Exhibit 10.1
LEASE
900 FOURTH AVENUE PROPERTY LLC,
a Delaware limited liability company,
Landlord,
and
CRAY INC.,
a Washington corporation,
Tenant

 

 

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TABLE OF CONTENTS

              page  
 
       
1. USE AND RESTRICTIONS ON USE
    1  
 
       
2. TERM
    2  
 
       
3. RENT
    3  
 
       
4. RENT ADJUSTMENTS
    3  
 
       
5. SECURITY DEPOSIT
    5  
 
       
6. ALTERATIONS
    6  
 
       
7. REPAIR
    7  
 
       
8. LIENS
    7  
 
       
9. ASSIGNMENT AND SUBLETTING
    7  
 
       
10. INDEMNIFICATION
    9  
 
       
11. INSURANCE
    9  
 
       
12. WAIVER OF SUBROGATION
    10  
 
       
13. SERVICES AND UTILITIES
    10  
 
       
14. HOLDING OVER
    11  
 
       
15. SUBORDINATION
    11  
 
       
16. RULES AND REGULATIONS
    12  
 
       
17. REENTRY BY LANDLORD
    12  
 
       
18. DEFAULT
    12  
 
       
19. REMEDIES
    13  
 
       
20. TENANT’S BANKRUPTCY OR INSOLVENCY
    15  
 
       
21. QUIET ENJOYMENT
    16  
 
       
22. CASUALTY
    16  
 
       
23. EMINENT DOMAIN
    17  
 
       
24. SALE BY LANDLORD
    17  
 
       
25. ESTOPPEL CERTIFICATES
    18  
 
       
26. SURRENDER OF PREMISES
    18  
 
       
27. NOTICES
    19  
 
       
28. TAXES PAYABLE BY TENANT
    19  
 
       
29. INTENTIONALLY OMITTED
    19  
 
       
30. PARKING
    19  
 
       
31. DEFINED TERMS AND HEADINGS
    20  
 
       
32. TENANT’S AUTHORITY
    21  
 
       
33. FINANCIAL STATEMENTS AND CREDIT REPORTS
    21  
 
       
34. COMMISSIONS
    21  
 
       
35. TIME AND APPLICABLE LAW
    21  
 
       
36. SUCCESSORS AND ASSIGNS
    21  
 
       
37. ENTIRE AGREEMENT
    21  
 
       
38. EXAMINATION NOT OPTION
    22  

 

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TABLE OF CONTENTS
(continued)

              page    
39. RECORDATION
    22  
 
       
40. OPTION TO RENEW
    22  
 
       
41. SIGNAGE
    23  
 
       
42. LIMITATION OF LANDLORD’S LIABILITY
    24  

         
EXHIBIT A — FLOOR PLAN DEPICTING THE PREMISES
       
 
       
EXHIBIT A-1 — SITE PLAN
       
 
       
EXHIBIT A-2 — LEGAL DESCRIPTION
       
 
       
EXHIBIT B — TENANT IMPROVEMENTS
       
 
       
EXHIBIT C — COMMENCEMENT DATE MEMORANDUM
       
 
       
EXHIBIT D — RULES AND REGULATIONS
       
 
       
EXHIBIT E — EARLY POSSESSION AGREEMENT
       
 
       
EXHIBIT F — SAMPLE STATEMENT OF EXPENSES
       
 
       

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GROSS (BY) OFFICE LEASE
REFERENCE PAGES

     
BUILDING:
  901 Fifth Avenue
 
  Seattle, Washington 98164
 
   
LANDLORD:
  900 FOURTH AVENUE PROPERTY LLC,
 
  a Delaware limited liability company
 
   
LANDLORD’S ADDRESS:
  c/o RREEF Management Company
701 Pike Street, Suite 925
Seattle, Washington 98101
 
   
WIRE INSTRUCTIONS AND/OR ADDRESS FOR RENT PAYMENT:
  900 Fourth Avenue Property LLC
75 Remittance Drive, Suite 6022
Chicago, Illinois 60675-6022
 
   
LEASE REFERENCE DATE:
  August 11, 2008
 
   
TENANT:
  CRAY INC.,
a Washington corporation
 
   
TENANT’S NOTICE ADDRESS:
   
 
   
(a) As of beginning of Term:
  Cray Inc.
901 Fifth Avenue, Suite 1000
Seattle, Washington 98164
Attention: Bonnie Collett, Office Manager
 
   
 
  With an additional copy to:
 
   
 
  Cray Inc.
901 Fifth Avenue, Suite 1000
Seattle, Washington 98164
Attention: Corporate Counsel
 
   
(b) Prior to beginning of Term (if different):
  Cray Inc.
411 1st Avenue South, Suite 600
Seattle, Washington 98104
Attention: Bonnie Collett, Office Manager
 
   
 
  With an additional copy to:
 
   
 
  Cray Inc.
411 1st Avenue South, Suite 600
Seattle, Washington 98104
Attention: Corporate Counsel
 
   
PREMISES ADDRESS:
  901 Fifth Avenue, Suites 400, 900 & 1000
Seattle, Washington 98164

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  /s/ BH
 
  /s/ MB
 
    Initials

 

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PREMISES RENTABLE AREA:
  Approximately 53,971 sq. ft., which is comprised of (i) the entire fourth
(4th) floor totaling approximately 19,971 rentable square feet (the “Fourth
Floor Premises”), which Fourth Floor Premises consists of (a) 2,479 rentable
square feet (the “Fourth Floor Pocket Space”) and (b) 17,492 rentable square
feet (the “Remaining Fourth Floor Premises”), (ii) the entire tenth (10th) floor
totaling approximately 17,030 rentable square feet (the “Tenth Floor Premises”),
and (iii) the entire ninth (9th) floor described as Suite 900 totaling
approximately 16,970 rentable square feet (the “Ninth Floor Premises”). The
Fourth Floor Premises, Ninth Floor Premises and Tenth Floor Premises shall be
collectively referred to herein as the “Premises”. (for outline of Premises and
depiction of the Fourth Floor Pocket Space, see Exhibit A)
 
   
SCHEDULED COMMENCEMENT DATE:
  January 1, 2009
 
   
TERM OF LEASE:
  Approximately eight years (8) years and six (6) months beginning on the
Commencement Date and ending on the Termination Date. The period from the
Commencement Date to the last day of the same month is the “Commencement Month.”
 
   
TERMINATION DATE:
  The last day of the one hundred and second (102nd) full calendar month after
(if the Commencement Month is not a full calendar month), or from and including
(if the Commencement Month is a full calendar month), the Commencement Month,
which is estimated to be June 30, 2017.
 
   
ANNUAL RENT and MONTHLY INSTALLMENT OF RENT (Article 3):
   

RENT SCHEDULE FOR FOURTH FLOOR POCKET SPACE:

                                      Period   Rentable Square     Annual Rent  
          Monthly Installment   from   through   Footage     Per Square Foot    
Annual Rent     of Rent  
Month 1
  Month 12     2,479     $ 28.00     $ 69,412.00     $ 5,784.33 *
Month 13
  Month 24     2,479     $ 28.84     $ 71,494.36     $ 5,957.86  
Month 25
  Month 36     2,479     $ 29.71     $ 73,651.09     $ 6,137.59  
Month 37
  Month 48     2,479     $ 30.60     $ 75,857.40     $ 6,321.45  
Month 49
  Month 60     2,479     $ 31.52     $ 78,138.08     $ 6,511.51  
Month 61
  Month 72     2,479     $ 32.47     $ 80,493.13     $ 6,707.76  
Month 73
  Month 84     2,479     $ 33.44     $ 82,897.76     $ 6,908.15  
Month 85
  Month 96     2,479     $ 34.44     $ 85,376.76     $ 7,114.73  
Month 97
  Month 102     2,479     $ 35.47     $ 87,930.13     $ 7,327.51  

      *   Notwithstanding anything in the Lease to the contrary, so long as
Tenant is not in default under the Lease, Tenant shall be entitled to an
abatement of Monthly Installment of Rent with respect to the Fourth Floor Pocket
Space (A) in the amount of $5,784.33 per month (which abatement shall be
prorated on a per diem basis for any partial month) for the period (the “Initial
Abatement Period”) beginning on the Commencement Date through the date that is
the earlier to occur of: (i) the date that is six (6) months following the
Commencement Date, and (ii) the date that Tenant first occupies the Fourth Floor
Pocket Space for any reason whatsoever, and (B) $2,892. 17 per month (which
abatement shall be prorated on a per diem basis for any partial month) for the
period commencing on the day immediately following the Initial Abatement Period
and ending on the last day of the twelfth (12th) month of the Term. The total
amount of Monthly Installment of Rent abated with respect to the Fourth Floor
Pocket Space in accordance with the foregoing shall collectively be referred to
herein as the “Fourth Floor Pocket Space Abated Rent”. Notwithstanding the
foregoing, commencing on the Commencement Date, the Fourth Floor Pocket Space
shall be subject to all of the terms and conditions of this Lease (including,
without limitation, all of Tenant’s insurance and indemnity obligations).

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

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RENT SCHEDULE FOR REMAINING FOURTH FLOOR PREMISES:

                                      Period   Rentable Square     Annual Rent  
          Monthly Installment   from   through   Footage     Per Square Foot    
Annual Rent     of Rent  
Month 1
  Month 12     17,492     $ 28.00     $ 489,776.00     $ 40,814.67 *
Month 13
  Month 24     17,492     $ 28.84     $ 504,469.28     $ 42,039.11  
Month 25
  Month 36     17,492     $ 29.71     $ 519,687.32     $ 43,307.28  
Month 37
  Month 48     17,492     $ 30.60     $ 535,255.20     $ 44,604.60  
Month 49
  Month 60     17,492     $ 31.52     $ 551,347.84     $ 45,945.65  
Month 61
  Month 72     17,492     $ 32.47     $ 567,965.24     $ 47,330.44  
Month 73
  Month 84     17,492     $ 33.44     $ 584,932.48     $ 48,744.37  
Month 85
  Month 96     17,492     $ 34.44     $ 602,424.48     $ 50,202.04  
Month 97
  Month 102     17,492     $ 35.47     $ 620,441.24     $ 51,703.44  

      *   Notwithstanding anything in the Lease to the contrary, so long as
Tenant is not in default under the Lease, Tenant shall be entitled to an
abatement of Monthly Installment of Rent with respect to the Remaining Fourth
Floor Premises in the amount of $20,407.34 per month for the first twelve
(12) full calendar months of the Term. The maximum total amount of Monthly
Installment of Rent abated with respect to the Remaining Fourth Floor Premises
in accordance with the foregoing shall equal $244,888.08 (the “Remaining Fourth
Floor Abated Monthly Installment of Rent”, together with the Fourth Floor Pocket
Space Abated Rent shall be collectively referred to herein as the “Fourth Floor
Abated Monthly Installment of Rent”).

If Tenant defaults under the Lease at any time during the Term and fails to cure
such default within any applicable cure period under the Lease, then all
unamortized Fourth Floor Abated Monthly Installment of Rent (i.e. based upon the
amortization of the Fourth Floor Abated Monthly Installment of Rent in equal
monthly amounts, without interest, during the period commencing on the
Commencement Date and ending on the original Termination Date) shall immediately
become due and payable. Only Monthly Installment of Rent shall be abated
pursuant to this Section, as more particularly described herein, and all other
rent and other costs and charges specified in this Lease shall remain as due and
payable pursuant to the provisions of the Lease.
RENT SCHEDULE FOR TENTH FLOOR PREMISES:

                                      Period   Rentable Square     Annual Rent  
          Monthly Installment   from   through   Footage     Per Square Foot    
Annual Rent     of Rent  
Month 1
  Month 12     17,030     $ 32.00     $ 544,960.00     $ 45,413.33 *
Month 13
  Month 24     17,030     $ 32.96     $ 561,308.80     $ 46,775.73  
Month 25
  Month 36     17,030     $ 33.95     $ 578,168.50     $ 48,180.71  
Month 37
  Month 48     17,030     $ 34.97     $ 595,539.10     $ 49,628.26  
Month 49
  Month 60     17,030     $ 36.02     $ 613,420.60     $ 51,118.38  
Month 61
  Month 72     17,030     $ 37.10     $ 631,813.00     $ 52,651.08  
Month 73
  Month 84     17,030     $ 38.21     $ 650,716.30     $ 54,226.36  
Month 85
  Month 96     17,030     $ 39.36     $ 670,300.80     $ 55,858.40  
Month 97
  Month 102     17,030     $ 40.54     $ 690,396.20     $ 57,533.02  

      *   Notwithstanding anything in the Lease to the contrary, so long as
Tenant is not in default under the Lease, Tenant shall be entitled to an
abatement of Monthly Installment of Rent with respect to the Tenth Floor
Premises in the amount of $22,706.67 per month for the first twelve (12) full
calendar months of the Term. The maximum total amount of Monthly Installment of
Rent abated with respect to the Tenth Floor Premises in accordance with the
foregoing shall equal $272,480.04 (the “Tenth Floor Abated Monthly Installment
of Rent”). If Tenant defaults under the Lease at any time during the Term and
fails to cure such default within any applicable cure period under the Lease,
then all unamortized Tenth Floor Abated Monthly Installment of Rent (i.e. based
upon the amortization of the Tenth Floor Abated Monthly Installment of Rent in
equal monthly amounts, without interest, during the period commencing on the
Commencement Date and ending on the original Termination Date) shall immediately
become due and payable. Only Monthly Installment of Rent shall be abated
pursuant to this Section, as more particularly described herein, and all other
rent and other costs and charges specified in this Lease shall remain as due and
payable pursuant to the provisions of the Lease.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

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RENT SCHEDULE FOR NINTH FLOOR PREMISES:

                                      Period   Rentable Square     Annual Rent  
          Monthly Installment   from   through   Footage     Per Square Foot    
Annual Rent     of Rent  
Month 1
  Month 12     16,970     $ 32.00     $ 543,040.00     $ 45,253.33 *
Month 13
  Month 24     16,970     $ 32.96     $ 559,331.20     $ 46,610.93  
Month 25
  Month 36     16,970     $ 33.95     $ 576,131.50     $ 48,010.96  
Month 37
  Month 48     16,970     $ 34.97     $ 593,440.90     $ 49,453.41  
Month 49
  Month 60     16,970     $ 36.02     $ 611,259.40     $ 50,938.28  
Month 61
  Month 72     16,970     $ 37.10     $ 629,587.00     $ 52,465.58  
Month 73
  Month 84     16,970     $ 38.21     $ 648,423.70     $ 54,035.31  
Month 85
  Month 96     16,970     $ 39.36     $ 667,939.20     $ 55,661.60  
Month 97
  Month 102     16,970     $ 40.54     $ 687,963.80     $ 57,330.32  

      *   Notwithstanding anything in the Lease to the contrary, so long as
Tenant is not in default under the Lease, Tenant shall be entitled to an
abatement of Monthly Installment of Rent with respect to the Ninth Floor
Premises in the amount of $22,626.67 per month for the first twelve (12) full
calendar months of the Term. The maximum total amount of Monthly Installment of
Rent abated with respect to the Ninth Floor Premises in accordance with the
foregoing shall equal $271,520.04 (the “Ninth Floor Abated Monthly Installment
of Rent”). If Tenant defaults under the Lease at any time during the Term and
fails to cure such default within any applicable cure period under the Lease,
then all unamortized Ninth Floor Abated Monthly Installment of Rent (i.e. based
upon the amortization of the Tenth Floor Abated Monthly Installment of Rent in
equal monthly amounts, without interest, during the period commencing on the
Commencement Date and ending on the original Termination Date) shall immediately
become due and payable. Only Monthly Installment of Rent shall be abated
pursuant to this Section, as more particularly described herein, and all other
rent and other costs and charges specified in this Lease shall remain as due and
payable pursuant to the provisions of the Lease.

     
BASE YEAR (EXPENSES):
  2009
 
   
BASE YEAR (TAXES):
  2009
 
   
TENANT’S PROPORTIONATE SHARE:
  9.66%
 
   
SECURITY DEPOSIT:
  $173,894.29
 
   
ASSIGNMENT/SUBLETTING FEE:
  $1,500.00

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  /s/ BH
 
  /s/ MB
 
    Initials

 

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AFTER-HOURS HVAC COST:
  $50.00 per hour, subject to change at any time 
 
   
PARKING:
  Thirty-two (32) monthly parking passes at Landlord’s standard market rate (See
Article on Parking)
 
   
REAL ESTATE BROKERS:
  Pacific Real Estate Partners, Inc., representing Landlord and Washington
Partners, representing Tenant
 
   
TENANT’S SIC CODE:
  3571 
 
   
BUILDING BUSINESS HOURS:
  Monday through Friday, 8:00 a.m. — 6:00 p.m., and Saturday 9:00 a.m. — 1:00
p.m., holidays excepted
 
   
AMORTIZATION RATE:
  9% 

The Reference Pages information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Pages information and
the Lease, the Lease shall control. The Lease includes Exhibits A through G, all
of which are made a part of the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have entered into the Lease as of the
Lease Reference Date set forth above.

     
LANDLORD:
  TENANT:
 
   
900 FOURTH AVENUE PROPERTY LLC,
  CRAY INC.,
a Delaware limited liability company
  a Washington corporation

                     
By:
  RREEF Management Company,                
 
  a Delaware corporation, its Authorized Agent                
 
                   
By: /s/ Michael Benoit                
Name: Michael Benoit       By:
Name:   /s/ Brian C. Henry
 
Brian C. Henry    
Title:   VP District Mgr.
      Title:   EVP & CFO    
Dated: 8/21/08
      Dated:   8/11/08    

 

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LEASE
By this Lease Landlord leases to Tenant and Tenant leases from Landlord the
Premises in the Building as set forth and described on the Reference Pages. The
Premises are depicted on the floor plan attached hereto as Exhibit A, and the
Building is depicted on the site plan attached hereto as Exhibit A-1. The
Reference Pages, including all terms defined thereon, are incorporated as part
of this Lease.
1. USE AND RESTRICTIONS ON USE.
1.1 The Premises are to be used solely for general office purposes. Tenant shall
not do or permit anything to be done in or about the Premises which will in any
way obstruct or interfere with the rights of other tenants or occupants of the
Building or injure, annoy, or disturb them, or allow the Premises to be used for
any improper, immoral, unlawful, or objectionable purpose, or commit any waste.
Tenant shall not do, permit or suffer in, on, or about the Premises the sale of
any alcoholic liquor without the written consent of Landlord first obtained.
Tenant shall comply with all federal, state and city laws, codes, ordinances,
rules and regulations (collectively, “Regulations”) applicable to the use of the
Premises and its occupancy and shall promptly comply with all governmental
orders and directions for the correction, prevention and abatement of any
violations in the Building or appurtenant land, caused or permitted by, or
resulting from the specific use by, Tenant, or in or upon, or in connection
with, the Premises, all at Tenant’s sole expense. Tenant shall not do or permit
anything to be done on or about the Premises or bring or keep anything into the
Premises which will in any way increase the rate of, invalidate or prevent the
procuring of any insurance protecting against loss or damage to the Building or
any of its contents by fire or other casualty or against liability for damage to
property or injury to persons in or about the Building or any part thereof.
Nothing herein shall require Tenant to perform any alterations, additions or
improvements which are necessary to comply with Regulations with respect to the
common areas, unless such compliance arises directly out of the performance of
work by or on behalf of Tenant in the Premises or Tenant’s use of the Premises
for purposes other than the Permitted Use. In addition, nothing herein shall
require Tenant, with respect to the common areas or the Premises, to comply with
Regulations which require structural alterations, capital improvements or the
installation of new or additional mechanical, electrical, plumbing or fire/life
safety systems on a Building-wide basis unless it arises out of the performance
of work by or on behalf of Tenant in the Premises or Tenant’s use of the
Premises for purposes other than the Permitted Use. Landlord will, at Landlord’s
expense (except to the extent properly included in Expenses), perform all acts
required to comply with such Regulations with respect to the foregoing as the
same affect the Premises and the Building. As of the date hereof, Landlord has
not received notice from any governmental agencies that the Building is in
violation of Title III of the Americans with Disabilities Act.
1.2 Tenant shall not, and shall not direct, suffer or permit any of its agents,
contractors, employees, licensees or invitees (collectively, the “Tenant
Entities”) to at any time handle, use, manufacture, store or dispose of in or
about the Premises or the Building any (collectively, “Hazardous Materials”)
flammables, explosives, radioactive materials, hazardous wastes or materials,
toxic wastes or materials, or other similar substances, petroleum products or
derivatives or any substance subject to regulation by or under any federal,
state and local laws and ordinances relating to the protection of the
environment or the keeping, use or disposition of environmentally hazardous
materials, substances, or wastes, presently in effect or hereafter adopted, all
amendments to any of them, and all rules and regulations issued pursuant to any
of such laws or ordinances (collectively “Environmental Laws”), nor shall Tenant
suffer or permit any Hazardous Materials to be used in any manner not fully in
compliance with all Environmental Laws, in the Premises or the Building and
appurtenant land or allow the environment to become contaminated with any
Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store,
use or dispose of products containing small quantities of Hazardous Materials
(such as aerosol cans containing insecticides, toner for copiers, paints, paint
remover and the like) to the extent customary and necessary for the use of the
Premises for general office purposes; provided that Tenant shall always handle,
store, use, and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises,
Building and appurtenant land or the environment. Tenant shall protect, defend,
indemnify and hold each and all of the Landlord Entities (as defined in
Article 31) harmless from and against any and all loss, claims, liability or
costs (including court costs and attorney’s fees) incurred by reason of any
actual or asserted failure of Tenant to fully comply with all applicable
Environmental Laws, or the presence, handling, use or disposition in or from the
Premises of any Hazardous Materials by Tenant or any Tenant Entity (even though
permissible under all applicable Environmental Laws or the provisions of this
Lease), or by reason of any actual or asserted failure of Tenant to keep,
observe, or perform any provision of this Section 1.2. Landlord hereby notifies
Tenant that Landlord knows or has reasonable cause to believe that a release of
Hazardous Materials has come to be located at, on or beneath the property on
which the Building lies.

 

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1.3 Tenant and the Tenant Entities will be entitled to the non-exclusive use of
the common areas of the Building as they exist from time to time during the
Term, including the Parking Facility (as defined in Article 30 below), subject
to Landlord’s rules and regulations regarding such use. However, in no event
will Tenant or the Tenant Entities be entitled to monthly parking passes to park
more vehicles in the Parking Facility than Tenant’s Proportionate Share of the
total parking spaces available in the Parking Facility. As of the date of this
Lease, Tenant’s Proportionate Share of the total parking spaces available in the
Parking Facility is thirty-two (32) parking spaces. In addition to the foregoing
parking spaces, Tenant or Tenant Entities may, subject to availability, use
additional parking spaces in the Parking Facility (on a daily, first-come,
first-serve basis) at the daily parking rate applicable to users of such parking
spaces; provided, however, that in no event shall the foregoing be deemed to
obligate Landlord to provide additional daily parking. The foregoing shall not
be deemed to provide Tenant with an exclusive right to any parking spaces or any
guaranty of the availability of any particular parking spaces or any specific
number of parking spaces.
2. TERM.
2.1 The Term of this Lease shall begin on the date (“Commencement Date”) that
Landlord shall tender possession of the Premises to Tenant, and shall terminate
on the date as shown on the Reference Pages as the Termination Date based on the
actual Commencement Date (“Termination Date”), unless sooner terminated by the
provisions of this Lease. Landlord shall tender possession of the Premises with
all the work, if any, to be performed by Landlord pursuant to Exhibit B to this
Lease substantially completed, subject to any Tenant Delays (defined below).
Landlord shall tender possession of the Premises with all the work, if any, to
be performed by Landlord pursuant to Exhibit B to this Lease substantially
completed. Tenant shall deliver a punch list of items not completed within
thirty (30) days after Landlord tenders possession of the Premises and Landlord
agrees to proceed with due diligence to perform its obligations regarding such
items. Tenant shall, at Landlord’s request, execute and deliver a memorandum
agreement provided by Landlord in the form of Exhibit C attached hereto, setting
forth the actual Commencement Date, Termination Date and, if necessary, a
revised rent schedule. Should Tenant fail to do so within thirty (30) days after
Landlord’s request, the information set forth in such memorandum provided by
Landlord shall be conclusively presumed to be agreed and correct.
2.2 Tenant agrees that in the event of the inability of Landlord to deliver
possession of the Premises on the Scheduled Commencement Date set forth on the
Reference Pages for any reason, Landlord shall not be liable for any damage
resulting from such inability, but except to the extent such delay is the result
of a Tenant Delay, Tenant shall not be liable for any rent until the time when
Landlord delivers possession of the Premises to Tenant. No such failure to give
possession on the Scheduled Commencement Date shall affect the other obligations
of Tenant under this Lease, except that the actual Commencement Date shall be
postponed until the date that Landlord delivers possession of the Premises to
Tenant, except to the extent that such delay is arising from or related to the
acts or omissions of Tenant or any Tenant Entities, including, without
limitation as a result of: (a) Tenant’s failure to agree to plans and
specifications and/or construction cost estimates or bids; (b) Tenant’s request
for materials, finishes or installations other than Landlord’s standard except
those, if any, that Landlord shall have expressly agreed to furnish without
extension of time agreed by Landlord; (c) Tenant’s change in any plans or
specifications; or, (d) performance or completion by a party employed by Tenant
(each of the foregoing, a “Tenant Delay”). If any delay is the result of a
Tenant Delay, the Commencement Date and the payment of rent under this Lease
shall be accelerated by the number of days of such Tenant Delay.
2.3 Subject to the terms of this Section 2.3 and provided that this Lease and
the Early Possession Agreement (as defined below) have been fully executed by
all parties and Tenant has delivered all prepaid rental, the Security Deposit,
and insurance certificates required hereunder, Landlord grants Tenant the right
to enter the Premises, at Tenant’s sole risk, three (3) weeks prior to
Landlord’s reasonable estimate of the Commencement Date, solely for the purpose
of installing telecommunications and data cabling, equipment, furnishings and
other personalty. Such possession prior to the Commencement Date shall be
subject to all of the terms and conditions of this Lease, except that Tenant
shall not be required to pay Monthly Installment of Rent or Tenant’s
Proportionate Share of Expenses and Taxes with respect to the period of time
prior to the Commencement Date during which Tenant occupies the Premises solely
for such purposes. However, Tenant shall be liable for any utilities or special
services provided to Tenant during such period. Notwithstanding the foregoing,
if Tenant takes possession of the Premises before the Commencement Date for any
purpose other than as expressly provided in this Section, such possession shall
be subject to the terms and conditions of this Lease and Tenant shall pay
Monthly Installment of Rent, Tenant’s Proportionate Share of Expenses and Taxes,
and any other charges payable hereunder to Landlord for each day of possession
before the Commencement Date. Said early possession shall not advance the
Termination Date. Landlord may withdraw such permission to enter the Premises
prior to the Commencement Date at any time that Landlord reasonably determines
that such entry by Tenant is causing a dangerous situation for Landlord, Tenant
or their respective contractors or employees, or if Landlord reasonably
determines that such entry by Tenant is hampering or otherwise preventing
Landlord from proceeding with the completion of the Tenant Improvements
described in Exhibit B at the earliest possible date. As a condition to any
early entry by Tenant pursuant to this Section 2.3, Tenant shall execute and
deliver to Landlord an early possession agreement (the “Early Possession
Agreement”) in the form attached hereto as Exhibit E, provided by Landlord,
setting forth the actual date for early possession and the date for the
commencement of payment of Monthly Installment of Rent.

 

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3. RENT.
3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time to time
by paying the Monthly Installment of Rent then in effect on or before the first
day of each full calendar month during the Term, except that the first full
month’s rent (subject to the Fourth Floor Abated Monthly Installment of Rent,
the Ninth Floor Abated Monthly Installment of Rent and the Tenth Floor Abated
Monthly Installment of Rent) shall be paid upon the execution of this Lease. The
Monthly Installment of Rent in effect at any time shall be one-twelfth (1/12) of
the Annual Rent in effect at such time. Rent for any period during the Term
which is less than a full month shall be a prorated portion of the Monthly
Installment of Rent based upon the number of days in such month. Said rent shall
be paid to Landlord, without deduction or offset (except as expressly set forth
in Exhibit B attached hereto and except as provided above with respect to the
prepaid rent for the first month and the Fourth Floor Abated Monthly Installment
of Rent, the Ninth Floor Abated Monthly Installment of Rent and the Tenth Floor
Abated Monthly Installment of Rent), without notice or demand, at the Rent
Payment Address, as set forth on the Reference Pages, or to such other person or
at such other place as Landlord may from time to time designate in writing. If
an Event of Default resulting from Tenant’s failure to pay rent occurs, Landlord
may require by notice to Tenant that all subsequent rent payments be made by an
automatic payment from Tenant’s bank account to Landlord’s account, without cost
to Landlord. Tenant must implement such automatic payment system prior to the
next scheduled rent payment or within thirty (30) days after Landlord’s notice,
whichever is later. Unless specified in this Lease to the contrary, all amounts
and sums payable by Tenant to Landlord pursuant to this Lease shall be deemed
additional rent.
3.2 Tenant recognizes that late payment of any rent or other sum due under this
Lease will result in administrative expense to Landlord, the extent of which
additional expense is extremely difficult and economically impractical to
ascertain. Tenant therefore agrees that if rent or any other sum is not paid
when due and payable pursuant to this Lease, a late charge shall be imposed as
follows: (i) Tenant shall not be required to pay any late charge with respect to
the first such late payment in any twelve (12) month period of the Term of this
Lease or any extension thereto; (ii) if Tenant fails to pay rent or any other
sum when due and payable pursuant to this Lease a second time during any twelve
(12) month period commencing on the date of the first late payment, Tenant shall
be required to pay a late charge equal to $5,000.00 for the second such late
payment in such twelve (12) month period; and (iii) thereafter, a late charge
equal to $7,500.00 shall apply to any subsequent late payment within the
foregoing twelve (12) month period. The amount of the late charge to be paid by
Tenant shall be reassessed and added to Tenant’s obligation for each successive
month until paid. The provisions of this Section 3.2 in no way relieve Tenant of
the obligation to pay rent or other payments on or before the date on which they
are due, nor do the terms of this Section 3.2 in any way affect Landlord’s
remedies pursuant to Article 19 of this Lease in the event said rent or other
payment is unpaid after date due.
4. RENT ADJUSTMENTS.
4.1 For the purpose of this Article 4, the following terms are defined as
follows:
4.1.1 Lease Year: Each fiscal year (as determined by Landlord from time to time)
falling partly or wholly within the Term.
4.1.2 Expenses: All costs of operation, maintenance, repair, replacement and
management of the Building, as determined in accordance with generally accepted
real estate accounting principles, including the following costs by way of
illustration, but not limitation: water and sewer charges; insurance charges of
or relating to all insurance policies and endorsements deemed by Landlord to be
reasonably necessary or desirable and relating in any manner to the protection,
preservation, or operation of the Building or any part thereof; utility costs,
including, but not limited to, the cost of heat, light, power, steam, gas; waste
disposal; the cost of janitorial services; the cost of security and alarm
services (including any central station signaling system); costs of cleaning,
repairing, replacing and maintaining the common areas, including parking and
landscaping, window cleaning costs; labor costs; costs and expenses of managing
the Building including management fees (provided however, in no event shall the
management fees for the Building (expressed as a percentage of gross receipts
for the Building) exceed 3.5% of such gross receipts); air conditioning
maintenance costs; elevator maintenance fees and supplies; material costs;
equipment costs including the cost of maintenance, repair and service agreements
and rental and leasing costs; purchase costs of equipment; current equipment,
rental and leasing costs of items which would be capital items if purchased;
tool costs; licenses, permits and inspection fees; wages and salaries; employee
benefits and payroll taxes; accounting and legal fees directly related to other
Expenses; any sales, use or service taxes incurred in connection therewith. In
addition, Landlord shall be entitled to recover, as additional rent (which,
along with any other capital expenditures constituting Expenses, Landlord may
either include in Expenses or cause to be billed to Tenant along with Expenses
and Taxes but as a separate item), Tenant’s Proportionate Share of: (a) an
allocable portion of the cost of capital improvement items which are reasonably
calculated to reduce operating expenses; (b) the cost of fire sprinklers and
suppression systems and other life safety systems; and (c) other capital
expenses which are required under any Regulations which were not applicable to
the Building as of the date of this Lease; but the costs described in this
sentence shall be amortized over the reasonable life of such expenditures in
accordance with such reasonable life and amortization schedules as shall be
determined by Landlord in accordance with generally accepted accounting
principles, with interest on the unamortized amount at one percent (1%) in
excess of the Wall Street Journal prime lending rate announced from time to
time. Landlord agrees to act in a commercially reasonable manner in incurring
Expenses, taking into consideration the class, purpose and the quality of the
Building. In no event shall Landlord be entitled to a reimbursement from tenants
for Expenses and Taxes in excess of 100% of the costs actually paid or incurred
by Landlord in any applicable calendar year. Expenses shall not include
depreciation or amortization of the Building or equipment in the Building except
as provided herein, loan principal or interest payments, costs of alterations of
tenants’ premises, leasing commissions, interest expenses on long-term
borrowings or advertising costs.

