HomeMy WebLinkAboutAuburn Shops Feenix LeaseLEASE
AUBURN SHOPS
SUITES 2802, 2806 - 2818
FEENIX PARKSIDE LLC,
a Washington limited liability company,
as LANDLORD
and
CITY OF AUBURN, WASHINGTON, a Washington municipal corporation
as TENANT
January 31, 2020
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TABLE OF CONTENTS
Page
1.
PREMISES.......................................................................................................................1
2.
TERM...............................................................................................................................1
3.
RENT................................................................................................................................2
4.
SECURITY DEPOSIT......................................................................................................2
5.
USE; COMPLIANCE WITH LAWS; INSURANCE CANCELLATION ......................2
6.
OPERATING EXPENSES...............................................................................................2
7.
UTILITIES AND SERVICES..........................................................................................4
8.
MAINTENANCE AND REPAIRS..................................................................................
5
9.
ALTERATIONS AND ADDITIONS...............................................................................5
10.
INSURANCE....................................................................................................................
6
11.
INDEMNITY....................................................................................................................
7
12.
DAMAGE, DESTRUCTION AND BUSINESS INTERRUPTION................................7
13.
TENANT TAXES.............................................................................................................8
14.
COVENANT AGAINST LIENS......................................................................................8
15.
ASSIGNMENT AND SUBLETTING.............................................................................8
16.
TENANT'S DEFAULT..................................................................................................10
17.
LANDLORD'S DEFAULT............................................................................................11
18.
CONDEMNATION........................................................................................................11
19.
SUBORDINATION........................................................................................................12
20.
QUIET ENJOYMENT....................................................................................................12
21.
DELAYS.........................................................................................................................12
22.
GENERAL PROVISIONS.............................................................................................12
EXHIBIT
A - LEGAL DESCRIPTION
EXHIBIT
B - FLOOR PLAN
(i)
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EXHIBIT C - RULES AND REGULATIONS AND PARKING RULES AND REGULATIONS
EXHIBIT D - TENANT WORK LETTER
EXHIBIT E - AMENDMENT TO LEASE
EXHIBIT F - RIGHT OF FIRST OFFER
EXTENSION OPTION RIDER
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AUBURN SHOPS
SUMMARY OF BASIC LEASE INFORMATION
This Summary of Basic Lease Information (the "Summary") is hereby incorporated by
reference into and made a part of the attached Lease. Each reference in the Lease to any term of
this Summary shall have the meaning as set forth in this Summary for such term. In the event of
a conflict between the terms of this Summary and the Lease, the terms of the Lease shall prevail.
Any initially capitalized terms used herein and not otherwise defined herein shall have the meaning
as set forth in the Lease.
TERMS OF LEASE
(References are to the Lease)
1. Dated as of:
2. Landlord:
3. Address of Landlord:
4. Tenant:
5. Address of Tenant:
6. Premises (Article 1):
DESCRIPTION
January31, 2020
FEENIX PARKSIDE LLC, a Washington limited
liability company
FEENIX PARKSIDE LLC
c/o AZOSE COMMERCIAL PROPERTIES
8451 SE 681h St., Suite 200
Mercer Island, WA, 98040
Attention: Bill Sugden
CITY OF AUBURN, WASHINGTON, a
Washington municipal corporation
25 W Main St
Auburn, WA 98001
Attention: Josh Arndt
(Prior to and after Commencement Date)
6.1 Premises: Approximately 22,308 square feet of Rentable Area
located in the Building (as defined below), as
depicted on Exhibit B attached hereto, known as
Suites 2802 & 2806 - 2818.
6.2 Building: The Premises are located in the "Building" whose
address is 2802 — 2826 Auburn Way North,
Auburn WA 98002.
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7. Term (Article 2):
7.1 Lease Term:
7.2 Commencement Date:
7.3 Expiration Date:
Sixty (60) months (plus the number of days of the
last calendar month if the Commencement Date is
not the first day of a calendar month as set forth in
Section 7.3 below).
The date upon which Tenant takes possession of the
Premises.
The last day of the calendar month which is sixty
(60) months after the Commencement Date.
8. Base Rent (Article 3):
Months of
Annual Base
Monthly
Annual Base Rental Rate per
Lease Term
Rent
Base Rent
Square Foot of Rentable
Area of the Premises
1-12*
$ 267,696.00
$
22,308.00
$ 12.00
13-24
$ 274,388.40
$
22,865.70
$ 12.30
25-36
$ 281,248.11
$
23,437.34
$ 12.61
37-48
$ 288,279.31
$
24,023.28
$ 12.92
49-60
$ 295,486.30
$
24,623.86
$ 13.25
*Base Rent for (i) Suite 2802 for full months 1-5 shall be abated and (ii) Suite 2806-2818
for full months 1-3 shall be abated, but Tenant shall be responsible for Additional Rent
(as defined below) for said months.
9. Security Deposit (Article 4): N/A
10. Tenant's Share (Section 6.1) of 80.8% (the Premises is 22,308 square feet of
Operating Expenses, Tax Rentable Area within the Building's 27,859
Expenses and Utilities Costs square feet of Rentable Area).
(Article 6):
11. Brokers (Section 22.15):
12. Number of Parking Spaces
(Section 22.16):
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Tenant's brokers — none; Landlord's brokers —
Jerome O'Leary of Kidder Mathews.
As depicted in Exhibit B, up to, but no more than,
(i) thirty-three (33) reserved parking spaces in the
Parking Areas (as defined in Section 1.1 of the
Lease) at no charge to Tenant. Reserved parking
spaces shall include (24) non -handicap spaces
outside of tenant's spaces, (9) non -handicap spaces
along south property line.
13. Right of First Offer: Tenant is granted the rights and obligations as
expressly described in the Right of First Offer
rider to this Lease.
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AUBURN SHOPS
LEASE
THIS LEASE, made and entered this 31 St day of January 2020, by and between FEENIX
PARKSIDE LLC, a Washington limited liability company, (hereinafter referred to as "Landlord"), and
CITY OF AUBURN, WASHINGTON, a Washington municipal corporation (hereinafter referred to as
"Tenant").
WITNESSETH:
For and in consideration of the rental and of the covenants and agreements hereinafter set forth to
be kept and performed by Tenant, Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the premises herein described for the Lease Term, at the rental and subject to and upon all of the
terms, covenants and agreements hereinafter set forth.
1. PREMISES.
1.1 Grant of Premises. Landlord hereby leases to Tenant and Tenant leases from Landlord
those certain premises described in Section 6.1 of the Summary (hereinafter referred to as the "Premises"),
which Premises are located in the single -story building described in Section 6.2 of the Summary
(hereinafter referred to as the `Building"). Landlord and Tenant hereby confirm and stipulate that the
number of square feet of "Rentable Area" contained in the Premises initially leased by Tenant pursuant to
this Lease (i) is as set forth in Section 6.1 of the Summary, (ii) have been calculated in accordance with
Landlord's standard rentable area measurement standards used for the Building (currently the Building
Owners and Managers Association Standard for the measurement of commercial office space
(ANSI/BOMA Z65.1 2010 -Method A)), and (iii) is not subject to remeasurement, adjustment or
modification, and accordingly, there shall be no modification or adjustment of the Base Rent, Tenant's
Share of Operating Expenses, Tax Expenses and Utilities Costs (if any), the Tenant Improvement
Allowance (if any) or any other dollar amounts set forth in this Lease which are based upon any such
square footage amounts. The Building and the surface parking areas located adjacent to the Building (the
"Parking Areas"), any outside plaza areas, land and other improvements surrounding the Building, the
Common Areas, as defined below, and the land upon which any of the foregoing are situated are
sometimes collectively referred to herein as the "Real Property." The legal description of land comprising
the Real Property is attached hereto as Exhibit A. A floor plan showing the size and location of the
Premises within the Building is attached hereto as Exhibit B. Tenant's use and occupancy of the Premises
shall include the use, in common with others, of those portions of the Real Property which are designated
by Landlord for use in common by Tenant and any other tenants of the Building (the "Common Areas"),
but excluding therefrom and reserving unto Landlord the exterior faces of all exterior walls, the roof and
the right to install, use and maintain where necessary in the Premises all pipes, ductwork, conduits and
utility lines through hung ceiling space, partitions, beneath the floor or through other parts of the Premises;
provided such installation, use and maintenance do not unreasonably and substantially interfere with the
use and occupancy of the Premises by Tenant or unreasonably diminish Tenant's access to the Premises.
Landlord reserves the right to effect such other tenancies in the Building as Landlord may elect in its sole
business judgment. Landlord also reserves the right to close temporarily, make alterations or additions to,
or change the location of elements of the Common Areas, provided that, in connection therewith, Landlord
shall at all times use commercially reasonable efforts to minimize interference with the conduct of
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Tenant's business at the Premises, including providing Tenant with advance notice of 48 hours whenever
Landlord may reasonably provide such notice.
1.2 Condition of Premises. Tenant shall occupy the Premises in its current "AS IS" condition
without any obligation on Landlord's part to construct or pay for any tenant improvement or refurbishment
work in the Premises, and Tenant shall be solely responsible, at its sole cost and expense, for constructing
any and all alterations and refurbishment work for the Premises pursuant to, and in accordance with, the
provisions of Article 9 below.
2. TERM.
2.1 Basic Term. The term of this Lease ("Lease Term") shall be as set forth in Section 7.1 of
the Summary and shall commence on the date ("Commencement Date") set forth in Section 7.2 of the
Summary, and shall terminate on the date (the "Expiration Date") set forth in Section 7.3 of the Summary,
unless this Lease is sooner terminated as hereinafter provided.
2.1.1 Early Termination Right. In the event that the Auburn City Council fails to
appropriate sufficient funds for the Tenant to continue to pay all Rent due under this Lease during the
Term, Tenant shall have the right to terminate the Lease upon at least one hundred eighty (180) days' prior
written notice (the "Early Termination Notice"). Upon timely submission of the Early Termination Notice,
the exercise of the right to terminate this Lease (the "Early Termination Right") is conditioned upon (i)
Landlord's receipt no later than ten (10) business days prior to the accelerated Lease Expiration Date of
payment by wire of an amount equal to an amount which represents 12 months' Base Rent and estimated
Additional Rent due prospectively from the accelerated Lease Expiration Date, together with the
remaining unamortized Tenant Improvement Allowance (if any), (ii) the unamortized commissions paid
to Brokers for the remaining Lease Term, and (iii) the Unamortized Abated Rent (as defined below). It is
also conditioned upon Tenant having vacated the Premises it may occupy at such time on or before
accelerated Lease Expiration Date. Tenant's failure to properly exercise this Early Termination Right, or
properly comply with the conditions to such exercise shall terminate this right and the Lease shall continue
through the original Lease Expiration Date.
2.2 Early Possession. If prior to the Commencement Date Tenant uses or occupies the
Premises or any part thereof with Landlord's prior written consent for the purpose of completing
alterations to the Premises, Tenant agrees to observe and perform all the provisions of this Lease except
those which require payment of Rent. If Tenant commences business in any part of the Premises prior to
the scheduled commencement of the Lease Term, the Lease Term shall commence upon such
commencement of business operations as set forth in Section 7.2 of the Summary.
3. RENT.
3.1 Base Rent. Tenant agrees to pay Landlord, promptly when due, without notice or demand
and without deduction or set-off of any amount for any reason whatsoever, the annual amounts set forth
in Section 8 of the Summary, which shall be payable in the monthly installment amounts set forth in
Section 8 of the Summary (the "Base Rent"). Said monthly installments of Base Rent shall be payable in
advance on the first (1St) day of each calendar month during the Lease Term, except that the Base Rent for
the first (1St) full calendar month of the Lease Term shall be paid at the time of Tenant's execution of this
Lease. If the Lease Term commences or expires on a day other than the first (1St) day of a calendar month,
Tenant shall pay to Landlord on the first (1St) day of the Lease Term, or on the first (1St) day of the month
in which the Lease Term expires, the prorated portion of the monthly installment of Base Rent payable
for such month calculated based upon the actual number of days in such month. All other payments or
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adjustments required to be made under the terms of this Lease that require proration on a time basis shall
be prorated on the same basis.
3.1.1 Abated Rent. Notwithstanding anything to the contrary contained in this Lease and
provided that Tenant faithfully performs all of the terms and conditions of this Lease, Landlord hereby
agrees to abate Tenant's obligation to pay the monthly installments of Base Rent otherwise payable by
Tenant (collectively, the "Abated Rent") on (i) Suite 2802 for months 1-5 and (ii) Suite 2806-2818 for
months 1-3 (collectively the "Abatement Period"). During the Abatement Period, Tenant shall remain
responsible for the payment of all of its other monetary obligations under this Lease. In the event of a
default by Tenant under the terms of this Lease beyond all applicable notice and cure periods that
consequently results in the early termination of the Lease pursuant to the provisions of Section 16 of the
Lease, Landlord shall be entitled to recover the full amount of the unamortized balance of the Abated
Rent. The Abated Rent shall be amortized on a straight-line basis over the scheduled 60 months which
Tenant shall lease the Premises, and the unamortized balance thereof shall be determined based upon the
unexpired portion of such Lease Term as of the date of such early termination ("Unamortized Abated
Rent").
3.2 Place of Payment. Base Rent, Tenant's Share of Operating Expenses, Tax Expenses and
Utilities Costs (as such terms are defined in Sections 6.1 and 6.2 below which may also be referred to as
"Additional Rent") and all other sums or charges required by this Lease to be paid by Tenant to Landlord,
all of which are herein sometimes collectively referred to herein as "Rent," shall be paid at the office of
Landlord as set forth herein, or at such other place as Landlord may from time to time designate, in lawful
money of the United States.
4. INTENTIONALLY OMITTED.
5. USE, COMPLIANCE WITH LAWS; INSURANCE CANCELLATION.
5.1 Use. Tenant is permitted to use the Premises for social service related activities including,
but not limited to: Food Bank (including operation of a commercial kitchen), Day Shelter, Overnight
Shelter, Workforce Training, Community Court, Police Substation and dental/medical clinic' ("Permitted
Uses"). While the Tenant will maintain a Police Substation facility on the Premises as part of its tenancy,
it is under no staffing obligations for the Police Substation and a constant Police presence of the Building
and Parking Areas is not required, however, the Premises and Tenant's designated parking areas will have
Tenant supervision during the Term and its operations in the Premises. Tenant shall, at its sole cost and
expense, promptly comply with all applicable laws, statutes, ordinances, rules, regulations, orders and
requirements, and all recorded covenants, conditions and restrictions now or hereafter in effect
(collectively, "Laws"), regulating Tenant's use and/or occupancy of the Premises. Tenant shall not use,
or permit any person to use, the Premises or any part thereof for any use or purpose contrary to the Building
Rules and Regulations which are in effect on the date hereof, as set forth in the attached Exhibit C, or in
violation of any applicable Laws. Tenant shall not use or allow another person or entity to use any part
of the Premises for the storage, use, treatment, manufacture or sale of any hazardous or toxic substance,
material or waste which is or becomes regulated by any local, state or federal governmental authority
(collectively, "Hazardous Materials"). Tenant shall not use or permit the use of the Premises in any
manner which may tend to create waste or a nuisance under applicable Laws; nor which may tend to
obstruct or interfere with the rights of other tenants of the Building or injure or unreasonably annoy them.
' Dental or medical clinic uses are subject to Landlord's approval as provided in Section 15.
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Tenant shall not do or permit anything to be done on or about the Premises outside of the Permitted Uses
which may in any way increase the existing rate of any insurance policy covering the Building or Real
Property or any of its contents. Notwithstanding the foregoing, Tenant shall not do or permit anything to
be done on or about the Premises (whether or not included in the Permitted Uses) which causes
cancellation of any such insurance policy.
5. 1.1 Medical Dental Provisions; Medical, Biological, and Infectious Waste.
Notwithstanding the foregoing, Section 5. 1, Tenant may use medical and/or dental supplies and materials,
and may generate Medical Wastes (defined below) which are commonly found in dental offices,
laboratories and clinics. Tenant's generation, use, storage and disposal of such supplies, materials and
Medical Wastes shall strictly comply with all applicable local, state and federal laws, codes, rules,
regulations and guidelines. Tenant represents and warrants to Landlord that, except as set forth in the
preceding sentences, Tenant's intended use of the Premises does not involve the use, production, disposal
or bringing on to the Premises of any other hazardous waste or materials.
5.1.1.1 Definition. As used herein, "Medical Wastes" shall be defined to
include the following:
(a) medical devices or paraphernalia such as syringes, sutures, cotton swabs
or pads, sponges, bandages, or wraps of any sort, or any other item which is utilized to treat any patient
or other person for any medicinal, medical, diagnostic, dental, or therapeutic reason or purpose;
(b) any material of any type or nature whatsoever that are radioactive to any
degree, whether as the result of their manufacture, use or application;
(c) any device or thing which is intended to come into contact with any part of
the body, whether or not such item or device is so utilized prior to its disposal, including without
limitation sharps;
(d) any instrument or thing which is designed for use or application in the
office of Tenant, whether or not such device, instrument or thing is intended for any medical, dental,
diagnostic, or therapeutic use; and
(e) any device, instrument or thing which has become infected, contaminated,
diseased, or otherwise exposed to harmful, contagious, or communicable organisms, bacteria, or other
life forms.
5.1.1.2 Use Limitations; Liability. Tenant agrees not to maintain in or around
the Premises any activity or instrumentality dangerous to life or limb or to permit any objectionable noise
or odor to escape or be emitted from the Premises or to permit anything to be done upon the Premises that
would tend to create a nuisance or to disturb any other Tenants of the Building. Tenant shall not permit
use of the Premises by doctors and/or dentists not affiliated with Tenant without Landlord's prior written
approval. Tenant agrees to not operate an urgent care facility, ambulatory surgery center, or any facility
or enterprise within the Premises that provides inpatient, residential, or 24 hour medical care. Tenant
agrees that Medical Waste generated within the Premises shall be disposed of separately from waste
materials such as paper refuse and other abandoned items commonly thought of as trash. Tenant also
agrees that Tenant will not mix or place Medical Waste in regular trash containers. Tenant will keep
Medical Waste containers segregated and make them available for regular removal from the Building by
Tenant or Tenant's contractors. Landlord shall have no obligation or liability for the removal or disposal
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of any Medical Wastes. Tenant also agrees to separate particular items of Medical Waste for separate
disposal as required by law. The parties further agree that, in the event any harm or injury of any type or
nature whatsoever, should be caused to, incurred by, inflicted upon, or suffered by any individual,
including Tenant or Tenant's agents, employees, patients, visitors, invitees or licensees, or Landlord or
any of its agents, employees, guests, visitors, invitees or licensees, as the result of the failure of Tenant to
timely, thoroughly and completely dispose of Medical Waste, or as the result of coming into contact,
whether by touching, breathing, inhaling, or in any other manner ingesting or consuming such item, or by
being exposed in any manner thereto, Tenant shall be liable to such individual, and shall save and hold
Landlord and its principals and other tenants, agents, employees, patients, visitors, invitees or licensees
harmless against any damages, liability, claims, causes of action or judgments arising therefrom. Tenant
shall be liable to and shall pay any injured party for all damages, costs or expenses, including attorney
fees, arising out of any exposure, harm, injury, disease, contamination, or affliction suffered as the result
of any Medical Waste stored, generated, or disposed of by Tenant or in or around the Premises.
5.1.1.3 Insurance. In addition to insurance required under Section 10 of this
Lease, Tenant agrees to warrant that any Transferee engaging in medical and dental services maintain
customary professional liability insurance coverage which shall insure against any action, error, or
omission of such Transferee, its employees and agents, in connection with the provision of any health care
and/or dental services provided by Tenant, its employees and agents, in the Premises, in an amount
customary for physicians and/or dentists in the area practicing in the same medical or dental specialty as
that practiced by such Transferee which liability insurance shall provide coverage for any occurrence
during the Term that may subsequently give rise to a claim being made against Tenant for professional
malpractice. If the professional liability insurance obtained by such Transferee is written on a claims -
made basis, and if at any time after the expiration or termination of this Lease, such Transferee ceases to
maintain professional liability insurance in an amount of $2,000,000 covering the acts or omissions of
Tenant during the Term of this Lease, such Transferee shall purchase the optional extension period
coverage under its professional liability insurance policy. Such Transferee's obligation to maintain
professional liability insurance as required under this Section shall remain in force after the termination
of this Lease.
5.1.1.4 Removal/Restoration of Alterations. Notwithstanding anything to the
contrary elsewhere in this Lease, Tenant shall, upon termination or earlier expiration of the Term, remove
and retain possession of all of its built-in laboratory equipment and medical and/or dental cabinetry and
trade cabinets, and repair any damages to the Premises caused by such removal.
