Washington-Seattle-1904 Fourth Avenue Lease - Westlake Park Associates and Encoding.com
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is dated as of the 28th day of October,
1999, by and between WESTLAKE PARK ASSOCIATES, a Washington limited partnership
("Landlord"), and ENCODING.COM, a Delaware corporation ("Tenant").
Landlord and Tenant agree as follows:
ARTICLE 1.
DEFINED TERMS; LEASE DATA; EXHIBITS
The following terms shall have the following meanings unless otherwise
specifically modified herein:
Section 1.1 Building and Premises. "Building" means the Building in which
the Premises is located, known as the Centennial Building, 1904 Fourth Avenue,
Seattle, Washington, as more particularly described on Exhibit A. "Premises"
---------
means that space consisting of approximately Nine Thousand (9,000) rentable
square feet ("RSF") on the second floor of the Building, as outlined on Exhibit
-------
B. The actual RSF of the Premises shall be measured and mutually agreed to by
-
Landlord and Tenant prior to the Commitment Date, with a written confirmation
thereof signed by both parties. "RSF" shall include Tenant's pro rata share of
common areas used by second floor tenants including first floor lobby.
Section 1.2 Term, Commencement and Expiration Date. The Commencement Date
means November 15, 1999. The term of this Lease ("Lease Term") shall be five
(5) years commencing on the Commencement Date. "Lease Year" means each twelve
(12) month period beginning with the first day of the month next following the
Commencement Date.
Section 1.3 Early Access; Delay Charges. Landlord shall make the Premises
available for Tenant's access no later than November 1, 1999, for purposes of
cabling, wiring and furniture and equipment installation. In the event that
Tenant's occupancy of the Premises is delayed by Landlord beyond November 7,
1999, then Landlord shall be obligated to pay to Tenant delay charges at the
rate of Two Thousand Five Hundred Dollars ($2,500) per day until such time as
Tenant is granted occupancy. Delay charges shall be paid within five (5) days
of demand by Tenant or, at Tenant's election, credited against Rent hereunder.
Section 1.4 Exhibits. Landlord and Tenant agree that this Lease is further
subject to the provisions of the attached Exhibits which are listed below. The
provisions of the Exhibits are understood to be an integral portion of this
Lease.
Exhibit A Legal Description
Exhibit B Premises Floor Plan
ARTICLE 2.
PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
upon the terms and conditions herein set forth the Premises, together with
rights of ingress and egress over
<PAGE>
common areas in the Building, sidewalks, and other common areas associated
therewith. Prior to the Commencement Date, Landlord shall, at its cost and
expense: (a) steam clean all carpets within the Premises; (b) repair all damaged
walls within the Premises and provide painting touch-up where needed; and (c)
otherwise deliver the Premises to Tenant in "broom clean" condition.
ARTICLE 3.
RENT; SECURITY DEPOSIT
Section 3.1 Rent. Tenant shall pay Landlord without notice Basic Rent
in the amount of Twenty-seven Dollars ($27.00) per RSF in the Premises per year,
payable in equal monthly installments, and any other payments due hereunder
(collectively "Rent"), in lawful money of the United States of America in
advance on or before the first day of each month (or at other dates specified in
this Lease) during the Lease Term at Landlord's Notice Address set forth on the
signature page, or to such other party or at such other place as Landlord may
hereafter from time to time designate in writing. Rent shall commence on the
Commencement Date. Rent for any partial month at the beginning or end of the
Lease Term shall be prorated.
Section 3.2 Security Deposit. Tenant shall deposit with Landlord an
amount equal to one (1) month of Basic Rent ("Security Deposit"), upon Tenant's
execution and submission of this Lease. The Security Deposit shall serve as
security for the prompt, full and faithful performance by Tenant of the terms
and provisions of this Lease. If Tenant commits a default, or owes any amounts
to Landlord upon the expiration of this Lease, Landlord may use or apply the
whole or any part of the Security Deposit for the payment of Tenant's
obligations hereunder. The use or application of the Security Deposit or any
portion thereof shall not prevent Landlord from exercising any other right or
remedy provided hereunder or under any law and shall not be construed as
liquidated damages. Landlord shall not be required to keep the Security Deposit
separate from Landlord's general funds or pay interest on the Security Deposit.
Any remaining portion of the Security Deposit shall be returned to Tenant (or,
at Landlord's option, to the last assignee of Tenant's interest in this Lease)
within thirty (30) days expiration of this Lease.
ARTICLE 4.
USES
Section 4.1 General Use. The Premises shall be used for office purposes
or for any other lawful purposes which are consistent with applicable zoning
("Permitted Use") and for no other business or other purpose without the prior
written consent of Landlord. No act shall be done in or about the Premises that
is unlawful or that will increase the then existing rate of insurance on the
Building. Tenant shall not commit or allow to be committed any waste upon the
Premises, or any public or private nuisance or other act or thing that disturbs
the quiet enjoyment of any other Building tenant. Tenant shall not, without the
written consent of Landlord, use any apparatus, machinery or device in or about
the Premises that will cause any substantial noise, vibration, or fumes or
disturb the quiet enjoyment of any other Building tenant. Tenant shall comply
with all laws relating to its use or occupancy of the Premises or to the common
areas and shall observe such reasonable rules and regulations concerning
Tenant's use or occupancy of the Premises or related to the common areas as may
be adopted by Landlord
2
<PAGE>
from time to time and made available to Tenant so long as the same are not
inconsistent with this Lease.
