Exhibit 99.1
COLUMBIA TECH
CENTER
OFFICE LEASE
BY AND BETWEEN
COLUMBIA TECH CENTER,
L.L.C.,
a Washington limited liability
company
AND
NAUTILUS, INC.,
a Washington corporation
Table of
Contents
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1.
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Basic Lease
Terms.
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1
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2.
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Delivery of
Possession and Commencement; Landlord’s Work.
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4
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3.
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Lease Term;
Early Occupancy.
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5
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4.
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Rent
Payment.
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6
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5.
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Security
Deposit.
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6
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6.
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Use of the
Premises; Hazardous Substances.
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6
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7.
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Utilities and
Services.
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10
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8.
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Maintenance and
Repairs.
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11
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9.
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Taxes,
Assessments and Operating Expenses.
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13
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10.
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Parking and
Storage Areas.
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14
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11.
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Tenant’s
Indemnification.
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14
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12.
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Insurance;
Waiver of Subrogation.
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15
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13.
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Property
Damage.
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16
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14.
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Condemnation.
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17
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15.
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Assignment,
Subletting and Other Transfers.
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17
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16.
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Tenant
Default.
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18
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17.
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Landlord
Default.
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19
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18.
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Surrender at
Expiration or Termination.
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19
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19.
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Mortgage or
Sale by Landlord; Estoppel Certificates.
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20
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20.
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Liens.
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21
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21.
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Attorneys Fees;
Waiver of Jury Trial.
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21
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22.
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Limitation on
Liability; Transfer by Landlord.
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21
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23.
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Real Estate
Brokers; Finders.
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22
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24.
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Other.
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22
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25.
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Landlord
Termination Right.
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24
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26.
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Special
Provisions.
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26
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Page i
LEASE
THIS LEASE (this
“Lease”) is made and entered into as of the Reference
Date of Lease (as defined below), by and between COLUMBIA TECH
CENTER, L.L.C., a Washington limited liability company, and
NAUTILUS, INC., a Washington corporation, and is made with
reference to the following facts, intentions and
objectives:
A. Landlord and Tenant are currently
parties to that certain Lease for the entire Building (as defined
below) fully executed as of November 23, 2004 (as may be
amended from time to time, the “Full Building
Lease”).
B. Tenant desires to reduce the
square footage of the premises occupied by Tenant in the Building
and Landlord is willing to so reduce the square footage of the
premises occupied by Tenant, subject to the terms and conditions
set forth in this Lease and Tenant’s termination of the Full
Building Lease under the terms and conditions thereof.
NOW THEREFORE, in consideration of
the foregoing, the receipt of which is acknowledged, and of the
mutual agreement of the parties hereto to the terms and conditions
hereinafter contained, Landlord and Tenant hereby covenant and
agree as follows:
1. Basic Lease
Terms.
1.1. Reference Date of Lease
. June , 2009
1.2. Landlord . COLUMBIA
TECH CENTER, L.L.C. , a Washington limited liability company
(“Landlord”)
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Address for
Payment of Rent:
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Columbia Tech
Center, L.L.C.
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Unit 37 –
ctc550 – nautil01
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P. O. Box 4800
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Portland, OR
97208-4800
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(The unit
number must be listed on a separate line from the PO
Box.)
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Telephone (503)
624-6300
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Facsimile
(503) 624-7755
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Address For
Notices:
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Columbia Tech
Center, L.L.C.
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Attn: Legal
Dept – ctc550 – nautil01
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15350 S.W.
Sequoia Parkway, Suite 300
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Portland, OR
97224
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Telephone (503)
624-6300
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Facsimile
(503) 624-7755
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1.3. Tenant . NAUTILUS,
INC. , a Washington corporation
(“Tenant”)
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Trade Name:
Nautilus
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Address for
Invoices:
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Nautilus,
Inc.
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Attn: Accounts
Payable
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16400 SE
Nautilus Drive
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Vancouver, WA
98683
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Telephone:
360-859-2968
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Email:
ap@nautilus.com
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Address for
Notices:
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Nautilus,
Inc.
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Attn: Wayne
Bolio
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16400 SE
Nautilus Drive
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Vancouver, WA
98683
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Telephone:
(360) 859-2511
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Facsimile:
(360) 694-7755
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Taxpayer ID
Number:
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94-3002667
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Page 1
1.4. Building; Basement . The
approximately 488,808 rentable square foot building shown on
Exhibit A (the “Building”). That portion of
the Building which comprises the basement of the Building shall be
known herein as the “Basement”.
1.5. Premises; Premises Area
. A portion of the Building located at the address commonly known
as 16400 SE Nautilus Drive, Vancouver, WA 98683, as generally shown
on the attached Exhibit A-2 (the
“Premises”) and which includes a depiction of the
points of ingress and egress with respect to the Premises. Subject
to the provisions of Paragraph 2.2 , the Premises shall
consist of approximately 93,099 usable square feet of office space
(the “Premises Area”).
1.6. Outside Area . All areas
and facilities within the Park (as defined below) not appropriated
to the exclusive occupancy of tenants, including all non-reserved
vehicle parking areas, traffic lanes, driveways, sidewalks,
pedestrian walkways, landscaped areas, signs, service delivery
facilities, truck maneuvering areas, trash disposal facilities,
common storage areas, common utility facilities and all other areas
for non-exclusive use (the “Outside Area”). Landlord
reserves the right to change, reconfigure or rearrange the Outside
Area and to do such other acts in and to the Outside Area as
Landlord deems necessary or desirable.