5.2 ADA & OFAC Compliance. Tenant, at its sole expense, shall comply with all laws,
including, without limitation, the Americans With Disabilities Act, orders, judgments, ordinances,
regulations, codes, directives, permits, licenses, covenants and restrictions now or hereafter applicable to
the Premises (collectively, "Legal Requirements"). Except as permitted under Tenant's Permitted Uses,
the Premises shall not be used as a place of public accommodation under the Americans With Disabilities
Act or similar state statutes or local ordinances or any regulations promulgated thereunder, all as may be
amended from time to time. Tenant shall, at its expense, make any alterations or modifications, within or
without the Premises, that are required by legal requirements related to Tenant's specific use or occupation
of the Premises. Except as permitted under Tenant's Permitted Uses, Tenant will not use or permit the
Premises to be used for any purpose or in any manner that would void Tenant's or Landlord's insurance,
or increase the insurance risk. If any increase in the cost of any insurance on the Premises, Building or
the Real Property is caused by Tenant's use or occupation of the Premises, or because Tenant vacates the
Premises, then Tenant shall pay the amount of such increase to Landlord. Any entrance into or occupation
of the Premises by Tenant prior to the Commencement Date shall be subject to all obligations of Tenant
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under this Lease. Tenant represents and warrants to Landlord that Tenant is currently in compliance with
and shall at all times during the Term (including any extension thereof) remain in compliance with the
regulations of the Office of Foreign Asset Control ("OFAC") of the Department of the Treasury (including
those named on OFAC's Specially Designated and Blocked Persons List) and any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating
thereto.
6. OPERATING EXPENSES, TAX EXPENSES AND UTILITIES COSTS.
6.1 Tenant's Obligations. _ In addition to the Base Rent, Tenant shall pay to Landlord
(i) Tenant's Share of Operating Expenses (as such terms are defined below), (ii) Tenant's Share of Tax
Expenses (as such term is defined below), and (iii) Tenant's Share of Utilities Costs (as such term is
defined below), which Operating Expenses, Tax Expenses and Utilities Costs are incurred by Landlord on
account of the ownership, operation and maintenance of the Building and Real Property during such
Expense Year. An amount equal to one -twelfth (1/12) of the total Estimated Expenses, Taxes and Utilities
set forth in the Estimate Statement, shall be paid in monthly installments to Landlord, together with the
monthly Base Rent installments. For purposes hereof, "Tenant's Share" shall mean the percentage set
forth in Section 10 of the Summary which was calculated by dividing the Rentable Area of the Premises
set forth in Section 6.1 of the Summary, by the total Rentable Area within the Building set forth in
Section 10 of the Summary. Landlord reserves the right, in its sole discretion, to increase or decrease
from time to time the total Rentable Area of the Building based upon Landlord's standard rentable area
measurement standards used for the Building.
6.2 Definitions.
6.2.1 Intentionally Omitted.
6.2.2 "Expense Year" shall mean each calendar year during the Lease Term (or partial
calendar year if the Lease Term commences or ends on other than the first (0) or last day of a calendar
year).
6.2.3 "Operating Expenses," for purposes hereof, are intended to be inclusive of all costs
because of or in connection with the ownership, management, maintenance, security, repair, replacement,
restoration or operation of the Building and the Real Property, except Tax Expenses and Utilities Costs,
interest on and capital retirement of Landlord's mortgage loans, and costs charged by Landlord directly
to specific tenants.
If Landlord replaces any of the items in categories listed in Sections 6.2.3.1 to 6.2.3.6 for which the cost
of the replacement is not deductible as an expense in the year incurred according to generally accepted
accounting principles ("GAAP"), Landlord shall amortize the cost of such replacement over its useful life,
as reasonably determined by Landlord, and Tenant shall only be obligated to reimburse Landlord each
year for Tenant's Share of such amortized cost. Landlord shall have no obligation to amortize repairs or
maintenance items relating to the Major Items that are deductible in the year incurred in accordance with
GAAP, and all such repair and maintenance costs shall be payable by Tenant to Landlord as Operating
Expenses in the year incurred. Operating Expenses may include, but shall not be limited to, the following:
6.2.3.1 The cost of all insurance carried by Landlord in connection with the
Building as reasonably determined by Landlord, including without limitation, fire and extended coverage,
property damage, liability and rent loss insurance and of any other insurance maintained by Landlord
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which insurance shall cover the use and operation of the Building, Common Areas, and/or Real Property,
and which is customarily carried by landlords of comparable buildings in the area or is reasonably deemed
prudent by Landlord.
6.2.3.2 All costs and expenses of repairing, operating and maintaining the
heating, ventilating and air conditioning system for the Building, including the cost of all utilities required
in the operation thereof, except those paid directly by tenants of the Building and including the cost of
replacements of equipment used in connection with such repair and maintenance work and all costs and
expenses incurred in making alterations or additions to the heating, ventilating and air conditioning system
(except as to any systems for use exclusively by a single tenant) in order to comply with applicable Laws.
6.2.3.3 The costs of capital improvements and structural repairs and
replacements made in or to the Building (i) in order to conform to changes subsequent to completion of
the original construction of the Building in any applicable Laws (herein "Required Capital
Improvements"), (ii) that are designed primarily to reduce Operating Expenses or to reduce the rate of
increase in Operating Expenses (herein "Cost Savings Improvements") and/or (iii)which are Conservation
Costs (as defined below) and/or which are otherwise required in order for Landlord to operate the Building
in a first class manner (herein the "Additional Capital Improvements"). The expenditures for Required
Capital Improvements, Cost Savings Improvements and Additional Capital Improvements shall be
reimbursed to Landlord in equal installments over such period as reasonably determined by Landlord,
together with interest on the balance of the unreimbursed expenditure at a rate reasonably determined by
Landlord; provided, however, the amount to be reimbursed for any Cost Savings Improvements shall be
limited in any year to the estimated reduction or estimated savings in Operating Expenses as a result
thereof.
6.2.3.4 All costs and expenses incurred by Landlord in providing standard
services to all tenants of the Building, including management and/or incentive fees, consulting fees, legal
fees and accounting fees, of all contractors and consultants in connection with the management, operation,
maintenance and repair of the Building and Real Property. Any costs or expenses incurred by Landlord in
providing standard services to benefit less than all tenants of the Building or the Landlord directly are not
Operating Expenses.
6.2.3.5 All costs and expenses incurred by Landlord in operating, managing,
repairing and maintaining the Building and Real Property, including all sums expended in connection with
the Common Areas for general maintenance and repairs, resurfacing, painting, restriping, cleaning,
sweeping and janitorial services, window washing, sidewalks, curbs and Building signs, sprinkler systems,
planting and landscaping, lighting, maintenance and repair of any fire protection systems, automatic
sprinkler systems, lighting systems, emergency back-up utility systems, storm drainage systems and any
other utility systems, personnel to implement such services and to police the Common Areas, rental of
machinery and equipment used in such maintenance and services, police and fire protection services, trash
removal services, all costs and expenses pertaining to snow and ice removal, security systems, premiums
and other costs for workers' compensation insurance, wages, withholding taxes, social security taxes, ,
fees for required licenses and permits, supplies, charges for management of the Building and Common
Areas, and the costs and expenses of complying with, or participating in, conservation, recycling,
sustainability, energy efficiency, waste reduction or other programs or practices implemented or enacted
from time to time at the Building and/or Real Property, including, without limitation, in connection with
any LEED (Leadership in Energy and Environmental Design) rating or compliance system or program,
including that currently coordinated through the U.S. Green Building Council or Energy Star rating and/or
compliance system or program (collectively, "Conservation Costs"). Costs and expenses incurred by
Landlord in operating, managing, repairing and maintaining the Building and Real Property which are
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incurred exclusively for the benefit of specific tenants of the Building will be billed accordingly and will
not be included within Operating Expenses.
6.2.3.6 The cost of parking area operation servicing the Building, including
repair, restoration, and maintenance. Landlord does not intend to employ a parking attendant.
6.2.4 "Tax Expenses," shall mean, collectively, any and all general and special taxes and
impositions of every kind and nature whatsoever levied, assessed, or imposed upon, or with respect to the
Building and Real Property, any leasehold improvements, fixtures, installations, additions, equipment,
whether owned by Landlord or Tenant, or either because of or in connection with Landlord's ownership,
leasing and operation of the Building and Real Property, including, without limitation, real estate taxes,
personal property taxes, sewer rents, water rents, general or special assessments, duties or levies charged
or levied upon or assessed against the Building and Real Property and related personal property, transit
taxes, all costs and expenses (including legal fees and court costs) charged for the reasonable protest or
reduction of property taxes or assessments in connection with the Building and Real Property, or any tax
or excise on rent or any other tax (however described) on account of rental received for use and occupancy
of any or all of the Building or Real Property (except Landlord's net income taxes), whether any such
taxes are imposed by the United States, the State of Washington, King County, or any local governmental
municipality, authority, or agency or any political subdivision of any thereof; provided, however, Tax
Expenses shall not include franchise, estate, inheritance, net income, gift, corporate and excess profit taxes
or any taxes associated with the sale of the Real Property or any portion thereof.
6.2.5 "Utilities Costs," shall mean all actual charges for utilities for the Building and the
Real Property which Landlord shall pay during any Expense Year, including, but not limited to, the costs
of water, sewer, gas and electricity, and the costs of heat, ventilation, air conditioning and other utilities
(but excluding those charges for which tenants directly reimburse Landlord or otherwise pay directly to
the utility company) as well as related fees, assessments, measurement meters and devices and surcharges.
Utilities Costs shall include any costs of utilities which are allocated to the Real Property under any
declaration, restrictive covenant, or other instrument pertaining to the sharing of costs by the Real Property
or any portion thereof, including any covenants, conditions or restrictions now or hereafter recorded
against or affecting the Real Property.
Costs.
6.2.6 Special Provisions Regarding - Operating Expenses, Tax Expenses and Utilities
6.2.6.1 Intentionally omitted.
6.2.6.2 Notwithstanding anything to the contrary set forth in this Article 6,
when calculating Operating Expenses for the first Expense Year, Operating Expenses shall exclude one-
time Conservation Costs and other special charges, costs or fees incurred in the first Expense Year only,
including those attributable to market -wide labor -rate increases or other extraordinary circumstances,
including, but not limited to, boycotts and strikes.
6.2.6.3 For purposes of determining Utilities Costs incurred for the first
Expense Year, Utilities Costs for the first Expense Year shall not include any one-time Conservation Costs
or other special charges, costs or fees or extraordinary charges or costs incurred in the first Expense Year
only, including those attributable to boycotts, embargoes, strikes or other shortages of services or fuel.
6.3 Calculation and Payment of Operating Expenses, Tax Expenses and Utilities Costs.
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6.3.1 Calculation of Variance. If for any Expense Year ending or commencing within
the Lease Term, (i) Tenant's Share of Operating Expenses for such Expense Year varies from the amounts
contained in the Estimated Statement, and/or (ii) Tenant's Share of Tax Expenses for such Expense Year
varies from the amounts contained in the Estimated Statement, and/or (iii) Tenant's Share of Utilities
Costs for such Expense Year varies from the amounts contained in the Estimated Statement (the
"Variance"), then Tenant shall pay the Variance as additional Rent to Landlord, or Landlord shall apply
the Variance for the benefit of the Tenant in the manner set forth in Section 6.3.2, below.
6.3.2 Statement of Actual Operating Expenses, Tax Expenses and Utilities Costs and
Payment by Tenant. Landlord shall endeavor to give to Tenant on or before the first (1St) day of April
following the end of each Expense Year, a statement (the "Statement") which shall state the actual
Operating Expenses, Tax Expenses and Utilities Costs incurred or accrued for such preceding Expense
Year, and which shall indicate the amount, if any, of any Variance. Within thirty (30) days after Tenant's
receipt of the Statement for each Expense Year during the Lease Term, Tenant shall pay to Landlord the
full amount of the Variance underpayment for such Expense Year pursuant to Section 6.3.1 above. If any
Statement reflects that the amount paid by Tenant to Landlord for such Expense Year is greater than the
actual amount due for such Expense Year, then Landlord shall, at Landlord's option, either (i) remit such
Variance overpayment to Tenant within thirty (30) days after such applicable Statement is delivered to
Tenant, or (ii) credit such Variance overpayment toward the additional Rent next due and payable to
Tenant under this Lease. The failure of Landlord to timely furnish the Statement for any Expense Year
shall not prejudice Landlord from enforcing its rights under this Article 6. Even though the Lease Term
has expired and Tenant has vacated the Premises, if the Statement for the Expense Year in which this
Lease terminates reflects that Tenant's payment to Landlord of Variance for such Expense Year was
greater than or less than the actual amount paid for such last Expense Year, then within thirty (30) days
after Landlord's delivery of such Statement to Tenant, Landlord shall refund to Tenant any such Variance
overpayment, or Tenant shall pay to Landlord any such Variance underpayment, as the case may be. The
provisions of this Section 6.3.2 shall survive the expiration or earlier termination of the Lease Term.
6.3.3 Statement of Estimated Operating Expenses, Tax Expenses and Utilities Costs.
Landlord shall endeavor to give Tenant a yearly expense estimate statement (the "Estimate Statement")
by November 1St of each year which shall set forth Landlord's reasonable estimate (the "Estimate") of the
Tenant's Share for the following year of (i) the total amount of Operating Expenses allocated to the tenants
of the Building pursuant to Section 6.2.3 above, (ii) the total amount of Tax Expenses allocated to the
tenants of the Building pursuant to Section 6.2.4 above, and (iii) the total amount of Utilities Costs
allocated to the tenants of the Building pursuant to Section 6.2.5 above, and Tenant's Share of such
Operating Expenses, Tax Expenses and Utilities Costs for the then -current Expense Year shall be payable
as additional Rent (the "Estimated Expenses, Taxes and Utilities"). The Estimate Statement for the
Premises at the time of commencement of the Lease is $7.70 per rentable square foot of the Premises
($14,314.30 per month)2. The failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude Landlord from enforcing its rights to collect any Estimated Expenses, Taxes and
Utilities under this Article 6. Until a new Estimate Statement is furnished, Tenant shall pay monthly, with
the monthly Base Rent installments, an amount equal to one -twelfth (1/12) of the total Estimated
Expenses, Taxes and Utilities set forth in the previous Estimate Statement delivered by Landlord to
Tenant.
2 This Estimate is greater than the actual expected amount as certain utilities are currently separately metered for some of the
suites which compose the Premises.
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7. UTILITIES.
7.1 Utilities. Tenant has fully investigated the utility services available at the Premises and
accepts them in their present condition. Tenant shall pay all separately metered utility charges directly.
If any utilities are not separately metered, Tenant shall reimburse Landlord for Tenant's fair share of the
cost of such utilities, as Landlord shall reasonably determine, within thirty (30) days following receipt of
an invoice therefore.
7.2 Separate Metering. Notwithstanding the foregoing provisions of this Section 7 to the
contrary, Landlord shall have the right to cause some or all of the electricity, water and/or other utilities
to be separately metered for the Premises (after giving Tenant at least thirty (30) days advance notice of
its intent to do so), and Tenant shall pay for the cost of all such utilities so separately metered, or which
are billed directly to Tenant, within ten (10) days after Tenant's receipt of Landlord's invoice therefor, in
which event Utilities Costs for the Expense Year shall be equitably reduced to exclude all such utilities
provided to the Premises and to the other premises of the Building leased to other tenants in the Building.
In the event that a portion of the Building is leased to a third party, Landlord shall use commercially
reasonable efforts to cause all utilities (including electricity, water and natural gas, to the extent possible
and customary) to be separately metered for the Premises.
7.3 Utility Service Availability; Interruption of Services. Tenant may operate any
HVAC/furnace and lighting serving the Premises during all hours Tenant conducts business in the
Premises. Tenant agrees that Landlord shall not be liable for any damage, loss or expense incurred by
Tenant by reason of any interruption or failure of utilities and services not caused by Landlord. Landlord
may, with notice to Tenant (advance notice of 48 hours whenever Landlord may reasonably provide such
notice), or without notice in case of emergency, shut off or discontinue utilities and services when such
actions are necessary to make repairs or alterations. No such action shall be construed as an eviction or
disturbance of possession by Landlord nor relieve Tenant from paying Rent or performing any of its
obligations under this Lease. Furthermore, Landlord shall not be liable under any circumstances for a loss
of, or injury to, property or for injury to, or interference with, Tenant's business, including, without
limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to
furnish any of the services or utilities as set forth in this Article 7.
8. MAINTENANCE AND REPAIRS.
8.1 Tenant's Responsibilities. Tenant, at its sole expense, shall keep the Premises, including
all improvements, fixtures, window coverings, furnishings and systems and equipment therein (including,
without limitation, (a) plumbing fixtures and equipment such as dishwashers, garbage disposals, and insta-
hot dispensers, and (b) all equipment located in the Premises that is utilized to supply supplemental HVAC
to the Premises), and the floor or floors of the Building on which the Premises are located, in good order,
repair and condition at all times during the Lease Term, and at the end of the Lease Term surrender the
Premises in good condition, ordinary wear and tear excepted. Tenant shall also be responsible for all
janitorial services and supplies necessary to properly maintain the Premises. In addition, Tenant, at its sole
expense and under the supervision of, and subject to the prior approval of, Landlord, and within any
reasonable period of time specified by Landlord, shall promptly and adequately repair all damage to the
Premises and replace or repair all damaged or broken fixtures and appurtenances except that damage
which is subject to Section 12. If Tenant fails to make such repairs, Landlord may (without notice in the
event of emergency and if no emergency and it is reasonable for Landlord to act without notice, where
such failure continues for more than five (5) business days after notice from Landlord), but shall not be
obligated to, make such repairs and replacements, and Tenant shall pay Landlord the cost thereof,
including a percentage of the cost thereof (to be uniformly established for the Building). Such amount
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shall be sufficient to reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses arising from Landlord's involvement with such repairs and replacements forthwith upon being
billed for same. Landlord may, but shall not be required to, enter the Premises at all reasonable times to
make such repairs, alterations, improvements and additions to the Premises or to the Building or to any
equipment located in the Building as Landlord shall desire or deem necessary or as Landlord may be
required to do by governmental or quasi -governmental authority or court order or decree. Tenant hereby
waives and releases its right to make repairs at Landlord's expense under any applicable Laws.
8.2 Landlord's Responsibilities. Landlord shall undertake the maintenance, repairs and
replacements necessary to maintain the Building in a good and clean condition, comparable to other
buildings of the same class in the Auburn, Washington area. This maintenance, repair and replacement
obligation shall include the roof, foundation, exterior walls (other than plate glass in the Premises) interior
structural walls, all structural components and all systems such as mechanical, electrical, and plumbing
up to Tenant's connection points on each such system (expressly excluding systems and components
thereof within the Premises or unless any such maintenance or repair is required under Section 8.1 to be
performed by Tenant). If at any time during the term of this Lease such maintenance, repairs or
replacements are required, Landlord agrees to make the same promptly upon notice from Tenant and
without unreasonable interference with the operation of the Leased Premises or the business of Tenant;
and if such repairs shall not be undertaken within fifteen days after notice from Tenant that repairs are
required, Tenant shall be entitled to, but not be obligated, to undertake such required repairs at Landlord's
reasonable expense.
9. TENANT IMPROVEMENTS, ALTERATIONS AND ADDITIONS.
9.1 Landlord's Consent Required. The Tenant anticipated that it will make alterations and
improvements to the Premises in stages as provided herein and in Exhibit D. Tenant shall not be limited
in the number of stages of improvements and/or alterations to the Premises after the Commencement Date.
Notwithstanding the foregoing sentences in this Section 9. 1, Tenant shall not make any alterations or
additions to the Premises without first procuring Landlord's written consent which shall be given within
thirty (30) days from delivery by Tenant of all design drawings associated with the alteration and which
shall not be unreasonably withheld. Landlord will be deemed to have given its consent if no notice of
disapproval is given to Tenant by 5:00pm on the thirtieth day. In no event, however, shall Tenant alter
the exterior of the Premises, except as provided in Section 22.17, or make any change or alteration which
would impair the structural soundness of the Building. Upon obtaining such consent, Tenant shall cause
the work to be done promptly and in good and workmanlike manner and in accordance with the plans and
specifications submitted to, and approved by, Landlord. Landlord's consent notwithstanding, all work
shall be performed in accordance with all applicable Laws and as expressly provided in Exhibit D where
such alterations, additions and improvements are defined to be Tenant Improvements. All work performed
and materials supplied shall be performed or supplied only by contractors or volunteers3 approved by
Landlord, and Landlord shall have the right to grant such approval conditionally or to withdraw the same
at any time. Landlord's approval thereunder shall create no responsibility or liability on the part of
Landlord for the completeness, design, sufficiency or compliance with all Laws regarding the alterations.