 

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The following are also excluded from Expenses:

  (a)   Attorney’s fees and other expenses incurred in connection with
negotiations or disputes with prospective tenants or tenants or other occupants
of the Building.     (b)   Except as specifically provided in Section 4.1.2, any
capital improvement costs.     (c)   Fines, costs or penalties incurred as a
result and to the extent of a violation by Landlord of any applicable
Regulations.     (d)   Any fines, penalties or interest resulting from the gross
negligence or willful misconduct of Landlord or Landlord’s breach of this Lease
or due to the ordinary negligence of Landlord in excess of $100,000 per
individual event or occurrence.     (e)   Any cost or expense related to
removal, cleaning, abatement or remediation of Hazardous Materials existing as
of the date of this Lease in or about the Building or common areas except to the
extent such removal, cleaning, abatement or remediation is related to the
general repair and maintenance of the Building.     (f)   Costs incurred by
Landlord for the repair of damage to the Building, to the extent that Landlord
is reimbursed for such costs by insurance proceeds, contractor warranties,
guarantees, judgments or other third party sources, provided that Landlord has
maintained the insurance required in Section 11.4 and has obtained customary
contractor warranties and guarantees with respect to work performed or
undertaken by Landlord at the Building.     (g)   Costs of repairing any
portions of the Building or Building systems that are necessitated by Landlord’s
negligence.     (h)   The cost of complying with any laws in effect (and as
enforced) as of the date of this Lease, provided that if any portion of the
Building that was in compliance with all applicable laws as of the date of this
Lease becomes out of compliance due to normal wear and tear, the cost of
bringing such portion of the Building into compliance shall be included in
Expenses unless otherwise excluded pursuant to the terms hereof.

4.1.3 Taxes: Real estate taxes and any other taxes, charges and assessments
which are levied with respect to the Building or the land appurtenant to the
Building, or with respect to any improvements, fixtures and equipment or other
property of Landlord, real or personal, located in the Building and used in
connection with the operation of the Building and said land, any payments to any
ground lessor in reimbursement of tax payments made by such lessor; and all
fees, expenses and costs incurred by Landlord in investigating, protesting,
contesting or in any way seeking to reduce or avoid increase in any assessments,
levies or the tax rate pertaining to any Taxes to be paid by Landlord in any
Lease Year (collectively, “Taxes”). Taxes shall not include any corporate
franchise, or estate, inheritance or net income tax, or tax imposed upon any
transfer by Landlord of its interest in this Lease or the Building or any taxes
to be paid by Tenant pursuant to Article 28. If an assessment of Taxes is
payable in installments, regardless of whether Landlord pays such amount in one
lump sum or elects to pay in installments, Taxes shall only include the amount
of the installment and any interest actually paid over the time period of
installments are paid or would have been paid had Landlord elected to pay such
Taxes in the maximum number of installments allowed by the applicable taxing
authority, provided that the Taxes used to compute Tenant’s Proportionate Share
of Taxes shall never exceed the Taxes actually paid by Landlord in any year.
4.2 If in any Lease Year, (a) Expenses paid or incurred shall exceed Expenses
paid or incurred in the Base Year (Expenses) and/or (b) Taxes paid or incurred
by Landlord in any Lease Year shall exceed the amount of such Taxes which became
due and payable in the Base Year (Taxes), Tenant shall pay as additional rent
for such Lease Year Tenant’s Proportionate Share of such excess.

 

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4.3 The annual determination of Expenses shall be made by Landlord and shall be
binding upon Landlord and Tenant, subject to the provisions of this Section 4.3.
For informational purposes only, a sample statement showing categories of
Expenses is attached hereto as Exhibit F, it being acknowledged and agreed that
such statement is an example only and Landlord shall not be in breach of this
Lease if Landlord modifies the form or content of such statement during the Term
of this Lease. Landlord represents that Landlord relied on a statement
containing the categories of Expenses attached as Exhibit F to determine
Landlord’s estimate of Expenses and Taxes during the year 2008. During the Term,
Tenant may review, at Tenant’s sole cost and expense, the books and records
supporting such determination in an office of Landlord, or Landlord’s agent,
during normal business hours, upon giving Landlord five (5) business days
advance written notice within sixty (60) days after receipt of such
determination, but in no event more often than once in any one (1) year period,
subject to execution of a confidentiality agreement acceptable to Landlord, and
provided that if Tenant utilizes an independent accountant to perform such
review it shall be one of national standing which is reasonably acceptable to
Landlord, is not compensated on a contingency basis and is also subject to such
confidentiality agreement. If Tenant fails to object to Landlord’s annual
statement (which shall be in writing) showing its determination of Expenses
within ninety (90) days after receipt of Landlord’s statement (which statement
shall contain detail sufficient to reasonably support such determination), or if
any such objection fails to state with specificity the reason for the objection,
Tenant shall be deemed to have approved such determination and shall have no
further right to object to or contest such determination. Landlord shall
reasonably cooperate with Tenant’s review of such books and records so as to
enable Tenant to reasonably be able to complete the review and object with
specificity within such ninety (90) day period described above. In the event
that during all or any portion of any Lease Year or Base Year, the Building is
not at least 95% rented and occupied Landlord shall make an appropriate
adjustment in occupancy-related Expenses and/or Taxes for such year for the
purpose of avoiding distortion of the amount of such Expenses and Taxes to be
attributed to Tenant by reason of variation in total occupancy of the Building,
by employing consistent and sound accounting and management principles to
determine Expenses and Taxes that would have been paid or incurred by Landlord
had the Building been at least ninety-five percent (95%) rented and occupied,
and the amount so determined shall be deemed to have been Expenses and/or Taxes,
as applicable, for such Lease Year.
4.4 Prior to the actual determination thereof for a Lease Year, Landlord may
from time to time estimate Tenant’s liability for Expenses and/or Taxes under
Section 4.2, Article 6 and Article 28 for the Lease Year or portion thereof.
Landlord will give Tenant written notification of the amount of such estimate
and Tenant agrees that it will pay, by increase of its Monthly Installments of
Rent due in such Lease Year, additional rent in the amount of such estimate. Any
such increased rate of Monthly Installments of Rent pursuant to this Section 4.4
shall remain in effect until further written notification to Tenant pursuant
hereto.
4.5 When the above mentioned actual determination of Tenant’s liability for
Expenses and/or Taxes is made for any Lease Year and when Tenant is so notified
in writing, then:
4.5.1 If the total additional rent Tenant actually paid pursuant to Section 4.3
on account of Expenses and/or Taxes for the Lease Year is less than Tenant’s
liability for Expenses and/or Taxes, then Tenant shall pay such deficiency to
Landlord as additional rent in one lump sum within thirty (30) days of receipt
of Landlord’s bill therefor; and
4.5.2 If the total additional rent Tenant actually paid pursuant to Section 4.3
on account of Expenses and/or Taxes for the Lease Year is more than Tenant’s
liability for Expenses and/or Taxes, then Landlord shall credit the difference
against the then next due payments to be made by Tenant under this Article 4,
or, if this Lease has terminated, refund the difference in cash. Tenant shall
not be entitled to a credit by reason of actual Expenses and/or Taxes in any
Lease Year being less than Expenses and/or Taxes in the Base Year (Expenses
and/or Taxes).
4.6 If the Commencement Date is other than January 1 or if the Termination Date
is other than December 31, Tenant’s liability for Expenses and Taxes for the
Lease Year in which said Date occurs shall be prorated based upon a three
hundred sixty-five (365) day year.
5. SECURITY DEPOSIT. Tenant shall deposit the Security Deposit with Landlord
upon the execution of this Lease. Said sum shall be held by Landlord as security
for the faithful performance by Tenant of all the terms, covenants and
conditions of this Lease to be kept and performed by Tenant and not as an
advance rental deposit or as a measure of Landlord’s damage in case of Tenant’s
default. If Tenant defaults with respect to any provision of this Lease,
Landlord may use any part of the Security Deposit for the payment of any rent or
any other sum in default, or for the payment of any amount which Landlord may
spend or become obligated to spend by reason of Tenant’s default, or to
compensate Landlord for any other loss or damage which Landlord suffers by
reason of Tenant’s default, provided that Landlord has provided Tenant written
notice of such default (and applicable notice and cure periods have expired) as
required pursuant to the terms of Article 18 below. If any portion is so used,
Tenant shall within five (5) business days after written demand therefor,
deposit with Landlord an amount sufficient to restore the Security Deposit to
its original amount and Tenant’s failure to do so shall be a material breach of
this Lease. Except to such extent, if any, as shall be required by law, Landlord
shall not be required to keep the Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on such deposit. If Tenant
is not in default at the termination of this Lease, Landlord shall return any
unapplied balance of the Security Deposit to Tenant within forty-five (45) days
after Tenant surrenders the Premises to Landlord in accordance with this Lease.
In addition to any other deductions Landlord is entitled to make pursuant to the
terms hereof, Landlord shall have the right to make a good faith estimate of any
unreconciled Expenses and/or Taxes as of the Termination Date and to deduct any
anticipated shortfall from the Security Deposit. Such estimate shall be final
and binding upon Tenant.

 

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6. ALTERATIONS.
6.1 Except for those, if any, specifically provided for in Exhibit B to this
Lease, Tenant shall not make or suffer to be made any alterations, additions, or
improvements, including, but not limited to, the attachment of any fixtures or
equipment in, on, or to the Premises or any part thereof or the making of any
improvements as required by Article 7, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed. When applying for such consent, Tenant shall, if requested by Landlord,
furnish complete plans and specifications for such alterations, additions and
improvements. Landlord’s consent shall not be unreasonably withheld with respect
to alterations which (a) are not structural in nature, (b) are not visible from
the exterior of the Building, (c) do not affect or require modification of the
Building’s electrical, mechanical, plumbing, HVAC or other systems, and (d) in
aggregate do not cost more than $5.00 per rentable square foot of that portion
of the Premises affected by the alterations in question.
6.2 In the event Landlord consents to the making of any such alteration,
addition or improvement by Tenant, the same shall be made by using either
Landlord’s contractor or a contractor reasonably approved by Landlord, in either
event at Tenant’s sole cost and expense. If Tenant shall employ any contractor
other than Landlord’s contractor and such other contractor or any subcontractor
of such other contractor shall employ any non-union labor or supplier, Tenant
shall be responsible for and hold Landlord harmless from any and all delays,
damages and extra costs suffered by Landlord as a result of any dispute with any
labor unions concerning the wage, hours, terms or conditions of the employment
of any such labor. In any event Landlord may charge Tenant a construction
management fee not to exceed five percent (5%) of the cost of such work to cover
its overhead as it relates to such proposed work, plus third-party costs
actually incurred by Landlord in connection with the proposed work and the
design thereof, with all such amounts being due fifteen (15) days after
Landlord’s demand.
6.3 All alterations, additions or improvements proposed by Tenant shall be
constructed in accordance with all Regulations, using Building standard
materials where applicable, and Tenant shall, prior to construction, provide the
additional insurance required under Article 11 in such case, and also all such
assurances to Landlord as Landlord shall reasonably require to assure payment of
the costs thereof, including but not limited to, notices of non-responsibility,
waivers of lien, surety company performance bonds and funded construction
escrows and to protect Landlord and the Building and appurtenant land against
any loss from any mechanic’s, materialmen’s or other liens. Tenant shall pay in
addition to any sums due pursuant to Article 4, any increase in real estate
taxes attributable to any such alteration, addition or improvement for so long,
during the Term, as such increase is ascertainable; at Landlord’s election said
sums shall be paid in the same way as sums due under Article 4. Except in
connection with the Tenant Improvements described in Exhibit B, Landlord may, as
a condition to its consent to any particular alterations or improvements,
require Tenant to deposit with Landlord the amount reasonably estimated by
Landlord as sufficient to cover the cost of removing such alterations or
improvements and restoring the Premises, to the extent required under
Section 26.2.
6.4 Notwithstanding anything to the contrary contained herein, so long as
Tenant’s written request for consent for a proposed alteration or improvements
(including, without limitation, any changes to the initial Tenant Improvements
made after the date of this Lease in accordance with Exhibit B attached hereto)
contains the following statement in large, bold and capped font “PURSUANT TO
ARTICLE 6 OF THE LEASE, IF LANDLORD CONSENTS TO THE SUBJECT ALTERATION, LANDLORD
SHALL NOTIFY TENANT IN WRITING WHETHER OR NOT LANDLORD WILL REQUIRE SUCH
ALTERATION TO BE REMOVED AT THE EXPIRATION OR EARLIER TERMINATION OF THE
LEASE.”, at the time Landlord gives its consent for any alterations or
improvements, if it so does, Tenant shall also be notified whether or not
Landlord will require that such alterations or improvements be removed upon the
expiration or earlier termination of this Lease. Notwithstanding anything to the
contrary contained in this Lease, at the expiration or earlier termination of
this Lease and otherwise in accordance with Article 26 hereof, Tenant shall be
required to remove all alterations or improvements made to the Premises by or on
behalf of Tenant after the Commencement Date (and before the Commencement Date,
to the extent Landlord has notified Tenant thereof in accordance with the terms
of this Lease and Exhibit B) except for any such alterations or improvements
which Landlord expressly indicates or is deemed to have indicated shall not be
required to be removed from the Premises by Tenant. If Tenant’s written notice
strictly complies with the foregoing and if Landlord fails to so notify Tenant
whether Tenant shall be required to remove the subject alterations or
improvements at the expiration or earlier termination of this Lease, it shall be
assumed that Landlord shall require the removal of the subject alterations or
improvements.

 

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7. REPAIR.
7.1 Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises, except as specified in Exhibit B if attached to
this Lease and except that Landlord shall repair and maintain the structural
portions of the Building, including the roof, basic plumbing, air conditioning,
heating and electrical systems installed or furnished by Landlord. By taking
possession of the Premises, subject to the terms of Exhibit B attached hereto
with respect to the Tenant Improvements, Tenant accepts them as being in good
order, condition and repair and in the condition in which Landlord is obligated
to deliver them, except as set forth in the punch list to be delivered pursuant
to Section 2.1. However, notwithstanding the foregoing, Landlord agrees that the
base Building electrical, heating, ventilation and air conditioning and plumbing
systems located in the Premises shall be in good working order as of the date
Landlord delivers possession of the Premises to Tenant. Except to the extent
caused by the acts or omissions of Tenant or any Tenant Entities or by any
alterations or improvements performed by or on behalf of Tenant, if such systems
are not in good working order as of the date possession of the Premises is
delivered to Tenant and Tenant provides Landlord with notice of the same within
sixty (60) days following the date Landlord delivers possession of the Premises
to Tenant, Landlord shall be responsible for repairing or restoring the same. It
is hereby understood and agreed that no representations respecting the condition
of the Premises or the Building have been made by Landlord to Tenant, except as
specifically set forth in this Lease.
7.2 Tenant shall, at all times during the Term, keep the Premises in good
condition and repair excepting damage by fire, or other casualty, and in
compliance with all applicable governmental laws, ordinances and regulations,
promptly complying with all governmental orders and directives for the
correction, prevention and abatement of any violations or nuisances in or upon,
or connected with, the Premises, all at Tenant’s sole expense.
7.3 Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance is given to
Landlord by Tenant.
7.4 Except as provided in Article 22, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant’s
business arising from the making of any repairs, alterations or improvements in
or to any portion of the Building or the Premises or to fixtures, appurtenances
and equipment in the Building. Except to the extent, if any, prohibited by law,
Tenant waives the right to make repairs at Landlord’s expense under any law,
statute or ordinance now or hereafter in effect.
8. LIENS. Tenant shall keep the Premises, the Building and appurtenant land and
Tenant’s leasehold interest in the Premises free from any liens arising out of
any services, work or materials performed, furnished, or contracted for by
Tenant, or obligations incurred by Tenant. In the event that Tenant fails,
within ten (10) days following the imposition of any such lien, to either cause
the same to be released of record or provide Landlord with insurance against the
same issued by a major title insurance company or such other protection against
the same as Landlord shall accept (such failure to constitute an Event of
Default), Landlord shall have the right to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such lien. All such sums paid by Landlord and all expenses incurred by it in
connection therewith shall be payable to it by Tenant within ten (10) days of
Landlord’s demand.
9. ASSIGNMENT AND SUBLETTING.
9.1 Tenant shall not have the right to assign or pledge this Lease or to sublet
the whole or any part of the Premises whether voluntarily or by operation of
law, or permit the use or occupancy of the Premises by anyone other than Tenant,
and shall not make, suffer or permit such assignment, subleasing or occupancy
without the prior written consent of Landlord, such consent not to be
unreasonably withheld, conditioned or delayed, and said restrictions shall be
binding upon any and all assignees of this Lease and subtenants of the Premises.
In the event Tenant desires to sublet, or permit such occupancy of, the
Premises, or any portion thereof, or assign this Lease, Tenant shall give
written notice thereof to Landlord at least sixty (60) days but no more than one
hundred twenty (120) days prior to the proposed commencement date of such
subletting or assignment, which notice shall set forth the name of the proposed
subtenant or assignee, the relevant terms of any sublease or assignment and
copies of financial reports and other relevant financial information of the
proposed subtenant or assignee.
9.2 Notwithstanding any assignment or subletting, permitted or otherwise, Tenant
shall at all times remain directly, primarily and fully responsible and liable
for the payment of the rent specified in this Lease and for compliance with all
of its other obligations under the terms, provisions and covenants of this
Lease. Upon the occurrence of an Event of Default, if the Premises or any part
of them are then assigned or sublet, Landlord, in addition to any other remedies
provided in this Lease or provided by law, may, at its option, collect directly
from such assignee or subtenant all rents due and becoming due to Tenant under
such assignment or sublease and apply such rent against any sums due to Landlord
from Tenant under this Lease, and no such collection shall be construed to
constitute a novation or release of Tenant from the further performance of
Tenant’s obligations under this Lease.

 

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9.3 In addition to Landlord’s right to approve of any subtenant or assignee,
Landlord shall have the option, in its sole discretion, in the event of any
proposed subletting or assignment that is not a Permitted Transfer (as defined
in Section 9.8 below), to terminate this Lease, or in the case of a proposed
subletting of less than the entire Premises, to recapture the portion of the
Premises to be sublet, as of the date the subletting or assignment is to be
effective. The option shall be exercised, if at all, by Landlord giving Tenant
written notice given by Landlord to Tenant within thirty (30) days following
Landlord’s receipt of Tenant’s written notice as required above. However, if
Tenant notifies Landlord, within ten (10) days after receipt of Landlord’s
termination notice, that Tenant is rescinding its proposed assignment or
sublease, the termination notice shall be void and this Lease shall continue in
full force and effect. If this Lease shall be terminated with respect to the
entire Premises pursuant to this Section, the Term of this Lease shall end on
the date stated in Tenant’s notice as the effective date of the sublease or
assignment as if that date had been originally fixed in this Lease for the
expiration of the Term. If Landlord recaptures under this Section only a portion
of the Premises, the rent to be paid from time to time during the unexpired Term
shall abate proportionately based on the proportion by which the approximate
square footage of the remaining portion of the Premises shall be less than that
of the Premises as of the date immediately prior to such recapture. Tenant
shall, at Tenant’s own cost and expense, discharge in full any outstanding
commission obligation which may be due and owing as a result of any proposed
assignment or subletting, whether or not the Premises are recaptured pursuant to
this Section 9.3 and rented by Landlord to the proposed tenant or any other
tenant.
9.4 In the event that Tenant sells, sublets, assigns or transfers this Lease,
Tenant shall pay to Landlord as additional rent an amount equal to fifty percent
(50%) of any Increased Rent (as defined below), less the Costs Component (as
defined below), when and as such Increased Rent as and when received by Tenant.
As used in this Section, “Increased Rent” shall mean the excess of (a) all rent
and other consideration which Tenant is entitled to receive by reason of any
sale, sublease, assignment or other transfer of this Lease, over (b) the rent
otherwise payable by Tenant under this Lease at such time. For purposes of the
foregoing, any consideration received by Tenant in form other than cash shall be
valued at its fair market value as determined by Landlord in good faith. The
“Costs Component” is that amount which, if paid monthly, would fully amortize on
a straight-line basis, over the entire period for which Tenant is to receive
Increased Rent, the reasonable costs incurred by Tenant for leasing commissions,
reasonable attorneys’ fees, and tenant improvements in connection with such
sublease, assignment or other transfer.
9.5 The parties agree that this Section 9.5 shall not apply to Permitted
Transfers, which are instead subject to the terms of Section 9.8. It shall be
considered reasonable for Landlord to withhold its consent to any assignment of
this Lease or sublease of any portion of the Premises if at the time of either
Tenant’s notice of the proposed assignment or sublease or the proposed
commencement date thereof, there shall exist any uncured default of Tenant or
matter which will become a default of Tenant with passage of time unless cured,
or if the proposed assignee or sublessee is an entity: (a) with which Landlord
is already in negotiation; (b) is already an occupant of the Building unless
Landlord is unable to provide the amount of space required by such occupant;
(c) is a governmental agency; (d) is incompatible with the character of
occupancy of the Building; (e) with which the payment for the sublease or
assignment is determined in whole or in part based upon its net income or
profits; or (f) would subject the Premises to a use which would: (i) involve
increased personnel or wear upon the Building; (ii) violate any exclusive right
granted to another tenant of the Building; (iii) require any addition to or
modification of the Premises or the Building in order to comply with building
code or other governmental requirements; or, (iv) involve a violation of
Section 1.2. Tenant expressly agrees that for the purposes of any statutory or
other requirement of reasonableness on the part of Landlord, Landlord’s refusal
to consent to any assignment or sublease for any of the reasons described in
this Section 9.5, shall be conclusively deemed to be reasonable.
9.6 Upon any request to assign or sublet, Tenant will pay to Landlord the
Assignment/Subletting Fee plus, on demand, a sum (the “Reimbursement Amount”)
equal to all of Landlord’s reasonable and customary costs, including reasonable
attorney’s fees, incurred in investigating and considering any proposed or
purported assignment or pledge of this Lease or sublease of any of the Premises,
regardless of whether Landlord shall consent to, refuse consent, or determine
that Landlord’s consent is not required for, such assignment, pledge or
sublease. Notwithstanding the foregoing, with respect to Permitted Transfers
only, Tenant shall not be required to pay the Assignment/Subletting Fee and
instead shall only be required to pay the Reimbursement Amount. Any purported
sale, assignment, mortgage, transfer of this Lease or subletting which does not
comply with the provisions of this Article 9 shall be void.
9.7 Subject to the terms of Section 9.8 below, if Tenant is a corporation,
limited liability company, partnership or trust, any transfer or transfers of or
change or changes within any twelve (12) month period in the number of the
outstanding voting shares of the corporation or limited liability company, the
general partnership interests in the partnership or the identity of the persons
or entities controlling the activities of such partnership or trust resulting in
the persons or entities owning or controlling a majority of such shares,
partnership interests or activities of such partnership or trust at the
beginning of such period no longer having such ownership or control shall be
regarded as equivalent to an assignment of this Lease to the persons or entities
acquiring such ownership or control and shall be subject to all the provisions
of this Article 9 to the same extent and for all intents and purposes as though
such an assignment.

 

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9.8 Notwithstanding anything in Section 9.1 above to the contrary, so long as
Tenant is not entering into the Permitted Transfer (as defined below) for the
purpose of avoiding or otherwise circumventing the remaining terms of this
Article 9, Tenant may assign its entire interest under this Lease, without the
consent of Landlord, to (a) an affiliate, subsidiary, or parent of Tenant, or a
corporation, partnership or other legal entity wholly owned by Tenant
(collectively, an “Affiliated Party”), or (b) a successor to Tenant by purchase,
merger, consolidation or reorganization, provided that all of the following
conditions are satisfied (each such transfer a “Permitted Transfer” and any such
assignee or sublessee of a Permitted Transfer, a “Permitted Transferee”):
(i) Tenant is not in default under this Lease; (ii) the Permitted Use does not
allow the Premises to be used for retail purposes; (iii) Tenant shall give
Landlord written notice at least thirty (30) days prior to the effective date of
the proposed Permitted Transfer; (iv) with respect to a proposed Permitted
Transfer to an Affiliated Party, Tenant continues to have a net worth or
shareholder equity equal to or greater than Tenant’s net worth or shareholder
equity at the date of this Lease; and (v) with respect to a purchase, merger,
consolidation or reorganization or any Permitted Transfer which results in
Tenant ceasing to exist as a separate legal entity, (A) Tenant’s successor shall
own all or substantially all of the assets of Tenant, and (B) Tenant’s successor
shall have a net worth or shareholder equity which is at least equal to the
greater of Tenant’s net worth or shareholder equity at the date of this Lease or
Tenant’s net worth or shareholder equity as of the day prior to the proposed
purchase, merger, consolidation or reorganization. Tenant’s notice to Landlord
shall include information and documentation showing that each of the above
conditions has been satisfied. If requested by Landlord, Tenant’s successor
shall sign a commercially reasonable form of assumption agreement. As used
herein, (1) “parent” shall mean a company which owns a majority of Tenant’s
voting equity; (2) “subsidiary” shall mean an entity wholly owned by Tenant or
at least fifty-one percent (51%) of whose voting equity is owned by Tenant; and
(3) “affiliate” shall mean an entity controlled, controlling or under common
control with Tenant.
10. INDEMNIFICATION. None of the Landlord Entities shall be liable and Tenant
hereby waives all claims against them for any damage to any property or any
injury to any person in or about the Premises or the Building by or from any
cause whatsoever (including without limiting the foregoing, rain or water
leakage of any character from the roof, windows, walls, basement, pipes,
plumbing works or appliances, the Building not being in good condition or
repair, gas, fire, oil, electricity or theft), except to the extent caused by or
arising from Landlord’s breach of this Lease or the gross negligence or willful
misconduct of Landlord or its agents, employees or contractors. Tenant shall
protect, indemnify and hold the Landlord Entities harmless from and against any
and all loss, claims, liability or costs (including court costs and attorney’s
fees) incurred by reason of (a) any damage to any property (including but not
limited to property of any Landlord Entity) or any injury (including but not
limited to death) to any person occurring in, on or about the Premises or the
Building to the extent that such injury or damage shall be caused by or arise
from any actual or alleged act, neglect, fault, or omission by or of Tenant or
any Tenant Entity to meet any standards imposed by any duty with respect to the
injury or damage; (b) the conduct or management of any work or thing whatsoever
done by the Tenant in or about the Premises or from transactions of the Tenant
concerning the Premises; (c) Tenant’s actual or asserted failure to comply with
any and all Regulations applicable to the condition or use of the Premises or
its occupancy; or (d) any breach or default on the part of Tenant in the
performance of any covenant or agreement on the part of the Tenant to be
performed pursuant to this Lease. The provisions of this Article shall survive
the termination of this Lease with respect to any claims or liability accruing
prior to such termination.
11. INSURANCE.
11.1 Tenant shall keep in force throughout the Term: (a) a Commercial General
Liability insurance policy or policies to protect the Landlord Entities against
any liability to the public or to any invitee of Tenant or a Landlord Entity
incidental to the use of or resulting from any accident occurring in or upon the
Premises with a limit of not less than $1,000,000 per occurrence and not less
than $2,000,000 in the annual aggregate, or such larger amount as Landlord may
prudently require from time to time, covering bodily injury and property damage
liability and $1,000,000 products/completed operations aggregate; (b) Business
Auto Liability covering owned, non-owned and hired vehicles with a limit of not
less than $1,000,000 per accident; (c) Worker’s Compensation Insurance with
limits as required by statute with Employers Liability and limits of $500,000
each accident, $500,000 disease policy limit, $500,000 disease—each employee for
employers with employees in states other than Washington. For employers with
employees solely in the State of Washington, evidence of coverage in the state
worker’s compensation program. Stop gap coverage is required either through the
state program or as part of the employer’s general liability coverage; (d) All
Risk or Special Form coverage protecting Tenant against loss of or damage to
Tenant’s alterations, additions, improvements, carpeting, floor coverings,
panelings, decorations, fixtures, inventory and other business personal property
situated in or about the Premises to the full replacement value of the property
so insured; and, (e) Business Interruption Insurance with limit of liability
representing loss of at least approximately six (6) months of income.

 

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11.2 The aforesaid policies shall (a) be provided at Tenant’s expense; (b) name
the Landlord Entities as additional insureds (General Liability) and loss payee
(Property—Special Form) for alterations, additions, improvements, carpeting,
floor coverings and fixtures at the Premises; (c) be issued by an insurance
company with a minimum Best’s rating of “A-:VII” during the Term; and (d)
provide that said insurance shall not be canceled unless thirty (30) days prior
written notice (ten days for non-payment of premium) shall have been given to
Landlord; a certificate of Liability insurance on ACORD Form 25 and a
certificate of Property insurance on ACORD Form 28 shall be delivered to
Landlord by Tenant upon the Commencement Date and at least ten (10) days prior
to each renewal of said insurance.
11.3 Whenever Tenant shall undertake any alterations, additions or improvements
in, to or about the Premises (“Work”) the aforesaid insurance protection must
extend to and include injuries to persons and damage to property arising in
connection with such Work, without limitation including liability under any
applicable structural work act, and such other insurance as Landlord shall
require; and the policies of or certificates evidencing such insurance must be
delivered to Landlord prior to the commencement of any such Work.
11.4 Landlord shall keep in force throughout the Term a Commercial General
Liability insurance policy for the common areas of the Building with a limit of
not less than $1,000,000 per occurrence and not less than $2,000,000 in the
annual aggregate and Special Form Property coverage for the Building at 100% of
replacement cost. The carrying of the insurance described herein shall in no way
be interpreted as relieving Tenant of any responsibility or liability under this
Lease. The cost of all such insurance is included in Expenses.
12. WAIVER OF SUBROGATION. So long as their respective insurers so permit,
Tenant and Landlord hereby mutually waive their respective rights of recovery
against each other for any loss insured by fire, extended coverage, All Risks or
other insurance now or hereafter existing for the benefit of the respective
party but only to the extent of the net insurance proceeds payable under such
policies. Each party shall obtain any special endorsements required by their
insurer to evidence compliance with the aforementioned waiver.
13. SERVICES AND UTILITIES.
13.1 Subject to the other provisions of this Lease, Landlord agrees to furnish
to the Premises during Building Business Hours (specified on the Reference
Pages) on generally recognized business days (but exclusive in any event of
Sundays and national and local legal holidays), the following services and
utilities subject to the rules and regulations of the Building prescribed from
time to time: (a) water suitable for normal office use of the Premises; (b) heat
and air conditioning required in Landlord’s commercially reasonable judgment for
the intended use and occupation of the Premises during Building Business Hours;
(c) cleaning and janitorial service; (d) elevator service by nonattended
automatic elevators, if applicable; and, (e) equipment to bring to the Premises
electricity for lighting, convenience outlets and other normal office use. To
the extent that Tenant is not billed directly by a public utility, Tenant shall
pay, within fifteen (15) days of Landlord’s demand, for all electricity used by
Tenant in the Premises. The charge shall be at the rates charged for such
services by the local public utility. Alternatively, Landlord may elect to
include electricity costs in Expenses. Regardless of the method used to pass the
cost of electricity through to Tenant, Tenant shall not be charged for
electricity more than the net actual amount Landlord pays for such electricity
after any abatement, rebates or other credits. In the absence of Landlord’s
gross negligence or willful misconduct, Landlord shall not be liable for, and
Tenant shall not be entitled to, any abatement or reduction of rental by reason
of Landlord’s failure to furnish any of the foregoing, unless such failure shall
persist for an unreasonable time after written notice of such failure is given
to Landlord by Tenant and provided further that Landlord shall not be liable
when such failure is caused by accident, breakage, repairs, labor disputes of
any character, energy usage restrictions or by any other cause, similar or
dissimilar, beyond the reasonable control of Landlord. Landlord shall use
reasonable efforts to remedy any interruption in the furnishing of services and
utilities. Water, heat and air conditioning (subject to the terms set forth
herein regarding after hours HVAC), elevator service and electricity , shall be
provided twenty-four (24) hours per day, seven (7) days per week, subject to
events outside of the reasonable control of Landlord and the terms of this
Lease.
13.2 Should Tenant require any additional work or service, as described above,
including services furnished outside ordinary business hours specified above,
Landlord may, on terms to be agreed, upon reasonable advance notice by Tenant,
furnish such additional service and Tenant agrees to pay Landlord such charges
as may be agreed upon, including any tax imposed thereon, but in no event at a
charge less than Landlord’s actual cost plus overhead for such additional
service and, where appropriate, a reasonable allowance for depreciation of any
systems being used to provide such service. The current charge for after-hours
HVAC service, which is subject to change at any time, is specified on the
Reference Pages.
13.3 Wherever heat-generating machines or equipment are used by Tenant in the
Premises which affect the temperature otherwise maintained by the air
conditioning system or Tenant allows occupancy of the Premises by more persons
than the heating and air conditioning system is designed to accommodate, in
either event whether with or without Landlord’s approval, Landlord reserves the
right to install supplementary heating and/or air conditioning units in or for
the benefit of the Premises and the cost thereof, including the cost of
installation and the cost of operations and maintenance, shall be paid by Tenant
to Landlord within fifteen (15) days of Landlord’s demand.

