Washington-Seattle-3406 East Union Street Lease - Martin Tobias, Alex Tobias and Encoding.com Inc.
LEASE AGREEMENT
between
MARTIN TOBIAS AND ALEX TOBIAS
("LANDLORD")
and
ENCODING.COM, INC.
("TENANT")
Dated: September 1, 1998
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TABLE OF CONTENTS
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1. Lease; Rights with Regard to Sale of Property......................... 1
1.1 Lease...................................................... 1
1.2 Right of First Refusal..................................... 1
2. Term and Termination.................................................. 2
2.1 Initial Term............................................... 2
2.2 Extension Options.......................................... 2
2.3 Early Termination.......................................... 2
3. Rent.................................................................. 2
3.1 Monthly Rent............................................... 2
3.2 Periodic Rent Increases.................................... 2
3.3 Late Payments.............................................. 3
3.4 Additional Rent for Landlord's Work........................ 3
4. Taxes................................................................. 3
4.1 Real Estate Taxes.......................................... 3
4.2 Personal Property Taxes.................................... 3
5. Use................................................................... 4
6. Utilities............................................................. 4
6.1 Utilities.................................................. 4
6.2 Payment of Utilities....................................... 4
7. Maintenance and Repairs............................................... 4
7.1 Tenant's Obligations....................................... 4
7.2 Tenant's Failure to Repair................................. 5
7.3 Landlord's Obligations..................................... 5
8. Alterations and Improvements.......................................... 5
8.1 Signage.................................................... 5
8.2 Tenant's Security System................................... 5
8.3 Installation; Consent; Ownership........................... 6
8.4 Liens; Indemnification..................................... 6
8.5 Removal of Alterations; Surrender.......................... 6
8.6 Surrender.................................................. 7
9. Insurance; Indemnity.................................................. 7
9.1 Liability Insurance........................................ 7
9.2 Tenant's Personal Property Insurance....................... 7
9.3 Tenant's Real Property Insurance........................... 8
9.4 Waiver of Recovery and Subrogation......................... 8
9.5 Indemnification............................................ 8
10. Damage or Destruction; Condemnation.................................. 10
10.1 Damage Rendering Building Untenantable..................... 10
10.2 Condemnation............................................... 10
10.3 Abatement of Rent.......................................... 10
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TABLE OF CONTENTS
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11. Assignment and Subletting............................................ 11
11.1 Assignment Without Consent................................ 11
11.2 Assignment With Consent................................... 11
11.3 Effect of Transfer........................................ 11
12. Landlord's Warranties................................................ 11
13. Tenant's Warranties.................................................. 12
14. Defaults; Remedies................................................... 12
14.1 Defaults.................................................. 12
14.2 Landlord's Remedies....................................... 12
14.3 Default by Landlord....................................... 13
14.4 Tenant's Remedies......................................... 13
14.5 Self-help................................................. 13
15. Environmental Provisions............................................. 14
15.1 Environmental Law......................................... 14
15.2 Hazardous Substances...................................... 14
15.3 Landlord's Representation; Agreement...................... 14
15.4 Tenant's Agreement........................................ 14
15.5 Indemnity................................................. 14
15 6 Survival.................................................. 15
16. General Provisions................................................... 15
16.1 Subordination............................................. 15
16.2 Tenant Audit.............................................. 15
16.3 Estoppel Statement........................................ 15
16.4 Landlord's Interests...................................... 16
16.5 Landlord Access........................................... 16
16.6 Severability.............................................. 16
16.7 Entire Agreement; Amendments; Waiver...................... 16
16.8 Binding Effect; Choice of Law............................. 16
16.9 Attorneys' Fees........................................... 17
16.10 Quiet Possession.......................................... 17
16.11 Counterparts.............................................. 17
17. Notices.............................................................. 17
18. Waiver of Consequential Damages...................................... 17
19. Confidentiality...................................................... 17
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease"), is made effective as of September 1,
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1998, (the "Commencement Date"), by and between Martin Tobias and Alex Tobias,
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individuals residing in the state of Washington (collectively, "Landlord"), and
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Encoding.com, Inc., a Delaware corporation ("Tenant").
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1 Lease; Rights with Regard to Sale of Property.
1.1 Lease. Landlord leases to Tenant, and Tenant leases from Landlord,
subject to the terms and conditions set forth in this Lease, the building
("Building") and that certain real property (the "Land") located at 3406 East
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Union Street, Seattle, Washington, and as more fully and legally described on
Exhibit A attached hereto, upon which the Building is located (collectively, the
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"Property"), together with appurtenances and the benefits of any appurtenant
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easements and rights of way.
1.2 Right of First Refusal. Landlord hereby grants to Tenant, so long as
Tenant is not in material default under this Lease, a right of first refusal to
purchase the Property on the terms and conditions contained in this Section 1.2.
(a) If at any time during the Term (as defined in Section 2.1),
Landlord receives a bona fide offer (an "Offer") from any person to purchase the
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property (the "Potential Buyer"), and Landlord wants to accept such offer,
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Landlord shall send to Tenant a copy of the Offer, deleting the Potential
Buyer's name and notifying Tenant of Landlord's intention to accept the Offer.
Tenant shall have the right within thirty (30) days after receipt of the Offer
to accept the terms of the Offer in its own name or in the name of a nominee for
the gross purchase price and on the terms specified in the Offer subject to any
modifications permitted under Section 1.2(b).
(b) Landlord and Tenant acknowledge and agree that Tenant plans,
without obligation, to undertake substantial improvements (the "Improvements")
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to the Property pursuant to Section 8.3. Provided such Improvements are not
removed in accordance with Section 8.5, if Tenant chooses to accept an Offer,
Tenant shall be entitled to deduct from the purchase price contained in such
Offer an amount equal to the unamortized cost of those Improvements undertaken
by Tenant during the initial two years of the Lease (the "Initial
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Improvements"), as stated by Tenant in Tenant's Federal income tax return
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relating thereto. For purposes of this Section 1.2, the cost of the Improvements
shall be amortized using the straight-line amortization method, with the
amortization period beginning with the year in which the Improvements were made
and extending for the following five (5) years. To illustrate the mechanics of
this credit, assume that: (a) the cost of the Improvements is $250,000, made in
the first year of the Term; (b) the right of first refusal is exercised three
(3) years from the Commencement Date, and (c) the purchase price contained in
the Offer is $2,000,000. The cost of the Improvements will be amortized at the
rate of $50,000 per year, the amount of the credit will be $100,000 ($250,000
minus $150,000), and Tenant will be entitled to accept the terms of the Offer
with a purchase price of $1,900,000.
