Exhibit 10.12
 
MEDICAL DENTAL BUILDING
LEASE AGREEMENT
 

 

 

 
BETWEEN
 
GRE 509 OLIVE LLC,
 
LANDLORD
 
AND
 
ONVIA, INC.,
 
TENANT
 

 

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TABLE OF CONTENTS

 

   
Page
     
Article 1 PREMISES
4
1.1
Construction; Suitability
4
1.2
Location
4
1.3
Rooftop Antenna
5
1.4
Access
5
1.5
Right of First Offer
5
1.6
Delay in Delivery
6
1.7
Exhibits
6
Article 2 BUSINESS RIGHTS AND RESTRICTIONS
7
2.1
Use
7
2.2
Restrictions
7
Article 3 TERM
7
3.1
Duration
7
3.2
Option to Extend
8
3.3
Extended Term Minimum Monthly Rent
8
Article 4 RENT
9
4.1
Payment
9
4.2
Lease Year
9
Article 5 COMMON AREA
9
5.1
Definition
9
5.2
Use
9
5.3
Maintenance and Operation
9
5.4
Records
10
5.5
Tenant’s Contribution
11
5.6
Operation and Control
11
5.7
Obstructions
12
5.8
Allocation of Expenses; Gross Up
12
Article 6 TAXES
12
6.1
Personal Property Taxes
12
6.2
Real Property Taxes
12
6.3
Business Taxes
13
6.4
Substitute and Additional Taxes
13
6.5
Commercial Rent Tax
13
Article 7 UTILITIES AND SERVICES
13
7.1
Utilities and Services
13
7.2
Payment
14
7.3
Interruptions
15
Article 8 REPAIRS AND ALTERATIONS
15
8.1
Landlord’s Repairs
15
8.2
Tenant’s Repairs
15

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Page
     
8.3
Alterations
15
8.4
General Conditions
16
8.5
Americans with Disabilities Act Compliance
17
Article 9 INSURANCE
17
9.1
Use Rate
17
9.2
Liability Insurance
17
9.3
Worker’s Compensation Insurance
17
9.4
Property Insurance/Business Income
18
9.5
Waiver of Subrogation
18
9.6
General Requirements
18
9.7
Blanket Insurance
19
Article 10 DAMAGE AND RESTORATION
19
10.1
Damage and Destruction of the Premises
19
10.2
Damage or Destruction of Property
20
10.3
Tenant’s Work
20
10.4
Limitation of Obligations
20
10.5
Damage or Destruction at End of Term
21
10.6
Waiver
21
Article 11 SECURITY DEPOSIT; LETTER OF CREDIT
21
11.1
Security Deposit
21
11.2
Letter of Credit
21
Article 12 EMINENT DOMAIN
22
12.1
Definition
22
12.2
Total Taking
23
12.3
Partial Taking of Premises
23
12.4
Common Area Taking
23
12.5
Repair and Restoration
23
12.6
Award
23
12.7
Waiver
23
Article 13 INDEMNITY; WAIVER
24
13.1
Indemnification and Waivers
24
Article 14 OPERATION OF BUSINESS
26
Article 15 SIGNS AND ADVERTISING
26
15.1
General
26
15.2
Directory Board
27
15.3
Elevator Lobby; Suite Entry Signage
27
Article 16 LIENS
 
27
Article 17 RIGHT OF ENTRY
27
Article 18 DELAYING CAUSES
28
Article 19 ASSIGNMENT AND SUBLEASE
28

 

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Page
     
19.1
Consent Required
28
19.2
Request For Consent
29
19.3
Recapture
29
19.4
General Conditions
29
19.5
Transfer to a Subsidiary
29
19.6
Transfer Pursuant to Bankruptcy Code
30
Article 20 NOTICES
30
Article 21 SURRENDER OF POSSESSION
30
21.1
Surrender
30
21.2
Holding Over
31
Article 22 QUIET ENJOYMENT
31
Article 23 SUBORDINATION
31
Article 24 ESTOPPEL CERTIFICATE; FINANCIAL STATEMENTS
31
Article 25 DEFAULT
32
25.1
Default
32
25.2
Remedies
33
25.3
Interest
35
Article 26 INSOLVENCY
35
26.1
Breach of Lease
35
26.2
Operation of Law
35
26.3
Non-Waiver
36
26.4
Events of Bankruptcy
36
26.5
Landlord’s Remedies
36
Article 27 REMEDIES CUMULATIVE
37
Article 28 ATTORNEY’S FEES
37
Article 29 LIABILITY OF MANAGER
37
Article 30 NO PARTNERSHIP
38
Article 31 SUBTENANCIES
38
Article 32 SUCCESSORS
38
Article 33 REMOVAL OF TENANT’S PERSONAL PROPERTY
38
Article 34 EFFECT OF CONVEYANCE
39
Article 35 LANDLORD’S DEFAULT; NOTICE TO LENDER
39
35.1
Landlord’s Default
39
35.2
Notice to Lender
39

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Page
     
35.3
Independent Covenants; Limitation of Remedies and Landlord’s Liability
39
Article 36 RESERVED
40
Article 37 INTERPRETATION
40
Article 38 ENTIRE INSTRUMENT
40
Article 39 EASEMENTS; RECORDING
40
Article 40 SALE BY LANDLORD
41
Article 41 SECURITY MEASURES
41
Article 42 RESERVED
41
Article 43 CHOICE OF LAW; WAIVER OF TRIAL BY JURY
41
Article 44 HAZARDOUS SUBSTANCES
42
44.1
Tenant’s Indemnity
42
44.2
Covenant
42
44.3
Definitions
42
44.4
Breach of Obligations
42
44.5
Handling; Notices
43
44.6
Landlord’s Indemnity
44
Article 45 AUTHORITY
44
Article 46 BROKERS
44
Article 47 TENANT REPRESENTATION
44

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MEDICAL DENTAL BUILDING
LEASE AGREEMENT
(Base Year)

Landlord hereby leases to Tenant and Tenant hereby leases and accepts from
Landlord the premises hereinafter described in the terms and conditions set
forth in this Lease Agreement, hereinafter called “this Lease”.
BASIC LEASE PROVISIONS

A.
Lease Date:
July 31, 2007

B.
Landlord:
GRE 509 OLIVE LLC

C.
Tenant:
Onvia, Inc.

D. Reserved

E.
Property/Building:
The project including parking facilities on property particularly described
Exhibit “A” (the “Property”), commonly known as the Medical Dental Building;
(the “Building”), located at 509 Olive Way, Seattle, King County, Washington
98101.

F.
Premises Rentable Area:
The area shown on Exhibit “B,” containing approximately 35,000 rentable square
feet (“RSF”), known as Suites 400 and 501, located on the 4th& 5th floors of the
Building.

G.
Building Rentable Area:
293,916 RSF.

H.
Tenant’s Pro Rata Share:
11.91%

I.
Permitted Use:
Solely for use for general office and call center purposes and for no other use
or purpose.

J.
Initial Term:
Approximately ninety-three (93) months, commencing on the Lease Commencement
Date and terminating on the Expiration Date.

K.
Extension Option:
One (1) option of five (5) years (the “Extended Term”). The Initial Term,
together with the Extended Term if duly exercised by Tenant, are referred to
collectively in this Lease as the “Lease Term”.

L.
Possession Date(s):
The date as to each portion of the Premises on which Landlord provides access
thereto to Tenant so that Tenant may enter thereon and perform the Tenant’s Work
described in Exhibit “C” attached hereto. The projected Possession Dates are as
follows: 4th floor by August 20, 2007; 5th floor (excluding Suite 550) by
October 1, 2007; Suite 550 by November 15, 2007.

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M.
Lease Commencement Date:
The later to occur of (i) the date that is one hundred twenty (120) days after
the actual Possession Date as to the 5th floor portion of the Premises,
excluding Suite 550, or (ii) January 1, 2008.

N.
Expiration Date:
11:59 p.m. on the last day of the ninety-third (93rd) calendar month following
the month in which the Lease Commencement Date occurs.

O.  Minimum Rent

 
Commencement Date:
The Lease Commencement Date.

P. Minimum Monthly Rent:
Lease Months
 
Premises Area (RSF)
 
Annual Minimum Rental Rate
 
Annual Minimum Rent
 
Minimum Monthly Rent
 
1-9
 
35,000
 
Abated
 
Abated
 
Abated
 
10-12
   
35,000
 
$
25.00
 
$
875,000.00
 
$
72,916.67
 
13-24
   
35,000
 
$
25.75
 
$
901,250.00
 
$
75,104.17
 
25-36
   
35,000
 
$
26.52
 
$
928,287.50
 
$
77,357.29
 
37-48
   
35,000
 
$
27.32
 
$
956,136.13
 
$
79,678.01
 
49-60
   
35,000
 
$
28.14
 
$
984,820.21
 
$
82,068.35
 
61-72
   
35,000
 
$
28.98
 
$
1,014,364.82
 
$
84,530.40
 
73-84
   
35,000
 
$
29.85
 
$
1,044,795.76
 
$
87,066.31
 
85-93
   
35,000
 
$
30.75
 
$
1,076,139.63
 
$
89,678.30
 

Q.
Security Deposit:
$538,069.80

R.
Base Year:
Calendar year 2008.

S.
Parking:
Landlord shall provide and Tenant shall pay for thirty (30) unreserved parking
spaces in the underground parking garage serving the Building, at market rates
then being charged by the operator thereof and all taxes applicable thereto.

T. Landlord’s Address for Notices:  c/o Goodman Real Estate, Inc.
509 Olive Way, Suite 1062
Seattle, WA 98101

   
Attention: Tim Dickerson

U. Landlord’s Address for Rent

 
Payments:
c/o Goodman Real Estate, Inc.

   
509 Olive Way, Suite 1062

Seattle, WA 98101

   
Attention: Tim Dickerson

V.
Tenant’s Address for Notices:
 

Prior to the Commencement

 
Date:
1260 Mercer Street

   
Seattle, WA 98109

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Attn: SoYoung Kwon

After the Commencement

 
Date:
The Premises

W.
Landlord’s Broker:
CB Richard Ellis, Inc.

X.
Tenant’s Broker:
The Staubach Company

ARTICLE 1
 

 
PREMISES
 
1.1 Construction; Suitability
 
The initial improvements to the Premises shall be constructed pursuant to
Exhibit “C” attached hereto. Landlord shall have no other obligation to perform
any construction or other work to the interior or exterior of the Premises or
elsewhere at the Property unless expressly set forth in Exhibit “C”. Except as
expressly provided herein, Tenant acknowledges that neither Landlord, nor any
agent or representative of Landlord, has made any representation or warranty
with respect to the suitability of the Premises for the use set forth in the
Basic Lease Provisions, and that Tenant has entered into this Lease based solely
upon its own investigation and inspection of the Property and the Premises.
Landlord does not represent, and Tenant does not rely on the fact that any
specific tenant or tenants will occupy space in the Property during the Term of
this Lease. Landlord reserves and excepts from the Premises the roof and
exterior walls of the Building of which the Premises are a part.
 
1.2 Location
 
The parties acknowledge that Exhibit “A” describes the current perimeter of the
Property and sets forth a general layout of the Property, and shall not be
deemed a representation by Landlord that the Property shall always be
constructed as indicated thereon or that any tenants or occupants designated by
name or nature of business thereon shall conduct business in the Property during
the Term of this Lease; and, subject to compliance with all applicable laws and
governmental requirements and provided that there is reasonable access to the
Premises, Landlord may in its sole discretion increase, decrease or change the
number, location, and dimensions of the buildings, the premises therein, driving
lanes, driveways, walkways, parking places and other improvements shown on
Exhibit “A,” and Landlord reserves the right to make additions and alterations,
including the addition of pay telephones, to all buildings constructed in the
Property, and to change the name of the Building, the Property, or any of the
other buildings thereon from time to time. References to “this Lease” include
all exhibits and matters incorporated by reference as part of this Lease. In the
event a portion of the Premises, Building, or Property is damaged or any other
event or change occurs which alters the RSF of any or all of the foregoing,
Landlord may appropriately adjust the foregoing areas and Tenant’s Pro Rata
Share thereof. Following completion of any Landlord’s Work described in Exhibit
“C”, Landlord shall remeasure the Premises and reserves the right to remeasured
the Building in accordance with provisions of the Standard Method for Measuring
Floor Area in Office Buildings published by the Building Owners and Managers
Association (ANSI/BOMA Z65.1-1996) (the “BOMA Standard”) applicable to
multi-tenant office buildings, to establish the RSF thereof, and appropriate
adjustments (if any) shall be made to Minimum Monthly Rent, Tenant’s Pro Rata
Share, and other terms of this Lease dependent on the RSF of the Premises and/or
Building. Tenant shall be deemed to have accepted any such remeasurement and/or
adjustment unless Tenant objects to same within thirty (30) days after receipt
of notice thereof from Landlord. After the initial measurement of the Premises
as described above, in the event of any additional change in the RSF of the
Premises and/or Building caused by a change in the BOMA Standard or otherwise,
the Minimum Monthly Rent shall not be increased by more than 102% of the amounts
set forth in the Basic Lease Provisions as a result of any such remeasurement of
the Building or Premises.
 

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1.3 Rooftop Antenna
 
Tenant may, at its risk and expense and at no additional rent, install the
Satellite Dish (as hereinafter defined) and/or Antenna System (as hereinafter
defined) on the roof of the Building in the area thereon designated by Landlord
(the “Satellite Dish Area”), which Satellite Dish Area shall contain
approximately not more than 100 square feet of space (i.e., a 10 foot by 10 foot
area), but which area shall permit the Satellite Dish and/or Antenna System to
transmit and receive reception without interference. As used herein, the term
“Satellite Dish” shall mean the satellite dish and related wiring and equipment
hereafter approved in writing by Landlord to be located within the Satellite
Dish Area only, and the term “Antenna System” shall mean the antenna system and
related wiring and equipment hereafter approved in writing by Landlord to be
located within the Satellite Dish Area and connected through the Building to the
Premises. The Satellite Dish and/or Antenna System (a) may only be used by
Tenant and any Permitted Transferee, and (b) shall not cause unacceptable load
bearing burdens with respect to the applicable portions of the roof or otherwise
impair the coverage of Landlord’s roof warranty. Neither the Satellite Dish nor
the Antenna System shall be used for or on behalf of any persons or entities
other than Tenant or any Permitted Transferee (i.e., the Satellite Dish and
Antenna System shall not be used for any commercial or other for-profit use
which is not related to Tenant’s or a Permitted Transferee’s business). Prior to
installing the Satellite Dish and/or Antenna System in the Satellite Dish Area,
Tenant shall submit to Landlord for its approval plans and specifications which
(1) specify in detail the design, location and size of the Satellite Dish or the
equipment comprising the Antenna System, as applicable, and (2) are sufficiently
detailed to allow for the installation of the Satellite Dish and/or Antenna
System and in a good and workmanlike manner and in accordance with all laws
applicable thereto. Prior to installing the Satellite Dish or the equipment
comprising the Antenna System, as applicable, in the Satellite Dish Area, Tenant
must also satisfy the following conditions precedent: (x) Tenant shall have
obtained the written approval of Landlord required by the preceding sentence,
which approval will not be unreasonably withheld, conditioned or delayed; and
(y) Tenant shall have obtained and be maintaining all permits and/or approvals
required by applicable laws with respect to the installation, maintenance and
operation of the Satellite Dish and/or Antenna System and shall have provided
Landlord with sufficient evidence of the existence of such permits and/or
approvals. If Tenant satisfies the conditions precedent set forth above, Tenant
shall install (in a good and workmanlike manner), maintain and use the Satellite
Dish and/or Antenna System in accordance with all laws. Tenant will make no
penetration through the roof of the Building without Landlord’s prior written
consent, which consent will not be unreasonably withheld, conditioned or
delayed. After installing the Satellite Dish and/or Antenna System, Tenant shall
maintain all permits necessary for the maintenance and operation thereof and
operate and maintain the same in such a manner so as not to unreasonably
interfere with any other then-existing satellite, antennae, or other
transmission facility on the Building’s roof or in the Building. Landlord may
require, in its commercially reasonable discretion, that Tenant, at Tenant’s
sole cost and expense, screen the Satellite Dish and/or Antenna System with
screening reasonably approved in writing by Landlord, which screening shall
compliment the architectural design of the Building and shall be coordinated
with Landlord’s architect. Tenant shall, at its risk and expense, remove the
Satellite Dish and Antenna System (including all wiring and/or cabling related
thereto) and all screening applicable thereto from the Property prior to
expiration or termination of this Lease.

1.4 Access
 
Subject to the terms and conditions of this Lease, Tenant shall have access to
the Premises and the Building twenty-four (24) hours a day, seven (7) days a
week, and fifty-two (52) weeks a year.
 
1.5 Right of First Offer
 
Tenant shall have, during the Term hereof, a continuous right of first offer to
lease additional space contiguous to the Premises on the 5th and 6th Floors of
the Building (the “ROFO Space”). Tenant’s right of first offer shall be subject
and subordinate to all leases, options and rights of other third parties in
existence as of the date of mutual execution hereof. If at any time during the
initial Term, Landlord shall receive a bona fide offer from any third party to
lease all or any part of the ROFO Space, which offer Landlord shall desire to
accept, or all or any part of the ROFO Space becomes
 

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available for lease, then Landlord shall promptly notify Tenant of the existence
of such offer (but Landlord shall not be obligated to disclose the economic or
other terms of the third party offer) or the availability of such portion of the
ROFO Space for lease. Tenant may, within ten (10) business days thereafter,
elect by written notice to Landlord to lease the ROFO Space on the same terms
and conditions as those set forth in this Lease, including as to the Tenant
Allowance, which shall be prorated based on the remaining term of this Lease at
the time the ROFO Space is added to the Premises demised hereby, provided that
no free/abated rent periods shall apply. Failure of Tenant to exercise the
foregoing right within the prescribed time period above shall constitute a
waiver of Tenant’s right as to that offer with respect to the ROFO Space
mentioned in Landlord’s notice, and Landlord shall have the right to lease the
ROFO Space in Landlord’s sole discretion. If Tenant duly elects to exercise its
right of first offer as aforesaid, Landlord shall prepare, and Tenant shall
promptly execute, an amendment to this Lease to memorialize such election,
provided, however, that failure of Tenant to execute such amendment shall not
affect the binding nature of Tenant’s election to exercise the right of first
offer as aforesaid. The right described in this paragraph is personal to Tenant
and may not be exercised or be assigned, voluntarily or involuntarily, by or to
any person or entity other than Tenant, and is not assignable separate and apart
from this Lease.
 
1.6 Delay in Delivery
 
If Landlord fails to deliver 4th and 5th floor (excluding Suite 550) of the
Premises by the date that is seven (7) days after the Possession Date specified
in the Basic Lease Provisions or fails to complete Landlord’s Work by September
3, 2007, with respect to the 4th floor or by October 1, 2007, with respect to
the 5th floor (excluding Suite 550), then, as Tenant’s sole remedies therefor,
(a) when Tenant becomes obligated to pay Minimum Monthly Rent hereunder, Tenant
shall receive an abatement against such Minimum Monthly Rent of $5,000 per
calendar day for each day of delay after the end of the foregoing 7-day period
as liquidated damages, and (b) the nine-month rent abatement period specified in
Paragraph P of the Basic Lease Provisions shall be extended one (1) day for each
day of delay. If Landlord fails to deliver Suite 550 with Landlord’s Work
completed by the Possession Date specified in the Basic Lease Provision then, as
Tenant’s sole remedies therefor, when Tenant becomes obligated to pay Minimum
Monthly Rent hereunder, Tenant’s obligation to pay Minimum Monthly Rent shall
abate by an amount equal to one day of Minimum Rent multiplied by a percentage
which is the ratio that the RSF of Suite 550 bears to the RSF of the entire
Premises for each day of delay (such abatement to be in addition to any
abatement accrued or accruing under subsection (a) above). Landlord and Tenant
agree that the foregoing sums are their best estimate of the daily damages that
Tenant will incur as a result of Landlord’s failure to deliver the Premises.
Additionally, if, for any reason other than delays caused by Tenant, Landlord
fails to deliver possession of the Premises (excluding Suite 550) to Tenant with
all Landlord’s Work substantially completed by December 15, 2007, then Tenant
may elect as its sole remedy to terminate this Lease by written notice given to
Landlord on or before December 31, 2007. In such case, all deposits and other
amounts paid by Tenant to Landlord shall be refunded to Tenant. If Tenant fails
to deliver such notice of termination by the foregoing deadline, Tenant’s right
to terminate for such failure shall be forever waived.
 
1.7 Exhibits
 
The following drawings and special provisions are attached as exhibits and made
a part of this Lease:
 
Exhibit “A” - Legal Description
Exhibit “B” - Space Plan
Exhibit “C” - Workletter
Exhibit “D” - Rules and Regulations
Exhibit “E” - Delivery of Premises
Exhibit “F” - Form of Letter of Credit

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Article 2

BUSINESS RIGHTS AND RESTRICTIONS
2.1 Use
 
The Premises shall be used solely for the Permitted Use set forth in the Basic
Lease Provisions and for no other purpose or use whatsoever.
 
2.2 Restrictions
 
Tenant shall not, without Landlord’s prior written consent, which consent
Landlord may withhold in its sole discretion: (a) conduct any auction or
bankruptcy sales; (b) conduct any fire sale; (c) conduct any close-out sale
except at the expiration of the Lease Term; (d) sell any so-called “surplus”,
“Army and Navy”, or “secondhand” goods, as those terms are generally used at
this time and from time to time hereafter; (e) permit anything to be done on the
Premises which will in any way obstruct, interfere with or infringe on the
rights of other occupants or invitees of the Property; (f)  install any
automated teller or cash machines (“ATMs”), appliances, video games, arcade
games, pinball machines, or pay telephones in or about the Premises; or
(g) bring or keep on the Premises any item or thing or permit any act thereon
which is prohibited by any law, statute, ordinance or governmental regulation
now in force or hereinafter enacted or promulgated, or which is prohibited by
any Standard form of fire insurance policy.
 
ARTICLE 3
 

 
TERM
 
3.1 Duration
 
The Term hereof shall commence on the Lease Commencement Date defined in the
Basic Lease Provisions and shall terminate on the Expiration Date defined in the
Basic Lease Provisions, unless earlier terminated or extended as set forth
elsewhere herein. Tenant agrees to execute a certificate confirming the date of
the Lease Commencement Date in the form of the certificate attached hereto as
Exhibit “E”, which certificate shall be initialed by Landlord and attached to,
and incorporated into, this Lease. Beginning on the Possession Date, Tenant and
its agents, contractors, architects, and consultants shall have access to the
Premises to fixturize and otherwise ready the Premises for the commencement of
Tenant’s business therein, provided that Tenant does not unreasonably interfere
with or delay Landlord in the prosecution of Landlord’s Work. Commencing on the
date of mutual execution hereof, Tenant and Landlord shall comply with each and
every term, covenant, condition and provision of this Lease, excepting only
those provisions pertaining to Tenant’s obligation to pay Minimum Monthly Rent,
which obligation shall commence on the Rent Commencement Date described in the
Basic Lease Provisions. In connection therewith, Tenant acknowledges and agrees
that certain obligations under various articles hereof shall commence prior to
the Lease Commencement Date (i.e., construction obligations, hold harmless,
liability insurance, etc.), and Tenant agrees to be bound by these articles
prior to the Lease Commencement Date. Notwithstanding anything herein to the
contrary, Tenant’s obligations under this Lease are expressly conditioned upon
termination of Tenant’s existing lease with Blume Yale Limited Partnership upon
terms and conditions satisfactory to Tenant in its discretion. Promptly upon
execution of such termination agreement, Tenant shall provide Landlord proof
thereof. If the foregoing condition is not satisfied within fifteen (15)
business days following execution of this Lease, either party may terminate this
Lease by providing three (3) days written notice. If either Tenant or Landlord
elect to terminate this Lease, Tenant will reimburse Landlord for (a) the actual
hard and soft costs incurred by Landlord in relocating the existing tenants
necessary for Tenant’s occupancy of the Premises, and (b) the actual hard and
soft costs incurred by Landlord in performing Landlord’s Work. The
aforementioned costs shall not exceed $50,000. Along with all other obligations
that survive termination of this Lease, Tenant’s obligations under the
immediately preceding sentence and the obligations of Tenant under Article 28
shall expressly survive termination of this Lease.
 

