Document:

officelease.htm

Exhibit 10.14

LEASE AGREEMENT

BETWEEN

TALON PORTFOLIO SERVICES, LLC,

A WASHINGTON LIMITED LIABILITY COMPANY,

AS GENERAL RECEIVER FOR

W2007 SEATTLE OFFICE 110 ATRIUM PLACE REALTY, LLC,

A DELAWARE LIMITED LIABILITY COMPANY,

KING COUNTY CASE NO. 12-2-21253-8-SEA,

AS LANDLORD,

AND

AUGME TECHNOLOGIES, INC., A WASHINGTON CORPORATION,

AS TENANT,

DATED August 26, 2013

The submission of this Lease by Landlord, its broker, agent or representative, for examination or execution by Tenant, does not constitute an option or offer to lease the Premises upon the terms and conditions contained herein or a reservation of the Premises in favor of Tenant; it being intended hereby that notwithstanding the preparation of space plans and/or tenant improvements plans, etc., and/or the expenditure by Tenant of time and/or money while engaged in negotiations in anticipation of it becoming the Tenant under this Lease, or Tenant’s forbearing pursuit of other leasing opportunities, or even Tenant’s execution of this Lease and submission of same to Landlord, that this Lease shall become effective and binding upon Landlord only upon the execution hereof by Landlord and its delivery of a fully executed counterpart hereof to Tenant. No exception to the foregoing disclaimer is intended, nor shall any be implied, from expressions of Landlord’s willingness to negotiate in good faith with respect to any of the terms and conditions contained herein.

  

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BASIC LEASE INFORMATION

 

	
Lease Date:

	
August 26, 2013

 

	
Landlord:

	
TALON PORTFOLIO SERVICES, LLC, a Washington limited liability company, as General Receiver for W2007 Seattle Office 110 Atrium Place Realty, LLC, a Delaware limited liability company, King County Case No. 12-2-21253-8-SEA.  Landlord was appointed as the general receiver for the Project (as defined below) pursuant to that certain Order Appointing General Receiver issued by the Superior Court of Washington for King County on July 2, 2012 in connection with Case No. 12-2-21253-8-SEA in accordance with the provisions of Chapter 7.60 of the Revised Code of Washington.

 

	
Tenant:

	
AUGME TECHNOLOGIES, INC., a Washington corporation

 

	
Premises:

	
Suite No. 410 containing approximately 13,550 rentable square feet, on the fourth (4th) floor in the office building commonly known as 110 Atrium Place (the “Building”), and whose street address is 110 110th Avenue NE, Bellevue, Washington 98004, subject to expansion as set forth in, and in accordance with, Exhibit K attached hereto. The Premises are outlined on the floor plan(s) attached to the Lease as Exhibit A.

 

	
Land/Project:

	
The land on which the Building is located (the “Land”) is described on Exhibit B attached hereto.  The term “Project” shall collectively refer to the Building, the Land and the driveways, the Garage (as defined in Exhibit G attached hereto), and similar improvements and easements associated with the foregoing or the operation thereof.

 

	
Term:

	
Sixty-six (66) full calendar months, plus, if the Commencement Date (as defined below) occurs on other than the first day of a month, any partial month from the Commencement Date to the end of the month in which the Commencement Date falls, starting on the Commencement Date and ending at 5:00 p.m. local time on the last day of the sixty-sixth (66th) full calendar month following the Commencement Date (the “Expiration Date”), subject to adjustment and earlier termination as provided in the Lease, and extension of the Term as set forth in, and in accordance with, Exhibit J attached hereto.

 

	
Commencement Date:

 

	
The later to occur of:

 

(A)  January 1, 2014, or

(B)  the earliest of (i) the date upon which Tenant occupies any portion of the Premises and begins conducting business therein; (ii) the date upon which the Tenant Improvements (as defined in Exhibit D attached hereto) in the Premises are Substantially Completed (as defined in Exhibit D);  or (iii) the date upon which the Tenant Improvements in the Premises would have been Substantially Completed but for the occurrence of any Tenant Delay (as defined in Exhibit D).

  

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Basic Rent:

	
Basic Rent shall be the following amounts for the following periods of time:

	  	
Period During

the Term

	
Annual Basic Rent

	
Monthly Installment of Basic Rent

	  	
Commencement Date – 12th full calendar month of the Term

	
  $406,500.00 *

	
  $33,875.00 *

	  	
13th through the 24th full calendar months of the Term

	
$420,050.00

	
$35,004.17

	  	
25th through the 36th full calendar months of the Term

	
$433,600.00

	
$36,133.33

	  	
37th through the 48th full calendar months of the Term

	
$447,150.00

	
$37,262.50

	  	
49th through the 60th full calendar months of the Term

	
$460,700.00

	
$38,391.67

	  	
61st full calendar month of the Term through the Expiration Date

	
$474,250.00

	
$39,520.83

	  	
* Subject to abatement during the first seven (7) full calendar months of the Term on the terms, and subject to the conditions, set forth in Exhibit H attached hereto.

 

	
Letter of Credit:

	
One Hundred Thousand and No/100 Dollars ($100,000.00).

 

	
Rent:

	
Basic Rent, Additional Rent (as defined below), and all other sums that Tenant may owe to Landlord or otherwise be required to pay under the Lease.

 

	
Permitted Use:

	
General office use only.

 

	
Tenant’s Proportionate Share:

	
5.92%, which is the percentage obtained by dividing (a) the number of rentable square feet in the Premises as stated above by (b) 228,737, the number of rentable square feet in the Building.  Landlord and Tenant stipulate that the number of rentable square feet in the Premises and in the Building set forth above is conclusive and shall be binding upon them.

  

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Base Year:

	
The calendar year 2014.

 

	
Initial Liability Insurance Amount:

	
Three Million Dollars ($3,000,000.00)

 

	
Tenant’s Address:

	
Prior to the Commencement Date:

Augme Technologies, Inc.

350 7th Avenue, 2nd Floor

New York, New York 10001

Attention:  Mr. Tom Virgin

 

	  	
Following the Commencement Date:

Augme Technologies, Inc.

110 110th Avenue, NE, Suite 410

Bellevue, Washington 98004

Attention:  Mr. Tom Virgin

 

	
Landlord’s Address:

	
For all Notices:

Talon Portfolio Services, LLC

1800 Ninth Avenue, Suite 1600

Seattle, Washington  98101

Attention:  Lease Administration

 

	  	
With a copy to:

 

Pircher, Nichols & Meeks

1925 Century Park East, Suite 1700

Los Angeles, California  90067-2512

Attention:  Real Estate Notices (SCS/KMH)

 

	
Landlord’s Address:

	
For Payment of Rent:

 

W2007 Seattle Office 110 Atrium Place Realty, LLC

P.O. Box 730732

Dallas, Texas  75373-0732

 

  

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TABLE OF CONTENTS

	
1

	
Definitions and Basic Provisions

	
2

	
Lease Grant

	
3

	
Tender of Possession

	
4

	
Rent

	
(a)

	
Payment

	
(b)

	
Operating Costs; Taxes

	
5

	
Delinquent Payment; Handling Charges

	
6

	
Letter of Credit

	
(c)

	
Conditional Reduction of Letter of Credit Amount

	
(d)

	
Springing Additional Letter of Credit

	
7

	
Landlord’s Obligations

	
(a)

	
Services

	
(b)

	
Excess Utility Use

	
(c)

	
Landlord’s Repairs

	
(d)

	
Restoration of Services; Abatement

	
8

	
Improvements; Alterations; Repairs; Maintenance

	
(a)

	
Improvements; Alterations

	
(b)

	
Repairs; Maintenance

	
(c)

	
Performance of Work

	
(d)

	
Mechanic’s Liens

	
9

	
Use

	
10

	
Assignment and Subletting

	
(a)

	
Transfers

	
(b)

	
Consent Standards

	
(c)

	
Request for Consent

	
(d)

	
Conditions to Consent

	
(e)

	
Attornment by Subtenants

	
(f)

	
Cancellation

	
(g)

	
Additional Compensation

	
(h)

	
Permitted Transfers

	
11

	
Insurance; Waivers; Subrogation; Indemnity

	
(a)

	
Tenant’s Insurance

	
(b)

	
Landlord’s Insurance

	
(c)

	
No Subrogation; Waiver of Property Claims

	
(d)

	
Waiver

	
(e)

	
Indemnities

	
12

	
Subordination; Attornment; Notice to Landlord’s Mortgagee

	
(a)

	
Subordination

	
(b)

	
Attornment

  

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(c)

	
Notice to Landlord’s Mortgagee

	
(d)

	
Landlord’s Mortgagee’s Protection Provisions

	
(e)

	
Existing Lender

	
13

	
Rules and Regulations

	
14

	
Condemnation

	
(a)

	
Total Taking

	
(b)

	
Partial Taking – Tenant’s Rights

	
(c)

	
Partial Taking – Landlord’s Rights

	
(d)

	
Temporary Taking

	
(e)

	
Award

	
15

	
Fire or Other Casualty

	
(a)

	
Repair Estimate

	
(b)

	
Tenant’s Rights

	
(c)

	
Landlord’s Rights

	
(d)

	
Repair Obligation

	
(e)

	
Abatement of Rent

	
16

	
Personal Property Taxes

	
17

	
Events of Default

	
(a)

	
Payment Default

	
(b)

	
Abandonment

	
(c)

	
Subordination

	
(d)

	
Estoppel

	
(e)

	
Insurance

	
(f)

	
Mechanic’s Liens

	
(g)

	
Misrepresentation

	
(h)

	
Guaranty

	
(i)

	
OFAC/FCPA Representation

	
(j)

	
Other Defaults

	
(k)

	
Insolvency

	
18

	
Remedies

	
(a)

	
Termination of Lease

	
(b)

	
Termination of Possession

	
(c)

	
Perform Acts on Behalf of Tenant

	
19

	
Payment by Tenant; Non-Waiver; Cumulative Remedies

	
(a)

	
Payment by Tenant

	
(b)

	
No Waiver

	
(c)

	
Cumulative Remedies

	
20

	
Surrender of Premises

	
21

	
Holding Over

	
22

	
Certain Rights Reserved by Landlord

  

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(a)

	
Building Operations

	
(b)

	
Security

	
(c)

	
Current and Prospective Insurers, Purchasers, Investors and Mortgagees

	
(d)

	
Prospective Tenants

	
23

	
Substitution Space

	
24

	
Miscellaneous

	
(a)

	
Landlord Transfer

	
(b)

	
Landlord’s Liability

	
(c)

	
Force Majeure

	
(d)

	
Brokerage

	
(e)

	
Estoppel Certificates

	
(f)

	
Notices

	
(g)

	
Separability

	
(h)

	
Amendments; Binding Effect; No Electronic Records

	
(i)

	
Quiet Enjoyment

	
(j)

	
No Merger

	
(k)

	
Entire Agreement

	
(l)

	
Waiver of Jury Trial

	
(m)

	
Governing Law

	
(n)

	
Recording

	
(o)

	
Water or Mold Notification

	
(p)

	
Joint and Several Liability

	
(q)

	
Financial Reports

	
(r)

	
Landlord’s Fees

	
(s)

	
Confidentiality

	
(t)

	
Authority

	
(u)

	
Hazardous Materials

	
(v)

	
List of Exhibits

	
(w)

	
OFAC/FCPA Representation

	
(x)

	
Survival of Obligations

	
(y)

	
Reasonable Efforts

	
(z)

	
Landlord Default

	
(aa)

	
Business Days

	
(bb)

	
Terms; Captions

	
25

	
Interior Signage

	
26

	
Telecommunications and Communications

	
(a)

	
Tenant’s Telecommunications Providers

	
(b)

	
Cable Work

	
(c)

	
Landlord’s Reserved Rights

	
(d)

	
Removal Obligations

  

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INDEX

	
Abated Rent

	
Exhibit H

	
Abatement Period

	
Exhibit H

	
Acceptable Change

	
12

	
Acceptable Changes

	
12

	
Additional Election Date

	
Exhibit K

	
Additional Election Notice

	
Exhibit K

	
Additional First Offer Notice

	
Exhibit K

	
Additional Rent

	
2

	
Additional Right of First Offer

	
Exhibit K

	
Affiliate

	
1

	
Alterations

	
11

	
Anticipated Delivery Date

	
Exhibit K

	
Approved Working Drawings

	
5, Exhibit D

	
Architect

	
Exhibit D

	
Base, shell and Core

	
Exhibit D

	
Basic Lease Information

	
1

	
Basic Rent Floor

	
Exhibit J

	
blocked person

	
30

	
Budget Estimate

	
Exhibit D

	
Building

	
i

	
Building’s Structure

	
1

	
Building’s Systems

	
1

	
Cable Problems

	
34

	
Cable Work

	
33

	
Cable(s)

	
33

	
Casualty

	
21

	
Change Orders

	
Exhibit D

	
Claims

	
18

	
Code

	
Exhibit D

	
Common Areas

	
1

	
Comparison Buildings

	
Exhibit J

	
Comparison Leases

	
Exhibit J

	
Construction Drawings

	
Exhibit D

	
Contract

	
Exhibit D

	
Contract Price

	
Exhibit D

	
Contractor

	
Exhibit D

	
Coordination Fee

	
Exhibit D

	
Cost Proposal

	
Exhibit D

  

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Cost Proposal Delivery Date

	
Exhibit D

	
Damage Notice

	
21

	
Default Rate

	
8

	
Delivery Termination Date

	
2

	
Disabilities Acts

	
14

	
Economic Terms

	
Exhibit K

	
Election Date

	
Exhibit K

	
Eligible Institution

	
9

	
Engineers

	
Exhibit D

	
Estimated Delivery Date

	
1

	
Event of Default

	
22

	
Evergreen Clause

	
9

	
Exercise Notice

	
Exhibit J

	
Expiration Date

	
i

	
Extension Option

	
Exhibit J

	
Final Payment Application

	
Exhibit D

	
Final Space Plan

	
Exhibit D

	
Final Working Drawings

	
Exhibit D

	
First Offer Notice

	
Exhibit K

	
First Offer Period

	
Exhibit K

	
First Offer Space

	
Exhibit J

	
First Refusal Space

	
Exhibit K

	
GAAP

	
16

	
Garage

	
Exhibit G

	
Guarantor

	
Exhibit I

	
Guaranty

	
Exhibit E

	
Hazardous Materials

	
29

	
HVAC

	
10

	
include

	
1

	
includes

	
1

	
including

	
1

	
Increase Cap

	
5

	
Land

	
i

	
Landlord

	
1, Exhibit I

	
Landlord Party

	
1

	
Landlord Supervision Fee

	
Exhibit D

	
Landlord’s Final Retention

	
Exhibit D

	
Landlord’s Mortgagee

	
19

	
Law

	
1

	
Laws

	
1

  

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Lease

	
1, Exhibit I

	
Letter of Credit

	
9

	
Master Lease

	
34

	
Money Rates

	
23

	
Mortgage

	
19

	
O&M Information

	
Exhibit D

	
Objection Notice

	
7

	
Objection Period

	
7

	
Objectionable Name

	
32

	
Offer

	
Exhibit K

	
Offer Notice

	
Exhibit K

	
Ongoing First Refusal Period

	
Exhibit K

	
Ongoing First Refusal Period Expiration Date

	
Exhibit K

	
Operating Costs

	
3

	
Operating Costs and Tax Statement

	
6

	
Operating Costs Excess

	
2

	
Option Term

	
Exhibit J

	
Original Tenant

	
32

	
Over-Allowance Amount

	
Exhibit D

	
Partial Cost Proposal

	
Exhibit D

	
Permits

	
Exhibit D

	
Permitted Transfer

	
16

	
Permitted Transferee

	
16

	
Primary Lease

	
19

	
Prime Rate

	
23

	
Prohibited Person

	
30

	
Project

	
i

	
Property Management Office

	
Exhibit C

	
Punch List Items

	
Exhibit D

	
Punch-list Items

	
Exhibit E

	
Qualified Appraiser

	
Exhibit J

	
Repair Period

	
21

	
Review

	
7

	
Review Notice

	
7

	
Right of First Offer

	
Exhibit K

	
Right of First Refusal

	
Exhibit K

	
ROFR Acceptance Deadline

	
Exhibit K

	
ROFR Acceptance Notice

	
Exhibit K

	
SDNs

	
30

  

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Signage Monument

	
32

	
Specifications

	
Exhibit D

	
Standard Improvement Package

	
Exhibit D

	
Substantial Completion

	
Exhibit D

	
Superior Rights

	
Exhibit K

	
Taking

	
20

	
Tangible Net Worth

	
16

	
Tax Excess

	
6

	
Taxes

	
6

	
Telecommunications Services

	
32

	
Tenant

	
1, 23, Exhibit I

	
Tenant Delay

	
Exhibit D

	
Tenant Delays

	
Exhibit D

	
Tenant Improvement Allowance

	
Exhibit D

	
Tenant Improvement Allowance Items

	
Exhibit D

	
Tenant Improvements

	
Exhibit D

	
Tenant Parties

	
1

	
Tenant Party

	
1

	
Tenant Work Letter

	
Exhibit D

	
Tenant’s Parking Spaces

	
Exhibit G

	
Tenant’s Accountant

	
7

	
Tenant’s Additional Parking Spaces

	
Exhibit G

	
Tenant’s Agents

	
Exhibit D

	
Tenant’s Election Notice

	
Exhibit K

	
Tenant’s Off-Premises Equipment

	
1

	
Tenant’s Parking Space

	
Exhibit G

	
Tenant’s Parking Spaces

	
Exhibit G

	
The Law of Real Estate Agency

	
27

	
Time Deadlines

	
Exhibit D

	
Transfer

	
14

	
Trash

	
1

	
Underlying Documents

	
3

	
Working Drawings

	
Exhibit D

  

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LEASE

 

This Lease Agreement (this “Lease”) is entered into as of August 26, 2013, between TALON PORTFOLIO SERVICES, LLC, a Washington limited liability company, as General Receiver for W2007 Seattle Office 110 Atrium Place Realty, LLC, a Delaware limited liability company, King County Case No. 12-2-21253-8-SEA (“Landlord”), and AUGME TECHNOLOGIES, INC., a Washington corporation (“Tenant”).

 

1. Definitions and Basic Provisions The definitions and basic provisions set forth in the Basic Lease Information (the “Basic Lease Information”) are incorporated herein by reference for all purposes.  Additionally, the following terms shall have the following meanings when used in this Lease:  “Affiliate” means any person or entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the party in question; “Building’s Structure” means the Building’s exterior walls, roof, elevator shafts, footings, foundations, structural portions of load-bearing walls, structural floors and subfloors, and structural columns and beams; “Building’s Systems” means the Building’s HVAC (as defined below), security, life-safety, plumbing, electrical, and mechanical systems; without limitation, “include”, “includes” or “including” shall be deemed, as the context indicates, to be followed by the words “but (is/are) not limited to” or “without limitation”; “Laws” means all federal, state, and local laws, codes, ordinances, rules, requirements and regulations, all court orders, governmental directives, and governmental orders and all interpretations of the foregoing, and all restrictive covenants and conditions affecting the Project, and “Law” means any of the foregoing; “Tenant’s Off-Premises Equipment” means any of Tenant’s equipment or other property that may be located on the grounds of the Project (other than inside the Premises); and “Tenant Parties” means all of the following persons:  Tenant; any assignees claiming by, through, or under Tenant; any subtenants claiming by, through, or under Tenant; and any of their respective agents, contractors, employees, licensees, guests and invitees, and “Tenant Party” means any of the foregoing.  “Original Tenant” means the Tenant originally named in this Lease.  “Landlord Parties” means all of the following persons: Landlord, Landlord’s Mortgagees (as defined below), and any of their respective partners, members, directors, officers, trustees, shareholders, successors and assigns, agents, employees, independent contractors, licensees, guests and invitees, and “Landlord Party” means any of the foregoing.

 

2. Lease Grant Subject to the terms of this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises.  Tenant shall also have the non-exclusive right to use in common with Landlord and the other tenants of the Project those portions of the Project that are provided by Landlord for use in common with Landlord and the other tenants of the Project, such as entrances, lobbies, restrooms, ground floor corridors, elevators and elevator foyers, loading and unloading areas, plazas, ramps, drives, stairs, and access ways and service ways (collectively, the “Common Areas”).

 

3. Tender of Possession Landlord and Tenant presently anticipate that possession of the Premises will be tendered to Tenant in the condition required by this Lease on or about January 1, 2014 (the “Estimated Delivery Date”).  If Landlord is unable to tender possession of the Premises in such condition to Tenant by the Estimated Delivery Date, then (a) the validity of this Lease shall not be affected or impaired thereby, (b) Landlord shall not be in default hereunder or be liable for damages therefor, and (c) Tenant shall accept possession of the Premises when Landlord tenders possession thereof to Tenant.  In the event, however that Landlord fails to cause the Tenant Improvements in the Premises to be Substantially Completed by the Estimated Delivery Date, which Estimated Delivery Date is subject to extension on a day-for-day basis for each day of Tenant Delay (as that term is defined in the Tenant Work Letter), then subject to the terms and conditions set forth in this Section 3, for the period of time commencing on the Estimated Delivery Date, and ending upon the day on which Landlord does cause the Substantial Completion of the Tenant Improvements in the Premises to occur (each day in such period is a "Day of Late Delivery"), Tenant shall be entitled to receive, on two (2) day-for-one (1) day basis, an abatement of the Basic Rent otherwise attributable to the Premises commencing on the day immediately following the expiration of the Abatement Period set forth in Exhibit H attached hereto, and continuing for the total number of Days of Late Delivery. By occupying the Premises, Tenant shall be deemed to have accepted the Premises in their condition as of the date of such occupancy, subject to the performance of punch-list items that remain to be performed by Landlord, if any.  Within two (2) weeks of occupying the Premises, Tenant shall execute and deliver to Landlord a letter substantially in the form of Exhibit E attached hereto confirming (1) the Commencement Date and the Expiration Date of the initial Term, (2) that Tenant has accepted the Premises, and (3) that Landlord has performed all of its obligations with respect to the Premises (except for punch-list items specified in such letter); however, the failure of the parties to execute such letter shall not defer the Commencement Date or otherwise invalidate this Lease.

  

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Occupancy of the Premises by Tenant prior to the Commencement Date shall be subject to all of the provisions of this Lease including those requiring the payment of Basic Rent and Additional Rent (each as defined below).  Notwithstanding the foregoing, Tenant shall have the right to enter the Premises prior to the Substantial Completion of the Tenant Improvements on and subject to the terms and conditions set forth in Section 5.1 of the Tenant Work Letter.

 

4. Rent

 

(a) Payment Tenant shall timely pay Rent to Landlord, without notice, demand, deduction or setoff (except as otherwise expressly provided herein), by good and sufficient check drawn on a national banking association delivered to Landlord’s address provided for in the Basic Lease Information, by wire transfer as provided for in the Basic Lease Information, or to such other address or by wiring instructions provided in a notice delivered by Landlord to Tenant, accompanied by all applicable state and local sales or use taxes.  The obligations of Tenant to pay Rent and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations.  Subject to the provisions of Exhibit H attached hereto, Basic Rent, adjusted as herein provided, shall be payable monthly in advance.  The monthly installment of Basic Rent for the first calendar month of the Term for which Basic Rent is due to Landlord hereunder shall be payable contemporaneously with the execution of this Lease; thereafter, Basic Rent shall be payable on the first day of each month beginning on the first day of the second full calendar month of the Term for which Basic Rent is due to Landlord.  The monthly Basic Rent for any partial month at the beginning of the Term shall equal the product of 1/365 of the annual Basic Rent in effect during the partial month and the number of days in the partial month and shall be due on the Commencement Date.  Payments of Basic Rent for any fractional calendar month at the end of the Term shall be similarly prorated.  Subject to the provisions of Exhibit H attached hereto, Tenant shall pay Additional Rent at the same time and in the same manner as Basic Rent.

 

(b) Operating Costs; Taxes  

 

    (1) Tenant shall pay to Landlord Tenant’s Proportionate Share of any increase in Operating Costs (as defined below) for each calendar year and partial calendar year falling within the Term over the Operating Costs for the Base Year (the “Operating Costs Excess”).  Landlord may make a good faith estimate of Tenant’s Proportionate Share of the Operating Costs Excess to be due by Tenant for any calendar year or part thereof during the Term.  During each calendar year or partial calendar year of the Term (after the Base Year), Tenant shall pay to Landlord, in advance concurrently with each monthly installment of Basic Rent, an amount equal to the estimated Tenant’s Proportionate Share of the Operating Costs Excess for such calendar year or part thereof divided by the number of months therein.  From time to time, Landlord may estimate and re-estimate Tenant’s Proportionate Share of the Operating Costs Excess to be due by Tenant and deliver a copy of the estimate or re-estimate to Tenant.  Thereafter, the monthly installments of Tenant’s Proportionate Share of the Operating Costs Excess payable by Tenant shall be appropriately adjusted in accordance with the estimations so that, by the end of the calendar year in question, Tenant shall have paid all of the Additional Rent as estimated by Landlord.  Any amounts paid based on such an estimate shall be subject to adjustment as herein provided when actual Operating Costs are available for each calendar year.  “Additional Rent,” as used herein, shall mean, collectively, Tenant’s Proportionate Share of the Operating Costs Excess plus Tenant’s Proportionate Share of the Tax Excess (as defined below).

 

    (2) The term “Operating Costs” means all expenses and disbursements (subject to the limitations set forth below) that Landlord incurs in connection with the ownership, operation, maintenance, repair and replacement of the Project, determined in accordance with sound accounting principles consistently applied, including the following costs:  (A) wages and salaries of all on-site employees at or below the grade of general manager engaged in the operation, maintenance or security of the Project (together with Landlord’s reasonable allocation of expenses of off-site employees at or below the grade of senior building manager who perform a portion of their services in connection with the operation, maintenance or security of the Project), including taxes, insurance and benefits relating thereto; (B) all supplies and materials used in the operation, maintenance, repair, replacement and security of the Project; (C) costs for improvements (as distinguished from replacement of parts or components installed in the ordinary cause of business) made to the Project that, although capital in nature, are expected to reduce the normal operating costs (including all utility costs) of the Project or to enhance safety or security of the Property or its occupants, as amortized using a commercially reasonable interest

  

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rate not to exceed eight percent (8%) over the time period reasonably estimated by Landlord to recover the costs thereof taking into consideration the anticipated cost savings, as determined by Landlord using its good faith, commercially reasonable judgment, as well as capital improvements made in order to comply with any Law hereafter promulgated by any governmental authority or any interpretation hereafter rendered with respect to any existing Law, to promote safety or to maintain the quality of the Project, as amortized using a commercially reasonable interest rate not to exceed eight percent (8%) over the useful economic life of such improvements as determined by Landlord in its reasonable discretion; (D) cost of all utilities, except the cost of utilities reimbursable to Landlord by the Project’s tenants other than pursuant to a provision similar to this Section 4(b); (E) insurance expenses; (F) repairs, replacements, and general maintenance of the Project; (G) fair market rental and other costs with respect to the management office for the Building; (H) service, maintenance and management contracts with independent contractors for the operation, maintenance, management, repair, replacement, or security of the Project (including alarm service, window cleaning, and elevator maintenance); (I) Garage operation, repair, restoration and maintenance; and (J) payments made or charges incurred under any reciprocal easement agreement, transportation management agreement, cost-sharing agreement or other covenant, condition, restriction or similar document affecting or benefiting the Property whether now or hereafter in effect (collectively, the “Underlying Documents”).

 

Operating Costs shall not include costs for (i) capital improvements made to the Project, other than capital improvements described in Section 4(b)(2)(C) above and items that are generally considered maintenance and repair items, such as painting of common areas, replacement of carpet in elevator lobbies, and the like; (ii) repair, replacements and general maintenance paid by proceeds of insurance or by Tenant or other third parties; (iii) interest, amortization or other payments on loans to Landlord, except loans made to Landlord for capital improvements described in Section 4(b)(2)(C) above; (iv) depreciation; (v) leasing commissions; (vi) legal expenses for services and space planner fees other than those that benefit the Project tenants generally (e.g., tax disputes); (vii) renovating or otherwise improving space for occupants of the Project or vacant space in the Project; (viii) Taxes; (ix) franchise or federal income taxes imposed on or measured by the income of Landlord from the operation of the Project; (x) any expenses for which Landlord has received actual reimbursement (other than through Operating Expenses); (xi) any “tenant allowances”, “tenant concessions” and other costs or expenses incurred in fixturing, furnishing, renovating or otherwise improving, decorating or redecorating space for tenants or other occupants of the Building, or vacant leaseable space in the Building; (xii) the cost or expense of any services or benefits provided generally to other tenants in the Building and not provided or available to Tenant; (xiii) advertising and promotional expenditures; (xiv) the cost of complying with any Laws in effect (and as interpreted and enforced) on the date of this Lease; (xv) sums paid to subsidiaries or other affiliates of Landlord for services on or to the Building and/or Premises, but only to the extent that the costs of such services exceed the competitive cost for such services rendered by persons or entities of similar skill, competence and experience; (xvi) fines, costs or penalties incurred as a result and to the extent of a violation by Landlord of any applicable Laws; (xvii) costs incurred by Landlord in connection with the performance of Landlord's obligations with respect to pre-existing environmental conditions (including pre-existing Hazardous Materials under Section 24(u)); (xviii) costs incurred by Landlord for the repair of damage to the Building, to the extent that Landlord is reimbursed for such costs by insurance proceeds, contractor warranties, guarantees, judgments or other third party sources; (xix) Landlord’s charitable and political contributions; and (xx) all costs associated with the operation of the business of the entity which constitutes “Landlord” (as distinguished from the costs of operating, maintaining, repairing and managing the Property) including, but not limited to, Landlord’s or Landlord’s managing agent’s general corporate overhead and general administrative expenses.

 

Operating Costs for a Base Year only shall not include market-wide labor-rate increases due to extraordinary circumstances, including boycotts and strikes; utility rate increases due to extraordinary circumstances, including conservation surcharges, boycotts, embargoes or other shortages; or amortized costs relating to capital improvements to the extent such costs would occur only in such Base Year (and prior years) and not in subsequent years.

 

Notwithstanding anything to the contrary set forth in this Section 4(b)(2), the increase in Tenant’s Pro Rata Share of Operating Costs Excess in any single calendar year shall not exceed an amount equal to five percent (5%) (the “Increase Cap”) of Tenant’s Pro Rata Share of Operating Costs Excess payable by Tenant in the immediately preceding calendar year, provided that:

  

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(I)           In no event shall there be any cap on the annual increases in Tenant’s Pro Rata Share of the costs for any of the following:  non-recurring maintenance and repair items, improvements that are capital in nature (subject to the provisions of Section 4(b)(2) above), utilities, snow removal or insurance; all other Operating Expenses Excess shall be subject to the Increase Cap.

