Exhibit 10.7
FOURTH AND
BATTERY OFFICE LEASE
THIS LEASE, made the 5th day of July
2000, by and between SELIG REAL ESTATE HOLDINGS EIGHT, a Washington
general partnership, whose address is 1000 Second Avenue, Suite
1800, Seattle, Washington, 98104-1046, hereinafter referred to as
“Lessor” and VERTIS NEUROSCIENCE INC., a Washington
corporation, hereinafter referred to as
“Lessee”.
1. DESCRIPTION . Lessor in
consideration of the agreements contained in this lease, does
hereby lease to Lessee, upon the terms and conditions hereinafter
set forth, that certain space consisting of the agreed upon square
footage of 51,701 (hereinafter referred to as
“Premises”) being the entire 2nd, 3rd and 5th floors of
the Fourth & Battery Building, 2401 Fourth Avenue, City of
Seattle, State of Washington 98121, the legal description of which
is:
Lots 3, 4, 5, 6, 7 and 8, Block 35,
Bell and Denny’s Second
Addition to City of
Seattle.
Suite 500
The exact area is subject to verification by
Lessee’s architect within thirty (30) days following
Lessee’s occupancy of the Premises.
2. TERM. The term of this lease
shall be for a period of 36 months, commencing the date of
occupancy or 30 days after Lessor delivers the space to Lessee,
whichever occurs first (hereinafter referred to as “Lease
Commencement”), which is estimated to be approximately the
1st day of September, 2002, and ending 36 months thereafter. Lessee
shall not be obligated to accept such Premises prior to July 1,
2002.
In the event the Premises are not
ready for occupancy on the date set forth above, whether occasioned
by Lessor or Lessee, the lease term shall be extended in such a
manner as to reflect the delay occasioned by the failure of the
Premises to be ready for occupancy. In no event shall Lessor or
Lessee be liable for any further damages.
3. RENT . Lessee covenants
and agrees to pay Lessor rent each month in advance on the first
day of each calendar month. Rent shall be computed at the annual
base rental rate of $32.00 per square foot. Rent for any fractional
calendar month, at the beginning or end of the term, shall be the
pro rated portion of the rent computed on an annual
basis.
4. CONSIDERATION . As
consideration for the execution of this lease, Lessee shall pay to
Lessor the sum of $137,869.33 at such time Lessor tenders the
Premises to Lessee. In the event Lessee fully complies with all the
terms and conditions of this lease, but not otherwise, an amount
equal to such sum shall be credited to the last one month’s
rental on the term of this lease.
5. USES . Lessee agrees that
Lessee will use and occupy said premises for general office, which
shall include limited light assembly and manufacturing, research
and development, distribution, sales and for any other permitted
use and for no other purposes.
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6. RULES AND REGULATIONS .
Lessee and their agents, employees, servants or those claiming
under Lessee will at all times observe, perform and abide by all of
the Rules and Regulations printed on this instrument, or which may
be hereafter promulgated by Lessor, all of which it is covenanted
and agreed by the parties hereto shall be and are hereby made a
part of this lease provided such rules and regulations hereinafter
promulgated shall not materially affect Lessee’s obligations
or rights hereunder.
7. CARE AND SURRENDER OF
PREMISES . Lessee shall take good care of the Premises and
shall promptly make all necessary repairs except those required
herein to be made by Lessor. At the expiration or sooner
termination of this lease, Lessee, without notice, will immediately
and peacefully quit and surrender the Premises in good order,
condition and repair (damage by reasonable wear, the elements, or
fire excepted). Lessee shall be responsible for removal of all
personal property from the Premises, (excepting fixtures being that
which is attached to the Premises, and property of the Lessor)
including, but not limited to, the removal of Lessee’s
communication cabling, telephone equipment and signage. Lessee
shall be responsible for repairing any damage to the Premises
caused by such removal. If Lessee fails to remove and restore the
Premises at lease expiration, then Lessor shall have the right to
remove said property and restore the Premises and Lessee shall be
responsible for all costs associated therewith. Lessee shall also
be responsible for those costs incurred by Lessor for removing
debris Lessee may discard in the process of preparing to vacate the
Premises and for a final cleaning of the Premises, including, but
not limited to, the cleaning, or replacement of carpets if damage
is not caused by reasonable wear, and removal and disposal of
Lessee’s personal property remaining in the
Premises.
