Washington-Bothell-Quadrant Monte Villa Lease - MV 1997 and GT Interactive Software Corp.
[CB COMMERCIAL LOGO] PLJ:cjk:11/03/97
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the
Lease referred to in this Article One explain and define the Basic Terms and
are to be read in conjunction with the Basic Terms.
Section 1.01. Date of Lease: November 24, 1997
Section 1.02 Landlord (include legal entity): MV 1997, an L.L.C.
Address of Landlord: P.O. Box 1290
Seattle, WA 98111-1290
Section 1.03. Tenant (include legal entity): Humongous Entertainment
Inc., a Washington Corporation, a wholly owned subsidiary of GT Interactive
Software Corporation
Address of Tenant: 16932 Woodinville-Redmond Road NE, Suite 104
Woodinville, WA 98072
Section 1.04. Property: (include street address, approximate square
footage and description)
Monte Villa Office Building Approximately 65,586 Square Feet
Quadrant Monte Villa, Lot 1
Bothell, WA 98021 Legal Description - See Exhibit A
attached
Section 1.05. Lease Term: Ten (10) years -0- months beginning on June 1,
1998 or such other date as specified in this Lease, and ending on May 31, 2008,
as adjusted pursuant to the Addendum.
Section 1.06. Permitted Uses: (See Article Five) General office, software
assembly and distribution, and any other lawful purpose.
Section 1.07. Tenant's Guarantor: (If none, so state) GT Interactive
Software Corporation
Section 1.08. Brokers: (See Article Fourteen) (If none, so state)
Landlord's Broker: Colliers Macaulay Nicholls
Tenant's Broker: CB Commercial Real Estate Group, Inc.
Section 1.09. Commission Payable to Landlord's Broker: (See Article
Fourteen) $ Per Separate Agreement
Section 1.10. Initial Security Deposit: (See Section 3.03) $84,150.00
(Tenant may provide in the form of a Letter of Credit)
Section 1.11. Vehicle Parking Spaces Allocated to Tenant: 258
Section 1.12. Rent and Other Charges Payable by Tenant:
(a)
(b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section 4.02);
(ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04);
(iv) Maintenance, Repairs and Alterations (See Article Six).
Section 1.13 Landlord's Share of Profit on Assignment or Sublease: (See
Section 9.05) Fifty percent (50%) of the Profit (the "Landlord's Share").
Section 1.14. Riders: The following Riders are attached to and made a part
of this Lease: (if none, so state)
see Addendum to Lease
Exhibit A - Legal Description
Exhibit B - Site Plan
Exhibit C - Schedule A
(c) 1998 SOUTHERN CALIFORNIA CHAPTER
of the Society of Industrial
and Office Realtors [lOGO]
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ARTICLE TWO: LEASE TERM
Section 2.01. Lease of Property For Lease Term. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in Section 1.05 above and shall
begin and end on the dates specified in Section 1.05 above, unless the beginning
or end of the Lease Term is changed under any provision of this Lease. The
"Commencement Date" shall be the date specified in Section 1.05 above for the
beginning of the Lease Term, unless advanced or delayed under any provision of
this Lease.
Section 2.02. Delay in Commencement. If Landlord does not deliver
possession of the Property to Tenant by August 1, 1998, Tenant may elect to
cancel this Lease by giving written notice to Landlord no later than August 10,
1998. If Tenant gives such notice, the Lease shall be cancelled. If Tenant does
not give such notice, Tenant's right to cancel the Lease shall expire and the
Lease Term shall commence upon the delivery of possession of the Property to
Tenant. If delivery of possession of the Property to Tenant is delayed, Landlord
and Tenant shall, upon such delivery, execute an amendment to this Lease setting
forth the actual Commencement Date and expiration date of the Lease. Failure to
execute such amendment shall not affect the actual Commencement Date and
expiration date of the Lease.
Section 2.04. Holding Over. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. If Tenant does not vacate the
Property upon the expiration or earlier termination of the Lease, Tenant's
occupancy of the Property shall be a "month-to-month" tenancy, subject to all of
the terms of this Lease applicable to a month-to-month tenancy, except that, as
Landlord's sole remedy for such holdover, the Base Rent then in effect shall be
increased by fifty percent (50%).
ARTICLE THREE: BASE RENT
Section 3.01. Time and Manner of Payment. Upon execution of this Lease,
Tenant shall pay Landlord the Base Rent in the amount stated in Paragraph
1.12(a) above for the first month of the Lease Term. On the first day of the
second month of the Lease Term and each month thereafter, Tenant shall pay
Landlord the Base Rent, in advance, without offset, deduction or prior demand.
The Base Rent shall be payable at Landlord's address or at such other place as
Landlord may designate in writing.
Section 3.03. Security Deposit; Increases.
(a) Upon the commencement of this Lease, Tenant shall deposit with
Landlord a cash Security Deposit in the amount set forth in Section 1.10 above.
If Landlord uses any part of the Security Deposit, Tenant shall restore the
Security Deposit to its full amount within ten (10) days after Landlord's
written request. Tenant's failure to do such shall be a material default under
this Lease. Notwithstanding the foregoing, Tenant may elect to provide Security
Deposit in the form of a Letter of Credit.
1998 SOUTHERN CALIFORNIA CHAPTER
of the Society of Industrial
and Office Realtors [LOGO]
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Section 3.04. TERMINATION; ADVANCE PAYMENTS. Upon termination of this
Lease under Article Seven (Damage or Destruction), Article Eight (Condemnation)
or any other termination not resulting from Tenant's default, and after Tenant
has vacated the Property in the manner required by this Lease, Landlord shall
refund or credit to Tenant (or Tenant's successor) the unused portion of the
Security Deposit, any advance rent or other advance payments made by Tenant to
Landlord, and any amounts paid for real property taxes and other reserves which
apply to any time periods after termination of the Lease.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
Section 4.01. Additional Rent. All charges payable by Tenant to Landlord
other than Base Rent are called "Additional Rent." Unless this Lease provides
otherwise, Tenant shall pay all Additional Rent then due with the next monthly
installment of Base Rent. The term "rent" shall mean Base Rent and Additional
Rent.
Section 4.02. Property Taxes.
(b) DEFINITION OF "REAL PROPERTY TAX." "Real property tax" means: (i) any
fee, license fee, license tax, business license fee, commercial rental tax,
levy, charge, assessment, penalty or tax imposed by any taxing authority against
the Property; (ii) any tax on the Landlord's right to receive, or the receipt
of, rent or income from the Property or against Landlord's business of leasing
the Property; (iii) any tax or charge for fire protection, streets, sidewalks,
road maintenance, refuse or other services provided to the Property by any
governmental agency; (iv) any tax imposed upon this transaction or based upon a
re-assessment of the Property due to a change of ownership, as defined by
applicable law, or other transfer of all or part of Landlord's interest in the
Property; and (v) any charge or fee replacing any tax previously included within
the definition of real property tax. "Real property tax" does not, however,
include Landlord's federal or state income, franchise, inheritance or estate
taxes.
(c) JOINT ASSESSMENT. If the Property is not separately assessed, Landlord
shall reasonably determine Tenant's share of the real property tax payable by
Tenant under Paragraph 4.02(a) from the assessor's worksheets or other
reasonably available information. Tenant shall pay such share to Landlord within
fifteen (15) days after receipt of Landlord's written statement.
(d) PERSONAL PROPERTY TAXES.
(i) Tenant shall pay all taxes charged against trade fixtures,
furnishings, equipment or any other personal property belonging to Tenant.
Tenant shall try to have personal property taxed separately from the Property.
(ii) If any of the Tenant's personal property is taxed with the
Property, Tenant shall pay Landlord the taxes for the personal property within
fifteen (15) days after Tenant receives a written statement from Landlord for
such personal property taxes.
(e) TENANT'S RIGHT TO CONTEST TAXES. Tenant may attempt to have the
assessed valuation of the Property reduced or may initiate proceedings to
contest the real property taxes. If required by law, Landlord shall join in the
proceedings brought by Tenant. However, Tenant shall pay all costs of the
proceedings, including any costs or fees incurred by Landlord. Upon the final
determination of any proceeding or contest, Tenant shall immediately pay the
real property taxes due, together with all costs charges, interest and penalties
incidental to the proceedings. If Tenant does not pay the real property taxes
when due and contests such taxes, Tenant shall not be in default under this
Lease for nonpayment of such taxes if Tenant deposits funds with Landlord or
opens an interest-bearing account reasonably acceptable to Landlord in the joint
names of Landlord and Tenant. The amount of such deposit shall be sufficient to
pay the real property taxes plus a reasonable estimate of the interest, costs,
charges and penalties which may accrue if Tenant's action is unsuccessful, less
any applicable tax impounds previously paid by Tenant to Landlord. The deposit
shall be applied to the real property taxes due, as determined at such
proceedings. The real property taxes shall be paid under protest from such
deposit if such payment under protest is necessary to prevent the Property from
being sold under a "tax sale" or similar enforcement proceeding.
Section 4.03. UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the costs of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Property. However, if any services or utilities are jointly metered with
other property, Landlord shall make a reasonable determination of Tenant's
proportionate share of the cost of such utilities and services and Tenant shall
pay such share to Landlord within fifteen (15) days after receipt of Landlord's
written statement.
(a) LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a
policy of commercial general liability insurance (sometimes known as broad form
comprehensive general liability insurance) insuring Tenant against liability for
bodily injury, property damage (including loss of use of property) and personal
injury arising out of the operation, use or occupancy of the Property. Tenant
shall name Landlord as an additional insured under such policy. The amount of
such insurance shall be One Million Dollars ($1,000,000) per occurrence. The
liability insurance obtained by Tenant under this Paragraph 4.04(a) shall (i)
contain cross-liability endorsements; and (ii) insure Landlord against Tenant's
performance under Section 5.05, if the matters giving rise to the indemnity
under Section 5.05 result from the negligence of Tenant. The amount and coverage
of such insurance shall not limit Tenant's liability nor relieve Tenant of any
other obligation under this Lease. Landlord may also obtain comprehensive public
liability insurance in an amount and with coverage determined by Landlord
insuring Landlord against liability arising out of ownership, operation, use or
occupancy of the Property. The policy obtained by the Landlord shall not be
contributory and shall not provide primary insurance.
(c) 1988 SOUTHERN CALIFORNIA CHAPTER
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(b) PROPERTY AND RENTAL INCOME INSURANCE. Such policy shall contain an
Inflation Guard Endorsement and shall provide protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk), sprinkler leakage.
Landlord shall have the right to obtain flood and earthquake insurance if
required by any lender holding a security interest in the Property. Landlord
shall not obtain insurance for Tenant's fixtures or equipment or building
improvements installed by Tenant on the Property. During the Lease Term,
Landlord shall also maintain a rental income insurance policy, with loss
payable to Landlord, in an amount equal to one year's Base Rent, plus estimated
real property taxes and insurance premiums. Tenant shall be liable for the
payment of any deductible amount under Landlord's or Tenant's insurance
policies maintained pursuant to this Section 4.04, in an amount not to exceed
Five Thousand Dollars ($5,000). Tenant shall not do or permit anything to be
done which invalidates any such insurance policies.