 

(II)           The Increase Cap shall be compounding and cumulative over the course of the term (such that the unused portion of a year’s cap can be used to absorb a prior year’s increase that was in excess of the Increase cap or carried forward to absorb a future year’s increase that would have been in excess of the Increase cap.

 

(3) Tenant shall also pay Tenant’s Proportionate Share of any increase in Taxes for each calendar year and partial calendar year falling within the Term over the Taxes for the Base Year (the “Tax Excess”).  Tenant shall pay Tenant’s Proportionate Share of the Tax Excess in the same manner as provided above for Tenant’s Proportionate Share of the Operating Costs Excess (both on an estimated and actual basis as provided therein).  “Taxes” means taxes, assessments, and governmental charges or fees whether federal, state, county or municipal, and whether they be by taxing districts or authorities presently taxing or by others, subsequently created or otherwise, and any other taxes and assessments (including nongovernmental assessments for common charges under a restrictive covenant or other private agreement that are not treated as part of Operating Costs) now or hereafter attributable to the Project (or its operation), excluding, however, penalties and interest thereon.  Notwithstanding anything to the contrary contained in this Lease, there shall be excluded from Taxes any excess profits taxes, franchise taxes, gift taxes, inheritance and succession taxes, estate taxes, documentary transfer taxes, federal or state income, corporate, capital stock, or capital gains taxes, penalties incurred as a result of Landlord’s failure to pay taxes or to file any tax or informational returns and other taxes to the extent applicable to Landlord’s general or net income (as opposed to rents, receipts, or income attributable to operations at the Project); provided, that if the present method of taxation changes so that in lieu of or in addition to the whole or any part of any Taxes, there is levied on Landlord a capital tax directly on the rents received therefrom or a franchise tax, assessment, or charge based, in whole or in part, upon such rents for the Project, then all such taxes, assessments, or charges, or the part thereof so based, shall be deemed to be included within the term “Taxes” for purposes hereof.  If an assessment is payable in installments, Taxes for the year shall include the amount of the installment and any interest due and payable during that year.  For purposes of computing Taxes, any special assessment shall be deemed to have been paid in the maximum number of installments permitted by Law, and Taxes shall be deemed to include all interest that would have been payable in connection therewith as a result of paying such special assessment in the maximum number of installments permitted by Law.  For all other Taxes, the Taxes for that year shall, at Landlord’s election, include either the amount accrued, assessed or otherwise imposed for the year or the amount due and payable for that year, provided that Landlord’s election shall be applied consistently throughout the Term.  If there is a change in Taxes for any year of the Term, then Taxes for that year will be retroactively adjusted and Landlord shall provide Tenant, as applicable, with a credit or a statement of any deficiency based on the adjustment.  Tenant shall pay any such deficiency within thirty (30) days after receipt of the statement from Landlord.  Taxes shall include the costs of consultants retained in an effort to lower taxes and all costs incurred in disputing any taxes or in seeking to lower the tax valuation of the Project.  For property tax purposes, Tenant waives all rights to protest or appeal the appraised value of the Premises, as well as the Project, and all rights to receive notices of re-appraisement.

 

(4) By April 1st of each calendar year, or as soon thereafter as practicable but not later than July 1st of each calendar year during the Term, Landlord shall furnish to Tenant a statement of Operating Costs for the previous year, in each case adjusted as provided in Section 4(b)(5) below, and of the Taxes for the previous year (the “Operating Costs and Tax Statement”).  If Tenant’s estimated payments of Tenant’s Share of the Operating Costs Excess and/or Tax Excess, as the case may be, under this Section 4(b) for the year covered by the Operating Costs and Tax Statement exceed Tenant’s Proportionate Share of the Operating Costs Excess and/or Tax Excess, as the case may be, as indicated in the Operating Costs and Tax Statement, then Landlord shall promptly credit or reimburse Tenant for such applicable excess; likewise, if Tenant’s estimated payments of Tenant’s Proportionate Share of the Operating Costs Excess or Tax Excess, as the case may be, under this Section 4(b) for such year are less than Tenant’s Proportionate Share of the Operating Costs Excess and/or Tax Excess, as the case may be, as indicated in the Operating Costs and Tax Statement, then Tenant shall pay Landlord such deficiency within thirty (30) days after receipt of the Operating Costs and Tax Statement.  No delay in providing any Operating Costs and Tax Statement shall be deemed a default by Landlord or a waiver of Landlord’s right to require payment of Tenant’s Obligations for actual or estimated Operating Costs Excess or Tax Excess.

  

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(5) With respect to any calendar year or partial calendar year in which the Building is not occupied to the extent of ninety-five percent (95%) of the rentable area thereof, or Landlord is not supplying services to ninety-five percent (95%) of the rentable area thereof, the Operating Costs for such period that vary with the occupancy of the Building shall, for the purposes hereof, be increased to the amount that would have been incurred had the Building been occupied to the extent of ninety-five percent (95%) of the rentable area thereof and Landlord had been supplying services to ninety-five percent (95%) of the rentable area thereof.  If a category of Operating Costs is first incurred in a calendar year after the Base Year, then for purposes of calculating the Operating Costs Excess for such calendar year (and the following calendar years) the Operating Costs for the Base Year shall be deemed to be increased to include the amount that Landlord reasonably estimates would have been incurred by Landlord for such category of Operating Costs in the Base Year if Landlord had incurred such category of Operating Costs in the Base Year.  Conversely, if in a calendar year subsequent to the Base Year, Landlord no longer incurs a category of Operating Costs, then for purposes of calculating the Operating Costs Excess for such calendar year (and the following calendar year), Operating Costs for such Base Year shall be deemed to be decreased by the amount that Landlord actually incurred for such category of Operating Costs in the Base Year.  The adjustments to the Operating Costs for the Base Year provided for in the preceding two sentences shall not be deemed to require a recalculation of the Operating Costs Excess for any calendar year prior to the calendar year in question.

 

(6) Tenant may once, within one hundred fifty (150) days after receiving the Operating Costs and Tax Statement, give Landlord notice (the “Review Notice”) that Tenant intends to have Landlord’s records of the Operating Costs and Taxes for the calendar year covered by the Operating Costs and Tax Statement reviewed (the “Review”) for the sole purpose of determining whether the Operating Costs and Tax Statement is accurate; provided that as a condition to Tenant’s exercise of its right of Review set forth in this Section 4(b)(6), Tenant shall not be permitted to withhold payment of, and Tenant shall timely pay to Landlord, the full amount as required by the provisions of this Section 4 in accordance with such Operating Costs and Tax Statement.  However, such payment may be made under protest pending the outcome of the Review.  If Tenant retains an agent to review Landlord’s records, the agent shall be a commercially reasonable auditing firm licensed to do business in the State of Washington (“Tenant’s Auditor”).  Within a reasonable time after receipt of the Review Notice, Landlord shall make available to Tenant’s Auditor during normal business hours all pertinent records with respect to the Operating Costs and Tax Statement for the calendar year that is the subject of the Review Notice and that are reasonably necessary for Tenant’s  Auditor to conduct the Review.  If any records are maintained at a location other than the office of the Building, Tenant’s Auditor may either inspect the records at such other location or Tenant may pay for the reasonable cost of copying and shipping the records.  Except as otherwise expressly hereinafter provided, Tenant shall be solely responsible for all costs, expenses and fees incurred for the Review.  Within sixty (60) days after the records are made available to Tenant’s Auditor (the “Objection Period”), Tenant shall have the right to give Landlord notice (an “Objection Notice”) stating in reasonable detail any objection to Landlord’s Operating Costs and Tax Statement for that year.  If Tenant fails to provide Landlord with a Review Notice with respect to the Operating Costs and Tax Statement for any calendar year within the one hundred fifty (150) day period described above, or fails to give Landlord an Objection Notice within the sixty (60) day period described above, Tenant shall be deemed to have approved the Operating Costs and Tax Statement and shall be barred from raising any claims regarding the Operating Costs and Tax Statement for that year.  If Landlord agrees with Tenant’s Objection Notice, then Landlord shall credit the amount of any overpayment by Tenant in respect of Operating Costs and Taxes against the Rent next payable under this Lease; provided, that if the Term shall have expired, then any overpayment for which Tenant may otherwise have received a credit shall be refunded to Tenant within thirty (30) days after receipt of said certification at Tenant’s last known address after deducting the amount of Rent and any other payments due.  If Landlord disagrees with Tenant’s Objection Notice, then Landlord shall give to Tenant notice thereof within thirty (30) days after Landlord’s receipt of Tenant’s Objection Notice, which notice shall set forth in reasonable detail the reasons for such disagreement, and Landlord and Tenant shall attempt to resolve the disagreement.  If Landlord and Tenant cannot mutually agree on the resolution of the disagreement within thirty (30) days after Tenant’s receipt of Landlord’s notice of disagreement, then Landlord and Tenant shall jointly choose an independent certified public accountant located in Seattle, Washington who has not represented either Landlord, Tenant, or their respective Affiliates, in the preceding five (5) years to resolve the disagreement, whose determination shall be binding on the parties hereto.  If the parties are unable to agree upon such independent certified public accountant, then either Landlord or Tenant shall have the right to petition for the appointment of the independent accountant by the Presiding Judge of the Superior Court of King County, Washington and the decision of such Judge (and the determination of the accountant appointed by such Judge) shall be final and binding upon the

  

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parties, and not subject to appeal of any kind.  If the final determination shall disclose that the Operating Costs and Tax Statement for the calendar year in question were overstated by more than five percent (5%), then Landlord shall reimburse Tenant, within thirty (30) days after Landlord receives notice of such final determination, for the reasonable costs of the independent certification or reimburse Tenant (as applicable) the cost of Tenant’s accountant’s review, up to a maximum of Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) per review (but each party shall pay the cost of its respective attorneys' fees); otherwise, the cost of the audit and arbitration shall be paid by Tenant.  If Operating Costs and/or Taxes for the calendar year are less than reported, Landlord shall provide Tenant with a credit against the payment of Rent next due in the amount of the overpayment by Tenant; provided, however, if the Term shall have expired, then any overpayment for which Tenant may otherwise have received a credit shall be refunded to Tenant within thirty (30) days after receipt of said certification at Tenant’s last known address after deducting the amount of Rent and any other payments due.  Likewise, if Landlord and Tenant determine that Operating Costs and/or Taxes for the calendar year are greater than reported, Tenant shall pay Landlord the amount of any underpayment in Tenant’s Pro Rata Share thereof within thirty (30) days.  Tenant acknowledges and agrees that any records reviewed under this provision constitute confidential information of Landlord that shall not be disclosed to anyone other than Tenant’s Accountant and the principals of Tenant who receive the results of such Review.  Before making any records available for review, Landlord may require Tenant and Tenant’s Accountant to execute a reasonable confidentiality agreement, in which event Tenant shall cause the same to be executed and delivered to Landlord within ten (10) days after receiving it from Landlord, and if Tenant fails to do so, the Objection Period shall be reduced by one (1) day for each day by which such execution and delivery follows the expiration of such thirty (30)-day period.

 

5. Delinquent Payment; Handling Charges

 

.  All past due payments required of Tenant hereunder that are not received by Landlord on or before five (5) days after the date the payment is due (i) shall bear interest from the date due until paid at the lesser of twelve percent (12%) per annum or the maximum lawful rate of interest (such lesser amount is referred to herein as the “Default Rate”); and (ii) Landlord, in addition to all other rights and remedies available to it, may charge Tenant a fee equal to five percent (5%)of the delinquent payment to reimburse Landlord for its cost and inconvenience incurred as a consequence of Tenant’s delinquency.  In no event, however, shall the charges permitted under this Section 5 or elsewhere in this Lease, to the extent they are considered to be interest under applicable Law, exceed the maximum lawful rate of interest.  Notwithstanding the foregoing, the late fee referenced above shall not be charged with respect to the first occurrence (but shall be charged with respect to any subsequent occurrence) during any twelve- (12) month period in which Tenant fails to make payment when due, until five (5) days after Landlord delivers written notice of such delinquency to Tenant.

 

6. Letter of Credit.

 

(a)           No later than ten (10) days following the full execution of this Lease (and in any event prior to Landlord’s obligation to commence construction of Tenant Improvements in the Premises or to allow Tenant or any of Tenant’s agents access to the Premises), Tenant shall deliver to Landlord a Letter of Credit, which shall be held by Landlord to secure Tenant’s performance of its obligations under this Lease.  The Letter of Credit is not an advance payment of Rent or a measure or limit of Landlord’s damages upon an Event of Default (as defined below).  Landlord may, from time to time following an Event of Default and without prejudice to any other remedy, use all or a part of the Letter of Credit to perform any obligation Tenant fails to perform hereunder.  Notwithstanding anything to the contrary in this Section 6, at any time during the Term, Tenant may elect to deposit with Landlord a letter of credit from an Eligible Institution (as defined below) in form and substance reasonably approved by Landlord, payable upon presentation of a sight draft without more (the “Letter of Credit”). The beneficiary under the Letter of Credit shall be shown as “W2007 Seattle office 110 Atrium Place Realty, LLC, its successors and assigns” or otherwise as specified by Landlord.  Tenant shall renew the Letter of Credit from time to time, at least thirty (30) days prior to expiration thereof, and deliver to Landlord a new Letter of Credit or an endorsement to the Letter of Credit or any other evidence required by Landlord that the Letter of Credit has been renewed for at least an additional one (1) year period (with respect to each renewal).  The amount of the Letter of Credit shall be equal to the amount set forth in the Basic Lease Information, for the full, timely and faithful performance of Tenant’s covenants and obligations under this Lease, it being expressly understood and agreed that (a) the Letter of Credit does not constitute a measure of Landlord’s damages in the event of Tenant’s default, and (b) the Letter of Credit is not being provided as an equivalent or in lieu of any security deposit, but rather to assure Landlord of a means of third-party security apart from and completely independent of Tenant’s assets and creditworthiness.

  

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(b)           The Letter of Credit shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant.  Such Letter of Credit shall (1) be transferable and assignable by Landlord, more than once, at Landlord’s option and (2) include an automatic renewal clause (an “Evergreen Clause”) and require notice of non-renewal ninety (90) days in advance of any automatic renewal date.  All charges, fees and costs related to such Letter of Credit (including, without limitation, as a result of any transfer by Landlord) shall be borne by Tenant.  Upon the occurrence of an Event of Default, Landlord shall have the right, at its option, to draw on the Letter of Credit and to apply all or any part thereof to the payment of the items for which the Letter of Credit was established or to apply the Letter of Credit to the satisfaction of Tenant’s obligations under this Lease in such order, proportion or priority as Landlord may determine.  In addition to any other right Landlord may have to draw upon the Letter of Credit, Landlord shall have the additional rights to draw in full the Letter of Credit (regardless of whether this Lease is in default):  (A) with respect to any Letter of Credit containing an Evergreen Clause, if Landlord has received a notice from the issuing bank that the Letter of Credit will not be renewed and a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (B) with respect to any Letter of Credit with a stated expiration date, if Landlord has not received a notice from the issuing bank that it has renewed the Letter of Credit at least ninety (90) days prior to the date on which such Letter of Credit is scheduled to expire or a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (C) upon receipt of notice from the issuing bank that the Letter of Credit will be terminated (except if a substitute Letter of Credit is provided by Tenant within ten (10) days following Landlord’s written demand therefore, with no other notice or cure or grace period being applicable thereto, notwithstanding anything in this Lease to the contrary), or (D) if Landlord receives information that the bank issuing the Letter of Credit is no longer an Eligible Institution.  Notwithstanding anything to the contrary contained in the above, Landlord is not obligated to draw any Letter of Credit upon the happening of an event specified in (A), (B), (C) or (D)  above and shall not be liable for any losses sustained by Tenant due to the insolvency of the bank issuing the Letter of Credit if Landlord has not drawn the Letter of Credit.  Any amount of the Letter of Credit that is drawn upon by Landlord, but not used or applied by Landlord, shall be held by Landlord and deemed a security deposit pursuant to this Section 6(b).  The use, application or retention of the Letter of Credit, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided in this Lease, or by law, it being understood that Landlord shall not first be required to proceed against the Letter of Credit.  Tenant agrees and acknowledges that (i) the Letter of Credit constitutes a separate and independent contract between Landlord and the issuing bank, (ii) Tenant is not a third party beneficiary of such contract, (iii) Tenant has no property interest whatsoever in the Letter of Credit or the proceeds thereof, and (iv) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, Tenant is placed into receivership or conservatorship, and/or there is an event of a receivership, conservatorship or a bankruptcy filing by, or on behalf of, Tenant, neither Tenant, any trustee, receiver or conservator, nor Tenant’s bankruptcy estate shall have any right to restrict or limit Landlord’s claim and/or rights to the Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Bankruptcy Code or otherwise.  For the purposes of this Section 6(b), the term “Eligible Institution” shall mean a depository institution or trust company insured by the Federal Deposit Insurance Corporation the long term unsecured debt obligations of which are rated at least “AA-” by Fitch and Standard & Poors and “Aa2” by Moody’s.

 

(c)           Conditional Reduction of Letter of Credit Amount

 

.  Commencing any time after the first day of the twenty-third (23rd) full calendar month of the initial Term of this Lease, to the extent that no uncured Event of Default by Tenant then exists under this Lease, and provided that Tenant then meets the “Minimum Financial Requirements,” as defined herein, Tenant shall have the one-time right to reduce the amount of the Letter of Credit, from One Hundred Thousand Dollars ($100,000.00) to Fifty Thousand Dollars ($50,000.00).  For purposes of this Section 6(c), the “Minimum Financial Requirements” shall mean that Tenant currently maintains, and has maintained throughout the entire then-existing Term of the Lease, “cash” or “cash equivalents” (as the same are defined in accordance with generally accepted accounting principles) of Four Million Dollars ($4,000,000.00) or more.  In the event that Tenant desires to reduce the amount of the Letter of Credit as provided herein, then no less than thirty (30) days’ prior to the date of any such reduction, Tenant shall deliver to Landlord, for Landlord’s review, a copy of Tenant’s current financial statement and the financial statements for all preceding calendar years occurring during the Term of this Lease, each prepared on the basis of generally accepted accounting principles, consistently applied, and certified as correct by Tenant and audited by a reputable independent certified public accounting firm (for purposes of this Section 6(c), “Financial Statements”), evidencing that Tenant is then in compliance with the Minimum Financial Requirements.  In the event that Tenant complies with terms and conditions set forth in this Section 6(c), then Tenant shall have the right to reduce the amount of the Letter of Credit

  

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as set forth above via the delivery to Landlord of either (x) an amendment to the existing Letter of Credit (in form and content reasonably acceptable to Landlord) reducing the amount of the existing Letter of Credit to Fifty Thousand Dollars ($50,000.00), or (y) an entirely new Letter of Credit (in the form and content as otherwise required in this Section 6(c)), in the amount of Fifty Thousand Dollars ($50,000.00).

 

(d)           Springing Additional Letter of Credit  At any time following a reduction of the amount of the Letter of Credit as provided in Section 6(c) above, Landlord shall have the right, subject to the terms set forth in this Section 6(d), to require that the amount of the Letter of Credit be increased back to (but not in excess of) One Hundred Thousand Dollars ($100,000.00). Commencing upon a reduction of the amount of the Letter of Credit as provided in Section 6(c) above, Tenant shall, within thirty (30) days following the end of each financial quarter (i.e., January through March, April through June, July through September, and October through December) occurring thereafter throughout the Term, provide Landlord, for Landlord’s review, a copy of Tenant’s Financial Statements for such financial quarter evidencing that Tenant is then in compliance with the Minimum Financial Requirements.  In the event that Tenant fails to timely deliver any such Financial Statement, or if any such Financial Statement indicates that Tenant has failed to maintain the Minimum Financial Requirements for all or any portion of the prior financial quarter, then upon written notice therefor (the “Demand Notice”) from Landlord to Tenant, Tenant shall deliver to Landlord an additional Letter of Credit (the “Additional Letter of Credit”) in the amount of One Hundred Thousand Dollars ($100,000.00).  The Additional Letter of Credit shall be either (i) an amendment to the existing Letter of Credit (in form and content reasonably acceptable to Landlord), increasing the amount of the Letter of Credit to One Hundred Thousand Dollars ($100,000.00), or (ii) an entirely new Letter of Credit (in the form and content as otherwise required in this Section 6(d)) in the amount of One Hundred Thousand Dollars ($100,000.00).

 

7. Landlord’s Obligations

 

(a) Services  Landlord shall use all reasonable efforts to furnish to Tenant (1) domestic water at those points of supply provided for general use of tenants of the Building; (2) heated and refrigerated air-conditioning (“HVAC”); (3) janitorial service to the Premises Sunday through Thursday, other than Holidays, for Building-standard installations and such window washing as may from time to time be reasonably required; (4) passenger elevators for ingress and egress to the floor on which the Premises are located, in common with other tenants, provided that Landlord may reasonably limit the number of operating elevators during nonbusiness hours and Holidays; and (5) electrical current twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year for equipment that does not exceed normal office usage.  Subject to the provisions of Section 15 below, Landlord shall maintain the Common Areas of the Building in reasonably good order and condition, except for damage caused by a Tenant Party.  If Tenant desires any of the services specified in clause (2) of this Section 7(a) above, (A) at any time other than between 6:00 a.m. and 7:00 p.m. on weekdays (other than Holidays), and 8:00 a.m. to 1:00 p.m. on Saturdays or (B) on Sunday or Holidays, then such services shall be supplied to Tenant on weekdays upon the request of Tenant delivered to Landlord before 2:00 p.m. and on Sundays and Holidays upon request of Tenant delivered to Landlord before 2:00 p.m. on the Business Day preceding such extra usage, and Tenant shall pay to Landlord the cost of such services at the Building’s then-prevailing rates then charged by Landlord for the Building within thirty (30) days after Landlord has delivered to Tenant an invoice therefor.  The costs incurred by Landlord in providing after-hours HVAC service to Tenant shall include Landlord’s actual costs (without markup) for electricity, water, sewage, water treatment, labor, metering, filtering, and maintenance reasonably allocated by Landlord to providing such service.  “Holidays” means New Year’s Day, Martin Luther King Jr. Day, President’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

 

(b) Excess Utility Use.  Landlord shall not be required to furnish electrical current for equipment that requires more than 110 volts or other equipment whose electrical energy consumption exceeds normal office usage.  If Tenant’s requirements for or consumption of electricity exceed the electricity to be provided by Landlord as described in Section 7(a) above, Landlord shall, at Tenant’s expense, make reasonable efforts to supply such service through the then-existing feeders and risers serving the Building and the Premises, and Tenant shall pay to Landlord the cost of such service within thirty (30) days after Landlord has delivered to Tenant an invoice therefor, together with reasonable supporting evidence.  Landlord may determine the amount of such additional consumption and potential consumption by any verifiable method, including installation of a separate meter in the Premises installed, maintained, and read by Landlord, at Tenant’s expense.  Tenant shall not install any

  

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electrical equipment requiring special wiring or requiring voltage in excess of 110 volts unless approved in advance by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.  Tenant shall not install any electrical equipment requiring voltage in excess of Building capacity unless approved in advance by Landlord, which approval may be withheld in Landlord’s sole discretion.  The use of electricity in the Premises shall not exceed the capacity of existing feeders and risers to, or wiring in, the Premises.  Any risers or wiring required to meet Tenant’s excess electrical requirements shall, upon Tenant’s written request, be installed by Landlord, at Tenant’s cost, if, in Landlord’s judgment, the same are necessary and shall not cause permanent damage to the Building or the Premises, cause or create a dangerous or hazardous condition, entail excessive or unreasonable alterations, repairs, or expenses, or interfere with or disturb other tenants of the Building.  If Tenant uses machines or equipment in the Premises that affect the temperature otherwise maintained by the air-conditioning system or otherwise overload any utility, Landlord may install supplemental air-conditioning units or other supplemental equipment in the Premises, and the cost thereof, including the cost of installation, operation, use, and maintenance, in each case, shall be paid by Tenant to Landlord within thirty (30) days after Landlord has delivered to Tenant an invoice therefor, together with reasonable supporting evidence.

 

(c) Landlord’s Repairs.  Landlord shall repair and maintain in good order, repair and condition, the cost of which shall be included in Operating Costs to the extent permitted in Section 4 above, the Building’s Structure, the Building’s Systems and the common areas of the Building and Project (but not including any non-base building facilities installed in the Premises); provided, however, to the extent such maintenance and repairs are caused by the willful act, neglect, fault of or omission of any duty by any Tenant Party, Tenant shall pay to Landlord as additional Rent, the reasonable cost of such maintenance and repairs, which payment shall be made by Tenant to Landlord within thirty (30) days after Tenant’s receipt of an invoice therefor, together with reasonable supporting evidence.  Except as set forth in Section 7(d), below, there shall be no abatement of Rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from the making or failing to make any repairs, alterations or improvements in or to any portion of the Project.  Tenant hereby waives and releases any right to make repairs at Landlord’s expense under any Law now or hereinafter in effect.

 

(d) Restoration of Services; Abatement.  Landlord shall use reasonable efforts to restore any service required of it that becomes unavailable; however, such unavailability shall not render Landlord liable for any damages caused thereby, be a constructive eviction of Tenant, constitute a breach of any implied warranty, constitute a breach of any covenant (provided Landlord uses such reasonable efforts), or, except as provided in the next sentence, entitle Tenant to any abatement of Tenant’s obligations hereunder.  If, however, Tenant is prevented from using the Premises because of the unavailability of any such service for a period of five (5) consecutive Business Days following Landlord’s receipt from Tenant of a written notice regarding such unavailability, the restoration of which is within Landlord’s reasonable control, and such unavailability was not caused by a Tenant Party, a governmental directive or cause beyond Landlord’s control, then Tenant shall, as its exclusive remedy, be entitled to a reasonable abatement of Rent for each consecutive day (after such five Business Day period) that Tenant is so prevented from using the Premises.

 

8. Improvements; Alterations; Repairs; Maintenance.

 

(a) Improvements; Alterations.  With the exception of the initial Tenant Improvements described in Exhibit D attached hereto, all alterations, improvements, betterments and other physical additions in or to the Premises (collectively, “Alterations”) shall be installed at Tenant’s expense only in accordance with plans and specifications that have been previously submitted to and approved by Landlord, which approval shall be governed by the provisions set forth in this Section 8(a), and otherwise in accordance with the provisions hereof, except with respect to the Tenant Improvements (as defined in the Tenant Work Letter attached hereto as Exhibit D), which shall be governed by the terms and conditions thereof, and Cables (as defined below), which shall be installed, maintained, replaced and removed in accordance with the terms and conditions of Section 25 below.  Except as provided in this Lease, no Alterations may be made without Landlord’s prior written consent to such Alterations and the plans and specifications, and the construction means and methods, therefor, which shall not be unreasonably withheld, conditioned or delayed; however, Landlord may withhold its consent to any alteration or addition that would adversely affect (in the reasonable discretion of Landlord) the (1) Building’s Structure or the Building’s Systems (including the Building’s restrooms or mechanical rooms), (2) exterior appearance of the Building, (3) appearance of the Common Areas or elevator lobby areas, or (4) provision of services to other occupants of the Building.  Notwithstanding the foregoing, Tenant shall be permitted to make Alterations following

  

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ten (10) Business Days’ notice to Landlord, but without Landlord’s prior consent, to the extent that such Alterations do not (i) adversely affect the systems and equipment of the Building, exterior appearance of the Building, or structural aspects of the Building, (ii) adversely affect the value of the Premises or Building, (iii) require a building or construction permit, or (iv) cost more than Thirty Thousand and 00/100 Dollars ($30,000.00) for a particular job of work.  If Landlord consents to Alterations, Landlord may impose such conditions with respect thereto as are reasonably appropriate, including (A) requiring Tenant to furnish (i) Landlord with security for the payment of all costs to be incurred in connection with such work, (ii) insurance against liabilities that may arise out of such work, and (iii) plans and specifications, and permits for such work, and (B) requiring Tenant to remove any and all such Alterations (including fixtures) in or to the Premises prior to the expiration or earlier termination of this Lease at Tenant’s sole cost and expense provided, however, that if Landlord intends to require Tenant to remove any or all Alterations as described herein, Landlord shall so notify Tenant at the same time that Landlord consents to the Alterations.  Tenant’s plans and specifications and construction means and methods shall be subject to Landlord’s written approval.  In the event that, at the time Tenant requests Landlord's consent to any Alteration, Tenant also requests in writing a determination of whether Landlord will require restoration and/or removal of the particular Alterations or portions thereof for which consent is being requested upon expiration or any earlier termination of this Lease, Landlord shall so notify Tenant along with Landlord's consent (if such consent is given).  Furthermore, with respect to all other Alterations for which Tenant did not seek Landlord’s determination regarding removal as set forth in the immediately preceding sentence, such Alterations shall be subject to removal and restoration in accordance with the provisions of Section 20(b) below.  Tenant shall furnish to Landlord any documents and information requested by Landlord in connection with the exercise of its rights hereunder.  Landlord may hire outside consultants to review such documents and information furnished to Landlord and Tenant shall reimburse Landlord for the reasonable cost thereof, including reasonable attorneys’ fees, within thirty (30) days after receipt from Landlord of an invoice therefor, together with reasonable supporting evidence.  Tenant shall not paint or install lighting or decorations, signs, window or door lettering, or advertising media of any type visible from the exterior of the Premises without the prior written consent of Landlord, which consent may be withheld in Landlord’s reasonable discretion.  All Alterations shall be constructed, maintained, and used by Tenant, at its risk and expense, in accordance with all Laws, the Underlying Documents and the Landlord’s then current contractor rules and regulations; Landlord’s consent to or approval of any Alterations (or the plans therefor) shall not constitute a representation or warranty by Landlord, nor Landlord’s acceptance, that the same comply with sound architectural and/or engineering practices, or with all applicable Laws or with the Underlying Documents, and Tenant shall be solely responsible for ensuring all such compliance.  If, as a result of Tenant’s use of the Premises or the making of any Alterations to the Premises and/or installation of any Tenant Improvements pursuant to this Section 8(a), Section 25 below, or the Tenant Work Letter, respectively, any other alterations, improvements, betterments or other physical additions shall be required to be made to any part of the Premises or the Project to comply with the requirements of any applicable Law, including the requirements of the Disabilities Act (as defined below), the Occupational Safety & Health Administration (OSHA), or the orders or requirements imposed by any health officer, fire marshal or building inspector, or the Underlying Documents, Tenant shall be solely responsible for the costs incurred to effect such compliance.  If the required alteration, improvement, betterment or other physical addition will not affect the Building’s Structure or the Building’s Systems, Tenant shall perform such work subject to this Section 8(a).  If the required alteration, improvement, betterment or other physical addition will affect the Building’s Structure or the Building’s Systems, Landlord shall have the right to perform such work and Tenant shall reimburse Landlord in an amount equal to Landlord’s costs plus five percent (5%) for overhead, which shall be payable within thirty (30) days of Landlord’s receipt of any invoice therefor, together with reasonable supporting evidence.

