Exhibit 10.34
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OFFICE LEASE AGREEMENT
BY AND BETWEEN
XXXXX X. AND XXXXXX X. XXXXX,
husband and wife
Landlord
and
PAC WEST TELECOMM, INC.,
a California corporation
Tenant
TABLE OF CONTENTS
Page
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1. FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS; EXHIBITS.............................................. 1
1.1 Broker................................................................................ 1
1.2 Building.............................................................................. 1
1.3 Premises.............................................................................. 1
1.4 Tenant's Share........................................................................ 1
1.5 Lease Year............................................................................ 1
1.6 Commencement Date..................................................................... 1
1.7 Expiration Date....................................................................... 1
1.8 Term.................................................................................. 1
1.9 Base Rent............................................................................. 1
1.10 Early Occupancy....................................................................... 2
1.11 Additional Rent....................................................................... 2
1.12 Base Year............................................................................. 2
1.13 Security Deposit...................................................................... 2
1.14 Parking............................................................................... 2
1.15 Landlord's Payment Address............................................................ 2
1.16 Notice Addresses...................................................................... 2
1.17 Permitted Uses........................................................................ 3
1.18 Landlord's Work....................................................................... 3
1.19 Tenant's Work......................................................................... 3
1.20 Guarantor............................................................................. 3
1.21 Exhibits.............................................................................. 3
2. PREMISES......................................................................................... 3
2.1 Acceptance of Premises................................................................ 3
3. LEASE TERM....................................................................................... 4
3.1 Duration of Lease Term................................................................ 4
3.2 Extension Option...................................................................... 4
3.3 Base Rent During Option Term.......................................................... 5
3.4 Confirmation of Commencement Date..................................................... 5
3.5 Surrender of Premises................................................................. 5
3.6 Holding Over Without Consent.......................................................... 5
4. RENT............................................................................................. 6
4.1 Payment............................................................................... 6
4.2 Interest on Late Payments; Late Charge................................................ 6
4.3 Address for Payments.................................................................. 6
5. SECURITY DEPOSIT................................................................................. 6
6. USES; COMPLIANCE WITH LAWS....................................................................... 7
6.1 Permitted Uses........................................................................ 7
6.2 Duties and Prohibited Conduct......................................................... 7
6.3 Environmental, Health And Safety Laws................................................. 7
7. SERVICES AND UTILITIES; REPAIRS AND MAINTENANCE.................................................. 8
7.1 Services and Utilities; Landlord's Obligations........................................ 8
7.1.1 Additional Services Or Utilities.............................................. 8
7.2 Services and Utilities; Tenant's Obligations.......................................... 9
7.2.1 Services and Utilities; Tenant's Options...................................... 9
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7.3 Interruption.......................................................................... 9
7.4 Landlord's Repair and Maintenance Obligations......................................... 9
7.5 Tenant's Repair and Maintenance Obligations........................................... 9
8. ADDITIONAL RENT: OPERATING COSTS AND REAL ESTATE TAXES........................................... 10
8.1 Definitions........................................................................... 10
8.1.1 Taxes......................................................................... 10
8.1.2 Operating Costs............................................................... 10
8.1.3 Tenant's Share................................................................ 11
8.2 Payment of Additional Rent for Estimated Increases in Operating Costs and Taxes....... 11
8.3 Actual Operating Costs and Taxes...................................................... 11
8.4 Determinations........................................................................ 11
8.5 Tenant's Personal Property Taxes...................................................... 12
8.6 Tenant's Utility Charges.............................................................. 12
9. IMPROVEMENTS AND ALTERATIONS..................................................................... 12
10. ACCESS........................................................................................... 12
11. DAMAGE OR DESTRUCTION............................................................................ 13
11.1 Damage and Repair..................................................................... 13
11.2 Destruction During Last Year of Term.................................................. 13
11.3 Business Interruption................................................................. 13
11.4 Tenant Improvements................................................................... 13
11.5 Express Agreement..................................................................... 14
12. WAIVER OF SUBROGATION............................................................................ 14
13. INDEMNIFICATION.................................................................................. 14
14. INSURANCE........................................................................................ 15
14.1 Liability Insurance................................................................... 15
14.2 Property Insurance.................................................................... 15
14.3 Insurance Policy Requirements......................................................... 15
15. ASSIGNMENT AND SUBLETTING........................................................................ 15
15.1 Assignment or Sublease................................................................ 15
15.2 Documentation and Expenses............................................................ 16
15.3 Transferee Obligations................................................................ 16
16. SIGNS............................................................................................ 16
17. LIENS............................................................................................ 17
18. BANKRUPTCY....................................................................................... 17
18.1 Assumption of Lease................................................................... 17
18.1.1 Definition of Adequate Assurances............................................ 17
18.2 Assignment of Lease................................................................... 17
18.3 Adequate Protection................................................................... 18
19. DEFAULT.......................................................................................... 18
19.1 Cumulative Remedies................................................................... 18
19.2 Tenant's Default; Right to Cure....................................................... 18
19.3 Landlord's Rights And Remedies........................................................ 18
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19.3.1 Termination of Lease......................................................... 18
19.3.2 Re-entry of the Premises.................................................... 18
19.3.3 Termination After Reentry.................................................... 18
19.4 Landlord's Damages.................................................................... 19
19.4.1 Delinquent Rent.............................................................. 19
19.4.2 Rent After Termination Until Judgment........................................ 19
19.4.3 Rent After Judgment.......................................................... 19
19.4.4 Leasing Concessions.......................................................... 19
19.4.5 Other Compensation........................................................... 19
19.4.6 Additional or Alternative Damages............................................ 19
19.5 Fixtures.............................................................................. 20
19.6 No Waiver............................................................................. 20
19.7 Waiver of Notice...................................................................... 20
19.8 Waiver of Redemption Rights........................................................... 20
19.9 Default by Landlord................................................................... 20
20. SUBORDINATION AND ATTORNMENT..................................................................... 20
21. REMOVAL OF PROPERTY.............................................................................. 21
22. CONDEMNATION..................................................................................... 21
22.1 Entire Taking......................................................................... 21
22.2 Constructive Taking of Entire Premises................................................ 21
22.3 Partial Taking........................................................................ 22
22.4 Awards and Damages.................................................................... 22
23. NOTICES.......................................................................................... 22
24. COSTS AND ATTORNEYS' FEES........................................................................ 22
25. LANDLORD'S LIABILITY............................................................................. 22
26. LANDLORD'S CONSENT............................................................................... 22
27. ESTOPPEL CERTIFICATES............................................................................ 22
28. RIGHT TO PERFORM................................................................................. 23
29. PARKING.......................................................................................... 23
30. AUTHORITY........................................................................................ 23
31. GENERAL.......................................................................................... 23
31.1 Headings.............................................................................. 23
31.2 Heirs and Assigns..................................................................... 23
31.3 No Brokers............................................................................ 23
31.5 Entire Agreement...................................................................... 24
31.6 Severability.......................................................................... 24
31.7 Force Majeure......................................................................... 24
31.8 Right to Change Public Spaces......................................................... 24
31.9 Governing Law......................................................................... 24
31.10 Building Directory.................................................................... 24
31.11 Building Name......................................................................... 24
31.12 Quiet Enjoyment....................................................................... 24
31.13 Survival.............................................................................. 24
31.14 Lender's Consent...................................................................... 24
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OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT ("Lease") is made this _________ day of
____________, 1999 ("Effective Date"), between Xxxxx X. and Xxxxxx X. Xxxxx,
husband and wife ("Landlord"), and Pac West Telecomm, Inc., a California
corporation, ("Tenant"). The parties agree as follows:
1. FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS; EXHIBITS. The capitalized
terms set forth below in this Section 1 shall have the meanings provided in this
Section 1, unless otherwise specifically modified by provisions of this Lease.
1.1 Broker. "Broker" shall mean Partners National Real Estate Group,
Inc. A commission shall be paid by Landlord to Broker pursuant to a separate
agreement between Landlord and Broker.
1.2 Building. "Building" shall mean the structure commonly known as
International Gateway. The Building is situated on a portion of the real
property legally described in Exhibit A and has a postal address of 12201
Tukwila Xxxxxxxxxxxxx Xxxx., Xxxxxxx, Xxxxxxxxxx 00000-0000. The Building
together with the real property described above shall constitute the "Property."
1.3 Premises. The "Premises" shall mean the space consisting of
approximately 16,851 net rentable square feet located on the second floor of the
Building and depicted on the floor plan attached to this Lease as Exhibit B,
subject to recalculation in accordance with Section 2. The Premises shall
include the Tenant Improvements, if any, described in Exhibit C.
1.4 Tenant's Share. "Tenant's Share" shall mean "Tenant's Share of
the Property". "Tenant's Share of the Property" shall mean twenty-four and
98/100th percent (24.98%), calculated by dividing the net rentable area of the
Premises by the net rentable area of the Building (approximately 67,433 net
rentable square feet. The Building load factor is ten and nine-tenths percent
(10.9%). In the event the rentable area of the Premises or Building is altered
or recalculated in accordance with Section 2, Landlord shall adjust Tenant's
Share of the Building to properly reflect such event. Landlord's adjustment of
such Tenant's Share shall be final.
1.5 Lease Year. "Lease Year" shall mean the twelve-month period
commencing January 1 and ending December 31.
1.6 Commencement Date. Subject to Section 3.1, "Commencement Date"
shall mean January 1, 2000 or the date Tenant occupies the Premises for use,
excluding construction and equipment installation, whichever is earlier. If
Xxxxx Construction Inc. is selected as the general contractor this Lease shall
commence upon dial tone service to the Premises or the date Tenant occupies the
Premises for use, excluding construction and equipment installation, whichever
is earlier. For the purposes of this Section 1.6, "dial tone service" shall mean
when Tenant has a switch connection for regular service to the optical cable
provider. Landlord is not responsible for specific performance by the optical
cable provider.
1.7 Expiration Date. "Expiration Date" shall mean the date that is
ten (10) years after the Commencement Date, unless sooner terminated or extended
in accordance with this Lease.
1.8 Term. "Term" shall mean a period of ten (10) years, commencing on
the Commencement Date and terminating on the Expiration Date, unless sooner
terminated or extended in accordance with this Lease.
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1.9 Base Rent. "Base Rent" from the Commencement Date through the
thirty-sixth (36th) month of the Lease Term shall mean the net rentable square
feet multiplied by Eleven and 50/100 Dollars ($11.50) per square foot per year,
based on 16,851 net rentable square feet of Premises, (Sixteen Thousand One
Hundred Forty-eight and 88/100 Dollars ($16,148.88) per month). "Base Rent" from
the thirty-seventh (37th) month of the Lease Term through the sixtieth (60th)
month of the Lease Term shall mean the net rentable square feet multiplied by
Twelve and 75/100 Dollars ($12.75) per square foot per year, based on 16,851 net
rentable square feet of Premises, (Seventeen Thousand Nine Hundred-four and
19/100 Dollars ($17,904.19) per month). "Base Rent" from the sixty-first (61st)
month of the Lease Term through the ninety-sixth (96th) month of the Lease Term
shall mean the net rentable square feet multiplied by Thirteen and 50/100
Dollars ($13.75) per square foot per year, based on 16,851 net rentable square
feet of Premises, (Nineteen Thousand Three Hundred-eight and 44/100 Dollars
($19,308.44) per month). "Base Rent" from ninety-seventh (97th) month of the
Lease Term through the Expiration Date shall mean the net rentable square feet
multiplied by Fifteen and 50/100 Dollars ($15.50) per square foot per year,
based on 16,851 net rentable square feet of Premises (Twenty-one Thousand Seven
Hundred Sixty-five and 88/100 Dollars ($21,765.88) per month). Prior to the
Commencement Date, the net rentable square feet may be recalculated in
accordance with Section 2. Base Rent shall be payable as provided in Section 4.
1.10 Early Occupancy. Tenant will be allowed to occupy any square
feet they feel is ready for occupancy before the Commencement Date. Early
Occupancy shall mean any use of the space not directly related to the
installation of equipment or constructing the Premises. "Base Rent" will be
payable on the occupied net square feet and will be calculated by multiplying
the actual occupied rentable square feet by Eleven and 50/100 Dollars ($11.50)
per net rentable square foot on an annualized basis. Tenant will be responsible
for all "Additional Rent" as described in Section 8 on the portion of the space
that they occupy early.
1.11 Additional Rent. "Additional Rent" shall mean the amounts
described in Section 8 as Real Property Taxes, Personal Property Taxes,
Operating Costs, and all other amounts except Base Rent which are payable by
Tenant under this Lease.
1.12 Base Year. Intentionally Deleted
1.13 Security Deposit. "Security Deposit" shall mean Twenty-five
Thousand and 00/100 Dollars ($25,000.00). The Security Deposit shall be
deposited with Landlord in accordance with Section 5.
1.14 Parking. Subject to Section 29.
1.15 Landlord's Payment Address. "Landlord's Payment Address" shall
mean: Xxxxx X. and Xxxxxx X. Xxxxx c/x Xxxxx Corporation, X.X. Xxx 00000,
Xxxxxxx, Xxxxxxxxxx 00000-0000.
1.16 Notice Addresses.
If to Landlord: Xxxxx X. and Xxxxxx X. Xxxxx
c/o Sabey Corporation
000 Xxxxxxx Xxxxxx X., Xxxxx 000
Xxxxxxx, XX 00000
Attn.: Executive Vice President
with a copy to: Xxxxx Corporation
000 Xxxxxxx Xxxxxx X., Xxxxx 000
Xxxxxxx, XX 00000
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Attn.: Facilities Manager
If to Tenant: Pac West Telecomm, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn.: Chief Financial Officer
1.17 Permitted Uses. "Permitted Uses" shall mean Tenant's use of the
Premises for a telecommunications switch site and other lawful accessory uses,
subject to the terms and conditions of this Lease. Landlord hereby represents to
Tenant that the current zoning affecting the Property allows such a
telecommunications switch site use.
1.18 Landlord's Work. "Landlord's Work" shall mean the improvements
to be made by Landlord in accordance with Exhibit C.
1.19 Tenant's Work. "Tenant's Work" shall mean the improvements, if
any, to be made by Tenant in accordance with Exhibit C.
1.20 Guarantor. Intentionally omitted.
1.21 Exhibits. The following exhibits or riders are attached to this
Lease and are incorporated into this Lease by this reference:
(a) Exhibit A - Legal Description
(b) Exhibit B - Floor Plan of Premises
(c) Exhibit C - Tenant Improvements
(d) Exhibit C-1 - Tenant's Removable Property
(e) Exhibit D - Rules And Regulations
(f) Exhibit E - Parking Area
(g) Exhibit F - Equipment and Operating Rights
(h) Exhibit G - Landlord's Lien Waiver
(i) Exhibit H - Memorandum of Lease
(j) Exhibit I - Subordination, Non-Disturbance, Estoppel and
Attornment
2. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the Premises described in Section 1.3 together with the tenant
improvements described on Exhibit C ("Tenant Improvements") and together with
rights of ingress and egress over public and common areas in the Building and on
the land legally described on Exhibit A, including all easements pertinent to
the land ("Land"). Tenant's lease of the Premises shall be subject to all of the
terms and conditions of this Lease. The Premises, Building, Land, and the
improvements on the Land other than the Building, are sometimes collectively
referred to in this Lease as the "Property".
