OFFICE LEASE AGREEMENT

 

Exhibit 10.5

 

BELLEFIELD OFFICE PARK

ASPENWOOD BUILDING

1800 -114 ^TH AVENUE SE

BELLEVUE, WASHINGTON

 

OFFICE LEASE AGREEMENT

 

BETWEEN

 

EOP OPERATING LIMITED PARTNERSHIP,

a Delaware limited partnership

(“LANDLORD”)

 

AND

 

COINSTAR, INC.,

a Delaware corporation

(“TENANT”)

 

OFFICE LEASE AGREEMENT

 

THIS OFFICE LEASE AGREEMENT (the “ Lease ”) is made and entered into as of the 1 ^st day of January, 2004, by and between EOP OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership (“ Landlord ”) and COINSTAR, INC., a Delaware corporation (“ Tenant ”). The following exhibits and attachments are incorporated into and made a part of this Lease: Exhibit A-1 (Outline and Location of Premises), Exhibit A-2 (Legal Description), Exhibit A-3 (Outline and Location of Storage Spaces), Exhibit B (Expenses and Taxes), Exhibit C (Work Letter), Exhibit D (Commencement Letter – Intentionally Omitted ), Exhibit E (Building Rules and Regulations) and Exhibit F (Additional Provisions).

 

1.	Basic Lease Information.

 

1.01

“ Building ” shall mean the building located at 1800-114 th Avenue SE, Bellevue, Washington 98004, commonly known as the Aspenwood Building. “ Rentable Square Footage of the Building ” is deemed to be 465,965 square feet based upon the combined rentable area of the buildings described in Section 1.04 below.

 

1.02

“ Premises ” shall mean the area shown on Exhibit A-1 to this Lease. The Premises is located on the 1st and 2nd floors and known as suite numbers 100 and 200. If the Premises include one or more floors in their entirety, all corridors, kitchen facilities, restroom facilities and vending areas located on such full floor(s) shall be considered part of the Premises. The “ Rentable Square Footage of the Premises ” is deemed to be 46,070 square feet. Landlord and Tenant stipulate and agree that the Rentable Square Footage of the Building and the Rentable Square Footage of the Premises are correct.

 

1.03

“ Base Rent ”:

 

 

1.04

“ Tenant’s Pro Rata Share ”: 9.8870%. For purposes of determining Tenant’s Pro Rata Share, and as used throughout Exhibit B of this Lease, the “Building” shall mean, collectively, the 15 buildings located at 1400-112 th Avenue SE, 1309-114 th Avenue SE, 1203 –114 th Avenue SE, 1215-114 th Avenue SE, 1601-114 th Avenue SE, 1621-114 th Avenue SE, 1500-114 th Avenue SE, 1715-114 th Avenue SE, 1450-114 th Avenue SE, 11201 SE 8 th Street, 1150-114 th Avenue SE, 1300-114 th Avenue SE, 1687-114 th Avenue SE, 1800-114 th Avenue SE and 1756-114 th Avenue SE, all located in Bellevue, Washington, it being understood and agreed that all of the foregoing buildings, collectively, are treated as a single building for purposes of obtaining or providing services or otherwise determining Expenses and/or Taxes. In calculating Tenant’s Pro Rata Share of Expenses and/or Taxes with respect to the Premises, the “Rentable Square Footage of the Building” described in Section 1.01 above reflects the combined rentable area in the foregoing buildings, collectively, and “Tenant’s Pro Rata Share” with respect to the Premises, as described above, is based upon the foregoing Rentable Square Footage of the Building. However, notwithstanding the foregoing, if one or more buildings are removed from the group of buildings comprising the Building, as described above in this Section, whether as a result of a sale or demolition of the building(s) or otherwise, or if one or more buildings owned by Landlord are added to the group of buildings comprising the Building, as described above in this Section, then the definition of “Building” and the “Rentable Square Footage of the Building”, as described in this Section 1, and “Tenant’s Pro Rata Share” with respect to the Premises, shall be appropriately modified or adjusted to reflect the deletion or addition of such buildings.

 

1.05

“ Base Year ” [Intentionally Omitted]

 

1.06

“ Term ”: A period of 72 months. The Term shall commence on January 1, 2004 (the “ Commencement Date ”) and, unless terminated early in accordance with this Lease, end on December 31, 2009 (the “ Termination Date ”).

 

1.07

Allowance(s): (a) an allowance in the amount of $852,295.000 (i.e., $18.50 multiplied by the Rentable Square Footage of the Premises) towards the cost of any Identified Alterations (defined in Section 1.14 below) and certain other costs as more particularly described in the Work Letter (defined in Section 1.14 below); (b) an allowance in the amount of $46,070.00 (i.e., $1.00 multiplied by the Rentable Square Footage of the Premises) towards the cost of preparing plans for any Identified Alterations or any other Alterations (defined in Section 9.03 below), as more particularly described in the Work Letter; and (c) an allowance in the amount

 

1

of $57,587.50 (i.e., $1.25 multiplied by the Rentable Square Footage of the Premises) towards the cost of tenant’s moving costs, if any, associated with temporarily relocating to space in the building commonly known as the Magnolia building, if applicable, during the performance of any Identified Alterations in calendar year 2004, as more particularly provided in Section III of Exhibit F .

 

1.08

“ Security Deposit ”: $113,602.00, as more fully described in Section 6. As of the date of this Lease, Landlord holds the Security Deposit as more fully provided in Section 6.

 

1.09

“ Guarantor(s) ”: As of the date of this Lease, there are no Guarantors.

 

1.10

“ Broker(s) ”: Raskin & Associates (“ Tenant’s Broker ”), which represented Tenant in connection with this transaction, and Equity Office Properties Management Corp. (“ Landlord’s Broker ”), which represented Landlord in connection with this transaction.

 

1.11

“ Permitted Use ”: General Office Use; provided that in no event shall the Premises, or any portion of the Premises, be used for the operation of a food service.

 

1.12

“ Notice Address(es) ”:

 

 

A copy of any notices to Landlord shall be sent to Equity Office, One Market, Spear Tower, Suite 600, San Francisco, California 94105, Attn: Seattle Regional Counsel.

 

1.13

“ Business Day(s) ” are Monday through Friday of each week, exclusive of New Year’s Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day (“ Holidays ”). Landlord may designate additional Holidays that are commonly recognized by other office buildings in the area where the Building is located. “ Building Service Hours ” are 7:00 A . M . to 7:00 P . M . on Business Days.

