Exhibit 10.33
OFFICE LEASE
 
 
LOGAN BUILDING LLC
 
“LANDLORD”
 
 
WITH
 
VISUALANT INCORPORATED
 
 
“TENANT”
 
 
 
BUILDING: LOGAN BUILDING
SUITES: 810 and 815
 
 
 
DATED: December 13, 2016
 
 
 
 
 
 
 
 
 

 
 
 

 
Table Of Contents
 

 
 
Page

SECTION 1: BASIC PROVISIONS
1
 
 
SECTION 2: PREMISES AND PREPARATION OF PREMISES
2
 
 
SECTION 3: TERM AND COMMENCEMENT
2
 
 
SECTION 4: BASE RENT AND ADDITIONAL RENT
3
 
 
SECTION 5: QUIET ENJOYMENT
5
 
 
SECTION 6: UTILITIES AND SERVICES
5
 
 
SECTION 7: DEPOSITS
6
 
 
SECTION 8: USE, COMPLIANCE WITH LAWS AND RULES
7
 
 
SECTION 9: MAINTENANCE AND REPAIRS
7
 
 
SECTION 10: ALTERATIONS AND LIENS
8

 
 
SECTION 11: INSURANCE AND WAIVER OF SUBROGATION
8
 
 
SECTION 12: CASUALTY DAMAGE
9
 
 
SECTION 13: CONDEMNATION
10
 
 
SECTION 14: ASSIGNMENT AND SUBLETTING
10
 
 
SECTION 15: PERSONAL PROPERTY, RENT AND OTHER TAXES
11
 
 
SECTION 16: TENANT’S DEFAULT; LANDLORD’S REMEDIES
12
 
 
SECTION 17: SUBORDINATION, ATTORNMENT AND LENDER PROTECTION
13
 
 
SECTION 18: ESTOPPEL CERTIFICATES
14
 
 
SECTION 19: RIGHTS RESERVED BY LANDLORD
14
 
 
SECTION 20: LANDLORD’S DEFAULT; REMEDIES
15
 
 
SECTION 21: RELEASE AND INDEMNITY
16
 
 
SECTION 22: RETURN OF POSSESSION
16
 
 
SECTION 23: HOLDING OVER
17
 
 
SECTION 24: NOTICES
17
 
 
SECTION 25: REAL ESTATE BROKERS
17
 
 
SECTION 26: NO WAIVER
17
 
 
SECTION 27: SAFETY AND SECURITY DEVICES, SERVICES AND PROGRAMS
18
 
 
SECTION 28: TELECOMMUNICATION LINES AND EQUIPMENT
18
 
 
SECTION 29: HAZARDOUS SUBSTANCES; DISRUPTIVE ACTIVITIES
19
 
 
SECTION 30: DISABILITIES ACTS
19
 
 
SECTION 31: DEFINITIONS
20
 
 
SECTION 32: OFFER
21
 
 
SECTION 33: MISCELLANEOUS
21
 
 
SECTION 34: ENTIRE AGREEMENT
23
 
 

 
 
i

 
 
EXHIBIT A: LEGAL DESCRIPTION OF PROPERTY
 
 
 
EXHIBIT B: FLOOR PLATE SHOWING PREMISES
 
 
 
EXHIBIT C: WORK LETTER
 
 
 
RIDER ONE: RULES
 
 
 
RIDER TWO: GREEN ADDENDUM
 

 
 
ii

 
OFFICE LEASE
 
THIS OFFICE LEASE (“Lease”) is made and entered into as of this 13th day of
December, 2016, by and between LOGAN BUILDING LLC, a Delaware limited liability
company (“Landlord”), and VISUALANT INCORPORATED, a Nevada corporation
(“Tenant”). In consideration of this Lease, Landlord and Tenant covenant and
agree as follows:
 
SECTION 1:  BASIC PROVISIONS
 
This Section contains the basic lease provisions between Landlord and Tenant.
 
A. Building: 
500 Union Street, Seattle, Washington 98101 (“Building”), located on a portion
of the real property legally described in Exhibit A attached hereto
(“Property”).
 
B. Premises: 
Suites 810 and 815 in the Building as identified in Exhibit B.
 
C. Commencement Date: 
January 1, 2017, subject to Section 3.
 
D. Expiration Date: 
January 31, 2022, subject to Section 3.
 
E. Rentable Area: 
The rentable area of the Premises shall be deemed to contain 943 rentable square
feet (“RSF”), subject to Section 31(O).
 
F. Tenant’s Share: 
00.80%, subject to Section 4 and Section 31(O).
 
G. Base Rent: 
From the Commencement Date through the Expiration Date, as further described in
Section 4, as follows:
 
Months 1 – 12*:

$34.00/RSF/year ($2,671.83 per month)
Months 13 – 24:
$35.00/RSF/year ($2,750.42 per month)
Months 25 – 36:
$36.00/RSF/year ($2,829.00 per month)
Months 37 – 48:
$37.00/RSF/year ($2,907.58 per month)
Months 49 – 60:
$38.00/RSF/year ($2,986.17 per month)
Month 61:
$39.00/RSF/year ($3,064.75 per month)
 
*Tenant shall be entitled to an abatement of Base Rent in the amount of
$2,671.83, which amount shall be credited against Base Rent for the first
calendar month of the Term.
 
H. Additional Rent: 
Tenant shall pay Tenant’s Share of Taxes and Tenant’s Share of Expenses in
excess of such amounts for the period September 1, 2016 – August 31, 2017 (“Base
Year”) as further described in Section 4.
 
I. Permitted Use: 
Executive and administrative office use, subject to Section 8.
 
J. Deposits: 
$5,070.00, which Landlord already holds and will not be increased, and shall be
subject to Section 7.
 
K. Parking: 
Tenants at the Logan Building may arrange for parking spaces at the neighboring
US Bank Center garage (“Garage”), subject to availability of parking spaces
within the Garage and payment of the Garage’s then applicable monthly rate.
 
L. Broker (if any): 
Scott Driver of Scott Driver & Co., P.S., as Tenant's broker
 
Oscar Oliveira, Damon McCartney and David Marks of Broderick Group, Inc., as
Landlord's broker
 
M. Guarantor(s): 
N/A.
 
N. Riders/Exhibits: 
Exhibit A (Property)
Exhibit B (Premises)
Exhibit C (Work Letter)
Rider One (Rules)
Rider Two (Green Addendum)
 
O. Landlord’s Notice Address (subject to Section 24):
 
Logan Building LLC
c/o Unico Properties LLC
Attn: Senior Vice President / CFO
1215 Fourth Avenue, Suite 600
Seattle, WA 98161
 
 
1

 
 
With a copy to:
 
Logan Building LLC
c/o Unico Properties LLC
Attn: Logan Building Property Manager
1215 Fourth Avenue, Suite 600
Seattle, WA 98161
 
P. Tenant’s Notice Address (subject to Section 24):
 
Visualant Incorporated
Attn: Office Manager
The Logan Building
500 Union Street, Suite 810
Seattle, WA 98101
 
Q. Rent Payments: 
Rent shall be paid to the following, or to such other parties and addresses as
to which Landlord shall provide advance notice:
 
Logan Building LLC
c/o Unico Properties LLC
Attn: Accounts Receivable
1215 Fourth Avenue, Suite 600
Seattle, WA 98161
 
The foregoing provisions shall be interpreted and applied in accordance with the
other provisions of this Lease. The terms of this Section, and the terms defined
in Section 31 and other Sections, shall have the meanings specified therefor
when used as capitalized terms in other provisions of this Lease or related
documentation (except as expressly provided to the contrary therein).
 
SECTION 2:   PREMISES AND PREPARATION OF PREMISES
 
A. Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises subject to the provisions herein contained. Tenant agrees
to accept the Premises “as is” without any agreements, representations,
understandings or obligations on the part of Landlord to construct any
improvements within the Premises other than the Tenant Improvements, if any,
described in Exhibit C, or to perform any repairs or maintenance to the Premises
or Building except as expressly provided under this Lease. Tenant further
acknowledges that, except as otherwise expressly stated in this Lease, Landlord
has not made any representation or warranty (express or implied) with respect to
the habitability, condition or suitability of the Premises, Building or Property
for Tenant’s purposes or any particular purpose.
 
B. Preparation of Premises. The obligations of Landlord and Tenant to perform
work and supply materials and labor to prepare the Premises for Tenant’s
occupancy shall be as set forth in Exhibit C attached hereto and incorporated
herein. Landlord’s obligation, if any, for completion of the Premises
(“Landlord’s Work”) shall be defined and limited by said Exhibit C, and Landlord
shall not be required to furnish or install any item not indicated thereon. Any
additional alterations or improvements to the Premises beyond those set forth on
Exhibit C shall be at Tenant’s sole cost and expense and subject to all
provisions of Section 10, including without limitation the prior approval of
Landlord. Taking possession of the Premises by Tenant shall be conclusive
evidence the Premises were, on that date, in good, clean and tenantable
condition and delivered in accordance with this Lease, unless set forth
otherwise in a mutually agreed upon written “punch list.”
 
C.           Governing Property Documents. The Property is subject to and
governed by that First Amended and Restated Pacific First Center/Logan Building
Agreement recorded under King County Recording No. 8704210116, as amended by any
other amendments thereto hereafter adopted (collectively, “Governing Property
Documents”). Tenant’s use of the Premises, Property and Common Areas, and rights
and interest in this Lease, all are subject to the Governing Property Documents,
and Tenant shall be responsible for complying with those requirements in the
Governing Property Documents applicable to Tenant’s use of the Premises.
Additions and modifications to Governing Property Documents shall be binding on
Tenant upon delivery of a copy of them to Tenant.
 
SECTION 3:  TERM AND COMMENCEMENT
 
A. Term and Confirmation. The term (“Term”) of this Lease shall commence on the
Commencement Date and end on the Expiration Date as specified in Section 1
above, unless sooner terminated as provided herein, subject to adjustment as
provided below and the other provisions hereof. If the Commencement Date is
advanced or postponed as provided below, the Expiration Date set forth in
Section 1 shall not be changed, unless Landlord so elects by notice to Tenant.
Tenant shall execute a confirmation of the Commencement Date and other matters
in such form as Landlord may reasonably request within ten (10) days after
requested (but nothing herein shall require Landlord to so request); any failure
to respond within such time shall be deemed an acceptance of the matters as set
forth in Landlord’s confirmation. If Tenant disagrees with Landlord’s adjustment
of the Commencement Date, Tenant shall pay Rent and perform all other
obligations commencing on the date determined by Landlord, subject to refund or
credit when the matter is resolved.
 
 
2

 
 
B. Adjustments to Commencement Date. The parties acknowledge that the
Commencement Date specified in Section 1 is an estimated date. This Lease shall
commence on the Commencement Date specified in Section 1 if Landlord’s Work is
Substantially Complete (as that term is defined in Exhibit C) by such date but
otherwise the Commencement Date shall be adjusted to be the first to occur of
the following events: (i) the date Landlord provides Tenant notice that
Landlord’s Work is Substantially Complete; (ii) the date on which Tenant takes
possession or commences beneficial occupancy of the Premises; or (iii) if
Substantial Completion of Landlord’s Work is delayed in whole or in part due to
Tenant Delay (as that term is defined in Exhibit C), then the date determined by
Landlord as the date upon which Landlord’s Work would have been Substantially
Complete, but for Tenant’s acts or omissions. In no event shall Landlord have
any liability for loss or damage to Tenant resulting in any delay in the
Commencement Date, nor shall Tenant have any right to terminate this Lease, and
Tenant’s sole recourse shall be the postponement of Rent and other obligations
until the Commencement Date is established as set forth above.
 
C. Early Access. If Landlord’s Work is Substantially Complete prior to the
Commencement Date specified in Section 1, upon reasonable notice from Tenant to
Landlord, Tenant shall be entitled to enter the Premises for fixturing and move
in purposes provided (i) Tenant shall not interfere with Landlord’s completion
of Landlord’s Work and shall coordinate its activities and comply with
Landlord’s directives, (ii) all provisions of this Lease other than those
relating to payment of Rent shall apply to any such pre-commencement entry
(including without limitation all insurance, indemnity and freedom from lien
provisions), and (iii) Tenant shall not beneficially occupy the Premises (or any
part thereof) or commence business operations from the Premises (or any part
thereof) during such period.
 
SECTION 4:  BASE RENT AND ADDITIONAL RENT
 
A. Base Rent. Subject to adjustment for expenses, taxes and required capital
expenditures as set forth in this Section 4, Tenant shall pay Landlord the
monthly Base Rent set forth in Section 1 in advance on or before the first day
of each calendar month during the Term. The Base Rent for any fractional month
occurring prior to the Rent Abatement Period and for the first full month of the
Lease Term which occurs after the expiration of the Rent Abatement Period shall
be paid by Tenant at the time of Tenant’s execution of this Lease.
 
B. Taxes and Expenses. Tenant shall pay Landlord “Tenant’s Share of Taxes” and
“Tenant’s Share of Expenses” in the manner described below. All such charges
shall be deemed to constitute “Additional Rent” which shall be deemed to accrue
uniformly during the calendar year in which the payment is due.
 
(i) During each calendar year after the Base Year identified in Section 1(H)
above, Tenant agrees to pay as “Additional Rent” for the Premises, “Tenant’s
Share” (defined below) of all increases in Taxes and Expenses incurred by
Landlord in the operation of the Building and Property, over the amount of the
Property Taxes and Expenses incurred by Landlord in the operation of the
Building and Property during the Base Year. For purposes of this Lease,
“Tenant’s Share” shall mean the ratio between the rentable area of the Premises
and the rentable area of the Building. Tenant’s Share, calculated based on the
initial square foot area of the Premises, is set forth in Section 1(F) above,
and is subject to adjustment as set forth in Section 31(O).
 
(ii) Prior to or promptly after the commencement of each calendar year following
the Base Year, Landlord shall give Tenant a written estimate of the anticipated
increases in Taxes and Expenses over the Base Year and Tenant’s Share of such
increases. Tenant shall pay such estimated amount to Landlord in equal monthly
installments, in advance, without deduction or offset, on or before the first
day of each calendar month, with the monthly installment of Base Rent payable in
accordance with Section 4(A) above. After the end of each calendar year,
Landlord shall furnish to Tenant a statement showing in reasonable detail the
actual increases over the Base Year in the Taxes and Expenses incurred by
Landlord during the applicable calendar year and Tenant’s Share thereof. If the
statement shows Tenant’s Share of the actual increases exceeds the amount of
Tenant’s estimated payments, within thirty (30) days after receiving the
statement, Tenant shall pay the amount of the deficiency to Landlord. If the
statement shows Tenant has overpaid, the amount of the excess shall be credited
against installments next coming due under this Section 4; provided, however
upon the expiration or earlier termination of the Lease Term, if Tenant is not
then in default under this Lease, Landlord shall refund the excess to Tenant.
 
(iii) If at any time during any calendar year of the Lease Term (other than the
Base Year) the Taxes applicable to the Building and Property change and/or any
information used by Landlord to calculate the estimated Expenses changes,
Tenant’s estimated share of such Taxes and/or Expenses, as applicable, may be
adjusted accordingly effective as of the month in which such changes become
effective, by written notice from Landlord to Tenant of the amount or estimated
amount of the change, the month in which effective, and Tenant’s Share thereof.
Tenant shall pay such increase to Landlord as a part of Tenant’s monthly
payments of estimated Taxes or Expenses as provided above, commencing with the
month following the month in which Tenant is notified of the adjustment.
 
 
3

 
 
(iv) For purposes of this Lease, the term “Expenses” means all costs of and
expenses paid or incurred by Landlord for maintaining, operating, repairing,
replacing and administering the Building and Property, including all Common
Areas and facilities and Systems and Equipment, and shall include the following
costs by way of illustration but not limitation: water and sewer charges;
insurance premiums; license, permit, and inspection fees; heat; light; power;
steam; janitorial and security services; labor; salaries; air conditioning;
landscaping; maintenance and repair of driveways and surface areas; supplies;
materials; equipment; tools; the cost of capital replacements (as opposed to
capital improvements); the cost of any capital improvements or modifications
made to the Building by Landlord that are intended to reduce Expenses, are
required under any Laws not applicable to the Building or Property or not in
effect at the time the Building was constructed, or are made for the general
benefit and convenience of all tenants of the Building; all property management
costs, including office rent for any property management office and professional
property management fees; legal and accounting expenses; and all other expenses
or charges which, in accordance with industry standard accounting and management
practices, would be considered an expense of maintaining, operating, repairing,
replacing or administering the Building or Property. Capital costs included in
Expenses shall be amortized over such reasonable period as Landlord shall
determine with a return on capital at the current market rate per annum on the
unamortized balance or at such higher rate as may have been paid by Landlord on
funds borrowed for the purpose of constructing such capital replacements or
improvements.
 
(v) For purposes of this Lease, the term “Taxes” means all real estate taxes or
personal property taxes and other taxes, surcharges and assessments, unforeseen
as well as foreseen, which are levied with respect to the Building and Property
and any improvements, fixtures and equipment and other property of Landlord,
real or personal, located in the Building or on the Property and used in
connection with the operation of the Building or Property and any tax, surcharge
or assessment which shall be levied in addition to or in lieu of real estate or
personal property taxes, other than taxes covered in Section 15. The term
“Taxes” shall also include any rental, excise, sales, transaction, privilege, or
other tax or levy, however denominated, imposed upon or measured by the rental
reserved hereunder or on Landlord’s business of leasing the Premises, excepting
only net income, inheritance, gift and franchise taxes.
 
(vi) Notwithstanding anything to the contrary contained above, as to each
specific category of expense which one or more tenants of the Building, at
Landlord’s sole discretion, either pays directly to third parties or
specifically reimburses to Landlord (e.g., separately metered utilities,
separately contracted janitorial service, property taxes directly reimbursed to
Landlord, etc.) such tenant(s) payments with respect thereto shall not be
included in Expenses for purposes of this Section 4, but Tenant’s Share of each
of such category of expense shall be adjusted by excluding from the denominator
thereof the rentable area of all such tenants paying such category of expense
directly to third parties or reimbursing the same directly to Landlord. Tenant
shall not enter into separate contracts to provide any specific utility or
service normally provided by the Building, without Landlord’s prior written
consent in Landlord’s sole discretion. Moreover, if Tenant pays or directly
reimburses Landlord for any such category of expense (which shall only be
Landlord’s prior consent), such category of expense shall be excluded from the
determination of Expenses for Tenant to the extent such expense was incurred
with respect to space in the Building actually leased to or occupied by other
Tenants.
 
(vii) Notwithstanding anything to the contrary contained above, Landlord shall
have the right, from time to time, to equitably allocate some or all of the
Expenses among different portions or occupants of the Building (“Cost Pools”),
in good faith and in its reasonable discretion. Such Cost Pools may include, but
shall not be limited to, the office space tenants of the Building, and the
retail space tenants of the Building. The Expenses within each such Cost Pool
shall be allocated and charged to the tenants within such Cost Pool reasonably,
in good faith and in an equitable manner.
 
(viii) If the average occupancy of the Building is less than ninety-five percent
(95%) during any calendar year, Landlord will, in accordance with industry
standard accounting and management practices, determine the amount of variable
Taxes and Expenses (i.e. those items which vary according to occupancy levels)
that would have been paid had the Property been ninety-five percent (95%)
occupied, and the amount so determined shall be deemed to have been the amount
of Taxes and Expenses for such year.
 
C. Prorations. If the Term commences on a day other than the first day of a
calendar month or ends on a day other than the last day of a calendar month, the
Base Rent and any other amounts payable on a monthly basis shall be prorated on
a per diem basis for such partial calendar months. If the Base Rent is scheduled
to increase under Section 1 other than on the first day of a calendar month, the
amount for such month shall be prorated on a per diem basis to reflect the
number of days of such month at the then current and increased rates,
respectively. If the Term commences other than on January 1, or ends other than
on December 31, Tenant’s obligations to pay amounts under this Section 4 towards
Taxes and Expenses for such first or final calendar years shall be prorated on a
per diem basis to reflect the portion of such years included in the Term.
 
D. Payments After Lease Term Ends. Tenant’s obligations to pay its share of
Taxes and Expenses (or any other amounts) as provided in this Lease accruing
during, or relating to, the period prior to expiration or earlier termination of
this Lease, shall survive such expiration or termination. Landlord may
reasonably estimate all or any of such obligations within a reasonable time
before, or anytime after, such expiration or termination. Tenant shall pay the
full amount of such estimate, and any additional amount due after the actual
amounts are determined, in each case within ten (10) days after Landlord sends a
statement therefor. If the actual amount is less than the amount Tenant pays as
an estimate, Landlord shall refund the difference within thirty (30) days after
such determination is made.
 