Landlord shall complete Landlord's Work, if any, in accordance with Exhibit
C. Landlord represents that the Building Improvements, upon substantial
completion, shall materially comply with all applicable codes, regulations,
ordinances and laws including without limitation the American With Disabilities
Act. Notwithstanding anything to the contrary in this Lease, Tenant shall
provide Landlord and Landlord's contractor with such access to the Premises as
may be required by Landlord and Landlord's contractor to efficiently perform
Landlord's Work. Tenant acknowledges and agrees that Landlord shall have no
obligation to improve the Premises except as may be expressly set forth on
Exhibit C.
On or before the Commencement Date, Landlord may recalculate the "net
rentable square feet" of the Premises (the net rentable square feet is
calculated by taking the usable square feet of the Premises and multiplying by
the load factor). The recalculated net rentable square feet shall
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be certified by Tenant's architect prior to the Commencement Date. Net rentable
square feet shall be calculated in accordance with BOMA standards, utilizing a
load factor of ten and 9/10th percent (10.9%) for the Building which may be
changed upon the alteration of tenant spaces or building common areas before the
confirmation date letter to be sent according to section 3.5.
2.1 Acceptance of Premises. Landlord and Tenant hereby agree that
Landlord's Work as set forth in Exhibit C shall be constructed by Landlord's
contractor, Xxxxx Construction Inc. Tenant's acceptance of the Premises shall be
deferred until Landlord informs Tenant of the substantial completion of
Landlord's Work or Tenant occupies the Premises, whichever occurs first. Within
five (5) days ("Inspection Period") after the date Landlord informs Tenant of
such substantial completion, Tenant shall make such inspection of the Premises
as Tenant deems appropriate. Except as otherwise specified by Tenant in writing
to Landlord within the Inspection Period, Tenant shall be deemed to have
accepted the Premises in its condition and except for latent defects, as of such
date of substantial completion. If, as a result of such inspection, Tenant
discovers items of Landlord's Work of a nature commonly found on a "punch list"
(as such term is commonly used in the construction industry), which it
reasonably believes are not completed in accordance with Exhibit C, Tenant shall
notify Landlord of such items prior to the expiration of the Inspection Period.
Landlord shall promptly complete repair of all punch list items identified in
Tenant's notice which it reasonably believes require repair. The existence of
such punch list items shall not postpone the Commencement Date or the obligation
of Tenant to pay Base Rent or Additional Rent.
2.2 Tenant Allowance. Landlord will provide a Tenant allowance on a
monthly progress basis, equal to all costs to upgrade the floor loading, roof
improvements, and generator enclosure as outlined in Exhibit C upon Lease
commencement. Landlord will amortize the final amount over the first seven (7)
years of the Lease Term at a ten percent (10%) per annum interest rate and
Tenant shall pay such amounts as Additional Rent. Landlord's obligation to pay
the Tenant allowance is wholly conditioned upon Tenant not being in default
under the terms of this Lease (subject to applicable cure periods) prior to
payment of the Tenant allowance. In the event this Lease is terminated prior to
the payment of the Tenant allowance as a result of Tenant's default hereunder,
Tenant shall be solely liable for payment of any and all amounts of the Tenant
allowance to Tenant's contractor. Notwithstanding anything to the contrary in
this Section 2.2, payments of the Tenant allowance may be withheld by Landlord
on account of any of the following problems, claims filed or threatened by third
parties in connection with Tenant Improvements, damage to the Property due to
Tenant or its agents, employees, contractors or subcontractors, other
improvements of Tenant to the Premises or Tenant's breach of any of its
obligations under this Lease. Landlord shall pay the Tenant allowance once the
problems are remedied to its reasonable satisfaction. Tenant shall have the
right, through Tenant's Project Manager to approve or disapprove modifications
or changes to all construction budgets, changes to plans and specifications with
respect to the Tenant Improvements in accordance with the terms of Exhibit C.
Any modifications or changes to the approved plans and specifications and
budgets will be approved in writing by Tenant and Landlord.
3. LEASE TERM.
3.1 Duration of Lease Term. Tenant's lease of the Premises shall
commence on the Commencement Date and terminate on the Expiration Date or such
earlier or later date as may be provided for under this Lease. Notwithstanding
anything to the contrary in Section 1.6, if Landlord is unable to deliver
possession of the Premises to Tenant with Landlord's Work constructed by
Landlord's contractor substantially completed in accordance with Exhibit C on
the date specified in Section 1.6 and such delay (to the extent of such delay)
is due to no fault on the part of Tenant, then the Commencement Date shall be
the earlier of the date on which Tenant first occupies the Premises or the date
that is ten (10) days from the date of Landlord's written notice to Tenant of
substantial completion of Landlord's Work constructed by Landlord's contractor
provided for in Section 2, above.
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3.2 Extension Option. Provided that Tenant is in compliance with all
the terms and conditions of this Lease or is not in default beyond any
applicable cure period both at the time of Tenant's exercise of this Option and
at the time the Option Term is scheduled to commence, Tenant shall have the
option ("Option") to extend the term of this Lease for two (2) additional
periods of five (5) years each (the "Option Term") on the same terms and
conditions of this Lease as are provided for in the initial Term, except as
provided below in this Section 3.2 or in Section 3.3. The Option Term shall
commence upon the date of expiration of the initial Term of this Lease. To
exercise its Option, Tenant must give written notice to Landlord that Tenant is
exercising its Option at least twelve (12) months before the date of expiration
of the initial Term. If, in Landlord's reasonable discretion, Landlord
determines that the creditworthiness of Tenant is materially less than the
creditworthiness of Tenant as of the Lease's execution date, Landlord may
nullify Tenant's exercise of its Option by written notice to Tenant. Tenant
acknowledges and agrees that notwithstanding anything to the contrary in this
Lease, the right to exercise the Option shall not extend to any assignee or
subtenant of Tenant, or to any space assigned or subleased by Tenant, and any
attempt to exercise the Option by any such assignee or subtenant, or by Tenant
in connection with such assigned or subleased space, shall be deemed null and
void, except that such option shall extend to any Permitted Transferee or
subtenant as defined in Section 15. Tenant further acknowledges and agrees that
the amount of the Security Deposit payable by Tenant for the Option Term may be
increased to an amount equal to the first monthly installment of Fixed Rent
payable by Tenant during the Option Term.
3.3 Base Rent During Option Term. In the event that Tenant elects to
exercise its Option to extend the Term of this Lease in accordance with the
terms of Section 3.2, the Base Rent for the Option Term shall be equal to the
then-market rate for similarly improved space in comparable buildings for
comparable use in the South Seattle-Tukwila region; provided, however, that in
no event shall the Base Rent during the Option Term be less than the Base Rent
for the last year of the initial Lease Term. The adjusted Base Rent shall
commence on and be payable on the first day of the Option Term and shall
continue thereafter throughout the Option Term.
The market rate shall be determined on a triple net basis by analyzing
comparable lease transactions and lease renewals in the South Seattle/Tukwila
office market. In analyzing comparable transactions, all reasonable factors
affecting rent only shall be taken into consideration, including, but not
limited to, the office building age, size, style and condition and the date of
the comparable lease.
If Landlord and Tenant cannot agree on a market rate for the Option Term
prior to one hundred twenty (120) days before Lease termination, then both
parties agree to use the appraisal process, outlined as follows: Each party will
hire an MAI appraiser. Each appraiser must have a minimum of five (5) years
appraisal experience in the South Seattle/Tukwila area. Each appraiser shall
complete his/her appraisal within thirty (30) days. If the appraisers' opinion
of the market rate differs by less than ten percent (10%) of the amount of the
higher appraisal; then the market rate shall be the average of the two
appraisals. If the appraiser's opinion of market rate differs by more than ten
percent (10%) of the higher appraisal then a third MAI appraiser satisfying the
same qualifications shall be mutually hired and paid for by both parties. The
third appraiser will evaluate the market using the same parameters outlined in
the preceding paragraph. The market rate estimate of the third appraiser shall
be averaged with the market rate estimate of the appraiser closest to it. The
Base Rent for the Option Term shall be the higher of the resultant average rent
utilizing this process or the Base Rent being paid at the time of the renewal.
3.4 Confirmation of Commencement Date. Landlord may confirm the
Commencement Date to Tenant in writing within a reasonable time after delivery
of the Premises in accordance with this Lease.
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3.5 Surrender of Premises. Subject to Section 11, Tenant shall
promptly and peacefully surrender the Premises to Landlord upon the termination
of the Lease Term in as good a condition as when received by Tenant from
Landlord and/or as thereafter improved, if applicable, normal wear and tear
excepted. Unless Landlord expressly provides otherwise in writing to Tenant,
upon the expiration or termination of this Lease, all improvements and additions
to the Premises except those items set forth on Exhibit C-1 shall be deemed
property of Landlord and shall not be removed by Tenant from the Premises.
Tenant shall be solely responsible for, and shall repair, all damage to the
Property arising out of its surrender of the Premises. In addition to all other
requirements under this Lease, Tenant shall remove any Hazardous Substances, as
such term is defined in Section 6.3, on the Premises which were placed on the
Premises by Tenant, its employees, agents, contractors and/or invitees, prior to
its surrender and vacation of the Premises.
3.6 Holding Over Without Consent. If Tenant remains in possession of
the Premises after the termination or expiration of the Lease Term without
Landlord's prior written consent, Tenant shall become a tenant at sufferance
only, subject to all the provisions of this Lease so far as applicable, except
that Base Rent shall be increased to an amount equal to two hundred percent
(200%) multiplied by the sum of the monthly installments of Base Rent and
Additional Rent payable by Tenant during the last month of the Lease Term,
prorated on a daily basis. Acceptance by Landlord of Rent after the termination
of the Lease Term shall not result in a renewal or extension of this Lease. The
provisions of this Section 3.6 are in addition to, and shall not act as a waiver
of or otherwise affect, Landlord's right of re-entry or any other rights of
Landlord under this Lease or as provided by law or in equity. If Tenant fails to
surrender the Premises upon the termination of the Lease Term, despite
Landlord's demand to do so, Tenant shall indemnify, defend and hold Landlord
harmless from and against all loss and liability, including, without limitation,
any claim made by any succeeding tenant founded on, or resulting from, such
failure to surrender, including without limitation, any attorneys' fees or costs
associated therewith.
40 RENT.
4.1 Payment. Tenant shall pay Landlord the monthly installments of
Base Rent provided in Section 1.9 and Additional Rent provided in Section 1.11
in lawful money of the United States, in advance, on the Commencement Date and
thereafter on or before the first day of each month throughout the Lease Term.
Base Rent and Additional Rent shall be paid by Tenant without notice or demand,
deduction, abatement, or offset, except as expressly provided herein. Base Rent
and Additional Rent for any partial month at the beginning or end of the Lease
Term shall be prorated in proportion to the number of days in such month. Base
Rent and Additional Rent are collectively referred to in this Lease as "Rent."
4.2 Interest on Late Payments; Late Charge. If any Base Rent or
Additional Rent is not paid on the due date thereof: (i) such overdue amounts
shall bear interest at a rate equal to three (3) percentage points above the
prime rate of interest stated from time to time by Bank of America or its
successor, or, in the absence of an established prime rate, five (5) percentage
points over that bank's rate for one year certificates of deposit, but not in
excess of the highest lawful rate permitted under applicable laws, calculated
from the original due date thereof to the date of payment; and (ii) Tenant shall
pay Landlord a late charge equal to five percent (5%) of such overdue amount.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant,
the exact amount of which would be difficult to ascertain. Acceptance by
Landlord of any partial amounts due under this Section 4 shall in no event
constitute a waiver of Tenant's default with respect to any overdue amount, nor
prevent Landlord from exercising any of its other rights and remedies granted
under this Lease or by law or in equity.
4.3 Address for Payments. Tenant shall pay all Rent to Landlord at
Landlord's Payment Address, or at such other place as may be designated by
Landlord from time
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to time by written notice to Tenant at least thirty (30) days prior to the next
ensuing payment date.
50 SECURITY DEPOSIT. As security for the full and faithful performance
of every covenant and condition of this Lease to be performed by Tenant, Tenant
shall pay to Landlord the Security Deposit specified in Section 1.13. If Tenant
defaults with respect to any covenant or condition of this Lease, including but
not limited to, the payment of Base Rent or Additional Rent, Landlord may apply
all or any part of the Security Deposit to the payment of any sum in default or
payment of any other sum which Landlord may be required or may in its reasonable
discretion deem necessary to spend or incur by reason of Tenant's default. In
such event, Tenant shall deposit with Landlord the amount so applied within five
(5) days of written demand from Landlord. If Tenant shall have fully complied
with all of the covenants and conditions of this Lease the amount of the
Security Deposit then held by Landlord shall be repaid to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interest under this Lease)
within thirty (30) days after the expiration or sooner termination of this
Lease. In the event of Tenant's default under this Lease, Landlord's right to
apply the Security Deposit in accordance with this Section shall be deemed to be
in addition to any and all other rights and remedies available to Landlord under
this Lease, at law or in equity. Landlord shall not be required to keep any
Security Deposit separate from its general funds and Tenant shall not be
entitled to any interest on the Security Deposit.
60 USES; COMPLIANCE WITH LAWS.
6.1 Permitted Uses. The Premises are to be used only for the
Permitted Uses, and for no other business or purpose without the prior written
consent of Landlord, which consent may be withheld if Landlord, in its
reasonable discretion, determines that any proposed use is inconsistent with or
detrimental to the maintenance and operation of the Building as a similar office
building or is inconsistent with any restriction on use of the Property
contained in any lease, mortgage or other agreement or instrument by which the
Landlord may be bound or to which any of the Property may be subject.
