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Sample Business ContractsHome: Sample Business Contracts:
NET OFFICE LEASE
TABLE OF CONTENTS
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1. SALIENT LEASE TERMS.............................................................1
2. DEFINITIONS.....................................................................2
3. PREMISES........................................................................6
4. TERM............................................................................7
5. PRE-TERM POSSESSION.............................................................7
6. DELAY IN DELIVERY OF POSSESSION.................................................7
7. MINIMUM RENT....................................................................7
8. ADDITIONAL RENT.................................................................8
9. ACCORD AND SATISFACTION.........................................................9
10. SECURITY DEPOSIT................................................................9
11. USE............................................................................10
12. COMPLIANCE WITH LAWS AND REGULATIONS...........................................10
13. SERVICE AND EQUIPMENT..........................................................16
14. WASTE..........................................................................18
15. ALTERATIONS....................................................................18
16. PROPERTY INSURANCE.............................................................20
17. INDEMNIFICATION, WAIVER OF CLAIMS AND SUBROGATION..............................20
18. LIABILITY INSURANCE............................................................22
19. INSURANCE POLICY REQUIREMENTS..................................................22
20. LESSEE INSURANCE DEFAULT.......................................................23
21. FORFEITURE OF PROPERTY AND LESSOR'S LIEN.......................................23
22. MAINTENANCE AND REPAIRS........................................................23
23. DESTRUCTION....................................................................24
24. CONDEMNATION...................................................................25
25. ASSIGNMENT AND SUBLETTING......................................................26
26. ABANDONMENT....................................................................29
27. ENTRY BY LESSOR................................................................30
28. SIGNS..........................................................................30
29. DEFAULT........................................................................30
30. REMEDIES UPON DEFAULT..........................................................31
31. BANKRUPTCY.....................................................................33
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32. SURRENDER OF LEASE............................................................34
33. LESSOR'S EXCULPATION..........................................................34
34. ATTORNEYS' FEES...............................................................34
35. NOTICES.......................................................................35
36. SUBORDINATION.................................................................35
37. ESTOPPEL CERTIFICATES.........................................................36
38. WAIVER........................................................................36
39. HOLDING OVER..................................................................36
40. SUCCESSORS AND ASSIGNS........................................................36
41. TIME..........................................................................36
42. EFFECT OF LESSOR'S CONVEYANCE.................................................37
43. COMMON AREAS..................................................................37
44. TRANSFER OF SECURITY..........................................................37
45. LATE CHARGES..................................................................37
46. CORPORATE AUTHORITY...........................................................37
47. MORTGAGEE PROTECTION..........................................................37
48. WAIVER OF STATUTES............................................................38
49. MISCELLANEOUS PROVISIONS......................................................40
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NET OFFICE LEASE
THIS LEASE is dated for reference purposes only this as of the 27th day of
July, 1999.
1. SALIENT LEASE TERMS
1.1 RENT PAYMENT: BEDFORD PROPERTY INVESTORS, INC.
Lockbox #73048 - Adobe 2
P.O. Box 60000
San Francisco, CA 94169-3048
1.2 PARTIES AND NOTICE ADDRESS: Lessor:
BEDFORD PROPERTY INVESTORS, INC.
270 Lafayette Circle
Lafayette, CA 94549
Lessee:
GETTY IMAGES, INC.
2013 4th Avenue
Seattle, WA 98121
(If more than one party, then the
obligations hereunder shall be joint
and several.)
(Section 35.1)
1.3 PREMISES: (A) Name and Location of Complex:
Buildings 1, 2 and 3, East Campus,
Quadrant Lake Union Center
(B) Leased Premises: Northern
portion of 3rd floor, Plaza
Building (Building 2)
(C) Rentable square feet 7,061 RSF
(Section 3.2)
1.4 TERM: (A) Estimated Delivery Date:
October 1, 1999
(B) Term: approximately 60 months
(Sections 4.1, 4.3)
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1.5 RENT: (A) Minimum Rent:
Commencement Date: - $11,062.00/mo.
for the first 36 months of the
initial Term; $12,063.00/mo. for
the last 24 months of the initial
Term
(B) Advance Rent:
n/a
(C) Parking and parking fees
17 Covered Parking Stalls available
on a 24 hour/day, 365 days/year
basis
$1360.00/mo. for the first 36 months
of the initial Term;
$1,482.40/mo. for the last 24 months
of the initial Term
(Section 7.2)
1.6 INITIAL SECURITY DEPOSIT: $-0-(Section 10.1)
1.7 USE: Premises used solely for general
business office and data center and
reasonably related or ancillary
uses
(Section 11.1)
1.8 INITIAL PRO RATA PERCENT: 5.19%
(Section 2.1(l))
(Section 16.3)
Initial Estimated Additional
Rent for Operating Costs: $6.30
/RSF/ year (for 1999)
1.9 DECLARATION OF RESTRICTIONS: Amended and Restated Declaration of
Covenants, Conditions and
Restrictions, recorded in King
County under No. 9802231707.
(Section 3.5)
1.10 CONTENTS: This Lease consists of:
Pages 1 through 56
Sections 1 through 49.21
Addenda: N/A
Exhibits:
A - Legal Description of Complex
B - Plan of the Complex
C - Floor Plan of the Leased
Premises
D - Construction Obligations
E - Acknowledgment of Commencement
F - Rules & Regulations
G - Excluded Costs
H - Adobe Spec Space Expansion
Option Provisions
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2. DEFINITIONS
2.1 The terms defined in this Article 2 shall, for all purposes of this
Lease and all agreements supplemental hereto, have the meanings herein specified
unless expressly stated otherwise.
(a) "BUILDING" shall mean the structure which contains the Leased Premises,
as further defined in Exhibit D hereto.
(b) "BUILDING STANDARD WORK" shall mean the typical interior improvements
in the Building Shell (as defined in Exhibit D hereto) constructed or to be
constructed by Lessor, which are of the nature and quality required by
specifications developed for the Complex by Lessor's architect. The Lessee
Improvements (as defined in Exhibit D hereto) to be constructed pursuant to
Exhibit D, unless otherwise specified pursuant to the terms and conditions of
Exhibit D, shall be Building Standard Work.
(c) "COMMENCEMENT DATE" shall mean the earlier of the following dates:
(i) October 1, 1999; or
(ii) The date upon which the Lessee Improvements are Substantially
Complete, as defined in Exhibit D hereto.
(d) "COMMON AREAS" shall mean all areas and facilities outside the Leased
Premises within the exterior boundaries of the Complex of which the Leased
Premises form a part, that are provided and designated by Lessor from time to
time for the general use and convenience of Lessee and of other tenants of
Lessor having the common use of such areas, and their respective authorized
representatives and invitees. Common Areas include, without limitation,
corridors, stairways, elevator shafts, janitor rooms, driveways, parking areas,
and landscaped areas all as generally described on Exhibit B attached hereto.
Exhibit B is tentative and Lessor reserves the right to make alterations thereto
from time to time.
(e) "COMPLEX" is Buildings 1, 2 and 3, East Campus, together with the
parcels in common ownership therewith, and contiguous thereto, which property is
described with particularity in Exhibit A attached hereto and made a part hereof
by reference.
(f) "LEASE YEAR" means any calendar year, or portion thereof, following the
commencement hereof, the whole or any part of which period is included within
the Term.
(g) "LEASED PREMISES" shall mean the portion of space leased to Lessee
hereunder.
(h) "LINES" shall mean communications, computer, audio and video, security
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and electrical (other than electrical wiring terminating at or connected to
Building standard electrical outlets), cables, wires, lines, duct work, sensors,
switching equipment, control boxes and related improvements at the Complex,
Building or the Leased Premises.
(i) "MAJOR VERTICAL PENETRATIONS" shall mean stairs, elevator shafts,
flues, pipe shafts, vertical ducts, and the like, and their enclosing walls,
which serve more than one floor of the Building, but shall not include stairs,
dumbwaiters, lifts, and the like, exclusively serving a tenant occupying offices
on more than one floor.
(j) "OCCUPIED FLOOR AREA" means that portion of the Rentable Area of the
Complex which is leased and occupied.
(k) "OPERATING COSTS" means the total amounts paid or payable, whether by
Lessor or others on behalf of Lessor, in connection with the ownership,
maintenance, repair, replacement and operations of the Complex (including,
without limitation, all areas and facilities within the exterior boundaries of
the Complex) as determined by standard accounting procedures. Operating Costs
shall include, but not be limited to, the aggregate of the amount paid for all
fuel used in heating and air conditioning of the Building; the amount paid or
payable for all electricity furnished by Lessor to the Complex (other than
electricity furnished to and paid for by other lessees by reason of their
extraordinary consumption of electricity); the cost of periodic relamping and
reballasting of lighting fixtures; the amount paid or payable for all hot and
cold water (other than that chargeable to individual tenants by reason of their
extraordinary consumption of water); the amount paid or payable for all labor
and/or wages and other payments, including the cost to Lessor of workers'
compensation and disability insurance, payroll taxes, welfare and fringe
benefits made to janitors, caretakers, and other employees, contractors and
subcontractors of Lessor (including wages of the Building manager) involved in
the operation, maintenance and repair of the Complex; painting of exterior walls
of the buildings in the Complex; managerial and administrative expenses; the
total charges of any independent contractors employed in the repair, care,
operation, maintenance, and cleaning of the Complex; the amount paid or payable
for all supplies occasioned by everyday wear and tear; the costs of climate
control, window and exterior wall cleaning, telephone and utility costs; the
cost of accounting services necessary to compute the rents and charges payable
by tenants of the Complex and to keep the books and records for the Complex;
fees for legal, accounting, inspection and consulting services; the cost of
operating, repairing and maintaining the Building elevators and the utility
systems, including Lines, of the Complex; the cost of porters, guards and other
protection services; the cost of establishing and maintaining the Building's
directory board; payments for general maintenance and repairs to the plant and
equipment supplying climate control; the cost of supplying all services pursuant
to Article 13 hereof to the extent such services are not paid by individual
tenants; amortization of the costs, including repair and replacement, of all
maintenance and cleaning equipment and master utility meters and of the costs
incurred for repairing or replacing all other fixtures, equipment and facilities
serving or comprising the Complex which by their nature require periodic or
substantial repair or replacement, and which are not charged fully in the year
in which they are incurred, at rates on the various items determined from time
to time by Lessor in accordance with sound accounting principles; the net cost
and expenses for liability and property insurance for which Lessor is
responsible hereunder
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or which Lessor or its lenders deems necessary in connection with the operation
of the Complex (including, without limitation, self-insurance and the payment of
deductible amounts under insurance policies); community association dues or
assessments and property owners' association dues and assessments which may be
imposed upon Lessor by virtue of any recorded instrument affecting title to the
Complex including, the Declaration of Covenants, Conditions, Restrictions and/or
Easements referred to in Section 1.9, as amended from time to time; and costs of
complying with all governmental regulations, rules, laws, ordinances and codes.
In addition, Operating Costs shall include any Real Estate Taxes as defined in
Paragraph 2.1(o) hereof, and an administrative/management fee payable to Lessor
in the amount of Four Percent (4.00%) of the gross revenues received by Lessor
from the Complex. Operating Costs shall also include, without limitation, the
repair and replacement, resurfacing and repaving of any paved areas, curbs,
gutters or other surfaces or areas within the Complex, the repair and
replacement of any equipment or facilities located within or serving the
Complex, and the cost of any capital repairs, replacements or improvements made
by Lessor to the Complex ("CAPITAL COSTS"). However, certain Capital Costs (the
"RESTRICTED CAPITAL COSTS") shall be includable in Operating Costs each year
only to the extent of that fraction allocable to the year in question calculated
by amortizing such Restricted Capital Costs over the reasonably useful life of
the improvement resulting therefrom, as determined by Lessor, with interest on
the unamortized balance at the higher of (i) ten percent (10%) per annum; or
(ii) the interest rate as may have been paid by Lessor for the funds borrowed
for the purpose of performing the work for which the Restricted Capital Costs
have been expended, but in no event to exceed the highest rate permissible by
law. The Restricted Capital Costs subject to such amortization procedure are the
following: (x) those costs for capital improvements to the Complex of a type
which do not normally recur more frequently than every five (5) years in the
normal course of operation and maintenance of facilities such as the Complex
(specifically excluding painting of all or a portion of the Complex); (y) costs
incurred for the purpose of reducing other operating expenses or utility costs,
and (z) expenditures by Lessor that are required by governmental law, ordinance,
regulation or mandate, including, without limitation, any Environmental Laws (as
such term is defined in Article 12), which were not applicable to the Complex at
the time of the original construction. Operating Costs shall not include legal
or accounting expenses incurred expressly for negotiating a lease with a
particular tenant, or as a result of a default of a specific tenant, which
negotiation or default does not affect the operation of the Complex. Operating
Costs also expressly exclude those cost items identified in Exhibit G attached
hereto.