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3.2 Option to Extend
 
Provided that Tenant is not in default at the time of Tenant’s exercise notice
described below, or at the time of commencement of the Extended Term defined
below, Tenant shall have the right to extend the term of this Lease for one (1)
period of five (5) years (the “Extended Term”). Tenant may exercise its
extension option by delivering to Landlord written notice of Tenant’s intention
to exercise such option (the “Option Notice”) not earlier than twelve (12)
months and not later than nine (9) months prior to the Expiration Date of the
Initial Term. Such Extended Term shall be on all of the terms and conditions
contained in this Lease, except (i) Minimum Monthly Rent shall be adjusted as
set forth below; and (ii) there shall be no free rent periods, tenant
improvement or design allowances or further extension options. The option to
extend the Term of this Lease is exercisable only by the original Tenant which
is named in the Basic Lease Provisions and an assignee or sublessee pursuant to
a Permitted Transfer, and is not assignable or transferable. Once delivered, the
Option Notice cannot be cancelled or revoked.
 
3.3 Extended Term Minimum Monthly Rent 
 
Minimum Monthly Rent during the Extended Term shall be Fair Market Rental Value.
The term “Fair Market Rental Value” shall be the rental rate that comparable
office space for the same term of the Extended Term would command on the open
market at the time of commencement of the Extended Term, taking into account all
customary Landlord concessions for new, non-renewal tenants, such as tenant
improvement allowances, free/abated rent, and brokerage commissions, determined
in the manner set forth below. For purposes hereof, the term “comparable
Premises” shall mean office space similar in size and location to the Premises,
in comparable buildings, with comparable views, and with similar improvements
and amenities.
 
(i) If Landlord and Tenant cannot agree upon the Fair Market Rental Value of the
Premises within twenty (20) days after Landlord’s receipt of the Option Notice,
then Landlord and Tenant shall agree within ten (10) days thereafter on one real
estate appraiser (who shall be a Member of the American Institute of Real Estate
Appraisers or equivalent) who will determine the Fair Market Rental Value of the
Premises. If Landlord and Tenant cannot mutually agree upon an appraiser within
said ten (10) day period, then one M.A.I. qualified appraiser shall be appointed
by Tenant and one M.A.I. qualified appraiser shall be appointed by Landlord
within ten (10) days of notice by one party to the other of such disagreement.
The two appraisers shall determine the Fair Market Rental Value of the Premises
within twenty (20) days of their appointment; provided, however, if either party
fails to appoint an appraiser within such ten (10) day period, then the
determination of the appraiser first appointed shall be used. The appraisers
appointed shall proceed to determine Fair Market Rental Value within twenty (20)
days following such appointment. If said appraisers should fail to agree, but
the difference in their conclusions as to Fair Market Rental Value is ten
percent (10%) or less of the lower of the two appraisals, the Fair Market Rental
Value shall be deemed the average of the two.

(ii) If the two appraisers should fail to agree on the Fair Market Rental Value,
and the difference between the two appraisals exceeds ten percent (10%) of the
lower of the two appraisals, then the two appraisers thus appointed shall
appoint a third M.A.I. qualified appraiser, and in case of their failure to
agree on a third appraiser within ten (10) days after their individual
determination of the Fair Market Rental Value, either party may apply to the
Presiding Judge of the Superior Court for King County, Washington, requesting
said Judge to appoint the third M.A.I. qualified appraiser. The third appraiser
so appointed shall promptly determine the Fair Market Rental Value of the
Premises and the average of the appraisals of the two closest appraisers shall
be used. The fees and expenses of said third appraiser or the one appraiser
Landlord and Tenant agree upon, shall be borne equally by Landlord and Tenant.
Landlord and Tenant shall pay the fees and expenses of their respective
appraiser if the parties fail to agree on a single appraiser. All M.A.I.
appraisers appointed or selected pursuant to this subsection shall have at least
ten (10) years experience appraising commercial properties in the downtown
Seattle central business district. 

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(iii) The determination of Fair Market Rental Value pursuant to this paragraph
shall be final, conclusive and binding upon both parties.
ARTICLE 4
 

 
RENT
 
4.1 Payment
 
Tenant shall pay to Landlord without prior demand, abatement, deduction,
set-off, counter claim or offset, for all periods during the Lease Term, all
sums provided in this Paragraph 4.l and all other additional sums as provided in
this Lease, at the address set forth in the Basic Lease Provisions, payable in
lawful money of the United States of America on the first day of each month. All
sums of money required to be paid pursuant to the terms of this Lease are hereby
defined as “rent” or “Rent”, including all sums as provided in Paragraphs 4, 5,
6, 7, 8, and 9 and provided elsewhere in this Lease, whether or not the same are
designated as such. All Rent other than Minimum Monthly Rent is sometimes
referred to herein as “Additional Rent.” 
 
(a) Minimum Monthly Rent
 
Commencing on the Rent Commencement Date, Tenant shall pay to Landlord Minimum
Monthly Rent at the monthly rate with applicable increases as provided in the
Basic Lease Provisions.
 
(b) Late Fee
 
If Tenant shall fail to pay when due any installment of Minimum Monthly Rent or
any other sums due under this Lease, a late charge equal to the greater of (i)
$500, or (ii) five percent (5%) of the overdue amount shall be payable by Tenant
to reimburse Landlord for costs relating to collecting and accounting for said
late payment(s).
 
4.2 Lease Year
 
The term “Lease Year” shall mean each period of twelve (12) or less consecutive
months which ends on December 31 of each calendar year during the Lease Term or
any Extended Term, and the period from the last December 31 during the Lease
Term or any Extended Term to and including the last day of the Lease Term or any
Extended Term during the next calendar year. The first and last Lease Years may
be less than twelve (12) months.
 
ARTICLE 5
 

 
COMMON AREA
 
5.1 Definition
 
The “Common Area” is that area outside the Premises and within the Building or
on the land that is provided and designated by Landlord from time to time for
the general, non-exclusive use of Landlord, Tenant and other tenants of the
Building and their authorized representatives, including without limitation,
common entrances, lobbies, corridors, stairways and stairwells, elevators,
escalators, public restrooms and other public portions of the Building.
 
5.2 Use
 
During the Term hereof, Tenant, its subtenants, concessionaires, licensees,
invitees, customers, and employees shall have the nonexclusive right to use the
Common Area with Landlord, other owners of portions of the Property, other
tenants, and their respective subtenants, concessionaires, licensees, invitees,
customers, and employees, subject to the provisions of this Lease.
 
5.3 Maintenance and Operation
 
“Operating Expenses” shall include, but not be limited to, the costs and
expenses of operating, managing, lighting, repairing, replacing (when repairing
will be uneconomic), painting, and maintaining the Common Areas and the
remainder of the Property in reasonably good and sanitary order, condition, and
repair, including without limitation, the costs and expenses of the following:
(l) property management fees; (2) cleaning and removing rubbish and dirt, and
recycling expenses; (3) labor costs for personnel performing services in
connection with the operation,
 

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repair and maintenance of the Common Area or Property and the payroll taxes and
fringe and other benefits related thereto; (4) all utility services utilized in
connection with the Common Area and Property which are not separately metered to
the tenants, including but not limited to heating, ventilation, and air
conditioning (“HVAC”), if any; as well as electricity, gas, water charges, sewer
charges, hook-up fees, and cost of installing, maintaining and repairing the
Property’s intrabuilding network cabling, repair and/or installation of any fire
protection systems, security alarm systems, lighting systems, electrical systems
and any other utility systems; (5) cleaning, maintaining, repairing, replacing,
and re-marking paved and unpaved surfaces, curbs, signs, landscaping, lighting
and electrical facilities, drainage, elevators, escalators, meters, breakers,
security systems, life safety systems, irrigation systems, window, fences and
gates, wiring, and repairs, modifications, additions and replacements to the
foregoing whether or not necessitated by any present or future law, statute,
regulation, or directive of any governmental agency, and other similar items;
(6) all premiums on, deductibles, retentions, and claims not covered by,
worker’s compensation, casualty, public liability, property damage, loss of
rent, fire and extended coverage, and other insurance on the Common Area and
Property obtained by Landlord pursuant to Article 9, or otherwise; (7) rental of
or cost of tools, machinery, and equipment used in connection with managing,
repairing, cleaning and maintaining the Common Area; (8) the cost of all
janitors, gardeners, security personnel and equipment performing services on the
Common Area; (9) any regulatory fee or surcharge or similar imposition imposed
by governmental requirements based upon or measured by the number of parking
spaces, commuter trips, or the areas devoted to parking in the Common Area;
(10) the cost of other capital improvements to the Common Area; (11) all costs
and expenses incurred in connection with the management, maintenance, repair,
operation, and replacement of all landscaping and parking facilities serving the
Property; (12) the Property’s portion of the cost of any easements or other
agreements maintained for the benefit of the Property or the Property’s tenants
and occupants; (13) license, permit, and inspection fees associated with the
ongoing operation, maintenance, and repair of the Common Area; (14) the
Property’s portion of accounting (i.e., the salary and associated expenses of
Property accounting) and legal services directly attributable to the Property,
but excluding all such services in connection with negotiations and disputes
with specific tenants unless the matter involved affects all tenants of the
Property; and (15) a fee to Landlord for administration of the Property.
 
Notwithstanding the foregoing, Operating Expenses shall not include any expenses
incurred with respect to (i) reserved; (ii) the enforcement of leases; (iii)
reserved; (iv) financing costs or debt service costs for the Building or any
other property of Landlord; (v) reserved; (vi) costs and expenses which are
attributable to repairs or replacements to the extent covered by insurance or
warranties, or are otherwise paid for by a third party; (vii) reserved; (viii)
the cost of any improvement to, or repair or replacement of, the Common Areas,
which could be properly capitalized under generally accepted accounting
principles; however, there shall be permitted in such costs and expenses, a
charge for depreciation calculated on a straight-line basis over the normal
useful life of such improvement, repair or replacement; (ix) operating reserves;
(x) any repairs or replacements necessitated by Landlord’s negligence or willful
acts or the costs and expenses of repairing or replacing any portion of the
Common Areas, the original construction of which failed to comply with
applicable laws, codes and ordinances; (xi) taxes; (xii) financing expenses;
(xiii) brokerage expenses; (xiv) marketing expenses; (xv) work done to prepare
space for tenant occupancy; (xvi) rent concessions, construction allowances or
other inducements to spur tenant occupancy rates; (xvii) services provided for a
particular tenant or occupant of the Building; (xviii) charges (other than
Operating Expenses) specifically charged to tenants and other occupants of the
Building; (xix) reserved; and (xx) interest, late charges or penalties incurred
as a result of Landlord’s failure to pay bills in a timely manner.
 
5.4 Records
 
Landlord shall keep accurate records showing in reasonable detail all expenses
incurred for such maintenance. These records shall, upon at least thirty (30)
days’ request, be made available during business hours at the offices of
Landlord for inspection by Tenant. Any such inspection by Tenant shall take
place within three (3) years following the date of the annual reconciliation
statement
 

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(as defined in Paragraph 5.5 below) setting forth such expenses, or else any
disagreements or claims by Tenant in connection therewith shall be deemed
forever waived.
 
5.5 Tenant’s Contribution
 
From and after the Lease Commencement Date, and during the entire Initial Lease
Term and all Extended Terms, Tenant shall pay to Landlord on the first day of
each month, Tenant’s Pro Rata Share of the amount by which Operating Expenses
for a particular Lease Year exceed Operating Expenses for the Base Year, based
on, at Landlord’s election, either: (a) the amount of such expenses actually
incurred during the billing period; or (b) equal periodic installments which
have been estimated in advance by Landlord for a particular period. Landlord may
revise such estimates upward or downward at any time with reasonable prior
notice to Tenant. If Landlord elects to bill Tenant based upon estimates,
Landlord shall, within one hundred twenty (120) days after the end of the
calendar year, or as soon thereafter as possible, forward to Tenant a written
statement (the “annual reconciliation statement”) which adjusts the estimated
expenses to reflect the actual expenses incurred for such year. If the annual
reconciliation statement shows the actual expenses to have exceeded the
estimated expenses, then Tenant’s share of such additional amount shall be paid
by Tenant to Landlord within thirty (30) days of receipt of the annual
reconciliation statement; if the annual reconciliation statement shows the
actual expenses to have been less than the estimated expenses, Landlord shall at
its election pay the amount to Tenant or credit Tenant’s share against the sums
next due hereunder from Tenant to Landlord (or against any outstanding sums then
due). Notwithstanding anything herein to the contrary, Tenant’s liability with
respect to controllable Operating Expenses (excluding taxes and insurance) in
any given Lease Year shall not increase by more than one hundred five percent
(105%) of the amount of such costs for the preceding Lease Year on a cumulative
basis. For the purpose of this Section 5.6, “controllable Operating Expenses”
shall refer to all Operating Expenses other than Taxes, insurance, utilities,
snow removal, non-union labor and any other cost not within the reasonable
control of Landlord.
 
5.6 Operation and Control
 
Landlord shall have control and non-exclusive possession of the entire Common
Area and may from time to time adopt rules and regulations pertaining to the use
thereof. Landlord shall, except as otherwise provided herein, operate and
maintain the Common Area during the Lease Term. Landlord reserves the right to
use the Common Area for such promotions, exhibitions and similar uses as
Landlord reasonably deems in the best interests of the Property and its tenants.
Landlord may temporarily close parts of the Common Area for such periods of time
as may be necessary for (i) temporary use as a work area in connection with the
construction of buildings or other improvements within the Property or
contiguous property; (ii) repairs or alterations in or to the Common Area to any
utility facilities; (iii) preventing the public from obtaining prescriptive
rights in or to the Common Area; (iv) emergency or added safety reasons;
(v) temporary use of the Common Area for entertainment, performance or shopping
events; or (vi) performing such other acts as in Landlord’s reasonable judgment
are appropriate for the proper operation or maintenance of the Property.
Landlord shall have the sole and exclusive control of the Common Area.
Landlord’s rights shall include, but not be limited to, the right to
(vii) restrain the use of the Common Area by unauthorized persons;
(viii) utilize from time to time any portion of the Common Area for promotional,
entertainment and related matters; (ix) place permanent or temporary kiosks,
displays, carts and stands in the Common Area and to lease same to tenants;
(x) temporarily close any portion of the Common Area for repairs, improvements
or alterations, to discourage non-customer use, to prevent dedication or an
easement by prescription, or for any other reason deemed sufficient in
Landlord’s judgment; and (xi) change the shape and size of the Common Area, add,
eliminate or change the location of improvements to the Common Area, including,
without limitation, buildings, lighting, parking areas, roadways and curb cuts,
and construct buildings on the Common Area. Landlord may determine the nature,
size and extent of the Common Area and whether portions of the same shall be
surface, underground or multiple-deck; as well as make changes to the Common
Area from time to time which in Landlord’s opinion are deemed desirable for the
Property. The manner in which the Common Area shall be operated and maintained
and the expenditures therefor shall be in Landlord’s sole discretion. Landlord
reserves the right to appoint a substitute operator, including
 

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but not limited to, any tenant in the Property, to carry out any or all of
Landlord’s rights and duties with respect to the Common Area as provided in this
Lease; and Landlord may enter into a contract either by a separate document or
in a Lease agreement with such operator on such terms and conditions and for
such period as Landlord shall deem proper.
 
5.7 Obstructions
 
No fence, wall, structure, division, rail or obstruction shall be placed, kept,
permitted or maintained upon the Common Area or any part thereof by Tenant.
Tenant shall not conduct any sale, display, advertising, promotion, or storage
of merchandise or any business activities of any kind whatsoever in or upon the
Common Area without Landlord’s prior written consent. Tenant shall not use the
Common Area for solicitations, demonstrations or any other activities that would
interfere with the conduct of business in the Property, or which might tend to
create civil disorder or commotion.
 
5.8 Allocation of Expenses; Gross Up
 
Those Operating Expenses, Taxes, and insurance costs that Landlord reasonably
determines should be allocable to all tenants of the Property shall be
considered to be Property Operating Expenses, Taxes, and insurance costs,
respectively, and those Operating Expenses, Taxes and insurance costs that
Landlord reasonably determines should be allocable only to specific tenants
shall be shared among only those tenants. Landlord also reserves the right to
create, as appropriate, new categories of Operating Expenses, Taxes, and
insurance costs, if certain Operating Expenses, Taxes, and/or insurance costs
are reasonably allocable only to Tenant and not to all tenants of the Building.
In such case, Tenant’s Pro Rata Share shall be established for such
separately-categorized Operating Expenses, Taxes, and/or insurance costs, and
Tenant shall be responsible for paying the costs and expenses of installing
meters or other devices to determine the actual cost or expense of such
separately categorized Operating Expenses, Taxes, or insurance costs on a pro
rata basis with those other tenants, if any, that are responsible for paying a
portion of such separately-categorized Operating Expenses, Taxes and insurance
costs, as applicable. If less than an average of ninety-five percent (95%) of
the rentable area of the Property is occupied by tenants during all or any
portion of a lease year, Landlord shall make an appropriate adjustment of those
Operating Expenses and insurance costs that vary by occupancy, including for
purposes of calculating Tenant’s estimated payments of increases thereof,
employing sound accounting and property management principles, to determine the
amount of Operating Expenses and taxes that would have been expended or incurred
had ninety-five percent (95%) of the rentable area of the Property been occupied
during the entire year.
 
ARTICLE 6
 

 
TAXES
 
6.1 Personal Property Taxes
 
Tenant shall pay before delinquency all license fees, public charges, taxes and
assessments on the furniture, fixtures, equipment, inventory and other personal
property of or being used by Tenant in the Premises, whether or not owned by
Tenant.
 
6.2 Real Property Taxes
 
Tenant shall pay to Landlord as Additional Rent, in the manner set forth in
Paragraph 5.5, Tenant’s Pro Rata Share of the amount by which “Taxes” (as
defined below) for a particular Lease Year exceed Taxes for the Base Year. As
used herein, Taxes shall mean all real property taxes, excises, license and
permit fees, utility levies and charges, business improvement districts,
transport fees, trip fees, monorail and other light rail fees or assessments,
transportation management program fees, school fees, fees assessed by air
quality management districts or any governmental agency regulating air pollution
or commercial rental taxes, and other governmental charges and assessments,
general and special, and installments thereof (including any business and
occupation tax imposed on Landlord, the Building or the Property, and any tax
imposed on the rents collected therefrom or on the income generated thereby,
whether or not substituted in whole or in part for real property taxes, as well
as assessments and any license fee imposed by a local governmental body on the
collection of rent), which
 

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shall be levied or assessed against all or any portion of the Premises, or
imposed on Landlord for any period during the Term of this Lease. Said Taxes
attributable to the years that this Lease commences and terminates shall, if
necessary, be prorated and apportioned between Landlord and Tenant to coincide
with the commencement and expiration of the Lease Term.
 
6.3 Business Taxes
 
Tenant shall also pay Tenant’s Pro Rata Share of: (a) all special taxes and
assessments or license fees now or hereafter levied, assessed or imposed by law
or ordinance, by reason of Tenant’s use of the Premises; (b) all business and
occupation tax and any tax, assessment, levy or charge assessed on the Rent paid
under this Lease; and (c) metropolitan improvement and other business
improvement district fees.
 
6.4 Substitute and Additional Taxes
 
If, at any time during the Term, the methods of taxation prevailing on the
execution date hereof shall be altered so that in lieu of, or as a supplement to
or as a substitute for, the whole or any part of the Taxes now levied, assessed
or imposed on the Premises or the Property, there shall be levied, assessed or
imposed a tax, assessment, levy, imposition or charge, wholly or partially as a
capital levy or otherwise, on the rents received therefrom, or a tax,
assessment, levy (including but not limited to any municipal, state, or federal
levy), imposition or charge measured by or based in whole or in part upon the
Premises and imposed upon Landlord, or a license fee measured by the rent
payable under this Lease or by expenditures made by Tenant on Landlord’s behalf
in connection which this Lease, then all such taxes, assessments, levies,
impositions, charges of the part thereof so measured or based, shall be deemed
to be included within the term “Taxes” as defined in Article 6 hereof, and
Tenant shall pay and discharge the same in the manner provided for the payment
of Taxes herein, it being the intention of the parties hereto that the rent to
be paid hereunder shall be paid to Landlord absolutely net, without deduction of
any kind or nature whatsoever.
 
6.5 Commercial Rent Tax
 
Tenant shall pay to Landlord, in addition to and together with any and all
installments of Minimum Monthly Rent, Additional Rent and other charges payable
pursuant to this Lease, the excise, transaction, sales, privilege, or other tax
(other than net income and/or estate taxes) now or in the future imposed by the
city, county, state or any other government or governmental agency upon Landlord
and attributable to or measured by the Minimum Monthly Rent, Operating Expenses,
Additional Rent or other charges or prorations payable by Tenant pursuant to
this Lease.
 
ARTICLE 7
 

 
UTILITIES AND SERVICES
 
7.1 Utilities and Services
 
Provided that Tenant is not in default under this Lease, Landlord will provide
the following services:
 
7.1.1 Maintain normal business hours at the Building, Monday through Friday from
7:00 a.m. to 6:00 p.m.
 
7.1.2 Furnish utilities to provide for lighting, convenience power, and heat and
air conditioning capable of maintaining a temperature in accordance with
applicable energy code requirements. Landlord shall cause the Premises to be
supplied with electricity for standard power usage. As used herein, “standard
power usage” means use of electricity for building standard lighting and office
standard machines used in quantities and for amounts of time typically used by
tenants in the building for ordinary office use and in no event exceeding
3.5 watts per RSF of the Premises. As use herein, “office standard machines”
means typewriters, dictaphones, desk top calculators, desk top computer
terminals and other analogous office equipment with equal or lesser power
requirements, all operating on 110 volt circuits. High power usage equipment
includes without limitation, data processing
 

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machines, punch card machines, computers, and machines that operate on 220-volt
circuits. Tenant shall not install or operate high power usage equipment on the
Premises without Landlord’s prior written consent, which may be refused unless
Tenant confirms in writing its obligation to pay the additional charges
necessitated by such equipment. Electricity used by Tenant in the Premises
shall, at Landlord’s option, be paid for by Tenant either: (i) through inclusion
in Operating Expenses (except as otherwise provided herein for excess usage);
(ii) by a separate charge payable by Tenant to Landlord within 30 days after
billing by Landlord; or (iii) by separate charge billed by the applicable
utility company or reseller and payable directly by Tenant. Electrical service
to the Premises may be furnished by one or more companies providing electrical
generation, transmission and distribution services, and the cost of electricity
may consist of several different components or separate charges for such
services, such as generation, distribution and stranded cost charges. Landlord
shall have the exclusive right to select any company providing electrical
service to the Premises, to aggregate the electrical service for the Property,
any Buildings and the Premises with other Buildings, to purchase electricity
through a broker and/or buyers group and to change the providers and manner of
purchasing electricity. Whenever heat generating machines or equipment or
lighting other than building standard lights in excess of Tenant’s requirements
described herein are used in the Premises by Tenant which affect the temperature
otherwise maintained by the air cooling system, Landlord shall have the right to
install supplementary air cooling units in the Premises, and the cost thereof,
including the cost of installation and the cost of operation and maintenance
thereof, shall be paid by Tenant upon billing. Landlord may impose a reasonable
charge for utilities and services, including without limitation, air cooling,
electric current and water, required to be provided the Premises by reason of,
(a) any substantial recurrent use of the Premises at any time other than the
hours of 7:00 a.m. to 6:00 p.m., Monday through Friday, and 8:00 a.m. to
12:00 p.m. Saturday (b) any use beyond what Landlord agrees to furnish as
described above, (c) electricity used by equipment designated by Landlord as
high power usage equipment, or (d) the installation, maintenance, repair,
replacement or operation of supplementary air cooling equipment, additional
electrical systems or other equipment required by reason of special electrical,
heating, cooling or ventilating requirements of equipment used by Tenant at the
Premises. In no event shall Tenant install portable low voltage A/C units
anywhere within the Premises.
 
