Washington-Mukilteo-6500 Harbour Heights Parkway Lease - WiredZone Property LP and CombiMatrix Corp.
Harbour Pointe Tech Center, Washington
(LONG FORM 2000)
BASIC LEASE INFORMATION
LEASE EXECUTION DATE: October 19, 2000
TENANT: COMBIMATRIX CORPORATION
ADDRESS OF TENANT: 6500 Harbour Heights Parkway, Suite 301, Mukilteo,
Washington 98275
CONTACT: Patrick de Maynadier Telephone: (425) 396-5940 (ext. 219)
LANDLORD: WIREDZONE PROPERTY, L.P.
ADDRESS OF LANDLORD: 6060 N. Central Expressway, Suite 642
Dallas, Texas 75206
CONTACT: Scott Anderson Telephone: (425) 315-1354
PREMISES: Suites No.201 and 301 and the hazardous materials storage
area in the office building (the "BUILDING") located on the
land described as 6500 Harbour Heights Parkway, Mukilteo,
Washington and known as Harbour Pointe Tech Center, as more
particularly described on Exhibit "A" (the "LAND"). The
Premises shall also include that certain hazardous materials
storage area on the ground floor level of the Building. The
Premises are outlined on the plan attached to the Lease as
Exhibit "B" and are deemed to contain 85,414 square feet of
Rentable Space based on a useable square footage of 74,273
and a load factor of 15%. Tenant hereby acknowledges that
Tenant's architect has certified to the Rentable Space in
the Premises.
LEASE TERM: Ninety-six (96) months, commencing November 1, 2000 (the
"COMMENCEMENT DATE") and ending at 5:00 p.m., October 31,
2008, subject to extension and earlier termination as
provided in the Lease. Following Lease execution, Landlord
shall provide Tenant with immediate access to the Premises
at no charge.
BASE RENTAL: $ * per month, which is based on an annual Base
Rental of $ * per rentable square foot per year, which
Tenant agrees to pay to Landlord at P.O. Box 972170 Dept.
Code 7002, Dallas, Texas 75397-2170 (or at such other place
as Landlord from time to time may designate in writing) in
advance and without demand on the first day of each calendar
month during and throughout the Lease Term. Payments may
also be wired to Landlord as follows: Bank One - Texas; ABA
#111000614; WiredZone Property, L.P. Lockbox; Acct. No.
1588316057.
*see Schedule 106 attached hereto and incorporated herein
for all purposes
PREPAID RENTAL: $64,837.85, representing payment of Base Rental for the
first month of the Lease Term, to be paid on the date of
execution of this Lease.
SECURITY DEPOSIT: The Security Deposit hereunder shall be in the amount which
represents all of Landlord's transaction costs associated
with this Lease plus the value of the tenant improvement
Allowance described in the Leasehold Improvements Agreement
attached hereto as Exhibit "D". Such Security Deposit
shall be held by Landlord pursuant to the provisions of
Paragraph 29 of the Lease. As an alternative to a cash
security deposit, Tenant may deposit with Landlord a clean,
irrevocable letter of credit from an institution acceptable
to Landlord. At the time of Lease execution, Tenant shall
deliver to Landlord the sum of $640,000 (either in cash or
in the form of a letter of credit as set forth above) with
such amount to thereafter be increased (either by
supplemental cash deposit or amendment to the previously
delivered letter of credit) as the tenant improvement
allowance is advanced by Landlord pursuant to the terms of
the Leasehold Improvements Agreement. At the time Landlord
has fully advanced such tenant improvement allowance the
Security Deposit shall be in the aggregate amount of
$1,500,000. Such security deposit, however, shall be
reduced to $301,084.35 (i.e., the equivalent of two months
of full Base Rental) once Tenant achieves and provided it
thereafter maintains a net cash reserve in excess of
$100,000,000 or has successfully completed an Initial
Public Offering resulting in and thereafter maintaining a
capitalization value in excess of $100,000,000. After
execution of the Lease, the parties shall have the option
of negotiating a mutually satisfactory substitution of all
or a portion of such Security Deposit, for a warrant for
common equity in the Tenant
SOLE PERMITTED USE: General office, research, development, production and sale
of biological
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array processors with related instrumentation,
software, bio-informatics and related
chemicals and other materials, products and
services related to the foregoing used
primarily in the bio-tech/bio-pharmaceutical,
life science, material science, energy,
agricultural and defense industries (subject
to applicable zoning ordinances and building
codes). In addition, Tenant may request to
broaden the definition of Sole Permitted Use
with Landlord's prior written consent, such
consent not to be unreasonably withheld or
delayed. Tenant shall be responsible for
verifying that its proposed use complies with
applicable zoning laws and building codes and
by its execution hereof certifies that it has
received satisfactory evidence of such
compliance. To the best of Landlord's
knowledge, there are no restrictions for
Tenant's intended use or any eminent domain or
condemnation proceedings pending that could
adversely affect Tenant's intended use of the
Premises.
TENANT'S 25.52%, which is the percentage obtained by dividing
PROPORTIONATE SHARE: (i) the 85,414 rentable square feet in the Premises by
(ii) the 334,758 rentable square feet in the
Building; provided, however, Tenant's
Proportionate Share shall be calculated
utilizing the Rentable Space in the Premises
from time to time per the schedule and terms
of Rider No. 106 to this Lease (i.e., in
months 1-10 the rentable square footage will
be 42,868 and therefore Tenant's Proportionate
Share would equal 12.81%).
The foregoing Basic Lease Information is incorporated into and made a part of
the Lease identified above. If any conflict exists between any Basic Lease
Information and the Lease, then the Lease shall control.
LANDLORD: TENANT:
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WIREDZONE PROPERTY, L.P. COMBIMATRIX CORPORATION
By: WiredZone Property GenPar, LLC,
its general partner By:
-------------------------------
Its:
-----------------------------
By:
-------------------------
Its:
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TABLE OF CONTENTS
<CAPTION>
PARAGRAPH PAGE NO.
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1. Definitions and Basic Provisions.....................................................1
2. Lease of Premises....................................................................1
3. Services by Landlord.................................................................2
4. Additional Rental....................................................................3
5. Electricity..........................................................................3
6. Payments and Performance.............................................................4
7. Tenant Plans and Specifications - Installation of Improvements.......................4
8. Completion of Improvements and Commencement of Rent..................................4
9. Relocation of Premises...............................................................4
10. Repairs and Reentry..................................................................4
11. Assignment and Subletting............................................................4
12. Alterations and Additions by Tenant..................................................5
13. Legal Use; Violations of Insurance Coverage; Nuisance................................5
14. Laws and Regulations.................................................................5
15. Indemnity, Liability and Loss or Damage..............................................5
16. Rules of the Building................................................................6
17. Entry for Repairs and Inspection.....................................................6
18. Condemnation.........................................................................6
19. Landlord's Lien and Security Interest................................................6
20. Abandoned Property...................................................................7
21. Holding Over.........................................................................7
22. Fire and Casualty....................................................................7
23. Entire Agreement and Amendment; No Representations or Warranties; No Memorandum
of Lease.............................................................................7
24. Transfer of Landlord's Rights........................................................8
25. Default..............................................................................8
26. Waiver; Attorney's Fees..............................................................9
27. Quiet Possession....................................................................10
28. Severability........................................................................10
29. Security Deposit....................................................................10
30. No Subrogation; Insurance...........................................................10
31. Binding Effect......................................................................11
32. Notices.............................................................................11
33. Brokerage...........................................................................11
34. Subordination.......................................................................11
35. Joint and Several Liability.........................................................11
36. Building Name and Address...........................................................12
38. Mechanic's Liens....................................................................12
39. Taxes and Tenant's Property.........................................................12
40. Constructive Eviction...............................................................12
41. Landlord's Liability................................................................13
42. Execution by Landlord...............................................................13
43. No Waiver...........................................................................13
44. No Third Party Beneficiary..........................................................13
45. Number and Gender...................................................................13
46. Force Majeure.......................................................................13
47. Hazardous and Toxic Materials.......................................................13
48. Telecommunications..................................................................14
49. Landlord's Fees.....................................................................14
50. No Light, Air or View Easement......................................................14
51. APPLICABLE LAW; CONSENT TO JURISDICTION.............................................15
52. WAIVER OF JURY TRIAL................................................................15
53. Confidentiality.....................................................................15
54. Back-Up Generator...................................................................15
55. Signage.............................................................................15
56. Special Tenant Installations........................................................15
57. Category 5 Cabling..................................................................15
58. Miscellaneous.......................................................................15
Exhibit "A" Legal Description
Exhibit "B" Floor Plan of Premises
Exhibit "C" Holidays
Exhibit "D" Leasehold Improvements Agreement
Exhibit "E" Acceptance of Premises Memorandum
Exhibit "F" Building Rules and Regulations
Rider No. 101 Parking Facilities
Rider No. 102 Tenant's Option to Renew
Rider No. 103 Expansion Option
Rider No. 104 Right of First Refusal
Rider No. 106 Schedule of Base Rental
LEASE AGREEMENT
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THIS LEASE AGREEMENT (the "LEASE") is made and entered into as of the
_____ day of October, 2000, by and between WIREDZONE PROPERTY, L.P. ("LANDLORD")
and COMBIMATRIX CORPORATION, a Delaware corporation ("TENANT").
1. DEFINITIONS AND BASIC PROVISIONS. The definitions and basic provisions
set forth in the Basic Lease Information (the "BASIC LEASE INFORMATION")
executed by Landlord and Tenant contemporaneously herewith are incorporated
herein by reference for all purposes. The additional terms defined below shall
have the respective meanings stated when used elsewhere in this Lease, and such
terms and the following basic provisions constitute an integral part of this
Lease:
(a) "NORMAL BUSINESS HOURS": From 7:00 a.m. until 6:00 p.m. on
weekdays (except Holidays, as defined on Exhibit "C" attached hereto and
made a part hereof for all purposes) and 7:00 a.m. until 12:00 p.m. on
Saturdays (except Holidays). Tenant shall have access to the Building and
its Common Facilities (including, without limitation, the freight
elevators, shipping and receiving docks, cafeteria and fitness room) on a
24 hours per day, 7 days a week basis; subject, however, to reasonable
limitations resulting from Landlord's access control systems implemented
for security purposes. Note that Tenant shall also have access to the
Building's conference room facilities on a reservation and cost basis on
the same terms available to other tenants as established by Landlord in
Landlord's reasonable discretion.
(b) "RENTABLE SPACE": (per BOMA 1996 standards) (i) in the case of
a single tenancy floor, all floor area measured at the floor from the
inside surface of the outer glass line of the Building to the inside
surface of the opposite outer glass line excluding only the areas (the
"SERVICE AREAS") used for Building stairs, fire towers, elevator shafts,
flues, vents, stacks, major pipe shafts and vertical ducts (which Service
Areas shall be measured from the outside face of walls enclosing such
Service Areas), but including any such Service Areas which are for the
specific use of the particular tenant such as special stairs or
elevators, plus an allocation of the square footage of the Building's
elevator machine rooms, mechanical and electrical rooms, and public
lobbies, and (ii) in the case of a floor to be occupied by more than one
tenant, all floor areas within the inside surface of the outer glass
walls enclosing the Premises and measured to either (A) the mid-point of
the walls separating areas leased by or held for lease to other tenants
and/or (B) to the tenant's side of walls adjacent to corridors, elevator
foyers, restrooms, mechanical rooms, janitor closets, vending areas and
other similar facilities for the use of all tenants on the particular
floor (hereinafter sometimes called the "COMMON AREAS"), but including a
proportionate part of the Common Areas located on such floor based upon
the ratio which the tenant's rentable space (excluding Common Areas) on
such floor bears to the aggregate rentable space (excluding Common Areas)
on such floor, or other reasonable basis mutually agreed to by Landlord
and Tenant, plus an allocation of the square footage of the Building's
elevator machine rooms, mechanical and electrical rooms, and public
lobbies. No deductions from Rentable Space shall be made for columns or
projections necessary to the Building. The Rentable Space in the Premises
has been calculated on the basis of the foregoing definition and is
hereby stipulated for all purposes hereof to be as stated in the Basic
Lease Information, whether the same should be more or less as a result of
minor variations resulting from actual construction and completion of the
Premises for occupancy so long as such work is done in substantial
accordance with the terms and provisions hereof. Notwithstanding anything
to the contrary contained herein, the standard of measurement utilizes a
load factor of 15%.
(c) "RIDER": Collectively, Rider No(s). 101, 102, 103, 104 and
106, which are attached hereto, contain additional provisions of this
Lease, and are hereby incorporated in, and made a part of, this Lease.
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(d) "EXHIBITS": The following Exhibits are attached to and made a
part of this Lease for all purposes:
A - Land
B - Floor Plan of Premises
C - Holidays
D - Leasehold Improvements Agreement
E - Acceptance of Premises Memorandum
F - Building Rules and Regulations
2. LEASE OF PREMISES. In consideration of the obligation of Tenant to pay
rent as herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord hereby demises and leases to Tenant, and Tenant
hereby leases and takes from Landlord, the Premises, together with the right to
use in common with others the Common Areas, for the Lease Term specified herein,
all upon and subject to the terms and conditions set forth herein. This Lease
and the obligations of Landlord hereunder are conditioned upon faithful
performance by Tenant of all of the agreements and covenants herein set out and
agreed to by Tenant. Tenant agrees and acknowledges that there is excluded from
Tenant's use of the Premises (whether the Premises are or include one or more
full floors within the Building) and Landlord hereby expressly reserves for its
sole and exclusive use, any and all mechanical, electrical, telephone and
similar rooms, janitor closets, elevator, pipe and other vertical shafts and
ducts, flues, stairwells, any area above the acoustical ceiling, and any other
areas not specifically shown on Exhibit "B" as being part of the Premises.
Landlord acknowledges that Paragraph 56 of this Lease identifies certain special
installations by Tenant that shall require access to some of the aforementioned
Service Areas and to the extent such special installations are approved as part
of Tenant's Approved Working
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Drawings and Section 56 of this Lease, Tenant shall also have access to such
areas on a non-exclusive basis and in coordination with Landlord's on-site
property manager.
3. SERVICES BY LANDLORD. Landlord agrees to furnish the following
services to the Premises, as long as Tenant is not in default of a material
obligation under this Lease, all of such services to be at Landlord's cost and
expense except as specifically provided to the contrary elsewhere in this Lease:
(a) Cold water (at the normal temperature of the supply of water
to the Building) for Tenant's laboratory use and lavatory, water fountain
and toilet purposes, and hot water (from the regular Building supply at
prevailing temperatures) for lavatory purposes, all of such water service
to be supplied from the regular supply of water to the Building at points
of supply provided for general use of tenants of the Building through
fixtures installed by Landlord or by Tenant with Landlord's consent which
consent shall not be unreasonably withheld, conditioned or delayed;
provided, however, nothing contained herein shall require Landlord to
furnish hot water to any kitchen, bar or other such lavatory facility in
the Premises. Tenant acknowledges that to the extent Tenant's laboratory
use results in an excessive level of water being used by Tenant as
compared to other tenants in the Building, that Landlord may require the
Premises' water consumption to be separately metered, at Tenant's cost,
and for Tenant to thereafter reimburse Landlord directly for Tenant's
water usage in the Premises.
(b) Heated and refrigerated air conditioning in season during
Normal Business Hours, and at such temperature and in such amounts as are
reasonably considered by Landlord to be standard. Such services at all
other times shall be furnished only at the request of Tenant, who shall
bear the entire cost thereof. Whenever machines or equipment that
generate abnormal heat and affect the temperature otherwise maintained by
the air conditioning system are used in the Premises, Landlord shall have
the right to install supplemental air conditioning units in the Premises,
and the cost thereof, including the cost of installation, operation, use
and maintenance, shall be paid by Tenant to Landlord from time to time
promptly on demand. The hourly charge for heating, ventilation and air
conditioning ("HVAC") overtime usage shall be an amount equal to the
actual cost associated with providing such overtime HVAC plus an
administrative charge of 15%. Notwithstanding the foregoing, Tenant shall
not be charged for HVAC overtime usage while and to the extent either the
existing 80-ton chiller is (1) operating during Normal Business Hours or
(2) dedicated solely for Tenant's use. Tenant shall have a four (4) month
option period following the Commencement Date in which to request that
Landlord dedicate for Tenant's sole use the existing 80-ton chiller in
connection with Tenant's activities on the second floor of the Building
and upon demonstrating reasonable basis for such need, Landlord shall use
its best efforts to so dedicate the chiller; provided, however, Tenant
shall be solely responsible for the costs associated with using,
maintaining and repairing same. Tenant shall reimburse Landlord on a
monthly basis for all such costs associated therewith and Tenant
acknowledges that Landlord will perform such maintenance and repair
obligations. Tenant acknowledges that the costs associated with using,
maintaining and repairing any of the HVAC systems related to all of
Tenant's "clean room" facilities shall be Tenant's sole cost and
responsibility.