(l) "PRO RATA PERCENT" shall be that fraction (converted to a percentage)
the numerator of which is the Rentable Area of the Leased Premises and the
denominator of which is the Rentable Area of the Complex. Lessee's Pro Rata
Percent as of the commencement of the Term hereof is specified in Section 1.8.
Said Pro Rata Percent shall be recalculated as may be required effective as at
the commencement of any period to which the calculation is applicable in this
Lease. Notwithstanding the preceding provisions of this Section 2.1(l), Lessee's
Pro Rata Percent as to certain expenses may be calculated differently to yield a
higher percentage share for Lessee as to certain expenses in the event Lessor
permits other tenants in the Complex to directly incur such expenses rather than
have Lessor incur the expense in common for the Complex (such as, by way of
illustration, wherein a tenant performs its own janitorial services). In such
case Lessee's Pro Rata Percent of the applicable expense shall be calculated as
having as its
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denominator the Rentable Area of the Complex less the Rentable Area of tenants
who have incurred such expense directly. Furthermore, in the event Lessee
consumes extraordinary amounts of any provided utility or other service as
determined in Lessor's good faith judgment, Lessee's Pro Rata Percent for such
utility or service may, at Lessor's election, be based on usage as opposed to
Rentable Area of the Complex, that is, Lessee's Pro Rata Percent of such a
utility or service would be calculated as having as its denominator the total
usage of such utility or service in the Complex (or Building as the case may
be), and having as its numerator Lessee's usage of such utility or service, as
determined by Lessor in its sole good faith judgment. In any case in which
Lessee, with Lessor's consent, incurs such expenses directly, Lessee's Pro Rata
Percent will be calculated specially so that expenses of the same character
which are incurred by Lessor for the benefit of other tenants in the Complex
shall not be prorated to Lessee. If repairs are required for systems exclusively
serving the Leased Premises (whether within or outside of said Leased Premises),
Lessee shall pay one hundred percent (100%) of such repair costs. Nothing herein
shall imply that Lessor will permit Lessee or any other tenant of the Complex to
incur any Operating Costs directly. Any such permission shall be in the sole
discretion of the Lessor, which Lessor may grant or withhold in its arbitrary
judgment. If, in Lessor's reasonable determination, certain Operating Costs vary
in direct relationship to occupancy of the Building, Lessee's Pro-Rata Percent
may be calculated using, as the denominator, the Rentable Area of the complex
occupied by tenants.
(m) [ Intentionally Omitted.]
(n) "REAL ESTATE TAXES" or "TAXES" shall mean and include all general and
special taxes, assessments, fees of every kind and nature, duties and levies,
charged and levied upon or assessed by any governmental authority against the
Complex including the land, the Building, any other improvements situated on the
land other than the Building, the various estates in the land and the Building,
any Lessee Improvements, fixtures, installations, additions and equipment,
whether owned by Lessor or Lessee; except that it shall exclude any taxes of the
kind covered by Section 8.1 hereof to the extent Lessor is reimbursed therefor
by any tenant in the Building. Real Estate Taxes shall also include the
reasonable cost to Lessor of contesting the amount, validity, or the
applicability of any Taxes mentioned in this Section. Further included in the
definition of Taxes herein shall be general and special assessments, license
fees, commercial rental tax, levy or tax (other than inheritance or estate
taxes) imposed by any authority having the direct or indirect power to tax, as
against any legal or equitable interest of Lessor in the Leased Premises or in
the Complex or on the act of entering into this Lease or, as against Lessor's
right to rent or other income therefrom, or as against Lessor's business of
leasing the Leased Premises or the Complex; any tax, fee, or charge with respect
to the possession, leasing, transfer of interest, operation, management,
maintenance, alteration, repair, use, or occupancy by Lessee, of the Leased
Premises or any portion thereof or the Complex; or any tax imposed in
substitution, partially or totally, for any tax previously included within the
definition of Taxes herein, or any additional tax related to the Complex, the
Building or the land they are situated on, the nature of which may or may not
have been previously included within the definition of Taxes. Further, if at any
time during the Term of this Lease the method of taxation or assessment of real
estate or the income therefrom prevailing at the time of execution hereof shall
be, or has been, altered so as to cause the whole or any part of the Taxes now
or hereafter levied, assessed or imposed on
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real estate to be levied, assessed or imposed upon Lessor, wholly or partially,
as a capital levy, business tax, fee, permit or other charge, or on or measured
by the Rents received therefrom, then such new or altered taxes, regardless of
their nature, which are attributable to the land, the Building, the Complex or
to other improvements on the land shall be deemed to be included within the term
Real Estate Taxes for purposes of this Section, whether in substitution for, or
in addition to any other Real Estate Taxes, save and except that such shall not
be deemed to include any enhancement of said tax attributable to other income of
Lessor. With respect to any general or special assessments which may be levied
upon or against the Leased Premises, the Complex, or the underlying realty, or
which may be evidenced by improvement or other bonds, and may be paid in annual
or semi-annual installments, only the amount of such installment, prorated for
any partial year, and statutory interest shall be included within the
computation of Taxes for which Lessee is responsible hereunder.
(o) "RENT," "RENT" or "RENTAL" means Minimum Rent and all other sums
required to be paid by Lessee pursuant to the terms of this Lease.
(p) "RENTABLE AREA." The number of rentable square feet listed in paragraph
1.3(c).
(q) "STRUCTURAL" as herein used shall mean any portion of the Leased
Premises or Complex which provides bearing support to any other integral member
of the Complex such as, by limitation, the roof structure (trusses, joists,
beams), posts, load bearing walls, foundations, girders, floor joists, footings,
and other load bearing members constructed by Lessor.
(r) "LESSEE IMPROVEMENTS" shall mean the aggregate of the Building Standard
Work and the Building nonstandard work, as further defined in the work letter
agreement which is attached hereto as Exhibit D.
(s) "TERM" shall mean the term of the Lease as specified in
Article 4 hereof, including any partial month at the commencement of the Term.
(t) [Intentionally omitted.]
(u) [Intentionally omitted.]
3. PREMISES
3.1 DEMISING CLAUSE. Lessor hereby leases to Lessee, and Lessee hires from
Lessor a portion of the Complex as hereinafter defined.
3.2 DESCRIPTION. The Complex, as defined in Section 2.1(e), is described
generally in Section 1.3(A) hereof. The premises leased herein are described in
Section 1.3(B) and are delineated on Exhibit C which is attached hereto and made
a part hereof by reference, consisting of the approximate amount of square
footage as specified in Section 1.3(C) hereof (the "LEASED PREMISES.") The term
"BUILDING" shall refer to the Building in which the Leased Premises are
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located. Lessee acknowledges that Lessor may change the shape, size, location,
number and extent of the improvements to any portion of the Complex without
consent of Lessee and without affecting Lessee's obligations hereunder provided
that such change in the Complex does not unreasonably interfere with the access
to or use of the Premises by the Lessee, its employees, agents, or invitees.
Lessor reserves the area beneath and above the Building as well as the exterior
thereof together with the right to install, maintain, use, repair and replace
pipes, ducts, conduits, wires, and structural elements leading through the
Leased Premises serving other parts of the Complex, so long as such items are
concealed by walls, flooring or ceilings. Such reservation in no way affects the
maintenance obligations imposed herein, nor shall such reservation alter the
parties' responsibilities and obligations set forth in this Lease regarding
Hazardous Materials (as defined in Section 12.3(a) below).
3.3 COVENANTS, CONDITIONS AND RESTRICTIONS. The parties agree that this
Lease is subject to the effect of (a) any covenants, conditions, restrictions,
easements, mortgages or deeds of trust, ground leases, rights of way of record,
and any other matters or documents of record; (b) any zoning laws of the city,
county and state where the Complex is situated; and (c) general and special
taxes not delinquent. Lessee agrees that as to its leasehold estate, Lessee and
all persons in possession or holding under Lessee will conform to and will not
violate the terms of any covenants, conditions or restrictions of record which
may now or hereafter encumber the property (hereinafter the "RESTRICTIONS").
This Lease is subordinate to the restrictions and any amendments or
modifications thereto.
3.4 DECLARATION OF RESTRICTIONS. The Leased Premises are subject to a
Declaration of Restrictions as referenced in Section 1.9 hereof.
4. TERM
4.1 COMMENCEMENT DATE. The Term of this Lease shall commence on the date
specified in Section 1.4(A) hereof and shall be for the term specified in
Section 1.4(B) hereof, plus any partial month at the commencement of the Term.
4.2 ACKNOWLEDGMENT OF COMMENCEMENT. After delivery of the Leased Premises
to Lessee, Lessee shall execute a written acknowledgment of the date of
commencement in the form attached hereto as Exhibit E, and by this reference it
shall be incorporated herein.
4.3 RENEWAL OPTIONS.
(a) Lessee shall have in the following order four (4) successive renewal
options to extend the Term of this Lease (each a "Renewal Option" and plurally
the "Renewal Options"):
First Renewal Option to extend the term of the Lease by five (5)
years;
Second Renewal Option to extend the term of the Lease to July 15, 2010
(approximately, a one-year extension);
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Third Renewal Option to extend the term of the Lease by five (5)
years; and
Fourth Renewal Options to extend the term of the Lease by five (5)
years.
The second through fourth Renewal Options may only be exercised if the prior
Renewal Option was timely exercised. Each of the Renewal Options may be
exercised by Lessee only by written notice of exercise to Lessor given no later
than nine (9) months prior to the expiration of the then-effective Term.
(b) Upon such exercise, the parties shall be obligated under all the terms
and conditions of this Lease through the extended Term, except that Monthly Base
Rent during the extension of the Term shall be equal to the higher of (i) the
Monthly Base Rent in the final month of the then-effective Term or (ii) the Fair
Market Monthly Rent for the Premises as of 90 days after Lessee's notice of
exercise and the Monthly Parking Fees shall be equal to the higher of (i) the
Monthly Parking Fees in the final month of the then-effective Term or (ii) the
Fair Market Monthly Parking Fees as of 90 days after Lessee's notice of
exercise. Upon determination of the Fair Market Minimum Rent and Fair Market
Parking Fees as described in Subsection 4.3(c) below, the parties shall execute
an amendment to the Lease memorializing the Minimum Rent and Parking Fees for
the applicable Renewal Option term.
(c) As used herein, the "Fair Market Minimum Rent" shall mean the
prevailing fair market monthly rent for comparable space located within five (5)
miles of the Business Park. As used herein, the "Fair Market Parking Fees" shall
mean the prevailing fair market parking fees for comparable parking located
within five (5) miles of the Business Park. The Fair Market Minimum Rent and the
Fair Market Parking Fees shall be determined in accordance with the following
procedure:
(i) Within 30 days of Lessee's notice of exercise, Lessee shall deliver to
Lessor its written good faith estimate of the Fair Market Minimum Rent and Fair
Market Parking Fees ("Lessee's Estimate") and Lessor shall deliver to Lessee its
written good faith estimate of the Fair Market Minimum Rent and Fair Market
Parking Fees ("Lessor's Estimate").
