Exhibit 10.18


 


OFFICE LEASE


 


520 PIKE
TOWER


 


 


WITH


 


 


EQUATOR TECHNOLOGIES, INC.


 


 


SUITE: 900


 


 


DATED: April 12, 2001


 





















 


Table Of Contents


 


	
  ARTICLE 1:

  	
   

  	
  BASIC
  PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2:

  	
   

  	
  PREMISES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3:

  	
   

  	
  TERM AND COMMENCEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4:

  	
   

  	
  BASE RENT AND ADDITIONAL
  RENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5:

  	
   

  	
  QUIET ENJOYMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6:

  	
   

  	
  UTILITIES AND SERVICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7:

  	
   

  	
  USE, COMPLIANCE WITH LAWS,
  AND RULES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8:

  	
   

  	
  MAINTENANCE
  AND REPAIRS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9:

  	
   

  	
  ALTERATIONS AND LIENS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10:

  	
   

  	
  INSURANCE AND WAIVER OF
  CLAIMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11:

  	
   

  	
  CASUALTY DAMAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12:

  	
   

  	
  CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13:

  	
   

  	
  ASSIGNMENT AND SUBLETTING

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14:

  	
   

  	
  PERSONAL PROPERTY, RENT AND
  OTHER TAXES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15:

  	
   

  	
  LANDLORD’S REMEDIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 16:

  	
   

  	
  SECURITY DEPOSIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17:

  	
   

  	
  ATTORNEYS’ FEES, JURY TRIAL,
  COUNTERCLAIMS AND VENUE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 18:

  	
   

  	
  SUBORDINATION, ATTORNMENT
  AND LENDER PROTECTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 19:

  	
   

  	
  ESTOPPEL CERTIFICATES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 20:

  	
   

  	
  RIGHTS RESERVED BY LANDLORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 21:

  	
   

  	
  LANDLORD’S RIGHT TO CURE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 22:

  	
   

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 23:

  	
   

  	
  RETURN OF POSSESSION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 24:

  	
   

  	
  HOLDING OVER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 25:

  	
   

  	
  NOTICES

  	
   

  



 


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  ARTICLE 26:

  	
   

  	
  REAL ESTATE BROKERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 27:

  	
   

  	
  NO WAIVER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 28:

  	
   

  	
  SAFETY AND SECURITY DEVICES,
  SERVICES AND PROGRAMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 29:

  	
   

  	
  TELECOMMUNICATION LINES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 30:

  	
   

  	
  HAZARDOUS
  MATERIALS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 31:

  	
   

  	
  DISABILITIES ACTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 32:

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 33:

  	
   

  	
  OFFER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 34:

  	
   

  	
  YEAR 2000
  PERFORMANCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 35:

  	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 36:

  	
   

  	
  ENTIRE
  AGREEMENT

  	
   

  



 


	
  EXHIBITS/RIDERS

  	
   

  
	
  1.M

  	
   

  	
   

  	
   

  
				



 


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OFFICE LEASE


 


THIS OFFICE LEASE
(“Lease”) is made and entered into as of the 12th day of April,
2001, by and between PIKE STREET DELAWARE, INC. (“Landlord”), a Delaware
corporation, and EQUATOR TECHNOLOGIES, INC. (“Tenant”), a California
corporation.


 


WITNESSETH:


 


ARTICLE 1:
BASIC PROVISIONS


 


This Article contains the basic lease provisions between Landlord
and Tenant.


 


	
  A.
  Building:

  	
   

  	
  520
  Pike Tower, located at 520 Pike Street, Seattle, Washington (the “Property”,
  as further described in Article 32 and Exhibit A-1).

  
	
   

  	
   

  	
   

  
	
  B.
  Premises:

  	
   

  	
  Suite 900
  in the Building as outlined or cross-hatched on Exhibit A-2.

  
	
   

  	
   

  	
   

  
	
  C.
  Commencement Date:

  	
   

  	
  October 1,
  2001 subject to Article 3.

  
	
   

  	
   

  	
   

  
	
  D. Expiration
  Date:

  	
   

  	
  September 30,
  2006 subject to Article 3.

  
	
   

  	
   

  	
   

  
	
  E.
  Rentable Area:

  	
   

  	
  The
  rentable area of the Premises shall be deemed 16,500 square feet, and the
  rentable area of the Property shall be deemed 362,690 square feet, for
  purposes of this Lease, subject to Article 32.

  
	
   

  	
   

  	
   

  
	
  F.
  Tenant’s Share:

  	
   

  	
  Four
  point five five percent (4.55%), subject to Articles 4 and 32.

  
	
   

  	
   

  	
   

  
	
  G.
  Base Rent:

  	
   

  	
  $48,125.00
  per month from the Commencement Date through September 30, 2002, and

  $49,500.00 per month from October 1, 2002 through September 30,
  2003, and

  $50,875.00 per month from October 1, 2003 through September 30,
  2004, and

  $52,250.00 per month from October 1, 2004 through September 30,
  2005, and

  $53,625.00 per month thereafter through the Expiration Date, as further
  described in Article 4.

  
	
   

  	
   

  	
   

  
	
  H.
  Additional Rent:

  	
   

  	
  Tenant
  shall pay Tenant’s Share of Taxes and Expenses in excess of the amounts
  respectively for the years 2001 (“Base Tax Year”) and 2001 (“Base Expense
  Year”), as further described in Article 4.

  
	
   

  	
   

  	
   

  
	
  I.
  Permitted Use:

  	
   

  	
  Executive
  and administrative offices, subject to Article 7. 

  
	
   

  	
   

  	
   

  
	
  J. Security
  Deposit:

  	
   

  	
  $59,000.00,
  which shall be subject to Article 16.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRIOR
  LEASE BETWEEN THE PARTIES:   Landlord, as successor in interest to
  Sixth & Pike Associates, L.P., and Tenant are parties to a lease for
  the Premises dated September 13, 1996 which lease was modified by the
  Lease Termination Agreement between the parties dated July 17, 2000 (the
  “Prior Lease”). Upon the Commencement Date herein, this Lease shall supercede
  the Prior Lease and provided Tenant is not in default under the Prior Lease,
  the security deposit shall be applied toward the Security Deposit required
  herein.

  
	
   

  	
   

  	
   

  
	
  K.
  Broker (if any):

  	
   

  	
  Washington
  Partners, Inc. who shall be paid by Landlord, subject to Article 26.

  
	
   

  	
   

  	
   

  
	
  L.
  Guarantor(s):

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  M.
  Riders/Exhibits:

  	
   

  	
  In
  addition to Exhibit A-1 (Property), Exhibit A-2 (Premises) and
  Rider One (Rules), this Lease includes: Work Agreement and Parking Agreement.

  



 


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  N. Landlord’s Notice Address (subject to
  Article 25):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o
  Tower Realty Management Corporation

  520 Pike Street - Office of the Building

  Seattle, Washington 98101

  Attention: Property Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o
  Tower Realty Management Corporation

  255 Shoreline Drive, Suite 600

  Redwood City, California 94065

  Attention: Asset Manager

  
	
   

  	
   

  	
   

  
	
  O.
  Tenant’s Notice Address (subject to Article 25):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Equator
  Technologies, Inc.

  520 Pike Street, Suite 900

  Seattle, Washington 98101

  Attention: Office Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Equator
  Technologies, Inc.

  1300 Whit Oaks Road

  Campbell, CA 95008

  Attention: Facilities/Human Resources Director

  
	
   

  	
   

  	
   

  
	
  P.
  Rent Payments:

  	
   

  	
  Rent
  shall be paid to “Pike Street Delaware, Inc.” at 75 Remittance Drive,
  Suite 1118, Chicago, Illinois 60675-1118 or such other parties and
  addresses as to which Landlord shall provide advance notice.

  



 


The foregoing
provisions shall be interpreted and applied in accordance with the other
provisions of this Lease. The terms of this Article, and the terms defined in Article 32
and other Articles, shall have the meanings specified therefor when used as
capitalized terms in other provisions of this Lease or related documentation
(except as expressly provided to the contrary therein).


 


ARTICLE 2: PREMISES


 


Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the Premises subject to
the provisions herein contained. Tenant has inspected the Premises (and
portions of the Property, Systems and Equipment providing access to or serving
the Premises) or has had an opportunity to do so, and agrees to accept the same
“as is” without any agreements, representations, understandings or obligations
on the part of Landlord to perform any alterations, repairs, installations or
improvements unless expressly provided under this Lease.


 


ARTICLE 3: TERM AND
COMMENCEMENT


 


A.            Term and Confirmation.
  The term (“Term”) of this Lease shall
commence on the Commencement Date and
end on the Expiration Date, unless sooner terminated as provided herein, subject to adjustment as provided
below and the other provisions hereof. If the Commencement Date is advanced or
postponed as provided below, the Expiration Date set forth in Article 1
shall not be changed, unless Landlord so elects by notice to Tenant. Tenant
shall execute a confirmation of the Commencement Date and other matters in such
form as Landlord may reasonably request within ten (10) days after
requested; any failure to respond within such time shall be deemed an
acceptance of the matters as set forth in Landlord’s confirmation. If Tenant
disagrees with Landlord’s adjustment of the Commencement Date, Tenant shall pay
Rent and perform all other obligations commencing on the date determined by
Landlord, subject to refund or credit when the matter is resolved.


 


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B.            Early Commencement.
  The Commencement Date, Rent and Tenant’s
other obligations shall be advanced to such earlier date as: (i) Landlord
substantially completes any improvements to the Premises required under this
Lease to an extent that Tenant is able to occupy the Premises, and Landlord
delivers possession thereof, or (ii) Tenant, with Landlord’s written
permission, otherwise commences occupying the Premises. If either such events
occurs with respect to a portion of the Premises, the Commencement Date, Rent
and Tenant’s other obligations shall be so advanced with respect to such
portion (and fairly prorated based on the rentable square footage involved).
During any period that Tenant shall be permitted to enter the Premises prior to
the Commencement Date other than to occupy the same (e.g., to perform
alterations or improvements), Tenant shall comply with all terms and provisions
of this Lease, except those provisions requiring the payment of Base Rent.
Landlord shall permit early entry, so long as the Premises are legally
available, Landlord has completed any work required under this Lease, and
Tenant is in compliance with the other provisions of this Lease, including the
insurance requirements under Article 10.


 


C.            Commencement Delays.
  The Commencement Date, Rent and Tenant’s
other obligations shall be postponed to the extent Tenant is unable to occupy
the Premises because Landlord fails: (i) to substantially complete any
improvements to the Premises required to be performed by Landlord under this
Lease, or (ii) to deliver possession of the Premises for any other reason,
including holding over by prior occupants, except to the extent that Tenant,
its contractors, agents or employees in any way contribute to either such
failures. If either such event occurs with respect to a portion of the
Premises, the Commencement Date, Rent and Tenant’s other obligations shall be
so postponed with respect to such portion (and fairly prorated based on the
rentable square footage involved). If Landlord so fails for a ninety (90) day
initial grace period, Tenant shall have the right to terminate this Lease by
notice within ten (10) days thereafter, subject to Landlord’s right to
cure as provided in Article 21. Any such delay in the Commencement Date
shall not subject Landlord to liability for loss or damage resulting therefrom,
and Tenant’s sole recourse with respect thereto shall be the postponement of
Rent and other obligations and right to terminate this Lease described herein.


 


ARTICLE 4: BASE RENT AND
ADDITIONAL RENT


 


A.            Base Rent.  Tenant shall pay Landlord the monthly Base
Rent set forth in Article 1 in advance on or before the first day of each
calendar month during the Term; provided, Tenant shall pay Base Rent for the
first full calendar month for which Base Rent shall be due (and any initial
partial month) when Tenant executes this Lease.


 


B.            Taxes and Expenses.
 Tenant shall pay Landlord Tenant’s Share
of Taxes and Expenses in excess of the amounts of Taxes and Expenses
respectively for the Base Tax Year and Base Expense Year in the manner
described below. The foregoing capitalized terms shall have the meanings
specified therefor in Articles 1 and 32.


 


C.            Payments.  Tenant
shall pay such amounts as follows:


 


(i)            Landlord may reasonably estimate in
advance the amounts Tenant shall owe for Taxes and Expenses for any full or
partial calendar year of the Term. In such event, Tenant shall pay such
estimated amounts, on a monthly basis, on or before the first day of each
calendar month, together with Tenant’s payment of Base Rent. Such estimate may
be reasonably adjusted from time to time by Landlord, including adjustments to
reflect the final Tax bills each year.


 


(ii)           Within 120 days after the end of each
calendar year, or as soon thereafter as practicable, Landlord shall provide a
statement (the “Statement”) to Tenant showing: (a) the amount of actual
Taxes and Expenses for such calendar year, with a listing of amounts for major
categories of Expenses, (b) any amount paid by Tenant towards Taxes and
Expenses during such calendar year on an estimated basis, and (c) any
revised estimate of Tenant’s obligations for Taxes and Expenses for the current
calendar year.


 


(iii)          If the Statement shows that Tenant’s
estimated payments were less than Tenant’s actual obligations for Taxes and
Expenses for such year, Tenant shall pay the difference within ten (10) days
after Landlord sends the Statement.


 


(iv)          If the Statement shows an increase in
Tenant’s estimated payments for the current calendar year, Tenant shall: (a) pay
the difference between the new and former estimates


 


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for
the period from January 1 of the current calendar year through the month
in which the Statement is sent within ten (10) days after Landlord sends
the Statement, and (b) thereafter pay the new estimated amount until
Landlord further revises such estimated amount.


 


(v)           If the Statement shows that Tenant’s
estimated payments exceeded Tenant’s actual obligations for Taxes and Expenses,
Landlord shall credit the difference against payment of Rent next due. If the
Term shall have expired and no further Rent shall be due, Landlord shall
provide a refund of such difference at the time Landlord sends the Statement.


 


(vi)          Landlord reserves the right to
reasonably change, from time to time, the manner or timing of Tenant’s payments
for Taxes and Expenses. In lieu of providing one Statement covering all such
items, Landlord may provide separate statements, at the same or different
times, including separate statements for Taxes after bills are received.


 


(vii)         Tenant acknowledges that Landlord’s
ability to budget and incur expenses depends on the finality of such Statement,
and accordingly agrees that time is of the essence of this Paragraph. If Tenant
takes exception to any matter contained in the Statement as provided herein,
Tenant shall notify Landlord of such exception in writing not later than thirty
(30) days following Tenant’s receipt of such statement, and Landlord shall
refer the matter to an independent certified public accountant, whose
certification as to the proper amount shall be final and conclusive as between
Landlord and Tenant. Tenant shall promptly pay the cost of such certification unless
such certification determines that Tenant was overbilled by more than 5%.
Pending resolution of any such exceptions in the foregoing manner, Tenant shall
continue paying Tenant’s Share of Taxes and Expenses in the amounts determined
by Landlord, subject to adjustment after any such exceptions are so resolved.
If such certification determines that Tenant was overbilled, then Tenant shall
receive a credit for the amount of such overbilling against payments of Rent
next due.


 


D.            Fiscal Years and Tax Years.   If
Landlord now or hereafter uses a non-calendar fiscal year: (i) all references
to calendar years herein shall refer to such fiscal years, (ii) all references
to January 1 and December 31 herein shall refer, respectively, to the
first and last days of such fiscal years as the context requires, and (iii) if
Landlord changes fiscal years, Landlord shall make appropriate prorations such
that Tenant’s obligations hereunder are not materially adversely affected
thereby. Subject to Paragraph E below, Landlord shall include in Taxes each
year hereunder: (a) in general, the amounts levied, assessed or imposed
for such year, whether paid or payable in another year, (b) for personal
property taxes, the amounts paid during such year, and (c) for Taxes paid
in installments over more than one year, the amounts paid each year, and any
interest thereon. If any taxing authority uses a fiscal year other than a calendar
year, Landlord may elect from time to time, consistent with sound accounting
and management practices, to require payments by Tenant based on: (x) amounts
paid or payable during each calendar year without regard to such fiscal years,
(y) amounts paid or payable during each calendar year, averaging the bills for
each calendar year based on the number of days or months of such calendar year
included in each fiscal tax year, or (z) amounts paid or payable for or during
each fiscal tax year.


 


E.             Tax Refunds, Protest Costs, and
Expense Adjustments For Prior Years.   Landlord
shall each year: (i) credit against Taxes any refunds received during such
year, (ii) include in Taxes any additional amount paid during such year,
involving an adjustment to Taxes for a prior year, due to error by the taxing
authority, supplemental assessment, or other reason, (iii) include, in
either Taxes or Expenses, any fees for attorneys, consultants and experts, and
other costs paid during such year in attempting to protest, appeal or otherwise
seek to reduce or minimize Taxes, whether or not successful, (iv) credit
against Expenses the cost of any item previously included in Expenses, to the
extent that Landlord receives reimbursement from insurance proceeds or a third
party during such year (excluding tenant payments for Taxes and Expenses), and (v) make
any other appropriate changes to reflect adjustments to Taxes or Expenses for
prior years, regardless of whether Landlord uses an accrual system of
accounting for other purposes.


 


F.             Grossing Up.   If the
Property is not at least 95% occupied during all or a portion of any calendar
year, Landlord may, in accordance with sound accounting and management practices,
determine the amount of variable Taxes and Expenses (i.e. those items which
vary according to occupancy levels) that would have been paid had the Property
been at least 95% occupied, and the amount so determined shall be deemed to
have been the amount of Taxes and Expenses for such year. If Landlord is not
furnishing any particular utility or service (the cost of which, if performed
by Landlord, would be included in Expenses) to a tenant during any period, Landlord
may for such period: (i) adjust Expenses to reflect the additional amount
that would reasonably have been incurred during such period had Landlord
furnished such utility or service to


 


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such tenant, or (ii) exclude the rentable area of such tenant from
the rentable area of the Property in computing Tenant’s Share of the component
of Expenses for such utility or service.


 


G.            Tenant’s Share Adjustments.   If the Property or any development of which it
is a part, shall contain non-office uses during any period, Landlord shall have
the right to determine, in accordance with sound accounting and management
practices, Tenant’s Share of Taxes and Expenses for only the office portion of
the Property or of such development; in such event, Tenant’s Share shall be
based on the ratio of the rentable area of the Premises to the rentable area of
such office portion for such period. Tenant’s Share shall be subject to such
other adjustments for such periods as may be applicable pursuant to Paragraph
E, above, and pursuant to the definition of Tenant’s Share in Article 32.


 


H.            Prorations.   If the Term commences on a day other than the
first day of a calendar month or ends on a day other than the last day of a
calendar month, the Base Rent and any other amounts payable on a monthly basis
shall be prorated on a per diem basis for such partial calendar months. If the
Base Rent is scheduled to increase under Article 1 other than on the first
day of a calendar month, the amount for such month shall be prorated on a per
diem basis to reflect the number of days of such month at the then current and
increased rates, respectively. If the Term commences other than on January 1,
or ends other than on December 31, Tenant’s obligations to pay amounts
towards Taxes and Expenses for such first or final calendar years shall be
prorated on a per diem basis to reflect the portion of such years included in
the Term.


 


I.              Payments After Lease Term Ends.   Tenant’s obligations to pay Taxes and Expenses (or any other amounts) accruing
during, or relating to, the period prior to expiration or earlier termination
of this Lease, shall survive such expiration or termination. Landlord may
reasonably estimate all or any of such obligations within a reasonable time
before, or anytime after, such expiration or termination. Tenant shall pay the
full amount of such estimate, and any additional amount due after the actual
amounts are determined, in each case within ten (10) days after Landlord
sends a statement therefor. If the actual amount is less than the amount Tenant
pays as an estimate, Landlord shall refund the difference within thirty (30)
days after such determination is made.


 


J.             Landlord’s Accounting Practices and
Records.   Landlord
shall maintain records respecting Taxes and Expenses and determine the same in
accordance with sound accounting and management practices. Subject to the other
provisions of this Article, Landlord may from time to time use a full accrual
system of accounting, or a modified cash basis of accounting with appropriate
accrual adjustments to ensure that each year includes substantially the same
major recurring items. Unless Tenant takes exception by notice to Landlord
within thirty (30) days after Landlord provides any Statement to Tenant, such
Statement shall be considered final and binding on Tenant (except as to
additional Expenses or Taxes not then known or omitted by error). If Tenant
takes exception by notice within such time, Landlord may seek certification
from Landlord’s independent certified public accountant as to the proper amount
of Taxes and Expenses. In such case: (i) such certification shall be
considered final and binding on both parties (except as to additional Expenses
or Taxes not then known or omitted by error), and (ii) Tenant shall pay
Landlord for the cost of such certification, unless it shows that Taxes and
Expenses were overstated by at least five (5) percent. Pending resolution
of any such exceptions, Tenant shall pay Tenant’s Share of Taxes and Expenses
in the amounts shown on such Statement, subject to credit, refund or additional
payment after any such exceptions are resolved.


 


K.            Base Year Adjustments.   If Taxes for the Base Tax Year are
reduced as the result of protest, or by means of agreement, or as the result of
legal proceedings or otherwise, Landlord shall adjust Tenant’s obligations for
Taxes in all years following the Base Tax Year, and Tenant shall pay Landlord
within 30 days after notice any additional amount required by such adjustment
for any such years or portions thereof that have theretofore occurred. Landlord
shall exclude from Base Year Expenses any non-recurring items, including
capital expenditures otherwise permitted under Article 32 of the Lease
(and shall only include the amortization of such expenditures in subsequent
year Expenses to the extent permitted under Article 32, including any
remaining amortization of permitted capital expenditures made prior to or after
the Commencement Date). If Landlord eliminates from any subsequent year
Expenses a recurring category of expenses previously included in Base Year
Expenses, Landlord shall subtract such category from Base Year Expenses
commencing with such subsequent year.


 


L.            General Payment Matters.   Base
Rent, Taxes, Expenses and any other amounts which Tenant is or becomes obligated to pay Landlord under this Lease
or other agreement entered in connection herewith, are sometimes herein
referred to collectively as “Rent,” and all remedies applicable to the
non-payment of rent shall be applicable thereto. Rent shall be paid in good
funds and legal tender of the United States of America. Tenant shall pay Rent
without any


 


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deduction, recoupment, set-off or counterclaim, and without relief from
any valuation or appraisement laws. Rent obligations hereunder are independent
covenants. Provided that Landlord shall provide such statement within seven (7) months
of the expiration of this Lease, no delay by Landlord in providing the
Statement (or separate statements) shall be deemed a default by Landlord or a
waiver of Landlord’s right to require payment of Tenant’s obligations for
actual or estimated Taxes or Expenses. In no event shall a decrease in Taxes or
Expenses ever decrease the monthly Base Rent or give rise to a credit in favor
of Tenant. Landlord may apply payments received from Tenant to any obligations
of Tenant then accrued, without regard to such obligations as may be designated
by Tenant.


 


ARTICLE 5: QUIET ENJOYMENT


 


Landlord agrees
that if Tenant timely pays the Rent and performs the terms and provisions
hereunder, Tenant shall hold the Premises during the Term, free of lawful
claims by any party acting by or through Landlord, subject to all other terms
and provisions of this Lease.


 


ARTICLE 6: UTILITIES AND
SERVICES


 


A.            Standard Landlord Utilities and Services.
  Landlord
shall provide the following utilities and services (the cost of which shall be
included in Expenses, except as provided below):


 


(i)            Heat and air-conditioning to provide
a temperature required, In Landlord’s reasonable opinion, for occupancy of the
Premises as offices, from 8:00 a.m. until 6:00 p.m. Monday through
Friday, excluding all Holidays.


 


(ii)           Water from city mains for drinking,
lavatory and toilet purposes only, at those points of supply provided for
nonexclusive general use of tenants at the Property, or points of supply in the
Premises installed by or with Landlord’s written consent for such purposes.


 


(iii)          Cleaning and trash removal service in
and about the Premises as is customary for office space in office buildings.


 


(iv)          Passenger elevator service at all
times (subject to changes in the number of elevators in service after hours or
at other times), and freight elevator service (subject to scheduling by
Landlord and such standard charges as Landlord may impose), in common with
Landlord and other parties.


