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LEASE
LEASE, dated March 9, 2000, between Laguna South Exchange LLC, a Washington
limited liability company ("Landlord"), and Advanced Digital Information
Corporation, a Washington corporation ("Tenant").
1. BASIC LEASE TERMS. This Section sets forth certain basic terms of this
Lease for reference purposes. This Section is to be read in conjunction
with the other provisions of this Lease; provided, however, to the extent
of any inconsistency between this Section and the other provisions of this
Lease, this Section shall control.
Lease Premises (see Section 2):
Address: 17275 N.E. 67th Court
Redmond WA 98052
Rentable Sq. Ft. ("RSF"): 78,676
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<S> <C>
Rent (See sections 5 and 6): Brokers (See Section 36)
Base Monthly Rent: $62,014 For Tenant: Leo Backer, Leibsohn and Company
Rent Adjustment: Base Monthly Rent Shall For Landlord: Scott Davis, CB Richard Ellis
Increase as follows::
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Effective Date New Base Monthly Rent
-------------- ---------------------
<S> <C>
06-01-2003 $63,564.35
06-01-2004 $65,153.46
06-01-2005 $66,782.29
06-01-2006 $68,451.85
06-01-2007 $70,163.15
06-01-2008 $71,917.23
06-01-2009 $73,715.16
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<S> <C>
Security Deposit: $83,931.45 Addresses for Notices (See Section 29):
Estimated Additional Rent: $13,768.30 Landlord: 14850 N.E. 31st Circle
Redmond WA 98052
Attention: Bill Hart/Glenn Hart
Phone: 425-556-9100
Fax: 425-556-9200
Tenant: PO Box 97057
Redmond WA 98073-9757
Attention: Leslie S. Rock
Phone: (425) 881-8004
Fax: (425) 881-2296
Term: Ten (10) years, subject to Permitted Use (see Section 7): Office, light
provisions of Section 3. manufacturing, warehouse and distribution,
assembly and repair and maintenance of electronic
components for the computer industry and sales
activities directly related thereto.
Commencement Date See Section 3 Rent Commencement Date: Commencement Date subject
to Section 4.
Expiration Date June 14, 2010 Extension Options: One five (5) year
</TABLE>
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Operating Expenses (See Section 8): Tenant's
Share is 100% of Operating Expenses
1A. SPECIAL LEASE TERMS. The following additional Lease terms shall apply. To
the extent of any inconsistency between this Section 1A and the other
provisions of this Lease, this Section 1A shall control.
1A.1 IMPROVEMENT OF PREMISES.
1A.1.1 INITIAL IMPROVEMENTS. Landlord agrees to perform the
following work in subparagraphs (a) and (b) below on behalf of
Tenant at Landlord's cost and expense prior to Lease
Commencement. Landlord will complete the work described in
subparagraph (c) below in a timely manner after the permit is
issued and work can begin:
a) Provide all new gas HVAC units on both the downstairs
assembly area and the upstairs office area.
b) Repair window seals throughout, and/or replace
windows where required.
c) Provide a complete parking lot revision as specified
in Section 24.
1A.1.2 SECONDARY TENANT IMPROVEMENTS. Additionally, Landlord
agrees to perform the following work, under acceptable terms
and conditions to both parties, at Tenant's sole cost and
expense, or to allow Tenant to perform the following work at
Tenant's sole cost and expense. In the event Tenant elects to
have Landlord perform the following work at Landlord's cost,
then the monthly rent shall be adjusted upward by the cost of
the improvements at the interest rate set forth in Section
33.8, amortized over the remaining lease term. The amount of
Secondary Tenant Improvements that the Landlord is willing to
amortize is limited to one hundred and fifty thousand dollars
($150,000). Costs of such improvements in excess of $150,000
shall be paid to Landlord by Tenant upon completion of the
work. The following Tenant improvements have been approved by
Landlord and Tenant shall not be required to remove these
improvements at the termination or expiration of the Lease:
a) Construct the low bay mezzanine space into a/c
assembly area complete with a drop ceiling, 75 foot
candles of lighting, sprinklered, VCT or comparable
flooring and SO power drops.
b) Sheetrock, tape and paint all walls in the low-bay
assembly area.
c) Improve lighting in the high-bay warehouse area to 75
foot candles.
d) Upgrade lunchroom and rest rooms in office area.
e) Add or expand existing rest rooms on the first floor,
location subject to Landlord approval.
f) Add or expand existing rest rooms in the high-bay
area for manufacturing to accommodate approximately
100 employees.
g) Remove approximately 10 offices in the office area
(subject to Landlord's consent).
h) Demolish walls in low-bay area.
i) Re-configure the lunch room into office or lab space.
j) Construct a new lunch room in the southeast corner of
the first floor (assembly space) near the main
entrance to accommodate approximately 160 employees.
k) Add air conditioning (at Tenant's option) to the
high-bay warehouse.
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1A.2 MEASUREMENT. The RSF contained in the Premises has been
determined under this Lease to be 78,676 square feet based
upon a measurement equal to the "Construction Area" (for a
single-tenant building), as defined in the Building Owners and
Managers Association International (BOMA) American National
Standard Method for Measuring Floor Area in Office Buildings,
which measurement Landlord and Tenant accept and approve.
Landlord and Tenant further acknowledge and agree that any
calculation of Base Monthly Rent on a per RSF basis is for
convenience of calculation purposes only in order to determine
the Base Monthly Rent. Any actual measurement of the square
footage or rentable square footage of the Premises and
Building shall not be relevant to or control the calculation
of Base Monthly Rent.
1A.3 SIGNAGE. LANDLORD SHALL ALLOW TENANT TO INSTALL EXTERIOR
BUILDING SIGNAGE IDENTIFYING TENANT ON THE BUILDING. SAID
SIGNAGE IS SUBJECT TO CITY OF REDMOND APPROVAL.
2. PREMISES. Landlord agrees to lease to Tenant and Tenant agrees to lease
from Landlord the Premises described on EXHIBIT A-1 and consisting of
approximately the RSF designated in Section 1. The Premises are the
entirety of the building (the "Building"), located on the real property
described on EXHIBIT A-2 ("Property").
3. TERM.
3.1 The term of this Lease ("Term") shall commence on the later of
(1) June 15, 2000, or (2) fifteen days after after Landlord's
work set forth in Section 1A.1.1 above is completed.
3.2 The Term shall expire on the Expiration Date set forth in
Section 1, unless sooner terminated as provided in this Lease.
4. CONSTRUCTION OF PREMISES; EARLY POSSESSION; DELAYED DELIVERY OF
POSSESSION.
4.1 Any improvements to or construction on the Premises shall be
carried out in accordance with applicable work documents
approved as provided for herein.
4.2 If Landlord permits Tenant to occupy the Premises prior to the
Commencement Date set forth in Section 1, the Commencement
Date shall be such date of occupancy. Tenant's occupancy prior
to the originally Scheduled Commencement Date shall be subject
to all the provisions of this Lease and shall not advance the
Expiration Date. In addition, the provisions of Section 14 of
this Lease shall apply during the period commencing on the
first date upon which Tenant or its employees, agents, or
contractors are present on the Premises.
4.3 If Landlord for any reason cannot deliver possession of the
Premises to Tenant at the Commencement Date in addition to the
provisions of the Landlord's Construction Agreement relating
to such delay, the following shall occur: (i) the Commencement
Date shall be the date on which possession of the Premises is
delivered to Tenant, (ii) this Lease shall not be void or
voidable, nor shall Landlord be liable to Tenant for any loss
or damage resulting therefrom, and (iii) the Rent Commencement
Date shall be delayed and shall commence on the delayed
Commencement Date, except as provided in Section 4.4.
4.4 If any act or failure to act by Tenant causes any delay in
Landlord's completion of the Premises, thereby delaying
Tenant's occupancy of the Premises beyond June 1, 2000, then
Landlord may at its option require Tenant to commence payment
of Rent on June 1, 2000, notwithstanding such delay in
delivery of possession.
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5. RENT.
5.1 Tenant shall pay to Landlord the Base Monthly Rent specified
in Section 1 and the Additional Rent as set forth in Section 8
and elsewhere in this Lease (the Base Monthly Rent and the
Additional Rent are collectively referred to as "Rent"). Rent
shall be paid in advance, on or before the first day of each
calendar month of the Lease Term.
5.2 Rent shall be paid without prior notice, demand, set off,
counterclaim, deduction or defense and, except as otherwise
expressly provided in this Lease, without abatement or
suspension. Any such abatement or suspension shall be null and
void upon any default by Tenant hereunder, and Tenant shall
thereafter upon Landlord's demand pay to Landlord 200% of the
amount of Rent abated or suspended.
5.3 Payment of Rent shall begin on the Rent Commencement Date set
forth in Section 1, subject to Section 4. Rent for any period
during the Lease term that is for less than one month shall be
prorated for the actual number of days in such period.
5.4 All Rent shall be paid to Landlord at the address for notices
set forth in Section 1, in lawful money of the United States
of America, or to such other person or at such other place as
Landlord may from time to time designate in writing.
6. PREPAID RENT AND SECURITY DEPOSIT.
6.1 Upon execution of this Lease, Tenant shall pay to landlord the
First Months Rent. The Security Deposit set forth in Section 1
shall not be due until the first day of year five (5) of this
Lease (the Prepaid Rent and the Security Deposit being
collectively referred to as the "Deposit").