1.7. Park . The project in
which the Premises and Building are located (and which includes the
Premises and Building) is commonly known as Columbia Tech Center
(the “Park”), as more particularly shown on
Exhibit A-1 attached hereto and incorporated
herein.
1.8. Permitted Use . Tenant
shall use the Premises only for (i) general office purposes,
call center, storage, retail sales and displays, and such other
lawful uses as are incidental to and required to support the
general office use of the Premises by Tenant, such as computer
operations, telecommunications and employee support areas (i.e.,
training facilities, lunchrooms and vending machines) for the
exclusive use of Tenant and its employees, (ii) research and
development functions provided that only the portion of the
Premises located in the Basement is used for such research and
development functions, and (iii) reliability testing and
engineering, machine shop, shipping and receiving of items not
typically received in a general office use, prototyping, product
development, and electrical engineering provided that only the
portion of the Premises located in the Basement is used for any
uses listed in this clause (iii) (as used in this
clause (iii), the “Basement Uses”); the respective
uses set forth herein shall be known singularly and collectively as
the “Permitted Use”. Notwithstanding the foregoing,
employees performing various functions may use any portion of the
Premises so long as the locational limitations set forth above
regarding the Permitted Use are fulfilled.
1.9. Lease Term .
Commencement Date:
July 3, 2009 provided that Tenant has complied with all
applicable provisions of the Full Building Lease including, without
limitation, timely payment to Landlord of the Termination Fee equal
to One Million Nine Hundred Thousand and No/100 Dollars
($1,900,000.00) (the “Commencement Date”). If the
conditions in the immediately preceding sentence have not been met
as of July 3, 2009, the Commencement Date shall be that
day immediately following the Cancellation Date, as such term is
used and defined in the Full Building Lease. Effective upon payment
of the Termination Fee, the Full Building Lease shall be deemed
terminated as provided in that certain Lease Termination Agreement
by and between Landlord and Tenant dated as of the same date as
this Lease.
Expiration Date: The last day of the
sixtieth (60 th )
full calendar month following the month in which the Commencement
Date occurs (the “Expiration Date”), subject to the
provisions of Paragraph 26.1 . The period of time
commencing on the Commencement Date and expiring on the original
Expiration Date as set forth above shall be known as the
“Initial Term”.
Number of Full Calendar Months:
Approximately sixty (60); if the Commencement Date does not
occur on the first day of a month, the Lease Term shall include
that portion of the month in which the Commencement Date occurs
which follows the Commencement Date (the “First Partial
Month”).
Page 2
Early Lease Period: The period of
the Lease Term commencing on the Commencement Date and continuing
through ninety (90) days thereafter, during which Early Lease
Period the provisions of Paragraph 3.2 of this Lease
shall control over any conflicting provisions in this Lease or
otherwise.
1.10. Base Rent . Subject to
Paragraphs 3, 4.1 and 26.1 , monthly payments of base
rent (“Base Rent”) during the Initial Term and (if
applicable) the Renewal Term shall be according to the following
schedule (monthly payments of Base Rent during the Early Lease
Period shall be as set forth in Paragraph 3.2
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Period of Time
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Annual Full Service Base
Rent
per usable square foot
(“psf”)
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Total Monthly
Base Rent
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Initial Term following expiration of Early
Lease Period:
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$9/psf per year for portion of Premises in
Basement
$16/psf per year for remaining
portion of Premises
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$
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112,855.58
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Renewal Term:
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$9.90/psf per year for portion of Premises in
Basement
$17.60/psf per year for remaining
portion of Premises
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$
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124,141.14
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If the Commencement Date does not
occur on the first day of a month, Base Rent for the First Partial
Month shall be equal to the initial monthly Base Rent set forth in
the chart above, prorated to reflect the number of days during the
First Partial Month.
1.11. Security Deposit . One
Hundred Twelve Thousand Eight Hundred Fifty-Five and 58/100 Dollars
($112,855.58) (the “Security Deposit”).
1.12. Tenant’s
Proportionate Share(s) . Subject to Paragraphs 3.2 and
9.2 , (i) Tenant’s initial proportionate share for
Taxes (as defined in Paragraph 9.3 ) is 22.86%, and
(ii) Tenant’s initial proportionate share for Operating
Expenses (as defined in Paragraph 9.4 ) is 22.86%.
Tenant acknowledges and agrees that a 20.03% load factor (the
“Load Factor”) has been applied (and will be applied)
to convert the usable square footage of the Premises to
rentable square footage for purposes of calculating Tenant’s
proportionate share(s) set forth herein.
1.13. CC&R’s . For
purposes of this Lease, the term “CC&R’s,” as
such CC&R’s may be amended from time to time, shall mean
collectively (i) that certain Master Declaration of Covenants,
Conditions, Restrictions and Easements for Columbia Tech Center
dated January 5, 1997 and recorded as Instrument
No. 9701170005 on January 17, 1997 in the records of
Clark County, Washington, as amended by Amendment to Master
Declaration of Covenants, Conditions, Restrictions and Easements
for Columbia Tech Center dated July 30, 2002 and recorded as
Instrument No. 3500189 on August 13, 2002 in the Records
of Clark County, Washington, and also as amended by Second
Amendment to Master Declaration of Covenants, Conditions,
Restrictions and Easements for Columbia Tech Center dated
August 12, 2002, and recorded as Instrument No. 3500390
on August 13, 2002, in the records of Clark County,
Washington, and also as amended by Third Amendment to Master
Declaration of Covenants, Conditions, Restrictions and Easements
for Columbia Tech Center dated November 15, 2004, and recorded
as Instrument No. 3910991 on November 22, 2004, in the
records of Clark County, Washington (the “Master
Covenants”), and (ii) that certain Development Agreement
between Columbia Tech Center, L.L.C., a Washington limited
liability company, and the City of Vancouver, Washington, a
Washington municipal corporation, as recorded in the records of
Clark County, Washington as Instrument No. 3305320, as amended
by First Addendum to Columbia Tech Center Development Agreement
dated February 3, 2003 and recorded as Instrument
No. 3589540, and also as amended Second Addendum to Columbia
Tech Center Development Agreement dated May 19, 2003, and
recorded as instrument No. 3667929 (the “Development
Agreement”), and also as amended by Third Addendum to
Columbia Tech Center Development Agreement dated June 20,
2005, and recorded as instrument No. 4017454.
