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LAG-01-006
MARTIN SMITH INC
500 WATERMARK TOWER OFFICE LEASE -GROSS
1109 FIRST AVENUE
SEATTLE,WA 98101-2988 200 MILL AVENUE BUILDING
TEL 682-3300 FAX 340-1283
This Lease is made this 25th day of October 2001 by and between The City of Renton,
Washington, a Washington municipal corporation ("Landlord"), and King County Sexual Assault
Resource Center, a registered charitable organization in Washington ("Tenant'), who agree as
follows:
1. Fundamental Terms. As used in this Lease, the following capitalized terms shall have the
following meanings:
(a) "Land" means the land on which the Building is located, situated in the City of Renton,
County of King, State of Washington,which is described on Exhibit A.
(b) "Building" means the building in which the Premises are located, commonly known as the
200 Mill Avenue Building, the street address of which is 200 Mill Avenue South, Renton, Washington
98055-3232.
(c) "Premises" means that certain space cross-hatched on Exhibit B, located on the ground floor
of the Building and designated as Suite 125.
(d) "Agreed Areas" means the agreed amount of rentable square feet of space in the Building
and the Premises. Landlord and Tenant stipulate and agree for all purposes under this Lease that the
Building contains approximately 49,480 rentable square feet of space (the "Building Area") and that the
Premises contain approximately 7,421 rentable square feet of space (the "Premises Area"). Landlord and
Tenant further agree that the Building Area may exclude portions of the Building which are used for other
than office purposes, such as areas used for retail purposes.
(e) "Tenant's Share" means the Premises Area divided by the Building Area, expressed as a
percentage, which is Fifteen percent (15.00%). Notwithstanding the foregoing, if one or more of the
facilities, services and utilities the costs of which are included within the definition of Operating Costs is
not furnished to one or more tenants or to particular types of tenants, then in connection with the
calculation of Tenant's Share of each of such costs the Building Area shall be reduced by the number of
rentable square feet of space occupied by such tenants and Tenant's Share shall be separately
computed as to each of such costs. If the Building shall contain non-office uses during any period,
Landlord shall have the right to determine, in accordance with sound accounting and management
principles, Tenant's Share of Real Property Taxes and Operating Costs for only the office portion of the
Building; in such event, Tenant's Share shall be based on the ratio of the rentable area of the Premises
to the rentable area of such office portion for such period.
If a portion of the Building is damaged or condemned, or any other event occurs which alters the
number of rentable square feet of space in the Premises or the Building, then Landlord shall adjust
Tenant's Share to equal the number of rentable square feet of space then existing in the Premises (as
altered by such event) divided by the number of rentable square feet of space then existing in the
Building (as altered by such event).
(f) "Commencement Date" means April 1, 2002, or such earlier or later date as provided in
Section 4 hereof, subject to the provisions of Section 4(e) captioned "Temporary Premises".
(g) "Expiration Date" means March 31, 2009.
(h) "Term" means the period of time commencing on the Commencement Date and ending on
the Expiration Date, unless sooner terminated pursuant to this Lease.
(i) "Minimum Monthly Rent" means the following amounts as to the following periods during the
Term of this Lease:
Period Monthly Amount
April 1, 2002 to September 30, 2002 $10,500.00 per month
October 1, 2002 March 31, 2003 $11,131.50 per month
April 1, 2003 to March 31, 2004 $11,440.71 per month
April 1, 2004 to March 31, 2005 $11,749.92 per month
April 1, 2005 to March 31, 2006 $12,059.13 per month
April 1, 2006 to March 31, 2007 $12,368.33 per month
April 1, 2007 to March 31, 2008 $12,677.54 per month
April 1, 2008 to March 31, 2009 $12,986.75 per month
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(j) "Permitted Use" means use for purposes of counseling and therapy, general business and
administrative offices.
(k) "Base Year" means the calendar year 2002.
(1) "Prepaid Rent" means Eleven Thousand One Hundred Thirty-one and Fifty/100ths Dollars
($11,131.50).
(m) "Security Deposit" means Twelve Thousand Nine Hundred Eighty-six and Seventy-
five/100ths Dollars ($12,986.75).
(n) "Landlord's Address for Notice" means 200 Mill Avenue Building, c/o Martin Smith Inc, 1109
First Avenue, Suite 500, Seattle, WA 98101-2988.
(o) "Landlord's Address for Payment of Rent" means 200 Mill Avenue Building, c/o Martin Smith
Inc, 1109 First Avenue, Suite 500, Seattle, WA 98101-2988.
(p) "Tenant's Address for Notice" means King County Sexual Assault Resource Center, 200 Mill
Avenue South, Suite 125, Renton, WA 98055-3232 on and after the Commencement Date.
(q) "Landlord's Agent" means Martin Smith Inc or such other agent as Landlord may appoint
from time to time.
(r) "Broker(s)" means Martin Smith Inc representing the Landlord and The Andover Company,
Inc. representing the Tenant.
(s) "Exhibits" means the following Exhibits to this Lease:
Exhibit A-Legal Description of the Property
Exhibit B-Outline Drawing of the Premises
Exhibit C-Work Letter
Exhibit D- Rules and Regulations
(t) "Definitions" means the words and phrases defined in Section 45 captioned "Definitions".
2. Consent and Notices. Whenever the consent of either Landlord or Tenant is required under this
Lease, such consent shall not be effective unless given in writing and shall not be unreasonably withheld
or delayed, provided, however, that such consent may be conditioned as provided in this Lease. All
notices or requests required or permitted under this Lease shall be in writing as provided in Section
46(g).
3. Premises and Appurtenances. Landlord leases to Tenant and Tenant leases from Landlord the
Premises for the Term. Tenant, and its authorized representatives, shall have the right to use, in
common with others and subject to the Rules and Regulations, the Common Areas of the Building.
Landlord shall have the right, in Landlord's reasonable discretion, from time to time to (i) make changes
to the Building interior and exterior and Common Areas, including without limitation, changes in the
location, size, shape, number and appearance thereof, (ii)to close temporarily any of the Common Areas
for maintenance purposes so long as reasonable access to the Premises remains available, and (iii) to
use the Common Areas while engaged in making additional improvements, repairs or alterations to the
Building, provided that Tenant's right of quiet enjoyment of the Premises is not materially impacted by
such improvements, repairs or alterations. All of the windows and exterior walls of the Premises and any
space in the Premises used for shafts, stacks, pipes, conduits, ducts, electrical equipment or other
utilities or Building facilities are reserved solely to Landlord and Landlord shall have rights of access
through the Premises for the purpose of operating, maintaining and repairing the same, provided,
however, that such changes shall not materially affect Tenant's access to, or use and occupancy of, the
Premises.
4. Tenn.
(a) Commencement Date. The Term shall commence on the Commencement Date and expire
on the Expiration Date, unless sooner terminated pursuant to this Lease. The Term of this Lease shall be
for a term of eighty-four (84) months commencing from the date Landlord delivers possession of the
Premises to Tenant. The Commencement Date shall be:
(i) The date specified in Section 1, unless notice is delivered pursuant to Subsection
4(a)(ii), in which case the Commencement Date shall be such later date, or Tenant occupies the
Premises earlier pursuant to Subsection 4(a)(iii), in which case the Commencement Date shall be such
earlier date;
(ii) Such later date on which the Tenant Improvements to be made to the Premises by
Landlord, if any, are substantially complete, provided, however, that Landlord shall give notice of
substantial completion to Tenant at least five (5)days before such date.
(iii) If Tenant shall occupy the Premises for the Permitted Use prior to the Commencement
Date specified in Section 1 or the date specified in the notice provided for pursuant to Subsection 4(a)(ii),
then the date of such early occupancy.
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(b) Tenant Obligations. If the Tenant Improvements, if any, are not substantially completed on
the Commencement Date specified in Section 1 primarily due to Tenant's failure to promptly review and
approve the plans and specifications for the Tenant Improvements or change orders with respect to the
Tenant Improvements or to Tenant's failure to fulfill any other obligation under this Lease, then the Term
shall be deemed to have commenced on the Commencement Date specified in Section 1.
(c) Delay in Delivery of Possession; Tenant Termination Rights. Tenant shall not be liable
for Rent until Landlord delivers possession of the Premises to Tenant. Delay in delivery of possession of
the Premises to Tenant shall change the Expiration Date to that date which is seven (7) years after the
delivery of possession of the Premises to Tenant. Landlord shall pay Tenant the sum of Three Thousand
Eight Hundred Four and no/100th Dollars ($3,804.00) per month, on a prorated basis, to reimburse
Tenant for rent paid by Tenant for temporary space between April 1, 2002, and any later date of delivery
of possession of the Premises to Tenant. This payment will be made in the form of reduced rent for the
same time period that Tenant is unable to occupy the Premises due to delay in delivery of possession of
the Premises. For example, if Tenant is unable to move into the Building until May 1 2002, the rent for
that month will be reduced by $3,804.00 (the monthly rent paid by Tenant for temporary space). If
Landlord is unable to deliver possession of the Premises with the Tenant Improvements substantially
completed to Tenant on June 1, 2002, then Tenant may immediately terminate this Lease.
(d) Confirmation of Commencement Date. When the Commencement Date as provided in
Subsection 4(a)(ii) or Subsection 4(a)(iii) has been established as an earlier or later date than the
Commencement Date specified in Section 1, Landlord shall confirm the Commencement Date by notice
to Tenant.
5. Minimum Monthly Rent; Late Charge.
(a) Minimum Monthly Rent. Tenant shall pay to Landlord the Minimum Monthly Rent without
deduction, offset, prior notice or demand, in advance on the first day of each month during the Term.
Minimum Monthly Rent for any partial month shall be prorated at the rate of 1/30th of the Minimum
Monthly Rent per day. Minimum Monthly Rent is exclusive of any sales, franchise, business or
occupation or other tax based on rents (other than Landlord's general income taxes) and should such
taxes apply during the Term,the Minimum Monthly Rent shall be increased by the amount of such taxes.
All Rent shall be paid to Landlord at Landlord's Address for Payment of Rent or at such other address as
Landlord may specify by notice to Tenant.
(b) Late Charge. Tenant acknowledges that the late payment by Tenant of any Rent will cause
Landlord to incur administrative, collection, processing and accounting costs and expenses not
contemplated under this Lease, the exact amount of which are extremely difficult or impracticable to fix.
Therefore, if any Rent is not received by Landlord from Tenant by the tenth (10th) calendar day after
such Rent is due, Tenant shall immediately pay to Landlord a late charge equal to five percent (5%) of
the amount of such Rent or Seventy-five and No/100th Dollars ($75.00), whichever is greater. Landlord
grants to Tenant up to two (2)grace periods, each of which shall be for a period of five (5) days following
the tenth calendar day after such Rent is due. Landlord and Tenant agree that this late charge represents
a reasonable estimate of such costs and expenses and is fair compensation to Landlord for its loss
caused by Tenant's nonpayment. Should Tenant pay said late charge but fail to pay contemporaneously
therewith all unpaid amounts of Rent, Landlord's acceptance of this late charge shall not constitute a
waiver of Tenant's default with respect to Tenant's nonpayment nor prevent Landlord from exercising all
other rights and remedies available to Landlord under this Lease or under law.
6. Prepaid Rent and Security Deposit. As partial consideration for Landlord's execution of this Lease,
on execution of this Lease, Tenant shall deposit with Landlord the Prepaid Rent, as monthly rent for the
first full month of the Term for which Rent is payable, and the Security Deposit, as a Security Deposit for
the performance by Tenant of the provisions of this Lease. If Tenant is in default, Landlord may use the
Security Deposit, or any portion of it, to cure the default, including without limitation, paying for the cost
of any work necessary to restore the Premises, the Tenant improvements and any alterations to good
condition or to compensate Landlord for all damage sustained by Landlord resulting from Tenant's
default. Tenant shall within five (5) days of demand pay to Landlord a sum equal to the portion of the
Security Deposit expended or applied by Landlord as provided in this Section so as to maintain the
Security Deposit in the sum initially deposited with Landlord. If Tenant is not in default as of the sixtieth
(60th) month of the Term, then Landlord shall return one-half (1/2) of the Security Deposit, without
interest, to Tenant within thirty (30) days thereafter. If Tenant is not in default as of the expiration or
termination of the Term, including without limitation, in default in payment of the Rent for the last month
of the Term, then Landlord shall return the Security Deposit, without interest, to Tenant within a
reasonable period of time not to exceed thirty (30) days after the expiration or termination of the Term,
provided, however, that Landlord may retain a portion of the Security Deposit for payment of increases in
Real Property Taxes and Operating Costs the exact amount of which has not been determined as of the
expiration or termination of the Term. Landlord's obligations with respect to the Security Deposit are
those of a debtor and not a trustee. Landlord may commingle the Security Deposit with Landlord's
general and other funds.
7. Real Property Taxes.
(a) Payment of Tenant's Share of Increases in Real Property Taxes. Tenant shall pay to
Landlord, as Additional Rent, monthly, in advance on the first day of each month during the Term, an
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amount equal to one-twelfth (1/12th) of Tenant's Share of all Increases in Real Property Taxes that are or
will be levied or assessed against the Property during each calendar year during the Term over and
above the Real Property Taxes that are levied or assessed against the Property during the Base Year as
reasonably estimated by Landlord (such increase in Tenant's Share of the increase in Real Property
Taxes above the Base Year is currently estimated to be $15.00 per month for the calendar year 2002).
Such Additional Rent is exclusive of any sales, franchise, business or occupation or other tax based on
rents and should such taxes apply during the Term, such Additional Rent shall be increased by the
amount of such taxes. Within sixty (60) days after the end of each calendar year during the Term or
within such longer period of time as may be reasonably necessary, Landlord shall furnish to Tenant a
statement of the Real Property Taxes for the preceding calendar year and Tenant's Share of the increase
in Real Property Taxes. If Tenant's Share of the increase in such Real Property Taxes for that calendar
year over such Real Property Taxes for the Base Year exceeds the monthly payments made by Tenant,
then Tenant shall pay Landlord the deficiency within thirty (30) days after receipt of the statement. If
Tenant's payments made during that calendar year exceed Tenant's Share of the increase in such Real
Property Taxes for that calendar year over such Real Property Taxes for the Base Year, then, at
Landlord's option, either Landlord shall pay Tenant the excess at the time Landlord furnishes the
statement to Tenant, or Tenant shall be entitled to offset the excess against the next installment(s) of
Minimum Monthly Rent and Additional Rent, provided, however, that at the end of the Term Landlord
shall pay Tenant the excess at the time Landlord furnishes the statement to Tenant.
(b) General and Special Assessments. With respect to any general or special assessments
which may be levied against or upon the Property, or which under the laws then in force may be
evidenced by improvement or other bonds or may be paid in annual installments, only the amount of
such annual installment, and interest due thereon, shall be included in the computation of Real Property
Taxes.
(c) Proration. Tenant's Share of Real Property Taxes shall be prorated on the basis of a 360-day
year to account for any fractional portion of a tax year included in the Term at its commencement and
expiration.
(d) No Effect on Minimum Monthly Rent. Notwithstanding anything to the contrary in this
Section, the Minimum Monthly Rent payable by Tenant shall in no event be less than the Minimum
Monthly Rent specified in Section 1.