 
4

 
 
E. Landlord’s Accounting Practices and Records. Unless Tenant takes exception by
notice to Landlord within thirty (30) days after Landlord provides any statement
to Tenant for any item of Additional Rent, such statement shall be considered
final and binding on Tenant (except as to additional Expenses or Taxes not then
known or omitted by error). If Tenant takes exception by notice within such
time, Landlord may seek confirmation from Landlord’s independent certified
public accountant as to the proper amount of Taxes and Expenses determined in
accordance with sound accounting practices. In such case: (i) such confirmation
shall be considered final and binding on both parties (except as to additional
expenses or taxes not then known or omitted by error), and (ii) Tenant shall pay
Landlord for the cost of such confirmation, unless it shows that Taxes and
Expenses were overstated by at least five percent (5%). Pending resolution of
any such exceptions, Tenant shall pay all amounts shown on such Landlord’s
statement, subject to credit, refund or additional payment after any such
exceptions are resolved.
 
F. General Payment Matters. Base Rent, Additional Rent which includes without
limitation Tenant’s Share of Taxes, Tenant’s Share of Expenses and any other
amounts which Tenant is or becomes obligated to pay Landlord under this Lease or
other agreement entered in connection herewith, are sometimes herein referred to
collectively as “Rent,” and all remedies applicable to the nonpayment of Rent
shall be applicable thereto. Rent shall be paid in good funds and legal tender
of the United States of America without prior demand, deduction, recoupment,
set-off or counterclaim, and without relief from any valuation or appraisement
Laws. Rent obligations hereunder are independent covenants. In addition to all
other Landlord remedies (i) any Rent not paid by Tenant when due shall accrue
interest from the due date at the Default Rate until payment is received by
Landlord and (ii) in addition to such interest, Tenant shall pay Landlord a
service charge of two hundred fifty dollars ($250.00) or five percent (5%) of
the delinquent amount, whichever is greater, if any portion of Rent is not
received within five (5) business days after the due date. No delay by Landlord
in providing any Rent statement to Tenant shall be deemed a default by Landlord
or a waiver of Landlord’s right to require payment of Tenant’s obligations
hereunder including those for actual or estimated taxes, expenses or capital
expenditures. In no event shall a decrease in Taxes or Expenses, below their
respective Base Year levels, ever decrease the monthly Base Rent or give rise to
a credit in favor of Tenant. Landlord may apply payments received from Tenant to
any obligations of Tenant then accrued, without regard to such obligations as
may be designated by Tenant.
 
SECTION 5:  QUIET ENJOYMENT
 
Landlord agrees that if Tenant timely pays the Rent and performs the terms and
provisions hereunder, Tenant shall hold the Premises during the Term, free of
lawful claims by any party acting by or through Landlord, subject to all other
terms and provisions of this Lease.
 
SECTION 6:  UTILITIES AND SERVICES
 
A. Standard Landlord Utilities and Services. Provided Tenant is not in default
of this Lease, Landlord shall provide Tenant the following utilities and
services:
 
(i) Elevator service during Normal Business Hours and the service of at least
one elevator during all other hours.
 
(ii) Heating and cooling to maintain a temperature condition which in Landlord’s
judgment provides for comfortable occupancy of the Premises under normal
business operations during Normal Business Hours, but not Saturdays, Sundays or
those legal holidays generally observed in the State of Washington, provided
Tenant complies with Landlord’s instructions regarding use of window coverings
and thermostats and Tenant does not utilize heat generating machines or
equipment which affect the temperature otherwise maintained by the air cooling
system. Upon request Landlord shall make available at Tenant’s expense
after-hours heat or air cooling. The minimum use of after-hours heat or air
cooling and the cost thereof shall be determined by Landlord and confirmed in
writing to Tenant, as the same may change from time to time.
 
(iii) Water for drinking, lavatory, and toilet purposes.
 
(iv) Electricity for building-standard overhead office lighting fixtures, and
equipment and accessories customary for offices (up to 280 hours per month),
where: (a) the connected electrical load of all of the same does not exceed an
average of 4 watts per usable square foot of the Premises (or such lesser amount
as may be available, based on the safe and lawful capacity of the electrical
circuit(s) and facilities serving the Premises), (b) the electricity is at
nominal 120 volts, single phase (or 110 volts, depending on available service in
the Building), and (c) the systems and equipment are suitable, the safe and
lawful capacity thereof is not exceeded, and sufficient capacity remains at all
times for other existing and future tenants, as determined in Landlord’s
reasonable discretion.
 
(v) Janitorial service. Janitorial service as customary for comparable buildings
within the market which includes vacuum cleaning of carpets and cleaning of
Building standard vinyl composition tile, but no other services with respect to
carpets or nonstandard floor coverings.
 
 
5

 
 
(vi) Maintain the windows, doors, floors and walls (exclusive of coverings),
ceilings, plumbing and plumbing fixtures, and electrical distribution system and
lighting fixtures in good condition and repair, except for damage caused by
Tenant, its employees, agents, invitees or visitors, except that such service
will not be provided as to any of the foregoing items that are not standard for
the Building.
 
(vii) Replacement of burned out fluorescent lamps in light fixtures which are
standard for the Building. Burned out lamps or other light sources in fixtures
which are not standard for the Building will be replaced by Landlord at Tenant’s
expense.
 
B. Interruptions. Landlord shall use reasonable diligence to remedy an
interruption in the furnishing of such services and utilities. If, however, any
governmental authority imposes regulations, controls or other restrictions upon
Landlord or the Building which would require a change in the services provided
by Landlord under this Lease, Landlord may comply with such regulations,
controls or other restrictions, including without limitation, curtailment,
rationing or restrictions on the use of electricity or any other form of energy
serving the Premises. Tenant will cooperate and do such things as are reasonably
necessary to enable Landlord to comply with such regulations, controls or other
restrictions.
 
C. Non-Standard Usage. Whenever heat generating machines or equipment or
lighting other than building standard lights 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 to Landlord upon
billing by Landlord. 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 during Normal Business Hours (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. High power usage equipment includes
without limitation, data processing machines, punch card machines, computers and
machines which 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 (i) Tenant confirms in writing its
obligation to pay the additional charges necessitated by such equipment and such
equipment does not adversely affect operation of the Building, and (ii) the
Building electrical capacity to the floor(s) containing the Premises will not be
exceeded. At Landlord’s option, separate meters for such utilities and services
may be installed for the Premises and Tenant upon demand therefor, shall
immediately pay Landlord for the installation, maintenance, repair and
replacement of such meters.
 
D. Limitation. Landlord does not warrant that any of the services and utilities
referred to in this Section 6 will be free from interruption. Interruption of
services and utilities shall not be deemed an eviction or disturbance of
Tenant’s use and possession of the Premises or any part thereof or render
Landlord liable to Tenant for damages or loss of any kind, or relieve Tenant
from performance of Tenant’s obligations under this Lease.
 
E. Utility Providers. Notwithstanding anything to the contrary in this Lease,
Landlord shall have the sole, exclusive and absolute right to determine, select
and contract with utility company or companies that will provide electricity and
other basic utility service to the Building, Property and Premises. If permitted
by Law, during the Term of this Lease, Landlord shall have the right at any
time, and from time to time, to either contract for services from a different
company or companies providing electricity or other basic utility service (each
such company hereinafter an “Alternate Service Provider”) or continue to
contract for service from the service provider(s) that is providing such utility
service to the Building, Property or Premises at the Commencement Date (each the
“Existing Service Provider”). Tenant shall cooperate with Landlord, the Existing
Service Provider and any Alternate Service Provider at all times and, as
reasonably necessary, shall allow Landlord, the Existing Service Provider and
any Alternate Service Provider access to the Building’s utility lines, plumbing,
feeders, risers, wiring, and any other machinery or utility access ways within
the Premises.
 
SECTION 7:   DEPOSITS
 
A. Security Deposit. Upon execution of this Lease, Tenant shall deposit a
security deposit in the amount set forth in Section 1 with Landlord. If Tenant
is in default, Landlord can use the security deposit or any portion of it to
cure the default or to compensate Landlord for any damages sustained by Landlord
resulting from Tenant’s default. Upon demand, Tenant shall immediately pay to
Landlord a sum equal to the portion of the security deposit expended or applied
by Landlord to restore the security deposit to its full amount. In no event will
Tenant have the right to apply any part of the security deposit to any Rent or
other sums due under this Lease. If Tenant is not in default at the expiration
or termination of this Lease, Landlord shall return the security deposit to
Tenant. Landlord’s obligations with respect to the deposit are those of a debtor
and not of a trustee, and Landlord can commingle the security deposit with
Landlord’s general funds. Landlord shall not be required to pay Tenant interest
on the deposit. Landlord shall be entitled to immediately endorse and cash
Tenant’s prepaid deposit; however, such endorsement and cashing shall not
constitute Landlord’s acceptance of this Lease. In the event Landlord does not
accept this Lease, Landlord shall return said prepaid deposit. In addition,
Tenant hereby grants to Landlord a security interest in all of Tenant’s tangible
personal property and fixtures located at the Premises, and in all of Tenant’s
intangible property used in regard to, or arising from, business conducted at or
from the Premises, including but not limited to all equipment, inventory,
accounts, furniture, trade fixtures, instruments, general intangibles and all
other rights to payment, and the proceeds and products therefrom, and all after
acquired property. This Security Agreement and this grant of a security interest
is given to secure Tenant’s performance and payment of all Rent and all other
obligations of Tenant to Landlord under this Lease. Tenant hereby appoints
Landlord as its attorney-in-fact for the limited purpose of preparing, executing
and filing on Tenant’s behalf all appropriate UCC financing statements Landlord
deems reasonably necessary to perfect the security interest granted Landlord
hereunder, all without further notice to Tenant.
 
 
6

 
 
SECTION 8:   USE, COMPLIANCE WITH LAWS AND RULES
 
A. Use of Premises and Compliance With Laws. Tenant shall use the Premises
solely for the purposes set forth in Section 1 and for no other purpose without
obtaining the prior written consent of Landlord, which shall not be unreasonably
withheld for uses consistent with Landlord’s then existing use criteria for the
Building. Tenant acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises or with
respect to the suitability of the Premises or the Building for the conduct of
Tenant’s business, nor has Landlord agreed to undertake any modification,
alteration or improvement to the Premises or the Building, except as provided in
writing in this Lease. Tenant acknowledges that Landlord may from time to time,
at its sole discretion, make such modifications, alterations, repairs, deletions
or improvements to the Building or Property as Landlord may deem necessary or
desirable, without compensation or notice to Tenant, provided that such
alterations, repairs, deletions or improvements shall not materially adversely
affect Tenant’s use of the Premises during Normal Business Hours and in no event
shall Landlord be liable for any consequential damages. Tenant shall promptly
comply with all Laws affecting the Premises and the Building, as well as the
Rules (defined below), and to any reasonable modifications to the Rules as
Landlord may adopt from time to time. Tenant acknowledges that, except for
Landlord’s obligations pursuant to Sections 9 and 30, Tenant is solely
responsible for ensuring that the Premises comply with any and all Laws
applicable to Tenant’s use of and conduct of business on the Premises, and that
Tenant is solely responsible for any alterations or improvements that may be
required by such Laws, now existing or hereafter adopted. Tenant shall not do or
permit anything to be done in or about the Premises or bring or keep anything in
the Premises that will in any way increase the premiums paid by Landlord on its
insurance related to the Building or which will in any way increase the premiums
for fire or casualty insurance carried by other tenants in the Building. Tenant
will not perform any act or carry on any practices that may injure the Premises
or the Building that may be a nuisance or menace to other tenants in the
Building or that shall in any way interfere with the quiet enjoyment of such
other tenants. Tenant shall not do anything on the Premises which will overload
any existing parking or service to the Premises.
 
B. Rules. Tenant shall comply with the Rules set forth in Rider One attached
hereto (the “Rules”) in addition to all other terms of this Lease. Landlord
shall have the right, by notice to Tenant or by posting at the Building, to
reasonably amend such Rules and supplement the same with other reasonable Rules
relating to the Building or Property, or the promotion of safety, care,
efficiency, cleanliness or good order therein. Nothing herein shall be construed
to give Tenant or any other Person any claim, demand or cause of action against
Landlord arising out of the violation of such Rules by any other tenant or
visitor of the Building or Property, or out of the enforcement, modification or
waiver of the Rules by Landlord in any particular instance.
 
SECTION 9:   MAINTENANCE AND REPAIRS
 
Unless expressly provided otherwise in this Lease, and in addition to the
provisions of Section 6(A)(vi), Landlord shall maintain, in good condition, the
Common Areas of the Building, the structural parts of the Building which shall
include only the foundations, bearing and exterior walls, subflooring, gutters,
downspouts, and the roof of the Building and the Building Systems and Equipment;
provided, in the event any such replacements, repairs or maintenance are caused
by or result from Tenant’s excessive or improper use or occupation thereof or
which are caused by or result from the negligence or improper conduct of Tenant,
its agents, employees or invitees, the cost of such repairs shall be paid solely
by Tenant and Tenant shall pay the cost thereof within ten (10) days of notice
from Landlord. Except as provided above, and subject to Section 10 of this
Lease, Tenant shall maintain and repair the Premises in neat, clean, sanitary
and good condition, including, without limitation, maintaining and repairing all
walls, storefronts, ceilings, interior and exterior doors, exterior and interior
windows and fixtures, Premises’ specific systems and equipment, and interior
plumbing serving the Premises as well as any damage to the Building, Property or
Premises caused by Tenant, its agents, employees or invitees. If Tenant shall
fail to keep and preserve the Premises in said condition and state or repair,
Landlord may, at its option (but with no obligation) put or cause the same to be
put into the condition and state of repair agreed upon, and in such case Tenant,
on demand, shall pay the cost thereof.
 
 
7

 
 
SECTION 10:   ALTERATIONS AND LIENS
 
A. Alterations. Subsequent to the completion of any Landlord’s Work pursuant to
Section 2, Tenant shall not attach any fixtures, equipment or other items to the
Premises, or paint or make any other additions, changes, alterations, repairs or
improvements (collectively hereinafter “alterations”) to the Premises, Building
or Property without Landlord’s prior written consent, which with respect to
alterations to the Premises will not be unreasonably withheld so long as Tenant
is not then, nor has been, in default of this Lease (beyond any applicable cure
period). If Landlord consents to any alteration, Landlord may post notices of
nonresponsibility in accordance with Law. Any alterations so made shall remain
on and be surrendered with the Premises upon expiration or earlier termination
of this Lease, except that Landlord may, within thirty (30) days before or
thirty (30) days after expiration or earlier termination hereof elect to require
Tenant to remove any or all alterations at Tenant’s sole costs and expense. At
the time Tenant submits plans for requested alterations to Landlord for
Landlord’s approval, Tenant may request Landlord to identify which alterations
Landlord may require Tenant to remove at the termination of or expiration of
this Lease, and Landlord shall make such identification simultaneous with its
approval (if any) of the alterations. If Landlord elects to require removal of
alterations, then at its own and sole cost Tenant shall restore the Premises to
the condition designated by Landlord in its election, before the last day of the
term or within thirty (30) days after notice of its election is given, whichever
is later.
 
B. Performance. In the event Landlord consents in writing to Tenant’s requested
alteration of the Premises, Tenant shall only contract with a contractor
approved by Landlord for the construction of such alterations, shall secure all
appropriate governmental approvals and permits and shall complete such
alterations with due diligence, in a neat, clean, good and workmanlike manner
and in strict compliance with the plans and specifications approved by Landlord.
All such construction shall be performed in a manner which shall not interfere
with the occupancy of the other tenants of the Building. All cost, expenses and
fees related to or arising from construction of any alteration shall be paid by
Tenant prior to delinquency. There shall also be included within the cost of any
such alteration work (whether for initial tenant improvements or for any
subsequent alteration) a fee to Landlord for Tenant’s use of Landlord’s
personnel involved in the supervision, coordination, inspection and the like
pertaining to such work. Said fee shall be ten percent (10%) of the total cost
of the alteration work (including costs of plans and permits), plus Landlord’s
out-of-pocket costs (if any), which shall be paid by Tenant within ten (10) days
after presentment by Landlord of an invoice therefor. Landlord may impose
additional reasonable conditions and rules respecting the manner and times in
which such alteration work may be performed.
 
C. Liens. Tenant shall pay all costs for alterations when due. Tenant shall keep
the Property, Building, Premises and this Lease free from any mechanic’s,
materialman’s, architect’s, engineer’s or similar liens or encumbrances, and any
claims therefor, or stop or violation notices, in connection with any
alteration. Tenant shall remove any such claim, lien or encumbrance, or stop or
violation notices of record, by bond or otherwise within ten (10) days after
notice by Landlord. If Tenant fails to do so, such failure shall constitute a
default by Tenant, and Landlord may, in addition to any other remedy, pay the
amount (or any portion thereof) or take such other action as Landlord deems
necessary to remove such claim, lien or encumbrance, or stop or violation
notices, without being responsible for investigating the validity thereof. The
amount so paid and costs incurred by Landlord shall be deemed additional Rent
under this Lease payable upon demand, without limitation as to other remedies
available to Landlord. Landlord may, in its discretion, require Tenant to obtain
a lien and completion bond or some alternate form of security satisfactory to
Landlord in an amount sufficient to ensure the lien-free completion of such
alterations and naming Landlord as a co-obligee. Nothing contained in this Lease
shall authorize Tenant to do any act which shall subject Landlord’s title to, or
any Lender’s interest in, the Building, Property or Premises to any such claims,
liens or encumbrances, or stop or violation notices, whether claimed pursuant to
statute or other Law or express or implied contract.
 
D. Construction Insurance. In addition to the requirements of Section 11 below,
in the event that Tenant makes any alterations, prior to the commencement of
such alterations, Tenant shall provide Landlord with evidence that Tenant or its
general contractor, as appropriate, carries “Builder’s All Risk” insurance or
its equivalent in an amount approved by Landlord covering the construction of
such alterations, and such other insurance as Landlord may reasonably require,
it being understood and agreed that all of such alterations shall be insured by
Tenant pursuant to Section 10 of this Lease immediately upon completion thereof.
 
SECTION 11:  INSURANCE AND WAIVER OF SUBROGATION
 
A. Insurance. During the term of this Lease, Tenant, at its sole cost and
expense, shall continuously maintain the following types of insurance
coverages:  (i) All Risk or Causes of Loss - Special Form property insurance,
including fire and extended coverage, sprinkler leakage, vandalism, malicious
mischief, wind and flood coverage, covering full replacement value of all of
Tenant’s personal property, trade fixtures and improvements and alterations in
and to the Premises, with coverages that also include “Business Personal
Property” and “Business Income Coverage” covering at least one year of
anticipated income; (ii) both worker’s compensation insurance to the applicable
statutory limit, if any, and employer’s liability insurance to the limit of
$1,000,000 per occurrence; (iii) commercial general liability insurance
(occurrence based) insuring Tenant against any liability arising out of its use,
occupancy or maintenance of the Premises or Building, or the business operated
by Tenant pursuant to the Lease, and providing coverage for death, bodily injury
and disease, property damage or destruction (including loss of use), products
and completed operations liability, contractual liability which includes all of
Tenant’s indemnity obligations under this Lease (and the certificate evidencing
Tenant’s insurance coverage shall state that the insurance includes the
liability assumed by Tenant under this Lease), fire legal liability and
advertising injury liability damage with a combined single limit of no less than
$5,000,000 (or in the alternative a primary policy combined single limit of
$2,000,000 with an Excess Limits (Umbrella) Policy in the amount of no less than
$3,000,000); and (iv) Business Automobile Liability Insurance for Tenant owned
vehicles (only) in the amount of $1,000,000 combined single limit (property
damage and liability). The amount of any deductible or self-insured retention
for the coverages described in (i) and (iii) shall not exceed Five Thousand
Dollars ($5,000.00), and any deductible or self-insurance provisions under any
other insurance policies required to be maintained by Tenant shall be subject to
Landlord’s prior written approval, such approval not to be unreasonably
withheld.
 