8. ALTERATIONS . Lessee shall
not make any alterations or improvements in, or additions to said
Premises without first obtaining the written consent of Lessor,
whose consent shall not be unreasonably withheld, delayed or
conditioned. All such alterations, additions and improvements shall
be at the sole cost and expense of Lessee and shall become the
property of Lessor and shall remain in and be surrendered with the
Premises as a part thereof at the termination of this lease,
without disturbance, molestation or injury.
9. RESTRICTIONS . Lessee will
not use or permit to be used in said Premises anything that will
increase the rate of insurance on said building or any part
thereof, nor anything that may be dangerous to life or limb; nor in
any manner deface or injure said building or any part thereof; nor
overload any floor or part thereof; nor permit any objectionable
noise or odor to escape or to be emitted from said Premises, or do
anything or permit anything to be done upon said Premises in any
way tending to create a nuisance or to disturb any other tenant or
occupant of any part of said building. Lessee, at Lessee’s
expense, will comply with all health, fire and police regulations
respecting said Premises. The Premises shall not be used for
lodging or sleeping, and no animals or birds will be allowed in the
building.
10. WEIGHT RESTRICTIONS .
Safes, furniture or bulky articles may be moved in or out of said
Premises only at such hours and in such manner as will least
inconvenience other tenants, which hours and manner shall be at the
discretion of Lessor. No safe or other article of over 2,000 pounds
shall be moved into said Premises without the consent of Lessor,
whose consent shall not be unreasonably withheld, and Lessor shall
have the right to locate the position of any article of weight in
said Premises if Lessor so desires.
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11. SIGN RESTRICTION . No
sign, picture, advertisement or notice shall be displayed,
inscribed, painted or affixed to any of the glass or woodwork of
the building without the prior approval of Lessor.
12. LOCKS . No additional
locks shall be placed upon any doors of the Premises. Keys will be
furnished to each door lock. At the termination of the lease,
Lessee shall surrender all keys to the Premises whether paid for or
not.
13. KEY . Lessor, his
janitor, engineer or other agents may retain a pass key to said
Premises to enable him to examine the Premises from time to time
with reference to any emergency or to the general maintenance of
said Premises. Except in an emergency or for janitorial services,
Lessee reserves the right to escort Lessor, its employees, agents
or other representatives through the Premises and/or restrict
access to certain areas containing proprietary information for the
purposes herein set forth.
14. TELEPHONE SERVICE . If
Lessee desires telephonic or any other electric connection, Lessor
will direct the electricians as to where and how the wires are to
be introduced, and without such directions no boring or cutting for
wires in installation thereof will be permitted.
15. SERVICES . Lessor shall
maintain Premises and the public and common areas of building, such
as lobbies, stairs, corridor and restrooms, in reasonably good
order and condition to the standard of first class office buildings
in the Denny Regrade area, except for damage occasioned by the act
of Lessee.
Lessee shall have access to and use
of the Premises 24 hours per day, 7 days per week.
Lessor shall furnish Premises with
electricity for lighting and operation of low power usage office
machines, heat, normal office air-conditioning, and elevator
services 24 hours per day, 7 days per week. Ordinary business hours
of the building are 7:00 a.m. to 6:00 p.m. Monday through Friday
and 8:00 a.m. to 12:00 noon on Saturday or as the parties shall
mutually agree. Air-conditioning units and electricity therefore
for special air-conditioning requirements, including after hours
HVAC and computer centers, shall be at Lessee’s expense. In
the event, Lessee operates a manufacturing or other operation,
including office functions, which requires more than one shift,
Lessee shall pay for after-hours usage. However, the foregoing
condition shall not apply to instances where employees periodically
work extended or irregular hours. Lessor shall also provide
lighting replacement for Lessor furnished lighting, toilet room
supplies, window washing with reasonable frequency, and janitor
service and security customary for first class buildings in the
Denny Regrade. If Lessee uses water, electricity, heat or
air-conditioning in excess of that required pursuant to this
Section, Lessee shall pay to Lessor, upon billing, the reasonable
cost of such excess consumption. If Lessee desires to use HVAC
during non-building hours, Lessor shall supply such utilities to
Lessee at a standard hourly cost (currently $1.00 per hour per heat
pump zone) as Lessor shall from time to time establish for the
building.