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(c) If Tenant elects not to purchase the Property within such thirty
(30) day period, Landlord may then sell the Property to the Potential Buyer,
provided that the sale is on the same terms and conditions and for the same
price set forth in the Offer, a true copy of which was sent to Tenant. In the
event Landlord sells the Property to the Potential Buyer, the terms of this
Lease shall continue in full force and effect as if the Property had not been
sold.
(d) The right of first refusal contained in this Section 1.2 shall
extend throughout the Term and any Options exercised by Tenant. The failure of
Tenant to exercise the right of first refusal shall not be considered a waiver
of such right with regard to any future sales of the Property by Landlord;
provided, however, that the right of first refusal shall not apply to any
successor to Landlord through a bona fide sale of the Property.
2. Term and Termination.
2.1 Initial Term. This Lease shall have a term (the "Term") of five (5)
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years and shall commence on September 1, 1998 (the "Lease Commencement Date")
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and shall end on September 1, 2003, or such later or earlier date as provided in
Sections 2.2 and 2.3 (the "Lease Termination Date"). Tenant shall not be
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obligated to pay Rent, as defined below, until Tenant takes possession of the
Property (the "Rent Commencement Date").
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2.2 Extension Options. Tenant shall have the right to extend this Lease
for one (1) additional period of five (5) years (an "Option"), upon the same
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terms and conditions of this Lease. To exercise an Option, Tenant must not be in
material default under this Lease and must give written notice to Landlord that
Tenant is exercising the Option at least sixty (60) days before the Term
expires.
2.3 Early Termination. Notwithstanding any other provision of this Lease,
Tenant shall have the right, at Tenant's election, to terminate this Lease one
(1) year from the Lease Commencement Date by giving 30 days prior written
notice. Upon Tenant's early termination of the Lease pursuant to this Section
2.3, and as consideration therefor, Tenant shall pay to Landlord, within ten
(10) days of the effective date of such termination, the amount of Fifty Two
Thousand Four Hundred Forty Three Dollars ($52,443.00), which is equal to six
(6) months Rent (as defined in Section 3.1 below).
3. Rent.
3.1 Monthly Rent. Tenant shall pay to Landlord as monthly rent for the
Property Eight Thousand Seven Hundred Forty Dollars and Fifty Cents ($8,740.50),
in advance on or before the first day of each month of the Term (the "Basic
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Rent"). Basic Rent for a partial month shall be prorated on the basis of a
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thirty (30) day month. Basic Rent shall be payable to Landlord at the address
stated herein or to such other persons or at such other places as Landlord may
designate in writing.
3.2 Periodic Rent Increases. Upon exercise of the Option at the expiration
of the Term, the amount due as Basic Rent under Section 3.1 shall be increased
by a percentage equal to the cumulative percentage increase in the Consumer
Price Index, U.S. City Average, All
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Urban Consumers (1982-84=100), as published by the United States Department of
Labor's Bureau of Labor Statistics, that has occurred during the preceding five
(5) years; provided, however, that the increase for each year cumulated shall be
no less than one percent (1%) and no more than five percent (5%).
3.3 Late Payments. Failure by Tenant to pay Basic Rent or any other sums
due hereunder within ten (10) business days after such payment is due shall
subject such payment to a late fee equal to five percent (5%) of the payment
that is late.
3.4 Additional Rent for Landlord's Work. During the initial Term of the
Lease, Tenant shall pay to Landlord, in addition to Basic Rent, a monthly
payment of One Thousand Two Hundred Forty One Dollars and Forty Cents
($1,241.40) as reimbursement to Landlord for work and improvements Landlord made
to Property prior to Tenant's possession of the Property ("Additional Rent").
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Basic Rent and Additional Rent shall hereinafter be referred to as "Rent".
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Tenant shall not pay Additional Rent during any Option period.
4. Taxes.
4.1 Real Estate Taxes. Tenant shall be responsible for and shall pay when
due, all general real estate taxes ("Real Estate Taxes"), levied against the
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Property that are allocable to the Term, including any local improvement
district assessment that is levied upon or assessed against the Property during
the Term or otherwise payable as of the Commencement Date. Real Estate Taxes
shall exclude, without limitation, any personal or corporate income, franchise,
gross receipts, corporation, capital levy, excess profits, revenue, inheritance,
gift, estate, payroll or stamp tax or any tax upon the sale, transfer or
assignment of Landlord's title or estate which at any time may be assessed
against or become a lien upon all or any part of the Property or this leasehold.
In addition, Real Estate Taxes shall exclude any liens or taxes, penalties or
interest that are allocable to the Property for any time prior to the Term. If
at any time during the Term the laws concerning the methods of real property
taxation prevailing at the commencement of the Term are changed so that a tax or
excise on rents or any other such tax, however described, is levied or assessed
against Landlord as a direct substitute in whole or in part for any Real Estate
Taxes, before delinquency the substitute tax or excise on rents shall be deemed
to be Real Estate Taxes. Landlord shall promptly provide Tenant with the
statement of the Real Estate Taxes upon receipt of the same.
4.2 Personal Property Taxes. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon Tenant owned alterations and
improvements, utility installations, trade fixtures, furnishings, equipment and
all personal property of Tenant contained in the Building or on the Property.
When possible, Tenant shall cause its trade fixtures, furnishings, equipment and
all other personal property to be assessed and billed separately from the real
property of Landlord. If any of Tenant's personal property shall be assessed
with Landlord's real property, Tenant shall pay Landlord the taxes attributable
to Tenant within twenty (20) days after receipt of a written statement setting
forth the taxes applicable to Tenant's property.
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5 Use. The Building shall be used and occupied for office, computer and
audio/visual equipment, and maintenance of electronic products, sales activities
related thereto and such other lawful uses permitted by and in compliance with
applicable governmental regulations. Tenant shall, at its expense, comply
promptly with all laws, rules, and regulations promulgated by any governmental
authority having jurisdiction over the Building relating to Tenant's use. Tenant
shall not use or permit the use of the Building for any illegal purpose. Tenant
shall not use or permit the use of the Building in a manner that creates waste
or a nuisance, or causes damage to the Building, or that unreasonably disturbs
owners and/or occupants of, or causes damage to, neighboring premises or
properties. Tenant shall have the exclusive right to use, in compliance with all
laws, all of the parking stalls available for use located within the Building,
subject to the rules and regulations and any charges that may be established or
altered for such parking facilities from time to time.
6. Utilities.
6.1 Utilities. Landlord will provide the following utilities which shall
be directly metered to Tenant:
(a) Electricity for lighting, equipment, and appliances used in the
tenant's business,
(b) Heating, venting and air conditioning system that controls all
areas of the Building to a temperature appropriate for Tenant's business; and
(c) Water for drinking, restroom and office cleaning purposes.