(c) Operatorless passenger elevator service in common with other
tenants for ingress and egress from the Premises, provided that Landlord
may reasonably limit the number of elevators to be in operation at times
other than Normal Business Hours, and service elevator(s) in common with
other tenants but only when scheduled through the management of the
Building.
(d) Such janitorial cleaning services as may, in the reasonable
judgment of Landlord, be standard for office use.
(e) Electric current in the manner and to the extent deemed by
Landlord to be standard for the Building, but in no event less than 7
watts per square foot (i.e., 5 watts for power and 2 watts for Building
standard lighting).
(f) Security services which shall consist of two security
personnel during Normal Business Hours and one security person at all
other times, with such personnel to be primarily stationed in the main
entrance of the Building's lobby.
(g) Food services in the Building's common cafeteria at such time
as either (1) the Building is 75% occupied or (2) Tenant and other
tenants at the Building have, in the aggregate, over 500 employees
located at the Building. Prior to such time, Landlord will use its good
faith efforts to provide or facilitate lunch catering services to Tenant.
Except as provided hereinbelow, failure to any extent to furnish or any
stoppage of these defined utilities and services resulting from any cause
whatsoever shall not render Landlord liable in any respect for damages to either
person, property or business, nor be construed as an eviction of Tenant, nor
entitle Tenant to any abatement of rent, nor relieve Tenant from fulfillment of
any covenant or agreement contained herein. Except as provided hereinbelow,
should any malfunction of the Building improvements or facilities (which by
definition do not include any improvements or facilities of Tenant) occur for
any reason, Landlord shall use reasonable diligence to repair same promptly, but
Tenant shall have no claim for rebate or abatement of rent or damages on account
of such malfunction or of any interruptions in service occasioned thereby or
resulting therefrom. Notwithstanding the foregoing, in the event such stoppage
or interruption of utilities or services exists for more than seven (7)
consecutive days and is the result of a cause other than (i) a fire or casualty
which shall be controlled by Section 22 of this Lease, (ii) the actions of
Tenant or its agents, servants, contractors, employees, business invitees or
guests, or (iii) force majeure as described in Section 46 of this Lease,
Tenant's rental (including Base Rental and Additional Rental, as defined below)
shall abate to the extent any portion of the Premises is rendered untenantable
(for purposes
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hereof untenantable shall include lack of HVAC services, electrical services and
elevator service which materially interferes with Tenant's enjoyment of the
Premises). In addition, notwithstanding anything to the contrary contained
herein, following such seven (7) consecutive day period (but as limited by
clauses (i), (ii) and (iii) above), Tenant shall also be entitled to pursue a
suit for specific performance and/or damages against Landlord. Notwithstanding
anything to the contrary contained herein, in the event of stoppage or
interruption of utilities or services, or the malfunction of Building
improvements (other than improvements installed by Tenant) or facilities, as
more fully described above (but as limited by clauses (i), (ii) and (iii)
above), which shall continue for seven (7) consecutive days, Tenant shall have
all rights and remedies available and provided under the laws of the State of
Washington.
4. ADDITIONAL RENTAL.
(a) In addition to Base Rental, Tenant shall during the Lease
Term, pay an amount per square foot of Rentable Space within the Premises
("TENANT'S ADDITIONAL RENTAL") equal to Tenant's Proportionate Share of
the Operating Expenses. Prior to the commencement of each calendar year
of Tenant's occupancy, Landlord may make a good faith estimate of the
anticipated amount of Tenant's Additional Rental ("TENANT'S FORECAST
ADDITIONAL RENTAL") and Tenant agrees to pay Tenant's Forecast Additional
Rental in equal monthly installments in advance and without demand on the
first day of each calendar month during and throughout the Lease Term and
any renewal or extension thereof, subject to adjustment of Tenant's
Forecast Additional Rental pursuant to any audit conducted pursuant to
Paragraph 4(c) hereof.
(b) Within one hundred fifty (150) days after the end of each
calendar year during the Lease Term and any renewal or extension thereof,
or as soon as reasonably possible thereafter, Landlord shall provide
Tenant a statement showing the Operating Expenses for said calendar year
and a statement prepared by Landlord comparing Tenant's Forecast
Additional Rental theretofore paid by Tenant with Tenant's Additional
Rental. In the event that Tenant's Forecast Additional Rental paid by
Tenant exceeds Tenant's Additional Rental for said calendar year,
Landlord, at Landlord's option, shall either pay Tenant an amount equal
to such excess by direct payment to Tenant within thirty (30) days of the
date of such statement, or credit such excess payment against the next
accruing installment(s) of Tenant's Forecast Additional Rental. In the
event that the Tenant's Additional Rental exceeds Tenant's Forecast
Additional Rental for said calendar year, Tenant shall pay Landlord,
within thirty (30) days of receipt of the statement, an amount equal to
such difference. Such obligation of Landlord to refund and of Tenant to
pay shall survive expiration or termination of this Lease. Subject to the
right of Tenant to audit set forth in Section 4(c) below, Landlord's
statement showing Operating Expenses shall be conclusive and binding for
all purposes on Tenant as to any and all items contained therein to which
Tenant has not objected in writing to Landlord within thirty (30) days
after Tenant's receipt of such statement, which writing shall specify
each item objected to and the detailed reason for each such objection.
(c) Tenant at its sole expense shall have the right during the
Lease Term, but no more frequently than once per calendar year following
prior written notice to Landlord, to audit Landlord's books and records
relating to Operating Expenses, or at Landlord's sole election, Landlord
will provide at Tenant's reasonable expense a copy of such audit prepared
by an independent certified public accountant.
(d) The term "OPERATING EXPENSES" shall mean all costs of
management, operation (specifically including the cost of electricity to
the common areas of the Building and related improvements but not to any
tenants' premises which are submetered), and maintenance of the Land, the
Building, and all other improvements on the Land and any and all
appurtenances thereto (the "COMMON FACILITIES"), all accrued and based on
an annual period consisting of a calendar year. By way of illustration
but not limitation, Operating Expenses shall include expenditures for
maintenance and repairs not otherwise paid for by tenants; amortization
of any capital expenditures in accordance with generally accepted
accounting practices and principles which are incurred by Landlord to (i)
attempt to effect a reduction in the Operating Expenses of the Building,
or (ii) keep the Building in compliance with all applicable governmental
rules and regulations from time to time, which the Building is not
otherwise in compliance with; assessments and governmental charges
(including taxes on rents or services); ad valorem property taxes with
respect to the Land and/or the Building or any part of either thereof;
charges for water, sewerage, and gas; cleaning, including supplies,
janitorial services and pest control; licenses, permits and inspection
fees; fiber connectivity and related telecommunications charges (but not
the cost for upgrading of such for the benefit of new tenants at the
Building after the Commencement Date); refuse collection; security
services; insurance; costs and expenses related to the maintenance and
operation of the Building's freight elevator, shipping and receiving
areas, common cafeteria (or the alternative catering services described
above), fitness facilities and conference facilities; administrative
expenses relating to the Building, including salaries, benefits, taxes
and other expenses for labor and management, office equipment, telephone,
and supplies; management fees payable by Landlord with respect to the
Land, Building and Common Facilities; fire protection; snow and ice
removal; landscape maintenance; professional services (including legal,
property-related consulting and accounting expenses); and security
services. The following shall be excluded from Operating Expenses:
depreciation; capital expenditures other than those referenced in the
previous sentence; cost of Building alterations or renovations for other
tenants in the Building; advertising; commissions or fees paid for
leasing; cost of repairs occasioned by fire, windstorm, or other casualty
(but only to the extent reimbursed by insurance proceeds); and wages,
salaries, or other compensation paid to any executive above the grade of
building manager; interest on debt or amortization payments on any
mortgage or mortgages or rental under any ground or underlying leases or
lease, if any; all services for which any tenant of the Building
specifically reimburses Landlord or for which Tenant pays directly to
third persons; and costs (including penalties, fines and associated legal
expenses) incurred due to the violation by Landlord for the terms and
conditions of the Lease, or any applicable federal, state and local
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governmental laws, ordinances, orders, rules and regulations, which costs
would not have been incurred but for such violation by Landlord.
5. ELECTRICITY. Tenant shall be solely responsible for the costs of
electrical consumption within the Premises ("ELECTRICITY") and will reimburse
Landlord on a monthly basis (at the actual cost for such service without mark-up
by Landlord following Landlord's reading of such meters) for such electrical
consumption. Without in any way limiting Tenant's responsibility for
Electricity, Tenant shall not without the express prior written consent of
Landlord use electric current in excess of the capacity of the feeders or lines
to the Building or the Premises. Tenant shall be responsible for all costs
associated with separate metering of Electricity for the Premises, including,
but not limited to, the cost of installing, maintaining, repairing and reading
the separate metering devices and subpanels. Tenant acknowledges that the cost
to provide, install and maintain submeters shall be at Tenant's sole expense.
6. PAYMENTS AND PERFORMANCE. Tenant agrees to pay all rents and sums
provided to be paid by Tenant hereunder at the times and in the manner herein
provided, without any setoff, deduction or counterclaim whatsoever except as may
otherwise be provided in Section 3 above. Should this Lease commence on a day
other than the first day of a calendar month or terminate on a day other than
the last day of a calendar month, the rent for such partial month shall be
proportionately reduced. The Base Rental for the first partial month, if any,
shall be payable at the beginning of said period or as Prepaid Rental. The
obligation of Tenant to pay such rent is an independent covenant, and except as
provided in Section 3 above, no act or circumstance whatsoever, whether such act
or circumstance constitutes a breach of covenant by Landlord or not, shall
release Tenant from the obligation to pay rent. Time is of the essence in the
performance of all of Tenant's and Landlord's obligations hereunder. Any amount
that becomes owing by Tenant to Landlord hereunder shall bear interest at the
rate of 15% per annum from the due date until paid. In addition, at Landlord's
option, but only to the extent allowed by applicable law and not in excess of
the amount allowed by applicable law, Tenant shall pay a late charge in the
amount (as solely determined by Landlord) of five percent (5%) of any
installment of rental hereunder which is not paid within five (5) days of the
date on which it is due in order to compensate Landlord for the additional
expense involved in handling delinquent payments.
7. TENANT PLANS AND SPECIFICATIONS - INSTALLATION OF IMPROVEMENTS. Tenant
shall install or cause to be installed in the Premises substantially all of the
improvements shown on the Approved Working Drawings (as defined in Exhibit "D"
attached hereto) upon the terms and conditions set forth in the Leasehold
Improvements Agreement attached hereto as Exhibit "D" and made a part hereof
(subject, however, to the change order provisions set forth therein).
8. COMPLETION OF IMPROVEMENTS AND COMMENCEMENT OF RENT. By moving into
the Premises or taking possession thereof, Tenant accepts the Premises as
suitable for the purposes for which the same are leased and accepts the Building
and every appurtenance thereof, and waives any and all defects therein (other
than latent defects) and on request from Landlord, Tenant shall promptly execute
and deliver to Landlord an Acceptance of Premises Memorandum in the form
attached hereto as Exhibit "E" and made a part hereof for all purposes.
9. RELOCATION OF PREMISES. [Intentionally Deleted]
10. REPAIRS AND REENTRY. Tenant will, at Tenant's own cost and expense,
maintain and keep the Premises and any alterations and additions thereto in
sound condition and good repair, and shall pay for the repair of any damage or
injury done to the Building or any part thereof (not otherwise covered by the
property insurance to be maintained by Landlord on the Building, excluding
Tenant's Premises) by Tenant or Tenant's agents, employees and invitees;
provided, however, that Tenant shall make no repairs to the Premises without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding the foregoing, in the event
Landlord's property insurance is used to repair any damage or injury done to the
Building (excluding Tenant's Premises for which Tenant's property insurance
shall be used) by Tenant or Tenant's agents, employees and invitees, Tenant
shall (i) pay the deductible associated with such repairs, (ii) pay all amounts
in excess of insurance proceeds available for such repairs, and (iii) pay for
any increase Landlord incurs in its premium for such coverage as a direct result
of insurance proceeds being used to fund Tenant's repair obligations. The
performance by Tenant of its obligation to maintain and make repairs shall be
conducted only by contractors approved by Landlord after plans and
specifications therefor have been approved by Landlord. Tenant will not commit
or allow any waste or damage to be committed on any portion of the Premises, and
upon the termination of this Lease by lapse of time or otherwise, Tenant shall
deliver up the Premises to Landlord in as good condition as at date of
possession, ordinary wear and tear excepted. Upon such termination of this
Lease, Landlord shall have the right to reenter and resume possession of the
Premises. Notwithstanding the foregoing provisions of this Paragraph 10, any
repairs to the Premises or the Building that are necessitated because of any
damage caused by fire or other casualty shall be governed by the provisions of
Paragraph 22 below. Landlord shall be responsible for maintenance to the
exterior, structural and Common Areas of the Building (e.g., the structural
roof, roof membrane, walls and foundation and utilities serving the Building
and/or located outside Tenant's Premises). Notwithstanding the foregoing,
Landlord may, as provided in Section 4(d) of this Lease, include the cost of
normal repair and maintenance items in the Building's Operating Expenses and
shall be reimbursed for same to the extent of Tenant's Proportionate Share.
Landlord represents and warrants that to the best of its knowledge as of the
date hereof, all Building systems (i.e., HVAC system, elevators, electrical
system, plumbing system, fire prevention system), structural components of the
Building, roofs and foundations are in good working order as of the Commencement
Date of this Lease.
11. ASSIGNMENT AND SUBLETTING. In the event that Tenant desires to
encumber this Lease, assign this Lease or sublet all or any part of the Premises
or grant any license, concession or other right of occupancy of any portion of
the Premises, Tenant shall notify Landlord in writing and shall state the name
of the proposed assignee, sublessee or other transferee and the terms of the
proposed assignment, sublease or transfer. Tenant shall also
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provide financial information and state and provide information requested by
Landlord as to the nature and character of the business of the proposed
assignee, sublessee or transferee. Tenant shall not assign or mortgage this
Lease or any right hereunder or interest herein, and Tenant shall not sublet the
Premises in whole or in part or grant any license, concession or other right of
occupancy of any portion of the Premises, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, delayed or
conditioned based upon Landlord's reasonable determination of the
creditworthiness and nature and character of the business of the proposed
assignee, sublessee or transferee. Any such assignment, mortgage or subletting
without such consent shall be void and shall, at the sole option of Landlord, be
deemed an event of default by Tenant under this Lease. Notwithstanding any
assignment or subletting consented to by Landlord, Tenant and any guarantor of
Tenant's obligations under this Lease and each assignee shall at all times
remain jointly and severally fully responsible and liable for the payment of the
rent herein specified and for compliance with all of Tenant's other covenants
and obligations under this Lease. No consent to any assignment or mortgage of
this Lease or any subletting of the Premises shall constitute a waiver of the
provisions of this Paragraph except as to the specific instance covered thereby.
In the event that the monthly rental per square foot of space subleased which is
payable by any sublessee to Tenant shall exceed the monthly rental per square
foot for the same space payable for the same month by Tenant to Landlord
(including any bonuses or any other consideration paid directly or indirectly by
the sublessee to Tenant), Tenant shall be obligated to pay fifty percent (50%)
of the amount of such excess to Landlord as additional rent hereunder within
five (5) days of the date it is received by Tenant from the sublessee. In the
event Tenant shall receive any consideration from an assignee other than the
assumption by the assignee of Tenant's obligations hereunder, Tenant shall be
obligated to pay fifty percent (50%) of the amount of such consideration to
Landlord as additional rent hereunder on the same date it is received by Tenant.