 

1.14

“ Identified Alterations ” has the meaning set forth in Section 1 of the separate agreement (the “ Work Letter ”) attached to this Lease as Exhibit C .

 

1.15

“ Property ” means the Building and the parcel(s) of land on which it is located and, at Landlord’s discretion, the parking facilities and other improvements, if any, serving the Building and the parcel(s) of land on which they are located.

 

2.	Lease Grant.

 

The Premises are hereby leased to Tenant from Landlord, together with the right to use, in common with others, any portions of the Property that are designated by Landlord for the common use of tenants and others (the “ Common Areas ”).

 

3.	Possession.

 

3.01 [Intentionally Omitted]

 

3.02 The Premises are accepted by Tenant in “as is” condition and configuration without any representations or warranties by Landlord. Tenant has been in prior possession of the Premises under the terms of a prior Lease between Tenant and Landlord predecessor in interest dated as of January 27, 1997, as amended (the “ Prior Lease ”), and Tenant agrees that the Premises are in good order and satisfactory condition.

 

4.

Rent.

 

4.01 As consideration for this Lease, Tenant shall pay Landlord, without any setoff or deduction, unless expressly set forth in this Lease, all Base Rent and Additional Rent due for the Term (collectively referred to as “ Rent ”). “ Additional Rent ” means all sums (exclusive of Base Rent) that Tenant is required to pay Landlord under this Lease. Tenant shall pay and be liable for all rental, sales and use taxes (but excluding income taxes), if any, imposed upon or measured by Rent. Base Rent and recurring monthly charges of Additional Rent shall be due and payable in advance on the first day of each calendar month without notice or demand, provided that the installment of Base Rent for the first full calendar month of the Term, and the first monthly installment of Additional Rent for Expenses and

 

2

Taxes, shall be payable upon the execution of this Lease by Tenant. All other items of Rent shall be due and payable by Tenant on or before 30 days after billing by Landlord. All payments of Rent shall be made payable to the entity, and sent to the address, Landlord designates and shall be made by good and sufficient check or by other means reasonably acceptable to Landlord. Tenant shall pay Landlord an administration fee equal to 5% of any past due Rent, provided that Tenant shall be entitled to a grace period of 5 Business Days for the first 2 late payments of Rent in a given calendar year before the imposition of such administration fee. In addition, past due Rent shall accrue interest at 12% per annum. Landlord’s acceptance of less than the correct amount of Rent shall be considered a payment on account of the earliest Rent due. Rent for any partial month during the Term shall be prorated. No endorsement or statement on a check or letter accompanying payment shall be considered an accord and satisfaction. Tenant’s covenant to pay Rent is independent of every other covenant in this Lease.

 

4.02 Tenant shall pay Tenant’s Pro Rata Share of Taxes and Expenses in accordance with Exhibit B of this Lease.

 

5.	Compliance with Laws; Use.

 

The Premises shall be used for the Permitted Use and for no other use whatsoever. Tenant shall comply with all statutes, codes, ordinances, orders, rules and regulations of any municipal or governmental entity whether in effect now or later (“ Law(s) ”), including the Americans with Disabilities Act (the “ ADA ”), regarding the operation of Tenant’s business and the use, condition, configuration and occupancy of the Premises. In addition, Tenant shall, at its sole cost and expense, promptly comply with any Laws that relate to the “Base Building” (defined below), but only to the extent such obligations are triggered by Tenant’s use of the Premises, other than for general office use, or Alterations or improvements in the Premises performed or requested by Tenant. “ Base Building ” shall include the structural portions of the Building, the public restrooms and the Building mechanical, electrical and plumbing systems and equipment located in the internal core of the Building on the floor or floors on which the Premises are located. Tenant shall, within 5 Business Days after receipt thereof, provide Landlord with copies of any notices it receives regarding any violation or alleged violation of any Law pertaining to the Premises or the Property. Tenant shall comply with the rules and regulations of the Building attached as Exhibit E and such other reasonable rules and regulations adopted by Landlord from time to time, including rules and regulations for the performance of Alterations (defined in Section 9). The rules and regulations shall be generally applicable, and generally applied in the same manner, to all tenants of the Building.

 

Landlord shall, at Landlord’s expense (except to the extent properly included in Expenses), be responsible for correcting any violation of Law (including, without limitation, the ADA) with respect to the Base Building; provided, however, that Landlord shall not be responsible for correcting any such violation to the extent such violation (i) is caused or triggered by any of the matters that are Tenant’s responsibility under any provision of this Lease, including, without limitation, the preceding paragraph or Section 9 below, or (ii) arises under any provision of the ADA other than Title III thereof. Notwithstanding the foregoing, Landlord shall have the right to contest any alleged violation in good faith, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by Law and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by Law. Landlord, after the exhaustion of any and all rights to appeal or contest, will make all repairs, additions, alterations or improvements necessary to comply with the terms of any final order or judgment, provided that if Landlord elects not to contest any alleged violation, Landlord will promptly make all repairs, additions, alterations or improvements necessary to comply with the notice of violation. Landlord represents and warrants to Tenant that, as of the date hereof, Landlord has not received written notice from any governmental agency that the Building is in violation of the ADA.

 

6.	Security Deposit.

 

6.01 As of the date hereof, the Security Deposit is being held by Landlord as more fully provided in Section 6.02 below. The Security Deposit shall be held by Landlord without liability for interest (unless required by Law) as security for the performance of Tenant’s obligations. The Security Deposit is not an advance payment of Rent or a measure of Tenant’s liability for damages. Landlord may use all or a portion of the Security Deposit to satisfy past due Rent or to cure any Default (defined in Section 18) by Tenant. If Landlord uses any portion of the Security Deposit, Tenant shall, within 5 days after demand, restore the Security Deposit to its original amount. Landlord shall return any unapplied portion of the Security Deposit to Tenant within 45 days after the latest to occur of: (a) determination of Tenant’s Pro Rata Share of Expenses and Taxes for the final calendar year of the Term; (b) the Termination Date; or (c) the date Tenant surrenders possession of the Premises to Landlord in compliance with Section 25. If Landlord transfers its interest in the Premises, Landlord may assign the Security Deposit to the successor or transferee and, following the assignment, Landlord shall have no further liability for the return of the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its other accounts.

