**Exhibit10.14**

 

**First Amendment**

 

**Amendment 1 to the Lease dated 28th day of April2003by and between OVERLAKE OFFICE BUILDING LLC (“Landlord”) and SoundHealth Solutions, Inc. (“Tenant”) for that certain space commonly known asSuiteB-115 of the Overlake Office Building described below.**

 

**Legaldescription:**

Lots 4 A of Lot LineAdjustment No. SS-83-13, according to the Lot Line Adjustment recorded underRecording No. 8504100678, being a revision of Lot Line Adjustment recordedunder Recording No. 8501160598, situate in the City of Redmond, County of King,State of Washington.

 

It is hereby agreed asfollows:

 

Additional Storage Space

 

Tenant hereby leases anadditional 410 rentable square feet, Suite B-8, in the basement as storage forTenant’s business on a month to month basis commencing May 1, 2005. The rentalstructure for such storage space is as follows:

 

410 sq. ft.               $9.38/sf/yr             $320.48/mo.

 

All other terms andconditions of the original Lease shall remain the same.

 
| /s/ Joe Yecich                | 5/19/05 |   |   |   | /s/ Teresa Girolami    |   | 5/19/05 |
|-------------------------------|---------|--------|--------|--------|------------------------|--------|---------|
| Overlake Office  Building LLC | Date    |   |   |   | Sound Health Solutions |   | Date    |
| Joe Yecich Manager            |    |   |   |   |                   |   |

 

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OFFICELEASE

 

15446BEL-RED ROAD BUILDING LEASE

 

THIS LEASE is made this28th day of April, 2003, by and between Overlake Office Building LLC(“Landlord”), and Sound Health Solutions, Inc., a Washington State Corporation(“Tenant”).

 

WITNESSETH:

 

In consideration of themutual covenants and agreements set forth below, Landlord and Tenant agree asfollows:

 

1.             LeaseData; Exhibits. The following definitions shall apply, except as otherwisespecifically modified herein:

 

(a)           Building:  15446 Bel-Red Road Building, Suite #B-15,Redmond, Washington situated on the Land described more particularly in ExhibitA attached.

 

(b)           Land:  The real property legally described in ExhibitA attached.

 

(c)           Premises:  Those certain premises with an agreed area of6,771 net rentable square feet located on Building Floor(s) ground floor ascrosshatched on the floor plan(s) of the Building attached hereto as ExhibitB.

 

(d)           CommencementDate:  October 1, 2003 or suchearlier or later date as is provided in Section 3 hereof.

 

(e)           TerminationDate:  November 30, 2008.

 

(f)            Rent:  The following dollar amounts per month, asbase rent, payable on or before the first day of each month:

 
| 10/1/2003 to  11/30/2003 $-0-/mo.       |   | $-0-/yr.        |   | -0-/sq. ft.   |
|-----------------------------------------|--------|-----------------|--------|---------------|
| 12/1/2003 to  11/30/2004 $10,156.50/mo. |   | $121,878.00/yr. |   | 18.00/sq. ft. |
| 12/1/2004 to  11/30/2005 $10,579.69/mo. |   | $126,956.25/yr. |   | 18.75/sq. ft. |
| 12/1/2005 to  11/30/2006 $11,002.88/mo. |   | $132,034.50/yr. |   | 19.50/sq. ft. |
| 12/1/2006 to  11/30/2007 $11,454.28/mo. |   | $137,451.30/yr. |   | 20.30/sq. ft. |
| 12/1/2007 to  11/30/2008 $11,905.68/mo. |   | $142,868.10/yr. |   | 21.10/sq. ft. |

 

Tenant shall alsopay additional rent as provided below.

 

(g)           SecurityDeposit:  $22,062.18 of which$10,156.50 is a Minimum Rent Deposit to be applied to Monthly Minimum Rent forthe third month of the Lease Term and $11,905.68 is a Security Deposit.

 

(h)           Parking:  27 unassigned spaces.

 

(i)            BaseYear:  2003

 

(j)            NoticeAddresses:

 

Landlord:               OverlakeOffice Building LLC

c/o KauriInvestments

4014 Aurorn AvenueNorth, Suite B

Seattle, WA  98103

 

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Tenant:                  BeforeCommencement of Lease:

Sound HealthSolutions, Inc.

14730 NE 8thSt., Suite 110

Bellevue, WA  98007

 

After Commencementof Lease:

Sound HealthSolutions, Inc.

15446 Bel-RedRoad, Suite B-15

Redmond, WA  98052

 

(k)           Exhibits:  The following exhibits are made a part ofthis Lease:

 

Exhibit A – LegalDescription of Land

Exhibit B – FloorPlan of Premises

Exhibit C – Rider

Exhibit D – TenantImprovement Work

Exhibit E – Guarantyof Lease

Exhibit F – Rules& Regulations

 

(l)            Tenant’sShare:  “Tenant’s Share” shall meanthe percentage determined by dividing the net rentable area of the Premises bythe net rentable area of the Building. If the net rentable area of the Premisesor Building is modified, Landlord shall adjust Tenant’s Share to reflect suchchange. As used in this Lease, Landlord and Tenant agree that Tenant’s Share is..1384 (13.84%).

 

(m)          NetRentable Area of the Building:  Theagreed Net Rentable Area of the Building is 48,906 square feet.

 

2.             Premises.

 

(a)           Definition.Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, thosecertain premises (the “Premises”) described in Section 1(c) above.

 

(b)           Changesto Building. Tenant acknowledges that Landlord may in its discretionincrease, decrease or change the number, locations and dimensions of anyhallways, lobby areas, common areas and other improvements shown on ExhibitB which are not within the Premises. Landlord reserves the right from timeto time to (i) install, use, maintain, repair, relocate and replace pipes,ducts, conduits, wires and appurtenant meters and equipment for service to thePremises or to other parts of the Building in areas above the suspended ceilingsurfaces, below the floor surfaces, within the walls and in the central coreareas of the Building within the Premises and elsewhere in the Building; (ii)alter or expand the Building; and (iii) alter, relocate or substitute any ofthe Common Areas referenced in Section 2(d) below.

 

(c)           Condition.The Premises are leased by Landlord and accepted by Tenant “As Is” in theirpresent condition. Unless otherwise agreed to in writing by Landlord andTenant, Landlord shall have no obligation to make any alterations orimprovements to the Premises, provided Landlord will perform normal janitorialcleaning services to the Premises prior to delivery of the Premises to Tenant.

 

(d)           CommonAreas:  During the lease term Tenantand its licensees, invitees, customers and employees shall have thenon-exclusive right to use all entrances, lobbies and other public areas ofBuilding (the “Common Areas”) in common with Landlord, other Building tenantsand their respective licensees, invitees, customers and employees. Landlordshall at all times have exclusive control and management of the Common Areasand no diminution thereof shall be deemed a constructive or actual eviction orentitle Tenant to compensation or a reduction or abatement of rent.

 

3.             Term.The Term of this Lease shall commence on the first to occur of the followingevents:(i) the Commencement Date set forth in Section 1(d) above or (ii) thedate on which Tenant takes possession or commences beneficial occupancy of thePremises and shall end at midnight on the Termination Date, unless extended orsooner terminated in accordance with the terms hereof. If Landlord for anyreason cannot deliver possession of the Premises to Tenant by the Commencement Datespecified in Section 1(d) above, this Lease shall not be void or voidable norshall Landlord be liable to Tenant for loss or damage resulting therefrom. Insuch event, there shall be a proportionate reduction of all rent for the periodbetween the specified Commencement Date and the date when possession of thePremises is in fact

 

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tendered to Tenant. Notwithstandingthe above, if Landlord fails to deliver full possession of the Premises byNovember 1, 2003, and after thirty (30) days notice by Tenant of Tenant’sintent to terminate this Lease, this Lease shall automatically terminate unlesspossession of the Premises has been delivered to Tenant. No such failure toprovide possession on the specified Commencement Date shall in any way extendthe term of this Lease.

 

4.             Rent.Tenant shall pay to Landlord at the address specified by Landlord, without anyset-off or deduction whatsoever, in lawful money of the United States, as baserent, the rent specified in Section 1(f) above per month or any part thereof,in advance on or before the first day of each month of the Lease term. Rent forpartial months shall be prorated. In addition to base rent, all other sums tobe paid under Section 5 and Section 6 hereof and all sums to be paid orreimbursed by Tenant to Landlord under this Lease, whether or not sodesignated, shall be “additional rent” for the purposes of this Lease. IfTenant defaults in the performance of any of its obligations hereunder,Landlord may, but shall not be obligated to, perform such obligations, and thecost thereof to Landlord shall also be additional rent. Unless otherwisespecifically provided herein, Tenant shall pay Landlord all additional rentwithin ten (10) days of demand therefor.