Landlord, at Landlord's option, may elect to require that rental payable by any
sublessee be paid directly to Landlord and offset Tenant's rent obligations
accordingly. At no time during the Lease Term shall Tenant be entitled to (i)
advertise the Premises for sublease without the prior written consent of
Landlord, such consent not to be unreasonably withheld, (ii) market the Premises
for sublease to another tenant of the Building or person or entity with whom
Landlord is negotiating to lease space in the Building, and (iii) market the
Premises for sublease at a rate less than the fair market value of the Premises.
Any transfer by operation of law shall also constitute an assignment prohibited
by this Paragraph 11. Tenant shall reimburse Landlord, on demand, for its
reasonable attorneys' fees and other expenses incurred in connection with
considering any request for Landlord's consent to an assignment or sublease of
the Premises.
Notwithstanding anything to the contrary hereinabove, Tenant may assign
or sublet the Premises to a subsidiary or affiliate under common ownership or
control of Tenant, or to any entity merging with or into Tenant (collectively,
"Affiliated Assignment"), without any further action by Landlord and such action
shall be deemed a permitted assignment or subletting subject to the provisions
hereunder so long as (i) the original Tenant and the transferee tenant shall be
jointly and severally liable for the performance of the Lease obligations and
(ii) the Permitted Use, creditworthiness and business character of the
transferee tenant following such transfer or merger is comparable with Tenant's
use, business character and creditworthiness prior to such transfer or merger.
In addition, the following types of transactions shall not be deemed assignments
or transfers for purposes of this Paragraph 11 for which Landlord's prior
written consent must be obtained; provided, however, that the limitations set
forth in clauses (i) and (ii) above shall still be applicable: (a) the sale or
issuance of stock or other securities of the Tenant to a new investor or
investors, even if such sales or issuance results in a change of control and/or
a change in management; (b) the sale or other transfer by Tenant's present
parent corporation of all or any portion of the stock of Tenant, even if such
sale or transfer results in a change of control and/or a change in management;
or (c) the sale or issuance of stock or other securities of the Tenant in a
public offering or as a part of a private placement to raise additional capital
or create liquidity for investors.
12. ALTERATIONS AND ADDITIONS BY TENANT. Tenant shall make no alterations
in or additions to the Premises without the prior written consent of Landlord
which shall not be unreasonably withheld, conditioned or delayed. All
alterations, additions, and improvements made to or fixtures or improvements
placed in or upon the Premises by either party (except only moveable trade
fixtures of Tenant) if not otherwise identified within thirty (30) days of
installation by Tenant as removable upon execution of the Lease (or otherwise
required to be removed by Landlord as a condition to its consent to such
alteration or addition) shall be deemed a part of the Building and the property
of Landlord at the time they are placed in or upon the Premises, and they shall
remain upon and be surrendered with the Premises as a part thereof at the
termination of this Lease, unless Landlord shall elect otherwise, whether such
termination shall occur by the lapse of time or otherwise. In the event Landlord
shall elect that certain alterations, additions and improvements made by Tenant
in the Premises shall be removed by Tenant, Tenant shall remove them and Tenant
shall restore the Premises to its original condition, at Tenant's own cost and
expense, prior to the termination of the Lease Term. Alterations and additions
to the Premises will be performed by Landlord (unless otherwise designated by
Landlord) at Tenant's cost and expense. Tenant acknowledges that Landlord's
approval of any alterations or additions shall not be a representation by
Landlord that such alterations, additions or improvements comply with applicable
laws. The initial alterations and additions to the Premises by Tenant shall be
controlled by the terms and conditions of the Leasehold Improvements Agreement
attached hereto. In connection with such initial improvements, Tenant shall have
the right to pursue Landlord's permission to construct certain special
installations as more particularly described in Paragraph 56 below.
13. LEGAL USE; VIOLATIONS OF INSURANCE COVERAGE; NUISANCE. Tenant will
not occupy or use any portion of the Premises for any purpose other than the
Sole Permitted Use or for any purpose which is unlawful or which, in the
reasonable judgment of Landlord, is unduly hazardous due to risk of fire,
explosion or other casualty, nor permit anything to be done which will in any
way (i) increase the rate of fire and casualty insurance on the Building or its
contents, or (ii) create unreasonable elevator loads or otherwise interfere with
standard Building operations, or (iii) affect the structural integrity or design
capabilities of the Building or (iv) result in the storage of any hazardous
materials or substances at the Building except as permitted by law and the
express terms and conditions of this Lease. In the event that, by reason of any
act or conduct of business of Tenant, there shall be any increase in the rate of
insurance on the Building or its contents created by Tenant's acts or conduct of
business, then
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Tenant hereby agrees to pay Landlord the amount of such increase on demand.
Tenant shall not erect, place, or allow to be placed any sign, advertising
matter, stand, booth or showcase in, upon or visible from the vestibules, halls,
corridors, doors, outside walls, outside windows or pavement of the Building or
the Land without the prior written consent of Landlord. Tenant will conduct its
business, and use commercially reasonable efforts to control its agents,
employees, and invitees in such a manner as not to create any nuisance or
interfere with, materially annoy or disturb other tenants or Landlord in the
management of the Building.
14. LAWS AND REGULATIONS. Tenant at its sole expense will maintain the
Premises in a clean, safe and healthful condition and will comply with all laws,
ordinances, orders, rules and regulations of any governmental authority having
jurisdiction over the use, conditions or occupancy of the Premises.
15. INDEMNITY, LIABILITY AND LOSS OR DAMAGE.
(a) Landlord shall not be liable to Tenant or Tenant's agents, employees,
contractors, guests, invitees or any person claiming by, through or under Tenant
for any injury to person, loss of or damage to property, or for loss of or
damage to Tenant's business, occasioned by or through the acts or omissions of
Landlord, or by any cause whatsoever except to the extent arising from or out of
Landlord's negligence or willful wrongdoing. Except to the extent arising from
or out of Landlord's negligence or willful wrongdoing, Landlord shall not be
liable for, and Tenant shall defend and indemnify Landlord and save it harmless
from, all suits, actions, damages, liability and expense in connection with loss
of life, bodily or personal injury or property damage arising from or out of any
occurrence in, upon, at or from the Premises (except for any pre-existing
circumstances, conditions or occurrences in the Premises) or the occupancy or
use by Tenant of the Premises or any part thereof, or occasioned wholly or in
part by any action or omission of Tenant, its agents, contractors, employees,
invitees, or licensees. If Landlord shall be made a party to any action
commenced by or against Tenant, Tenant shall protect and hold Landlord harmless
therefrom and on demand shall pay all costs, expenses, and reasonable attorney's
fees incurred by Landlord in connection therewith. The indemnification
obligations contained in this Paragraph 15 shall not be limited by any worker's
compensation, benefit or disability laws, and each indemnifying party hereby
waives any immunity that said party may have under the Washington Industrial
Insurance Act, Title 51 RCW, and similar worker's compensation, benefit or
disability laws. LANDLORD AND TENANT ACKNOWLEDGE BY THEIR EXECUTION OF THIS
LEASE THAT EACH INDEMNIFICATION PROVISION OF THIS LEASE (INCLUDING, BUT LIMITED
TO, THOSE RELATING TO WORKER'S COMPENSATION, BENEFITS AND LAWS) WAS SPECIFICALLY
NEGOTIATED AND AGREED TO BY LANDLORD AND TENANT).
(b) Tenant shall not be liable to Landlord or Landlord's agents,
employees, contractors, guests, invitees or any person claiming by, through or
under Landlord for any injury to person, loss of or damage to property, or for
loss of or damage to Landlord's business, occasioned by or through the acts or
omissions of Tenant, or by any cause whatsoever except to the extent arising
from or out of Tenant's negligence or willful wrongdoing. Except to the extent
arising from or out of Tenant's negligence or willful wrongdoing, Tenant shall
not be liable for, and Landlord shall defend and indemnify Tenant and save it
harmless from, all suits, actions, damages, liability and expense in connection
with loss of life, bodily or personal injury or property damage arising from or
out of any occurrence in, upon, at or from the Premises or the Building or any
part thereof, or occasioned wholly or in part by any action or omission of
Landlord, its agents, contractors, employees, invitees, or licensees. If Tenant
shall be made a party to any action commenced by or against Landlord, Landlord
shall protect and hold Tenant harmless therefrom and on demand shall pay all
costs, expenses, and reasonable attorney's fees incurred by Tenant in connection
therewith. The indemnification obligations contained in this Paragraph 15 shall
not be limited by any worker's compensation, benefit or disability laws, and
each indemnifying party hereby waives any immunity that said party may have
under the Washington Industrial Insurance Act, Title 51 RCW, and similar
worker's compensation, benefit or disability laws. LANDLORD AND TENANT
ACKNOWLEDGE BY THEIR EXECUTION OF THIS LEASE THAT EACH INDEMNIFICATION PROVISION
OF THIS LEASE (INCLUDING, BUT LIMITED TO, THOSE RELATING TO WORKER'S
COMPENSATION, BENEFITS AND LAWS) WAS SPECIFICALLY NEGOTIATED AND AGREED TO BY
LANDLORD AND TENANT).
16. RULES OF THE BUILDING. Tenant will comply fully, and will use
reasonable efforts to cause Tenant's agents, employees, and invitees to comply
fully with all Rules and Regulations of the Building which are attached hereto
as Exhibit "F" and made a part hereof as though fully set out herein. As more
particularly provided therein, Landlord shall at all times have the right to
change such Rules and Regulations or to amend them in such reasonable manner as
Landlord may deem advisable for the safety, protection, care and cleanliness of
the Building and appurtenances and for preservation of good order therein, all
of which Rules and Regulations, changes and amendments will be forwarded to
Tenant in writing and shall be complied with and observed by Tenant and Tenant's
agents, contractors, employees and invitees.
17. ENTRY FOR REPAIRS AND INSPECTION. Landlord and its agents and
representatives shall have the right following 24 hours prior notice to enter
into and upon any and all parts of the Premises at all reasonable hours (or, in
an emergency, at any hour without prior notice) to inspect same or clean or make
repairs or alterations or additions to the Building and the Premises (whether
structural or otherwise) as Landlord may deem necessary, and during the
continuance of any such work, Landlord may temporarily close doors, entryways,
public spaces and corridors and interrupt or temporarily suspend Building
services and facilities, and subject to the terms and conditions of Paragraph 3
above, Tenant shall not be entitled to any abatement or reduction of rent by
reason thereof. During the Lease Term, Landlord may exhibit the Premises to
prospective purchasers and lenders at reasonable hours and upon 24 hours' prior
notice to Tenant. Furthermore, during the one-year period prior to the
expiration date of this Lease, Landlord and Landlord's agents may exhibit the
Premises to prospective tenants during Normal Business Hours and upon 24 hours'
prior notice to Tenant.
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18. CONDEMNATION. If all of the Premises, or so much thereof as would
materially interfere with Tenant's use of the remainder, shall be taken or
condemned for any public use or purpose by right of eminent domain, with or
without litigation, or be transferred by agreement in connection with or in lieu
of or under threat of condemnation, then the Lease Term and the leasehold estate
created hereby shall terminate as of the date title shall vest in the condemnor
or transferee. If all or any portion of the Building or a material portion of
the Land required for the Building's operation is taken or condemned or
transferred as aforesaid, Landlord or Tenant shall have the option to terminate
this Lease effective as of the date title shall vest in the condemnor or
transferee. Landlord shall receive the entire award from any taking or
condemnation (or the entire compensation paid because of any transfer by
agreement), and Tenant shall have no claim thereto; provided, however, Tenant
shall be entitled to recover in a separate action against such condemning
authority, an award for relocation benefits, if any, and an award with respect
to Tenant's above Building standard finish-out at the Premises.
19. LANDLORD'S LIEN AND SECURITY INTEREST. Landlord shall not have a
landlord's lien of any kind under this Lease.
20. ABANDONED PROPERTY. All personal property of Tenant remaining in the
Premises later than ten (10) days after the termination or expiration of the
Lease Term or after the abandonment of the Premises by Tenant may be treated by
Landlord as having been abandoned by Tenant and Landlord may, at its option and
election, thereafter take possession of such property and either (i) declare
same to be the property of Landlord, or (ii) at the cost and expense of Tenant,
store and/or dispose of such property in any manner and for whatever
consideration that Landlord, in its sole discretion, shall deem advisable.
Except as otherwise provided in a prior notification from Tenant to Landlord
providing a reasonable explanation that Tenant is not abandoning the Premises,
Tenant shall be presumed conclusively to have abandoned the Premises if the
amount of Tenant's property removed by Tenant from the Premises is substantial
enough to indicate a probable intent to abandon the Premises and such removal is
not in the normal course of Tenant's business, or if Tenant removes any material
amount of Tenant's personal property from the Premises at a time when Tenant is
in default in the payment of rental due hereunder or in the performance of any
other obligation of Tenant hereunder and such removal is not in the normal
course of Tenant's business.
21. HOLDING OVER. Should Tenant continue to hold the Premises after this
Lease terminates, whether by lapse of time or otherwise, such holding over
shall, unless otherwise agreed by Landlord in writing, constitute and be
construed as a tenancy from month to month at a rental equal to the greater of
(i) 150% of the amount of the monthly rental payable during the last month prior
to the termination of this Lease or (ii) 150% of the rate for which similar
space in the Building is then being leased by Landlord, and upon and subject to
all of the other terms and provisions set forth herein except any right to renew
this Lease, expand the Premises or lease additional space. This provision shall
not be construed, however, as permission by Landlord for Tenant to holdover. No
payments of money by Tenant to Landlord after the termination of this Lease
shall reinstate, continue, or extend the Lease Term and no extension of this
Lease after the termination hereof shall be valid unless and until the same
shall be reduced to writing and signed by both Landlord and Tenant. Tenant shall
be liable to Landlord for all damage which Landlord shall suffer by reason of
any holding over by Tenant, and Tenant shall indemnify and hold Landlord
harmless against all claims made by any other tenant or prospective tenant
against Landlord resulting from delay by Landlord in delivering possession of
the Premises (or any portion thereof) to such other tenant or prospective
tenant.
22. FIRE AND CASUALTY.
(a) If the Premises are damaged by fire or other casualty and if
such damage is not susceptible of repair within two hundred seventy (270)
days (as estimated, as soon as reasonably practicable after the
occurrence of such damage, by an architect of recognized good reputation
selected by Landlord), then in such event this Lease, at the option of
either Landlord or Tenant, exercised by giving written notice thereof to
the other within thirty (30) days after receipt of such written estimate
of the architect so selected, shall terminate as of the date of such
loss, and Tenant shall pay the rent hereunder apportioned to the time of
such loss and shall pay all other obligations of Tenant owing on the date
of termination, and Tenant shall have no longer than thirty (30) days in
which to surrender the Premises to Landlord.
(b) If the damage described above is susceptible of repair within
two hundred seventy (270) days, or if the damage is not susceptible of
repair within two hundred seventy (270) days but Landlord and Tenant fail
to exercise the option to terminate this Lease, and so long as Landlord
does not elect to terminate this Lease pursuant to Subparagraph (c)
below, Landlord shall enter and make the necessary repairs without
affecting this Lease, but the rent hereunder shall be reduced or abated
as shall be equitable, in the good faith judgment of Landlord, until such
repairs are made, unless such damage has been so slight that Tenant's
occupancy of the Premises is not materially interfered with, in which
case the rent hereunder shall not be abated or reduced. Notwithstanding
the foregoing, Landlord shall have the option to terminate this Lease and
shall not be obligated to repair the Premises or the Building if the
damage is not covered by insurance or if Landlord's mortgagee applies any
portion of the insurance proceeds to the unpaid balance of its loan.
(c) In the event the Building is so badly damaged or injured by
fire or other casualty, even though the Premises may not be affected,
that Landlord decides, within ninety (90) days after such damage, not to
rebuild or repair the Building (such decision being vested exclusively in
the discretion of Landlord), then in such event Landlord shall so notify
Tenant in writing and this Lease shall terminate as of the date specified
for termination in the notice from Landlord to Tenant, and Tenant shall
pay rent hereunder apportioned to the date of such termination and shall
pay all other obligations of Tenant owing on the date of termination, and
Tenant shall have no longer than thirty (30) days in which to surrender
the Premises to Landlord.