 
8

 
 
B. Additional Requirements.
 
(i) All insurance required to be carried by Tenant hereunder shall include the
following provisions: (a) shall name Landlord, Landlord's property manager, and
Landlord’s lender (if any) as additional insureds; (b) shall release Landlord
(and its property manager and lender, if any) from any claims for damage to
business or to any person or the Premises, the Building and the Property and to
Tenant’s fixtures, personal property, improvements and alterations in or on the
Premises, caused by or resulting from risks insured against under any insurance
policy carried by Tenant in force at the time of such damage; (c) shall be
issued by Insurance companies authorized to do business in the State of
Washington, with policyholder ratings not lower than “A-” and financial ratings
not lower than “VII” in Best’s Insurance Guide (latest edition in effect as of
the date of this Lease and subsequently in effect as of the date of renewal of
the required policies); (d) Shall be issued as (and separately endorsed as) a
primary and noncontributory policy as such policies apply to Landlord (except
for workers compensation); and (e) Shall contain an endorsement requiring at
least thirty (30) days prior written notice of cancellation to Landlord and
Landlord’s lender (if any), before cancellation or change in coverage, scope or
amount of any policy. Tenant shall deliver certificates of such policies
together with evidence of payment of all current premiums to Landlord within
thirty (30) days of execution of this Lease; provided, if such certificates do
not on their face evidence such terms, Tenant shall also provide full copies of
such endorsements or policies as necessary to evidence that all of the coverage
requirements of this Section 11 have been satisfied by Tenant. Any certificate
of insurance shall designate Tenant as the insured, specify the Premises
location, list Landlord (and its property manager and lender, if any) as
additional insureds (with the additional insured endorsement attached thereto),
and list Landlord with Landlord’s current address as “Certificate Holder.” If
certificates are supplied (rather than the policies), Tenant shall allow
Landlord, at all reasonable times, to inspect the policies of insurance required
herein. Tenant shall take all necessary steps to renew all insurance at least
thirty (30) days prior to such insurance expiration dates and shall provide
Landlord a copy of the renewed certificate, prior to said policy’s expiration
date. If Tenant fails at any time to maintain the insurance required by this
Lease, and fails to cure such default within five (5) business days of written
notice from Landlord then, in addition to all other remedies available under
this Lease and applicable Law, Landlord may purchase such insurance on Tenant’s
behalf and the cost of such insurance shall be Additional Rent due within ten
(10) days of written invoice from Landlord to Tenant.
 
(ii)           It is expressly understood and agreed that the coverages required
by this Section 11 represent Landlord’s minimum requirements and such are not to
be construed to void or limit Tenant’s obligations contained in this Lease,
including without limitation Tenant’s indemnity obligations hereunder. Neither
shall (a) the insolvency, bankruptcy or failure of any insurance company
carrying Tenant, (b) the failure of any insurance company to pay claims
occurring nor (c) any exclusion from or insufficiency of coverage be held to
affect, negate or waive any of Tenant’s indemnity obligations under this Lease
or any other provision of this Lease. Landlord reserves the right to require
Tenant provide evidence of any additional insurance as it reasonably deems
appropriate, as well as the right to require an increase in the amounts of
insurance or the insurance coverages as Landlord may reasonably request from
time to time, but not in excess of the requirements of prudent landlords or
lenders for similar tenants occupying similar premises in the Puget Sound
metropolitan area. Tenant’s occupancy of the Premises without delivering the
certificates of insurance shall not constitute a waiver of Tenant’s obligations
to provide the required coverages. If Tenant provides to Landlord a certificate
that does not evidence the coverages required herein, or that is faulty in any
respect, such shall not constitute a waiver of Tenant’s obligations to provide
the proper insurance
 
C. Waiver of Subrogation. Landlord and Tenant release and relieve the other, and
waive the entire right of recovery for loss or damage to property located within
or constituting a part or all of the Premises, the Building or the Property to
the extent that the loss or damage is actually covered (and claim amount
recovered) by commercial insurance carried by either party and in force at the
time of such loss or damage. This waiver applies whether or not the loss is due
to the negligent acts or omissions of Landlord or Tenant, or their respective
officers, directors, employees, agents, contractors, or invitees. Each of
Landlord and Tenant shall have their respective property insurers endorse the
applicable insurance policies to reflect the foregoing waiver of claims,
provided, however, that the endorsement shall not be required if the applicable
policy of insurance permits the named insured to waive rights of subrogation on
a blanket basis, in which case the blanket waiver shall be acceptable.
 
SECTION 12:  CASUALTY DAMAGE
 
 
 
 
 
9

 
 
In the event the Building or Premises shall be destroyed or rendered
untenantable, either wholly or in part, by fire or other casualty, Landlord may,
at its option, restore the Building or Premises to as near their previous
condition as is reasonably possible and in the meantime the Rent shall be abated
in the same proportion as the untenantable portion of the Premises bears to the
whole thereof, provided, such abatement (i) shall apply only to the extent the
Premises are untenantable for the purposes permitted under this Lease and not
used by Tenant as a result thereof, and (ii) shall not apply if Tenant or any
other occupant of the Premises or any of their agents, employees, invitees,
transferees or contractors caused the damage. Unless Landlord, within sixty (60)
days after the happening of any such casualty, shall notify Tenant of its
election to so restore, this Lease shall thereupon terminate and end, provided,
if in Landlord’s estimation the Premises cannot be restored within one hundred
twenty (120) days following such destruction, Landlord shall notify Tenant and
Tenant may terminate this Lease (regardless of Landlord’s intent to restore) by
delivery of notice to Landlord within thirty (30) days of Landlord’s notice.
Such restoration by Landlord shall not include replacement of furniture,
equipment or other items that do not become part of the Building or any
improvements to the Premises in excess of those provided for in the allowance
for building standard items. Tenant agrees that the abatement of Rent as
provided above shall be Tenant’s sole and exclusive recourse in the event of
such damage, and Tenant waives any other rights Tenant may have under applicable
Law to perform repairs or terminate the Lease by reason of damage to the
Building or Premises.
 
SECTION 13:  CONDEMNATION
 
If at least fifty percent (50%) of the rentable area of the Premises shall be
taken by power of eminent domain or condemned by a competent authority or by
conveyance in lieu thereof for public or quasi-public use (“Condemnation”),
including any temporary taking for a period of one year or longer, this Lease
shall terminate on the date possession for such use is so taken. If: (i) less
than fifty percent (50%) of the Premises is taken, but the taking includes or
affects a material portion of the Building or Property, or the economical
operation thereof, (ii) less than fifty percent (50%) of the Premises are taken
and in the reasonable judgment of Landlord the remaining Premises are not usable
for the business of Tenant, or (iii) the taking is temporary but will be in
effect for more than thirty (30) days, then in either such event, Landlord may
elect to terminate this Lease upon at least thirty (30) days’ prior notice to
Tenant. The parties further agree that: (a) if this Lease is terminated, all
Rent shall be apportioned as of the date of such termination or the date of such
taking, whichever shall first occur, (b) if the taking is temporary, Rent shall
not be abated for the period of the taking, but Tenant may seek a condemnation
award therefor (and the Term shall not be extended thereby), and (c) if this
Lease is not terminated but any part of the Premises is permanently taken, the
Rent shall be proportionately abated based on the square footage of the Premises
so taken. Landlord shall be entitled to receive the entire award or payment in
connection with such Condemnation and Tenant hereby assigns to Landlord any
interest therein for the value of Tenant’s unexpired leasehold estate or any
other claim and waives any right to participate therein, and Tenant shall make
no claim against Landlord for termination of the leasehold interest or
interference with Tenant’s business. Tenant, however, shall have the right to
claim damages from the condemning authority for a temporary taking of the
leasehold as described above, for moving expenses and any taking of Tenant’s
personal property and for the interruption to Tenant’s business, but only if
such damages are awarded separately in the eminent domain proceeding and not as
part or in diminution of the damages recovered by Landlord.
 
SECTION 14:  ASSIGNMENT AND SUBLETTING
 
A. Consent Required. Tenant shall not, without the prior written consent of
Landlord, assign this Lease or any interest therein, or sublet the Premises or
any part thereof, or permit the use of the Premises by any party other than
Tenant or otherwise transfer this Lease (collectively “Transfer”). Such consent
shall be entirely discretionary with Landlord, except as otherwise provided in
this Section 14. Consent to one such Transfer shall not destroy or waive this
provision, and all subsequent Transfers shall likewise be made only upon
obtaining prior written consent of Landlord. Subtenants or assignees shall
become directly liable to Landlord for all obligations of Tenant hereunder,
without relieving Tenant of any liability.
 
B. Transfers. If Tenant is a corporation, then any Transfer of this Lease by
merger, consolidation or liquidation, or any change in the ownership of, or
power to vote, the majority of its outstanding voting stock, shall constitute an
assignment for the purpose of this Section 14. If Tenant is a partnership or
limited liability company, any Transfer of this Lease by merger, consolidation,
liquidation or dissolution, or any change in the ownership of a majority of the
partnership or membership interests, shall constitute an assignment for the
purposes of this Section 14. An assignment forbidden within the meaning of this
Section includes without limitation one or more sales or Transfers, by operation
of law or otherwise, or creation of new stock, by which an aggregate of more
than fifty percent (50%) of Tenant’s stock shall be vested in a party or parties
who are nonstockholders as of the date hereof. This Section 14(B) shall not
apply if Tenant’s stock is listed on a recognized security exchange or if at
least eighty percent (80%) of its stock is owned by a corporation whose stock is
listed on a recognized security exchange.
 
 
 
10

 
 
C. Recapture. If Tenant at any time desires to Transfer this Lease or any part
thereof, it shall first notify Landlord in writing of its desire to do so, and
offer Landlord the right to recapture, at the per square foot rental for the
space then applicable pursuant to this Lease or the rental which Tenant proposed
to obtain whichever is lower, for all or any part of the Premises which Tenant
desires to assign or sublet. Tenant’s notice to Landlord shall specify (i) the
name and business of the proposed assignee or sublessee, (ii) the amount and
location of this space affected, (iii) the proposed effective date and duration
of the subletting or assignment, and (iv) the proposed rental to be paid to
Tenant by such sublessee or assignee. Landlord, upon receipt of such notice,
shall have the option, to be exercised within sixty (60) days from the date of
the receipt of such notice, to require Tenant to execute an assignment to
Landlord of this Lease (if Tenant desires to assign this Lease) or a sublease to
Landlord of the Premises or such portion thereof as Tenant desires to sublet
with the right of Landlord to sublease to others, or anyone designated by
Landlord. If Landlord exercises such option and such assignment or sublease is
at the rental specified in this Lease, Tenant shall be released of all further
liability hereunder, from and after the effective date of such assignment or
sublease, with respect to that portion of the Premises included therein. If
Landlord does not exercise such option within such time, Tenant may thereafter
assign this Lease or sublet the premises involved, provided Landlord consents
thereto, but at a rental not less than offered to Landlord in the notice and not
later than ninety (90) days after delivery of the aforesaid notice unless a
further notice is given. In the event Landlord does not exercise its right to
terminate this Lease or to sublet a portion of the Premises from Tenant and
Landlord has granted its written consent, Tenant may assign this Lease or sublet
all or a portion of the Premises in accordance with Landlord’s consent. Any Rent
accruing to Tenant as a result of such assignment or sublease which is in excess
or the Rent then being paid by Tenant, or in excess of the pro rata share of
Rent then being paid by Tenant for the portion of the Premises being sublet,
shall be paid by Tenant to Landlord monthly as additional rent.
 
D. Costs. Whether or not Landlord consents to a proposed Transfer (or exercises
its right to recapture), Tenant shall reimburse Landlord on demand for any and
all costs that may be incurred by Landlord in connection with any proposed
Transfer including, without limitation, the cost of investigating the
acceptability of the proposed transferee and Landlord’s reasonable attorneys’
fees incurred in connection with each proposed Transfer.
 
E. Notice. Any notice or request to Landlord with respect to a proposed
assignment or sublease shall contain the name of the proposed assignee or
subtenant (collectively “Transferee”), the nature of the proposed Transferee’s
business to be conducted at the Premises, and the terms and provisions of the
proposed Transfer. Tenant shall also provide Landlord with a copy of the
proposed Transfer documents when available, and such financial and other
information with respect to the proposed Transferee and Transfer that Landlord
may reasonably require.
 
F. Consent. Notwithstanding the foregoing, in the event of a proposed Transfer,
if Landlord does not exercise its option under Section 14(C), then Landlord will
not unreasonably withhold its consent thereto if (a) Tenant is not then, nor has
been, in default of this Lease (beyond any applicable cure period), (b) the
proposed Transferee will continuously occupy and use the Premises for the term
of the Transfer, (c) the use by the proposed Transferee will be the same as
Tenant’s use of the Premises, (d) the proposed Transferee is reputable and of
sound financial condition, (e) the Transfer will not directly or indirectly
cause Landlord to be in breach of any contractual obligation, and (f) the
proposed Transferee is not an existing tenant or subtenant of any other premises
located on the Property. In all other cases, Landlord may withhold consent in
its sole discretion.
 
G. Terms; Transfer Premium. Any option(s) granted to Tenant in this Lease or any
option(s) granted to Tenant in any amendments to this Lease, to the extent that
said option(s) have not been exercised, shall terminate and be voided in the
event this Lease is assigned, or any part of the Premises are sublet, or
Tenant’s interest in the Premises are otherwise Transferred, unless otherwise
agreed to by Lanadlord. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined
in this Section 14(G), received by Tenant from such Transferee. “Transfer
Premium” shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred, after deducting the reasonable expenses incurred by Tenant for (i)
any changes, alterations and improvements to the Premises in connection with the
Transfer, (ii) any free base rent or other economic concessions reasonably
provided to the Transferee, (iii) any brokerage commissions in connection with
the Transfer, and (iv) actual, reasonable attorneys’ fees incurred by Tenant in
connection with the Transfer. “Transfer Premium” shall also include, but not be
limited to, key money, bonus money or other cash consideration paid by
Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for services rendered by Tenant to Transferee or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer. The determination of the amount of
Landlord’s applicable share of the Transfer Premium shall be made on a monthly
basis as rent or other consideration is received by Tenant under the Transfer.
 
SECTION 15:  PERSONAL PROPERTY, RENT AND OTHER TAXES
 
Tenant shall pay prior to delinquency all taxes, charges or other governmental
impositions assessed against, levied upon or otherwise imposed upon or with
respect to all fixtures, furnishings, personal property, systems and equipment
located in or exclusively serving the Premises, and any improvements made to the
Premises under or pursuant to the provisions of this Lease. Whenever possible,
Tenant shall cause all such items to be assessed and billed separately from the
other property of Landlord. In the event any such items shall be assessed and
billed with the other property of Landlord, Tenant shall pay Landlord its share
of such taxes, charges or other governmental impositions within ten (10) days
after Landlord delivers a statement and a copy of the assessment or other
documentation showing the amount of impositions applicable to Tenant’s property.
Tenant shall pay any rent tax, sales tax, service tax, transfer tax, value added
tax, or any other applicable tax on the Rent, utilities or services herein, the
privilege of renting, using or occupying the Premises, or collecting Rent
therefrom, or otherwise respecting this Lease or any other document entered in
connection herewith.
 
 
11

 
 
SECTION 16:  TENANT’S DEFAULT; LANDLORD’S REMEDIES
 
A. Default. The occurrence of any one or more of the following events shall
constitute a “Default” by Tenant and shall give rise to Landlord’s remedies set
forth in Section 16(B) below: (i) failure to make when due any payment of Rent,
provided, however, that Tenant shall not be in default solely due to such
failure so long as (a) no more than one (1) such failure occurs during any
calendar year, and (b) any such failure is cured within three (3) business days
after notice from Landlord; (ii) failure to observe or perform any term or
condition of this Lease other than the payment of Rent (or the other matters
expressly described herein), unless such failure is cured within any period of
time following notice expressly provided with respect thereto in other Sections
hereof, or otherwise within a reasonable time, but in no event more than thirty
(30) days following notice from Landlord (provided, if the nature of Tenant’s
failure is such that more time is reasonably required in order to cure, Tenant
shall not be in Default if Tenant commences to cure promptly within such period
and thereafter diligently pursues its completion); (iii) failure to cure
immediately upon notice thereof any condition which is hazardous, interferes
with another tenant or the operation or leasing of the Property, or may cause
the imposition of a fine, penalty or other remedy on Landlord or its agents or
affiliates; (iv) abandonment and vacation of the Premises (failure to occupy and
operate the Premises for ten (10) consecutive days while in monetary default
under this Lease shall conclusively be deemed an abandonment and vacation); or
(v) Tenant, or any guarantor of this Lease (“Guarantor”), filing by or for
reorganization or arrangement under any Law relating to bankruptcy or insolvency
(unless, in the case of a petition filed against Tenant or such Guarantor, the
same is dismissed within thirty (30) days); (b) Tenant’s or any Guarantor’s
insolvency or failure, or admission of an inability, to pay debts as they
mature, or (c) a violation by Tenant or any affiliate of Tenant under any other
lease or agreement with Landlord or any affiliate thereof which is not cured
within the time permitted for cure thereunder. Additionally, if Tenant violates
the same term or condition of this Lease on two (2) occasions during any twelve
(12) month period, Landlord shall have the right to exercise all remedies for
any violations of the same term or condition during the next twelve (12) months
without providing further notice or an opportunity to cure. The notice and cure
periods provided herein are intended to satisfy any and all notice requirements
imposed by Law on Landlord and are in lieu of, and not in addition to, any
notice and cure periods provided by Law; provided, Landlord may elect to comply
with such notice and cure periods provided by Law. In the event of Tenant’s
default, and in addition to any other amounts or remedies that Landlord may be
entitled to, Landlord shall be entitled to recover from Tenant, Landlord’s costs
and reasonable attorneys’ fees incurred in enforcing this Lease or otherwise
arising from Tenant’s default.
 
B. Remedies. If a Default occurs, Landlord shall have the rights and remedies
hereinafter set forth to the extent permitted by Law, which shall be distinct,
separate and cumulative with and in addition to any other right or remedy
allowed under any Law or other provision of this Lease:
 
1. Landlord may terminate Tenant’s right to possession without termination of
this Lease, or Landlord may terminate this Lease and Tenant’s right to
possession, at any time following a Default; provided, no act of Landlord other
than giving notice to Tenant with express statement of termination shall
terminate this Lease or Tenant’s right to possession. Acts of maintenance,
efforts to relet the premises or the appointment of a receiver on Landlord’s
initiative to protect Landlord’s interest under this Lease shall not constitute
a termination of tenant’s right to possession. Upon termination of Tenant’s
right to possession, Landlord shall have the right to reenter the Premises and
recover from Tenant in addition to any other monies provided herein or at Law:
(a) the Worth of the unpaid Rent that had been earned by Landlord at the time of
termination of Tenant’s right to possession; (b) the Worth of the amount of the
unpaid Rent that would have been earned after the date of termination of
Tenant’s right to possession through the expiration of the Lease Term; and (c)
all other expenses incurred by Landlord on account of Tenant’s Default,
including without limitation any Costs of Reletting (defined below) and
Landlord’s attorneys’ fees and collection costs. The “Worth” as used for item
(a) above is to be computed by allowing interest at the rate of eighteen percent
(18%) to accrue on all such unpaid Rent (or such lesser rate required by Law, if
any). The Worth as used for item (b) above is to be computed by discounting the
amount of Rent at the discount rate of the Federal Reserve Bank of San Francisco
at the time of termination of Tenant’s right of possession.
 
2. In the event Landlord has made improvements to the Premises for the use and
occupancy of Tenant, in addition to all other damages and rents to which
Landlord shall be entitled on account of Tenant’s Default, Landlord shall also
be entitled to recover from Tenant a sum equal to: (a) the unamortized cost to
Landlord of the basic building standard Tenant improvement costs, said sum being
computed by applying the percentage which the unexpired portion of the Lease
Term bears to the total scheduled Lease Term with interest at ten percent (10%)
per annum, plus (b) all costs to Landlord of non-building standard, custom or
special Tenant improvements (above basic building standard improvements) with no
adjustment for the unexpired portion of the scheduled Lease Term.
 
3. In the event of any such reentry by Landlord, Landlord may, at Landlord’s
option, require Tenant to remove from the Premises any of Tenant’s property
located thereon. If Tenant fails to do so, Landlord shall not be responsible for
the care or safekeeping thereof and may remove any of the same from the Premises
and place the same elsewhere in the Building or in storage in a public warehouse
at the cost, expense and risk of Tenant with authority to the warehouseman to
sell the same in the event that Tenant shall fail to pay the cost of
transportation and storage, all in accordance with the rules and regulations
applicable to the operation of a public warehouseman’s business. In any and all
such cases of reentry Landlord may make any repairs in, to or upon the Premises
which may be necessary, desirable or convenient, and Tenant hereby waives any
and all claims for damages which may be caused or occasioned by such reentry or
to any property in or about the Premises or any part thereof.
 