 

(b) Repairs; Maintenance.  Tenant shall at its sole expense maintain the Premises in a clean, safe, and operable condition, and shall not permit or allow to remain any waste or damage to any portion of the Premises.  Additionally, Tenant, at its sole expense, shall repair, replace and maintain in good condition and in accordance with all Laws, the Underlying Documents and the equipment manufacturer’s suggested service programs, all portions of the Premises, Tenant’s Off-Premises Equipment and all areas, improvements and systems exclusively serving the Premises.  Tenant shall repair or replace, subject to Landlord’s direction and supervision, any damage to the Building caused by a Tenant Party.  If Tenant fails to make such repairs or replacements within fifteen (15) days after the occurrence of such damage, then Landlord may make the same at Tenant’s cost.  If any such damage occurs outside the Premises, then Landlord may elect to repair such damage at Tenant’s expense using Landlord’s usual contractor for such work and at competitive rates, rather than having Tenant repair such damage.  The cost of all maintenance, repair or replacement work performed by Landlord under this Section 8 shall be paid by Tenant to Landlord within thirty (30) days after Landlord has invoiced Tenant therefor, together with reasonable supporting evidence.

  

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(c) Performance of Work.  All work described in this Section 8 shall be performed only by Landlord’s usual contractor for such work at competitive rates or by contractors and subcontractors approved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.  Tenant shall cause all contractors and subcontractors to procure and maintain insurance coverage naming Landlord, Landlord’s property management company, Landlord’s asset management company and such other persons or entities as Landlord may reasonably designate in writing to Tenant from time to time as additional insureds using ISO additional insured endorsement CG 20 11 (or a substitute satisfactory to Landlord providing equivalent coverage), and under the commercial umbrella, if any, against such risks, in such amounts, and with such companies as Landlord may reasonably require.  Tenant shall provide Landlord with the identities, mailing addresses and telephone numbers of all persons performing work or supplying materials prior to beginning such construction, and Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable Laws.  All such work shall be performed in accordance with all Laws, the Underlying Documents and in a good and workmanlike manner so as not to damage the Building (including the Premises, the Building’s Structure and the Building’s Systems).  All such work that may affect the Building’s Structure or the Building’s Systems must be approved by the Building’s engineer of record, at Tenant’s expense and, at Landlord’s election, must be performed by Landlord’s usual contractor for such work at competitive rates.  All work affecting the roof of the Building must be performed by Landlord’s roofing contractor at competitive rates and no such work will be permitted if it would void or reduce the warranty on the roof.

 

(d) Mechanic’s Liens.  All work performed, materials furnished, or obligations incurred by or at the request of a Tenant Party shall be deemed authorized and ordered by Tenant only, and Tenant shall not permit any mechanic’s liens to be filed against the Premises or the Project in connection therewith.  Upon completion of any such work, Tenant shall deliver to Landlord final lien waivers from all contractors, subcontractors and materialmen who performed such work.  If such a lien is filed, then Tenant shall, within ten (10) days after Landlord has delivered notice of the filing thereof to Tenant (or such earlier time period as may be necessary to prevent the forfeiture of the Premises, the Project or any interest of Landlord therein or the imposition of a civil or criminal fine with respect thereto), either (1) pay the amount of the lien and cause the lien to be released of record, or (2) diligently contest such lien and deliver to Landlord a bond or other security reasonably 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 thirty (30) days after Landlord has invoiced Tenant therefor, together with reasonable supporting evidence.  Landlord and Tenant acknowledge and agree that their relationship is and shall be solely that of “landlord-tenant” (thereby excluding a relationship of “owner-contractor,” “owner-agent” or other similar relationships).  Accordingly, all materialmen, contractors, artisans, mechanics, laborers and any other persons now or hereafter contracting with Tenant, any contractor or subcontractor of Tenant or with any other Tenant Party for the furnishing of any labor, services, materials, supplies or equipment with respect to any portion of the Premises, at any time from the date hereof until the end of the Term, are hereby charged with notice that they look exclusively to Tenant to obtain payment for same.  Nothing herein shall be deemed a consent by Landlord to any liens being placed upon the Premises, the Project or Landlord’s interest therein due to any work performed by or for Tenant or deemed to give any contractor or subcontractor or materialman any right or interest in any funds held by Landlord to reimburse Tenant for any portion of the cost of such work.  Tenant shall defend, indemnify and hold harmless Landlord and its agents and representatives from and against all claims, demands, causes of action, suits, judgments, damages and expenses (including attorneys’ fees) in any way arising from or relating to the failure by any Tenant Party to pay for any work performed, materials furnished, or obligations incurred by or at the request of a Tenant Party.  This indemnity provision shall survive termination or expiration of this Lease.

 

9. Use.  Tenant shall use the Premises only for the Permitted Use and shall comply with, and cause each other Tenant Party to comply with, all Laws and Underlying Documents relating to the use, condition, access to, and occupancy of the Premises and will not commit waste, overload the Building’s Structure or the Building’s Systems or subject the Premises to use that would damage the Premises.  The population density within the Premises as a whole shall at no time exceed the population density shown on the Work Letter R2 attached hereto as Schedule 1 to Exhibit D.  Tenant shall not conduct second or third shift operations within the Premises; however, Tenant may use the Premises after normal business hours, so long as Tenant is not generally conducting business from the Premises after normal business hours.  Notwithstanding anything in this Lease to the contrary, as between Landlord and Tenant, (a) Tenant shall bear the risk of complying with Title III of the Americans With Disabilities Act of 1990, any Laws governing handicapped access or architectural barriers, and all rules, regulations, and guidelines

  

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promulgated under such Laws, as amended from time to time (the “Disabilities Acts”) in the Premises, and (b) Landlord shall bear the risk of complying with the Disabilities Acts in the Common Areas of the Building, other than compliance that is necessitated by the (1) use of the Premises for other than the Permitted Use, (2) as a result of any Alterations made by or on behalf of a Tenant Party (all of which risk and responsibility shall be borne by Tenant) or (3) as a result of any trade fixtures, furniture, equipment or other personal property to be installed in the Premises.  The Premises shall not be used for any use that is disreputable, creates extraordinary fire or other hazards, or results in an increased rate of insurance on the Building or its contents, or for the storage of any Hazardous Materials (other than typical office supplies [e.g., photocopier toner] and then only in compliance with all Laws).  Tenant shall not use any substantial portion of the Premises for a “call center,” any other telemarketing use, or any credit processing use.  If, because of a Tenant Party’s acts or because Tenant vacates the Premises, the rate of insurance on the Building or its contents increases, then such acts shall be an Event of Default, Tenant shall pay to Landlord the amount of such increase within thirty (30) days after Tenant’s receipt of an invoice therefor, together with reasonable supporting evidence, and acceptance of such payment shall not waive any of Landlord’s other rights.  Tenant shall conduct its business and control each other Tenant Party so as not to create any nuisance or unreasonably interfere with other tenants or Landlord in its management of the Building.

 

10. Assignment and Subletting.

 

(a) Transfers.  Except as provided in Section 10(h) below, Tenant shall not, without the prior written consent of Landlord which shall not be unreasonably withheld, conditioned or delayed as set forth in Section 10(b), below, (1) assign, transfer, or encumber this Lease or any estate or interest herein, whether directly, indirectly or by operation of law, (2) permit any other entity to become Tenant hereunder by merger, consolidation, or other reorganization, (3) if Tenant is an entity other than a corporation whose stock is publicly traded, permit the transfer of an ownership interest in Tenant so as to result in a change in the current control of Tenant, (4) sublet any portion of the Premises, (5) grant any license, concession, or other right of occupancy of any portion of the Premises, or (6) permit the use of the Premises by any parties other than Tenant (any of the events listed in clauses (1) through (6) of this Section 10(a) above being a “Transfer”).

 

(b) Consent Standards.  Landlord shall not unreasonably withhold its consent to any assignment or subletting of the Premises, provided that (1) the proposed transferee (A) is creditworthy, (B) has a good reputation in the business community, (C) will use the Premises solely for the Permitted Use (thus, excluding, without limitation, uses for credit processing and telemarketing) and will not use the Premises in any manner that would unreasonably conflict with any exclusive use agreement or other similar agreement entered into by Landlord with any other tenant of the Building or Project, (D) will not use the Premises, Building or Project in a manner that would materially increase the pedestrian or vehicular traffic to the Premises, Building or Project, (E) is not a governmental entity, or subdivision or agency thereof or person that is or may be entitled to claim sovereign immunity, (F) is not a person or entity with whom Landlord is then, or has been within the six-month period prior to the time Tenant seeks to enter into such assignment or subletting, negotiating in writing to lease space in the Building or Project or any Affiliate of any such person or entity (provided, however, the terms of this item (F) shall only apply to the extent that Landlord has reasonably comparable space in the Project available to lease to such transferee), and (G) has been approved by all of Landlord’s Mortgagees (as defined below) having the right to approve the proposed transferee, and (2) payment for the Transfer is not determined in whole or in part based upon the net income or profits of the proposed transferee; otherwise, Landlord may withhold its consent in its sole discretion.  Additionally, Landlord may withhold its consent in its sole discretion to any proposed Transfer if any uncured Event of Default by Tenant then exists.

 

(c) Request for Consent.  If Tenant requests Landlord’s consent to a Transfer, then, at least thirty (30) days prior to the effective date of the proposed Transfer, Tenant shall provide Landlord with a written description of all terms and conditions of the proposed Transfer, copies of the proposed documentation, and the following information about the proposed transferee:  name and address; reasonably satisfactory information about its business and business history; its proposed use of the Premises; banking, financial, and other credit information; general references sufficient to enable Landlord to determine the proposed transferee’s creditworthiness and character and such additional information as Landlord may reasonably request.  Concurrently with Tenant’s notice of any request for consent to a Transfer, Tenant shall pay to Landlord a fee of One Thousand Dollars ($1,000.00) to defray Landlord’s expenses in reviewing such request, and Tenant shall also reimburse Landlord within thirty (30) days after Landlord has delivered to Tenant an invoice therefor, together with reasonable supporting documentation for its reasonable attorneys’ fees incurred in connection with considering any request for consent to a Transfer.

  

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(d) Conditions to Consent.  If Landlord consents to a proposed Transfer, then the proposed transferee shall deliver to Landlord a written agreement whereby it expressly assumes Tenant’s obligations hereunder; however, any transferee of less than all of the space in the Premises shall be liable only for obligations under this Lease that are properly allocable to the space subject to the Transfer for the period of the Transfer.  No Transfer shall release Tenant from its obligations under this Lease, but rather Tenant and its transferee shall be jointly and severally liable therefor; provided, however, that if Tenant is nonetheless deemed to be a surety by remaining liable hereunder, Tenant hereby waives all applicable suretyship defenses.  Landlord’s consent to any Transfer shall not waive Landlord’s rights as to any subsequent Transfers.  If an uncured Event of Default occurs while the Premises or any part thereof are subject to a Transfer, then Landlord, in addition to its other remedies, may collect directly from such transferee all rents becoming due to Tenant and apply such rents against Rent.  Tenant authorizes its transferees to make payments of rent directly to Landlord upon receipt of notice from Landlord to do so following the occurrence of an Event of Default hereunder.  Tenant shall pay for the cost of any demising walls or other improvements necessitated by a proposed subletting or assignment.

 

(e) Attornment by Subtenants.  Each sublease by Tenant hereunder shall be subject and subordinate to this Lease and to the matters to which this Lease is or shall be subordinate, and each subtenant by entering into a sublease is deemed to have agreed that in the event of termination, reentry or dispossession by Landlord under this Lease, Landlord may, at its option, take over all of the right, title and interest of Tenant, as sublandlord, under such sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord pursuant to the then-executory provisions of such sublease, except that Landlord shall not be (1) liable for any previous act or omission of Tenant under such sublease, (2) subject to any counterclaim, offset or defense that such subtenant might have against Tenant, (3) bound by any previous modification of such sublease not approved by Landlord or by any rent or additional rent or advance rent which such subtenant might have paid for more than the current month to Tenant, and all such rent shall remain due and owing, notwithstanding such advance payment, (4) bound by any security or advance rental deposit made by such subtenant that is not delivered or paid over to Landlord and with respect to which such subtenant shall look solely to Tenant for refund or reimbursement, or (5) obligated to perform any work in the subleased space or to prepare it for occupancy, and in connection with such attornment, the subtenant shall execute and deliver to Landlord any instruments Landlord may reasonably request to evidence and confirm such attornment.  Each subtenant or licensee of Tenant shall be deemed, automatically upon and as a condition of its occupying or using the Premises or any part thereof, to have agreed to be bound by the terms and conditions set forth in this Section 10(e).  The provisions of this Section 10(e) shall be self-operative, and no further instrument shall be required to give effect to this provision.

 

(f) Cancellation.  Landlord may, within twenty (20) days after submission of Tenant’s written request for Landlord’s consent to an assignment or subletting, cancel this Lease as to the portion of the Premises proposed to be sublet or assigned as of the date the proposed Transfer is to be effective.  If Landlord cancels this Lease as to any portion of the Premises, then this Lease shall cease for such portion of the Premises and Tenant shall pay to Landlord all Rent accrued through the cancellation date relating to the portion of the Premises covered by the proposed Transfer.  Thereafter, Landlord may lease such portion of the Premises to the prospective transferee (or to any other person) without liability to Tenant.

 

(g) Additional Compensation.  At Landlord’s option, Tenant shall pay to Landlord, within thirty (30) days after receipt thereof, fifty percent (50%) of the excess of (1) all compensation received by Tenant for a Transfer less the actual out-of-pocket costs reasonably incurred by Tenant with unaffiliated third parties (i.e., brokerage commissions and tenant finish work) and other economic concessions or services provided to the transferee, in connection with such Transfer over (2) the Rent allocable to the portion of the Premises covered thereby.  Notwithstanding the foregoing, Landlord shall not have any claim to rental or sale proceeds related to Tenant’s furniture.

 

(h) Permitted Transfers.  Notwithstanding Section 10(a) above, Tenant may Transfer all or part of its interest in this Lease or all or part of the Premises (each a “Permitted Transfer”) to the following types of entities (each a “Permitted Transferee”) without the written consent of Landlord so long as (1) Tenant’s obligations hereunder are assumed by such entity; and (2) the Tangible Net Worth (as defined below) of such entity is not less than the Tangible Net Worth of Tenant as of the date hereof:

 

(1) an Affiliate of Tenant;

  

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(2) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity in which or with which Tenant, or its corporate successors or assigns, is merged or consolidated, in accordance with applicable statutory provisions governing merger and consolidation of business entities; or

 

(3) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity acquiring all or substantially all of Tenant’s assets.

 

Tenant shall promptly notify Landlord of any such Permitted Transfer.  Tenant shall remain liable for the performance of all of the obligations of Tenant (unless Tenant no longer exists because of a merger, consolidation, or acquisition) hereunder, and the Permitted Transferee shall expressly assume in a writing for the benefit of Landlord in a commercially reasonable instrument executed and delivered to Landlord at least ten (10) days prior to the effective date of the assignment, all of the obligations of Tenant hereunder.  Additionally, the Permitted Transferee shall comply with all of the terms and conditions of this Lease, including the Permitted Use, and the use of the Premises by the Permitted Transferee may not violate any other agreements affecting the Premises, the Building or the Project, including the Underlying Documents, Landlord or other tenants of the Building or the Project.  No later than thirty (30) days after the effective date of any Permitted Transfer, Tenant agrees to furnish Landlord with (i) copies of the instrument effecting any of the foregoing Transfers, (ii) documentation establishing Tenant’s satisfaction of the requirements set forth above applicable to any such Transfer, and (iii) evidence of insurance as required under this Lease with respect to the Permitted Transferee.  The occurrence of a Permitted Transfer shall not waive Landlord’s rights as to any subsequent Transfers.  “Tangible Net Worth” means the excess of total assets over total liabilities, in each case as determined in accordance with generally accepted accounting principles consistently applied (“GAAP”), excluding, however, from the determination of total assets all assets that would be classified as intangible assets under GAAP, including goodwill, licenses, patents, trademarks, trade names, copyrights, and franchises.  Any subsequent Transfer by a Permitted Transferee shall be subject to the terms of this Section 10.

 

11. Insurance; Waivers; Subrogation; Indemnity

 

(a) Tenant’s Insurance.  Effective as of the earlier of (1) the date Tenant first enters upon or occupies the Premises, or (2) the Commencement Date, and continuing throughout the Term, Tenant shall maintain the following insurance policies:  (A) commercial general liability insurance on the current ISO CG 00 01 12 04 occurrence form or equivalent acceptable to Landlord in amounts of Three Million Dollars ($3,000,000.00) per occurrence, Three Million Dollars ($3,000,000.00) personal injury and advertising injury, Three Million Dollars ($3,000,000.00) products-completed operations aggregate and Three Million Dollars ($3,000,000.00) general aggregate (which shall apply separately to the Premises) with defense costs provided in addition to policy limits, insuring Tenant, as well as Landlord (including both Talon Portfolio Services, LLC, a Washington limited liability company, as general receiver, and W2007 Seattle Office 1111 Third Avenue Realty, LLC, a Delaware limited liability company), Landlord’s property management company, Landlord’s asset management company and, if requested in writing by Landlord, any of Landlord’s Mortgagees, and such other persons and entities as Landlord may from time to time designate (collectively, the “Additional Insureds”) thereunder and under Tenant’s commercial excess or umbrella liability policy, if any, using ISO additional insured endorsement CG 20 11 (or a substitute acceptable to Landlord providing equivalent coverage) against all liability for personal injury, bodily injury (including mental anguish and death) or property damage or destruction (including loss of use thereof) arising from the use and occupancy of the Premises, the Building and all areas appurtenant thereto, including the Garage and (without implying any consent by Landlord to the installation thereof) the installation, operation, maintenance, repair or removal of Tenant’s Off Premises Equipment, (B) primary “special form” perils property damage insurance under ISO special clauses of loss form (ISO form CP 10 30) covering the full value of all alterations, additions and improvements and betterments in the Premises, including the Tenant Improvements and other Alterations, naming Landlord and each of Landlord’s Mortgagees as additional loss payees as their interests may appear, (C) primary “special form” perils property damage insurance under ISO special clauses of loss form (ISO form CP 10 30) covering the full value of all furniture, trade fixtures, electronic data and media, business records, and personal property (including property of Tenant or others) in the Premises or otherwise placed in the Project by or on behalf of a Tenant Party (including Tenant’s Off Premises Equipment), without deduction for depreciation, (D) workers’ compensation insurance as required by the State of Washington, together with employers’ liability insurance of at least One Million Dollars ($1,000,000.00) for each accident for bodily injury

  

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by accident, One Million Dollars ($1,000,000.00) each employee for bodily injury by disease, and One Million Dollars ($1,000,000.00) policy limit for bodily injury by disease, (E) business income with extra expense insurance (ISO form CP 00 30, or equivalent acceptable to Landlord) in an amount reasonably acceptable to Landlord, and (F) comprehensive automobile insurance, and if necessary, commercial umbrella insurance, with a limit of not less than Three Million Dollars ($3,000,000.00) each accident, which automobile insurance shall cover liability arising out of any automobile (including owned, hired and non-owned automobiles),insuring the Additional Insureds as additional insureds thereunder.  All of Tenant’s insurance shall be primary insurance as to all claims thereunder and provide that any insurance carried by any of the Additional Insureds is excess over, and non-contributing with, any insurance of Tenant.  Tenant shall furnish to Landlord certificates of such insurance and such other evidence satisfactory to Landlord of the maintenance of all insurance coverages required hereunder (including copies of endorsements) at least ten (10) days prior to the earlier of the Commencement Date or the date Tenant first enters upon or occupies the Premises, and at least fifteen (15) days prior to each renewal of said insurance (and such liability insurance certificates or other evidence shall include an endorsement or policy excerpt showing that Tenant’s coverage is primary and non-contributing with respect to any insurance afforded to any of the Additional Insureds).  Tenant shall obtain a written obligation on the part of each insurance company to endeavor to notify Landlord and each of Landlord’s Mortgagees at least forty-five (45) days before cancellation or material change of any such insurance policies (ten [10] days in the event of nonpayment of premiums).  Tenant shall carry and maintain during the Term, at its expense such increased amounts of insurance required to be carried under this Section 11(a), and such other types and amounts of insurance covering the Premises and Tenant’s operation therein, as may be reasonably requested by Landlord from time to time, but not in excess of the amounts and types of insurance then being required by landlords of the Comparison Buildings.  If the use or occupancy of the Premises includes any activity or matter that is or may be excluded from coverage under a commercial general liability policy (e.g., the sale, service or consumption of alcoholic beverages), Tenant shall obtain such endorsements to the commercial general liability policy or otherwise obtain insurance to insure all liability arising from such activity or matter in such amounts as Landlord may reasonably require.  All such insurance policies shall be in form, and issued by companies with an A.M. Best rating of A-VII or better, reasonably satisfactory to Landlord.  If Tenant fails to comply with the foregoing insurance requirements or to deliver to Landlord the certificates or evidence of coverage required herein within five business days after Landlord’s written request, Landlord, in addition to any other remedy available pursuant to this Lease or otherwise, may, but shall not be obligated to, obtain such insurance and Tenant shall pay to Landlord within thirty (30) days after Tenant’s receipt of an invoice from Landlord, together with reasonable supporting evidence, the premium costs thereof, plus an administrative fee of five percent (5%) of such cost.

 

(b) Landlord’s Insurance.  Throughout the Term, Landlord shall maintain, as a minimum, the following insurance policies:  (1) property insurance for at least ninety percent (90%) of the Building’s replacement value (excluding property required to be insured by Tenant and the costs of excavation, foundations, underground utilities and footings), less a commercially reasonable deductible and/or self-insured retention if Landlord so chooses, and (2) commercial general liability insurance in an amount of not less than Three Million Dollars ($3,000,000.00) general aggregate for damages because of personal injury, bodily injury or death, or property damages or destruction (including loss of use thereof).  Landlord may, but is not obligated to, maintain such other insurance and additional coverages as it may deem appropriate or as required by any of Landlord’s Mortgagees.  The cost of all insurance carried by Landlord with respect to the Project shall be included in Operating Costs.  The foregoing insurance policies and any other insurance carried by Landlord shall be for the sole benefit of Landlord and under Landlord’s sole control, and Tenant shall have no right or claim to any proceeds thereof or any other rights thereunder.

 

(c) No Subrogation; Waiver of Property Claims.  The following waivers in this Section 11(c) are intended to be cumulative, rather than mutually exclusive.

 

(1) Policies Other than Property Insurance.  Tenant waives all rights against the Additional Insureds for recovery of damages occurring to the extent those damages are covered under Tenant’s commercial general liability, automobile liability, umbrella/excess liability or any other insurance policies carried by Tenant related to the Project, the Premises or this Lease (excluding Tenant’s property insurance policy, which is covered in Section 11(c)(2) below), or if Tenant fails to carry any of such insurance required under this Lease, would ordinarily have been covered by the required insurance.  If any such policy does not allow Tenant to waive rights of recovery against others prior to a loss, Tenant shall obtain an endorsement from its insurance carrier waiving the carrier’s rights of recovery under subrogation or otherwise against the Additional Insureds.

  

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(2) Property Insurance Policies.  Each of Landlord and Tenant waives any claim it might have against the other (and in the case of Tenant’s waiver, against the other Additional Insureds) for any damage to, or theft, destruction, loss, or loss of use of, any property, to the extent the same is insured against under any property insurance policies of the types described in Section 11(a) above that cover the Project, the Premises, Landlord’s or Tenant’s fixtures, personal property, leasehold improvements, or business (or if the insurance required under this Lease had been carried, would have been insured against), regardless of whether the negligence of the other party caused such loss or damage.  Additionally, Tenant waives any claim it may have against the Additional Insureds for any loss to the extent such loss or damage is caused by a terrorist act.  Each party shall cause its insurance carrier to endorse all applicable policies waiving the carrier’s rights of recovery under subrogation or otherwise against the other party as provided hereinabove.  For the purposes of this Section 11(c)(2), any deductible with respect to a party’s property insurance shall be deemed covered by, and recoverable by such party under, valid and collectible policies of insurance.

 

(d) Waiver.  Tenant agrees that Landlord Parties shall not be liable for, and are hereby released from any responsibility for, any damage to person or property (or resulting from the loss of use thereof) that is sustained by any Tenant Party or any person claiming by, through or under any Tenant Party, including any such damage caused by any active or passive act, omission or neglect of any Landlord Party or by any act or omission for which liability without fault or strict liability may be imposed, except only, with respect to Landlord, (1) to the extent such damage is caused by the negligence or willful misconduct of any Landlord Party and the repair of such damage is not for any reason (other than Tenant’s failure to carry insurance required under Section 11(a) above) covered by the insurance required to be carried by Tenant under this Lease, or (2) to the extent such limitation on liability is prohibited by applicable Law.  Nothing in this Section 11(d) shall limit the provisions of Section 11(c) above or Section 24(b) below.

 

(e) Indemnities.  Subject to the limitations set forth in this Section 11(e) below, Tenant shall defend, indemnify, and hold harmless the Landlord Parties from and against all claims, losses, demands, liabilities, actions, penalties, judgments, damages, costs and expenses (including reasonable attorneys’ fees) (collectively, “Claims”) suffered or imposed upon or against any Landlord Party arising from or in connection with (1) any act, omission or negligence of Tenant or any person claiming by, through or under any Tenant Party, (2) occurring in the Premises, or (3) arising out of the installation, operation, maintenance, repair or removal of any property of any Tenant Party located in or about the Project, including Tenant’s Off-Premises Equipment, if any, and (4) any breach by Tenant of any representation, covenant or other term contained in this Lease, whether occurring before, during or after the expiration of the Term.  The foregoing indemnity is intended to apply regardless of any active or passive negligence or fault of the Landlord Parties, even when Landlord or its representatives and agents are jointly, comparatively, contributively, or concurrently negligent with Tenant, and regardless of whether liability without fault or strict liability may be imposed upon the Landlord Parties; however, with respect to any Landlord Party, Tenant’s obligations hereunder shall not apply (i) to the extent any Claim arises from the gross negligence or willful misconduct of any Landlord Party and is not for any reason (other than Tenant’s failure to carry the insurance required under Section 11(a) above) paid for by the insurance required to be carried by Tenant hereunder, or (ii) to the extent such obligations are prohibited by applicable Law.  Notwithstanding the foregoing, in the event of the concurrent negligence of any of the Tenant Parties on the one hand and that of any of the Landlord Parties on the other hand, which concurrent negligence results in injury or damage to persons or property and relates to the construction, alteration, repair, addition to, subtraction from, improvement to or maintenance of the Premises, Common Areas or any other portion of the Project, Tenant’s obligation to indemnify the Landlord Parties as set forth in this Section 11(e) shall be limited to the extent of Tenant’s negligence, and that of the Tenant Parties, including Tenant’s proportional share of costs, attorneys’ fees, and expenses incurred in connection with any Claims arising from such injury or damage.  Landlord shall defend, indemnify, and hold harmless Tenant from and against all Claims incurred by Tenant in Common Areas to the extent caused by the negligence or willful misconduct of a Landlord Party and such Claims are not for any reason (other than Tenant’s failure to carry the insurance required under Section 11(a) above) paid for by the insurance required to be carried by Tenant hereunder or otherwise covered by Tenant’s indemnity obligation set forth in this Section 11(e).  The indemnities set forth in this Lease shall survive termination or expiration of this Lease and shall not terminate or be waived, diminished or affected in any manner by any abatement or apportionment of Rent under any provision of this Lease.  If any proceeding is filed for which indemnity is required hereunder, the indemnifying party agrees, upon request therefor, to defend the indemnified party in such proceeding at its sole cost utilizing counsel satisfactory to the indemnified party.  The indemnities set forth herein are intended to specifically cover actions brought by the indemnifying party’s own

  

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employees.  Such indemnities are specifically and expressly intended to constitute waivers by the indemnifying party of its immunity, if any, under Washington’s Industrial Insurance Act (Title 51 RCW, as amended, and under any substitute or replacement statute), to the extent necessary to provide the other party with a full and complete indemnity from claims made by the indemnifying party and its employees, to the extent provided herein.  This waiver and agreement was specifically negotiated by Landlord and Tenant and is solely for the benefit of Landlord and Tenant and their successors and assigns and is not intended as a waiver of Tenant’s rights of immunity under said industrial insurance for any other purpose.

 

12. Subordination; Attornment; Notice to Landlord’s Mortgagee.

 

(a) Subordination.  This Lease shall be subordinate to any deed of trust, mortgage, or other security instrument (each, a “Mortgage”), or any ground lease, master lease, or primary lease (each, a “Primary Lease”), that now or hereafter covers all or any part of the Premises (the mortgagee under any such Mortgage, beneficiary under any such deed of trust or other security instrument, or the lessor under any such Primary Lease is referred to herein as a “Landlord’s Mortgagee”), provided that upon any foreclosure of any such Mortgage or delivery of a deed in lieu thereof, or upon any termination of a Primary Lease, Landlord’s successor shall agree to accept this Lease and not disturb Tenant’s occupancy, so long as Tenant timely pays the Rent and observes and performs the terms, covenants and provisions of this Lease to be observed or performed by Tenant.  Any Landlord’s Mortgagee may elect, at any time, unilaterally, to make this Lease superior to its Mortgage, Primary Lease, or other interest in the Premises by so notifying Tenant in writing.  The provisions of this Section 12(a) shall be self-operative and no further instrument of subordination shall be required; however, in confirmation of such subordination, Tenant shall execute and return to Landlord (or such other person designated by Landlord) within ten business (10) days after request therefor such documentation, in recordable form if required, as a Landlord’s Mortgagee may reasonably request to evidence the subordination of this Lease to such Landlord’s Mortgagee’s Mortgage or Primary Lease (including a subordination, non-disturbance and attornment agreement) or, if the Landlord’s Mortgagee so elects, the subordination of such Landlord’s Mortgagee’s Mortgage or Primary Lease to this Lease.

 

(b) Attornment.  Tenant shall attorn to any person succeeding to Landlord’s interest in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale, termination of lease, or otherwise, upon such person’s written request, and shall execute such agreements confirming such attornment as such person may reasonably request.

 

(c) Notice to Landlord’s Mortgagee.  Tenant shall not seek to enforce any remedy it may have for any default on the part of Landlord without first giving written notice by certified mail, return receipt requested, specifying the default in reasonable detail, to any Landlord’s Mortgagee whose address has been given to Tenant, and affording such Landlord’s Mortgagee a reasonable opportunity to perform Landlord’s obligations hereunder.

