Sample Business Contracts
Washington-Kirkland-12131 113th Avenue NE Lease - Touchstone Building LLC and PortalPlayer Inc.
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
DATED: January 13, 2001.
This Lease (this Lease) is entered into by and between TOUCHSTONE BUILDING LLC, a Washington limited liability company (Landlord), and PORTALPLAYER, INC., a California corporation (Tenant).
|1.||FUNDAMENTAL LEASE PROVISIONS|
1.1 Building, Land and Project: Building means the Touchstone Building at 12131 - 113th Avenue N.E., Kirkland, WA 98034, which is located on the land described in Exhibit A (the Land). The Project means the Land, the Building and the other improvements located thereon from time to time.
1.2 Premises: The area marked on Exhibit B which is located on the second floor of the Building and which is known as Suite 203. The rentable area of the Premises is estimated to be 10,885 square feet. The final rentable area of the Premises will be determined by Landlord pursuant to Section 1.5 below.
1.3 Term: 60 months, plus any partial month at the beginning of the Term.
1.3.1 Option to Extend: One 5 year option as described in the Renewal Option in Rider 1.
1.4 Base Rent: Months referenced are through the applicable full calendar month. Any partial month at the beginning of the lease term shall be calculated at the daily rate for the first full month.
|=||$24,491.25 per month ($27/sq. ft./year)|
|=||$25,398.33 per month ($28/sq. ft./year)|
|=||$26,305.42 per month ($29/sq. ft./year)|
|=||$27,212.50 per month ($30/sq. ft./year)|
|=||$28,119.58 per month ($31/sq. ft./year)|
1.5 Tenants Share of Common Expenses: 10.86% initially, based upon the estimated rentable square footage area of the Premises compared to the rentable square footage area in the Building. If the Premises or Building is measured by Landlord and found to vary from the estimates, Landlord shall adjust the Base Rent and Tenants Share of Common Expenses accordingly. The area of the Premises and the Building shall be determined by Landlord applying uniform measuring standards.
1.6 Permitted Uses: General office uses and for no other purpose.
1.7 Security Deposit: Initially, a Letter of Credit in the amount of $293,895.00. See Section 4.3.
1.8 Projected Commencement Date: March 15, 2001.
1.9 Brokers. (See Section 20.3) Tenants Brokers: David C. Miller of Raskin & Associates, Inc. Landlords Brokers: Jeff Chaney and Keith Honsberger of Kidder, Mathews & Segner, Inc.
1.10 Exhibits: The following exhibits are a part of this Lease.
EXHIBIT A. Legal Description of Land
EXHIBIT B. Floor Plan Showing Premises
EXHIBIT C. Intentionally Omitted
EXHIBIT D. Intentionally Omitted
EXHIBIT E. Intentionally Omitted
EXHIBIT F. Intentionally Omitted
EXHIBIT G. Rules and Regulations
EXHIBIT H. Intentionally Omitted.
EXHIBIT I. Parking Agreement
RIDER 1. Renewal Option
|2.||PREMISES AND COMMON AREAS|
2.1 Premises. Landlord hereby leases the Premises to Tenant on the terms of this Lease, but reserving to Landlord, the use of the exterior thereof, all space above the suspended ceiling, all space beneath the floor, and the right to install, maintain, use, repair, relocate and replace pipes, ducts, conduits and wire leading through the Premises in locations which do not materially interfere with Tenants use thereof. Tenant shall have access 24 hours per day, subject to temporary closures for emergencies and repairs and similar matters outside Landlords control.
2.2 Common Areas. Landlord shall make available from time to time such common areas as Landlord deems appropriate. Tenant shall have the right, in common with the other tenants of the Building, to use the shower facilities on the first floor of the Building, without charge. As part of Common Expenses (as defined in Section 8.1), Landlord is responsible for operating and maintaining the common areas and Landlord may change the size, location, nature and use of any common areas. Tenant has the nonexclusive right to use those common areas which from time to time are designated for such use by Landlord, subject to any rules Landlord may impose. Landlord may close temporarily any common areas to make repairs or changes or to prevent the acquisition of public rights in such areas. In no event shall the roof be considered part of the common areas.
2.3 Parking. The parking ratio at the Building is approximately three and one-half stalls per 1,000 useable square feet. Tenant shall have the right, under the terms of the Parking Agreement attached as Exhibit I to lease 10 reserved covered stalls and there shall be no charge for those reserved stalls during the initial 5 year lease term. All spaces other than the covered stalls will be unreserved and located in the uncovered parking area. Tenant shall not be required to pay any fee for the uncovered, unreserved stalls. If governmental regulations require that the
reserved stalls be allocated to meet Tenants carpool/vanpool requirements, Tenant agrees to do so.
|3.||LEASE COMMENCEMENT DATE|
3.1 Commencement. The Term shall commence (the Commencement Date) 15 days after the date Landlord grants Tenant access to the Premises (the Access Date). The period between the Access Date and the Commencement Date is referred to as the Early Access Period. If the Commencement Date is later than the Projected Commencement Date in Section 1, this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom, provided that if the Commencement Date has not occurred by May 15, 2001, Tenant shall have the right to terminate this Lease by written notice to Landlord given on or before May 31, 2001. The Term shall be for the number of months set forth in Section 1, plus the part of the month, if any, from the Commencement Date through the last day of the month in which the Commencement Date occurs. After the Commencement Date has occurred, Landlord will prepare and Landlord and Tenant will execute an acknowledgement of the Commencement Date and related information. Notwithstanding the foregoing, beginning on the date Tenant is granted access to the Premises, Tenant shall comply with all provisions of this Lease other than the payment of Base Rent and Tenants Share of Common Expenses, including without limitation, the insurance and indemnity requirements. During the Early Access Period, Landlord and Tenant shall both have the right to occupy the Premises, with Landlord performing the work described in Section 5 and Tenant installing its fixtures and equipment.
|4.||RENT & SECURITY DEPOSIT|
4.1 Payment. Commencing on the Commencement Date, Tenant shall pay the Base Rent without setoff or deduction, to Landlords property manager, whose address is set forth in Section 20.9, on the first day of each month, in advance without notice or demand. The Base Rent for any partial calendar month shall be prorated and the Base Rent for the first full calendar month shall be paid upon execution of this Lease.
4.2 Additional Rent. All amounts other than Base Rent due by Tenant to Landlord under this Lease shall be deemed additional rent and Landlord shall have all of the same remedies for Tenants failure to pay additional rent as for failure to pay Base Rent. The term rent shall mean the combined Base Rent and additional rent.
4.3 Letter of Credit. Upon execution of this Lease, Tenant shall deposit with Landlord, at no cost to Landlord, an irrevocable standby letter of credit (the LOC) in favor of Landlord for the account of Tenant in the amount of $293,895.00, issued by a bank or other financial institution acceptable to Landlord (the Bank) as security for the performance by Tenant of the provisions of this Lease. Subject to the provisions of Section 4.5, Tenant shall maintain the LOC in effect at all times during the term of this Lease, including any extension thereof and as long as Tenant has any obligations hereunder. The LOC shall (i) be in form and content acceptable to Landlord, (ii) provide that if Landlord notifies the Bank of a default under this Lease, the Bank shall disburse the amount of the LOC to Landlord, (iii) be issued for a minimum of one year, renewable annually. If Landlord calls on the LOC due to a default by Tenant, the funds shall be applied first to cure the default and the balance shall be held as a
Security Deposit under Section 4.4 and Tenant is required to increase the Security Deposit by the applied amount within 20 days after notice of the amount owed. Tenant shall cause the existing LOC to be extended or renewed for an additional year or a replacement LOC be issued to Landlord and delivered to Landlord at least 30 days prior to the expiration date of the then existing LOC. Simultaneously with delivery of the replacement letter, Landlord shall return the existing LOC to Tenant. If a renewal or replacement LOC is not timely delivered to Landlord, Tenant shall be in default under this Lease, and Landlord shall be permitted to draw the full amount under the LOC. The sole condition to payment by the Bank under the LOCs shall be receipt by the Bank of a written certification from Landlord either (a) that a default has occurred under this Lease which has not been cured within any applicable grace period, or (b) that the existing LOC will expire within 30 days and has not been renewed or replaced by a new LOC which meets the requirements of this Section 4.3.