 
12

 
 
4. Landlord may bring suits for amounts owed by Tenant hereunder or any portions
thereof, as the same accrue or after the same have accrued, and no suit or
recovery of any portion due hereunder shall be deemed a waiver of Landlord’s
right to collect all amounts to which Landlord is entitled hereunder, nor shall
the same serve as any defense to any subsequent suit brought for any amount not
therefor reduced to judgment. Landlord may pursue one or more remedies against
Tenant and need not make an election of remedies. All rent and other
consideration paid by any replacement tenants shall be applied at Landlord’s
option: (i) first, to the Costs of Reletting (defined below), (ii) second, to
the payment of all costs and attorneys’ fees of enforcing this Lease against
Tenant or any Guarantor, (iii) third, to the payment of all interest and service
charges accruing hereunder, (iv) fourth, to the payment of Rent theretofore
accrued, and (v) with the residue, if any, to be held by Landlord and applied to
the payment of Rent and other obligations of Tenant as the same become due (and
with any remaining residue to be retained by Landlord). “Costs of Reletting”
shall include without limitation, all costs and expenses incurred by Landlord
for any repairs, improvements or other matters necessary to prepare the Premises
for another tenant, brokerage commissions, advertising costs, attorneys’ fees,
any economic incentives given to enter leases with replacement tenants. With
respect to reletting the Premises, Landlord shall only be required to use
reasonable efforts that do not exceed such efforts Landlord generally uses to
lease other space in the Building, Landlord may continue to lease other portions
of the Building or other projects owned or managed by Landlord in the same
vicinity before reletting all or a portion of the Premises, and Landlord shall
not be required to relet at rental rates less than Landlord’s then-existing
rates for new leases or terms less favorable to Landlord than those contained
herein. The times set forth herein for the curing of Defaults by Tenant are of
the essence in this Lease.
 
5. All covenants and agreements to be kept or performed by Tenant under this
Lease shall be performed by Tenant at Tenant’s sole cost and expense and without
any reduction of Rent, except to the extent, if any, otherwise expressly
provided herein. If Tenant shall fail to perform any obligation under this
Lease, and such failure shall continue in excess of the time allowed under
Section 16(A) above, unless a specific time period is otherwise stated in this
Lease, Landlord may, but shall not be obligated to, make any such payment or
perform any such act on Tenant’s part without waiving its rights based upon any
default of Tenant and without releasing Tenant from any obligations hereunder.
Except as may be specifically provided to the contrary in this Lease, and in
addition to any other damages recoverable by Landlord hereunder, Tenant shall
pay to Landlord, upon delivery by Landlord to Tenant of statements therefor, all
sums necessary to reimburse Landlord or pay to Landlord its expenditures
actually made and obligations actually incurred in connection with remedying
Tenant defaults pursuant to this Section 16(B)(5).
 
SECTION 17:   SUBORDINATION, ATTORNMENT AND LENDER PROTECTION
 
This Lease is subject and subordinate to all Mortgages now or hereafter placed
upon the Property, Building, Premises or any interest of Landlord therein, and
all other encumbrances, and matters of public record applicable to the Property,
Building or Premises. Whether before or after any foreclosure or power of sale
proceedings are initiated or completed by any Lender or a deed in lieu is
granted (or any ground lease is terminated), Tenant agrees upon written request
of any such Lender or any purchaser at such sale, to attorn and pay Rent to such
party, and recognize such party as Landlord (provided such Lender or purchaser
shall agree not to disturb Tenant’s occupancy so long as Tenant does not Default
hereunder, on a form customarily used by, or otherwise reasonably acceptable to,
such party). However, in the event of attornment, no Lender shall be: (i) liable
for any act or omission of Landlord, or subject to any offsets or defenses which
Tenant might have against Landlord (arising prior to such Lender becoming
Landlord under such attornment), (ii) liable for any security deposit or bound
by any prepaid Rent not actually received by such Lender, or (iii) bound by any
modification of this Lease not consented to by such Lender. Any Lender may elect
to make this Lease prior to the lien of its Mortgage by written notice to
Tenant, and if the Lender of any prior Mortgage shall require, this Lease shall
be prior to any subordinate Mortgage; such elections shall be effective upon
written notice to Tenant, or shall be effective as of such earlier or later date
set forth in such notice. Tenant agrees to give any Lender by certified mail,
return receipt requested, a copy of any notice of default served by Tenant upon
Landlord, provided that prior to such notice Tenant has been notified in writing
(by way of service on Tenant of a copy of an assignment of leases, or otherwise)
of the address of such Lender. Tenant further agrees that if Landlord shall have
failed to cure such default within the time permitted Landlord for cure under
this Lease, any such Lender whose address has been provided to Tenant shall have
an additional period of thirty (30) days in which to cure (or such additional
time as may be required due to causes beyond such Lender’s control, including
time to obtain possession of the Property by appointment of receiver, power of
sale or judicial action). Should any current or prospective Lender require a
modification or modifications to this Lease which will not cause an increased
cost or otherwise materially and adversely change the rights and obligations of
Tenant hereunder, Tenant agrees that this Lease shall be so modified. Except as
expressly provided to the contrary herein, the provisions of this Section shall
be self-operative; however Tenant shall execute and deliver, within ten (10)
days after requested, such documentation as Landlord or any Lender may request
from time to time, whether prior to or after a foreclosure or power of sale
proceeding is initiated or completed, a deed in lieu is delivered, or a ground
lease is terminated, in order to further confirm or effectuate the matters set
forth in this Section in recordable form (and Tenant hereby authorizes Landlord
acting in good faith to execute any such documentation as Tenant’s agent and
attorney-in-fact). Tenant hereby waives the provisions of any Law (now or
hereafter adopted) which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease or Tenant’s
obligations hereunder if foreclosure or power of sale proceedings are initiated,
prosecuted or completed.
 
 
13

 
 
SECTION 18:   ESTOPPEL CERTIFICATES
 
Tenant shall from time to time, within five (5) days after written request from
Landlord, execute, acknowledge and deliver a statement certifying: (i) that this
Lease is unmodified and in full force and effect or, if modified, stating the
nature of such modification and certifying that this Lease as so modified, is in
full force and effect (or specifying the ground for claiming that this Lease is
not in force and effect), (ii) the dates to which the Rent has been paid, and
the amount of any Security Deposit, (iii) that Tenant is in possession of the
Premises, and paying Rent on a current basis with no offsets, defenses or
claims, or specifying the same if any are claimed, (iv) that there are not, to
Tenant’s knowledge, any uncured defaults on the part of Landlord or Tenant which
are pertinent to the request, or specifying the same if any are claimed, and (v)
certifying such other matters, and including such current financial statements,
as Landlord may reasonably request, or as may be requested by Landlord’s current
or prospective Lenders, insurance carriers, auditors, and prospective purchasers
(and including a comparable certification statement from any subtenant
respecting its sublease). Any such statement may be relied upon by any such
parties. If Tenant shall fail to execute and return such statement within the
time required herein, Tenant shall be deemed to have agreed with the matters set
forth therein, and Landlord acting in good faith shall be authorized as Tenant’s
agent and attorney-in-fact to execute such statement on behalf of Tenant (which
shall not be in limitation of Landlord’s other remedies).
 
SECTION 19:   RIGHTS RESERVED BY LANDLORD
 
Except to the extent expressly limited herein, Landlord reserves full rights to
control the Property (which rights may be exercised without subjecting Landlord
to claims for constructive eviction, abatement of Rent, damages or other claims
of any kind), including more particularly, but without limitation, the following
rights:
 
A. General Matters. To: (i) change the name or street address of the Building or
Property or designation of the Premises, (ii) install and maintain signs on the
exterior and interior of the Building or Property, and grant any other person
the right to do so, (iii) retain at all times, and use in appropriate instances,
keys to all doors within and into the Premises, (iv) grant to any person the
right to conduct any business or render any service at the Property, whether or
not the same are similar to the use permitted Tenant by this Lease, (v) grant
any person the right to use separate security personnel and systems respecting
access to their premises, (vi) have access for Landlord and other tenants of the
Building to any mail chutes located on the Premises according to the rules of
the United States Postal Service (and to install or remove such chutes), and
(vii) in case of fire, invasion, insurrection, riot, civil disorder, emergency
or other dangerous condition, or threat thereof: (a) limit or prevent access to
the Building or Property or Premises, (b) shut down elevator service, (c)
activate elevator emergency controls, and (d) otherwise take such action or
preventative measures deemed necessary by Landlord for the safety of tenants of
the Building or Property or the protection of the Building or Property and other
property located thereon or therein (but this provision shall impose no duty on
Landlord to take such actions, and no liability for actions taken in good
faith).
 
B. Access to Premises. To enter the Premises in order to: (i) inspect, (ii)
supply cleaning service or other services to be provided Tenant hereunder, (iii)
show the Premises to current and prospective Lenders, insurers, purchasers,
tenants, brokers and governmental authorities, (iv) decorate, remodel or alter
the Premises if Tenant shall abandon the Premises at any time, or shall vacate
the same during the last one hundred twenty (120) days of the Term (without
thereby terminating this Lease), and (v) perform any work or take any other
actions under Section 19(C) below, or exercise other rights of Landlord under
this Lease or applicable Laws. However, Landlord shall: (a) provide reasonable
advance written or oral notice to Tenant’s on site manager or other appropriate
person for matters which will involve a significant disruption to Tenant’s
business (except in emergencies), (b) take reasonable steps to minimize any
significant disruption to Tenant’s business, and following completion of any
work, return Tenant’s leasehold improvements, fixtures, property and equipment
to the original locations and condition to the fullest extent reasonably
possible, and (c) take reasonable steps to avoid materially changing the
configuration or reducing the square footage of the Premises, unless required by
Laws or other causes beyond Landlord’s reasonable control (and in the event of
any permanent material reduction, the Rent and other rights and obligations of
the parties based on the square footage of the Premises shall be proportionately
reduced). Tenant shall not place partitions, furniture or other obstructions in
the Premises which may prevent or impair Landlord’s access to the Systems and
Equipment for the Property or the systems and equipment for the Premises. If
Tenant requests that any such access occur before or after Landlord’s regular
business hours and Landlord approves, Tenant shall pay all overtime and other
additional costs in connection therewith.
 
C. Changes To The Property. To: (i) paint and decorate, (ii) perform repairs or
maintenance, and (iii) make replacements, restorations, renovations,
alterations, additions and improvements, structural or otherwise (including
freon retrofit work), in and to the Building or Property or any part thereof,
including any adjacent building, structure, facility, land, street or alley, or
change the uses thereof (including changes, reductions or additions of
corridors, entrances, doors, lobbies, parking facilities and other areas,
structural support columns and shear walls, elevators, stairs, escalators,
mezzanines, solar tint windows or film, kiosks, planters, sculptures, displays,
and other amenities and features therein, and changes relating to the connection
with or entrance into or use of the Building or Property or any other adjoining
or adjacent building or buildings, now existing or hereafter constructed). In
connection with such matters, Landlord may among other things erect scaffolding,
barricades and other structures, open ceilings, close entry ways, restrooms,
elevators, stairways, corridors, parking and other areas and facilities, and
take such other actions as Landlord deems appropriate. However, Landlord shall:
(a) take reasonable steps to minimize or avoid any denial of access to the
Premises except when necessary on a temporary basis, and (b) in connection with
entering the Premises shall comply with Section 19(B) above.
 
 
14

 
 
D. New Premises. To substitute for the Premises other premises (herein referred
to as the “new premises”) in the Building, provided: (i) the new premises shall
be similar to the Premises in size (up to 10% larger or smaller with the Rent
and any other rights and obligations of the parties based on the square footage
of the Premises adjusted proportionately to reflect any decrease), (ii) Landlord
shall provide the new premises in a condition substantially comparable to the
Premises at the time of the substitution (and Tenant shall diligently cooperate
in the preparation or approval of any plans or specifications for the new
premises as requested by Landlord or Landlord’s representatives), (iii) the
parties shall execute an appropriate amendment to the Lease confirming the
change within thirty (30) days after Landlord requests, and (iv) if Tenant shall
already have taken possession of the Premises: (a) Landlord shall pay the
direct, out of pocket, reasonable expenses of Tenant in moving from the Premises
to the new premises, and (b) Landlord shall give Tenant at least thirty (30)
days’ notice before making such change, and such move shall be made during
evenings, weekends, or otherwise so as to incur the least inconvenience to
Tenant. Tenant shall surrender and vacate the Premises on the date required in
Landlord’s notice of substitution, in the condition and as required under
Section 22, and any failure to do so shall be subject to Section 23.
 
E. Redevelopment Rights and Construction Activities; Landlord Termination Right.
Landlord reserves all rights to alter and/or redevelop the Building and the
Property, including the Premises, and to perform construction activities in
connection therewith (collectively, “Construction Activities”). Construction
Activities may include (i) painting and decoration, (ii) repairs and
maintenance, (iii) replacements, restorations, renovations, alterations,
additions (including adding additional floors to the Building) and improvements,
structural and otherwise, in and to the Building or Property or any part
thereof, including any adjacent building, structure, facility, land, street or
alley, and (iv) any changes in the uses thereof (including changes, reductions
or additions of corridors, entrances, doors, lobbies, parking facilities and
other areas, structural support columns and shear walls, elevators, stairs,
escalators, mezzanines, solar tint windows or film, kiosks, planters,
sculptures, displays, and other amenities and features therein, and changes
relating to the connection with or entrance into or use of the Building or
Property or any other adjoining or adjacent building or buildings, now existing
or hereafter constructed). In connection with any such Construction Activities,
Landlord may among other things erect scaffolding, barricades and other
structures, open ceilings, close entry ways, restrooms, elevators, stairways,
corridors, parking and other areas and facilities, and take such other actions
as Landlord deems appropriate. Landlord shall take reasonable steps to minimize
or avoid any denial of access to the Premises or interference with Tenant’s use
of the Premises except when necessary on a temporary basis; provided, however,
that if Landlord determines in its reasonable judgment that it is necessary or
expedient to do so, Landlord shall have the right, at its option, to terminate
this Lease in connection with any Construction Activities, by giving Tenant
written notice to such effect (the "Termination Notice") not less than twelve
(12) months prior to the termination date set forth in the Termination Notice
(the “Termination Date”). On the Termination Date (i) this Lease shall be fully
and finally terminated; (ii) Tenant shall vacate the Premises and surrender
possession of the Premises to Landlord in accordance with the provisions of the
Lease, and (iii) Landlord and Tenant shall be fully and unconditionally relieved
and released of and from their respective obligations and liabilities under or
connected with the provisions of this Lease accruing or arising after the
Termination Date; provided, however, that any indemnity or similar provisions of
this Lease and any obligations on the part of Landlord or Tenant to reimburse
the other party for overpayments or underpayments shall survive the termination
of the Lease and remain fully effective as to any and all demands, claims,
causes of action, or reimbursement obligations that accrued or arose on or
before the Termination Date. If Landlord elects to terminate this Lease in
accordance with this Section, Landlord shall work in good faith with Tenant to
identify potential alternative spaces for Tenant to lease within the portfolio
of Seattle office buildings owned by Landlord or its affiliates.
 
SECTION 20:  LANDLORD’S DEFAULT; REMEDIES
 
If Landlord shall fail to perform any obligation under this Lease required to be
performed by Landlord, Landlord shall not be deemed to be in default hereunder
nor subject to any claims for damages of any kind, unless such failure shall
have continued for a period of thirty (30) days after notice thereof by Tenant
(provided, if the nature of Landlord’s failure is such that more time is
reasonably required in order to cure, Landlord shall not be in default if
Landlord commences to cure within such period and thereafter diligently seeks to
cure such failure to completion). If Landlord shall default and failure to cure
as provided herein, Tenant shall have such rights and remedies as may be
available to Tenant under applicable Laws, subject to the other provisions of
this Lease; provided, Tenant shall have no right of self-help to perform repairs
or any other obligation of Landlord, and shall have no right to withhold,
set-off, or abate Rent, or terminate this Lease, and Tenant hereby expressly
waives the benefit of any Law to the contrary.
 
 
15

 
 
SECTION 21:  RELEASE AND INDEMNITY
 
A. Tenant’s Indemnification of Landlord. Tenant shall indemnify, defend (using
legal counsel reasonably acceptable to Landlord) and save Landlord harmless from
all claims, suits, losses, damages, fines, penalties, liabilities and expenses
(including Landlord’s personnel and overhead costs and reasonable attorneys’
fees and other costs incurred in connection with claims (collectively,
“Claims”), regardless of whether such Claims involve litigation) resulting from
any actual or alleged injury (including death) of any person or from any actual
or alleged loss of or damage to any property arising out of or in connection
with (i) Tenant’s occupation, use or improvement of the Premises, or that of its
employees, agents or contractors, (ii) Tenant’s breach of its obligations
hereunder or (iii) any act or omission of Tenant or any subtenant, licensee,
assignee or concessionaire of Tenant, or of any officer, agent, employee, guest
or invitee of Tenant, or of any such entity in or about the Premises.
Notwithstanding the foregoing, in the event any Claims are caused by the joint
or concurrent negligence of Landlord or Tenant, Tenant's indemnification
obligation with respect to Landlord shall be limited to the extent of the
negligence of Tenant, and in no event shall Tenant have any obligation to
indemnify Landlord against Claims arising out of the sole negligence of
Landlord. FOR THE SOLE PURPOSE OF GIVING FULL FORCE AND EFFECT TO THE
INDEMNIFICATION OBLIGATIONS UNDER THIS LEASE AND NOT FOR THE BENEFIT OF ANY
EMPLOYEES OF TENANT OR ANY THIRD PARTIES UNRELATED TO THE PARTIES INDEMNIFIED
UNDER THIS LEASE, TENANT SPECIFICALLY AND EXPRESSLY WAIVES ANY IMMUNITY THAT MAY
BE GRANTED IT UNDER THE WASHINGTON STATE INDUSTRIAL INSURANCE ACT, TITLE 51 RCW.
This indemnity with respect to acts or omissions during the term of this Lease
shall survive termination or expiration of this Lease. Tenant shall promptly
notify Landlord of casualties or accidents occurring in or about the Premises.
LANDLORD AND TENANT ACKNOWLEDGE THAT THE INDEMNIFICATION PROVISIONS OF SECTION
29 AND THIS SECTION 21 WERE SPECIFICALLY NEGOTIATED AND AGREED UPON BY THEM.
 
B. Release. Tenant hereby fully and completely waives and releases all claims
against Landlord for any losses or other damages sustained by Tenant or any
person claiming through Tenant resulting from any accident or occurrence in or
upon the Premises, including but not limited to: any defect in or failure of
Building equipment; any failure to make repairs; any defect, failure, surge in,
or interruption of project facilities or services; any defect in or failure of
Common Areas; broken glass; water leakage; the collapse of any Building
component; any claim or damage resulting from Landlord’s repair, maintenance or
improvements to any portion of the Building or Property; or any act, omission or
negligence of co-tenants, licensees or any other persons or occupants of the
Building; provided only, that the release contained in this Section 21(B) shall
not apply to claims for actual damage to persons or property (excluding
consequential damages such as lost profits) resulting directly and solely from
Landlord’s gross negligence or willful misconduct or from Landlord’s breach of
its express obligations under this Lease which Landlord has not cured within a
reasonable time after receipt of written notice of such breach from Tenant.
 
C. Definitions. As used in any Section of this Lease establishing indemnity or
release of Landlord, “Landlord” shall include Landlord, its property manager if
any, and their respective managers, members, partners, officers, agents,
employees and contractors, and “Tenant” shall include Tenant and any person or
entity claiming through Tenant.
 
SECTION 22:  RETURN OF POSSESSION
 
At the expiration or earlier termination of this Lease or Tenant’s right of
possession, Tenant shall vacate and surrender possession of the entire Premises
in good, neat and clean order and well-maintained condition, ordinary wear and
tear excepted, shall surrender all keys and key cards, and any parking
transmitters, stickers or cards, to Landlord, and shall remove all personal
property and office trade fixtures that may be readily removed without damage to
the Premises or Property. All improvements, fixtures and other items installed
by Tenant or Landlord under or with respect to this Lease, shall be the property
of Tenant during the Term of this Lease, but at the expiration or earlier
termination of this Lease all such improvements, fixtures and other items shall
become Landlord’s property, and shall remain upon the Premises (unless Landlord
elects otherwise), all without compensation, allowance or credit to Tenant. If
prior to such termination or within three (3) months thereafter Landlord so
directs by notice, and subject to the terms of Section 10(A) of this Lease,
Tenant shall promptly remove such of the foregoing items as are designated in
such notice and restore the Premises to the condition prior to the installation
of such items in a good and workmanlike manner. If Tenant shall fail to perform
any repairs or restoration, or fail to remove any items from the Premises
required hereunder, Landlord may do so and Tenant shall pay Landlord’s charges
therefor upon demand. All property removed from the Premises by Landlord
pursuant to any provisions of this Lease or any Law may be handled or stored by
Landlord at Tenant’s expense, and Landlord shall in no event be responsible for
the value, preservation or safekeeping thereof. All property not removed from
the Premises or retaken from storage by Tenant within thirty (30) days after
expiration or earlier termination of this Lease or Tenant’s right to possession,
shall at Landlord’s option be conclusively deemed to have been conveyed by
Tenant to Landlord as if by bill of sale without payment by Landlord. Unless
prohibited by applicable Law, Landlord shall have a lien against such property
for the costs incurred in removing and storing the same. Tenant hereby waives
any statutory notices to vacate or quit the Premises upon expiration of this
Lease.
 