6.2 Duties and Prohibited Conduct. Notwithstanding anything to the
contrary in this Lease, Tenant shall not commit any act that will increase the
then-existing rate of insurance on the Building without Landlord's prior written
consent. Tenant shall promptly pay upon demand the amount of any increase in
insurance rates caused by the Permitted Uses or by any act or acts of Tenant or
its employees, agents or representatives. Tenant shall not commit or allow to be
committed any waste upon the Premises, or any public or private nuisance or
other act which reasonably disturbs the quiet enjoyment of any other tenant of
the Property or which is unlawful. Tenant shall not, without the written consent
of Landlord, use any apparatus, machinery or device in or about the Premises, or
act in any way, which will cause any substantial noise, or any vibration, fumes,
or releases of Hazardous Substances into the surrounding environment. If any of
Tenant's office machines, equipment or activities should disturb the quiet
enjoyment of any other tenant in the Building, cause any substantial noise, or
cause any vibration, fumes or releases of Hazardous Substances, then Tenant, at
Tenant's sole expense, shall provide adequate insulation or take such other
action as may be necessary to eliminate such disturbance, noise, vibration,
fumes or releases. Tenant, at Tenant's expense, shall comply with all laws,
rules, regulations, orders, ordinances and permits relating to the Premises, or
its use or occupancy of the Premises, and shall observe such rules and
regulations as may be adopted by Landlord and made available to Tenant from time
to time. This Lease shall be subject to all applicable zoning ordinances and to
all municipal, county, state and federal laws and regulations governing or
regulating the use of the Premises.
6.3 Environmental, Health And Safety Laws. Without limiting Tenant's
obligations under this Section 6, Tenant in the exercise of its rights and the
performance of its obligations under this Lease shall comply, at Tenant's
expense, with all local, state, or federal laws, rules, regulations, ordinances,
orders and permits now existing, or as hereafter enacted,
7
amended, or issued concerning environmental, health, or safety matters
(collectively, the "Environmental Laws"). Tenant shall not use the Premises for,
or permit anything to be done in or about the Property which may subject
Landlord, any guarantor, or any mortgagee under any mortgage covering the
Property, to liability for remediation costs or other damages or penalties under
any Environmental Laws resulting from Tenant's use of, or conduct on, the
Property, including without limitation, the use, generation, transportation,
management, handling, treatment, storage, manufacture, emission, release,
disposal or deposit of any radioactive material, hazardous or toxic wastes,
hazardous or toxic substances, any material containing hazardous wastes or
hazardous substances (except as they occur in normal office products or
household cleaning products), or any other pollutant, contaminant, human
pathogen or infectious agent as such terms may now or in the future be defined
in any Environmental Laws (collectively, "Hazardous Substances"), on the
Property, adjacent surface waters, soils, underground waters, or air.
Landlord shall have the right at all reasonable times upon notice to Tenant
to conduct environmental investigations, including the taking of samples, for
the purpose of detecting or measuring the presence of Hazardous Substances on
the Property. Tenant shall keep Landlord continuously informed by written notice
of all Hazardous Substances which Tenant, or Tenant's employees, agents,
representatives, or contractors, generates, stores or otherwise allows on the
Property. Tenant shall provide Landlord with copies of all documents received or
prepared by Tenant concerning any release of a Hazardous Substance at the
Property, all documents Tenant receives or prepares in connection with any
violation, or alleged violation, of an Environmental Law by Tenant, and all
reports or other documents Tenant is required to provide any governmental
authority under any Environmental Law concerning any Hazardous Substance. Upon
request by Landlord, Tenant shall provide Landlord with all other information
which Landlord reasonably deems necessary or useful for the purpose of
determining whether Tenant is in compliance with all Environmental Laws and
whether the Property, or any part of the Property, is contaminated by any
Hazardous Substances. If Tenant or the Premises is in violation of any
Environmental Law, or in the event of a release of Hazardous Substances into or
on the Property or adjacent surface waters, soils, underground waters, or air,
Tenant shall (i) immediately notify Landlord in writing of such occurrence and
the action necessary to correct or mitigate such occurrence, and (ii) take such
action as is necessary to mitigate and correct such violation or release.
Provided, however, Landlord reserves the right, but not the obligation, to enter
the Premises, to act in place of the Tenant (and Tenant hereby appoints Landlord
as its agent for such purposes) and to take such action as Landlord deems
necessary to ensure compliance or to mitigate the violation, at Tenant's
expense. If Landlord has a reasonable belief that Tenant is in violation of any
Environmental Law, or that Tenant's actions or inaction presents a threat of
violation or a threat of damage to the Property, Landlord reserves the right to
enter the Premises and take such corrective or mitigating action as Landlord
deems necessary. All costs and expenses incurred by Landlord in connection with
any such actions shall become immediately due and payable by Tenant upon
presentation of an invoice therefor.
Tenant shall not conduct or permit others to conduct environmental testing
on the Premises without first obtaining Landlord's written consent. Tenant shall
promptly inform Landlord of the existence of any environmental study,
evaluation, investigation or results of any environmental testing conducted on
the Premises whenever the same becomes known to Tenant and Tenant shall provide
copies to Landlord, upon request by Landlord and at no cost to Landlord.
Notwithstanding the foregoing, in no event shall Tenant be responsible for or
liable to Landlord for any Hazardous Substances located in the Premises that
existed or were released upon the Premises prior to the Commencement Date of
this Lease. Landlord represents and warrants that to the best of its knowledge,
the Premises are free of any Hazardous Substances.
70 SERVICES AND UTILITIES; REPAIRS AND MAINTENANCE.
7.1 Services and Utilities; Landlord's Obligations. Landlord shall
supply Landlord's standard Building and Property security and fire monitoring
services and elevator service, Landlord's standard trash removal services
(excluding disposal of Hazardous Substances
8
or medical or biological waste) from the Building compactor, and Landlord's
standard exterior window washing services for Premises' windows. Landlord shall
also provide any janitorial services to the Premises if so requested by Tenant.
Any service or utility which is separately metered to the Premises by the
utility provider shall be billed directly to Tenant and paid directly by Tenant
to the utility provider. The Base rental rate excludes the cost of janitorial
services to the Premises, and utilities to the Premises including the estimated
utilities to supply the Premises with HVAC. All other services or utilities
which are required to be provided by Landlord under Section 7.1 which are not
separately metered by the service or utility provider shall be included within
"Operating Costs" and shall be paid by Tenant each month as provided in Section
8. The cost for any services or utilities which are not separately metered or
sub-metered shall be based on Landlord's reasonable estimate of Tenant's
consumption of such utilities. If in the Landlord's reasonable opinion the
Tenant's consumption of any utility is extraordinary, Landlord shall be entitled
to install, maintain and operate, at Tenant's cost, a monitoring/ metering
system(s) in the Premises to measure Tenant's consumption of water, electricity
(including electricity to Tenant's signage, if any) HVAC or other utilities or
services, or to measure the added demands on the Premises electrical or HVAC
systems resulting from Tenant's equipment or lights, including without
limitation, Tenant's improvements pursuant to Exhibit C.
Landlord's obligation to provide the services and utilities described in
this Section 7.1 is subject to Section 11 (Damage And Destruction) and Section
22 (Condemnation).
7.1.1 Additional Services Or Utilities. During other than normal
business hours, Landlord may restrict access to the Building in accordance with
the Building's security system, provided that Tenant shall have at all times
during the term of this Lease (24 hours of all days) reasonable access to the
Premises.
If, after written request by Tenant, Landlord furnishes HVAC or other
services or utilities in addition to the utilities or services required to be
provided by Landlord under this Lease, including without limitation, furnishing
utilities or services at times other than Normal Business Hours or in amounts
exceeding standard office use, then the cost of such non-standard or additional
services or utilities, as reasonably established by Landlord, shall be paid by
Tenant as Additional Rent.
7.2 Services and Utilities; Tenant's Obligations. Tenant shall be
solely responsible for providing, and shall pay directly, all charges for
janitorial services to the Premises and for any security services desired by
Tenant in addition to Landlord's standard Building and site security services.
Tenant shall be solely responsible for providing, at Tenant's cost, any backup
electricity generator desired by Tenant. It is understood that, except as
provided in Sections 7.1 or 7.4, Landlord shall not be required to provide any
services or utilities to Tenant, and Tenant shall make all necessary
arrangements to have such services and utilities billed directly to Tenant and
paid directly by Tenant. Tenant shall pay its share, as reasonably determined by
Landlord, of any unique services or equipment used by Tenant which are shared by
other tenants of the Building, such as generators, dilution tanks and air
compressors.
7.2.1 Services and Utilities; Tenant's Options. Landlord grants
Tenant the option to install an HVAC unit(s) and/or a communications antenna on
the Building's rooftop, in a location(s) to be mutually agreed upon between
Landlord and Tenant. Tenant, at its option and at its sole cost and expense, may
install conduit from the street (Tukwila International Boulevard) to its
Premises with US West, Teligent and Nextlink, or such other fiber optic service
providers ("Service Providers"). Tenant shall be provided, at no charge, conduit
access from the Premises to such Service Providers from the location known in
Tenant's industry as the "meet me room", which is identified on Exhibit B-1.
7.3 Interruption. Landlord shall not be liable for any loss, injury
or damage to persons or property caused by or resulting from any variation,
interruption, or failure of services or utilities to be provided by Landlord
under this Lease due to any cause whatsoever,
9
including without limitation, Landlord's failure to make any repairs or perform
any maintenance required to be performed by Landlord under this Lease. No
temporary variation, interruption or failure of services or utilities to be
provided by Landlord under this Lease incident to the making of repairs,
alterations or improvements, or due to accident, 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 under this Lease.
7.4 Landlord's Repair and Maintenance Obligations. Except as
provided in Sections 9 (Improvements and Alterations by Tenant), 11 (Damage or
Destruction) or 22 (Condemnation), Landlord shall cause to be maintained in
reasonably good order and condition the Premises and the public and common areas
of the Property, such as lobbies, elevators, stairs, corridors and restrooms;
provided, however, Tenant shall be responsible for the cost of repair of damage
occasioned by any act or omission of Tenant or Tenant's officers, contractors,
agents, invitees, licensees or employees, subject to Section 12, Waiver of
Subrogation. Landlord shall maintain and repair the Premises, water, if
applicable, and elevator service at all times during the term of the Lease.
7.5 Tenant's Repair and Maintenance Obligations. Except for
maintenance, replacements and repairs required to be made or provided by
Landlord under Sections 7.1 or 7.4, Tenant, at its sole cost and expense, shall
provide for the maintenance, repair and replacement within the Premises and all
built-in appliances and equipment which are in the Premises for Tenant's
exclusive use and any security systems or services desired by Tenant in addition
to any such systems or services as may be provided by Landlord under this Lease.
In performing its obligations under this Section 7, Tenant, at Tenant's
expense, shall comply with all Environmental Laws and all other applicable laws,
ordinances, codes, orders, rules or regulations of any governmental authority.
Tenant shall retain, and shall provide Landlord upon request, copies of Tenant's
maintenance and service contract(s). Except as provided in Section 9 in
connection with Alterations, before making or performing any work, repairs, or
replacement of any kind in the Premises, if such work shall affect the building
systems or costs of operation to Landlord then Tenant shall obtain Landlord's
prior written approval, which approval may be conditioned, on Tenant providing
Landlord with plans and specifications therefor, if applicable, which are
acceptable to Landlord. All work, maintenance, repairs and replacements by
Tenant under this Lease shall be performed by licensed contractors acceptable to
Landlord. Before installing any heavy equipment or fixtures in the Premises,
Tenant shall submit the plans and specifications therefor to Landlord for
Landlord's written approval.
80 ADDITIONAL RENT: OPERATING COSTS AND REAL ESTATE TAXES
8.1 Definitions. In addition to the Base Rent, Tenant shall pay to
Landlord each month as Additional Rent Tenant's Share of Taxes and of Operating
Costs as provided in this Section 8, using the following definitions:
8.1.1 Taxes. "Taxes" shall mean taxes on real property and
personal property, charges and assessments (or any installments thereof due
during the Lease Year) levied with respect to the Property, any improvements,
fixtures and equipment on the Property, and all other property of Landlord, real
or personal, used directly in the operation of the Property, and any taxes
levied or assessed (or any installment thereof due during the Lease Year) in
addition to or lieu of, in whole or in part, such real property or personal
property taxes, or any other tax upon leasing of the Property and/or Building or
rents collected, but not including any federal or state income, estate, business
and occupation, inheritance or franchise tax.
8.1.2 Operating Costs. "Operating Costs" shall mean all expenses
other than Taxes paid or incurred by Landlord for obtaining services and
products for maintaining, operating, equipment replacement, and repairing the
Property, including without limitation, the Property public and common areas,
and the personal property used in conjunction therewith, and which shall
include, without limitation, the costs of Landlord performing its
10
maintenance and repair obligations under this Lease, depreciation and
amortization of capital improvements made subsequent to the initial development
of the Property or Building which are designed with a reasonable probability of
enhancing the health and/or safety of the Property or improving the operating
efficiency of the Property or Building, security services for the Property, fire
alarm system monitoring and testing, refuse collection, maintaining water,
sewer, storm drainage and other utility systems and services, common area
electricity, gas and other similar energy sources (excluding electricity for the
Premises which will be charged to the Tenant subject to paragraph 8.6 below),
supplies, Premises janitorial if provided, common area janitorial and cleaning
services, exterior window washing, landscape planting, maintenance and
irrigation, services of independent contractors (including any market-rate
management fees which may be or become payable to third parties), compensation
(including employment taxes and fringe benefits) of all persons who perform
duties in connection with the operation, maintenance and repair of the Property
and its equipment, the maintenance, resurfacing, repair and striping of parking
areas and curbs (including driveways, loading zones and access easements),
downspouts and gutters, lighting and outdoor facilities, premiums for Landlord's
insurance, licenses, permits and inspection fees, a management fee, reasonable
legal, administrative and accounting expenses, and any other expense or charge
whether or not hereinabove described, which in accordance with generally
accepted accounting principles and management practices would be considered an
expense of maintaining, operating, or repairing the Property, excluding or
deducting, as appropriate costs of any special services rendered to individual
tenants (including Tenant) for which a special charge is collected including,
without limitation, any specially metered charges. Notwithstanding the
foregoing, Operating Costs shall not include the following:
(1) attorney's fees, accounting fees and other expenditures incurred in
connection with negotiations, disputes and claims of other tenants or occupants
of the Building, except as specifically otherwise provided in the Lease;
(2) costs directly attributable to or for the sole benefit of a tenant,
including Tenant;
(3) rental on ground leases or other underlying leases;
(4) cost of any work or services to the extent performed for any facility
other than the Building (provided Landlord shall have the right to reasonably
allocate the cost of services provided to more than one facility);
(5) costs due to Landlord's willful violation of any governmental rule or
authority;
(6) charitable or political contributions;
(7) any fees paid to related parties of Landlord which exceed the market
rate for similar services.
8.1.3 Tenant's Share. "Tenant's Share" in connection with
Operating Costs and Taxes shall mean Tenant's Share of the Property multiplied
by actual or estimated, as the case may be, Operating Costs or Taxes allocated
to the Property, respectively. Notwithstanding anything to the contrary in this
Section 8.1.3, for purposes of the determination of Operating Costs, to the
extent Operating Costs vary depending upon occupancy type or level of the areas
served, such varying Operating Costs shall be adjusted to ninety-five percent
(95%) of occupancy, so that such Operating Costs shall not reflect material
changes to the extent attributable to changes in occupancy type and/or levels.