1.14. Landlord’s Work .
Those improvements to the Premises to be constructed by Landlord
pursuant to Exhibit B (“Landlord’s
Work”).
Page 3
1.15. Guarantor(s) . Not
applicable.
1.16. Fiscal Year .
January 1 through December 31 (each, a “Fiscal
Year”).
1.17. Base Year . The 2010
Fiscal Year (“Base Year”).
This lease (this
“Lease”) is entered into by Landlord and Tenant
described in the Basic Lease Terms on the date set forth for
reference only in the Basic Lease Terms.
2. Landlord’s Work;
Measurement of Premises.
2.1. Landlord’s Work;
As-Is .
2.1.1. Tenant acknowledges that
Tenant shall remain in possession of the Premises during
performance of Landlord’s Work. Landlord and Tenant shall
reasonably cooperate with each other with respect to performance of
Landlord’s Work such that, subject to force majeure as
described in Paragraph 24.1 , Tenant is entirely moved
into the Premises no later than October 1, 2009. However,
delays in the performance of Landlord’s Work shall not
postpone the Commencement Date of this Lease. Tenant hereby
acknowledges that Tenant has inspected the Premises and, subject to
the performance of Landlord’s Work, agrees to continue
Tenant’s possession of the Premises “AS IS” and
in their present condition, and without any representation or
warranty by or from Landlord as to the condition of the Premises,
the habitability of the Premises, the fitness of the Premises for
the Permitted Use and/or the conduct of Tenant’s business in
the Premises, or the zoning of the Premises.
2.1.2. Landlord agrees to
competitively bid the major subcontractor portions of
Landlord’s Work construction with qualified tenant
subcontractors that are reasonably acceptable to Landlord. Tenant
shall pay all costs associated with Landlord’s Work
including, but not limited to, costs and fees associated with
architectural, engineering and construction, as follows:
(i) Not more than one (1) time
per month during performance of Landlord’s Work, Tenant shall
pay to Landlord the costs incurred by Landlord to date in
connection with Landlord’s Work (each, a “Progress
Payment”); each Progress Payment shall be paid by Tenant
within twenty (20) days after Landlord has paid for those
sums, costs and expenses due for, or purporting to be due for, that
portion of work, labor, services, materials, supplies or equipment
furnished or claimed to be furnished to or for, or in connection
with, the Landlord’s Work to date and has provided Tenant
with copies of such paid invoices.
(ii) Upon completion by Landlord of
all Landlord’s Work, Tenant shall pay to Landlord any
remaining portion of the costs and fees of Landlord’s Work
not previously paid to Landlord within twenty (20) days after
Landlord has paid for all sums, costs and expenses due for, or
purporting to be due for, any work, labor, services, materials,
supplies or equipment furnished or claimed to be furnished to or
for, or in connection with, Landlord’s Work and has provided
Tenant with copies of such paid invoices.
2.1.3. Landlord and Tenant agree to
communicate and reasonably cooperate with each other with respect
to the performance of Landlord’s Work such that Landlord is
able to perform Landlord’s Work economically and efficiently
without unreasonable disruption to Tenant’s continuing
operations in the Premises. However, Tenant understands that
Landlord generally shall be performing Landlord’s Work during
business hours and that Landlord’s Work must be performed in
the Premises and the remainder of the Building leased by Tenant
under the Full Building Lease prior to termination thereof,
provided, however, that Landlord will confine to after work hours
any portion of Landlord’s Work mutually reasonably determined
by Tenant and Landlord to be unreasonably disruptive to the conduct
of Tenant’s business and operations in the Premises.
Accordingly, notwithstanding any provision to the contrary
contained in this Lease or in the Full Building Lease, Landlord and
Landlord’s contractors, agents and employees shall have all
access and other rights reasonably required in order to perform and
complete Landlord’s Work and such performance and completion
of Landlord’s Work shall in no way constitute constructive
eviction of Tenant from any portion of the Premises or the Building
nor shall Tenant be entitled to abatement or reduction of Base
Rent, Additional Rent or other charges payable by Tenant under this
Lease or the Full Building Lease as a result thereof.
Tenant’s reasonable cooperation with Landlord shall include,
without limitation, removing from the
Page 4
interior walls of the Premises and/or the
Building (as applicable) all pictures, posters, artwork, pins, tape
and other items not intended to receive paint and moving any and
all furniture, equipment and other property away from the
portion(s) of the Premises and/or the Building (as applicable)
where Landlord’s Work is being performed prior to Landlord
commencing the relevant portion of Landlord’s
Work.
2.2. Measurement of Premises
. Within thirty (30) days following completion of
Landlord’s Work as provided herein Tenant, at its sole cost
and expense, shall have the right to cause a licensed architect or
surveyor to measure the Premises for deviations in the usable
square footage of the Premises using the BOMA office building
standard of measurement (the “Tenant Remeasurement”).