 

3

6.02 Landlord acknowledges that, as of the date hereof, Landlord holds the amount of $113,602.00 as a security deposit under the Prior Lease (the “ Existing Security ”). Notwithstanding anything else herein or in the Prior Lease to the contrary, (i) the Existing Security shall also be held by Landlord as the Security Deposit under this Lease; (ii) if Landlord uses any portion of the Existing Security pursuant to the Prior Lease, Tenant shall, within 5 days after demand, restore the Existing Security to its original amount; and (iii) from and after the date, if any, on which Landlord becomes required to return all or any portion of the Existing Security to Tenant under the terms of the Prior Lease (or under applicable law with respect to the Prior Lease), the Existing Security shall continue to be held by Landlord as the Security Deposit hereunder.

 

7.	Building Services.

 

7.01 Landlord shall furnish Tenant with the following services: (a) water for use in the Base Building lavatories; (b) customary heat, ventilation and air conditioning in season during Building Service Hours, at such temperatures and in such amounts as are reasonably appropriate for comparable buildings or as required by applicable Law. Tenant shall have the right to receive HVAC service during hours other than Building Service Hours by paying Landlord’s then standard charge for additional HVAC service and providing such prior notice as is reasonably specified by Landlord; (c) standard janitorial service on Business Days; (d) Elevator service at all times (except as otherwise provided herein); (e) Electricity to the Premises for general office use, in accordance with the terms and conditions in Section 7.02; and (f) such other services as Landlord reasonably determines are necessary or appropriate for the Property.

 

7.02 Electricity used by Tenant in the Premises shall be separately metered and shall be paid for by Tenant by a separate charge billed by the applicable utility company, which charge shall be payable directly by Tenant to such utility company or, at Landlord’s option, by Landlord (in which event Tenant shall pay to Landlord, within ten (10) days after written demand, any such charge paid or to be paid by Landlord).

 

7.03 Landlord’s failure to furnish, or any interruption, diminishment or termination of services due to the application of Laws, the failure of any equipment, the performance of repairs, improvements or alterations, utility interruptions or the occurrence of an event of Force Majeure (defined in Section 26.03) (collectively a “ Service Failure ”) shall not render Landlord liable to Tenant, constitute a constructive eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement. However, if the Premises, or a material portion of the Premises, are made commercially unusable for a period in excess of 3 consecutive Business Days as a result of a Service Failure that is reasonably within the control of Landlord to correct, then Tenant, as its sole remedy, shall be entitled to receive an abatement of Rent payable hereunder during the period beginning on the 4 ^th consecutive Business Day of the Service Failure and ending on the day the service has been restored. If the entire Premises have not been rendered commercially unusable by the Service Failure, the amount of abatement that Tenant is entitled to receive shall be equitably prorated based upon the percentage of the rentable square footage of the Premises that is rendered commercially unusable and not used by Tenant.

 

8.	Leasehold Improvements.

 

All improvements in and to the Premises, including any Alterations (collectively, “ Leasehold Improvements ”) shall remain upon the Premises at the end of the Term without compensation to Tenant. However, by written notice to Tenant at least 30 days prior to the Termination Date, Landlord may require Tenant, at its expense, to remove (a) any Cable (defined in Section 9.01) installed by or for the benefit of Tenant, and (b) any Identified Alterations or other Alterations installed after the date hereof that, in Landlord’s reasonable judgment, are of a nature that would require removal and repair costs that are materially in excess of the removal and repair costs associated with standard office improvements (collectively referred to as “ Required Removables ”). Required Removables shall include, without limitation, internal stairways, raised floors, personal baths and showers, vaults, rolling file systems and structural alterations and modifications. The designated Required Removables shall be removed by Tenant before the Termination Date, provided that, upon prior written notice delivered to Landlord at least 30 days before the Termination Date, Tenant may retain possession of the Premises for up to 5 days after the Termination Date for the sole purpose of removing the Required Removables, in which event Tenant’s possession of the Premises during such period shall be subject to all of the terms and conditions of this Lease, including the obligation to pay Base Rent and Additional Rent on a per diem basis at the rates in effect for the last month of the Term. Tenant shall repair damage caused by the installation or removal of Required Removables. If Tenant fails to perform its obligations in a timely manner, Landlord may perform such work, in which event Tenant, within 30 days after receipt of written request (together with an invoice) from Landlord, shall reimburse Landlord for the reasonable cost incurred by Landlord for such work. Notwithstanding the foregoing, Tenant, at the time it requests approval for a proposed Alteration, may request in writing that Landlord advise Tenant whether the Alteration or any portion of the Alteration will be a Required Removable. Within 10 days after receipt of Tenant’s request, Landlord shall advise Tenant in writing as to which portions of the Alteration, if any, will be Required Removables.

 

4

9.	Repairs and Alterations.

 

9.01 Tenant shall periodically inspect the Premises to identify any conditions that are dangerous or in need of maintenance or repair. Tenant shall promptly provide Landlord with notice of any such conditions. Tenant shall, at its sole cost and expense, perform all maintenance and repairs to the Premises that are not Landlord’s express responsibility under this Lease, and keep the Premises in good condition and repair, reasonable wear and tear excepted. Tenant’s repair and maintenance obligations include, without limitation, repairs to: (a) floor covering; (b) interior partitions; (c) doors; (d) the interior side of demising walls; (e) electronic, phone and data cabling and related equipment that is installed by or for the exclusive benefit of Tenant (collectively, “ Cable ”); (f) supplemental air conditioning units, kitchens, including hot water heaters, plumbing, and similar facilities exclusively serving Tenant; and (g) Alterations. To the extent Landlord is not reimbursed by insurance proceeds, Tenant shall reimburse Landlord for the cost of repairing damage to the Building caused by the acts of Tenant, Tenant Related Parties and their respective contractors and vendors. If Tenant fails to make any repairs to the Premises for which Tenant is responsible hereunder for more than 15 days after written notice from Landlord (although notice shall not be required in an emergency), Landlord may make the repairs, in which event Tenant, within 30 days after receipt of written request (together with an invoice) from Landlord, shall pay to Landlord the reasonable cost of the repairs, together with an administrative charge in an amount equal to 10% of the cost of the repairs.

 

9.02 Landlord shall keep and maintain in good repair and working order and make repairs to and perform maintenance upon the: (a) structural elements of the Building; (b) mechanical (including HVAC), electrical, plumbing and fire/life safety systems serving the Building in general; (c) Common Areas; (d) roof of the Building; (e) exterior windows of the Building; and (f) elevators serving the Building. Landlord shall promptly make repairs for which Landlord is responsible.

