\nFebruary 1, 1996 — January 31, 1998 $7,200 NNN
\nFebruary 1, 1998 — December 31, 1998 $7,300 NNN
\n<\/c><\/s><\/caption>\n<\/table>\n Initialed:
\n Landlord: S
\n Tenant: JPB<\/p>\n
PAGE 19
\n 20
\n ADDENDUM 1 TO SUBLEASE AGREEMENT<\/p>\n
COAST WIDE SUPPLY COMPANY, SUBLESSOR (LANDLORD)
\n AMAZON.COM INC., SUBLESSEE (TENANT)<\/p>\n
The following additional provisions are hereby incorporated in and made a part
\nof the Sublease Agreement between Landlord and Tenant of even date herewith
\npertaining to the commercial property located at 2250 First Avenue South,
\nSeattle, Washington.<\/p>\n
16. Notwithstanding any provision in this Sublease, Tenant shall refrain
\nfrom any action which would constitute a breach of the Master Lease between
\nCoast Wide Supply Company and Pacific Northwest Warehouses, Inc. (Exhibit “A” to
\nsaid Sublease). It is understood that tenant shall have no obligation to
\nmaintain or repair, and operating expenses shall not include the maintenance or
\nrepair of the roof or other structural components of the building located on the
\nleased premises. Further, property insurance shall be procured and paid in
\naccordance with paragraph 12.2 of the Master Lease (Exhibit “A”).<\/p>\n
17. The insurance coverage minimums set forth at 9.2, 9.3, 9.4 and 9.5
\nshall be subject to automatic upward adjustment if, and to the extent that,
\ncoverage required under the Master Lease, as adjusted from time to time pursuant
\nthereto, shall exceed that set forth in this Sublease.<\/p>\n
18. “Additional Rent” is defined as the amount of the total monthly
\nobligations of the Tenant, including Operating Expenses, which is in excess of
\nthe Basic Mondhly Rent. In the year ending December 31, 1995, Additional Rent
\naveraged $712 per month. Notwithstanding any provision in this Sublease, the
\nTenant’s obligation to pay Additional Rent shall be limited to an amount no
\ngreater than 7% more than the previous year’s Additional Rent obligation.<\/p>\n
Pacific Northwest Warehouses, Inc. consents to the assignment of the Leased
\nPremises pursuant to this Sublease Agreement.<\/p>\n
PACIFIC NORTHWEST WAREHOUSES, INC.<\/p>\n
By: Wilma B. Haslund
\n ——————————
\n Wilma B. Haslund – Secretary<\/p>\n
Date: 1\/23\/96
\n ——————————<\/p>\n
COAST WIDE SUPPLY COMPANY, LANDLORD<\/p>\n
By: Riley Sivertsen
\n ——————————<\/p>\n
Date: 1\/19\/96
\n ——————————<\/p>\n
AMAZON.COM INC., TENANT<\/p>\n
By: Jeff P. Bezos
\n ——————————<\/p>\n
Date: 1\/19\/96
\n ——————————<\/p>\n
PAGE 20
\n 21
\n EXHIBIT A<\/p>\n
This LEASE is made and entered into this 5th day of December, 1979, by and
\nbetween PACIFIC NORTHWEST WAREHOUSES, INC. (hereinafter “Landlord”), and COAST
\nWIDE SUPPLY COMPANY (hereinafter “Tenant”).<\/p>\n
For and in consideration of the rental and of the covenants and agreements
\nhereinafter set forth to be kept and performed by the Tenant, Landlord hereby
\nleases to Tenant and Tenant hereby leases from Landlord the Premises herein
\ndescribed for the term, at the rental and subject to and upon all of the terms,
\ncovenants and agreements hereinafter set forth.<\/p>\n
1. PREMISES.<\/p>\n
1.1 Description. Landlord hereby leases to Tenant and Tenant hereby rents
\nfrom Landlord those certain Premises, crosshatched on Exhibit A, located in the
\nCity of Seattle, County of King, Washington, commonly known as 2250 – 1st Avenue
\nSouth and 110 South Stacy Street and described as South 57 feet of Lot 9, all of
\nLots 10 and 11 in Block 317, Seattle Tidelands, EXCEPT the West 80 feet of the
\nSouth 40 feet of said Lot 11, commonly known as 2250 First Avenue South, and
\nalso 110 South Stacy Street, Seattle, Washington. The Premises include the
\nunderlying realty and the improvements or so much thereof as Tenant is entitled
\nto occupy or use under this Lease.<\/p>\n
1.2 Work of Improvement. The obligations of Landlord and Tenant to
\nperform the work and supply material and labor to prepare the Premises for
\noccupancy are set forth in detail in Exhibit B. Landlord and Tenant shall expend
\nall funds and do all acts required of them in Exhibit B and shall have the work
\nperformed promptly and diligently in a first-class workmanlike manner.<\/p>\n
2. TERM.<\/p>\n
2.1 Term. The term of this Lease shall be for Three (3) Years and Zero (0)
\nMonths commencing December 1, 1979 and ending on November 30, 1982 unless sooner
\nterminated pursuant to this lease. See Addendum Number 1, Paragraph 2.1 “a”
\nOPTION TO RENEW.<\/p>\n
2.2 Delay in Commencement. Tenant agrees that in the event of the
\ninability of Landlord for any reason to deliver possession of the Premises to
\nTenant on the commencement date set forth in Section 2.1, Landlord shall not be
\nliable for any damage thereby nor shall such inability affect the validity of
\nthis Lease or the obligations of Tenant hereunder, but in such case Tenant shall
\nnot be obligated to pay rent or other monetary sums until possession of the
\nPremises is tendered to Tenant; provided that if the delay in delivery of
\npossession exceeds thirty (30) days, then the expiration date of the term of the
\nLease shall be extended by the period of time computed from the scheduled
\ncommencement date to the date possession is tendered. In the event Landlord
\nshall not have delivered possession of the Premises within four (4) months from
\nthe scheduled commencement date, then Tenant at its option [illegible] be
\nexercised within thirty (30) days after the end of said four (4) month period
\nmay terminate this Lease and upon Landlord’s return of any moneys previously
\ndeposited by Tenant the parties shall have no further rights or liabilities
\ntoward each other. If Tenant occupies the Premises prior to the commencement
\ndate, such occupancy shall be subject to all provisions hereof, such occupancy
\nshall not advance the termination date, and Tenant shall pay rent for such
\nperiod at the initial monthly rates as set forth below.<\/p>\n
2.4 Acknowledgment of Commencement Date. In the event the commencement
\ndate of the term of the Lease is delayed beyond the thirty (30) days described
\nin Section 2.2 or if the commencement <\/p>\n
PAGE 21
\n 22
\ndate is to be determined pursuant to Section 2.3, then Landlord and Tenant shall
\nexecute a written acknowledgment of the date of commencement.<\/p>\n
3. RENT.<\/p>\n
3.1 Rent. Tenant shall pay to Landlord as rent for the Premises in
\nadvance on the first day of each calendar month of the term of this Lease
\nwithout deduction, offset, prior notice or demand, in lawful money of the United
\nStates, the sum of FOUR THOUSAND SIX HUNDRED AND NO\/100 DOLLARS ($4,600.00). If
\nthe commencement date is not the last day of a month, or if the Lease
\ntermination date is not the last day of a month, a prorated monthly installment
\nshall be paid at the then current rate for the fractional month during which the
\nLease commences and\/or terminates.<\/p>\n
Concurrently with Tenant’s execution of this Lease, Tenant shall pay to
\nLandlord the sum of NINE THOUSAND TWO HUNDRED AND NO\/100 DOLLARS ($9,200.00) as
\nrent for December 1979 and last month.<\/p>\n
3.2 Additional Monetary Sums. This Lease is entered into by Landlord for
\nthe express purpose of providing Landlord with net income from rent, free and
\nclear of any and all expenses, charges, taxes, liens or impositions, of any
\nkind. In addition to the rent reserved by Section 3.1, Tenant shall pay all
\nimpositions, insurance premiums, operating and maintenance charges, construction
\ncosts and any other charges, costs and expenses which arise during the term of
\nthis Lease. In the event of the non-payment of all or any portion of such
\ncharges, costs and expenses, Landlord shall [illegible] the same rights and
\nremedies as provided in this Lease for failure of Tenant to pay rent. The
\nparties agree that this Lease is not terminable for any reason by the Tenant;
\nTenant shall in no event be entitled to any abatement for reduction of rent or
\nother monetary sums payable hereunder except as expressly herein provided,
\nnotwithstanding any present or future law to the contrary.<\/p>\n
4. SECURITY DEPOSIT.<\/p>\n
Concurrently with Tenant’s execution of this Lease, Tenant shall deposit
\nwith Landlord the sum of FOUR THOUSAND SIX HUNDRED AND NO\/100 DOLLARS
\n($4,600.00). Said sum shall be held by Landlord as a security deposit for the
\nfaithful performance by Tenant of all of the terms, covenants, and conditions of
\nthis Lease to be kept and performed by Tenant during the term hereof. If Tenant
\ndefaults with respect to any provisions of this Lease, including but not limited
\nto the provisions relating to the payment of rent and any of the monetary sums
\ndue herewith, Landlord may (but shall not be required to) use, apply or retain
\nall or any part of this security deposit for the payment of any other amount
\nwhich Landlord may spend or become obligated to spend by reason of Tenant’s
\ndefault or to compensate Landlord for any other loss or damage which Landlord
\nmay suffer by reason of Tenant’s default. If any portion of said deposit is so
\nused or applied, Tenant shall, within ten (10) days after written demand
\ntherefor, deposit cash with Landlord in an amount sufficient to restore the
\nsecurity deposit to its original amount; Tenant’s failure to do so shall be a
\nmaterial breach of this Lease. Landlord shall not be required to keep this
\nsecurity deposit separate from its general funds, and Tenant shall not be
\nentitled to interest on such deposit. If Tenant shall fully and faithfully
\nperform every provision of this Lease to be performed by it, the security
\ndeposit or any balance thereof shall be returned to Tenant (or, at Landlord’s
\noption, to the last assignee of Tenant’s interests hereunder) at the expiration
\nof the Lease term and after Tenant has vacated the Premises. In the event of
\ntermination of Landlord’s interest in this Lease, Landlord shall transfer said
\ndeposit to Landlord’s successor in interest, whereupon Tenant agrees to release