 

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13.4 Tenant will not, without the written consent of Landlord or as otherwise
permitted in Exhibit B attached hereto, use any apparatus or device in the
Premises, including but not limited to, electronic data processing machines and
machines using current in excess of 2000 watts and/or 20 amps or 120 volts,
which will in any way increase the amount of electricity or water usually
furnished or supplied for use of the Premises for normal office use, nor connect
with electric current, except through existing electrical outlets in the
Premises, or water pipes, any apparatus or device for the purposes of using
electrical current or water. If Tenant shall require water or electric current
in excess of that usually furnished or supplied for use of the Premises as
normal office use, Tenant shall procure the prior written consent of Landlord
for the use thereof, which Landlord may refuse, and if Landlord does consent,
Landlord may cause a water meter or electric current meter to be installed so as
to measure the amount of such excess water and electric current. The cost of any
such meters shall be paid for by Tenant. Tenant agrees to pay to Landlord within
fifteen (15) days of Landlord’s demand , the cost of all such excess water and
electric current consumed (as shown by said meters, if any, or, if none, as
reasonably estimated by Landlord) at the rates charged for such services by the
local public utility or agency, as the case may be, furnishing the same, plus
any additional expense incurred in keeping account of the water and electric
current so consumed.
13.5 Tenant will not, without the written consent of Landlord, contract with a
utility provider to service the Premises with any utility, including, but not
limited to, telecommunications, electricity, water, sewer or gas, which is not
previously providing such service to other tenants in the Building. Subject to
Landlord’s reasonable rules and regulations and the provisions of Articles 6 and
26, Tenant shall be entitled to the use of wiring (“Communications Wiring”) from
the existing telecommunications nexus in the Building to the Premises,
sufficient for normal general office use of the Premises. Tenant shall not
install any additional Communications Wiring, nor remove any Communications
Wiring, without in each instance obtaining the prior written consent of
Landlord, which consent may be withheld in Landlord’s sole and absolute
discretion. Landlord’s shall in no event be liable for disruption in any service
obtained by Tenant pursuant to this paragraph.
13.6 During the Term, Tenant shall have access to the Building for Tenant and
its employees twenty-four (24) hours per day, seven (7) days per week, three
hundred sixty-five (365) days per year, subject to the terms of this Lease and
such security or monitoring systems as Landlord may reasonably impose,
including, without limitation, sign-in procedures and/or presentation of
identification cards to the extent applicable
14. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains
possession of the Premises or part of them after termination of this Lease by
lapse of time or otherwise at the rate (“Holdover Rate”) which shall be One
Hundred Fifty Percent (150%) of the greater of (a) the amount of the Annual Rent
for the last period prior to the date of such termination plus Tenant’s
Proportionate Share of Expenses and Taxes under Article 4; and (b) the then
market rental value of the Premises as reasonably determined by Landlord
assuming a new lease of the Premises at market rates after concessions and costs
of the then usual duration and other terms, in either case, prorated on a daily
basis, and also pay all damages sustained by Landlord by reason of such
retention. If Landlord gives notice to Tenant of Landlord’s election to such
effect, such holding over shall constitute renewal of this Lease for a period
from month to month at the Holdover Rate, but if the Landlord does not so elect,
no such renewal shall result notwithstanding acceptance by Landlord of any sums
due hereunder after such termination; and instead, a tenancy at sufferance at
the Holdover Rate shall be deemed to have been created. In any event, no
provision of this Article 14 shall be deemed to waive Landlord’s right of
reentry or any other right under this Lease or at law.
15. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to ground or underlying leases and
to the lien of any mortgages or deeds of trust now or hereafter placed on,
against or affecting the Building, Landlord’s interest or estate in the
Building, or any ground or underlying lease; provided, however, that if the
lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust
elects to have Tenant’s interest in this Lease be superior to any such
instrument, then, by notice to Tenant, this Lease shall be deemed superior,
whether this Lease was executed before or after said instrument. Notwithstanding
the foregoing, Tenant covenants and agrees to execute and deliver within ten
(10) days of Landlord’s request such further instruments evidencing such
subordination or superiority of this Lease as may be required by Landlord.
Notwithstanding the foregoing, upon written request by Tenant, Landlord will use
reasonable efforts to obtain a non-disturbance, subordination and attornment
agreement from Landlord’s then current mortgagee on such mortgagee’s then
current standard form of agreement. “Reasonable efforts” of Landlord shall not
require Landlord to incur any cost, expense or liability to obtain such
agreement, it being agreed that Tenant shall be responsible for any fee or
review costs charged by the mortgagee. Upon request of Landlord, Tenant will
execute the mortgagee’s form of non-disturbance, subordination and attornment
agreement and return the same to Landlord for execution by the mortgagee.
Landlord’s failure to obtain a non-disturbance, subordination and attornment
agreement for Tenant shall have no effect on the rights, obligations and
liabilities of Landlord and Tenant or be considered to be a default by Landlord
hereunder. Landlord represents that as of the date of this Lease, there exists
no mortgage or deed of trust encumbering Landlord’s interest in the Building.

 

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16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with all
the rules and regulations as set forth in Exhibit D to this Lease and all
reasonable and non-discriminatory modifications of and additions to them from
time to time put into effect by Landlord. Landlord shall not be responsible to
Tenant for the non-performance by any other tenant or occupant of the Building
of any such rules and regulations. If there is a conflict between this Lease and
any rules and regulations enacted after the date of this Lease or attached to
this Lease as Exhibit D, the terms of this Lease shall control.
17. REENTRY BY LANDLORD.
17.1 Landlord reserves and shall at all times have the right to re-enter the
Premises to inspect the same, to supply janitor service and any other service to
be provided by Landlord to Tenant under this Lease, to show said Premises to
prospective purchasers, mortgagees or tenants, and to alter, improve or repair
the Premises and any portion of the Building, without abatement of rent, and may
for that purpose erect, use and maintain scaffolding, pipes, conduits and other
necessary structures and open any wall, ceiling or floor in and through the
Building and Premises where reasonably required by the character of the work to
be performed, provided entrance to the Premises shall not be blocked thereby,
and further provided that the business of Tenant shall not be interfered with
unreasonably. Notwithstanding the foregoing, except (i) to the extent requested
by Tenant, (ii) in connection with scheduled maintenance programs, and/or
(iii) in the event of an emergency, Landlord shall provide to Tenant reasonable
prior notice (either written or oral) before Landlord enters the Premises to
perform any repairs therein. Landlord shall have the right at any time to change
the arrangement and/or locations of entrances, or passageways, doors and
doorways, and corridors, windows, elevators, stairs, toilets or other public
parts of the Building and to change the name, number or designation by which the
Building is commonly known. In the event that Landlord damages any portion of
any wall or wall covering, ceiling, or floor or floor covering within the
Premises, Landlord shall repair or replace the damaged portion to match the
original as nearly as commercially reasonable but shall not be required to
repair or replace more than the portion actually damaged. Tenant hereby waives
any claim for damages for any injury or inconvenience to or interference with
Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, and
any other loss occasioned by any action of Landlord authorized by this Article
17.
17.2 For each of the aforesaid purposes, Landlord shall at all times have and
retain a key with which to unlock all of the doors in the Premises, excluding
Tenant’s vaults and safes or special security areas (designated in advance), and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open said doors in an emergency to obtain entry to any portion of the
Premises. As to any portion to which access cannot be had by means of a key or
keys in Landlord’s possession, Landlord is authorized to gain access by such
means as Landlord shall elect and the cost of repairing any damage occurring in
doing so shall be borne by Tenant and paid to Landlord within fifteen (15) days
of Landlord’s demand.
18. DEFAULT.
18.1 Except as otherwise provided in Article 20, the following events shall be
deemed to be Events of Default under this Lease:
18.1.1 Tenant shall fail to pay when due any sum of money becoming due to be
paid to Landlord under this Lease, whether such sum be any installment of the
rent reserved by this Lease, any other amount treated as additional rent under
this Lease, or any other payment or reimbursement to Landlord required by this
Lease, whether or not treated as additional rent under this Lease, and such
failure shall continue for a period of five (5) business days after written
notice that such payment was not made when due, but if any such notice shall be
given two (2) times during the twelve (12) month period commencing with the date
of the first (1st) such notice, the third (3rd) failure to pay within five
(5) business days after due any additional sum of money becoming due to be paid
to Landlord under this Lease during such twelve (12) month period shall be an
Event of Default, without notice. Any default notice delivered by Landlord shall
set forth in reasonable detail the amount of loss or damage suffered by
Landlord. The notice required pursuant to this Section 18.1 shall replace rather
than supplement any statutory notice required under applicable Regulations.
18.1.2 Tenant shall fail to comply with any term, provision or covenant of this
Lease which is not provided for in another Section of this Article and shall not
cure such failure within twenty (20) days (forthwith, if the failure involves a
hazardous condition) after written notice of such failure to Tenant provided,
however, that such failure shall not be an event of default if such failure
could not reasonably be cured during such twenty (20) day period, Tenant has
commenced the cure within such twenty (20) day period and thereafter is
diligently pursuing such cure to completion, but the total aggregate cure period
shall not exceed one hundred twenty (120) days (provided, however, that such
120 day period shall be extended one day for each day of Force Majeure Delay so
long as Tenant is diligently pursuing such cure to completion). As used in the
foregoing sentence, “Force Majeure Delay” means strikes, acts of God, shortages
of labor or materials, war, terrorist acts, civil disturbances and other causes
beyond the control of Tenant. Any default notice delivered by Landlord shall set
forth in reasonable detail the amount of loss or damage suffered by Landlord.

 

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18.1.3 Tenant shall fail to vacate the Premises immediately upon termination of
this Lease, by lapse of time or otherwise, or upon termination of Tenant’s right
to possession only.
18.1.4 Tenant shall become insolvent, admit in writing its inability to pay its
debts generally as they become due, file a petition in bankruptcy or a petition
to take advantage of any insolvency statute, make an assignment for the benefit
of creditors, make a transfer in fraud of creditors, apply for or consent to the
appointment of a receiver of itself or of the whole or any substantial part of
its property, or file a petition or answer seeking reorganization or arrangement
under the federal bankruptcy laws, as now in effect or hereafter amended, or any
other applicable law or statute of the United States or any state thereof.
18.1.5 A court of competent jurisdiction shall enter an order, judgment or
decree adjudicating Tenant bankrupt, or appointing a receiver of Tenant, or of
the whole or any substantial part of its property, without the consent of
Tenant, or approving a petition filed against Tenant seeking reorganization or
arrangement of Tenant under the bankruptcy laws of the United States, as now in
effect or hereafter amended, or any state thereof, and such order, judgment or
decree shall not be vacated or set aside or stayed within sixty (60) days from
the date of entry thereof.
19. REMEDIES.
19.1 Except as otherwise provided in Article 20, upon the occurrence of any of
the Events of Default described or referred to in Article 18, Landlord shall
have the option to pursue any one or more of the following remedies without any
notice or demand whatsoever, concurrently or consecutively and not
alternatively:
19.1.1 Landlord may, at its election, terminate this Lease or terminate Tenant’s
right to possession only, without terminating the Lease.
19.1.2 Upon any termination of this Lease, whether by lapse of time or
otherwise, or upon any termination of Tenant’s right to possession without
termination of the Lease, Tenant shall surrender possession and vacate the
Premises immediately, and deliver possession thereof to Landlord, and Tenant
hereby grants to Landlord full and free license to enter into and upon the
Premises in such event and to repossess Landlord of the Premises as of
Landlord’s former estate and to expel or remove Tenant and any others who may be
occupying or be within the Premises and to remove Tenant’s signs and other
evidence of tenancy and all other property of Tenant therefrom without being
deemed in any manner guilty of trespass, eviction or forcible entry or detainer,
and without incurring any liability for any damage resulting therefrom, Tenant
waiving any right to claim damages for such re-entry and expulsion, and without
relinquishing Landlord’s right to rent or any other right given to Landlord
under this Lease or by operation of law.
19.1.3 Upon any termination of this Lease, whether by lapse of time or
otherwise, Landlord shall be entitled to recover as damages, all rent, including
any amounts treated as additional rent under this Lease, and other sums due and
payable by Tenant on the date of termination, plus as liquidated damages and not
as a penalty, an amount equal to the sum of: (a) an amount equal to the then
present value of the rent reserved in this Lease for the residue of the stated
Term of this Lease including any amounts treated as additional rent under this
Lease and all other sums provided in this Lease to be paid by Tenant, minus the
fair rental value of the Premises for such residue; (b) the value of the time
and expense necessary to obtain a replacement tenant or tenants, and the
estimated expenses described in Section 19.1.4 relating to recovery of the
Premises, preparation for reletting and for reletting itself; and (c) the cost
of performing any other covenants which would have otherwise been performed by
Tenant.
19.1.4 Upon any termination of Tenant’s right to possession only without
termination of the Lease:
19.1.4.1 Neither such termination of Tenant’s right to possession nor Landlord’s
taking and holding possession thereof as provided in Section 19.1.2 shall
terminate the Lease or release Tenant, in whole or in part, from any obligation,
including Tenant’s obligation to pay the rent, including any amounts treated as
additional rent, under this Lease for the full Term, and if Landlord so elects
Tenant shall continue to pay to Landlord the entire amount of the rent as and
when it becomes due, including any amounts treated as additional rent under this
Lease, for the remainder of the Term plus any other sums provided in this Lease
to be paid by Tenant for the remainder of the Term.

 

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19.1.4.2 Landlord shall use commercially reasonable efforts to relet the
Premises or portions thereof to the extent required by applicable law. Landlord
and Tenant agree that nevertheless Landlord shall at most be required to use
only the same efforts Landlord then uses to lease premises in the Building
generally and that in any case that Landlord shall not be required to give any
preference or priority to the showing or leasing of the Premises or portions
thereof over any other space that Landlord may be leasing or have available and
may place a suitable prospective tenant in any such other space regardless of
when such other space becomes available and that Landlord shall have the right
to relet the Premises for a greater or lesser term than that remaining under
this Lease, the right to relet only a portion of the Premises, or a portion of
the Premises or the entire Premises as a part of a larger area, and the right to
change the character or use of the Premises. In connection with or in
preparation for any reletting, Landlord may, but shall not be required to, make
repairs, alterations and additions in or to the Premises and redecorate the same
to the extent Landlord deems necessary or desirable, and Tenant shall pay the
cost thereof, together with Landlord’s expenses of reletting, including, without
limitation, any commission incurred by Landlord, within five (5) business days
of Landlord’s demand. Landlord shall not be required to observe any instruction
given by Tenant about any reletting or accept any tenant offered by Tenant
unless such offered tenant has a credit-worthiness acceptable to Landlord and
leases the entire Premises upon terms and conditions including a rate of rent
(after giving effect to all expenditures by Landlord for tenant improvements,
broker’s commissions and other leasing costs) all no less favorable to Landlord
than as called for in this Lease, nor shall Landlord be required to make or
permit any assignment or sublease for more than the current term or which
Landlord would not be required to permit under the provisions of Article 9.
19.1.4.3 Until such time as Landlord shall elect to terminate the Lease and
shall thereupon be entitled to recover the amounts specified in such case in
Section 19.1.3, Tenant shall pay to Landlord upon demand the full amount of all
rent, including any amounts treated as additional rent under this Lease and
other sums reserved in this Lease for the remaining Term, together with the
costs of repairs, alterations, additions, redecorating and Landlord’s expenses
of reletting and the collection of the rent accruing therefrom (including
reasonable attorney’s fees and broker’s commissions), as the same shall then be
due or become due from time to time, less only such consideration as Landlord
may have received from any reletting of the Premises; and Tenant agrees that
Landlord may file suits from time to time to recover any sums falling due under
this Article 19 as they become due. Any proceeds of reletting by Landlord in
excess of the amount then owed by Tenant to Landlord from time to time shall be
credited against Tenant’s future obligations under this Lease but shall not
otherwise be refunded to Tenant or inure to Tenant’s benefit.
19.2 Upon the occurrence of an Event of Default, Landlord may (but shall not be
obligated to) cure such default in a commercially reasonable manner at Tenant’s
sole expense. Without limiting the generality of the foregoing, Landlord may, at
Landlord’s option, enter into and upon the Premises if Landlord determines in
its sole discretion that Tenant is not acting within a commercially reasonable
time to maintain, repair or replace anything for which Tenant is responsible
under this Lease or to otherwise effect compliance with its obligations under
this Lease and correct the same, without being deemed in any manner guilty of
trespass, eviction or forcible entry and detainer and without incurring any
liability for any damage or interruption of Tenant’s business resulting
therefrom and Tenant agrees to reimburse Landlord within five (5) business days
of Landlord’s demand as additional rent, for any expenses which Landlord may
incur in thus effecting compliance with Tenant’s obligations under this Lease,
plus interest from the date of expenditure by Landlord at the Wall Street
Journal prime rate.
19.3 Tenant understands and agrees that in entering into this Lease, Landlord is
relying upon receipt of all the Annual Rent and Monthly Installments of Rent to
become due with respect to all the Premises originally leased hereunder over the
full initial Term of this Lease for amortization, including interest at the
Amortization Rate. For purposes hereof, the “Concession Amount” shall be defined
as the aggregate of all amounts forgone or expended by Landlord as free rent
under the lease, under Exhibit B hereof for construction allowances (excluding
therefrom any amounts expended by Landlord for Tenant Improvements (if any), as
defined in Exhibit B), and for brokers’ commissions payable by reason of this
Lease. Accordingly, Tenant agrees that if this Lease or Tenant’s right to
possession of the Premises leased hereunder shall be terminated as of any date
(“Default Termination Date”) prior to the expiration of the full initial Term
hereof by reason of a default of Tenant, there shall be due and owing to
Landlord as of the day prior to the Default Termination Date, as rent in
addition to all other amounts owed by Tenant as of such Date, the amount
(“Unamortized Amount”) of the Concession Amount determined as set forth below;
provided, however, that in the event that such amounts are recovered by Landlord
pursuant to any other provision of this Article 19 or the rental abatement
clauses set forth in the Reference Pages of this Lease, Landlord agrees that it
shall not attempt to recover such amounts (or applicable portion thereof)
pursuant to this Paragraph 19.3. For the purposes hereof, the Unamortized Amount
shall be determined in the same manner as the remaining principal balance of a
mortgage with interest at the Amortization Rate payable in level payments over
the same length of time as from the effectuation of the Concession concerned to
the end of the full initial Term of this Lease would be determined. The
foregoing provisions shall also apply to and upon any reduction of space in the
Premises, as though such reduction were a termination for Tenant’s default,
except that (a) the Unamortized Amount shall be reduced by any amounts paid by
Tenant to Landlord to effectuate such reduction and (b) the manner of
application shall be that the Unamortized Amount shall first be determined as
though for a full termination as of the effective date of the elimination of the
portion, but then the amount so determined shall be multiplied by the fraction
of which the numerator is the rentable square footage of the eliminated portion
and the denominator is the rentable square footage of the Premises originally
leased hereunder; and the amount thus obtained shall be the Unamortized Amount.

 

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19.4 If, on account of any breach or default by Tenant in Tenant’s obligations
under the terms and conditions of this Lease, it shall become necessary or
appropriate for Landlord to employ or consult with an attorney or collection
agency concerning or to enforce or defend any of Landlord’s rights or remedies
arising under this Lease or to collect any sums due from Tenant, Tenant agrees
to pay all costs and fees so incurred by Landlord, including, without
limitation, reasonable attorneys’ fees and costs. TENANT EXPRESSLY WAIVES ANY
RIGHT TO: (A) TRIAL BY JURY; AND (B) SERVICE OF ANY NOTICE REQUIRED BY ANY
PRESENT OR FUTURE LAW OR ORDINANCE APPLICABLE TO LANDLORDS OR TENANTS BUT NOT
REQUIRED BY THE TERMS OF THIS LEASE.
19.5 Pursuit of any of the foregoing remedies shall not preclude pursuit of any
of the other remedies provided in this Lease or any other remedies provided by
law (all such remedies being cumulative), nor shall pursuit of any remedy
provided in this Lease constitute a forfeiture or waiver of any rent due to
Landlord under this Lease or of any damages accruing to Landlord by reason of
the violation of any of the terms, provisions and covenants contained in this
Lease.
19.6 No act or thing done by Landlord or its agents during the Term shall be
deemed a termination of this Lease or an acceptance of the surrender of the
Premises, and no agreement to terminate this Lease or accept a surrender of said
Premises shall be valid, unless in writing signed by Landlord. No waiver by
Landlord of any violation or breach of any of the terms, provisions and
covenants contained in this Lease shall be deemed or construed to constitute a
waiver of any other violation or breach of any of the terms, provisions and
covenants contained in this Lease. Landlord’s acceptance of the payment of
rental or other payments after the occurrence of an Event of Default shall not
be construed as a waiver of such Default, unless Landlord so notifies Tenant in
writing. Forbearance by Landlord in enforcing one or more of the remedies
provided in this Lease upon an Event of Default shall not be deemed or construed
to constitute a waiver of such Event of Default or of Landlord’s right to
enforce any such remedies with respect to such Event of Default or any
subsequent Event of Default.
19.7 Intentionally Omitted.
19.8 Any and all property which may be removed from the Premises by Landlord
pursuant to the authority of this Lease or of law, to which Tenant is or may be
entitled, may be handled, removed and/or stored, as the case may be, by or at
the direction of Landlord but at the risk, cost and expense of Tenant, and
Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all
expenses incurred in such removal and all storage charges against such property
so long as the same shall be in Landlord’s possession or under Landlord’s
control. Any such property of Tenant not retaken by Tenant from storage within
thirty (30) days after removal from the Premises shall, at Landlord’s option, be
deemed conveyed by Tenant to Landlord under this Lease as by a bill of sale
without further payment or credit by Landlord to Tenant.
19.9 If more than two (2) Events of Default occur during the Term or any renewal
thereof, Tenant’s renewal options, expansion options, purchase options and
rights of first offer and/or refusal, if any are provided for in this Lease,
shall be null and void.
20. TENANT’S BANKRUPTCY OR INSOLVENCY.
20.1 If at any time and for so long as Tenant shall be subjected to the
provisions of the United States Bankruptcy Code or other law of the United
States or any state thereof for the protection of debtors as in effect at such
time (each a “Debtor’s Law”):
20.1.1 Tenant, Tenant as debtor-in-possession, and any trustee or receiver of
Tenant’s assets (each a “Tenant’s Representative”) shall have no greater right
to assume or assign this Lease or any interest in this Lease, or to sublease any
of the Premises than accorded to Tenant in Article 9, except to the extent
Landlord shall be required to permit such assumption, assignment or sublease by
the provisions of such Debtor’s Law. Without limitation of the generality of the
foregoing, any right of any Tenant’s Representative to assume or assign this
Lease or to sublease any of the Premises shall be subject to the conditions
that:
20.1.1.1 Such Debtor’s Law shall provide to Tenant’s Representative a right of
assumption of this Lease which Tenant’s Representative shall have timely
exercised and Tenant’s Representative shall have fully cured any default of
Tenant under this Lease.

 

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20.1.1.2 Tenant’s Representative or the proposed assignee, as the case shall be,
shall have deposited with Landlord as security for the timely payment of rent an
amount equal to the larger of: (a) three (3) months’ rent and other monetary
charges accruing under this Lease; and (b) any sum specified in Article 5; and
shall have provided Landlord with adequate other assurance of the future
performance of the obligations of the Tenant under this Lease. Without
limitation, such assurances shall include, at least, in the case of assumption
of this Lease, demonstration to the satisfaction of the Landlord that Tenant’s
Representative has and will continue to have sufficient unencumbered assets
after the payment of all secured obligations and administrative expenses to
assure Landlord that Tenant’s Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and, in the case of
assignment, submission of current financial statements of the proposed assignee,
audited by an independent certified public accountant reasonably acceptable to
Landlord and showing a net worth and working capital in amounts determined by
Landlord to be sufficient to assure the future performance by such assignee of
all of the Tenant’s obligations under this Lease.
20.1.1.3 The assumption or any contemplated assignment of this Lease or
subleasing any part of the Premises, as shall be the case, will not breach any
provision in any other lease, mortgage, financing agreement or other agreement
by which Landlord is bound.
20.1.1.4 Landlord shall have, or would have had absent the Debtor’s Law, no
right under Article 9 to refuse consent to the proposed assignment or sublease
by reason of the identity or nature of the proposed assignee or sublessee or the
proposed use of the Premises concerned.
21. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and
authority to enter into this Lease and that Tenant, while paying the rental and
performing its other covenants and agreements contained in this Lease, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or molestation from Landlord subject to the terms and provisions of
this Lease. Landlord shall not be liable for any interference or disturbance by
other tenants or third persons, nor shall Tenant be released from any of the
obligations of this Lease because of such interference or disturbance.
22. CASUALTY.
22.1 In the event the Premises or the Building are damaged by fire or other
cause and in Landlord’s reasonable estimation such damage can be materially
restored within one hundred eighty (180) days following the commencement of
restoration, Landlord shall forthwith repair the same and this Lease shall
remain in full force and effect, except that Tenant shall be entitled to a
proportionate abatement in rent from the date of such damage. Such abatement of
rent shall be made pro rata in accordance with the extent to which the damage
and the making of such repairs shall interfere with the use and occupancy by
Tenant of the Premises from time to time. Within forty-five (45) days from the
date of such damage, Landlord shall notify Tenant, in writing, of Landlord’s
reasonable estimation of the length of time within which material restoration
can be made, and Landlord’s determination shall be binding on Tenant. For
purposes of this Lease, the Building or Premises shall be deemed “materially
restored” if they are in such condition as would not prevent or materially
interfere with Tenant’s use of the Premises for the purpose for which it was
being used immediately before such damage.
22.2 If such repairs cannot, in Landlord’s reasonable estimation, be made within
one hundred eighty (180) days following the commencement of restoration,
Landlord and Tenant shall each have the option of giving the other, at any time
within thirty (30) days after Landlord’s notice of estimated restoration time,
notice terminating this Lease as of the date of such damage. In the event of the
giving of such notice, this Lease shall expire and all interest of the Tenant in
the Premises shall terminate as of the date of such damage as if such date had
been originally fixed in this Lease for the expiration of the Term. In the event
that neither Landlord nor Tenant exercises its option to terminate this Lease,
then Landlord shall repair or restore such damage, this Lease continuing in full
force and effect, and the rent hereunder shall be proportionately abated as
provided in Section 22.1.
22.3 Landlord shall not be required to repair or replace any damage or loss by
or from fire or other cause to any panelings, decorations, partitions,
additions, railings, ceilings, floor coverings, office fixtures or any other
property or improvements installed on the Premises by, or belonging to, Tenant.
Notwithstanding the foregoing, if the Lease is not terminated as provided herein
and Landlord elects to rebuild the Building and common areas, upon notice from
Landlord, Tenant shall assign or endorse over to Landlord (or to any party
designated by Landlord) all property insurance proceeds payable to Tenant under
Tenant’s insurance with respect to any alterations or improvements performed by
or for the benefit of Tenant and Landlord shall rebuild the Premises; provided
if the estimated cost to repair such alterations or improvements exceeds the
amount of insurance proceeds received by Landlord from Tenant’s insurance
carrier, Landlord shall deliver written notice to Tenant of the amount of such
excess cost, which notice shall include reasonably sufficient detail to permit
Tenant to determine whether it will pay such cost or elect that Landlord not
proceed with such repairs. Tenant shall have fifteen (15) days following such
written notice within which to elect to pay such excess costs or elect that
Landlord not proceed with such repairs. If Tenant elects not to pay such excess
costs, then Landlord may elect to proceed with repairs using available insurance
proceeds or Landlord may elect not to rebuild the improvements within the
Premises. If Tenant delivers written notice to Landlord of Tenant’s election to
pay such excess costs within such fifteen (15) day time period, the excess cost
of such repairs shall be paid by Tenant to Landlord prior to Landlord’s
commencement of repairs. Within thirty (30) days of demand, Tenant shall also
pay Landlord for any additional excess costs that are determined during the
performance of the repairs to such alterations and improvements. In no event
shall Landlord be required to spend more for the restoration of the Premises,
Building and common areas than the proceeds received by Landlord, whether
insurance proceeds or proceeds from Tenant. Except as otherwise provided herein,
any insurance which may be carried by Landlord or Tenant against loss or damage
to the Building or Premises shall be for the sole benefit of the party carrying
such insurance and under its sole control. If Landlord elects not to rebuild the
Building, Tenant shall not be required to assign its insurance proceeds to
Landlord.