 

5.             Tenant’sShare of Building Operating Costs.

 

(a)           Amount.Before the commencement of each calendar year during the Lease term, Landlordwill notify Tenant in writing of Landlord’s estimate of Tenant’s Share ofestimated “Building Operating Costs” (defined below) for such year to theextent such Operating Costs exceed Operating Costs for the Base Year as definedin Section 1(i). The term “Tenant’s Share” is defined in Section 1(l) of thisLease. Tenant shall pay one-twelfth (1/12th) of Tenant’s Share of such excessin advance on the first day of each month of such year. Following the end ofeach year, or at the expiration or sooner termination of the Lease term,Landlord will compute Tenant’s Share due under this Section for such year,based on actual costs, and, if Tenant’s Share for such year is greater thanthat already paid by Tenant for such year, Tenant shall pay Landlord thedeficiency within thirty (30) days of Tenant’s receipt of Landlord’s writtennotice of the deficiency and the determination of Tenant’s share. If the totalamount paid for such year exceeds Tenant’s Share, then Landlord shall creditsuch excess to the payment of Rent and additional rent which may thereafterbecome due; provided, however, upon the expiration or sooner termination of theLease term, if Tenant has otherwise complied with all other terms andconditions of this Lease, Landlord shall refund such excess to Tenant. If atany time Landlord obtains additional information regarding expenses, Landlordmay at its election adjust the amount of the monthly installments due duringthe balance of the year to reflect such additional information, by givingTenant written notice thereof, which notice shall also state the amount of thedeficiency, if any, in the prior monthly payments for the year. Tenant shallpay any such deficiency within thirty (30) days of its receipt of the noticeand shall make the adjusted monthly payments for the remainder of the year.

 

(b)           Definitions.For purposes of this Section 5, the following definitions shall apply:

 

(i)            “OperatingCosts” shall mean all costs and expenses of every kind and nature (includingreserves) paid or incurred by Landlord for maintaining, operating, repairing,replacing and administering the Building and Land (including Common Areas andany and all costs related to the Reciprocal Easement Agreement with theadjacent property owner), and the personal property used in conjunctiontherewith, together with a sum equal to fifteen percent (15%) of the costthereof as an administrative fee, including, without limitation, the costs ofrefuse collection, water, sewer, electricity, heat, air conditioning, fuel,light, fire protection and other utilities and services; supplies; janitorialand cleaning services; window washing; snow, garbage and refuse removal;security services and systems; landscape maintenance; services of independentcontractors; compensation (including employment taxes and fringe benefits) ofall persons who perform duties in connection with the operation, maintenance,repair, replacement and administration of the Building and/or Land, itsequipment and common areas and facilities; Landlord’s overhead costs, to theextent attributable to the Building and/or Land; insurance premiums for allinsurance carried by Landlord with respect to the Building and/or Land;licenses, permits and inspection fees; subsidies and other payments required bypublic bodies and costs incurred in connection with compliance withgovernmental requirements including, but not limited to, public transportationand parking; management and administrative service fees; legal and accountingexpenses and all other expenses

 

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or charges whetheror not hereinabove described which, in accordance with generally acceptedaccounting and management practices, would be considered an expense ofmaintaining, operating, repairing, replacing and administering the Building,Land and Common Areas.

 

(c)           Audit.Tenant shall have the right to inspect Landlord’s books and records to auditthe determination and allocation of the Operating Costs identified in thisSection 5 and Section 6. If such audit discloses a difference in excess of fivepercent (5%) of the Operating Costs computed by Landlord, or if Landlord’sbooks and records improperly reflect the information needed for an accuratedetermination of the Operating Costs and Real Property Taxes payable hereunder,Landlord shall promptly pay to Tenant the cost of the audit and credit orreimburse to Tenant any overpayment. Any information obtained by Tenantpursuant to the provisions of this Section shall be treated as confidential,except that Tenant may use such information as required for internal accountingpurposes and preparation of tax returns and disclose the same in connectionwith any administrative or judicial proceedings in which Tenant is involved andwhere Tenant may be required to divulge such information.

 

6.             Tenant’sShare of Building Real Property Taxes.

 

(a)           Amount.Before the commencement of each calendar year during the Lease term, Landlordwill notify Tenant in writing of Landlord’s estimate of Tenant’s Share ofestimated “Real Property Taxes” (defined below) for such year to the extentsuch Real Property Taxes exceed Real Property Taxes for the Base Year as definedin Section 1(i). the term “Tenant’s Share” is defined in Section 1(i) of thisLease. Tenant shall pay one-twelfth (1/12th) of Tenant’s Share of such excessin advance on the first day of each month of such year. Following the end ofeach year, or at the expiration or sooner termination of the Lease term,landlord will compute Tenant’s Share due under this Section for such year,based on actual costs, and, if Tenant’s Share for such year is greater thanthat already paid by Tenant for such year, Tenant shall immediately pay Landlordthe deficiency. If the total amount paid for such year exceeds Tenant’s Share,then Landlord shall credit such excess to the payment of Rent and additionalrent which may thereafter become due; provided, however, upon the expiration orsooner termination of the Lease term, if Tenant had otherwise complied with allother terms and conditions of this Lease, Landlord shall refund such excess toTenant. If at any time Landlord obtains additional information regardingexpenses, Landlord may at its election adjust the amount of the monthlyinstallments due during the balance of the year to reflect such additionalinformation, by giving Tenant written notice thereof, which notice shall alsostate the amount of the deficiency, by giving Tenant written notice thereof,which notice shall also state the amount of the deficiency, if any, in theprior monthly payments for the year. Tenant shall pay any such deficiencywithin ten (10) days of its receipt of the notice and shall make the adjustedmonthly payments for the remainder of the year.

 

(b)           Definitions.For purposes of this Section 6, the following definitions shall apply:

 

(i)            “RealProperty Taxes” shall mean all taxes and assessments of every kind and natureon the Building and/or Land (including Common Areas) and on personal propertyused in conjunction therewith, including all tenant improvements which are paidfor by Landlord and not reimbursed by tenants and taxes on property of tenantsin the Building which have not been paid by such tenants directly to the taxingauthority; surcharges and all surface water, local improvement, and otherassessments levied with respect to the Building and/or Land and all otherproperty of Landlord used in connection with the operation of the Buildingand/or Land; and any taxes levied or assessed in addition to or in lieu of, inwhole or in part, such real or personal property taxes, or any other tax uponleasing of the Building and/or Land or rents collected therefrom, other thanany federal or state income tax and costs and expenses paid or incurred byLandlord (including but not limited to fees and expenses of consultants,attorneys, appraisers, and experts) in connection with contesting or resistingincreased assessments or attempting to lower assessment levels.

 

7.             LateCharge; Interest. If Tenant fails to pay any amount due hereunder withinten (10) days of the due date, a late charge equal to five percent (5%) of theunpaid amount shall be assessed and be immediately due and payable. Such late chargeshall be reimposed on the first day of each subsequent month that such paymentremains outstanding. In addition, interest shall accrue on any base oradditional rent which is not paid when due at the lesser of (a) the maximuminterest rate allowed by applicable law or (b) eighteen percent (18%) per annum.If Tenant defaults in making any rent payment, Landlord shall have

 

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the right to require thatsubsequent rent payments be made by cashiers or certified check.

 

8.             SecurityDeposit. Tenant has deposited with landlord the sum of $22,062.18 of which$10,156.50 is a Minimum Rent Deposit to be applied to Monthly Minimum Rent forthe third month of the Lease Term and $11,905.68 is a Security Deposit. This sumshall belong to Landlord and shall constitute partial consideration for theexecution of this Lease. Landlord shall pay Tenant the remaining balancethereof, without any liability for interest thereon, within thirty (30) daysafter the expiration or prior termination of the Lease term, or any extensionthereof, if and only if Tenant has fully performed all of its obligations underthe terms of this Lease. Landlord shall be entitled to withdraw from thedeposit the amount of any unpaid rent or additional rent or other charges notpaid to Landlord when due, and Tenant shall immediately redeposit an amountequal to that so withdrawn.

 

9.             Tenant’sOperations.

 

(a)           Useof Premiums. Tenant shall use the Premiums exclusively for health caremanagement and related general office purposes during the Lease term. Tenantshall not use or permit the use of the Premises for any other business orpurpose without Landlord’s prior written consent. Tenant shall promptly comply,at its sole cost and expense, with the rules and regulations attached hereto asExhibit E and with such other rules and regulations relating to the use of thePremises, Building and Common Areas as Landlord may from time to timepromulgate. Tenant shall maintain the Premises in a clean, orderly and neatfashion to conform with the high standards of the Building, permitting no odorsto be emitted from the Premises and shall neither commit waste nor permit anywaste to be committed thereon. Tenant shall not permit any accumulation oftrash on or about the Premises. Tenant shall not create or contribute to thecreation of a nuisance in either the Premises or the Building and Tenant shallnot engage in or permit any action that will unreasonably disturb any othertenant in the Building.