(e) Leasehold Excise Tax. Notwithstanding anything to the contrary contained in this Section 7,
Landlord and Tenant agree that Landlord is a municipal corporation under the State of Washington, and,
as such, pays leasehold excise taxes based on rent in lieu of Real Property Taxes. For purposes of
establishing a Base Year for taxes based on rent, Landlord and Tenant shall agree upon a tax
assessment based on the valuation of the Property for the Base Year, and Tenant shall pay to Landlord
as Additional Rent, monthly, in advance on the first day of each month during the Term, an amount
equal to one-twelfth (1/12th) of Tenant's Share of all increases in the valuation of the Property over the
agreed upon Base Year valuation that are or will be levied or assessed against the Property for each
calendar year during the Term.
8. Personal Property Taxes. Tenant shall pay prior to delinquency all personal property taxes
assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property
of Tenant contained in the Premises or elsewhere. If possible, Tenant shall cause such trade fixtures,
furnishings, equipment and all other personal property of Tenant to be assessed and billed separately
from the Property.
9. Operating Costs.
(a) Payment of Tenant's Share of Increases in Operating Costs. Tenant shall pay to
Landlord, as Additional Rent, monthly, in advance on the first day of each month during the Term, an
amount equal to one-twelfth (1/12th) of Tenant's Share of the increase in the Operating Costs of the
Property for each calendar year during the Term over the Operating Costs for the Base Year as
reasonably estimated by Landlord (such increase in Tenant's Share of the Operating Costs above the
Base Year is currently estimated to be $60.00 per month for the calendar year 2002). Landlord may, in
accordance with sound accounting and management principles, both reasonably estimate, and finally
determine, the Operating Costs for the Base Year and for each calendar year during the Term based on
the Operating Costs that would have been incurred if the Building had been 95% occupied during the
Base Year or each such calendar year, as the case may be, taking into account historical operating costs
for the Building. Landlord may, in accordance with sound accounting and management principles, make
any other appropriate changes to reflect adjustments to Operating Costs for prior years or for
the then current calendar year. Such Additional Rent is exclusive of any sales, franchise, business or
occupation or other tax based on rents and should such taxes apply during the Term, such Additional
Rent shall be increased by the amount of such taxes. Within one hundred sixty (60) days after the end of
each calendar year during the Term or within such longer period of time as may be reasonably
necessary, Landlord shall furnish to Tenant a statement of the Operating Costs for the preceding
calendar year and Tenant's Share of the increase in the Operating Costs. If Tenant's Share of the
increase in the Operating Costs for that calendar year over the Operating Costs for the Base Year
exceeds the monthly payments made by Tenant, then Tenant shall pay Landlord the deficiency within
thirty (30) days after receipt of the statement. If Tenant's payments made during that calendar year
exceed Tenant's Share of the increase in the Operating Costs for that calendar year over the Operating
Costs for the Base Year, then, at Landlord's option, either Landlord shall pay Tenant the excess at the
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time Landlord furnishes the statement to Tenant, or Tenant shall be entitled to offset the excess against
the next installment(s) of Minimum Monthly Rent and Additional Rent, provided, however, that at the end
of the Term Landlord shall pay Tenant the excess at the time Landlord furnishes the statement to
Tenant.
(b) Proration. Tenant's Share of Operating Costs shall be prorated on the basis of a 365 day
year to account for any fractional portion of a year included in the Term at its commencement and
expiration.
(c) No Effect on Minimum Monthly Rent. Notwithstanding anything to the contrary in this
Section, the Minimum Monthly Rent payable by Tenant shall in no event be less than the Minimum
Monthly Rent specified in Section 1.
10. Use. Tenant shall use the Premises for the Permitted Use and for no other use without Landlord's
prior consent. Tenant agrees that it has determined to its satisfaction that the Premises can be used for
the Permitted Use. Tenant waives any right to terminate this Lease if the Premises cannot be used for
the Permitted Use during the Term unless the prohibition on use is the result of actions taken by
Landlord. Tenant's use of the Premises shall be in accordance with the following:
(a) Insurance. Tenant shall not do, bring, or keep anything in or about the Premises or the
Property that will cause a cancellation of any insurance covering the Property. If the rate of any
insurance carried by Landlord on the Property as published by the Washington Survey and Rating
Bureau, or any successor rating bureau or agency, is increased as the sole result of Tenant's use, then
Tenant shall pay to Landlord not less than thirty (30) days after written proof is received that Landlord is
obligated to pay a premium on the insurance, a sum equal to the difference between the original
premium and the increased premium.
(b) Compliance with Laws. Tenant shall comply with all laws concerning the Premises and
Tenant's use of the Premises.
(c) Waste,.Nuisance and Improper Use. Tenant shall not use the Premises in any manner that
will constitute waste, nuisance or unreasonable annoyance to other tenants in the Building, including
without limitation, (i) the use of loudspeakers or sound or light apparatus that can be heard or seen
outside the Premises, (ii) for cooking or other activities that cause odors that can be detected outside the
Premises, or(iii) for lodging or sleeping rooms.
(d) Damage to Property. Tenant shall not do anything in, on or about the Premises that will
cause damage to the Property.
(e) Rules and Regulations. Tenant and its authorized representatives shall comply with the
Rules and Regulations set forth on Exhibit D attached hereto. Landlord shall have the right to reasonably
amend the Rules and Regulations from time to time. In the event of a conflict between this Lease and
the Rules and Regulations, as amended, this Lease shall control. Landlord shall have the right to enforce
the Rules and Regulations. Landlord shall have no liability or responsibility whatsoever with respect to
the noncompliance by other tenants or their authorized representatives with any of such Rules and
Regulations.
11. Hazardous Substances. Tenant shall not dispose of or otherwise allow the release of any
Hazardous Substances in, on or under the Premises, or the Property, or in any tenant improvements or
alterations placed on the Premises by Tenant. Tenant represents and warrants to Landlord that Tenant's
intended use of the Premises does not involve the use, production, disposal or bringing on to the
Premises of any Hazardous Substances, except for products normally used in general business offices
which constitute Hazardous Substances, provided that such products are used, stored and disposed of in
accordance with applicable laws and manufacturer's and supplier's guidelines. In the event Hazardous
Substances are released in or on the Premises (other than the aforesaid products normally used in
general business offices which constitute Hazardous Substances) or the Property by Tenant, Tenant shall
promptly comply with all laws and with all orders, decrees or judgments of governmental authorities or
courts having jurisdiction, relating to the use, collection, treatment, disposal, storage, control, removal or
cleanup of Hazardous Substances, on or under the Premises or the Property, or incorporated in any
tenant improvements or alterations, at Tenant's expense.
(a) Compliance; Notification. In the event Hazardous Substances are released on the Premises
or Property by Tenant, and after notice to Tenant and a reasonable opportunity for Tenant to effect such
compliance, Landlord may, but is not obligated to, enter upon the Premises and take such actions and
incur such costs and expenses to effect such compliance as it determines reasonably advisable to
protect its interest in the Premises and the Property, provided, however that Landlord shall not be
obligated to give Tenant notice and an opportunity to effect such compliance if(i) such delay might result
in material adverse harm to the Premises, or the Property, or (ii) an emergency exists. Tenant shall
reimburse Landlord for the full amount of all commercially reasonable costs and expenses incurred by
Landlord in connection with such compliance activities, and such obligation shall continue even after
expiration or termination of the Term. Tenant shall notify Landlord immediately of any release of any
Hazardous Substances on the Premises or the Property.
(b) Indemnity by Tenant. Tenant agrees to hold Landlord harmless from and against any and all
damages, charges, cleanup costs, remedial actions, costs and expenses, which may be imposed on,
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incurred or paid by, or asserted against Landlord, the Premises or the Property by reason of, or in
connection with (1) any misrepresentation, breach of warranty or other default by Tenant under this
Lease, or (2) the acts or omissions of Tenant, its authorized representatives, or any subtenant or other
person for whom Tenant would otherwise be liable, resulting in the release of any Hazardous Substances
on the Premises or the Property.
(c) Indemnity by Landlord. Landlord agrees to hold Tenant harmless from and against any and
all damages, charges, cleanup costs, remedial actions, costs and expenses, which may be imposed on,
incurred or paid by, or asserted against Tenant, the Premises or the Property by reason of, or in
connection with the acts or omissions of Landlord, or its employees, agents, contractors or other prior or
other current tenants in the Building resulting in the release of any Hazardous Substances on the
Premises or the Property.
(d) Acknowledgment as to Hazardous Substances. Tenant acknowledges that the Premises
may contain Hazardous Substances, and Tenant accepts the Premises and the Building notwithstanding
such Hazardous Substances. If Landlord is required by any law to take any action to remove or abate
any Hazardous Substances, or if Landlord deems it reasonably necessary to conduct special
maintenance or testing procedures with regard to any Hazardous Substances, or to remove or abate any
Hazardous Substances, Landlord may take such action or conduct such procedures at times and in a
manner that Landlord deems appropriate under the circumstances, and Tenant shall permit the same,
provided that Rent shall abate during any period of time during which Tenant is not permitted reasonable
use of the Premises.
(e) Survival. The provisions of this Section shall survive the expiration or sooner termination of
the Term. No subsequent modification or termination of this Lease by agreement of the parties or
otherwise shall be construed to waive or to modify any provisions of this Section unless the termination
or modification agreement or other document expressly so states in writing.
12. Landlord's Maintenance; Inclusion in Operating Costs; Remedies.
(a) Landlord's Maintenance; Inclusion in Operating Costs. Except as provided in Section 13
captioned "Tenant's Maintenance; Remedies", Section 23 captioned "Destruction" and Section 24
captioned "Condemnation" and except for damage caused by any negligent or intentional act or omission
of Tenant or its authorized representatives, Landlord shall maintain in good condition and repair the
following: (i) the heating, ventilating and air-conditioning system, if any, servicing the Building, (ii) the
lobbies, corridors, elevators, public or common restrooms and other common areas of the Building, and
(iii) the sidewalks, grounds, landscaping, parking and loading areas, if any, and other common areas of
the Property. Landlord shall, at its sole cost and expense, further maintain in good condition and repair
the following, which shall not be included in Operating Costs: (iv) the structural parts of the Building,
which structural parts include only the foundations, bearing and exterior walls, exterior glass, glass
entrance doors, excluding repairs (excluding interior glass and interior glass doors), subflooring and roof,
excepting roof repairs, and (v) the window coverings and latent defects to the unexposed electrical,
plumbing and sewage systems, including without limitation, those portions lying outside the Premises.
(b) Inclusion in Operating Costs. The cost of maintaining, repairing, replacing or servicing the
portions of the Building that Landlord is required to maintain pursuant to Section 12(a)(i), (ii), and (iii)
shall be included in Operating Costs to the extent provided in Section 9 captioned "Operating Costs".
Notwithstanding anything to the contrary contained in Section 12(a) above, the cost of replacing light
bulbs, minor roof repairs, window washing, minor plumbing repairs, replacing ceiling tiles and other minor
repairs shall be included in operating costs.
(c) Tenant's Remedies. If Landlord fails to maintain the Premises in good condition and repair
as required by Subsection 12(a) and if such failure is not cured within thirty (30) days after notice of such
failure is given by Tenant to Landlord, unless Landlord has diligently and in good faith commenced to
cure and continues to diligently pursue such cure, Tenant may, at its option, cause the Premises to be
maintained in good condition and repair, except for minor repairs of the roof, plumbing and other non-
structural repairs, and Landlord shall promptly reimburse Tenant for all reasonable costs incurred by
Tenant in performance of Landlord's obligation to maintain the Premises.
13. Tenant's Maintenance; Remedies.
(a) Tenant's Maintenance. Except as provided in Section 12 captioned "Landlord's
Maintenance; Inclusion in Operating Costs", Section 23 captioned "Destruction" and Section 24
captioned "Condemnation" and except for damage caused by any grossly negligent or intentional act or
omission of Landlord or its authorized representatives, Tenant, at its cost, shall maintain in good
condition and repair the Premises, including without limitation, all of the Tenant Improvements, Tenant's
alterations, Tenant's trade fixtures, Tenant's personal property, signs, walls, interior partitions, wall
coverings,windows, non-building standard window coverings, glass within the Premises, doors, carpeting
and resilient flooring, non-building standard ceiling tiles, plumbing fixtures and non-building standard
lighting fixtures. Tenant shall be liable for any damage to the Premises and the Building resulting from
the acts or omissions of Tenant or its authorized representatives.
(b) Landlord's Remedies. If Tenant fails to maintain the Premises in good condition and repair
as required by Subsection 13(a) and if such failure is not cured within thirty (30) days after notice of such
failure is given by Landlord to Tenant, then Landlord may, at its option, cause the Premises to be
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maintained in good condition and repair and Tenant shall promptly reimburse Landlord for all reasonable
costs incurred by Landlord in performance of Tenant's obligation to maintain the Premises.
14. Tenant Improvements; Alterations and Trade Fixtures.
(a) Tenant Improvements. Tenant accepts the Premises in their "AS IS" condition without any
agreements, representations, understandings or obligations on the part of Landlord to perform any
alterations, repairs or improvements or to provide any allowances unless otherwise expressly provided in
this Lease or in the Work Letter attached hereto as Exhibit C. Tenant shall not make any improvements
or alterations to the Premises without Landlord's prior consent.
(b) Alterations. Any improvements and alterations made by either party shall remain on and be
surrendered with the Premises on expiration or termination of the Term, except that Landlord can elect
by giving notice to Tenant within thirty (30) days before the expiration of the Term, or within thirty (30)
days after termination of the Term, to require Tenant to remove any improvements and alterations that
Tenant has made to the Premises. If Landlord so elects, Tenant, at its cost, shall restore the Premises to
the condition designated by Landlord in its election, before the last day of the Term, or within thirty (30)
days after notice of election is given, whichever is later; provided, however, if such improvements and
alterations cannot reasonably be removed within such time period, Tenant may have ten (10) additional
days within which to effect such removal. Any improvements and alterations that remain on the Premises
on expiration or termination of the Term or after such additional time period as provided for herein, shall
automatically become the property of Landlord and title to such improvements and alterations shall
automatically pass to Landlord at such time without any payment therefor by Landlord to Tenant. If
Tenant or its authorized representatives make any improvements or alterations to the Premises as
provided in this Section, then such improvements and alterations (i) shall be made in a first class manner
in conformity with then building standard improvements, (ii)shall be made utilizing then building standard
materials, (iii)shall be made in compliance with the Rules and Regulations and the reasonable directions
of Landlord, (iv) shall be made pursuant to a valid building permit to be obtained by Tenant, at its cost,
and (v) shall be made in conformity with then applicable laws, including without limitation, building codes.
(c) Trade Fixtures. Tenant shall not install any trade fixtures in or on the Premises without
Landlord's prior consent.