 

(d) Landlord’s Mortgagee’s Protection Provisions.  If a Landlord’s Mortgagee or any successor in interest thereto shall succeed to the interest of Landlord under this Lease, neither such Landlord’s Mortgagee nor any such successor in interest shall be:  (1) liable for any act or omission of any prior lessor (including Landlord); (2) bound by, or subject to any offset rights with respect to, any Rent that Tenant might have paid for more than the current month to any prior lessor (including Landlord), and all such Rent shall remain due and owing, notwithstanding such advance payment; (3) bound by any Security Deposit or advance rental deposit made by Tenant that is not delivered or paid over to such Landlord’s Mortgagee or successor in interest and with respect to which Tenant shall look solely to Landlord for refund or reimbursement; (4) bound by any termination, amendment or modification of this Lease made without such Landlord’s Mortgagee’s consent and written approval, except for those terminations, amendments and modifications permitted to be made by Landlord without such Landlord’s Mortgagee’s consent pursuant to the terms of the loan and/or lease documents between Landlord and such Landlord’s Mortgagee; (5) subject to the defenses or counterclaims that Tenant might have against any prior lessor (including Landlord); (6) subject to the credits or offsets that Tenant might have against any prior lessor (including Landlord) except for those offset rights (A) that do not pertain to any Rent that Tenant might have paid for more than the current month to any prior lessor (including Landlord), (B) that are expressly provided in this Lease, (C) that relate to periods of time following the acquisition of the Building by such Landlord’s Mortgagee or successor in interest, and (D) for which Tenant has provided written notice to such Landlord’s Mortgagee and

  

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provided such Landlord’s Mortgagee a reasonable opportunity to cure the event giving rise to such offset event; and (7) bound by any covenant to perform (including any covenant to complete) any renovation or construction in the Premises or to pay any sums to Tenant in connection therewith, in either case arising or accruing prior to the date of the conveyance of Landlord’s interest in this Lease.  Neither a Landlord’s Mortgagee nor any successor in interest thereto shall have any liability or responsibility under or pursuant to the terms of this Lease or otherwise prior to the date such Landlord’s Mortgagee or successor in interest succeeds to the interest of Landlord under this Lease or after such Landlord’s Mortgagee or successor in interest ceases to own an interest in the Project.  Nothing in this Lease shall be construed to require a Landlord’s Mortgagee or successor in interest thereto to see to the application of the proceeds of any loan, and Tenant’s agreements set forth herein shall not be impaired on account of any modification of the documents evidencing and securing any loan.

 

13. Rules and Regulations.  Tenant shall comply with the rules and regulations of the Project that are attached hereto as Exhibit C.  Landlord may, from time to time, change such rules and regulations for the safety, care, or cleanliness of the Project and related facilities, provided that such changes are applicable to all tenants of the Project, will not unreasonably interfere with Tenant’s use of the Premises, and are enforced by Landlord in a nondiscriminatory manner.  Tenant shall be responsible for the compliance with such rules and regulations by each Tenant Party (and any modification thereto of which Tenant has received notice).

 

14. Condemnation.

 

(a) Total Taking.  If the entire Building or Premises are taken by right of eminent domain or conveyed in lieu thereof (a “Taking”), this Lease shall terminate as of the date of the Taking.

 

(b) Partial Taking – Tenant’s Rights.  If any part of the Building becomes subject to a Taking and such Taking will prevent Tenant from conducting on a permanent basis its business in the Premises in a manner reasonably comparable to that conducted immediately before such Taking, then Tenant may terminate this Lease as of the date of such Taking by giving notice to Landlord within thirty (30) days after the Taking, and Basic Rent and Additional Rent shall be apportioned as of the date of such Taking.  If Tenant does not terminate this Lease, then Basic Rent and Additional Rent shall be abated on a reasonable basis as to that portion of the Premises rendered untenantable by the Taking.

 

(c) Partial Taking – Landlord’s Rights.  If any material portion, but less than all, of the Building becomes subject to a Taking, or if Landlord is required to pay any of the proceeds arising from a Taking to a Landlord’s Mortgagee, then Landlord may terminate this Lease by delivering notice thereof to Tenant within thirty (30) days after such Taking, and Basic Rent and Additional Rent shall be apportioned as of the date of such Taking.  If Landlord does not so terminate this Lease, then this Lease will continue, but if any portion of the Premises has been taken, Rent shall abate as provided in the last sentence of Section 14(b) above.

 

(d) Temporary Taking.  If all or any portion of the Premises becomes subject to a Taking for a limited period of time, this Lease shall remain in full force and effect and Tenant shall continue to perform all of the terms, conditions and covenants of this Lease, including the payment of Basic Rent, Additional Rent and all other amounts required hereunder.  If any such temporary Taking terminates prior to the expiration of the Term, Tenant shall restore the Premises as nearly as possible to the condition prior to such temporary Taking, at Tenant’s sole cost and expense.  Landlord shall be entitled to receive the entire award for any such temporary Taking, except that Tenant shall be entitled to receive the portion of such award that (1) compensates Tenant for its loss of use of the Premises within the Term and (2) reimburses Tenant for the reasonable out-of-pocket costs actually incurred by Tenant to restore the Premises as required by this Section 14(d).

 

(e) Award.  If any Taking occurs, then Landlord shall receive the entire award or other compensation for the Land, the Building, and other improvements taken; however, Tenant may separately pursue a claim (to the extent it will not reduce Landlord’s award) against the condemnor for the value of Tenant’s personal property that Tenant is entitled to remove under this Lease, moving costs, loss of business, and other claims it may have.

 

15. Fire or Other Casualty

  

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(a) Repair Estimate.  If the Premises or the Building are damaged by fire or other casualty (a “Casualty”), Landlord shall, within ninety (90) days after such Casualty, deliver to Tenant a good faith estimate (the “Damage Notice”) of the time needed to repair the damage caused by such Casualty.

 

(b) Tenant’s Rights.  If a material portion of the Premises is damaged by Casualty such that Tenant is prevented from conducting its business in the Premises in a manner reasonably comparable to that conducted immediately prior to such Casualty and Landlord estimates that the damage caused by such Casualty cannot be repaired within two hundred seventy (270) days after the commencement of repairs (the “Repair Period”), then Tenant may terminate this Lease by delivering written notice to Landlord of its election to terminate within thirty (30) days after the Damage Notice has been delivered to Tenant.

 

(c) Landlord’s Rights.  If a Casualty damages the Premises or a material portion of the Building and (1) Landlord estimates that the damage to the Premises cannot be repaired within the Repair Period; (2) the damage to the Premises exceeds fifty percent (50%) of the replacement cost thereof (excluding foundations and footings), as estimated by Landlord, and such damage occurs during the last two (2) years of the Term; (3) regardless of the extent of damage to the Premises, the damage is not fully covered by Landlord’s insurance policies or Landlord makes a good faith determination that restoring the Building would be uneconomical; or (4) Landlord is required to pay any insurance proceeds arising out of the Casualty to a Landlord’s Mortgagee, then Landlord may terminate this Lease by giving written notice of its election to terminate within thirty (30) days after the Damage Notice has been delivered to Tenant.

 

(d) Repair Obligation.  If neither party elects to terminate this Lease following a Casualty, then Landlord shall, within a reasonable time after such Casualty, begin to repair the Premises and shall proceed with reasonable diligence to restore the Premises to substantially the same condition as had existed immediately prior to such Casualty; provided, however, that Landlord shall not be required to repair or replace any alterations, additions, improvements or betterments within the Premises, including any Tenant Improvements or other Alterations (which shall be promptly and with due diligence repaired and restored by Tenant at Tenant’s sole cost and expense), or any furniture, equipment, trade fixtures or personal property of Tenant or others in the Premises or the Building.  If this Lease is terminated under the provisions of this Section 15, Landlord shall be entitled to the full proceeds of the insurance policies providing coverage for all alterations, additions, improvements and betterments in the Premises, including the Tenant Improvements and all other Alterations (and, if Tenant has failed to maintain insurance on such items as required by this Lease, Tenant shall pay Landlord an amount equal to the proceeds Landlord would have received had Tenant maintained insurance on such items as required by this Lease).

 

(e) Abatement of Rent.  If the Premises are damaged by Casualty, Rent for the portion of the Premises rendered untenantable by the damage shall be abated in the proportion of the rentable square footage of the Premises made untenantable thereby to the total rentable square footage of the Premises from the date of damage until the completion of Landlord’s repairs (or until the date of termination of this Lease by Landlord or Tenant as provided above, as the case may be) unless a Tenant Party caused such damage, in which case Tenant shall continue to pay Rent without abatement.

 

16. 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 in or on the Building 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 pay to Landlord, within thirty (30) days following request therefor, the part of such taxes for which Tenant is primarily liable hereunder; however, Landlord shall not pay such amount if Tenant notifies Landlord that it will contest the validity or amount of such taxes before Landlord makes such payment, and thereafter diligently proceeds with such contest in accordance with Law and if the nonpayment thereof does not pose a threat of loss or seizure of the Project or interest of Landlord therein or impose any fee or penalty against Landlord.

 

17. Events of Default.  Each of the following occurrences shall be an “Event of Default”:

  

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(a) Payment Default.  Tenant’s failure to pay Rent within five (5) days after Landlord has delivered written notice to Tenant that the same is due; however, an Event of Default shall occur hereunder without any obligation of Landlord to give any notice if Tenant fails to pay Rent when due and, during the twelve (12)-month interval preceding such failure, Landlord has given Tenant notice of failure to pay Rent on one (1) or more occasions;

 

(b) Abandonment.  Tenant abandons or vacates the Premises or any substantial portion thereof combined with non-payment of Rent;

 

(c) Subordination.  Tenant fails to provide any documentation evidencing subordination of this Lease after request therefor pursuant to Section 12(a) above and such failure continues for five (5) days after Tenant’s receipt of a second request for such documentation from Landlord or Landlord’s Mortgagee(s);

 

(d) Estoppel.  Tenant fails to provide any estoppel certificate or guarantor’s statement requested by Landlord pursuant to Section 24(e) below and such failure continues for five (5) days after Tenant’s receipt of Landlord’s second request for such estoppel certificate;

 

(e) Insurance.  Tenant fails to procure, maintain and deliver to Landlord evidence of the insurance policies and coverages as required under Section 11(a) above if such failure continues for five (5) business days after Tenant’s receipt of Landlord’s notice of such failure;

 

(f) Mechanic’s Liens.  Tenant fails to pay and release of record, or diligently contest and bond around, any mechanic’s lien filed against the Premises or the Project for any work performed, materials furnished, or obligation incurred by or at the request of Tenant, within the time and in the manner required by Section 8(d) above;

 

(g) Misrepresentation.  Any material and deliberate misrepresentation herein, or material and deliberate misrepresentation or omission in any financial statements or other materials provided by Tenant or any guarantor of Tenant’s obligations hereunder in connection with negotiating this Lease or in connection with any Transfer under Section 10 above;

 

(h) Guaranty.  Cancellation of, or any default under, any guaranty of this Lease by any guarantor of Tenant’s obligations hereunder;

 

(i) OFAC/FCPA Representation.  Tenant is or becomes in breach of Section 24(w) below.

 

(j) Other Defaults.  Except as otherwise provided in this Section 17 or elsewhere in this Lease, Tenant’s failure to perform, comply with, or observe any other agreement or obligation of Tenant under this Lease and the continuance of such failure for a period of more than thirty (30) days after Landlord has delivered to Tenant notice thereof or such shorter period expressly provided elsewhere in this Lease (provided, if the nature of Tenant’s failure is such that more time is reasonably required in order to cure, an Event of Default shall not be deemed to have occurred and such failure may be cured if Tenant commences to cure such failure within such period and thereafter reasonably and diligently pursues the cure thereof to completion, such period in no event to exceed ninety (90) days from the date of Landlord’s original default notice); and

 

(k) Insolvency.  The filing of a petition by or against Tenant (the term “Tenant” shall include, for the purpose of this Section 17(k), any guarantor of Tenant’s obligations hereunder) (1) in any bankruptcy or other insolvency proceeding; (2) seeking any relief under any state or federal debtor relief law; (3) for the appointment of a liquidator or receiver for all or substantially all of Tenant’s property or for Tenant’s interest in this Lease; (4) for the reorganization or modification of Tenant’s capital structure; or (5) in any assignment for the benefit of creditors proceeding; however, if such a petition is filed against Tenant, then such filing shall not be an Event of Default unless Tenant fails to have the proceedings initiated by such petition dismissed within ninety (90) days after the filing thereof.

  

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18. Remedies.  Upon any Event of Default, Landlord may, in addition to all other rights and remedies afforded Landlord hereunder or by law or equity, take any one or more of the following actions:

 

(a) Termination of Lease.  Terminate this Lease by giving Tenant notice thereof, in which event Tenant shall pay to Landlord the sum of (1) all Rent accrued hereunder through the date of termination, (2) all amounts due under Section 19(a) below, and (3) an amount equal to (A) the total Rent that Tenant would have been required to pay for the remainder of the Term discounted to present value at a per annum rate equal to the “Prime Rate” as published on the date this Lease is terminated by The Wall Street Journal, Northwest Edition, in its listing of “Money Rates” plus one percent (1%), minus (B) the then-present fair rental value of the Premises for such period, similarly discounted.

 

(b) Termination of Possession.  Terminate Tenant’s right to possess the Premises without terminating this Lease by giving notice thereof to Tenant, in which event Tenant shall pay to Landlord (1) all Rent and other amounts accrued hereunder to the date of termination of possession, (2) all amounts due from time to time under Section 19(a) below, and (3) all Rent and other net sums required hereunder to be paid by Tenant during the remainder of the Term, diminished by any net sums thereafter received by Landlord through reletting the Premises during such period, after deducting all costs incurred by Landlord in reletting the Premises.  If Landlord elects to proceed under this Section 18(b), Landlord may remove all of Tenant’s property from the Premises and store the same in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, without becoming guilty of trespass, or liable for any loss or damage that may be occasioned thereby.  Landlord shall use commercially reasonable efforts to relet the Premises on such terms as Landlord in its sole discretion may determine (including a lease term different from the Term, rental concessions, and alterations to, and improvement of, the Premises); however, Landlord shall not be obligated to relet the Premises before leasing other portions of the Building or Project and Landlord shall not be obligated to accept any prospective tenant proposed by Tenant unless such proposed tenant meets all of Landlord’s then-existing leasing criteria.  Landlord shall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of, Landlord’s failure to relet the Premises or to collect rent due for such reletting.  Tenant shall not be entitled to the excess of any consideration obtained by reletting over the Rent due hereunder.  Reentry by Landlord in the Premises shall not affect Tenant’s obligations hereunder for the unexpired Term; rather, Landlord may, from time to time, bring an action against Tenant to collect amounts due by Tenant, without the necessity of Landlord’s waiting until the expiration of the Term.  Unless Landlord delivers written notice to Tenant expressly stating that it has elected to terminate this Lease, all actions taken by Landlord to dispossess or exclude Tenant from the Premises shall be deemed to be taken under this Section 18(b).  If Landlord elects to proceed under this Section 18(b), it may at any time elect to terminate this Lease under Section 18(a) above.

 

(c) Perform Acts on Behalf of Tenant.  Perform any act Tenant is obligated to perform under the terms of this Lease (and enter upon the Premises in connection therewith if necessary) in Tenant’s name and on Tenant’s behalf, without being liable for any claim for damages therefor, and Tenant shall reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease (including collection costs and legal expenses), plus interest thereon at the Default Rate.

 

19. Payment by Tenant; Non-Waiver; Cumulative Remedies

 

(a) Payment by Tenant.  Upon any Event of Default, Tenant shall pay to Landlord all costs incurred by Landlord (including court costs and reasonable attorneys’ fees and expenses) in (1) obtaining possession of the Premises, (2) removing and storing Tenant’s or any other occupant’s property, (3) repairing, restoring, altering, remodeling, or otherwise putting the Premises into condition acceptable to a new tenant, (4) if Tenant is dispossessed of the Premises and this Lease is not terminated, reletting all or any part of the Premises (including brokerage commissions, cost of tenant finish work, and other costs incidental to such reletting), (5) performing Tenant’s obligations that Tenant failed to perform, and (6) enforcing, or advising Landlord of, its rights, remedies, and recourses arising out of the default.  To the full extent permitted by Law, Landlord and Tenant agree that the federal and state courts of the State of Washington shall have exclusive jurisdiction over any matter relating to or arising from this Lease and the parties’ rights and obligations under this Lease.  Notwithstanding the foregoing, Tenant’s obligation to pay brokerage commissions and remodeling costs shall be limited to Landlord’s original un-amortized brokerage commissions and un-amortized tenant improvement costs.

  

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(b) No Waiver.  Landlord’s acceptance of Rent following an Event of Default shall not waive Landlord’s rights regarding such Event of Default.  No waiver by Landlord of any violation or breach of any of the terms contained herein shall waive Landlord’s rights regarding any future violation of such term.  Landlord’s acceptance of any partial payment of Rent shall not waive Landlord’s rights with regard to the remaining portion of the Rent that is due, regardless of any endorsement or other statement on any instrument delivered in payment of Rent or any writing delivered in connection therewith; accordingly, Landlord’s acceptance of a partial payment of Rent shall not constitute an accord and satisfaction of the full amount of the Rent that is due.

 

(c) Cumulative Remedies.  Any and all remedies set forth in this Lease:  (1) shall be in addition to any and all other remedies Landlord may have at law or in equity, (2) shall be cumulative, and (3) may be pursued successively or concurrently as Landlord may elect.  The exercise of any remedy by Landlord shall not be deemed an election of remedies or preclude Landlord from exercising any other remedies in the future.

 

20. Surrender of Premises.  No act by Landlord shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender of the Premises shall be valid unless it is in writing and signed by Landlord.  At the expiration or termination of this Lease, Tenant shall deliver to Landlord the Premises with all improvements located therein in the condition in which it was received, free of Hazardous Materials placed on the Premises during the Term, with all Cables removed if requested by Landlord under the provisions of Section 25 below, broom-clean, reasonable wear and tear (and condemnation and Casualty damage not caused by Tenant, as to which Sections 14 and 15 above, respectively,  shall control) excepted, and shall deliver to Landlord all keys to the Premises.  Provided that Tenant has performed all of its obligations hereunder, Tenant may remove all unattached trade fixtures, furniture, and personal property placed in the Premises or elsewhere in the Building or Project (including Tenant’s Off-Premises Equipment, if any) by Tenant (but Tenant may not remove any such item that was paid for, in whole or in part, by Landlord unless Landlord requires such removal).  Additionally, at Landlord’s option, Tenant shall remove such alterations, additions, improvements, trade fixtures, personal property, equipment (including Tenant’s Off-Premises Equipment, if any), and furniture as Landlord may request; however, Tenant shall not be required to remove any alteration, addition or improvement to the Premises or the Project if Landlord has specifically agreed in writing at the time Landlord consented to any such Alterations as provided in Section 8(a) that the alteration, addition or improvement in question need not be removed.  Tenant shall reasonably repair all damage caused by such removal.  All items not so removed shall, at Landlord’s option, become the property of Landlord without additional payment to Tenant or credit against Rent be deemed to have been abandoned by Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord without notice to Tenant and without any obligation to account for such items.  The provisions of this Section 20 shall survive the expiration or earlier termination of the Term.

 

21. Holding Over.  If Tenant, or anyone claiming under Tenant, fails to vacate and surrender the Premises to Landlord at the end of the Term, then Tenant shall be a tenant at sufferance and, in addition to all other damages and remedies to which Landlord may be entitled for such holding over Tenant shall pay Rent at a monthly rate equal to one and one-half (1 1⁄2) times the sum of the Basic Rent plus Additional Rent payable during the last calendar month of the Term for the entire holdover period, calculated and pro-rated on a daily basis, and Tenant shall otherwise continue to be subject to all of Tenant’s obligations under this Lease.  No holding over by Tenant after the end of the Term shall be construed to extend this Lease.  If Tenant fails to vacate and surrender the Premises to Landlord at the end of the Term, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all losses, costs (including reasonable attorneys’ fees) and liabilities resulting from such failure, including any claims made by any succeeding tenant founded upon such failure to vacate and surrender the Premises to Landlord, and any lost profits to Landlord resulting therefrom.  Notwithstanding the foregoing, any holding over with the express written consent of Landlord shall constitute this Lease a lease from month-to-month (and shall not constitute a renewal of this Lease for any further term or an extension of the Term), and Tenant shall pay Rent at a monthly rate equal to one hundred fifty percent (150%) of the sum of the Basic Rent plus the Additional Rent payable during the last calendar month of the Term, calculated and prorated on a daily basis, and Tenant shall otherwise be subject to all of the terms and conditions of this Lease.  The provisions of this Section 21 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law.  The provisions of this Section 21 shall survive the expiration or earlier termination of the Term.

  

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22. Certain Rights Reserved by Landlord; Miscellaneous.  Provided that the exercise of such rights does not materially and unreasonably interfere with Tenant’s access to, occupancy of, or business operations in, the Premises, Landlord shall have the following rights:

 

(a) Building Operations.  To decorate and to make inspections, repairs, alterations, additions, changes, or improvements, whether structural or otherwise, in and about the Project, or any part thereof; to enter upon the Premises (after giving Tenant reasonable prior notice thereof, which may be oral notice, except in cases of real or apparent emergency, in which case no notice shall be required) and, during the continuance of any such work, to temporarily close doors, entryways, public space, and corridors in the Building; to interrupt or temporarily suspend Building services and facilities; to change the name of the Building; and to change the arrangement and location of entrances or passageways, doors, doorways, corridors, elevators, stairs, restrooms, or other public parts of the Building.  Noise, dust or vibration or other incidents of construction, shall in no way constitute a constructive eviction of Tenant, affect this Lease or impose any liability on Landlord.

 

(b) Security

.  To take such reasonable measures as Landlord deems advisable for the security of the Building and its occupants; evacuating the Building for cause, suspected cause, or for drill purposes; temporarily denying access to the Building; and closing the Building after normal business hours and on Sundays and Holidays, subject, however, to Tenant’s right to enter when the Building is closed after normal business hours under such reasonable regulations as Landlord may prescribe from time to time;

 

(c) Current and Prospective Insurers, Purchasers, Investors and Mortgagees.  To enter the Premises or any portion thereof at all reasonable hours upon at least twenty-four (24) hours’ prior notice (which may be written, delivered by e-mail or oral) to show the Premises or any portion thereof to current or prospective insurers, purchasers, investors or mortgagees and their respective brokers; and

 

(d) Prospective Tenants.  At any time during the last twelve (12) months of the Term (or earlier if Tenant has notified Landlord in writing that it does not desire to renew the Term) or at any time following the occurrence of an Event of Default, to enter the Premises or any portion thereof at all reasonable hours with reasonable, advance, oral or written notice to show the Premises or any portion thereof to prospective tenants and their brokers.

 

Notwithstanding anything to the contrary in this Lease, including in this Section 22, Landlord may enter the Premises at any time, without prior notice, to (i) perform required services, including janitorial; (ii) take possession of the Premises or any portion thereof according to Section 18(b) above; (iii) exercise any of its other rights under Section 18 above; or (iv) post notices of non-responsibility.  Upon entry, Landlord may take such steps, including temporary closure of the Premises or any portion thereof, as are reasonably required to accomplish the purposes set forth in this Section 22.  Landlord shall at all times have a key with which to unlock all the doors in the Premises.  In an emergency, Landlord shall have the right to use any means Landlord may deem proper to open the doors in and to the Premises.  Any entry into the Premises by Landlord as provided herein shall not be deemed to be a forcible or unlawful entry into or detainer of, or a constructive eviction of Tenant from, any portion of the Premises, and Tenant shall not be entitled to any damages or abatement of Rent in connection with such entry.

 

23. Substitution Space.  Landlord may, at Landlord’s expense, relocate Tenant within the Building to space that is comparable in size, utility and condition (including finishes reasonably approved by Tenant) to the Premises with at least ninety (90) days prior written notice.  If Landlord relocates Tenant, Landlord shall reimburse Tenant for Tenant’s reasonable out-of-pocket expenses for moving Tenant’s furniture, equipment, cabling, servers, and supplies from the Premises to the relocation space and for reprinting Tenant’s stationery of the same quality and quantity as Tenant’s stationery supply on hand immediately before Landlord’s notice to Tenant of the exercise of this relocation right.  Upon such relocation, the relocation space shall be deemed to be the Premises, and the terms of this Lease shall remain in full force and shall apply to the relocation space with the exception that the relocation space’s total Rent shall not be in excess of that of the original Premises.  No amendment or other instrument shall be necessary to effectuate the relocation contemplated by this Section 23; however, if requested by Landlord, Tenant shall execute an appropriate amendment document within fifteen (15) business days after Landlord’s written request therefor.  If Tenant fails to execute such relocation amendment within such time period, or if Tenant fails to relocate within the time period stated in Landlord’s relocation notice to Tenant (or, if such relocation space is not available on the date specified in Landlord’s relocation notice, as soon thereafter as the relocation space becomes available

  

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and is tendered to Tenant in the condition required by this Lease), then, in addition to Landlord’s other remedies set forth in this Lease, at law and/or in equity, Landlord may terminate this Lease by notifying Tenant thereof at least ninety (90) days prior to the termination date contained in Landlord’s termination notice.  Time is of the essence with respect to Tenant’s obligations under this Section 23.

 

24. Miscellaneous

 

(a) Landlord Transfer.  Landlord may transfer any portion of the Project and any of its rights under this Lease, in the Project and in any other property referred to herein.  If Landlord assigns its rights under this Lease, then Landlord shall thereby be released from any further obligations hereunder arising after the date of transfer, provided that the assignee assumes in writing Landlord’s obligations hereunder arising from and after the transfer date.

 

(b) Landlord’s Liability.  The liability of the Landlord Parties to Tenant (or any person or entity claiming by, through or under Tenant) under the terms of this Lease or any matter relating to or arising out of the occupancy or use of the Premises and/or other areas of the Project shall be limited to Tenant’s actual direct, but not consequential, damages therefor and shall be recoverable only from the interest of Landlord in the Project (and any proceeds therefrom following payment of any outstanding liens and/or mortgages, whether attributable to sales or insurance proceeds or otherwise).  Tenant agrees to look solely to Landlord’s interest in the Project for the recovery of any judgment against any Landlord Party. No Landlord Party shall be personally liable for any such judgment, award or deficiency after execution thereon and Tenant hereby waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant.  The limitations of liability contained in this Section 24(b) shall apply equally and inure to the benefit of the Landlord Parties, present and future advisors, beneficiaries, participants, representatives and their respective constituent partners, members, shareholders, trustees, heirs, successors and assigns.  Under no circumstances shall any present or future general or limited partner of Landlord (if Landlord is a partnership), member of Landlord (if Landlord is a limited liability company) or trustee or beneficiary (if Landlord or any partner or member of Landlord is a trust) have any liability for the performance of Landlord’s obligations under this Lease, nor shall negative capital account of any constituent partner or member in Landlord (or in a constituent member or partner of Landlord) nor any obligation of any constituent member or partner of Landlord (or in any other constituent member or partner of Landlord) to restore a negative capital account or to contribute or loan capital to Landlord (or to any constituent member or partner of Landlord), at any time be deemed to be the property or an asset of Landlord or such other constituent member or partner (and neither Tenant nor any of its successors or assigns shall have any right to collect, enforce or proceed against or with respect to any such negative capital account of such a member’s or partner’s obligation to restore or contribute).  Notwithstanding any contrary provision herein, no Landlord Party shall be liable for any injury or damage to, or interference with, Tenant’s business, including loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, or for any form of special or consequential damage, in each case however occurring.  The foregoing shall be in addition to, and not in limitation of, any further limitation of liability that might otherwise apply.  Notwithstanding the foregoing, none of the provisions of this Section 24(b) shall be deemed to release any insurance carrier that insures Landlord’s liability to Tenant or to third parties from any obligation to make any payment to Tenant pursuant to any such insurance policy, it being agreed that any release of Landlord for any obligation to Tenant is not intended to and does not release Landlord’s insurance carrier from the obligation of paying such loss on Landlord’s behalf.  The provisions of this Section 24(b) shall survive the expiration or earlier termination of the Term.

 

(c) Force Majeure.  Other than for Tenant’s obligations under this Lease that can be performed by the payment of money (e.g., payment of Rent and maintenance of insurance), whenever a period of time is herein prescribed for action to be taken by either party hereto, such party shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, terrorist acts or activities, Laws or restrictions, or any other causes of any kind whatsoever that are beyond the control of such party; provided, however, that nothing in this Section 24(c) shall (1) permit Tenant to holdover in the Premises after the expiration or earlier termination of this Lease, or (2) excuse any obligation to pay Rent, any of Tenant’s obligations under Section 9 above, or Section 24(u) below, or any of Tenant’s obligations whose nonperformance would unreasonably interfere with any other occupant’s use, occupancy or enjoyment of its respective premises or the Project.

  

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(d) Brokerage.  Neither Landlord nor Tenant has dealt with any broker or agent in connection with the negotiation or execution of this Lease, other than CBRE, Inc. (representing Tenant) and Colliers International (representing Landlord), whose commissions (if any) shall be paid by Landlord pursuant to separate written agreements. Each party acknowledges receipt of a copy of the pamphlet described in RCW 18.86.030(f) entitled “The Law of Real Estate Agency,” as required by Washington Law.  Tenant and Landlord shall each indemnify the other against all costs, expenses, attorneys’ fees, liens and other liability for commissions or other compensation claimed by any broker or agent claiming the same by, through, or under the indemnifying party.

 

(e) Estoppel Certificates.  From time to time, Tenant shall furnish to any person designated by Landlord (which may include Landlord), within ten business (10) days after Landlord’s request therefor, an estoppel certificate signed by Tenant in favor of such party, confirming and containing, to the best of Tenant’s then-actual, current knowledge, without due inquiry as of the date thereof,  such factual certifications and representations as to this Lease as may be reasonably requested, and a written statement from each guarantor of Tenant’s obligations under this Lease consenting, ratifying and confirming its guaranty is in full force and effect.  Unless otherwise required by a Landlord’s Mortgagee or a prospective purchaser or mortgagee of, or investor in, the Project, the form of estoppel certificate to be signed by Tenant and statement to be made by each such guarantor shall be in the form attached hereto as Exhibit F.  If Tenant does not deliver to Landlord such signed estoppel certificate and/or statement within such required time period, Landlord, Landlord’s Mortgagee and any prospective purchaser, mortgagee or investor, may conclusively presume and rely upon the following facts:  (1) this Lease and the guaranty thereof, if any, is in full force and effect; (2) the terms and provisions of this Lease have not been changed except as otherwise represented by Landlord; (3) not more than one (1) monthly installment of Basic Rent and other charges have been paid in advance; (4) there are no claims against Landlord nor any defenses or rights of offset against collection of Rent or other charges; and (5) Landlord is not in default under this Lease.  In such event, Tenant shall be estopped from denying the truth of the presumed facts.