6.2 Payment of Utilities. Tenant shall pay for all water, gas, heat,
light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Building or to Tenant,
together with any taxes thereon. Landlord shall promptly provide Tenant with
copies of all utility statements upon receipt of the same.
7. Maintenance and Repairs.
7.1 Tenant's Obligations. Subject to the provisions of Section 7.3
(Landlord's obligations to repair) and Section 10 (damage and destruction and
condemnation), Tenant shall, at Tenant's sole cost and expense and at all times,
keep the Building in good order, condition, and repair, including, without
limiting the generality of the foregoing, all equipment or facilities serving
the Building and located thereon, such as plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities, telecommunications, fire sprinkler
and/or standpipe and hose or other automatic fire extinguishing system,
including fire alarm and/or smoke detection systems and equipment, fire
hydrants, fixtures, interior walls, ceilings, floors, windows, doors, plate
glass, and skylights. Tenant shall also keep the sidewalk adjacent to the
Building and all stairways, platforms, parking areas, and service areas which
solely serve and/or are immediately adjacent to the Building in good maintenance
and repair and clear of debris, rubbish, snow, ice and excess moisture or water.
Tenant, in keeping the Building in good order, condition and repair, shall
exercise and perform good maintenance practices. Tenant's obligations shall
include
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replacements or renewals when necessary to keep the Building and the
improvements on all or a part of the Building in good order, condition, and
state of repair. Tenant shall be responsible for all costs incurred in
connection with the maintenance and service of the following equipment and
improvements, if any, located in or on the Building: (i) heating, air
conditioning and ventilation equipment, (ii) fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing systems, including fire alarm and/or
smoke detection, and (iii) landscaping and yard maintenance. Tenant shall be
responsible for all costs and expenses required under such contract(s).
7.2 Tenant's Failure to Repair. If Tenant refuses or fails to perform its
repair obligations within a period of ten (10) days after receipt of written
notice or such longer period as may be reasonably required so long as Tenant has
commenced its repair obligations within ten (10) days after receipt of such
written notice from Landlord then, in addition to all other rights and remedies
available to Landlord, Landlord may, but is not required to, enter the Building
and make the repairs and the costs of the repairs shall be due from Tenant upon
demand provided, that Landlord shall not be obligated to give Tenant notice and
an opportunity to comply if there is an immediate danger to persons or property
or if an emergency exists and Tenant fails to perform its repair obligations.
7.3 Landlord's Obligations. At all times, Landlord shall, at Landlord's
sole cost and expense, keep in good order, condition and repair all structural
aspects of the Building and Property, including but not limited to the roof,
drains, downspouts, gutters, walls, floors, exterior utility services and
foundation of the Building. Landlord shall give reasonable advance notice to
Tenant of such repairs to the extent practical and feasible and Landlord's
repairs shall not affect Tenant's ability to transact business at the Building.
In the event Tenant's access to the Building is blocked due to Landlord's
repairs, Tenant's Rent shall be abated in an amount proportionate to that
portion of Tenant's space that is inaccessible due to the repairs. Other than
Landlord's obligations set forth in this Section 7.3 and in Section 10 hereof
(relating to destruction and condemnation of the Building), it is intended by
the parties hereto that Landlord have no further obligation to repair and
maintain the Building, the improvements located in or on the Building, or the
equipment in the Building, all of which obligations are intended to be that of
the Tenant under Section 7.1 of this Lease. It is the intention of the parties
that the terms of this Lease govern the respective obligations of the parties as
to maintenance and repair of the Building.
8. Alterations and Improvements.
8.1 Signage. Tenant is authorized to install at its expense a sign or
signs identifying Tenant by its business name on the Building exterior and to
install a sign at each employee and public entrance to the Building. All such
signs shall be installed in compliance with the requirements of applicable laws.
8.2 Tenant's Security System. Tenant may install keyed, combination, or
cipher locks on interior doors of the Building, provided Tenant obtains
Landlord's prior written consent, which shall not be unreasonably withheld.
Tenant may install an electronic security system in the Building, including, but
not limited to, pass card door lock systems and camera surveillance
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systems, provided Tenant obtains Landlord's prior written consent, which shall
not be unreasonably withheld. Tenant agrees to provide Landlord with such keys,
combinations, cards, passwords or other devices or information as required to
permit Landlord independent access to the Building. Landlord agrees to give
Tenant a minimum of one (1) full business day's notice prior to any entry by the
Landlord to the Building in the capacity as Landlord provided, however, that no
prior notice shall be required of Landlord in the case of an emergency situation
necessitating immediate action by Landlord to preserve or protect the Building
or Property.
8.3 Installation; Consent; Ownership. The parties agree that Tenant
intends, without obligation, to remodel and expand the Building substantially
and will incur all costs in connection with such a remodel. Consent to such
remodeling and expansion is hereby given by Landlord, conditioned upon: (i)
Tenant's acquiring all applicable permits required by governmental authorities,
(ii) the furnishing of copies of such permits together with a copy of the plans
and specifications for the alteration or improvement to Landlord prior to
commencement of the work, and (iii) the compliance by Tenant with all conditions
of such permits in a prompt and expeditious manner. Any alterations or
improvements by Tenant during the Term of this Lease (together, the "Tenant
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Work") shall be done in a good and workmanlike manner, with good and sufficient
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materials, and in compliance with all applicable law. Tenant shall promptly upon
completion furnish Landlord with as-built plans and specifications for any such
alteration or improvement.
8.4 Liens; Indemnification. Any alterations and additions to the Building
done by Tenant shall be for its own account and not as Landlord's agent. Tenant
has no authority, express or implied, to create or place any lien or encumbrance
of any kind or nature whatsoever upon, or in any manner to bind the interest of
Landlord in the Building, including with respect to those who may furnish
materials or perform labor or professional services with respect to any
construction or repairs. Tenant shall keep the Building free of and hold
Landlord harmless from any liens arising out of work performed, materials
furnished, or obligations incurred by or for Tenant. In the event that Tenant
shall contest the amount or validity of any such liens, Tenant shall furnish to
Landlord a surety bond satisfactory to Landlord in an amount equal to one and
one-half times the amount of such contested lien claim or demand, indemnifying
Landlord against liability, for the lien or claim, as required by law for the
holding of the Building free from the effect of such lien or claim. in addition,
Landlord may require Tenant to pay Landlord's reasonable attorneys' fees and
costs in participating in such action if Landlord shall decide it is in its best
interest to do so. Tenant agrees to provide Landlord with written notice of its
intent to cause the performance of any labor or services, or the furnishing of
any materials to or for the benefit of the Building, at least thirty (30) days
prior to the date of the commencement of performance, and Landlord shall have
the right to post notices of non-responsibility in or about the Building as
provided by law.
