Washington-Seattle-308/316 Occidental Avenue South Lease - Com Realty Inc. and Seattle Software Labs Inc.
OFFICE LEASE
OCCIDENTAL MALL
MSI
MARTIN SMITH INC
400 BRODERICK BUILDING
615 2ND AVENUE
SEATTLE, WASHINGTON 98104
682-3300 FAX 340-1283
THIS LEASE made this 15th day of March 1996, by and between COM REALTY,
INC., a Delaware corporation, as "Landlord," and SEATTLE SOFTWARE LABS, INC., a
Washington corporation, as "Tenant."
As parties hereto, Landlord and Tenant agree that the following terms as
used herein shall have the meanings provided in Section 1, unless otherwise
specifically modified by provisions of this Lease:
1. LEASE DATA AND EXHIBITS:
a. Building: ("Building"), the Burke Building (316 Occidental Avenue
South, Seattle, Washington) and the State Building (308 Occidental
Avenue South, Seattle, Washington), together known as Occidental Mall,
located in Seattle, Washington, situated on the real property more
particularly described in Section 2 hereof (the "Land").
b. Premises: ("Premises"), consisting of the floor area on the third
(3rd) floor of the Burke Building, as outlined in red on the floor
plan(s) of the Building, attached hereto as Exhibit A.
c. Agreed Areas: As used in this Lease, Landlord and Tenant agree to the
following areas and percentage of the Premises and the Building: Area
of the Building is the total square feet calculated on a full-floor
basis or 111,308 square feet; area of Tenant's Premises is
approximately 3,392 rentable square feet; Tenant's Percentage of the
Building is 3.05 percent.
d. Plan Delivery Date: N/A
e. Lease Commencement Date: April 1, 1996 or such earlier or later date
as provided in Section 3 hereof ("Commencement Date").
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f. Lease Expiration Date: March 31, 2001 ("Expiration Date").
g. Rent: Rent shall be as set forth below, payable on or before the first
day of each month. Rent shall be adjusted from time to time as provided
in Sections 7, 8, and 9 hereof.
April 1, 1996 to May 31, 1996 $0.00
June 1, 1996 to March 31, 1997 $4,276.75 per month
April 1, 1997 to March 31, 1998 $4,418.08 per month
April 1, 1998 to March 31, 1999 $4,559.41 per month
April 1, 1999 to March 31, 2000 $4,700.75 per month
April 1, 2000 to March 31, 2001 $4,842.08 per month
h. Security Deposit: $4,842.08
i. For Notices and Payments:
Landlord: COM Realty, Inc.
c/o Martin Smith Inc, Agent
615 Second Avenue, Suite 400
Seattle, Washington 98104
Tenant: Seattle Software Labs, Inc.
316 Occidental Avenue South, Suite 301
Seattle, Washington 98104
j. Exhibits: The following exhibits or riders are made a
part of this Lease:
Exhibit A-Floor Plan of Premises.
Exhibit B-Guaranty
2. PREMISES: Landlord does not hereby lease to Tenant, and Tenant does hereby
lease from Landlord, upon the terms and conditions herein set forth, those
certain Premises described in Subsection 1.b hereof, located in Seattle,
King County, Washington, more particularly described as:
Lots 1,2,3, and 4, Block 11, Town of Seattle, as laid out by D. S.
Maynard, commonly known as D. S. Maynard's Plat of Seattle, according
to the plat recorded in Volume 1 of Plats, Page 23, in King County,
Washington; EXCEPT the West 9 feet thereof condemned in District Court
Cause No. 7089 for Occidental Avenue, as provided by Ordinance No.
1109 of the City of Seattle; and EXCEPT that portion of said Lot 2
conveyed to Wilbert L. Smith by Deed recorded under recording number
186629 in King County, Washington.
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3. COMMENCEMENT AND EXPIRATION DATES:
a. Lease Commencement Date: The Lease Commencement Date shall be:
i. The date specified in Subsection 1.e unless notice is delivered
pursuant to Subsection 3.a.ii or
ii. Such earlier or later date as may be specified in a notice
delivered to Tenant at least five days before such date upon
which the Premises, together with the common facilities for
access and service therein, have been completed.
b. Tenant Termination Rights: In the event a Lease Commencement Date as
provided in Subsection 3.a.ii above does not occur within three months
following the Lease Commencement Date specified in Subsection 1.e,
Tenant may terminate this Lease by written notice to Landlord not
later than ten (10) days following the end of such three-month period.
c. Confirmation of Commencement Date: When a Lease Commencement Date as
provided in Subsections 3.a.ii and iii above has been established as a
later or earlier date than the Lease Commencement Date provided in
Subsection 1.e hereof, Landlord shall confirm the same to Tenant in
writing.
d. Lease Expiration Date: This Lease shall expire on the date specified
in Subsection 1.f.
4. RENT: Tenant shall pay Landlord the monthly rental stated in Subsection
1.g hereof ("Rent") and Additional Rent as provided in Sections 8 and 9 and
any other additional payments due under this Lease, without deduction or
offset, payable in lawful money of the United States in advance on or
before the day specified in Subsection 1.g to Landlord at the address noted
in Subsection 1.i hereof, or to such other party or at such other place as
Landlord may hereafter from time to time designate in writing. Rent for any
partial month at the beginning or ending of the lease term shall be
prorated.
5. SECURITY DEPOSIT: As partial consideration for the execution of this
Lease, Tenant has paid to Landlord the sum specified in Subsection 1.h
hereof, the receipt of which is hereby acknowledged. If Tenant shall
default with respect to any covenant or condition of this Lease, including
but not limited to the payment of rent, Landlord may apply all or any part
of such deposit to the payment of any sum in default or any other sum which
Landlord may be required to spend or incur by reason of Tenant's default;
and in such event, Tenant shall upon demand deposit with Landlord the
amount so applied so that Landlord shall have the full deposit on hand at
all times during the term of this Lease. If Tenant shall have fully
complied with all of the covenants and
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conditions of this Lease, but not otherwise, such sum shall be repaid to
Tenant within 30 days after the expiration or sooner termination of this
Lease.
6. USES: The Premises are to be used only for general office purposes (the
"Permitted Uses"), and for no other business or purpose without the written
consent of Landlord. No act shall be done in or about the Premises that is
unlawful or that will increase the 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 which
disturbs the quiet enjoyment of any other tenant in the Building. Tenant
shall not, without the written consent of Landlord, use any apparatus,
machinery or device in or about the Premises which will cause any
substantial noise or vibration. If any of Tenant's office machines and
equipment should disturb the quiet enjoyment of any other tenant in the
Building, then Tenant shall provide adequate insulation, or take such other
action as may be necessary to eliminate the disturbance. Tenant shall
comply with all laws relating to its use of the Premises and shall observe
such reasonable rules and regulations as may be adopted and published by
Landlord for the safety, care and cleanliness of the Premises or the
Building, and for the preservation of good order therein.
7. SERVICES AND UTILITIES: As long as Tenant is not in default under any of
the provisions of this Lease, Landlord shall maintain the Premises and the
public and common areas of the Building, such as lobbies, stairs, corridors
and restrooms, in reasonably good order and condition except for damage
occasioned by the act or omission of Tenant, the repair of which damage
shall be paid for by Tenant.
Landlord shall furnish the Premises with electricity for lighting and the
operation of low-power-usage office machines, heat and normal air
conditioning, and elevator service during ordinary business hours. Landlord
shall also provide light replacement service for Landlord-furnished
lighting, toilet room supplies, window washing at reasonable intervals, and
customary building janitorial service.
Landlord shall not be liable to Tenant for any loss or damage caused by or
resulting from any variation, interruption, or failure to such services due
to any cause whatsoever. No temporary interruption or failure of such
services incident to the making of repairs, alterations, or improvements,
or due to accident or strike or conditions or events beyond Landlord's
reasonable control shall be deemed an eviction of Tenant or relieve Tenant
from any of Tenant's obligations hereunder.
Before installing any equipment in the Premises that generates more than a
minimum amount of heat, Tenant shall obtain the written permission of
Landlord, and Landlord may refuse to grant such permission if the amount of
heat generated would place an undue burden on the air conditioning system
of the Building.
If Tenant uses any high-power-usage equipment in the Premises, Tenant shall
in advance, on the first day of each month during the least term, pay
Landlord as
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Additional Rent the reasonable amount estimated by Landlord as the cost of
furnishing electricity for the operation of such equipment. The monthly
Rent stated in Subsection 1.g hereof does not include any amount to cover
the cost of furnishing electricity for such purpose unless so stated
herein.
Tenant shall pay prior to delinquency all personal property taxes payable
with respect to all property of Tenant located on the Premises or the
Building and shall provide promptly, upon request of Landlord, written
proof of such payment.
8. COST OF SERVICES AND UTILITIES:
a. Definition of Terms: In addition to the Rent provided in Subsection
1.g of this Lease, Tenant shall pay to Landlord increases under this
Section as "Additional Rent." The increases shall be made as provided
herein, utilizing the following definitions:
i. "Operating Costs " shall include Costs of Utilities and Other
Operating Costs.
(1) "Costs of Utilities" shall mean all expenses paid or incurred
by Landlord for electricity, including any surcharges
imposed, water, gas, sewers, and similar utilities services.
(2) "Other Operating Costs" shall mean all other expenses paid or
incurred by Landlord for maintaining, operating and repairing
the Building and the personal property used in conjunction
therewith, including, without limitation, the costs of refuse
collection, supplies, janitorial and cleaning services, window
washing, landscape maintenance, services of independent
contractors, compensation (including employment taxes and
fringe benefits) of all persons who perform duties in
connection with the operation, maintenance and repair of the
Building, its equipment and the Land upon which it is
situated, insurance premiums, licenses, permits and inspection
fees, customary management fees, legal and accounting expenses
and any other expense or charge whether or not hereinabove
described which in accordance with generally accepted
accounting and management practices would be considered an
expense of maintaining, operating or repairing the Building,
excluding:
(a) Costs of any special services rendered to individual
tenants (including Tenant) for which a special charge
is made;
(b) Real Property Taxes (as defined in this Lease); and
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(c) Depreciation or amortization of costs required to be
capitalized in accordance with generally accepted
accounting practices (except Operating Costs shall
include amortization of capital improvements made
subsequent to the initial development of the Building
which are designed with a reasonable probability of
improving the operating efficiency of the Building,
provided that such amortization costs shall not exceed
expected savings in operating costs resulting from such
capital improvements).
ii. "Lease Year" shall mean the twelve-month period commencing
January 1 and ending December 31.
iii. "Base Services Year" shall mean the Lease Year in which the
Lease Commencement Date occurs.
iv. "Actual Costs" shall mean the actual expenses paid or incurred by
Landlord for Operating Costs during any Lease Year of the term
hereof.
v. "Actual Costs Allocable to the Premises" shall mean the Tenant's
share of the Actual Costs determined by Tenant's Percentage of
the Building described in Subsection 1.c.
vi. "Estimated Costs Allocable to the Premises" shall mean Landlord's
estimate of Actual Costs Allocable to the Premises for the
following Lease Year to be given by Landlord to Tenant pursuant
to Subsection 8.c below.
b. Base Amount: Actual Costs Allocable to the Premises for the Base
Services Year shall be deemed the "Base Amount" for purposes of this
Section; provided, however, that for purposes of determining any
Additional Rent for Operating Costs, Landlord shall estimate, to the
extent required, the Base Amount in connection with the statement
furnished in accordance with Subsection 8.c below; provided, however,
that payments shall be further adjusted as appropriate at the time the
Actual Costs are determined in accordance with Subsection 8.d below.
c. Additional Rent for Estimated Increases in Costs: Prior to the
commencement of each Lease Year (except the Base Services Year) during
the term hereof, Landlord shall furnish Tenant a written statement of
the Estimated Costs Allocable to the Premises for such Lease Year, and
a calculation of the Additional Rent as follows: One-twelfth (1/12) of
the amount, if any, by which such Estimated Costs Allocable to the
Premises for such Lease Year exceed
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the Base Amount shall be Additional Rent payable by Tenant as provided
in Section 4, "Rent," for each month during such Lease Year. If at any
time or times during such Lease Year it appears to Landlord that the
Actual Costs Allocable to the Premises for such Lease Year will vary
from Landlord's estimate by more than 5 percent on an annualized basis,
Landlord may, by written notice to Tenant, revise its estimate for such
Lease Year and Additional Rent payments by Tenant for such Lease Year
shall be based on such revised estimate.
d. Actual Costs: Within 90 days after the close of each Lease Year during
the term hereof, or as soon thereafter as practicable, Landlord shall
deliver to Tenant a written statement setting forth the Actual Costs
Allocable to the Premises during the preceding Lease Year. If such
costs for any Lease Year exceed Estimated Costs Allocable to the
Premises paid by Tenant to Landlord pursuant to the preceding
Subsection c, Tenant shall pay the amount of such excess to Landlord as
added Additional Rent within 30 days after receipt of such statement by
Tenant. If such statement shows such costs to be less than the amount
paid by Tenant to Landlord pursuant to the preceding Subsection c, then
the amount of such overpayment by Tenant shall be credited by Landlord
to the next immediate Rent payable by Tenant.
e. Determination: The determination of Actual Costs and Estimated Costs
Allocable to the Premises shall be made by Landlord.
f. End of Term: If this Lease shall terminate on a day other than the
last day of a Lease Year, the amount of any adjustment between
Estimated and Actual Costs Allocable to the Premises with respect to
the Lease Year in which termination occurs shall be prorated on the
basis which the number of days from the commencement of such Lease Year
to and including such termination date bears to 365; and any amount
payable by Landlord to Tenant or Tenant to Landlord with respect to
such adjustment shall be payable within 30 days after delivery by
Landlord to Tenant of the statement of Actual Costs Allocable to the
Premises with respect to such Lease Year.
g. Further Adjustment: In the event the average occupancy level of the
Building for the Base Services Year and/or any subsequent Lease Year
was not 90 percent or more of full occupancy, then the Actual Costs
for such year shall be proportionately adjusted by Landlord to reflect
those costs which would have occurred had the Building been 90 percent
occupied during such year.
h. Base Rent: Notwithstanding anything to the contrary in this Section 8
or in Section 9, the Rent payable by Tenant shall in no event be less
than the Rent specified in Subsection 1.g of this Lease.