 

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22.4 In the event that Landlord should fail to complete such repairs and
material restoration within sixty (60) days after the date estimated by Landlord
therefor as extended by this Section 22.4, Tenant may at its option and as its
sole remedy terminate this Lease by delivering written notice to Landlord,
within fifteen (15) days after the expiration of said period of time, whereupon
this Lease shall end on the date of such notice or such later date fixed in such
notice as if the date of such notice was the date originally fixed in this Lease
for the expiration of the Term; provided, however, that if construction is
delayed because of changes, deletions or additions in construction requested by
Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor
shortages, government regulation or control or other causes beyond the
reasonable control of Landlord, the period for restoration, repair or rebuilding
shall be extended for the amount of time Landlord is so delayed.
22.5 Notwithstanding anything to the contrary contained in this Article:
(a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or
restore the Premises when the damages resulting from any casualty covered by the
provisions of this Article 22 occur during the last twelve (12) months of the
Term or any extension thereof, but if Landlord determines not to repair such
damages Landlord shall notify Tenant and if such damages shall render any
material portion of the Premises untenantable Tenant shall have the right to
terminate this Lease by notice to Landlord within fifteen (15) days after
receipt of Landlord’s notice; and (b) in the event the holder of any
indebtedness secured by a mortgage or deed of trust covering the Premises or
Building requires that any insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made by any such holder, whereupon this Lease shall end on the date of such
damage as if the date of such damage were the date originally fixed in this
Lease for the expiration of the Term.
22.6 In the event of any damage or destruction to the Building or Premises by
any peril covered by the provisions of this Article 22, it shall be Tenant’s
responsibility to properly secure the Premises and upon notice from Landlord to
remove forthwith, at its sole cost and expense, such portion of all of the
property belonging to Tenant or its licensees from such portion or all of the
Building or Premises as Landlord shall request.
23. EMINENT DOMAIN. If all or any substantial part of the Premises shall be
taken or appropriated by any public or quasi-public authority under the power of
eminent domain, or conveyance in lieu of such appropriation, either party to
this Lease shall have the right, at its option, of giving the other, at any time
within thirty (30) days after such taking, notice terminating this Lease, except
that Tenant may only terminate this Lease by reason of taking or appropriation,
if such taking or appropriation shall be so substantial as to materially
interfere with Tenant’s use and occupancy of the Premises. If neither party to
this Lease shall so elect to terminate this Lease, the rental thereafter to be
paid shall be adjusted on a fair and equitable basis under the circumstances. In
addition to the rights of Landlord above, if any substantial part of the
Building shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain or conveyance in lieu thereof, and regardless
of whether the Premises or any part thereof are so taken or appropriated,
Landlord shall have the right, at its sole option, to terminate this Lease.
Landlord shall be entitled to any and all income, rent, award, or any interest
whatsoever in or upon any such sum, which may be paid or made in connection with
any such public or quasi-public use or purpose, and Tenant hereby assigns to
Landlord any interest it may have in or claim to all or any part of such sums,
other than any separate award which may be made with respect to Tenant’s trade
fixtures and moving expenses; Tenant shall make no claim for the value of any
unexpired Term.
24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the
Building, the same shall operate to release Landlord from any future liability
upon any of the covenants or conditions, expressed or implied, contained in this
Lease in favor of Tenant, and in such event Tenant agrees to look solely to the
responsibility of the successor in interest of Landlord in and to this Lease.
Except as set forth in this Article 24, this Lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or assignee. If any
security has been given by Tenant to secure the faithful performance of any of
the covenants of this Lease, Landlord may transfer or deliver said security, as
such, to Landlord’s successor in interest and thereupon Landlord shall be
discharged from any further liability with regard to said security.

 

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25. ESTOPPEL CERTIFICATES. Within ten (10) days following any written request
which Landlord may make from time to time, Tenant shall execute and deliver to
Landlord or mortgagee or prospective mortgagee a sworn statement certifying:
(a) the date of commencement of this Lease; (b) the fact that this Lease is
unmodified and in full force and effect (or, if there have been modifications to
this Lease, that this Lease is in full force and effect, as modified, and
stating the date and nature of such modifications); (c) the date to which the
rent and other sums payable under this Lease have been paid; (d) the fact that
there are no current defaults under this Lease by either Landlord or Tenant
except as specified in Tenant’s statement; and (e) such other matters as may be
requested by Landlord. Landlord and Tenant intend that any statement delivered
pursuant to this Article 25 may be relied upon by any mortgagee, beneficiary or
purchaser, and Tenant shall be liable for all loss, cost or expense resulting
from the failure of any sale or funding of any loan caused by any material
misstatement contained in such estoppel certificate. Tenant irrevocably agrees
that if Tenant fails to execute and deliver such certificate within such ten
(10) day period, Landlord may provide to Tenant a second written request with
respect to such estoppel certificate. If Tenant fails to execute and deliver
such certificate within a five (5) business day period following the date of
Landlord’s second written request therefor, Landlord or Landlord’s beneficiary
or agent may rely upon, for whatever purposes, such certificate as prepared on
Tenant’s behalf, and that such certificate shall be fully binding on Tenant.
Landlord shall, within ten (10) business days after receipt of a written request
from Tenant, execute and deliver a commercially reasonable estoppel certificate
to Tenant’s lender or auditors or accountants. Such estoppel certificate shall
provide a certification solely as to (i) the status of this Lease, (ii)
Landlord’s then-current actual knowledge of the existence of any defaults
hereunder, and (iii) the amount of rent that is due and payable under this
Lease.
26. SURRENDER OF PREMISES.
26.1 Tenant shall arrange to meet Landlord for two (2) joint inspections of the
Premises, the first to occur at least thirty (30) days (but no more than sixty
(60) days) before the last day of the Term, and the second to occur not later
than forty-eight (48) hours after Tenant has vacated the Premises. In the event
of Tenant’s failure to arrange such joint inspections and/or participate in
either such inspection after Landlord’s gives notice of such joint inspection,
Landlord’s commercially reasonable inspection at or after Tenant’s vacating the
Premises shall be conclusively deemed correct for purposes of determining
Tenant’s responsibility for repairs and restoration.
26.2 All alterations, additions, and improvements in, on, or to the Premises
made or installed by or for Tenant, including, without limitation, carpeting
(collectively, “Alterations”), shall be and remain the property of Tenant during
the Term. Upon the expiration or sooner termination of the Term, all Alterations
shall become a part of the realty and shall belong to Landlord without
compensation, and title shall pass to Landlord under this Lease as by a bill of
sale. At the end of the Term or any renewal of the Term or other sooner
termination of this Lease, Tenant will peaceably deliver up to Landlord
possession of the Premises, together with all Alterations by whomsoever made, in
the same conditions received or first installed, broom clean and free of all
debris, excepting only ordinary wear and tear and damage by fire or other
casualty. Notwithstanding the foregoing, subject to the terms of Section 6.4
above, if Landlord elects by notice given to Tenant at or within five
(5) business days following the first inspection of the Premises under
Section 26.1 above, Tenant shall, at Tenant’s sole cost, remove any Alterations
made after the Commencement Date of this Lease, including carpeting, so
designated by Landlord’s notice, and repair any damage caused by such removal.
Tenant must, at Tenant’s sole cost, remove upon termination of this Lease, any
and all of Tenant’s furniture, furnishings, equipment, movable partitions of
less than full height from floor to ceiling and other trade fixtures and
personal property, as well as all data/telecommunications cabling and wiring
installed by or on behalf of Tenant, whether inside walls, under any raised
floor or above any ceiling (collectively, “Personalty”). Personalty not so
removed shall be deemed abandoned by the Tenant and title to the same shall
thereupon pass to Landlord under this Lease as by a bill of sale, but Tenant
shall remain responsible for the cost of removal and disposal of such
Personalty, as well as any damage caused by such removal. In lieu of requiring
Tenant to remove Alterations and Personalty and repair the Premises as
aforesaid, Landlord may, by written notice to Tenant delivered at least thirty
(30) days before the Termination Date, require Tenant to pay to Landlord, as
additional rent hereunder, the cost of such removal and repair in an amount
reasonably estimated by Landlord.
26.3 All obligations of Tenant under this Lease not fully performed as of the
expiration or earlier termination of the Term shall survive the expiration or
earlier termination of the Term Upon the expiration or earlier termination of
the Term, Tenant shall pay to Landlord the amount, as estimated by Landlord,
necessary to repair and restore the Premises as provided in this Lease and/or to
discharge Tenant’s obligation for unpaid amounts due or to become due to
Landlord. All such amounts shall be used and held by Landlord for payment of
such obligations of Tenant, with Tenant being liable for any additional costs
upon demand by Landlord, or with any excess to be returned to Tenant after all
such obligations have been determined and satisfied. Any otherwise unused
Security Deposit shall be credited against the amount payable by Tenant under
this Lease.

 

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27. NOTICES. Any notice or document required or permitted to be delivered under
this Lease shall be addressed to the intended recipient, by fully prepaid
registered or certified United States Mail return receipt requested, or by
reputable independent contract delivery service furnishing a written record of
attempted or actual delivery, and shall be deemed to be delivered when tendered
for delivery to the addressee at its address set forth on the Reference Pages,
or at such other address as it has then last specified by written notice
delivered in accordance with this Article 27, or if to Tenant at either its
aforesaid address or its last known registered office or home of a general
partner or individual owner, whether or not actually accepted or received by the
addressee. Any such notice or document may also be personally delivered if a
receipt is signed by and received from, the individual, if any, named in
Tenant’s Notice Address.
28. TAXES PAYABLE BY TENANT. In addition to rent and other charges to be paid by
Tenant under this Lease, Tenant shall reimburse to Landlord, upon demand, any
and all taxes payable by Landlord (other than business, franchise, gross
receipts and net income taxes) whether or not now customary or within the
contemplation of the parties to this Lease: (a) upon, allocable to, or measured
by or on the gross or net rent payable under this Lease, including without
limitation any gross income tax or excise tax levied by the State, any political
subdivision thereof, or the Federal Government with respect to the receipt of
such rent; (b) upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy of the Premises or
any portion thereof, including any sales, use or service tax imposed as a result
thereof; (c) upon or measured by the Tenant’s gross receipts or payroll or the
value of Tenant’s equipment, furniture, fixtures and other personal property of
Tenant or leasehold improvements, alterations or additions located in the
Premises; or (d) upon this transaction or any document to which Tenant is a
party creating or transferring any interest of Tenant in this Lease or the
Premises. In addition to the foregoing, Tenant agrees to pay, before
delinquency, any and all taxes levied or assessed against Tenant and which
become payable during the term hereof upon Tenant’s equipment, furniture,
fixtures and other personal property of Tenant located in the Premises.
29. INTENTIONALLY OMITTED.
30. PARKING.
30.1 During the initial Term of this Lease, Tenant agrees to lease from Landlord
and Landlord agrees to lease to Tenant, the number and type of parking passes as
set forth on the Reference Page of this Lease. This right to park in the
Building’s parking facilities (the “Parking Facility”) shall be on an
unreserved, nonexclusive, first come, first served basis, for passenger-size
automobiles and is subject to the following terms and conditions:
30.1.1 Tenant shall pay to Landlord, or Landlord’s designated parking operator,
the Building’s prevailing monthly parking charges for the Parking Facility,
without deduction or offset, on the first day of each month during the Term of
this Lease, for the parking passes leased by Tenant. Notwithstanding the
foregoing, Tenant shall not be required to pay monthly parking charges for the
thirty-two (32) parking passes during the first twelve (12) calendar months of
the Term. Notwithstanding the foregoing, throughout the Term, Tenant’s visitors
shall pay for any visitor parking used by such visitors at Landlord’s standard
daily parking rates. Landlord will notify Tenant upon not less than thirty
(30) days’ notice of any increases in the monthly parking charges prior to
billing Tenant any increases. No deductions from the monthly charge shall be
made for days on which the Parking Facility is not used by Tenant.
30.1.2 Tenant shall at all times abide by and shall cause each of Tenant’s
employees, agents, customers, visitors, invitees, licensees, contractors,
assignees and subtenants (collectively, “Tenant’s Parties”) to abide by any
rules and regulations (“Rules”) for use of the Parking Facility that Landlord or
Landlord’s garage operator reasonably establishes from time to time, and
otherwise agrees to use the Parking Facility in a safe and lawful manner.
Landlord reserves the right to adopt, modify and enforce the Rules governing the
use of the Parking Facility from time to time including any key-card, sticker or
other identification or entrance system and hours of operation. Landlord may
refuse to permit any person who violates such Rules to park in the Parking
Facility, and any violation of the Rules shall subject the car to removal from
the Parking Facility.
30.1.3 Unless specified to the contrary above, the parking spaces hereunder
shall be provided on a non-designated “first-come, first-served” basis. Landlord
reserves the right to assign specific spaces, and to reserve spaces for
visitors, small cars, disabled persons or for other tenants or guests, and
Tenant shall not park and shall not allow Tenant’s Parties to park in any such
assigned or reserved spaces. Tenant may validate visitor parking by such method
as Landlord may approve, at the validation rate from time to time generally
applicable to visitor parking. Tenant acknowledges that the Parking Facility may
be closed entirely or in part in order to make repairs or perform maintenance
services, or to alter, modify, re-stripe or renovate the Parking Facility, or if
required by casualty, strike, condemnation, act of God, governmental law or
requirement or other reason beyond the operator’s reasonable control. Landlord
agrees that Landlord shall not materially reduce the size of any full-sized (as
opposed to compact) parking stalls that exist in the Parking Facility as of the
date of this Lease; provided, however, that Landlord may implement valet parking
or any other parking practices at the Parking Facility so long as the Parking
Facility accommodates the same number (i.e., twenty-eight) of Tenant’s vehicles.

 

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30.1.4 Tenant acknowledges that to the fullest extent permitted by law, Landlord
shall have no liability for any damage to property or other items located in the
parking areas of the Building (including without limitation, any loss or damage
to tenant’s automobile or the contents thereof due to theft, vandalism or
accident), nor for any personal injuries or death arising out of the use of the
Parking Facility by Tenant or any Tenant’s Parties, whether or not such loss or
damage results from Landlord’s active negligence or negligent omission. The
limitation on Landlord’s liability under the preceding sentence shall not apply
however to loss or damage arising directly from Landlord’s willful misconduct.
Without limiting the foregoing, if Landlord arranges for the parking areas to be
operated by an independent contractor not affiliated with Landlord, Tenant
acknowledges that Landlord shall have no liability for claims arising through
acts or omissions of such independent contractor. Tenant and Tenant’s Parties
each hereby voluntarily releases, discharges, waives and relinquishes any and
all actions or causes of action for personal injury or property damage occurring
to Tenant or any of Tenant’s Parties arising as a result of parking in the
Parking Facility, or any activities incidental thereto, wherever or however the
same may occur, and further agrees that Tenant will not prosecute any claim for
personal injury or property damage against Landlord or any of its officers,
agents, servants or employees for any said causes of action and in all events,
Tenant agrees to look first to its insurance carrier and to require that
Tenant’s Parties look first to their respective insurance carriers for payment
of any losses sustained in connection with any use of the Parking Facility.
Tenant hereby waives on behalf of its insurance carriers all rights of
subrogation against Landlord or any Landlord Entities.
30.1.5 Tenant’s right to park as described in this Article and this Lease is
exclusive to Tenant and shall not pass to any assignee or sublessee except in
connection with an assignment or sublease approved by Landlord in accordance
with the terms of Article 9 above.
30.1.6 In the event any surcharge or regulatory fee is at any time imposed by
any governmental authority with reference to parking, Tenant shall (commencing
after two (2) weeks’ notice to Tenant) pay, per parking pass, such surcharge or
regulatory fee to Landlord in advance on the first day of each calendar month
concurrently with the month installment of rent due under this Lease. Landlord
will enforce any surcharge or fee in an equitable manner amongst the Building
tenants.
30.1.7 If, at any time during the Term, Tenant determines that Landlord’s then
standard charge for parking is more than ten percent (10%) higher than parking
rates charged by comparable landlords of comparable buildings located in the
same geographic area as the Building, then Tenant may reduce the number of
parking spaces leased by Tenant hereunder by providing no less than thirty
(30) days’ written notice thereof to Landlord. In such event, Tenant shall be
deemed to have permanently waived Tenant’s right to lease such parking space(s).
30.2 If Tenant violates any of the terms and conditions of this Article, the
operator of the Parking Facility shall have the right to remove from the Parking
Facility any vehicles hereunder which shall have been involved or shall have
been owned or driven by parties involved in causing such violation, without
liability therefor whatsoever. In addition, Landlord shall have the right to
cancel Tenant’s right to use the Parking Facility pursuant to this Article upon
ten (10) days’ written notice, unless within such ten (10) day period, Tenant
cures such default. Such cancellation right shall be cumulative and in addition
to any other rights or remedies available to Landlord at law or equity, or
provided under this Lease.
31. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease are for
convenience of reference and shall in no way define, increase, limit or describe
the scope or intent of any provision of this Lease. Any indemnification or
insurance of Landlord shall apply to and inure to the benefit of all the
following “Landlord Entities”, being Landlord, Landlord’s investment manager,
and the trustees, boards of directors, officers, general partners,
beneficiaries, stockholders, employees and agents of each of them. Any option
granted to Landlord shall also include or be exercisable by Landlord’s trustee,
beneficiary, agents and employees, as the case may be. In any case where this
Lease is signed by more than one person, the obligations under this Lease shall
be joint and several. The terms “Tenant” and “Landlord” or any pronoun used in
place thereof shall indicate and include the masculine or feminine, the singular
or plural number, individuals, firms or corporations, and their and each of
their respective successors, executors, administrators and permitted assigns,
according to the context hereof. The term “rentable area” shall mean the
rentable area of the Premises or the Building as calculated by the Landlord on
the basis of the plans and specifications of the Building including a
proportionate share of any common areas. Tenant hereby accepts and agrees to be
bound by the figures for the rentable square footage of the Premises and
Tenant’s Proportionate Share shown on the Reference Pages; however, Landlord
shall adjust either or both figures if there is manifest error, addition or
subtraction to the Building. Notwithstanding the foregoing, Landlord agrees that
the rentable square footage of the Premises and Tenant’s Proportionate Share
shall not be adjusted pursuant to the foregoing sentence during the initial Term
of this Lease. The term “Building” refers to the structure in which the Premises
are located and the common areas (parking lots, sidewalks, landscaping, etc.)
appurtenant thereto.

 

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32. TENANT’S AUTHORITY.
32.1 If Tenant signs as a corporation, partnership, trust or other legal entity
each of the persons executing this Lease on behalf of Tenant represents and
warrants that Tenant has been and is qualified to do business in the state in
which the Building is located, that the entity has full right and authority to
enter into this Lease, and that all persons signing on behalf of the entity were
authorized to do so by appropriate actions. Tenant agrees to deliver to
Landlord, simultaneously with the delivery of this Lease, a corporate
resolution, proof of due authorization by partners, opinion of counsel or other
appropriate documentation reasonably acceptable to Landlord evidencing the due
authorization of Tenant to enter into this Lease.
32.2 Tenant hereby represents and warrants that neither Tenant, nor any persons
or entities holding any legal or beneficial interest whatsoever in Tenant, are
(a) the target of any sanctions program that is established by Executive Order
of the President or published by the Office of Foreign Assets Control, U.S.
Department of the Treasury (“OFAC”); (b) designated by the President or OFAC
pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot
Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any
Executive Order of the President issued pursuant to such statutes; or (c) named
on the following list that is published by OFAC: “List of Specially Designated
Nationals and Blocked Persons.” If the foregoing representation is untrue at any
time during the Term, an Event of Default will be deemed to have occurred,
without the necessity of notice to Tenant.”
33. FINANCIAL STATEMENTS AND CREDIT REPORTS. At Landlord’s request, Tenant shall
deliver to Landlord a copy, certified by an officer of Tenant as being a true
and correct copy, of Tenant’s most recent audited financial statement, or, if
unaudited, certified by Tenant’s chief financial officer as being true, complete
and correct in all material respects. Tenant hereby authorizes Landlord to
obtain one or more credit reports on Tenant at any time, and shall execute such
further authorizations as Landlord may reasonably require in order to obtain a
credit report. Notwithstanding the foregoing, Landlord shall not request
financial statements more than once in each consecutive one (1) year period
during the Term unless (i) Tenant is in default, (ii) Landlord reasonably
believes that there has been an adverse change in Tenant’s financial position
since the last financial statement provided to Landlord, or (iii) requested
(a) in connection with a proposed sale or transfer of the Building by Landlord,
or (b) by an investor of Landlord, any Landlord Entity or any lender or proposed
lender of Landlord or any Landlord Entity. In addition, notwithstanding the
terms of this Article 33, so long as Tenant is a publicly traded company on an
“over-the-counter” market or any recognized national or international securities
exchange, the foregoing shall not apply so long as Tenant’s current public
annual report (in compliance with applicable securities laws) for such
applicable year is available to Landlord in the public domain. At Tenant’s
request, Landlord shall enter into a confidentiality agreement with Tenant,
which agreement is reasonably acceptable to Landlord and covers confidential
financial information provided by Tenant to Landlord.
34. COMMISSIONS. Each of the parties represents and warrants to the other that
it has not dealt with any broker or finder in connection with this Lease, except
as described on the Reference Pages.
35. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of its
provisions. This Lease shall in all respects be governed by the laws of the
state in which the Building is located.
36. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the terms,
covenants and conditions contained in this Lease shall be binding upon and inure
to the benefit of the heirs, successors, executors, administrators and assigns
of the parties to this Lease.
37. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
agreements of the parties to this Lease and supersedes any previous
negotiations. There have been no representations made by the Landlord or any of
its representatives or understandings made between the parties other than those
set forth in this Lease and its exhibits. This Lease may not be modified except
by a written instrument duly executed by the parties to this Lease.

 

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38. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be a
reservation of the Premises. Landlord shall not be bound by this Lease until it
has received a copy of this Lease duly executed by Tenant and has delivered to
Tenant a copy of this Lease duly executed by Landlord, and until such delivery
Landlord reserves the right to exhibit and lease the Premises to other
prospective tenants. Notwithstanding anything contained in this Lease to the
contrary, Landlord may withhold delivery of possession of the Premises from
Tenant until such time as Tenant has paid to Landlord any security deposit
required by Article 5, the first month’s rent as set forth in Article 3 and any
sum owed pursuant to this Lease.
39. RECORDATION. Tenant shall not record or register this Lease or a short form
memorandum hereof without the prior written consent of Landlord, and then shall
pay all charges and taxes incident such recording or registration.
40. OPTION TO RENEW. Provided this Lease is in full force and effect and Tenant
is not in default under any of the other terms and conditions of this Lease at
the time of notification or commencement, Tenant shall have one (1) option to
renew (the “Renewal Option”) this Lease for a term of five (5) years (the
“Renewal Term”), for the portion of the Premises being leased by Tenant as of
the date the Renewal Term is to commence, on the same terms and conditions set
forth in this Lease, except as modified by the terms, covenants and conditions
as set forth below:
40.1 If Tenant elects to exercise the Renewal Option, then Tenant shall provide
Landlord with written notice no earlier than the date which is fifteen
(15) months prior to the expiration of the Term of this Lease but no later than
the date which is twelve (12) months prior to the expiration of the Term of this
Lease. If Tenant fails to provide such notice, Tenant shall have no further or
additional right to extend or renew the Term of this Lease.
40.2 The Annual Rent and Monthly Installment of Rent in effect at the expiration
of the Term of this Lease shall be the Prevailing Market (defined below) rate.
Landlord shall advise Tenant of the new Annual Rent and Monthly Installment of
Rent for the Premises no later than thirty (30) days after receipt of Tenant’s
written request therefor. Said request shall be made no earlier than thirty
(30) days prior to the first date on which Tenant may exercise its Renewal
Option under this Article 40. Said notification of the new Annual Rent and
Monthly Installment of Rent may include a provision for its escalation to
provide for a change in fair market rental between the time of notification and
the commencement of the Renewal Term.
40.3 This Renewal Option is not transferable; the parties hereto acknowledge and
agree that they intend that the aforesaid option to renew this Lease shall be
“personal” to Tenant and any Permitted Transferee as set forth above and that in
no event will any assignee or sublessee (other than a Permitted Transferee) have
any rights to exercise the aforesaid option to renew.
40.4 If the Renewal Option is validly exercised or if Tenant fails to validly
exercise the Renewal Option, Tenant shall have no further right to extend the
term of this Lease.
40.5 For purposes of this Renewal Option, “Prevailing Market” shall mean the
arms length fair market annual rental rate per rentable square foot under
renewal leases and amendments entered into on or about the date on which the
Prevailing Market is being determined hereunder for space comparable to the
Premises in the Building and buildings comparable to the Building in the same
rental market in the Seattle, Washington area as of the date the Renewal Term is
to commence, taking into account the specific provisions of this Lease which
will remain constant. The determination of Prevailing Market shall take into
account any material economic differences between the terms of this Lease and
any comparison lease or amendment, such as rent abatements, construction costs
and other concessions and the manner, if any, in which the landlord under any
such comparison lease is reimbursed for operating expenses and taxes. The
determination of Prevailing Market shall also take into consideration any
reasonably anticipated changes in the Prevailing Market rate from the time such
Prevailing Market rate is being determined and the time such Prevailing Market
rate will become effective under this Lease.
40.6 Notwithstanding anything herein to the contrary, the Renewal Option is
subject and subordinate to the expansion rights (whether such rights are
designated as a right of first offer, right of first refusal, expansion option
or otherwise) of any tenant of the Building existing on the date hereof.

 

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41. SIGNAGE.
41.1 Landlord shall provide and install, at Landlord’s sole cost and expense,
the initial signage for Tenant in the Building directory and at the entry to the
Premises. Such signage shall consist of Building standard materials and shall
comply with current Building specifications and Tenant shall be required to make
payment of any fee charged by Landlord for maintaining such signage (which fee
is solely for maintaining such signage and not for the privilege of displaying
such signage in the Premises or Building), which fee shall constitute additional
rent under this Lease. At Landlord’s option, upon the expiration or earlier
termination of this Lease, Tenant shall, at Tenant’s sole cost and expense,
remove any such signage and repair any damage to the Building caused by such
signage.
41.2 So long as (a) Tenant is not in default under the terms of this Lease;
(b) Tenant is in occupancy of at least approximately 25,000 rentable square feet
of the Premises; and (c) Tenant has not assigned this Lease or sublet greater
than fifty percent (50%) of the Premises, in the event Landlord constructs a
shared monument sign for the Building (the “Monument Sign”) during the Term of
this Lease, Tenant shall have the right to have its name listed on the Monument
Sign, subject to the terms of this Article 41. The design, size and color of
Tenant’s signage with Tenant’s name to be included on the Monument Sign, and the
manner in which it is attached to the Monument Sign, shall comply with all
applicable Regulations and shall be subject to the approval of Landlord and any
applicable governmental authorities. Landlord reserves the right to withhold
consent to any sign that, in the sole judgment of Landlord, is not harmonious
with the design standards of the Building and Monument Sign. Landlord shall have
the right to require that all names on the Monument Sign be of the same size and
style. Tenant must obtain Landlord’s written consent to any proposed signage and
lettering prior to its fabrication and installation. Tenant’s right to place its
name on the Monument Sign, and the location of Tenant’s name on the Monument
Sign, shall be subject to the existing rights of existing tenants in the
Building, and the location of Tenant’s name on the Monument Sign shall be
further subject to Landlord’s reasonable approval. To obtain Landlord’s consent,
Tenant shall submit design drawings to Landlord showing the type and sizes of
all lettering; the colors, finishes and types of materials used; and (if
applicable and Landlord consents in its sole discretion) any provisions for
illumination. Although the Monument Sign will be maintained by Landlord, Tenant
shall pay its proportionate share of the cost of any maintenance and repair
associated with the Monument Sign. In the event that additional names are listed
on the Monument Sign, all future costs of maintenance and repair shall be
prorated between Tenant and the other parties that are listed on such Monument
Sign.
41.2.1 Tenant’s name on the Monument Sign shall be designed, constructed,
installed, insured, maintained, repaired and removed from the Monument Sign all
at Tenant’s sole risk, cost and expense. Tenant, at its cost, shall be
responsible for the maintenance, repair or replacement of Tenant’s signage on
the Monument Sign, which shall be maintained in a manner reasonably satisfactory
to Landlord.
41.2.2 If during the Term (and any extensions thereof) (a) Tenant is in default
under the terms of this Lease after the expiration of applicable cure periods;
(b) Tenant leases and occupies less than approximately 25,000 rentable square
feet of the Premises; or (c) Tenant assigns this Lease, then Tenant’s rights
granted herein will terminate and Landlord may remove Tenant’s name from the
Monument Sign at Tenant’s sole cost and expense and restore the Monument Sign to
the condition it was in prior to installation of Tenant’s signage thereon,
ordinary wear and tear excepted. The cost of such removal and restoration shall
be payable as additional rent within fifteen (15) days of Landlord’s demand.
Landlord may, at anytime during the Term (or any extension thereof), upon five
(5) business days prior written notice to Tenant, relocate the position of
Tenant’s name on the Monument Sign. The cost of such relocation of Tenant’s name
shall be at the cost and expense of Landlord.
41.2.3 The rights provided in this Article 41 shall be non-transferable unless
otherwise agreed by Landlord in writing in its sole discretion.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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42. LIMITATION OF LANDLORD’S LIABILITY. Redress for any claim against Landlord
under this Lease shall be limited to and enforceable only against and to the
extent of Landlord’s interest in the Building in which the Premises is located.
The obligations of Landlord under this Lease are not intended to be and shall
not be personally binding on, nor shall any resort be had to the private
properties of, any of its or its investment manager’s trustees, directors,
officers, partners, beneficiaries, members, stockholders, employees, or agents,
and in no case shall Landlord be liable to Tenant hereunder for any lost
profits, damage to business, or any form of special, indirect or consequential
damages. As used herein, “Landlord’s interest in the Building” shall include
insurance proceeds, rents due from tenants of the Building and proceeds from the
sale of the Building (prior to the distribution of same to any partner or
shareholder of Landlord or any other third party); provided, however, that with
respect to proceeds from the sale of the Building, Landlord’s liability shall
extend only to adjudicated claims which arise during Landlord’s period of
ownership and during the Term of the Lease but only after Landlord first applies
any such sale proceeds to any outstanding mortgages and/or any other
encumbrances existing upon or otherwise affecting the Building (including any
ground lease payments) and any tax liability respecting the Building.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the Lease
Reference Date set forth in the Reference Pages of this Lease.

     
LANDLORD:
  TENANT:
 
   
900 FOURTH AVENUE PROPERTY LLC,
  CRAY INC.,
a Delaware limited liability company
  a Washington corporation

         
By: RREEF Management Company,
   
       a Delaware corporation, its Authorized Agent
     

                     
By:
  /s/ Michael Benoit
 
      By:   /s/ Brian C. Henry
 
   
Name:
  Michael Benoit       Name:   Brian C. Henry    
Title:
  VP District Mgr.       Title:   EVP & CFO    
Dated:
  8/21/08       Dated:   8/11/08    

 

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LANDLORD CORPORATE ACKNOWLEDGMENT

         
STATE OF WASHINGTON
  )    
 
  )   SS
COUNTY OF KING
  )    

On this 21st day of August, 2008 before me, the undersigned, a Notary Public in
and for the State of Washington personally appeared Michael G. Benoit, to be
known or shown through satisfactory evidence to be the Vice President, District
Manager of RREEF Management Company, a Delaware corporation, and acknowledged to
me that he executed the same on behalf of said corporation freely and
voluntarily for the uses and purposes therein mentioned.
Witness my hand and official seal the day and year in this certificate first
above written.

         
 
  /s/ Rachel Lynn Kegley
 
Notary Public in and for the
State of Washington
residing in King County
My commission expires: 10-19-09    

           
 
  /s/ BH
 
  /s/ MB
 
    Initials  

Acknowledgement 1

--------------------------------------------------------------------------------

 

TENANT CORPORATE ACKNOWLEDGMENT

             
STATE OF WASHINGTON
    )      
 
    )     SS
COUNTY OF KING
    )      

On this 11th day of August, 2008 before me, the undersigned, a Notary Public in
and for the State of Washington personally appeared Brian C. Henry, to be known
or shown through satisfactory evidence to be the EVP & CFO of Cray Inc., a
Washington corporation, and acknowledged to me that he executed the same on
behalf of said corporation freely and voluntarily for the uses and purposes
therein mentioned.
Witness my hand and official seal the day and year in this certificate first
above written.