 

(f) Notices.  Except to as otherwise expressly provided in this Lease to the contrary, all notices, consents, approvals, requests and other communications given pursuant to this Lease shall be in writing and shall be (1) mailed by first-class, United States Mail, postage prepaid, certified, with return receipt requested, and addressed to the parties hereto at the address specified in the Basic Lease Information, (2) hand delivered to the intended addressee, or (3) sent by a nationally recognized overnight courier service.  All notices shall be effective upon delivery to the address of the addressee (even if such addressee refuses delivery thereof).  The parties hereto may change their addresses by giving notice thereof to the other in conformity with this provision.

 

(g) Separability.  If any clause or provision of this Lease is illegal, invalid, or unenforceable under present or future Laws, then the remainder of this Lease shall not be affected thereby and in lieu of such clause or provision, there shall be added as a part of this Lease a clause or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be possible, which clause or provision shall be legal, valid, and enforceable.

 

(h) Amendments; Binding Effect; No Electronic Records.  This Lease may not be amended except by instrument in writing signed by Landlord and Tenant.  No provision of this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by Landlord, and no custom or practice that may evolve between the parties in the administration of the terms hereof shall waive or diminish the right of Landlord to insist upon the performance by Tenant in strict accordance with the terms hereof.  The terms and conditions contained in this Lease shall inure to the benefit of and be binding upon the parties hereto, and upon their respective successors in interest and legal representatives, except as otherwise herein expressly provided.  This Lease is for the sole benefit of Landlord and Tenant, and, other than Landlord’s Mortgagee, no third-party shall be deemed a third-party beneficiary hereof.

 

(i) Quiet Enjoyment.  Provided Tenant has performed all of its obligations hereunder (following Tenant’s receipt of any applicable notice and the commensurate opportunity to cure), Tenant shall peaceably and quietly hold and enjoy the Premises for the Term, without hindrance from Landlord or any party claiming by, through, or under Landlord, but not otherwise, subject to the terms and conditions of this Lease.  It is understood and agreed that this covenant and any and all other covenants of Landlord contained in this Lease shall be binding upon Landlord and its successors only with respect to breaches occurring during its and their respective ownership of the Landlord’s interest hereunder.

  

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(j) No Merger.  There shall be no merger of the leasehold estate hereby created with the fee estate in the Premises or any part thereof if the same person acquires or holds, directly or indirectly, this Lease or any interest in this Lease and the fee estate in the leasehold Premises or any interest in such fee estate.

 

(k) Entire Agreement.  This Lease constitutes the entire agreement between Landlord and Tenant regarding the subject matter hereof and supersedes all oral statements and prior writings relating thereto.  Except for those set forth in this Lease, no representations, warranties, or agreements have been made by Landlord or Tenant to the other with respect to this Lease or the obligations of Landlord or Tenant in connection therewith.  The normal rule of construction that any ambiguities be resolved against the drafting party shall not apply to the interpretation of this Lease or any exhibits or amendments hereto.

 

(l) Waiver of Jury Trial.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

 

(m) Governing Law  This Lease shall be governed by and construed in accordance with the Laws of the State of Washington.

 

(n) Recording.  Tenant shall not record this Lease or any memorandum of this Lease without the prior consent of Landlord, which consent may be withheld or denied in the sole and absolute discretion of Landlord, and any recordation by Tenant shall be a material breach of this Lease that cannot be cured.  Tenant grants to Landlord a power of attorney to execute and record a release releasing any such recorded instrument of record that was recorded without the prior consent of Landlord.

 

(o) Water or Mold Notification.  To the extent Tenant or its agents or employees discover any water leakage, water damage or mold in or about the Premises or Project, Tenant shall promptly notify Landlord thereof.

 

(p) Joint and Several Liability.  If Tenant is comprised of more than one party, each such party shall be jointly and severally liable for Tenant’s obligations under this Lease.  All unperformed obligations of either party hereunder not fully performed at the end of the Term shall survive the end of the Term, including payment obligations with respect to Rent, all indemnity obligations and all obligations concerning the condition and repair of the Premises.

 

(q) Financial Reports.  Within fifteen (15) days after Landlord’s request, Tenant will furnish Tenant’s most recent audited financial statements (including any unprivileged or otherwise unprotected notes to them) to Landlord, or, if no such audited statements have been prepared, such other financial statements (and notes to them) as may have been prepared by an independent certified public accountant or, failing those, Tenant’s internally prepared financial statements.  If Tenant is a publicly traded corporation, Tenant may satisfy its obligations hereunder by providing to Landlord Tenant’s most recent annual and quarterly reports.  Tenant will discuss its financial statements with Landlord and, following the occurrence of an uncured Event of Default hereunder (and following Tenant’s receipt of any applicable notice and the commensurate opportunity to cure), Tenant will give Landlord reasonable access to Tenant’s books and records in order to enable Landlord to verify the financial statements.  Landlord will not disclose any aspect of Tenant’s financial statements that Tenant designates to Landlord as confidential except (1) to a Landlord’s Mortgagee or prospective mortgagees or purchasers of, or investors in,  the Project, (2) in litigation between Landlord and Tenant, and/or (3) if required by Law or court order.  Tenant shall not be required to deliver the financial statements required under this Section 24(q) more than once in any 12-month period unless requested by a Landlord’s Mortgagee or a prospective mortgagee or purchaser of, or investor in, the Project or an Event of Default occurs.

 

(r) Landlord’s Fees.  Whenever Tenant requests Landlord to take any action not required of it hereunder or give any consent required or permitted under this Lease, Tenant will reimburse Landlord for Landlord’s reasonable, out-of-pocket costs payable to third parties and incurred by Landlord in reviewing the proposed action or consent, including reasonable attorneys’, engineers’ or architects’ fees, within thirty (30) days after Landlord’s delivery to Tenant of a statement of such costs.  Tenant will be obligated to make such reimbursement without regard to whether Landlord consents to any such proposed action.

  

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(s) Confidentiality.  Tenant acknowledges that the terms and conditions of this Lease are to remain confidential for Landlord’s benefit, and may not be disclosed by Tenant to anyone, by any manner or means, directly or indirectly, without Landlord’s prior consent; however, Tenant may disclose the terms and conditions of this Lease if required by Law or court order, and to its attorneys, accountants, employees and existing or prospective financial partners provided same are advised by Tenant of the confidential nature of such terms and conditions and agree to maintain the confidentiality thereof (in each case, prior to disclosure).  Tenant shall be liable for any disclosures made in violation of this Section 24(s) by Tenant or by any entity or individual to whom the terms and conditions of this Lease were disclosed or made available by Tenant.  The consent by Landlord to any disclosures shall not be deemed to be a waiver on the part of Landlord of any prohibition against any future disclosure.

 

(t) Authority.  Tenant (if a corporation, partnership or other business entity) hereby represents and warrants to Landlord that Tenant is a duly formed and existing entity qualified to do business in the State of Washington, that Tenant has full right and authority to execute and deliver this Lease, and that each person signing on behalf of Tenant is authorized to do so.  Landlord hereby represents and warrants to Tenant that Landlord has full right and authority to execute and deliver this Lease, and that each person signing on behalf of Landlord is authorized to do so.

 

(u) Hazardous Materials.  The term “Hazardous Materials” means any substance, material, or waste that is now or hereafter classified or considered to be hazardous, toxic, or dangerous under any Law relating to pollution or the protection or regulation of human health, natural resources or the environment, or poses or threatens to pose a hazard to the health or safety of persons on the Premises or in the Project.  Tenant shall not use, generate, store, or dispose of, or permit the use, generation, storage or disposal of Hazardous Materials on or about the Premises or the Project except in a manner and quantity necessary for the ordinary performance of Tenant’s business, and then in compliance with all Laws.  If Tenant breaches its obligations under this Section 24(u), Landlord may upon five (5) days prior notice to Tenant, or such shorter time required by Law or in order to minimize any hazard to person or property, take any and all action reasonably appropriate to remedy the same, including taking all appropriate action to clean-up or remediate any contamination resulting from Tenant’s use, generation, storage or disposal of Hazardous Materials, and Tenant shall reimburse to Landlord an amount equal to Landlord’s costs plus five percent (5%) for overhead which shall be payable within thirty (30) days after Tenant’s receipt of an invoice therefor, together with supporting evidence.  Notwithstanding Landlord’s indemnity contained in Section 11(e) above, Tenant shall defend, indemnify, and hold harmless Landlord and its representatives and agents from and against any and all Claims (including reasonable attorneys’ fees, cost of clean-up investigation and remediation and diminution in the value of the Premises or other portion of the Project) arising from Tenant’s failure to comply with the provisions of this Section 24(u).  To the extent that Landlord is held strictly liable by a court or governmental agency of competent jurisdiction, Tenant’s obligation to Landlord under the foregoing indemnification shall likewise be without regard to fault on Tenant’s part.  This indemnity provision shall survive the end of the Term.

  

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(v) List of Exhibits.  All exhibits and attachments attached hereto are incorporated herein by this reference.

 

	
  

	
Exhibit A

	
–

	
Outline of Premises

	
  

	
Exhibit B

	
–

	
Description of the Land

	
  

	
Exhibit C

	
–

	
Building Rules and Regulations

	
  

	
Exhibit D

	
–

	
Tenant Work Letter

	
  

	
Exhibit E

	
–

	
Form of Confirmation of Commencement Date Letter

	
  

	
Exhibit F

	
–

	
Form of Tenant Estoppel Certificate

	
  

	
Exhibit G

	
–

	
Parking

	
  

	
Exhibit H

	
–

	
Rent Abatement Provision

	
  

	
Exhibit I

	
–

	
Tenant’s Right to Terminate

	
  

	
Exhibit J

	
–

	
Extension Option

	
  

	
Exhibit K

	
–

	
Right of First Refusal

(w) OFAC/FCPA Representation.  Neither Tenant nor any of its affiliates, nor any of their respective brokers or other agents acting in any capacity in connection with the transactions contemplated by this Lease is or will be (a) conducting any business or engaging in any transaction or dealing with any person appearing on the U.S. Treasury Department’s OFAC list of prohibited countries, territories, “specifically designated nationals” (“SDNs”) or “blocked person” (each a “Prohibited Person”) (which lists can be accessed at the following web address:  http://www.ustreas.gov/offices/enforcement/ofac/), including the making or receiving of any contribution of funds, goods or services to or for the benefit of any such Prohibited Person; (b) engaging in certain dealings with countries and organizations designated under Section 311 of the USA PATRIOT Act as warranting special measures due to money-laundering concerns; (c) dealing in, or otherwise engaging in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 dated September 24, 2001, relating to “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism”; (d) a foreign shell bank or any person that a financial institution would be prohibited from transacting with under the USA PATRIOT Act; or (e) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempting to violate, any of the prohibitions set forth in (i) any U.S. anti-money-laundering  law, (ii) the Foreign Corrupt Practices Act, (iii) the U.S. mail and wire fraud statutes, (iv) the Travel Act, (v) any similar or successor statutes or (vi) any regulations promulgated under the foregoing statutes.  If at any time this representation becomes false, then it shall be considered an Event of Default under this Lease as to which there shall be no right to notice or an opportunity to cure, notwithstanding anything contained in this Lease to the contrary, and Landlord shall have the right to exercise all of the remedies set forth in this Lease including, without limitation, immediate termination of this Lease.

 

(x) Survival of Obligations.  Any obligations of the parties accruing prior to the end of the Term shall survive, and the parties shall promptly perform all such obligations whether or not this Lease has expired or earlier terminated.

 

(y) Reasonable Efforts.  Whenever in this Lease there is imposed upon Landlord the obligation to use its best efforts, reasonable efforts or diligence, Landlord shall be required to do so only to the extent the same is economically feasible and otherwise will not impose upon Landlord excessive financial or other burdens.

 

(aa) Landlord Default.  Notwithstanding anything to the contrary set forth in this Lease, Landlord shall be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease if Landlord fails to perform such obligation within thirty (30) days after the receipt of notice from Tenant specifying in detail Landlord’s failure to perform; provided, that if the nature of Landlord’s obligation is such that more than thirty (30) days are reasonably required for its performance, then Landlord shall not be in default under this Lease if it shall commence such performance within such thirty- (30) day period and thereafter diligently pursue the same to completion.

  

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(bb) Business Days.  For purposes of this Lease, “Business Days” means all calendar days other than Saturdays, Sundays, and Holidays.  If the date for performance of any covenant or obligation under this Lease shall fall on a day that is not a Business Day, then the date for performance thereof shall be deemed to be the next following Business Day.

 

(cc) Terms; Captions.  The words “Landlord” and “Tenant” as used herein shall include the plural as well as the singular.  The captions of Sections are for convenience only and shall not affect the interpretation of such Sections.  The word “person,” as used in this Lease, means any natural person or persons in individual or representative capacities and any entity or entities of any kind whatsoever, including,  corporations, partnerships and associations, or any combination of persons and entities.  Any reference herein to “any part” or “any portion” of the Premises, the Building, the Property, the Project or any other property shall be construed to refer to all or any part of such property.  Wherever this Lease requires Tenant to comply with any Law, rule, regulation, program, procedure or other requirement or prohibits Tenant from engaging in any particular conduct, this Lease shall be deemed also to require Tenant to cause each of its employees, licensees, invitees and subtenants, and any other person claiming by, through or under Tenant, to comply with such requirement or refrain from engaging in such conduct, as the case may be.

 

(dd) Storage(ee) .  In connection with Tenant’s lease of the Premises, commencing as of the Commencement Date and continuing throughout the Term (as the same may be extended), Tenant shall lease from Landlord approximately 300 square feet of storage area in the location reasonably determined by Landlord (the "Storage Space").  Tenant’s shall pay Basic Rent for the Storage Space in the following amounts:

 

	
Period During the Term

 

	
Annual Basic Rent per Square Foot of the Storage Space

 

	
Commencement Date – 12th full calendar month of the Term

 

	
  $0.00

	
13th through the 24th full calendar months of the Term

 

	
$12.00

	
25th through the 36th full calendar months of the Term

 

	
$12.50

	
37th through the 48th full calendar months of the Term

 

	
$13.00

	
49th through the 60th full calendar months of the Term

 

	
$13.50

	
61st full calendar month of the Term through the Expiration Date

	
$14.00

 

The rentable area of the Storage Space shall not be included in the Premises for purposes of calculating Tenant’s Proportionate Share of Operating Costs.  Tenant agrees to accept the Storage Space in its "as-is" condition.  Tenant agrees not to store any flammable or highly combustible materials in the Storage Space.  Tenant also agrees not to store waste in the Storage Space.  Tenant agrees to use the Storage Space solely for storage purposes and not as office space.  The Storage Space may not be assigned or subleased by Tenant (other than to or by a Permitted Transferee under the terms of Section 10(g) of this Lease) or otherwise transferred by Tenant.  Landlord may relocate the Storage Space to other comparable storage space in the Building on thirty (30) days’ prior notice to Tenant.  The Storage Space shall be deemed part of the Premises and all of the provisions of this Lease with regard to the Premises, to the extent applicable and not inconsistent with the provisions of this Section 24(dd) shall be deemed to apply to the Storage Space.

  

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25. Interior Signage.  Landlord shall (A) install one (1) Building-standard identification sign identifying Tenant on the multi-tenant floor directory, (B) install one (1) Building-standard identification plaque near Tenant’s suite entry and (C) display Tenant’s name on the directory board for the Building located in the lobby of the Building.  Landlord shall pay for the cost of the initial installation of such permitted signage, and Tenant shall pay for the cost of any changes thereto (which changes shall be subject to Landlord’s prior approval, which shall not be unreasonably withheld, conditioned or delayed).   Tenant may install identification signage at the entrance to the Premises, subject to Landlord’s prior approval, which shall not be unreasonably withheld, conditioned or delayed.

 

26. Telecommunications and Communications.

 

(a) Tenant’s Telecommunications Providers.  Tenant and its telecommunications companies, including local exchange telecommunications companies and alternative access vendor services companies, shall have no right of access to and within the Building or any other portion of the Project, for the installation and operation of telecommunications systems, including voice, video, data, Internet, and any other services provided over wire, fiber optic, microwave, wireless, and any other transmission systems (“Telecommunications Services”), for part or all of Tenant’s telecommunications within the Building and from the Building to any other location without Landlord’s prior consent, which consent shall not be unreasonably withheld, conditioned or delayed, and subject to the prior execution and delivery of an access agreement on Landlord’s standard form.  All providers of Telecommunications Services shall be required to comply with the rules and regulations of the Building, applicable Laws and Landlord’s policies and practices for the Building.  Tenant acknowledges that Landlord shall not be required to provide or arrange for any Telecommunications Services and that Landlord shall have no liability to any Tenant Party in connection with the installation, operation or maintenance of Telecommunications Services or any equipment or facilities relating thereto.  Tenant, at its cost and for its own account, shall be solely responsible for obtaining all Telecommunications Services.

 

(b) Cable Work.  Tenant may install, maintain, replace and remove (collectively, the “Cable Work”) and use any communications or computer wires, cables, fibers, connections and related telecommunications equipment and/or other facilities for telecommunications (collectively, “Cable(s)”) within or serving the Premises, provided:  (1) Tenant shall obtain Landlord’s prior approval, which approval shall not be unreasonably withheld, delayed or conditioned, shall use an experienced, licensed and qualified contractor approved by Landlord, which approval shall not be unreasonably withheld, delayed or conditioned, and shall comply with provisions of Section 8 above and shall not interfere with the use of any then-existing Cables within or serving the Building, (2) an acceptable number of spare Cables and space for additional Cables shall be maintained for existing and future occupants of the Building, as determined in Landlord’s reasonable opinion, (3) if Tenant at any time uses any equipment that may create an electromagnetic field exceeding the normal insulation ratings of ordinary twisted pair riser cable or cause radiation higher than normal background radiation, the Cables therefor (including riser Cables) shall be appropriately insulated to prevent such excessive electromagnetic fields or radiation, (4) the Cables shall be clearly marked with adhesive plastic labels (or plastic tags attached to such Cables with wire) to show Tenant’s name, suite number, telephone number and the name of the person to contact in the case of an emergency (A) every four feet (4’) outside the Premises (including the electrical room risers and other Common Areas), and (B) at the Cables’ termination point(s), and (5) Tenant shall pay all costs in connection therewith.  Landlord shall at all times maintain exclusive control over all risers (including their use) in the Building.  Landlord reserves the right to require that Tenant remove any Cables located in or serving the Premises that are installed by or on behalf of Tenant in violation of these provisions, or which are at any time in violation of any applicable Laws or represent a dangerous or potentially dangerous condition, within three (3) days after receipt of notice by Tenant or such longer period of time as is reasonably necessary.

 

(c) Landlord’s Reserved Rights.  Landlord may (but shall not have the obligation to) (i) install new Cables at the Building, (ii) create additional space for Cables at the Building, and (iii) reasonably direct, monitor and/or supervise the installation, maintenance, replacement and removal of the allocation and periodic re allocation of available space (if any) for, and the allocation of excess capacity (if any) on, any Cables now or hereafter installed at the Building by Landlord, Tenant or any other person.  Such rights shall not be in limitation of other rights that may be available to Landlord by Law, in equity or otherwise.  If Landlord exercises any such rights, Landlord may charge Tenant for such costs attributable to Tenant, or may include those costs and all other such costs in Operating Costs (including, costs for acquiring and installing Cables and risers to accommodate new Cables and spare Cables, any associated computerized system and software for maintaining records of Cable

  

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connections, and the fees of any consulting engineers and other experts); provided, any capital expenditures included in Operating Costs hereunder shall be amortized (including interest on the unamortized cost) over the period of time prescribed by Section 4(b) above.  Notwithstanding the foregoing, Landlord shall not be allowed to charge Tenant for replacement or repair of Tenant’s Cables within Tenant’s Premises.

 

(d) Removal Obligations.  Notwithstanding anything to the contrary contained in this Lease, Landlord reserves the right to require that Tenant remove any or all Cables within or serving the Premises upon expiration or earlier termination of this Lease.  Any Cables not required by Landlord to be removed pursuant to this Section 26(d) shall, at Landlord’s option, become the property of Landlord (without payment by Landlord).  If Tenant fails to remove any such Cables as required by Landlord, or violates any other provision of this Section 26, Landlord may, after twenty (20)-days’ notice to Tenant, remove such Cables or remedy such other violation, at Tenant’s expense (without limiting Landlord’s other remedies available under this Lease, at Law or in equity), which amount plus five percent (5%) thereof  shall be paid by Tenant within thirty (30) days after Tenant’s receipt of an invoice therefor, together with reasonable supporting evidence.  Tenant shall not, without the prior consent of Landlord in each instance (which may be withheld in Landlord’s sole discretion), grant to any third party a security interest in, or lien on, any Cables, and any such security interest or lien granted without Landlord’s consent shall be null and void.  Notwithstanding anything to the contrary contained in this Lease, and without limiting the provisions of Section 26(a) above, except to the extent arising from the intentional or grossly negligent acts (or failures to act) of Landlord or Landlord’s agents or employees, Landlord shall have no liability for damages arising from, and Landlord does not warrant that the Tenant’s use of any Cable will be free from the following (collectively, “Cable Problems”):  (1) any eavesdropping or wiretapping by unauthorized parties, (2) any failure of any Cable to satisfy Tenant’s requirements, or (3) any shortages, failures, variations, interruptions, disconnections, loss or damage caused by the installation, maintenance, replacement, use or removal of Cables or by any failure of the environmental conditions or the power supply for the Building to conform to any requirements for the Cables or any associated equipment, or any other problems associated with any Cable by any other cause.  Under no circumstances shall any Cable Problems be deemed an actual or constructive eviction of Tenant, render Landlord liable to Tenant for abatement of Rent or otherwise, or relieve Tenant from performance of Tenant’s other obligations under this Lease.  Landlord in no event shall be liable for damages by reason of loss of profits, business interruption or other consequential damage arising from any Cable Problems.  The provisions of this Section 26 shall survive the expiration or earlier termination of this Lease.

  

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[Signature Page to the Lease Agreement between Talon Properties Services, LLC, a Washington limited liability company, as General Receiver for W2007 Seattle Office 110 Atrium Place Realty, LLC, a Delaware limited liability company, King County Case No. 12-2-21253-8-SEA, as Landlord, and Augme Technologies, Inc., a Washington corporation, as Tenant]

 

This Lease is executed on the respective dates set forth below, but for reference purposes, this Lease shall be dated as of the date first above written.  If the execution date is left blank, this Lease shall be deemed executed as of the date first written above.

 

	
LANDLORD:

	
TALON PORTFOLIO SERVICES, LLC,

a Washington limited liability company,

as General Receiver for W2007 Seattle Office 110 Atrium Place Realty, LLC,

a Delaware limited liability company,

King County Case No. 12-2-21253-8-SEA

 

By:           _______________________________

Name:                      _______________________________

Title:                      _______________________________

 

Execution Date:  ___________, 20__

 

	
TENANT:

	
AUGME TECHNOLOGIES, INC.,

a Washington corporation

 

By:           _______________________________

Name:                      _______________________________

Title:                      _______________________________

 

Execution Date:  _______________________

 

By:           _______________________________

Name:                      _______________________________

Title:                      _______________________________

 

Execution Date:  ___________, 20__

  

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LANDLORD ACKNOWLEDGMENT

 

 

STATE OF WASHINGTON             }

 

} ss.

 

COUNTY OF          KING                      }

 

I certify that I know or have satisfactory evidence that the person appearing before me and making this acknowledgment is the person whose true signature appears on this document.

 

On this _______________, 20__, before me personally appeared _________________, to me known to be the Managing Principal of Talon Portfolio Services, LLC, a Washington limited liability company, as General Receiver for W2007 Seattle Office 110 Atrium Place Realty, LLC, a Delaware limited liability company, King County Case No. 12-2-21253-8-SEA, the company that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said limited liability company, for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument.

 

WITNESS my hand and seal hereto affixed the day and year first above written.

 

__________________________________________

 

__________________________________________

 

Type or print name

 

 

Notary Public in and for the State of ____________

 

Residing at _______________________________

 

My commission expires:  ____________________

 

  

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CORPORATION ACKNOWLEDGMENT

 

 

STATE OF ______________   }

                                                      }  ss.

 

COUNTY OF                               }

 

On this _____ day of ________________, 20__, before me, a Notary Public in and for the State of Washington, personally appeared _________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed this instrument; on oath stated that said individual was authorized to execute the instrument, and acknowledged it as the _________________ of Augme Technologies, Inc., a Washington corporation, to be the free and voluntary act and deed of said corporation for the uses and purposes mentioned in the instrument.

 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written.

 

______________________________________________

 

(Print Name)

 

NOTARY PUBLIC in and for the State of Washington,

 

residing at ______________________________________

 

My appointment expires:  _________________________

 

 

STATE OF ______________      }

                                                         }  ss.

 

COUNTY OF                                  }

 

On this _____ day of ________________, 20__, before me, a Notary Public in and for the State of Washington, personally appeared _________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed this instrument; on oath stated that said individual was authorized to execute the instrument, and acknowledged it as the _________________ of Augme Technologies, Inc., a Washington corporation, to be the free and voluntary act and deed of said corporation for the uses and purposes mentioned in the instrument.

 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written.

 

______________________________________________

 

(Print Name)

 

NOTARY PUBLIC in and for the State of Washington,

 

residing at ______________________________________

 

My appointment expires:  _________________________

  

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EXHIBIT A

 

OUTLINE OF PREMISES

 

 

 

  

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EXHIBIT B

 

Legal Description for 110 Atrium Place –

 

110 110th Avenue NE, Bellevue, Washington

 

PARCEL A:

 

THAT PORTION OF THE SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 32, TOWNSHIP 25 NORTH, RANGE 5 EAST W.M., IN KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS:

 

BEGINNING AT THE INTERSECTION OF THE EAST MARGIN OF 110TH AVENUE NORTHEAST, AS NOW ESTABLISHED WITH A LINE PARALLEL TO AND 277.5 FEET NORTH OF, WHEN MEASURED AT RIGHT ANGLES TO THE EAST-WEST CENTERLINE OF SAID SECTION 32; THENCE EASTERLY ALONG SAID PARALLEL LINE TO A POINT IN A LINE PARALLEL TO AND 476.8 FEET WEST OF, WHEN MEASURED AT RIGHT ANGLES, TO THE EAST LINE OF SAID SUBDIVISION; THENCE NORTHERLY ALONG SAID PARALLEL LINE TO A POINT IN A LINE PARALLEL TO AND 577.5 FEET NORTH OF, WHEN MEASURED AT RIGHT ANGLES TO, THE SAID CENTER LINE OF SAID SECTION; THENCE WESTERLY ALONG SAID PARALLEL LINE, 14.09 FEET TO A POINT IN A LINE PARALLEL TO AND 162.00 FEET WEST OF, WHEN MEASURED AT RIGHT ANGLES TO, THE EAST LINE OF THE WEST THREE QUARTERS OF THE SOUTH HALF OF SAID SUBDIVISION; THENCE NORTHERLY ALONG SAID PARALLEL LINE TO THE SOUTH MARGIN OF NORTHEAST SECOND STREET AS NOW ESTABLISHED; THENCE WESTERLY ALONG SAID SOUTH MARGIN OF NORTHEAST SECOND STREET TO THE SAID EAST MARGIN OF 110TH AVENUE NORTHEAST; THENCE SOUTHERLY ALONG SAID EAST MARGIN TO THE POINT OF BEGINNING.

 

PARCEL B:

 

A PERPETUAL AIR SPACE EASEMENT AS CONVEYED BY DOCUMENT RECORDED NOVEMBER 23, 1981 AS RECORDING NO. 8111230037 OVER AND ACROSS THE FOLLOWING DESCRIBED PROPERTY:

 

THAT PORTION OF SOUTHWEST QUARTER OF THE NORTHEAST QUARTER OF SECTION 32, TOWNSHIP 25 NORTH, RANGE 5 EAST, W.M., IN KING COUNTY, WASHINGTON, DESCRIBED AS FOLLOWS:

 

BEGINNING AT THE INTERSECTION OF THE EAST MARGIN OF 110TH AVENUE NORTHEAST, AS NOW ESTABLISHED WITH A LINE PARALLEL TO AND 277.5 FEET NORTH OF, WHEN MEASURED AT RIGHT ANGLES TO THE EAST-WEST LINE OF SAID SECTION 32; THENCE EASTERLY ALONG SAID PARALLEL LINE TO A POINT IN LINE PARALLEL TO AND 476.8 FEET WEST OF, WHEN MEASURED AT RIGHT ANGLES, TO EAST LINE OF SAID SUBDIVISION; THENCE NORTHERLY, ALONG SAID PARALLEL LINE TO A POINT IN A LINE PARALLEL TO AND 577.5 FEET NORTH OF, WHEN MEASURED AT RIGHT ANGLES TO, THE SAID CENTER LINE OF SAID SECTION TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE WESTERLY ALONG SAID PARALLEL LINE, 14.09 FEET TO A POINT IN A LINE PARALLEL TO AND 162.00 FEET WEST OF, MEASURED AT RIGHT ANGLES TO, THE EAST LINE OF THE WEST THREE QUARTERS OF THE SOUTH HALF OF SAID SUBDIVISION; THENCE NORTHERLY ALONG SAID PARALLEL LINE TO THE SOUTH MARGIN OF NORTHEAST SECOND STREET AS NOW ESTABLISHED; THENCE EASTERLY ALONG SAID SOUTH MARGIN OF NORTHEAST SECOND STREET 14.09 FEET; THENCE SOUTHERLY ALONG A LINE PARALLEL TO THE EAST LINE OF THE WEST THREE QUARTERS OF THE SOUTH HALF OF SAID SUBDIVISION TO THE TRUE POINT OF BEGINNING.

  

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EXHIBIT C

 

BUILDING RULES AND REGULATIONS

 

The following rules and regulations shall apply to the Premises, the Building, the Garage Area, and the appurtenances thereto:

 

1.           Sidewalks, doorways, vestibules, halls, stairways, and other similar areas shall not be obstructed by tenants or used by any tenant for purposes other than ingress and egress to and from their respective leased premises and for going from one to another part of the Building.

 

2.           Plumbing, fixtures and appliances shall be used only for the purposes for which designed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or deposited therein.  Damage resulting to any such fixtures or appliances from misuse by a tenant or its agents, employees or invitees, shall be paid by such tenant.

 

3.           No signs, advertisements or notices (other than those that are not visible outside any tenant’s leased premises) shall be painted or affixed on or to any windows or doors or other part of the Building without the prior written consent of Landlord.  No nails, hooks or screws (other than those that are necessary to hang paintings, prints, pictures, or other similar items on the interior walls of any tenant’s leased premises) shall be driven or inserted in any part of the Building except by Building maintenance personnel.  No curtains or other window treatments shall be placed between the glass and the Building standard window treatments.

 

4.           Landlord shall provide and maintain an alphabetical directory for all tenants in the main lobby of the Building.