9.2 Wi-Fi Network. If Tenant desires to install a wireless intranet, internet or any data or
communications network in the Premises (collectively, "Wi-Fi Network"), Tenant shall use such Wi-Fi
Network so as not to cause any interference to other tenants in the Building or Real Property or with any
other tenant's communication equipment, and not to damage the Building or Real Property or interfere
3 Of any Service Provider (as defined under the Lease) may work in the Premises so long as Tenant or Tenant's contractor
supervises or is responsible for their work.
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with the normal operation of the Building or Real Property, and Tenant hereby agrees to indemnify, defend
and hold Landlord harmless from and against any and all claims, costs, damages, expenses and liabilities
(including attorneys' fees) (collectively, the "Claims") arising out of Tenant's failure to comply with the
provisions of this Section 9.2, except to the extent the Claims are caused by the gross negligence or willful
misconduct of Landlord and are not insured or required to be insured by Tenant under this Lease. Should
any interference occur, Tenant shall take all necessary steps as soon as reasonably possible, but no later
than three (3) calendar days following such occurrence, to correct such interference. If such interference
continues after such three (3) day period, Tenant shall immediately cease operating the Wi-Fi Network
until such interference is corrected or remedied to Landlord's satisfaction. Tenant acknowledges that
Landlord has granted and/or may grant telecommunication rights to other tenants and occupants of the
Building or Real Property and to telecommunication service providers, and in no event shall Landlord be
liable to Tenant for any interference to the Wi-Fi Network. Landlord makes no representation that the
Wi-Fi Network shall be able to receive or transmit communication signals without interference or
disturbance. Tenant shall (i) promptly pay any tax, license or permit fees charged pursuant to any Laws
in connection with the installation, maintenance or use of the Wi-Fi Network and comply with all
precautions and safeguards recommended by all governmental authorities, (ii) pay for all necessary
repairs, replacements to or maintenance of the Wi-Fi Network, and (iii) be responsible for any
modifications, additions or repairs to the Building or Real Property, including without limitation, Building
or Real Property systems or infrastructure, which are required by reason of the installation, operation or
removal of Tenant's Wi-Fi Network. Should Landlord be required to retain professionals to research any
interference issues that may arise and confirm Tenant's compliance with the terms of this Section 9.2,
Tenant shall reimburse Landlord for the costs incurred by Landlord in connection with Landlord's
retention of such professionals, the research of such interference issues and confirmation of Tenant's
compliance with the terms of this Section 9.2 within twenty (20) days after the date Landlord submits to
Tenant an invoice for such costs. This reimbursement obligation is in addition to, and not in lieu of, any
rights or remedies Landlord may have in the event of a breach or default by Tenant under this Lease.
9.3 Surrender at End of Lease Term. Any alterations, additions and improvements made by
Tenant on the Premises, excepting Tenant's trade fixtures, shall immediately become the property of
Landlord and remain upon, and be surrendered with, the Premises at the expiration or earlier termination
of the Lease Term, unless prior to the expiration or earlier termination of the Lease Term Landlord
provides written notice to Tenant to remove the same. In such case Tenant shall remove same on or before
the expiration of the Lease Term, and repair any damage resulting from such removal. Upon the expiration
of the Lease Term, or any sooner termination, Tenant shall remove all of its personal property and any
cabling and wiring (including cabling and wiring associated with the Wi-Fi Network) from the Premises
and repair all damage resulting from such removal; provided, however, if prior to the expiration or earlier
termination of the Lease Term Landlord provides written notice to Tenant to surrender the cabling and
wiring with the Premises upon the expiration or earlier termination of the Lease Term, Tenant shall not
remove such cabling and wiring. If Tenant fails to complete any such removal work and/or to repair any
damage caused by such removal work pursuant to the foregoing, Landlord may do so and may charge the
cost thereof to Tenant (together with a five percent (5%) supervision/administration fee), and Tenant shall
reimburse Landlord for such costs within thirty (30) days after receipt of an invoice therefor.
9.4 Manner of Construction. Landlord may impose, as a condition of its consent to any and
all alterations, additions or repairs of the Premises ("Alterations"), such requirements as Landlord in its
reasonable discretion may deem desirable, including, but not limited to, the requirement that Tenant utilize
for such purposes only contractors, subcontractors, materials, mechanics and materialmen selected by
Tenant and approved by Landlord (in Landlord's sole discretion), the requirement that upon Landlord's
request, Tenant shall, at Tenant's expense, remove such Alterations upon the expiration or any early
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termination of the Lease Term; provided, however, that if Tenant's request for approval of any Alteration
requests a determination by Landlord as to whether or not Tenant shall be required to remove the subject
Alteration upon the expiration or earlier termination of this Lease in accordance with the terms hereof,
then Landlord shall include in its consent (if granted) notice as to whether the subject Alteration shall be
required to be removed prior to the expiration or earlier termination of this Lease, and corresponding
repairs made. If Landlord's consent is silent on the subject of removal, the Tenant shall not need to remove
the Alteration. Tenant shall construct such Alterations and perform such repairs in a good and
workmanlike manner, in conformance with any and all applicable Laws and pursuant to a valid building
permit, issued by the city in which the Building is located (or other applicable governmental authority).
In the event Tenant performs any Alterations in the Premises which require or give rise to governmentally
required changes to the "Base Building," as that term is defined below, then Landlord shall, at Tenant's
expense, make such changes to the Base Building. The "Base Building" shall include the structural
portions of the Building, and the systems and equipment located in the internal core of the Building on
the floor or floors on which the Premises are located. In performing the work of any such Alterations,
Tenant shall have the work performed in such manner so as not to unreasonably obstruct access to the
Building or any portion thereof, by any other tenant of the Building, and so as not to unreasonably obstruct
the business of Landlord or other tenants in the Building. In addition to Tenant's obligations under Article
9 of this Lease, Tenant shall deliver to the Landlord a reproducible copy of the "as built" drawings of the
Alterations as well as all permits, approvals and other documents issued by any governmental agency in
connection with the Alterations.
9.5 Payment for Work. All costs of any such Alterations or work shall be paid promptly by
Tenant so as to avoid the assertion of any mechanic's or materialman's lien. Tenant shall discharge, by
bonding, payment or other means, any mechanic's lien filed against the Premises, the Building or the Real
Property within thirty (30) days after the receipt of notice thereof, and shall promptly inform Landlord of
any such notice. If the lien is not discharged within said thirty (30) day period, Landlord shall have the
right, but not the obligation, to discharge said lien by payment, bonding or otherwise, and the costs and
expenses to Landlord of obtaining such discharge shall be paid to Landlord by Tenant on demand as
additional rent.
9.6 Tenant Acknowledgment. Tenant acknowledges that in performing any improvements or
alterations to the Premises, Tenant is not acting as the agent of Landlord and that no labor, professional
services, materials, or equipment for the improvement of the Premises or Real Property are being furnished
at the insistence of Landlord.
9.7 Construction Insurance. In addition to the requirements of Article 10 of this Lease, and
subject to Tenant's right to self -insure, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence that Tenant carries
"Builder's All Risk" insurance in an amount approved by Landlord covering the construction of such
Alterations, and such other insurance as Landlord may reasonably require, it being understood and agreed
that all of such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease immediately
upon completion thereof. In addition, Tenant's contractors and subcontractors shall be required to carry
Commercial General Liability Insurance in an amount approved by Landlord and otherwise in accordance
with the requirements of Article 10 of this Lease. Landlord may, in its discretion, require Tenant to obtain
a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien -free completion of such Alterations and naming Landlord as a co -obligee.
9.8 Landlord's Property. All Alterations, improvements, fixtures, equipment and/or
appurtenances which may be installed or placed in or about the Premises, from time to time, shall be at
the sole cost of Tenant and shall be and become the property of Landlord, except that Tenant may remove
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any Alterations, improvements, fixtures and/or equipment which Tenant can substantiate to Landlord have
not been paid for with any Tenant improvement allowance funds provided to Tenant by Landlord,
provided Tenant repairs any damage to the Premises and Building caused by such removal and returns the
affected portion of the Premises to a building standard tenant improved condition as determined by
Landlord. Furthermore, Landlord may, subject to the terms of Section 9.3 of this Lease, by written notice
to Tenant prior to the end of the Lease Term, or given following any earlier termination of this Lease,
require Tenant, at Tenant's expense, to remove any Alterations and/or improvements and/or systems and
equipment within the Premises and to repair any damage to the Premises and Building caused by such
removal and return the affected portion of the Premises to a building standard tenant improved condition
as determined by Landlord. If Tenant fails to complete such removal and/or to repair any damage caused
by the removal of any Alterations and/or improvements and/or systems and equipment in the Premises
and return the affected portion of the Premises to a building standard tenant improved condition as
reasonably determined by Landlord, Landlord may do so and may charge the cost thereof to Tenant.
10. INSURANCE.
10.1 Landlord's Liability and Fire and Casualty Insurance. Landlord shall carry commercial
general liability insurance with respect to the Building during the Lease Term, and shall further insure the
Building during the Lease Term against loss or damage due to fire and other casualties covered within the
classification of fire and extended coverage, vandalism coverage and malicious mischief, sprinkler
leakage, water damage and special extended coverage. Such coverage shall include a rental loss
endorsement and shall be in such amounts, from such companies, and on such other terms and conditions,
as Landlord may from time to time reasonably determine. Additionally, at the option of Landlord, such
insurance coverage may include the risks of earthquakes and/or flood damage, terrorist acts and additional
hazards and one or more loss payee endorsements in favor of the holders of any mortgages or deeds of
trust encumbering the interest of Landlord in the Building or the ground or underlying lessors of the
Building, or any portion thereof. Notwithstanding the foregoing provisions of this Section 10.1, the
coverage and amounts of insurance carried by Landlord in connection with the Building shall, at a
minimum, be comparable to the coverage and amounts of insurance which are carried by reasonably
prudent landlords of building comparable to and in the vicinity of the Building (provided that in no event
shall Landlord be required to carry earthquake or terrorism insurance), and Worker's Compensation and
Employer's Liability coverage as required by applicable Law.
10.2 Tenant's Compliance with Landlord's Fire and Casualty Insurance. Tenant shall, at
Tenant's expense, comply with all insurance company requirements pertaining to the use of the Premises.
If Tenant's conduct or use of the Premises causes any increase in the premium for such insurance policies,
then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's expense, shall comply
with all rules, orders, regulations or requirements of the American Insurance Association (formerly the
National Board of Fire Underwriters) and with any similar body.
10.3 Tenant's Insurance. Tenant shall maintain the following coverages in the following
amounts.
10.3.1 Commercial General Liability Insurance on an occurrence form covering the
insured against claims of bodily injury, personal injury and property damage (including loss of use thereof)
arising out of Tenant's operations, and contractual liabilities (covering the performance by Tenant of its
indemnity agreements) including a Broad Form Commercial General Liability endorsement covering the
insuring provisions of this Lease and the performance by Tenant of the indemnity agreements set forth in
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Section 11.1 of this Lease, and including products and completed operations coverage, for limits of
liability on a per location basis of not less than4:
Bodily Injury and
Property Damage Liability
Personal Injury Liability
$2,000,000 each occurrence
$2,000,000 annual aggregate
$2,000,000 each occurrence
$2,000,000 annual aggregate
10.3.2 Commercial Property Insurance covering (i) all office furniture, business and trade
fixtures, office equipment, free-standing cabinet work, movable partitions, merchandise, alterations and
improvements and all other items of Tenant's property on the Premises installed by, for, or at the expense
of Tenant, (ii) the "Tenant Improvements," as that term is defined in the Tenant Work Letter, and any
other improvements which exist in the Premises as of the Commencement Date (excluding the Base
Building) (the "Original Improvements"), and (iii) all other improvements, alterations and additions to the
Premises. Such insurance shall be written on an "all risks" of physical loss or damage basis, for the full
replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation
of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and
shall include coverage for damage or other loss caused by fire or other peril including, but not limited to,
vandalism and malicious mischief, theft, water damage of any type, including sprinkler leakage, bursting
or stoppage of pipes, and explosion, and providing business interruption coverage for a period of one year.
10.3.3 Worker's Compensation and Employer's Liability or other similar insurance
pursuant to all applicable state and local statutes and regulations.
10.3.4 Loss of income, business interruption and extra expense insurance in such amounts
as will reimburse Tenant for direct and indirect loss of earnings attributable to all perils commonly insured
against by prudent tenants or attributable to prevention of loss of access to the Premises or to the Building
as a result of such perils; provided, however, that Tenant may self -insure with regard to the risks described
in this Section 10.3.4, provided that in all instances such self-insurance shall be deemed to contain all of
the terms and conditions applicable to such insurance as required in this Article 10, and Tenant hereby
waives any right it may have against Landlord with respect to any damage or loss that would otherwise
have been covered by the insurance coverage described in this Section 10.3.4.
10.3.5 Commercial Auto Liability Insurance with a limit of not less than $2,000,000 each
accident. Such insurance shall cover liability arising out of owned, hired and nonowned autos. Coverage
shall be written on ISO form CA 0001 or a substitute form providing equivalent liability coverage. If
necessary, the policy shall be endorsed to provide contractual liability coverage equivalent to that provided
in the current edition of the ISO form. Tenant waives all rights against Landlord and its agents, officers,
directors and employees for recovery of damages to the extent these damages are covered by the business
auto liability insurance obtained by Tenant.
10.4 Form of Policies. The minimum limits of policies of insurance required of Tenant under
this Lease shall in no event limit the liability of Tenant under this Lease. Such insurance shall (i) name
Landlord, Landlord's lenders, and any other party the Landlord so specifies, as an additional insured,
including Landlord's managing agent, if any; (ii) specifically cover the liability assumed by Tenant under
this Lease, including, but not limited to, Tenant's obligations under Section 11.1 of this Lease; (iii) be
4 With no intra -insured exclusions as between insured persons or organizations. Tenant insurance shall be primary to and not
contributory with any similar insurance carried by Landlord, whose insurance shall be considered excess insurance only.
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issued by an insurance company having a rating of not less than A -:X in Best's Insurance Guide or which
is otherwise acceptable to Landlord and licensed to do business in the State of Washington; (iv) be primary
and noncontributory insurance as to all claims thereunder and provide that any insurance carried by
Landlord is excess and is non-contributing with any insurance requirement of Tenant; (v) be in form and
content reasonably acceptable to Landlord; (vi) provide that said insurance shall not be canceled or
coverage changed unless thirty (30) days' prior written notice shall have been given to Landlord and any
mortgagee of Landlord; (vii) contain a cross -liability endorsement or severability of interest clause
reasonably acceptable to Landlord; and (viii) with respect to the insurance required in Section 10.3 above,
have deductible amounts not exceeding $25,000.00. Tenant shall deliver said policy or policies or
certificates thereof to Landlord on or before the Commencement Date and at least twenty (20) days before
the expiration dates thereof. Further, Landlord shall have the right, from time to time, to request copies
of policies of Tenant's insurance required hereunder, which Tenant shall thereafter provide within ten (10)
business days. In the event Tenant shall fail to procure such insurance, or to deliver such policies or
certificates of insurance, Landlord may, at its option, procure such policies for the account of Tenant, and
the cost thereof shall be paid to Landlord within five (5) business days after delivery to Tenant of bills
therefor.
10.5 Subrogation. Landlord and Tenant intend that their respective property loss risks shall be
borne by reasonable insurance carriers to the extent above provided, and Landlord and Tenant hereby
agree to look solely to, and seek recovery only from, their respective insurance carriers for any loss or
damage that may occur to the Project, Landlord's personal property, Tenant's betterments in and about
the Premises, and Tenant's personal property by reason of fire or other casualty, regardless of cause or
origin. The parties each hereby waive all rights and claims against each other for such losses, by way of
subrogation or otherwise, including their respective employees, officers, directors, subsidiaries, affiliates,
agents, representatives, and assigns, and waive all rights of subrogation of their respective insurers,
provided such waiver of subrogation shall not affect the right to the insured to recover thereunder. The
parties agree that their respective insurance policies are now, or shall be, endorsed such that the waiver of
subrogation shall not affect the right of the insured to recover thereunder, so long as no material additional
premium is charged therefor. The above waiver of subrogation applies whether or not there are any
deductibles or self-insurance and in the absence of insurance.
10.6 Self -Insurance. Subject to Landlord's review and approval, which will not be unreasonably
withheld, Tenant may satisfy any or all of the above insurance requirements by use of self-insurance,
deductible, and/or a captive insurance company (and the rating requirements set forth in Section 10.4 are
not applicable to Tenant's self-insurance or to policies issued by a captive insurance company). Tenant
has advised the Landlord of its current membership in the Washington Cities Insurance
Authority which is a self-insured municipal risk pool, offering liability, property and specialty
insurance programs, which insurance policies/provisions Landlord has reviewed and approved in
advance of the execution of this Lease. Landlord further reserves the right, at Landlord's discretion, to
periodically review Tenant's financial means to meet the insurance requirements included herein by self-
insurance. If Landlord reasonably determines that Tenant cannot meet the insurance obligations included
herein by self-insurance, Landlord may require Tenant to obtain and maintain insurance coverages for
requirements as provided in this Article 10 with insurance companies rated not less A -:X in Best's
Insurance Guide or which is otherwise acceptable to Landlord and licensed to do business in the State of
Washington. The self-insurance shall protect the indemnified parties in the same manner and to the same
extent as they would have been protected had the policy or policies not been self-insured, contained a self-
insured retention or deductible. The application of coverage within this self-insurance, election not to
insure, and/or deductible is deemed covered in accordance with the policy forms set forth in this Article
10.
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10.6.1 Tenant's ability to satisfy any or all of the above insurance requirements by use of
self-insurance, deductible, and/or a captive insurance company as permitted in Section 10.6 is personal to
the Original Tenant and may not be assigned or exercised, voluntarily or involuntarily, by or to, any person
or entity other than the Original Tenant.
10.7 Additional Insurance Obligations. Tenant shall carry and maintain during the entire Lease
Term, at Tenant's sole cost and expense, increased amounts of the insurance required to be carried by
Tenant pursuant to this Article 10 and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may be reasonably
requested by Landlord, but in no event in excess of the amounts and types of insurance then being required
by landlords of buildings comparable to and in the vicinity of the Building.
11. INDEMNITY.
11.1 Indemnification and Waiver. Except to the extent caused by the negligence or willful
misconduct of Landlord, Tenant hereby assumes all risk of damage to property or injury to persons in,
upon or about the Premises from any cause whatsoever (including, but not limited to, any personal injuries
resulting from a slip and fall in, upon or about the Premises) and agrees that Landlord, its partners,
subpartners and their respective officers, agents, servants, employees, and independent contractors
(collectively, "Landlord Parties") shall not be liable for, and are hereby released from any responsibility
for, any damage either to person or property or resulting from the loss of use thereof, which damage is
sustained by Tenant or by other persons claiming through Tenant. Tenant shall indemnify, defend, protect,
and hold harmless the Landlord Parties from any and all loss, cost, damage, expense and liability
(including, without limitation, court costs and reasonable attorneys' fees) incurred in connection with or
arising from any cause in, on or about the Premises (including, but not limited to, a slip and fall), any
negligence or willful misconduct of Tenant or of any person claiming by, through or under Tenant, or of
the contractors, agents, servants, employees, invitees, guests or licensees of Tenant or any such person,
in, on or about the Building or any breach of the terms of this Lease, either prior to, during, or after the
expiration of the Lease Term, provided that the terms of the foregoing indemnity shall not apply to the
negligence or willful misconduct of Landlord. Except to the extent caused by the negligence or willful
misconduct of Landlord, should Landlord be named as a defendant in any suit brought against Tenant in
connection with or arising out of Tenant's occupancy of the Premises, Tenant shall pay to Landlord its
costs and expenses incurred in such suit, including without limitation, its actual professional fees such as
reasonable appraisers', accountants' and attorneys' fees. Landlord shall indemnify, defend, protect, and
hold harmless Tenant, its partners, and their respective officers, agents, servants, employees, and
independent contractors (collectively, "Tenant Parties") from any and all loss, cost, damage, expense and
liability (including, without limitation, reasonable attorneys' fees) arising from the negligence or willful
misconduct of Landlord in, on or about the Building, except to the extent caused by the negligence or
willful misconduct of the Tenant Parties. Notwithstanding anything to the contrary set forth in this Lease,
either party's agreement to indemnify the other party as set forth in this Section 11.1 shall be ineffective
to the extent the matters for which such party agreed to indemnify the other party are covered by insurance
required to be carried by the non -indemnifying party pursuant to this Lease. Further, Tenant's agreement
to indemnify Landlord and Landlord's agreement to indemnify Tenant pursuant to this Section 11.1 are
not intended to and shall not relieve any insurance carrier of its obligations under policies required to be
carried pursuant to the provisions of this Lease, to the extent such policies cover, or if carried, would have
covered the matters, subject to the parties' respective indemnification obligations; nor shall they supersede
any inconsistent agreement of the parties set forth in any other provision of this Lease. Tenant hereby
agrees that it shall not assert any industrial insurance immunity rights pursuant to Title 51 RCW (as the
same may be amended, substituted or replaced) if such assertion would be inconsistent with or otherwise
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impair Landlord's right to indemnification under this Section 11.1, and, accordingly, hereby waives all
such industrial insurance immunity rights. The foregoing waiver of industrial insurance immunity rights
was specifically negotiated by .Landlord and Tenant and is solely for the benefit of the Landlord and
Tenant, and their successors and assigns, under the Lease, and is not intended as a waiver of Tenant's
rights of immunity under such industrial insurance for any other Purposes. If and only to the extent
RCW 4.24.115 is deemed to apply to all or any part of this Lease then the indemnities set forth in this
Lease shall be limited such that: (i) Tenant is not indemnifying Landlord for damages arising out ofbodily
injury to persons or damage to property caused by, or resulting from, the sole negligence of Landlord or
its agents or employees; and (ii) any indemnity against liability for damages arising out of bodily injury
to persons or damage to property caused by or resulting from, the concurrent negligence of (A) Landlord
or its agents or employees, and (B) Tenant or its agents or employees, is valid and enforceable only to the
extent permitted under RCW 4.24.115, The parties hereby acknowledge that the foregoing waiver was
mutually negotiated by the parties. The provisions of this Section 11.1 shall survive the expiration or
sooner termination of this Lease with respect to any claims or liability arising in connection with any event
occurring prior to such expiration or termination.