         
 
  /s/ Carol Lynn Cole
 
Notary Public in and for the    
 
  State of Washington    
 
  residing in Seattle    
 
  My commission expires: 11/20/2011    

           
 
  /s/ BH
 
  /s/ MB
 
    Initials
 

Acknowledgement 2

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EXHIBIT A — FLOOR PLAN DEPICTING THE PREMISES
attached to and made a part of the Lease bearing the
Lease Reference Date of August 11, 2008 between
900 FOURTH AVENUE PROPERTY LLC, a Delaware limited liability company, as
Landlord and
CRAY INC., a Washington corporation, as Tenant
Exhibit A is intended only to show the general layout of the Premises as of the
beginning of the Term of the Lease. It does not in any way supersede any of
Landlord’s rights set forth in Article 17 of the Lease with respect to
arrangements and/or locations of public parts of the Building and changes in
such arrangements and/or locations. It is not to be scaled; any measurements or
distances shown should be taken as approximate.
(FLOOR PLAN) [c74999c7499901.gif]

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

A-1-1

--------------------------------------------------------------------------------

 

(FLOOR PLAN) [c74999c7499902.gif]

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

A-1-2

--------------------------------------------------------------------------------

 

(FLOOR PLAN) [c74999c7499903.gif]

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

A-1-3

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EXHIBIT A-1 — SITE PLAN
attached to and made a part of the Lease bearing the
Lease Reference Date of August 11, 2008 between
900 FOURTH AVENUE PROPERTY LLC, a Delaware limited liability company, as
Landlord and
CRAY INC., a Washington corporation, as Tenant
Exhibit A-1 is intended only to show the general location of the Building and/or
the project of which the Building is a part as of the beginning of the Term of
the Lease. It does not in any way supersede any of Landlord’s rights set forth
in Article 17 of the Lease with respect to arrangements and/or locations of
public parts of the Building and changes in such arrangements and/or locations.
It is not to be scaled; any measurements or distances shown should be taken as
approximate.
(SITE PLAN) [c74999c7499904.gif]

           
 
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EXHIBIT A-2 — LEGAL DESCRIPTION
attached to and made a part of the Lease bearing the
Lease Reference Date of August 11, 2008 between
900 FOURTH AVENUE PROPERTY LLC, a Delaware limited liability company, as
Landlord and
CRAY INC., a Washington corporation, as Tenant
That certain building located at 900 Fourth Avenue, Seattle, King County,
Washington and situated on a portion of Block 22, C.D. Boren’s Addition to the
City of Seattle, in King County, Washington, including the vacated alley
therein.
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EXHIBIT B — WORKLETTER
attached to and made a part of the Lease bearing the
Lease Reference Date of August 11, 2008 between
900 FOURTH AVENUE PROPERTY LLC, a Delaware limited liability company, as
Landlord and
CRAY INC., a Washington corporation, as Tenant
The purpose of this Exhibit B to the Lease (“Workletter”) is to set forth how
the Tenant Improvements to the Premises are to be constructed and designed, the
distinction between the Tenant Improvements and the base building condition and
the allocation of responsibility for constructing and designing the Tenant
Improvements and the cost of the tenant improvements. Subject to all of the
terms and conditions of the Lease and based on the meanings given defined terms
in the Lease, where not otherwise defined in this Workletter, the parties agree
as follows:
1. Defined Terms. Unless the context otherwise requires, terms used in this
Workletter shall have the same meaning as such terms in the Lease. The following
capitalized terms shall have the meanings set forth below.
“Tenant Architect” means an architect selected by Tenant and acceptable to
Landlord that is licensed to practice architecture in Washington State.
“Business Day” means any day other than a Saturday, Sunday or other day on which
United States national banks in Seattle, Washington are authorized or required
by law to be closed for business.
“Premises Contract” means the contract between Landlord and Premises Contractor
for the construction and installation of the Tenant Improvements to be written
on Landlord’s customary contract form and conditions which are based on AIA
Document A101-1997 (Stipulated Sum) and AIA Document A201-1997 (General
Conditions), with Supplemental Conditions, as mutually approved by Landlord and
Tenant as evidenced in those certain emails, to which copies of such forms were
attached, dated August 8, 2008, between Alex Bennett on behalf of Landlord and
Bill Howard on behalf of Tenant.
“Premises Contractor” means a licensed general contractor selected by Landlord
in consultation with Tenant for purposes of completing the Tenant Improvements,
which Premises Contractor shall be Gateway Construction Services, Inc. or
Pacific Construction Services or another general contractor reasonably selected
by Landlord in consultation with Tenant and which shall be selected based upon
competitive bids provided by such general contractors.
“Costs of the TI Work” means all costs incurred by Landlord to complete the TI
Work, including amounts paid to the Premises Contractor, sales taxes, premiums
for insurance and bonds obtained specifically for the TI work, permit fees, and
temporary utilities. The Costs of the TI Work shall also include all costs
associated with the design of the Tenant Improvements, all obligations owed to
the Tenant Architect and Consultant, third-party inspection fees, reimbursement
to Landlord for reasonable actual out-of-pocket fees and disbursements Landlord
may incur that are fairly attributable to the design or construction of the
Tenant Improvements and the cost of installing any of Tenant’s Special Tenant
Improvements described on Schedule B-4.
“Design Allowance” means an amount equal to $0.15 per rentable square foot of
the Premises.
“Substantial Completion” means the date that (i) Landlord has completed the Base
Building Improvements (as defined in Section 2 below) and the Tenant
Improvements to the extent required to conform with the standards of
“substantial completion” promulgated by the American Institute of Architects
(General Conditions of the Contract for Construction, AIA Document A201), to the
extent such improvements can be used by Tenant, subject to minor details and
installations of construction, decoration and mechanical adjustments
(“punch-list items”) as reasonably determined by Landlord that remain to be
completed but which do not materially interfere with Tenant’s use of such
portion of the Premises; (ii) Tenant has direct access to the elevator lobby on
the floors where the Premises are located; (iii) the services to be provided
under Section 13 of the Lease and as described in Schedule B-4 of this Exhibit B
are available to the Premises; (iv) the date Landlord receives from the
appropriate governmental authorities confirmation that Tenant is legally
permitted to occupy the Premises following completion of the Base Building
Improvements and Tenant Improvements performed by Landlord or its contractors in
the Premises and confirmation that all final inspections have occurred with
respect to such improvements (as evidenced by a customary communication from
such authorities); and (v) Tenant’s Architect shall have confirmed substantial
completion in accordance with the Working Drawings by delivering to Landlord a
certificate in a form reasonably acceptable to Landlord which reflects
satisfaction of the four conditions described in items (i) through (iv) of this
paragraph.

           
 
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“Tenant Improvement Allowance” means (i) $64.36 per rentable square foot of the
Premises (other than the Fourth Floor Pocket Space), plus (ii) $60.57 per
rentable square foot of the Fourth Floor Pocket Space (calculated based upon the
assumption that the Initial Abatement Period (as defined in the Reference Pages)
consists of a six (6) month period); provided, however that the foregoing Tenant
Improvement Allowance with respect to the Fourth Floor Pocket Space shall be
proportionately adjusted if the actual Initial Abatement Period is less than six
(6) months). The Tenant Improvement Allowance shall be used only to pay for
actual Costs of the TI Work, except as otherwise provided for in this
Workletter.
“Tenant Improvements” means those certain improvements to the Premises described
in the Working Drawings as the same may be modified pursuant to Paragraph 5
below, including all items of Work, including labor and materials, that are
utilized directly or indirectly in altering, repairing, improving, adding to,
modifying or otherwise changing the Premises.
“Tenant Improvements Floor Plan and Scope of Work Outline” means the preliminary
floor plans for the three floors comprising the Premises, together with the
scope of work outline of the Tenant Improvements that have been prepared by the
Tenant Architect, dated August 4, 2008, all as approved by Landlord and as
described in Schedule B-2 attached.
“Tenant’s Representative” means the individual designated by Tenant as its
tenant improvement representative pursuant to Paragraph 13 of this Workletter.
“TI Work” means the design, permitting and construction of the Tenant
Improvements in accordance with the Working Drawings.
“Working Drawings” means all plans, specifications and drawings necessary to
construct the Tenant Improvements, which shall include all construction
documents, final plans and specifications ready for construction, and
mechanical, electrical and plumbing drawings necessary to construct the Tenant
Improvements, as more fully described in Schedule B-6 attached hereto, which
Working Drawings shall be prepared, subject to Landlord’s approval, in
accordance with Paragraph 5 of this Workletter.
2. Base Building Improvements. Landlord is responsible for providing certain
base Building improvements identified on Schedule B-1 attached hereto
(collectively, the “Base Building Improvements”) without cost or expense to
Tenant. Landlord shall be responsible for maintaining the Building and
improvements in accordance with Sections 7 and 13 of the Lease. Landlord shall
correct any violations of applicable laws and building codes in effect and as
enforced at the time of permitting for the portion of the Base Building
Improvements described in Section 3 of Schedule B-1 following completion
thereof, and thereafter shall correct any such violations as to such portion of
the Base Building Improvements as and when required by Regulations and/or
applicable government authorities, including all Regulations relating to the
Americans with Disabilities Act (as in effect at the time) (“ADA”) and all other
applicable federal, state and municipal laws and regulations. Notwithstanding
the foregoing, Landlord shall have the right to contest any alleged violation in
good faith, including, without limitation, the right to apply for and obtain a
waiver or deferment of compliance, the right to assert any and all defenses
allowed by Regulations and the right to appeal any decisions, judgments or
rulings to the fullest extent permitted by Regulations. Landlord, after the
exhaustion of any and all rights to appeal or contest, will make all repairs,
additions, alterations or improvements necessary to comply with the terms of any
final order or judgment. To the extent there are material changes in the Base
Building Improvements made by Landlord following the date of the Lease that
increase the Costs of the TI Work or delay construction of the Tenant
Improvements (as generally described in Schedule B-2 and as estimated by
Landlord at the time such impact is discovered), then Landlord shall exercise
good faith efforts to eliminate or reduce such cost or delay and shall be
responsible for any such increased construction costs (unless such changes are
made in order to comply with Regulations or requested by Tenant). If any changes
to the Base Building Improvements materially impact or are likely to materially
impact the Costs of the TI Work, then Landlord agrees to notify Tenant of such
changes.
Landlord also shall perform any remediation or abatement work with respect to
any asbestos containing material (“ACM”) arising out of Landlord’s performance
of the Base Building Improvements and Tenant Improvements to the extent
necessary to comply with Regulations in effect and as applied as of the date of
this Lease and to the extent such upgrades or modifications are required by
Regulations in order for Tenant (i) to obtain a building permit for the Tenant
Improvements and/or (ii) to occupy the Premises for the Permitted Use
(collectively, “Required ACM Remediation”). Landlord shall have the right to
contest any alleged Required ACM Remediation in good faith, including, without
limitation, the right to apply for and obtain a waiver or deferment of
compliance, the right to assert any and all defenses allowed by Regulations and
the right to appeal any decisions, judgments or rulings to the fullest extent
permitted by Regulations. Landlord, after the exhaustion of any and all rights
to appeal or contest, will perform all Required ACM Remediation required for
purposes of clauses (i) and (ii) of above.

           
 
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3. Tenant Improvements. The Tenant Improvements shall be furnished and installed
within the Premises substantially in accordance with the Working Drawings to be
prepared by the Tenant Architect and approved by Landlord in writing in
accordance with this Workletter. All Tenant Improvements will be managed by
Landlord and shall be furnished and installed by the selected Premises
Contractor at the expense of Tenant, subject to application of the Tenant
Improvement Allowance. Tenant hereby acknowledges that the Special Tenant
Improvements described on Schedule B-4 are subject to the approval of applicable
governmental authorities and applicable Regulations. Landlord and Tenant agree
that to the extent it will save time and money for all involved, Landlord may
choose to combine a portion of the TI Work (for example improvements to the
Building electrical and HVAC systems) necessary to accommodate Tenant’s Special
Tenant Improvements with the now ongoing Base Building Improvements described in
Section 3 of Schedule B-1. If such election is made, then to be included in the
Costs of TI Work, the portion of the scope and cost of such work to be included
in the Costs of the TI Work shall be described in a change order to such
existing construction contract that is signed by both Landlord and Tenant. The
Tenant Improvement Allowance may be applied to the cost of any Special Tenant
Improvements. Landlord shall enter the Premises Contract with the Premises
Contractor. The Tenant Improvements shall be constructed in accordance with the
Premises Contract and the Working Drawings prepared by the Tenant Architect and
approved by Tenant and Landlord in accordance with Section 5 below, and
permitted by the City of Seattle. If the Premises Contractor delivers any
proposed change to the Premises Contract, Tenant shall promptly be provided an
“open book” explanation and documentation to support such change or any
alteration in the proposed stipulated sum for the Costs of the TI Work, and be
afforded an opportunity to review and approve any alteration in the approved
stipulated sum for the Costs of the TI Work before the affected work is
performed.
4. The Tenant Architect. The Tenant Architect shall design the Tenant
Improvements for the Premises and shall obtain all required building or other
permits relating to the performance and construction of the Tenant Improvements
in the Premises. The consultants selected by Landlord for designing the
Building’s structural, mechanical, electrical, plumbing and telecommunication
systems (the “Consultants”) shall review the plans and specifications for these
components of the Tenant Improvements. As of the date of this Lease, Flack &
Kurtz is the consultant for the electrical system for the Building, and no
mechanical system engineer is currently anticipated to be needed since the
mechanical subcontractor, Holaday-Parks, Inc. will perform design-build services
for the portion of the TI Work involving the mechanical systems. The cost of
preparing and reviewing all plans and specifications for the Tenant Improvements
(including, without limitation, the Working Drawings), and the cost of preparing
any changes thereto and the cost of obtaining all required permits shall be paid
by Tenant, although Tenant may apply the Design Allowance toward the payment of
such costs.
5. Working Drawings.
5.1 Tenant Improvements Floor Plan and Scope of Work Outline. The Tenant
Improvements Floor Plan and Scope of Work Outline have been approved by the
parties and form the basis for the Working Drawings to be prepared by the Tenant
Architect. Landlord shall not unreasonably withhold its consent to any part of
the Working Drawings that are generally consistent with the description in
Schedule B-2. Landlord and Tenant shall cooperate and work in good faith in the
development of conceptual plans and other customary aspects of design for the
Tenant Improvements to give Tenant necessary feedback for its development of
Working Drawings that will be acceptable to Landlord.
5.2 Preparation, Submission and Approval of Working Drawings. Tenant has
retained the Tenant Architect to prepare the Working Drawings. Tenant shall
cause the Working Drawings to be prepared by the Tenant Architect and submitted
to Landlord within thirty (30) days following the date that the Lease is
mutually executed and delivered by Landlord and Tenant. Tenant shall provide (or
cause the Tenant Architect to provide) Landlord with at least two (2) complete
sets of the Working Drawings for Landlord’s review and approval. Landlord shall
have ten (10) Business Days after receiving the Working Drawings to approve the
Working Drawings, or disapprove them and provide Tenant with its comments. If
Landlord disapproves the Working Drawings, Tenant shall have five (5) Business
Days after receiving Landlord’s comments to cause Tenant Architect to revise and
resubmit the Working Drawings to Landlord. Landlord shall have five (5) Business
Days after receiving the revised Working Drawings to either approve the revised
Working Drawings, or disapprove the revised Working Drawings and provide Tenant
with its comments. The process outlined in the preceding two sentences shall be
repeated until Landlord and Tenant have mutually agreed on the Working Drawings.
Landlord’s decision regarding the Working Drawings shall be evidenced by
returning to Tenant one (1) set of the Working Drawings marked “Approved,”
“Approved as Noted” or “Disapproved as Noted, Revise and Resubmit”; provided,
however, that Landlord’s failure to timely respond to the Working Drawings shall
not constitute approval by Landlord of the design or specifications shown
thereon.
5.2.1 If the Working Drawings are returned to Tenant marked “Approved,” the
Working Drawings, as so submitted, shall be deemed approved by Landlord, and the
Tenant Architect shall immediately provide four (4) full sets of paper drawings
as wells as a copy of such drawings in both CAD and pdf format.

           
 
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5.2.2 If the Working Drawings are returned to Tenant marked “Approved as Noted,”
the draft of the Working Drawings shall be deemed approved by Landlord;
provided, however, in preparing the final approved Working Drawings, Tenant
shall cause the Tenant Architect to incorporate Landlord’s noted items into the
Working Drawings and shall deliver the revised Working Drawings to Landlord
within five (5) Business Days.
5.2.3 If the Working Drawings are returned to Tenant marked “Disapproved as
Noted, Revise and Resubmit,” Tenant shall cause such Working Drawings to be
revised within five (5) Business Days as provided above, taking into account the
reasons for Landlord’s disapproval and shall resubmit revised plans to Landlord
for review. The same procedure shall be repeated until Landlord fully approves
the Working Drawings.
5.2.4 Tenant and the Tenant Architect shall be solely responsible for: (i) the
completeness of the Working Drawings; (ii) subject to Paragraph 6 below, the
conformity of the Working Drawings with the existing conditions in the Building
as set forth in the “CAD backgrounds” for the Building that have been delivered
to Tenant (the “Building Plans”) (to the extent reflected in the Building Plans
provided to Tenant); (iii) the compatibility of the Working Drawings with the
Base Building Improvements including the mechanical, plumbing, life safety or
electrical systems of the Building (to the extent reflected in the Building
Plans provided to Tenant); and (iv) the compliance of the Working Drawings with
all applicable Regulations, including, without limitation, the ADA. The Tenant
Architect shall coordinate the preparation of all engineering drawings included
as part of the Working Drawings. Regardless of who prepares the engineering
drawings, the Working Drawings shall be subject to review by the Landlord, and
the Consultants, the reasonable cost of which review shall be at Tenant’s cost.
Tenant has the right to hire additional engineers for the Tenant Improvements as
it determines necessary at its sole cost and expense. Tenant shall cause the
Tenant Architect and such additional engineers to work cooperatively with the
appropriate specialized engineer for the Building (“Engineer”), and the
Consultants in designing Tenant Improvements. Landlord shall cause the Engineer,
and the Consultants to work cooperatively with, and provide Tenant, the Tenant
Architect and such additional engineers with access to all site and applicable
design drawings, including those available on the CAD system (subject to any
requirements of the Owner-Architect agreement), specifications, calculations,
and related information in a convenient medium (electronic or paper) to the
extent reasonably required by Tenant for the design of the Tenant Improvements.
5.2.5 Once the Working Drawings are approved by Landlord and Tenant, the parties
shall each acknowledge its approval by signing or initialing each sheet of the
Working Drawings. The Tenant Architect shall also deliver to Landlord and Tenant
a diskette containing the approved Working Drawings in CAD format. Tenant may
submit draft Working Drawings for permits provided that any submission must be
revised to include any changes required by Landlord prior to Landlord’s approval
of the Working Drawings. Upon approval of the Working Drawings by Landlord,
Tenant shall cause the Tenant Architect to deliver to Landlord (in addition to
the diskette described above) the number of copies of the Working Drawings that
Landlord may reasonably request for use in obtaining bids for the work and in
the course of construction.
5.3 Form of Working Drawings. Tenant shall cause the Working Drawings to be
prepared by the Tenant Architect in a form satisfactory for submittal to the
appropriate governmental authorities for permits and licenses required for the
construction of the Tenant Improvements. Furthermore, Tenant shall cause the
Working Drawings to be prepared in accordance with all applicable Regulations,
including without limitation the ADA, and in accordance with Insurance
Regulations for Fire Resistant “Class A” Buildings. Tenant understands
Landlord’s review and approval of the Working Drawings pursuant to this
Workletter are solely to protect the interests of Landlord, and Landlord shall
not be the guarantor nor responsible for the correctness of the Working
Drawings, or responsible for the compliance of the Working Drawings with
applicable Regulations. Tenant shall be responsible for the cost of making any
repairs or changes to the Premises (or to the common areas located adjacent to
the Premises) as a result of the Tenant Improvements being designed and
constructed in a manner not in compliance with applicable Regulations, including
the ADA. Once the Working Drawings are approved by the parties in accordance
with the terms of this Workletter, the Tenant Architect shall apply for and
obtain the permits and licenses required for the construction of the Tenant
Improvements.

           
 
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5.4 Payment of Tenant Architect Fees and Costs. Tenant shall be responsible for
paying all costs and charges of the Tenant Architect in connection with the TI
Work including preparing and revising the Working Drawings. The Design Allowance
will be made available to pay Architect based on invoices submitted by Architect
to Tenant, with copies to Landlord, provided that Tenant delivers to Landlord
such reasonable documentation as requested by Landlord (including lien
releases). Landlord shall have no obligation to make more than one
(1) disbursement on the Design Allowance per calendar month. If the entire
Design Allowance is not used to pay the charges of Architect in connection with
the Work, the unused amount will be added to the Tenant Improvement Allowance
and may be applied to the Costs of the TI Work.
6. Existing Conditions of Premises. Prior to commencement of construction of the
Tenant Improvements, Tenant shall require and shall be solely responsible for
ensuring that the Tenant Architect, and the engineers and contractors employed
by Tenant or the Tenant Architect verify all existing conditions in the Building
and the Base Building Improvements, insofar as they are relevant to, or may
affect, the design and construction of the Tenant Improvements. Tenant shall be
solely responsible for the completeness of all plans for the Tenant Improvements
and for conformity of the plans with the Building plans and existing conditions
in the Buildings and the Premises. Tenant shall ensure that the Tenant Architect
inspects the Premises to verify existing conditions and construction prior to
the start of construction of the Tenant Improvements. Tenant shall notify
Landlord immediately following such inspection of any discrepancy between
existing conditions and/or construction and the Building plans and Base Building
Improvements; otherwise, Landlord shall be conclusively deemed to have met its
obligations relating to such construction of the Base Building Improvements,
except to the extent the Base Building Improvements described in Section 3 of
Schedule B-1 have not yet been completed. If Tenant notifies Landlord of any
discrepancy under the preceding sentence, Landlord shall either (i) correct the
discrepancy at Landlord’s expense, or (ii) reimburse Tenant for the cost of
revising its Working Drawings to accommodate such existing conditions. In the
absence of notice from Tenant of any discrepancies, Tenant shall be responsible
for any modifications to the Working Drawings necessary to accommodate existing
conditions and construction. Except as provided otherwise herein, Landlord shall
have no liability to Tenant for any inaccuracy or incorrectness in any of the
information supplied by Landlord with regard to existing conditions. Tenant
shall be solely responsible for, and Landlord specifically reserves the right to
require Tenant to make at any time and from time to time during the construction
of the Tenant Improvements, any changes to the Working Drawings necessary (a) to
obtain any permit, (b) to comply with all applicable Regulations, (c) to achieve
the compatibility, as reasonably determined by Landlord, of the Working Drawings
with the Building Plans, or (d) to avoid impairing or voiding any third-party
warranties.
7. Administration, Procedures for Premises Contractor, Pricing the Work.
7.1 Negotiated Contract. Promptly after Landlord and Tenant have reached
agreement on the Working Drawings, Landlord will negotiate and enter into the
Premises Contract with Premises Contractor consistent with this Workletter, and
will cause the Tenant Improvements to be constructed in accordance with the
Working Drawings, as the same may be revised in accordance with this Workletter.
Landlord shall obtain bids for the Tenant Improvements from at least three (3)
general contractors (as described in the definition of “Premises Contractor”
above) for the TI Work. The form of Premises Contract shall be generally
consistent with Landlord’s customary contract form and conditions, which form
has been delivered to and reviewed by Tenant as of the date of the Lease. Any
changes to the standard AIA Documents that have been approved as of the date of
the Lease and which comprise the Premises Contract, to the extent such changes
adversely affect the timing of the Tenant Improvements and/or the cost thereof,
are subject to Tenant’s reasonable review and approval before the same are
included in the Premises Contract and executed by Landlord, which approval will
not be unreasonably withheld, delayed or conditioned. Prior to granting its
approval of the Premises Contract, Tenant shall have received from Landlord
detailed and accurate statements of the basis for the charges associated with
the General Conditions and General Requirements and pre-construction services
under the Premises Contract, including without limitation a cost breakdown of
the budget pricing for the Tenant Improvements on an “open book” basis. Upon
receipt of the copies of the Working Drawings from Tenant or the Tenant
Architect, Landlord shall obtain a bid from the Premises Contractor for the work
shown on the Working Drawings. Upon receipt of the bid from the Premises
Contractor Landlord shall notify Tenant of the amount of the bid. Tenant shall
have five (5) Business Days after receipt of notice from Landlord regarding the
bid in which to give written notice to Landlord of Tenant’s approval or
disapproval thereof (which approval shall not be unreasonably withheld),
otherwise the bid shall be deemed approved and shall be incorporated into the
final Premises Contract. If Tenant timely disapproves of the bid, Tenant shall
meet with Landlord, the Tenant Architect and/or the selected Premises Contractor
within five (5) Business Days to discuss mutually acceptable revisions to the
bid or to Tenant’s Working Drawings. All costs of changes required by any such
revisions shall be the sole responsibility of Tenant. Following such revisions,
Landlord shall submit to Tenant, as soon as reasonably practicable, a revised
bid from the selected Premises Contractor, and the same procedure shall be
followed as set forth above until Tenant has no specific reasonable objection to
the bid.

           
 
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7.2 Major Trades. Landlord shall be entitled to authorize the Premises
Contractor to utilize the following subcontractors (“Approved Subcontractors”)
in each of the major trades (including, without limitation, electrical, plumbing
and mechanical) already involved in the Building: American Mechanical
Corporation, VECA Electric and Holaday Parks, Inc. The Premises Contractor shall
not be obligated to obtain multiple bids from such Approved Subcontractors. For
any subcontractors other than the Approved Subcontractors, the Premises
Contractor shall promptly obtain up to three (3) competitive bids, to the extent
commercially feasible. After receipt of such bids, Landlord and Tenant shall
each review and consult each other regarding the bids. The Premises Contractor
may present a bid from subcontractors working on the Base Building Improvements
for Tenant’s review and approval as one of the bids. The subcontractors shall be
selected by the Premises Contractor with the prior approval of the Landlord and
Tenant. Bid packages will clearly identify and distinguish the Base Building
Improvements, if any, and TI Work. Upon its request, Tenant shall be entitled to
receive full copies of subcontractor bids for TI Work, and shall be entitled to
receive reasonable additional written verification of any determination that
such TI Work does not include any Base Building Improvements work.
7.3 Landlord’s Administration Fee. Landlord shall be entitled to deduct from the
Tenant Improvement Allowance a construction management fee equal to three
percent (3%) of the Costs of the TI Work.
8. Tenant Improvements Construction: Administration of TI Work, Early Entry for
Tenant’s Work.
8.1 Construction of Tenant Improvements. Promptly after acceptance of the
Premises Contract (including approval of the price for the work) and receipt of
the Construction Payment (as defined in Section 12 below) and approval of the
Working Drawings, Landlord shall administer the construction of Tenant
Improvements in accordance with the final, approved and permitted Working
Drawings (which work shall be added to and included within the definition of “TI
Work” set forth in Paragraph 1 of this Workletter ); provided, however, that
Landlord shall not be required to install any Tenant Improvements that do not
conform to the approved Working Drawings, or conflict with elements of the
approved Working Drawings, or do not comply with applicable Regulations; such
conformity being the obligation of Tenant. Landlord and Tenant shall use
diligent and continuous efforts to achieve the dates set forth in Schedule B-5
attached hereto, which dates are estimated target dates only and Landlord shall
not be liable for failure to meet such deadlines. As used herein, Tenant shall
be construed to include Tenant’s consultants and Landlord shall be construed to
include Landlord’s consultants, each of whom shall be instructed to respond in
accordance with the terms of this Workletter and to fully cooperate with the
other party. Landlord shall diligently pursue Substantial Completion of the
Tenant Improvements. The schedule set forth on Schedule B-5 shall be updated as
changes occur and provided to Tenant for its information and as a guide for
progress of construction of the Tenant Improvements.
8.2. Contractor for Tenant’s Work. All Tenant Improvements shall be constructed
by the Premises Contractor and its subcontractors selected pursuant to
Paragraph 7, with the exception of installation of furniture, fixtures, office
and other equipment and design construction and installation of information
technology and telecommunications equipment and wiring (“Tenant’s Work”) which
shall be designed, constructed, installed or provided by Tenant in accordance
with this Paragraph and Article 6 of the Lease. Tenant may request that some or
all of the Tenant’s Work be constructed by the Premises Contractor under a
contract separate from the Premises Contract; provided, however, that Tenant’s
Work shall not delay or interfere with completion of the Base Building
Improvements or TI Work.
8.3 Early Entry. With Landlord’s prior written approval and following generation
of the punch list, Tenant and Tenant’s contractors may enter the Premises prior
to the Substantial Completion of the Tenant Improvements for purposes of cable,
telephone and furniture installation; provided that such entry or work does not
interfere with the construction of the Tenant Improvements by Landlord and the
Premises Contractor. All of the terms and provisions of the Lease shall be
applicable upon such early entry, except for those provisions applicable to the
commencement of the Lease Term and the payment of Monthly Installments of Rent
and Tenant’s Proportionate Share of Expenses and Taxes. Tenant shall be
responsible for any damages to the Building or the Premises caused by Tenant or
its contractors or agents as a result of such early entry. If completion of the
Tenant’s Work interferes with the construction of the TI Work and such
interference causes or is likely to cause a delay in Substantial Completion of
the Tenant Improvements, then Landlord may require Tenant to cease work in the
Premises.

           
 
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8.3.1 IT System Installation. Landlord and Tenant shall arrange for Tenant to
have access to the Premises on a floor by floor basis as early as possible, but
in all events prior to the installation of ceiling grids on each floor, as
coordinated with Landlord, the Premises Contractor, and their respective
contractors and agents working in the same space, in order to allow Tenant to
install telephone lines and telephone systems, fiber optics, computer cabling,
information technology systems and related similar items (“IT Systems”). The
access Tenant is given to the Premises shall be at a time before the ceiling
grids are installed by Landlord so as to allow more quick, cost effective and
efficient installation of cabling and other wiring. Landlord shall use
reasonable efforts to provide Tenant, as early as is reasonably practicable,
with a range of estimated dates (which range shall be given by notice to Tenant
approximately fifteen (15) to twenty-one (21) days prior to the estimated date
of installation) for installation of the ceiling grids on each floor so that
Tenant can arrange for its contractors to do the installations of the IT Systems
with the least amount of disruption and cost to both Landlord and Tenant.
8.3.2 Tenant Furniture and Fixtures. Landlord and Tenant shall arrange for
Tenant to have access to the Premises, floor by floor on a “space ready” basis
to install Tenant’s furniture, fixtures and equipment. Landlord shall use
reasonable efforts to coordinate such entry with Tenant and shall use reasonable
efforts to provide Tenant, as early as is reasonably practicable, with a range
of estimated dates (which range shall be given by notice to Tenant approximately
fifteen (15) to twenty-one (21) days prior to the estimated date of
availability) for the targeted availability of the Premises (on a “space ready”
and floor by floor basis) so that Tenant may order furniture, fixtures and
equipment in a timely fashion.
8.3.3 Tenant’s Work. Tenant’s Work shall be installed in a manner that conforms
with the Premises Contractor’s and/or subcontractor’s schedule for completion of
the Tenant Improvements. Tenant’s Work shall be handled in such a manner as to
maintain harmonious labor relations and as not to interfere with or delay
construction of the TI Work or other Landlord work for other tenants in the
Building. No portion of the TI Work shall be dependent upon completion of any
Tenant’s Work and the TI Work shall have priority over any Tenant’s Work;
provided Landlord shall cause the Premises Contractor to use commercially
reasonable efforts (which shall not include increased costs or liability to
Landlord) to cooperate with Tenant so as to allow completion of Tenant’s Work in
a timely and efficient manner without unreasonable delay or additional material
cost. The contractors, subcontractors and materialmen performing Tenant’s Work
shall be subject to prior reasonable approval by Landlord and shall be subject
to the reasonable administrative supervision of Landlord and reasonable and
customary non-discriminatory rules of the site. In no event will a decision not
to use non-union contractors if the Building or Building is a union site be
discriminatory. Contractors, subcontractors and materialmen performing Tenant’s
Work shall take all necessary steps to insure, so far as may be possible, the
progress of the work without interruption on account of strikes, work stoppage
or similar causes for delay. In the event that the contractors or subcontractors
performing Tenant’s Work do not promptly cause any pickets to be withdrawn and
all other disruptions to the operations of the Building promptly to cease, or in
the event that Landlord notifies Tenant that Landlord has in good faith
concluded that picketing or other disruptive activities are an imminent threat,
Tenant shall immediately cause the withdrawal from the job of all its
contractors, subcontractors or materialmen involved in the dispute. Any delay
caused to the Premises Contractor attributable to Tenant’s Work shall constitute
Tenant Delay (as defined in Section 2.2 of the Lease), and in addition to the
obligations set forth elsewhere herein, Tenant shall be obligated to pay all
cost and expense incurred by Landlord in connection therewith, including lost
rental income. No portion of Tenant’s Work shall be taken into account in
determining whether or not the Premises are Substantially Complete.
8.4 Reasonable Cooperation of the Parties. Landlord and Tenant shall each
proceed with due diligence and in good faith to complete such matters as require
action or approval on the part of Landlord and Tenant during the course of
construction anticipated under this Workletter; and Landlord and Tenant agree to
promptly and diligently respond to all questions and concerns raised by
architects, engineers and other consultants. Tenant and Landlord shall each
endeavor to respond to submissions from Tenant Architect promptly, but in no
event later than as required by Paragraph 5 of this Workletter, on an on-going
basis in order that revisions required by Tenant, Landlord or applicable
governmental agencies, can be promptly completed. From the date of the Lease
until Substantial Completion, Landlord shall use good faith efforts to keep
Tenant apprised of the progress of the Base Building Improvements and Tenant
Improvements construction and alert Tenant to possible changes required, delays
anticipated, costs being incurred and all related matters. If either party
disapproves, objects to or requires a change to any matter in any of the
documents for which that party’s approval is required, which matter in any such
document: (a) was earlier approved by that party, or (b) is consistent with the
earlier approved Building Plans or Working Drawings, then any delays resulting
from such disapproval or objection may constitute a Landlord delay or Tenant
Delay, as the case may be.