 

(b)           UnlawfulUse. Tenant shall not use or permit the Premises or any part thereof to beused for any purpose in violation of any municipal, county, state or federallaw, ordinance or regulation, or for any purpose offensive to the standards ofthe community of which the Building is a part. Tenant shall promptly comply, atits sole cost and expense, with all laws, ordinances and regulations now inforce or hereafter adopted and with the requirements of any board of fireunderwriters or similar body relating to or affecting the condition, use oroccupancy of the Premises.

 

(c)           Liensand Encumbrances. Tenant shall keep the Premises free and clear of allliens and encumbrances arising or growing out of its use and occupancy of thePremises. If any lien is filed against the Premises or Building as a result ofthe action or inaction of Tenant, Tenant shall upon demand provide landlordwith cash or other security acceptable to Landlord in an amount equal to oneand one-half (1-1/2) times the amount of the claimed lien as security for itsprompt removal. If Tenant is not actively pursuing the removal of the lien,Landlord shall have the right to disburse such security to cause the removal ofthe lien if a judgment is entered against Tenant in the lien proceeding or ifsuch lien causes unreasonable difficulties for Landlord in connection with itsfinancing of the Building.

 

(d)           HazardousMaterials.

 

(i)            “HazardousMaterial” shall mean any matter (whether gaseous, liquid or solid) which is ormay be harmful to persons or property, including but not limited to materialsnow or hereafter designated as a hazardous or toxic waste or substance underthe Comprehensive Environmental Response, Compensation and Liability Act of1980, 42 USC 9601, et seq., or as a Hazardous Substance, Hazardous HouseholdSubstance, Moderate Risk Waste or Hazardous Waste under the Hazardous WasteManagement Act, RCW Chapter 70.105, or as a hazardous substance under to ModelToxics Control Act RCW Chapter 70.105D, all as now or hereafter amended, orwhich may now or hereafter be regulated under any other federal, state, orlocal law, statute, ordinance or regulation pertaining to health, industrialhygiene or the environment, including without limitation, (i) any asbestosand/or asbestos containing materials (collectively “ACMs”) regardless ofwhether such ACMs are in a friable or non-friable state, or (ii) any matterdesignated as a hazardous substance pursuant to Section 311 of the FederalWater Pollution Control Act (33 USC 1317), or (iii) any matter defined as ahazardous waste pursuant to Section 1004 of the Federal Resource Conservationand Recovery Act, (42 USC 6901 et seq.) pertaining

 

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to health or theenvironment. “Hazardous Material” shall not include ordinary office cleaningand maintenance products, and items used in the ordinary course of Tenant’s useof the property as defined in Section 9(a) above which are used with due careand in accordance with applicable law and the instructions of the manufacturerof such products in the reasonable and prudent conduct of Tenant’s business onthe Premises.

 

(ii)           Tenantshall not store, use, sell, release, generate or dispose of any HazardousMaterial in, on or about the Premises, Common Areas or any other part of theBuilding or Land, without the prior written consent of Landlord. With respectto any Hazardous Materials stored, used, generated or disposed of from thePremises, Tenant shall promptly, timely and completely comply with allgovernmental requirements for recording and record keeping; submit to Landlordtrue and correct copies of all reports, manifests and identification numbers atthe same time as they are required to be and/or are submitted to theappropriate governmental authority; within five (5) days of Landlord’s request,provide evidence satisfactory to Landlord that Tenant’s compliance with allapplicable governmental rules, regulations and requirements; and comply withall applicable governmental rules, regulations and requirements regarding theuse, sale, transportation, generation, treatment and disposal of HazardousMaterials. Prior to the expiration and surrender of the Premises by Tenant,Tenant shall remove any and all Hazardous Materials (including withoutlimitation ACMs) which Tenant, its employees, agents, contractors and/orsublessees have brought onto the Premises, including without limitationleasehold improvements, wall, flooring and ceiling materials. Tenant shall besolely responsible for and shall defend (with counsel acceptable to Landlord),indemnify and hold Landlord it agents, affiliates and employees harmless fromand against all claims, costs, damages, judgments, penalties, fines, losses,liabilities and expenses, including attorneys’ fees, consultant fees, andexpert fees, and expert fees arising out of or in connection with Tenant’sbreach of its obligations contained in this Section 9(d) (including, withoutlimitation, diminution in value of the Premises or the Building, damages forthe loss or restriction on use of rentable or usable space or of any amenity ofthe Premises or the Building, damages arising from any adverse impact onmarketing of space, loss of good reputation, and sums paid as settlement ofclaims, attorneys’ fees, consultant fees, and expert fees, whether or not usedat trial or in a proceeding) which arise during or alter the Lease term as aresult of such contamination. Tenant shall be solely responsible for and shalldefend (with counsel acceptable to Landlord), indemnify and hold Landlord, itsagents, affiliates and employees harmless from and against any and all claims,costs, damages, lawsuits, penalties, liens, losses and/or liabilities,including attorneys’ fees and costs, arising out of or in connection withremoval, cleanup and restoration work and materials necessary to return thePremises, Common Areas, Building and any other property of whatever nature tothe condition existing prior to the appearance of Tenant’s Hazardous Materialon a about the Premises, Common Areas or the Building; provided that Landlord’swritten approval of such actions and that of any Lender shall first beobtained, which approval shall not be unreasonably withheld so long as theactions would not potentially have any materiel adverse, long-term orshort-term effect on the Premises, Common Areas, or Building. Notwithstandinganything else set forth herein, Tenant’s obligations under this Section 9(d)shall survive the expiration of this Lease.

 

(iii)          Landlordshall have the right in its sole discretion to conduct an environmental auditutilizing a contractor of Landlord’s choice at the end of the Lease term, uponthe earlier termination of this Lease, upon Tenant’s default hereunder or ifLandlord reasonably believes that Hazardous Materials arc being stored, used,sold, generated, released or disposed of from the Premises in violation of theterms of this Section 9(d). The audit shall consist of such examinations,tests, inspections, samples and reviews as Landlord or its consultants shallreasonably determine to be advisable or necessary. Tenant shall be responsiblefor the cost of the audit and any remedial or removal work if such auditdiscloses the existence, storage, disposal or other presence of HazardousMaterials occurring during the Lease term and attributable to Tenant, its employees,agents, contractors or Sublessees. Failure of Landlord to conduct anenvironmental audit or to detect conditions attributable to Tenant, itsemployees, agents, contractors or sublessees, whether such audit is conductedor not, shall not operate as a release of Tenant or its Guarantor, if any, ofits liability, as stated in this Lease or by operation of Law. Tenant’s

 

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obligations herein shallsurvive the expiration of this Lease.

 

(c)           Signs.Tenant shall not erect or place, or permit to be erected or placed, or maintainany signs of any nature or kind whatsoever on the exterior walls or windows ofthe Premises or elsewhere in the Building, with the exception of a signidentifying Tenant placed on or near the front door of the Premises, the sizestyle and location of which must first be approved in writing by Landlord.Tenant agrees to abide by all signing rules and regulations, if any,promulgated by Landlord and to install, at its sole expense, any signs requiredthereby. Landlord will provide and install, at Landlord’s sole cost andexpense, Building standard directory signage specified to Landlord and Tenant’smutual approval.

 

10.           Utilitiesand Services.

 

(a)           Tenant’sResponsibility. Tenant shall be solely responsible for, and shall promptlypay when due, all charges for telephone and all other utilities which areseparately metered and supplied to the Premises at Tenant’s request.

 

(b)           Services.As long as Tenant is not in default under this Lease, Landlord shall cause theCommon Areas of the Building, such as lobbies, elevators, stairs, corridors andrestrooms, to be maintained in reasonably good order and condition, except fordamage occasioned by any act or omission of Tenant or Tenant’s officers,contractors, agents, invitees, licensees or employees, the repair of whichshall be paid for by Tenant. Landlord shall furnish the Premises withelectricity for office use, including lighting and low power usage (110 volt)office machines, water and elevator services. Landlord shall also providecustomary building janitorial service on weekdays, other than holidays. From6:00 a.m. to 8:30 p.m., Monday through Friday, and 7:00 a.m. to 4:00 p.m. onSaturday, excluding legal holidays observed by national banks with offices inRedmond, Washington (“Normal Business Hours”), Landlord shall furnish thePremises with heat and air conditioning services. If requested by Tenant,Landlord shall furnish heat and air conditioning services at times other thanNormal Business Hours, and janitorial services on other days, and Tenant shallpay for the cost of such services at rates established by Landlord, asAdditional Rent.

