Exhibit 10.21
SUBLEASE
THIS SUBLEASE
is entered into December 10,
2007 between drugstore.com, Inc., a Delaware corporation
(“ Subtenant ”), and ROD ASHER AND
ASSOCIATES, LTD., a Washington corporation (“
Sublandlord ”).
RECITALS
A. Sublandlord has leased from
EOP-NORTHWEST PROPERTIES, L.L.C., a Delaware limited liability
company, as predecessor in interest to W2007 SEATTLE OFFICE ONE
BELLEVUE CENTER REALTY, LLC, a Delaware limited liability company
(“ Master Landlord ”) certain premises described
in the Office Lease Agreement dated March 3, 2004, between
Master Landlord and Sublandlord. A copy of the referenced lease is
attached as Exhibit A to this Sublease (the “
Master Lease ”).
B. The premises
under the Master Lease are composed of approximately 3,206 rentable
square feet of space (as re-measured in 2007, but as incorrectly
identified in the Master Lease as 3,138 rentable square feet) on
the twentieth (20th) floor, as depicted on the attached
Exhibit B (the “ Master Lease Premises
”) in a building commonly called “One Bellevue
Center” located at 411 108 th Avenue N.E., Bellevue,
Washington, 98004 (the “ Building ”).
C. Subtenant desires to sublease
from Sublandlord and Sublandlord desires to sublease to Subtenant a
portion of the Master Lease Premises in the amount of 1,364
rentable square feet (the “ Sublease Premises ”)
on the terms and conditions set forth in this Sublease (the “
Sublease ”). The Sublease Premises are that portion of
the Master Lease Premises depicted on Exhibit B by
cross-hatching.
D. Except as specifically set forth
herein, all capitalized terms used in this Sublease shall have the
meanings set forth in the Master Lease.
AGREEMENT
NOW, THEREFORE
, in consideration of the rent
payable hereunder, the mutual covenants contained herein, and other
good and valuable consideration, the parties agree as
follows:
1. AGREEMENT TO
SUBLEASE . Subject to Master Landlord’s written
consent to the terms of this Sublease (“ Master
Landlord’s Consent ”), Sublandlord hereby subleases
the Sublease Premises to Subtenant and Subtenant hereby subleases
the Sublease Premises from Sublandlord on the terms and conditions
set forth in this Sublease. The recitals set forth above are
incorporated into this Sublease as part of the agreement by this
reference.
2. TERM . The term of
this Sublease shall be for a period of twelve (12) calendar
months commencing on January 1, 2008 and ending on
December 31, 2008, unless sooner terminated as provided herein
or in the Master Lease (the “ Term
”).
2.1 Extension of Term
. The Term may be extended at Subtenant’s election for the
remaining seven (7) month term of the Master Lease, which term
expires on July 31, 2009. If the Subtenant elects to extend
the Term of this Sublease, then the extended Term shall end on
July 30, 2009. Subtenant may elect to extend the Term by
providing Sublandlord written notice of its exercise of the
extension of the Term on or before November 1, 2008. If the
Term is extended by Subtenant’s election, then all the terms
of this Sublease continue in effect as written through the end of
the extended Term.
3. RENT .
3.1 Rent . Subtenant
covenants and agrees to pay rent to Sublandlord on a full service
basis, with no other amounts due hereunder absent Subtenant’s
default ( i.e ., “ Gross Rent ”) in
monthly installments during the Term in the total amount of $2,728
per month (which is calculated at an annual rate of $24 per
rentable square foot), on the first day of each calendar month
during the Term commencing January 1, 2008. Gross Rent,
together with any amounts payable under Section 3.2 below as
Additional Rent, constitutes Subtenant’s entire obligation
for rent of any kind under this Sublease, notwithstanding any
incorporated provision of the Master Lease.
3.2 Additional Rent .
While this Sublease is a fully serviced, gross rent sublease,
during the Term Subtenant is responsible to pay and shall pay
directly to the service providers when due all costs of telephone
and data connections and service provided to the Sublease Premises
(the “ Additional Rent ”). Gross Rent and
Additional Rent are sometimes herein referred to collectively as
“Rent.” Except for the Rent, Subtenant shall not be
required to pay any amounts due under the Master Lease.
