably necessary for the conduct of Tenant's business at the Premises and
the same are properly disposed of off site in the ordinary course.
35.2 REPRESENTATION. Landlord hereby represents and warrants that to the
best of Landlord's knowledge, but with Landlord having no obligation to have
made any independent study or investigation, and except as identified in the
Report of Independent Cleanup of Petroleum-stained Soil prepared by Hart
Crowser, Job No. J-2372-04, dated May 8, 1991, or
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otherwise disclosed to Tenant in writing prior to Tenant's execution of this
Lease (i) there have been no releases of Hazardous Substances from the Premises,
the Building, or the land on which the Building is situated in violation of any
applicable law; (ii) no Hazardous Substances have been used, generated, treated,
stored, or disposed of at the Premises, the Building, or the land on which the
Building is situated in violation of any applicable law; and (iii) no claim of
liability relating to the presence of Hazardous Substances in violation of any
applicable law at the Premises, the Building, or the land on which the Building
is situated has been made or is threatened by any governmental agency or other
third party For the purposes hereof, "Landlord's knowledge" shall mean only the
current, actual knowledge of William H. Cunningham, Jr., which individual is
hereby confirmed by Landlord as having been Landlord's principal internal
representative with respect to the construction of the Building.
35.3 INDEMNIFICATION. Tenant shall indemnify, defend, and hold harmless
Landlord from any and all damages, losses, costs and attorneys' fees and all
claims of liability asserted against Landlord by a third party, including
without limitation any agency or instrumentality of the federal, state, or local
government, for bodily injury, including death of a person, physical damage to
or loss of use or value of any property, or the costs or expenses of any cleanup
activities (remediation or removal) to the extent required by applicable law,
arising out of or relating to the release of a Hazardous Substance on or about
the project in which the Building is located by Tenant, its sublessees, agents,
employees, invitees, licensees and contractors.
Landlord shall indemnify, defend, and hold harmless Tenant from any and all
damages, losses, costs and attorneys' fees and all claims of liability asserted
against Tenant by a third party, including without limitation any agency or
instrumentality of the federal, state, or local government, for bodily injury,
including death of a person, physical damage to or loss of use or value of
property, or the costs or expenses if any cleanup activities (remediation or
removal) to the extent required by applicable law, arising out of or relating to
the release of a Hazardous Substance on or about the project in which the
Building is located by Landlord, its agents, employees, invitees, licensees and
contractors (excluding any tenants).
35.4 DEFINITION OF "HAZARDOUS SUBSTANCES." For purposes of this Lease, the
term "Hazardous Substances" shall mean any dangerous waste, hazardous waste, or
hazardous substance as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. (S)(S) 9601, et
--
seq.) or the Resource Conservation and Recovery Act as amended (42 U.S.C. (S)(S)
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6901, et seq.); the Washington Model Toxics Control Act as amended (RCW Ch. 70.
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105D); or the Washington Hazardous Waste Management Act as amended (RCW Ch.
709.105).
36. TELECOMMUNICATIONS LINES AND EQUIPMENT.
36.1 LOCATION OF TENANT'S EQUIPMENT AND LANDLORD CONSENT.
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36.1.1 (a) Tenant may install, maintain, replace, remove and use
communications or computer wires, cables and related devices (collectively, the
"Lines") at the Building in or serving the Premises only with Landlord's prior
written consent, which consent may not be unreasonably withheld. Tenant shall
locate all electronic telecommunications equipment within the Premises and shall
coordinate the location of all Lines with Landlord. Any request for consent
shall contain detailed plans, drawings and specifications identifying all work
to be performed, the time schedule for completion of the work, and the identity
of the entity that will perform the proposed work (which entity shall be subject
to Landlord's approval, which shall not be unreasonably withheld). Landlord
shall have a reasonable time in which to evaluate the request after it is
submitted by Tenant.
36.1.2 In granting its consent Landlord may consider the following
factors, among others, in making its determination: (A) whether or not the
proposed work will interfere with the use of any other then existing or proposed
lines at the Building; (B) whether or not an acceptable number of spare lines
and space for additional lines can be maintained for existing and future
occupants of the Building; and (C) whether the work or resulting Lines would
adversely affect the Land, Building or any space in the Building.
36.1.3 Landlord's approval of, or requirements concerning, the
Lines or any equipment related thereto, the plans, specifications or designs
related thereto, the contractor or subcontractor, or the work performed
hereunder, shall not be deemed a warranty as to the adequacy thereof, and
Landlord hereby disclaims any responsibility or liability for the same, nor
shall Landlord's consent be deemed a recommendation regarding what may or may
not be adequate or appropriate for Tenant's business purposes.
