HomeMy WebLinkAboutR-2005-186 HouseValues, Inc. / Chinook Business Park, LLC Subordination, Non-disturbance & Attornment Agreement (old Baby Jogger bRESOLUTION NO. R-2005- 186
A RESOLUTION Authorizing the City Manager to execute a Subordination, Non -disturbance
and _kno�ment Agreement with HouseValues, Inc., and Chinook Business Park, LLC covering the
premises located at 1700 North 6th Street, Yakima, Washington.
WHEREAS, n July and December, 2003, the City of Yakrtma made two separate Section 108
Loans totaling co Trail Wagons, Inc. in the total principal amount of $2,870,000.00; and
WHEREAS, a collateral and security for the prompt and full performance of all terms and
conditions of said Loans by Trailwagons, Inc., Chinook Business Park, L.L.C., Trailwagons, Inc.
and/or Trailwagons/ Chinook Properties, L.L.C., executed and delivered co the City of Yakima
several Deeds of Trust on. real property located within Yakima County, Washington; and
WHEREAS, as part of the Deeds of Trust, the real property and improvements thereon
located at 1700 North 6th Street in Yakima, Washington (the "Property") was pledged as secured
collateral for the Loans; and
WHEREAS, HouseValues, Inc. has entered into a lease agreement with Chinook Business
Park, L L C , for an extended lease of the Property; and
WHEREAS, HouseValues, Inc. has requested chat all interested pareses in the Property
enter into a Subordination, Nondisturbance and Arcornment Agreement for the term of the lease in
the four attached hereto as Exhibit "A"; now therefore
BE IT RESOLVED BY THE CITY COUTiCIL OF THE CITY OF YASIMA:
The City Manager is hereby authorized to execute a Subordination, Non -disturbance
and Attornment Agreement with HouseValues, Inc., and Chinook Business Park,
LLC covering the premises located at 1700 North 6th Street, Yakima, Washington The
City Manager is hereby designated as the official representative of the City to act in
connection with that funding application and is authorized to take such additional
actions as may be necessary and prudent to complete the application process.
ADOP 1"1•,D BY THE CITY COUNCIL this
Al. 1.h,ST•
City Clerk
99nd day of November, 2005.
Paul George, Mayor
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT is dated the day of ' °Y1A 7 , 2005, and is
made by and among the City of Yakima, Washington, a first-class city incorporated under the
laws of the State of Washington, ("Mortgagee"); HOUSEVALUES, INC., a Washington
corporation, having an address of 11332 N.E. 1221th Way, Kirkland, Washington 98034
("Tenant"); and CHINOOK BUSINESS PARK, L.L.C., a Washington limited liability company,
having an address of 1901 North Fourth Street, Yakima, Washington 98901 ("Landlord").
RECITALS:
A. Tenant has entered into a lease ("Lease") dated October 24, 2005, with Landlord,
which Lease is attached hereto as Exhibit A, covering the premises located at 1700 North 6th
Street, Yakima, Washington (the "Premises") on the real property more particularly described as
shown on Exhibit B, attached hereto (the "Real Property").
B. Mortgagee has made a mortgage loan to Landlord that is secured by that certain
Deed of Trust dated July 23, 2003, and recorded August 8, 2003, under Auditor's File Number
7351309, (collectively, the "Mortgage"), and the parties desire to set forth their agreement herein.
NOW, THEREFORE, in consideration of the promises and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. The Lease and all extensions, renewals, replacements or modifications thereof
are and shall be subject and subordinate to the Mortgage and all terms and conditions thereof
insofar as it affects the Real Property of which the Premises form a part, and to all renewals,
modifications, consolidations, replacements and extensions thereof, to the full extent of amounts
secured thereby and interest thereon.
2. Tenant shall attorn to and recognize any purchaser at a foreclosure sale under the
Mortgage, any transferee who acquires the Premises by deed in lieu of foreclosure, and the
successors and assigns of such purchaser(s), as its landlord for the unexpired balance (and any
extensions, if exercised) of the term of the Lease on the same terms and conditions set forth in the
Lease.
3. If it becomes necessary to foreclose the Mortgage, Mortgagee shall neither
terminate the Lease nor join any party in summary or foreclosure proceedings for the purpose of
terminating the Lease so long as Tenant is not in default under the Lease beyond any applicable
notice and cure periods.
4. If Mortgagee succeeds to the interest of Landlord under the Lease, Mortgagee
shall not be: (a) liable for any act or omission of the Landlord; or (b) personally liable under the
Lease, Mortgagee's liability thereunder being limited to its interest in the Real Property.
5. In the event that Tenant exercises its option to purchase the Premises and Real
Property pursuant to Section 16 of the Lease (the "Acquisition"), Mortgagee shall, on or before
the closing of the Acquisition, irrevocably and unconditionally release any and all rights it has
Subordination, Nondisturbance and Attornment Agreement
[Subordination - Nondisturbance Agt (111505)] Page 1
under the Mortgage as to the Premises and Real Property and shall execute such documentation
as reasonably requested by Landlord or Tenant to effectuate such release; provided, that,
Landlord applies the net proceeds from such Acquisition to the payment of any indebtedness due
and owing under the Mortgage.
6. This Agreement shall be binding on and shall inure to the benefit of the parties
hereto and their successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year
first above written.
CITY CONTRAC r NO: j --74/„2.5--/o7
RESOLUTION N0: X
Mortgagee: City of Yakima
By A
Name: '7A,_��.���� fid.
Title:
Tenant: House
By
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alues,
nc.
Landlord: Chinook Business Park, L.L.C.
By Y�'/.°v'1, ° .r. Lt tit /
Name: 56;' i112'4 �f) . L.L0 I LEhl it 1
Title: x'41 l- 2 VVI E
Subordination, Nondisturbance and Attornment Agreement
[Subordination - Nondisturbance Agt (111505)] Page 2
STATE OF WASHINGTON
COUNTY OF yd -W Wid_
) ss.
On this 2f4- day of Abe 1M be V , 2005, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally appeared
G.av Lv ke Ila v-1- , to me known to e the person who signed
as r9a r • G u ke Indy k of C1lrvic>vk "lust n6ss Air �- the company or
corporation tha executed the within and foregoing instrument, and acknowledged said instrument
to be the free and voluntary act and deed of said company or corporation for the uses and
purposes therein mentioned, and on oath stated that k . was duly elected, qualified and
acting as said officer of the corporation or company, that kW__ was authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said corporation or company.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day and year first
above written.
A.
Print e: ud' GTo t• -)No . ublic'in d for the tate o Washington,
re ing at Se -tat^, U../At
My commission expires: ..51.4.v1 e l5 , 2007
Subordination, Nondisturbance and Attornment Agreement
[Subordination - Nondisturbance Agt (111505)] Page 3
STATE OF WASHINGTON )
) ss.
COUNTY OF
�
On this c " day of dvaz 4r` 6 , 2005, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally appeared
(2,6 , 7-4-45)- . Tr& , to me known to be the person who signed
as (.2.6'47" ' 441, r- of (1/7:y 69•F the company or
corporationhat executed the within and foregoing instrument, and acknowledged said instrument
to be the free and voluntary act and deed of said company or corporation for the uses and
purposes therein mentioned, and on oath stated that /7.4C was duly elected, qualified and
acting as said officer of the corporation or company, that was authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said corporation or company.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day and year first
above written.
Cf
Pr'
No
residing at Xt</-- 4 44
My commission expires: 7-3`-/
ame: l�fLC � rarem� - L
ry Public in and for the State of Washington,
Subordination, Nondisturbance and Attornment Agreement
[Subordination - Nondisturbance Agt (111505)] Page 4
STATE OF WASHINGTON )
) ss.
COUNTY OF ._ V )
4
On this day of�;r .! �� •- , 2005, before me, the undersigned, a Notary Public in
anfor the State of Was ington, duly commissioned and sworn, personally appeared
, to me knowntobe the person who signed
. , the
I... \►
as ' .. A 101 of
that executed the within and foregoing instrument, and acknowledged said
instrum�ttt to lie the free and voluntary act and deed of said 0, c -(� for the uses
and purposes therein mentioned, and on oath stated that \ was duly el d, qualified and
acting as said officer of the , that t -N -V was authorized to execute
said instrument and that the seal affi ed, if , is the seal of said (°��\(�NIS
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day and year first
above written.
TA
s •
P'UBL1G :
Nota Public in and for the State of Washington,
residing at irtj ( (A.S`Pr
My commission expires: /02- Ip - d-2
Subordination, Nondisturbance and Attornment Agreement
[Subordination - Nondisturbance Agt (111505)] Page 5
EXHIBIT A
Lease
Subordination, Nondisturbance and Attornment Agreement
[Subordination - Nondisturbance Agt (111505)] Page 6
EXHIBIT B
Description of Real Property
Subordination, Nondisturbance and Attornment Agreement
[Subordination - Nondisturbance Agt (111505)] Page 7
Commercial Lease
DATE: October 2005
PARTIES: LANDLORD: CHINOOK BUSINESS PARK, L.L.C.,
A Washington limited liability company
1901 North Fourth Street
Yakima, Washington 98901
TENANT:
HOUSEVALUES, INC.,
A Washington corporation
11332 N.E. 122nd Way
Kirkland, Washington 98034
LEASED PREMISES. The Leased Premises is located at 1700 North 6th Street, Yakima, Washington, on the
Property legally described on Exhibit A attached hereto. The Lease is subject to all easements, restrictions,
agreements of record, mortgages and deeds of trust, and zoning and building laws; provided, notwithstanding
anything to the contrary in this Lease, Landlord represents that (i) the Leased Premises may be used by
Tenant for the purposes authorized in this Lease; (ii) Landlord will deliver the Leased Premises in a broom
clean condition, with all of Landlord's personal property being stored in the Building and all debris removed,
and the Leased Premises and Building otherwise ready for Tenant's improvement work; (iii) the Building
structure, foundation and roof and all Building systems are and shall be throughout the Initial Term and any
extensions thereof in good working condition; and (iv) Landlord shall be responsible for all capital
replacements and repairs to the structure, foundation and roof, as set forth in paragraph 6 below. The
Leased Premises shall consist of (a) approximately 2.56 acres of the Real Property described on Exhibit A,
together with all rights and appurtenances thereto, and (b) an office/warehouse building ("the Building")
containing an agreed upon thirty-six thousand one hundred thirty-four (36,134) square feet of rentable
area, and (c) related primary and supplemental parking facilities shown on the Site Plan attached as Exhibit B,
and rights attendant thereto as further defined and outlined in this Lease. A portion of the Building comprising
approximately twelve thousand nine hundred eight -one (12,981) square feet, is designated on Exhibit B and
shall be referred to herein as the "Reserved Area." Tenant shall be entitled to use the Reserved Area for any
and all Permitted Uses and to stage and install in the Reserved Area Tenant Improvements, together with
Tenant's furniture, fixtures and equipment; provided, however, if prior to the first anniversary of the
Commencement Date (the "First Anniversary") any of Tenant's employees actually use any portion of the
Reserved Area to conduct business operations thereon then, until the First Anniversary, the monthly Base
Rent shall be increased by $0.38 per month for each rentable square foot of the Reserved Area so used by
Tenant during such use. Use of the Reserved Area for storage shall not be considered a business activity
triggering a Base Rent obligation. After the first anniversary of the Commencement Date, Tenant shall be
entitled to use the Reserved Area for any Permitted Use by paying Base Rent in accordance with paragraph
2.1 below.
TENANT IMPROVEMENTS. Except as otherwise expressly set forth in this Lease, Tenant shall be
responsible, at its sole cost and expense, for any and all alterations or improvements to the Leased Premises
installed by Tenant that are necessary to accommodate the Tenant's business authorized in this Lease. Any
and all alterations or improvements to the Leased Premises made by Tenant shall be in strict accordance with
the provisions of paragraph 6 of this Lease, whether made before or after the Lease Commencement Date.
Except for parking facilities to be completed by Landlord in accordance with paragraph 11.7 below of this
Lease or alterations or improvements necessary to satisfy Landlord's obligations under this Lease, Tenant, by
taking occupancy of the Leased Premises, accepts the Leased Premises in their then condition, excluding any
material latent defects known to Landlord and not disclosed to Tenant, "AS IS". Tenant agrees that any
equipment or building fixture items that will have some material salvage value after they have been removed
by Tenant's contractor as part of Tenant's Work will remain the property of Landlord and may be used or sold
COMMERCIAL LEASE 1
BA052910.035 i
by Landlord as long as Landlord promptly removes such items from the Leased Premises. If Landlord does
not remove such items from the Leased Premises promptly or fails to identify a salvageable item prior to its
removal by Tenant's contractor, Tenant shall be entitled to sell or otherwise dispose of such items as Tenant
may determine. Landlord and Tenant agree to work cooperatively with each other and with Tenant's
contractor to identify, in advance of any actual Tenant Work if possible any equipment of fixtures that might
have material salvage value to Landlord. Tenant shall have no obligation to store, maintain, preserve or
account for any such equipment of fixture items.