4.4 Security Deposit. If any cash is deposited with Landlord as a Security Deposit pursuant to Section 4.5, such amounts shall constitute a Security Deposit and if Landlord calls on the LOC, any funds remaining after cure of any then outstanding defaults shall become the Security Deposit, and such amounts shall serve as a security for the performance by Tenant of the provisions of this Lease. Landlord may apply all or part of the Security Deposit to any unpaid rent from Tenant or to cure any other defaults of Tenant. If Landlord uses any part of the Security Deposit, Tenant shall restore the Security Deposit to its original amount within 10 days after Landlords written request. The Security Deposit shall be commingled with Landlords other funds and shall not bear interest. If Landlord transfers its interest in the Premises, Landlord shall transfer the Security Deposit to its successor in interest, whereupon Landlord shall be automatically released from any liability for the return of the Security Deposit, provided that transferee assumes all of Landlords obligation under the Lease regarding return of the Security Deposit. If, at the end of the Lease Term, Tenant has fully cured any defaults under the Lease, then the remaining Security Deposit shall be returned to Tenant after Landlord has verified that Tenant has fully vacated the Premises, removed all of its property and surrendered the Premises in the condition required by this Lease; provided that Landlord may hold back a portion of the Security Deposit until final determination of Tenants share of costs such as insurance and taxes, whereupon any final adjustment shall be made and any remaining Security Deposit shall be returned to Tenant. As with all other defaults, if the Premises are not surrendered in the condition required, Landlord may perform the work necessary to put them in that condition and deduct the cost from the Security Deposit. Landlords obligations with respect to the Security Deposit are those of a debtor and not of a trustee, and Landlord can commingle the Security Deposit with Landlords general funds.
4.5 Reduction/Elimination of LOC. Commencing 12 months after the Commencement Date, if the conditions described in this Section 4.5 are met, Tenant shall have the right to reduce the LOC by 50%. The conditions which must be met are as follows:
(a) Tenant has not been in monetary default under this Lease, irrespective of whether the default was cured within any applicable cure period.
(b) Tenant has not been in non-monetary default under this Lease and failed to cure the default within the applicable cure period.
(c) Tenant provides evidence reasonably acceptable to Landlord that for the immediately preceding two consecutive quarters, Tenant has earned a profit for its owners, after payment of all operating expenses and debt service, as well as preferred returns to investors.
(d) Tenant has a cash balance of operating funds on account in the amount of $2 million or more, which is verified by Landlord and Tenant provides evidence reasonably satisfactory to Landlord that the funds are not pledged as security for any of Tenants obligations and have not been borrowed.
In addition, if the conditions in clauses (a), (b) and (c) are also satisfied 12 months after the 50% reduction occurs, then Tenant may cease posting the LOC with Landlord and Landlord shall return the LOC to Tenant.
Except as specifically set forth in this Section 5, Landlord leases to Tenant and Tenant leases the Premises from Landlord in their existing, AS-IS condition, without warranty of any kind whatsoever. During the Early Access Period, Landlord shall shampoo the carpets, repair any damaged light fixtures and ceiling tiles, and clean the Premises.
|6.||USE AND OPERATIONS|
6.1 Repairs and Maintenance of Premises. Tenant shall keep the Premises, including all equipment and fixtures located inside the Premises, clean and in good order, repair and condition. Tenant shall procure any licenses and permits required for Tenants use. Tenant shall repair any damage to the Premises or Project caused by Tenant, its employees, agents or invitees.
6.2 Signs. So long as Tenant occupies the Premises, Tenant shall have the right, at its cost, to have its business name displayed on any reader board located in the Building lobby and/or in any elevator lobby, and immediately outside the Premises, all in the Building standard size, typeface, materials and locations, which shall be determined by Landlord. Tenant shall not place or display any other sign, notice, picture, placard or poster, or any advertising material whatsoever, visible, either directly or indirectly (as an outline or shadow on a glass pane), from anywhere outside the Premises without first obtaining Landlords written consent, to be granted or withheld in Landlords discretion. Any consent by Landlord shall be upon the condition that Tenant will remove the advertising promptly on Landlords request, and in any event, at the expiration or sooner termination of this Lease, and Tenant shall repair any damage to the Premises or the Project caused thereby.
6.3 Rules and Regulations. Tenant shall comply with any Rules and Regulations established by Landlord regarding the Project (the Rules and Regulations). The current Rules and Regulations are attached as Exhibit G.
6.4 Landlords Right of Access. Tenant shall give Landlord and its agents access to the Premises at all reasonable times, and immediately in an emergency, to enable them to inspect, examine, show for lease or sale, and to make repairs, additions and alterations to the
Premises or the Building. There shall be no reduction of rent and no liability on the part of Landlord due to such access or activities.
6.5 Liens. At its expense, Tenant shall cause to be fully and completely discharged of record, within 10 days of Landlords demand, any labor or materialmans lien claim or other lien or claim filed against the Premises or the Project for work claimed to have been done for, or materials claimed to have been furnished to, or on behalf of, Tenant. Tenant may discharge the lien of record by posting a bond which complies with the statutory requirements for discharge of a lien from the burdened property.
6.6 Comply With Laws. At its expense, Tenant shall comply with all laws, orders, ordinances and regulations of federal, state, or other governmental authorities and with any direction made pursuant to law of any public officer or officers, with respect to the Premises which arise from the specific nature of Tenants use as opposed to a requirement arising from general office uses.
6.7 Not Invalidate Insurance. Tenant shall not do or permit to be done any act or thing upon the Premises which will invalidate or be in conflict with the certificate of occupancy for the Building or the terms of any insurance policies covering the Project or increase the premium for insurance upon the Project. If Landlords insurance premiums are increased because of Tenants activities, then Tenant shall pay the increase, as additional rent, immediately upon demand.
6.8 Insurance. At its expense, Tenant shall obtain and carry at all times during the term of this Lease: (i) commercial general liability insurance covering the Premises on an occurrence basis, with a combined single limit of at least $3,000,000, or such higher amounts as Landlord may from time to time reasonably designate by not less than 30 days notice to Tenant, containing a contractual liability endorsement covering the matters in Section 12; and (ii) fire and extended coverage insurance for Tenants property to its full replacement value. Such policies shall be written by insurers reasonably acceptable to Landlord and shall not contain deductible amounts in excess of $15,000 without Landlords prior written consent. The liability policy shall name Landlord, its mortgagees, the members of Landlord, and Washing Capital Management, Inc., as additional insureds, as their interests may appear. All such insurers shall agree not to cancel or amend (including as to scope or amount of coverage) such policies without at least 30 days prior written notice to Landlord. Tenant shall furnish Landlord with evidence of the required insurance acceptable to Landlord and evidencing the above coverage at all times during the term of this Lease; with new certificates/evidence delivered to Landlord at least 20 days prior to expiration of the coverage.
If Tenant manufactures on the Premises consumer goods using any materials supplied by Landlord (including but not limited to power or water supplied as part of utilities to the Premises), Tenants insurance shall include products liability insurance in the amounts specified for the commercial general liability insurance.
6.9 Surrender. On or before the expiration or termination of this Lease, Tenant shall remove from the Premises: (i) all of its personal property, including any fixtures, equipment and signage; and (ii) any improvements or alterations installed by Tenant which Landlord directs
Tenant to remove. In addition, on or before the expiration or termination of this Lease, Tenant shall: (i) repair any damage to the Premises caused by Tenant, including any damage caused by Tenants removal of personal property, improvements or alterations, and (ii) surrender the Premises in good order and condition, broom clean. If Tenant fails to remove any personal property, Landlord may either have it removed and stored in a public warehouse at the risk of Tenant (the expense of such removal, storage and repairs necessitated by such removal shall be paid by Tenant) or deem them abandoned whereupon they shall become the property of Landlord without payment or offset therefore.