Section 4.2 No Hazardous Substances. Tenant shall not dispose of or
otherwise allow the presence or release of any hazardous substances in the
Premises. Landlord represents and warrants to Tenant that no portion of the
Premises or the Building contains any hazardous substances. Landlord further
represents and warrants it has not received any notice, claim or demand from any
governmental agency or any other person claiming or indicating the location,
disposal or existence of any hazardous substances in the Building, including the
Premises. Landlord warrants, represents, covenants and agrees that it will not
use, produce, store, release, dispose of or bring into the Premises or the
Building any hazardous substances or allow any other entity or person to do so.
As used herein, the term "hazardous substances" includes any substance,
waste or material defined or designated as hazardous, toxic or danger (or any
similar term) by any federal, state or local statute, regulation, rule or
ordinance now or hereafter in effect including, without limitation, petroleum
products and by-products, asbestos, polychlorinated biphenyls, chlorinated
solvents, and urea formaldehyde.
Each party agrees to indemnify and hold harmless the other party against
any and all losses, liabilities, suits, obligations, fines, damages, judgments,
penalties, claims, charges, cleanup costs, remedial actions, costs and expenses
(including, without limitation, attorneys' fees and disbursements) which may be
imposed on, incurred or paid by, or asserted against the other party directly or
indirectly arising from or attributable to any misrepresentation or breach of
any warranty, covenant or agreement by the indemnifying party under this
section.
ARTICLE 5.
[INTENTIONALLY OMITTED]
ARTICLE 6.
PERSONAL PROPERTY TAXES
Tenant shall pay, prior to delinquency, all personal property taxes payable
with respect to all property owned by Tenant located on the Premises or in the
Building and promptly upon request of Landlord shall provide written proof of
such payment.
ARTICLE 7.
SERVICES BY LANDLORD
Landlord will provide to the Premises services customary to first-class
office buildings in the local area, including without limitation electricity for
lighting, office machines, computers, and copiers, hot and cold running water
and sewer, a Building security system and mechanical cooling, heating and
ventilation at such temperatures and in such amounts as are reasonably standard
for first-class office buildings in the local area. All services, including
elevator, Building access through the security system (by means of cards, keys
or other appropriate access devices), water, and the cooling, heating, and
ventilation system, shall be available to the Premises twenty-four (24) hours
per day, seven (7) days per week. The Building elevator(s) shall lock off the
Premises from general public access during nonbusiness hours of the Building
3
<PAGE>
in general. Landlord shall also provide daily bonded janitorial services for the
Premises, lamp replacement for Landlord-furnished lighting, toilet room supplies
and perimeter window washing, all with reasonable frequency customary to first-
class office buildings in the local area.
Landlord shall not be liable for any loss or damage caused by or resulting
from any variation, interruption or failure of such services due to any cause
whatsoever, except the willful misconduct of Landlord or its employees, agents,
contractors or invitees. Rent shall abate for the period of any interruption or
failure of such services caused by such willful misconduct, and for the period
of any interruption or failure due to any cause which extends for more than
forty-eight (48) hours. For those services within Landlord's reasonable
control, Landlord will correct any interruption of services as soon as
practicable.
Tenant shall have the right to establish its own procedures to maintain and
protect the internal security of the Premises in accordance with Tenant's needs.
Tenant, in its sole discretion, shall have the right to install additional
security devices for the Premises at its own cost and expense.
ARTICLE 8.
ASSIGNMENT AND SUBLETTING
Except as provided below, Tenant shall not, without Landlord's written
consent (which consent shall not unreasonably be withheld or delayed), assign or
transfer the Lease (or any interest therein) or sublease the Premises or any
portion thereof. Notwithstanding the foregoing, Tenant may, without Landlord's
prior written consent, sublet all or any portions of the Premises or assign the
Lease (or any interest therein) to: (i) a subsidiary, affiliate, division or
corporation controlled by or under common control with Tenant; (ii) a successor
corporation related to Tenant by merger, consolidation, nonbankruptcy
reorganization, or government action; or (iii) a purchaser of substantially all
of Tenant's assets located in the Premises. For the purpose of this Lease, no
sale or transfer of Tenant's capital stock or redemption or issuance of
additional stock of any class, including issuance of stock in connection with
Tenant's "going public," shall be deemed an assignment, subletting or any other
transfer of the Lease or the Premises. If Landlord's consent is required
hereunder, Landlord (a) shall respond to Tenant within ten (10) days after
receipt of written notice from Tenant requesting such consent ("Tenant's
Notice"), otherwise such consent shall be deemed given; and (b) shall have the
right, exercisable by providing Tenant with written notice within ten (10) days
after receipt of Tenant's Notice, to recapture that portion of the Premises
proposed to be subleased and enter into a direct lease with the proposed
Subtenant, in which event Tenant shall be released from all liability under this
Lease for the space so recaptured effective upon Tenant's vacation thereof.
ARTICLE 9.
CARE OF PREMISES
Section 9.1 Tenant shall keep the interior of the Premises in a
reasonably neat, clean and sanitary condition and shall at all times preserve
them in good condition and repair, ordinary wear and tear or damage due to
casualty or condemnation excepted. If Tenant shall fail to do so, Landlord shall
notify Tenant of such failure. If, after receiving such notice, Tenant fails
within
4
<PAGE>
the period of time allowed for cure of default to place the Premises in said
condition and state of repair, Landlord may at its option do so and Tenant on
demand shall pay the costs thereof.