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i. Nonpayment of Additional Rent: In the event of nonpayment of the
Additional Rent hereunder, Landlord shall have the same rights with
respect to such nonpayment as it has with respect to any other
nonpayment of Rent hereunder.
9. REAL PROPERTY TAXES:
a. Definition of Terms: In addition to the Rent provided in Subsection
1.g of this Lease, Tenant shall pay to Landlord increases under this
Section 9. The increases shall be made as provided herein, utilizing
the following definitions:
i. "Real Property Taxes" shall mean taxes on real property and
personal property, including all tenant improvements which are
paid for by Landlord and not reimbursed by tenants of the
Building, and taxes on Property of Tenant, as defined in
Subsection 9.a.iv, which have not been paid by Tenant directly to
the taxing authority; charges and assessments levied with respect
to the Land, the Building, any improvements, fixtures, and
equipment and all other property of Landlord, real or personal,
used directly in the operation of the Building; and any taxes
levied or assessed in addition to or in lieu of, in whole or in
part, such real property taxes, or any other tax upon leasing of
the Building or rents collected, but not including any federal or
state income tax or franchise tax.
ii. "Lease Year" shall mean the period defined in Section 8.a.ii.
iii. "Base Tax Year" shall mean the Lease Year in which the Lease
Commencement Date occurs.
iv. "Tenant's Share of Real Property Taxes" shall mean the amount of
Real Property Taxes payable during any Lease Year by Landlord
multiplied by Tenant's Percentage of the Building described in
Section 1.c, plus any Real Property Taxes attributable to
Property of Tenant, if any. As used herein, "Property of Tenant"
shall include improvements which are paid for by Tenant and not
reimbursed by Landlord and improvements originally paid for by
Landlord, the costs of which are reimbursed by Tenant.
b. Additional Rent for Estimated Increases in Tenant's Share of Real
Property Taxes: Prior to the commencement of each Lease Year (except
the Base Tax Year) Landlord shall furnish Tenant with a written
statement setting forth the estimated Tenant's Share of Real Property
Taxes for such Lease Year. One-twelfth (1/12) of the amount, if any, by
which such estimated Tenant's Share of Real Property
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Taxes exceeds the Tenant's Share of Real Property Taxes for the Base
Tax Year shall be Additional Rent payable by Tenant as provided in
Section 4, "Rent," herein for each month during such Lease Year.
c. Actual Real Property Taxes Within 90 days after the close of each Lease
Year during the term hereof, or as soon thereafter as practicable,
Landlord shall deliver to Tenant a written statement setting forth the
Tenant's Share of Real Property Taxes during the preceding Lease Year.
If such amount for any Lease Year exceeds the amount paid pursuant to
Section 9.b above as Additional Rent for such Lease Year, Tenant shall
pay the amount of such excess to Landlord as added Additional Rent
within 30 days after receipt of such statement by Tenant. If such
statement shows such amount to be less than the amount paid by Tenant
to Landlord pursuant to Section 9.b above, then the amount of such
overpayment shall be credited by Landlord to the next immediate Rent
payable by Tenant within 30 days following the date of such statement.
d. Personal Property Taxes: Tenant shall pay, prior to delinquency, all
Personal Property Taxes payable with respect to all Property of Tenant
located on the Premises or the Building and shall provide promptly,
upon request of Landlord, written proof of such payment.
e. Determinations: The determination of Tenant's Share of Real Property
Taxes and estimates thereof shall be made by Landlord.
f. End of Term: If this Lease shall terminate on a day other than the
last day of a Lease Year, the amount of any adjustment between Tenant's
Share of Real Property Taxes and estimates thereof with respect to the
Lease Year in which such termination occurs shall be prorated on the
basis which the number of days from the commencement of such Lease Year
to and including such termination date bears to 365; and any amount
payable by Landlord to Tenant or Tenant to Landlord with respect to
such adjustment shall be payable within 30 days after delivery by
Landlord to Tenant of the statement of Tenant's Share of Real Property
Taxes with respect to such Lease Year.
g. Nonpayment of Additional Rent. In the event of Nonpayment of
Additional Rent payable by Tenant hereunder, Landlord shall have the
same rights with respect to such nonpayment as it has with respect to
any other nonpayment of Rent hereunder.
h. Historic Designation: Due to the Historic Designation of the
Occidental Mall Building, the Building qualifies for a special tax
valuation designation pursuant to the Special Valuation of Property
Act, Chapter 84-26RCW. This designation was a material economic
element necessary to induce the Landlord to undertake and finance the
rehabilitation of the Occidental Mall. As a result
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of this Special Valuation of Property Act, the Occidental Mall
qualifies for a special tax valuation, and, as a result, the Real
Property Taxes have been reduced below the amount that would be due and
owing if the Building did not qualify for the special tax valuation.
For purposes of this Section 9 "Real Property Taxes," the Base Year
Real Property Taxes and subsequent Lease Year Real Property Taxes shall
be calculated based on full assessed value multiplied by the applicable
mileage rate then in effect.
10. IMPROVEMENTS: Upon expiration or sooner termination of this Lease, all
improvements and additions to the Premises shall become the property of
Landlord.
11. CARE OF PREMISES: Tenant shall take good care of the Premises.
Tenant shall, at the expiration or termination of this Lease, surrender and
deliver the Premises to Landlord in as good condition as when received by
Tenant from Landlord or as thereafter improved, reasonable use and wear and
damage by fire or other casualty excepted.
Tenant shall not make any alterations, additions or improvements in or to
the Premises, or make changes to locks on doors, or add, disturb or in any
way change any plumbing or wiring without first obtaining the written
consent of Landlord and, where appropriate, in accordance with plans and
specifications approved by Landlord. All damage or injury done to the
Premises or the Building by Tenant or by any persons who may be in or upon
the Premises or the Building with the consent of Tenant, including the
cracking or breaking of glass of any windows and doors, shall be paid for
by Tenant, and Tenant shall pay for all damage to the Building or the
Building caused by Tenant's misuse of the Premises or the appurtenances
thereto. Tenant shall not put any curtains, draperies or other hangings on
or beside the windows in the Premises without first obtaining Landlord's
consent. All normal repairs necessary to maintain the Premises in a
tenantable condition shall be done by or under the direction of Landlord
and at Landlord's expense except as otherwise provided herein. Landlord
shall be the sole judge as to what repairs are necessary.
12. ACCEPTANCE OF PREMISES: If this Lease shall be entered into prior to the
completion of Tenant Improvements in the Premises to be occupied by Tenant,
the acceptance of the Premises by Tenant shall be deferred until the giving
of written notice by Landlord to Tenant of the completion of such
construction; thereupon Tenant shall, within five days after the giving of
such notice, make such inspection of the Premises as Tenant deems
appropriate, and, except as otherwise notified by Tenant in writing to
Landlord within such period, Tenant shall be deemed to have accepted the
Premises in their then condition. If as a result of such inspection Tenant
discovers minor deviations or variations from the plans and specifications
for Tenant's Improvements of a nature commonly found on a "punch list" (as
that term is used in
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the construction industry), Landlord shall promptly correct such deviations
and variations upon receipt of such notice from Tenant. The existence of
such punch list items shall not postpone the effective date of this Lease.
13. SPECIAL IMPROVEMENTS: Tenant shall reimburse Landlord for Landlord's costs
of making all special improvements requested by Tenant, including but not
limited to counters, partitioning, electrical and telephone outlets and
plumbing connections, other than as shown on an exhibit or other attachment
hereto as being furnished by Landlord; provided, however, Tenant shall not
be obligated to pay for the cost of any such special improvements made
without a written request therefor by Tenant to Landlord.
14. ACCESS: Tenant will permit Landlord and its agents to enter into and upon
the Premises at all reasonable times for the purpose of inspecting the same
or for the purpose of cleaning, repairing, altering or improving the
Premises or the Building. Nothing contained in this Section shall be deemed
to impose any obligation upon Landlord not expressly stated elsewhere in
this Lease. When reasonably necessary, Landlord may temporarily close
entrances, doors, corridors, elevators or other facilities without
liability to Tenant by reason of such closure and without such action by
Landlord being construed as an eviction of Tenant or as relieving Tenant
from the duty of observing and performing any of the provisions of this
Lease. Landlord shall have the right to enter the Premises for the purpose
of showing the Premises to prospective tenants within the period of 180
days prior to the expiration or sooner termination of the lease term.
15. DAMAGE OR DESTRUCTION: If the Premises shall be destroyed or rendered
untenantable, either wholly or in part, by fire or other unavoidable
casualty, Landlord may, at its option, restore the Premises to its previous
condition, and in the meantime the Rent shall be abated in the same
proportion as the untenantable portion of the Premises bears to the whole
thereof; but unless Landlord within 30 days after the happening of any such
casualty shall notify Tenant of its election to so restore the Premises,
this Lease shall thereupon terminate and end. In the event Landlord elects
to restore the Premises and does not complete such restoration within 180
days following its notification to Tenant, then Tenant may terminate this
Lease.
If the Building shall be destroyed or damaged by fire or other casualty
insured against under Landlord's fire and extended coverage insurance
policy to the extent that more than 50 percent thereof is rendered
untenantable, or in the event the Building shall be materially destroyed or
damaged by any other casualty other than those covered by such insurance
policy, notwithstanding that the Premises may be unaffected directly by
such destruction or damage, Landlord may, at its election, by prior written
consent of any first mortgage, terminate this Lease by notice in writing to
Tenant within 60 days after such destruction or damage. Such notice shall
be effective 30 days after receipt thereof by Tenant.
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16. WAIVER OF SUBROGATION: Whether the loss or damage is due to the negligence
of either Landlord or Tenant, their agents or employees, or any other
cause, Landlord and Tenant do each hereby release and relieve the other,
their agents or employees, from responsibility for, and waive their entire
claim of recovery for (i) any loss or damage to the real or personal
property of either located anywhere in the Building, including the Building
itself, arising out of or incident to the occurrence of any of the perils
which are covered by their respective fire insurance policies, with
extended coverage endorsements, and (ii) any loss resulting from business
interruption at the Premises or loss of rental income from the Building,
arising out of or incident to the occurrence of any of the perils which may
be covered by the business interruption insurance policy and by the loss of
rental income insurance policy held by Landlord or Tenant. Each party
shall use its best efforts to cause its insurance carriers to consent to
the foregoing waiver of rights of subrogation against the other party.
Notwithstanding the foregoing, no such release shall be effective unless
the aforesaid insurance policy or policies shall expressly permit such a
release or contain a waiver of the carrier's right to be subrogated.
17. INDEMNIFICATION: Tenant shall defend and indemnify Landlord and save it
harmless from and against any and all liability, damages, costs, or
expenses, including attorneys' fees, arising from any act, omission, or
negligence of Tenant or its officers, contractors, licensees, agents,
servants, employees, guests, invitees, or visitors in or about the Building
or Premises, or arising from any injury or damage to any person or
property, occurring in or about the Building or Premises as a result of any
act, omission or negligence of Tenant, or its officers, contractors,
licensees, agents, employees, guests, or visitors, or arising from any
breach or default under this Lease by Tenant. Tenant shall, at its own
expense, keep and maintain in full force and effect during the term of this
Lease, a policy of commercial general liability insurance insuring Tenant's
activities with respect to the Premises or the Building against loss,
damage or liability for personal injury or death or loss or damage to
property with a limit of not less than $1,000,000.00 combined single limit.