(ii) If Lessor's Estimate and Lessee's Estimate differ, Lessor and Lessee
shall negotiate in good faith for up to ninety (90) days in an effort to agree
upon the Fair Market Minimum Rent and Fair Market Parking Fees.
(iii) If Lessor and Lessee are unable to agree upon the Fair Market Minimum
Rent and/or the Fair Market Parking Fees within 90 days after the delivery of
the later of Lessor's Estimate or Lessee's Estimate, then within ten (10) days
after expiration of such ninety (90) day period, the parties shall either (a)
select one mutually acceptable appraiser, or (b) each party shall designate an
appraiser, and within ten (10) days thereafter the two appraisers shall
designate a third appraiser mutually acceptable to them. All appraisers under
this appraisal provision shall be independent certified professional appraisers
with at least five years' experience appraising office properties within a
five-mile radius of the Business Park. If there
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are three appraisers, each party shall pay for the cost of its designated
appraiser and 50% of the cost of the third appraiser. If there is only one
appraiser, each party shall pay 50% of the cost of such appraiser.
(iv) Within twenty (20) days of the designation of the one or three
appraisers, each party shall present to the appraiser(s) in writing its
justifications and supporting documentation for the estimates it previously
delivered to the other party pursuant to subparagraph (iii) above.
(v) Within twenty days after delivery of written materials, the parties and
the appraiser(s) shall have a meeting, at which Lessor and Lessee shall each be
entitled to make up to a one-half hour presentation and at which the
appraiser(s) shall have an opportunity to ask questions of Lessor and Lessee.
(vi) Within five (5) days after such meeting, each appraiser shall make and
deliver to Lessor and Lessee a written finding as to which of the Lessor's
Estimate and Lessee's Estimate of Fair Market Minimum Rent best approximates the
Fair Market Minimum Rent, and as to which of the Lessor's Estimate and Lessee's
Estimate of Fair Market Parking Fees best approximates the Fair Market Parking
Fees. The written finding shall include a brief explanation of what factors
ultimately determined the appraiser's finding.
(vii) The Fair Market Minimum Rent and the Fair Market Parking Fees set
forth in Lessor's Estimate or Lessee's Estimate found to be the best
approximation by the one sole appraiser or by at least two out of the three
appraisers shall conclusively constitute Fair Market Minimum Rent and the Fair
Market Parking Fees for the applicable extension term for purposes of this
Lease.
(d) Lessee may not exercise any of its Renewal Options at any time in which
it is in default under this Lease. If Lessee becomes in default under this Lease
after exercise of a Renewal Option, but before the commencement of the extended
Term, Lessor may, in addition to its other remedies under this Lease, elect to
terminate such extension by notice in writing to Lessee, whereupon the Term
shall expire without any such extension.
4.4 LESSOR'S EARLY TERMINATION RIGHT. Lessor may terminate the Term in the
event Adobe System, Inc. ("Adobe") exercises any of its options under Sections
28.3, 28.4 and 28.5 of its lease with Lessor to expand its premises into the
Leased Premises, provided that (a) Lessor gives Lessee notice of Adobe's
exercise of one of its options no later than thirty (30) days after Adobe
exercises such option, and (b) the termination shall first become effective one
month prior to the outside date by which Lessor must deliver the space to Adobe
under its lease with Adobe. Copies of the above-referenced provisions from the
Adobe Lease are attached as Exhibit H hereto.
5. PRE-TERM POSSESSION
5.1 CONDITIONS OF ENTRY. Lessor shall make the Leased Premises available
for
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Lessee's construction of the Lessee Improvements on the following dates (the
"Construction Delivery Dates"):
(a) With respect to all portions of the Leased Premises not currently
occupied by Bedford Property Investors, Inc. (Bedford") or The Quadrant
Corporation ("Quadrant"), on the day of mutual execution of this Lease;
(b) With respect to that portion of the Leased Premises currently occupied
by Quadrant no later than seven (7) days after mutual execution of this Lease;
after may be prior to Substantial Completion of the Lessee Improvements in the
Leased Premises by Lessor; and
(c) With respect to that portion of the Leased Premises currently occupied
by Bedford no later than five (5) days after the earlier of (i) the date on
which the Bedford Build Out (as defined in Exhibit D hereto) is Substantially
Complete, or (ii) the date on which Lessee relocates Bedford, at Lessee's sole
cost and expense, to temporary substitute premises acceptable to Bedford.
Lessee may upon the Construction Delivery Date enter the applicable
portions of the Leased Premises for such purposes at its own risk, to construct
the Lessee Improvements and to install fixtures, supplies, inventory and other
property, all in accordance with the requirements of Exhibit D hereto.
During the course of any pre-term possession, whether such pre-term
possession arises because of an obligation of construction on the part of
Lessee, or otherwise, all terms and conditions of this Lease, except for rent
and commencement, shall apply, particularly with reference to indemnity by
Lessee of Lessor under Article 17 herein for all occurrences within or about the
Leased Premises.
6. DELAY IN DELIVERY OF POSSESSION OR COMPLETION OF LESSEE IMPROVEMENTS
6.1 DELAY.
(a) Possession. If Lessor, for any reason whatsoever, cannot deliver
possession of the Leased Premises to Lessee by the Construction Delivery Dates
set forth in Section 5.1, this Lease shall not be void or voidable, nor shall
Lessor be liable for any loss or damage resulting therefrom, but in that event,
there shall be an extension of the Estimated Delivery Date and the Commencement
Date with respect to that portion of the Premises that Lessor failed to deliver
by the applicable Construction Delivery Date, which extension shall correspond
on a day for day basis with the number of days that Lessor was delayed in
delivering possession of the applicable portion of the Leased Premises to
Lessee. In the event Lessor cannot deliver possession of the Leased Premises to
Lessee within three (3) months beyond the latest Construction Delivery Date,
then Lessor or Lessee may elect to terminate this Lease. In the event the Leased
Premises are not delivered within one (1) year from the date of execution, this
Lease shall automatically terminate.
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(b) Completion of Lessee Improvements. If by reason of strike, labor
troubles, any rule order, or regulation of any governmental agency, or any cause
beyond Lessee's reasonable control (a "Force Majure Event"), Lessee cannot
substantially complete the Lessee Improvements on or before October 1, 1999,
then this Lease shall not be void or voidable and Lessor shall have no right to
terminate this Lease, but in that event the Commencement Date shall be extended
by the time period of the Force Majure Event and such reasonable additional
time, not to exceed sixty (60) days, as is required for Lessee to substantially
complete the Lessee Improvements as provided in Exhibit D hereto. In no event
shall Lessee be liable to Lessor for any loss or damage resulting from any delay
as a result of such Force Majure Event.
(c) Vacation of Quadrant Leasing Office. The parties acknowledge that
Quadrant occupies a small portion of the Leased Premises as a leasing office.
Lessor agrees to cause Quadrant to vacate the leasing office and remove all of
its trace fixtures and personal property within seven (7) days after mutual
execution of this Lease.
7. MINIMUM RENT
7.1 PAYMENT. Lessee shall pay to Lessor at the address specified in Section
1.1, or at such other place as Lessor may otherwise designate, as "MINIMUM RENT"
for the Leased Premises the amount specified in Section 1.5(A) hereof, payable
in advance on the first day of each month during the Term. If the Term commences
on other than the first day of a calendar month, the rent for the first partial
month shall be prorated accordingly.
All payments of Minimum Rent (including sums defined as rent in Section
2.1(o)) shall be in lawful money of the United States, and payable without
deduction, setoff, offset, counterclaim, recoupment, notice or demand.
7.2 ADVANCE RENT. The amount specified in Section 1.5(B) hereof is paid
herewith to Lessor upon execution of this Lease as advance rent, receipt of
which is hereby acknowledged, provided, however, that such amount shall be held
by Lessor as a "SECURITY DEPOSIT" pursuant to Section 10.1 hereof until it is
applied by Lessor to the first Minimum Rent due hereunder.
8. ADDITIONAL RENT
8.1 PERSONAL PROPERTY, GROSS RECEIPTS, LEASING TAXES. This Section 8.1 is
intended to deal with impositions or taxes directly attributed to Lessee or this
transaction, as distinct from Real Property Taxes attributable to the Complex
which are to be allocated among various tenants and others and which are
included in Operating Costs. In addition to the Minimum Rent and additional
charges to be paid by Lessee hereunder, Lessee shall reimburse Lessor upon
demand for any and all taxes required to be paid by Lessor (excluding state,
local or federal personal and corporate income taxes measured by the income of
Lessor from all sources, and estate and inheritance taxes) whether or not now
customary or within the contemplation of the parties hereto:
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(a) Upon, measured by, or reasonably attributable to the cost or value of
Lessee's equipment, furniture, fixtures and other personal property located in
the Leased Premises or by the cost or value of any Lessee Improvements made in
or to the Leased Premises by or for Lessee, other than Building Standard Work,
regardless of whether title to such improvements shall be in Lessee or Lessor;
(b) Upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Lessee of the Leased
Premises or any portion thereof to the extent such taxes are not included as
Real Estate Taxes as defined in Section 2.1(n);
(c) Upon this transaction or any document to which Lessee is a party
creating or transferring an interest or an estate in the Leased Premises; and
(d) In connection with any testing, investigation, abatement, remediation,
removal, transportation and/or disposal of any Hazardous Materials by Lessee,
its employees, agents representatives, contractors, invitees, subtenants and/or
assigns (or by Lessor, pursuant to any provision of this Lease granting to
Lessor the right to do any of the foregoing on behalf of Lessee and to bill
Lessee therefor).
For purposes of this Section 8.1, the term "taxes" shall include, but not
be limited to, any fees, charges, fines, penalties and costs (including, without
limitation, permit, approval or licensing fees, charges or costs).
In the event that it shall not be lawful for Lessee so to reimburse Lessor
for any Real Property Taxes or any other taxes specified in this Section 8.1,
the Minimum Rent payable to Lessor under this Lease shall be increased to net
Lessor (i.e., after payment of the Real Property Taxes or other taxes for which
Lessor may not receive reimbursement from Lessee) the amount of Minimum Rent
plus reimbursement for Real Property Taxes or other taxes which would have been
receivable by Lessor if such Real Property Taxes or other taxes had been
reimbursed to Lessor by Lessee as contemplated herein. All Real Property Taxes
or other taxes payable by Lessee under this Section shall be deemed to be, and
shall be paid as, additional Rent.
8.2 OPERATING COSTS.
(a) Lessee shall pay to Lessor, as additional rent, its Pro Rata Percent of
the Operating Costs for the Complex for any Lease Year, calculated on the basis
of the greater of (i) actual Operating Costs; or (ii) as if the Complex were at
least ninety-five percent ( 95%) occupied and operational for the whole of such
Lease Year.
(b) If any Lease Year of less than twelve (12) months is included within
the Term, the amount payable by Lessee for such period shall be prorated on a
per diem basis (utilizing a three hundred sixty [360] day year).
8.3 METHOD OF PAYMENT. Any additional Rent payable by Lessee under Sections
8.1
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and 8.2 hereof shall be paid as follows, unless otherwise provided:
(a) During the Term, Lessee shall pay to Lessor monthly, in advance with
its payment of Minimum Rent, one-twelfth (1/12) of the amount of such additional
Rent as reasonably estimated by Lessor in advance, in good faith, to be due from
Lessee.
(b) Annually, as soon as is reasonably possible after the expiration of
each Lease Year, Lessor shall prepare in good faith and deliver to Lessee a
comparative statement, which statement shall be conclusive between the parties
hereto, setting forth (1) the Operating Costs for such Lease Year, and (2) the
amount of additional Rent owed by Lessee as determined in accordance with the
provisions of this Article 8.