36.1.4 If Landlord consents to Tenant's proposal, Tenant shall pay
all of Tenant's and Landlord's third party costs in connection therewith
(including all costs related to new Lines) and shall use, maintain and operate
the Lines and related equipment in accordance with and subject to all laws
governing the Lines and equipment and at Tenant's sole risk and expense. As soon
as the work in completed, Tenant shall submit as-built drawings to Landlord.
36.1.5 Landlord reserves the right to require that Tenant, at
Tenant's expense, remove any Lines that are installed by Tenant upon the
expiration or termination of this Lease.
36.2 ELECTROMAGNETIC FIELDS. If Tenant at any time uses any equipment that
may create an electromagnetic field exceeding the normal insulation ratings of
ordinary twisted pair riser cable or cause radiation higher than normal
background radiation, Landlord reserves the right to require Tenant to
appropriately insulate the Lines therefor (including riser cables) to prevent
such excessive electromagnetic fields or radiation.
36.3 OTHER TENANTS. Landlord shall ensure that other tenants of the
Building are subject to restrictions that afford Tenant similar assurances
regarding the avoidance of interference with Tenant's Lines as are provided to
Landlord by this Section 36.
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37. RULES AND REGULATIONS. Tenant agrees to abide by all reasonable rules and
regulations for the Building imposed by Landlord as the same may be changed from
time to time upon reasonable notice to Tenant to the extent such rules and
regulations do not conflict with the terms and conditions of this Lease,
materially interfere with Tenant's use or quiet enjoyment of the Premises, or
materially increase Tenant's cost of occupancy and use of the Premises. The
current Building rules and regulations are set forth in Exhibit G attached. The
Building rules and regulations are imposed for the cleanliness, good appearance,
property maintenance and good order and reasonable use of the Premises and the
Building, and as may be necessary for the enjoyment of the Building by all
tenants and their clients, customers and employees. Landlord shall not be liable
for the failure of any other tenant, its agents or employees, to conform to the
rules and regulations.
38. GENERAL.
38.1 HEADINGS. Titles to Sections of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part hereof.
38.2 HEIRS AND ASSIGNS. All of the covenants, agreements, terms and
conditions contained in this Lease shall inure to and be binding upon the
Landlord and Tenant and their respective heirs, executors, administrators,
successors and assigns.
38.3 PAYMENT OF BROKERS. Landlord shall pay the commissions due those real
estate brokers or agents named in Section 1.13. If Tenant has dealt with any
other person or real estate broker with respect to leasing or renting space in
the Building, Tenant shall be solely responsible for the payment of any fee due
said person or firm and Tenant shall indemnify and hold Landlord harmless
against any liability in respect thereto, including Landlord's attorneys' fees
and costs in defense of any such claim.
38.4 NO PARTNERSHIP. This Lease shall not be construed as establishing a
partnership or joint venture between Landlord and Tenant, and neither party
shall be liable for the debts or obligations of the other, except to the extent
specifically and expressly agreed to herein. Except as provided herein, neither
party hereto may make any representation or create any liability on behalf of
the other, and no rights in any third party shall arise by virtue of these
presents.
38.5 SEVERABILITY. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and the remaining provisions hereof shall nevertheless remain
in full force and effect.
38.6 OVERDUE PAYMENTS. Tenant acknowledges that a late payment of Rent or
other sums due hereunder will cause Landlord to incur costs not contemplated by
this Lease. Such costs may include, but not be limited to, processing and
accounting charges, and penalties imposed by terms of any contracts, mortgages
or deeds of trust covering the Building. Therefore, in the event Tenant shall
fail to pay any Rent, Additional Rent or other sums payable by Tenant under this
Lease for five (5) days after such amount is due, then
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<PAGE>
Tenant shall pay Landlord, as Additional Rent, a late charge ("LATE CHARGE")
equal to five percent (5%) of such amount owing, but not in excess of the
highest rate permitted by law. In addition to any Late Charges which may be
incurred hereunder, any Rent, Additional Rent or other sums payable by Tenant
under this Lease which are more than thirty (30) days past due, shall bear
interest at a rate equal to eighteen percent (18%) per annum but not in excess
of the highest lawful rate permitted under applicable laws, calculated from the
original due date thereof to the date of payment, provided, however, the minimum
overdue fee shall be One Hundred Dollars ($100). In addition, if payments are
received by check or draft from Tenant, and two (2) or more of such checks or
drafts are dishonored by the bank or other financial institution they were drawn
upon in any twelve (12) month period, Landlord may thereafter require all Rent
and other payments due hereunder from Tenant to Landlord to be made by bank
cashiers or bank certified check or other similar means of payment and Landlord
shall not be required to accept any checks or drafts of Tenant which do not
comply with such requirements.