8.5 Removal of Alterations; Surrender. At any time during the Term, Tenant
may, at Tenant's expense and with Landlord's consent (which will not be
unreasonably withheld), remove Tenant's Work. All such removals shall be
accomplished in good workmanlike manner so as not to damage the primary
structure or structural qualities of the Building and other improvements on the
Building and Property. Unless otherwise agreed in writing, Landlord may
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require that Tenant's Work be removed by the expiration or earlier termination
of this Lease, notwithstanding that such installation may have been consented to
by Landlord. Landlord may require the removal at any time of all or any part of
Tenant's Work installed without the required consent of Landlord. Any part of
Tenant's Work that is not removed prior to the expiration or termination of this
Lease shall become the property of Landlord. In the event of removal, Tenant
shall, at its sole cost, repair any damage to the Building caused by such
removal of Tenant's Work.
8.6 Surrender. Tenant shall surrender the Property by the end of the last
day of the Lease term or any earlier termination date, with all of the
improvements, parts, and surfaces of the Building clean and free of debris and
in good operating order, condition and state of repair, ordinary wear and tear
excepted. "Ordinary wear and tear" shall not include any damage or deterioration
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that would have been prevented by Tenant performing all of its obligations under
this Lease. The obligation of Tenant shall include the repair of any damage
occasioned by the installation, maintenance or removal of Tenant's alterations
and improvements.
9. Insurance; Indemnity.
9.1 Liability Insurance. Tenant shall purchase and keep in force during
the Term a Commercial General Liability Policy (a "Policy") with limits of not
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less than $1,000,000.00 per occurrence covering bodily injury to persons,
including death, and damage to property, however occasioned, in, on or about the
Property. Such insurance shall be with responsible insurers acceptable to
Landlord (whose acceptance shall not be unreasonably withheld or delayed) and
shall provide coverage for the Tenant's insurable contractual liability assumed
in Section 9.5. Tenant shall cause its Commercial General Liability insurer to
name Landlord as an additional insured under the Policy to the extent of its
insurable contractual liability assumed in Section 9.5. The Policy shall contain
a severability of interests provision, a provision that the insurance provided
to Landlord as additional insured shall be primary to and not contributory with
insurance maintained by Landlord, a provision that losses and damages to
Landlord's Property are payable directly to Landlord and a provision that an act
or omission of one of the insureds or additional insureds that would void or
otherwise reduce coverage shall not reduce or void the coverage as to the other
named and additional insureds. Upon demand, the Landlord will be furnished with
a certificate of insurance evidencing that the foregoing insurance is in effect.
Such insurance shall (a) be kept current throughout the Term of this Lease, (b)
reflect the status Landlord as additional insured, and (c) provide for thirty
(30) days advance notice to Landlord in the event of cancellation of the Policy.
9.2 Tenant's Personal Property Insurance. Throughout the Term, Tenant
shall maintain, at Tenant's expense, standard form property insurance insuring
against the perils of fire, extended coverage, vandalism, malicious mischief,
special extended coverage ("All Risk") and sprinkler leakage. This insurance
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policy shall be upon all property owned by Tenant, for which Tenant is legally
liable and which is located at the Building, including but not limited to
furniture, fittings, installations, fixtures, and any other personal property of
Tenant, in an amount not less than ninety percent (90%) of the replacement cost
thereof at Tenant's option, Tenant may undertake to maintain deductibles under
the property insurance policy and may elect to self-
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insure some or all of the property located at the Building. Any undertaking by
Tenant to assume deductibles or self-insure its property located at the Building
shall not serve to adversely affect Landlord, and Landlord shall be protected
against loss or damage to Tenant's property in the same manner as if Tenant's
property were fully insured.
9.3 Tenant's Real Property Insurance. At all times during the Term, Tenant
shall maintain a standard form property insurance policy with responsible
insurers covering the Building against the perils of fire, extended coverage,
vandalism, malicious mischief, special extended coverage ("All Risk") and
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sprinkler leakage, glass and signs with an endorsement to cover the cost of law
mandated changes to the Building in connection with restoration after a
casualty. Such insurance shall provide coverage for all property in which
Landlord holds an interest in an amount not less than one hundred percent (100%)
of the replacement value of the property. Tenant shall cause its Real Property
insurer to name Landlord as an additional insured under the Policy to the extent
of its insurable contractual liability assumed in Section 9.5. At Tenant's
option, Tenant may undertake to maintain deductibles under the property
insurance policy. Any undertaking by Tenant to assume deductibles shall not
serve to adversely affect Landlord, and Landlord shall be protected against loss
or damage to Landlord's property in the same manner as if Landlord's property
were fully insured. Upon demand, the Landlord will be furnished with a
certificate of insurance evidencing that the foregoing insurance is in effect.
Such insurance shall (a) be kept current throughout the Term of this Lease, (b)
reflect the status Landlord as additional insured, (c) provide for thirty (30)
days advance notice to Landlord in the event of cancellation of the Policy, (d)
provide that losses and damages to Landlord's Property are payable directly to
Landlord and (e) comply with any insurance coverage required under any mortgage
or deed of trust on the Property.
9.4 Waiver of Recovery and Subrogation. Landlord and Tenant each release
and relieve the other and waive their entire right of recovery for loss or
damage to property located within or constituting a part or all of the Building
to the extent that the loss or damage is covered by (i) the injured party's
insurance, or (ii) the insurance the non-injured party is required to have under
this Section 9, whichever is greater. This waiver applies whether or not the
loss is due to the negligent acts or emissions of Landlord or Tenant, or their
respective officers, directors, employees, agents, contractors, or invitees.
Each of Landlord and Tenant shall have their respective property insurers
endorse the applicable insurance policies to reflect the foregoing waiver of
claims, provided however, that the endorsement shall not be required if the
applicable policy of insurance permits the named insured to waive rights of
subrogation on a blanket basis, in which case the blanket waiver shall be
acceptable.
9.5 Indemnification.
(a) Tenant. Subject to the waiver in Section 9.4, Tenant shall
indemnify and hold harmless Landlord from claims, suits, actions, or liabilities
for personal injury, death, or for loss or damage to property that arises out of
(i) Tenant's use of the Property, (ii) the negligence or willful misconduct of
Tenant, its employees, agents, contractors, or invitees, or (iii) any breach or
default by Tenant in the performance of any obligation on Tenant's part to be
performed under this Lease. This indemnity does not apply (x) to claims, suits,
actions, or
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liabilities to the extent they are caused by the negligent acts or omissions or
willful misconduct of Landlord, its agents, employees, contractors or invitees,
(y) to damage claims, suits, actions or liabilities waived under Section 9.4, or
(z) to the indemnity in Section 15.5.