Insurance required under this Section shall be with companies rated A-XV or
better in Best's Insurance Guide. No insurance policy shall be canceled or
reduced in coverage and each such policy shall provide that it is not
subject to cancellation or a reduction in coverage except after 30 days'
prior written notice to Landlord. Tenant shall deliver to Landlord upon
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 also evidencing Landlord as an additional insured on such
liability policies. In no event shall the limits of such policies be
considered as limiting the liability of Tenant under this Lease. The
foregoing provisions shall not be construed to make Tenant responsible for
loss, damage, liability or expense resulting form injuries to third parties
caused by the gross negligence or willful misconduct of Landlord, or its
officers, contractors, licensees, agents, employees, or invitees; provided,
however, that in no event shall Landlord be liable to Tenant for any damage
to the Premises or for any loss, damage or injury to any property therein
or thereon resulting from acts by other
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third parties or occasioned by bursting, rupture, leakage or overflow of
any plumbing or other pipes (including, without limitation, water, steam
and/or refrigerant lines), sprinklers, tanks, drains, drinking fountains or
washstands or other similar cause in, above, upon or about the Premises or
the Building.
Landlord shall not be liable for any loss or damage to person or property
sustained by Tenant or other persons, which may be caused by theft, or by
any act or neglect of any tenant or occupant of the Building or any other
third parties.
18. ASSIGNMENT AND SUBLETTING: Tenant shall not assign this Lease nor sublet
the whole or any part of the Premises without first obtaining Landlord's
written consent, which consent shall not be unreasonably withheld. In
determining whether to approve a proposed assignment or sublease, Landlord
may consider without limitation the proposed transferee's reputation and
creditworthiness, the character of the business to be conducted by the
proposed transferee at the Premises and the effect of such assignment or
subletting on the tenant mix in the Building. In addition, Landlord shall
have the right to approve the specific form of any assignment or sublease
agreement. In no event shall Landlord be obligated to consent to any
assignment or subletting which materially increases (i) the Operating Costs
of the Building, (ii) the burden on the Building services, or (iii) the
foot traffic, elevator usage or security concerns in the Building or
creates an increased probability of the comfort and/or safety of the
Landlord and other tenants in the Building being unreasonably compromised
or reduced. (For example, but not exclusively, Landlord may deny consent
to an assignment or subletting where the space would be used for a school
or training facility, an entertainment, sports or recreation facility,
retail sales to the public, a personnel or employment agency, or an embassy
or consulate or similar office. Landlord shall not be obligated to approve
an assignment or subletting to (a) a current tenant of the Building or (b)
a prospective tenant of the Building with whom Landlord is then
negotiating. No such assignment or subletting shall relieve Tenant of any
liability under this Lease. Consent to any such assignment or subletting
shall not operate as a waiver of the necessity for a consent to any
subsequent assignment or subletting, and the terms of such consent shall be
binding upon any person holding by, under or through Tenant.
If Tenant is a corporation, then any transfer of this Lease by merger,
consolidation or liquidation, or any change in the ownership of, or power
to vote the majority of its outstanding voting stock, shall constitute an
assignment for the purpose of this Section.
19. ADVERTISING: Tenant shall not inscribe any inscription or post, place, or
in any manner display any sign, notice, picture, placard or poster, or any
advertising matter whatsoever, anywhere in or about the Premises or the
Building at places visible (either directly or indirectly as an outline or
shadow on a glass pane) from anywhere outside the Premises without first
obtaining Landlord's written consent thereto. Any such
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<PAGE>
consent by Landlord shall be upon the understanding and condition that
Tenant will remove the same at the expiration or sooner termination of this
Lease and Tenant shall repair any damage to the Premises or the Building
caused thereby.
20. LIENS AND INSOLVENCY: Tenant shall keep the premises and the Building free
from any liens arising out of any work performed, materials ordered, or
obligations incurred by Tenant. If Tenant becomes insolvent, voluntarily
or involuntarily bankrupt, or if a receiver or assignee or other
liquidating officer is appointed for the business of Tenant, then Landlord
may terminate Tenant's rights of possession under this Lease at Landlord's
option.
21. DEFAULTS: Time is of the essence hereof, and in the event Tenant shall
violate or breach or fail to keep or perform any covenant, agreement, term
or condition of this Lease, and if such default or violation shall continue
or shall not be remedied within three days (or, if no default in the
payment of rent or additional rent is involved, within 30 days, except
Tenant shall make immediate efforts to remedy such default) after notice in
writing thereof is given by Landlord to Tenant specifying the matter
claimed to be in default, Landlord at its option may immediately declare
Tenant's rights under this Lease terminated and reenter the Premises using
such force as may be necessary, and repossess itself thereof, as of its
former estate, and remove all persons and property from the Premises.
Notwithstanding any such reentry, the liability of Tenant for the full
rental provided for herein shall not be extinguished for the balance of
this Lease, and Tenant shall make good to Landlord any deficiency arising
from a reletting of the Premises at a lesser rental, plus the costs and
expenses of renovating or altering the Premises incurred by Landlord.
Tenant shall pay any such deficiency each month as the amount thereof is
ascertained by Landlord.
22. SUBORDINATION: This Lease is and shall be prior to any mortgage recorded
after the date of this Lease affecting the Building. If, however, a lender
requires that this Lease be subordinate to any mortgage, this Lease shall
be subordinate to that mortgage if Landlord first obtains from the lender a
written agreement that provides substantially the following:
*Notwithstanding the foregoing, Tenant and Landlord agree that
Tenant's name shall be painted on the front entrance glass similar to
the existing names. The cost and liability for said signage shall be
borne by Tenant.
*As long as Tenant performs its obligations under this Lease, no
foreclosure of, deed given in lieu of foreclosure of, or sale under
the mortgage, and no steps or procedures taken under the mortgage,
shall affect Tenant's rights under this Lease.
Tenant shall attorn to any purchaser at any foreclosure sale, or to any
grantee or transferee designated in any deed given in lieu of foreclosure.
Tenant shall execute the
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written agreement and any other documents required by the lender to
accomplish the purposes of this Section.
If requested by the holder of any mortgage or deed of trust, Tenant shall
enter into a new lease with the holder of such mortgage or deed of trust
for the balance of the term of this Lease upon the same terms and
conditions set forth herein, or shall attorn to such party provided such
party agrees to recognize this Lease as long as Tenant shall not be in
default hereunder beyond the period for curing the same.
23. REMOVAL OF PROPERTY: If Tenant shall fail to remove any of its property of
any nature whatsoever from the Premises or the Building at the termination
of this Lease, or when Landlord has the right of reentry, Landlord may, at
its option, remove and store said property without liability for loss
thereof or damage thereto, such storage to be for the account and at the
expense of Tenant. If Tenant shall not pay the cost of storing any such
property after it has been stored for a period of 30 days or more, Landlord
may, at its option, sell or permit to be sold, any or all of such property
at public or private sale, in such manner and at such times and places as
Landlord in its sole discretion may deem proper, without notice to Tenant,
and shall apply the proceeds of such sale: first, to the cost and expense
of such sale, including reasonable attorney's fees actually incurred;
second, to the payment of the costs or charges for storing any such
property; third, to the payment of any other sums of money which may then
be or thereafter become due Landlord from Tenant under any of the terms
hereof; and fourth, the balance, if any, to Tenant.
24. NONWAIVER: Waiver by either Landlord or Tenant of any breach of any term,
covenant, or condition herein contained 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 rental so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such Rent.
25. SURRENDER OF POSSESSION: Upon expiration of the term of this Lease,
whether by lapse of time or otherwise, Tenant shall promptly and peacefully
surrender the Premises to Landlord.
26. HOLDOVER: In the event Tenant shall holdover after the expiration of the
term of this Lease without the written consent of Landlord, such tenancy
shall be for a month-to-month tenancy, which tenancy may be terminated as
provided by the laws of the State of Washington. During such tenancy
Tenant agrees to pay to Landlord 200 percent (200%) of the rate of rental
payable by Tenant during the last month of the lease term as set forth
herein.
15
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27. CONDEMNATION: If all the Premises or such portions of the Building as may
be required for the reasonable use of the Premises are taken by eminent
domain, this Lease shall automatically terminate as of the date Tenant is
required to vacate the Premises and all rentals shall be paid to that date.
In the event of a taking of a part of the Premises, or a portion of the
Building not required for the reasonable use of the Premises, then this
Lease shall continue in full force and effect and the rental shall be
equitably reduced based on the proportion by which the floor area of the
Premises is reduced, such rent reduction to be effective as of the date
possession of such portion is delivered to the condemning authority.
Landlord reserves all rights to damages to the Premises for any taking by
eminent domain, and Tenant hereby assigns to Landlord any right Tenant may
have to such damages or award, and Tenant shall make no claim against
Landlord for damages for termination of the leasehold interest or
interference with Tenant's business. 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 and for the
interruption of or damage to Tenant's business; provided, however, that
such damages may be claimed only if they are award separately in the
eminent domain proceeding and not as part of the damages recoverable by
Landlord.
28. HAZARDOUS WASTE AND MATERIALS: Tenant shall not dispose of or otherwise
allow the release of any hazardous waste or materials in, on or under the
Leased Premises, or any adjacent property, or in any improvements placed on
the Leased Premises. Tenant represents and warrants to Landlord that
Tenant's intended use of the Premises does not involve the use, production,
disposal or bringing on to the Leased Premises of any hazardous waste or
materials. As used herein, the term "hazardous waste or materials"
includes any substance, waste or material defined or designated as
hazardous, toxic or dangerous (or any similar term) by any federal, state
or local statute, regulation, rule or ordinance now or hereafter in effect.
Tenant shall promptly comply with all statutes, regulations and ordinances,
and with all orders, decrees or judgments of governmental authorities or
courts having jurisdiction, relating to the use, collection, treatment,
disposal, storage, control, removal or cleanup of hazardous waste or
materials in, on or under the Leased Premises or any adjacent property, or
incorporated in any improvements, at Tenant's expense. Tenant shall notify
Landlord immediately of any release of any hazardous waste or materials on
the Leased Premises.
Tenant agrees to indemnify and hold Landlord harmless against any and all
losses, liabilities, suits, obligations, fines, damages, judgments,
penalties, claims, charges, cleanup costs, remedial actions, costs and
expenses (including, without limitations, attorneys' fees and
disbursements) which may be imposed on, incurred or paid by, or asserted
against Landlord or the Premises by reason of, or in connection with (i)
any misrepresentation, breach of warranty or other default by Tenant under
this Lease, or (ii) the acts or omissions of Tenant, or any subtenant or
other person or entity acting
16
<PAGE>
through or on account of Tenant, resulting in the release of any hazardous
waste or materials.
To the best of Landlord's knowledge the Premises do not contain any
hazardous waste. Tenant further acknowledges that Landlord has not made
any warranty or representation covering the presence or absence of any
hazardous waste or materials in, on, under, or about the Building or the
Leased Premises, any adjacent property, or in any improvements placed in
the Building or the Leased Premises. If Landlord is required by any
statute, regulation, order, decree, judgment, or other law to take any
action to remove or abate any hazardous waste or materials, or if Landlord
deems it necessary to conduct special maintenance or testing procedures
with regard to any hazardous waste or materials, or to remove or abate such
hazardous waste or materials, Landlord may take such action or conduct such
procedures at times and in a manner that Landlord deems appropriate under
the circumstances, and Tenant shall permit the same.
29. NOTICES: All notices under this Lease shall be in writing and delivered in
person or sent by registered or certified mail to Landlord and to Tenant at
the addresses provided in Subsection 1.i, and to the holder of any first
mortgage or deed of trust at such place as such holder shall specify to
Tenant in writing; or such other addresses as may from time to time be
designated by such party in writing. Notices mailed as aforesaid shall be
deemed given on the date of such mailing.
30. COSTS AND ATTORNEYS' FEES: If Tenant or Landlord shall bring any action
for any relief against the other, declaratory or otherwise, arising out of
this Lease, including any suit by Landlord for the recovery of rent or
possession of the Premises, the losing party shall pay the successful party
a reasonable sum for attorneys' fees in such suit, and such attorneys' fees
shall be deemed to have accrued on the commencement of such action.
31. LANDLORD'S LIABILITY: Anything in this Lease to the contrary
notwithstanding, covenants, undertakings and agreements herein made on the
part of Landlord are made and intended not as personal covenants,
undertakings and agreements or for the purpose of binding Landlord
personally or the assets of Landlord except Landlord's interest in the
Premises and the Building, but are made and intended for the purpose of
binding only Landlord's interest in the Premises and the Building. No
personal liability or personal responsibility is assumed by, nor shall at
any time be asserted or enforceable against Landlord or its partners and
their respective heirs, legal representatives, successors, and assigns on
account of the Lease or on account of any covenant, undertaking or
agreement of Landlord in this Lease contained.
32. LANDLORD'S CONSENT: Whenever Landlord's consent is required under the
terms hereof, such consent shall not be unreasonably withheld.