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(d) Notwithstanding the foregoing provisions of this Paragraph 22,
Tenant agrees that if the Premises or any other portion of the Building
is damaged by fire or other casualty resulting from the fault or
negligence of Tenant or any of its agents, employees, or invitees, then
the cost of restoring the property damage in excess of the policy limits
of the property insurance proceeds which Landlord is required to maintain
under this Lease shall be paid by Tenant within thirty (30) days
following demand, and there shall be no abatement of rent before or
during the repair of such damage.
23. ENTIRE AGREEMENT AND AMENDMENT; NO REPRESENTATIONS OR WARRANTIES; NO
MEMORANDUM OF LEASE. This Lease contains the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes any and
all prior and contemporaneous agreements, understandings, promises, and
representations made by either party to the other concerning the subject matter
hereof and the terms applicable hereto. It is expressly agreed by Tenant, as a
material consideration to Landlord for the execution of this Lease, that there
have been no representations, understandings, stipulations, agreements or
promises pertaining to the Premises, the Building or this Lease not incorporated
in writing herein. This Lease shall not be altered, waived, amended or extended,
except by a written agreement signed by the parties hereto, unless otherwise
expressly provided herein. LANDLORD'S DUTIES AND WARRANTIES ARE LIMITED TO THOSE
SET FORTH IN THIS LEASE, AND SHALL NOT INCLUDE ANY IMPLIED DUTIES OR WARRANTIES,
ALL OF WHICH ARE HEREBY DISCLAIMED BY LANDLORD AND WAIVED BY TENANT. LANDLORD
AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE
SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE, AND EXCEPT AS OTHERWISE
PROVIDED IN PARAGRAPH 3, TENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT
DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF
ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN,
TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, SETOFF OR DEDUCTION,
NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER,
WHETHER EXPRESS OR IMPLIED. Neither this Lease nor a memorandum of this Lease
shall be recorded in the public records of the county in which the Building is
located without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion. Notwithstanding anything to the contrary set forth
in this Paragraph 23, Landlord hereby represents and warrants to Tenant as
follows: (a) Landlord has fee simple title to the Land and the Building, (b)
Landlord has been duly authorized to enter into this Lease, and (c) the persons
signing this Lease on Landlord's behalf have been duly authorized to do so by
appropriate resolution and consent.
24. TRANSFER OF LANDLORD'S RIGHTS. In the event Landlord transfers its
interest in the Building, Landlord shall thereby automatically be released from
any further obligations hereunder if Landlord transfers the Security Deposit to
such transferee and such transferee agrees to expressly assume all obligations
of Landlord hereunder, and Tenant agrees to look solely to the successor in
interest of Landlord for the performance of such obligations.
25. DEFAULT.
(a) The following events shall be deemed to be events of default
(herein so called) by Tenant under this Lease:
(i) Tenant shall fail to pay any rental or other sum
payable by Tenant hereunder as and when such rental or other sum
becomes due and payable; provided, however, that Tenant shall be
entitled to receive, three (3) times each calendar year, a written
notice of such failure from Landlord and a five (5) day period
thereafter to cure such payment default;
(ii) Tenant shall fail to comply with any other provision,
condition or covenant of this Lease and any such failure is not
cured within thirty (30) days after Landlord gives written notice
of such failure to Tenant; provided, however, Tenant shall not be
deemed to have failed to comply hereunder if such default cannot
be cured within said thirty (30) days and Tenant is diligently
proceeding to do so;
(iii) Tenant shall desert or vacate any substantial portion
of the Premises;
(iv) Tenant shall assign this Lease or sublet all or any
part of the Premises or grant any license, concession or other
right of occupancy of any portion of the Premises, without the
prior written consent of Landlord except as permitted by the terms
of Paragraph 11 of this Lease;
(v) Any petition shall be filed by or against Tenant or any
guarantor of Tenant's obligations under this Lease pursuant to any
section or chapter of the present federal Bankruptcy Act or under
any future federal Bankruptcy Act or under any similar law or
statute of the United States or any state thereof (which as to any
involuntary petition shall not be and remain discharged or stayed
within a period of thirty (30) days after its entry), or Tenant or
any guarantor of Tenant's obligations under this Lease shall be
adjudged bankrupt or insolvent in proceedings filed under any
section or chapter of the present federal Bankruptcy Act or under
any future federal bankruptcy act or under any similar law or
statute of the United States or any state thereof;
(vi) Tenant or any guarantor of Tenant's obligations under
this Lease shall become insolvent or make a transfer in fraud of
creditors;
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(vii) Tenant or any guarantor of this Lease shall make an
assignment for the benefit of creditors; or
(viii) A receiver or trustee shall be appointed for Tenant
or any guarantor of this Lease or for any of the assets of Tenant
or any guarantor of this Lease.
(b) Upon the occurrence of any event of default, Landlord shall
have the option to do any one or more of the following without any
further notice or demand, in addition to and not in limitation of any
other remedy permitted by law or by this Lease:
(i) Enforce, by all legal suits and other means (including
both judicial and non-judicial means to the extent provided under
applicable Washington law), its rights hereunder, including the
collection of Base Rental, Tenant's Additional Rental and other
sums payable by Tenant hereunder and the reimbursement for all
unamortized tenant allowances and concessions, without reentering
or resuming possession of the Premises and without terminating
this Lease.
(ii) Terminate this Lease by issuing written notice of
termination to Tenant, in which event Tenant shall immediately
surrender the Premises to Landlord, but if Tenant shall fail to do
so, Landlord may without notice and without prejudice to any other
remedy Landlord may have, enter upon and take possession of the
Premises and expel or remove Tenant and its effects without being
liable to prosecution or any claim for damages therefor, and upon
any such termination, Tenant agrees that in addition to its
liability for the payment of arrearages of Base Rental, Tenant's
Additional Rental and other sums due and owing by Tenant to
Landlord under this Lease upon such termination, Tenant shall be
liable to Landlord for damages. Tenant shall pay to Landlord as
damages on the same days as Base Rental, Tenant's Additional
Rental and other payments which are expressed to be due under the
provisions of this Lease, the total amount of such Base Rental,
Tenant's Additional Rental and other payments, less such part, if
any, of such payments that Landlord shall have been able to
collect from a new tenant upon reletting; provided, however, that
Landlord shall have an obligation to use commercially reasonable
efforts to relet the Premises so as to mitigate the amount for
which Tenant is liable provided such mitigation efforts would not
have a material adverse effect on Landlord's marketing of other
space in the Building. Landlord shall have the right at any time
to accelerate rent and demand final settlement. Upon demand for a
final settlement, Landlord shall have the right to receive, and
Tenant hereby agrees to pay, as damages for Tenant's breach, the
difference between the total rental provided for in this Lease for
the remainder of the Lease Term and the reasonable rental value of
the Premises for such period, such difference to be discounted to
present value at a rate equal to the rate of interest allowed by
law (at the time the demand for final settlement is made) when the
parties to a contract have not agreed on any particular rate of
interest (or, in the absence of such law, at the rate of 6% per
annum).
(iii) Enter upon and take possession of the Premises
without terminating this Lease and expel or remove Tenant and its
effects therefrom without being liable to prosecution or any claim
for damages therefor, and Landlord may relet the Premises for the
account of Tenant. Tenant shall pay to Landlord all arrearages of
Base Rental, Tenant's Additional Rental and other sums due and
owing by Tenant to Landlord, and Tenant shall also pay to Landlord
during each month of the unexpired Lease Term the installments of
Base Rental, Tenant's Additional Rental and other sums due
hereunder, less such part, if any, that Landlord shall have been
able to collect from a new tenant upon reletting; provided,
however, that Landlord shall have no obligation to relet the
Premises so as to mitigate the amount for which Tenant is liable.
In the event Landlord exercises the rights and remedies afforded
to it under this Paragraph 25(b)(iii) and then subsequently elects
to terminate this Lease, Tenant shall be liable to Landlord for
damages as set forth in Paragraph 25(b)(ii) above and Landlord
shall have the right at any time to demand final settlement as
provided therein.
(iv) Landlord may do whatever Tenant is obligated to do by
the provisions of this Lease and may enter the Premises in order
to accomplish this purpose. Tenant agrees to reimburse Landlord
immediately upon demand for any expenses which Landlord may incur
in its actions pursuant to this Subparagraph, and Tenant further
agrees that Landlord shall not be liable for damages resulting to
Tenant from such action, whether caused by the negligence of
Landlord or otherwise.
Pursuit of any of the foregoing remedies shall not preclude pursuit of
any of the other remedies herein provided or any other remedies provided
by law or equity. Any entry by Landlord upon the Premises may be by use
of a master or duplicate key or electronic pass card or any locksmith's
entry procedure or other means. Any reletting by Landlord shall be
without notice to Tenant, and if Landlord has not terminated this Lease,
the reletting may be in the name of Tenant or Landlord, as Landlord shall
elect. Any reletting shall be for such term or terms (which may be
greater or less than the period which, in the absence of a termination of
this Lease, would otherwise constitute the balance of the Lease Term) and
on such terms and conditions (which may include free rent, rental
concessions or tenant inducements of any nature) as Landlord in its
absolute discretion may determine, and Landlord may collect and receive
any rents payable by reason of such reletting. In the event of any
reletting, Tenant shall pay to Landlord on demand the cost of renovating,
repairing and altering the Premises for a new tenant or tenants, and the
cost of advertisements, brokerage fees, reasonable attorneys' fees and
other costs and expenses incurred by Landlord in connection with such
reletting. In the event any rentals actually collected by Landlord upon
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any such reletting for any calendar month are in excess of the amount of
rental payable by Tenant under this Lease for the same calendar month,
the amount of such excess shall belong solely to Landlord and Tenant
shall have no right with respect thereto. In the event it is necessary
for Landlord to institute suit against Tenant in order to collect the
rental due hereunder or any deficiency between the rental provided for by
this Lease for a calendar month and the rental actually collected by
Landlord for such calendar month, Landlord shall have the right to allow
such deficiency to accumulate and to bring an action upon several or all
of such rental deficiencies at one time. No suit shall prejudice in any
way the right of Landlord to bring a similar action for any subsequent
rental deficiency or deficiencies.
26. WAIVER; ATTORNEY'S FEES. No act or thing done by Landlord or its
agents during the Lease Term shall be deemed an acceptance of an attempted
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless made in writing and signed by Landlord. No
reentry or taking possession of the Premises by Landlord shall be construed as
an election on its part to terminate this Lease, unless a written notice of such
intention, signed by Landlord, is given by Landlord to Tenant. Notwithstanding
any such reletting or reentry or taking possession, Landlord may at any time
thereafter elect to terminate this Lease for a previous event of default.
Landlord's acceptance of rent following an event of default hereunder shall not
be construed as Landlord's waiver of such event of default. No waiver by
Landlord or Tenant of any violation or breach of any of the terms, provisions
and covenants herein contained shall be deemed or construed to constitute a
waiver of any other violation or breach of any of the terms, provisions and
covenants herein contained. Forbearance by Landlord to enforce one or more of
the remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of any other violation or default. The failure
of Landlord to enforce any of the Rules and Regulations described in Paragraph
16 against Tenant or any other tenant in the Building shall not be deemed a
waiver of any such Rules and Regulations. No provision of this Lease shall be
deemed to have been waived by Landlord unless such waiver is in writing and is
signed by Landlord. The rights granted to Landlord and Tenant in this Lease
shall be cumulative of every other right or remedy which Landlord of Tenant may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies. If either Landlord or Tenant brings any action under
this Lease, or consults or places this Lease or any amount payable by the other
party hereunder with an attorney for the enforcement of any of either party's
rights hereunder, then the non-prevailing party agrees to pay to the prevailing
party, on demand, the reasonable attorneys' fees and other costs and expenses
incurred by such prevailing party in connection therewith.
27. QUIET POSSESSION. Landlord hereby covenants that Tenant, upon paying
rent as herein reserved, and performing all covenants and agreements herein
contained on the part of Tenant, shall and may peacefully and quietly have, hold
and enjoy the Premises without any disturbance from Landlord or from any other
person claiming by, through or under Landlord, subject to the terms, provisions,
covenants, agreements and conditions of this Lease, specifically including, but
without limitation, the matters described in Paragraph 34 hereof.
28. SEVERABILITY. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws effective during the Lease
Term, then and in that event, it is the intention of the parties hereto that the
remainder of this Lease shall not be affected thereby, and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
that is illegal, invalid or unenforceable, there be added as a part of this
Lease a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
29. SECURITY DEPOSIT. The Security Deposit shall be held by Landlord
without liability for interest and as security for the performance by Tenant of
Tenant's covenants and obligations under this Lease, it being expressly
understood that the Security Deposit shall not be considered an advance payment
of rental or a measure of Landlord's damages in case of default by Tenant upon
the occurrence of any event of default by Tenant or upon termination of this
Lease. Landlord may commingle the Security Deposit with other funds. Landlord
may, from time to time, without prejudice to any other remedy, use the Security
Deposit to the extent necessary to make good any arrearages of rent or to
satisfy any other covenant or obligation of Tenant hereunder. Following any such
application of the Security Deposit, Tenant shall pay to Landlord on demand the
amount so applied in order to restore the Security Deposit to its original
amount. At the termination of this Lease, the balance of the Security Deposit
remaining after any such application (including any amount necessary to
reasonably cure a Tenant default) shall be returned by Landlord to Tenant within
thirty (30) days following the expiration of the Lease Term. If Landlord
transfers its interest in the Premises during the Lease Term, Landlord shall
assign the Security Deposit to the transferee who expressly assumes this Lease
and thereafter shall have no further liability for the return of, or any other
matter relating to, such Security Deposit.
30. NO SUBROGATION; INSURANCE.
(a) Tenant hereby waives any cause of action it might have against
Landlord on account of any loss or damage that is insured against under
any insurance policy that covers the Premises, Tenant's fixtures,
personal property, leasehold improvements or business and which names
Tenant as a party insured, or additional insured. Landlord hereby waives
any cause of action it might have against Tenant because of any loss or
damage arising under Paragraph 10 that is insured against under any
insurance policy that covers the Building or any property of Landlord
used in connection with the Building and which names Landlord as a party
insured, provided that if the cost of restoring the loss or damage
exceeds the amount of property damage insurance proceeds paid to Landlord
on account of the loss or damage, Tenant shall remain liable to Landlord
for the amount of such excess. This provision is cumulative of Paragraph
15.
(b) Tenant shall procure and maintain throughout the Lease Term a
policy or policies of commercial general liability insurance, at its sole
cost and expense, insuring Tenant and Landlord against
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any and all liability for injury to or death of a person or persons,
occasioned by or arising out of or in connection with the use or
occupancy of the Premises and the operations and activities of Tenant and
its employees, agents, contractors and invitees, the limits of such
policy or policies to be in an amount not less than $2,000,000.00 with
respect to injuries to or death of any one person and in an amount of not
less than $2,000,000.00 with respect to any one accident or disaster, and
shall furnish evidence satisfactory to Landlord of the maintenance of
such insurance. This insurance coverage shall include blanket contractual
liability and broad form property damage liability and shall contain an
exception to any pollution exclusion which insures damage or injury
arising out of heat, smoke or fumes from a hostile fire. Landlord,
Landlord's agent, Landlord's mortgagee, and any other parties which
Landlord shall deem necessary shall be named as an additional insured
therein as their respective interests may appear. This insurance shall be
written on an occurrence basis and shall be primary and noncontributory
to any other insurance carried by Landlord and shall be with companies
rated A-XV or better in Best's Insurance Guide and authorized to
transaction business in the State of Washington. Tenant shall obtain a
written obligation on the part of each insurance company to notify
Landlord at least ten (10) days prior to cancellation, expiration or
material alteration of such insurance. It is recommended that Tenant
carry fire and extended coverage insurance on its personal property, as
Landlord shall in no event be required to rebuild, repair or replace any
part of the furniture, equipment, personal property, fixtures and other
improvements which may have been placed by Tenant on or within the
Premises.
(c) Landlord shall maintain throughout the Lease Term, a policy or
policies of insurance as required pursuant to the terms and conditions of
Landlord's lender, but in no event less than $50,000,000 coverage on the
Building.
31. BINDING EFFECT. The provisions of this Lease shall be binding upon
and inure to the benefit of Landlord and Tenant, respectively, and to their
respective heirs, personal representatives, successors and assigns, subject to
the provisions of Paragraphs 11, 24 and 41 hereof.