(c) If the aggregate amount of such estimated additional Rent payments made
by Lessee in any Lease Year should be less than the additional Rent due for such
year, then Lessee shall pay to Lessor as additional Rent upon demand the amount
of such deficiency. If the aggregate amount of such additional Rent payments
made by Lessee in any Lease Year of the Term should be greater than the
additional Rent due for such year, then should Lessee not be otherwise in
default hereunder, the amount of such excess will be applied by Lessor to the
next succeeding installments of such additional Rent due hereunder; and if there
is any such excess for the last year of the Term, the amount thereof will be
refunded by Lessor to Lessee, provided Lessee is not otherwise in default under
the terms of this Lease.
(d) Lessor shall keep for at least one (1) years after the expiration of
each calendar year, true and accurate books of account and records for Operating
Costs, which books and records shall be maintained in accordance with generally
accepted accounting principles. Lessee and Lessee's representatives, upon at
least thirty (30) days' notice and during normal business hours, but not more
than once per year, shall have the right to examine at Lessor's main accounting
office and, at Lessee's expense, make copies of Lessor's books and records
pertaining to Operating Costs.
(e) If Lessee audits or inspects Lessor's books of account and/or records,
and determines that Lessor's estimate of Operating Costs exceeds the actual
Operating Costs by five percent (5%) or more, then Lessor shall promptly pay to
Lessee the cost of such audit or inspection.
9. ACCORD AND SATISFACTION
9.1 ACCEPTANCE OF PAYMENT. No payment by Lessee or receipt by Lessor of a
lesser amount of Minimum Rent or any other sum due hereunder as additional Rent
or any other payment shall be deemed to be other than on account of the earliest
due Rent or payment, nor shall any endorsement or statement on any check or any
letter accompanying any such check or payment be deemed an accord and
satisfaction, and Lessor may accept such check or payment without prejudice to
Lessor's right to recover the balance of such Rent or payment or pursue any
other remedy available in this Lease, at law or in equity. Lessor may accept any
partial payment from Lessee without invalidation of any contractual notice
required to be given herein (to the
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extent such contractual notice is required) and without invalidation of any
notice required to be given pursuant to any applicable statute or other law of
the State of Washington.
10. SECURITY DEPOSIT
[Intentionally omitted.]
11. USE
11.1 PERMITTED USE. The Leased Premises may be used and occupied only for
the purposes specified in Section 1.7 hereof, and for no other purpose or
purposes without Lessor's prior consent, which consent will not be unreasonably
withheld, conditioned or delayed so long as the change in use does not have a
material adverse affect on occupancy densities or foot traffic within the Leased
Premises. Without limiting other bases for reasonably withholding consent,
Lessor shall be deemed to be reasonably withholding its consent if Lessor
disapproves of a change in use on the basis that the proposed changed use of the
Premises falls outside the normal scope of uses found within other Class A
office buildings in Seattle, Washington (e.g., a twenty-four hour per day
telephone soliciting service or a tattoo parlor) or would otherwise be
objectionable to most owners of Class A Office buildings in Seattle, Washington
(e.g., office space for an adult entertainment company). Notwithstanding the
foregoing sentences in this Section 11.1, Lessor agrees that Lessee may as part
of permitted uses in the Premises operate a twenty-hour customer service call
center, provided such use is only an ancillary and incidental part of its
primary permitted use of the Premises. Lessee shall promptly comply with all
laws, ordinances, orders and regulations affecting the Leased Premises, their
cleanliness, safety, occupation and use.
11.2 SAFES, HEAVY EQUIPMENT. Lessee shall not place a load upon any floor
of the Leased Premises which exceeds fifty (50) pounds per square foot live
load. Lessor reserves the right to prescribe the weight and position of all
safes and heavy installations which Lessee wishes to place in the Leased
Premises so as properly to distribute the weight thereof, or to require plans
prepared by a qualified structural engineer at Lessee's sole cost and expense
for such heavy objects. Notwithstanding the foregoing, Lessor shall have no
liability for any damage caused by the installation of such heavy equipment or
safes.
11.3 MACHINERY. Business machines and mechanical equipment belonging to
Lessee which cause noise and/or vibration that may be transmitted to the
structure of the Building or to any other leased space to such a degree as to be
objectionable to Lessor or to other tenants in the Complex shall be placed and
maintained by the party possessing the machines or equipment, at such party's
expense, in settings of cork, rubber or spring type noise and/or vibration
eliminators, and Lessee shall take such other measures as needed to eliminate
vibration and/or noise. If the noise or vibrations cannot be eliminated, Lessee
must remove such equipment within ten (10) days following written notice from
Lessor.
11.4 HAZARDOUS ACTIVITIES. Lessee shall not engage in any activities or
permit to be kept, used, or sold in or about the Leased Premises any article,
which may be prohibited by the
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standard form of fire insurance policies. Lessee shall, at its sole cost and
expense, comply with any and all requirements pertaining to the Leased Premises,
its occupation and/or use, of any insurance organization or company, necessary
for the maintenance of reasonable fire and public liability insurance covering
the Building, the Complex and appurtenances.
11.5 ACCESS/SECURITY. Lessee and its employees shall have access to the
Leased Premises 24 hours per day, 365 days per week. At Lessee's election,
Lessee may install its own security system in the Premises and the cost of such
security system (including, without limitation, all installment and other
related or one-time costs associated with such installation) shall be included
in the Lessee Improvement Costs and shall be deducted from the Lessee
Improvement Allowance. Any such security installation shall be deemed an
alterations and shall be subject to all of the requirement of Section 15. Lessee
shall also ensure that any such security system shall not deny Lessor access to
the Leased Premises.
12. COMPLIANCE WITH LAWS AND REGULATIONS
12.1 LESSEE'S OBLIGATIONS. Lessee, shall, at its sole cost and expense,
comply with all of the requirements of all municipal, state and federal
authorities now in force, or which may hereafter be in force, pertaining to the
Leased Premises, and shall faithfully observe in the use of the Leased Premises
all municipal ordinances and state and federal statutes and regulations now in
force or which may hereafter be in force, including, without limitation, the
Environmental Laws (as hereinafter defined), and the Americans with Disabilities
Act, 42 U.S.C. ss.ss. 12101-12213 (and any rules, regulations, restrictions,
guidelines, requirements or publications promulgated or published pursuant
thereto, collectively herein referred to as the "ADA"), whether or not any of
the foregoing were foreseeable or unforeseeable at the time of the execution of
this Lease. The judgment of any court of competent jurisdiction, or the
admission of Lessee in any action or proceeding against Lessee, whether Lessor
be a party thereto or not, that any such requirement, ordinance, statute or
regulation pertaining to the Leased Premises has been violated, shall be
conclusive of that fact as between Lessor and Lessee. Within five (5) days after
receipt of notice or knowledge of any violation or alleged violation of any
Environmental Law(s) and/or the ADA pertaining to the Complex, any governmental
or regulatory proceedings, investigations, sanctions and/or actions threatened
or commenced with respect to any such violation or alleged violation, and any
claim made or commenced with respect to such violation or alleged violation,
Lessee shall notify Lessor thereof and provide Lessor with copies of any written
notices or information in Lessee's possession.
12.2 CONDITION OF LEASED PREMISES. Subject to Lessor's work, if any, as
referred to in Exhibit D to this Lease, Lessee hereby accepts the Leased
Premises in the condition existing as of the date of occupancy, subject to all
applicable zoning, municipal, county and state laws, ordinances, rules,
regulations, orders, restrictions of record, and requirements in effect during
the Term or any part of the Term hereof regulating the Leased Premises, and
without representation, warranty or covenant by Lessor, express or implied, as
to the condition, habitability or safety of the Leased Premises, the suitability
or fitness thereof for Lessee's intended purposes, or any other matter.
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12.3 HAZARDOUS MATERIALS.
(a) Hazardous Materials Defined. As used herein, the term "HAZARDOUS
MATERIALS" shall mean any wastes, materials or substances (whether in the form
of liquids, solids or gases, and whether or not air-borne), which are or are
deemed to be pollutants or contaminants, or which are or are deemed to be
hazardous, toxic, ignitable, reactive, corrosive, dangerous, harmful or
injurious, or which present a risk, to public health or to the environment, or
which are or may become regulated by or under the authority of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq.; the Hazardous Materials Transportation Act, 39 U.S.C.
Section 1801, et seq.; the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; the Federal Clean
Water Act, 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42 U.S.C. Section
7401 et seq.; or under any other applicable local, Washington State or federal
laws, judgments, ordinances, orders, rules, regulations, codes or other
governmental restrictions, guidelines or requirements, any amendments or
successor(s) thereto, replacements thereof or publications promulgated pursuant
thereto (collectively "ENVIRONMENTAL LAWS"), including, without limitation, any
waste, material or substance which is:
(i) defined as a "hazardous substance" or "pollutant or contaminant"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C.ss.9601 et seq.;
(ii) listed as an "extremely hazardous substance," "hazardous chemical," or
"toxic chemical" pursuant to the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C.ss.11001 et seq.;
(iii) listed as a "hazardous substance" in the United States Department of
Transportation Table, 49 C.F.R. 172.101 and amendments thereto, or by the
Environmental Protection Agency (or any successor agency) in 40 C.F.R. Part 302
and amendments thereto;
(iv) defined, listed or designated by regulations promulgated pursuant to
any Environmental Law; or
(v) any of the following: pesticide; flammable explosive; petroleum,
including crude oil or any fraction thereof; asbestos or asbestos-containing
material; polychlorinated biphenyl; radioactive material; or urea formaldehyde.
In addition to the foregoing, the term Environmental Laws shall be deemed
to include, without limitation, local, state and federal laws, judgments,
ordinances, orders, rules, regulations, codes and other governmental
restrictions, guidelines and requirements, any amendments and successors
thereto, replacements thereof and publications promulgated pursuant thereto,
which deal with or otherwise in any manner relate to, air or water quality, air
emissions, soil or ground conditions or other environmental matters of any kind.
(b) Use, etc. of Hazardous Materials. Lessee agrees that, except for the
use
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and storage of the generator and generator tank installed by Lessee pursuant to
Section 49.20 hereof and in compliance with all applicable governmental rules
and regulations and except for the use and storage, in compliance with all
applicable governmental rules and regulations, of those Hazardous Materials
normally used in the operation of office space for a business of the type
described in Section 1.7 hereof (for example, cleaning solvents and supplies,
and toner and other office machine supplies) and then only in such reasonable
quantities as are appropriate for such use, during the Term, there shall be no
use, presence, disposal, storage, generation, leakage, treatment, manufacture,
import, handling, processing, release or threatened release of Hazardous
Materials on, from or under the Leased Premises by Lessee, its employees,
agents, representatives, contractors, invitees, subtenants and/or assigns
(hereinafter collectively, "LESSEE'S PARTIES"). The use, presence, disposal,
storage, generation, leakage, treatment, manufacture, import, handling,
processing, release or threatened release of Hazardous Materials by Lessee's
Parties, whether permitted by this Section 12.b(3) or not, are sometimes
hereinafter individually or collectively referred to as "HAZARDOUS USE." Except
for the generator tank contemplated under Section 49.20, Lessee shall not be
entitled to install any tanks under, on or about the Leased Premises for the
storage of Hazardous Materials without the express written consent of Lessor,
which may be given or withheld in Lessor's sole arbitrary judgment.
(c) Hazardous Materials Report; When Required. In the event that Lessor
agrees in writing that Lessee or Lessee's Parties may make some Hazardous Use of
the Leased Premises, Lessee shall submit to Lessor a written report with respect
to Hazardous Materials ("REPORT") in the form prescribed in subparagraph (d)
below on the following dates:
(i) Within ten (10) days after the Commencement Date,
(ii) Within ten (10) days after each anniversary of the Commencement Date
during the Term,
(iii) At any time within ten (10) days after written request by Lessor, and
(iv) At any time when there has been or is planned any condition which
constitutes or would constitute a change in the information submitted in the
most recent Report, including any notice of violation as referred to in
subparagraph (d)(vii) below.
(d) Hazardous Materials Report; Contents. The Report shall contain, without
limitation, the following information:
(i) Whether on the date of the Report and (if applicable) during the period
since the last Report there has been any Hazardous Use on, from or under the
Leased Premises.