Section 9.2 Landlord shall repair and maintain in a first-class condition
the structural portions of the Building, including, without limitation, the
elevators, plumbing, air conditioning, heating and electrical systems, whether
located within or outside the Premises, the Building roof, curtain wall, all
exterior glass doors and plate glass, elevators, escalators, telephone and
electrical closets, all lobbies and corridors, balconies, landscaping, walkways,
and the interior portions (excluding the Premises) of the Building above and
below grade. Landlord covenants and agrees that Landlord's right to enter the
Premises to make alterations, repairs or additions, whether pursuant to this
section or as anywhere else provided for in this Lease, shall be exercised in
accordance with Tenant's security regulations and such work shall be performed
with the least possible amount of interference to Tenant, and at times when the
nature of such work will least interfere with or otherwise unreasonably distract
Tenant from the conduct of its business. Rent shall be abated in the event
Landlord, for any reason, fails to commence and complete any repairs required to
be made by Landlord under this section within a period of two (2) business days
after notice to Landlord of the need for such repairs or in the event the
performance of any repair work required under this section interferes with
Tenant's use of the Premises, such abatement to be based upon the extent such
failure interferes with Tenant's normal use of the Premises.
ARTICLE 10.
SURRENDER OF PREMISES
Subject to the terms of Article 13 relating to damage and destruction, upon
----------
expiration or termination of the Lease Term whether by lapse of time or
otherwise (including any holdover period), Tenant at its expense shall: (1)
remove Tenant's goods and effects and those of all persons claiming under
Tenant, (2) leave the Premises broom clean, and (3) promptly and peacefully
surrender the Premises. Any property left on the Premises after the expiration
or termination of the Lease Term shall be deemed to have been abandoned and the
property of Landlord to dispose of as Landlord deems expedient, and Tenant shall
be liable for all reasonable costs associated with the disposal of such
property; provided that Tenant shall have reasonable notice and opportunity to
--------
remove such property itself before it shall be deemed abandoned.
ARTICLE 11.
ALTERATIONS
Tenant, at its own expense, may make from time to time any nonstructural
alterations to the Premises, and, provided Tenant first obtains Landlord's
written consent which shall not unreasonably be withheld or delayed, any
structural alterations, additions, and improvements in and to the Premises
("Work") that it may deem necessary or suitable for the conduct of its business
therein. Landlord, without expense to itself, shall cooperate with Tenant in
securing building and other permits and other authority necessary from time to
time for any Work permitted under this Lease. All Work shall be performed in a
good and workmanlike manner and all materials used shall be of a quality
comparable to those in the Premises and Building. Tenant shall have the right
to remove all alterations, additions and improvements made by Tenant, so long as
Tenant repairs any damage to the Premises caused by such removal.
5
<PAGE>
Landlord at its option and expense may make any repairs, alterations,
additions or improvements that Landlord may deem necessary or advisable for the
preservation, safety or improvement of the Premises or the Building; provided
--------
that such repairs, alterations, etc. shall not interfere with Tenant's access to
or normal use and enjoyment of the Premises and that Rent shall be abated in the
event and to the extent of any such interference.
ARTICLE 12.
ENTRY AND INSPECTION
Upon twenty-four (24) hours prior notice to Tenant, Landlord, at all
reasonable times, may enter the Premises for the purpose of inspecting the
Premises subject to Tenant's reasonable security requirements; provided that
--------
Rent shall be abated to the extent Landlord's entry onto the Premises materially
interferes with Tenant's operations on the Premises. Nothing in this section
shall impose upon Landlord any obligation not expressly imposed elsewhere in
this Lease. Landlord shall have the right at reasonable times to enter the
Premises for the purpose of showing the Premises to prospective tenants during
the period beginning ninety (90) days prior to the expiration or sooner
termination of this Lease.
ARTICLE 13.
DAMAGE BY FIRE OR OTHER CASUALTY
Section 13.1 Loss (Insured or Uninsured). If the Premises or the Building
is damaged by fire or other casualty, Landlord shall with all due diligence
repair or rebuild the damaged portion to at least the condition existing
immediately before said casualty. Landlord shall use any insurance proceeds
received as a result of the casualty for such purpose, together with such funds
as are necessary to complete such repair or restoration. Tenant consents to
insurance proceeds being paid to and placed in the custody of the lienholder of
any mortgage or deed of trust encumbering the Premises; provided that the
--------
lienholder shall first agree in writing with Landlord for the benefit of Tenant
to make the proceeds of such insurance available for repair and restoration of
the Premises as required in this section.
Section 13.2 Major Damage. For purposes of this section, "Major Damage"
means (i) damage to such extent that the estimated cost of full repair of such
damage is greater than fifty percent (50%) of the full replacement value of the
property damaged, or (ii) damage rendering the Premises or the Building
substantially unusable for its intended purpose for more than three (3) months.
Notwithstanding Section 13.1 above, in the event of Major Damage to the Building
------------
or the Premises, Landlord may elect not to restore the damage by so notifying
Tenant within thirty (30) days after the casualty. Upon such notice, this Lease
shall terminate, the Tenant shall have no further obligation to pay Rent, and
Landlord shall retain any insurance proceeds. If Landlord elects to restore any
Major Damage to the Premises on the Building, it shall commence restoration in
the same manner as provided in Section 13.1.