32. NOTICES. Any notice required or permitted to be given hereunder by
one party to the other shall be deemed to be given when deposited in the United
States mail, certified or registered, return receipt requested, with sufficient
postage prepaid, or hand delivered, addressed to the respective party to whom
notice is intended to be given at the address of such party set forth on the
Basic Lease Information. Either party hereto may at any time by giving written
notice to the other party in the aforesaid manner designate any other address,
which, in regard to notices to be given to Tenant, must be within the
continental United States, in substitution of the foregoing address to which any
such notice shall be given. Any notice from Tenant to Landlord regarding a
material default by Landlord hereunder shall also be sent concurrently to
Landlord's lender, at the last address supplied by Landlord or such lender to
Tenant.
33. BROKERAGE. Tenant warrants that it has not had any dealings with any
broker or agent in connection with the negotiation or execution of this Lease
other than Kidder Mathews & Segner Inc. (Tenant's agent) and Colliers
International, Inc. (Landlord's agent) and Tenant agrees to indemnify Landlord
and hold Landlord harmless from and against any and all cost, expense or
liability for commissions or other compensation or charges claimed by any other
broker or agent with respect to this Lease. Pursuant to the terms of separate
written agreements between Landlord and Colliers International, Inc. and Kidder
Matthews & Segner Inc., Landlord shall be solely responsible for the payment of
all commissions, compensation or charges claimed by each such broker in
connection with the execution of this Lease.
34. SUBORDINATION. This Lease and all rights of Tenant hereunder are
subject and subordinate to any deed of trust, mortgage or other instrument of
security which does now or may hereafter cover the Building and the Land or any
interest of Landlord therein, and to any and all advances made on the security
thereof, and to any and all increases, renewals, modifications, consolidations,
replacements and extensions of any of such deed of trust, mortgage or instrument
of security. This provision is hereby declared by Landlord and Tenant to be
self-operative and no further instrument shall be required to effect such
subordination of this Lease. Tenant shall, however, upon demand at any time or
times execute, acknowledge and deliver to Landlord any and all instruments and
certificates that, in the judgment of Landlord, may be necessary or proper to
confirm or evidence such subordination, and Tenant hereby irrevocably appoints
Landlord as Tenant's agent and attorney-in-fact for the purpose of executing,
acknowledging and delivering any such instruments and certificates. However,
notwithstanding the generality of the foregoing provisions of this Paragraph 34,
Tenant agrees that any such mortgagee shall have the right at any time to
subordinate any such deed of trust, mortgage or other instrument of security to
this Lease on such terms and subject to such conditions as such mortgagee may
deem appropriate in its discretion. Tenant further covenants and agrees upon
demand by Landlord's mortgagee at any time, before or after the institution of
any proceedings for the foreclosure of any such deed of trust, mortgage or other
instrument of security, or sale of the Building pursuant to any such deed of
trust, mortgage or other instrument of security or voluntary sale, to attorn to
the purchaser upon any such sale and to recognize and attorn to such purchaser
as Landlord under this Lease. The agreement of Tenant to attorn upon demand of
Landlord's mortgagee contained in the immediately preceding sentence shall
survive any such foreclosure sale or trustee's sale. Tenant hereby agrees to
execute, acknowledge and deliver to Landlord's mortgagee any and all instruments
and certificates that Landlord's mortgagee may request in order to confirm or
evidence such attornment. In addition, Tenant acknowledges that following any
foreclosure by Landlord's lender, such lender shall not be: (1) liable for any
previous act or omission of Landlord under this Lease; (2) subject to any
credit, demand, claim, counterclaim, offset or defense which theretofore accrued
to Tenant against Landlord, (3) unless consented to by such lender or permitted
without such lender's consent under the terms of any loan documents, bound by
any previous modification of this Lease, or by any previous prepayment of more
than one month's fixed rent or additional rent; (4) bound by any covenant or
obligation of Landlord to perform, undertake or complete any work in the
Premises or to prepare it for occupancy; (5) required to account for any
security deposit of Tenant other than any security deposit actually delivered to
such lender by Landlord; (6) bound by any obligation to
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make any payment to Tenant or grant any credits, except for services, repairs,
maintenance and restoration provided for under this Lease to be performed by
Landlord after the date of such attornment; and (7) responsible for any monies
owing by Landlord to Tenant. Notwithstanding anything to the contrary contained
herein, (a) Landlord agrees to use its good faith efforts to obtain a
subordination, non-disturbance and attornment agreement from its existing
mortgagee within 30 days of the execution of this Lease, and (b) the
subordination by Tenant to future mortgagees provided for in this Section 34
shall be subject to the delivery of a non-disturbance agreement in favor of
Tenant on such mortgagee's standard form of subordination, non-disturbance and
attornment agreement.
35. JOINT AND SEVERAL LIABILITY. If there is more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several. If there
is a guarantor(s) of Tenant's obligations hereunder, the obligations of Tenant
shall be joint and several obligations of Tenant and each such guarantor, and
Landlord need not first proceed against Tenant hereunder before proceeding
against each such guarantor, nor shall any such guarantor be released from its
guarantee for any reason whatsoever, including, without limitation, any
amendment of this Lease, any assignment of this Lease or sublease of all or any
part of the Premises, any forbearance by Landlord or waiver of any of Landlord's
rights, the failure to give Tenant or any such guarantor any notices, or the
release of any party liable for the payment or performance of any of Tenant's
obligations hereunder.
36. BUILDING NAME AND ADDRESS. Landlord reserves the right at any time to
change the name by which the Building is designated and its address, and
Landlord shall have no obligation or liability whatsoever for costs or expenses
incurred by Tenant as a result of such name change or address change of the
Building.
37. ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS.
(a) Tenant agrees to furnish from time to time, within ten (10)
business days following the request by Landlord or any successor to
Landlord or by the holder of any deed of trust or mortgage covering the
Land and Building or any interest of Landlord therein, an estoppel
certificate signed by Tenant to the effect that this Lease is then
presently in full force and effect and specifying any modifications; that
the Lease Term has commenced and the full rental is then accruing
hereunder; that Tenant has accepted possession of the Premises and that
any improvements required by the terms of this Lease to be made by
Landlord have been completed to the satisfaction of Tenant; that no rent
under this Lease has been paid more than thirty (30) days in advance of
its due date; that the address for notices to be sent to Tenant is as set
forth in this Lease; that Tenant, as of the date of such certificate, has
no charge, lien or claim of offset under this Lease or otherwise against
rents or other charges due or to become due hereunder; and that to the
knowledge of Tenant, Landlord is not then in default under this Lease. To
the extent that Tenant believes any of the foregoing to be inaccurate,
Tenant shall specifically enumerate in the certificate the alleged
inaccuracy and Tenant's basis for refusing to certify to such facts. At
Landlord's option, any such certificate may also contain an
acknowledgment by Tenant of receipt of notice of the assignment of this
Lease to such holder and the agreement by Tenant with such holder that
from and after the date of such certificate, Tenant will not pay any rent
under this Lease more than thirty (30) days in advance of its due date,
will not surrender or consent to the modification of any of the terms of
this Lease nor to the termination of this Lease by Landlord, and will not
seek to terminate this Lease by reason of any act or omission of Landlord
until Tenant shall have given written notice of such act or omission to
the holder of such deed of trust or mortgage (at such holder's last
address furnished to Tenant) and until a reasonable period of time shall
have elapsed following the giving of such notice, during which period
such holder shall have the right, but shall not be obligated, to remedy
such act or omission; provided, however, that (i) the agreement of Tenant
described in this sentence will be of no effect under such certificate
unless Tenant is furnished by such holder with a copy of any assignment
to such holder of Landlord's interest in this Lease within ninety (90)
days after the date of such certificate, and (ii) the agreement of Tenant
with such holder that is embodied in such certificate shall terminate
upon the subsequent termination of any such assignment. In the event
Tenant shall fail or neglect to execute, acknowledge and deliver any such
certificate, Landlord may, as the agent and attorney-in-fact of Tenant,
execute, acknowledge and deliver the same, and Tenant hereby irrevocably
nominates, constitutes and appoints Landlord as Tenant's proper and legal
agent and attorney-in-fact for such purpose. Such power of attorney shall
not terminate on disability of the principal.
(b) Tenant shall also furnish to Landlord within fifteen (15) days
following a written request by Landlord, but no more often than one time
per calendar year, a statement of the financial condition of Tenant
prepared by an independent certified public accountant in a form
reasonably satisfactory to Landlord.
38. MECHANIC'S LIENS. Nothing contained in this Lease shall authorize
Tenant to do any act which shall in any way encumber the title of Landlord in
and to the Premises or the Building or any part thereof; and if any mechanic's
or materialman's lien is filed or claimed against the Premises or Building or
any part thereof in connection with any work performed, materials furnished or
obligation incurred by or at the request of Tenant, Tenant will promptly pay
same or cause it to be released of record. If the lien is not released of record
within, or default in payment thereof shall continue for, twenty (20) days after
written notice thereof from Landlord to Tenant, without limiting or otherwise
affecting any of Landlord's other rights or remedies and without waiving any
event of default by Tenant, Landlord shall have the right and privilege at
Landlord's option of paying the same or any portion thereof without inquiry as
to the validity thereof, and any amounts so paid, including expenses and
interest, shall be so much additional rent hereunder from Tenant to Landlord and
shall be repaid to Landlord immediately on demand therefor. Notwithstanding the
foregoing, Tenant shall have the right, after written notice to Landlord, to
contest in good faith and with all due diligence any mechanic's lien and shall
not be required to pay any claim secured by such mechanic's lien provided that
such lien would not be satisfied out of the interest of Landlord in the Premises
or the Building by reason of such delay, and further provided that Tenant will
at Tenant's expense, defend Landlord and
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pay all costs reasonably incurred by Landlord relating to the contest in the
event Landlord is joined in any suit pertaining thereto or in the event any lien
affidavit is filed claiming a lien upon Landlord's interest in the Premises or
in the Building. The foregoing sentence shall not imply any right on the part of
Tenant to affect Landlord's interest in the Premises or the Building.
39. TAXES AND TENANT'S PROPERTY. Tenant shall be liable for all taxes
levied or assessed against personal property, furniture or fixtures placed by
Tenant in the Premises. If any such taxes for which Tenant is liable are levied
or assessed against Landlord or Landlord's property and if Landlord elects to
pay the same or if the assessed value of Landlord's property is increased by
inclusion of personal property, furniture or fixtures placed by Tenant in the
Premises, and Landlord elects to pay the taxes based on such increase, Tenant
shall pay Landlord upon demand that part of such taxes for which Tenant is
primarily liable hereunder.
40. CONSTRUCTIVE EVICTION. Tenant shall not be entitled to claim a
constructive eviction from the Premises unless Tenant shall have first notified
Landlord in writing of the condition or conditions giving rise thereto, and, if
the complaints be justified, unless Landlord shall have failed to remedy such
conditions within thirty (30) days after receipt of said notice, provided, that
if such default cannot be cured within such 30-day period and Landlord is
diligently pursuing to cure same, Landlord shall be afforded additional time in
order to cure or remedy such default.
41. LANDLORD'S LIABILITY. The liability of Landlord to Tenant for any
default by Landlord under the terms of this Lease shall be limited to Tenant's
actual direct, but not consequential, damages therefor and shall be recoverable
only from the interest of Landlord in the Building and the Land, and Landlord
shall not be personally liable for any deficiency except that Landlord shall at
all times have personal liability to Tenant for repayment of the Security
Deposit in the event of foreclosure as provided in Section 34 hereof. This
clause shall not be deemed to limit or deny any remedies which Tenant may have
in the event of default by Landlord hereunder which do not involve the personal
liability of Landlord. Notwithstanding anything to the contrary contained in
this Lease, in the event Landlord sells, assigns, transfers or conveys its
interest in the Building and the Land, Landlord shall have no liability for any
acts or omissions that occur after the date of said sale, assignment, transfer
or conveyance.
42. EXECUTION BY LANDLORD. The submission of this Lease to Tenant shall
not be construed as an offer, and Tenant shall not have any rights with respect
hereto unless and until Landlord shall, or shall cause its managing agent to,
execute a copy of this Lease already executed and delivered by Tenant to
Landlord, and deliver the same to Tenant.
43. NO WAIVER. No waiver by Landlord of any of its rights or remedies
hereunder, or otherwise, shall be considered a waiver of any other or subsequent
right or remedy of Landlord; no delay or omission in the exercise or enforcement
by Landlord of any rights or remedies shall ever by construed as a waiver of any
right or remedy of Landlord; and no exercise or enforcement of any such rights
or remedies shall ever be held to exhaust any right or remedy of Landlord.
44. NO THIRD PARTY BENEFICIARY. This Lease is for the sole benefit of
Landlord, its successors and assigns, and Tenant, its permitted successors and
assigns, and it is not for the benefit of any third party.
45. NUMBER AND GENDER. Words of any gender used in this Lease shall be
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, unless the context otherwise requires.
46. FORCE MAJEURE. Whenever a period of time is herein prescribed for
action to be taken by Landlord or Tenant, neither Landlord nor Tenant, as the
case may be, shall be liable or responsible for, and there shall be excluded
from the computation for any such period of time, any delays due to strikes,
riots, acts of God, shortages and/or unavailability of labor or materials, war,
governmental laws, regulations or restrictions, or any other cause of any kind
whatsoever which are beyond the reasonable control of either Landlord or Tenant;
provided that the affected party provides prompt written notice of the
circumstances to the other party and uses its commercially reasonable efforts to
mitigate the consequences. If this Lease specifies a time period for performance
of an obligation, that time period shall be extended by the period of any delay
in performance caused by any of the events of force majeure described herein.
Notwithstanding the foregoing, force majeure shall not excuse Tenant from its
obligation to timely pay rent.
47. HAZARDOUS AND TOXIC MATERIALS.
(a) For purposes of this Lease, hazardous or toxic materials shall mean
asbestos containing materials and all other materials, substances, wastes and
chemicals classified as hazardous or toxic substances, materials, wastes or
chemicals or otherwise regulated under then-current applicable federal, state or
local governmental laws, rules or regulations.
(b) Tenant shall not knowingly incorporate into, or generate, store, use
or otherwise place or dispose of at, or transport to or from, the Premises, the
Building or on the Land any hazardous or toxic materials, except in the ordinary
course of Tenant's business and then only if (i) such materials are handled and
disposed of in accordance with industry standards for safety, storage, use and
disposal, (ii) Tenant provides to Landlord an annual summary of permits that
Tenant has or has applied for from local, state and federal agencies regarding
Tenant's activities at the Building in connection with hazardous or toxic
materials together with a copy of Tenant's most current environmental health and
safety plan which contains Tenant's storage and disposal protocol(s) (herein
referred to collectively as "TENANT'S EH&S PLAN"), and (iii) such materials are
used, transported, stored, handled and disposed of in accordance with all
applicable governmental laws, rules and regulations. Landlord shall have the
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right, but not the obligation, to periodically inspect and otherwise investigate
the Premises for the presence of hazardous or toxic materials.
(c) Landlord shall, at its sole cost and expense, investigate, remove and
remediate pursuant to and in compliance with all applicable governmental
standards, laws, rules and regulations, any hazardous or toxic materials whose
presence at the Premises, Building or Land arises from the act or omission of
Landlord. Landlord shall defend and indemnify Tenant and save it harmless from
all suits, actions, damages, liability and expense arising from any release of
hazardous or toxic materials to or from the Premises, Building or Land that
either (i) occurred or existed prior to the Lease Term or (ii) arises from an
act or omission of Landlord or its invitees (excluding tenants at the Building).
Landlord shall not dispose of or release at the Premises, Building or the Land
any hazardous or toxic materials in violation of applicable law and shall remove
or remediate all hazardous or toxic materials disposed of or released by
Landlord or its invitees (excluding tenants at the Building) at the Premises,
Building or Land of which Landlord becomes aware when and if required by
applicable law and in a manner that will not materially and adversely affect
Tenant's access, use or occupancy of the Premises.