If Tenant elects to have the Premises remeasured, Tenant may
provide the findings of the Tenant Remeasurement to Landlord on or
prior to the expiration of the thirty (30) day period. If
Tenant fails to deliver the findings of the Tenant Remeasurement to
Landlord on or prior to the expiration of the thirty (30) day
period, the usable square footage of the Premises Area stated in
Paragraph 1.5 shall control for all purposes under this
Lease. If the usable square footage of the Premises in any such
Tenant’s Remeasurement timely provided to Landlord differs
from the usable square footage of the Premises Area stated in
Paragraph 1.5 , the parties, in good faith, shall
resolve the disparity in the measurement of the usable square
footage of the Premises and shall agree upon the correct usable
square footage of the Premises within ten (10) days following
receipt by Landlord of Tenant’s Remeasurement. Following the
determination of the usable square footage of the Premises as set
forth in this Paragraph 2.2 , the Base Rent set forth
in Paragraph 1.10 and Tenant’s Proportionate
Share shall be recalculated (subject to the provisions of
Paragraph 9.2 and the Load Factor as set forth in
Paragraph 1.12 ) and shall be confirmed in a writing
executed by both Landlord and Tenant.
3. Lease Term; Initial Tenant
Obligations.
3.1. Lease Term . The term of
this Lease shall commence on the Commencement Date and expire on
the Expiration Date (the “Lease Term”). The Expiration
Date of this Lease shall be as defined in the Basic Lease Terms.
Landlord and Tenant shall each have a one (1)-time right to
obtain written confirmation of the Commencement Date and Expiration
Date, which written confirmation shall be delivered by the other
party within fifteen (15) days following receipt of written
request from either Landlord or Tenant.
3.2. Early Lease Period .
Notwithstanding any provision to the contrary set forth in this
Lease or otherwise, during the Early Lease Period, the following
provisions shall control:
3.2.1. Monthly Base Rent payable by
Tenant for the Premises shall be One Hundred Fifty-Eight Thousand
Three Hundred Thirty-Three and No/100 Dollars ($158,333.00) per
month; and
3.2.2. Tenant’s proportionate
share of Taxes and Operating Expenses shall be calculated and
payable by Tenant as though Tenant were occupying the entire
Building as set forth in the Full Building Lease; and
3.2.3. Tenant shall continue to
provide its own utilities and services as set forth in
Paragraph 6 of the Full Building Lease; and
3.2.4. Tenant shall continue to
perform maintenance and repair of the full Building in the manner
and as set forth in Paragraph 8 of the Full Building Lease
including, without limitation, any replacement required in order
for Tenant to put the Surrendered Space (as defined below) in the
condition required under the Full Building Lease for surrender by
Tenant to Landlord (Landlord shall continue to maintain and repair
and replace the full Building in the manner and as set forth in
Paragraph 7 of the Full Building Lease). Tenant shall have the
right to use and occupy those portions of the Building not
comprising the Premises (the “Surrendered Space”) for
general office use only until Landlord’s Work is completed.
In addition, within thirty (30) days following the execution
of this Lease, Tenant shall provide to Landlord a list of all
contracts and agreements to which Tenant is a party that concern
any portion of the Building. Within fifteen (15) days
following Tenant’s delivery of this list, Landlord shall
confirm in writing to Tenant any contracts or agreements that
Landlord desires to assume from Tenant and, provided such contracts
or agreements are assumable, Landlord and Tenant shall execute such
documents as are reasonably necessary for Landlord to assume those
contracts and agreements
Page 5
which Landlord has elected to assume. Tenant
shall terminate, effective as of the expiration of the Early Lease
Period, all other contracts and agreements to which Tenant is a
party that concern any portion of the Building other than the
Premises. Tenant will surrender to Landlord the Surrendered Space
in the condition required under the Full Building Lease (which
shall be determined based on a walk-through inspection conducted
and documented jointly by representatives of Landlord and Tenant
within sixty (60) days of substantial completion of
Landlord’s Work and which shall include, without limitation,
an inspection of the mechanical, electrical and plumbing systems
serving the Building to ensure that all such systems are in good
operating condition and repair).
4. Rent Payment.
4.1. Base Rent; Additional
Rent . Tenant shall pay to Landlord the Base Rent for the
Premises set forth in this Lease and all amounts other than Base
Rent that this Lease requires (“Additional Rent”)
without demand, deduction or offset. Payment shall be made in U.S.
currency by checks payable to Landlord and mailed to the address
for rent payments as set forth above or as otherwise may be
designated in writing by Landlord. Base Rent and Additional Rent
shall be payable in advance on the first day of each month during
the Lease Term. Base Rent and Additional Rent for any partial month
during the Lease Term shall be prorated to reflect the number of
days during the relevant month. Payment by Tenant or receipt by
Landlord of any amount less than the full Base Rent or Additional
Rent due from Tenant, or any disbursement or statement on any check
or letter accompanying any check or rent payment, shall not in any
event be deemed an accord and satisfaction. Landlord may accept
such check or payment without prejudice to Landlord’s right
to recover the balance of such rental or pursue any other remedy
provided in this Lease.
4.2. Lockbox Payments . If
Landlord directs Tenant to pay Base Rent, Additional Rent or other
charges under this Lease to a “lockbox” or other
depository whereby checks issued in payment of such items are
initially cashed or deposited by a person or entity other than
Landlord (albeit on Landlord’s authority) then, for any and
all purposes under this Lease: (i) Landlord shall be deemed to
have accepted such payment if (and only if) Landlord shall not have
immediately refunded (or attempted to immediately refund) such
payment to Tenant, and (ii) Landlord shall not be bound by any
endorsement or statement on any check or any letter accompanying
any check or payment and no such endorsement, statement or letter
shall be deemed an accord and satisfaction. Landlord or
Landlord’s bank may accept such check or payment without
prejudice to Landlord’s right to recover the balance of such
rent or pursue any other remedy provided in this Lease, at law or
in equity.