In the absence of comparative or concurrent negligence on the part of
Landlord, its agents, their affiliates and subsidiaries, or their respective
directors, employees, or contractors, the foregoing indemnity shall also include
reasonable costs, expenses, and attorney's fees incurred in connection with any
indemnified claim or incurred by Landlord in successfully establishing the right
to indemnity. Tenant shall have the right to assume the defense of any claim
subject to this indemnity. Landlord agrees to cooperate fully with Tenant and
Tenant's counsel in any matter where Tenant elects to defend, provided Tenant
promptly reimburses Landlord for reasonable costs and expenses incurred in
connection with its duty to cooperate.
The foregoing indemnity is conditioned upon Landlord providing prompt
notice to Tenant of any claim or occurrence that is likely to give rise to a
claim, suit, action, or liability that will fall within the scope of the
foregoing indemnity, along with sufficient details that will enable Tenant to
make a reasonable investigation of the claim. When the claim is caused by the
joint negligence or willful misconduct of Tenant and Landlord, Tenant's duty to
indemnify and defend shall be proportionate to Tenant's allocable share of joint
negligence or willful misconduct.
(b) Landlord. Subject to the waiver in Section 9.4, Landlord shall
indemnify and hold harmless Tenant from claims, suits, actions, or liabilities
for personal injury, death or for loss or damage to property that arises from
(i) any activity work, or thing done, permitted, or suffered by Landlord, acting
exclusively in his capacity as Landlord and not as an employee of Tenant, in or
about the Property (ii) the negligence or willful misconduct of Landlord, its
employees, agents, or contractors or (in) any breach or default by Landlord in
the performance of any obligation on Landlord's part to be performed under this
Lease. This indemnity does not apply to claims, suits, actions or liabilities
(x) to the extent they are caused by the negligent acts or omissions or willful
misconduct of Tenant, its agents, employees, contractors or invitees, (y) to
damage, claims, suits, actions or liabilities waived under Section 9.4, or (z)
to the indemnity in Section 15.5.
In the absence of comparative or concurrent negligence on the part of
Tenant, its agents, their affiliates and subsidiaries, or their respective
directors, employees or contractors, the foregoing indemnity shall also include
reasonable costs, expenses, and attorney's fees incurred in connection with any
indemnified claim or incurred by Tenant in successfully establishing the right
to indemnity. Landlord shall have the right to assume the defense of any claim
subject to this indemnity with counsel reasonably satisfactory to Tenant. Tenant
agrees to cooperate fully with Landlord and Landlord's counsel in any matter
where Landlord elects to defend, provided Landlord shall promptly reimburse
Tenant for reasonable costs and expenses incurred in connection with its duty to
cooperate.
The foregoing indemnity is conditioned upon Tenant providing prompt notice
to Landlord of any claim or occurrence that is likely to give rise to a claim,
suit, action or liability
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that will fall within the scope of the foregoing indemnity, along with
sufficient details that will enable Landlord to make a reasonable investigation
of the claim. When the claim is caused by the joint negligence or willful
misconduct of Tenant and Landlord, Landlord's duty to indemnify and defend shall
be proportionate to Landlord's allocable share of joint negligence or willful
misconduct.
10. Damage or Destruction; Condemnation.
10.1 Damage Rendering Building Untenantable. If all or a majority of the
Building is damaged or destroyed, then Landlord may at Landlord's option either
(i) repair such damage or destruction as soon as reasonably possible at
Landlord's expense to its condition existing at the time of the damage (not
including any damage or destruction caused by Tenant or to Tenant's fixtures,
equipment, personal property, or tenant improvements) and this Lease shall
continue in full force and effect, or (ii) give written notice to Tenant within
thirty (30) days after the date of occurrence of such damage of Landlord's
option to cancel and terminate this Lease, in which case this Lease shall
terminate as of the date of the occurrence of such damage and Landlord shall
return all prepaid rent from and after such date to Tenant. If (i) all or part
of the Building is damaged or destroyed through no fault or act of Tenant or
Tenant's access to the Building or parking area is materially obstructed or
hindered through fault or act of Landlord, and (ii) Landlord's repair will take
more than one hundred eighty (180) days to complete, or Landlord's removal of
the obstruction will take more than ten (10) days to complete, based on
Landlord's reasonable estimate, then Tenant may elect to terminate this Lease
effective as of the date of such event by written notice to Landlord given
within twenty (20) days from such date. If Tenant does not elect to terminate
this Lease pursuant to this Section, then Landlord shall immediately commence
and diligently pursue to completion repairs of such damage and/or removal of
such obstruction or hindrance. Tenant shall cooperate with Landlord in
connection with any restoration, repair or removal, including but not limited to
the approval and/or execution of required plans and specifications.
10.2 Condemnation. "Taking" means a taking by or condemnation by the
------
exercise of the power of eminent domain by a public or quasi-public authority or
entity, whether or not there is a taking of title, or a conveyance in lieu
thereof. If there is a Taking of the entire Building or of the entire parking
area serving the Building, this Lease shall terminate as of the earlier of the
date title vests or the date Tenant is dispossessed by the Taking authority. If
(i) a Taking of part of the Building in Tenant's judgment reasonably exercised
materially interferes with Tenant's ability to conduct its business, or (ii) a
Taking substantially denies or interferes with Tenant's access to the Building,
Tenant shall have the right to terminate this Lease by giving Landlord notice of
its election within thirty (30) days of the Taking. The Lease shall terminate on
the earlier of the date when title vests, the date Tenant is dispossessed by the
Taking authority or sixty (60) days following Tenant's notice.
10.3 Abatement of Rent. If all or part of the Property or Building is
damaged or destroyed through no fault or act of Tenant, is subject to a Taking,
or Tenant's access to the Property, Building or parking area is obstructed or
materially hindered through fault or act of Landlord, Rent shall be abated in
the proportion that Tenant's use of the Property or Building are
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diminished by such damage, Taking or obstruction. The abatement shall continue
from the date the damage, Taking or obstruction occurred until five (5) business
days after Landlord completes the necessary repairs and restoration for which
Landlord is responsible and gives notice of such completion to Tenant. Except
for abatement of rent, if any, Tenant shall have no claim against Landlord for
any damages suffered by reason of any such damage, Taking or obstruction.