 

9.03 Tenant shall not make alterations, repairs, additions or improvements or install any Cable (collectively referred to as “ Alterations ”) without first obtaining the written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed. However, Landlord’s consent shall not be required for any Alteration that satisfies all of the following criteria (a “ Cosmetic Alteration ”): (a) is of a cosmetic nature such as painting, wallpapering, hanging pictures and installing carpeting; (b) is not visible from the exterior of the Premises or Building; (c) will not affect the systems or structure of the Base Building; and (d) does not require work to be performed inside the walls or above the ceiling of the Premises. However, even though Landlord’s consent is not required, the performance of Cosmetic Alterations shall be subject to all the other provisions of this Section 9.03. Prior to starting work, Tenant shall furnish Landlord with plans and specifications; names of contractors reasonably acceptable to Landlord (provided that Landlord may designate specific contractors with respect to Base Building); required permits and approvals; evidence of contractor’s and subcontractor’s insurance in amounts reasonably required by Landlord and naming Landlord as an additional insured; and any security for performance in amounts reasonably required by Landlord. Changes to the plans and specifications must also be submitted to Landlord for its approval. Alterations shall be constructed in a good and workmanlike manner using materials of a quality that, in Landlord’s reasonable judgment, is at least equal to the quality designated by Landlord as the minimum standard for the Building. Within 30 days after receipt of written request (together with an invoice) from Landlord, Tenant shall reimburse Landlord for any reasonable sums paid by Landlord for third party examination of Tenant’s plans for non-Cosmetic Alterations. In addition, within 30 days after receipt of written request from Landlord, Tenant shall pay Landlord a fee for Landlord’s oversight and coordination of any non-Cosmetic Alterations equal to 10% of the cost of such non-Cosmetic Alterations. Upon completion, Tenant shall furnish “as-built” plans for non-Cosmetic Alterations, completion affidavits and full and final waivers of lien. Landlord’s approval of an Alteration shall not be deemed a representation by Landlord that the Alteration complies with Law.

 

10.	Entry by Landlord.

 

Landlord may enter the Premises to inspect, show or clean the Premises or to perform or facilitate the performance of repairs, alterations or additions to the Premises or any portion of the Building. Except in emergencies or to provide Building services after Building Service Hours, Landlord shall provide Tenant with reasonable prior oral notice of entry and shall use reasonable efforts to minimize any interference with Tenant’s use of the Premises. If reasonably necessary to protect the safety of Tenant or its employees, Landlord may temporarily close all or a portion of the Premises to perform repairs, alterations and additions. However, except in emergencies, Landlord will not close the Premises if the work can reasonably be completed on weekends and after Building Service Hours. Entry by Landlord in compliance with this Section 10 shall not constitute a constructive eviction or entitle Tenant to an abatement or reduction of Rent.

 

11.	Assignment and Subletting.

 

11.01 Except in connection with a Permitted Transfer (defined in Section 11.04), Tenant shall not assign, sublease, transfer or encumber any interest in this Lease or allow any third party to use any portion of the Premises (collectively or individually, a “ Transfer ”) without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed if Landlord does not

 

5

exercise its recapture rights under Section 11.02. If any entity which, directly or indirectly, controls the voting shares/rights of Tenant changes at any time, such change of ownership or control shall constitute a Transfer unless Tenant is an entity (an “ Exempt Entity ”) (a) whose outstanding stock is listed on a recognized securities exchange or (b) at least 51% of whose voting stock is owned by another entity, the voting stock of which is listed on a recognized securities exchange. Any attempted Transfer in violation of this Section (other than a Transfer consisting of a change in ownership or control of Tenant) is voidable by Landlord. In no event shall any Transfer, including a Permitted Transfer, release or relieve Tenant from any obligation under this Lease.

 

11.02 Tenant shall provide Landlord with financial statements for the proposed transferee, a fully executed copy of the proposed assignment, sublease or other Transfer documentation and such other information as Landlord may reasonably request. Within 15 Business Days after receipt of the required information and documentation, Landlord shall either: (a) consent to the Transfer by execution of a consent agreement in a form reasonably designated by Landlord; (b) reasonably refuse to consent to the Transfer in writing; or (c) in the event of an assignment of this Lease or subletting of more than 40% of the Rentable Square Footage of the Premises for more than 60% of the remaining Term (excluding unexercised options), recapture the portion of the Premises that Tenant is proposing to Transfer. If Landlord exercises its right to recapture, this Lease shall automatically be amended (or terminated if the entire Premises is being assigned or sublet) to delete the applicable portion of the Premises effective on the proposed effective date of the Transfer. Tenant shall pay Landlord a review fee of $1,500.00 for Landlord’s review of any Permitted Transfer or requested Transfer.

 

11.03 Tenant shall pay Landlord 50% of all rent and other consideration which Tenant receives with respect to the Premises or this Lease as a result of a Transfer that is in excess of the Rent payable to Landlord for the portion of the Premises and Term covered by the Transfer. Tenant shall pay Landlord for Landlord’s share of any such excess consideration within 30 days after Tenant’s receipt of such excess consideration. Tenant may deduct from the excess, on a straight-line basis, all reasonable and customary expenses directly incurred by Tenant attributable to the Transfer (other than Landlord’s review fee), including, without limitation, brokerage fees, legal fees and construction costs. If Tenant is in Default, Landlord may require that all sublease payments be made directly to Landlord, in which case Tenant shall receive a credit against Rent in the amount of Tenant’s share of payments received by Landlord.

 

11.04 Even if Tenant is not an Exempt Entity, Tenant may assign its entire interest in this Lease to a successor to Tenant by purchase, merger, consolidation or reorganization (an “ Ownership Change ”) or assign this Lease or sublet all or a portion of the Premises to an Affiliate without the consent of Landlord, provided that all of the following conditions are satisfied (a “ Permitted Transfer ”): (a) Tenant is not in Default; (b) in the event of an Ownership Change, Tenant’s successor shall own all or substantially all of the assets of Tenant and have a net worth which is at least equal to Tenant’s net worth as of the day prior to the proposed Ownership Change; (c) the Permitted Use does not allow the Premises to be used for retail purposes; and (d) Tenant shall give Landlord written notice at least 15 Business Days prior to the effective date of the Permitted Transfer. Tenant’s notice to Landlord shall include information and documentation evidencing the Permitted Transfer and showing that each of the above conditions has been satisfied. If Tenant’s successor is a different entity from Tenant, then, upon Landlord’s request, Tenant’s successor shall sign a commercially reasonable form of assumption agreement. “ Affiliate ” shall mean an entity controlled by, controlling or under common control with Tenant.

