HomeMy WebLinkAboutCAG2023-102 - Original - J&J Creekside, LLC - Valley Narcotics Enforcement Team Office Space @ 20415 72nd Ave S #215, Kent - 11/01/2022Ap
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Originator:Department:
Date Sent:Date Required:
Authorized to Sign:
Director or Designee
Date of Council Approval:
Grant? Yes No
Type:
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Comments:
Date Routed to the City Clerk’s Office:
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Vendor Name:Category:
Vendor Number:Sub-Category:
Project Name:
Project Details:
Agreement Amount:
Start Date:
Basis for Selection of Contractor:
Termination Date:
Local Business? Yes No*
Business License Verification: Yes In-Process Exempt (KCC 5.01.045)
If meets requirements per KCC 3.70.100, please complete “Vendor Purchase-Local Exceptions” form on Cityspace.
Notice required prior to disclosure?
Yes No
Contract Number:
Agreement Routing Form
For Approvals, Signatures and Records Management
This form combines & replaces the Request for Mayor’s Signature and Contract Cover
Sheet forms.
Visit Documents.KentWA.gov to obtain copies of all agreementsadccW22373_1_20
Budget Account Number:
Budget? Yes No
Dir Asst:
Sup/Mgr:
Dir/Dep:
rev. 20210513
FOR CITY OF KENT OFFICIAL USE ONLY
(Optional)
* Memo to Mayor must be attached
Lease Agreement Cover Sheet—Page 1 of 5
CITY CLERK
CITY OF KENT
220 4th Avenue South
Kent, WA 98032
Fax: 253-856-6725
PHONE: 253-856-5725
Lease Agreement Cover Sheet
Instructions
This document is to be used in lieu of the Contract Cover Sheet
SECTION 1 – CONTRACT PROCESSING AND TENANT SET-UP:
All lease agreements must be signed by the Mayor or his/her designee and approved
by the City Council. Lease amendments, extensions, renewals, and assignments may
or may not require Council approval (contact the Law Department), but they must be
signed by the Mayor.
The City Clerk’s Office will perform the following tasks associated with all lease
agreements and amendments:
Assign a sequential lease agreement number based on starting with 001 and
preceded with “L”, e.g. L001.
Scan the Lease Agreement Cover Sheet, Lease Agreement (or Amendment) and,
if any, related supporting documentation into the document imaging system.
Provide notification via e-mail to the Contact Person (Question 2), Law and
Customer Services.
The Lease Agreement Cover Sheet is to be completed for each existing and active and
all subsequent lease agreements, lease amendments and assignments of lease. There
is recognition that certain existing and active agreements and amendments may not
incorporate new policies, e.g. commencement of the lease on the 1 st of the month or
year. Those agreements and amendments will be addressed through subsequent
agreements and/or amendments, if any.
Contract Number:
1. Responsible Department/Division: Kent Police Depart/Valley Narcotics
Enforcement Team
2. Contact Person and Title: Jalene King-Admin Assist /JoAnne Moen-VNET Office
Manager
Lease Agreement Cover Sheet—Page 2 of 5
Telephone Extension: Jalene #5890 / JoAnne 206-764-3640
3. Tenant (Customer) Name: J&J Creekside, LLC
4. Tenant (Customer) Number: 2493236
5. General Ledger Account Number: 68102810.64520, 68102820.64520 or
16010038.64520.3264
6. King County Tax Parcel Number: 0122049012
7. Address of Parcel: 20415 72nd Ave S, Suite 215, Kent WA 98032
8. Type of Lease: Office Space
9. Council Authorization Date: N/A
10. Mayor Signature Date: N/A
SECTION 2 – LEASE DURATION AND IMPORTANT DATES:
All lease agreements and amendments must reflect the lease start date, lease
termination date and the duration of the lease. The lease agreement may also authorize
the tenant to request an extension of the lease term, i.e. either “month to month” or
for a defined period of time. The tenant must provide advanced written notice of the
intent to exercise this lease option.
A date certain lease start date must be established in the lease agreement and must be
the first of the month. Commencement of certain leases may be predicated on certain
actions by the tenant, e.g. installation of cellular tower equipment. In such instances,
a reasonable fixed future date must be established in the lease agreement.
11. Lease Start Date: November 1, 2022
12. Tenant Lease Option Renewal Notification Due Date: N/A
13. Lease Termination Date: December 31, 2027
14. Lease Duration: 61 months
Lease Agreement Cover Sheet—Page 3 of 5
SECTION 3 – RENT DETERMINATION AND DUE DATE:
Lease agreement must include provisions establishing the stated rent and, if over one
year in length, modification of stated rent. Typically, rental increases are based on
changes in the Consumer Price Index. Example of possible contract language:
Effective as of each anniversary of the Commencement date (the
“Adjustment Date”) by an amount equal to the greater of four (4)
percent or the percentage increase in the CPI two (2) months prior
to the Adjustment Date and the CPI for the month 12 months prior
to the Adjustment Date. “CPI” means the Consumer Price Index –
All Urban Consumers, (Seattle-Tacoma-Bremerton, WA), All Items,
base period 1982-84=100, Not Seasonally Adjusted, issued by the
U.S. Bureau of Labor Statistics. If the CPI is converted to a different
standard reference base, or otherwise revised, the adjustment set
forth in this paragraph shall be made with the use of the conversion
formula published by the U.S. Bureau of Labor Statistics.
15. Rent:
16. Rent Due Date: 1st of every month
17. Calculation of Rental Increase(s): see above chart
Lease Agreement Cover Sheet—Page 4 of 5
SECTION 4 – LEASEHOLD EXCISE TAX:
Leasehold excise tax applies to the possession and use of publicly owned real property
by a private sector individual, business or other organization. This tax is calculated
based on 12.84 percent of the contract rent amount. See also Department of Revenue
Leasehold Excise Tax Frequently Asked Questions and Answers
(http://dor.wa.gov/docs/Pubs/IndustSpecific/Leasehold.pdf). Contact the Customer
Services Financial Analyst (LIDs/Receivables) or the Audit Manager regarding questions
in this area.
18. Is this lease subject to leasehold excise taxes?
YES (go to Question 19)
NO, reason: Not publicly owned real property
19. Are leasehold excise taxes for this tenant centrally assessed, i.e. directly
collected from the tenant by the Washington State Department of
Revenue?
YES (attach written verification received directly from DOR or indirectly
through the tenant, e.g. DOR notification letter)
NO (go to Question 20)
20. Does Lease Rent include Leasehold Excise Tax?
(Leasehold taxes must be broken out on the invoice and coded: Business
unit.32500.0303)
YES Calculate the leasehold excise tax (Stated Rent divided by 1.1284)
NO Calculate the leasehold excise tax (Stated Rent times .1284)
SECTION 5 – APPLICABLITY OF UTLITIES:
The Lease agreement must include provisions establishing responsibility for payment of
utilities, including but not limited to electricity, natural gas, water, sewer, storm
drainage, and garbage collection and disposal services.
In certain instances, the utility service may not be applicable, e.g. septic system, or
may not be provided by the City, e.g. Highline Water District service area. In all
instances, City utilities will be billed through the Customer Services utility billing system.
Other utilities paid by the City on behalf of the tenant, e.g. electricity or natural gas,
will be invoiced to the tenant through the central accounts receivable system (JD
Edwards).
Lease Agreement Cover Sheet—Page 5 of 5
Electricity or natural gas charges may be established based on actual consumption, e.g.
usage of a meter or by a reasonable amount established through appropriate financial
analysis. Separate meters for measurement should not be established on City-owned
or leased properties. The dollar amount of electric and natural gas charges must be
included in the lease agreement (amendment) and should be subject to future
modification based on appropriate methodologies, e.g. change in rate, etc.
Contact Finance Customer Services for questions in this area, as well as ensuring that
City accounts are transferred into the name of the tenant.
21. Applicability of Utilities – Check all that utilities that are affected and
indicate provider (e.g. City of Kent), Account Number or basis of
exclusion.
Does Not Apply
Water:
Sewer:
Drainage:
Garbage:
Electricity/Natural Gas:
Ensure that Finance Customer Services is properly notified to ensure City utility account,
if any, is recorded into the name of the tenant if so established in the Agreement.
Ensure all other applicable charges are properly invoiced to the tenant.
SECTION 6 – MONETARY PENALTIES AND LATE INTEREST CHARGES:
Lease agreement should contain provisions establishing penalties and must contain
provisions establishing late interest charges. Late interest (also referred to as “finance
charges”) should be consistent with Chapter 3.10 of the Kent City Code, i.e. currently
1% of the amount of the unpaid balance or $2.00, whichever is greater, if not paid
within 30 days from the due date.
22. Monetary Penalties: 5% of the delinquent payment if not paid by 5 days of due
date.
23. Late Interest: 12%
SECTION 7 – OTHER LEASE CONSIDERATIONS:
N/A
LEASE AGREEMENT
BETWEEN
J & J CREEKSIDE, LLC,
A WASHINGTON LIMITED LIABILITY COMPANY,
AS LANDLORD,
Mot17
VALLEY NARCOTICS ENFORCEMENT TEAM,
A WASHINGTON MULTIAGENCY DRUG TASK FORCE FORMED BY
INTERLOCAL AGREEMENT
AS TENANT,
DATED:' 2022
The submission of this Lease by Landlord, its broker, agent or representative, for examination or
execution by Tenant, does not constitute an option or offer to lease the Premises upon the terms
and conditions contained herein or a reservation of the Premises in favor of Tenant; it being
intended hereby that notwithstanding the preparation of space plans and/or tenant improvements
plans, etc., and/or the expenditure by Tenant of time and/or money while engaged in negotiations
in anticipation of it becoming the Tenant under this Lease, or Tenant's forbearing pursuit of other
leasing opportunities, or even Tenant's execution of this Lease and submission of same to
Landlord, that this Lease shall become effective and binding upon Landlord only upon the
execution hereof by Landlord and its delivery of a fully executed counterpart hereof to Tenant. No
exception to the foregoing disclaimer is intended, nor shall any be implied, from expressions of
Landlord's willingness to negotiate in good faith with respect to any of the terms and conditions
contained herein.
J&J Creekside, LLC
BASIC LEASE INFORMATION
Lease Date: 2022
Landlord: J & J CREEKSIDE, LLC, a Washington limited liability company
Tenant: VALLEY NARCOTICS ENFORCEMENT TEAM, a Washington
multiagency drug task force formed by interlocal agreement
Premises: Approximately 3,287 rentable square feet in Suite 1/215 (the
"Premises"), on the second (2" d) floor of the building commonly known
as Creekside Office Park, Building 1, with a street address of 20415 72" d
Ave S, Kent, WA (the "Building"). The Building consists of 72,901
rentable square feet. The Premises are outlined on the floor plan
attached to the Lease as Exhibit A.
Land/Project: The land on which the Building is located (the "Land") is described on
Exhibit B attached hereto. The terns "Project" shall collectively refer
to the Building and the two (2) other existing buildings located at the
Creekside Office Park, the Land and the driveways, the Parking Facility
(as defined in Exhibit E attached hereto), and similar improvements and
easements associated with the foregoing or the operation thereof. The
Project consists of 218,697 rentable square feet.
Term: Sixty -One (61) full calendar months (the "Term"), starting on the
Commencement Date and ending at 5:00 p.m. local time on the last day
of the sixty-first (61") full calendar month following the
Commencement Date (the "Expiration Date"), subject to adjustment
and earlier termination as provided in the Lease, and extension of the
Tenn as set forth in, and in accordance with, Exhibit I attached hereto.
Commencement Date: The date that is the earlier of (a) the date that Landlord's Work is
Substantially Completed or (b) the date that Landlord's Work would
have been Substantially Completed except for Tenant Delays (as such
terms are defined in the attached Exhibit D) (the "Commencement
Date").
Basic Rent: Basic Rent shall be the following amounts for the following periods of
time (the "Basic Rent"):
J&J Creekside, LLC
Time Frame
Base Rent per square
Monthly Base Rent
foot er annum
Commencement Date —Month 12*
$15.75*
$4,314.19*
Month 13 — Month 24
$16.50
$4,519.62
Month 25 — Month 36
$17.25
$4,725.06
Month 37 — Month 48
$18.00
$4,930.50
Month 49 — Month 60
$18.75
$5,135.94
Month 61
$19.50
$5,341.38
*Subject to abatement for the first initial full calendar month of the Term on the terms,
and subject to the conditions set forth in Exhibit H attached hereto.
Security Deposit: $8,088.76 (the "Security Deposit")
Rent: Basic Rent, Additional Rent (as defined below), and all other sums that
Tenant may owe to Landlord or otherwise be required to pay under the
Lease (the "Rent").
Permitted Use: General office use for the Valley Narcotics Enforcement Team of which
the City of Kent is a member (the "Permitted Use").
Tenant's Proportionate Share: 1.5% of the Project and 4.5% of the Building (the
"Tenant's Proportionate Share"), which is the percentage obtained by
dividing (a) the number of rentable square feet in the Premises as stated
above by (b)as applicable, 218,697 rentable square feet (for the Project)
or 72,901 rentable square feet (for the Building). Landlord and Tenant
stipulate that the number of rentable square feet in the Premises,
Building and Project as set forth above is conclusive and shall be
binding upon them, except as otherwise set forth in this Lease.
Initial Liability Insurance
Amount: Five Million Dollars ($5,000,000.00)
J&J Creekside, LLC
Tenant's Address: Prior to the Commencement Date:
220 4'h Avenue South
Kent, WA 98032
Following the Commencement Date:
220 41h Avenue South
Kent, WA 98032
Landlord's Address: For all Notices:
J & J Creekside, LLC
405 110 Ave SE, Suite 300
Bellevue, WA 98004
Attention: Jordan Lott, Manager
With a copy to:
J & J Creekside, LLC
405 114'h Ave SE, Suite 300
Bellevue, WA 98004
Attention: Legal
Landlord's Address: For Payment of Rent:
J & J Creekside, LLC
405 114`h Ave SE, Suite 300
Bellevue, WA 98004
Attention: Accounting
(206)770-4652
J&J Creekside, LLC
TABLE OF CONTENTS
1. Definitions and Basic Provisions........................................................
2. Lease Grant; Common Areas..............................................................
(a) Lease Grant.............................................................................
(b) Common Areas.......................................................................
3. Lease Ter..........................................................................................
4. Rent.....................................................................................................
(a) Payment...................................................................................
(b) Operating Costs; Taxes ...........................................................
(c) Additional Costs, Charges; Tenant Taxes ...............................
5. Delinquent Payment; Handling Charges .............................................
6. Security Deposit..................................................................................
7. Landlord's Obligations.......................................................................
(a) Services...................................................................................
(b) Excess Utility Use...................................................................
(c) Landlord's Repairs.................................................................
(d) Restoration of Services; Abatement .......................................
8. Improvements; Alterations; Repairs; Maintenance ...........................
(a) Improvements; Alterations.....................................................
(b) Repairs; Maintenance.............................................................
(c) Performance of Work.............................................................
(d) Mechanic's Liens...................................................................
9. Use.....................................................................................................
10. Assignment and Subletting................................................................
(a) Transfers................................................................................
(b) Consent Standards..................................................................
(c) Request for Consent...............................................................
(d) Recapture Right.....................................................................
(e) Conditions to Consent............................................................
(f) Attornment by Subtenants......................................................
(g) Additional Compensation......................................................
11. Insurance; Waivers; Subrogation; Indemnity ....................................
(a) Tenant's Insurance.................................................................
(b) Landlord's Insurance.............................................................
(c) No Subrogation; Waiver of Property Claims .........................
Page
2
3
1U,
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.......... I I
..........13
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..........19
..........19
(i) J&J Creekside, LLC
(d) Waiver............................................................. .......................................................
20
(e) Indemnities.............................................................................................................20
12.
Subordination; Attornment; Notice to Landlord's Mortgagee...........................................21
(a) Subordination.........................................................................................................21
(b) Attornment.............................................................................................................21
(c) Notice to Landlord's Mortgagee............................................................................21
(d) Landlord's Mortgagee's Protection Provisions.....................................................21
13.
Rules and Regulations........................................................................................................22
14.
Condemnation....................................................................................................................23
a Total Taking
23
(b) Partial Taking — Tenant's Rights...........................................................................23
(c) Partial Taking — Landlord's Rights........................................................................23
d Temporary Taking
23
(e) Award.....................................................................................................................23
15.
Fire or Other Casualty........................................................................................................23
(a) Repair Estimate.. ....................................................................................................
23
(b) Tenant's Rights......................................................................................................24
(c) Landlord's Rights...................................................................................................24
(d) Repair Obligation...................................................................................................24
(e) Abatement of Rent.................................................................................................24
16.
Personal Property Taxes....................................................................................................24
17.
Events of Default...............................................................................................................25
(a) Payment Default.....................................................................................................25
(b) Abandonment.........................................................................................................25
(c) Subordination.........................................................................................................25
(d) Estoppel..................................................................................................................25
(e) Insurance................................................................................................................25
(1) Mechanic's Liens...................................................................................................25
(g) Misrepresentation...................................................................................................25
(h) OFAC/FCPA Representation.................................................................................25
(i) Other Defaults........................................................................................................26
Insolvent
26
18.
Remedies............................................................................................................................26
(a) Termination of Lease.............................................................................................26
(b) Termination of Possession.....................................................................................26
(c) Perform Acts on Behalf of Tenant.........................................................................27
19.
Payment by Tenant; Non -Waiver; Cumulative Remedies.................................................27
(a) Payment by Tenant................................................................................................27
(b) No Waiver..............................................................................................................27
(c) Cumulative Remedies............................................................................................27
(ii) J&J Creekside, LLC
20,
Surrender of Premises........................................................................................................28
21.
Holding Over.....................................................................................................................28
22.
Certain Rights Reserved by Landlord................................................................................29
(a) Building Operations...............................................................................................29
(b) Security..................................................................................................................29
(c) Current and Prospective Insurers, Purchasers, Investors and Mortgagees
............29
(d) Prospective Tenants...............................................................................................29
23.
Intentionally deleted...........................................................................................................30
24.
Signage...............................................................................................................................30
25.
Telecommunications and Communications.......................................................................30
(a) Tenant's Telecommunications Providers...............................................................30
(b) Cable Work............................................................................................................31
(c) Landlord's Reserved Rights...................................................................................31
(d) Removal Obligations.............................................................................................32
26.
Miscellaneous....................................................................................................................32
(a) Landlord Transfer..................................................................................................32
b Liability
32
(c) Force Majeure........................................................................................................34
(d) Brokerage...............................................................................................................34
(e) Estoppel Certificates..............................................................................................34
(0 Notices...................................................................................................................34
(g) Separability............................................................................................................35
(h) Amendments; Binding Effect; No Electronic Records..........................................35
(i) Quiet Enjoyment....................................................................................................35
0) No Merger..............................................................................................................35
(k) Entire Agreement...................................................................................................35
(1) Waiver of Jury Trial...............................................................................................35
(m) Governing Law......................................................................................................35
n Recording
36
(o) Water or Mold Notification...................................................................................36
Joint and Several Liability
36
(q) Financial Reports...................................................................................................36
(r) Landlord's Fees......................................................................................................36
s Confidentiality
36
(t) Authority................................................................................................................
37
(u) Hazardous Materials..............................................................................................37
(v) List of Exhibits.......................................................................................................38
(w) OFAC/FCPA Representation.................................................................................38
(x) Survival of Obligations..........................................................................................38
(Y) Reasonable Efforts.................................................................................................39
(z) Landlord Default....................................................................................................39
(aa) Business Days........................................................................................................39
(bb) Terms; Captions.....................................................................................................39
(iii)
J&J Creekside, LLC
(cc)
Counterparts...........................................................................................................39
(dd)
Access Control.......................................................................................................39
(cc)
Matters of Record..................................................................................................40
(ff)
Cannabis.................................................................................................................40
(gg)
Dogs.......................................................................................................................40
(iv) J&J Creekside, LLC
Acceptable Change ..................................
Acceptable Changes .................................
Additional Insureds ..................................
Additional Rent ........................................
Affiliate....................................................
Alterations................................................
Basic Lease Information ..........................
BasicRent ................................................
blocked person .........................................
Building...................................................
Building's Structure .................................
Building's Systems ..................................
Business Days ..........................................
Cable Problems ........................................
CableWork ..............................................
Cable(s)....................................................
Casualty...................................................
Claims......................................................
Commencement Date ...............................
Common Areas .......................................
Comparable Buildings ............................
Comparison Leases ..................................
DamageNotice .......................................
DefaultRate ............................................
Disabilities Acts ......................................
Event of Default ......................................
Exercise Notice .......................................
Expiration Date .......................................
Extension Option ....................................
Hazardous Materials ...............................
Holidays..................................................
HVAC.....................................................
include.....................................................
includes...................................................
including.................................................
Land........................................................
Landlord..................................................
Landlord Parties ......................................
Landlord Party ........................................
Landlord's Mortgagee .............................
Law.........................................................
Laws........................................................
Lease.......................................................
MoneyRates ...........................................
Mortgage.................................................
(v)
J&J Creekside, LLC.
Page(s)
ObjectionNotice.............................................................................................................................
7
ObjectionPeriod.............................................................................................................................
7
OperatingCosts...............................................................................................................................
4
Operating Costs and Tax Statement................................................................................................
6
OptionTerm........................................................................................................................
Exhibit I
OriginalTenant...............................................................................................................................
1
Parking Facility
Exhibit G
PermittedUse..................................................................................................................................
ii
Premises...........................................................................................................................................
i
PrimaryLease...............................................................................................................................
21
PrimeRate.....................................................................................................................................
26
ProhibitedPerson..........................................................................................................................
38
Project..............................................................................................................................................
i
PropertyManagement Office.............................................................................................
Exhibit C
QualifiedAppraiser.............................................................................................................
Exhibit I
Rent.................................................................................................................................................
ii
RepairPeriod................................................................................................................................
24
Review............................................................................................................................................
6
ReviewNotice.................................................................................................................................
6
SDNs.............................................................................................................................................
38
SecurityDeposit..............................................................................................................................
ii
ServiceFailure..............................................................................................................................
I 1
Taking...........................................................................................................................................
23
Taxes...............................................................................................................................................
5
TelecommunicationsServices......................................................................................................
30
Tenant.................................................................................................................................
1, 26, 39
TenantParking Passes.......................................................................................................Exhibit
G
TenantParties.................................................................................................................................
1
TenantParty....................................................................................................................................
1
Tenant's Accountant.......................................................................................................................
7
Tenant's Off -Premises Equipment..................................................................................................
1
Tenant's Proportionate Share..........................................................................................................
ii
Term.................................................................................................................................................
i
TheLaw of Real Estate Agency...................................................................................................
34
Transfer.........................................................................................................................................
15
(vi) J&J Creekside, LLC
LEASE
This Lease Agreement (this "Lease") is entered into as of this _ day of 12022
between J & J CREEKSIDE, LLC, a Washington limited liability company ("Landlord"), and the
CITY OF KENT, a Washington municipal corporation ("Tenant").