 
16

 
 
SECTION 23:  HOLDING OVER
 
Unless Landlord expressly agrees otherwise in writing, Tenant shall pay Landlord
two hundred percent (200%) of the amount of Rent then applicable prorated on a
per diem basis for each day Tenant shall fail to vacate or surrender possession
of the Premises or any part thereof after expiration or earlier termination of
this Lease, together with all damages sustained by Landlord on account thereof.
Tenant shall pay such amounts on demand, and, in the absence of demand, monthly
in advance. The foregoing provisions, and Landlord’s acceptance of any such
amounts, shall not serve as permission for Tenant to hold over, nor serve to
extend the Term (although Tenant shall remain a tenant-at-sufferance bound to
comply with all provisions of this Lease). Landlord shall have the right at any
time after expiration or earlier termination of this Lease, or Tenant’s right to
possession, to reenter and possess the Premises and remove all property and
persons therefrom, and Landlord shall have such other remedies for holdover as
may be available to Landlord under other provisions of this Lease or applicable
Laws.
 
SECTION 24:  NOTICES
 
Except as expressly provided to the contrary in this Lease, every notice or
other communication to be given by either party to the other with respect hereto
or to the Premises, Building or Property, shall be in writing and shall not be
effective for any purpose unless the same shall be served personally, or by
national air courier service, or United States certified mail, return receipt
requested, postage prepaid, to the parties at the addresses set forth in Section
1, or such other address or addresses as Tenant or Landlord may from time to
time designate by notice given as above provided. Every notice or other
communication hereunder shall be deemed to have been given as of the third
business day following the date of such mailing (or as of any earlier date
evidenced by a receipt from such national air courier service or the United
States Postal Service) or immediately if personally delivered. Notices not sent
in accordance with the foregoing shall be of no force or effect until received
by the foregoing parties at such addresses required herein.
 
SECTION 25:  REAL ESTATE BROKERS
 
Tenant represents that Tenant has dealt only with the broker, if any, designated
in Section 1 (whose commission, if any, shall be paid by Landlord pursuant to
separate agreement) as broker, agent or finder in connection with this Lease,
and agrees to indemnify and hold Landlord harmless from all damages, judgments,
liabilities and expenses (including reasonable attorneys’ fees) arising from any
claims or demands of any other broker, agent or finder with whom Tenant has
dealt for any commission or fee alleged to be due in connection with its
participation in the procurement of Tenant or the negotiation with Tenant of
this Lease. Landlord and Tenant recognize that it is possible that they may
hereafter make additional agreements regarding further extension or renewal of
this Lease or a new lease or leases for all or one or more parts of the Premises
or other space in the Building (or other portions of the Property or other
buildings managed by Landlord) for a term or terms commencing after the
Commencement Date of this Lease. It is also possible that Landlord and Tenant
may hereafter modify this Lease to add additional space or to substitute other
space for all or a portion of the Premises. In the event any such additional
agreements, modifications to this Lease, or new leases are made, Landlord shall
have no obligation to pay any commission or other compensation to any broker or
other party engaged by Tenant (including the brokers designated in Section 1)
with respect to negotiating or representing Tenant in such matters, regardless
of whether under the circumstances such person is or is not regarded by law as
an agent of Landlord, and Tenant shall indemnify and hold Landlord harmless from
any claim for such compensation. Nothing in this Section 25 shall be construed
to require or otherwise obligate Landlord to consider or make any of the
above-described additional agreements, modifications to this Lease, or new
lease.
 
SECTION 26:   NO WAIVER
 
No provision of this Lease will be deemed waived by either party unless
expressly waived in writing and signed by the waiving party. No waiver shall be
implied by delay or any other act or omission of either party. No waiver by
either party of any provision of this Lease shall be deemed a waiver of such
provision with respect to any subsequent matter relating to such provision, and
Landlord’s consent or approval respecting any action by Tenant shall not
constitute a waiver of the requirement for obtaining Landlord’s consent or
approval respecting any subsequent action. Acceptance of Rent by Landlord
directly or through any agent or lock-box arrangement shall not constitute a
waiver of any breach by Tenant of any term or provision of this Lease (and
Landlord reserves the right to return or refund any untimely payments if
necessary to preserve Landlord’s remedies). No acceptance of a lesser amount of
Rent shall be deemed a waiver of Landlord’s right to receive the full amount
due, nor shall any endorsement or statement on any check or payment or any
letter accompanying such check or payment be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord’s
right to recover the full amount due. The acceptance of Rent or of the
performance of any other term or provision from, or providing directory listings
or services for, any person or entity other than Tenant shall not constitute a
waiver of Landlord’s right to approve any Transfer. No delivery to, or
acceptance by, Landlord or its agents or employees of keys, nor any other act or
omission of Tenant or Landlord or their agents or employees, shall be deemed a
surrender, or acceptance of a surrender, of the Premises or a termination of
this Lease, unless stated expressly in writing by Landlord.
 
 
17

 
 
SECTION 27:  SAFETY AND SECURITY DEVICES, SERVICES AND PROGRAMS
 
The parties acknowledge that safety and security devices, services and programs
provided by Landlord, if any, while intended to deter crime and ensure safety,
may not in given instances prevent theft or other criminal acts, or ensure
safety of persons or property. The risk that any safety or security device,
service or program may not be effective, or may malfunction, or be circumvented
by a criminal, is assumed by Tenant with respect to Tenant’s property and
interests, and Tenant shall obtain insurance coverage to the extent Tenant
desires protection against such criminal acts and other losses. Tenant agrees to
cooperate in any reasonable safety or security program developed by Landlord or
required by Law.
 
SECTION 28:   TELECOMMUNICATION LINES AND EQUIPMENT
 
A. Telecommunication Lines. No telecommunication or computer lines
(collectively, “Lines”) shall be installed within or without the Premises
without Landlord’s prior consent in accordance with Section 10. Landlord
disclaims any representations, warranties or understandings concerning
Landlord’s Building computer systems, or the capacity, design or suitability of
Landlord’s riser Lines, Landlord’s main distribution frame (“MDF”) or related
equipment. If there is, or will be, more than one tenant on any floor, at any
time, Landlord may allocate, and periodically reallocate, connections to the
terminal block based on the proportion of square feet each tenant occupies on
such floor, or the type of business operations or requirements of such tenants,
in Landlord’s reasonable discretion. Landlord may arrange for an independent
contractor to review Tenant’s requests for approval to install any
telecommunication or computer lines, monitor or supervise Tenant’s installation,
connection and disconnection of any such lines, and provide other such services,
or Landlord may provide the same. In each case, all such work shall be performed
in accordance with Section 10 and the additional requirements set forth below:
(i) an acceptable number of spare Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in
Landlord’s reasonable opinion; (ii) the Lines (including riser cables) shall be
appropriately insulated to prevent excessive electromagnetic fields or
radiation, shall be surrounded by a protective conduit reasonably acceptable to
Landlord, and shall be identified in accordance with the “Identification
Requirements,” as that term is set forth below; (iii) any new or existing Lines
servicing the Premises shall comply with all applicable governmental laws and
regulations; (iv) as a condition to permitting the installation of new Lines,
Landlord may require that Tenant remove existing Lines located in or serving the
Premises and repair any damage in connection with such removal; (v) Tenant shall
pay all costs in connection therewith; and (vi) all Lines shall be clearly
marked with adhesive plastic labels (or plastic tags attached to such Lines with
wire) to show Tenant’s name, suite number, telephone number and the name of the
person to contact in the case of an emergency (A) every four feet (4’) outside
the Premises (specifically including, but not limited to, the electrical room
risers and other Common Areas), and (B) at the Lines’ termination point(s)
(collectively, “Identification Requirements”). At the expiration or earlier
termination of this Lease, and at Landlord’s request, Tenant at its cost shall
remove all Lines or other computer or telecommunication systems installed by or
for Tenant and Tenant shall restore the Premises and Building to the condition
existing prior to Tenant’s installation.
 
B. Wi-Fi Network. In the event Tenant desires to install wireless intranet,
Internet and communications network (“Wi-Fi Network”) in the Premises for the
use by Tenant and its employees, then the same shall be subject to the
provisions of Section 8 and Section 15. Tenant shall use the Wi-Fi Network so as
not to cause any interference to other tenants in the Building or with any other
tenant’s communication equipment, and not to interfere with the normal operation
of the Building. Should any interference occur, Tenant shall take all necessary
steps as soon as reasonably possible and no later than three (3) calendar days
following such occurrence to correct such interference. If such interference
continues after such three (3) day period, Tenant shall immediately cease
operating such Wi-Fi Network until such interference is corrected or remedied to
Landlord’s satisfaction. Tenant acknowledges that Landlord has granted and/or
may grant telecommunication rights to other tenants and occupants of the
Building and Property and to telecommunication service providers and in no event
shall Landlord be liable to Tenant for any interference of the same with such
Wi-Fi Network. Landlord makes no representation that the Wi-Fi Network will be
able to receive or transmit communication signals without interference or
disturbance. Tenant shall (i) be solely responsible for any damage caused as a
result of the Wi-Fi Network, (ii) promptly pay any tax, license or permit fees
charged pursuant to any Laws in connection with the installation, maintenance or
use of the Wi-Fi Network and comply with all precautions and safeguards
recommended by all governmental authorities, and (iii) pay for all necessary
repairs, replacements to or maintenance of the Wi-Fi Network.
 
C. Limitation of Liability. Unless due solely to Landlord’s intentional
misconduct or grossly negligent acts, Landlord shall have no liability for
damages arising, and Landlord does not warrant that the Tenant’s use of any
telecommunication or computer lines or systems will be free, from the following
(collectively called “Line Problems”): (i) any eavesdropping, wiretapping or
theft of long distance access codes by unauthorized parties, (ii) any failure of
the Lines to satisfy Tenant’s requirements, or (iii) any capacitance,
attenuation, cross talk or other problems with the Lines, any misdesignation of
the Lines in the MDF room or wire closets, or any shortages, failures,
variations, interruptions, disconnections, loss or damage caused by or in
connection with the installation, maintenance, replacement, use or removal of
any other Lines or equipment at the Building or Property by or for other tenants
at the Property or Building, by any failure of the environmental conditions at
or the power supply for the Building to conform to any requirements of the Lines
or any other problems associated with any Lines or by any other cause. Under no
circumstances shall any Line Problems be deemed an actual or constructive
eviction of Tenant, render Landlord liable to Tenant for abatement of any Rent
or other charges under the Lease, or relieve Tenant from performance of Tenant’s
obligations under the Lease as amended herein. Landlord in no event shall be
liable for any loss of profits, business interruption or other consequential
damage arising from any Line Problems.
 
 
18

 
 
SECTION 29:   HAZARDOUS SUBSTANCES; DISRUPTIVE ACTIVITIES
 
A. Hazardous Substances.
 
1. Tenant shall not, without Landlord’s prior written consent, which may be
given or withheld in Landlord’s sole discretion, keep on or around the Premises,
Building or Property, for use, disposal, treatment, generation, storage or sale,
any substances designed as, or containing components designated as, a “hazardous
substance,” “hazardous material,” hazardous waste,” “regulated substance” or
“toxic substance” by applicable Law (collectively referred to as “Hazardous
Substances”). With respect to any such Hazardous Substances, Tenant shall: (i)
comply promptly, timely and completely with all Laws for reporting, keeping and
submitting manifests, and obtaining and keeping current identification numbers;
(ii) submit to Landlord true and correct copies of all reports, manifests and
identification numbers at the same time as they are required to be and/or are
submitted to the appropriate governmental authorities; (iii) within five (5)
days of Landlord’s request, submit written reports to Landlord regarding
Tenant’s use, storage, treatment, transportation, generation, disposal or sale
of Hazardous Substances and provide evidence satisfactory to Landlord of
Tenant’s compliance with all applicable Laws; (iv) allow Landlord or Landlord’s
agent or representative to come on the Premises at all times to check Tenant’s
compliance with all applicable Laws; (v) comply with minimum levels, standards
or other performance standards or requirements which may be set forth or
established for certain Hazardous Substances (if minimum standards or levels are
applicable to Hazardous Substances present on the Premises, such levels or
standards shall be established by an on-site inspection by the appropriate
governmental authorities and shall be set forth in an addendum to this Lease);
and (vi) comply with all applicable Laws regarding the proper and lawful use,
sale, transportation, generation, treatment and disposal of Hazardous
Substances.
 
2. Any and all costs incurred by Landlord and associated with Landlord’s
monitoring of Tenant’s compliance with this Section 29, including Landlord’s
attorneys’ fees and costs, shall be additional Rent and shall be due and payable
to Landlord immediately upon demand by Landlord.
 
B. Cleanup Costs, Default and Indemnification.
 
1. Tenant shall be fully and completely liable to Landlord for any and all
cleanup costs, and any and all other charges, fees, penalties (civil and
criminal) imposed by any governmental authority with respect to Tenant’s use,
disposal, transportation, generation and/or sale of Hazardous Substances, in or
about the Premises, Building or Property.
 
2. Tenant shall fully indemnify, defend and save Landlord and Landlord’s Lender,
if any, harmless from any and all of the costs, fees, penalties and charges
assessed against or imposed upon Landlord (as well as Landlord’s and Landlord’s
Lender’s attorneys’ fees and costs) as a result of Tenant’s use, disposal,
transportation, generation and/or sale of Hazardous Substances.
 
3. Upon Tenant’s default under this Section 29, in addition to the rights and
remedies set forth elsewhere in this Lease, Landlord shall be entitled to the
following rights and remedies: (i) at Landlord’s option, to terminate this lease
immediately; and/or (ii) to recover any and all damages associated with the
default, including, but not limited to cleanup costs and charges, civil and
criminal penalties and fees, loss of business and sales by Landlord and other
tenants of the Building or Property, any and all damages and claims asserted by
third parties and Landlord’s attorney’s fees and costs.
 
C. Disruptive Activities. Tenant shall not: (1) produce, or permit to be
produced, any intense glare, light or heat except within an enclosed or screened
area and then only in such manner that the glare, light or heat shall not,
outside the Premises, be materially different than the light or heat from other
sources outside the Premises; (2) create, or permit to be created, any sound
pressure level which will interfere with the quiet enjoyment of any real
property outside the Premises, or which will create a nuisance or violate any
Law; (3) create, or permit to be created, any floor or ground vibration that is
materially discernible outside the Premises; (4) transmit, receive, or permit to
be transmitted or received, any electromagnetic, microwave or other radiation
which is harmful or hazardous to any person or property in or about the
Premises, Building or Property; or (5) create, or permit to be created, any
noxious odor that is disruptive to the business operations of any other tenant
in the Building or Property.
 
SECTION 30:   DISABILITIES ACTS
 
The parties acknowledge that the Americans With Disabilities Act of 1990 (42
U.S.C. § 12101 et seq.) and regulations and guidelines promulgated thereunder
(“ADA”), and any similarly motivated state and local Laws, as the same may be
amended and supplemented from time to time (collectively referred to herein as
the “Disabilities Acts”) establish requirements for business operations,
accessibility and barrier removal, and that such requirements may or may not
apply to the Premises, Building and Property depending on, among other things:
(i) whether Tenant’s business is deemed a “public accommodation” or “commercial
facility”, (ii) whether such requirements are “readily achievable”, and (iii)
whether a given alteration affects a “primary function area” or triggers “path
of travel” requirements. The parties hereby agree that: (a) Landlord shall
perform any required Disabilities Acts compliance in the Common Areas, except as
provided below, (b) Tenant shall perform any required Disabilities Acts
compliance in the Premises, and (c) Landlord may perform, or require that Tenant
perform, and Tenant shall be responsible for the cost of, Disabilities Acts
“path of travel” and other requirements triggered by any public accommodation or
other use of, or alterations in, the Premises by Tenant. Tenant shall be
responsible for Disabilities Acts requirements relating to Tenant’s employees,
and Landlord shall be responsible for Disabilities Acts requirements relating to
Landlord’s employees.
 
 
19

 
 
SECTION 31:  DEFINITIONS
 
(A)           
“Building” shall mean the structure (or the portion thereof operated by
Landlord) identified in Section 1 within which the Premises are located.
 
(B)           
“Common Areas” shall mean the lobbies, walkways, elevators and other portions of
the Property which are provided by Landlord, from time to time, for use in
common by Landlord, Tenant and any other tenants of the Building.
 
(C)           
“Default Rate” shall mean eighteen percent (18%) per annum, or the highest rate
permitted by applicable Law, whichever shall be less.
 
(D)           
“Holidays” shall mean all federal holidays, and holidays observed by the State
of Washington, including New Year’s Day, President’s Day, Memorial Day,
Independence Day, Labor Day, Veterans’ Day, Thanksgiving Day, Christmas Day, and
to the extent of utilities or services provided by union members engaged at the
Property, such other holidays observed by such unions.
 
(E)           
“Landlord” shall mean only the landlord from time to time, except for purposes
of any provisions defending, indemnifying and holding Landlord harmless
hereunder, “Landlord” shall include past, present and future landlords and their
respective partners, beneficiaries, trustees, officers, directors, employees,
shareholders, principals, agents, affiliates, successors and assigns.
 
(F)           
“Law” or “Laws” shall mean all federal, state, county and local governmental and
municipal laws (including without limitation Disabilities Acts), statutes,
ordinances, rules, regulations, codes, decrees, orders and other such
requirements, applicable equitable remedies and decisions by courts in cases
where such decisions are considered binding precedents in the State of
Washington, and decisions of federal courts applying the Laws of such State, at
the time in question. This Lease shall be interpreted and governed by the Laws
of the State of Washington.
 
(G)           
“Lender” shall mean the holder of any Mortgage at the time in question, and
where such Mortgage is a ground lease, such term shall refer to the ground
Landlord (and the term “ground lease” although not separately capitalized is
intended throughout this Lease to include any superior or master lease).
 
(H)           
“Mortgage” shall mean all mortgages, deeds of trust, ground leases and other
such encumbrances now or hereafter placed upon the Property, Building or
Premises, or any part thereof or interest therein, and all renewals,
modifications, consolidations, replacements or extensions thereof, and all
indebtedness now or hereafter secured thereby and all interest thereon.
 
(I)           
“Normal Business Hours” shall mean 8:00 a.m. to 6:00 p.m. Monday through Friday.
 
(J)           “Premises” shall mean the area within the Building identified in
Section 1 and Exhibit B. Possession of areas necessary for utilities, services,
safety and operation of the Building, including the Systems and Equipment, fire
stairways, perimeter walls, space between the finished ceiling of the Premises
and the slab of the floor or roof of the Building thereabove, and the use
thereof together with the right to install, maintain, operate, repair and
replace the Systems and Equipment, including any of the same in, through, under
or above the Premises in locations that will not materially interfere with
Tenant’s use of the Premises, are hereby excepted and reserved by Landlord, and
not demised to Tenant.
 
(K)           
“Property” shall mean the real property legally described in Exhibit A of this
Lease together with all landscaping, improvements and personal property located
thereon and related to the Building or its operation or maintenance.
 
(L)           
“Rent” shall have the meaning specified therefor in Section 4.
 
(M)           
“Systems and Equipment” shall mean any plant, machinery, transformers, duct
work, cable, wires, and other equipment, facilities, and systems designed to
supply light, heat, ventilation, air conditioning and humidity, or any other
services or utilities, or comprising or serving as any component or portion of
the electrical, gas, steam, plumbing, sprinkler, communications, alarm,
security, or fire/life/safety systems or equipment, or any elevators, escalators
or other mechanical, electrical, electronic, computer or other systems or
equipment for the Building, except to the extent that any of the same serves
particular tenants exclusively (and “systems and equipment” without
capitalization shall refer to such of the foregoing items serving particular
tenants exclusively).
 
(N)           
“Tenant” shall be applicable to one or more persons or entities as the case may
be, the singular shall include the plural, and if there be more than one Tenant,
the obligations thereof shall be joint and several. When used in the lower case,
“tenant” shall mean any other tenant, subtenant or occupant of the Building or
Property.
 
 
20

 
 
(O)           
“Tenant’s Share” of Expenses and Taxes pursuant to Section 4 shall be the
percentage set forth in Section 1, but if the rentable area of the Premises or
Building shall change, Tenant’s Share shall thereupon become the rentable area
of the Premises divided by the rentable area of the Building, excluding any
parking facilities, subject at all times to adjustment under Section 4. Tenant
acknowledges that the “rentable area of the Premises” under this Lease includes
the usable area, without deduction for columns or projections, multiplied by a
load or conversion factor, to reflect a share of certain areas, which may
include lobbies, corridors, mechanical, utility, janitorial, boiler and service
rooms and closets, restrooms, and other public, common and service areas, all as
reasonably determined by Landlord. Except as provided expressly to the contrary
herein, the “rentable area of the Building” shall include all rentable area of
all space leased or available for lease at the Building, which Landlord may
reasonably re determine from time to time, to reflect re configurations,
additions or modifications to the Building.
 
