ex101-officeleasedatedma






                                 Exhibit 10.1    [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN  OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR  CONFIDENTIAL.      OFFICE LEASE    REFERENCE DATE: May 9th, 2011.            This Lease (this “Lease”) is made and entered into by and between WCM HIGHLANDS II, LLC, a Washington limited liability  company (“Landlord”) and SEATTLE GENETICS, INC., a Delaware corporation (“Tenant”).    1. BASIC TERMS.  This Section sets forth certain basic terms of this Lease for reference purposes. This Section is to be read in conjunction with the  other provisions of this Lease and if there is any inconsistency between this Section and the other provisions of this Lease, this Section  shall control.    Premises (see §2)  Term (see §2)   Suite # Entire RidgePoint Building Lease Term (months) 84  Building Address 21717 30th Drive SE Lease Commencement 7/1/2011  City Bothell Base Rent Commencement 4/1/2012  State  Zip Code  Washington  98021  Lease Expiration  Renewal Options: See §1A  6/30/2018    Rentable Area (SF) (see §2)    Premises: First Floor    40,500   Second Floor 40,500   Total 81,000  Operating Expenses (see §5) Tenant Share of Total 100%  Permitted Uses Scientific research and development laboratory and general office uses, and no other  Guarantors None    Rent (see §§4,9) Start  Date  7/1/2011  End  Date  3/31/2012  Base Rent  Per RSF/Yr  $[ * ]  Fully Abated  Base Rent  Per Month  $[ * ]  Fully Abated   4/1/2012 6/30/2012 $[ * ] $[ * ]   7/1/2012 6/30/2013 $[ * ] $[ * ]   7/1/2013 6/30/2014 $[ * ] $[ * ]   7/1/2014 6/30/2015 $[ * ] $[ * ]   7/1/2015 6/30/2016 $[ * ] $[ * ]   7/1/2016 6/30/2017 $[ * ] $[ * ]   7/1/2017 6/30/2018 $[ * ] $[ * ]    Utilities Start Date  Full Share of Operating Expenses Start Date  Prepaid Rent  Security Deposit  Brokers (see §18.3):    Mutual execution and delivery of this Lease  July 1, 2011  $[ * ]  $[ * ]  Company          Agents  For Tenant Jones Lang LaSalle Bob Mooney, Hans Kemp  For Landlord Pacific Real Estate Partners Daniel Seger, Mark Flippo      1  





 






    2/42      Addresses for Notices & Rent (see §18.1):  Landlord:  Name WCM Highlands II, LLC  c/o Washington Capital Management, Inc.  Address 1301 5th Avenue, Suite 1500  Seattle, WA 98101  Phone 206-382-0825  Fax 206-340-0142    Property Manager:  GVA KIDDER MATHEWS  Address 500 – 108th Avenue NE, Suite 2400  Bellevue, WA 98004  Phone 425-283-5778  Fax 425-283-5793    Rent Payments to be sent to:  Name WCM HIGHLANDS II, LLC  Address P.O. Box 34860  Seattle, WA 98124    Tenant Notice Address  Prior to Commencement                                                                            After Commencement  Address  21823 30th Avenue SE At the Premises  Bothell, WA 98021  Phone 425-527-4000  Fax 425-527-4109    Insurance – Parties to be named as Additional Insured (see §10.1):  Landlord: WCM HIGHLANDS II, LLC  Property Manager: GVA Kidder Mathews  Lender/Mortgagee: None at this time  WCM: Washington Capital Management, Inc.    Exhibits. The following exhibits are a part of this Lease.  EXHIBIT A Legal Description  EXHIBIT B Intentionally Omitted  EXHIBIT C Work Letter  EXHIBIT D Rules and Regulations  EXHIBIT E Tenant’s ERISA Certificate  EXHIBIT F List of Equipment Tenant is Permitted to Remove  EXHIBIT G Proposed Space Plan  EXHIBIT H Disclosure of Hazardous Materials                  2  





 






    3/42      1A. Special Lease Terms, if any. The following additional Lease terms shall apply. To the extent of any inconsistency between this  Section 1A and the other provisions of the Lease, this Section 1A shall control.  Required Delivery Condition. Landlord shall deliver possession of the Premises to Tenant following mutual execution of this Lease  in AS-IS condition except that Landlord will spend up to $[ * ] (the “Repair Fund”) on repairs to building systems and structures  previously identified by Tenant, specifically, repairs to the [ * ].  Abatement of Tenant’s Share of Operating Expenses. Notwithstanding the provisions of Section 5, during the period from mutual  execution of this Lease through [ * ], Tenant’s share of Operating Expenses shall be abated and Tenant shall pay only for utilities  provided to the Premises commencing on the date of mutual execution and delivery of this Lease.  Cap on Management Fee. The management fee included in Operating Expenses shall not exceed [ * ]% of net rental income of the  Building.  Janitorial Services. Tenant shall separately contract and pay for all janitorial services to the Premises and shall cause such services  to be provided to the standard customary in a first class office building.  Audit Rights. Landlord shall permit Tenant the right, once per operating year, to audit Landlord’s operating statement showing  Tenant’s Share of the Operating Expenses for the year. The cost of such audit shall be paid by Tenant unless the audit shows that Landlord  has misstated Tenant’s Share of the Operating Expenses by more than five percent, in which case Landlord shall pay all reasonable costs of  audit; provided, however, that the audit not be performed on a “contingency” basis or other basis under which the auditor is paid a share of  any cost discrepancy discovered.  Options to Extend. Provided that Tenant is not in default after receipt of notice and expiration of any applicable cure period at the  time of exercise or at commencement of the Option Term (unless the default is cured within any applicable cure period), and provided that  Tenant has not failed to pay Base Rent when due under this Lease [ * ] during the prior [ * ], regardless of whether that default was  cured within the applicable cure period, then Tenant shall have [ * ] options to extend the Lease Term (each, an “Extension Option”) for a  period of [ * ] (each an “Option Term”) each, upon the same terms and conditions as are set forth in the Lease, except that Base Rent  shall be adjusted as described below and the provisions of this Lease regarding Base Rent, abatement of Base Rent and abatement of  Tenant’s Share of Operating Expenses, TI Allowance, Lobby Area Allowance and space planning allowance shall not be applicable. The  Extension Options shall be exercised, if at all, by written notice to Landlord at least [ * ] prior to the expiration of the then existing Term.  The Extension Options are personal to Tenant (except they may be transferred in connection with related party transfers addressed below  in this Section 1.A) and may not be exercised by any other assignee or sublessee and may not be exercised during any period that the  entire Premises is subleased out by Tenant (unless to a related party as set forth below). The exercise of each Extension Option shall  extend the Lease for the entire Premises.  Extension Rent. If Tenant exercises an Extension Option, the Base Rent schedule for the Option Term shall be equal to the then Fair  Market Rent including a fair market rate of escalation during the Option Term. As used herein “Fair Market Rent” shall mean the market  rent for a [ * ]. Fair Market Rent shall take into consideration, the improvements paid for by Landlord via the TI Allowance and the  Lobby Area Allowance. Fair Market Rent shall not take into consideration the value of any tenant improvements paid for solely by Tenant  except that it shall include the portion of the tenant improvements paid for by Tenant which represent the dollar value of the abated Base  Rent. If there are not five comparable leases of similar size leased spaces in the Canyon Park/Bothell submarket, the market shall be  expanded to include the greater Redmond/Kirkland market, as adjusted to reflect the Canyon                        3  





 






    4/42      Park/Bothell submarket. Tenant’s estimate of the Fair Market Rent shall be included with Tenant’s option exercise notice. Landlord shall  give Tenant notice of Landlord’s estimate of the Fair Market Rent within [ * ] days after receipt of Tenant’s notice and thereafter the  parties shall use good faith efforts to reach agreement on the Base Rent schedule for the Option Term within [ * ] after receipt of  Landlord’s estimate. If the parties do not reach agreement on the Fair Market Rent within [ * ], then each party shall select a real estate  appraiser with an MAI designation and at least [ * ] full-time commercial real estate appraisal experience in the office/high-tech industrial  market (including laboratory space) in the Bothell/Canyon Park area and those two appraisers shall meet and work in good faith to reach  agreement on the Fair Market Rent. If they reach agreement, then their decision shall be binding on the parties. If the two appraisers aren’t  able to reach agreement within [ * ] after their selection, then the first two appraisers shall (a) put in writing their determination of the  Fair Market Rent (the “Landlord’s Rent Proposal” and the “Tenant’s Rent Proposal”, respectively), and (b) jointly select a third appraiser  with the qualifications described above. Within [ * ] after the selection of the third appraiser, the third appraiser shall determine which of  the first two appraiser’s determinations most closely approximates what the third appraiser believes to be the Fair Market Rent. The Fair  Market Rent established by the third appraiser shall be determined no later than [ * ] after engagement and shall be binding on the parties.  Each party shall pay the cost of its appraiser and half the cost of the third appraiser.  Early Entry for Construction. Commencing upon mutual execution of this Lease, Tenant may enter the Premises to construct  Tenant’s Work (as defined in Section 2.5) in accordance with the Work Letter attached as Exhibit C to this Lease. During such early entry  period, all the provisions of the Lease shall apply other than the payment of Base Rent and Tenant’s Share of Operating Expenses,  however, Tenant shall pay all utilities and any costs directly related to construction and occurring during the construction period until the  Commencement Date.  Related Party Transfers. Notwithstanding the provisions of Section 11.1, Tenant shall not be required to obtain Landlord’s consent  to assign the Lease to (i) a company wholly owned by Tenant, or (ii) a company under common control with Tenant, or (iii) a company  that acquires Tenant or into which Tenant is merged [ * ] (a) [ * ], (b) a description of the proposed use of the Premises by the  Transferee, (c) a summary of the terms of the proposed Transfer, (d) past three years plus current financial statements, if not publicly  available, and the most recent filed federal income tax return of the proposed Transferee, and (e) a summary of the proposed Transfer  documents all prior to the effective date of the assignment unless such transaction has not been made public and in that case, within [ * ]  after such public announcement. Notwithstanding any other provision of this Lease, a public offering, sale or transfer of equity in the  Tenant entity, whether characterized as common or preferred stock or any other ownership interest conducted in accordance with  Securities Act of 1933, as amended, shall not require Landlord’s consent pursuant to this Section. No such assignment shall release Tenant  from its obligations hereunder except in the case of a merger or acquisition in which Tenant is not the surviving entity. Sections 11.1, 11.5,  11.6 and 11.7 shall not apply to transfers permitted under this paragraph where Landlord’s consent is not required.    Exterior Building Signage. Subject to City of Bothell rules and regulations, Canyon Park Business Owners Association Covenants  and approvals and Landlord’s reasonable approval, Tenant shall have the right to a sign on the Building façade at Tenant’s expense. Tenant  shall have the right to select the exterior signage size, design and application subject to local codes, the Canyon Park Business Owners  Association Covenants and approvals, published sign criteria and Landlord’s reasonable approval. Any exterior sign shall be located on the  portion of the Building leased by Tenant. Prior to expiration or termination of this Lease, Tenant shall remove the sign and repair the  installation area so that the function and appearance of the affected area is indistinguishable from the surrounding area (including removal  of adhesive materials, patching and painting (if requested) the area to achieve such condition and appearance). Landlord shall be entitled to  post signage on the Building exterior and elsewhere on the Project offering any available space in the Building for lease or sale and will  work with Tenant to minimize the impact to Tenant in marketing such space.                          4  





 






    5/42      Tenant Improvements; TI Allowance. Subject to and in accordance with the detailed provisions set forth in the Work Letter,  Landlord agrees to provide a tenant improvement allowance of up to $[ * ] per rentable square foot (the “TI Allowance”) to be applied  toward the construction of improvements which are part of Tenant’s Work, as reasonably approved by Landlord, including a [ * ].  Lobby Area Upgrades and Lobby Area Allowance. Subject to and in accordance with the detailed provisions set forth in the Work  Letter, Landlord shall also provide an additional allowance of $[ * ] (“Lobby Area Allowance”) for Landlord approved improvements to  the core of the Building and the general area of the first floor of the Building which would be shared during periods that the Building is  occupied by multiple tenants, including the [ * ] (“Lobby Area Upgrades”), all such items to be included in the Approved Final Plans.  Specialized Equipment. With Landlord approval, Tenant shall have the right to install (but shall not have the right to have the TI  Allowance apply to) specialized improvements and equipment necessary for the operation of its intended use, including but not limited to,  glass wash, autoclave, purified water system, central vacuum, nitrogen gas, fume hoods, cold rooms, warm rooms, freezers, and NMR,  emergency generator and security systems. Any such items paid for solely by Tenant, and not by application of the TI Allowance, shall  remain the property of Tenant and may be removed at the end of the Term, as it may be extended, so long as Tenant fully repairs and  restores any affected portion of the Premises. The cost of the foregoing equipment shall not be included in the calculation of the amounts  funded by Tenant under Section F.4. of the Work Letter.  Potential Reduction in TI Allowance. The TI Allowance is subject to reduction if Tenant does not fund its required amounts of  Eligible Costs as further described in Section F.4. of the Work Letter.  Space Plan. Landlord and Tenant have agreed to the proposed space plan attached hereto as Exhibit G, which provides some  information on the planned tenant improvements to the second floor of the Premises and Lobby Area Upgrades. Such proposed space plan  and all details of such work shall be finalized and the Approved Final Plans described in the Work Letter.  Bidding and Approval of Contractor and Architect. Tenant shall competitively bid the costs of construction and select its own  architect and union contractors and subcontractors. Such architect and union contractors/subcontractors must be reasonably approved by  Landlord. The parties hereby agree that Stock and Associates, Lease Crutcher Lewis, and GLY are acceptable architects and contractors, as  the case may be. Tenant shall have the right to contract directly with the general contractor and all vendors and subcontractors.  Removal of Improvements. At the time Landlord approves Tenant’s Work (as described in the “Approved Final Plans” in the Work  Letter), Landlord will notify Tenant whether it will be required to remove any specialized improvements shown in those plans and restore  the affected space upon vacating. If Landlord does not notify Tenant at such time, it shall be assumed that Landlord requires Tenant’s  removal of such improvements. Upon expiration of the Lease or earlier termination of the Lease, Tenant shall have the right to remove its  fixed equipment not funded by the TI Allowance (equipment paid for and installed by Tenant) and any other mutually agreed equipment.  Exhibit F hereof is a list of equipment Tenant is permitted to remove at the end of the Term as of the date of this Lease. Tenant shall repair  all damage to the Premises associated with the removal of such equipment, reasonable wear and tear excepted. Landlord’s consent, not to  be unreasonably withheld, conditioned or delayed, is required to amend Exhibit F including listing any additional improvements.  Restoration of First Floor Common Areas. Prior to Tenant’s surrender of the Premises to Landlord, Tenant, at Tenant’s expense,  shall install a second set of restrooms on the first floor comparable to the then existing restrooms and will reconfigure the front entry area  appropriate for multi-tenant use, in accordance with plans and specifications to be approved by Landlord.                          5  