8.2 Payment of Additional Rent for Estimated Increases in Operating
Costs and Taxes. Within ninety (90) days of the Commencement Date or the close
of each Lease Year, as applicable, or as soon thereafter as is practicable,
Landlord shall provide Tenant with a written statement of Tenant's Share of
estimated Operating Costs and increases in Operating Costs and Taxes for such
Lease Year. Tenant shall pay 1/12 of the amount of such estimated Operating
Costs, and increases in Operating Costs and Taxes as Additional Rent as
11
provided in Section 4 each month during such Lease Year and until such time as
Landlord provides Tenant with a statement of estimated increases for the
subsequent Lease Year. If at any time or times during such Lease Year, it
appears to Landlord that Tenant's Share of actual Operating Costs and/or actual
Taxes will vary from the estimated Operating Costs and/or Taxes by more than
five percent (5%) on an annual basis, Landlord may, by written notice to Tenant,
revise its estimate for such Lease Year and Additional Rent payable by Tenant
under this Section 8.2 for such Lease Year shall be increased based on
Landlord's revised estimate.
8.3 Actual Operating Costs and Taxes. Landlord will make reasonable
efforts within ninety (90) days after the close of each Lease Year during the
Term hereof for which an estimated statement was delivered to Tenant pursuant to
Section 8.2, to deliver to Tenant a written statement ("Reconciliation
Statement") setting forth Tenant's Share of the actual Operating Costs and Taxes
paid or incurred by Landlord during the preceding Lease Year (or such prorated
portion of such Lease Year if this Lease commences or terminates on a day other
than the first or last day of a Lease Year, based on a 365-day Lease Year). If
the actual Operating Costs and/or Taxes shown on the Reconciliation Statement
for any Lease Year exceed estimated Operating Costs and/or Taxes paid by Tenant
to Landlord pursuant to Section 8.2, Tenant shall pay the excess to Landlord as
Additional Rent within thirty (30) days after the date of the Reconciliation
Statement. If the Reconciliation Statement shows that actual Operating Costs
and/or Taxes are less than the estimated Operating Costs and/or Taxes paid by
Tenant to Landlord pursuant to Section 8.2, then the amount of such overpayment
shall be credited by Landlord to the next Additional Rent payable by Tenant (or
refunded to Tenant in the event of the termination or expiration of this Lease).
Notwithstanding anything to the contrary in this Section 8.3, Tenant's Share of
Operating Costs and Taxes for any partial Lease Year at the end of the Term
shall be as shown on Landlord's statement of estimated Operating Costs and Taxes
furnished to Tenant pursuant to Section 8.2.
8.4 Determinations. The determination of actual and estimated
Operating Costs and Taxes shall be made by Landlord. Landlord or its agent shall
keep records in reasonable detail showing all expenditures made for the items
enumerated in this Section 8.
Tenant shall have the right at its own cost and expense to review and/or
inspect Landlord's records once in any calendar year with respect to any
Operating Costs shown on Landlord's annual reconciliation statement provided to
Tenant. Tenant shall give Landlord written notice of its intention to conduct
any such audit within ninety (90) days of the date of Landlord's annual
reconciliation statement or Tenant shall be deemed to have waived its audit and
inspection right with respect to the period of time covered in such statement.
Tenant's audit shall be conducted at Landlord's main business office, or at such
other location as Landlord may keep its relevant business records, and on a date
mutually agreed upon by Landlord and Tenant, but in no event earlier than sixty
(60) days from the date of Tenant's notice. Tenant, and its employees, agents,
attorneys and representatives agree that any and all information concerning
Operating Costs or any other information disclosed by Landlord pursuant to any
such audit shall not be disclosed to any other person or entity without the
prior written consent of Landlord, which consent shall be at Landlord's sole
discretion. Prior to providing such confidential information to any of Tenant's
employees, agents, attorneys or representatives, Tenant shall deliver to
Landlord a written acknowledgment of such parties' agreement to be bound by the
terms of this paragraph, in a form satisfactory to Landlord. Nothing in this
paragraph shall relieve Tenant of its obligation under Section 8 to pay
Additional Rent without notice, demand, offset or deduction.
8.5 Tenant's 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 Property and, upon Landlord's request,
shall promptly provide Landlord with written proof of such payment. Solely for
purposes of this Section 8.5, "Property of Tenant" shall include Landlord's
Work, Tenant's Work and all other improvements which are paid for by Tenant, and
"Personal Property Taxes" shall include all property taxes assessed against the
Property of Tenant, whether assessed as real or personal property.
12
8.6 Tenant's Utility Charges. Landlord and Tenant agree that
utilities to the Premises including the cost of utilities to provide Building
standard HVAC are not included in the Base Rent. Landlord will estimate, by
meter if possible, the cost of the Tenant's usage of electricity and natural gas
for its Premises, including the cost of utilities to heat and cool the Premises.
Tenant shall pay to the Landlord as Additional Rent each month the Landlord's
estimate of such charges. At the end of each calendar year the Landlord shall
compare the previous 12 months actual charges to its estimates. Any amounts
owing shall be paid by Tenant, and credit amounts shall be refunded to Tenant in
accordance with Section 8.3. Landlord shall adjust its estimates as provided for
in Section 8.2.
90 IMPROVEMENTS AND ALTERATIONS BY TENANT. Except for the Tenant
Improvements, Tenant shall not make any changes, alterations, additions or
improvements in or to the Premises ("Alterations"), including, without
limitation, changes to locks on doors or to plumbing or wiring, without first
obtaining the written consent of Landlord and, where required by Landlord, such
Alterations shall be made under the supervision of a competent architect and/or
a licensed structural engineer, and in accordance with plans and specifications,
approved by Landlord, which approval shall not be unreasonably withheld. Prior
to commencing any Alterations, Tenant shall notify Landlord of such work and
Landlord shall perform a good faith asbestos inspection in accordance with
applicable laws and regulations. All work with respect to any Alterations shall
be done in a good and workmanlike manner and shall be diligently prosecuted to
completion. In no event shall Tenant's Alterations change or affect the
strength, exterior appearance, or the mechanical, electrical, or plumbing
services or systems, of the Building without Landlord's consent. Tenant shall
reimburse Landlord upon demand for any sums expended by Landlord for examination
and approval of plans and specifications for any and all Alterations. Tenant
shall also pay Landlord a sum equal to the costs incurred by Landlord during any
inspection or supervision of any and all Alterations. All damages or injury to
the Property caused by any act or omission of Tenant, or Tenant's officers,
contractors, agents, invitees, licensees or employees, or by any persons who may
be in or upon the Property with the express or implied consent of Tenant,
including but not limited to, damage from cracked or broken glass in windows or
doors, shall be paid by Tenant upon demand by Landlord.
100 ACCESS. During other than Normal Business Hours, Landlord may
restrict access to the Building in accordance with a Landlord provided Building
security system. Tenant shall have at all times during the Lease Term (24 hours
of all days) reasonable access to the Premises and roof. Landlord, at Tenant's
cost, shall provide Tenant with security access cards to the Building if such
cards are a part of the Building's security system. Tenant will be allowed to
install its own card readers, provided that they are compatible with the
Building's system, and Landlord maintains emergency access. Tenant shall permit
Landlord and its agents to enter the Premises at all reasonable times (except in
cases of emergency) for the purpose of inspecting or improving the Premises or
the Building or for performing any of its obligations under this Lease, upon
advance notice to Tenant. Nothing contained in this Section 10 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 release of Tenant from the duty of observing and
performing any of the provisions of this Lease, so long as such action does not
materially and unreasonably interfere with Tenant's access to the leased
Premises. Landlord shall have the right to enter the Premises for the purpose of
showing the Premises to prospective tenants within the period of one hundred
eighty (180) days prior to the expiration or sooner termination of the Lease
Term.
110 DAMAGE OR DESTRUCTION.
11.1 Damage and Repair. If the Building is damaged by fire or any
other cause to such extent that the cost of restoration, as estimated by
Landlord, will equal or exceed thirty percent (30%) of the replacement value of
the Building (exclusive of foundations) just
13
prior to the occurrence of the damage, or if insurance proceeds sufficient for
restoration are for any reason unavailable, then Landlord may no later than the
one hundred twentieth (120th) day following the damage, give Tenant a notice of
its election to terminate this Lease. In the event of such election; (a) this
Lease shall be deemed to terminate on the date that is thirty (30) days from the
date of Tenant's receipt of such notice ("Termination Date"); (b) Tenant shall
surrender possession of the Premises on the Termination Date; and (c) Rent and
Additional Rent shall be apportioned as of the date of Tenant's surrender and
any Rent paid for any period beyond such date shall be repaid to Tenant. If the
cost of restoration as estimated by Landlord shall amount to less than thirty
percent (30%) of said replacement value of the Building or Property and
insurance proceeds sufficient for restoration are available, or if Landlord does
not elect to terminate this Lease, Landlord shall restore the Building and the
Premises (to the extent of the improvements to the Premises originally provided
by Landlord hereunder but excluding any improvements paid for by Landlord with
any tenant allowance or credits) with reasonable promptness, subject to delays
beyond Landlord's control and delays in the making of insurance adjustments by
Landlord, and Tenant shall have no right to terminate this Lease except as
provided in this Section 11. To the extent that the Premises are rendered
untenantable by such damage or by Landlord's restoration work under this
Section, the Rent shall proportionately xxxxx, provided, however, in the event
such damage resulted from or was contributed to, directly or indirectly, by the
act, fault or neglect of Tenant, Tenant's officers, contractors, agents,
employees, invitees or licensees, Base Rent shall xxxxx only to the extent
Landlord receives proceeds from any rental income insurance policy received by
Landlord for loss of Rent under this Lease.
11.2 Destruction During Last Year of Term. Notwithstanding anything
to the contrary in this Lease, in case the Building shall be substantially
destroyed by fire or other cause at any time during the last Lease Year of this
Lease, either Landlord or Tenant may terminate this Lease upon written notice to
the other given within thirty (30) days of the date of such destruction.
11.3 Business Interruption. No damages, compensation or claim shall
be payable by Landlord for inconvenience, loss of business or annoyance arising
from any damage or destruction, repair or restoration of any portion of the
Premises or the Building. Landlord shall use reasonable efforts to effect such
repairs promptly.
11.4 Tenant Improvements. Landlord will not carry insurance of any
kind on any improvements or alterations paid for by Tenant under this Lease or
paid for pursuant to any tenant allowance or credits from Landlord, or on
Tenant's furniture, furnishings, fixtures, equipment or appurtenances of Tenant
under this Lease and Landlord shall not be obligated to repair any damage
thereto or replace the same. Tenant shall insure its improvements in accordance
with Section 14.2 and proceeds of such insurance shall be used in any repair or
restoration of the Premises.
11.5 Express Agreement. The provisions of this Section 11 shall be
considered an express agreement governing any case of damage or destruction of
the Building or Premises by fire or other casualty.
120 WAIVER OF SUBROGATION. Whether 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
party located anywhere on the Property, including the Building itself, arising
out of or incident to the occurrence of any of the perils which are covered, or
are required to be covered under this Lease, by their respective property and
related insurance policies, 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 covered by any
business interruption insurance policy, or by any loss of rental income
insurance policy, which may be held by Landlord or Tenant. Each party shall use
best efforts to cause its
14
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 and to the extent the aforesaid insurance policy or policies
shall expressly permit such a release or contain a waiver of the carrier's right
to be subrogated.
130 INDEMNIFICATION. Landlord shall not be liable for, and Tenant shall
defend (unless Landlord waives its right to such defense, and in any event with
counsel reasonably satisfactory to Landlord), indemnify, hold harmless and
protect Landlord and its employees and agents from any claim, demand, liability,
judgment, award, fine, mechanics' lien or other lien, loss, damage, expense,
penalty, charge or cost of any kind or character (including actual attorney fees
and court costs) which may be made, incurred or asserted by Tenant, Tenant's
agents or employees, contractors, or any third parties (including but not
limited to Landlord's agents, servants or employees), arising directly or
indirectly from: (a) any labor dispute involving Tenant or its agents or
contractors (but excluding labor disputes involving Landlord or its contractors,
subcontractors, or agents); (b) the construction, repair, alteration,
improvement, use, occupancy or enjoyment of the Premises by Tenant its
contractors, agents, employees and/or customers or invitees, (c) injury to, or
death of, any person or persons or damage to, or destruction of, any property
(including without limitation the costs of investigation, removal or remedial
action and disposal of any hazardous or toxic substances, as such terms may be
defined under any applicable federal, state, or municipal law, statute, rule or
regulation) occurring in, on or about the Premises, unless it is the result of
Landlord's negligence or (d) Tenant's breach of this Lease or the acts or
omissions of Tenant or its officers, directors, shareholders, employees,
contractors, subcontractors, or agents (the "Claims"). Notwithstanding anything
to the contrary in this Section 13, nothing in this Section 13 shall relieve
Landlord from responsibility for its proportionate share of its fault
attributable to its negligence or wilful misconduct in causing any such Claims.
TENANT HEREBY WAIVES ITS IMMUNITY WITH RESPECT TO LANDLORD UNDER THE INDUSTRIAL
INSURANCE ACT (RCW TITLE 51) AND/OR THE LONGSHOREMEN'S AND HARBOR WORKER ACT,
AND/OR ANY EQUIVALENT ACTS AND TENANT EXPRESSLY AGREES TO ASSUME POTENTIAL
LIABILITY FOR ACTIONS BROUGHT AGAINST LANDLORD BY TENANT'S EMPLOYEES. THIS
WAIVER HAS BEEN SPECIFICALLY NEGOTIATED BY THE PARTIES TO THIS LEASE AND TENANT
HAS HAD THE OPPORTUNITY TO, AND HAS BEEN ENCOURAGED TO, CONSULT WITH INDEPENDENT
COUNSEL REGARDING THIS WAIVER.
Without limiting Tenant's obligations under this Section 13, Tenant agrees
to defend, indemnify and hold Landlord harmless from and against any and all
claims, causes of action, regulatory demands, liabilities, fines, penalties,
losses, and expenses, including without limitation, clean-up or other remedial
costs (including attorneys' fees, costs and all other reasonable litigation
expenses when incurred and whether incurred in defense of actual litigation or
in reasonable anticipation of litigation), arising from the existence or
discovery of any Hazardous Substance on the Premises, or the migration of any
Hazardous Substance from the Premises to other properties or into the
surrounding environment, whether (i) made, commenced or incurred during the term
of this Lease, or (ii) made, commenced or incurred after the expiration or
termination of this Lease if arising out of events occurring during the term of
this Lease.