AGREEMENT: LANDLORD HEREBY LEASES TO TENANT AND TENANT DOES HEREBY AGREE TO
LEASE FROM LANDLORD THE ABOVE-DESCRIBED LEASED PREMISES UPON THE FOLLOWING
TERMS AND CONDITIONS:
1. TERM.
1.1 Initial Term. The Lease term shall for a period of five (5) years, commencing on
the later of: (i) October 22, 2005 or (ii) the date on which this Lease is signed and delivered by Landlord and
Tenant (the "Commencement Date") and shall terminate on the day prior to the fifth anniversary of the
Commencement Date, at 5:00 p.m. (PST). If Tenant occupies the Premises prior to the Commencement
Date, Tenant's occupancy of the Premises shall be subject to all of the provisions of this Lease. Early
occupancy of the Premises shall not advance the expiration date of this Lease. Notwithstanding the foregoing,
if by the Commencement Date Landlord does not deliver exclusive possession of the Leased Premises to
Tenant as represented, then the Commencement Date shall be delayed until it is so delivered; provided,
however, if Landlord fails to deliver exclusive possession of the Leased Premises to Tenant as represented by
December 14, 2005, then Tenant shall have the right to terminate this Lease, unless the reason for Landlord's
failure is solely attributable to a Tenant breach of this Lease.
1.2 Option Term. Unless Tenant is then in material default under this Lease, Tenant
shall have the option to extend the Initial Term of this Lease for one (1) additional five (5) -year period on the
same terms and conditions as set forth in this Lease except as to rent, by giving Landlord written notice of
exercise of this option at least six (6) months before the end of the Initial Term. Rent for the Option Term
shall be ninety-five percent (95%) of the then Fair Market Rental (as defined below) of the Leased Premises
to be mutually agreed to not less that ninety (90) days prior to the commencement date of the Option Term.
Fair Market Rental shall mean then -current market rents for similarly -situated, similar quality buildings in the
Yakima, WA area taking into consideration, without limitation, leasing concessions, landlord allowances and
transaction costs then being offered to tenants for new lease transactions. If the parties are unable to agree
on the Fair Market Value, then the parties will submit the determination of Fair Market Rental to binding and
final appraisal in accordance with the appraisal procedures set forth in this paragraph. If the parties are
unable to reach an agreement on the Fair Market Rental within thirty (30) days after Tenant gives Landlord
written notice of its exercise of its option to extend, the parties shall negotiate in good faith and select one (1),
qualified independent appraiser licensed in the state of Washington and familiar with the sale and rental of
commercial real property in the area, which includes the Leased Premises. The parties shall each pay one-
half (%) of the cost of such an appraisal. The Fair Market Rental determined by the appraiser (consistent with
the limitations set forth in this paragraph) shall be used as the basis for the rent for the Option Term, unless
Landlord or Tenant gives the other party written notice within fifteen (15) days from its receipt that the
appraisal is not acceptable. The party objecting to the appraisal shall then obtain a second independent
appraisal at such party's sole cost and expense within thirty (30) days of such rejection. In such an event,
the Fair Market Rental of the Leased Premises shall be the average of the initial appraisal and the second
appraisal obtained by the party objecting to the initial appraisal. The appraisal process set forth above must
completed no later than thirty (30) days prior to the expiration of the Initial Lease Term.
1.3 Early Termination Right. Notwithstanding the Initial Term set forth in paragraph 1.1
above, and provided Tenant is not in material default under this Lease Tenant shall have the right to terminate
this Lease at any time after the third anniversary of the Lease Commencement Date). Tenant may exercise
its limited right to terminate this Lease by providing Landlord written notice within six (6) months prior to the
effective date of termination (which shall be no less than six (6) months after the date of notice of
termination). If Tenant exercises its termination right, Landlord shall have the right to install "For Lease" signs
COMMERCIAL LEASE 2
BA052910.035
three (3) months prior to the anticipated termination date and may show the Leased Premises to prospective
tenants consistent with the terms and conditions of this Lease, by providing Tenant with reasonable advance
notice of such showings and provided such access does not cause any material disruption to Tenant. Tenant
shall continue to be liable for all Rent and Additional Rent up to and including the effective date of termination.
As additional consideration to the Landlord for the lease termination rights set forth in this paragraph, in the
event Tenant exercises its early termination right, Tenant shall pay to Landlord a lease termination fee equal to
the unamortized balance of the commission paid to Tenant's broker (amortized over the Initial Five (5) -Year
Term). The early termination fee shall be paid one-half (%)with Tenant's initial notice of termination and the
remaining one-half (%) on the effective date of the termination set forth in the notice. Attached hereto as
Exhibit C is an amortization schedule reflecting the early termination fee for each month of the Lease Term.
2. RENT.
2.1 Base Rent. Tenant shall pay Landlord monthly rent for the Initial Term of this Lease
as set forth below, payable in advance in equal monthly installments on or before the first day of each calendar
month during the term of this Lease.
Lease Months
Total
Months 1-3*
$0.00
Months 4-12**
$13,627.30 / month
Months 13-60
$18,560.80/ month
*Note: During months 1-3, Tenant shall pay its share of operating expenses (utilities, taxes, insurance premiums, etc.)
monthly, in advance in accordance with the terms and provisions of this Lease. Tenant shall be entitled to the equivalent
of no Base Rent for three (3) full months. Therefore, if the Commencement Date is not the first day of a calendar month,
the Base Rent for the 4th month of the Term will be appropriately pro rated.
**Note: Subject to adjustment during said months in the event business activities are conducted in the Reserved Area
prior to the first anniversary of the Commencement Date, as provided in the paragraph entitled "Leased Premises"
above.
Upon signing this Lease, Tenant shall pay and deliver to Landlord the fourth (4th) month's Base Rent in the
amount of Thirteen Thousand Six Hundred Twenty-seven and 30/100 Dollars ($13,627.30), which shall be
applied to the rent amounts first coming due under the Lease. If this Lease commences on a day other than
the first day of a calendar month, for that partial month, the monthly Base Rent shall be prorated based on the
actual number of days in a calendar month.
2.2 Interest and Late Charges. All rent and other payments not paid when due shall
bear interest from the date due until fully paid at the rate of twelve percent (12%) per annum, but not in any
event at a rate greater than the maximum rate of interest permitted by law. In addition, Tenant acknowledges
that late payment of any rent or other payment required by this Lease from Tenant to Landlord will result in
collection costs to Landlord, the extent of which additional cost is extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if it fails to make any rent or other payment required by
this Lease to Landlord within ten (10) days of the date when it is due, Landlord may impose a late charge of
five cents (50) per dollar, per month, of the overdue payment or One Hundred Dollars and No/100
($100.00) per month, whichever is greater, to reimburse Landlord for the costs of collecting the overdue
payment; provided, however, Landlord agrees to give Tenant at least one business day to cure a failure to pay
an amount due before charging such a late fee unless Tenant has failed to pay an amount owed under this
COMMERCIAL LEASE 3
BA052910.035
Lease when due on two or more prior occasions in the last twelve months. Tenant shall pay the late charge
upon demand by Landlord. Tenant agrees that the late charge is a reasonable estimate of the costs to
Landlord of collecting the overdue payment. Landlord may levy and collect the late charge in addition to all
other remedies available for Tenant's default, and collection of a late charge shall not waive the breach
caused by the late payment.
2.3 Place of Payment. All rent payments required by this Lease shall be made directly to
Landlord by delivering each monthly payment to Landlord or Landlord's agent personally or by mailing the
payment to Landlord at the address set forth in this Lease or to such other address as Landlord may, from
time to time, designate in writing.
2.4 Net Lease Provision. All payments required to be paid by Tenant under this Lease,
other than Base Rent, will constitute Additional Rent. This is intended to be a "triple net" Lease, meaning that,
unless otherwise expressly set forth, Tenant shall pay, except as limited herein, all expenses reasonably
incurred by Landlord relating to the reasonable repair, maintenance and operation of the Leased Premises
(except with respect to any expenses that are Landlord obligations as described in this Lease) after
commencement of the Lease term, and all rent (including Base and Additional Rent) shall be received by
Landlord without set-off, offset, abatement, or deduction of any kind, except as otherwise expressly provided
herein. Notwithstanding anything herein to the contrary, Tenant shall not be obligated to pay for any of the
following: (i) legal fees, brokerage commissions, advertising costs, or other related expenses incurred by
Landlord in connection with the leasing of space in the Building; (ii) repairs, alterations, additions,
improvements or replacements made to rectify or correct any defect in the original design, materials or
workmanship of the Building or common areas (but not including repairs, alterations, improvements or
replacements made as a result of ordinary wear and tear); (iii) damage and repairs attributable to fire or other
casualty; (iv) damage and repairs necessitated by the negligence or willful misconduct of Landlord, Landlord's
employees, contractors or agents; (v) executive salaries or salaries of service personnel to the extent that
such personnel perform services not solely in connection with the management, operation, repair or
maintenance of the Building; (vi) Landlord's general overhead expenses not related to the Building; (vii) legal
fees, accountants' fees and other expenses incurred in connection with Landlord's title to or interest in the
Building, Leased Premises or any part thereof; (viii) costs (including permit, license and inspection fees)
incurred in renovating or otherwise improving, decorating or painting or altering space for tenants or other
occupants of vacant space (excluding common areas) in the Building; (ix) costs incurred due to a violation by
Landlord or any other tenant of the Building of the terms and conditions of a lease; (x) cost of any service
provided to Tenant for which Landlord is reimbursed; (xi) any other expense which, under GAAP applicable to
real estate operations, would not be considered a reasonable maintenance and operating expense; (xii) cost
and expenses which would be capitalized under GAAP; and (xiii) costs incurred for a hazardous waste clean-
up unless caused by Tenant. In no event shall Landlord charge any property management fees or charges or
collect in excess of 100% of operating expenses and shall not recover any item of cost more than once.
Tenant shall have the right to audit Landlord's books and records pertaining to any prior operating expenses.
3. BUSINESS PURPOSE AND USE.
3.1 Permitted Use. Tenant may use the Leased Premises only for general office, light
manufacturing (excluding recreational vehicle manufacturing) or retail uses, including (without limitation)
operating a contact or call center business and activities reasonably related thereto, including (without
limitation) recruiting and training, and for no other purpose without the written consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed. Tenant shall be permitted to use the
Leased Premises at any and all times of each day, month and year of the Term, unless prohibited from doing
so by applicable law.
3.2 Compliance with Laws. In connection with its use, Tenant shall comply, at its
expense, with all applicable laws, regulations and requirements of any public authority, including those
regarding maintenance, operation and use of the Leased Premises and any appliances on the Leased
Premises (including signs). Without limiting the generality of the foregoing, after the Commencement Date of
this Lease, Tenant, at its sole cost and expense, shall be responsible for complying with all applicable
governmental rules and regulations required by Tenant's specific use of the Leased Premises or changes in
COMMERCIAL LEASE 4
BA052910.035
applicable laws, including, but not limited to, repairs or alterations to the interior, exterior or structure of the
Leased Premises necessitated by changes in applicable building codes, handicapped access laws or similar
regulations. Notwithstanding the foregoing, Landlord represents that it has not received any notice stating or
is otherwise aware of any condition making the Leased Premises not currently in compliance with all
applicable laws. This Section 3.2 shall not limit Landlord's obligation to comply with any applicable laws
related to the Building provided the non-compliance was not caused by Tenant.
3.3 Supervision. Tenant shall keep the Leased Premises clean and orderly. Tenant will
supervise its employees and cause Tenant's agents, independent contractors, employees, customers,
suppliers and invitees to conduct their activities in such a manner as to comply with the requirements of this
Lease and the rules and regulations described herein.
3.4 Storage, Trash. Tenant shall not store anything outside the Building except in strict
compliance with requirements of the applicable governmental authority. Tenant shall dispose of its trash in a
manner reasonably acceptable to Landlord, at Tenant's expense, which shall include an obligation to provide
cleaning and waste removal services a minimum of every other day that Tenant is open for normal business
activities.
4. UTILITIES AND TAXES.
4.1 Utilities Generally. The Building is already currently served by electrical power,
water and gas. Landlord shall not take any action to prevent Tenant from using the HVAC system serving the
Leased Premises 24 hours per day, 7 days per week, 52 weeks per year. If electrical power, water and gas
are not available to the Leased Premises as of the Lease Commencement Date as a result of Landlord's acts
or omissions, Tenant shall have the right (after notice to Landlord and opportunity to cure, not to exceed three
(3) business days), in addition to any other right or remedy available to Tenant, to take whatever action
Tenant may consider necessary or appropriate to obtain such services and to deduct the reasonable cost of
obtaining such services thereof from the rent or other obligations owed under this Lease.
4.2 Payment. Tenant shall pay directly to the appropriate supplier all charges for utilities
and services supplied to the Leased Premises and billed to Tenant, including, without limitation, hook-up and
service charges for electricity, gas, telephone, water, sewer, wastewater discharge and garbage collection and
janitorial services. If utility consumption is not separately metered to the Leased Premises, Tenant shall pay
Landlord for all utilities consumed on the Leased Premises or any portion thereof at a rate which as nearly as
possible represents the cost to Landlord of providing such utilities to Tenant. Payment shall be made within
ten (10) days after Tenant receives the relevant billings from Landlord, or within the time permitted for
payment by the utility company where Tenant is directly billed. Landlord represents that the Leased Premises
are already connected to and are ready to receive electrical, water, telephone and sewer services. Tenant
may make its own arrangements for janitorial and trash removal services. Landlord shall cooperate in
permitting Tenant to make arrangements to have all utility services that are supplied to the Leased Premises
billed directly to Tenant.