 

5.           Landlord shall provide all door locks in each tenant’s leased premises, at the cost of such tenant, and no tenant shall place any additional door locks in its leased premises without Landlord’s prior written consent.  Landlord shall furnish to each tenant a reasonable number of keys to such tenant’s leased premises, at such tenant’s cost, and no tenant shall make a duplicate thereof.

 

6.           Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by tenants of any bulky material, merchandise or materials that require use of elevators or stairways, or movement through the Building entrances or lobby shall be conducted under Landlord’s supervision at such times and in such a manner as Landlord may reasonably require.  Each tenant assumes all risks of, and shall be liable for all damage to, articles moved and injury to persons or public engaged or not engaged in such movement, including equipment, property and personnel of Landlord if damaged or injured as a result of acts in connection with carrying out this service for such tenant.

 

7.           Landlord may prescribe weight limitations and determine the locations for safes and other heavy equipment or items, which shall in all cases be placed in the Building so as to distribute weight in a manner acceptable to Landlord, which may include the use of such supporting devices as Landlord may require.  All damages to the Building caused by the installation or removal of any property of a tenant, or done by a tenant’s property while in the Building, shall be repaired at the expense of such tenant.

 

8.           Corridor doors, when not in use, shall be kept closed.  Nothing shall be swept or thrown into the corridors, halls, elevator shafts or stairways.  No birds or animals (other than service animals) shall be brought into or kept in, on or about any tenant’s leased premises.  No portion of any tenant’s leased premises shall at any time be used or occupied as sleeping or lodging quarters.

 

9.           Tenant shall cooperate with Landlord’s employees in keeping its leased premises neat and clean.  Tenants shall not employ any person for the purpose of such cleaning other than the Building’s cleaning and maintenance personnel.

 

10.           To ensure orderly operation of the Building, no ice, mineral or other water, towels, newspapers, etc. shall be delivered to any leased area except by persons approved by Landlord.

 

  

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11.           Tenant shall not make or permit any vibration or improper, objectionable or unpleasant noises or odors in the Building or otherwise interfere in any way with other tenants or persons having business with them.

 

12.           No machinery of any kind (other than normal office equipment) shall be operated by any tenant on its leased area without Landlord’s prior written consent, nor shall any tenant use or keep in the Building any flammable or explosive fluid or substance (other than typical office supplies [e.g., photocopier toner] used in compliance with all Laws).

 

13.           Landlord will not be responsible for lost or stolen personal property, money or jewelry from tenant’s leased premises or public or Common Areas regardless of whether such loss occurs when the area is locked against entry or not.

 

14.           No vending or dispensing machines of any kind may be maintained in any leased premises without the prior written permission of Landlord.

 

15.           Tenant shall not conduct any activity on or about the Premises or Project which will draw pickets, demonstrators, or the like.

 

16.           All vehicles are to be currently licensed, in good operating condition, parked for business purposes having to do with tenant’s business operated in such tenant’s leased premises, parked within designated parking spaces, one vehicle to each space.  No vehicle shall be parked as a “billboard” vehicle in the Garage.  Any vehicle parked improperly may be towed away.  Tenant, tenant’s agents, employees, vendors and customers who do not operate or park their vehicles as required shall subject the vehicle to being towed at the expense of the owner or driver.  Landlord may place a “boot” on the vehicle to immobilize it and may levy a charge of Fifty Dollars ($50.00) to remove the “boot.”  Tenant shall indemnify, hold and save harmless Landlord of any liability arising from the towing or booting of any vehicles belonging to a Tenant Party.

 

17.           No tenant may enter into phone rooms, electrical rooms, mechanical rooms, or other service areas of the Building unless accompanied by Landlord or the Building manager.

 

18.           Tenant will not permit any Tenant Party to bring onto the Project any handgun, firearm or other weapons of any kind, illegal drugs or, unless expressly permitted by Landlord in writing, alcoholic beverages.

 

19.           Tenant shall not permit its employees, invitees or guests to smoke in such tenant’s leased premises or the lobbies, passages, corridors, elevators, vending rooms, rest rooms, stairways or any other area shared in common with other tenants in the Building, or permit its employees, invitees, or guests to loiter at the Building entrances for the purposes of smoking.  Landlord may, but shall not be required to, designate an area for smoking outside the Building.

 

20.           Any requests by Tenant will be attended to only upon application at the office of the property manager located at the Building (or such other address as may be designated by Landlord from time to time) (the “Property Management Office”).  Employees of the Project shall not perform work or do anything outside their regular duties unless under special instructions from the Property Management Office.

  

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EXHIBIT D

 

TENANT WORK LETTER

 

Tenant acknowledges and agrees that the Premises have previously been constructed including interior tenant improvements therein, and is satisfactory and shall be accepted by Tenant in its “AS-IS” condition and configuration as of the date of execution of the Lease and on the Commencement Date; provided, however, that Landlord shall construct certain modifications to the interior of the Premises pursuant to the Approved Working Drawings (as defined below), in accordance with the following provisions of this Tenant Work Letter (the “Tenant Work Letter”).  All references in this Tenant Work Letter to “the Lease” shall mean the relevant portions of the Lease to which this Tenant Work Letter is attached as Exhibit D.

 

SECTION 1

 

CONSTRUCTION DRAWINGS FOR THE PREMISES

 

Prior to the execution of the Lease, Landlord and Tenant have approved that certain Work Letter R2 for the construction of certain improvements in the Premises, which Work Letter R2 has been prepared by JPC Architects, and is dated August 19, 2013 (as used herein, the “Final Space Plan”), a reduced copy of which is attached hereto as Schedule 1 to Exhibit D.  Based upon and in conformity with the Final Space Plan, Landlord shall cause JPC Architects and engineers to prepare and deliver to Tenant, for Tenant’s approval, detailed specifications and engineered working drawings for the tenant improvements shown on the Final Space Plan (the “Working Drawings”).  The Working Drawings shall incorporate modifications to the Final Space Plan as necessary to comply with the floor load and other structural and system requirements of the Building.  To the extent that the finishes and specifications are not completely set forth in the Final Space Plan for any portion of the tenant improvements depicted thereon, the actual specifications and finish work shall be in accordance with the specifications for the Building’s standard components (the “Specifications”) to be used in the construction of tenant improvements (collectively, the Standard Improvement Package”), which Specifications have been received and reviewed by Tenant.  Landlord may make changes to the Specifications for the Standard Improvement Package from time to time.  Within five (5) Business Days after Tenant’s receipt of the Working Drawings, Tenant shall approve or disapprove the same, which approval shall not be unreasonably withheld; provided, however, that Tenant may only disapprove the Working Drawings to the extent such Working Drawings are inconsistent with the Final Space Plan and only if Tenant delivers to Landlord, within such three (3)-five- (5) Business Day period, specific changes proposed by Tenant that are consistent with the Final Space Plan and do not constitute changes that would result in any of the circumstances described in items (i) through (iv) below.  If any such revisions are timely and properly proposed by Tenant, Landlord shall cause its architect and engineers to revise the Working Drawings to incorporate such revisions and submit the same for Tenant’s approval in accordance with the foregoing provisions, and the parties shall follow the foregoing procedures for approving the Working Drawings until the same are finally approved by Landlord and Tenant.  Upon Landlord’s and Tenant’s approval of the Working Drawings, the same shall be referred to as the “Approved Working Drawings”.  Tenant shall make no changes, change orders or modifications to the Approved Working Drawings without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole discretion if such change or modification would:  (i) directly or indirectly delay the Substantial Completion of the Premises; (ii) increase the cost of designing or constructing the Tenant Improvements (as defined below) above the cost of the tenant improvements depicted in the Final Space Plan; (iii) be of a quality lower than the quality of the Specifications set forth in the Standard Improvement Package; and/or (iv) require any changes to the base, shell and core work, the Building’s Structure structural improvements or any of the Building’s Systems.  The Final Space Plan and Approved Working Drawings shall be collectively referred to herein as the “Construction Drawings”.  The tenant improvements shown on the Approved Working Drawings shall be referred to herein as the “Tenant Improvements”.

  

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SECTION 2

 

CONSTRUCTION AND COST OF TENANT IMPROVEMENTS

 

(a)           Landlord and Tenant hereby agree that Landlord shall, at Landlord’s expense (except as provided in this Section 2), cause a contractor designated by Landlord (the “Contractor”) to (i) obtain all applicable building permits for construction of the Tenant Improvements, and (ii) construct the Tenant Improvements as substantially depicted on the Construction Drawings, excepting only minor variations (i.e., variations that are not inconsistent with the intent of the Construction Drawings) as Landlord may deem advisable and any Change Orders (as defined below) approved by Landlord in compliance with such building permits and all Applicable Laws; provided, however, that the issuance of a temporary or permanent certificate of occupancy or final sign off on the job card upon Substantial Completion (as defined below) of the Tenant Improvements shall be deemed conclusive evidence of the compliance of the Tenant Improvements with Applicable Laws.  In the event that Tenant shall request any Change Orders that increase the cost of construction of the Tenant Improvements above of the cost of the tenant improvements depicted on the Final Space Plan, then Tenant shall pay such excess cost to Landlord in cash within five (5) days after Landlord’s request therefor, together with reasonable supporting backup documentation.  Notwithstanding the foregoing to the contrary, in no event shall Landlord be obligated to pay for any of Tenant’s furniture, computer systems, telephone systems, equipment or other personal property that may be depicted on the Construction Drawings, all of which items shall be paid for by Tenant.

 

(b)           Space Planning Allowance.  Landlord has previously paid to JPC Architects fees in connection with the creation of the initial space plan and revisions for the Premises and which amount shall not be deducted from the Tenant Improvement Allowance.

 

(c)           Moving Allowance.  Notwithstanding the foregoing, Tenant shall be entitled to a one-time allowance (the “Moving Allowance”) in an amount up to Sixty-Seven Thousand Seven Hundred Fifty and No/100 Dollars ($67,750.00) for the costs reasonably and actually incurred by Tenant and paid to third-parties in connection with its moving into the Premises including, but not limited to, furnishing the Premises, cabling the Premises, project management fees related to moving into the Premises and/or installation of a card key reader system.  The Moving Allowance will be disbursed by Landlord in accordance with Landlord’s standard disbursement procedures, including, without limitation, following Landlord’s receipt of (i) evidence (i.e., invoices, contracts, or other documentation reasonably satisfactory to Landlord) of Tenant’s payment of its moving costs, and (ii) written notice from Tenant requesting such disbursement.  In no event shall Landlord be obligated to disburse any amount in excess of the Moving Allowance  in connection with any moving costs incurred by Tenant (other than the Additional Moving Allowance provided below).  No portion of the Moving Allowance, if any, remaining ninety (90) days after Tenant’s move into the Premises shall be available for use by Tenant with the exception that any remaining balance shall be credited toward Tenant’s Rent hereunder.

 

SECTION 3

 

CHANGE ORDERS

 

If, prior to the Substantial Completion of the Tenant Improvements, Tenant shall request improvements or changes to the Premises in addition to, revision of or substitution for the Tenant Improvements identified on the Construction Drawings and Specifications, including, without limitation, any request for above-Building standard finishes or other detailed specifications (individually or collectively, “Change Orders”), Tenant shall deliver to Landlord for its approval plans and specifications for such change Orders.  If Landlord does not approve of the plans for such Change Orders, Landlord shall advise Tenant of the revisions required.  Tenant shall revise and redeliver the plans and specifications to Landlord within five (5) days of Landlord’s advice or Tenant shall be deemed to have abandoned its request for such Change Orders.  Tenant shall pay for all preparations and revisions of plans and specifications, and the increase in the cost of construction, resulting from all Change Orders as set forth in Section 2 above.

  

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SECTION 4

 

SUBSTANTIAL COMPLETION

 

4.1           Substantial Completion.  For purposes of the Lease, including this Tenant Work Letter, “Substantial Completion” (and any correlative variations thereof) of the Tenant Improvements shall mean completion of construction of the Tenant Improvements pursuant to the Approved Working Drawings, with the exception of any “Punch List Items” (as defined below), and any finish items and materials that are selected by Tenant, but that are not available within a reasonable time give the Estimated Delivery Date.  For the purposes of this Tenant Work Letter, the term “Punch List Items” shall mean minor details of construction or decoration or mechanical adjustments that can reasonably be corrected or competed after the date Tenant commences its operations within the Premises without causing substantial interference with Tenant’s operations therein.

 

4.2           Tenant Delays.  If there shall be a delay or there are delays in the Substantial Completion of the Tenant Improvements as a direct, indirect, partial, or total result of any of the following (individually, a “Tenant Delay”, and collectively, “Tenant Delays”):

 

(i)           Tenant’s failure to timely approve the Working Drawings or any other matter requiring Tenant’s approval;

 

(ii)           a breach by Tenant of the terms of this Tenant Work Letter or the Lease;

 

(iii)           Tenant’s request for changes in any of the Construction Drawings;

 

(iv)           Tenant’s requirement for materials, components, finishes or improvements that are not available in a commercially reasonable time given the Estimated Delivery Date, or which are different from, or not included in, the Standard Improvement Package;

 

(v)           any changes in the Construction Drawings and/or the Tenant Improvements required by applicable Laws if such changes are directly attributable to Tenant’s use of the Premises or Tenant’s specialized Tenant Improvements (as reasonably determined by Landlord);

 

(vi)           changes to the base, shell and core work, the Building’s Structure, including the base, shell and core thereof, or the Building’s Systems required by the Approved Working Drawings; or

 

(vii)           any other acts or omissions of Tenant, or its agents or employees;

 

then, notwithstanding anything to the contrary set forth in the Lease and regardless of the actual date of Substantial Completion of the Tenant Improvements, the Commencement Date (as set forth in the Basic Lease Information) shall be deemed to be the date the Commencement Date would have occurred if no Tenant Delay or Tenant Delays, as set forth above, had occurred.

 

SECTION 5

 

MISCELLANEOUS

 

5.1           Tenant’s Entry Into the Premises Prior to Substantial Completion.  Subject to the terms hereof and provided that Tenant and its agents do not interfere with Contractor’s work at the Project or in the Premises, at Landlord’s reasonable discretion Contractor shall allow Tenant access to the Premises prior to the Substantial Completion of the Tenant Improvements for the purpose of Tenant installing over-standard equipment or fixtures (including Tenant’s data and telephone equipment) in the Premises.  Prior to Tenant’s entry into the Premises as permitted by the terms of this Section 5.1, Tenant shall submit a schedule to Landlord and Contractor, for their approval, which schedule shall detail the timing and purpose of Tenant’s entry.  In connection with any such entry, Tenant acknowledges and agrees that Tenant’s employees, agents, contractors, consultants, workmen, mechanics,

  

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suppliers and invitees shall fully cooperate, work in harmony and not, in any manner, interfere with Landlord or Landlord’s contractors (including the Contractor), agents or representatives in performing work at the Project or in the Premises, or interfere with the general operation of the Project or any portion thereof.  If at any time any such person representing Tenant shall not be cooperative or shall otherwise cause or threaten to cause any such disharmony or interference, including, without limitation, labor disharmony, and Tenant fails to immediately institute and maintain corrective actions as directed by Landlord, then Landlord may revoke Tenant’s entry rights upon twenty-four (24) hours’ prior notice to Tenant.  Tenant acknowledges and agrees that any such entry into and occupancy of the Premises or any portion thereof by Tenant or any person or entity working for or on behalf of Tenant shall be deemed to be subject to all of the terms, covenants, conditions and provisions of the Lease, excluding only the covenant to pay Rent (until the occurrence of the Commencement Date).  Tenant further acknowledges and agrees that Landlord shall not be liable for any injury, loss or damage that may occur to any of Tenant’s work made in or about the Premises in connection with such entry or to any property placed therein prior to the Commencement Date, the same being at Tenant’s sole risk and liability.  Tenant shall be liable to Landlord for any damage to any portion of the Premises, including the Tenant Improvements, caused by Tenant or any of Tenant’s employees, agents, contractors, consultants, workmen, mechanics, suppliers and invitees.  In the event that the performance of Tenant’s work in connection with such entry causes extra costs to be incurred by Landlord or requires the use of any Building or other Project services, Tenant shall reimburse Landlord for such extra costs and/or shall pay Landlord for such Building or other Project services, as the case may be, at Landlord’s standard rates then in effect within thirty (30) days of Tenant’s receipt of an invoice from Landlord, together with reasonable supporting evidence.  In addition, Tenant shall hold Landlord harmless from and indemnify, protect and defend Landlord against any loss or damage to the Project or any portion thereof and against injury to any persons caused by Tenant’s actions pursuant to this Section 5.1.

 

5.2           Tenant’s Representative.  Tenant has designated Diana Vecchio of Commerce Real Estate Solutions as its sole representative with respect to the matters set forth in this Tenant Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.

 

5.3           Landlord’s Representative.  Landlord has designated Mr. Doug Swan as its sole representative with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Tenant Work Letter.

 

5.4           Time of the Essence in This Tenant Work Letter.  Unless otherwise indicated, all references herein to a “number of days” shall mean and refer to calendar days.  If any item requiring Landlord’s approval is timely disapproved by Landlord, the procedure for preparation of the item and approval thereof shall be repeated until the item is approved by Landlord.  In all instances where Tenant is required to approve or deliver an item, if no written notice of approval is given or the item is not delivered within the stated time period, at Landlord’s sole option, at the end of said period the item shall automatically be deemed approved or delivered by Tenant and the next succeeding item period shall commence.

 

5.5           Tenant’s Lease Default.  Notwithstanding any provision to the contrary contained in the Lease, if an Event of Default by Tenant as described in Section 17 of the Lease or any default by Tenant under this Tenant Work Letter has occurred at any time on or before Substantial Completion of the Tenant Improvements, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, at law and/or in equity, Landlord shall have the right to cause Contractor to cease the construction of the Tenant Improvements (in which case, Tenant shall be responsible for any delay in the Substantial Completion of the Tenant Improvements caused by such work stoppage as set forth in Section 4.2 of this Tenant Work Letter), and (ii) all other obligations of Landlord under the terms of this Tenant Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of the Lease or this Tenant Work Letter (in which case, Tenant shall be responsible for any delay in the Substantial Completion of the Tenant Improvements caused by such inaction by Landlord).  In addition, if the Lease is terminated prior to the Commencement Date, for any reason due to an Event of Default by Tenant as described in Section 17 of the Lease or any default by Tenant under this Tenant Work Letter, in addition to any other remedies available to Landlord under the Lease, at law and/or in equity, Tenant shall pay to Landlord, as additional Rent under the Lease, within five (5) days of receipt of a statement therefor, any and all costs incurred by Landlord (including any portion of the Tenant Improvement Allowance disbursed by Landlord) and not reimbursed or otherwise paid by Tenant through the date of such termination in connection with the Tenant Improvements to the extent planned, installed and/or constructed as of such date of termination, including, but not limited to, any costs related to the removal of all or any portion of the Tenant Improvements and restoration costs related thereto.

  

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SCHEDULE 1 TO EXHIBIT D

WORK LETTER R2

  

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EXHIBIT E

 

CONFIRMATION OF COMMENCEMENT DATE

 

[______________], 20[__]

 

Augme Technologies, Inc.

110 110th Avenue NE, 4th Floor

Bellevue, Washington 98004

 

	
  

	
Re:

	
Lease Agreement (the “Lease”) dated [_____________], 20[__], between W2007 Seattle Office 110 Atrium Place Realty, LLC, a Delaware limited liability company (“Landlord”), and Augme Technologies, Inc., a Washington corporation (“Tenant”).  Capitalized terms used herein but not defined shall be given the meanings assigned to them in the Lease.

 

Ladies and Gentlemen:

 

Landlord and Tenant agree as follows:

 

1.           Condition of Premises.  Tenant has accepted possession of the Premises pursuant to the Lease.  Any improvements required by the terms of the Lease to be made by Landlord have been completed to the full and complete satisfaction of Tenant in all respects except for the punch-list items described on Exhibit A hereto (the “Punch-list Items”), and except for such Punch-list Items, Landlord has fulfilled all of its duties under the Lease with respect to such initial tenant improvements.  Furthermore, Tenant acknowledges that the Premises are suitable for the Permitted Use.

 

2.           Commencement Date.  The Commencement Date of the Lease is [__________], 20[__].

 

3.           Expiration Date.  The Term is scheduled to expire on the last day of the sixty-sixth (66th) full calendar month of the Term, which date is June 30, 2019.

 

4.           Contact Person.  Tenant’s contact person in the Premises is:

 

_______________________________

 

_______________________________

 

_______________________________

 

Attention:  ______________________

 

Telephone:  ____- ___-_____

 

5.           Ratification.  Tenant hereby ratifies and confirms its obligations under the Lease, and represents and warrants to Landlord that it has no defenses thereto.  Additionally, Tenant further confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and effect, and (b) Tenant has no claims, counterclaims, setoffs or defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant.

 

6.           Binding Effect; Governing Law.  Except as modified hereby, the Lease shall remain in full effect and this letter shall be binding upon Landlord and Tenant and their respective successors and assigns.  If any inconsistency exists or arises between the terms of this letter and the terms of the Lease, the terms of this letter shall prevail.  This letter shall be governed by the laws of the State of Washington.

  

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Please indicate your agreement to the above matters by signing this letter in the space indicated below and returning an executed original to us.

 

Sincerely,

 

[PROPERTY MANAGEMENT COMPANY SIGNATURE BLOCK], on behalf of Landlord

 

________________________________________,

 

a _______________________________________ [Insert jurisdiction in which the Property Management Company is organized and type of entity]

 

 

By:           __________________________________

 

Name:                      __________________________________

 

Title:                      __________________________________

 

Agreed and accepted:

AUGME TECHNOLOGIES, INC.,

a Washington corporation

By:           ___________________________

Name:      ___________________________

Title:        ___________________________

 

  

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EXHIBIT A TO EXHIBIT E

 

PUNCH-LIST ITEMS

 

Please insert any punch-list items that remain to be performed by Landlord.  If no items are listed below by Tenant, none shall be deemed to exist.

  

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EXHIBIT F

 

FORM OF TENANT ESTOPPEL CERTIFICATE

 

The undersigned is the Tenant under the Lease (as defined below) between W2007 Seattle Office 110 Atrium Place Realty, LLC, a Delaware limited liability company, as Landlord, and the undersigned as Tenant, for the Premises on the 4th floor of the office building located at 110 110th Avenue, Bellevue, Washington 98004 and commonly known as 110 Atrium Place, and hereby certifies as follows:

 

1.           The Lease consists of the original Lease Agreement dated as of [___________], 20[___] between Tenant and Landlord[‘s predecessor-in-interest] and the following amendments or modifications thereto (if none, please state “none”):

 

______________________________________________________________________________

 

______________________________________________________________________________

 

______________________________________________________________________________

 

The documents listed above are herein collectively referred to as the “Lease” and represent the entire agreement between the parties with respect to the Premises.  All capitalized terms used herein but not defined shall be given the meaning assigned to them in the Lease.

 

2.           The Lease is in full force and effect and has not been modified, supplemented or amended in any way except as provided in Section 1 above.

 

3.           The Term commenced on [__________________], 20[__] and the Term expires, excluding any renewal options, on [_____________________], 20[__], and Tenant has no option, right of first refusal or other right to purchase all or any part of the Premises or the Project or interest therein, or any option to terminate or cancel the Lease, except as expressly set forth in the Lease.

 

4.           Tenant currently occupies the Premises described in the Lease and Tenant has not transferred, assigned, or sublet any portion of the Premises nor entered into any license or concession agreements with respect thereto except as follows (if none, please state “none”):

 

______________________________________________________________________________

 

______________________________________________________________________________

 

______________________________________________________________________________

 

5.           All monthly installments of Basic Rent, all Additional Rent and all monthly installments of estimated Additional Rent have been paid when due through [_____________]_.  The current monthly installment of Basic Rent is [$___________].

 

6.           All conditions of the Lease to be performed by Landlord necessary to the enforceability of the Lease have been satisfied and Landlord is not in default thereunder.  In addition, Tenant has not delivered any notice to Landlord regarding a default by Landlord thereunder.

 

7.           As of the date hereof, there are no existing defenses or offsets, or, to the undersigned’s knowledge, claims or any basis for a claim, that Tenant has against Landlord and no event has occurred and no condition exists, which, with the giving of notice or the passage of time, or both, will constitute a default under the Lease.

 

8.           No rental has been paid more than thirty (30) days in advance and no security deposit has been delivered to Landlord except as provided in the Lease.

  

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9.           If Tenant is a corporation, partnership or other business entity, each individual executing this Estoppel Certificate on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in the state in which the Premises are located if required by law and that Tenant has full right and authority to execute and deliver this Tenant Estoppel Certificate and that each person signing on behalf of Tenant is authorized to do so.

 

10.           There are no actions pending against Tenant under any bankruptcy or similar laws of the United States or any state.

 

11.           Other than in compliance with all applicable laws and incidental to the ordinary course of the use of the Premises, Tenant has not used, stored, or released any hazardous substances in the Premises.

 

12.           All tenant improvement work and other improvement work to be performed by Landlord under the Lease has been completed in accordance with the Lease and has been accepted by the undersigned and all reimbursements and allowances due to the undersigned under the Lease in connection with any tenant improvement work have been paid in full.

 

13.           Tenant’s current address for receipt of notices, elections, demands or other communications is [______________________________].

 

Tenant acknowledges that this Tenant Estoppel Certificate may be delivered to Landlord’s current and prospective mortgagees, trust deed holders, ground lessors and/or investors, or prospective purchasers, or investors or any of their respective lenders, and acknowledges that it recognizes that if so delivered, in addition to Landlord, said mortgagees, trust deed holders, ground lessors, investors or purchasers, and their respective lenders, successors and assigns will be relying upon the statements contained herein in disbursing loan advances or making a new loan or investing in or acquiring the property of which the Premises are a part, and/or in accepting an assignment, of the Lease documents as collateral security, and that receipt by it of this Tenant Estoppel Certificate is a condition of making of the loan, disbursing loan proceeds, or investing in, or acquiring, such property.  Tenant hereby agrees to execute such other and further estoppel certificates as any of Landlord’s current or prospective mortgagees, trust deed holders, ground lessors, investors, purchasers or any of their respective lenders, successors or assigns may require.

 

TENANT:

AUGME TECHNOLOGIES, INC.,

a Washington corporation

By:           ___________________________

 

Name:      ___________________________

 

Title:        ___________________________

 

  

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EXHIBIT G

 

PARKING

 

(1)           Tenant’s Parking Spaces.  Tenant shall have the right, but not the obligation, to license from Landlord throughout the Term of the Lease, up to thirty-one (31) non-exclusive, unreserved, first-come first-served parking spaces (“Tenant’s Standard Parking Spaces”) in the Project’s parking facilities (the “Garage”) at the parking ratio of two and three tenths (2.3) per each one thousand (1,000) rentable square feet of the Premises.  However, as an accommodation to Tenant, until the Building reaches an eighty-five percent (85%) occupancy level (as reasonably determined by Landlord), and subject to availability (as reasonably determined by Landlord), Tenant may license up to nine (9) additional non-exclusive, unreserved, first-come first-served parking spaces (“Tenant’s Additional Parking Spaces”), for an overall parking ratio of three (3) parking spaces per each one thousand (1,000) rentable square feet of the Premises.  Tenant’s Standard Parking Spaces and Tenant’s Additional Parking Spaces are hereinafter collectively referred to as “Tenant’s Parking Spaces,” all of which shall be subject to such terms, conditions and regulations as are from time to time applicable to patrons of the Garage.  The rate payable by Tenant for Tenant’s Parking Spaces (including tax) shall be as set forth hereinbelow:

 

	
Months 01 – 24:

Tenant’s Standard Parking Spaces:

Tenant’s Additional Parking Spaces:

	
 

$0.00 per parking space, per month

$100.00 per parking space, per month

 

	
Months 25 – 48:

Tenant’s Parking Spaces:

	
 

$100.00 per parking space, per month

 

	
Months 49 – 66:

Tenant’s Parking Spaces:

	
 

$150.00 per parking space, per month

 

During the Option Term (as defined in Exhibit J), if any, the parking rate shall be the rate charged from time to time to patrons of the Garage for other non-exclusive, unreserved, first-come, first-served parking spaces.  Throughout the Term, including the Option Term, if any, Tenant shall have the right at any time and from time to time, on at least forty-five (45) days’ prior notice to Landlord (which notice shall designate the first calendar month for the effective date of Tenant’s desired change) to increase or decrease the number of Tenant’s Parking Spaces but in no event shall Tenant have the right to license more than the then-applicable ratio set forth in the first paragraph of this Section 1.  Any time that the number of Tenant’s Additional Parking Spaces is decreased, on or before the effective date of such decrease, Tenant shall return to Landlord any additional parking passes, cards, stickers or other identification that may have been provided to Tenant with respect to such Additional Parking Spaces.  Upon reaching an eighty-five percent (85%) occupancy level (as reasonably determined by Landlord), Landlord shall have the right, but not the obligation, to institute valet assisted parking or other parking management systems within the Garage to help provide for Tenant’s Additional Parking Spaces, commencing as of the first day of the next full calendar month following Tenant’s receipt of written notice therefor from Landlord.  In addition to the rate payable for each of Tenant’s Additional Parking Spaces as provided above, Tenant shall also pay Tenant’s pro-rata share of the costs incurred by Landlord in providing valet parking service to the Building, which pro-rata share shall be determined on a monthly basis, and shall be based on the ratio that the number of Tenant’s Additional Parking Spaces being leased by Tenant during a calendar month bears to the total number of valet parking passes being leased at the Building during such calendar month (the “Valet Service Charge”).  The Valet Service Charge shall be payable by Tenant as part of Operating Costs under this Lease; provided, however, the Valet Service Charge shall not be determined with respect to the Base Year or any base year, expense stop or other similar provision, and Tenant shall be responsible for one hundred percent (100%) of its pro-rata share of the Valet Service Charge.