           
 
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9. Premises Construction: Tenant Modifications.
9.1 Discretionary Changes. If Tenant desires to change or revise the Tenant
Improvements specified by the approved Working Drawings, then Tenant shall
submit such change in writing for Landlord’s approval, which shall not be
unreasonably withheld, conditioned or delayed and such request shall be
accompanied by plans, specifications and details as may be required to fully
identify and quantify such changes. Landlord shall not be required to approve
any modifications if, in Landlord’s judgment such modification would have an
adverse impact on the Base Building Improvements, including the structural,
mechanical, electrical, life safety or HVAC systems in the Building. Landlord
shall notify Tenant in writing (an “Approval Notice”) whether it will approve
the requested change within five (5) Business Days after the date Landlord
receives Tenant’s request; provided, however, that Landlord’s response time will
be extended by any need to obtain information or estimates from the Premises
Contractor or any subcontractor as to time or cost for the proposed changes. If
the change is requested less than five (5) Business Days before that portion of
TI Work is scheduled to begin, Landlord shall make a reasonable effort to
expedite its response but in no event shall Landlord be liable for failure to
expedite its response. If Landlord approves such changes, then Tenant will
provide Landlord with revised Working Drawings incorporating the changes within
three (3) Business Days. If Tenant‘s request will increase the cost of
construction or will cause a delay in completing the construction, Landlord’s
Approval Notice shall include Landlord’s good faith estimate of the amount of
delay it will cause and/or the increased costs associated with the change,
included Landlord’s lost rent attributable to such delay. Upon receipt of an
Approval Notice, if Tenant still wishes the change to be made, Tenant shall so
notify Landlord in writing within five (5) Business Days thereafter and if the
reasonably estimated cost of such change exceeds Fifty Thousand Dollars
($50,000), shall deposit with Landlord any sum necessary to pay for such change
whereupon Landlord shall execute a change order directing the Premises
Contractor to make the approved changes. If the reasonably estimated cost of a
change is less than or equal to Fifty Thousand Dollars ($50,000), the cost of
such change shall be deposited with Landlord promptly after Tenant‘s receipt of
its monthly statement of progress payments. If Tenant does not respond and
increase the Construction Payment within five (5) Business Days then Tenant
shall be deemed to have withdrawn its request. Landlord shall be entitled to its
administrative fee for overseeing the change order. If, incident to a requested
change to the Working Drawings or TI Work, Landlord stops work pending
resolution of whether Tenant finally approves or disapproves the additional
costs or delay of a proposed change, then whether or not Tenant ultimately
approves or disapproves the proposed change and its additional cost and delays,
any delay resulting from work stoppage will constitute a Tenant Delay. Tenant
shall be responsible for any costs incurred by Landlord, Consultants or the
Premises Contractor to prepare a proposed change order, even if Tenant
subsequently rejects the change order. Tenant shall be responsible for all costs
of any kind resulting from delay in the completion of the Premises or the Base
Building Improvements due to modification of the Working Drawings even if the
costs are not included in Landlord‘s good faith estimate as set forth in the
Approval Notice. The actual cost of any approved changes shall be paid by Tenant
to Landlord, unless the Tenant Improvement Allowance is sufficient to pay the
cost of such change.
9.2 Mandatory Changes. Tenant shall modify the Working Drawings to include any
changes required by any applicable government authority during the permitting
and construction process, and such changes shall be subject to Landlord’s
approval, which shall not be unreasonably withheld, conditioned or delayed.
During the course of construction, Landlord shall be authorized to make any
changes to the Tenant Improvements if required by governmental authority and
Tenant shall pay the cost thereof, to the extent an estimate of such cost was
provided to Tenant for its review prior to its being incurred. Except to the
extent of ongoing minor "field changes" by the Premises Contractor at the time
of construction, any material discretionary change to Tenant Improvements shall
be authorized in writing by Tenant and Landlord, on one or more forms to be
prepared by the Premises Contractor and approved by Landlord and Tenant. All
such proposed changes shall be presented to Tenant as soon as they become known.
As soon as reasonably possible after minor “field changes” occur, Landlord shall
issue written notice to Tenant of such changes made under this Paragraph 9.2
with respect to the Tenant Improvements. Tenant shall approve or reject such
proposed changes promptly and Tenant acknowledges that its approval may require
decisions to be made immediately during the course of construction. Tenant shall
be deemed to have approved the proposed changes unless Tenant disapproves such
changes in writing within twenty four (24) hours after presentation to Tenant
when Landlord so requests. If Tenant does not respond promptly then Landlord may
direct the Premises Contractor to delay that portion of construction and any
delay shall be a Tenant Delay. Any costs of such-changes including Landlord’s
costs (i.e., administration fee and lost rent) associated with Tenant Delay
shall be included in the Costs of the TI Work.
10. Substantial Completion; Audit of Contractor.
10.1 Substantial Completion. Landlord will notify Tenant when the Tenant
Improvements are Substantially Complete. Following Substantial Completion,
representatives of Landlord and Tenant, together with the Tenant Architect as
appropriate, shall conduct an on-site inspection of the Tenant Improvements
(“Punch List Inspection”), and acting reasonably and in good faith shall prepare
a list of “punch-list items” which shall consist of the items that have not
been, but should have been, finished or furnished prior to such date or which do
not conform to the Working Drawings. Landlord shall give Tenant five (5) days’
prior written notice before such inspection occurs. A “punchlist” of all the
deficiencies in the TI Work shall be prepared and Landlord and Tenant shall use
reasonable efforts to prepare the punchlist within 30 days following notice of
Substantial Completion.

           
 
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The Punch List Inspection may occur in one meeting or separate meetings upon
completion of the Tenant Improvements on each floor. No punch-list item shall
exceed the scope, quality or quantity of Tenant Improvements as set forth in the
Working Drawings. Landlord shall complete and furnish all punch-list items as
soon thereafter as is reasonably practicable with the exercise of reasonable
diligence. The cost thereof shall be included in the cost of the Tenant
Improvements. If Tenant does not so provide Landlord with a punchlist prior to
occupying the Premises, Tenant shall be deemed to have accepted the Premises and
the Tenant Improvements in their then present condition, except for latent
defects not reasonably discoverable upon an inspection of the Premises (which
latent defects are subject to the warranties described in Paragraph 16 below).
The existence of minor punchlist items shall not postpone the Commencement Date
of the Lease or result in a delay or abatement of Tenant’s obligation to pay
rent or give rise to a damage claim against Landlord. Landlord agrees to
complete all punchlist items which are Landlord’s or the Contractor’s
responsibility within forty five (45) days after receiving the final punchlist
(or longer if reasonably necessary so long as Landlord and Contractor are
pursuing completion diligently and continuously through completion.) Landlord’s
and Tenant’s obligations to achieve Substantial Completion by any particular
date and the parties obligations generally shall be subject to any acts of God,
acts of civil emergency or military authorities, fires, floods, unusual and
unanticipated adverse weather conditions, earthquakes, strikes or labor
disturbances not caused by the party benefited by the delay, civil commotion, or
war (“Force Majeure”).
10.2 As-Built Plans. Landlord shall cause the Premises Contractor to work with
the Tenant Architect to deliver to Landlord and/or Landlord’s representative and
Tenant and/or Tenant’s representative a complete set of CAD plans and
specifications reflecting the actual conditions of the Tenant Improvements as
constructed in the Premises (“As-Built Drawings”) no later than sixty (60) days
after the Substantial Completion of the TI Work. In the event these drawings are
not received by such date, Landlord may, at its election, cause said drawings to
be obtained and Tenant shall pay to Landlord, as additional rent, the cost of
producing these drawings.
10.3 Audit of Premises Contractor. The Premises Contract shall provide that
Landlord and Tenant shall have a right, within a reasonable period of time
following Substantial Completion of the Premises, to conduct an audit of the
books and records of the Premises Contractor to confirm the costs actually
incurred with respect to the construction of the Tenant Improvements, the
allocation of costs between the Base Building Improvements and the Tenant
Improvements and similar matters under the Premises Contract. The results of the
audit shall be made available to both Landlord and Tenant. If Tenant requests an
audit of the books and records of the Premises Contractor, then Tenant shall be
responsible for the costs of such audit and any dispute resolution proceeding
relating thereto (subject to the terms of the separate written agreement between
the Premises Contractor and Landlord), and Landlord shall promptly conduct the
audit called for under this Section. Payment by Tenant for any such audit shall
be subject to reimbursement from the Premises Contractor as may be provided in
the Premises Contract. Tenant shall be responsible for and entitled to any
adjustments to the cost of the Tenant Improvements that may be made be reason of
such audit.
11. Tenant Improvement Allowance. Landlord shall provide the Tenant Improvement
Allowance toward the payment for the design and construction of the Tenant
Improvements. The parties agree that the Tenant Improvement Allowance is
intended to add permanent value to the Premises and Building and assist Tenant
in reducing its out of pocket construction costs for the Tenant Improvements on
leasehold improvements. Any portion of the Tenant Improvement Allowance which
exceeds the Costs of the TI Work or is otherwise remaining after the
Commencement Date of the Lease (“Unused Allowance”) shall accrue to the sole
benefit of the Tenant, it being agreed that, so long as Tenant is not in default
under the Lease, upon completion of the Tenant Improvements and payment of all
costs related thereto, Landlord shall apply the Unused Allowance, if any,
against the second and subsequent installments of Monthly Installments of Rent
and additional rent due under the Lease. If Tenant is in default under the Lease
at the time of such application of the Unused Allowance, then no such credit
will be given and the Unused Allowance that would have been credited against
Rent is forfeited.
12. Tenant Payments. Landlord shall make progress payments for the Costs of the
TI Work from the Tenant Improvement Allowance from time to time as the Tenant
Improvements are constructed until the Tenant Improvement Allowance is
exhausted. Thereafter, Tenant shall pay to Landlord any additional required
amount (the “Construction Payment”) to pay the stipulated sum or any change
order costs due under the Premises Contract after application of the Tenant
Improvement Allowance. Such payment shall be made within ten (10) Business Days
after Landlord’s submittal to Tenant of a request for payment specifying the
amount due. Statements or invoices shall be rendered by Landlord to Tenant
during the progress of the TI Work so as to enable Tenant to monitor the
progress of the TI Work (including any change in the time required to
Substantially Complete the TI Work or any change in the stipulated sum due under
the Premises Contract) and the payment of the Costs of the TI Work from the
Tenant Improvement Allowance during the course of construction of the Tenant
Improvements.

           
 
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12.1 Manner of Payment. During the construction of the Tenant Improvements,
Landlord shall make the payments required under the Premises Contract directly
to the Premises Contractor or other applicable payee as and when due under the
Premises Contract. Landlord shall provide to Tenant a photocopy of all invoices
received from the Premises Contractor within ten (10) days’ of Landlord’s
receipt thereof. All variances in the costs of Tenant Improvements against a
budget for such costs approved by Tenant shall be explained in writing to
Tenant. Any cost increases shall be approved by Tenant (which approval shall not
be unreasonably withheld, conditioned or delayed) in accordance with Section 9.1
above before Tenant shall be obligated to pay it. Any of the foregoing approvals
and delivery of information must be delivered in writing to Tenant.
12.2 Request for Payment Documents. Landlord shall provide legible copies of
applicable statements and conditional lien releases by subcontractors, suppliers
and materialmen entitled to liens on the Tenant Improvements for work being paid
for to that date, and such other documents are as set forth below in
Paragraph 12.3 or as may be mutually agreed by the parties. Landlord shall also
provide Tenant with copies of invoices, bills and similar documentation that
support Landlord’s request for payment from Tenant.
12.3 Mandatory Payment Documents. Prior to requesting any amount from Tenant to
pay Premises Contractor , the following documents must be presented by Landlord
in a form reasonably acceptable to Tenant: (i) AIA Document G702 with AIA
Document G703 Continuation Sheet or similar form approved by Landlord and signed
by both the Tenant Architect and the Premises Contractor for the Tenant
Improvements, as the case may be; (ii) summary sheet summarizing the entire
anticipated Costs of the TI Work (stipulated sum under the Premises Contract
plus approved change orders) and the amount paid thus far; and (iii) monthly
billing statement from the Premises Contractor with an attached schedule of
values and the Premises Contractor’s worksheets and reasonable backup
documentation sufficient to support the claim. The Landlord agrees to include in
the Premises Contract a provision that if the Premises Contractor has a claim
for extension of time or more money under the Premises Contract, notice of such
claim shall be given contemporaneously to Tenant. If the Premises Contractor
makes such a claim, then it shall provide notice of such claim to Tenant and
provide the supporting documentation for such claim in reasonable detail.
12.4 Determination of Final, Actual Costs of Tenant Improvements. Not later than
one hundred twenty (120) days after Substantial Completion, Landlord shall
submit to Tenant an itemized, detailed statement of actually incurred Costs of
the TI Work with reasonable supporting documentation consistent with an “open
book” approach being taken under this Workletter. If there are disputes pending
at this time, any costs attributable to items Landlord disputes must be
submitted to Tenant within ten (10) days following resolution of such dispute.
13. Designation of Construction Representatives. Tenant hereby designates Bill
Howard as its representative in connection with the design and construction of
the Tenant Improvements and Landlord shall be entitled to rely upon the
decisions and agreements made by such representative as binding upon Tenant.
Landlord hereby appoints Alex Bennett to act on its behalf and represent its
interests with respect to all matters requiring Landlord action in this
Workletter and Tenant shall be entitled to rely upon the decisions and
agreements made by any of such representatives as binding upon Landlord. Each
party hereby expressly recognizes and agrees that no other person claiming to
act on behalf of the other party is authorized to do so. The parties may change
the identity of their representatives by notice in writing to each other. All
inquiries, requests, instructions, authorizations, and other communications
under this Workletter may be made by the parties to the other party’s
representative, and any approvals to be given by a party under this Workletter
may be given by that party’s representative. Landlord and Tenant shall each be
entitled to rely upon the decisions and agreements made by the other party’s
representative with respect to matters covered by this Workletter as binding
upon it but neither party‘s representative shall have any authority to amend or
modify the terms of the Lease (including this Workletter) or to act with respect
to any matters except those expressly covered by this Workletter. No consent,
authorization or other action shall bind Landlord or Tenant unless in writing
and signed by one of the aforementioned persons. If Landlord or Tenant complies
with any request or direction presented to it by anyone else claiming to act on
behalf of the other party, such compliance shall be at Landlord’s or Tenant’s
sole risk and responsibility and shall not in any way alter or diminish the
obligations and requirements created and imposed by this Workletter and the
other party shall have the right to enforce compliance with this Workletter
without suffering any waiver, dilution or mitigation of any of its rights
hereunder. Landlord shall have the right to observe the construction of the
Tenant’s Work. Tenant shall, subject to the site rules and regulations and any
insurance requirements of Landlord, have the right to observe the construction
of the TI Work when accompanied by a representative of Landlord. Tenant and
Landlord shall participate in weekly construction meetings with the Premises
Contractor and active subcontractors, and both parties shall have the right to
attend any additional construction meetings scheduled to address any particular
concerns during the construction process. Each party shall cause its architects,
engineers and contractors to cooperate fully and promptly with each other as and
when deemed necessary by such party in its good faith determination in the
course of construction of the Tenant Improvements and Tenant’s Work. If
completion of the Tenant’s Work interferes with the construction of the TI Work
and Tenant fails to comply with Landlord’s requests for cooperation then
Landlord may require Tenant to cease work in the Premises.

           
 
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14. Intentionally Omitted.
15. Changes to Building Plans or Working Drawings. Landlord and Tenant shall
each be entitled to rely on the Building Plans and the Working Drawings for work
to be done by Landlord or Tenant. If (a) Tenant notifies Landlord of any
construction discrepancies following its inspection pursuant to Paragraph 6
above, or (b) Landlord is required to modify the Building Plans due to changes
in the Working Drawings initiated by Tenant, for value-engineering purposes or
for discretionary reasons after Tenant’s approval of the Building Plans, or
(c) Tenant is required to modify the Working Drawings due to changes in the
Building plans initiated by Landlord, for value-engineering purposes or for
discretionary reasons, then Landlord or Tenant, as the case may be, shall
reimburse the other for the actual, out-of-pocket cost of revising the Working
Drawings or Building plans to accommodate such existing conditions or changes in
the Working Drawings or Building plans. In addition, if Landlord changes the
Building plans after Tenant submits the Working Drawings to Landlord for
approval and Tenant is required to change the Working Drawings to comply with
Landlord’s changes to the Building Plans, then the dates by which actions are to
be taken may be extended for such reasonable period of time (not to exceed ten
(10) Business Days) as is necessary for Tenant to modify the Working Drawings to
conform to the changes to the Building plans; provided, however, that the dates
shall not be extended unless Tenant notifies Landlord, within two (2) Business
Days after Tenant receives notice of the changes, of the number of days Tenant
will need to make such revisions. Notwithstanding the foregoing, if any delay is
made up in any later period, then subsequent deadlines shall not be extended. If
any deadline would end on a Saturday, Sunday or holiday, the deadline shall be
extended to the next Business Day.
16. Warranties. Landlord shall obtain from the Premises Contractor, and all
other contractors and suppliers providing design services, material, labor or
equipment in the construction of the Tenant Improvements such warranties as
Landlord deems to be commercially necessary or desirable for their respective
materials, labor or equipment. With respect to the Tenant Improvements as
described in Schedule B-2 attached hereto, Landlord shall use good faith,
commercially reasonable efforts to obtain a twelve (12) month warranty from its
contractors and suppliers. All such warranties shall be in writing, shall run to
Landlord and Tenant to the extent of Tenant’s interest, and shall be assignable
by Landlord in the event of any sale of the Building. If there exists any defect
in the Base Building Improvements or Tenant Improvements that is covered by an
express or implied warranty obtained by Landlord, then Landlord shall seek to
enforce such warranties in accordance with their terms for the benefit of the
Landlord and the Tenant, as their interests may appear. To the extent permitted
by law and by the warranty to be assigned, Landlord hereby assigns all
warranties with respect to workmanship and materials supplied in connection with
the Tenant Improvements to Tenant (in common with Landlord) and Tenant may
enforce any warranties on the Tenant Improvements if Landlord fails to do so
after notice from Tenant.
17. Insurance. Landlord shall require that the Premises Contractor (and, to the
extent required in the Premises Contract, its subcontractors) maintain
commercial general liability insurance in an amount of not less than Two Million
Dollars ($2,000,000.00) on a combined single limit basis and all worker’s
compensation insurance required by law and within five (5) business days
following Tenant’s request, shall provide evidence of such insurance to Tenant.
Tenant shall maintain the insurance required of Tenant pursuant to the terms of
the Lease and shall provide certificates of insurance evidencing the same prior
to entering the Premises.
18. Notices. Notwithstanding anything in the Lease to the contrary, and for this
Agreement only, wherever in this Workletter a notice is required to be given,
such notice shall be in writing and shall be personally delivered or mailed by
registered or certified mail, or by a nationally recognized overnight courier
service (e.g., Federal Express), or by confirmed e-mail, to the address of
Landlord and Tenant set forth below. Any notices mailed to such party bearing
the proper address and adequate postage for delivery shall be deemed effective
upon (i) receipt, (ii) deposit in the U.S. mail, or (iii) acceptance or refusal
of delivery by courier or confirmed email, as the case may be.

     
If to Landlord:
  If to Tenant:
 
   
Alex Bennett
  Cray Inc.
Kennedy Wilson Properties NW
  Bill Howard
901 5th Avenue, Suite 2700
  1050 Lowater Rd.
Seattle, WA 98164
  Chippewa Falls, WI 54729

           
 
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19. Binding Effect. Except as otherwise stated herein, this Workletter shall
bind and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
20. Entire Agreement. This Workletter, together with the schedules to the
Workletter, the Lease and the other exhibits to the Lease, constitutes the
entire agreement among the parties with respect to the subject matter hereof and
may be amended or waived only in writing signed by both parties. To the extent
any of the terms or conditions of this Workletter conflict with any of the terms
or conditions of the Lease, this Workletter shall control.
21. Relationship of Parties. Landlord is an independent contractor with respect
to Tenant. Landlord shall have no authority to bind Tenant except as expressly
provided in this Workletter. Landlord and Tenant shall not be construed as joint
venturers or general partners, and neither shall have the power to bind or
obligate the other party except as set forth in this Workletter. Nothing herein
shall be construed as reserving to Tenant the right to control Landlord’s
business.
22. Attorneys’ Fees. If either party brings any suit or other proceeding with
respect to the subject matter or enforcement of this Improvements Agreement, the
prevailing party (as determined by the court, arbitrator, agency or other
authority before which such suit or proceeding is commenced) shall, in addition
to such other relief as may be awarded, be entitled to recover reasonable
attorneys’ fees and expenses as actually incurred (including without limitation,
reasonable attorneys’ fees and expenses incurred in appellate proceedings, or in
any action or participation in, or in connection with any case or proceeding
under the Bankruptcy Code).
23. Neutral Authorship. In connection with the execution and delivery hereof,
each party has been represented by counsel. Each of the provisions of this
Workletter has been reviewed and negotiated, and represents the combined work
product of both parties. No presumption or other rules of construction which
would interpret the provisions of this Workletter in favor of or against the
party preparing the same shall be applicable in connection with the construction
or interpretation of any of the provisions of this Workletter.
24. No Waiver or Prejudice. Except as herein expressly provided, no waiver by a
party of any breach of this Workletter shall be deemed to be a waiver of any
other breach by such party. No failure or delay by a party to exercise any right
it may have by reason of the default of the other shall operate as a waiver of
such default or result in the modification of this Workletter.
25. Assignment. During any period of construction of Tenant Improvements
hereunder, including the completion of punch-list items and obtaining issuance
of a final certificate of occupancy, the obligations of Landlord and Tenant
hereunder may not be assigned, except in connection with a permitted assignment
by Landlord or Tenant of the Lease, or unless the consent of the other party is
obtained, which consent shall not be unreasonably withheld, conditioned or
delayed. The parties’ respective rights and obligations hereunder shall be
assigned in connection with any permitted assignment by such party of the Lease.
In the event of such assignment, the assignor shall remain liable for its
obligations under this Workletter subject to release in the same manner as that
party may be released under the Lease.
26. Schedules. The Schedules hereto are made a part of and incorporated into
this Workletter and are as follows:

     
B-1
  Definition of Base Building Improvements
B-2
  Floor Plans and Scope of Work Outline for Tenant Improvements
B-3
  Items in the Tenant Improvements to be Removed upon Termination of the Lease
B-4
  Description of Special Tenant Improvements
B-5
  Projected Schedule for Completion of TI Work
B-6
  Itemized Description of Working Drawings

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  /s/ BH
 
  /s/ MB
 
    Initials

 

B-12

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SCHEDULE B-1
DEFINITION OF BASE BUILDING IMPROVEMENTS
SECTION 1 — BASE BUILDING (ORIGINAL)

                      Drawing       Revision   Revision     Number   Title  
Number   Date   Description ARCHITECTURAL DRAWINGS — JOHN GRAHAM        
A1
  Site Plan and Title     82     10/10/73   Rev. per Ref # 86 (revised 10-21-73)
A2
  Basement Floor Plan     20     03/03/72   Rev. per R.P. # 19
A3
  Lower Level Floor Plan     42     09/15/72   Rev per Ref # 43
A4
  Upper Level Floor Plan     33     07/14/72   Rev. per R.P. # 32
A5
  First Floor Plan     82     10/10/73   Rev. per Ref # 86
A6
  Mezzanine Floor Plan     34     07/14/72   Rev. per R.P. # 34
A7
  Upper Part of Mezzanine Floor     57     02/05/72   Rev. per Ref # 59
A8
  4th Floor Plan     73     04/27/73   Rev. per C.O.P. # 75
A9
  5th Floor Plan     82     10/10/73   Rev. per Ref # 86 (revised 10-29-73)
A10
  6th — 12th & 14th Floor Plan     51     12/11/72   Rev. per R.P. # 53
A11
  15th — 24th Floor Plan   None   None   Issued 4-30-71
A12
  25th — 26th Floor Plan   None   None   Issued 4-30-71
A13
  27th — 37th Floor Plans   None   None   Issued 4-30-71
A14
  38th — 42nd Floor Plans   None   None   Issued 4-30-71
A15
  43rd Floor, Roof Plan and Sections   None   None   Issued 4-30-71
A16
  Exterior Elevations   None   None   Issued 4-30-71
A17
  Exterior Elevations     8     10/04/71   Rev. per R.P. # 6
A18
  1/6” scale Building Sections   None   None   Issued 4-30-71
A19
  Building Elevations & Sections   None   None   Issued 4-30-71
A20
  Exterior Wall Sections   None   None   Issued 4-30-71
A21
  Exterior Wall Sections   None   None   Issued 4-30-71
A22
  Exterior Wall Sections   None   None   Issued 4-30-71
A23
  Schedules and Details     29     05/24/72   Rev. per R.P. # 28
A24
  Basement, L.L. & 1st Floor Core Plans     22     07/26/73   Rev per COP # 22
(Tenant work)
A25
  Mezzanine, 4th & 5th Floor Core Plans     84     10/24/73   Rev per COP # 88
A26
  6th — 12th & 14th — 23rd Floor Core Plans     57     02/05/73   Rev. per Ref #
59
A27
  24th — 26th Floor Core Plans     56     01/30/73   Rev. per Ref # 58
A28
  27th — 43rd Floor Core Plans     17     01/06/72   Rev. per R.P. # 15
A29
  Typical Reflected Ceiling Plans     12     10/25/71   Rev. per R.P. # 10
A30
  Section Thru Stairs # 1 & # 2     12     10/25/71   Rev. per R.P. # 10
A31
  Stair Sections     69     04/20/73   Rev. per R.P. # 71
A32
  Stair Details     54     01/18/73   Rev. per R.P. # 56
A33
  Fire proofing Details     12     10/25/71   Rev. per R.P. # 10
A34
  Entrance Details     67     04/05/73   Rev. per Ref. # 69
A35
  Precast conc. Columns details     51     12/11/72   Rev. per R.P. # 53
A36
  Window Details     51     12/11/72   Rev. per R.P. # 53
A37
  Alternate Column Details   None   None   Issued 4-30-71
A38
  Miscellaneous Details     61     02/16/73   Rev. per Ref. # 63

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

B-13

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                      Drawing       Revision   Revision     Number   Title  
Number   Date   Description STRUCTURAL DRAWINGS — JOHN GRAHAM        
S1
  General Notes and Standard Details     12     10/25/71   Revised as per R.P. #
10
S2
  Standard Details     40     09/07/72   Revised as per Ref # 40
S3
  Basement Floor and Foundation     15     12/20/71   Revised as per R.P. # 13
S4
  Lower Level Framing Plan     42     09/15/72   Revised as per Ref # 43
S5
  Upper Part of Lower Level Plan     33     07/14/72   Revised as per R.P. # 32
S6
  1st Floor Framing Plan     29     05/24/72   Revised as per R.P. # 28
S7
  Mezzanine Floor Framing Plan     13     10/26/71   Revised as per R.P. # 11
S8
  Upper Part of Mezzanine Floor Framing Plan     33     07/14/72   Revised as
per R.P. # 32
S9
  4th Floor Framing Plan     0     02/05/73   Revised to omit Rev # 41
S10
  5th Floor Framing Plan     40     09/07/72   Revised as per Ref # 40
S11
  6th — 24th Floor Framing Plan     17     01/06/72   Revised as per R.P. # 15
S12
  25th — 27th Floor Framing Plan     0     05/14/71   Not revised
S13
  28th — 38th Floor Framing Plan     44     10/13/72   Revised as per R.P. # 45
S14
  39th — 43rd Floor Framing Plan     59     02/05/73   Revised as per Ref. #
 _____ 
S15
  Steel Column Schedule and Details     13     10/26/71   Revised as per R.P. #
11
S16
  Partial Exterior Tower Framing Elev’s Bsmt. 27th floor     25     05/03/72  
Revised as per R.P. # 24
S17
  Partial Exterior Tower Framing Elev’s Bsmt. 27th floor     13     10/26/71  
Revised as per R.P. # 11
S18
  Partial Exterior Tower Framing Elev’s 27th to Roof     5     07/08/71  
Revised as per R.P. # 2
S19
  Partial Exterior Tower Framing Elev’s 27th to Roof     5     07/08/71  
Revised as per R.P. # 2
S20
  Girder Details     6     09/20/71   Revised as per R.P. # 4
S21
  Girder Details     10     10/07/71   Revised as per R.P. # 8
S22
  Schedules and Details     12     10/25/71   Revised as per R.P. # 10
S23
  Sections and Details     12     10/25/71   Revised as per R.P. # 10
S24
  Sections and Details     5     07/08/71   Revised as per R.P. # 2
S25
  Sections and Details     13     10/26/71   Revised as per R.P. # 11

                      Drawing       Revision   Revision     Number   Title  
Number   Date   Description ELECTRICAL DRAWINGS — JOHN GRAHAM        
E1
  Basement Floor Plan Lighting & Power   None   None   Not revised issued
4-30-71
E2
  LL Floor Plan — Lighting & Power   None   None   Not revised issued 4-30-71
E3
  Upper Part of LL Plan — Lighting & Power   None   None   Not revised issued
4-30-71
E4
  1st Floor Plan — Lighting & Power   82   10/10/73   Revised per Ref # 86
(Revised 10-29-73)
E5
  Mezzanine Floor Plan — Lighting & Power   None   None   Not revised issued
4-30-71
E6
  Upper Part of Mezzanine Fl. — Lighting & Power   None   None   Not revised
issued 4-30-71
E7
  4th Floor Plan — Lighting & Power   None   None   Not revised issued 4-30-71
E8
  5th Floor Plan — Lighting & Power   None   None   Not revised issued 4-30-71
E9
  Typical Lighting Power   None   None   Not revised issued 4-30-71
E10
  Typical Lighting Systems Plans — Power   None   None   Not revised issued
4-30-71
E11
  Cellular & Underfloor Duct System — Details   25   05/08/72   Revised per RP #
24
E12
  25th Fl., 26th Fl., Roof Plan & Elev Mach. RMS Lighting & Power   None   None
  Not revised issued 4-30-71
E13
  Core Plans — Lighting & Power   None   None   Not revised issued 4-30-71
E14
  Stair Riser and Fire Alarm System   None   None   Not revised issued 4-30-71
E15
  Telephone, Lighting & Power Riser Diagrams   None   None   Not revised issued
4-30-71
E16
  Single Line Diagrams & Details   None   None   Not revised issued 4-30-71
E17
  Panel & Fixture Schedules   63   02/27/73   Revised per COP # 65