15. Mechanics' Liens. Tenant shall pay, or cause to be paid, all costs of labor, services and/or
materials supplied in connection with any Work. Tenant shall keep the Property free and clear of all
mechanics' liens and other liens resulting from any Work. Prior to the commencement of any Work
costing more than an amount equal to one (1) month's Minimum Monthly Rent, or the supply or
furnishing of any labor, services and/or materials in connection with any such Work, Tenant shall provide
Landlord with a labor and material payment bond, a letter of credit or other security satisfactory to
Landlord in an amount equal to one hundred percent (100%) of the aggregate price of all contracts
therefor, with release of the bond conditioned on Tenant's payment in full of all claims of lien claimants
for such labor, services and/or materials supplied in the prosecution of the Work. Said payment bond
shall name Landlord as a primary obligee, shall be given by a surety which is reasonably satisfactory to
Landlord, and shall be in such form as Landlord shall approve in its reasonable discretion. Tenant shall
have the right to contest the correctness or validity of any such lien if, immediately on demand by
Landlord, it procures and records a lien release bond issued by a responsible corporate surety in an
amount sufficient to satisfy statutory requirements therefor in the State of Washington. Tenant shall
promptly pay or cause to be paid all sums awarded to the claimant on its suit, and, in any event, before
any execution is issued with respect to any judgment obtained by the claimant in its suit or before such
judgment becomes a lien on the Premises, whichever is earlier. If Tenant shall be in default under this
Section, by failing to provide security for or satisfaction of any mechanic's or other liens, then Landlord
may (but shall not be obligated to), in addition to any other rights or remedies it may have, discharge
said lien by (i) paying the claimant an amount sufficient to settle and discharge the claim, (ii) procuring
and recording a lien release bond, or (iii) taking such other action as Landlord shall deem necessary or
advisable, and, in any such event, Tenant shall pay as Additional Rent, on Landlord's demand, all
reasonable costs (including reasonable attorney fees) incurred by Landlord in settling and discharging
such lien together with interest thereon in accordance with Section 39 captioned "Interest on Unpaid
Rent" from the date of Landlord's payment of said costs. Landlord's payment of such costs shall not
waive any default of Tenant under this Section.
16. Utilities and Services.
(a) Utilities and Services Furnished by Landlord. Landlord shall furnish the Premises with:
(i) Electricity for lighting and power suitable for the use of the Premises for ordinary
general office purposes; provided, however, that Tenant shall not at any time have a connected electrical
load for lighting purposes in excess of the wattage per square foot of Premises Area required for building
standard amounts of lighting, or a connected load for all other power requirements in excess of four (4)
watts per square foot of Premises Area as determined by Landlord, and the electricity so provided for
lighting and power shall not exceed such limits, subject to any lower limits set by any governmental
authority with respect thereto;
(ii) Subject to the reasonable limitations of the existing building systems, heating,
ventilating and air-conditioning, if the Building has an air-conditioning system, to maintain a temperature
range in the Premises which is customary for similar office space in the Seattle, Washington area (but in
compliance with any applicable governmental regulations with respect thereto). Tenant agrees to keep
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closed, when necessary, blinds, draperies and windows which must be closed to provide for the efficient
operation of the heating and air conditioning systems, if any, and Tenant agrees to cooperate with
Landlord and to abide by the regulations and requirements which Landlord may prescribe for the proper
functioning and protection of the heating, ventilating and air-conditioning system, if any. If Tenant
requires heating, ventilating and air conditioning to the Premises other than during normal business
hours from 7:30 A.M. to 10:00 P.M. Monday through Friday and from 10:00 A.M. to 5:00 p.m. Saturday
and Sunday, except those legal holidays generally observed in the State of Washington, Landlord shall,
upon Tenant's request made not less than 24 hours before the time Tenant requires the after hour
service, and not later than Noon of the Friday before any holiday on which Tenant requires such service
(except as otherwise provided in the Rules and Regulations), furnish such heating, ventilating and air
conditioning. If Tenant receives such services, then Tenant shall pay, upon demand, an amount equal to
Tenant's proportionate share of the actual direct cost to Landlord in providing the heating, ventilating and
air conditioning outside of normal business hours;
(iii) Water for restroom and drinking purposes and access to restroom facilities;
(iv) Elevator service for general office pedestrian usage if the Building is serviced by
elevators;
(v) Relamping of building-standard light fixtures;
(vi) Washing of interior and exterior surfaces of exterior windows with reasonable
frequency; and
(vii) Janitorial service five (5)times per week, except holidays.
(b) Payment for Excess Utilities and Services. All services and utilities for the Premises not
required to be furnished by Landlord pursuant to Section 16(a) shall be paid for by Tenant. If Tenant
requires, on a regular basis, water, heat, air conditioning, electric current, elevator or Janitorial service in
excess of that provided for in Section 16(a), then Tenant shall first obtain the consent of Landlord which
consent may be withheld in Landlord's sole discretion. If Landlord consents to such excess use, Landlord
may install an electric current or water meter(including, without limitation, any additional wiring, conduit
or panel required therefor) to measure the excess electric current or water consumed by Tenant or may
cause the excess usage to be measured by other reasonable methods (e.g. by temporary "check" meters
or by survey). Tenant shall pay to Landlord upon demand (i) the cost of any and all water, heat, air
conditioning, electric current, janitorial, elevator or other services or utilities required to be furnished to
Tenant in excess of the services and utilities required to be furnished by Landlord as provided in Section
16(a); (ii) the cost of installation, maintenance and repair of any meter installed in the Premises; (iii) the
cost of all electricity and water consumed by Tenant in connection with any dedicated heating, ventilating
and/or air conditioning, computer power and/or air conditioning, telecommunications or other special
systems of Tenant, including any power usage other than through existing standard 110-volt AC outlets;
and (iv) any reasonable cost incurred by Landlord in keeping account of or determining such excess
utilities or services furnished to Tenant. Landlord's failure to bill Tenant for any such excess utilities or
services shall not waive Landlord's right to bill Tenant for the excess at a later time, provided, however,
that Tenant shall be furnished with copies of all such utility bills upon request by Tenant. The cost of after
hour HVAC use is currently estimated to be $15.00 per hour.
(c) Temperature Balance. Landlord makes no representation to Tenant regarding the adequacy
or fitness of the heating, ventilating and air-conditioning systems in the Building to maintain temperatures
that may be required for, or because of, any of Tenant's equipment other than normal office equipment,
such as personal computers, laser printers, copiers, dictating machines and other small equipment
normally used in business offices, and Landlord shall have no liability for loss or damage suffered by
Tenant or others in connection therewith. If the temperature otherwise maintained in any portion of the
Premises by the heating, air conditioning or ventilation system is affected as a result of (i) any lights,
machines or equipment (including without limitation electronic data processing machines) used by
Tenant in the Premises or the use of more than one personal computer per person, (ii) an electrical load
for lighting or power in excess of the limits per square foot of rentable area of the Premises specified in
Section 16(a), or (iii) any rearrangement of partitioning or other improvements, Landlord may install any
equipment, or modify any existing equipment (including the standard air conditioning equipment)
Landlord deems necessary to restore the temperature balance. The cost of any such equipment,
including without limitation, the cost of design and installation thereof, and the cost of operating,
metering, maintaining or repairing the same, shall be paid by Tenant to Landlord upon demand. Tenant
shall not install or operate window-mounted heating or air-conditioning units.
(d) Special Electrical or Water Connections; Electricity Use. Tenant will not,without the prior
consent of Landlord, which Landlord in its sole discretion may refuse, connect or use any apparatus or
device in the Premises (i) using current in excess of 110 volts or (ii) which will cause the amount of
electricity, water, heating, air conditioning or ventilation furnished to the Premises to exceed the amount
required for use of the Premises for ordinary general office purposes, as determined by Landlord, during
normal business hours or (iii) which would cause Tenant's connected load to exceed any limits
established in Section 16(a). Tenant shall not connect with electric current except through existing outlets
in the Premises and shall not connect with water pipes except through existing plumbing fixtures in the
Premises. In no event shall Tenant's use of electricity exceed the capacity of existing feeders to the
Building or the risers or wiring installation, and Landlord may prohibit the use of any electrical equipment
which in Landlord's opinion will overload such wiring or interfere with the use thereof by other tenants in
the Building. If Landlord consents to the use of equipment requiring such changes, Tenant shall pay the
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cost of installing any additional risers, panels or other facilities that may be necessary to furnish energy
to the Premises.
Landlord will not permit additional coring of the floor of the Premises in order to install new
electric outlets in the Premises unless Tenant furnishes Landlord with X-ray scans of the floor area where
the Tenant wishes to place additional electrical outlets and Landlord, in its absolute discretion, is
satisfied, on the basis of such X-ray scans and other information obtained by Landlord, that coring of the
floor in order to install such additional outlets will not weaken the structure of the floor.
(e) Landlord's Duties. Landlord shall not be in default under this Lease or liable for any
damages resulting from, or incidental to, any of the following, nor shall any of the following be an actual
or constructive eviction of Tenant, nor shall the Rent be abated by reason of: (i) failure to furnish or delay
in furnishing any of the services described in this Section when such failure or delay is caused by
accident or any condition beyond the reasonable control of Landlord, including the making of necessary
repairs or improvements to the Premises or to the Building, (ii) any electrical surges or spikes, or (iii)
failure to make any repair or to perform any maintenance, unless such failure shall persist for an
unreasonable time after notice of the need for such repair or maintenance is given to Landlord by
Tenant. Landlord shall use reasonable efforts to remedy any interruption in the furnishing of such
services.
(f) Governmental Regulations. Any other provisions of this Section notwithstanding, if any
governmental authority or utility supplier imposes any laws, controls, conditions, or other restrictions
upon Landlord, Tenant, or the Building, relating to the use or conservation of energy or utilities,
mandated changes in temperatures to be maintained in the Premises or the Building or the reduction of
automobile or other emissions (collectively, the "Controls'), or in the event Landlord is required or elects
to make alterations to the Building in order to comply with the Controls, Landlord may, in its sole
discretion, comply and may require Tenant to comply with the Controls or make such alterations to the
Building in order to comply with the Controls. Such compliance and the making of such alterations shall
not constitute an actual or constructive eviction of Tenant, impose on Landlord any liability whatsoever,
or entitle Tenant to any abatement of Rent.
17. Indemnity.
(a) Generally. Tenant shall hold Landlord harmless from and against any and all damages
arising out of any damage to any persons or property occurring in, on or about the Premises or the
Property resulting from the acts or omissions of Tenant or its authorized representatives. Landlord shall
hold Tenant harmless from and against any and all damages arising out of any damage to any persons
or property occurring in, on or about the Premises or the Property resulting from the acts or omissions of
Landlord or its authorized representatives. A party's obligation under this Section to indemnify and hold
the other party harmless shall be limited to the sum that exceeds the amount of insurance proceeds, if
any, received by the party being indemnified.
(b) Concurrent Negligence of Landlord and Tenant. Notwithstanding Section 17(a) above, in
the event of concurrent negligence of Tenant, or its authorized representatives, on the one hand, and
that of Landlord, or its authorized representatives, on the other hand,which concurrent negligence results
in damage to any persons or property occurring in, on or about the Premises or the Property, either
party's obligation to indemnify the other party as set forth in Section 17(a)shall be limited to the extent of
the negligence of the indemnifying party, or its authorized representatives, including the indemnifying
party's proportional share of costs and reasonable attorneys' fees incurred in connection with any claims,
actions or proceedings brought with respect to such damage.
(c) Waiver of Worker's Compensation Immunity. The indemnification obligations contained in
this Section shall not be limited by any worker's compensation, benefit or disability laws, and each
indemnifying party hereby waives (solely for the benefit of the indemnified party) any immunity that said
indemnifying party may have under the Industrial Insurance Act, Title 51 RCW and similar worker's
compensation, benefit or disability laws.
(d) Provisions Specifically Negotiated. LANDLORD AND TENANT ACKNOWLEDGE BY
THEIR EXECUTION OF THIS LEASE THAT EACH OF THE INDEMNIFICATION PROVISIONS OF
THIS LEASE (SPECIFICALLY INCLUDING BUT NOT LIMITED TO THOSE RELATING TO WORKER'S
COMPENSATION BENEFITS AND LAWS) WERE SPECIFICALLY NEGOTIATED AND AGREED TO
BY LANDLORD AND TENANT.
18. Exemption of Landlord from Liability. Landlord and Landlord's Agent shall not be•liable for
injury to Tenant's business or loss of income therefrom or for damage which may be sustained by the
person, goods, wares, merchandise or property of Tenant, its authorized representatives, or any other
person in or about the Premises, caused by or resulting from fire, steam, electricity, gas, water or rain,
which may leak or flow from or into any part of the Premises, or from the breakage, leakage, obstruction
or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
of the same, whether the said damage or injury resulting from conditions arising upon the Premises or
upon other portions of the Building or the Property unless such injury or damage is caused by the gross
negligence or willful misconduct of Landlord or its authorized representatives.
19. Commercial General Liability and Property Damage Insurance. Tenant, at its cost, shall
maintain commercial general liability insurance (including contractual liability and products and
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completed operations liability) with liability limits of not less than $2,000,000 per occurrence, and
$2,000,000 annual aggregate insuring against all liability of Tenant and its authorized representatives
arising out of or in connection with Tenant's use and occupancy of the Premises and property damage
insurance with liability limits of not less than $1,000,000. All such commercial general liability and
property damage insurance shall insure performance by Tenant of the indemnity provisions of Section 17
captioned "Indemnity". Landlord and Landlord's Agent shall be additional named insureds on such
insurance policy.
20. Tenant's Fire Insurance. Tenant, at its cost, shall maintain on all of Tenant's Alterations, Trade
Fixtures and Personal Property in, on or about the Premises, a policy of standard All Risk fire insurance,
in an amount equal to at least their full replacement cost. The proceeds of any such policy shall be used
by Tenant for the restoration of Tenant's Alterations and Trade Fixtures and the replacement of its
Personal Property. Any portion of such proceeds not used for such restoration shall belong to Tenant.
21. Waiver of Claims; Waiver of Subrogation Landlord and Tenant release each other, and their
respective authorized representatives, from, and waive their entire claim of recovery for, any claims for
damage to the Premises and the Building and to Tenant's alterations, trade fixtures and personal
property that are caused by or result from fire, lightening or any other perils normally included in an "all
risk" property insurance policy whether or not such loss or damage is due to the negligence of Landlord,
or its authorized representatives, or of Tenant, or its authorized representatives. Landlord and Tenant
shall cause each insurance policy obtained by it to provide that the insurance company waives all right of
recovery by way of subrogation against either party in connection with any damage covered by such
insurance policy.
22. Other Insurance Matters. All insurance required to be carried by Tenant under this Lease shall: (i)
be issued by insurance companies authorized to do business in the State of Washington with a rating of
ANI or better as rated in the most recent edition of Best's Insurance Reports; (ii) be issued as a primary
policy, and (iii) contain an endorsement requiring thirty (30) days' prior written notice from the insurance
company to both parties, to Landlord's Agent, and, if requested by Landlord, to Landlord's lender, before
cancellation or change in the coverage, scope, or amount of any policy. Each certificate of the policy,
together with evidence of payment of premiums, shall be deposited with Landlord on or before the
Commencement Date, and on renewal of the policy not less than thirty (30) days before expiration of the
term of the policy.