(d) If Tenant or Landlord ever has any knowledge of the presence in the
Premises or the Building or the Land of hazardous or toxic materials which
affect the Premises, Tenant shall notify Landlord and vice versa in writing
promptly after obtaining such knowledge. Tenant acknowledges that Landlord has
advised Tenant of the existence of asbestos containing materials used during the
initial construction of the Building. An operation and maintenance plan has been
established to monitor such materials and has been made available to Tenant;
however, Landlord has been advised that such materials do not pose a health
hazard. Landlord represents and warrants, as of the date hereof and to the best
of its knowledge, that there are no hazardous materials or environmental
conditions at the Building that could adversely affect Tenant or its Sole
Permitted Use. Tenant acknowledges that Landlord has provided copies of its
latest environmental reports for Tenant's review.
(e) If Tenant or its employees, agents or contractors shall ever violate
the provisions of Paragraph (b) of this subsection or otherwise contaminate the
Premises or the Building or Land, then Tenant shall, at its sole cost and
expense, clean up, remove and dispose of the material causing the violation, or
remove or remediate the contamination pursuant to and in compliance with all
applicable governmental standards, laws, rules and regulations and shall repair
any damage to the Premises or Building arising from the violation or
contamination within such period of time as may be reasonable under the
circumstances after written notice by Landlord (collectively, "TENANT'S
ENVIRONMENTAL CORRECTIVE WORK"). Tenant shall notify Landlord of its method,
time and procedure for any clean up or removal and Landlord shall have the right
to require reasonable changes in such method, time or procedure or to require
the same to be done after normal business hours to the extent reasonably
feasible. Tenant's obligations under this subsection shall survive the
termination or expiration of this Lease.
(f) If any Tenant's Environmental Corrective Work (i) is to occur outside
of the Premises or (ii) will in any way affect any portion of the Building other
than the Premises, then Landlord shall have the right, but not the obligation,
after giving Tenant advance notice and an opportunity to perform such Work, to
undertake Tenant's Environmental Corrective Work, and Tenant shall reimburse
Landlord for reasonable expenses incurred by Landlord in undertaking Tenant's
Environmental Corrective Work. Tenant shall allow Landlord, its agents,
employees and contractors such access to the Premises as Landlord may reasonably
request in order to perform such Tenant's Environmental Corrective Work. In
addition, Tenant shall protect, indemnify, defend and hold harmless Landlord and
its directors, partners, officers, employees, agents, parents, subsidiaries,
successors and assigns from any loss, damage cost, fine, penalty, expense or
liability (including reasonable attorneys' fees and costs) directly or
indirectly arising out of or attributable to the use, generation, manufacture,
production, storage, release, discharge, disposal or presence of a hazardous or
toxic material on the Premises, Building or Land caused by Tenant and its
employees, agents, contractors, licensees or invitees, or a breach of any
representation, warranty, covenant or agreement contained in this Paragraph 47,
including, without limitation, the costs of any required or necessary repairs,
cleanup or detoxification of the Premises, Building or Land and the preparation
and implementation of any closure, remedial or other required plans and any
natural resources damage. Tenant's obligations under this subsection shall
survive the termination or expiration of this Lease.
(g) Landlord acknowledges that Tenant uses hazardous and toxic materials
in its business. Prior to the execution of this Lease, Tenant has provided a
comprehensive list of all chemicals and hazardous materials used in Tenant's
business. In addition, prior to bringing any hazardous or toxic materials into
the Building or onto the Land, Tenant shall provide to Landlord a copy of
Tenant's EH&S Plan, which shall be in compliance with applicable laws, for such
hazardous or toxic materials. Tenant agrees to comply with Tenant's EH&S Plan
and may utilize other hazardous or toxic materials which were not previously
approved by Landlord, without Landlord's prior written consent, provided such
usage complies with all of the applicable provisions of this Lease. Tenant
hereby agrees to be responsible for the cost of any increased insurance
resulting solely from Tenant's use of such hazardous materials. Landlord shall
have the right to conduct an environmental audit of the Premises, at Landlord's
sole expense, no more than one (1) time per year.
48. TELECOMMUNICATIONS. Tenant and its telecommunications companies,
including but not limited to local exchange telecommunications companies and
alternative access vendor services companies, shall have no right of access to
and within the Building, for the installation and operation of
telecommunications systems including but not limited to voice, video, data, and
any other telecommunications services provided over wire, fiber optic,
microwave, wireless, and any other transmission systems, for part or all of
Tenant's telecommunications within the Building and from the Building to any
other location without Landlord's prior written consent, which consent shall not
be unreasonably, withheld or delayed provided such provider executes Landlord's
standard form of Telecommunications License Agreement. Tenant expressly
understands and agrees that Landlord reserves the right to grant or deny access
(to the Building or any portion thereof, including, without limitation, the
Premises) to any telecommunications service provider whatsoever, and that Tenant
shall have no right to demand or attempt to
17
<PAGE> 19
require Landlord to grant any access to any such telecommunications service
provider. Moreover, Tenant acknowledges and agrees that, in the event any such
telecommunications service provider desires access to the Building to serve any
or all tenants thereof, such access shall be prescribed and governed by the
terms and provisions of Landlord's standard Telecommunications License
Agreement, which must be executed and delivered to Landlord by such
telecommunications service provider before it is allowed any access whatsoever
to the Building. Subject to the requirements provided herein, Landlord
acknowledges that Tenant will select its own telecommunications provider who,
subject to the execution of Landlord's standard Telecommunications License
Agreement, shall have access to the Building and its transmission systems to
accomplish the purposes hereof.
49. LANDLORD'S FEES. Whenever Tenant requests Landlord to take any action
or give any consent required or permitted under this Lease, Tenant will
reimburse Landlord for Landlord's reasonable costs incurred in reviewing the
proposed action or consent, including without limitation reasonable attorneys',
engineers' or architects' fees, within ten (10) days after Landlord's delivery
to Tenant of a statement of such costs. Tenant will be obligated to make such
reimbursement without regard to whether Landlord consents to any such proposed
action.
50. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of
light, air or view by any structure which may be erected on the Land or lands
adjacent to the Building shall in no way affect this Lease or impose any
liability on Landlord (even if Landlord is the adjacent land owner).
51. APPLICABLE LAW; CONSENT TO JURISDICTION. THIS LEASE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WASHINGTON AND THE
LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS IN THE STATE OF WASHINGTON.
TENANT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT
WITH RESPECT TO THIS LEASE MAY BE MAINTAINED IN THE COURTS OF SNOHOMISH COUNTY,
WASHINGTON OR IN THE U.S. DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON,
AND TENANT HEREBY CONSENTS TO THE JURISDICTION AND VENUE OF SUCH COURTS.
52. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
LANDLORD AND TENANT EACH WAIVE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING
OUT OF OR WITH RESPECT TO THIS LEASE.
53. CONFIDENTIALITY. Tenant acknowledges that the terms and conditions of
this Lease are to remain confidential for Landlord's benefit, and may not be
disclosed by Tenant to anyone, by any manner or means, directly or indirectly,
without Landlord's prior written consent. Notwithstanding anything contained
herein to the contrary, Landlord acknowledges and consents to Tenant's
obligation to make such disclosures pertaining to this Lease that it shall deem
necessary to comply with all securities laws and any other laws, statutes,
rules, regulations or order of a court of law. The consent by Landlord to any
disclosures shall not be deemed to be a waiver on the part of Landlord of any
prohibition against any future disclosure.
54. BACK-UP GENERATOR. Landlord agrees to provide a location that Tenant
may use, on a non-exclusive basis, to install an emergency generator and fuel
system at Tenant's sole cost and expense. Such generator and area will be
designated by Landlord (in an area reasonably acceptable to Tenant) and, to the
extent permitted by applicable ordinance, located adjacent to the Building and
shall be subject to Landlord's review and approval of the configuration,
placement and type of equipment that will be installed by Tenant, such approval
not to be unreasonably withheld, conditioned or delayed. Once the location for
the generator has been established, Tenant shall provide screening or other
reasonable means to secure the generator. The space provided for the generator
shall not be included in the calculation of Rentable Space of the Premises.
Tenant shall be responsible for and shall pay all costs and expenses of
providing, installing, maintaining, operating, testing, repairing and, upon
termination of this Lease, removing such back-up generator and fuel system.
Tenant shall pay directly to its supplier for all fuel consumed by the back-up
generator and Tenant shall comply with all federal, state and local laws, rules
and ordinances and the operative office association, together with the
provisions of this Lease, concerning the installation, use storage and disposal
of diesel fuel and storage tanks. Provided, further, that Tenant shall procure
and maintain throughout the term of this Lease, all permits, licenses,
registrations, financial assurances necessary for the installation, construction
and operation of the back-up generator and fuel tanks.
55. SIGNAGE. Tenant shall be allowed to utilize a portion of Landlord's
exterior monument signage equal to at lest 25% of the overall signage. In
addition, Tenant shall be entitled to Building standard lobby signage equal to
at least 25% of the overall signage. Notwithstanding the foregoing, Tenant shall
be responsible for the cost of installing and maintaining such signage and the
location, type and size of such signage shall be reasonably acceptable to
Landlord. In addition, all signage must conform to all governmental codes and
ordinances. Landlord represents and Tenant understands that there will be no
signage of any kind permitted on the Building exterior except the Building
address and signage regarding Landlord's ownership of the Building which shall
only be displayed on the Building's entry doors.
56. SPECIAL TENANT INSTALLATIONS. Landlord acknowledges that Tenant
desires certain special installations in the Premises and certain Service Areas
more particularly described hereinbelow. Subject to Landlord's review and
approval of the Approved Working Drawings which shall be delivered in accordance
with the terms of Exhibit D hereto and which in all cases shall specifically
address such desired special installations, such Landlord consent not to be
unreasonably withheld, conditioned or delayed, Tenant shall be permitted to
complete the following: (a) installation, maintenance, operation, modification
and removal of an HVAC system on the Building's roof related to Tenant's clean
room facilities; (b) locate lab hoods and antennae on the Building's roof (such
rooftop equipment to be governed by Landlord's standard rider related to rooftop
equipment); (c) installation, maintenance, operation, modification and removal
of an emergency generator and fuel system as more particularly
18
<PAGE> 20
described herein; (d) construct an internal stairwell between its floors
(provided, further, that said stairwell shall not impact the overall square
footage of the Premises); and (e) obtain access from time to time, with a
representative of Landlord present, to the areas above the acoustical ceiling to
install, maintain and inspect special tenant installations to the Premises. In
connection with all such special tenant installations, Landlord shall have the
option of requiring Tenant to remove same, at Tenant's cost, following the
expiration of the Lease Term. In addition, Tenant acknowledges that Landlord
shall not be unreasonable in its denial of any such special installation in the
event (i) Landlord's third-party engineering consultant determines that such
tenant installation will subject the Building or its occupants to unnecessary
structural or safety risks or potential harm (e.g., an assessment of the
structural integrity resulting from the desired internal stairwell), or (ii)
violates local ordinance, or (iii) impairs the rights of other existing or
prospective tenants of the Building.
57. CATEGORY 5 CABLING. Landlord agrees to keep the existing Category 5
cabling system located on the 2nd and 3rd floors of the Building in place during
the Lease Term and to permit Tenant to utilize such existing Category 5 cabling
system on those floors so long as, in the reasonable judgment of Landlord, that
it does not adversely impact Landlord's plans for the Building.
58. MISCELLANEOUS. Notwithstanding anything to the contrary in this
Lease, (a) if another tenant of the Building is violating the terms of its lease
and such violation is harming Tenant, Landlord agrees to take commercially
reasonable action to enforce its rights under said other lease so as to
eliminate or mitigate the harm caused by such tenant to Tenant; and (b) the
liability of either party under the terms of this Lease shall be limited to the
other party's actual, direct, but not consequential damages, including, without
limitation, damages for loss or profits or special or punitive damages.
IN WITNESS WHEREOF, this Lease Agreement is entered into by the parties
hereto on the day and year first set forth above.
LANDLORD: TENANT:
-------- ------
WIREDZONE PROPERTY, L.P. COMBIMATRIX CORPORATION
By: WiredZone Property GenPar, LLC,
its general partner By: /s/ Patrick de Maynadier
--------------------------------
Its: Executive Vice President
and General Counsel
By: /s/ Judson Pankey --------------------------------
----------------------------
Its:
---------------------------
19
<PAGE> 21
STATE OF TEXAS SECTIONS
SECTIONS
COUNTY OF DALLAS SECTIONS
I certify that I know or have satisfactory evidence that
_______________________ is the person who appeared before me, and said person
acknowledged that he/she signed this instrument, on oath stated that he/she was
authorized to execute this instrument and acknowledged it as the
_________________ of WiredZone Property GenPar, LLC, general partner of
WIREDZONE PROPERTY, L.P., to be the free and voluntary act of such party for the
uses and purposes mentioned in this instrument.
DATED: October __, 2000.
--------------------------------------------
Print Name:
---------------------------------
NOTARY PUBLIC in and for the State of Texas,
residing at
---------------------------------
My Appointment expires:
---------------------
(use this space for notarial stamp/seal)
STATE OF WASHINGTON SECTIONS
SECTIONS
COUNTY OF _____________ SECTIONS
I certify that I know or have satisfactory evidence that
_______________________ is the person who appeared before me, and said person
acknowledged that he/she signed this instrument, on oath stated that he/she was
authorized to execute this instrument and acknowledged it as the
_________________ of COMBIMATRIX CORPORATION, a Delaware corporation, to be the
free and voluntary act of such party for the uses and purposes mentioned in this
instrument.
DATED: October __, 2000.
------------------------------------------
Print Name:
-------------------------------
NOTARY
PUBLIC in and for the State of Washington,
residing at
-------------------------------
My Appointment expires:
-------------------
(use this space for notarial stamp/seal)
20
<PAGE> 22
EXHIBIT "A" TO LEASE AGREEMENT
LEGAL DESCRIPTION OF THE LAND
Tracts 3 and 4 of Snohomish County Binding Site Plan recorded under
Recording No. 8311075005. Situated in the County of Snohomish, State of
Washington.
EXHIBIT "A" - PAGE 1 OF 1
<PAGE> 23
EXHIBIT "B" TO LEASE AGREEMENT
FLOOR PLAN OF PREMISES
[To Be Provided]
EXHIBIT "B" - PAGE 1 OF 1
<PAGE> 24
EXHIBIT "C" TO LEASE AGREEMENT
HOLIDAYS
January 1st New Years Day
Last Monday in May Memorial Day
July 4th* Independence Day
First Monday in September Labor Day
Fourth Thursday in November Thanksgiving Holidays
plus Friday following
December 25th Christmas Day
*or date legally celebrated
EXHIBIT "D" TO LEASE AGREEMENT
LEASEHOLD IMPROVEMENTS AGREEMENT
THIS LEASEHOLD IMPROVEMENTS AGREEMENT (this "AGREEMENT") is made and
entered into this ____ day of October, 2000, in connection with that certain
Lease Agreement (the "LEASE"), executed concurrently herewith by and between
WIREDZONE PROPERTY, L.P. ("LANDLORD") and COMBIMATRIX CORPORATION ("TENANT"),
and constitutes the entire agreement of Landlord and Tenant with respect to the
construction and completion of the Premises described in the Lease. In the event
of a conflict between the provisions of this Agreement and other provisions of
the Lease, the provisions of this Agreement will control. Terms defined in the
Lease, when used herein, shall have the same meanings as are ascribed to them in
the Lease.
1. Since the Premises have been occupied by a previous tenant, Tenant
hereby agrees to accept the Premises in its "as is" condition; provided,
however, the Premises shall be in broom-clean condition and all Building systems
(including, without limitation, the structural roof, roof membrane, walls,
foundations, existing HVAC and utility systems) shall be in good working order
prior to the delivery of the Premises to Tenant. Landlord agrees, at Landlord's
expense, to upgrade the Building common lobby and central elevator lobby,
central elevator lobby cabs and security area to "WiredZone" specifications at
Landlord's sole cost and expense within 180 days following applicable city
approval/permits related to such work, which city approval and permitting shall
be diligently sought within 60 days of the Commencement Date of the Lease.
2. Initially, Tenant shall provide to Landlord for its reasonable
approval space plans for the Premises prior to commencing working drawings.