7.1.3 Provide non-attended passenger elevator facilities during all working days
(Saturday, Sunday and holidays one elevator subject to call).
 
7.1.4 Landlord shall provide janitorial services to the Premises during normal
business hours. Such services shall be similar to that furnished in comparable
general office space in the vicinity of the Building. Any and all additional
janitorial service desired by Tenant shall be contracted for by Tenant directly
with Landlord’s janitorial agent.
 
7.1.5 Provide water for drinking, lavatory and toilet purposes drawn through
fixtures installed by Landlord.
 
7.1.6 Maintain the Property and Common Area in reasonably good condition and in
compliance with all governmental codes, rules and regulations.
 
7.1.7 Replace burned out fluorescent tubes in light fixtures that are standard
for the Building. Burned out bulbs, tubes or other light sources in fixtures
that are not standard for the Building will be replaced by Landlord, but at
Tenant’s expense.
 
7.2 Payment
 
Costs for all services rendered under this paragraph shall be included in
Operating Expenses unless specifically excluded above or in Article 5 of this
Lease.
 

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7.3 Interruptions
 
It is understood that Landlord does not warrant that any of the services
referred to above will be free from interruption by virtue of a strike or a
labor trouble or any other cause beyond Landlord’s reasonable control. Such
interruption of service shall never be deemed an eviction or disturbance of
Tenant’s use or possession of the Premises, or any part thereof, nor shall it
render Landlord liable to Tenant for damages, by abatement or reduction of rent
or otherwise, nor shall it relieve Tenant from performance of Tenant’s
obligations under this Lease, nor shall Tenant be relieved from the performance
of any covenant or agreement in this Lease because of such failure or
interruption; provided that Tenant’s responsibility for Minimum Monthly Rent
shall abate beginning on the second (2nd) day after the interruption caused by
the gross negligence or intentional misconduct of Landlord or its agents or
employees which renders all or a portion of its Premises untenantable (in
proportion to the amount of Tenant’s space rendered untenantable), and
continuing until the interrupted service or utility no longer renders a
significant portion of the Premises untenantable. Landlord reserves the right to
stop service of the elevator, plumbing, HVAC and electrical systems, when
necessary, by reason of accident or emergency, or for repairs, alterations or
improvements, which are in the reasonable judgment of Landlord desirable or
necessary, until said repairs, alterations or improvements shall have been
completed; provided, Landlord shall use its good faith efforts to try to
minimize interruption to Tenant’s business operations.
 
ARTICLE 8
 

 
REPAIRS AND ALTERATIONS
 
8.1 Landlord’s Repairs
 
Landlord shall keep in good condition and repair the structure, foundation,
bearing walls, roof system, HVAC and mechanical systems and components,
plumbing, electrical, and utility lines serving the Building, the costs of which
shall be included in Operating Expenses pursuant to Paragraph 5.4, and paid by
Tenant in accordance with Paragraph 5.5, but which shall be paid solely by
Tenant in the event that the repair or replacement relates solely to the
Premises or is necessitated by Tenant’s actions, or if not, which shall be pro
rated and paid by Tenant in accordance with Paragraph 5.5), provided further
that Landlord shall not be required to make any such repairs or replacements
occasioned by the act or negligence of Tenant, its agents, employees, invitees,
licensees, representatives or contractors. Nothing contained in this
Paragraph 8.1 shall limit Landlord’s right to reimbursement from Tenant for
maintenance, repair costs and replacement costs provided elsewhere in this
Lease.
 
8.2 Tenant’s Repairs
 
Except as expressly provided in Paragraph 8.1, Tenant shall, at its sole cost,
keep in first-class appearance, in a condition at least equal to that which
existed when Tenant initially began operating at the Premises (casualty and
ordinary wear and tear excepted), and in good order, condition, cleanliness and
repair, the interior of the Premises and every part thereof, including without
limitation, the interior surfaces of the walls and ceilings (including all
interior painting thereof), all doors, door frames, door checks, interior
relites and other glass, trade fixtures, floor coverings (including periodic
shampooing of all carpets), maintenance, repair and lightbulb replacement for
all non-Building standard lighting fixtures, and any mechanical systems or
equipment installed for the sole use by Tenant. All equipment, facilities or
fixtures shall, at Tenant’s sole expense, be kept, repaired, maintained,
replaced or added to by Tenant at all times in accordance with all governmental
requirements. In the event that Tenant fails to comply with the obligations set
forth in this Paragraph 8.2, Landlord may, but shall not be obligated to,
perform any such obligation on behalf of, and for the account of Tenant, and
Tenant shall reimburse Landlord for all costs and expenses paid or incurred on
behalf of Tenant in connection with performing the obligations set forth herein.
Tenant expressly waives the right to make repairs at Landlord’s expense under
any law, statute or ordinance now or hereafter in effect.
 
8.3 Alterations
 
 

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(a) Tenant’s Alterations
 
Tenant shall not make any alterations, decorations, changes, installations or
improvements (collectively, “Tenant Changes”) in, to, or about the interior or
exterior of the Premises without obtaining the prior written consent of Landlord
not to be unreasonably withheld, conditioned, or delayed. Tenant’s request for
Landlord’s consent to perform any Tenant Changes which may affect the HVAC
system or cause penetration through the roof of the Building, must be
accompanied by plans and specifications (to be prepared by Tenant at Tenant’s
sole cost) for the proposed Tenant Change in detail reasonably satisfactory to
Landlord, together with notice of the identity of the licensed contractor which
Tenant has or will engage to perform such work, plus a review fee not to exceed
$300.00. Landlord shall grant or withhold its approval of such plans and
specifications within fifteen (15) business days after Tenant makes request
therefor in the manner provided herein; provided, however, if Landlord needs to
consult with an outside consultant or expert with respect thereto, Landlord’s
consent shall be granted or denied not later than ten (10) business days after
the expiration of such 15-day period. All such work shall be accomplished at
Tenant’s sole risk and expense, and Tenant shall indemnify, defend and hold
harmless Landlord from and against any and all loss, cost, liability and expense
(including consequential damages) relating to or arising from the Tenant
Changes. All Tenant Changes shall become a part of the realty upon installation
thereof.
 
(b) Approval Not Required
 
Notwithstanding Paragraph 8.3(a), with respect to carpeting and painting of the
interior portions of the Premises and other Tenant Changes which (i) are
non-structural in nature (i.e., do not involve changes to or penetrations of any
portion of the Building or the Property); (ii) do not involve changes to the
building’s systems, including without limitation, the roof, electrical,
plumbing, and HVAC systems (the Tenant Changes described in clauses (i) and
(ii) hereof are collectively called “Non-Structural Changes”); and (iii) in the
aggregate would not cost in excess of $30,000 when added together with the cost
of all other Non-Structural Changes made by or for Tenant during the prior
12 month period, Tenant need not obtain Landlord’s prior written consent, but
must notify Landlord in writing within ten (10) days prior to the commencement
of such Non-Structural Changes. Landlord may elect upon expiration or
termination of this Lease to require Tenant, at Tenant’s sole cost, to remove
all Tenant Changes installed by Tenant pursuant to this paragraph and to restore
the Premises to substantially their condition prior to the installation thereof.
Upon approval of any Tenant Changes, Tenant may request Landlord to specify
which of said Tenant Changes shall be removed from the Premises upon expiration
of the Lease Term. In no event shall the initial Tenant’s Work be required to be
removed upon expiration of the Lease Term.
 
8.4 General Conditions
 
Tenant shall at all times comply with the following requirements when performing
any work pursuant to Paragraphs 8.2 or 8.3:
 
(a) Contractors
 
Tenant shall use the contractors and mechanics then appearing on Landlord’s
approved list or those approved by Landlord if the Tenant Changes involve
changes to the Building’s systems and/or structural elements. With respect to
Non-Structural Changes, Tenant shall use such contractors and mechanics which
Landlord approves of in writing prior to their use, which approval shall not be
unreasonably withheld. All contractors used by Tenant shall be licensed
contractors who are experienced in the type of work to be performed, and shall
provide to Landlord certificates of liability insurance evidencing coverage in
force from insurance and with liability limits reasonably acceptable to
Landlord, and naming Tenant, Landlord and the Property Manager as additional
insureds.
 
(b) Compliance With Laws
 
All Tenant Changes shall at all times comply with all laws, rules, orders and
regulations of governmental authorities having jurisdiction thereof and all
insurance requirements of this Lease, shall comply with the rules and
regulations for the Property now or hereafter in existence, and shall comply
with the plans and specifications approved by Landlord.
 

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(c) Tenant’s Responsibility
 
All Tenant Changes shall be made and completed at Tenant’s sole cost and
expense, and the Property and the Premises shall be kept lien-free at all times
by Tenant.
 
8.5 Americans with Disabilities Act Compliance
 
Landlord and Tenant acknowledge that, in accordance with the provisions of the
Americans with Disabilities Act of 1990, together with its implementing
regulations and guidelines (collectively, the “ADA”), responsibility for
compliance with the terms and conditions of Title III of the ADA may be
allocated as between the parties. Notwithstanding anything to the contrary
contained in the Lease, Landlord and Tenant agree that the responsibility for
compliance with the ADA (including, without limitation, the removal of
architectural and communications barriers and the provision of auxiliary aids
and services to the extent required) shall be allocated as follows: (i) Tenant
shall be responsible for compliance with the provisions of Title III of the ADA
for any construction, renovations, alterations and repairs made within the
Premises if such construction, renovations, alterations and repairs are made by
Tenant at its expense without the assistance of the Landlord; (ii) Landlord
shall be responsible for compliance with the provisions of Title III of the ADA
for all construction, renovations, alterations and repairs Landlord makes within
the Premises, whether at Landlord’s or Tenant’s expense; and (iii) Landlord
shall be responsible for compliance with the provisions of Title III of the ADA
for all Landlord’s Work (if any) and for exterior and interior areas of the
Building not included within the Premises. Landlord and Tenant each agree that
the allocation of responsibility for ADA compliance shall not require either
party to supervise, monitor or otherwise review the compliance activities of the
other party with respect to its assumed responsibilities for ADA compliance as
set forth in this paragraph.
 
ARTICLE 9
 

 
INSURANCE
 
9.1 Use Rate
 
Tenant shall not carry any stock of goods or do anything in or about the
Premises which will cause an increase in insurance rates on the building in
which the Premises are located. In no event shall Tenant perform any activities
which would invalidate any insurance coverage on the Property or the Premises.
Tenant shall pay on demand any increase in premiums that may be charged as a
result of Tenant’s use or activities or vacating or otherwise failing to occupy
the Premises, but this provision shall not be deemed to limit in any respect
Tenant’s obligations under Article 14. In no event shall the limits of insurance
required to be maintained by Tenant pursuant to this Lease be deemed to limit
the liability of Tenant hereunder.
 
9.2 Liability Insurance
 
Tenant shall, during the Lease Term, at its sole expense, maintain in full force
a policy or policies of Commercial general liability (CGL) insurance including
contractual, on an occurrence basis, with coverage at least as broad as the most
commonly available ISO Commercial General Liability policy CG 00 01, at least
Two Million Dollars ($2,000,000) per occurrence limit, Two Million Dollars
($2,000,000) general aggregate limit, including any necessary and appropriate
extensions to comply with the additional requirements of this Lease. Tenant
shall also maintain Commercial Automobile coverage, One Million Dollars
($1,000,000) combined single limit/per accident, covering injury (or death) and
property damage arising out of the ownership, maintenance, or use of any private
passenger or commercial vehicles and of any other equipment required to be
licensed for road use. Such limits may be achieved through the use of umbrella
liability insurance otherwise meeting the requirements of this paragraph. Such
insurance shall also cover independent contractors liability, products and
completed operations liability, and personal injury liability.
 
9.3 Worker’s Compensation Insurance
 
Tenant shall at all times maintain worker’s compensation insurance in compliance
with federal, state and local law including Employer’s Liability
 

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coverage (contingent liability/stop gap) in the amount of $1,000,000 each
accident; $1,000,000 bodily injury by disease policy limit; and $1,000,000
bodily injury each employee.
 
9.4 Property Insurance/Business Income
 
.
 
(a) Landlord’s Insurance
 
Landlord shall pay for and shall maintain in full force and effect during the
Term of this Lease property insurance with respect to the Property as it may
require and as may be required by its lender, which coverage may include at
Landlord’s option special extended coverage, earthquake and sprinkler leakage
coverage, boiler and machinery, difference in conditions, business income and
extra expense, building ordinance, terrorism, and excess rental value
endorsements, along with rent loss insurance. Tenant shall pay Tenant’s Pro Rata
Share for the costs incurred by Landlord for such insurance in excess of the
costs thereof for the Base Year in accordance with the payment provisions set
forth in Paragraph 5.5 above.
 
(b) Tenant’s Insurance
 
Tenant shall pay for and shall maintain in full force and effect during the Term
of this Lease property insurance covering its leasehold improvements to the
Premises, furniture, fixtures, equipment, inventory and other personal property
located on the Premises in an amount of not less than one hundred percent (100%)
insurable replacement value with no coinsurance penalty, “Special Form—Causes of
Loss,” with Flood Insurance and earthquake (but only if required by Landlord’s
lender), with an Ordinance of Law endorsement, and with replacement cost
coverage to protect against loss of owned or rented equipment and tools brought
onto or used at the Property by Tenant.
 
9.5 Waiver of Subrogation
 
Except for the waiving party’s deductible amount, each party hereby waives, and
each party shall cause their respective property insurance policy or policies to
include a waiver of such carrier’s, entire right of recovery (i.e., subrogation)
against the other party, and the officers, directors, agents, representatives,
employees, successors and assigns of the other party, for all claims which are
covered or would be covered by the property insurance required to be carried
hereunder or which is actually carried by the waiving party.
 
9.6 General Requirements
 
All policies of insurance required to be carried hereunder by Tenant shall be
evidenced by an appropriate evidence of insurance (ACORD Form 28), which
evidences must contain the following additional clause:
 
“It is agreed that this insurance will not be canceled, not renewed, or the
limits of coverage in any way reduced without at least thirty (30) days’ advance
written notice [ten (10) days for nonpayment of premiums] sent by certified
mail, return receipt requested, to ____________________ [Insert Landlord’s name
and address]”
 
(a) Licensed in State
 
Be written by companies reasonably satisfactory to Landlord and licensed to do
business in the state of in which the Premises are situated. All policies of
insurance required to be maintained by Tenant shall be issued by insurance
companies with an A.M. Best’s financial strength rating of “A-” or better and an
A.M. Best’s Financial Size Category of Class “IX” or higher, and shall not
contain a deductible greater than $5,000 or any self-insured retention unless
expressly approved in writing by Landlord.
 
(b) Primary
 
Contain a clause that such policy and the coverage evidenced thereby shall be
primary and non-contributing with respect to any policies carried by Landlord,
and that any coverage carried by Landlord shall be excess insurance. All
insurance coverage must be on an “occurrence basis”; “claims made” forms of
insurance are not acceptable, and shall contain a severability of interests
indorsement.
 

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(c) Additional Named Insured
 
Liability policies shall name Landlord, Landlord’s property manager, and such
other parties reasonably selected by Landlord as additional insureds utilizing
ISO Endorsement CG 20-11-01-96 or its equivalent (“certificate holder” status is
not acceptable). Landlord shall be listed as a “loss payee” on property policies
as its interests may appear.
 
(d) Notice of Cancellation
 
Not be subject to cancellation or reduction in coverage except upon at least
thirty (30) days prior written notice to each additional insured. The policies
of insurance containing the terms specified herein, or duly executed
certificates evidencing them, together with satisfactory evidence of the payment
of premiums thereon, shall be deposited with Landlord prior to the Possession
Date and thereafter not less than thirty (30) days prior to the expiration of
the original or any renewal term of such coverage. If Tenant fails to comply
with the insurance requirements set forth in this Lease, Landlord shall have the
right, but not the obligation, at any time and from time to time, without
notice, to procure such insurance and/or pay the premium for such insurance, in
which event Tenant shall repay Landlord, immediately upon demand by Landlord, as
Additional Rent, all sums so paid by Landlord together with interest thereon and
any costs or expenses incurred by Landlord in connection therewith, without
prejudice to any other rights and remedies of the Landlord under this Lease.
 
9.7 Blanket Insurance
 
Each party shall be entitled to fulfill its insurance obligations hereunder by
maintaining a so-called “blanket” policy or policies of insurance. Such policy
shall contain an endorsement that names the other party as an additional
insured, references the Premises, and guarantees a minimum limit of coverage
available for the obligations under this Lease at least equal to the insurance
amounts required hereunder. Tenant’s right to fulfill its insurance obligations
hereunder through a “blanket” policy shall be subject to approval of such policy
by Landlord and Landlord’s lender(s).
 

 
ARTICLE 10
 

 
DAMAGE AND RESTORATION
 
10.1 Damage and Destruction of the Premises
 
If the Premises are at any time destroyed or damaged by a casualty insured
against by Landlord pursuant to Article 9 hereof or otherwise insured against by
Landlord, and if as a result of such occurrence:
 
(a) the Premises are rendered untenantable only in part, this Lease shall
continue in full force and effect and, provided Tenant shall have been operating
in the Premises for the Permitted Use set forth in the Basic Lease Provisions at
the time of the casualty and shall covenant in writing to Landlord that Tenant
shall reopen the Premises for such permitted use and will comply with the
provisions of Paragraph 10.3 below upon completion of Landlord’s reconstruction,
rebuilding or repair of the Premises, Landlord shall, subject to the provisions
of Paragraph 10.4 below, commence diligently to reconstruct, rebuild or repair
the Premises to the extent only of Landlord’s Work set forth in Exhibit “C”
(Landlord shall have no obligation to construct any of Tenant’s Work). In such
event, Minimum Monthly Rent shall abate proportionately to the portion of the
Premises rendered untenantable from the date of the destruction or damage until
the entire Premises have been restored by Landlord to the extent of Landlord’s
Work as set forth on Exhibit “C” hereto;
 
(b) the Premises are rendered totally untenantable, provided Tenant shall have
been operating in the Premises for the Permitted Use set forth in the Basic
Lease Provisions at the time of the casualty and shall covenant in writing to
Landlord that Tenant shall reopen the Premises for such use and will comply with
the provisions of Paragraph 10.3 below upon completion of Landlord’s
reconstruction,
 

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rebuilding or repair of the Premises, Landlord shall, subject to Paragraph 10.4
hereof, commence diligently to reconstruct, rebuild or repair the Premises to
the extent only of Landlord’s Work as set forth on Exhibit “C” (Landlord shall
have no obligation to perform any of Tenant’s Work). In such event, Minimum
Monthly Rent shall abate entirely from the date of the destruction or damage
until the Premises have been restored by Landlord to the extent of Landlord’s
Work as set forth on Exhibit “C” hereto.
 
(c) If the Premises or the Building is damaged or destroyed by fire or any
casualty which, in Landlord’s commercially reasonable opinion, cannot, despite
diligent, good faith efforts be repaired or restored within one hundred twenty
(120) days following the date on which such repair or restoration work
substantially commences, then Tenant may elect to terminate the Lease effective
as of the date of such damage or destruction. Within sixty (60) days after the
date of such damage, the Landlord shall reasonably determine how long the repair
and restoration will take. After that determination has been made, Tenant shall
have a period of ten (10) days to terminate the Lease by giving written notice
to Landlord.
 
10.2 Damage or Destruction of Property
 
(a) If 25% or more of the Leasable Area of the Property is at any time destroyed
or damaged (including, without limitation, by smoke or water damage) as a result
of fire, the elements, accident, or other casualty, whether or not the Premises
are affected by such occurrence, Landlord may, at its option, to be exercised by
written notice to Tenant within ninety (90) days following any such occurrence,
elect to terminate this Lease so long as Landlord terminates the leases of all
other similarly situated tenants. In the case of such election, the Term and
tenancy created hereby shall expire on the thirtieth (30th) day after such
notice is given, without liability or penalty payable or any other recourse by
one party to or against the other; and Tenant shall, within such 30-day period,
vacate the Premises and surrender them to Landlord. All rent shall be due and
payable without reduction or abatement subsequent to the destruction or damage
and until the date of termination, unless portions of the Premises shall have
been destroyed or damaged, in which event the terms of Paragraph 10.1(a) or (b),
as applicable, of this Lease shall apply to determine the extent of any
abatement of Minimum Monthly Rent to which Tenant may be entitled as a result
thereof.
 
(b) If Landlord does not elect to terminate this Lease in accordance with the
terms of Paragraph 10.2(a), Landlord shall, following such destruction or
damage, commence diligently to reconstruct, rebuild, or repair, if necessary,
that part of the Property which is necessary, in Landlord’s sole judgment, to
create an economically viable unit. However, Landlord shall reconstruct,
rebuild, or repair the Premises and the Property to the extent only of proceeds
received by Landlord from its insurers and as permitted by Landlord’s mortgagees
or other lenders. Further, if Landlord elects to repair, reconstruct, or rebuild
the Property, or any part thereof, Landlord may use plans, specifications, and
working drawings other than those used in the original construction of the
Property.
 
10.3 Tenant’s Work
 
[Reserved].
 
10.4 Limitation of Obligations
 
Notwithstanding anything set forth to the contrary herein, in the event the
Premises or Property are damaged as a result of any cause in respect of which
there are no insurance proceeds available to Landlord, or the proceeds of
insurance are insufficient in Landlord’s commercially reasonable judgment to pay
for the costs of repair or reconstruction, or any mortgagee or other person
entitled to the proceeds of insurance does not consent to the payment to
Landlord of such proceeds to fully restore the Premises or Property, or if the
Premises or Property cannot be fully restored to its prior condition under land
use, zoning, and building codes in force at the time a permit is sought for
repair or reconstruction, then Landlord may, without obligation or liability to
Tenant, terminate this Lease on thirty (30) days’ written notice to Tenant (so
long as Landlord terminates the leases of all other
 

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similarly situated tenants) and all rent shall be adjusted as of the effective
date of such termination, and Tenant shall vacate and surrender the Premises on
the date set forth in Landlord’s termination notice.
 
10.5 Damage or Destruction at End of Term
 
Notwithstanding anything to the contrary contained herein, Landlord shall not
have any obligation to repair, reconstruct, or restore the Premises or Property
when the damage or destruction occurs during the last eighteen (18) months of
the Term of this Lease; provided, however, that Tenant may nullify Landlord’s
election by exercising any remaining extension options.
 