23. Destruction.
(a) Insured Damage. If during the Term the Premises or the Building are partially or totally
destroyed by any casualty that is covered by any insurance carried by Landlord covering the Building,
rendering the Premises partially or totally inaccessible or unusable, Landlord shall restore the Premises
or the Building to substantially the same condition as they were in immediately before such destruction, if
(i) the insurance proceeds available to Landlord equal or exceed the cost of such restoration, (ii) in the
opinion of a registered architect or engineer appointed by Landlord such restoration can be completed
within one hundred eighty (180) days after the date on which Landlord obtains all permits necessary for
such restoration, and (iii) such restoration is permitted under then existing laws to be done in such a
manner as to return the Premises, or the Building, as the case may be, to substantially the same
condition as they were in immediately before such destruction. To the extent that the insurance proceeds
must be paid to a mortgagee under, or must be applied to reduce any debt secured by, a mortgage
covering the Property, the insurance proceeds shall be deemed not to be available to Landlord unless
such mortgagee permits Landlord to use the insurance proceeds for such restoration. Such destruction
shall not terminate this Lease, except that Tenant shall have the right to terminate this Lease upon
written notice to Landlord in the event restoration is not completed within one hundred eighty (180) days
after the date on which Landlord obtains all permits necessary for such restoration.
(b) Major or Uninsured Damage. If during the Term the Premises or the Building are partially
or totally destroyed by any casualty and Landlord is not obligated under Section 23(a) captioned "Insured
Damage"to restore the Premises or the Building, as the case may be, then Landlord may, at its election,
either (i) restore the Premises or the Building to substantially the same condition as they were in
immediately before such destruction, or (ii) terminate this Lease effective as of the date of such
destruction upon written notice to Tenant. If Landlord elects to restore the Premises or the Building, as
the case may be, Landlord shall use commercially reasonable efforts to complete such restoration within
one hundred eighty (180) days after the date on which Landlord obtains all permits necessary for such
restoration, provided, however, that such one hundred eighty (180) day period shall be extended by a
period equal to any delays caused by Force Majeure, and such destruction shall not terminate this Lease.
If Landlord does not complete such restoration within one (1) year following the date of such destruction,
then Tenant may elect to terminate this Lease by giving notice to such effect to Landlord within ten (10)
days following the end of such one (1) year period.
(c) Damage to the Building. If during the Term the Building is partially destroyed by any
casualty and if in the reasonable opinion of Landlord the Building should be restored in such a way as to
materially alter the Premises, then Landlord may, at Landlord's election, terminate this Lease by giving
notice to Tenant of Landlord's election to do so within sixty (60) days after the date of such destruction,
unless destruction of such items was the result of the gross negligence or willful misconduct of Landlord,
its employees, agents or contractors.
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(d) Extent of Landlord's Obligation to Restore. If Landlord is required or elects to restore the
Premises as provided in this Section, Landlord shall not be required to restore alterations made by
Tenant, Tenant's trade fixtures and Tenant's personal property, such excluded items being the sole
responsibility of Tenant to restore.
,, (e) Abatement or Reduction of Rent. In case of damage to, or destruction of, the Premises or
the Building the Minimum Monthly Rent shall be abated or reduced, between the date of destruction and
the date of completion of restoration, by an amount that is in the same ratio to the Minimum Monthly
Rent as the total number of square feet of the Premises that are so damaged or destroyed bears to the
total number of square feet in the Premises.
24. Condemnation. If during the Term there is any taking of part or all of the Premises or the Building
by condemnation,then the rights and obligations of the parties shall be as follows:
(a) Minor Taking. If there is a taking of less than ten percent (10%) of the Premises, this Lease
shall remain in full force and effect, provided, however, Landlord shall reduce the Rent to reflect the
percentage reduction in the Premises.
(b) Major Taking. If there is a taking of ten percent (10%) or more of the Premises and if the
remaining portion of the Premises is of such size or configuration that Tenant in Tenant's reasonable
judgment is unable to conduct its business in the Premises, then the Term shall terminate as of the date
of taking.
(c) Taking of Part of the Building. If there is a taking of a part of the Building.other than the
Premises and if in the reasonable opinion of Landlord the Building should be restored in such a way as to
materially alter the Premises, then Landlord may terminate the Term by giving notice to such effect to
Tenant within sixty (60) days after the date of vesting of title in the condemnor and the Term shall
terminate as of the date specified in such notice, which date shall not be less than sixty (60) days after
the giving of such notice.
(d) Award. The entire award for the Premises,the Building and the Property, shall belong to and
be paid to Landlord, Tenant hereby assigning to Landlord Tenant's interest therein, if any, provided,
however, that Tenant shall have the right to claim and recover from the condemnor compensation for the
loss of any alterations made by Tenant, Tenant's trade fixtures, Tenant's personal property, moving
expenses and business interruption.
(e) Abatement of Rent. If any part of the Premises is taken by condemnation and this Lease
remains in full force and effect, on the date of taking the Minimum Monthly Rent shall be reduced by an
amount that is in the same ratio to the Minimum Monthly Rent as the total number of square feet in the
Premises taken bears to the total number of square feet in the Premises immediately before the date of
taking.
25. Assignment and Subletting.
(a) Landlord's Consent; Definitions. Tenant acknowledges that the Building is a multi-tenant
office building, occupied by tenants specifically selected by Landlord, and that Landlord has a legitimate
interest in the type and quality of such tenants, the location of tenants in the Building and in controlling
the leasing of space in the Building so that Landlord can better meet the particular needs of its tenants
and protect and enhance the relative image, position and value of the Building in the office building
market. Tenant further acknowledges that the rental value of the Premises may fluctuate during the
Term in accordance with market conditions, and, as a result, the Rent paid by Tenant under the Lease at
any particular time may be higher or lower than the then market rental value of the Premises. Landlord
and Tenant agree, and the provisions of this Section are intended to so provide, that, if Tenant
voluntarily assigns its interest in this Lease or in the Premises or subleases any part or all of the
Premises, a no more than fifty percent (50%) of the profits from any increase in the market rental value
of the Premises shall belong to Landlord. Tenant acknowledges that, if Tenant voluntarily assigns this
Lease or subleases any part or all of the Premises, Tenant's investment in the subject portion of the
Premises (specifically including, but not limited to, tenant improvements, good will or other assets) may
be lost or reduced as a result of such action.
(b) Consent Required. Tenant shall not voluntarily assign or encumber its interest in this Lease
or in the Premises, or sublease any part or all of the Premises, without Landlord's prior consent, which
consent shall not be unreasonably withheld. Any assignment, encumbrance or sublease without
Landlord's consent shall be voidable and, at Landlord's election, shall constitute a default by Tenant
under this Lease. In determining whether to approve a proposed assignment or sublease, Landlord shall
place primary emphasis on the proposed transferee's reputation and creditworthiness, the character of
the business to be conducted by the proposed transferee at the Premises and the affect of such
assignment or subletting on the tenant mix in the Building. In addition, Landlord shall have the right to
approve the specific form of any assignment or sublease agreement. In no event shall Landlord be
obligated to consent to any assignment or subletting which increases (i) the Operating Costs, (ii) the
burden on the Building services, or (iii) the foot traffic, elevator usage or security concerns in the
Building, or creates an increased probability of the comfort and/or safety of the Landlord and other
tenants in the Building being unreasonably compromised or reduced (for example, but not exclusively,
Landlord may deny consent to an assignment or subletting where the space will be used for a school or
training facility, an entertainment, sports or recreation facility, retail sales to the public (unless Tenant's
11
permitted use is retail sales), a personnel or employment agency, a medical office, or an embassy or
consulate or similar office). Landlord shall not be obligated to approve an assignment or subletting to (x)
a current tenant of the Building or (y) a prospective tenant of the Building with whom Landlord is then
negotiating. Landlord's foregoing rights and options shall continue throughout the entire term of this
Lease. No consent to any assignment, encumbrance or sublease shall constitute a waiver of the
provisions of this Section and no other or subsequent assignment, encumbrance or sublease shall be
made without Landlord's prior consent. Neither an assignment or subletting nor the collection of Rent by
Landlord from any person other than Tenant, nor the application of any such Rent as provided in this
Section shall be deemed a waiver of any of the provisions of this Section or release Tenant from its
obligation to comply with the terms and provisions of this Lease and Tenant shall remain fully and
primarily liable for all of Tenant's obligations under this Lease, including the obligation to pay Rent under
this Lease if the assignee or subtenant fails to do so. Any personal guarantee(s) of Tenant's obligations
under this Lease shall remain in full force and effect following any such assignment or subletting. In
addition to Landlord's other rights under this Section, Landlord may condition approval of an assignment
or subletting hereunder on an increase in the 'amount of the Security Deposit or on receipt of personal
guarantees of the assignee's or sublessee's obligations under this Lease. If Landlord approves of an
assignment or subletting hereunder and this Lease contains any renewal options, expansion options,
rights of first refusal, rights of first negotiation or any other rights or options pertaining to additional space
in the Building, such rights and/or options shall not run to the assignee or subtenant, it being agreed by
the parties hereto that any such rights and options are personal to Tenant named herein and may not be
transferred.
(c) Conditions to Assignment or Sublease. Tenant agrees that any instrument by which
Tenant assigns or sublets all or any portion of the Premises shall expressly provide that the assignee or
subtenant may not further assign or sublet the assigned or sublet space without Landlord's prior consent
(which consent shall not, subject to Landlord's rights under this Section, be unreasonably withheld or
delayed), and that the assignee or subtenant will comply with all of the provisions of this Lease and that
Landlord may enforce the Lease provisions directly against such assignee or subtenant. If this Lease is
assigned, whether or not in violation of the terms and provisions of this Lease, Landlord may collect Rent
from the assignee. If the Premises, or any part thereof, is sublet, Landlord may, upon a default under this
Lease, collect rent from the subtenant. In either event, Landlord may apply the amount collected from
the assignee or subtenant to Tenant's obligation to pay Rent under this Lease.
(d) Events Constituting an Assignment or Sublease. For purposes of this Section, the
following events shall be deemed an assignment or sublease, as appropriate: (i) the issuance of equity
interests (whether stock, partnership interests or otherwise) in Tenant, or any assignee or subtenant, if
applicable, or any entity controlling any of them, to any person or group of related persons, in a single
transaction or a series of related or unrelated transactions, such that, following such issuance, such
person or group shall have Control (as defined below) of Tenant, or any assignee or subtenant, if
applicable; or(ii) a transfer of Control of Tenant, or any assignee or subtenant, if applicable, or any entity
controlling any of them, in a single transaction or a series of related or unrelated transactions (including,
without limitation, by consolidation, merger, acquisition or reorganization), except that the transfer of
outstanding capital stock or other listed equity interests by persons or parties other than "insiders" within
the meaning of the Securities Exchange Act of 1934, as amended, through the "over-the-counter" market
or any recognized national or international securities exchange, shall not be included in determining
whether Control has been transferred. "Control" shall mean direct or indirect ownership of fifty percent
(50%) or more of all the legal and equitable interest in any business entity.
(e) Processing Expenses. Tenant shall pay to Landlord the amount of Landlord's cost of
processing each proposed assignment or subletting, including without limitation, reasonable attorneys'
and other professional fees, and the cost of Landlord's administrative, accounting and clerical time
(collectively, "Processing Costs'), which Processing Costs shall not exceed Five Hundred Dollars
($500.00), and the amount of all reasonable direct and indirect expense incurred by Landlord arising
from the assignee or sublessee taking occupancy of the subject space, including without limitation,
reasonable costs of freight elevator operation for moving of furnishings and trade fixtures, security
service,janitorial and cleaning service, rubbish removal service, costs of changing signage, and costs of
changing locks and making new keys (collectively, "Occupancy Costs"), which Occupancy Costs shall
not exceed Five Hundred Dollars ($500.00). Notwithstanding anything to the contrary herein, Landlord
shall not be required to process any request for Landlord's consent to an assignment or subletting until
Tenant has paid to Landlord Five Hundred Dollars ($500.00), or Landlord's estimate of the Processing
Costs and the Occupancy Costs,whichever is greater.
(f) Consideration to Landlord. In the event of any assignment or sublease requiring
Landlord's consent, Landlord shall be entitled to receive, as Additional Rent, one-half (1/2) of any
consideration, including without limitation, payment for leasehold improvements owned by Landlord, paid
by the assignee or subtenant for the assignment or sublease and, in the case of sublease, the excess of
the amount of rent paid for the sublet space by the subtenant over the total amount of Minimum Monthly
Rent under Section 5 and Additional Rent under Sections 7 and 9. Upon Landlord's request, Tenant shall
assign to Landlord all amounts to be paid to Tenant by the assignee or subtenant and shall direct such
assignee or subtenant to pay the same directly to Landlord. If there is more than one sublease under this
Lease, the amounts (if any) to be paid by Tenant to Landlord pursuant to the preceding sentence shall be
separately calculated for each sublease and amounts due Landlord with regard to any one sublease may
not be offset against rental and other consideration pertaining due under any other sublease.
.(g) Procedures. If Tenant desires to assign this Lease or any interest therein or sublet all or part
of the Premises, Tenant shall give Landlord written notice thereof designating the space proposed to be
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sublet and the terms proposed. If the proposed sublease covers the entire Premises and if the term of
the proposed sublease (including any renewal terms) will expire during the final six (6) months of the
Term (or if Tenant has exercised a renewal option, if any, then during the final six (6) months of the
subject renewal period), then Landlord shall have the prior right and option (to be exercised by written
notice to Tenant given within fifteen (15) days after receipt of Tenant's notice) (i) to terminate this Lease,
or(ii) to approve Tenant's proposal to sublet conditional upon Landlord's subsequent written approval of
the specific sublease obtained by Tenant and the specific subtenant named therein. If Landlord exercises
its option described in (ii) above, Tenant shall submit to Landlord for Landlord's written approval Tenant's
proposed sublease agreement (in which the proposed subtenant shall be named) together with a current
reviewed or audited financial statement prepared by a certified public accountant for such proposed
subtenant and a credit report on such proposed subtenant prepared by a recognized credit reporting
agency. If Landlord fails to exercise its option to terminate this Lease, this shall not be construed as or
constitute a waiver of any of the provisions of this Section. If Landlord exercises its option to terminate
this Lease, Landlord shall not have any liability for any real estate brokerage commission(s) or with
respect to any of the costs and expenses that Tenant may have incurred in connection with its proposed
subletting, and Tenant agrees to hold Landlord harmless from and against any and all claims (including.
without limitation, claims for commissions) arising from such proposed subletting. Landlord's foregoing
rights and options shall continue throughout the Term. For purposes of this Section, a proposed
assignment of this Lease in whole or in part shall be deemed a proposed subletting of such space.
(h) Documentation. No permitted subletting by Tenant shall be effective until there has been
delivered to Landlord a counterpart of the sublease in which the subtenant agrees to be and remain
jointly and severally liable with Tenant for the payment of Rent pertaining to the sublet space and for the
performance of all of the terms and provisions of this Lease; provided, however, that the subtenant shall
be liable to Landlord for rent only in the amount set forth in the sublease. No permitted assignment shall
be effective unless and until there has been delivered to Landlord a counterpart of the assignment in
which the assignee assumes all of Tenant's obligations under this Lease arising on or after the date of
the assignment. The failure or refusal of a subtenant or assignee to execute any such instrument shall
not release or discharge the subtenant or assignee from its liability as set forth above.