6.10 Americans with Disabilities Act. Tenant shall be responsible for compliance with the Americans with Disabilities Act (the ADA). Landlord, as part of Common Expenses, shall be responsible for the ADA with regard to the common areas and with regard to the initial design and construction of the Tenant Improvements.
|7.||UTILITIES, SERVICES AND MAINTENANCE|
7.1 Utilities. Tenant shall promptly pay for utilities and related services provided to the Premises during the Term, including but not limited to, gas, garbage, water, electricity, telephone, and sewer charges, including repair, replacement, hook-up and installation charges. If any of these utilities or services are not separately metered or billed, Landlord shall allocate the cost among the users and Tenant shall pay its share of the cost within 30 days after receipt of Landlords invoice. Alternately, Landlord may elect to include these types of costs in the Common Expenses.
7.2 Basic Services. Landlord shall provide lamp replacement service for Building standard light fixtures, toilet room supplies, window washing at reasonable intervals, and customary Building janitorial service. Janitorial service shall be provided five days per week excluding service for legal holidays. The costs of any janitorial or other services provided by Landlord to Tenant which are in addition to the services ordinarily provided by Landlord shall be reimbursed by Tenant as additional rent upon receipt of billings therefore.
From 8:00 a.m. to 6:00 p.m. on weekdays and from 9:00 a.m. to 1:00 p.m. on Saturdays excluding legal holidays (Normal Business Hours), Landlord shall furnish to the Premises the heating and air conditioning required in Landlords judgment for the comfortable use and occupancy of the Premises. If requested by Tenant, Landlord shall furnish heating and air conditioning at times other than Normal Business Hours. The charge for after-hours HVAC service is $30.00 per hour, subject to periodic increase by Landlord, and shall be paid by Tenant as additional rent upon receipt of billings therefore.
Landlord shall furnish the Premises with electricity for normal office use, including lighting and operation of customary office machines, and water, both in quantities usually furnished or supplied by Landlord to tenants leasing space in the Building. The mechanical system is designed to accommodate normal and customary heating loads. Before installing lights and equipment in the Premises, which in the aggregate exceed the design of the systems, Tenant shall obtain the written permission of Landlord. Landlord may refuse to grant such permission unless Tenant agrees to pay in advance Landlords costs of installing separate metering and any supplementary air conditioning or electrical systems required by such equipment or lights. In
addition, Tenant shall pay Landlord in advance, as additional rent (except to the extent the costs are billed directly to Tenant through separate metering), on the first day of each month during the Term, the Landlords estimate of the cost of furnishing electricity for the operation of such equipment or lights and Landlords estimate of the cost of operating and maintaining supplementary air conditioning units necessitated by Tenants use of such equipment or lights. Landlord shall be entitled to install and operate, at Tenants cost, a monitoring/metering system in the Premises to measure the added demands on electricity and the HVAC systems resulting from such equipment and lights. Tenant shall comply with Landlords instruction for the use of drapes, blinds and thermostats.
Landlord shall provide such security for the Project as it deems appropriate. During other than Normal Business Hours, Landlord may restrict access to the Building in accordance with the Buildings security system, but during that time, Tenant will continue to have access via keys and card keys.
Landlord shall provide two card keys to the Building and two keys for the corridor door entering the Premises, and additional keys at a charge by Landlord on an order signed by Tenant. All such keys shall remain the property of Landlord. No additional locks shall be allowed on any door of the Premises without Landlords written permission, and Tenant shall not make, or permit to be made, any duplicate keys, except those furnished by Landlord. Upon termination of this Lease, Tenant shall surrender to Landlord all keys and card keys to the Premises.
7.3 Additional Services. If Tenant desires any of the aforementioned services (or items) in amounts in excess of Building standard (other than HVAC service) Landlord will provide those additional services if it is reasonably practical to do so and, Tenant shall be directly billed and shall pay to Landlord as additional rent hereunder, the cost of providing such additional services (or items), upon receipt of billings therefore.
7.4 Interruption of Service. Landlord does not warrant that any utilities or services will be free from interruption including by reason of accident, repairs, alterations or improvements and including by reason of computer design or programming weaknesses or date sensitive microprocessors. Tenant is encouraged to formulate a contingency plan to cover operation of their business in the event of a power failure. No interruption shall be deemed an eviction or disturbance of Tenant, or render Landlord liable to Tenant for damages, or relieve Tenant from the full and complete performance of all of Tenants obligations under this Lease.
7.5 Repair and Maintenance of the Building. Landlord shall be responsible for maintenance and repairs to the portions of the Building which are not Tenants responsibility and the repairs and maintenance to the common areas (the Project Work). Project Work shall include the repair, maintenance and replacement of the roof (both structure and membrane), electrical, plumbing and other mechanical systems and the exterior of the Building. The cost of the Project Work shall be included in Common Expenses pursuant to Section 8.1. Notwithstanding the foregoing, if any of the Project Work is necessitated due to damage caused by Tenant, its agents or employees, Landlord may require Tenant to pay the cost of that work within 10 days of receipt by Tenant of the invoice.
8.1 Definitions. The following terms shall have the following meanings: Common Expenses. Common Expenses shall mean all costs incurred by Landlord in connection with the Project including payroll costs, insurance, management, utilities, Real Property Taxes, Project Work, and any other expenses which in accordance with generally accepted accounting and management practices would be considered an expense of maintaining, managing, operating, owning, or repairing the Project, together with an amount equal to 10% of the total thereof to Landlord for administrative services. Common Expenses shall exclude (i) initial leasing costs including tenant improvements and leasing commissions for other Tenants; and (ii) costs of any special services rendered to individual tenants for which a special charge is collected. Common Expenses shall include amortization (including interest at 12%) of repairs and improvements to the Project which are capitalized.
Real Property Taxes. Real Property Taxes shall mean all taxes, governmental charges and assessments levied on the Project, or any improvements, fixtures and equipment and all other property of Landlord, real or personal, used in the operation of the Project; any taxes in addition to or in lieu of, in whole or in part, such taxes; any tax upon leasing or rents of the Building (including B&O tax); any other governmental charge such as payments for transit, carpooling or environmental facilities; and all costs and expenses incurred by Landlord in connection with the attempt to reduce any of the foregoing, whether by negotiation or contest. Real Property Taxes shall include ULID, CRID and other assessments in effect on the Commencement Date and subsequently arising. Real Property Taxes shall not include any federal income tax, franchise or state income tax, inheritance tax, estate tax, or other similar tax.
8.2 Additional Rent for Common Expenses. Commencing on the Commencement Date, in addition to all other amounts due hereunder and as additional rent, Tenant shall pay Landlord each year Tenants Percentage times the total Common Expenses for that year (Tenants Share of Common Expenses), such payments to be made in accordance with Section 8.3. The amount payable shall be prorated for any partial year in the Lease Term.
8.3 Estimated Payments. Each year, Landlord shall give Tenant written notice of the estimated amount payable by Tenant under this Section for the ensuing year. On or before the first day of each month thereafter, Tenant shall pay Landlord 1/12th of such estimated amounts, provided Landlord may, by written notice to Tenant, revise its estimate whereupon subsequent payments by Tenant for the remainder of the year shall be based upon such revised estimate. After the close of each year during the term of this Lease, Landlord shall deliver to Tenant a statement setting forth the total amount of Tenants Share of Common Expenses for such year, whereupon there shall be a final adjustment between Landlord and Tenant in connection with amounts due Landlord under this Section and Tenant shall pay Landlord any amount due Landlord within 30 days of receipt of such statement, and any amount due Tenant shall be credited to the next accruing amounts due Landlord pursuant to this Section or if the Lease has terminated or expired, such amount shall be credited against any amounts still due Landlord and the balance shall be refunded to Tenant.