38.7 FORCE MAJEURE. Except for the payment of Rent, Additional Rent or
other sums payable by Tenant, time periods for Tenant's or Landlord's
performance under any provisions of this Lease shall be extended for periods of
time during which Tenant's or Landlord's performance is prevented due to
circumstances beyond Tenant's or Landlord's reasonable control.
38.8 RIGHT TO CHANGE PUBLIC SPACES. With the consent of Tenant, which
consent shall not be unreasonably delayed, conditioned or withheld, Landlord
shall have the right at any time after the completion of the Building, without
thereby creating an actual or constructive eviction or incurring any liability
to Tenant therefor, to change the arrangement or location of such of the
following as are not contained within the Premises or any part thereof:
entrances, passageways, doors and doorways, corridors, stairs, toilets and other
like public service portions of the Building. Nevertheless, in no event shall
Landlord diminish any service, change the arrangement or location of the
elevators serving the Premises, make any change which shall diminish the area of
the Premises, or make any change which shall change the character of the
Building from that of a first-class office building in Bellevue, Washington.
38.9 GOVERNING LAW; VENUE. This Lease shall be governed by and construed
in accordance with the laws of the State of Washington. The venue of any action
brought to interpret or enforce any of the terms of this Lease or otherwise
adjudicate the rights and liabilities of the parties hereto shall be laid in the
Superior Court of the State of Washington located in the county in which the
Property is located.
38.10 BUILDING DIRECTORY. Landlord shall maintain in the lobby of the
Building a directory which shall include the name of Tenant and any other names
reasonably requested by Tenant in proportion to the number of listings given to
comparable tenants of the Building.
38.11 BUILDING NAME. The Building will be known by such name as Landlord
may designate from time to time, but except for Obayashi Corporation or
Prudential Insurance
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Company, Landlord agrees that it shall not name the Building or the project in
which it is located after or in a way that identifies any particular company or
its type of business.
38.12 RECORDATION. Neither Landlord nor Tenant shall record this Lease or
any memorandum or short form of this Lease.
38.13 TIME OF PERFORMANCE. Time is of the essence of this Lease and each
of its provisions.
38.14 EXECUTION AUTHORITY. Each party to this Lease shall provide to the
other party upon request reasonable evidence of the authority of the person
executing this Lease on its behalf.
38.15 ADDENDA AND EXHIBITS. All addenda and exhibits attached to this
Lease are incorporated herein by this reference.
38.16 ENTIRE AGREEMENT. This Lease contains all covenants and agreements
between Landlord and Tenant relating in any manner to the leasing, use and
occupancy of the Premises, to Tenant's use of the Building and other matters set
forth in this Lease. No prior agreements or understanding pertaining to the same
shall be valid or of any force or effect and the covenants and agreements of
this Lease shall not be altered, modified or added to except in writing signed
by Landlord and Tenant.
IN WITNESS WHEREOF this Lease has been executed as of the day and year
first above set forth.
LANDLORD: OBAYASHI CORPORATION,
a Japan corporation
Date: October 10, 1997 By: /s/ Yukio Kanai
----------------
Printed Name: Yukio Kanai
-----------
Its: Attorney-in-fact
----------------
TENANT: THE BOEING COMPANY,
a Delaware corporation
Date: October 1, 1997 By: /s/ Alan R. Bjorklund
----------------------
Printed Name: Alan R. Bjorklund
-----------------
Its: Director ISDS Group Facilities
------------------------------
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<PAGE>
LANDLORD ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On October 14, 1997, before me, the undersigned, a Notary in and for said
State, personally appeared Yukio Kanai, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument, the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Evelyn R. Chavez
--------------------
Notary Public in and for said State
[STAMP APPEARS HERE]
Name (Print): Evelyn R. Chavez
----------------
Residing at Los Angeles
-----------
My appointment expires: 1/8/99
------
TENANT ACKNOWLEDGMENT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
THIS IS TO CERTIFY that on this 1st day of October, 1997, before me, the
undersigned, a notary public in and for the state of Washington, duly
commissioned and sworn, personally appeared A.R. Bjorklund, to me known to be
the Director, ISDS Facilities of THE BOEING COMPANY, the Delaware corporation
that executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said corporation for the
uses and purposes therein mentioned, and on oath stated that (s)he was
authorized to execute said instrument, and that the seal affixed, if any, is the
corporate seal of said corporation.
WITNESS my hand and official seal the day and year in this certificate
first above written.