10.6 Waiver
 
Tenant hereby waives any statutory and common law rights of termination which
may arise by reason of any partial or total destruction of the Premises which
Landlord is obligated to restore or may restore under any of the provisions of
this Lease.
 
ARTICLE 11
 

 
SECURITY DEPOSIT; LETTER OF CREDIT
 
11.1 Security Deposit
 
Tenant has deposited with Landlord the Security Deposit set forth in the Basic
Lease Provisions above, to be held by Landlord during the Term as set forth
below. The Security Deposit shall be held by Landlord without liability for
interest and as security for the performance by Tenant of Tenant’s covenants and
obligations hereunder, it being expressly understood that the Security Deposit
shall not be considered as a measure of Tenant’s damages in case of default by
Tenant. Landlord may, in its sole discretion, from time to time without
prejudice to any other remedy, use the Security Deposit to the extent necessary
to make good any default under this Lease or to satisfy any other covenant or
obligation of Tenant hereunder. Following any such application of the Security
Deposit, Tenant shall pay to Landlord on demand the amount so applied in order
to restore the Security Deposit to its original amount. If Tenant is not in
default at the termination of this Lease, the balance of the Security Deposit
remaining after any such application shall be returned to Tenant within a
reasonable period after such termination, after deducting therefrom any unpaid
obligation of Tenant to Landlord as may arise under this Lease, including,
without limitation, the obligation of Tenant to restore the Premises upon
termination of this Lease. If Landlord transfers its interest in the Premises
during the Term of this Lease, Landlord may assign the Security Deposit to the
transferee provided that such transferee accepts, in writing, to be bound by the
terms of this Lease as the landlord hereunder.
 
Provided Tenant is not then in uncured default, the required amount of the
Security Deposit shall be reduced to the following amounts on the following
dates:
 
 
 
Date
 
Amount
Of
Security Deposit
 
Mutual Execution
 
$
538,069.80 (the “Original Deposit”)
 
Beginning of Lease Month 13
 
$
403,552.35
 
Beginning of Lease Month 25
 
$
269,034.90
 
Beginning of Lease Month 37
 
$
134,517.45
 
Beginning of Lease Month 49
 
$
89,678.30
 

 
11.2 Letter of Credit
 
(a) General
 
In lieu of providing the cash Security Deposit set forth in Paragraph 11.1
above, Tenant shall have a one-time right to elect to provide an original
irrevocable letter of credit (the “Letter of Credit”) naming Landlord as
beneficiary, from Charter Bank or such other financial institution reasonably
satisfactory to Landlord (the “Issuer”) but in any event which has an investment
grade rating from Standard and Poors or Moody’s, and either (i) has a letter of
credit counter located in King County, Washington, upon which draws can be made
in person, or (ii) has a local correspondent based in King County, Washington,
upon which draws can be made in person without delay. Each Letter of Credit
shall be in substantially the form of Exhibit “F“ hereto. Each Letter of Credit
shall be for a term of not less than one (1) year and shall be irrevocable
during that term. Each Letter of Credit shall provide that it will be honored at
sight upon a signed statement by Landlord or its agent that Landlord is entitled
to draw upon the Letter of Credit, and shall require no signature or statement
from any party other than Landlord or such agent. Without limiting the
generality of the foregoing, no notice to Tenant shall be required to enable
Landlord to draw upon the Letter of Credit, and the Letter of Credit will be
honored by the Issuer without inquiry as to the accuracy thereof and regardless
of whether Tenant disputes the content of such statement. Each Letter of Credit
shall also provide that, following the honor of any drafts in an amount less
than the aggregate amount of the Letter of Credit, the Issuer shall return the
original Letter of Credit to Landlord and Landlord’s rights as to the remaining
amount of the Letter of Credit will not be extinguished.

(b) Issuer Insolvency
 
If the Issuer shall admit in writing its inability to pay its debts generally as
they become due, file a petition in bankruptcy or a petition to take advantage
of any insolvency act, make an assignment for the benefit of its creditors
consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the Federal bank-ruptcy laws or any other
applicable law or statute of the United States of America or any state thereof
(each of the foregoing, an “Issuer Insolvency”), Landlord shall have the right
to draw upon the Letter of Credit and hold the proceeds thereof as a Security
Deposit.

(c) Time for Obtaining Letter of Credit
 
If Tenant desires to provide a Letter of Credit in lieu of the cash Security
Deposit described in Paragraph 11.1 above, it must provide same to Landlord by
the mutual execution hereof. Letters of Credit covering subsequent periods shall
be obtained and delivered to Landlord not less than thirty (30) days prior to
the expiration of the then existing Letter of Credit (“Letter of Credit Date”).
The term for each such Letter of Credit shall begin no later than the expiration
date of the previously-effective Letter of Credit and shall comply with all
requirements of this Lease.

(d) Amounts for Letters of Credit
 
Provided Tenant is not then in uncured default, the Letter of Credit shall be
subject to reduction at the same times and to the same amounts as provided for
the reduction of the Security Deposit in Paragraph 11.1 above.

(e) Uses of Letter of Credit
 
Landlord shall have the right to draw upon a Letter of Credit up to its full
amount whenever (w) an uncured default under this Lease has oc-curred, or (x) an
event or circumstance has occurred which with notice or passage of time, or
both, would constitute a default under the Lease, notwithstanding that
transmittal of any such notice may be barred by applicable law; or (y) a

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satisfactory new Letter of Credit has not been delivered to Landlord prior to
the applicable Letter of Credit Date; or (z) in the event of an Issuer
Insolvency. Landlord may draw upon the full amount of the then existing Letter
of Credit without giving any further notice or time to cure to Tenant. No such
draw shall (i) cure or constitute a waiver of a default, (ii) be deemed to fix
or determine the amounts to which Landlord is entitled to recover under this
Lease or otherwise (including without limitation in the event of the bankruptcy
or insolvency of Tenant), or (iii) be deemed to limit or waive Landlord’s right
to pursue any rights or remedies provided for in this Lease. If all or any
portion of a Letter of Credit is drawn against by Landlord and all or any
portion of the proceeds are applied to cure a Tenant default, Tenant shall,
within two (2) business days after demand by Landlord, cause the Issuer to issue
Landlord, at Tenant’s expense, a replacement or supplementary Letter of Credit
in substantially the form attached hereto as Exhibit “F” such that at all times
during the Term, Landlord shall have the ability to draw on one or more Letters
of Credit totaling, in the aggregate, the amount required pursuant to this
Lease.
 
(f) Transfer of Letter of Credit
 
In the event of a transfer of Landlord’s interest in the Premises or Building,
Landlord and its transferees shall have the right, and the Letter of Credit
shall expressly so provide, without any requirement of consent of Tenant or the
Issuer, to transfer the Letter of Credit to its transferee (and its
transferee(s) may successively so transfer the Letter of Credit) and thereupon
shall, without any further agreement between the parties, be released by Tenant
from all liability therefor, and it is agreed that the provisions hereof shall
apply to every transfer or assignment of the Letter of Credit to a new Landlord.
In the event of any such transfer, Tenant shall pay any costs and fees charged
or imposed by the Issuer. It is the intention of the parties that each and every
successor and assign of both Landlord and Tenant be bound by and subject to the
terms and provisions of this Article. Furthermore, Landlord may, at any time and
without notice to Tenant and without first obtaining Tenant’s consent thereto,
assign all or any portion of its interest in and to the Letter of Credit to
another party, person or entity (by way of example only and not limitation, an
assignment for security purposes or otherwise to any lender of Landlord),
regardless of whether or not such assignment is separate from or as a part of
the assignment by Landlord of its rights and interests in and to this Lease.

(g) Miscellaneous
 
Tenant hereby acknowledges and agrees that Landlord is entering into this Lease
in material reliance upon the ability of Landlord to draw upon the Letter of
Credit under the circumstances described hereinabove. Tenant further
acknowledges and agrees that if Landlord cannot draw upon the Letter of Credit
within the times and in the manner as anticipated by Landlord herein, Landlord
shall suffer irreparable damage, harm and injury. From time to time during the
Term of this Lease it is anticipated by the parties that the Letter of Credit
will need to be amended, modified and, possibly reissued. Landlord and Tenant
hereby covenant and agree to cooperate with one another to promptly effectuate
any such amendments, modifications and new issuances, including without
limitation, executing and submitting to the Issuer any and all documents or
instruments as may be reasonably required to effectuate same. Each and every
time during the Term of this Lease there is a change in the identity or address
of the parties, including without limitation, any change in the identity of
Landlord due to the sale, transfer or other conveyance by Landlord of its rights
and interests in, to and under this Lease to any other party, person or entity,
the Letter of Credit shall immediately be amended or reissued to reflect such
changes and the parties hereby agree to execute and submit to the Issuer such
further applications, documents and instruments as may be necessary to
effectuate same.

ARTICLE 12
 

 
EMINENT DOMAIN
 
12.1 Definition
 
If there is any taking or condemnation of or transfer in lieu thereof for a
public or quasi-public use of all or any part of the Property or the Premises or
any interest therein because of the exercise or settlement due to threatened
exercise of the power of eminent domain or inverse
 

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condemnation, whether by condemnation proceedings or otherwise (all of the
foregoing being hereinafter referred to as “taking”) before or during the Term
hereof, the rights and obligations of the parties with respect to such taking
shall be as provided in this Article 12.
 
12.2 Total Taking
 
If there is a taking of all of the Premises, this Lease shall terminate as of
the date of such taking. All Minimum Monthly Rent and other amounts due under
this Lease shall be paid by Tenant to the date of such termination.
 
12.3 Partial Taking of Premises
 
If any part of the Premises shall be taken, and a part thereof remains which is
reasonably susceptible of occupation hereunder for the use permitted herein,
this Lease shall, as to the part so taken, terminate as of the date title shall
vest in the condemnor or transferee, and the Minimum Monthly Rent payable
hereunder shall be reduced by the proportion which the floor area taken from the
Premises bears to the total Floor Area of the Premises immediately before the
taking; but in such event Landlord shall have the option to terminate this Lease
as of the date when title to the part so condemned vests in the condemnor or
transferee. If 25% or more of the Premises is affected by a Taking, Tenant shall
have the right to terminate this Lease. All Minimum Monthly Rent and other
amounts due under this Lease shall be paid by Tenant to the date of any such
termination.
 
12.4 Common Area Taking
 
If so much of the Common Area is taken that in the commercially reasonable
judgment of Landlord the Property will be rendered unsuitable for the continued
use thereof for the purposes for which it was intended, Landlord may elect to
terminate this Lease by giving Tenant written notice of such election within
sixty (60) days after the date that title to the portion so taken vests in the
condemnor or transferee. If Landlord fails to give such notice, this Lease shall
remain in full force and effect. If any part of the Property is taken, but no
part of the Premises is taken, and Landlord does not elect to terminate this
Lease, the rent payable hereunder shall not be reduced, nor shall Tenant be
entitled to any part of the award made therefor. In the event of termination,
all Minimum Monthly Rent and other amounts due under this Lease shall be paid by
Tenant to the date of such termination.
 
12.5 Repair and Restoration
 
If this Lease is not terminated as provided in this Article 12, Landlord shall,
at its sole expense, restore with due diligence the remainder of the
improvements occupied by Tenant so far as is practicable to a complete unit of
like quality, character, and condition as that which existed immediately prior
to the taking, provided that the scope of the work shall not exceed the scope of
the work to be done by Landlord originally in construction of the Premises, and
further provided that Landlord shall not be obligated to expend an amount
greater than that which was awarded to Landlord for such taking. Tenant, at its
sole cost and expense, shall restore its furniture, fixtures and other allowed
leasehold improvements to their condition immediately preceding such taking.
 
12.6 Award
 
In the event of any taking, Landlord shall be entitled to the entire award of
compensation or settlement in such proceedings, whether for a total or partial
taking or for diminution in the value of the leasehold or for the fee. Any such
amounts shall belong to and be the property of Landlord. Without in any way
diminishing the rights of Landlord under the preceding sentence, Tenant shall be
entitled to recover from the condemnor such compensation as may be separately
awarded by the condemnor to Tenant or recoverable from the condemnor by Tenant
in its own right for the taking of trade fixtures and equipment owned by Tenant
(meaning personal property, whether or not attached to real property, which may
be removed without injury to the Premises) and for the expense of removing and
relocating them, and for loss of goodwill, but only to the extent that the
compensation awarded to Tenant shall be in addition to and shall not diminish
the compensation awarded to Landlord as provided above.
 
12.7 Waiver
 
Tenant hereby waives any statutory and common law rights of termination which
may arise by reason of any partial taking of the Premises under the power of
eminent domain.
 

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Article 13
 

 
INDEMNITY; WAIVER
 
13.1 Indemnification and Waivers
 
(a) Indemnity
 
To the fullest extent permitted by law, and commencing on the first day Tenant
or any of its employees, agents, or contractors first enters onto the Property
for any reason relating to this Lease or the Premises, Tenant shall, at Tenant’s
sole cost and expense, Indemnify Landlord Parties against all Claims arising
from (i) any Personal Injury, Bodily Injury or Property Damage whatsoever
occurring in or at the Premises; (ii) any Bodily Injury to an employee of a
Tenant Party arising out of and in the course of employment of the employee and
occurring anywhere in the Property; (iii) the use or occupancy, or manner of use
or occupancy, or conduct or management of the Premises or of any business
therein; (iv) subject to the waiver of subrogation provisions of this Lease, any
act, error, omission or negligence of any of the Tenant Parties in, on or about
the Premises or the Property; (v) the conduct of Tenant’s business; (vi) any
alterations, activities, work or things done, omitted, permitted or allowed by
Tenant Parties in, at or about the Premises or Property, including the violation
of or failure to comply with, or the alleged violation of or alleged failure to
comply with any applicable laws, statutes, ordinances, standards, rules,
regulations, orders, or judgments in existence on the date of the Lease or
enacted, promulgated or issued after the date of this Lease including Hazardous
Materials Laws (defined below); (vii) any breach or default by Tenant in the
full and prompt payment of any amount due under this Lease, any breach,
violation or nonperformance of any term, condition, covenant or other obligation
of Tenant under this Lease, or any misrepresentation made by Tenant or any
guarantor of Tenant’s obligations in connection with this Lease; (viii) all
damages sustained by Landlord as a result of any holdover by Tenant or any
Tenant Party in the Premises including, but not limited to, any claims by
another tenant resulting from a delay by Landlord in delivering possession of
the Premises to such tenant; (ix) any liens or encumbrances arising out of any
work performed or materials furnished by or for Tenant; (x) commissions or other
compensation or charges claimed by any real estate broker or agent with respect
to this Lease by, through or, under Tenant or, (xi) any matter enumerated in
Paragraph 13(b) below.
 
To the fullest extent permitted by law, and commencing on the first day Tenant
or any of its employees, agents, or contractors first enters onto the Property
for any reason relating to this Lease or the Premises, Landlord shall Indemnify
the Tenant Parties against all Claims arising from (i) any Personal Injury,
Bodily Injury or Property Damage occurring in the Common Areas and caused by the
gross negligence or intentional misconduct of any of the Landlord Parties;
(ii) any Bodily Injury to an employee of a Landlord Party arising out of and in
the course of employment of the employee and occurring anywhere in the Property,
except to the extent caused by the negligence or intentional misconduct of any
of the Tenant Parties; or (iii) subject to the waiver of subrogation provisions
of this Lease, the gross negligence or intentional misconduct of any of the
Landlord Parties.
 
(b) Waivers
 
To the fullest extent permitted by law, Tenant, on behalf of all Tenant Parties,
Waives all Claims against Landlord Parties arising from the following: (i) any
Personal Injury, Bodily Injury, or Property Damage occurring in or at the
Premises; (ii) any loss of or damage to property of a Tenant Party located in
the Premises or other part of the Property by theft or otherwise; (iii) any
Personal Injury, Bodily Injury, or Property Damage to any Tenant Party caused by
other tenants of the Property, parties not occupying space in the Property,
occupants of property adjacent to the Property, or the public or by the
construction of any private, public, or quasi-public work occurring either in
the Premises or elsewhere in the Property; (iv) any interruption or stoppage of
any utility service or for any damage to persons or property resulting from such
stoppage; (v) business interruption or loss of use of the Premises suffered by
Tenant; (vi) any latent defect in construction of the Building; (vii) damages or
injuries or interference with Tenant’s business, loss of occupancy or quiet
enjoyment and any other loss resulting
 

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from the exercise by Landlord of any right or the performance by Landlord of
Landlord’s maintenance or other obligations under this Lease, or (viii) any
Bodily Injury to an employee of a Tenant Party arising out of and in the course
of employment of the employee and occurring anywhere in the Property.
 
(c) Definitions
 
For purposes of this Article 13: (i) the term “Tenant Parties” means Tenant, and
Tenant’s officers, members, partners, agents, employees, sublessees, licensees,
guests, customers, invitees and independent contractors, and all persons and
entities claiming through any of these persons or entities; (ii) the term
“Landlord Parties” means Landlord and the members, partners, venturers, trustees
and ancillary trustees of Landlord and the respective officers, directors,
shareholders, members, parents, subsidiaries and any other affiliated entities,
personal representatives, executors, heirs, assigns, licensees, invitees,
beneficiaries, agents, servants, employees and independent contractors of these
persons or entities; (iii) the term “Indemnify” means indemnify, defend (with
counsel reasonably acceptable to Landlord) and hold free and harmless for, from
and against; (iv) the term “Claims” means all liabilities, claims, damages
(including consequential damages), losses, penalties, litigation, demands,
causes of action (whether in tort or contract, in law or at equity or
otherwise), suits, proceedings, judgments, disbursements, charges, assessments,
and expenses (including attorneys’ and experts’ fees and expenses incurred in
investigating, defending, or prosecuting any litigation, claim, or proceeding);
(v) the term “Waives” means that the Tenant Parties waive and knowingly and
voluntarily assume the risk of; and (vi) the terms “Bodily Injury”, “Personal
Injury” and “Property Damage” will have the same meanings as in the form of
commercial general insurance policy issued by Insurance Services Office, Inc.
most recently prior to the date of the injury or loss in question.
 
(d) Scope of Indemnities and Waivers
 
Except as provided in the following sentence, the indemnities and waivers
contained in this Article 13 shall apply regardless of the active or passive
negligence or sole, joint, concurrent, or comparative negligence of any of the
Landlord Parties, and regardless of whether liability without fault or strict
liability is imposed or sought to be imposed on any of the Landlord Parties. The
indemnities and waivers contained in this Article 13 shall not apply to the
extent of the percentage of liability that a final judgment of a court of
competent jurisdiction establishes under the comparative negligence principles
of the state in which the Premises are situated, that a Claim against a Landlord
Party was proximately caused by the willful misconduct or gross negligence of
that Landlord Party, provided, however, that in such event the indemnity or
waiver will remain valid for all other Landlord Parties.
 
(e) Duty to Defend
 
Each party’s duty to defend Landlord Parties or Tenant Parties (as applicable)
is separate and independent of such party’s duty to Indemnify Landlord Parties
or Tenant Parties (as applicable). Each party’s duty to defend includes Claims
for which Landlord Parties or Tenant Parties (as applicable) may be liable
without fault or may be strictly liable. Each party’s duty to defend applies
regardless of whether issues of negligence, liability, fault, default or other
obligation on the part of Tenant Parties or Landlord Parties (as applicable)
have been determined. Each party’s duty to defend applies immediately,
regardless of whether Landlord Parties or Tenant Parties (as applicable) have
paid any sums or incurred any detriment arising out of or relating, directly or
indirectly, to any Claims. It is the express intention of Landlord and Tenant
that Landlord Parties and Tenant Parties will be entitled to obtain summary
adjudication regarding the other party’s duty to defend Landlord Parties or
Tenant Parties (as applicable) at any stage of any Claim within the scope of
this Article 13.
 
(f) Obligations Independent of Insurance
 
The indemnification provided in this Article 13 shall not be construed or
interpreted as in any way restricting, limiting or modifying each party’s
insurance or other obligations under this Lease, and the provisions of this
Article 13 are independent of either party’s insurance and other obligations.
Each party’s compliance with the insurance requirements and other obligations
under this Lease does not in any way restrict, limit or modify such party’s
indemnification obligations under this Lease.
 

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(g) Waiver of Immunity
 
EACH OF LANDLORD AND TENANT HEREBY WAIVES ITS IMMUNITY WITH RESPECT TO THE
PARTIES INDEMNIFIED UNDER THE PRECEDING PARAGRAPHS UNDER THE APPLICABLE STATE
INDUSTRIAL INSURANCE ACTS AND EXPRESSLY AGREES TO ASSUME POTENTIAL LIABILITY FOR
ACTIONS BROUGHT AGAINST AN INDEMNIFIED PARTY BY THE INDEMNIFYING PARTY’S
EMPLOYEES. THIS WAIVER HAS BEEN SPECIFICALLY NEGOTIATED BY THE PARTIES TO THIS
LEASE AND EACH PARTY HAS HAD THE OPPORTUNITY TO, AND HAS BEEN ENCOURAGED TO,
CONSULT WITH INDEPENDENT COUNSEL REGARDING THIS WAIVER.
 
(h) Survival
 
The provisions of this Article 13 will survive the expiration or earlier
termination of this Lease until all Claims against Landlord Parties or Tenant
Parties (as applicable) involving any of the indemnified or waived matters are
fully and finally barred by the applicable statutes of limitations.
 
ARTICLE 14
 

 
OPERATION OF BUSINESS
 
Tenant shall (a) keep the Premises and exterior and interior portions of
windows, doors and all other glass or plate glass fixtures in a neat, clean,
sanitary and safe condition; (b) refrain from burning any papers or refuse of
any kind in the Property; (c) store in the area designated by Landlord all trash
and garbage in neat and clean containers so as not to be visible to members of
the public and cooperate in the employment of a trash removal contractor
designated by Landlord; (d) observe and promptly comply with all governmental
requirements and insurance requirements affecting the Premises or any part of
the Common Area which is under Tenant’s exclusive control and promulgated during
the Term of this Lease; (e) not use or suffer or permit the Premises or any part
thereof to be used for any use other than the Permitted Use set forth in the
Basic Lease Provisions or in any manner that will constitute a nuisance or
unreasonable annoyance to the public, to other occupants of the Property or to
Landlord, or that will injure the reputation of the Property, or for any extra
hazardous purpose or in any manner that will impair the structural strength of
the Building; (f) not add, remove, or change any locks on any doors to or in the
Premises, or add, remove, or change any plumbing or wiring therein without
Landlord’s consent; and (g) not cause or permit any waste to be committed on the
Premises or the Property.
 