8.4 Occupancy Adjustment. If less than an average of 95% of the rentable area of the Building is occupied by tenants during all or any portion of a year, Landlord shall make an
appropriate adjustment of Common Expenses for such year employing sound accounting and management principles, to determine the amount of Common Expenses that would have been incurred if 95% of the rentable area of the Building had been occupied during the entire year.
8.5 Personal Property Taxes. Tenant shall pay, prior to delinquency, all personal property taxes on Tenants property.
Hazardous Materials shall mean anything which may be harmful to persons or property, including, but not limited to, materials designated as a Hazardous Substance pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as now or hereafter amended, 42 USC 9601, et seq., or as a Hazardous Substance, Hazardous Household Substance, Moderate Risk Waste or Hazardous Waste under RCW 70.105.010, or which is regulated by any federal, state, or local law, statute, ordinance or regulation pertaining to health, industrial hygiene or the environment. Tenant shall not store, use, generate, or dispose of any Hazardous Materials in, on or about the Premises, the Building or the Project, other than customary office supplies in normal quantities, handled in compliance with applicable law. Tenant shall be solely responsible for and shall defend and indemnify Landlord against any claims, costs (including attorneys fees), damages and liabilities arising in connection with Tenants Hazardous Materials including, without limitation, the removal, cleanup and restoration work and materials necessary to return the Project and any other property, to their condition existing prior to the appearance of Tenants Hazardous Materials. Tenants obligations under this Section 9 shall survive the expiration or termination of this Lease. Landlord obtained environmental inspections of the Land prior to purchasing it and the reports did not disclose any Hazardous Materials. In addition, none of Landlords construction materials contained asbestos.
10.1 Procedures. Tenant shall not make any alterations in the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld if Tenant agrees to remove the alterations and repair any damage caused thereby at the end of the Term at Landlords request. All alterations shall be made at Tenants sole cost and expense and any contractor or person selected by Tenant to make alterations must first be approved in writing by Landlord. All alterations shall be made in a good and workmanlike manner and in compliance with all governmental requirements. Tenant shall indemnify and defend Landlord from all injury, loss, claims or damage to any person or property in connection with Tenants alterations. Tenant shall repair any damage and perform any necessary clean-up arising in connection with alterations. Tenant shall not use any portion of the common areas in connection with an alteration without the prior written consent of Landlord. All alterations shall, upon expiration or sooner termination of this Lease, become Landlords property, unless Landlord requires that they be removed. If Tenant fails to remove any alterations which Landlord requires to be removed, they will be deemed to be abandoned by Tenant and Landlord may remove them at Tenants expense.
10.2 Mechanics Liens. Tenant shall have no authority, express or implied, to create or place any lien or encumbrance of any kind or nature whatsoever upon, or in any manner to bind, the interest of Landlord in the Premises or the Project or to burden the rent payable hereunder for any claim in favor of any person dealing with Tenant, including those who may furnish materials or perform labor for any construction or repairs, and each such claim shall affect and each such lien shall attach to, if at all, only the leasehold interest granted to Tenant by this instrument. Tenant covenants and agrees that it will cause to be paid all sums payable by it for any labor performed or materials furnished in connection with any work performed on the Premises on which any lien is or can be validly and legally asserted against its leasehold interest in the Premises or the improvements thereon and that it will indemnify Landlord and hold Landlord harmless from any loss, damage or expense arising out of asserted claims or liens against the interest of the Landlord in the Premises or this Lease.
|11.||DAMAGE OR DESTRUCTION|
If the Premises or the Building is damaged by fire, vandalism, malicious mischief or any other occurrence, unless this Lease shall be terminated as hereinafter provided, Landlord shall diligently proceed to repair or restore the basic Building structure and all improvements made or installed by Landlord to the condition in which they existed immediately prior to such destruction or damage, to the extent of the available insurance proceeds (Landlord will carry replacement cost insurance with coverage of at least 80%) and subject to delays which may arise by reason of adjustment of loss under insurance policies and delays beyond the reasonable control of Landlord. Tenant shall fully and completely repair or replace any damage to improvements installed by Tenant and any damage to trade fixtures, furniture or equipment. If the Premises are rendered entirely or partially untenantable, the Base Rent shall proportionately abate until the Landlords repairs are completed unless the damage resulted from the actions or omissions of Tenant, Tenants employees or agents, in which case there shall be no such abatement. If the damage to the Premises or the Building is so extensive that Landlord decides not to repair or rebuild, Landlord shall give Tenant written notice of that decision within 90 days after the damage. Base Rent and other charges shall be adjusted to the date of such damage and Tenant shall thereupon promptly vacate the Premises, the Lease shall terminate and neither party shall have any liability to the other under this Lease for any obligations arising after the termination.
If damage to the Building or Premises prevents Tenant from occupying the Premises for 6 months, Tenant may terminate this Lease by written notice to Landlord given within 30 days after expiration of that 6 month period.
|12.||INDEMNIFICATION AND RELEASE|
12.1 Indemnity. Tenant shall indemnify and defend (using legal counsel acceptable to Landlord and Tenant) Landlord and its mortgagees, agents, and employees from any claims, expenses (including attorneys fees) or damages arising in connection with the occupancy or use of the Premises by Tenant, its agents, customers, or employees (including, without limitation, any work undertaken or contracted for by Tenant). The provisions of this Section 12 shall survive expiration or termination of this Lease and shall include, but not be limited to, all claims against Landlord by any employee or former employee of Tenant, and Tenant agrees that the
provisions of any employee injury insurance act, including Title 51 of the Revised Code of Washington, or any other employee benefit act shall not operate to release Tenant from its obligations under this Section 12.
12.2 Waivers of Subrogation. It is the intention of the parties that each of them shall insure its real and personal property and interests therein, including economic interests, as and to the extent it sees fit. Each of Landlord and Tenant, on behalf of its insurers, waives and releases any right of subrogation for damage to that partys real or personal property located anywhere in, on or about the Project.
12.3 Limitation on Indemnity. In compliance with RCW 4.24.115 as in effect on the date of this Lease, all provisions of this Lease pursuant to which Landlord or Tenant (the Indemnitor) agrees to indemnify the other (the Indemnitee) against liability for damages arising out of bodily injury to Persons or damage to property relative to the construction, alteration, repair, addition to, subtraction from, improvement to, or maintenance of, any building, road, or other structure, project, development, or improvement attached to real estate, including the Premises, (i) shall not apply to damages caused by or resulting from the sole negligence of the Indemnitee, its agents or employees, and (ii) to the extent caused by or resulting from the concurrent negligence of (a) the Indemnitee or the Indemnitees agents or employees, and (b) the Indemnitor or the Indemnitors agents or employees, shall apply only to the extent of the Indemnitors negligence; PROVIDED, HOWEVER, the limitations on indemnity set forth in this Section shall automatically and without further act by either Landlord or Tenant be deemed amended so as to remove any of the restrictions contained in this Section no longer required by then applicable law.
12.4 Definitions. As used in any Section in connection with establishing indemnity or release of Landlord, Landlord shall include Landlord, its partners, officers, agents, employees and contractors, and Tenant shall include Tenant and any person or entity claiming through Tenant.
If the Project is condemned or taken for any public or quasi-public purpose, including any purchase in lieu of condemnation, this Lease shall terminate as of the date of taking of possession for such use or purpose. If a portion of the Project is condemned or taken, (whether or not the Premises be affected), Landlord may, by notice to Tenant, terminate this Lease as of the date of the taking of possession for such purpose. If Landlord does not terminate this Lease, and if the taking results in a reduction in the square footage of the Premises, then the Base Rent shall be reduced pro-rata, and Landlord shall repair the remaining part of the Premises to substantially its former condition to the extent reasonably feasible and complete the work within 6 months after the reduction in the Premises. Landlord shall be entitled to the entire award in any condemnation proceeding, including any award for the value of any unexpired term of this Lease, and shall have the exclusive authority to settle the condemnation proceeding, and the exclusive discretion to grant possession and use to the condemning authority, and Tenant shall have no claim against Landlord or against the proceeds of the condemnation except that Tenant shall have the right to bring a separate action to recover compensation for Tenants moving expenses.