6.2 Landlord shall have the right to all or any of the Deposit to
cure any Default by Tenant under this Lease or to compensate
Landlord for any damage sustained by it resulting from such
Default. In the event of any such application of the Deposit,
Tenant shall, on demand, immediately pay to Landlord the
amount necessary to replenish the Deposit to the amount set
forth in Section 1. The Security Deposit will not be used to
remove the approved Tenant Improvements.
6.3 If Tenant is not in Default at the expiration or termination
of this Lease, Landlord shall return the remaining Security
Deposit to Tenant, less any amounts necessary to return the
Premises and the approved Tenant Improvements to their
original condition, reasonable wear and tear excepted.
Approved Tenant Improvements will not need to be removed from
the Premises pursuant to Section 1A.1.2 above).
6.4 In the event this Lease is terminated before the end of the
Term for any reason, any Rent paid for any period after the
date of such termination shall be treated as an addition to
the Security Deposit.
6.5 Landlord's obligations with respect to the Security Deposit
are those of a debtor and not a trustee. Landlord may maintain
the security deposit separate from Landlord's general funds or
may commingle the Security Deposit with other funds of
Landlord. No interest shall accrue for Tenant on the Deposit.
7. USE OF PREMISES.
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7.1 Tenant shall use the Premises only for the purpose set forth
in Section 1. Tenant acknowledges that it has determined to
its satisfaction that the Premises can be used for those
purposes. Tenant waives any right to terminate this Lease in
the event the Premises cannot be used for such purposes during
the Term. The Premises may not be used for any other purpose
without Landlord's written consent.
7.2 Tenant shall not do or permit anything to be done in or about
the Premises or bring or keep anything therein which will in
any way increase the cost of or affect any fire or other
insurance upon the Building or any part thereof or any of its
contents, or cause cancellation of any insurance policy
covering the Building or any part thereof or any of its
contents.
7.3 Tenant shall not use or allow the Premises to be used for any
unlawful purpose or in any way constituting a nuisance.
8. ADDITIONAL RENT FOR OPERATING EXPENSES.
8.1 TENANT PAYMENT. Tenant shall pay, as Additional Rent, all
Operating Expenses. Operating Expenses shall be payable on or
before the first day of the first full calendar month of the
Term or upon the Commencement Date, whichever first occurs,
and on the first day of each successive calendar month
thereafter during the Term in the same manner as Base Monthly
Rent.
8.2 ACCOUNTING PERIOD. An accounting period is a calendar year;
except the first accounting period shall commence on the
Commencement Date and end in December 31 of the same calendar
year. The last accounting period shall end on the Expiration
Date of the Lease Term. Annualized Operating Expenses shall be
prorated on a per diem basis for any accounting period that is
less than a full calendar year.
8.3 ADJUSTMENT. Landlord can adjust the Operating Expenses at the
commencement of each new accounting period throughout the
Lease term, whereupon Tenant's Additional Rent shall be
adjusted accordingly. Prior to each January 1 of the Term,
Landlord shall furnish Tenant a written statement of the
estimated monthly Operating Expenses for the coming calendar
year. The estimated monthly Operating Expenses for the period
before the first January 1 after the Commencement Date will be
provided by Landlord to Tenant no later than 90 days prior to
the Commencement Date. Landlord may, by written notice to
Tenant, revise its estimate of Operating Expenses from time to
time by written notice to Tenant, following which notice
Tenant shall increase or decrease, as the case may be, the
Additional Rent for the remainder of that accounting period.
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8.4 RECONCILIATION. Within 90 days after each January 1 during the
Term, or as soon thereafter as practicable, Landlord shall
deliver to Tenant a written statement setting forth the actual
Operating Expenses during the preceding calendar year (or
portion of such calendar year after the Commencement Date). To
the extent actual Operating Expenses exceeded the estimated
Operating Expenses paid by Tenant, Tenant shall pay Additional
Rent to Landlord within 30 days after receipt of such
statement by Tenant, together with interest at the rate set
forth in Section 33.8. To the extent actual Operating Expenses
were less than the estimated Operating Expenses paid by
Tenant, Tenant shall receive a credit against its next payable
Rent or such amount shall otherwise be refunded to Tenant as
Landlord determines in its sole discretion.
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8.5 DEFINITIONS. "Operating Expenses" means all expenses and
charges incurred by Landlord in the operation of the Building
and Property, as a first-class facility, including without
limitation the following costs by way of illustration: (i) all
real property taxes, assessments and other general or special
charges levied during the Term by any public, governmental or
quasi-governmental authority against the real or personal
property included in the Building or Property, including
without limitation Landlord's personal property used in the
maintenance, repair or operation of the Building or the
Property, or any other tax on the leasing of the Building or
in the rents from the Building (other than federal, state or
local income or franchise tax); (ii) any and all assessments,
fees, charges and impositions Landlord must pay for the
Building and Property, transportation or any other improvement
monitoring or management plans, or any other covenant,
condition or reciprocal easement agreements; (iii)
electricity, gas and similar energy sources, refuse
collection, water, sewer and other utilities' services for the
Building and the Property; (iv) all licenses, permits and
inspection fees, property management fees paid to independent
or affiliated contractors or to Landlord, and legal,
accounting and other professional expenses; (v) all costs and
expenses relating to the Premises Maintenance Obligations (as
defined in Section 9.1), including reasonable reserves; (vi)
all costs and expenses relating to the Premises Services
Obligations (as defined in Section 9.2), including reasonable
reserves; (vii) all costs of improvements or alterations to
the Building and Property required by Laws, or to save labor,
or to reduce Operating Expenses; (viii) all premiums and
deductibles for liability, property damage, casualty,
automobile, rental loss, compensation or other insurance
maintained by Landlord for the Building or Property; (ix) the
cost (amortized over such reasonable period of time as
Landlord shall determine together with market rate interest as
reasonably determined by Landlord on the unamortized balance)
of any capital improvements made to the Property or Building
by Landlord for the replacement of any Building equipment
needed to operate the Building at the same quality levels as
prior to replacement; (x) costs incurred in the management of
the Building and Property (including supplies, wages and
salaries of employees used in the management, operation and
maintenance thereof and payroll taxes and similar governmental
charges with respect thereto, and Building management office
rental, if any) commensurate with the costs charged tenants
for management of similar buildings with similar tenants in
the Bellevue/Redmond area; and (xi) any other expense or
charge whether or not described above that in accordance with
generally accepted accounting and management practices is
properly an expense of maintaining, operating or repairing the
Building or Property. Operating Expenses shall not include
depreciation on the Building or equipment therein, Landlord's
executive salaries, real estate brokers' commissions, and
costs or expenses for which Landlord is reimbursed or
indemnified, by an insurer or condemnor. Except as provided
for above, Landlord shall not collect more than 100% of
Operating Expenses and shall not recover any item of cost more
than once.
8.6 TENANT OBLIGATION. Landlord shall have the same rights with
respect to Tenant's nonpayment of Operating Expenses as
required under this Lease as it has with respect to any other
nonpayment of Rent under this Lease.
9. PREMISES MAINTENANCE AND SERVICES OBLIGATIONS.
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9.1 PREMISES MAINTENANCE OBLIGATIONS. Landlord shall cause to be
performed all repairs, maintenance, cleaning, replacements,
resurfacing and monitoring to the roof membrane, roof,
irrigation system, patios, decks, exterior finishes and
painting, exterior windows, parking areas, and grounds of the
Premises and the Building. Tenant shall cause to be performed
all repairs, maintenance, cleaning, replacements, resurfacing
and monitoring of all other parts and areas of the Premises,
Building and Property, including, without limitation, the
elevator equipment and system, the signs, interior windows,
doors, skylights, service areas, interior finishes and
painting, heating, ventilating and air conditioning systems,
cleaning and refuse removal systems, and similar items. The
Landlord's obligations shall include establishing reserves
(but excluding the telephone, data, cable television,
satellite transmission, computer and security systems of the
Premises), and any other reasonable and necessary maintenance,
repair and replacement (but excluding Tenant's obligations set
forth above and trade fixtures) required to keep the Premises,
Building and Property in first class order, condition and
repair and in compliance with all service and maintenance
requirements imposed by any warranty, service or maintenance
contract in effect for any portion of the Premises, building
or Property (collectively, "Premises Maintenance
Obligations").
9.2 PREMISES SERVICES OBLIGATIONS. Landlord shall arrange for and
cause to be provided, all services to the Premises, Building
and Property of a continuing nature, including without
limitation, janitorial, landscape and irrigation system
maintenance, parking lot sweeping and maintenance, window
washing, rubbish removal, maintenance of the heating,
ventilating, and air conditioning systems, property management
services and other similar desired and necessary services (but
excluding telephone, cable television, data transmission,
satellite transmission, and security system services or
computer cabling or wiring) (collectively "Premises Services
Obligations").
9.3 OPERATING EXPENSE. In the manner and to the extent provided in
Section 8, any and all costs arising from Landlord's
performance of the Premises Maintenance and Services
Obligations shall be paid in full by Tenant as Additional Rent
and Operating Expenses under this Lease.