 

(i)            Janitorial.If Tenant requires excessive or specialized janitorial services, Tenant shallpromptly pay Landlord for the additional costs and expenses incurred byLandlord in providing such services as additional rent.

 

(ii)           AdditionalService. Landlord shall furnish the Premises with electricity for themaintenance of building-standard fluorescent lighting. Landlord shall alsofurnish the Premises with electricity for lighting other than building-standardfluorescent lighting and/or the operation of general office machines which use110 volt electric power and 20 amp circuits, such as electric typewriters,dictating equipment, adding machines and calculators, and general servicenon-production type office machines at no additional charge. Tenant shall notuse or permit in the Premises any electrical device which in Landlord’s opinionwill overload the Building’s electrical circuits. Further, Tenant shall notwithout Landlord’s prior consent connect any additional items such as dataprocessing equipment, electrical heaters or other machines to the Building’selectrical distribution system or make any alteration or addition to suchsystem. Landlord shall furnish adequate running water to the building, standardwater fountain, lavatories and toilets in the core area on each floor of theBuilding, and shall keep all such plumbing in reasonably good order and repair.Landlord shall have the right to terminate the furnishing of any and allutilities and services required or permitted under this Section 10 at and forany and all such time or times as Landlord shall deem reasonably necessary forrepairs, alterations or improvements. If Tenant requires excessive orspecialized electrical, lighting or heating or cooling services, Tenant shallpromptly pay the additional costs and expenses incurred by Landlord inproviding such services as additional rent.

 

(iii)          Interruption.Landlord shall not be liable for any loss, injury or damage to person orproperty caused by or resulting from any variation, interruption or failure ofsuch services due to any cause whatsoever, or from failure to make any repairsor perform any maintenance. No temporary interruption or failure of suchservices incidental to the making of repairs, alterations or improvements ordue to accident, strike or conditions or events beyond Landlord’s reasonablecontrol shall be deemed an eviction of Tenant or to relieve Tenant from any ofTenant’s obligations hereunder or to give Tenant a right of action againstLandlord for damages.

 

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11.           Licensesand Taxes. Tenant shall be liable for, and shall pay throughout the term ofthis Lease, all license and excise fees and occupation taxes covering thebusiness conducted on the Premises and all personal property taxes levied withrespect to all personal property located at the Premises. If any governmentalauthority levies a tax or license fee on rents payable under this Lease, orrents accruing from use of the Premises, or a tax or license fee in any formagainst Landlord or Tenant because of, or measured by, or based upon, incomederived from the leasing or rental thereof or a transaction privilege tax, suchtax or license fee shall be paid by Tenant, either directly if required by law,or by reimbursing Landlord for the amount thereof upon demand.

 

12.           Alterationsby Tenant. Tenant shall not make any alterations, additions or improvementsin or to the Premises without first submitting to Landlordprofessionally-prepared plans and specifications for such work and obtainingLandlord’s prior written approval. Tenant covenants that it will cause all suchalterations, additions and improvements to be performed at Tenant’s sole costand expense by a contractor approved by Landlord and in a manner which:  (a) is consistent with the Landlord-approvedplans and specifications and any conditions imposed by Landlord in connectiontherewith, (b)  is in conformity, withcommercial standards; (c)  includesacceptable insurance coverage for Landlord’s benefit; (d)  does not affect the structural integrity ofthe Building; (e)  does not disrupt thebusiness or operations of adjoining tenants; and (f) does not invalidate orotherwise affect the construction and systems warranties then in effect withrespect to the Building. Tenant shall secure all governmental permits andapprovals, as well as comply with all other applicable governmentalrequirements and restrictions; shall reimburse Landlord for all reasonableexpenses incurred in connection therewith, and shall comply with therequirements of Landlord’s general contractor imposed in connection therewith,if such work is performed prior to completion of the Building. Tenant shallindemnify, defend and hold Landlord harmless from and against all losses,liabilities, damages, liens, costs, penalties and expenses (including attorneys’fees, but without waiver of the duty to hold harmless) arising from or out ofthe performance of such alterations, additions and improvements, including, butnot limited to, all which arise from or out of Tenant’s breach of itsobligations under terms of this Section 12. All alterations, additions andimprovements (expressly including all light fixtures, heating, ventilation andair conditioning units and floor coverings), except Tenant’s trade fixtures andappliances and equipment not affixed to the Premises, shall immediately becomethe property of Landlord without any obligation on its part to pay therefor.These improvements remain Landlord’s and Tenant shall not remove all or anyportion thereof on the termination of this Lease except as specificallydirected by Landlord in writing at the time the alteration, addition orimprovement was approved by the Landlord.

 

13.           Careof Premises. Tenant shall take good care of the Premises and shallreimburse Landlord for all damage done to the Building or Premises occasionedby any act or omission of Tenant or Tenant’s officers, contractors. agents,invitees, licensees or employees, including, but not limited to, cracking orbreaking of glass. If Tenant fails to take good care of the Premises, Landlordmay, at its option, do so, and in such event, upon receipt of writtenstatements from Landlord, Tenant shall promptly pay the entire cost thereof asadditional rent. Landlord shall have the right to enter the Premises for suchpurposes. All normal repair, other than repairs to the Premises necessitated bynormal wear and tear, necessary to maintain the Premises and Building in goodorder and repair, as reasonably determined by Landlord, shall be performedunder Landlord’s direction and at its expense except as otherwise providedherein. Except as provided in Section 20, there shall be no abatement orreduction of rent arising by reason of Landlord’s making of repairs,alterations or improvements.

 

14.           Surrenderof Premises. At the expiration or sooner termination of this Lease Tenantshall return the Premises to Landlord in the same condition in which received(or, if altered, then the Premises shall be returned in such altered conditionunless otherwise directed by Landlord under terms of Section 12), reasonablewear and tear excepted. Prior to such return, Tenant shall remove its tradefixtures and appliances and equipment which have not been attached to thePremises, and shall restore the Premises to the condition they were in prior tothe installation of said items. In no event shall Tenant remove floorcoverings; heating, ventilating and air conditioning equipment; lightingequipment or fixtures; wall coverings, window coverings; or other operatingequipment or decorations unless specifically otherwise directed by Landlord inwriting. Tenant’s obligation to perform this covenant shall survive theexpiration or termination of this Lease. Tenant shall indemnify Landlord forall damages and losses suffered as a result of Tenant’s failure to so redeliverthe Premises on a timely basis.

 

15.           Waiver,Indemnity. Landlord shall not be liable for any injury to any person(including death), or for any loss of or damage to any property (includingproperty of Tenant) occurring in or about

 

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the Premises, except fordamages and/or injury arising out of the negligence or willful misconduct orLandlord or Landlord’s agents. Tenant shall indemnify, defend and saveLandlord, its officers, agents, employees and contractors, and other tenantsand occupants of the Building harmless from all losses, damages, fines,penalties, liabilities, claims and expenses (including Landlords personnel andoverhead costs and attorneys’ fees and other costs incurred in connection withsuch claims, regardless of whether such claims involve litigation) resultingfrom any actual or alleged injury (including death) to any persons or entity orfrom any actual or alleged loss of or damage to any property alleged to beattributable to (i) Tenants operation or occupation of the Premises; (ii)Tenant’s breach of its obligations hereunder or applicable law, or (iii) anyact or omission of Tenant or any licensee, assignee or concessionaire ofTenant, or of any officer, agent, employee, guest or invitee of Tenant, or ofany such person or entity in or about the Premises. Tenant agrees that theforegoing indemnity specifically covers actions brought by its own employeesand agrees the foregoing expressly constitutes a waiver or Tenant’s immunityunder the Washington Industrial Insurance Act, RCW Title 51, to the extentnecessary to provide Landlord with the full and complete indemnity from claimsmade by Tenant and its employees, to the extent of their negligence. Theindemnification provided for in this Section with respect to acts or omissionsduring the term of this Lease shall survive termination or expiration of thisLease. Landlord shall not be liable for interference with light, air or view orfor any latent defect in the Premises. Tenant shall promptly notify Landlord ofcasualties or accidents occurring in or about the Premises.