  

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(2)           Conditions on Use.  The use by Tenant, its employees, suppliers, shippers or customers and invitees, of the Garage shall be on the terms and conditions established by Landlord (or Landlord’s agent), and shall be subject to such other agreement between Landlord and Tenant as may hereinafter be established.  Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees to be loaded, unloaded or parked in areas other than those designated for such activities by Landlord.  Tenant shall not store or permit its employees to store any automobiles in the Garage, without the prior written consent of Landlord.  Except for emergency repairs, Tenant and its employees shall not perform any work on any automobiles while located in the Garage or on the Property.  If it is necessary for Tenant or its employees to leave an automobile in the Garage, overnight, Tenant shall provide Landlord with prior notice thereof designating the license plate number and model of such automobile.  If Tenant permits or allows any of the prohibited activities, then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be payable within thirty (30) days of Tenant’s receipt of an invoice from Landlord, together with reasonable supporting evidence.  Tenant shall have no right to assign or sublicense any of its rights in Tenant’s Parking Spaces, except as part of a permitted assignment of this Lease or a sublease of the Premises.  Landlord shall have the right to terminate Tenant’s rights hereunder (including termination of any parking agreement related thereto) with respect to any of Tenant’s Parking Spaces that Tenant desires to sublicense or assign except as part of a permitted assignment of this Lease or a sublease of the Premises.  Landlord may, in its discretion, allocate and assign parking spaces in the Garage among Tenant and other tenants and occupants in the Project so long as Tenant has access to Tenant’s Required Parking Spaces.  Landlord shall also have the right from time to time to promulgate reasonable rules and regulations regarding the Garage, Tenant’s Parking Spaces and the use thereof, including rules and regulations controlling the flow of traffic to and from various areas of the Garage, the angle and direction of parking and the like.  Tenant shall comply with and cause its employees to comply with all such rules and regulations, all reasonable additions and amendments thereto, and the terms and provisions hereof.  Landlord may elect to provide parking cards or keys to control access to the Garage.  In such event, Landlord shall provide Tenant with one (1) card or key for each of Tenant’s Parking Spaces, provided that Landlord shall have the right to require Tenant or its employees to place a deposit on such access cards or keys and to pay a fee for any lost or damaged cards or keys.  Tenant’s use of the Garage shall be at Tenant’s sole risk, and Landlord shall have no liability for any personal injury or damage or theft of any vehicles or other property occurring in the Garage, regardless of whether such loss or theft occurs when the Garage or other areas therein are locked or otherwise secured.  Except as caused by the negligence or willful misconduct of Landlord and without limiting the terms of the preceding sentence, Landlord shall not be liable for any loss, injury or damage to persons using the Garage, or automobiles or other property therein, it being agreed that, to the fullest extent permitted by law, the use of the Unreserved Spaces shall be at the sole risk of Tenant and its employees.  Landlord specifically reserves the right to change the size, configuration, design, layout, location and all other aspects of the Garage and Tenant acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without any abatement of Rent under this Lease, from time to time, close off or restrict access to the Garage or relocate Tenant’s parking to other parking structures and/or surface parking areas within a reasonable distance of the Project, for purposes of permitting or facilitating construction, repair, maintenance, alteration or improvements with respect to the Garage, or to accommodate or facilitate renovation, alteration, construction or other modification of other improvements or structures located at the Project or at the location of the Garage, as the case may be, or if required as a result of any Force Majeure events.  If, for any reason, Landlord is unable to provide Tenant with the use all or any portion of the Tenant’s Parking Spaces for a period in excess of five (5) consecutive business days, then Tenant’s obligation to pay for such Tenant’s Parking Spaces shall be abated commencing on the expiration of such five (5) business-day period and continuing until Tenant’s use thereof is restored, and in the event Landlord is unable to provide Tenant with the use of all or any portion of Tenant’s Parking Spaces for more than sixty (60) days, then Landlord shall provide for alternate unreserved parking for Tenant, which alternate parking is to be located within four (4) blocks of the Building, and in no event shall the rate payable by Tenant for such alternate parking be in excess of the then-applicable rate for unreserved parking at the Garage.  Except as provided in the immediately preceding sentence, no deductions or allowances shall be made for any days when Tenant and/or any of its employees does not utilize the Garage or any of Tenant’s Parking Spaces.  Landlord may delegate its responsibilities hereunder to a parking operator, in which case such parking operator shall have all the rights of control attributed hereby to Landlord.  If requested by Landlord, Tenant shall execute and deliver to Landlord or the parking operator, as applicable, the standard parking agreement used by Landlord or the parking operator for the Parking Spaces.  Landlord shall have no liability for claims arising through acts or omissions of any such parking operator, except as otherwise provided in this Lease.

 

  

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EXHIBIT H

 

RENT ABATEMENT PROVISION

 

Basic Rent shall be conditionally abated during the first seven (7) full calendar months of the initial Term (the “Abatement Period”).  As provided in this Lease, Tenant shall, contemporaneously with its execution of this Lease, pay to Landlord Basic Rent for the eighth (8th) month of the Term; thereafter, Tenant shall make Basic Rent payments as otherwise provided in this Lease.  Notwithstanding such abatement of Basic Rent (a) all other sums due under this Lease, including Additional Rent, shall be payable as provided in this Lease, and (b) any increases in Basic Rent set forth in this Lease shall occur on the dates scheduled therefor.  The amount of Basic Rent conditionally abated for the Abatement Period pursuant to this Exhibit H shall be referred to herein as the “Abated Rent”.

 

The Abated Rent provided for in this Exhibit H is conditioned upon there not being any Event of Default (beyond the applicable notice and cure period set forth in this Lease) by Tenant under this Lease during the Abatement Period, and in the event there is such an Event of Default by Tenant during the Abatement Period, then (i) the Abatement Period shall immediately terminate, (ii) Tenant shall not be entitled to any further Abated Rent, and (iii) Tenant shall immediately begin paying Basic Rent for the Premises in the amount set forth in the Basic Lease Information of this Lease.

  

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EXHIBIT I

 

TENANT’S RIGHT TO TERMINATE

 

1.           Exercise of Right to Terminate.  Tenant shall have the one-time right to terminate the Lease (the “Right to Terminate”) at any time between the forty-second (42nd) and the forty-seventh (47th) full calendar months of the initial Term of this Lease.  In order to exercise such Right to Terminate, Tenant shall give Landlord not less than nine (9) months and not more than twelve (12) months prior written notice therefor (the “Termination Notice”), which Termination Notice shall specify the date (the “Termination Date”) upon which such Right of Terminate is to occur, and in any event such Termination Date shall be on the last day of a calendar month.  

2.           Termination Fee.  Concurrently with the delivery of such Termination Notice, Tenant shall deliver to Landlord a “Termination Fee,” as that term is defined hereinbelow, as consideration for and as a condition precedent to such termination of the Premises. Upon Tenant's delivery of the Termination Notice to Landlord, all of Tenant's rights under Exhibit J, the Extension Option, and Exhibit K, the Right of First Refusal, shall automatically terminate and be of no further force and effect.  As used in this Lease, the "Termination Fee" shall be equal to the unamortized value as of the Termination Date of the sum of (A) the leasing costs, including the Tenant Improvement Allowance actually spent by Landlord in further improving the Premises beyond its current condition as of the date of this Lease, (B) the Broker commissions paid by Landlord in connection with this Lease, (C) the Abated Rent provided to Tenant under the terms of Exhibit H of the Lease, and (D) the Moving Allowance provided to Tenant under the terms of Exhibit D, which amortization shall be calculated on a straight-line basis, resulting in an equal amount of principal being reduced each month, with interest at a rate of eight percent (8%), over a fifty-nine (59) month period commencing on the first day of the eighth (8th) full calendar month of the initial Term.

3.           Termination of Lease.  Provided that Tenant timely elects to exercise its Right to Terminate in accordance with this Exhibit I, then this Lease shall automatically terminate and be of no further force or effect (and Landlord and Tenant shall be relieved of their respective obligations under this Lease) as of the Termination Date, except with respect to those obligations set forth in this Lease which specifically survive the expiration or earlier termination of this Lease.

4.           Rights Personal to Tenant.  The Termination Right is personal to the Original Tenant, and may be exercised only by the Original Tenant or by a Permitted Transferee to whom Original Tenant’s entire interest in this Lease or the Premises has been transferred in a Permitted Transfer under the terms of Section 10(g) of this Lease, shall not be assigned or otherwise transferred, voluntarily or involuntarily to, or exercised by, any person other than the Original Tenant or such Permitted Transferee, and shall only be exercisable if the Original Tenant or such Permitted Transferee occupies the entire Premises at the time Landlord receives the Termination Notice.  If the Original Tenant shall transfer this Lease (or any interest therein), then simultaneously with such transfer, Tenant’s Right to Terminate shall terminate and be of no further force or effect.  No transferee of Tenant’s interest in this Lease (or any interest therein) or any portion of the  Premises (other than a  Permitted Transferee to whom Original Tenant’s entire interest in this Lease or the Premises has been transferred in a Permitted Transfer) shall have any right to exercise the option right set forth in this Exhibit I.

5.           No Tenant Default.  Notwithstanding anything to the contrary contained in this Exhibit I, Tenant shall have no right to exercise Tenant’s Right to Terminate set forth in this Exhibit I, if Tenant is in uncured default under this Lease as of the date of Tenant's delivery to Landlord of the Termination Notice or, at Landlord's option, at any time prior to the Termination Date.  If Tenant is in default under the Lease following Tenant's delivery to Landlord of the Termination Notice but prior to the Termination Date, then, at Landlord's option, the Termination Notice shall be null and void and of no further force or effect. 

  

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EXHIBIT J

 

EXTENSION OPTION

 

(1)           Option Terms.  Subject to the terms and conditions set forth below, Tenant shall have one (1) option (an “Extension Option”) to extend the Term for a period of five (5) years (the “Option Term”).  If Tenant properly exercises the Extension Option, all of the terms, covenants and conditions of this Lease shall continue in full force and effect during the Option Term, including provisions regarding payment of Rent, which shall remain payable on the terms herein set forth, except that (a) the Basic Rent payable by Tenant during the Option Term shall be as calculated in accordance with Section 3 and Section 4 below, (b) Tenant shall continue to possess and occupy the Premises in their existing condition, “as is” as of the commencement of such Option Term, and Landlord shall have no obligation to repair, remodel, improve or alter the Premises, to perform any other construction or other work of improvement upon the Premises or the Project, and (c) Tenant shall have no further rights to extend the Term of this Lease after the expiration of the Option Term.

 

(2)           Exercise.  To exercise the Extension Option, Tenant must deliver an irrevocable, unconditional binding notice to Landlord (“Exercise Notice”) not sooner than twelve (12) months, nor later than nine (9) months, prior to the Expiration Date, the time of such exercise being of the essence.  If Tenant fails to timely give its notice of exercise with respect to the Extension Option, Tenant will be deemed to have waived the Extension Option.

 

(3)           Market Rate Calculation.  The Basic Rent payable by Tenant for the Premises during the Option Term shall be the Market Rate (as defined below) for the Premises, valued as of the commencement of the Option Term, determined in the manner hereinafter provided.  As used herein, the term “Market Rate” shall mean the annual amount of Basic Rent at which tenants, as of the commencement of the Option Term, are leasing non-sublease, non-encumbered, non-equity space under then-prevailing ordinary rental market practices (e.g., not pursuant to extraordinary rental, promotional deals or other concessions to tenants that deviate from what is the then-prevailing ordinary practice), at arm’s length, that is comparable to the Premises within the Building or other comparable first-class office buildings in the Bellevue central business district, Washington area (the “Comparison Buildings”), based upon binding lease transactions for tenants in the Comparison Buildings that, where possible, commence or are to commence within six (6) months prior to or within six (6) months after the commencement of the Option Term (the “Comparison Leases”). Rental rates payable under Comparison Leases shall be adjusted to account for variations between this Lease and the Comparison Leases with respect to:  (a) the length of the Option Term compared to the lease or renewal term of the Comparison Leases; (b) rental structure, including, rental rates per rentable square foot (including type, gross or net, and if gross, adjusting for the resetting of the base year or expense stop), additional rental, annual rent adjustments, escalation provisions, all other payments and escalations; (c) the size of the Premises compared to the size of the premises of the Comparison Leases; (d) free rent, moving expenses and other cash payments, allowances or other monetary concessions affecting the rental rate; (e) the age and quality of construction of the buildings; and (f) leasehold improvements and/or allowances, taking into account the value of existing leasehold improvements to the existing tenant.

 

(4)           Basic Rent Determination.  The Basic Rent payable by Tenant for the Premises during the Option Term shall be determined as follows:

 

(a)           If Tenant provides Landlord with its Exercise Notice, then, prior to the commencement of the Option Term, Landlord shall deliver to Tenant a good faith written proposal of the Market Rate. Within twenty-one (21) days after receipt of Landlord’s proposal, Tenant shall notify Landlord in writing (1) that Tenant accepts Landlord’s proposal or (2) that Tenant elects to submit the determination of Market Rate to arbitration in accordance with Section 4(b) through 4(d) below.  If Tenant does not give Landlord a timely notice in response to Landlord’s proposal, Landlord’s proposal of Market Rate shall be binding upon Tenant.

 

(b)           If Tenant timely elects to submit the determination of Market Rate to arbitration, Landlord and Tenant shall first negotiate in good faith in an attempt to determine the Market Rate.  If Landlord and Tenant are able to agree within thirty (30) days following the delivery of Tenant’s notice to Landlord electing arbitration (or if Tenant accepts Landlord’s initial proposal), then such agreement shall constitute a determination of Market Rate for purposes of this Section, and the parties shall immediately execute an amendment to this Lease stating the Basic Rent for the Option Term; provided, however, that an otherwise valid exercise

  

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of the Extension Option shall be fully effective whether or not such amendment is executed and delivered.  If Landlord and Tenant are unable to agree on the Market Rate within such thirty (30)-day negotiating period, then within fifteen (15) days after the expiration of such negotiating period, the parties shall meet and concurrently deliver to each other in envelopes their respective good faith estimates of the Market Rate (set forth on a net effective rentable square foot per annum basis).  If the higher of such estimates is not more than one hundred five percent (105%) of the lower, then the Market Rate shall be the average of the two.  Otherwise, the dispute shall be resolved by arbitration in accordance with Sections 4(c) and 4(d) below.

 

(c)           Within fifteen (15) days after the exchange of estimates, the parties shall select as an arbitrator an independent member of the Appraisal Institute who has been active during the fifteen (15) year period ending on the date of such appointment in appraising leases of office space in Comparison Buildings (a “Qualified Appraiser”).  If the parties cannot agree on a Qualified Appraiser, then within ten (10) days after the expiration of such fifteen (15)-day period, each shall select a Qualified Appraiser and within ten (10) days thereafter the two (2) appointed Qualified Appraisers shall select an independent Qualified Appraiser and the independent Qualified Appraiser shall be the sole arbitrator.  If one party shall fail to select a Qualified Appraiser within the first ten (10)-day period, then the Qualified Appraiser chosen by the other party shall be the sole arbitrator.

 

(d)           Within twenty-one (21) days after submission of the matter to the arbitrator, the arbitrator shall determine the Market Rate by choosing whichever of the estimates submitted by Landlord and Tenant the arbitrator judges to be more accurate.  The arbitrator shall notify Landlord and Tenant of its decision, which shall be final and binding.  If the arbitrator believes that expert advice would materially assist him, the arbitrator may retain one or more qualified persons to provide expert advice.  The fees of the arbitrator and the expenses of the arbitration proceeding, including the fees of any expert witnesses retained by the arbitrator, shall be paid by the party whose estimate is not selected.  Each party shall pay the fees of its respective counsel and the fees of any witness called by that party.

 

(e)           Until the matter is resolved by agreement between the parties or a decision is rendered in any arbitration commenced pursuant to this Exhibit J, Tenant’s monthly payments of Basic Rent shall be in an amount equal to Landlord’s determination of the Market Rate.  Within ten (10) Business Days following the resolution of such dispute by the parties or the decision of the arbitrator, as applicable, Tenant shall pay to Landlord, or Landlord shall pay to Tenant, the amount of any deficiency or excess, as the case may be, in the Basic Rent theretofore paid.

 

(5)           Rights Personal to Tenant.  The Extension Option is personal to, may be exercised only by the Original Tenant or by a Permitted Transferee to whom Original Tenant’s entire interest in this Lease or the Premises has been transferred in a Permitted Transfer under the terms of Section 10(h) of this Lease, shall not be assigned or otherwise transferred, voluntarily or involuntarily to, or exercised by, any person other than the Original Tenant or such Permitted Transferee, and shall only be exercisable if the Original Tenant or such Permitted Transferee occupies one hundred percent (100%) of the Premises at the time Landlord or such Permitted Transferee receives the Exercise Notice and at the commencement date of the Option Term.  If the Original Tenant shall transfer this Lease (or any interest therein), or any portion of the Premises (other than a transfer of its entire interest in this Lease or the Premises to a Permitted Transferee pursuant to a Permitted Transfer), then simultaneously with such transfer Tenant’s Extension Option shall terminate and be of no further force or effect.  No transferee of Tenant’s interest in this Lease (or any interest therein) or any portion of the  Premises (other than a  Permitted Transferee to whom Original Tenant’s entire interest in this Lease or the Premises has been transferred in a Permitted Transfer) shall have any right to extend the Term pursuant to this Exhibit J.

 

(6)           Conditions of Exercise.  Notwithstanding anything in this Exhibit J to the contrary, if an uncured Event of Default has occurred on or prior to the date Tenant’s Exercise Notice is received by Landlord or at any time thereafter until the commencement of the Option Term, Landlord shall have the right, in addition to all of its other rights and remedies under this Lease (but not the obligation), to unilaterally revoke Tenant’s exercise of the Extension Option, in which case this Lease shall expire on the Expiration Date, unless earlier terminated pursuant to the terms hereof, and Tenant shall have no further rights under this Lease to renew or extend the Term.

  

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EXHIBIT K

 

RIGHT OF FIRST REFUSAL

 

(1)           Right of First Refusal.  Tenant shall have a one-time right of first refusal (the “Right of First Refusal”) during the initial Term of this Lease to lease space in the Building listed on Schedule 1 attached to this Exhibit K (“First Refusal Space”) identified in an offer to lease received by Landlord from a third party, who is not an Affiliate of Landlord, which offer Landlord is prepared to accept (“Offer”).  If not earlier terminated, Tenant’s rights pursuant to this Exhibit K shall automatically terminate on the expiration or earlier termination of this Lease.

 

(2)           Exercise Conditions and Procedures.  Tenant’s right to exercise the Right of First Refusal with respect to an Offer is subject to the following conditions:  (i) that this Lease is in full force and effect on the date Landlord receives the Offer, on the date Landlord receives the ROFR Acceptance Notice (as defined below) with respect to such Offer and on the date Tenant is scheduled to accept possession of the First Refusal Space identified in such Offer; (ii) that an Uncured Event of Default has not occurred on the date Landlord receives the Offer; (iii) that an Uncured Event of Default has not occurred on the date Landlord receives the ROFR Acceptance Notice with respect to such Offer or on the date Tenant is scheduled to accept possession of the First Refusal Space identified in such Offer; (iv) that the Right of First Refusal has not terminated as of the date that Landlord receives the Offer; and (v) that Tenant’s then current financial condition as set forth in its most recent financial statements demonstrates in Landlord’s discretion that Tenant’s Tangible Net Worth is at least equal to its Tangible Net Worth at the time this Lease was executed and delivered by Tenant.  Provided that the conditions set forth set forth in clauses (i), (ii), (iii), (iv) and (v) above are satisfied, Landlord shall give notice to Tenant of the terms and conditions of each Offer received prior to the termination of the Right of First Refusal (the “Offer Notice”) which shall include a copy of the acceptable Offer described herein.  On or before the date that is five (5) business days after Tenant’s receipt of Landlord’s notice (the “ROFR Acceptance Deadline”) Tenant may, at its option, accept the terms and conditions of such Offer by notifying Landlord of its irrevocable, unconditional exercise of the Right of First Refusal with respect to such Offer (each a “ROFR Acceptance Notice”).  Tenant may only exercise its Right of First Refusal with respect to all of the First Refusal Space identified in the Offer Notice.  Tenant’s ROFR Acceptance Notice shall include the financial information required by clause (v) above and such other financial information as may be reasonably requested by Landlord.  In the event of a failure of any of the conditions set forth hereinabove for the exercise of the Right of First Refusal (including Landlord’s failure to receive a ROFR Acceptance Notice from Tenant on or prior to the ROFR Acceptance Deadline), Tenant shall have no further rights hereunder to lease the First Refusal  Space identified in the applicable Offer Notice.  Time is of the essence of this provision and Tenant acknowledges and agrees that Landlord will have no obligation to lease to Tenant any First Refusal Space identified in an Offer Notice if Tenant does not deliver the ROFR Acceptance Notice to Landlord on or before the ROFR Acceptance Deadline.  Any qualified or conditional acceptance by Tenant of an Offer Notice shall be deemed to be a counter-offer to, and a rejection of, such Offer Notice.  If Tenant’s ROFR Acceptance Notice is not a written, unconditional, irrevocable acceptance of the Offer Notice, or is not delivered by the ROFR Acceptance Deadline, then Tenant shall be deemed to have rejected the First Offer Notice.  If Tenant rejects or is deemed to have rejected a First Offer Notice for any reason, the Right of First Refusal shall automatically terminate and be of no further force or effect with respect to the First Refusal Space identified in the Offer Notice and Landlord shall thereafter have the right to lease all or any portion of such First Refusal Space to third party making the Offer on any terms and conditions Landlord desires (including terms and conditions more favorable than the terms and conditions set forth in such Offer Notice), free of the rights of Tenant under this Exhibit K.  In the event the third party making such Offer does not lease the First Refusal Space identified therein within two hundred ten (210) days after the date of the ROFO Acceptance Deadline, Landlord shall be obligated to follow the foregoing procedure for any subsequent Offer that it receives with respect to such First Refusal Space prior to the termination of the Right of First Refusal until such First Refusal Space is leased to a third party.  If Tenant exercises the Right of First Refusal, then effective on the delivery date specified in the applicable Offer, the First Refusal Space identified in such Offer shall automatically be included in the Premises on all of the terms and subject to the conditions of this Lease, except as set forth in the applicable Offer and as follows:

 

(a)           Unless a new lease is entered into under Section (1)(c) below, Tenant’s Proportionate Share, shall be recalculated, using the total rentable square footage of the Premises, as increased by the First Refusal Space identified in the applicable Offer.

  

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(b)           Except as set forth in the applicable Offer, the First Refusal Space identified therein shall be leased to Tenant on an “AS IS” basis and Landlord shall have no obligation to repair, remodel, improve or alter such First Refusal Space, to perform any other construction or other work of improvement in the Premises or at the Project, or grant Tenant any construction, refurbishment, improvement or other allowance whatsoever with respect such First refusal Space; provided, however, that an otherwise valid exercise of the Right of First Refusal shall be fully effective whether or not any such amendment is executed and delivered.

 

(c)           Tenant shall execute an amendment to this Lease adding such First Refusal Space to this Lease at the rent and for the term and on the other terms and conditions set forth in the applicable Offer within ten (10) business days after receipt of such document from Landlord

 

(3)           Personal to Tenant.  The Right of First Refusal is personal to, may be exercised only by, the Original Tenant or by a Permitted Transferee to whom Original Tenant’s entire interest in this Lease or the Premises has been transferred in a Permitted Transfer under the terms of Section 10(g) of this Lease, shall not be assigned or otherwise transferred, voluntarily or involuntarily to, or exercised by, any person other than the Original Tenant or such Permitted Transferee, and shall only be exercisable if the Original Tenant or such Permitted Transferee occupies one hundred percent (100%) of the Premises on the date Landlord receives the applicable ROFR Acceptance Notice and on the date Tenant or such Permitted Transferee is scheduled to accept possession of the First Refusal Space identified therein as provided in this Exhibit K.  If the Original Tenant shall transfer this Lease (or any interest therein), or any portion of the Premises (other than a transfer of its entire interest in this Lease or the Premises to a Permitted Transferee pursuant to a Permitted Transfer), then simultaneously with such transfer Tenant’s Right of First Refusal shall terminate and be of no further force or effect.  No transferee of Tenant’s interest in this Lease (or any interest therein) or any portion of the  Premises (other than a  Permitted Transferee to whom Original Tenant’s entire interest in this Lease or the Premises has been transferred in a Permitted Transfer) shall have any right to lease First Refusal Space pursuant to this Exhibit K.

 

(4)           Limits on Landlord’s Obligations.  Landlord shall have no obligation to offer for lease to third parties all or any portion of the First Refusal Space that becomes available for lease, and notwithstanding anything herein to the contrary, Tenant’s Right of First Refusal shall be subject and subordinate to all rights of expansion, renewal, extension, first refusal, first offer or similar rights for all or any portion of the First Refusal Space granted to any tenants of the Project, whether or not the extension or renewal of an existing tenant is pursuant to an express written provision in such tenant’s lease and without regard to whether any such renewal is characterized by the parties as a “renewal” or a “new lease”.

 

(5)           Events Not Triggering Right of First Refusal.  Anything contained herein to the contrary notwithstanding, the Right of First Refusal shall be deemed not to have arisen or to be in force and effect if any of the following events occur:  (a) the sale or transfer of stock or other ownership interests in Landlord, (b) Landlord’s entering into a management or similar agreement that transfers control of the First Refusal Space; (c) Landlord’s entering into a ground lease, mortgage deed of trust or other encumbrance respecting all or any portion of the First Refusal Space; or (iv) Landlord’s entering into a contract for the sale of the Project or the Building.

 

(6)           Cross Default.  Tenant agrees that any default by it under this Lease shall be deemed to constitute a like default under any new lease or leases for First Refusal Space executed pursuant hereto.  Tenant further agrees that any new lease or leases for First Refusal Space shall provide that any default by Tenant thereunder shall be deemed to be a like default under this Lease.

  

-76-

  

 

SCHEDULE 1

 

EXHIBIT K

 

FIRST REFUSAL SPACEExhibit 4.7

 

 

DATAWATCH CORPORATION,

 

ISSUER

 

and

 

[                ],

 

TRUSTEE

 

INDENTURE

 

Dated as of [          ], 201[ ]

 

Senior Debt Securities

 

  

    	  

    	 

    
 

 

CROSS-REFERENCE TABLE (1)

	  	  	  
	
Section of

	  	  
	
Trust Indenture Act

	  	
Section of

	
Of 1939, as amended

	  	
Indenture

	
310(a)

	  	
7.09

	
310(b)

	  	
7.08

	  	  	
7.10

	
310(c)

	  	
Inapplicable

	
311(a)

	  	
7.13

	
311(b)

	  	
7.13

	
311(c)

	  	
Inapplicable

	
312(a)

	  	
5.01

	  	  	
5.02(a)

	
312(b)

	  	
5.02(c)

	
312(c)

	  	
5.02(c)

	
313(a)

	  	
5.04(a)

	
313(b)

	  	
5.04(b)

	
313(c)

	  	
5.04(a)

	  	  	
5.04(b)

	
313(d)

	  	
5.04(c)

	
314(a)

	  	
5.03

	  	  	
13.05(c)

	
314(b)

	  	
Inapplicable

	
314(c)

	  	
13.05

	
314(d)

	  	
Inapplicable

	
314(e)

	  	
13.05(b)

	
314(f)

	  	
Inapplicable

	
315(a)

	  	
7.01(b)

	  	  	
7.02

	
315(b)

	  	
5.04(d)

	
315(c)

	  	
7.01(a)

	
315(d)

	  	
7.01(b)

	  	  	
7.02

	
315(e)

	  	
6.07

	
316(a)

	  	
6.06

	  	  	
8.04

	
316(b)

	  	
6.04

	
316(c)

	  	
8.01

	
317(a)

	  	
6.02

	
317(b)

	  	
4.03

	
318(a)

	  	
13.07

 

	  	  	  
	
1

	  	
This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

 

    	  

    	 

    
 

 

TABLE OF CONTENTS(2)

	  	  	  	  
	  	  	
Page

	
ARTICLE I

	
DEFINITIONS

	
SECTION 1.01 Definitions of Terms

	  	
1

	  
	  	  	  	  
	
ARTICLE II

	
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES

	
SECTION 2.01 Designation and Terms of Securities

	  	
3

	  
	
SECTION 2.02 Form of Securities and Trustee’s Certificate

	  	
4

	  
	
SECTION 2.03 Denominations; Provisions for Payment

	  	
5

	  
	
SECTION 2.04 Execution and Authentications

	  	
6

	  
	
SECTION 2.05 Registration of Transfer and Exchange

	  	
6

	  
	
SECTION 2.06 Temporary Securities

	  	
7

	  
	
SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Securities

	  	
7

	  
	
SECTION 2.08 Cancellation

	  	
8

	  
	
SECTION 2.09 Benefits of Indenture

	  	
8

	  
	
SECTION 2.10 Authenticating Agent

	  	
8

	  
	
SECTION 2.11 Global Securities

	  	
8

	  
	  	  	  	  
	
ARTICLE III

	
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

	
SECTION 3.01 Redemption

	  	
9

	  
	
SECTION 3.02 Notice of Redemption

	  	
9

	  
	
SECTION 3.03 Payment Upon Redemption

	  	
10

	  
	
SECTION 3.04 Sinking Fund

	  	
10

	  
	
SECTION 3.05 Satisfaction of Sinking Fund Payments with Securities

	  	
10

	  
	
SECTION 3.06 Redemption of Securities for Sinking Fund

	  	
11

	  
	  	  	  	  
	
ARTICLE IV

	
COVENANTS

	
SECTION 4.01 Payment of Principal, Premium and Interest

	  	
11

	  
	
SECTION 4.02 Maintenance of Office or Agency

	  	
11

	  
	
SECTION 4.03 Paying Agents

	  	
11

	  
	
SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee

	  	
12

	  
	  	  	  	  
	
ARTICLE V

	  	  	  	  
	
SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

	  	  	  	  
	
SECTION 5.01 Company to Furnish Trustee Names and Addresses of Securityholders

	  	
12

	  
	
SECTION 5.02 Preservation Of Information; Communications With Securityholders

	  	
12

	  
	
SECTION 5.03 Reports by the Company

	  	
12

	  
	
SECTION 5.04 Reports by the Trustee

	  	
13

	  

 

    	  

    	 

    
 

 

	  	  	
Page

	
ARTICLE VI

	  	  	  	  
	
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

	  	  	  	  
	
SECTION 6.01 Events of Default

	  	
13

	  
	
SECTION 6.02 Suits for Enforcement by Trustee

	  	
14

	  
	
SECTION 6.03 Application of Moneys Collected

	  	
15

	  
	
SECTION 6.04 Limitation on Suits

	  	
15

	  
	
SECTION 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver

	  	
16

	  
	
SECTION 6.06 Control by Securityholders

	  	
16

	  
	
SECTION 6.07 Undertaking to Pay Costs

	  	
16

	  
	  	  	  	  
	
ARTICLE VII

	
CONCERNING THE TRUSTEE

	
SECTION 7.01 Certain Duties and Responsibilities of Trustee

	  	
16

	  
	
SECTION 7.02 Certain Rights of Trustee

	  	
17

	  
	
SECTION 7.03 Trustee Not Responsible for Recitals or Issuance or Securities

	  	
18

	  
	
SECTION 7.04 May Hold Securities

	  	
18

	  
	
SECTION 7.05 Moneys Held in Trust

	  	
18

	  
	
SECTION 7.06 Compensation and Reimbursement

	  	
18

	  
	
SECTION 7.07 Reliance on Officers’ Certificate

	  	
19

	  
	
SECTION 7.08 Disqualification; Conflicting Interests

	  	
19

	  
	
SECTION 7.09 Corporate Trustee Required; Eligibility

	  	
19

	  
	
SECTION 7.10 Resignation and Removal; Appointment of Successor

	  	
19

	  
	
SECTION 7.11 Acceptance of Appointment By Successor

	  	
20

	  
	
SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business

	  	
21

	  
	
SECTION 7.13 Preferential Collection of Claims Against the Company

	  	
21

	  
	  	  	  	  
	
ARTICLE VIII

	
CONCERNING THE SECURITYHOLDERS

	
SECTION 8.01 Evidence of Action by Securityholders

	  	
21

	  
	
SECTION 8.02 Proof of Execution by Securityholders

	  	
22

	  
	
SECTION 8.03 Who May be Deemed Owners

	  	
22

	  
	
SECTION 8.04 Certain Securities Owned by Company Disregarded

	  	
22

	  
	
SECTION 8.05 Actions Binding on Future Securityholders

	  	
22

	  
	  	  	  	  
	
ARTICLE IX

	
SUPPLEMENTAL INDENTURES

	
SECTION 9.01 Supplemental Indentures Without the Consent of Securityholders

	  	
23

	  
	
SECTION 9.02 Supplemental Indentures With Consent of Securityholders

	  	
23

	  
	
SECTION 9.03 Effect of Supplemental Indentures

	  	
23

	  
	
SECTION 9.04 Securities Affected by Supplemental Indentures

	  	
24

	  
	
SECTION 9.05 Execution of Supplemental Indentures

	  	
24

	  
	  	  	  	  
	
ARTICLE X

	
SUCCESSOR ENTITY

	
SECTION 10.01 Company May Consolidate, Etc.