\nLandlord from all liability for the return of such deposit or the accounting
\ntherefor.<\/p>\n
PAGE 22
\n 23<\/p>\n
5. TAXATION.<\/p>\n
5.1 Payment of Real Property Taxes. Tenant shall pay all real property
\ntaxes levied against the Premises during the term of this Lease. All such
\npayments shall be made at least twenty (20) days prior to the delinquency date
\nof such payment. Tenant shall promptly furnish Landlord with satisfactory
\nevidence that such taxes have been paid. If Tenant fails to pay any such taxes,
\nLandlord shall have the right but not the obligation to pay same, in which case
\nTenant shall repay such amount to Landlord with Tenant’s next rent installment
\ntogether with interest at the rate of ten percent (10%) per annum.<\/p>\n
5.2 Proration; Joint Assessment. In the event any such real property
\ntaxes paid by Tenant covering any period of time prior to commencement or after
\nthe expiration of the term of this Lease, Tenant’s share of such taxes shall be
\nequitably prorated to cover only the period of time within the fiscal tax year
\nduring which this Lease is in effect, and Landlord shall reimburse Tenant to the
\nextent required. With respect to any assessments which may be levied against or
\nupon the Premises, or which under the laws then in force may be evidenced by
\nimprovement or other bonds or may be paid in annual installments, only the
\namount of such annual installment (with appropriate proration for any partial
\nyear) and interest due thereon shall be included within the computation of the
\nannual taxes and assessments levied against the Premises. In the event the
\nPremises are not separately assessed, Tenant’s liability shall be an equitable
\nproportion of the real property taxes for all of the land and improvements
\nincluded within the tax parcel assessed, such proportion to be determined by
\nLandlord from the respective valuations assigned in the Assessor’s worksheets or
\nsuch other information as may be reasonably available to Landlord, with
\nLandlord’s reasonable determination thereof in good faith to be conclusive.<\/p>\n
5.3 Definition of “Real Property Tax”. As used in this Lease, the term
\n“real property tax” shall include any form of assessment, levy, penalty or tax
\n(other than inheritance, estate, net income or franchise taxes), imposed by any
\nauthority having the direct or indirect power to tax, including any city,
\ncounty, state or federal government or any school, agricultural, lighting,
\ndrainage or other improvement district thereof, whether such tax is (a) upon,
\nallocable to or measured by the area of the Premises or the rental payable
\nhereunder, including without limitation any gross income tax or excise tax
\nlevied by the State, any political subdivision thereof, city or Federal
\nGovernment with respect to the receipt of such rental; or (b) upon or with
\nrespect to the possession, leasing, operation, management, maintenance,
\nalteration, repair, use or occupancy by Tenant of the Premises or any portion
\nthereof; or (c) upon or measured by the value of Tenant’s personal property,
\nequipment or fixtures located in the Premises; or (d) upon this transaction or
\nany document to which Tenant is a party creating or transferring an interest or
\nan estate in the Premises; or (e) whether or not now customary or within the
\ncontemplation of the parties.<\/p>\n
5.4 Personal Property Taxes. Tenant shall pay prior to delinquency all
\ntaxes assessed against and levied upon trade fixtures, furnishings, equipment
\nand all other personal property of Tenant contained in the Premises or
\nelsewhere. When possible, Tenant shall cause said trade fixtures, furnishings,
\nequipment and all other personal property to be assessed and billed separately
\nfrom the real property of the Landlord.<\/p>\n
6. USE.<\/p>\n
6.1 Use. The Premises shall be used and occupied by Tenant for only the
\nfollowing purposes and for no other purposes whatsoever without obtaining the
\nprior written consent of Landlord: Sales Office\/Showroom and storage of
\njanitorial supplies and related equipment.<\/p>\n
6.2 Suitability. If the Premises are completed as of the date of
\nexecution hereof, then Tenant, by execution of this Lease, shall be deemed to
\nhave accepted the Premises in the condition existing as of the <\/p>\n
PAGE 23
\n 24
\ndate of execution and in any event this Lease shall be subject to all applicable
\nzoning ordinances and to any municipal, county and state laws and regulations
\ngoverning and regulating the use of the Premises. Tenant acknowledges that
\nneither Landlord nor Landlord’s agent has made any representation or warranty as
\nto the suitability of the Premises for the conduct of Tenant’s business.<\/p>\n
6.3 Uses Prohibited.<\/p>\n
(a) Tenant shall not do or permit anything to be done in or about
\nthe Premises which will increase the existing rate of insurance upon the
\nPremises (unless Tenant shall pay any increased premium as a result of such use
\nor acts) or cause the cancellation of any insurance policy covering the Premises
\nor any building of which the Premises may be a part, nor shall Tenant sell or
\npermit to be kept, used or sold in or about said Premises any articles which may
\nbe prohibited by a standard form policy of fire insurance.<\/p>\n
(b) Tenant shall not do or permit anything to be done in or about
\nthe Premises which will in any way obstruct or interfere with the rights of
\nother tenants or occupants of any building of which the Premises may be a part
\nor injure or annoy them or use or allow the Premises to be used for an unlawful
\nor objectionable purpose, nor shall Tenant cause, maintain or permit any
\nnuisance in, on or about the Premises. Tenant shall not commit or suffer to be
\ncommitted any waste in or upon the Premises.<\/p>\n
(c) Tenant shall not use the Premises or permit anything to be done
\nin or about the Premises which will in anyway conflict with any law, statute,
\nzoning restriction, ordinance or governmental rule or regulation or requirements
\nor duly constituted public authorities now in force or which may hereafter be
\nenacted or promulgated. Tenant shall at its sole cost and expense promptly
\ncomply with all laws, statutes, ordinances and governmental rules, regulations
\nor requirements now in force or which may hereafter be in force and with the
\nrequirements of any board of fire underwriters or other similar body now or
\nhereafter constituted relating to or affecting the condition, use or occupancy
\nof the Premises. The judgment of any court of competent jurisdiction or the
\nadmission of Tenant or any action against Tenant, whether Landlord be a party
\nthereto or not, that Tenant has violated any law, statute, ordinance or
\ngovernmental rule, regulation or requirement, shall be conclusive of that fact
\nas between Landlord and Tenant.<\/p>\n
7. UTILITIES.<\/p>\n
Tenant shall pay prior to delinquency for all water, gas, heat, light,
\npower, telephone, sewage, air conditioning and ventilating, scavenger,
\njanitorial, landscaping and all other materials and utilities supplied to the
\nPremises. If any such services are not separately metered to Tenant, Tenant
\nshall pay a reasonable proportion of all charges which are jointly metered, the
\ndetermination to be made by Landlord, and payment to be made by Tenant within
\nten (10) days of receipt of a statement for such charges.<\/p>\n
8. MAINTENANCE AND REPAIRS, ALTERATIONS AND ADDITIONS.<\/p>\n
8.1 Tenant’s Obligations. Throughout the term of this Lease, Tenant shall
\nkeep in good order, condition and repair the Premises and every part hereof,
\nstructural or non-structural, and all adjacent sidewalks, landscaping,
\ndriveways, parking lots, fences, and signs located adjacent to or included
\nwithin the Premises. Landlord shall incur no expense nor have any obligation of
\nany kind whatsoever in connection with maintenance of the Premises, and Tenant
\nexpressly waives the benefits of any statute now or hereafter in effect which
\nwould otherwise afford Tenant the right to make repairs at Landlord’s expense or
\nto terminate this Lease because of Landlord’s failure to keep the Premises in
\ngood order. Tenant shall do all <\/p>\n
PAGE 24
\n 25
\nacts required to comply with all applicable laws, ordinances, regulations and
\nrules of any public authority relating to its maintenance obligation as set
\nforth herein. See Addendum Number 1; Paragraph 8.1 “a” TENANT’S OBLIGATIONS.<\/p>\n
8.2 Surrender. Upon the expiration or earlier termination of this Lease,
\nTenant shall surrender the Premises in the same condition as received, broom
\nclean, ordinary wear and tear excepted. Tenant, at its sole cost and expense,
\nagrees to repair any damage to the Premises caused by or in connection with the
\nremoval of any articles of personal property, business or trade fixtures,
\nmachinery, equipment, cabinetwork, furniture, movable partition, or permanent
\nimprovements or addition, including without limitation thereto, repairing the
\nfloor and patching and painting the walls where required by Landlord to
\nLandlord’s reasonable satisfaction. Tenant shall indemnify the Landlord against
\nany loss or liability resulting from delay by Tenant in so surrendering the
\nPremises, including without limitation, any claims made by any succeeding tenant
\nfounded on such delay.<\/p>\n
8.3 Landlord’s Rights. In the event Tenant fails to perform Tenant’s
\nobligations under this Section 8 Landlord shall give Tenant notice to do such
\nacts as are reasonably required to so maintain the Premises; if Tenant shall
\nfail to commence such work and diligently prosecute it to completion, then
\nLandlord shall have the right but not the obligation to do such acts and expend
\nsuch funds at the expense of Tenant as are reasonably required to perform such
\nwork. Any amount so expended by Landlord shall be paid by Tenant promptly after
\ndemand with interest at ten percent (10%) per annum from the date of such work.