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

B-14

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                      Drawing       Revision   Revision     Number   Title  
Number   Date   Description MECHANICAL DRAWINGS — JOHN GRAHAM        
M1
  Site plan, Notes & Drawing Schedule     33     07/14/72   Rev. per R.P. # 32
M2
  Basement Floor Plan, Parking Level L&M     72     04/24/73   Rev per C.O. Ref
# 74
M3
  Lower level Floor Plan, Parking Level J&K     79     07/31/73   Rev per C.O.
Ref # 82
M4
  Upper Part of Lower Level Plan, Parking Level H&I     79     07/31/73   Rev
per C.O. Ref # 82
M5
  1st Floor Plan, Parking Level F&G     60     02/14/73   Rev per C.O. Ref # 62
M6
  Mezzanine Floor Plan, Parking Level D&E     72     04/24/73   Rev per C.O. Ref
# 74
M7
  Upper Part of Mezz. Floor Plan, Parking level B&C     72     04/24/73   Rev
per C.O. Ref # 74
M8
  4th Floor Plan, Parking Level A     81     09/14/73   Rev per C.O. Ref # 85
M9
  5th Floor Plan     81     09/14/73   Rev per C.O. Ref # 85
M10
  6th — 8th Floor Plans     48     10/24/72   Rev per C.O. Ref # 49
M11
  9ht — 24th, 27th — 37th & 38 -41st Floor Plans     79     07/31/73   Rev per
C.O. Ref # 82
M12
  24th Floor Plan (plumbing)     81     09/14/73   Rev per C.O. Ref # 85
M13
  25th Floor Plan 26th Floor (mezzanine) MECH     81     09/14/73   Rev per C.O.
Ref # 85
M14
  27th, 28th — 37th Floor Plans (Plumbing)     60     02/14/73   Rev per C.O.
Ref # 62
M15
  38th, 39th — 41st Floor Plans (Plumbing) & 42nd Floor     72     04/24/73  
Rev per C.O. Ref # 74
M16
  43rd Floor Roof & 1/4” Core Plans 7th — 12th, 14 -23rd & 26th     81    
09/14/73   Rev per C.O. Ref # 85
M17
  1/4” Core Plans 24th, 27th — 37th, 38th — 41st Floor     81     09/14/73   Rev
per C.O. Ref # 85
M18
  Plumbing riser Diagram     72     04/24/73   Rev per C.O. Ref # 74
M19
  W. Shaft Ventilation Riser Diagram & Shaft Plan     79     07/31/73   Rev per
C.O. Ref # 82
M20
  E. Shaft Ventilation Riser Diagram & Shaft Plan     81     09/14/73   Rev per
C.O. Ref # 85
M21
  Mech. Room Sections, 25th & 42nd Floor 1/4”     60     02/14/73   Rev per C.O.
Ref # 62
M22
  Chiller-Pump Room 1/4” Plans & Sections     81     09/14/73   Rev per C.O. Ref
# 85
M23
  Flow Diagram, H.V.A.C.     81     09/14/73   Rev per C.O. Ref # 85
M24
  Standard Details & Legends     39     08/22/72   Rev per R.P. # 39
M25
  Standard Details & Equipment Schedule     60     02/14/73   Rev per C.O. Ref #
62
M26
  Pipe Schedules & Details.     2     06/10/71   Per Addendums No. 1,1a, 2 & 3

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

B-15

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SECTION 2 — WARM SHELL

                          Drawing       Revision           Revision     Number  
Title   Number           Date   Description MECHANICAL SPECIFICATIONS - HVAC -
FLACK + KURTZ            
15010
  General Provisions               6-Apr-05      
15020
  Mechanical Scope of Work               6-Apr-05    
15190
  Systems Identification               6-Apr-05    
15240
  Vibration Isolation and Seismic Restriants               6-Apr-05    
15241
  Acoustics               6-Apr-05    
15250
  Insulation               6-Apr-05    
15800
  Ductwork               6-Apr-05    
15930
  Air Terminal Units               6-Apr-05    
15985
  Automatic Control Sequences               6-Apr-05    
N/A
  Heating and Cooling Loads               26-Jun-08    
 
                        MECHANICAL DRAWINGS - HVAC - FLACK + KURTZ            
M-101
  6th Floor Plan, Typical for floors 6 through 24               28-Mar-05
13-Nov-07    
M-104
  Mechanical fourth floor plan               No Date    
 
                        FIRE SPRINKLER SPECIFICATIONS - FLACK + KURTZ          
 
15470
  Part 1 — General Provisions               6-Apr-05    
15470
  Part 2 — Gauges               6-Apr-05    
15470
  Part 3 — Fire Protection Systems               6-Apr-05    
 
                        FIRE SPRINKLER DRAWINGS - NORTHSTAR FIRE PROTECTION    
     
FP-1
  Fire Protection Details               15-Jul-05    
FP-2
  Fourth Floor Piping Plans               15-Jul-05    
FP-4
  Ninth Floor Piping Plans               15-Jul-05    
FP-5
  Tenth Floor Piping Plans               15-Jul-05    
 
                        4TH FLOOR LOBBY AND BICYCLE SHOWER DRAWINGS - BURGESS
DESIGN        
A4.1
  Project Information   10-Apr-06     6     09/10/07    
A4.2
  Project Notes   10-Apr-06     6     09/10/07    
A4.3
  Construction, Demolition and Electrical Plan   10-Apr-06     6     09/10/07  
 
A4.4
  Reflected Ceiling Plan   10-Apr-06     6     09/10/07    
A4.5
  Finish Plan   10-Apr-06     6     09/10/07    
A4.6
  Interior Elevations   10-Apr-06     6     09/10/07    
A4.7
  Interior Elevations   10-Apr-06     6     09/10/07    
A4.8
  Door/Relite Schedules, Details   10-Apr-06     6     09/10/07    
A4.9
  Details   10-Apr-06     6     09/10/07    
A4.10
  Details   10-Apr-06     6     09/10/07    
A4.11
  Details   10-Apr-06     6     09/10/07    
 
                        ELECTRICAL SPECIFICATIONS - FLACK + KURTZ          
 
  Note: See Shell and Core Electrical                    

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

B-16

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SECTION 3 — SHELL AND CORE UPGRADES

                          Drawing       Revision           Revision     Number  
Title   Number           Date   Description ELECTRICAL SPECIFICATIONS - SHELL
AND CORE TOWER REVISIONS - FLACK + KURTZ  
 
  Specification Sections                    
16010
  Electrical General Provisions               25-Feb-08    
16110
  Raceways and Boxes               25-Feb-08    
16120
  Wire and cable               25-Feb-08    
16425
  Switchboards               25-Feb-08    
16440
  Disconnect Switches and Individual Motor Controllers               25-Feb-08  
 
16460
  Dry Type Transformers               25-Feb-08    
16465
  Busway               25-Feb-08    
16470
  Panelboards               25-Feb-08    
16680
  Grounding Systems               25-Feb-08    
 
                        ELECTRICAL DRAWINGS - BUS RISER AND PANEL UPGRADES -
FLACK + KURTZ    
E000
  Electrical legend & abbreviations               25-Feb-08   Bid Set
E100
  Lower level (flrs 6-24) reference plan               25-Feb-08   Bid Set
E101
  25th floor reference plan               25-Feb-08   Bid Set
E200
  Lower level (flrs 6-15) Elec. Rms. Layout — existing               25-Feb-08  
Bid Set
E202
  25th Floor Elec. Rm. Layout — existing               25-Feb-08   Bid Set
E300
  Lower level (flrs 6-15) Elec. Rms. Layout — new               25-Feb-08   Bid
Set
E302A
  Lower level (flrs 6-24) new Elec. Rm. Layout — new               25-Feb-08  
Bid Set
E303
  25th Floor Elec. Rm. Layout — new               25-Feb-08   Bid Set
E304
  25th Floor Elec. Rm. Layout — new               25-Feb-08   Bid Set
E500
  Load Summary and Feeder Schedule               25-Feb-08   Bid Set
E501
  Power riser — new — (Section 1 of 4)               25-Feb-08   Bid Set
E502
  Power riser — new — (Section 2 of 4)               25-Feb-08   Bid Set
E602
  Electrical onelines — new               25-Feb-08   Bid Set
E604
  Power Riser Detail — New               25-Feb-08   Bid Set
E700
  Electrical Details               25-Feb-08   Bid Set
 
                        SPECIFICATIONS - CONDENSER WATER LOOP - FLACK + KURTZ  
       
15010
  General Provisions               25-Feb-08    
15060
  Piping and Accessories               25-Feb-08    
15100
  Valves               25-Feb-08    
15130
  Meters, Gauges and Thermometers               25-Feb-08    
15140
  Supports, Hangers, Anchors and Sleeves               25-Feb-08    
15170
  Electric Motors               25-Feb-08    
15171
  Variable Frequency Drives               25-Feb-08    
15190
  Systems Identification               25-Feb-08    
15240
  Vibration Isolation and Seismic Restraints               25-Feb-08    
15241
  Acoustics               25-Feb-08    
15715
  Heat Exchangers               25-Feb-08    
15900
  Building Management System               25-Feb-08    

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

B-17

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                          Drawing       Revision           Revision     Number  
Title   Number           Date   Description MECHANICAL DRAWINGS - CONDENSER
WATER LOOP - FLACK + KURTZ          
M-101
  Mechanical legend & abbreviations   25-Feb-08     2     06/26/08   Permit Set
M-102
  Mechanical Schedules and Details   25-Feb-08     2     06/26/08   Permit Set
M-103
  Mechanical Structural Calculations   25-Feb-08     2     06/26/08   Permit Set
M-201
  Mech. Enlarged Plan — Mech Room, Level 25   25-Feb-08     2     06/26/08  
Permit Set
M-202
  Enlarged Floor Plans Level 4, 5, 6, 7, 17, 23   25-Feb-08     2     06/26/08  
Permit Set
M-301
  Condenser Water Diagram   25-Feb-08     2     06/26/08   Permit Set
 
                        ELECTRICAL DRAWINGS - CONDENSER WATER LOOP - FLACK +
KURTZ          
E202
  25th Floor Elec. Plan Condenser Riser Pumps   25-Feb-08                
E602
  Electric One-line and Partial Riser   25-Feb-08                

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  /s/ BH
 
  /s/ MB
 
    Initials

 

B-18

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SCHEDULE B-2
DEFINITION OF TENANT IMPROVEMENTS
(see attached)

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

B-19

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(LOGO) [c74999c7499900.gif]
(CRAY LOGO) [c74999c7499905.gif]                
August 4, 2008
SCOPE OF WORK OUTLINE FOR TENANT IMPROVEMENTS
901 5th Avenue
The following work letter describing the proposed tenant improvements for the
above named project shall accompany the test fit plans dated July 30, 2008
attached herewith.

1.   SCOPE OF WORK   1.1   Elevator Lobby (4th, 9th and 10th Floors)

  •   Security doors: Frameless clear tempered glass doors (single or double as
shown on plan) with pivot hinge channels with stainless steel or satin aluminum
finish. Tempered glass side lites. Card reader security access. Glazing film on
door and relite.

  •   Elevator doors: Prep and paint existing elevator doors and frames. Provide
high gloss or textured finish.

  •   Finishes:

  •   Flooring: Wood or bamboo flooring.

  •   Base: 4” MDF base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: GWB cloud with acoustical stretched fabric. Ceiling clouds to
include linear slots for recessed light fixtures.

  •   Lighting:

  •   Up to (6) recessed low voltage downlights with MR-16 lamps in ceiling
cloud.

  •   Recessed LED linear fixture, (3) 8’-0” units in ceiling cloud slot.

  •   Up to ten (10) recessed downlights with compact fluorescent lamps in south
corridor.

  •   HVAC: Building standard.

1.2   Reception Area (10th Floor)

  •   Casework: Premium grade reception desk with apple-ply veneer surround,
stone transaction counter (at 42” above floor) and built-in plastic laminate
countertop with apple-ply edgeband. Two (2) maple drawer pedestals (BBF).

  •   Lumicore panel with back lighting at signage and reception desk screen.

  •   Finishes:

  •   Flooring: Wood or bamboo flooring.

  •   Carpet tile at waiting area and behind reception desk.

  •   Base: 4” MDF base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: GWB cloud with acoustical stretched fabric above reception desk.

  •   Lighting:

  •   Twelve (12) recessed downlights with compact fluorescent lamps.

  •   Three (3) recessed low voltage downlights with MR-16 lamps in ceiling
cloud.

  •   Three (3) low voltage pendant fixtures on track or mono-point above
reception desk.

  •   Recessed linear wall washer to illuminate east and west walls below
ceiling cloud.

  •   Three (3) recessed step lights at vertical face of reception desk.

  •   Electrical:

  •   Minimum of two (2) quad electrical wall receptacle (with shared separate
circuit for computer use and standard power), and two (2) mud ring for data port
at reception desk.

  •   One (1) duplex electrical wall receptacle and one (1) mud ring at waiting
area.

  •   HVAC: Building standard.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-20

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(LOGO) [c74999c7499900.gif]

1.3   Large Conference Room (10th Floor Conference Center)

  •   Double doors: Frameless clear tempered glass doors with pivot hinge
channels with stainless steel or satin aluminum finish. Tempered glass side
lites. Glazing film on all glass panels.

  •   Casework: Built-in credenza with plastic laminate countertop and maple
veneer hinged doors cabinets below.

  •   Finishes

  •   Flooring: Carpet tile.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Approx 8’-0” X 20’-0” GWB cloud with acoustical stretched fabric
above Tenant’s conference table.

  •   HVAC: Building standard system on separate zone.

  •   Lighting:

  •   Up to twelve (12) recessed downlights on dimmer switch.

  •   16’-0” linear pendant fixture above Tenant’s conference table.

  •   Electrical:

  •   Two (2) flush floor receptacle with electrical and data ports below
Tenant’s conference table.     •   Up to two (2) duplex electrical wall
receptacles and mud ring for data ports.

  •   Provide one (1) mud ring in ceiling plenum for WAP (wireless access
point).

  •   Miscellaneous:

  •   4’-0” x 16’-0” whiteboard.

  •   Backing in wall for tenant’s flat panel monitor.

1.4   Typical Conference/Meeting Rooms

  •   Doors and relites:

  •   Maple veneer solid core door with tempered glass vision panel and aluminum
frame.

  •   Double maple veneer doors where noted on plan.

  •   Relite with clear tempered glass, glazing film and aluminum frame.

  •   Aluminum storefront sliding doors where noted on 10th floor.

  •   Glazing film on all glass panels.

  •   Casework: Built-in credenza with plastic laminate countertop and maple
veneer hinged doors cabinets below where noted on plan.

  •   Finishes

  •   Flooring: Carpet tile.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.

  •   Lighting:

  •   Up to twelve (12) recessed downlights on dimmer switch.

  •   8’-0” linear pendant fixture above tenant’s conference table.

  •   Electrical:

  •   One (1) flush floor receptacle with electrical and data ports below
Tenant’s conference table.

  •   Up to two (2) duplex electrical wall receptacles and mud ring for data
ports.

  •   Provide one (1) mud ring in ceiling plenum for WAP (wireless access
point).

  •   HVAC: Building standard system on separate shared zone.

  •   Miscellaneous: 4’-0” x 16’-0” whiteboard where noted.

1.5   Typical Private Offices

  •   Doors and relites: Maple veneer solid core door and aluminum frame. Relite
with clear tempered glass, glazing film and aluminum frame. Glazing film at all
glass panels.

  •   Finishes

  •   Flooring: Carpet tile.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-21

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  •   Ceiling: Building standard suspended ceiling system.

  •   Lighting: Building standard fluorescent fixtures.

  •   Electrical: Minimum of three (3) duplex electrical wall receptacle (with
shared separate circuit for computer use and standard power), and two (2) mud
ring for data port with two (2) pull wires at each desk.

  •   HVAC: Building standard.

1.6   Open Office Area

  •   Casework: Plastic laminate counters with exposed apple-ply edgeband and
metal support base at “stand-up” counters where shown on 9th floor plan.

  •   Finishes

  •   Flooring: Carpet tile.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Accent walls: Up to two (2) colors.

  •   Ceiling: Building standard suspended ceiling system.

  •   Lighting: Building standard fluorescent fixtures.

  •   Electrical:

  •   Tenant electrified workstations: Wall mounted or floor monument electrical
feeds and telephone/data j-boxes for connection to Tenant’s workstation systems.
Include hardwire connection to power and data distribution system in cubicle
panels.

  •   Each workstation pod shall be equipped with electrical for one (1) shared
separate circuit for computer use maximum four (4) cubicles per circuit and one
standard power.

  •   HVAC: Building standard.

  •   Workstation: Furnished and installed by Tenant’s vendor.

1.7   Typical Workrooms (Including Legal File Room on 10th Floor)

  •   Casework: Premium grade built-in cabinets constructed of plastic laminate
30” deep countertops, back splash and edgeband. Base cabinets with plastic
laminate drawers, and open box shelves below. Open upper cabinets with
adjustable shelves. 4’-0” x 8’-0” plastic laminate veneer island counter with
open base cabinet below where noted.

  •   Finishes:

  •   Flooring: VCT

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.

  •   Lighting:

  •   Building standard fluorescent light fixtures.

  •   Undercabinet lighting at all upper cabinets.

  •   HVAC: Building standard.

  •   Electrical:

  •   Duplex electrical receptacle and mud ring for data cabling at 6’-0” o.c.
above countertop where shown.

  •   Copier/printers: Dedicated 20A electrical receptacle and mud ring.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-22

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1.8   Coffee Room

  •   Casework:

  •   Premium grade built-in cabinets constructed of plastic laminate 24” deep
countertops, back splash and edgeband.

  •   Base cabinets with plastic laminate drawers, hinged doors and adjustable
shelves. Upper cabinets with plastic laminate hinged doors and adjustable
shelves.

  •   Finishes:

  •   Flooring: VCT.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.

  •   Lighting:

  •   Building standard fluorescent light fixtures.

  •   Undercabinet lighting at all upper cabinets.

  •   Electrical:

  •   Minimum of three (3) duplex electrical wall receptacles above countertop
for tenant’s kitchen appliances.

  •   Provide GFI receptacles where required.

  •   Designated electrical wall receptacles at vending machines.

  •   One (1) mud ring with pull wire above countertop.

  •   Plumbing:

  •   Stainless steel deep sink, ADA approved swing spout faucet fittings with
spray nozzle.

  •   Cold water line for coffeemaker and icemaker in refrigerator.

  •   Garbage disposal.

  •   HVAC:

  •   Building standard.

  •   Exhaust fan with switch.

  •   Appliances: ADA approved standard undercounter dishwasher and refrigerator
with built-in icemaker, typical at all coffee rooms. Undercounter refrigerator
on 10th floor only. microwave oven by tenant.

1.9   Lunchroom (9th Floor)

  •   Casework:

  •   Premium grade built-in cabinets constructed of plastic laminate 24” deep
countertops, back splash and edgeband.

  •   Base cabinets with plastic laminate drawers, hinged doors and adjustable
shelves. Upper cabinets with plastic laminate hinged doors and adjustable
shelves.

  •   Base cabinets to accommodate waste and recycle bins.

  •   Finishes:

  •   Flooring: VCT.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.

  •   Lighting:

  •   Up to 16 recessed compact fluorescent downlights with glass trim ring.

  •   Undercabinet lighting at all upper cabinets.

  •   Electrical:

  •   Minimum of five (5) duplex electrical wall receptacles above countertop
for tenant’s kitchen appliances.

  •   Provide GFI receptacles where required.

  •   Designated electrical wall receptacles at Tenant’s vending machines.

  •   Two (2) mud rings in ceiling plenum.

  •   Electrical J-box and mud ring behind casework for future power and data.

  •   Plumbing:

  •   Stainless steel deep sink, ADA approved swing spout faucet fittings with
spray nozzle.

  •   Cold water line for coffeemaker and icemaker in refrigerator.

  •   Garbage disposal.

  •   HVAC:

  •   Exhaust fan with switch.

  •   Appliances: ADA approved standard undercounter dishwasher and refrigerator
with built-in icemaker. microwave oven by tenant.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-23

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1.10   Typical Storage Rooms

  •   Maple veneer solid core door and aluminum frame. Double doors where noted
on plan.

  •   Finishes:

  •   Flooring: VCT

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent light fixtures.     •   HVAC: Building standard.  
  •   Electrical: Minimum of one (1) duplex electrical wall receptacle and mud
ring for data port.

1.11   Printer Alcoves

  •   Finishes:

  •   Flooring: Carpet tile.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Electrical:
Two (2) duplex electrical wall receptacle and mud rings for data port.     •  
Lighting: Linear wall mounted fixture.

1.12   Private Phone Rooms

  •   Door: Barn-door style maple sliding door system with glass vision panel in
door slab.     •   Casework: Plastic laminate veneer countertop.     •  
Finishes

  •   Flooring: Carpet tile.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Linear wall mounted fixture.     •   Electrical: One (1) duplex electrical wall
receptacles and mud ring for data ports.     •   HVAC: Building standard.

1.13   Wellness Room (4th Floor)

  •   Door: Barn-door style maple sliding door system with glass vision panel in
door slab with privacy lock.     •   Finishes

  •   Flooring: Carpet tile.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Recessed downlights on dimmable control switch.     •   Electrical: One
(1) duplex electrical wall receptacles and mud ring for data ports.     •  
HVAC: Building standard.

1.14   Coat Closet

  •   Casework: Metal coat rod and melamine shelf.     •   Door: Maple veneer
solid core bi-pass doors.     •   Finishes:

  •   Flooring: Carpet tile.

  •   Base: 4” rubber base.

  •   Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent fixtures.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-24

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1.15   Hallway

  •   Finishes:

  •   Flooring: Carpet tile.     •   Base: 4” rubber base.     •   Wall finish:
Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Electrical:
Duplex electrical wall receptacles for vacuum cleaners and convenience outlets.

  •   Lighting:

  •   Recessed downlights with compact fluorescent lamps at 10’-0” o.c.     •  
Recessed or surface mounted low voltage downlights with MR-16 lamps at display
shelves.

  •   HVAC: Building standard.

1.16   Server Room (4th Floor)

  •   Door: Maple veneer solid core door and aluminum frame. Card reader access.
    •   Finishes

  •   Flooring: VCT     •   Base: 4” rubber base.     •   Wall finish: Paint all
wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent fixtures.     •   Electrical:

  •   Tenant shall furnish one(1) 75 KVA, 208V 3ø UPS, to be hard wired when
unit is installed during the construction phase.     •   EPO switch (separate
from Lab).

  •   HVAC: Dedicated 24/7 cooling unit with 11-12 ton capacity.     •  
Miscellaneous: Server and switch rack equipment and all low voltage cabling by
tenant.

1.17   IDF Room (9th and 10th Floors)

  •   Door: Maple veneer solid core door and aluminum frame. Card reader access.
    •   Finishes

  •   Flooring: VCT.     •   Base: 4” rubber base.     •   Wall finish: Paint
all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent fixtures.     •   Electrical:

  •   Four (4) 20A 110V circuits in each IDF room for tenant furnished 6KVA UPS
unit.     •   220v 20 amp circuit.

  •   HVAC:

  •   Assume 5-ton unit for the 10th floor IDF room.     •   No supplemental
cooling in the 9th floor IDF room.

  •   Miscellaneous: Switch equipment and all low voltage cabling by tenant.

1.18   Lab Area (4th Floor)

  •   Door: Maple veneer solid core double door and aluminum frame. Card reader
access.     •   Relites: Clear tempered glass clerestory with aluminum frame on
east wall.     •   Finishes

  •   Flooring: High-pressure laminate ESD flooring over access floor system.  
  •   Base: 4” rubber base.     •   Wall finish: Paint all wall surfaces.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-25

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  •   Ceiling:

  •   Smooth surface panels in building standard suspended ceiling system.     •
  100 to 150 square feet ceiling shall be modified with ceiling panels,
cross-tees and main tee runners omitted to expose ceiling for Tenant’s testing
purposes. Provide the max finished ceiling height in the lab and all raised
floor areas. Extend wall above ceiling at raised floor area.

  •   Lighting: Building standard fluorescent fixtures.     •   Electrical:

  •   Provide adequate power to accommodate electrical load outlined in B-4
equipment list and equipment placement plan attached herewith. EPO switch
(separate from Server Room).

  •   HVAC: Dedicated 24/7 cooling unit with adequate capacity to sufficiently
cool air-cooled systems outlined in B-4 equipment list and equipment placement
plan attached herewith. . Underfloor air handling distribution air floor panels.
    •   ALTERNATE: Provide cost to provide ceiling air handling distribution in
lieu of under floor air handling distribution.     •   Plumbing: Chilled water
loop for test systems. 50 ton load, 100 GPM at 45 degrees F.     •  
Miscellaneous: 12” raised access floor and ramp system.

1.19   Machine Shop (4th Floor)

  •   Door: Maple veneer solid core door with and aluminum frame.     •  
Finishes

  •   Flooring: VCT.     •   Base: 4” rubber base.     •   Wall finish: Paint
all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent fixtures.     •   Electrical: One (1) 208V 1ø
receptacle, one (1) 208V 3ø receptacle and (1) one 480V drop(s).     •   HVAC:
Building standard.

1.20   Engineering Storage (4th Floor)

  •   Door: Maple veneer solid core door and aluminum frame.     •   Finishes

  •   Flooring: VCT.     •   Base: 4” rubber base.     •   Wall finish: Paint
all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent fixtures.     •   Electrical: Four (4) duplex
electrical wall receptacles and mud ring for data ports.     •   HVAC: Building
standard.

1.21   Toilet/Shower Rooms

  •   Casework: Plastic laminate vanity countertop with post formed edge and
backsplash.     •   Door: Maple veneer solid core door with aluminum frame, door
closer, pull and push plate.     •   Finishes

  •   Flooring: Ceramic tile flooring and base.     •   Wall finish:

  •   Ceramic tile wainscot up to 7’-0” above finished floor.     •   Paint all
other wall surfaces.

  •   Shower/wet area:

  •   Flooring: Ceramic tile flooring and base.     •   Wall finish: Ceramic
tile wainscot up to 7’-0” above finished floor.

  •   Ceiling: Suspended ceiling system with damp rated ceiling panels.     •  
Lighting:

  •   Combination of recessed downlights and building standard fluorescent
fixtures.     •   Wall mounted fixture above vanity counter.     •   Damp rated
recessed downlights in shower/wet areas.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-26

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  •   Electrical: GFI electrical receptacles above vanity counters and in
changing area.     •   HVAC:

  •   Building standard on separate zone.     •   Exhaust fan in toilet room
area     •   Exhaust fan in shower area

  •   Plumbing:

  •   ADA shower stall: ADA compliant one-piece shower stall with fold down
seat, hand held shower head and grab bar.     •   Vanity sink: Match building
standard.     •   Vanity faucet fittings: Deck mounted sensor activated faucet.
    •   Toilet commode: Match building standard.     •   Urinal: Match building
standard.     •   Flush valve: Sensor activated flush valve.     •   Floor
drain: Flush stainless steel floor drain, round with strainer top.

  •   Washroom accessories:

  •   Stainless steel semi-recessed paper towel dispenser and waste receptacle  
  •   Stainless steel double roll toilet paper holder     •   Stainless steel
sanitary napkin receptacle     •   Stainless steel toilet seat cover dispenser  
  •   Surface mounted ADA compliant grab bars     •   Powder coated enameled
steel toilet partition with all accessories.     •   Stainless steel towel hooks
outside each shower stall.

  •   Glazing:

  •   Full width mirror x 36” high above vanity counter.     •   One (1) 6’-0”
high x 30” full length mirror in each toilet room.

  •   Athletic lockers: Powder coated steel or plastic laminate veneer lockers.

  •   Men’s lockers: Five (5) double tiered and two (2) single tier (full
height) lockers     •   Women’s locker: Three (3) double tiered and one
(1) single tier (full height) lockers

1.22   IT Build Room (4th Floor)

  •   Door: Maple veneer solid core door and aluminum frame.     •   Finishes

  •   Flooring: Static dissipative VCT.     •   Base: 4” rubber base.     •  
Wall finish: Paint all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent fixtures.     •   Electrical: 110/220V surface
mounted raceway system with electrical and data/com connectivity along all walls
except south wall at door.     •   HVAC: Building standard.

1.23   Bicycle Storage (4th Floor)

  •   Door: Oversized maple veneer solid core door and aluminum frame. Card
reader access.     •   Finishes

  •   Flooring: VCT.     •   Base: 4” rubber base.     •   Wall finish: Paint
all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent fixtures.     •   Electrical: One 1) duplex
electrical wall receptacles.     •   HVAC: Building standard.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-27

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1.24   Shipping Area (4th Floor)

  •   Door: Double maple veneer solid core door and aluminum frame. Card reader
access.     •   Finishes

  •   Flooring: VCT.     •   Base: 4” rubber base.     •   Wall finish: Paint
all wall surfaces.

  •   Ceiling: Building standard suspended ceiling system.     •   Lighting:
Building standard fluorescent fixtures.     •   Electrical:

  •   Two (2) duplex electrical wall receptacles.     •   One (1) mud ring with
pull wire.

  •   HVAC: Building standard.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-28

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2.   GENERAL REQUIREMENTS

2.1   Tenant Improvement Guidelines

  •   All work shall be new construction and comply with building standard
tenant improvement guidelines unless otherwise stated.

2.2   Codes and Permits

  •   All work shall comply with the International Building Code 2006 Seattle
Amendments, Washington State Regulations WAC 51-30 for ADA Equivalency,
Americans with Disabilities Act (ADA), Washington State Energy Code, and the
latest NFPA.

2.3   Selective Demolition

  •   Selective demolition shall include, but not be limited to, all existing
partitions, floor covering, wallcovering, casework, plumbing, mechanical,
electrical and lighting systems.

  •   Remove all abandoned low voltage cabling in ceiling plenum, if applicable.

2.4   Doors and Frames

  •   Wood doors: Solid core wood slab doors with clear finish maple veneer.
Glass vision panels at all conference/meeting room doors.

  •   Door and relite frames: Stock brushed anodized aluminum frame.

  •   Frameless glass door and relite: 1/2” clear tempered glass with brushed
stainless top and bottom channels and stainless steel door pull. Bottom rail
lockset and flush bolt with dustproof strike at entry door.

  •   Aluminum storefront sliding door system at 10th floor conference rooms:
Pacific Aluminum Co Series 3000 or similar, clear anodized finish

  •   Sliding barn doors: Solid core wood slab doors with clear finish maple
veneer and glass vision panels.

  •   Finish hardware:

  •   Building standard throughout except where noted.

  •   Privacy lock at wellness room.

  •   Card reader security access at Server room, IDF room and Lab.

  •   Door pulls at glass door as manufactured by Laurence CRL-36 stainless
steel.

2.5   Glass and Glazing

  •   1/4” clear tempered glass at all door vision panels and relites     •  
1/2” clear tempered glass at frameless pivot hinge doors.     •   3M “Fasara”
glazing film at relites. Pattern and coverage on glass panel to be determined.

  •   Lumicor panel: “True” (solid color), minimum 3/8” with stainless steel top
and bottom channel frame at signage. Stand-off installation at reception desk
screen.

2.6   Casework

  •   Casework shall be in accordance with AWI premium grade flush overlay
construction of plastic veneer finishes.

  •   Stone slab transaction counter.

  •   Shelving inside cabinets shall be melamine.

  •   Edgeband: Apple-ply at all countertops. Self edge at cabinet doors and
drawers.

  •   Cabinet hardware: US26D finish.

  •   Plastic laminate colors shall be selected from WilsonArt, Nevamar, Formica
and Pionite standard colors and patterns.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-29

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2.7   Wall Construction

  •   Full height sound partition (where noted on plan): Full height double
staggered stud sound partition: 3-5/8” UltraSteel framing studs with QuietRock
527 5/8” type “X” panels on each side for an 55 STC rating. Thermalfiber SAFB in
frame cavity.

  •   10th floor: Large conference room, 2 private offices + meeting room on SW
corner

  •   9th floor: Large conference room

  •   Typical partition: 2-1/2” 25 gauge steel studs at 24” o.c. with 5/8” type
“X” gypsum wallboard. Sound insulation in frame cavity.

  •   Gypsum wallboard system (GWB): Level 4 finish at all walls except where
noted.