 

12.

Liens.

 

Tenant shall not permit mechanics’ or other liens to be placed upon the Property, Premises or Tenant’s leasehold interest in connection with any work or service done or purportedly done by or for the benefit of Tenant or its transferees. Tenant shall give Landlord notice at least 15 days prior to the commencement of any work in the Premises to afford Landlord the opportunity, where applicable, to post and record notices of non-responsibility. Tenant, within 10 days of written notice from Landlord, shall fully discharge any lien by settlement, by bonding or by insuring over the lien in the manner prescribed by the applicable lien Law. If Tenant fails to so discharge the lien, Landlord may bond, insure over or otherwise discharge the lien. Within 30 days after receipt of written notice (together with an invoice) from Landlord, Tenant shall reimburse Landlord for any amount paid by Landlord to bond, insure over or otherwise discharge the lien, including, without limitation, reasonable attorneys’ fees.

 

13.	Indemnity and Waiver of Claims.

 

Tenant hereby waives all claims against and releases Landlord and its trustees, members, principals, beneficiaries, partners, officers, directors, employees, Mortgagees (defined in Section 23) and agents (the “ Landlord Related Parties ”) from all claims for any injury to or death of persons, damage to property or business loss in any manner related to (a) Force Majeure, (b) acts of third parties, (c) the bursting or leaking of any tank, water closet, drain or other pipe, (d) the inadequacy or failure of any security services, personnel or equipment, or (e) any matter not within the reasonable control of Landlord. Notwithstanding the foregoing, except as provided in Section 15 to the contrary, Tenant shall not be required to waive any claims against Landlord for loss or damage (other than loss or damage to Tenant’s business) to the extent such loss or damage is due to the negligence or willful misconduct of

 

6

Landlord or any of the Landlord Related Parties. Except to the extent caused by the negligence or willful misconduct of Landlord or any Landlord Related Parties, Tenant shall indemnify, defend and hold Landlord and Landlord Related Parties harmless against and from all liabilities, obligations, damages, penalties, claims, actions, costs, charges and expenses, including, without limitation, reasonable attorneys’ fees and other professional fees (if and to the extent permitted by Law) (collectively referred to as “ Losses ”), which may be imposed upon, incurred by or asserted against Landlord or any of the Landlord Related Parties by any third party and arising out of or in connection with any damage or injury occurring in the Premises or any acts or omissions (including violations of Law) of Tenant, the Tenant Related Parties or any of Tenant’s transferees, contractors or licensees. Except to the extent caused by the negligence or willful misconduct of Tenant or any Tenant Related Parties, Landlord shall indemnify, defend and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees and agents (“ Tenant Related Parties ”) harmless against and from all Losses which may be imposed upon, incurred by or asserted against Tenant or any of the Tenant Related Parties by any third party and arising out of or in connection with the acts or omissions (including violations of Law) of Landlord or the Landlord Related Parties.

 

14.	Insurance.

 

Tenant shall maintain the following insurance (“ Tenant’s Insurance ”): (a) Commercial General Liability Insurance applicable to the Premises and its appurtenances providing, on an occurrence basis, a minimum combined single limit of $2,000,000.00; (b) Property/Business Interruption Insurance written on an All Risk or Special Perils form, with coverage for broad form water damage including earthquake sprinkler leakage, at replacement cost value and with a replacement cost endorsement covering all of Tenant’s business and trade fixtures, equipment, movable partitions, furniture, merchandise and other personal property within the Premises (“ Tenant’s Property ”) and any Leasehold Improvements performed by or for the benefit of Tenant; (c) Workers’ Compensation Insurance in amounts required by Law; and (d) Employers Liability Coverage of at least $1,000,000.00 per occurrence (provided that if this coverage is unavailable from the Worker’s Compensation carrier or applicable State Fund, a “Stop Gap Liability” endorsement to the Commercial General Liability Policy is acceptable). Any company writing Tenant’s Insurance shall have an A.M. Best rating of not less than A-VIII. All Commercial General Liability Insurance policies shall name as additional insureds Landlord (or its successors and assignees) and the managing agent for the Building (or any successor. Each policy of Tenant’s Insurance shall contain an endorsement that the insurer shall give Landlord and its designees at least 30 days’ advance written notice of any cancellation, termination, material change or lapse of the insurance provided by such policy (provided, however, that, at Tenant’s option, Landlord shall accept, in lieu of any such endorsement, a certificate of insurance containing the following language: “Should any of the policies described herein be cancelled, or modified so that the insured named herein fails to comply with its obligations under Section 14 of the Office Lease Agreement dated as of January 1, 2004 between such insured and the certificate holder named herein, as amended from time to time, relating to the premises located at 1800-114th Avenue SE, Bellevue, Washington, before the expiration date of such policy, the insurer affording coverage will mail 30 days’ advance written notice to the certificate holder named herein; provided, however, that such insurer will mail 10 days’ advance written notice to such certificate holder in the event of cancellation due to non-payment of premiums.”). Tenant shall provide Landlord with a certificate of insurance evidencing Tenant’s Insurance prior to the earlier to occur of the Commencement Date or the date Tenant is provided with possession of the Premises, and thereafter as necessary to assure that Landlord always has current certificates evidencing Tenant’s Insurance. So long as the same is available at commercially reasonable rates, Landlord shall maintain so called All Risk property insurance on the Building at replacement cost value as reasonably estimated by Landlord.

 

15.	Subrogation.

 

Notwithstanding anything in this Lease to the contrary, Landlord and Tenant hereby waive and shall cause their respective insurance carriers to waive any and all rights of recovery, claims, actions or causes of action against the other or any of its respective trustees, principals, beneficiaries, partners, officers, directors, employees or agents for any loss or damage that may occur to Landlord, Tenant or any party claiming by, through or under Landlord or Tenant, as the case may be, with respect to Tenant’s Property, Leasehold Improvements, the Building, the Premises, or any contents thereof, including all rights or recovery, claims, actions or causes of action arising out of the negligence of Landlord, any Landlord Related Parties, Tenant or any Tenant Related Parties, which loss or damage is (or would have been, had the insurance required by this Lease been carried) covered by insurance.