------------
Section 13.3 Tenant's Option to Terminate. If the Building is damaged so
as to render the whole or any substantial portion of the Premises untenantable
in Tenant's good faith opinion for a period of sixty (60) days or more, or if
Landlord fails to notify Tenant whether it will repair any Major Damage within
thirty (30) days after the same occurs, then Tenant shall have the option to
terminate this Lease upon ten (10) days' notice to Landlord. In addition, if
6
<PAGE>
Landlord is required to repair any damage under this section, Tenant may
terminate this Lease by notice to Landlord if Landlord has not restored and
rebuilt the Premises within six (6) months after the occurrence of such damage
or destruction.
Section 13.4 Abatement of Rent. Upon occurrence of any casualty, Rent
shall be prorated and abated during the period beginning with the date of the
casualty and continuing until the Premises are restored as required in this
section in the proportion that the Rent for the part of the Premises unusable by
Tenant for its normal operations bears to the Rent for the entire Premises.
Section 13.5 Tenant's Property. Landlord will not carry insurance of any
kind on furniture, furnishings, fixtures, or equipment owned by Tenant, and
Landlord shall not be obligated to repair any damage thereto or replace the
same, except as otherwise expressly provided elsewhere in this Lease.
ARTICLE 14.
INDEMNIFICATION
Section 14.1 Tenant's Indemnification Obligations. Tenant shall indemnify,
hold harmless and defend Landlord from and against all liabilities, damages,
losses, claims, actions, costs, and expenses, including reasonable attorneys'
and other professional fees, in conjunction with loss of life, personal injury
and/or property damage arising out of the occupancy or use of Tenant of any part
of the Premises or the Building, occasioned wholly or in part by any act or
omission of Tenant or its officers, agents, servants, employees, contractors,
licensees, guests, invitees or visitors. The foregoing provisions shall not be
construed to make Tenant responsible for loss, damage, liability or expense
resulting form injuries to persons or property caused by the negligence of
Landlord, its officers, agents, servants, employees, contractors, licensees,
guests, invitees or visitors, or other tenants of the Building.
Section 14.2 Landlord's Indemnification Obligations. Landlord shall
indemnify, hold harmless and defend Tenant from and against all liabilities,
damages, losses, claims, actions, costs and expenses, including reasonable
attorneys' and other professional fees, in conjunction with or arising out of
(a) any failure by Landlord to perform any of the agreements, terms, covenants
or conditions of this Lease on Landlord's part to be performed, (b) any
accident, injury or damage that happens in, upon or about the Premises or the
Building caused by the negligence or intentional act or omission of Landlord,
its officers, agents, servants, employees, contractors, licensees, guests,
invitees, or visitors, or any third party unrelated to Tenant, or (c) Landlord's
failure to comply with any laws, ordinances, requirements, orders, directions,
rules or regulations of any federal, state, county or municipal governmental
authority or agreement of record affecting the Premises or the Building.
ARTICLE 15.
INSURANCE
Section 15.1 Liability Insurance.
(a) Tenant. Throughout the Lease Term Tenant at its own expense shall
keep and maintain in full force and effect, a policy of commercial general
liability insurance insuring
7
<PAGE>
Tenant's activities upon, in or about the Premises against claims of bodily
injury or death or property damage or loss with a limit of not less than Two
Million Dollars ($2,000,000) combined single limit per occurrence and in the
aggregate (per policy year).
(b) Landlord. Throughout the Lease Term Landlord at its own expense
shall keep and maintain in full force and effect a policy of commercial general
liability insurance insuring Landlord's activities upon, in or about the
Premises and the Development against claims of bodily injury or death or
property damage or loss with a limit of not less than Ten Million Dollars
($10,000,000) combined single limit per occurrence and in the aggregate (per
policy year).
Section 15.2 Property Insurance.
(a) Tenant. Throughout the Lease Term Tenant shall at its option
either keep and maintain what is commonly referred to as "all risk" coverage
insurance on Tenant's personal property in the Premises (including without
limitation inventory, trade fixtures, floor coverings, furniture, and property
removable by Tenant under this Lease), or self-insure against any damage to or
loss of such property.
(b) Landlord. Throughout the Lease Term Landlord at its own expense
shall keep and maintain in full force and effect what is commonly referred to as
"all risk" coverage insurance or its equivalent, covering all perils covered by
the broadest extended coverage endorsement obtainable from insurance companies
on the Building, including the Premises and all tenant improvements, in the
amount of their full replacement value, including demolition and removal of
debris.
Section 15.3 Insurance Policy Requirements. All insurance required under
this section shall be with companies rated AX or better in Best's Insurance
Guide and duly authorized to do business in Washington. No insurance policy
required under this section to be carried by either Landlord or Tenant shall be
cancelled or reduced in coverage and each insurance policy shall provide that it
is not subject to cancellation or a reduction in coverage except after thirty
(30) days prior written notice to the other party. Tenant and Landlord shall
deliver to the other prior to the Commencement Date and from time to time
thereafter, copies of policies of such insurance or certificates evidencing the
existence and amounts of same and naming the other party as an additional
insured thereunder. The limits of any required insurance policy shall not limit
the liability of Tenant or Landlord under this Lease.
Section 15.4 Waiver of Subrogation. Notwithstanding any other provision to
the contrary herein, Landlord and Tenant release each other, their agents and
employees from liability and waive all right of recovery against each other for
any loss from perils insured against under their respective policies for damages
caused by fire or other perils (including all risk extended coverage) that are
covered by insurance, regardless of any fault or negligence. Each party shall
use reasonable efforts to cause its insurance carrier(s) to consent to the
foregoing waiver of rights of subrogation against the other party.