1. Definitions and Basic Provisions. The definitions and basic provisions set forth in
the Basic Lease Information (the "Basic Lease Information") are incorporated herein by reference
for all purposes. Additionally, the following terms shall have the following meanings when used in
this Lease: "Affiliate" means any person or entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the party in question;
"Building's Structure" means the Building's exterior walls, roof, elevator shafts, footings,
foundations, structural portions of load -bearing walls, structural floors and subfloors, and structural
columns and beams; `Building's Systems" means the Building's HVAC (as defined below), security,
life -safety, plumbing, electrical, and mechanical systems; "Comparable Buildings" means first class
office buildings in the Kent, Washington area; "include", "includes" or "including" shall be deemed,
as the context indicates, to be followed by the words "but (is/are) not limited to" or "without
limitation'; "Laws" means all federal, state, and local laws, codes, ordinances, rules, requirements
and regulations, all court orders, governmental directives, and governmental orders and all
interpretations of the foregoing, and all restrictive covenants and conditions affecting the Project, and
"Law" means any of the foregoing; "Tenant's Off -Premises Equipment" means any of Tenant's
equipment or other property that may be located on the grounds of the Project (other than inside the
Premises); and "Tenant Parties" means all of the following persons: Tenant; any assignees claiming
by, through, or under Tenant; any subtenants claiming by, through, or under Tenant; and any of their
respective agents, contractors, employees, licensees, guests and invitees, and "Tenant Party" means
any of the foregoing. "Original Tenant" means the Tenant originally named in this Lease.
"Landlord Parties" means all of the following persons: Landlord, Landlord's Mortgagees (as
defined below), and any of their respective partners, members, directors, officers, trustees,
shareholders, successors and assigns, agents, employees, independent contractors, licensees, guests
and invitees, and "Landlord Party" means any of the foregoing.
2. Lease Grant; Common Areas.
(a) Lease Grant. Subject to the terms of this Lease, Landlord leases to Tenant,
and Tenant leases from Landlord, the Premises. The outline of the Premises is set forth in Exhibit A
attached hereto. The parties hereto hereby acknowledge that the purpose of Exhibit A is to show the
approximate location of the Premises in the Building, only, and such Exhibit is not meant to constitute
an agreement, representation or warranty as to the construction of the Premises, the precise area
thereof or the specific location of the Common Areas, or the elements thereof or of the access ways
to the Premises or the Project.
(b) Common Areas. Tenant shall also have the non-exclusive right to use in
common with Landlord and any other tenants of the Project those portions of the Project that are
provided by Landlord from time to time for use in common with Landlord and the other tenants of
the Project, such as entrances, lobbies, restrooms, landscaped areas, ground floor corridors, elevators
and elevator foyers, loading and unloading areas, plazas, ramps, drives, stairs, and access ways and
service ways, and building amenities such as the exercise facility and training room (collectively, the
"Common Areas"). Landlord may in its sole discretion from time to time elect to expand, contract,
improve, alter, change or reduce the Common Areas.
(c) Notwithstanding any provision of this Lease to the contrary, Landlord
specifically reserves the right to redefine the term "Project" for purposes of allocating and
calculating Operating Costs so as to include or exclude areas as Landlord shall from time to time
determine or specify (and any such determination or specification shall be without prejudice to
Landlord's right to revise thereafter such determination or specification). In addition, Landlord shall
have the right to contract or otherwise arrange for amenities, services or utilities (the cost of which
is included within Operating Costs) to be on a common or shared basis to both the Project (i.e., the
area with respect to which Operating Costs are determined) and adjacent areas not included within
the Project, so long as the basis on which the cost of such amenities, services or utilities is allocated
to the Project is determined on an arms -length basis or some other basis reasonably determined by
Landlord. In the case where the definition of the Project is revised for purposes of the allocation or
determination of Operating Costs, Tenant's Proportionate Share shall be appropriately revised to
equal the percentage share of all rentable area contained within the Project (as then defined)
represented by the Premises. The rentable area of the Premises and Project is subject to adjustment
by Landlord from time to time to reflect any remeasurement thereof by Landlord's architect, at
Landlord's request, and/or as a result of any additions or deletions to the Project, the Land or any of
the buildings in the Project as designated by Landlord. Landlord shall have the sole right to determine
which portions of the Project and other areas, if any, shall be served by common management,
operation, maintenance and repair. Landlord shall also have the right, in its sole discretion, to
allocate and prorate any portion or portions of the Operating Costs on a building -by -building basis,
on an aggregate basis of all buildings in the Project, or any other reasonable manner, and if allocated
on a building -by -building basis, then Tenant's Proportionate Share shall, as to the portion of the
Operating Costs so allocated, be based on the ratio of the rentable area of the Premises to the rentable
area of the Building. Landlord shall have the exclusive rights to the airspace above and around, and
the subsurface below, the Premises and other portions of the Building and Project.
3. Lease Term.
(a) Term. The terms and conditions and provisions of this Lease shall be effective
as of the date of this Lease. The Commencement Date, Expiration Date and Term of this Lease shall
be as set forth in the Basic Lease Information of this Lease. Landlord shall deliver possession of the
Premises to Tenant in its as -is condition as of the Commencement Date, subject to Landlord's
obligations under Exhibit D. Tenant acknowledges that Landlord has not agreed to perform, and shall
not be obligated to perform, any improvements or alterations to the Premises or Project whatsoever,
except as set forth in Exhibit D. If the Commencement Date is delayed or otherwise does not occur
on the Estimated Commencement Date set forth in above in the Basic Lease Information, this Lease
shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting
therefrom. Upon or following the Commencement Date, Landlord may prepare and deliver to Tenant
a commencement letter in the form of the attached Exhibit G to set forth such date and such other
information as Landlord may request ("Commencement Letter'), which Tenant shall acknowledge
by executing a copy and returning it to Landlord. If Tenant fails to sign and return the
Commencement Letter to Landlord within ten (10) days of its receipt from Landlord, the
Commencement Letter as sent by Landlord shall be deemed to have correctly set forth the
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Commencement Date and the other matters addressed in the Commencement Letter. Failure of
Landlord to send the Commencement Letter shall have no effect on the Commencement Date.
(b) Early Access. Landlord shall use commercially reasonable efforts to allow
Tenant to be present on the Premises during the fourteen (14) days prior to the Commencement Date
(`Early Possession") solely for purposes of installing furniture, fixtures and equipment, provided
that (i) Tenant shall not interfere with Landlord's construction of Landlord's Work and shall
coordinate with Landlord's activities and comply with Landlord's reasonable directives, and (ii) all
provisions of the Lease other than those relating to payment of Rent shall apply to any such pre -
commencement occupancy (including specifically without limitation all provisions relating to
insurance, indemnity and freedom from liens). Tenant shall provide Landlord with copies of
certificates of insurance, complying in all respects with the terms of this Lease, for all insurance
required to be provided hereunder prior to entering the Premises. Tenant hereby releases and
discharges Landlord, its contractors, agents, employees and manager from and against any and all
claims of loss, damage or injury to persons or property, including without limitation any product
inventory, which is alleged to have occurred during the period of Early Possession. Landlord makes
no representation or warranty about the safety of the Premises during any period of Early Possession,
as construction and other activities may be ongoing.
(c) Termination Right, At any time after the twenty-fourth (24`h) month of the
Lease Term, in the event the Washington State Legislature tenninates the Valley Narcotics
Enforcement Team's right to retain the proceeds from its seizures, Tenant shall have the right
("Termination Right"), by giving written notice of such election to Landlord, to terminate the Lease
effective as of the date that is nine (9) months after Landlord's receipt of said written notice ("Early
Termination Date"). As a condition to its exercise of such Termination Right pursuant to this Section
3(c), Tenant shall pay to Landlord, simultaneously with its written election to terminate the Lease, a
fee (the "Termination Fee") equal to (i) three (3) months of the then current Basic Rent and
Additional Rent due pursuant to this Lease, plus (ii) the unamortized amount, as of the Early
Termination Date, of all Lease costs including, without limitation, the Tenant Improvement
Allowance, any commissions payable by Landlord hereunder, and the Abated Rent. For purposes
of this Section 3(c), the term "unamortized amount" of an expense shall mean the amount remaining
as of the Early Termination Date upon amortizing the expense over the Term of this Lease in equal
monthly installments at 8% interest per annum. In the event Tenant elects to exercise its Termination
Right pursuant to this paragraph, Tenant shall vacate and surrender the Premises to Landlord on or
before the Early Termination Date as required by the Lease including, without limitation, Section
21 hereof. The Termination Right set forth in this Section 3(c) is personal to Tenant and may not be
exercised or assigned, voluntarily or involuntarily, by or to any person or entity other than Tenant.
4. Rent.
(a) Payment. Tenant shall timely pay Rent to Landlord, without notice, demand,
deduction or setoff, by good and sufficient check drawn on a national banking association delivered
to Landlord's address for payment of Rent provided for in the Basic Lease Information, by wire
transfer as provided for in the Basic Lease Information, or to such other address or by wiring
instructions provided in a notice delivered by Landlord to Tenant, accompanied by all applicable state
and local sales or use taxes. The obligations of Tenant to pay Rent and other sums to Landlord and
the obligations of Landlord under this Lease are independent obligations. Basic Rent, adjusted as
3
herein provided, shall be payable monthly in advance. The monthly installment of Basic Rent and
Additional Rent (as defined below) for the first full -paying calendar month of the Term for which
Basic Rent and Additional Rent is due to Landlord hereunder shall be payable contemporaneously
with the execution of this Lease; thereafter, Basic Rent and Additional Rent shall be payable on the
first day of each month beginning on the first day of the second full calendar month of the Tenn for
which Basic Rent is due to Landlord. The monthly Basic Rent for any partial month at the beginning
of the Term shall equal the product of 1/365 of the annual Basic Rent in effect during the partial
month and the number of days in the partial month and shall be due on the Commencement Date.
Payments of Basic Rent for any fractional calendar month at the end of the Term shall be similarly
prorated. Tenant shall pay Additional Rent at the same time and in the same manner as Basic Rent.
(b) Operating Costs; Taxes.
(1) Tenant shall pay to Landlord Tenant's Proportionate Share of all
Operating Costs (as defined below) for each calendar year and partial calendar year falling within the
Term. Landlord may make a good faith estimate of Tenant's Proportionate Share of the Operating
Costs to be due by Tenant for any calendar year or part thereof during the Term. During each calendar
year or partial calendar year of the Term, Tenant shall pay to Landlord, in advance concurrently with
each monthly installment of Basic Rent, an amount equal to the estimated Tenant's Proportionate
Share of the Operating Costs for such calendar year or part thereof divided by the number of months
therein. From time to time, Landlord may estimate and re -estimate Tenant's Proportionate Share of
the Operating Costs to be due by Tenant and deliver a copy of the estimate or re -estimate to Tenant.
Thereafter, the monthly installments of Tenant's Proportionate Share of the Operating Costs payable
by Tenant shall be appropriately adjusted in accordance with the estimations so that, by the end of
the calendar year in question, Tenant shall have paid all of the Additional Rent as estimated by
Landlord. Any amounts paid based on such an estimate shall be subject to adjustment as herein
provided when actual Operating Costs are available for each calendar year. "Additional Rent," as
used herein, shall mean, collectively, all amounts owed by Tenant under this Lease other than Basic
Rent, including without limitation Tenant's Proportionate Share of the Operating Costs plus Tenant's
Proportionate Share of the Taxes (as defined below).
(2) The term "Operating Costs" means all expenses and disbursements
(subject to the limitations set forth below) that Landlord incurs in connection with the ownership,
operation, maintenance, management, insurance, protection, repair and replacement of all or any
portion of the Project, determined in accordance with sound accounting principles consistently
applied, including but not limited to the following costs: (A) wages and salaries of all on -site
employees at or below the grade of general manager engaged in the operation, maintenance or
security of the Project (together with Landlord's reasonable allocation of expenses of off -site
employees at or below the grade of senior building manager who perform a portion of their services
in connection with the operation, maintenance or security of the Project), including taxes, insurance
and benefits relating thereto; (B) all supplies and materials used in the operation, maintenance, repair,
replacement and security of the Project; (C) costs for improvements (as distinguished from
replacement of parts or components installed in the ordinary cause of business) made to the Project
that are capital in nature, to be amortized using a commercially reasonable interest rate over the useful
economic life of such improvements as determined by Landlord in its reasonable discretion; (D) cost
of all utilities, except the cost of utilities reimbursable to Landlord by the Project's tenants other than
pursuant to a provision similar to this Section 4(b); (E) insurance expenses related to the Project, to
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include without limitation all related premiums, deductibles, retention amounts, fees, expenses and
costs; (F) repairs, replacements, non -capital improvements, and general maintenance of the Project;
(G) reasonable property management fees; (H) service, maintenance and management contracts with
independent contractors for the operation, maintenance, management, repair, replacement, or security
of the Project (such as, by way of example and without limitation, alarm service, window cleaning,
janitorial, generator fuel and maintenance/repair, and elevator maintenance/repair); (I) Parking
Facility operation, repair, restoration and maintenance; (J) payments made or charges incurred under
any reciprocal easement agreement, transportation management agreement, cost -sharing agreement
or other covenant, condition, restriction or similar document affecting or benefiting the Project,
whether now or hereafter in effect; (K) maintenance, restoration and permitting related fees and costs
associated with any water bodies located on or around the Project which are incurred as a result of
local, tribal, state or federal laws, regulations, policies or guideline; (L) the cost of operating and
maintaining the Common Areas and any amenities provided to tenants and users at the Project
(including, without limitation, any gym or health club facility); and (M) governmental fees,
assessments, and charges.
Operating Costs shall not include costs for (i) capital improvements made to the Project, other than
(a) capital improvements described in Section 4(b)(2)(C) above and (b) items that are generally
considered maintenance and repair items (such as, by way of example and without limitation, painting
of common areas and replacement of carpet in elevator lobbies) as described in Section 4(b)(2)(F);
(ii) repair, replacements and general maintenance paid by proceeds of insurance or by Tenant or other
third parties; (iii) interest, amortization or other payments on loans to Landlord, except loans made
to Landlord for capital improvements described in Section 4(b)(2)(C) above; (iv) depreciation;
(v) leasing commissions; (vi)legal expenses for services, other than those that benefit the Project
tenants generally (such as, by way of example and without limitation, tax disputes); (vii) renovating
or otherwise improving space for specific occupants of the Project or vacant space (other than
Common Areas and other non -leasable areas) in the Project; (viii) Taxes; and (ix) federal income
taxes imposed on or measured by the income of Landlord from the operation of the Project.
(3) Tenant shall also pay Tenant's Proportionate Share of any Taxes for
each calendar year and partial calendar year falling within the Term. Tenant shall pay Tenant's
Proportionate Share of the Taxes in the same manner as provided above for Tenant's Proportionate
Share of the Operating Costs (both on an estimated and actual basis as provided therein). "Taxes"
means taxes, assessments, and governmental charges or fees whether federal, state, county or
municipal, and whether they be by taxing districts or authorities presently taxing or by others,
subsequently created or otherwise, and any other taxes and assessments (including nongovernmental
assessments for common charges under a restrictive covenant or other private agreement that are not
treated as part of Operating Costs) now or hereafter attributable to the Project (or its operation),
excluding, however, penalties and interest thereon. Notwithstanding anything to the contrary
contained in this Lease, there shall be excluded from Taxes any excess profits taxes, franchise taxes,
gift taxes, inheritance and succession taxes, estate taxes, documentary transfer taxes, federal or state
income, corporate, capital stock, or capital gains taxes, penalties incurred as a result of Landlord's
failure to pay taxes or to file any tax or informational returns and other taxes to the extent applicable
to Landlord's general or net income (as opposed to rents, receipts, or income attributable to operations
at the Project); provided, that if the present method of taxation changes so that in lieu of or in addition
to the whole or any part of any Taxes, there is levied on Landlord a capital tax directly on the rents
received therefrom or a franchise tax, assessment, or charge based, in whole or in part, upon such
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rents for the Project, then all such taxes, assessments, or charges, or the part thereof so based, shall
be deemed to be included within the term "Taxes" for purposes hereof. If an assessment is payable
in installments, Taxes for the year shall include the amount of the installment and any interest due
and payable during that year. For purposes of computing Taxes, any special assessment shall be
deemed to have been paid in the maximum number of installments permitted by Law, and Taxes shall
be deemed to include all interest that would have been payable in connection therewith as a result of
paying such special assessment in the maximum number of installments permitted by Law. For all
other Taxes, the Taxes for that year shall, at Landlord's election, include either the amount accrued,
assessed or otherwise imposed for the year or the amount due and payable for that year, provided that
Landlord's election shall be applied consistently throughout the Term. If there is a change in Taxes
for any year of the Term, then Taxes for that year will be retroactively adjusted and Landlord shall
provide Tenant, as applicable, with a credit or a statement of any deficiency based on the adjustment.
Tenant shall pay any such deficiency within thirty (30) days after receipt of the statement from
Landlord. For property tax purposes, Tenant waives all rights to protest or appeal the appraised value
of the Premises, as well as the Project, and all rights to receive notices of re-appraisement.
(4) By April 1 of each calendar year, or as soon thereafter as practicable,
Landlord shall furnish to Tenant a statement of Operating Costs for the previous year, in each case
adjusted as provided in Section 4(b)(5) below, and of the Taxes for the previous year (the "Operating
Costs and Tax Statement"). If Tenant's estimated payments of Tenant's Proportionate Share of the
Operating Costs and/or Taxes, as the case may be, under this Section 4(b) for the year covered by the
Operating Costs and Tax Statement exceed Tenant's Proportionate Share of the Operating Costs
and/or Taxes, as the case may be, as indicated in the Operating Costs and Tax Statement, then
Landlord shall promptly credit or reimburse Tenant for such applicable excess; likewise, if Tenant's
estimated payments of Tenant's Proportionate Share of the Operating Costs or Taxes, as the case may
be, under this Section 4(b) for such year are less than Tenant's Proportionate Share of the Operating
Costs and/or Taxes, as the case may be, as indicated in the Operating Costs and Tax Statement, then
Tenant shall pay Landlord such deficiency within thirty (30) days after receipt of the Operating Costs
and Tax Statement. No delay in providing any Operating Costs and Tax Statement shall be deemed
a default by Landlord or a waiver of Landlord's right to require payment of Tenant's Obligations for
actual or estimated Operating Costs Excess or Tax Excess.
(5) With respect to any calendar year or partial calendar year in which the
Building is not occupied to the extent of one hundred percent (100%) of the rentable area thereof, or
Landlord is not supplying services to one hundred percent (100%) of the rentable area thereof, the
Operating Costs for such period that vary with the occupancy of the Building shall, for the purposes
hereof, be increased to the amount that would have been incurred had the Building been occupied to
the extent of one hundred percent (100%) of the rentable area thereof and Landlord had been
supplying services to one hundred percent (100%) of the rentable area thereof. Landlord agrees that
any increase of the Operating Costs pursuant to the prior sentence shall be limited to only those
Operating Costs that vary with occupancy and shall not result in Landlord recovering more than the
actual Operating Costs. In addition, Landlord shall have the right, from time to time, to equitably
allocate and prorate some or all of the Operating Costs among different tenants and/or different
buildings of the Project and/or on a building -by -building basis (the "Cost Pools"), adjusting Tenant's
Proportionate Share as to each of the separately allocated costs based on the ratio of the rentable area
of the Premises to the rentable area of all of the premises to which such costs are allocated. Such
Cost Pools may include, without limitation, the office space tenants and retail space tenants of the
buildings in the Project. In addition, Landlord may specially allocate individual expenses where and
in the manner necessary, in Landlord's discretion, to appropriately reflect the consumption of the
expense or service. For example, Landlord may allocate costs related to an HVAC unit servicing a
particular premises to the tenant of that particular premises.
(6) Tenant may once each calendar year during the Term, within
ninety (90) days after receiving the Operating Costs and Tax Statement, give Landlord notice (the
"Review Notice") that Tenant intends to have Landlord's records of the Operating Costs and Taxes
for the calendar year covered by the Operating Costs and Tax Statement reviewed (the "Review") for
the sole purpose of determining whether the Operating Costs and Tax Statement is accurate; provided
that as a condition to Tenant's exercise of its right of Review set forth in this Section 4(b)(6), Tenant
shall not be permitted to withhold payment of, and Tenant shall timely pay to Landlord, the full
amount as required by the provisions of this Section 4 in accordance with such Operating Costs and
Tax Statement. However, such payment may be made under protest pending the outcome of the
Review.
(i) If Tenant retains an agent to review Landlord's records, the
agent shall be with a CPA firm licensed to do business in the State of Washington (working on a
non -contingency fee basis) and its fees shall not be contingent in whole or in part, upon the
outcome of the review ("Tenant's Accountant").
(ii) Within a reasonable time after receipt of the Review Notice,
Landlord shall make available to Tenant's Accountant during Normal Business Hours all pertinent
records with respect to the Operating Costs and Tax Statement for the calendar year that is the
subject of the Review Notice and that are reasonably necessary for Tenant's Accountant to conduct
the Review. If any records are maintained at a location other than the office of the Building,
Tenant's Accountant may either inspect the records at such other location or Tenant may pay for
the reasonable cost of copying and shipping the records. Except as otherwise expressly hereinafter
provided, Tenant shall be solely responsible for all costs, expenses and fees incurred for the
Review. Within sixty (60) days after the records are made available to Tenant's Accountant (the
"Objection Period"), Tenant shall have the right to give Landlord notice (an "Objection Notice")
stating in reasonable detail any objection to Landlord's Operating Costs and Tax Statement for that
year. If Tenant fails to provide Landlord with a Review Notice with respect to the Operating Costs
and Tax Statement for any calendar year within the ninety (90) day period described above, or fails
to give Landlord an Objection Notice within the sixty (60) day period described above, Tenant
shall be deemed to have approved the Operating Costs and Tax Statement and shall be barred from
raising any claims regarding the Operating Costs and Tax Statement for that year.
(iii) If Landlord agrees with Tenant's Objection Notice, then
Landlord shall credit the amount of any overpayment by Tenant in respect of Operating Costs and
Taxes against the Rent next payable under this Lease; provided, that if the Term shall have expired,
then any overpayment for which Tenant may otherwise have received a credit shall be refunded to
Tenant within thirty (30) days after receipt of said certification at Tenant's last known address after
deducting the amount of Rent and any other payments due. If Landlord disagrees with Tenant's
Objection Notice, then Landlord shall give to Tenant notice thereof within thirty (30) days after
Landlord's receipt of Tenant's Objection Notice, which notice shall set forth in reasonable detail the
reasons for such disagreement, and Landlord and Tenant shall attempt to resolve the disagreement.
(iv) If Landlord and Tenant cannot mutually agree on the resolution
of the disagreement within thirty (30) days after Tenant's receipt of Landlord's notice of
disagreement, then Landlord and Tenant shall jointly choose an independent certified public
accountant located in Seattle, Washington who has not represented either Landlord, Tenant, or their
respective Affiliates, in the preceding five (5) years to resolve the disagreement, whose
determination shall be binding on the parties hereto. If the parties are unable to agree upon such
independent certified public accountant, then either Landlord or Tenant shall have the right to
petition for the appointment of the independent accountant by the Presiding Judge of the Superior
Court of King County, Washington and the decision of such Judge (and the determination of the
accountant appointed by such Judge) shall be final and binding upon the parties, and not subject to
appeal of any kind. If the final determination shall disclose that the Operating Costs and Tax
Statement for the calendar year in question were overstated by more than the greater of (x) five
percent (5%), and (y) five thousand dollars ($5,000.00), then Landlord shall reimburse Tenant,
within thirty (30) days after Landlord receives notice of such final determination, for the reasonable
costs of the independent certification or reimburse Tenant (as applicable) the cost of Tenant's
accountant's review, up to a maximum of Two Thousand Five Hundred and 00/100 Dollars
($2,500.00) per review (but each party shall pay the cost of its respective attorney's fees); otherwise,
the cost of the audit and arbitration shall be paid by Tenant.