 

16.	Casualty Damage.

 

16.01 If all or any portion of the Premises becomes commercially unusable by fire or other casualty to the Premises (collectively a “ Casualty ”), Landlord, with reasonable promptness, shall cause a general contractor selected by Landlord to provide Landlord and Tenant with a written estimate of the amount of time required using standard working methods to Substantially Complete the repair and restoration of the Premises and any Common Areas necessary to provide access to the Premises (“ Completion Estimate ”). If the Completion Estimate indicates that the Premises or any Common Areas necessary to provide access to the Premises cannot be made tenantable within 210 days from the date the repair and

 

7

restoration is started, then either party shall have the right to terminate this Lease upon written notice to the other within 10 Business Days after receipt of the Completion Estimate. Tenant, however, shall not have the right to terminate this Lease if the Casualty was caused by the negligence or intentional misconduct of Tenant or any Tenant Related Parties. In addition, Landlord, by notice to Tenant within 90 days after the date of the Casualty, shall have the right to terminate this Lease if: (1) the Premises have been materially damaged and there is less than 2 years of the Term remaining on the date of the Casualty; (2) any Mortgagee requires that the insurance proceeds be applied to the payment of the mortgage debt; or (3) a material uninsured loss to the Building occurs.

 

16.02 If this Lease is not terminated, Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control, restore the Premises and Common Areas. Such restoration shall be to substantially the same condition that existed prior to the Casualty, except for modifications required by Law or any other modifications to the Common Areas deemed desirable by Landlord. Upon notice from Landlord, Tenant shall assign to Landlord (or to any party designated by Landlord) all property insurance proceeds payable to Tenant under Tenant’s Insurance with respect to any Leasehold Improvements performed by or for the benefit of Tenant; provided if the estimated cost to repair such Leasehold Improvements (as reasonably determined by Landlord assuming that such repair will be performed pursuant to a construction contract providing for a guaranteed maximum price) exceeds the amount of insurance proceeds received by Landlord from Tenant’s insurance carrier, the excess cost of such repairs shall be paid by Tenant to Landlord prior to Landlord’s commencement of repairs. Landlord shall not be liable for any inconvenience to Tenant, or injury to Tenant’s business resulting in any way from the Casualty or the repair thereof. Provided that Tenant is not in Default, during any period of time that all or a material portion of the Premises is rendered commercially unusable as a result of a Casualty, the Rent shall abate for the portion of the Premises that is commercially unusable and not used by Tenant.

 

17.	Condemnation.

 

Either party may terminate this Lease if the whole or any material part of the Premises is taken or condemned for any public or quasi-public use under Law, by eminent domain or private purchase in lieu thereof (a “ Taking ”). Landlord shall also have the right to terminate this Lease if there is a Taking of any portion of the Building or Property which would render the remainder of the Building commercially unusable as an office building in a manner comparable to the Building’s use before the Taking. The terminating party shall provide written notice of termination to the other party within 45 days after it first receives notice of the Taking. Any such termination shall be effective as of the date the physical taking occurs. If this Lease is not terminated, Base Rent, the Rentable Square Footage of the Building, the Rentable Square Footage of the Premises (if applicable), and Tenant’s Pro Rata Share shall be appropriately adjusted. All compensation awarded for a Taking shall be the property of Landlord. The right to receive compensation or proceeds are expressly waived by Tenant, however, Tenant may file a separate claim for Tenant’s Property and Tenant’s reasonable relocation expenses, provided the filing of the claim does not diminish the amount of Landlord’s award. If only a part of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with reasonable diligence, will restore the remaining portion of the Premises as nearly as practicable to the condition immediately prior to the Taking.

 

18.	Events of Default.

 

18.01 Each of the following occurrences shall be a “ Default ”: (a) Tenant’s failure to pay any portion of Rent when due, if the failure continues for 3 Business Days after written notice to Tenant (“ Monetary Default ”); (b) Tenant’s failure (other than a Monetary Default) to comply with any term, provision, condition or covenant of this Lease, if the failure is not cured within 20 days after written notice to Tenant provided, however, if Tenant’s failure to comply cannot reasonably be cured within 20 days, Tenant shall be allowed additional time (not to exceed 60 days) as is reasonably necessary to cure the failure so long as Tenant begins the cure within 20 days and diligently pursues the cure to completion; (c) Tenant or any Guarantor becomes insolvent, makes a transfer in fraud of creditors, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts when due or forfeits or loses its right to conduct business; (d) the leasehold estate is taken by process or operation of Law; (e) in the case of any ground floor or retail Tenant, Tenant does not take possession of or abandons or vacates all or any portion of the Premises; or (f) Tenant is in default beyond any notice and cure period under any other lease or agreement with Landlord at the Building or Property. All notices sent under this Section shall be in satisfaction of, and not in addition to, notice required by Law.

 

18.02 Landlord shall be in default under this Lease if (i) Landlord fails to perform any of its obligations hereunder and said failure continues for a period of 60 days after written notice thereof from Tenant to Landlord (provided that if such failure cannot reasonably be cured within said 60 day period, Landlord shall be in default hereunder only if Landlord fails to commence the cure of said failure within said 60 day period, or having commenced the curative action within said 60 day period, fails to diligently pursue same) and (ii) each Mortgagee (as defined in Section 23) of whose identity Tenant has been notified in writing shall have failed to cure such default within 30 days (or such longer period of time as may be specified in any written agreement between Tenant and Mortgagee regarding such matter) after receipt of written notice from Tenant of Landlord’s failure to cure within the time periods provided above. In the event of a default by Landlord under the Lease, Tenant shall use reasonable efforts to mitigate its

 

8

damages and losses arising from any such default and Tenant may pursue any and all remedies available to it at law or in equity, provided, however, in no event shall Tenant claim a constructive or actual eviction or that the Premises have become unsuitable or unhabitable prior to a default and failure to cure by Landlord and its Mortgagee under this Lease and, further provided, in no event shall Tenant be entitled to receive more than its actual direct damages, it being agreed that Tenant hereby waives any claim it otherwise may have for special or consequential damages.

 

19.

Remedies.