(i) No Merger. Without limiting any of the provisions of this Section, if Tenant has entered into
any subleases of any portion of the Premises, the voluntary or other surrender of this Lease by Tenant,
or a mutual cancellation by Landlord and Tenant, shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or, at the option of Landlord, operate as
an assignment to Landlord of any or all such subleases or subtenancies.
26. Default. The occurrence of any of the following shall constitute a default by Tenant under this
Lease:
(a) Failure to Pay Rent. Failure to pay Rent when due, if the failure continues for a period of
ten (10) days after notice of such default has been given by Landlord to Tenant.
(b) Failure to Comply with Rules and Regulations. Failure to comply with the Rules and
Regulations, if the failure continues for a period of twenty-four (24) hours after notice of such default is
given by Landlord to Tenant. If the failure to comply cannot reasonably be cured within twenty-four (24)
hours, then Tenant shall not be in default under this Lease if Tenant commences to cure the failure to
comply within twenty-four (24) hours and diligently and in good faith continues to cure the failure to
comply.
(c) Other Defaults. Failure to perform any other provision of this Lease, if the failure to perform
is not cured within thirty (30) days after notice of such default has been given by Landlord to Tenant. If
the default cannot reasonably be cured within thirty (30) days, then Tenant shall not be in default under
this Lease if Tenant commences to cure the default within thirty (30) days and diligently and in good faith
continues to cure the default.
(d) Appointment of Trustee or Receiver. The appointment of a trustee or receiver to take
possession of substantially all of the Tenant's assets located at the Premises or of Tenant's interest in
this Lease, where possession is not restored to Tenant within sixty (60) days; or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such seizure is not discharged within sixty (60)days.
27. Remedies. If Tenant commits a default, Landlord shall have the following alternative remedies.,
which are in addition to any remedies now or later allowed by law:
(a) Maintain Lease in Force. Maintain this Lease in full force and effect and recover the Rent
and other monetary charges as they become due, without terminating Tenant's right to possession,
irrespective of whether Tenant shall have abandoned the Premises. If Landlord elects to not terminate
the Lease, Landlord shall have the right to attempt to re-let the Premises at such rent and upon such
conditions and for such a term, and to do all acts necessary to maintain or preserve the Premises as
Landlord deems reasonable and necessary without being deemed to have elected to terminate the Lease
including removal of all persons and property from the Premises; such property may be removed and
stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. In the event any
such re-letting occurs, this Lease shall terminate automatically upon the new Tenant taking possession of
the Premises. Notwithstanding that Landlord fails to elect to terminate the Lease initially, Landlord at any
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time during the term of this Lease may elect to terminate this Lease by virtue of such previous default of
Tenant.
(b) Terminate Lease. Terminate Tenant's right to possession by any lawful means, in which
case this Lease shall terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. In such event Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default Including without limitation thereto, the following: (i) The worth at
the time of award of any unpaid Rent which had been earned at the time of such termination; plus (ii) the
worth at the time of award of the amount by which the unpaid 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 (iii) the worth at the time of award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds the amount of such rental loss that is
proved could be reasonably avoided; plus (iv) 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, including without limitation, any
costs or expenses incurred by Landlord in (A) retaking possession of the Premises, including reasonable
attorney fees therefor, (B) maintaining or preserving the Premises after such default, (C) preparing the
Premises for reletting to a new tenant, including commercially reasonable repairs or necessary
alterations to the Premises for such reletting, (D) leasing commissions incident to reletting to a new
tenant, and (E) any other costs necessary or appropriate to relet the Premises; plus (v) 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 state law. The amounts described in clauses (C) and (D) shall be amortized over the
term of the new tenant's lease, and Tenant shall only be liable to Landlord for the portion of such
amounts attributable to the period prior to the Expiration Date of this Lease set forth in Section 1. Upon
any such re-entry Landlord shall have the right to make any reasonable repairs, alterations or
modifications to the Premises, which Landlord in its sole discretion deems reasonable and necessary. As
used in Subsection 27(b)(i)the "worth at the time of award" is computed by allowing interest at the rate of
fifteen percent (15%) per year from the date of default. As used in Subsections 27(b)(ii) and 27(b)(iii) the
"worth at the time of award" is computed by discounting such amounts at the discount rate of eight
percent (8%) per year.
28. Bankruptcy.
(a) Assumption of Lease. If Tenant becomes a Debtor under Chapter 7 of the Bankruptcy
Code ("Code") or a petition for reorganization or adjustment of debts is filed concerning Tenant under
Chapters 11 or 13 of the Code, or a proceeding is filed under Chapter 7 of the Code and is transferred to
Chapters 11 or 13 of the Code, the Trustee or Tenant, as Debtor and as Debtor-In-Possession, may not
elect to assume this Lease unless, at the time of such assumption, the Trustee or Tenant has:
(i) Cured all defaults under the Lease and paid all sums due and owing under the Lease
or provided Landlord with "Adequate Assurance" (as defined below) that: (i)within ten (10) days from the
date of such assumption, the Trustee or Tenant will completely pay all sums due and owing under this
Lease and compensate Landlord for any actual pecuniary loss resulting from any existing default or
breach of this Lease, including without limitation, Landlord's reasonable costs, expenses, accrued
interest, and attorneys' fees incurred as a result of the default or breach; (ii) within twenty (20) days from
the date of such assumption, the Trustee or Tenant will cure all non-monetary defaults and breaches
under this Lease, or, if the nature of such non-monetary defaults is such that more than twenty (20) days
are reasonably required for such cure, that the Trustee or Tenant will commence to cure such non-
monetary defaults within twenty (20) days and thereafter diligently prosecute such cure to completion;
and (iii)the assumption will be subject to all of the provisions of this Lease.
(ii) For purposes of this Section, Landlord and Tenant acknowledge that, in the context of
a bankruptcy proceeding involving Tenant, at a minimum, "Adequate Assurance" shall mean: (i) the
Trustee or Tenant has and will continue to have sufficient unencumbered assets after the payment of all
secured obligations and administrative expenses to assure Landlord that the Trustee or Tenant will have
sufficient funds to fulfill the obligations of Tenant under this Lease; (ii) the Bankruptcy Court shall have
entered an Order segregating sufficient cash payable to Landlord and/or the Trustee or Tenant shall
have granted a valid and perfected first lien and security interest and/or mortgage in or on property of
Trustee or Tenant acceptable as to value and kind to Landlord, to secure to Landlord the obligation of the
Trustee or Tenant to cure the monetary and/or non-monetary defaults and breaches under this Lease
within the time periods set forth above; and (iii)the Trustee or Tenant, at the very minimum, shall deposit
a sum equal to two (2) month's Minimum Monthly Rent to be held by Landlord (without any allowance for
interest thereon)to secure Tenant's future performance under the Lease.
(b) Assignment of Lease. If the Trustee or Tenant has assumed the Lease pursuant to the
provisions of this Section for the purpose of assigning Tenant's interest hereunder to any other person or,
entity, such interest may be assigned only after the Trustee, Tenant or the proposed assignee have
complied with all of the terms, covenants and conditions of this Lease, including, without limitation, those
with respect to Additional Rent. Landlord and Tenant acknowledge that such terms, covenants and
conditions are commercially reasonable in the context of a bankruptcy proceeding of Tenant. Any person
or entity to which this Lease is assigned pursuant to the provisions of the Code shall be deemed without
further act or deed to have assumed all of the obligations arising under this Lease on and after the date
of such assignment. Any such assignee shall upon request execute and deliver to Landlord an instrument
confirming such assignment.
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(c) Adequate Protection. Upon the filing of a petition by or against Tenant under the Code,
Tenant, as Debtor and as Debtor-In-Possession, and any Trustee who may be appointed agree to
adequately protect Landlord as follows: (i) to perform each and every obligation of Tenant under this
Lease until such time as this Lease is either rejected or assumed by Order of the Bankruptcy Court; (ii) to
pay all monetary obligations required under this Lease, including without limitation, the payment of
Minimum Monthly Rent, Tenant's Share of Real Property Taxes, Tenant's Share of Operating Costs and
any other sums payable by Tenant to Landlord under this Lease which is considered reasonable
compensation for the use and occupancy of the Premises; (iii) provide Landlord a minimum of thirty (30)
days prior written notice, unless a shorter period is agreed to in writing by the parties, of any proceeding
relating to any assumption of this Lease or any intent to abandon the Premises, which abandonment
shall be deemed a rejection of this Lease; and (iv) to perform to the benefit of Landlord as otherwise
required under the Code. The failure of Tenant to comply with the above shall result in an automatic
rejection of this Lease.
29. Limitation of Actions. Any claim, demand, right or defense of any kind by Tenant which is based
upon or arises in connection with this Lease or the negotiations prior to its execution, shall be barred
unless Tenant commences an action thereon, or interposes in a legal proceeding a defense by reason
thereof,within one (1) year after the date Tenant actually becomes aware of the act or omission on which
such claim, demand, right or defense is based.
30. Limitation on Landlord's Liability. Anything in this Lease to the contrary notwithstanding,
covenants, undertakings and agreements herein made on the part of Landlord are made and intended
not as personal covenants, undertakings and agreements or for the purpose of binding Landlord
personally or the assets of Landlord except Landlord's interest in the Property, but are made and
intended for the purpose of binding only the Landlord's interest in the Property. No personal liability or
personal responsibility is assumed by, nor shall at any time be asserted or enforceable against Landlord
or its partners and their respective heirs, legal representatives, successors and assigns on account of this
Lease or on account of any covenant, undertaking or agreement of Landlord contained in this Lease.
31. Signs. Tenant shall not have the right to place, construct or maintain any sign, advertisement,
awning, banner or other exterior decoration without Landlord's consent. Any sign that Tenant has
Landlord's consent to place, construct and maintain shall comply with all laws, and Tenant shall obtain
any approval required by such laws. Landlord makes no representation with respect to Tenant's ability to
obtain such approval.
32. Landlord's Right to Enter the Premises. Landlord and its authorized representatives shall have
the right to enter the Premises at reasonable times and upon reasonable prior notice of at least twenty-
four (24) hours (except in an emergency when no such notice shall be required) for any of the following
purposes: (i) to determine whether the Premises are in good condition and whether Tenant is complying
with its obligations under this Lease, (ii) to do any maintenance; to make any restoration to the Premises
or the Building that Landlord has the right or the obligation to perform, and to make any improvements to
the Premises or the Building that Landlord deems necessary, (iii) to serve, post or keep posted any
notices required or allowed under the provisions of this Lease, (iv) to post any ordinary "For Sale" signs
at any time during the Term and to post any ordinary"For Lease"signs during the last ninety (90) days of
the Term, and (v) to show the Premises to prospective brokers, agents, purchasers, tenants or lenders,
at any time during the Term.
Landlord shall not be liable in any manner for any inconvenience, annoyance, disturbance, loss
of business, nuisance, or other damage arising out of Landlord's entry on the Premises as provided in
this Section, except damage resulting from the grossly negligent or willful acts of Landlord or its
authorized representatives. Tenant shall not be entitled to an abatement or reduction of Rent if Landlord
reasonably exercises any right reserved in this Section. Landlord shall conduct its activities on the
Premises as allowed in this Section in a reasonable manner so as to cause minimal inconvenience,
annoyance or disturbance to Tenant.
33. Subordination. This Lease is and shall be prior to any mortgage recorded after the date of this
Lease affecting the Property. If, however, a lender requires that this Lease be subordinate to any
mortgage, this Lease shall be subordinate to that mortgage if Landlord first obtains from the lender a
written agreement that provides substantially the following:
"As long as Tenant performs its obligations under this Lease, no foreclosure of,
deed given in lieu of foreclosure of, or sale under the mortgage, and no steps or
procedures taken under the mortgage, shall affect Tenant's rights under this Lease. "
Tenant shall attorn to any purchaser at any foreclosure sale, or to any grantee or transfereo?
designated in any deed given in lieu of foreclosure. Tenant shall execute the written agreement and any
other documents required by the lender to accomplish the purposes of this Section.
34. Right to Estoppel Certificates. Tenant, within ten (10) business days after notice from Landlord,
shall execute and deliver to Landlord, in recordable form, a certificate stating that this Lease is
unmodified and in full force and effect, or in full force and effect as modified and stating the
modifications. The certificate shall also state the amount of Minimum Monthly Rent, the dates to which
Rent has been paid in advance, and the amount of any Prepaid Rent or Security Deposit and such other
matters as Landlord may reasonably request. Failure to deliver the certificate within such ten (10)
business day period shall be conclusive upon Tenant for the benefit of Landlord and any successor to
15
Landlord, that this Lease is in full force and effect and has not been modified except as may be
represented by Landlord requesting the certificate.
35. Transfer of Landlord's Interest. If Landlord sells or transfers the Property, Landlord, on
consummation of the sale or transfer, shall be released from any liability thereafter accruing under this
Lease if Landlord's successor has assumed in writing, for the benefit of Tenant, Landlord's obligations
under this Lease. If any Security Deposit or Prepaid Rent has been paid by Tenant, Landlord shall
transfer such Security Deposit or Prepaid Rent to Landlord's successor and on such transfer Landlord
shall be discharged from any further liability with respect to such Security Deposit or Prepaid Rent.
36. Attorneys' Fees. If either party shall bring any action for relief against the other party, declaratory
or otherwise, arising out of this Lease, including any action by Landlord for the recovery of Rent or
possession of the Premises, the losing party shall pay the successful party a reasonable sum for-
attorneys'
orattorneys' fees which shall be deemed to have accrued on the commencement of such action and shall
be paid whether or not such action is prosecuted to judgment.
37. Surrender; Holding Over.
(a) Surrender. On expiration or ten (10) days after termination of the Term, Tenant shall
surrender the Premises and all Tenant's improvements and alterations to Landlord broom clean and in
good condition. Tenant shall remove all of its trade fixtures and personal property, which personal
property specifically includes all cabling installed in the Premises by Tenant (unless Tenant has received
consent from Landlord that such cabling may be surrendered with and remain in the Premises), within
the time period stated in this Section. Tenant, at its cost, shall perform all restoration made necessary by,
and repair any damage to the Premises caused by, the removal of its trade fixtures, personal property
and signs to Landlord's reasonable satisfaction within the time period stated in this Section. Landlord
may, at its election, retain or dispose of in any manner any of Tenant's trade fixtures or personal property
that Tenant does not remove from the Premises on expiration or within ten (10) days after termination of
the Term as allowed or required by the provisions of this Lease by giving thirty (30) days notice to
Tenant. Title to any such trade fixtures and personal property that Landlord elects to retain or dispose of
on expiration of such thirty (30) day period shall vest in Landlord. Tenant waives all claims against
Landlord for any damage to Tenant resulting from Landlord's retention or disposition of any such trade
fixtures and personal property. Tenant shall be liable to Landlord for Landlord's reasonable costs for
storing, removing and disposing of Tenant's trade fixtures and personal property. If Tenant fails to
surrender the Premises to Landlord on expiration or ten (10) days after termination of the Term as
required by this Section, Tenant shall pay Landlord Rent in an amount equal to 125% of the Minimum
Monthly Rent applicable for the month immediately prior to the expiration or termination of the Term, or
the amount provided by law, whichever is greater, for the entire time Tenant thus remains in possession
and Tenant shall be liable for, shall indemnify Landlord against and shall hold Landlord harmless from all
damages resulting from Tenant's failure to timely surrender the Premises, including without limitation, (i)
any Rent payable by, or any damages claimed by, any prospective tenant of any part or all of the
Premises, and (ii) Landlord's damages resulting from such prospective tenant rescinding or refusing to
enter into the prospective lease of part or all of the Premises by reason of Tenant's failure to timely
surrender the Premises. If Tenant, without Landlord's prior consent, remains in possession of the
Premises after expiration or termination of the Term, or after the date in any notice given by Landlord to
Tenant terminating this Lease, such possession by Tenant shall be deemed to be a tenancy at sufferance
terminable at any time by either party.