9.4 DEFAULT. Landlord shall perform Landlord's Premises
Maintenance and Service Obligations diligently and promptly as
circumstances warrant, but so long as Landlord acts with such
diligence, Landlord shall not be liable for any failure to
perform Landlord's Premises Maintenance and Services
Obligations unless such failure shall persist for the period
beyond that cure period stated in Section 18.2 after written
notice of the failure to perform such Premises Maintenance and
Services Obligations is given to Landlord by Tenant. Tenant
shall perform Tenant's Premises Maintenance Obligations
diligently and promptly as circumstances warrant. Failure to
do so shall constitute a default under Section 18.1, subject
to the cure periods provided for therein.
9.5 SURRENDER. Tenant shall surrender the Premises to Landlord
upon the expiration or sooner termination of this Lease, in
the same condition as when received or as Tenant has modified
the Premises with Landlord approval, excluding ordinary wear
and tear. Upon expiration or termination of this Lease, any
and all damage done to the Premises as a result of Tenant's
removal of any personal property, fixtures or furnishings
shall be repaired and the Premises restored, at Tenant's
expense.
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9.6 NO OBLIGATION TO ALTER. Except as provided elsewhere in this
Lease, Landlord shall have no obligation whatsoever to alter,
remodel, improve, repair, decorate, or paint the Premises or
any part thereof, including without limitation any obligation
to alter or remodel the Premises as may be required under
the Americans with Disabilities Act. Tenant affirms that
Landlord has made no representations to Tenant about the
condition of the Premises or the Building, except as
specifically herein set forth.
9.7 TENANT WAIVER. Tenant waives the right to make repairs at
Landlord's expense under any law, statute, or ordinance now or
hereafter in effect.
10. STRUCTURAL AND UTILITY MAINTENANCE AND REPAIR RESPONSIBILITY.
10.1 STRUCTURAL REPAIRS. Subject to the provisions of Section 15,
Landlord shall, at Landlord's expense, maintain, repair and
replace the roof structure (excluding membrane (except that,
if the average costs to maintain, repair and replace the
membrane incurred by Tenant over the term (or extension of
term, if extended) exceed $5,000 a year, then at the end of
the Term Landlord will reimburse Tenant for the aggregate
amount of the annual overage in excess of $5,000)), all
exterior and bearing walls, the floor slab and the foundation
of the Building ("Structural Repairs"). Landlord shall give
reasonable advance notice to Tenant of such repairs to the
extent practical and feasible.
10.2 UTILITIES REPAIRS. Subject to the provisions of Section 15,
Landlord shall, at Landlord's expense, if required, or cause
the utility purveyor to maintain, repair and replace the
underground electrical, water, sewer and plumbing utility
systems serving the Buildings insofar as such utility systems
are located outside the Building between the public right of
way and the Building, and the conduits and pipes or wiring
located therein and forming a part thereof, ("Utility Systems
Repairs").
10.3 TENANT'S RESPONSIBILITY. To the extent that such Structural
Repairs or Utility Systems Repairs are necessitated in part or
in whole by the act, neglect, fault, or omission of any duty
by the Tenant, its agents, servants, employees, or invitees,
Tenant shall pay to Landlord the reasonable costs of such
Structural Repairs or Utility Systems Repairs, within thirty
(30) days after Landlord's submission of a reasonably detailed
invoice for the same, but only to the extent such costs were
necessitated by the act, neglect, fault or omission of any
duty by the Tenant. Landlord shall not be liable for any
failure to make any such Structural Repairs or Utility Systems
Repairs, unless such failure shall persist after Landlord's
receipt of written notice from Tenant and beyond the cure
periods set forth in Section 18.2.
11. UTILITIES AND SERVICES.
11.1 LANDLORD RESPONSIBILITY. Landlord shall arrange for and cause
to be provided, at Tenant's expense, heat, light, water,
electricity, gas and any and all other utility services,
excluding, however, telecommunications and data communications
services, telephone service, cable television service,
satellite transmission service, if any, or computer cabling or
wiring.
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11.2 TENANT RESPONSIBILITY. Tenant shall pay, as Additional Rent,
prior to delinquency, for heat, water, electricity, gas and
any and all other utility services supplied to the Premises
and will pay any required deposits therefor. Tenant shall keep
the temperature of the Building at such level as may
reasonably be requested by Landlord to protect the Building.
At Tenant's request, Tenant may be billed directly by utility
providers for some or all of utility services provided to the
Building and Premises. In such event those utility expenses
will not be considered as Operating Expenses or Additional
Rent. However, if Tenant fails to timely pay for such utility
services, Landlord shall have the right to pay such utility
expenses on behalf of Tenant and Tenant shall reimburse
Landlord as Additional Rent for such payment within five (5)
days of Landlord's demand, together with late fees and
interest as provided for in Section 33.8. In addition, if
Tenant fails to timely pay any utility expenses, Tenant shall
forfeit at Landlord's option the right to pay utility expenses
through direct billing and utility expenses shall then be
included as Operating Expenses.
11.3 FAILURE OF SERVICES. In the event of any failure or
interruption of such utilities and services, Landlord shall
diligently attempt to resume service promptly. Tenant shall
not be entitled to any abatement or reduction of Rent by
reason of any failure or interruption of utilities or
services, no eviction of Tenant shall result from any such
failure or interruption, and Tenant shall not be relieved from
the performance of any obligation in this Lease because of
such failure or interruption.
12. LIMITS ON LANDLORD'S LIABILITY. Landlord's liability in respect to its
obligations under Section 9, 10 and 11 to repair and maintain portions
of the Premises and Building and to provide utilities and services
(collectively, "Repair and Service Obligations") is subject to the
following limitations.
12.1 CIRCUMSTANCES BEYOND LANDLORD'S CONTROL. Landlord shall not be
liable for any failure of Repair and Service Obligations when
such failure is caused by (i) strikes, lockouts or other labor
disturbance or labor dispute of any character, (ii)
governmental regulation, moratorium or other governmental
action, (iii) inability despite the exercise of reasonable
diligence to obtain electricity, water or fuel from the
providers thereof, (iv) acts of God or (v) any other cause
beyond Landlord's reasonable control.
12.2 LANDLORD LIABILITY. Subject to Section 12.1, Landlord shall
not be liable for any failure of Repair and Service
Obligations, unless such failure shall persist for an
unreasonable time after written notice of the need of such
repairs or maintenance or of the interruption of services is
given to Landlord by Tenant. Landlord shall not be liable for
any injury to or interference with Tenant's business arising
from the making of any repairs, alterations, or improvements
in or to any portion of the Building, the Premises, or the
Property, or to fixtures, appurtenances, and equipment
therein, or the failure of Repair and Service Obligations.
Without limiting the generality of this Section 12, in no
event shall Landlord have any liability for consequential
damages resulting from any act or omission of Landlord in
respect of its Repair and Service Obligations, even if
Landlord has been advised of the possibility of such
consequential damages.
12.3 RENT ABATEMENT. Except as specifically provided in Sections 15
and 16, there shall be no abatement of Rent in any
circumstances under this Lease.
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13. ALTERATIONS AND ADDITIONS BY TENANT. With prior written consent of
Landlord, Tenant may make at its expense additional improvements or
alterations to the Premises. Any repairs or new construction by Tenant
shall be done in conformity with plans and specifications approved by
Landlord, by contractors approved by Landlord, and subject to
Landlord's reasonable rules and regulations regarding such
construction. All work performed shall be done lien-free in a
workmanlike manner and shall become the property of Landlord. Landlord
may require that Tenant provide to Landlord, at Tenant's expense, a
lien and completion bond in an amount equal to 150% of the estimated
cost of any improvements, additions, or alterations in the Premises.
Landlord shall not unreasonably withhold its consent to Tenant's
proposed alterations or improvements if the conditions of this Section
13 are satisfied. All such alterations and improvements shall become
the property of Landlord; provided that Landlord may require Tenant to
remove any improvements or alterations at the expiration or termination
of the Term (except those improvements which Landlord has agreed may
remain, either as provided herein or after the date hereof), such
removal to occur at Tenant's expense; and Tenant shall repair all
damage to the Premises or Building occurring as a result of such
removal. In the event Tenant fails to remove any improvements or
alterations as required by Landlord or repair any damage occurring
during such removal, Landlord shall be entitled to remove any
improvements or alterations or make such repairs, at Tenant's expense,
and shall further be entitled to draw upon the Deposit.
14. INSURANCE; INDEMNITY.
14.1 TENANT WAIVER. Landlord shall not be liable to Tenant, and
Tenant hereby waives all claims against Landlord, for injury
or damage to any person or property in or about the Premises,
Building, Property or Common Areas by or from any cause
whatsoever, including without limitation any acts or omissions
of any other tenants, licensees or invitees of the Building.
14.2 TENANT INDEMNITY. Tenant shall indemnify and defend (using
legal counsel acceptable to Landlord) Landlord and hold
harmless, from and against any and all loss, cost, damage,
liability and expense (including reasonable attorneys' fees)
whatsoever that may arise out of or in connection with
Tenant's occupation, use or improvement of the Premises, or
that of its employees, agents or contractors, or Tenant's
breach of its obligations under this Lease. To the extent
necessary to fully indemnify Landlord from claims made by
Tenant or its employees, this indemnity constitutes a waiver
of Tenant's immunity under the Washington Industrial Act, RCW
Title 51. This indemnity shall survive the expiration or
termination of the Term. Landlord and Tenant acknowledge that
this indemnity obligation has been negotiated and agreed to by
them.