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<PAGE>
33. ESTOPPEL CERTIFICATES: Tenant shall, from time to time, upon written
request of Landlord, execute, acknowledge and deliver to Landlord a written
statement in a form approved by Landlord certifying that this Lease is
unmodified and in full force and effect (or that the same is in full force
and effect, as modified, listing the instruments of modification), that the
Rent and other charges have not been paid more than one month in advance
(or if so paid, the dates to which paid) and whether or not to the best of
Tenant's knowledge Landlord is in default hereunder (and if so, specifying
the nature of the default), it being intended that any such statement
delivered pursuant to this Section may be relied upon by a prospective
purchaser of Landlord's interest, or a mortgagee of Landlord's interest, or
assignee of any mortgage upon Landlord's interest in the Building. If
Tenant shall fail to respond within ten days of receipt by Tenant of a
written request by Landlord as herein provided, Tenant shall be deemed to
have given such certificates as above provided without modification.
34. TENANT IMPROVEMENTS: As further consideration for the execution of this
Lease, Landlord, at Landlord's sole cost and expense, shall provide the
following items of improvement, alteration, and repair to the Premises:
a. Remove all carpeting throughout the Premises and the wood flooring in
Suite 301.
b. Remove the existing walls located on the north and south sides of
Office #6 identified on the plans prepared by Tenant dated March 13,
1996 (the "Plan") and construct a new wall on the east side of Office
#6.
c. Remove all existing wood and glass partitions located in Area #9 on
the Plan.
d. Paint the walls throughout the Premises using Building-standard paint
in one light color to be selected by Tenant, subject to Landlord's
prior approval. The doors, relites and trim may be a separate color
at Tenant's option, also subject to Landlord's prior approval. Tenant
acknowledges that the interior window trim of the exterior windows in
the Premises will not be repainted and shall remain "AS IS."
e. Install new Building-standard carpet throughout the Premises in a
color to be selected by Tenant, subject to Landlord's prior approval.
f. Install Building-standard window blinds as necessary in the exterior
windows of the Premises.
All other improvements, alterations and repairs to the Premises shall be
made by Tenant at Tenant's sole cost and expense subject to the provisions
of this Lease.
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35. GENERAL:
a. The 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. This Lease shall be construed and governed by the laws
of the State of Washington.
b. All of the covenants, agreements, terms, and conditions contained in
this Lease shall apply to and be binding upon Landlord and Tenant and
their respective heirs, executors, administrators, successors and
assigns.
c. Tenant represents and warrants to Landlord that Tenant has not engaged
any broker (other than Leibsohn & Company), finder or other person who
would be entitled to any commission or fees from Landlord with respect
to the negotiation, execution or delivery of this Lease and shall
indemnify Landlord 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 on the basis of any arrangements or
agreements made or alleged to have been made by or on behalf of
Tenant.
d. This Lease contains all covenants and agreements between Landlord and
Tenant relating in any manner to the rental, use, and occupancy of the
Premises and Tenant's use of the Building and other matters set forth
in this Lease. No prior agreement or understanding 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. If any provision of
this Lease shall prove to be invalid, void or illegal, it 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.
e. Any Rent, Additional Rent, or other sums payable by Tenant to Landlord
shall not be paid upon the due date thereof shall bear interest at the
highest rate permitted by the laws of the State of Washington, but not
to exceed 18 percent per annum, calculated from the date of
delinquency to the date of payment.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Lease as of the date first
above written.
LANDLORD: TENANT:
COM REALTY, INC., a SEATTLE SOFTWARE LABS, INC.,
Delaware Corporation a Washington Corporation
/s/ Loren Klug By: Steven N. Moore
------------------------ -------------------------
/s/ Steven N. Moore
-------------------------
Title: President Title: Vice President & CFO
------------------ ----------------------
By:
------------------------
------------------------
Title:
------------------------
PLEASE TYPE OR PRINT NAME UNDER
EACH SIGNATURE LINE
20
<PAGE>
STATE OF ILLINOIS )
) ss. OWNER/CORPORATE
COUNTY OF COOK ) ---------------
On this 4th day of April, 1996, personally appeared before me, a Notary Public
in and for the State of Illinois, duly commissioned and sworn, Loren Klug, known
to me to be the President of COM Realty, Inc., a Delaware corporation, which
executed the within and foregoing instrument and acknowledged the said
instrument to be the free and voluntary act and deed of said corporation, for
the uses and purposes therein stated, and on oath stated that he is authorized
to execute said instrument.
Witness my hand and official seal hereto affixed the day and year first above
written.
/s/ Diana C. Moreno
----------------------------------------------
Notary Public in and for the State of Illinois
Residing at 105A S. Evergreen, IL
---------------------------------
My Commission Expires: 9/29/97
------------------------
----------------------------------------------
Print Notary Public Name
STATE OF WASHINGTON )
) ss. TENANT/CORPORATE
COUNTY OF KING ) ----------------
On this 2nd day of April, 1996, personally appeared before me, a Notary Public
in and for the State of Washington, duly commissioned and sworn, Steven N.
Moore, and known to me to be the Vice President and CFO of Seattle Software
Labs, a Washington corporation, which executed the within and foregoing
instrument and acknowledged the said instrument to be the free and voluntary act
and deed of said corporation, for the uses and purposes therein stated, and on
oath stated that they are authorized to execute said instrument.
Witness my hand and official seal hereto affixed the day and year first above
written.
/s/ Connie Hornbaker
------------------------------------------------
Notary Public in and for the State of Washington
Residing at Kirkland
------------------------------------
My Commission Expires: 3/19/97
-------------------------
------------------------------------------------
Print Notary Public Name
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EXHIBIT A
[Floor Plan: drawing of third floor layout,
showing original division of third floor into
four areas, and tenant's plan subdividing
the four areas into additional office areas.]
<PAGE>
EXHIBIT B
GUARANTY
THIS GUARANTY is made and given by the individuals set forth on the
signature page hereof ("Guarantor") to COM Realty, Inc., a Delaware corporation
("Landlord").
RECITALS: Seattle Software Labs, Inc., a Washington corporation
("Tenant"), has requested that Landlord enter into a lease with Tenant, and
Landlord is unwilling to enter into such a lease unless Guarantor gives Landlord
an unconditional guarantee of the full, prompt and complete payment by Tenant as
and when due of:
A. all installments of rent and other monetary obligations payable under
the Lease for all periods during which Tenant is in actual occupancy of the
Premises;
B. all installments of rent and other monetary obligations payable under
the Lease for the twelve (12) month period following any default by Tenant;
C. the unamortized balance as of the date Tenant relinquishes possession
of the Premises of (i) the total cost of improvements, alterations and repairs
("Tenant Improvements") provided by Landlord under the Lease, which is
$17,992.58, and (ii) the leasing fees due to Martin Smith Inc and Leibsohn &
Company, which are $15,866.76; such costs and fees shall be amortized, without
interest, over the Term; and
D. the unamortized balance as of the date Tenant relinquishes possession
of the Premises of the additional leasing fee due to Leibsohn & Company for
additional square footage leased under the Amendment to the Lease, which is
estimated to be $14,437.50; such fee shall be amortized without interest over
fifty-three (53) months of the Term (December 1, 1996 through April 30, 2001).
NOW, THEREFORE, in order to induce Landlord to enter into a lease with
Tenant, Guarantor agrees as follows:
1. Guaranty. Guarantor, as a material inducement to and in consideration
of Landlord entering into a written lease with Tenant, dated the same date as
this Lease Guaranty (the "Lease"), pursuant to which Landlord has leased or will
lease to Tenant, and Tenant has leased or will lease from Landlord, the premises
located in the City of Seattle, County of King, State of Washington, in the
building located at 316 Occidental Avenue South, Seattle, Washington,
unconditionally guarantees and promises to and for the benefit of Landlord the
full, prompt and complete payment by Tenant as and when due of (a) all
installments of rent and other monetary obligations payable under the Lease for
all periods during which Tenant is in actual occupancy of the Premises, (b) all
installments of rent and other monetary obligations payable under the Lease for
the twelve (12) month period following any default by Tenant, and (c) the
unamortized balance as of the date Tenant relinquishes possession of the
Premises of (i) the total cost of the Tenant Improvements provided by Landlord
under the Lease, which
<PAGE>
is $17,992.58, and (ii) the leasing fees paid to Martin Smith Inc and Leibsohn &
Company, which are $15,866.76; and (d) the unamortized balance as of the date
Tenant relinquishes possession of the Premises of the leasing fee due to
Leibsohn & Company for additional square footage leased under the Amendment to
the Lease, which is estimated to be $14,437.50. The cost and fees described
herein shall be amortized, without interest over the Term pursuant to paragraphs
C and D above. If, for example, Tenant defaults under the Lease at the end of
the thirtieth month of the Lease Term, Guarantor shall be obligated to pay (1)
the unamortized portion of the Tenant Improvements and leasing fees which equal
$16,929.74; (2) the unamortized portion of the leasing fee paid to Leibsohn &
Company, which equals $8,172.07 (calculated over twenty-three months; and (3)
all installments of rent and other monetary obligations payable under the Lease
for the twelve-month period following default by Tenant (months 31 through 42).
Guarantor acknowledges and agrees that this Guaranty is an absolute guarantee of
payment.
2. Attorneys' Fees. Guarantor agrees to pay all expenses, including,
without limitation, actual attorneys' fees and costs, paid or incurred by
Landlord in endeavoring to collect or secure performance of the Obligations, or
any part thereof, or in enforcing this Guaranty.
3. Joint and Several Liability. If Guarantor is more than one person,
Guarantor's Obligations are joint and several and are independent of Tenant's
Obligations. A separate action may be brought or prosecuted against any
Guarantor whether this action is brought or prosecuted against any other
Guarantor or Tenant, or all, or whether any other Guarantor or Tenant, or all,
are joined in the action.
4. Primary Liability. Guarantor's liability under this Guaranty is
primary, direct and immediate. Guarantor waives the right to require Landlord
to:
(a) Proceed against Tenant or any other person;
(b) Proceed against or exhaust any security or collateral that
Landlord holds from Tenant; or
(c) Pursue any other remedy in Landlord's power.
5. Waiver of Statute of Limitations. Guarantor waives the benefit of any
statute of limitations affecting Guarantor's liability under this Guaranty.
6. Bankruptcy or Reorganization of Tenant. In the event of any proceeding
by or against Tenant, a composition, extension or reorganization under any
provision of the Bankruptcy Code, or any other bankruptcy, insolvency,
receivership, reorganization or similar proceeding, Guarantor expressly waives
the extension of the Obligations of this Guaranty under any provision of the
Bankruptcy Code or any law or rule applicable to such proceedings and hereby
agrees that Landlord may proceed immediately to collect any amount due under the
terms of this Guaranty and to otherwise enforce this Guaranty.
2
<PAGE>
7. Rights and Remedies Cumulative. All of Landlord's rights and remedies
herein specified are intended to be cumulative and not in substitution for any
right or remedy otherwise available to Landlord.
8. Enforcement. If Tenant defaults under the Lease, Landlord can proceed
immediately against Guarantor or Tenant, or both, or Landlord can enforce
against Guarantor or Tenant, or both, any rights that it has under the Lease,
this Guaranty, or both, or pursuant to applicable laws. If the Lease terminates
and Landlord has any rights it can enforce against Tenant after termination,
Landlord may enforce these rights against Guarantor without giving previous
notice to Tenant or Guarantor and without making any demand on either of them.
9. Waiver of Defenses. Guarantor waives any defense arising by reason of
any disability of Tenant, or by reason of the cessation from any cause
whatsoever of the liability of Tenant. Guarantor shall be liable and remain
liable for the payment of the Obligations to the extent provided herein
notwithstanding.
(a) Any previous discharge (partial or total) of Tenant from any
further liability;
(b) Any bar (temporary, partial or total) to the pursuit by Guarantor
of any right or claim for indemnification from Tenant;
(c) Any right or claim by Guarantor to be subrogated to the rights or
claims of Landlord against Tenant or in and to the Premises;
(d) Any action or inaction or delay in acting by Landlord; or
(e) Landlord's failure to enforce, or delay in enforcing, any of its
rights under the Lease, or otherwise.
10. Amendments to Lease; Assignment of Lease. Guarantor authorizes
Landlord, without notice or demand and without affecting Guarantor's liability
hereunder, from time to time to:
(a) Amend or change the provisions of the Lease by agreement between
Landlord and Tenant at any time, or by course of conduct, or by operation of
law, or otherwise, without the consent of, and without notice to, Guarantor;
(b) Permit or suffer an assignment of the Lease or any subletting
under the Lease, whether or not consented to by Landlord; or
(c) Take and hold security for the performance and payment of the
Obligations and apply, enforce, exchange, waive and release any such security.
3
<PAGE>
11. Waiver of Subrogation. Until all of the Obligations have been
performed or paid in full, Guarantor shall have no right of subrogation against
Tenant. Guarantor waives its right to enforce any remedies that Landlord now
has, or may later have, against Tenant. Guarantor waives any right to
participate in any security now or hereafter held by Landlord.