 






    6/42      Hazardous Materials Storage. Tenant shall be permitted to have secured areas within the Premises and a secured area outside the  Building for the storage of Hazardous Materials subject to Landlord’s approval of all aspects of such storage areas and subject to strict  compliance with Section 17 below, including but not limited to any applicable federal, state or local laws, regulations or codes referenced  therein.  Parking; Bike Shelter. Tenant shall have the right to use the parking areas on the Project free of charge throughout the Lease Term  and any extensions thereof. Tenant shall have the right to construct a bicycle shelter near the rear of the Building in one of the parking  stalls in a mutually agreeable location of the parking lot at no additional charge; provided, however, that the installation of such bicycle  shelter shall not violate any zoning regulation, permit condition, or other use restriction applicable to the Project (defined in Section 2.1).  Generator. Tenant shall have the right to place a generator for stand-by power in a mutually agreeable location of the parking lot at  no additional charge provided, however, that the installation of shall not violate any zoning regulation, permit condition, or other  restriction applicable to the Project. The pad shall be constructed by Tenant in accordance with plans approved in advance by Landlord,  which plans shall including fencing and such curbing as is necessary to contain any fuel spill. Tenant may install on the pad a backup  generator and fuel tank (collectively, the “Generator”), the make, model and design of which shall be subject to Landlord’s prior approval,  which shall not be unreasonably withheld. To the extent that details of the Generator, pad and other matters related to the Generator are  included in the Approved Final Plans, those details shall be approved at the same time as the balance of the Approved Final Plans. The  design and operation of the Generator and pad shall be such as to avoid material interference with others. The Generator shall be used only  for backup power and may not be used as a primary power source, nor may it be used by any other party. The Generator and pad shall be  subject to all the terms of this Lease, including but not limited to Sections 8.3, 10, and 17, provided only that the square footage of the  Generator pad shall not be included in the calculation of the area of the Premises. All costs of maintenance, repairs, upgrades, licenses or  other expenses arising directly or proximately from the Generator shall be borne by Tenant. Upon expiration or earlier termination of the  Lease, Tenant shall remove all improvements and equipment from the Generator pad and shall provide such studies or other information as  is necessary to demonstrate to Landlord’s reasonable satisfaction that there has been no environmental contamination as a result of the  storage and operation of the Generator and the fuel tank. At the election of Landlord provided no later than [ * ] before expiration of the  Lease, Tenant shall be required to remove the Generator pad and shall restore the area to a clean, paved condition. Failure of Tenant to  remove all improvements and equipment from the Generator pad and restore same to the extent directed by Landlord shall be deemed a  holdover of the entire Premises until such removal is complete.  Broker Commissions. All parties recognize that Jones Lang LaSalle represented Tenant in the Lease negotiations and that Pacific  Real Estate Partners represented the Landlord. Landlord shall pay a market standard real estate commission to Jones Lang LaSalle in the  amount of $[ * ] for Years [ * ] of the Lease and in the amount of $[ * ] for Years [ * ] of the Lease, for a total commission of $[ * ]. No  commission shall be paid for any rent abatement periods under the Lease or any extension terms. The terms and conditions of the  commission shall be confirmed in a separate commission agreement between Landlord and Jones Lange LaSalle, upon terms and  conditions acceptable to Landlord. Payment of the commission shall be 50% upon mutual execution of this Lease and [ * ]% upon the  Commencement Date. Pacific Real Estate Partners compensation shall be pursuant to its listing agreement with Landlord.  Security Deposit in Investment Account. Tenant shall be allowed to place the Security Deposit in an investment account with a  third party mutually agreed upon by the parties, which shall include Kunath, Karren, Rinne & Atkin, Inc. so long as the documentation is  comparable to the documentation required by the landlord on Tenant’s lease at 21823 30th Avenue SE and Tenant pays all of Landlord’s  out of pocket expenses in connection with such documentation. All earnings on the Security Deposit shall accrue to the benefit of Tenant  and shall be added to the Security Deposit and returned to Tenant upon expiration or termination of the Lease unless Tenant is in default at  the expiration or termination of the Lease, in which case such amount shall be held until such default has been cured.                        6  





 






    7/42      See also: Section 17 regarding Hazardous Materials.    Landlord Repair Default. If Landlord is in default under this Lease for failing to make a required repair and if such failure results  in a portion of the Premises to not be useable for a period of time during such default, the Rent shall abate on that unusable portion of the  Premises for the period of the default.                                                                      7  





 






    8/42      2. PREMISES  2.1. Premises. The “Premises” shall be all of the area in the Building. The Building is located on the real property described in  Exhibit A (together with all improvements thereon, the “Project”). Landlord hereby leases the Premises to Tenant on the terms of this  Lease, but reserving to Landlord, the right to install, maintain, use, repair, relocate and replace stacks, pipes, ducts, conduits, wire and  utilities leading through the Premises in locations which do not materially interfere with Tenant’s use thereof. Tenant shall have access 24  hours per day, subject to closures for emergencies, repairs, similar matters and matters outside Landlord’s control; provided, that such  closures shall be appropriate for the specific matter and limited only to the space and time reasonably required to handle such matter.  2.2. Roof and Exterior Areas. Tenant shall not store anything outside the Premises, including equipment or materials, except as  expressly permitted in this Lease (for example, the Generator) and except for bicycles and company passenger vehicles located in a  mutually agreeable location. Subject to any specific access provisions elsewhere in this Lease, Tenant shall not permit any employee,  contractor or guest onto the roof of the Building.  2.3 Parking. Landlord grants to Tenant and Tenant’s employees and invitees during the term of this Lease, a license to use the  parking areas on the Project, at no additional charge, for the parking of motor vehicles, for use for bicycle parking, the Generator Pad and  outside Hazardous Materials storage during the term of this Lease. Landlord reserves the right at any time to grant use rights to others to  the extent not inconsistent with Tenant’s above uses, to promulgate rules and regulations relating to the use of such parking areas,  including changing the parking layout, and establishing reasonable time limits on parking, so long as such changes do not affect the  number of stalls provided Tenant pursuant to the license above. Tenant shall be responsible for meeting any carpool/vanpool or other  transportation obligations regarding its employees. Overnight parking for Tenant’s employees and agents shall be managed by Tenant in  accordance with and subject to Landlord’s property manager’s policies and procedures for overnight parking. Landlord is not responsible  for any theft of or damage to vehicles or their contents.  2.4 Acceptance of Condition. Landlord shall deliver possession of the Premises to Tenant following mutual execution of this Lease  in the condition described in the paragraph in Section 1A entitled Required Delivery Condition. Subject to delivery in compliance with  that paragraph, Tenant accepts the Premises in its condition as of the execution of the Lease, subject to all recorded matters, laws,  ordinances, and governmental regulations. Tenant (a) acknowledges that neither Landlord nor any agent of Landlord has made any  representation as to the condition of the Premises or the suitability of the Premises for Tenant’s intended use, and (b) warrants that Tenant  has made its own inspection of and inquiry regarding the condition of the Premises and is not relying on any representations of Landlord  or any broker with respect thereto, except as expressly set forth in this Lease, if any. By taking possession of the Premises, Tenant shall be  deemed to have accepted the current condition of the Premises, subject to Landlord’s obligations described in Required Delivery  Condition, and any alleged defects or deficiencies are waived.  2.5 Tenant’s Work. All initial improvements to the Premises, including Lobby Area Upgrades, are referred to as “Tenant’s Work”  and shall be governed by Exhibit C.  2.6 Rules and Regulations. Tenant shall comply with the Rules and Regulations established by Landlord from time to time for the  Project. The current Rules and Regulations are attached as Exhibit D. Notwithstanding anything to the contrary contained in this Lease or  any Rule or Regulation, in the event of any direct conflict between the Rules and Regulations and the terms of this Lease, this Lease shall  govern.                          8  





 






    9/42      3. LEASE TERM  The term of this Lease (the “Term”) shall commence (the “Commencement Date”) on July 1, 2011. If requested by Landlord, Tenant  will sign an acknowledgement of the Commencement Date, the date(s) that Tenant’s payments of Base Rent and Tenant’s Share of  Operating Expenses occur, and related information.    4. BASE RENT  Commencing on April 1, 2012, and continuing on the first day of each month thereafter, Tenant shall pay Landlord the Base Rent  stated in Section 1, in advance, without offset, deduction or demand. The Base Rent shall be paid to the address specified by Landlord. All  charges payable by Tenant other than Base Rent are “Additional Rent”. Unless this Lease provides otherwise, Tenant shall pay all  Additional Rent then due with the next monthly installment of Base Rent. The term “Rent” means Base Rent and Additional Rent. Rent  for any partial month shall be prorated and the Base Rent for April1, 2012 shall be paid on execution of this Lease by Tenant. Landlord  shall have all of the same remedies for Tenant’s failure to pay Additional Rent as for failure to pay Base Rent.    5. ADDITIONAL RENT  5.1 Tenant’s Share of Operating Expenses. Commencing on July 1, 2011, Tenant shall pay Landlord each year Tenant’s Share of  Operating Expenses for that year, prorated for any partial year in the Term. Each year, Landlord shall give Tenant written notice of the  estimated amount and on first day of each month Tenant shall pay Landlord 1/12th of the annual estimate. Landlord may revise its estimate  during the year with subsequent payments based upon the revised estimate. After the close of each year, Landlord will provide a statement  showing Tenant’s Share of Operating Expenses for such year, the payments made during the year and any balance due or credit owing.  Landlord will use commercially reasonable efforts to provide the statement within [ * ] after the end of the year. Tenant shall pay any  balance owing within [ * ] after receipt of the statement, and any credit due Tenant shall be credited to Tenant’s next monthly estimated  payment or if the Lease has terminated or expired, it shall be promptly refunded to Tenant.  5.2 Operating Expenses Definitions. The following terms shall have the following meanings:    Operating Expenses. “Operating Expenses” shall mean all costs incurred by Landlord in connection with the Project including  insurance, utilities, Real Property Taxes, Project Work (Section 7.2), repairs, operation, maintenance and replacements, management fees  and including amortization of capitalized items over the useful life of such items in accordance with generally accepted accounting  principles with interest at the Prime Rate published by the Wall Street Journal (the “Prime Rate”) plus [ * ]% per annum. Notwithstanding  anything to the contrary contained in this Lease, the following shall not be included within Operating Expenses:  Leasing commissions, attorneys’ fees, and other expenses incurred in connection with negotiations or disputes with tenants, or  in connection with leasing, renovating, or improving space for tenants or other occupants or prospective tenants or other occupants of the  Project.  The cost of any special service provided to any tenant (including Tenant) for which a separate charge is made.  Any depreciation on the Project.                          9  





 






    10/42      Except for the amortized portion thereof (using the useful life of a given capital item and interest at the Prime Rate plus [ * ]%  per annum), costs of a capital nature, including but not limited to capital improvements and alterations, capitalized equipment, capital  repairs, as determined in accordance with generally accepted accounting principles.  Overhead profit increments paid to Landlord’s subsidiaries or affiliates for management or other services on or to the building  or for supplies or other materials to the extent that the cost of the services, supplies, or materials exceeds the cost that would have been  paid had the services, supplies, or materials been provided by unaffiliated parties on a competitive basis.  All interest, loan fees, and other carrying costs related to any mortgage or deed of trust or related to any capital item, and all  rental and other payable due under any ground or underlying lease.  Advertising and promotional expenditures.    Costs of repairs and other work occasioned by fire, windstorm or other casualty of an insurable nature to the extent Landlord  has received insurance proceeds to pay for the repairs.  Any costs, fines, or penalties incurred due to violations by Landlord of any governmental rule or authority, this Lease or any  other lease in the Project.  Management fees in excess of [ * ]% of net rental income from the Project.    The cost of correcting any building code or other violations which were violations prior to the Commencement Date of this  Lease.    The cost of containing, removing, or otherwise remediating any contamination of the Project (including the underlying land and  ground water) by any toxic or Hazardous Materials where such contamination was pre-existing on the Commencement Date and was not  caused by Tenant Parties (defined in Section 10.3).  Costs for sculpture, paintings, or other objects of art.    Wages, salaries, or other compensation paid to any executive employees above the grade of project manager.    If the Wall Street Journal ceases publishing a Prime Rate, then the Prime Rate announced by Bank of America, or its successors shall be  used.  R eal Property Taxes: “Real Property Taxes” shall mean all current and future taxes, governmental charges and assessments  (including local and special improvement districts) levied on the Project, or any improvements, fixtures and equipment and all other  property of Landlord, real or personal, used in the operation of the Project; any taxes in addition to or in lieu of, in whole or in part, such  taxes; any tax upon leasing or rents of the Project, including any sales or use taxes; any other governmental charge such as payments for  transit or environmental facilities; and all costs and expenses incurred by Landlord in connection with the attempt to reduce any of the  foregoing, whether by negotiation or contest but excluding any taxes assessed directly against Tenant, which shall be paid by Tenant. If the  present method of taxation changes so that in lieu of or in addition to the whole or any part of any Real Property Taxes, there is levied on  Landlord a tax directly on rents or a franchise tax, assessment, or charge based, in whole or in part, upon such rents or revenues, including  any business and occupation tax to the extent specifically applied to the revenues of the Project, then all such taxes, assessments, or  charges, or the part thereof so based, shall be deemed to be included within the term “Real Property Taxes” for purposes                        10  