(v) If Operating Costs and/or Taxes for the calendar year are less
than reported, Landlord shall provide Tenant with a credit against the payment of Rent next due in
the amount of the overpayment by Tenant; provided, however, if the Term shall have expired, then
any overpayment for which Tenant may otherwise have received a credit shall be refunded to Tenant
within thirty (30) days after receipt of said certification at Tenant's last known address after
deducting the amount of Rent and any other payments due. Likewise, if Landlord and Tenant
determine that Operating Costs and/or Taxes for the calendar year are greater than reported, Tenant
shall pay Landlord the amount of any underpayment in Tenant's Pro Rata Share thereof within
thirty (30) days.
(vi) Tenant acknowledges and agrees that any records reviewed
under this provision constitute confidential information of Landlord that shall not be disclosed to
anyone other than Tenant's Accountant and the principals of Tenant who receive the results of such
Review. However, notwithstanding the foregoing, Landlord acknowledges that Tenant is a public
agency subject to the Public Records Act, Chapter 42.56 RCW, and that any records relating to this
Lease may be subject to public disclosure. As such, Landlord agrees to cooperate fully with Tenant
in satisfying its duties and obligations under the Public Records Act. While certain records or
information contained therein may be exempt from public disclosure pursuant to RCW 42.56.270, if
Tenant receives a public records request that may require the dissemination of records related to this
Lease, Tenant shall notify Landlord of the request as soon as reasonably possible so that Landlord
may take whatever actions it deems necessary to protect such information in accordance with RCW
42.56.540
(c) Additional Costs Charges; Tenant Taxes.
(1) Tenant agrees to pay and discharge in a timely manner, as and when
the same shall become due and payable without penalty, all utility and service charges, obligations,
and deposits assessed against or charged in connection with the operation of the Premises during the
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Term, except to the extent that Landlord expressly assumes responsibility for the making of such
payment in which event such charges shall be paid by Landlord and charged to Tenant as Operating
Expenses in accordance with this Article 4, and upon Landlord's request Tenant shall promptly
provide Landlord with proof of such payment. Without limiting the generality of the foregoing, to
the extent that Tenant's possession, occupancy, or use of the Premises results in a new or increased
cost, fee, tax, assessment, levy, penalty, fine, premium, or other charge (such as, by way of example
only and without limitation, an increase in insurance premium arising from Tenant's possession,
occupancy, or use), then Tenant shall be solely responsible for the timely payment (if directly billed
to Tenant) or prompt repayment to Landlord (if billed to Landlord and then submitted to Tenant by
Landlord for reimbursement) thereof. Landlord may elect to invoice amounts attributable to Tenant
either (i) by including such amounts in Landlord's invoicing of Operating Costs and Taxes, or (ii) by
separately invoicing Tenant for such amounts, in which case Tenant shall pay such separately
invoiced amounts within thirty (30) days of the delivery of such invoice.
(2) Without limiting the generality of Section 4(c)(1), above, in no event
shall Landlord be responsible or liable for any tax assessed directly against Tenant (including without
limitation Tenant's operations, income, tenancy, or property) or billed directly to Tenant by the taxing
authority or entity (collectively, "Tenant Taxes"). Tenant shall timely pay and discharge in a timely
manner, as and when the same shall become due and payable without penalty all Tenant Taxes, and
upon Landlord's request Tenant shall promptly provide Landlord with proof of payment.
5. Delinquent Payment; Handling Charges. All past due payments required of Tenant
hereunder that are not received by Landlord on or before five (5) days after the date the payment is
due (i) shall bear interest from the date due until paid at the lesser of twelve percent (12%) per annum
or the maximum lawful rate of interest (such lesser amount is referred to herein as the "Default
Rate"); and (ii) Landlord, in addition to all other rights and remedies available to it, may charge
Tenant a fee equal to five percent (5%) of the delinquent payment to reimburse Landlord for its cost
and inconvenience incurred as a consequence of Tenant's delinquency. hi no event, however, shall
the charges permitted under this Section 5 or elsewhere in this Lease, to the extent they are considered
to be interest under applicable Law, exceed the maximum lawful rate of interest.
6. Security Deposit. Concurrently with its execution of this Lease, Tenant shall pay to
Landlord the Security Deposit, which shall be held by Landlord to secure Tenant's performance of
its obligations under this Lease. The Security Deposit is not an advance payment of Rent or a measure
or limit of Landlord's damages upon an Event of Default (as defined below). Landlord may, from
time to time following an Event of Default and without prejudice to any other remedy, use all or a
part of the Security Deposit to perform any obligation Tenant fails to perform hereunder. Following
any such application of the Security Deposit, Tenant shall pay to Landlord within five (5) days after
demand the amount so applied in order to restore the Security Deposit to its original amount.
Provided that Tenant has performed all of its obligations hereunder, Landlord shall, within sixty
(60) days after the later to occur of (a) the Expiration Date, (b) Tenant's vacation and surrender of
the Premises in the condition required by this Lease or (c) the determination of the final Rent due
from Tenant, return to Tenant the portion of the Security Deposit that was not applied to satisfy
Tenant's obligations. The Security Deposit may be commingled with other funds, and no interest
shall be paid thereon. If the Premises shall be expanded at any time, or if the Term shall be extended
at an increased rate of Basic Rent, at Landlord's option, the Security Deposit shall thereupon be
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increased proportionately. Landlord may assign the Security Deposit to a successor and Landlord
thereafter shall have no further liability for the return of tire Security Deposit.
7. Landlord's Obligations.
(a) Services. Landlord shall use all reasonable efforts to furnish to Tenant
(1) domestic water at those points of supply provided for general use of tenants of the Building;
(2) heated and refrigerated air-conditioning in Building standard amounts ("HVAC");
(3)intentionally deleted; (4) passenger elevators for ingress and egress to the floor on which the
Premises are located, in common with other tenants, provided that Landlord may reasonably limit the
number of operating elevators during non -business hours and Holidays; and (5) electrical current
during Normal Business Hours for equipment that does not require more than 110 volts and whose
electrical energy consumption does not exceed one kilowatt hour per rentable square foot of the
Premises per month. Subject to the provisions of Section 15 below, Landlord shall maintain the
Common Areas of the Building in reasonably good order and condition, except for damage caused
by a Tenant Party. If Tenant operates within the Premises outside of Normal Business Hours or on
Holidays, and requests that Landlord provide HVAC service during such time period, Landlord may
charge Tenant a fee in the amount of $75 per hour of such excess HVAC usage. "Normal Business
Hours" shall mean the hours between 7:00 a.m. and 6:00 p.m. on weekdays (other than Holidays),
and between 9:00 a.m. to 1:00 p.m. on Saturdays (other than Holidays). "Holidays" means New
Year's Day, Martin Luther King Jr. Day, President's Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day. Landlord may at any time suspend any or all of the
services provided by Landlord to the Premises, Building or Project, to the extent reasonably deemed
appropriate by Landlord in relation to any health emergency, and Tenant waives any claims against
Landlord with respect to any such suspension; provided that Landlord acknowledges that Tenant may
continue to use the Premises during a health emergency so long as Tenant is not by law prohibited
from so doing.
(b) Excess Utility Use. Landlord shall not be required to furnish electrical current
for equipment that requires more than 110 volts or other equipment whose electrical energy
consumption exceeds one kilowatt hour per rentable square foot of the Premises per month. If
Tenant's requirements for or consumption of electricity exceed the electricity to be provided by
Landlord as described in Section 7(a) above, Landlord shall, at Tenant's expense, make reasonable
efforts to supply such service through the then -existing feeders and risers serving the Building and
the Premises, and Tenant shall pay to Landlord the cost of such service within thirty (30) days after
Landlord has delivered to Tenant an invoice therefor, together with reasonable supporting evidence.
Landlord may determine the amount of such additional consumption and potential consumption by
any verifiable method, including installation of a separate meter in the Premises installed, maintained,
and read by Landlord, at Tenant's expense. Tenant shall not install any electrical equipment requiring
special wiring or requiring voltage in excess of 110 volts unless approved in advance by Landlord,
which approval shall not be unreasonably withheld. Tenant shall not install any electrical equipment
requiring voltage in excess of Building capacity unless approved in advance by Landlord, which
approval may be withheld in Landlord's sole discretion. The use of electricity in the Premises shall
not exceed the capacity of existing feeders and risers to, or wiring in, the Premises. Any risers or
wiring required to meet Tenant's excess electrical requirements shall, upon Tenant's written request,
be installed by Landlord, at Tenant's cost, if, in Landlord's judgment, the same are necessary and
shall not cause permanent damage to the Building or the Premises, cause or create a dangerous or
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hazardous condition, entail excessive or unreasonable alterations, repairs, or expenses, or interfere
with or disturb other tenants of the Building. If Tenant uses machines or equipment in the Premises
that affect the temperature otherwise maintained by the air-conditioning system or otherwise overload
any utility, Landlord may install supplemental air-conditioning units or other supplemental
equipment in the Premises, and the cost thereof, including the cost of installation, operation, use, and
maintenance, in each case plus an administrative fee of five percent (5%) of such cost, shall be paid
by Tenant to Landlord within thirty (30) days after Landlord has delivered to Tenant an invoice
therefor, together with reasonable supporting evidence.
(c) Landlord's Repairs. Landlord shall repair and maintain in good order, repair
and condition, the cost of which shall be included in Operating Costs to the extent permitted in Section
4 above, the Building's Structure, the Building's Systems and the common areas of the Building and
Project (but not including any non -base building facilities installed in the Premises); provided,
however, to the extent such maintenance and repairs are caused by the willful act, neglect, fault of or
omission of any duty by any Tenant Party, Tenant shall pay to Landlord as additional Rent, the
reasonable cost of such maintenance and repairs, which payment shall be made by Tenant to Landlord
within thirty (30) days after Tenant's receipt of an invoice therefor, together with reasonable
supporting evidence. Except as set forth in Section 7(d) below, there shall be no abatement of Rent
and no liability of Landlord by reason of any injury to or interference with Tenant's business arising
from the making or failing to make any repairs, alterations or improvements in or to any portion of
the Project. Tenant hereby waives and releases any right to make repairs at Landlord's expense under
any Law now or hereafter in effect.
(d) Restoration of Services; Abatement. Landlord shall use reasonable efforts
to restore any service required of it that becomes unavailable; however, any such unavailability
("Service Failure") shall not render Landlord liable for any damages caused thereby, be a
constructive eviction of Tenant, constitute a breach of any implied warranty, constitute a breach of
any covenant (provided Landlord uses such reasonable efforts), or, except as provided in the next
sentence, entitle Tenant to any abatement of Tenant's obligations hereunder. If, however, Tenant is
prevented from using the Premises because of Service Failure for a period of five (5) consecutive
Business Days following Landlord's receipt from Tenant of a written notice regarding such Service
Failure, the restoration of which is within Landlord's reasonable control, and such Service Failure
was not caused by a Tenant Party, a governmental directive or cause beyond Landlord's reasonable
control, then Tenant shall, as its exclusive remedy, be entitled to a reasonable abatement of Rent
(prorated to correspond with the portion of the Premises that Tenant is prevented from using) for each
consecutive day (after such five Business Day period) that Tenant is so prevented from using the
Premises.
Improvements• Alterations; Repairs; Maintenance.
(a) Improvements; Alterations. All alterations, improvements, betterments and
other physical additions in or to the Premises (collectively, "Alterations") shall be installed at
Tenant's expense only in accordance with plans and specifications that have been previously
submitted to and approved by Landlord, which approval shall be governed by the provisions set forth
in this Section 8(a), and otherwise in accordance with the provisions hereof, which shall be governed
by the terms and conditions of Exhibit D, and Cables (as defined below), which shall be installed,
maintained, replaced and removed in accordance with the terms and conditions of Section 25 below.
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Except as provided in this Lease, no Alterations may be made without Landlord's prior written
consent to such Alterations and the plans and specifications, and the construction means and methods,
therefor, which shall not be unreasonably withheld or delayed; however, without limitation, Landlord
may withhold its consent to any alteration or addition that would affect (in the reasonable discretion
of Landlord) the (1) Building's Structure or the Building's Systems (including the Building's
restrooms or mechanical rooms), (2) exterior appearance of the Building, (3) appearance of the
Common Areas or elevator lobby areas, or (4) provision of services to other occupants of the
Building. If Landlord consents to Alterations, Landlord may impose such conditions with respect
thereto as are reasonably appropriate, including (A) requiring Tenant to furnish (i) Landlord with
security for the payment of all costs to be incurred in connection with such work, (ii) insurance against
liabilities that may arise out of such work, and (iii) plans and specifications, and permits for such
work, and (B) requiring Tenant to remove any and all such Alterations (including fixtures) in or to
the Premises prior to the expiration or earlier termination of this Lease at Tenant's sole cost and
expense. Tenant's plans and specifications and construction means and methods shall be subject to
Landlord's written approval. All Alterations are subject to removal and restoration in accordance
with the provisions of Section 20 below. Tenant shall furnish to Landlord any documents and
information requested by Landlord in connection with the exercise of its rights hereunder. Landlord
may hire outside consultants to review such documents and information furnished to Landlord and
Tenant shall reimburse Landlord for the cost thereof, including reasonable attorneys' fees, within
thirty (30) days after receipt from Landlord of an invoice therefor, together with reasonable
supporting evidence. Notwithstanding anything to the contrary, Tenant shall not paint or install
lighting or decorations, signs, window or door lettering, or advertising media of any type visible from
the exterior of the Premises without the prior written consent of Landlord, which consent may be
withheld in Landlord's sole and absolute discretion. All Alterations shall be constructed, maintained,
and used by Tenant, at its risk and expense, in accordance with all Laws and the Landlord's then
current contractor rules and regulations; Landlord's consent to or approval of any Alterations (or the
plans therefor) shall not constitute a representation or warranty by Landlord, nor Landlord's
acceptance, that the same comply with sound architectural and/or engineering practices, or with all
applicable Laws or with the Underlying Documents, and Tenant shall be solely responsible for
ensuring all such compliance. If, as a result of Tenant's use of the Premises or the making of any
Alterations to the Premises pursuant to this Section 8(a) or Section 25 below, respectively, any other
alterations, improvements, betterments or other physical additions shall be required to be made to any
part of the Premises or the Project to comply with the requirements of any applicable Law, including
the requirements of the Disabilities Act (as defined below), the Occupational Safety & Health
Administration (OSHA), or the orders or requirements imposed by any health officer, fire marshal or
building inspector, Tenant shall be solely responsible for the costs incurred to effect such compliance.
If the required alteration, improvement, betterment or other physical addition will not affect the
Building's Structure or the Building's Systems, Tenant shall perform such work subject to this
Section 8(a). If the required alteration, improvement, betterment or other physical addition will affect
the Building's Structure or the Building's Systems, Landlord shall have the right to perform such
work and Tenant shall reimburse Landlord in an amount equal to Landlord's costs plus five percent
(5%) for overhead, which shall be payable within thirty (30) days of Landlord's receipt of any invoice
therefor, together with reasonable supporting evidence. Notwithstanding the foregoing provisions of
this Section 8(a) to the contrary, Tenant may make non-structural Alterations to the interior of the
Premises (collectively, the "Acceptable Changes" and individually, each an "Acceptable Change")
without Landlord's consent, provided that, with respect to each such Acceptable Change: (A) Tenant
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delivers to Landlord written notice of such Acceptable Change at least fifteen (15) days prior to the
commencement thereof; (B) the aggregate cost of such Acceptable Change along with all other
Acceptable Changes during any twelve (12) consecutive month period does not exceed $10,000; (C)
such Acceptable Change is performed by or on behalf of Tenant in compliance with the other
provisions of this Section 8; (D) such Acceptable Change does not require the issuance of a building
permit or other governmental approval; (E) such Acceptable Change would not have an adverse effect
(in Landlord's sole discretion) on the Building's Structure, the Building's Systems (including the
Building's restrooms and mechanical rooms), or the provision of utilities or services to occupants of
the Building; (F) such Acceptable Change cannot be seen from outside the Premises; and (G) such
Acceptable Change is performed by qualified contractors and subcontractors that normally and
regularly perform similar work in the Comparable Buildings.
(b) Repairs; Maintenance. During the Term, Tenant shall at its sole expense
maintain the Premises in a clean, safe, and operable condition, and shall not permit or allow to remain
any waste or damage to any portion of the Premises. Additionally, Tenant, at its sole expense, shall
repair, replace and maintain in good condition and in accordance with all Laws and the equipment
manufacturer's suggested service programs, all portions of the Premises, Tenant's Off -Premises
Equipment and all areas, improvements and systems exclusively serving the Premises. Tenant shall
repair or replace, subject to Landlord's direction and supervision, any damage to the Building caused
by a Tenant Party. If Tenant fails to make such repairs or replacements within fifteen (15) days after
the occurrence of such damage, then Landlord may make the same at Tenant's cost plus an
administrative fee of five percent (5%). If any such damage occurs outside the Premises, then
Landlord may elect to repair such damage at Tenant's expense using Landlord's usual contractor for
such work and at competitive rates, rather than having Tenant repair such damage. The cost of all
maintenance, repair or replacement work performed by Landlord under this Section 8 shall be paid
by Tenant to Landlord within thirty (30) days after Landlord has invoiced Tenant therefor, together
with reasonable supporting evidence.
(c) Performance of Work. All work described in this Section 8 shall be
performed only by Landlord's preferred contractor for such work at competitive rates or by
contractors and subcontractors approved in writing by Landlord, which approval shall not be
unreasonably withheld. Tenant shall cause all contractors and subcontractors to procure and maintain
insurance coverage naming Landlord, Landlord's property management company, Landlord's asset
management company and such other persons or entities as Landlord may designate in writing to
Tenant from time to time as additional insureds using ISO additional insured endorsement CG 20 11
(or a substitute satisfactory to Landlord providing equivalent coverage), and under the commercial
umbrella, if any, against such risks, in such amounts, and with such companies as Landlord may
reasonably require. Tenant shall also require all contractors and subcontractors to carry builder's risk
insurance in an amount acceptable to Landlord. Tenant shall provide Landlord with the identities,
mailing addresses and telephone numbers of all persons performing work or supplying materials prior
to beginning such construction, and Landlord may post on and about the Premises notices of
non -responsibility pursuant to applicable Laws. All such work shall be performed in accordance with
all Laws and in a good and workmanlike manner so as not to damage the Building (including the
Premises, the Building's Structure and the Building's Systems). All such work that may affect the
Building's Structure or the Building's Systems must be approved by the Building's engineer of
record, at Tenant's expense and, at Landlord's election, must be performed by Landlord's preferred
contractor for such work at competitive rates. All work affecting the roof of the Building must be
13
performed by Landlord's preferred roofing contractor at competitive rates and no such work will be
permitted if it would void or reduce the warranty on the roof.
(d) Mechanic's Liens. All work performed, materials furnished, or obligations
incurred by or at the request of a Tenant Party shall be deemed authorized and ordered by Tenant
only, and Tenant shall not permit any mechanic's liens to be filed against the Premises or the Project
in connection therewith. Upon completion of any such work, Tenant shall deliver to Landlord final
lien waivers from all contractors, subcontractors and materialmen who performed such work. If such
a lien is filed, then Tenant shall, within ten (10) days after becoming aware of such lien (or such
earlier time period as may be necessary to prevent the forfeiture of the Premises, the Project or any
interest of Landlord therein or the imposition of a civil or criminal fine with respect thereto), either
(1) pay the amount of the lien and cause the lien to be released of record, or (2) diligently contest
such lien and deliver to Landlord a bond or other security reasonably satisfactory to Landlord. If
Tenant fails to timely take either such action, then Landlord may pay the lien claim, and any amounts
so paid, including expenses and interest, shall be paid by Tenant to Landlord within thirty (30) days
after Landlord has invoiced Tenant therefor, together with reasonable supporting evidence. Landlord
and Tenant acknowledge and agree that their relationship is and shall be solely that of
"landlord -tenant" (thereby excluding a relationship of "owner -contractor," "owner -agent" or other
similar relationships). Accordingly, all materialmen, contractors, artisans, mechanics, laborers and
any other persons now or hereafter contracting with Tenant, any contractor or subcontractor of Tenant
or with any other Tenant Party for the furnishing of any labor, services, materials, supplies or
equipment with respect to any portion of the Premises, at any time from the date hereof until the end
of the Term, are hereby charged with notice that they look exclusively to Tenant to obtain payment
for same. Nothing herein shall be deemed a consent by Landlord to any liens being placed upon the
Premises, the Project or Landlord's interest therein due to any work performed by or for Tenant or
deemed to give any contractor or subcontractor or materialman any right or interest in any funds held
by Landlord to reimburse Tenant for any portion of the cost of such work. Tenant shall defend,
indemnify and hold harmless Landlord and its agents and representatives from and against all claims,
demands, causes of action, suits, judgments, damages and expenses (including attorneys' fees) in any
way arising from or relating to the failure by any Tenant Party to pay for any work performed,
materials furnished, or obligations incurred by or at the request of a Tenant Party. This indemnity
provision shall survive termination or expiration of this Lease.
9. Use. Tenant shall use the Premises only for the Permitted Use and shall comply with,
and cause each other Tenant Party to comply with, all Laws relating to the use, condition, access to,
and occupancy of the Premises and will not commit waste, overload the Building's Structure or the
Building's Systems or subject the Premises to use that would damage the Premises. Tenant shall be
solely responsible for ensuring that any Permitted Use of the Premises is permissible under applicable
Laws, and Landlord makes no representations or warranties regarding such permissibility. Tenant
shall further be solely responsible for verifying that the Premises and Building are suitable for
Tenant's intended use, and for installation of its improvements, fixtures, furniture, and equipment.
The population density within the Premises as a whole shall at no time exceed one person for each
two hundred (200) rentable square feet in the Premises. Tenant shall not conduct second or third shift
operations within the Premises; however, Tenant may use the Premises after Normal Business Hours,
so long as Tenant is not generally conducting business from the Premises after Normal Business
Hours. Notwithstanding anything in this Lease to the contrary, as between Landlord and Tenant,
(a) Tenant shall bear the risk of complying with Title III of the Americans With Disabilities Act of
14
1990, any Laws governing handicapped access or architectural barriers, and all rules, regulations, and
guidelines promulgated under such Laws, as amended from time to time (the "Disabilities Acts") in
the Premises, and (b) Landlord shall bear the risk of complying with the Disabilities Acts in the
Common Areas of the Building, other than compliance that is necessitated by the (1) use of the
Premises for other than the Permitted Use, (2) as a result of any Alterations made by or on behalf of
a Tenant Party (all of which risk and responsibility shall be borne by Tenant), or (3) as a result of any
trade fixtures, furniture, equipment or other personal property to be installed in the Premises. The
Premises shall not be used for any use that is immoral, disreputable, creates extraordinary fire or other
hazards, or results in an increased rate of insurance on the Building or its contents, or for the storage
of any Hazardous Materials (other than typical office supplies (e.g., photocopier toner) and then only
in compliance with all Laws). Tenant shall not use any substantial portion of the Premises for a "call
center," any other telemarketing use, or any credit processing use. If, because of a Tenant Party's
acts or because Tenant vacates the Premises, the rate of insurance on the Building or its contents
increases, then such acts shall be an Event of Default, Tenant shall pay to Landlord the amount of
such increase within thirty (30) days after Tenant's receipt of an invoice therefor, together with
reasonable supporting evidence, and acceptance of such payment shall not waive any of Landlord's
other rights. Tenant shall conduct its business and control each other Tenant Party so as not to create
any nuisance or unreasonably interfere with other tenants or Landlord in its management of the
Building. Tenant acknowledges that Landlord may elect to close the Building and/or Project if
reasonably deemed necessary or appropriate by Landlord in response to any public health emergency
or to comply with the recommendations or directives of any local, State or Federal government or
agency, and Tenant waives any claims against Landlord with respect to any such closure and
acknowledges that any such closure shall not affect or reduce Tenant's obligations under this Lease;
provided that Landlord acknowledges that Tenant may continue to use the Premises during a health
emergency and any such closure shall not apply to Tenant so long as Tenant is not by law prohibited
from using the Premises.