4.3 Interruption of Service. Landlord shall not be liable for any failure or interruption of
utilities or services to the Leased Premises, unless caused by the negligence of Landlord or its agents. If
Landlord fails to cooperate with Tenant and the service provider in restoring any interruption of utilities or
services, to the extent Landlord's cooperation is needed or may be of assistance in restoring such utilities or
services and are requested by Tenant, Tenant shall have the right, in addition to any other right or remedy
available to Tenant, to take whatever action Tenant may consider necessary or appropriate to restore such
utilities or services, and to deduct the reasonable cost thereof from the rent or other obligation owed under this
Lease.
4.4 Taxes and Assessments.
4.4.1 Taxes and Other Payments. In addition to Base Rent, Tenant shall pay as
additional rent its share of all real property taxes and assessments of any public authority levied or assessed
against the Leased Premises after the Commencement Date. Landlord or Tenant shall have the right to
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contest, in Landlord's name, all such taxes; provided, however, Tenant shall pay for the cost of reasonably
contesting any such taxes. Real property taxes and assessments shall include all real property taxes and
assessments of any public authority assessed against the Leased Premises and improvements located
thereon, and rent tax, gross receipts tax, tax on Landlord's interest under this Lease, or any tax in lieu of the
foregoing, whether or not such tax is now in effect (excluding any Tenant tax based on Landlord's net income).
Tenant's "share" of taxes and assessments shall be a percentage thereof equal to the percentage which the
net rentable area of the building leased by Tenant bears to the total net rentable area of the building located
on the Leased Premises; provided, however, taxes or assessments on any improvements solely used by
Tenant and separately assessed by the applicable taxing authority, and all utilities and operating expenses
associated with improvements solely used by Tenant, shall be paid in full by Tenant. Tax payments for any
partial assessment period shall be prorated between Landlord and Tenant and paid in advance. Tenant's
share of all other real property, taxes and assessments shall be paid to Landlord no less than ten (10) days
prior to their date due to the applicable taxing authority. If not separately billed or charged to Tenant, Landlord
shall promptly provide Tenant with copies of all assessment notices, the tax statements or other sufficient
documentation of the amount and due date of all such taxes, which shall then be timely paid by Tenant. If
Tenant fails to timely pay any real property taxes, charges or assessments, Landlord may pay such amounts
and the cost thereof, together with interest at the rate of twelve percent (12%) per annum, shall be
immediately due and payable from Tenant to Landlord. Tenant shall pay such amounts to Landlord with the
monthly rental payment next falling due.
4.4.2 Personal Property Taxes. Tenant shall also pay, before delinquency, any
and all taxes levied or assessed on or as a result of Tenant's leasehold improvements, equipment, furniture,
fixtures and any other personal property located on the Leased Premises. In the event any or all of Tenant's
leasehold improvements, equipment, furniture, fixtures, and other personal property shall be assessed and
taxed with the real property, Tenant shall pay to Landlord its share of such taxes within ten (10) days after
delivery to Tenant from Landlord of the taxing authorities' statement in writing setting forth the amount of such
taxes applicable to Tenants property.
5. INSURANCE AND INDEMNITY PROVISIONS:
5.1 Liability Insurance. Tenant, at its expense, shall obtain and keep in force during the
entire term of this Lease a broad form policy of commercial general liability insurance. Such policy or policies
shall provide for liability coverage with minimum combined single limits for bodily injury and property damage
per occurrence in amounts not less than Two Million Dollars ($2,000,000). The limits of liability insurance
required by this paragraph shall not, however, limit the liability of Tenant hereunder. The Tenant's liability
insurance required by this paragraph shall be made on an "occurrence" basis and not on a "claims made"
basis. The liability insurance referred to in this paragraph 5.1 may be provided under (i) an individual policy
covering the Leased Premises, or (ii) a blanket policy or policies that include other liabilities, properties and
locations of Tenant; so long as the amount and coverage of insurance required to be carried under this
Section 5 is not diminished, or (iii) a combination of the foregoing insurance programs. To the extent any
deductible is permitted or allowed as part of any insurance policy carried by Tenant in compliance with this
Section 5, Tenant shall be deemed to be covering the amount of such deductible under an informal plan of
self-insurance; provided, however, that in no event shall any deductible exceed Five Thousand Dollars
($5,000).
5.2 Property Insurance of Tenant. Tenant, at its expense, shall maintain in effect (a) a
property insurance policy using the "Causes of Loss - Special Form" on furnishings, trade fixtures, inventory
and equipment located on the Leased Premises, for their full replacement value and (b) similar insurance on
all plate glass on the Leased Premises for its replacement cost. The applicable proceeds of such insurance,
so long as this Lease remains in effect, shall be used to repair or replace the leasehold improvements,
fixtures, equipment and plate glass so insured.
5.3 Property Insurance of Landlord. Landlord shall maintain in effect property
insurance covering the Leased Premises (except those items specified in paragraph 5.2), but not the contents
thereof, using the "Causes of Loss - Special Form" covering loss or damage to the Leased Premises in an
amount equal to the full replacement value thereof. Such insurance shall include at a minimum those
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coverages described in Exhibit F attached hereto. Tenant shall reimburse Landlord for its prorata share of the
cost of such insurance as an operating expense calculated in the same manner as Tenant's share of real
estate taxes set forth in paragraph 4.4.1 above.
5.4 Insurance Policies. All Tenant's insurance policies shall name Landlord as an
additional insured and shall be with companies and with loss -payee clauses reasonably satisfactory to
Landlord. Copies of all policies or certificates evidencing such insurance shall be delivered to Landlord by
Tenant prior to Tenant's occupancy of the Leased Premises. All policies shall bear endorsements requiring
thirty (30) days' written notice to Landlord prior to any change or cancellation.
5.5 Waiver of Subrogation. Tenant and Landlord each waive any and all rights of
recovery against the other, or against the employees, agents and representatives of the other, for loss of or
damage to such waiving party, property, or property of others under its control, where such loss or damage is
insured against under any third party insurance policy in force at the time of such loss or damage. Landlord
and Tenant shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance
carriers that the foregoing mutual waiver of subrogation is contained in this Lease. The foregoing waiver shall
not apply if it would have the effect, but only to the extent of such effect, of invalidating any insurance coverage
of Landlord or Tenant.
5.6 Indemnity of Tenant and Landlord. Tenant shall defend, indemnify and hold
Landlord harmless from any and all costs, claims or liability arising from any third party claim pertaining to: (1)
Tenant's use of the Leased Premises; (2) the conduct of Tenant's business or anything else done or permitted
by Tenant to be done in or about the Leased Premises; (3) any breach or default in the performance of
Tenant's obligations under this Lease; (4) any misrepresentation or breach of warranty by Tenant under this
Lease; or (5) other acts or omissions of Tenant. Tenant shall defend Landlord against any such costs, claims
or liability at Tenant's expense with counsel reasonably acceptable to Landlord or, at Landlord's election,
Tenant shall reimburse Landlord for any reasonable legal fees or costs reasonably incurred by Landlord in
connection with any such claim. Tenant shall not however be obligated to indemnify Landlord to the extent any
such claim or loss is caused by the concurrent negligence of Landlord or its agents or employees. As used in
this paragraph, the term "Tenant" shall include Tenant's officers, employees, agents, contractors and invitees,
if applicable. Landlord shall defend, indemnify and hold Tenant harmless from any and all costs or liability
arising from any third party claim pertaining to (1) Landlord's use of the Leased Premises; (2) the conduct of
Landlord's business or anything else done by Landlord in or about the Leased Premises; (3) any breach or
default in the performance of Landlord's obligations under this Lease; (4) any misrepresentation or breach of
warranty by Landlord under this Lease; or (5) other acts or omissions of Landlord. Landlord shall defend
Tenant against any such costs, claims or liability at Landlord's expense with counsel reasonably acceptable to
Tenant or, at Tenant's election, Landlord shall reimburse Tenant for any reasonable legal fees or costs
reasonably incurred by Tenant in connection with any such claim. Landlord shall not however be obligated to
indemnify Tenant to the extent any such claim or loss is caused by the concurrent negligence of Tenant or its
agents or employees.
6. MAINTENANCE, REPAIRS AND ALTERATIONS.
6.1 Landlord's Obligations. Except for damage caused by any negligent or intentional
act or omission of Tenant or Tenant's agents, employees or invitees, Landlord, at Landlord's expense shall
keep in good order, condition, and repair the capital and structural components of the Leased Premises
defined as the foundation, footings, concrete slabs, concrete pier, structural steel, roof deck and skin, exterior
walls (excluding painting), facade, and the existing plumbing and sewer lines in or serving the Building
(excluding any new plumbing or sewer lines installed by Tenant) and the underground utilities (from the real
property boundary line to the point they enter the Building located on the Premises), and capital improvements
to the parking lot (e.g., repaving or replacement of light fixtures or drainage systems). Landlord shall not be
required to maintain in the Leased Premises the interior surface of exterior walls, floors, interior windows,
doors, or interior plate glass. Landlord shall have no obligation to make repairs under this paragraph 6.1 until
a reasonable time after receipt of written notice of the need for such repairs or the need for such repairs
otherwise comes to the attention of Landlord, but shall make all repairs promptly following receipt of any such
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notice or after becoming aware of the need for such repairs. The definition of capital components shall be
based on Generally Accepted Accounting Principels (GAAP).
6.2 Tenant's Obligations. Tenant, at Tenant's expense, shall keep in good order,
condition, and repair the Leased Premises and every part or portion thereof not required to be repaired and
maintained by Landlord. Other than with regard to those components to be maintained and repaired by
Landlord, Tenant shall be responsible to maintain and keep in a good working state of repair the Leased
Premises, including without limitation, to the extent not the responsibility of Landlord, the maintenance,
replacement and repair of any windows, plate glass, signs, doors, window casings, glazing, heating,
ventilating, air conditioning systems, and plumbing, electrical wiring and conduits serving the Leased Premises
and general maintenance and upkeep on all parking and landscaped areas (including general maintenance
and irrigation, ice and snow removal, and parking lot striping or cleaning). Tenant shall be responsible for
providing (or contracting for) customary building services including routine maintenance of mechanical,
electrical, sprinkler and HVAC systems for the Premises and interior cleaning at Tenant's sole expense.
Landlord shall deliver the Leased Premises to Tenant with the heating, ventilating, and air conditioning
systems, plumbing and electrical conduits, circuit breakers, panel boxes, meters and water heaters in good
working order and condition. Tenant shall promptly repair any damage to any elements to be maintained and
repaired by Tenant from damages caused by any burglary or attempted burglary. Tenant shall keep the glass
on all windows and doors clean and presentable, replace immediately all broken glass in the Building; make
any necessary repairs to, or replacements of, all doors and door closure apparatus and mechanisms; keep all
plumbing clean and in a good state of repair, including pipes, drains, toilets, basins, water heaters and those
portions of the heating system within the walls of the Premises, and keep all utilities, including the circuit
breakers, panel boxes and meters in a good state of repair. Additionally, it shall be the Tenant's responsibility
to maintain and repair any and all improvements installed by Tenant to the extent they are not damaged by
Landlord's failure to repair or maintain the Building as described in this Lease. Nothing herein shall obligate
Tenant to repair or maintain the Leased Premises with regard to any condition caused by (i) ordinary wear and
tear; (ii) a casualty or condemnation; or (iii) any act or omission of Landlord or any failure by Landlord to
comply with this Lease.
6.3 Surrender of Leased Premises. On the last day of the term of this Lease, or on any
sooner termination, Tenant shall surrender the Leased Premises to Landlord in good condition, ordinary wear
and tear excepted. Other than ordinary wear and tear, Tenant shall repair any damage to the Leased
Premises occasioned by Tenant's use thereof or by the removal of Tenant's trade fixtures, furnishings, and
equipment, which repair shall include the patching and filling of holes and repair of any structural damage.
6.4 (a) Landlord's Rights if Tenant Fails To Perform Tenant's Obligations. If
Tenant fails to perform any of its repair or maintenance obligations under this Lease within twenty (20) days
after written notice from Tenant, or sooner if an emergency exists or the failure renders the Leased Premises
a danger to persons or property, then in addition to any other right or remedy that may be available, Landlord
may, at its option (but shall not be required to), enter upon the Leased Premises and put the Leased Premises
in good order, condition, and repair consistent with the requirements of this Lease; provided, however,
Landlord shall, except in an emergency situation, undertake such repairs and actions so as not to
unreasonably interfere with Tenants business activities and operations in the Leased Premises, and will
undertake and perform such work with all reasonable diligence. If the cost of such repairs is an obligation of
Tenant, the reasonable cost thereof, together with interest thereon at the rate of twelve percent (12%) per
annum, shall become due and payable as additional rent to Landlord, together with Tenant's next rental
installment.