Following Landlord's written approval of such space plans (with a response to be
provided within five (5) business days following receipt thereof), Tenant shall
provide to Landlord for its reasonable approval final working drawings, prepared
by Tenant's Architect/Engineer, of all improvements that Tenant proposes to
install in the Premises; such working drawings shall include the partition
layout, internal stairwell, ceiling plan, electrical outlets and switches,
telephone outlets, built-in kitchen equipment, drawings for any modifications to
the mechanical and plumbing systems of the Building, and detailed plans and
specifications for the construction of the improvements called for in the Lease
(including, without limitation, those detailed in Paragraph 56 of the Lease) and
under this Exhibit in accordance with all applicable governmental laws, codes,
rules, and regulations. Such plans will also address the installation of
Tenant's switching equipment. If Tenant's proposed construction work will affect
the Building's HVAC, electrical, mechanical, and plumbing systems, the working
drawings pertaining thereto shall be prepared by Tenant's engineer with Landlord
approval. Such working drawings and the improvements depicted thereon shall (a)
comply with all applicable governmental laws, codes, rules, and regulations, (b)
be sufficiently detailed to allow construction of the improvements in a good and
workmanlike manner, and (c) conform to the reasonable rules and regulations
promulgated from time to time by the Landlord for the construction of tenant
improvements. As used herein, "Approved Working Drawings" shall mean the final
working drawings reasonably approved by Landlord, as amended from time to time
by any approved changes thereto, and "Work" shall mean all improvements to be
constructed in accordance with and as indicated on the Approved Working
Drawings. The Approved Working Drawings shall be generated from and based upon
Tenant's architect's initial programming for the Premises, which Landlord has
reviewed and provided conceptual approval. Landlord acknowledges that the Work
will be performed in several phases during the Lease Term, each of which shall
collectively constitute the "Work" for purposes hereof. Landlord's approval of
the Working Drawings shall not be a representation or warranty by Landlord that
such drawings are adequate for any use, purpose, or condition, or that such
drawings comply with any applicable law or code, but shall merely be the consent
of Landlord to the performance of the Work. All changes in the Work for
partition changes or other material or structural changes must receive the prior
written approval of Landlord which approval shall not be unreasonably withheld,
delayed or conditioned, and in the event of any such approved change Tenant
shall, upon completion of the Work, furnish Landlord with an accurate,
reproducible "marked-up" plan (e.g., sepia) of the improvements as constructed,
which plan shall be incorporated into this Lease by this reference for all
purposes, as well as copies of all specifications and warranties on equipment
installed and connected to the Building's systems.
EXHIBIT "C" - PAGE 1 OF 1
<PAGE> 25
3. The Work shall be performed only by contractors and subcontractors
approved in writing by Landlord, in Landlord's reasonable discretion, such
consent not to be unreasonably withheld, conditioned or delayed. Tenant's
construction manager shall also be subject to the review and approval of
Landlord, such consent not to be unreasonably withheld or delayed based upon
Landlord's review of the qualifications and creditworthiness of such proposed
construction manager candidates. Tenant hereby advises Landlord that it is
submitting these candidates to be considered for the position of construction
manager for the tenant improvements to the Premises: DPR Contractors, Rafn
Contractors and Howard S. Wright Contractors. Landlord reserves the right to
provide other suggested contractors to Tenant for Tenant to review and consider.
All contractors and subcontractors shall be required to procure and maintain
insurance against such risks, in such amounts, and with such companies as
Landlord may reasonably require. Certificates of such insurance, must be
received by Landlord before the Work is commenced. The Work shall be performed
in a good and workmanlike manner that is free of defects and is in conformance
with the Approved Working Drawings, and shall be performed in such a manner and
at such times as to maintain harmonious labor relations and not to interfere
with or delay Landlord's other contractors, the operation of the Building, and
the occupancy thereof by other tenants. All contractors and subcontractors shall
contact Landlord and schedule reasonable time periods during which they may use
Building facilities in connection with the Work (e.g., elevators, excess
electricity, etc.). Landlord agrees to cooperate with Tenant in order to
expedite the completion of the Work.
4. Tenant shall bear the entire cost of performing the Work (including,
without limitation, design of the Work and preparation of the Working Drawings,
costs of construction labor and materials, additional janitorial services and
trash removal to the extent the contractor fails to provide such services,
related taxes and insurance costs, all of which costs are herein collectively
called the "Total Construction Costs"), subject to the reimbursement from the
Tenant Improvement Allowance (as herein defined).
5. In the event Tenant desires any changes to the Approved Working
Drawings, Tenant shall submit the proposed change order to Landlord in writing
for Landlord's approval, such approval not to be unreasonably withheld,
conditioned or delayed. Landlord shall advise Tenant of such approval or
disapproval within five (5) business days following receipt by Landlord of such
request, which approval shall not be unreasonably withheld, conditioned or
delayed. If Landlord fails to approve or disapprove the Change Order within five
(5) business days following delivery of the Change Order by Tenant to Landlord,
Landlord shall be deemed to have approved the proposed change and it may be
implemented by Tenant.
6. The Lease Term and Tenant's rental obligations under the Lease will
commence upon the Commencement Date set forth in the Lease, and Tenant shall
cause certain identified portions of the Work to be completed in accordance with
the build-out schedule for the Premises set forth in Rider No. 106 to the Lease.
Tenant agrees that upon substantial completion of the Work and each phase
thereof, Tenant will occupy and accept the Premises. Except as otherwise
provided in this Lease, Tenant shall not enter into possession of the Premises
prior to substantial completion for purposes other than construction and/or
preparing the Premises for move-in (which entry shall be at Tenant's sole risk
since Tenant is causing the construction of the Premises) without Landlord's
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed, other than in such event, Tenant acknowledges that its indemnity
contained in the Lease shall be applicable to such period of early possession.
7. Landlord shall provide a construction allowance (the "ALLOWANCE") of
$10.00 per square foot of Rentable Space in the Premises. Such funds shall be
paid to Tenant within 30 days following the completion of the Work (or
applicable stages thereof) and Landlord's receipt of the following: (i)
submission of an AIA draw request, (ii) a certification from Landlord's and
Tenant's construction managers that such work was completed in a good and
workmanlike manner, (iii) copies of executed lien waivers and invoices, and (iv)
a certificate of occupancy from the appropriate governmental authority as well
as copies of any licenses required for Tenant's use and occupancy of the
Premises and any auxiliary equipment installed by Tenant (but in no event
earlier than Tenant's occupancy of the Premises and the payment of the first
month of Base Rental). The Allowance may be used by Tenant for any construction
obligations of Tenant (but not for the payment of Base Rental and such shall not
be applied to any obligations of Landlord under Paragraph 47 of the Lease). Any
unused portion of the Allowance shall not be available for subsequent
construction or alterations by Tenant. In the event the Work is completed in
identified stages, Landlord agrees to make available the applicable portion of
the Allowance (i.e., the allocable portion of the Allowance in connection with
the square footage of the area being constructed for Tenant's use and occupancy
and for which Base Rental will thereafter be paid upon), provided that Landlord
receives documentation evidencing the completion of such portion of the Work as
well as lien waivers from the applicable contractors and subcontractors in
connection with such portion of the Work. With regard to disbursement, Landlord
agrees, with regard to each identified stage of the Work, to make the applicable
portion of the Allowance available as follows: the first third shall be made
available to Tenant at the commencement of such phase or stage of Work; the
second third shall be made available to Tenant when two-thirds of such phase or
stage of Work is completed as verified by Landlord's inspectors; and the final
third shall be made available to Tenant when such phase or stage of Work is
completed, as verified by Landlord's inspectors, and the materials described in
clauses (ii) through (iv) above which relate to such portion of the Work have
been delivered.
8. Tenant, through its Landlord-approved agent, shall supervise the Work.
Landlord or its construction manager shall coordinate with Tenant, Tenant's
construction manager and its contractor with respect to the relationship between
the Work (including, but not limited to scheduling of Work, Building policies
and procedures and inspection of the Work), the Building, and the Building's
systems. Tenant shall be obligated to pay a construction supervision fee of five
percent (5%) of the Total Construction Costs to Landlord or Landlord's
construction manager, such fee not to exceed $75,000. Tenant hereby covenants to
comply with Landlord's guidelines regarding construction policies and procedures
and further agrees to cause all contractors and
EXHIBIT "D" - PAGE 2 OF 3
<PAGE> 26
subcontractors to abide by such policies and procedures. Landlord shall, prior
to commencement of construction hereunder, provide Tenant's contractors with a
staging area not to exceed 1,000 square feet which shall be reasonably located
and adequate for performing the Work. Landlord may, from time to time, relocate
the staging area if it interferes with Landlord's or another tenant's usage of
the Building. In addition to the indemnification for mechanic's liens set forth
in this Lease, Tenant hereby indemnifies Landlord and its property manager from
any and all claims, damages, liabilities and causes of action arising from the
construction of the tenant improvements to the Premises except to the extent
caused by the gross negligence or intentional misconduct of Landlord. Tenant
understands that Landlord will require weekly construction meetings.
9. All sums payable by Tenant to Landlord under this Agreement shall
constitute additional rental under the Lease. In the event Tenant shall fail to
pay any amount of such additional rental when due, and any such failure
continues for a period of ten (10) days after written notice of such failure is
issued by Landlord to Tenant, then such failure shall constitute an Event of
Default under the Lease and hereunder and Landlord shall have the right to
exercise all of its rights and remedies under the Lease and under applicable
law. In no event shall any termination of the Lease by Landlord relieve Tenant
of Tenant's obligation to pay to Landlord the sums payable by Tenant hereunder.
EXHIBIT "D" - PAGE 3 OF 3
<PAGE> 27
EXECUTED as of the day and year first above written.
LANDLORD:
WIREDZONE PROPERTY, L.P.
By: WiredZone Property GenPar, LLC,
its general partner
By:
-----------------------------------
Its:
-----------------------------------
TENANT:
COMBIMATRIX CORPORATION
By:
------------------------------------------
Title:
---------------------------------------
EXHIBIT "D" - PAGE 4 OF 3
<PAGE> 28
EXHIBIT "E" TO LEASE AGREEMENT
ACCEPTANCE OF PREMISES MEMORANDUM
THIS ACCEPTANCE OF PREMISES MEMORANDUM (this "MEMORANDUM") is entered
into on this ____ day of October, 2000, by and between WIREDZONE PROPERTY, L.P.,
as Landlord ("LANDLORD"), and COMBIMATRIX CORPORATION, as Tenant ("TENANT").
Unless otherwise defined herein, all capitalized terms used herein shall have
the same meaning ascribed to such terms in the Lease (as hereinafter defined).
R E C I T A L S:
WHEREAS, on October __, 2000, Landlord and Tenant entered into that
certain Lease Agreement (the "LEASE") whereby Landlord leased certain Premises
located in the Building to Tenant pursuant to certain terms and provisions more
particularly described therein;
WHEREAS, as provided in Paragraph 8 of the Lease, Tenant desires to take
possession of and accept the Premises subject to the terms and provisions
hereof.
NOW, THEREFORE, for and in consideration of the premises, and the mutual
covenants and agreements contained herein and in the Lease, Landlord and Tenant
hereby expressly covenant, acknowledge and agree as follows:
1. Except as set forth in Exhibit "D" to the Lease, Landlord has no
further obligation to install or construct any leasehold improvements,
modifications or alterations to the Premises.
2. The Commencement Date shall be November 1, 2000. Pursuant to the
provisions of the Lease, the first monthly installment of Base Rental shall
become due and payable on November 1, 2000.
3. The expiration date of the Lease shall be October 31, 2008.
4. The Premises contain 85,414 square feet of Rentable Space.
5. Except as specifically set forth herein, as of the date of this
Memorandum the Lease has not been modified, altered, supplemented, superseded or
amended in any respect.
6. All terms, provisions and conditions of the Lease are and remain in
full force and effect, and are hereby expressly ratified, confirmed, restated
and reaffirmed in each and every respect.
IN WITNESS WHEREOF, this Memorandum is entered into by Landlord and
Tenant on the date first set forth above.
LANDLORD: TENANT:
-------- ------
WIREDZONE PROPERTY, L.P. COMBIMATRIX CORPORATION
By: WiredZone Property GenPar, LLC,
its general partner By:
---------------------------------
Its:
--------------------------------
By:
----------------------------
Its:
---------------------------
EXHIBIT "F" TO LEASE AGREEMENT
BUILDING RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, corridors, stairways and other
similar areas shall not be obstructed by Tenant or used by Tenant for any
purpose other than ingress and egress to and from the Premises and for going
from or to another part of the Building.
2. Plumbing fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable
materials shall be thrown or placed therein. Damage resulting to any such
fixtures or appliances or surrounding areas from misuse by Tenant shall be
repaired at the sole cost and expense of Tenant, and Landlord shall not in any
case be responsible therefor.
3. No signs, advertisements or notices shall be painted or affixed on or
to any windows or doors or other parts of the Building except of such color,
size and style and in such places as shall be first approved in writing by
Landlord. No nails, hooks or screws shall be driven or inserted in any part of
the Building which would impact Building systems except by the Building
maintenance personnel nor shall any part of the Building be defaced by Tenant.
EXHIBIT "E" - PAGE 1 OF 1
<PAGE> 29
4. Tenant shall not place any additional lock or locks on any doors in or
to the Premises without Landlord's prior written consent. Two keys to the locks
on the doors which access the Premises from the Common Areas shall be furnished
by Landlord to Tenant, and Tenant shall not have any duplicate keys made.
Additional keys required by Tenant shall be made by Landlord at Tenant's sole
expense. Upon termination of the Lease, Tenant shall return all keys to Landlord
and shall provide to Landlord a means of opening all safes, cabinets and vaults
being left with the Premises.
5. With respect to work being performed by Tenant in the Premises with
the approval of Landlord, Tenant will refer all contractors, contractor's
representatives and installation technicians rendering any service to them to
Landlord for Landlord's supervision, approval and control before the performance
of any contractual services. This provision shall apply to work performed in the
Building including, but not limited to, installation of telephones, telegraph
equipment, electrical devices and attachments, and any and all installation of
every nature affecting floors, walls, woodwork, trim, windows, ceilings,
equipment and any other physical portion of the Building. Tenant must have
Landlord's written approval prior to employing any contractor. Any and all such
contractors shall comply with these Rules and Regulations for such services
including, but not limited to, insurance requirements. All work in or on the
Building shall comply with any and all codes. (To the extent the terms and
conditions of this Rule 5 conflict with the terms and conditions of the
Leasehold Improvements Agreement, the terms and conditions of such Leasehold
Improvements Agreement shall control.)
6. Movement in or out of the Building of furniture or office equipment,
or dispatch or receipt by Tenant of any bulky materials, merchandise or
materials which require use of elevators or stairways, or movement through the
Building entrances or lobby shall be restricted to such hours as Landlord shall
reasonably designate. All such movement shall be under the supervision of
Landlord and in the manner agreed between Tenant and Landlord by prearrangement
before performance. Such prearrangement initiated by Tenant will include
determination by Landlord, and subject to its decision and control, as to the
time, method and routing of movement and as to limitations for safety or other
concerns which may prohibit any article, equipment or any other item from being
brought into the Building. Tenant is to assume all risk as to damage to articles
moved and injury to person or public engaged or not engaged in such movement,
including equipment, property and personnel of Landlord and other tenants if
damaged or injured as a result of acts in connection with carrying out this
service for Tenant from the time of entering the property to completion of work;
and Landlord shall not be liable for acts of any person engaged in, or any
damage or loss to any of said property or persons resulting from any act in
connection with such service performed for Tenant.
7. Landlord shall have the power to prescribe the weight and position of
safes and other heavy equipment, which shall, in all cases, be positioned to
distribute the weight and stand on supporting devices approved by Landlord. All
damage done to the Building by taking in or putting out any property of Tenant,
or done by Tenant's property while in the Building, shall be repaired at the
expense of Tenant.
8. Corridor doors, when not in use, shall be kept closed.
9. Tenant shall cooperate with Landlord's employees in keeping its
Premises neat and clean. Tenant shall not employ any person for the purpose of
such cleaning other than the Building's cleaning and maintenance personnel.
Landlord shall be in no way responsible to Tenant, its agents, employees,
contractors or invitees for any loss of property from the Premises or public
areas or for any damage to any property thereon from any cause whatsoever.
10. To insure orderly operation of the Building, Landlord and Tenant
shall, prior to the Commencement Date, agree on reasonable rules and policies
respecting deliveries to the Premises on Tenant's behalf or required for
Tenant's operations.