10. Assignment and Subletting.
(a) Transfers. Tenant shall not, without the prior written consent of Landlord,
which such consent shall not be unreasonably withheld conditioned or delayed, (1) assign, transfer,
or encumber all or any portion of this Lease or any estate or interest herein, whether directly,
indirectly or by operation of law, (2) permit any other entity to become Tenant hereunder by merger,
consolidation, or other reorganization, (3) if Tenant is an entity other than a corporation whose stock
is publicly traded, permit the transfer of an ownership interest in Tenant so as to result in a change in
the current control of Tenant, (4) sublet all or any portion of the Premises, (5) grant any license,
concession, or other right of occupancy of any portion of the Premises, or (6) permit the use of all or
any portion of the Premises by any parties other than Tenant (any of the events listed in clauses (1)
through (6) of this Section 10(a) above being a "Transfer").
(b) Consent Standards. Without limitation, it shall be reasonable for Landlord
to consider the following in determining whether to provide consent to a proposed Transfer:
(1) whether the proposed transferee (A) is creditworthy, (B) has a good reputation in the business
community, (C) will use the Premises solely for the Permitted Use (thus, excluding, without
limitation, illegal or immoral uses) and will not use the Premises in any manner that would conflict
with any exclusive use agreement or other similar agreement entered into by Landlord with any other
tenant of the Building or Project, (D) will not use the Premises, Building or Project in a manner that
15
would materially increase the pedestrian or vehicular traffic to the Premises, Building or Project,
(E) is not a governmental entity, or subdivision or agency thereof or person that is or may be entitled
to claim sovereign immunity, (F) is not another occupant of the Building or Project, (G) is not a
person or entity with whom Landlord is then, or has been within the six-month period prior to the
time Tenant seeks to enter into such assignment or subletting, negotiating to lease space in the
Building or Project or any Affiliate of any such person or entity, and (H) has been approved by all of
Landlord's Mortgagees (as defined below) having the right to approve the proposed transferee, and
(2) payment for the Transfer may not be determined in whole or in part based upon the net income or
profits of the proposed transferee.
(c) Request for Consent. If Tenant requests Landlord's consent to a Transfer,
then, at least thirty (30) days prior to the effective date of the proposed Transfer, Tenant shall provide
Landlord with a written description of all terms and conditions of the proposed Transfer, copies of
the proposed documentation, and the following information about the proposed transferee: name and
address; reasonably satisfactory information about its business and business history; its proposed use
of the Premises; banking, financial, and other credit information; general references sufficient to
enable Landlord to determine the proposed transferee's creditworthiness and character and such
additional information as Landlord may reasonably request. Concurrently with Tenant's notice of
any request for consent to a Transfer, Tenant shall pay to Landlord a fee of One Thousand Dollars
($1,000.00) to defray Landlord's expenses in reviewing such request, and Tenant shall also reimburse
Landlord within thirty (30) days after Landlord has delivered to Tenant an invoice therefor, together
with reasonable supporting documentation for its reasonable attorneys' fees incurred in connection
with considering any request for consent to a Transfer in an amount not to exceed One Thousand Five
Hundred and No/100 Dollars ($1,500.00) in the aggregate.
(d) Recapture Right. At any time within thirty (30) days after Landlord's receipt
of the information specified in subparagraph (c) above, Landlord may by written notice to Tenant
elect to terminate this Lease as to the portion of the Premises so proposed to be Transferred (which
may include all of the Premises) as of the effective date of the proposed Transfer, with a proportionate
abatement in the Rent payable hereunder. If Landlord exercises this right, then Tenant shall return
the recaptured portion of the Premises to Landlord as of such date in the condition required by the
Lease as if the same had expired pursuant to its terms for such recaptured space.
(e) Conditions to Consent. If Landlord consents to a proposed Transfer, then the
proposed transferee shall deliver to Landlord a written agreement whereby it expressly assumes
Tenant's obligations hereunder; however, any transferee of less than all of the space in the Premises
shall be liable only for obligations under this Lease that are properly allocable to the space subject to
the Transfer for the period of the Transfer. No Transfer shall release Tenant from its obligations
under this Lease, but rather Tenant and its transferee shall be jointly and severally liable therefor;
provided, however, that if Tenant is nonetheless deemed to be a surety by remaining liable hereunder,
Tenant hereby waives all applicable suretyship defenses. Landlord's consent to any Transfer shall
not waive Landlord's rights as to any subsequent Transfers. If an Event of Default occurs while the
Premises or any part thereof are subject to a Transfer, then Landlord, in addition to its other remedies,
may collect directly from such transferee all rents becoming due to Tenant and apply such rents
against Rent. Tenant authorizes its transferees to make payments of rent directly to Landlord upon
receipt of notice from Landlord to do so following the occurrence of an Event of Default hereunder.
16
Tenant shall pay for the cost of any demising walls or other improvements necessitated by a proposed
subletting or assignment.
(f) Attornment by Subtenants. Each sublease by Tenant hereunder shall be
subject and subordinate to this Lease and to the matters to which this Lease is or shall be subordinate,
and each subtenant by entering into a sublease is deemed to have agreed that in the event of
termination, reentry or dispossession by Landlord under this Lease, Landlord may, at its option, take
over all of the right, title and interest of Tenant, as sublandlord, under such sublease, and such
subtenant shall, at Landlord's option, attom to Landlord pursuant to the then -executory provisions of
such sublease, except that Landlord shall not be (1) liable for any previous act or omission of Tenant
under such sublease, (2) subject to any counterclaim, offset or defense that such subtenant might have
against Tenant, (3) bound by any previous modification of such sublease not approved by Landlord
or by any rent or additional rent or advance rent which such subtenant might have paid for more than
the current month to Tenant, and all such rent shall remain due and owing, notwithstanding such
advance payment, (4) bound by any security or advance rental deposit made by such subtenant that
is not delivered or paid over to Landlord and with respect to which such subtenant shall look solely
to Tenant for refund or reimbursement, or (5) obligated to perform any work in the subleased space
or to prepare it for occupancy, and in connection with such attornment, the subtenant shall execute
and deliver to Landlord any instruments Landlord may reasonably request to evidence and confirm
such attornment. Each subtenant or licensee of Tenant shall be deemed, automatically upon and as a
condition of its occupying or using the Premises or any part thereof, to have agreed to be bound by
the terms and conditions set forth in this Section 10(f). The provisions of this Section 10(f) shall be
self -operative, and no further instrument shall be required to give effect to this provision.
(g) Additional Compensation. At Landlord's option, Tenant shall pay to
Landlord, within thirty (30) days after receipt thereof, fifty percent (50%) of the excess of (1) all
compensation received by Tenant for a Transfer less the actual out-of-pocket costs reasonably
incurred by Tenant with unaffiliated third parties (i.e., brokerage commissions and tenant finish work)
and other economic concessions or services provided to the transferee, in connection with such
Transfer over (2) the Rent allocable to the portion of the Premises covered thereby.
11. Insurance• Waivers; Subrotiation; Indemnity.
(a) Tenant's Insurance. Effective as of the earlier of (1) the date Tenant first
enters upon or occupies the Premises, or (2) the Commencement Date, and continuing throughout the
Term, Tenant shall maintain the following insurance policies: (A) commercial general liability
insurance on the current ISO CG 00 01 12 04 occurrence form or equivalent acceptable to Landlord
in amounts of Five Million Dollars ($5,000,000.00) per occurrence, Five Million Dollars
($5,000,000.00) personal injury and advertising injury, Five Million Dollars ($5,000,000.00)
products -completed operations aggregate and Five Million Dollars ($5,000,000.00) general aggregate
(which shall apply separately to the Premises) with defense costs provided in addition to policy limits,
insuring Tenant, as well as Landlord, Landlord's property management company, Landlord's asset
management company and, if requested in writing by Landlord, any of Landlord's Mortgagees, and
such other persons and entities as Landlord may from time to time designate (collectively, the
"Additional Insureds") thereunder and under Tenant's commercial excess or umbrella liability
policy, if any, using ISO additional insured endorsement CG 20 11 (or a substitute acceptable to
17
Landlord providing equivalent coverage) against all liability for personal injury, bodily injury
(including mental anguish and death) or property damage or destruction (including loss of use thereof)
arising from the use and occupancy of the Premises, the Building and all areas appurtenant thereto,
including the Parking Facility and (without implying any consent by Landlord to the installation
thereof) the installation, operation, maintenance, repair or removal of Tenant's Off Premises
Equipment, (B) primary "special form" perils property damage insurance under ISO special clauses
of loss form (ISO form CP 10 30) covering the full value of all alterations, additions and
improvements and betterments in the Premises, including any Alterations, naming Landlord and each
of Landlord's Mortgagees as additional loss payees as their interests may appear, (C) primary "special
form" perils property damage insurance under ISO special clauses of loss form (ISO form CP 10 30)
covering the full value of all furniture, trade fixtures, electronic data and media, business records, and
personal property (including property of Tenant or others) in the Premises or otherwise placed in the
Project by or on behalf of a Tenant Party (including Tenant's Off Premises Equipment), without
deduction for depreciation, (D) workers' compensation insurance as required by the State of
Washington, together with employers' liability insurance of at least One Million Dollars
($1,000,000.00) for each accident for bodily injury by accident, One Million Dollars ($1,000,000.00)
each employee for bodily injury by disease, and One Million Dollars ($1,000,000.00) policy limit for
bodily injury by disease, (E) business income with extra expense insurance (ISO form CP 00 30, or
equivalent acceptable to Landlord) in an amount reasonably acceptable to Landlord, and
(F) comprehensive automobile insurance, and if necessary, commercial umbrella insurance, with a
limit of not less than Two Million Dollars ($2,000,000.00) each accident, which automobile insurance
shall cover liability arising out of any automobile (including owned, hired and non -owned
automobiles),insuring the Additional Insureds as additional insureds thereunder. All of Tenant's
insurance shall be primary insurance as to all claims thereunder and provide that any insurance carried
by any of the Additional Insureds is excess over, and non-contributing with, any insurance of Tenant.
Tenant shall furnish to Landlord certificates of such insurance and such other evidence satisfactory
to Landlord of the maintenance of all insurance coverages required hereunder (including copies of
endorsements) at least ten (10) days prior to the earlier of the Commencement Date or the date Tenant
first enters upon or occupies the Premises, and at least fifteen (15) days prior to each renewal of said
insurance (and such liability insurance certificates or other evidence shall include an endorsement or
policy excerpt showing that Tenant's coverage is primary and non-contributing with respect to any
insurance afforded to any of the Additional Insureds). Tenant shall obtain a written obligation on the
part of each insurance company to endeavor to notify Landlord and each of Landlord's Mortgagees
at least forty-five (45) days before cancellation or material change of any such insurance policies
(ten (10) days in the event of nonpayment of premiums). Tenant shall carry and maintain during the
Term, at its expense such increased amounts of insurance required to be carried under this Section
11(a), and such other types and amounts of insurance covering the Premises and Tenant's operation
therein, as may be reasonably requested by Landlord from time to time, but not in excess of the
amounts and types of insurance then being required by landlords of the Comparable Buildings. If the
use or occupancy of the Premises includes any activity or matter that is or may be excluded from
coverage under a commercial general liability policy (e.g., the sale, service or consumption of
alcoholic beverages), Tenant shall obtain such endorsements to the commercial general liability
policy or otherwise obtain insurance to insure all liability arising from such activity or matter in such
amounts as Landlord may reasonably require. All such insurance policies shall be in form, and issued
by companies with an A.M. Best rating of A-VII or better, reasonably satisfactory to Landlord. If
Tenant fails to comply with the foregoing insurance requirements or to deliver to Landlord the
V
certificates or evidence of coverage required herein within five (5) Business Days after Landlord's
written request, Landlord, in addition to any other remedy available pursuant to this Lease or
otherwise, may, but shall not be obligated to, obtain such insurance and Tenant shall pay to Landlord
within thirty (30) days after Tenant's receipt of an invoice from Landlord, together with reasonable
supporting evidence, the premium costs thereof, plus an administrative fee of five percent (5%) of
such cost.
(b) Landlord's Insurance. Throughout the Term, Landlord shall maintain, as a
minimum, the following insurance policies: (1) property insurance for at least ninety percent (90%)
of the Building's replacement value (excluding property required to be insured by Tenant and the
costs of excavation, foundations, underground utilities and footings), less a commercially reasonable
deductible and/or self -insured retention if Landlord so chooses, and (2) commercial general liability
insurance in an amount of not less than Two Million Dollars ($2,000,000.00) general aggregate for
damages because of personal injury, bodily injury or death, or property damages or destruction
(including loss of use thereof). Landlord may, but is not obligated to, maintain such other insurance
and additional coverages as it may deem appropriate or as required by any of Landlord's Mortgagees.
The cost of all insurance carried by Landlord with respect to the Project shall be included in Operating
Costs. The foregoing insurance policies and any other insurance carried by Landlord shall be for the
sole benefit of Landlord and under Landlord's sole control, and Tenant shall have no right or claim
to any proceeds thereof or any other rights thereunder.
(c) No Subrogation; Waiver of Property Claims. The following waivers in this
Section I I (c) are intended to be cumulative, rather than mutually exclusive.
(1) Policies Other than Property Insurance. Tenant waives all rights
against the Additional Insureds for recovery of damages occurring to the extent those damages are
covered under Tenant's commercial general liability, automobile liability, unibrella/excess liability
or any other insurance policies carried by Tenant related to the Project, the Premises or this Lease
(excluding Tenant's property insurance policy, which is covered in Section I I(c)(2) below), or if
Tenant fails to carry any of such insurance required under this Lease, would ordinarily have been
covered by the required insurance. If any such policy does not allow Tenant to waive rights of
recovery against others prior to a loss, Tenant shall obtain an endorsement from its insurance carrier
waiving the carrier's rights of recovery under subrogation or otherwise against the Additional
Insureds.
(2) Property Insurance Policies. Each of Landlord and Tenant waives any
claim it might have against the other (and in the case of Tenant's waiver, against the other Additional
Insureds) for any damage to, or theft, destruction, loss, or loss of use of, any property, to the extent
the same is insured against under any property insurance policies of the types described in Section
1 I(a) above that cover the Project, the Premises, Landlord's or Tenant's fixtures, personal property,
leasehold improvements, or business (or if the insurance required under this Lease had been carried,
would have been insured against), regardless of whether the negligence of the other party caused
such loss or damage. Additionally, Tenant waives any claim it may have against the Additional
Insureds for any loss to the extent such loss or damage is caused by a terrorist act. Each party shall
cause its insurance carrier to endorse all applicable policies waiving the carrier's rights of recovery
under subrogation or otherwise against the other party as provided hereinabove. For the purposes
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of this Section I I (c)(2), any deductible with respect to a party's property insurance shall be deemed
covered by, and recoverable by such party under, valid and collectible policies of insurance.
(d) Waiver. Tenant agrees that Landlord Parties shall not be liable for, and are
hereby released from any responsibility for, any damage to person or property (or resulting from the
loss of use thereof) that is sustained by any Tenant Party or any person claiming by, through or under
any Tenant Party, including without limitation any such damage caused by any active or passive act,
omission or neglect of any Landlord Party except to the extent such limitation on liability is prohibited
by applicable Law. Nothing in this Section I I(d) shall limit the provisions of Section I l(c) above or
Section 26(b) below. Without limitation, Tenant waives any and all claims against Landlord with
respect to, and agrees that Tenant shall be solely responsible for, any and all damage to, theft of or
loss of any of Tenant's property (including, without limitation, all inventory and merchandise) that
may occur in the Premises, Building or Project. Tenant shall be solely responsible for securing,
safeguarding, and insuring all of its personal property, inventory and merchandise and Tenant hereby
releases Landlord from all liability related to the same.
(e) Indemnities. Subject to the limitations set forth in this Section I I(e) below,
Tenant shall defend, indemnify, and hold harmless the Landlord Parties from and against all claims,
losses, demands, liabilities, actions, penalties, judgments, damages, costs and expenses (including
reasonable attorneys' fees) (collectively, "Claims") suffered or imposed upon or against any
Landlord Party (1) arising from or in connection with any act, omission or negligence of Tenant or
any person claiming by, through or under any Tenant Party, (2) occurring in the Premises, (3) arising
out of the installation, operation, maintenance, repair or removal of any property of any Tenant Party
located in or about the Project, including Tenant's Off -Premises Equipment, if any, and (4) any
breach by Tenant of any representation, covenant or other term contained in this Lease, whether
occurring before, during or after the expiration of the Term. The foregoing indemnity is intended to
apply regardless of any active or passive negligence or fault of the Landlord Parties, even when
Landlord or its representatives and agents are jointly, comparatively, contributively, or concurrently
negligent with Tenant, and regardless of whether liability without fault or strict liability may be
imposed upon the Landlord Parties; however, with respect to any Landlord Party, Tenant's
obligations hereunder shall not apply (i) to the extent any Claim arises from the gross negligence or
willful misconduct of any Landlord Party and is not for any reason (other than Tenant's failure to
cant' the insurance required under Section II(a) above) paid for by the insurance required to be
carried by Tenant hereunder, or (ii) to the extent such obligations are prohibited by applicable Law.
Notwithstanding the foregoing, in the event of the concurrent negligence of any of the Tenant Parties
on the one hand and that of any of the Landlord Parties on the other hand, which concurrent
negligence results in injury or damage to persons or property and relates to the construction,
alteration, repair, addition to, subtraction from, improvement to or maintenance of the Premises,
Common Areas or any other portion of the Project, Tenant's obligation to indemnify the Landlord
Parties as set forth in this Section 11(e) shall be limited to the extent of Tenant's negligence, and that
of the Tenant Parties, including Tenant's proportional share of costs, attorneys' fees, and expenses
incurred in connection with any Claims arising from such injury or damage. The indemnities set
forth in this Lease shall survive termination or expiration of this Lease and shall not terminate or be
waived, diminished or affected in any manner by any abatement or apportionment of Rent under any
provision of this Lease. If any proceeding is filed for which indemnity is required hereunder, the
indemnifying party agrees, upon request therefor, to defend the indemnified party in such proceeding
at its sole cost utilizing counsel satisfactory to the indemnified party. The indemnities set forth herein
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are intended to specifically cover actions brought by the indemnifying party's own employees. Such
indemnities are specifically and expressly intended to constitute waivers by the indemnifying party
of its immunity, if any, under Washington's Industrial Insurance Act (Title 51 RCW, as amended,
and under any substitute or replacement statute), to the extent necessary to provide the other party
with a full and complete indemnity from claims made by the indemnifying party and its employees,
to the extent provided herein. This waiver and agreement was specifically negotiated by Landlord
and Tenant and is solely for the benefit of Landlord and Tenant and their successors and assigns and
is not intended as a waiver of Tenant's rights of immunity under said industrial insurance for any
other purpose.
12. Subordination; Attornment• Notice to Landlord's Mortgagee.
(a) Subordination. This Lease shall be subordinate to any deed of trust,
mortgage, or other security instrument (each, a "Mortgage"), or any ground lease, master lease, or
primary lease (each, a "Primary Lease"), that now or hereafter covers all or any part of the Premises
(the mortgagee under any such Mortgage, beneficiary under any such deed of bust or other security
instrument, or the lessor under any such Primary Lease is referred to herein as a "Landlord's
Mortgagee"), provided that upon any foreclosure of any such Mortgage or delivery of a deed in lieu
thereof, or upon any termination of a Primary Lease, Landlord's successor shall agree to accept this
Lease and not disturb Tenant's occupancy, so long as Tenant timely pays the Rent and observes and
performs the terns, covenants and provisions of this Lease to be observed or performed by Tenant.
Any Landlord's Mortgagee may elect, at any time, unilaterally, to make this Lease superior to its
Mortgage, Primary Lease, or other interest in the Premises by so notifying Tenant in writing. The
provisions of this Section 12(a) shall be self -operative and no further instrument of subordination
shall be required; however, in confirmation of such subordination, Tenant shall execute and return to
Landlord (or such other person designated by Landlord) within ten (10) days after request therefor
such documentation, in recordable form if required, as a Landlord's Mortgagee may reasonably
request to evidence the subordination of this Lease to such Landlord's Mortgagee's Mortgage or
Primary Lease (including a subordination, non -disturbance and attormnent agreement) or, if the
Landlord's Mortgagee so elects, the subordination of such Landlord's Mortgagee's Mortgage or
Primary Lease to this Lease.
(b) Attornment. Tenant shall attorn to any person succeeding to Landlord's
interest in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale,
termination of lease, or otherwise, upon such person's request, and shall execute such agreements
confmning such attainment as such person may reasonably request.
(c) Notice to Landlord's Mortgagee. Tenant shall not seek to enforce any
remedy it may have for any default on the part of Landlord without first giving written notice by
certified mail, return receipt requested, specifying the default in reasonable detail, to any Landlord's
Mortgagee whose address has been given to Tenant, and affording such Landlord's Mortgagee a
reasonable opportunity to perform Landlord's obligations hereunder.
(d) Landlord's Mortgagee's Protection Provisions. If a Landlord's Mortgagee
or any successor in interest thereto shall succeed to the interest of Landlord under this Lease, neither
such Landlord's Mortgagee nor any such successor in interest shall be: (1)liable for any act or
omission of any prior lessor (including Landlord); (2) bound by, or subject to any offset rights with
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respect to, any Rent that Tenant might have paid for more than the current month to any prior lessor
(including Landlord), and all such Rent shall remain due and owing, notwithstanding such advance
payment; (3) bound by any Security Deposit or advance rental deposit made by Tenant that is not
delivered or paid over to such Landlord's Mortgagee or successor in interest and with respect to which
Tenant shall look solely to Landlord for refund or reimbursement; (4) bound by any termination,
amendment or modification of this Lease made without such Landlord's Mortgagee's consent and
written approval, except for those terminations, amendments and modifications permitted to be made
by Landlord without such Landlord's Mortgagee's consent pursuant to the terms of the loan and/or
lease documents between Landlord and such Landlord's Mortgagee; (5) subject to the defenses or
counterclaims that Tenant might have against any prior lessor (including Landlord); (6) subject to the
credits or offsets that Tenant might have against any prior lessor (including Landlord) except for
those offset rights (A) that do not pertain to any Rent that Tenant might have paid for more than the
current month to any prior lessor (including Landlord), (B) that are expressly provided in this Lease,
(C) that relate to periods of time following the acquisition of the Building by such Landlord's
Mortgagee or successor in interest, and (D) for which Tenant has provided written notice to such
Landlord's Mortgagee and provided such Landlord's Mortgagee a reasonable opportunity to cure the
event giving rise to such offset event; and (7) bound by any covenant to perform (including any
covenant to complete) any renovation or construction in the Premises or to pay any sums to Tenant
in connection therewith, in either case arising or accruing prior to the date of the conveyance of
Landlord's interest in this Lease. Neither a Landlord's Mortgagee nor any successor in interest
thereto shall have any liability or responsibility under or pursuant to the terms of this Lease or
otherwise prior to the date such Landlord's Mortgagee or successor in interest succeeds to the interest
of Landlord under this Lease or after such Landlord's Mortgagee or successor in interest ceases to
own an interest in the Project. Nothing in this Lease shall be construed to require a Landlord's
Mortgagee or successor in interest thereto to see to the application of the proceeds of any loan, and
Tenant's agreements set forth herein shall not be impaired on account of any modification of the
documents evidencing and securing any loan.