'134/z:� A
/
Landlord's Initials Tenant's Initials
11.2 Indemnification of Other Tenants. Tenant shall indemnify and save harmless all other
tenants of the Building from any loss or damage caused to the Building owing to the leakage or escape of
water, gas or other substances from any pipes, machinery or equipment installed by Tenant within the
Building.
11.3 Limitation of Liability. Except in the event of negligence or willful misconduct of
Landlord, Landlord shall not be liable for injury or damage which may be sustained by the person, goods,
wares, merchandise or property of Tenant, its employees, invitees or customers, or any other person in or
about the Premises caused by, or resulting fi-om, fire, steam, electricity, gas or water, which may leak or
Clow from or into any pail of the Premises, or fi•om breakage, leakage, obst►-uction or other defects of the
pipes, sprinklers, wires, appliances, plumbing; air conditioning or lighting fixtures of the same, whether
the said damage or injury results from conditions arising upon the Premises or upon other portions of the
Building of which the Premises are a part, or from other sources. Landlord shall not be liable for any
damages arising from any act or neglect of any other tenant of the Building. In no event shall Landlord
be liable for consequential damages.
12. DAMAGE DESTRUCTION AND BUSINESS INTERRUPTION.
12.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify Landlord of any
damage to the Premises resulting from fire or any other casualty. If the Premises or any Common Areas
of the Building serving or providing access to the Premises shall be damaged by fire or other casualty,
Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of this Article 12, restore the
structural components of the Premises and such Common Areas. Stich restoration shall be to substantially
the same condition of the structural components of the Premises and Common Areas prior to the casualty,
except for modifications required by zoning and building codes and other Laws or by the holder of a
mortgage on the Building, or the lessor of a ground or underlying lease with respect to the Real Property
and/or the Building, or any other modifications to the Common Areas deemed desirable by Landlord.
Upon the occurrence of any damage to the Premises, Tenant shall assign to Landlord (or to any party
designated by Landlord) all insurance proceeds payable to Tenant under Tenant's insurance required under
Section 10.3 above pertaining to all tenant improvements and fixtures in the Premises (but not Tenant's
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81295029x3143815-001
personal property), and Landlord shall repair any damage to the tenant improvements installed in the
Premises and shall return such tenant improvements to their original condition; provided that if the cost
of such repair by Landlord exceeds the amount of insurance proceeds received by Landlord from Tenant's
insurance carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant to Landlord prior
to Landlord's repair of the damage. Notwithstanding anything to the contrary herein, in no event shall
Landlord be obligated to repair or restore any specialized or dedicated equipment serving Tenant, such as
any cabling, wiring, supplemental utility system or telephone system or Wi-Fi Network. In connection
with such repairs and replacements, Tenant shall, prior to the commencement of construction, submit to
Landlord, for Landlord's review and approval, all plans, specifications and working drawings relating
thereto, and Landlord shall select the contractors to perform such improvement work. Landlord shall not
be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's business
resulting in any way from such damage or the repair thereof, provided, however, that if such fire or other
casualty shall have damaged the Premises or Common Areas necessary to Tenant's occupancy, and if such
damage is not the result of the negligence or willful misconduct of Tenant or Tenant's employees,
contractors, licensees, or invitees, Landlord shall allow Tenant a proportionate abatement of Base Rent
and Tenant's Share of Operating Expenses, Tax Expenses and Utilities Costs to the extent Landlord is
reimbursed from the proceeds of rental interruption insurance purchased by Landlord as part of Operating
Expenses, during the time and to the extent the Premises are unfit for occupancy for the purposes permitted
under this Lease, and not occupied and used by Tenant as a result thereof.
12.2 Landlord's Option to Repair. Notwithstanding Section 12.1 above to the contrary,
Landlord may elect not to rebuild and/or restore the Premises and/or Building and instead terminate this
Lease by notifying Tenant in writing of such termination within sixty (60) days after Landlord becomes
aware of such damage, such notice to include a termination date giving Tenant up to ninety (90) days to
vacate the Premises, but Landlord may so elect only if the Building shall be damaged by fire or other
casualty or cause, whether or not the Premises are affected, and one or more of the following conditions
is present: (i) repairs cannot reasonably be completed within one hundred twenty (120) days after the date
of such damage (when such repairs are made without the payment of overtime or other premiums); (ii) the
holder of any mortgage on the Building or ground or underlying lessor with respect to the Real Property
and/or the Building shall require that the insurance proceeds or any portion thereof be used to retire the
mortgage debt, or shall terminate the ground or underlying lease, as the case may be; or (iii) the damage
is not fully covered by Landlord's insurance policies. In addition, if the Premises or the Building is
destroyed or damaged to any substantial extent during the last twenty-four (24) months of the Lease Term,
then notwithstanding anything contained in this Article 12, Landlord shall have the option to terminate
this Lease by giving written notice to Tenant of the exercise of such option within thirty (30) days after
Landlord becomes aware of such damage, in which event this Lease shall cease and terminate as of the
date of such notice. Upon any such termination of the Lease pursuant to this Section 12.2, Tenant shall
pay the Base Rent and additional rent, properly apportioned up to such date of termination, and both
parties hereto shall thereafter be discharged from all further obligations under this Lease arising after such
termination, except for those obligations which expressly survive the expiration or earlier termination of
the Lease Term.
12.3 Waiver of Statutory Provisions. The provisions of this Lease, including this Article 12,
constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or
destruction of, all or any part of the Premises, the Building or any other portion of the Real Property, and
any statute or regulation of the state in which the Building is located, with respect to any rights or
obligations concerning damage or destruction in the absence of an express agreement between the parties,
and any other statute or regulation, now or hereafter in effect, shall have no application to this Lease or
any damage or destruction to all or any part of the Premises, the Building or the Real Property.
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13. TENANT TAXES.
13.1 Personal Property. Tenant shall pay, prior to delinquency, all taxes, assessments, license
fees and public charges levied, assessed or imposed upon, or measured by, the value of Tenant's business
operation, and/or the cost or value of any furniture, fixtures, equipment and other personal property of
Tenant at any time situated upon or in the Premises. Tenant shall cause all such personal property to be
assessed and billed separately from the Building and Real Property.
13.2 Other Taxes for Which Tenant Is Directly Responsible. In addition, as to all other taxes
for which the Tenant is directly responsible, Tenant shall reimburse Landlord upon demand for any and
all taxes or assessments required to be paid by Landlord, excluding state, local and federal personal or
corporate income taxes measured by the net income of Landlord from all sources and estate and
inheritance taxes, whether or not customary or within the contemplation of the parties hereto, when:
13.2.1 Said taxes are measured by, or reasonably attributable to, the cost or value of any
leasehold improvements made in or to the Premises by or for Tenant, to the extent the cost or value of
such leasehold improvements exceeds the cost or value of a Building standard build -out as determined by
Landlord, regardless of whether title to such improvements shall be vested in Tenant or Landlord;
13.2.2 Said taxes are assessed upon, or with respect to, the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion
of the Real Property (including the Parking Areas);
13.2.3 Said taxes are assessed upon this transaction or any document to which Tenant is a
party creating or transferring an interest or an estate in the Premises; or
13.2.4 Said assessments are levied or assessed upon the Real Property or any part thereof
or upon Landlord and/or by any governmental authority or entity, and relate to the construction, operation,
management, use, alteration or repair of mass transit improvements.
13.2.5 To the extent that Tenant is entitled to any exemptions from any such taxes are
passed on to Landlord, the Tenant's obligations for said taxes shall be offset.
13.3 Increase in Taxes. If at any time during the Lease Term any of Tenant's property is
assessed as a part of the Premises, or if the assessed value of Landlord's property is increased by the
inclusion therein of a value placed on Tenant's property or other improvements made by Tenant, Tenant
shall pay to Landlord upon demand, as additional Rent, the amount of any such additional taxes as may
be levied against the Building or Real Property by reason thereof.
14. COVENANT AGAINST LIENS.
Tenant shall keep the Building and Premises free from any liens or encumbrances arising out of
the work performed, materials furnished or obligations incurred by or on behalf of Tenant, and shall
protect, defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments
or costs (including, without limitation, reasonable attorneys' fees and costs) arising out of same or in
connection therewith. Tenant shall give Landlord notice at least twenty (20) days prior to the
commencement of any such work on the Premises (or such additional time as may be necessary under
applicable Laws) to afford Landlord the opportunity of posting and recording appropriate notices of non -
responsibility. Tenant shall remove any such lien or encumbrance by bond or otherwise within ten (10)
business days after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay the amount
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necessary to remove such lien or encumbrance, without being responsible for investigating the validity
thereof. The amount so paid shall be deemed Additional Rent under this Lease payable within ten (10)
days following demand, without limitation as to other remedies available to Landlord under this Lease.
Nothing contained in this Lease shall authorize Tenant to do any act which shall subject Landlord's title
to the Building or Premises to any liens or encumbrances whether claimed by operation of law or express
or implied contract. Any claim to a lien or encumbrance upon the Building or Premises arising in
connection with any such work or respecting the Premises not performed by or at the request of Landlord
shall be null and void, or at Landlord's option shall attach only against Tenant's interest in the Premises
and shall in all respects be subordinate to Landlord's title to the Building and Premises.
15. ASSIGNMENT AND SUBLETTING.
15.1 Transfers. Tenant shall not (a) voluntarily or by operation of law, assign, encumber or
transfer all of Tenant's interest in this Lease; and (b) without the prior written consent of Landlord,
voluntarily or by operation of law, sublet or license any part of Tenant's interest in this Lease or in the
Premises or permit any part of the Premises to be used or occupied by any person other than Tenant, its
employees, customers and others having lawful business with Tenant (all of the foregoing under this
subsection (b) are hereinafter sometimes referred to collectively as "Transfers" and any person or entity
to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a "Transferee").
If Tenant shall desire Landlord's consent to any Transfer, Tenant shall notify Landlord in writing, which
notice (the "Transfer Notice") shall include: (i) the proposed effective date of the Transfer, which shall
not be less than thirty (30) days nor more than one hundred eighty (180) days after the date of delivery of
the Transfer Notice; (ii) a description of the portion of the Premises to be transferred (the "Subject
Space"); (iii) all of the terms of the proposed Transfer and the consideration thereof, including a
calculation of the Profit Rental (as defined below), in connection with such Transfer, the name and address
of the proposed Transferee, and a copy of all existing operative documents to be executed to evidence
such Transfer or the agreements incidental or related to such Transfer; and (iv) for all other Transferees
current financial statements pertaining to the proposed Transferee certified by an officer (if the Transferee
is a non-profit corporation the financial statements may be limited to IRS Form 990 most recently filed
by the Transferee with the IRS and its current bank and brokerage statements), partner or owner thereof,
and any other information required by Landlord, which will enable Landlord to determine the character,
and reputation of the proposed Transferee, nature of such Transferee's business and proposed use of the
Subject Space, and such other information as Landlord may reasonably require. In the event any such
Transfer is proposed as a sublease to a Service Provider of the Tenant, Landlord's failure to provide Tenant
with a written response to the Transfer Notice within twenty (20) days shall be deemed to the granting of
consent by the Landlord to said Transfer. Except as provided in the foregoing sentence, any attempted
Transfer made without Landlord's prior consent shall be wholly void and shall constitute a breach of this
Lease.
For purposes of this lease, "Service Provider" is defined as organizations or companies that provide
supportive services to individuals with special needs, such as persons experiencing homelessness,
disability, addiction, and poverty. The supportive services provided to these individuals include such
assistance as outreach and engagement, case management, employment information and referral, direct
medical and mental health treatment, healthcare, basic needs assistance and resources, and housing search
and stabilization. In no event shall needle exchange programs or services, safe drug use programs, or
similar services be included in the definition of Service Provider. Any medication assisted treatment
services provided in a manner consistent with 42 CFR Section 8.2 shall not be expressly excluded, but
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shall require Landlord consent to any such use in the same manner as consent to a Transfer in Section
15.2.
15.2 Landlord's Consent. Upon due consideration of the Permitted Uses, Landlord shall not
unreasonably withhold its consent to any proposed Transfer on the terms specified in the Transfer Notice.
The parties hereby agree that it shall be reasonable under this Lease and under any applicable Law for
Landlord to withhold consent to any proposed Transfer where one or more of the following apply, without
limitation as to other reasonable grounds for withholding consent: (i) in Landlord's judgment, the
Transferee is of a character or reputation or engaged in business which is not consistent with the quality
of the Building; (ii) the Transferee intends to use the Subject Space for purposes which are not permitted
under this Lease; (iii) in Landlord's judgment, the Transfer will result in more than a reasonable and safe
number of occupants per floor within the Subject Space; (iv) the proposed Transfer would cause Landlord
to be in violation of another lease or agreement to which Landlord is a party, or would give an occupant
of the Building a right to cancel its lease; (v) the terms of the proposed Transfer will allow the Transferee
to exercise a right of renewal, right of expansion, right of first offer, or other similar right held by Tenant
(or will allow the Transferee to occupy space leased by Tenant pursuant to any such right); or (vi) either
the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or
is under common control with, the proposed Transferee, (A) occupies space in the Building at the time of
the request for consent (B) is negotiating with Landlord to lease space in the Building at such time, or
(C) has negotiated with Landlord during the twelve (12) month period immediately preceding the Transfer
Notice.
If Landlord consents to any Transfer pursuant to the terms of this Section 15.2, Tenant may within
six (6) months after Landlord's consent, enter into such Transfer of the Premises or portion thereof, upon
substantially the same terms and conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 15.1 above, provided that if there are any changes in the terms and conditions
from those specified in the Transfer Notice (1) such that Landlord would initially have been entitled to
refuse its consent to such Transfer under this Section 15.2, or (2) which would cause the proposed Transfer
to be more favorable to the Transferee than the terms set forth in Tenant's original Transfer Notice, Tenant
shall again submit the Transfer to Landlord for its approval and other action under this Article 15.
Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that
Landlord has unreasonably withheld or delayed its consent under Section 15.2 or otherwise has breached
or acted unreasonably under this Article 15, their sole remedies shall be a suit for contract damages (other
than damages for injury to, or interference with, Tenant's business including, without limitation, loss of
profits, however occurring) or declaratory judgment and an injunction for the relief sought, and Tenant
hereby waives all other remedies, including, without limitation, any right at law or equity to terminate this
Lease, on its own behalf and, to the extent permitted under all applicable Laws, on behalf of the proposed
Transferee.
15.3 Intentionally Omitted
15.4 Intentionally Omitted.
15.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and conditions of this
Lease shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed
consent to any further Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation pertaining to the Transfer in
form reasonably acceptable to Landlord and (iv) no Transfer relating to this Lease or agreement entered
into with respect thereto, whether with or without Landlord's consent, shall relieve Tenant or any
guarantor of the Lease from any liability under this Lease, including, without limitation, in connection
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with the Subject Space. In the event that Tenant subleases all or any portion of the Premises in accordance
with the terms of this Article 15, Tenant shall cause such subtenant to carry and maintain the same
insurance coverage terms and limits as are required of Tenant, in accordance with the terms of Article 10
of this Lease.
15.6 Occurrence of Default. Any Transfer hereunder shall be subordinate and subject to the
provisions of this Lease, and if this Lease shall be terminated during the term of any Transfer, Landlord
shall have the right to: (i) treat such Transfer as cancelled and repossess the Subject Space by any lawful
means, or (ii) require that such Transferee attorn to and recognize Landlord as its landlord under any such
Transfer. If Tenant shall be in default under this Lease after the expiration of any applicable notice and
cure period, Landlord is hereby irrevocably authorized to direct any Transferee to make all payments
under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards
Tenant's obligations under this Lease) until such default is cured. Such Transferee shall rely on any
representation by Landlord that Tenant is in default hereunder, without any need for confirmation thereof
by Tenant. Upon any Transfer the Transferee shall assume in writing all obligations and covenants of
Tenant thereafter to be performed or observed under this Lease. No collection or acceptance of rent by
Landlord from any Transferee shall be deemed a waiver of any provision of this Article 15 or the approval
of any Transferee or a release of Tenant from any obligation under this Lease, whether theretofore or
thereafter accruing. In no event shall Landlord's enforcement of any provision of this Lease against any
Transferee be deemed a waiver of Landlord's right to enforce any term of this Lease against Tenant or
any other person. If Tenant's obligations hereunder have been guaranteed, Landlord's consent to any
Transfer shall not be effective unless the guarantor also consents to such Transfer.
16. TENANT'S DEFAULT.
16.1 Definition. The occurrence of any of the following shall constitute a default and breach of
this Lease by Tenant:
16.1.1 Any failure by Tenant to pay when due any Rent or any other monetary sums
required to be paid thereunder, which failure continues for three (3) business days after written notice
thereof from Landlord; provided, however, that Tenant shall not be entitled to more than two (2) notices
for monetary defaults during any consecutive twelve (12) month period, and if, after two (2) such notices,
any Rent or other sum is not paid when due, a default and breach of this Lease shall be considered to have
occurred without further notice; provided, further, that any such notice given pursuant to this
Section 16.1.1 shall be in lieu of, and not in addition to, any statutory notice required under applicable
Laws.
16.1.2 Except where a specific time period is otherwise set forth for Tenant's performance
in this Lease, in which event the failure to perform by Tenant within such time period shall be a default
by Tenant under this Section 16.1.2, any failure by Tenant to observe and perform any other provisions
of this Lease to be observed or performed by Tenant within fifteen (15) days after notice thereof has been
provided to Tenant by Landlord, or if performance is not possible within said period, any failure of Tenant
to commence performance within said period and to diligently prosecute such performance to completion.
16.1.3 Intentionally creating or permitting to be created a nuisance which shall not be
abated within five (5) days after written notice thereof from Landlord.
16.1.4 Abandonment of all or a substantial portion of the Premises by Tenant; or
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16.1.5 The failure by Tenant to observe or perform according to the provisions of Section
22.1 or Article 19 of this Lease where such failure continues for more than five (5) business days after
notice from Landlord.
16.1.6 If Tenant, or any guarantor of Tenant's obligations under this Lease ("Guarantor"):
(i) admits in writing that it cannot meet its obligations as they become due; (ii) is declared insolvent
according to any Law; (iii) makes or attempts to make an assignment of Tenant's or Guarantor's property
is made for the benefit of creditors; (iv) a receiver or trustee is appointed for Tenant or Guarantor or its
property; (v) the interest of Tenant or Guarantor under this Lease is levied on under execution or other
legal process; (vi) any petition is filed by or against Tenant or Guarantor to declare Tenant bankrupt or to
delay, reduce or modify Tenant's debts or obligations; or (vii) any petition is filed or other action taken to
reorganize or modify Tenant's or Guarantor's capital structure, if Tenant or Guarantor is a corporation or
other entity; any such levy, execution, legal process or petition filed against Tenant or Guarantor shall not
constitute a breach of this Lease provided Tenant or Guarantor shall vigorously contest the same by
appropriate proceedings and shall remove or vacate the same within sixty (60) days from the date of its
creation, service or filing.