(c) PAYMENT TO PREMIUMS. Subject to Selection 4.07, Tenant shall pay all
premiums for the insurance policies described in Paragraphs 4.04(a) and (b)
(whether obtained by Landlord or Tenant) within fifteen (15) days after Tenant's
receipt of a copy of the premium statement and a copy of the policy showing the
rates for the Property, except Landlord shall pay all premiums for non-primary
comprehensive public liability insurance which Landlord elects to obtain as
provided in Paragraph 4.04(a). If insurance policies maintained by Landlord
cover improvements on real property other than the Property, Landlord shall
deliver to Tenant a statement of the premium applicable to the Property showing
in reasonable detail how Tenant's share of the premium was computed. If the
Lease Term expires before the expiration of an insurance policy maintained by
Landlord, Tenant shall be liable for Tenant's prorated share of the insurance
premiums. Before the Commencement Date, Tenant shall deliver to Landlord a copy
of any policy of insurance which Tenant is required to maintain under this
Section 4.04. At least thirty (30) days prior to the expiration of any such
policy. Tenant shall deliver to Landlord a renewal of such policy. As an
alternative to providing a policy of insurance, Tenant shall have the right to
provide Landlord a certificate of insurance, executed by an authorized officer
of the insurance company, showing that the insurance which Tenant is required to
maintain under this Section 4.04 is in full force and effect and containing such
other information which Landlord reasonably requires.
(d) GENERAL INSURANCE PROVISIONS.
(i) Any insurance which Tenant is required to maintain under this
Lease shall include a provision which requires the insurance carrier to
endeavor to give Landlord not less than thirty (30) days' written notice
prior to any cancellation or modification of such coverage.
(ii) if Tenant fails to deliver any policy, certificate or renewal to
Landlord required under this Lease within the prescribed time period or if
any such policy is cancelled or modified during the Lease Term without
Landlord's consent, Landlord may obtain such insurance, in which case
Tenant shall reimburse Landlord for the cost of such insurance within
fifteen (15) days after receipt of a statement that indicates the cost of
such insurance.
(iii) Tenant shall maintain all insurance required under this Lease
with companies holding a "General Policy Rating" of B+7 or better, as set
forth in the most current issue of "Best Key Rating Guide". Landlord and
Tenant acknowledge the insurance markets are rapidly changing and that
insurance in the form and amounts described in this Section 4.04 may not be
available in the future at commercially reasonable rates. If at any time
during the Lease Term, Tenant is unable to maintain the insurance required
under the Lease at commercially reasonable rates, Tenant shall nevertheless
maintain insurance coverage which is customary and commercially reasonable
in the insurance industry for Tenant's type of business, as that coverage
may change from time to time.
(iv) Landlord and Tenant each hereby waive any and all rights of
recovery against the other, or against the officers, employees, agents or
representatives of the other, for loss of or damage to its property or the
property of others under its control, if such loss or damage is covered by
any insurance policy in force (whether or not described in this Lease) at
the time of such loss or damage. Upon obtaining the required policies of
insurance, Landlord and Tenant shall give notice to the insurance carriers
of this mutual waiver of subrogation.
Section 4.05. LATE CHARGES. Tenant's failure to pay rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but
are not limited to, processing and accounting charges and late charges which
may be imposed on Landlord by any ground lease, mortgage or trust deed
encumbering the Property. Therefore, if more than once in any 12-month period
during the Lease Term, Landlord does not receive any rent payment within ten
(10) days after receipt of written notice from Landlord that such payment is
overdue, Tenant shall pay Landlord a late charge equal to five percent (5%) of
the overdue amount. The parties agree that such late charge represents a fair
and reasonable estimate of the costs Landlord will incur by reason of such late
payment.
Section 4.06. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant
to Landlord which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date of such amount. However,
interest shall not be payable on late charges to be paid by Tenant under this
Lease. The payment of interest on such amounts shall not excuse or cure any
default by Tenant under this Lease. If the interest rate specified in this
Lease is higher than the rate permitted by law, the interest rate is hereby
decreased to the maximum legal interest rate permitted by law.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01. PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.
(c) 1988 SOUTHERN CALIFORNIA CHAPTER
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Section 5.02. MANNER OF USE. Tenant shall not cause or permit the
Property to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which annoys or interferes with
the rights of other tenants of Landlord, or which constitutes a nuisance or
waste. Tenant shall obtain and pay for all permits, excluding a Certificate of
Occupancy (which shall be obtained by Landlord), required for Tenant's
occupancy of the Property and shall promptly take all actions necessary to
comply with all applicable statutes, ordinances, rules, regulations, orders and
requirements regulating the particular manner of use by Tenant of the Property,
including the Occupational Safety and Health Act.
Section 5.03. HAZARDOUS MATERIALS. As used in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials" or "toxic
substances" now or subsequently regulated under any applicable federal, state or
local laws or regulations, including without limitation petroleum-based
products, paints, solvents, lead, cyanide, DDT, printing inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health and
safety of persons. Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought upon, used, stored, treated or disposed of in or
about the Property by Tenant, its agents, employees, contractors, sublessees or
invitees without the prior written consent of Landlord. Landlord shall be
entitled to take into account such other factors or facts as Landlord may
reasonably determine to be relevant in determining whether to grant or withhold
consent to Tenant's proposed activity with respect to Hazardous Material. In no
event, however, shall Landlord be required to consent to the installation or use
of any storage tanks on the Property.
Section 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter the
Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall
give Tenant prior written notice of such entry, except in the case of an
emergency. Landlord may place customary "For Lease" signs on the Property
commencing six (6) months prior to expiration of the Lease Term, as extended.
Section 5.07. QUIET POSSESSION. If Tenant pays the rent and complies with
all other terms of this Lease, Tenant may occupy and enjoy the Property for the
full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
(c) 1988 SOUTHERN CALIFORNIA CHAPTER
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Section 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
(a) Tenant shall promptly remove any alterations, additions, or
improvements constructed in violation of this Paragraph 6.05(a) upon Landlord's
written request. All alterations, additions, and improvements shall be done in
a good and workmanlike manner, in conformity with all applicable laws and
regulations, and by a contractor approved by Landlord, which approval shall not
be unreasonably withheld. Upon completion of any such work, Tenant shall
provide Landlord with "marked" plans, copies of all construction contracts, and
proof of payment for all labor and materials.
(b) Tenant shall pay when due all claims for labor and material furnished
to the Property. Tenant shall give Landlord at least twenty (20) days' prior
written notice of the commencement of any work on the Property, regardless of
whether Landlord's consent to such work is required. Landlord may elect to
record and post notices of non-responsibility on the Property.
Section 6.06 CONDITION UPON TERMINATION. Upon the termination of the
Lease, tenant shall surrender the Property to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear and loss from acts
of God or other casualty. However, Tenant shall not be obligated to repair any
damage which Landlord is required to repair under Article Seven (Damage or
Destruction). In addition, Landlord may require Tenant to remove any
alterations, additions or improvements (whether or not made with Landlord's
consent) which are unusual for buildings of the type located on the Property or
which are difficult to remove prior to the expiration of the Lease and to
restore the Property to its prior condition, all at Tenant's expense. All
alterations, additions and improvements which Landlord has not required Tenant
to remove shall become Landlord's property and shall be surrendered to Landlord
upon the expiration or earlier termination of the Lease, except that Tenant may
remove any of Tenant's machinery or equipment which can be removed without
material damage to the Property. Tenant shall repair, at Tenant's expense, any
damage to the Property caused by the removal of any such machinery or
equipment. In no event, however, shall Tenant remove any of the following
materials or equipment (which shall be deemed Landlord's property) without
Landlord's prior written consent: any power wiring or power panels; lighting or
lighting fixtures; wall coverings; drapes, blinds or other window coverings;
carpets or other floor coverings; heaters, air conditioners or any other
heating or air conditioning equipment; fencing or security gates; or other
similar building operating equipment and decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01. PARTIAL DAMAGE TO PROPERTY.
(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is only partially
damaged (i.e., less than fifty percent (50%) of the Property in untenantable as
a result of such damage or less than fifty percent (50%) of Tenant's operations
are materially impaired) and if the proceeds received by Landlord from the
insurance policies described in Paragraph 4.04(b) are sufficient to pay for the
necessary repairs, this Lease shall remain in effect and Landlord shall repair
the damage as soon as reasonably possible. Landlord may elect (but is not
required) to repair any damage to Tenant's fixtures, equipment, or improvements.
(b) if the insurance proceeds received by Landlord are not sufficient to
pay the entire cost of repair, or if the cause of the damage is not covered by
the insurance policies which Landlord maintains under Paragraph 4.04(b),
Landlord may elect either to (i) repair the damage as soon as reasonably
possible, in which case this Lease shall remain in full force and effect, or
(ii) terminate this Lease as of the date the damage occurred. Landlord shall
notify Tenant within thirty (30) days after receipt of notice of the occurrence
of the damage whether Landlord elects to repair the damage or terminate the
Lease. If Landlord elects to repair the damage, Tenant shall pay Landlord the
"deductible amount" (if any) under Landlord's insurance policies to a maximum
of $5,000. If Landlord elects to terminate the Lease, Tenant may elect to
continue this Lease in full force and effect, in which case Tenant shall repair
any damage to the Property and any building in which the Property is located.
Tenant shall pay the cost of such repairs, except that upon satisfactory
completion of any such repairs, Landlord shall deliver to Tenant any insurance
proceeds received by Landlord for the damage repaired by Tenant. Tenant shall
give Landlord written notice of such election within thirty (30) days after
receiving Landlord's termination notice.
(c) If the damage to the Property occurs during the last six (6) months of
the Lease Term (as extended) and such damage will require more than thirty (30)
days to repair, either Landlord or Tenant may elect to terminate this Lease as
of the date the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days after
Tenant's notice to Landlord of the occurrence of the damage.
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and Office Realtors [LOGO]
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Section 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e. the damage to
the Property is greater than partial damage as described in Section 7.01), and
regardless of whether Landlord receives any insurance proceeds, this Lease shall
terminate as of the date the destruction occurred. Notwithstanding the preceding
sentence, if the Property can be rebuilt within four (4) months after the date
of destruction, Landlord may elect to rebuild the Property at Landlord's own
expense, in which case this Lease shall remain in full force and effect.
Landlord shall notify Tenant of such election within thirty (30) days after
Tenant's notice of the occurrence of total or substantial destruction. If
Landlord so elects, Landlord shall rebuild the Property at Landlord's sole
expense.
Section 7.03. TEMPORARY REDUCTION OF RENT. If the Property is destroyed or
damaged and Landlord or Tenant repairs or restores the Property pursuant to the
provisions of this Article Seven, any rent payable during the period of such
damage, repair and/or restoration shall be reduced according to the degree, if
any, to which Tenant's use of the Property is impaired. However, the reduction
shall not exceed the sum of one year's payment of Base Rent, insurance premiums
and real property taxes. Except for such possible reduction in Base Rent,
insurance premiums and real property taxes, Tenant shall not be entitled to any
compensation, reduction, or reimbursement from Landlord as a result of any
damage, destruction, repair, or restoration of or to the Property.
Section 7.04. WAIVER. Tenant waives the protection of any statute, code or
judicial decision which grants a tenant the right to terminate a lease in the
event of the substantial or total destruction of the leased property. Tenant
agrees that the provisions of Section 7.02 above shall govern the rights and
obligations of Landlord and Tenant in the event of any substantial or total
destruction to the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of eminent
domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the building in which the
Property is located, or which is located on the Property, is taken, either
Landlord or Tenant may terminate this Lease as of the date the condemning
authority takes title or possession, by delivering written notice to the other
within ten (10) days after receipt of written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
takes title or possession). If neither Landlord nor Tenant terminates this
Lease, this Lease shall remain in effect as to the portion of the Property not
taken, except that the Base Rent and Additional Rent shall be reduced in
proportion to the reduction in the floor area of the Property. Any Condemnation
award or payment shall be distributed in the following order: (a) first, to any
ground lessor, mortgagee or beneficiary under a deed of trust encumbering the
Property, the amount of its interest in the Property, (b) second, to Tenant,
only the amount of any award specifically designated for loss of or damage to
Tenant's trade fixtures or removable personal property; and (c) third, to
Landlord, the remainder of such award, whether as compensation for reduction in
the value of the leasehold, the taking of the fee, or otherwise. If this Lease
is not terminated, Landlord shall repair any damage to the Property caused by
the Condemnation, except that Landlord shall not be obligated to repair any
damage for which Tenant has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Lease or make
such repair at Landlord's expense.