(e) If Tenant desires to obtain a loan secured by Tenant's personal property in the
Premises and requests that Landlord execute a lien waiver in connection therewith, Landlord shall,
in its reasonable discretion, based upon Landlord's review of Tenant's financial condition, agree to
subordinate its lien rights to the rights of Tenant's lender pursuant to a lien subordination on
Landlord's standard form, provided that Tenant delivers such request in writing to Landlord together
with a nonrefundable processing fee in the amount of Five Hundred Dollars ($500.00).
Notwithstanding the foregoing, however, if Landlord incurs processing costs (including attorneys'
fees) in connection with any such request which exceed Five Hundred Dollars ($500.00), then Tenant
shall reimburse Landlord for such excess within three (3) business days following Tenant's receipt
of invoice(s) therefor from Landlord. Nothing in this paragraph shall permit Tenant to encumber its
leasehold interest in the Premises.
13. Rules and Regulations. Tenant shall comply with the rules and regulations of the
Project that are adopted by Landlord and attached hereto as Exhibit C. Landlord may, from time to
time, change such rules and regulations for the safety, care, or cleanliness of the Project and related
facilities, provided that such changes are applicable to all tenants of the Project, will not unreasonably
interfere with Tenant's use of the Premises, and are enforced by Landlord in a nondiscriminatory
manner. Tenant shall be responsible for the compliance with such rules and regulations by each
Tenant Party (and any modification thereto of which Tenant has received notice).
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14. Condemnation.
(a) Total Taking. If the entire Building or Premises are taken by right of eminent
domain or conveyed in lieu thereof (a "Taking"), this Lease shall terminate as of the date of the
Taking.
(b) Partial Taking — Tenant's Rights. If any part of the Building becomes
subject to a Taking and such Taking will prevent Tenant from conducting on a permanent basis its
business in the Premises in a manner reasonably comparable to that conducted immediately before
such Taking, then Tenant may terminate this Lease as of the date of such Taking by giving notice to
Landlord within thirty (30) days after the Taking, and Basic Rent and Additional Rent shall be
apportioned as of the date of such Taking. If Tenant does not terminate this Lease, then Basic Rent
and Additional Rent shall be abated on a reasonable basis as to that portion of the Premises rendered
untenantable by the Taking.
(c) Partial Taking — Landlord's Rights. If any material portion, but less than
all, of the Building becomes subject to a Taking, or if Landlord is required to pay any of the proceeds
arising from a Taking to a Landlord's Mortgagee, then Landlord may terminate this Lease by
delivering notice thereof to Tenant within thirty (30) days after such Taking, and Basic Rent and
Additional Rent shall be apportioned as of the date of such Taking. If Landlord does not so terminate
this Lease, then this Lease will continue, but if any portion of the Premises has been taken, Rent shall
abate as provided in the last sentence of Section 14(b) above.
(d) Temporary Taking. If all or any portion of the Premises becomes subject to
a Taking for a limited period of time, this Lease shall remain in full force and effect and Tenant shall
continue to perform all of the terms, conditions and covenants of this Lease, including the payment
of Basic Rent, Additional Rent and all other amounts required hereunder. If any such temporary
Taking terminates prior to the expiration of the Term, Tenant shall restore the Premises as nearly as
possible to the condition prior to such temporary Taking, at Tenant's sole cost and expense. Landlord
shall be entitled to receive the entire award for any such temporary Taking, except that Tenant shall
be entitled to receive the portion of such award that (1) compensates Tenant for its loss of use of the
Premises within the Term and (2) reimburses Tenant for the reasonable out-of-pocket costs actually
incurred by Tenant to restore the Premises as required by this Section 14(d).
(e) Award. If any Taking occurs, then Landlord shall receive the entire award or
other compensation for the Land, the Building, and other improvements taken; however, Tenant may
separately pursue a claim (to the extent it will not reduce Landlord's award) against the condemnor
for the value of Tenant's personal property that Tenant is entitled to remove under this Lease, moving
costs, loss of business, and other claims it may have.
15. Fire or Other Casualty.
(a) Repair Estimate. If the Premises or the Building are damaged by fire or other
casualty (a "Casualty"), Landlord shall, within ninety (90) days after such Casualty, deliver to Tenant
a good faith estimate (the "Damage Notice") of the time needed to repair the damage caused by such
Casualty.
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(b) Tenant's Rights. If a material portion of the Premises is damaged by Casualty
such that Tenant is prevented from conducting its business in the Premises in a manner reasonably
comparable to that conducted immediately prior to such Casualty and Landlord estimates that the
damage caused by such Casualty cannot be repaired within one hundred eighty (180) days after the
commencement of repairs (the "Repair Period"), then Tenant may terminate this Lease by delivering
written notice to Landlord of its election to terminate within thirty (30) days after the Damage Notice
has been delivered to Tenant.
(c) Landlord's Rights. If a Casualty damages the Premises or a material portion
of the Building and (1) Landlord estimates that the damage to the Premises cannot be repaired within
the Repair Period; (2) the damage to the Premises exceeds fifty percent (50%) of the replacement cost
thereof (excluding foundations and footings), as estimated by Landlord, and such damage occurs
during the last two (2) years of the Term; (3) regardless of the extent of damage to the Premises, the
damage is not fully covered by Landlord's insurance policies or Landlord makes a good faith
determination that restoring the Building would be uneconomical; or (4) Landlord is required to pay
any insurance proceeds arising out of the Casualty to a Landlord's Mortgagee, then Landlord may
terminate this Lease by giving written notice of its election to terminate within thirty (30) days after
the Damage Notice has been delivered to Tenant.
(d) Repair Obligation. If neither party elects to terminate this Lease following a
Casualty, then Landlord shall, within a reasonable time after such Casualty, begin to repair the
Premises and shall proceed with reasonable diligence to restore the Premises to substantially the same
condition as had existed immediately prior to such Casualty; provided, however, that Landlord shall
not be required to repair or replace any alterations, additions, improvements or betterments within
the Premises, including any Alterations (which shall be promptly and with due diligence repaired and
restored by Tenant at Tenant's sole cost and expense), or any furniture, equipment, trade fixtures or
personal property of Tenant or others in the Premises or the Building. If this Lease is terminated
under the provisions of this Section 15, Landlord shall be entitled to the full proceeds of the insurance
policies providing coverage for all alterations, additions, improvements and betterments in the
Premises, including the Alterations (and, if Tenant has failed to maintain insurance on such items as
required by this Lease, Tenant shall pay Landlord an amount equal to the proceeds Landlord would
have received had Tenant maintained insurance on such items as required by this Lease).
(e) Abatement of Rent. If the Premises are damaged by Casualty, Rent for the
portion of the Premises rendered untenantable by the damage shall be abated in the proportion of the
rentable square footage of the Premises made untenantable thereby to the total rentable square footage
of the Premises from the date of damage until the completion of Landlord's repairs (or until the date
of termination of this Lease by Landlord or Tenant as provided above, as the case may be) unless a
Tenant Party caused such damage, in which case Tenant shall continue to pay Rent without
abatement. In addition, if a material portion of the Project is damaged by Casualty such that Tenant
is prevented from conducting business in the Premises, Rent shall abate in full until Tenant is again
able to conduct business in the Premises (or until the termination of this Lease by Landlord or Tenant
as provided above, as the case may be) unless a Tenant Party caused the damage, in which case Tenant
shall continue to pay Rent without abatement.
16. Personal Property Taxes. Tenant shall be liable for all taxes levied or assessed
against personal property, furniture, or fixtures placed by Tenant in the Premises or in or on the
24
Building or Project. If any taxes for which Tenant is liable are levied or assessed against Landlord
or Landlord's property and Landlord elects to pay the same, or if the assessed value of Landlord's
property is increased by inclusion of such personal property, furniture or fixtures and Landlord elects
to pay the taxes based on such increase, then Tenant shall pay to Landlord, within thirty (30) days
following request therefor, the part of such taxes for which Tenant is primarily liable hereunder;
however, Landlord shall not pay such amount if Tenant notifies Landlord that it will contest the
validity or amount of such taxes before Landlord makes such payment, and thereafter diligently
proceeds with such contest in accordance with Law and if the nonpayment thereof does not pose a
threat of loss or seizure of the Project or interest of Landlord therein or impose any fee or penalty
against Landlord.
17. Events of Default. Each of the following occurrences shall be an "Event of Default"
(a) Payment Default. Tenant's failure to pay Rent within five (5) business days
after Landlord has delivered notice to Tenant that the same is due; however, an Event of Default shall
occur hereunder without any obligation of Landlord to give any notice if Tenant fails to pay Rent
when due and, during the twelve (12)-month interval preceding such failure, Landlord has given
Tenant notice of failure to pay Rent on two (2) or more occasions;
(b) Abandonment. Tenant abandons or vacates the Premises or any substantial
portion thereof,
(c) Subordination. Tenant fails to provide any documentation evidencing
subordination of this Lease after request therefor pursuant to Section 12(a) above and such failure
continues for five (5) days after Tenant's receipt of a second request for such documentation from
Landlord's or Landlord's Mortgagee's;
(d) Estoppel. Tenant fails to provide any estoppel certificate or guarantor's
statement requested by Landlord pursuant to Section 26(c) below and such failure continues for
five (5) business days after Tenant's receipt of Landlord's second request for such estoppel
certificate;
(e) Insurance. Tenant fails to procure, maintain and deliver to Landlord evidence
of the insurance policies and coverages as required under Section 11(a) above if such failure continues
for five (5) Business Days after Tenant's receipt of Landlord's notice of such failure;
(f) Mechanic's Liens. Tenant fails to pay and release of record, or diligently
contest and bond around, any mechanic's lien filed against the Premises or the Project for any work
performed, materials furnished, or obligation incurred by or at the request of Tenant, within the time
and in the manner required by Section 8(d) above;
(g) Misrepresentation. Any material misrepresentation herein, or material
misrepresentation or omission in any financial statements or other materials provided by Tenant or
any guarantor of Tenant's obligations hereunder in connection with negotiating this Lease or in
connection with any Transfer under Section 10 above;
(h) OFAC/FCPA Representation. Tenant is or becomes in breach of
Section 26(w) below;
25
(i) Other Defaults. Except as otherwise provided in this Section 17 or elsewhere
in this Lease, Tenant's failure to perform, comply with, or observe any other agreement or obligation
of Tenant under this Lease and the continuance of such failure for a period of more than thirty (30)
days after Landlord has delivered to Tenant notice thereof or such shorter period expressly provided
elsewhere in this Lease (provided, if the nature of Tenant's failure is such that more time is reasonably
required in order to cure, an Event of Default shall not be deemed to have occurred and such failure
may be cured if Tenant commences to cure such failure within such period and thereafter reasonably
and diligently pursues the cure thereof to completion, such period in no event to exceed ninety (90)
days from the date of Landlord's original default notice);
0) Insolvency. The filing of a petition by or against Tenant (the term "Tenant"
shall include, for the purpose of this Section 170), any guarantor of Tenant's obligations hereunder)
(1) in any bankruptcy or other insolvency proceeding; (2) seeking any relief under any state or federal
debtor relief law; (3) for the appointment of a liquidator or receiver for all or substantially all of
Tenant's property or for Tenant's interest in this Lease; (4) for the reorganization or modification of
Tenant's capital structure; or (5) in any assignment for the benefit of creditors proceeding; however,
if such a petition is filed against Tenant, then such filing shall not be an Event of Default unless
Tenant fails to have the proceedings initiated by such petition dismissed within ninety (90) days after
the filing thereof; and
(k) Liquidation or Dissolution. Tenant or any Guarantor shall be liquidated or
dissolved or shall begin proceedings towards liquidation or dissolution.
18. Remedies. Upon any Event of Default, Landlord may, in addition to all other rights
and remedies afforded Landlord hereunder or by law or equity, take any one or more of the following
actions:
(a) Termination of Lease. Terminate this Lease by giving Tenant notice thereof,
in which event Tenant shall pay to Landlord the sum of (1) all Rent accrued hereunder through the
date of termination, (2) all amounts due under Section 19(a) below, and (3) an amount equal to (A) the
total Rent that Tenant would have been required to pay for the remainder of the Term discounted to
present value at a per annum rate equal to the "Prime Rate" as published on the date this Lease is
terminated by The Wall Street Journal, Northwest Edition, in its listing of "Money Rates" plus one
percent (1%), minus (B) the then -present fair rental value of the Premises for such period, similarly
discounted.
(b) Termination of Possession. Terminate Tenant's right to possess the Premises
without terminating this Lease by giving notice thereof to Tenant, in which event Tenant shall pay to
Landlord (1) all Rent and other amounts accrued hereunder to the date of termination of possession,
(2) all amounts due from time to time under Section 19(a) below, and (3) all Rent and other net sums
required hereunder to be paid by Tenant during the remainder of the Term, diminished by any net
sums thereafter received by Landlord through reletting the Premises during such period, after
deducting all costs incurred by Landlord in reletting the Premises. If Landlord elects to proceed under
this Section 18(b), Landlord may remove all of Tenant's property from the Premises and store the
same in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, without
becoming guilty of trespass, or liable for any loss or damage that may be occasioned thereby.
Landlord shall use commercially reasonable efforts to relet the Premises on such terms as Landlord
26
in its sole discretion may determine (including a lease tern different from the Term, rental
concessions, and alterations to, and improvement of, the Premises); however, Landlord shall not be
obligated to accept any prospective tenant proposed by Tenant unless such proposed tenant meets all
of Landlord's then -existing leasing criteria. Landlord shall not be liable for, nor shall Tenant's
obligations hereunder be diminished because of, Landlord's failure to relet the Premises or to collect
rent due for such reletting. Tenant shall not be entitled to the excess of any consideration obtained
by reletting over the Rent due hereunder. Reentry by Landlord in the Premises shall not affect
Tenant's obligations hereunder for the unexpired Term; rather, Landlord may, from time to time,
bring an action against Tenant to collect amounts due by Tenant, without the necessity of Landlord's
waiting until the expiration of the Term. Unless Landlord delivers written notice to Tenant expressly
stating that it has elected to terminate this Lease, all actions taken by Landlord to dispossess or
exclude Tenant from the Premises shall be deemed to be taken under this Section 18(b). If Landlord
elects to proceed under this Section 18(b), it may at any time elect to terminate this Lease under
Section 18(a) above.
(c) Perform Acts on Behalf of Tenant. Perform any act Tenant is obligated to
perform under the terms of this Lease (and enter upon the Premises in connection therewith if
necessary) in Tenant's name and on Tenant's behalf, without being liable for any claim for damages
therefor, and Tenant shall reimburse Landlord on demand for any expenses which Landlord may
incur in thus effecting compliance with Tenant's obligations under this Lease (including collection
costs and legal expenses), plus interest thereon at the Default Rate.
19. Payment by Tenant; Non -Waiver; Cumulative Remedies.
(a) Payment by Tenant. Upon any Event of Default, Tenant shall pay to
Landlord all costs incurred by Landlord (including court costs and reasonable attorneys' fees and
expenses) in (1) obtaining possession of the Premises, (2) removing and storing Tenant's or any other
occupant's property, (3) repairing, restoring, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant, (4) if Tenant is dispossessed of the Premises and this Lease
is not terminated, reletting all or any part of the Premises (including brokerage commissions, cost of
tenant finish work, and other costs incidental to such reletting), (5) performing Tenant's obligations
that Tenant failed to perform, and (6) enforcing, or advising Landlord of, its rights, remedies, and
recourses arising out of the default. To the firll extent permitted by Law, Landlord and Tenant agree
that the federal and state courts of the State of Washington shall have exclusive jurisdiction over any
matter relating to or arising from this Lease and the parties' rights and obligations under this Lease.
(b) No Waiver. Landlord's acceptance of Rent following an Event of Default
shall not waive Landlord's rights regarding such Event of Default. No waiver by Landlord of any
violation or breach of any of the terms contained herein shall waive Landlord's rights regarding any
future violation of such term. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due, regardless of any
endorsement or other statement on any instrument delivered in payment of Rent or any writing
delivered in connection therewith; accordingly, Landlord's acceptance of a partial payment of Rent
shall not constitute an accord and satisfaction of the full amount of the Rent that is due.
(c) Cumulative Remedies. Any and all remedies set forth in this Lease: (1) shall
be in addition to any and all other remedies Landlord may have at law or in equity, (2) shall be
27
cumulative, and (3) may be pursued successively or concurrently as Landlord may elect. The exercise
of any remedy by Landlord shall not be deemed an election of remedies or preclude Landlord from
exercising any other remedies in the future.
20. Surrender of Premises. No act by Landlord shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a surrender of the Premises shall be valid
unless it is in writing and signed by Landlord. At the expiration or termination of this Lease, Tenant
shall deliver to Landlord the Premises with all improvements located therein in good repair and
condition, free of Hazardous Materials placed on the Premises during the Term, with all Cables
removed, broom -clean, reasonable wear and tear (and condemnation and Casualty damage not caused
by Tenant, as to which Sections 14 and 15 above, respectively, shall control) excepted, and shall
deliver to Landlord all keys to the Premises. Provided that Tenant has performed all of its obligations
hereunder, Tenant may remove all unattached trade fixtures, furniture, and personal property placed
in the Premises or elsewhere in the Building or Project (including Tenant's Off -Premises Equipment,
if any) by Tenant (but Tenant may not remove any such item that was paid for, in whole or in part,
by Landlord unless Landlord requires such removal). Additionally, at Landlord's option, Tenant
shall remove such alterations, additions, improvements, trade fixtures, personal property, equipment
(including Tenant's Off -Premises Equipment, if any), and furniture as Landlord may request;
however, Tenant shall not be required to remove any alteration, addition or improvement to the
Premises or the Project if Landlord has specifically agreed in writing that the alteration, addition or
improvement in question need not be removed. Tenant shall repair all damage caused by such
removal. All items not so removed shall, at Landlord's option, become the property of Landlord
without additional payment to Tenant or credit against Rent be deemed to have been abandoned by
Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items. The provisions of this
Section 20 shall survive the expiration or earlier termination of the Term.
21. Holding Over. If Tenant, or anyone claiming under Tenant, fails to vacate and
surrender the Premises to Landlord at the end of the Term, then Tenant shall be a tenant at sufferance
and, in addition to all other damages and remedies to which Landlord may be entitled for such holding
over Tenant shall pay Rent at a monthly rate equal to 150% of the sum of the Basic Rent plus 100%
of the sum of the Additional Rent payable during the last calendar month of the Term for the entire
holdover period, calculated and pro -rated on a daily basis, and Tenant shall otherwise continue to be
subject to all of Tenant's obligations under this Lease. No holding over by Tenant after the end of
the Term shall be construed to extend this Lease If Tenant fails to vacate and surrender the Premises
to Landlord at the end of the Term, in addition to any other liabilities to Landlord accruing therefrom,
Tenant shall protect, defend, indemnify and hold Landlord harmless from all losses, costs (including
reasonable attorneys' fees) and liabilities resulting from such failure, including any claims made by
any succeeding tenant founded upon such failure to vacate and surrender the Premises to Landlord,
and any lost profits to Landlord resulting therefrom. Notwithstanding the foregoing, any holding
over with the express written consent of Landlord shall constitute this Lease a lease from
month -to -month (and shall not constitute a renewal of this Lease for any further term or an extension
of the Term), and Tenant shall pay Rent at a monthly rate equal to one hundred fifty percent (150%)
of the sum of the Basic Rent plus the Additional Rent payable during the last calendar month of the
Term, calculated and prorated on a daily basis, and Tenant shall otherwise be subject to all of the
terms and conditions of this Lease. The provisions of this Section 21 shall not be deemed to limit or
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constitute a waiver of any other rights or remedies of Landlord provided herein or at law. The
provisions of this Section 21 shall survive the expiration or earlier termination of the Term.
22. Certain Rights Reserved by Landlord. Provided that the exercise of such rights
does not materially and unreasonably interfere with Tenant's access to or occupancy of the Premises,
Landlord shall have the following rights:
(a) Building Operations. To decorate and to make inspections, repairs,
alterations, additions, changes, or improvements, whether structural or otherwise, in and about the
Project, or any part thereof; to enter upon the Premises (after giving Tenant reasonable prior notice
thereof, which may be oral notice, except in cases of real or apparent emergency, in which case no
notice shall be required) and, during the continuance of any such work, to temporarily close doors,
entryways, public space, and corridors in the Building; to interrupt or temporarily suspend Building
services and facilities; to change the name of the Building; and to change the arrangement and
location of entrances or passageways, doors, doorways, corridors, elevators, stairs, restrooms, or other
public parts of the Building. Noise, dust or vibration or other incidents of construction, shall in no
way constitute a constructive eviction of Tenant, affect this Lease or impose any liability on Landlord.
(b) Security. To take such reasonable measures as Landlord deems advisable for
the security of the Building and its occupants; evacuating the Building for cause, suspected cause, or
for drill purposes; temporarily denying access to the Building; and closing the Building after normal
business hours and on Sundays and Holidays, subject, however, to Tenant's right to enter when the
Building is closed after normal business hours under such reasonable regulations as Landlord may
prescribe from time to time;
(c) Current and Prospective Insurers Purchasers, Investors and Mortgagees.
Subject to Section 22(e) below, to enter the Premises or any portion thereof at all reasonable hours
upon at least twenty-four (24) hours' prior notice (which may be written, delivered by e-mail or oral)
to show the Premises or any portion thereof to current or prospective insurers, purchasers, investors
or mortgagees and their respective brokers; and
(d) Prospective Tenants. Subject to Section 22(e) below, at any time during the
last six (6) months of the Term (or earlier if Tenant has notified Landlord in writing that it does not
desire to renew the Term) or at any time following the occurrence of an Event of Default, to enter the
Premises or any portion thereof at all reasonable hours to show the Premises or any portion thereof
to prospective tenants and their brokers.
Notwithstanding anything to the contrary in this Lease, including in this Section 22, Landlord may
enter the Premises at any time, without prior notice, to (i) perform required services, including
janitorial; (ii) take possession of the Premises or any portion thereof according to Section 18 above;
(iii) exercise any of its other rights under Section 18 above; or (iv) post notices of nonresponsibility.
Upon entry, Landlord may take such steps, including temporary closure of the Premises or any portion
thereof, as are reasonably required to accomplish the purposes set forth in this Section 22. Landlord
shall at all times have a key with which to unlock all the doors in the Premises. In an emergency,
Landlord shall have the right to use any means Landlord may deem proper to open the doors in and
to the Premises. Any entry into the Premises by Landlord as provided herein shall not be deemed to
be a forcible or unlawful entry into or detainer of, or a constructive eviction of Tenant from, any
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portion of the Premises, and Tenant shall not be entitled to any damages or abatement of Rent in
connection with such entry. However, Landlord's rights under this paragraph are subject to Section
22(e) below.
(e) Notwithstanding anything to the contrary, Landlord acknowledges that due to
Tenant's use of portions of the Premises for the storage of certain items (such as personal records,
firearms and certain equipment), Tenant needs to ensure that it can carefully monitor such areas.
Accordingly, Landlord agrees (i) to abide by Tenant's reasonable requirements with respect to visitors
to the Premises; and (ii) that Tenant may provide an escort for any visitors to the Premises. Tenant
agrees promptly to provide such escort upon request. The terms of this paragraph shall not apply to
landlord in the event of an emergency, and in the event of an emergency in which Landlord needs to
access the Premises Landlord shall use reasonable efforts to notify Tenant of the same as soon as
reasonably possible.