Notwithstanding the foregoing, no such release shall be effective if its effect
would be to void coverage under the aforesaid insurance polic(ies). Each party
shall obtain appropriate waiver(s) from its own insurance compan(ies).
8
<PAGE>
ARTICLE 16.
ADVERTISING AND SIGNS
Tenant shall not place any sign on the exterior of the Premises or the
Building, or on any part of the interior of the Premises visible from the
exterior thereof, without the prior written consent of Landlord.
Notwithstanding the foregoing, Tenant may install such signage as it deems
appropriate on any floor occupied solely by Tenant, its sublessees and
assignees. All signage, permitted or consented to hereunder shall be installed,
maintained and removed by Tenant at its sole expense.
ARTICLE 17.
INSOLVENCY AND LIENS
Section 17.1 Insolvency. If Tenant becomes insolvent or voluntarily or
involuntarily bankrupt, or if a receiver, assignee or other liquidating officer
is appointed for the business of Tenant and Tenant shall fail to terminate such
bankruptcy proceeding or remove such receivership within sixty (60) days after
commencement of such proceedings or receivership, Landlord at its option may
terminate this Lease and Tenant's right of possession under this Lease.
Section 17.2 Liens. Tenant shall not permit any lien to be filed against
the Premises or the Building by reason of obligations incurred by or on behalf
of Tenant and Tenant hereby indemnifies and holds Landlord harmless from any
liability from any such lien; provided, however, that Tenant, at its sole cost
-------- -------
and expense and after written notice and furnishing of an appropriate bond to
Landlord, may contest any lien by appropriate proceedings conducted in good
faith and with due diligence.
ARTICLE 18.
CONDEMNATION
Section 18.1 Entire Taking. If all of the Premises are taken by eminent
domain, this Lease shall automatically terminate as of the date title vests in
the condemning authority and all Rent and other payments shall be paid to that
date.
Section 18.2 Partial Taking. In the event of (i) a taking of only a
portion of the Premises but the remainder of the Premises remaining after such
taking is unsuitable in Tenant's reasonable discretion for its business
operations, or (ii) a taking of any portion of the Building which materially
detracts from the character of the Building, then, in any such event, Tenant
shall have the right to cancel this Lease effective on the date title to the
property vests in the condemning authority. Tenant shall give notice of its
election hereunder not later than thirty (30) days in advance of the date Tenant
must vacate in the event of a taking specified in this Section.
Section 18.3 Abatement of Rent. Upon a partial taking of the Premises,
Rent shall be prorated in the same proportion that the Rent for the part of the
Premises taken bears to the Rent for the total Premises immediately before the
taking. Rent shall also likewise be abated for any portion of the Premises that
is not taken but is rendered temporarily unusable by Tenant by virtue of repairs
or restoration necessitated by the taking of other space.
9
<PAGE>
Section 18.4 Restoration of Premises by Landlord. If this Lease is not
terminated pursuant to Section 18.2 above, Landlord shall make any restoration
------------
of the remainder of the Building and the Premises necessitated by reason of the
partial taking as promptly as reasonably practicable and within the time periods
prescribed in the event of a casualty governed by Section 13 to restore them to
----------
the same condition (as circumstances permit) as existed immediately before the
partial taking.
Section 18.5 Awards and Damages. Landlord reserves all rights to damages
to the Premises for any partial or entire taking and Tenant hereby assigns to
Landlord any right Tenant may have to such damages or award (except any award or
portion thereof allocated to Tenant's personal property or improvements paid for
by Tenant), and Tenant shall make no claim against Landlord or the condemning
authority for damages for termination of the leasehold interest. Tenant shall
have the right, however, to claim and recover from the condemning authority
compensation for any loss to which Tenant may be put for Tenant's moving
expenses, business interruption or taking of Tenant's personal property or
improvements paid for by Tenant (not including Tenant's leasehold interest).
ARTICLE 19.
DEFAULT
Section 19.1 Tenant's Right to Cure. Tenant shall have a period of ten
(10) days from the date of receipt of written notice from Landlord to Tenant
within which to cure any default in the payment of Rent and other sums due
hereunder. Tenant shall have a period of twenty (20) days from the date of
written notice from Landlord to Tenant within which to cure any other default
hereunder, but with respect to any such default that cannot reasonably be cured
within twenty (20) days, the default shall not be deemed to be uncured if Tenant
commences cure within twenty (20) days and for so long as Tenant is diligently
prosecuting the cure thereof.
Section 19.2 Landlord's Re-entry. Upon any uncured default of this Lease
by Tenant, Landlord, besides other rights or remedies it may have, at its
option, may enter the Premises or any part thereof, in compliance with
applicable law, and expel, remove or put out Tenant or any other persons who may
be thereon, together with all personal property found therein, and Landlord may
terminate this Lease, or it may from time to time, without terminating this
Lease and as agent of Tenant, relet the Premises or any part thereof for such
term or terms (which may be for a term less than or extending beyond the term
hereof), and at such reasonable rental or rentals and upon such other terms and
conditions as Landlord reasonably may deem advisable, with the right to repair,
renovate, remodel, redecorate, alter and change the Premises, Tenant remaining
liable for any deficiency computed as hereinafter set forth. In the case of any
default re-entry and/or disposition by summary proceedings or otherwise, all
delinquent Rent shall become due thereupon and be paid up to the time of such
re-entry or dispossession together with such reasonable expenses as Landlord may
incur for attorneys' fees, advertising expenses, brokerage fees and/or putting
the Premises in good order and repair.