 






    11/42      hereof. Real Property Taxes shall not include any franchise or state income tax, estate tax, or other similar tax, and shall not include any  late payment penalties if Tenant has paid the amounts due under Section 5.1 as and when due.  5.3. Intentionally Omitted.    5.4 Utilities. Tenant shall pay the cost of all utilities provided to the Premises. Prior to the date Tenant commences any construction  work in the Premises, Tenant shall arrange for all utilities services from the applicable supplier.  5.5 Net Lease. This Lease and the Base Rent are intended to be fully net of expenses incurred by Landlord in connection with the  Project, except as expressly set forth in this Lease.    6. USE; TENANT’S OPERATIONS  6.1 Permitted Uses. Tenant may use the Premises only for the Permitted Uses set forth in Section 1. Tenant shall not cause or permit  the Premises to be used in any way which (a) violates any applicable governmental regulations, (b) annoys or interferes with the rights of  others or Landlord, (c) constitutes a nuisance or waste, or (d) adversely impacts insurance. Tenant shall not conduct or permit any auctions  or sheriff’s sales at the Premises or within the Premises, except for sales related to equipment funded solely by Tenant if Landlord consents  in writing to same, or permit any portion of the Premises to be used for a “call center,” any other telemarketing use, or any credit  processing use.  6.2 Signs/Auctions. So long as Tenant occupies the Premises, Tenant shall have the right to have its business name displayed on any  reader board located in the Project lobby and/or in the elevator lobby on Tenant’s floor, and immediately outside the Premises, all in the  Project standard size, typeface, materials and locations, as determined by Landlord. Tenant shall not place any other signs on the Premises  or Project or within the Premises and visible from the exterior of the Premises without Landlord’s prior written consent. If Landlord has  previously approved any signage, it must be shown on a Rider or Exhibit to this Lease, initialed by Landlord. Any details of Tenant’s  signage included in the Approved Final Plans shall be considered approved when Landlord approves the Approved Final Plans.  6.3 Building Penetrations. Tenant shall not make any penetrations in the Building (roof, walls, foundations, etc.) without Landlord’s  prior written consent, which consent shall not be unreasonably withheld. If Tenant is permitted to penetrate the Building, the consent shall  be subject to Landlord’s conditions, including (a) Landlord’s approval of plans and specifications for the penetration and the contractor to  perform it, (b) arrangements to insure that the penetration will not adversely affect any warranty, (c) Tenant’s agreement to reimburse  Landlord for costs incurred in connection with any later problems which develop with the penetrated area, and (d) Tenant’s agreement to  remove the equipment before the end of the Lease and completely seal the penetration to Landlord’s satisfaction and in compliance with  any applicable warranty. In addition, depending on the seriousness of the penetration, Landlord may require Tenant to post a deposit to  guarantee Tenant’s performance. To the extent that details of any penetrations are included in the Approved Final Plans, those details shall  be approved at the same time as the balance of the Approved Final Plans and Tenant shall be responsible for insuring that the penetrations  do not adversely affect any Landlord warranties and for costs in connection with any later problems which develop with the penetrated  areas as well as the obligation to remove and re-seal the penetration unless Landlord agrees to allow the penetration to remain. If Tenant  penetrates the building without Landlord’s written consent or violates the terms of the consent, Tenant shall be in default hereunder until  and unless Tenant repairs such penetration to its pre-existing condition and if not done to Landlord’s satisfaction, Landlord may repair  such penetration and Tenant shall reimburse Landlord for all costs related thereto.                          11  





 






    12/42      6.4 Telecommunications Services.    6.4.1 Tenant. Tenant, at its expense, shall arrange for all telecommunications services desired by Tenant. Landlord will have no  responsibility for the maintenance of Tenant’s telecommunications equipment and/or wiring (“Telecom Facilities”), or for any  infrastructure to which it is connected. Landlord may include in Operating Expenses, or may charge Tenant the portion of all costs  attributable to Tenant, in which case Tenant may apply the TI Allowance to such costs, in connection with: constructing and/or installing  additional risers, conduit or equipment rooms to accommodate Tenant’s Telecom Facilities; providing cable pair assignments; computer  equipment and/or software for maintaining records of line connections; third party cable management fees; fees of any consulting  engineers or other experts Landlord engages for the effective management of Telecom Facilities or Tenant’s compliance with this  Section 6.4.    6.4.2 Telecom Problems. Landlord will have no responsibility for any claims, costs or damages (“Telecom Claims”) in  connection with, and Landlord does not warrant that Tenant’s use of its Telecom Facilities will be free from all of the following  (collectively, “Line Problems”): (a) any shortages, failures, variations, interruption caused by (i) any failure of the environmental  conditions or the power supply for the Building to conform to any requirements for Tenant’s Telecom Facilities, or (ii) any other problems  associated with any of Tenant’s Telecom Facilities; (b) any failure of any Telecom Facilities to satisfy Tenant’s requirements; or (c) any  eavesdropping or wire-tapping by unauthorized parties. The occurrence of any Line Problems shall not be considered an actual or  constructive eviction of Tenant or relieve Tenant from performance of Tenant’s obligations under this Lease. Notwithstanding the  foregoing, if Tenant’s equipment is damaged by the gross negligence or willful misconduct of Landlord (but not including Landlord’s  agents), Landlord will reimburse Tenant for the cost of the damage not to exceed the lesser of $[ * ] or the amount of Tenant’s applicable  property insurance deductible.  6.4.3 EMF. If Tenant’s Telecom Facilities create an electromagnetic field exceeding radiation limits permitted by FCC  regulations, as now or hereafter amended (“FCC Regs”), Landlord may require Tenant to take any and all steps necessary to reduce  radiation to levels permitted by the FCC Regs. Tenant will indemnify and hold Landlord harmless from all liability, costs and damages  arising out of Tenant’s electromagnetic emissions, including any failure of Landlord to take any action in connection with such emissions.  If Tenant’s Telecom Facilities and other Telecom Facilities located in the Project together exceed the radiation limits permitted by FCC  Regs, Tenant will pay its share, as reasonably determined by Landlord, of all costs associated with safety measures taken by Landlord.  6.4.4 Alternative Provider. If Tenant wishes to utilize the services of a telecommunications provider whose equipment is not  servicing the Building (an “Alternate Provider”), Tenant shall notify Landlord of the name of the Alternate Provider, the type of service to  be provided, the equipment Alternate Provider wishes to install in the Building and any other information that Landlord reasonably  requests. No Alternate Provider may install any equipment in the Building until Landlord has given its written consent, not to be  unreasonably withheld. Landlord may require that the following conditions be met: (a) the Alternate Provider entering into a written  agreement reasonably satisfactory to Landlord with all terms and conditions of the Alternate Provider’s access to the Project; (b) Landlord  will incur no expense, including for installation, maintenance and service; (c) Landlord’s right to approve the location, plans and  installation of all equipment and wiring; (d) before commencing any work in or about the Project, the Alternate Provider (1) supplies  Landlord with indemnities, evidence of insurance, financial statements and other information Landlord deems reasonably necessary; and  (2) agrees to abide by rules Landlord deems reasonably necessary to protect the Project and the interests of the other tenants; (e) Landlord  has reasonably determined that there is sufficient roof, riser, conduit and/or equipment space for the Alternate Provider’s equipment and  cabling; (f) the Alternate Provider is licensed, qualified to do business in the state where the Premises is located and has sufficient  experience and financial strength to perform its obligations; and (g) the Alternate Provider agrees to compensate Landlord in the amount                          12  





 






    13/42      reasonably determined by Landlord for the space used in the Building, unless this space is included in the Premises, and all costs that  Landlord may incur in Alternate Provider’s equipment within the Building. The provisions of this Section may be enforced solely by  Tenant and Landlord. No telephone or telecommunications provider shall be deemed a third party beneficiary of Section 6.4.  6.5 Compliance/Permits. Tenant shall obtain and pay for all permits related to its business and/or its specific use of the Premises. At  its expense, Tenant shall comply with all laws, orders, ordinances and regulations of federal, state or other governmental authorities and  with any direction made pursuant to law of any public officer with respect to the Premises or the use thereof, including any obligation to  make alterations in the Premises required as a condition of Tenant’s use or occupancy.    7. MAINTENANCE AND REPAIRS/LANDLORD SERVICES  7.1 Tenant’s Repairs. Except as provided in Section 1A (Special Lease Terms), Section 7.2 (Landlord’s Obligations), Section 12  (Damage or Destruction), and Section 13 (Condemnation), Tenant shall keep and maintain all portions of the Premises in good order,  condition and repair, including, interior and exterior doors and windows, floors, lighting (including bulbs) and all fixtures and equipment  in the Premises as well as Tenant’s generator and bike storage. Tenant’s repair and maintenance responsibility shall include replacement of  equipment and components which are Tenant’s responsibility to maintain and repair and which can no longer be brought into good  operating condition with repairs. If any part of the Project is damaged by any act or omission of Tenant, its agents, employees or invitees,  Tenant shall pay the cost of repairing or replacing the damage. Tenant shall maintain the portions of the Premises which Tenant is  obligated to maintain in an attractive and fully operative condition.  7.2 Landlord’s Obligations. Landlord shall be responsible for the maintenance and repairs to the exterior (the exterior of the  Building as well as the improvements to the portions of the Project outside the Building) and structural portions of the Building as well as  those portions of the building systems which Landlord from time to time elects to control the maintenance and repairs on (the “Project  Work”). Landlord agrees to maintain its portion of the Project in a manner consistent with a high quality building within the Canyon  Park/Bothell area in an attractive and fully operative condition. Project Work shall include the repair, maintenance and replacement of the  roof and roof membrane, life safety, electrical, plumbing and other mechanical systems to the extent that Landlord elects to control such  maintenance and repairs. If any Project Work is necessitated due to damage caused by Tenant, its agents or employees, Landlord may  require Tenant to pay the cost of that work within [ * ] of receipt by Tenant of the invoice to the extent such cost is not covered by  insurance carried by Landlord. Tenant waives the benefit of any present or future law which might give Tenant the right to repair the  Premises at Landlord’s expense or to terminate the Lease due to the condition of the Premises.  7.3 Basic Services. Tenant shall arrange directly with the provider for all utilities to the Premises and shall pay the costs as and when  due. Landlord may provide such security for the portions of the Project outside the Premises as it deems appropriate. Tenant shall provide  security against unauthorized entry into the Building. Landlord shall not be liable to Tenant for injury to its agents, employees, customers  or invitees, or for losses due to theft or burglary, or for damages done by unauthorized persons.  7.4 Intentionally Omitted.    7.5 Interruption of Service. Landlord does not warrant that any utilities or services will be free from interruption including by  reason of accident, repairs, alterations, or other causes. No utility interruption shall be deemed an eviction or disturbance of Tenant, or  render Landlord liable to Tenant for damages or relieve Tenant from the full and complete performance of all of Tenant’s obligations under  this Lease; provided only that to the extent casualty damage renders the Premises untenantable, and loss of rents arising therefrom are  covered by rental interruption insurance carried by Landlord, then and to that extent, rental on the Premises shall abate in the proportion  that the portion of the Premises rendered untenantable bears to the total Premises.                        13  





 






    14/42      8. ALTERATIONS  8.1 Alterations Procedures. Also see Section 1.A. Following any work performed pursuant to Exhibit C, Tenant shall not make any  alterations to the Premises without Landlord’s prior written consent, which shall not be unreasonably withheld so long as the alterations do  not affect the structure, the exterior appearance of the Building or the Building systems. Landlord may condition its consent on various  matters, including Tenant agreeing to remove the alterations and repair any resulting damage on Lease termination at Tenant’s cost, Tenant  posting security for the estimated removal/repair cost, paying a construction management fee to Landlord or its agent, Landlord’s approval  of the plans and specifications for the work, and use of union-affiliated contractors and subcontractors. Landlord may require Tenant to  provide commercially reasonable lien waivers prior to commencement of the work. All alterations, additions, and improvements shall be  done in a good and workmanlike manner, in conformity with all applicable laws and regulations, and by a contractor approved by  Landlord. Landlord’s approval of the contractor shall not be unreasonably withheld so long as the contractor or person selected by Tenant  to make the alterations and all subcontractors are signatory and in good standing with local unions (Landlord will work with Tenant to  identify qualifying contractors and subcontractors and shall only grant an exemption to this requirement if no qualified contractor or  subcontractor is available after diligent research). Upon completion of any such work, Tenant shall provide Landlord with “as built” plans,  copies of all construction permits, contracts and approvals, and proof of payment for all labor and materials. Notwithstanding the above,  Landlord’s consent shall not be required, but Tenant shall notify Landlord at least [ * ] days in advance for alterations not affecting  building systems or building structure or exterior and costing less than $[ * ] per alteration or $[ * ] aggregate per year. The parties  specifically agree that change in the location and configurations of cubicles are not considered alternations. At the time of requesting  Landlord’s consent to alterations (or at the time of notice of Landlord’s consent is not required), Tenant may request that Landlord elect  whether to require Tenant to remove such improvement or alteration upon expiration or termination of the Lease, and Landlord shall make  such election at the time of granting consent or within [ * ] days of request if consent is not required. If Landlord fails to make an  election, Landlord shall be deemed to have elected to have Tenant remove the alteration.  8.2 Mechanic’s Lien. Tenant shall have no express or implied authority to place any lien or encumbrance upon, Landlord’s interest  in the Premises or to burden the Rent for any claim in favor of any person dealing with Tenant, including those who furnish materials or  perform labor for any construction or repairs, and each such claim shall attach, if at all, only to Tenant’s leasehold interest. Tenant will  cause to be paid when due all sums owed for any labor performed or materials furnished in connection with any work performed on the  Premises for Tenant. Landlord may require Tenant to post a notice of Landlord’s non-responsibility with respect to the work prior to  starting the work and Landlord shall similarly have the right to post such notices. If any lien is filed against the Project in connection with  Tenant’s activities, Tenant shall, within [ * ] days after notice of the filing thereof, either (a) pay the amount of the lien and cause the lien  to be released of record, or (b) diligently contest such lien and deliver to Landlord a bond or other security satisfactory to Landlord. If  Tenant fails to timely take either such action, then Landlord may pay the lien claim, and any amounts so paid, including expenses and  interest, shall be paid by Tenant to Landlord within ten days after Landlord has invoiced Tenant therefor.  8.3 Condition upon Surrender. Also see Section 1.A. Upon the termination of the Lease, Tenant shall remove all its personal  property and surrender the Premises to Landlord, broom clean and in the same condition as received except for ordinary wear and tear  which Tenant was not otherwise obligated to remedy under this Lease, including without limitation all electrical, plumbing and other  mechanical systems for which Tenant has responsibility under Section 7.1 above in good operating condition and shall deliver all keys to  the Building and Premises to Landlord. In addition, except to the                            14  