 


(v)           Electricity for building-standard
overhead office lighting fixtures, and equipment and accessories customary for
offices (up to 280 hours per month), where: (a) the connected electrical
load of all of the same does not exceed an average of 4 watts per usable square
foot of the Premises (or such lesser amount as may be available, based on the
safe and lawful capacity of the electrical circuit(s) and facilities serving
the Premises), (b) the electricity is at nominal 120 volts, single phase
(or 110 volts, depending on available service in the Building), and (c) the
Systems and Equipment are suitable, the safe and lawful capacity thereof is not
exceeded, and sufficient capacity remains at all times for other existing and
future tenants, as determined in Landlord’s reasonable discretion.


 


B.            Additional Utilities and Services.
  Landlord
shall not be responsible for inadequate air-conditioning or ventilation
whenever the use or occupancy of the Premises exceeds the normal capacity or
design loads of, affects the temperature or humidity otherwise maintained by, or
otherwise adversely affects the operation of, the Systems and Equipment for the
Property, whether due to items of equipment or machinery generating heat, above
normal concentrations of personnel or equipment, alterations to the Premises
made by or through Tenant without balancing the air or installing supplemental
HVAC equipment. Without limiting the generality of the foregoing, Landlord
shall not be responsible for inadequate air conditioning or ventilation to the
extent that the same occurs because Tenant, without providing adequate air
conditioning and ventilation: (i) uses or permits the use of any item, or
concentrated group, of equipment consuming more than 500 watts in the aggregate
at rated capacity, or (ii) occupies or permits the Premises to be occupied
with concentrations of personnel greater than one person per 200 usable square
feet. In any such case, Landlord may elect to balance the air, install,
operate, maintain and replace such supplemental HVAC equipment during the Term,
at Tenant’s expense, as an extra utility or service (or require that Tenant
arrange for the same as Work under Article 9). Landlord shall seek to
provide such extra utilities or services as Tenant may from time to time
request, if the same are reasonable and feasible for Landlord to provide and do
not involve modifications or additions to the Property or existing Systems and
Equipment, and if Landlord


 


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shall receive Tenant’s request within a reasonable period prior to the
time such extra utilities or services are required. Tenant shall pay, for any
extra utilities or services, such standard charges as Landlord shall from time
to time establish, Landlord’s out-of-pocket costs for architects, engineers,
consultants and other parties relating to such extra utilities or services, and
a fee equal to fifteen percent (15%) of such costs. All payments for such extra
utilities or services shall be due at the same time as the installment of Base
Rent with which the same are billed, or if billed separately, shall be due
within ten (10) days after such billing. Notwithstanding the foregoing to
the contrary, in lieu of charging separately for additional utilities and
services, Landlord may reasonably elect from time to time to expand or modify
the amounts of services and utilities available without separate charge, in
which case the costs thereof shall be included in Expenses.


 


C.            Monitoring.   Landlord
may install and operate meters, submeters or any other reasonable system for
monitoring or estimating any services or utilities used by Tenant in excess of
those required to be provided by Landlord under this Article (including a
system for Landlord’s engineer to reasonably estimate any such excess usage). If
such system indicates such excess services or utilities, Tenant shall pay
Landlord’s charges and fees as described in Paragraph B, above, for installing and
operating such system and any supplementary air-conditioning, ventilation,
heat, electrical or other systems or equipment (or adjustments or modifications
to the existing Systems and Equipment) which Landlord may make, and Landlord’s
charges for such amount of excess services or utilities used by Tenant.


 


D.            Interruptions and Changes.   Landlord
shall have no liability for interruptions, variations, shortages, failures,
changes in quality, quantity, character or availability of any utilities or
services caused by repairs, maintenance, replacements, alterations (including
any freon retrofit work), labor controversies, accidents, inability to obtain services,
utilities or supplies, governmental or utility company acts or omissions,
requirements, guidelines or requests, or other causes beyond Landlord’s
reasonable control (or under any circumstances with respect to utilities or services
not required to be provided by Landlord hereunder). Under no circumstances whatsoever
shall any of the foregoing be deemed an eviction or disturbance of Tenant’s use
and possession of the Premises or any part thereof, serve to abate Rent, or
relieve Tenant from performance of Tenant’s obligations under this Lease. Landlord
in no event shall be liable for damages by reason of loss of profits, business
interruption or other consequential damages in connection with the foregoing
events. Nevertheless, in any such events after receiving notice, Landlord shall
use reasonable efforts to restore such utilities or services required to be
provided hereunder to reasonable levels.


 


ARTICLE 7: USE, COMPLIANCE
WITH LAWS, AND RULES


 


A.            Use of Premises.   Tenant
shall use the Premises only for the permitted use identified in Article 1,
and no other purpose whatsoever, subject to the other provisions hereof and of
this Lease. Notwithstanding anything to the contrary contained in this Lease,
Tenant shall not use or permit the Premises to be used as a: (i) political
party or social-welfare office, (ii) medical, dental, psychology or
science office or laboratory, including for treatment, research, testing or counseling,
(iii) multi-party “executive” or “legal” suite type offices, (iv) data processing,
telecommunications or telemarketing center, (v) school, educational or training
facility, (vi) employment, placement, recruiting or clerical support
agency, (vii) computerized vehicle sales, loan or “finder” service, (viii) governmental
or quasi-governmental office, whether local, state, federal or foreign, including
diplomatic and consulate, (ix) travel agency or reservation center, (x) radio
or television studio or broadcasting or recording facility, or (xi) retail real
estate brokerage, retail stock brokerage, retail bank or other retail financial
institution, loan office, depository, check-cashing or wire-transferring
service.


 


B.            Laws and Other Requirements.   Tenant
shall not use or permit within the Premises anything that will: (i) violate
the requirements of Landlord’s insurers, the American Insurance Association, or
any board of underwriters, (ii) cause a cancellation of Landlord’s
policies, impair the insurability of the Property, or increase Landlord’s
premiums (any such increase shall be paid by
Tenant without such payment being deemed permission to continue such activity
or a waiver of any other
remedies of Landlord), or (iii) violate the reasonable requirements of any
Lenders, the certificates of occupancy issued for the Premises or the Property,
or any other requirements, covenants, conditions or restrictions affecting the
Property at any time. Tenant shall comply with all Laws relating to the
Premises and Tenant’s use of the Premises and Property, including Laws
governing Hazardous Materials as described in Article 30, and the
Disabilities Acts as described in Article 31. Tenant’s obligations to
comply with Laws shall include, without limitation: (a) obtaining all
permits, licenses, certificates and approvals to conduct its business in the
Premises, or any necessary waivers or variances, without thereby subjecting
Landlord, the Property or other occupants to any costs, requirements,
liabilities or restrictions, (b) any work to


 


7





















 


or for the Premises (or any systems or equipment exclusively serving
the Premises, including any freon retrofitting work for such exclusive systems
and equipment) required by Laws, and (c) any work outside the Premises (if
Landlord permits such work) required by Laws based on Tenant’s use of, work
within, or systems or equipment exclusively serving, the Premises, whether any
such work is deemed structural, involves a capital expenditure or results in a
benefit extending beyond the Term. Any work hereunder shall be deemed “Work”
subject to Article 9.


 


C.            Rules.   Tenant
shall comply with the Rules set forth in Rider One attached hereto (the “Rules”).
Landlord shall have the right, by notice to Tenant or by posting at the
Property, to reasonably amend such Rules and supplement the same with
other reasonable Rules relating to the Property, or the promotion of
safety, care, efficiency, cleanliness or good order therein. Nothing herein
shall be construed to give Tenant or any other Person any claim, demand or
cause of action against Landlord arising out of the violation of such Rules by
any other tenant or visitor of the Property, or out of the enforcement,
modification or waiver of the Rules by Landlord in any particular
instance.


 


ARTICLE 8:
MAINTENANCE AND REPAIRS


 


Except for
customary cleaning and trash removal provided by Landlord under Article 6,
and casualty damage to be repaired by Landlord under Article 11, Tenant
shall keep and maintain (or cause to be kept and maintained) the Premises in
good and sanitary condition, working order and repair, in compliance with all
applicable Laws as described in Article 7, and as required under other
provisions of this Lease, including the Rules (including any carpet and
other flooring material, paint and wall-coverings, doors, windows, ceilings,
interior surfaces of walls, lighting (including lamps, bulbs, ballasts and
starters), plumbing and other fixtures, alterations, improvements, systems and
equipment in or exclusively serving the Premises whether installed by Landlord
or Tenant). In the event that any repairs, maintenance or replacements are
required, Tenant shall promptly notify Landlord and arrange for the same
either: (i) through Landlord for such reasonable charges as Landlord may
establish from time to time, payable within ten (10) days after billed, or
(ii) at Landlord’s option, by engaging such contractors as Landlord shall
first designate or approve in writing to perform such work, all in a first
class, workmanlike manner approved by Landlord in advance in writing and
otherwise in compliance with Article 9 respecting “Work”. Tenant shall
promptly notify Landlord concerning the necessity for any repairs or other work
hereunder and upon completion thereof. Tenant shall pay Landlord for any
repairs, maintenance and replacements to areas of the Property outside the
Premises, caused, in whole or in part, as a result of moving any furniture,
fixtures, or other property to or from the Premises, or otherwise by Tenant or
its employees, agents, contractors, or visitors (notwithstanding anything to
the contrary contained in this Lease). Except as provided in the preceding
sentence, or for damage covered under Article 11, Landlord shall keep the
common areas of the Property in good and sanitary condition, working order and
repair (the cost of which shall be included in Expenses).


 


ARTICLE 9: ALTERATIONS AND
LIENS


 


A.            Alterations and Approval.   Tenant
shall not attach any fixtures, equipment or other items to the Premises, or paint
or make any other additions, changes, alterations or improvements to the
Premises or the Systems and Equipment serving the Premises (all such work is
referred to collectively herein as the “Work”), without the prior written
consent of Landlord. Landlord shall not unreasonably withhold consent, except
that Landlord reserves the right to withhold consent in Landlord’s sole
discretion for Work affecting the structure, safety, efficiency or security of
the Property or Premises, the Systems and Equipment, or the appearance of the Premises
from any common or public areas. In seeking approval, Tenant shall submit for Landlord’s
prior written approval: (i) the names, addresses and background information concerning
all architects, engineers, contractors, subcontractors and suppliers Tenant
proposes to use, and (ii) detailed plans and specifications prepared by the approved
architects and engineers. In addition, Tenant shall provide Landlord with
notice of whether the Work will involve
or affect any Hazardous Materials, whether such materials are customary and
usual based on standard industry
practices, and all other details relating thereto.


 


B.            Approval Conditions.   Landlord
reserves the right to impose requirements as a condition of such consent or
otherwise in connection with the Work, including requirements that Tenant: (i) obtain
and post permits, (ii) provide bonds, additional insurance, and/or a cash
deposit of the total amount required to pay for the Work (including plans,
specifications, engineering and other lienable costs, and Landlord’s fee
described below) for Landlord to release or apply as the Work is properly completed
and lien waivers, affidavits and other documentation satisfactory to Landlord
are submitted, (iii) submit architect, engineer, contractor, subcontractor
and supplier


 


8





















 


affidavits of payment and recordable lien waivers in compliance with
the Laws of the State of Washington, (iv) use union labor (if Landlord
uses union labor), (v permit Landlord or its representatives to inspect the
Work at reasonable times, and (vi) comply with such other requirements as
Landlord may impose concerning the manner and times in which such Work shall be
done. Landlord may require that all Work be performed under Landlord’s
supervision, and Landlord reserves the right to designate the architects,
engineers, contractors, subcontractors and suppliers who will design and
perform all Work and supply all materials affecting the Systems and Equipment
or structure of the Property. If Landlord approves, inspects, supervises,
recommends or designates any architects, engineers, contractors, subcontractors
or suppliers, the same shall not be deemed a warranty as to the adequacy of the
design, workmanship or quality of materials, or compliance of the Work with the
plans and specifications or any Laws.


 


C.            Performance of Work.   All
Work shall be performed: (i) in a thoroughly first class, professional and
workmanlike manner, (ii) only with materials that are new, high quality,
and free of material defects, (iii) strictly in accordance with plans,
specifications, parties and other matters approved or designated by Landlord in
advance in writing, (iv) not to adversely affect the Systems and Equipment or
the structure of the Property, (v) diligently to completion and so as to avoid
any disturbance, disruption or inconvenience to other tenants and the operation
of the Property, and (vi) in compliance with all Laws, the Rules and
other provisions of this Lease, and such other requirements as Landlord may
impose concerning the manner and times in which such Work shall be done. Any
floor, wall or ceiling coring work or penetrations or use of noisy or heavy
equipment which may interfere with the conduct of business by other tenants at
the Property shall, at Landlord’s option, be performed at times other than
Landlord’s normal business hours (at Tenant’s sole cost). If Tenant fails to
perform the Work as required herein or the materials supplied fail to comply
herewith or with the specifications approved by Landlord, and Tenant fails to
commence to cure such failure within 48 hours after notice by Landlord, and diligently
prosecute until completion (except notice shall not be required in emergencies),
Landlord shall have the right to stop the Work until such failure is cured
(which shall not be in limitation of Landlord’s other remedies and shall not
serve to abate the Rent or Tenant’s other obligations under this Lease). Upon
completion of any Work hereunder, Tenant shall provide Landlord with “as built”
plans, copies of all construction contracts, and proof of payment for all labor
and materials.


 


D.            Liens.   Tenant
shall pay all costs for the Work when due. Tenant shall keep the Property, Premises
and this Lease free from any mechanic’s, materialman’s, architect’s, engineer’s
or similar liens or encumbrances, and any claims therefor, or stop or violation
notices, in connection with any Work. Tenant shall give Landlord notice at
least ten (10) days prior to the commencement of any Work (or such
additional time as may be necessary under applicable Laws), to afford Landlord
the opportunity of posting and recording appropriate notices of non- responsibility.
Tenant shall remove any such claim, lien or encumbrance, or stop or violation notices
of record, by bond or otherwise within ten (10) days after notice by
Landlord. If Tenant fails to do so, Landlord may pay the amount (or any portion
thereof) or take such other action as Landlord deems necessary to remove such claim,
lien or encumbrance, or stop or violation notices, without being responsible
for investigating the validity thereof. The amount so paid and costs incurred by
Landlord shall be deemed additional Rent under this Lease payable upon demand,
without limitation as to other remedies available to Landlord. Nothing
contained in this Lease shall authorize Tenant to do any act which shall
subject Landlord’s title to, or any Lender’s interest in, the Property or
Premises to any such claims, liens or encumbrances, or stop or violation notices,
whether claimed pursuant to statute or other Law or express or implied contract.


 


E.             Removal of Work Upon Termination of
Lease.   All Work hereunder shall remain or be removed
from the Premises upon expiration or earlier termination of this Lease to the
extent required under Article 23.


 


F.             Landlord’s Fees and Costs.   If
Landlord acts as Tenant’s construction manager for Work under this Lease,
Tenant shall pay Landlord a fee for reviewing, scheduling, monitoring, supervising,
and providing access for or in connection with the Work, in an amount equal to fifteen
percent (15%) of the total cost of the Work (including costs of plans and permits
therefor), and Landlord’s out-of-pocket costs, including any costs for
security, utilities, trash removal, temporary barricades, janitorial, engineering,
architectural or consulting services, and other matters in connection with the
Work, payable within ten (10) business days after billed. If Landlord is
not the construction manager, the parties shall mutually agree upon the fee to
be charged for Landlord’s reviewing, scheduling, monitoring, supervising,
and/or providing access for or in connection with the Work, in addition to
Landlord’s out-of-pocket costs, including any costs for security, utilities,
trash removal, temporary barricades, janitorial, engineering, architectural or


 


9





















 


consulting services, and other matters in connection with the Work,
which shall be payable within
ten (10) business days after billed.


 


ARTICLE 10: INSURANCE AND
WAIVER OF CLAIMS


 


A.            Required Insurance.   Tenant shall maintain at its expense during
the Term with respect to the Premises and Tenant’s use thereof and of the
Property:


 


(i)            Worker’s Compensation Insurance in the
amounts required by statute, and Employer Liability Insurance in at least the
following amounts: (a) Bodily Injury by Accident -$500,000 per accident, (b) Bodily
Injury by Disease - $500,000 per employee, and (c) Aggregate Limit -
$1,000,000 per policy year.


 


(ii)           Property Damage Insurance for the
protection of Tenant and Landlord, as their interests may appear, covering any
alterations or improvements in excess of any work provided or paid for by
Landlord under this Lease, Tenant’s personal property, business records,
fixtures and equipment, and other insurable risks in amounts not less than the
full insurable replacement cost of such property and full insurable value of
such other interests of Tenant, with coverage at least as broad as the most
recent editions published by Insurance Services Office, Inc. or any
successor organization (“ISO”), of: (a) Building and Personal Property
Coverage Form (CP0010), (b) Business Income Coverage Form (CP0030), covering at least one
year of anticipated income, (c) Boiler and Machinery Coverage Form (BM0025),
(d) Causes of Special Loss Form (CP1030), and (e) Sprinkler
Leakage - Earthquake Extension (CP1039).


 


(iii)          Commercial General Liability Insurance
(“CGL”) at least as broad as the most recent ISO edition of Commercial General
Liability Coverage Form (CG0001) with limits of at least the following
amounts: (a) Death or Bodily Injury - $2,000,000, (b) Property Damage
or Destruction (including loss of use thereof) - $1,000,000, (c) Products/Completed
Operations -$1,000,000, (d) Personal or Advertising injury - $1,000,000, (e) Each
Occurrence Limit -$2,000,000, and (f) General Aggregate Limit - $3,000,000
per policy year. Such policy shall include endorsements: (1) for
contractual liability covering Tenant’s indemnity obligations under this Lease,
and (2) adding Landlord, the management company for the Property, and
other parties designated by Landlord, as Additional Insureds, on a form at
least as broad as the most recent edition of Additional Insured - Manager or
Lessor of Premises Endorsement Form (CG2011) published by ISO.


 


B.            Certificates, Subrogation and Other
Matters.   Tenant shall provide Landlord with certificates
evidencing the coverage required hereunder prior to the Commencement Date, or Tenant’s
entry to the Premises for construction of improvements or any other purpose (whichever
first occurs). Such certificates shall: (i) be on ACORD Form 27 or
such other form approved or required by Landlord, (ii) state that such
insurance coverage may not be changed, canceled or non-renewed without at least
thirty (30) days’ prior written notice to Landlord, and (iii) include, as
attachments, originals of the Additional Insured endorsements to Tenant’s CGL policy
required above. Tenant shall provide renewal certificates to Landlord at least
thirty (30) days prior to expiration of such policies. Except as expressly
provided to the contrary herein, coverage hereunder shall apply to events
occurring during the policy year regardless of when a claim is made. Landlord
may periodically require that Tenant reasonably increase or expand the aforementioned
coverage. Except as provided to the contrary herein, any insurance carried by Landlord
or Tenant shall be for the sole benefit of the party carrying such insurance. If
Tenant obtains insurance under “blanket policies,” Tenant shall obtain an
endorsement providing that the insurance limits required hereunder are not subject
to reduction or impairment by claims or losses at other locations. Tenant’s
insurance policies shall be primary to all policies of Landlord and any other
Additional Insureds (whose policies shall be deemed excess and
non-contributory). All insurance required hereunder shall be provided by
responsible insurers licensed in the State of Washington, and shall have a
general policy holder’s rating of at least A and a financial rating of at least
X in the then current edition of Best’s Insurance Reports. The parties mutually
hereby waive all rights and claims against each other for all losses covered by
their respective insurance policies (or
required to be covered by insurance under this Lease), and waive all rights of
subrogation of their respective insurers. The parties agree that their
respective insurance policies are now, or shall be, endorsed such that said
waiver of subrogation shall not affect the right of the insured to recover
thereunder. Landlord disclaims any representation as to whether the foregoing
coverages will be adequate to protect Tenant, and Tenant agrees to carry such
additional coverage as may be necessary or appropriate.


 


C.            Waiver of Claims.   Except
for claims arising from Landlord’s intentional or grossly negligent acts,
Tenant waives all claims against Landlord for injury or death to persons,
damage to property or to any other interest of Tenant sustained by Tenant or
any party claiming by or


 


10





















 


through Tenant resulting from: (i) any occurrence in or upon the
Premises, (ii) leaking of roofs, bursting, stoppage or leaking of
water, gas, sewer or steam pipes or equipment, including sprinklers, (iii) wind,
rain, snow, ice, flooding (including flooding of basements and other subsurface
areas), freezing, fire, explosion, earthquake, excessive heat or cold,
dampness, fire or other casualty, (iv) the Property, Premises, Systems and
Equipment being defective, out of repair, or failing, and (v) vandalism,
malicious mischief, theft, misappropriation or other acts or omissions of any
parties including Tenant’s employees, other tenants, and their respective
agents, employees, invitees and contractors (and Tenant shall give Landlord
immediate notice of any such occurrences). This provision is in addition to,
and not in limitation of, other provisions of this Lease limiting Landlord’s
liability.


 


D.            Mutual Waiver of Claims; Waiver of
Subrogation.   Landlord and Tenant release each other, and their respective officers,
directors, trustees, beneficiaries, partners, members, managers, agents, and
employees, from, and waive their entire claim of recovery for, any claims for
damage to the Premises and the Building and to Tenant’s alterations, trade
fixtures and personal property that are caused by or result from fire,
lightening or any other perils normally included in an “all risk” property
insurance policy whether or not such loss or damage is due to the negligence of
Landlord, or its officers, directors, trustees, beneficiaries, partners,
members, managers, agents, and employees, or of Tenant, or its officers,
directors, trustees, beneficiaries, partners, members, managers, agents, and
employees. Landlord and Tenant shall cause each insurance policy obtained by it
to provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by such
insurance policy.


 


ARTICLE 11: CASUALTY DAMAGE


 


A.            Restoration.   Tenant shall promptly notify Landlord of any
damage to the Premises by fire or other casualty. If the Premises or any common
areas of the Property providing access thereto shall be damaged by fire or other
casualty, Landlord shall use available insurance proceeds to restore the same. Such
restoration shall be to substantially the same condition prior to the casualty,
except for modifications required by zoning and building codes and other Laws
or by any Lender, any other modifications to the common areas deemed desirable
by Landlord (provided access to the Premises is not materially impaired), and
except that Landlord shall not be required to repair or replace any of Tenant’s
furniture, furnishings, fixtures or equipment, or any alterations or
improvements in excess of any work provided or paid for by Landlord under this Lease.
Landlord shall not be liable for any inconvenience or annoyance to Tenant or
its visitors, or injury to Tenant’s business resulting in any way from such
damage or the repair thereof. Promptly following completion of Landlord’s
restoration work, Tenant shall repair and replace Tenant’s furniture,
furnishings, fixtures, equipment, and any alterations or improvements made by
Tenant in excess of those provided or paid for by Landlord, subject to and in
compliance with the other provisions of this Lease.


 


B.            Abatement of Rent.   Landlord
shall allow Tenant a proportionate abatement of Base Rent from the date of the
casualty through the date that Landlord substantially completes Landlord’s repair
obligations hereunder (or the date that Landlord would have substantially completed
such repairs, but for delays by Tenant or any other occupant of the Premises,
or any of their agents, employees, invitees, Transferees and contractors),
provided such abatement: (i) shall apply only to the extent the Premises
are untenantable for the purposes permitted under this Lease and not used by
Tenant as a result thereof, based proportionately on the square footage of the
Premises so affected and not used, and (ii) shall not apply if Tenant or
any other occupant of the Premises, or any of their agents, employees,
invitees, Transferees or contractors caused the damage.