Signature: /s/ Craig W. Brandt
-------------------
Name (Print): Craig W. Brandt
---------------
SEAL APPEARS HERE
NOTARY PUBLIC in and for the State of
Washington, residing at Issaquah
My appointment expires: 8/15/99
-------
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EXHIBIT A
[FLOOR 2 PLAN APPEARS HERE]
A-1
<PAGE>
[FLOOR 3 PLAN APPEARS HERE]
A-2
<PAGE>
[FLOOR 4 PLAN APPEARS HERE]
A-3
<PAGE>
EXHIBIT B
TO
SUNSET CORPORATE CAMPUS II
OFFICE LEASE AGREEMENT
TENANT IMPROVEMENTS
1. IMPROVEMENTS PROVIDED BY LANDLORD
The Building shall be the same construction type, with the same safety
ratings and the same general exterior appearance, as the Sunset Corporate Campus
I building, including similar lobby finishes and a single bank of three
elevators. More specifically, the Building will be constructed in accordance
with the plans and specifications (ZGF Job No. 20169-32) prepared by Zimmer
Gunsul Frasca Partnership, as Landlord's architect.
Landlord agrees to provide the following improvements in the Premises:
1.1 Completed Public and/or Core Areas as outlined in EXHIBIT A,
finished in accordance with all applicable codes, including the Americans with
Disabilities Act, and the plans and specifications for the Building.
1.1.1 Plumbing: Men's restrooms, women's restrooms, and drinking
fountains installed in accordance with the plans and specifications for the
Building.
1.1.2 Electrical: Total electrical service for each floor shall
include two electrical closets, each with 38, 20-ampere, single-pole, 120-volt
circuits.
1.1.3 Transformers: If Tenant requests that they be included with
the improvements made pursuant to this Section, and in order to provide to the
Premises in Building II capacity for eight (8) watts per square foot of power at
the convenience outlets (i.e., the 120/208 volt circuits), Landlord shall
install a second transformer (the "UPGRADE TRANSFORMERS") on each of floors two,
three and four of Building II. The Upgrade Transformers shall be provided and
connected to the power buss at Landlord's expense. The first transformers on
floors two, three and four of Building II shall be provided to and including the
panel pursuant to the shell and core drawings. All work on the load side of the
Upgrade Transformers will be Tenant's responsibility.
1.1.4 Security System: A card key access system with control
points at the garage parking entrance, the Building's front entry and in the
three elevator cabs, with an ability for Tenant to monitor after-hours use and
which is expandable to include monitoring of Tenant's entry and interior doors.
1.2 Tenant's Unimproved Area as outlined in EXHIBIT A to be completed as
outlined in items 1.2.1 through 1.2.9 below:
B-1
<PAGE>
1.2.1 Walls: Core walls pre-taped to be finished under tenant
improvements. Columns and perimeter walls covered with gypsum wallboard ready
for tape and paint.
1.2.2 Floor: Prepared to receive carpet. Floor loading capacities:
80 pounds per square foot miscellaneous live load; 20 pounds per square foot
movable partition load, for a total of 100 pounds per square foot live load.
1.2.3 Mechanical - Primary System: Includes cooling duct
distribution loop installed through terminal VAV boxes and thermostats in
ceiling plenum for building standard layout and quantities (15 per floor). The
building standard mechanical system is designed to accommodate heating loads
generated by lights (1.2 watts per square foot) and electrical equipment (4.9
watts per square foot) up to 6.1 watts per square foot. If Tenant's design or
use of the Premises results in concentrated electrical loads in excess of 6.1
watts per square foot (e.g., data processing areas, conference rooms and machine
rooms) and/or Tenant's design or use of the Premises extends beyond Normal
Business Hours, then the cost of any additional engineering design and
installation of mechanical equipment and/or controls required to handle such
excess shall be part of the cost borne by Tenant pursuant to SECTION 2 of this
EXHIBIT B.
1.2.4 Mechanical - Secondary System: Supplemental cooling capacity
is available in the main VAV units and can be accessed by Tenant for a fee. The
system is sized at 20 tons per floor.
1.2.5 Plumbing: Three waste and vent risers to accommodate waste
from sinks and dishwashers.
1.2.6 Fire Sprinklers: Primary distribution loop with turned-down
finished heads per code, minimum number required to get shell and core sign-off.
1.2.7 Electrical: Electrical conduit and junction boxes
distributed throughout using building standard layout and quantities.
1.2.8 Ceiling: Building standard suspended ceiling grid system
installed in a 4' x 4' pattern.
1.2.9 Window Coverings: Levelor blinds installed at all exterior
windows. The items to be completed in Tenant's Unimproved Area do not include
light fixtures.