 






    15/42      extent that Landlord provided its consent for a particular alteration to remain upon the expiration or termination of this Lease, Landlord  may require Tenant to remove any alterations, except for the Tenant’s Work and Lobby Area Upgrades, made by Tenant and to restore the  Premises to its prior condition, at Tenant’s expense. All alterations which Landlord does not require Tenant to remove shall become  Landlord’s property and shall be surrendered to Landlord on termination of the Lease, except that Tenant may remove any of Tenant’s  machinery or equipment which can be removed without material damage to the Premises. Tenant shall repair, at Tenant’s expense, any  damage to the Premises caused by the removal of any such machinery or equipment. Notwithstanding anything in this Section to the  contrary, Tenant shall not remove any fixtures or equipment considered a part of the real property without Landlord’s prior written consent  or unless required by Landlord. Such items shall include: any wiring; power panels, lighting or lighting fixtures; wall coverings; drapes,  blinds or other window coverings; floor coverings. Telecommunications and data cabling shall not be considered part of the real estate and  Landlord may elect either to require Tenant to remove it or leave it in place. All property required by Landlord to be removed from the  Premises at the end of the Term and which remains after Tenant vacates, shall be deemed abandoned and may, at the election of Landlord,  be retained as Landlord’s property, or may be removed from the Premises by Landlord at Tenant’s expense and either disposed of or stored  at Tenant’ expense. Tenant waives any claim against Landlord for damage to or disposal of any personal property removed from the  Premises by Landlord.    9. SECURITY DEPOSIT  Upon execution of this Lease, Tenant shall deposit with Landlord the Security Deposit specified in Section 1, which may be  deposited in an investment account in accordance with Section 1A. If a default continues beyond any applicable notice and cure period,  Landlord may apply all or part of the Security Deposit to any unpaid Rent or to cure any other defaults of Tenant. If Landlord uses any part  of the Security Deposit, Tenant shall restore the Security Deposit to its original amount within [ * ] after Landlord’s written request.  Tenant’s failure to do so shall be a default under this Lease and the overdue amount shall accrue interest as any delinquent payment. If [  * ], late charges are assessed against Tenant by Landlord, Landlord may, by written notice to Tenant, require Tenant to pay Landlord an  amount equal to [ * ] months Base Rent as an increase in the Security Deposit, due within [ * ] days after Tenant’s receipt of the notice. If  Landlord transfers its interest in the Premises, Landlord shall transfer the Security Deposit to its successor in interest, whereupon  Landlord shall be automatically released from any liability for the return of the Security Deposit. At the end of the Term, the remaining  Security Deposit shall be returned to Tenant after Landlord has verified that Tenant has fully vacated the Premises, removed all of its  property and surrendered the Premises in the condition required and otherwise Tenant is not in default in under any provision of this Lease;  provided that Landlord may hold back a portion of the Security Deposit until final determination of Tenant’s Share of Operating Expenses  due hereunder, whereupon any final adjustment shall be made and any remaining Security Deposit shall be returned to Tenant. Landlord’s  obligations with respect to the Security Deposit are those of a debtor and not of a trustee. Unless the Security Deposit is in an investment  account held by a third party, Landlord may commingle the Security Deposit with Landlord’s general funds and no interest shall be paid to  Tenant on the Security Deposit.    10. INSURANCE/INDEMNITY  10.1 Tenant’s Insurance. At its expense, Tenant shall obtain and maintain at all times during the term of this Lease: (a) commercial  general liability insurance, with completed operations coverage, with limits of at least $[ * ] per occurrence and $[ * ] general aggregate, or  such higher amounts as Landlord may from time to time reasonably designate on not less than [ * ] days’ notice to Tenant, consistent with  insurance levels required by prudent landlords for similar projects and uses in the area, containing an aggregate per location  endorsement during periods that Tenant’s general aggregate limit is less than $[ * ], a contractual liability endorsement covering the  matters set forth in Section 10.3, and primary with regard to the Premises [ * ] and shall not contain deductibles or self-insured retentions                        15  





 






    16/42      exceeding the following limits: (a) up to $[ * ] if Tenant’s then net worth is less than $[ * ], (b) up to $[ * ] if Tenant’s then net worth is less  than $[ * ], (c) up to $[ * ] if Tenant’ net worth is less than $[ * ], and (d) up to $[ * ] if Tenant’s net worth is greater than $[ * ]. The  policies shall contain waivers of subrogation with regard to Landlord and the other additional insureds listed in Section 1. The liability  policy shall be on an occurrence form and name the entities listed in Section 1 as additional insureds, as their interests may appear. All  insurers shall agree not to cancel or amend (including as to scope or amount of coverage) such policies without at least [ * ] prior written  notice to Tenant. Tenant shall give Landlord at least [ * ] prior written notice of any such cancellation or amendment, unless such  amendment is to increase the scope and or coverage provided under such polices. Tenant shall furnish Landlord with certificates of  insurance evidencing the above coverages upon request during the Term as well as a copy of the additional insured endorsement. If Tenant  manufactures on the Premises consumer goods, Tenant’s insurance shall include products liability insurance in the amounts specified for  commercial general liability insurance.  10.2 Landlord’s Insurance. As part of Operating Expenses, Landlord shall maintain (a) special causes of loss form replacement cost  insurance on the Building; (b) commercial general liability insurance insuring Landlord; (c) rental loss insurance; and (d) such other  insurance as Landlord elects to carry. The liability insurance obtained by Landlord shall be excess, secondary and non-contributory and  Tenant’s insurance shall be primary. Landlord shall not obtain insurance for Tenant’s fixtures or equipment or Tenant’s other property.  Operating Expenses shall include the deductibles on Landlord’s coverage. Tenant shall not do or permit anything to be done which  invalidates Landlord’s insurance policies or increases the premiums and any such increase shall be paid by Tenant.  10.3 Indemnity. Subject to Landlord’s release in Section 10.4.2, Tenant shall indemnify and defend (using legal counsel acceptable  to Landlord) all Landlord Parties (defined below) from any claims, costs (including attorneys’ fees and other litigation costs) or damages  (collectively, “Claims”) arising in connection with (a) the occupancy or use of the Premises by Tenant Parties (defined below) and  customers, including any work undertaken or contracted for by Tenant; (b) Tenant’s breach of this Lease, (c) any negligent or wrongful act  or omission of Tenant Parties or customers; (d) any accident, injury, occurrence or damage in or about the Premises but excluding claims  for physical damage to persons or property to the extent caused by Landlord’s gross negligence or willful misconduct or breach of this  Lease by Landlord; and (e) any Claim against Landlord by any employee or former employee of Tenant for matters arising in connection  with the Premises but only to the extent that any such Claim is not caused by or the result of breach of this Lease by Landlord. Tenant  agrees that the provisions of any employee injury insurance act, including Title 51 of the Revised Code of Washington, or any other  employee benefit act shall not operate to release or immunize Tenant from its obligations under this Section. This indemnity is not  contingent upon insurance coverage, is not limited to the amount of any insurance proceeds, and operates independently of the insurance  provisions of this Lease. The term “Landlord Parties” shall mean Landlord, any mortgagees, Washington Capital Management, Inc.  (“WCM”), the property manager, and their respective members, partners or other owners and affiliates, subsidiaries, successors and  assigns. The term “Tenant Parties” means Tenant, Tenant’s shareholders, members, partners or other owners, Tenant’s affiliates and  subsidiaries, and any directors, officers, employees, sublessees, licensees, invitees, agents, contractors and successors and/or assigns of  such persons or entities.  10.4 Waivers.    10.4.1 Tenant Waiver. Tenant hereby releases, waives and discharges the Landlord Parties from any and all claims Tenant  might otherwise now or hereafter possess associated with, any loss covered by insurance (or which would have been covered by the  insurance Tenant is required to carry hereunder), including the deductible portion thereof, regardless of cause.                            16  





 






    17/42      10.4.2 Landlord’s Waiver. Landlord hereby releases, waives and discharges the Tenant Parties from any and all claims  Landlord might otherwise now or hereafter possess associated with any loss covered by Landlord’s insurance (or which would have been  covered by the insurance Landlord is required to carry hereunder), but excluding the deductible portion thereof, regardless of cause.  Notwithstanding the foregoing or any other provision of this Lease to the contrary, if Landlord maintains environmental insurance for  which Tenant is not charged, there shall be no release or waiver of claims relating to such insurance and Tenant’s indemnities under this  Section 10 shall be primary to and not released by virtue of that environmental insurance.  10.5 Limitation on Indemnity. Notwithstanding any other provisions of this Lease to the contrary, in compliance with  RCW 4.24.115 as in effect on the date of this Lease, all provisions of this Lease pursuant to which a party (the “Indemnitor”) agrees to  indemnify the other (the “Indemnitee”) against liability for damages arising out of bodily injury to Persons or damage to property relative  to the construction, alteration, repair, addition to, subtraction from, improvement to, or maintenance of, any building, road, or other  structure, project, development, or improvement attached to real estate, including the Premises, (i) shall not apply to damages caused by or  resulting from the sole negligence of the Indemnitee, its agents or employees, and (ii) to the extent caused by or resulting from the  concurrent negligence of (a) the Indemnitee or the Indemnitee’s agents or employees, and (b) the Indemnitor or the Indemnitor’s agents or  employees, shall apply only to the extent of the Indemnitor’s negligence; PROVIDED, HOWEVER, the limitations on indemnity set forth  in this Section shall automatically and without further act be deemed amended so as to remove any of the restrictions contained in this  Section no longer required by then applicable law.  10.6 Survival. The provisions of this Section 10 shall survive expiration or termination of this Lease.    11. ASSIGNMENT AND SUBLETTING  11.1 Assignment or Sublease. Except as permitted by Section 1A (“Related Party Transfers”) Tenant shall not assign this Lease or  sublet the whole or any part of the Premises (each, a “Transfer” and any assignee or sublessee, a “Transferee”) without Landlord’s prior  written consent which shall not be unreasonably withheld so long as the Transferee meets the transfer standards set forth in Section 11.6.  To assist Landlord in determining whether to consent to a Transfer, Tenant shall submit the following to Landlord as well as any other  information reasonably requested by Landlord, (i) the name, legal entity and jurisdiction of the Transferee; (ii) a description of the  proposed use of the Premises; (iii) the terms of the proposed Transfer; (iv) if such Transferee is not a public entity, its three (3) most recent  years plus current financial statements and its most recent filed federal income tax return; and (v) the proposed Transfer documents. The  parties agree that the financial statements for periods earlier than the prior fiscal year financial statements and tax returns are not a  mandatory requirement but are only factors that the Landlord may reasonably consider when deciding whether to consent to a proposed  sublease or assignment. No Transfer shall affect the liability of Tenant under this Lease and Tenant and any Transferee shall be liable to  Landlord for performance of Tenant’s obligations under this Lease. Consent to any Transfer shall not operate as a waiver of the necessity  of a consent to any subsequent Transfer.  11.2 Entity Ownership. Except as permitted by Section 1A, the cumulative transfer of an aggregate of 50% or more of the voting  interests in a Tenant entity, including by creation or issuance of new ownership interests (except as the result of transfers by gift or  inheritance and except for transfers of interests in publicly traded entities) shall be deemed a Transfer of this Lease.  11.3 Assignee Obligation. Any assignee will be required to assume all obligations of Tenant and shall be jointly and severally liable  with Tenant for the performance of all of Tenant’s obligations under this Lease. Any sublessee will be required to assume all obligations of  Tenant to the extent they                        17  





 