 

16.           Insurance.Tenant shall, at its own expense, maintain comprehensive or commercial generalliability insurance with broad form and stop gap endorsements with combinedsingle limits of One Million Dollars ($1,000,000) per occurrence and Two MillionDollars ($2,000,000.00) annual aggregate for property damage and loss and forpersonal injuries (including death), to indemnify both Landlord and Tenantagainst claims, demands, losses, damages, liabilities and expenses. Landlordshall have the right to periodically review the appropriateness of such limitsin view of inflation and/or changing industry conditions and to require anincrease in such limits upon ninety (90) days prior written notice. Landlordand any lender designated in writing by Landlord (“Lender”) shall be named asadditional insureds and shall be furnished with a copy of such policy orpolicies of insurance which shall bear an endorsement that the same shall notbe canceled or materially altered without thirty (30) days prior written noticeto such additional insureds. During the Lease term, Tenant shall also maintainat its own expense insurance covering its furniture, fixtures, equipment andinventory and all improvements which it makes to the Premises in an amountequal to the full insurable value thereof, against fire and such other perilsas are covered by an all risk policy with plate glass endorsement, includingall glass on the Premises. All insurance required of Tenant under this Leaseshall (a) be issued by insurance companies authorized to do business in theState of Washington and having a financial rating of at least A, Class Xstatus, as rated in the most recent edition of Best’s Insurance Reports, orwith companies otherwise acceptable to Landlord; (b) be issued as a primarypolicy, or under the blanket policy, not contributing with and not in excess ofcoverage which Landlord may carry, and (c) in the case of the liability policy,contain a blanket contractual liability coverage endorsement covering Tenant’sindemnification duty. If Tenant fails to maintain such insurance, Landlord maydo so, and Tenant shall reimburse Landlord for the full expense thereof upondemand. Tenant shall not keep or use in or about the Premises any article whichis prohibited by Landlord’s insurance policy. Tenant shall pay immediately anyincrease in Landlord’s premiums for insurance during the term or this Leasewhich results from Tenant’s use of the Premises.

 

17.           Waiverof Subrogation. To the fullest extent permitted by applicable law, neitherLandlord nor Tenant shall be liable to the other party or to any insurancecompany (by way of subrogation or otherwise) insuring the other party for anyloss or damage to any building, structure or tangible personal property of theother occurring in or about the Premises, even though such loss or damage mighthave been occasioned by the negligence of such party, its agents or employees,if such loss or damage is covered by insurance benefiting the party sufferingsuch loss or damage or was required to be covered by insurance under terms ofthis Lease. Each party shall cause each insurance policy obtained by it tocontain the waiver of subrogation clause.

 

18.           Assignmentor Sublease. Tenant shall not sublet or encumber the whole or any part ofthe Premises, nor shall this Lease or any interest thereunder be assignable ortransferable by operation of law or by any process or proceeding of any courtor otherwise without the prior written consent of Landlord. As a materialinducement to Landlord to execute and deliver this Lease, Tenant agrees itshall be reasonable under this Lease and under applicable law for Landlord towithhold consent to any proposed assignment, encumbrance or sublease ifLandlord determines that any one or more, or the following applies (without

 

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limitation as to otherreasonable grounds for withholding consent): (a) Landlord is not reasonably assured that the proposed transferee willfully, completely and promptly perform all obligations of Tenant under thisLease, (b) the transferee proposes to use the Premises for any purpose otherthan the permitted uses under this Lease, (c) the proposed transfer would causeLandlord to be in violation of any other lease or agreement to which Landlordis a party or would give any occupant of the Building either the right tocancel its lease or to make a claim against Landlord, (d) the proposedtransferee fails to deliver to Landlord its written assumption for all of theobligations to be performed by Tenant under the Lease in connection with theportion of the Premises which is the subject of the proposed transferee, (e) ifTenant and all guarantors will not continue to remain liable on this lease or(f) the proposed transferee’s operating experience or reputation arcinconsistent with those of other tenants in the Building. Consent by Landlordto one assignment or subletting shall not operate as a waiver of thelimitations set forth in this Section 18 as to future assignments or subleases.If Tenant requests Landlord’s consent to any assignment of this Lease orsubletting of the Premises or any portion thereof, Landlord, at its option, mayelect to terminate this Lease as to the portion of the Premises affected by theaction for which consent is requested and enter into a direct lease with theproposed assignee or subtenant. Any assignment or sublease without Landlord’sprior written consent shall, at Landlord’s option be void. No assignment orsublease shall release Tenant from primary liability hereunder. Each assignmentand sublease shall be by an instrument in writing in form satisfactory toLandlord. In addition Tenant agrees that if Tenant assigns its interest in thisLease or sublets the Premises, Tenant shall pay to Landlord one half (1/2) ofany rent and any and all consideration received by Tenant for such assignmentor sublease received from the sublessee or assignee that exceeds the amount ofthe Rent (the “Excess Rent”). Tenant may deduct from the Excess Rent allreasonable expenses incurred by Tenant attributable to the sublease orassignment. If Tenant is a corporation, then any transfer of this Lease bymerger, consolidation or liquidation, or any change in the ownership of, orpower to vote the majority of Tenant’s outstanding stock, shall constitute anassignment for the purposes of this Lease. If Tenant is a partnership, then achange in general partners or voting or decision-making control or thepartnership shall also constitute an assignment. Tenant shall also pay alllegal fees and other costs incurred by Landlord in connection with Landlord’sconsideration of Tenant’s request for approval of assignments or subleases,including assignments for security purposes. Notwithstanding anything to thecontrary herein, a reorganization of or sale of shares between the existingshareholders of Tenant at the time of execution of this Lease (“ExistingShareholders”) shall not constitute an assignment for the purposes of thisLease, nor shall a sale of up to 50% of the voting shares in the Tenant’s outstandingstock to outside investors constitute an assignment for the purposes of thisLease if the Existing Shareholders or any one of them, retain control of theremaining 50% of the voting shares of stock. Notwithstanding anything above tothe contrary, if the Lease Guarantee Agreement (Exhibit E) has expired, andTenant wishes to sublease all of the Premises to an unrelated third party,Landlord may consider the current assets or the tangible net worth (determinedin accordance with general accepted accounting principles, consistently appliedby Tenant’s and the proposed transferee’s respective independent certifiedpublic accountants) of the proposed transferee and any guarantor, indetermining whether to grant or withhold Landlord’s consent to the sublease.

 

19.           Assignmentby Landlord. If Landlord sells or otherwise transfers the Building, or ifLandlord assigns its interest in this Lease, such purchaser, transferee orassignee thereof shall be deemed to have assumed Landlord’s obligationshereunder, and Landlord shall thereupon be relieved of all liabilitieshereunder arising thereafter, but this Lease shall otherwise remain in fullforce and effect. Tenant shall attorn to Landlord’s successor.

 

20.           Destruction.If the Premises are rendered partially or totally untenantable by fire or othercasualty, and if the damage is repairable within sixty (60) days from the dateof the occurrence, then if insurance proceeds are available to pay the fullcost of the repairs (less any deductible) Landlord shall repair the Premiseswith due diligence so long as at least the then-unexpired term of this Lease isat least one hundred eighty (180) days; otherwise Landlord may elect toterminate this Lease by written notice to Tenant. During the repair orconstruction of the Premises, the base rent shall be abated in the proportionthat the untenantable portion of the Premises bears to the whole thereof, asdetermined by Landlord, for the period from the date of the casualty to thecompletion of the repairs, unless the casualty results from the negligence ofTenant or its officers, contractors, agents, invitees, guests or employees orTenant’s breach of the terms of this Lease. If the Building is destroyed ormaterially damaged, then regardless of whether the Premises are damaged,Landlord may terminate this Lease by written notice to Tenant. Landlord shalladvise Tenant of Landlord’s election to repair or terminate by giving notice toTenant thereof within thirty (30) days after the occurrence of the casualty. Inthe event of damage by casualty, Tenant shall, at its sole cost and expense,repair all damage to its own personal property and to all improvements whichTenant has

 

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made to the Premises. Landlordshall not be liable to Tenant for damages, compensation or other sums forinconvenience, loss of business or disruption arising from any repairs to orrestoration of any portion of the Building or Premises. If Landlord elects torepair such damage to the Premises or the Building, such repair shall becommenced and completed as soon as reasonably possible, subject to delaysresulting from circumstances beyond the reasonable control of Landlord.

 

21.           EminentDomain

 

(a)           Taking.If all of the Premises arc taken by eminent domain, this Lease shall terminateas of the date Tenant is required to vacate the Premises and all rentals shallbe paid to that date. The term “eminent domain” shall include the taking ordamaging of property by, through or under any governmental or statutoryauthority, and any purchase or acquisition in lieu thereof, whether thedamaging or taking is by government or any other person. If a taking of anypart of the Premises by eminent domain renders the remainder thereof unusablefor the business of Tenant, in the reasonable judgment of Landlord, this Lease,at the option of either party, may be terminated by written notice given to theother party not more than thirty (30) days after Landlord gives Tenant writtennotice of the taking, and such termination stall be effective as of the datewhen Tenant is required to vacate the portion of the Premises so taken. If thewhole or any material part of the Building shall be taken by eminent domain,Landlord, at its option, may terminate this Lease by written notice to Tenant. Ifthis Lease is so terminated, all rent shall be paid to the date of termination.Whenever any portion of the Premises is taken by eminent domain and this Leaseis not terminated, Landlord shall at its expense proceed with all reasonabledispatch to restore, to the extent of available condemnation or insuranceproceeds and to the extent it is reasonably prudent to do so, the remainder ofthe Premises to the condition they were in immediately prior to such taking,and Tenant shall at its expense proceed with all reasonable dispatch to restoreits personal property and all improvements made by it to the Premises to thesame condition they were in immediately prior to such taking. The base rentpayable hereunder shall be reduced from the date Tenant is required topartially vacate the Premises in the same proportion that the rentable areataken bears to the total rentable area of the Premises prior to taking.