Section 19.3 Reletting the Premises. Rents received by Landlord from such
reletting shall be applied first to the payment of any indebtedness form Tenant
to Landlord other than Rent; second, to the payment of any costs and expenses of
such reletting and including, but not limited to, attorneys' fees, advertising
fees and brokerage fees, and to the payment of any repairs
10
<PAGE>
to the Premises necessitated by Tenant's occupancy thereof; third, to the
payment of Rent due and to become due hereunder, and, if after so applying said
rents there is any deficiency in the Rent to be paid by Tenant under this Lease,
Tenant shall pay monthly on the dates specified herein the difference between
such Rent and the amount for which Tenant proves the Premises could have been
rented. Any payment made or suits brought to collect the amount of such
difference for any months shall not prejudice in any way the right of Landlord
to collect such differences for any subsequent month. Landlord shall make all
reasonable efforts to mitigate its damages by reletting the Premises. No such
re-entry or taking possession of the Premises shall be construed as an election
on Landlord's part to terminate this Lease unless a written notice of such
intention is given to Tenant. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for such previous breach and default.
Section 19.4 Right to Perform. If Tenant fails to pay any sum of money
required to be paid by Tenant to a person or entity other than Landlord or fails
to perform any other act to be performed by Tenant hereunder, and such failure
continues for thirty (30) days after notice thereof by Landlord, Landlord may,
but shall not be obligated so to do, and without waiving or releasing Tenant
from any obligations of Tenant, make any such payment or perform any such other
act on Tenant's part to be made or performed as provided in this Lease.
Notwithstanding any other provision hereof, Landlord may undertake repairs in an
emergency or to prevent further damage to the Building or Premises without
delivery of notice and expiration of the above-described cure period. Landlord
shall have (in addition to any other right or remedy of Landlord), the same
rights and remedies in the event of the nonpayment of sums due under this
subsection as in the case of default by Tenant in the payment of Rent.
Section 19.5 Landlord's Default. If Landlord defaults in performance of
any of its obligations under this Lease, which default is not cured within
thirty (30) days from date of notice of such default, Tenant may cure the same
at the expense of Landlord. Rent shall abate to the extent Landlord's default
interferes with Tenant's normal business operations. Notwithstanding the
foregoing, if Landlord's default results in an emergency jeopardizing Tenant's
business operations Tenant shall have the right to cure the default after verbal
notice to Landlord and Landlord shall reimburse Tenant on demand for all
reasonable and necessary expenses of such cure. Any sums payable by Landlord to
Tenant pursuant to this section shall be paid on demand, and if not paid within
ten (10) days may at Tenant's election be offset against the next monthly
installment(s) of Rent until satisfied in full.
ARTICLE 20.
HOLDOVER
If Tenant shall, with the written consent of Landlord, hold over beyond the
expiration of the Lease Term, such tenancy shall be deemed a month-to-month
tenancy which may be terminated as provided by applicable state law. During
such tenancy Tenant shall be bound by all the terms, covenants and conditions as
herein specified so far as applicable.
11
<PAGE>
ARTICLE 21.
NOTICES
All notices under this Lease shall be in writing and delivered in person or
sent by registered or certified mail, return receipt requested, postage prepaid,
to Landlord and to Tenant at the addresses listed below (and after the Lease
commences, mailed or delivered to Tenant at the Premises) or such other
addresses as may from time to time be designated by any such party in writing.
Notices shall be deemed given when delivered or if mailed as aforesaid, upon the
earlier of three (3) days after the date of such mailing or the date of receipt.
ARTICLE 22.
COSTS AND ATTORNEYS' FEES
If Tenant or Landlord shall bring any action arising out of this Lease, the
losing party shall pay the prevailing party a reasonable sum for attorneys' fees
and costs in such suit, at trial and on appeal, and such attorneys' fees and
costs shall be deemed to have accrued on the commencement of such action.
ARTICLE 23.
ESTOPPEL CERTIFICATES
Tenant shall, from time to time, upon written request of Landlord, execute,
acknowledge and deliver to Landlord or its designee a written statement stating:
the date this Lease was executed and the date it expires; the date the Term
commenced and the date Tenant accepted the Premises; the amount of Basic Rent
and date to which such Rent has been paid; and certifying to the best of its
knowledge: that this Lease is in full force and effect and has not been
assigned, ratified, supplemented or amended in any way (or specifying the date
and terms of any agreement so affecting this Lease); that no rent in excess of
the true Rent owed Landlord is returnable to Tenant (or specifying the amount
due); that this Lease represents the entire agreement between the parties as to
this leasing; that all conditions under this Lease to be performed by Landlord
have been satisfied (or specifying the conditions unsatisfied); that all
required contributions by Landlord to Tenant on account of Tenant's Improvements
have been received (or specifying the amount still outstanding); that on this
date there are no existing claims, defenses or offsets which Tenant has against
the enforcement of this Lease by Landlord (or specifying the nature and amount
of such claims, defenses of offsets); that no Rent has been paid more than one
month in advance (or specifying the amount of Rent prepaid); and the amount of
any security deposit held by Landlord.
ARTICLE 24.
TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer or transfers of Landlord's interest in the
Premises or the Building, other than a transfer for security purposes only, the
transferor shall be automatically relieved of any and all obligations and
liabilities on the part of Landlord accruing from and after the date of such
transfer and such transferee shall have no obligation or liability with respect
to any matter occurring or arising prior to the date of such transfer and Tenant
agrees to attorn to the transferee; provided that Landlord is not relieved of
--------
any liability, including its indemnity
12
<PAGE>
obligations, with respect to matters in existence or events occurring prior to
the transfer and the transferee assumes and agrees to perform all obligations of
Landlord to be performed and be bound by all of Landlord's representations,
warranties, covenants and liabilities under this Lease from and after the date
of transfer.
ARTICLE 25.
NONWAIVER
Waiver by Landlord or Tenant of any term, covenant or condition herein
contained or any breach thereof shall not be deemed to be a waiver of such term,
covenant, or condition or of any subsequent breach of the same or any other
term, covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent.
ARTICLE 26.
QUIET POSSESSION
Landlord warrants that, so long as Tenant is not in default under this
Lease beyond any applicable cure period with respect to a default for which
Landlord has notified Tenant this Lease is being terminated, Tenant's quiet
possession of the Premises shall not be disturbed by Landlord or others claiming
through Landlord.
ARTICLE 27.
PARKING
During the entire Lease Term, Landlord shall provide Tenant up to, at
Tenant's option, seven (7) employee parking stalls in the parking lot adjacent
to the Building (the "Parking Lot") at a monthly rate which shall be the current
rate charged to other parking tenants at the Parking Lot (currently One Hundred
Fifty Dollars ($150.00) per month per stall).
ARTICLE 28.
[INTENTIONALLY OMITTED]
ARTICLE 29.
GENERAL
Section 29.1 Headings. Titles to sections of this Lease are not a part of
this Lease and shall have no effect upon the construction or interpretation of
any part hereof.
Section 29.2 Heirs and Assigns. All of the covenants, agreements, terms
and conditions contained in this Lease shall inure to and be binding upon
Landlord and Tenant and their respective heirs, executors, administrators,
successors and assigns.
Section 29.3 No Brokers. Except for Colliers International (for whose
commission or fee Landlord shall be responsible for paying up to Twenty-one
Thousand Dollars ($21,000) and Tenant shall be responsible for paying the
balance, if any), Landlord and Tenant each represents
13
<PAGE>
and warrants to the other that it has not engaged any other broker, finder or
other person who would be entitled to any commission or fees from Landlord or
Tenant in respect of the negotiation, execution or delivery of this Lease.
Landlord and Tenant, as applicable, shall indemnify and hold harmless the other
against any loss, cost, liability or expense incurred by the other as a result
of any claim asserted by any such broker, finder or other person on the basis of
any arrangements or agreements made or alleged to have been made by or on behalf
of Landlord or Tenant, as applicable.
Section 29.4 Entire Agreement. This Lease contains all covenants and
agreements between Landlord and Tenant relating in any manner to the leasing,
use and occupancy of the Premises and Tenant's use of the Building and other
matters set forth in this Lease. No prior agreements or understandings
pertaining to the same shall be valid or of any force or effect and the
covenants and agreements of this Lease shall not be altered, modified or added
to except in writing signed by Landlord and Tenant.
Section 29.5 Severability. Any provision of this Lease that shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and the remaining provisions hereof shall nevertheless
remain in full force and effect.
Section 29.6 Force Majeure. Except as otherwise expressly provided in this
Lease, time periods for either party's performance under any provisions of this
Lease shall be extended for periods of time during which such performance is
prevented due to circumstances beyond such party's reasonable control, including
without limitation, strikes, embargoes, shortages of labor or materials,
governmental regulations, acts of God, war or other strife.
Section 29.7 Building Directory. Landlord shall maintain in the lobby of
the Building a directory which shall include the names of Tenant and its
employees as reasonably requested by Tenant. Such list shall be updated from
time to time when requested by Tenant.
Section 29.8 Governing Law. This Lease shall be governed by and construed
in accordance with the laws of the State of Washington.
Section 29.9 Notice Addresses. All notices given under this Lease shall be
sent to the addresses set forth on the signature page of this Lease, or to such
other address as either party from time to time may provide the other in
writing.
Section 29.10 No Joint Venture. The relationship between the parties is
strictly one of landlord and tenant. Nothing in this Lease or otherwise shall be
construed or deemed to create a joint venture with respect to the Building
between Landlord and Tenant.
Section 29.11 Time; Approvals and Consents. Time is of the essence of this
Lease. Whenever a party's approval or consent is required or permitted under
this Lease, such approval or consent shall not be unreasonably withheld, delayed
or conditioned unless specifically provided to the contrary herein.
Section 29.12 Right of First Refusal. In the event that at any time during
the term of this Lease, any space on the Second Floor of the Building becomes
available for lease (the "Expansion Space"), Landlord shall deliver to Tenant a
notice of the availability of the
14
<PAGE>
Expansion Space and an offer to Tenant to lease the Expansion Space (the
"Notice") as part of the Premises under this Lease. The determination of the
term, the amount of Basic Rent, and applicable tenant improvement allowance for
the Expansion Space shall be proposed by Landlord and shall be included in the
Notice to Tenant. Tenant shall have the right within fifteen (15) days from
receipt of the Notice to accept the offer and lease the Expansion Space on the
terms, covenants and conditions proposed by Landlord. If Tenant timely accepts
Landlord's offer to lease the Expansion Space, an amendment to this Lease shall
be prepared and executed by Landlord and Tenant. If Tenant fails to respond
within the allocated time, Tenant shall be deemed to have rejected the offer as
it relates to the then offered Expansion Space and Landlord may lease such space
to third parties on substantially the same terms as offered in the Notice (or on
terms clearly more favorable to Landlord), but Tenant's right of first refusal
hereunder shall continue in effect for other space on the Second Floor in the
Building and for the Expansion Space should it not be leased to a third party
within one hundred twenty (120) days following delivery of the Notice.