23. Intentionally deleted.
24. Sienaee. Tenant shall not install any signage that is visible in or from public corridors,
the Common Area or the exterior of the Premises without Landlord's prior written consent, which
such consent may be withheld or conditioned at Landlord's sole and absolute discretion. If Tenant is
permitted to install any signage at the Project, Tenant shall not be entitled to make any changes to
such signage without first obtaining Landlord's written approval thereof, which Landlord may
withhold in its sole and absolute discretion. Landlord shall have the right, at Landlord's cost, to
relocate, redesign and/or reconstruct Tenant's signage, if any, from time -to -time. Tenant shall pay to
Landlord, within ten (10) business days after demand, from time -to -time, all costs attributable to the
fabrication, installation, insurance, lighting (if applicable), maintenance and repair of Tenant's
signage, plus a pro-rata share of the costs and maintenance, insurance and repair of the signage. Upon
termination or expiration of the Lease, or upon the earlier termination of Tenant's signage rights if
such rights are granted, Landlord shall have the right to permanently remove the Tenant's signage
and to restore and repair all damage resulting from such removal, and Tenant shall pay to Landlord,
within thirty (30) days after demand, all costs incurred in connection with such removal, restoration
and repair. Any signage rights granted by Landlord to Tenant throughout the Term of the Lease are
personal to the original tenant executing this Lease (the "Original Tenant") and any assignee of the
Original Tenant's entire interest in the Lease under a permitted Transfer entered into pursuant to
Section 10 of this Lease ("Permitted Assignee"), and may not be assigned or exercised, voluntarily
or involuntarily, by or to, any person or entity other than the Original Tenant or a Permitted Assignee.
Any change in signage as a result of such permitted Transfer shall be subject to Landlord's prior
written approval, which shall be at Landlord's sole and absolute discretion, and shall be at the
Tenant's sole cost and expense. Notwithstanding the above, Landlord shall provide Tenant, at
Landlord's sole cost and expense, building standard lobby, suite and directional signage.
25. Telecommunications and Communications.
(a) Tenant's Telecommunications Providers. Tenant and its
telecommunications companies, including local exchange telecommunications companies and
alternative access vendor services companies, shall have no right of access to and within the Building
or any other portion of the Project, for the installation and operation of telecommunications systems,
including voice, video, data, Internet, and any other services provided over wire, fiber optic,
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microwave, wireless, and any other transmission systems ("Telecommunications Services"), for
part or all of Tenant's telecommunications within the Building and from the Building to any other
location without Landlord's prior consent, which consent shall not be unreasonably withheld,
conditioned or delayed, and subject to the prior execution and delivery of an access agreement on
Landlord's standard form. All providers of Telecommunications Services shall be required to
comply with the rules and regulations of the Building, applicable Laws and Landlord's policies and
practices for the Building. Tenant acknowledges that Landlord shall not be required to provide or
arrange for any Telecommunications Services and that Landlord shall have no liability to any Tenant
Party in connection with the installation, operation or maintenance of Telecommunications Services
or any equipment or facilities relating thereto. Tenant, at its cost and for its own account, shall be
solely responsible for obtaining all Telecommunications Services.
(b) Cable Work. Tenant may install, maintain, replace and remove (collectively,
the "Cable Work") and use any communications or computer wires, cables, fibers, comrections and
related telecommunications equipment and/or other facilities for telecommunications (collectively,
"Cable(s)") within or serving the Premises, provided: (1) Tenant shall obtain Landlord's prior
approval, which approval shall not be unreasonably withheld, delayed or conditioned, shall use an
experienced, licensed and qualified contractor approved by Landlord, which approval shall not be
unreasonably withheld, delayed or conditioned, and shall comply with provisions of Section 8 above
and shall not interfere with the use of any then -existing Cables within or serving the Building, (2) an
acceptable number of spare Cables and space for additional Cables shall be maintained for existing
and future occupants of the Building, as determined in Landlord's reasonable opinion, (3) if Tenant
at any time uses any equipment that may create an electromagnetic field exceeding the normal
insulation ratings of ordinary twisted pair riser cable or cause radiation higher than normal
background radiation, the Cables therefor (including riser Cables) shall be appropriately insulated to
prevent such excessive electromagnetic fields or radiation, (4) the Cables shall be clearly marked
with adhesive plastic labels (or plastic tags attached to such Cables with wire) to show Tenant's name,
suite number, telephone number and the name of the person to contact in the case of an emergency
(A) every four feet (4') outside the Premises (including the electrical room risers and other Common
Areas), and (B) at the Cables' termination point(s), and (5) Tenant shall pay all costs in connection
therewith. Landlord shall at all times maintain exclusive control over all risers (including their use)
in the Building. Landlord reserves the right to require that Tenant remove any Cables located in or
serving the Premises that are installed by or on behalf of Tenant in violation of these provisions, or
which are at any time in violation of any applicable Laws or represent a dangerous or potentially
dangerous condition, within three (3) days after receipt of notice by Tenant or such longer period of
time as is reasonably necessary.
(c) Landlord's Reserved Rights. Landlord may (but shall not have the
obligation to) (i) install new Cables at the Building, (ii) create additional space for Cables at the
Building, and (iii) reasonably direct, monitor and/or supervise the installation, maintenance,
replacement and removal of the allocation and periodic reallocation of available space (if any) for,
and the allocation of excess capacity (if any) on, any Cables now or hereafter installed at the Building
by Landlord, Tenant or any other person. Such rights shall not be in limitation of other rights that
may be available to Landlord by Law, in equity or otherwise. If Landlord exercises any such rights,
Landlord may charge Tenant for such costs attributable to Tenant, or may include those costs and all
other such costs in Operating Costs (including, costs for acquiring and installing Cables and risers to
accommodate new Cables and spare Cables, any associated computerized system and software for
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maintaining records of Cable connections, and the fees of any consulting engineers and other experts);
provided, any capital expenditures included in Operating Costs hereunder shall be amortized
(including interest on the unamortized cost) over the period of time prescribed by Section 4(b) above.
(d) Removal Obligations. Notwithstanding anything to the contrary contained in
this Lease, Tenant shall remove any or all Cables within or serving the Premises upon expiration or
earlier termination of this Lease. If Tenant fails to remove any such Cables, or violates any other
provision of this Section 25, Landlord may, after twenty (20)-days' notice to Tenant, remove such
Cables or remedy such other violation, at Tenant's expense (without limiting Landlord's other
remedies available under this Lease, at Law or in equity), which amount plus five percent (5%)
thereof shall be paid by Tenant within thirty (30) days after Tenant's receipt of an invoice therefor,
together with reasonable supporting evidence. Tenant shall not, without the prior consent of Landlord
in each instance (which may be withheld in Landlord's sole discretion), grant to any third party a
security interest in, or lien on, any Cables, and any such security interest or lien granted without
Landlord's consent shall be null and void. Notwithstanding anything to the contrary contained in this
Lease, and without limiting the provisions of Section 25(a) above, except to the extent arising from
the intentional or grossly negligent acts of Landlord or Landlord's agents or employees, Landlord
shall have no liability for damages arising from, and Landlord does not warrant that the Tenant's use
of any Cable will be free from the following (collectively, "Cable Problems"): (1) any
eavesdropping or wiretapping by unauthorized parties, (2) any failure of any Cable to satisfy Tenant's
requirements, or (3) any shortages, failures, variations, interruptions, disconnections, loss or damage
caused by the installation, maintenance, replacement, use or removal of Cables or by any failure of
the environmental conditions or the power supply for the Building to conform to any requirements
for the Cables or any associated equipment, or any other problems associated with any Cable by any
other cause. Under no circumstances shall any Cable Problems be deemed an actual or constructive
eviction of Tenant, render Landlord liable to Tenant for abatement of Rent or otherwise, or relieve
Tenant from performance of Tenant's other obligations under this Lease. Landlord in no event shall
be liable for damages by reason of loss of profits, business interruption or other consequential damage
arising from any Cable Problems. The provisions of this Section 25 shall survive the expiration or
earlier termination of this Lease.
26. Miscellaneous.
(a) Landlord Transfer. Landlord may transfer any portion of the Project and any
of its rights under this Lease, in the Project and in any other property referred to herein. If Landlord
assigns its rights under this Lease, then Landlord shall thereby be released from any further
obligations hereunder arising after the date of transfer, provided that the assignee assumes in writing
Landlord's obligations hereunder arising from and after the transfer date.
(b) Liability.
(1) The liability of the Landlord Parties to Tenant (or any person or entity
claiming by, through or under Tenant) under the terns of this Lease or for any matter relating to or
arising out of the occupancy or use of the Premises and/or other areas of the Project shall be limited
to Tenant's actual direct, but not consequential, damages therefor and shall be recoverable only from
the interest of Landlord in the Project; further provided that, notwithstanding anything to the contrary,
the liability of the Landlord Parties to Tenant (or any person or entity claiming by, through or under
32
Tenant) under the terms of this Lease or for any matter relating to or arising out of the occupancy or
use of the Premises and/or other areas of the Project shall only be enforced against Landlord's equity
interest in the Project up to a maximum of Ten Million Dollars ($10,000,000.00) and in no event
against any other assets of Landlord, or Landlord's owners, members, managers, officers, directors or
partners, and any liability of Landlord with respect to this Lease shall be so limited and Tenant shall
not be entitled to any judgment in excess of such amount. Tenant agrees to look solely to Landlord's
interest in the Project for the recovery of any judgment against any Landlord Party. No Landlord
Party (other than Landlord) shall be personally liable for any such judgment, award or deficiency
after execution thereon and Tenant hereby waives and releases such personal liability on behalf of
itself and all persons claiming by, through or under Tenant. The limitations of liability contained in
this Section 26(b)(1) shall apply equally and inure to the benefit of the Landlord Parties, present and
future advisors, beneficiaries, participants, representatives and their respective constituent partners,
members, shareholders, trustees, heirs, successors and assigns. Under no circumstances shall any
present or fixture general or limited partner of Landlord (if Landlord is a partnership), member of
Landlord (if Landlord is a limited liability company) or trustee or beneficiary (if Landlord or any
partner or member of Landlord is a trust) have any liability for the performance of Landlord's
obligations under this Lease, nor shall negative capital account of any constituent partner or member
in Landlord (or in a constituent member or partner of Landlord) nor any obligation of any constituent
member or partner of Landlord (or in any other constituent member or partner of Landlord) to restore
a negative capital account or to contribute or loan capital to Landlord (or to any constituent member
or partner of Landlord), at any time be deemed to be the property or an asset of Landlord or such
other constituent member or partner (and neither Tenant nor any of its successors or assigns shall
have any right to collect, enforce or proceed against or with respect to any such negative capital
account of such a member's or partner's obligation to restore or contribute). Notwithstanding any
contrary provision herein, no Landlord Party shall be liable for any injury or damage to, or
interference with, Tenant's business, including loss of profits, loss of rents or other revenues, loss of
business opportunity, loss of goodwill or loss of use, or for any form of special or consequential
damage, in each case however occurring, and whether arising out of or relating to this Lease, common
law or by way of tort. Tenant waives any and all rights it may have to such damages arising out of
or relating to this Lease, including, but not limited to, damages incurred as a result of Landlord's
breach of or default under this Lease, and/or Landlord's breach of common law, tort or statutory
duties owed to Tenant, if any. The foregoing shall be in addition to, and not in limitation of, any
further limitation of liability that might otherwise apply. Notwithstanding the foregoing, none of the
provisions of this Section 26(b)(1) shall be deemed to release any insurance carrier that insures
Landlord's liability to Tenant or to third parties from any obligation to make any payment to Tenant
pursuant to any such insurance policy, it being agreed that any release of Landlord for any obligation
to Tenant is not intended to and does not release Landlord's insurance carrier from the obligation of
paying such loss on Landlord's behalf. The provisions of this Section 26(b)(1) shall survive the
expiration or earlier termination of the Term.
(2) Under no circumstances shall the owners or employees of Tenant have
any personal liability for the performance of Tenant's obligations under this Lease, and Landlord
hereby waives and releases such personal liability on behalf of itself and all persons claiming by,
through or under Landlord. The provisions of this Section 26(b)(2) shall survive the expiration or
earlier termination of the Term.
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(c) Force Maieure. Other than for Tenant's obligations under this Lease that can
be performed by the payment of money (e.g., payment of Rent and maintenance of insurance), neither
party shall be in default under this Lease, or liable or responsible to the other party for, any failure to
perform under this Lease or any delay in performing under this Lease to the extent such failure or
delay is due to strikes, riots, acts of God, shortages of labor or materials, war, terrorist acts or
activities, health emergencies, actions taken by local, state or federal government or agencies, Laws
or restrictions, or any other causes of any kind whatsoever that are beyond the control of such party;
provided, however, that nothing in this Section 26(c) shall (1) permit Tenant to holdover in the
Premises after the expiration or earlier termination of this Lease, or (2) excuse any obligation to pay
Rent, any of Tenant's obligations under Section 9 above, or Section 26(u) below, or any of Tenant's
obligations whose nonperformance would interfere with any other occupant's use, occupancy or
enjoyment of its respective premises or the Project.
(d) Brokerage. Neither Landlord nor Tenant has dealt with any broker or agent
in connection with the negotiation or execution of this Lease, other than NAI Puget Sound Properties,
representing Landlord, whose commissions (if any) shall be paid by Landlord pursuant to a separate
written agreement. Tenant and Landlord shall each indemnify the other against all costs, expenses,
attorneys' fees, liens and other liability for commissions or other compensation claimed by any broker
or agent claiming the same by, through, or under the indemnifying party.
(e) Estoppel Certificates. From time to time, Tenant shall furnish to any person
designated by Landlord (which may include Landlord), within twenty (20) days after Landlord's
request therefor, an estoppel certificate signed by Tenant in favor of such party, confirming and
containing such factual certifications and representations as to this Lease as may be reasonably
requested, and a written statement from each guarantor of Tenant's obligations under this Lease
consenting, ratifying and continuing its guaranty is in full force and effect. Unless otherwise required
by a Landlord's Mortgagee or a prospective purchaser or mortgagee of, or investor in, the Project,
the form of estoppel certificate to be signed by Tenant and statement to be made by each such
guarantor shall be in the form attached hereto as Exhibit F. If Tenant does not deliver to Landlord
such signed estoppel certificate and/or statement within such required time period, Landlord,
Landlord's Mortgagee and any prospective purchaser, mortgagee or investor, may conclusively
presume and rely upon the following facts: (1) this Lease and the guaranty thereof, if any, is in full
force and effect; (2) the terms and provisions of this Lease have not been changed except as otherwise
represented by Landlord; (3) not more than one (1) monthly installment of Basic Rent and other
charges have been paid in advance; (4) there are no claims against Landlord nor any defenses or rights
of offset against collection of Rent or other charges; and (5) Landlord is not in default under this
Lease. In such event, Tenant shall be estopped from denying the truth of the presumed facts.
(f) Notices. Except to as otherwise expressly provided in this Lease to the
contrary, all notices, consents, approvals, requests and other communications given pursuant to this
Lease shall be in writing and shall be (1) mailed by first-class, United States Mail, postage prepaid,
certified, with return receipt requested, and addressed to the parties hereto at the address specified in
the Basic Lease Information, (2) hand delivered to the intended addressee, or (3) sent by a nationally
recognized overnight courier service. All notices shall be effective upon delivery to the address of
the addressee (even if such addressee refuses delivery thereof). The parties hereto may change their
addresses by giving notice thereof to the other in conformity with this provision.
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(g) Separability. If any clause or provision of this Lease is illegal, invalid, or
unenforceable under present or future Laws, then the remainder of this Lease shall not be affected
thereby and in lieu of such clause or provision, there shall be added as a part of this Lease a clause or
provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be
possible, which clause or provision shall be legal, valid, and enforceable.
(h) Amendments; Binding Effect; No Electronic Records. This Lease may not
be amended except by instrument in writing signed by Landlord and Tenant. No provision of this
Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by
Landlord, and no custom or practice that may evolve between the parties in the administration of the
terms hereof shall waive or diminish the right of Landlord to insist upon the performance by Tenant
in strict accordance with the terms hereof. The terms and conditions contained in this Lease shall
inure to the benefit of and be binding upon the parties hereto, and upon their respective successors in
interest and legal representatives, except as otherwise herein expressly provided. This Lease is for
the sole benefit of Landlord and Tenant, and, other than Landlord's Mortgagee, no third -party shall
be deemed a third -party beneficiary hereof.
(i) Quiet Enjoyment. Provided Tenant has performed all of its obligations
hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises for the Term, without
hindrance from Landlord or any party claiming by, through, or under Landlord, but not otherwise,
subject to the terms and conditions of this Lease. It is understood and agreed that this covenant and
any and all other covenants of Landlord contained in this Lease shall be binding upon Landlord and
its successors only with respect to breaches occurring during its and their respective ownership of the
Landlord's interest hereunder.
0) No Merger. There shall be no merger of the leasehold estate hereby created
with the fee estate in the Premises or any part thereof if the same person acquires or holds, directly
or indirectly, this Lease or any interest in this Lease and the fee estate in the leasehold Premises or
any interest in such fee estate.
(k) Entire Agreement. This Lease constitutes the entire agreement between
Landlord and Tenant regarding the subject matter hereof and supersedes all oral statements and prior
writings relating thereto, including, without limitation, any letter of intent. Except for those set forth
in this Lease, no representations, warranties, or agreements have been made by Landlord or Tenant
to the other with respect to this Lease or the obligations of Landlord or Tenant in comiection
therewith. The normal rule of construction that any ambiguities be resolved against the drafting party
shall not apply to the interpretation of this Lease or any exhibits or amendments hereto.
(1) Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING
OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED HERETO.
(m) Governing Law. This Lease shall be governed by and construed in
accordance with the Laws of the State of Washington.
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(n) Recording. Tenant shall not record this Lease or any memorandum of this
Lease without the prior consent of Landlord, which consent may be withheld or denied in the sole
and absolute discretion of Landlord, and any recordation by Tenant shall be a material breach of this
Lease that cannot be cured. Tenant grants to Landlord a power of attorney to execute and record a
release releasing any such recorded instrument of record that was recorded without the prior consent
of Landlord.
(o) Water or Mold Notification. To the extent Tenant or its agents or employees
discover any water leakage, water damage or mold in or about the Premises or Project, Tenant shall
promptly notify Landlord thereof.
(p) Joint and Several Liability. If Tenant is comprised of more than one party,
each such party shall be jointly and severally liable for Tenant's obligations under this Lease. All
unperformed obligations of Tenant hereunder not fully performed at the end of the Term shall survive
the end of the Term, including payment obligations with respect to Rent, all indemnity obligations
and all obligations concerning the condition and repair of the Premises.
(q) Financial Reports. Landlord shall have the right to request, at any time and
without limitation as to frequency, Tenant's financial statements so long as such request(s) is made
in connection with the following: (i) Landlord's efforts to refinance the Project; (ii) a sale of the
Project; (iii) Tenant's failure to pay Rent when due; or (iv) an Event of Default. Landlord shall also
have the right to request Tenant's financial statements for any reason not outlined above, but shall be
limited to one such discretionary request per year. Within fifteen (15) days after Landlord's request,
Tenant will furnish Tenant's most recent audited financial statements (including any notes to them)
to Landlord, or, if no such audited statements have been prepared, such other financial statements
(and notes to them) as may have been prepared by an independent certified public accountant or,
failing those, Tenant's internally prepared financial statements. If Tenant is a publicly traded
corporation, Tenant may satisfy its obligations hereunder by providing to Landlord Tenant's most
recent annual and quarterly reports. Tenant will discuss its financial statements with Landlord and,
following the occurrence of an Event of Default hereunder, will give Landlord access to Tenant's
books and records in order to enable Landlord to verify the financial statements. Landlord will not
disclose any aspect of Tenant's financial statements except (1) to a Landlord's Mortgagee or
prospective mortgagees or purchasers of, or investors in, the Project, (2) in litigation between
Landlord and Tenant, and/or (3) if required by Law or court order.
(r) Landlord's Fees. Whenever Tenant requests Landlord to take any action not
required of it hereunder or give any consent required or permitted under this Lease, Tenant will
reimburse Landlord for Landlord's reasonable, out-of-pocket costs payable to third parties and
incurred by Landlord in reviewing the proposed action or consent, including reasonable attorneys',
engineers' or architects' fees, within thirty (30) days after Landlord's delivery to Tenant of a
statement of such costs. Tenant will be obligated to make such reimbursement without regard to
whether Landlord consents to any such proposed action.
(s) Confidentiality. Tenant acknowledges that the terms and conditions of this
Lease are to remain confidential for Landlord's benefit, and may not be disclosed by Tenant to
anyone, by any manner or means, directly or indirectly, without Landlord's prior consent; however,
Tenant may disclose the terms and conditions of this Lease if required by Law or court order, and to
IM
its attorneys, accountants, employees and existing or prospective financial partners provided same
are advised by Tenant of the confidential nature of such terms and conditions and agree to maintain
the confidentiality thereof (in each case, prior to disclosure). Tenant shall be liable for any disclosures
made in violation of this Section 26(s) by Tenant or by any entity or individual to whom the terms
and conditions of this Lease were disclosed or made available by Tenant. The consent by Landlord
to any disclosures shall not be deemed to be a waiver on the part of Landlord of any prohibition
against any future disclosure. Notwithstanding the foregoing, Landlord acknowledges that Tenant is
a public agency subject to the Public Records Act, Chapter 42.56 RCW, and that any records relating
to this Lease may be subject to public disclosure. As such, Landlord agrees to cooperate fully with
Tenant in satisfying its duties and obligations under the Public Records Act. While certain records or
information contained therein may be exempt from public disclosure pursuant to RCW 42.56.270, if
Tenant receives a public records request that may require the dissemination of records related to this
Lease, Tenant shall notify Landlord of the request as soon as reasonably possible so that Landlord
may take whatever actions it deems necessary to protect such information in accordance with RCW
42.56.540.
(t) Authority. Tenant (if a corporation, partnership or other business entity)
hereby represents and warrants to Landlord that Tenant is a duly fornied and existing entity qualified
to do business in the State of Washington, that Tenant has full right and authority to execute and
deliver this Lease, and that each person signing on behalf of Tenant is authorized to do so. Landlord
hereby represents and warrants to Tenant that Landlord has full right and authority to execute and
deliver this Lease, and that each person signing on behalf of Landlord is authorized to do so.
(u) Hazardous Materials. The term "Hazardous Materials" means any
substance, material, or waste that is now or hereafter classified or considered to be hazardous, toxic,
or dangerous under any Law relating to pollution or the protection or regulation of human health,
natural resources or the environment, or poses or threatens to pose a hazard to the health or safety of
persons on the Premises or in the Project. Tenant shall not use, generate, store, or dispose of, or
permit the use, generation, storage or disposal of Hazardous Materials on or about the Premises or
the Project except for de minimis amounts of Hazardous Materials commonly used for commercial
office purposes (e.g., copy machine toner), and then in compliance with all Laws. If Tenant breaches
its obligations under this Section 26(u), Landlord may upon five (5) days prior notice to Tenant, or
such shorter time required by Law or in order to minimize any hazard to person or property, take any
and all action reasonably appropriate to remedy the same, including taking all appropriate action to
clean-up or remediate any contamination resulting from Tenant's use, generation, storage or disposal
of Hazardous Materials, and Tenant shall reimburse to Landlord an amount equal to Landlord's costs
plus five percent (5%) for overhead which shall be payable within thirty (30) days after Tenant's
receipt of an invoice therefor, together with supporting evidence. Tenant shall defend, indemnify,
and hold harmless Landlord and its representatives and agents from and against any and all Claims
(including reasonable attorneys' fees, cost of clean-up investigation and remediation and diminution
in the value of the Premises or other portion of the Project) arising from Tenant's failure to comply
with the provisions of this Section 26(u). To the extent that Landlord is held strictly liable by a court
or governmental agency of competent jurisdiction, Tenant's obligation to Landlord under the
foregoing indemnification shall likewise be without regard to fault on Tenant's part. This indemnity
provision shall survive the end of the Terns.