 


C.            Termination of Lease.   Notwithstanding
the foregoing to the contrary, in lieu of performing the restoration work,
Landlord may elect to terminate this Lease by notifying Tenant in writing of
such termination within sixty (60) days after the date of damage (such
termination notice to include a termination date providing at least thirty (30)
days for Tenant to vacate the Premises), or if the Property shall be damaged by
fire or other casualty or cause such that: (a) repairs to the Premises and
access thereto cannot reasonably be completed within 120 days after the
casualty without the payment of overtime or other premiums, (b) more than
twenty-five percent (25%) of the Premises is affected by the damage and fewer
than eighteen (18) months remain in the Term, or any material damage occurs to
the Premises during the last twelve (12) months of the Term, (c) any
Lender shall require that the insurance proceeds or any portion thereof be used
to retire the Mortgage debt (or shall terminate the ground lease, as the case
may be), or the damage is not fully covered, except for deductible amounts, by
Landlord’s insurance policies, or (d) the cost of the repairs,
alterations, restoration or improvement work would exceed


 


11





















 


twenty-five percent (25%) of the replacement value of the Building
(whether or not the Premises are affected by the damage). Tenant agrees that
the abatement of Rent provided herein shall be Tenant’s sole recourse in the
event of such damage, and waives any other rights Tenant may have under any
applicable Law to perform repairs or terminate the Lease by reason of damage to
the Premises or Property.


 


ARTICLE 12: CONDEMNATION


 


If at least fifty
percent (50%) of the rentable area of the Premises shall be taken by power of
eminent domain or condemned by a competent authority or by conveyance in lieu
thereof for public or quasi-public use (“Condemnation”), including any temporary
taking for a period of one year or longer, this Lease shall terminate on the
date possession for such use is so taken. If: (i) less than fifty percent
(50%) of the Premises is taken, but the taking includes or affects a material
portion of the Building or Property, or the economical operation thereof, or (ii) the
taking is temporary and
will be in effect for less than one year but more than thirty (30) days, then
in either such event, Landlord may elect to terminate this Lease upon at
least thirty (30) days’ prior notice to Tenant. The parties further agree that:
(a) if this Lease is terminated, all Rent shall be apportioned as of the
date of such termination or the date of such taking, whichever shall first
occur, (b) if the taking is temporary, Rent shall not be abated for the
period of the taking, but Tenant may seek a condemnation award therefor (and
the Term shall not be extended thereby), and (c) if this Lease is not
terminated but any part of the Premises is permanently taken, the Rent shall be
proportionately abated based on the square footage of the Premises so taken.
Landlord shall be entitled to receive the entire award or payment in connection
with such Condemnation and Tenant hereby assigns to Landlord any interest
therein for the value of Tenant’s unexpired leasehold estate or any other claim
and waives any right to participate therein, except that Tenant shall have the
right to claim damages for a temporary taking of the leasehold as described
above, and for moving expenses and any taking of Tenant’s personal property.


 


ARTICLE 13: ASSIGNMENT AND
SUBLETTING


 


A.            Transfers.   Tenant shall not, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld as
further described below: (i) assign, mortgage, pledge, hypothecate, encumber,
or permit any lien to attach to, or otherwise transfer, this Lease or any
interest hereunder, by operation of Law or otherwise, (ii) sublet the
Premises or any part thereof, (iii) permit the use of the Premises by any
Persons other than Tenant and its employees (all of the foregoing are
hereinafter sometimes referred to collectively as “Transfers” and any Person to
whom any Transfer is made or sought to be made is hereinafter sometimes
referred to as a “Transferee”), or (iv) advertise the Premises or Lease
for Transfers. If Tenant shall desire Landlord’s consent to any Transfer,
Tenant shall notify Landlord in writing, which notice shall include: (a) the
proposed effective date (which shall not be less than thirty (30) nor more than
180 days after Tenant’s notice), (b) the portion of the Premises to be
Transferred (herein called the “Subject Space”), (c) the terms of the
proposed Transfer and the consideration therefor, the name, address and
background information concerning the proposed Transferee, and a true and complete
copy of all proposed Transfer documentation, and (d) financial statements
(balance sheets and income/expense statements for the current and prior three (3) years
(if three years are available)) of the proposed Transferee, in form and detail
reasonably satisfactory to Landlord, certified by an officer, partner or owner
of the Transferee, and any other information to enable Landlord to determine
the financial responsibility, character, and reputation of the proposed Transferee,
nature of such Transferee’s business and proposed use of the Subject Space, and
such other information as Landlord may reasonably require. Any Transfer made without
complying with this Article shall at Landlord’s option be null, void and of
no effect, or shall constitute a Default under this Lease. Whether or not
Landlord shall grant consent, Tenant shall pay a reasonable fee (but not less
than $500.00) towards Landlord’s review and processing expenses (such fee shall
be estimated by Landlord and approved by Tenant in advance), as well as any
reasonable legal fees incurred by Landlord within ten (10) days after
written request by Landlord.


 


B.            Approval.   Landlord will not unreasonably withhold
its consent to any proposed Transfer of the Subject Space to the Transferee on
the terms specified in Tenant’s notice. The parties hereby agree that it shall
be reasonable under this Lease and under any applicable Law for Landlord to
withhold consent to any proposed Transfer where one or more of the following applies
(without limitation as to other reasonable grounds for withholding consent): (i)
the Transferee is of a character or reputation or engaged in a business which
is not consistent with the quality or nature of the Property or other tenants
of the Property, or would be a significantly


 


12





















 


less prestigious occupant of the Property than Tenant, (ii) the
Transferee intends to use the Subject Space for purposes which are not
permitted under this Lease, (iii) the Subject Space is not regular in
shape with appropriate means of ingress and egress suitable for normal renting
purposes, would result in more than a reasonable number of occupants, or would
require increased services by Landlord, (iv) the Transferee is either a
government (or agency or instrumentality thereof), (v) the proposed
Transferee or any affiliate thereof is an occupant of the Property, (vi) the
proposed Transferee does not have, in Landlord’s sole good faith determination,
satisfactory references or a reasonable financial condition in relation to the
obligations to be assumed in connection with the Transfer, (vii) the
Transfer is other than a sublease or a non-collateral complete assignment, (viii) the
proposed Transfer would cause Landlord to be in violation of any Laws or any
other lease, Mortgage or agreement to which Landlord is a party, would give a
tenant of the Property a right to cancel its lease, or would create adverse tax
consequences for Landlord, or (ix) Tenant has committed and failed to cure
a Default. If Tenant disagrees with Landlord’s decision to deny approval,
Tenant’s sole remedy shall be to seek injunctive relief.


 


C.            Transfer Premiums.   If
Landlord consents to a Transfer, and as a condition thereto which the parties
hereby agree is reasonable, Tenant shall pay Landlord fifty percent (50%) of
any Transfer Premium derived by Tenant from such Transfer. “Transfer Premium”
shall mean, for a lease assignment, all consideration paid or payable therefor.
“Transfer Premium” shall mean, for a sublease, all rent, additional rent or
other consideration paid by such Transferee in excess of the Rent payable by
Tenant under this Lease (on a monthly basis during the Term, and on a per
rentable square foot basis, if less than all of the Premises is transferred). “Transfer
Premium” shall also include so-called “key money,” or other bonus amount paid
by Transferee to Tenant, and any payment in excess of fair market value for
services rendered by Tenant to Transferee or in excess of Tenant’s depreciated
tax basis for assets, fixtures, inventory, equipment or furniture transferred
by Tenant to Transferee. If part of the consideration for such Transfer shall
be payable other than in cash, Landlord’s share of such non-cash consideration
shall be in such form as is reasonably satisfactory to Landlord. The percentage
of the Transfer Premium due Landlord hereunder shall be paid within ten (10) days
after Tenant receives any Transfer Premium from the Transferee.


 


D.            Recapture.   Notwithstanding
anything to the contrary contained in this Article, Landlord shall have the
option, by giving notice to Tenant within thirty (30) days after receipt of Tenant’s
notice of any proposed Transfer, to recapture the Subject Space. Such recapture
notice shall cancel and terminate this Lease with respect to the Subject Space
as of the date stated in Tenant’s notice as the effective date of the proposed
Transfer (or at Landlord’s option, shall cause the Transfer to be made to
Landlord or its agent or nominee, in which case the parties shall execute
reasonable Transfer documentation promptly thereafter). If this Lease shall be canceled
with respect to less than the entire Premises, the Rent herein shall be
prorated on the basis of the number of rentable square feet retained by Tenant
in proportion to the number of rentable square feet contained in the Premises, this
Lease as so amended shall continue thereafter in full force and effect, and
upon request of either party the parties shall execute written confirmation of
the same. Tenant shall surrender and vacate the Subject Space when required
hereunder in accordance with Article 23 and any failure to do so shall be
subject to Article 24.


 


E.             Terms of Consent.
  If Landlord consents to a Transfer: (i) the
terms and conditions of this Lease, including Tenant’s liability for the
Subject Space, shall in no way be deemed to have been waived or modified, (ii) such
consent shall not be deemed consent to any further Transfer by either Tenant or
a Transferee, (iii) no Transferee shall succeed to any rights provided in
this Lease or any amendment hereto to extend the Term of this Lease, expand the
Premises, or lease other space, any such rights being deemed personal to the
initial Tenant, (iv) Tenant shall deliver to Landlord promptly after execution,
an original executed copy of all documentation pertaining to the Transfer in
form reasonably acceptable to Landlord, and (v) Tenant shall furnish a
complete statement, certified by an independent certified public accountant, or
Tenant’s chief financial officer, setting forth in detail the computation of
any Transfer Premium that Tenant has derived and shall derive from such
Transfer. Landlord or its authorized representatives shall have the right at
all reasonable times to audit the books, records and papers of Tenant and any Transferee
relating to any Transfer, and shall have the right to make copies thereof. If
the Transfer Premium respecting any Transfer shall be found understated, Tenant
shall within thirty (30) days after demand pay the deficiency, and if
understated by more than five percent (5%) Tenant shall pay Landlord’s costs of
such audit. Any sublease hereunder shall be subordinate and subject to the
provisions of this Lease, and if this Lease shall be terminated during the term
of any sublease, Landlord shall have the right to: (a) deem such sublease
as merged and canceled


 


13





















 


and repossess the Subject Space by any lawful means, or (b) deem
such termination as an assignment of such sublease to Landlord and not as a
merger, and require that such subtenant attorn to and recognize Landlord as its
landlord under any such sublease. If Tenant shall commit a Default under this
Lease, and such Default remains uncured after the expiration of notice and cure
periods, Landlord is hereby irrevocably authorized, as Tenant’s agent and
attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant’s obligations under this Lease).


 


F.             Certain Transfers.   For purposes of this Lease, the term “Transfer”
shall also include, and all of the
foregoing provisions shall apply to: (i) the conversion, merger or
consolidation of Tenant into a limited liability company or limited liability
partnership, (ii) if Tenant is a partnership or limited liability company,
the withdrawal or change, voluntary, involuntary or by operation of law, of a
majority of the partners or members, or a transfer of a majority of partnership
or membership interests, within a twelve month period, or the dissolution of
the partnership or company, and (iii) if Tenant is a closely held
corporation (i.e., whose stock is not publicly held and not traded through an
exchange or over the counter), the dissolution, merger, consolidation or other
reorganization of Tenant, or within a twelve month period: (a) the sale or
other transfer of more than an aggregate of 50% of the voting shares of Tenant
(other than to immediate family members by reason or gift or death) or (b) the
sale, mortgage, hypothecation or pledge of more than an aggregate of 50% of
Tenant’s net assets.


 


ARTICLE 14: PERSONAL
PROPERTY, RENT AND OTHER TAXES


 


Tenant shall pay
prior to delinquency all taxes, charges or other governmental impositions
assessed against or levied upon all fixtures, furnishings, personal property,
systems and equipment located in or exclusively serving the Premises, and any
Work to the Premises under Article 9 or other provisions of this Lease or
related documentation. Whenever possible, Tenant shall cause all such items to
be assessed and billed separately from the other property of Landlord. In the
event any such items shall be assessed and billed with the other property of
Landlord, Tenant shall pay Landlord its share of such taxes, charges or other
governmental impositions within ten (10) days after Landlord delivers a
statement and a copy of the assessment or other documentation showing the
amount of impositions applicable to Tenant’s property. Tenant shall pay any
rent tax, sales tax, service tax, transfer tax, value added tax, or any other
applicable tax on the Rent, utilities or services herein, the privilege of
renting, using or occupying the Premises, or collecting Rent therefrom, or
otherwise respecting this Lease or any other document entered in connection
herewith.


 


ARTICLE 15: LANDLORD’S
REMEDIES


 


A.            Default.   The occurrence of any one or more of the following
events shall constitute a “Default” by Tenant and shall give rise to Landlord’s
remedies set forth in Paragraph B below: (i) failure to make when due any
payment of Rent, unless such failure is cured within five (5) days after
notice; (ii) failure to observe or perform any term or condition of this
Lease other than the payment of Rent (or the other matters expressly described
herein), unless such failure is cured within any period of time following
notice expressly provided with respect thereto in other Articles hereof, or
otherwise within a reasonable time, but in no event more than twenty (20) days
following notice (provided, if the nature of Tenant’s failure is such that more
time is reasonably required in order to cure, Tenant shall not be in Default if
Tenant commences to cure promptly within such period, diligently seeks and
keeps Landlord reasonably advised of efforts to cure such failure to completion,
and completes such cure within sixty (60) days following Landlord’s notice); (iii) failure
to cure immediately upon notice thereof any condition which is hazardous,
interferes with another Tenant or the operation or leasing of the Property, or
may cause the imposition of a fine, penalty or other remedy on Landlord or its
agents or affiliates, (iv) violating Article 13 respecting Transfers, or
abandoning, vacating or failing to occupy the Premises for more than ten (10) days,
or removing or making arrangements to remove substantial portions of the
furniture or other personal property from the Premises or any material portion
thereof, or (v) (a) making by Tenant or any guarantor of this Lease (“Guarantor”)
of any general assignment for the benefit of creditors, (b) filing by or
for reorganization or arrangement under any Law relating to bankruptcy or
insolvency (unless, in the case of a petition filed against Tenant or such
Guarantor, the same is dismissed within sixty (60) days), (c) appointment
of a trustee or receiver to take possession of substantially all of Tenant’s
assets located in the Premises or of Tenant’s interest in this Lease, where
possession is not restored to Tenant within sixty (60) days, (d) attachment,
execution or other judicial seizure of substantially all of Tenant’s assets located
in the Premises or of Tenant’s interest in this Lease, (e) Tenant’s or any
Guarantor’s convening of a meeting of its creditors or any class thereof for
the purpose of


 


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effecting a moratorium upon or composition of its
debts, (f) Tenant’s or any Guarantor’s insolvency or failure, or admission
of an inability, to pay debts as they mature, or (g) a violation by Tenant
or any affiliate of Tenant under any other lease or agreement with Landlord or
any affiliate thereof which is not cured within the time permitted for cure
thereunder. If Tenant violates the same term or condition of this Lease on two (2) occasions
during any twelve (12) month period, Landlord shall have the right to exercise
all remedies for any violations of the same term or condition during the next
twelve (12) months without providing further notice or an opportunity to cure.
The notice and cure periods provided herein are in lieu of, and not in addition
to, any notice and cure periods provided by Law; provided, Landlord may elect
to comply with such notice and cure periods provided by Law in lieu of the
notice and cure periods provided herein.


 


B.            Remedies.   If a
Default occurs, Landlord shall have the rights and remedies hereinafter set
forth to the extent permitted by Law, which shall be distinct, separate and
cumulative with and in addition to any other right or remedy allowed under any
Law or other provision of this Lease:


 


(1)           Landlord may terminate this Lease and
Tenant’s right of possession, reenter and repossess the Premises by detainer
suit, summary proceedings or other lawful means, and recover from Tenant: (i) any
unpaid Rent as of the termination date, (ii) the amount by which: (a) any
unpaid Rent which would have accrued after the termination date during the
balance of the Term exceeds (b) the reasonable rental value of the
Premises under a lease substantially similar to this Lease, taking into account
among other things the condition of the Premises, market conditions and the
period of time the Premises may reasonably remain vacant before Landlord is able
to re-lease the same to a suitable replacement tenant, and Costs of Reletting
(as defined in Paragraph H below) that Landlord may incur in order to enter
such replacement lease, (iii) any other amounts necessary to compensate Landlord
for all damages proximately caused by Tenant’s failure to perform its
obligations under this Lease. For purposes of computing the amount of Rent
herein that would have accrued after the termination date, Tenant’s obligations
for Taxes and Expenses shall be projected based upon the average rate of
increase in such items from the Commencement Date through the termination date
(or if such period shall be less than three years, then based on Landlord’s reasonable
estimates). The amounts computed in accordance with the foregoing subclauses (a) and
(b) shall both be discounted in accordance with accepted financial
practice at the rate of four percent (4%) per annum to the then present value.


 


(2)           Landlord may terminate Tenant’s right
of possession, reenter and repossess the Premises by detainer suit, summary
proceedings or other lawful means, without terminating this Lease, and recover
from Tenant: (i) any unpaid Rent as of the date possession is terminated, (ii) any
unpaid Rent which thereafter accrues during the Term from the date possession
is terminated through the time of judgment (or which may have accrued from the
time of any earlier judgment obtained by Landlord), less any consideration received
from replacement tenants as further described and applied pursuant to Paragraph
H, below, and (iii) any other amounts necessary to compensate Landlord for
all damages proximately caused by Tenant’s failure to perform its obligations
under this Lease, including all Costs of Reletting (as defined in Paragraph H
below). Tenant shall pay any such amounts to Landlord as the same accrue or
after the same have accrued from time to time upon demand. At any time after
terminating Tenant’s right to possession as provided herein, Landlord may
terminate this Lease as provided in clause (1) above by notice to Tenant,
and Landlord may pursue such other remedies as may be available to Landlord
under this Lease or applicable Law.


 


C.            Mitigation of Damages.   If
Landlord terminates this Lease or Tenant’s right to possession, Landlord shall
have no obligation to mitigate Landlord’s damages, except to the extent
required by applicable Law. If Landlord has not terminated this Lease or Tenant’s
right to possession, Landlord shall have no obligation to mitigate under any
circumstances and may permit the Premises to remain vacant or abandoned; in
such case, Tenant may seek to mitigate damages by attempting to sublease the
Premises or assign this Lease pursuant to Article 13. If Landlord is
required to mitigate damages: (i) Landlord shall be required only to use
reasonable efforts to mitigate, which shall not exceed such efforts as Landlord
generally uses to lease other space at the Property, (ii) Landlord will
not be deemed to have failed to mitigate if Landlord or its affiliates lease
any other portions of the Property or other projects owned by Landlord or its
affiliates in the same geographic area, before reletting all or any portion of
the Premises, and (iii) any failure to mitigate as described herein with
respect to any period of time shall only reduce the Rent and other amounts to
which Landlord is entitled hereunder by the reasonable rental value of the
Premises during such period, taking into account the factors described in
clause B(1) above. In recognition that the value of the Property depends
on the rental rates and terms of leases therein, Landlord’s rejection of a
prospective replacement tenant based on an offer of rentals below Landlord’s
published rates for new leases of comparable space at the Property at the time


 


15





















 


in question, or at Landlord’s option, below the rates provided in this
Lease, or containing terms less favorable than those contained herein, shall
not give rise to a claim by Tenant that Landlord failed to mitigate Landlord’s
damages.


 


D.            Reletting.   If
this Lease or Tenant’s right to possession is terminated, or Tenant abandons
the Premises, Landlord may: (i) enter and secure the Premises, change the
locks, install barricades, remove any improvements, fixtures or other property
of Tenant therein, perform any decorating, remodelling, repairs, alterations, improvements
or additions and take such other actions as Landlord shall determine in Landlord’s
sole discretion to prevent damage or deterioration to the Premises or prepare
the same for reletting, and (ii) relet all or any portion of the Premises
(separately or as part of a larger space), for any rent, use or period of time
(which may extend beyond the Term hereof), and upon any other terms as Landlord
shall determine in Landlord’s sole discretion, directly or as Tenant’s agent
(if permitted or required by applicable Law). The consideration received from
such reletting shall be applied pursuant to the terms of Paragraph H hereof,
and if such consideration, as so applied, is not sufficient to cover all Rent and
damages to which Landlord may be entitled hereunder, Tenant shall pay any
deficiency to Landlord as the same accrues or after the same has accrued from
time to time upon demand, subject to the other provisions hereof.


 


E.             Specific Performance, Collection of
Rent and Acceleration. 
 Landlord shall at all times have
the right without prior demand or notice except as required by applicable Law
to: (i) seek any declaratory, injunctive or other equitable relief, and
specifically enforce this Lease or restrain or enjoin a violation of any
provision hereof, and Tenant hereby waives any right to require that Landlord
post a bond or other security in connection therewith, and (ii) sue for
and collect any unpaid Rent which has accrued. Notwithstanding anything to the
contrary contained in this Lease, to the extent not expressly prohibited by
applicable Law, in the event of any Default by Tenant, Landlord may terminate
this Lease or Tenant’s right to possession and accelerate and declare all Rent
reserved for the remainder of the Term to be immediately due and payable (in
which event, Tenant’s obligations for Taxes and Expenses that would have
accrued thereafter shall be projected in the manner described in Section B
(1), above); provided the Rent so accelerated shall be discounted in accordance
with accepted financial practice at the rate of four percent (4%) per annum to the
then present value, and Landlord shall, after receiving payment of the same
from Tenant, be obligated to turn over to Tenant any actual net reletting proceeds
(net of all Costs of Reletting) thereafter received during the remainder of the
Term, up to the amount so received from Tenant pursuant to this provision.


 


F.             Late Charges, Interest, and
Returned Checks.   Tenant shall pay, as additional Rent, a
service charge of Three Hundred Dollars ($300.00) or four percent (4%) of the
delinquent amount, whichever is greater, if any portion of Rent is not received
when due. In addition, any Rent not paid when due shall accrue interest from
the due date at the Default Rate until payment is received by Landlord. Such
service charges and interest payments shall not be deemed consent by Landlord
to late payments, nor a waiver of Landlord’s right to insist upon timely
payments at any time, nor a waiver of any remedies to which Landlord is
entitled as a result of the late payment of Rent. If Landlord receives two (2) or
more checks from Tenant which are returned by Tenant’s bank for insufficient
funds, Landlord may require that all checks thereafter be bank certified or cashier’s
checks (without limiting Landlord’s other remedies). All bank service charges
resulting from any returned checks shall be borne by Tenant.


 


G.            Landlord’s Cure of Tenant Defaults.   If
Tenant fails to perform any obligation under this Lease for five (5) days
after notice thereof by Landlord (except that no notice shall be required in
emergencies), Landlord shall have the right (but not the duty), to perform such
obligation on behalf and for the account of Tenant. In such event, Tenant shall
reimburse Landlord upon demand, as additional Rent, for all expenses incurred
by Landlord in performing such obligation together with an amount equal to
fifteen (15%) thereof for Landlord’s overhead, and interest thereon at the
Default Rate from the date such expenses were incurred. Landlord’s performance
of Tenant’s obligations hereunder shall not be deemed a waiver or release of
Tenant therefrom.