SECTION 32:   OFFER
 
The submission and negotiation of this Lease shall not be deemed an offer to
enter the same by Landlord (nor an option or reservation for the Premises), but
the solicitation of such an offer by Tenant. Tenant agrees that its execution of
this Lease constitutes a firm offer to enter the same which may not be withdrawn
for a period of thirty (30) days after delivery to Landlord. During such period
and in reliance on the foregoing, Landlord may, at Landlord’s option, deposit
any Security Deposit and Rent, proceed with any plans, specifications,
alterations or improvements, and permit Tenant to enter the Premises, but such
acts shall not be deemed an acceptance of Tenant’s offer to enter this Lease,
and such acceptance shall be evidenced only by Landlord signing and delivering
this Lease to Tenant.
 
SECTION 33:  MISCELLANEOUS
 
A. Captions and Interpretation. The captions of the Sections of this Lease are
for convenience of reference only and shall not be considered or referred to in
resolving questions of interpretation. Tenant acknowledges that it has read this
Lease and that it has had the opportunity to confer with counsel in negotiating
this Lease; accordingly, this Lease shall be construed neither for nor against
Landlord or Tenant, but shall be given a fair and reasonable interpretation in
accordance with the meaning of its terms. The neuter shall include the masculine
and feminine, and the singular shall include the plural. The term “including”
shall be interpreted to mean “including, but not limited to.”
 
B. Survival of Provisions. All obligations (including indemnity, Rent and other
payment obligations) or rights of either party arising during or attributable to
the period prior to expiration or earlier termination of this Lease shall
survive such expiration or earlier termination.
 
C. Severability. If any term or provision of this Lease or portion thereof shall
be found invalid, void, illegal, or unenforceable generally or with respect to
any particular party, by a court of competent jurisdiction, it shall not affect,
impair or invalidate any other terms or provisions or the remaining portion
thereof, or its enforceability with respect to any other party.
 
D. Short Form Lease. Neither this Lease nor any memorandum of lease or short
form lease shall be recorded by Tenant, but Landlord or any Lender may elect to
record a short form of this Lease, in which case Tenant shall promptly execute,
acknowledge and deliver the same on a form prepared by Landlord or such Lender.
 
E. Light, Air and Other Interests. This Lease does not grant any legal rights to
“light and air” outside the Premises nor any particular view visible from the
Premises, nor any easements, licenses or other interests unless expressly
contained in this Lease.
 
F. Authority. If Tenant is any form of corporation, partnership, limited
liability company or partnership, association or other organization, Tenant and
all persons signing for Tenant below hereby represent that this Lease has been
fully authorized and no further approvals are required, and Tenant is duly
organized, in good standing and legally qualified to do business in the Premises
(and has any required certificates, licenses, permits and other such items).
 
G. Joint and Several. If there is more than one Tenant, the obligations imposed
upon Tenant under this Lease shall be joint and several. In the event that the
Tenant is a married individual, the terms, covenants and conditions of this
Lease shall be binding upon the marital community of which the Tenant is a
member.
 
H. Financial Statements. Tenant shall, within ten (10) days after requested from
time to time, deliver to Landlord financial statements (including balance sheets
and income/expense statements) for Tenant’s then most recent full and partial
fiscal year preceding such request, certified by an independent certified public
accountant or Tenant’s chief financial officer, in form reasonably satisfactory
to Landlord.
 
 
21

 
 
I. Successors and Assigns; Transfer of Property and Security Deposit. Each of
the terms and provisions of this Lease shall be binding upon and inure to the
benefit of the parties’ respective heirs, executors, administrators, guardians,
custodians, successors and assigns, subject to Section 14 respecting Transfers
and Section 17 respecting rights of Lenders. Subject to Section 17, if Landlord
shall convey or transfer the Property or any portion thereof in which the
Premises are contained to another party, such party shall thereupon be and
become landlord hereunder and shall be deemed to have fully assumed all of
Landlord’s obligations under this Lease accruing during such party’s ownership,
including the return of any Security Deposit (provided Landlord shall have
turned over such Security Deposit to such party), and Landlord shall be free of
all such obligations accruing from and after the date of conveyance or transfer.
 
J. Rent and Taxes. In addition to the provisions of Section 15, all Rent due
Landlord herein is exclusive of any sales, business and occupational gross
receipts or tax based on rents or tax upon this Lease or tax measured by the
number of employees of Tenant or the area of the Premises or any similar tax or
charge. If any such tax or charge be hereafter enacted, Tenant shall reimburse
to Landlord the amount thereof with each monthly Base Rent payment. If it shall
not be lawful for Tenant to so reimburse Landlord, the monthly Base Rent payable
to Landlord under this Lease shall be revised to net Landlord the same net
rental after imposition of any such tax or charge upon Landlord as would have
been payable to Landlord prior to the imposition of such tax or charge. Tenant
shall not be liable to reimburse Landlord any federal income tax or other income
tax of a general nature applicable to Landlord’s income.
 
K. Limitation of Landlord’s Liability. Tenant agrees to look solely to
Landlord’s interest in the Building for the enforcement of any judgment, award,
order or other remedy under or in connection with this Lease or any related
agreement, instrument or document or for any other matter whatsoever relating
thereto or to the Building or Premises. Under no circumstances shall any present
or future, direct or indirect, principals or investors, general or limited
partners, officers, directors, shareholders, trustees, beneficiaries,
participants, advisors, managers, employees, agents or affiliates of Landlord,
or of any of the other foregoing parties, or any of their heirs, successors or
assigns have any liability for any of the foregoing matters.
 
L. Signage. Landlord agrees to provide Tenant, at Landlord’s sole cost, Building
standard signage on the lobby directory board and the principal floor where the
Premises are located in a manner consistent with other tenants in the Building.
 
M. Building Renovations. It is specifically understood and agreed that Landlord
has no obligation and has made no promises to alter, remodel, improve, renovate,
repair or decorate the Premises, Building, or any part thereof and that no
representations respecting the condition of the Premises or the Building have
been made by Landlord to Tenant except as specifically set forth herein or in
the Work Letter. However, Tenant hereby acknowledges that Landlord is currently
renovating or may during the Lease Term renovate, improve, alter, or modify the
Project, the Building and/or the Premises (collectively, “Renovations”). Except
as specifically provided in this Lease, Tenant hereby agrees that such
Renovations shall in no way constitute a constructive eviction of Tenant nor
entitle Tenant to any abatement of Rent. Landlord shall have no responsibility
and shall not be liable to Tenant for any injury to or interference with
Tenant’s business arising from the Renovations, nor shall Tenant be entitled to
any compensation or damages from Landlord for loss of the use of the whole or
any part of the Premises or of Tenant’s personal property or improvements
resulting from the Renovations, or for any inconvenience or annoyance occasioned
by such Renovations. Notwithstanding the foregoing, Landlord shall use
commercially reasonable efforts to perform all Renovations in a manner, whenever
reasonably possible, to minimize any material, adverse or unreasonable
interference with Tenant’s use of or access to the Premises.
 
N. Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, acts of war, terrorist acts, inability to obtain
services, labor, or materials or reasonable substitutes therefor, governmental
actions, civil commotions, fire or other casualty, and other causes beyond the
reasonable control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease (collectively, a “Force Majeure”), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party’s performance caused by a Force Majeure.
 
O. Patriot Act. Tenant represents, warrants and covenants that Tenant (i) is not
listed on the Specially Designated Nationals and Blocked Persons List maintained
by the Office of Foreign Asset Control, Department of the Treasury (“OFAC”)
pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25,
2001)(“Order”) and all applicable provisions of Title III of the USA Patriot Act
(Public Law No. 107-56 (October 26, 2001)); (ii) is not listed on the Denied
Persons List and Entity List maintained by the United States Department of
Commerce; (iii) is not listed on the List of Terrorists and List of Disbarred
Parties maintained by the United States Department of State; (iv) is not listed
on any list or qualification of “Designated Nationals” as defined in the Cuban
Assets Control Regulations 31 C.F.R. Part 515; (v) is not listed on any other
publicly available list of terrorists, terrorist organizations or narcotics
traffickers maintained by the United States Department of State, the United
States Department of Commerce or any other governmental authority or 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”); (vi) is not engaged in
activities prohibited in the Orders; and (vii) has not been convicted, pleaded
nolo contendere, indicted, arraigned or custodially detained on charges
involving money laundering or predicate crimes to money laundering, drug
trafficking, terrorist-related activities or other money laundering predicate
crimes or in connection with the Bank Secrecy Act (31 U.S.C. §§ 5311 et. seq.).
 
 
22

 
 
P. REIT. Landlord and Tenant hereby agree that it is their intent that all Rent
due under this Lease shall qualify as “rents from real property” within the
meaning of Sections 512(b)(3) and 856(d) of the Internal Revenue Code of 1986,
as amended (“Code”), and the U.S. Department of the Treasury Regulations
promulgated thereunder (“Regulations”). In the event that (i) the Code or the
Regulations, or interpretations thereof by the Internal Revenue Service
contained in revenue rulings or other similar public pronouncements, shall be
changed so that any Rent no longer so qualifies as “rent from real property” for
purposes of either said Section 512(b)(3) or Section 856(d) or (ii) Landlord, in
its sole discretion, determines that there is any risk that all or part of any
Rent shall not qualify as “rents from real property” for the purposes of either
said Sections 512(b)(3) or 856(d), Tenant agrees to cooperate with Landlord and
enter into such amendment or amendments to this Lease as Landlord deems
necessary to qualify all Rent as “rents from real property,” provided, however,
that (A) any amendment required under this Section shall be made so as to
produce, to the extent possible, the equivalent (in economic terms) Rent as
payable before the amendment, and (B) in the event that Landlord determines that
an amendment cannot produce economically equivalent Rent as described in clause
(A), the Rent payable under any such amendment shall not be any less favorable
to Tenant than the Rent payable under this Lease immediately prior to such
amendment.  Additionally, no Rent payable under this Lease may be attributable
to personal property unless (i) such personal property is leased under, or in
connection with, the lease of real property hereunder, and (ii) the Rent
attributable to the personal property for each taxable year does not exceed 15%
of the total Rent for the taxable year attributable to both the real and
personal property leased under or in connection with this Lease. The parties
agree to execute such further commercially reasonable instrument as may
reasonably be required by Landlord in order to give effect to the foregoing
provisions of this Section.
 
Q. Applicable Law and Other Matters. This Lease shall be interpreted and
construed under and pursuant to the laws of the State of Washington. Any action
regarding or arising from this Lease shall be brought in the Washington State
Superior or Federal District Courts located in the county where the Property is
located. Time is of the essence of this Lease. In the event an attorney is
engaged by either party to enforce the terms of this Lease or in the event suit
is brought relating to or arising from this Lease, the prevailing party shall be
entitled to recover from the other party its reasonable attorneys’ fees and
costs. Landlord and Tenant hereby waive trial by jury in any action, proceeding
or counterclaim brought by either party against the other on any matters
whatsoever arising out of this Lease, or any other claims.
 
R. Confidentiality. Tenant shall keep the content and all copies of this Lease,
related documents or amendments now or hereafter entered, and all proposals,
materials, information and matters relating thereto strictly confidential, and
shall not disclose, disseminate or distribute any of the same, or permit the
same to occur, except to the extent reasonably required for proper business
purposes by Tenant’s employees, attorneys, insurers, auditors, lenders and
Transferees (and Tenant shall obligate any such parties to whom disclosure is
permitted to honor the confidentiality provisions hereof), and except as may be
required by Law or court proceedings.
 
S. Counterparts. This Lease may be executed in counterparts with the same effect
as if both parties hereto had executed the same document. Both counterparts
shall be construed together and shall constitute a single lease.
 
SECTION 34:   ENTIRE AGREEMENT
 
This Lease, together with the Riders, Exhibits and other documents listed in
Section 1 (which collectively are hereby incorporated where referred to herein
and made a part hereof as though fully set forth), contains all the terms and
provisions between Landlord and Tenant relating to the matters set forth herein
and no prior or contemporaneous agreement or understanding pertaining to the
same shall be of any force or effect, except any such contemporaneous agreement
specifically referring to and modifying this Lease, signed by both parties.
Neither this Lease, nor any Riders or Exhibits referred to above may be
modified, except in writing signed by both parties.
 
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23

 
 
IN WITNESS WHEREOF, the parties have executed this Lease as of the date first
set forth above.
 
LANDLORD:
LOGAN BUILDING LLC,        
 
a Delaware limited liability company      
 
       
 
By:
Unico Boutique Office Portfolio LP, a Delaware limited partnership, Manager
 
 
 
 
 
 
 
 
By:
Unico Boutique Office Portfolio GP LLC, a Delaware limited liability company,
General Partner
 
 
 
 
 
 
 
 
 
By:
Unico Investment Group LLC, a Delaware limited liability company, Member
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Andrew Cox
 
 
 
 
Name:
Andrew Cox
 
 
 
 
Title:
VP

 
TENANT:
VISUALANT INCORPORATED,        
 
 
a Nevada corporation        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/  Ron Erickson
 
 
Name:
Ron Erickson  
 
 
Title:
CEO    
 

 
                     

 
 
24

 

 
LANDLORD ACKNOWLEDGMENT
 
STATE OF WASHINGTON
)
 
 
) ss.
COUNTY OF KING
)
 

 
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 Unico Investment Group LLC, a Delaware limited
liability company, the Member of Unico Boutique Office Portfolio GP LLC, a
Delaware limited liability company, the General Partner of Unico Boutique Office
Portfolio LP, a Delaware limited partnership, the Manager of LOGAN BUILDING LLC,
a Delaware limited liability company, to be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
 
DATED this ______ day of ____________________, 2016.
 
NOTARY PUBLIC in and for the State of Washington, residing at __________________
 
Name (printed or typed)
My appointment expires: ___________________

 
 
TENANT ACKNOWLEDGMENT
 
STATE OF ______________

)
 
 
) ss.
COUNTY OF ____________

)
 

 
I certify that I know or have satisfactory evidence that
__________________________ is the person who appeared before me, and said person
acknowledged that he/she signed this instrument, on oath stated that he/she was
authorized to execute the instrument and acknowledged it as the
_____________________________ of VISUALANT INCORPORATED, a Nevada corporation,
to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
 
DATED this ______ day of ____________________, 2016.
 
NOTARY PUBLIC in and for the State of                           , residing at
__________________
 
Name (printed or typed)
My appointment expires: ___________________

 
 
 
 
25

 
EXHIBIT A
 
(Legal Description of Property)
 
 
LOTS 9 AND 12, BLOCK 17, ADDITION TO THE TOWN OF SEATTLE AS LAID OUT BY A. A.
DENNY (COMMONLY KNOWN AS A. A. DENNY'S 3RD ADDITION TO THE CITY OF SEATTLE),
ACCORDING TO THE PLAT THEREOF, RECORDED IN VOLUME 1 OF PLATS, PAGE(S) 33, IN
KING COUNTY, WASHINGTON;
 
EXCEPT THE SOUTHERLY 5 FEET IN WIDTH OF SAID LOT 12 CONDEMNED IN KING COUNTY
SUPERIOR COURT CAUSE NUMBER 82589 FOR WIDENING OF UNION STREET, AS PROVIDED BY
ORDINANCE NUMBER 18188 OF THE CITY OF SEATTLE;
 
TOGETHER WITH THOSE EASEMENT RIGHTS APPURTENANT TO SAID PREMISES CONTAINED IN
BUILDING AGREEMENT RECORDED UNDER RECORDING NUMBER 8704210116.
 
THE ABOVE ALSO BEING DESCRIBED AS FOLLOWS:
 
COMMENCING AT THE MOST SOUTHERLY CORNER OF SAID LOT 12;
THENCE NORTH 30°38'10" WEST 5.00 FEET TO THE POINT OF BEGINNING;
THENCE CONTINUING NORTH 30°38'10" WEST 114.92 FEET TO THE MOST WESTERLY CORNER
OF LOT 9;
THENCE NORTH 59°22'16" EAST 119.97 FEET TO THE MOST NORTHERLY CORNER OF LOT 9;
THENCE SOUTH 30°37'36" EAST 114.90 FEET TO THE MOST NORTHWESTERLY MARGIN OF
UNION STREET;
THENCE SOUTH 59°21'23" WEST 119.95 FEET TO THE POINT OF BEGINNING;
 
SITUATE IN THE CITY OF SEATTLE, COUNTY OF KING, STATE OF WASHINGTON.
 
 
 
 
 
 
 
 
 
 
 
Exhibit A-1

 

 
EXHIBIT B
 
(Floor Plate Showing Premises)
 
[exhibit_10-33000.jpg]
 
 
 

 
 
Exhibit B-1

 

 
EXHIBIT C
 
(Work Letter)
 
This Work Letter sets forth the terms and conditions relating to the
construction of improvements for the Premises.
 
SECTION 1
 
LANDLORD’S OBLIGATIONS
 
Except for disbursement of the Tenant Improvement Allowance set forth below or
as otherwise set forth in the Lease, Landlord shall not be obligated to make or
pay for any alterations or improvements to the Premises, the Building or the
Project, except that Landlord will demolish one wall, and provide a new ceiling
and new PIU’s, all of which shall be at Landlord’s sole cost and expense.
 
SECTION 2
 
TENANT IMPROVEMENTS
 
2.1           Tenant Improvement Allowance; Space Planning Allowance. Subject to
the terms and conditions contained herein, Tenant shall be entitled to a
one-time tenant improvement allowance (the “Tenant Improvement Allowance”) in
the amount of $23,575.00 (i.e., $25.00 per rentable square foot) for the costs
relating to the initial design and construction of Tenant’s improvements (the
“Tenant Improvements”), as further described in Section 2.2.1 below. In no event
shall Landlord be obligated to make disbursements pursuant to this Work Letter
in a total amount which exceeds the Tenant Improvement Allowance.
Notwithstanding any provision to the contrary contained herein, to the extent
any portion of the Tenant Improvement Allowance is unused by Tenant as of the
date which is the first anniversary of the Lease Commencement Date (the “Outside
Date”), then the remaining balance thereof shall revert to Landlord, and Tenant
shall have no right to use such amount for any remaining improvements or
alterations, nor as a Rent credit or cash allowance.
 
2.2           Disbursement of the Tenant Improvement Allowance.
 
2.2.1           Tenant Improvement Allowance Items. Except as otherwise set
forth in this Work Letter, the Tenant Improvement Allowance shall be disbursed
by Landlord only for the following items and costs (collectively the “Tenant
Improvement Allowance Items”):
 
2.2.1.1                      Payment of the fees of the Architect (and any other
architects retained by Tenant, or by Architect) and the Engineers, as those
terms are defined in Section 3.1 of this Work Letter, and payment of the fees of
other professional services provided to Tenant in the design and construction of
the Tenant Improvements, and payment of the actual and reasonable third party
fees incurred by, and the cost of documents and materials supplied by, Landlord
and Landlord’s consultants in connection with the preparation and review of the
“Construction Drawings,” as that term is defined in Section 3.1 of this Work
Letter;
 
2.2.1.2                      The payment of plan check, permit and license fees
relating to construction of the Tenant Improvements;
 
2.2.1.3                      The cost of construction of the Tenant
Improvements, including, without limitation, testing and inspection costs,
freight elevator usage, hoisting and trash removal costs, and contractors’ fees
and general conditions;
 
2.2.1.4                  The cost of any changes in the existing Building
structure, capacities or systems (“Base Building”) when such changes are
required by the Construction Drawings (including, without limitation, if such
changes are due to the fact that such work is prepared on an unoccupied basis),
such cost to include all direct architectural and/or engineering fees and
expenses incurred in connection therewith;
 
2.2.1.5                      The cost of any changes to the Construction
Drawings or Tenant Improvements required by all applicable building codes (the
“Code”);
 
2.2.1.6                      Sales and use taxes;
 
2.2.1.7                 A construction supervision fee payable to Unico
Properties LLC (Landlord’s property manager) equal to 4.0% of the Final Costs
(as defined below) of the Tenant Improvements; and
 
2.2.1.8                      Any other out-of-pocket costs expended by Landlord
in payment of cost items included in the Final Costs (as defined in Section
4.2.1 below) as agreed by Tenant, or as a result of Tenant’s failure to perform
its obligations in connection with the construction of the Tenant Improvements.
 