(b) Holding Over with Landlord's Consent. If Tenant, with Landlord's prior consent, remains
in possession of the Premises after expiration or termination of the Term, or after the date in any notice
given by Landlord to Tenant terminating this Lease, such possession by Tenant shall be deemed to be a
month-to-month tenancy terminable by Landlord by a notice given to Tenant at least twenty (20) days
prior to the end of any such monthly period or by Tenant by a notice given to Landlord at least thirty (30)
days prior to the end of any such monthly period. During such month-to-month tenancy, Tenant shall pay
Rent in the amount then agreed to in writing by Landlord and Tenant. All provisions of this Lease, except
those pertaining to term, shall apply to the month-to-month tenancy.
38. Agency Disclosure; Broker.
(a) Agency Disclosure. Martin Smith Inc hereby discloses that it represents the Landlord in this
transaction, and The Andover Company, Inc. hereby discloses that it represents the Tenant in this
Transaction.
(b) Broker. Landlord and Tenant each represent to the other that neither Is represented by any
broker, agent or finder with respect to this Lease in any manner, except the Broker(s). The commission
due to the Broker(s) shall be paid by Landlord pursuant to a separate agreement. Each party agrees to
indemnify and hold the other party harmless from and against any and all liability, costs, damages,
causes of action or other proceedings instituted by any broker, agent or finder, licensed or otherwise,
claiming through, under or by reason of the conduct of the indemnifying party in any manner whatsoever
in connection with this Lease. If Tenant engages a broker, agent or finder to represent Tenant in
connection with any renewal of this Lease, then the commission or any fee of such broker, agent or
finder shall be paid by Tenant.
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39. Interest on Unpaid Rent. In addition to the Late Charge as provided in Section 5(b), Rent not paid
when due shall bear interest from the date due until paid at the rate of fifteen percent (15%) per year, or
the maximum legal rate of interest, whichever is less.
40. Landlord's Option to Relocate Tenant. [Intentionally omitted.]
41. Tenant's Option to Terminate. Provided Tenant is not then In default, Tenant shall have the right,
at its option, to terminate this Lease any time after the fourth (4th) year of the Term (by giving Landlord
prior notice to such effect (the "Termination Notice") not less than twelve (12) months prior to the date of
termination (the "Termination Date") specified in the Termination Notice. On the Termination Date
Tenant shall pay to Landlord by amount equal to the unamortized balance as of the Termination Date of
the Transaction Costs (as hereinafter defined). Th ra saction Costs shall be amortized over the Term,
with interest at the rate of twelve percent (�/o)t I ear. The term "Transaction Costs" shall mean and
include (i) the total cost of the Tenant Improvements made to the Premises in accordance with the
provisions of Exhibit C, and (ii) the real estate commissions payable by Landlord in connection with this
Lease. If the Termination Notice is not so given and received, and/or the Termination Fee is not paid as set V` �
forth herein, and/or the Rent due through the Termination Date is not paid in full prior to the Termination
Date,then this option shall become null and void and this Lease shall continue in full force and effect through
the Expiration Date.
42. Right of First Refusal. Landlord hereby grants Tenant a right of first refusal to lease any space on the
ground level of the Building (excluding those spaces currently used for storage purposes by Landlord) as of the
date of full execution of this Lease) that becomes available for lease on the following terms and conditions.
Any such space available on the ground floor in the Building shall hereinafter be referred to as "the RFR.
Space". If Landlord receives an offer from a third party, or an acceptance to an offer submitted by Landlord to
a third party, to lease all or any part of the RFR Space, and if Landlord has either accepted any such offer
(subject to the terms of this Section 42) or is inclined to accept any such offer, Landlord shall notify Tenant in
writing of all of the material terms of the offer. Tenant shall then have five (5) business days in which to notify
Landlord in writing that it irrevocably elects to lease the space in question on the exact terms offered by the
third party (including the proposed term of the lease but excluding improvements and alterations). If Tenant
fails to deliver to Landlord such written notice within such deadline,Tenant shall be deemed to have waived its
right of first refusal, in which case Landlord shall be free to lease the RFR Space in question to the third party
on terms substantially equivalent to the terms offered to Tenant. If subsequent negotiations with the third party
yield any material changes to the terms offered to Tenant, Landlord shall be required to re-offer the RFR
Space in question to Tenant in the manner provided above,with the exception that Tenant shall be required to
respond within three (3) business days. Notwithstanding the foregoing, however, Tenant's above-described
right of first refusal shall be subject and subordinate to any rights of first refusal, rights of first offer, extension
options or expansion options currently held by any other tenants in the Building.
43. Option to Extend. Landlord hereby grants to Tenant the right, at its option, to extend the Term for
two (2) consecutive periods of five (5) years, each commencing when the prior term expires (each an
"Extended Term") upon each and all of the following terms and conditions:
(a) Tenant gives to Landlord, and Landlord actually receives, at least nine (9) months (but not
more than twelve (12) months) prior to the Expiration Date a written notice (the "Notice of Exercise") of
the exercise of the option to extend the Term, time being of the essence. If the Notice of Exercise is not
so given and received or, if received, Landlord and Tenant cannot agree on the Minimum Monthly Rent
to be paid by Tenant during the Extended Term, as set forth in (d) below, then this option shall
automatically expire and this Lease shall terminate on the Expiration Date.
(b) Tenant is not in default under this Lease either at the time the Notice of Exercise is given and
received or as of the date that the Extended Term would commence.
(c) All of the terms and conditions of this Lease shall apply, except where specifically modified
by this option.
(d) Minimum Monthly Rent during the Extended Term shall be mutually agreed upon between
Tenant and Landlord (taking into consideration Tenant's performance and long-term tenancy) within
ninety (90) days after Tenant gives the Notice of Exercise, and, if not agreed upon within such period, as
it may be extended by mutual agreement of the parties. The Minimum Monthly Rent during the Extended
Term shall in no event be less than the Minimum Monthly Rent paid during the last month of the initial
Term, but shall not exceed ninety percent (90%) of the then current market rent. If the parties agree on
the Minimurn Monthly Rent for the Extended Term within such ninety (90) day period, then they shall
promptly and diligently proceed to execute an Amendment to this Lease stating the Minimum Monthly
Rent payable by Tenant for the Extended Term.
(e) If Landlord and Tenant are unable to mutually agree upon the Minimum Monthly Rent for the
Extended Term within the time specified in (d) above, this option shall become null and void and be of
no further force and effect; and this Lease shall expire on the Expiration Date.
44. Parking. The current parking ratio for the Building is approximately 3.5 parking stalls per 1,000
rentable square feet of space leased. Landlord grants to Tenant and Tenant's employees and invitees, a
non-exclusive license to use parking stalls in the Building parking areas in common with other tenants in
the Building. Tenant shall utilize only those parking spaces located on the east side of the Building that
are adjacent to the entrance to Suite 125. Landlord reserves the right at any time to grant similar non-
exclusive use to other tenants, to promulgate rules and regulations relating to the use of the parking
17
areas, including reasonable restrictions on parking by all tenants and their employees and invitees, to
designate or re-designate specific spaces for the use of any tenants, to make changes in the parking
layout from time to time, and to establish reasonable time limits on parking. Overnight parking is
prohibited, and any vehicle violating this or any other vehicle regulation adopted by Landlord is subject to
removal at the owner's expense.
45. Definitions. As used in this Lease, the following words and phrases, whether or not capitalized,
shall have the following meanings:
(a) "Additional Rent" means pass-throughs of increases in Operating Costs and Taxes, as
defined in this Lease, and other monetary sums to be paid by Tenant to Landlord under the provisions of
this Lease.
(b) "Alteration" means any addition or change to, or modification of, the Premises made by.
Tenant, including without limitation, fixtures, but excluding trade fixtures as defined in this Section.
(c) "Authorized representatives" means any officer, agent, employee, independent contractor or
invitee of either party.
(d) "Award" means all compensation, sums or anything of value awarded, paid or received on a
total or partial condemnation.
(e) "Common Areas" means all areas outside the Premises and within the Building or on the
Land that are provided and designated by Landlord from time to time for the general, non-exclusive use
of Landlord, Tenant and other tenants of the Building and their authorized representatives, including
without limitation, common entrances, lobbies, corridors, stairways and stairwells, elevators, escalators,
public restrooms and other public portions of the Building.
(f) "Condemnation" means the exercise of any governmental power, whether by legal
proceedings or otherwise, by a condemnor and a voluntary sale or transfer by Landlord to any
condemnor, either under threat of condemnation or while legal proceedings for condemnation are
pending.
(g) "Condemnor" means any public or quasi-public authority or entity having the power of
condemnation.
(h) "Damage" means any injury, deterioration, or loss to a person, property, the Premises or the
Building caused by another person's acts or omissions or by Acts of God. Damage includes death.
(i) "Damages" means a monetary compensation or indemnity that can be recovered in the
courts by any person who has suffered damage to his person, property or rights through another's acts or
omissions.
0) "Date of taking" means the date the condemnor has the right to possession of the property
being condemned.
(k) "Encumbrance" means any mortgage, deed of trust or other written security device or
agreement affecting the Premises, and the note or other obligation secured by it, that constitutes security
for the payment of a debt or performance of an obligation.
(1) "Expiration" means the coming to an end of the time specified in the Lease as its duration,
including any extension of the Term.
(m) "Force majeure" means strikes, lockouts, labor disputes, shortages of labor or materials, fire
or other casualty, Acts of God or any other cause beyond the reasonable control of a party.
(n) "Good condition" means the good physical condition of the Premises and each portion of the
Premises, including without limitation, all of the Tenant Improvements, Tenant's alterations, Tenant's
trade fixtures, Tenant's Personal Property, all as defined in this Section, signs, walls, interior partitions,
windows, window coverings, glass, doors, carpeting and resilient flooring, ceiling tiles, plumbing fixtures
and lighting fixtures, all of which shall be in conformity with building standard finishes, ordinary wear and
tear, damage by fire or other casualty and taking by condemnation excepted.
(o) "Hazardous substances" means any industrial waste, toxic waste, chemical contQminant or
other substance considered hazardous, toxic or lethal to persons or property or designated as hazardous,
toxic or lethal to persons or property under any laws, including without limitation, asbestos material or
materials containing asbestos.
(p) "Hold harmless"means to defend and indemnify from all liability, losses, penalties, damages
as defined in this Section, costs, expenses (including without limitation, attorneys' fees), causes of
action, claims or judgments arising out of or related to any damage, as defined in this Section, to any
person or property.
(q) "Law" means any constitution, statute, ordinance, regulation, rule, resolution, judicial
decision, administrative order or other requirement of any federal, state, county, municipal or other
governmental agency or authority having jurisdiction over the parties or the Property, or both, in effect
18
either at the time of execution of this Lease or at any time during the Term, including without limitation,
any regulation or order of a quasi-official entity or body (e.g., board of fire examiners or public utilities)
and any legally effective conditions, covenants or restrictions affecting the Property.
(r) "Lender" means the mortgagee, beneficiary, secured party or other holder of an
encumbrance, as defined in this Section.
(s) "Lien" means a charge imposed on the Premises by someone other than Landlord, by which
the Premises are made security for the performance of an act.
(t) "Maintenance"means repairs, replacement, repainting and cleaning.
(u) "Mortgage" means any deed of trust, mortgage or other written security device or agreement
affecting the Premises, and the note or other obligation secured by it, that constitutes security for the
payment of a debt or performance of an obligation.
(v) "Mortgagee" means the beneficiary under a deed of trust or mortgagee under a mortgage.
(w) "Mortgagor" means the grantor or trustor under a deed of trust or mortgagor under a
mortgage.
(x) "Operating Costs" means all costs of any kind incurred by Landlord in operating, cleaning,
equipping, protecting, lighting, repairing, replacing, heating, air-conditioning, maintaining and insuring the
Property. Operating Costs shall include, without limitation, the following costs: (i) salaries, wages,
bonuses and other compensation (including hospitalization, medical, surgical, retirement plan, pension
plan, union dues, life insurance, including group life insurance, welfare and other fringe benefits, and
vacation, holidays and other paid absence benefits) relating to employees of Landlord or its agents
directly engaged in the operation, repair, or maintenance of the Property; (ii) payroll, social security,
workers' compensation, unemployment and similar taxes with respect to such employees of Landlord or
its authorized representatives, and the cost of providing disability or other benefits imposed by law or
otherwise, with respect to such employees; (iii) uniforms (including the cleaning, replacement and
pressing thereof) provided to such employees; (iv) premiums and other charges incurred by Landlord
with respect to fire, earthquake, other casualty, all risk, rent loss and liability insurance, any other
insurance as is deemed necessary or advisable in the reasonable judgment of Landlord and, after the
Base Year, costs of repairing an insured casualty to the extent of the deductible amount under the
applicable insurance policy; (v)water charges and sewer rents or fees; (vi) license, permit and inspection
fees; (vii) sales, use and excise taxes on goods and services purchased by Landlord in connection with
the operation, maintenance or repair of the Property and Building systems and equipment; (viii)
telephone, facsimile, messenger, express delivery service, postage, stationery supplies and other-
expenses
therexpenses incurred in connection with the operation, management, maintenance, or repair of the
Property; (ix) property management fees (property management fees not to exceed four percent (4%) of
the gross monthly rent received or the minimum management fee which shall be commensurate with
market rate fees in Renton, Washington) and expenses; (x) repairs to and physical maintenance of the
Property, including building systems and appurtenances thereto and normal repair and replacement of
worn-out equipment, facilities and installations, but excluding the replacement of major building systems
(except to the extent provided in (xvi) and (xvii) below); (xi) janitorial, window cleaning, security,
extermination, water treatment, rubbish removal, plumbing and other services and inspection or service
contracts for elevator, electrical, HVAC, mechanical and other building equipment and systems or as
may otherwise be necessary or proper for the operation or maintenance of the Property; (xii) supplies,
tools, materials, and equipment used in connection with the operation, maintenance or repair of the
Property; (xiii) accounting, legal and other professional fees and expenses, except as set forth in
subsection (u) below; (xiv) painting the exterior or the public or common areas of the Building and the
cost of maintaining the sidewalks, landscaping and other common areas of the Property; (xv) all costs
and expenses for electricity, chilled water, air conditioning, water for heating, gas, fuel, steam, heat,
lights, power and other energy related utilities required in connection with the operation, maintenance
and repair of the Property; (xvi) the cost of any improvements which Landlord elects to capitalize made
by Landlord to the Property during the Term in compliance with the requirements of any laws or
regulation or insurance requirement with which the Property was not required to comply during the Base
Year, as reasonably amortized by Landlord, with interest on the unamortized balance at the rate of
twelve percent (12%) per year, or the maximum legal rate of interest, whichever is less; (xvii) the cost of
any improvements which Landlord elects to capitalize made by Landlord to the Property during the term
of this Lease for the protection of the health and safety of the occupants of the Property or that are
intended to reduce other Operating Costs, as reasonably amortized by Landlord, with interest on the
unamortized balance at the rate of twelve percent (12%) per year, or the maximum legal rate Of interest,
whichever is less; (xviii) a reasonable reserve for repair or replacement of equipment used in the
maintenance or operation of the Property; (xix) the cost of furniture, draperies, carpeting, landscaping
and other customary and ordinary items of personal property (excluding paintings, sculptures and other
works of art) provided by Landlord for use in common areas of the Building or in the Building office (to
the extent that such Building office is dedicated to the operation and management of the Property), such
costs to be amortized over the useful life thereof; (xx) Building office rent or rental value; and (xxi) all
other costs which, in accordance with generally sound accounting and management principles used by
Landlord, as applied to the maintenance and operation of office and/or retail buildings, are properly
chargeable to the operation and maintenance of the Property.