5. Security
Deposit.
Simultaneous with Tenant’s
execution and delivery of this Lease to Landlord, Tenant shall pay
the Security Deposit stated in the Basic Lease Terms. The Security
Deposit shall be a debt from Landlord to Tenant. Landlord may
commingle the Security Deposit with its funds and shall have no
obligation to pay any interest on the Security Deposit. Landlord
shall have the right to offset against the Security Deposit any
sums owing from Tenant to Landlord and not paid when due, any
damages caused by Tenant’s default, the cost of curing any
default by Tenant should Landlord elect to do so, and the cost of
performing any repair, maintenance or cleanup that is the
responsibility of Tenant under this Lease. Offset against the
Security Deposit shall not be an exclusive remedy in any of the
above cases but may be invoked by Landlord, at its option, in
addition to any other remedy provided by law or this Lease for
Tenant’s nonperformance. Landlord shall give notice to Tenant
each time an offset is claimed against the Security Deposit, and
unless the Lease is terminated, Tenant shall within ten
(10) days after such notice deposit with Landlord a sum equal
to the amount of the offset so that the total deposit amount, net
of offset, shall remain constant throughout the Lease Term.
Tenant’s failure to make such deposit after offset shall be a
default under this Lease. Any remaining balance of such Security
Deposit shall be returned by Landlord to Tenant (or the then
current assignee of Tenant’s right, title and interest in and
to this Lease) when Tenant’s obligations under this Lease
have been fulfilled.
6. Use of the Premises; Hazardous
Substances.
6.1. Permitted Use . Subject
to Tenant’s acknowledgment set forth in
Paragraph 2.1 , the Premises shall be used for the
Permitted Use set forth in the Basic Lease Terms and for
no
Page 6
other purpose without Landlord’s prior
written consent which (i) as to all portions of the Premises
other than the portion of the Premises located in the Basement, may
be withheld in Landlord’s sole and absolute discretion and
(ii) with respect to the portion of the Premises located in
the Basement, shall not be unreasonably withheld.
6.2. Compliance with Applicable
Laws and Requirements . In connection with its use of the
Premises, Tenant shall at its expense comply with the
CC&R’s, all applicable laws, ordinances, regulations,
codes and orders of any governmental or other public authority
including without limitation, any and all Environmental Laws as
defined in Paragraph 6.7.6 (together with any
supplements or modifications thereto, “Applicable
Laws”), and also including, without limitation, those
requiring alteration of the Premises because of Tenant’s
specific use or required pursuant to Paragraph 6.7 ;
shall create no nuisance nor allow any objectionable liquid, odor,
or noise to be emitted from the Premises; shall store no gasoline
or other highly combustible materials on the Premises which would
violate any applicable fire code or regulation nor conduct any
operation that shall increase Landlord’s fire insurance rates
for the Premises, the Building or the Park; shall not invalidate or
impair any roof warranty; and shall not overload the floors or
electrical circuits of the Premises. Tenant, at Tenant’s sole
cost and expense, shall obtain and maintain any and all permits and
licenses required in order for Tenant to operate the Permitted Use
in the Premises. Landlord certifies that as of the completion of
Landlord’s Work all portions of the Premises improved or
modified, or both, by Landlord’s Work shall comply with the
requirements of the Americans with Disabilities Act of 1990, as
amended (the “ADA”) to the extent required for
obtaining a permanent Certificate of Occupancy for use of the
Premises for the Permitted Use.
6.3. No Overloading . Without
limiting the foregoing and subject to Paragraph 6.5 ,
Tenant, at Tenant’s sole cost and expense, shall install
(i) in the Premises other than the portion thereof located in
the Basement only such equipment as is customary for general office
use and (ii) in the portion of the Premises located in the
Basement such equipment as is customary for the Basement Uses, and
in any event shall not overload the walls, ceilings, floors or
electrical circuits of the Premises or Building. Prior to
Tenant’s installation of any equipment other than as
described in the immediately preceding sentence which is required
for the Basement Uses under Paragraph 1.8 , Tenant, at
Tenant’s sole cost and expense, shall confirm (and deliver
proof of such confirmation to Landlord) that the installation and
use of any such equipment will not overload the walls, ceiling,
floors or electrical circuits of the Premises or Building. Any
power-driven machinery or equipment which Tenant proposes to
install shall be subject to Landlord’s prior written consent;
without limiting the foregoing, such consent may be conditioned
upon Tenant retaining at Tenant’s sole cost and expense
(A) a qualified electrician mutually selected by Landlord and
Tenant whose opinion shall control regarding electrical circuits
and (B) a qualified engineer or architect mutually selected by
Landlord and Tenant whose opinion shall control regarding floor
loads. If equipment installed or used by Tenant generates heat, any
additional air conditioning or ventilation desired by Tenant shall
be installed only following Tenant’s receipt of
Landlord’s consent as provided in Paragraph 6.5
at Tenant’s sole cost and expense.
6.4. Signage . Landlord, as
part of Landlord’s Work, shall relocate Tenant’s
current entry sign as more particularly shown in
Exhibit B . Tenant, at Tenant’s sole cost and
expense, may maintain its current signage on the existing monument
sign located at the main entrance to the parking area serving the
Building off of SE 164 th Avenue. All signage and the installation and
maintenance thereof shall comply with all Applicable Laws, the
CC&R’s and Landlord’s then current signage criteria
for the Building and/or Park. No signs shall be painted on or
attached to the Building. All signs installed by Tenant shall be
removed, at Tenant’s sole cost and expense, upon termination
of this Lease with the sign location restored to its former
state.