/s/ [ILLEGIBLE]
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Landlord's Initials Tenant's Initials
14.3 LANDLORD RESPONSIBILITY. The exculpation, release and
indemnity provisions of Sections 14.1 and 14.2 shall not apply
to the extent the subject claims thereunder were caused by
Landlord's gross negligence or willful misconduct. However, in
no event shall Landlord be liable to Tenant for consequential
damages.
14.4 TENANT INSURANCE. Tenant shall procure and maintain throughout
the Term at Tenant's expense, the following insurance:
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14.4.1 Comprehensive general public liability insurance,
insuring Tenant against liability arising out of the Lease and
the use, occupancy, or maintenance of the Premises and all
areas appurtenant thereto. Such insurance shall be in the
amount of not less than $5,000,000 combined single limit for
injury to or death of one or more persons in an occurrence,
and for damage to tangible property (including loss of use) in
an occurrence (or in such amount as Landlord determines in its
reasonable discretion). Such policy shall insure the
operations of independent contractors and contractual
liability (covering the indemnity in Section 14.2) and shall;
(1) name Landlord as an additional insured, (ii) provide a
waiver of subrogation endorsements with respect to Landlord,
and (iii) provide that it is primary and noncontributing with
any insurance in force or on behalf of Landlord.
14.4.2 Standard form property insurance insuring against the
perils of fire, extended coverage, vandalism, malicious
mischief, special extended coverage ("All-Risk") and sprinkler
leakage. This insurance policy shall be upon all personal
property for which Tenant is legally liable or that was
installed at Tenant's expense, and that is located in the
Building or Premises, including without limitation all
Tenant's furnishings, fixtures, furniture, fittings, and
equipment and all improvements to the Premises installed by
Tenant, in an amount not less than 90% of the full replacement
cost thereof. In the event of a dispute as to the amount of
full replacement cost, the decision of Landlord or any
mortgagees of Landlord shall be conclusive. Such policy shall
also include business interruption coverage, covering direct
or indirect loss of Tenant's earnings attributable to Tenant's
inability to use fully or obtain access to the Premises or
Building, in an amount as will properly reimburse Tenant. Such
policy shall name Landlord and any mortgagees to Landlord as
insured parties, as their respective interests may appear.
14.4.3 Workman's Compensation and Employer's Insurance (as
required by state law).
14.4.4 Any other form or forms of insurance as Tenant or
Landlord or any mortgagees of Landlord may reasonably require
from time to time in form, in amounts and for insurance risks
against which a prudent tenant would protect itself.
14.5 POLICIES. All policies of insurance to be obtained by Tenant
hereunder shall be in a form satisfactory to Landlord and
shall be issued by insurance companies holding a General
Policyholder Rating of "A" and a Financial Rating of "X" or
better in the most current issue of Best's Insurance Guide.
Tenant shall provide Landlord with certificates of such
insurance. No such policy shall be cancelable or reducible in
coverage except after 30 days' prior written notice to
Landlord. Tenant shall, within ten days prior to the
expiration of such policies, furnish Landlord with renewals
or "binders" thereof, or Landlord may order such insurance and
charge the cost thereof to Tenant as Additional Rent.
14.6 LANDLORD'S INSURANCE. Landlord shall maintain liability and
casualty insurance for the Building and Property adequate in
Landlord's judgment to cover (with deductibles deemed
appropriate by Landlord) the risks customarily insured against
by owners of properties similar to the Building.
14.7 PROCEEDS. The proceeds of any insurance policies maintained by
or for the benefit of Landlord shall belong to and be paid
over to Landlord. Any interest or right of Tenant in any such
proceeds shall be subject to Landlord's interest and right in
such proceeds.
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14.8 WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Tenant and Landlord each waives its entire
right of recovery, claims, actions, or causes of action
against the other for loss or damage to the Premises,
Building, or Property or any personal property of such party
therein that is caused by or incident to the perils covered by
normal extended coverage clauses of standard fire insurance
policies carried by the waiving party and in force at the time
of damage or loss, including without limitation deductibles
and retentions under any such insurance policies in effect,
and self-insurance against any such perils. Tenant and
Landlord each waives any right of subrogation it may have
against the other party to the extent of recovery under any
such insurance, and shall cause each insurance policy obtained
by it to provide that the insurance company waives all right
to recovery by way of subrogation against the other party in
connection with any such loss or damage. If either Landlord or
Tenant is unable to obtain its insurer's permission to waive
any claim against the other party, such party shall promptly
notify the other party of such inability.
14.9 NOTICE OF ACCIDENTS. Tenant shall promptly notify Landlord of
any casualty or accident occurring in or about the Premises.
15. DESTRUCTION.
15.1 If the Premises or the Building is destroyed by fire,
earthquake, or other casualty to the extent that they are
untenantable in whole or in part as reasonably determined by
Landlord, or if any destruction of the Premises or Building
occurs in the last two (2) years of the Term, then Landlord
shall have the right but not the obligation to proceed with
reasonable diligence to rebuild and restore the Premises or
the Building or such part thereof.
15.2 Landlord shall within 30 days after such destruction or injury
notify Tenant whether Landlord intends to rebuild. If Landlord
fails to notify Tenant within such period, then this Lease
shall terminate as the end of such period.
15.3 During the period from destruction or damage until restoration
(or termination of this Lease), Rent shall be abated in the
same ratio as that portion of the Premises which Landlord
determined is unfit for occupancy shall bear to the whole
Premises, to the extent that Landlord receives the proceeds of
Tenant's business interruption insurance. If damage is due to
the fault or neglect of Tenant or its agents, employees.
invitees, or licensees, there shall be no abatement of Rent.
15.4 Landlord shall not be required to repair any injury or damage
by fire or other cause, or to make any repairs or replacements
of any panels, decoration, office fixtures, paintings, floor
covering, or any other improvements to the Premises installed
by Tenant. Instead, if Landlord repairs or rebuilds the
Premises under this Section 15, Tenant shall repair or rebuild
such Tenant-installed improvements and other items of
property.
15.5 Tenant shall not be entitled to any compensation or damages
from Landlord for loss of the use of the whole or any part of
the Premises, the property of Tenant, or any inconvenience or
annoyance occasioned by such damage, repair, reconstruction,
or restoration.
16. CONDEMNATION.
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16.1 If all or part of the Premises are taken under power of
eminent domain, or sold under the threat of the exercise of
said power, this Lease shall terminate as to the part so taken
as of the date the condemning authority takes possession.
16.2 If more than 25% of the floor area of Premises is taken by
condemnation, Landlord or Tenant may, by written notice to the
other within ten days after notice of such taking, terminate
this Lease as to the remainder of the Premises as of the date
the condemning authority takes possession.
16.3 If Landlord or Tenant does not so terminate, this Lease shall
remain in effect as to such remainder, except that the Rent
shall be reduced in the proportion that the rentable floor
area taken bears to the original rentable total floor area.
However, if circumstances make abatement based on floor area
unreasonable, the Rent shall abate by a reasonable amount to
be determined by Landlord. In the event that neither Landlord
nor Tenant elects to terminate this Lease, Landlord's
responsibility to restore the remainder of the Premises shall
be limited to the amount of any condemnation award allocable
to the Premises, as determined by Landlord.
16.4 Any award for the taking of all or part of the Premises under
the power of eminent domain, including payment made under
threat of the exercise of such power, shall be the property of
Landlord, whether made as compensation for diminution in value
of the leasehold or for the taking of the fee or as severance
damages. Tenant shall only be entitled to such compensation as
may be separately awarded or recoverable by Tenant in Tenant's
own right for the loss of or damage to improvements to the
Premises installed by Tenant, Tenant's trade fixtures and
removable personal property. Landlord shall not be liable to
Tenant for the loss of the use of all or any part of the
Premises taken by condemnation.
16.5 Landlord shall have the exclusive authority to grant
possession and use to the condemning authority and to
negotiate and settle all issues of just compensation or, in
the alternative, to conduct litigation concerning such issues;
provided however, that Landlord shall not enter into any
settlement of any separate award that may be made to Tenant as
described in Section 16.4 without Tenant's prior approval of
such settlement, which approval shall not be unreasonably
withheld or delayed.
17. ASSIGNMENT AND SUBLETTING.
17.1 Tenant shall not assign this Lease, or sublet the Premises or
any part thereof, either by operation of law or otherwise, or
permit any other party to occupy all or any part of the
Premises, without first obtaining the written consent of
Landlord, such consent shall not be unreasonably withheld or
delayed.. Tenant shall propose such assignment or sublease by
written notice to Landlord, and such notice shall specify an
effective date which shall be the first day of a calendar
month and shall be not less than 30 days after the date of
such notice. This Lease shall not be assignable by operation
of law. Tenant shall further provide to Landlord other
information and creditworthiness materials concerning any
proposed assignee or sublessee as is requested by Landlord.