11. Assignment and Subletting.
11.1 Assignment Without Consent. Without Landlord's consent, the Property
may be subleased and/or the Lease may be assigned in part or whole (whether by
operation of law or otherwise) to a subsidiary of Tenant, to an entity with
which or into which Tenant may merge or to the purchaser of substantially all of
Tenant's assets.
11.2 Assignment With Consent. Except as provided in Section 11.1, Tenant
may only assign this Lease in part or whole or sublet all or any part of the
Property and Building if Tenant first obtains Landlord's consent to the proposed
assignment or subletting in writing. Landlord's consent shall not be
unreasonably withheld. Any assignment or subletting of this Lease made by Tenant
without the required consent shall be void.
Landlord's consent or refusal of consent shall be in writing and, if
Landlord refuses consent, the reasons for refusal shall be stated with
particularity. Landlord's consent to an assignment shall be accompanied by a
statement addressed to Tenant and the assignee or subtenant, upon which
statement Tenant and the assignee or subtenant may conclusively rely, stating
that Tenant is not in default under the Lease (or setting forth in what respects
Tenant is in default), that this Lease has not been amended or modified (or
setting forth such amendments or modifications), the expiration date of this
Lease, and the date to which Rent has been paid. Tenant shall pay all of
Landlord's reasonable fees for legal and/or financial services incurred by
Landlord in connection with Tenant's request to assign or sublet all or a
portion of the Lease.
11.3 Effect of Transfer. Landlord agrees, upon request by Tenant, (i) to
amend the notice address for Tenant to add the transferee, and (ii) to deliver
to the Tenant or its successor concurrently with the delivery thereof to such
transferee, copies of any notices of default delivered pursuant to the terms of
this Lease. Additionally, if requested of Landlord pursuant to an assignment or
sublease, the transferee shall have the right to cure any default under this
Lease within the applicable cure period provided for the Tenant in this Lease.
If the assignment or sublease permits Tenant to recover possession of the
Building from the transferee and again take possession of the Building as
Tenant, Landlord agrees to recognize Tenant again as the "Tenant" under this
------
Lease if such a recovery should occur.
12. Landlord's Warranties. To induce Tenant to execute this Lease, and in
addition to the other representations and warranties of Landlord contained in
this Lease, Landlord warrants and represents as of the date hereof, that (i) it
is the owner of the Property with good and marketable title to the Building and
the Land, (ii) it has full right and lawful authority to enter into and perform
Landlord's obligations under this Lease for the full Term, and (iii) this Lease,
the Building, and any improvements constructed by Landlord, do not, to the best
of Landlord's knowledge, violate any applicable law without limitation, zoning,
building and energy codes, or
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the provisions of any instrument or agreement executed by Landlord that places
any restrictions, encumbrances or burdens on the Property.
13. Tenant's Warranties. Tenant represents and warrants to Landlord that it has
not engaged any broker, finder or other person who would be entitled to any
commission or fees from Landlord in respect of the negotiation, execution or
delivery of this Lease and Tenant shall indemnify and hold Landlord harmless
from and against any loss, cost, liability or expense incurred by Landlord as a
result of any claim asserted by any such broker, finder or other person based on
any arrangements or agreements made or alleged to have been made by or on behalf
of Tenant. The provisions of this Section 13 shall not apply to brokers with
whom Landlord has a brokerage agreement. Tenant represents and warrants that is
has been duly authorized to execute and deliver this Lease in accordance with a
duly adopted resolution of the board of directors of Tenant in accordance with
Tenant's bylaws, and that this Lease is binding upon Tenant in accordance
therewith.
14. Defaults; Remedies.
14.1 Defaults. Each of the following shall constitute a default (a
"Default") by Tenant:
-------
(a) The failure by Tenant to make any payment of Rent or any other
payment as required by this Lease within ten (10) business days after the
receipt of written notice from Landlord.
(b) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Tenant, other than described in Section 14.l(a) above, where such failure shall
continue for a period of thirty (30) days after receipt of written notice from
Landlord; provided, however, that if more than thirty (30) days are required for
Tenant to cure the breach, then Tenant shall not be in default if Tenant
commences such cure within such thirty (30) day period and diligently prosecutes
the cure to completion.
(c) The occurrence of any of the following events: (i) the making
by Tenant of any general arrangement or assignment for the benefit of creditors;
(ii) Tenant's becoming a "debtor" as defined in 11 U.S.C. ss. 101 or any
------
successor statute (unless, in the case of a petition filed against Tenant, the
petition is dismissed within sixty (60) days) (iii) the appointment of a trustee
or receiver to take possession of substantially all of Tenant's assets located
at the Building or of Tenant's interest in this Lease, where possession is not
restored to Tenant within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Building or of Tenants interest in this Lease, where such seizure is not
discharged within thirty (30) days, provided; however, in the event that any
provision of this Section 14.1 is contrary to any applicable law, such provision
shall be of no force or effect, and not affect the validity of the remaining
provisions.
14.2 Landlord's Remedies. In the event of any Default by Tenant, Landlord
may at any time thereafter, without limiting Landlord in the exercise of any
right or remedy which Landlord may have by reason of such default:
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(a) Terminate Tenant's right to possession of the Property by any
lawful means, in which case this Lease and the term hereof shall terminate and
Tenant shall immediately surrender possession of the Property to Landlord. In
such event Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's default including, but not limited
to, the cost of recovering possession of the Property, expenses of reletting,
which shall be limited to necessary renovation and alteration of the Building
and any real estate commission actually paid, the amount by which the unpaid
rent for the balance of the term exceeds the amount of such rental loss for the
same period that Tenant proves could be reasonably avoided and that portion of
the leasing commission paid by Landlord applicable to the unexpired term of this
Lease.
(b) Maintain Tenant's right to possession in which case this Lease
shall continue in effect whether or not Tenant shall have vacated or abandoned
the Property. In such event Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the rent as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the state of Washington. Unpaid
installments of rent and other unpaid monetary obligations of Tenant under the
terms of this Lease shall bear interest from the date due at the maximum rate
then allowable by law.
Landlord shall mitigate any damage by making reasonable efforts to relet
the Property or the Building on reasonable terms. Landlord may relet for a
shorter or longer period of time than the Lease Term and make reasonably
necessary repairs or alterations. All sums collected from reletting shall be
applied first to Landlord's reasonable and necessary expenses of reletting, and
then to the payment of amounts due from Tenant to Landlord under this Lease.