\nLandlord shall have no liability to Tenant for any damage, inconvenience or
\ninterference with the use of the Premises by Tenant as a result of performing
\nany such work.<\/p>\n
8.4 ALTERATIONS AND ADDITIONS.<\/p>\n
(a) Tenant shall not, without Landlord’s prior written consent, make
\nany alterations, additions, improvements or utility installations in, on or
\nabout the Premises, except for non-structural alterations not exceeding $2500 in
\ncost. As used in this Section 8.4, the term “utility installations” shall
\ninclude ducting, power panels, flourescent fixtures, space heaters, conduit and
\nwiring. As a condition to giving such consent, Landlord may require that Tenant
\nagree to remove any such alterations, additions, improvements or utility
\ninstallations at the expiration of the term and to restore the Premises to their
\nprior condition. As a further condition to giving such consent, Landlord may
\nrequire Tenant to provide Landlord, at Tenant’s sole cost and expense, a lien
\nand completion bond in an amount equal to one and one-half times the estimated
\ncost of such improvements, to insure Landlord against any liability for
\nmechanics’ and materialmen’s liens and to insure completion of the work.<\/p>\n
(b) Unless Landlord requires their removal, as set forth in
\nParagraph 8.4(a), all alterations, additions, improvements and utility
\ninstallations (whether or not such utility installations constitute trade
\nfixtures of Tenant), which may be made on the Premises, shall at the expiration
\nor earlier termination of the Lease become the property of Landlord and remain
\nupon and be surrendered with the Premises. Notwithstanding the provisions of
\nthis Paragraph 8.4(b), personal property, business and trade fixtures,
\ncabinetwork, furniture, movable partitions, machinery and equipment, other than
\nthat which is affixed to the Premises so that it cannot be removed without
\nmaterial damage to the Premises, shall remain the property of Tenant and may be
\nremoved by Tenant subject to the provisions of Paragraph 8.2, at any time during
\nthe term of this Lease when Tenant is not in default.<\/p>\n
PAGE 25
\n 26<\/p>\n
9. ENTRY BY LANDLORD.<\/p>\n
Landlord and Landlord’s agents shall have the right at reasonable times to
\nenter the Premises to inspect the same or to maintain or repair, make
\nalterations or additions to the Premises or any portion thereof or to show the
\nPremises to prospective purchasers, tenants or lenders. Landlord may, at any
\ntime, place on or about the Premises any ordinary “for sale” signs; Landlord may
\nat any time during the last ninety (90) days of the term of the Lease place on
\nor about the Premises any ordinary “for lease” signs. Tenant hereby waives any
\nclaim for abatement of rent or for damages for any injury or inconvenience to or
\ninterference with Tenant’s business, any loss of occupancy or quiet enjoyment of
\nthe Premises, and any other loss occasioned thereby.<\/p>\n
10. LIENS.<\/p>\n
Tenant shall keep the Premises and any building of which the Premises are
\na part free from any liens arising out of work performed, materials furnished or
\nobligations incurred by Tenant and shall indemnify, hold harmless and defend
\nLandlord from any liens and encumbrances arising out of any work performed or
\nmaterials furnished by or at the direction of Tenant. In the event that Tenant
\nshall not, within twenty (20) days following imposition of any such lien, cause
\nsuch lien to be released of record by payment or posting of a proper bond,
\nLandlord shall have, in addition to all other remedies provided herein and by
\nlaw, the right, but not the obligation, to cause the same to be released by such
\nmeans as it shall deemed property, including payment of the claim giving rise to
\nsuch lien. All such sums paid by Landlord and all expenses incurred by it in
\nconnection therewith including attorney’s fees and costs shall be payable to
\nLandlord by Tenant on demand with interest at the rate of ten percent (10%) per
\nannum. Landlord shall have the right at all times to post and keep posted on the
\nPremises any notices permitted or required by law, or which Landlord shall deem
\nproper, for the protection of Landlord and the Premises, and any other party
\nhaving an interest therein, from mechanics’ and materialmen’s liens, and Tenant
\nshall give to Landlord at least ten (10) business days prior written notice of
\nthe expected date of commencement of any work relating to alterations or
\nadditions to the Premises.<\/p>\n
11. INDEMNITY.<\/p>\n
11.1 Indemnity. Tenant shall indemnify and hold Landlord harmless from
\nand against any and all claims of liability for any injury or damage to a person
\nor property arising form Tenant’s use of the Premises, or from the conduct of
\nTenant’s business, or from any activity, work or thing be permitted or suffered
\nby Tenant in or about the Premises or elsewhere. Tenant shall further indemnify
\nand hold Landlord harmless from and against any and all claims arising from any
\nbreach or default in the performance of any obligation on Tenant’s part to be
\nperformed under this Lease or any negligence of Tenant or Tenant’s agents,
\ncontractors or employees, and from and against all costs, all attorney’s fees,
\nexpenses and liabilities incurred in the defense of any such claim or any action
\nor proceeding brought thereon. In the event any action or processing is brought
\nagainst Landlord by reason of any such claim, Tenant upon notice form Landlord
\nshall defend same at Tenant’s expense by counsel satisfactory to Landlord.