3.3 Payment Terms .
Gross Rent is due and payable monthly in advance on or before the
first (1st) day of each month during the Term. The first
monthly installment of Gross Rent shall be paid upon the full
execution of this Sublease and delivery to Subtenant of the fully
signed Master Landlord’s consent to this Sublease. Additional
Rent shall be paid when due under Subtenant’s contracts with
its service providers. Should the first or last day of the Term be
adjusted by agreement of the parties or otherwise not fall on the
first or last day of a month, respectively, then Gross Rent shall
be prorated for that fractional month based on a thirty
(30) day month, and the appropriate amounts paid or refunded
within thirty (30) days after the adjusted date. If, following
the end of the Term, Subtenant has unpaid Rent obligations under
this Sublease, such payment obligations shall continue regardless
of the termination of the Sublease. Except as otherwise
specifically provided in this Sublease, Subtenant shall pay all
installments of Rent in lawful money without demand, and without
abatement, offset or deduction.
3.4 Payment
Address. All Gross Rent shall be paid to Sublandlord at
such address as Sublandlord may designate in writing. Initially
such payments shall be made to Rod Asher and Associates, Ltd., and
sent to 411 108 th Ave. N.E. Suite 2050, Bellevue,
Washington 98004, Attn: Rodney Blumenstein.
3.5 Failure to Pay. If
any payment of Gross Rent, or any other sum payable hereunder by
Subtenant to Sublandlord, shall not be paid on or before the fifth
(5th) day following the due date for the same provided herein,
such delinquent payment shall bear interest from the date due until
the date paid at the lesser of (a) the maximum rate allowed by
law, or (b) an annual interest rate of two percent
(2%) over the prime rate quoted by Bank of America,
N.T.
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& S.A. at its
downtown Seattle, Washington branch during the period such interest
accrues. Sublandlord agrees to give Subtenant notice of its failure
to receive payment of Rent before the fifth (5
th
) day following
the due date for Rent; provided failure to provide such notice
shall not affect the accrual of interest as provided in this
Section.
3.6 Security Deposit.
No security deposit is required from Subtenant.
4. EARLY ACCESS. At
any time following full execution of this Sublease, Subtenant may
enter the Sublease Premises by appointment for the purpose of
evaluating the space and any potential modifications that may be
necessary for its occupancy and to have its new telephone and data
cabling and services installed. Subtenant may enter the Sublease
Premises beginning at 8:00 a.m. local time on December 11,
2007 to install its furniture and equipment so that it may begin
its operations in the Sublease Premises on January 2, 2008.
Subtenant shall be fully responsible for all damage or claims that
may occur resulting from Subtenant’s acts during such period
before the first day of the Term.
5. USE. Subtenant
agrees that the Sublease Premises shall be used only for the
permitted uses set forth in the Master Lease, and for no other use
whatsoever without the express consent of the Sublandlord and
Master Landlord.
6. ACCEPTANCE OF THE SUBLEASE
PREMISES. Possession of the Sublease Premises shall be
delivered to Subtenant on the first day of the Term in broom clean
condition with all furniture and equipment removed (other than any
Sublandlord Personal Property as defined in Section 7), all in
accordance with the terms of this Sublease. Subject to satisfactory
completion of the work by Sublandlord described in Section 6.1
below to a standard accepted by the Master Landlord, Subtenant
accepts the Sublease Premises, the Sublandlord’s Personal
Property “AS IS” as of the first day of the Term, and
subject also to damage by Subtenant, its employees, agents or
invitees during any early access granted in this Sublease to allow
the installation of furniture and equipment; provided Sublandlord
represents and warrants that it has kept and maintained, and agrees
to keep and maintain, the Sublease Premises and its attendant
cabling and related electrical, telecommunications or data
transmission systems in good condition with no deferral of
maintenance, and as otherwise required of Sublandlord under the
Master Lease prior to the first day of the Term. Except as
otherwise provided herein, Sublandlord is not required to do any
work in, or make any improvements to, the Sublease Premises to
prepare the Sublease Premises for Subtenant’s occupancy other
than to deliver the Sublease Premises in broom clean condition on
the first day of the Term. Subtenant acknowledges and agrees that
neither Sublandlord nor Master Landlord has undertaken any other
obligation to make or agreed to make any alteration or improvements
to the Sublease Premises for Subtenant’s use or occupancy
thereof, except as otherwise set forth herein. If Subtenant desires
to alter or improve the Sublease Premises in any way, Subtenant
shall first obtain Master Landlord’s prior written consent to
any such alteration or improvement, and any such alterations or
improvements shall be made in accordance with the Master
Lease.