ARTICLE 15
 

 
SIGNS AND ADVERTISING
 
15.1 General
 
Tenant may at its own expense erect and maintain upon the interior areas of the
Premises all signs and advertising matter customary and appropriate in the
conduct of Tenant’s business Landlord’s; provided, however that any signage
visible from the Common Areas or outside of the Building or Premises shall be
subject to Landlord’s approval, which approval may be withheld in Landlord’s
sole discretion. Tenant at its sole expense and with Landlord prior approval,
which shall not be unreasonably withheld shall have the right to install one (1)
sign in the building lobby area. Landlord shall have the right to remove any
signs or advertising matter which violates Article 14 or this Article 15. The
Tenant shall not affix or maintain upon the glass panes and supports of windows
and doors, or within twelve inches (12”) of the show windows and doors, any
signs, advertising placards, names, insignia, trademarks, descriptive material
or any other such like item or items except such as shall have first received
the written approval of the Landlord as to size, type, color, location, copy,
nature and display qualities. All signs, decorations and advertising media shall
conform in all respects to the sign criteria established by Landlord for the
Property from time to time, and shall be subject to the prior written approval
of Landlord as to construction, method of attachment, size, shape, height,
lighting, color and general appearance. Without limiting the generality of the
foregoing, neon signage shall not be permitted
 

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without Landlord’s express prior approval. All signs and other advertising media
shall comply with all applicable governmental requirements, including without
limitation the requirements and policies of any applicable historical
preservation authority or entity with jurisdiction over the Building. Except for
signs which comply with the terms of this Article, Tenant shall not erect,
place, paint, or maintain in or on the Premises, any sign, exterior advertising
medium, or any other object of any kind whatsoever, whether an advertising
device or not, visible or audible from outside the Premises. Tenant shall not
change the color, size, location, composition, wording or design of any sign or
advertisement on the Premises that may have been theretofore approved by
Landlord, without the reasonable prior written approval of Landlord and the
applicable governmental authorities. Tenant shall at its own expense maintain
and keep in good repair all installations, signs, and advertising devices which
it is permitted or required by Landlord to maintain.
 
15.2 Directory Board
 
Landlord shall, throughout the Term of this Lease, maintain a directory board in
the main lobby of the Building that shall list Tenant. The cost of said
designation shall be at Landlord’s expense and shall be limited to Tenant’s
corporate or entity name only, and shall not include additional individual
designations.
 
15.3 Elevator Lobby; Suite Entry Signage
 
Landlord shall provide Building-standard elevator lobby signage on the floor on
which the Premises are located. Tenant shall be required to provide at its sole
expense suite entry signage, subject to Landlord’s prior review, not to be
unreasonably withheld, and Landlord shall install same at Landlord’s sole cost.
 
ARTICLE 16
 

 
LIENS
 
Tenant will not permit any mechanic's liens or other liens to be placed upon the
Premises, the Building, or the Property and nothing in this Lease shall be
deemed or construed in any way as constituting the consent or request of
Landlord, express or implied, by inference or otherwise, to any person for the
performance of any labor or the furnishing of any materials to the Premises, the
Building, or the Property or any part thereof, nor as giving Tenant any right,
power, or authority to contract for or permit the rendering of any services or
the furnishing of any materials that would give rise to any mechanic's or other
liens against the Premises, the Building, or the Property. In the event any such
lien is attached to the Premises, the Building, or the Property, then, in
addition to any other right or remedy of Landlord, Landlord may, but shall not
be obligated to, discharge the same. Any amount paid by Landlord for any of the
aforesaid purposes including, but not limited to, reasonable attorneys’ fees,
shall be paid by Tenant to Landlord promptly on demand as Additional Rent.
Tenant shall within ten (10) days of receiving such notice of lien or claim
(a) have such lien or claim released or (b) deliver to Landlord a bond in form,
content, amount and issued by surety, satisfactory to Landlord, indemnifying,
protecting, defending and holding harmless Landlord and the Property against all
costs and liabilities resulting from such lien or claim and the foreclosure or
attempted foreclosure thereof.
 
ARTICLE 17
 

 
RIGHT OF ENTRY
 
Landlord and its authorized agents and representatives shall upon 24 hours prior
notice (except for emergencies) be entitled to enter the Premises at all
reasonable times to inspect them, to make the repairs which Landlord is
obligated to make under this Lease, to show them to prospective tenants,
purchasers or lenders, to cure a default of Tenant, to post any notice provided
by law that relieves a landlord from responsibility for the acts of a tenant, to
comply with any governmental requirements or
 

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insurance requirements, to post ordinary signs advertising the Premises for sale
or for lease, to install utilities, lines, chases, and conduit serving other
portions of the Property through the Premises so long as the RSF of the Premises
is not thereby materially reduced, and for any other lawful purpose relating to
Landlord’s rights and obligations under this Lease. Nothing in the preceding
sentence shall imply or impose a duty to make repairs which Tenant has agreed to
make hereunder. Landlord may erect scaffolding and other necessary structures
where reasonably required by the character of the work to be performed, provided
that the entrance to the Premises shall not be unreasonably blocked. Landlord
shall have the right to use any means which Landlord may deem proper to enter
the Premises in an emergency. Landlord’s entry to the Premises shall not under
any circumstances be construed to be a forcible or unlawful entry into the
Premises or an eviction of Tenant from the Premises.
 
ARTICLE 18
 

 
DELAYING CAUSES
 
If either party is delayed in the performance of any covenant of this Lease
because of any of the following causes (referred to elsewhere in this Lease as a
“delaying cause”): acts of the other party, action of the elements, war, riot,
labor disputes, inability to procure or general shortage of labor or material in
the normal channels of trade, delay in transportation, delay in inspections, or
any other cause beyond the reasonable control of the party so obligated, whether
similar or dissimilar to the foregoing, financial inability excepted, then, such
performance shall be excused for the period of the delay; and the period for
such performance shall be extended for a period equivalent to the period of such
delay, except that the foregoing shall in no way affect Tenant’s obligation to
pay rent or any other amount payable hereunder, or the length of the Term of
this Lease.
 
ARTICLE 19
 

 
ASSIGNMENT AND SUBLEASE
 
19.1 Consent Required
 
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not assign this Lease or any interest herein or any right or privilege
appurtenant hereto or sublet, license, grant any concessions, or otherwise give
permission to anyone other than Tenant to use or occupy all or any part of the
Premises (hereinafter sometimes referred to as a “Transfer”), without the prior
written consent of Landlord, which consent Landlord shall not unreasonably
withhold. Without limiting the generality of the foregoing, it shall be deemed
reasonable for Landlord to withhold such consent if (i)  there if then in
existence an Event of Default with respect to any obligation of Tenant under the
Lease, or (ii) the proposed Transferee or an affiliate thereof is an existing
tenant in the Property or is or has been, within the six-month period prior to
the date Tenant requests Landlord’s consent, in discussions with Landlord
regarding space at the Property. Any actual or attempted Transfer without the
Landlord’s prior written consent or otherwise in violation of the terms of this
Lease shall, at Landlord’s election, be void and shall confer no rights upon any
third person, and shall be a non-curable default under this Lease which shall
entitle Landlord to terminate this Lease upon ten (10) days’ written notice to
Tenant at any time after such actual or attempted Transfer without regard to
Landlord’s prior knowledge thereof. The acceptance of rent by Landlord from any
person or entity shall not be deemed to be a waiver by Landlord of any provision
of this Lease or a consent to any Transfer. A consent by Landlord to one or more
Transfers shall not be deemed to be a consent to any subsequent Transfer. In
addition, any option to extend or renew the Term hereof, to terminate this Lease
early, or to expand or contract the size of the Premises shall be personal to
Tenant, and shall not be Transferred without the prior written consent of
Landlord in accordance with the terms of this Article 19.
 

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19.2 Request For Consent
 
. If Tenant shall desire Landlord’s consent to any Transfer, Tenant shall notify
Landlord in writing, which notice shall include: (a) the proposed effective date
(which shall be not less than thirty (30) days nor more than one hundred eighty
(180) days after Tenant’s notice); (b) the portion of the Premises subject to
the Transfer; (c) all of the terms of the proposed Transfer and the
consideration therefor; (d) the name and address of the proposed transferee;
(e) a copy of the proposed sublease, instrument of assignment and all other
documentation pertaining to the proposed Transfer; (f) current financial
statements of the proposed transferee certified by an officer, partner or owner
thereof; (g) any information reasonably requested by Landlord to enable Landlord
to determine the financial responsibility, character, and reputation of the
proposed transferee and the nature of such transferee’s business and the
proposed use the Premises; and (h) such other information as Landlord may
reasonably request, together with the nonrefundable sum of $750.00 which shall
be applied towards Landlord’s review and processing expenses. Such amount shall
be subject to change without prior notice from Landlord.
 
19.3 Recapture
 
. Upon receipt of Tenant’s request for consent to any Transfer, Landlord may
elect, by written notice given to Tenant within thirty (30) days after receipt
of the information required pursuant to Paragraph 19.2 above, to recapture the
affected space by terminating this Lease as to that portion of the Premises
covered by the proposed sublease or assignment, effective upon a date specified
by Landlord, which date shall not be earlier than thirty (30) days nor later
than sixty (60) days after Tenant’s request for consent, with a proportionate
reduction of all rights and obligations of Tenant hereunder that are based on
the area of the Premises. In such case, Landlord shall be responsible for all
demising costs. However, if Landlord exercises its recapture right set forth
herein, Tenant may void such recapture election by rescinding its request for
Landlord’s consent by written notice of such rescission given to Landlord within
fifteen (15) days after receipt of Landlord’s notice of recapture.
 
19.4 General Conditions
 
. If Landlord does not elect to recapture the affected Premises or deny its
consent to a Transfer, the granting of such consent shall be subject to the
following conditions, which the parties hereby agree are reasonable:
 
(a) Payment of Transfer Premium
 
. Tenant shall pay to Landlord half (1/2) of any Transfer Premium derived by
Tenant from such Transfer. “Transfer Premium” shall mean all rent and any other
consideration payable by such transferee in excess of the Minimum Monthly Rent
payable by Tenant under this Lease (on a per square foot basis, if less than all
of the Premises is Transferred), after deducting therefrom any brokerage
commissions in connection with the Transfer actually paid by Tenant to an
unaffiliated broker, reasonable marketing costs, Landlord’s review fees, and
tenant improvement allowances given to the Transferee by Tenant in connection
with the Transfer. If any part of the consideration for such Transfer shall be
payable other than in cash, Landlord’s share of such non-cash consideration
shall be in such form as is reasonably satisfactory to Landlord. The Transfer
Premium payable hereunder shall be due within ten (10) days after Tenant
receives such payments.
 
(b) Continued Liability of Tenant
 
. Tenant shall remain primarily liable on its covenants hereunder unless
released in writing by Landlord. In the event of any assignment or sublease
which is consented to by Landlord, the transferee shall agree in writing to
perform and be bound by all of the covenants of this Lease required to be
performed by Tenant.
 
19.5 Transfer to a Subsidiary
 
. The sale, assignment, transfer or disposition, whether or not for value, by
operation of law, gift, will, or intestacy, of (a) fifty percent (50%) or more
of the issued and outstanding stock of Tenant if Tenant is a corporation, or
(b) the whole or a partial interest of any general partner, joint venturer,
associate or co-tenant, if Tenant is a partnership, joint venture, association
or co-tenancy, shall be deemed a Transfer and shall be subject to the provisions
of this Article 19; provided that so long as the stock of Tenant is traded on a
nationally recognized stock exchange or over the counter
 

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market, the sale or other transfer of said stock shall neither be deemed a
Transfer hereunder nor require Landlord's consent or approval. Notwithstanding
the foregoing, Landlord hereby acknowledges and consents to Tenant’s right,
without further approval from Landlord but only after at least sixty (60) days’
prior written notice to Landlord, to sublease the Premises or assign its
interest in this Lease (i) to a corporation that directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with Tenant; (ii) in the event of the merger or consolidation of Tenant
with another corporation; or (iii) in connection with the sale of the assets
used in connection with the business operated by Tenant at the Building
(collectively, the “Permitted Transfers”). No Permitted Transfer shall relieve
Tenant of its liability under this Lease and Tenant shall remain liable to
Landlord for the payment of all Minimum Monthly Rent, Operating Expenses and
Additional Rent and the performance of all covenants and conditions of this
Lease applicable to Tenant.
 
19.6 Transfer Pursuant to Bankruptcy Code
 
. Anything to the contrary notwithstanding, if this Lease is assigned (or all or
a portion of the Premises is sublet) to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. 101 et. seq. (the “Bankruptcy
Code”), any and all monies or other consideration payable or otherwise to be
delivered in connection with such assignment or subletting shall be paid or
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of its estate within the meaning
of the Bankruptcy Code. Any and all monies or other consideration constituting
Landlord’s property under the preceding sentence not paid or delivered to
Landlord shall be held in trust for the benefit of Landlord and be promptly paid
or delivered to Landlord. Any assignee pursuant to the Bankruptcy Code shall be
deemed to have assumed all of Tenant’s obligations under this Lease. Any such
assignee shall on demand by Landlord execute and deliver to Landlord a written
instrument confirming such assumption.
 
ARTICLE 20
 

 
NOTICES
 
All notices, requests and demands to be made hereunder shall be in writing at
the address set forth in the Basic Lease Provisions, as applicable, by any of
the following means: (a) personal service (including service by recognized
overnight delivery/courier service, such as DHL or FEDEX); or (b) registered or
certified, first class mail, return receipt requested. Such addresses may be
changed by notice to the other party given in the same manner provided above.
Any notice, request, or demand sent pursuant to clause (a) of this Article 20
shall be deemed received upon such personal delivery or service (or the date of
refusal, if personal service or delivery is refused), and if sent pursuant to
clause (b), shall be deemed received three (3) days following deposit in the
mails.
 
ARTICLE 21
 

 
SURRENDER OF POSSESSION
 
21.1 Surrender
 
. At the expiration of the tenancy created hereunder, whether by lapse of time
or otherwise, Tenant shall surrender the Premises broom clean and in good
condition and repair, and shall remove all of its personal property, furniture,
fixtures, and equipment, any Tenant Changes which Tenant is required elsewhere
in this Lease to remove, and all cabling and wiring installed by or for Tenant.
Tenant’s obligations shall include the repair of any damage occasioned by the
installation, maintenance or removal of Tenant’s personal property, furniture,
fixtures, equipment, cabling and wiring, as well as any Tenant’s Work, Tenant’s
alterations or Tenant’s Changes that Tenant is hereby required to remove, and
the removal of any generators or storage tanks installed by or for Tenant
(whether or not the installation was consented to by Landlord), and the removal,
replacement, or remediation of any soil, material or ground water contaminated
by Tenant’s Permittees, all as may then be required by applicable Laws.
 

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21.2 Holding Over
 
. Tenant shall have the right, by written notice given to Landlord given not
later thirty (30) days prior to the scheduled expiration of the then-effective
Term (the “Approved Holdover Notice”), time being of the essence in connection
therewith, to hold over at the Premises on a month-to-month basis for up to a
total of three (3) months (the “Approved Holdover Period”). Such occupancy shall
be subject to all the terms and provisions of this Lease applicable during the
final year of the then-effective Term, including as to Minimum Monthly Rent and
Additional Rent. After delivery of the Approved Holdover Notice, Tenant shall be
deemed to have elected to remain at the Premises for the entire Approved
Holdover Period, provided that Tenant may elect to terminate such holdover,
effective at the end of any calendar month during the Approved Holdover Period,
upon at least thirty (30) days’ prior written notice to Landlord.
Notwithstanding anything to the contrary elsewhere herein, Tenant shall have no
right to hold over at the Premises following termination of this Lease pursuant
to Articles 10, 12, 25, or 26, and Tenant’s rights under this paragraph shall
not advance, delay, or otherwise affect the deadline by which Tenant must
exercise its Extension Term Option. If Tenant fails to surrender the Premises
upon the expiration or earlier termination of this Lease (or upon expiration of
the Approved Holdover Period, if Tenant has duly elected same pursuant to this
paragraph), occupancy of the Premises thereafter shall be that of a tenancy at
sufferance, subject to all the terms and provisions of this Lease, and Tenant
shall pay an amount (on a per month basis without reduction for partial months
during the holdover) equal to 125% of the Minimum Annual Rent due for the period
immediately preceding the holdover, plus 100% of all Additional Rent. Except
with respect to the Approved Holdover Period, (i) no holdover by Tenant or
payment by Tenant after the expiration or early termination of this Lease shall
be construed to extend the Term or prevent Landlord from immediate recovery of
possession of the Premises by summary proceedings or otherwise, and (ii) nothing
herein shall be construed as consent to such holding over.
 
ARTICLE 22
 

 
QUIET ENJOYMENT
 
Subject to the provisions of this Lease and conditioned upon performance of all
of the provisions to be performed by Tenant hereunder, Landlord shall secure to
Tenant during the Lease Term the quiet and peaceful possession of the Premises
and all rights and privileges appertaining thereto, free from hindrance or
molestation by Landlord and those claiming by, through or under Landlord.
 
ARTICLE 23
 

 
SUBORDINATION
 
Tenant agrees, within ten (10) days following the request of Landlord, to
execute such documents or instruments as may be requested by Landlord or its
lender(s) to subordinate this Lease to any mortgage or deed of trust held by any
lender now or hereafter in force against the Premise or the Property, provided
that such mortgagees or beneficiaries agree in writing not to disturb Tenant’s
possession of the Premises in the event of foreclosure if Tenant is not in
default. The failure of Tenant to so timely execute any such instrument or other
document shall constitute a default hereunder.
 
ARTICLE 24
 

 
ESTOPPEL CERTIFICATE; FINANCIAL STATEMENTS
 
Tenant shall, at any time and from time to time within ten (10) days after
written request therefor by Landlord, without charge, deliver a certificate to
Landlord or to any person or entity designated by Landlord, certifying the date
the Lease Term commenced, the date the rent commenced and is paid through, the
amount of rent and other charges due under the Lease, the expiration date of the
Lease Term,
 

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that this Lease is then in full force and effect, setting forth the amount and
nature of modifications, defenses, or offsets, if any, claimed by Tenant, and
any other factual matter concerning the Lease, the Tenant, or the Premises
requested by Landlord or such person or entity.
 
Tenant acknowledges that it has provided Landlord with certain financial
statement(s) as a material inducement to Landlord’s agreement to lease the
Premises to Tenant, and that Landlord has relied on the accuracy of such
financial statement(s) in entering into this Lease. Tenant represents and
warrants that the information contained in such financial statement(s) is true,
complete and correct in all material respects. Within ten (10) days from request
by Landlord, Tenant will make available to Landlord or to any prospective
purchaser or lender of the Property, audited financial statements of Tenant and
any guarantor, provided, if Tenant is not a publicly traded entity, that
Landlord or any such prospective purchaser or lender agrees to maintain such
statements and information in confidence, and provided further that if audited
financial statements of Tenant are not available at the time of such request,
Tenant may deliver unaudited statements prepared in accordance with generally
accepted accounting principles consistently applied and certified to be true and
correct by Tenant’s chief financial officer. Notwithstanding the foregoing, so
long as the named Tenant herein is a publicly traded corporation and its
financial information is readily available to the public, Tenant will not be
required to deliver additional financial statements to Landlord.
 
ARTICLE 25
 

 
DEFAULT
 
25.1 Default
 
. The occurrence of any or more of the following events shall constitute a
material breach and default of this Lease (each, an “Event of Default”):
 
(a) Any failure by Tenant to pay Minimum Monthly Rent, Operating Expenses,
Additional Rent or any other charge when due where such failure continues for
more than five (5) days after written notice to Tenant of such delinquency
(which notice may be concurrent with any notice required under RCW 59.12.030);
provided, however, after the second (2nd) late payment in any twelve (12) month
period, notice from Landlord shall no longer be necessary and the failure to pay
rent when due shall be an Event of Default; or
 
(b) Any failure by Tenant to observe or perform any other provision, covenant or
condition of this Lease to be observed or performed by Tenant not provided for
in subparagraph (a) above and subparagraph (d) below where such failure
continues for thirty (30) days after written notice thereof by Landlord to
Tenant, provided that if the nature of such breach is such that although
curable, the breach cannot reasonably be cured within a thirty (30) day period,
an Event of Default shall not exist if Tenant shall commence to cure such breach
and thereafter rectifies and cures such breach with due diligence; or
 
(c) [Reserved]; or
 
(d) A general assignment by Tenant for the benefit of creditors, or the filing
by or against Tenant of any proceeding under any insolvency or bankruptcy law,
or the appointment of a trustee or receiver to take possession of all or
substantially all of Tenant’s assets located upon the Premises or of Tenant’s
interest in this Lease; or
 
(e) [Reserved]; or
 
(f) [Reserved]; or
 

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(g) [Reserved]; or
 
(h) The occurrence of an Event of Default as defined in any other provision of
this Lease.
 
25.2 Remedies
 
.
 
(a) Reentry and Termination
 
. Upon and during the continuance of an Event of Default, Landlord, in addition
to any other remedies available to Landlord at law or in equity, at Landlord’s
option, may without further notice or demand of any kind to Tenant or any other
person:
 
1. Declare the Lease Term ended and reenter the Premises and take possession
thereof and remove all persons therefrom, and Tenant shall have no further claim
to the Premises; or
 
2. Without declaring this Lease ended, reenter the Premises and occupy the whole
or any part thereof for and on account of Tenant and collect any unpaid Minimum
Monthly Rent, rent, Additional Rent, Operating Expenses and other charges, which
have become payable, or which may thereafter become payable; or
 
3. Even though Landlord may have reentered the Premises, thereafter elect to
terminate this Lease and all of the rights of Tenant in or to the Premises.
 
(b) Express Termination Required
 
. Should Landlord have reentered the Premises under the provisions of
Paragraph 25.2(a)(2) above, Landlord shall not be deemed to have terminated this
Lease, or the liability of Tenant to pay any Minimum Monthly Rent, Operating
Expenses, Additional Rent or other charges thereafter accruing, or to have
terminated Tenant’s liability for damages under any of the provisions of this
Lease, by any such reentry or by any action, in unlawful detainer or otherwise,
to obtain possession of the Premises, unless Landlord shall have notified Tenant
in writing that Landlord had elected to terminate this Lease. Tenant further
covenants that the service by Landlord of any notice pursuant to the unlawful
detainer statutes of the State where the Property is situated and the surrender
of possession pursuant to such notice shall not (unless Landlord elects to the
contrary at the time of or at any time subsequent to the serving of such notices
and such election is evidenced by a written notice to Tenant) be deemed to be a
termination of this Lease.
 
(c) Damages
 
. Should Landlord elect to terminate this Lease pursuant to the provisions of
Paragraphs 25.2(a)(1) or 25.2(a)(3) above, Landlord may recover from Tenant as
damages, the following:
 
1. The worth at the time of award of any unpaid Minimum Monthly Rent, Operating
Expenses, Additional Rent or other charges which had been earned at the time of
such termination; plus
 
2. The worth at the time of award of the amount by which the unpaid Minimum
Monthly Rent, Operating Expenses, Additional Rent or other charges which would
have been earned after termination until the time of award exceeds the amount of
such loss Tenant proves could have been reasonably avoided; plus
 
3. The worth at the time of award of the amount by which the unpaid Minimum
Monthly Rent, Operating Expenses, Additional Rent or other charges for the
balance of the Lease Term after the time of award exceeds the amount of such
loss that Tenant proves could be reasonably avoided; plus
 

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4. any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform Tenant’s obligations under
this Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to any costs or expenses incurred by
Landlord in (i) retaking possession of the Premises, including reasonable
attorneys’ fees, (ii) maintaining or preserving the Premises after the
occurrence of an Event of Default, (iii) preparing the Premises for reletting to
a new tenant, including repairs or alterations to the Premises for such
reletting, (iv) leasing commissions, and (v) any other costs necessary or
appropriate to relet the Premises; plus
 
5. At Landlord’s election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by the laws of the State where
the Property is situated.
 