 


H.            Other Matters.   No
re-entry or repossession, repairs, changes, alterations and additions,
reletting, or any other action or omission by Landlord shall be construed as an
election by Landlord to terminate this Lease or Tenant’s right to possession,
nor shall the same operate to release Tenant in whole or in part from any of
Tenant’s obligations hereunder, unless express notice of such intention is sent
by Landlord to Tenant. Landlord may bring suits for amounts owed by Tenant
hereunder or any portions thereof, as the same accrue or after the same have
accrued, and no suit or recovery of any portion due hereunder shall be deemed a
waiver of Landlord’s right to collect all amounts to which Landlord is entitled
hereunder, nor shall the same serve as any defense to any subsequent suit
brought for any amount not therefor reduced to


 


16





















 


judgment. Landlord may pursue one or more remedies against Tenant and
need not make an election of remedies until findings of fact are made by a
court of competent jurisdiction. All rent and other consideration paid by any
replacement tenants shall be applied at Landlord’s option: (i) first, to
the Costs of Reletting, (ii) second, to the payment of all costs of
enforcing this Lease against Tenant or any Guarantor, (iii) third, to the
payment of all interest and service charges accruing hereunder, (iv) fourth,
to the payment of Rent theretofore accrued, and (v) with the residue, if
any, to be held by Landlord and applied to the payment of Rent and other
obligations of Tenant as the same become due (and with any remaining residue to
be retained by Landlord). “Costs of Reletting” shall include without
limitation, all costs and expenses incurred by Landlord for any repairs or
other matters described in Paragraph D above, brokerage commissions,
advertising costs, attorneys’ fees, any economic incentives given to enter
leases with replacement tenants, and costs of collecting rent from replacement
tenants. Landlord shall be under no obligation to observe or perform any
provision of this Lease on its part to be observed or performed which accrues
while Tenant is in Default hereunder. The times set forth herein for the curing
of Defaults by Tenant are of the essence of this Lease. Tenant hereby
irrevocably waives any right otherwise available under any Law to redeem or
reinstate this Lease, or Tenant’s right to possession, after this Lease, or
Tenant’s right to possession, is terminated based on a Default by Tenant.


 


ARTICLE 16: SECURITY DEPOSIT


 


Tenant shall
deposit with Landlord the amount set forth in Article 1 (“Security Deposit”),
upon Tenant’s execution and submission of this Lease. The Security Deposit
shall serve as security for the prompt, full and faithful performance by Tenant
of the terms and provisions of this Lease. If Tenant commits a Default, or owes
any amounts to Landlord upon the expiration of this Lease, Landlord may use or
apply the whole or any part of the Security Deposit for the payment of Tenant’s
obligations hereunder. The use or application of the Security Deposit or any
portion thereof shall not prevent Landlord from exercising any other right or
remedy provided hereunder or under any Law and shall not be construed as
liquidated damages. In the event the Security Deposit is reduced by such use or
application, Tenant shall deposit with Landlord within ten (10) days after
notice, an amount sufficient to restore the full amount of the Security
Deposit. Landlord shall not be required to keep the Security Deposit separate
from Landlord’s general funds or pay interest on the Security Deposit. Any
remaining portion of the Security Deposit shall be returned to Tenant (or, at
Landlord’s option, to the last assignee of Tenant’s interest in this Lease)
within sixty (60) days after Tenant (or such assignee) has vacated the Premises
in accordance with Article 23. If the Premises shall be expanded at any
time, or if the Term shall be extended at an increased rate of Rent, the
Security Deposit shall thereupon be proportionately increased. Tenant shall not
assign, pledge or otherwise transfer any interest in the Security Deposit
except as part of an assignment of this Lease approved by Landlord under Article 13,
and any attempt to do so shall be null and void.


 


ARTICLE 17: ATTORNEYS’ FEES,
JURY TRIAL, COUNTERCLAIMS AND VENUE


 


In the event of
any litigation or arbitration between the parties relating to this Lease, the
Premises or Property (including pretrial, trial, appellate, administrative,
bankruptcy or insolvency proceedings), the prevailing party shall be entitled
to recover its attorneys’ fees and costs as part of the judgment, award or
settlement therein. In the event of a breach of this Lease by either party
which does not result in litigation but which causes the non-breaching party to
incur attorneys’ fees or costs, the breaching party shall reimburse such fees
and costs to the non-breaching party upon demand. If either party or any of its
officers, directors, trustees, beneficiaries, partners, agents, affiliates or
employees shall be made a party to any litigation or arbitration commenced by
or against the other party and is not at fault, the other party shall pay all
costs, expenses and attorneys’ fees incurred by such parties in connection with
such litigation. IN THE INTEREST OF OBTAINING
A SPEEDIER AND LESS COSTLY HEARING OF ANY DISPUTE, LANDLORD AND TENANT HEREBY
WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
PARTY AGAINST THE OTHER ARISING OUT OF OR RELATING TO THIS LEASE, THE PREMISES
OR THE PROPERTY. Although
such jury waiver is intended to be self-operative and irrevocable, Landlord and
Tenant each further agree, if requested, to confirm such waivers in writing at
the time of commencement of any such action, proceeding or counterclaim. If
Landlord commences any detainer suit, summary proceedings or other action
seeking possession of the Premises, Tenant agrees not to interpose by
consolidation of actions, removal to chancery or otherwise, any counterclaim,
claim of set-off, recoupment or deduction of Rent, or other claim seeking
affirmative relief of any kind (except a
mandatory or compulsory counterclaim which Tenant would forfeit if not
so interposed). Any action or proceeding brought by either party against the
other for any matter arising out of or in


 


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any way relating to this Lease, the Premises or the Property, shall be
heard, at Landlord’s option, in the court having jurisdiction located closest
to the Property.


 


ARTICLE 18: SUBORDINATION,
ATTORNMENT AND LENDER PROTECTION


 


This Lease is
subject and subordinate to all Mortgages now or hereafter placed upon the
Property, and all other encumbrances and matters of public record applicable to
the Property. Whether before or after any foreclosure or power of sale
proceedings are initiated or completed by any Lender or a deed in lieu is
granted (or any ground lease is terminated), Tenant agrees upon written request
of any such Lender or any purchaser at such sale, to attorn and pay Rent to
such party, and recognize such party as Landlord (provided such Lender or
purchaser shall agree not to disturb Tenant’s occupancy so long as Tenant does
not Default hereunder, on a form customarily used by, or otherwise reasonably
acceptable to, such party). However, in the event of attornment, no Lender
shall be: (i) liable for any act or omission of Landlord, or subject to
any offsets or defenses which Tenant might have against Landlord (arising prior
to such Lender becoming Landlord under such attornment), (ii) liable for
any security deposit or bound by any prepaid Rent not actually received by such
Lender, or (iii) bound by any modification of this Lease not consented to
by such Lender. Any Lender may elect to make this Lease prior to the lien of
its Mortgage by written notice to Tenant, and if the Lender of any prior
Mortgage shall require, this Lease shall be prior to any subordinate Mortgage;
such elections shall be effective upon written notice to Tenant, or shall be
effective as of such earlier or later date set forth in such notice. Tenant
agrees to give any Lender by certified mail, return receipt requested, a copy
of any notice of default served by Tenant upon Landlord, provided that prior to
such notice Tenant has been notified in writing (by way of service on Tenant of
a copy of an assignment of leases, or otherwise) of the address of such Lender.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time permitted Landlord for cure under this Lease, any such Lender
whose address has been provided to Tenant shall have an additional period of
thirty (30) days in which to cure (or such additional time as may be required
due to causes beyond such Lender’s control, including time to obtain possession
of the Property by appointment of receiver, power of sale or judicial action).
Except as expressly provided to the contrary herein, the provisions of this Article shall
be self-operative; however Tenant shall execute and deliver, within ten (10) days
after requested, such documentation as Landlord or any Lender may reasonably
request from time to time, whether prior to or after a foreclosure or power of
sale proceeding is initiated or completed, a deed in lieu is delivered, or a
ground lease is terminated, in order to further confirm or effectuate the
matters set forth in this Article in recordable form (and Tenant hereby
authorizes Landlord acting in good faith to execute any such documentation as
Tenant’s agent and attorney-in-fact). Tenant hereby waives the provisions of
any Law (now or hereafter adopted) which may give or purport to give Tenant any
right or election to terminate or otherwise adversely affect this Lease or
Tenant’s obligations hereunder if foreclosure or power of sale proceedings are
initiated, prosecuted or completed.


 


ARTICLE 19: ESTOPPEL
CERTIFICATES


 


Tenant shall from
time to time, within five (5) business days after written request from
Landlord, execute, acknowledge and deliver a statement certifying: (i) that
this Lease is unmodified and in full force and effect or, if modified, stating
the nature of such modification and certifying that this Lease as so modified,
is in full force and effect (or specifying the ground for claiming that this
Lease is not in force and effect), (ii) the dates to which the Rent has
been paid, and the amount of any Security Deposit, (iii) that Tenant is in
possession of the Premises, and paying Rent on a current basis with no offsets,
defenses or claims, or specifying the same if any are claimed, (iv) that
there are not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord or Tenant which are pertinent to the request, or specifying the same
if any are claimed, and (v) certifying such other matters, and including
such current financial statements, as Landlord may reasonably request, or as
may be requested by Landlord’s current or prospective Lenders, insurance
carriers, auditors, and prospective purchasers (and including a comparable
certification statement from any subtenant respecting its sublease). Any such
statement may be relied upon by any such parties. If Tenant shall fail to
execute and return such statement within the time required herein, Tenant shall
be deemed to have agreed with the matters set forth therein, and Landlord
acting in good faith shall be authorized as Tenant’s agent and attorney-in-fact
to execute such statement on behalf of Tenant (which shall not be in limitation
of Landlord’s other remedies).


 


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ARTICLE 20: RIGHTS RESERVED
BY LANDLORD


 


Except to the
extent expressly limited herein, Landlord reserves full rights to control the
Property (which rights may be exercised without subjecting Landlord to claims for
constructive eviction, abatement of Rent, damages or other claims of any kind),
including more particularly, but without limitation, the following rights:


 


A.            General Matters.   To: (i) change
the name or street address of the Property or designation of the Premises, (ii) install
and maintain signs on the exterior and interior of the Property, and grant any
other Person the right to do so, (iii) retain at all times, and use in appropriate
instances, keys to all doors within and into the Premises, except for secured
areas identified to Landlord in writing (iv) grant to any Person the right
to conduct any business or render any service at the Property, whether or not
the same are similar to the use permitted Tenant by this Lease, (v) grant
any Person the right to use separate security personnel and systems respecting
access to their premises, (vi) have access for Landlord and other tenants
of the Property to any mail chutes located on the Premises according to the rules of
the United States Postal Service (and to install or remove such chutes), and (vii) in
case of fire, invasion, insurrection, riot, civil disorder, public excitement
or other dangerous condition, or threat thereof: (a) limit or prevent
access to the Property, (b) shut down elevator service, (c) activate
elevator emergency controls, and (d) otherwise take such reasonable action or
preventative measures deemed necessary by Landlord for the safety of tenants of
the Property or the protection of the Property and other property located
thereon or therein (but this provision shall impose no duty on Landlord to take
such actions, and no liability for actions taken in good faith).


 


B.            Access To Premises.   To
enter the Premises in order to: (i) inspect, (ii) supply cleaning
service or other services to be provided Tenant hereunder, (iii) show the
Premises to current and prospective Lenders, insurers, purchasers, tenants, brokers
and governmental authorities, (iv) decorate, remodel or alter the Premises
if Tenant shall abandon the Premises at any time, or shall vacate the same during
the last 120 days of the Term (without thereby terminating this Lease), and (v) perform
any work or take any other actions under Paragraph (C) below, or exercise
other rights of Landlord under this Lease or applicable Laws. However, Landlord
shall: (a) provide reasonable advance written or oral notice to Tenant’s
on-site manager or other appropriate person for matters which will involve a
significant disruption to Tenant’s business (except in emergencies), (b) take
reasonable steps to minimize any significant disruption to Tenant’s business, and
following completion of any work, return Tenant’s leasehold improvements, fixtures,
property and equipment to the original locations and condition to the fullest
extent reasonably possible, and (c) take reasonable steps to avoid
materially changing the configuration or reducing the square footage of the
Premises, unless required by Laws or other causes beyond Landlord’s reasonable control
(and in the event of any permanent material reduction, the Rent and other
rights and obligations of the parties based on the square footage of the
Premises shall be proportionately reduced). Tenant shall not place partitions,
furniture or other obstructions in the Premises which may prevent or impair Landlord’s
access to the Systems and Equipment for the Property or the systems and
equipment for the Premises. If Tenant requests that any such access occur
before or after Landlord’s regular business hours and Landlord approves, Tenant
shall pay all overtime and other additional costs in connection therewith.


 


C.            Changes To The Property.   To: (i)
paint and decorate, (ii) perform repairs or maintenance, and (iii) make
replacements, restorations, renovations, alterations, additions and improvements,
structural or otherwise (including freon retrofit work), in and to the Property
or any part thereof, including any adjacent building, structure, facility, land,
street or alley, or change the uses thereof (including changes, reductions or
additions of corridors, entrances, doors, lobbies, parking facilities and other
areas, structural support columns and shear walls, elevators, stairs,
escalators, mezzanines, solar tint windows or film, kiosks, planters,
sculptures, displays, and other amenities and features therein, and changes
relating to the connection with or entrance into or use of the Property or any
other adjoining or adjacent building or buildings, now existing or hereafter
constructed). In connection with such matters, Landlord may among other things
erect scaffolding, barricades and other structures, open ceilings, close entry
ways, restrooms, elevators, stairways,
corridors, parking and other areas and facilities, and take such other actions
as Landlord deems appropriate. However, Landlord shall: (a) take reasonable
steps to minimize or avoid any denial of access to the Premises except when
necessary on a temporary basis, and (b) in connection with entering the
Premises shall comply with Paragraph B above.


 


D.            New Premises.   To substitute for the Premises other premises
(herein referred to as the “new premises”) in the Property, provided: (i) the
new premises shall be similar to the Premises in size (up to 10% larger or
smaller with the Rent and any other rights and obligations of the parties based
on the square footage of the Premises adjusted proportionately to reflect the any
decrease), (ii) Landlord shall provide the new premises in a condition substantially
comparable to the Premises at the time of the substitution (and Tenant shall
diligently cooperate


 


19





















 


in the preparation or approval of any plans or specifications for the
new premises as requested by Landlord or Landlord’s representatives), (iii) the
parties shall execute an appropriate amendment to the Lease confirming the
change within thirty (30) days after Landlord requests, and (iv) if Tenant
shall already have taken possession of the Premises: (a) Landlord shall
pay the direct, out-of-pocket, reasonable expenses of Tenant in moving from the
Premises to the new premises, and (b) Landlord shall give Tenant at least
thirty (30) days’ notice before making such change, and such move shall be made
during evenings, weekends, or otherwise so as to incur the least inconvenience
to Tenant. Tenant shall surrender and vacate the Premises on the date required
in Landlord’s notice of substitution, in the condition and as required under Article 23,
and any failure to do so shall be subject to Article 24.


 


ARTICLE 21: LANDLORD’S RIGHT
TO CURE


 


If Landlord shall
fail to perform any obligation under this Lease required to be performed by
Landlord, Landlord shall not be deemed to be in default hereunder nor subject
to any claims for damages of any kind, unless such failure shall have continued
for a period of thirty (30) days after notice thereof by Tenant (provided, if
the nature of Landlord’s failure is such that more time is reasonably required
in order to cure, Landlord shall not be in default if Landlord commences to
cure within such period and thereafter diligently seeks to cure such failure to
completion). If Landlord shall default and failure to cure as provided herein,
Tenant shall have such rights and remedies as may be available to Tenant under
applicable Laws, subject to the other provisions of this Lease; provided,
Tenant shall have no right of self-help to perform repairs or any other
obligation of Landlord, and shall have no right to withhold, set-off, or abate
Rent, or terminate this Lease, and Tenant hereby expressly waives the benefit
of any Law to the contrary.


 


ARTICLE 22: INDEMNIFICATION


 


Tenant shall
defend, indemnify and hold Landlord harmless from and against any and all
claims, demands, losses, penalties, fines, fees, charges, assessments,
liabilities, damages, judgments, orders, decrees, actions, administrative or
other proceedings, costs and expenses (including court costs, attorneys’ fees,
and expert witness fees), including consequential damages, and any diminution
in value or loss or interference with the transfer, use or enjoyment of the
Premises, Property or other property or business or affecting title thereto,
howsoever caused, which directly or indirectly relate to or result wholly or in
part from, or are alleged to relate to or arise wholly or in part from: (i) any
violation or breach of this Lease or applicable Law by any Tenant Parties (as
defined below), (ii) damage, loss or injury to persons, property or
business occurring in, about or from the Premises, (iii) damage, loss or
injury to persons, property or business directly or indirectly arising out of
any Tenant Party’s use of the Premises or Property, or out of any other act or
omission of any Tenant Parties. For purposes of this provision, “Tenant Parties”
shall mean Tenant, any other occupant of the Premises and any of their
respective agents, employees, invitees, Transferees and contractors. Without
limiting the generality of the foregoing, Tenant specifically acknowledges that
the undertaking herein shall apply to claims in connection with or arising out
of any “Work” as described in Article 9, the installation, maintenance,
use or removal of any “Lines” as described in Article 29, the
transportation, use, storage, maintenance, generation, manufacturing, handling,
disposal, release, discharge, spill or leak of any “Hazardous Material” as
described in Article 30, and violations of Tenant’s responsibilities
respecting the Disabilities Acts as described in Article 31 (whether or
not any of such matters shall have been theretofore approved by Landlord).
Notwithstanding the foregoing to the contrary, the foregoing indemnity shall
not apply to claims finally determined by a court of competent jurisdiction to
have been caused solely by the gross negligence or willful misconduct of the
party seeking to be indemnified.


 


ARTICLE 23: RETURN OF POSSESSION


 


At the expiration
or earlier termination of this Lease or Tenant’s right of possession, Tenant
shall vacate and surrender possession of the entire Premises in the condition
required under Article 8 and the Rules, ordinary wear and tear excepted, shall
surrender all keys and key cards, and any parking transmitters, stickers or
cards, to Landlord, and shall remove all personal property and office trade
fixtures that may be readily removed without damage to the Premises or
Property. All improvements, fixtures and other items, including ceiling light
fixtures, HVAC equipment, plumbing fixtures, hot water heaters, fire
suppression and sprinkler systems, “Lines”


 


20





















 


under Article 29, interior stairs, wall coverings, carpeting and
other flooring, blinds, drapes and window treatments, in or serving the
Premises, whether installed by Tenant or Landlord, shall be Landlord’s property
and shall remain upon the Premises, all without compensation, allowance or
credit to Tenant, unless Landlord elects otherwise as provided herein. If prior
to such termination or within three (3) months thereafter Landlord so
directs by notice, Tenant shall promptly remove such of the foregoing items as
are designated in such notice and restore the Premises to the condition prior
to the installation of such items in a good and workmanlike manner; provided,
Landlord shall not require removal of customary office improvements installed
with Landlord’s written approval (except as expressly and reasonably required
by Landlord in connection with granting such approval). If Tenant shall fail to
perform any repairs or restoration, or fail to remove any items from the
Premises required hereunder, Landlord may do so and Tenant shall pay Landlord’s
actual, reasonable charges therefor upon demand. All property removed from the
Premises by Landlord pursuant to any provisions of this Lease or any Law may be
handled or stored by Landlord at Tenant’s expense, and Landlord shall in no
event be responsible for the value, preservation or safekeeping thereof. All
property not removed from the Premises or retaken from storage by Tenant within
thirty (30) days after expiration or earlier termination of this Lease or
Tenant’s right to possession, shall at Landlord’s option be conclusively deemed
to have been conveyed by Tenant to Landlord as if by bill of sale without
payment by Landlord. Unless prohibited by applicable Law, Landlord shall have a
lien against such property for the costs incurred in removing and storing the
same. Tenant hereby waives any statutory notices to vacate or quit the Premises
upon expiration of this Lease.


 


ARTICLE 24: HOLDING OVER


 


Unless Landlord
expressly agrees otherwise in writing, Tenant shall pay Landlord 200% of the
amount of Rent then applicable prorated on a per diem basis for each day Tenant
shall fail to vacate or surrender possession of the Premises or any part
thereof after expiration or earlier termination of this Lease as required under
Article 23, together with all damages (direct and consequential) sustained
by Landlord on account thereof. Tenant shall pay such amounts on demand, and,
in the absence of demand, monthly in advance. The foregoing provisions, and
Landlord’s acceptance of any such amounts, shall not serve as permission for
Tenant to hold-over, nor serve to extend the Term (although Tenant shall remain
a tenant-at-sufferance bound to comply with all provisions of this Lease until
Tenant properly vacates the Premises, and shall be subject to the provisions of
Article 23). Landlord shall have the right at any time after expiration or
earlier termination of this Lease or Tenant’s right to possession to reenter
and possess the Premises and remove all property and persons therefrom, and
Landlord shall have such other remedies for holdover as may be available to
Landlord under other provisions of this Lease or applicable Laws.


 


ARTICLE 25: NOTICES


 


Except as
expressly provided to the contrary in this Lease, every notice or other
communication to be given by either party to the other with respect hereto or
to the Premises or Property, shall be in writing and shall not be effective for
any purpose unless the same shall be served personally or by national air
courier service, or United States certified mail, return receipt requested,
postage prepaid, to the parties at the addresses set forth in Article 1,
or such other address or addresses as Tenant or Landlord may from time to time
designate by notice given as above provided. Every notice or other
communication hereunder shall be deemed to have been given as of the third
business day following the date of such mailing (or as of any earlier date
evidenced by a receipt from such national air courier service or the United
States Postal Service) or immediately if personally delivered. Notices not sent
in accordance with the foregoing shall be of no force or effect until received
by the foregoing parties at such addresses required herein.


 


ARTICLE 26: REAL ESTATE
BROKERS


 


Tenant represents
that Tenant has dealt only with the broker, if any, designated in Article 1
(whose commission, if any, shall be paid by Landlord pursuant to separate
agreement) as broker, agent or finder in connection with this Lease, and agrees
to indemnify and hold Landlord harmless from all damages, judgments,
liabilities and expenses (including reasonable attorneys’ fees) arising from
any claims or demands of any other broker, agent or finder with whom Tenant


 


21





















 


has dealt for any commission or fee alleged to be due in connection
with its participation in the procurement of Tenant or the negotiation with
Tenant of this Lease.


 


ARTICLE 27: NO WAIVER


 


No provision of this Lease will be deemed waived by
either party unless expressly waived in writing and signed by the waiving
party. No waiver shall be implied by delay or any other act or omission of
either party. No waiver by either party of any provision of this Lease shall be
deemed a waiver of such provision with respect to any subsequent matter
relating to such provision, and Landlord’s consent or approval respecting any
action by Tenant shall not constitute a waiver of the requirement for obtaining
Landlord’s consent or approval respecting any subsequent action. Acceptance of
Rent by Landlord directly or through any agent or lockbox arrangement shall not
constitute a waiver of any breach by Tenant of any term or provision of this
Lease (and Landlord reserves the right to return or refund any untimely
payments if necessary to preserve Landlord’s remedies). No acceptance of a
lesser amount of Rent shall be deemed a waiver of Landlord’s right to receive
the full amount due, nor shall any endorsement or statement on any check or
payment or any letter accompanying such check or payment be deemed an accord
and satisfaction, and Landlord may accept such check or payment without prejudice
to Landlord’s right to recover the full amount due. The acceptance of Rent or
of the performance of any other term or provision from, or providing directory
listings or services for, any Person other than Tenant shall not constitute a
waiver of Landlord’s right to approve any Transfer. No delivery to, or
acceptance by, Landlord or its agents or employees of keys, nor any other act
or omission of Tenant or Landlord or their agents or employees, shall be deemed
a surrender, or acceptance of a surrender, of the Premises or a termination of
this Lease, unless stated expressly in writing by Landlord.


 


ARTICLE 28: SAFETY AND
SECURITY DEVICES, SERVICES AND PROGRAMS


 


The parties acknowledge that safety and security
devices, services and programs provided by Landlord, if any, while intended to
deter crime and ensure safety, may not in given instances prevent theft or
other criminal acts, or ensure safety of persons or property. The risk that any
safety or security device, service or program may not be effective, or may
malfunction, or be circumvented by a criminal, is assumed by Tenant with
respect to Tenant’s property and interests, and Tenant shall obtain insurance
coverage to the extent Tenant desires protection against such criminal acts and
other losses, as further described in Article 10. Tenant agrees to cooperate
in any reasonable safety or security program developed by Landlord or required
by Law.