37
(v) List of Exhibits. All exhibits and attachments attached hereto are
incorporated herein by this reference.
Exhibit A —
Outline of Premises
Exhibit B —
Description of the Land
Exhibit C —
Building Rules and Regulations
Exhibit D —
Work Letter
Exhibit E —
Parking
Exhibit F —
Form of Tenant Estoppel Certificate
Exhibit G —
Confirmation of Commencement Date
Exhibit H —
Rent Abatement Provision
Exhibit I —
Dog Requirements
(w) OFAC/FCPA Representation. Neither Tenant nor any of its affiliates, nor
any of their respective brokers or other agents acting in any capacity in connection with the
transactions contemplated by this Lease is or will at any time during the Term be (a) conducting any
business or engaging in any transaction or dealing with any person appearing on the U.S. Treasury
Department's OFAC list of prohibited countries, territories, "specifically designated nationals"
("SDNs") or "blocked person" (each a "Prohibited Person") (which lists can be accessed at the
following web address: http://www.ustreas.gov/offices/enforcement/ofac/), including the making or
receiving of any contribution of funds, goods or services to or for the benefit of any such Prohibited
Person; (b) engaging in certain dealings with countries and organizations designated under
Section 311 of the USA PATRIOT Act as warranting special measures due to money-laundering
concerns; (c) dealing in, or otherwise engaging in any transaction relating to, any property or interests
in property blocked pursuant to Executive Order No. 13224 dated September 24, 2001, relating to
"Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit,
or Support Terrorism"; (d) a foreign shell bank or any person that a financial institution would be
prohibited from transacting with under the USA PATRIOT Act; or (e) engaging in or conspiring to
engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempting to violate, any of the prohibitions set forth in (i) any U.S. anti -money-laundering law,
(ii) the Foreign Corrupt Practices Act, (iii) the U.S. mail and wire fraud statutes, (iv) the Travel Act,
(v) any similar or successor statutes or (vi) any regulations promulgated under the foregoing statutes.
If at any time this representation becomes false, then it shall be considered an Event of Default under
this Lease as to which there shall be no right to notice or an opportunity to cure, notwithstanding
anything contained in this Lease to the contrary, and Landlord shall have the right to exercise all of
the remedies set forth in this Lease including, without limitation, immediate termination of this Lease.
Tenant hereby agrees to defend (with counsel reasonably acceptable to Landlord), indemnify and
hold harmless Landlord and the Landlord Indemnitees from and against any and all claims, damages,
suits, costs, expenses or penalties arising from or related to any breach of the foregoing certifications,
representations, warranties and covenants. Tenant shall provide immediate notice to Landlord of any
known or suspected violation by Tenant of the terms and conditions of this paragraph.
(x) Survival of Obligations. Any obligations of the parties accruing prior to the
end of the Term shall survive, and the parties shall promptly perform all such obligations whether or
not this Lease has expired or earlier terminated.
W-3
(y) Reasonable Efforts. Whenever in this Lease there is imposed upon Landlord
the obligation to use its best efforts, reasonable efforts or diligence, Landlord shall be required to do
so only to the extent the same is economically feasible and otherwise will not impose upon Landlord
excessive financial or other burdens.
(z) Landlord Default. Notwithstanding anything to the contrary set forth in this
Lease, Landlord shall be in default in the performance of any obligation required to be performed by
Landlord pursuant to this Lease if Landlord fails to perform such obligation within thirty (30) days
after the receipt of notice from Tenant specifying in detail Landlord's failure to perform; provided,
that if the nature of Landlord's obligation is such that more than thirty (30) days are reasonably
required for its performance, then Landlord shall not be in default under this Lease if it shall
commence such performance within such thirty (30) day period and thereafter diligently pursue the
same to completion.
(aa) Business Days. For purposes of this Lease, "Business Days" means all
calendar days other than Saturdays, Sundays, and Holidays. If the date for performance of any
covenant or obligation under this Lease shall fall on a day that is not a Business Day, then the date
for performance thereof shall be deemed to be the next following Business Day.
(bb) Terms; Captions. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. The captions of Sections are for convenience only and shall
not affect the interpretation of such Sections. The word "person", as used in this Lease, means any
natural person or persons in individual or representative capacities and any entity or entities of any
kind whatsoever, including, corporations, partnerships and associations, or any combination of
persons and entities. Any reference herein to "any part" or "any portion" of the Premises, the
Building, the Property, the Project or any other property shall be construed to refer to all or any part
of such property. Wherever this Lease requires Tenant to comply with any Law, rule, regulation,
program, procedure or other requirement or prohibits Tenant from engaging in any particular conduct,
this Lease shall be deemed also to require Tenant to cause each of its employees, licensees, invitees
and subtenants, and any other person claiming by, through or under Tenant, to comply with such
requirement or refrain from engaging in such conduct, as the case may be.
(cc) Counterparts. This Lease maybe executed in more than one counterpart, each
of which shall be deemed an original, but all of which together shall constitute one instrument.
Signatures to this Lease delivered by facsimile or electronic mail in portable document format
("PDF") shall be valid and effective to bind the party so signing, provided that each party agrees to
promptly deliver an executed original to this Lease with its actual signature to the other party, but a
failure to do so shall not affect the enforceability of this Lease, it being expressly agreed that each
party to this Lease shall be bound by its own facsimile or PDF signature and shall accept the facsimile
or PDF signature of the other party to this Lease.
(dd) Access Control. Landlord shall be the sole determinant of the type and
amount of any access control or courtesy guard services to be provided to the Project, if any, and
Tenant acknowledges that Landlord has not agreed to, and shall not be required to, provide any such
services. IN ALL EVENTS, LANDLORD SHALL NOT BE LIABLE TO TENANT, AND
TENANT HEREBY WAIVES ANY CLAIM AGAINST LANDLORD, FOR (I) ANY
UNAUTHORIZED OR CRIMINAL ENTRY OF THIRD PARTIES INTO THE PREMISES, THE
39
BUILDING OR THE PROJECT, (II) ANY DAMAGE TO PERSONS, OR (III) ANY LOSS OF
PROPERTY IN AND ABOUT THE PREMISES, THE BUILDING OR THE PROJECT, BY OR
FROM ANY UNAUTHORIZED OR CRIMINAL ACTS OF THIRD PARTIES, REGARDLESS OF
ANY ACTION, INACTION, FAILURE, BREAKDOWN, MALFUNCTION AND/OR
INSUFFICIENCY OF THE ACCESS CONTROL OR COURTESY GUARD SERVICES
PROVIDED BY LANDLORD, IF ANY. Tenant shall provide such security services and shall install
within the Premises such security equipment, systems and procedures as Tenant determines are
required for the protection of its property, inventory, merchandise, employees and invitees, provided
that Tenant shall coordinate such services and equipment with any security provided by Landlord.
The determination of the extent to which such security equipment, systems and procedures are
required shall be made in the sole judgment, and shall be the sole responsibility, of Tenant. Tenant
acknowledges that it has neither received nor relied upon any representation or warranty made by or
on behalf of Landlord with respect to the safety or security of the Premises or the Project or any part
thereof or the extent or effectiveness of any security measures or procedures now or hereafter
provided by Landlord, and further acknowledges that Tenant has made its own independent
determinations with respect to all such matters.
(ee) Matters of Record. Except as otherwise provided herein, this Lease and
Tenant's rights hereunder are subject and subordinate to all matters affecting Landlord's title to the
Project recorded in the Real Property Records of the County in which the Project is located, prior to
and subsequent to the date hereof, including, without limitation, all covenants, conditions and
restrictions. Tenant agrees for itself and all persons in possession or holding under it that it will
comply with and not violate any such covenants, conditions and restrictions or other matters of record.
Landlord reserves the right, from time to time, to grant such easements, rights and dedications as
Landlord deems necessary or desirable, and to cause the recordation of parcel maps and covenants,
conditions and restrictions affecting the Premises, the Building or the Project, as long as such
easements, rights, dedications, maps, and covenants, conditions and restrictions do not materially
interfere with the use of the Premises by Tenant. At Landlord's request, Tenant shall join in the
execution of any of the aforementioned documents.
(to Cannabis. Tenant agrees that the Premises shall not be used for the use,
growing, producing, processing, storing (short or long term), distributing, transporting, or selling of
cannabis, cannabis derivatives, or any cannabis containing substances ("Cannabis"), nor shall Tenant
permit, allow or suffer, any of Tenant's officers, employees, agents, servants, licensees, subtenants,
concessionaires, contractors and invitees to bring onto the Premises, any Cannabis. Without limiting
the foregoing, the prohibitions in this paragraph shall apply to all Cannabis, whether such Cannabis
is legal for any purpose whatsoever under state or federal law or both. Notwithstanding anything to
the contrary, any failure by Tenant to comply with each of the terms, covenants, conditions and
provisions of this paragraph shall automatically and without the requirement of any notice be a default
that is not subject to cure, and Tenant agrees that upon the occurrence of any such default, Landlord
may elect, in its sole discretion, to exercise all of its rights and remedies under this Lease, at law or
in equity with respect to such default.
(gg) Does. Tenant shall have the right to bring dogs into the Premises provided that (i)
such dogs are designated as "police dogs" and are used in connection with Tenant's operations at the
Premises (as opposed to pets), and (ii) Tenant complies with the provisions of Exhibit I attached
hereto. Without limiting Landlord's rights or remedies under this lease, Tenant's receipt of notice
from Landlord that Tenant has violated the provisions of Exhibit I attached hereto on more than three
(3) separate occasions in any twenty-four (24) month period shall, at Landlord's option, result in
termination of Tenant's right to bring dogs into the Premises immediately upon the occurrence of the
third (3`d) such violation.
(hh) Firearms. Landlord acknowledges that Tenant, as a law enforcement agency,
requires the possession and storage of firearms. So long as Tenant is a law enforcement agency,
Tenant's possession and storage of firearms, and other potentially dangerous law enforcement
devices, in the Premises shall be permitted, in accordance with Kent Police Department policies and
procedures and in accordance with all applicable laws, codes and regulations, regardless of any
Building Rules and Regulations to the contrary. Any storage safe shall be of a size and weight and
placed in an area acceptable to Landlord, provided that it shall be Tenant's sole obligation to ensure
that placement of any storage safe does not cause any damage to the Premises or Building. If
necessary, Tenant agrees to move the safe from time to time if required for any Building maintenance.
Tenant shall ensure that any firearms and potentially dangerous law enforcement devices in the
Premises are at all times kept in a safe and secure location and manner. Tenant agrees that only law
enforcement professionals who are trained and licensed to handle firearms will be allowed to access
or handle firearms in the Premises, and Tenant agrees at all times to observe the highest industry
standards with respect to the safe storage and handling of firearms in the Premises. Tenant shall
defend, indemnify and hold harmless Landlord and its agents and representatives from and against
all claims, demands, costs, causes of action, suits, judgments, damages and expenses (including
attorneys' fees) in any way arising from or relating to the presence or use of firearms that are brought
onto the Premises, Building or Project by any Tenant; by any agent, contractor or invitee of Tenant;
or by any law enforcement professional or other individual associated with Tenant's use of the
Premises.
(Signatures on following page)
41
This Lease is executed as of the date first above written.
LANDLORD:
J & J CREEKSIDE, LLC,
a Washington loited liability
TENANT:
VNET,
A Washington multiagency task force
By:
Name: WAM61. Q /AOtecA
Title: C/%EF 6F. od G/ cF
Creekside Lease — City of Kent — Signature Page
LANDLORD ACKNOWLEDGMENT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this day personally appeared before me Jordan Lott, known to me to be the Manager of
J & J CREEKSIDE, LLC, the limited liability company that executed the foregoing instrument,
and acknowledged the said instrument to be the free and voluntary act and deed of said limited
liability company, for the uses and purposes therein mentioned, and on oath stated that said
individual is authorized to execute said instrument.
GIVEN under�y�lj�h�hl�4+}�l official seal this day of, 2022.
� �NGLUN04 ��i
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Print name of nota
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in an for theS'of� A residing at;Myion expires l
Creekside Lease — City of Kent — Landlord Acknowledgment
STATE OF
COUNTY OF
TENANT ACKNOWLEDGMENT
ss.
'',. :, On this day personally appeared before me l w"-/ known to me to be the
CW; of the VALLEY NARCOTICS ENFORCEMENT TEAM, a Washington
multiagency drug task force formed by interlocal agreement, that executed the foregoing
instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said
for the uses and purposes therein mentioned, and on oath stated that said
individual is authorized to execute said instrument.
GIVEN under my hand and official seal this 2J day of A�� 2022.
�? &ofno /
(Print name of notary)
` �EN E 1111j 11
NOTt]�tY PUBLIC in and for the State of
�+ kyeioiv' f+,�0 1/i
�l//i— residing at AlJMnn
My commission expires y
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Creekside Lease — City of Kent — Tenant Acknowledgment
EXHIBIT A
OUTLINE OF PREMISES
EXHIBIT A J&J Creekside, LLC
1
EXHIBIT B
DESCRIPTION OF THE LAND
REVISED LOT A, CITY OF KENT LOTLINE ADJUSTMENT NUMBER 11-2000-11 (KIVA
#2001741), RECORDED UNDER RECORDING NUMBERS 20000724900003 AND
20000724000924, IN KING COUNTY, WASHINGTON.
TOGETHER WITH EASEMENT FOR PEDESTRIAN WALKWAY AS CREATED UNDER
RECORDING NUMBER 8611030678; AND
TOGETHER WITH EASEMENT FOR DRIVEWAY AS CREATED UNDER RL'•CORDING
NUMBER 8611030679; AND
TOGETHER WITH EASEMENT FOR INGRESS AND EGRESS AS CREATED UNDER
RECORDING NUMBER 20010511001017; AND
TOGETHER WITH THOSE CERTAIN EASEMENT RIGHTS ESTABLISHED BY ARTICLE
V OF THE PROTECI'IVE COVENANTS FOR GREEN RIVER INDUSTRIAL PARK AS
RECORDED UNDER RECORDING NUMBER 8402140453, AND AMENDED BY
INSTRUMENTS RECORDED UNDER RECORDING NUMBERS 8604020186, 8708200968,
8905310361,8908150225 AND 20010701001650,
EXHIBIT B J&J Creekside, LLC
EXHIBIT C
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply to the Project, and the appurtenances
thereto, and shall be subject to modification by Landlord at any time without prior notice:
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar areas shall not
be obstructed by tenants or used by any tenant for purposes other than ingress and egress to and
from their respective leased premises and for going from one to another part of the Building.
2. Plumbing, fixtures and appliances shall be used only for the purposes for which
designed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or deposited
therein. Damage resulting to any such fixtures or appliances from misuse by a tenant or its agents,
employees or invitees, shall be paid by such tenant.
3. No signs, advertisements or notices (other than those that are not visible outside
any tenant's leased premises) shall be painted or affixed on or to any windows or doors or other
part of the Building without the prior written consent of Landlord. No nails, hooks or screws (other
than those that are necessary to hang paintings, prints, pictures, or other similar items on the
interior walls of any tenant's leased premises) shall be driven or inserted in any part of the Building
except by Building maintenance personnel. No curtains or other window treatments shall be
placed between the glass and the Building standard window treatments.
4. Landlord shall provide and maintain an alphabetical directory for all tenants in the
main lobby of the Building.
5. Landlord shall provide all door locks in each tenant's leased premises, at the cost
of such tenant, and no tenant shall place any additional door locks in its leased premises without
Landlord's prior written consent. Landlord shall furnish to each tenant a reasonable number of
keys to such tenant's leased premises, at such tenant's cost, and no tenant shall make a duplicate
thereof. Each tenant shall be responsible for collecting keys from terminated employees or
employees who are otherwise no longer employed by tenant. Tenant shall be solely liable for any
property damage or personal injury arising from or relating to any unauthorized access to tenant's
leased premises by tenant's former employees.
6. Movement in or out of the Building of furniture or office equipment, or dispatch or
receipt by tenants of any bulky material, merchandise or materials that require use of elevators or
stairways, or movement through the Building enhances or lobby shall be conducted corder
Landlord's supervision at such times and in such a manner as Landlord may reasonably require.
Each tenant assumes all risks of, and shall be liable for all damage to, articles moved and injury to
persons or public engaged or not engaged in such movement, including equipment, property and
personnel of Landlord if damaged or injured as a result of acts in connection with carrying out this
service for such tenant.
7. Landlord may prescribe weight limitations and determine the locations for safes
and other heavy equipment or items, which shall in all cases be placed in the Building so as to
distribute weight in a manner acceptable to Landlord, which may include the use of such
EXHIBIT C J&J Creekside, LLC
supporting devices as Landlord may require. All damages to the Building caused by the
installation or removal of any property of a tenant, or done by a tenant's property while in the
Building, shall be repaired at the expense of such tenant.
8. Corridor doors, when not in use, shall be kept closed. Nothing shall be swept or
thrown into the corridors, halls, elevator shafts or stairways. No birds or animals (other than
service animals) shall be brought into or kept in, on or about any tenant's leased premises. No
portion of any tenant's leased premises shall at any time be used or occupied as sleeping or lodging
quarters.
9. To ensure orderly operation of the Building, no ice, mineral or other water, towels,
newspapers, etc. shall be delivered to any leased area except by persons approved by Landlord.
10. Tenant shall not make or permit any vibration or improper, objectionable or
unpleasant noises or odors in the Building or otherwise interfere in any way with other tenants or
their clients or invitees.
11. No machinery of any kind (other than normal office equipment) shall be operated
by any tenant on its leased area without Landlord's prior written consent, nor shall any tenant use
or keep in the Building any flammable or explosive fluid or substance (other than typical office
supplies (e.g., photocopier toner) used in compliance with all Laws).
12. Landlord will not be responsible for lost or stolen personal property, money or
jewelry from tenant's leased premises or public or Common Areas regardless of whether such loss
occurs when the area is locked against entry or not.
13. No vending or dispensing machines of any kind may be maintained in any leased
premises without the prior written permission of Landlord.
14, Tenant shall not conduct any activity on or about the Premises or Project which will
draw pickets, demonstrators, or the like.
15. All vehicles are to be currently licensed, in good operating condition, parked for
business purposes having to do with tenant's business operated in such tenant's leased premises,
parked within designated parking spaces, one vehicle to each space. No vehicle shall be parked as
a "billboard" vehicle in the Parking Facility. Any vehicle parked improperly may be towed away.
Tenant, tenant's agents, employees, vendors and customers who do not operate or park their
vehicles as required shall subject the vehicle to being towed at the expense of the owner or driver.
Landlord may place a "boot" on the vehicle to immobilize it and may levy a charge of Fifty
Dollars ($50.00) to remove the "boot." Tenant shall indemnify, hold and save harmless Landlord
of any liability arising from the towing or booting of any vehicles belonging to a Tenant Party.
17. No tenant may enter into phone rooms, electrical rooms, mechanical rooms, or other
service areas of the Building unless accompanied by Landlord or the Building manager.
18. Tenant will not permit any Tenant Party to bring onto the Project any handgun,
firearm or other weapons of any kind, illegal drugs or, unless expressly permitted by Landlord in
writing, alcoholic beverages.
EXHIBIT C J&J Creekside, LLC
2
19. Tenant shall not permit its employees, invitees or guests to smoke in such tenant's
leased premises or the lobbies, passages, corridors, elevators, vending rooms, rest rooms, stairways
or any other area in the Building, or permit its employees, invitees, or guests to loiter at the
Building entrances for the purposes of smoking. Tenant shall further prohibit its employees,
invitees or guests from smoking within 25 feet of Building entrances, exits, windows that open,
and ventilation intakes that serve an enclosed area where smoking is prohibited. Landlord may,
but shall not be required to, designate an area for smoking outside the Building.
20. Any requests by Tenant will be attended to only upon application at the office of
the property manager (or such other address as may be designated by Landlord from time to time)
(the "Property Management Office"). Employees of the Project shall not perform work or do
anything outside their regular duties unless under special instructions from the Property
Management Office.
EXHIBIT C J&J Creekside, LLC
3
EXHIBIT D
WORK LETTER
This Exhibit B ("Work Letter') is part of that certain Lease Agreement (the "Lease")
between J&J Creekside, LLC ("Landlord"), and the Valley Narcotics Enforcement Team, a
Washington multiagency drug task force formed by interlocal agreement ("Tenant'), under which
Tenant has leased certain space ("Premises") from Landlord, as more particularly described in the
Lease. Capitalized terms not defined in this Exhibit B shall have the meaning ascribed to them in
the Lease.
1. COMPLETION SCHEDULE.
If deemed appropriate by Landlord, Landlord may deliver to Tenant a schedule (the "Work
Schedule") setting forth a timetable for the planning and completion of the installation of Landlord's
Work to be constructed in the Premises. The Work Schedule may set forth each of the various items
of work to be done by or approval to be given by Landlord and Tenant in connection with the
completion of Landlord's Work. Tenant agrees not to unreasonably withhold, condition or delay its
consent to any drawing, specification or other item submitted to Tenant with respect to Landlord's
Work and, unless otherwise set forth in a Work Schedule, Tenant shall respond within three (3)
business days to any such request, with Tenant's failure to respond in such three (3) business day
period being deemed to be Tenant's approval.
2. LANDLORD'S WORK.
Reference herein to "Landlord's Work" shall include all work to be done in the Premises
pursuant to Landlord's Work Plans described in Paragraph 3 below.
3. LANDLORD'S WORK PLANS.
A space plan showing the elements of Landlord's Work is attached hereto as Schedule I
("Space Plan'). Based upon the Space Plan, Landlord's architect shall prepare working drawings and
specifications for Landlord's Work. Such working drawings shall be approved by Landlord and
Tenant. Once approved, such final working drawings and specifications may be referred to herein as
"Landlord's Work Plans." Landlord's Work Plans shall be submitted to the appropriate governmental
body by Landlord's architect for plan checking and the issuance of a building permit. Landlord's
Work Plans must be consistent with Landlord's standard specifications (the "Standards") for the
Building, as the same may be changed from time to time by Landlord. Landlord, with Tenant's
cooperation, shall cause to be made any changes in Landlord's Work Plans necessary to obtain the
building permit.
4. NON-STANDARD LANDLORD'S WORK.
Landlord shall permit Tenant to deviate from the Standards for Landlord's Work; provided
that (a) the deviations shall not be of a lesser quality than the Standards; (b) the deviations conform
to applicable governmental regulations and necessary governmental permits and approvals have been
EXHIBIT D J&J Creekside, LLC
I
secured; (c) the deviations do not require building service beyond the level normally provided to other
tenants in the Building and do not overload the floors; (d) Landlord has reasonably determined that
the deviations are of a nature and quality that are consistent with the overall objectives of the Landlord
for the Building; and (e) the deviations will not increase Landlord's costs or delay the completion of
Landlord's Work.