    18/42      relate to the subleased premises. Tenant shall provide Landlord duplicate originals of all instruments of assignment, sublease or  assumption. If the Transferee defaults, Landlord may, without affecting any other rights of Landlord, proceed against Tenant or any  Transferee or any other person liable for Tenant’s obligations hereunder. Tenant shall provide the notice address for any subtenant or  assignee to Landlord prior to the effective date of the Transfer and if it is not provided, the applicable notice address shall be deemed to be  the Premises.  11.4 Fees. Tenant shall reimburse Landlord for any out-of-pocket costs incurred by Landlord in connection with any request for  consent to a Transfer. In addition, any request for consent to a Transfer shall be accompanied by payment of a non-refundable fee of  $[ * ] to compensate Landlord for the administrative burden of processing the request.    11.5 Assignment/Subletting Income. Except in connection with transfers described in Section 1A, Tenant shall pay to Landlord  within [ * ] of receiving any amounts from an assignee to Tenant which exceed the Rent payable by Tenant hereunder, [ * ]% of such  excess, whether in the form of assignment fees or increased Base Rent or otherwise; provided that Tenant shall be permitted to deduct  amortization of Tenant’s out of pocket costs for the assignment (including attorneys’ fees and brokerage commissions and any portion of  tenant improvements for the assignee funded by Tenant) spread over the remaining Term. Tenant shall pay to Landlord within [ * ] of  receiving any amounts from a sublessee which exceed, on a per square foot basis, the Rent due from Tenant hereunder, [ * ]% of such  excess; provided that Tenant shall be permitted to deduct amortization of Tenant’s out of pocket costs for the sublease (including attorneys’  fees and brokerage commissions and any portion of tenant improvements for the sublessee funded by Tenant), amortized over the sublease  term.  11.6 Transfer Standards. All of the following requirements must be met before Landlord will be required to not unreasonably  withhold its consent to a Transfer:  (a) Transferee’s uses (i) are consistent with the Permitted Use in Section 1 and compatible with the other uses in the Building  and with operation of a first class office building and do not create any increased risk of Hazardous Material contamination or  increased cost to Landlord of monitoring or handling same; (ii) do not increase the risk of damage or wear and tear on the Building;  (iii) do not require increased utility service or increased services from Landlord or changes in the Premises; and (iv) do not increase  the insurance costs of Landlord; and  (b) Either (i) Tenant’s net worth is at least $[ * ], or (ii) Transferee’s financial status and creditworthiness is comparable to  other tenants of similar amounts of space in the Building or similar buildings.  11.7 Landlord’s Recapture Right. Except in connection with transfers permitted by Section 1A, in lieu of granting consent to any  proposed Transfer, Landlord reserves the right to terminate this Lease or, in the case of subletting of less than all the Premises, to terminate  this Lease with respect to such portion of the Premises, as of the proposed effective date of the Transfer, in which event Landlord may  enter into the relationship of landlord and tenant with such proposed Transferee or to any other third party. Such termination shall not  relieve Tenant from any obligations under this Lease with regard to the time period prior to the termination. Notwithstanding the  foregoing, Landlord shall not have a recapture right in the case of a sublease if the term of the sublease and any extensions end more than  [ * ] prior to the end of the sublease term.    12. DAMAGE OR DESTRUCTION  12.1 Notice of Damage. Tenant shall notify Landlord in writing immediately upon the occurrence of any damage to the Premises of  which it becomes aware. Subject to Sections 12.2 and 12.3, if the Premises or Building is damaged by fire or other casualty, then unless  this Lease is terminated as                      18  





 






    19/42      hereinafter provided, this Lease shall remain in effect and Landlord shall diligently proceed to repair the damage to the Building to the  condition in which existed immediately prior to such damage, to the extent that insurance plus deductibles (or if Landlord fails to maintain  the insurance required by this Lease then to the extent that insurance plus deductibles would have been available had Landlord carried the  required insurance), and subject to delays which may arise by reason of adjustment of loss under insurance policies and delays beyond the  reasonable control of Landlord. Tenant shall repair all damage to Tenant’s property, including Tenant’s fixtures and equipment.  12.2 Decision. If (i) the insurance proceeds received by Landlord are not sufficient to pay the entire cost of repair, or if the cause of  the damage is not covered by the insurance required to be carried by Landlord; or (ii) if Landlord considers the damage to be significant,  then Landlord may elect either to (1) diligently repair the damage to the Building, in which case this Lease shall remain in full force and  effect, or (2) terminate this Lease. Landlord shall notify Tenant of Landlord’s decision within [ * ] after notice of the occurrence of the  damage. If Landlord elects to repair the damage, Tenant shall pay Tenant’s Share of the deductible under Landlord’s insurance policy and,  if the damage was due to an act or omission of Tenant or Tenant’s employees, agents, contractors or invitees, Tenant shall also pay the  difference between the actual cost of repair and any insurance proceeds. If the Lease does not terminate as a result of the damage but the  damage materially interferes with Tenant’s use of the Premises, then the Base Rent shall be reduced pro rata, to reflect the portion of the  Premises not useable by Tenant.  12.3 End of Term. If the damage to the Premises occurs during the [ * ] of the Term, and if the damage requires more than [ * ] to  repair, either Landlord or Tenant may elect to terminate this Lease as of the date the damage occurred regardless of the sufficiency of any  insurance proceeds. The party electing to terminate this Lease shall give written notification to the other party of such election within [  * ] after the parties have mutually agreed upon the time period required for such repairs.    13. CONDEMNATION  If the Project is condemned or taken for any public or quasi-public purpose, including any purchase in lieu of condemnation, this  Lease shall terminate as of the date of taking of possession for such use or purpose. If a portion of the Project is condemned or taken,  (whether or not the Premises be affected), Landlord may, by notice to Tenant, terminate this Lease as of the date of the taking of  possession. If Landlord does not terminate this Lease, and if the taking results in a reduction in the square footage of the Premises, then the  Base Rent shall be reduced pro-rata, and Landlord shall perform any necessary repairs to restore the Building to a complete unit. If the  condemnation causes the Premises to be unusable for Tenant’s Permitted Use, in Tenant’s commercially reasonable opinion, Tenant may  terminate this Lease by giving notice within ten days after notice from Landlord or the intended extent of the taking, such termination to  be effective as of the date of the taking. Landlord shall be entitled to the entire award in any condemnation proceeding, including any  award for the value of any unexpired term of this Lease, and shall have the exclusive authority to settle the condemnation proceeding, and  the exclusive discretion to grant “possession and use” to the condemning authority, and Tenant shall have no claim against Landlord or  against the proceeds of the condemnation.    14. INSOLVENCY AND DEFAULT  14.1 Defaults. Tenant shall be in default under this Lease if (a) Tenant fails to pay any Rent when due, or (b) Tenant fails to perform  any other obligation under this Lease, or (c) a Financial Distress Default (Section 14.9) occurs. Subject to the late charges and interest due  under Section 14.8, Landlord agrees that it shall not invoke its remedies under this Section 14 if Tenant cures a Curable Default (defined  below) within the applicable cure period (set forth in Section 14.2 below). If a Curable Default occurs and Tenant fails to cure the default  within the applicable cure period or if any other default occurs, Landlord may, immediately or at any time thereafter, and without  preventing Landlord from exercising any other right or remedy, elect to terminate this Lease by notice, by lawful entry or otherwise,                        19  





 






    20/42      whereupon Landlord shall be entitled to recover possession of the Premises from Tenant and those claiming through or under Tenant.  Termination of this Lease and any repossession shall be without prejudice to any remedies Landlord has for arrears of Rent or for a prior  breach of any of the provisions of this Lease. For clarification, the parties agree that any true-up of Operating Expenses that occurs within  the time periods set forth in Section 5.1 although applicable to prior rent periods, shall not be considered a failure to pay Rent pursuant to  this Section 14.1 so long as any true-up payments are made when due.  In case of termination, Tenant shall be liable to Landlord for all costs and expenses including the amounts due under Sections 14.3  and 14.4. Each right and remedy provided Landlord in this Lease is cumulative and in addition to every other right or remedy provided in  this Lease, or now or hereafter existing at law, in equity, by statute or otherwise. The exercise by Landlord or any one or more such rights  or remedies will not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies.  14.2 Cure Periods.    Monetary Default. Tenant fails to pay any Rent when due, it is a Cureable Default and the cure period shall be [ * ] after  notice from Landlord.  Financial Distress Default (See Section 14.9). An Involuntary Financial Distress Default is a Curable Default and the cure  periods are set forth in Section 14.9. A Voluntary Financial Distress Default is not a Curable Default.  Insurance Default. If Tenant fails to maintain the required insurance, it is a Curable Default and the cure period is [ * ] after  the date the failure occurs.  Estoppel or Subordination Default. If Tenant fails to provide the requested estoppel certificate (Section 15.3) or  subordination agreement (Section 15.1) within the time period provided, it shall be a Curable Default and the cure period shall be [ * ]  from the second request.  Hazardous Materials. If Tenant breaches the provisions of Section 17 (Hazardous Materials) it shall be a Curable Default and  the cure period shall be 5 business days after notice from Landlord.  Other Defaults. Any non-monetary breaches of this Lease not listed above in this Section 14.2 shall be considered Curable Defaults  and the cure period shall be [ * ] after notice from Landlord; provided that if the default can not reasonably be cured within that time  period, Tenant shall have such additional time as is reasonably necessary to cure the default so long as Tenant commences the cure within  the [ * ] period and diligently pursues the cure to completion.  14.3 Expense Recovery. Items of expense for which Tenant shall be liable to Landlord for in connection with a termination of this  Lease for default shall include: (i) all collection costs and all costs of obtaining Tenant’s compliance with this Lease, including attorneys’  fees and enforcement costs; (ii) the unamortized portion of (a) leasing commissions paid in connection with this Lease, and (b) costs  incurred by Landlord to improve the Premises (amortized on a straight line basis over the initial Term with interest at the Prime Rate plus  [ * ]% per annum); and (iii) all Landlord’s other costs proximately caused by the termination. The above sums shall be due and payable  immediately upon notice from Landlord without regard to whether the cost or expense was incurred before or after the termination of this  Lease. If proceedings are brought under the Bankruptcy Code, including proceedings brought by Landlord, which relate in any way to this  Lease (in any of such cases a “Proceeding”), Landlord shall be reimbursed for all costs incurred in connection with the Proceedings.                          20  





 






    21/42      14.4 Damages. Notwithstanding termination of this Lease and reentry by Landlord pursuant to Section 14.1, Landlord shall be  entitled to recover from Tenant:  (a) Any unpaid Rent which had been earned by Landlord prior to the time of termination with interest at the Default Rate  (Section 14.8); plus  (b) The amount by which the unpaid Rent which would have been earned after termination until the time of an award exceeds  the amount of loss of Rent that Tenant proves could have been reasonably avoided, with interest at the Default Rate; plus  (c) The worth at the time of an award of the amount by which the unpaid Rent for the balance of the term of this Lease (as  extended, if at all, prior to termination) exceeds the amount of such loss of Rent and Additional Rent that Tenant proves could have been  reasonably avoided (including interest at the Default Rate from the date of the award until paid), discounted at the discount rate of the  Federal Reserve Bank of San Francisco, or successor Federal Reserve Bank, for a period consistent with the then remaining lease term, on  the date of termination; plus  (d) Any other amount necessary to compensate Landlord for all the damage proximately caused by Tenant’s failure to perform  Tenant’s obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including amounts due  and payable pursuant to Section 14.3.  14.5 Non-Termination of Lease. No act of Landlord other than a written declaration of termination of Lease shall serve to terminate  this Lease. If there is a default hereunder and Tenant fails to cure it within any applicable cure period, Landlord shall have the right to  reenter the Premises and relet the Premises for Tenant’s account, without terminating the Lease. If Landlord reenters the Premises and does  not elect to terminate this Lease, Tenant shall pay Landlord the loss of Rent by a payment at the end of each month during the remaining  Term representing the difference between the Rent which would have been paid in accordance with this Lease and the rent collected from  the Premises by Landlord for such month. Separate actions may be maintained by Landlord against Tenant from time to time to recover  any damages which, at the commencement of any action, are then due and payable to Landlord under this Section 14 without waiting until  the end of the Term of this Lease.  14.6 Reletting. If Tenant’s right of possession has been terminated (with or without termination of this Lease), Landlord may at any  time, and from time to time, relet the Premises in whole or in part either in its own name or as agent of Tenant for any period equal to or  greater or less than the remainder of the then-current Term. All rentals received by Landlord from such reletting shall be applied first to the  payment of any amounts other than Rent due hereunder from Tenant to Landlord; second, to the payment of any costs and expenses of  such reletting and of alterations and repairs; third, to the payment of Rent due and unpaid hereunder; and the residue, if any, shall be held  by Landlord and applied in payment of future Rent as it becomes due hereunder. Upon a reletting of the Premises, Landlord shall not be  required to pay Tenant any sums received by Landlord in excess of amounts payable in accordance with this Lease.  14.7 Right of Landlord to Cure Defaults. If Tenant defaults under this Lease, Landlord may cure the default, at Tenant’s expense,  (i) immediately and without notice if Landlord believes the default creates a risk of damage to persons, property or the interests of others,  or (ii) in any other case only upon Tenant’s failure to remedy such default within the applicable cure period, if any. Tenant shall reimburse  Landlord for any costs of the cure with interest at the Default Rate.  14.8 Unpaid Sums and Service Charge. Any amounts owing from Tenant to Landlord under this Lease shall bear interest at [ * ]%  per annum (the “Default Rate”), calculated from the date due or expended until the date of payment. In addition, if any payment of Rent is  not paid within [ * ] of its due date, Tenant shall pay a late charge equal to the greater of $[ * ] or [ * ]% of the overdue amount as  liquidated damages for Landlord’s extra expense and handling of such past due account.                      21  





 