12. Waiver of Acceptance, Presentments and Notices. Guarantor waives
notice of acceptance of this Guaranty and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor and notices of acceptance of this Guaranty, and waives all notices of
the creation, existence, or incurring of new or additional Obligations.
13. Miscellaneous Provisions.
(a) This Guaranty sets forth the entire agreement of the parties as
to the subject matter hereof and supersedes all prior discussions and
understandings between them. This Guaranty may not be amended or rescinded in
any manner except by an instrument in writing signed by a duly authorized
officer or representative of each party hereto.
(b) This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of Washington.
(c) Should any of the provisions of this Guaranty be found to be
invalid, illegal or unenforceable by any court of competent jurisdiction, such
provision shall be stricken and the remainder of this Guaranty shall nonetheless
remain in full force and effect unless striking such provision shall materially
alter the intention of the parties.
(d) In the event any action is brought to enforce this Guaranty, the
parties agree to be subject to exclusive in personam jurisdiction in the
Superior Court for the State of Washington or in the United States District
Court for the Western District of Washington and agree that in any such action
venue shall lie exclusively at Seattle, Washington.
(e) No waiver of any right under this Guaranty shall be effective
unless contained in a writing signed by a duly authorized officer or
representative of the party sought to be charged with the waiver and no waiver
of any right arising from any breach or failure to perform shall be deemed to be
a waiver of any future right or of any other right arising under this Guaranty.
(f) Paragraph headings contained in this Guaranty are included for
convenience only and form no part of the agreement between the parties.
(g) All notices or requests required or permitted under this Guaranty
shall be in writing; shall be personally delivered or sent by certified mail,
return receipt requested, postage prepaid; shall be deemed given when so
delivered or mailed, irrespective of whether such notice or request is actually
received by the addressee; and shall be sent to the parties at the following
addresses:
4
<PAGE>
If to Landlord: Occidental Mall
c/o Martin Smith Inc
615 Second Avenue, Suite 400
Seattle, WA 98104
If to Guarantor: Steven N. Moore
Christopher Slatt
Seattle Software Labs, Inc.
316 Occidental Avenue South, Suite 301
Seattle, WA 98104
Either party may change the address to which notices shall be sent by notice to
the other party.
(h) This Guaranty shall be binding upon, and inure to the benefit of,
the parties hereto and their respective heirs, devisees, legatees, executors,
administrators, personal representatives, successors and assigns. If Landlord
disposes of its interest in the Lease, the term "Landlord" as used in this
Guaranty shall mean Landlord's successors.
(i) As used in this Guaranty, the masculine shall include the
feminine and neuter, the feminine shall include the masculine and neuter, the
neuter shall include the masculine and feminine, the singular shall include the
plural and plural shall include the singular, as the context may require.
Dated this 17 day of December 1996.
GUARANTOR:
/s/ Steven N. Moore /s/ Christopher Slatt
------------------------------------- -----------------------------------
Steven N. Moore and Christopher Slatt and
/s/ Sheila E. Moore /s/ Jeanine K. Slatt
------------------------------------- -----------------------------------
Sheila E. Moore, husband and wife Jeanine K. Slatt, husband and wife
5
<PAGE>
STATE OF WASHINGTON )
) ss. INDIVIDUAL
COUNTY OF KING ) ----------
On this _______ day of __________, 19___, before me, a Notary Public, personally
appeared _____________________________________________________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged the said instrument to be his/hers (their) free and voluntary act
and deed for the uses and purposes therein mentioned.
Witness my hand and official seal.
------------------------------------------------
Notary Public in and for the State of Washington
Residing at
------------------------------------
My Commission Expires:
--------------------------
------------------------------------------------
Print Notary Public Name
STATE OF WASHINGTON )
) ss. INDIVIDUAL
COUNTY OF KING ) ----------
On this _______ day of __________, 19___, before me, a Notary Public, personally
appeared ____________________________________________________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged the said instrument to be his/hers (their) free and voluntary act
and deed for the uses and purposes therein mentioned.
Witness my hand and official seal.
------------------------------------------------
Notary Public in and for the State of Washington
Residing at
-------------------------------------
My Commission Expires:
--------------------------
------------------------------------------------
Print Notary Public Name
6
<PAGE>
EXHIBIT C
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the exterior or in any area visible from the
exterior of the Building without the prior written consent of the Landlord,
which consent shall not be unreasonably withheld or delayed. Landlord
shall have the right to remove, at Tenant's expense and without notice, any
sign installed or displayed in violation of this rule. All signs or
lettering on doors and walls shall be printed, painted, affixed or
inscribed at the expense of Tenant. At the expiration or termination of
Tenant's Lease, Tenant, at Tenant's sole cost and expense, shall remove all
tenant-installed signage and repair and paint any and all damage resulting
from installation and/or removal of said signage.
2. Tenant shall not install any curtains, blinds, shades, screens or hanging
plants or other similar objects attached to or used in connection with any
window or door of the Premises except building-standard drapes approved by
Landlord. No awning shall be permitted on any part of the Premises.
Tenant shall not place anything against or near glass partitions or doors
or windows which may appear unsightly from outside the Premises.
3. Tenant shall not obstruct any sidewalks, lobbies, halls, passages, exits,
entrances, elevators, or stairways of the Building. The halls, passages,
exits, entrances, lobbies, elevators, and stairways are not open to the
general public. Landlord shall in all cases retain the right to control and
prevent access thereto of all persons whose presence in the judgment of
Landlord would be prejudicial to the safety, character, reputation and
interest of the Building and its Tenants; provided that nothing herein
contained shall be construed to prevent such access to persons with whom
any Tenant normally deals in the ordinary course of its business, unless
such persons are engaged in illegal activities. No Tenant and no employee
or invitee of any tenant shall go upon the roof of the Building without
Landlord's prior written consent.
4. The directory of the Building will be provided exclusively for the display
of the name and location of tenants' business only, and Landlord reserves
the right to exclude any other names therefrom.
5. All cleaning and janitorial services for the Building and the Premises,
unless otherwise in the Lease, shall be provided exclusively through
Landlord, and
<PAGE>
except with the written consent of Landlord, no person or persons other
than those approved by Landlord shall be employed by Tenant or permitted to
enter the Building for the purpose of cleaning the same. Tenant shall not
cause any unnecessary labor by carelessness or indifference to the good
order and cleanliness of the Premises. Landlord shall not in any way be
responsible to any tenant for any loss of property on the Premises, however
occurring, or for any damage to any tenant's property by the janitor or any
other employee or any other person.
6. Landlord shall furnish Tenant with appropriate number of keys to each door
lock in the Premises and to the main entrance door of the Building.
Landlord may make a reasonable charge for any additional keys. Tenant
shall not make or have made additional keys, and Tenant shall not alter any
lock or install a new additional lock or bolt on any door of its Premises.
Tenant, upon termination of its tenancy, shall deliver to Landlord all keys
to all doors which have been furnished to Tenant and in the event of loss
of any keys so furnished, shall reimburse Landlord for the cost of any new
lock(s) required due to such loss.
7. Tenant shall not install computer cabling, telephone, burglar alarm or
similar services without Landlord's approval for installation of same.
Upon termination of Tenant's tenancy, at Landlord's option, Tenant shall
remove any equipment and/or services from the Premises and shall restore
the Premises to its condition prior to such installation.
8. Freight elevator(s), if any, shall be available for use by all tenants in
the Building, subject to such reasonable scheduling as Landlord in its
discretion shall deem appropriate. No equipment, materials, furniture,
packages, supplies, merchandise or other property will be received in the
Building or carried in the passenger elevators except between such hours
and in such elevators as may be designated by Landlord.
9. Tenant shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which
is allowed by law. Landlord shall have the right to prescribe the weight,
size and position of all equipment, materials, furniture or other property
brought into the Building. Heavy objects shall, if considered necessary by
Landlord, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight of such objects. Business machines and
mechanical equipment belonging to Tenant which cause noise or vibration
that may be transmitted to the structure of the Building or to any space
therein or to any tenants in the Building shall be placed and maintained by
Tenant, at Tenant's
-2-
<PAGE>
sole cost and expense, on vibration eliminators or other devices sufficient
to eliminate noise or vibration. Landlord will not be responsible for loss
of, or damage to, any such equipment or other property from any cause, and
all damage done to the Building by maintaining or moving such equipment or
other property shall be repaired at the expense of Tenant.
10. Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited
quantities necessary for the operation or maintenance of office equipment.
Tenant shall not use or permit to be used in the Premises any foul or
noxious gas or substance, or permit or allow the Premises to be occupied or
used in a manner offensive or objectionable to Landlord or other occupants
of the Building by reason of noise, odors, or vibrations, nor shall Tenant
bring into or keep in or about the Premises any animals, including dogs
(except seeing-eye dogs).
11. Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord.
12. Tenant shall not waste electricity, water or air conditioning, and Tenant
agrees to cooperate fully with Landlord to assure the most effective
operation of the Building's heating and air-conditioning system and to
comply with any governmental energy-saving rules, laws or regulations, of
which Tenant has actual notice, and shall refrain from attempting to adjust
controls. Tenant shall keep corridor and exterior doors closed and shall
close window coverings at the end of each business day.
13. The name of the Building is the Occidental Mall. Landlord reserves the
right, exercisable without notice and without liability to Tenant, to
change the name of the Building.
14. Landlord reserves the right to exclude from the Building between the hours
of 6:00 p.m. and 7:00 a.m. the following day, or such other hours as may be
established from time to time by Landlord, and on Sundays and legal
holidays any person, unless that person is known to the person or employee
in charge of the Building and has a pass or is properly identified. Tenant
shall be responsible for all persons for whom it requests passes and shall
be liable to Landlord for all acts of such persons. Landlord shall not be
liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. Landlord reserves the right to
prevent access to the Building in case of invasion, mob, riot, public
excitement or other commotion by closing the doors or by other appropriate
action.
-3-
<PAGE>
15. Tenant shall close and lock the doors of its Premises and entirely shut off
all water faucets or other water apparatus, electricity, copiers and other
office equipment, including coffee pots, etc., before Tenant and its
employees leave the Premises. Tenant shall be responsible for any damage
or injuries sustained by other tenants or occupants of the Building or by
Landlord for noncompliance with this rule.
16. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were
constructed, and no foreign substance of any kind whatsoever shall be
thrown therein. The expense of any breakage, stoppage or damage resulting
from the violation of this rule shall be borne by the tenant, or employees
or invitees of the tenant, who shall have caused it.
17. Tenant shall not make any room-to-room solicitation of business from other
tenants in the Building. Tenant shall not use the Premises for any
business or activity other than that specifically provided for in Tenant's
Lease.
18. Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in the Building are prohibited, and each tenant
shall cooperate to prevent same.
19. Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building except as
permitted in the Lease. Tenant shall not interfere with radio or
television broadcasting or reception from or in the Building or elsewhere.
20. Landlord reserves the right to direct electricians as to where and how
telephone, computer or other wiring or cabling are to be introduced to the
Premises. Tenant shall not cut nor bore holes for wiring or cabling
without Landlord's prior written consent, said consent shall not be
unreasonably withheld. Tenant shall not affix any floor covering to the
floor of the Premises in any manner except as approved by Landlord. Tenant
shall repair any damage resulting from noncompliance with this rule.
21. Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's judgment, is intoxicated or under the influence
of alcohol or drugs or who is in violation of any of the Rules and
Regulations of the Building.
22. Tenant shall store all its trash and garbage within its Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed
-4-
<PAGE>
of in the ordinary and customary manner of trash and garbage disposal. All
garbage and refuse disposal shall be made in accordance with directions
issued from time to time by Landlord. All garbage over and above normal
(i.e., major-delivery wrappings, etc.) shall be at Tenant's sole cost and
expense. Tenant agrees to cooperate with Landlord in recycling programs as
may be established from time to time by Landlord.
23. The Premises shall not be used for lodging nor for manufacturing of any
kind, nor shall the Premises be used for any improper, immoral or
objectionable purpose. No cooking shall be done or permitted by Tenant on
the Premises, except that use by Tenant of Underwriters Laboratory approved
equipment for brewing coffee, tea, hot chocolate and similar beverages, and
microwave ovens shall be permitted; provided that such equipment and use is
in accordance with all applicable federal, state, county and city laws,
codes, ordinances, rules and regulations and does not cause objectionable
odor.
24. Without the written consent of Landlord, Tenant shall not use the name of
the Building in connection with or in promoting or advertising the business
of Tenant except as Tenant's address.
25. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
26. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.
27. The requirements of Tenant will be attended to only upon appropriate
application to the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside
their regular duties unless under special instructions from Landlord, and
no employee of Landlord will admit any person (Tenant or otherwise) to any
office of the Building without specific instructions from Landlord.