Tenant shall not be liable for, and Landlord shall defend (unless Tenant
waives its rights to defense, and in any event with counsel reasonably
satisfactory to Tenant), indemnify, hold harmless and protect Tenant and its
employees and agents from any claim, demand, liability, judgment, award, fine,
mechanics lien or other lien, loss, damage, expense, penalty, charge or cost of
any kind of character (including reasonable attorneys' fees and court costs)
which may be made, incurred or asserted against Tenant by third parties arising
or resulting from damage to property or injury to person to the extent caused by
the negligence or willful misconduct of Landlord, its employees, agents,
servants or representatives.
140 INSURANCE.
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14.1 Liability Insurance. Commencing on the earlier of the
Commencement Date or the date Tenant first enters onto the Premises and
continuing throughout the term of this Lease and any renewal hereof, Tenant
shall, at its own expense, keep and maintain in full force and effect, a policy
of commercial general liability insurance including a contractual liability
endorsement covering Tenant's obligations under Section 13, insuring Tenant's
activities upon, in or about the Premises or the Building against claims of
bodily injury or death or property damage or loss with a limit of not less than
$2,000,000 combined single limit per occurrence and annual aggregate.
14.2 Property Insurance. Commencing on the earlier of the
Commencement Date or the date Tenant first enters onto the Premises and
continuing throughout the Term of this Lease and any renewal hereof, Tenant
shall, at its own expense, keep and maintain in full force and effect, what is
commonly referred to as "all risk" coverage insurance (but excluding earthquake
and flood) on Tenant's leasehold improvements, including without limitation, any
improvements made by Landlord on behalf of Tenant or pursuant to a tenant
allowance or credit, in an amount not less than the current 100% replacement
value thereof. Landlord shall not carry insurance on Tenant's leasehold
improvements.
14.3 Insurance Policy Requirements. All policies of insurance
required under this Section 14 shall be issued by companies qualified to do
business in the State of Washington and holding a general policy holder's rating
of not less than "A" and a financial rating of not less than "Class XI" as rated
in the most current available edition of "Best's Insurance Reports." All such
policies shall contain cross-liability endorsements and shall name Landlord,
Landlord's mortgagees or beneficiaries and such additional individuals or
entities as Landlord may from time to time designate as primary additional
insureds. No insurance policy required under this Section 14 shall be canceled
or reduced in coverage and each insurance policy shall provide that it is not
subject to cancellation or a reduction in coverage except after thirty (30) days
prior written notice to Landlord. Tenant shall deliver to Landlord upon
Commencement Date or the date Tenant first enters onto the Premises and from
time to time thereafter, a copy of the certificate of insurance evidencing the
existence, endorsements, and amounts of same as required by Landlord. In no
event shall the limits of any insurance policy required under Section 14 be
considered as limiting the liability of Tenant under this Lease. All public
liability, property damage and other policies shall be written as primary
policies, not contributing with or secondary to coverage which Landlord may
carry.
150 ASSIGNMENT AND SUBLETTING.
15.1 Assignment or Sublease. Except as expressly permitted below,
Tenant shall not assign, mortgage, encumber or otherwise transfer this Lease or
sublet the whole or any part of the Premises without in each case first
obtaining Landlord's prior written consent, which consent may not be
unreasonably conditioned, delayed or withheld. Tenant also acknowledges that any
right of first refusal, option to extend the Term of this Lease, terminate this
Lease, or any other options which Landlord has granted herein are particular to
Tenant are not assignable or transferable to any assignee or sublessee under
this Lease, except to a Permitted Transferee.
In no event shall an assignment, subletting or other transfer of the Lease,
other than a transfer to a Permitted Transferee, relieve Tenant of any of its
obligations under this Lease. Consent to any such assignment, subletting or
transfer shall not operate as a waiver of the necessity for consent to any
subsequent assignment, subletting or transfer.
If such consent is requested, Landlord reserves the right to terminate this
Lease, or, if consent is requested for subletting less than the entire Premises,
to terminate this Lease with respect to the portion for which such consent is
requested, at the proposed effective date of such subletting, in which event
Landlord shall enter into the relationship of Landlord and Tenant with any such
subtenant or assignee, based on the rent (and/or other compensation) and the
term
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agreed to by such subtenant or assignee and otherwise upon the terms and
conditions of this Lease.
If Tenant is a corporation, any transfer of this Lease by merger,
consolidation or liquidation, or any change in the ownership of a majority of
its outstanding voting stock, or power to vote a majority of its outstanding
voting stock, shall constitute an assignment for the purpose of this Section 15;
provided, however, for the purposes of this Section 15, a public offering of
stock registered with the SEC, shall not constitute a transfer. If Tenant is a
partnership, any transfer of this Lease by merger, consolidation, liquidation,
dissolution, or any change in the ownership of a majority of the partnership
interests shall constitute an assignment for the purpose of this Section 15.
Tenant shall have the right, without Landlord's consent, to sublet or
assign the Premises or any part thereof to any subsidiary of Tenant or to any
entity which controls or is under the common control of Tenant ("Permitted
Transferee"). Furthermore, provided that the successor to Tenant resulting from
a merger, consolidation or other corporate restructuring has a net worth of at
least Twenty Million Dollars ($20,000,000) or ten percent (10%) equity to total
assets, Landlord's consent to any such subletting or assignment shall not be
required.
15.2 Documentation and Expenses. In connection with each request for
an assignment or subletting Tenant shall: (i) submit in writing to Landlord the
name and legal composition of the proposed subtenant or assignee, the nature of
the proposed subtenant's or assignee's business to be carried on in the
Premises, the terms and provisions of the proposed sublease or assignment and
such reasonable financial information as Landlord may request concerning the
proposed subtenant or assignee; and (ii) pay Landlord's reasonable costs of
processing such assignment or subletting, including attorneys' fees, upon demand
of Landlord. Tenant shall provide Landlord with copies of all assignments,
subleases and assumption instruments.
15.3 Transferee Obligations. As a condition to Landlord's approval of
an assignment, any potential assignee otherwise acceptable to Landlord shall
assume, in writing, all of Tenant's obligations under this Lease and Tenant and
such assignee shall agree, in writing, to be jointly and severally liable for
the performance of all of Tenant's obligations under this Lease. As a condition
to Landlord's approval any sublessee otherwise acceptable to Landlord such
sublessee shall assume, in writing, all of Tenant's obligations under this Lease
as to the subleased portion of the Premises and Tenant and such sublessee shall
agree, in writing, to be jointly and severally liable with Tenant for Rent and
performance of all of the terms, covenants, and conditions of such approved
sublease.
160 SIGNS. Tenant shall not inscribe any inscription, or post, place, or
in any manner display any sign, graphics, notice, picture, placard or poster, or
any advertising matter whatsoever, anywhere in or about the Property 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, such consent to be at Landlord's sole discretion. Any such consent by
Landlord shall be upon the understanding and condition that Tenant shall remove
the same at the expiration or sooner termination of this Lease and Tenant, at
its expense, shall repair any damage to the Property, or any portion thereof,
caused by such removal. Notwithstanding the foregoing, if Tenant is permitted to
place signage on the Building such signage must be pre-approved by Landlord's
architect and must comply with local laws. The cost of such signage,
maintenance, repair and operation shall be borne exclusively by Tenant.
170 LIENS. Tenant shall keep its interest in this Lease, any property of
Tenant located on the Property (other than the unattached personal property set
forth on Exhibit C-1), and the Property free from any liens arising out of any
work performed or materials ordered or obligations incurred by or on behalf of
Tenant and Tenant hereby agrees to indemnify, defend and hold Landlord harmless
from and against any liability from any such lien, including without
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limitation, liens arising from Tenant's Work. In the event any lien is filed
against the Property, or any portion thereof, by any person claiming by, through
or under Tenant, Tenant shall, upon request of Landlord and at Tenant's expense,
immediately either cause such lien to be released of record or furnish to
Landlord a bond, in form and amount and issued by a surety, satisfactory to
Landlord, indemnifying Landlord and the Property against all liability, costs
and expenses, including attorneys' fees, which Landlord may incur as a result
thereof. Provided that such bond has been furnished to Landlord, Tenant, at its
sole cost and expense and after written notice to Landlord, may contest, by
appropriate proceedings conducted in good faith and with due diligence, any
lien, encumbrance or charge against the Property arising from work done or
materials provided to and for Tenant, if, and only if, such proceedings suspend
the collection thereof against Landlord, Tenant and the Property and neither the
Property nor any part thereof or interest therein is or will be in any danger of
being sold, forfeited or lost.
180 BANKRUPTCY.
18.1 Assumption of Lease. In the event Tenant becomes a Debtor under
Chapter 7 of the Bankruptcy Code ("Code") or a petition for reorganization or
adjustment of debts is filed concerning Tenant under Chapters 11 or 13 of the
Code, or a proceeding is filed under Chapter 7 of the Code and is transferred to
Chapters 11 or 13 of the Code, the Trustee or Tenant, as Debtor and as
Debtor-In-Possession, may not elect to assume this Lease unless, at the time of
such assumption, the Trustee or Tenant has: (i) Cured all defaults under the
Lease and paid all sums due and owing under the Lease or provided Landlord with
"Adequate Assurance" (as defined below) that: (i) within ten (10) days from the
date of such assumption, the Trustee or Tenant will completely pay all sums due
and owing under this Lease and compensate Landlord for any actual pecuniary loss
resulting from any existing default or breach of this Lease, including without
limitation, Landlord's reasonable costs, expenses, accrued interest, and
attorneys' fees incurred as a result of the default or breach; (ii) within
twenty (20) days from the date of such assumption, the Trustee or Tenant will
cure all non-monetary defaults and breaches under this Lease, or, if the nature
of such non-monetary defaults is such that more than twenty (20) days are
reasonably required for such cure, that the Trustee or Tenant will commence to
cure such non-monetary defaults within twenty (20) days and thereafter
diligently prosecute such cure to completion; and (iii) the assumption will be
subject to all of the provisions of this Lease.
18.1.1 Definition of Adequate Assurances. For purposes of this
Section 18, Landlord and Tenant acknowledge that in the context of a bankruptcy
proceeding involving Tenant, at a minimum, "Adequate Assurance" shall mean: (i)
the Trustee or Tenant has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that the Trustee or Tenant will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and (ii) the Bankruptcy
Court shall have entered an Order segregating sufficient cash payable to
Landlord and/or the Trustee or Tenant shall have granted a valid and perfected
first lien and security interest and/or mortgage in or on property of Trustee or
Tenant acceptable as to value and kind to Landlord, to secure to Landlord the
obligation of the Trustee or Tenant to cure the monetary and/or non-monetary
defaults and breaches under this Lease within the time periods set forth above;
and (iii) the Trustee or Tenant, at the very minimum, shall deposit a sum equal
to 2 month's Base Rent to be held by Landlord (without any allowance for
interest thereon) to secure Tenant's future performance under the Lease.
18.2 Assignment of Lease. If the Trustee or Tenant has assumed the
Lease pursuant to the provisions of this Section 18 for the purpose of assigning
Tenant's interest hereunder to any other person or entity, such interest may be
assigned only after the Trustee, Tenant or the proposed assignee have complied
with all of the terms, covenants and conditions of this Lease, including,
without limitation, those with respect to Additional Rent. Landlord and Tenant
acknowledge that such terms, covenants and conditions are commercially
reasonable in the context of a bankruptcy proceeding of Tenant. Any person or
entity to which this Lease is assigned pursuant to the provisions of the Code
shall be deemed without further act or deed to have assumed all of the
obligations arising under this Lease on and after the date of such
18
assignment. Any such assignee shall upon request execute and deliver to Landlord
an instrument confirming such assignment.
18.3 Adequate Protection. Upon the filing of a petition by or against
Tenant under the Code, Tenant, as Debtor and as Debtor-In-Possession, and any
Trustee who may be appointed agree to adequately protect Landlord as follows:
(i) to perform each and every obligation of Tenant under this Lease until such
time as this Lease is either rejected or assumed by Order of the Bankruptcy
Court; (ii) to pay all monetary obligations required under this Lease, including
without limitation, payment of Rent and Additional Rent payable hereunder which
is considered reasonable compensation for the use and occupancy of the Premises;
(iii) provide Landlord a minimum of thirty (30) days prior written notice,
unless a shorter period is agreed to in writing by the parties, of any
proceeding relating to any assumption of this Lease or any intent to abandon the
Premises, which abandonment shall be deemed a rejection of this Lease; and (iv)
to perform to the benefit of Landlord as otherwise required under the Code. The
failure of Tenant to comply with the above shall result in an automatic
rejection of this Lease.
19. DEFAULT.
19.1 Cumulative Remedies. All rights of Landlord in this Lease shall
be cumulative, and none shall exclude any other right or remedy allowed by law
in force when the default occurs or in equity. In addition to the other remedies
provided in this Lease, Landlord shall be entitled to restrain by injunction
(without bond) the violation or attempted violation of any of the covenants,
agreements or conditions of Tenant under this Lease.
19.2 Tenant's Default; Right to Cure. The failure of Tenant to
perform any obligation of Tenant as provided in this Lease shall be a default
under this Lease. Tenant shall have a period of five (5) business days from the
date of Tenant's receipt of written notice from Landlord to Tenant within which
to cure any default in the payment of Rent or Additional Rent. Tenant shall have
a period of ten (10) business days from the date of written notice from Landlord
to Tenant to cure any other default under this Lease; provided, however, that
with respect to any such default which cannot be cured within such ten (10) day
period, the default shall not be deemed to be uncured if Tenant commences to
cure within ten (10) days and for so long as Tenant is diligently prosecuting
the cure thereof.
19.3 Landlord's Rights And Remedies. Upon the occurrence of an
uncured default by Tenant, Landlord, in addition to all other rights or remedies
it may have, at its option, may exercise any of the following rights without
further notice or demand of any kind to Tenant or any other person, except as
required by applicable State law:
19.3.1 Termination of Lease. The right of Landlord to terminate
this Lease and Tenant's right to possess the Premises and to reenter the
Premises, take possession thereof and remove all person from the Premises,
following which Tenant shall have no further claim thereon or hereunder;
19.3.2 Re-entry of the Premises. The right of Landlord, without
terminating this Lease and Tenant's right to possess the Premises, to reenter
the Premises and occupy the whole or any part of the Premises for and on account
of Tenant and to collect any unpaid Rents which have become payable, or which
may thereafter become payable; or
19.3.3 Termination After Reentry. The right of Landlord, even
though it may have reentered the Premises in accordance with Section 19.3.2, to
elect thereafter to terminate this Lease and Tenant's right to possess the
Premises.