\nTenant, as a material part of the consideration to Landlord, hereby assumes all
\nrisk of damage to property or injury to persons, in, upon or about the Premises
\narising from any cause and Tenant hereby waives all claims in respect thereof
\nagainst Landlord.<\/p>\n
11.2 Exemption of Landlord from Liability. Landlord shall not be liable
\nfor injury to Tenant’s business or loss of income therefrom or for damage which
\nmay be sustained by the person, goods, wares, merchandise or property of Tenant,
\nits employees, invitees, customers, agents or contractors or any other person in
\nor about the Premises, caused by or resulting from fire, steam, electricity,
\ngas, water or rain, <\/p>\n
PAGE 26
\n 27<\/p>\n
which may leak or flow from or into any part of the Premises, or from the
\nbreakage, leakage, obstruction or other defects of the pipes, sprinklers, wires,
\nappliances, plumbing, air conditioning or lighting fixtures of the same, whether
\nthe said damage or injury results from conditions arising upon the Premises or
\nupon other portions of the building of which the Premises are a part, or from
\neither sources or places and regardless of whether the cause of such damage or
\ninjury or the means of repairing the same is inaccessible to Tenant. Landlord
\nshall not be liable for any damages arising from any act or neglect of any other
\ntenant, if any, of the building in which the Premises are located.<\/p>\n
12. INSURANCE<\/p>\n
12.1 Liability Insurance. Tenant shall, at Tenant’s expense, procure and
\nmaintain at all times during the term of this Lease a policy of comprehensive
\npublic liability insurance insuring Landlord and Tenant against any liability
\narising out of the ownership, use, occupancy, or maintenance of the Premises and
\nappurtenant areas. Such insurance shall at all times be in an amount of not less
\nthan $300,000.00 for injury to or death of any one person in any one accident or
\noccurrence and in an amount of not less than $500,000.00 for injury to or death
\nof more than one person in any one accident or occurrence, and in amount of not
\nless than $50,000.00 for liability for property damage. The limits of such
\ninsurance shall not limit the liability of Tenant, if the Premises are part of a
\nlarger property, said insurance shall have a Landlord’s Protective Liability
\nendorsement attached hereto. All insurance required hereunder shall be with
\ncompanies rated AAA or better in “Best’s Insurance Guide.” Tenant shall deliver
\nto Landlord certificates of insurance evidencing the existence and amounts of
\nsuch insurance with loss payable clauses satisfactory to Landlord, provided that
\nin the event Tenant fails to procure and maintain such insurance, Landlord may
\n(but shall not be required to) procure same at Tenant’s expense after ten (10)
\ndays prior written notice. No such policy shall be cancellable or subject to
\nreduction of coverage or other modification except after thirty (30) days prior
\nwritten notice to Landlord by the insurer. All such policies shall be written as
\nprimary policies, not contributing with and not in excess of coverage which the
\nLandlord may carry. Tenant shall, within twenty (20) days prior to the
\nexpiration of such policies, furnish Landlord with renewals or binders or
\nLandlord may order such insurance and charge the cost to Tenant, which amount
\nshall be payable by Tenant upon demand. Tenant shall have the right to provide
\nsuch insurance coverage pursuant to blanket policies obtained by Tenant provided
\nsuch blanket policies expressly afford coverage to the Premises and to Tenant as
\nrequired by this Lease. *Amounts of such coverage shall be mutually agreed upon
\nbetween Landlord and Tenant in writing.<\/p>\n
12.2. Property Insurance. Landlord shall, at Tenant’s expense, procure and
\nmaintain at all times during the term of this Lease a policy or policies of
\ninsurance covering loss or damage to the Premises in the amount of the full
\nreplacement value thereof (exclusive of Tenant’s trade fixtures and equipment)
\nproviding protection against all perils included within the classification of
\nfire, extended coverage, vandalism, malicious mischief, sprinkler leakage and
\nspecial extended peril (all-risk). Tenant shall pay such annual insurance
\npremiums to Landlord within fifteen (15) days after receipt by Tenant of a copy
\nof the premium statement or other reasonably satisfactory evidence of the amount
\ndue, which shall include the method of calculation of Tenant’s share thereof if
\nthe insurance covers other improvements than the Premises. Such insurance shall
\nprovide for payment of loss thereunder to Landlord or the holder of a first
\nmortgage or deed of trust on the Premises.<\/p>\n
12.3 Waiver of Subrogation. Landlord and Tenant each hereby waive any and
\nall rights of recovery against the other or against the officers, employees,
\nagents and representatives of the other, on account of loss or damage occasioned
\nto such waiving party of its property or the property of others under its
\ncontrol caused by fire or any of the extended coverage risks described above to
\nthe extent that such loss or damage is insured against under any insurance
\npolicy in force at the time of such loss or damages. The <\/p>\n
PAGE 27
\n 28<\/p>\n
insuring party shall, upon obtaining the policies of insurance required under
\nthis Lease, give notice to the insurance carrier or carriers that the foregoing
\nmutual waiver of subrogation is contained in this Lease.<\/p>\n
13. DAMAGE OR DESTRUCTION.<\/p>\n
13.1 Obligation to Rebuild. In the event the improvements on the Premises
\nare damaged or destroyed, partially or totally, from any cause whatsoever,
\nwhether or not covered by insurance, the Tenant shall repair, restore and
\nrebuild the Premises to their condition prior to such damage or destruction and
\nthis Lease shall continue in full force and effect. Such repair, restoration and
\nrebuilding (hereinafter “repair”) shall be commenced within a reasonable time
\nafter such damage or destruction and shall be diligently prosecuted to
\ncompletion. There shall be no abatement of rents or any monetary or other
\nobligation of Tenant under this Lease by reason of such damage or destruction.<\/p>\n
13.2 Availability of Insurance Proceeds. If the damage or destruction
\nresults from risk against which insurance is to be provided pursuant to Section
\n12.2, then the proceeds of such insurance shall be made available to Tenant for
\npayment of the cost and expense of the repair. Landlord may make such proceeds
\navailable to Tenant subject to reasonable conditions, including without
\nlimitation thereto, a requirement of architect’s certification of costs,
\nretention of a percentage of such proceeds pending final notice of completion, a
\nlien and completion bond to be provided solely at Tenant’s expense to insure
\nagainst mechanic’s or materialmen’s liens arising out of the repair and to
\ninsure completion of the repair. In the event that the insurance proceeds are
\ninsufficient to cover the cost of repair, then any amounts in excess thereof
\nrequired to complete the repair shall be paid by Tenant. In the event such
\ninsurance proceeds are not made available to Tenant within ninety (90) days
\nafter such damage or destruction, Tenant shall have the option for thirty (30)
\ndays commencing on the expiration of such ninety (90) day period, to cancel this
\nLease by written notice to Landlord within said thirty (30) day period. If
\nTenant shall exercise such option, Tenant shall have no further obligation
\nhereunder and shall have no further claim against Landlord or the insurance
\nproceeds, provided, however, that Landlord shall promptly return to Tenant so
\nmuch of Tenant’s security deposit as has not applied by Landlord.<\/p>\n
13.3. Damage Near End of the Term. Notwithstanding anything to the
\ncontrary contained in this Lease, if the damage or destruction occurs during the
\nlast year of the term of this Lease to an extent greater than twenty five
\npercent (25%) of the then replacement value of the improvements on the Premises,
\nTenant may elect not to restore, such election on the part of Tenant to be given
\nby notice to Landlord within thirty (30) days after the date of damage or
\ndestruction. In the event Tenant so elects to terminate, then this Lease shall
\nbe terminated as of the later of the date of giving of such notice or the date
\nTenant completes its vacation from the premises. In the event of such
\ntermination, all proceeds of insurance carried in connection with the Premises
\nshall be payable to the Landlord.<\/p>\n
14. CONDEMNATION.<\/p>\n
(a) If the Premises or any portion thereof are taken under the power of
\neminent domain, or sold by Landlord under the threat of the exercise of said
\npower (all of which is hereto referred to as “condemnation”), this Lease shall
\nterminate as to the part so taken as of the date the condemning authority takes
\ntitle or possession, whichever occurs first. If more than ten percent (10%) of
\nthe floor area of any buildings on the Premises, or more than twenty-five
\npercent (25%) of the land area of the Premises not covered with buildings, is
\ntaken by condemnation, either Landlord or Tenant may terminate this Lease, as of
\nthe date the condemning authority takes possession, by notice in writing of such
\nelection within twenty (20) days after Landlord shall have notified Tenant of
\nthe taking, or in the absence of such notice then within twenty (20) days after
\nthe condemning authority shall have taken possession.<\/p>\n
PAGE 28
\n 29<\/p>\n
(b) If this Lease is not terminated by either Landlord or Tenant then it
\nshall remain in full force and effect as to the portion of the Premises
\nremaining, provided the rent shall be reduced in the proportion that the floor
\narea of the buildings taken within the Premises bears to the total floor area of
\nall buildings located on the Premises. In the event this Lease is not so
\nterminated then Landlord agrees, at Landlord’s sole cost, to restore the
\nPremises to a complete unit of like quality and character as existed prior to
\nthe condemnation as soon as reasonably possible. All awards for the taking of
\nany part of the Premises or any payment made under the threat of the exercise of
\npower of eminent domain shall be the property of Landlord, whether made as
\ncompensation for diminution of value of a leasehold or for the taking of the fee
\nor as severance damages; provided, however, that Tenant shall be entitled to any
\naward for loss of or damage to Tenant’s trade fixtures and removable personal
\nproperty. In the event that this Lease is not terminated by reason of such
\ncondemnation, Landlord shall, to the extent of severance damages received by
\nLandlord in connection with such condemnation, repair any damage to the Premises
\ncaused by such condemnation except to the extent that Tenant has been reimbursed
\ntherefor by the condemning authority. Tenant shall pay any amount in excess of
\nsuch severance damages required to complete such repair.<\/p>\n
15. ASSIGNMENT & SUBLETTING.<\/p>\n
15.1 Landlord’s Consent Required. Tenant shall not assign, transfer,
\nmortgage, pledge, hypothecate or encumber this Lease or any interest therein,
\nand shall not sublet the Premises or any part thereof, without the prior
\nwritten consent of Landlord and any attempt to do so without such consent
\nbeing first had and obtained shall be wholly void and shall constitute breach
\nof this Lease. See Addendum Number 1, Paragraph 15.1. “a” LANDLORD’S CONSENT
\nREQUIRED.<\/p>\n
15.2 No Release of Tenant. No consent by Landlord to any assignment or
\nsubletting by Tenant shall relieve Tenant of any obligation to be performed by