16.1.7 The taking of this Lease or Tenant's interest therein under writ of execution.
The notice periods provided herein are in lieu of, and not in addition to, any notice periods provided
by Law.
16.2 Interest on Unpaid Sums. If any Rent, or any other monetary sum required to be paid
thereunder by Tenant to Landlord, is not paid when due, such sum shall accrue interest from the date due
until received at the rate (the "Interest Rate") which is the lower of (i) the highest rate permitted by
applicable Law or (ii) eighteen percent (18%) per annum.
16.3 Remedies. In the event of any such default or breach by Tenant, Landlord may at any time
thereafter pursue, without limiting Landlord in the exercise of any other right or remedy which Landlord
may have at law or in equity (all of which remedies shall be distinct, separate and cumulative), any one or
more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any
notice or demand whatsoever:
16.3.1 Terminate this Lease, in which event Tenant shall immediately surrender the
Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy
which it may have for possession or arrearages in rent, enter upon and take possession of the Premises and
expel or remove Tenant and any other person who may be occupying the Premises or any part thereof,
without being liable for prosecution or any claim or damages therefor; and Landlord may recover from
Tenant the following:
16.3.1.4 The worth at the time of award of the unpaid rent which has been earned
at the time of such termination; plus
16.3.1.5 The worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; plus
16.3.1.6 The worth at the time of award of the amount by which the unpaid rent
for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus
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16.3.1.7 Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in
the ordinary course of things would be likely to result therefrom, specifically including, but not limited
to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or
any portion thereof for a new tenant, whether for the same or a different use, and any special concessions
made to obtain a new tenant; and
16.3.1.8 At Landlord's election, such other amounts in addition to or in lieu of
the foregoing as may be permitted from time to time by applicable Law.
The term "rent" as used in this Section 16.3 shall be deemed to be and to mean all sums of every
nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others.
As used in Sections 16.3.1.1 and 16.3.1.2, above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Section 16.2 of this Lease, but in no case greater than the maximum
amount of such interest permitted by Law. As used in Section 16.3.1.3 above, the "worth at the time of
award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank
of San Francisco at the time of award plus one percent (M).
Upon termination of the Lease by Landlord and surrender of Premises by Tenant, Landlord shall
use commercially reasonable efforts to re -let the Premises and otherwise mitigate its damages by the
Tenant under this Lease.
16.3.2 If Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may continue the Lease in effect (whether or not Tenant has abandoned or vacated the
Premises) and, from time to time, without terminating this Lease, enforce all of its rights and remedies
under this Lease, including the right to recover all rent as it becomes due.
16.3.3 Landlord may re-enter and attempt to relet the Premises without terminating this
Lease and remove all persons and property from the Premises (which property may be removed and stored
in a public warehouse or elsewhere at the sole cost and risk of, and for the account of, Tenant), all without
service of notice or resort to legal process and without being deemed guilty of trespass, or any liability of
Landlord for any loss or damage which may be occasioned thereby. If Landlord, without terminating this
Lease, either (i) elects to re-enter the Premises and attempts to relet the Premises, (ii) takes possession of
the Premises pursuant to legal proceedings, or (iii) takes possession of the Premises pursuant to any notice
provided by Law, then Landlord may, from time to time, make such alterations and repairs as may be
necessary in order to relet the Premises or any part thereof for such term or terms (which may be for a
term extending beyond the Lease Term) and at such rent and other terms as Landlord in its reasonable
discretion deems advisable. Upon such reletting, all rent received by Landlord from such reletting shall
be applied, first to the payment of any indebtedness of Tenant to Landlord (other than for any rent due
hereunder); second, to the payment of any costs and expenses of obtaining possession and any such
reletting, including the expense of alterations and repairs, brokerage fees and attorneys' fees; third, to the
payment of any rent due and unpaid hereunder. If such rents and any other amounts received from such
reletting during any month are less than that to be paid during that month by Tenant, then Tenant shall
immediately pay such deficiency to Landlord. No such re-entry or taking of possession of the Premises
by Landlord shall be construed as an election by Landlord to terminate this Lease unless a notice of such
intention is given by Landlord to Tenant. Notwithstanding any such reletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for such previous default. Should
Landlord at any time terminate this Lease for any default, in addition to any other remedies it may have,
Landlord shall be entitled to the remedy set forth in Section 16.3 above, and may recover all damages it
may incur by reason of such default, including the cost of recovering the Premises, reimbursement of any
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brokerage fees incurred by Landlord in connection with this Lease and all rent (accrued or to accrue during
the Lease Term) which, at Landlord's election, shall be accelerated and be due in full on demand.
16.3.4 Landlord shall at all times have the rights and remedies (which shall be cumulative
with each other and cumulative and in addition to those rights and remedies available under Sections
16.3.1, 16.3.2 and 16.3.3, above, or any Law or other provision of this Lease), without prior demand or
notice except as required by applicable Law, to seek any declaratory, injunctive or other equitable relief,
and specifically enforce this Lease, or restrain or enjoin a violation or breach of any provision hereof.
16.4 Subleases of Tenant. If Landlord elects to terminate this Lease on account of any default
by Tenant, as set forth in this Article 16, Landlord shall have the right to terminate any and all subleases,
licenses, concessions or other consensual arrangements for possession entered into by Tenant and
affecting the Premises or may, in Landlord's sole discretion, succeed to Tenant's interest in such subleases,
licenses, concessions or arrangements. In the event of Landlord's election to succeed to Tenant's interest
in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by
Landlord of such election, have no further right to or interest in the rent or other consideration receivable
thereunder.
16.5 Efforts to Relet. No re-entry or repossession, repairs, maintenance, changes, alterations
and additions, reletting, appointment of a receiver to protect Landlord's interests hereunder, or any other
action or omission by Landlord shall be construed as an election by Landlord to terminate this Lease or
Tenant's right to possession, or to accept a surrender of the Premises, nor shall same operate to release
Tenant in whole or in part from any of Tenant's obligations hereunder, unless express written notice of
such intention is sent by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any Law to redeem or reinstate this Lease.
16.6 Late Charges. Tenant hereby acknowledges late payment by Tenant to Landlord of Rent
and other sums due thereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on Landlord by the terms of
any mortgage or trust deed covering the Premises. Accordingly, if any Rent or any other sum due from
Tenant shall not be received by Landlord or Landlord's designee within five (5) days after the date such
sum is due, Tenant shall pay to Landlord a late charge equal to ten percent (10%) of such overdue amount.
The parties hereby agree such late charge represents a fair and reasonable estimate of the cost Landlord
will incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall in no
event constitute a waiver of Tenant's default with respect to such overdue amount nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder.
17. LANDLORD'S DEFAULT.
Landlord shall in no event be charged with default in the performance of any of its obligations
hereunder unless and until Landlord shall have failed to perform such obligations within thirty (30) days
(or within such additional time as is reasonably required to correct any such default) after notice to
Landlord by Tenant properly specifying wherein Landlord has failed to perform any such obligations. If
the holder of record of the first mortgage covering the Premises shall have given prior notice to Tenant
that it is the holder of the first mortgage and such notice includes the address at which notices to such
mortgagee are to be sent, then Tenant shall give to the holder of record of such first mortgage notice
simultaneously with any notice given to Landlord to correct any default of Landlord as hereinabove
provided. The holder of record of such first mortgage shall have the right, within thirty (30) days after
receipt of said notice (or within such additional time as is reasonably required) to correct any such default
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including time to obtain possession of the Premises by foreclosure or other means before Tenant may take
any action under this Lease by reason of such default. Any notice of default given Landlord shall be null
and void unless simultaneous notice has been given to said first mortgagee. Notwithstanding anything in
this Lease to the contrary, and notwithstanding any applicable Law to the contrary, the liability of Landlord
(including any successor Landlord) and any recourse by Tenant against Landlord shall be limited solely
and exclusively to an amount which is equal to the ownership interest of Landlord in the Building and
Real Property (excluding any proceeds thereof), and neither Landlord, nor any of Landlord's officers,
members or partners nor their respective officers, agents, directors or employees shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of
itself and all persons claiming by, through or under Tenant.
18. CONDEMNATION.
If the whole or any material part of the Premises or Building shall be taken by power of eminent
domain or condemned by any competent authority for any public or quasi -public use or purpose, or if any
adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority
in such manner as to require the use, reconstruction or remodeling of any part of the Premises or Building,
or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or
condemnation, Landlord shall have the option to terminate this Lease effective as of the date possession
is required to be surrendered to the authority. If more than twenty-five percent (25%) of the rentable
square feet of the Premises is taken, or if access to the Premises is substantially impaired, in each case for
a period in excess of one hundred eighty (180) days, Tenant shall have the option to terminate this Lease
effective as of the date possession is required to be surrendered to the authority. Tenant shall not because
of such taking assert any claim against Landlord or the authority for any compensation because of such
taking and Landlord shall be entitled to the entire award or payment in connection therewith, except that
Tenant shall have the right to file any separate claim available to Tenant for any taking of Tenant's
personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease
Term pursuant to the terms of this Lease, and for moving expenses, so long as such claims do not diminish
the award available to Landlord, its ground lessor with respect to the Building or Real Property or its
mortgagee, and such claim is payable separately to Tenant. Notwithstanding anything in this Article 18
to the contrary, Landlord and Tenant shall each be entitled to receive fifty percent (50%) of the "bonus
value" of the leasehold estate in connection therewith, which bonus value shall be equal to the difference
between the Rent payable under this Lease and the sum established by the condemning authority as the
award for compensation for the leasehold. All Rent shall be apportioned as of the date of such termination.
If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Notwithstanding anything to the contrary contained in this Article 18, in the event
of a temporary taking of all or any portion of the Premises for a period of one hundred and eighty (180)
days or less, then this Lease shall not terminate but the Base Rent and additional Rent shall be abated for
the period of such taking in proportion to the ratio that the amount of rentable square feet of the Premises
taken bears to the total rentable square feet of the Premises. Landlord shall be entitled to receive the entire
award made in connection with any such temporary taking.
19. SUBORDINATION.
19.1 Subordination. This Lease, at Landlord's option, shall be subject and subordinate to the
liens of any mortgages or deeds of trust and to any ground leases now or hereafter placed on or against
the land or improvements, or either thereof, of which the Premises are a part, or on or against Landlord's
interest or estate therein, without the necessity of the execution and delivery of any further instruments on
the part of Tenant to effectuate such subordination. If any mortgagee or trustee or ground lessor shall
elect to have this Lease prior to the lien of its mortgage or deed of trust or ground lease and shall give
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written notice thereof to Tenant, this Lease shall be deemed prior to such mortgage or deed of trust or
ground lease, whether this Lease is dated prior or subsequent to the date of said mortgage or deed of trust
or ground lease.
19.2 Subordination Agreements. Tenant covenants and agrees to execute and deliver within ten
(10) business days of request by Landlord, without charge therefor, such further instruments evidencing
such subordination of this Lease to the lien of any such ground leases, mortgages or deeds of trust as may
be required by Landlord. Tenant covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage, or if any ground lease is terminated, to attorn, without any deductions
or set -offs whatsoever, to the purchaser upon any such foreclosure sale, or to the lessor of such ground
lease, as the case may be, if so requested to do so by such purchaser or lessor, and to recognize such
purchaser or lessor as the lessor under this Lease. Tenant waives the provisions of any current or future
statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise
adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure
proceeding or sale.
20. QUIET ENJOYMENT.
Landlord agrees Tenant, upon paying Rent and other monetary sums due under this Lease and
performing the covenants and conditions of this Lease, may quietly have, hold and enjoy the Premises
during the Lease Term hereof, subject, however, to the terms, covenants, conditions and agreements herein
referring to subordination and condemnation.
21. DELAYS.
Whenever Landlord shall be delayed or restricted due to no fault of Landlord in the performance
of any obligation of Landlord herein (including any obligation with respect to the provision of any service
or utility or the performance of work or repairs) by reason of Landlord's inability to obtain materials,
services or labor required for such performance or by reason of any Law, or by reason of any other cause
beyond Landlord's control, Landlord shall be entitled to extend the time for such performance by a time
equal to the extent of the delay or restriction, and Tenant shall not be entitled to compensation for any
inconvenience, nuisance or discomfort occasioned thereby.
22. GENERAL PROVISIONS.
22.1 Estoppel Certificates. Tenant shall, at any time, upon not less than five (5) business days
written notice from Landlord, execute, acknowledge and deliver to Landlord a statement in writing
(i) certifying this Lease is unmodified and in full force and effect (or if modified, stating the nature of the
modification) and the date to which the Rent is paid in advance, (ii) acknowledging there are not, to
Tenant's knowledge, any uncured defaults on the part of Landlord thereunder or specifying such default
if any exist, and (iii) containing such other information reasonably requested by Landlord or Landlord's
mortgagee or Landlord's prospective mortgagees or buyers. If Tenant fails to execute and deliver such
statement within five (5) business days, it shall be deemed conclusively to have acknowledged the
accuracy of the matter set forth in Landlord's statement. Upon request from time to time, Tenant agrees
to provide to Landlord, within ten (10) days after Landlord's delivery of written request therefor, current
financial statements for Tenant, dated no earlier than one (1) year prior to such written request, certified
as accurate by Tenant or, if available, audited financial statements prepared by an independent certified
public accountant with copies of the auditor's statement. If any Guaranty is executed in connection with
this Lease, Tenant also agrees to deliver to Landlord, within ten (10) days after Landlord's delivery of
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written request therefor, current financial statements of the Guarantor in a form consistent with the
foregoing criteria.
22.2 Transfer of Landlord's Interest. Tenant acknowledges that Landlord has the right to
transfer all or any portion of its interest in the Premises and in this Lease, and Tenant agrees that in the
event of any such transfer, Landlord shall automatically be released from all liability under this Lease and
Tenant agrees to look solely to such transferee for the performance of Landlord's obligations hereunder
after the date of transfer and such transferee shall be deemed to have fully assumed and be liable for all
obligations of this Lease to be performed by Landlord, including the return of any Security Deposit, and
Tenant shall attorn to such transferee.
22.3 Captions. Article and paragraph captions are for convenience only and are not a part of
this Lease and shall not be used for interpretation or construction of this Lease.
22.4 Time of Essence. Time is of the essence hereof.
22.5 Severability. The invalidity of any provision of this Lease, as determined by a court of
competent jurisdiction, shall in no way affect the validity of any other provision hereof.
22.6 Entire Agreement. This Lease, along with any exhibits or attachments hereto, constitutes
the entire agreement between the parties relative to the Premises and there are no oral agreements or
representations between the parties with respect to the subject matter hereof. This Lease supersedes and
cancels all prior agreements and understandings with respect to the subject matter hereof. This Lease may
be modified only in writing, signed by the parties in interest at the time of the modification.
22.7 Recording. This Lease shall not be recorded and any recordation shall be a breach under
this Lease.
22.8 Waiver. No provision of this Lease shall be deemed waived by either party hereto unless
expressly waived in a writing signed thereby. The waiver by either party hereto of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of
same or any other term, covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term,
covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such Rent. No
acceptance of a lesser amount than the Rent herein stipulated shall be deemed a waiver of Landlord's right
to receive the full amount due, nor shall any endorsement or statement on any check or payment or any
letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover the full amount due. No
receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the
length of the Lease Term or of Tenant's right of possession hereunder, or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of
such monies, it being agreed that after the service of notice or the commencement of a suit, or after final
judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the payment
of said Rent shall not waive or affect said notice, suit or judgment. Tenant's payment of any Rent
hereunder shall not constitute a waiver by Tenant of any breach or default by Landlord under this Lease
nor shall Landlord's payment of monies due Tenant hereunder constitute a waiver by Landlord of any
breach or default by Tenant under this Lease.
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22.9 Force Majeure. Any delay in the performance of any obligation under this Lease shall be
excused, if and so long as the performance of the obligation is prevented, delayed or otherwise hindered
by any act not within the control of a party such as fire, cyber/ransomware attack, earthquake, flood,
explosion, actions of the elements, war, riots, mob violence, strikes, lockouts, and orders of military
authority. Provided, however, no act or event, other than a cyber/ransomware attack, shall excuse Tenant
from the timely payment of Base Rent, Additional Rent or other sums due hereunder, when due, but in
the event of cyber/ransomware attack Tenant shall still be responsible for the payment of Late Fees and
interest as otherwise provided in this Lease for any such late payment from the original date which such
payment is due. In no event shall the payment of Base Rent, Additional Rent or other sums due hereunder,
in the event of cyber/ransomware attack be delayed beyond thirty (30) days from the original payment
date.
22.10 Binding Effect; Choice of Law. Subject to any provisions hereof restricting assigning or
subletting by Tenant and subject to the provisions for the transfer of Landlord's interest, this Lease shall
bind the parties, their successors and assigns. This Lease shall be governed by the laws of the State of
Washington.
22.11 Holding Over. If Tenant remains in possession of all or any part of the Premises after the
expiration of the Lease Term hereof, with or without the consent of Landlord, such tenancy shall be from
month-to-month only, and not a renewal hereof or an extension for any further term, on the same terms
and conditions as provided herein, except only as to the Lease Term; provided, however, during such
period as a tenant from month-to-month, Tenant shall pay Base Rent at double the rate payable for the
month immediately preceding the date of termination of this Lease and, in addition, Tenant shall reimburse
Landlord for all damages sustained by it by reason of Tenant's occupying the Premises past the termination
date. If Tenant's occupation of the Premises continues for more than sixty (60) days past the termination
date, Landlord shall also be entitled to consequential as well as direct damages from the termination date.
22.12 Entryby Landlord. Landlord and its agents shall have the right to enter the Premises at all
reasonable times (without notice in the event of emergency and if no emergency and it is reasonable 24
hours' notice) for the purpose of examining or inspecting the same and any other services to be provided
by Landlord or Tenant thereunder, to show the same to prospective purchasers of the Building and make
such alterations, repairs, improvements or additions to the Premises or to the Building of which they are
a part as Landlord may deem necessary or desirable. Tenant shall permit Landlord to show the Premises
to prospective tenants during the last six (6) months of the Lease Term hereof or any renewal thereof. If
Tenant shall not be personally present to open and permit an entry into the Premises at any time when
such entry by Landlord is necessary or permitted thereunder, Landlord may enter by means of master key
without liability to Tenant except for any failure to exercise due care for Tenant's property, and without
affecting this Lease. If, during the last month of the Lease Term hereof, Tenant shall have removed
substantially all of its property from the Premises, Landlord may immediately enter and alter, renovate
and redecorate the Premises without elimination or abatement of rent or incurring liability to Tenant for
any compensation.
22.13 Corporate AuthoritX. If Tenant is a corporation, limited liability company or partnership,
each individual executing this Lease on behalf of Tenant represents and warrants he is duly authorized to
execute and deliver this Lease on behalf of Tenant in accordance with the by-laws, duly adopted Board of
Directors resolution or other governing documents of said entity, and this Lease is binding upon Tenant
in accordance with its terms. Tenant hereby confirms that it is not in violation of any executive order or
Law which prohibits terrorism or transactions with suspected or confirmed terrorists or terrorist entities
or with persons or organizations that are associated with, or that provide any form of support to, terrorists.
Tenant further hereby confirms that Tenant shall comply throughout the Lease Term with all applicable
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Laws governing transactions or business dealings with any suspected or confirmed terrorists or terrorist
entities, as identified from time to time by the U.S. Treasury Department's Office of Foreign Assets
Control or any other applicable governmental entity.
22.14 Notices. Any notice required or permitted to be given hereunder may be served by a party
or its attorney and must be in writing and shall be deemed to be given (i) when hand delivered, or (ii) one
(1) business day after pickup by a reputable overnight express service, or (iii) when transmitted by
electronic mail (provided however that any facsimile or email transmission initiated after 5:00 PM on a
weekday, or at any time on a Saturday, Sunday or legal holiday, shall be deemed delivered on the
following business day), but only if confirmation of the receipt of same is noted upon transmission of
same by e-mail records and a counterpart of such notice is also delivered pursuant to one of the two
manners specified in subsections (i) or (ii) of this Section 22.14, in any case addressed to the parties at
their respective addresses set forth below:
Landlord:
With a copy to:
Tenant:
With a copy to:
FEENIX PARKSIDE LLC
c/o AZOSE COMMERCIAL PROPERTIES
8451 SE 68th St., Suite 200
Mercer Island, WA, 98040
Attention: Bill Sugden
Email:BSugden@Azose.com
KARR TUTTLE CAMPBELL
701 Fifth Avenue, Suite 3300
Seattle, WA 98104-7044
Attn: George Treperinas
Email: gtreperinas@karrtuttle.com
City of Auburn
25 West Main St.
Auburn WA 98001
Attention: Josh Arndt, Real Property Analyst
Email: jarndt@Auburnwa.gov
City Attorney
25 West Main St.
Auburn WA 98001
Attention: Doug Ruth
Email: druth@auburnwa.gov
22.15 Real Estate Broker. Tenant represents Tenant has dealt directly and only with the real
estate brokers or agents specified in Section 11 of the Summary as brokers ("Brokers") in connection with
this Lease, and insofar as Tenant knows, no other broker negotiated or participated in the negotiations of
this Lease, or submitted or showed the Premises, or is entitled to any commission in connection herewith.