6.5. Alterations . Tenant
shall make no alterations, additions or improvements to the
Premises without Landlord’s prior written consent as provided
herein (except for Cosmetic Alterations as defined below) and in
any event without a valid building permit issued by the appropriate
governmental agency. To the extent that any alterations, additions
or improvements to the Premises constitute “Major
Alterations” (as defined below), Landlord may withhold its
consent in Landlord’s sole and absolute discretion;
otherwise, Landlord’s consent to any alterations, additions
or improvements to the Premises other than Major Alterations shall
not be unreasonably withheld. As used herein, “Major
Alterations” shall mean any alterations, additions or
improvements (i) which are visible from outside the Premises
and/or Building (including design and aesthetic changes), and/or
(ii) to the exterior of the Building, the roof of
Page 7
the Building, the heating, ventilation and/or
air conditioning systems serving the Premises, the fire sprinkler,
plumbing, electrical, mechanical and/or any other systems serving
the Premises, any interior, load-bearing walls and/or the
foundation of the Building. “Cosmetic Alterations”
shall mean alterations, additions or improvements to the interior
of the Premises which do not constitute Major Alterations, are
cosmetic in nature and have a cost (per project) not more than
Thirty Thousand and No/100 Dollars ($30,000.00), for which
Landlord’s prior written consent shall not be required
provided Tenant complies with all other requirements of this
Paragraph 6.5. Tenant shall notify Landlord in writing
at least fifteen (15) days prior to commencement of any such
work to enable Landlord to post a Notice of Non-Responsibility or
other notice deemed proper before the commencement of such work.
Any and all such alterations, additions or improvements shall
comply with all Applicable Laws including, without limitation,
obtaining any required permits or other governmental approvals.
Upon termination of this Lease, any alterations, additions and
improvements (including without limitation all electrical,
lighting, plumbing, heating and air-conditioning equipment, doors,
windows, partitions, drapery, carpeting, shelving, counters, and
physically attached fixtures) made by Tenant shall at once become
part of the realty and belong to Landlord unless the terms of the
applicable consent provide otherwise, or Landlord requests that
part or all of the additions, alterations or improvements be
removed. In such case, Tenant, at its sole cost and expense, shall
promptly remove the specified additions, alterations or
improvements and shall fully repair and restore the relevant
portion(s) of the Premises to the condition in which Tenant is
otherwise required to surrender the Premises under
Paragraph 18.1 , provided, however, that Tenant shall
not be required to remove or restore the Premises with respect to
(a) any portion of Landlord’s Work or (b) any of
the additions, improvements or alterations to the Premises of any
kind in the event Landlord terminates this Lease pursuant to
Paragraph 25 or causes Tenant to relocate pursuant to
Paragraph 25.4 or Paragraph 26.2 (provided
that nothing in this sentence shall limit Tenant’s obligation
to remove additions, improvements or alterations made to the
Substitution Space (as defined in Paragraph 25.4 ), the
Building Relocation Space (as defined in
Paragraph 26.2.1 ) or the Executive Offices Relocation
Space (as defined in Paragraph 26.2.2 ), as may be
applicable.
6.6. Cabling . Any
installation of cabling or wiring (collectively,
“Cabling”) shall be performed pursuant to
Paragraph 6.5 , shall meet the requirements of the
National Electrical Code (as may be amended from time to time), and
shall comply with all Applicable Laws. On or prior to the
expiration or earlier termination of this Lease, Tenant, at
Tenant’s sole cost and expense, shall remove all Cabling so
installed during the Lease Term unless Landlord, in its sole and
absolute discretion, elects in writing to waive this requirement.
Any Cabling removed by Tenant shall be disposed of by Tenant, at
Tenant’s sole cost and expense, in accordance with all
Applicable Laws. Without limiting the foregoing, Tenant shall not
be required to remove any cabling or wiring installed in the
Building prior to commencement of the Lease Term under this Lease
including, without limitation, installed under the terms and
conditions of the Full Building Lease.
6.7. Hazardous Substances
.
6.7.1. Use of Hazardous
Substances . Tenant shall not cause or permit any Hazardous
Substances (as defined in Paragraph 6.7.6 ) to be
spilled, leaked, disposed of or otherwise released on, under or
about the Premises, the Outside Area or any other portion of the
Park. Subject to the provisions of this Paragraph 6.7 ,
(i) Tenant may use on the Premises only those Hazardous
Substances typically used in the prudent and safe operation of the
Permitted Use, and (ii) Tenant may store such Hazardous
Substances on the Premises, but only in quantities necessary to
satisfy Tenant’s reasonably anticipated needs. In addition to
complying with Paragraph 6.2 , Tenant shall exercise
the highest degree of care in the use, handling and storage of
Hazardous Substances and shall take all practicable measures to
minimize the quantity and toxicity of Hazardous Substances used,
handled or stored on the Premises.
6.7.2. Notice of Release .
Tenant shall notify Landlord, including delivery of notice by
facsimile (in addition to delivery of notice as set forth in
Paragraph 24.7 ), immediately upon becoming aware of
the following: (i) any spill, leak, disposal or other release
of any Hazardous Substances on, under or about the Premises, the
Outside Area or any other portion of the Park; (ii) any notice
or communication from a governmental agency or any other person
relating to any Hazardous Substances on, under or about the
Premises; or (iii) any violation of any Environmental Laws
with respect to the Premises or Tenant’s activities on or in
connection with the Premises.