2.2.2           Disbursement of Tenant Improvement Allowance. Upon written
request from Tenant, Landlord shall disburse the Tenant Improvement Allowance
(or the remaining portion thereof after disbursement to third parties for any
Tenant Improvement Allowance Items) to Tenant within thirty (30) days after
Tenant has opened for business, completed construction of the Tenant
Improvements, and delivered to Landlord the following:
 
 
Exhibit C-1

 
 
2.2.2.1                       A detailed Final Costs statement showing the
actual total costs of construction of the Tenant Improvements;
 
2.2.2.2                   A complete list of the names, addresses, telephone
numbers and contract amounts for all Tenant's contractor, subcontractors,
vendors and/or suppliers of labor and/or materials for Tenant's Work providing
work, services and/or material in excess of $5,000.00 (“Major Contractors”);
 
2.2.2.3                      All mechanics' lien releases or other lien releases
on account of Tenant's Work from Major Contractors, which are notarized,
unconditional and in recordable form or in such form as Landlord shall have
approved;
 
2.2.2.4                       Copies of all building permits, indicating
inspection and approval of the Premises by the issuer of said permits;
 
2.2.2.5                      An architect's certification that the Premises have
been constructed in accordance with the Approved Working Drawings (defined
below); and
 
2.2.2.6                  (i) Final unconditional waivers of liens, contractors'
affidavits, and architects' certificates in such form as may be required by
Landlord and Landlord's title insurance company from all parties performing
labor or supplying materials or services in connection with the Tenant
Improvements showing that all of said parties have been compensated in full and
waiving all liens, to the extent not already waived as provided above; (ii) a
certificate of occupancy or equivalent as required to occupy the Premises;
(iii) "as built" drawings and other final documentation; and (iv) a detailed
breakdown of Tenant's total construction costs. The “as built” drawings and
other final documentation shall include the following:
 
●
Electrical sub letter confirming electrical panels updated with all circuits
●
HVAC balance reports
●
Electrical phase balance reports
●
Updated fire alarm points list
●
As – built drawings in ACAD and PDF
●
O&M manuals inclusive of all submittals and finishes
●
Warranties of Contractor and subcontractors
●
AutoCAD files in an AIA standard layering system, and pdf disk set via e-mail of
architectural and MEP
●
As built controls instruction and sequence of operation
●
Fan, pump, and balancing valve curves
●
Updated valve schedules
●
Valve schedule indicating valve tag number, location by room number, valve
purpose and size, indicate damper locations and purpose. This information to be
included for the following systems: 1. Refrigerant system 2. HVAC system 3.
Exhaust system 4. Plumbing and HVAC piping systems 5. Temperature control system
6. Any other system installed but not listed above.
 
In no event shall the portion of the Tenant Improvement Allowance disbursed
directly to Tenant exceed the actual out-of-pocket costs incurred by Tenant for
construction of the Tenant Improvements.
 
SECTION 3
 
CONSTRUCTION DRAWINGS
 
3.1           Selection of Architect/Construction Drawings. Tenant shall retain
an architect/space planner reasonably approved by Landlord (the “Architect”) to
prepare the “Construction Drawings,” as that term is defined in this Section
3.1. Tenant shall retain engineering consultants approved by Landlord (the
“Engineers”) to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, life safety, and
sprinkler work in the Premises, which work is not part of the Base Building.
Landlord’s approval of the Engineers shall not be unreasonably withheld and
Landlord shall be deemed to have approved the Engineers proposed by Tenant if
Landlord does not provide written notice of disapproval within five (5) business
days after Tenant’s written request for approval. The plans and drawings to be
prepared by Architect and the Engineers hereunder shall be known collectively as
the “Construction Drawings.” All Construction Drawings shall be subject to
Landlord’s approval, which shall not be unreasonably withheld, conditioned or
delayed. Tenant and Architect shall verify, in the field, the dimensions and
conditions as shown on the relevant portions of the Base Building plans, and
Tenant and Architect shall be solely responsible for the same, and Landlord
shall have no responsibility in connection therewith. Landlord’s review of the
Construction Drawings as set forth in this Section 3, shall be for its sole
purpose and shall not imply Landlord’s review of the same, or obligate Landlord
to review the same, for quality, design, Code compliance or other like matters.
Accordingly, notwithstanding that any Construction Drawings are reviewed by
Landlord or its space planner, architect, engineers and consultants, and
notwithstanding any advice or assistance which may be rendered to Tenant by
Landlord or Landlord’s space planner, architect, engineers, and consultants,
Landlord shall have no liability whatsoever in connection therewith and shall
not be responsible for any omissions or errors contained in the Construction
Drawings, and Tenant’s waiver and indemnity set forth in this Lease shall
specifically apply to the Construction Drawings.
 
 
Exhibit C-2

 
 
3.2           Final Space Plan. Tenant shall supply Landlord with four (4)
copies signed by Tenant of its final space plan for the Premises before any
architectural working drawings or engineering drawings have been commenced. The
final space plan (the “Final Space Plan”) shall include a layout and designation
of all offices, rooms and other partitioning, their intended use, and equipment
to be contained therein, as well as the storefront and façade of the Premises.
Landlord may request clarification or more specific drawings for special use
items not included in the Final Space Plan. Landlord shall advise Tenant within
five (5) business days after Landlord’s receipt of the Final Space Plan for the
Premises if the same is unsatisfactory or incomplete in any respect. If Tenant
is so advised, Tenant shall promptly cause the Final Space Plan to be revised to
correct any deficiencies or other matters Landlord may reasonably require.
Notwithstanding anything to the contrary in this Section 3.2, Landlord shall not
unreasonably withhold, condition or delay its approval of the Final Space Plan;
provided, however, that to the extent that such Final Space Plan may (i) affect
the exterior of the Building, (ii) adversely affect the structural portions of
the Building, (iii) adversely affect the Building systems and equipment, (iv)
unreasonably interfere with any other occupant’s normal and customary office
operation, (v) fail to comply with Applicable Laws, or (vi) fail to meet or
exceed the Specifications, then Landlord may grant or withhold its approval of
such Final Space Plan in its sole discretion.
 
3.3           Final Working Drawings. After the Final Space Plan has been
approved by Landlord, Tenant shall supply the Engineers with a complete listing
of standard and non-standard equipment and specifications, including, without
limitation, B.T.U. calculations, electrical requirements and special electrical
receptacle requirements for the Premises, to enable the Engineers and the
Architect to complete the “Final Working Drawings” (as that term is defined
below) in the manner as set forth below. Upon the approval of the Final Space
Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the
Engineers to complete the architectural and engineering drawings for the
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the “Final Working Drawings”) and shall submit
the same to Landlord for Landlord’s approval. Tenant shall supply Landlord with
four (4) copies signed by Tenant of such Final Working Drawings. Landlord shall
advise Tenant within five (5) business days after Landlord’s receipt of the
Final Working Drawings for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall immediately
revise the Final Working Drawings in accordance with such review and any
disapproval of Landlord in connection therewith and resubmit them to Landlord.
Landlord shall advise Tenant within five (5) business days after Landlord’s
receipt of any revised Final Working Drawings for the Premises if the same is
unsatisfactory or incomplete in any respect. Notwithstanding anything to the
contrary in this Section 3.3, Landlord shall not unreasonably withhold,
condition or delay its approval of the Final Working Drawings; provided,
however, that to the extent that such Final Working Drawings may (i) affect the
exterior appearance of the Building, (ii) adversely affect the structural
portions of the Building, (iii) adversely affect the Building systems and
equipment, (iv) unreasonably interfere with any other occupant’s normal and
customary office operation, (v) fail to comply with Applicable Laws, or (vi)
fail to meet or exceed the Specifications, then Landlord may grant or withhold
its approval of such Final Working Drawings in its sole discretion. Once
approved by Landlord, the Final Working Drawings are the “Approved Working
Drawings”.
 
3.4           Approved Working Drawings. After approval by Landlord of the Final
Working Drawings, Tenant may submit the same to the appropriate municipal
authorities for all applicable building permits. Tenant hereby agrees that
neither Landlord nor Landlord’s consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Premises and that
obtaining the same shall be Tenant’s responsibility; provided, however, that
Landlord shall timely cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld,
conditioned or delayed.
 
SECTION 4
 
CONSTRUCTION OF THE TENANT IMPROVEMENTS
 
4.1           Tenant’s Selection of Contractors.
 
4.1.1           The Contractor. A general contractor shall be retained by Tenant
to construct the Tenant Improvements. Such general contractor (“Contractor”)
shall be selected by Tenant subject to Landlord’s prior approval, which approval
shall not be unreasonably withheld, conditioned or delayed. Tenant shall have
the right, but not the obligation, to submit the Tenant Improvements for
competitive bidding to two (2) or more general contractors.
 
4.1.2           Tenant’s Agents. All subcontractors used by Tenant (such
subcontractors, and the Contractor, to be known collectively as “Tenant’s
Agents”) must be approved in writing by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed. If Landlord does not approve any
of Tenant’s proposed subcontractors, Tenant shall submit other proposed
subcontractors for Landlord’s written approval. Landlord shall either approve or
disapprove (with specific reasons for such disapproval) such Tenant’s Agents
within five (5) days after Landlord’s receipt of Tenant’s request. The
subcontractors set forth on Annex B hereto are hereby approved by Landlord.
 
 
Exhibit C-3

 
 
4.2           Construction of Tenant Improvements by Tenant’s Agents.
 
4.2.1           Construction Contract; Cost Budget. Prior to the commencement of
the construction of the Tenant Improvements, and after Tenant has accepted all
bids for the Tenant Improvements, Tenant shall provide Landlord with a detailed
breakdown, by trade, of the final costs to be incurred or which have been
incurred, in connection with the design and construction of the Tenant
Improvements to be performed by or at the direction of Tenant or the Contractor,
which costs form a basis for the amount of the construction contract and general
conditions with Contractor (the “Final Costs”).
 
4.2.2           Tenant’s Agents.
 
4.2.2.1                      Landlord’s General Conditions for Tenant’s Agents
and Tenant Improvement Work. Tenant’s and Tenant’s Agent’s construction of the
Tenant Improvements shall comply with the following: (i) the Tenant Improvements
shall be constructed in strict accordance with the Approved Working Drawings;
(ii) Tenant’s Agents shall submit schedules of all work relating to the Tenant’s
Improvements to Contractor and Contractor shall, within five (5) business days
of receipt thereof, inform Tenant’s Agents of any changes which are necessary
thereto, and Tenant’s Agents shall adhere to such corrected schedule; and (iii)
Tenant shall abide by Landlord’s rules and regulations with respect to the use
of freight, loading dock and service elevators, storage of materials,
coordination of work with the contractors of other tenants, and any other matter
in connection with this Work Letter, including, without limitation, the
construction of the Tenant Improvements, which rules and regulations are
attached hereto as Annex C. Tenant shall not pay a construction supervision or
management fee to Landlord in connection with the Tenant Improvements (but a
construction supervision fee shall be included as a Tenant Improvement Allowance
Item as provided in Section 2.2 above).
 
4.2.2.2                      Indemnity. Tenant’s indemnity of Landlord as set
forth in this Lease shall also apply with respect to any and all third party
claims for costs, losses, damages, injuries and liabilities related in any way
to any act or omission of Tenant or Tenant’s Agents, or anyone directly or
indirectly employed by any of them in connection with the Tenant Improvements,
or in connection with Tenant’s non-payment of any amount arising out of the
Tenant Improvements and/or Tenant’s disapproval of all or any portion of any
request for payment.
 
4.2.2.3                      Insurance Requirements.
 
4.2.2.3.1                      General Coverages. All of Tenant’s Agents shall
carry (a) worker’s compensation insurance as required by law covering all of
their respective employees, (b) Employer’s Liability with minimum coverages of
minimum of $500,000 each accident; $500,000 disease, policy limit; $500,000
disease, per employee; (c) Broad Form Commercial General Liability (naming
Landlord and its property manager as additional insureds) with policy limits of
$1,000,000 per occurrence Combined Single Limit and $3,000,000 aggregate (i.e.,
such insurance shall be broad form and shall include contractual liability,
personal injury protection and completed operations coverage); (d) Auto
Liability with coverage of at least $1,000,000; and (e) Property Insurance
coverage for tools and equipment brought onto and/or used on any Property by the
applicable contractor in an amount equal to the replacement costs of all such
tools and equipment.
 
4.2.2.3.2                      Builder’s Risk Coverages. Tenant or Tenant’s
Contractor shall carry “Builder’s All Risk” insurance in an amount approved by
Landlord covering the construction of the Tenant Improvements, and such other
insurance as Landlord may reasonably require, it being understood and agreed
that the Tenant Improvements shall be insured by Tenant pursuant to this Lease
immediately upon completion thereof. Such insurance shall be in amounts and
shall include such extended coverage endorsements as may be reasonably required
by Landlord including, but not limited to, the requirement that all of Tenant’s
Agents shall carry excess liability and Products and Completed Operation
Coverage insurance, each in amounts not less than $500,000 per incident,
$1,000,000 in aggregate, and in form and with companies as are required to be
carried by Tenant as set forth in this Lease.
 
4.2.2.3.3                      General Terms. Certificates for all insurance
carried pursuant to this Section 4.2.2.3 shall be delivered to Landlord before
the commencement of construction of the Tenant Improvements and before the
Contractor’s equipment is moved onto the site. All such policies of insurance
must contain a provision that the company writing said policy will give Landlord
thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance. In the event
that the Tenant Improvements are damaged by any cause during the course of the
construction thereof, Tenant shall immediately direct its Contractor or Tenants
Agents as appropriate to repair the same at Tenant’s sole cost and expense.
Tenant’s Agents shall maintain all of the foregoing insurance coverage in force
until the Tenant Improvements are fully completed and accepted by Landlord
pursuant to this Work Letter, except for any Products and Completed Operation
Coverage insurance required by Landlord, which is to be maintained for one (1)
year following completion of the work and acceptance by Landlord and Tenant. All
policies carried under this Section 4.2.2.3 shall insure Landlord and Tenant, as
their interests may appear, as well as Contractor and Tenant’s Agents. All
insurance, except Workers’ Compensation, maintained by Tenant’s Agents shall
preclude subrogation claims by the insurer against anyone insured thereunder.
Such insurance shall provide that it is primary insurance as respects the owner
and that any other insurance maintained by owner is excess and noncontributing
with the insurance required hereunder. The requirements for the foregoing
insurance shall not derogate from the provisions for indemnification of Landlord
by Tenant under Section 4.2.2.2 of this Work Letter. Landlord may, in its
reasonable discretion, require Tenant to obtain a lien and completion bond or
some alternate form of security reasonably satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of the Tenant Improvements and
naming Landlord as a co-obligee.
 
 
Exhibit C-4

 
 
4.2.3           Governmental Compliance. The Tenant Improvements shall comply in
all respects with the following: (i) the Code and other state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer’s specifications.
 
4.2.4           Inspection by Landlord. Upon reasonable prior notice to Tenant,
Landlord shall have the right to inspect the Tenant Improvements at all times,
provided however, that Landlord’s failure to inspect the Tenant Improvements
shall in no event constitute a waiver of any of Landlord’s rights hereunder nor
shall Landlord’s inspection of the Tenant Improvements constitute Landlord’s
approval of the same. Landlord shall conduct any such inspections in a manner so
as to minimize any disruption of construction of the Tenant Improvements. Should
Landlord reasonably and in good faith disapprove any portion of the Tenant
Improvements, Landlord shall notify Tenant in writing of such disapproval and
shall specify the items disapproved. Any such reasonable and good faith
disapproval by Landlord of any portion of the Tenant Improvements shall be
rectified by Tenant at no expense to Landlord, provided however, that in the
event Landlord determines that a defect or deviation exists or disapproves of
any matter in connection with any portion of the Tenant Improvements and such
defect, deviation or matter might adversely affect the mechanical, electrical,
plumbing, heating, ventilating and air conditioning or life-safety systems of
the Building, the structure or exterior appearance of the Building or any other
tenant’s use of such other tenant’s leased premises, Landlord may, take such
action as Landlord deems necessary, at Tenant’s expense and without incurring
any liability on Landlord’s part, to correct any such defect, deviation and/or
matter, including, without limitation, causing the cessation of performance of
the construction of the Tenant Improvements until such time as the defect,
deviation and/or matter is corrected to Landlord’s satisfaction.
 
4.2.5           Meetings. Commencing upon the execution of this Lease, Tenant
shall hold weekly meetings at a reasonable time, with the Architect and the
Contractor regarding the progress of the preparation of Construction Drawings
and the construction of the Tenant Improvements, which meetings may be held by
teleconference or at a mutually convenient location in the Seattle area agreed
upon by Tenant and Landlord, and Landlord and/or its agents shall receive prior
notice of, and shall have the right to attend, all such meetings, and, upon
Landlord’s request, certain of Tenant’s Agents shall attend such meetings. In
addition, minutes shall be taken at all such meetings, a copy of which minutes
shall be promptly delivered to Landlord.
 
4.3           Copy of Record Set of Plans. At the conclusion of construction,
(i) Tenant shall cause the Architect and Contractor (A) to update the Approved
Working Drawings as necessary to reflect all changes made to the Approved
Working Drawings during the course of construction, (B) to certify to the best
of their knowledge that the “record-set” of as-built drawings are true and
correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Landlord two (2) sets of copies of such record set
of drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.
 
SECTION 5
 
MISCELLANEOUS
 
5.1           Representatives. Tenant’s Representative means _________________
(phone: ______________; e-mail: _________________). Until further notice to
Landlord, such Tenant’s Representative shall have full authority and
responsibility to act on behalf of the Tenant as required in this Work Letter.
Landlord’s Representative shall mean Vicki Fehl (phone: 206-628-5060; e-mail:
victoriaf@unicoprop.com) and Rob Lavergne (phone: 206-628-5066; e-mail:
robl@unicoprop.com).
 
5.2           Time of the Essence in This Work Letter. Unless otherwise
indicated, all references herein to a “number of days” shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by Landlord,
the procedure for preparation of the document and approval thereof shall be
repeated until the document is approved by Landlord.
 
5.3           Tenant’s Lease Default. Notwithstanding any provision to the
contrary contained in this Lease, if an event of default as described in the
Lease has occurred at any time on or before the completion of the Premises, and
such default is not cured within the applicable cure period set forth in the
Lease, then (i) in addition to all other rights and remedies granted to Landlord
pursuant to the Lease, Landlord shall have the right to withhold payment of all
or any portion of the Tenant Improvement Allowance until such time as such
default is cured pursuant to the terms of the Lease and/or Landlord may cause
Contractor to cease the construction of the Premises until such time as such
default is cured pursuant to the terms of the Lease (in which case, Tenant shall
be responsible for any delay in the completion of the Premises caused by such
work stoppage), and (ii) all other obligations of Landlord under the terms of
this Work Letter shall be forgiven until such time as such default is cured
pursuant to the terms of the Lease (in which case, Tenant shall be responsible
for any delay in the completion of the Premises caused by such inaction by
Landlord).
 
 
Exhibit C-5

 
 
RIDER ONE
 
RULES
 
(1) Access to Property. On Saturdays, Sundays and Holidays, and on other days
between the hours of 6:00 P.M. and 8:00 A.M. the following day, or such other
hours as Landlord shall determine from time to time, access to and within the
Property and/or to the passageways, lobbies, entrances, exits, loading areas,
corridors, elevators or stairways and other areas in the Property may be
restricted and access gained by use of a key to the outside doors of the
Property, or pursuant to such security procedures Landlord may from time to time
impose. Landlord shall in all cases retain the right to control and prevent
access to such areas by Persons engaged in activities which are illegal or
violate these Rules, or whose presence in the judgment of Landlord shall be
prejudicial to the safety, character, reputation and interests of the Property
and its tenants (and Landlord shall have no liability in damages for such
actions taken in good faith). No Tenant and no employee or invitee of Tenant
shall enter areas reserved for the exclusive use of Landlord, its employees or
invitees or other Persons. Tenant shall keep doors to corridors and lobbies
closed except when persons are entering or leaving.
 
(2) Signs. Tenant shall not paint, display, inscribe, maintain or affix any
sign, placard, picture, advertisement, name, notice, lettering or direction on
any part of the outside or inside of the Property, or on any part of the inside
of the Premises which can be seen from the outside of the Premises without the
prior consent of Landlord, and then only such name or names or matter and in
such color, size, style, character and material, and with professional
designers, fabricators and installers as may be first approved or designated by
Landlord in writing. Landlord shall prescribe the suite number and
identification sign for the Premises (which shall be prepared and installed by
Landlord at Tenant’s expense). Landlord reserves the right to remove at Tenant’s
expense all matter not so installed or approved without notice to Tenant.
 
(3) Window and Door Treatments. Tenant shall not place anything or allow
anything to be placed in the Premises near the glass of any door, partition,
wall or window which may be unsightly from outside the Premises, and Tenant
shall not place or permit to be placed any item of any kind on any window ledge
or on the exterior walls. Blinds, shades, awnings or other forms of inside or
outside window ventilators or similar devices, shall not be placed in or about
the outside windows or doors in the Premises except to the extent, if any, that
the design, character, shape, color, material and make thereof is first approved
or designated by the Landlord. Tenant shall not install or remove any solar tint
film from the windows.
 