Section 29.13 Rooftop Rights; Utilities. For and in consideration of
Tenant's entering into this Lease, Landlord hereby grants to Tenant during the
Lease Term the right to install, maintain, operate, repair and replace on the
rooftop of the Building one or more communications dishes and/or antennae,
together with cable connections to the Premises. All rooftop equipment shall be
installed in a location reasonably acceptable to Tenant. Tenant shall be
responsible for the costs and expenses of installing such equipment and removing
such equipment at the end of the Lease Term. Landlord hereby covenants and
agrees that it shall not, during the Lease Term, construct any additional
improvements on or over the roof of the Building.
Section 29.14 Tenant's Access to Utilities. During the Lease Term, Tenant
shall have the right to access all utilities serving the Premises on a 24 hour,
7 day per week basis.
Section 29.15 Landlord's Representations and Warranties. In addition to
any other representations and warranties set forth in this Lease, Landlord
hereby represents and warrants to Tenant as follows:
(i) Landlord has such title to the Premises and the Building
as required to be able to grant the leasehold and appurtenant rights to Tenant
therein as described in this Lease;
(ii) the grant of leasehold and appurtenant rights to Tenant in
this Lease do not violate (or have been granted in compliance with) all rights
of third parties in and to the Building;
(iii) Landlord is not aware of any components or conditions
existing with respect to the Premises or the Building that do or may reasonably
be expected to (A) constitute violations of existing rules, regulations,
applicable laws, statutes or codes; (B) constitute violations of applicable
federal, state or local environmental protection or hazardous or toxic
substances legislation, rules or regulations; (C) contain (other than incidental
or trace amounts of) hazardous substances, or give rise to notice obligations
under "worker's right to know" or comparable legislation; or (D) render the
Premises (or the other portions of the Building as to which Tenant is granted
appurtenant rights) not reasonably fit or useable for their intended purposes;
15
<PAGE>
(iv) the existing HVAC, electrical and plumbing systems and
equipment serving the Premises are in good working condition as of the date of
Lease execution;
(v) the existing restrooms and common areas are not presently in
full compliance with the Americans With Disabilities Act of 1990 ("ADA") as of
the execution date of Lease, however, if it becomes necessary in the future to
modify such restrooms or common areas to comply with the ADA or other similar
laws or regulations, Landlord shall be responsible for all such modifications,
at its cost and expense; and
(vi) there are no Year 2000 Conditions that would have a material
adverse effect on the operations of the Building or its systems. A "Year 2000
Condition" means any condition that would cause software not to (a) correctly
handle date information before, during and after January 1, 2000, (b) function
accurately and without interruption before, during and after January 1, 2000,
without any change in operations associated with the advent of the new century,
(c) respond to two-digit, year-date input in a way that resolves the ambiguity
as to century in a disclosed, defined and predetermined manner, and (d) store
and provide output of date information in ways that are unambiguous as to
century.
IN WITNESS WHEREOF, the Landlord and the Tenant have executed this Lease as
of the day and year first above written.
LANDLORD: WESTLAKE PARK ASSOCIATES, a Washington limited
partnership
/s/ Barry N. Ampay
By_____________________________________________
Its General Partner
Address:
c/o Mayflower Park Hotel
405 Olive Way
Seattle, Washington 98101
Telephone: (206) 382-6992
Telecopy: (206) 382-6996
16
<PAGE>
TENANT: ENCODING.COM, INC.,
a Delaware corporation
By_________________________________________
Its__________________________________
Address:
414 Olive Way, Suite 400
Seattle, Washington 98101
Attention: Chief Financial Officer
Telephone: (206) 832-4102
Telecopy: (206) 832-4001
EXHIBITS:
A Legal Description
B Premises Floor Plan
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _____ day of December, 1999, before me, a Notary Public in and for
the State of Washington, personally appeared ____________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who signed this instrument; on oath stated that HE/SHE was authorized to
execute the instrument as general partner of WESTLAKE PARK ASSOCIATES, a
Washington limited partnership; acknowledged said instrument to be HIS OR HER
free and voluntary act and deed, as general partner, for the uses and purposes
therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day
and year first above written.
_________________________________________________
NOTARY PUBLIC in and for the State of Washington,
residing at______________________________________
My appointment expires___________________________
Print Name_______________________________________
17
<PAGE>
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this _____ day of December, 1999, before me, a Notary Public in and for
the State of Washington, personally appeared __________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed this instrument, on oath stated that _____ was
authorized to execute the instrument, and acknowledged it as the
________________________ of ENCODING.COM, INC., to be the free and voluntary act
and deed of said corporation for the uses and purposes mentioned in the
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day
and year first above written.
_________________________________________________
NOTARY PUBLIC in and for the State of Washington,
residing at______________________________________
My appointment expires___________________________
Print Name_______________________________________
18