28. Tenant and Tenant's employees shall not park vehicles in any parking areas
designated by Landlord as reserved parking areas or as visitor parking
areas. Tenant shall not park any vehicles in the Building parking areas
other than automobiles, motorcycles, motor-driven or nonmotor-driven
bicycles or four-wheeled trucks.
29. Tenant and Tenant's delivery personnel shall utilize loading zones and
delivery entrances for all deliveries. Any damage to the Building or
Premises resulting
-5-
<PAGE>
from Tenant's deliveries shall be repaired at the sole cost and expense of
the Tenant.
30. Tenant and Tenant's delivery personnel shall not use in any space or in the
common areas of the Building any hand truck except those equipped with
rubber tire and side guards or such other material-handling equipment as
Landlord may approve. Tenant shall not bring vehicles of any other kind
into the Building.
31. All moving of furniture or other equipment shall be done so as to have
minimal impact on other tenants' and visitors' use of elevators, common
areas, and parking facilities.
32. The Building is a nonsmoking building.
33. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall
be construed as a waiver of such Rules and Regulations in favor of Tenant
or any other tenant, nor prevent Landlord from thereafter enforcing any
such Rules and Regulations against any or all of the tenants of the
Building.
34. These Rules and Regulations are in addition to and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of any premises in the Building.
35. Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety
and security, for care and cleanliness of the Building and for the
preservation of good order therein. Tenant agrees to abide by all such
Rules and Regulations hereinabove stated and any additional reasonable
Rules and Regulations which are adopted.
36. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients, customers,
invitees and guests.
Initials [initials]
________
[initials]
________
-6-
<PAGE>
LEASE AMENDMENT NO. 1
THIS LEASE AMENDMENT NO. 1 dated this 10th day of June 1996 amends that certain
Lease dated the 15th day of March 1996 by and between COM REALTY, INC., a
Delaware corporation, as Landlord, and SEATTLE SOFTWARE LABS, INC., a Washington
corporation, as Tenant ("the Lease"), covering approximately 3,392 rentable
square feet on the third floor of the Burke Building in the Occidental Mall.
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Landlord and Tenant agree to amend the Lease in order to
revise the term of the Lease and to revise the schedule for the payment of rent
during the Lease term.
Effective May 1, 1996, the Lease is hereby amended as follows:
1. Section 1(e) "Lease Commencement Date" is amended to read:
May 1, 1996 ("Commencement Date").
2. Section 1(f) "Lease Expiration Date" is amended to read:
April 30, 2001 ("Expiration Date").
3. Section 1(g) "Rent" to read:
Rent shall be as set forth above, payable on or before the first day of
each month. Rent shall be adjusted from time to time as provided in Sections 7,
8, and 9 hereof.
May 1, 1996 to June 30, 1996 $0.00 per month
July 1, 1996 to April 30, 1997 $4,276.76 per month
May 1, 1997 to April 30, 1998 $4,418.08 per month
May 1, 1998 to April 30, 1999 $4,559.41 per month
May 1, 1999 to April 30, 2000 $4,700.75 per month
May 1, 2000 to April 30, 2001 $4,842.08 per month
4. Section 3 "COMMENCEMENT AND EXPIRATION DATES" is amended to read:
a. Lease Commencement Date: The Lease Commencement Date shall be May 1,
1996.
b. Lease Expiration date: This Lease shall expire on April 30, 2001.
Except as set forth in this Lease Amendment No. 1, all the provisions of the
Lease shall remain unchanged and in full force and effect.
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease Amendment No. 1
on the dates set forth below.
Landlord: Tenant:
COM Realty, Inc., a Delaware Seattle Software Labs, Inc., a Washington
corporation corporation
By: [signature illegible] By: /s/ Steve N. Moore
------------------------- -------------------------------
Date: 7/15/96 Its: Chief Financial Officer
---------------------- -------------------------------
Date: 7/10/96
------------------------------
By: Christopher G. Slatt
-------------------------------
Its: President
------------------------------
Date: 7/10/96
-----------------------------
<PAGE>
LEASE AMENDMENT NO. 2
THIS LEASE AMENDMENT NO. 2, dated this 6th day of November 1996, amends that
certain Lease dated the 15th day of March 1996 and Lease Amendment No. 1 dated
June 10, 1996 (the "Lease") by and between COM REALTY, INC., a Delaware
corporation, predecessor in interest to BURKE-STATE BLDG., L.L.C., a Washington
limited liability company ("Landlord"), and SEATTLE SOFTWARE LABS, INC., a
Washington corporation ("Tenant"), covering approximately 3,392 rentable square
feet on the third floor of the Burke Building in the Occidental Mall designated
Suite 301. For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Landlord and Tenant agree to further amend the
Lease in order to increase the square footage of the Premises, to adjust
Tenant's Percentage of the Building, to adjust the Rent, to revise the provision
pertaining to assignment and subletting, to add the Building Rules and
Regulations, and to specify the improvements to be made to the Premises by
Landlord.
Effective November 15, 1996, the Lease shall be amended as follows:
1. Section 1.c "Agreed Areas" shall be amended to read:
c. Agreed Areas: As used in this Lease, Landlord and Tenant agree to the
following areas and percentage of the Premises and the Building: Area of the
Building is the total square feet calculated on a full-floor basis or 111,308
square feet; area of Tenant's Premises is approximately 7,517 rentable square
feet; Tenant's Percentage of the Building is 6.75%. Notwithstanding the
foregoing, if one or more of the facilities, services and utilities the costs of
which is included within the definition of Operating Costs is not furnished to
one or more tenants or to particular types of tenants, then in connection with
the calculation of Tenant's Share of each of such costs the Building Area shall
be reduced by the number of rentable square feet of space occupied by such
tenants and Tenant's Share shall be separately computed as to each of such
costs.
2. Section 1.g "Rent" of the Lease shall be amended to read:
g. Rent: The rent shall be as set forth below, payable on or before the
first day of each month. Rent shall be adjusted from time to time as provided in
Sections 7, 8, and 9 hereof.
<PAGE>
May 1, 1996 to June 30, 1996 $0.00
July 1, 1996 to December 14, 1996 $4,276.75 per month
December 15, 1996 to April 30, 1997 $9,298.94 per month
May 1, 1997 to April 30, 1998 $9,612.14 per month
May 1, 1998 to April 30, 1999 $9,925.35 per month
May 1, 1999 to April 30, 2000 $10,238.56 per month
May 1, 2000 to April 30, 2001 $10,551.77 per month
3. The last sentence of Section 6 "Uses" shall be deleted in its entirety and
replaced with the following:
Tenant and its authorized representatives shall comply with the Rules and
Regulations set forth on Exhibit C attached hereto. Landlord shall have the
right to amend the Rules and Regulations from time to time. In the event of a
conflict between this Lease and the Rules and Regulations, as amended, this
Lease shall control. Landlord shall have the right to enforce the Rules and
Regulations and shall make commercially reasonable efforts to enforce the same
in a nondiscriminatory manner. Landlord shall have no liability or
responsibility whatsoever with respect to the noncompliance by other tenants or
their authorized representatives with any of such Rules and Regulations.
4. Section 18 "ASSIGNMENT AND SUBLETTING" shall be deleted in its entirety and
replaced with the following:
18. ASSIGNMENT AND SUBLETTING:
a) Landlord's Consent; Definitions. Tenant acknowledges that the
Building is a multi-tenant office building, occupied by tenants specifically
selected by Landlord, and that Landlord has a legitimate interest in the type
and quality of such tenants, the location of tenants in the Building and in
controlling the leasing of space in the Building so that Landlord can better
meet the particular needs of its tenants and protect and enhance the relative
image, position and value of the Building in the office building market. Tenant
further acknowledges that the rental value of the Premises may fluctuate during
the term in accordance with market conditions, and, as a result, the Rent paid
by Tenant under the Lease at any particular time may be higher or lower than the
then market rental value of the Premises. Landlord and Tenant agree, and the
provisions of this Section are intended to so provide, that, if Tenant
voluntarily assigns its interest in this Lease or in the Premises or subleases
any part or all of the Premises, a portion of the profits from any increase in
the market rental value of the Premises shall belong solely to Landlord. Tenant
acknowledges that, if Tenant voluntarily assigns this Lease or subleases any
part or all of the Premises, Tenant's investment in the subject portion of the
Premises (specifically including, but not
2
<PAGE>
limited to, tenant improvements, good will or other assets) may be lost or
reduced as a result of such action.
b) Consent Required. Tenant shall not voluntarily assign or encumber
its interest in this Lease or in the Premises, or sublease any part or all of
the Premises, without Landlord's prior consent, which consent shall not be
unreasonably withheld. Any assignment, encumbrance or sublease without
Landlord's consent shall be voidable and, at Landlord's election, shall
constitute a default by Tenant under this Lease. In determining whether to
approve a proposed assignment or sublease, Landlord shall place primary emphasis
on the proposed transferee's reputation and creditworthiness, the character of
the business to be conducted by the proposed transferee at the Premises and the
affect of such assignment or subletting on the tenant mix in the Building. In
addition, Landlord shall have the right to approve the specific form of any
assignment or sublease agreement. In no event shall Landlord be obligated to
consent to any assignment or subletting which increases (i) the Operating Costs,
(ii) the burden on the Building services, or (iii) the foot traffic, elevator
usage or security concerns in the Building, or creates an increased probability
of the comfort and/or safety of the Landlord and other tenants in the Building
being unreasonably compromised or reduced (for example, but not exclusively,
Landlord may deny consent to an assignment or subletting where the space will be
used for a school or training facility, an entertainment, sports or recreation
facility, retail sales to the public (unless Tenant's permitted use is retail
sales), a personnel or employment agency, a medical office, or an embassy or
consulate or similar ounce. Landlord shall not be obligated to approve an
assignment or subletting to (x) a current tenant of the Building unless no
comparable space is available in the Building or (y) a prospective tenant of the
Building with whom Landlord is then negotiating. Landlord's foregoing rights
and options shall continue throughout the entire term of this Lease. No consent
to any assignment, encumbrance or sublease shall constitute a waiver of the
provisions of this Section and no other or subsequent assignment, encumbrance or
sublease shall be made without Landlord's prior consent. Neither an assignment
or subletting nor the collection of Rent by Landlord from any person other than
Tenant, nor the application of any such Rent as provided in this Section shall
be deemed a waiver of any of the provisions of this Section or release Tenant
from its obligation to comply with the terms and provisions of this Lease and
Tenant shall remain fully and primarily liable for all of Tenant's obligations
under this Lease, including the obligation to pay Rent under this Lease. Any
personal guarantee(s) of Tenant's obligations under this Lease shall remain in
full force and effect following any such assignment or subletting. Landlord may
condition approval of an assignment or subletting hereunder on an increase in
the amount of the Security Deposit or on receipt of personal guarantees of the
assignee's or sublessee's obligations under this Lease. If Landlord approves of
an assignment or subletting hereunder and this Lease contains any renewal
options,
3
<PAGE>
expansion options, rights of first refusal, rights of first negotiation or any
other rights or options pertaining to additional space in the Building, such
rights and/or options shall not run to the assignee or subtenant, it being
agreed by the parties hereto that any such rights and options are personal to
Tenant named herein and may not be transferred.
c) Conditions to Assignment or Sublease. Tenant agrees that any
instrument by which Tenant assigns or sublets all or any portion of the Premises
shall expressly provide that the assignee or subtenant may not further assign or
sublet the assigned or sublet space without Landlords prior consent (which
consent shall not, subject to Landlord's rights under Section 25(b), be
unreasonably withheld or delayed), and that the assignee or subtenant will
comply with all of the provisions of this Lease and that Landlord may enforce
the Lease provisions directly against such assignee or subtenant. If this Lease
is assigned, whether or not in violation of the terms and provisions of this
Lease, Landlord may collect Rent from the assignee. If the Premises, or any
part thereof, is sublet, Landlord may, upon a default under this Lease, collect
rent from the subtenant. In either event, Landlord may apply the amount
collected from the assignee or subtenant to Tenant's obligation to pay Rent
under this Lease.
d) Events Constituting an Assignment or Sublease. For purposes of this
Section, the following events shall be deemed an assignment or sublease, as
appropriate: (i) the issuance of equity interests (whether stock, partnership
interests or otherwise) in Tenant, or any assignee or subtenant, if applicable,
or any entity controlling any of them, to any person or group of related
persons, in a single transaction or a series of related or unrelated
transactions, such that, following such issuance, such person or group shall
have Control (as defined below) of Tenant, or any assignee or subtenant, if
applicable; or (ii) a transfer of Control of Tenant, or any assignee or
subtenant, if applicable, or any entity controlling any of them, in a single
transaction or a series of related or unrelated transactions (including, without
limitation, by consolidation, merger, acquisition or reorganization), except
that the transfer of outstanding capital stock or other listed equity interests
by persons or parties other than "insiders" within the meaning of the Securities
Exchange Act of 1934, as amended, through the "over-the-counter" market or any
recognized national or international securities exchange, shall not be included
in determining whether Control has been transferred. "Control" shall mean
direct or indirect ownership of fifty percent (50%) or more of all the legal and
equitable interest in any business entity. The restrictions set forth in this
subsection shall not apply to an initial public offering of equity interests in
Tenant or when Tenant is raising Equity Capital and the Guarantors listed in
Exhibit B are actively managing Tenant's business.