(b) Tenant's Rights if Landlord Fails To Perform Landlord's Obligations. If
Landlord fails to perform any of its obligations under this Lease within twenty (20) days after written notice
from Tenant, or sooner if the failure renders the Leased Premises unusable or a danger to persons or
property, then Tenant, in addition to any other right or remedy that may be available, shall have the right to
take action to repair the Leased Premises or otherwise correct Landlord's non-performance. If the cost of
such repairs is an obligation of Landlord, the reasonable cost thereof, together with interest thereon at the rate
of twelve percent (12%) per annum, shall be immediately due and payable from Landlord to Tenant and if
not paid within thirty (30) days may be deducted from the next rent amount owed under this Lease.
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6.5 Alterations and Additions. Except as otherwise expressly authorized in this Lease,
Tenant shall make no alterations, additions or improvement in, on, to or about the Leased Premises without
Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed and
such conditions may include (other than with respect to Tenants Improvements) a requirement that Tenant
remove such alterations, improvements, additions or utility installations at the expiration of the Lease Terms
and restore any damage caused by such removal. Before commencing any work relating to such alterations,
additions, and improvements affecting the Leased Premises (none of which are required or requested by the
Landlord, nor are any alterations the obligation of Tenant under this Lease), Tenant shall notify Landlord in
writing of the expected date of commencement and completion thereof and shall provide Landlord the plans
for the work, and if approved by Landlord, Tenant shall perform the work in strict accordance with the
approved plans using contractors reasonably approved by Landlord. Tenant shall pay, when due, all claims
for labor, materials furnished for or to Tenant or for use in or on the Leased Premises. Tenant shall not permit
any mechanics or materialman liens to be levied against the Leased Premises for any labor or material
furnished to Tenant or claimed to have been furnished to Tenant or Tenants agents or contractors in
connection with work of any character performed or claimed to have been performed on the Leased Premises
by or at the direction of Tenant; provided, Tenant may in good faith contest any claim of lien so long as it
prevents foreclosure and, in such event, Tenant shall defend and hold Landlord harmless from any
consequences of such action, including costs and reasonable attorney's fees incurred. Unless Landlord
requires their removal, all alterations, improvements, or additions that may be made on the Leased Premises
shall become the property of Landlord and remain upon and be surrendered with the Leased Premises at the
expiration of the lease term. Notwithstanding the foregoing, Tenants machinery, equipment, and trade
fixtures shall remain the property of the Tenant and may be removed by Tenant subject to the provisions of
paragraph 6.3 above.
6.6 Entry and Inspection. Landlord or its agents may enter the Leased Premises at any
reasonable time to determine Tenants compliance with this Lease, to make necessary repairs, or to show the
Leased Premises to prospective tenants or purchasers. Landlord shall not unreasonably interfere with
Tenants business operations when exercising the entry and inspection rights set forth in this paragraph.
6.7 Tenant's Authorized Alterations. Subject to Landlord's reasonable approval and in
accordance with the provisions of paragraph 6.5 above, Tenant, at its sole cost and expense, shall have the
right to replace or add additional HVAC units or mechanical systems as Tenant requires on concrete pads
located on the ground adjacent to the Building or on the roof of the Building. Tenant, at its sole cost and
expense, also may install any telecommunications equipment or emergency generators and UPS systems
needed for Tenant's authorized use on the Building or Leased Premises. All such additional alterations are
subject to Landlord's review and reasonable approval in accordance with the provisions of paragraph 6.5
above, which approval will not be unreasonably conditioned or delayed. In the event Tenant is required to
penetrate the roof membrane of the Building located on the Leased Premises, Tenant shall cause the
penetration to be sealed so as to avoid leaking, and when any such equipment is removed upon Lease
expiration or early termination and the roof shall be patched or repaired in good condition using a qualified
roofing contactor. Subject to Landlord's review and approval of plans and their proposed location in
accordance with the provisions of paragraph 6.5 above, Tenant at its sole cost and expense may construct a
cafeteria in the Building located on the Leased Premises and a patio or smoking area outside the Building.
Notwithstanding anything to the contrary in this Lease, Landlord acknowledges the acceptability of the
improvements and alterations generally described in Exhibit D attached hereto ("Tenant's Planned
Improvements"), which alterations and improvements Tenant intends to make to the Leased Premises soon
after the Commencement Date. Landlord shall not later object to or take action to delay or frustrate Tenant's
Planned Improvements and, unless so noted on Exhibit D, Tenant shall not be obligated to remove Tenant's
Planned Improvements at the end of the Lease Term.
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7. RECONSTRUCTION AND RESTORATION.
7.1 Minor Damage. If during the term hereof the Leased Premises are damaged by fire
or other perils and such damage is not "substantial," (as defined in Section 7.2 below) Landlord shall promptly
repair such damage at Landlord's expense and apply any and all insurance proceeds to such restoration,
including, but not limited to, those provided for in Section 5 hereof, and this Lease shall continue in full force
and effect, provided, however, that the requirement to rebuild and restore the Leased Premises shall not
extend to any furnishings, fixtures or equipment which Tenant has previously installed in the Leased Premises,
whether or not title to such items had passed to the Landlord under other provisions of this Lease.
Notwithstanding the foregoing, if there are insufficient insurance proceeds available to Landlord to rebuild and
restore the Leased Premises damaged by casualty (unless Tenant, at its option, agrees to pay the deficiency)
or Landlord fails to complete the restoration within nine (9) months, Tenant shall have the right, at its option, to
terminate this Lease. Notwithstanding the foregoing, if there are insufficient insurance proceeds available to
Landlord to rebuild and restore the Leased Premises damaged by casualty arising out of an act or omission of
Tenant, Tenant shall pay the deficiency within thirty (30) days of substantial completion of the restoration.
7.2 Substantial Damage. If during the term hereof the Leased Premises are destroyed
or damaged by fire or other perils in an amount exceeding twenty-five percent (25%) of its full construc-
tion/replacement cost, then Landlord may elect to terminate this Lease by giving Tenant written notice of such
termination within sixty (60) days after the date of such damage. Otherwise, Landlord shall proceed with
reasonable diligence to restore the Leased Premises to a condition comparable to that existing prior to the
damage. Landlord shall notify Tenant within thirty (30) days of any such damage of the time required to repair
and restore the Leased Premises and if such time is reasonably estimated to exceed nine (9) months then
Tenant shall have the right to terminate this Lease. Tenant shall cooperate with Landlord during the period of
repair and vacate all or any part of the Leased Premises to the extent necessary for the performance of the
required work. If Landlord repairs or rebuilds, all insurance payments for fire damage or destruction to the
improvements on the Leased Premises shall be used for the sole purpose of repairing, rebuilding and/or
restoring the improvements on the Leased Premises, unless this Lease is terminated as the result of such
damage or destruction. If the improvements on Leased Premises are not rebuilt or restored, the insurance
proceeds for loss of Landlord's building and property and loss of rent shall become the sole property of
Landlord, and the Lease shall terminate effective as of the date of such damage or destruction. If any
Substantial Damage, or any other damage that makes the Leased Premises not reasonably useable by
Tenant for its intended use, is not fully repaired and the improvements on the Leased Premises fully restored
within 9 months, Tenant shall have the right to terminate this Lease. Tenant shall release its interest and
endorse all insurance proceed checks to Landlord (except for Tenant's own business interruption insurance)
when no rebuilding is undertaken, or for the payment of rebuilding and restoration costs when such is
undertaken. Property insurance on Tenant's trade fixtures, equipment and personal property shall be the
property of Tenant.
7.3 Abatement of Rent. The Base Rent and Additional Rent shall be equitably abated
during the period that the Leased Premises are not reasonably usable for Tenant's use. If the damage does
not cause any material interference with Tenant's use, there shall be no rent abatement.
7.4 Repair of Tenant's Property. Repair, replacement, or restoration of any fixtures,
equipment and personal property owned by Tenant and Tenant improvements shall be the responsibility of
Tenant.
7.5 Damage During Last Year of the Lease Term. If the improvements on the Leased
Premises are destroyed or substantially damaged during the last Lease year of the Initial Lease Term or the
last Lease Year of an Option Term, then either Landlord or Tenant shall have the right, at its option, to
terminate this Lease by written notice to the other party within thirty (30) days of the damage or destructive
event.
8. ASSIGNMENT AND SUBLETTING.
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8.1 Landlord's Written Consent Required. Except as otherwise permitted herein,
Tenant shall not engage in a "Transfer" without obtaining the prior written consent of Landlord, nor shall any
Transfer of this Lease be effectuated by operation of law or otherwise without the prior written consent of
Landlord. Landlord shall not unreasonably withhold, condition or delay its consent to any Transfer request. As
used in this paragraph, "Transfer" shall mean and include (a) any assignment of Tenant's interest in this
Lease, (b) the subletting of all or a portion of the Leased Premises, or (c) any mortgaging or encumbering of
Tenant's interest in this Lease.
8.2 Notice of Transfer. If Tenant desires to engage in a Transfer, Tenant shall first give
written notice ("Tenant's Notice") to Landlord of its intention to do so, which notice shall contain the name of
the proposed transferee, a reasonably detailed description of the proposed transferee's business to be
conducted on the Leased Premises and the terms and provisions of the proposed Transfer. Tenant shall also
provide Landlord copies of any proposed Transfer documents and additional business and financial
information concerning the proposed transferee, including copies of the actual assignment or sublease
documents when they become available. As consideration for review of Tenant's assignment request, Tenant
shall pay to Landlord a transfer review fee in -the amount equal to the lesser of Landlord's actual legal
expenses or Five Hundred Dollars ($500.00).
8.3 Effect of and Conditions on Consent to Transfer. Landlord's consent to any
Transfer shall not be construed as a waiver or release of Landlord's right to grant or withhold consent to any
future Transfer request. Landlord's acceptance of rent from any proposed transferee shall not be construed
as a waiver of or release of Tenant from any term, covenant or obligation under this Lease. If Landlord elects
to consent to a Transfer, Landlord may condition its consent on reasonable factors, including the execution by
the proposed transferee of an assumption document in a form reasonably satisfactory to Landlord pursuant to
which the transferee assumes all of Tenant's obligations pursuant to this Lease and provides that the
transferring Tenant shall remain jointly and severally liable for the payment of rent, and the performance of all
terms, covenants and conditions of this Lease. In addition, as additional consideration for Landlord's consent
to any transfer, any rent or other consideration accruing to Tenant as a result of the transfer which is in excess
(net of reasonable costs incurred in connection with the Transfer transaction) of the then rent being paid by
Tenant for the portion of the Leased Premises affected by the proposed transfer, fifty percent (50%) of such
excess shall be paid by Tenant to Landlord as Additional Rent. Without limiting the reasons Landlord may rely
upon to reject a proposed Transfer, Landlord shall not be required to consent to a Transfer, and its refusal to
consent shall be deemed reasonable, if any of the following conditions exists:
(a) The proposed transferee's net worth is not equal to or greater than Tenant as of the
date of this Lease or other rent payment assurances are not reasonable available to
Landlord;
(b) The proposed transferee has an unsatisfactory credit record;
(c) The Transfer would involve a change of use at the Leased Premises not permitted by
this Lease;
(d) As a result of the proposed Transfer, Landlord would be required to incur additional
costs (unless Tenant or transferee will reimburse Landlord for these costs;
(e) Tenant is in material default pursuant to this Lease beyond any applicable cure
period.
8.4 Permitted Transfers. Notwithstanding the foregoing, provided Tenant is not in
material default and subject to the terms and conditions contained in this paragraph 8.4, Tenant may assign its
interest in the Leased Premises without seeking Landlord's consent to the following "permitted transferees":
(a) A parent, affiliate or subsidiary of Tenant, or (b) A person or entity that purchases substantially all the stock
or assets of Tenant. Tenant may transfer its interest to a permitted transferee only if the following conditions
are met: (i) the proposed transferee may use the Leased Premises only for the use permitted in this Lease,
and (ii) the proposed transferee shall execute a document in a form reasonably satisfactory to Landlord
pursuant to which the transferee assumes all of Tenant's obligations pursuant to this Lease that arise after the
effective date of the Transfer. Any Transfer by Tenant under this paragraph, whether to a permitted transferee
or to a transferee that requires Landlord's consent, shall not act to release Tenant from its obligations under
this Lease and Tenant shall remain primarily liable of the performance of each and every term and condition of
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this Lease.
9. CONDEMNATION.
9.1 Entire or Substantial Taking. If all or any "substantial portion" of the Leased
Premises shall be taken under the power of eminent domain (sometimes hereinafter referred to as
"condemnation"), Landlord or Tenant shall have the right at its option to terminate this Lease effective on the
date the condemning authority takes possession. Upon such termination, Tenant shall surrender possession
of the Leased Premises to Landlord. Landlord or Tenant may exercise its termination rights by notifying the
other party in writing of its option to terminate the Lease within sixty (60) days following the date on which the
parties receive notice of the proposed taking. For purposes of this paragraph, a sale by Landlord to any
authority with power of eminent domain, either under threat of condemnation or while condemnation
proceedings are pending, shall be deemed a taking under the power of eminent domain under this paragraph.
9.2 "Substantial" Taking. For purposes of this paragraph, a condemnation of a
"substantial" portion of the Leased Premises shall mean any of the following:
9.2.1 If any portion of the floor area of Tenant's leased space in the Building
located on the Leased Premises is taken in the condemnation; or
9.2.2 If, regardless of the value of the amount of the Leased Premises taken, the
cost of repairing and restoring the remainder of the Leased Premises for Tenant's authorized use, less the
value of the proceeds received from the condemning authority as compensation for the taking, exceeds
twenty-five percent (25%) of the value of the entire Leased Premises prior to condemnation.