    22/42      14.9 Financial Distress.    14.9.1 Definition. Each of the following shall be an “Financial Distress Default” under this Lease: (a) the making by Tenant of  any general assignment or general arrangement for the benefit of creditors; the filing by or against Tenant of a petition to have Tenant  adjudged a bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy or (b) the appointment of a  trustee or a receiver to take possession of all or any part of Tenant’s assets. A Financial Distress Default shall be considered “Voluntary” if  the action initiating the default was made by Tenant or a person or entity controlling, controlled by, or under common control with Tenant  and otherwise shall be considered “Involuntary”. For example, a bankruptcy filing initiated by Tenant is a Voluntary Financial Distress  Default and a bankruptcy filing by creditors of Tenant shall be considered an Involuntary Financial Distress Default. Tenant shall  immediately notify Landlord upon the occurrence of any Financial Distress Default. Tenant shall have [ * ] to cure an Involuntary  Financial Distress Default under clause (a) above. Tenant shall have [ * ] to cure an Involuntary Financial Distress default under clauses  (b) and (c) above. If a Voluntary Financial Distress Default occurs or if an Involuntary Financial Distress Default is not cured within the  above cure periods, then the provisions of Section 14.9.2 shall apply.  14.9.2 Filing of Petition. If a petition (“Petition”) is filed by or against Tenant (as either debtor or debtor-in-possession) under  Title 11 of the United States Code (the “Bankruptcy Code”) and same is not dismissed within [ * ] thereafter:  (a) Adequate protection for Tenant’s Lease obligations accruing after filing of the Petition shall be provided within [ * ]  after filing in the form of a deposit equal to two months Base Rent and Additional Rent (in addition to the Security Deposit), to be held by  the court or an escrow agent approved by Landlord and the court.  (b) All amounts payable by Tenant to Landlord under this Lease represent reasonable compensation for the occupancy of  the Premises by Tenant.  (c) Tenant or Trustee shall give Landlord at least [ * ] written notice of any abandonment of the Premises or proceeding  relating to administrative claims. If Tenant abandons without notice, Tenant or Trustee shall stipulate to entry of an order for relief from  stay to permit Landlord to reenter and relet the Premises.  (d) For purposes of Section 365(b)(1) of the Bankruptcy Code, prompt cure of defaults shall mean cure within 30 days  after assumption and shall include cure of any defaults under any other agreements between Landlord and Tenant.  (e) For the purposes of Section 365(b)(1) the Bankruptcy Code, adequate assurance of future performance of this Lease  by Tenant, Trustee or any proposed assignee of the Lease will require that Tenant, Trustee or the proposed assignee deposit two months  Base Rent and Additional Rent payments into an escrow fund (to be held by the court or an escrow agent approved by Landlord and the  court) as security for such future performance. In addition, if the Lease is to be assigned, adequate assurance of future performance by the  proposed assignee shall require that the assignee have a tangible net worth equal to eight times the annual Rent due hereunder or that such  assignee’s performance be unconditionally guaranteed by a person or entity that has a tangible net worth not less than the above amount.  (f) If Tenant or Trustee intends to assume and/or assign the Lease, Tenant or Trustee shall provide Landlord with [ * ]  written notice of the proposed action, separate from and in                            22  





 






    23/42      addition to any notice provided to all creditors. Notice of a proposed assignment and assumption shall state the assurance of prompt cure,  compensation for loss and assurance of future performance to be provided to Landlord. Notice of a proposed sale shall state: (i) the name,  address, and federal tax ID numbers of the proposed assignee; (ii) the terms and conditions of the proposed assignment, and (iii) the  proposed assurance of future performance.  14.10 Default by Landlord. Subject to Section 15.4, Landlord shall not be in default under this Lease unless Landlord (or such  ground lessor, mortgagee or beneficiary) fails to cure such non-performance within [ * ] after receipt of Tenant’s written notice (or such  longer period of time as is reasonably necessary to cure the default so long as Landlord is diligently prosecuting such cure) and such notice  shall also be sent in accordance with Section 15.4. If Landlord fails to cure the default within the cure period, Tenant shall have all rights  and remedies available at law and in equity other than the right to terminate the Lease or any offsets against Rent.    15. PROTECTION OF LENDERS  15.1 Subordination. Provided that Tenant is provided with a non-disturbance agreement consistent with the third sentence below,  this Lease shall be subordinate to any financing now existing or hereafter placed upon the Project by Landlord, and to any and all advances  to be made thereunder and to interest thereon and all modifications thereof (each, a “Mortgage”). This provision shall be self-operative.  Tenant shall execute and deliver any subordination agreement required by the holder of a Mortgage, but only if any such subordination  agreement provides that so long as Tenant is not in default under this Lease beyond any applicable cure period, Tenant shall have the  continued enjoyment of the Premises free from any disturbance or interruption by any holder of a Mortgage or any purchaser at a  foreclosure or private sale of the Project.  15.2 Attornment. If Landlord’s interest in the Premises is acquired by any ground lessor, holder of a Mortgage, or purchaser at a  foreclosure sale, or transferee thereof, Tenant shall attorn to the transferee of or successor to Landlord’s interest in the Premises and  recognize such transferee or successor as Landlord under this Lease. Tenant waives the protection of any statute or rule of law which gives  or purports to give Tenant any right to terminate this Lease or surrender possession of the Premises upon the transfer of Landlord’s  interest.  15.3 Estoppel Certificates. Tenant shall, within [ * ] of demand, execute and deliver to Landlord a written statement certifying:  (i) the commencement and the expiration date of the Term; (ii) the amount of Base Rent and the date to which it has been paid; (iii) that  this Lease is in full force and effect and has not been assigned or amended in any way (or specifying the date and terms of each agreement  so affecting this Lease) and that no part of the Premises has been sublet (or to the extent such is not the case, a copy of any sublease);  (iv) that Landlord is not in default under this Lease (or if such is not the case, the extent and nature of such default); (v) on the date of such  certification, there are no existing defenses or claims which Tenant has against Landlord (or if such is not the case, the extent and nature of  such defenses or claims); (vi) the amount of the Security Deposit held by Landlord; and (vii) any other information a mortgagee or  purchaser may reasonably request. It is intended that any such statement shall be binding upon Tenant and may be relied upon by a  prospective purchaser or mortgagee. If Tenant fails to provide the requested estoppel within [ * ] after receipt of a second request, in  addition the provisions of Section 14: (a) Tenant shall be deemed to have given a certificate as above provided, without modification, and  shall be conclusively deemed to have admitted the accuracy of any information supplied by Landlord to a prospective purchaser or  mortgagee, and (b) Landlord may impose a fee of $[ * ] per day for each day of delay in providing the statement by Tenant after the 5 day  period. The estoppel certificate shall run to the benefit of all those Landlord specifies as addressees.  15.4 Notice. Tenant shall give written notice of any failure of Landlord to perform any of its obligations under this Lease to Landlord  and to any ground lessor, mortgagee or beneficiary under any                        23  





 






    24/42      deed of trust encumbering the Project whose name and address has been furnished to Tenant and such parties shall have the right but no  obligation to cure the default on Landlord’s behalf. Landlord shall not be in default under this Lease unless Landlord (or such ground  lessor, mortgagee or beneficiary) fails to cure such non-performance within [ * ] after receipt of Tenant’s notice, or such longer period as  is reasonably necessary for the cure.    16. LIABILITY  16.1 Landlord’s Liability. The liability of Landlord to Tenant shall be limited to the interest of Landlord in the Project (and the  proceeds thereof). Tenant agrees to look solely to Landlord’s interest in the Project (and the proceeds thereof) for the recovery of any  judgment against Landlord, and Landlord and its owners shall not be personally liable for any such judgment or deficiency after execution  thereon or matters related to this Lease. In addition, if Landlord sells or otherwise transfers the Project to a new owner, provided the  assignee assumes the Landlord’s obligations under this Lease arising after the date of the transfer, the transferring Landlord shall not  thereafter be named or sought after in any matter related to the Project relating to the time period after the transfer and responsibility for  those matters shall automatically transfer to the new owner.  16.2 Tenant’s Business Interruption. Notwithstanding any other provision of this Lease, and to the fullest extent permitted by law,  Tenant hereby agrees that Landlord shall not be liable for injury to Tenant’s personal property or its business or any loss of income  therefrom, whether such injury or loss results from conditions arising upon the Premises or the Project, or from other sources or places  including any interruption of services and utilities or any casualty, condemnation, whether the cause of such injury or loss or the means of  repairing the same is inaccessible to Landlord or Tenant and including injury of loss to Tenant or Tenant’s property arising from the acts or  omissions of other occupants of the Project.  16.3 WCM. If this Lease is signed by Washington Capital Management, Inc. (“WCM”), WCM signs the Lease in a representative  capacity as manager of the limited liability company which is Landlord. Tenant acknowledges that WCM has no liability whatsoever under  this Lease and Tenant shall have no claims against WCM, its agents or employees in connection with this Lease or the Project. WCM  represents and warrants that it is authorized to execute this Lease on behalf of the Landlord.    17. HAZARDOUS MATERIALS  17.1 Compliance. Tenant and Tenant’s officers, contractors, subcontractors, licensees, agents, servants, employees, guests, invitees  or visitors, or any assignee or sublessee or other person for whom Tenant would otherwise be liable (individually, a “Tenant Party” and  collectively, “Tenant Parties”) shall comply with all Environmental Laws (as defined below) in connection with Tenant’s or Tenant Parties  use, production, storage or disposal of any Hazardous Materials (as defined below) on, under or about the Premises. Tenant hereby  represents, warrants, covenants and agrees that all operations or activities upon, or any use or occupancy of the Premises, or any portion  thereof, by Tenant or any Tenant Party of the Premises or any portion thereof, shall be in all material respects in compliance with all state,  federal and local laws and regulations governing or in any way relating to the generation, handling, manufacturing, treatment, storage, use,  transportation, spillage, leakage, dumping, discharge or disposal (whether legal or illegal, accidental or intentional) of any Hazardous  Materials. Neither Tenant, nor any Tenant Party shall use or dispose of any Hazardous Materials in or on the Premises, the Building, the  Project, or any adjacent property, or in any improvements thereto, except for such Hazardous Materials as are essential to the operation of  Tenant’s and Tenant Parties’ business and reported to Landlord upon request, and then only in accordance with all applicable laws and  regulation. Tenant shall, and shall ensure that all Tenant Parties shall, at all times comply with Environmental Laws and best industry  standard research, medical and safety practices in connection with the use, handling, production storage or disposal of any Hazardous  Material, including, but not limited, to any Medical Products (as defined below), at Tenant’s sole expense.                        24  





 






    25/42      17.2 Definition of Hazardous Materials. As used herein, the term “Hazardous Materials” means any chemical, compound,  substance, material, controlled substance, object, condition, waste, living organism or part thereof (including genetic materials), virus or  combination or modification thereof which is or may be hazardous to human health or safety or to the environment (whether potentially  injurious to persons and property and whether potentially injurious by themselves or in combination with other materials) due to its  radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other  harmful or potentially harmful properties or effects, including, without limitation, petroleum and petroleum products, asbestos, radon,  polychlorinated biphenyls (PCBs) and all of those chemicals, substances, materials, controlled substances, objects, conditions, wastes,  living organisms or combinations thereof which are now or become in the future listed in the United States Department of Transportation  Hazardous Materials Table [ * ], as amended from time to time, or listed, defined or regulated in any manner by any Environmental Law.  17.3 Definition of Environmental Laws. As used herein, the term “Environmental Laws” means any and all federal, state or local  environmental, health and/or safety-related laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees,  directives, guidelines, permits or permit conditions, currently existing and as amended, enacted, issued or adopted in the future relating to  the environment or to any Hazardous Material (including, without limitation, the Comprehensive Environmental Response, Compensation  and Liability Act of 1980 (42 U.S.C. § 9601, et seq.), the Washington Model Toxics Control Act (Ch.70.l0SD RCW) and the Washington  Hazardous Waste Management Act (Ch.70.105 RCW) which are or become applicable to Tenant or the Premises.  17.4. Definition of Medical Products. As used herein, the term “Medical Products” means all regulated substances, chemicals,  compounds, drugs, blood, tissue, organs, serums, organisms or part thereof (including genetic materials), viruses, waste and other  materials related thereto and used in connection with medical treatment, laboratory analysis, production or analysis of drugs, or other  biomedical research.  17.5 Definition of Environmental Condition. As used herein, the term “Environmental Condition” means any release or spill of  any Hazardous Materials into the environment, including surface water, groundwater, drinking water supply, sewer or storm water drain,  land, soil, surface or subsurface strata or the ambient air, where such release or spill is potentially in. violation of Environmental Laws or is  required to be reported to the Washington State Department of Ecology or other appropriate governmental authority.  17.6 Tenant Improvements. Tenant and Tenant Parties shall design and construct their tenant improvements, including any  upgraded HVAC and plumbing systems, using best available commonly used industry technique designed to ensure that Tenant’s and  Tenant Parties’ Hazardous Materials do not compromise the air quality outside the Premises or allow the possibility of water system back-  up into the Building or otherwise migrate to any adjacent space. In particular, Tenant shall use, and shall require Tenant Parties’ best  available commonly used industry techniques to prevent air mixing from areas of potential contamination into other areas of the Building.  Tenant shall indemnify and hold Landlord harmless from and against any and all losses, expenses, liabilities, penalties or costs arising  directly or indirectly from Tenant’s or Tenant Parties’ failure to isolate building systems or to cause an Environmental Condition in areas  of the Project outside the Premises as a result of its design or construction of the tenant improvements.  17.7 Hazardous Materials Inventory Statement. Tenant shall deliver (or cause Tenant Parties to deliver) to Landlord (a) within  [ * ] after Lease execution and prior to Tenant’s first draw request for the TI Allowance, and (b) on request not more often than once each  year during the Term, a list specifying the type and quantity of all Hazardous Materials used or stored by Tenant or Tenant Parties on the  Premises (and attached hereto as Exhibit H, as amended from time to time) together with copies of all permits, licenses and approvals  required in connection with the use or storage of such materials,                          25  





 