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the Property or
of Tenant's interest in this Lease may be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer, operation of
law, or act of Tenant, without Landlord's prior written consent, except as
provided in Section 9.02 below. Landlord has the right to grant or withhold its
consent as provided in Section 9.05 below. Any attempted transfer without
consent shall be void and shall constitute a non-curable breach of this Lease.
If Tenant is a partnership, any cumulative transfer of more than twenty percent
(20%) of the partnership interests shall require Landlord's consent.
Section 9.02. TENANT AFFILIATE. Tenant may assign this Lease or sublease
the Property, without Landlord's consent, to any corporation which controls, is
controlled by or is under common control with Tenant, or to any corporation
resulting from the merger of or consolidation with Tenant ("Tenant's
Affiliate"). In such case, any Tenant's Affiliate shall assume in writing all
of Tenant's obligations under this Lease.
Section 9.03. NO RELEASE OF TENANT. No transfer permitted by this Article
Nine, whether with or without Landlord's consent, shall release Tenant or
change Tenant's primary liability to pay the rent and to perform all other
obligations of Tenant under this Lease. Landlord's acceptance of rent from any
other person is not a waiver of any provision of this Article Nine. Consent to
one transfer is not a consent to any subsequent transfer. If Tenant's
transferee defaults under this Lease, Landlord may proceed directly against
Tenant without pursuing remedies against the transferee.
Section 9.04. OFFER TO TERMINATE. If Tenant desires to assign the Lease or
sublease the Property, Tenant shall have the right to offer, in writing, to
terminate the Lease as of a date specified in the offer. If Landlord elects in
writing to accept the offer to terminate within twenty (20) days after notice
of the offer, the Lease shall terminate as of the date specified and all the
terms and provisions of the Lease governing termination shall apply. If
Landlord does not so elect, the Lease shall continue in effect until otherwise
terminated and the provisions of Section 9.05 with respect to any proposed
transfer shall continue to apply.
Section 9.05. LANDLORD'S CONSENT.
(a) Tenant's request for consent to any transfer described in Section 9.01
shall set forth in writing the details of the proposed transfer, including the
name, business and financial condition of the prospective transferee, financial
details of the proposed transfer (e.g., the term of and the rent and security
deposit payable under any proposed assignment or sublease), and any other
information Landlord reasonably deems relevant. Landlord shall have the right to
withhold consent, if reasonable, or to grant consent, based on the following
factors: (i) the business of the proposed assignee or subtenant and the proposed
use of the
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Property; (ii) the net worth and financial reputation of the proposed assignee
or subtenant; (iii) Tenant's compliance with all of its obligations under the
Lease. If Landlord objects to a proposed assignment solely because of the net
worth and/or financial reputation of the proposed assignee. Tenant may
nonetheless sublease (but not assign), all or a portion of the Property to the
proposed transferee, but only on the other terms of the proposed transfer.
(b) If Tenant assigns or subleases, the following shall apply:
(i) Tenant shall pay to Landlord as Additional Rent under the Lease
the Landlord's Share (stated in Section 1.13) of the Profit (defined below)
on such transaction as and when received by Tenant, unless Landlord gives
written notice to Tenant and the assignee or subtenant that Landlord's
Share shall be paid by the assignee or subtenant to Landlord directly. The
"Profit" means (A) all amounts paid to Tenant for such assignment or
sublease, including "key" money, monthly rent in excess of the monthly rent
payable under the Lease, and all fees and other consideration paid for the
assignment or sublease, including fees under any collateral agreements,
less (B) costs and expenses directly incurred by Tenant in connection with
the execution and performance of such assignment or sublease for real
estate broker's commissions, legal expenses in an amount not to exceed
$5,000 and costs of renovation or construction of tenant improvements
required under such assignment or sublease. Tenant is entitled to recover
such costs and expenses before Tenant is obligated to pay the Landlord's
Share to Landlord. The Profit in the case of a sublease of less than all
the Property is the rent allocable to the subleased space as a percentage
on a square footage basis.
(ii) Tenant shall provide Landlord a written statement certifying all
amounts to be paid from any assignment or sublease of the Property within
ninety (90) days after the transaction documentation is signed, and
Landlord may inspect Tenant's books and records to verify the accuracy of
such statement. On written request, Tenant shall promptly furnish to
Landlord copies of all the transaction documentation, all of which shall be
certified by Tenant to be complete, true and correct. Landlord's receipt of
Landlord's Share shall not be a consent to any further assignment or
subletting. The breach of Tenant's obligation under this Paragraph 9.05(b)
shall be a material default of the Lease.
Section 9.06. No Merger. No merger shall result from Tenant's sublease of
the Property under this Article Nine, Tenant's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant as
sublandlord under any or all subtenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
Section 10.01. Covenants and Conditions. Time is of the essence in the
performance of all covenants and conditions.
Section 10.02. Defaults. Tenant shall be in material default under this
Lease:
(a) If Tenant abandons the Property or if Tenant's vacation of the Property
results in the cancellation of any insurance described in Section 4.04;
(b) If Tenant fails to pay rent or any other charge when due;
(c) If Tenant fails to perform any of Tenant's non-monetary obligations
under this Lease for a period of thirty (30) days after written notice from
Landlord; provided that if more than thirty (30) days are required to complete
such performance, Tenant shall not be in default if Tenant commences such
performance within the thirty (30)-day period and thereafter diligently pursues
its completion. However, Landlord shall not be required to give such notice if
Tenant's failure to perform constitutes a non-curable breach of this Lease. The
notice required by this Paragraph is intended to satisfy any and all notice
requirements imposed by law on Landlord and is not in addition to any such
requirement.
(d) (i) If Tenant makes a general assignment or general arrangement for the
benefit of creditors; (ii) if a petition for adjudication of bankruptcy or for
reorganization or rearrangement is filed by or against Tenant and is not
dismissed within sixty (60) days; (iii) if a trustee or receiver is appointed to
take possession of substantially all of Tenant's assets located at the Property
or of Tenant's interest in this Lease and possession is not restored to Tenant
within sixty (60) days; or (iv) if substantially all of Tenant's assets located
at the Property or of Tenant's interest in this Lease is subjected to
attachment, execution or other judicial seizure which is not discharged within
sixty (60) days. If a court of competent jurisdiction determines that any of the
acts described in this subparagraph (d) is not a default under this Lease, and a
trustee is appointed to take possession (or if Tenant remains a debtor in
possession) and such trustee or Tenant transfers Tenant's interest hereunder,
then Landlord shall receive, as Additional Rent, the excess, if any, of the rent
(or any other consideration) paid in connection with such assignment or sublease
over the rent payable by Tenant under this Lease.
(e) If any guarantor of the Lease revokes or otherwise terminates, or
purports to revoke or otherwise terminate, any guaranty of all or any portion of
Tenant's obligations under the Lease. Unless otherwise expressly provided, no
guaranty of the Lease is revocable.
Section 10.03. Remedies. On the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
(a) Terminate Tenant's right to possession of the Property by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Property to Landlord. In such event, Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default, including (i) the worth at the time of the award of the unpaid
Base Rent, Additional Rent and other charges which Landlord had earned at the
time of the termination; (ii) the worth at the time of the award of the amount
by which the unpaid Base Rent, Additional Rent and other charges which Landlord
would have earned after termination until the time of the award exceeds the
amount of such rental loss that Tenant proves Landlord could have reasonably
avoided; (iii) the worth at the time of the award of the amount by which the
unpaid Base Rent, Additional Rent and other charges which Tenant would have paid
for the balance of the Lease Term after the time of award exceeds the amount of
such rental loss that Tenant proves Landlord could have reasonably avoided; and
(iv) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under the
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, any costs or expenses Landlord incurs
in maintaining or preserving the Property after such default, the cost of
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recovering possession of the Property, expenses of reletting, including
necessary renovation or alteration of the Property, Landlord's reasonable
attorneys' fees incurred in connection therewith, and any real estate commission
paid or payable. As used in subparts (i) and (ii) above, the "worth at the time
of the award" is computed by allowing interest on unpaid amounts at the "prime
rate" as announced from time to time by Bank of America, N.A. plus four percent
(4%) per annum, or such lesser amount as may then be the maximum lawful rate. As
used in subpart (iii) above, the "worth at the time of the award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus one percent (1%). If Tenant has
abandoned the Property, Landlord shall have the option of (i) retaking
possession of the Property and recovering from Tenant the amount specified in
this Paragraph 10.03(a), or (ii) proceeding under Paragraph 10.03(b);
(b) Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant has abandoned the Property. In such
event, Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the rent as it becomes
due;
(c) Pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decisions of the state in which the Property is located.
Section 10.06. CUMULATIVE REMEDIES. Landlord's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.
ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01. SUBORDINATION. Landlord shall have the right to subordinate
this Lease to any ground lease, deed of trust or mortgage encumbering the
Property, any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever made
or recorded. Tenant shall cooperate with Landlord and any lender which is
acquiring a security interest in the Property or the Lease. Tenant shall execute
such further documents and assurances as such lender may reasonably require,
provided that Tenant's obligations under this Lease shall not be increased in
any material way (the performance of ministerial acts shall not be deemed
material), and Tenant shall not be deprived of its rights under this Lease.
Tenant's right to quiet possession of the Property during the Lease Term shall
not be disturbed if Tenant pays the rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording thereof.
Section 11.02. ATTORNMENT. If Landlord's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or
successor to Landlord's interest in the Property and recognize such transferee
or successor as Landlord under this Lease. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Property upon the transfer
of Landlord's interest.
Section 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such attornment
or subordination or agreement to do so within ten (10) days after receipt of
written request.
Section 11.04. ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall execute, acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been cancelled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default, stating
why); and (v) such other representations or information with respect to Tenant
or the Lease as Landlord may reasonably request or which any prospective
purchaser or encumbrancer of the Property may require. Tenant shall deliver such
statement to Landlord within ten (10) days after Landlord's request. Landlord
may give any such statement by Tenant to any prospective purchaser or
encumbrancer of the Property. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct.
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(b) If Tenant does not deliver such statement to Landlord within such ten
(10) day period, Landlord, and any prospective purchaser or encumbrancer, may
conclusively presume and rely upon the following facts: (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord; (ii) that this Lease has not been cancelled or terminated except as
otherwise represented by Landlord; (iii) that not more than one month's Base
Rent or other charges have been paid in advance; and (iv) that Landlord is not
in default under the Lease. In such event, Tenant shall be stopped from denying
the trust of such facts.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01. LEGAL PROCEEDINGS. If any action for breach of or to enforce
the provisions of this Lease is commenced, the court in such action shall award
to the party in whose favor a judgment is entered, a reasonable sum as
attorneys' fees and costs. The losing party in such action shall pay such
attorneys' fees and costs. Tenant shall also indemnify Landlord against and hold
Landlord harmless from all costs, expenses, demands and liability Landlord may
incur if Landlord becomes or is made a party to any claim or action (a)
instituted by Tenant against any third party, or by any third party against
Tenant, or by or against any person holding any interest under or using the
Property by license of or agreement with Tenant; (b) for foreclosure of any lien
for labor or material furnished to or for Tenant or such other person; (c)
otherwise arising out of or resulting from any act or transaction of Tenant or
such other person; or (d) necessary to protect Landlord's interest under this
Lease in a bankruptcy proceeding, or other proceeding under Title 11 of the
United States Code, as amended. Tenant shall defend Landlord against any such
claim or action at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs Landlord incurs in any such claim or action.