11. Should Tenant require telegraphic, telephonic, annunciator or other
communication service, Landlord will direct the electrician where and how wires
are to be introduced and placed and none shall be introduced or placed except as
Landlord shall direct. Electric current shall not be used for power in excess of
standard office use or heating without Landlord's prior written permission.
12. Tenant shall not make or permit any improper noises in the Building
or otherwise interfere in any way with other tenants or persons having business
with them.
13. Nothing shall be swept or thrown into the corridors, halls, elevator
shafts or stairways. No animals shall be brought into or kept in, on or about
the Premises.
14. Tenant shall not permit its employees to install or utilize space
heaters in the Premises.
15. No portion of the Premises shall at any time be used or occupied as
sleeping or lodging quarters.
16. Landlord will not be responsible for money, jewelry or other personal
property lost or stolen in or from the Premises or public areas regardless of
whether such loss or theft occurs when the area is locked against entry or not.
17. The Premises shall not be occupied by an average of more than one (1)
person per 200 square feet of Rentable Space in the Premises without the prior
written consent of Landlord.
18. Landlord reserves the right to rescind any of these rules and
regulations and to make such other and further rules and regulations as in its
judgment shall from time to time be advisable for the safety, protection,
<PAGE> 30
care and cleanliness of the Building, the use and operation thereof, the
preservation of good order therein and the protection and comfort of the tenants
and their agents, employees and invitees, which rules and regulations, when made
and written notice thereof is given to Tenant, shall be binding upon Tenant in
like manner as if originally herein prescribed. No subsequent changes shall be
permitted to the extent they are inconsistent with the terms and conditions of
the Lease.
19. Notwithstanding anything to the contrary contained herein, the
Building Rules and Regulations to be applied to Tenant shall in no event be less
favorable or adversely inconsistent with those applied to other tenants in the
Building.
EXHIBIT "F" - PAGE 3 OF 2
<PAGE> 31
Rider No. 101
PARKING FACILITIES
At all times during the Lease Term and any renewal or extension thereof,
and so long as this Lease and any renewal or extension thereof is in full force
and effect and no event of default shall have occurred and be continuing under
this Lease, Tenant shall be permitted the use of the surface parking lot
associated with the Building for parking automobiles owned by Tenant and its
employees, agents and invitees. Landlord hereby agrees to make available to
Tenant, and Tenant hereby agrees to take, subject to the further provisions of
this Rider No. 101, during the Lease Term, and any extension or renewal thereof,
all or some of the following permits to park automobiles on the surface parking
lot:
A total of * permits for unassigned and unreserved parking in the
surface parking lot.
Landlord and its parking lot operator shall have the right from time to
time to reconfigure the surface parking lot and to promulgate reasonable rules
and regulations regarding the parking permits available to Tenant hereunder and
others, including, but not limited to, the flow of traffic to and from various
parking areas, angles and direction of parking, and the like. Tenant agrees to
comply, and to cause its employees, agents and visitors to comply, with such
rules and regulations (and reasonable additions and amendments thereto) as
Landlord and its parking lot operator may promulgate from time to time. Landlord
and its parking lot operator will not be responsible for money, jewelry or other
personal property lost or stolen in or from the parking lot or public areas
regardless of whether such loss or theft occurs when the parking lot or such
area is locked or otherwise secured against entry or not.
* based on a ratio of 3.1 permits for every 1,000 square feet of Rentable Space
in the Premises for which Base Rental is being paid per Rider No. 106 hereto.
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<PAGE> 32
Rider No. 102
TENANT'S OPTION TO RENEW
Tenant may, at its option and subject to the terms hereof, renew the
Lease Term for two (2) additional term(s) of sixty (60) months each, provided
that this Lease must be in full force and effect and no event of default may
exist under this Lease at the time of exercise of such option or at the time the
renewal term would begin. Such renewal shall be upon the same terms and
conditions as provided elsewhere in this Lease, except that (i) this Lease may
not be renewed more often than as set forth above, (ii) Landlord shall have no
obligation to install improvements in the Premises, and (iii) the annual Base
Rental for such renewal period(s), and each monthly installment thereof, shall
be determined as provided below. Each such option shall be exercised by Tenant
giving notice to Landlord by certified mail, return receipt requested, at least
twelve (12) months prior to the end of the then-existing term, and, if not so
exercised, such option not so exercised and any subsequent option to renew shall
automatically expire and terminate. Notwithstanding anything to the contrary
contained herein, Tenant's option herein shall be subject to a determination by
Landlord, at Landlord's sole discretion, that Tenant's financial condition at
the time it makes such election is comparable or better than the financial
condition of Tenant at the time Tenant had executed this Lease (i.e., Tenant
must have a total equity capitalization at the time of each such renewal notice
of at least $50,000,000). If Tenant so elects to renew the Lease Term, following
Tenant's exercise of such renewal option, upon request from Landlord, Tenant and
Landlord will enter into a renewal agreement by which this Lease will be renewed
in accordance with the terms set forth in this Rider.
The annual Base Rental for each renewal period shall be the Prevailing
Market Rental Rate for comparable buildings in the "North End Submarket of
Seattle" taking into consideration the unique features and location of the
Building, and the use, location and floor level within the Building for the
subject space as well as the intended term of such lease under consideration and
the date such renewal term is to commence. The Prevailing Market Rental Rate
shall be exclusive of the tenant improvements which are above the initial
Allowance under the Lease. The parties shall negotiate in good faith to
establish the Prevailing Market Rental Rate. If the parties are unable to agree
on such rate within thirty (30) days after Tenant gives Landlord is notice
exercising the Renewal Option (the "Notice Date"), then each party shall appoint
an appraiser who is a member of the American Institute of Real Estate Appraisers
(an "Appraiser") and has at least five (5) years experience appraising rental
properties in the greater Seattle area. If the Appraisers are unable to reach
agreement about Prevailing Market Rental Rate within forty-five (45) days after
the Notice Date, then either party on written notice to the other may request
appointment of a single arbitrator by the American Arbitration Association
("AAA") in accordance with its then prevailing real estate valuation arbitration
rules as modified by this Rider. Once the arbitrator is appointed, each
Appraiser shall promptly submit his/her determination of Prevailing Market
Rental Rate to the arbitrator. The arbitrator shall determine Prevailing Market
Rental Rate (applying the standards of determination set forth above) within ten
(10) days based solely on the materials submitted by the Appraisers and the
determination shall not exceed or be less than the Market Rent determinations of
the Appraisers. Each party shall bear the expense of retaining its Appraiser.
The fees and expenses of the arbitrator and other expenses of the arbitration
shall be borne equally by the parties. The arbitrator's determination of
Prevailing Market Rental Rate shall be final and binding on the parties.
Judgment upon the determination of Prevailing Market Rental Rate rendered by the
arbitrator may be entered into any court having jurisdiction over this matter.
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<PAGE> 33
Rider No. 103
EXPANSION OPTION
Provided (i) there is no event of default hereunder and (ii) Tenant's
total equity capitalization at the time of such expansion notice is at least
$50,000,000.00, Tenant shall have the right between the 48th and 50th month of
the Lease Term to provide Landlord with 18 months advance written notice of
Tenant's need for additional space equal to an amount up to 25% of the 85,414
actual square footage initially leased (the "Expansion Space"). If such notice
is given, Landlord shall and guarantees to provide Tenant with a solution for
accommodating said request. If the solution is within the Building, the term of
the lease with respect to such Expansion Space shall be coterminous with the
Lease Term for the original Premises. If the solution is in a structure to be
constructed as an addition to the Building or as another stand alone building
adjacent to the Building, then the term of the lease for the Expansion Space
shall be a minimum of seven years. In either case rental rates will be
negotiated based upon 100% of the then current market rents for similar space at
the time of the renewal notice by Tenant. The other terms and conditions
relating to such Expansion Space shall be substantially similar to those in the
Lease. The process for determining the fair market rent shall be as set forth in
Rider No. 102 to this Lease. In the event Tenant in its notice requires more
than 25% of the 85,414 actual square footage leased, Landlord shall use its best
efforts to provide a reasonably acceptable solution for Tenant in the Building,
any adjacent buildings or elsewhere. Said solution shall be mutually agreeable
to the parties with respect to location, timing and determination of fair market
rent.
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<PAGE> 34
Rider No. 104
RIGHT OF FIRST OPPORTUNITY
1. RIGHT OF FIRST OPPORTUNITY. Provided this Lease is then in full force
and effect and no event of default as defined in Paragraph 25 of this Lease has
occurred and remains uncured, and subject to the terms hereof, Tenant shall have
the right of first opportunity during the first sixty (60) months of the Lease
Term to lease all (or a portion) of the additional space consisting of the area
on the 2nd and 3rd floors designated and referred to on Exhibit "B-2" attached
to this Lease as the "RIGHT OF FIRST OPPORTUNITY SPACE", for a term beginning on
the Effective Date (as hereinafter defined) and ending contemporaneously with
the expiration of the Lease Term (unless sooner terminated pursuant to the terms
of this Lease, and subject to any rights of extension contained in this Lease).
The right of first opportunity contained herein shall automatically terminate
following the expiration of such sixty (60) month period (unless sooner
terminated pursuant to the terms of this Lease).
2. NOTICE BY LANDLORD. Prior to entering into bona fide negotiations
with an existing tenant in the Building or a prospective tenant to lease all or
any part of the Right of First Opportunity Space (or if an existing tenant of
the Right of First Opportunity Space desires to extend the term of its lease
thereof), Landlord shall notify Tenant of such fact and shall include in such
notice the Prevailing Market Rental Rate for such space. Tenant shall have a
period of ten (10) business days from the date of delivery of such notice to
notify Landlord whether Tenant elects to exercise the right granted hereby to
lease such portion of the Right of First Opportunity Space. If Tenant fails to
give any notice to Landlord within the required ten (10) business day period,
Tenant shall be deemed to have refused its right to lease the Right of First
Opportunity Space. Notwithstanding anything to the contrary contained herein,
Tenant's option herein shall be subject to a determination by Landlord, in
Landlord's reasonable discretion, that Tenant's financial condition (i.e., total
equity capitalization at the time of such notice of at least $50,000,000) is
unchanged.
3. REFUSAL BY TENANT. If Tenant so refuses its right to lease the Right
of First Opportunity Space (either by giving written notice thereof or by
failing to give any notice), Landlord shall have the right to lease all or any
portion of the Right of First Opportunity Space to an existing tenant in the
Building or a prospective tenant (or to extend the term of the lease of an
existing tenant) on such terms and provisions as may be acceptable to Landlord.
If Tenant so refuses its right to lease the Right of First Opportunity Space,
then if Landlord shall enter into a lease with a prospective tenant (or extend
the term of the lease of an existing tenant) for all or any part of the Right of
First Opportunity Space, Tenant's right of first opportunity as to such portion
of such Right of First Opportunity Space shall terminate with respect to that
lease but not with respect to future opportunities for the space in the event
such shall become available.
4. ACCEPTANCE BY TENANT. Upon the exercise by Tenant of its right of
first opportunity as provided in Paragraph 2, Landlord and Tenant shall, within
ten (10) business days after Tenant delivers to Landlord notice of its election,
enter into a written amendment modifying and supplementing this Lease and
containing other appropriate terms and provisions relating to the addition of
the Right of First Opportunity Space to the Premises (including specifically any
increase, adjustment, or augmentation of rent as a result of such addition). The
annual Base Rental to be paid under this Lease for the Right of First
Opportunity Space so leased shall be at the Prevailing Market Rental Rate as
determined in the manner described in Rider No. 102 hereto. The payment of the
new Base Rental for the Right of First Opportunity Space shall commence on the
Effective Date, which shall be the later of (a) thirty (30) days following the
expiration date of the term of any lease with another tenant covering the Right
of First Opportunity Space, or (b) the date agreed upon by Landlord and Tenant
if the Right of First Opportunity Space is not covered by a prior tenant lease,
or, in the event they are unable to agree, shall be the date ninety (90) days
from the date upon which Tenant notified Landlord of its election to lease the
Right of First Opportunity Space. Rent for a partial month shall be prorated.
Possession of the Right of First Opportunity Space shall be delivered to Tenant
in an "as is" condition. Landlord shall not be liable for the failure to give
possession of the Right of First Opportunity Space on the Effective Date by
reason of the holding over or retention of possession of any tenant, tenants, or
occupants (provided Landlord uses commercially reasonable diligence in
prosecuting eviction of such tenant or occupant), or for any other reason, and
any such failure shall not impair the validity of this Lease, or extend the
Term, but the rent for such Right of First Opportunity Space shall be abated and
the Commencement Date extended until possession is delivered to Tenant, and such
abatement shall constitute full settlement of all claims that Tenant might
otherwise have against Landlord by reason of such failure to give possession of
the Right of First Opportunity Space to Tenant on the effective date.
5. TERMINATION OF RIGHT. Any termination of this Lease during the
original Lease Term (or any extension thereof) or any non-permitted assignment
or subleasing by Tenant pursuant to this Lease shall terminate the right of
first opportunity of Tenant contained herein.
6. SUBORDINATE RIGHT. [Intentionally Deleted.]
7. ADDITIONAL RIGHT OF FIRST OPPORTUNITY. In addition to the right
described in Paragraph 2 above, Tenant shall have the right of first opportunity
to lease the entirety of any new structure or extension to the Building that
Landlord may construct on the land. Such right shall be for the first
eighty-four (84) months of the Lease Term. Rental rates shall be negotiated
based upon 100% of the then current market rents for similar space in the North
End Submarket at the time. The other terms and conditions relating to such new
structure or extension shall be substantially similar to those in the Lease. The
Prevailing Market Rental Rate shall be calculated using the methodology set
forth in Rider No. 102 to the Lease. In the event Tenant exercises this option
and leases the entire new structure or extension, then Tenant may relinquish the
entirety of its presence on the 3rd floor of the initial Premises.
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<PAGE> 35
Rider No. 106
SCHEDULE OF BASE RENTAL
Base Rental shall be payable as follows:
<CAPTION>
MONTHLY NNN
MONTHS SIZE (RSF) ANNUAL NNN RENT RENT
------ ---------- --------------- --------------
1-10 42,868 $ ** $ **
11-20 63,537 $ ** $ **
21-24 85,414 $ ** $ **
25-48 85,414 $ ** $ **
49-72 85,414 $ ** $ **
73-96 85,414 $ ** $ **
ALTHOUGH TENANT INTENDS TO COMPLETE THE BUILD-OUT OF THE ENTIRE
PREMISES, IT IS INTENDED THAT TENANT WILL NOT UTILIZE CERTAIN PORTIONS OF THE
PREMISES UNTIL A LATER DATE. THE SCHEDULE OF BASE RENTAL SET FORTH ABOVE DEFINES
THE MINIMUM TAKE DOWN SCHEDULE OF SQUARE FOOTAGE IN THE PREMISES. SAID BASE
RENTAL SCHEDULE SHALL BE APPLICABLE REGARDLESS IF TENANT OCCUPIES AND USES LESS
THAN THE MINIMUM SPACE SET FORTH ABOVE; PROVIDED, HOWEVER, IF TENANT OCCUPIES
AND USES MORE THAN THE MINIMUM SQUARE FOOTAGE STATED ABOVE, TENANT SHALL BE
OBLIGATED TO PAY THE ADDITIONAL BASE RENTAL AND ADDITIONAL RENTAL (I.E.,
TENANT'S PROPORTIONATE SHARE OF OPERATING EXPENSES) ASSOCIATED WITH SUCH
ADDITIONAL SQUARE FOOTAGE. TENANT AGREES TO ADVISE LANDLORD AT ANY TIME THAT
TENANT USES SQUARE FOOTAGE IN EXCESS OF THE INTENDED TAKE DOWN SCHEDULE.
LANDLORD SHALL HAVE THE RIGHT, FROM TIME TO TIME, TO VERIFY TENANT'S ACTUAL
USAGE OF SPACE IN THE PREMISES AND SHALL ADVISE TENANT IF LANDLORD REASONABLY
BELIEVES THAT TENANT IS UTILIZING EXCESS SQUARE FOOTAGE FOR WHICH IT WILL
THEREAFTER BE CHARGED BASE RENTAL AND ADDITIONAL RENTAL HEREUNDER.
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