Lessor shall not be liable to Lessee
for any loss or damage caused by or resulting from any variation,
interruption or any failure of said services due to any cause
whatsoever. No temporary interruption or failure of such services
incident to the making of repairs, alterations, or
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improvements, or due to accident or strike or
conditions or events not under Lessor’s control shall be
deemed as an eviction of Lessee or relieve Lessee from any of
Lessee’s obligations hereunder. Notwithstanding the
foregoing, in the event such services are interrupted to Lessee to
the extent that the Premises are deemed untenantable and such
interruption shall continue for a period of more than three
(3) consecutive days, rent due hereunder shall be abated for
the portion of the Premises deemed untenantable until such services
are restored to the Premises. Lessee shall not be entitled to any
additional damages.
In the event of any lack of
attention on the part of Lessor and any dissatisfaction with the
service of the building, or any unreasonable annoyance of any kind,
Lessee is requested to make complaints at Lessor’s building
office and not to Lessor’s employees or agents seen within
the building. Lessee is further requested to remember that Lessor
is as anxious as Lessee that a high grade service be maintained,
and that the Premises be kept in a state to enable Lessee to
transact business with the greatest possible ease and comfort. The
rules and regulations are not made to unnecessarily restrict
Lessee, but to enable Lessor to operate the building to the best
advantage of both parties hereto. To this end Lessor shall have the
right to waive from time to time such part or parts of these rules
and regulations as in his judgment may not be necessary for the
proper maintenance or operation of the building or consistent with
good service, and may from time to time make such further
reasonable rules and regulations as in his judgment may be needed
for the safety, care and cleanliness of the Premises and the
building and for the preservation of order therein.
16. SOLICITORS . Lessor will
make an effort to keep solicitors out of the building, and Lessee
will not oppose Lessor in his attempt to accomplish this
end.
17. FLOOR PLAN . The floor
plan and specifications for Lessee’s occupancy shall be
attached hereto and marked Exhibit “A” which shall be
approved by both Lessor and Lessee, both of whose approval shall
not be unreasonably withheld.
18. ASSIGNMENT . Lessee will
not assign this lease, or any interest hereunder, and this lease,
or any interest hereunder, shall not be assigned by operation of
law. Lessee will not sublet said Premises or any part thereof and
will not permit the use of said Premises by others other than
Lessee and the agents of Lessee without first obtaining the written
consent of Lessor, whose consent shall not be unreasonably
withheld, delayed or conditioned. In the event such written consent
shall be given, no other or subsequent assignment or subletting
shall be made without the previous written consent of Lessor, whose
consent shall not be unreasonably withheld. In the event Lessee
desires to assign or sublet said Premises or any part thereof,
Lessor shall have the first right, but not the obligation to
re-lease the Premises. Notwithstanding anything contained herein to
the contrary, any assignment or sublet to an entity which controls,
is controlled by, or is under common control with Lessee, or which
is the result of a merger or consolidation with Lessee, or which
acquires all or substantially all of Lessee’s assets, or by
any change of ownership resulting from any public offering shall
not be governed by the terms and conditions of this Section 18,
provided that Lessee shall notify Lessor of such transfer in
writing and deliver to Lessor any documents or information
reasonably required by Lessor regarding such transfer and no such
transfer shall relieve Lessee from liability under this
lease.
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19. OPERATING SERVICES AND REAL
ESTATE TAXES . The annual base rental rate per rentable square
foot in Paragraph 3 includes Lessee’s proportionate share of
Operating Services and Real Estate Taxes for the first twelve
months of the lease term, “Base Year Costs”. Only
actual increases from these Base Year Costs, if any, will be passed
on to Lessee on a proportionate basis.
DEFINITIONS
Base Year
For computing the Base Year Costs, the base year
shall be the calendar year stated herein or if a specific calendar
year is not stated herein then the base year shall be the calendar
year in which the lease term commences. The base year shall be the
calendar year 2002.
Comparison Year
The Comparison Year(s) shall be the
calendar year(s) subsequent to the base year.
Operating Services
“Operating Services” include, but
are not limited to, the charges incurred by Lessor for: building
operation salaries, benefits, management fee (currently 5%) of
gross income for the building, insurance, electricity, janitorial,
supplies, telephone, HVAC, repair and maintenance, window washing,
water and sewer, security, landscaping, dis