 

19.01 Upon Default, Landlord shall have the right to pursue any one or more of the following remedies:

 

(a) Terminate this Lease, in which case Tenant shall immediately surrender the Premises to Landlord. If Tenant fails to surrender the Premises, Landlord, in compliance with Law, may enter upon and take possession of the Premises and remove Tenant, Tenant’s Property and any party occupying the Premises. Tenant shall pay Landlord, on demand, all past due Rent and other losses and damages Landlord suffers as a result of Tenant’s Default, including, without limitation, all Costs of Reletting (defined below) and any deficiency that may arise from reletting or the failure to relet the Premises. “ Costs of Reletting ” shall include all reasonable costs and expenses incurred by Landlord in reletting or attempting to relet the Premises, including, without limitation, reasonable legal fees, brokerage commissions, the cost of alterations and the value of other concessions or allowances granted to a new tenant.

 

(b) Terminate Tenant’s right to possession of the Premises and, in compliance with Law, remove Tenant, Tenant’s Property and any parties occupying the Premises. Landlord may (but shall not be obligated to) relet all or any part of the Premises, without notice to Tenant, for such period of time and on such terms and conditions (which may include concessions, free rent and work allowances) as Landlord in its absolute discretion shall determine. Landlord may collect and receive all rents and other income from the reletting. Tenant shall pay Landlord on demand all past due Rent, all Costs of Reletting and any deficiency arising from the reletting or failure to relet the Premises. The re-entry or taking of possession of the Premises shall not be construed as an election by Landlord to terminate this Lease.

 

19.02 In lieu of calculating damages under Section 19.01, Landlord may elect to receive as damages the sum of (a) all Rent accrued through the date of termination of this Lease or Tenant’s right to possession, and (b) an amount equal to the total Rent that Tenant would have been required to pay for the remainder of the Term discounted to present value, minus the then present fair rental value of the Premises for the remainder of the Term, similarly discounted, after deducting all anticipated Costs of Reletting. If Tenant is in Default of any of its non-monetary obligations under the Lease, Landlord shall have the right to perform such obligations. Within five (5) Business Days after receipt of written demand from Landlord, Tenant shall reimburse Landlord for the cost of such performance together with an administrative charge equal to 10% of the reasonable cost of the work performed by Landlord. The repossession or re-entering of all or any part of the Premises shall not relieve Tenant of its liabilities and obligations under this Lease. No right or remedy of Landlord shall be exclusive of any other right or remedy. Each right and remedy shall be cumulative and in addition to any other right and remedy now or subsequently available to Landlord at Law or in equity.

 

20.	Limitation of Liability.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE LESSER OF (A) THE INTEREST OF LANDLORD IN THE PROPERTY, OR (B) THE EQUITY INTEREST LANDLORD WOULD HAVE IN THE PROPERTY IF THE PROPERTY WERE ENCUMBERED BY THIRD PARTY DEBT IN AN AMOUNT EQUAL TO 70% OF THE VALUE OF THE PROPERTY. TENANT SHALL LOOK SOLELY TO LANDLORD’S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN SECTION 23 BELOW), NOTICE AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

 

21.	Relocation. [Intentionally Omitted]

 

22.	Holding Over.

 

If Tenant fails to surrender all or any part of the Premises upon the expiration or earlier termination of this Lease (and the expiration or termination of any right Tenant may have to possess the Premises

 

9

pursuant to Section 8 above), occupancy of the Premises after such expiration or termination shall be that of a tenancy at sufferance. Tenant’s occupancy of the Premises during such period shall be subject to all the terms and provisions of this Lease, and Tenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to 150% of the sum of the Base Rent and Additional Rent due for the period immediately preceding the holdover. No holdover by Tenant or payment by Tenant after the expiration or earlier termination of this Lease (and the expiration or termination of any right Tenant may have to possess the Premises pursuant to Section 8 above) shall be construed to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. If Landlord is unable to deliver possession of the Premises to a new tenant or to perform improvements for a new tenant as a result of any holdover by Tenant which is not permitted hereunder and Tenant fails to vacate the Premises within 15 days after Landlord notifies Tenant in writing of Landlord’s inability to deliver possession or perform improvements, then, in addition to the payment of the amounts described above, Tenant shall be liable to Landlord for all damages, including, without limitation, consequential damages, that Landlord suffers from the holdover.

 

23.	Subordination to Mortgages; Estoppel Certificate.

 

Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising upon the Premises, the Building or the Property, and to renewals, modifications, refinancings and extensions thereof (collectively referred to as a “ Mortgage ”). The party having the benefit of a Mortgage shall be referred to as a “ Mortgagee ”. This clause shall be self-operative, but upon request from a Mortgagee, Tenant shall execute a commercially reasonable subordination agreement in favor of the Mortgagee. In lieu of having the Mortgage be superior to this Lease, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. If requested by a successor-in-interest to Landlord’s interest in this Lease, Tenant, without charge, shall attorn to such successor-in-interest. Landlord and Tenant shall each, within 10 days after receipt of a written request from the other, execute and deliver a commercially reasonable estoppel certificate to those parties as are reasonably requested by the other (including a Mortgagee or prospective purchaser). Without limitation, such estoppel certificate may include a certification as to the status of this Lease, the existence of any defaults and the amount of Rent that is due and payable.

 

Notwithstanding the foregoing in this Section 23 to the contrary, as a condition precedent to the future subordination of this Lease to a future Mortgage, Landlord shall be required to provide Tenant with a non-disturbance, subordination, and attornment agreement in favor of Tenant from any Mortgagee who comes into existence after the Commencement Date. Such non-disturbance, subordination, and attornment agreement in favor of Tenant shall provide that, so long as Tenant is paying the Rent due under the Lease and is not otherwise in default under the Lease beyond any applicable cure period, its right to possession and the other terms of the Lease shall remain in full force and effect. Such non-disturbance, subordination, and attornment agreement may include other commercially reasonable provisions in favor of the Mortgagee, including, without limitation, additional time on behalf of the Mortgagee to cure defaults of the Landlord and provide that (a) neither Mortgagee nor any successor-in-interest shall be bound by (i) any payment of the Base Rent, Additional Rent, or other sum due under this Lease for more than 1 month in advance or (ii) any amendment or modification of the Lease made without the express written consent of Mortgagee or any successor-in-interest; (b) neither Mortgagee nor any successor-in-interest will be liable for (i) any act or omission or warranties of any prior landlord (including Landlord), (ii) the breach of any warranties or obligations relating to construction of improvements on the Property or any tenant finish work performed or to have been performed by any prior landlord (including Landlord), or (iii) the return of any security deposit, except to the extent such deposits have been received by Mortgagee; and (c) neither Mortgagee nor any successor-in-interest shall be subject to any offset or defense which Tenant might have against any prior landlord (including Landlord) unless such offset or defense arises from a default under this Lease by such prior landlord and Tenant has provided Mortgagee with timely written notice and a reasonable opportunity to cure such default.