\nthe Tenant under this Lease, whether occurring before or after such consent,
\nassignment or subletting. The consent by Landlord to any assignment or
\nsubletting shall not relieve Tenant from the obligation to obtain Landlord’s
\nexpress written consent to any other assignment or subletting. The acceptance of
\nrent by Landlord from any other person shall not be deemed to be a waiver by
\nLandlord of any provision of this Lease or to be a consent to any assignment,
\nsubletting or other transfer. Consent to one assignment, subletting or other
\ntransfer shall not be deemed to constitute consent to any subsequent assignment,
\nsubletting or other transfer.<\/p>\n
15.3 Attorney’s Fees. In the event Landlord shall consent to a sublease or
\nassignment under this Section 15, Tenant shall pay Landlord’s reasonable
\nattorney’s fees not to exceed $500.00 incurred in connection with giving such
\nconsent.<\/p>\n
16. SUBORDINATION.<\/p>\n
16.1 Subordination. This Lease at Landlord’s option shall be subject and
\nsubordinate to all ground or underlying leases which now exist or may hereafter
\nbe executed affecting the Premises or the land upon which the Premises are
\nsituated or both, and to the lien of any mortgages or deeds of trust in any
\namount or amounts whatsoever now or thereafter placed on or against the land or
\nimprovements or either thereof, of which the Premises are a part, or on or
\nagainst Landlord’s interest or estate therein, or on or against any ground or
\nunderlying lease, without the necessity of the execution and delivery of any
\nfurther instruments on the part of Tenant to effectuate such subordination. If
\nany mortgagee, trustee or ground lessor shall elect to have this Lease prior to
\nthe lien of its mortgage, deed of trust or ground lease, and shall give written
\nnotice thereof to Tenant, this Lease shall be deemed prior to such mortgage,
\ndeed of trust or ground lease, whether this Lease is dated prior or subsequent
\nto the date of said mortgage, deed of trust or ground lease or the date of the
\nrecording thereof.<\/p>\n
PAGE 29
\n 30
\n 16.2 Subordination Agreement. Tenant covenants and agrees to execute and
\ndeliver upon demand without charge therefore, such further instruments
\nevidencing such subordination of this Lease to such ground or underlying leases
\nand to the lien of any such mortgages or deeds of trust as may be required by
\nLandlord, Tenant hereby appoints Landlord as Tenant’s attorney-in-fact,
\nirrevocably, to execute and deliver any such agreements, instruments, releases
\nor other documents.<\/p>\n
16.3 Quiet Enjoyment. Landlord covenants and agrees with Tenant that upon
\nTenant paying rent and other monetary sums due under the Lease and performing
\nits covenants and conditions, Tenant shall and may peaceably and quietly have,
\nhold and enjoy the Premises for the term, subject however, to the terms of the
\nLease and of any of the aforesaid ground leases, mortgages or deeds of trust
\ndescribed above.<\/p>\n
16.4 Attornment. In the event any proceedings are brought for default
\nunder any ground or underlying lease or in the event of foreclosure or an
\nexercise of the power of sale under any mortgage or deed of trust made by the
\nLandlord covering the Premises, the Tenant shall attorn to the purchaser upon
\nany such foreclosure or sale and recognize such purchasers as the Landlord under
\nthis Lease; provided said purchaser expressly agrees in writing to be bound by
\nthe terms of the Lease.<\/p>\n
17. DEFAULT; REMEDIES.<\/p>\n
17.1 Default. The occurrence of any of the following shall constitute
\na material default and breach of this Lease by Tenant:<\/p>\n
(a) Any failure by Tenant to pay the rent or any other monetary sums
\nrequired to be paid hereunder (where such failure continues for three (3) days
\nafter written notice thereof by Landlord to Tenant);<\/p>\n
(b) The abandonment or vacation of the premises by Tenant;<\/p>\n
(c) A failure by Tenant to observe and perform any other provision
\nof this Lease to be observed or performed by Tenant, where such failure
\ncontinues for twenty (20) days after written notice thereof by Landlord to
\nTenant; provided, however, that if the nature of such default is such that the
\n________________ cannot reasonably be cured within such twenty (20) day period,
\nTenant shall not be deemed to be in default if Tenant shall within such period
\ncommence such cure and thereafter diligently prosecute the same to completion;<\/p>\n
(d) The making by Tenant of any general assignment or general
\narrangement for the benefit of creditors; the filing by or against Tenant of a
\npetition to have Tenant adjudged a bankrupt or of a petition for reorganization
\nor arrangement under any law relating to bankruptcy (unless, in the case of a
\npetition filed against Tenant, the same is dismissed within sixty (60) days);
\nthe appointment of a trustee or receiver to take possession of substantially all
\nof Tenant’s assets located at the Premises or of Tenant’s interest in this
\nLease, where possession is not restored to Tenant within thirty (30) days; or
\nthe attachment, execution or other judicial seizure of substantially all of
\nTenant’s assets located at the Premises or of Tenant’s interest in this Lease,
\nwhere such seizure is not discharged within thirty (30) days.<\/p>\n
17.2 Remedies. In the event of any such material default or breach by
\nTenant, Landlord may at any time thereafter, with or without notice and demand
\nand without limiting Landlord in the exercise of any right or remedy at law or
\nin equity which Landlord may have by reason of such default or breach:<\/p>\n
(a) Maintain this Lease in full force and effect and recover the
\nrent and other monetary charges as they become due, without terminating Tenant’s
\nright to possession, irrespective of <\/p>\n
PAGE 30
\n 31
\nwhether Tenant shall have abandoned the Premises. In the event Landlord elects
\nto not terminate the Lease, Landlord shall have the right to attempt to re-let
\nthe Premises at such rent and upon such conditions and for such a term, and to
\ndo all acts necessary to maintain or preserve the Premises as Landlord deems
\nreasonable and necessary without being deemed to have elected to terminate the
\nLease including removal of all persons and property from the Premises; such
\nproperty may be removed and stored in a public warehouse or elsewhere at the
\ncost of and for the account of Tenant, in the event any such re-letting occurs,
\nthis Lease shall terminate automatically upon the new Tenant taking possession
\nof the Premises. Notwithstanding that Landlord fails to elect to terminate the
\nLease initially, Landlord at any time during the term of this Lease may elect to
\nterminate this Lease by virtue of such previous default of Tenant.<\/p>\n
(b) Terminate Tenant’s right to possession by any lawful means, in
\nwhich case this Lease shall terminate and Tenant shall immediately surrender
\npossession of the Premises to Landlord, in such event Landlord shall be entitled
\nto recover from Tenant all damages incurred by Landlord by reason of Tenant’s
\ndefault including without limitation thereto, the following: (i) the worth at
\nthe time of award of any unpaid rent which had been earned at the time of such
\ntermination; plus (ii) the worth at the time of award of the amount by which the
\nunpaid rent which would have been earned after termination until the time of
\naward exceeds the amount at such rental loss that is proved could have been
\nreasonably avoided; plus (iii) the worth at the time of award of the amount by
\nwhich the unpaid rent for the balance of the term after the time of award
\nexceeds the amount of such rental loss that is proved could be reasonably
\navoided; plus (iv) any other amount necessary to compensate Landlord for all the
\ndetriment proximately caused by Tenant’s failure to perform its obligations
\nunder this Lease or which in the ordinary course of things would be likely to
\nresult therefrom; plus (v) at Landlord’s election, such other amounts in
\naddition to or in lieu of the forgoing as may be permitted form time to time by
\napplicable state law. Upon any such re-entry Landlord shall have the right to
\nmake any reasonable repairs, alterations or modifications to the Premises, which
\nLandlord in its sole discretion deems reasonable and necessary. As used in
\nsubparagraph (i) above, the “worth at the time of award” is computed by allowing
\ninterest at the rate of ten percent (10%) per annum from the date of default. As
\nused in subparagraph (ii) and (iii) the “worth at the time of award” is computed
\nby discounting such amount at the discount rate of the U.S. Federal Reserve Bank
\nat the time of award plus one percent (1%). The term “rent”, as used in this
\nSection 17, shall be deemed to be and to mean the rent to be paid pursuant to
\nSection 3 and all other monetary sums required to be paid by Tenant pursuant to
\nthe terms of this Lease.<\/p>\n
17.3 Late Charges. Tenant hereby acknowledges that late payment by Tenant
\nto Landlord of rent and other sums due hereunder will cause Landlord to incur
\ncosts not contemplated by this Lease, the exact amount of which will be
\nextremely difficult to ascertain. Such costs include, but are not limited to,
\nprocessing and accounting charges, and late charges which may be imposed on
\nLandlord by the terms of any mortgage or trust deed covering the Premises.
\nAccordingly, if any installment of rent or any other sum due form Tenant shall
\nnot be received by Landlord or Landlord’s designee within ten (10) days after
\nsuch amount shall be due, Tenant shall pay to Landlord a late charge equal to
\nten percent (10%) of such overdue amount. The parties hereby agree that such
\nlate charge represents a fair and reasonable estimate of the costs Landlord will
\nincur by reason of late payment by Tenant. Acceptance of such late charge by
\nLandlord shall in no event constitute a waiver of Tenant’s default with respect
\nto such overdue amount, nor prevent Landlord from exercising any of the other
\nrights and remedies granted hereunder.<\/p>\n
17.4 Default by Landlord. Landlord shall not be in default unless
\nLandlord fails to perform obligations required of Landlord within a reasonable
\ntime, but in no event later than thirty (30) days after written notice by Tenant
\nto Landlord and to the holder of any first mortgage or deed of trust covering
\nthe Premises whose name and address shall have theretofore been furnished to
\nTenant in writing, specifying wherein Landlord has failed to perform such
\nobligation; provided, however, that if the nature of Landlord’s <\/p>\n
PAGE 31
\n 32<\/p>\n
obligation is such that more than thirty (30) days are required for performance,
\nthen Landlord shall not be in default if Landlord commences performance within
\nsuch thirty-day period and thereafter diligently prosecutes the same to
\ncompletion.<\/p>\n
18. BROKER’S FEES.<\/p>\n
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX<\/p>\n
19. MISCELLANEOUS.<\/p>\n
19.1 ESTOPPEL CERTIFICATE.<\/p>\n
(a) Tenant shall at any time upon not less than ten (10) days’ prior
\nwritten notice form Landlord execute, acknowledge and deliver to Landlord a
\nstatement in writing, (i) certifying that this Lease is unmodified and in full
\nforce and effect (or, if modified, stating the nature of such modification and
\ncertifying that this Lease, as so modified, is in full force and effect) and the
\ndate to which the rent and other charges are paid in advance, if any, and (ii)
\nacknowledging that there are not, to Tenant’s knowledge, any uncured defaults on
\nthe part of Landlord hereunder, or specifying such defaults if any are claimed.