Section 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's reasonable
attorneys' fees (up to a maximum of $1,000) incurred in connection with Tenant's
request for Landlord's consent under Article Nine (Assignment and Subletting),
or in connection with any other act which Tenant proposes to do and which
requires Landlord's consent, other than consents required in connection with
Tenant's initial buildout of the Property.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
Section 13.01. NON-DISCRIMINATION. Tenant promises, and it is a condition
to the continuance of this Lease, that there will be no discrimination against,
or segregation of, any person or group of persons on the basis of race, color,
sex, creed, national origin or ancestry in the leasing, subleasing,
transferring, occupancy, tenure or use of the Property or any portion thereof.
Section 13.02. LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only the current
owner or owners of the fee title to the Property or the leasehold estate under a
ground lease of the Property at the time in question. Each Landlord is
obligated to perform the obligations of Landlord under this Lease only during
the time such Landlord owns such interest or title. Any Landlord who transfers
its title or interest is relieved of all liability with respect to the
obligations of Landlord under this Lease to be performed on or after the date of
transfer. However, each Landlord shall deliver to its transferee all funds that
Tenant previously paid if such funds have not yet been applied under the terms
of this Lease.
(b) Tenant shall give written notice of any failure by Landlord to perform
any of its obligations under this Lease to Landlord and to any ground lessor,
mortgagee or beneficiary under any deed of trust encumbering the Property whose
name and address have been furnished to Tenant in writing. Landlord shall not be
in default under this Lease unless Landlord (or such ground lessor, mortgagee or
beneficiary) fails to cure such non-performance within thirty (30) days after
receipt of Tenant's notice. However, if such non-performance reasonably requires
more than thirty (30) days to cure, Landlord shall not be in default if such
cure is commenced within such thirty (30)-day period and thereafter diligently
pursued in completion.
(c) Notwithstanding any term of provision herein to the contrary, the
liability of Landlord for the performance of its duties and obligations under
this Lease is limited to Landlord's interest in the Property and any insurance
proceeds related thereto, and neither the Landlord nor its partners,
shareholders, officers or other principals shall have any personal liability
under this Lease.
Section 13.03. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.
Section 13.04. INTERPRETATION. The captions of the Articles or Sections of
this Lease are to assist the parties in reading this Lease and are not a part of
the terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural and the plural shall include the
singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Property with Tenant's expressed or
implied permission.
Section 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This
Lease is the only agreement between the parties pertaining to the lease of the
Property and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.
Section 13.06. NOTICES. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be
delivered to the address specified in Section 1.03 above, except that upon
Tenant's taking possession of the Property, the Property shall be Tenant's
address for notice purposes. Notices to Landlord shall be delivered to the
address specified in Section 1.02 above. All notices shall be effective upon
receipt or refusal. Either party may change its notice address upon written
notice to the other party.
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Section 13.07. WAIVERS. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of this Lease or its
acceptance of rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.
Section 13.08. NO RECORDATION. Tenant shall not record this Lease without
prior written consent from Landlord. However, either Landlord or Tenant may
require that a "Short Form" memorandum of this Lease executed by both parties
be recorded. The party requiring such recording shall pay all transfer taxes
and recording fees.
Section 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any party
who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant's successor unless
the rights or interests of Tenant's successor are acquired in accordance with
the terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease.
Section 13.10. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. Within thirty
(30) days after this Lease is signed, Tenant shall deliver to Landlord a
certified copy of a resolution of Tenant's Board of Directors authorizing the
execution of this Lease or other evidence of such authority reasonably
acceptable to Landlord. If Tenant is a partnership, each person or entity
signing this Lease for Tenant represents and warrants that he or it is a general
partner of the partnership, that he or it has full authority to sign for the
partnership and that this Lease binds the partnership and all general partners
of the partnership. Tenant shall give written notice to Landlord of any general
partner's withdrawal or addition. Within thirty (30) days after this Lease is
signed, Tenant shall deliver to Landlord a copy of Tenant's recorded statement
of partnership or certificate of limited partnership.
Section 13.11. JOINT AND SEVERAL LIABILITY. All parties signing this Lease
as Tenant shall be jointly and severally liable for all obligations of Tenant.
Section 13.12. FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Landlord's control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.
Section 13.13. EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Landlord's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.
Section 13.14. SURVIVAL. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease.
ARTICLE FOURTEEN: BROKERS
Section 14.01. BROKER'S FEE. When this Lease is signed by and delivered to
both Landlord and Tenant, Landlord shall pay a real estate commission to
Landlord's Broker named in Section 1.08 above, if any, as provided in the
written agreement between Landlord and Landlord's Broker, or the sum stated in
Section 1.09 above for services rendered to Landlord by Landlord's Broker in
this transaction. If a Tenant's Broker is named in Section 1.08 above,
Landlord's Broker shall pay an appropriate portion of its commission to
Tenant's Broker if so provided in any agreement between Landlord's Broker and
Tenant's Broker. Nothing contained in this Lease shall impose any obligation on
Landlord to pay a commission or fee to any party other than Landlord's Broker.
Section 14.03. AGENCY DISCLOSURE; NO OTHER BROKERS.
Landlord and Tenant each warrant that they have dealt with no other real estate
broker(s) in connection with this transaction except: CB Commercial Real Estate
Group, Inc., who represents Tenant and Colliers Macaulay Nicholls, who
represents Landlord.
In the event that CB Commercial represents both Landlord and Tenant,
Landlord and Tenant hereby confirm that they were timely advised of the dual
representation and that they consent to the same, and that they do not expect
said broker to disclose to either of them the confidential information of the
other party.
ARTICLE FIFTEEN: COMPLIANCE
The parties hereto agree to comply with all applicable federal, state and
local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, property or the subject matter of this
Agreement, including, but not limited to, the 1964 Civil Rights Act and all
amendments thereto, the Foreign Investment In Real Property Tax Act, the
Comprehensive Environmental Response Compensation and Liability Act, and The
Americans With Disabilities Act.
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ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED HERETO
OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED, PLEASE
DRAW A LINE THROUGH THE SPACE BELOW.
Landlord and Tenant have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialled all Riders
which are attached to or incorporated by reference in this Lease.
"LANDLORD"
Signed on 24 November, 1997 MV 1997, AN L.L.C.
----------- -- ---------------------------------
at Bellevue, Washington
------------------------ ---------------------------------
By: /s/ illegible
---------------------------------
Its: Member
---------------------------------
By:
---------------------------------
Its:
---------------------------------
"TENANT"
Signed on Nov 24 , 1997 Humongous Entertainment, Inc.
----------- -- ---------------------------------
a Washington Corporation
at Woodinville, WA
------------------------ ---------------------------------
By: /s/ Shelley McDay
---------------------------------
Its: President/CEO
---------------------------------
By:
---------------------------------
Its:
---------------------------------
IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH A
PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER PERSON
WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING THE
POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.
THIS PRINTED FORM LEASE HAS BEEN DRAFTED BY LEGAL COUNSEL AT THE DIRECTION
OF THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE
REALTORS(R), INC. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE SOUTHERN
CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE REALTORS(R), INC.,
ITS LEGAL COUNSEL, THE REAL ESTATE BROKERS NAMED HEREIN, OR THEIR EMPLOYEES OR
AGENTS, AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS
LEASE OR OF THIS TRANSACTION. LANDLORD AND TENANT SHOULD RETAIN LEGAL COUNSEL TO
ADVISE THEM ON SUCH MATTERS AND SHOULD RELY UPON THE ADVICE OF SUCH LEGAL
COUNSEL.
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of the Society of Industrial
and Office Realtors [Logo]
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STATE OF WASHINGTON )
) SS.
COUNTY OF KING )
On this 24th day of November, 1997, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared SHELLEY DAY, to me known to be the person who signed as
PRESIDENT & CEO of HUMONGOUS ENTERTAINMENT, INC., the corporation that
executed the within and foregoing instrument, and acknowledged 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 SHE was duly elected,
qualified and acting as said officer of the corporation, that SHE was
authorized to execute said instrument and that the seal affixed, if any, is the
corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
/s/ Teddi L. Hosman
-------------------------------
(Signature of Notary)
TEDDI L. HOSMAN
------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at BOTHELL, WA
My appointment expires: 10/9/98
STATE OF WASHINGTON )
) SS.
COUNTY OF KING )
On this 24th day of November, 1997, before me, the undersigned, a Notary
Public in and for the state of Washington, duly commissioned and sworn,
personally appeared JACK MARTIN, to me known to be the person who signed as
MEMBER of M.V. 1997, An L.L.C., the limited liability company that executed the
within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said limited liability company for the uses
and purposes
<PAGE> 14
therein mentioned, and on oath stated that he was authorized to execute said
instrument on behalf of the limited liability company.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
[NOTARY SEAL] /s/ Susan C. Leitzke
_______________________________________
(Signature of Notary)
Susan C. Leitzke
_______________________________________
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at Bellevue.
My appointment expires: 08-02-98.
-2-
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EXHIBIT A
(Legal Description of Property)
Lots 1 and 2, Plat of Quadrant Monte Villa Center, according to the Plat thereof
recorded in Volume 54 of Plats, pages 165-169, records of Snohomish County,
Washington;
EXCEPT the north 166.00 feet of Lot 2 measured at right angles from the north
line of said Lot 2.
(Also known as Lot 1A of City of Bothell Lot Line Adjustment No. SPL 0011-96,
Snohomish County Recording No. 9611190059.)
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EXHIBIT B
Site Plan
[MAP]
<PAGE> 17
EXHIBIT C
SCHEDULE A
1. SPECIFICATION FOR TENANT IMPROVEMENTS
The following is an outline specification regarding the tenant improvements to
be built by Landlord, under the Lease and Addendum thereto dated November 24,
1997 between M.V. 1997, An L.L.C. ("Landlord") and Humongous Entertainment, Inc.
("Tenant").
1.1 BASE BUILDING REQUIREMENTS
1.1.1. MECHANICAL SYSTEM
Landlord shall install and distribute a high quality VAV HVAC system
with a minimum capacity of one ton of cooling capacity for every 415
RSF. The system shall have the capacity to individually control zones
of 800 RSF, and have DDC controls (wired or wireless at Tenant's
option). One large passenger elevator (4,500 lb. capacity), and
restrooms per current code. The HVAC system will be capable of
operating 24 hours per day, seven days per week, so that Tenant may
maintain a temperature of 68 to 72 degrees at all times.
1.1.2. ELECTRICAL SYSTEM
Landlord shall provide to the Property distributed through step down
transformers and to panels on each floor a 2000 Amp, 277/480 3 Phase
service and distributed at the perimeter open areas at one duplex per
10 lineal feet. Lighting to be 3 tube, electronic ballast fixtures,
deep cell parabolic lenses (one fixture per 80 square feet - open
areas) throughout except at Lobby/Reception area and Rest Rooms which
shall have recessed can lighting. In addition to the lighting and HVAC
requirements, Landlord shall provide electrical outlets as set forth
on Exhibit C-1 attached hereto based upon 2 watts per square foot.