 


ARTICLE 29:
TELECOMMUNICATION LINES


 


A.            Telecommunication Lines.   Subject to Landlord’s continuing right of
supervision and approval, and the other provisions hereof, Tenant may: (i) install
telecommunication lines (“Lines”) connecting the Premises to Landlord’s
terminal block on the floor or floors on which the Premises are located, or (ii) use
such Lines as may currently exist and already connect the Premises to such
terminal block. Landlord’s predecessor or independent contractor has heretofore
connected such terminal block through riser system Lines to Landlord’s main distribution
frame (“MDF”) for the Property. Landlord disclaims any representations,
warranties or understandings concerning the capacity, design or suitability of
Landlord’s riser Lines, MDF or related equipment. If there is, or will be, more
than one tenant on any floor, at any time, Landlord may allocate, and
periodically reallocate, connections to the terminal block based on the proportion
of square feet each tenant occupies on such floor, or the type of business
operations or requirements of such tenants, in Landlord’s reasonable
discretion. Landlord may arrange for an independent contractor to review Tenant’s
requests for approval hereunder, monitor or supervise Tenant’s installation,
connection and disconnection of Lines, and provide other such services, or
Landlord may provide the same. In each case, Tenant shall pay Landlord’s
reasonable fees and costs therefor as provided in Article 9.


 


B.            Installation.   Tenant may install and use Tenant’s
Lines and make connections and disconnections at the terminal blocks as
described above, provided Tenant shall: (i) obtain Landlord’s prior
written approval of all aspects thereof, (ii use an experienced and qualified contractor
designated or approved in writing in advance by Landlord (whom Landlord may
require to enter an access and indemnity agreement on Landlord’s then standard
form of agreement therefor), (iii) comply with such inside wire standards
as Landlord may adopt from time to time, and all other provisions of this
Lease, including Article 9 respecting Work, and the Rules


 


22





















 


respecting access to the
wire closets, (iv) not install Lines in the same sleeve, chase way or other
enclosure in close proximity
with electrical wire, and not install PVC-coated Lines under any circumstances,
(v) thoroughly test any riser Lines to which Tenant intends to connect any
Lines to ensure that such riser Lines are available and are not then connected
to or used for telephone, data transmission or any other purpose by any other
party (whether or not Landlord has previously approved such connections), and
not connect to any such unavailable or connected riser Lines, and (vi) not
connect any equipment to the Lines which may create an electromagnetic field
exceeding the normal insulation ratings of ordinary twisted pair riser cable or
cause radiation higher than normal background radiation, unless the Lines
therefor (including riser Lines) are appropriately insulated to prevent such
excessive electromagnetic fields or radiation (and such insulation shall not be
provided by the use of additional unused twisted pair Lines). As a condition to
permitting installation of new Lines, Landlord may require that Tenant remove
any existing Lines located in or serving the Premises.


 


C.            Limitation of Liability.   Unless due solely to Landlord’s intentional misconduct or grossly
negligent acts, Landlord shall have no liability for damages arising, and
Landlord does not warrant that the Tenant’s use of the Lines will be free, from
the following (collectively called “Line Problems”): (i) any eavesdropping,
wire-tapping or theft of long distance access codes by unauthorized parties,
(ii) any failure of the Lines to satisfy Tenant’s requirements, or (iii)
any capacitance, attenuation,
cross-talk or other problems with the Lines, any misdesignation of the Lines in
the MDF room or wire closets, or any shortages, failures, variations,
interruptions, disconnections, loss or damage caused by or in connection with
the installation, maintenance, replacement, use or removal of any other Lines
or equipment at the Property by or for other tenants at the Property, by any
failure of the environmental conditions at or the power supply for the Property
to conform to any requirements of the Lines or any other problems associated
with any Lines or by any other cause. Under no circumstances shall any Line
Problems be deemed an actual or constructive eviction of Tenant, render
Landlord liable to Tenant for abatement of any Rent or other charges under the
Lease, or relieve Tenant from performance of Tenant’s obligations under the
Lease as amended herein. Landlord in no event shall be liable for damages by
reason of loss of profits, business interruption or other consequential damage
arising from any Line Problems.


 


ARTICLE 30: HAZARDOUS MATERIALS


 


A.            Hazardous Materials Generally
Prohibited.   Tenant shall not transport, use, store, maintain,
generate, manufacture, handle, dispose, release, discharge, spill or leak any “Hazardous
Material” (as defined below), or permit Tenant’s employees, agents,
contractors, or other occupants of the Premises to engage in such activities on
or about the Property. However, the foregoing provisions shall not prohibit the
transportation to and from, and use, storage, maintenance and handling within,
the Premises of substances customarily and lawfully used in the business which
Tenant is permitted to conduct in the Premises under this Lease, but only as an
incidental and minor part of such business, and provided: (i) such substances
shall be properly labeled, contained, used and stored only in small quantities
reasonably necessary for such permitted use of the Premises and the ordinary
course of Tenant’s business therein, strictly in accordance with applicable
Laws, highest prevailing standards, and the manufacturers’ instructions
therefor, and as Landlord shall reasonably require, (ii) Tenant shall provide
Landlord with ten (10) days advance notice and current Material Safety Data
Sheets (“MSDSs”) therefor, and Landlord reserves the right to prohibit or limit
such substances in each such instance, (iii)such substances shall not be disposed of, released, discharged or
permitted to spill or leak in or about the Premises or the Property (and under
no circumstances shall any Hazardous Material be disposed of within the drains
or plumbing facilities in or serving the Premises or Property or in any other
public or private drain or sewer, regardless of quantity or concentration),
(iv) if any applicable Law or Landlord’s trash removal contractor requires that
any such substances be disposed of separately from ordinary trash, Tenant shall
make arrangements at Tenant’s expense for such disposal in approved containers
directly with a qualified and licensed disposal company at a lawful disposal
site, (v) any remaining such substances shall be completely, properly and
lawfully removed from the Property upon expiration or earlier termination of
this Lease, and (vi) for purposes of removal and disposal of any such
substances, Tenant shall be named as the owner,
operator and generator, shall obtain a waste generator identification number,
and shall execute all permit applications, manifests, waste characterization
documents and any other required forms,


 


B.            Notifications and Records.   Tenant shall immediately notify Landlord of: (i) any inspection,
enforcement, cleanup or other regulatory action taken or threatened by any
regulatory authority with respect to any Hazardous Material on or from the
Premises or the migration thereof from or to other property, (ii any demands or claims made or threatened by
any party


 


23





















 


relating to any loss or
injury claimed to have resulted from any Hazardous Material on or from the
Premises, (iii) any release, discharge, spill, leak, disposal or transportation
of any Hazardous  Material
on or from the Premises in violation of
this Article, and any damage, loss or injury to persons, property or
business resulting or claimed to have resulted therefrom, and (iv) any matters
where Tenant is required by Law
to give a notice to any regulatory authority respecting any Hazardous Materials
on or from the Premises. Landlord shall have the right (but not the obligation)
to notify regulatory authorities concerning actual and claimed violations of
this Article. Tenant shall immediately upon written request from time to time
provide Landlord with copies of all MSDSs, permits, approvals, memos, reports,
correspondence, complaints, demands, claims, subpoenas, requests, remediation and cleanup plans, and all papers of
any kind filed with or by any regulatory authority and any other books, records
or items pertaining to Hazardous Materials that are subject to the provisions of this Article (collectively
referred to herein as “Tenant’s Hazardous Materials Records”).


 


C.            Clean Up Responsibility.   If any Hazardous
Material is released, discharged or disposed of, or permitted to
spill or leak, in violation of the foregoing provisions, Tenant shall
immediately and properly clean up and remove the Hazardous Materials from the
Premises, Property and any other affected property and clean or replace any
affected personal property (whether or not owned by Landlord) in compliance with applicable Laws and then
prevailing industry practices and standards, at Tenant’s expense (without
limiting Landlord’s other remedies therefor). Such clean up and removal work (“Tenant
Remedial Work”) shall be considered Work under Article 9 and subject to the
provisions thereof, including Landlord’s prior written approval (except in
emergencies), and any testing, investigation, feasibility and impact studies, and
the preparation and implementation of any remedial action plan required by any
court or regulatory authority having jurisdiction or reasonably required by
Landlord. In connection therewith, Tenant shall provide documentation
evidencing that all Tenant Remedial Work or other action required hereunder has
been properly and lawfully completed (including a certificate addressed to
Landlord from a environmental consultant reasonably acceptable to Landlord, in
such detail and form as Landlord may reasonably require). If any Hazardous Material is released,
discharged, disposed of, or permitted to spill or leak on or about the Property
and is not caused by Tenant or other occupants of the Premises, or their
agents, employees, Transferees, or contractors, such release, discharge,
disposal, spill or leak shall be deemed casualty damage under Article 11 to the
extent that the Premises and Tenant’s use thereof is affected thereby; in such
case, Landlord and Tenant shall have the obligations and rights respecting such
casualty damage provided under this Lease.


 


D.            Hazardous Material Defined.   The term “Hazardous Material” for purposes hereof shall include, but
not be limited to: (i) any flammable, explosive, toxic, radioactive,
biological, corrosive or otherwise hazardous chemical, substance, liquid, gas,
device, form of energy, material or waste or component thereof, (ii)
petroleum-based products, diesel fuel, paints, solvents, lead, radioactive
materials, cyanide, biohazards, medical and infectious waste and “sharps”,
printing inks, acids, DDT, pesticides, ammonia compounds, and any other items
which now or subsequently are found to have an adverse effect on the
environment or the health and safety of persons or animals or the presence of
which require investigation or remediation under any Law or governmental
policy, and (iii) any item defined as a “hazardous substance”, “hazardous
material”, “hazardous waste”, “regulated substance” or “toxic substance” under
any federal, state or local Laws, and all regulations, guidelines, directives
and other requirements thereunder, all as may be amended or supplemented from
time to time. 


 


E.             Fees, Taxes, Fines and Remedies.   Tenant shall pay, prior to delinquency, any and all fees, taxes
(including excise taxes), penalties and fines arising from or based on Tenant’s
activities involving Hazardous Material on or about the Premises or Property,
and shall not allow such obligations to become a lien or charge against the
Property or Landlord. If Tenant violates any provision of this Article with
respect to any Hazardous Materials, Landlord may: (i) require that Tenant
immediately remove all Hazardous Materials from the Premises and discontinue using,
storing and handling Hazardous Materials in the Premises, and/or (ii) pursue
such other remedies as may be available to Landlord under this Lease or
applicable Law.


 


ARTICLE 31: DISABILITIES ACTS


 


The Parties acknowledge that
the Americans With Disabilities Act of 1990 (42 U.S.C. §12101 et seq.) and regulations and guidelines promulgated thereunder (“ADA”),
and any similarly motivated state and local Laws (“Local Barriers Acts”), as
the same may be amended and supplemented from time to time (collectively
referred to herein as the “Disabilities Acts”) establish requirements for
business operations, accessibility and barrier removal, and that such requirements may or may not apply to the
Premises and Property depending on, among other


 


24





















 


things: (i) whether Tenant’s
business is deemed a “public accommodation” or “commercial  facility”, (ii) whether such requirements are
“readily achievable”, and (iii) whether a given alteration affects a “primary
function area” or triggers “path of travel” requirements. The parties hereby
agree that: (a) Landlord shall perform any required ADA Title III and related
Local Barriers Acts compliance in the common areas, except as provided below,
(b) Tenant shall perform any required ADA Title III and related Local Barriers
Acts compliance in the Premises, and (c) Landlord may perform, or require that
Tenant perform, and Tenant shall be responsible for the cost of, ADA Title Ill
and related Local Barriers Acts “path of travel” and other requirements
triggered by any public accommodation or other use of, or alterations in, the
Premises. Tenant shall be responsible for ADA Title I and related Local
Barriers Acts requirements relating to Tenant’s employees, and Landlord shall
be responsible for ADA Title I and related Local Barriers Acts requirements
relating to Landlord’s employees.


 


ARTICLE 32:
DEFINITIONS


 


(A)          “Building” shall mean the structure (or the portion thereof
owned by Landlord) identified in Article 1.


 


(B)           “Default Rate” shall mean eighteen percent (18%) per
annum, or the highest rate permitted by applicable Law, whichever shall be
less.


 


(C)           “Expenses” shall mean all expenses, costs and amounts
(other than Taxes) of every kind and nature relating to the ownership,
management, repair, maintenance, replacement, insurance and operation of the
Property, including any amounts paid for: (i) utilities for the Property,
including electricity, power, gas, steam, oil or other fuel, water, sewer,
lighting,  heating, air
conditioning and ventilating, (ii) permits, licenses, inspections, warrants and
certificates necessary to operate, manage and lease the Property, (iii) costs
of complying with Laws, including any freon retrofitting and compliance with
the “Disabilities Acts” (as described in Article 31), (iv) Insurance Applicable to
the Property, not limited to that required under this Lease, and which may include earthquake, boiler,
rent loss, workers’ compensation and employers’ liability, builders’ risk,
automobile and other coverages, including a reasonable allocation of costs
under any blanket policies, (v) supplies, materials, tools, equipment,
uniforms, and vehicles used in
the operation, repair, maintenance, security, and other services for the
Property, including rental, installment purchase and financing agreements
therefor and interest thereunder, (vi) accounting, legal, inspection,
consulting, concierge, alarm monitoring, security, janitorial, trash removal,
snow and ice removal, and other services, (vii) management company fees (which
shall not be in excess of those
fees charged by comparable on-site management companies in competing Class A
buildings in comparable locations in Seattle Central Business District), (viii)
wages, salaries and other compensation and benefits (including health, life and
disability insurance, savings,
retirement and pension programs, and the fair value of any parking privileges,
including those provided through collective bargaining agreements) for any
manager and other personnel or parties engaged in the operation, repair,
maintenance, security or other services for the Property, and employer’s FICA
contributions, unemployment taxes or insurance, any other taxes which may be
levied on such wages, salaries, compensation and benefits, and data or payroll
processing expenses relating thereto (if the manager or other personnel handle
other properties, the foregoing expenses shall be allocated appropriately
between the Property and such other properties), (ix) payments pursuant to any
easement, cross or reciprocal easement, operating agreement, development and/or
parking rights agreement, declaration, covenant, or other agreement or
instrument pertaining to the payment or sharing of costs for common or parking
areas or other matters (except to the extent Included in Taxes hereunder), (x)
parking surcharges or fees that may result from any environmental or other Law or
guideline, and any sales, use, value-added or other taxes on supplies or
services for the Property, (xi) the costs of operating and maintaining any
on-site office at the Property or an adjoining property (such costs to be
appropriately allocated between the Property and any such adjoining property
served by such office), including the fair rental value thereof, telephone
charges, postage, stationery and Photocopying expenses, and telephone directory
listings, (xii) the amount of insurance premiums saved by electing higher than
customary deductibles, if Landlord does not also include in Expenses the losses
incurred as a result of having such higher deductibles, (xiii) the Cost of auditing,
assessing and implementing Year 2000 Performance solutions under Article 34,
and (xiv) operation, maintenance, repair, installation, replacement,
inspection, testing, painting, decorating and cleaning of the Property, and any
items located off-site but installed for the benefit of the Property, including:
(a) Property identification and pylon signs, directional signs, traffic signals
and markers, flagpoles and canopies, (b) sidewalks, curbs, stairways, parking structures,
lots, loading and service areas and driveways, (c) storm and sanitary drainage
systems, including disposal plants, lift stations and detention ponds and
basins, (d) irrigation systems, (e) elevators, escalators, “Lines” under
Article 29, and other Systems and Equipment,


 


25





















 


(f) interior and exterior
flowers and landscaping, and (g) all other portions, facilities, features and
amenities of the Property,
including common area fixtures, equipment and other items therein or thereon,
floors, floor coverings, corridors, ceilings, foundations, walls,
wall-coverings, restrooms, lobbies, trash compactors, doors, locks and
hardware, windows, gutters, downspouts, roof flashings and roofs. The foregoing provision is for definitional
purposes only and shall not be construed
to impose any obligation upon Landlord to incur such expenses. Landlord may
retain independent contractors (or affiliated contractors at market rates) to
provide any services or perform
any work, in which case the costs thereof shall be deemed Expenses. Expenses
shall not, however, include:


 


(1)           costs relating to non-office rentable areas of the
Property to the extent that Landlord deducts Such rentable areas in determining Tenant’s Share of Expenses under Article 4; and costs relating solely to any
parking garage for the Property (such as utilities, attendants, cashiers, scavenger and
janitorial services), except to the extent that Landlord elects to credit
parking revenues, if any, derived from such garage against Expenses;


 


(2)           depreciation, interest and amortization on
any Mortgages and other debt costs
or ground lease payments (except interest on the cost of capital expenditures
to the extent permitted below, and ground lease payments for Taxes and
Expenses); legal fees in connection with leasing, tenant disputes or
enforcement of leases; real estate brokers’ leasing commissions; improvements or alterations to tenant spaces;
the cost of providing any service directly to, and paid directly by, any
tenant; costs of any items to the extent Landlord receives reimbursement from
insurance proceeds or from a third party (excluding payments by tenants for
Taxes and Expenses); and 


 


(3)           capital expenditures, except those: (i) made primarily to
reduce Expenses,  or to
comply with Laws or insurance requirements imposed after the Property was constructed,
or (ii) for replacements or upgrades of nonstructural items located in the
common areas of the Property required to keep such areas in first class
condition. To the extent that any such permitted capital expenditure exceeds $5,000, such excess shall be
amortized for purposes of this Lease over the shorter of: (x) the period during
which the reasonably estimated savings in Expenses equals the expenditure, (y)
the shortest period over which Landlord may depreciate such item under the Federal Tax Code then in effect, or (z) the useful life of the item, but in no event more than
ten (10) years; provided, Landlord may elect any longer period in Landlord’s discretion.
In each such case, Landlord may include interest on the unamortized amount at
the prevailing loan rate available to Landlord when the cost was incurred.
Expenses shall include any remaining
amortization of such permitted capital expenditures made prior to the date of
this Lease.


 


(D)          “Holidays” shall mean all federal holidays, and holidays
observed by the State of  Washington,
including New Year’s Day, President’s Day, Memorial Day, Independence Day, Labor
Day, Veterans’ Day, Thanksgiving Day, Christmas Day, and to the extent of
utilities or services provided by union members engaged at the Property, such
other holidays observed by such unions.


 


(E)           “Landlord” shall mean only the landlord from time to time,
except for purposes of  any
provisions defending, indemnifying and holding Landlord harmless hereunder, “Landlord”
shall include past, present and future landlords and their respective partners,
beneficiaries, trustees, officers, directors, employees, shareholders,
principals, agents, affiliates, successors and assigns.


 


(F)           “Law” or “Laws” shall mean all federal, state, county and
local governmental and  municipal
laws, statutes, ordinances, rules, regulations, codes, decrees, orders and
other such requirements, applicable equitable remedies and decisions by courts
in cases where such decisions are considered binding precedents in the State of
Washington, and decisions of federal Courts applying the Laws of such State, at the time in question. This
Lease shall be interpreted and governed by the Laws of the State of Washington.


 


(G)           “Lender” shall mean the holder of any Mortgage at the time
in question, and  where
such Mortgage is a ground lease, such term shall refer to the ground lessor
(and the term “ground lease” although not separately capitalized is intended
through out this Lease to include any superior or master lease).


 


(H)          “Mortgage” shall mean all mortgages, deeds of trust, ground
leases and other  such
encumbrances now or hereafter placed upon the Property or Building, or any part
thereof, and all renewals, modifications, consolidations, replacements or
extensions thereof, and all indebtedness now or hereafter secured thereby and
all interest thereon.


 


26





















 


(I)            “Person” shall mean an individual, trust, partnership,
limited liability company,  joint
venture, association, corporation and any other entity.


 


(J)            “Premises” shall mean the area within the Building
identified in Article 1 and Exhibit A. Possession of areas necessary for
utilities, services, safety and operation of the Property, including the
Systems and Equipment, fire stairways, perimeter walls, space between the
finished ceiling of the Premises and the slab of the floor or roof of the
Property thereabove,  and
the use thereof together with the right to install, maintain, operate, repair
and replace the Systems and Equipment, including any of the same in, through,
under or above the Premises in locations that will not materially interfere
with Tenant’s use of the Premises, are hereby excepted and reserved by
Landlord, and not demised to Tenant.


 


(K)          “Property” shall mean the Building, and any common or
public areas or facilities,  easements,
corridors, lobbies, sidewalks, loading areas, driveways, landscaped areas, air
rights, development rights, parking rights, skywalks, parking garages and lots,
and any and all other rights, structures or facilities operated or maintained
in connection with or for the benefit of the Building, and all parcels or
tracts of land on which all or any portion of the Building or any of the other
foregoing items are located, and any fixtures, machinery, apparatus, Systems and Equipment, furniture and other
personal property located thereon or therein and used in connection therewith.


 


(L)           “Rent” shall have the meaning specified therefor in
Article 4.


 


(M)         “Systems and Equipment” shall mean any plant, machinery,
transformers, duct work, cable, wires, and other equipment, facilities, and
systems designed to supply light, heat, ventilation, air conditioning and
humidity or any other services or utilities, or comprising or serving as any
component or portion of the electrical, gas, steam, plumbing, sprinkler,
communications, alarm, security, or fire/life/safety systems or equipment, or
any elevators, escalators or other mechanical, electrical, electronic, computer
or other systems or equipment for the Property, except to the extent that any
of the same serves particular tenants exclusively (and “systems and equipment”
without capitalization shall refer to such of the foregoing items serving particular
tenants exclusively).


 


(N)          “Taxes” shall mean all amounts (unless required by Landlord
to be paid under Article 14) for federal, state, county, or local governmental,
special district, improvement district, municipal or other political
subdivision taxes, fees, levies, assessments, charges or other impositions of
every kind and nature in connection with the ownership, leasing and operation
of the Property, whether foreseen or unforeseen, general, special, ordinary or
extraordinary (including real estate and ad valorem taxes, general and special
assessments, interest on special assessments paid in installments, transit
taxes, water and sewer rents, license and business license fees, use or
occupancy taxes, taxes based upon the receipt of rent including gross receipts
or sales taxes applicable to the receipt of rent or service or value added
taxes, personal property taxes, taxes on fees for property management services,
and taxes or charges for fire protection, streets, sidewalks, road maintenance,
refuse or other services). If the
method of taxation of real estate prevailing at the time of execution hereof
shall be, or has been, altered so as to cause the whole or any part of the
Taxes now, hereafter or heretofore levied, assessed or imposed on real estate
to be levied, assessed or imposed on Landlord, wholly or partially, as a capital
stock levy or otherwise, or on or measured by the rents, income or gross
receipts received therefrom, then such new or altered taxes attributable to the
Property shall be included within the term “Taxes,” except that the same shall
not include any portion of such tax attributable to other income of Landlord
not relating to the Property. Tenant shall pay increased Taxes whether Taxes
are increased as a result of increases in the assessment or valuation of the
Property (whether based on a sale, change in ownership or refinancing of the
Property or otherwise), increases in tax rates, reduction or elimination of any
rollbacks or other deductions available under current  law, scheduled reductions of any tax abatement, as a result of the
elimination, invalidity or withdrawal of any tax abatement, or for any other
cause whatsoever. If Taxes are reduced by, or credited with, any abatement or
exemption issued by a taxing authority to help finance or reimburse Landlord
for costs incurred to comply with Laws or otherwise,
Taxes hereunder shall be computed without regard to such abatement or exemption
(Tenant hereby acknowledging that Landlord, having incurred such costs, is
solely entitled to such abatement or exemption), except to the extent that
Landlord includes such costs in Expenses under this Lease. Notwithstanding the
foregoing, there shall be excluded from Taxes all excess profits taxes,
franchise taxes, gift taxes, capital stock taxes, inheritance and succession
taxes, estate taxes, federal and state income taxes, and other taxes to the
extent applicable to Landlord’s general or net income (as opposed to rents, receipts or income attributable
to operations at the Property).


 


27





















 


(O)          “Tenant” shall be applicable to one or more Persons as the
case may be, the singular shall
include the plural, and if there be more than one Tenant, the obligations
thereof shall be joint and several. When used in the lower case, “tenant” shall
mean any other tenant, subtenant or occupant of the Property.