\nAny such statement may be conclusively relied upon by an prospective purchaser
\nor encumbrance of the Premises.<\/p>\n
(b) Tenant’s failure to deliver such statement within such time
\nshall be conclusive upon Tenant (i) that this Lease is in full force and effect,
\nwithout modification except as may be represented by Landlord, (ii) that there
\nare no uncured defaults in Landlord’s performance, and (iii) that not more than
\none month’s rent has been paid in advance.<\/p>\n
(c) If Landlord desires to finance or refinance said Premises, or
\nany part thereof, Tenant hereby agrees to deliver to any lender designated by
\nLandlord such financial statements of Tenant as may be reasonably required by
\nsuch lender. Such statements shall include the past three years’ financial
\nstatements of Tenant. All such financial statements shall be received by
\nLandlord in confidence and shall be used only for the purposes herein set forth.<\/p>\n
19.2 Transfer of Landlord’s Interest. In the event of a sale or
\nconveyance by Landlord of Landlord’s interest in the Premises other than a
\ntransfer for security purposes only. Landlord shall be relieved from and after
\nthe date specified in such notice of transfer of all obligations and liabilities
\naccruing thereafter on the part of the Landlord, provided that any funds in the
\nhands of Landlord at the time of transfer in which Tenant has an interest, shall
\nbe delivered to the successor of Landlord. This Lease shall not be affected by
\nany such sale and Tenant agrees to attorn to the purchaser or assignee provided
\nall Landlord’s obligations hereunder are assumed in writing by the transferee.<\/p>\n
19.3 CAPTIONS; ATTACHMENTS; DEFINED TERMS.<\/p>\n
(a) The captions of the paragraphs of this Lease are for convenience
\nonly and shall not be deemed to be relevant in resolving any question of
\ninterpretation or construction of any section of this Lease.<\/p>\n
(b) Exhibits attached hereto, and addendums and schedules initiated
\nby the parties, are deemed by attachment to constitute part of this Lease and
\nare incorporated herein.<\/p>\n
PAGE 32
\n 33<\/p>\n
(c) The words “Landlord” and “Tenant”, as used herein, shall include
\nthe plural as well as the singular. Words used in neuter gender include the
\nmasculine and feminine and words in the masculine or feminine gender include the
\nneuter. If there be more than one Landlord or Tenant, for obligations hereunder
\nimposed upon Landlord or Tenant shall be joint and several. If the Tenants are
\nhusband and wife, the obligations shall extend individually to their sole and
\nseparate property as well as to their community property. The term “Landlord”
\nshall mean only the owner or owners at the time in question of the fee title or
\na tenant’s interest in a ground lease of the Premises. The obligations contained
\nin this Lease to be performed by Landlord shall be binding on Landlord’s
\nsuccessors and assigns only during their respective periods of ownership.<\/p>\n
19.4 Entire Agreement. This instrument along with any exhibits and
\nattachments hereto constitutes the entire agreement between Landlord and Tenant
\nrelative to the Premises and this Agreement and the exhibits and attachments may
\nbe altered, amended or removed only by an instrument in writing signed by both
\nLandlord and Tenant. Landlord and Tenant agree hereby that all prior or
\ncontemporaneous oral agreements between and among themselves and their agents or
\nrepresentatives relative to the leasing of the Premises are merged in or revoked
\nby this Agreement.<\/p>\n
19.5 Severability. If any term or provision of this Lease shall, to any
\nextent, be determined by a court of competent jurisdiction to be invalid or
\nunenforceable, the remainder of this Lease shall not be affected thereby, and
\neach term and provision of this Lease shall be valid and be enforceable to the
\nfullest extent permitted by law.<\/p>\n
19.6 Costs of Suit.<\/p>\n
(a) If Tenant or Landlord shall bring any action for any relief
\nagainst the other, declaratory or otherwise, arising out of this Lease,
\nincluding any suit by Landlord for the recovery of rent or possession of the
\nPremises, the losing party shall pay the successful party a reasonable sum for
\nattorneys’ fees which shall be deemed to have accrued on the commencement of
\nsuch action and shall be paid whether or not such action is prosecuted to
\njudgment.<\/p>\n
(b) Should Landlord, without fault on Landlord’s part, be made a
\nparty to any litigation instituted by Tenant or by any third party against
\nTenant, or by or against any person holding under or using the Premises by
\nlicense of Tenant, or for the foreclosure of any lien for labor or material
\nfurnished to or for Tenant or any such other person or otherwise arising out of
\nor resulting from any act or transaction of Tenant or of any such other person,
\nTenant covenants to save and hold Landlord harmless from any judgment rendered
\nagainst Landlord or the Premises or any part thereof, and costs and expenses,
\nincluding reasonable attorneys’ fees incurred by Landlord in or in connection
\nwith such litigation.<\/p>\n
19.7 Time; Joint and Several Liability. Time is of the essence of this
\nLease and each and every provision hereof, except as to the conditions relating
\nto the delivery of possession of the Premises to Tenant. All the terms,
\ncovenants and conditions contained in this Lease to be performed by either party
\nif such party shall consist of more than one person or organization, shall be
\ndeemed to be joint and several, and all rights and remedies of the parties shall
\nbe cumulative and non-exclusive of any other remedy at law or in equity.<\/p>\n
19.8 Binding Effect; Choice of Law. The parties hereto agree that all the
\nprovisions hereof are to be construed as both covenants and conditions as though
\nthe words importing such covenants and conditions were used in each separate
\nparagraph hereof: subject to any provisions hereof restricting assignment or
\nsubletting by Tenant and subject to section 19.2, all of the provisions hereof
\nshall bind and <\/p>\n
PAGE 33
\n 34
\ninure to the benefit of the parties hereto and their respective heirs, legal
\nrepresentatives, successors and assigns. This Lease shall be governed by the
\nlaws of the state of Washington.<\/p>\n
19.9 Waiver. No covenant, term or condition or the breach thereof shall
\nbe deemed waived, except by written consent of the party against whom waiver is
\nclaimed, and any waiver or the breach of any covenant, term or condition shall
\nnot be deemed to be a waiver of any preceeding or succeeding breach of the same
\nor any the covenant, term or condition. Acceptance by Landlord of any
\nperformance by Tenant after the time the same shall become due shall not
\nconstitute a waiver by Landlord of the breach or default of any covenant, term
\nor condition unless otherwise expressly agreed to by Landlord in writing.<\/p>\n
19.10 [illegible]. [illegible]____________________________________.<\/p>\n
19.11 Holding Over. If Tenant remains in possession of all or any part of
\nthe Premises after the expiration of the term hereof, with or without the
\nexpress or implied consent of Landlord, such tenancy shall be from month to
\nmonth only, and not a renewal hereof or an extension for any further term, and
\nin such case, rent and other monetary sums due hereunder shall be payable in the
\namount and at the time specified in this Lease and such month to month tenancy
\nshall be subject to every either term, covenant and agreement contained herein.<\/p>\n
19.12 Signs and Auctions. Tenant shall not place any sign upon the
\nPremises or conduct any auction thereon without Landlord’s prior written
\nconsent.<\/p>\n
19.13 Reasonable Consent. Except as limited elsewhere in this Lease,
\nwherever in this Lease Landlord or Tenant is required to give its consent or
\napproval to any action on the part of the other, such consent or approval shall
\nnot be unreasonably withheld. In the event of failure to give any such consent,
\nthe other party shall be entitled to specific performance at law and shall have
\nsuch other remedies as are reserved to it under this Lease, but in no event
\nshall Landlord or Tenant be responsible in monetary damages for failure to give
\nconsent unless said failure is withheld maliciously or in bad faith.<\/p>\n
19.14 Interest on Past Due Obligations. Except as expressly herein
\nprovided, any amount due to Landlord not paid when due shall bear interest at
\nten per cent (10%) per annum from the due date. Payment of such interest shall
\nnot excuse or cure any default by Tenant under this Lease.<\/p>\n
19.15 Recording. Tenant shall not record this Lease without Landlord’s
\nprior written consent, and such recordation shall, at the option of Landlord
\nconstitute a non-curable default of Tenant hereunder. Either party shall, upon
\nrequest of the other, execute, acknowledge and deliver to the other a “short
\nform” memorandum of this Lease for recording purposes.<\/p>\n
19.16 Notices. All notices or demands of any kind required or desired to
\nbe given by Landlord or Tenant hereunder shall be in writing and shall be deemed
\ndelivered forty-eight (48) hours after depositing the notice or demand in the
\nUnited States mail, certified or registered, postage prepaid, addressed to the
\nLandlord or Tenant respectively at the addresses set forth after their
\nsignatures at the end of this Lease.<\/p>\n
19.17 Corporate Authority. If Tenant is a corporation, each individual
\nexecuting this Lease on behalf of said corporation represents and warrants that
\nhe is duly authorized to execute and deliver this Lease on behalf of said
\ncorporation in accordance with a duly adopted resolution of the Board of
\nDirectors of said corporation or in accordance with the Bylaws of said
\ncorporation, and that this Lease is binding upon said corporation in accordance
\nwith its terms. If Tenant is a corporation Tenant shall, within <\/p>\n
PAGE 34
\n 35
\nthirty (30) days after execution of this Lease, deliver to Landlord a certified
\ncopy of a resolution of the Board of Directors of said corporation authorizing
\nor ratifying the execution of this Lease.<\/p>\n
IN WITNESS WHEREOF, the Landlord and Tenant have executed this Lease the date
\nand year first above written.<\/p>\n
Landlord: Tenant:<\/p>\n
Pacific Northwest Warehouses Inc. Frank J.. Swanson Exec Vice
\n——————————— ——————————–<\/p>\n
Fred K. Haslund Jr. Pres.