Further, Landlord shall provide the additional electrical needs of the
Tenant's workstations in the amount of 2 watts per square foot. Lessor
shall provide conduit with pull string to j:box for voice/data
termination by Tenant. Conduit to be sized to accommodate a minimum of
4, 4 pair level five cables.
1.1.3. LIFE/SAFETY
Landlord shall be responsible for compliance with all safety code
requirements including but not limited to smoke detection, exiting,
and ADA requirements as of the occupancy date of the Property.
1.1.4. MINI BLINDS
Landlord shall be responsible for providing mini blinds on all
exterior windows of the building on all floors.
1.2 LEVEL OF FINISH STANDARDS
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SCHEDULE A
PAGE 2
1.2.1. GENERAL OFFICE AND PRIVATE OFFICES
Landlord shall grant to Tenant an $18.00 per yard allowance for all
carpet. This allowance may be credited towards alternate floor
covering or other tenant improvements.
Painted Walls - Interior low sheen acrylic latex paint, applied in two
coats. Tenant may choose up to four different colors.
The Property, including Open Office and Private Offices, to have 2 x 4
Parabolic Fixtures in a 2 x 4 grid, with "second look" tegular tile.
Doors and Relites - 3'0" x 7'0" solid core premium grade stained wood
door with painted metal frames and 1 - 3'0" x 7'0" relites per office.
Heavy duty mortise type locksets and latchsets of commercial hardware.
A maximum of 75% of the private offices shall have relites.
1.2.2. RECEPTION AREA
Landlord will provide slate for the reception area on the first floor.
(300 square feet maximum.)
6" Slate Base and Painted Walls.
Painted Gypsum Board Ceiling with recessed fluorescent downlights and
wall washers (10 allowed).
1.2.3. KITCHEN AND SHOWER AREAS
In addition to the base building and basic tenant improvements as
outlined, Landlord shall provide showers (2 mens - 2 women's), locker
room and lockers; floor to be slate in the shower and locker areas.
Restrooms - hard surface flooring with 4' wainscoating in tile; wall
hung fixtures and P-Lam partitions. Landlord shall rough-in plumbing
for dishwasher, refrigerator, ice maker, and provide a $10,000.00
allowance for appliances.
1.2.4. GENERAL NOTES
All interior walls to have sound batt insulation.
1.2.5. COFFEE BARS
Landlord shall provide two coffee bars each with a sink in addition to
the sink in the lunch area.
1.2.6. CABINETS
Landlord will provide seventy (70) lineal feet of P-Lam upper and
lower cabinets.
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EXHIBIT C-1
DESCRIPTION QUANTITY
Furnish 2x4 Deep Cell Parabolic Lights 3F32 778
Install 2x4 Deep Cell Lighting Fixtures 778
Install Lighting Fixture Circuit Grid 778
Add 3rd 400AMP 120V Tenant Panelboard to Each Floor 2
Duplex Receptacles (6 outlets per circuit 210
Four-Plex Receptacles (3 four-plex per circuit) 210
Duplex Receptacles (6 outlets per circuit)--Printers 16
Switches 60
Dual Switches 120
Dedicated Duplex Receptacles--Computer Room 6
Dedicated Four-Plex Receptacles--Break Room 8
Dedicated Duplex Receptacles--Copiers 4
Electrical Wiring for System Furniture (4 to 6 person workstations) 30
(Plugs to be installed in floor; connections to workstations are
Tenant's cost)
Tele/Data Rough-In Outlets 226
Coffee Bar Requirements (Dedicated Duplex Timer Switch UC
Lighting Miscellaneous) 2
Engineering 3% of above
costs
Misc. Taxes & Insurance 3% of above
costs
Electrical Permit--State 1% of above
costs
Washington State Sales Tax
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ADDENDUM TO INDUSTRIAL REAL ESTATE LEASE
THIS ADDENDUM TO INDUSTRIAL REAL ESTATE LEASE (the "Addendum") is entered
into as of November 24, 1997 by and between M.V. 1997, An L.L.C., a Washington
limited liability company ("Landlord") and Humongous Entertainment, Inc., a
Washington corporation ("Tenant"). This Addendum supplements the terms of the
Industrial Real Estate Lease between Landlord and Tenant of even date herewith
(the "Lease"). To the extent any terms of this Addendum conflict with any
provisions of the Lease, the terms of this Addendum shall control. Terms used in
this Addendum and not otherwise defined shall have the meanings given them in
the Lease.
1. Parking. Section 1.11 of the Lease is amended to add the following:
"Prior to the Commencement Date, Landlord agrees to use its reasonable
efforts to increase the number of vehicle parking spaces in the
Property."
2. Base Rent. Section 1.12(a) is amended in its entirety as follows:
"Tenant shall pay Base Rent with respect to the Property as follows:
Month of Lease
Term Base Rent per Month
1 through 6 Sixty-Eight Thousand Two Hundred Seventy-Five
Dollars ($68,275)
7 through 12 Seventy-One Thousand Seven Hundred Fifteen
Dollars ($71,715)
13 through 60 Seventy-Five Thousand One Hundred Fifty
Dollars ($75,150)
61 through 120 Eighty-Four Thousand One Hundred Fifty
Dollars ($84,150)"
3. Delay in Commencement. (a) The following is inserted at the beginning
of Section 2.02 of the Lease:
"Provided that (a) Tenant is prepared, by December 31, 1997, to file
its Building Permit Submittal Documents with respect to the tenant
improvements to be constructed on the Property with the City of
Bothell in order to obtain the required building permits and (b) there
is no Tenant Delay (as defined in Section 31 of this Addendum), then
for every day after June 25, 1998 that the Property is not available
for occupancy by Tenant, Tenant shall receive three (3) days of rent.
In the event of a Tenant Delay caused by Tenant's failure to submit
the Building Permit Submittal Documents to the City of Bothell by
December 31, 1997, (a) if the Property is not available for Tenant's
occupancy by June 1, 1998 due solely to such failure by Tenant, rent
shall be payable commencing on June 1, 1998 and (b) the June 25, 1998
date set forth in this paragraph shall be extended by one day for each
day after December 31, 1997 that the Building Permit Submittal
Documents are not submitted to the City of Bothell. If Landlord and
Tenant are unable to agree with
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respect to the cause(s) of delay in Tenant's occupancy of the Property
by June 1, 1998, the parties' architects shall determine such cause(s)
by mutual agreement. If the parties' architects are unable to reach
agreement, the architects shall select a mutually agreeable third
architect, whose determination of the cause(s) of such delay shall be
final."
The following is inserted at the end of Section 2.02 of the Lease:
"If Tenant elects to cancel the Lease as set forth in this Section
2.02, Tenant shall be released from all liability under the Lease and
shall be entitled to liquidated damages from Landlord in the amount of
Five Hundred Thousand Dollars ($500,000)."
4. Early Occupancy. Section 2.03 of the Lease is amended in its entirety
as follows:
"Section 2.03 EARLY OCCUPANCY. Except as set forth below, if Tenant
occupies the Property prior to the Commencement Date, Tenant's
occupancy of the Property shall be subject to all of the provisions of
this Lease. Tenant shall be entitled to occupy the Property during the
ten (10) business day period immediately preceding the Commencement
Date (the "Move-In Period") in order to install furniture, fixtures,
equipment and cabling. Tenant shall not be required to pay rent for
the Move-In Period. Early occupancy of the Property shall not advance
the expiration date of this Lease."
5. Security Deposit. (a) The second sentence of Section 3.03(a) is
replaced with the following:
"Landlord shall be entitled to apply all or part of the Security
Deposit to (a) any rent or other charges due from Tenant remaining
unpaid after delivery of notice to Tenant and expiration of the cure
period with respect to monetary defaults under the Lease or (b) any
other defaults of Tenant remaining uncured after delivery of notice to
Tenant and expiration of the applicable cure period."
(b) The sixth sentence of Section 3.03(a) is replaced with the following:
"Landlord shall keep the Security Deposit in a separate
interest-bearing account and shall not commingle the Security Deposit
with the funds of Landlord or any third parties.
6. Real Property Taxes. (a) Section 4.02(a) is amended in its entirety
as follows:
"(a) REAL PROPERTY TAXES. Landlord shall pay all property taxes on the
Property during the Lease Term. Tenant shall reimburse Landlord for
such taxes within fifteen (15) days of receipt by Tenant of written
evidence of Landlord's payment thereof."
(b) The following is added to Section 4.02(b):
"With respect to any assessments imposed with respect to the Property
during the Lease Term, if provided an option by the assessing
authority, Landlord shall elect to spread the payment of such
assessments over the maximum allowable time period
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and Tenant shall be responsible for payment of only those portions of
the assessments which are due and payable during the Lease Term."
7. Insurance. (a) The first sentence of Section 4.04(b) of the Lease is
replaced with the following:
"During the Lease Term, Landlord shall maintain policies of insurance
covering loss of or damage to the Property with coverages in the
following amounts: (i) Building -- $5,000,000; (ii) General Liability
-- $2,000,000; (iii) Umbrella -- $10,000,000; and (iv) Earthquake --
$5,400,000; provided, however, that Landlord shall be entitled to
increase the insurance coverage from time to time with respect to the
building to equal the building's replacement value, as such
replacement value is agreed upon by Landlord and Tenant. If Landlord
and Tenant are unable to agree upon the replacement value, an MAI
appraiser mutually agreed upon by Landlord and Tenant shall determine
such replacement value. The cost of such appraisal shall be borne
equally by Landlord and Tenant. Landlord shall also be entitled to
maintain boiler, machinery and crime insurance in amounts which a
reasonably prudent business person would maintain under similar
circumstances."
(b) Section 4.04(d)(ii) is amended in its entirety as follows:
"If Tenant fails to deliver any policy, certificate or renewal to
Landlord required under this Lease within the prescribed time period
or if any such policy is canceled or modified during the Lease Term
without Landlord's consent, Landlord may, after providing five (5)
business days written notice to Tenant and Tenant's failure to deliver
to Landlord within such period a policy, certificate or renewal which
complies with this Lease, obtain such insurance, in which case Tenant
shall reimburse Landlord for the cost of such insurance within fifteen
(15) days after receipt of a statement that indicates the cost of such
insurance."
(c) The last sentence of Section 4.04(d)(iv) is replaced with the
following:
"Landlord and Tenant shall each cause its insurance carriers to
consent to such waiver and to waive all rights of subrogation against
the other party."
8. Interest on Past Due Obligations. The first two sentences of Section
4.06 of the Lease are replaced with the following:
"Any amount owed by Tenant to Landlord which is not paid after
delivery of written notice by Landlord to Tenant and prior to
expiration of any applicable cure period shall bear interest at a rate
equal to the "prime rate" as announced from time to time by Bank of
America, N.A. plus four percent (4%) per annum from the due date until
paid."
9. Hazardous Materials. The last three sentences of Section 5.03 of the
Lease are replaced with the following:
"Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought on, used, stored, treated or disposed of
in or about the Property
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by Tenant, its agents, employees, contractors, sublesses or invitees other
than in compliance with all applicable laws and regulations. Landlord
represents, warrants and agrees that:
(a) Landlord has not used, generated, manufactured, produced,
stored, released, discharged or disposed of on, under or about the Property
(or off-site of the Property that might affect the Property) or transported
from the Property, any Hazardous Substance, nor to the best of Landlord's
actual knowledge has any Hazardous Substance been used, generated,
manufactured produced, stored, released, discharged or disposed of or,
under or about the Property (or off-site of the Property that might affect
the Property).