(ii) If there was such Hazardous Use, the exact identity of the Hazardous
Materials, the dates upon which such materials were brought upon the Leased
Premises, the dates upon which the Hazardous Materials were removed therefrom,
and the
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quantity, location, use and purpose thereof.
(iii) If there was such Hazardous Use, any governmental permits maintained
by Lessee with respect to such Hazardous Materials, the issuing agency, original
date of issue, renewal dates (if any) and expiration date. Copies of any such
permits and applications therefor shall be attached.
(iv) If there was such Hazardous Use, any governmental reporting or
inspection requirements with respect to such Hazardous Materials, the
governmental agency to which reports are made and/or which conducts inspections,
and the dates of all such reports and/or inspections (if applicable) since the
last Report. Copies of any such Reports shall be attached.
(v) If there was such Hazardous Use, identification of any operation or
business plan prepared for any government agency with respect to any Hazardous
Use.
(vi) Any liability insurance carried by Lessee with respect to Hazardous
Materials, the insurer, policy number, date of issue, coverage amounts, and date
of expiration. Copies of any such policies or certificates of coverage shall be
attached.
(vii) Any notices of violation of Environmental Laws, written or oral,
received by Lessee from any governmental agency since the last Report, the date,
name of agency, and description of violation. Copies of any such written notices
shall be attached.
(viii) Any knowledge, information or communication which Lessee has
acquired or received relating to (x) any enforcement, cleanup, removal or other
governmental or regulatory action threatened or commenced against Lessee or with
respect to the Leased Premises pursuant to any Environmental Laws; (y) any claim
made or threatened by any person or entity against Lessee or the Leased Premises
on account of any alleged loss or injury claimed to result from any alleged
Hazardous Use on or about the Leased Premises or Complex; or (z) any report,
notice or complaint made to or filed with any governmental agency concerning any
Hazardous Use on or about the Leased Premises or Complex. The Report shall be
accompanied by copies of any such claim, report, complaint, notice, warning or
other communication that is in the possession of or is available to Lessee.
(ix) Such other pertinent information or documents as are reasonably
requested by Lessor in writing.
(e) Release of Hazardous Materials: Notification and Clean Up. If at any
time during the Term Lessee knows or believes that any release of any Hazardous
Materials by Lessee's Parties has come or will come to be located upon, about or
beneath the Leased Premises or the Complex, then Lessee shall immediately,
either prior to the release or following the discovery thereof by Lessee, give
verbal and follow-up written notice of that condition to Lessor. Lessee
covenants to investigate, clean up and otherwise remediate any release of
Hazardous Materials caused solely by Lessee's Parties at Lessee's cost and
expense; such investigation,
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clean up and remediation shall be performed only after Lessee has obtained
Lessor's written consent, which shall not be unreasonably withheld, conditioned
or delayed; provided, however, that Lessee shall be entitled to respond
immediately to an emergency without first obtaining Lessor's written consent.
All clean up and remediation shall be done in compliance with Environmental Laws
and to the reasonable satisfaction of Lessor. Notwithstanding the foregoing,
whether or not such work is prompted by the foregoing notice from Lessee or is
undertaken by Lessor for any other reason whatsoever, Lessor shall have the
right, but not the obligation, in Lessor's sole and absolute discretion,
exercisable by prior written notice to Lessee , to undertake within or outside
the Leased Premises all or any portion of any investigation, clean up or
remediation with respect to Hazardous Materials brought onto, used, or released
on, under or around the Leased Premises or the Complex by Lessee's Parties (or,
once having undertaken any of such work, to cease same, in which case Lessee
shall perform the work), all at Lessee's cost and expense, which shall be paid
by Lessee as additional Rent within ten (10) days after receipt of written
request therefor by Lessor (and which Lessor may require to be paid prior to
commencement of any work by Lessor). No such work by Lessor shall create any
liability on the part of Lessor to Lessee or any other party in connection with
such Hazardous Materials or constitute an admission by Lessor of any
responsibility with respect to such Hazardous Materials. It is the express
intention of the parties hereto that Lessee shall be liable under this Section
12.3(e) for any and all conditions covered hereby which were caused or created
solely (i) by any of Lessee's Parties, or (ii) by any Hazardous Materials
brought onto the Leased Premises or the Complex by or for the benefit of
Lessee's Parties (collectively "TENANT CAUSED Contamination"). Lessee shall not
enter into any settlement agreement, consent decree or other compromise with
respect to any claims relating to any Hazardous Materials in any way connected
to the Leased Premises or the Complex without first (i) notifying Lessor of
Lessee's intention to do so and affording Lessor the opportunity to participate
in any such proceedings, and (ii) obtaining Lessor's prior written consent;
Provided, however, that, other than the obligations assumed by Lessee in this
Section 12 regarding Hazardous Materials, Lessor shall pay for all costs and
expenses, including, without limitation, attorney fees and costs, (together,
"Lessor's Costs") arising in whole or in part from or in any way related to, any
investigation, study, report, clean up or remediation of any Hazardous Material
which is during the Term introduced onto the Complex by Lessor or its agents,
contractors or employees ("LANDLORD CAUSED CONTAMINATION") Notwithstanding any
other provision of this Lease, Lessor's Costs shall not be included in Operating
Costs as defined in Section 2.1(k) hereof.
(f) Pre-Existing Hazardous Materials. As used herein, "PRE-EXISTING
HAZARDOUS MATERIALS" shall mean Hazardous Materials from any source that are as
of the date hereof located on, about, or beneath or are migrating from, onto or
under any part of the Complex (including, without limitation, groundwater).
Lessor represents and warrant to Lessee that, to Lessor's actual knowledge, as
of the date hereof, there are no Pre-Existing Hazardous Materials except those,
if any, disclosed in that certain Revised Independent Remedial Action Interim
Report - Adobe Development dated March 30, 1998 (Project No. 41289-001.001)
issued by EMCON, a copy of which report has been provided to Lessee.
(g) Inspection and Testing by Lessor. Lessor shall have the right at all
times during the Term, on not less than 24 hours prior notice to Lessee (which
notice may be by
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telephone) to (i) inspect the Leased Premises, as well as Lessee's books and
records related to Hazardous Materials, and to (ii) conduct tests and
investigations to determine whether Lessee is in compliance with the provisions
of this Section. Except in case of emergency, Lessor shall give reasonable
notice to Lessee before conducting any inspections, tests, or investigations.
The cost of all such inspections, tests and investigations shall be borne by
Lessee, if such tests reveal a violation of the provisions of this Article 12 by
any of Lessee's Parties. Neither any action nor inaction on the part of Lessor
pursuant to this Section 12.3(g) shall be deemed in any way to release Lessee
from, or in any way modify or alter, Lessee's responsibilities, obligations,
and/or liabilities incurred pursuant to Section 12.3 hereof.
12.4 MUTUAL ENVIRONMENTAL INDEMNITIES.
(a) Lessee Indemnity of Lessor. Lessee shall indemnify, hold harmless, and,
at Lessor's option (with such attorneys as Lessor may approve in advance and in
writing), defend Lessor (and Lessor's officers, directors, shareholders,
trustees, partners, employees, contractors, agents and mortgagees or other lien
holders), from and against any and all claims, demands, expenses, actions,
judgments, damages (whether consequential, direct or indirect, known or unknown,
foreseen or unforeseen), penalties, fines, liabilities, losses of every kind and
nature, including, without limitation, property damage, (including, the
diminution in value of Lessor's interest in the Leased Premises or the Complex,
and damages for the loss or restriction on use of any space or amenity within
the Leased Premises or the Complex, damages arising from any adverse impact on
marketing space in the Complex), sums paid in settlement of claims and any costs
and expenses associated with injury, illness or death to or of any person,
suits, administrative proceedings, costs and fees, including, but not limited
to, attorneys' and consultants' fees and expenses, and the costs of cleanup,
remediation, removal and restoration (all of the foregoing being hereinafter
sometimes collectively referred to as "LOSSES"), arising out of or in connection
with a Tenant Caused Contamination, Lessee's breach of the provisions of this
Article 12; or any Hazardous Use on, about or from the Leased Premises or the
Complex. Lessee warrants that it is leasing the Leased Premises "as-is,
where-is," and that it has thoroughly inspected the Leased Premises prior to
execution of this Lease. Notwithstanding anything to the contrary herein, Lessee
shall have no liability or responsibility to Lessor under this Lease or
otherwise for any Pre-Existing Hazardous Materials.
(b) Lessor Indemnity of Lessee. Lessor shall indemnify, hold harmless, and,
at Lessee's option (with such attorneys as Lessee may approve in advance and in
writing), defend Lessee (and Lessee's officers, directors, shareholders,
trustees, partners, employees, contractors, agents and mortgagees or other lien
holders), from and against any and all claims, demands, expenses, actions,
judgments, damages (whether consequential, direct or indirect, known or unknown,
foreseen or unforeseen), penalties, fines, liabilities, losses of every kind and
nature, including, without limitation, property damage, (including, damages for
the loss or restriction on use of any space or amenity within the Leased
Premises or the Complex), sums paid in settlement of claims and any costs and
expenses associated with injury, illness or death to or of any person, suits,
administrative proceedings, costs and fees, including, but not limited to,
attorneys' and consultants' fees and expenses, and the costs of cleanup,
remediation, removal and restoration arising out of or in connection with a
Landlord Caused Contamination or Lessor's
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breach of the provisions or warranties of this Article 12. Notwithstanding
anything to the contrary herein, Lessor shall have no liability or
responsibility to Lessee under this Lease or otherwise for any Hazardous
Materials that first appear on the Premises or the Complex during the Term due
to the actions or omissions of other tenants within the Building or Complex or
to the actions or omissions of other third parties (except Landlord's agents or
contractors).
12.5 RELEASE AND ASSUMPTION OF RISK.
(a) Lessee, for itself, and its officers, directors, shareholders,
partners, agents, contractors, attorneys, brokers, servants, employees,
sublessees, lessees, invitees, concessionaires, licensees and representatives
(hereinafter referred to as "RELEASORS"), hereby waives, releases, acquits and
forever discharges Lessor and its officers, directors, trustees, shareholders,
partners, agents, contractors, attorneys, brokers, servants, employees, lessees,
invitees, licensees and representatives (hereinafter referred to as "RELEASEES")
of and from any and all Losses, which are in any way connected with, based upon,
related to or arising out of (i) any Hazardous Materials on or about the Leased
Premises or the Complex, (ii) any violation by or relating to the Leased
Premises or the Complex (or the ownership, use, condition, occupancy or
operation thereof), or by the Releasors or any other persons or entities, of any
Environmental Laws affecting the Leased Premises or the Complex, or (iii) any
investigation, inquiry, order, hearing, action or other proceeding by or before
any governmental agency or any court in connection with any of the matters
referred to in clauses (i) or (ii) above (collectively, the "RELEASED MATTERS"),
except to the extent otherwise provided in Section 12.4,. Releasors hereby
expressly assume any and all risk of Losses based on or arising out of or
pertaining to the Released Matters except to the extent otherwise provided in
Section 12.4.
(b) Lessee agrees, represents and warrants that the Released Matters are
not limited to matters which are known, disclosed or foreseeable, and Lessee
realizes and acknowledges that factual matters now unknown to it may have given,
or may hereinafter give, rise to Losses which are presently unknown,
unanticipated and unsuspected. Lessee further agrees, represents and warrants
that the provisions of this Section 12.5 have been negotiated and agreed upon in
light of that realization and that Lessee nevertheless hereby intends to
release, discharge and acquit the Releasees from any such unknown Losses which
are in any way related to this Lease or the Complex.