2. TENANT IMPROVEMENTS AND LANDLORD'S ALLOWANCE
2.1 Design and construction of all improvements in the Premises beyond
those listed in SECTION 1 of this EXHIBIT B shall be provided at Tenant's cost
and shall include, but not be limited to: to the extent not included in Section
1 of this Exhibit B, any modifications
B-2
<PAGE>
and/or additions to the tenant improvements itemized in SECTION 1.2 above, all
space planning, mechanical drawings, a general contractor's fee (not to exceed
5% of the total price of all tenant improvements), architectural, engineering
and construction design and drawings, partitions (including one-half (1/2) the
cost of any public corridor or demising partition on a multi-tenant floor
enclosing the Tenant's Unimproved Area), doors, door frames, hardware, paint,
wall coverings, base, ceilings, lights, mechanical distribution, diffusers,
thermostats, sprinkler distribution, sprinkler heads, emergency speakers, fire
extinguishers and cabinets, telephone and electrical outlets, light switches,
window coverings, floor coverings, all applicable permit fees and sales tax.
Landlord shall submit to Tenant all prices deemed acceptable to Landlord for the
principal components of Tenant's improvements and a brief description of how
those prices were obtained. Except for Landlord's general contractor and
architect, Tenant shall have the right, within five (5) business days after such
prices are so disclosed, to require that the components identified by Tenant
shall be competitively bid by Landlord among not less than three (3) contractors
or suppliers which are in the business of providing similar labor or materials
in the Bellevue, Washington office market. Landlord shall select the lowest of
such bids unless otherwise agreed to by Tenant, which agreement shall not be
unreasonably withheld or delayed. If Tenant fails to request such bidding
process within the aforementioned five (5) business day period, Landlord shall
procure the items at the prices it identified to Tenant.
2.2 In addition to the cost for improvements constructed during shell and
core as specified in SECTION 1.2 above, Landlord shall provide Tenant a tenant
improvement allowance of $25.00 per square foot of the Rentable Area of the
Premises to be credited against the cost of the permitting, drawings, design,
services, materials and labor, and all sales taxes thereon, for the improvements
provided pursuant to SECTION 2.1 of this EXHIBIT B and Tenant's signage (the
"IMPROVEMENT ALLOWANCE"). Tenant agrees that a minimum of $22.00 per square foot
of Rentable Area of the Premises shall be spent on its tenant improvements
within the Premises. Landlord agrees that any portion of the Improvement
Allowance, up to a maximum of $3.00 per square foot of Rentable Area of the
Premises, which is not expended shall be credited to Tenant against sums due
under this Lease.
Landlord agrees to provide Tenant an additional improvement allowance (the
"ADDITIONAL ALLOWANCE") of up to $5.00 per square foot of Usable Area of the
Premises. Any amounts provided to Tenant as an Additional Allowance shall be
repaid to Landlord by Tenant as Additional Rent in accordance with SECTION 48 of
EXHIBIT C to the Lease.
Neither the Improvement Allowance nor the Additional Allowance will be applied
to the common area rest rooms, janitorial closets, electrical rooms or telephone
closets, which shall all be finished at Landlord's expense under SECTION 1.1 of
this EXHIBIT B.
3. DESIGN OF TENANT IMPROVEMENTS
Tenant shall prepare with Tenant's staff, or Tenant shall retain the services of
a qualified office planner approved by Landlord to prepare, the necessary
drawings for Basic Plans and supply the information necessary to complete the
Working Drawings and Engineering Drawings referred to in SECTION 3.2 of this
EXHIBIT B for construction of the tenant
B-3
<PAGE>
improvements in Tenant's Unimproved Area. All Tenant's plans shall be subject to
approval of Landlord in accordance with SECTION 3.3 of this EXHIBIT B.
Tenant's office planner shall ensure that the work shown on Tenant's plans is
compatible with the basic Building plans and that necessary basic Building
modifications are included in Tenant's plans. Such modifications shall be
subject to the Landlord's approval.
On or before the indicated dates, Tenant shall supply Landlord with one (1)
reproducible copy and five (5) black line prints of the following Tenant Plans:
3.1 BASIC PLANS DELIVERY DATE: October 14, 1997.
The Basic Plans due on this date shall be signed by Tenant and include:
Architectural Floor Plans: These shall be fully dimensioned floor plans showing
partition layout. The Basic Plans must state if there will be any equipment that
will require special plumbing, electrical or other special mechanical systems,
area(s) subject to above-normal floor loads, special openings in the floor, or
other major or special features.
3.2 WORKING DRAWIN