Notwithstanding anything to the contrary, Operating Costs shall not include the following: (a)
depreciation on the Building; (b) debt service; (c) capital improvements, except as otherwise provided in
19
clauses (xvi) and (xvii) above; (d) rental under any ground or underlying leases; (e) Real Property Taxes;
(f) attorneys' fees and expenses incurred in connection with lease negotiations with prospective tenants,
or default or enforcement proceedings with respect to defaulting tenants; (g) the cost of tenant
improvements; (h) advertising expenses; (i) real estate broker's or other leasing commissions; costs
incurred because of Landlord's negligence or breach by Landlord of any legal obligation (including any
obligation of Landlord under any lease of space in the Complex; Q) costs incurred in advertising or
promoting the Building for any purpose, including (without limitation) sale or lease of any part of the
Building; (k) costs, fines or penalties incurred due to violation by Landlord of any applicable law; (1)
wages, salaries or other compensation or costs incurred with respect to (1) any managerial or executive
employees or agents of Landlord in positions higher than property manager for the purpose of managing
Landlord's interest in the Building, unless allocated to the Building based on the amount of time actually
spent on matters relating to the day to day operation and management of the Building, or(2) any persons
employed in commercial concessions operated by Landlord; (m) repairs or replacements to the extent.
that the cost of the same is recoverable by the Landlord pursuant to original construction warranties or-
insurance
rinsurance maintained or required to be maintained by landlord; (n) interest on debt or capital retirement
of debt, and costs of capital improvements, unless amortized, except as expressly provided above; (o)
the cost of any capital addition (i.e., an expansion to the Complex which Landlord will seek to lease to
third parties); (p) expenses for which the Landlord is or will be reimbursed by another source (excluding
tenant reimbursement for Operating Costs) including repair or replacement of any item covered by
warranty; (o) expenses for the defense of the Landlord's title to the Complex, Premises or the Building,
(p) charitable or political contributions; (q) costs of improving or renovating space for a tenant or space
vacated by a tenant; (r) any capital costs necessitated by condemnation, fire, windstorm, or other insured
or uninsured casualty or hazard, except that Operating Costs shall include the amount of any deductible
incurred by Landlord; (s) any other amounts as a result of Landlord's violation or failure to comply with
any governmental regulations and rules or any court order, decree or judgement; (t) attorneys' fees,
accounting fees and expenditures incurred in connection with negotiations, disputes and claims of other-
tenants
thertenants or occupants of the Building or with other third parties (unless relating to Operating Costs or
Property Tax issues with parties that are not tenants of space in the Complex and relating to the
Complex, Building, Premises or Common Area); and (u) replacements of the roof structure, floor
structure, exterior walls and foundations of a capital nature. Tenant agrees that routine maintenance or
repair costs incurred in connection with repairing and maintaining the roof structure, floor structure,
exterior walls and foundation of the Building shall be considered Operating Costs.
(y) "Parties" means Landlord and Tenant.
(z) "Party" means Landlord or Tenant.
(aa) "Person" means one or more human beings, or legal entities or other artificial persons,
including without limitation, partnerships, corporations, trusts, estates, associations and any combination
of human beings and legal entities.
(bb) "Property" means the Premises, Building and Land.
(cc) "Provision" means any term, agreement, covenant, condition, clause, qualification,
restriction, reservation, or other stipulation in the Lease that defines or otherwise controls, establishes,.or
limits the performance required or permitted by either party.
(dd) "Real Property Taxes" means any form of tax, assessment, general assessment, special
assessment, lien, levy, bond obligation, license fee, license tax, tax or excise on rent, or any other levy,
charge or expense, together with any statutory interest thereon, (individually and collectively, the
"Impositions"), now or hereafter imposed or required by any authority having the direct or indirect power
to tax, including any federal, state, county or city government or any school, agricultural, lighting,
drainage or other improvement or special assessment district thereof, (individually and collectively, the
"Governmental Agencies') on any interest of Landlord or Tenant or both (including any legal or equitable
interest of Landlord or its mortgagee, if any) in the Premises or the Property, including without limitation:
(i) any Impositions upon, allocable to or measured by the area of the Premises or the
Property, or the rental payable hereunder, including without limitation, any gross income tax or excise tax
levied by any Governmental Agencies with respect to the receipt of such rental; or
(ii) any Impositions upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair or use or occupancy by Tenant of the Premises or any
portion thereof; or
(iii) any Impositions upon or with respect to the building equipment and personal property
used in connection with the operation and maintenance of the Property or upon or with respect to the
furniture, fixtures and decorations in the common areas of the Property.
(iv) any Impositions upon this Lease or this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises; or
(v) any Impositions by Governmental Agencies (whether or not such Impositions
constitute tax receipts) in substitution, partially or totally, of any Impositions now or previously included
within the definition of real property taxes, including those calculated to increase tax increments to
Governmental Agencies and to pay for such services as fire protection, water drainage, street, sidewalk
20
./
and road maintenance, refuse removal or other governmental services formerly provided without charge
to property owners or occupants; or
(vi) any and all costs, including without limitation, the fees of attorneys, tax consultants
and experts, incurred by Landlord should Landlord elect to negotiate or contest the amount of such real
property taxes in formal or informal proceedings before the Governmental Agency imposing such real
property taxes; provided, however, that real property taxes shall in no event include Landlord's general
income, inheritance, estate, gift or franchise taxes.
(ee) "Rent" means Minimum Monthly Rent, as adjusted from time to time under this Lease,
Additional Rent, Prepaid Rent, Security Deposit, all as defined in this Section, payments of Tenant's
Share of increases in Real Property Taxes and Operating Costs, insurance, utilities and other charges
payable by Tenant to Landlord.
(ff) "Rentable square feet of space" as to the Premises or the Building, as the case may be,
means the number of usable square feet of space times the applicable R/U Ratio(s) as defined in this
Section.
(gg) "Restoration" means the reconstruction, rebuilding, rehabilitation and repairs that are
necessary to return damaged portions of the Premises and the Building to substantially the same
physical condition as they were in immediately before the damage.
(hh) "R/U Ratio" means the rentable area of a floor of the Building divided by the usable area of
such floor, both of which shall be computed in accordance with American National Standard Z65.1-1996
Method of Measuring Floor Space in Office Buildings as published by the Building Owners and Managers
Association, as amended from time to time.
(ii) "Substantially complete" or "substantially completed" or "substantial completion" means the
completion of Landlord's construction obligation, subject to completion or correction of"punch list" items,
that is, minor items of incomplete or defective work or materials or mechanical maladjustments that are
of such a nature that they do not materially interfere with or impair Tenant's use of the Premises for the
Permitted Use.
0j) "Successor" means assignee, transferee, personal representative, heir, or other person or
entity succeeding lawfully, and pursuant to the provisions of this Lease, to the rights or obligations of
either party.
(kk) "Tenant Improvements"means(i)the improvements and alterations set forth In Exhibit C, (ii)
window coverings, lighting fixtures, plumbing fixtures, cabinetry and other fixtures installed by either
Landlord or Tenant at any time during the Term, and (iii) any improvements and alterations of the
Premises made for Tenant by Landlord at any time during the Term.
(II) "Tenant's personal property" means Tenant's equipment, furniture, and movable property
(including cabling) placed in the Premises by Tenant.
(mm) "Tenant's trade fixtures" means any property attached to the Premises by Tenant.
(nn) "Termination" means the ending of the Term for any reason before expiration, as defined in
this Section.
(oo) "Work" means the construction of any improvements or alterations or the performance of
any repairs done by Tenant or caused to be done by Tenant on the Premises as permitted by this Lease.
46. Miscellaneous Provisions.
(a) Entire Agreement. This Lease sets forth the entire agreement of the parties as to the
subject matter hereof and supersedes all prior discussions and understandings between them. This
Lease may not be amended or rescinded in any manner except by an instrument in writing signed by a
duly authorized officer or representative of each party hereto.
(b) Governing Law. This Lease shall be governed by, and construed and enforced in
accordance with, the laws of the State of Washington.
(c) Severability. Should any of the provisions of this Lease be found to be invalid; illegal or
unenforceable by any court of competent jurisdiction, such provision shall be stricken and the remainder
of this Lease shall nonetheless remain in full force and effect unless striking such provision shall
materially alter the intention of the parties.
(d) Jurisdiction. In the event any action is brought to enforce any of the provisions of this
Lease, the parties agree to be subject to exclusive in persona m jurisdiction in the Superior Court in and
for King County Washington or in the United States District Court for the Western District of Washington
and agree that in any such action venue shall lie exclusively at Seattle, Washington.
(e) Waiver. No waiver of any right under this Lease shall be effective unless contained in a
writing signed by a duly authorized officer or representative of the party sought to be charged with the
21
waiver and no waiver of any right arising from any breach or failure to perform shall be deemed to be a
waiver of any future right or of any other right arising under this Lease.
(f) Captions. Section captions contained in this Lease are included for convenience only and
form no part of the agreement between the parties.
(g) Notices. All notices or requests required or permitted under this Lease shall be in writing. If
given by Landlord such notices or requests may be personally delivered, delivered by a reputable
express delivery service such as Federal Express or DHL, or sent by certified mail, return receipt
requested, postage prepaid. If given by Tenant such notices or requests shall be sent by certified mail,
return receipt requested, postage prepaid. Such notices or requests shall be deemed given when so
delivered or mailed, irrespective of whether such notice or request is actually received by the addressee.
All notices or requests to Landlord shall be sent to Landlord at Landlord's Address for Notice and all
notices or requests to Tenant shall be sent to Tenant at Tenant's Address for Notice. Either party may
change the address to which notices shall be sent by notice to the other party.
(h) Binding Effect. Subject to the provisions of Section 25 captioned ."Assignment and
Subletting", this Lease shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. No permitted assignment of this Lease or Tenant's rights hereunder
shall be effective against Landlord unless and until an executed counterpart of the instrument of
assignment shall have been delivered to Landlord and Landlord shall have been furnished with the name
and address of the assignee. The tern "Tenant"shall be deemed to include the assignee under any such
permitted assignment.
(i) Effectiveness. This Lease shall not be binding or effective until properly executed and
delivered by Landlord and Tenant.
0) Gender and Number. As used in this Lease, the masculine shall include the feminine and
neuter, the feminine shall include the masculine and neuter, the neuter shall include the masculine and
feminine, the singular shall include the plural and the plural shall include the singular, as the context may
require.
(k) Time of the Essence. Time is of the essence in the performance of all covenants and
conditions in this Lease for which time is a factor.
Dated the date first above written.
Landlord: Tenant:
The City of Renton, Washington, a Washington King County Sexual Assault Resource Center, a
municipal oration registered charitable organization in Washington
By: vy�.t,/� By: PAL -
Jesse Tanner
Title: Mayor Title: Lt !,�_
Date executed: Date executed: / o
ATTEST By: �7d By:
Mar y . Petersen
tyClTitle: Cik
Title: _
Date executed: /l—�/-0, Date executed: _
This Lease has been prepared for submission to you and your attorney. Martin Smith Inc is not
authorized to give legal or tax advice. Neither Landlord nor Martin Smith Inc makes any representations
or recommendations as to the legal sufficiency, legal effect or tax consequences of this document or any
transaction relating thereto. These are questions for your attorney with whom you should consult before
signing the document to determine whether your legal rights are adequately protected. '
22
• +�/ `may
STATE OF A)"41�7 Vr;,,
)ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that Max La_"f.SA15M is the person
who appeared before me, and said person acknowledged thathe/she signed this instrum nZ�th stated that
he/she was authorized to execute the instr ment, and acknowledged it as the(title) t %
of(entity) L "el!/ -'�C/,L�t/ _,diP� /� �- to be the free and
voluntary act of duch party for the uses aInd purposes mentioned in the instrument.
Witness my han¢ '�' ` ` ,pal this ' day �� 20 .
���`�QQ•��j M• Ekp•.O,Q�i�
•�OTARy•
4 �
_ * : ��� : * Notary u
: (Print Name) u o9e
s �PUB1-�G a.�O% Residing at
+'•,eeq ft
�NE 8;Z� C�;0 My Commission Expires: G
OF W ,
STATE OF
)ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that 3eS—ria V1 vie t' �i, 0A IQ rt IUh � TU is the person
who appeared before me, and said person acknowledged that hsign dd this tri ument, on oath s a ed hat
. ' hefshe was,puthorized tq execute the instrument, and acknowledges ii as the(title) (Y10. Or f"
of(entity) a to be the free and
voluntarya,gvC arty for the uses and purposes mentioned in the instrument.
ESE tyF\\%
ne
Wit ��s, iasr ,$r►d' `,seal thisday 1��V� 2001
i
A 0) i 1� Nra�Y Public
l� ' (Print Name) .1 .(� I� WV1 U VI ►'t
tt1 :919-p5 , Residing at
1t1CacH � My Commission Expires: 1 P
STATE OF )
)ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that is the person
who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that:
he/she was authorized to execute the instrument, and acknowledged it as the(title)
of(entity) , a to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.
Witness my hand and official seal this day 20
Notary Public
(Print Name)
Residing at
My Commission Expires:
STATE OF )
)ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that is Ahe person
who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that
he/she was authorized to execute the instrument, and acknowledged it as the (title)
of(entity) , a to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.