Tenant agrees to indemnify and defend Landlord against and hold Landlord harmless from any and all
Claims with respect to any leasing commission or equivalent compensation alleged to be owing on account
of Tenant's dealings with any real estate broker or agent other than the Broker(s) in connection with this
Lease.
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22.16 Parking. Tenant shall have the right to parking in the Surface Parking Areas as specified
in Summary Section 12 in and Tenant shall not be obligated to pay any parking charges for the use thereof.
Tenant's continued right to use the parking spaces is conditioned upon Tenant abiding by the Parking
Rules and Regulations which are in effect on the date hereof, as set forth in the attached Exhibit C and all
modifications and additions thereto which are prescribed from time to time for the orderly operation and
use of the Parking Areas by Landlord and upon Tenant's cooperation in seeing that Tenant's employees
and visitors also comply with the Parking Rules and Regulations (and all such modifications and additions
thereto, as the case may be). Landlord specifically reserves the right to change the size, configuration,
design, layout, location and all other aspects of the Parking Areas, 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 some or all of the Parking Areas or relocate
Tenant's parking spaces to other Parking Areas within a reasonable distance of the Building so long as
total parking spaces available to Tenant are not decreased.
22.16. 1 Overnight Parking. Tenant shall have the reasonable right to use, cause or allow
overnight parking of motor vehicles, recreational vehicles and camping trailers (together "Vehicles") for
the purpose of overnight sheltering ("Overnight Parking"). Overnight Parking Vehicles must (i) be
registered with the Tenant for any night in which Overnight Parking is permitted, (ii) prominently display
a sign, placard or some other identification marking provided by the Tenant in the front windshield or
other easily visible area to those outside of the vehicle, (iii) park in only those designated areas depicted
for "Overnight Parking" by written agreement of the Landlord and Tenant from time to time, which as of
the Commencement Date is depicted on Exhibit B, (iv) only be permitted for the purpose of overnight
sheltering between the hours of 8:30pm & 7:00am, and (v) any rules which Landlord may provide in its
sole discretion which shall determine what a "reasonable right to use, cause or allow" for purposes of this
Section 22.16.1, provided however, Landlord will provide reasonable advance notification for
implementation for all but exigent and necessary additions or changes to the rules. Landlord shall have
broad discretion to enforce the provisions of this Section 22.16.1 to ensure Tenant's compliance of this
Section to prevent and minimize any violations of this Section adversely affecting Landlord's other
tenants.
22.17 Sign 1 Rights. Tenant shall be allocated all but three (3) slots in the pylon sign listing Real
Property tenants (which Tenant shall be permitted to assign the use of any Subtenant to which Landlord
has consented as provided under Section 15.2). Tenant shall also be entitled to install fagade sign above
each Building Suite (and window signs no larger than 24" x 36") which together comprise the Premises.
All such permitted signage must comply with all applicable Law and use Building standard materials and
lettering. Landlord shall not be required to notify Tenant of whether it consents to any sign until it (a) has
received detailed, to -scale drawings thereof specifying design, material composition, color scheme, and
method of installation, and (b) has had a reasonable opportunity to review them but no more than 10
business days. Upon surrender or vacation of the Premises, Tenant shall have removed all signs and
repair, paint, and/or replace the building facia surface to which its signs are attached to its preexisting
condition. Tenant shall obtain all applicable governmental permits and approvals for sign and exterior
treatments, pay for the cost of the initial installation of such permitted signage, as well as the cost of any
changes thereto.
22.18 Joint and Several. If there is more than one Tenant, the obligations imposed upon Tenant
under this Lease shall be joint and several.
22.19 Intentionally Omitted.
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22.20 Jurisdiction — Construction of Lease. The laws of the State of Washington shall govern the
validity, performance and enforcement of this Lease. King County, Washington shall be the venue of any
action arising out of this Lease. Although the printed provisions of this Lease were prepared and drawn
by Landlord, this Lease shall not be construed either for or against Landlord or Tenant, but its construction
shall be at all times in accord with the general tenor of the language so as to reach a fair and equitable
result.
22.21 Waiver Of Jury Trial And Damages. TENANT AND LANDLORD EACH HEREBY
EXPRESSLY, IRREVOCABLY, FULLY AND FOREVER RELEASES, WAIVES AND
RELINQUISHES ANY AND ALL RIGHT TO TRIAL BY JURY. THE PARTIES EXPRESSLY,
IRREVOCABLY, FULLY AND FOREVER RELEASES, WAIVES AND RELINQUISHES ANY AND
ALL RIGHT TO RECEIVE PUNITIVE, EXEMPLARY AND CONSEQUENTIAL DAMAGES
(EXCEPT AS PROVIDED IN SECTION 22.11) FROM THE OTHER (OR ANY PAST, PRESENT OR
FUTURE BOARD MEMBER, TRUSTEE, DIRECTOR, OFFICER, EMPLOYEE, AGENT,
REPRESENTATIVE, OR ADVISOR OF LANDLORD) IN ANY CLAIM, DEMAND, ACTION, SUIT,
PROCEEDING OR CAUSE OF ACTION IN WHICH THE TENANT AND LANDLORD ARE
PARTIES, WHICH IN ANY WAY (DIRECTLY OR INDIRECTLY) ARISES OUT OF, RESULTS
FROM OR RELATES TO ANY OF THE FOLLOWING, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER BASED ON CONTRACT OR TORT OR
ANY OTHER LEGAL BASIS: THIS LEASE; ANY PAST, PRESENT OR FUTURE ACT, OMISSION,
CONDUCT OR ACTIVITY WITH RESPECT TO THIS LEASE; ANY TRANSACTION, EVENT OR
OCCURRENCE CONTEMPLATED BY THIS LEASE; THE PERFORMANCE OF ANY
OBLIGATION OR THE EXERCISE OF ANY RIGHT UNDER THIS LEASE; OR THE
ENFORCEMENT OF THIS LEASE. TENANT AND LANDLORD EACH AGREES THAT THIS
LEASE CONSTITUTES WRITTEN CONSENT THAT TRIAL BY JURY SHALL BE WAIVED IN
ANY SUCH CLAIM, DEMAND, ACTION, SUIT, PROCEEDING OR OTHER CAUSE OF ACTION
AND AGREES THAT TENANT AND LANDLORD EACH SHALL HAVE THE RIGHT AT ANY
TIME TO FILE THIS LEASE WITH THE CLERK OR JUDGE OF ANY COURT IN WHICH ANY
SUCH CLAIM, DEMAND, ACTION, SUIT, PROCEEDING OR OTHER CAUSE OF ACTION MAY
BE PENDING AS STATUTORY WRITTEN CONSENT TO WAIVER OF TRIAL BY JURY IN
ACCORDANCE WITH RULES AND PROCEDURES OF ANY COURT.
22.22 Security Measures. Tenant hereby acknowledges that Landlord shall have no obligation
whatsoever to provide guard service or other security measures for the benefit of the Premises or the
Building, and Landlord shall have no liability to Tenant due to its failure to provide such services. Tenant
assumes all responsibility for the protection of Tenant, its agents, employees, contractors and invitees and
the property of Tenant and of Tenant's agents, employees, contractors and invitees from acts of third
parties. Nothing herein contained shall prevent Landlord, at Landlord's sole option, from implementing
security measures for the Building any part thereof, in which event Tenant shall participate in such security
measures and the cost thereof shall be included within the definition of Operating Expenses, and Landlord
shall have no liability to Tenant and its agents, employees, contractors and invitees arising out of
Landlord's negligent provision of security measures.
22.23 Easements. Landlord reserves to itself the right, from time to time, to grant such easements,
rights and dedications that Landlord deems necessary or desirable, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign any of the aforementioned
documents within ten (10) days after Landlord's request, and Tenant's failure to do so shall constitute a
material default by Tenant. The obstruction of Tenant's view, air, or light by any structure erected in the
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vicinity of the Building, whether by Landlord or third parties, shall in no way affect this Lease or impose
any liability upon Landlord.
22.24 Transportation Management. Tenant shall fully comply at its sole expense with all present
or future programs implemented or required by any governmental or quasi -governmental entity or
Landlord to manage parking, transportation, air pollution, or traffic in and around the Building in the area
in which the Building is located.
22.25 Auctions. Tenant shall not conduct, nor permit to be conducted, either voluntarily or
involuntarily, any auction upon the Premises, Common Areas or the Property. The holding of any auction
in violation of this Paragraph shall constitute a material default hereunder.
22.26 Attorney's Fees. If either party shall retain an attorney for the purpose of collecting any
amount due from the other party, or for the purpose of enforcing a default in any other terms or provision
of this Lease, the party shall pay the fees of such attorney for the attorney's services regardless of the fact
that no legal proceeding or action may have been filed or commenced.
[SIGNATURES AND ACKNOWLEDGEMENTS ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first
above written.
LANDLORD: FEENIX PARKSIDE LLC,
a Washington limited liability company,
Name:
Its:
TENANT: CITY OF AUBURN, WASHINGTON, a Municipal corporation
go
Name:
Its:
\�r►t�t'►I�
***If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. This Lease must be executed by the president or vice
president and the secretary or assistant secretary, unless the bylaws or a resolution of the board of directors
shall otherwise provide, in which event, the bylaws or a certified copy of the resolution, as the case may
be, must be attached to this Lease.
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#1295029 0 /43815-001
[TENANT NOTARY: CORPORATION]
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this ) day of , 20 ?V, before me, the undersigned, a Notary Public in
and f r the Stat of Was ' gto , duly commissioned and sworn personally appeared
'known to me to be the of the
CITY OF AU URN, WASHINGTON, the corporation that executed the fare ing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the
purposes therein mentioned, and on oath stated that he/she was authorized to execute said instrument.
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.
WITNESS my hand and official seal hereto affixed the day and year in the certificate above written.
w
� r
STATE OF
-- ) ss.
COUNTY OF KING )
Print Name:_ IatMcltd A _. BO-Lhe � r
NOTARY PUBLIC in and for the Statepp,fd�
Washington, residing at a" ib
My commission expires I O - Q'? - ,
On this day of , 20_, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn personally appeared
, known to me to be the of the
CITY OF AUBURN, WASHINGTON, the corporation that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the
purposes therein mentioned, and on oath stated that he/she was authorized to execute said instrument.
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.
WITNESS my hand and official seal hereto affixed the day and year in the certificate above written.
Print Name:
NOTARY PUBLIC in and for the State of
Washington, residing at
My commission expires
-37-
#1295029 v3 / 43815-001
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as ofthe day and year first
above written.
LANDLORD: FEENIX PARKSIDE LLC,
a Washington limited liability company -
•�7
By:'��-?
N me: &c'PISM W, L1 i.t
Its: 1991Lr %I/eftr�t',r
TENANT: CITY OF AUBURN, WASHINGTON, a Municipal corporation
By:
f6ha'1-.'mjW --
atne: t4.
Its:`tnx Y
r
By:
Name:
Its:
***If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. This Lease Must be executed by the president or vice
president and the secretary or assistant secretary, unless the bylaws or a resolution of the board of directors
shall otherwise provide, in which event, the bylaws or a certified copy of the resolution, as the case may
be, must be attached to this Lease.
-35-
9 1295029
35-
91295029 01438 [5-001
Landlord Notary
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
.I,/-
On
fiOn this _ day ofC-X 2020 before me, the undersigned, a Notary Public in and for the
State of Washington, duly commissioned and sworn personally appeared Benson W. Liu, known to me to be the
Manager of FEENIX PARKSIDE LLC, the limited liability company that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said company, for the purposes therein
mentioned, and on oath stated that he/she was authorized to execute said instrument.
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.
WITNESS my hand and official seal hereto affixed the day and year in the certificate above written.
��r r,
VYtiiam . propst
Notary Public Print Name:
State of Washington NOTARY PUBLIC in angor 14e State of
My Co m 5, Number ires 1636112020 Washington, residing at e lle;lice b -/f
My commission expires ALI 2o:20
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EXHIBIT A
LEGAL DESCRIPTION
PARCEL B OF THE CITY OF AUBURN SHORT PLAT NO. SP -3-78, RECORDED UNDER
RECORDING NO. 7806150922 BEING A CORRECTION OF INSTRUMENT RECORED
UNDER RECORDING NO. 7803060927, RECORDS OF KING COUNTY, WASHINGTON.
SITUATE IN THE COUNTY OF KING, STATE OF WASHINGTON.
#1295029 v3 / 43815-001
EXHIBIT R
FLOOR PLAN OF PREMISES
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EXHIBIT B
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#1295029 v3 / 43815-001
F.XATRTT f
RULES AND REGULATIONS
Except to the extent that these Rules and Regulations conflict with any express provision
of the Lease, Tenant shall faithfully observe and comply with the following Rules and Regulations
and the Parking Rules and Regulations, except to the extent the rule is inconsistent with or
unreasonably interferes with the exercise of Tenant's rights under this Lease. Landlord shall
not be responsible to Tenant for the nonperformance of any of said Rules and Regulations and/or
the Parking Rules and Regulations by or otherwise with respect to the acts or omissions of any
other tenants or occupants of the Building and/or the Real Property.
1. Tenant shall not place any lock(s) on any door, or install any security system
(including, without limitation, card key systems, alarms or security cameras), in the Premises
without Landlord's prior written consent, which consent shall not be unreasonably withheld, and
Landlord shall have the right to retain at all times and to use keys or other access codes or devices
to all locks and/or security systems within and to the Premises. A reasonable number of keys to
the locks on the entry doors of the Premises shall be furnished by Landlord to Tenant at Tenant's
cost, and Tenant shall not make any duplicate keys. All keys shall be returned to Landlord at the
expiration or earlier termination of the Lease. Further, if and to the extent Tenant re -keys, re-
programs or otherwise changes any locks in or for the Premises, all such locks and key systems
must be consistent with the master lock and key system at the Building, all at Tenant's sole cost
and expense.
2. Landlord shall have the right to control and operate the public portions of the
Building and Real Property, the public facilities, the heating and air conditioning, and any other
facilities furnished for the common use of tenants, in such manner as is customary for comparable
buildings in the vicinity of the Building.
3. No signs, advertisements or notices shall be painted or affixed to windows, doors
or other parts of the Building, except those of such color, size, style and in such places as are first
approved in writing by Landlord. Landlord shall have the right to remove any signs,
advertisements, and notices not approved in writing by Landlord without notice to and at the
expense of Tenant.
4. Tenant shall not disturb (by use of any television, radio or musical instrument,
making loud or disruptive noises, creating offensive odors or otherwise), solicit, or canvass any
occupant of the Building and/or the Real Property and shall cooperate with Landlord or Landlord's
agents to prevent same.
5. The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any
purpose other than that for which they were constructed, and no foreign substance of any kind
whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting
from the violation of this rule shall be borne by the tenant who, or whose employees or invitees,
shall have caused it.
6. Tenant shall not overload the floor of the Premises. Tenant shall not mark, drive
nails or screws, or drill into the partitions, woodwork or plaster or in any way deface the Premises
EXHIBIT C
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or any part thereof without Landlord's consent first had and obtained; provided, however,
Landlord's prior consent shall not be required with respect to Tenant's placement of pictures and
other normal office wall hangings on the interior walls of the Premises (but at the end of the Lease
Term, Tenant shall repair any holes and other damage to the Premises resulting therefrom).
7. Except for vending machines intended for the sole use of Tenant's employees and
invitees, no vending machine or machines of any description other than fractional horsepower
office machines shall be installed, maintained or operated upon the Premises without the written
consent of Landlord. Tenant shall not install, operate or maintain in the Premises or in any other
area of the Building, electrical equipment that would overload the electrical system beyond its
capacity for proper, efficient and safe operation as determined solely by Landlord.
8. Tenant shall not use any method of heating or air conditioning other than that which
may be supplied by Landlord, without the prior written consent of Landlord. Tenant shall not
furnish cooling or heating to the Premises, including, without limitation, the use of electronic or
gas heating devices, portable coolers (such as "move n cools") or space heaters, without Landlord's
prior written consent, and any such approval will be for devices that meet federal, state and local
code.
9. No inflammable, explosive or dangerous fluids or substances shall be used or kept
by Tenant in the Premises, Building and/or about the Real Property, except for those substances
as are typically found in similar premises used for general office purposes and are being used by
Tenant in a safe manner and in accordance with all applicable Laws, rules and regulations. Tenant
shall not, without Landlord's prior written consent, use, store, install, spill, remove, release or
dispose of, within or about the Premises or any other portion of the Real Property, any asbestos -
containing materials or any solid, liquid or gaseous material now or subsequently considered toxic
or hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable
environmental Laws which may now or later be in effect. Tenant shall comply with all Laws
pertaining to and governing the use of these materials by Tenant, and shall remain solely liable for
the costs of abatement and removal.
10. Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or
substance in or on the Premises, or permit or allow the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building and/or the Real Property
by reason of noise, odors, or vibrations, or interfere in any way with other tenants or those having
business therewith.
11. Tenant shall not bring into or keep within the Real Property, the Building or the
Premises any animals (except those assisting handicapped persons), birds or fish tanks. Vehicles
are only permitted in the Parking Areas and are not permitted in the Building.
12. Except as permitted in connection with Tenant's Permitted Uses in Section 5.1 of
the Lease, Tenant shall not use or occupy the Premises in any manner or for any purpose which
might injure the reputation or impair the present or future value of the Premises, the Building
and/or the Real Property. Except as permitted in connection with Tenant's Permitted Uses in
Section 5.1 of the Lease, Tenant shall not use, or permit any part of the Premises to be used, for
lodging, sleeping or for any illegal purpose.
EXHIBIT C
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13. Except as reasonably necessary in connection with Tenant's Permitted Uses in
Section 5.1 of the Lease, no cooking shall be done or permitted by Tenant on the Premises, nor
shall the Premises be used for the storage of merchandise or for any improper, objectionable or
immoral purposes. Notwithstanding the foregoing, Underwriters' laboratory -approved equipment
and microwave ovens may be used in the Premises for heating food and brewing coffee, tea, hot
chocolate and similar beverages, provided that such use is in accordance with all applicable Laws
and does not cause odors which are objectionable to Landlord and other tenants.
14. Landlord will approve where and how communication wires and other cabling are
to be introduced to the Premises. No boring or cutting for wires shall be allowed without the
consent of Landlord. The location of telephone, call boxes and other office equipment and/or
systems affixed to the Premises shall be subject to the approval of Landlord. Tenant shall not use
more than its proportionate share of telephone lines and other telecommunication facilities
available to service the Building.
15. Landlord reserves the right to exclude or expel from the Building and/or the Real
Property any person who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of these Rules and
Regulations or cause harm to Building occupants and/or property.
16. All contractors, contractor's representatives and installation technicians performing
work in the Building or at the Real Property shall be licensed and bonded and subject to Landlord's
prior approval, which approval shall not be unreasonably withheld, and shall be required to comply
with Landlord's standard rules, regulations, policies and procedures, which may be revised from
time to time.
17. Tenant at all times shall maintain the entire Premises in a neat and clean manner,
free of debris. Tenant shall not place items, including, without limitation, any boxes, files, trash
receptacles or loose cabling or wiring, in or near any window to the Premises which would be
visible anywhere from the exterior of the Premises.
18. All of Tenant's recyclables, trash and garbage shall be placed in the disposal bins
or receptacles designated for the Building in the ordinary and customary manner in the city in
which the Real Property is located without violation of any law or ordinance governing such
disposal.
19. Tenant shall comply with all safety, fire protection and evacuation procedures and
regulations established by Landlord or any governmental agency.
20. Tenant shall assume any and all responsibility for protecting the Premises from
theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the
Premises closed, when the Premises are not occupied, or when the entry to the Premises is not
manned by Tenant on a regular basis.