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17.2 If Tenant is a corporation, any transfer of this Lease from
Tenant by merger, consolidation, or liquidation, or any change
in the ownership of or power to vote 50% or more of the
outstanding voting stock of Tenant shall constitute an
assignment under this Lease. If Tenant is a partnership or
limited liability company, any change in the identity or
majority ownership of partners or members in Tenant serving as
general partner or manager or owning 50% or more of the
outstanding economic interests in such entity shall constitute
an assignment under this Lease.
17.3 In the alternative to consenting to a proposed assignment or
sublease, Landlord shall have the right to recapture the
Premises, or applicable portion thereof. Landlord may exercise
such right by notice to Tenant within 20 days after receipt of
Tenant's notice. Such recapture shall terminate this Lease as
to the applicable portion of the Premises effective on the
effective date proposed in Tenant's notice.
17.4 If Landlord elects not to recapture and thereafter elects to
give its consent to the proposed assignment or sublease, (i)
Landlord may charge Tenant a reasonable sum to reimburse
Landlord for legal and administrative costs incurred in
connection with such consent; (ii) in the event of a sublease,
Landlord and Tenant shall share equally in any rent and other
proceeds paid to Tenant in excess of the Rent to be paid to
Landlord under this Lease; and (iii) in the event of an
assignment or a sublease, Tenant shall remain liable to
Landlord for the performance of all Tenant's obligations under
this Lease.
17.5 If the Lease is assigned pursuant to the provisions of said
Revised Bankruptcy Act, 11 U.S.C. Section 101 et seq., any and
all consideration paid or payable in connection with such
assignment shall be Landlord's exclusive property and paid or
delivered to Landlord, and shall not constitute the property
of tenant or tenant's estate on bankruptcy. Any person or
entity to whom the Lease is assigned pursuant to the Revised
Bankruptcy Act shall be deemed automatically to have assumed
all of Tenant's obligations under this Lease.
17.6 In the event of any sale of the Building or Property, or any
assignment of this Lease by Landlord, Landlord shall be
relieved of all liability under this Lease arising out of any
act, occurrence, or omission occurring after sale or
assignment; and the purchaser or assignee at such sale or
assignment or any subsequent sale or assignment of Lease, the
Property, or Building, shall be deemed without any further
agreement to have assumed all of the obligations of the
Landlord under this Lease accruing after the date of such sale
or assignment.
17.7 Subject to the provisions of this Section 17, this Lease shall
be binding upon and inure to the benefit of the parties, their
heirs, successors and assigns.
18. DEFAULT.
18.1 The occurrence of any one or more of the following events
shall constitute a material default and breach of the Lease by
Tenant ("Default"):
18.1.1 vacation or abandonment of all or any portion of the
Premises;
18.1.2 failure by Tenant to make any payment required as and
when due, where such failure shall continue after three days'
written notice from Landlord;
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18.1.3 failure by Tenant to observe or perform any of the
covenants, conditions, or provisions of this Lease, other than
the making of any payment, where such failure shall continue
after 30 days' written notice from Landlord; or
18.1.4 (i) the making by Tenant of any general assignment or
general arrangement for the benefit of creditors; (ii) the
filing by or against Tenant of a petition in bankruptcy,
including reorganization or arrangement, unless, in the case
of a petition filed against Tenant, the same is dismissed
within 30 days; (iii) the appointment of a trustee or receiver
to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease;
(iv) the seizure by any department of any governmental or any
officer thereof of the business or property of Tenant; and (v)
adjudication that Tenant is bankrupt.
18.2 Tenant shall notify Landlord promptly of any Default by Tenant
(or event or occurrence which, with the passage of time, the
giving of notice, or both, would become a Default) that by its
nature is not necessarily known to Landlord.
18.3 Landlord shall be in default if it fails to observe or perform
any of the covenants, conditions, or provisions of this Lease,
where such failure shall continue after 30 days' written
notice from Tenant; provided, however, that if the nature of
Landlord's obligation is such that more than 30 days are
required for performance, Landlord shall not be in default if
Landlord commences performance within 30 days after Tenant's
notice and thereafter completes such performance diligently
and within a reasonable time. Tenant shall copy Landlord's
lender with any such notice of default, if Tenant has been
provided with the name and address of any such lender.
18.4 In no event shall a default by Landlord under this Lease give
rise to any right of Tenant to terminate this Lease or
withhold or offset the payment of Base Monthly Rent or
Additional Rent. The obligations of Tenant to pay Base Monthly
Rent and Additional Rent shall continue unaffected in all
events unless suspended or terminated pursuant to an express
provision of this Lease.
19. REMEDIES IN DEFAULT.
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19.1 Upon a default by Tenant, Landlord shall have the following
remedies, in addition to all other rights and remedies
provided by law or otherwise provided in this Lease, to which
Landlord may resort cumulatively or in the alternative:
19.1.1 Landlord may continue this Lease in full force and
effect, and this Lease shall continue in full force and effect
as long as Landlord does not terminate this Lease, and
Landlord shall have the right to collect Rent when due.
19.1.2 Landlord may terminate Tenant's right to possession of
the Premises at any time by giving written notice to that
effect, and relet the Premises or any part thereof. Tenant
shall be liable immediately to Landlord for all costs Landlord
incurs in reletting the Premises or any part thereof,
including, without limitation, brokers' commissions, expenses
of cleaning the Premises required by the reletting, and like
costs. Reletting may be for a period shorter or longer than
the remaining term of this Lease. No act by Landlord other
than giving written notice to Tenant shall terminate this
Lease. Acts of maintenance, efforts to relet the Premises, or
the appointment of a receiver on Landlord's initiative to
protect Landlord's interest under this Lease shall not
constitute a termination of Tenant's right to possession. On
termination, Landlord has the right to remove all Tenant's
Personal Property and store same at Tenant's cost and to
recover from Tenant as damages:
(i) The worth at the time of award of unpaid Rent
and other sums due and payable which had been
earned at the time of termination; plus
(ii) The worth at the time of award of the amount by
which the unpaid Rent and other sums due and
payable which would have been payable after
termination until the time of award exceeds the
amount of such Rent loss that Tenant proves
could have been reasonably avoided; plus
(iii) The worth at the time of award of the amount by
which the unpaid Rent and other sums due and
payable for the balance of the Term after the
time of award exceeds the amount of such Rent
loss that Tenant proves could be reasonably
avoided; plus
(iv) Any other amount necessary which is to
compensate Landlord for all the detriment
proximately caused by Tenant's failure to
perform Tenant's obligations under this Lease,
or which, in the ordinary course of things,
would be likely to result therefrom, including,
without limitation, any costs or expenses
incurred by Landlord: (A) in retaking
possession of the Premises; (B) in maintaining,
repairing, preserving, restoring, replacing,
cleaning, altering or rehabilitating the
Premises or any portion thereof, including such
acts for reletting to a new tenant or tenants;
(C) for leasing commissions; and (D) necessary
or appropriate to relet the Premises; plus
(v) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may
be permitted from time to time by the laws of
the State of Washington.
19.1.3 The "worth at the time of award" of the amounts
referred to in subsections 19.1.2(i) and 19.1.2(ii) above is
computed by allowing interest at the interest rate in Section
33.8 on the unpaid Rent and other sums due and payable from
the termination date through the date of award. The "worth at
the time of award" of the amount referred to in subsection
19.1.2(iii) above is computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco
at time of award plus one percent (1%).
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19.2 Whether Landlord has elected to terminate this Lease or not,
Tenant agrees to pay Landlord the cost of recovering
possession of the Premises, the expenses of reletting, and any
other costs or damages arising out of Tenant's Default,
including without limitation the costs of removing persons and
property from the Premises, the costs of preparing or altering
the Premises for reletting, broker's commissions, and
attorneys' fees.
20. ACCESS. Tenant shall permit Landlord to enter the Premises at all
reasonable times for the purpose of inspecting, altering, and repairing
the Premises and the Building and ascertaining compliance with the
provisions of this Lease by Tenant. The existence or exercise of such
right of access shall not be construed as imposing any obligation on
Landlord to inspect, discover or correct or repair any condition in the
Premises or the Building. Landlord may also show the Premises to
prospective purchasers or tenants at reasonable times, provided that
Landlord shall not materially interfere with Tenant's business
operation.
21. HOLD-OVER TENANCY. If without execution of a new Lease or written
extension Tenant shall hold over after the expiration or termination of
the Term, with Landlord's written consent, Tenant shall be deemed to be
occupying the Premises as a Tenant from month to month, which tenancy
may be terminated as provided by law, unless the parties agree
otherwise at the time of Landlord's consent. If Tenant shall hold over
after expiration or termination of the Term without Landlord's written
consent, the Base Monthly Rent payable shall be 200% of the Base
Monthly Rent payable in the last month prior to expiration or
termination of the Term, and Tenant shall continue to pay Additional
Rent. During any such tenancy, Tenant shall continue to be bound by all
of the terms, covenants, and conditions of this Lease, insofar as
applicable.