Should Landlord reenter the Premises under Section 19.3.2, Landlord shall
not be deemed to have terminated this Lease or to have accepted a surrender
thereof by any such reentry, unless Landlord shall have notified Tenant in
writing that it has so elected to terminate this Lease and Tenant's right of
possession. Tenant further covenants that Landlord's service of any notice
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pursuant to the unlawful detainer statutes of the State of Washington and
Tenant's surrender of possession pursuant to such notice shall not (unless
Landlord elects to the contrary at the time of, or at any time subsequent to,
the serving of such notice and such election is evidenced by a notice to Tenant)
be deemed to be a termination of this Lease. In the event of any reentry or
taking of possession of the Premises as provided above in this Section 19,
Landlord shall have the right, but not the obligation, to remove from the
Premises all or any part of Tenant's property located in the Premises and to
place such property in storage at a public warehouse at the expense and risk of
Tenant.
19.4 Landlord's Damages. If Landlord terminates this Lease and
Tenant's right to possession of the Premises pursuant to the terms of this
Section 19, Landlord may recover from Tenant as damages, all of the following:
19.4.1 Delinquent Rent. The worth at the time of award of any
unpaid Rent earned at the time of such termination;
19.4.2 Rent After Termination Until Judgment. The worth at the
time of award of the amount by which the unpaid Rent that would have been earned
after termination until the time of award exceeds such rent loss Tenant proves
could have been reasonably avoided;
19.4.3 Rent After Judgment. The worth at the time of award of
the amount by which the unpaid Rent for the balance of the Lease Term after the
time of award exceeds the amount of such rent loss that Tenant proves could be
reasonably avoided;
19.4.4 Leasing Concessions. The unamortized portion any
financial concessions incurred by Landlord on Tenant's behalf to arrange for
Tenant's leasing of the Premises that Landlord conditionally waived at the
commencement of the Lease in consideration of Tenant's full performance of this
Lease, but which upon termination of the Lease pursuant to this Section 19 shall
accrue as rent, which costs include, but are not limited to, leasing
commissions, tenant allowances and improvements (including without limitation,
the cost of any improvements to the Premises by Landlord pursuant to Exhibit C),
"free rent" allowances and other such concessions in this Lease, amortized on a
straight-line basis over the number of months during the Lease Term in which
Tenant is obligated to pay Base Rent, and such amounts shall become immediately
due and payable as Rent earned at the time of such termination of the Lease;
19.4.5 Other Compensation. Any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including, without limitation, any
cost or expense incurred by Landlord in (i) retaking possession of the Premises,
including reasonable attorney fees therefor, (ii) maintaining or preserving the
Premises after such default, (iii) preparing the Premises for reletting to a new
tenant, including repairs necessary to the Premises for such reletting, (iv)
leasing commissions, limited to those years remaining in the initial term, and
(v) any other costs necessary or appropriate to relet the Premises; and
19.4.6 Additional or Alternative Damages. At Landlord's
election, such other amounts in addition to or in lieu of the foregoing in this
Section 19.4 as may be permitted from time to time by the laws of the State of
Washington; and
19.4.7 Calculation of Damages. As used in Sections 19.4.1 and
19.4.2, the "worth at the time of award" is to be computed by allowing interest
at the rate specified in Section 4.2. As used in Section 19.4.3, the "worth at
the time of award" is computed by discounting such amount at a discount rate
equal to six percent (6%) per year or the maximum rate allowed by any usury or
similar law, if any, of the State of Washington applicable to Tenant, whichever
is less. All Rent, other than Base Rent, shall, for the purposes of calculating
any
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amount due under the provisions of Section 19.4.3 be computed on the basis of
the average monthly amount thereof accruing during the immediately preceding
sixty (60) month period, except that if it becomes necessary to compute such
rent before such a sixty (60) month period has occurred, then such rent shall be
computed on the basis of the average monthly amount hereof accruing during such
shorter period.
19.5 Fixtures. Without limiting any of Landlord's rights under this
Lease, in the event of Tenant's default, Tenant's property specified on Exhibit
C-l and any other property which pursuant to the terms of this Lease may be
removed by Tenant at the termination of this Lease, but subject to the lien
rights of any lenders previously agreed, shall (i) be removed by Tenant upon
demand by Landlord, or (ii) if not so removed by Tenant, may be removed by
Landlord from the Premises and placed in storage at a public warehouse at the
expense and risk of Tenant.
19.6 No Waiver. The waiver by Landlord of any breach of any term,
covenant or condition contained in this Lease shall not be deemed to be a waiver
of such term, covenant or condition or any subsequent breach thereof, or of any
other term, covenant or condition contained in this Lease. Landlord's subsequent
acceptance of partial rent or performance by Tenant shall not be deemed to be an
accord and satisfaction or a waiver of any preceding breach by Tenant of any
term, covenant or condition of this Lease or of any right of Landlord to a
forfeiture of the Lease by reason of such breach, regardless of Landlord's
knowledge of such preceding breach at the time of Landlord's acceptance. No
term, covenant or condition of this Lease shall be deemed to have been waived by
Landlord unless such waiver is in writing and signed by Landlord.
19.7 Waiver of Notice. Notwithstanding anything to the contrary in
this Section 19, Tenant waives (to the fullest extent permitted under law) any
written notice, other than such notice as this Section 19 or any other provision
of this Lease specifically requires, which any statute or law now or hereafter
in force prescribes be given Tenant.
19.8 Waiver of Redemption Rights. Tenant, for itself, and on behalf
of any and all persons claiming through or under it, including creditors of all
kinds, does hereby waive and surrender all right and privilege which they or any
of them might have under or by reason of any present or future law, to redeem
the Premises or to have a continuance of this Lease for the term hereof, as it
may have been extended, after having been dispossessed or ejected therefrom by
process of law or under the terms of this Lease or after the termination of this
Lease as herein provided.
19.9 Default by Landlord. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and any mortgagee whose name and address has been provided to Tenant
in writing ("Mortgagee"); provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance,
then Landlord shall not be in default if Landlord commences performance within
such 30-day period and thereafter diligently prosecutes the same to completion.
Any mortgagee may also cure such default within the above time period. If
Landlord fails to cure any such default within the allotted time, Tenant may,
with reasonable written notice, undertake cure of such default itself and
Landlord shall pay the reasonable cost thereof on demand. Provided, however, if
Landlord fails to provide power at the minimum amperage required by this Lease
by the date set forth in Exhibit C, Section I, Landlord will be in default
immediately without notice from Tenant and without the passage of any time
period. Upon the failure to provide the minimum amperage required by this Lease,
Tenant may terminate this Lease by written notice to Landlord within a five (5)
day period following the date power was to be supplied. Failure of Tenant to
terminate this Lease shall be a waiver of such right, and the right to terminate
this Lease, subject to the power requirement shall not be valid.
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20. SUBORDINATION AND ATTORNMENT. This Lease shall be subordinate to any
mortgage or deed of trust now existing or hereafter placed upon the Land, the
Building or the Premises, created by or at the instance of Landlord, and to any
and all advances to be made thereunder and to interest thereon and all
modifications, renewals and replacements or extensions thereof ("Landlord's
Mortgage"); provided, however, that the holder of any Landlord's Mortgage or any
person or persons purchasing or otherwise acquiring the Land, Building or
Premises at any sale or other proceeding under any Landlord's Mortgage may elect
to continue this Lease in full force and effect and, in such event, Tenant shall
attorn to such person or persons. Notwithstanding the foregoing, if a lender
requires that the Lease be subordinate to any mortgage recorded after the date
of the Lease affecting the Property, the Lease shall be subordinate to such
mortgage if Landlord first obtains from such lender a written statement
providing that so long as Tenant performs its obligations under the 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 execute, acknowledge and deliver
documents which the Holder of any Landlord's Mortgage may require to effectuate
the provisions of this Section 20 within ten (10) days of the date of Landlord's
request therefor. In the event of any transfer of Landlord's interest in the
Premises or in the Property, other than a transfer for security purposes only,
the transferor shall be automatically relieved of any and all obligations and
liabilities on the part of Landlord accruing from and after the date of such
transfer and such transferee shall have no obligation or liability with respect
to any matter occurring or arising prior to the date of such transfer, except
for any Security Deposit held. Tenant agrees to attorn to such transferee,
provided transferee assumes all of Landlord's responsibilities.
21. REMOVAL OF PROPERTY. Subject to Section 19.5 and any lien waiver
Landlord may execute in favor of lenders, upon the expiration or sooner
termination of the Lease, Tenant shall remove Tenant's personal property not
permanently affixed to the Premises and the Property as specified on Exhibit C-
1, and shall pay Landlord any damages for injury to the Premises or Property
resulting from such removal. If Tenant fails to remove any such property from
the Premises at the termination of this Lease or when Landlord has the right of
re-entry, Landlord may remove and store said property without liability for loss
thereof or damage thereto, provided Landlord uses commercially reasonable
standards in performance of such removal rights. Such storage shall be for the
account and at the expense of Tenant. If Tenant fails to pay the cost of storing
any such property after it has been stored for a period of thirty (30) days or
more, Landlord may, at its option, sell, or permit to be sold, any or all 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,
unless notice is required under applicable statutes, and shall apply the
proceeds of such sale first, to the cost and expense of such sale, including
reasonable attorneys' 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 of this Lease; and, fourth, the balance, if any,
shall be paid to Tenant.
Landlord agrees to execute the Landlord's Waiver in the form attached as
Exhibit G in favor of a Union Bank of California. Landlord further agrees to
execute at the request of Tenant a Landlord's Waiver in substantially the same
form and content to any lender who holds a security interest in some or all of
the personal Property of Tenant.
22. CONDEMNATION.
22.1 Entire Taking. If all of the Premises, or such portion of the
Building as may be required for the reasonable use of the Premises, in
Landlord's determination, are taken by eminent domain, this Lease shall
automatically terminate as of the date title vests in the condemning authority
and all Rent, Additional Rent and other payments shall be paid to that date.
22
22.2 Constructive Taking of Entire Premises. In the event of a taking
by eminent domain of a material part of but less than all of the Building, if
Landlord determines that the remaining portions of the Building cannot be
economically and effectively used by it (whether on account of physical,
economic, aesthetic or other reasons) or if Landlord determines the Building
should be restored in such a way as to materially alter the Premises, then
Landlord shall forward a written notice to Tenant of such determination not more
than sixty (60) days after the date of taking. The term of this Lease shall
expire upon the date specified by Landlord in such notice but not earlier than
sixty (60) days after the date of such notice.
22.3 Partial Taking. Subject to the provisions of the preceding
Section 22.2, in case of taking by eminent domain 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 Rent 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 title to
such portion vests in the condemning authority. If more than twenty-five percent
(25%) of the Premises is taken and Landlord cannot replace such space with space
in the Building which is mutually acceptable to Landlord and Tenant, then with
sixty (60) days written notice by either party, Landlord or Tenant shall have
the right to terminate this Lease.
22.4 Awards and Damages. Landlord reserves all rights to damages to
the Premises for any partial, constructive, or entire 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 or the condemning
authority 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, business interruption or taking of
Tenant's personal property (not including Tenant's leasehold interest) provided
that such damages may be claimed only if they are awarded separately in the
eminent domain proceedings and not out of or as part of the damages recoverable
by Landlord.
23. NOTICES. All notices under this Lease shall be in writing and
delivered in person or sent by registered or certified mail, postage prepaid, or
by facsimile, to Landlord and to Tenant at their respective Notice Addresses set
forth in Section 1.16 (provided that after the Commencement Date any such notice
shall be mailed, delivered by hand or transmitted by facsimile to Tenant at the
Premises) or such other addresses as may from time to time be designated by any
such party in writing. Notices mailed as provided in this Section shall be
deemed given and received on the date that is three (3) business days following
the date of post xxxx, in the case of mailing, or the date of transmission
confirmation by the sender's facsimile machine, in the case of facsimile
transmission.
24. COSTS AND ATTORNEYS' FEES. If Tenant or Landlord bring any action for
any relief against the other, declaratory or otherwise, arising out of this
Lease, each party shall, and hereby does to the extent permitted by law, waive
trial by jury and the losing party shall pay the substantially prevailing
party's attorneys' fees in connection with such suit, at trial and on appeal,
and such attorneys' fees shall be deemed to have accrued on the commencement of
such action.
25. LANDLORD'S LIABILITY. Notwithstanding anything in this Lease to the
contrary, covenants, undertakings and agreements herein made on the part of
Landlord in this Lease are made and intended not as personal covenants,
undertakings and agreements for the purpose of binding Landlord personally or
the assets of Landlord except Landlord's interest in the Premises and Building
and rents and proceeds thereof, but are made and intended for the purpose of
binding only the Landlord's interest in the Premises and Building, as the same
may from time to time be encumbered. No personal liability or personal
responsibility is assumed by Landlord, nor shall at any time be asserted or
enforceable against Landlord or its heirs, legal representatives, successors or
assigns on account of the Lease or on account of any covenant, undertaking or
agreement of Landlord in this Lease.
23
26. LANDLORD'S CONSENT. Except as may be provided otherwise in this
Lease, whenever Landlord's consent is required under this Lease, such consent
shall not be unreasonably withheld, conditioned or delayed, provided, however,
Landlord's withholding of consent due to any mortgagee's refusal to grant its
consent shall not be deemed unreasonable.
27. ESTOPPEL CERTIFICATES. Tenant shall, from time to time upon the
written request of Landlord, execute, acknowledge and deliver to Landlord or its
designee a written statement stating: the Effective Date, Commencement Date and
Expiration Date, the date the term commenced and the date Tenant accepted the
Premises; the amount of Base Rent and the date to which such Base Rent has been
paid; and certifying such additional information as may be requested by
Landlord. It is intended that any such statement delivered pursuant to this
Section may be relied upon by a prospective purchaser of Landlord's interest or
assignee of any mortgage upon Landlord's interest in the Building. If Tenant
shall fail to respond within ten (10) days of receipt by Tenant of a written
request by Landlord as herein provided, Tenant shall be deemed to have given
such certificate as above provided without modification and shall be deemed to
have admitted the accuracy of any information supplied by Landlord to a
prospective purchaser or mortgagee and to have certified that this Lease is in
full force and effect, that this Lease represents the entire agreement between
the parties as to this leasing, that there are no existing claims, defenses or
offsets which Tenant has against enforcement of the Lease by Landlord, that
there are no uncured defaults in Landlord's performance, that the security
deposit is as stated in the Lease, and that not more than one month's Base Rent
or Additional Rent has been paid in advance.
28. RIGHT TO PERFORM. If Tenant fails to pay any sum of money required to
be paid by it under this Lease or fails to perform any other act on its part to
be performed under this Lease, and such failure continues for ten (10) days
after notice thereof by Landlord, Landlord may, but shall not be obligated so to
do, and without waiving or releasing Tenant from any obligations of Tenant, make
such payment or perform any such other act on Tenant's part to be made or
performed as provided in this Lease. Landlord shall have (in addition to any
other right or remedy of Landlord) the same rights and remedies in the event of
the nonpayment of sums due under this Section 28 as in the case of default by
Tenant in the payment of Rent.