Page 8
6.7.3. Spills and Releases .
In the event of a spill, leak, disposal or other release of any
Hazardous Substances on, under or about the Premises, the Outside
Area or any other portion of the Park caused by Tenant or any of
its contractors, agents or employees or invitees, or the suspicion
or threat of the same, Tenant shall (i) immediately undertake
all emergency response necessary to contain, cleanup and remove the
released Hazardous Substance(s), (ii) promptly undertake all
investigatory, remedial, removal and other response action
necessary or appropriate to ensure that any Hazardous Substances
contamination is eliminated to Landlord’s reasonable
satisfaction, and (iii) provide Landlord copies of all
correspondence with any governmental agency regarding the release
(or threatened or suspected release) or the response action, a
detailed report documenting all such response action, and a
certification that any contamination has been eliminated. All such
response action shall be performed, all such reports shall be
prepared and all such certifications shall be made by an
environmental consultant reasonably acceptable to
Landlord.
6.7.4. Investigations . If
Landlord at any time during the Lease Term (including any holdover
period) reasonably believes that Tenant is not complying with any
of the requirements of this Paragraph 6.7 , Landlord
may require Tenant to furnish to Landlord, at Tenant’s sole
expense and within thirty (30) days following Landlord’s
request therefor, an environmental audit or any environmental
assessment with respect to the matters of concern to Landlord;
provided, however, that Landlord will reimburse Tenant for such
expense if the audit or assessment does not disclose any material
noncompliance with the requirements of this
Paragraph 6.7 . Such audit or assessment shall be
prepared by a qualified consultant reasonably acceptable to
Landlord.
6.7.5. Indemnity .
(i) Tenant’s Indemnity
. Tenant shall indemnify, defend and hold harmless Landlord, its
employees and agents, any persons holding a security interest in
the Premises or any other portion of the Park, and the respective
successors and assigns of each of them, for, from and against any
and all claims, demands, liabilities, damages, fines, losses
(including without limitation diminution in value), costs
(including without limitation the cost of any investigation,
remedial, removal or other response action required by
Environmental Laws) and expenses (including without limitation
attorneys fees and expert fees in connection with any trial,
appeal, petition for review or administrative proceeding) arising
out of or in any way relating to the use, treatment, storage,
generation, transport, release, leak, spill, disposal or other
handling of Hazardous Substances on, under or about the Premises by
Tenant or any of its contractors, agents or employees or invitees.
Landlord’s rights under this Paragraph 6.7.5(i)
are in addition to and not in lieu of any other rights or remedies
to which Landlord may be entitled under this Lease or otherwise. In
the event any action is brought against Landlord by reason of any
such claim, Tenant shall resist or defend such action or proceeding
by counsel satisfactory to Landlord upon Landlord’s demand.
The obligation to indemnify, defend and hold harmless shall
include, without limitation, (A) reasonable costs incurred in
connection with investigation of site conditions,
(B) reasonable costs of any cleanup, remedial, removal or
restoration work required by any federal, state or local
governmental agency or political subdivision with respect to
Hazardous Substances, (C) diminution in value of the Premises
and/or any other portion of the Park, (D) damages arising from
any adverse impact on marketing of space in the Building and/or any
other portion of the Park, (E) reasonable sums paid in
settlement of claims, attorneys fees, consultant and laboratory
fees and expert fees, and (F) the value of any loss of the use
of the Premises or any other portion of the Park or any part
thereof.
(ii) Landlord’s
Indemnification . Landlord shall indemnify, defend and hold
harmless Tenant and its employees and agents and the respective
successors and assigns of each of them, for, from and against any
and all claims, demands, liabilities, damages, fines, losses
(including without limitation diminution in value), costs
(including without limitation the cost of any investigation,
remedial, removal or other response action required by
Environmental Laws) and expenses (including without limitation
attorneys fees and expert fees in connection with any trial,
appeal, petition for review or administrative proceeding) arising
out of or in any way relating to the actual or alleged use,
treatment, storage, generation, transport, release, leak, spill,
disposal or other handling of Hazardous Substances on the Premises
by Landlord, or any of its contractors, agents or employees or by
Landlord’s previous tenants of the Premises. Tenant’s
rights under this Paragraph 6.7.5(ii) are in addition
to and not in lieu of any other rights or remedies to which Tenant
may be entitled under this Lease or otherwise. In the event any
action
Page 9
is brought against Tenant by reason of any such
claim, Landlord shall resist or defend such action or proceeding by
counsel satisfactory to Tenant upon Tenant’s demand. The
obligation to indemnify, defend and hold harmless shall include,
without limitation, reasonable sums paid in settlement of claims,
attorneys fees, consultant and laboratory fees and expert
fees.
(iii) Subject to the provisions of
this Paragraph 6.7.5(iii) , as between Tenant and
Landlord, Tenant’s and Landlord’s respective
obligations under this Paragraph 6.7.5 shall survive
for a period of sixty (60) full calendar months immediately
following the expiration or termination of this Lease for any
reason. Notwithstanding any provision to the contrary, nothing
contained in the immediately preceding sentence shall be deemed to
limit in any manner a party’s obligations under this
Paragraph 6.7.5 or the survival thereof to the extent
(A) arising in connection with any claim, investigation,
action or other proceeding initiated or conducted by any
governmental or other public or regulatory agency or authority or
(B) of any rights of contribution one party may have against
the other party under applicable Environmental Laws.