22. COMPLIANCE WITH LAWS. Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way
conflict with any applicable law, statute, ordinance, or governmental
rule or regulation and any restrictive covenants and obligations
created by private contracts which affect the use and operation of the
Premises, Building, Common Areas or Business Park, now and hereafter in
force ("Laws"). Tenant shall at its sole cost and expense promptly
comply with all Laws, including without limitation the Americans with
Disabilities Act, and with the requirements of any board of fire
insurance underwriters or other similar bodies now or hereafter
constituted, relating to, or affecting the use or occupancy of the
Premises. Notwithstanding the foregoing, Landlord warrants and
represents that as of the Commencement Date, the Premises and Building
will be, to the best of Landlord's knowledge, in compliance with all
Laws. The judgment of any court of competent jurisdiction, or the
admission of Tenant in any action, whether Landlord be a party thereto
or not, that Tenant has violated any Law, shall be conclusive of the
fact as between Landlord and Tenant.
23. RULES AND REGULATION. Tenant shall faithfully observe and comply with
the rules and regulations that Landlord shall from time to time
promulgate with respect to the Premises, Building, their structure or
systems. Landlord reserves the right from time to time to make all
reasonable modifications to such rules and regulations. Additions and
modifications to rules and regulations shall be binding on Tenant upon
delivery of a copy of them to Tenant.
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24. PARKING. Parking on the Premises shall be revised per EXHIBIT C,
subject to City of Redmond approval, to provide a minimum of 135
parking spaces. Tenant may further maximize available parking stalls
and or truck dock access by re-striping all or a portion of the parking
lot depicted on EXHIBIT C to accommodate a higher ratio of compact
stalls, and to add tandem stalls, and Tenant will be solely responsible
for all costs and permits required to add additional stalls. Landlord
shall work with Tenant in order help to maximize its truck dock access.
Tenant's parking on the Premises shall be subject to reasonable rules
and regulations and any charges that may be established or altered by
Landlord for such parking facilities from time to time. Tenant shall
comply with any and all private and governmentally imposed parking
restrictions applicable to the Premises, including without limitation,
the requirements of all designations placed on parking stalls, such as
car pools. Tenant on the fifth month of commencement of lease term or
November 15, 2000 whichever occurs first shall have a one time right to
cancel this lease, if the Landlord is unable to secure a permit for the
revised parking by this time. Tenant shall notify Landlord in writing
within fifteen (15) days after the fifth (5th) month of this lease of
its intention to terminate. Tenant's failure to deliver such statement
within such time shall be conclusive upon Tenant that this Lease is in
full force and effect, without modification.
25. ESTOPPEL CERTIFICATES. Tenant shall execute, within ten business days
following Landlord's request, a certificate in such reasonable form as
may be required by Landlord or a prospective purchaser, mortgagee or
trust deed beneficiary, or Landlord's successor after a sale or
foreclosure, certifying: (i) the Commencement Date of this Lease, (ii)
that the Lease is unmodified and in full force and effect, (or if there
have been modifications hereto, that this Lease is in full force and
effect, and stating the date and nature of such modifications); (iii)
that there have been no current defaults under this Lease by either
Landlord or Tenant except as specified in Tenant's statement, (iv) the
dates to which the Base Monthly Rent, Additional Rent and other charges
have been paid, and (v) any other information reasonably requested by
the requesting party. Such certificate may be relied upon by Landlord
and/or such other requesting party. Tenant's failure to deliver such
statement within such time shall be conclusive upon Tenant that this
Lease is in full force and effect, without modification except to the
extent represented by Landlord, that there are no uncured defaults in
Landlord's performance under this Lease, and that not more than one
month's Rent has been paid in advance. Tenant's failure to deliver said
statement within ten business days of request, shall constitute
Tenant's Default.
26. SUBORDINATION. Tenant agrees that this Lease shall be subordinate to
the lien of any mortgage, deeds of trust, or ground leases now or
hereafter placed against the Property or Building, and to all renewals
and modifications, supplements, consolidations, and extensions thereof.
Notwithstanding the foregoing, Landlord serves the right; however, to
subordinate or cause to be subordinated any such mortgage, deed of
trust or ground lease to this Lease. Upon a foreclosure or conveyance
in lieu of foreclosure under such mortgage or deed of trust, or a
termination of such ground lease, and a demand by Landlord's successor,
Tenant shall attorn to and recognize such successor as Landlord under
this Lease. Tenant shall execute and deliver on request and in the form
requested by Landlord, any instruments reasonably necessary or
appropriate to evidence, effect or confirm such subordination. Should
Tenant fail to sign and return any such documents within ten business
days of request, Tenant shall be in Default. Tenant hereby irrevocably
appoints Landlord as attorney-in-fact of Tenant to execute, deliver and
record any such document in the name and on behalf of Tenant.
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27. REMOVAL OF PROPERTY. On expiration or other termination of this Lease,
Tenant shall remove (i) all personal property of Tenant on the
Premises, including without limitation all Tenant's furnishings,
fixtures, furniture, fittings, cabling, wiring and equipment; (ii) all
improvements to the Premises which Landlord requests be removed under
Section 13; and (iii) at Landlord's request, all non-standard or
specialty improvements made to the Premises by Landlord or Tenant.
Tenant shall repair or reimburse Landlord for the cost of repairing any
damage to the Premises resulting from the installation or removal of
such property of Tenant. All property of Tenant remaining on the
Premises after reentry or termination of this Lease shall conclusively
be deemed abandoned and may be removed by Landlord. Landlord may store
such property of Tenant in any place selected by Landlord, including
but not limited to a public warehouse, at the expense and risk of the
owner thereof, with the right to sell such stored property of Tenant
without notice to Tenant. The proceeds of such sale shall be applied
first to the cost of such sale, second to the payment of the cost of
removal and storage, if any, and third to the payment of any other
amounts that may then be due from Tenant to Landlord under this Lease,
and any balance shall be paid to Tenant.
28. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
personal property taxes payable with respect to all property of Tenant
located on the Premises or the Building and promptly upon request of
Landlord shall provide satisfactory evidence of such payment. "Personal
property taxes" under this Section 28 shall include all property taxes
assessed against the property of Tenant, whether assessed as real or
personal property.
29. NOTICES. All notices under this Lease shall be in writing. Notices
shall be effective (i) when mailed by certified mail, return receipt
requested (ii) when personally delivered, or (iii) when sent by fax, in
each case to the address or fax number of the receiving party set forth
in Section 1, Either party may change its address and fax number for
notices to the other from time to time.
30. CONDITION OF PREMISES. By taking possession of the Premises, Tenant
accepts the Premises as being in good, sanitary order, condition and
repair, and further accepts all aspects of the Premises, Building, and
Property in their present condition, AS IS, including latent defects,
without any representations or warranties, express or implied, from
Landlord.
31. HAZARDOUS SUBSTANCES.
31.1 Tenant shall not, without first obtaining Landlord's prior
written approval, generate, release, emit, store, deposit,
transport, or dispose of (collectively "Release") any
hazardous substances, sewage, petroleum products, hazardous
materials, toxic substances or any pollutants or substances,
defined as hazardous or toxic in applicable federal, state and
local laws and regulations ("Hazardous Substances") in, on or
about the Premises. In the event, and only in the event,
Landlord approves such Release of Hazardous Substances on the
Premises, such Release shall occur safely and in compliance
with all applicable federal, state, and local laws and
regulations.
31.2 Tenant shall indemnify and defend (with counsel approved by
Landlord) Landlord, and hold Landlord harmless, from and
against any and all claims, liabilities, losses, damages,
cleanup costs, and expenses (including reasonable attorneys'
fees) arising out of or in any way relating to the Release by
Tenant or any of its agents, representatives, employees or
invitees, or the presence of any Hazardous Substances in, on
or about the Premises occurring as a result of or in
connection with Tenant's use or occupancy of the Premises at
any time after the Commencement Date.
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31.3 Landlord shall have the right from time to time to enter the
Premises, Building and Property and inspect the same for the
presence of Hazardous Substances and compliance with the
provisions of this Section 31 and inspect the Premises,
Building and Property. Landlord may cause tests to be
performed for Hazardous Substances on the Premises from time
to time. Tenant shall bear the cost of the first such test in
any calendar year and any other such test that occurs upon a
reasonable suspicion by Landlord that there may be Hazardous
Substances in the Premises in violation of Tenant's
obligations under this Lease.
31.4 The provisions of this Section 31 shall survive the expiration
or termination of this Lease with respect to any occurrences
during the Term.
32. SIGNS. Tenant shall not place upon or install in windows or other
openings or exterior sides of doors or walls of the Premises any
symbols, drapes, or other materials without the written consent of
Landlord, which consent shall not be unreasonably withheld or delayed.
Tenant shall observe and comply with the requirements of all Laws.
33. GENERAL PROVISIONS.
33.1 ATTORNEYS' FEES. In the event Landlord reasonably requires the
services of any attorney in connection with any Default or
violation by Tenant of the terms of this Lease or the exercise
by Landlord of its remedies for any Default by Tenant under
this Lease, or a request by Tenant for Landlord's waiver of
any terms of this Lease or extension of time to perform or pay
any obligation of Tenant under this Lease, Tenant shall
promptly on demand reimburse Landlord for its reasonable
attorneys' fees incurred in such instance. In the event of any
litigation, arbitration or other proceeding (including
proceedings in bankruptcy and probate and on appeal) brought
to enforce or interpret or otherwise arising under this Lease,
the substantially prevailing party therein shall be entitled
to the award of its reasonable attorneys' fees, witness fees,
and court costs incurred therein and in preparation therefor.