(b) Landlord will not use, generate, manufacture, produce, store,
release, discharge or dispose of on, under of about the Property (or
off-site of the Property that might affect the Property), or transport to
or from the Property, any Hazardous Substance other than in compliance
with all applicable laws and regulations.
(c) To the best of Landlord's actual knowledge no underground storage
tanks have been removed from the Property, and no underground storage tanks
are located on the Property.
(d) Landlord shall protect, indemnify, defend and hold harmless
Tenant and its directors, officers, employees, agents, parents,
subsidiaries, successors and assigns from any loss, damage, cost expense or
liability (including reasonable attorneys' fees and costs) directly or
indirectly arising out of or attributable to the Landlord's use,
generation, manufacture, production, storage, release, threatened release,
discharge, disposal or presence of a Hazardous Substance on, under or about
the Property (or off-site on property owned or operated by Landlord that
affected the Property) or a breach of any representation, warranty,
covenant or agreement contained in this Section 5.03 including, without
limitation, the costs of any required or necessary repairs, cleanup or
detoxification of the Property and the preparation and implementation of
any closure, remedial or other required plans.
Tenant shall protect, indemnify, defend and hold harmless Landlord and its
directors, partners, officers, employees, agents, parents, subsidiaries,
successors and assigns from any loss, damage, cost, expense or liability
(including reasonable attorneys' fees and costs) directly or indirectly
arising out of or attributable to the use, generation, manufacture,
production, storage, release, discharge, disposal or presence of Hazardous
Substance on the Property (or off-site of the Property) caused by Tenant
and its employees, agents, contractors, licensees and invitees, or a
breach of any representation, warranty, covenant or agreement contained in
this Section 5.03, including, without limitation, the costs of any required
or necessary repairs, cleanup or detoxification of the Property and the
preparation and implementation of any closure, remedial or other required
plans.
This Section 5.03. shall survive expiration of this Lease."
10. Indemnity. Section 5.05 of the Lease is amended in its entirety as follows:
"Section 5.05. Indemnity.
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(a) Tenant shall indemnify and hold harmless Landlord from claims, suits,
actions, or liabilities for personal injury, death or for loss or damage to
property that arises out of (i) Tenant's use of the Property or (ii) the
negligence or willful misconduct of Tenant, its employees, agents, or invitees,
or (iii) any breach or default by Tenant in the performance of any obligation on
Tenant's part to be performed under this Lease.
This indemnity does not apply (A) to claims, suits, actions or liabilities to
the extent they are caused by the negligent acts or omissions or willful
misconduct of Landlord, its agents, employees, contractors or invitees, (B) to
damage, claims, suits, actions or liabilities waived under Section 4.04(d)(iv),
or (C) to the indemnity in Section 5.03.
Tenant shall have the right to assume the defense of any claim subject to this
indemnity. Landlord agrees to cooperate fully with Tenant and Tenant's counsel
in any matter where Tenant elects to defend, provided Tenant promptly reimburses
Landlord for reasonable costs and expenses incurred in connection with its duty
to cooperate.
The foregoing indemnity is conditioned upon Landlord providing prompt notice to
Tenant of any claim or occurrence that is likely to give rise to a claim, suit,
action or liability that will fall within the scope of the foregoing indemnity,
along with sufficient details that will enable Tenant to make a reasonable
investigation of the claim.
When the claim is caused by the joint negligence or willful misconduct of Tenant
and Landlord or Tenant and a third party unrelated to Tenant (except Tenant's
agents, officers, employees or invitees), Tenant's duty to indemnify and defend
shall be proportionate to Tenant's allocable share of joint negligence or
willful misconduct.
(b) Landlord shall indemnify and hold harmless Tenant from claims, suits,
actions, or liabilities for personal injury, death or for loss or damage to
property that arises from (i) any activity, work, or thing, done or permitted by
Landlord in or about the Property, or (ii) based on any breach or default by
Landlord in the performance of any obligation on Landlord's part to be performed
under this Lease.
This indemnity does not apply to claims, suits, actions or liabilities (A) to
the extent they are caused by the negligent acts or omissions or willful
misconduct of Tenant, its agents, employees, contractors or invitees, (B) to
damage, claims, suits, actions or liabilities waived under Section 4.04(d)(iv),
or (C) to the indemnity in Section 5.03.
Landlord shall have the right to assume the defense of any claim subject to this
indemnity with counsel reasonably satisfactory to Tenant. Tenant agrees to
cooperate fully with Landlord and Landlord's counsel in any matter where
Landlord elects to defend, provided Landlord shall promptly reimburse Tenant for
reasonable costs and expenses incurred in connection with its duty to cooperate.
The foregoing indemnity is conditioned upon Tenant providing prompt notice to
Landlord of any claim or occurrence that is likely to give rise to a claim,
suit, action
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or liability that will fall within the scope of the foregoing
indemnity, along with sufficient details that will enable Landlord to
make a reasonable investigation of the claim.
When the claim is caused by the joint negligence or willful
misconduct of Tenant and Landlord, Landlord's duty to indemnify and
defend shall be proportionate to Landlord's allocable share of joint
negligence or willful misconduct."
11. CONDITION OF PROPERTY: MAINTENANCE AND REPAIRS. Sections 6.01, 6.02,
6.03 and 6.04 are amended in their entirety as follows:
"6.01. REPAIR OF DEFECTS. Landlord, at its sole cost and expense
without cost or charge to or contribution by Tenant, shall be responsible
for and make all repairs, replacements and perform all maintenance required
because of (i) defective design or construction of the improvements on the
Property (unless designed and constructed by Tenant), and all equipment and
systems associated therewith and/or incorporated therein, or (ii) latent
defects in any of the foregoing. Landlord represents and warrants that, on
completion of Tenant's Work, all improvements on the Property shall have
been built in accordance with and comply with all applicable Laws.
6.02. TENANT'S MAINTENANCE. Tenant shall keep and maintain Tenant's
furniture and fixtures at the Property in good order, condition, and
repair, ordinary wear and tear and damage by casualty or Landlord's
negligence excepted. Tenant shall also be responsible for obtaining
janitorial services with respect to the Property.
6.03. LANDLORD'S MAINTENANCE. Except for repairs and replacements that
Tenant must make under Section 6.02, Landlord shall make all other repairs
and replacements to the Property and the improvements thereon. Landlord
shall make the repairs and replacements and perform all maintenance
necessary to keep the Property and all improvements thereon in good working
order and repair. This maintenance and repair shall include without
limitation the roof, foundation, exterior walls, interior structural walls,
all structural components, utility lines and all systems, such as
mechanical, electrical, HVAC, plumbing and sewer. Landlord's work under
this Section 6.03 shall be accomplished with the least possible amount of
interference with the conduct of Tenant's business and, to the extent
practicable, shall be done after normal business hours. As set forth in
Section 25 hereof, the cost of certain of such repairs and replacements
shall be included in Operating Costs. Landlord will indemnify, protect,
defend and hold harmless Tenant against all claims, liabilities, damages,
costs or causes of action (including attorney fees) arising out of or
brought on account of injury to any person or property or loss of life
resulting from any failure by Landlord to perform its obligations under
this Section 6.03.
6.04. TIME TO COMPLETE WORK. All work to be performed by either party
under this Article shall be completed promptly but in any event within
twenty-four (24) hours in any emergency (as defined below) and within
twenty (20) days for all other repairs. If the work cannot be completed
within twenty-four (24) hours or twenty (20) days, as the case may be, it
shall be commenced within the applicable period and prosecuted continuously
and diligently thereafter until completion.
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"Emergency" means a situation that (i) threatens the physical
well-being of persons within the Property, (ii) materially disrupts
the Tenant's use and/or occupancy of the Property or any portion
thereof, or (iii) disrupts Tenant's use of parking."
12. Alterations, Additions, and Improvements. The first and second
sentences of Section 6.05 of the Lease are replaced with the following:
"Tenant shall not make any alterations, additions, or improvements to
the Property without Landlord's prior written consent (which consent
shall not be unreasonably withheld), except for non-structural
alterations which do not exceed Twenty-Five Thousand Dollars
($25,000) in cost individually or Two Hundred Thousand Dollars
($200,000) cumulatively over the Lease Term and which are not visible
from the outside of any building of which the Property is part. Any
decorative alterations, additions, or improvements to the Property
(including, but not limited to, carpet replacement) shall not be
included for purposes of calculating the $25,000/$200,000 limitations
set forth above."
13. Partial Damage to Property. (a) Section 7.01(a) of the Lease is
amended in its entirety as follows:
"(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is only
partially damaged (i.e., the cost to repair the Property is less than
60% of the Property's replacement cost), this Lease shall remain in
effect and Landlord shall repair the damage as soon as reasonably
possible. Landlord may elect (but is not required) to repair any
damage to Tenant's fixtures, equipment or improvements."
(b) The following is added as a new Section 7.01(d) of the Lease:
"(d) Landlord shall notify Tenant in writing within thirty (30) days
of receipt of notice of damage to the Property of the estimated time
to complete the repair of the Property. If the damage to the Property
will require more than four (4) months to repair, Tenant may elect to
terminate this Lease as of the date the damage occurred, regardless
of the sufficiency of any insurance proceeds. In the event Landlord
elects to repair the Property, but such repair is not completed
within four (4) months, Tenant shall be entitled to terminate this
Lease upon expiration of the four-month period."
14. Taking of Parking. The following is added to Article Eight of the
Lease:
"If only a portion of the parking area located on or serving the
Property is the subject of a Condemnation, and the Condemnation
reduces the number of parking spaces on the Property below 258,
Tenant has the right to terminate this Lease by giving notice to
Landlord within thirty (30) days after title vests in the condemning
authority. Landlord may suspend the effectiveness of Tenant's notice
by giving its own notice to Tenant within five (5) days of receipt
of Tenant's termination notice that Landlord will provide substitute
parking spaces equal to the number taken within two hundred (200)
yards of the Property within thirty (30) days of the vesting of
title. If Landlord restores the number of taken parking spaces within
the thirty (30) days, Tenant's notice of termination shall be
nullified and of no force and effect. If Landlord does not restore
the number of taken parking spaces within the
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thirty (30) period, this Lease shall be terminated at the expiration
of such thirty (30) day period."
15. ASSIGNMENT AND SUBLETTING. (a) Section 9.05(a) is amended by adding
the following at the end of such Section:
"Landlord shall notify Tenant in writing within fifteen (15) days of
receipt of Tenant's request for consent (and all other information
required by this Section 9.05(a)) whether Landlord consents to an
assignment or subletting of the Property. If Landlord does not notify
Tenant in writing within such 15-day period, Landlord shall be deemed
to have consented to such assignment or subletting.
(b) Section 9.06(b)(i) of the Lease is amended by adding the following at
the end of the second sentence:
"and an amount equal to the straight line amortization with respect to
any improvements made to the Property by Tenant prior to the
assignment or subletting."
16. DEFAULT. Section 10.02(b) is amended in its entirety as follows:
"(b) If Tenant fails to pay rent or any other charge within ten (10)
days of receipt of written notice from Landlord;"
17. SUBORDINATION. The following shall be added to the end of the first
sentence of Section 11.01 of the Lease:
"("Mortgage"), provided that a Subordination, Attornment and
Non-Disturbance Agreement ("SAND Agreement") in form reasonably
satisfactory to Tenant is executed, acknowledged and delivered by the
mortgagee to Tenant. Tenant shall execute and send to Landlord any
such SAND Agreement within ten (10) business days of receipt if the
SAND Agreement is acceptable to Tenant or within five (5) days after
agreement of the parties to the contents of same."