\n———————————<\/p>\n
STATE OF WASHINGTON )
\n ) ss
\nCounty of King )<\/p>\n
On this 5 day of December A.D., 1979 before me personally appeared Fred K.
\nHaslund Jr., to me known to be the President of the corporation that executed
\nthe within and foregoing instrument, and acknowledged the said instrument to be
\nthe free and voluntary act and deed of said corporation for the uses and
\npurposes therein mentioned, and on oath stated that ____, he____ was authorized
\nto execute said instrument.<\/p>\n
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
\nseal the day and year first above written.<\/p>\n
Dolores L. Lancaster
\n ————————————-
\n Notary Public in and for the State of
\n Washington, residing at Seattle 98122<\/p>\n
Subscribed and sworn before me this 18th day of November, 1982.<\/p>\n
Caryl Clarke
\n ————————————-
\n Notary in and for the State of
\n Washington, residing at Seattle<\/p>\n
My commission expires July 3, 1983<\/p>\n
PAGE 35
\n 36
\n ADDENDUM NUMBER 1:<\/p>\n
Paragraph 2.1 “a” OPTION TO RENEW<\/p>\n
Tenant shall have the option to renew this lease for one (1) additional two (2)
\nyear term upon first giving written notice to Landlord of Tenant’s intent to
\nrenew not less than twelve (12) months prior to the termination date of the
\noriginal three (3) year term. The additional two (2) year term shall be subject
\nto all Terms and Conditions of the original Lease except that the rental amount
\nshall be adjusted to reflect the current Fair Rental Value of the property. In
\nthe event that the Landlord and Tenant are unable to agree as to current Fair
\nRental Value of the property for the additional two (2) year term, such rental
\nshall be fixed by arbitration in accordance with the laws of the State of
\nWashington; each of the parties to select an arbitrator, and the two arbitrators
\nso selected to select a third arbitrator and the arbitrators so selected will
\ndetermine the Fair Rental Value to apply during the additional two (2) year term
\nbut in no event shall the new monthly rental amount be less than the monthly
\nrental amount for the original three (3) year term.<\/p>\n
Paragraph 8.1 “a” TENANT’S OBLIGATIONS<\/p>\n
Tenant agrees to pay particular attention to the maintenance of the roof(s) of
\nthe leased premises making certain to keep all drains free from debris and clear
\nrunning and otherwise maintaining the lease premises in a weathertight condition
\nto prevent damage from occurring to any portion of the lease premises.<\/p>\n
Paragraph 15.1 “a” LANDLORD’S CONSENT REQUIRED<\/p>\n
All terms and Conditions of any proposed sublease shall require the written
\napproval of the Landlord.<\/p>\n
37
\n AMENDMENT ADDENDUM NUMBER 1<\/p>\n
Paragraph 2.1 “a” OPTION TO RENEW<\/p>\n
The purpose of this amendment is to provide an additional option to renew this
\nlease as follows:<\/p>\n
Tenant shall have the option to renew this lease for a second additional two (2)
\nyear term upon first giving written notice to Landlord of Tenant’s intent to
\nrenew not less than twelve (12) months prior to the termination date of the
\noriginal three (3) year term or any extension thereof. The second additional two
\n(2) year term shall be subject to all Terms and Conditions of the original Lease
\nexcept that the rental amount shall be adjusted to reflect the current Fair
\nRental Value of the property. In the event that the Landlord and Tenant are
\nunable to agree as to current Fair Rental Value of the property for the second
\nadditional two (2) year term, such rental shall be fixed by arbitration in
\naccordance with the laws of the State of Washington; each of the parties to
\nselect an arbitrator, and the two arbitrators so selected to select a third
\narbitrator and the arbitrators so selected will determine the Fair Rental Value
\nto apply during the second additional two (2) year term but in no event shall
\nthe new monthly rental amount be less than the monthly rental amount for the
\noriginal three (3) year term or subsequent monthly rental amount applicable to
\nany extension thereof whichever amount is greater. Second additional two year
\noption if exercised:<\/p>\n
Commencement Date – December 1, 1984 Termination Date – November 30,
\n1986<\/p>\n
Landlord: Tenant:<\/p>\n
F.K. Haslund, Jr. Frank J. Swanson Exec. Vice
\n———————————- ———————————<\/p>\n
President Riley Sivertsen General M
\nPacific Northwest Warehouses, Inc. Coast Wide Supply Co.<\/p>\n
-2-
\n 38
\n RESOLUTION<\/p>\n
BE IT RESOLVED, that the Board of Directors of Coast Wide Supply
\nCo., Inc. hereby authorized Mr. Frank Swanson its Ex. Vice President and
\nMr. Riley Sivertsen its General Manager consistent with Board policy to
\namend Addendum Number 1 of that certain lease dated December 5, 1979
\nbetween Coast Wide Supply Co., Inc. and Pacific Northwest Warehouses, Inc.
\nin order to provide an additional option to renew that lease for a two (2)
\nyear period.<\/p>\n
Passed this 20th day of December 1982.<\/p>\n
F. June Swanson
\n ————————————
\n President Coast Wide Supply<\/p>\n
Riley Sivertsen
\n ————————————
\n Secretary Coast Wide Supply<\/p>\n
-3-
\n 39
\n THIRD AMENDMENT TO ADDENDUM NUMBER<\/p>\n
Paragraph 2.1 “a” OPTION TO RENEW<\/p>\n
The purpose of this amendment is to provide an additional option to renew this
\nlease as follows:<\/p>\n
Tenant shall have the option to renew this lease for a fourth additional two (2)
\nyear term upon first giving written notice to Landlord of Tenant’s intent to
\nrenew not less than twelve (12) months prior to the termination date of the
\noriginal three (3) year term or any extension thereof. The fourth additional two
\n(2) year term shall be subject to all Terms and Conditions of the original Lease
\nexcept that the rental amount shall be adjusted to reflect the current Fair
\nRental Value of the property. In the event that the Landlord and Tenant are
\nunable to agree as to current Fair Rental Value of the property for the fourth
\nadditional two (2) year term, such rental shall be fixed by arbitration in
\naccordance with the laws of the State of Washington; each of the parties to
\nselect an arbitrator, and the two arbitrators so selected to select a third
\narbitrator and the arbitrators so selected will determine the Fair Rental Value
\nto apply during the fourth additional two (2) year term but in no event shall
\nthe new monthly rental amount be less than the monthly rental amount for the
\noriginal three (3) year term or subsequent monthly rental amount applicable to
\nany extension(s) thereof whichever amount is greater.<\/p>\n
Fourth additional two year option period if exercised:<\/p>\n
Tenant’s written notice required (on or before): November 30, 1987<\/p>\n
Commencement Date: December 1, 1988<\/p>\n
Termination Date: November 30, 1990<\/p>\n
Landlord: Tenant:<\/p>\n
F.K. Haslund, Jr. Riley Sivertsen
\n———————————- ———————–<\/p>\n
President General Manager
\nPacific Northwest Warehouses, Inc. Coast Wide Supply Co.<\/p>\n
-4-
\n 40
\n SECOND AMENDMENT TO ADDENDUM NUMBER<\/p>\n
Paragraph 2.1 “a” OPTION TO RENEW<\/p>\n
The purpose of this amendment is to provide an additional option to renew this
\nlease as follows:<\/p>\n
Tenant shall have the option to renew this lease for a third additional two (2)
\nyear term upon first giving written notice to Landlord of Tenant’s intent to
\nrenew not less than twelve (12) months prior to the termination date of the
\noriginal three (3) year term or any extension thereof. The third additional two
\n(2) year term shall be subject to all Terms and Conditions of the original Lease
\nexcept that the rental amount shall be adjusted to reflect the current Fair
\nRental Value of the property. In the event that the Landlord and Tenant are
\nunable to agree as to current Fair Rental Value of the property for the third
\nadditional two (2) year term, such rental shall be fixed by arbitration in
\naccordance with the laws of the State of Washington; each of the parties to
\nselect an arbitrator, and the two arbitrators so selected to select a third
\narbitrator and the arbitrators so selected will determine the Fair Rental Value
\nto apply during the third additional two (2) year term but in no event shall the
\nnew monthly rental amount be less than the monthly rental amount for the
\noriginal three (3) year term or subsequent monthly rental amount applicable to
\nany extension(s) thereof whichever amount is greater.<\/p>\n
Third additional two year option period if exercised:<\/p>\n
Tenant’s written notice required (on or before): November 30, 1985<\/p>\n
Commencement Date: December 1, 1986<\/p>\n
Termination Date: November 30, 1988<\/p>\n
Landlord: Tenant:<\/p>\n
F.K. Haslund, Jr. Riley Sivertsen
\n———————————- ———————–<\/p>\n
President General Manager
\nPacific Northwest Warehouses, Inc. Coast Wide Supply Co.<\/p>\n
-5-
\n 41<\/p>\n
STATE OF WASHINGTON )
\n ) ss.