9.3 Partial Taking. In the event of any condemnation which does not result in a
termination of this Lease, this Lease shall remain unaffected except the Base Rent shall be equitably abated
to the extent that Tenant is deprived of use of the Leased Premises. In the event the Lease is not terminated
following a condemnation, Landlord will, at its expense, restore with reasonable diligence the remaining
portions of the Leased Premises to as near its former condition as is reasonably possible provided further that
the requirement to restore the Leased Premises shall not extend to any furnishings, fixtures or equipment
which Tenant had previously installed in the Leased Premises, whether or not title of such items had passed to
Landlord under other provisions of this Lease.
9.4 Loss of Parking. In the event that more than twenty-five percent (25%) of the
square footage of the parking area is taken under the power of eminent domain by any public or quasi -public
authority, and provided Landlord has not provided suitable replacement parking within ninety (90) days
substantially in accordance with paragraph 11.7 below, then Tenant shall have the right to terminate this
Lease as of the date of the taking. Notice of any termination relating to such eminent domain proceeding must
be made within sixty (60) days after Tenant's receipt of written notice of such taking. In the event of such
termination, both Landlord and Tenant shall thereupon be released from any liability thereafter accruing
hereunder.
9.5 Awards. Any award for taking of all or any part of the Leased Premises under the
power of eminent domain shall be the property of Landlord, whether such award shall be made as compensa-
tion for diminution in value of the leasehold or for taking of the fee. Nothing herein, however, shall be deemed
to preclude Tenant from obtaining, or to give Landlord an interest in, any award to Tenant for Toss of, damage
to, or cost of removal of Tenant's trade fixtures and removable personal property, or for damages for
cessation or interruption of Tenant's business. Landlord shall keep Tenant apprised on a timely basis of any
all condemnation proceedings or threats of condemnations pertaining to the Leased Premises and Landlord
represents that it is not currently aware of any pending or threatened condemnation actions pertaining to the
Leased Premises.
10. SIGNS. No signs or advertising shall be erected or placed on the exterior of the Leased
Premises or anywhere else on the Leased Premises without the prior written approval of Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed. Any and all signs approved by Landlord
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must be installed and maintained in compliance with any applicable requirements of any governmental
authorities having jurisdiction and Tenant shall obtain and keep in force any licenses required for such
signage. All such signage shall be at the sole cost and expense of Tenant. Landlord will fully cooperate with
Tenant in filing any required signage application, permit and/or variance for Tenant's signage with respect to
the Leased Premises. At Landlord's request, Tenant shall remove any and all signs prior to the expiration of
the Lease Term. Notwithstanding anything herein to the contrary, Tenant shall have the right to install
exclusive signage on the exterior of the Building and on a monument or pylon sign. Such signage will be at
Tenants expenses and will be subject to appropriate permits and approvals by regulatory authorities having
jurisdiction and Landlord's approval, not to be unreasonably withheld, conditioned or delayed.
11. OTHER RIGHTS AND OBLIGATIONS OF PARTIES.
11.1 Liens. Tenant shall pay as due all claims for work done on the Leased Premises or
for services rendered or materials furnished to the Leased Premises and shall keep the Leased Premises free
from any liens other than liens created by Landlord. If Tenant fails to pay such claim or to discharge any lien,
Landlord may do so and collect such amount as additional rent. Amounts paid by Landlord shall bear interest
and be repaid by Tenant as provided in paragraph 13.3 below. Such payment by Landlord shall not constitute
a waiver of any right or remedy Landlord may have because of Tenant's default.
11.2 Holding Over. If Tenant does not vacate the Leased Premises at the time required,
Landlord shall have the option to treat Tenant as a tenant from month-to-month, subject to all of the provisions
of this Lease (except that the term will be month-to-month and the initial minimum monthly Base Rent will be
one hundred fifty percent (150%) of the minimum monthly Base Rent then being paid by Tenant), or to eject
Tenant from the Leased Premises and recover damages caused by wrongful holdover.
11.3 Nonmerger. The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of the Landlord, terminate any existing
subtenancies, or may, at the option of Landlord, operate as an assignment to it of any and all such
subtenancies.
11.4 Priority of Lease. This Lease shall be subject and subordinate at all times to the lien
of all mortgages and deeds of trust subsequently placed upon the Leased Premises, all without the necessity
of having further instruments executed on the part of Tenant to effectuate such subordination. Provided,
however, the subordination of Tenants rights hereunder is conditioned upon the mortgagee or beneficiary
under any deed of trust agreeing that Tenant's peaceable possession of the Leased Premises and its rights
under this Lease will not be disturbed so long as Tenant is not in material default under this Lease. If any
party providing financing or funding to Landlord requires, as a condition of such financing or funding, that
Tenant send such party written notice of any default by Landlord under this Lease, giving such party the right
to cure such default until it has completed foreclosure and prevent Tenant from terminating this Lease unless
such default remains uncured after foreclosure has been completed, Tenant will execute and deliver any
agreement required by such party in order to accomplish this purpose. Landlord agrees to obtain a
Nondisturbance Agreement for the benefit of Tenant from all lienholders currently holding liens or a prior
security interest in the Leased Premises and deliver the same to Tenant within thirty (30) days from the date
of this Lease. Landlord also agrees to provide such a Nondisturbance Agreement from any future lender that
wants to subordinate this Lease within ninety (90) days from the date of any such encumbrance. Tenant shall
have the right to terminate this Lease if Landlord fails to obtain such Non -disturbance Agreements within such
periods of time.
11.5 Landlord's Liability; Sale. In the event the original Landlord hereunder, or any
successor owner of the Leased Premises, shall sell or convey the Leased Premises, all liabilities and
obligations on the part of the original Landlord, or such successor owner, under this Lease accruing thereafter
shall terminate, and thereupon all such liabilities and obligations shall be binding upon the new owner.
Provided Landlord is not in material default under this Lease beyond any applicable cure period, Tenant
agrees to attorn to such new owner.
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11.6 Estoppel Certificate. Within ten (10) days after Landlord's or Tenants written
request, the other shall deliver to the requesting party a written statement stating the date to which the rent
and other charges have been paid, whether the Lease is unmodified and in full force and effect, and any other
matters that may reasonably be requested by the requesting party.
11.7 Parking. Without limiting the other rights specifically granted to Tenant in this
Section 11.7, Tenant's employees, agents, customers and invitees may, in common with Landlord or other
tenants, use the parking area of the Leased Premises as designated and shown on the Site Plan attached to
this Lease as Exhibit B for the temporary parking of automobiles or other vehicles. The parking areas, loading
areas and sidewalks of the Leased Premises shall not be used for any purpose other than parking, loading
and unloading of commercial vehicles and pedestrian traffic, respectively. Landlord shall not grant to any
other tenant or other person any preferential parking rights or privileges in or to the parking areas on or
benefiting the Leased Premises.
11.7.1 Primary Parking Facilities. Within thirty (30) days after the
Commencement Date of this Lease, Landlord shall, at its cost and expense, provide Tenant no less than two
hundred thirty-two (232) parking spaces for Tenant's use within two hundred (200) feet of the boundary of
the Leased Premises (the "Initial Parking"). Landlord at its option may provide the spaces through restriping
the parking area adjacent to the Building located on the Leased Premises, constructing and improving
additional hard surfaced parking areas on Supplemental Lot No. 1 or authorizing (through an appropriate non -
revocable license) Tenant to utilize existing parking spaces on adjoining property retained by Landlord so long
as those spaces are still located within two hundred (200) feet of the boundary of the Leased Premises.
Landlord shall, at its sole cost and expense, pave, light, landscape and stripe the Initial Parking. Within one
(1) year from the Commencement Date of this Lease, Landlord shall, at its cost and expense stripe and
construct parking facilities located entirely on the Leased Premises having no less than a total of three
hundred sixty-two (362) total spaces (ten (10) parking spaces for each one (1) -thousand RSF) (collectively
hereinafter referred to as "Primary Parking Facilities"). Once the Primary Parking Facilities are constructed,
Tenant shall be responsible to clean, repair and maintain the facilities, except for replacement of capital
improvements in accordance with paragraph 6.2 of this Lease, including maintenance of landscaping islands,
cleaning, restriping and ice and snow removal.
11.7.2 Option to Lease Additional Parking. In addition to the Primary Parking
Facilities set forth above, Tenant shall have the option to Lease a portion of an approximately 2.6 -acre parcel
of property shown on the Site Plan attached hereto as Exhibit B and designated as Supplemental Lot number
2 (hereinafter "Supplemental Lot No. 2"). Landlord represents that Landlord owns and will own for 24 months
after the Commencement Date Supplemental Lot No. 2. Tenant's option to lease Supplemental Lot No. 2
shall accrue upon the Commencement Date of this Lease and shall expire twenty-four(24)months after the
Lease Commencement Date. Tenant's option to lease Supplemental Lot No. 2 shall be "AS IS" and Tenant
shall be solely responsible for constructing any improvements needed to use Supplement Lot No. 2 for
parking, including paving, lighting, landscaping, and striping as may be required by the applicable
governmental authority. In the event Tenant timely exercises its option, Tenant agrees to pay Landlord an
additional Three Thousand Dollars ($3,000.00) per month as rent for Supplemental Lot No. 2, commencing
six (6) months after the date Tenant notifies Landlord of exercise of its option set forth in this paragraph. All
improvements to Supplemental Lot No. 2 proposed by Tenant shall be made in accordance with the terms and
conditions of paragraph 6.5 of this Lease, and Landlord agrees not to unreasonably withhold, condition or
delay its consent to such improvements.
11.7.3 Valet Service. Tenant shall have the right to administer a parking valet
service on all parking lots at Tenant's sole cost and expense; provided, however, the valet service shall not
materially affect the quiet enjoyment of other tenants in the business park.
COMMERCIAL LEASE 14
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12. ENVIRONMENTAL PROVISIONS.
12.1 Restrictions on Hazardous Substances. Tenant shall not cause or permit any
Hazardous Substance to be brought upon, used, stored, generated, or disposed of on or in the Leased
Premises by Tenant, its agents, employees, contractors, or invitees, except for such Hazardous Substances
as are necessary or used in connection with Tenant's business. Any Hazardous Substances permitted on the
Leased Premises, and all containers therefor, shall be used, kept, stored, and disposed of in a manner that
complies with all federal, state, and local laws or regulations applicable to the particular Hazardous Substance.
Neither Tenant nor Landlord shall release or permit to be released any Hazardous Substance in violation of
federal, state or local environmental laws or regulations, or which may adversely affect (a) the health, welfare,
or safety of persons, whether located on the Leased Premises or elsewhere, or (b) the condition, use, or
enjoyment of the Leased Premises or any other real or personal property.
12.2 Indemnities.
(a) Tenant hereby agrees that it shall be responsible for all costs and expenses relating
to the use, storage, and disposal of Hazardous Substances kept on the Leased Premises by Tenant, and
Tenant shall give immediate notice to Landlord of any violation or potential violation of the provisions of this
paragraph, or any other state, federal or local environmental law or regulation. Tenant shall defend, indemnify,
and hold Landlord and its agents harmless from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs, or expenses (including without limitation, a decrease in value of the Leased
Premises, damages caused by loss or restriction of rentable or useable space, or any damages caused by
adverse impact on marketing of the Leased Premises and any and all sums paid for settlement of claims,
attorney fees, consultant and expert fees), of whatever kind or nature, known, unknown, contingent or
otherwise arising out of or in any related to (a) the release of a Hazardous Substance arising out of an act or
omission of Tenant or its agents; (b) the presence, disposal, release, or threatened release of any such
Hazardous Substance by Tenant that is on, from, or affecting the soil, water, vegetation, buildings, personal
property, persons, animals, or otherwise; (c) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to that Hazardous Substance; (d) any lawsuit brought or threatened,
settlement reached or government order relating to that Hazardous Substance; or (e) any violation of any
state, local or federal environmental laws applicable to such Hazardous Substance. The provisions of this
paragraph shall be in addition to any other obligations and liabilities Tenant may have to Landlord at law or
equity and shall survive the transactions contemplated within this Lease and shall survive the termination of
this Lease.
(b) Landlord hereby agrees that it shall be responsible for all costs and expenses relating
to the use, storage, and disposal of Hazardous Substances on, in or about the Leased Premises prior to the
Commencement Date, and Landlord shall give immediate notice to Tenant of any violation or potential
violation of the provisions of this paragraph, or any other state, federal or local environmental law or regulation.
Landlord shall defend, indemnify, and hold Tenant and its agents harmless from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs, or expenses (including without limitation,
damages caused by loss or restriction of rentable or useable space and any and all sums paid for settlement
of claims, attorney fees, consultant and expert fees), of whatever kind or nature, known, unknown, contingent
or otherwise arising out of or in any related to (a) the release of a Hazardous Substance arising out of an act
or omission of Landlord or its agents or any of its predecesssors in interest; (b) the presence, disposal,
release, or threatened release of any such Hazardous Substance that is on, from, or affecting the soil, water,
vegetation, buildings, personal property, persons, animals, or otherwise; (c) any personal injury (including
wrongful death) or property damage (real or personal) arising out of or related to that Hazardous Substance;
(d) any lawsuit brought or threatened, settlement reached or government order relating to that Hazardous
Substance; or (e) any violation of any state, local or federal environmental laws applicable to such Hazardous
Substance. The provisions of this paragraph shall be in addition to any other obligations and liabilities
Landlord may have to Tenant at law or equity and shall survive the transactions contemplated within this
Lease and shall survive the termination of this Lease.