 


(P)           “Tenant’s Share” of Taxes and Expenses shall be the
percentage set forth in Article 1, but if the rentable area of the Premises or
Property shall change, Tenant’s Share shall thereupon become the rentable area
of the Premises divided by the rentable area of the Property, excluding any
parking facilities, subject at all times to adjustment under Article 4. Tenant
acknowledges that the “rentable area of the Premises” under this Lease includes
the usable area, without deduction for columns or projections, multiplied by a
load or conversion factor, to reflect a share of certain areas, which may
include lobbies, corridors, mechanical, utility, janitorial, boiler and service
rooms and closets, restrooms, and other public, common and service areas.
Except as provided expressly to the contrary herein, the “rentable area of the
Property” shall include all rentable area of all space leased or available for
lease at the Property, which Landlord may reasonably re-determine from time to
time, to reflect re-configurations, additions or modifications  to the Property.


 


ARTICLE 33:
OFFER


 


The submission and
negotiation of this Lease shall not be deemed an offer to enter the same by
Landlord (nor an option or reservation for the Premises), but the solicitation
of such an offer by Tenant. Tenant agrees that its execution of this Lease
constitutes a firm offer to enter the same which may not be withdrawn for a
period of thirty (30) days after delivery to Landlord. During such period and
in reliance on the foregoing, Landlord may, at Landlord’s option, deposit any
Security Deposit and Rent, proceed with any plans, specifications, alterations
or improvements, and permit Tenant to enter the Premises, but such acts shall
not be deemed an acceptance of Tenant’s offer to enter this Lease, and such
acceptance shall be evidenced only by Landlord signing and delivering this
Lease to Tenant.


 


ARTICLE 34: YEAR 2000 PERFORMANCE


 


Landlord is in the process
of performing a readiness audit with respect to Year 2000 Performance. As used
herein, the term “Year 2000 Performance” means that the Systems and Equipment
under Landlord’s control which are material to proper Building operations can
reasonably be expected to perform without material adverse effect despite the
change of century from 1999 to 2000 and the leap year. The parties acknowledge
that the process of auditing, assessing and implementing Year 2000 Performance
solutions is time consuming and uncertain, and dependent in part on the
performance of third parties not under Landlord’s control. Thus, Landlord makes
no representations or warranties with respect to Year 2000 Performance of the
Systems and Equipment, and interruptions of services as a result of Year 2000
Performance problems will be deemed to be interruptions out of Landlord’s
reasonable control. Landlord will inform Tenant promptly after Landlord gains
actual knowledge of any significant Year 2000 performance problem which
Landlord reasonably believes may adversely impact building operations, and will
use commercially reasonable efforts to audit, assess and implement programs to
meet the goal of Year 2000 performance. The cost of such efforts shall be
included in Expenses in the year incurred, provided, however, that capital
replacement costs, if any, shall be amortized over the useful life of the
replacement. Some information may be obtained from third parties, and may not
have been independently verified. Any information which Landlord provides will
be subject to and made in reliance on the Year 2000 Information Readiness and
Disclosure Act.


 


ARTICLE 35:
MISCELLANEOUS


 


A.            Captions and Interpretation.   The captions of the Articles and Paragraphs of this Lease, and any
computer highlighting of changes from earlier drafts, are for convenience of
reference only and shall not be considered or referred to in resolving
questions of interpretation. Tenant acknowledges that it has read this Lease
and that it has had the opportunity to confer with counsel in negotiating this
Lease; accordingly, this Lease shall be construed neither for nor against
Landlord or Tenant, but shall be given a fair and reasonable interpretation in
accordance


 


28





















 


with the meaning of its
terms. The nouter shall include the masculine and feminine, and the  singular shall include the plural. The term “including”
shall be interpreted to mean “including, but not limited to.”


 


B.            Survival of Provisions.   All obligations (including indemnity, Rent and other payment obligations) or rights of either
party arising during or attributable to the period prior to expiration or
earlier termination of this Lease shall survive such expiration or earlier
termination.


 


C.            Severability.   If
any term or provision of this Lease or portion thereof shall be found invalid,
void, illegal, or unenforceable generally or with respect to any particular
party, by a court of competent
jurisdiction, it shall not affect, impair or invalidate any other terms or
provisions or the remaining portion thereof, or its enforceability with respect
to any other party.


 


D.            Failure to Commence.   If the Commencement Date is delayed in accordance with Article 3 for more than nine (9) months,
Landlord may declare this Lease terminated by notice to Tenant, and if the Commencement Date is so delayed
for more than three years, this Lease shall thereupon be deemed terminated
without further action by either party.


 


E.             Short Form Lease.   Neither this Lease nor any memorandum of
lease or short form lease shall
be recorded by Tenant, but Landlord or any Lender may elect to record a short
form of this Lease, in which case Tenant shall promptly execute, acknowledge
and deliver the same on a form prepared by Landlord or such Lender.


 


F.             Light, Air and Other Interests.   This Lease does not grant any legal rights to “light and air” outside the Premises nor any
particular view visible from the Premises, nor any easements, licenses or other
interests unless expressly contained in this Lease.


 


G.            Authority.   If Landlord or Tenant is any form of
corporation, partnership, limited liability
company or partnership, association or other organization, such party below
hereby represent that this Lease has been fully authorized and no further
approvals are required, and such party is duly organized, in good standing and
legally qualified to do business in the Premises (and has any required certificates, licenses, permits and other such
items).


 


H.            Partnership Tenant.   If Tenant is a partnership, all current and new general partnersshall be jointly and severally liable
for all obligations of Tenant hereunder and as this Lease may hereafter be
modified, whether such obligations accrue before or after admission of future partners
or after any partners die or leave the partnership. Tenant shall cause each new
partner to sign and deliver to
Landlord written confirmation of such liability, in form and content satisfactory
to Landlord, but failure to do so shall not avoid such liability.


 


I.              Financial Statements.   Tenant shall, within ten (10) days
after requested from time to
time, deliver to Landlord financial statements (including balance sheets and income/expense
statements) for Tenant’s then most recent full and partial fiscal year
preceding such request,
certified by an independent certified public accountant or Tenant’s chief
financial officer, in form reasonably satisfactory to
Landlord. Landlord shall keep
such information confidential in the manner consistent with Landlord’s normal
course of business.


 


J.             Successors and Assigns;   Transfer of Property and Security Deposit. Each
of the terms and provisions of
this Lease shall be binding upon and inure to the benefit of the parties’ respective
heirs, executors, administrators, guardians, custodians, successors and
assigns, subject to Article 13 respecting Transfers and Article 18 respecting
rights of Lenders. Subject to Article
18, if Landlord shall convey or transfer the Property or any portion thereof in
which the Premises are contained to
another party, such party shall thereupon be and become landlord hereunder and
shall be deemed to have fully assumed all of Landlord’s obligations under this
Lease accruing during such party’s ownership, including the return of any
Security Deposit (provided Landlord shall have turned over such Security
Deposit to such party), and Landlord shall be free of all such obligations
accruing from and after the date of conveyance or transfer.


 


K.            Limitation of Landlord’s Liability.   Tenant agrees to look solely to Landlord’s interest in the Property for the enforcement
of any judgment, award, order or other remedy under or in connection with this
Lease or any related agreement, instrument or document or for any other matter
whatsoever relating thereto or to the Property or Premises. Under no
circumstances shall any present
or future, direct or indirect, principals or investors, general or limited
partners, officers, directors, shareholders, trustees, beneficiaries,
participants, advisors, managers, employees, agents or affiliates of Landlord,
or of any of the other foregoing parties, or any of their heirs, successors or
assigns have any liability for any of the foregoing matters.


 


29





















 


L.            Confidentiality.   Tenant shall keep the content and all copies of this Lease, relateddocuments or amendments now or
hereafter entered, and all proposals, materials, information and matters
relating thereto strictly confidential, and shall not disclose, disseminate or
distribute any of the same, or permit the same to occur, except to the extent
reasonably required for proper business purposes by Tenant’s employees,
attorneys, insurers, auditors, lenders and Transferees (and Tenant shall
obligate any such parties to whom disclosure is permitted to honor the confidentiality
provisions hereof), and except as may be required by Law or court proceedings.


 


ARTICLE 36: ENTIRE AGREEMENT


 


This Lease, together with
the Riders, Exhibits and other documents listed in Article 1 (WHICH COLLECTIVELY ARE
HEREBY INCORPORATED WHERE REFERRED TO HEREIN AND MADE A PART HEREOF AS THOUGH
FULLY SET FORTH), contains
all the terms and provisions between
Landlord and Tenant relating to the matters set forth herein and no prior orcontemporaneous agreement or
understanding pertaining to the same shall be of any force or effect, except
any such contemporaneous agreement specifically referring to and modifying this
Lease, signed by both parties. Without limitation as to the generality of the
foregoing, Tenant hereby acknowledges and agrees that Landlord’s leasing agents
and field personnel are only authorized
to show the Premises and negotiate terms and conditions for leases subject to Landlord’s
final approval, and are not authorized to make any agreements, representations,
understandings or obligations, binding upon Landlord, respecting the condition
of the Premises or Property,
suitability of the same for Tenant’s business, the current or future amount of
Taxes or Expenses or any
component thereof, the amount of rent or other terms applicable under other leases
at the Property, whether Landlord is furnishing the same utilities or services
to other tenants at all, on the same level or on the same basis, or any other
matter, and no such agreements,
representations, understandings or obligations not expressly contained herein
or in such contemporaneous agreement shall be of any force or effect. TENANT HAS RELIED ON TENANT’S INSPECTIONS AND DUE
DILIGENCE IN ENTERING THIS LEASE, AND NOT ON ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, CONCERNING THE HABITABILITY, CONDITION OR SUITABILITY OF
THE PREMISES OR PROPERTY FOR ANY PARTICULAR PURPOSE OR ANY OTHER MATTER NOT
EXPRESSLY CONTAINED HEREIN. Neither
this Lease, nor any Riders or Exhibits referred to above may be modified,
except in writing signed by both
parties.


 


IN WITNESS WHEREOF, the
parties have executed this Lease as of the date first set forth above.


 


 


	
   

  	
   

  	
  LANDLORD:

  	
  PIKE STREET DELAWARE,
  INC.,

  
	
   

  	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BY:

  	
   

  	
  /s/ Allison
  Delong

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TITLE: 

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BY:

  	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TITLE:

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  	
  EQUATOR
  TECHNOLOGIES, INC.,

  
	
   

  	
   

  	
   

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BY:

  	
   

  	
  /s/ Brian T. McGee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NAME
  TYPED: 

  	
   

  	
  Brian T. Mcgee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TITLE: 

  	
   

  	
   CFO

  	
   

  
										



 


CERTIFICATE


 


I,
Brian T. Mcgee, as
CFO of the aforesaid Tenant, hereby certify that the
individual(s) executing the foregoing Lease on behalf of Tenant was/were duly
authorized to act in his/their capacities as set forth above, and his/theiraction(s) are the action of Tenant.


 


 


	
  (Corporate Seal)

  	
   

  	
   

  	
  /s/ Brian T. Mcgee

  	
   

  



 


30





















 


LANDLORD ACKNOWLEDGMENTS


 


 


	
  STATE OF WASHINGTON

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF
  KING

  	
  )

  	
   

  



 


I, the undersigned, a Notary Public, in and for the County and State
aforesaid, do hereby certify that Allison Delong, personally known to me to be the Authorized Signatory of Pike Street
Delaware, Inc., a Delaware corporation, and personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in


person and acknowledged that
in such capacity of said corporation being authorized so to do, (s)he executed
the foregoing instrument on behalf of said corporation, by subscribing the name
of such corporation by himself /herself as such officer, as a free and voluntary
act, and as the free and voluntary act and deed of said corporation, as partner
or agent for the Landlord designated in  the foregoing instrument, for the uses and purposes therein set forth.


 


Given under my hand and
official seal this 19th day of April, 2001.


 


 


	
   

  	
  /s/ Sherri
  L. Pruett

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
   

  	
  Residing in King County

  



 


My Commission
Expires: 12-19-02


 


	
   

  	
   

  	
  [SEAL]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SHERRI L. PRUETT

  COMMISSION EXPIRES

  NOTARY PUBLIC

  12-19-02

  STATE OF WASHINGTON

  



 


TENANT ACKNOWLEDGMENTS


 


Corporation


 


	
  STATE OF:
  CALIF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.:

  
	
  COUNTY OF:
  SANTA CLARA

  	
  )

  	
   

  



 


On this the 12day of April, 2001, before me a Notary Public duly authorized in and for the said County in the State
aforesaid to take acknowledgments personally appeared Brian T. Mcgee known to me to
be Vice President of Equator
Technologies one of the corporations described in the foregoing instrument, and acknowledged that as such
officer, being authorized so to do, he executed the foregoing instrument on behalf of said
corporation by subscribing the name of such corporation by himself as such
officer and caused the corporate seal of said corporation to be affixed thereto,
as his free and voluntary act, and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth.


 


IN WITNESS WHEREOF, I
hereunto set my hand and official seal.


 


	
   

  	
  /s/ Jo Ann Chaney

  	
   

  
	
   

  	
  Notary
  Public

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Residing
  in Santacruz County

  	
   

  
	
   

  
	
  My
  Commission Expires: May 31, 2003

  



 


[SEAL]


 


JO ANN CHANEY


Commission # 1219986


Notary Public - California


Santa Cruz County


My Comm. Expires May 31, 2003


 


1





















 


EXHIBIT A-1


 


PROPERTY LEGAL DESCRIPTION


 


520 PIKE TOWER


 


Lots 10 and
11, Block 18, Addition to the Town of Seattle, as laid out by A.A. Denny
(commonly known as A.A. Denny’s 3rd Addition to the City of Seattle), according
to the plat thereof recorded in Volume 1 of Plats, page 33, in King County,
Washington, EXCEPT the southerly 10 feet of said Lot 11, condemned in King
County Superior Court Cause No. 41394 for the widening of Pike Street, as
provided by Ordinance No. 10051 of the City of Seattle.


 


SUBJECT TO AND TOGETHER WITH
all rights and obligations granted and undertaken pursuant to: (a) Development
and Parking Rights Agreement dated April 8, 1982 recorded under King County,
Washington recording number 8204080464, as amended by agreements recorded under
King County, Washington recording numbers 8208240318 and 8208240316, and as it
may be further amended from time to time, and (b) Development Rights Agreement dated
May 30, 1982 recorded under King County, Washington recording number
8208240314, as amended by agreement recorded under King County, Washington
recording number 8208240316, and a Memorandum dated December 5, 1988 recorded
under King County, Washington recording number 8812051221, and as it may be
further amended from time to time


 


 





















 


EXHIBIT A-2


 


(Floor Plate Showing Premises Cross-Hatched)


 





 





 





















 


RIDER ONE


 


RULES


 


(1) Access to Property.   On Saturdays, Sundays and
Holidays, and on other days between the hours of 6:00 P.M. and 8:00 A.M. the
following day, or such other hours as Landlord shall determine from time to
time, access to and within the Property and/or to the passageways, lobbies,
entrances, exits, loading areas, corridors, elevators or stairways and other
areas in the Property may be restricted  and access gained by use of a key to the outside
doors of the Property, or pursuant to such security procedures Landlord may
from time to time impose. Landlord shall in all cases retain the right to control
and prevent access to such areas by Persons engaged in activities which are
illegal or violate these Rules, or whose presence in the judgment of Landlord
shall be prejudicial to the safety, character, reputation and interests of the Property and its tenants (and
Landlord shall have no liability in damages for such actions taken in good
faith). No Tenant and no employee or invitee of Tenant shall enter areas
reserved for the exclusive use of Landlord, its employees or invitees or other
Persons. Tenant shall keep doors to corridors and lobbies closed except when
persons are entering or leaving.


 


(2) Signs.  Tenant shall not paint, display,
inscribe, maintain or affix any sign, placard, picture, advertisement, name,
notice, lettering or direction on any part of the outside or inside of the
Property, or on any part of the inside of the Premises which can be seen from
the outside of the Premises without the prior consent of Landlord, and then
only such name or names or matter and in such color, size, style, character and
material, and with professional designers, fabricators and installers as may be
first approved or designated by Landlord in writing. Landlord shall prescribe
the suite number and identification sign for the Premises (which shall be prepared
and installed by Landlord at Tenant’s expense). Landlord reserves the right to
remove at Tenant’s expense all matter not so installed or approved without
notice to Tenant.


 


(3) Window and
Door Treatments.   Tenant
shall not place anything or allow anything to be  placed in the Premises near the glass of any
door, partition, wall or window which may be unsightly from outside the
Premises, and Tenant shall not place or permit to be placed any article of any
kind on any window ledge or on the exterior walls. Blinds, shades, awnings or
other forms of inside or outside
window ventilators or similar devices, shall not be placed in or about the
outside windows or doors in the Premises except to the extent, if any, that the
design, character, shape, color, material and make thereof is first approved or
designated by the Landlord. Tenant shall not install or remove any solar tint
film from the windows.


 


(4) Lighting and General
Appearance of Premises.
Landlord reserves the right to designate and/or approve in writing all internal
lighting that may be visible from the public, common or exterior areas. The
design, arrangement, style, color, character, quality and general appearance of
the portion of the Premises visible from public, common and exterior areas, and
contents of such portion of the Premises, including furniture, fixtures, signs,
art work, wall coverings, carpet and decorations, and all changes, additions
and replacements thereto shall at all times have a neat, professional,
attractive, first class office appearance.


 


(5) Property
Tradename, Likeness, Trademarks.   Tenant shall not in any manner use the name of
the Property for any purpose, or use any tradenames or trademarks used by
Landlord, any other tenant, or its affiliates, or any picture or likeness of
the Property for any purpose other than that of the business address of Tenant,
in any letterheads, envelopes, circulars, notices, advertisements, containers,
wrapping or other material. 


 


(6) Deliveries
and Removals.   Furniture,
freight and other large or heavy articles, and all other  deliveries may be brought into the Property
only at times and in the manner designated by Landlord, and always at the
Tenant’s sole responsibility and risk. Landlord may inspect items brought into
the Property or Premises with respect to weight or dangerous nature or
compliance with this Lease or Laws.
Landlord may (but shall have no obligation to) require that all furniture,
equipment, cartons and other
articles removed from the Premises or the Property be listed and a removal
permit therefor first be obtained from Landlord. Tenant shall not take or
permit to be taken in or out of other entrances or elevators of the Property,
any item normally taken, or which Landlord otherwise reasonably requires to be
taken, in or out through service doors or on freight elevators. Landlord may
impose reasonable charges and
requirements for the use of freight elevators and loading areas, and reserves
the right to alter schedules without notice. Any hand-carts used at the
Property shall have rubber wheels and sideguards, and no other material
handling equipment may be brought upon the Property without Landlord’s prior
written approval.


 


(7) Outside
Vendors.   Tenant shall not obtain for use upon the Premises ice,
drinking water, vending machine, towel, janitor and other services, except from
Persons designated or approved by Landlord. Any Person engaged by Tenant to
provide any other services shall be subject to scheduling and direction by the
manager or security personnel of the Property. Vendors must use freight elevators
and service entrances. 


 


(8) Overloading Floors; Vaults.   Tenant
shall not overload any floor or part thereof in the Premises, or Property,
including any public corridors or elevators therein bringing in or removing any



 


R-1





















 


large or heavy articles, and
Landlord may prohibit, or direct and control the location and size of, safes
and all other heavy articles and
require at Tenant’s expense supplementary supports of such material and
dimensions as Landlord may deem necessary to properly distribute the weight. 


 


(9) Locks and
Keys.   Tenant shall use such
standard key system designated by Landlord on all  keyed doors to and within the Premises,
excluding any permitted vaults or safes (but Landlord’s designation shall not
be deemed a representation of adequacy to prevent unlawful entry or criminal acts,
and Tenant shall maintain such additional insurance as Tenant deems advisable
for such events). Tenant shall
not attach or permit to be attached additional locks or similar devices to any
door or window, change existing locks or the mechanism thereof, or make or
permit to be made any keys for any door other than those provided by Landlord.
If more than two keys for one lock are desired, Landlord will provide them upon
payment of Landlord’s charges. In the event of loss of any keys furnished by
Landlord, Tenant shall pay Landlord’s reasonable charges therefor. The term “key”
shall include mechanical, electronic or other keys, cards and passes. 


 


(10) Utility
Closets and Connections.  Landlord
reserves the right to control access to and use of, and monitor and supervise
any work in or affecting, the “wire” or telephone, electrical, plumbing or other
utility closets, the Systems and Equipment, and any changes, connections, new
installations, and wiring work relating thereto (or Landlord may engage or
designate an independent contractor to provide such services). Tenant shall obtain Landlord’s prior written consent for any
such access, use and work in each instance, and shall comply with such
requirements as Landlord may impose, and the other provisions of Article 6
respecting electric installations and connections, Article 29 respecting telephone
Lines and connections, and Article 9 respecting Work in general. Tenant shall
have no right to use any broom closets, storage closets, janitorial closets, or
other such closets, rooms and areas whatsoever. Tenant shall not install in or
for the Premises any equipment which requires more electric current than
Landlord is required to provide under this Lease, without Landlord’s prior
written approval, and Tenant shall ascertain from Landlord the maximum amount
of load or demand for or use of electrical current which can safely be
permitted in and for the Premises, taking into account the capacity of electric
wiring in the Property and the Premises and the needs of tenants of the
Property, and shall not in any event connect a greater load than such safe
capacity.


 


(11) Plumbing
Equipment.   The toilet rooms,
urinals, wash bowls, drains, sewers and other plumbing fixtures, equipment and
lines shall not be misused or used for any purpose other than that for which
they were constructed and no foreign substance of any kind whatsoever shall be
thrown therein.


 


(12) Trash.   All
garbage, refuse, trash and other waste shall be kept in the kind of container, placed
in the areas, and prepared for collection in the manner and at the times and
places specified by Landlord, subject to Article 30 respecting Hazardous
Materials. Landlord reserves the right to require that Tenant participate in
any recycling program designated by Landlord.


 


(13) Alcohol,
Drugs, Food and Smoking.   Landlord reserves the right to
exclude or expel from the Property any person who, in the judgment of Landlord,
is intoxicated or under the influence of liquor or drugs, or who
shall in any manner do any act in violation of any of these Rules. Tenant shall
not at any time manufacture, sell, use or give away, any spirituous, fermented,
intoxicating or alcoholic liquors on the Premises, nor permit any of the same
to occur. Tenant shall not at any time cook, sell, purchase or give away, food
in any form by or to any of Tenant’s agents or employees or any other parties
on the Premises, nor permit any of the same to occur (other than in microwave ovens
and coffee makers properly maintained in good and safe working order and repair
in lunch rooms or kitchens for employees as may be permitted or installed by
Landlord, which does not violate any Laws or bother or annoy any other tenant).
Tenant and its employees shall not smoke tobacco on any part of the Property
(including exterior areas) except those areas, if any, that are designated or approved
as smoking areas by Landlord.


 


(14) Use of
Common Areas; No Soliciting.   Tenant shall not use the common areas,
including areas adjacent to the Premises, for any purpose other than ingress
and egress, and any such use thereof shall be subject to the other
provisions of this Lease, including these Rules. Without limiting the
generality of the foregoing, Tenant shall not allow anything to remain in any
passageway, sidewalk, court, corridor, stairway, entrance, exit, elevator,
parking or shipping area, or other area outside the Premises. Tenant shall not
use the common areas to canvass, solicit business or information from, or
distribute any article or material to, other tenants or invitees of the
Property. Tenant shall not make any room-to-room canvass to solicit business or
information or to distribute any article or material to or from other tenants
of the Property and shall not exhibit, sell or offer to sell, use, rent or
exchange any products or services in or from the Premise unless ordinarily
embraced within the Tenant’s use of the Premises expressly permitted in the
Lease.