4
<PAGE>
e) Processing Expenses. Tenant shall pay to Landlord the amount of
Landlord's cost of processing each proposed assignment or subletting, including,
without limitation, attorneys' and other professional fees, and the cost of
Landlord's administrative, accounting and clerical time (collectively,
"Processing Costs"), and the amount of all direct and indirect expense incurred
by Landlord arising from the assignee or sublessee taking occupancy of the
subject space, including, without limitation, costs of freight elevator
operation for moving of furnishings and trade fixtures, security service,
janitorial and cleaning service, rubbish removal service, costs of changing
signage, and costs of changing locks and making new keys (collectively,
"Occupancy Costs"). Notwithstanding anything to the contrary herein, Landlord
shall not be required to process any request for Landlords consent to an
assignment or subletting until Tenant has paid to Landlord the amount of
Landlord's estimate of the Processing Costs and the Occupancy Costs; provided,
however, such costs shall reflect the actual expenses incurred ant shall not
exceed $2,000.00 per assignment or subletting.
f) Consideration to Landlord. In the event of any assignment or
sublease, whether or not requiring Landlord's consent, Landlord shall be
entitled to receive, as Additional Rent, one-half (1/2) of any consideration,
including, without limitation, payment for leasehold improvements owned by
Landlord, paid by the assignee or subtenant for the assignment or sublease and,
in the case of sublease, the excess of the amount of rent paid for the sublet
space by the subtenant over the total amount of Minimum Monthly Rent under
Section 5 and Additional Rent under Sections 7 and 9. Upon Landlord's request,
Tenant shall assign to Landlord all amounts to be paid to Tenant by the assignee
or subtenant and shall direct such assignee or subtenant to pay the same
directly to Landlord. If there is more than one sublease under this Lease, the
amounts (if any) to be paid by Tenant to Landlord pursuant to the preceding
sentence shall be separately calculated for each sublease and amounts due
Landlord with regard to any one sublease may not be offset against rental and
other consideration pertaining due under any other sublease.
With regard to an approved assignment or subletting, Tenant acknowledges
that Landlord's agreement to deal directly with the assignee or subtenant with
regard to such party's occupancy of the Premises and the administration of the
Lease, without requiring Tenant to monitor or become directly involved in such
matters, constitutes appropriate and acceptable consideration for the capture by
Landlord of any rent or consideration paid by the assignee or subtenant in
excess of that required to be paid by Tenant under the Lease.
g) Procedures. If Tenant desires to assign this Lease or any interest
therein or sublet all or part of the Premises, Tenant shall give Landlord
written notice
5
<PAGE>
thereof designating the space proposed to be sublet and the terms proposed.
Landlord shall have the prior right and option (to be exercised by written
notice to Tenant given within fifteen (15) days after receipt of Tenant's
notice) (i) to sublet from Tenant any portion of the Premises proposed by Tenant
to be sublet, for the term for which such portion is proposed to be sublet, but
at the same Rent (including Additional Rent as provided for in Sections 7 and 9)
as Tenant is required to pay to Landlord under this Lease for the same space,
computed on a pro rata square footage basis, and during the term of such
sublease Tenant shall be released of its obligations under the Lease with regard
to the subject space, (ii) if the term of the sublease (including any renewal
terms) will expire during the final eighteen (18) months of the term (or if
Tenant has exercised a renewal option, if any, then during the final eighteen
(18) months of the subject renewal period), to terminate this Lease as it
pertains to the portion of the Premises so proposed by Tenant to be sublet, or
(iii) to approve Tenant's proposal to sublet conditional upon Landlord's
subsequent written approval of the specific sublease obtained by Tenant and the
specific subtenant named therein. If Landlord exercises its option in (i) above,
then Landlord may, at Landlord's sole cost, construct improvements in the
subject space and, so long as the improvements are suitable for general office
purposes, Landlord shall have no obligation to restore the subject space to its
original condition following the termination of the sublease. If Landlord
exercises its option described in (iii) above, Tenant shall submit to Landlord
for Landlord's written approval Tenant's proposed sublease agreement (in which
the proposed subtenant shall be named) together with a current reviewed or
audited financial statement prepared by a certified public accountant for such
proposed subtenant and a credit report on such proposed subtenant prepared by a
recognized credit reporting agency. If Landlord fails to exercise any aforesaid
option to sublet or to terminate, this shall not be construed as or constitute a
waiver of any of the provisions of this Section. If Landlord exercises any such
option to sublet or to terminate, Landlord shall not have any liability for any
real estate brokerage commission(s) or with respect to any of the costs and
expenses that Tenant may have incurred in connection with its proposed
subletting, and Tenant agrees to hold Landlord harmless from and against any and
all claims (including, without limitation, claims for commissions) arising from
such proposed subletting. Landlord's foregoing rights and options shall continue
throughout the term. For purposes of this Section, a proposed assignment of this
Lease in whole or in part shall be deemed a proposed subletting of such space.
h) Documentation. No permitted subletting by Tenant shall be effective
until there has been delivered to Landlord a counterpart of the sublease in
which the subtenant agrees to be and remain jointly and severally liable with
Tenant for the payment of Rent pertaining to the sublet space and for the
performance of all of the terms and provisions of this Lease; provided, however,
that the subtenant shall be
6
<PAGE>
liable to Landlord for rent only in the amount set forth in the sublease. No
permitted assignment shall be effective unless and until there has been
delivered to Landlord a counterpart of the assignment in which the assignee
assumes all of Tenant's obligations under this Lease arising on or after the
date of the assignment. The failure or refusal of a subtenant or assignee to
execute any such instrument shall not release or discharge the subtenant or
assignee from its liability as set forth above.
i) No Merger. Without limiting any of the provisions of this Section, if
Tenant has entered into any subleases of any portion of the Premises, the
voluntary or other surrender of this Lease by Tenant, or a mutual cancellation
by Landlord and Tenant, shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or, at the
option of Landlord, operate as an assignment to Landlord of any or all such
subleases or subtenancies.
5. Improvements. Tenant accepts the Premises in "AS IS" condition, subject to
the following items of improvement, alterations, and repair to be made to the
Premises by Landlord at Landlord's sole cost and expense:
a) Demolish the wall highlighted in yellow on the attached Exhibit A:
b) Construct two walls in the areas highlighted in blue on the attached
Exhibit A;
c) Install two (2) three-inch pipe-lined openings above the brick
passageway between the existing Premises and the expansion space at a location
mutually agreeable to both parties;
d) In the area marked "LAN Room" on the attached Exhibit A, Landlord shall
disconnect the water line, remove the stub wall, remove cabinets;
e) Install approximately 14 feet of Building-standard GWB wall with
Building-standard base to include one Building-standard electrical duplex outlet
on each side of the wall highlighted in green on the attached Exhibit A;
f) Patch and paint the newly constructed walls and areas affected by
construction;
g) Patch in carpeting in the areas affected by construction to match the
existing as closely as reasonably possible; and
h) Tenant shall install signage on the wall opposite elevator entrance on
the third floor similar to that of other tenant's in the Building, at Tenant's
sole cost and upon review and approval by Landlord.
7
<PAGE>
6. Exhibit A "Floor Plan" is hereby deleted in its entirety and replaced with
the amended Exhibit A attached hereto and by this reference made a part of the
Lease.
7. Exhibit B "Guaranty" shall be cancelled in its entirety and superseded by
the amended Guaranty attached hereto as Exhibit B on the following condition:
The amended Guaranty attached hereto will cancel and supersede that certain
Guaranty dated April 2, 1996 executed by the Guarantors named therein,
Christopher Slatt and Jeannine K. Slatt, husband and wife, and Steven N. Moore
and Sheila E. Moore, husband and wife, contingent upon execution of said amended
Guaranty by said Guarantors.
8. The Building "Rules and Regulations" are attached hereto as Exhibit C and by
this reference made a part of the Lease.
Except as set forth in this Lease Amendment No. 2, all the provisions of the
Lease shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
date first above written.
Landlord: Tenant:
BURKE-STATE BLDG., L.L.C., a Washington Seattle Software Labs, Inc.,
limited liability company a Washington corporation
As amended 4d) & 5h)
By: /s/ H. Martin Smith, III By: /s/ Christopher G. Slatt
------------------------------------ --------------------------------
Its: Managing Member Its: President
----------------------------------- --------------------------------
By:
--------------------------------
Its:
-------------------------------
5.h) Tenant shall install signage on wall opposite elevator entrance on the
third floor similar to that of other tenant's in building at Tenant's sole
cost and upon review and approval by Landlord.
8
<PAGE>
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
On this 17th day of December 1996, before me, a Notary Public, personally
appeared H. Martin Smith, III personally known to me or proved to me on the
basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
Witness my hand and official seal.
Melaney Wade
------------------------------------------------
Name (printed): Melaney Wade
---------------------------------
Notary Public in and for the State of Washington,
residing at Bellevue
------------------------------------
My Commission expires: 5/19/96
-------------------------
9
<PAGE>
LEASE AMENDMENT NO. 3
This Lease Amendment No. 3 is made and entered into this 28th day of
October 1998 by and between BURKE-STATE BLDG., L.L.C., a Washington limited
liability company ("Landlord"), and WatchGuard, Inc., a Washington corporation
("Tenant").
Recitals: Landlord and Tenant's predecessor in interest Seattle Software Labs,
Inc., a Washington corporation ("Seattle Software") entered into a written Lease
dated March 15, 1996, Lease Amendment No. 1 dated June 10, 1996, and Lease
Amendment No. 2 dated November 6, 1996 (the "Lease"), whereby Seattle Software
leased from Landlord certain Premises consisting of approximately 7,517 rentable
square feet of space located in the Burke Building in the Occidental Mall,
Seattle, Washington, designated as Suite 301. Landlord and Tenant desire to
further amend the Lease to increase the square footage of the Premises by adding
Suite 315, to adjust Tenant's Percentage of the Building, to revise the Rent,
and to establish the base year for Suite 315.
NOW THEREFORE, Landlord and Tenant agree to amend the Lease as follows:
1. The following paragraph shall be added to and become a part of Section 1(b):
From and after November 1, 1998, "Premises" means that certain space
outlined in red on the attached Exhibit B located on the third floor of the
Burke Building (Suites 301 and Suite 315).
2. Sections 1(c), 8(a)(iii) and 9(a)(iii) are supplemented as follows:
From and after November 1, 1998, Tenant's Percentage of the Building shall
continue to mean 6.75% for purposes of Suite 301 (approximately 7,517 rentable
square feet), but Tenant's Percentage of the Building shall also mean an
additional one and twenty-two/100ths percent (1.22%) for purposes of Suite 315
(approximately 1,362 rentable square feet). Moreover, while the "Base Services
Year" and the "Base Tax Year" shall continue to be calendar year 1996 for Suite
301, the "Base Services Year" and the "Base Tax Year" for Suite 315 shall be
calendar year 1998. In other words, Tenant's share of increases in Real
Property Taxes and Operating Costs shall be calculated separately for Suite 315,
using a 1998 base year.
3. Section 1(f) is amended to read:
Lease Expiration Date: April 30, 2001 ("Expiration Date")
1
<PAGE>
4. The following paragraph shall be added to and become a part of Section 1(g):
From and after November 1, 1998, the Rent shall be the following amounts as
to the following periods during the term:
Period Monthly Amount
--------------------------------------------- ------------------------
November 1, 1998 to April 30, 1999 $12,195.35 Per month
May 1, 1999 to April 30, 2000 $12,622.06 Per month
May 1, 2000 to April 30, 2001 $13,048.77 Per month
5. Exhibit B is deleted in its entirety and replaced with the Exhibit B
attached hereto and made a part hereof.
6. Improvements. Tenant hereby accepts the Premises in "AS IS" condition,
subject to the following:
Landlord, at Landlord's sole cost, shall (i) demolish a portion of the
demising wall; and (ii) install a finished passageway, to be mutually agreed
upon by Landlord and Tenant, between Suite 301 and Suite 315; and (iii) patch in
carpeting in the area affected by construction to match the existing carpeting
as closely as reasonably possible. The provisions of the Work Letter (Exhibit C
to the Lease) have been completed and shall no longer apply; Landlord shall not
be required to make additional improvements to the Premises, except as set forth
above. Tenant acknowledges that some or all of the foregoing work may be
performed during Tenant's business hours and may cause some disturbance to
occur, including noise and odors, and agrees to a reasonable degree of such
disturbance while the work is in progress, provided Landlord makes commercially
reasonable efforts to minimize any such disturbance.