12.3 Definition of Hazardous Substances. For purposes of this paragraph, the term
"Hazardous Substance" means any substance that is toxic, ignitable, reactive, or corrosive, or that is regulated
by any local government, the state of Washington, or the United States government according to
COMMERCIAL LEASE 15
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environmental laws or regulations now in effect, or which may hereafter be enacted. "Hazardous Substance"
includes any and all materials or substances that are defined as "hazardous waste," "extremely hazardous
waste," or "hazardous substance" pursuant to state, federal, or local environmental laws and regulations. The
term "Hazardous Substance" includes but is not restricted to asbestos, polychlorobiphenyls ("PCBs'), and
petroleum and petroleum products.
12.4 Landlord Reports. Landlord represents that it has provided Tenant with correct and
complete copies of all Phase I environmental reports obtained by or in Landlord's possession or control
pertaining to the Leased Premises.
13. DEFAULTS; REMEDIES.
13.1 Default. The following shall be defaults:
13.1.1 Payment Default. Failure of Tenant to make any Base or additional rent or
other payment under this Lease within ten (10) days after written notice from Landlord stating that such
payment is past due.
13.1.2 Unauthorized Transfer. Tenant makes any Transfer requiring landlord's
consent without Landlord's prior written consent as required under paragraph 8.
13.1.3 Default In Other Covenant. Failure of Tenant to comply with any other term
or condition or fulfill any other obligation of this Lease within twenty (20) days after written notice by Landlord
specifying the nature of the default with reasonable particularity; provided, however, that no written notice shall
be required or opportunity to cure afforded if Tenant has previously been in default after a material breach of
this Lease on at least two occasions in the preceding Lease Year but in no event shall Landlord have the right
to terminate this Lease without having afforded Tenant with a written notice and an opportunity to cure any and
all breaches giving rise to the right to terminate this Lease.
13.1.4 Insolvency Defaults. Dissolution, termination of existence, insolvency on a
balance sheet basis or business failure of Tenant; the commencement by Tenant of a voluntary case under
the federal bankruptcy laws or under any other federal or state law relating to insolvency or debtor's relief; the
entry of a decree or order for relief against Tenant in an involuntary case under the federal bankruptcy laws or
under any other applicable federal or state law relating to insolvency or debtor's relief; the appointment of or
the consent by Tenant to the appointment of a receiver, trustee or custodian of Tenant or of any of Tenant's
property; an assignment for the benefit of creditors by Tenant; Tenant's failure generally to pay its debts as
such debts become due; the making or suffering by Tenant of a fraudulent transfer under applicable federal or
state law; concealment by Tenant of any of its property in fraud of creditors; the making or suffering by Tenant
of a preference within the meaning of federal bankruptcy law; or the imposition of a lien through legal
proceedings or distraint upon any of the property of Tenant which is not discharged or bonded. During any
period in which there is a Guarantor(s) of this Lease, each reference to "Tenants" in this paragraph shall be
deemed to refer to "Guarantor or Tenant", separately.
13.2 Remedies on Default. Upon default, Landlord may exercise any one or more of the
following remedies, or any other remedy available under applicable law:
13.2.1 Termination of Lease. Upon a material default, Landlord shall have the
immediate option to terminate this Lease and all rights of Tenant hereunder. In the event that Landlord shall
elect to terminate this Lease, Landlord may recover from Tenant: (i) the amount of any unpaid rent which has
been earned at the time of such termination; plus (ii) the amount by which the unpaid rent which would have
been earned after termination and for the balance of the Lease term exceeds the amount of such rental Toss
that Tenant proves that could have been reasonably avoided; plus (iii) any interest charged on delinquent rent;
plus any other amount to compensate Landlord for the detriment proximately caused by Tenant's failure to
perform Tenant's obligations under this Lease.
COMMERCIAL LEASE 16
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13.2.2 Retake Possession. To the extent permitted by law, Landlord may re-enter
and retake possession of the Leased Premises, on three (3) days' advance notice, either by summary
proceedings or any other applicable action or proceeding, or otherwise. Landlord may use the Leased
Premises for Landlord's own purposes or relet it upon any reasonable terms without prejudice to any other
remedies that Landlord may have by reason of Tenant's default. None of these actions will be deemed an
acceptance or surrender by Tenant.
13.2.3 Relet the Leased Premises. Landlord, at its option, may relet the whole or
any part of the Leased Premises, from time to time, either in the name of Landlord or otherwise, to such
tenants, for such terms ending before, on or after the expiration date of the Lease term, at such rentals and
upon such other conditions (including concessions and free rent periods) as Landlord, in its sole discretion,
may reasonably determine to be appropriate. Landlord, at its option, may make such physical changes to the
Leased Premises as Landlord, in its sole discretion, considers advisable or necessary in connection with any
such reletting or proposed reletting without relieving Tenant of any liability under this Lease or otherwise
affecting Tenant's liability. In the event Landlord elects to relet the Leased Premises, rent received by
Landlord for such reletting shall be applied; first, to the payment of any cost of reletting; second, to pay the
cost of any alterations or repairs to the Leased Premises; third, to the payment of indebtedness other than rent
owed by Tenant to Landlord; and fourth, to the payment of rent due and unpaid under the Lease, and the
residue, if any, shall be held by Landlord and applied to the payment of future rent as the same may become
due and payable. Should rent received from the reletting of the Leased Premises during any month be less
than the rent payable under the terms of the Lease by Tenant, then Tenant shall pay the deficiency to Landlord
immediately upon demand.
13.2.4 Damages for Default. Whether or not Landlord retakes possession or relets
the Leased Premises, Landlord may recover all damages caused by the default (including but not limited to
unpaid rent, attorney's fees relating to the default, and costs of reletting). Landlord may sue periodically to
recover damages as they accrue during the remainder of the Lease term without barring a later action for
further damages. Upon the occurrence of a payment default, Landlord may bring an action for accrued
damages plus damages for the remaining Lease term equal to the difference between the rent specified in this
Lease and the reasonable rental value of the Leased Premises for the remainder of the term, discounted to
the time of judgment at the rate of seven percent (7%) per annum.
13.3 Cure of Default. Without prejudice to any other remedy for default, Landlord or
Tenant may perform any obligation or make any payment required to cure a default by the other. The cost of
performance, including attorney's fees and all disbursements, shall immediately be repaid by the responsible
party upon demand, together with interest from the date of expenditure until fully paid at the rate of ten
percent (10%) per annum, but not in any event at a rate greater than the maximum rate of interest permitted
by law.
13.4 Remedies Cumulative. Any right or remedy Landlord may have under this Lease
arising out of Tenant's breach of any covenant of this Lease shall be in addition to any other right or remedy
for such breach provided by law.
14. TENANT IMPROVEMENTS. Except as set forth in this Lease or in a separate written
Agreement between Landlord and Tenant, Tenant shall be solely responsible, at its cost and expense,. to
perform any improvements desired by Tenant and not required of Landlord by this Lease ("Tenant's
Improvements"). All of Tenant's Improvements shall be subject to and conducted in accordance with the
provisions of paragraph 6.5 of this Lease.
15. GENERAL PROVISIONS.
15.1 Waivers. No waiver by a party of performance of any provision of this Lease shall be
deemed to be a waiver of nor prejudice that parties' right to otherwise require performance of the same
provision or any other provision.
COMMERCIAL LEASE 17
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15.2 Recording/Lease Disclosure. Tenant shall be entitled to record a memorandum of
this Lease noting among other things Tenant's option to purchase, but in no event shall the recorded
memorandum disclose the rent amounts owed under this Lease. Tenant shall also have the right, and is
hereby authorized to, prepare and file a financing statement with respect to Tenant's option to purchase,
subject to Landlord's review and reasonable approval. Landlord shall cooperate in effecting the recording of
any such memorandum. Tenant shall also be entitled to disclose this Lease and its terms in connection with
any governmentally required disclosure obligation or to any investors or potential investors or purchasers of
Tenant.
15.3 Notices. Notices under this Agreement shall be in writing and, unless otherwise
required by law, may be delivered (1) personally; (2) by U.S. mail, certified or registered; (3) by a nationally
recognized overnight courier service; or (4) by facsimile transmission, if a facsimile number has been provided
by the party receiving notice, with a copy to be sent by U.S. first class mail. Mailed notices shall be deemed
effective on the third day after deposited as registered or certified mail, postage prepaid, directed to the other
party at the address shown above. Couriered notices shall be deemed delivered when the courier's records
indicate that delivery has occurred. Facsimile notices shall be effective when actually transmitted to the
facsimile number provided. Either party may change its address for notices by written notice to the other.
15.4 Exhibits and Riders. Exhibits and riders, if any, attached or affixed to this Lease,
are a part hereof as if set forth in full herein.
15.5 Construction. (a) This Lease shall be construed and governed by the laws of the
State of Washington; (b) the invalidity or unenforceability of any provision hereof shall not affect or impair any
other provision hereof; (c) this Lease constitutes the entire agreement of the parties and supersedes all prior
agreements or understandings between the parties with respect to the subject matter hereof; (d) this Lease
may not be modified or amended except by written agreement signed and acknowledged by both parties; (e) if
there is more than one tenant, the obligations hereunder imposed upon Tenant shall be joint and several; (f)
time is of the essence of this Lease in each and every provision hereof; and (g) nothing contained herein shall
create the relationship of principal and agent or of partnership or of joint venture between the parties hereto
and no provisions contained herein shall be deemed to create any relationship other than that of Landlord and
Tenant.
15.6 Successor. Subject to any limitations on assignments herein, all of the provisions of
this Lease shall inure to the benefit of and be binding upon the successors and assigns of the parties hereto.
15.7 Attorney's Fees. In the event of any dispute arising out of or relating to this Lease,
whether or not suit or other proceedings is commenced, and whether in mediation, arbitration, at trial, on
appeal, in administrative proceedings, or in bankruptcy (including, without limitation, any adversary proceeding
or contested matter in any bankruptcy case), the prevailing party shall be entitled to its costs and expenses
incurred, including reasonable attorney fees. Venue shall be in Yakima County, Washington.
15.8 Commission /Agency Disclosure. Upon signing this Lease, the leasing broker,
Washington Partners and its agents, Brian Kelly and Eric Lonergan (collectively "Tenant's Agent"),
represented the Tenant. However, Landlord agrees to pay a leasing commission to Tenant's Agent in the
amount of One Hundred Sixty -Seven Six Hundred Ninety-seven Dollars ($167,697.00) (Five Dollars
($5.00) per rentable square foot). Unless otherwise agreed between the parties, the commission shall be
payable by Landlord on the Lease Commencement Date.
15.9 No Offer. This Lease is submitted to Tenant on the understanding that it will not be
considered an offer and will not bind Landlord in any way until (a) Tenant has duly executed and delivered
duplicate originals to Landlord, and (b) Landlord has executed and delivered one of such originals to Tenant.
16. OPTION TO PURCHASE. Subject to the terms and conditions set forth in this paragraph
16.1 through 16.8, and provided that Tenant is not in material default under any terms and conditions of this
Lease, Landlord hereby grants to Tenant an option to purchase the Leased Premises and all appurtenances
thereto.
COMMERCIAL LEASE 18
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16.1 Option Property. Tenant's option to purchase shall include all Real Property and
improvements which constitute the Leased Premises (the commercial building and Real Property on which it is
located and the Primary Parking Facilities), and, at Tenant's option, may or may not, at Tenant's option,
include Supplemental Lot No. 2 (as more fully described in paragraph 11.7 above). Notwithstanding the
foregoing, Tenant may not exercise its option to purchase Supplemental Lot No. 2 unless it also exercises its
option to purchase the remainder of the Leased Premises.
16.2 Time of Exercise. Tenant's right to exercise the option set forth in this paragraph
shall accrue on the Commencement Date of this Lease and shall terminate twenty-four (24) months after the
Lease Commencement Date. Tenant shall exercise its option to purchase by giving Landlord written notice of
its intent to exercise the option, which notice shall indicate whether or not Tenant elects to acquire
Supplemental Lot No. 2, along with the principal Leased Premises. Tenant's notice of exercise of its option
shall also include a promissory note payable to the closing agent in the amount of Two Hundred Three
Thousand Nine Hundred Forty and No/100 Dollars ($203,940.00) as earnest money, to be applied towards
the purchase price for the Property set forth in paragraph 16.3 below. Landlord and Tenant shall promptly
enter into a Purchase and Sale Agreement, using the form attached hereto as Exhibit E, following Tenant's
exercise of its purchase option. Tenant's exercise of its option shall be subject to Tenant's reasonable
satisfaction, within sixty (60) days after mutual execution of the Purchase and Sale Agreement, with its
structural and environmental inspections of the property to be purchased. Once the inspection contingency
has been removed, the promissory note shall be replaced with cash. If Tenant fails to timely exercise its
option, Tenant agrees to execute an appropriate document (in recordable form) confirming that Tenant's rights
in and to the Leased Premises expire with this Lease if reasonably requested by Landlord.