 


(15) Energy and
Utility Conservation.   Tenant shall not waste electricity, water,
heat or air conditioning or other utilities or services, and agrees to
cooperate fully with Landlord to assure the most effective and energy efficient
operation of the Property and shall not allow the adjustment (except by
Landlord’s authorized Property personnel) of any controls. Tenant shall not
obstruct, alter or impair the efficient operation of the Systems and Equipment,
and shall not place any item so as to interfere with air flow. Tenant shall
keep corridor doors closed and shall not open any windows, 


 


R-2





















 


except that if the air
circulation shall not be in operation, windows which are openable may be opened
with Landlord’s consent. If
reasonably requested by Landlord (and as a condition to claiming any deficiency
in the air-conditioning or
ventilation services provided by Landlord), Tenant shall close any blinds or
drapes in the Premises to prevent or minimize direct sunlight.


 


(16) Unattended Premises. 
 Before leaving the
Premises unattended, Tenant shall close and securely lock all doors or other
means of entry to the Premises and shut off all lights and water faucets in the
Premises (except heat to the extent necessary to prevent the freezing or
bursting of pipes).


 


(17) Going-Out-Of-Business Sales and Auctions.   Tenant shall not use, or permit
any other party to use, the Premises for any distress, fire, bankruptcy,
close-out, “lost our lease” or going-out-of-business sale or auction. Tenant
shall not display any signs advertising the foregoing anywhere in or about the Premises. This prohibition shall
also apply to Tenant’s creditors.


 


(18) Labor Harmony.   Tenant shall not use (and
upon notice from Landlord shall cease using) contractors, services, workmen,
labor, materials or equipment, or labor and employment practices that, in
Landlord’s good faith judgment, may cause strikes, picketing or boycotts or
disturb labor harmony with the workforce or trades engaged in performing other
work, labor or services in or about  the Property.


 


(19) Prohibited Activities. Tenant shall not:
(i) use strobe or flashing lights in or on the Premises, (ii) install or operate any internal combustion
engine, boiler, machinery, refrigerating, heating or air conditioning equipment
in or about the Premises, (iii) use the
Premises for housing, lodging or sleeping purposes or for the washing of
clothes, (iv) place any radio or television antennae other than inside of the
Premises, (v) operate or permit to be operated any musical or sound producing
instrument or device which may be heard outside the Premises, (vi) use any
source of power other than electricity, (vii) operate any electrical or other
device from which may emanate electrical, electromagnetic, energy, microwave,
radiation or other waves or fields which may interfere with or impair radio,
television, microwave, or other broadcasting or reception from or in the
Property or elsewhere, or impair or interfere with computers, faxes or
telecommunication lines or equipment at the Property or elsewhere, or create a
health hazard, (viii) bring or permit any bicycle or other vehicle, or dog
(except in the company of a blind person or except where specifically
permitted) or other animal or bird in the Property, (ix) make or permit
objectionable noise, vibration or odor to emanate from the Premises, (x) do anything in or about the Premises or Property
that is illegal, immoral, obscene, pornographic, or anything that may in
Landlord’s good faith opinion create or maintain a nuisance, cause physical
damage to the Premises or Property, interfere with the normal operation of the Systems
and Equipment, impair the appearance, character or reputation of the Premises
or Property, create waste to the Premises or Property, cause demonstrations,
protests, loitering, bomb threats or other events that may require evacuation
of the Building, (xi) advertise or engage in any activities which violate the
spirit or letter of any code of ethics or licensing requirements of any
professional or business organization, (xii) throw or permit to be thrown or
dropped any article from any window or other opening in the Property, (xiii)
use the Premises for any purpose, or permit upon the Premises or Property anything,
that may be dangerous to persons or property (including firearms or other
weapons (whether or not licensed or used by security guards) or any explosive
or combustible articles or materials) (xiv) place vending or game machines in
the Premises, except vending machines for employees, (xv) adversely affect the
indoor air quality of the Premises or Property, or (xvi) do or permit anything to be done upon the Premises or Property in any
way tending to disturb, bother, annoy or interfere with Landlord or any other
tenant at the Property or the tenants of neighboring property, or otherwise
disrupt orderly and quiet use and occupancy of the Property.


 


(20) Transportation Management.   Tenant shall comply with all present or
future programs intended to manage parking, transportation or traffic in and
around the Property, and in connection therewith, Tenant shall take responsible action for the
transportation planning and management of all employees located at the Premises
by working directly with Landlord, any governmental transportation management
organization or any other transportation-related committees or entities.


 


(21) Responsibility for Compliance. Tenant shall
be responsible for ensuring compliance with these Rules, as they may be
amended, by Tenant’s employees and as applicable, by Tenant’s agents, invitees,
contractors, subcontractors, and suppliers. Tenant shall cooperate with any
reasonable program or requests by Landlord to monitor and enforce the Rules,
including providing vehicle numbers and taking appropriate action against such of the foregoing parties who violate these provisions.


 


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108D (11/96)


Tenant Performance


 


EXHIBIT B


WORK LETTER


 


This Exhibit is a “Work
Letter” to the foregoing document captioned Office Lease  (referred to herein for
convenience as the “Lease”) between PIKE STREET DELAWARE, INC. (“Landlord”), a Delaware corporation, and
EQUATOR TECHNOLOGIES, INC. a California corporation (“Tenant”) relating to Suite 900 (referred to herein for
convenience as the Premises”) in
the property known as 520 Pike Tower (the “Property”).


 


I.              Tenant’s  Work.   Under the Lease to which this
Exhibit is attached, Tenant has agreed to accept the Premises “as is,” without any obligation for the performance
of improvements or other work by
Landlord, and Tenant desires to perform certain improvements thereto (the “Work,”
as further described below).
Such Work shall be planned and performed strictly in accordance with the provisions of this Exhibit and applicable
provisions of the Lease. Tenant shall take all actions necessary to cause Tenant’s Planners to
prepare the Approved Plans, and to cause Tenant’s Contractors to obtain permits or other
approvals, diligently prosecute the Work to completion, and obtain any inspections and occupancy
certificates for Tenant’s occupancy of the Premises by the Commencement Date. Any delays in the
foregoing shall not serve to abate or extend the time for the commencement of Rent under the Lease, except to the extent
of one (1) day for each day that
Landlord delays approvals required hereunder beyond the times permitted hereinwithout good cause, provided
substantial completion of the Work and Tenant’s ability to reasonably use the Premises by the
Commencement Date (or by such later date when Tenant would otherwise have substantially completed
the Work) is actually delayed thereby. Tenant shall notify Landlord upon completion of the Work
(and record any notice of completion contemplated by law).


 


II.                    Planning. The term “Plans” herein shall
refer to the “Space Plan” and “Construction Drawings” collectively (as such
terms are further defined in Section IX). The term “Approved Plans” shall refer
to the Plans as approved by Landlord in writing in accordance with this
Section.


 


a.             Tenant’s Space Planner, Architect and Engineer.  Tenant shall engage an interior office space
planner (“Space Planner”), a licensed architect (“Architect,” who may be the
same as the Space Planner), each subject to Landlord’s prior written approval.
Tenant shall also engage such licensed engineering firms (“Engineers”) as may
be required or appropriate in connection with preparing the Plans (e.g.
mechanical, electrical, plumbing, structural, HVAC or other), all of whom shall
be designated or approved by Landlord in writing. Landlord may require that
Tenant select each of Tenant’s Planners from a list of such parties. The term “Tenant’s
Planners” herein shall refer collectively or individually, as the context
requires, to the Space Planner, Architect or Engineers, as appropriate, engaged
by Tenant, and approved or designated by Landlord in writing in accordance with
this Exhibit. Tenant has sole responsibility to provide all information
concerning its space requirements to Tenant’s Planners, to cause Tenant’s Planners
to prepare the Plans, and to obtain Landlord’s final approval thereof
(including all revisions). Tenant and Tenant’s Planners may review such
existing drawings as Landlord may provide relating to the Premises or Property,
but shall not rely thereon (and shall perform independent verifications of all
field conditions, dimensions and other such matters), and Landlord shall have no
liability for any errors, omissions or other deficiencies therein. 


 


b.             Space Plan.


 


i.              Tenant shall promptly hereafter cause the Space Planner
to submit three  (3) sets
of a “Space Plan” (as defined in Section IX) to Landlord for approval.


 


ii.             Landlord shall, within ten (10) working days after
receipt thereof, either approve said Space Plan, or disapprove the same
advising Tenant of the reasons for such disapproval. In the event Landlord
disapproves said Space Plan, Tenant shall modify the same, taking into account
the reasons given by Landlord for said disapproval, and shall submit three (3) sets
of the revised Space Plan to Landlord within five (5) working days after
receipt of Landlord’s initial disapproval.


 


iii.            The parties shall continue such process in the same time
frames until Landlord grants approval.


 


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c.             Construction Drawings and Engineering Report.


 


i.              No later than ten (10) working days after receipt of
Landlord’s approval of the Space Plan, Tenant shall cause the Architect to
submit to Landlord for approval three (3) sets of mylar sepia “Construction
Drawings” (as defined in Section IX), and cause the Engineers to Submit for Landlord’s approval a report (the “Engineering Report”) from Tenant’s
mechanical, structural and electrical engineers indicating any special heating,
cooling, ventilation, electrical, heavy load or other special or unusual
requirements of Tenant, including calculations.


 


ii.             Landlord shall, within fifteen (15) working days after
receipt thereof (or such longer time as may be reasonably required in order to
obtain any additional architectural, engineering or HVAC report or due to other
special or unusual features of the Work or Plans), either approve the
Construction Drawings and Engineering Report, or disapprove the same advising
Tenant of the reasons for disapproval. If Landlord disapproves of the
Construction Drawings or Engineering Report, Tenant shall modify and submit
three (3) sets of revised mylar sepia Construction Drawings, and a revised
Engineering Report, taking into account the reasons given by Landlord for
disapproval, within five (5) working days after receipt of Landlord’s initial disapproval.


 


iii.            The parties shall continue such process in the same time
frames until Landlord grants approval.


 


d.             Landlord’s Approval.  Landlord shall not unreasonably withhold
approval of any Space Plans, Construction Drawings, or Engineering Report
submitted hereunder, if they provide for a customary office layout, with
finishes and materials generally conforming to building standard finishes and
materials currently being used by Landlord at the Property, are compatible with
the Property’s shell and core construction, and if no modifications will be
required for the Property electrical, heating, air-conditioning, ventilation,
plumbing, fire protection, life safety, or other systems or equipment, and will
not require any structural modifications to the Property, whether required by
heavy loads or otherwise, and will not create any potentially dangerous conditions,
potentially violate any codes or other governmental requirements, potentially
interfere with any other occupant’s use of its premises, or potentially
increase the cost of operating the Property. Construction Drawings approved by
Landlord in writing (including approved revisions) are referred to herein as
the “Approved Plans.”


 


e.             Governmental
Approval of Plans; Building Permits.  Tenant shall cause Tenant’s Contractors
(as defined in Section III.a) to apply for any building permits, inspections
and occupancy certificates required for or in connection with the Work. If the
Plans must be revised in order to obtain such building permits, Tenant shall promptly notify Landlord, promptly
arrange for the Plans to be
revised to satisfy the building permit requirements, and shall submit the revised
Plans to Landlord for approval as a Change Order under Section II.f. Landlord
shall have no obligation to apply for any zoning, parking or sign code
amendments, approvals, permits or variances, or any other governmental
approval, permit or action. If any such other matters are required, Tenant
shall promptly seek to satisfy such requirements (if Landlord first approves in
writing), or shall revise the Plans to eliminate such requirements and submit
such revised Plans to Landlord for approval in the manner described above.
Delays in substantially completing the Work by the Commencement Date as a
result of requirements for building permits or other governmental approvals,
permits or actions shall not affect the Commencement Date and commencement of
Rent.


 


f.              Changes After Plans Are Approved.  If Tenant shall desire, or any governmental body
shall require, any changes, alterations, or additions to the Approved Plans,
Tenant shall submit a detailed written request or revised Plans (the “Change
Order”) to Landlord for approval.  If
reasonable and practicable and generally consistent with the Plans theretofore
approved, Landlord shall not unreasonably withhold approval. All costs in
connection therewith, including, without limitation, construction costs, permit
fees, and any additional plans, drawings and engineering reports or other
studies or tests, or revisions of such existing items, shall be included in the
Cost of the Work under Section IV. No delays resulting from any Change Orders
or requests therefor shall delay the Commencement Date or Commencement of Rent.
In the event that the Premises are not constructed in accordance with the
Approved Plans, Tenant shall not be permitted to occupy the Premises until the
Premises reasonably comply in all respects therewith; in such case, the Rent
shall nevertheless commence to accrue and be payable as otherwise provided in
the Lease.


 


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III.           Contractors, Bids and Contracts.


 


a.             Contractors.   Tenant shall engage to perform the Work such
contractors, subcontractors and suppliers (“Tenant’s Contractors”) as Landlord
customarily engages or recommends for use at the Property; provided, Tenant may
substitute other licensed, bonded, reputable and qualified parties capable of
performing quality workmanship who have good labor relations and will be able
to work in harmony with each other and those of Landlord and other occupants of
the Property so as to ensure proper maintenance of good labor relationships,
and in compliance with all applicable labor agreements existing between trade
unions and the relevant chapter of the Association of General Contractors of
America. Such substitutions may be made only with Landlord’s prior written
approval. Such approval shall be granted, subject to specified conditions, or
denied within fifteen (15) days after Landlord receives from Tenant a written request
for such substitution, containing a reasonable description of the proposed
party’s background, finances, references, qualifications, and other such
information as Landlord may request. Landlord may require that Tenant select
Tenant’s Contractors from a list of such parties for Work involving any
mechanical, electrical, plumbing, structural, demolition or HVAC matters, or
any Work required to be performed outside the Premises or involving Tenant’s
entrance.


 


b.             Contracts and Guaranties.  Tenant shall promptly submit to Landlord for
approval, prior to entering any contracts for the Work, an itemized statement
of the estimated Cost of the Work, including all bids and quotes, and copies of
proposed contracts. All contracts shall contain insurance, indemnity and other
provisions consistent herewith. All contracts involving progress payments shall
include appropriate retention provisions, liquidated damages for delays (if
desired by Tenant), and payment application requirements consistent with this
Exhibit. Each Tenant Contractor shall guarantee that the portion of the Work
for which it is responsible shall be free from any defects or deficiencies in
workmanship and materials for a period of not less than one (1) year from the
date of completion thereof. Every such party shall be responsible for the replacement
or repair, without additional charge, of all such defects or deficiencies in
accordance with its contract within one (1) year after completion of such work
or the correction thereof. The correction of such work shall include, without
additional charge, all additional expenses and damages in connection with such removal or replacement of all or any part
of Tenant’s Work, and/or the Property and/or common areas, or work which may be
damaged or disturbed thereby.  All such warranties or guarantees as to materials or workmanship of or with
respect to Tenant’s Work shall be contained in the contract or subcontract
which shall be written such that said warranties or guarantees shall
inure to the benefit of both Landlord and Tenant, as their respective interests
may appear, and can be directly enforced by either. Tenant covenants to give
Landlord any assignment or other assurances necessary to effect such right of
direct enforcement. Copies of all contracts and subcontracts shall be furnished
to Landlord promptly after the same are entered.


 


IV.           Cost of the Work and Allowance.


 


a.             Cost of the Work.  Except for the Allowance to be provided by
Landlord hereunder, Tenant shall pay all costs (the “Costs of the Work”)
associated with the Work whatsoever, including without limitation, all costs
for or related to: (1) the so-called “hard costs” of the Work, including,
without limitation, costs of labor, hardware, equipment and materials, contractors’
charges for overhead and fees, and so-called “general conditions” (including
rubbish removal, utilities, freight elevators, hoisting, field supervision,
building permits, occupancy certificates, inspection fees, utility connections,
bonds, insurance, sales taxes, and the like), (2) the so-called “soft costs” of
the Plans, including, without limitation, all revisions thereto, and engineering
reports, or other studies, reports or tests, air balancing or related work in
connection therewith, and (3) Landlord’s costs and administrative fee described
below. “Work” herein means: (i) the improvements and items of work shown on the
final Approved Plans (including changes thereto), and (ii) any demolition,
preparation or other work required in connection therewith, including without
limitation, structural or mechanical work, additional HVAC equipment or
sprinkler heads, or modifications to any building mechanical, electrical,
plumbing or other systems and equipment or relocation of any existing sprinkler
heads, either within or outside the Premises required as a result of the
layout, design, or construction of the Work or in order to extend any
mechanical distribution, fire protection or other systems from existing points of
distribution or connection, or in order to obtain building permits for the work
to be performed within the 


Premises
(unless Landlord requires that the Plans be revised to eliminate the necessity
for such work).


 


b.             Allowance.  Landlord shall provide a construction allowance
(the “Allowance”) of up to $133,500.00 towards: (i) costs of the Space Plan and Construction
Drawings, provided such costs, as a share of the Allowance, shall not exceed
$2.00 per square foot, (ii) costs of permanent leasehold improvements included
in the Work, including labor, hardware, equipment and materials, contractors’
charges for overhead and fees, and general conditions, and (iii)


 


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Landlord’s costs and
administrative fee, as described below. The Allowance shall not be used for any
other purpose, such as, but not limited to, furniture, trade fixtures, or
personal property. The Allowance also covers Work that began in December 1,
2000 and is scheduled to finish by the end of March, 2001. If all or any
portion of the Allowance shall not be used, Landlord shall be entitled to the
savings and Tenant shall receive no credit therefor. If Landlord terminates the
Lease or Tenant’s right to possession based on a Default by Tenant, Tenant
shall repay Landlord on demand for the amount of the Allowance provided
hereunder, as additional damages, without in any way limiting Landlord’s other
rights or remedies.


 


c.             Tenant’s Cost Deposit.  Any portion of the Cost of the Work exceeding
the Allowance is referred to herein as “Tenant’s Cost.” Landlord may at any
time estimate Tenant’s Cost in advance, or revise any such estimate, in which
case, Tenant shall deposit (“Tenant’s Deposit”) the estimated amount (or the
increase reflected in any revised estimate) with Landlord within three (3) days
after Landlord so requests. If the Work involves progress payments, Landlord
shall apply the amounts deposited by Tenant first. If, after final completion
and payment for the Work, the actual amount of Tenant’s Cost exceeds the estimated
amount, Tenant shall pay the difference to Landlord within three (3) days after
Landlord so requests. If such estimated amount exceeds the actual amount of
Tenant’s Cost, Landlord shall provide a refund or credit of the difference.
Tenant’s Cost shall be deemed “Rent” under the Lease (and all remedies for the
non-payment of Rent shall be available to Landlord therefor), and Tenant’s obligations
under the Lease to keep the Premises and Property free of liens shall apply to
any liens arising from any failure to pay Tenant’s Cost hereunder.


 


d.             Funding and Disbursement.   Landlord shall fund and disburse the Allowance
(and any Tenant’s Deposit hereunder) within thirty (30) days after the Work has
been completed in accordance with the “Space Plan” and “Construction Drawings”
approved by Landlord in writing in accordance with the provisions hereof, and
Tenant has submitted all invoices, architect’s certificates, a Tenant’s
affidavit, partial or complete lien waivers (depending on whether progress payments
are involved) and affidavits of payment by all Tenant’s Contractors, and such
other evidence as Landlord may reasonably require that the cost of the Work has
been paid and that no architect’s, mechanic’s, materialmen’s or other such
liens have been or may be filed against the Property or the Premises arising
out of the design or performance of such Work. Landlord may issue checks to
fund the Allowance jointly or separately to Tenant, its general contractor, and
any other of Tenant’s Contractors. At Landlord’s option, Landlord may fund the
Allowance (and any Tenant’s Deposit hereunder) in monthly progress payment
installments, based on the submission of the foregoing items, subject to
withholding 10% of each draw as retention (at Landlord’s option). In such
event, Landlord shall disburse Tenant’s Deposit before disbursing the Allowance.
If all or any portion of the Allowance shall not be used, Landlord shall be
entitled to the savings and Tenant shall receive no credit therefor.


 


e.             Landlord’s Costs and Administrative Fee.  Tenant shall pay Landlord’s costs for architectural
and engineering review of Tenant’s Space Plan, Construction Drawings and Engineering
Report, and all revisions thereof, together with an administrative fee equal to
ten percent (10%) of the cost of the Plans and Work. Landlord may also charge
Tenant for services (including, but not limited to, security and freight
elevator charges) and utilities for the Work or otherwise consumed in or for
the Premises during the Work (whether based on meters or estimates by Landlord’s
engineer).


 


V.            Performance of the Work.


 


a.             Conditions to Performing Work.  Before commencing any Work, Tenant shall:


 


i.              Obtain Landlord’s written approval of Tenant’s Planners
and the Plans, as described in Section II.


 


ii.             Obtain, provide copies and post all necessary
governmental approvals and permits as described in Section II.e.


 


iii.            Obtain Landlord’s written approval of an itemization of
the Costs of the Work, Tenant’s Contractors, and the proposed contracts as
described in Section III.


 


iv.            Provide Tenant’s Deposit, if required under Section IV.


 


v.             Provide evidence of insurance to Landlord as described
in Section VI.


 


vi.            Provide such performance and payment bonds as Landlord
may reasonably require, in form and content and issued by a company acceptable
to Landlord, and showing Landlord as a dual obligee.


 


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b.             Compliance and Standards.  Tenant shall cause the Work to comply in all
respects with the following: (a) the Approved Plans, (b) the Property Code of
the City and State in which the Property is located and Federal, State, County,
City or other laws, codes, ordinances, rules, regulations and guidance,
including the Disabilities Acts as described in Section X, below, as each may
apply according to the rulings of the controlling public official, agent or
other such person, (c) applicable standards of the National Board of Fire
Underwriters (or successor organization) and National Electrical Code, (d)
applicable manufacturer’s specifications, (e) any work rules and regulations as
Landlord or its agent may have adopted for the Property, and the Rules attached
as Rider One to this Lease. Tenant shall use only new, first-class materials in
the Work, except where explicitly shown in the Approved Plans. Tenant’s Work
shall be performed in a thoroughly safe, first-class and workmanlike manner,
and shall be in good and usable condition at the date of completion. In case of
inconsistency, the requirement with the highest standard protecting or favoring
Landlord shall govern.


 


c.             Labor Harmony.  Tenant shall conduct its labor relations and
relations with employees so as to avoid strikes, picketing, and boycotts of, on
or about the Premises or Property. If any employees strike, or if picket lines
or boycotts or other visible activities objectionable to Landlord are
established, conducted or carried out against Tenant, its employees, agents,
contractors, subcontractors or suppliers, in or about the Premises or Property,
Tenant shall immediately close the Premises and remove or cause to be removed
all such employees, agents, contractors, subcontractors and suppliers until the
dispute has been settled.


 


d.             Property Operations, Dirt, Debris and Noise.  Tenant and Tenant’s Contractors shall make all
efforts and take all steps appropriate to assure that all construction
activities do not interfere with the operation of the Property or with other
occupants of the Property. Tenant’s Work shall be coordinated under Landlord’s
direction with the work being done or to be performed, and other activities,
for or by other occupants in the Property so that Tenant’s Work will not
interfere with or delay the completion of any other construction work or other
activity in the Property. Construction equipment and materials are to be kept
within the Premises, and delivery and loading of equipment and materials shall
be done at such locations and at such time as Landlord shall direct so as not
to burden the construction or operation of the Property.  Tenant’s contractors shall comply with any
work rules of the Property and Landlord’s requirements respecting the hours of
availability of elevators and manner of handling materials, equipment and
debris. Demolition must be performed after 6:00 p.m. and on weekends, or as otherwise
required by Landlord or the work rules for the Property. Construction which
creates noise, odors or other matters that may bother other occupants may be
rescheduled by Landlord at Landlord’s sole discretion. Delivery of materials,
equipment and removal of debris must be arranged to avoid any inconvenience or
annoyance to other occupants. The Work and all cleaning in the Premises must be
controlled to prevent dirt, dust or other matter from infiltrating into adjacent
occupant, common or mechanical areas. Tenant and Tenant’s Contractors shall
take all precautionary steps to minimize dust, dirt, odors, noise and
construction traffic, and to protect their facilities and the facilities of
others affected by the Work and to properly police the same. If and as required
by Landlord, the Premises shall be sealed off from the balance of the space on the
floor(s) containing the Premises (and from other floors or areas of the
Property) so as to minimize the disbursement or infiltration of dust, dirt, odors,
debris and noise.