13. SERVICE AND EQUIPMENT
13.1 CLIMATE CONTROL, Lessor, as part of Operating Costs, shall provide
climate control to the Leased Premises from 7:00 a.m. to 6:00 p.m. (the "CLIMATE
CONTROL HOURS") on weekdays and -Saturdays (Sundays and holidays excepted) to
maintain a temperature adequate for comfortable occupancy, provided that Lessor
shall have no responsibility or liability for failure to supply climate control
service when making repairs, alterations or improvements or when prevented from
so doing by strikes or any other cause beyond Lessor's reasonable control. Any
climate control furnished for periods not within the Climate Control Hours
pursuant to Lessee's request shall be at Lessee's sole cost and expense in
accordance with rate schedules promulgated by Lessor from time to time. The
current estimated charge for climate control
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service is $50 per hour, but Lessee shall not be required to pay more than the
actual third-party costs for such extra service, together with a reasonable
charge to Lessor for maintenance and administration costs related to such
service. Lessee acknowledges that Lessor has installed in the Building a system
for the purpose of climate control. Any use of the Leased Premises not in
accordance with the design standards or any arrangement of partitioning which
interferes with the normal operation of such system may require changes or
alterations in the system or ducts through which the climate control system
operates. Any changes or alterations so occasioned, if such changes can be
accommodated by Lessor's equipment, shall be made by Lessee at its cost and
expense but only with the written consent of Lessor first had and obtained, and
in accordance with drawings and specifications and by a contractor first
approved in writing by Lessor. If installation of partitions, equipment or
fixtures by Lessee necessitates the re-balancing of the climate control
equipment in the Leased Premises, the same will be performed by Lessor at
Lessee's expense. Lessee acknowledges that up to one (1) year may be required
after Lessee has fully occupied the Leased Premises in order to adjust and
balance the climate control systems. Any charges to be paid by Lessee hereunder
shall be due within ten (10) days of receipt of an invoice from Lessor,
13.2 ELEVATOR SERVICE. Lessor, as part of Operating Costs, shall provide
elevator service (which may be with or without operator at Lessor's option)
during all hours provided that Lessee, its employees, and all other persons
using such services shall do so at their own risk.
13.3 CLEANING PUBLIC AREAS. Lessor, as part of Operating Costs, shall
promptly maintain and keep clean the street level lobbies, sidewalks, truck
dock, public corridors and other public portions of the Building.
13.4 REFUSE DISPOSAL. Lessee shall pay Lessor, within ten (10) days of
being billed therefor, for the removal from the Leased Premises and the Building
of such refuse and rubbish of Lessee as shall exceed that ordinarily accumulated
daily in the routine of business office occupancy.
13.5 JANITORIAL SERVICE. Lessor, as part of Operating Costs, shall
provide cleaning and janitorial service in and about the Complex and Leased
Premises from time to time on weekdays (Saturdays, Sundays and holidays
excepted) in accordance with standards in first-class office buildings in the
city in which the Building is located.
To the extent that Lessee shall require special or more frequent cleaning
and/or janitorial service (hereinafter referred to as "SPECIAL CLEANING
SERVICE") Lessor may, upon reasonable advance notice from Lessee, elect to
furnish such Special Cleaning Service and Lessee agrees to pay Lessor, within
ten (10) days of being billed therefor, Lessor's charge for providing such
additional service.
Special Cleaning Service shall include but shall not be limited to the
following:
(a) The cleaning and maintenance of Lessee eating facilities, including the
removal of refuse and garbage therefrom.
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(b) The cleaning and maintenance of Lessee computer centers, including
peripheral areas, and removal of waste paper therefrom.
(c) The cleaning and maintenance of special equipment areas, kitchen areas,
private toilets and locker rooms, medical centers and large scale duplicating
rooms.
(d) The cleaning and maintenance in areas of special security such as
storage units.
(e) The provision of consumable supplies for private toilet rooms.
13.6 INTERRUPTIONS. Lessor does not warrant that any of the services
referred to above or any other services and/or utilities which Lessor may supply
or are supplied will be free from interruption and/or the need for maintenance
and repairs or replacement. Lessee acknowledges that any one or more such
services may be suspended or reduced by reason of repair, alterations or
improvements necessary to be made, by strikes or accidents, by any cause beyond
the reasonable control of Lessor, by orders or regulations of any federal,
state, county or municipal authority, or by any other cause of action unless
such interruption is the result of the gross negligence or willful misconduct of
Lessor or Lessor's agents, employees, or invitees.
Any such interruption or suspension of services shall not be deemed an
eviction or disturbance of Lessee's use and possession of the Leased Premises or
any part thereof, nor render Lessor liable to Lessee for damages by abatement of
Rent or otherwise, nor relieve Lessee of performance of Lessee's obligations
under this Lease.
14. WASTE
14.1 WASTE OR NUISANCE. Lessee shall not commit, or suffer to be committed,
any waste upon the Leased Premises, or any nuisance, or other act or thing which
may disturb the quiet enjoyment of any other tenant or occupant of the Complex
in which the Leased Premises are located.
15. ALTERATIONS
15.1 CONSENT OF LESSOR; OWNERSHIP. Other than non-structural alterations
not costing more than $25,000.00 in any consecutive twelve (12) month period,
Lessee shall not make, or suffer to be made, any alterations to the Leased
Premises, the Building, or the Complex, and/or Lines, systems and facilities
therein, or any part thereof, without the written consent of Lessor first had
and obtained, which consent will not be unreasonably withheld, conditioned or
delayed. When Lessor consents to such alterations, it shall, if so requested by
Lessee, also notify Lessee if Lessor will require Lessee to remove such
improvement at the expiration or earlier termination of this Lease. Any
additions to or alterations of the Leased Premises (except trade fixtures)
shall, immediately upon being made, constitute a part of the realty and Lessor's
property, and shall, at the expiration or earlier termination of this Lease,
remain upon the Leased Premises without compensation to Lessee, unless Lessor
notified Lessee at the time the item was installed that
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such item was to be removed prior to Lease expiration or termination, as
provided in Section 15.4, below. Except as otherwise provided in this Lease,
Lessee shall have the right to remove its trade fixtures placed upon the Leased
Premises, provided that Lessee restores the Leased Premises as indicated below.
Any and all reasonable costs incurred by Lessor, whether in complying with laws,
governmental requirements or otherwise, as a result of any "alterations" (as
hereinafter defined), or as a result of request by Lessee for increased Lines or
other utility capacity above that presently existing (or, in the event the
Building is to be constructed or substantially altered by Lessor prior to the
delivery date, above that which is planned by Lessor for the Building) shall be
paid by Lessee within ten (10) days after demand therefor by Lessor.
15.2 REQUIREMENTS. Any alterations, additions or installations performed by
Lessee in the Leased Premises or Building (hereinafter collectively
"alterations") shall be subject to strict conformity with the following
requirements:
(a) All alterations shall be at the sole cost and expense of Lessee;
(b) Prior to commencement of any work of alteration, Lessee shall submit
detailed plans and specifications, including working drawings (hereinafter
referred to as "PLANS"), of the proposed alterations, which shall be subject to
the consent of Lessor in accordance with the terms of Section 15.1 above;
(c) [Intentionally Omitted.]
(d) No alterations shall be commenced without Lessee having previously
obtained all appropriate permits and approvals required by and of governmental
agencies;
(e) All alterations shall be performed in a skillful and workmanlike
manner, consistent with the best practices and standards of the construction
industry, and pursued with diligence in accordance with the Plans previously
approved by Lessor and in full accord with all applicable laws and ordinances.
All material, equipment, and articles incorporated in the alterations are to be
new, and/or of recent manufacture and of the most suitable grade for the purpose
intended;
(f) Lessee must obtain the prior written approval from Lessor in accordance
with the terms of Section 15.1 above for Lessee's contractor before the
commencement of the work. Lessor may require that Lessee use subcontractors
designated by Lessor as to specified portions of the work. Lessee's contractor
shall maintain all of the insurance reasonably required by Lessor, including,
without limitation, commercial general liability, workers' compensation,
builder's risk and course of construction insurance. The limits of such
insurance shall, at a minimum, be the same as those specified in Article 18;
(g) As a condition of approval of the alterations, Lessor may require
performance and labor and materialmen's payment bonds issued by a surety
approved by Lessor, in a sum equal to the cost of the alterations guarantying
the completion of the alterations free and clear of all liens and other charges
in accordance with the Plans. Such bonds shall name Lessor
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as beneficiary;
(h) The alterations must be performed in a manner such that they will not
interfere with the quiet enjoyment of the other lessees in the Complex;
(i) Lessor shall have the right to condition any approval of the
alterations upon (i) submission by Lessee of a Report with respect to Hazardous
Materials, and/or (ii) the performance by Lessee at Lessee's cost and expense of
such investigation, clean-up and remediation with respect to Hazardous Materials
as Lessor may request, in Lessor's sole and absolute discretion; provided,
however, that Lessor shall have the right, but not the obligation, to undertake
all or any portion of such investigation, clean-up or remediation at Lessee's
cost and expense in accordance with the provisions of Section 12.3(e) above.
Lessee acknowledges and agrees that Lessor shall have the right, in its sole and
absolute discretion, to disapprove the making of any such alterations based upon
the results of any investigation with respect to Hazardous Materials.
15.3 LIENS. Lessee shall keep the Leased Premises and the Complex in which
the Leased Premises are situated free from any liens arising out of any work
performed, materials furnished or obligations incurred by Lessee. In the event a
mechanic's or other lien is filed against the Leased Premises or the Complex of
which the Leased Premises form a part as a result of a claim arising through
Lessee and such lien is not removed within ten (10) business days after Lessee
receives written notice of such lien, Lessor may demand that Lessee furnish to
Lessor a surety bond satisfactory to Lessor in an amount equal to at least one
hundred fifty percent (150%) of the amount of the contested lien claim or
demand, indemnifying Lessor against liability for the same and holding the
Leased Premises free from the effect of such lien or claim. Such bond must be
posted within ten (10) days following notice from Lessor. In the alternative,
Lessee may bond around such lien in accordance to RCW 60.04.161. In addition,
Lessor may require Lessee to pay Lessor's attorneys' fees and costs in
participating in any action to foreclose such lien if Lessor shall decide it is
to its best interest to do so. Lessor may pay the claim prior to the enforcement
thereof, in which event Lessee shall reimburse Lessor in full, including
attorneys' fees, for any such expense, as additional rent, with the next due
rental.
15.4 RESTORATION. Lessee shall return the Leased Premises to Lessor at the
expiration or earlier termination of the Term of this Lease in good and sanitary
order, condition and repair, free of rubble and debris, broom clean, reasonable
wear and tear excepted. However, Lessee shall ascertain from Lessor at least
thirty (30) days prior to the expiration or earlier termination of the Term of
this Lease, whether Lessor desires the Leased Premises, or any part thereof,
restored to its condition prior to the making of permitted alterations, and if
Lessor shall so desire, then Lessee shall forthwith restore said Leased Premises
or the designated portions thereof as the case may be, to its original
condition, entirely at its own expense, excepting normal wear and tear. All
damage to the Leased Premises caused by the removal of such trade fixtures and
other personal property that Lessee is permitted to remove under the terms of
this Lease and/or such restoration shall be repaired by Lessee at its sole cost
and expense prior to termination.
16. PROPERTY INSURANCE
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16.1 USE OF PREMISES. No use shall be made or permitted to be made on the
Leased Premises, nor acts done, which will increase the existing rate of
insurance upon the Building in which the Leased Premises are located or upon any
other building or improvement in the Complex or cause the cancellation of any
insurance policy covering the Building or any other building or improvement in
the Complex, or any part thereof, nor shall Lessee sell, or permit to be kept,
used or sold, in or about the Leased Premises or the Complex, any article which
may be prohibited by the standard form of "All Risk" fire insurance policies.
Lessee shall, at its sole cost and expense, comply with any and all requirements
of any insurance organization or company, pertaining to the Leased Premises,
necessary for the maintenance of reasonable property damage and commercial
general liability insurance, covering the Leased Premises, the Building, or the
Complex.