\nCOUNTY OF KING )<\/p>\n
On this 3rd day of December A.D., 1984 before me personally appeared
\nF.K. Haslund, Jr. to me known to be the President and ________________________
\nto me known to be the ________________________ of Pacific Northwest Warehouses
\nInc. the corporation that executed the within and foregoing instrument, and
\nacknowledged the same instrument to be the free and voluntary act and deed of
\nsaid corporation for the uses and purposes therein mentioned, and on oath stated
\nthat they were authorized to execute said instrument and that the seal affixed
\nthereto is the corporate seal of said corporation.<\/p>\n
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
\nseal, the day and year first above written.<\/p>\n
Gary L. Ingalls
\n ————————————-
\n Notary Public in and for the State of
\n Washington, residing at Seattle<\/p>\n
-6-
\n 42
\n ADDENDUM NUMBER TWO (2)<\/p>\n
The purpose of this Addendum is to describe the additional agreement between
\nLessor and Lessee as set forth below. This Addendum is subject to and by this
\nreference is incorporated in the original lease which is currently in effect
\ndated December 5, 1979 between Pacific Northwest Warehouses Inc. (Lessor) and
\nCoast Wide Supply Company (Lessee).<\/p>\n
THIRD AMENDMENT TO ADDENDUM NUMBER 1<\/p>\n
Lessor and Lessee acknowledge that the Lessee’s Fourth additional two year
\noption period, written notice of same which was not given as required on or
\nbefore November 30, 1987, is no longer applicable and is in fact superseded by
\nthis Addendum Number Two (2).<\/p>\n
ADDITIONAL TEN (10) YEAR TERM<\/p>\n
Lessor and Lessee agree to extend this lease, which currently runs through
\nNovember 30, 1988, without interruption for an additional Ten (10) Year and One
\n(1) Month term. The additional Ten (10) Year and One (1) Month term shall
\ncommence December 1, 1988 and shall terminate December 31, 1998.<\/p>\n
MONTHLY RENT<\/p>\n
The current monthly rent for the leased premises of Five Thousand Four Hundred
\nDollars ($5400) shall be adjusted to reflect the current Fair Rental Value of
\nthe property Biennially through-out the lease term. Said adjustments shall
\nbecome effective on January 1 of 1989, 1991, 1993, 1995, and 1997. In the event
\nthat the Lessor and Lessee are unable to agree as to current Fair Rental Value
\nof the property for any of Biennial Rental Adjustment periods, such rental shall
\nbe fixed by binding arbitration in accordance with the laws of the State of
\nWashington pursuant to the following procedure: Lessor shall give written notice
\nto Lessee not later than the October 1 prior to the rental adjustment date and
\neach of the parties shall select an arbitrator within 30 days of delivery of the
\nnotice; the two arbitrators so selected shall select a third arbitrator; and the
\narbitrators so selected shall within 30 days of their appointment determine the
\nFair Rental Value to apply during the subject two (2) year period, but in no
\nevent shall the new monthly rental be less than the monthly rental amount
\ncurrently being paid for the immediate preceding month. The parties hereto shall
\nequally share the costs of such arbitration.<\/p>\n
ADDITION AND IMPROVEMENTS TO THE BUILDING<\/p>\n
Lessor shall construct an addition and make improvements to the office area at
\n2250 – lst Avenue South in accordance with the preliminary plan and
\nspecifications provided by Edberg Christiansen Architects attached herewith and
\nmarked Exhibit ‘A’. Lessee hereby agrees to the use of that architect and
\napproves the preliminary plans and specifications. Lessor shall contract for the
\nconstruction of the improvements, but shall have no liability to Lessee for any
\npersonal injury or property damage suffered by Lessee caused by any act or
\nomission of the contractor, provided, that lessor shall require the contractor
\nto carry comprehensive personal liability insurance. Lessee hereby recognizes
\nthat interruptions of its business operations will occur as a result of the
\nconstruction activities and hereby waives any claim it might in the future have
\nagainst Lessor arising out of any such interruption.<\/p>\n
43
\nPreliminary estimates as to the costs of the addition and improvements exclusive
\nof Washington State Sales Tax are as follows:<\/p>\n
\n
\nWesco Construction, Inc. $ 97,750
\nEdberg Christiansen Architects 8,150
\n (including charges to date)
\nPermits 1,000
\nReproduction & Misc. 250
\nContingency 3,000
\n ——–
\n $110,150
\n<\/c><\/s><\/table>\nIt is recognized that the above represents the best estimate of costs based on
\nthe preliminary drawings attached hereto, and marked Exhibit ‘A’, and that there
\ncould be some adjustments, either increase or decrease, to the total upon
\ncompletion of construction documents and obtaining a firm bid prior to actual
\ncommencement of construction, and the construction, and resulting from the
\nconstruction process itself.<\/p>\n
It is further understood and agreed to by Lessor and Lessee that Lessee shall
\nbear the entire cost of the above referenced addition and improvements.<\/p>\n
Lessee shall pay for the entire cost of the addition or improvements as payments
\ncome due pursuant to the architectural and construction contracts, providing its
\nown financing subject to approval of Lessor.<\/p>\n
The parties shall cooperate together and use their best efforts to obtain
\ncompletion of construction of the addition and improvements by November 30,
\n1988. This agreement shall be effective as to all of its terms, however, even if
\nthe addition and improvements are not completed by that date.<\/p>\n
Dated March 3, 1988.<\/p>\n
Pacific Northwest Warehouses, Inc. Coast Wide Supply Company<\/p>\n
by F. K. Haslund, Jr. by Riley Sivertsen
\n ——————————- ——————————
\n its President its President<\/p>\n
We hereby guarantee the payment to Lessor of any amount due from Lessee to
\nLessor pursuant to this agreement for the addition and improvements.<\/p>\n
———————- ———————- ———————<\/p>\n
-2-
\n 44
\nSTATE OF WASHINGTON )
\n ) ss.
\nCOUNTY OF KING )<\/p>\n
On this 3rd day of March A.D., 1988 before me personally appeared K.
\nHaslund, Jr., to me known to be the President of the corporation that executed
\nthe within and foregoing instrument, and acknowledged the said instrument to be
\nthe free and voluntary act and deed of said corporation for the uses and
\npurposes therein mentioned, and on oath stated that ____ he ___ was authorized
\nto execute said instrument.<\/p>\n
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
\nseal the day and year first above written.<\/p>\n
Angela L. Havers
\n ————————————-
\n Notary Public in and for the State of
\n Washington, residing at Seattle<\/p>\n
Security Title Insurance Company of Washington – ACKNOWLEDGMENT – CORPORATION<\/p>\n
-3-
\n 45
\n AMENDMENT TO ADDENDUM NUMBER TWO (2)<\/p>\n
The purpose of this Amendment is to change the first rental adjustment date as
\nset forth in the paragraph entitled MONTHLY RENT from an effective date of
\nJanuary 1, 1989 to an effective date of January 1, 1990. All other terms and
\nconditions remain unchanged.<\/p>\n
Dated April 24th, 1989.<\/p>\n
Pacific Northwest Warehouses, Inc. Coast Wide Supply Company<\/p>\n
by F. K. Haslund, Jr. by Riley Sivertsen
\n —————————— ———————————
\n its President its President<\/p>\n
-4-
\n 46
\nSTATE OF WASHINGTON )
\n ) ss.
\nCOUNTY OF KING )<\/p>\n
On this 24th day of April A.D., 1989 before me personally appeared F. K.
\nHaslund, Jr., to me known to be the President of the corporation that executed
\nthe within and foregoing instrument, and acknowledged the said instrument to be
\nthe free and voluntary act and deed of said corporation for the uses and
\npurposes therein mentioned, and on oath stated that ____ he ___ w__ authorized
\nto execute said instrument.<\/p>\n
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
\nseal the day and year first above written.<\/p>\n
Angela L. Havers
\n ————————————–
\n Notary Public in and for the State of
\n Washington, residing at Seattle<\/p>\n
Security Title Insurance Company of Washington – ACKNOWLEDGMENT – CORPORATION<\/p>\n
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