If more than 20% of the area of the Premises is condemned or taken, Tenant may, by notice to Landlord, terminate this Lease as of the date of the taking of possession for such purpose.
|14.||ASSIGNMENT AND SUBLETTING|
14.1 Assignment or Sublease. Tenant shall not assign this Lease or sublet the whole or any part of the Premises (any of which events being a Transfer and any assignee or sublessee being a Transferee) without Landlords prior written consent which shall not be unreasonably withheld if the Transferee meets the requirements in Section 14.7. To assist Landlord in determining whether to consent to a Transfer, Tenant shall submit the following to Landlord, as well as any other information reasonably requested by Landlord, (i) the name and legal entity of the Transferee; (ii) a description of the proposed use of the Premises by the Transferee; (iii) the terms of the proposed Transfer; (iv) current financial statements and the most recent filed federal income tax return of the proposed Transferee; and (v) the proposed Transfer documents. No Transfer shall affect the liability of Tenant under this Lease, and Tenant and its Transferee shall continue to remain liable to Landlord for performance of Tenants and its Transferees obligations under this Lease. Consent to any Transfer shall not operate as a waiver of the necessity of a consent to any subsequent Transfer.
14.2 Entity Ownership. The cumulative transfer of an aggregate of 50% or more of the voting interests in Tenant (stock in a corporation, partnership interests in a partnership, or ownership interests in a limited liability company), including by creation or issuance of new ownership interests of an entity which is (i) Tenant; (ii) an assignee of Tenant; or (iii) an entity which is a general partner in a general or limited partnership which is Tenant or assignee of this Lease (except as the result of transfers by gift or inheritance) shall be deemed a Transfer of this Lease. Notwithstanding the foregoing, Landlord consents to the merger of the original Tenant corporation with a newly formed Delaware corporation for the purpose of facilitating a public offering of stock, provided that (a) the new corporation has at least equal to or greater assets than the original Tenant corporation as of the date of this Lease, (b) the new corporation assumes the obligations of Tenant hereunder, and (c) Tenant provides the assumption to Landlord along with the notice address for the new corporation prior to the merger. The issuance of additional equity shares for the purpose of additional investment in Tenants operation shall not be considered a Transfer.
14.3 Assignee Obligation. Any assignee shall assume all obligations of Tenant and shall be jointly and severally liable with Tenant for the payment of Base Rent, additional rent and all other charges and performance of all of Tenants obligations under this Lease. Any sublessee shall assume all obligations of Tenant to the extent they relate to the subleased premises. Tenant shall provide Landlord duplicate originals of all instruments of assignment, sublease or assumption. If the Transferee defaults, Landlord may, without affecting any other rights of Landlord, proceed against Tenant or any Transferee or any other person liable for Tenants obligations hereunder.
14.4 Fees. Any request for consent to a Transfer shall be accompanied by payment of a non-refundable fee of $500 to compensate Landlord for the administrative burden of
processing the request. In addition, Tenant shall reimburse Landlord for any out-of-pocket costs incurred by Landlord in connection with the request.
14.5 Assignment to Affiliate. Notwithstanding the above provisions, Tenant shall not be required to obtain Landlords consent to assign the Lease to a company wholly owned by Tenant or a company under common control with Tenant but Tenant will provide to Landlord a copy of the assignment document for its records prior to the effective date of the assignment.
14.6 Assignment/Subletting Income. Any amounts payable by an assignee to Tenant which exceed the Rent payable by Tenant hereunder, whether in the form of assignment fees or increased Base Rent or otherwise, shall be immediately paid on to Landlord as additional rent; provided that Tenant shall be permitted to deduct amortization of Tenants out of pocket costs for the assignment, spread over the remaining lease term. Any amounts payable by a sublessee which exceed, on a per square foot basis, the rent due from Tenant hereunder shall be immediately paid on to Landlord; provided that Tenant shall be permitted to deduct amortization of Tenants out of pocket costs for the sublease, amortized over the sublease term .
14.7 Transfer Standards. The following requirements must be met before Landlord will be required to not unreasonably withhold its consent to a Transfer:
(a) Transferees uses (i) are consistent and compatible with the other uses in the Building and with operation of a first class office building; (ii) do not increase the risk of damage or wear and tear on the Building; (iii) do not require increased utility service or increased services from Landlord or changes in the Premises which are not consistent with general office uses;
(b) Either (i) the financial resources of Portalplayer, Inc. has not significantly declined since the date of this Lease, or (ii) Transferees financial status and creditworthiness is comparable to other tenants of similar amounts of space in the Building.
14.8 Landlords Recapture Right. In lieu of granting consent to any proposed Transfer, Landlord reserves the right to terminate this Lease or, in the case of subletting of less than all the Premises, to terminate this Lease with respect to such portion of the Premises, as of the proposed effective date of such Transfer, in which event Landlord may enter into the relationship of landlord and tenant with such proposed Transferee. Notwithstanding the forgoing, Landlords recapture right shall not apply to the Transfers described in Section 14.2 above.
|15.||INSOLVENCY AND DEFAULT|
15.1 Defaults. If: (i) Tenant fails to pay any installment of Base Rent or other charges hereunder when due, or (ii) Tenant fails to perform any other covenant, term, agreement or condition of this Lease, or (iii) a Financial Distress Default occurs, then, if the default is not cured within the cure periods set forth below, Landlord may, immediately or at any time thereafter, elect to terminate this Lease by notice, by lawful entry or otherwise, whereupon Landlord shall be entitled to recover possession of the Premises from Tenant and those claiming through or under Tenant. Tenant shall have 10 days after notice of monetary default to cure the default. Tenant shall have 15 days after notice of a non-monetary default to cure the default;
provided that if the default cannot be cured within 15 days, then Tenant shall be granted such additional time to cure the default as is reasonably necessary if Tenant commences the cure within the 15 day period and diligently pursues the cure to completion. Termination of this Lease and any repossession shall be without prejudice to any remedies Landlord has for arrears of rent or for a prior breach of any of the provisions of this Lease.
In case of such termination, Tenant shall indemnify Landlord against all costs and expenses including the amounts due under Section 15.2 and loss of rent. If Tenant fails to perform any of Tenants covenants which Tenant has failed to perform at least twice previously in any 12-month period (although Tenant shall have cured any such previous breaches after notice from Landlord, and within the notice period), then Landlord may thereafter, without further notice, exercise any remedies permitted by this Section 15 or by law, including but not limited to termination of this Lease.
15.2 Expense Recovery. Items of expense for which Tenant shall indemnify Landlord shall include but not be limited to: (i) all costs and expenses incurred in collecting amounts due from Tenant under this Lease or obtaining Tenants compliance with this Lease (including attorneys fees); (ii) the unamortized portion of (a) leasing commissions paid in connection with this Lease, and (b) all costs incurred by Landlord for tenant improvements in order to re-let the Premises (such amortization to be based on a straight line basis over the initial Term with interest at 12%); and (iii) all Landlords other costs proximately caused by the termination. The above sums shall be due and payable immediately upon notice from Landlord without regard to whether the cost or expense was incurred before or after the termination of this Lease. If proceedings are brought under the Bankruptcy Code, including proceedings brought by Landlord, which relate in any way to this Lease (in any of such cases a Proceeding), then Landlord shall be paid the costs incurred by Landlord in connection with the Proceedings.