2.8   Ceiling

  •   Patch Monokote in ceiling plenum where affected by demolition and new
construction as required.     •   Building standard suspended ceiling system
throughout except where noted.     •   Building standard ceiling panels at
suspended ceiling system.     •   Smooth surface Armstrong “Clean Room Mylar”
ceiling panels or equal in Lab Area.     •   Seismic bracing where ceiling
systems are affected as required per SBC 2006.     •   Ceiling clouds at 10th
floor elevator lobby, reception area and main conference room with acoustical
stretched fabric as manufactured by SnapTex, Fabri-Trak or equal. Fabric shall
be basic weave, white or off-white color.

2.9   Floorcovering

  •   Wood flooring: Gammapar Jefferson Collection engineered acrylic
impregnated wood plank flooring, Teragren “Signature Naturals” solid strip
bamboo flooring or equal.

  •   Carpet tile: Interface FLOR “Light Waves” or equal with attached cushion.
Up to three (3) colors/patterns with quarter-turned pattern installation.

  •   Base: 4” top set rubber base at all areas except where noted.

  •   Resilient flooring: 12” x 12” x 1/8 gauge vinyl composition tile (VCT) as
manufactured by Mannington “Designer Essentials”.

  •   Static Dissipative VCT: Armstrong or equal.

  •   Ceramic tile: Glazed ceramic 4” x 12” (nominal) floor tiles, 4” x 8” wall
tiles and 2” x 8” accent wall tiles as manufactured by DalTile “Modern
Dimensions” or equal.

2.10   Raised Access Floor

  •   Raised computer floor, 12” high for air flow distribution. Concrete filled
steel panels with high pressure laminate flooring, 12” pedestal assembly, air
flow panels and all accessories.

  •   Integrated ramp system.

  •   Access Floor Systems Inc or equal.

  •   Recessed floor boxes, under floor ducts, service fittings and all
components required for complete installation of raised access floor system.

2.11   Painting

  •   Paint all wall and column surfaces.     •   Colors: Up to six (6) paint
colors from light to deep tones.     •   Paint system: Two (2) coat satin latex
at all GWB wall surfaces.

2.12   Toilet Room Accessories

  •   Toilet partition compartment: Powder coated enameled steel toilet
partition as manufactured by Global Steel Products, or equal.

  •   Washroom Accessories: Stainless steel washroom accessories as manufactured
by Bobrick or match building standard.

2.13   Miscellaneous

  •   Building standard perimeter window-coverings by Owner (Landlord).

  •   Signage: Furnished and installed by Tenant.

  •   Bicycle storage racks: “Track Rack: high capacity wall mounted bicycle
rack as manufactured by Dero Bike Racks or equal.

  •   Mail sorters, (2) 120” x 48” x 15” with 80 adjustable pockets as
manufactured by Charnstrom or equal.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-30

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  •   4’-0” x 12’-0” dry erase whiteboards with aluminum trim at all conference
rooms except large conference room 10th floor.

  •   Walltalkers “Mag-Rite” 4’-0” x 12’-0” with clear satin aluminum marker
tray in large conference room on 10th floor. Provide level 5 wall finish.

  •   Ceiling recessed projection screen as manufactured by Da-Lite Corporation,
“Boardroom Electrol” 54” x 96” min screen size in the large conference rooms on
the 4th, 9th and 10th floors. Provide electrical and data box for ceiling
mounted projector and floor core below tenant’s conference table for video cable
connections.

  •   Plywood backing in wall with recessed electrical and data box for Tenant
furnished flat panel display monitors in lunchroom, reception area, conference
center lobby space and all conference rooms with six or more seating.

2.14   Appliances

  •   ADA dishwasher as manufactured by Asko D3112 or equal. Stainless steel
finish. Provide six (6) total dishwashers.

  •   Garbage disposal as manufactured by Insink-Erator “Evolution Excel” 1 HP
single phase.

  •   Dryer in Utility room, front load, electric, approx 7 cubic feet capacity
as manufactured by General Electric or equal.

  •   Refrigerators as manufactured by GE® Energy Star® 21.0 cubic foot
CleanSteel™ top-freezer refrigerator, Model#: GTL21KCWBS.

  •   Compact refrigerator as manufactured by GE® 4.3 cubic foot CleanSteel™
compact refrigerator,Model#: GMR04HASCS.

  •   All other kitchen appliances by tenant.

2.15   HVAC

  •   HVAC system with all materials, equipment and labor for complete and
operable HVAC system.

  •   Exposed sheet metal spiral distribution ducts and VAV units.

  •   System shall be air balanced per building specifications.

  •   HVAC requirements for the following area shall be designed for, but not
limited to:

  •   Typical workstation cubicle: Two (2) PC + monitor.

  •   Server room: See scope of work.

  •   Lab Area: See scope of work.

  •   Exhaust fans in toilet rooms, shower room, lunchroom, coffee areas and all
rooms indicated in scope of work. CFM size to be determined by mechanical
engineer.

2.16   Plumbing

  •   Stainless steel deep sink, approx 25” x 22”, 20 gauge, top mount, as
manufactured by Elkay, Dayton or equal.

  •   ADA approved faucet fittings with goose neck, swing spout and spray
nozzle, as manufactured by Chicago Faucets or equal.

  •   Braided steel water line to tenant’s coffeemaker and refrigerator.

  •   Lab Area: See scope of work.

  •   Toilet rooms (4th floor):

  •   Vanity sink: Building standard vanity sink.

  •   Vanity faucet fittings: Deck mounted sensor activated faucet, Sloan Optima
Plus or equal.

  •   Toilet commode: Match building standard with raised toilet seat at ADA
commode.

  •   Flush valve: Sensor activated flush valve, Sloan Optima Plus or equal.

  •   Wall mounted urinal: Match building standard hard-wired sensor activated
urinals.

  •   Shower rooms (4th floor)

  •   ADA shower stall: ADA compliant one-piece shower stall with fold down
seat, Fiber-Fab Model 38-BF with hand held shower head, grab-bar, shower curtain
rod and all accessories.

  •   Shower stall: One-piece shower stall with tempered glass door, Fiber-Fab
Model 38.

  •   Floor drain: Flush stainless steel floor drain, round with strainer top,
Zurn ZS400B or equal.

  •   Miscellaneous:

  •   Floor mop sink in 4th floor utility room

  •   Electric hot water heaters for showers and sink. Size water heaters for 4
showers per hour per stall.

           
 
  /s/ BH
 
  /s/ MB
 
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B-31

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2.17   Electrical

  •   All new receptacles shall be wall mounted, 15” above finished floor less
otherwise noted.

  •   Designated receptacles at each office and workstation with shared separate
circuit for computer use and one standard power, maximum two (2) offices/desks
per circuit.

  •   Dedicated 20A electrical receptacle at photocopiers and where noted.
Assume NEMA-5-20R receptacles.

  •   Flush poke-through floor receptacles shall be Wiremold RC-3 or surface
mounted pedestal monument receptacle with one (1) 20A electrical receptacle and
four (4) communication devices.

  •   Dedicated electrical receptacle at photocopiers and where noted.

  •   Building standard electrical cover plates.

  •   Surface mounted raceway system with electrical and data/com connectivity
as manufactured by Wiremold, Series 5400 or similar.

  •   Mud rings shall have two (2) pull wires for data drops. Low voltage
cabling by tenant.

  •   Tenant electrified workstation pods: Wall mounted or floor poke-through
electrical feeds and telephone/data j-boxes for connection to Tenant’s
workstation systems. Include hardwire connection to power and data distribution
system in cubicle panels.

  •   Each workstation pod shall be equipped with electrical for one (1) shared
separate circuit for computer use maximum four (4) users per circuit and one
standard power.

  •   Provide one (1) duplex electrical receptacle on designated circuit for up
to four (4) users per circuit, and one mud ring for data drops at each seat at
built-in counter workspaces.

2.18   Lighting

  •   Fixtures types:

  •   Building standard indirect fluorescent fixtures at suspended ceilings.

  •   Recessed downlights: Building standard recessed downlights with compact
fluorescent lamps with dimmer ballast.

  •   Recessed downlights with glass trim: Eureka 1078B with PAR20 50W lamp.

  •   Low voltage wallwasher: Recessed wallwasher downlight with MR-16 lamp and
adjustable elbow, Eureka 1030-SC with MR-16 lamp.

  •   Linear pendant fixtures (in conference room): Energie Lighting BLUemotion
“Sunny Day” T-5 lamps with Trilux shield and dimming controls.

  •   Linear LED fixture: IOLighting “Line 1.5” high output, 96” length, 65
degree, blue light at elevator lobby ceiling cloud.

  •   Backlighting: IOLighting “Line 1.5” high output, 10 degree, white light
behind Lumicor panels.

  •   Recessed step light: Eureka 10090B-SC-FRO “Mimosa” oval step light,
G4-Bipin 10W, flush mount to reception desk front face.

  •   Wall mounted linear fixtures (in private phone rooms): Lightoiler
Silhouette SJ die cast aluminum with T5 lamp.

  •   Pendant fixtures: Provide $250 material allowance per fixture.

  •   Vanity fixture: Eureka “Jag” 4618SC-F wall mounted, grid frosted glass
lens, (2) 13W compact fluorescent lamps above each vanity sink location.

  •   Occupancy and daylight sensors as per the latest Washington State Energy
Code (WSEC).

2.19   Telecommunication

  •   All data cabling and equipment associated with data services including
work from building/floor D-mark to server room shall be furnished and installed
by Tenant or Tenant’s vendor.

  •   Remove all abandoned low voltage cabling in ceiling plenum.

  •   Tenant shall have the option to select the building electrical contractor
for the low voltage scope if competitive.

2.20   Fire Protection

  •   Building standard automatic fire sprinkler system.

  •   High temp sprinkler heads with escutcheon safety cages in Lab and Server
rooms.

  •   ADA approved fire-life safety system (smoke detectors, strobes, audible
alarms, fire extinguishers, etc.) per SBC.

End of Work Letter

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

B-32

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  /s/ MB
 
    Initials

B-33

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  /s/ BH
 
  /s/ MB
 
    Initials

B-34

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B-35

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SCHEDULE B-3
ITEMS IN THE TENANT IMPROVEMENTS TO BE REMOVED UPON TERMINATION OF THE LEASE

  1)   Telephone and data cabling throughout Premises, including floor to floor
connections.     2)   Non-Building standard cooling system(s) that support 4th
Floor lab area.     3)   Raised flooring system installed in 4th Floor lab area.
    4)   Distribution portion only located on the 4th Floor of non-Building
standard electrical supply to 4th Floor lab area — Feeder Panels to remain in
Premises.

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B-36

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SCHEDULE B-4
DESCRIPTION OF SPECIAL TENANT IMPROVEMENTS
The following is a list of special tenant improvements and equipment to be used
in the Premises. The installation and use of the following throughout the Lease
Term is expressly consented to by Landlord as an exception to the limitations in
Section 13.4 of the Lease pertaining to equipment expected to draw over 2000
watts, 20 amps or 120 volts:

      LOCATION   POWER REQUIREMENTS Note: These are maximum kW values
Computer Room (Lab)
   
1 Test Vehicle (HETV)
  One 208 volt, 3 phase circuit @ 50 kW
 
  Three 208 volt, 1 phase circuits @ 12kW each*

      *   Note: Tenant may substitute one 208 volt, 3 phase circuit @ 33kW for
the 3 single phase circuits described

     
2 Baker Cabinets
  480 volts — one @ 60 kW, one @ 80kW. Possible 3rd cabinet (future)*

      *   Note: Will not operate more than two fully loaded Baker cabinets at
one time to stay within building capacity limits.

         
XDP
  480 volts @ 5kW, 100gpm chilled water loop @ 45 degrees F
5 System Racks
  208 volt, 3 phase @ 10kw each
2 System Racks
  208 volt, 1 phase @ 5kW & 10 kW respectively
1 Switch
  208 volt, 1 phase @ 5kW
2 Disk cabinets
  208 volt, 1 phase @ 15kW each
2 Hood Cabinets
  208 volt, 3 phase @ 20kW each
1 XT3 Cabinet
  208 volt, 3 phase @ 15kW
1 XT4 Cabinet
  208 volt, 3 phase @15kw
3 Single Slot Testers*
  220 volt, @ minimal kW, *with provisions for one additional tester
 
       
Server Room
       
14 Racks
  208 volt, 3 phase @ 3kW each
2 SAN
  208 volt, 3 phase @ 2kW each
Dell
  208 volt, 3 phase @ 5kW
UPS
  208 volt, 3 phase @ 75KVA*

      *   Note: This is a change from 40KVA, Cray will supply

 
       
Machine Shop
        Electrical supply drops for testing:
1 @ 480 volt, 3 phase
       
1 @ 208 volt, 1 phase
       
1 @ 208 volt, 3 phase
       
 
        Misc. equipment for testing (not used on a daily basis)
Power Supplies:
       
1 @ 240volt
       
5 @ 208volt, 1&3phase
       
2 @ 480volts each
       
Blower Fan (for testing)
  5 horsepower, 230-480 volt
VFD (for testing)
  7.5 horsepower, 480 volt Chiller (included in the initial TI’s) supplying 50
ton* chilled water loop for XDP — supplying 100 gpm chilled water @ 45 degrees
F.

      *   Note: change from 30 ton

 
       
IDF Room (10th floor)
       
UPS (Cray will supply UPS)
  220volt, 20amp circuit for 6KVA

           
 
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    Initials

 

B-37

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SCHEDULE B-5
PROJECTED SCHEDULE FOR COMPLETION OF TI WORK
Cray Computers
Estimated Construction Schedule

                          Task   Duration   Start Date (estimated)     End Date
(estimated)  
Prepare CDs
  24 days     8/11/2008       9/11/2008  
PreConstruction
  10 days     8/29/2008       9/11/2008  
Construction Drawings
  0 days     9/11/2008       9/11/2008  
Lay out
  10 days     9/12/2008       9/25/2008  
Grid
  20 days     9/19/2008       10/16/2008  
Permit
  0 days     10/9/2008       10/9/2008  
Frame
  20 days     9/26/2008       10/23/2008  
GWB
  30 days     10/17/2008       11/27/2008  
Finishes
  50 days     11/3/2008       1/9/2009  
Cover Ceilings
  15 days     12/29/2008       1/16/2009  
Inspections 9 & 10
  5 days     1/12/2009       1/16/2009  
9th & 10th floor Substantially Complete
  0 days     1/26/2009       1/26/2009  
Work Stations
  10 days     1/19/2009       1/30/2009  
Inspections
  5 days     2/2/2009       2/6/2009  
Lab Floor
  10 days     1/15/2009       1/28/2009  
Lab Equipment
  10 days     1/29/2009       2/11/2009  
Lab inspections
  5 days     2/5/2009       2/11/2009  
4th floor Substantially Complete
  0 days     2/11/2009       2/11/2009  
HVAC Design
  20 days     8/25/2008       9/19/2008  
HVAC permit
  55 days     9/22/2008       12/5/2008  
HVAC equipment
  80 days     9/8/2008       12/26/2008  
HVAC CD’s
  0 days     9/19/2008       9/19/2008  
HVAC Duct work
  60 days     9/22/2008       12/12/2008  
Set VAV’s
  10 days     12/1/2008       12/12/2008  
HVAC Cover inspection
  1 day     12/12/2008       12/12/2008  
HVAC Piping
  30 days     11/10/2008       12/19/2008  
HVAC controls
  15 days     12/1/2008       12/19/2008  
HVAC Trim
  10 days     12/15/2008       12/26/2008  
HVAC Start, test, & Balance
  15 days     12/22/2008       1/9/2009  
HVAC Final
  1 day     1/12/2009       1/12/2009  
Elec. Design
  20 days     8/25/2008       9/19/2008  
Elec. Permit
  30 days     9/22/2008       10/31/2008  
Order lights
  50 days     9/22/2008       11/28/2008  
Order panels/Breakers
  15 days     9/22/2008       10/10/2008  
Elec RI Ceiling
  23 days     9/17/2008       10/17/2008  
Elec RI Walls 9&10
  20 days     9/15/2008       10/10/2008  
Elec RI Walls 4 Lab
  20 days     10/13/2008       11/7/2008  
Light Fixtures
  22 days     11/6/2008       12/5/2008  
Elec. Trim
  15 days     12/8/2008       12/26/2008  
4th Floor Lab
  30 days     11/20/2008       12/31/2008  
Testing
  4 days     12/23/2008       12/26/2008  
Final Elec
  2 days     12/26/2008       12/29/2008  

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

B-38

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SCHEDULE B-6
ITEMIZED DESCRIPTION OF WORKING DRAWINGS
Working Drawings as used in this Exhibit B means all plans, specifications and
drawings necessary to construct the Tenant Improvements, which shall include all
construction documents, final plans and specifications ready for construction,
and mechanical, electrical, and plumbing drawings necessary to construct the
Tenant Improvements, all as determined to be mutually acceptable to Landlord and
Tenant , and which shall be based upon and, where inconsistent, supersede the
Floor Plans and Scope of Work Outline for Tenant Improvements attached as
Schedule B-2 to this Exhibit B. The Working Drawings shall include the following
elements: .

  i.   Cover Sheet: Sheet containing project contacts, drawing index, code
information, legal description, vicinity map, general notes and exiting plan(s).
    ii.   Floor plans: Fully dimensioned floor plans with partition layout, door
and relite call-outs, electrical and data/com placements, plumbing locations,
occupancy load information, drawing legend and special call-outs for HVAC and
structural information as required.     iii.   Reflected ceiling plan: Ceiling
plan with lighting layout, light switch locations, dimensioned ceiling cloud
information, and fixture schedule. Lighting energy calculations are not required
for the architectural set and shall be included in the electrical plans.     iv.
  Finish placement plan: Floor plan showing call-outs for all room finishes,
room finish schedule and special notes required for handling, installation
and/or cleaning of specific products as required.     v.   Furniture placement
plan: Furniture placement plan as coordinated with tenant’s furniture vendor.
Critical electrical floor poke throughs and feeds to be identified in the
drawings.     vi.   Casework: Elevations, sections and details for all built-in
casework.     vii.   Doors: Door elevations, details and hardware schedules for
all doors, frames, relites and special openings.     viii.   Details:
Miscellaneous wall sections, ceiling bracing details and other drawings required
to illustrate the construction of the project.     ix.   Outline specifications:
Specifications shall include the scope of work outline for tenant improvements,
instructions to bidders and special conditions incorporating the AIA standard
form of general conditions.     x.   Structural: Drawings shall be prepared by
the Landlord’s structural engineer, as needed, indicating the extent of
structural modifications for the Tenant Improvements.     xi.   Mechanical:
Drawings shall be prepared through the Landlord’s mechanical subcontractor
indicating, at a minimum, performance criteria for building systems, and
occupancy and equipment loads for all areas. Landlord and Tenant shall cooperate
in facilitating the preparation of such drawings by a mechanical engineer
through Landlord’s mechanical subcontractor for the Project as amended from time
to time, indicating plumbing and HVAC requirements clearly indicating all waste,
vent and water requirements, locations and connections to stub-outs located at
the Building core, and clearly indicating the basic system, modifications to the
basic system, if required, including any special cooling or stand-alone system,
special ventilation systems, and supply air diffusers, return air grilles and
space temperature sensors required due to the Tenant Improvements, and
particularly those requirements called out in Schedule B-4 to this Exhibit B.
Shop drawings and submittals are required for the Landlord review/record.
As-built drawings required for all construction and MEP/FP in ACAD format
compatible with Landlord software.     xii.   Electrical: Drawings shall be
prepared through the Landlord’s electrical subcontractor indicating, at a
minimum, performance criteria for building systems, and electrical equipment
loads for all areas for use by electrical contractors. Landlord and Tenant shall
cooperate in facilitating the preparation of such drawings prepared an
electrical engineer through Landlord’s electrical subcontractor for the Project
as amended from time to time, indicating circuiting, panels and electrical load
capacities at the electrical closets on each floor in the Premises required by
Tenant, modifications to the building systems, requirements and connection of
back-up power and uninterruptible power services (UPS).

Landlord and Tenant shall sign the Working Drawings indicating their approval
thereof. The Working Drawings shall be prepared using the CAD system.
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B-39

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EXHIBIT C – COMMENCEMENT DATE MEMORANDUM
attached to and made a part of the Lease bearing the
Lease Reference Date of August 11, 2008 between
900 FOURTH AVENUE PROPERTY LLC, a Delaware limited liability company, as
Landlord and
CRAY INC., a Washington corporation, as Tenant
COMMENCEMENT DATE MEMORANDUM
THIS MEMORANDUM, made as of  _____, 20  _____, by and between 900 FOURTH AVENUE
PROPERTY LLC, a Delaware limited liability company (“Landlord”) and CRAY INC., a
Washington corporation (“Tenant”).
Recitals:

A.   Landlord and Tenant are parties to that certain Lease, dated for reference
August 11, 2008 (the “Lease”) for certain premises (the “Premises”) consisting
of approximately 53,971 rentable square feet at the building commonly known as
901 Fifth Avenue, Seattle, Washington.   B.   Tenant is in possession of the
Premises and the Term of the Lease has commenced.

C.   Landlord and Tenant desire to enter into this Memorandum confirming the
Commencement Date, the Termination Date and other matters under the Lease.      
NOW, THEREFORE, Landlord and Tenant agree as follows:

  1.   The actual Commencement Date is  _____.     2.   The actual Termination
Date is  _____.     3.   The schedule of the Annual Rent and the Monthly
Installment of Rent set forth on the Reference Pages is deleted in its entirety,
and the following is substituted therefor:

[insert rent schedule]

  4.   Capitalized terms not defined herein shall have the same meaning as set
forth in the Lease.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year first above written.

                  LANDLORD:   TENANT:    
 
                900 FOURTH AVENUE PROPERTY LLC,   CRAY INC.,     a Delaware
limited liability company   a Washington corporation    
 
               
By:
  RREEF Management Company, a Delaware            
 
  corporation, its Authorized Agent            
 
               
By:
  DO NOT SIGN   By:   DO NOT SIGN    
 
               
Name:
      Name:        
 
 
 
     
 
   
Title:
      Title:        
 
 
 
     
 
   
Dated:
      Dated:        
 
               

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

C-1

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EXHIBIT D – RULES AND REGULATIONS
attached to and made a part of the Lease bearing the
Lease Reference Date of August 11, 2008 between
900 FOURTH AVENUE PROPERTY LLC, a Delaware limited liability company, as
Landlord and
CRAY INC., a Washington corporation, as Tenant
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside or inside of the Building without the
prior written consent of the Landlord. Landlord shall have the right to remove,
at Tenant’s expense and without notice, any sign installed or displayed in
violation of this rule. All approved signs or lettering on doors and walls shall
be printed, painted, affixed or inscribed at Tenant’s expense by a vendor
designated or approved by Landlord. In addition, Landlord reserves the right to
change from time to time the format of the signs or lettering and to require
previously approved signs or lettering to be appropriately altered.
2. If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises, Tenant shall immediately discontinue such use. No awning shall be
permitted on any part of the Premises. Tenant shall not place anything or allow
anything to be placed against or near any glass partitions or doors or windows
which may appear unsightly, in the opinion of Landlord, from outside the
Premises.
3. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances,
elevators, or stairways of the Building. No tenant and no employee or invitee of
any tenant shall go upon the roof of the Building.
4. Any directory of the Building, if provided, will be exclusively for the
display of the name and location of tenants only and Landlord reserves the right
to exclude any other names. Landlord reserves the right to charge for Tenant’s
directory listing.
5. All cleaning and janitorial services for the Building and the Premises shall
be provided exclusively through Landlord. Tenant shall not cause any unnecessary
labor by carelessness or indifference to the good order and cleanliness of the
Premises. Landlord shall not in any way be responsible to any Tenant for any
loss of property on the Premises, however occurring, or for any damage to any
Tenant’s property by the janitor or any other employee or any other person.
6. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed. No
foreign substance of any kind whatsoever shall be thrown into any of them, and
the expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the Tenant who, or whose employees or invitees,
shall have caused it.
7. Tenant shall store all its trash and garbage within its Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal.
All garbage and refuse disposal shall be made in accordance with directions
issued from time to time by Landlord. Tenant will comply with any and all
recycling procedures designated by Landlord.
8. Landlord will furnish Tenant two (2) keys free of charge to each door in the
Premises that has a passage way lock. Landlord may charge Tenant a reasonable
amount for any additional keys, and Tenant shall not make or have made
additional keys on its own. Tenant shall not alter any lock or install a new or
additional lock or bolt on any door of its Premises. Tenant, upon the
termination of its tenancy, shall deliver to Landlord the keys of all doors
which have been furnished to Tenant, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.
9. If Tenant requires telephone, data, burglar alarm or similar service, the
cost of purchasing, installing and maintaining such service shall be borne
solely by Tenant. No boring or cutting for wires will be allowed without the
prior written consent of Landlord.
10. No equipment, materials, furniture, packages, bulk supplies, merchandise or
other property will be received in the Building or carried in the elevators
except between such hours and in such elevators as may be designated by
Landlord. The persons employed to move such equipment or materials in or out of
the Building must be acceptable to Landlord.
11. Tenant shall not place a load upon any floor which exceeds the load per
square foot which such floor was designed to carry and which is allowed by law.
Heavy objects shall stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight. Business machines and mechanical
equipment belonging to Tenant which cause noise or vibration that may be
transmitted to the structure of the Building or to any space in the Building to
such a degree as to be objectionable to Landlord or to any tenants shall be
placed and maintained by Tenant, at Tenant’s expense, on vibration eliminators
or other devices sufficient to eliminate the noise or vibration. Landlord will
not be responsible for loss of or damage to any such equipment or other property
from any cause, and all damage done to the Building by maintaining or moving
such equipment or other property shall be repaired at the expense of Tenant.

           
 
  /s/ BH
 
  /s/ MB
 
    Initials

 

D-1

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12. Landlord shall in all cases retain the right to control and prevent access
to the Building of all persons whose presence in the judgment of Landlord would
be prejudicial to the safety, character, reputation or interests of the Building
and its tenants, provided that nothing contained in this rule shall be construed
to prevent such access to persons with whom any tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal
activities. Landlord reserves the right to exclude from the Building between the
hours of 6 p.m. and 7 a.m. the following day, or such other hours as may be
established from time to time by Landlord, and on Sundays and legal holidays,
any person unless that person is known to the person or employee in charge of
the Building and has a pass or is properly identified. Tenant shall be
responsible for all persons for whom it requests passes and shall be liable to
Landlord for all acts of such persons. Landlord shall not be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person.
13. Tenant shall not use any method of heating or air conditioning other than
that supplied or approved in writing by Landlord.
14. Tenant shall not waste electricity, water or air conditioning. Tenant shall
keep corridor doors closed. Tenant shall close and lock the doors of its
Premises and entirely shut off all water faucets or other water apparatus and
electricity, gas or air outlets before Tenant and its employees leave the
Premises. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or by Landlord for noncompliance with
this rule.
15. Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or other device on the roof or exterior walls of the Building
without Landlord’s prior written consent, which consent may be withheld in
Landlord’s sole discretion, and which consent may in any event be conditioned
upon Tenant’s execution of Landlord’s standard form of license agreement. Tenant
shall be responsible for any interference caused by such installation.
16. Tenant shall not mark, drive nails, screw or drill into the partitions,
woodwork, plaster, or drywall (except for pictures, tackboards and similar
office uses) or in any way deface the Premises. Tenant shall not cut or bore
holes for wires. Tenant shall not affix any floor covering to the floor of the
Premises in any manner except as approved by Landlord. Tenant shall repair any
damage resulting from noncompliance with this rule.
17. Tenant shall not install, maintain or operate upon the Premises any vending
machine without Landlord’s prior written consent, except that Tenant may install
food and drink vending machines solely for the convenience of its employees.
18. No cooking shall be done or permitted by any tenant on the Premises, except
that Underwriters’ Laboratory approved microwave ovens or equipment for brewing
coffee, tea, hot chocolate and similar beverages shall be permitted provided
that such equipment and use is in accordance with all applicable Regulations.
19. Tenant shall not use in any space or in the public halls of the Building any
hand trucks except those equipped with the rubber tires and side guards or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building.
20. Tenant shall not permit any motor vehicles to be washed or mechanical work
or maintenance of motor vehicles to be performed in any parking lot.

           
 
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21. Tenant shall not use the name of the Building or any photograph or likeness
of the Building in connection with or in promoting or advertising Tenant’s
business, except that Tenant may include the Building name in Tenant’s address.
Landlord shall have the right, exercisable without notice and without liability
to any tenant, to change the name and address of the Building.
22. Tenant requests for services must be submitted to the Building office by an
authorized individual. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special instruction from
Landlord, and no employee of Landlord will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.
23. Tenant shall not permit smoking or carrying of lighted cigarettes or cigars
other than in areas designated by Landlord as smoking areas.
24. Canvassing, soliciting, distribution of handbills or any other written
material in the Building is prohibited and each tenant shall cooperate to
prevent the same. No tenant shall solicit business from other tenants or permit
the sale of any good or merchandise in the Building without the written consent
of Landlord.
25. Tenant shall not permit any animals other than service animals, e.g.
seeing-eye dogs, to be brought or kept in or about the Premises or any common
area of the Building.
26. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of any premises in the Building. Landlord
may waive any one or more of these Rules and Regulations for the benefit of any
particular tenant or tenants, but no such waiver by Landlord shall be construed
as a waiver of such Rules and Regulations in favor of any other tenant or
tenants, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building.
27. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety and
security, for care and cleanliness of the Building, and for the preservation of
good order in and about the Building. Tenant agrees to abide by all such rules
and regulations herein stated and any additional rules and regulations which are
adopted. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant’s employees, agents, clients, customers, invitees and guests.
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EXHIBIT E – EARLY POSSESSION AGREEMENT
attached to and made a part of the Lease bearing the
Lease Reference Date of August 11, 2008 between
900 FOURTH AVENUE PROPERTY LLC, a Delaware limited liability company, as
Landlord and
CRAY INC., a Washington corporation, as Tenant
EARLY POSSESSION AGREEMENT
Reference is made to that Lease dated August 11, 2008, between 900 FOURTH AVENUE
PROPERTY LLC, a Delaware limited liability company (“Landlord”) and CRAY INC., a
Washington corporation (“Tenant”), for the premises located at 901 Fifth Avenue,
Seattle, Washington.
It is hereby agreed that, notwithstanding anything to the contrary contained in
the Lease but subject to the terms of Section 2.3 of the Lease, Tenant may
occupy the Premises on                     . The first Monthly Installment of
Rent is due on                     .
Landlord and Tenant agree that all the terms and conditions of the above
referenced Lease are in full force and effect as of the date of Tenant’s
possession of the Premises prior to the Commencement Date pursuant to
Section 2.3 other than the payment of rent.

                  LANDLORD:   TENANT:    
 
                900 FOURTH AVENUE PROPERTY LLC,   CRAY INC.,     a Delaware
limited liability company   a Washington corporation    
 
               
By:
  RREEF Management Company, a            
 
  Delaware corporation, its Authorized Agent            
 
               
By:
      By:        
 
 
 
     
 
   
Name:
  DO NOT SIGN   Name:   DO NOT SIGN    
 
 
 
     
 
   
Title:
      Title:        
 
 
 
     
 
   
Dated:
      Dated:        
 
               

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EXHIBIT F – SAMPLE STATEMENT OF EXPENSES
attached to and made a part of the Lease bearing the
Lease Reference Date of August 11, 2008 between
900 FOURTH AVENUE PROPERTY LLC, a Delaware limited liability company, as
Landlord and
CRAY INC., a Washington corporation, as Tenant
558,607
901 Fifth Avenue

                      2008             Budget     PSF  
INSURANCE
               
TAXES
               
ELECTRICITY
               
GAS AND OIL
               
WATER AND SEWER
               
ELECTRICAL
               
PLUMBING
               
HVAC
               
ENGINEERING
               
ELEVATOR
               
JANITORIAL
               
SECURITY & FLS
               
GENERAL R&M
               
LANDSCAPING EXPENSES
               
PARKING
               
ADMINISTRATION
                 
TOTAL OPERATING EXPENSES
               
 
           

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