33.2 GOVERNING LAW. This Lease shall be governed by and construed
in accordance with the laws of the State of Washington.
33.3 CUMULATIVE REMEDIES. No remedy or election under this Lease
shall be deemed exclusive but shall, wherever possible, be
cumulative with all other remedies at law or in equity.
33.4 EXHIBITS; ADDENDA. Exhibits and Addenda, if any, affixed to
this Lease are a part of and incorporated into this Lease.
33.5 INTERPRETATION. This Lease has been submitted to the scrutiny
of all parties hereto and their counsel, if desired, and shall
be given a fair and reasonable interpretation in accordance
with the words hereof, without consideration or weight being
given to its having been drafted by any party hereto or its
counsel.
33.6 JOINT OBLIGATION. If there is more than one Tenant under this
Lease, the obligations hereunder imposed upon Tenants shall be
joint and several.
33.7 KEYS. Upon expiration or termination of this Lease, Tenant
shall surrender all keys to the Premises to Landlord at the
place then fixed for payment of Rent and shall inform Landlord
of all combination locks, safes, and vaults, if any, in the
Premises.
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33.8 LATE CHARGES; INTEREST. Late payment by Tenant to Landlord of
Rent or other sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount
of which would be difficult and impractical to ascertain. Such
costs include without limitation processing and accounting
charges and late charges which may be imposed on Landlord by
the terms of any mortgage or trust deed covering the Premises.
Accordingly, Tenant shall pay to Landlord as Additional Rent a
late charge equal to five percent (5%) of such installment as
liquidated damages for such late payment, other than for time
value damages. Payment of the Rent via Tenant's delivery of a
check returned for "Insufficient Funds" shall constitute the
delinquent payment of Rent and shall be subject to the late
charge and interest provisions of this Section. In addition,
any Rent or other sums due under this Lease to Landlord that
is not paid when due shall bear interest at the rate per annum
of two percent (2%) over the prime rate in effect at U.S.
Bank, Seattle Main Office, on the day such Rent or other sum
was due. The existence or payment of charges and interest
under this Section shall not cure or limit Landlord's remedies
for any Default under this Lease. Tenant will have a one (1)
five (5) day grace period per year of the lease term that rent
will not be deemed late.
33.9 LIGHT, AIR, AND VIEW. Landlord does not guarantee the
continued present status of light, air, or view in, to or from
the Premises.
33.10 MEASUREMENTS. All measurements of the Premises stated in this
Lease, even if approximations, shall govern and control over
any actual measurement of the Premises. The Rent provided in
this Lease shall not be modified or changed by reason of any
measurement or re-measurement of the Premises that may occur
after the date of this Lease, and is agreed by Landlord and
Tenant to constitute the negotiated rent for the Premises.
33.11 NAME. Tenant shall not use the name of the Building for any
purpose other than as an address of the business conducted by
the Tenant in the Premises.
33.12 PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all of the
agreements of the parties with respect to any matter covered
or mentioned in this Lease, and no prior agreements of
understandings pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be
amended or added to except by an agreement in writing signed
by the parties or their respective successors in interest.
This Lease shall not be effective or binding on any party
until fully executed by both parties hereto.
33.13 RECORDATION. Tenant shall not record this Lease or a short
form memorandum of this Lease without the prior written
consent of Landlord.
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33.14 LIMITATION OF LIABILITY. In consideration of the benefits
accruing hereunder, Tenant's sole and exclusive remedy shall
be against the Landlord's interest in the Rents, issues, and
profits of the Project, and not against any other assets of
Landlord, or its members individually, or of the shareholders,
officers, directors, members, partners, or employees of any
successors or assigns, except to the extent caused by
Landlord's gross negligence or willful misconduct of Landlord.
Without limiting the foregoing:
a. The sole and exclusive remedy shall be against assets
of Landlord relating to the Premises, as described in Section
2;
b. No shareholder, director, officer, member, or partner
of Landlord shall be sued or named as a party in any suit or
action;
c. No service of process shall be made against any
entity or individual other than a general partner of Landlord
or Landlord's designated agent for service of process;
d. No individual or entity other than Landlord shall be
required to answer or otherwise plead to any service or
process;
e. No judgment may be taken against any individual or
entity other than Landlord;
f. Any judgment taken against any individual or entity
other than Landlord may be vacated and set aside at any time
without hearing;
g. No writ of execution may at any time be levied
against the assets of any individual or entity other than
Landlord;
h. These covenants and agreements are enforceable both
by Landlord and also by any shareholder, director, officer,
member, or partner of Landlord.
Tenant agrees that each of the foregoing provisions shall be
applicable to any covenant or agreement either expressly
contained in this Lease or imposed by statute or at common
law.
33.15 SEVERABILITY. That any provision of this Lease is invalid,
void, or illegal shall in no way affect, impair, or invalidate
any other provision of this Lease and such other provision
shall remain in full force and effect.
33.16 TIME. Time is of the essence of this Lease and each of its
provisions.
33.17 WAIVER. No provision of this Lease shall be deemed to have
been waived by Landlord unless such waiver is in writing
signed by Landlord's duly authorized representatives. The
waiver by either party of any provision of this Lease shall
not be deemed to be a waiver of such provision or any other
provision, in any subsequent instance. The acceptance of Rent
by Landlord shall not be deemed to be a waiver of any
preceding Default or breach by Tenant under this Lease,
whether known or unknown to Landlord, other than the failure
of the Tenant to pay the particular Rent so accepted.
33.18 NO WASTE. Tenant shall not commit or suffer to be committed
any waste, damage or nuisance in or upon the Premises.
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33.19 QUIET ENJOYMENT. Provided Tenant observes its obligations
under this Lease, its quiet enjoyment of the Premises
throughout the Term shall not be disturbed.
34. AUTHORITY OF TENANT.
34.1 If Tenant is a corporation, each individual executing this
Lease on behalf of Tenant represents and warrants that (s)he
is duly authorized by all necessary action of the directors of
Tenant to execute and deliver this Lease in behalf of Tenant,
and that this Lease is binding upon Tenant in accordance with
its terms.
34.2 If Tenant is a partnership or limited liability company, each
individual executing this Lease on behalf of Tenant represents
and warrants the (s)he is duly authorized in accordance with
Tenant's partnership agreement or limited liability company
agreement by all necessary action of the partners or members
or managers of Tenant to execute and deliver this Lease on
behalf of Tenant, and, and that this Lease is binding upon
Tenant in accordance with its terms.
35. FINANCIAL STATEMENTS. Tenant shall furnish to Landlord upon request
Tenant's most recent annual audited financial statements. If requested
by Landlords Lender Tenant shall furnish to Landlord from time to time,
within 30 days of request, Tenant's most recent financial statements,
including at a minimum a balance sheet, income statement and statement
of changes in financial condition, or the equivalent, dated as of and
for a period ending not more than one quarter prior to the date of
delivery. Such statements shall be in the form furnished to Tenant's
principal lender and/or to Tenant's shareholders or other owners, but
at a minimum shall be reviewed or compiled by an independent certified
public accountant. Tenant shall accompany such statements with a
certificate of its chief financial officer that the statements fairly
present the financial condition and results of operations of Tenant as
of and for the period ending on the date of such statements.
36. BROKERAGE FEE. Landlord shall pay a market standard brokerage fee equal
to the sum of five percent (5%) of the aggregate Base Monthly Rent for
the first sixty months of the Lease Term, plus two and one-half percent
(2-1/2%) of the aggregate Base Monthly Rent for the next thirty-six
(60) months. The total brokerage fee shall be reduced by $31,007, which
will be credited to Tenant as payment towards its first months rent
due. The commission shall be due and payable 10 days after the
expiration of Tenants right to cancel lease as specified in Section 24
of this Lease. The brokerage fee shall be split evenly between the two
agents listed in Section 1 of this Lease. Each party represents and
warrants to the other that it has not had dealings with any real estate
broker or agent, or salesperson other than the agents identified in
Section 1, such that the other party would have any liability for any
commissions or other compensation to such broker, agent or salesperson,
and that no such broker, agent salesperson has asserted any claim or
right to any such commission or other compensation. Each party so
representing and warranting shall defend and indemnify the other party
and hold the other party harmless from and against any and all loss,
cost, liability, damage and expense (including reasonable attorneys'
fees) whatsoever that may arise out of the breach of such
representation and warranty.
EXECUTED the day and year above written.
LANDLORD:
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LAGUNA SOUTH EXCHANGE LLC,
a Washington limited liability company
By Exchange Properties Corporation,
a Washington corporation, Member
---------------------------------------
By:
---------------------------------
Its:
---------------------------------
TENANT:
ADVANCED DIGITAL INFORMATION
CORPORATION, a Washington corporation
---------------------------------------
By: /s/ Jon Gacek
---------------------------------
Its: CFO
---------------------------------
25
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STATE OF WASHINGTON )
) ss.
COUNTY OF__________________)
On this _____ day of ______________________,____, before me, the
undersigned, a Notary Public in and for the State of Washington, personally
appeared _____________________, to me known to be the ________________ of
_________________, the ______________ that executed the 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 he/she was duly authorized to execute the said instrument on behalf
of said corporation.
WITNESS MY HAND AND OFFICIAL SEAL hereto affixed the day and year first
above written.