    26/42      together with, on request, Tenant’s and Tenant Parties’ Material Data Safety Sheets (MSDS) and any other documentation with respect to  Tenant’s and Tenant Parties’ usage, storage, and disposal of Hazardous Materials that are required by the City of Bothell Fire Department.  Notwithstanding the foregoing, Tenant shall respond, and shall cause Tenant Parties to respond to any written request by Landlord for  confirmation whether there has been a significant increase, as evaluated in Tenant’s reasonable judgment, in the quantity of Hazardous  Materials or change in the type of Hazardous Materials utilized by Tenant or Tenant Parties, provided that such request shall not be made  more than once per calendar year. To the extent reasonably requested by Landlord, Tenant will provide additional documents or  information with respect to its and Tenant Parties’ Hazardous Materials within a reasonable period of time after receipt of a specific  written request. Tenant shall promptly notify Landlord in writing of (i) any notices of violation or potential or alleged violation of any  Environmental Law which are received by Tenant from any governmental agency or any Tenant Party; (ii) any and all inquiry,  investigation, enforcement, clean-up, removal or other governmental or regulatory actions instituted or threatened relating to the Premises;  and (iii) all claims made or threatened by any third-party against Tenant or a Tenant Party or the Premises relating to any Hazardous  Materials used by Tenant or a Tenant Party at the Premises. If any Environmental Condition occurs that is or may be a result of Tenant’s or  any Tenant Party’s actions during the Term, or if Tenant or any Tenant Party has disposed of or caused a release of Hazardous Materials at,  on or about the Project other than in accordance with Environmental Laws, Tenant shall promptly prepare or cause the Tenant Party to  prepare a remediation plan for Landlord’s review and approval, which shall not be unreasonably withheld, provided however, that  Landlord shall not require any remediation in excess of or to higher standards than would be mandated by applicable Environmental Laws.  Tenant’s obligation to remediate any Environmental Condition’ shall not be contingent on an enforcement action by any governmental  authority and shall be independent of any governmentally mandated remediation. If Landlord approves the plan, then Tenant shall execute  or cause the Tenant Party to execute the remediation plan at Tenant’s sole cost and expense (subject to such reimbursement as Tenant may  obtain from a Tenant Party). If the remediation plan is not reasonably acceptable to Landlord or if Tenant fails to execute or cause  execution of the remediation plan within a reasonable period of time, then, at Landlord’s option, Tenant shall reimburse Landlord, upon  demand, for the cost to Landlord of performing rectifying work provided that such work is not in excess of or to higher standards than  would be mandated by applicable Environmental Laws. The reimbursement shall be paid to Landlord in advance of Landlord’s performing  such work, based upon Landlord’s reasonable estimate of the cost thereof; and upon completion of such work by Landlord, Tenant shall  pay to Landlord any shortfall within thirty days after Landlord bills Tenant therefor or Landlord shall within thirty days refund to Tenant  any excess deposit as the case may be. To the extent reasonably requested by Landlord, Tenant shall furnish Landlord with detailed reports  concerning any Environmental Condition which occurs on the Premises during the Term.  17.8 Landlord. After notice to Tenant and a reasonable opportunity for Tenant to effect such compliance, Landlord may, but shall  not be obligated to, enter upon the Premises (including sub leased Premises) and take such actions and incur such costs and expenses to  effect such compliance as it deems advisable to protect its interest in the Premises. However, Landlord shall not be obligated to give  Tenant notice and an opportunity to effect compliance if (i) such delay might result in material adverse harm to Landlord, the Premises, the  Building or the Project; (ii) Tenant has already had actual knowledge of the situation and a reasonable opportunity to effect compliance, or  (iii) Landlord reasonably believes that an emergency exists. Landlord shall use good faith efforts to comply with Tenant’s reasonable  requirements with respect to security to the extent such requirements have been provided to Landlord in advance. Whether or not Tenant  has actual knowledge of the release of Hazardous Materials on the Premises, the Building, or the Project as the result of Tenant’s or Tenant  Parties’ use of the Premises, the Building or the Project, Tenant shall reimburse Landlord for all reasonable costs and expenses incurred by  Landlord relating to such Hazardous Materials or in connection with such compliance activities. Tenant shall notify Landlord immediately  of any release of any Hazardous Materials on the Premises in violation of any Environmental Law of which Tenant is aware.                          26  





 






    27/42      17.9 Indemnity. Tenant agrees to indemnify, defend and hold harmless Landlord against any and all losses, liabilities, suits,  obligations, fines, damages (including diminution in the value of the Premises or Building, loss or restrictions on use of space in the  Building or Project, and sums paid in settlement of claims), judgments, penalties, claims, charges, cleanup costs, remedial actions, costs  and expenses (including, without limitation, attorneys’ and other professional fees and disbursements) that may be imposed on, incurred or  paid by, or asserted against Landlord, the Premises, the Building, or the Project by reason of, or in connection with (i) any  misrepresentation, breach of warranty or other default by Tenant or any Tenant Party under this Section, or (ii) the acts or omissions of  Tenant or any Tenant Party resulting in the release of any Hazardous Materials. All of Tenant’s obligations and liabilities under this  Section shall survive expiration or other termination of this Lease and shall be separately enforceable by Landlord. This indemnification is  intended to constitute an indemnity agreement within the meaning of Section 9607(e)(i) of the Comprehensive Environmental Response,  Compensation and Liability Act of 1980 (42 U.S.C. § 9607(e)(i). Neither the written consent by Landlord to the presence of Hazardous  Materials on, under or about the Premises, nor the strict compliance by Tenant with all Environmental Laws, shall excuse Tenant from  Tenant’s obligation of indemnification pursuant thereto.  17.10 Decontamination. Upon expiration or early termination of this Lease, Tenant shall at its sole cost and expense undertake and  complete a thorough wash and decontamination of those portions of the Premises that have or may have been exposed to Hazardous  Materials, including but not limited to scrubbing of all surfaces, equipment, cabinets, fixtures and fume hood external surfaces in the  Premises, in order to remove all residues of Hazardous Materials (including chemicals and biological material). Upon completion of such  wash and decontamination, Tenant shall cause, at its sole cost and expense, a reputable environmental engineering company to perform an  environmental inspection of the Premises and prepare a written report for delivery to Landlord and Tenant no later than 30 days after Lease  expiration or early termination, certifying that the Premises are free from all Hazardous Materials for which Tenant is responsible under  the terms of this Lease.  17.11 Inspection. At its option, Landlord may once in each year, and more frequently if Landlord has reasonable cause to believe  that a violation of Environmental Law or this Section 17 is occurring, monitor Tenant’s and Tenant Parties’ compliance with the  requirements set forth in this Section, including without limitation obtaining an environmental assessment of the Premises from a qualified  environmental engineering company of Landlord’s selection which has demonstrated industry related experience, the cost of which shall  be paid by Landlord unless such assessment shows a material failure by Tenant or Tenant Parties to comply with the requirements of this  Section, in which case the cost shall be paid by Tenant. Any such environmental assessment shall be performed at a reasonable time  mutually acceptable to Landlord and Tenant (and coordinated with Tenant Parties). Landlord shall provide a copy of any written  assessment to Tenant and, Tenant shall comply (and cause Tenant Parties to comply), at Tenant’s cost and expense (provided that Tenant  may seek to have Tenant Parties bear costs so long as the work is done), with any industry-standard recommendations contained in any  such environmental assessment that Landlord may reasonably require including without limitation, any recommended precautions which  should be taken with respect to Tenant’s or Tenant Parties’ activities on the Premises.  17.12 Landlord’s Notices. Promptly after learning thereof, Landlord shall notify Tenant of any Environmental Condition on the  Project or any release of Hazardous Materials within the Project caused by Landlord or any occupant of the Building or Project other than  the Tenant. Landlord agrees to indemnify, defend and hold harmless Tenant against any and all losses, liabilities, suits, obligations, fines,  damages, judgments, penalties, claims, charges, cleanup costs, remedial actions, costs and expenses (including, without limitation,  attorneys’ and other professional fees and disbursements, but excluding consequential damages such as lost profits) that may be imposed  on, incurred or paid by, or asserted against Tenant by reason of, or in connection with any Hazardous Materials in, on or around the Project  at the time Tenant takes possession of the Premises, or brought onto the Project by any Landlord Party. All of Landlord’s obligations and  liabilities under this Section shall survive expiration or other termination of this Lease and shall be separately enforceable by Tenant.                        27  





 






    28/42      18. MISCELLANEOUS  PROVISIONS  18.1 Notices. All notices required or permitted under this Lease shall be in writing and shall be personally delivered, sent by a  nationally recognized overnight courier, sent by email or facsimile with confirmation of receipt, or sent by certified mail, return receipt  requested, postage prepaid. The contact information for each party is set forth in Section 1 and may be changed by written notice to the  other party. All notices shall be effective upon either delivery/receipt, rejection of delivery/receipt, or 3 days after mailing in the manner  described above. Tenant hereby appoints as its agent to receive the service of all dispossessory proceedings or proceedings to seize  Tenant’s personal property and notices thereunder the person in charge of or occupying the Premises at the time, and, if no person shall be  in charge of occupying the same, then such service may be made by attaching the same on the main entrance of the Premises. If Tenant  does not provide Landlord with a forwarding address following expiration or termination of this Lease, Landlord shall be relieved of any  obligation to forward any funds or items to Tenant.  18.2 Non-Waiver/Accord. Failure of Landlord to insist, in any one or more instances, upon strict performance of any term of this  Lease, or to exercise any election herein contained, shall not be construed as a waiver or a relinquishment, but the same shall continue and  remain in full force and effect. Landlord shall not be deemed to have waived any provision of this Lease unless expressed in writing and  signed by Landlord. Tenant specifically acknowledges that where Tenant has received a notice of default (whether Rent or non-rent), no  acceptance by Landlord of Rent shall be deemed a waiver of such notice, and, acceptance by Landlord of partial Rent shall be deemed to  waive or cure any Rent default. Landlord may, in its discretion, after receipt of partial payment of Rent, refund same and continue any  pending action to collect the full amount due, or may modify its demand to the unpaid portion. In either event, the default shall be deemed  uncured until the full amount is paid in good funds. Payment by Tenant or receipt by Landlord of a lesser amount than the Rent and other  charges stipulated herein shall be deemed to be on account of the earliest stipulated Rent or other charges. No endorsement or statement on  any check or any letter accompanying any payment shall be deemed an accord and satisfaction, and Landlord’s acceptance of such check  or payment shall be without prejudice to Landlord’s right to recover the balance of the amount due or pursue any other remedy to which it  is entitled.  18.3 Brokers. Except as specified in Section 1, if any, Tenant and Landlord represent and warrant to each other, it has not engaged  any broker, finder or other person entitled to any commission or fee in respect of the negotiation, execution or delivery of this Lease, and  Tenant and Landlord shall each indemnify and defend the other, against any claims for such commission arising out of agreements made or  alleged to have been made by or on behalf of that party. If any new leases, modifications to this Lease or other agreements are made  between Landlord and Tenant for space in the Project, Landlord shall not have any obligation to pay any brokerage or finders fees to  persons engaged by Tenant.  18.4 Entire Agreement; Amendment; Severability. This Lease supersedes all prior and contemporaneous understandings and  agreements; the provisions of this Lease are intended by Landlord and Tenant as the final expression of their agreement; this Lease  constitutes the complete and exclusive statement of its terms and no representations, promises or agreements, oral or otherwise, between  the parties not embodied herein shall be of any force or effect. No provisions of this Lease may be changed, waived, discharged or  terminated orally, but only by instrument in writing executed by Landlord and Tenant, or their respective successors in interest,  concurrently with or subsequent to the date of this Lease. Tenant acknowledges that neither Landlord nor anyone representing Landlord  has made statements of any kind whatsoever on which Tenant has relied in entering into this Lease. Tenant has relied solely on its  independent investigation and its own business judgment in entering into this Lease. Any provision of this Lease which shall prove to be  invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof and the remaining provisions hereof shall  nevertheless remain in full force and effect.                        28  





 






    29/42      18.5 Force Majeure. Except as specifically provided otherwise herein, time periods for Landlord’s or Tenant’s performance under  any provisions of this Lease (except for the payment of money) shall be extended for periods of time during which the non-performing  party’s performance is prevented due to circumstances beyond the party’s control, including strikes, embargoes, governmental regulations,  inclement weather and other acts of God, war or other strife and no such delay in Landlord’s performance shall constitute an actual or  constructive eviction or entitle Tenant to any abatement of Rent.  18.6 Intentionally Omitted    18.7 Heirs and Assigns. This Lease binds any party who legally acquires any rights or interest in this Lease from Landlord or  Tenant. However, Landlord shall have no obligations to Tenant’s successor unless the rights or interests of Tenant’s successor are acquired  in accordance with the terms of this Lease including the restriction on assignment and subletting. If more than one person or entity  executes this Lease as Tenant, the liability of each shall be deemed to be joint and several.  18.8 Waiver of Self-Help. Tenant waives any statutory or common law right to self-help, including any right to make repairs to the  Premises.  18.9 Personal Property Taxes. Tenant shall be liable for all taxes levied or assessed against personal property, furniture, or fixtures  placed by Tenant in the Premises or Project. If any taxes for which Tenant is liable are levied or assessed against Landlord or Landlord’s  property and Landlord elects to pay the same, or if the assessed value of Landlord’s property is increased by inclusion of such personal  property, furniture or fixtures and Landlord elects to pay the taxes based on such increase, then Tenant shall reimburse Landlord, within 30  days following request, the part of such taxes for which Tenant is primarily liable hereunder.  18.10 Intentionally Omitted.    18.11 Right to Change Public Spaces. Landlord reserves the right at any time, without thereby creating an actual or constructive  eviction or incurring any liability to Tenant, to (a) close temporarily any exterior areas to make repairs or changes or to prevent the  acquisition of public rights in such areas, and (b) change the arrangement or location of public areas of the Project not contained within the  Premises or any part thereof, including entrances, passageways, parking lots and other public service portions of the Project; provided that  Landlord uses commercially reasonable efforts to minimize interference with Tenant’s use of and access to the Premises and such changes  do not materially change the Lobby Area Upgrades or reduce Tenant’s share of parking stalls set forth in Section 2.3.  18.12 Consent. Notwithstanding anything contained in this Lease to the contrary, Tenant hereby waives any claim against Landlord  for money damages by reason of any refusal, withholding or delaying by Landlord of any consent, approval or statement of satisfaction,  and in such event, Tenant’s only remedies therefore shall be an action for specific performance, injunction or declaratory judgment, to  enforce any right to such consent. Tenant shall pay Landlord’s out-of-pocket costs incurred in connection with any requests by Tenant for  consent.  18.13 Financial Statements. The provisions of this Section 18.13 shall apply only during any period that Tenant is not a publicly  traded company. Upon request by Landlord, Tenant shall provide to Landlord copies of Tenant’s most recent financial statements and tax  returns (which financial statements may be supplied by reference to the electronic location from which they may be downloaded without  charge if so published). Any non-public information gained from such financial statements or inspections furnished to or conducted by or  on behalf of Landlord shall be confidential and shall not be disclosed                          29  