Witness my hand and official seal this day 20
Notary Public
(Print Name)
Residing at
My Commission Expires:
23
• 4
EXHIBITA
LEGAL DESCRIPTION
200 Mill Avenue Buildino
THAT PORTION OF HENRY H. TOBIN DONATION LAND CLAIM LYING NORTH OF
CANADIAN & PACIFIC RAILROAD RIGHT OF WAY AND EAST OF PLAT OF TOWN OF
REON; LESS A PORTION BEGINNING AT THE SOUTHWEST CORNER; THENCE
EASTERLY ALONG SOUTH LINE TO THE INTERSECTION WITH COMMERCIAL
WATERWAY#2 RIGHT OF WAY; THENCE NORTHWESTERLY ALONG SAID RIGHT OF
WAY 53.88 FEET; THENCE SOUTH 4211-04'-00" WEST 34.10 FEET; THENCE ON A
CURVE TO THE RIGHT WITH A RADIUS OF 470 FT.-108.58 FEET ON AN ARC;THENCE
SOUTH 630-04'-00" WEST 191.62 FEET; THENCE SOUTH 39.53 FEET TO POINT OF
BEGINNING.
Situated in King County,Washington.
King County Tax Assessor's Account Number: 0000720-0050-08
Initials-
LEGAL DESCRIPTION
EXHIBIT A
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FLOOR PLAN
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Initials:
Suite 125
Approximately 7,722 rentable square feet.
Interior improvements may not be exactly as shown.
FLOOR PLAN
EXHIBIT B
EXHIBIT C
WORK LETTER
This Work Letter is made and entered into this 25th day of October 2001 by and The City of Renton,
Washington, a Washington municipal corporation ("Landlord"), and King County Sexual Assault
Resource Center,a registered charitable organization in Washington("Tenant").
RECITALS: Landlord and Tenant have entered into a Lease dated of even date herewith covering certain
Premises located in the 200 Mill Avenue Building in Renton Washington (the "Lease"). The Lease contemplates
the construction of certain improvements to the Premises. Landlord and Tenant desire to set forth their
agreement as to construction of such improvements in writing and hereby agree as follows:
1. Tenant Improvements. Landlord shall design (in accordance with an initial floor plan to be submitted by
Tenant), construct and pay for the cost of the items of improvement, alteration, and repair to the Premises in
accordance with plans and specifications to be prepared by Landlord and approved by both Landlord and
Tenant (the "Tenant Improvements'. The Tenant Improvements shall be constructed or installed to Building-
standard using Building-standard materials, and colors shall be selected by Tenant, subject to Landlord's prior
written approval. The Tenant Improvements shall include, all in accordance with the approved plans and
specifications, a new entry and door, interior doors, approximately 250 lineal feet of new walls, HVAC and
electrical, ceiling, and painting.
Landlord's representatives shall oversee all aspects of the Tenant Improvements, including without
limitation, space planning, design, construction bidding and construction of the Tenant Improvements. Any cost
increases due to any changes or revisions by Tenant to the approved plan and specifications shall be borne by
Tenant and paid to Landlord prior to the commencement of such changes or revisions.All furniture, fixtures, and
equipment(including, but not limited to, telephones, computers, and telephone and computer cabling) shall be
provided by Tenant at Tenant's sole cost and expense. All other items of improvement, alteration, and repair to
the Premises shall be made at Tenant's sole cost and expense,subject to the provisions of this Lease.
2. Change Orders. Tenant or Landlord, without invalidating this agreement, may order changes in the work
consisting of additions, deletions, or modifications. All such changes in the work shall be authorized by written
change order signed and approved by Landlord,Tenant,and Contractor. Landlord and Tenant shall approve any
and all such change orders within two (2) business days. Neither Landlord, Tenant nor the Contractor shall be
liable to pay for or perform any additions, deletions or modifications unless agreed to in a written change order.
Each such change order shall describe:
(a) The work added,deleted or modified;
(b) The agreed upon adjustment,if any,to the contract sum payable to Contractor;
(c) The agreed upon adjustment, if any, to the date of substantial completion and/or Lease
Commencement Date; and
(d) The date by which Landlord or Tenant must pay Contractor for any added or modified work. Tenant
shall be responsible for the cost of any such change orders requested by Tenant.
3. Prior Agreements.This Work Letter,together with the Lease, contains the entire agreement of the parties
with respect to any matters covered or mentioned in this Work Letter and no prior agreements or understandings
pertaining to any such matter shall be effective for any purpose. No provision of this Work Letter may be
amended or added to except in writing signed by the parties hereto or their respective successors and assigns in
interest. This Work Letter shall not be effective or binding upon any party until fully executed by both parties
hereto.
Dated the date first above written.
Landlord: Tenant:
The City of Renton, Washington, a Washington King County Sexual Assault Resource Center, a
municipal rmoration registered charitable organization in Washington
By: U'. . By:.
Jesse Tanner
Title: Mayor
Date executed: �'o��— Date executed:
ATTEST By: By.
Ma 1 Petersen
Title: City Clerk Title:
Date executed: � ''�� Date executed:
WORK LETTER
EXHIBIT C
EXHIBIT D
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part
of the exterior or in any area visible from the exterior of the Building without the prior written consent of
the Landlord, which consent shall not be unreasonably withheld or delayed. Landlord shall have the right
to remove, at Tenant's expense and without notice, any sign installed or displayed in violation of this
rule. All signs or lettering on doors and walls shall be printed, painted, affixed or inscribed at the expense
of Tenant. At the expiration or termination of Tenant's Lease, Tenant, at Tenant's sole cost and expense,
shall remove all tenant-installed signage and repair and paint any and all damage resulting from
installation and/or removal of said signage.
2. Tenant shall not install any curtains, blinds, shades, screens or hanging plants or other similar
objects attached to or used in connection with any window or door of the Premises except building-
standard drapes approved by Landlord. No awning shall be permitted on any part of the Premises..
Tenant shall not place anything against or near glass partitions or doors or windows which may appear
unsightly from outside the Premises.
3. Tenant shall not obstruct any sidewalks, lobbies, halls, passages, exits, entrances, elevators, or
stairways of the Building. The halls, passages, exits, entrances, lobbies, elevators, and stairways are not
open to the general public. Landlord shall in all cases retain the right to control and prevent access
thereto of all persons whose presence in the judgment of Landlord would be prejudicial to the safety,
character, reputation and interest of the Building and its Tenants; provided that nothing herein contained
shall be construed to prevent such access to persons with whom any Tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal activities. No Tenant and no
employee or invitee of any tenant shall go upon the roof of the Building without Landlord's prior written
consent.
4. The directory of the Building will be provided exclusively for the display of the name and location of
tenants' business only, and Landlord reserves the right to exclude any other names therefrom.
5. All cleaning and janitorial services for the Building and the Premises, unless otherwise provided in
the Lease, shall be provided exclusively through Landlord, and except with the written consent of
Landlord, no person or persons other than those approved by Landlord shall be employed by Tenant or
permitted to enter the Building for the purpose of cleaning the same. Tenant shall not cause any
unnecessary labor by carelessness or indifference to the good order and cleanliness of the Premises.
Landlord shall not in any way be responsible to any tenant for any loss of property on the Premises,
however occurring, or for any damage to any tenant's property by the janitor or any other employee or
any other person.
r. Landlord shall furnish Tenant with appropriate number of keys to each door lock In the Premises
and to the main entrance door of the Building. Landlord may make a reasonable charge for any
additional keys. Tenant shall not make or have made additional keys, and Tenant shall not alter any lock
or install a new additional lock or bolt on any door of its Premises. Tenant, upon termination of its
tenancy, shall deliver to Landlord all keys to all doors which have been furnished to Tenant, and in the
event of loss of any keys so furnished, shall reimburse Landlord for the cost of any new lock(s) required
due to such loss.
7. Tenant shall not install computer cabling, telephone, burglar alarm or similar services without
Landlord's approval for installation of same. Upon termination of Tenant's tenancy, at Landlord's option,
Tenant shall remove any equipment and/or services from the Premises and shall restore the Premises to
its condition prior to such installation.
8. Freight elevator(s), if any, shall be available for use by all tenants in the Building, subject to such
reasonable scheduling as Landlord in its discretion shall deem appropriate. No equipment, materials,
furniture, packages, supplies, merchandise or other property will be received in the Building or carried in
the passenger elevators except between such hours and in such elevators as may be designated by
Landlord.
9. Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot
which such floor was designed to carry and which is allowed by law. Landlord shall have the right to
prescribe the weight, size and position of all equipment, materials, furniture or other property brought into
the Building. Heavy objects shall, if considered necessary by Landlord, stand on such platforms as
determined by Landlord to be necessary to properly distribute the weight of such objects. Business
machines and mechanical equipment belonging to Tenant which cause noise or vibration that may be
transmitted to the structure of the Building or to any space therein or to any tenants in the Building shall
be placed and maintained by Tenant, at Tenant's sole cost and expense, on vibration eliminators or other
devices sufficient to eliminate noise or vibration. Landlord will not be responsible for loss of, or damage
to, any such equipment or other property from any cause, and all damage done to the Building by
maintaining or moving such equipment or other property shall be repaired at the expense of Tenant.
10. Tenant shall not use or keep in the Premises any kerosene, gasoline or inflammable or combustible
fluid or material other than those limited quantities necessary for the operation or maintenance of office
equipment. Tenant shall not use or permit to be used in the Premises any foul or noxious gas or
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EXHIBIT D
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substance, 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 by reason of noise, odors, or vibrations, nor shall Tenant
bring into or keep in or about the Premises any animals, including dogs(except seeing-eye dogs).
11. Tenant shall not use any method of heating or air conditioning other than that supplied by Landlord.
12. Tenant shall not waste electricity, water or air conditioning, and Tenant agrees to cooperate fully
with Landlord to assure the most effective operation of the Building's heating and air-conditioning system
and to comply with any governmental energy-saving rules, laws or regulations, of which Tenant has
actual notice, and shall refrain from attempting to adjust controls. Tenant shall keep corridor and exterior
doors closed and shall close window coverings at the end of each business day.
13. The name of the Building is the 200 Mill Avenue Building. Landlord reserves the right, exercisable
without notice and without liability to Tenant,to change the name of the Building.
14. Landlord reserves the right to exclude from the Building between the hours of 6:00 p.m. and 7:00
a.m. the following day, or such other hours as may be established from time to time by Landlord, and on
Sundays and legal holidays any person, unless that person is known to the person or employee in charge
of the Building and has a pass or is properly identified. Tenant shall be responsible for all persons for
whom it requests passes and shall be liable to Landlord for all acts of such persons. Landlord shall not be
liable for damages for any error with regard to the admission to or exclusion from the Building of any
person. Landlord reserves the right to prevent access to the Building in case of invasion, mob, riot, public;
excitement or other commotion by closing the doors or by other appropriate action.
15. Tenant shall close and lock the doors of its Premises and entirely shut off all water faucets or other
water apparatus, electricity, copiers and other office equipment, including coffee pots, etc., before
Tenant and its employees leave the Premises. Tenant shall be responsible for any damage or injuries
sustained by other tenants or occupants of the Building or by Landlord for noncompliance with this rule.
16. The toilet rooms, toilets, 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 bome by the tenant, or employees or invitees of the tenant,who shall have caused it.
17. Tenant shall not make any room-to-room solicitation of business from other tenants in the Building.
Tenant shall not use the Premises for any business or activity other than that specifically provided for in
Tenant's Lease.
18. Canvassing, soliciting and distribution of handbills or any other written material, and peddling in the
Building are prohibited, and each tenant shall cooperate to prevent some.
19. Tenant shall not Install any radio or television antenna, loudspeaker or other device on the roof or
exterior walls of the Building except as permitted in the Lease. Tenant shall not interfere with radio or
television broadcasting or reception from or in the Building or elsewhere.
20. Landlord reserves the right to direct electricians as to where and how telephone, computer or other
wiring or cabling are to be introduced to the Premises. Tenant shall not cut nor bore holes for wiring or
cabling without Landlord's prior written consent, said consent shall not be unreasonably withheld. Tenant
shall not affix any floor covering to the floor of the Premises in any manner except as approved by
Landlord. Tenant shall repair any damage resulting from noncompliance with this rule.
21. Landlord reserves the right to exclude or expel from the Building any person who, in Landlord's
judgment, is intoxicated or under the influence of alcohol or drugs or who is in violation of any of the
Rules and Regulations of the Building.
22. Tenant shall store all its trash and garbage within its Premises. Tenant shall not place in any trash
box or receptacle any material which cannot be disposed of in the ordinary and customary manner of
trash and garbage disposal. All garbage and refuse disposal shall be made in accordance with directions
issued from time to time by Landlord. All garbage over and above normal (i.e., major-delivery wrappings,
etc.) shall be at Tenant's sole cost and expense. Tenant agrees to cooperate with Landlord in recycling
programs as may be established from time to time by Landlord.
23. The Premises shall not be used for lodging nor for manufacturing of any kind, nor shall the
Premises be used for any improper, immoral or objectionable purpose. No cooking shall be done or
permitted by Tenant on the Premises, except that use by Tenant of Underwriters Laboratory approved
equipment for brewing coffee, tea, hot chocolate and similar beverages, and microwave ovens shall be
permitted; provided that such equipment and use is in accordance with all applicable federal, state,
county and city laws, codes, ordinances, rules and regulations and does not cause objectionable odor.
24. Without the written consent of Landlord, Tenant shall not use the name of the Building in connection
with or in promoting or advertising the business of Tenant except as Tenant's address.
25. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations
established by Landlord or any governmental agency.
26. Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and
pilferage,which includes keeping doors locked and other means of entry to the Premises closed.
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EXHIBIT D
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*4400,27. The requirements of Tenant will be attended to only upon appropriate application to the office of the
Building by an authorized individual. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord, and no employee of Landlord
will admit any person (Tenant or otherwise) to any office of the Building without specific instructions from
Landlord.
28. Tenant and Tenant's employees shall not park vehicles In any parking areas designated by Landlord
as reserved parking areas or as visitor parking areas. Tenant shall not park any vehicles in the Building
parking areas other than automobiles, motorcycles, motor-driven or nonmotor-driven bicycles or four-
wheeled trucks.
29. Tenant and Tenant's delivery personnel shall utilize loading zones and delivery entrances for all
deliveries. Any damage to the Building or Premises resulting from Tenant's deliveries shall be repaired at
the sole cost and expense of the Tenant.
30. Tenant and Tenant's delivery personnel shall not use in any space or in the common areas of the
Building any hand truck except those equipped with rubber tires and side guards or such other material-
handling equipment as Landlord may approve. Tenant shall not bring vehicles of any other kind into the
Building.
31. All moving of furniture or other equipment shall be done so as to have minimal impact on other
tenants'and visitors' use of elevators, common areas, and parking facilities.
32. The Building is a nonsmoking building.
33. Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or
any other tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any
such Rules and Regulations against any or all of the tenants of the Building.
34. These Rules and Regulations are in addition to and shall not be construed to in any way modify or
amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of any
premises in the Building.
35. Landlord reserves the right to make such other and reasonable Rules and Regulations as, in its
judgment, may from time to time be needed for safety and security, for care and cleanliness of the
Building and for the preservation of good order therein. Tenant agrees to abide by all such Rules and
Regulations hereinabove stated and any additional reasonable Rules and Regulations which are
adopted.
36. Tenant shall be responsible for the observance of all of the foregoing Rules and Regulations by
Tenant's employees, agents, clients, customers, invitees and guests.
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EXHIBIT D
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