15.3 Damages. Notwithstanding termination of this Lease and reentry by Landlord pursuant to Section 15.1, Landlord shall be entitled to recover from Tenant:
15.3.1 The worth at the time of an award (including interest at the rate set forth in Section 15.7), of any unpaid rent which had been earned by Landlord prior to the time of termination; plus
15.3.2 The worth at the time of an award (including interest at the rate set forth in Section 15.7), of the amount by which the unpaid rent which would have been earned after termination until the time of an award exceeds the amount of loss of rent that Tenant proves could have been reasonably avoided; plus
15.3.3 The worth at the time of an award of the amount by which the unpaid rent and additional rent for the balance of the term of this Lease (as extended, if at all prior to termination) exceeds the amount of such loss of rent and additional rent that Tenant proves could have been reasonably avoided (including interest at the rate set forth in Section 15.7 from the date of the award until paid). Such worth of the time of award shall be computed at the discount rate of the Federal Reserve Bank of San Francisco, or successor Federal Reserve Bank, on the date of termination; plus
15.3.4 Any other amount necessary to compensate Landlord for all the damage proximately caused by Tenants failure to perform Tenants obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including amounts due and payable pursuant to Section 15.2.
15.4 Non-Termination of Lease. No act of Landlord other than a written declaration of termination of Lease shall serve to terminate this Lease. If Landlord reenters the Premises pursuant to Section 15.1 or Section 15.2, and does not elect to terminate this Lease, Tenant shall indemnify Landlord for the loss of rent by a payment at the end of each month during the remaining Term representing the difference between the Base Rent, and other charges which would have been paid in accordance with this Lease and the rental actually derived from the Premises by Landlord for such month. Separate actions may be maintained by Landlord against Tenant from time to time to recover any damages which, at the commencement of any action, are then due and payable to Landlord under this Section 15 without waiting until the end of the Term of this Lease.
15.5 Reletting. If Tenants right of possession has been terminated (with or without termination of this Lease), Landlord may at any time, and from time to time, relet the Premises in whole or in part either in its own name or as agent of Tenant for any period equal to or greater or less than the remainder of the then-current Term. All rentals received by Landlord from such reletting shall be applied first to the payment of any amounts other than rent due hereunder from Tenant to Landlord; second, to the payment of any costs and expenses of such reletting and of alterations and repairs; third, to the payment of rent and additional rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent and additional rent as they become due hereunder. Upon a reletting of the Premises, Landlord shall not be required to pay Tenant any sums received by the Landlord in excess of amounts payable in accordance with this Lease.
15.6 Right of Landlord to Cure Defaults. If Tenant defaults under this Lease, Landlord may cure the default, at Tenants expense, immediately and without notice in case of emergency, or in any other case only upon Tenants failure to remedy such default within 15 days after Landlord notifies Tenant in writing of such default. Tenant shall reimburse Landlord for any costs of the cure with interest pursuant to Section 15.7. Landlord shall have the same rights and remedies as for the non-payment of sums due under this Section 15 as in the case of default by Tenant in the payment of rent or additional rent.
15.7 Unpaid Sums and Service Charge. Any amounts owing from Tenant to Landlord under this Lease shall bear interest at 15% per annum, calculated from the date due or expended until the date of payment. In addition, if any payment of rent, or other charges, is not paid within 10 days of its due date, Tenant shall pay a late charge equal to the greater of $150 or 10% of the overdue amount as liquidated damages for Landlords extra expense and handling of such past due account.
15.8 Financial Distress.
15.8.1 Definition. Each of the following shall be an Event of Financial Distress and shall represent a default under this Lease unless cured within the cure periods set
forth below: (a) the making by Tenant of any general assignment or general arrangement for the benefit of creditors; the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy; (b) the appointment of a trustee or a receiver to take possession of all or any part of Tenants assets; or (c) the entry of any final judgment against Tenant. Tenant shall immediately notify Landlord upon the occurrence of any Event of Financial Distress. Tenant shall have 60 days to cure a default under clause (a) above by having the petition dismissed. Tenant shall have 30 days to cure a default under clause (b) above by having the trustee or receiver dismissed or otherwise regaining possession of Tenants assets. Tenant shall have 30 days to cure a default under clause (c) above by having the judgment discharged or satisfied. If the particular Event of Financial Distress is not eliminated within the time periods provided above, then the provisions of Section 15.8.2 shall apply.
15.8.2 Filing of Petition. If a petition (Petition) is filed by or against Tenant (as either debtor or debtor-in-possession) under Title 11 of the United States Code (the Bankruptcy Code) and same is not dismissed within 60 days thereafter:
(a) Adequate protection for Tenants Lease obligations accruing after filing of the Petition shall be provided within 15 days after filing in the form of a deposit equal to one months Base Rent and Additional Rent (in addition to the security deposit), to be held by the court or an escrow agent approved by Landlord and the court.
(b) All amounts payable by Tenant to Landlord under this Lease represent reasonable compensation for the occupancy of the Premises by Tenant.
(c) Tenant or Trustee shall give Landlord at least 30 days written notice of any abandonment of the Premises or proceeding relating to administrative claims. If Tenant abandons without notice, Tenant or Trustee shall stipulate to entry of an order for relief from stay to permit Landlord to reenter and relet the Premises.
(d) If Tenant was in default under the Lease before the filing of the Petition, whether or not Landlord has given Tenant written notice of that default and whether or not any cure period expired before filing the Petition, Tenant shall be deemed to have been in default on the date the Petition was filed for all purposes under the Bankruptcy Code.
(e) For purposes of Section 365(b)(1) of the Bankruptcy Code, prompt cure of defaults shall mean cure within 30 days after assumption and shall include cure of any defaults under any other agreements between Landlord and Tenant.
(f) For the purposes of Section 365(b)(1) the Bankruptcy Code, adequate assurance of future performance of this Lease by Tenant, Trustee or any proposed assignee of the Lease will require that Tenant, Trustee or the proposed assignee deposit 2 months of Base Rent and Additional Rent payments into an escrow fund (to be held by the court or an escrow agent approved by Landlord and the court) as security for such future performance. In addition, if the Lease is to be assigned, adequate assurance of future performance by the proposed assignee shall require that: (i) the assignee have a tangible net worth not less than $1,000,000 or that such assignees performance be unconditionally guaranteed by a person or entity that has a tangible
net worth not less than the above amount; (ii) assignee assume in writing all of Tenants obligations under the Lease.
(g) If Tenant or Trustee intends to assume and/or assign the Lease, Tenant or Trustee shall provide Landlord with 30 days written notice of the proposed action, separate from and in addition to any notice provided to all creditors. Notice of a proposed assignment and assumption shall state the assurance of prompt cure, compensation for loss and assurance of future performance to be provided to Landlord. Notice of a proposed sale shall state: (i) the name, address, and federal tax identification numbers and registration numbers of the proposed assignee; (ii) all of the terms and conditions of the proposed assignment, and (iii) the assignees proposed adequate assurance of future performance to be provided to Landlord.
Landlord covenants that upon Tenants paying Base Rent, Additional Rent, and all other charges due hereunder and performing all obligations of this Lease on its part to be performed, Tenants occupancy shall not be interrupted by those claiming under Landlord, subject, however, to the terms and conditions of this Lease.
17.1 Landlords Liability. The liability of Landlord to Tenant shall be limited to the interest of Landlord in the Project (and the proceeds thereof). Tenant agrees to look solely to Landlords interest in the Project (and the proceeds thereof) for the recovery of any judgment against Landlord, and Landlord and its partners shall not be personally liable for any such judgment or deficiency after execution thereon or matters related to this Lease. In addition, if Landlord sells or otherwise transfers the Project to a new owner, the transferring Landlord shall not thereafter be named or sought after in any matter related to the Project. Upon transfer of ownership of the Project, Landlords obligations under this Lease shall automatically transfer to the new owner.