16.3 Purchase Price. Tenant's option to purchase the original Leased Premises
(excluding Supplemental Lot No. 2) shall be for a fixed purchase price in the agreed amount of Two Million
Thirty -Nine Thousand Four Hundred and No/100 ($2,039,400.00). Tenant's additional option to purchase
Supplemental Lot No. 2 shall be for a purchase price equal to the Fair Market Value of the property at the time
of exercise. The Fair Market Value of Supplemental Lot No. 2 shall be determined by mutual agreement of
the parties or, if the parties cannot agree, the Fair Market Value of Supplemental Lot No. 2 shall be
determined by the binding appraisal procedure outlined in paragraph 16.4 below. Unless otherwise agreed
between the parties in writing, Tenant shall pay the entire purchase price, in cash, at the time of Closing.
16.4 Appraisal Procedure. In the event Landlord and Tenant do not agree upon the Fair
Market Value of Supplemental Lot No. 2 within twenty (20) days of Tenant's notice of exercise of its option,
the parties shall negotiate in good faith and select one (1) qualified, independent commercial real estate
appraiser licensed in the state of Washington and familiar with the sale and rental of commercial real property
in the area which includes the property. The selected appraiser shall then determine the Fair Market Value of
Supplemental Lot No. 2 within thirty (30) days of appointment. The parties shall each pay one-half (%)of the
cost of the appraisal. The Fair Market Value determined by the appraiser shall be used as the Option
Purchase Price, unless Landlord or Tenant gives the other party written notice within fifteen (15) days after
receipt of the appraisal, that the appraisal is not acceptable. The party objecting to the appraisal shall then
obtain a second appraisal (with an appraiser meeting the qualifications set forth above), at such parties' sole
cost and expense within thirty (30) days of such rejection. In such event, the Fair Market Value of
Supplemental Lot No. 2 shall be the average of the initial appraisal and the second appraisal obtained by the
party objecting to the initial appraisal. The appraisal process set forth above must be completed no later than
ninety (90) days of Tenant's exercise of its option.
16.5 Title to the Leased Premises. If Tenant timely exercises its option to purchase as
described herein, Landlord shall provide to Tenant a standard ALTA owner's policy of title insurance covering
the Leased Premises at the close of the transaction with an insurer selected by Landlord. Title to the Leased
Premises shall be transferred to Tenant free and clear of all encumbrances, except those Tenant may have
created or suffered, and subject to rights of existing tenants, rights reserved in federal patents, state or
railroad deeds, building or use restrictions general to the area, zoning regulations, utility easements of record,
rights-of-way or easements shown on the plat or visible by inspection, reserved oil and/or mineral rights and
COMMERCIAL LEASE 19
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any future adjudication of surface water or groundwater rights by any appropriate federal and/or state
proceeding.
16.6 Other Writings. The parties hereby agree to execute any and all additional
documents which may be necessary in order to exercise this option and close the transaction pursuant to the
terms and conditions stated herein.
16.7 Taxes and Other Charges. Unless otherwise agreed, any real estate taxes,
leasehold excise taxes, insurance, interest or other utility charges constituting liens against the Leased
Premises for which Landlord is responsible shall be prorated as of the Date of Closing.
16.8 Closing. Closing shall occur in the office of the title insurer selected by Landlord
within ninety (90) days after Tenant's and Landlord's execution of the Purchase and Sale Agreement. The
parties shall deposit with the closing agent all instruments, documents and money necessary to complete the
sale of the Leased Premises in accordance with the terms of this option. All dosing costs associated with the
purchase of the Leased Premises, excluding the cost of a standard owner's title insurance policy and real
estate excise tax which shall be paid by Landlord, shall be borne equally by the parties.
17. TAX ABATEMENT. Landlord shall work and cooperate with tenant and local authorities to
obtain a real estate and personal property tax abatement, along with other incentives offered, in order to
reduce operating costs for Tenant. Upon receipt of any such benefits, they shall be fully passed through to
Tenant so the full benefit thereof is realized by Tenant.
WHEREFORE, the parties have executed this Lease this at day of October, 2005.
LANDLORD:
TENANT:
CHINO° BUSINESS PARK, L.L.C. HOUSEVALUES, IN
. Lukeh
/b y • o5
1111111114°40.-
ember
COMMERCIAL LEASE 20
BA052910.035
STATE OF WASHINGTON )
ss.
County of Yakima
I certify that I know or have satisfactory evidence that D. Lukehart who appeared
before me, and said person acknowledged that she/he is authzed to execyt6 t e, instrument s Member of
CHINOOK BUSINESS PARK, L.L.C., a Washington limit:: liability cor ipa „and acknowl ged that thi
to be the free _ act of such parties/for • e u, -s and purposes ►� ntioned in the ' trun*nt
STATE OF WASHINGTON
County of 14
) ss.
ame:
Notary Public in and for the state
/ of Washington, residing in Yakima.
/ My Commission Expires: g"Zz Og
I certify that I know or have satisfactory evidence that 444/g1O11 ! tai 5 is
the person who appeared before me, and said person acknowledged that she/he is authorized to execute the
instrument as Pitbi t COO of HOUSEVALUES, Il C., a Washington corporation, and
acknowledged that this to be the free and voluntary act of such parties for the uses and purposes mentioned in
the instrument.
DATED: 00. .2 1 ,200S -
\
00S
Priht N e:
Notary Public in and for the state t
of Washington, residing in
My Commission Expires: 12- 10 -01
COMMERCIAL LEASE 21
BA052910.035
:.-',7(1-11SIT A
PRIMARY PREMISES
That portion of the hereinafter described Parcel "A" Tying easterly and southerly of the following
described line;
Beginning at the northwest comer of Lot 1, Block 2, MOYER'S ADDITION, according to the Plat
thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington;
Thence North 00°25'39" West 360.04 feet; parallel with the west line of said Lot 1;
Thence North 89°35'52" East 304.12 feet to the southwesterly right of way of State Highway No.
82 and the terminus of said line.
PARCEL "A"
The south 7.50 acres of the Northeast Quarter, of the Southwest Quarter, of the Southwest
Quarter, and the north 16.50 feet of the Southeast Quarter, of the Southwest Quarter, of the
Southwest Quarter, and the portion of the North Half, of the Southeast Quarter, of the Southwest
Quarter lying westerly of the east line of the Plat of Moyer's Addition, according to the Plat thereof
recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington, all in Section
7, Township 13 North, Range 19, East, W.M.
EXCEPTING therefrom the following:
1. That part thereof Tying west of the east line of North 4th Street.
2. Right of way for State Highway No. 82.
3. Beginning at the northwest corner of Lot 1, Block 1, Moyer's Addition, according to the
plat thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County,
Washington;
Thence east along the north line of said Plat of Moyer's Addition 300.00 feet to the
northeast corner of Lot 6, Block 1, of said Plat;
Thence north 146.50 feet;
Thence west 300.00 feet to the east line of North 4th Street;
Thence south 146.50 feet to the point of beginning.
4. Any portion which may lie south of the north line of said Moyer's Addition.
5. Any portion which may lie north of a line described as follows:
Beginning at a point on the east line of North 4th Street as shown on the Plat of Park
Addition to North Yakima, now Yakima, according to the official plat thereof recorded
in Volume "A" of Plats, Page 13, records of Yakima County, Washington, 50.00 feet east
and 165.00 feet south of the southeast corner of Lot 10 of said plat;
Thence east 650.00 feet to the terminus of said line.
Situate in Yakima County, Washington.
\tr
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._.A �1i:3i A
LD9-95114.3RD August 12. 1999
EXHIBIT B
EXHIBIT B
B
Supplemental Lot 1.
That portion of the Southwest Quarter of Section 7, Township 13 North, Range 19 East,
W.M. described as follows:
Beginning at the northwest comer of Lot 1, Block 1, Moyer's Addition, according to the
Plat thereof recorded in Volume "B" of Plats, page 73, records of Yakima County,
Washington.
Thence East along the north line of said Plat 300 feet;
Thence North 146.5 feet;
Thence West 300 feet;
Thence South 146.5 feet to the Point of Beginning.
Except the West 173.83 feet and except right of way for City streets.
And. Lot 6, Block 1 of said plat of Moyer's Addition. Except right of way for City
streets.
And the North half of Lots 1,2,3,4, and 5, Block 1 of said plat of Moyer's Addition.
Except the South 1.0 feet of said North half of Lots 3,4, and 5.
EXHIBIT B
Supplemental Lot 2
DESCRIPTION PARCEL 191307-33024
That portion of the hereinafter described Parcel "A" Tying westerly and northerly of the following
described line;
Beginning at the northwest corner of Lot 1, Block 2, MOYER'S ADDITION, according to the Plat
thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington;
Thence North 00`v25'39" West 360.04 feet; parallel with the west line of said Lot 1;
Thence North 89-v35'52" East 304.12 feet to the southwesterly right of way of State Highway
No. 82 and the terminus of said line.
PARCEL "A"
The south 7.50 acres of the Northeast Quarter, of the Southwest Quarter, of the Southwest
Quarter, and the north 16.50 feet of the Southeast Quarter, of the Southwest Quarter, of the
Southwest Quarter, and the portion of the North Half, of the Southeast Quarter, of the
Southwest Quarter Tying westerly of the northerly extension of the east line of the Plat of
Moyer's Addition, according to the Plat thereof recorded in Volume "B" of Plats, Page 73,
records of Yakima County, Washington, all in Section 7, Township 13 North, Range 19, East,
W.M.
EXCEPTING therefrom the following:
1. That part thereof Tying west of the east line of North 4th Street.
2. Right of way for State Highway No. 82.
3. Beginning at the northwest corner of Lot 1, Block 1, Moyer's Addition, according
to the plat thereof recorded in Volume "B" of Plats, Page 73, records of Yakima
County, Washington;
Thence east along the north line of said Plat of Moyer's Addition 300.00 feet to
the northeast corner of Lot 6, Block 1, of said Plat;
Thence north 146.50 feet;
Thence west 300.00 feet to the east line of North 4th Street;
Thence south 146.50 feet to the point of beginning.
4. Any portion which may lie south of the north line of said Moyer's Addition.
5. Any portion which may lie north of a line described as follows:
Beginning at a point on the east line of North 4th Street as shown on the Plat of
Park Addition to North Yakima, now Yakima, according to the official plat thereof
recorded in Volume "A" of Plats, Page 13, records of Yakima County,
Washington, 50.00 feet east and 65.00 feet south of the southeast corner of Lot
10 of said plat;
Thence east 650.00 feet to the terminus of said line.
6. That portion conveyed to the City of Yakima for right of way purposes as
recorded under Auditor's File Number 7141676.
95114.11 th
EXE itE1 T S
7. That portion of the Southwest Quarter of the Southwest Quarter of Section 7
Township 13 North, Range 19 East, W.M., described as follows:
Commencing at the northwest corner of Lot 1, Block 2, MOYER'S ADDITION,
according to the Plat thereof recorded in Volume "B" of Plats, Page 73, records of
Yakima County, Washington.
Thence North 00-v25'39" West along the easterly right of way of Fifth Street
238.56 feet;
Thence North 90-v00'00" West 50.00 feet to the Point of Beginning;
Thence North 00-v25'39" West 121.13 feet;
Thence North 89`'35'52" West 297.89 feet to the east right of way of Fourth
Street;
Thence South 00-v05'33" East 143.15 feet to the North right of way of "S" Street;
Thence South 45-012'28" East 28.25 feet;
Thence North 89-v40'37" East 253.85 feet;
Thence North 50"'58'35" East 31.99 feet;
Thence North 00`v25'39" West 22.43 feet to the Point of Beginning.
Situate in Yakima County, Washington.
And except any portion thereof lying southerly of the north line of the following described parcel
and its easterly extension:
That portion of the Southwest Quarter of the Southwest Quarter of Section 7, Township 13
North, Range 19 East, W.M. described as follows:
Commencing at the northwest corner of Lot 1, Block 2, MOYER'S ADDITION, according to the
Plat thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington;
Thence North 00`'25'39" West along the easterly right of way of Fifth Street 238.56 feet;
Thence North 90-v00'00" West 50.00 feet to the Point of Beginning;
Thence North 00--25'39" West 121.13 feet;
Thence North 89`@35'52" West 297.89 feet to the east right of way of Fourth Street;
Thence South 00-v05'33" East 143.15 feet to the North right of way of "S" Street;
Thence South 45`v12'28" East 28.25 feet;
Thence North 89`v40'37" East 253.85 feet;
Thence North 50-v58'35" East 31.99 feet;
Thence North 00'25'39" West 22.43 feet to the Point of Beginning.
Situate in the City of Yakima, Yakima County, Washington.