 

(b)           Award.Landlord reserves all right to the entire damage award or payment for anytaking by eminent domain or a transfer in lieu thereof, and Tenant waives allclaim whatsoever against Landlord for damages for termination of its leaseholdinterest in the Premises or for interference with its business. Tenant herebygrants and assigns to Landlord any right Tenant may now have or hereafteracquire to such damages and agrees to execute and deliver such furtherinstruments of assignment as Landlord may from time to time request. Tenantshall, however, have the right to claim from the condemning authority allcompensation that may be recoverable by Tenant on account of any loss incurredby Tenant in removing Tenant’s merchandise, furniture, trade fixtures andequipment, provided, however, that Tenant may claim such damages only if theyare awarded separately in the eminent domain proceeding and not as part ofLandlord’s damages.

 

22.           Defaultby Tenant; Remedies. Time is of the essence of this Lease. If Tenantviolates or breaches or fails to keep or perform any covenant, term orcondition of this Lease, and if such default or violation continues for or isnot remedied within three (3) (or, if no default in the rent is involved,within ten (10) days after notice in writing thereof given by Landlord toTenant specifying the matter claimed to be in default, then Landlord shall havethe following rights and remedies, at its option which shall not be exclusive,but shall be cumulative and in addition and supplemental to any and all otherrights and/or remedies that Landlord may have at law or in equity:  (a) to declare the Lease term ended and toreenter the Premises without notice to vacate (any right to which is herebywaived by Tenant) and take possession of the Premises and remove all personstherefrom, and Tenant shall have no further claim thereon or hereunder andLandlord may recover from Tenant all rent then due or thereafter accruing andsuch other damages as are caused by Tenant’s default; or (b) without declaringthis Lease terminated, to reenter the Premises without notice to vacate (anyright to which is hereby waived by Tenant) and occupy the whole or any partthereof for and on account of Tenant and to collect any unpaid rentals andother charges, which have become payable, or which may thereafter becamepayable, all without being liable for forcible entry, trespass or other tort;or (c) even though it may have reentered the Premises, to thereafter elect toterminate this Lease and all of the rights of Tenant or to the Premises.

 

If Landlord reenters thePremises under option (b) above, Landlord shall not be deemed to haveterminated this Lease or the liability of Tenant to pay any rental or othercharges thereafter accruing, or to

 

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have terminated Tenant’sliability for damages under any of the provisions hereof, by any such reentryor by any action, in unlawful detainer or otherwise to obtain possession of thePremises, unless Landlord shall have notified Tenant in writing that it has soelected to terminate this Lease. In the event of any entry or taking possessionof the Premises, Landlord shall have the right, but not the obligation, toremove therefrom all or any part of the personal property located therein andmay place the same in storage at a public warehouse at the expense and risk ofTenant.

 

If Landlord elects toterminate this Lease pursuant to the provisions of options (a) or (c) above,Landlord may recover from Tenant as damages, the following:  (i) the worth at the time of award of anyunpaid rental which had been earned at the time of such termination; plus (ii)the worth at the time of award of the amount by which the unpaid rental whichwould have been earned after termination until the time of award exceeds theamount of such rental loss Tenant proves could have been reasonably avoided;plus (iii) the worth at the time of award of the amount by which the unpaidrental for the balance of the term after the time of award exceeds the amountof such rental loss that Tenant proves could be reasonably avoided; plus (iv)any other amount necessary to compensate Landlord for all the detrimentproximately caused by Tenant’s failure to perform its obligations under thisLease or which in the ordinary course of things would be likely to resulttherefrorn, including but not limited to, any costs or expenses incurred byLandlord in (a) retaking possession of the Premises, including reasonableattorneys’ fees therefor, (b) maintaining or preserving the Premises after suchdefault, (c) preparing the Premises for reletting to a new tenant, includingrepairs or alterations to the Premises for such reletting (d) leasingcommissions, and (e) any other costs necessary or appropriate to relet thePremises; plus (v) at Landlord’s election, such other amounts in addition to orin lieu of the foregoing as may be permitted from time to time by the laws ofthe State of Washington

 

As used in items (i) and(ii) above, the “worth at the time of award” is computed by allowing interestat the interest rate specified in Section 7 hereof. As used in item (iii)above, the “worth at the time of award” is computed by using a discount rate offour percent (4%).

 

For all proposes of thisSection 22 only, the term “rental” shall be deemed to be the base rental andall additional rent and other sums required to be paid by Tenant pursuant tothe terms of this Lease. Finally, if Tenant vacates or abandons the Premisesand fails to reoccupy them within ten (10) days after Landlord (1) delivers anotice to the Premises (which will be unoccupied) demanding such re-occupancyand (2) mails by certified or registered mail a copy of the notice to anyforwarding address given by Tenant to Landlord in writing, Tenant shall be indefault under this Lease.

 

23.           Insolvency.If a petition is filed under the United States Bankruptcy Act or other law tohave Tenant, or any guarantor of this Lease (‘Guarantor”) reorganized,dissolved or liquidated, or if a trustee or receiver is appointed for Tenant’sassets under the United States Bankruptcy Act or other law, or if a proceedingis commenced to foreclose any mortgage or any other lien on Tenant’s interestin the Premises or on personal property kept or maintained in the Premises, orif Tenant or Guarantor makes an assignment for the benefit of its creditors,then Tenant shall be deemed to be in default hereunder.

 

24.           Waiver.Neither the acceptance of rent nor any other acts or omissions of Landlord atany time or times after the happening of any event authorizing the cancellationor forfeiture of this Lease shall operate as a waiver of any past or futureviolation, breach or failure to keep or perform any covenant, agreement, termor condition hereof or to deprive Landlord of its right to cancel or forfeitthis Lease, upon the written notice provided for herein, at any time that causefor cancellation or forfeiture may exist, or be construed so as at any futuretime to estop Landlord from promptly exercising any other option, right orremedy that it may have under any term or provision of this Lease.

 

25.           Defaultby Landlord; Lender Protection.

 

(a)           Landlordshall not be in default unless Landlord fails to cure a default by Landlord ofits obligations under this Lease within thirty (30) days after its receipt ofnotice thereof from Tenant, or if each default is not capable of being curedwithin said thirty (30) day period, Landlord has failed to commence such cureand diligently pursue such cure until completion.

 

(b)           Inthe event of any uncured default on the part of Landlord, which default wouldentitle Tenant to terminate this Lease, Tenant shall not terminate this Leaseor pursue any other remedy

 

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unless Tenant hasnotified Lender, at least sixty (60) days in advance of the proposed effectivedate of such termination. During said sixty (60) day period Lender shall beentitled to commence to cure the default. If the default is not susceptible ofcure with due diligence within said sixty (60) day period, the Lease shall notbe terminated if the Lender shall have commenced to cure the default within saidsixty (60) day period and shall pursue the cure with due diligence thereafter. Ifthe default is one which is not susceptible to cure by the Lender within saidsixty (60) day period because the Lender is not in possession of the Buildingor Land, such sixty (60) day period shall be extended to include time needed toobtain possession thereof by the Lender by power of sale, judicial foreclosureor such other legal action required to recover possession provided that suchavenues are pursued with due diligence.

 

26.           Attorneys’Fees. If Landlord retains the services of an attorney in connection withenforcing the terms of this Lease, or if suit is brought for the recovery ofrent or additional rent due under this Lease or for the breach of any covenantor condition of this Lease or for the restitution of the Premises to Landlordand/or eviction of Tenant during the term of this Lease or after the expirationthereof, Landlord will be entitled to recover from Tenant Landlord’s reasonableattorneys’ fees, witness fees and other court costs incurred in connectiontherewith and at trial and on appeal and whether in bankruptcy court or otherlegal proceeding.

 

27.           Accessby Landlord. Landlord and its agents shall have the right to enter and togrant licensees the right to enter the Premises at any time to examine thesame, and to show them to prospective purchasers, lenders or tenants, and tomake such repairs, alterations, improvements or additions as Landlord may deemnecessary or desirable. If Tenant is not personally present to permit entry andan entry is necessary in an emergency, Landlord may enter the same by masterkey or may forcibly enter the same, without rendering Landlord liable therefor.Nothing contained herein shall be construed to impose upon Landlord any duty ofrepair except as specifically provided for herein. Tenant shall not change thelocks to the Premises without first advising Landlord thereof and providingLandlord with evidence that the new lock is keyed to Landlord’s master keysystem for the Building.