16.2 INCREASE IN PREMIUMS. Lessee agrees to pay to Lessor directly, as
additional Rent and not as part of Operating Costs, any increase in premiums on
policies which may be carried by Lessor on the Leased Premises, the Building or
the Complex, or any blanket policies which include the Building or Complex,
covering damage thereto and loss of Rent caused by fire and other perils,
resulting solely from the nature of Lessee's occupancy or any act or omission of
Lessee. All payments of additional Rent by Lessee to Lessor pursuant to this
Section 16.2 shall be made within ten (10) days after receipt by Lessee of
Lessor's billing therefor. Lessee shall also pay its Pro Rata Percent of all
premiums for insurance carried by Lessor on the Leased Premises, the Building
and the Complex as part of Operating Costs.
16.3 PERSONAL PROPERTY INSURANCE. Lessee shall maintain in full force and
effect on all of its fixtures, furniture, equipment and other business personal
property in the Leased Premises a policy or policies providing protection
against any peril included within the classification "All Risk" to the extent of
at least ninety percent (90%) of their replacement cost, or that percentage of
the replacement cost required to negate the effect of a coinsurance provision,
whichever is greater. No such policy shall have a deductible in an amount
greater than Five Thousand Dollars ($5,000), as such amount may be adjusted from
time to time by Lessee in accordance with standards then prevailing in the
market for commercial tenants occupying similar space. Lessee shall also insure
in the same manner the physical value of all its leasehold improvements and
alterations in the Leased Premises. During the Term, the proceeds from any such
policy or policies of insurance shall be used for the repair or replacement of
the fixtures, equipment, and leasehold improvements so insured. Lessor shall
have no interest in said insurance, and will sign all documents necessary or
proper in connection with the settlement of any claim or loss by Lessee. Lessee
shall also maintain business interruption insurance and insurance for all plate
glass upon the Leased Premises. All insurance specified in this Section 16.3 to
be maintained by Lessee shall be maintained by Lessee at its sole cost.
16.4 RENT LOSS/BUSINESS INTERRUPTION INSURANCE. Lessee shall carry Business
Interruption or loss of income insurance covering those risks referred to in
Articles 16 and 18 hereof, in an amount equal to all gross income of Lessee
generated from its operations in the Leased Premises for a period of twelve (12)
months at the then current rate of gross income earning.
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17. INDEMNIFICATION, WAIVER OF CLAIMS AND SUBROGATION
17.1 INTENT AND PURPOSE. This Article 17 is written and agreed to in
respect of the intent of the parties to assign the risk of loss, whether
resulting from negligence of the parties or otherwise, to the party who is
obligated hereunder to cover the risk of such loss with insurance. Thus, the
indemnity and waiver of claims provisions of this Lease have as their object, so
long as such object is not in violation of public policy, the assignment of risk
for a particular casualty to the party carrying the insurance for such risk,
without respect to the causation thereof.
17.2 WAIVER OF SUBROGATION. Lessor and Lessee release each other, and their
respective authorized representatives, from any claims for (i) damage to the
Leased Premises and the Building and other improvements in which the Leased
Premises are located, and to the furniture, fixtures, and other business
personal property, Lessee's improvements and alterations of either Lessor or
Lessee, in or on the Leased Premises and the Building and other improvements in
which the Leased Premises are located, and (ii) for loss of business or income
of either Lessor or Lessee, that are caused by or result from risks insured or
required under the terms of this Lease to be insured against under any property
insurance policies carried or to be carried by either of the parties.
17.3 FORM OF POLICY. Each party shall cause each such property insurance
policy obtained by it to provide that the insurance company waives all rights of
recovery by way of subrogation against either party in connection with any
damage covered by such policy. Neither party shall be liable to the other for
any damage caused by any peril included within the classification "All Risk"
which is insured against under any property insurance policy carried under the
terms of this Lease.
17.4 INDEMNITY. Lessee, as a material part of the consideration to be
rendered to Lessor, shall indemnify, defend, protect and hold harmless Lessor
against all actions, claims, demands, damages, liabilities, losses, penalties,
or expenses of any kind which may be brought or imposed upon Lessor or which
Lessor may pay or incur by reason of injury to person or property or business,
from whatever cause, all or in any way connected with the acts and omissions of
Lessee, and the condition or use by Lessee of the Leased Premises, or the
improvements or personal property therein or thereon, including without
limitation any liability or injury to the person or property or business of
Lessee, its agents, officers, employees or invitees. Lessee agrees to indemnify,
defend and protect Lessor and hold it harmless from any and all liability, loss,
cost or obligation on account of, or arising out of, any such injury or loss
however occurring, including breach of the provisions of this Lease and the
negligence of the parties hereto. Notwithstanding the foregoing, nothing
contained herein shall obligate Lessee to indemnify Lessor against Lessor's sole
or gross negligence or willful acts.
17.5 DEFENSE OF CLAIMS. In the event any action, suit or proceeding is
brought against Lessor by reason of any occurrence covered by Section 17.4,
above, Lessee, upon Lessor's request, will at Lessee's expense resist and defend
such action, suit or proceeding, or cause the same to be resisted and defended
by counsel designated either by Lessee or by the insurer whose
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policy covers the occurrence and in either case reasonably approved by Lessor.
The obligations of Lessee under this Section arising by reason of any occurrence
taking place during the Term shall survive any termination of this Lease.
17.6 WAIVER OF CLAIMS. Lessee, as a material part of the consideration to
be rendered to Lessor, hereby waives all claims against Lessor for damages or
injury, as described below, from any cause arising at any time, including the
negligence of the parties hereto:
(a) damages to goods, wares, merchandise and loss of business or income in,
upon or about the Leased Premises and injury to Lessee, its agents, employees,
invitees or third persons, in, upon or about the Leased Premises; and
(b) (notwithstanding anything to the contrary contained in this Lease,
including, without limitation, the definition of Operating Costs in Section
2.1(k), which includes "policing") damages to goods, wares, merchandise and loss
of business, in, upon or about the Leased Premises or the Complex, and injury to
Lessee, its agents, employees, invitees or third persons in, upon or about the
Leased Premises or the Complex, where such damage or injury results from
Lessor's failure to police or provide security for the Complex or Lessor's
negligence in connection therewith.
Notwithstanding the foregoing, in no event shall Lessee be deemed to have
waived any claims as against Lessor where such claims are based upon, or arise
out of, the gross negligence or willful misconduct of Lessor.
Lessee expressly acknowledges and agrees that the provisions of Section
12.6(b) above apply fully with respect to the matters waived pursuant to this
Section 17.6, and, for such purpose, the term Released Matters, as used in
Section 12.5(b), shall be deemed to include the matters waived pursuant to this
Section 17.6.
17.7 REFERENCES. Wherever in this Article the term Lessor or Lessee is used
and such party is to receive the benefit of a provision contained in this
Article, such term shall refer not only to that party but also to its officers,
directors, shareholders, employees, contractors, partners, agents and mortgagees
or other lien holders.
18. LIABILITY INSURANCE
18.1 LESSEE'S INSURANCE. Lessee shall, at Lessee's expense, obtain and keep
in force during the Term, a commercial general liability insurance policy
insuring Lessee against the risks of, bodily injury and property damage,
personal injury, contractual liability, completed operations, products
liability, host liquor liability, owned and non-owned automobile liability
arising out of the ownership, use, occupancy or maintenance of the Leased
Premises and all areas appurtenant thereto. Such insurance shall be a combined
single limit policy in an amount not less than ONE MILLION DOLLARS
($1,000,000.00) per occurrence with a TWO MILLION DOLLAR ($2,000,000.00) annual
aggregate; and an umbrella policy of THREE MILLION DOLLARS ($3,000,000.00) any
one occurrence. Lessor and any lender or other party in interest
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designated by Lessor shall be named as additional insured(s). The policy shall
contain cross liability endorsements and shall insure performance by Lessee of
the indemnity provisions of this Lease; shall be primary, not contributing with,
and not in excess of coverage which Lessor may carry; shall state that Lessor is
entitled to recovery for the negligence of Lessee even though Lessor is named as
an additional insured; shall provide for severability of interest; shall provide
that an act or omission of one of the insured or additional insureds which would
void or otherwise reduce coverage shall not void or reduce coverages as to the
other insured or additional insured; and shall afford coverage after the Term
(by separate policy or extension if necessary) for all claims based on acts,
omissions, injury or damage which occurred or arose (or the onset of which
occurred or arose) in whole or in part during the Term. The limits of said
insurance shall not limit any liability of Lessee hereunder. Not more frequently
than every three (3) years, if, in the reasonable opinion of Lessor, the amount
of liability insurance required hereunder is not adequate, Lessee shall promptly
increase said insurance coverage as required by Lessor.
18.2 WORKERS' COMPENSATION INSURANCE. Lessee shall carry Workers'
Compensation insurance as required by law, including an employers' liability
endorsement.
19. INSURANCE POLICY REQUIREMENTS
19.1 GENERAL REQUIREMENTS. All insurance policies required to be carried by
Lessee (except Lessee's business personal property insurance) hereunder shall
conform to the following requirements:
(a) The insurer in each case shall carry a designation in "Best's Insurance
Reports" as issued from time to time throughout the Term as follows:
Policyholders' rating of A; financial rating of not less than VII;
(b) The insurer shall be qualified to do business in the state in which the
Leased Premises are located;
(c) The policy shall be in a form and include such endorsements as are
reasonably acceptable to Lessor;
(d) Certificates of insurance shall be delivered to Lessor at commencement
of the Term and certificates of renewal at least thirty (30) days prior to the
expiration of each policy;
(e) Each policy shall require that Lessor be notified in writing by the
insurer at least thirty (30) days prior to any cancellation or expiration of
such policy, or any reduction in the amounts of insurance carried.
20. LESSEE INSURANCE DEFAULT
20.1 RIGHTS OF LESSOR. In the event that Lessee fails to obtain any
insurance required of it under the terms of this Lease, Lessor may, at its
option, but is not obligated to, obtain such
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insurance on behalf of Lessee and bill Lessee, as additional rent, for the cost
thereof. Payment shall be due within ten (10) days of receipt of the billing
therefor by Lessee.
21. FORFEITURE OF PROPERTY AND LESSOR'S LIEN
21.1 REMOVAL OF PERSONAL PROPERTY. Lessee agrees that as of the date of
termination of this Lease or repossession of the Leased Premises by Lessor, by
way of default or otherwise, it shall remove all personal property to which it
has the right to ownership pursuant to the terms of this Lease. Any and all such
property of Lessee not removed within five (5) business days of such date shall,
at the option of Lessor, irrevocably become the sole property of Lessor. Lessee
waives all rights to notice and all common law and statutory claims and causes
of action which it may have against Lessor subsequent to such date as regards
the storage, destruction, damage, loss of use and ownership of the personal
property affected by the terms of this Article. Lessee acknowledges Lessor's
need to relet the Leased Premises upon termination of this Lease or repossession
of the Leased Premises and understands that the forfeitures and waivers provided
herein are necessary to aid said reletting, and to prevent Lessor incurring a
loss for inability to deliver the Leased Premises to a prospective lessee.
21.2 LESSOR'S LIEN. Lessee hereby grants to Lessor a lien upon and security
interest in all fixtures, chattels and personal property of every kind now or
hereafter to be placed or installed in or on the Leased Premises and agrees that
in the event of any default on the part of Lessee, Lessor shall have all the
rights and remedies afforded the secured party by the chapter on "DEFAULT" of
Division 9 of the Uniform Commercial Code of the state in which the Leased
Premises are located and may, in connection therewith, also (a) enter on the
Leased Premises to assemble and take possession of the collateral, (b) require
Lessee to assemble the collateral and make its possession available to Lessor at
the Leased Premises, and (c) enter the Leased Premises, render the collateral,
if equipment, unusable and dispose of it in a manner provided by the Uniform
Commercial Code of the state in which the Leased Premises are located. Lessee
hereby designates Lessor as his attorney-in-fact for purposes of executing such
documents as may be necessary to perfect the lien and security interest granted
hereunder.