(d) Alternative Damages
 
. Should Landlord elect to bring an action against Tenant in unlawful detainer
or for damages or both or otherwise (and Landlord may bring as many actions as
Landlord may elect to bring throughout the Lease Term), without terminating this
Lease, Landlord may recover from Tenant as damages the following:
 
1. The worth at the time of award of any unpaid Minimum Monthly Rent, Operating
Expenses, Additional Rent or other charges which had been earned at the time
Landlord recovered possession of the Premises; plus
 
2. The worth at the time of award of the amount by which the unpaid Minimum
Monthly Rent, Operating Expenses, Additional Rent or other charges which would
have been earned after the date Landlord recovered possession until the time of
award exceeds the amount of such loss Tenant proves could have been reasonably
avoided; plus
 
3. Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform Tenant’s obligations under
this Lease, including but not limited to, any costs or expenses incurred by
Landlord in (i) retaking possession of the Premises, including reasonable
attorneys’ fees, (ii) maintaining or preserving the Premises after the
occurrence of an Event of Default, (iii) preparing the Premises for reletting to
a new tenant, including repairs or alterations to the Premises for such
reletting, (iv) leasing commissions, and (v) any other costs necessary or
appropriate to relet the Premises; plus
 
4. At Landlord’s election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by the laws of the State where
the Property is situated.
 
(e) Definitions
 
. As used in Paragraphs 25.2(c)(1), 25.2(c)(2), and 25.2(d)(1) above, the “worth
at the time of award” is computed by allowing interest at the Interest Rate
(defined below). As used in Paragraphs 25.2(c)(3) and 25.2(d)(2) above, the
“worth at the time of award” is computed by discounting such amount at the
discount rate of the Federal Reserve Bank situated nearest to the location of
the Property at the time of award plus two (2) percentage points.
 
(f) Computation of Certain Sums
 
. For all purposes of this Article 25, Operating Expenses, Additional Rent and
other charges shall be computed on the basis of the average monthly amount
thereof accruing during the immediately preceding sixty (60) month period,
except that if it becomes necessary to compute such amounts before such a sixty
(60) month period has occurred then such amounts shall be computed on the basis
of the average monthly amounts accruing during such shorter period.
 
(g) Use of Fixtures
 
. Upon the occurrence of and during the continuation of any Event of Default,
Landlord may, at Landlord’s option, permit all of Tenant’s fixtures, furniture,
equipment, improvements,
 

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additions, alterations, and other personal property to remain on the Premises
and Landlord shall have the right to take the exclusive possession of same and
to use same, rent or charge free, until the Event of Default is cured or, at
Landlord’s option, at any time during the Lease Term, require Tenant to
forthwith remove same. In the event of any entry or taking possession of the
Premises, Landlord shall have the right, but not the obligation to remove all or
any part of the fixtures, furniture, equipment and other personal property
located in the Premises and may place the same in storage at a public warehouse
at the expense and risk of the owner or owners thereof.
 
(h) Cumulative Remedies
 
. The remedies given to Landlord in this Paragraph 25 shall be in addition and
supplemental to all other rights or remedies which Landlord may have at law, in
equity or by statute and the exercise of any one remedy shall not preclude the
subsequent or concurrent exercise of further or additional remedies.
 
(i) No Waiver
 
. The waiver by Landlord of any breach of any term, covenant or condition herein
contained in this Lease shall not be deemed to be a waiver of such term,
covenant or condition of any subsequent breach of the same or any other term,
covenant or condition of this Lease. The subsequent acceptance of Minimum
Monthly Rent, Operating Expenses, Additional Rent or other charges due hereunder
shall not be deemed to be a waiver of any preceding breach by Tenant of any
term, covenant or condition of this Lease, other than the failure of Tenant to
pay the particular amount so accepted regardless of Landlord’s knowledge of such
preceding breach at the time of acceptance of such amount. No covenant, term, or
condition of this Lease shall be deemed to have been waived by Landlord unless
such waiver shall be in writing and signed by Landlord.
 
25.3 Interest
 
. Any sum accruing to Landlord under the terms and provisions of this Lease
which shall not be paid when due shall bear interest at the interest rate
provided herein from the date the same becomes due and payable by the terms and
provisions of this Lease until paid, unless otherwise specifically provided in
this Lease. The interest rate which shall apply shall be the lesser of
(i) twelve percent (12%) per annum or (ii) the highest rate allowed by
applicable law (the “Interest Rate”).
 
ARTICLE 26
 

 
INSOLVENCY
 
26.1 Breach of Lease
 
. Subject to the applicable United States Bankruptcy Code and other laws, the
filing of any petition by or against Tenant under any chapter of the Bankruptcy
Act, or any successor statute thereto, or the adjudication of Tenant as a
bankrupt or insolvent, or the appointment of a receiver or trustee to take
possession of all or substantially all of the assets of Tenant, or a general
assignment by Tenant for the benefit of creditors, or any other action taken or
suffered by Tenant under any state or federal insolvency or bankruptcy act,
shall constitute a default under and breach of this Lease by Tenant, regardless
of Tenant’s compliance with the other provisions of this Lease; and Landlord at
its option by written notice to Tenant may exercise all rights and remedies
provided for in Article 25, including the termination of this Lease, effective
of such notice, without the necessity of further notice under Article 25.
 
26.2 Operation of Law
 
. Neither this Lease, nor any interest herein, nor any estate created hereby,
shall pass by operation of law under any state or federal insolvency or
bankruptcy act to any trustee, receiver, assignee for the benefit of creditors
or any other person whatsoever without the prior written consent of Landlord,
which shall not be unreasonably withheld. Any purported transfer in violation of
the provisions of this Paragraph 26.2 shall constitute a default under and
breach of this Lease, regardless of Tenant’s compliance with the other
provisions of this Lease; and Landlord at its option by written notice
 

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to Tenant may exercise all rights and remedies provided for in Article 25,
including the termination of this Lease, effective on service of such notice
without the necessity of further notice under Article 25.
 
26.3 Non-Waiver
 
. The acceptance of rent at any time and from time to time by Landlord from
Tenant as debtor in possession or from a transferee of the type mentioned in
Paragraph 26.2, shall not preclude Landlord from exercising its rights under
this Article 26 at any time hereafter.
 
26.4 Events of Bankruptcy
 
(a) Tenant’s becoming insolvent, as that term is defined in Title 11 of the
United States Code, entitled Bankruptcy, U.S.C. Sec. 101 et. seq. (the
“Bankruptcy Code”), or under the insolvency laws of the State in which the
Premises are situated (“Insolvency Laws”);
 
(b) The appointment of a receiver or custodian for any or all of Tenant’s
property or assets, or the institution of a foreclosure action upon any of
Tenant’s real or personal property;
 
(c) The filing of a voluntary petition under the provisions of the Bankruptcy
Code or Insolvency Laws;
 
(d) The filing of an involuntary petition against Tenant as the subject debtor
under the Bankruptcy Code or Insolvency Laws, which is either not dismissed
within sixty (60) days of filing, or results in the issuance of an order for
relief against the debtor, whichever is later; or
 
(e) Tenant’s making or consenting to an assignment for the benefit of creditors
or a common law composition of creditors.
 
26.5 Landlord’s Remedies
 
.
 
(a) Termination of Lease
 
. Upon occurrence of an Event of Bankruptcy, Landlord shall have the right to
terminate this Lease by giving written notice to Tenant; provided, however, that
this Paragraph 26.5(a) shall have no effect while a case in which Tenant is the
subject debtor under the Bankruptcy Code is pending, unless Tenant or its
Trustee is unable to comply with the provisions of Paragraph 26.5(d) and (e)
below. At all other times this Lease shall automatically cease and terminate,
and Tenant shall be immediately obligated to quit the Premises upon the giving
of notice pursuant to this Paragraph 26.5(a). Any other notice to quit, or
notice of Landlord’s intention to re-enter is hereby expressly waived. If
Landlord elects to terminate this Lease, everything contained in this Lease on
the part of Landlord to be done and performed shall cease without prejudice;
subject, however, to the rights of Landlord to recover from Tenant all rent and
any other sums accrued up to the time of termination or recovery of possession
by Landlord, whichever is later, and any other monetary damages or loss of
reserved rent sustained by Landlord.
 
(b) Suit for Possession
 
. Upon termination of this Lease pursuant to Paragraph 26.5(a), Landlord may
proceed to recover possession under and by virtue of the provisions of laws of
any applicable jurisdiction, or by such other proceedings, including re-entry
and possession, as may be applicable.
 
(c) Non-Exclusive Remedies
 
. Without regard to any action by Landlord as authorized by Paragraph 26.5(a)
and (b) above, Landlord may at its discretion exercise all the additional
provisions set forth in Article 25.
 
(d) Assumption or Assignment by Trustee
 
. In the event Tenant becomes the subject debtor in a case pending under the
Bankruptcy Code, Landlord’s right to terminate this Lease pursuant to
 

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Paragraph 26.5(a) shall be subject to the rights of the Trustee in Bankruptcy to
assume or assign this Lease. The Trustee shall not have the right to assume or
assign this Lease unless the Trustee (i) promptly cures all defaults under this
Lease, (ii) promptly compensates Landlord for monetary damages incurred as a
result of such default, and (iii) provides adequate assurance of future
performance on the part of Tenant as debtor in possession or on the part of the
assignee Tenant.
 
(e) Adequate Assurance of Future Performance
 
. Landlord and Tenant hereby agree in advance that adequate assurance of future
performance, as used in Paragraph 26.5(d) above, shall mean that all of the
following minimum criteria must be met: (i) Tenant must pay its estimated pro
rata share of the cost of all services provided by Landlord (whether directly or
through agents or contractors and whether or not previously included as part of
the Minimum Monthly Rent), in advance of the performance or provision of such
services; (ii) the Trustee must agree that Tenant’s business shall be conducted
in a first class manner, and that no liquidating sales, auctions, or other
non-first class business operations shall be conducted on the Premises (iii) the
Trustee must agree that the use of the Premises as stated in this Lease will
remain unchanged and that no prohibited use shall be permitted; and (iv) the
Trustee must agree that the assumption or assignment of this Lease will not
violate or affect the rights of other tenants in the Property.
 
(f) Failure to Provide Adequate Assurance
 
. In the event Tenant is unable to (i) cure its defaults, (ii) reimburse the
Landlord for its monetary damages, (iii) pay the rent due under this Lease and
all other payments required of Tenant under this Lease on time (or within three
(3) days), or (iv) meet the criteria and obligations imposed by
Paragraph 26.5(d) above, Tenant agrees in advance that it has not met its burden
to provide adequate assurance of future performance, and this Lease may be
terminated by Landlord in accordance with Paragraph 26.5(a) above.
 
ARTICLE 27
 

 
REMEDIES CUMULATIVE
 
The various rights, elections, and remedies of Landlord contained in this Lease
shall be cumulative, and no one of them shall be construed as exclusive of any
other, or any right, priority, or remedy allowed or provided for by law.
 
ARTICLE 28
 

 
ATTORNEY’S FEES
 
If either party hereto shall file any action or bring any proceeding against the
other party arising out of this Lease or for the declaration of any rights
hereunder, the prevailing party therein shall be entitled to recover from the
other party all costs and expenses, including reasonable attorneys’ fees,
incurred by the prevailing party as determined by the court. If either party
(“secondary party”) without its fault is made a party to litigation instituted
by or against the other party, the primary party shall pay to the secondary
party all costs and expenses, including reasonable attorneys’ fees, incurred by
the secondary party in connection therewith.
 
ARTICLE 29
 

 
LIABILITY OF MANAGER
 
The Building’s Property Manager is Landlord’s manager and rental agent in all
matters concerning this Lease and the Premises, and Tenant, until notified in
writing to the contrary by either the
 

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Landlord or Property Manager or the Assignee of Landlord’s interest under this
Lease, shall recognize such agency and pay all rental, furnish all statements,
and give any notice which Tenant may be under the duty of giving hereunder, or
may elect to give hereunder, to Property Manager at its offices set forth in the
Basic Lease Provisions, instead of to the Landlord. As long as such agency shall
exist, the rights and options extended to Landlord shall be deemed extended to
Property Manager, and each and every other term and provision of this Lease
which is in any way beneficial to the Landlord, including especially every
stipulation against liability, or limiting liability, shall inure to the benefit
of Property Manager and its agents and shall be applicable to Property Manager
and its agents in the same manner and as fully and with the same effect as to
Landlord. Whenever Landlord’s consent is required, Tenant shall request such
consent from Property Manager. The consent of Property Manager shall be deemed
the consent of Property Manager and Landlord.
 
ARTICLE 30
 

 
NO PARTNERSHIP
 
Landlord shall not in any way for any purpose be deemed a partner, joint
venturer or member of any joint enterprise with Tenant.
 
ARTICLE 31
 

 
SUBTENANCIES
 
The voluntary or other surrender of this Lease by Tenant or a mutual
cancellation of this Lease shall not effect a merger and shall, at Landlord’s
option, terminate all existing subtenancies or operate as an assignment to
Landlord of any or all of such subtenancies.
 
ARTICLE 32
 

 
SUCCESSORS
 
This Lease shall be binding upon and shall inure to the benefit of the parties
hereto and their successors and permitted assigns. The term “successors” is used
herein in its broadest possible meaning and includes, but is not limited to,
every person succeeding to any interest in this Lease or the premises of
Landlord or Tenant herein whether such succession results from the act or
omission of such party. Every covenant and condition of this Lease shall be
binding upon all assignees, subtenants, licensees, and concessionaires of
Tenant.
 
ARTICLE 33
 

 
REMOVAL OF TENANT’S PERSONAL PROPERTY
 
Upon the expiration of the Term of this Lease or upon any earlier termination
thereof, Tenant shall remove at its own expense all trade fixtures, equipment,
and personal property (collectively called “Tenant’s Personal Property”) in this
Lease which were installed by Tenant or any subtenant, concessionaire or
licensee in or upon the Premises; but if Tenant is in default, Tenant shall not
remove Tenant’s Personal Property unless notified by Landlord to do so. In case
of any injury or damage to the Building or any portion of the Premises resulting
from the removal of Tenant’s Personal Property, Tenant shall promptly pay to
Landlord the cost of repairing such injury or damage. If Tenant fails to so
remove Tenant’s Personal Property, Landlord may, at Landlord’s option, retain
any or all thereof, and title thereto shall thereupon vest in Landlord without
the execution of documents or sale or conveyance by Tenant; or
 

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Landlord may remove any or all items thereof from the Premises and dispose of
them in any manner Landlord sees fit, and Tenant shall pay upon demand to
Landlord the actual expense of such removal and disposition together with
interest from the date of payment by Landlord until repayment by Tenant.
 
ARTICLE 34
 

 
EFFECT OF CONVEYANCE
 
If, during the Term of this Lease, Landlord conveys its interest in the
Property, the Premises or this Lease, then, from and after the effective date of
such conveyance, Landlord shall be released and discharged from any and all
further obligations and responsibilities under this Lease, and the transferee
shall be deemed, without any further agreement between the parties or their
successors in interest or between the parties and any such transferee, to have
assumed and agreed to carry out any and all of the subsequent covenants and
obligations of the Landlord under this Lease. Any security given by Tenant to
secure performance of its obligations hereunder may be transferred and assigned
by Landlord to such transferee.
 
ARTICLE 35
 

 
LANDLORD’S DEFAULT; NOTICE TO LENDER
 
35.1 Landlord’s Default
 
. In the case of a default by Landlord, Landlord shall commence promptly to cure
such default immediately after receipt of written notice from Tenant specifying
the nature of such default and shall complete such cure within thirty (30) days
thereafter, provided that if the nature of such default is such that it cannot
be cured within said thirty (30) day period, Landlord shall have such additional
time as may be reasonably necessary to complete its performance, so long as
Landlord has proceeded with diligence after receipt of Tenant’s notice and is
then proceeding with diligence to cure such default.
 
35.2 Notice to Lender
 
. Whenever Tenant serves notice on Landlord of Landlord’s default, written
notice shall also be served at the same time upon the mortgagee under any first
mortgage or beneficiary under any first deed of trust, so long as Landlord has
provided Tenant with written notice of such mortgagee. Such mortgagee or
beneficiary shall have the periods of time within which to cure Landlord’s
defaults as are provided in Paragraph 35.1, which periods shall commence to run
ten (10) days after the commencement of the periods within which Landlord must
cure its defaults under Paragraph 35.1. In this connection, any representative
of the mortgagee or beneficiary shall have the right to enter upon the Premises
for the purpose of curing the Landlord’s default. Such mortgagee or beneficiary
shall notify Landlord and Tenant in the manner provided by Article 20 of the
address of such mortgagee or beneficiary to which such notice shall be sent, and
the agreements of Tenant hereunder are subject to prior receipt of such notice.
 
35.3 Independent Covenants; Limitation of Remedies and Landlord’s Liability
 
. The obligations of Landlord and Tenant, respectively, under this Lease are
expressly agreed by the parties to be independent covenants. If Landlord fails
to perform any obligation under this Lease required to be performed by Landlord,
Tenant shall have no right to: (i) terminate this Lease; (ii) avail itself of
self-help or to perform any obligation of Landlord except as expressly permitted
in Paragraph 35.1 above; (iii) abate or withhold any rent or any other charges
or sums payable by Tenant under this Lease; or (iv) any right of setoff. If
Landlord is in default hereunder, and as a consequence Tenant recovers a money
judgment against Landlord, such judgment shall be satisfied only out of the
proceeds of sale received on execution of the judgment and levy against the
right, title and interest of Landlord in the Premises, and out of rent or other
income from the Premises receivable by Landlord or out of the consideration
received by Landlord
 

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from the sale or other disposition of all or any part of Landlord’s right, title
and interest in the Premises. Neither Landlord, nor any agent, officer,
director, partner or employee of Landlord shall be personally liable for any
portion of such a judgment. If at any time the holder of Landlord’s interest
hereunder is a partnership, limited liability company or joint venture, a
deficit in the capital account of any partner, member or joint venturer shall
not be considered an asset of such partnership, limited liability company or
joint venture.
 
ARTICLE 36
 

 
RESERVED
 
Article 37
 

 
INTERPRETATION
 
The captions by which the articles and paragraphs of this Lease are identified
are for convenience only, and shall not affect the interpretation of this Lease.
Wherever the context so requires, the singular number shall include the plural,
the plural shall refer to the singular and the neuter gender shall include the
masculine and feminine genders. If there is more than one signatory hereto as
Tenant, the liability of such signatories shall be joint and several. If any
provision of this Lease shall be held to be invalid by a court, the remaining
provisions shall remain in effect and shall in no way be impaired thereby.
 
ARTICLE 38
 

 
ENTIRE INSTRUMENT
 
It is understood that there are no oral agreements between the parties hereto
affecting this Lease, and this Lease supersedes and cancels any and all previous
negotiations, arrangements, brochures, agreements and understandings, if any,
between the parties hereto or displayed by Landlord to Tenant with respect to
the subject matter thereof, and none thereof shall be used to interpret or
construe this Lease. This is the final and complete expression of the parties’
agreement, all of the agreements heretofore and contemporaneously made by the
parties are contained in this Lease, and this Lease cannot be modified in any
respect except by a writing executed by Landlord and Tenant. All terms and
conditions hereof shall apply on the date of mutual execution hereof except as
otherwise expressly set forth herein. Time is of the essence hereof.
 
ARTICLE 39
 

 
EASEMENTS; RECORDING
 
This Lease is made expressly subject to:
 
(a) any conditions, covenants, restrictions, easements, and other matters now or
hereafter of record against the Premises or the Property; and
 
(b) any easements for utilities or ingress and egress which now or hereafter may
be placed of record by Landlord for purposes of the common benefit of the
occupants of the Property. Tenant agrees, subject to the provisions of
Article 23, to execute such documents necessary to subordinate its interest
hereunder to such easements.
 

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Neither Landlord nor Tenant shall record this Lease or any “short-form” or other
memorandum thereof.
 
ARTICLE 40
 

 
SALE BY LANDLORD
 
The Premises and/or Landlord’s interest under this Lease may be freely sold or
assigned by Landlord, and in the event of any such sale or assignment, the
covenants and obligations of Landlord herein shall be binding on each successive
“landlord,” and its successors and assigns, only during their respective periods
of ownership.
 
ARTICLE 41
 

 
SECURITY MEASURES
 
Tenant acknowledges (1) that the Minimum Monthly Rent does not include the cost
of any security measures for any portion of the Property (2) that neither
Landlord nor Property Manager shall have any obligation to provide any such
security measures, (3) that neither Landlord nor Property Manager has made any
representation to Tenant regarding the safety or security of the Property, and
(4) that Tenant will be solely responsible for providing any security it deems
necessary to protect itself, its property, and Tenant’s invitees in, on, or
about the Building and the Property. If Landlord or Property Manager provides
any security measures at any time, then neither Landlord nor Property Manager
shall be obligated to continue providing such security measures and Landlord and
Property Manager shall not be obligated to provide such security measures with
any particular standard of care. Tenant assumes all responsibility for the
security and safety of Tenant and Tenant’s property. Except as otherwise
provided to the contrary in this Lease, Tenant releases Landlord and Property
Manager from all claims for damage, loss, or injury to Tenant, Tenant’s
Invitees, and/or to the personal property of Tenant and/or of Tenant’s Invitees,
even if such damage, loss, or injury is caused by or results from the criminal
or negligent acts of third parties. Landlord and Property Manager shall have no
duty to warn Tenant of any criminal acts or dangerous conduct that has occurred
in or near the Property, regardless of their knowledge of such crimes or
conduct, and Tenant is hereby instructed to conduct its own investigation
through local police agencies regarding any criminal acts or dangerous conduct
that has occurred in or near the Property.
 
ARTICLE 42
 

 
RESERVED
 
Article 43
 

 
CHOICE OF LAW; WAIVER OF TRIAL BY JURY
 
The laws of the state in which the Premises are situated shall govern this
Lease. Tenant hereby waives trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto on any matters whatsoever
arising out of or in any way connected with this Lease, including without
limitation, the relationship of Landlord and Tenant, Tenant’s use or occupancy
of the Premises, or any claim of injury or damage, or the enforcement of any
remedy under any law, statute, or regulation.
 

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Article 44
 

 
HAZARDOUS SUBSTANCES
 
44.1 Tenant’s Indemnity
 
. Tenant shall be solely responsible and liable for, and shall indemnify, defend
and hold harmless Landlord for, from and against any and all Hazardous
Substances existing on the Premises or the Property or any other property, or
present in or on the air, ground water, soil, buildings or other improvements or
otherwise in, on, under or about the Premises or the Property or any other
property, resulting from the Handling by Tenant’s Permittees of any Hazardous
Substance during the period of Tenant’s occupancy or use of the Premises.
Without limiting the generality of the foregoing, Tenant shall, at any time
during the Term of the Lease and at the end of the Term of the Lease, perform
all work necessary to render the Premises or any other property “clean” and free
of all Hazardous Substances, in accordance with all present and then-applicable
Laws.
 
44.2 Covenant
 
. Other than customary cleaning products and office products and equipment,
Tenant shall not cause or permit any Hazardous Substance to be Handled in, upon,
under or about the Premises (or any part thereof) or any part of the Property by
Tenant’s Permittees without the prior written consent of Landlord.
Notwithstanding the foregoing, Tenant shall promptly deliver to Landlord true
copies of all governmental permits and approvals relating to the Handling of
Hazardous Substances and all correspondence sent or received by Tenant’s
Permittees regarding any Handling of Hazardous Substances in or about the
Premises, including, without limitation, inspection reports and citations.
 
44.3 Definitions
 
. As used in this Article 44, the following terms shall have the following
definitions:
 
(a) “Hazardous Substance” means any chemical, compound, material, substance or
other matter that: (i) is a flammable explosive, asbestos, radioactive material,
nuclear medicine material, drug, vaccine, bacteria, virus, hazardous waste,
toxic substance, petroleum product, or related injurious or potentially
injurious material, whether injurious or potentially injurious by itself or in
combination with other Substance; (ii) is controlled, designated in or governed
by any Hazardous Substance Law; (iii) gives rise to any reporting, notice or
publication requirements under any Hazardous Substance Law; or (iv) gives rise
to any liability, responsibility or duty on the part of Tenant or Landlord with
respect to any third person under any Hazardous Substance Law.
 