6.1 Improvements to the
Sublease Premises . Subtenant is expressly allowed to
install telephone and data services for the Sublease Premises, a
key pad security access system on the door leading to the Premises,
and locks on doors inside the Sublease Premises for its use during
the early access period provided in Section 4 above. Subtenant
shall have the right to install telephone and data equipment in the
telephone closet in the common
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hallway and have the closet locked
with access restricted to Subtenant, Sublandlord and Master
Landlord. Subtenant shall pay directly to its vendors all costs of
installing such services and equipment, including but not limited
to the costs of adding any electrical, telephone and data outlets,
jacks, wiring or cabling, adding an electrical key-pad security
system on the exterior public hall-way door leading into the
Sublease Premises, and adding door lock mechanisms throughout the
Sublease Premises, as needed. On or before the first day of the
Term, Sublandlord agrees to make and pay for the improvements
needed to demise Sublandlord’s retained portion of the Master
Lease Premises from the Sublease Premises, as more fully depicted
on Exhibit B hereto. Such work shall be as set forth in the
bid for construction services attached hereto as Exhibit C
which includes the construction of an interior demising wall across
the internal corridor of the Master Lease Premises finished with
paint the color of the remainder of the walls in the Sublease
Premises. Such work shall comply with the requirements of the
Master Lease. If additional work is required by the Master
Landlord, then either party shall have the right to terminate this
Sublease upon notice to the other within two (2) business days
following notice of the requirement for any such additional
work.
7. PERSONAL PROPERTY
. Subtenant may use the furniture, fixtures, electrical
wiring and telecommunications and data cabling located in the
Sublease Premises on the first day of the Term, including without
limitation the existing receptionist desk, and the
telecommunications and data cable runs back to the riser room in
the hallway immediately outside of the Sublease Premises (the
“ Sublandlord’s Personal Property ”) at no
additional cost during the Term. Sublandlord and Subtenant
shall compile and initial a written inventory of the
Sublandord’s Personal Property as of the first day of the
Term, and shall note the condition of such Sublandlord’s
Personal Property on that inventory. Subtenant may use
Sublandlord’s Personal Property at its own risk, and is
solely responsible for all other cabling and telecommunications,
data, internet and networking services and costs it may require.
Subtenant: (a) accepts Sublandlord’s Personal Property
in its “as is” condition as of the first day of the
Term (subject to the last sentence of this Section and as the same
may be affected by reasonable wear and tear after the date hereof),
without warranty (express or implied) of any kind, including,
without limitation, merchantability or fitness for use or any
particular purpose; (b) shall maintain and keep the
Sublandlord’s Personal Property in reasonably good repair,
wear and tear excepted, throughout the Term, and shall insure
Sublandlord’s Personal Property against loss or damage by
fire or other casualty (and all of the provisions of this Sublease,
including the provisions of the Master Lease that are incorporated
herein, applicable to insurance required to be carried by Subtenant
shall be applicable to Sublandlord’s Personal Property); and
(c) surrender Sublandlord’s Personal Property to
Sublandlord upon the expiration or sooner termination of the Term
in the same condition as at the first day of the Term, as the same
may be affected by reasonable wear and tear after the date
hereof.
8. PARKING . No
parking is being provided by Sublandlord to Subtenant.
9. INCORPORATION OF TERMS OF
THE MASTER LEASE.
9.1 Except as expressly amended
hereby, this Sublease is subject and subordinate to all the terms
and conditions of the Master Lease and the Master Landlord’s
consent to this Sublease, to the extent the terms and conditions
apply to the Sublease Premises. Consistent with item 5 of Exhibit E
to the Master Lease, Sublandlord consents and covenants to obtain
Master Landlord’s consent, as part of the consent to this
Sublease, to Subtenant’s
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installation of locks on the doors
to the offices in the Sublease Premises. Except for Sections 11.2
and 21 of the Master Lease which is hereby expressly excluded from
this Sublease, and except to the extent directly inconsistent with
the terms of this Sublease, all of the terms of the Master Lease
are hereby incorporated into and made a part of this Sublease as if
stated at length herein, and Subtenant accepts this Sublease
subject to, and hereby agrees to be bound by, all of the terms,
covenants, conditions and agreements contained in the Master Lease,
as modified by this Sublease. The parties hereto agree that subject
to the provisions of this Sublease, wherever the ph