18. ESTOPPEL CERTIFICATES. The following is added as a new Section
11.04(b):
"(b) Upon Tenant's written request, Landlord shall execute,
acknowledge and deliver to Tenant a written statement certifying: (i)
that none of the terms or provisions of this Lease have been changed
(or if they have been changed, stating how they have been changed);
(ii) that this Lease has not been canceled or terminated; (iii) the
last date of payment of the Base Rent and other charges and the time
period covered by such payment; (iv) that Tenant is not in default
under this lease (or, if Tenant is claimed to be in default, stating
why); and (v) such other representations or information with respect
to Landlord or the Lease as Tenant may reasonably request. Landlord
shall deliver such statement to Tenant within ten (10) days after
Tenant's request."
19. TENANT'S FINANCIAL CONDITION. Section 11.05 of the Lease is amended
in its entirety as
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"Section 11.05 TENANT'S FINANCIAL CONDITION. Within ten (10) days
after written request from Landlord, Tenant shall deliver to Landlord
a copy of the financial statements of GT Interactive Software
Corporation (Tenant's parent) most recently filed with the U.S.
Securities and Exchange Commission. Landlord shall be entitled to
request such financial information no more frequently than once in any
12-month period and only if requested by Landlord's lender with
respect to the Property."
20. Landlord's Liability. The following is added to Section 13.02(c) of
the Lease:
"In the event that Landlord assigns this Lease to a purchaser of the
Property, such purchaser shall expressly assume all of Landlord's
obligations under this Lease, whether arising prior to or after such
assignment."
21. Notices. The following is added to Section 13.06 of the Lease:
"Landlord shall also send copies of any notices Landlord sends to
Tenant to GT Interactive Software Corporation at:
GT Interactive Software Corporation
16 East 40th Street
New York, NY 10016
Attn: David Chemerow"
22. Landlord Authority. The following is added to Section 13.10 of the
Lease:
"Within thirty (30) days after this Lease is signed, Landlord shall
deliver to Tenant a certified copy of a resolution of Tenant's members
or managers authorizing the execution of this Lease or other evidence
of such authority reasonably acceptable to Tenant."
23. Force Majeure. Section 13.12 of the Lease is amended in its entirety
as follows:
"Section 13.12 FORCE MAJEURE. If Landlord or Tenant cannot perform any
of their respective obligations due to events beyond Landlord's or
Tenant's control, respectively, the time provided for performing such
obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Landlord's or Tenant's control
include, but are not limited to, acts of God, war, civil commotion,
labor disputes, strikes, fire, flood or other casualty, shortages of
labor or material, governmental regulation or restriction and weather
conditions."
24. [Intentionally Omitted.].
25. Operating Costs. Landlord shall reasonably estimate the Operating
Costs (as defined below) with respect to the Property for each
calendar year wholly or partially included within the Lease Term and
shall send notice of the estimate to Tenant within thirty (30) days
after the Term begins for the first Lease year and thereafter at least
thirty (30) days before commencement of each subsequent calendar year.
The monthly charge for estimated operating costs shall be prorated for
any partial month by dividing the operating cost charge by 365 and
multiplying the result by the number of days in the partial month for
which operating costs are owed. "Operating Costs" shall mean the
following:
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<PAGE> 29
(a) real property taxes payable pursuant to Section 4.02(a) of the Lease;
(b) personal property taxes payable pursuant to Section 4.02(d) of the
Lease;
(c) insurance premiums payable pursuant to Section 4.04(c) of the Lease;
(d) owners' association dues with respect to the office park in which the
Property is located;
(e) a monthly property management fee (the "Property Management Fee")
equal to 3.25% of the Base Rent for the first five years of the Lease Term and
3.64% of the Base Rent for the remainder of the Lease Term;
(f) costs associated with landscape maintenance for the Property;
(g) a monthly roof and structural maintenance fee of $.02 per square foot
of the building to be constructed on the Property;
(h) costs associated with maintenance of the elevator to be located on
the Property;
(i) costs associated with maintenance of the HVAC system to be
installed in the improvements to be constructed on the Property;
(j) costs associated with once-a-month sweeping of the parking lot to be
located on the Property;
(k) costs associated with the twice-yearly washing of the exterior windows
of the building to be constructed on the Property; and
(l) repair and maintenance costs with respect to the Property (other than
costs associated with roof and structural maintenance and costs associated with
defects in the construction of the improvements on the Property).
Landlord has estimated that the monthly Operating Costs (excluding utility
charges) of the initial twelve (12) months of the Lease Term will be between
$0.19 and $0.24 per square foot of the building to be constructed on the
Property. Tenant shall not be obligated to pay Operating Costs in excess of
$0.19 per square foot for the initial twelve (12) months of the Lease Term.
Not later than sixty (60) days after the expiration of each calendar year
included in the Lease Term, Landlord shall submit to Tenant a written statement,
in sufficient detail for verification by Tenant, containing the amount of actual
Operating Costs for such year and any amounts owed by one party to the other for
such year. Tenant or its accountants shall have the right to inspect and audit
Landlord's books and records with respect to this Lease once each calendar year
during the Lease Term to verify actual Operating Costs. Any overcharge or
underpayment of Operating Costs shall be due from one party to the other within
thirty (30) days after the amount of the overcharge or underpayment has been
fixed.
Tenant shall pay directly any costs associated with janitorial services
(including interior window washing), utilities (electricity, water, sewer and
garbage removal), security system and fire alarm monitoring and related fire
safety expenses with respect to the Property.
26. Landlord's Work. Landlord, at its sole cost and expense, shall
construct on the Property the following ("Landlord's Work"), as more
specifically described on Exhibit C attached to the Lease:
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<PAGE> 30
(a) a building shell (including a finished elevator, three finished
stairwells, finished building exterior, a three-ply roof with rigid insulation.
Leveler Riviera mini blinds on exterior building windows, code compliant
restrooms at core locations, an electrical and elevator machine room, perimeter
furring, water to the building and at least one drive-in loading door);
(b) site work;
(c) parking areas;
(d) landscaping;
(e) fire sprinklers per code;
(f) a base electrical system with a minimum of 2,000 AMPS 277/480 volt
three-phase, four wire switch board; and
(g) an HVAC system as described in Section 1.1.1 of Exhibit C to the Lease.
Landlord warrants that Landlord's and Tenant's Work will be completed in
accordance with the plans and specifications and shall be free of defect.
Landlord shall cause Baugh Construction Company (the general contractor with
respect to the improvements to be constructed on the Property) ("Baugh") to
obtain the most favorable warranties obtainable from subcontractors performing
work with respect to the improvements to be constructed on the Property. No
later than December 8, 1997, Landlord shall advise Tenant with respect to the
warranties which will be obtained with respect to the roof and structural
components of the improvements to be constructed on the Property. Landlord
agrees that, in the event any defect in Landlord's or Tenant's Work is
discovered during the time period during which an applicable warranty is in
effect, Landlord shall promptly cure such breach at Landlord's expense, either
by pursuing its remedy against any contractor or subcontractor who performed
such work or by undertaking such remedy itself.
27. Space Planning Allowance. Landlord shall pay Tenant an allowance of
$35,000 on the Commencement Date to assist Tenant in defraying the direct and
indirect costs of space planning and preparing and providing Tenant's Plans and
other construction documentation. Tenant shall be responsible for the cost of
space planning and construction drawing in excess of such amount.
28. Tenant Improvements.
(a) The leasehold improvements on the Property, together with the base
building standard interior items and standard interior finishes provided by
Landlord and approved by Tenant will be hereinafter referred to as "Tenant's
Work." Such improvements shall include 67% enclosed spaces and/or private
offices and 33% open space. No later than December 19, 1997, Tenant shall cause
to be prepared and shall furnish to Landlord Building Permit Submittal Documents
(i.e., all documents necessary to permit Landlord to make application to the
City of Bothell for a building permit with respect to the Tenant's Work). The
Building Permit Submittal Documents shall be prepared by duly licensed or
registered architects and engineers and shall conform to applicable governmental
requirements as to the adequacy of plans and specifications submitted with an
application for a building or other construction permit so that such permit may
issue.
(b) Landlord shall review the Building Permit Submittal Documents and shall
inform Tenant no later than December 22, 1997 of its requested changes. Upon
receipt of Landlord's comments and requested changes, Tenant shall promptly
review the requested changes and, if Tenant agrees with such requested changes,
make the requested change to the Building Permit Submittal Documents and
resubmit same to Landlord for review. If Tenant is not agreeable to Landlord's
requested changes, Landlord and Tenant shall
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<PAGE> 31
negotiate in good faith to resolve the disagreement. Upon agreement to the
Building Permit Submittal Documents by Landlord and Tenant, the Building Permit
Submittal Documents shall become the Construction Documents.
(c) If Landlord and Tenant do not agree to the changes to be made to the
Building Permit Submittal Documents as provided for in Section 28(b) by December
31, 1997, Tenant has the right, to be exercised by written notice to the
Landlord within five (5) business days after the expiration of such time period,
to terminate the Lease.
(d) Upon Landlord's and Tenant's agreement to the Construction Documents,
Landlord at its sole cost and expense shall obtain or cause to be obtained all
building permits and other governmental approvals which may be required to
permit construction of the Tenant's Work in accordance with the Construction
Documents and the occupancy thereof for the intended uses.
(e) Tenant's agreement with respect to the Construction Documents shall
not: (i) impose any present or future liability on Tenant; (ii) constitute a
waiver of any of Tenant's rights hereunder; (iii) impose additional obligations
on Tenant; or (iv) impose on Tenant any responsibility for a design and/or
construction defect or fault in the Tenant's Work. Notwithstanding anything to
the contrary contained elsewhere in this Lease, the correction of any such
defect or fault whenever necessary and whatever involving shall be at Landlord's
sole cost and expense without any expense, payment, cost or charge whatever to
or contribution by Tenant.
(f) Tenant shall provide Landlord with five (5) sets of Construction
Documents, and Landlord and Tenant shall execute or initial counterparts
thereof. The Construction Documents shall be final and shall not be changed by
Landlord in any material respect without the prior consent of Tenant which
consent shall not be unreasonably withheld.
(g) Upon establishment of the Construction Documents, Landlord shall
promptly commence construction of Tenant's Work and diligently proceed to
complete same at its sole cost and expense. Landlord warrants and represents
that all portions of the Property will be constructed with new materials. The
construction shall be performed by or on behalf of Landlord in a good and
workmanlike manner and in compliance with all Laws. Landlord has the entire and
sole responsibility to correct any portion(s) of the Tenant's Work which is not
in compliance with Laws, all at its sole cost and expense without expense,
payment, cost or charge whatever to or contribution by Tenant for causing such
compliance. Landlord shall keep Tenant apprised of the progress of construction
of Tenant's Work and shall provide Tenant with at least thirty (30) days'
advance written notice of the estimated Commencement Date.