 


e.             Removal of Debris.  The contractors and subcontractors shall be
required to remove from the Premises and dispose of, at least once a week and
more frequently as Landlord may direct, all debris and rubbish caused by or
resulting from the Work, and shall not place debris in the Property’s waste
containers. If required by Landlord, Tenant shall sort and separate its waste
and debris for recycling and/or environmental law compliance purposes. Upon
completion of Tenant’s Work, Tenant’s Contractors shall remove all surplus
materials, debris and rubbish of whatever kind remaining within the Property
which has been brought in or created by the contractors and subcontractors in
the performance of Tenant’s Work. If any contractor or subcontractor shall
neglect, refuse or fail to remove any such debris, rubbish, surplus material or
temporary structures within 48 hours after notice to Tenant from Landlord with
respect thereto, Landlord may cause the same to be removed by contract or
otherwise as Landlord may determine expedient, and charge the cost thereof to
Tenant as additional Rent under the Lease.


 


f.              Utilities and Services.  Utility costs or charges for any service
(including electricity, HVAC, security hoisting or freight elevator and the
like) to the Premises or for the Work shall be the responsibility of Tenant
from the date Tenant is obligated to commence or commences the Work and shall
be paid for by Tenant at Landlord’s standard rates then in effect. Tenant shall
apply and pay for all utility meters required, and in the absence of meters
shall pay for usage reasonably estimated by Landlord’s engineer. Tenant shall
pay for all support services or work provided by Landlord’s contractors at
Tenant’s request or at Landlord’s discretion resulting from


 


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breaches or defaults by
Tenant under this Exhibit. All use of freight elevators is subject to scheduling
by Landlord and the rules and regulations of the Property, as described above.


 


g.             Landlord Rights.  Tenant shall permit access to the Premises,
and inspection of  the
Work, by Landlord and Landlord’s architects, engineers, contractors and otherrepresentatives, at all times during
the period in which the Work is being planned, constructed and installed and following completion of the
Work. Landlord shall have the right, but not the obligation, to order Tenant or any of Tenant’s Contractors who violate
the requirements imposed on
Tenant or Tenant’s Contractors in performing Work to cease the Work and remove
its equipment and employees from
the Property. Landlord shall have the right, but not the obligation, to perform, on behalf of and for
the account of Tenant, subject to reimbursement by Tenant, any work required to cure or complete
any Work which has violated this Exhibit, or which pertains to patching of the Work and other work in the Property,
or involves Work outside the
Premises, or affects the base building core or structure or systems or
equipment for the Property. No
such action by Landlord shall delay the commencement of the Lease or theobligation to pay Rent or any other
obligations therein set forth.


 


h.             General Requirements.  Tenant
shall impose on and enforce all applicable terms of this Exhibit against Tenant’s Planners and Tenant’s
Contractors. Landlord shall have the right to require Tenant to furnish bonds or other security in form and amount
reasonably satisfactory to Landlord
for the prompt and faithful performance and payment for Tenant’s Work. Landlord
shall have the right to run
utility lines, pipes, conduits, duct work and component parts of all mechanical and electrical systems where
necessary or desirable through the Premises, to repair, alter, replace or remove the same, and to
require Tenant to install and maintain proper access panels thereto. If an expansion joint occurs
within the Premises, Tenant shall install finish floor covering to or covering such joint in a
workmanlike manner, and Landlord shall not accept responsibility for any finish floor covering
applied to or installed over the expansion joint. Landlord may impose reasonable additional
requirements from time to time in order to ensure that the Work, and the construction thereof does
not disturb or interfere with any other occupants of the Property, or their visitors, contractors
or agents, nor interfere with the efficient, safe and secure operation of the Property. Tenant
shall provide Landlord with “as built” drawings no later than thirty (30) days after completion of the
Work.


 


VI.           Insurance.  In
addition to any insurance which may be required under the Lease, Tenant shall secure, pay for and maintain or
cause Tenant’s Contractors to secure, pay for and maintain during the continuance of
construction and fixturing work within the Property or Premises, insurance in the following minimum
coverages and the following minimum limits of liability:


 


a.             Worker’s compensation and employer’s liability insurance
with limits of not less  than
$2,000,000.00, or such higher amounts as may be required from time to time by
any employee benefit acts or
other statutes applicable where the work is to be performed, and, in anyevent sufficient to protect Tenant’s
Contractors from liability under the aforementioned acts.


 


b.             Comprehensive General Liability Insurance (including Contractors’
Protective  Liability) in
an amount not less than $1,000,000.00 per occurrence, whether involving bodilyinjury liability (or death resulting
therefrom) or property damage liability or a combination thereof, with a minimum aggregate limit of $2,000,000.00,
and with umbrella coverage with limits not less than $5,000,000.00. Such insurance shall contain an endorsement
covering Tenant’s and Tenant’s
Contractors’ indemnity obligations under the contracts and the Lease. Such
insurance shall provide for
explosion and collapse, completed operations coverage and broad form blanketcontractual liability coverage and
shall insure Tenant’s Contractors against any and all claims for bodily injury, including death resulting
therefrom, and damage to the property of others and arising from its operations under the
contracts whether such operations are performed by Tenant’s Contractors or by anyone directly or
indirectly employed by any of them.


 


c.             Comprehensive Automobile Liability Insurance, including
the ownership,  maintenance
and operation of any automotive equipment, owned, hired, or non-owned in anamount not less than $500,000.00 for
each person in one accident, and $1,000,000.00 for injuries sustained by two or more persons in
any one accident and property damage liability in an amount not less than $1,000,000.00 for each
accident. Such insurance shall insure Tenant’s Contractors against any and all claims for bodily injury, including
death resulting therefrom, and damage
to the property of others arising from its operations under the contracts,
whether such operations are
performed by Tenant’s Contractors, or by anyone directly or indirectly employedby any of them.


 


d.             “All-risk” builder’s risk insurance upon the entire Work
to the full insurable value thereof.  This
insurance shall include the interests of Landlord and Tenant (and their
respective


 


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contractors and
subcontractors of any tier to the extent of any insurable interest therein) in
the  Work and shall insure
against the perils of fire and extended coverage and shall include “all-risk”builder’s risk insurance for physical
loss or damage including, without duplication of coverage, theft vandalism and malicious mischief. If
portions of the Work are stored off the site of the Property or in transit to said site are not
covered under said “all-risk” builder’s risk insurance, then Tenant shall effect and maintain similar
property insurance on such portions of the Work. Any loss insured under said “all-risk” builder’s risk insurance is to
be adjusted with Landlord and Tenant
and made payable to Landlord, as trustee for the insureds, as their interests
may appear.


 


e.             All policies (except the worker’s compensation policy)
shall be endorsed to include  as additional insured parties, Landlord, the property management
company for the Property, the parties
listed on, or required by, the Lease, Landlord’s contractors, Landlord’s
architects, and their respective
beneficiaries, partners, directors, officers, employees and agents, and suchadditional persons as Landlord may
designate. The waiver of subrogation provisions contained in the Lease shall apply to all insurance
policies (except the workmen’s compensation policy) to be obtained by Tenant pursuant to this paragraph.
The insurance policy endorsements shall also provide that all additional insured parties shall be given thirty (30)
days’ prior written notice of any
reduction, cancellation or non-renewal of coverage (except that ten (10) days’
notice shall be sufficient in
the case of cancellation for non-payment of premium) and shall provide that theinsurance coverage afforded to the
additional insured parties thereunder shall be primary to any insurance carried independently by said
additional insured parties. Additionally, where applicable, each policy shall contain a cross-liability
and severability of interest clause. All insurance carriers hereunder shall be rated at least A and X in
Best’s Insurance Guide. Certificates for all such insurance shall be delivered to Landlord
before the construction is commenced or contractor’s equipment is moved onto the Property. In the
event that during the course of Tenant’s Work any damage shall occur to the construction and
improvements being made by Tenant, then Tenant shall repair the same at Tenant’s cost.


 


VII.         Signage, Window Blinds and HVAC Balancing.  Notwithstanding anything contained herein to the contrary, in
connection with or following the Work, Landlord shall install building standard suite identification signage,
and may install building standard window blinds (to the extent not already existing). Tenant
shall promptly advise Landlord of the name Tenant wishes for said signage. The content of all
signage shall be subject to Landlord’s prior written approval. No other signage may be installed
or placed outside the Premises by Tenant. Landlord may also cause a contractor to perform air
balancing tests on the Premises and adjust the HVAC system as a result thereof. Landlord shall
not be responsible for any disturbance or deficiency created in the air conditioning or other
mechanical, electrical or structural facilities within the Property or Premises as a result of the Work.
If such disturbances or deficiencies result, and Landlord does not elect to correct the same for Tenant, Tenant shall
correct the same and restore the
services to Landlord’s reasonable satisfaction, within a reasonable time. The
costs of such signage, blinds
and HVAC tests and work may be charged against the Allowance, and if theAllowance shall be insufficient, Tenant
shall pay Landlord for such costs as additional Rent within five (5) days after billed.


 


VIII.        Asbestos.  If the
Property was constructed at a time when asbestos was commonly used in construction, Tenant
acknowledges that asbestos-containing materials (“ACM”) may be present at the Property, and that airborne asbestos
fibers may involve a potential
health hazard unless proper procedures are followed. In such case, before
commencing the Work, Tenant and
its contractor shall consult with Landlord and Landlord’s asbestos consultant concerning appropriate procedures
to be followed.


 


IX.           Certain Definitions.


 


a.             Space Plan.  “Space Plan” herein means a floor plan, drawn
to scale, showing (i)  demising
walls, interior walls and other partitions, including type of wall or partition
and height, (ii) doors and other
openings in such walls or partitions, including type of door and hardware,
(iii) any floor or ceiling
openings, and any variations to building standard floor or ceiling heights, (iv)electrical outlets, and any restrooms,
kitchens, computer rooms, file cabinets, file rooms and other special purpose rooms, and any sinks or
other plumbing facilities, or other special electrical, HVAC, plumbing or other facilities or
equipment, including all special loading, (v) communications system, including location and dimensions of
equipment rooms, and telephone and computer outlet locations, (vi) special cabinet work or other millwork items,
(vii) any space planning considerations
under the Disabilities Acts, (viii) finish selections (i.e. color selection of
painted areas, and selection of
floor and any special wall coverings from Landlord’s available building standard selections (which selections Tenant
may defer and include with the Construction Drawings), and (ix) any other details or features requested by
Architect, Engineer or Landlord in order
for the Space Plan to serve as a basis for preparing the Construction Drawings.


 


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b.             Construction Drawings.  “Construction Drawings” herein means fully
dimensioned  architectural
construction drawings and specifications, and any required engineering drawings(including mechanical, electrical,
plumbing, structural, air-conditioning, ventilation and heating), and shall include any applicable items
described above for the Space Plan, and to the extent applicable: (i) electrical outlet locations,
circuits and anticipated usage therefor, (ii) reflected ceiling plan, including lighting, switching,
and any special ceiling specifications, (iii) duct locations for heating, ventilating and air-conditioning
equipment, (iv) details of all millwork, (v) dimensions of all equipment and cabinets to be built in,
(vi) furniture plan showing details of space occupancy, (vii) keying schedule, (viii) lighting arrangement, (ix)
location of print machines, equipment
in lunch rooms, concentrated file and library loadings and any other equipment
or systems (with brand names
wherever possible) which require special consideration relative to air-conditioning, ventilation, electrical,
plumbing, structural, fire protection, life-fire-safety system, or mechanical systems, (x) special heating,
ventilating and air conditioning equipment and requirements, (xi) weight and location of heavy equipment, and
anticipated loads for special usage
rooms, (xii) demolition plan, (xiii) partition construction plan, (xiv) all
requirements under the
Disabilities Acts and other governmental requirements, and (xv) final finish
selections, and any other details
or features requested by Architect, Engineer or Landlord in order for theConstruction Drawings to serve as a
basis for contracting the Work.


 


X.            Taxes.  Tenant shall pay prior to delinquency all taxes, charges or othergovernmental impositions (including
without limitation, any real estate taxes or assessments, sales tax or value added tax) assessed
against or levied upon Tenant’s fixtures, furnishings, equipment and personal property located in
the Premises and the Work to the Premises under this Exhibit. Whenever possible, Tenant shall
cause all such items to be assessed and billed separately from the property of Landlord. In the event
any such items shall be assessed and billed with the property of Landlord, Tenant shall pay its
share of such taxes, charges or other governmental impositions to Landlord within ten (10) days
after Landlord delivers a statement and a copy of the assessment or other documentation showing
the amount of such impositions applicable to Tenant.


 


XI.           Disabilities Acts.  Tenant
shall be responsible for matters under any laws or governmental regulations, rules or guidance
materials pertaining to persons with disabilities (referred to herein as the “Disabilities Acts”)
relating to the Premises or Work hereunder. Without limiting the generality of the forgoing,
Tenant shall: (a) provide complete and accurate information such that the Plans will comply with the Disabilities Acts,
and update such information as
needed, and (b) be responsible for any changes to the Work or Premises resultingfrom changes in Tenant’s employees,
business operations or the Disabilities Acts. Without limitation as to other provisions, Tenant
hereby expressly acknowledges that Tenant’s indemnity and related obligations under the Lease shall
apply to violations of this provision.


 


XII.         Miscellaneous.


 


a.             Interpretation.  If this Work Letter is attached as an Exhibit
to an amendment to  an
existing lease (“Original Lease”), whether such amendment adds space, relocates
the Premises or makes any other
modifications, the term “Lease” herein shall refer to such amendment, or theOriginal Lease as amended, as the
context implies. By way of example, in such case, references to the “Premises” and “Commencement Date”
herein shall refer, respectively, to such additional or relocated space and the effective date for
delivery thereof under such amendment, unless expressly provided to the contrary herein. Capitalized terms not
otherwise defined herein shall have
the meanings ascribed thereto in the Lease.


 


b.             Application.  This Exhibit shall not apply to any additional
space added to the  Premises
at any time, whether by any options or rights under the Lease or otherwise, or
to any portion of the Premises
in the event of a renewal or extension of the Term of the Lease, whetherby any options or rights under the
Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement thereto.


 


c.             Lease Provisions and Modification.  This Exhibit is intended to supplement and be
subject to the provisions of the
Lease, including, without limitation, those provisions requiring that any modification or amendment be in
writing and signed by authorized representatives of both parties.


 


d.             Limitation of Landlord’s Liability.   Landlord shall not be liable in any way for
any  injury, loss or
damage which may occur to any decorations, fixtures, personal property, installations or other improvements or items
of work installed, constructed or brought upon the Premises by or for Tenant or Tenant’s
Contractors prior to completion of the Work and commencement of Tenant’s occupancy, all of the same being at Tenant’s
sole risk, and Tenant hereby
agrees to protect, defend, indemnify and hold Landlord and its employees,
agents, and


 


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affiliates harmless from all
liabilities, losses, damages, claims, demands, and expenses (including  attorneys’ fees). The parties acknowledge
that neither Landlord nor its managing agent is an architect or engineer, and that the Work will
be designed and performed by independent architects, engineers and contractors. Landlord and its managing agent
shall have no responsibility for
construction means, methods or techniques or safety precautions in connectionwith the Work, and do not guarantee
that the Plans or Work will be free from errors, omissions or defects, and shall have no liability
therefor. Landlord’s approval of Tenant’s Plans and contracts, and Landlord’s designations, lists,
recommendations or approvals concerning Tenant’s Planners and Contractors shall not be deemed a
warranty as to the quality or adequacy thereof or of the Plans or the Work, or the design thereof, or
of its compliance with laws, codes and other legal requirements.


 


e.             No Third-Party Beneficiaries.  The Lease and this Exhibit are not intended to
create  any third-party
beneficiaries. Without limiting the generality of the foregoing, no TenantContractors or Tenant Planners shall
have any legal or beneficial interest in the Allowance.


 


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PARKING AGREEMENT


 


THIS AGREEMENT made as of
the 12th day of April 2001 between Pike Street
Delaware, Inc. (“Landlord”) and Equator Technologies, Inc. (“Tenant”).


 


1.             The parties hereby acknowledge that
they have heretofore entered, or are contemporaneously herewith entering, a
certain lease dated April 12, 2001 ( the “Lease”) for premises known as
Suite 900 (the “Premises”) located in the property known as 520 Pike Tower (the
“Property”). In the event of any conflict between the Lease and this Agreement,
the latter shall control.


 


2.             Landlord hereby grants to Tenant
and persons designated by Tenant a license to use eleven (11) parking spaces in
the Property Parking Garage (the “Garage”) at then current rates which Landlord
may adjust from time to time. The Term of such license shall commence on the Commencement
Date under the Lease and shall continue until the earlier to occur of the Expiration
Date under the Lease; termination of the Lease or Tenant’s abandonment of the Premises
thereunder. Tenant may, from time to time, request additional parking spaces,
and if Landlord shall provide the same, such spaces shall be provided and used
on a month-to-month basis, and otherwise on the foregoing terms and provisions,
and such monthly parking charges as Landlord shall establish from time to time.


 


3.             Tenant shall at all times comply
with all applicable ordinances, rules, regulations, codes, laws, statutes and
requirements of all federal, state, county and municipal governmental bodies or
their subdivisions respecting the use of the Garage. Landlord reserves the
right to adopt, modify and enforce reasonable Rules governing the use of the
Garage from time to time, including any key card, parking sticker or other
identification or entrance system, and hours of operation. The Rules set forth
hereinafter are currently in effect. Landlord may refuse to permit any person
who violates such Rules to park in the Garage, and any violation of the Rules
shall subject the car to removal from the Garage.


 


4.             The parking spaces hereunder shall
be provided on an unreserved “first-come, first served” basis. Tenant
acknowledges that Landlord has arranged or may arrange from time to time for
the Garage to be operated by an independent contractor, not affiliated with
Landlord (the “Parking Operator”). In such event, Tenant acknowledges that
Landlord shall have no liability for claims arising through acts or omissions
of the Parking Operator. Except for its intentional acts or gross negligence,
Landlord shall have no liability whatsoever for (a) any damage to property or
any other items located in the Garage, (b) theft or vandalism to any vehicle or
property or other items located in the Garage, or (c) any personal injuries or
death arising out of any matter relating to the Garage, and in all events,
Tenant agrees to look first to its insurance carrier and to require that Tenant’s
employees look first to their respective insurance carriers for payment of any
losses sustained in connection with any use of the Garage. Tenant hereby waives
on behalf of its insurance carriers all rights of subrogation against Landlord
or Landlord’s agents. Landlord reserves the right to assign specific spaces, and
to reserve space for visitors, small cars, handicapped persons and for other
tenants, guests of tenants or other parties, and Tenant and persons designated
by Tenant hereunder shall not park in any such assigned or reserved spaces.
Landlord also reserves the right to close all or any portion of the Garage in
order to make repairs or perform maintenance services, or to alter, modify,
re-stripe or renovate the Garage, or if required by casualty, strike,
condemnation, act of God, governmental law or requirement or other reason
beyond Landlord’s reasonable control.


 


5.             If Tenant shall default under this
Agreement, Landlord shall have the right to remove from the Garage any vehicles
hereunder which shall have been involved or shall have been owned or driven by
parties involved in causing such default, without any liability therefor whatsoever.
In addition, if Tenant shall default under this Agreement, Landlord shall have
the right to cancel this Agreement on ten days’ written notice, unless within
such ten day period, Tenant cures such default. If Tenant defaults under this
Agreement more than three times during any twelve month period, and Landlord
notifies Tenant thereof promptly after each such default, the next default
during the succeeding twelve month period, shall, at Landlord’s election,
constitute an incurable 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 the Lease (all of
which rights and remedies under the Lease are hereby incorporated  herein, as though fully set forth). Any
default by Tenant under the Lease shall be a default under this Agreement, and
any default under this Agreement shall be a default under the Lease. Tenant
shall comply with the following Rules governing the use of the Garage:


 


(i)            Garage hours shall be as posted in
the Garage from time to time. Landlord shall have the right to change hours of
operation of the Garage from time to time.


 


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(ii)           Cars must be parked entirely within
the stall lines painted on the floor, and only small cars may be parked in
areas reserved for small cars.


 


(iii)          All directional signs, arrows and lane
markings must be strictly observed.


 


(iv)          The speed limit shall be 5 miles per
hour.


 


(v)           Spaces reserved for handicapped
parking must be used only by vehicles properly designated.


 


(vi)          Parking is prohibited in all areas not
expressly designated for parking, including without limitation:


 


(a) areas not
striped for parking


 


(b) aisles


 


(c) where “no
parking” signs are posted


 


(d) ramps


 


(e) loading
zones


 


(f) cross
hatched areas


 


(g) such other
areas as may be designated by Landlord or the Parking Operator


 


(vii)         Landlord shall have the right to
establish, and Tenant shall cooperate with, a parking system in order to allow
for use of the Garage by all of the tenants of the Property. Such system may
include key cards and gates, parking stickers, designated parking stalls, or
any other reasonable system. Key cards, parking stickers or any other devices
or forms of identification or entry supplied by Landlord, if any, shall remain
the property of Landlord. Such devices must be displayed as requested and may
not be mutilated in any manner. The serial number of the parking identification
device may not be obliterated. Devices are not transferable and any device in
the possession of an unauthorized holder will be void.


 


(viii)        The monthly parking charge or rent for
parking spaces is as posted in the Garage and subject to adjustment
periodically at the discretion of the Landlord. Notice of such adjustments will
be sent at least 30 days prior to the effective date of the adjustment. Monthly
parking charges or rent for parking spaces is payable in advance on the first
day of each month and must be paid on or before the fifth day of each month. No
statement or invoice will be sent. Failure to pay such parking charge or rent
for parking spaces on or before the fifth of each month will automatically
cancel parking privileges and a charge at the prevailing daily rate will be
charged. No deduction or allowances from the monthly rate will be made for days
user does not use the Garage.


 


(ix)           Parking Operator or its attendants
are not authorized to make or allow any exceptions to these Rules and
Regulations.


 


(x)            Every parker is required to park and
lock his/her own car.


 


(xi)           Loss or theft of key cards, parking
stickers or other identification, or other such devices must be reported to
Landlord or any Garage manager immediately. Any parking devices reported lost
or stolen found on any unauthorized car will be confiscated and the illegal holder
will be subject to prosecution. Lost or stolen parking devices found by Tenant
or its employees must be reported to the office of the Garage immediately.


 


(xii)          Washing, waxing, cleaning or servicing
of any vehicle by the customer and/or his/her agents is prohibited. Parking
spaces may be used only for parking automobiles.


 


(xiii)         Landlord or the Parking Operator
reserves the right to refuse the sale of monthly stickers or other parking
identification devices to any Tenant or person and/or his agents or representatives
who refuse to comply with this Agreement and these Rules and all posted City, State
or Federal ordinances, laws or agreements.


 


(xiv)        By signing this Parking Agreement,
Tenant agrees to acquaint all persons to whom Tenant assigns parking spaces
with this Agreement and these Rules.


 


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(xv)         If a cardholder takes a ticket to gain
access to the Garage, that ticket must be presented for validation to the
Parking Operator the same day prior to exiting the Garage, otherwise the posted
daily parking rate will apply.


 


(xvi)        Except as otherwise provided in the
Lease, parking privileges under this Parking Agreement are granted on a
month-to-month basis and are revocable by Landlord on thirty (30) days prior
written notice.


 


(xvii)       Parking privileges may be on an
unassigned or executive valet basis as designated by Landlord or the Parking
Operator from time to time.


 


	
  TENANT:

  	
  LANDLORD:

  
	
   

  	
   

  
	
  Equator
  Technologies, Inc

  	
  Pike Street
  Delaware, Inc.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  CFO

  	
   

  	
  Its: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its: Authorized Signatory

  
							



 


R-15