 

28.           HoldingOver. Any holding over by Tenant after the expiration of the Lease termshall not be deemed to be a renewal of this Lease but shall be deemed to createa tenancy at will on the terms and conditions set forth herein, except base rentshall be increased to two hundred percent (200%) of the base rent in effectduring the last month hereof, which tenancy may be terminated by either partyupon thirty (30) days written notice to the other party. If Tenant holds overwithout Landlord’s consent, in addition to all other remedies at law or inequity to which Landlord may be entitled, Tenant shall be liable for alldamages suffered by Landlord as a consequence of such holding over, including,but not limited to, the loss of any new tenant for the Premises or Building asa result of Tenant’s holding over and all amounts payable by Landlord to or forsuch prospective tenant, including, without limitation, damages suffered by theprospective tenant as a consequence of Tenant’s holding over.

 

29.           LeaseSubordinate in Mortgages. This Lease automatically shall be subordinate toall of Landlord’s mortgages or deeds of trust which heretofore and which mayhereafter affect the Premises or Building, to any sale and leaseback, to anyand all advances made or to be made thereunder, to the interest on theobligations secured thereby, and to all renewals, modifications,consolidations, replacements or extensions thereof. This subordination shall beself operative, and no further instrument of subordination shall be necessaryto effect such subordination; nevertheless, Tenant shall execute suchadditional instrument of subordination as may be required by any Lenderprovided only that such instrument of subordination shall provide that so longas Tenant is not in default hereunder, Tenant shall have continued enjoyment ofthe Premises free from any disturbance or interruption by reason of anyforeclosure of Lender’s deed of trust or mortgage. In the event of sale orforeclosure of any such mortgage or deed of trust, or exercise of the power ofsale thereunder, or in the event of a transfer in lieu of foreclosure, Tenantshall attorn to the purchaser (or transferee) of the Building at suchforeclosure or sale and recognize such purchaser (or transferee) as Landlordunder this Lease if so requested by such purchaser (or transferee). Suchattornment shall be self operative and no further instruments need be executedto effect such attornment. If any Lender elects to have this Lease superior toits mortgage or dead of trust and gives notice of its election to Tenant, thenthis Lease shall thereupon become superior to the lien of such mortgage or deedof trust, whether this Lease is dated or recorded before or after the mortgageor deed of trust.

 

30.           Estoppeland Other Certificates. Tenant shall, within ten (l0) days of Landlord’swritten request, acknowledge and deliver to Landlord (a) any subordination ornon-disturbance agreement or other

 

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instrument that Landlordmay require to carry out the provisions of Section 29, and (b) any estoppelcertificate requested by Landlord from time to time in the standard form ofLandlord or any such mortgagee or beneficiary of such deed of trust certifying,to the extent such be true, that (i) Tenant shall be in occupancy, (ii) thisLease is unmodified and in full force and effect, or if there have beenmodifications, that the same is in full force and effect as modified andstating the modifications, (iii) rent and additional rent have been paid onlythrough a certain specified date, and (iv) there are no offsets or claims.

 

31.           QuietEnjoyment. Tenant, upon fully complying with and promptly performing all ofthe terms, covenants and conditions of this Lease on its part to be performed,shall have and quietly enjoy the Premises for the term set forth herein, if itsperformance of such terms, covenants and conditions continues for such period,subject, however, to matters of record on the day hereof and to those mattersto which this Lease may be subsequently subordinated.

 

32.           Notices.Any notices required in accordance with any of the provisions herein shall bein writing and telecopied, delivered or mailed by registered or certified mail,return receipt requested, and, if mailed, shall be considered delivered three(3) days after deposit in such mail. The address to be used in connection withsuch correspondence and notices are the following, or such other address as aparty shall from time to time direct.

 

Landlord:               OverlakeOffice Building LLC

c/oKauri Investments

4014 Aurora AvenueNorth, Suite B

Seattle, WA  98103

 

Tenant:          BeforeCommencement of Lease:

Sound HealthSolutions, Inc.

14730 NE 8th St.,Suite 110

Bellevue, WA  98007

 

After Commencement ofLease:

Sound HealthSolutions, Inc.

15446 Bel-RedRoad, Suite B-15

Redmond, WA  98052

 

33.           Successorsor Assigns. All of the terms, conditions, covenants and agreements of thisLease shall extend to and be binding upon Landlord, Tenant and, subject to theterms of Section 18 hereof, their respective heirs, administrators, executors,successors and permitted assigns, and upon any person or persons coming intoownership or possession or any interest in the Premises by operation of law orotherwise, and shall be construed as covenants running with the land.

 

34.           TenantDefined. The word “Tenant” as used herein shall mean each and every person,partnership or corporation who is mentioned as Tenant herein or who executesthis Lease as Tenant. If there shall be more than one Tenant, they shall all bebound jointly and severally by the terms, covenants and agreements herein.

 

35.           Brokers’Commission. Tenant agrees to indemnify and hold Landlord harmless from allliabilities and claims for brokerage commissions or finder’s fees growing outof agreements which Tenant has made with brokers or finders.

 

36.           PartialInvalidity. If any term, covenant or condition of this Lease or theapplication thereof to any person or circumstance is, to any extent, finallyadjudicated to be invalid or unenforceable, the remainder of this Lease, or theapplication of such term, covenant or condition to persons or circumstancesother than those as to which it is held invalid or unenforceable, shall not beaffected thereby and each other term, covenant or condition of this Lease shallbe valid and be enforced to the fullest extent permitted by law.

 

37.           Recording.Tenant shall not record this Lease without the prior written consent ofLandlord. Upon Landlord’s request, both parties shall execute a memorandum ofthis Lease, in a form

 

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customarily used for suchpurpose of recordation. The memorandum shall describe the parties, the Premisesand the term of this Lease and shall incorporate the other terms of this Leaseby reference.

 

38.           Liabilityof Landlord. Tenant shall look solely to rents, issues and profits from thePremises for the satisfaction of any judgment or decree against Landlord,whether for breach of the terms hereof or arising from a right created bystatute or under common law. Tenant agrees that no other property or assets ofthe Landlord shall be subject to levy, execution or other enforcementprocedures for satisfaction of any such judgment or decree;  no partner of Landlord shall be sued or namedas a party in any suit or action (except as may be necessary to securejurisdiction over the partnership); no service of process shall be made againstany partner of Landlord (except as may be necessary to secure jurisdiction overthe partnership) no judgment will be taken against partner of Landlord; no writof execution will ever be levied against the assets of any partner of Landlord;and these covenants, limitations and agreements are enforceable both byLandlord and by any partner of Landlord.

 

39.           ForceMajeure. Landlord shall not be deemed in default hereof nor liable fordamages arising from its failure to perform its duties or obligations hereunderif such is due to causes beyond its reasonable control, including, but notlimited to, acts of God, acts of civil or military authorities, fires, floods,windstorms, earthquakes, strikes or other labor disturbances, civil commotionor war.

 

40.           Nameof Building. Landlord reserves the right to change the name of the Building.Tenant agrees that such change shall not affect in any way its obligationsunder this Lease, and that, except for the name change, all terms andconditions of this Lease shall remain in full force and effect. Tenant agreesfurther that such name change shall not require a formal amendment to thisLease, but shall be effective upon Tenant’s receipt of written notificationfrom Landlord of said change.

 

41.           FinancialStatements. Within ten (10) days after Landlord’s request therefore, Tenantshall deliver to Landlord a financial statement for Tenant’s prior quarter andfiscal year. Tenant shall certify the accuracy of such statements. Landlord maymake these financial statements available to potential lenders or purchasers,but shall otherwise preserve their confidentiality except in connection withlegal proceedings between the parties or as otherwise directed by court rule ororder.

 

42.           Parking.Tenant shall have a license to use up to the number of parking spaces specifiedin Section 1(h) on an unassigned basis, subject to such reasonable rules andregulations as may be established from time to time therefor by Landlord. Tenantmay reduce the number of parking spaces licensed to it after giving Landlordthirty (30) days prior written notice of the reduction; provided that no suchreduction shall be effective until Tenant surrenders to Landlord the key cards,stickers or other identification materials, if any, used for access for parkingsurrendered.

 

43.           Relocation.Intentionally Deleted.

 

44.           AgencyDisclosure. Pursuant to WAC 308-124D-040, at the signing of this agreementTim Chin of Colliers International represented the Landlord exclusively at thistransaction and Rex Noffsinger of Colliers International represented the Tenant.Each party signing this document confirms that prior oral and/or writtendisclosure of agency was provided to them.