29. PARKING. Landlord shall provide Tenant thirty (30) unassigned parking
stalls, at no charge, in the parking area(s) servicing the Building, as outlined
on Exhibit E. The provision of parking stalls under this Lease shall be subject
to such rules and regulations as Landlord and/or Landlord's parking operator may
adopt from time to time. Landlord retains the right to alter such rules and
regulations and to relocate within the area as outlined on Exhibit E, or
reconfigure the parking area in which Tenant's parking stalls are located, with
reasonable notice to Tenant, but Landlord shall at all times continue to provide
the designated number of spaces to Tenant. Tenant shall pay, upon demand by
Landlord, Landlord's costs incurred to stencil any changes to reserved parking
stalls provided to Tenant under this Lease.
30. AUTHORITY. If Tenant is a corporation, each individual executing this
Lease on behalf of Tenant represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of Tenant, in accordance
with a duly adopted resolution of the Board of Directors of Tenant and in
accordance with the bylaws of Tenant, and that this Lease is binding upon Tenant
in accordance with its terms. If Tenant is a partnership, each individual
executing this Lease on behalf of Tenant represents and warrants that he or she
is duly authorized to execute and deliver this Lease on behalf of Tenant, in
accordance with the partnership agreement of Tenant, and that this Lease is
binding upon Tenant in accordance with its terms.
31. GENERAL.
31.1 Headings. Titles to Sections of this Lease are not a part
of this Lease and shall have no effect upon the construction or interpretation
of this Lease.
24
31.2 Heirs and Assigns. All of the covenants, agreements, terms
and conditions contained in this Lease shall inure to and be binding upon the
Landlord and Tenant and their respective heirs, executors, administrators,
successors and assigns.
31.3 No Brokers. Except as provided in Section 1, Landlord and
Tenant represent and warrant to one another that they have not engaged any
broker, finder or other person who would be entitled to any commission or fees
in respect of the negotiation, execution or delivery of this Lease and Landlord
and Tenant shall indemnify and hold one another harmless from and against any
loss, cost, liability or expense incurred by the other party 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.
31.4 Tenant's Financial Statement. Within ten (10) days of
receipt by Tenant of Landlord's written request, Tenant shall deliver to
Landlord a copy of its most recent annual and quarterly financial statements
prepared in accordance with generally accepted accounting principles, including
a balance sheet, income statement, statement of changes in stockholder's equity,
statement of cash flow, accompanying footnotes, and reports of independent
accountants. Landlord shall hold Tenant's financial information in confidence
and agrees to execute a confidentiality agreement if so requested by Tenant.
31.5 Entire Agreement. This Lease contains all covenants and
agreements between Landlord and Tenant relating in any manner to the leasing,
use and occupancy of the Premises, to Tenant's use of the Building and other
matters set forth in this Lease. No prior agreements 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.
31.6 Severability. Any provision of this Lease which shall
prove to be invalid, void or illegal shall in no way affect, impair or
invalidate any other provision hereof and the remaining provisions hereof shall
nevertheless remain in full force and effect.
31.7 Force Majeure. Except for the payment of Rent, time
periods for Tenant's or Landlord's performance under any provisions of this
Lease shall be extended for periods of time during which Tenant's or Landlord's
performance is prevented due to circumstances beyond Tenant's or Landlord's
respective control, including without limitation, strikes, embargoes, shortages
of labor or materials, governmental regulations, acts of God, war or other
strife.
31.8 Right to Change Public Spaces. Landlord shall have the
right at any time without thereby creating an actual or constructive eviction or
incurring any liability to Tenant therefor, to change the arrangement or
location of such of the following as are not contained within the Premises or
any part thereof: entrances, passageways, doors and doorways, corridors, stairs,
toilets and other public portions of the Property. In no event, however, shall
Landlord diminish any service provided by Landlord under this Lease, make any
change which reduces the area of the Premises, make any change which, on other
than a temporary basis, either changes the character of the Building from that
of an office building or materially interferes with Tenant's access to and use
of the Building.
31.9 Governing Law. This Lease shall be governed by and
construed in accordance with the laws of the State of Washington.
31.10 Building Directory. In the event Landlord maintains in the
lobby of Building a directory of tenants, such directory shall include the name
of Tenant and any other names reasonably requested by Tenant in proportion to
the number of listings given to comparable tenants of the Building. Tenant will
also be required to provide suite signage consistent with the Building standard
or subject to Landlord's architects' approval.
25
31.11 Building Name. The Building will be known as International
Gateway or by such name as Landlord may designate from time to time.
31.12 Quiet Enjoyment. Landlord agrees that Tenant, upon paying
the Rent and performing all other terms, covenants and conditions of this Lease
to be performed by Tenant, may quietly have, hold and enjoy the Premises from
and after the Commencement Date until the Expiration Date, subject, however, to
the provisions of Section 11 (Damage Or Destruction), 22 (Condemnation), and to
any sale or Landlord's Mortgage to which this Lease is, or may become,
subordinate.
31.13 Survival. The representations, warranties and
indemnification obligations of the parties to this Lease shall survive the
termination or expiration of this Lease.
31.14 Lender's Consent. The effectiveness of this Lease is
contingent upon and subject to the approval of Landlord's lender.
26
IN WITNESS WHEREOF this Lease has been executed the day and year first
above set forth.
LANDLORD:
XXXXX X. and XXXXXX X. XXXXX
__________________________________________
Date:____________________ Xxxxx X. Xxxxx
__________________________________________
Date:____________________ Xxxxxx X. Xxxxx, by Xxxxx X. Xxxxx, as her
attorney-in-fact
TENANT:
PAC WEST TELECOMM, INC.
Date:____________________ By:_______________________________________
Its:______________________________________
27
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this ______ day of __________________, 1999, before me, a Notary Public
in and for the State of Washington, personally appeared XXXXX X. XXXXX,
personally known to me to be the person who executed this instrument; on oath
stated that he was authorized to execute the instrument as attorney-in-fact for
his wife, XXXXXX X. XXXXX; acknowledged that he signed and sealed the same as
his free and voluntary act and deed for himself and as attorney-in-fact for said
principal for the uses and purposes therein mentioned; and on oath stated that
the Power of Attorney authorizing the execution of this instrument has not been
revoked and that the said principal is now living and is competent.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day
and year first written above.
Printed Name:_____________________________
NOTARY PUBLIC in and for the State of
Washington, residing at __________________
My commission expires:____________________
STATE OF CALIFORNIA )
) ss.
COUNTY OF __________ )
On this _______ day of _________________, 1999, before me, the undersigned,
a Notary Public in and for the State of California, duly commissioned and sworn
as such, personally appeared __________________________________, to me known to
be the _______________ of PAC WEST TELECOMM, INC., the corporation that 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 mentioned, and on oath stated that he/she was authorized to
execute said instrument, and that the seal affixed is the corporate seal of said
corporation.
WITNESS my hand and official seal the day and year in this certificate
first above written.
Printed Name:
NOTARY PUBLIC in and for the State of
California, residing at __________________
28
EXHIBIT A
TO
LEASE AGREEMENT
LEGAL DESCRIPTION
A-1
EXHIBIT B
TO
LEASE AGREEMENT
FLOOR PLAN OF PREMISES
B-1
EXHIBIT B-1
TO
LEASE AGREEMENT
LOCATION OF "MEET-ME ROOM"
B-1-1
EXHIBIT C
TO
LEASE AGREEMENT
LANDLORD'S WORK AND TENANT'S WORK
I. IMPROVEMENTS PROVIDED BY LANDLORD
Construction/Base Building.
Description of 00000 Xxxxxxx Xxxxxxxxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxx:
This facility is a 4-story building meeting the requirements of
Construction Type II, 1 hour, sitting on top of a two-story open parking garage
meeting the requirements of Construction Type I. The parking garage structure
and exterior wall is a concrete frame with pre-cast concrete floors. The
structure for the office building is a braced steel-frame with concrete filled
steel deck floor system. The exterior walls are metal stud framing faced with
Exterior Insulating and Finish System (EIFS). There are areas of aluminum
curtainwall with vision glass and spandrel glass infill. The aluminum windows
have fixed, tinted insulated glass units. The ventilation system is a variable
volume forced air system with packaged roof mounted air handling units providing
heating and air conditioning.
The base Building shell will consist of sheet rocked and fire taped
perimeter walls. The mechanical system will be Tenant's responsibility.
Landlord will provide Tenant with a total of 2000 amps, 480 volts, 3-phase
A/C of electric capacity dedicated to Tenant in the main panel in the Building.
Landlord will provide this service before November 26, 1999.
In addition to the above work at Landlord's cost, Xxxxx Construction, Inc.
will perform the following work at Tenant's cost to be reimbursed to Landlord
through the Tenant Allowance. These costs will be amortized at ten percent
(10%) per annum over the first seven (7) years of the Lease Term, and shall be
paid as Additional Rent.
1) Landlord will design and construct a generator enclosure which will
include a removable front wall with doors and louvers, concrete roof, built-up
roof, acoustical baffles and all panels. The conduit to the Building will also
be provided. Tenant will be responsible for one-half (1/2) of the costs, which
cost to Tenant shall not exceed One Hundred Sixty-eight Thousand Dollars
($168,000). Landlord will provide the generator enclosure before January 26,
2000. If the cost to construct the generator enclosure shall equal One Hundred
Sixty-eight Thousand Dollars ($168,000), this Additional Rent payment shall
equal Two Thousand Eight Hundred Seventy-five and 68/100 Dollars ($2,875.68) per
month for months 1-84 of the Lease Term.
2) Landlord will increase the floor load capacity to one hundred (100)
pounds per square foot and one hundred fifty (150) pounds per square foot in the
areas attached as Exhibit 1. This cost is not to exceed Eighty-five Thousand
Dollars ($85,000). Landlord shall pay Tenant an amount of One Thousand Dollars
($1,000) per day as agreed liquidated damages for each day after October 10,
1999, that the floor capacity increase has not been completed, provided Tenant
has received a permit to construct the Tenant improvements. If the cost to
upgrade the floor load shall equal Eighty-five Thousand Dollars ($85,000), this
Additional Rent payment shall equal One Thousand Four Hundred Fifty-four and
95/100 Dollars ($1,454.95) per month for months 1-84 of the Lease Term.
3) Landlord will perform the roof revision work necessary to accommodate
the 18 mechanical units necessary for Tenant. This work will include adding
plates to strengthen
C-2
existing joints, adding beams to provide anchor points for additional screen
wall posts and braces, increasing the amount of screen wall, and providing
supports and repair roof at 18 mechanical units. This cost is not to exceed One
Hundred Fifteen Thousand Dollars ($115,000) . Tenant will be able to place units
on the roof of the Building by October 15, 1999, subject to a one day Base Rent
penalty for every day late, provided Tenant has received a permit to construct
the Premises. If the cost to perform the roof revisions shall equal One Hundred
Fifteen Thousand Dollars ($115,000), this Additional Rent payment shall equal
One Thousand Nine Hundred Sixty-eight and 47/100 Dollars ($1,968.47) per month
for months 1-84 of the Lease Term.
Except for such Landlord's Work, Landlord shall deliver, and Tenant shall
accept the Premises in its "AS-IS" condition and configuration as provided in
the Lease. Without limiting the foregoing, Landlord shall not be required to
modify or improve the existing heating, exhaust, ventilation or air-conditioning
equipment, to reinforce or level the flooring of the Premises or the existing
electrical system, to accommodate Tenant.
II. CONSTRUCTION OF TENANT IMPROVEMENTS
A. Improvements Constructed by Tenant. If any work is to be performed in
connection with Tenant Improvements on the Premises by Tenant or Tenant's
contractor:
(1) Such work shall proceed upon Landlord's written approval of (i)
Tenant's contractor, (ii) public liability and property damage insurance
satisfactory to Landlord carried by Tenant's contractor, and (iii) detailed
plans and specifications for such work. Landlord's approval of the foregoing
shall not be unreasonably withheld or delayed.
(2) All work shall be done in conformity with a valid building permit
when required, a copy of which shall be furnished to Landlord before such work
is commenced, and in any case, all such work shall be performed in accordance
with all applicable governmental regulations. Notwithstanding any failure by
Landlord to object to any such work, Landlord shall have no responsibility for
Tenant's failure to meet all applicable regulations.
(3) All work by Tenant or Tenant's contractor shall be scheduled
through Landlord.
(4) (i) Tenant or Tenant's contractor shall arrange for necessary
utility, hoisting and elevator service with Landlord's contractor and shall pay
such reasonable charges for such services as may be charged by Landlord's
contractor; (ii) Tenant shall reimburse Landlord upon demand for any sums
expended by Landlord for examination and approval of plans and specifications
for any and all Alterations; and (iii) Tenant shall also pay Landlord a sum
equal to the costs incurred by Landlord during any inspection or supervision of
any and all Alterations.
(5) Tenant shall promptly reimburse Landlord for costs incurred by
Landlord due to faulty work done by Tenant or its contractors, or by reason of
any delays caused by such work, or by reason of inadequate clean-up.
(6) Prior to commencement of any work on the Premises by Tenant or
Tenant's contractor, Tenant and Tenant's contractor shall enter into an
indemnity agreement and a lien priority agreement satisfactory to Landlord
indemnifying and holding harmless Landlord and Landlord's contractor for any
liability, losses or damages directly or indirectly from lien claims affecting
the Land, the Building or the Premises arising out of Tenant's or Tenant's
contractor's work or that of subcontractors or suppliers, and subordinating any
such liens to the liens of construction and permanent financing for the
Building.
C-2
(7) Landlord shall have the right to post a notice or notices in
conspicuous places in or about the Premises announcing its non-responsibility
for the work being performed therein.
If Xxxxx Construction Inc. constructs the Tenant Improvements on behalf of
Tenant, Landlord acknowledges satisfaction of Paragraphs (1)(i), (1)(ii), 3,
4(i), 4(iii), 5, and 6.
B. Tenant's Entry to Premises. Tenant's entry to the Premises for any
purpose, including without limitation, inspection or performance of Tenant
Construction by Tenant's agents, prior to the Commencement Date as specified in
Section 1.6 of the Lease shall be scheduled in advance with Landlord and shall
be subject to all the terms and conditions of the Lease, except the payment of
Rent. Tenant's entry shall mean entry by Tenant, its officers, contractors,
office planner, licensees, agents, servants, employees, guests, invitees, or
visitors.
C. Tenant's Telephone. Tenant is responsible for Tenant's telephone
service. Tenant shall select Tenant's telephone system and shall coordinate its
installation with the Landlord.
D. Tenant's Staging Area. Landlord shall provide Tenant with a staging
area near the Building during the construction of Tenant's Work in a mutually
agreeable area. Tenant agrees to keep this area in a clean and orderly fashion.