(b) “Handle” or “Handled” or “Handling” means generated, produced, brought upon,
used, handled, stored, treated or disposed of.
 
(c) “Tenant’s Permittees” means and includes Tenant, Tenant’s employees,
licensees, contractors, subcontractors, representatives, agents, officers,
partners, directors, subtenants, sub-subtenants and invitees.
 
(d) “Laws” means all applicable present and future laws, ordinances, rules,
regulations, statutes, requirements, actions, policies, and common law of any
local, state, Federal or quasi-governmental agency, body, board or commission.
 
44.4 Breach of Obligations
 
. If Tenant breaches the obligations set forth in Paragraphs 44.1 and 44.2 of
this Lease, or if the presence of Hazardous Substances in, upon, under or about
the Premises caused or permitted by Tenant’s Permittees results in contamination
of the Premises or any other property, or if contamination of the Premises or
any other property by Hazardous Substances otherwise occurs or exists at any
time during or after the Term of this Lease, resulting from Tenant’s Permittee’s
use of the Premises, then Tenant shall indemnify, defend and hold Landlord
harmless from and against any
 

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and all liabilities, costs, expenses, claims, judgments, damages, penalties,
fines or losses (including without limitation, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the Premises
or the Property, claims by any government agency or other third parties, and
sums paid in settlement of claims, attorneys’ fees, consultants’ fees, experts’
fees and the like) which arise at any time during the Term of this Lease or
after the Term of this Lease as a direct result therefrom. This obligation of
Tenant to indemnify, defend and hold Landlord harmless shall survive and extend
beyond the expiration or earlier termination of this Lease and includes, without
limitation, indemnification against all costs incurred in connection with any
investigation of site conditions or any studies, testing, reports, monitoring,
clean-up, detoxification, decontamination, repairs, replacements, restoration
and remedial work required by any federal, state or local governmental agency,
authority or political subdivision because of any Hazardous Substance present in
soil, ground water, air, buildings or other improvements or otherwise in, upon,
under or about the Premises or the adjacent Property or any other property, air
or water. Without limiting the foregoing, if the presence of any Hazardous
Substance in, on, under or about the Premises or the Property due to the
Handling of Hazardous Substances by Tenant’s Permittees results in contamination
of the Premises or the Property or any other property, air or water, Tenant
shall immediately take all actions at its sole cost and expense as are necessary
or appropriate to return the Premises and the Property to the condition existing
prior to the Handling, provided that Tenant obtains Landlord’s prior written
approval of such actions and of the contractors and other persons performing
such actions, which approval shall not be unreasonably withheld, so long as such
actions would not potentially have any materially adverse long-term or
short-term effect on the Premises or the Property. In any event, any and all
actions by Tenant to return the Premises and the Property to the condition
existing prior to the Handling of any such Hazardous Substance shall be done in
compliance with all Laws, and in such a manner and at such times as to avoid
interference with and/or inconvenience to any or all other tenants, occupants,
contractors and invitees of any adjacent property to the maximum extent
possible. It is the intent of Landlord and Tenant (and Landlord and Tenant
hereby agree) that Landlord shall have no liability whatsoever for the existence
or presence of Hazardous Substances in, upon, under or about the Premises
resulting from the Handling of any Hazardous Substances in connection with
Tenant’s occupancy or use of the Premises, and that Tenant shall have sole and
absolute responsibility for the existence or presence of Hazardous Substances
in, upon, under or about the Premises and shall fully indemnify and hold
Landlord harmless from and against any liabilities, costs, expenses (including
attorneys’ fees), claims, judgments, damages, demand, penalties, fines and
losses arising from or in connection with the existence or presence of Hazardous
Substances in, upon, under or about the Premises or the migration thereof from
or to the Premises resulting from the Handling of any Hazardous Substances in
connection with Tenant’s occupancy or use of the Premises. Tenant’s obligations
under this Article shall survive the termination of this Lease.
 
44.5 Handling; Notices
 
. Without in any way diminishing or waiving the limitations on and obligations
of Tenant set forth in this Article 44, if Tenant’s Permittees Handle Hazardous
Substances in, upon, under or about the Premises, such Handling shall be done in
full compliance with all Laws. In that connection, Landlord and its agents and
representatives shall have the right, but not the obligation, at Tenant’s cost,
to enter onto and to inspect the Premises and conduct investigations, studies,
tests, reports, monitoring and analysis of the Premises and any and all
Hazardous Substances at any and all reasonable times to determine whether Tenant
is complying with its obligations under this Lease; provided, however, that
before Landlord enters the Premises to conduct any such tests or investigations,
Landlord shall provide Tenant with at least five (5) working days’ prior notice.
Furthermore, Tenant shall immediately upon receipt thereof, provide to Landlord
written notice of the following:
 
(a) Any enforcement, clean-up or other regulatory action taken or threatened by
any governmental authority with respect to the presence of any Hazardous
Substances in, upon under or about the Premises or the migration thereof from or
to other property;
 

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(b) All demands or claims made or threatened by any third party against Tenant
or the Premises relating to any loss or injury resulting from any Hazardous
Substances;
 
(c) Any spill, release, discharge or disposal of Hazardous Substances in, upon,
under or about the Premises;
 
(d) All matters with respect to which Tenant is required to give notice pursuant
to any applicable health and safety regulations.
 
Landlord shall have the right to join and participate in, as a party if it so
elects, any legal proceedings or actions affecting the Premises initiated in
connection with any Hazardous Substances or related laws.
 
44.6 Landlord’s Indemnity
 
. Landlord shall protect, defend, indemnify and hold harmless Tenant and its
agents, officers, directors, contractors, employees, parents, subsidiaries,
successors and assigns from and against any claims directly or indirectly
related to the presence of any asbestos, asbestos containing building materials
or other Hazardous Substances in or about the Premises, the Building, or the
Property as of the Possession Date. This indemnity shall survive the termination
of this Lease.
 
ARTICLE 45
 

 
AUTHORITY
 
If Tenant is other than a natural person, each person executing this Lease on
behalf of Tenant hereby covenants and warrants to Landlord that: such person is
duly authorized to execute this Lease on behalf of Tenant; Tenant is duly
qualified in all respects; all steps have been taken prior to the date hereof to
qualify Tenant to do business in the state in which the Premises are situated;
all franchise and other taxes have been paid to date; and all forms, reports,
fees and other documents necessary to comply with applicable laws will be filed
when due. Tenant will furnish to Landlord promptly upon demand, a corporate
resolution, proof of due authorization of partners, or other appropriate
documentation reasonably requested by Landlord evidencing the due authorization
of Tenant to enter into this Lease.
 
ARTICLE 46
 

 
BROKERS
 
Tenant hereby represents and warrants that, other than Landlord’s Broker and
Tenant’s Broker, Tenant has not employed any broker with regard to this Lease
and that Tenant has no knowledge of any other broker being instrumental in
bringing about this Lease transaction. Tenant shall indemnify Landlord against
any expense incurred by Landlord as a result of any claim for brokerage or other
commissions made by any other broker, finder, or agent, whether or not
meritorious, employed by Tenant or claiming by, through or under Tenant. Tenant
acknowledges that Landlord shall not be liable for any representations of
Landlord’s leasing agent or other agents of Landlord regarding this Lease
transaction except for the representations and covenants of Landlord expressly
set forth in this Lease.
 
ARTICLE 47
 

 
TENANT REPRESENTATION
 
Neither Tenant nor any of its constituent partners, members or shareholders, nor
any beneficial owner of Tenant or of any such partner, member or shareholder
(i) is listed on the Specially Designated
 

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Nationals and Blocked Persons List maintained by the Office of Foreign Asset
Control, Department of the Treasury (“OFAC”) pursuant to the Executive Order
No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (“Order”); (ii) is listed on any
other list of terrorists or terrorist organizations maintained pursuant to the
Order, the rules and regulations of OFAC or any other applicable requirements
contained in any enabling legislation or other Executive Orders in respect of
the Order (the Order and such other rules, regulations, legislation or orders
are collectively called the "Orders"); (iii) is engaged in activities prohibited
in the Orders; or (iv) has been convicted, pleaded nolo contendere, indicted,
arraigned or custodially detained on charges involving money laundering or
predicate crimes to money laundering.
 

IN WITNESS WHEREOF, the parties hereto have executed this lease the day and year
first above written.
 
[SIGNATURES ON NEXT PAGE]
 

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LANDLORD:

GRE 509 OLIVE LLC, a Washington limited liability company

By:  
Name:  
Its:  
Date: 

TENANT:

ONVIA, INC., a Delaware corporation

By:  
Name:  
Its:  
Date: 

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STATE OF WASHINGTON
 
COUNTY OF KING
 
ss.

I certify that I know or have satisfactory evidence that ____________ is the
person who appeared before me, and said person acknowledged that said person
signed this instrument, on oath stated that said person was authorized to
execute the instrument and acknowledged it as the __________ of GRE 509 OLIVE
LLC, a Washington limited liability company, to be the free and voluntary act of
such limited liability company for the uses and purposes mentioned in the
instrument.

Dated this _________________________ day of _________________________, 2007.

(Signature of Notary)

(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of Washington,
residing at
My appointment expires

STATE OF WASHINGTON
 
COUNTY OF KING
 
ss.

I certify that I know or have satisfactory evidence that ____________ is the
person who appeared before me, and said person acknowledged that said person
signed this instrument, on oath stated that said person was authorized to
execute the instrument and acknowledged it as the __________ of ONVIA, INC., a
Delaware corporation, to be the free and voluntary act of such corporation for
the uses and purposes mentioned in the instrument.

Dated this _________________________ day of _________________________, 2007.

(Signature of Notary)

(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of Washington,
residing at
My appointment expires

EXHIBIT “A”
 
LEGAL DESCRIPTION
 
All of Lot 6, except portion condemned by the City of Seattle for Westlake
Avenue; all of Lot 7; all of Lot 5, except the South 20 feet thereof; and all of
Lot 8, except the South 20 feet thereof; all in Block 2, Addition to the Town of
Seattle as laid off by the heirs of Sarah A. Bell, (deceased, also known as
Heirs of Sarah A. Bell’s addition to the City of Seattle), according to the Plat
recorded in Volume I of Plats, page 103, in King County, Washington;

Together with vacated alley lying between said portions of Lots 5 and 6 on the
west, and Lot 7 and said portion of Lot 8 on the east.

 

EXHIBIT “B”
 
SPACE PLAN
 

EXHIBIT “C”
 
WORKLETTER
 
1. Space Plan and Related Requirements.

(a) Tenant’s architect is to prepare space plans for any desired alterations,
additions, or improvements (the “Tenant’s Work”). Tenant shall cause its
Architect to submit to Landlord for review and approval the space plans and
specifications for Tenant’s Work, including without limitation final location of
partitions, doors, ceiling devices, and final specifications for materials and
finishes, electrical devices, electrical loads, heat loads, extraordinary floor
loads, any security system desired by Tenant for the Premises, other special
equipment and all other requirements (the “Space Plans”), within twenty (20)
days following mutual execution of this Lease . Landlord shall have five (5)
business days after receiving the Space Plans to approve or disapprove them and
provide Tenant and the Architect with its proposed changes to the Space Plans.
If Landlord fails to object to the proposed Space Plans within such 5 business
day period, Landlord’s approval of the Space Plans shall be deemed given.
Following approval of the Space Plans, Tenant shall then cause its architects
and engineers to prepare the initial “Working Drawings” detailing the complete
scope of the Tenant’s Work, utilizing uniform Building standard specifications.

(b) All space plans, related requirements, and Working Drawings referred to
herein above shall be subject to Landlord’s approval, which approval shall not
be unreasonably withheld. Landlord shall have five (5) business days after
receiving the Working Drawings to approve or disapprove them and provide Tenant
and the Architect with its proposed changes to the Working Drawings; provided,
however, that in no event shall Tenant be required to make changes to the
Working Drawings that are inconsistent or in conflict with the approved Space
Plans. If Landlord fails to object to the proposed Working Drawings within such
5 business day period, Landlord’s approval of the Working Drawings shall be
deemed given.

(c) After final approval, no further changes may be made to the Working Drawings
without the prior written approval of Tenant and Landlord. Additional revisions
requested by the Tenant resulting in additional costs shall be the sole
responsibility of the Tenant. Approval of Working Drawings shall be considered
final authorization to proceed.

(d) Tenant shall cause the approved Working Drawings to be submitted to the
appropriate governmental agencies for plan review and building permit. Revisions
which may be required by governmental agencies as a result of the plan review
process shall be reviewed by Tenant and Landlord and modifications reflecting
same shall be mutually agreed upon in a timely manner so as not to delay
progress of the Tenant’s Work.

2. Contractors. All contractors and subcontractors participating in construction
of Tenant’s Work shall be reputable and shall meet all licensing and insurance
requirements of the State of Washington, and be reasonably satisfactory to
Landlord. Tenant’s choice of subcontractors shall not materially affect any
guaranties or warranties relating to the Building or major Building systems. All
Tenant’s Work shall be completed under the same general contractor
(“Contractor”) unless otherwise agreed by Tenant. Tenant shall provide Landlord
with:

(a) The Contractor’s state contractor registration numbers;
(b) Complete list of subcontractors with name, telephone number, address and
contact name;
(c) A set of Working Drawings approved by the City of Seattle; and

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(d) A copy of the building permit for the Tenant’s Work.

3. Work Schedule. Tenant will provide a draft Work Schedule to Landlord seven
(7) days prior to commencement of construction.

4. Construction Work and Costs. Tenant shall complete the Tenant’s Work at
Tenant’s sole risk, cost and expense (except for the Tenant Allowance and the
Design Allowance described below). The construction shall be performed in a good
and workmanlike manner and in compliance with all applicable rules, laws, codes
and regulations, including all reasonable and applicable safety procedures
established by Landlord’s Construction Representative. The following conditions
during construction of the Tenant’s Work shall apply to Tenant and Tenant’s
Contractor.

(a) Tenant’s Contractor shall use commercially reasonable efforts to avoid
interfering with the completion of Landlord’s Work.

(b) Tenant’s Contractor shall provide written notice to Landlord’s Construction
Representative of any work to be done on weekends or other than normal job
hours, and Landlord shall provide keys and/or security access cards as needed
for after-hours access.

(c) All deliveries shall be through service entries except as pre-scheduled for
oversized items. Landlord’s Property Manager should be contacted for
authorization to route any large equipment or materials through non-service
areas.

(d) Use of building elevators for delivery of materials shall be arranged
through Landlord’s Property Manager. Elevator pads shall be used at all times
during construction.

(e) Use of Building or Property utilities shall be arranged through Landlord’s
Property Manager and Landlord reserves the right to charge Tenant the costs
therefor.

(f) Common Areas shall be kept clean at all times. The Premises shall be
maintained in a clean and orderly condition.

(g) Tenant’s Contractor shall coordinate all interruptions to the fire alarm and
sprinkler systems with Landlord’s Construction Representative twenty-four (24)
hours prior to interruption of service. Only Landlord’s Construction
Representative may order an interruption of service.

(h) Tenant’s Contractor shall obtain written approval from Landlord’s
Construction Representative prior to any penetration of any floor slab.
Landlord’s approval shall not relieve Tenant or Tenant’s Contractor from
responsibility for damage to Landlord’s and/or other Tenant’s premises because
of such penetration. Tenant’s Contractor shall accept the Premises prior to
starting any trenching operations. Any roof penetration or modification to the
Building structure shall be completed by the Landlord’s designated contractor at
the Tenant’s expense and only after receiving prior written approval from the
Landlord’s Construction Representative. Landlord’s approval shall not relieve
Tenant or Tenant’s Contractor from responsibility for damage to Landlord’s
and/or other tenant’s premises because of such work.

(i) Tenant’s Contractor shall store all construction materials and contain all
operations within the Premises and such other space as Landlord’s Construction
Representative may direct from time to time, following reasonable prior notice.
With regard to space outside of the Premises, Landlord’s Construction
Representative shall have the right to reassign such space and require Tenant’s
Contractor to move its materials and/or operations to such other space as
directed from time to time. Tenant shall

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promptly move to such other space as directed and shall take all steps necessary
to avoid interference or delays with other work. All trash, construction debris
and surplus construction materials shall be promptly removed from the Building
site.

(j) Security of tools, equipment and materials is the responsibility of the
Tenant’s Contractor.

(k) Tenant’s Contractor, subcontractors and suppliers shall park in areas as
designated by the Landlord’s Property Manager.

(l) Tenant’s Contractor or subcontractors shall not post signs on any part of
the Building, Building site or the Premises.

(m) During construction of the Tenant’s Work, the Premises shall be open during
working hours for inspection by the Landlord’s Construction Representative and
Property Manager. Upon completion of Tenant’s Work, Landlord’s Construction
Representative and Property Manager shall perform a final inspection for
conformance of the work to Building standards and the final approved Working
Drawings.

(n) Any and all work performed by Tenant’s Contractor shall be performed in a
manner to avoid any labor dispute which results in a stoppage or impairment of
work, deliveries or any other service in the Building. If there shall be any
such stoppage or impairment as the result of any such labor dispute, Tenant
shall immediately undertake such action as may be necessary to eliminate such
dispute or potential dispute, including, without limitation, (a) removing all
disputants from the job site until such time as the labor dispute no longer
exists, (b) seeking a temporary restraining order and other injunctive relief
with regard to illegal union activities or a breach of contract between Tenant
and Tenant’s Contractor, and (c) filing appropriate unfair labor practice
charges.

5. Construction Insurance. During construction, Tenant or its Contractor shall
procure and maintain in effect the following insurance coverages with an
insurance company or companies authorized to do business in the State of
Washington:

(a) Workmen’s Compensation - Statutory Limits for the State of Washington,
together with “ALL STATES,” “VOLUNTARY COMPENSATION” AND “FOREIGN COMPENSATION”
coverage endorsements;

(b) Employer’s Liability Insurance with a limit of not less than $500,000.00;

(c) Commercial General Liability - at least $1,000,000 Combined Single Limit,
including Personal Injury, Contractual and Products/Completed Operations
Liability naming Landlord and Tenant as additional insured. Coverage must be
primary and non-contributing and include the following:

(i) Premises - Operations
(ii) Elevators and Hoists
(iii) Independent Contractor
(iv) Contractual Liability assumed under the construction contract
(v) Completed Operations - Products
(vi) Explosion, Underground and Collapse (XUC) Coverage

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(d) Automobile Liability - Including Owned, Hired and Non-owned licensed
vehicles used in connection with performance of the construction work of at
least: $1,000,000 per occurrence, $3,000,000 general aggregate (including
umbrella limits). Coverage must include the following:

(i) Owned vehicles
(ii) Leased vehicles
(iii) Hired vehicles
(iv) Non-owned vehicles

(e) [Reserved];

(f) Furnish the Landlord with certificates of insurance evidencing such coverage
prior to the commencement of the construction work. All insurance shall be
carried in companies reasonably acceptable to the Landlord;

(g) The following statement shall appear in each certificate of insurance
provided Landlord by Tenant hereunder:

“It is agreed that in the event of any material change in, cancellation or
non-renewal of this policy, the Company shall endeavor to give ten (10) days
prior notice to [Landlord].”

(h) During construction of the Tenant’s Work, both parties shall give prompt
notice to the other of all losses, damages, or injuries to any person or to
property of Tenant, Landlord or third parties. Landlord or Tenant shall promptly
report to the other all such claims of which that party has notice, whether
related to matters insured or uninsured. No settlement or payment for any claim
for loss, injury or damage or other matter as to which one party may have an
obligation for any payment or reimbursement, shall be made by the other without
the written approval of the affected party;

(i) The carrying of any of the insurance required hereunder shall not be
interpreted as relieving the insuring party of any responsibility to the other
party, and the other party does not waive any rights that it may have against
the other party and/or its representatives for any expense and damage to persons
and property (tangible and intangible) from any cause whatsoever with respect to
the insuring party’s work; and

(j) Landlord and Tenant shall assist and cooperate with any insurance company in
the adjustment or litigation of all claims arising under the terms of this
Section.

6. As-Builts. Upon completion of the Tenant’s Work, Tenant’s Contractor shall
submit to Landlord’s Construction Representative: (i) copies of all as-built
Construction Documents and specifications (or marked-up construction drawings)
indicating reconfiguration of the Premises, including changes to the mechanical,
electrical, architectural, plumbing, cabling, sprinkler and fire alarm, as
applicable; and (ii) original building permit with inspector(s) final
acceptance.
 
7. Tenant Allowance.

(a) Landlord shall cause the Landlord’s Work described below to be constructed
at its sole cost and expense. Additionally, Landlord pay to Tenant a “Tenant
Allowance” of $1,950,000 ($55.00 per RSF of the Premises plus a reimbursement of
the actual contractor remobilization fee and general conditions related to Suite
550 in an amount not to exceed $25,000) to be used by Tenant for costs
associated with Tenant’s Work, including but not limited to costs associated
with preparation of Working Drawings, construction of the Tenant’s Work,
including all hard and soft costs, required permits,

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governmental fees, and inspections, Washington State sales tax, and preparation
of as-built record documentation. Landlord shall also provide a “Design
Allowance” equal to $5,250 ($0.15 per RSF of the Premises) to be used by Tenant
for initial preparation of the Space Plan and up to two revisions, such amount
to be payable directly by Landlord to Tenant’s architect.

(b) Payment or nonpayment of the Tenant Allowance and/or the Design Allowance
shall not relieve Tenant of its responsibility and pay for all costs for the
Tenant’s Work. If Tenant is not then in uncured default under this Lease,
Landlord shall reimburse the Design Allowance with ten (10) days after the
request of Tenant, together with an invoice from Tenant’s Architect showing the
cost of work performed at least equal to the amount of the Design Allowance. If
Tenant is not then in uncured default under this Lease, Landlord shall reimburse
the Tenant Allowance within fifteen (15) days after the request of Tenant, not
requested more frequently than monthly, provided Tenant has complied with the
following:

(i) With respect to each of the monthly installments:

(A) Tenant has furnished Landlord with reasonable evidence that Tenant has
theretofore performed the Tenant’s Work for which that portion of the Tenant
Allowance is being requested in substantial accordance with the approved Working
Drawings and in substantial accordance with all other applicable provisions of
this lease;

(B) Tenant has fully paid for that portion of the Tenant’s Work theretofore
performed;

(C) Tenant has furnished Landlord original, valid, partial mechanic’s lien
releases from the Contractor and all other contractors and suppliers who
performed labor or supplied services or materials for or in connection with
Tenant’s Work with respect to contracts in excess of $5,000.00 covering all of
the Tenant’s Work theretofore performed; and

(D) Tenant has furnished Landlord (a) an affidavit from Tenant listing all
contractors and suppliers whom Tenant has contracted with in connection with the
Tenant’s Work, together with the cost of each contract, and (b) an affidavit
from Tenant’s general contractor listing all subcontractors and suppliers whom
the general contractor has contracted with in connection with the Tenant’s Work,
together with the cost of each contract.