14.3 Default by Landlord. Except as otherwise provided in this Lease,
Landlord shall not be in default unless Landlord fails to perform any of its
obligations under the Lease, or to correct a breach of any warranty or
representation made in this Lease, within a reasonable time, but in no event
later than the (30) days after written notice by Tenant to Landlord specifying
the nature of Landlord's failure; provided, however, that if more than thirty
(30) days are required for Landlord to cure the breach then Landlord shall not
be in default if Landlord commences such cure within such thirty (30) day period
and diligently prosecutes the cure to completion.
14.4 Tenant's Remedies. If Landlord commits a Default, Tenant may pursue
any remedy now or hereafter available to Tenant under the laws or judicial
decisions of the state of Washington.
14.5 Self-Help. If either party Defaults, the other party may, without
being obligated to do so and without waiving the Default, cure the Default. The
defaulting party shall pay the nondefaulting party on demand all reasonable
costs, expenses and disbursements incurred by the nondefaulting party to cure
the Default.
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15. Environmental Provisions.
15.1 Environmental Law. The term "Environmental Law" means any federal,
-----------------
state or local law, statute, ordinance, regulation or order pertaining to
health, industrial by hygiene, environmental conditions or hazardous substances
or materials including those defined in this Section as "Hazardous Substances."
--------------------
15.2 Hazardous Substances. The term "Hazardous Substance" means any
-------------------
hazardous or toxic substance, material or waste, pollutants or contaminants, as
defined, listed or regulated, now or in the future by any federal, state or
local law, ordinance, code, regulation, rule, order or decree regulating,
relating to or imposing liability or standards of conduct concerning, any
environmental conditions, health or industrial hygiene, including without
limitation, (i) chlorinated solvents, (ii) petroleum products or by-products,
(iii) asbestos, and (iv) polychlorinated biphenyls.
15.3 Landlord's Representation; Agreement. To the actual knowledge of
Landlord, Landlord represents and warrants that (i) the Land and the Building do
not contain any Hazardous Substances in violation of Environmental Law, and (ii)
Landlord has complied with all mandatory requirements of Environmental Law.
Landlord agrees to comply with all Environmental Law regulating Hazardous
Substances found in, on or about the Property (including the Building) and to
promptly remedy any violation of such law with respect to Hazardous Substances
generated or disposed of by Landlord. Landlord and Tenant shall promptly give
written notice to the other party of any alleged or actual violation of any
Environmental Law affecting the Property (including the Building). If a
violation of an Environmental Law occurs or is discovered, Landlord may at
Landlord's option either (i) remedy such violation (except for violations caused
by Tenant) as soon as reasonably possible at Landlord's sole cost and expense,
or (ii) give sixty (60) days written notice to Tenant of Landlord's option to
cancel and terminate this Lease. If Landlord's remedy under section (i) above
will take more than one hundred eighty (180) days to complete based on
Landlord's reasonable estimate, then Tenant may elect to terminate this Lease
upon thirty (30) days written notice. If Tenant does not elect to terminate this
Lease pursuant to this section, then Landlord shall immediately commence and
diligently pursue the remedy of the violation of Environmental Law. Tenant shall
cooperate with Landlord in connection with the remedy, including but not limited
to the approval and/or execution of required remediation plans.
15.4 Tenant's Agreement. Neither Tenant nor its employees, agents or
contractors will use, generate, manufacture, produce, store, release, discharge
or dispose of on, under or about the Building, or off-site the Building, or
transport to or from the Building, any Hazardous Substance except in compliance
with Environmental Laws.
15.5 Indemnity. Each party (the "Indemnitor") shall protect, indemnify,
----------
defend and hold harmless the other party and its directors, officers, employees,
agents, parents, subsidiaries, successors and assigns (collectively, the
"Indemnitee") from any loss, damage, cost expense or liability (including
----------
reasonable attorneys' fees and costs) directly or indirectly arising out of or
attributable to the Indemnitor's use, generation, manufacture, production,
storage, release,
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threatened release, discharge, disposal or presence of a Hazardous Substance on,
under or about the Property or a breach of any representation, warranty,
covenant or agreement contained in this Section 15 including, without
limitation, the costs of any required or necessary repairs, cleanup or
detoxification of the Property and the preparation and implementation of any
closure, remedial or other required plans. Rent shall abate to the extent the
presence of a hazardous Substance or a violation of Environmental Law (in either
case not caused by Tenant, its employees, agents or contractors) materially
interferes with Tenant's use of the Property.
15.6 Survival. This Section 15 shall survive expiration or termination of
this Lease.
16. General Provisions.
16.1 Subordination. This Lease, at Landlord's option, shall be subordinate
to any ground lease, mortgage, deed of trust, or any other hypothecation for
security hereafter placed upon the Building; provided, however, that (i) Tenant
is provided with an executed Subordination, Attornment, and Non-Disturbance
Agreement containing a provision to the effect that so long as Tenant is not in
default under the Lease beyond any applicable cure period, Tenant's possession
and enjoyment of the Property will not be disturbed and Tenant will not be
joined as a party defendant in any action or proceeding for the purpose of
diminishing Tenant's interest, rights, or estate under this Lease, and (ii) upon
foreclosure of any such mortgage or deed of trust or other proceeding or action
for the enforcement thereof, or of any sale thereunder, this Lease shall remain
in full force and effect and the rights and possession of Tenant under this
Lease shall not be disturbed. Provided the above conditions are met, Tenant
shall attorn to the successor of Landlord's interest under this Lease.
16.2 Tenant Audit. Tenant shall have the right, at Tenant's expense, to
review at reasonable times Landlord's books and records for any fiscal year, a
portion of which falls within the Term, for purposes of verifying Landlord's
calculation of amounts payable by Tenant to Landlord under Sections 4 and 6 of
this Lease. If Tenant disputes the amount in any statement set forth by
Landlord, Tenant shall have the right, and upon condition that Tenant first
deposits the full amount in dispute with Landlord, to cause Landlord's books and
records with respect to such fiscal year to be audited by a certified public
accountant selected by Tenant, subject to Landlord's reasonable approval. The
amount shall be appropriately adjusted on the basis of the audit. If the audit
discloses a liability for a refund or credit by Landlord to Tenant in excess of
ten percent (10%) of the amount previously reported by Landlord, the cost of the
audit shall be borne by Landlord. Otherwise, the cost of the audit shall be paid
by Tenant.
16.3 Estoppel Statement. Tenant shall at any time upon not less than
fifteen (15) days' prior written notice from Landlord execute, acknowledge, and
deliver to Landlord a written statement (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease, as so modified, is in full
force and effect) and the date to which the Rent, security deposit, and other
charges are paid in advance, if any, and (ii) acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the pan of Landlord hereunder, or
specifying such defaults, if any, which are claimed.