(h) If Tenant requests a change to the Tenant's Work, Landlord shall
obtain from Baugh information regarding the cost of such change and the delay in
substantial completion, if any, caused by such change order and shall notify
Tenant in writing, before executing the change, of the cost thereof or the
savings to the Landlord, if any, and the delay in substantial completion, if
any, in Tenant's Work caused by the change. Alternatively, Tenant may
communicate directly with Baugh in order to obtain the above-described
information. If Tenant and Landlord are unable to agree with respect to the
delay caused by a change order within two (2) business days of Tenant's receipt
of such information, Tenant and Landlord shall promptly select a mutually
agreeable architect who shall determine the delay caused by such change order no
later than five (5) business days after such architect's selection. Tenant shall
then either tell Landlord to proceed with the change order or withdraw it within
one (1) business day thereafter. If Tenant does not take any action with respect
thereto in that time the change order is deemed withdrawn hereby. The cost of a
change order shall be determined by mutual agreement of Landlord and Tenant
negotiating the costs and savings in good faith. Payments by Tenant to Landlord
for changes that increase the cost of the Tenant's Work shall be made pro rata
as such work progresses so long as the relevant materials are installed or are
on site Tenant or its
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<PAGE> 32
representative(s) has inspected and approved the work, appropriate lien waivers
from the proper parties furnishing labor, materials, and/or services are
provided, and Landlord has submitted an itemized bill. Such payment shall be
made within 30 days of receipt of all of the foregoing by Tenant. If the
parties agree on the length of the delay necessitated by the change or such
delay is determined by an architect as set forth above, the date for
substantial completion of Tenant's Work shall be postponed by the length of
such delay. If the parties cannot agree, the period of postponement shall be
determined by the actual length of delay. However, commencement of payment of
rent under the Lease shall not be postponed as a result of any delay caused by
a change order.
(i) During construction of the Tenant's Work, Tenant or its
representative(s) may enter upon the Property for purposes of inspecting the
Tenant's Work, taking measurements, making plans and installing cabling and a
security system without being deemed thereby to have taken possession. Tenant's
use of the Property for the purposes herein stated shall be subject to all of
the terms, covenants, and conditions of this Lease, except as to commencement of
the Term and payment of rent. In exercising its rights under this Section 28(i),
Tenant shall not interfere materially with Landlord's construction work on the
Property. Tenant has the right to reject any portion(s) of the Tenant's Work
which do not meet the requirements of this Lease. If Tenant does reject any
portion(s) of the Tenant's Work as nonconforming to the requirements of this
Lease, Landlord shall take all necessary corrective measures, including but not
limited to replacement of all of such Tenant's Work, at not expense, or cost to
Tenant.
(j) The phrases "substantial completion" or "substantially complete(d)"
as used in this Lease shall be deemed to mean the availability of the Property
for uninterrupted use and occupancy by Tenant with a minimum of interference by
the Landlord which will be indicated by the fact that the following shall have
occurred: (i) all Tenant's Work shall have been completed, except for punchlist
items, and shall have been inspected and approved by the appropriate
authorities, (ii) a temporary or final certificate of occupancy (or the
equivalent thereof) has been issued or the City of Bothell has authorized
Tenant to assume beneficial occupancy of the Property, (iii) mechanical,
plumbing, electrical, conveying and sprinkler systems (installed and tested as
per specifications) shall have been completed such that the appropriate
services to be rendered by such systems can be and are being supplied and such
systems are fully operational, (iv) the entrance and lobby of the building to
be constructed on the Property shall have been completed and the means of
ingress and egress are not interfered with by any scaffolding, building
materials, or other articles, and (v) the parking areas and access roads have
been completed.
(k) Landlord shall complete all punchlist items as expeditiously as
possible but in any event within thirty (30) days after substantial completion
of Tenant's Work. The punchlist shall be developed by Landlord and Tenant after
an inspection of the Property by Landlord and Tenant or their representative(s).
(l) Except as otherwise provided herein, Landlord shall receive no fee
for supervision, profit, overhead or general conditions in connection with the
Tenant Work.
29. Clean-Up Expenses. Prior to the commencement of the Move-In Period,
Landlord shall thoroughly clean the Property. Landlord shall be responsible for
all subsequent cleanup required from construction performed by Landlord or
Landlord's contractors, agents and employees. The costs of the cleaning
provided by Landlord pursuant to this Section 29 shall not be included in
Operating Costs.
30. No Miscellaneous Charges. Tenant shall not be charged for parking or
for the use of electricity, water, HVAC, or security elevators during the
performance of the Tenant Work or during the Move-In Period. The HVAC systems
for the Property shall be run continuously twenty-four (24) hours per day,
seven (7) days per week during the Move-In Period to flush out and purge new
finish odors.
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<PAGE> 33
31. TENANT DELAY. The term "Tenant Delay" as used in this Addendum shall
mean any delay that Landlord may encounter in the performance of Landlord's
obligations under the Lease or this Addendum because of any act or omission of
any nature by Tenant or its agents or contractors, including any (a) delay
attributable to changes requested by Tenant pursuant to Section 28(h) hereof;
(b) delay attributable to the postponement of any Tenant's Work at the request
of Tenant; (c) delay by Tenant in the submission of information or the giving of
authorizations or approvals within the time limits set forth in this Addendum;
and (d) delay attributable to the failure of Tenant to pay, when due, any
amounts required to be paid by Tenant pursuant to the Lease or this Addendum.
Tenant shall pay all actual out-of-pocket costs and expenses incurred by
Landlord which result from any Tenant Delay aggregating more than five (5) days,
including, without limitation, any actual costs and expenses attributable to
increases in the cost of labor or materials.
No Tenant Delay shall be deemed to have occurred unless and until Landlord
has given written notice to Tenant specifying the action or inaction which
Landlord contends constitutes a Tenant Delay. If such action or inaction is
not cured within three (3) business days after the Tenant's receipt of such
notice, then a Tenant Delay, as set forth in such notice, shall be deemed to
have occurred commencing as of the date Tenant received such notice and
continuing for the number of days the substantial completion of the Property
was in fact delayed as a direct result of such action or inaction. The June
25, 1998 date set forth in Section 3 of this Addendum shall be extended by the
aggregate number of days taken by Tenant to cure any action or inaction as set
forth in the preceding sentence.
32. SIGNAGE. Tenant, at Tenant's sole cost and expense, shall be
entitled to install signage including Tenant's names and logo, on and in the
improvements to be constructed on the Property, including on the roof line,
main entrances, the walls of elevator lobbies and on entrance doors. Tenant may
elect to install more than one sign on the improvements or Property and on more
than one side of the building to be constructed on the Property. All such
signage shall be subject to City of Bothell approval.
33. LANDLORD REPRESENTATIONS AND WARRANTIES. To induce Tenant to execute
the Lease and this Addendum, and in consideration of the other representations
and warranties of Landlord contained in the Lease and this Addendum, Landlord
warrants and represents that as of the date of execution of the Lease and as of
the Commencement Date:
(a) Landlord is the owner in fee simple of the Property;
(b) Landlord has good and marketable title to the Property, there are no
liens, easements, restrictions or encumbrances upon the Property that will
prohibit, restrict or adversely affect Tenant's use and occupancy of the
Property or the intended use of the rights granted to Tenant in this Lease;
(c) There are no restrictions or impediments imposed by laws (including
applicable zoning and building ordinances) that would prevent Tenant from using
the Property for the uses and in the manner contemplated by this Lease, or from
using the parking facilities and access roads;
(d) This Lease, the Property, and the improvements constructed thereon
prior to the Commencement Date shall not violate the provisions of laws or of
any instrument executed by the Landlord or any other instrument that places any
restrictions or burdens on the Property;
(e) Landlord has obtained all necessary easements for access and utilities
and these are appurtenant to the Property; and
(f) Landlord has full right and lawful authority to enter into and perform
Landlord's obligations under this Lease for the full Lease Term.
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<PAGE> 34
34. Extension Option. Tenant shall have the right to extend this Lease for
one (1) additional period of five (5) years (the "Option"), upon the same terms
and conditions of this Lease as are provided for the initial ten-year Lease
Term except that Base Rent shall be adjusted to equal ninety-five percent (95%)
of the then current fair market rental rate of the Property. To exercise the
Option, Tenant must give notice to Landlord that Tenant is exercising the
Option at least nine (9) months before the initial ten-year Lease Term expires.
If Landlord and Tenant are unable to agree upon the Base Rent for the Option
period within sixty (60) days after Tenant's exercise of the Option, Landlord
and Tenant shall mutually select an MAI appraiser who shall determine the fair
market rental rate for the Property (taking into account, among other things,
the quality and age of the tenant improvements located on the Property and the
quality, location and age of the Property and its improvements) no later than
thirty (30) days after such appraiser's selection. If Landlord and Tenant are
unable to agree upon an appraiser within twenty (20) days of expiration of the
60-day period, Landlord and Tenant shall each select an MAI appraiser, which
appraisers shall mutually select a third MAI appraiser and such third appraiser
shall perform the appraisal.
[This space intentionally left blank.]
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<PAGE> 35
IN WITNESS WHEREOF, the parties have executed this Addendum as of the date set
forth above.
Landlord:
M.V. 1997, AN L.L.C., a Washington limited liability
company
By /s/ [illegible]
----------------------------------
Its member
--------------------------------
Tenant:
HUMONGOUS ENTERTAINMENT, INC., a
Washington corporation
By /s/ Shelley M. Day
----------------------------------
Its President/CEO
--------------------------------
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<PAGE> 36
STATE OF WASHINGTON )
)ss.
COUNTY OF KING )
On this 24th day of November, 1997, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Shelley Day, to me known to be the person who signed as
President & CEO of HUMONGOUS ENTERTAINMENT, INC., the corporation that executed
the within and foregoing instrument, and acknowledged 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 she was duly elected, qualified and
acting as said officer of the corporation, that she was authorized to execute
said instrument and that the seal affixed, if any, is the corporate seal of said
corporation.
IN WITNESS WHEREOF if have hereunto set my hand and official seal the day
and year first above written.
/s/ Teddi R. Hosman
_______________________________________
(Signature of Notary)
Teddi L. Hosman
_______________________________________
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at Bothell, WA
My appointment expires: 10/8/98
STATE OF WASHINGTON )
)ss.
COUNTY OF KING )
On this 24th day of November, 1997, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Jack Martin, to me known to be the person who signed as
Member of M.V. 1997, An L.L.C., the limited liability company that executed the
within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said limited liability company for the uses
and purposes therein mentioned, and on oath stated that __________ was
authorized to execute said instrument on behalf of the limited liability
company.
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<PAGE> 37
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
[NOTARY SEAL] /s/ Susan C. Leitzke
_______________________________________
(Signature of Notary)
Susan C. Leitzke
_______________________________________
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at BELLVUE.
My appointment expires: 08-02-98.
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<PAGE> 38
1ST AMENDMENT TO LEASE
------------------------------------------------------------------------------
DATED NOVEMBER 24, 1997 BETWEEN MV 1997, L.L.C. (LANDLORD) AND HUMONGOUS
ENTERTAINMENT (TENANT).
THE BASE RENT SCHEDULE AS OUTLINED IN "ADDENDUM TO INDUSTRIAL REAL ESTATE LEASE"
SECTION 2 SHALL HEREBY BE AMENDED TO BE AS FOLLOWS:
MONTH OF LEASE TERM BASE RENT PER MONTH
------------------- -------------------
1 through 6 Sixty-Nine Thousand Two Hundred Fifty-Nine
and No/100 Dollars ($69,259.00)
7 through 12 Seventy-Two Thousand-Six Hundred Ninety-
Nine and No/100 Dollars ($72,699.00)
13 through 60 Seventy-Six Thousand One Hundred Thirty-
Four and No/100 Dollars ($76,134.00)
61 through 120 Eight-Five Thousand One Hundred Thirty-
Four and No/100 Dollars ($85,134.00)
AGREED AND ACCEPTED
LANDLORD: TENANT:
MV 1997, L.L.C. HUMONGOUS ENTERTAINMENT
By: illegible By: /s/ Shelley Day
---------------------- --------------------------
Its: MEMBER Its: PRESIDENT
--------------------- -------------------------
Date: 9 JAN. 1998 Date: 10/15/97
-------------------- ------------------------