21. No awnings or other projection shall be attached to the outside walls of the Building
without the prior written consent of Landlord. No curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door of the Premises without
the prior written consent of Landlord. The sashes, sash doors, skylights, windows, and doors that
EXHIBIT C
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reflect or admit light and air into the halls, passageways or other public places in the Building shall
not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles be placed on
the windowsills. All electrical ceiling fixtures hung in offices or spaces along the perimeter of the
Building must be of a quality, type and design approved by Landlord.
22. Tenant shall comply with any non-smoking ordinance adopted by any applicable
governmental authority. Neither Tenant nor its agents, employees, contractors, guests or invitees
shall smoke or permit smoking in the Premises and/or the Common Areas, unless the Common
Areas have been declared a designated smoking area by Landlord, nor shall the above parties allow
smoke from the Premises to emanate into the Common Areas or any other part of the Building.
Landlord shall have the right to designate the Building (including the Premises) as a non-smoking
building.
23. Tenant shall not take any action which would violate Landlord's labor contracts or
which would cause a work stoppage, picketing, labor disruption or dispute, or interfere with
Landlord's or any other tenant's or occupant's business or with the rights and privileges of any
person lawfully in the Building ("Labor Disruption"). Tenant shall take the actions necessary to
resolve the Labor Disruption, and shall have pickets removed and, at the request of Landlord,
immediately terminate any work in the Premises that gave rise to the Labor Disruption, until
Landlord gives its written consent for the work to resume, and Tenant shall have no claim for
damages against Landlord or any of its trustees, members, principals, beneficiaries, partners,
officers, directors, employees, mortgagees, or agents in connection therewith.
24. No tents, shacks, temporary or permanent structures of any kind shall be allowed
on the Real Property. No personal belongings may be left unattended in any portion of the Real
Property.
25. Landlord shall have the right to prohibit the use of the name of the Building or Real
Property or any other publicity by Tenant that in Landlord's sole opinion may impair the reputation
of the Building or Real Property or the desirability thereof. Upon written notice from Landlord,
Tenant shall refrain from and discontinue such publicity immediately.
26. Landlord shall have the right to designate and approve standard window coverings
for the Premises and to establish rules to assure that the Building presents a uniform exterior
appearance. Tenant shall ensure, to the extent reasonably practicable, that window coverings are
closed on windows in the Premises while they are exposed to the direct rays of the sun.
27. Tenant shall at all times cooperate with Landlord in preserving an appropriate
image for the Building in Landlord's judgment.
PARKING RULES AND REGULATIONS
1. Vehicles must be parked entirely within the stall lines painted on the floor, only as
expressly permitted, with small cars parked in areas reserved for small cars and Commercial
Vehicles in areas reserved for Commercial Vehicles.
2. All directional signs and arrows must be observed.
EXHIBIT C
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The speed limit shall be 5 miles per hour.
4. Parking spaces reserved for handicapped persons must be used only by vehicles
properly designated.
5. Parking is prohibited in all areas not expressly designated for parking, including
without limitation:
(a) areas not striped for parking;
(b) aisles;
(c) where "no parking" signs are posted;
(d) ramps; and
(e) loading zones.
6. Every parker is required to park and lock his/her own car.
7. Landlord shall not be liable for loss of or damage to any vehicle or any contents of
such vehicle or accessories to any such vehicle, or any property left in any of the Surface Parking
Areas, resulting from fire, theft, vandalism, accident, conduct of other users of the Surface Parking
Areas and other persons, or any other casualty or cause. Further, Tenant understands and agrees
that: (i) Landlord will not be obligated to provide any traffic control, security protection for the
Surface Parking Areas; (ii) Tenant uses the Surface Parking Areas at its own risk; and (iii) Landlord
will not be liable for personal injury or death, or theft, loss of or damage to property. Tenant
indemnifies and agrees to hold Landlord and its agents and employees harmless from and against
any and all claims, demands, and actions arising out of the use of the Surface Parking Areas by
Tenant and its employees and agents, whether brought by any of such persons or any other person.
8. Washing, waxing, cleaning or servicing of any vehicle by the customer and/or its
agents is prohibited.
9. Tenant agrees to acquaint all persons to whom Tenant assigns a parking space with
these Parking Rules and Regulations.
10. Tenant will ensure that any vehicle parked in any of the parking spaces will be kept
in proper repair and will not leak excessive amounts of oil or grease or any amount of gasoline. If
any of the parking spaces are at any time used (i) for any purpose other than parking as provided
above, (ii) in any way or manner not permitted by Section 22.16 and reasonably objectionable to
Landlord, or (iii) by Tenant after default by Tenant under the Lease, Landlord, in addition to any
other rights otherwise available to Landlord, may consider such default an event of default under
the Lease.
11. Tenant's right to use the Parking Areas will be in common with other tenants of the
Real Property and with other parties permitted by Landlord to use the Parking Areas. Landlord
reserves the right to assign and reassign, from time to time, particular parking spaces for use by
persons selected by Landlord, provided that Tenant's rights under the Lease are preserved.
Landlord will not be liable to Tenant for any unavailability of Tenant's designated spaces, if any,
nor will any unavailability entitle Tenant to any refund, deduction, or allowance. Tenant will not
EXHIBIT C
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park in any numbered space or any space designated as: RESERVED, HANDICAPPED,
VISITORS ONLY, or LIMITED TIME PARKING (or similar designation).
12. If the Parking Areas are damaged or destroyed, or if the use of the Parking Areas is
limited or prohibited by any governmental authority, or the use or operation of the Parking Areas
is limited or prevented by strikes or other labor difficulties or other causes beyond Landlord's
reasonable control, Tenant's inability to use the parking spaces will not subject Landlord (and/or
the Parking Operator, as the case may be) to any liability to Tenant and will not relieve Tenant of
any of its obligations under the Lease and the Lease will remain in full force and effect. Tenant
will pay to Landlord upon demand, and Tenant indemnifies Landlord against, any and all loss or
damage to the Parking Areas, or any equipment, fixtures, or signs used in connection with the
Parking Areas and any adjoining buildings or structures caused by Tenant or any of its employees
and agents.
13. Tenant has no right to assign or sublicense any of its rights in the parking passes,
except as part of a permitted assignment or sublease of the Lease; however, Tenant may allocate
the parking passes among its employees.
Tenant shall be responsible for the observance of all of the Rules and Regulations and
Parking Rules and Regulations in this Exhibit C by Tenant's employees, agents, clients, customers,
invitees and guests. Landlord may waive any one or more of the Rules and Regulations and/or
Parking Rules and Regulations for the benefit of any particular tenant or tenants, but no such
waiver by Landlord shall be construed as a waiver of such Rules and Regulations and/or Parking
Rules and Regulations in favor of any other tenant or tenants, nor prevent Landlord from thereafter
enforcing any such Rules or Regulations and/or Parking Rules and Regulations against any or all
tenants of the Building and/or the Real Property. Landlord reserves the right at any time to change
or rescind any one or more of these Rules and Regulations and/or the Parking Rules and
Regulations, or to make such other and further reasonable Rules and Regulations and/or Parking
Rules and Regulations as in Landlord's judgment may from time to time be necessary for the
management, safety, care and cleanliness of the Premises, Building and Real Property, and for the
preservation of good order therein, as well as for the convenience of other occupants and tenants
therein. Tenant shall be deemed to have read these Rules and Regulations and Parking Rules and
Regulations and to have agreed to abide by them as a condition of its occupancy of the Premises.
EXHIBIT C
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EXHIBIT D
WORK LETTER TO STANDARD LEASE
This Work Letter to Standard Lease ("Work Letter") shall set forth the terms and conditions
relating to the construction of the Premises, alterations and additions under Section 9. All
references in this Work Letter to the "Lease" shall mean the relevant portions of the Lease to which
this Work Letter is attached as Exhibit D.
SECTION 1
GENERAL CONSTRUCTION OF THE PREMISES
Tenant shall accept (i) the base, shell, and core of the Premises and of the floor of the
Building on which the Premises is located (collectively, the "Base, Shell, and Core") and (ii) the
Premises in their current "AS IS" condition existing as of the date of the Lease and the
Commencement Date. Landlord shall not be obligated to make or pay for any alterations or
improvements to the Premises, the Building or Real Property envisioned to be made under Section
9 of the Lease. Landlord agrees to provide Tenant with copies or access to copies of existing
Building plans and architectural & construction drawings it possesses which include the Premises
within five (5) business days of execution of the Lease.
SECTION 2
TENANT IMPROVEMENTS
2.1 Tenant shall pay for the costs of the design, permitting and construction of Tenant's
improvements which are permanently affixed to the Premises (collectively, the "Tenant
Improvements") throughout the Lease Term. The remaining Sections of this Work Letter shall
apply equally each time any Significant Tenant Improvements are made to the Premises as defined
below in Section 2. 1.1 of this Work Letter.
2.1.1 For any alteration or improvement which the Tenant desires to make to the
Premises, Tenant shall provide to Landlord a written statement describing the proposed
alterations/improvements in a manner that clearly defines the type, size, scope, work, and location.
Within 10 days of receipt, Landlord shall notify Tenant whether such proposed alteration or
improvement requires strict compliance with the remaining Sections of this Work Letter
("Significant Tenant Improvement"). For any proposed alteration or improvement which the
Landlord does not consider to be a Significant Tenant Improvement, the Landlord shall within
such 10 day period designate, whether Tenant will need to engage design professionals to prepare
construction drawings for review, whether submission of a Space Plan is required for Landlord's
review, whether it must comply with any of Sections 4.2.4, 4.3 and 4.4 of this Work Letter, as part
of Landlord's written consent as required under Section 9.1 of the Lease.
SECTION 3
CONSTRUCTION DRAWINGS
3.1 Selection of Architect/Construction Drawings. Tenant shall retain an
architect/space planner (the "Architect") to prepare the Construction Drawings and Final Space
Plan, subject to Landlord's reasonable approval. Tenant shall retain the engineering consultants
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(the "Engineers"), also subject to Landlord's reasonable approval, to prepare all plans and
engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC,
life safety, and sprinkler work in the Premises, which work is not part of the Base, Shell, and Core
work. The plans and drawings to be prepared by Architect and the Engineers hereunder shall be
known collectively as the "Construction Drawings." All Construction Drawings shall be subject
to Landlord's approval. Tenant and Architect shall verify, in the field, the dimensions and
conditions as shown on the relevant portions of the base building plans, and Tenant and Architect
shall be solely responsible for the same, and Landlord shall have no responsibility in connection
therewith. Landlord's review of the Construction Drawings as set forth in this Section 3, shall be
for its sole purpose and shall not imply Landlord's review of the same, or obligate Landlord to
review the same, for quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner,
architect, engineers and consultants, and notwithstanding any advice or assistance which may be
rendered to Tenant by Landlord or Landlord's space planner, architect, engineers, and consultants,
Landlord shall have no liability whatsoever in connection therewith and shall not be responsible
for any omissions or errors contained in the Construction Drawings, and Tenant's waiver and
indemnity set forth in Article 11 of the Lease shall specifically apply to the Construction Drawings.
3.2 Final Space Plan. Tenant shall supply Landlord with four (4) copies signed by
Tenant of its final space plan for the portion of the Premises being improved or altered before any
architectural working drawings or engineering drawings have been commenced. The final space
plan (the "Final Space Plan") shall include a layout and designation of all offices, rooms and other
partitioning, their intended use, and equipment to be contained therein. Landlord may request
clarification or more specific drawings for special use items not included in the Final Space Plan.
Landlord shall advise Tenant within five (5) business days after Landlord's receipt of the Final
Space Plan for the affected portion of the Premises if the same is unsatisfactory or incomplete in
any respect. If Tenant is so advised, Tenant shall promptly cause the Final Space Plan to be revised
to correct any deficiencies or other matters Landlord may reasonably require.
3.3 Final Working Drawings. After the Final Space Plan has been approved by
Landlord, Tenant shall supply the Engineers with a complete listing of standard and non-standard
equipment and specifications, including, without limitation, Btu calculations, electrical
requirements and special electrical receptacle requirements for the portion of the Premises being
improved or altered, to enable the Engineers and the Architect to complete the "Final Working
Drawings" (as that term is defined below) in the manner as set forth below. Upon the approval of
the Final Space Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the
Engineers to complete the architectural and engineering drawings for the portion of the Premises
being improved or altered, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which is complete to
allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the "Final
Working Drawings") and shall submit the same to Landlord for Landlord's approval. Tenant shall
supply Landlord with four (4) copies signed by Tenant of such Final Working Drawings. Landlord
shall advise Tenant within five (5) business days after Landlord's receipt of the Final Working
Drawings for the Premises if the same is unsatisfactory or incomplete in any respect. If Tenant is
so advised, Tenant shall immediately revise the Final Working Drawings in accordance with such
review and any disapproval of Landlord in connection therewith.
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3.4 Approved Working Drawings. The Final Working Drawings shall be approved by
Landlord (the "Approved Working Drawings") prior to the commencement of construction of the
Premises by Tenant. After approval by Landlord of the Final Working Drawings, Tenant may
submit the same to the appropriate governmental authorities for all applicable building permits.
Tenant hereby agrees that neither Landlord nor Landlord's consultants shall be responsible for
obtaining any building permit or certificate of occupancy for the Premises and that obtaining the
same shall be Tenant's responsibility; provided, however, that Landlord shall cooperate with
Tenant in executing permit applications and performing other ministerial acts reasonably necessary
to enable Tenant to obtain any such permit or certificate of occupancy. No changes, modifications
or alterations in the Approved Working Drawings may be made without the prior written consent
of Landlord, which consent may not be unreasonably withheld.
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1 Tenant's Selection of Contractors.
4.1.1 The Contractor. Tenant shall select and retain a general contractor to
construct the Tenant Improvements, subject to Landlord's reasonable approval, which contractor
shall thereafter be the "Contractor" hereunder.
4.1.2 Tenant's Agents. All subcontractors, laborers, materialmen, and suppliers
used by Tenant (such subcontractors, laborers, materialmen, and suppliers, and the Contractor to
be known collectively as "Tenant's Agents") must be approved in writing by Landlord, which
approval shall not be unreasonably withheld or delayed. So long as a Tenant or Tenant's Agent
supervises or is responsible for the activities of any volunteers of any Service Provider (as defined
under the Lease), Landlord's consent is not additionally required for such services.
4.2 Construction of Tenant Improvements by Tenant's Agents.
4.2.1 Tenant's Agents.
4.2.1.1 Landlord's General Conditions for Tenant's Aizents and Tenant
Improvement Work. Tenant's and Tenant's Agent's construction of the Tenant Improvements
shall be constructed in strict accordance with the Approved Working Drawings.
4.2.1.2 Indemnity. Tenant's indemnity of Landlord as set forth in Article 11
of the Lease shall also apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to any act or omission of Tenant or Tenant's Agents, or anyone
directly or indirectly employed by any of them, or in connection with Tenant's non-payment of
any amount arising out of the Tenant Improvements and/or Tenant's disapproval of all or any
portion of any request for payment. Such indemnity by Tenant, as set forth in Article 11 of the
Lease, shall also apply with respect to any and all costs, losses, damages, injuries and liabilities
related in any way to Landlord's performance of any ministerial acts reasonably necessary (i) to
permit Tenant to complete the Tenant Improvements, and (ii) to enable Tenant to obtain any
building permit or certificate of occupancy for the Premises.
4.2.1.3 Insurance Requirements.
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4.2.1.3.1 General Coverages. All of Tenant's Agents shall
carry workers' compensation insurance covering all of their respective employees, and shall also
carry public liability insurance, including property damage, all with limits, in form and with
companies as are required to be carried by Tenant as set forth in Article 10 of the Lease.
4.2.1.3.2 Special Coverages. Except to the extent Tenant is
able to self -insure for the construction of Tenant Improvements as provided in Section 9.7 of the
Lease, Tenant shall carry "Builder's All Risk" insurance in an amount equal to the full replacement
cost of the improvements being constructed by Tenant, and such other insurance as Landlord may
require, it being understood and agreed that the Tenant Improvements shall be insured by Tenant
pursuant to Article 10 of the Lease immediately upon completion thereof. Such insurance shall be
in amounts and shall include such extended coverage endorsements as may be reasonably required
by Landlord, and in form and with companies as are required to be carried by Tenant as set forth
in Article 10 of the Lease.
4.2.1.3.3 General Terms. Certificates for all insurance carried
pursuant to this Section 4.2.1.3.3 shall be delivered to Landlord before the commencement of
construction of the Tenant Improvements and before the Contractor's equipment is moved onto
the site. All such policies of insurance must contain a provision that the company writing said
policy will give Landlord thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance. If the Tenant Improvements are
damaged by any cause during the course of the construction thereof, Tenant shall immediately
repair the same at Tenant's sole cost and expense. All policies carried under this Section 4.2.1.3.3
shall insure Landlord and Tenant, as their interests may appear, as well as Contractor and Tenant's
Agents, and shall name as additional insureds Landlord's property manager, and all mortgagees
and ground lessors of the Building. All insurance, except workers' compensation, maintained by
Tenant's Agents shall preclude subrogation claims by the insurer against anyone insured
thereunder. Such insurance shall provide that it is primary insurance as respects the owner and
that any other insurance maintained by owner is excess and noncontributing with the insurance
required hereunder. The requirements for the foregoing insurance shall not derogate from the
provisions for indemnification of Landlord by Tenant under Section 4.2.2.3 of this Work Letter.
4.2.2 Governmental Compliance. The Tenant Improvements shall comply in all
respects with the following: (i) the Code and other state, federal, city or quasi -governmental laws,
codes, ordinances and regulations, as each may apply according to the rulings of the controlling
public official, agent or other person; (ii) applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National Electrical Code;
and (iii) building material manufacturer's specifications.
4.2.3 Inspection by Landlord. Landlord shall have the right to inspect the Tenant
Improvements at all times, provided however, that Landlord's failure to inspect the Tenant
Improvements shall in no event constitute a waiver of any of Landlord's rights hereunder nor shall
Landlord's inspection of the Tenant Improvements constitute Landlord's approval of the same.
Should Landlord disapprove any portion of the Tenant Improvements, Landlord shall notify
Tenant in writing of such disapproval and shall specify the items disapproved and basis for
disapproval. Any defects or deviations in, and/or disapproval by Landlord of, the Tenant
Improvements shall be rectified by Tenant at no expense to Landlord, provided however, if
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Landlord determines that a defect or deviation exists or disapproves of any matter in connection
with any portion of the Tenant Improvements and such defect, deviation or matter might adversely
affect the mechanical, electrical, plumbing, heating, ventilating and air conditioning or life -safety
systems of the Building, the structure or exterior appearance of the Building or any other tenant's
use of such other tenant's premises, Landlord may, take such action as Landlord deems necessary,
at Tenant's expense and without incurring any liability on Landlord's part, to correct any such
defect, deviation and/or matter, including, without limitation, causing the cessation of performance
of the construction of the Tenant Improvements until such time as the defect, deviation and/or
matter is corrected to Landlord's satisfaction.
4.2.4 Meetings. Commencing upon the execution of the Lease, Tenant shall hold
periodic meetings at a reasonable time, with the Architect and the Contractor regarding the
progress of the preparation of Construction Drawings and the construction of the Tenant
Improvements and Landlord and/or its agents shall receive prior notice of, and shall have the right
to attend, all such meetings, and, upon Landlord's request, certain of Tenant's Agents shall attend
such meetings.
4.3 Notice of Completion; Copy of "As Built" Plans. Within ten (10) days after
completion of construction of the Tenant Improvements, Tenant shall cause a Notice of
Completion to be recorded in the office of the Recorder of the County in which the Building is
located and shall furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent for such purpose,
at Tenant's sole cost and expense. At the conclusion of construction, (i) Tenant shall cause the
Architect and Contractor (A) to update the Approved Working Drawings as necessary to reflect
all changes made to the Approved Working Drawings during the course of construction, (B) to
certify to the best of their knowledge that the "record -set" of as -built drawings are true and correct,
which certification shall survive the expiration or termination of the Lease, (C) to deliver to
Landlord two (2) sets of such as -built drawings within ninety (90) days following issuance of a
certificate of occupancy for the Premises, and (D) to deliver to Landlord a computer disk
containing the Approved Working Drawings in Auto CAD format, and (ii) Tenant shall deliver to
Landlord a copy of all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.
4.4 Coordination by Tenant's Agents with Landlord. Upon Tenant's delivery of the
Contract to Landlord under Section 4.2.1 of this Work Letter, Tenant shall furnish Landlord with
a schedule setting forth the projected date of the completion of the Tenant Improvements and
showing the critical time deadlines for each phase, item or trade relating to the construction of the
Tenant Improvements to the extent such schedule is available.