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16.4 Landlord's Interests. The term "Landlord" as used herein shall mean
--------
only the owner or owners at the time in question of the fee title. In the event
of any transfer of such title, Landlord herein named (and in case of any
subsequent transfers, the then grantor) shall be relieved from and after the
date of such transfer of all liability as respects Landlord's obligations
thereafter to be performed- provided that any funds in the hands of Landlord or
the then grantor at the time of such transfer, in which Tenant has an interest,
shall be delivered to the grantee. Nothing herein shall be deemed to relieve
Landlord of any liability for its acts, omissions or obligations occurring or
accruing up to and including the date of such transfer. Subject to the foregoing
conditions, the obligations contained in this Lease to be performed by Landlord
shall be binding on Landlord's successors and assignees, only during their
respective periods of ownership.
16.5 Landlord Access. Landlord shall be entitled to access to the Building
upon giving Tenant twenty four (24) hours' advance written notice, except in the
case of an emergency for which Landlord shall give Tenant such notice as is
practicable under the circumstances. Landlord shall cause the least interference
to Tenant's business reasonably possible and shall promptly finish any work for
which it entered the Building. If Landlord causes damage to Tenant's property,
Landlord shall be liable for any damage to the extent not covered by Tenant's
insurance or the insurance Tenant is required to carry under Section 9
(whichever is greater). Notwithstanding the foregoing, Rent shall not abate and
Landlord shall not be liable to Tenant for damages if Landlord enters the
Building for the purpose of making repairs pursuant to Section 7.3. Landlord and
Landlord's agents shall have the right to enter the Building at reasonable times
for the purpose of inspecting the same, showing the same to prospective
purchasers, tenants, or lenders, and making such alterations, repairs,
improvements or additions to the Building or to the Building as Landlord may
deem necessary or desirable.
16.6 Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision of this Lease.
16.7 Entire Agreement; Amendments; Waiver. This Lease contains the entire
integrated agreement of the parties with respect to any matter mentioned in this
Lease. No contemporaneous or prior agreement, understanding or statement
pertaining to any such matter shall be binding on the parties. This Lease may be
modified in writing only, signed by the parties. No waiver by Landlord or Tenant
of any provision hereof shall be deemed a waiver of any other provision hereof
or of any subsequent breach by Tenant or Landlord of the same or any other
provision.
16.8 Binding Effect; Choice of Law; Venue. This Lease shall bind the
parties, their personal representatives, successors and assigns. This Lease
shall be governed by the laws of the State of Washington. The parties hereby
irrevocably and unconditionally submit in any legal action or proceeding
relating to this Lease to the jurisdiction of the courts of the State of
Washington located in King County and, in any such action or proceeding, consent
to jurisdiction in such courts and waive any objection to the venue in any such
court.
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16.9 Attorneys' Fees. If either party brings an action to enforce the
terms of this Lease or to declare rights under this Lease, the prevailing party
in any such action, on trial or appeal, shall be entitled to its reasonable
attorneys' fees to be paid by the losing party as fixed by the court.
16.10 Quiet Possession. Landlord warrants and agrees that so long as
Tenant is not in default under this Lease, Tenant's peaceable and quiet
enjoyment of the Property shall not be disturbed by anyone claiming by or
through the Landlord.
16.11 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become a binding agreement when one or more counterparts have been signed
by each of the parties and delivered to the other party.
17. Notices. Any notice required under this Lease shall be to writing and sent
by certified mail or personally delivered as follows or delivered by facsimile
with prompt confirmation by telephone:
Landlord: Martin Tobias Tenant: Encoding.com, Inc.
Alex Tobias 3406 East Union Street
3601 East Union Street Seattle, WA 98122
Seattle, WA 8122 Attn: Charles Waite
Telephone No.: (206) 328-9041 Chairman of the Board
Facsimile No.: (206) 329-3276 Phone: (206) 285-7205
Fax: (206) 285-1128
Notices shall be deemed to have been given upon receipt or attempted
delivery where delivery is not accepted. Either party may change its address by
notifying the other party as set forth above, Tenant shall also give default
notices to Landlord's mortgagee after receiving notice from Landlord of the
mortgagee's name and address.
18. Waiver of Consequential Damages. Landlord and Tenant waive any claim for
consequential damages that one party may have against the other for breach of or
failure to perform or observe the requirements and obligations created by this
Lease. By way of illustration only and not by way of limitation, consequential
damages shall include lost profits, lost business opportunities, interference
with business or contractual expectancies, loss of equity in property (whether
the Building or other property), or any speculative or remote damages.
19. Confidentiality. Landlord shall not distribute, copy, or otherwise submit,
orally or in writing, this Lease or any summary thereof, to any other person or
entity, except its servant, agents, employees, attorneys, consultants, legal
representatives, successors and assigns. In addition, all information learned by
or disclosed to Landlord with respect to Tenant's business or information
disclosed or discovered during an entry by Landlord into the Building, shall be
kept strictly confidential by Landlord, Landlord's attorneys, consultants, legal
representatives. successors, assigns, employees, servants and agents and shall
not be used (except for Landlord's confidential internal purposes) or disclosed
to others by Landlord, or Landlord's servants, agents,
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employees, legal representatives, successors or assigns, without the express
prior written consent of Tenant, which Tenant may withhold in its sole and
absolute discretion.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first above written.
TENANT:
ENCODING.COM, INC.,
a Delaware corporation
/s/ Charles P. Waite, Jr.
By:______________________________
Charles P. Waite
Chairman of the Board of Directors
LANDLORD:
MARTIN TOBIAS
/s/ Martin Tobias
_____________________________
ALEX TOBIAS
/s/ Alex Tobias
_____________________________
[SIGNATURE PAGE TO LEASE AGREEMENT]
<PAGE>
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Charles P. Waite
is the person who appeared before me, and said person acknowledged that he
signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it as the Chairman of the Board of Directors of
ENCODING.COM, INC., to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
Dated: 12/9, 1998
/s/ Kristin S.P. Doyle
_____________________________________
Notary Public
Kristin S.P. Doyle
[Seal or Stamp] _____________________________________
[Printed Name]
My commission expires 11/1/01
<PAGE>
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Martin Tobias and
Alex Tobias are the persons who appeared before me, and said persons
acknowledged that he and she signed this instrument, on oath stated that he and
she were authorized to execute the instrument and acknowledged it to be the free
and voluntary act of such parties for the uses and purposes mentioned in the
instrument.
2/3/99
Dated: _______________
/s/ Donald Fleeks
___________________________________
Notary Public
Donald Fleeks
[Seal or Stamp] ___________________________________
[Printed Name]
2/4/99
My commission expires ___________