 

Landlord represents and warrants to Tenant that, to Landlord’s knowledge, no Mortgage exists as of the date of this Lease.

 

24.

Notice.

 

All demands, approvals, consents or notices (collectively referred to as a “ notice ”) shall be in writing and delivered by hand or sent by registered or certified mail with return receipt requested or sent by overnight or same day courier service at the party’s respective Notice Address(es) set forth in Section 1. Each notice shall be deemed to have been received on the earlier to occur of actual delivery or the date on which delivery is refused, or, if Tenant has vacated the Premises or any other Notice Address of Tenant without providing a new Notice Address, 3 days after notice is deposited in the U.S. mail or with a courier service in the manner described above. Either party may, at any time, change its Notice Address (other than to a post office box address) by giving the other party written notice of the new address.

 

10

25.	Surrender of Premises.

 

Upon the expiration or earlier termination of this Lease or Tenant’s right of possession (and the expiration or termination of any right Tenant may have to possess the Premises pursuant to Section 8 above), Tenant shall remove Tenant’s Property from the Premises, and quit and surrender the Premises to Landlord, broom clean, and in good order, condition and repair, ordinary wear and tear and damage which Landlord is obligated to repair hereunder excepted. If Tenant fails to remove any of Tenant’s Property within 2 Business Days after the expiration or termination of this Lease or Tenant’s right to possession (and the expiration or termination of any right Tenant may have to possess the Premises pursuant to Section 8 above), Landlord, at Tenant’s sole cost and expense, shall be entitled (but not obligated) to remove and store Tenant’s Property. Landlord shall not be responsible for the value, preservation or safekeeping of Tenant’s Property. Tenant shall pay Landlord, upon demand, the expenses and storage charges incurred. If Tenant fails to remove Tenant’s Property from the Premises or storage, within 30 days after written notice, Landlord may deem all or any part of Tenant’s Property to be abandoned and title to Tenant’s Property shall vest in Landlord.

 

26.	Miscellaneous.

 

26.01 This Lease and the rights and obligations of the parties hereunder shall be interpreted, construed and enforced in accordance with the Laws of the state or commonwealth in which the Building is located and Landlord and Tenant hereby irrevocably consent to the jurisdiction and proper venue of such state or commonwealth. If any term or provision of this Lease shall to any extent be void or unenforceable, the remainder of this Lease shall not be affected. If there is more than one Tenant or if Tenant is comprised of more than one party or entity, the obligations imposed upon Tenant shall be joint and several obligations of all the parties and entities, and requests or demands from any one person or entity comprising Tenant shall be deemed to have been made by all such persons or entities. Notices to any one person or entity shall be deemed to have been given to all persons and entities. Tenant represents and warrants to Landlord that each individual executing this Lease on behalf of Tenant is authorized to do so on behalf of Tenant and that Tenant is not, and the entities or individuals constituting Tenant or which may own or control Tenant or which may be owned or controlled by Tenant are not, among the individuals or entities identified on any list compiled pursuant to Executive Order 13224 for the purpose of identifying suspected terrorists.

 

26.02 If either party institutes a suit against the other for violation of or to enforce any covenant, term or condition of this Lease, the prevailing party shall be entitled to all of its costs and expenses, including, without limitation, reasonable attorneys’ fees. Landlord and Tenant hereby waive any right to trial by jury in any proceeding based upon a breach of this Lease. Either party’s failure to declare a default immediately upon its occurrence, or delay in taking action for a default, shall not constitute a waiver of the default, nor shall it constitute an estoppel.

 

26.03 Whenever a period of time is prescribed for the taking of an action by Landlord or Tenant (other than the payment of the Security Deposit or Rent), the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist acts, civil disturbances and other causes beyond the reasonable control of the performing party (“ Force Majeure ”).

 

26.04 Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations under this Lease and in the Building and Property. Upon transfer Landlord shall be released from any further obligations hereunder and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations, provided that, any successor pursuant to a voluntary, third party transfer (but not as part of an involuntary transfer resulting from a foreclosure or deed in lieu thereof) shall have assumed Landlord’s obligations under this Lease.

 

26.05 Landlord has delivered a copy of this Lease to Tenant for Tenant’s review only and the delivery of it does not constitute an offer to Tenant or an option.

 

(a) Tenant represents that it has dealt directly with and only with Tenant’s Broker as a broker in connection with this Lease. Tenant shall indemnify and hold Landlord and the Landlord Related Parties harmless from all claims of any other brokers claiming to have represented Tenant in connection with this Lease. Landlord agrees to indemnify and hold Tenant and the Tenant Related Parties harmless from all claims of any brokers claiming to have represented Landlord in connection with this Lease.

 

(b) Agency Disclosure. At the signing of this Lease, Landlord’s leasing agent, Sharon Johnson of Equity Office Properties Management Corp. represented x Landlord, ¨ Tenant, or ¨ both Landlord and Tenant. At the signing of this Lease, Tenant’s agent, Bruce Raskin and Bret Jordan of Raskin & Associates, represented ¨ Landlord, x Tenant, or ¨ both Landlord and Tenant. Each party signing this document confirms that the prior oral and/or written disclosure of agency was provided to such party in this transaction, as required by RCW 18.86.030(1)(g).

 

11

(c) Landlord and Tenant, by their execution of this Lease, each acknowledge and agree that they have timely received a pamphlet on the law of real estate agency as required under RCW 18.86.030(1)(f).

 

26.06 Time is of the essence with respect to Tenant’s exercise of any expansion, renewal or extension rights granted to Tenant. The expiration of the Term, whether by lapse of time, termination or otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or termination of this Lease.

 

26.07 Tenant may peacefully have, hold and enjoy the Premises, subject to the terms of this Lease, provided Tenant pays the Rent and fully performs all of its covenants and agreements. This covenant shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Building.

 

26.08 This Lease does not grant any rights to light or air over or about the Building. Landlord excepts and reserves exclusively to itself any and all rights not specifically granted to Tenant under this Lease. This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings related to the Premises, including all lease proposals, letters of intent and other documents. Neither party is