(ii) With respect to the last installment:

(A) Tenant has performed all the Tenant’s Work in substantial accordance with
the approved Working Drawings and in substantial accordance with all other
applicable provisions of this Lease;

(B) Tenant has furnished Landlord (a) an affidavit from Tenant listing all
contractors and suppliers whom Tenant has contracted with in connection with the
Tenant’s Work, together with the cost of each contract, and (b) an affidavit
from Tenant’s general contractor listing all subcontractors and suppliers whom
the general contractor has contracted with in connection with the Tenant’s Work,
together with the cost of each contract;

(C) If applicable, Tenant has obtained a temporary or permanent certificate of
occupancy with respect to the Premises;

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(D) Tenant has fully paid for all of the Tenant’s Work and has furnished to
Landlord a certificate from an officer of Tenant stating same and setting forth
the total amount that was spent on the Tenant’s Work;

(E) Tenant has furnished Landlord original, valid, unconditional mechanic’s lien
releases from the Contractor and all other contractors and suppliers who
performed the Tenant’s Work or furnished supplies for or in connection with the
Tenant’s Work.

If Tenant fails to request any portion of the Tenant Allowance by the first
(1st) anniversary of the first Possession Date, Tenant shall have no further
right to receive same. If Landlord fails to pay the Tenant Allowance or Design
Allowance when due within forty-five (45 days) upon Tenant satisfying the
conditions of 7 (B) above, Tenant may abate Minimum Monthly Rent until the
Tenant Allowance and/or Design Allowance (as applicable) has been fully
recovered or has been paid in full by Landlord.

Within a reasonable amount of time after Tenant has completed Tenant’s Work,
Tenant shall provide to Landlord a copy of the as-builts required elsewhere in
this Exhibit.

8. Landlord’s Work. Except as noted below, Landlord shall, at Landlord’s sole
cost and expense, complete the following work no later than September 3, 2007,
with respect to the 4th floor, and October 1, 2007 with respect to the 5th floor
(excluding Suite 550) (“Landlord’s Work”): (a) demolition, removal and disposal
of existing improvements, including all interior walls, conduit, piping, wiring,
etc.; (b) seismic code-required improvements in the following areas in the
Premises: restrooms; ADA; life safety; electrical; mechanical; seismic; and
plumbing; (c) stub electricity to the floor; (d) fill all holes in the floor;
and (e) abate asbestos/lead paint on Floors 4 and 5.

9. Additional Work.

(a) Following the Possession Date, and simultaneously with the Tenant’s Work,
Tenant shall, at Landlord’s sole cost and expense, complete the following work
to the Premises (“Additional Work”): (a) renovation of building standard
restrooms including any required ADA upgrades; (b) improvement of all windows to
deliver them as double pane; (c) fire coating all columns, floors, walls and
ceilings as required by the Seattle Fire Code; (d) patch plaster of exterior
Premises walls in the interior of the Building; (e) installation of a sprinkler
system throughout the Premises per the approved Space Plan; and (f) purchase and
installation of all HVAC systems, including but not limited to all HVAC
equipment, VAV boxes, power to all mechanical equipment, controls and
construction of the required mechanical room on each floor all per the approved
Space Plans; and (g) provide and install Building standard window blinds for all
windows (to be completed prior to occupancy in conjunction with Tenant’s Work).
Tenant shall obtain any governmental approvals and permits required for the
Additional Work.

(b) Tenant bids for the Additional Work from not less than three (3) contractors
selected by Tenant and approved by Landlord. Following receipt of bids, Tenant,
after consultation with Landlord, shall engage or cause to be engaged the
contractor submitting the bid selected by Tenant.

(c) Landlord shall be solely responsible for all actual hard and soft costs for
the Additional Work (the “Additional Work Costs”). Landlord shall reimburse
Tenant for the actual Additional Work Costs in accordance with the procedures
set forth in Section 7(b) above for the disbursement of the Tenant Allowance. If
Landlord fails to pay the Additional Work Costs when due within forty-five (45
days) upon Tenant satisfying the conditions of 7 (B) above, Tenant may abate
Minimum Monthly Rent until the Additional Work Costs has been fully recovered or
has been paid in full by Landlord.

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10. Substantial Completion. “Substantially complete” or “substantially
completed” or “substantial completion” means the completion of the Landlord’s
Work and/or Tenant’s Work, as applicable, subject to completion or correction of
“punch list” items, that is, minor items of incomplete or defective work or
materials or mechanical maladjustments that are of such a nature that they do
not materially interfere with or impair the performance of the Landlord’s Work
or the Tenant’s Work, as applicable.

11. Construction Representatives. Tenant hereby appoints The Staubach Company to
act on its behalf and represent its interests with respect to all matters
requiring Tenant action in this Exhibit. All matters requiring the consent,
authorization or other actions by Tenant with respect to matters set forth in
this Section shall be in writing and signed by the aforementioned person. No
consent, authorization, or other action by Tenant with respect to the matters
set forth in this Exhibit shall bind Tenant unless in writing and signed by the
aforementioned person. Landlord hereby appoints Matt Parent to act on its behalf
and represent its interests with respect to all matters requiring Landlord
action in this Exhibit. All matters requiring the consent, authorization or
other actions by Landlord with respect to matters set forth in this Section
shall be in writing and signed by the aforementioned person. No consent,
authorization, or other action by Landlord with respect to the matters set forth
in this Exhibit shall bind Landlord unless in writing and signed by the
aforementioned person.

12. Legal Title. Legal title to all Landlord’s Work, Tenant’s Work, and
Additional Work shall immediately vest in Landlord upon substantial completion
thereof.

13. Tenant’s Access During Construction. Tenant or its representatives may enter
upon portions of the Premises on and after the Possession Date as to that
portion and during construction of Landlord’s Work for purposes of conducting
all such activities as are reasonably necessary, appropriate or desirable with
respect to preparing the Premises for occupancy, provided that no such access
may materially interfere with the prosecution and completion of the Landlord’s
Work.

EXHIBIT “D”
 
RULES AND REGULATIONS
 

1. The sidewalks, halls, passages, elevators, stairways, exits and entrances of
the Building shall not be obstructed by Tenant or used by it for any purpose
other than for ingress and egress from the Premises. The halls, passages, exits,
entrances, elevators, retail arcade, escalators, balconies and stairways are not
for the use of the general public, and Landlord shall in all cases retain the
right to control and prevent access to those areas by all persons whose presence
in the judgment of Landlord would be prejudicial to the safety, character,
reputation and interests of the Building and its tenants, provided that nothing
in this Lease shall be construed to prevent access to persons with whom Tenant
normally deals in the ordinary course of its business, unless those persons are
engaged in illegal activities. Tenant shall not go upon the roof of the
Building, except in areas that Landlord may designate as “Common Areas” from
time to time.

2. The Premises shall not be used for lodging or sleeping. Unless ancillary to a
restaurant or other food service use specifically authorized in Tenant’s Lease,
no cooking shall be done or permitted by Tenant on the Premises, except that the
preparation of hot beverages and use of microwave ovens for Tenant and its
employees shall be permitted. No animals of any kind shall be permitted at the
Building except as may be required by applicable law.

3. Landlord shall provide at no cost to Tenant up to five (5) keys or access
cards to the Premises; all additional or lost keys shall be at Tenant’s expense.
Tenant may not install any additional locks in the Premises without Landlord’s
prior consent, and all such locks must be keyed to the Building’s master system.
Tenant shall not alter any lock or install a new or additional lock or any bolt
on any door of the Premises, which Landlord requires access to without
furnishing Landlord with a key for any lock and obtaining Landlord’s prior
permission. Tenant, upon the termination of its tenancy, shall deliver to
Landlord all keys and/or security cards to doors in the Building and the
Premises that shall have been furnished to Tenant and in the event of loss of
any keys and/or security cards so furnished, shall pay Landlord for the lost
keys and/or security cards and changing of locks as a result of such loss.

4. The persons employed by Tenant to move equipment or other items in or out of
the Building must be acceptable to Landlord. Landlord shall have the right to
prescribe the weight, size and position of all equipment, materials, supplies,
furniture or other property brought into the Building. No safes or other objects
larger or heavier than the elevator of the Building is limited to carry shall be
brought into or installed on the Premises without Landlord’s prior written
consent. Heavy objects shall, if considered necessary by Landlord, stand on wood
strips of thickness as is necessary to properly distribute the weight of those
objects. Landlord will not be responsible for loss of or damage to any property
from any cause, and all damage done to the Building by moving or maintaining
Tenant’s property shall be repaired at the expense of Tenant. The moving of
heavy objects shall occur only between those hours as may be designated by and
only upon written notice to Landlord and the persons employed to move heavy
objects in or out of the Building must be acceptable to Landlord.

5. Tenant shall not use or keep in the Premises or the Building any kerosene,
gasoline or flammable or combustible fluid or materials or use any method of
heating or air conditioning other than that permitted by Landlord. Tenant shall
not sweep or throw or permit to be swept or thrown from the Premises any debris
or other substance into any of the corridors, halls or lobbies or out of the
doors or windows or into the stairways of the Building and Tenant shall not use,
keep or permit to be used or kept any foul or noxious gas or substance in the
Premises. Tenant shall not use, keep or permit or suffer the

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Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors and/or
vibrations, or interfere in any way with other tenants or those having business
in the Building.

6. During non-business hours and on holidays as designated by the Landlord,
access to the Building, or to the halls, corridors or stairways in the Building,
or to the Premises, may be refused unless the person seeking access is known to
the Building and has a pass or is properly identified. Landlord shall in no case
be liable for damages for the admission to or exclusion from the Building of any
person whom Landlord has the right to exclude under Rule 1 above. In case of
invasion, mob, riot, public excitement or other circumstances rendering that
action advisable in Landlord’s opinion, Landlord reserves the right to prevent
access to the Building during the continuance of that activity by taking those
actions that Landlord may deem appropriate, including closing entrances to the
Building. Any person, whose presence in the Building at any time shall in the
sole judgment of Landlord, be prejudicial to the safety, character, reputation
and interests of the Building or its Tenants may be denied access to the
Building or may be ejected there from. Landlord may require any persons leaving
the Building with any package or other object to exhibit a pass from Tenant from
whose premises the package or object is being removed, but the establishment and
enforcement of such requirement shall not impose any responsibility on Landlord
for the protection of any Tenant against the removal of property from the
Premises of Tenant.

7. Tenant shall see that the doors of the Premises are closed and securely
locked when Tenant’s employees leave the Premises, after hours.

8. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, no
foreign substance of any kind whatsoever shall be deposited in any of them, and
any damage resulting to them from Tenant’s misuse shall be paid for by Tenant.

9. Except with the prior written consent of Landlord, Tenant shall not sell, or
permit the sale from the Premises of newspapers, magazines, periodicals, theatre
tickets or any other goods, merchandise or service, nor shall Tenant carry on,
or permit or allow any employee or other person to carry on, business in or from
the Premises for the service or accommodation of occupants of any other portion
of the Building, nor shall the Premises be used for manufacturing of any kind,
or for any business or activity other than that specifically provided for in
Tenant’s Lease. No Tenant shall obtain for use upon the Premises ice, towel and
other similar services, or accept barbering or shoe polishing services in the
Premises, except from persons authorized by Landlord and at hours and under
regulations fixed by Landlord.

10. Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building except as otherwise
specifically permitted in the Lease.

11. Tenant shall not use in any space, or in the Common Areas of the Building,
any handtrucks except those equipped with rubber tires and side guards or other
material handling equipment as Landlord may approve. No other vehicles of any
kind shall be brought by Tenant into the Building or kept in or about the
Premises.

12. No sign, advertisement or notice visible from the exterior of the Premises
shall be inscribed, painted or affixed by Tenant on any part of the Building or
the Premises without the prior written consent of Landlord. If Landlord shall
have consented at anytime, whether before or after the execution of this Lease,
that consent shall in no way operate as a waiver or release of any of the
provisions of this Rule 12 or of this Lease, and shall be deemed to relate only
to the particular sign,

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advertisement or notice so consented to by Landlord and shall not be construed
as dispensing with the necessity of obtaining the specific written consent of
Landlord with respect to each and every such sign, advertisement or notice other
than the particular sign, advertisement or notice, as the case may be, so
consented to by Landlord. All signs shall comply with the requirements of the
Building’s Sign Criteria.

13. Except as shown in the design plan approved by Landlord, the sashes, sash
doors, windows, glass relites, and any lights or skylights that reflect or admit
light into the halls or other places of the Building shall not be covered or
obstructed and, there shall be no hanging plants or other similar objects in the
immediate vicinity of the windows or placed upon the window sills or hung from
the window heads. Tenant shall not use any blinds, shades, awnings, or screens
in connection with any window or door of the premises unless approved in writing
by Landlord. Tenant shall not use any drape or window covering facing any
exterior glass surface other than the standard drape established by Landlord.

14. No tenant shall lay linoleum or other similar floor covering so that it is
affixed to the floor of the Premises in any manner except by a paste, or other
material which may easily be removed with water, the use of cement or other
similar adhesive materials being expressly prohibited. The method of affixing
any linoleum or other similar floor covering to the floor, as well as the method
of affixing carpets or rugs to the Premises, shall be subject to approval by
Landlord. The expense of repairing any damage resulting from a violation of this
Rule 14 shall be borne by the Tenant by whom, or by whose agents, clerks,
employees or visitors, the damage shall have been caused.

15. Tenant shall not overload the floor of the Premises or mark, drive nails,
screw or drill into the partitions, woodwork or plaster or in any way deface the
premises or any part thereof.

16. Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the premises unless otherwise agreed to by
Landlord. Except with the written consent of Landlord no person or persons other
than those approved by Landlord shall be permitted to enter the Building for the
purpose of cleaning the same. Tenant shall not cause any unnecessary labor by
reason of Tenant’s carelessness or indifference in the preservation of good
order and cleanliness. Landlord shall in nowise be responsible to any Tenant for
any loss of property on the premises, however occurring, or for any damage done
to the effects of any Tenant by the janitor or any other employee or any other
person.

17. All loading, unloading, and delivery of merchandise, supplies, materials and
furniture to the Premises shall be made during reasonable hours and in entryways
and elevators as Landlord shall designate. In its use of the loading areas on
the first basement floor, Tenant shall not obstruct or permit the obstruction of
loading areas, and at no time shall Tenant park vehicles in the loading areas
except for loading and unloading.

18. Canvassing, soliciting, peddling or distribution of handbills or any other
written material in the Building is prohibited and Tenant shall cooperate to
prevent these activities.

19. Tenant shall not permit the use or the operation of any coin operated
machines on the Premises, including, without limitation, vending machines, video
games, pinball machines, or pay telephones without the prior written consent of
Landlord.

20. Landlord may direct the use of all pest extermination and scavenger
contractors throughout the Building and/or Premises at intervals as Landlord may
require.

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21. If Tenant desires telephone or telegraph connections, Landlord will direct
service technicians as to where and how the wires are to be introduced. No
boring or cutting for wires or otherwise shall be made without directions from
Landlord. The location of telephones, call boxes and other office equipment
affixed to the Premises shall be subject to the approval of Landlord.

22. Tenant shall immediately, upon request from Landlord (which request need not
be in writing), reduce its lighting in the Premises for temporary periods
designated by Landlord, when required in Landlord’s judgment to prevent
overloads of mechanical or electrical systems of the Building. Tenant shall see
that the doors of the premises are closed and securely locked before leaving the
Building and must observe strict care and caution that all water faucets or
water apparatus are entirely shut off before Tenant or Tenant’s employees leave
the Building, and that all electricity, gas or air shall likewise be carefully
shut off, so as to prevent waste or damage, and for any default or carelessness.

23. Landlord reserves the right to select the name of the Building and to change
the name as it may deem appropriate from time to time, and Tenant shall not
refer to the Building by any name other than: (a) the names as selected by
Landlord (as that name may be changed from time to time), or (b) the postal
address, approved by the United States Post Office. Tenant shall not use the
name of the Building in any respect other than as an address of its operation in
the Building without the prior written consent of Landlord.

24. The requirements of Tenant will be attended to only upon application by
telephone or in person at the office of the Building manager. Employees of
Landlord shall not perform any work or do anything outside of their regular
duties unless under special instruction from Landlord.

25. Tenant acknowledges that the Building is a “no smoking” building and Tenant
shall cause its employees, contractors, and invitees to observe all local,
state, and federal laws, codes, and ordinances in connection with any use of
tobacco products in and around the Building.

26. Landlord may waive any one or more of the Rules and Regulations for the
benefit of any particular tenant or tenants, but no waiver by Landlord shall be
construed as a waiver of the Rules and Regulations in favor of any other tenant
or tenants, nor prevent Landlord from thereafter enforcing any Rules and
Regulations against any or all of the tenants in the Building.

27. Wherever the word “Tenant” occurs in these Rules and Regulations, it is
understood and agreed that it shall mean Tenant’s assigns, subtenants,
associates, agents, clerks, employees and visitors. Wherever the word “Landlord”
occurs in these Rules and Regulations, it is understood and agreed that it shall
mean Landlord’s assigns, agents, clerks, employees and visitors.

28. These Rules and Regulations are in addition to, and shall not be construed
in any way to modify, alter or amend, in whole or part, the terms, covenants,
agreements and conditions of any Lease of Premises in the Building. Landlord
shall have the right to modify the foregoing Rules and Regulations and add new
Rules and Regulations from time to time, which such new or modified Rules and
Regulations shall become effective thirty (30) days after delivery thereof to
Tenant.

 

EXHIBIT “E”
 
DELIVERY OF PREMISES
 
NAME OF PROPERTY:
Medical Dental Building

 
NAME OF TENANT:
Onvia, Inc.

 
PREMISES LOCATION/ADDRESS:
Suites 400 & 501

 
509 Olive Way
 
Seattle, WA 98101
 

 
ACKNOWLEDGEMENT
 
As stipulated under Paragraph 3.1 (“Term”) of the Lease Agreement executed by
Landlord and Tenant herein for the above-referenced Premises, Tenant does hereby
acknowledge that Tenant is in receipt of the keys to said Premises as of the
date listed below.
 
Furthermore, Tenant acknowledges that Tenant has inspected the Premises, and
that Landlord’s Work pursuant to Exhibit “C” is substantially completed, and
that the following date shall be the Lease Commencement Date and the Rent
Commencement Date as defined in the Lease: _____________, 200__.
 

 
TENANT:
 
ONVIA, INC,. a Delaware corporation

By: 
Name: 
Its: 
Date: 

EXHIBIT “F”
 
FORM OF LETTER OF CREDIT
 
[Name of Landlord]
_______________________
_______________________

Date: _______________  Letter of Credit No.: ___________
Expiration Date: ________________

We hereby establish our irrevocable letter of credit in your favor for the
account of ____________________ (“Landlord”) available by your draft(s) drawn on
us payable at sight not to exceed a total of
_____________________________________ (_____________________) when accompanied
by this letter of credit and the following documents.
 

1)
A signed and dated certificate purported to be executed by Landlord or its
representative worded as follows:

“The undersigned, an authorized representative of the beneficiary (the
“Beneficiary”) of __________ Letter of Credit Number ________ (the “Letter of
Credit”), hereby certifies that (a) a draw event has occurred under that certain
Lease Agreement dated ______ between __________, its successors, assignees, and
transferees, as Landlord, and __________ as Tenant, and (b) the Beneficiary is
entitled to draw on the Letter of Credit as a result thereof.”

2)
The original letter of credit must accompany all drafts unless a partial draw is
presented, in which case the original must accompany the final draft.

 
Partial drawings are permitted, with the letter of credit being reduced, without
amendment, by the amount(s) drawn hereunder.
 
This letter of credit shall expire at 2:00 p.m. at the office of
____________________________ on the expiration date, but shall be automatically
extended, without written amendment, to _________ of each succeeding calendar
year unless we have sent written notice to you at your address above, or at such
other address as you designate to us in writing at our address set forth herein,
that we elect not to renew this Letter of Credit beyond the expiration date
specified in such notice, which expiration date shall be __________ or any
subsequent _________, and will be not less than thirty (30) days after the date
we send you such notice. If we do not give such notice of non-renewal, within
the 30-day period before the expiration date of this Letter of Credit, we will,
within five (5) business days after receipt of a request from you, confirm in
writing the date to which it has been extended. If we send you the
aforementioned notice of non-renewal, you may also draw upon this Letter of
Credit by presentation to us at our address, on or before the expiration date
specified in such notice, of your draft drawn on us at sight accompanied by your
signed and dated statement worded as follows:
 
“The undersigned, an authorized representative of the beneficiary (the
“Beneficiary”) of __________ Letter of Credit Number ________ (the “Letter of
Credit”), hereby certifies that (a) Beneficiary has received notice from
__________ that the Letter of Credit will not be renewed beyond its current
expiration date, and (b) __________ has failed to secure and deliver to

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Beneficiary a replacement letter of credit in form and substance satisfactory to
Beneficiary.”

This letter of credit is transferable and may be transferred by the beneficiary
hereof to any successor or assignee of such beneficiary’s interest in the Lease
or to any lender obtaining a lien or security interest in the property covered
by the Lease; and may be successively so transferred. Each draft hereunder by
any assignee or successor shall be accompanied by a copy of the fully executed
documents or judicial orders evidencing such encumbrance, assignment or
transfer.
 
IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE AUTOMATICALLY
EXTENDED FOR ADDITIONAL TWELVE-MONTH PERIODS THROUGH ______________[INSERT A
DATE WHICH IS AT LEAST THIRTY (30) DAYS AFTER THE EXPIRATION OF THE TERM OF THE
LEASE], AND WE HEREBY AGREE TO GIVE YOU WRITTEN NOTICE OF SUCH EXTENSIONS IN
WRITING BY THE ____ DAY OF ____________ [INSERT THE DAY AND THE MONTH THIS
LETTER OF CREDIT IS ISSUED] OF EACH YEAR DURING THE TERM HEREOF. IF FOR ANY
REASON WE DETERMINE THAT THIS LETTER OF CREDIT SHALL NOT BE EXTENDED, WE HEREBY
AGREE TO SEND YOU WRITTEN NOTICE THEREOF IN WRITING BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, AT LEAST THIRTY (30) DAYS PRIOR TO THE EXPIRATION DATE. IN
THE EVENT THIS CREDIT IS NOT EXTENDED FOR AN ADDITIONAL PERIOD AS PROVIDED
ABOVE, YOU MAY DRAW HEREUNDER. SUCH DRAWING IS TO BE MADE BY MEANS OF A DRAFT ON
US AT SIGHT, WHICH MUST BE PRESENTED TO US BEFORE THE THEN EXPIRATION DATE OF
THIS LETTER OF CREDIT. THIS LETTER OF CREDIT CANNOT BE MODIFIED OR REVOKED
WITHOUT YOUR CONSENT. THIS LETTER OF CREDIT IS PAYABLE IN MULTIPLE DRAFTS AND
SHALL BE TRANSFERABLE UPON OUR RECEIPT OF YOUR INSTRUCTIONS AND THE ORIGINAL OF
THIS LETTER OF CREDIT AND AMENDMENTS, IF ANY, WITHOUT ADDITIONAL CHARGE.

Any draft drawn hereunder must bear the legend “Drawn under
________________________ Letter of Credit Number __________ dated
____________________. Except so far as otherwise expressly stated, this letter
of credit is subject to the “Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Brochure No. 500.”
 
We hereby agree with you and all persons negotiating such drafts that all drafts
drawn and negotiated in compliance with the terms of this letter of credit will
be duly honored upon presentment and delivery of the documents specified above
[IN PERSON] or [by certified or registered mail] to ____________________________
located at ______________________________________
 
if negotiated not later that 2:00 p.m. on or before the expiration date shown
above.
 
If any instructions accompanying a drawing hereunder request that payment is to
be made by wire transfer to an account with us or at another bank, we and/or
such other bank may rely on an account number specified in such instructions
even if the number identifies a person or entity different from the Beneficiary
or the intended payee.
 
Very truly yours,

By _______________________________
Its _______________________________

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