5. FINAL PRICING AND CHANGES.
Landlord shall prepare final pricing for Tenant's approval, taking into account any
modifications which may be required to reflect changes in the plans and specifications required by
the City or County in which the Premises are located. After final approval of the working drawings,
no further changes to Landlord's Work Plans may be made by Tenant without the prior written
approval from Landlord, and then only after agreement by Tenant to pay any excess costs resulting
from the design and/or construction of such changes. Tenant hereby acknowledges that any such
changes shall be subject to the terms of Paragraph 7 hereof.
6. CONSTRUCTION OF LANDLORD'S WORK.
After Landlord's Work Plans have been prepared and approved, the final pricing has been
approved and a building permit for Landlord's Work has been issued, Landlord shall enter into a
construction contract with its contractor for the installation of Landlord's Work in accordance with
Landlord's Work Plans. Landlord shall supervise the completion of such work and shall use
commercially reasonable efforts to secure Substantial Completion of the work in a commercially
reasonable timeframe. The cost of such work shall be paid as provided in Paragraph 7 hereof.
Landlord shall not be liable for any direct or indirect damages as a result of delays in construction,
including, but not limited to, acts of God, inability to secure governmental approvals or permits,
governmental restrictions, strikes, availability of materials or labor or for any delays by Tenant (or its
architect or anyone performing services on behalf of Tenant). "Substantial Completion" or
"Substantially Completed" means Landlord's Work has been performed in substantial accordance
with Landlord's Work Plans, other than uncompleted items of construction that do not materially
interfere with Tenant's operations in the Premises. "Tenant Delay" shall mean any delay in the
performance of Landlord's Work that occurs (a) because of Tenant's failure to timely deliver or
approve any required documentation such as the working drawings and specifications or final
pricing, (b) because of any change by Tenant to the Landlord's Work Plans that delay Substantial
Completion, (c) because of any specification by Tenant of materials or installations in addition to
or other than Landlord's standard finish -out materials, or (d) because Tenant otherwise delays
completion of Landlord's Work.
7. PAYMENT OF COST OF LANDLORD'S WORK.
a. Landlord hereby grants to Tenant a "Tenant Allowance" up to and not to exceed Sixty Five
Thousand Seven Hundred Forty and No/100 Dollars ($67,740.00). Such Tenant Allowance shall be
used only for:
(1) Payment of the cost of preparing the final working drawings and specifications,
including mechanical, electrical, plumbing and structural drawings and of all other aspects of
EXHIBIT D J&J Creekside, LLC
Landlord's Work Plans. Without limitation, the Tenant Allowance will not be used for the payment
of (i) telecommunications work; (ii) relocation costs; (iii) data/telecom cabling; (iv) security access
control equipment; (v) interior signage or graphics; and/or (vi) extraordinary design work not included
within the scope of Landlord's building standard improvements or for payments to any other
consultants, designers or architects other than Landlord's architect and/or space planner.
(2) The payment of plan check, permit and license fees relating to construction of
Landlord's Work.
(3) Construction of Landlord's Work, including, without limitation, the following (to the
extent shown on Landlord's Work Plans):
(a) Installation within the Premises of all partitioning, doors, floor coverings,
ceilings, wall coverings and painting, millwork and similar items.
(b) All electrical wiring, lighting fixtures, outlets and switches, and other
electrical work to be installed within the Premises.
(c) The furnishing and installation of all duct work, terminal boxes, diffusers and
accessories required for the completion of the heating, ventilation and air conditioning systems within
the Premises, including the cost of meter and key control for after -hour air conditioning.
(d) Any additional Tenant requirements including, but not limited to, odor control,
special heating, ventilation and air conditioning, noise or vibration control or other special systems.
(e) All fire and life safety control systems such as fire walls, sprinklers, halon, fire
alarms, including piping, wiring and accessories installed within the Premises.
(f) All plumbing, fixtures, pipes and accessories to be installed within the
Premises.
(g) Testing and inspection costs.
(h) Contractor's fees, including but not limited to any fees based on general
conditions
(4) All other costs to be expended by Landlord in the design and construction of
Landlord's Work, including without limitation, those costs incurred by Landlord for design and
construction of elements of Landlord's Work in the Premises.
b. The cost of designing and constructing Landlord's Work shall be charged against the Tenant
Allowance. In the event that the cost of designing and constructing Landlord's Work, as established
by Landlord's final pricing, shall exceed the Tenant Allowance, or if any costs related to Landlord's
Work are not to be paid out of the Tenant Allowance as provided in Paragraph 7(a) above, the excess
shall be paid or bonded by Tenant to Landlord prior to the commencement of construction of
Landlord's Work, but no later than five (5) days after Landlord's written notice.
EXHIBIT D J&J Creekside, LLC
C. In the event that, after Landlord's Work Plans have been prepared and a price therefore
established by Landlord, Tenant shall require any changes or substitutions to Landlord's Work Plans,
any additional costs thereof shall be paid by Tenant to Landlord prior to the commencement of such
work, but no later than five (5) days after Landlord's written notice. Landlord shall have the right to
decline Tenant's request for a change to Landlord's Work Plans if such changes are inconsistent with
Paragraphs 3 and 4 above, or if the change would, in Landlord's opinion, delay construction of
Landlord's Work.
d. In the event that the cost of Landlord's Work increases above the amount set forth in
Landlord's final pricing for any reason whatsoever, including without limitation the requirements of
any governmental agency, Tenant shall pay Landlord the amount of such increase within five (5) days
of Landlord's written notice; provided, however, that Landlord shall first apply toward such increase
any remaining balance in the Tenant Allowance.
e. The Tenant Allowance shall be available to Tenant only for Landlord's Work performed prior
to the Commencement Date.
f. Tenant shall pay to Landlord out of the Tenant Allowance an administrative and oversight
fee equal to Ten Percent (10%) of the aggregate contract price for Landlord's Work.
g. Notwithstanding anything to the contrary, no portion of the Tenant Allowance shall be
payable by Landlord during any period in which Tenant is in default under the Lease.
8. MISCELLANEOUS
Tenant's default or failure to perform under this Work Letter shall be a default under the
Lease, and without limiting Landlord's other rights, Landlord shall be entitled to all of its remedies
under the Lease with respect to such default. Any amounts owed by Tenant to Landlord under this
Work Letter shall be Additional Rent owed under the Lease.
EXHIBIT D J&J Creekside, LLC
4
Schedule 1
Space Plan for Landlord Work
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EXHIBIT D
5
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Nov
W Creekside, LLC
EXHIBIT E
PARKING
(1) Tenant's Parkin Passes. asses. Tenant shall license from Landlord throughout the Term
of the Lease its pro rata share of the Building's unreserved onsite parking spaces pursuant to the
Lease (collectively, "Tenant Parking Passes") in the Project's parking facilities and such other
parking facilities (which may be located outside of the Land) in which Landlord may from time to
time provide parking spaces for the Project (collectively, the "Parking Facility"), subject to such
terms, conditions and regulations as are from time to time applicable to patrons of the Parking
Facility, at no additional charge.
(2) Conditions on Use. The use by Tenant, its employees, customers and invitees, of
the Parking Facility shall be on the terms and conditions established by Landlord (or Landlord's
agent), and shall be subject to such other agreement between Landlord and Tenant as may
hereinafter be established. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be
loaded, unloaded or parked in areas other than those designated for such activities by Landlord.
Tenant shall not store or permit its employees to store any automobiles in the Parking Facility,
without the prior written consent of Landlord. Except for emergency repairs, Tenant and its
employees shall not perform any work on any automobiles while located in the Parking Facility or
on the Property. if it is necessary for Tenant or its employees to leave an automobile in the Parking
Facility, overnight, Tenant shall provide Landlord with prior notice thereof designating the license
plate number and model of such automobile. If Tenant permits or allows any of the prohibited
activities, then Landlord shall have the right, without notice, in addition to such other rights and
remedies that it may have, to remove or tow away the vehicle involved and charge the cost to
Tenant, which cost shall be payable within thirty (30) days of Tenant's receipt of an invoice from
Landlord, together with reasonable supporting evidence. Tenant shall have no right to assign or
sublicense any of its rights in the Tenant Parking Passes, except as part of a permitted assignment
of this Lease or a sublease of the Premises. Landlord shall have the right to terminate Tenant's
rights hereunder (including termination of any parking agreement related thereto) with respect to
any of the Tenant Parking Passes that Tenant desires to sublicense or assign except as part of a
permitted assignment of this Lease or a sublease of the Premises. Landlord may, in its discretion,
allocate and assign parking spaces in the Parking Facility among Tenant and other tenants and
occupants in the Project so long as Tenant's right to the Tenant Parking Passes remains unaffected.
Landlord shall also have the right from time to time to promulgate reasonable rules and regulations
regarding the Parking Facility, the Tenant Parking Passes and the use thereof, including rules and
regulations controlling the flow of traffic to and from various areas of the Parking Facility, the
angle and direction of parking and the like. Tenant shall comply with and cause its employees to
comply with all such rules and regulations, all reasonable additions and amendments thereto, and
the terms and provisions hereof. Landlord may elect to provide parking cards or keys to control
access to the Parking Facility. In such event, Landlord shall provide Tenant with one (1) card or
key for each of the Tenant Parking Passes, provided that Landlord shall have the right to require
Tenant or its employees to place a deposit on such access cards or keys and to pay a fee for any
lost or damaged cards or keys. Tenant's use of the Parking Facility shall be at Tenant's sole risk,
and Landlord shall have no liability for any personal injury or damage or theft of any vehicles or
other property occurring in the Parking Facility, regardless of whether such loss or theft occurs
EXHIBIT E J&J Creekside, LLC
when the Parking Facility or other areas therein are locked or otherwise secured. Except as caused
by the negligence or willful misconduct of Landlord and without limiting the terms of the
preceding sentence, Landlord shall not be liable for any loss, injury or damage to persons using
the Parking Facility, or automobiles or other property therein, it being agreed that, to the fullest
extent permitted by law, the use of the parking spaces in the Parking Facility shall be at the sole
risk of Tenant and its employees. Landlord specifically reserves the right to change the size,
configuration, design, layout, location and all other aspects of the Parking Facility and Tenant
acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without
any abatement of Rent under this Lease, from time to time, close off or restrict access to the Parking
Facility or relocate Tenant's parking to other parking structures and/or surface parking areas within
a reasonable distance of the Project, for purposes of permitting or facilitating construction, repair,
maintenance, alteration or improvements with respect to the Parking Facility, or to accommodate
or facilitate renovation, alteration, construction or other modification of other improvements or
structures located at the Project or at the location of the Parking Facility, as the case may be, or if
required as a result of any Force Majeure events under Section 26(c) of the Lease. No deductions
or allowances shall be made for any days when Tenant and/or any of its employees does not utilize
the Parking Facility or any of the Tenant Parking Passes. Landlord may delegate its responsibilities
hereunder to a parking operator, in which case such parking operator shall have all the rights of
control attributed hereby to Landlord. If requested by Landlord, Tenant shall execute and deliver
to Landlord or the parking operator, as applicable, the standard parking agreement used by
Landlord or the parking operator for the Parking Facility. Landlord shall have no liability for
claims arising through acts or omissions of any such parking operator, except as otherwise
provided in this Lease.
EXHIBIT E 7&7 Creekside, LLC
EXHIBIT F
FORM OF TENANT ESTOPPEL CERTIFICATE
The undersigned is the Tenant under the Lease (as defined below) between J & J
CREEKSIDE, LLC, a Washington limited liability company, as Landlord, and the undersigned as
Tenant, for the Premises consisting of _ rentable square feet, located within the building
commonly known as , with a street address of and hereby certifies
as follows:
1. The Lease consists of the original Lease Agreement dated as of
20 between Tenant and Landlord, and the following amendments or modifications thereto (if
none, please state "none"):
The documents listed above are herein collectively referred to as the "Lease" and represent the
entire agreement between the parties with respect to the Premises. All capitalized terms used
herein but not defined shall be given the meaning assigned to them in the Lease.
2. The Lease is in full force and effect and has not been modified, supplemented or
amended in any way except as provided in Section 1 above.
3. The Term commenced on , 20 and the Term expires,
excluding any renewal options, on 20 , and Tenant has no option,
right of first refusal or other right to purchase all or any part of the Premises or the Project or
interest therein, or any option to terminate or cancel the Lease, except as expressly set forth in the
Lease.
4. Tenant currently occupies the Premises described in the Lease and Tenant has not
transferred, assigned, or sublet any portion of the Premises nor entered into any license or
concession agreements with respect thereto except as follows (if none, please state "none"):
5. All monthly installments of Basic Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
The current monthly installment of Basic Rent is $
6. All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default thereunder. In
addition, Tenant has not delivered any notice to Landlord regarding a default by Landlord
thereunder.
7. As of the date hereof, there are no existing defenses or offsets, or, to the
undersigned's knowledge, claims or any basis for a claim, that Tenant has against Landlord and
no event has occurred and no condition exists, which, with the giving of notice or the passage of
time, or both, will constitute a default under the Lease.
8. No rental has been paid more than thirty (30) days in advance and no security
deposit has been delivered to Landlord except as provided in the Lease.
EXHIBIT F J&J Creekside, LLC
9. If Tenant is a corporation, partnership or other business entity, each individual
executing this Estoppel Certificate on behalf of Tenant hereby represents and warrants that Tenant
is a duly formed and existing entity qualified to do business in the state in which the Premises are
located if required by law and that Tenant has full right and authority to execute and deliver this
Tenant Estoppel Certificate and that each person signing on behalf of Tenant is authorized to do
SO.
10. There are no actions pending against Tenant under any bankruptcy or similar laws
of the United States or any state.
11. Other than in compliance with all applicable laws and incidental to the ordinary
course of the use of the Premises, Tenant has not used, stored, or released any hazardous substances
in the Premises.
12. All tenant improvement work and other improvement work to be performed by
Landlord under the Lease has been completed in accordance with the Lease and has been accepted
by the undersigned and all reimbursements and allowances due to the undersigned under the Lease
in connection with any tenant improvement work have been paid in full.
13. Tenant's current dress for receipt of notices, elections, demands or other
communications is , I - ">"' j W � �ihi--t 014ggv- D--
Tenant acknowledges that this Tenant Estoppel Certificate may be delivered to Landlord's
current and prospective mortgagees, trust deed holders, ground lessors and/or investors, or
prospective purchasers, or investors or any of their respective lenders, and acknowledges that it
recognizes that if so delivered, in addition to Landlord, said mortgagees, trust deed holders, ground
lessors, investors or purchasers, and their respective lenders, successors and assigns will be relying
upon the statements contained herein in disbursing loan advances or making a new loan or
investing in or acquiring the property of which the Premises are a part, and/or in accepting an
assignment, of the Lease documents as collateral security, and that receipt by it of this Tenant
Estoppel Certificate is a condition of making of the loan, disbursing loan proceeds, or investing in,
or acquiring, such property. Tenant hereby agrees to execute such other and further estoppel
certificates as any of Landlord's current or prospective mortgagees, trust deed holders, ground
lessors, investors, purchasers or any of their respective lenders, successors or assigns may require.
TENANT:
EXHIBIT F J&J Creekside, LLC
2
EXHIBIT G
CONFIRMATION OF COMMENCEMENT DATE
20
Attention:
Re: Lease Agreement (the "Lease") dated 20 , between J & J
CREEKSIDE, LLC, a Washington limited liability company ("Landlord"), and
the VALLEY NARCOTICS ENFORCEMENT TEAM, a Washington multiagency
drug task force formed by interlocal agreement ("Tenant"). Capitalized terms used
herein but not defined shall be given the meanings assigned to them in the Lease.
Ladies and Gentlemen:
Landlord and Tenant agree as follows:
1. Condition of Premises. Tenant has accepted possession of the Premises pursuant
to the Lease and confirms that Landlord has complied with all obligations under the Lease related
to the same.
2. Commencement Date, The Commencement Date of the Lease is
20
3. Expiration Date. The Term is scheduled to expire on the last day of the th full
calendar month of the Term, which date is 20.
4. Contact Person. Tenant's contact person in the Premises is:
Attention:
Telephone: _
5. Ratification. Tenant hereby ratifies and confirms its obligations under the Lease,
and represents and warrants to Landlord that it has no defenses thereto. Additionally, Tenant
further confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good
standing and in full force and effect, and (b) Tenant has no claims, counterclaims, setoffs or
EXHIBIT G J&J Creekside, LLC
1
defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of
any other transaction between Landlord and Tenant.
6. Binding Effect; Governing Law. Except as modified hereby, the Lease shall
remain in full effect and this letter shall be binding upon Landlord and Tenant and their respective
successors and assigns. If any inconsistency exists or arises between the terms of this letter and
the terms of the Lease, the terms of this letter shall prevail. This letter shall be governed by the
laws of the State of Washington.
Please indicate your agreement to the above matters by signing this letter in the space
indicated below and returning an executed original to us.
Sincerely,
J & J CREEKSIDE, LLC, a Washington limited liability
company
By:
Name:
Title:
Agreed and accepted:
By: f�—
Name: %1 i/C
Title: C eciC-
EXHIBIT G J&J Creekside, LLC
2
EXHIBIT H
RENT ABATEMENT PROVISION
Basic Rent shall be conditionally abated during the initial one (1) full calendar month of
the initial Term (the "Abatement Period"). As provided in this Lease, Tenant shall, concurrently
with its execution of this Lease, pay to Landlord Basic Rent for the second (2"d) full calendar
month of the Term; thereafter, Tenant shall make Basic Rent payments as otherwise provided in
this Lease. Notwithstanding such abatement of Basic Rent (a) all other sums due under this Lease,
including Additional Rent, shall be payable as provided in this Lease, and (b) any increases in
Basic Rent set forth in this Lease shall occur on the dates scheduled therefor. The amount of Basic
Rent conditionally abated for the Abatement Period pursuant to this Exhibit H shall be referred to
herein as the "Abated Rent".
The Abated Rent provided for in this Exhibit H is conditioned upon Tenant's full and
timely performance of all of its obligations under this Lease. If at any time during the Term an
Event of Default by Tenant occurs and this Lease is terminated as a result thereof, then the
Abatement Period provided for in this Exhibit H shall immediately become void, and Tenant shall
promptly pay to Landlord, in addition to all other amounts due to Landlord under this Lease, the
full amount of the Abated Rent.
EXHIBIT H J&J Creekside, LLC
EXHIBIT I
Dogs (referred to herein collectively as the "Approved Dogs") shall be permitted to the Premises
and at the Project, provided and on condition that:
(a) the Approved Dogs shall be strictly controlled at all times and shall not be permitted to
foul, damage or otherwise mar any part of the Project (including the Premises) or cause
excessively loud noise outside of the Premises whether through barking, growling or
otherwise;
(b) the Approved Dogs shall not be left unattended in the Premises;
(c) while outside the Premises (i.e., in any Common Areas of the Project), the Approved
Dogs shall be kept on leashes at all times;
(d) the Approved Dogs must have all required vaccinations and such vaccinations shall be
kept current at all times. Upon Landlord's reasonable request from time to time, Tenant
shall provide Landlord with evidence of all current vaccinations for the Approved Dogs;
(e) Tenant shall be responsible for any additional cleaning, repair and replacement costs and
all other costs which may arise from the Approved Dogs' presence in the Project in
excess of the costs that would have been incurred had the Approved Dogs not been
allowed in or around the Project;
(f) Tenant shall be liable for, and hereby agrees to indemnify and hold the Landlord Parties
harmless from any and all claims arising from any and all acts (including but not limited
to biting and causing bodily injury to, or damage to the property of, another tenant,
subtenant, occupant, licensee, invitee or an employee of any of the Landlord Parties) of,
or the presence of, the Approved Dogs in or about the Premises, the Building or the
Project. In the event that any immediately cause the employee whose dog caused the
injury to remove its Approved Dog from the Project and in no event thereafter shall the
Approved Dog which caused the injury ever be brought to or kept at the Premises or
Project;
(g) Tenant shall take the Approved Dogs outside the Premises with regularity to provide the
Approved Dogs a reasonable opportunity to relieve themselves and shall immediately
remove any dog waste including, without limitation, excrement from the Premises, the
Building and the Project. If Landlord reasonably determines that Landlord has incurred or
is incurring increased janitorial (interior or exterior) maintenance costs as a result of the
Approved Dogs' presence, Landlord shall give Tenant written notice thereof, and if the
matters giving rise to such increased costs are not remedied within thirty (30) days after
EXHIBIT I J&J Creekside, LLC
such notice to Tenant, Tenant shall reimburse Landlord for such costs as Additional Rent
within thirty (30) days after receipt of Landlord's invoice therefor and reasonable
evidence of such costs;
(h) The Approved Dogs shall be appropriately treated to prevent fleas, ticks and other
parasites. If Tenant has reason to believe that one or more of the Approved Dog(s) is
infested with fleas, ticks or other parasites, such Approved Dog(s) shall not be brought
into the Premises until it is no longer infested with fleas, ticks or other parasites;
(i) Tenant shall be responsible for, and indemnify, defend, protect and hold the Landlord
Parties harmless from and against any and all costs to remedy any and all damages
caused to the Building, the Project or any portion thereof or to the premises or
subpremises or property of any occupant or visitor to the Building or the Project by an
Approved Dog; and
Q) Tenant shall comply with all Applicable Laws associated with or governing the presence
of a dog within the Premises and/or the Building and such presence shall not violate the
certificate of occupancy.
EXHIBIT I J&J Creekside, LLC
2
.i I
CONFIRMATION OF COMMENCEMENT DATE
November 1, 2022
Valley Narcotics
Enforcement Team
20415 72nd St, Ste. 215
Kent, WA 98032
Attention: JoAnne Moen
f Lake Washington
PARTNERS
Re: Lease Agreement (the "Lease") dated August 26, 2022, between J & J CREEKSIDE, LLC,
a Washington limited liability company ("Landlord"), and Valley Narcotics Enforcement
Team, a Washington Multiagency Drug Task Force Formed by Interlocal Agreement
("Tenant"). Capitalized terms used herein but not defined shall be given the meanings
assigned to them in the Lease.
Lease Administrator:
Landlord and Tenant agree as follows:
1. Condition of Premises. Tenant has accepted possession of the Premises pursuantto the
Lease and confirms that Landlord has complied with all obligations under the Lease related to the same.
2. Commencement Date. The Commencement date of the Lease is November 1, 2022.
3. Expiration Date. The Term is scheduled to expire on the last day of the 61 full calendar
months of the Term, which date is December 31, 2027.
4. Contact Person. Tenant's contact person in the Premises is:
Valley Narcotics
Enforcement Team
20415 72nd St, Ste. 215
Kent, WA 98032
Attention: JoAnne Moen
5. Ratification. Tenant hereby ratifies and confirms its obligations under the Lease, and
represents and warrants to Landlord that it has no defenses thereto. Additionally, Tenant further confirms
and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and
effect, and (b) Tenant has no claims, counterclaims, setoffs or defenses against Landlord arising out of the
Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant.
6. Binding Effect: Governing Law. Except as modified hereby, the Lease shall remain in full
effect and this letter shall be binding upon Landlord and Tenant and their respective successors and
assigns. If any inconsistency exists or arises between the terms of this letter and the terms of the Lease,
the terms of this letter shall prevail. This letter shall be governed by the laws of the State of Washington.
Lake Washizigtoil
got �] PARTNERS
Please indicate your agreement to the above matters by signing this letter in the space indicated
below and returning an executed original to us.
Sincerely,
J & J CREEKSIDE, LLC, a Washington Limited Liability Company
By: &7
Name: Jordan L
Title: Member
Agreed and accepted:
Valley Narcotics Enforcement Team, a Washington Multiagency Drug Task Force Formed by Interlocal
Agreement
By: zcz"'
Name:
Title: C/ GL'/GF'