22. MAINTENANCE AND REPAIRS
22.1 LESSOR'S OBLIGATIONS. Subject to the other provisions of this Lease
imposing obligations in this respect upon Lessee, Lessor shall repair, replace
and maintain the external and Structural parts of the Complex which do not
comprise a part of the Leased Premises and are not leased to others, janitor and
equipment closets and shafts within the Leased Premises designated by Lessor for
use by it in connection with the operation and maintenance of the Complex, and
all Common Areas. Lessor shall perform such repairs, replacements and
maintenance with reasonable dispatch, in a good and workmanlike manner; but
Lessor shall not be liable for any damages, direct, indirect or consequential,
or for damages for personal discomfort, illness or inconvenience of Lessee by
reason of failure of equipment, Lines, facilities or systems or reasonable
delays in the performance of such repairs, replacements and maintenance, unless
caused by the deliberate act or omission of Lessor, its servants, agents, or
employees. The cost for such repairs, maintenance and replacement shall be
included in Operating Costs in
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accordance with Section 2.1(k) hereof.
22.2 NEGLIGENCE OF LESSEE. If the Building, the elevators, boilers,
engines, pipes or apparatus used for the purpose of climate control of the
Building or operating the elevators, or if the water pipes, drainage pipes,
electric lighting or other equipment, Lines, systems and/or facilities of the
Building or the Complex, or the roof or the outside walls of the Building, fall
into a state of disrepair or become damaged or destroyed through the negligence,
carelessness or misuse of Lessee, its agents, employees or anyone permitted by
it to be in the Complex, or through it in any way, the cost of the necessary
repairs, replacements or alterations shall be borne by Lessee who shall pay the
same to Lessor as additional charges forthwith on demand.
22.3 LESSEE'S OBLIGATIONS. Lessee shall maintain and repair the interior
portions of the Leased Premises, including without limiting the generality of
the foregoing, all interior partitions and walls, fixtures; all Lessee
Improvements and alterations in the Leased Premises; all electrical and
telephone outlets and conduits not concealed by floors, walls or ceilings; all
fixtures and shelving; and all special mechanical and electrical equipment
(which equipment is not a normal part of the Leased Premises) installed by or
for Lessee; reasonable wear and tear, damage with respect to which Lessor has an
obligation to repair as provided in Section 22.1 and Section 23.2 hereof only
excepted. Lessee must obtain the prior written approval from Lessor for Lessee's
contractor before the commencement of the repair, which approval shall not be
unreasonably withheld, conditioned or delayed. Lessor may require that Lessee
use a specific contractor for certain types of repairs. Lessor may enter and
view the state of repair and Lessee will repair in a good and workmanlike manner
according to prior notice in writing. Notwithstanding the foregoing, Lessee
shall not make any repairs to the equipment, Lines, facilities or systems of the
Building or Complex which are outside of the Leased Premises or which do not
exclusively serve the Leased Premises.
22.4 CLEANING. Lessee agrees at the end of each business day to leave the
Leased Premises in a reasonably clean condition for the purpose of the
performance of Lessor's cleaning services referred to herein. Lessee shall
maintain the appearance of the Leased Premises in a manner consistent with the
character, use and appearance of the Complex.
22.5 WAIVER. Lessee waives all rights it may have under law to make repairs
at Lessor's expense.
23. DESTRUCTION
23.1 RIGHTS OF TERMINATION. In the event the Leased Premises suffers (a) an
"uninsured property loss" (as hereinafter defined) or (b) a property loss which
cannot be repaired within one hundred ninety five (195) days from the date of
destruction under the laws and regulations of state, federal, county or
municipal authorities, or other authorities with jurisdiction, Lessor may
terminate this Lease as at the date of the damage upon written notice to Lessee
following the property loss. In the event of a property loss to the Leased
Premises which cannot be repaired within one hundred ninety-five (195) days of
the occurrence thereof, Lessee shall have the right to terminate the Lease by
written notice to Lessor within twenty (20) days
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following notice from Lessor that the time for restoration shall exceed one
hundred ninety-five (195) days. For purposes of this Lease, the term "uninsured
property loss" shall mean any loss arising from a peril not covered by the
standard form of "All Risk" property insurance policy.
23.2 REPAIRS. In the event of a property loss which may be repaired within
one hundred ninety-five (195) days from the date of the damage, or, in the
alternative, in the event the parties do not elect to terminate this Lease under
the terms of Section 23.1 above, then this Lease shall continue in full force
and effect and Lessor shall promptly undertake to make such repairs to
reconstitute the Leased Premises to as near the condition as existed prior to
the property loss as practicable. Such partial destruction shall in no way annul
or void this Lease except that Lessee shall be entitled to a proportionate
reduction of Minimum Rent and additional Rent following the property loss and
until the time the Leased Premises are restored. Such reduction shall be an
amount which reflects the degree of interference with Lessee's business. So long
as Lessee conducts its business in the Leased Premises, there shall be no
abatement until the parties agree on the amount thereof. If the parties cannot
agree within forty-five (45) days of the property loss, the matter shall be
submitted to arbitration under the rules of the American Arbitration
Association. Upon the resolution of the dispute, the settlement shall be
retroactive and Lessor shall within ten (10) days thereafter refund to Lessee
any sums due in respect of the reduced rental from the date of the property
loss. Lessor's obligations to restore shall in no way include any construction
originally performed by Lessee or subsequently undertaken by Lessee, but shall
include solely that property constructed by Lessor prior to commencement of the
Term, including without limitation, any Lessee Improvements.
23.3 REPAIR COSTS. The cost of any repairs to be made by Lessor pursuant to
Section 23.2 of this Lease shall be paid by Lessor utilizing available insurance
proceeds, and Lessor shall have no obligation to restore the Leased Premises or
the Complex to the extent that the cost of such repairs or restoration is not
covered by insurance proceeds actually received by Lessor in connection with
such damage or destruction.
23.4 WAIVER. Lessee hereby waives all statutory or common law rights of
termination in respect to any partial destruction or property loss which Lessor
is obligated to repair or may elect to repair under the terms of this Article.
Further, in event of a property loss occurring during the last two (2) years of
the original Term hereof or of any extension, Lessor need not undertake any
repairs and may cancel this Lease unless Lessee has the right under the terms of
this Lease to extend the Term for an additional period of at least five (5)
years and does so within thirty (30) days of the date of the property loss.
23.5 LESSOR'S ELECTION. In the event that the Complex or Building in which
the Leased Premises are situated be destroyed to the extent of not less than
thirty-three and one-third percent (33-1/3%) of the replacement cost thereof,
Lessor may elect to terminate this Lease, whether the Leased Premises be injured
or not, in the same manner as in Section 23.1 above. At all events, a total
destruction of the Complex of which the Leased Premises form a part, or the
Leased Premises itself, shall terminate this Lease.
24. CONDEMNATION
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24.1 DEFINITIONS.
(a) "CONDEMNATION" means (i) the exercise of any governmental power,
whether by legal proceedings or otherwise, by a condemnor and/or (ii) a
voluntary sale or transfer by Lessor to any condemnor, either under threat of
condemnation or while legal proceedings for condemnation are pending.
(b) "DATE OF TAKING" means the date the condemnor has the right to
possession of the property being condemned.
(c) "AWARD" means all compensation, sums or anything of value awarded, paid
or received on a total or partial condemnation.
(d) "CONDEMNOR" means any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.
24.2 TOTAL TAKING. If the Leased Premises are totally taken by
condemnation, this Lease shall terminate on the date of taking.
24.3 PARTIAL TAKING; COMMON AREAS.
(a) If any portion of the Leased Premises is taken by condemnation, this
Lease shall remain in effect, except that Lessee can elect to terminate this
Lease if twenty percent ( 20%) or more of the total number of square feet in the
Leased Premises is taken.
(b) If any part of the Common Areas of the Complex is taken by
condemnation, this Lease shall remain in full force and effect so long as there
is no material interference with the access to or parking for the Leased
Premises, except that if thirty percent (30%) or more of the Common Areas is
taken by condemnation, either party shall have the election to terminate this
Lease pursuant to this Section.
(c) If fifty percent (50%) or more of the Building in which the Leased
Premises are located is taken, Lessor shall have the election to terminate this
Lease in the manner prescribed herein.
24.4 TERMINATION OR ABATEMENT. If either party elects to terminate this
Lease under the provisions of Section 24.3 (such party is hereinafter referred
to as the "TERMINATING PARTY"), it must terminate by giving notice to the other
party (the "NONTERMINATING PARTY") within thirty (30) days after the nature and
extent of the taking have been finally determined (the "DECISION PERIOD"). The
Terminating Party shall notify the Nonterminating Party of the date of
termination, which date shall not be earlier than sixty (60) days after the
Terminating Party has notified the Nonterminating Party of its election to
terminate nor later than the date of taking. If Notice of Termination is not
given within the Decision Period, the Lease shall continue in full force and
effect except that Minimum Rent and additional Rent shall be reduced by
subtracting
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therefrom an amount calculated by multiplying the Minimum Rent and additional
Rent in effect prior to the taking by a fraction, the numerator of which is the
number of square feet taken from the Leased Premises and the denominator of
which is the number of square feet in the Leased Premises prior to the taking.
24.5 RESTORATION. If there is a partial taking of the Leased Premises and
this Lease remains in full force and effect pursuant to this Article, Lessor, at
its cost, shall promptly accomplish all necessary restoration so that the Leased
Premises is returned as near as practical to its condition immediately prior to
the date of the taking, but in no event shall Lessor be obligated to expend more
for such restoration than the extent of funds actually paid to Lessor by the
condemnor.
24.6 AWARD. Any award arising from the condemnation or the settlement
thereof shall belong to and be paid to Lessor, except that Lessee shall receive
from the award compensation for the following if specified in the award by the
condemning authority, so long as it does not reduce Lessor's award in respect of
the real property: Lessee's trade fixtures, tangible personal property, loss of
business and relocation expenses. At all events, Lessor shall be solely entitled
to all award in respect of the real property, including the bonus value of the
leasehold. Lessee shall not be entitled to any award until Lessor has received
the above sum in full.
25. ASSIGNMENT AND SUBLETTING
25.1 LEASE IS PERSONAL. The purpose of this Lease is to transfer possession
of the Leased Premises to Lessee for Lessee's personal use in return for certain
benefits, including rent, to be transferred to the Lessor. Lessee's right to
assign or sublet as stated in this Article is subsidiary and incidental to the
underlying purpose of this Lease. Lessee acknowledges and agrees that it has
entered into this Lease in order to acquire the Leased Premises for its own
personal use and not for the purpose of obtaining the right to convey the
leasehold to others.
25.2 "TRANSFER OF THE LEASED PREMISES" DEFINED. The terms "TRANSFER OF THE
LEASED PREMISES" or "TRANSFER" as used herein shall include any assignment of
all or any part of this Lease (including assignment by operation of law),
subletting of all or any part of the Leased Premises or transfer of possession,
or granting of the right of possession or contingent right of possession of all
or any portion of the Leased Premises including, without limitation, license,
concession, mortgage, devise, hypothecation, agency, franchise or management
agreement, or suffering any other person (the agents and servants of Lessee
excepted) to occupy or use the Leased Premises or any portion thereof. If Lessee
is a corporation which is not deemed a public corporation, or is an
unincorporated association or partnership, or Lessee consists of more than one
party, the transfer, assignment or hypothecation of any stock or interest in
such corporation, association, partnership or ownership interest, in the
aggregate in excess of fifty percent (50%), shall be deemed a Transfer of the
Leased Premises.
25.3 TRANSFER UPON CONSENT. Lessee shall have the right to permit or suffer
a Transfer of the Leased Premises or any interest therein, or any part thereof,
or any right or privilege appurtenant thereto, but only upon the prior written
consent of Lessor, which shall not
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be unreasonably withheld, conditioned or delayed, and a consent to one Transfer
of the Leased Premises shall not be deemed to be a consent to any subsequent
Transfer of the Leased Premises. Any Transfer of the Leased Premises without
such consent shall (i) be voidable, and (ii) terminate this Lease, in either
case, at the option of Lessor.
25.4 |