C-3
EXHIBIT 1
TO
EXHIBIT C
FLOOR LOAD CAPACITIES
C-4
EXHIBIT C-1
TO
LEASE AGREEMENT
TENANT'S REMOVABLE PROPERTY
Subject to the terms and conditions of this Lease, the fixtures,
improvements, furniture, equipment and other property of Tenant which may be
removed by Tenant from the Premises at the expiration or earlier termination of
this Lease are as set forth below in this Exhibit C-1. No other improvements,
alterations or property shall be removed from the Premises at the expiration or
termination of this Lease except as may be provided otherwise in the Lease or as
may be agreed upon by Landlord and Tenant and added to this Exhibit C-1 by
amendment to this Lease.
1. Upon the termination or expiration of this Lease Tenant, at Tenant's
expense, shall remove all cabling and wiring included within the scope of
Tenant's Work, Landlord's Work, Tenant's Alterations, or which was otherwise
installed by Tenant, from all interstitial/ceiling plenum areas.
2. Furniture, equipment and personal property.
3. HVAC equipment, provided Tenant restores areas to a condition at least as
good as when received and removes all associated work if requested by Landlord,
which may include ducting, electrical runs and enclosures.
4. All ALCATEL/DSC switch equipment and associated peripheral equipment, all
transmission switch equipment, patch panels and associated cables, Co-location
cabinets and associated equipment, all electrical equipment associated with this
equipment and including all battery and UPS power plan equipment. Tenant must
leave the Premises in as good as condition as received, or patch and repair any
damage it creates through such removal.
C-1-1
EXHIBIT D
TO
LEASE AGREEMENT
RULES AND REGULATIONS
1. Any directory provided by Landlord for the Building will be for the display
of the name and location of tenants of the Building, and Landlord reserves
the right to exclude any other names from inclusion in any such directory.
2. Tenant shall not place any new or additional locks on any doors of the
Premises or re-key any existing locks without the prior written consent of
Landlord.
3. Landlord reserves the right to exclude or expel from the common areas any
person who, in the sole judgment of Landlord, is intoxicated, under the
influence of drugs or who shall in any manner violate any of these Rules
and Regulations.
4. Tenant shall not do or permit to be done within the Premises, the building
or parking loading or other adjoining common areas, anything which would
unreasonably annoy or interfere with the rights of other tenants of the
Building.
5. Tenant shall not permit its employees or invitees to loiter in or about the
common areas or obstruct any of the parking, truck maneuvering or other
common areas, or to place, empty or throw away rubbish, litter, trash or
material of any nature upon any common areas.
6. No storage of materials, equipment or property of any kind is permitted
outside the Premises unless otherwise approved in writing by Landlord and
any such property may be removed by Landlord at Tenant's risk and expense.
7. Tenant shall not make or permit any use of the Premises which in the sole
judgment of Landlord, may be dangerous to persons or property; permit any
noise, odor or vibrations to emit from the Premises which are objectionable
to Landlord or other occupants of the Building; or to create, maintain or
permit a nuisance or any violation of any regulation of any governmental
agency thereon.
8. Tenant shall not commit or permit to be committed any waste, damage or
injury to the Premises, the Building or parking, loading and other common
areas adjoining and shall promptly notify Landlord in writing of such
waste, damage or injury and repair the same at its expense.
9. Tenant understands that any equipment required for maintenance of the
Premises is Tenant's responsibility and that Landlord has no equipment
available for Tenant's use therefore (e.g. ladders or lifts for re-xxxxxxx,
etc.).
10. Tenant shall use the Premises and shall operate its equipment on the
Premises in a safe and prudent manner, and any damage or cracks occurring
in the floor of the Premises caused by Tenant shall be promptly brought to
the attention of Landlord by written notice and repaired by Tenant at its
expense.
11. Tenant shall not at any time display a "For Rent" sign upon the Premises.
12. Tenant shall be responsible for keeping a copy of the Lease and Landlord's
current rules and regulations upon the Premises.
D-1
13. Tenant agrees to cause its employees to park only in such designated areas
as may be designated by Landlord from time to time for employee parking and
shall abide by any rules or regulations concerning parking promulgated by
Landlord, or Landlord's agent, from time to time.
14. Tenant shall not waste electricity or water and agrees to cooperate fully
with Landlord to assure the most effective and economical use of utilities
services as may be provided to the Building by Landlord.
15. Tenant shall keep Landlord advised of current telephone numbers of Tenant's
employees who may be contacted in an emergency, i.e., fire, break-in,
vandalism, etc., and shall also post such telephone numbers in a location
which is clearly visible from the exterior of the Premises. If Landlord
shall deem it necessary, in its sole judgment, to respond to such emergency
in Tenant's behalf, Tenant shall pay all costs incurred for services
ordered by Landlord to secure or otherwise protect the Premises and the
contents thereof, including a premium charge for any time spent by
Landlord's employees in responding to such emergency.
16. Tenant shall not smoke, and shall cause its employees, contractors, agents
and invitees to refrain from smoking, in the Building except in such areas
as may be designated as smoking areas by Landlord, if any. In the event
that Tenant desires to allow smoking in its Premises and such smoking is
permitted under applicable laws, then Tenant, at Tenant's sole expense and
subject to the requirements of Section 9 (Improvements And Alterations By
Tenant), shall first take such action as may be necessary to have a smoke
exhaust system installed in the Premises that is acceptable to Landlord.
17. No pets or other animals are permitted on the Property, including the
Premises, at any time except: (i) dogs which are present on the Property or
Premises in their capacity of providing assistance to a disabled person;
and (ii) laboratory animals of tenants leasing laboratory space and
pursuant to terms agreed upon by Landlord in writing prior to such animals
being brought onto the Property.
D-2
EXHIBIT E
TO
LEASE AGREEMENT
PARKING AREA
E-1
EXHIBIT F
TO
LEASE AGREEMENT
EQUIPMENT AND OPERATING RIGHTS
This Exhibit F sets forth certain rights of Tenant and obligations of Landlord
with respect to the installation and operation of equipment and other
improvements in the Premises, the Building and other portions of the Property.
In the event this Exhibit F conflicts with any provision contained in the Lease
or other Exhibit thereto, the terms of this Exhibit F shall control. Nothing
contained in this Exhibit shall be deemed to require Tenant to make any
improvements to the Premises, the Building or other portions of the Property,
and the exercise of any right to Tenant contained herein shall be subject to
Tenant's sole discretion, subject to Landlord's approval of plans and work
through the Lease and Exhibit C. The following specifications are subject to
change, by Tenant based upon Tenant's final engineering plans.
Conduit/Riser Space:
-------------------
a) Tenant shall have the right to construct dual telecommunications entrances
to the Building for the purposes of redundancy. These entrances should be
separated by 100 feet or be located on different walls 50 feet apart. The
construction of such entrances may include the removal and replacement of
curbing and/or sidewalks.
b) Any conduit and cable installed by Tenant shall become the property of
Landlord and shall be surrendered with the Premises upon the expiration of
the Lease, or the cable must be removed if so requested by Landlord.
c) Tenant shall have the right to core drill from the Premises to the lowest
level of the Building necessary to install new conduit. The scheduling of
all core drilling shall be coordinated with Landlord, subject to approval
and construction provisions in the Lease.
HVAC Systems:
------------
a) Tenant shall have the right to install 200 tons of cooling capacity,
through HVAC equipment on the Property outside of the Premises to serve the
Premises, in the approximate location identified or to be identified on
Attachment 1 hereto.
b) Tenant shall have the right to remove or cap any heating system in the
Premises.
c) Tenant shall have the right to install drains for its HVAC equipment.
Electrical Systems:
------------------
a) Landlord shall immediately make available 800 amps with Tenant being
responsible for distribution to the floor. No later than November 26,
1999, Landlord shall provide Tenant with a total of 2000 amps, 480 volts,
3-phase A/C of electric capacity dedicated to Tenant in the main panel room
at Landlord's cost. If Tenant shall require electric capacity in addition
to the above, Tenant, at its expense, shall have the right with Landlord's
cooperation and assistance, to make application directly to the public
utility serving the Building.
b) Tenant shall have the right to install a generator plug on the outside of
the Building in a mutually agreeable location, for the purpose of
connecting the Premises to a portable generator in the event of a Building
power failure.
F-1
c) Tenant shall be provided with adequate space outside of the Building to
install one (1) one meg volt diesel generator in a mutually agreeable
location on the southwest side of the Building.
d) Tenant shall have the right to install an electrical ground in accordance
with its equipment requirements and applicable laws.
e) Tenant shall have the right to place a DC Power Plant with associated
batteries within the Premises.
Structural:
----------
a) Tenant requires floor loading capacity as follows:
Equipment: 000 xxx/xxxxxx xxxxxx foot
Battery: 000 xxx/xxxxxx xxxxxx foot
Office: 00 xxx/xxxxxx xxxxxx foot
b) Tenant shall have the right to reinforce the floor load capacity, if
necessary.
c) Tenant shall have the right to block up, from within the Premises, the
windows in the Premises.
d) Tenant agrees to cooperate with Landlord to reinforce the load capacity of
the floor directly above the Premises. This may include modifying or
adding additional structure in the ceiling of the Premises.
Life Safety:
-----------
a) Tenant shall have the right to install an FM200 fire suppression system
independent of the Building's systems. Such system shall be connected to
the Building's life safety system, if compatible.
b) Tenant shall have the right to convert existing wet pipe sprinkler system
in the Premises to a Dry Pipe pre Action System in accordance with current
codes if approved.
Antenna:
-------
a) Tenant may install, at its expense, a monopole or self supporting microwave
tower as well as related base site cabinets in connection with such antenna
which will require up to 200 square feet of area and up to twelve (12)
conduits measuring approximately 2" in diameter each from such base site
cabinets to the telecommunication entrances of the building. Any
installation shall be subject to Landlord's approval of the size, design,
installation, and appearance, such approval not to be unreasonably withheld
or delayed.
b) Tenant shall have the right to install a mast mounted GPS Antenna on the
roof connected via a 3" conduit to Tenants lease space.
Other:
-----
a) Tenant and its affiliates shall have the right to provide
telecommunications services to other tenants in the building and/or any
other buildings owned by Landlord or its affiliates. Such right shall not
be deemed to be an exclusive right to provide such services and any tenant
shall be free to choose any telecommunication providers of their choice.
b) Tenant shall have the right to place the telecommunications equipment of
its customers on the Premises (i.e. "Co-location" as such term is used in
the telecommunications
F-2
industry) and such Co-location shall not be deemed an assignment or
sublease whether or not a written agreement exists between the parties.
c) Tenant and its affiliates shall have the right to install conduit and fiber
optic cabling to other buildings owned by Landlord.
d) Tenant shall have the right to remove any or all of its equipment,
including generators, HVAC, batteries, UPS systems, etc. at any time during
the term of the lease.
e) Tenant shall have the right to install its own alarm and security system.
This shall include the right to install security card readers for all entry
doors to the space.
F-3
ATTACHMENT 1 TO
EXHIBIT F
LOCATION OF HVAC EQUIPMENT
TO BE PROVIDED
F-4
ATTACHMENT 2 TO
EXHIBIT F
LOCATION OF GENERATOR
TO BE PROVIDED
F-5
EXHIBIT G
TO
LEASE AGREEMENT
LANDLORD'S LIEN WAIVER
TO BE PROVIDED
G-1
EXHIBIT H
TO
LEASE AGREEMENT
MEMORANDUM OF LEASE
AFTER RECORDING RETURN TO:
-------------------------
Xxxx Xxxxx
Xxxxx Corporation
000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
--------------------------------------------------------------------------------
MEMORANDUM OF LEASE
-------------------
This Memorandum of Lease ("Memorandum") is made as of this _______ day of
___________________, 1999, by and between Xxxxx X. and Xxxxxx X. Xxxxx, husband
and wife ("Landlord") as Landlord, and Pac-West Telecomm, Inc., a California
corporation ("Tenant"), as Tenant, who agree as follows:
1. Lease Term and Premises. Landlord has leased to the Tenant, and Tenant
-----------------------
has leased from Landlord, pursuant to a Lease Agreement dated _______, 1999 (the
"Lease"), a portion of the real property located in the City of Tukwila, King
County, Washington, legally described in Exhibit A attached to this Memorandum
---------
(the "Premises"), for an initial term of ten (10) years, commencing November 1,
1999, and ending October 31, 2009. Tenant has two (2) consecutive five (5) year
options to renew the term of the Lease. The provisions of the Lease are
incorporated into this Memorandum.
2. Purpose of Memorandum. This Memorandum is prepared for the purpose of
---------------------
recordation to give notice of the Lease. It shall not constitute an amendment
or modification of the Lease.
Executed as of the date first above written.
LANDLORD: Xxxxx X. and Xxxxxx X. Xxxxx
________________________________
Xxxxx X. Xxxxx
________________________________
Xxxxxx X. Xxxxx by Xxxxx X. Xxxxx, as
her attorney-in-fact
TENANT: Pac-West Telecomm, Inc.
By:_____________________________
Its:____________________________
X-0
XXXXX XX XXXXXXXXXX )
) ss.
COUNTY OF KING )
On this ______ day of __________________, 1999, before me, a Notary Public
in and for the State of Washington, personally appeared XXXXX X. XXXXX,
personally known to me to be the person who executed this instrument; on oath
stated that he was authorized to execute the instrument as attorney-in-fact for
his wife, XXXXXX X. XXXXX; acknowledged that he signed and sealed the same as
his free and voluntary act and deed for himself and as attorney-in-fact for said
principal for the uses and purposes therein mentioned; and on oath stated that
the Power of Attorney authorizing the execution of this instrument has not been
revoked and that the said principal is now living and is competent.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day
and year first written above.
Printed Name:___________________
NOTARY PUBLIC in and for the State of
Washington, residing at______________
My commission expires:_______________
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________ )
On this _____ day of ___________, 1999, before me, the undersigned, a
Notary Public in and for the State of California, duly commissioned and sworn,
personally appeared _____________________________, to me known to be the
________________________ of PAC-WEST TELECOMM, INC., the corporation that
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 mentioned, and on oath stated that he/she was
authorized to execute said instrument, and that the seal affixed is the
corporate seal of said corporation.
WITNESS my hand and official seal the day and year in this certificate
first above written.
__________________________________
NOTARY PUBLIC in and for the State of California,
residing at ________________.
Printed Name:_______________________
My commission expires:______________
H-2
EXHIBIT A
TO
MEMORANDUM OF LEASE
LEGAL DESCRIPTION
EXHIBIT I
TO
LEASE AGREEMENT
SUBORDINATION, NON-DISTURBANCE, ESTOPPEL AND ATTORNMENT AGREEMENT
I-1