 

45.           Executionby Landlord and Tenant. Landlord shall not be deemed to have made an offerto Tenant by furnishing Tenant with a copy of this Lease with particularsinserted. No contractual or other rights shall exist or be created betweenLandlord and Tenant until all parties hereto have executed this Lease and fullyexecuted copies have been delivered to Landlord and Tenant.

 

46.           EntireAgreement; Applicable Law. This Lease and the Exhibits attached hereto, andby this reference incorporated herein, set forth the entire agreement ofLandlord and Tenant concerning the Premises, and there are no other agreementsor understandings, oral or written, between Landlord and Tenant concerning thePremises. Any subsequent modification or amendment of this Lease shall bebinding upon Landlord and Tenant only if reduced to writing and signed by them.This Lease shall be governed by, and construed in accordance with the laws ofthe State of Washington.

 

IN WITNESS WHEREOF, theparties hereto have executed this instrument the day and year indicated

 

15

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below.

 
| Executed this        day                                                                                                                                      | LANDLORD                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|
| of                         ,  20      |                          |
|                                                                                                                                                                                   | Overlake Office  Building LLC |
|                                                                                                                                                                                   |                          |
|                                                                                                                                                                                   |                          |
|                                                                                                                                                                                   | By:                           |   |   |
|                                                                                                                                                                                   |                          | James B. Potter |
|                                                                                                                                                                                   | Its: Manager                  |
|                                                                                                                                                                                   |                          |
|                                                                                                                                                                                   |                          |
| Executed this 29th day                                                                                                                                                                 | TENANT                        |
| of April, 2003                                                                                                                                                                         |                          |
|                                                                                                                                                                                   | Sound Health Solutions,  Inc. |
|                                                                                                                                                                                   |                          |
|                                                                                                                                                                                   | By:                           | /s/ Teresa  Girolami |   |
|                                                                                                                                                                                   |                          | Teresa M.  Girolami, M.D. |
|                                                                                                                                                                                   | Its: President                |
|                                                                                                                                                                                   |                          |
|                                                                                                                                                                                   |                          |
|                                                                                                                                                                                   | By:                           | /s/ Frances M. Gough |   |
|                                                                                                                                                                                   | Frances M. Gough,  M.D.       |   |
|                                                                                                                                                                                   | Its:                          | Director |   |
|                                                                                                                                                                                        |                               |  |  |  |

 

16

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**EXHIBIT A**

 

**LEGAL DESCRIPTION OF LAND(15446 BEL-RED ROAD BUILDING)**

 

Lots 4 A or LotLine Adjustment No. SS-83-13, according to the Lot Line Adjustment recordedunder Recording No. 8504100678, being a revision or Lot Line Adjustmentrecorded under Recording No. 8501160598, situate in the City of Redmond, Countyor King, State of Washington.

 

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**EXHIBIT B**

 

**FLOOR PLAN OF PREMISES**

 

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**EXHIBIT C**

 

**RIDER**

 

Option to Renew

Provided thatTenant is not in default with any term, condition, or covenant of this lease,Tenant shall have a one (1) time option to renew for a term of five (5) yearsat the same general terms and conditions then in existence under the leaseexcept the base rental rate, which will be at the then current market rate.

 

The parties shallnegotiate in good faith to establish the current market rate. If the partiesare unable to agree on such rate within thirty (30) days after Tenant givesLandlord its notice exercising the renewal option (the “Notice Date”), then anarbitrator(s) shall be selected to determine the current market rent. Thenumber of arbitrators shall be one, unless the parties cannot agree on a singlearbitrator. If the parties cannot agree on a single arbitrator within forty(40) days of the Notice Date, the parties shall each choose one arbitrator, andthese two arbitrators shall choose a third arbitrator who shall preside overthe proceedings. If the parties are unable to agree on a single arbitrator nolater than forty (40) days after the Notice Date, and a party fails to identifyits arbitrator within ten (10) business days of the first party’sidentification of their arbitrator, then the arbitrator appointed by the firstparty shall be the arbitrator to determine the issue. Each party shall bear thefees and expenses of retaining its arbitrator and the fees and expenses or thethird arbitrator (or the sole arbitrator as the case may be) and other expensesof the arbitration shall be borne equally by the parties. The arbitrator’sdetermination of current market rate shall be final and binding on the parties.Judgment upon the determination of current market rate rendered by thearbitrator may be entered into any court having jurisdiction over this matter.

 

If Tenant electsto exercise this option, Tenant shall notify Landlord in writing at the Noticeaddress, at least one hundred eighty (180) days prior to the expiration of theinitial lease term.

 

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**EXHIBIT D**

 

**TENANT IMPROVEMENT WORK**

 

Landlord shall providetenant improvements based on the proposed space plan, as attached in Exhibit B,with building standard finishes. Landlord shall pay for all costs associatedwith the initial space planning of Premises. Any additional architectural workrequired by Tenant regarding modification of space plan or furniture/equipmentlayout shall be at the sole cost of Tenant.

 

Tenant shall beresponsible for phone and data cabling

 

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**EXHIBIT E**

 

**LEASE GUARANTY AGREEMENT**

 

THIS LEASEGUARANTY AGREEMENT (this “Guaranty”) is made this 29th day of April, 2003 by TeresaGirolami and Frances Gough (“Guarantor”), to and for the benefit of OverlakeOffice Building LLC (“Landlord”).

 

RECITALS

 

Guarantoracknowledges that the following recitals are true and accurate:

 

A.            SoundHealth Solutions Inc. a(n)           (“Tenant”), and Landlord are parties to that certain Office Lease Agreement,dated                (the “Lease”), for certain premises described therein located at the 15446Bel-Red Road Building, Redmond, Washington (the “Premises”).

 

B.            Guarantoris the President and Director of Tenant.

 

C.            Asa condition to entering into the Lease, Landlord required Guarantor to executeand deliver this Guaranty and guarantee Tenant’s performance of its duties andobligations under the Lease.

 

D.            Guarantorhas determined that the Lease is for the mutual benefit of Tenant and Guarantorand that Guarantor will derive benefit therefrom.

 

AGREEMENT

 

NOW,THEREFORE, as an essential inducement to cause Landlord to enter into the Leaseand as part of Landlord’s consideration for doing so, Guarantor herebyincorporates the Recitals and hereby agrees as follows:

 

In theevent of any default by Tenant in the performance of Tenant’s duties andobligations under the Lease (the “Guaranteed Obligations”), Guarantor herebyunconditionally guarantees for the first (3) years of the initial term of thislease and promises to pay and perform the Guaranteed Obligations within five(S) business days of receipt of written notice of Tenant’s default. Guarantorfurther agrees this Guaranty is a guaranty of payment and not of collection andthat Landlord may proceed upon this Guaranty without first enforcing any rightsagainst Tenant.

 

Guarantorexpressly waives notice of acceptance of this Guaranty, renewal or extension ofany indebtedness or default in payment and agrees that Guarantor’s obligationunder this Guaranty shall be absolute and not subject to any reduction orlimitation resulting from any net or omission by Landlord to do so or delay indoing any act or thing to preserve its right against Tenant or in any mannerresulting in any lack of proper authorization or invalid execution of thisGuaranty.

 

Guarantorwaives diligence, presentment and demand for performance, notice ofnon-performance, protests, notice of protest, notice of dishonor, notice of thecreation or occurring of new or additional indebtedness of Tenant to Landlord,and notice of acceptance of the Guaranty.

 

Guarantorwaives notice of any action taken or omitted by Landlord, and any requirementthat Landlord be diligent and prompt in making demands to Guarantor.

 

Untilthe Guaranteed Obligations are fully paid and performed, and until each and allof the terms, covenants and conditions of this Guaranty arc fully performed,Guarantor shall not be released by any act or thing which might, but for theprovision of this Guaranty, be deemed a legal or equitable discharge. Guarantorhereby expressly waives and surrenders

 

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any defense toliability hereunder based upon the foregoing.

 

Guarantorwaives any right to require Landlord to proceed against Tenant, to proceedagainst any other person, firm, or corporation, or to pursue any other remedyin Landlord’s power before Guarantor may be required to perform Guarantor’sobligations hereunder. By making any demand against Guarantor, Landlord may,but shall be under no obligation to, make a similar demand on Tenant, and anyfailure by Landlord to make any such demand or to collect any payments fromTenant shall not impair or affect the rights and remedies of Landlord againstGuarantor.

 

Guarantoragrees to pay reasonable attorneys’ fees and all other costs and expenses whichmay be incurred by Landlord in the enforcement of this Guaranty.

 

ThisGuaranty shall be governed by the law of the State of Washington.

 

If theperson signing below is a married person, such persons spouse shall also signand be bound by the terms herein jointly and severally. If the person signingbelow does not have a person sign as a spouse, the person signing representsand warrants to Landlord that such person is unmarried.

 

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