17.2 Tenants Business Interruption. Notwithstanding any other provision of this Lease, and to the fullest extent permitted by law, Tenant hereby agrees that Landlord shall not be liable for injury to Tenants personal property or its business or any loss of income therefrom, whether such injury or loss results from conditions arising upon the Premises or the Project, or from other sources or places including, without limitation, any interruption of services and utilities described in Section 7 or any casualty, condemnation, or from any cause whatsoever, including, date sensitive microprocessors, and regardless of whether the cause of such injury or loss or the means of repairing the same is inaccessible to Landlord or Tenant. Tenant may elect, at its sole cost and expense, to obtain business interruption insurance with respect to such potential injury or loss.
|18.||SUBORDINATION AND ESTOPPEL|
18.1 Subordination. This Lease shall be subordinate to any financing now existing or hereafter placed upon any of the Project by Landlord, and to any and all advances to be made thereunder and to interest thereon and all modifications thereof (each, a Mortgage). This provision shall be self-operative. Tenant shall execute and deliver any subordination agreement
required by the holder of a Mortgage, but only if any such subordination agreement provides that so long as Tenant is not in default under this Lease, Tenant shall have the continued enjoyment of the Premises free from any disturbance or interruption by any holder of a Mortgage or any purchaser at a foreclosure or private sale of the Project.
18.2 Attornment. If Landlords interest in the Premises is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, Tenant shall attorn to the transferee of or successor to Landlords interest in the Premises and recognize such transferee or successor as Landlord under this Lease. Tenant waives the protection of any statute or rule of law which gives or purports to give Tenant any right to terminate this Lease or surrender possession of the Premises upon the transfer of Landlords interest.
18.3 Estoppel Certificates. Tenant shall, within 10 days of demand, execute and deliver to Landlord a written statement certifying: (i) the commencement and the expiration date of the Term; (ii) the amount of Base Rent and the date to which it has been paid; (iii) that this Lease is in full force and effect and has not been assigned or amended in any way (or specifying the date and terms of each agreement so affecting this Lease) and that no part of the Premises has been sublet (or to the extent such is not the case, a copy of any sublease); (iv) that Landlord is not in default under this Lease (or if such is not the case, the extent and nature of such default); (v) on the date of such certification, there are no existing defenses or claims which Tenant has against Landlord (or if such is not the case, the extent and nature of such defenses or claims); (vi) the amount of the Security Deposit held by Landlord; and (vii) any other fact or representation that a mortgagee or purchaser may reasonably request. It is intended that any such statement shall be binding upon Tenant and may be relied upon by a prospective purchaser or mortgagee. If Tenant fails to respond within 10 days of receipt of a written request by Landlord therefor, (a) Tenant shall be deemed to have given a certificate as above provided, without modification, and shall be conclusively deemed to have admitted the accuracy of any information supplied by Landlord to a prospective purchaser or mortgagee, and (b) Landlord may impose a fee of $100 per day for each day of delay in providing the statement by Tenant after the 10 day period.
If Tenant fails to surrender possession of the Premises upon termination or expiration of this Lease, and if Tenant obtains Landlords written consent to Tenants continued occupancy, then Tenants occupancy shall be deemed to be a month to month tenancy, with Base Rent due at a rate one and one half times the rate payable by Tenant hereunder during the calendar month immediately preceding such termination or expiration (the Latest Rate) and Landlord may terminate such month to month tenancy upon 30 days notice to Tenant. If Tenant fails to surrender possession of the Premises upon termination or expiration of this Lease and if Tenant does not obtain Landlords written consent to Tenants continued occupancy, then Tenant shall be deemed a trespasser and shall be liable to Landlord for all damages sustained by Landlord as a result thereof, together with Base Rate at a rate double the Latest Rate.
20.1 Heirs and Assigns. Subject to provisions hereof restricting transfers, all of the terms contained in this Lease shall inure to the benefit of and be binding upon Landlord and
Tenant and their respective heirs, executors, administrators, successors and assigns. If more than one person or entity executes this Lease as Tenant, the liability of each shall be deemed to be joint and several.
20.2 Non-Waiver. Failure of Landlord to insist, in any one or more instances, upon strict performance of any term of this Lease, or to exercise any option herein contained, shall not be construed as a waiver or a relinquishment for the future, of such term or option, but the same shall continue and remain in full force and effect. The receipt by Landlord of rent or other payments with knowledge of a breach of any of the terms of this Lease by Tenant shall not be deemed a waiver of such breach. Landlord shall not be deemed to have waived any provision of this Lease unless expressed in writing and signed by Landlord. Tenant specifically acknowledges and agrees that, where Tenant has received a notice to cure default, no acceptance by Landlord of rent shall be deemed a waiver of such notice, and, including but without limitation, no acceptance by Landlord of partial rent shall be deemed to waive or cure any rent default. Landlord may, in its discretion, after receipt of partial payment of rent, refund same and continue any pending action to collect the full amount due, or may modify its demand to the unpaid portion. In either event the default shall be deemed uncured until the full amount is paid in good funds.
20.3 Brokers. Except as specified in Section 1, Tenant represents and warrants to Landlord, it has not engaged any broker, finder or other person entitled to any commission or fee in respect of the negotiation, execution or delivery of this Lease, and Tenant shall indemnify and defend Landlord against any claims for such commission arising out of agreements made or alleged to have been made by or on behalf of Tenant. Except as specified in Section 1, Landlord represents and warrants to Tenant, it has not engaged any broker, finder or other person entitled to any commission or fee in respect of the negotiation, execution or delivery of this Lease, and Landlord shall indemnify and defend Tenant against any claims for such commission arising out of agreements made or alleged to have been made by or on behalf of Landlord. Landlord and Tenant recognize that it is possible that they may hereafter make additional agreements regarding further extension or renewal of this Lease or a new lease or leases for all or one or more parts of the Premises or other space in the Project for a term or terms commencing after the Commencement Date of this Lease. Landlord and Tenant recognize that it is also possible that they may hereafter modify this Lease to add additional space or to substitute space as part of the Premises. If any such additional agreements, new leases or modifications to this Lease are made, or if Tenant exercises any options to extend the lease term, Landlord shall not have any obligation to pay any compensation to any real estate broker or to any other third person engaged by Tenant to render services to Tenant in connection with negotiating such matters, regardless of whether under the circumstances such person is or is not regarded by the law as an agent of Landlord.
20.4 Entire Agreement. This Lease contains the entire agreement of the parties with respect to the subject matter hereof and no representations, promises or agreements, oral or otherwise, between the parties not embodied herein shall be of any force or effect. No provisions of this Lease may be changed, waived, discharged or terminated orally, but only by instrument in writing executed by Landlord and Tenant concurrently with or subsequent to the date of this Lease.
20.5 Inability to Perform. If Landlord is unable to perform, or is delayed in performing, any of its obligation under this Lease, for reason of acts of God, accidents, breakage, repairs, maintenance, strikes, lockouts, other labor disputes, inability to obtain utilities or materials, or by any other reason beyond Landlords reasonable control, then no such inability or delay by Landlord shall constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Base Rent or additional rent, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of the inconvenience, annoyance, interruption, injury or loss to or interference with Tenants business or use and occupancy or quiet enjoyment of the Premises or any loss or damage occasioned thereby.
20.6 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.
20.7 Tenants Audit Right. Tenant shall have the right to audit the current years expense statement issued by or on behalf of Landlord by written notice given to Landlord within 60 days after receipt of that statement. Such audit shall be conducted in the offices of Landlords property manager at the cost of Tenant. Tenant shall pay to the property manager its standard hourly rates for the time spent by the property managers principals and employees in connection with Tenants audit. Tenant shall keep all of the information disclosed in the course of such audit confidential, and shall require all of its consultants to agree in writing directed to the Landlord to keep all such information confidential. Tenant agrees that such audits shall not be permitted to be conducted on a contingency fee basis.
20.8 No Accord or Satisfaction. Payment by Tenant or receipt by Landlord of a lesser amount than the rent and other charges stipulated herein shall be deemed to be on account of the earliest stipulated rent or other charges. No endorsement or statement on any check or any letter accompanying any payment shall be deemed an accord and satisfaction, and Landlords acceptance of such check or payment shall be without prejudice to Landlords right to recover the balance of the amount due or pursue any other remedy to which it is entitled.
20.9 Notices. All notices under this Lease shall be in writing and sent by courier, by registered or certified mail, return receipt requested, or recognized overnight courier at the following addresses:
Rent: Checks are to be made payable to Landlords property manager, Integrated Real Estate Services, L.L.C. and sent to:
Integrated Real Estate, L.L.C.