(4) Lighting and General Appearance of Premises. Landlord reserves the right to
designate and/or approve in writing all internal lighting that may be visible
from the public, common or exterior areas. The design, arrangement, style,
color, character, quality and general appearance of the portion of the Premises
visible from public, common and exterior areas, and contents of such portion of
the Premises, including furniture, fixtures, signs, art work, wall coverings,
carpet and decorations, and all changes, additions and replacements thereto
shall at all times have a neat, professional, attractive, first class office
appearance.
 
(5) Property Trade Name, Likeness, Trademarks. Tenant shall not in any manner
use the name of the Property for any purpose, or use any trade names or
trademarks used by Landlord, any other tenant, or its affiliates, or any picture
or likeness of the Property for any purpose other than that of the business
address of Tenant, in any letterheads, envelopes, circulars, notices,
advertisements, containers, wrapping or other material.
 
(6) Deliveries and Removals. Furniture, freight and other large or heavy items,
and all other deliveries may be brought into the Property only at times and in
the manner designated by Landlord, and always at the Tenant’s sole
responsibility and risk. Landlord may inspect items brought into the Property or
Premises with respect to weight or dangerous nature or compliance with this
Lease or Laws. Landlord may (but shall have no obligation to) require that all
furniture, equipment, cartons and other items removed from the Premises or the
Property be listed and a removal permit therefor first be obtained from
Landlord. Tenant shall not take or permit to be taken in or out of other
entrances or elevators of the Property, any item normally taken, or which
Landlord otherwise reasonably requires to be taken, in or out through service
doors or on freight elevators. Landlord may impose reasonable charges and
requirements for the use of freight elevators and loading areas, and reserves
the right to alter schedules without notice. Any hand carts used at the Property
shall have rubber wheels and sideguards, and no other material handling
equipment may be brought upon the Property without Landlord’s prior written
approval.
 
(7) Outside Vendors. Tenant shall not obtain for use upon the Premises ice,
drinking water, vending machine, towel, janitor and other services, except from
Persons designated or approved by Landlord. Any Person engaged by Tenant to
provide any other services shall be subject to scheduling and direction by the
manager or security personnel of the Property. Vendors must use freight
elevators and service entrances.
 
(8) Overloading Floors; Vaults. Tenant shall not overload any floor or part
thereof in the Premises, or Property, including any public corridors or
elevators therein bringing in or removing any large or heavy items, and Landlord
may prohibit, or direct and control the location and size of, safes and all
other heavy items and require at Tenant’s expense supplementary supports of such
material and dimensions as Landlord may deem necessary to properly distribute
the weight.
 
 
Rider One - 1

 
 
(9) Locks and Keys. Tenant shall use such standard key system designated by
Landlord on all keyed doors to and within the Premises, excluding any permitted
vaults or safes (but Landlord’s designation shall not be deemed a representation
of adequacy to prevent unlawful entry or criminal acts, and Tenant shall
maintain such additional insurance as Tenant deems advisable for such events).
Tenant shall not attach or permit to be attached additional locks or similar
devices to any door or window, change existing locks or the mechanism thereof,
or make or permit to be made any keys for any door other than those provided by
Landlord. If more than two keys for one lock are desired, Landlord will provide
them upon payment of Landlord’s charges. In the event of loss of any keys
furnished by Landlord, Tenant shall pay Landlord’s reasonable charges therefor.
The term “key” shall include mechanical, electronic or other keys, cards and
passes. Landlord shall not be liable for the consequences of admitting by pass
key or refusing to admit to the Premises the Tenant, Tenant’s agent or employees
or other persons claiming the right of admittance.
 
(10) Utility Closets and Connections. Landlord reserves the right to control
access to and use of, and monitor and supervise any work in or affecting, the
“wire” or telephone, electrical, plumbing or other utility closets, the Systems
and Equipment, and any changes, connections, new installations, and wiring work
relating thereto (or Landlord may engage or designate an independent contractor
to provide such services). Tenant shall obtain Landlord’s prior written consent
for any such access, use and work in each instance, and shall comply with such
requirements as Landlord may impose, and the other provisions of the Lease
respecting electric installations and connections, telephone Lines and
connections, and alterations generally. Tenant shall have no right to use any
broom closets, storage closets, janitorial closets, or other such closets, rooms
and areas whatsoever. Tenant shall not install in or for the Premises any
equipment which requires more electric current than Landlord is required to
provide under this Lease, without Landlord’s prior written approval, and Tenant
shall ascertain from Landlord the maximum amount of load or demand for or use of
electrical current which can safely be permitted in and for the Premises, taking
into account the capacity of electric wiring in the Property and the Premises
and the needs of tenants of the Property, and shall not in any event connect a
greater load than such safe capacity.
 
(11) Plumbing Equipment. The toilet rooms, urinals, wash bowls, drains, sewers
and other plumbing fixtures, equipment and lines shall not be misused or used
for any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein.
 
(12) Trash. All garbage, refuse, trash and other waste shall be kept in the kind
of container, placed in the areas, and prepared for collection in the manner and
at the times and places specified by Landlord, subject to Lease provisions
respecting Hazardous Materials. Landlord reserves the right to require that
Tenant participate in any recycling program designated by Landlord.
 
(13) Alcohol, Drugs, Food and Smoking. Landlord reserves the right to exclude or
expel from the Property any person who, in the judgment of Landlord, is
intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of any of these Rules. Tenant shall not at any
time manufacture or sell any spirituous, fermented, intoxicating or alcoholic
liquors on the Premises, nor permit the same to occur. Tenant shall not at any
time cook, sell, purchase or give away, food in any form by or to any of
Tenant’s agents or employees or any other parties on the Premises, nor permit
any of the same to occur (other than in microwave ovens and coffee makers
properly maintained in good and safe working order and repair in lunch rooms or
kitchens for employees as may be permitted or installed by Landlord, which does
not violate any Laws or bother or annoy any other tenant). Tenant and its
employees shall not smoke tobacco on any part of the Property (including
exterior areas) except those areas, if any, that are designated or approved as
smoking areas by Landlord.
 
(14) Use of Common Areas; No Soliciting. Tenant shall not use the Common Areas,
including areas adjacent to the Premises, for any purpose other than ingress and
egress, and any such use thereof shall be subject to the other provisions of
this Lease, including these Rules. Without limiting the generality of the
foregoing, Tenant shall not allow anything to remain in any passageway,
sidewalk, court, corridor, stairway, entrance, exit, elevator, parking or
shipping area, or other area outside the Premises. Tenant shall not use the
Common Areas to canvass, solicit business or information from, or distribute any
item or material to, other tenants or invitees of the Property. Tenant shall not
make any room to room canvass to solicit business or information or to
distribute any item or material to or from other tenants of the Property and
shall not exhibit, sell or offer to sell, use, rent or exchange any products or
services in or from the Premise unless ordinarily embraced within the Tenant’s
use of the Premises expressly permitted in the Lease.
 
(15) Energy and Utility Conservation. Tenant shall not waste electricity, water,
heat or air conditioning or other utilities or services, and agrees to cooperate
fully with Landlord to assure the most effective and energy efficient operation
of the Property and shall not allow the adjustment (except by Landlord’s
authorized Property personnel) of any controls. Tenant shall not obstruct, alter
or impair the efficient operation of the Systems and Equipment, and shall not
place any item so as to interfere with air flow. Tenant shall keep corridor
doors closed and shall not open any windows, except that if the air circulation
shall not be in operation, windows which are openable may be opened with
Landlord’s consent. If reasonably requested by Landlord (and as a condition to
claiming any deficiency in the air-conditioning or ventilation services provided
by Landlord), Tenant shall close any blinds or drapes in the Premises to prevent
or minimize direct sunlight.
 
 
Rider One - 2

 
 
(16) Unattended Premises. Before leaving the Premises unattended, Tenant shall
close and securely lock all doors or other means of entry to the Premises and
shut off all lights and water faucets in the Premises (except heat to the extent
necessary to prevent the freezing or bursting of pipes).
 
(17) Going-Out-Of-Business Sales and Auctions. Tenant shall not use, or permit
any other party to use, the Premises for any distress, fire, bankruptcy,
close-out, “lost our lease” or going-out-of-business sale or auction. Tenant
shall not display any signs advertising the foregoing anywhere in or about the
Premises. This prohibition shall also apply to Tenant’s creditors.
 
(18) Labor Harmony. Tenant shall not use (and upon notice from Landlord shall
cease using) contractors, services, workmen, labor, materials or equipment, or
labor and employment practices that, in Landlord’s good faith judgment, may
cause strikes, picketing or boycotts or disturb labor harmony with the workforce
or trades engaged in performing other work, labor or services in or about the
Property.
 
(19) Prohibited Activities. Tenant shall not: (i) use strobe or flashing lights
in or on the Premises, (ii) install or operate any internal combustion engine,
boiler, machinery, refrigerating, heating or air conditioning equipment in or
about the Premises, (iii) use the Premises for housing, lodging or sleeping
purposes or for the washing of clothes, (iv) place any radio or television
antennae other than inside of the Premises, (v) operate or permit to be operated
any musical or sound producing instrument or device which may be heard outside
the Premises, (vi) use any source of power other than electricity, (vii) operate
any electrical or other device from which may emanate electrical,
electromagnetic, energy, microwave, radiation or other waves or fields which may
interfere with or impair radio, television, microwave, or other broadcasting or
reception from or in the Property or elsewhere, or impair or interfere with
computers, faxes or telecommunication lines or equipment at the Property or
elsewhere, or create a health hazard, (viii) bring or permit any bicycle or
other vehicle, or dog (except in the company of a blind person or except where
specifically permitted) or other animal or bird in the Premises or Building,
(ix) make or permit objectionable noise, vibration or odor to emanate from the
Premises, (x) do anything in or about the Premises or Property that is illegal,
immoral, obscene, pornographic, or anything that may in Landlord’s good faith
opinion create or maintain a nuisance, cause physical damage to the Premises or
Property, interfere with the normal operation of the Systems and Equipment,
impair the appearance, character or reputation of the Premises or Property,
create waste to the Premises or Property, cause demonstrations, protests,
loitering, bomb threats or other events that may require evacuation of the
Building, (xi) advertise or engage in any activities which violate any code of
ethics or licensing requirements of any professional or business organization,
(xii) throw or permit to be thrown or dropped any item from any window or other
opening in the Property, (xiii) use the Premises for any purpose, or permit upon
the Premises or Property anything, that may be dangerous to persons or property
(including firearms or other weapons (whether or not licensed or used by
security guards) or any explosive or combustible items or materials) (xiv) place
vending or game machines in the Premises, except vending machines for employees
which shall be at Tenant’s sole cost and expense and only upon prior notice to
and consent of Landlord, (xv) adversely affect the indoor air quality of the
Premises or Property, (xvi) use the Premises for cooking or food preparation
other than preparation of coffee, tea and similar beverages, or customary
microwave use, for Tenant and its employees, or (xvii) do or permit anything to
be done upon the Premises or Property in any way tending to disturb, bother,
annoy or interfere with Landlord or any other tenant at the Property or the
tenants of neighboring property, or otherwise disrupt orderly and quiet use and
occupancy of the Property.
 
(20) Transportation Management. Tenant shall comply with all present or future
programs intended to manage parking, transportation or traffic in and around the
Property, and in connection therewith, Tenant shall take responsible action for
the transportation planning and management of all employees located at the
Premises by working directly with Landlord, any governmental transportation
management organization or any other transportation-related committees or
entities.
 
(21) Parking. Subject to any contrary provisions of this Lease, if the Property
now or hereafter contains, or Landlord has obtained the right to use for the
Property, a parking garage, structure, facility or area, the following Rules
shall apply therein:
 
(i) Parking shall be available in areas designated by Landlord from time to
time, and for such daily or monthly charges as Landlord may establish from time
to time. Parking for Tenant and its employees and visitors shall be on a “first
come, first served,” unassigned basis, in common with Landlord and other tenants
at the Property, and their employees and visitors, and other Persons to whom
Landlord shall grant the right or who shall otherwise have the right to use the
same. However, in no event shall Tenant and Tenant’s employees and visitors use
more spaces than the number derived by applying Tenant’s Pro Rata Share (as
defined in the Lease) to the total number of unassigned spaces in the area or
areas designated by Landlord from time to time to serve the Premises. In
addition, Landlord reserves the right to: (x) adopt additional requirements or
procedures pertaining to parking, including systems with charges favoring
carpooling, and validation systems, (y) assign specific spaces, and reserve
spaces for small and other size cars, disabled persons, and other tenants,
customers of tenants or other parties, and (z) restrict or prohibit full size
vans and other large vehicles.
 
(ii) Monthly fees shall be paid in advance prior to the first of each month.
Failure to do so will automatically cancel parking privileges, and incur a
charge at the posted daily parking rate. No deductions from the monthly rate
will be made for days on which the Garage is not used by Tenant or its
designees. In case of any violation of these rules, Landlord may also refuse to
permit the violator to park, and may remove the vehicle owned or driven by the
violator from the Property without liability whatsoever, at such violator’s risk
and expense. Landlord reserves the right to close all or a portion of the
parking areas or facilities in order to make repairs or perform maintenance
services, or to alter, modify, re-stripe or renovate the same, or if required by
casualty, strike, condemnation, act of God, Law or governmental requirement or
guideline, termination or modification of any lease or other agreement by which
Landlord obtained parking rights, or any other reason beyond Landlord’s
reasonable control. In the event access is denied for any reason, any monthly
parking charges shall be abated to the extent access is denied, as Tenant’s sole
recourse.
 
 
Rider One - 3

 
 
(iii) Hours shall be reasonably established by Landlord or its parking operator
from time to time; cars must be parked entirely within the stall lines, and only
small or other qualifying cars may be parked in areas reserved for such cars;
all directional signs, arrows and speed limits must be observed; spaces reserved
for disabled persons must be used only by vehicles properly designated; washing,
waxing, cleaning or servicing of any vehicle is prohibited; every parker is
required to park and lock his own car, except to the extent that Landlord adopts
a valet parking system; parking is prohibited in areas: (a) not striped or
designated for parking, (b) aisles, (c) where “no parking” signs are posted, (d)
on ramps, and (e) loading areas and other specially designated areas. Delivery
trucks and vehicles shall use only those areas designated therefor.
 
(iv) Parking stickers, key cards or any other devices or forms of identification
or entry shall remain the property of Landlord. Such devices must be displayed
as requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Devices are not
transferable and any device in the possession of an unauthorized holder will be
void. Loss or theft of parking identification, key cards or other such devices
must be reported to Landlord or any garage manager immediately. Any parking
devices reported lost or stolen which are found on any unauthorized car will be
confiscated and the illegal holder will be subject to prosecution. Lost or
stolen devices found by Tenant or its employees must be reported to Landlord or
the office of the garage immediately.
 
(22) Responsibility for Compliance. Tenant shall be responsible for ensuring
compliance with these Rules, as they may be amended, by Tenant’s employees and
as applicable, by Tenant’s agents, invitees, contractors, subcontractors, and
suppliers. Tenant shall cooperate with any reasonable program or requests by
Landlord to monitor and enforce the Rules, including providing vehicle numbers
and taking appropriate action against such of the foregoing parties who violate
these provisions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rider One - 4

 
 
RIDER TWO

 
GREEN ADDENDUM
 
 
(1) The term "Green Standard" or words of similar import shall include the U.S.
EPA’s Energy Star® rating, the Green Building Initiative’s Green Globes TM for
Continual Improvement of Existing Buildings (Green GlobesTM-CIEB), the U.S.
Green Building Council’s Leadership in Energy and Environmental Design (LEED),
and/or a current and similar organization with equally rigorous environmentally
and sustainable practices.
 
(2) Building Expenses shall also include: (i) all costs of maintaining,
managing, reporting, commissioning, and recommissioning the Building or any part
thereof that was designed and/or upgraded to be sustainable and conform with one
or more Green Standard rating systems, and (ii) all costs of applying, reporting
and commissioning the Building or any part thereof to seek certification under
one or more Green Standard rating systems, provided however, the cost of such
applying, reporting and commissioning of the Building or any part thereof to
seek certification shall be a cost capitalized and thereafter amortized as an
annual Expense under GAAP.
 
(3) Tenant shall not use or occupy the Premises for any unlawful purpose or in
any manner that will constitute waste, nuisance or unreasonable annoyance to
Landlord or other tenants of the Building. Tenant shall not use or operate the
Premises in any manner that will cause the Building or any part thereof not to
conform with Landlord’s sustainability practices or a Green Standard
certification of the Building.
 
(4) This building is or may become in the future certified under a Green
Standard or operated pursuant to Landlord’s sustainable building practices.
Landlord’s sustainability practices address whole-building operations and
maintenance issues including chemical use; indoor air quality; energy
efficiency; water efficiency; recycling programs; exterior maintenance programs;
and systems upgrades to meet green building energy, water, Indoor Air Quality,
and lighting performance standards. All construction and maintenance methods and
procedures, material purchases, and disposal of waste must be in compliance with
minimum standards and specifications, in addition to all applicable laws.
 
(5) Tenant shall use proven energy and carbon reduction measures, including
energy efficient bulbs in task lighting; use of lighting controls; closing
shades as needed to avoid over heating the space; turning off lights and
equipment at the end of the work day; purchasing ENERGY STAR® qualified
equipment, including but not limited to lighting, office equipment, commercial
and residential quality kitchen equipment, vending and ice machines, and;
purchasing products certified by the U.S. EPA’s Water Sense® program.
 
(6) Tenant covenants and agrees, at its sole cost and expense: (a) to comply
with all present and future laws, orders and regulations of the Federal, State,
county, municipal or other governing authorities, departments, commissions,
agencies and boards regarding the collection, sorting, separation, and recycling
of garbage, trash, rubbish and other refuse (collectively, “trash”); (b) to
comply with Landlord’s recycling policy as part of Landlord’s sustainability
practices where it may be more stringent than applicable law; (c) to sort and
separate its trash and recycling into such categories as are provided by law or
Landlord’s sustainability practices; (d) that each separately sorted category of
trash and recycling shall be placed in separate receptacles as directed by
Landlord, and; (e) that Tenant shall pay all costs, expenses, fines, penalties
or damages that may be imposed on Landlord or Tenant by reason of Tenant’s
failure to comply with the provisions of this Section. Where possible, the
Landlord shall provide a composting program and encourage the Tenant to sort and
separate its trash and recycling from compost material.
 
(7) Landlord shall provide and install all original bulbs and tubes for Building
standard lighting fixtures within the Premises and all replacement tubes for
such lighting, the cost of which shall be included in Building Expenses; all
other bulbs, tubes and lighting fixtures for the Premises shall be provided and
installed by Tenant at Tenant’s cost and expense, and must comply with
Landlord’s sustainability practices, including any Green Standard rating system,
concerning the environmental compliance of the Building or the Premises, as the
same may change from time to time. All maintenance and repairs made by Tenant
must comply with Landlord’s sustainability practices, including any Green
Standard rating system concerning the environmental compliance of the Building
or the Premises, as the same may change from time to time.
 
(8) Any and all Tenant Improvement Work and/or Alterations is strongly
encouraged to be performed in accordance with Landlord’s sustainability
practices, including any Green Standard or third-party rating system concerning
the environmental compliance of the Building or the Premises, as the same may
change from time to time. Tenant is further encouraged to engage a qualified
third party LEED or Green Standard professional or similarly qualified
professional during the design phase through implementation of any Tenant
Improvement Work and/or Alterations to review all plans, material procurement,
demolition, construction and waste management procedures to ensure they are in
full conformance with Landlord’s sustainability practices, as aforesaid. Any and
all waste and debris from Tenant Improvement Work and/or Alterations must meet
the minimum requirements set forth by the Green Standard.
 
 
 
Rider Two - 1

 
 
(9) Landlord does not permit space heaters or other energy-intensive equipment
unnecessary to conduct Tenant’s business without written approval by Landlord.
Any space conditioning equipment that is placed in the Premises for the purpose
of increasing comfort to tenants shall be operated on sensors or timers that
limit operation of equipment to hours of occupancy in the areas immediately
adjacent to the occupying personnel.
 
(10) Tenant acknowledges that it is Landlord’s intention that the Property be
operated in a manner which is consistent with Landlord’s sustainability
practices. Tenant is required to comply with these practices within its
Premises.
 
(11) Tenant shall dispose of, in an environmentally sustainable manner, any
equipment, furnishings, or materials no longer needed by Tenant and shall
recycle or re-use such items in accordance with Landlord’s sustainability
practices. Tenant is responsible for reporting this activity to Landlord in a
format determined by Landlord.
 
(12) Landlord currently provides janitorial service only after 5:30 p.m. five
days per week (excluding legal holidays). Landlord reserves the right to conduct
routine cleaning during Normal Business Hours in accordance with Landlord’s
sustainability practices and will be done in such a way as to minimize
disruption.
 
 
 
 
 
 
 
 
 
 
 
 
 
Rider Two - 2