6.7.6. Definitions . The term
“Environmental Laws” shall mean any and all federal,
state, or local laws, statutes, rules, regulations, ordinances, or
judicial or administrative decrees or orders relating to:
(i) health, safety or environmental protection; (ii) the
emissions, discharges, releases or threatened releases of
pollutants, contaminants or toxic or hazardous materials into the
environment (including, without limitation, ambient air, surface
water, ground water or subsurface strata); or (iii) the use,
storage, treatment, transportation, manufacture, refinement,
handling, production or disposal of, or exposure to pollutants,
contaminants or toxic or hazardous materials, including, without
limitation, the Comprehensive Environmental Response, Compensation
and Liability Act, 42 USC §9601 et seq .
(“CERCLA”), as amended and judicially and
administratively interpreted through the date hereof, and all
regulations promulgated thereunder as of such date. The term
“Hazardous Substance” (collectively, “Hazardous
Substances”) shall mean: (i) any products, materials,
solvents, elements, compounds, chemical mixtures, contaminants,
pollutants, or other substances identified as toxic or hazardous
under CERCLA or any other Environmental Laws; and (ii) the
following substances: PCBs, gasoline, kerosene or other petroleum
products, toxic pesticides and herbicides, volatile and/or
chlorinated solvents, materials containing asbestos or formaldehyde
and radioactive materials.
6.8. Moving; Access . Tenant
shall move large items in and out of the Building or make
independent use of the elevators for any purposes other than the
transport of individuals only prior to 8 a.m. or after 5 p.m. on
weekdays, at any time on weekends, or otherwise at times previously
approved by Landlord. To the extent Tenant is moving items other
than machines and equipment in and out of the Building as part of
Tenant’s normal business practices, Tenant shall provide
Landlord with at least twenty-four (24) hours prior notice to
Landlord of the intended move. Landlord will not unreasonably
withhold its consent under this Paragraph 6.8 ,
provided that Tenant complies with all reasonable directives of
Landlord regarding protection of the Building and Outside Area
including, without limitation, laying plywood or other material
suitable to protect against damage on all Building floor
finishes.
6.9. Generator . During the
Lease Term, Tenant shall continue to have exclusive use of that
one (1) emergency generator model number 350DFCC-R, Serial
Number G980775323 located (the “Generator”). Landlord,
at Tenant’s sole cost and expense, shall (i) cause to be
installed security mechanisms for purposes of alerting both
Landlord and Tenant as to any leakage or other problems involving
the functioning of the Generator and (ii) maintain and repair
the Generator and all ancillary fuel storage tanks and facilities
in good condition and repair and in compliance with all Applicable
Laws. Tenant shall pay all costs and expenses incurred by Landlord
in the performance of Landlord’s obligations under this
Paragraph 6.9 as part of Tenant’s payment of
Operating Expenses.
7. Utilities and
Services.
7.1. Utility Charges .
Subject to the provisions of Paragraph 3.2 , Landlord
shall, at its expense, furnish Tenant with the services and
utilities listed below in this Paragraph 7.1 in such
quantity and of such quality as is customary in comparable office
buildings in the Vancouver, Washington metropolitan area. For
purposes hereof, “Normal Business Hours” shall mean
Monday through Sunday, 6:00 A.M. through 9:00 P.M.
Page 10
7.1.1. Elevator service serving all
floors of the Premises at all times, subject to repair, replacement
and maintenance as necessary.
7.1.2. Heating and air conditioning
serving the Premises to maintain a temperature condition which
provides for comfortable occupancy of the Premises for a general
office use during Normal Business Hours provided that Tenant
complies with Landlord’s instructions regarding use of
draperies and thermostats and Tenant does not utilize heat
generating machines or equipment which affect the temperature
otherwise maintained by the air conditioning system. Tenant may
request heat and air conditioning during other than Normal Business
Hours during the week or on Saturdays, Sundays or holidays. The
cost of such additional service shall be borne by Tenant at rates
established by Landlord, which rates shall be provided at
Tenant’s request. Tenant acknowledges and agrees that the
atrium area of the Building may not be heated and/or cooled to
maintain occupant comfort with the understanding that such atrium
area will be used by Tenant, its employees, agents, contractors and
invitees for limited ingress and egress to and from the
Premises.
7.1.3. Water for drinking, lavatory
and toilet purposes.
7.1.4. Subject to the provisions of
Paragraph 7.2 , electrical service for lighting and
operation of customary office equipment for a general office use
and the Basement Uses.
7.1.5. Janitorial service
three (3) days per week and otherwise in the manner that such
janitorial services are customarily furnished in “Class
A” office buildings in the area.
7.2. Use of Utilities .
Tenant shall comply with all Applicable Laws regarding the use or
reduction of use of utilities in the Premises. If Tenant’s
use of the Premises results in a material increase in the amount of
electricity required beyond the amount required for typical office
use during Normal Business Hours, then Tenant shall pay a
reasonable charge for such increase in electricity requirements
when requested to do so by Landlord. Without limiting the
foregoing, Tenant shall pay all electricity and other utility
charges in connection with the Basement Uses to the extent the use
of electricity or other utilities for the Basement Uses exceeds the
proportionate amount of electricity used by Tenant in the portion
of the Premises located in the Basement at the commencement of the
Lease Term (as reasonably estimated by Landlord).
7.3. No Warranty . Landlord
does not warrant that any of the services and utilities referred to
above will be free from interruption. Any service or utility may be
suspended by reason of accident, necessary repairs, alterations or
improvements, or force majeure as described in
Paragraph 24.1 provided that any interruption in any
service or utility caused by the actions of Landlord or
Landlord’s agents, contractors or employees which, in
Tenant’s reasonable judgment, severely interferes with
Tenant&rsqu