P.O. Box 3588
Seattle, WA 98124
Building Operations: Notices related to building operations are to be sent to:
Touchstone Building LLC
c/o Integrated Real Estate Services, L.L.C.
1015 Third Avenue, Suite 950
Seattle, Washington 98104
For all other issues, notices are to be sent to:
Touchstone Building LLC
1301 Fifth Avenue, Suite 3636
Seattle, WA 98101
Attn.: Sunjeev Kumar, Vice President
At the Premises
or such other single address as may hereafter be designated by either party in writing. Notices shall be deemed given if mailed by registered or certified mail 3 days after deposit in the U. S. Mail, postage prepaid and if sent by overnight courier, the date after deposit with the courier. If the intended recipient receives the notice at the address required by this Section 20.9 but refuses to accept it, the notice shall be deemed received on that day of rejection. Tenant hereby appoints as its agent to receive the service of all dispossessory or distraint proceedings and notices thereunder the person in charge of or occupying the Premises at the time, and, if no person shall be in charge of occupying the same, then such service may be made by attaching the same to the entrance of the Premises.
20.10 Waiver of Self-Help. Tenant waives any statutory or common law right to selfhelp, including any right to make repairs to the Building or common areas.
20.11 Tax on Rent. The rent herein is exclusive of any sales, business and occupation, gross receipts or other tax based on rents, or tax on Tenants property or tax upon or measured by the number of employees of Tenant, or any similar tax or charge. If any such tax or charge be hereinafter enacted and imposed upon Landlord, Tenant shall pay Landlord the amount thereof concurrently with each monthly rent payment. If it shall not be lawful for Tenant to reimburse Landlord, the monthly rent payable to Landlord under this Lease shall be revised to net Landlord the same net rental after imposition of any such tax or charge upon Landlord as would have been payable to Landlord prior to the imposition of such tax or charge. Tenant shall not be liable to reimburse Landlord for any federal income tax or other income tax of a general nature applicable to Landlords income.
20.12 Right to Change Public Spaces. Landlord reserves the right at any time, without thereby creating an actual or constructive eviction or incurring any liability to Tenant, to change the arrangement or location of public areas of the Project not contained within the
Premises or any part thereof, including entrances, passageways, parking lots and other public service portions of the Project.
20.13 Consent. Notwithstanding anything contained in this Lease to the contrary, Tenant shall have no claim, and hereby waives the right to any claim against Landlord for money damages by reason of any refusal, withholding or delaying by Landlord of any consent, approval or statement of satisfaction, and in such event, Tenants only remedies therefore shall be an action for specific performance, injunction or declaratory judgment, to enforce any right to such consent.
20.14 Financial Statements. Upon request by Landlord, Tenant shall provide to Landlord copies of Tenants most recent financial statements and tax returns, and Landlord agrees to keep the information confidential.
20.15 Costs and Attorneys Fees. In the event of litigation between the parties hereto, declaratory or otherwise to enforce this Lease, the non-prevailing party shall pay the costs thereof and attorneys fees actually incurred by the prevailing party, in such suit, at trial and on appeal. In addition, if Landlord engages counsel to enforce the terms of this Lease, including without limitation, for the purpose of preparing a delinquency notice, Tenant shall be required to reimburse Landlord for all costs incurred before the subject default is considered cured.
20.16 No Reservation or Option. The submission of this Lease for examination, or for execution by Tenant, does not constitute a reservation or option to Lease the Premises and this Lease becomes effective as a lease only upon execution and delivery thereof by Landlord and Tenant.
20.17 Prior Understandings. Tenant acknowledges that neither Landlord nor anyone representing Landlord has made statements of any kind whatsoever on which Tenant has relied in entering into this Lease including, without limitation, statements to the effect that any number of Tenants or any specific Tenant or Tenants will operate in the Building during the Lease Term. Tenant further acknowledges that Tenant has relied solely on its independent investigation and its own business judgment in entering into this Lease. Landlord and Tenant agree that: this Lease supersedes all prior and contemporaneous understandings and agreement; the provisions of this Lease are intended by them as the final expression of their agreement; this Lease constitutes the complete and exclusive statement of its terms; and no extrinsic evidence whatsoever may be introduced in any judicial proceeding involving this Lease. No provision of this Lease may be amended except by an agreement in writing signed by the parties hereto or their respective successors in interest, whether or not such amendment is supported by new consideration.
20.18 Authority. If Tenant is a corporation, each individual executing this Lease on behalf of said corporation represents and warrants that he/she is duly authorized to execute and deliver this Lease on behalf of said corporation. Concurrently with the execution of this Lease, Tenant shall deliver to Landlord a certified copy of a resolution of the Board of Directors of said corporation authorizing the execution of this Lease. If Tenant is a partnership, each individual executing this Lease on behalf of said partnership represents and warrants that he/she is duly authorized to execute and deliver this Lease on behalf of said partnership and that this Lease is
binding upon said partnership in accordance with its terms, and concurrently with execution of this Lease, Tenant shall deliver to Landlord such evidence of authorization as Landlord may require. If Tenant is a marital community, or a member of a marital community, both members of the marital community shall execute this Lease. Where Tenant is comprised of more than one person or entity, all covenants, agreements and obligations of Tenant hereunder shall be the joint and several covenants, agreements and obligations of each person or entity comprising Tenant.
20.19 Relocation. Landlord shall have a one time option to relocate Tenant to other space of approximately the same size elsewhere in the Building, exercisable on 30 days written notice to Tenant. If Landlord exercises the option, (a) Landlord will arrange for the movers and pay all costs of the move, including but not limited to the reprinting of stationary and including the cost of reconnecting the phone lines, and (b) a new floor plan shall be attached to this Lease and become a part hereof, and (c) all other provisions of this Lease shall remain in full force and effect. The move shall not occur in the last 12 months of the Lease Term. Landlord agrees that this right to relocate Tenant will not be exercised prior to Tenants move into the Premises described on Exhibit B.
20.20 Force Majeure. Time periods for Landlords or Tenants performance under any provisions of this Lease (except for the payment of money) shall be extended for periods of time during which the non-performing partys performance is prevented due to circumstances beyond the partys control, including, without limitation, strikes, embargoes, governmental regulations, inclement weather and other acts of God, war or other strife.
20.21 Landlord Acting Through Agent. Any action permitted or required of Landlord under this Lease may, at Landlords election, be performed by Landlords property manager on Landlords behalf.
20.22 Utility Deregulation. Tenant acknowledges that Landlord shall have sole control over the determination of what utility providers serve the Project, and Landlord shall have no obligation to give access or easement rights or otherwise allow onto the Project any utility providers except those approved by Landlord in its discretion. If, for any reason, Landlord permits Tenant to purchase utility services from a provider other than Landlords designated company(ies), such provider shall be considered a contractor of Tenant and Tenant shall indemnify defend and hold Landlord harmless from such providers acts and omissions while in, or in connection with their services to, the Building or Project in accordance with the terms and conditions of Section 12.1. In addition, Tenant shall allow Landlord to purchase such utility service from Tenants provider at Tenants rate or at such lower rate as can be negotiated by the aggregation of Landlords tenants requirements for such utility.
20.23 Clean Air Act. Tenant acknowledges that Landlord has not made any portion of the Premises or the Building accessible for smoking in compliance with WAC 296-62-12000 and that no smoking is permitted in the Building.
20.24 Choice of Law and Venue. This Lease shall be governed by Washington law and the parties agree that venue shall lie in King County, Washington.
TOUCHSTONE BUILDING LLC,
a Washington limited liability company
|By:||Washington Capital Management, Inc., as Investment Manager for Locals 302 and 612 International Union of Operating Engineers Employers Construction Industry Retirement Fund, and as Investment Manager for the Washington Capital Joint Master Trust Real Estate Equity Fund Managing Member|
/s/ Cory Carlson
Director, Equity Real Estate
a California corporation
/s/ Don Pacholec
CFO & COO