 






    30/42      other than to carry out the purposes hereof; provided, however, Landlord shall be permitted to divulge the contents of any such statements  in connection with financing arrangements or assignments of Landlord interest in the Premises or in conjunction with any administrative  or judicial proceeding in which Landlord is involved and where Landlord is required to divulge such information.  18.14 No Reservation/Counterparts. The submission of this Lease for examination, or for execution by Tenant, does not constitute  a reservation or option to Lease the Premises and this Lease becomes effective as a lease only upon execution and delivery thereof by  Landlord and Tenant. At Landlord’s election, this Lease may be executed in counterparts and when all counterparts are executed, the  counterparts shall constitute a single binding instrument.  18.15 Authority. Tenant represents and warrants that each individual executing this Lease on behalf of Tenant or its constituents is  duly authorized to execute and deliver this Lease on behalf of said entity. Concurrently with the execution of this Lease, Tenant shall  deliver to Landlord any entity resolutions or consents requested by Landlord to evidence such authority. Where Tenant is comprised of  more than one person or entity, all covenants and obligations of Tenant hereunder shall be the joint and several covenants and obligations  of each person or entity comprising Tenant. Any action permitted or required of Landlord under this Lease may, at Landlord’s election, be  performed by Landlord’s property manager on Landlord’s behalf.  18.16 Intentionally Omitted.    18.17 Utility Deregulation. Tenant acknowledges that Landlord shall have sole control over the determination of which utility  providers serve the Project, and Landlord shall have no obligation to give access or easement rights or otherwise allow onto the Project  any utility providers except those approved by Landlord, in its commercially reasonable discretion. If, for any reason, Landlord permits  Tenant to purchase utility services from a provider other than Landlord’s designated company(ies), such provider shall be considered a  contractor of Tenant. In addition, Tenant shall allow Landlord to purchase such utility service from Tenant’s provider at Tenant’s rate or at  such lower rate as can be negotiated by the aggregation of Landlord’s tenants’ requirements for such utility.  18.18 Clean Air Act. Tenant acknowledges that Landlord has not made any portion of the Premises or the Building accessible for  smoking. If Tenant wishes to make any portion of the Premises accessible to smoking, Tenant shall make all improvements necessary to  comply with all applicable governmental regulations. Tenant acknowledges that Tenant’s indemnity contained in this Lease includes  claims based on the presence of tobacco smoke as a result of the activities of Tenant, its employees, agents or guests.  18.19 Choice of Law and Venue. This Lease shall be governed by the law of the state where the Project is located and the parties  agree that venue shall lie in King County, Washington.  18.20 Nondisclosure of Lease Terms. Unless Landlord elects otherwise, the terms and conditions of this Lease constitute  proprietary information of Landlord that Tenant will keep confidential. Tenant’s disclosure of the terms of this Lease could adversely  affect Landlord’s ability to negotiate other leases and/or impair Landlord’s relationship with other tenants. Accordingly, Tenant will not  directly or indirectly disclose the terms or conditions of this Lease to any person or entity other than Tenant’s employees, agents, lenders,  attorneys or accountants who have a legitimate need to know such information and who also agree to keep the same confidential or  pursuant to requirements of a regulatory agency, such as the Securities and Exchange Commission, in which case Tenant shall use  reasonable efforts to redact confidential portions of the Lease prior to disclosing.  18.21 Regulations. Tenant shall comply with the terms and conditions of any of the following applicable to the Project and any  subsequent changes thereto: (a) CC&R’s, REA’s or other covenants                        30  





 






    31/42      recorded against the Project and any design guidelines referenced therein and any amendments thereto provided to Tenant, and (b) any  transportation management plan adopted for the Project and all amendments thereto.  18.22 Landlord’s Access. Landlord or its agents may enter the Premises to show the Premises to potential lenders, tenants or other  parties, to make repairs, alterations or improvements, to inspect and conduct tests in order to monitor Tenant’s compliance with this Lease  and applicable law; or for any other purpose Landlord deems necessary. Landlord shall give Tenant reasonable prior notice of such entry,  except in the case of emergency. Landlord may place customary “For Sale” or “For Lease” signs on the on the exterior of the Building and  in the outside areas of the Project.  18.23 Quiet Possession. If Tenant pays the Rent and complies with all other terms of this Lease, Tenant may occupy the Premises for  the full Term against any person claiming by, through or under Landlord, but not otherwise, subject to the provisions of this Lease.  18.24 Costs and Attorneys’ Fees. In the event of litigation between the parties hereto, declaratory or otherwise to enforce this  Lease, the non-prevailing party shall pay the costs thereof and attorneys’ fees actually incurred by the prevailing party, in such suit, at trial  and on appeal. In addition, if Landlord engages counsel to enforce the terms of this Lease, including for the purpose of preparing a  delinquency notice, Tenant shall be required to reimburse Landlord for all costs incurred before the subject default is considered cured.  Tenant shall pay Landlord’s attorneys’ fees and other out-of-pocket costs incurred in connection with any other requests for Landlord’s  consent.  18.25 Interpretation. The captions of sections or subsections of this Lease are to assist the parties in reading this Lease and are not a  part of the terms and provisions of this Lease. Whenever required by the context of this Lease, the singular shall include the plural and the  plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. In any provision relating to the  conduct, acts or omissions of Tenant, the term “Tenant” shall include Tenant’s agents, employees, contractors, invitees, successors or  others using the Premises with Tenant’s expressed or implied permission. References to “including” shall mean “including without  limitation”.  18.26 No Recordation. Tenant shall not record this Lease without prior written consent from Landlord. However, Landlord may  require that a “Short Form” memorandum of this Lease executed by both parties be recorded.  18.27 Waiver of Jury Trial. Landlord and Tenant hereby waive all rights to request a jury trial in any proceeding or counterclaim  arising out of this Lease or Tenant’s right to occupy the Premises. Tenant agrees that if Landlord commences any summary proceeding for  non-payment of Rent or possession of the Premises, Tenant waives all right to interpose any counterclaim in such proceeding. Tenant  further waives any right to remove said summary proceeding to any other court or consolidate said summary proceeding with any other  action, whether brought before or after the summary proceeding.  18.28 Survival. The obligations of each party applicable to time periods prior to the termination or expiration of this Lease shall  survive termination or expiration of this Lease, including Landlord’s right to indemnification and defense from claims arising from matters  occurring prior to termination even though the claim is asserted against Landlord after termination, and payment of amounts not finally  calculated by the expiration/termination date.  18.29 Holding Over. If Tenant fails to surrender possession of the Premises upon termination or expiration of this Lease, and if  Tenant obtains Landlord’s written consent to Tenant’s continued occupancy, then Tenant’s occupancy shall be deemed to be a month to  month tenancy, with Base Rent due at a rate one and one half times the Rent payable by Tenant hereunder during the calendar month  immediately preceding such termination or expiration (the “Latest Rate”) and Landlord may terminate                      31  





 






    32/42      such month to month tenancy upon 30 days notice to Tenant. If Tenant fails to surrender possession of the Premises upon termination or  expiration of this Lease and if Tenant does not obtain Landlord’s written consent to Tenant’s continued occupancy, then Tenant shall be  deemed a trespasser and shall be liable to Landlord for all damages sustained by Landlord as a result thereof, together with Base Rate at a  rate double the Latest Rate.  18.30 ERISA Contingency. If Exhibit E is attached to this Lease, then this Lease is contingent upon Tenant executing the ERISA  Certificate set forth in Exhibit E and taking any other actions requested by Landlord to verify that this Lease is not a prohibited transaction  under ERISA. Landlord will rely on the statements by Tenant contained in Exhibit E in agreeing to enter into this Lease. As a result, if  Landlord later learns that any of the statements by Tenant on Exhibit E were not correct when made or are no longer correct, then  (a) notwithstanding the provisions of Section 14.2, it shall be deemed an incurable default by Tenant under the Lease and Landlord may  immediately terminate this Lease by notice to Tenant and Landlord shall be entitled to collect the damages described in Section 14, and  (b) Tenant shall indemnify, defend and hold Landlord harmless from any and all damages, costs, or liabilities incurred by Landlord in  connection with the false statements.  18.31 Intentionally Omitted    18.32 USA Patriot Act and Anti-Terrorism Laws. Landlord and Tenant each represent and warrant that neither they nor the  officers and directors controlling Landlord and Tenant, nor any person or entity that directly owns a 25% or greater equity interest in it,  respectively, are or are acting, directly or indirectly, for or on behalf of any person, group, entity, or nation with whom U.S. persons or  entities are restricted from doing business under the regulations of the Office of Foreign Asset Control (“OFAC”) of the United States  Treasury Department, including those named on the OFAC’s Specially Designated National and Blocked Person List, or are or are acting  directly or indirectly for or on behalf of any person, group, entity, or nation designated in Presidential Executive Order 13224 signed on  September 24, 2001 (“Executive Order”) as a person who commits, threatens to commit, or supports terrorism; or are or are acting directly  or indirectly for a person, group, entity or nation in violation of the International Money Laundering Abatement and Financial Anti-  Terrorism Act of 2001 or the regulations or orders promulgated thereunder (the “Money Laundering Act”); and that they are not engaged  in this transaction directly or indirectly on behalf of, or facilitating this transaction directly or indirectly on behalf of, any such person,  group, entity or nation. Each party agrees during the Term of this Lease to comply with the Executive Order and the Money Laundering  Act, and to defend, indemnify, and hold harmless the other party from and against any and all claims, damages, losses, risks, liabilities and  expenses (including reasonable attorneys’ fees and costs) arising from or related to any breach of the foregoing representation and  warranty.    {Signatures on following page}                                  32  





 






    33/42      LANDLORD:    WCM HIGHLANDS II, LLC  a Washington limited liability company    By: Washington Capital Management, Inc.  its Manager    By: /s/ Patrick S. O’Malley    Patrick S. O’Malley, Senior Vice President  Date Signed: May 9, 2011  TENANT:    SEATTLE GENETICS, INC.  a Delaware corporation    By: /s/ Clay B. Siegall    Clay B. Siegall, President & CEO    Date Signed: May 9, 2011                                                                    Signature Page  





 






    34/42      L ANDLORD’S ACKNOWLEDGMENT  STATE OF WASHINGTON )  ) ss.  COUNTY OF KING )    I certify that I know or have satisfactory evidence that Cory A. Carlson is the person who appeared before me, and said person  acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as  President of Washington Capital Management, Inc., Manager of WCM HIGHLANDS II, LLC, to be the free and voluntary act of such  party for the uses and purposes mentioned in this instrument.  Dated: May 9, 2011 .    /s/ Jennifer Ourada  (Signature of Notary Public)    Jennifer Ourada    (Printed Name of Notary Public)    My Appointment expires 8-20-14  (Insert notary seal here)    T ENANT’S ACKNOWLEDGMENT    STATE OF WASHINGTON )  ) ss.  COUNTY OF KING )    I certify that I know or have satisfactory evidence that Clay B. Siegall is the person who appeared before me, and said person  acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it  as the President and CEO of SEATTLE GENETICS, INC. to be the free and voluntary act of such party for the uses and purposes  mentioned in this instrument.  Dated: May 9, 2011     /s/ Amy L. Olofson  (Signature of Notary Public)    Amy L. Olofson    (Printed Name of Notary Public)        (Insert notary seal here)  My Appointment expires 10-09-14                                    Signature Page  





 






    35/42      EXHIBIT A    L EGAL DESCRIPTION OF PROJECT    TRACT 41-B OF BINDING SITE PLAN RECORDED UNDER AUDITOR’S FILE NUMBER 9804295003, SAID TRACT BEING A  PORTION OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 29, TOWNSHIP 27 NORTH,  RANGE 5 EAST.  SITUATE IN THE COUNTY OF SNOHOMISH, STATE OF WASHINGTON.  A-1  





 






    36/42      EXHIBIT B    I NTENTIONALLY OMITTED  B-1  





 






    37/42      EXHIBIT C    W ORK LETTER    [ * ]      C-1  





 






    38/42      EXHIBIT D    R ULES AND REGULATIONS    [ * ]    D-1  





 






    39/42      EXHIBIT E    T ENANT’S ERISA CERTIFICATE    [ * ]  E-2  





 






    40/42      EXHIBIT F    L IST OF EQUIPMENT TENANT IS PERMITTED TO REMOVE  F-1  





 






    41/42      EXHIBIT G    P ROPOSED SPACE PLAN    [ * ]  G-1  





 






    42/42      EXHIBIT H    D ISCLOSURE OF HAZARDOUS MATERIALS    [ * ]      H-1