7. Agency Disclosure. Martin Smith Inc hereby discloses that it represents the
Landlord in this transaction.
Except as set forth in this Lease Amendment No. 3, all the provisions of the
Lease shall remain unchanged and in full force and effect.
2
<PAGE>
Dated the date first above written.
Landlord: Tenant:
BURKE-STATE BLDG., L.L.C., a Washington WatchGuard, Inc.,
limited liability company a Washington corporation
By: /s/ H. Martin Smith, III By: /s/ Steven N. Moore
Managing Partner Its: Chief Financial Officer
By: ________________________________
Its: ________________________________
3
<PAGE>
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that H. Martin Smith, III is
the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute the
instrument, and acknowledged it as the (title) managing member of (entity) Burke
State Bldg., L.L.C., a Washington limited liability company to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
Witness my hand and official seal this 30th day of November 1998.
/s/ Danette A. Brandt
----------------------------------------- ------------------------------------
Notary Public
(Print Name) Danette A. Brandt
NOTARY SEAL Residing at Edmonds, WA
My Commission Expires: 3/8/2001
-------------------------------------------------------------------------------
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Steven N. Moore is the
person who appeared before me, and said person acknowledged that he/she signed
this instrument, on oath stated that he/she was authorized to execute the
instrument, and acknowledged it as the (title) CFO of (entity) Watchguard
Technologies, Inc., a Delaware corporation, to be the free and voluntary act of
such party for the uses and purposes mentioned in the instrument.
Witness my hand and official seal this 6th day of November 1998.
/s/ Deborra L. Nelson
----------------------------------------- ------------------------------------
Notary Public
(Print Name) Deborra L. Nelson
NOTARY SEAL Residing at King County
My Commission Expires: 10/25/99
-------------------------------------------------------------------------------
4
<PAGE>
EXHIBIT B
GUARANTY
THIS GUARANTY is made and given by the individuals set forth on the
signature page hereof ("Guarantor") to COM Realty, Inc., a Delaware corporation
("Landlord").
RECITALS: Seattle Software Labs, Inc., a Washington corporation
("Tenant"), has requested that Landlord enter into a lease with Tenant, and
Landlord is unwilling to enter into such lease unless Guarantor gives Landlord
an unconditional guarantee of the full, prompt and complete payment by Tenant as
and when due of (a) all installments of rent and other monetary obligations
payable under the Lease for all periods during which Tenant is in actual
occupancy of the Premises, (b) all installments of rent and other monetary
obligations payable under the Lease for the twelve (12) month period following
any default by Tenant, and (c) the unamortized balance as of the date Tenant
relinquishes possession of the Premises of (i) the total cost of improvements,
alterations and repairs ("Tenant Improvements") provided by Landlord under the
Lease, which is estimated to be $17,992.58, and (ii) the leasing fees due to
Martin Smith Inc and Leibsohn & Company, which are estimated to be $15,866.76.
Such costs and fees shall be amortized, without interest, over the Term.
NOW, THEREFORE, in order to induce Landlord to enter into a lease with
Tenant, Guarantor agrees as follows:
1. Guaranty. Guarantor, as a material inducement to and in consideration
of Landlord's entering into a written lease with Tenant, dated the same date as
this Lease Guaranty (the "Lease"), pursuant to which Landlord has leased or will
lease to Tenant, and Tenant has leased or will lease from Landlord, the premises
located in the City of Seattle, County of King, State of Washington, in the
building located at 316 Occidental Avenue South, Seattle, Washington,
unconditionally guarantees and promises to and for the benefit of Landlord the
full, prompt and complete payment by Tenant as and when due of (a) all
installments of rent and other monetary obligations payable under the Lease for
all periods during which Tenant is in actual occupancy of the Premises, (b) all
installments of rent and other monetary obligations payable under the Lease for
the twelve (12) month period following any default by Tenant, and (c) the
unamortized balance as of the date Tenant relinquishes possession of the
Premises of (i) the total cost of the Tenant Improvements provided by Landlord
under the Lease, which is estimated to be $17,992.58, and (ii) the leasing fees
due to Martin Smith Inc and Leibsohn & Company, which are estimated to be
$15,866.76. The cost and fees described in clauses (c)(i) and (c)(ii) of the
preceding sentence shall be amortized, without interest over the Term. If, for
example, Tenant defaults under the Lease at the end of the thirtieth month of
the Lease Term, Guarantor shall be obligated to pay the unamortized portion of
the Tenant Improvements and leasing fees which equal $16,929.74, plus all
installments of rent and other monetary obligations payable under the Lease for
the twelve-month period following default by Tenant (months 31 through 42).
Guarantor acknowledges and agrees that this Guaranty is an absolute guarantee of
payment.
<PAGE>
2. Attorneys' Fees. Guarantor agrees to pay all expenses, including,
without limitation, actual attorneys' fees and costs, paid or incurred by
Landlord in endeavoring to collect or secure performance of the Obligations, or
any part thereof, or in enforcing this Guaranty.
3. Joint and Several Liability. If Guarantor is more than one person,
Guarantor's Obligations are joint and several and are independent of Tenant's
Obligations. A separate action may be brought or prosecuted against any
Guarantor whether this action is brought or prosecuted against any other
Guarantor or Tenant, or all, or whether any other Guarantor or Tenant, or all,
are joined in the action.
4. Primary Liability. Guarantor's liability under this Guaranty is
primary, direct and immediate. Guarantor waives the right to require Landlord
to:
(a) Proceed against Tenant or any other person;
(b) Proceed against or exhaust any security or collateral that
Landlord holds from Tenant; or
(c) Pursue any other remedy in Landlord's power.
5. Waiver of Statute of Limitations. Guarantor waives the benefit of any
statute of limitations affecting Guarantor's liability under this Guaranty.
6. Bankruptcy or Reorganization of Tenant. In the event of any proceeding
by or against Tenant, a composition, extension or reorganization under any
provision of the Bankruptcy Code, or any other bankruptcy, insolvency,
receivership, reorganization or similar proceeding, Guarantor expressly waives
the extension of the Obligations of this Guaranty under any provision of the
Bankruptcy Code or any law or rule applicable to such proceedings and hereby
agrees that Landlord may proceed immediately to collect any amount due under the
terms of this Guaranty and to otherwise enforce this Guaranty.
7. Rights and Remedies Cumulative. All of Landlord's rights and remedies
herein specified are intended to be cumulative and not in substitution for any
right or remedy otherwise available to Landlord.
8. Enforcement. If Tenant defaults under the Lease, Landlord can proceed
immediately against Guarantor or Tenant, or both, or Landlord can enforce
against Guarantor or Tenant, or both, any rights that it has under the Lease,
this Guaranty, or both, or pursuant to applicable laws. If the Lease terminates
and Landlord has any rights it can enforce against Tenant after termination,
Landlord may enforce these rights against Guarantor without giving previous
notice to Tenant or Guarantor and without making any demand on either of them.
9. Waiver of Defenses. Guarantor waives any defense arising by reason of
any disability of Tenant, or by reason of the cessation from any cause
whatsoever of the liability of
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<PAGE>
Tenant. Guarantor shall be liable and remain liable for the payment of the
Obligations to the extent provided herein notwithstanding.
(a) Any previous discharge (partial or total) of Tenant from any
further liability;
(b) Any bar (temporary, partial or total) to the pursuit by Guarantor
of any right or claim for indemnification from Tenant;
(c) Any right or claim by Guarantor to be subrogated to the rights or
claims of Landlord against Tenant or in and to the Premises;
(d) Any action or inaction or delay in acting by Landlord; or
(e) Landlord's failure to enforce, or delay in enforcing, any of its
rights under the Lease, or otherwise.
10. Amendments to Lease; Assignment of Lease. Guarantor authorizes
Landlord, without notice or demand and without affecting Guarantor's liability
hereunder, from time to time to:
(a) Amend or change the provisions of the Lease by agreement between
Landlord and Tenant at any time, or by course of conduct, or by operation of
law, or otherwise, without the consent of, and without notice to, Guarantor;
(b) Permit or suffer an assignment of the Lease or any subletting
under the Lease, whether or not consented to by Landlord; or
(c) Take and hold security for the performance and payment of the
Obligations and apply, enforce, exchange, waive and release any such security.
11. Waiver of Subrogation. Until all of the Obligations have been
performed or paid in full, Guarantor shall have no right of subrogation against
Tenant. Guarantor waives its right to enforce any remedies that Landlord now
has, or may later have, against Tenant. Guarantor waives any right to
participate in any security now or hereafter held by Landlord.
12. Waiver of Acceptance, Presentments and Notices. Guarantor waives
notice of acceptance of this Guaranty and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor and notices of acceptance of this Guaranty, and waives all notices of
the creation, existence, or incurring of new or additional Obligations.
13. Miscellaneous Provisions.
(a) This Guaranty sets forth the entire agreement of the parties as to
the subject matter hereof and supersedes all prior discussions and
understandings between them.
-3-
<PAGE>
This Guaranty may not be amended or rescinded in any manner except by an
instrument in writing signed by a duly authorized officer or representative of
each party hereto.
(b) This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of Washington.
(c) Should any of the provisions of this Guaranty be found to be
invalid, illegal or unenforceable by any court of competent jurisdiction, such
provision shall be stricken and the remainder of this Guaranty shall nonetheless
remain in full force and effect unless striking such provision shall materially
alter the intention of the parties.
(d) In the event any action is brought to enforce this Guaranty, the
parties agree to be subject to exclusive in personam jurisdiction in the
Superior Court for the State of Washington or in the United States District
Court for the Western District of Washington and agree that in any such action
venue shall be exclusively at Seattle, Washington.
(e) No waiver of any right under this Guaranty shall be effective
unless contained in a writing signed by a duly authorized officer or
representative of the party sought to be charged with the waiver and no waiver
of any right arising from any breach or failure to perform shall be deemed to be
a waiver of any future right or of any other right arising under this Guaranty.
(f) Paragraph headings contained in this Guaranty are included for
convenience only and form no part of the agreement between the parties.
(g) All notices or requests required or permitted under this Guaranty
shall be in writing; shall be personally delivered or sent by certified mail,
return receipt requested, postage prepaid; shall be deemed given when so
delivered or mailed, irrespective of whether such notice or request is actually
received by the addressee; and shall be sent to the parties at the following
addresses:
If to Landlord: Occidental Mall
c/o Martin Smith Inc
615 Second Avenue, Suite 400
Seattle, WA 98104
If to Guarantor: Steven N. Moore
Christopher Slatt
Seattle Software Labs, Inc.
316 Occidental Avenue South, Suite 301
Seattle, WA 98104
Either party may change the address to which notices shall be sent by notice to
the other party.
-4-
<PAGE>
(h) This Guaranty shall be binding upon, and inure to the benefit of,
the parties hereto and their respective heirs, devisees, legatees, executors,
administrators, personal representatives, successors and assigns. If Landlord
disposes of its interest in the Lease, the term "Landlord" as used in this
Guaranty shall mean Landlord's successors.
(i) As used in this Guaranty, the masculine shall include the feminine
and neuter, the feminine shall include the masculine and neuter, the neuter
shall include the masculine and feminine, the singular shall include the plural
and plural shall include the singular, as the context may require.
Dated this 17th day of December, 1996.
GUARANTOR:
/s/ Steven N. Moore and /s/ Christopher Slatt and
-------------------------- ----------------------------
Steven N. Moore Christopher Slatt
/s/ Sheila Moore, husband and wife /s/ Jeanine Slatt, husband and wife
------------------------------------- --------------------------------------
Sheila Moore Jeanine Slatt
-5-
<PAGE>
STATE OF WASHINGTON )
) ss. INDIVIDUAL
COUNTY OF KING )
On this _______ day of __________, 19___, personally appeared before me, a
Notary Public in and for the State of Washington, duly commissioned and sworn,
_______________________ and ________________________, known to me to be the
individual(s) described in and who executed the within and foregoing instrument
and acknowledged the said instrument to be his (their) free and voluntary act
and deed.
Witness my hand and official seal hereto affixed the day and year first above
written.
------------------------------------------------
Notary Public in and for the State of Washington
Residing at
------------------------------------
My Commission Expires:
--------------------------
------------------------------------------------
Print Notary Public Name
-6-
<PAGE>
STATE OF WASHINGTON )
) ss. INDIVIDUAL
COUNTY OF KING )
On this _______ day of __________, 19___, personally appeared before me, a
Notary Public in and for the State of Washington, duly commissioned and sworn,
____________________ and _____________________________, known to me to be the
individual(s) described in and who executed the within and foregoing instrument
and acknowledged the said instrument to be his (their) free and voluntary act
and deed.
Witness my hand and official seal hereto affixed the day and year first above
written.
------------------------------------------------
Notary Public in and for the State of Washington
Residing at
-------------------------------------
My Commission Expires:
--------------------------
------------------------------------------------
Print Notary Public Name
-7-