	  	
24

	  
	
SECTION 10.02 Successor Entity Substituted

	  	
25

	  
	
SECTION 10.03 Evidence of Consolidation, Etc. to Trustee

	  	
25

	  

 

    	ii

    	 

    
 

 

	  	  	  	  
	  	  	
Page

	
ARTICLE XI

	  	  	  	  
	
SATISFACTION AND DISCHARGE

	  	  	  	  
	
SECTION 11.01 Satisfaction and Discharge of Indenture

	  	
25

	  
	
SECTION 11.02 Discharge of Obligations

	  	
25

	  
	
SECTION 11.03 Deposited Moneys to be Held in Trust

	  	
26

	  
	
SECTION 11.04 Payment of Moneys Held by Paying Agents

	  	
26

	  
	
SECTION 11.05 Repayment to Company

	  	
26

	  
	  	  	  	  
	
ARTICLE XII

	  	  	  	  
	
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

	  	  	  	  
	
SECTION 12.01 No Recourse

	  	
26

	  
	  	  	  	  
	
ARTICLE XIII

	  	  	  	  
	
MISCELLANEOUS PROVISIONS

	  	  	  	  
	
SECTION 13.01 Effect on Successors and Assigns

	  	
26

	  
	
SECTION 13.02 Actions by Successor

	  	
27

	  
	
SECTION 13.03 Notices

	  	
27

	  
	
SECTION 13.04 Governing Law

	  	
27

	  
	
SECTION 13.05 Compliance Certificates and Opinions

	  	
27

	  
	
SECTION 13.06 Payments on Business Days

	  	
27

	  
	
SECTION 13.07 Conflict with Trust Indenture Act

	  	
27

	  
	
SECTION 13.08 Counterparts

	  	
28

	  
	
SECTION 13.09 Separability

	  	
28

	  
	
SECTION 13.10 Assignment

	  	
28

	  

 

	
(2)

	
This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

 

    	iii

    	 

    
 

Table of Contents

 

     INDENTURE, dated as of [          ], 200[ ], between Datawatch Corporation, a Delaware corporation (the “Company”), and [           ], as trustee (the “Trustee”):

 

     WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of unsecured debt securities (hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;

 

     WHEREAS, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and

 

     WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 

     NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders of Securities:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01 Definitions of Terms.

 

     The terms defined in this Section (except as in this Indenture otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as well as the singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this instrument.

 

     “Authenticating Agent” means an authenticating agent with respect to all or any of the series of Securities appointed with respect to all or any series of the Securities by the Trustee pursuant to Section 2.10.

 

     “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

 

     “Board of Directors” means the Board of Directors of the Company or any duly authorized committee of such Board.

 

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.

 

     “Business Day” means, with respect to any series of Securities, any day other than a day on which Federal or State banking institutions in the Borough of Manhattan, The City of New York, are authorized or obligated by law, executive order or regulation to close.

 

     “Certificate” means a certificate signed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company. The Certificate need not comply with the provisions of Section 13.05.

 

     “Company” means Datawatch Corporation, a corporation duly organized and existing under the laws of the State of Delaware, and, subject to the provisions of Article Ten, shall also include its successors and assigns.

 

     “Corporate Trust Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at [               ].

 

     “Custodian” means any receiver, trustee, assignee, liquidator, or similar official under any Bankruptcy Law.

 

     “Default” means any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

 

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     “Depositary” means, with respect to Securities of any series, for which the Company shall determine that such Securities will be issued as a Global Security, the Depositary Trust Company, New York, New York, another clearing agency, or any successor registered as a clearing agency under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or 2.11.

 

     “Event of Default” means, with respect to Securities of a particular series any event specified in Section 6.01, continued for the period of time, if any, therein designated.

 

     “Global Security” means, with respect to any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with the Indenture, which shall be registered in the name of the Depositary or its nominee.

 

     “Governmental Obligations” means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.

 

     “Herein”, “hereof” and “hereunder”, and other words of similar import, refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

     “Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance with the terms hereof.

 

     “Interest Payment Date”, when used with respect to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect to Securities of that series is due and payable.

 

     “Officers’ Certificate” means a certificate signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Controller or an Assistant Controller or the Secretary or an Assistant Secretary of the Company that is delivered to the Trustee in accordance with the terms hereof. Each such certificate shall include the statements provided for in Section 13.05, if and to the extent required by the provisions thereof.

 

     “Opinion of Counsel” means an opinion in writing of legal counsel, who may be an employee of or counsel for the Company, that is delivered to the Trustee in accordance with the terms hereof. Each such opinion shall include the statements provided for in Section 13.05, if and to the extent required by the provisions thereof.

 

     “Outstanding”, when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article Three provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.

 

     “Person” means any individual, corporation, partnership, joint venture, joint-stock company, unincorporated organization or government or any agency or political subdivision thereof.

 

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     “Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security.

 

     “Responsible Officer” when used with respect to the Trustee means any trust officer, any assistant trust officer or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular subject.

 

     “Securities” means the debt Securities authenticated and delivered under this Indenture.

 

     “Securityholder”, “holder of Securities”, “registered holder” or other similar term, means the Person or Persons in whose name or names a particular Security shall be registered on the books of the Company kept for that purpose in accordance with the terms of this Indenture.

 

     “Subsidiary” means, with respect to any Person, (i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner.

 

     “Trustee” means [           ], and, subject to the provisions of Article Seven, shall also include its successors and assigns, and, if at any time there is more than one Person acting in such capacity hereunder, “Trustee” shall mean each such Person. The term “Trustee” as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.

 

     “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, or any successor statute.

 

     “Voting Stock”, as applied to stock of any Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.

 

ARTICLE II

 

ISSUE, DESCRIPTION, TERMS, EXECUTION,

 REGISTRATION AND EXCHANGE OF SECURITIES

 

SECTION 2.01 Designation and Terms of Securities.

 

     (a) The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution of the Company or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of any series, there shall be established in or pursuant to a Board Resolution, and set forth in an Officers’ Certificate, or established in one or more indentures supplemental hereto:

 

     (1) the title of the Security of the series (which shall distinguish the Securities of the series from all other Securities);

 

     (2) any limit upon the aggregate principal amount of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);

 

     (3) the date or dates on which the principal of the Securities of the series is payable and the place(s) of payment;

 

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     (4) the rate or rates at which the Securities of the series shall bear interest or the manner of calculation of such rate or rates, if any;

 

     (5) the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment Dates, the place(s) of payment, and the record date for the determination of holders to whom interest is payable on any such Interest Payment Dates;

 

     (6) the right, if any, to extend the interest payment periods and the duration of such extension;

 

     (7) the period or periods within which, the price or prices at which and the terms and conditions upon which, Securities of the series may be redeemed, in whole or in part, at the option of the Company;

 

     (8) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions (including payments made in cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

     (9) the form of the Securities of the series including the form of the certificate of authentication for such series;

 

     (10) if other than denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;

 

     (11) any and all other terms with respect to such series (which terms shall not be inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that series;

 

     (12) whether the Securities are issuable as a Global Security and, in such case, the identity of the Depositary for such series;

 

     (13) whether the Securities will be convertible into shares of common stock or other securities of the Company and, if so, the terms and conditions upon which such Securities will be so convertible, including the conversion price and the conversion period;

 

     (14) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01; and

 

     (15) any additional or different Events of Default or restrictive covenants provided for with respect to the Securities of the series.

 

     All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures supplemental hereto.

 

     If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the series.

 

     Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption dates.

 

SECTION 2.02 Form of Securities and Trustee’s Certificate.

 

     The Securities of any series and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially of the tenor and purpose as set forth in one or more indentures supplemental hereto or as provided in a Board Resolution and as set forth in an Officers’ Certificate and may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Securities of that series may be listed, or to conform to usage.

 

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SECTION 2.03 Denominations; Provisions for Payment.

 

     The Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(10). The Securities of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. The principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency of the Company maintained for that purpose. Each Security shall be dated the date of its authentication. Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day months.

 

     The interest installment on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment. In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security, except as provided in Section 3.03.

 

     Any interest on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:

 

     (1) The Company may make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Security Register (as hereinafter defined), not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such special record date.

 

     (2) The Company may make payment of any Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

     Unless otherwise set forth in a Board Resolution or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record date” as used in this Section with respect to a series of Securities with respect to any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the last day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day.

 

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     Subject to the foregoing provisions of this Section, each Security of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.

 

SECTION 2.04 Execution and Authentications.

 

     The Securities shall be signed on behalf of the Company by its President, or one of its Vice Presidents, or its Treasurer, or one of its Assistant Treasurers, or its Secretary, or one of its Assistant Secretaries, under its corporate seal attested by its Secretary or one of its Assistant Secretaries. Signatures may be in the form of a manual or facsimile signature. The Company may use the facsimile signature of any Person who shall have been a President or Vice President thereof, or of any Person who shall have been a Secretary or Assistant Secretary thereof, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such Person shall have ceased to be the President or a Vice President, or the Secretary or an Assistant Secretary, of the Company. The seal of the Company may be in the form of a facsimile of such seal and may be impressed, affixed, imprinted or otherwise reproduced on the Securities. The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication by the Trustee.

 

     A Security shall not be valid until authenticated manually by an authorized signatory of the Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities, signed by its President or any Vice President and its Secretary or any Assistant Secretary, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.

 

     In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Indenture.

 

     The Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.

 

SECTION 2.05 Registration of Transfer and Exchange.

 

     (a) Securities of any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose, for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding.

 

     (b) The Company shall keep, or cause to be kept, at its office or agency designated for such purpose or such other location designated by the Company a register or registers (herein referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).

 

     Upon surrender for transfer of any Security at the office or agency of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like aggregate principal amount.

 

     All Securities presented or surrendered for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered holder or by such holder’s duly authorized attorney in writing.

 

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     (c) No service charge shall be made for any exchange or registration of transfer of Securities, or issue of new Securities in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.

 

     (d) The Company shall not be required (1) to issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close of business on the day of such mailing, nor (2) to register the transfer of or exchange any Securities of any series or portions thereof called for redemption. The provisions of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.

 

SECTION 2.06 Temporary Securities.

 

     Pending the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any authorized denomination. Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company. Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series. Without unnecessary delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated for the purpose, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from the Company. Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder.

 

SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Securities.

 

     In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s written request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and of the ownership thereof. The Trustee may authenticate any such substituted Security and deliver the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Security that has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require to save each of them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.

 

     Every replacement Security issued pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. All Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

 

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SECTION 2.08 Cancellation.

 

     All Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard procedures and deliver a certificate of disposition to the Company. If the Company shall otherwise acquire any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation.

 

SECTION 2.09 Benefits of Indenture.

 

     Nothing in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities, any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities.

 

SECTION 2.10 Authenticating Agent.

 

     So long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this Indenture to the authentication of Securities by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business, and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by Federal or State authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately. The Company shall be responsible to pay the fees, costs and expenses of any Authenticating Agent appointed by it or the Trustee, if the Trustee is not the Authenticating Agent.

 

     Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.

 

SECTION 2.11 Global Securities.

 

     (a) If the Company shall establish pursuant to Section 2.01 that the Securities of a particular series are to be issued as a Global Security, then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (1) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series, (2) shall be registered in the name of the Depositary or its nominee, (3) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction and (4) shall bear a legend substantially to the following effect: “Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary.”

 

     (b) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or to a nominee of such successor Depositary.

 

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     (c) If at any time the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company will execute and, subject to Section 2.05, the Trustee will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. In addition, the Company may at any time determine that the Securities of any series shall no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities of such series. In such event the Company will execute and, subject to Section 2.05, the Trustee, upon receipt of an Officers’ Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. In addition, in the case of an Event of Default with respect to the Securities of a series represented by a Global Security that has not been cured or waived, the provisions of this Section 2.11 shall no longer apply to the Securities of such series. In such event the Company will execute and, subject to Section 2.05, the Trustee, upon receipt of an Officers’ Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such Securities are so registered.

 

ARTICLE III

 

REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

 

SECTION 3.01 Redemption.

 

     The Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.

 

SECTION 3.02 Notice of Redemption.

 

     (a) In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with the right reserved so to do, the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as they shall appear upon the Security Register unless a shorter period is specified in the Securities to be redeemed. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice. In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of such series or any other series. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with any such restriction.

 

     Each such notice of redemption shall specify the date fixed for redemption and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of such Securities to be redeemed will be made at the office or agency of the Company, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is the case. If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in whole or in part shall specify the particular Securities to be so redeemed. In case any Security is to be redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.

 

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     (b) If less than all the Securities of a series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by its President or any Vice President, instruct the Trustee or any paying agent to call all or any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section.

 

SECTION 3.03 Payment Upon Redemption.

 

     (a) If the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect to any such Security or portion thereof. On presentation and surrender of such Securities on or after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series, together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date, the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record date pursuant to Section 2.03).

 

     (b) Upon presentation of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.

 

SECTION 3.04 Sinking Fund.

 

     The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

 

SECTION 3.05 Satisfaction of Sinking Fund Payments with Securities.

 

     The Company (a) may deliver Outstanding Securities of a series (other than any Securities previously called for redemption) and (b) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities, provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

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SECTION 3.06 Redemption of Securities for Sinking Fund.

 

     Not less than 45 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officers’ Certificate, deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03.

 

ARTICLE IV

 

COVENANTS

 

SECTION 4.01 Payment of Principal, Premium and Interest.

 

     The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established with respect to such Securities.

 

SECTION 4.02 Maintenance of Office or Agency.

 

     So long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency in the town of Rockland, in the Commonwealth of Massachusetts, with respect to each such series and at such other location or locations as may be designated as provided in this Section 4.02, where (a) Securities of that series may be presented for payment, (b) Securities of that series may be presented as herein above authorized for registration of transfer and exchange, and (c) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed by its President or a Vice President and delivered to the Trustee, designate some other office or agency for such purposes or any of them. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands.

 

SECTION 4.03 Paying Agents.

 

     (a) If the Company shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section:

 

     (1) that it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto;

 

     (2) that it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable;

 

     (3) that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and

 

     (4) that it will perform all other duties of paying agent as set forth in this Indenture.

 

     (b) If the Company shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any failure (by it or any other obligor on such Securities) to take such action. Whenever the Company shall have one or more paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act.

 

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     (c) Notwithstanding anything in this Section to the contrary, (1) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05, and (2) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying agent; and, upon such payment by any paying agent to the Trustee, such paying agent shall be released from all further liability with respect to such money.

 

SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee.

 

     The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.

 

ARTICLE V

 

SECURITYHOLDERS’ LISTS AND REPORTS

 BY THE COMPANY AND THE TRUSTEE

 

SECTION 5.01 Company to Furnish Trustee Names and Addresses of Securityholders.

 

     The Company will furnish or cause to be furnished to the Trustee (a) on each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not be obligated to furnish or cause to be furnished such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar.

 

SECTION 5.02 Preservation Of Information; Communications With Securityholders.

 

     (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as Security Registrar (if acting in such capacity).

 

     (b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

 

     (c) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or under the Securities, subject to the conditions set forth in such Section 312(b). The Company, the Trustee, the Security Registrar and any other Person shall have the protection of the Trust Indenture Act Section 312(c).

 

SECTION 5.03 Reports by the Company.

 

     (a) The Company covenants and agrees to file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports that may be required pursuant to Section 13 of the Exchange Act, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations.

 

     (b) The Company covenants and agrees to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations.

 

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     (c) The Company covenants and agrees to transmit by mail, first class postage prepaid, or reputable overnight delivery service that provides for evidence of receipt, to the Securityholders, as their names and addresses appear upon the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.

 

SECTION 5.04 Reports by the Trustee.

 

     (a) On or before March 31 in each year in which any of the Securities are Outstanding, the Trustee shall transmit by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register, a brief report dated as of the preceding December 31, if and to the extent required under Section 313(a) of the Trust Indenture Act.

 

     (b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.

 

     (c) A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each stock exchange upon which any Securities are listed (if so listed) and also with the Commission. The Company agrees to notify the Trustee when any Securities become listed on any stock exchange.

 

     (d) If an Event of Default occurs and is continuing and the Trustee receives actual notice of such Event of Default, the Trustee shall mail to each Securityholder notice of the uncured Event of Default within 90 days after the occurrence thereof. Except in the case of an Event of Default in payment of principal of, or interest on, any Securities, or in the payment of any sinking or purchase fund installment, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Securityholder.

 

ARTICLE VI

 

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

 

SECTION 6.01 Events of Default.

 

     (a) Whenever used herein with respect to Securities of a particular series, “Event of Default” means any one or more of the following events that has occurred and is continuing:

 

     (1) the Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and such default continues for a period of 30 days; provided, however, that a valid extension of an interest payment period by the Company in accordance with the terms of any indenture supplemental hereto, shall not constitute a default in the payment of interest for this purpose;

 

     (2) the Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;

 

     (3) the Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the Securities of that series at the time Outstanding;

 

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     (4) the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors; or

 

     (5) a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all or substantially all of its property or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days.

 

     (b) In each and every such case, unless the principal of all the Securities of that series shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders), may declare the principal of all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable.

 

     (c) At any time after the principal of the Securities of that series shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (1) the Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium, if any, on) all Securities of that series that shall have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest, at the rate per annum expressed in the Securities of that series to the date of such payment or deposit) and any amount payable to the Trustee under Section 7.06, and (2) any and all other Events of Default under the Indenture with respect to such series, other than the nonpayment of principal on Securities of that series that shall not have become due by their terms, shall have been remedied or waived as provided in Section 6.06.

 

No such rescission and annulment shall extend to or shall affect any subsequent default or impair any right consequent thereon.

 

     (d) In case the Trustee shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken.

 

SECTION 6.02 Suits for Enforcement by Trustee.

 

     (a) If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or other obligor upon the Securities of that series, wherever situated.

 

     (b) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affected the Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Securities of a series allowed for the entire amount due and payable by the Company under this Indenture at the date of institution of such proceedings and for any additional amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.

 

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     (c) All rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities of a series, may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders of the Securities of such series.

 

     In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

     Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

 

SECTION 6.03 Application of Moneys Collected.

 

     Any moneys collected by the Trustee pursuant to this Article with respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon presentation of the Securities of that series, and notation thereon the payment, if only partially paid, and upon surrender thereof if fully paid:

 

     FIRST: To the payment of costs and expenses of collection and of all amounts payable to the Trustee under Section 7.06; and

 

     SECOND: To the payment of the amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively.

 

SECTION 6.04 Limitation on Suits.

 

     No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such Event of Default, as hereinbefore provided; (b) the holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as trustee hereunder; (c) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding; and (e) during such 60-day period, the holders of a majority in principal amount of the Securities of that series shall not have given the Trustee a direction inconsistent with the request.

 

     Notwithstanding anything contained herein to the contrary, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption, on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption date, shall not be impaired or affected without the consent of such holder except as otherwise provided in Section 316(b) of the Trust Indenture Act. By accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee, that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities of such series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

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SECTION 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.

 

     (a) Except as otherwise provided in Section 13.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to such Securities.

 

     (b) No delay or omission of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or on acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

 

SECTION 6.06 Control by Securityholders.

 

     The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance with Section 8.01, shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture or be unduly prejudicial to the rights of holders of Securities of any other series at the time Outstanding determined in accordance with Section 8.01. Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability. The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding affected thereby, determined in accordance with Section 8.01, may on behalf of the holders of all of the Securities of such series waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such series and its consequences, except a default in the payment of the principal of (or premium, if any) or interest on, any of the Securities of that series as and when the same shall become due by the terms of such Securities otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with the Trustee (in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

 

SECTION 6.07 Undertaking to Pay Costs.

 

     All parties to this Indenture agree, and each holder of any Securities by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.

 

ARTICLE VII

 

CONCERNING THE TRUSTEE

 

SECTION 7.01 Certain Duties and Responsibilities of Trustee.

 

     (a) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee. In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.

 

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(b) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(1) prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that may have occurred:

 

(i) the duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii) in the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

 

(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

 

(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities of that series; and

 

(4) none of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.

 

SECTION 7.02 Certain Rights of Trustee.

 

Except as otherwise provided in Section 7.01:

 

(a) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company, by the President or any Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer thereof (unless other evidence in respect thereof is specifically prescribed herein);

 

(c) The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted hereunder in good faith and in reliance thereon;

 

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     (d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been cured or waived) to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs;

 

     (e) The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

     (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security or other papers or documents, unless requested in writing so to do by the holders of not less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and

 

     (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

 

SECTION 7.03 Trustee Not Responsible for Recitals or Issuance or Securities.

 

     (a) The recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.

 

     (b) The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.

 

     (c) The Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.

 

SECTION 7.04 May Hold Securities.

 

The Trustee or any paying agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying agent or Security Registrar.

 

SECTION 7.05 Moneys Held in Trust.

 

     Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree with the Company to pay thereon.

 

SECTION 7.06 Compensation and Reimbursement.

 

     (a) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), as the Company and the Trustee may from time to time agree in writing, for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Company also covenants to indemnify the Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of liability in the premises.

 

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(b) The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities.

 

SECTION 7.07 Reliance on Officers’ Certificate.

 

Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture upon the faith thereof.

 

SECTION 7.08 Disqualification; Conflicting Interests.

 

If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

 

SECTION 7.09 Corporate Trustee Required; Eligibility.

 

There shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling, controlled by or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10.

 

SECTION 7.10 Resignation and Removal; Appointment of Successor.

 

(a) The Trustee or any successor hereafter appointed, may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names and addresses appear upon the Security Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

 

(b) In case at any time any one of the following shall occur:

 

(1) the Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or Securities for at least six months; or

 

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     (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Securityholder; or

 

     (3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

     (c) The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company.

 

     (d) Any resignation or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.

 

     (e) Any successor trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there shall be only one Trustee with respect to the Securities of any particular series.

 

SECTION 7.11 Acceptance of Appointment By Successor.

 

     (a) In case of the appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by such retiring Trustee hereunder.

 

     (b) In case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (2) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor trustee relates.

 

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     (c) Upon request of any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

 

     (d) No successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.

 

     (e) Upon acceptance of appointment by a successor trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register. If the Company fails to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be transmitted at the expense of the Company.

 

SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business.

 

     Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

SECTION 7.13 Preferential Collection of Claims Against the Company.

 

     The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.

 

ARTICLE VIII

 

CONCERNING THE SECURITYHOLDERS

 

SECTION 8.01 Evidence of Action by Securityholders.

 

     Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in Person or by agent or proxy appointed in writing.

 

     If the Company shall solicit from the Securityholders of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by an Officers’ Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

 

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SECTION 8.02 Proof of Execution by Securityholders.

 

     Subject to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner:

 

     (a) The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.

 

     (b) The ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.

 

     (c) The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

 

SECTION 8.03 Who May be Deemed Owners.

 

     Prior to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of (and premium, if any) and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

 

SECTION 8.04 Certain Securities Owned by Company Disregarded.

 

     In determining whether the holders of the requisite aggregate principal amount of Securities of a particular series have concurred in any direction, consent or waiver under this Indenture, the Securities of that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows are so owned shall be so disregarded. The Securities so owned that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

 

SECTION 8.05 Actions Binding on Future Securityholders.

 

At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that series.

 

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ARTICLE IX

 

SUPPLEMENTAL INDENTURES

 

SECTION 9.01 Supplemental Indentures Without the Consent of Securityholders.

 

     In addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for one or more of the following purposes:

 

     (a) to cure any ambiguity, defect or inconsistency herein or in the Securities of any series;

 

     (b) to comply with Article Ten;

 

     (c) to provide for uncertificated Securities in addition to or in place of certificated Securities;

 

     (d) to add to the covenants of the Company for the benefit of the holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company;

 

     (e) to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms, purposes of issue, authentication and delivery of Securities, as herein set forth;

 

     (f) to make any change that does not adversely affect the rights of any Securityholder in any material respect; or

 

     (g) to provide for the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the holders of any series of Securities.

 

     The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.

 

SECTION 9.02 Supplemental Indentures With Consent of Securityholders.

 

     With the consent (evidenced as provided in Section 8.01) of the holders of not less than a majority in aggregate principal amount of the Securities of each series affected by such supplemental indenture or indentures at the time Outstanding, the Company, when authorized by Board Resolutions, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby, (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate of interest thereon, or reduce any premium payable upon the redemption thereof or (ii) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture.

 

     It shall not be necessary for the consent of the Securityholders of any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

 

SECTION 9.03 Effect of Supplemental Indentures.

 

     Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

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SECTION 9.04 Securities Affected by Supplemental Indentures.

 

     Securities of any series affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements of any exchange upon which such series may be listed, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of that series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that series then Outstanding.

 

SECTION 9.05 Execution of Supplemental Indentures.

 

     Upon the request of the Company, accompanied by Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized or permitted by, and conforms to, the terms of this Article and that it is proper for the Trustee under the provisions of this Article to join in the execution thereof; provided, however, that such Opinion of Counsel need not be provided in connection with the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.

 

     Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby as their names and addresses appear upon the Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

ARTICLE X

 

SUCCESSOR ENTITY

 

SECTION 10.01 Company May Consolidate, Etc.

 

     Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its successor or successors) authorized to acquire and operate the same; provided, however, the Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all series in accordance with the terms of each series, according to their tenor and the due and punctual performance and observance of all the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act as then in effect) satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall have acquired such property.

 

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SECTION 10.02 Successor Entity Substituted.

 

     (a) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of (and premium, if any) and interest on all of the Securities of all series Outstanding and the due and punctual performance of all of the covenants and conditions of this Indenture or established with respect to each series of the Securities pursuant to Section 2.01 to be performed by the Company with respect to each series, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

     (b) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

 

     (c) Nothing contained in this Article shall apply to limit or impose any requirements upon the consolidation or merger of any Person into the Company where the Company is the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property of any other Person (whether or not affiliated with the Company).

 

SECTION 10.03 Evidence of Consolidation, Etc. to Trustee.

 

     The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or other disposition, and any such assumption, comply with the provisions of this Article.

 

ARTICLE XI

 

SATISFACTION AND DISCHARGE

 

SECTION 11.01 Satisfaction and Discharge of Indenture.

 

     If at any time: (a) the Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated (other than any Securities that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.07) and Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company (and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.

 

SECTION 11.02 Discharge of Obligations.

 

     If at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series, then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid. Thereafter, Sections 7.06 and 11.05 shall survive.

 

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SECTION 11.03 Deposited Moneys to be Held in Trust.

 

     All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption of which such moneys or Governmental Obligations have been deposited with the Trustee.

 

SECTION 11.04 Payment of Moneys Held by Paying Agents.

 

     In connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys or Governmental Obligations.

 

SECTION 11.05 Repayment to Company.

 

     Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment of principal of (and premium, if any) or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for at least two years after the date upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, shall be repaid to the Company or (if then held by the Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Company for the payment thereof.

 

ARTICLE XII

 

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

SECTION 12.01 No Recourse.

 

     No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities.

 

ARTICLE XIII

 

MISCELLANEOUS PROVISIONS

 

SECTION 13.01 Effect on Successors and Assigns.

 

     All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

 

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SECTION 13.02 Actions by Successor.

 

     Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.

 

SECTION 13.03 Notices.

 

     Except as otherwise expressly provided herein any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Securities to or on the Company may be given or served by being deposited first class postage prepaid in a post-office letterbox addressed (until another address is filed in writing by the Company with the Trustee), as follows: Datawatch Corporation, Quorum Office Park, 271 Mill Road,, Chelmsford, Massachusetts 01824, Attention: Chief Financial Officer. Any notice, election, request or demand by the Company or any Securityholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.

 

SECTION 13.04 Governing Law.

 

     This Indenture and each Security shall be deemed to be a contract made under the internal laws of The Commonwealth of Massachusetts, and for all purposes shall be construed in accordance with the laws of said Commonwealth.

 

SECTION 13.05 Compliance Certificates and Opinions.

 

     (a) Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.

 

     (b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

 

     (c) The Company shall furnish to the Trustee, within 120 days after the end of each fiscal year, a brief certificate from the principal executive officer, principal financial officer or principal accounting officer as to his or her knowledge of such obligor’s compliance with all conditions and covenants under this Indenture. For purposes of this subsection, such compliance shall be determined without regard to any period of grace or requirement of notice provided hereunder.

 

SECTION 13.06 Payments on Business Days.

 

     Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.

 

SECTION 13.07 Conflict with Trust Indenture Act.

 

     If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

 

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SECTION 13.08 Counterparts.

 

     This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

SECTION 13.09 Separability.

 

     In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

SECTION 13.10 Assignment.

 

     The Company will have the right at all times to assign any of its rights or obligations under this Indenture to a direct or indirect wholly owned Subsidiary of the Company, provided that, in the event of any such assignment, the Company will remain liable for all such obligations. Subject to the foregoing, the Indenture is binding upon and inures to the benefit of the parties thereto and their respective successors and assigns. This Indenture may not otherwise be assigned by the parties thereto.

 

[Remainder of Page Left Blank – Signature Page Follows]

 

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          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.

	  	  	  	  	  
	  	
DATAWATCH CORPORATION

  

	  
	  	
By:  

	  	  
	  	
Name:  

	  	  	  
	  	
Title:  

	  	  	  
	  
	  	
[                    ],

 as Trustee

  

	  
	  	
By:  

	  	  
	  	
Name:  

	  	  	  
	  	
Title:  

	  	  	  

 

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