___________________________________________________________
Name_______________________________________________________
NOTARY PUBIC in and for the State of Washington residing at
__________________________________________________________.
My commission expires ____________________________________.
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 9th day of MARCH 2000, before me, the undersigned, a Notary
Public in and for the State of WASHINGTON, personally appeared JON GACEK, to
me known to be the Sr. VP & CFO of ADIC, the tenant that executed the
foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said ______________, for the uses and purposes
therein mentioned, and on oath stated that he/she was authorized to execute
said instrument on behalf of the ADIC.
WITNESS MY HAND AND OFFICIAL SEAL hereto affixed the day and year first
above written.
[SEAL] /s/ Pauline Dorothy Arevalo
-----------------------------------------------------------
Name Pauline Dorothy Arevalo
-----------------------------------------------------
NOTARY PUBLIC in and for the State of Washington residing at
Kirkland.
My commission expires 01-20-03.
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EXHIBIT A
THE BUILDING
[MAP]
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EXHIBIT B
LEGAL DESCRIPTION
LEGAL DESCRIPTION:
THAT PORTION OF LOTS 18 AND 19 OF MARYMOOR BUSINESS CAMPUS, AS PER PLAT RECORDED
IN VOLUME 117 OF PLATS, PAGES 25 THROUGH 29, RECORDS OF KING COUNTY, AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 18;
THENCE SOUTH 88 DEG. 12' 44" EAST ALONG THE SOUTH LINE OF SAID LOTS 18 AND 19, A
DISTANCE OF 342.77 FEET;
THENCE NORTH 01 DEG. 47' 16" EAST PARALLEL WITH THE WEST LINE OF LOT 19, A
DISTANCE OF 414.97 FEET TO THE NORTHERLY LINE OF SAID LOT 19;
THENCE NORTH 88 DEG. 12' 44" WEST 3.17 FEET TO A POINT OF CURVE IN SAID
NORTHERLY LINE;
THENCE ALONG SAID CURVE TO THE LEFT, HAVING A RADIUS OF 25.00 FEET THROUGH A
CENTRAL ANGLE OF 38 DEG. 12' 48", AN ARC DISTANCE OF 16.67 FEET TO A POINT OF
REVERSE CURVE IN SAID NORTHERLY LINE;
THENCE ON SAID CURVE TO THE RIGHT ALONG SAID NORTHERLY LINE AND THE
NORTHEASTERLY LINE OF SAID LOT 18, HAVING A RADIUS OF 45.00 FEET, THROUGH A
CENTRAL ANGLE OF 128 DEG. 12' 48", AN ARC DISTANCE OF 100.70 FEET TO THE NORTH
LINE OF SAID LOT 18;
THENCE NORTH 88 DEG. 12' 44" WEST 255.00 FEET TO THE NORTHWEST CORNER OF SAID
LOT 18;
THENCE SOUTH 01 DEG. 18' 42" WEST 444.99 FEET TO THE POINT OF BEGINNING;
(ALSO KNOWN AS PARCEL 1 OF CITY OF REDMOND LOT LINE ADJUSTMENT NO. SS-83-42,
RECORDED UNDER RECORDING NO. 8312291131);
SITUATE IN THE CITY OF REDMOND, COUNTY OF KING, STATE OF WASHINGTON.
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EXHIBIT C
NEW PARKING CONFIGURATION
SECTION 12, TOWNSHIP 25 NORTH, RANGE 5 EAST, W.M.
[MAP]
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RIDER--OPTION TO EXTEND TERM
R1. Tenant shall have one (1) option to extend the Term for an
additional five (5) years (the "Extended Term"), provided that Tenant is not in
default at the time of exercise of the option or commencement of the Extended
Term (unless the default is cured within any applicable cure period). Tenant
shall exercise that option by giving Landlord written notice of its election
to do so no less than nine (9) months prior to the end of the Term ("Tenant's
Notice of Exercise"). The exercise of such option to extend shall be for the
entire Premises and shall be on the same terms and conditions as set forth in
the Lease except that the Base Monthly Rent shall be adjusted as set forth
below. The option provided in this Rider is personal to Tenant and may not be
exercised by any assignee of Tenant or subtenant of the Premises and may not
be exercised during any period in which more than fifty percent (50%) of the
RSF of the Premises is subleased by Tenant.
R2. Upon receipt of Tenant's Notice of Exercise, Landlord shall advise
Tenant in writing of Landlord's calculation of the Base Monthly Rent for the
Extended Term, which shall be equal to the fair market rental value of the
Premises for a five (5) year term, but not less than Base Monthly Rent during
the Term (the "Fair Market Rental"), not later than six (6) months prior to the
end of the Term. If Tenant disagrees with such calculation, it shall advise
Landlord in writing thereof within twenty (20) days thereafter, and the parties
shall promptly meet to attempt to resolve their differences. If these
differences as to Fair Market Rental are not resolved within a two (2) month
period, then the parties shall submit the matter to arbitration in accordance
with the terms of paragraph C below so that Fair Market Rental is determined no
later than three (3) months prior to the end of the Term.
R3. If the parties are unable to reach agreement on Fair Market Rental
during the period specified in paragraph B, then within ten (10) days thereafter
either party may advise the other in writing of the name and address of its
arbitrator. The arbitrator shall be a licensed commercial real estate broker or
appraiser (MAI or member of a successor or similar institution) with at lease
ten (10) years experience dealing with rental rates in the Redmond, Washington
and greater Eastside areas. The duty of any and all arbitrator(s) appointed
under this paragraph shall be to determine the Fair Market Rental. In doing so,
Fair Market Rental for purposes of this determination shall not include the
value of any improvements made by Tenant to the Premises; provided that, if
Landlord reimburses Tenant for the unamortized costs of those improvements
(using a 15-year straight-line amortization schedule to determine those costs),
the value of those improvements shall be included in the determination of Fair
Market Rental.
R3.1 Within ten (10) business days after receipt of such notice from
the initiating party (the "Instigator") designating its arbitrator, the other
party (the "Recipient") shall give notice to Instigator, specifying the name
and address of the person designated by Recipient to act as arbitrator on its
behalf who shall be similarly qualified. If Recipient fails to notify
Instigator of the appointment of its arbitrator, within or by the time above
specified, then the arbitrator appointed by Instigator shall be the
arbitrator to determine the issue. If two (2) arbitrators are so chosen the
arbitrators so chosen shall meet within ten (10) business days after the
second arbitrator is appointed. The arbitrators shall have the right to
consult experts and competent authorities with factual information or
evidence pertaining to a determination of Fair Market Rental, but any such
consultation shall be made in the presence of both parties with full right on
their part to cross-examine. The arbitrators shall have no power to modify
the provisions of this Lease. Any decision rendered by an arbitrator or
arbitrators concerning Fair Market Rental shall be in writing and delivered
in counterparts to the parties.
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R3.2 If within ten (10) business days after such first meeting the two
arbitrators shall be unable to agree promptly upon a determination of Fair
Market Rental, they, themselves, shall appoint a third arbitrator, who shall be
a competent and impartial person with qualifications similar to those required
of the first two arbitrators. If they are unable to agree upon such appointment
within five (5) business days after expiration of said ten (10) day period, the
third arbitrator shall be selected by the parties themselves, if they can agree
thereon, within a further period of ten (10) business days. If the parties do
not so agree, then either party, on behalf or both, may request appointment of
such a qualified person by the then presiding judge of King County Superior
Court acting in his or her private non-judicial capacity, and the other party
shall not raise any question as to such Judge's full power and jurisdiction to
entertain the application for and make the appointment. The request to the
presiding judge shall include a request to make that appointment within ten (10)
business days. The person appointed by the presiding judge shall be the third
arbitrator, and the parties agree to indemnify and hold the presiding judge
fully and completely harmless from and against all claims arising out of the
presiding judge's appointment of that arbitrator.
R3.3 The three (3) arbitrators shall decide the dispute by following
the procedure set forth in this Section. Within ten (10) business days after
appointment of the third arbitrator, the arbitrators selected by each of the
parties shall state in writing his or her determination of the Fair Market
Rental supported by the reasons therefor with counterpart copied to each party.
The arbitrators shall arrange for a simultaneous exchange of such proposed
resolutions. The role of the third arbitrator shall be to select which of the
two proposed resolutions most closely approximates his or her determination of
Fair Market Rental. The third arbitrator shall have no right to propose a middle
ground or any modification of either of the two proposed resolutions. The
resolution he or she chooses as most closely approximating his or her
determination shall constitute the decision of the arbitrators and be final and
binding upon the parties. The third arbitrator shall render his or her decision
in writing, with counterpart copies to each party, within ten (10) business days
after submission of the proposed resolutions by the other two arbitrators.
R3.4 In the event of a failure, refusal or inability of any arbitrator
to act, his or her successor shall be appointed by him, but in the case of the
third arbitrator, his or her successor shall be appointed in the same manner as
provided for appointment of the third arbitrator. Each party shall pay the fee
and expenses of its respective arbitrator and both shall share equally the fee
and expenses of the third arbitrator, if any, and the attorneys' fees and
expenses of counsel for the respective parties and of witnesses shall be paid by
the respective party engaging such counsel or calling such witnessses.
31