SECTION 5
MISCELLANEOUS
5.1 Tenant's Representative. Tenant has designated Josh Arndt as its sole
representative with respect to the matters set forth in this Work Letter, who shall have full authority
and responsibility to act on behalf of the Tenant as required in this Work Letter.
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5.2 Landlord's Representative. Landlord has designated Benson Liu as its sole
representative with respect to the matters set forth in this 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 Work Letter.
5.3 Time of the Essence in This Work Letter. Unless otherwise indicated, all references
herein to a "number of days" shall mean and refer to calendar days. If any item requiring approval
is timely disapproved by Landlord, the procedure for preparation of the document and approval
thereof shall be repeated until the document is approved by Landlord.
5.4 Tenant's Lease Default. Notwithstanding any provision to the contrary contained
in the Lease, if an event of default by Tenant of this Work Letter (which, for purposes hereof, shall
include, without limitation, the delivery by Tenant to Landlord of any oral or written notice that
Tenant intends to cease the design and/or construction of the Tenant Improvements and/or that
Tenant does not intend to occupy the Premises, and/or any other anticipatory breach of the Lease)
or Section 16.1 of the Lease has occurred at any time on or before the Substantial Completion of
the Premises, then (i) in addition to all other rights and remedies granted to Landlord pursuant to
the Lease, Landlord shall have the right to withhold payment of all or any portion of the Tenant
Improvement Allowance and/or Landlord may cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the Substantial Completion
of the Premises caused by such work stoppage), and (ii) all other obligations of Landlord under
the terms of this Work Letter shall be forgiven until such time as such default is cured pursuant to
the terms of the Lease (in which case, Tenant shall be responsible for any delay in the Substantial
Completion of the Premises caused by such inaction by Landlord). In addition, if the Lease is
terminated prior to the Commencement Date for any reason due to a default by Tenant as described
in Section 16.1 of the Lease or under this Work Letter (including, without limitation, any
anticipatory breach described above in this Section 5.4), then (A) Tenant shall be liable to
Landlord for all damages available to Landlord pursuant to the Lease and otherwise available to
Landlord at law and/or in equity by reason of a default by Tenant under the Lease or this Tenant
Work Letter, 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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VVIRTRTT V
AMENDMENT TO LEASE
This AMENDMENT TO LEASE ("Amendment") is made and entered into effective as of
, 20, by and between FEENIX PARKSIDE LLC, a Washington limited
liability company, ("Landlord"), and CITY OF AUBURN, WASHINGTON, a Washington
municipal corporation ("Tenant").
RECITALS:
A. Landlord and Tenant entered into that certain Lease dated as of
(the "Lease") pursuant to which Landlord leased to Tenant and Tenant leased from Landlord
certain "Premises," as described in the Lease, known as the suites located at 2802 & 2806 - 2818
Auburn Way North, Auburn WA 98002.
B. Except as otherwise set forth herein, all capitalized terms used in this Amendment
shall have the same meaning as given such terms in the Lease.
C. Landlord and Tenant desire to amend the Lease to confirm the Commencement
Date and Expiration Date, as hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Confirmation of Dates. The parties hereby confirm that (a) the Premises are Ready
for Occupancy, and (b) the Lease Term commenced as of (the
"Commencement Date") for a term of ending on (the
"Expiration Date"), unless sooner terminated as provided in the Lease.
2. Base Rent. During the Lease Term, the Base Rent payable by Tenant for the
Premises shall be as set forth in the following schedule:
Period of
Lease Term
Annual
Base Rent
Monthly Installment
of Base Rent
3. No Further Modification. Except as set forth in this Amendment, all of the terms
and provisions of the Lease shall remain unmodified and in full force and effect.
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IN WITNESS WHEREOF, this Amendment has been executed as of the day and year first
above written.
LANDLORD: FEENIX PARKSIDE LLC, a Washington limited liability
company,
LOW
Name:
Its:
TENANT: CITY OF AUBURN, WASHINGTON, a Municipal
corporation
By:
Name:
Its:
By:
Name:
Its:
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EXHIBIT F
RIGHT OF FIRST OFFER
This RIGHT OF FIRST OFFER ("Agreement") is made and entered into effective as of
January 31, 2020, by and between FEENIX PARKSIDE LLC, a Washington limited liability
company ("Landlord"), and CITY OF AUBURN, WASHINGTON, a Washington municipal
corporation ("Tenant").
A. Landlord and Tenant entered into that certain Lease dated as of January 31, 2020
(the "Lease") pursuant to which Landlord leased to Tenant and Tenant leased from Landlord
certain "Building," as described in the Lease, located at 2802 — 2818 Auburn Way North, Auburn
WA 98002.
B. Except as otherwise set forth herein, all capitalized terms used in this Amendment
shall have the same meaning as given such terms in the Lease.
C. Landlord is willing to grant such right of first offer to Tenant subject to and in
accordance with the terms, covenants and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, Ten Dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Tenant and Landlord hereby covenant and agree as follows.
1. 1. Right of First Offer.
A. If Landlord wishes to sell the real property or any portion thereof ("PropertX"),
Landlord shall first give Tenant written notice ("Purchase Notice") of its desire to sell the Property
("ROFO"), which shall include a proposed form of real estate purchase agreement which includes
the offering price and other material terms typically found in commercial real estate purchase
agreements for any such proposed sale ("Proposed Purchase Agreement"). If Tenant wishes to
exercise its ROFO, then Tenant must deliver written notice of the exercise of the ROFO to Landlord
within thirty (30) days after receipt of Landlord's Purchase Notice ("ROFO Notice"), together with
Tenant's proposed revisions to the Proposed Purchase Agreement. If Tenant fails to timely deliver
the ROFO Notice to Landlord, then Tenant shall be deemed to have waived Tenant's right to
exercise the ROFO and Landlord shall have the right to proceed to sell the Property to any third
party and this Agreement shall cease and terminate and be of no further force or effect. If Tenant
fails to exercise its ROFO as provided in this Section 1.A., Landlord shall be free to alter the terms
of the Proposed Purchase Agreement as Landlord wishes and Tenant shall also be free to be a
purchaser of the Property as any other prospective third -party purchaser.
B. Landlord shall not transfer title to the Property without utilizing the ROFO procedure
set forth in Section I.A. If Tenant timely delivers the ROFO Notice to Landlord, the parties shall
within fifteen (15) days of the date the ROFO Notice was delivered agree on an MAI designated
appraiser ("Appraiser") to prepare a self-contained appraisal to determine the fair market value of
the Property to be delivered to the parties within thirty (30) days. If the parties are unable to timely
agree on the Appraiser, Landlord may select the Appraiser. No matter how the Appraiser is
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selected, the parties shall share equally in the cost of the Appraiser and the resulting appraisal.
After delivery of the appraisal to each party, the Tenant will have ten (10) days to either accept
or reject the appraisal value and to notify the Landlord in writing. If the Tenant accepts the
appraisal value or fails to notify the Landlord within that time, the appraised value will be the
ROFO purchase price for the sale of the Property.
C. If Tenant timely rejects the appraisal value, Tenant shall have forty-five (45) days to
obtain a second MAI self-contained appraisal of the Property at the Tenant's sole expense. Upon
completion of this second appraisal, the Tenant shall provide a copy of the written appraisal to
the Landlord. If the second appraisal value is within 10% of the first appraisal value, the average
of the two values will be the ROFO purchase price.
D. If the second appraisal value varies by more than 10% of the first appraisal value, then
the parties shall hire an Appraiser to provide a third self-contained appraisal value for the
Property. If the parties cannot agree on an Appraiser within fifteen (15) days of Tenant's deliver
of its second appraisal, the first and second Appraisers shall select the third within five (5) days.
The parties shall equally share all costs related to selection of the third Appraiser and the appraisal
report. Upon completion of the third appraisal, the average of the three values of the Property
shall be the ROFO purchase price for sale of the Property.
E. Once the ROFO purchase price has been determined as provided in this Agreement,
the Tenant shall within sixty (60) days provide the Landlord with written acceptance of the ROFO
purchase price and remaining revisions Tenant requests to the Proposed Purchase Agreement
acceptable to both parties. In the event that the Tenant does not accept the ROFO purchase price
or if the parties are unable to reach agreement on the terms of the Proposed Purchase Agreement,
the Landlord shall have the right to proceed to sell the Property to any third party, and may alter
the terms of the Proposed Purchase Agreement as Landlord wishes and Tenant shall also be free
to be a purchaser of the Property as any other prospective third -party purchaser.
F. Once the parties have reached mutual agreement on the terms of the final form of the
Proposed Purchase Agreement ("Purchase Agreement") and mutually executed it, the closing of
the purchase and sale of the Property shall proceed in accord with local custom and practice
regarding prorations, closing costs, recording fees and require Tenant to deposit with escrow
earnest money in the amount of five percent (5%) of the ROFO purchase price on the date the
Purchase Agreement is executed. The closing date for the purchase of the Property shall be no
later than sixty (60) days following the date on which the Purchase Agreement is executed; or on
such earlier date as Tenant may designate. At the closing of the purchase of the Property, Landlord
shall deliver to Tenant (a) bargain and sale deed which shall convey fee simple title to the Property
to Tenant free and clear of any liens, mortgages, judgments, restrictions, covenants, or
encumbrances, but subject only to those easements and encumbrances which are of record as of
the date of this Lease, (b) an owner's affidavit acceptable to Landlord and Tenant's title insurance
company, if required, and (c) such other documents as may be reasonably requested by Tenant or
Tenant's title insurance company.
G. The entire ROFO purchase price shall be payable by cash or wire at closing.
2. Exemption. Notwithstanding anything herein to the contrary, under no
circumstances shall Tenant have any ROFO right to purchase the real property if Landlord is
making a conveyance under any of the following circumstances:
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(i) Transfers to any parent, subsidiary or affiliate of Landlord or transfers to any entity
controlled by or under common control with Landlord or its members,
(ii) Transfers of equity in Landlord or transfers to any entity into which or with which
Landlord is merged or consolidated,
(iii) Transfers by Landlord which are deemed or considered transfers by operation of
law, liquidation or consolidation, including, without limitation, mergers,
consolidations, reorganizations or dissolutions,
(iv) Easements, leases, licenses, concession agreements or transfers not in fee,
(v) Involuntary transfers including, without limitation, transfers in foreclosure,
transfers in lieu of foreclosure, condemnation or deeds in lieu of condemnation
bankruptcy or court-ordered estate liquidation,
(vi) Sale and leaseback financings, synthetic leases, or any other off-balance sheet
financing,
(vii) Other financing transactions of any nature no matter the structure, including
financing arrangements which include lender acquisition rights.
3. Miscellaneous
A. Default; Rights Personal. Notwithstanding anything in the foregoing to the contrary,
at Landlord's option, and in addition to all of Landlord's remedies under the Lease, at law or in
equity, the ROFO shall not be deemed properly exercised if, as of the date Tenant delivers the
exercise notice as provided in Section 1.A: (i) the Lease Term has expired, (ii) Tenant has
previously been in default under the Lease beyond all applicable notice and cure periods; and/or
(iii) Landlord does not reasonably approve of Tenant's then -existing financial condition. In
addition, the ROFO is personal to the Original Tenant executing the Lease, and may not be
assigned or exercised, voluntarily or involuntarily, by or to, any person or entity other than the
original Tenant.
B. Amendment and/or Modification. Neither this Agreement nor any term or provision
hereof may be changed, waived, discharged, amended or modified orally, or in any manner other
than by an instrument in writing signed by all of the parties hereto.
C. Costs and Attorneys' Fees. If any party hereto shall bring any suit or other action
against another for relief, declaratory or otherwise, arising out of this Agreement, the losing party
shall pay the prevailing party's reasonable costs and expenses, including such sum as the Court
may determine to be a reasonable attorney's fee actually incurred.
D. Notice. Any notice required or permitted to be given hereunder may be served by a
party or its attorney and must be in writing and shall be deemed to be given when (i) hand
delivered, or (ii) one (1) business day after pickup by a reputable overnight express service, or (iii)
transmitted by facsimile or electronic mail provided that confirmation of the receipt of same is
noted upon transmission of same by the sender's facsimile machine or by e-mail records, and a
counterpart of such notice is also delivered pursuant to one of the two manners specified in
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subsections (i) or (ii) of this Section 3.D., in any case addressed to the parties at their respective
addresses set forth below:
Landlord:
With a copy to:
Tenant:
With a copy to:
FEENIX PARKSIDE LLC
c/o AZOSE COMMERCIAL PROPERTIES
8451 SE 68th St., Suite 200
Mercer Island, WA, 98040
Attention: Bill Sugden
Email:BSugden@Azose.com
KARR TUTTLE CAMPBELL
701 Fifth Avenue, Suite 3300
Seattle, WA 98104-7044
Attn: George Treperinas
Email: gtreperinas@karrtuttle.com
City of Auburn
25 West Main St.
Auburn WA 98001
Attention: Josh Arndt, Real Property Analyst
Email: jamdt@auburnwa.gov
City Attorney
25 West Main St.
Attention: Douglas Ruth
Email: druth@aubumwa.gov
F. Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Washington, without giving effect to principles
and provisions thereof relating to conflict or choice of laws and irrespective of the fact that any
one of the parties is now or may become a resident of a different state. Venue for any action under
this Agreement shall lie in King County, Washington.
G. Entire Agreement. This Agreement (and any attached exhibits) contains the entire
agreement and understanding of the parties with respect to the entire subject matter hereof, and
there are no representations, inducements, promises or agreements, oral or otherwise, not
embodied herein. Any and all prior discussions, negotiations, commitments and understandings
relating thereto are merged herein. There are no conditions precedent to the effectiveness of this
Agreement other than as stated herein, and there are no related collateral agreements existing
between the parties that are not referenced herein.
IN WITNESS WHEREOF, this Amendment has been executed as of the day and year first
above written.
[SIGNATURES ON FOLLOWING PAGE]
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LANDLORD: FEENIX PARKSIDE LLC,
a Washington limited liability company,
Name:
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TENANT: CITY OF AUBURN, WASHINGTON, a Municipal
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#1295029 v3 / 43815-001
LANDLORD: FEENIX PARKSIDE LLC,
a Washington limited liability comp/a/
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TENANT: CITY OF AUBURN, WASHINGTON, a Municipal
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91295029 v3 / 43815-001
EXTENSION OPTION RIDER
AUBURN SHOPS
This EXTENSION OPTION RIDER (this "Extension Rider") is attached to and made a
part of the Lease by and between Landlord and Tenant. The agreements set forth in this Extension
Rider shall have the same force and effect as if set forth in the Lease. To the extent the terms of
this Extension Rider are inconsistent with the terms of the Lease, the terms of this Extension Rider
shall control.
1. Extension Option. Landlord hereby grants Tenant three (3) consecutive options
(each, an "Extension Option") to extend the initial Lease Term for a period of five (5) years each
(each, an "Option Term"), each of which Extension Options shall be exercisable only by written
Exercise Notice (as defined below) delivered by Tenant to Landlord as provided below. Upon the
proper exercise of the applicable Extension Option, the then -current Lease Term shall be extended
for the applicable Option Term.
2. Option Rent. The annual Base Rent payable by Tenant during the applicable
Option Term (the "Option Rent") shall be equal to the greater of (i) the annual Base Rent payable
by Tenant during the last year of the immediately preceding Lease Term and (ii) the Fair Market
Rental Rate for the Premises. As used herein, the "Fair Market Rental Rate" shall mean the annual
base rent at which non -equity tenants, as of the commencement of the applicable Option Term will
be leasing non -sublease, non -equity, unencumbered space comparable in size, location and quality
to the Premises for a comparable term as the Option Term, which comparable space is located in
the Building and in other comparable buildings in the Auburn, Washington, taking into
consideration all free rent and other out-of-pocket concessions generally being granted at such
time for such comparable space for the applicable Option Term (including, without limitation, any
tenant improvement allowance provided for such comparable space, with the amount of such
tenant improvement allowance to be provided for the Premises during the applicable Option Term
to be determined after taking into account the age, quality and layout of the tenant improvements
in the Premises as of the commencement of the applicable Option Term).
3. Exercise of Option. The applicable Extension Option shall be exercised by Tenant,
if at all, only in the following manner: (i) Tenant shall deliver written notice to Landlord (the
"Interest Notice") not more than twelve (12) months nor less than ten (10) months prior to the
expiration of the then -current Lease Term stating that Tenant may be interested in exercising the
applicable Extension Option; (ii) Landlord, after receipt of Tenant's applicable Interest Notice,
shall deliver notice (the "Option Rent Notice") to Tenant not less than eight (8) months prior to
the expiration of the then -current Lease Term setting forth the Option Rent for such applicable
Option Term; and (iii) if Tenant wishes to exercise the applicable Extension Option, Tenant shall,
on or before the date (the "Exercise Date") which is nine (9) months prior to the expiration of the
then -current Lease Term, exercise the applicable Extension Option by delivering written notice
(the "Exercise Notice") thereof to Landlord. Tenant's failure to deliver the applicable Interest
Notice or the applicable Exercise Notice on or before the applicable delivery dates therefor shall
be deemed to constitute Tenant's waiver of its then -current (and any subsequent) Extension
Options.
4. Determination of Option Rent. Tenant shall have the right to object to the Option
Rent provided by Landlord if Tenant disagrees with Landlord's determination of the Option Rent
prior to the Exercise Date in the Exercise Notice. In the event Tenant timely objects to the Option
Rent, Landlord and Tenant shall attempt to agree in good faith upon the Option Rent using
commercially reasonable efforts. If Landlord and Tenant fail to reach agreement in good faith
within thirty (30) days following Tenant's objection to Landlord's calculation of the Option Rent
(the "Outside Agreement Date"), then each party shall make a separate determination of the Option
Rent, as applicable, within five (5) business days thereafter, and such determinations shall be
submitted to arbitration in accordance with the following procedure:
4.1 Landlord and Tenant shall each appoint one arbitrator who shall by
profession be a Member Appraisal Institute approved appraiser who shall have been active over
the five (5) year period ending on the date of such appointment in the appraisal of comparable
EXTENSION
OPTION RIDER
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#1295029 0 / 43815-001
buildings in the vicinity of the Building. The determination of the arbitrators shall be limited solely
to the issue of whether Landlord's or Tenant's submitted Option Rent is the closest to the actual
Option Rent as determined by the arbitrators, taking into account the requirements of Section 2 of
this Extension Option Rider. Each such arbitrator shall be appointed within fifteen (15) business
days after the applicable Outside Agreement Date.
4.1.1 The two (2) arbitrators so appointed shall within ten (10) business days of
the date of the appointment of the last appointed arbitrator agree upon and appoint a third arbitrator
who shall be qualified under the same criteria set forth hereinabove for qualification of the initial
two arbitrators.
4.1.2 The three (3) arbitrators shall within thirty (30) days of the appointment of
the third arbitrator reach a decision as to whether the parties shall use Landlord's or Tenant's
submitted Option Rent and shall notify Landlord and Tenant thereof.
4.1.3 The decision of the majority of the three (3) arbitrators shall be binding
upon Landlord and Tenant.
4.1.4 If either Landlord or Tenant fails to appoint an arbitrator within fifteen (15)
business days after the applicable Outside Agreement Date, the arbitrator appointed by one of them
shall reach a decision, notify Landlord and Tenant thereof, and such arbitrator's decision shall be
binding upon Landlord and Tenant.
4.1.5 If the two arbitrators fail to agree upon and appoint a third arbitrator, or both
parties fail to appoint an arbitrator, then the appointment of the third arbitrator or any arbitrator
shall be dismissed and the matter to be decided shall be forthwith submitted to arbitration under
the provisions of the American Arbitration Association, but subject to the instruction set forth in
this Section.
4.1.6 The cost of arbitration shall be paid by Landlord and Tenant equally, except
that each party shall pay the cost of its chosen arbitrator.
5. Default; Rights Personal. Notwithstanding anything in the foregoing to the
contrary, at Landlord's option, and in addition to all of Landlord's remedies under the Lease, at
law or in equity, the applicable Extension Option shall not be deemed properly exercised if, as of
the date Tenant delivers the applicable Exercise Notice: (i) Tenant has previously been in default
under the Lease beyond all applicable notice and cure periods; and/or (ii) Landlord does not
approve of Tenant's then -existing financial condition and/or Landlord's lender does not approve
of the terms for the applicable Option Term (including, without limitation, the applicable Option
Rent). In addition, each Extension Option is personal to the Original Tenant and may not be
assigned or exercised, voluntarily or involuntarily, by or to, any person or entity other than the
Original Tenant, and shall only be available to and exercisable by the Original Tenant when the
Original Tenant is in actual and physical possession of the entire Premises.
EXTENSION
OPTION RIDER
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