95114.11th
a
PHASE 1 - FLOOR 1 - 3)1 WORKSTATIONS
PHASE 2 - 51.00R 1 - 151 WORKSTATIONS
(511802AL FLOO206630AlpNS
OINSE 2 - MER 0100605 -2) 139 WORKS10
TOTAL: PHASE 1 ANO 2 - 095 WORKSTATIONS
JPC ARCHITECTS
601 108th Ave NE - Suite 2250
Bellevue, WA 98004
tel 14251641.9200, fax [425] 637-8200
House Values
JPC PROJ MGR: Edward Hanbicki
JPC PROJ NO. 05-100-0661
REVISION: Space Plan 10/17/05
BUILDING:
® 2005, JPC ARCHITECTS PLLC
$167,697.00
$164,902.05
$162,107.10
$159,312.15
$156,517.20
$153,722.25
$150,927.30
$148,132.35
$145,337.40
$142,542.45
$139,747.50
$136,952.55
$134,157.60
$131,362.65
$128,567.70
$125,772.75
$122,977.80
$120,182.85
$117,387.90
$114,592.95
$111,798.00
$109,003.05
$106,208.10
$103,413.15
$100,618.20
BA052910.035
EXHIBIT C
AMORTIZATION SCHEDULE
EXHIBIT C
97,823.25
95,028.30
92,233.35
89,438.40
86,643.45
83,848.50
81,053.55
78,258.60
75,463.65
72,668.70
69,873.75
67,078.80
64,283.85
61,488.90
$
58;693.95
55,899.00
53,104.05
50;309.10
$
47,51415
$
44,719.20
$
41,924.25,
$
39,129.30
$
36,334.35
$
33,539.40.
$
30,744.45
$
27,949.50
$.
25,154.55
22,359.60
EXHIBIT C
BA052910.035
19,564.65
$
16,769.70
13,974.75
11,179.80
8,384.85.
$
5,589.90
2,794.95
EXHIBIT C
BA052910.035
EXHIBIT D
Tenant's Planned Improvements
(attached)
EXHIBIT D
BA052910.035
WORK LETTER
House Values Yakima
Baby Jogger Bldg, Chinook Business Park
Yakima, Washington
October 12, 2005
Revised: October 14, 2005
JPC Project Number: 05-100-0661
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Summary
The goal of this project is to convert an existing manufacturing warehouse facility into
office use to accommodate a new call center for House Values. The main portion of the
facility is a pre -manufactured warehouse building with an additional office component. a3, /53
The project will be built in 2 phases. The 1st phase will occupy approximately 20,000 sf
and house up to 365 call center stations. The second phase will include build out of the
remainder of the existing warehouse floor for additional call center stations. The second
phase may also include the construction of a structured mezzanine to accommodate
additional headcount if required.
This work letter is to be limited to Phase 1 only and will include alt major infrastructure
upgrades, including, mechanical, electrical, structural (if required) and fire protection as it
relates to Phase 1 only. All infrastructure systems should be designed for easy
expansion when the 2"d phase is built.
The following scope of work description outlines specific tenant requests to be included
in the pricing for the tenant improvement of the previous Baby Jogger Company facility.
Scope of Work
1. Codes and Ordinances — The project shall comply with the requirements of the
2003 International Building Code with the City of Yakima amendments, latest
edition of the UPC, UMC, NEC, Washington State Barrier Free Regulations, and
Americans with Disabilities Act, Washington State Energy Code, NFPA 13, and
Washington Department of industries Clean Air regulations.
2. Provide an allowance for carpet tile of $21.001Sq. Yd. material only. Dealer
mark-up, freight, tax, and installation are not included and indicated as a
separate line item.
3. All existing and new wall surfaces shall receive new paint. Color shall be
selected by architect. Assume one accent wall color in each room, and up to
three accent wail colors in main call center space.
4. All existing window blinds shall be cleaned and repaired to good working order.
5. Where existing ceiling surfaces are to remain, all damaged ceiling surfaces shall
be patched and repaired to like new" condition. Repair damage to ceiling grid at
areas of wall removal.
JPC ARCHITECTS
6. Relocate existing mechanical, fire protection systems as required for new layout
within the existing office space environment.
7. General Office space lighting may be reused, but reconfigured to match the new
layout. Provide a uniform lighting pattern throughout the suite. See information
on individual spaces for more information.
8. Provide entrance signage, directory signage, and directional signage as required.
9. Existing electrical and voice/data outlets shall be reused when possible.
Demolition
a. Provide demolition work in the extent as necessary to achieve the desired
intent and spirit of the JPC Architects space planning document and
schematic plan dated 10/12/05, Including, but not limited to wall, floor and
ceiling demolition and coring and thru wall penetrations. All existing flooring
shall be removed and substrate prepared for tenant finishes.
b. All existing equipment not needed for office use shall be removed and all
anchors, penetrations, and associated furring shall be removed and openings
in filled with materials to match adjacent construction.
c. All curbs, floor sinks, and plumbing indicated for demolition, shall be
removed. Concrete slab shall be repaired.
d. Existing ceiling grid, tile, and lighting in existing office component shall be
removed. Undamaged ceiling tile to be retained for reuse.
e. Existing lighting and HVAC diffusers and grilles shall be salvaged for reuse.
f. Existing interior partitions shall be removed unless specified to remain in the
space plan.
g. All existing millwork shall be removed.
h. Existing overhead doors shall be removed.
Existing compressed air, vacuum piping, hoses, and cabling shall be
removed. Existing wall plenums shall be removed and exterior wall
insulation, furring, and GWB shall be repaired or installed.
j. Existing ceiling mounted ductwork interfering with the installation of new
systems shall be removed. Ductwork in the existing office portion of the
facility to be retained and reused if possible.
k. Existing low voltage cabling shall be removed.
Existing electrical devices surface mounted to exterior wall or mounted at
non-standard height shall be removed and hole in -filled.
m. Ceiling shall remain at the toilet room/conference room areas with GWB
header walls separating the lay -in ceiling areas. Coordinate ceiling demo
with the proposed space plan.
601 108th Ave NE - Suite 2250 Bellevue WA 98004 tel 14251641 9200 fax 14251637 8200 lwvvv,jpcarchitects.com
JPC ARCHITECTS
n. Toilet room finishes and partitions shall be removed and surfaces prepared
for new finishes specified below.
General Building Elements
Building Exterior
All existing overhead roll -up doors defined to be removed to be in filled with double -
pained insulated glass in aluminum frame.
Building Finishes
a. Main Lobby — Existing finishes to be removed and prepared for new flooring,
paint/wall coverings, and base.
b. Restrooms — Existing flooring, counters, and toilet partitions shall be
removed. Provide new 2 x 2 tile wainscot with 1 x 1 accent tiles, 8"x8"
ceramic tile flooring, laminate counters, new stainless steel bathroom
accessories, under -mounted sinks, mirrors, vanity, and laminate partitions.
Ceiling lighting to remain. Lavatories to be reused if undamaged.
c. Doors — Existing doors and frames may be reused. New doors shall be 8'-O"
height solid core wood door in aluminum or hollow metal frame.
d. Flooring — New flooring to be provided throughout as defined below. New
14" raised access flooring to be installed throughout open office environment
located in warehouse portion only. This will include areas within the existing
mechanical mezzanine which is the new lunch room, conference room,
storage room, data room, and electrical room.
Structural
a. A portion of the structural mezzanine shall remain. New shear walls to be
added per structural engineering. Preliminary design includes installation of
new plywood on existing stud wall.
b. Minor structural upgrades to the roof of the warehouse may be required in
selected areas to support equipment.
Mechanical
a. Provide new under -floor HVAC system to service all areas in existing
warehouse. Systems description report to be provided by mechanical
engineers.
b. Existing mechanical systems to be reused to service all existing office areas
and restrooms.
c. Floor mounted dedicated unit (Liebert or similar) to be installed to service
new data room.
601 108th Ave NE - Suite 2250 Bellevue, WA 98004 tet 0251641 9200 fax 14251637 8200 www.1Pcarchitects.con
JPC ARCHITECTS
Electrical
a. Existing electrical service to building has been defined as 800 amps. It is
thought that the existing service may have to be upgraded to 1600 amp.
b. Electrical load for tenant convenience power (not including computer room,
lighting, HVAC) shall be minimum 5 watts/s.f. available on the floor.
c. Lighting shall be 1.2 watts/s.f. consisting of general fluorescent lighting and
specialty display lighting.
d. Mechanical allowance for power shall be based on base building system
design supporting tenant power requirements outlined above and shall not
decrease available convenience power.
e. Electrical system to be designed and built in anticipation for a generator to be
installed as part of the second phase of construction.
f. Existing main electrical equipment located in the warehouse portion of the
facility to be reused where possible.
Life Safety/Fire Protection
a. Provide changes and alterations necessitated by Tenant Improvements to
existing fire sprinkler system.
b. New fire sprinkler heads may be required to new training rooms and
conference rooms in open office area.
c. No dry system will be required in new data room.
Security
a. Design and installation of security system shall be provided by General
Contractor. Design to be based on tenant requirements and specifications.
Plumbing
a. Provide stub ups for future restrooms located on west portion of the building,
in the room labeled `Storage — Future Rest rooms'.
b. New plumbing for sink and coffee maker to be provided in new lunch room.
601 108th Ave NE - Suite 2250 Bellevue, WA 98004 tel (4251 641 9200 fax 1425163? 8200 www.jpcarchitects,corn
JPC ARCHITECTS
Specific Room Requirements
Reception
a. Provide an $8,000.00 allowance for a custom reception desk and back base
counter with doors and adjustable shelves and 1" thick art glass transaction top.
b. Provide (1) power/communications package to supply receptionist work space
with voice/data connectivity and (2) 110V duplexes. Electrical and low voltage
cabling to be coordinated with reception desk fabricator's recommendations.
c. Provide (1) power/communications package above the Applications counter (total
3)
d. Provide (2) power/communications packages consisting of (1) 110v duplex and
(1) single gang mud ring with pull string to supply the back work/base counter.
e. Provide new carpet tile throughout with walk -off matt at entry and 4" high rubber
base.
f. Provide can lights and pendant fixtures for accent lighting over reception desk.
g. Provide can lights over Application counter.
h. Provide (1) wall mounted 24" Plasma at lobby. Location to be determined
Lunchroom
a. Provide new plumbing fixtures. Reuse existing appliances if in good working
order. Sink to be 2 compartment sink.
b. Provide access flooring throughout with rubber base. Access flooring tiles to
remain exposed, and sealed with clear sealer. Provide alternate price for
staining concrete access flooring tiles (two colors).
c. Provide dedicated outlets for two beverage coolers and two refrigerators.
d. Provide power for garbage disposal, dishwasher, coffee maker and (2)
microwave ovens.
e. Provide under counter dishwasher and garbage.
f. Lighting to be 2x4 18 cell parabolic.
g. Provide ceiling exhaust fan, base CFM on room size.
h. Reuse existing upper and lower plastic laminate cabinets from lunchroom where
able.
601 108th Ave NE - Suite 2250 Bellevue, WA 98004 tet 14251641 9200 fax 14251637 8200 NV ww.ipcarchitects.com
JPC ARCHITECTS
Coffee Area
a. Provide new plumbing fixtures. Sink to be 2 compartment sink.
b. Provide access flooring throughout with rubber base. Access flooring tiles to
remain exposed, and sealed with clear sealer. Provide alternate price for
staining concrete access flooring tiles (two colors).
c Provide dedicated outlets for two beverage coolers and two refrigerators.
d. Provide power for coffee maker and (2) microwave ovens.
e. Provide ceiling exhaust fan, base CFM on room size.
New Server Room
a. Provide electric strike locking hardware on door and frame.
b. Provide access flooring with static dissipative VCT. VCT to be installed on
individual floor tiles to allow access to floor plenum.
c. New power and data for 4 standard computer racks with server.
d. Provide new fire treated plywood for telephone and data systems on two walls.
e. Provide dedicated exhaust fan to exhaust room.
f. Provide a uniform lighting pattem throughout utilizing 2x4 18 cell parabolic
Open Office (workstation area)
a. Provide 14" raised access flooring throughout in warehouse area.
b. Ceiling in warehouse area to be open to structure above. Provide light weight
ceiling elements at columns.
c. Provide uplights at columns to reflect off ceiling elements to provide additional
indirect lighting at workstations.
d. Provide insulation as required on exterior wall. Install gyp board at exterior wall
to 14' AFF, and paint.
e. Paint out existing structure above 14' to match wall color.
f. Open office area in existing office space to be slab on grade, no raised floor.
g. Provide workstation power/communications to supply each workstation with
voice/data connectivity and (2)110V duplexes. Electrical and low voltage cabling
to be coordinated with workstation manufacturer's recommendations and layout.
h. Provide and connect electrical/data whips from under floor to workstation splines.
Anticipated one connection each for power and data.
i. Connections to workstations on slab to be through wall connections or power
poles from ceiling above.
60t 108th Ave NE - Suite 2250 Bellevue, WA 98004 te114251641 9200 fax (4251637 8200 www.jpcarchitects.cem
JPC ARCHITECTS
j. Provide carpet tile with 4"h coved rubber base.
Typical Private Office
a. Provide building standard 3'-0" wide door with double 2'-0" wide full ht. relites
b. Provide standard carpet tile with 4"h coved rubber base.
c. All damaged and/or stained ceiling surfaces shall be patched, repaired or
replaced to "like new" condition. Repair damage to ceiling grid at areas of wall
removal.
d. Provide (2) power/communications packages consisting of (1) 110v duplex and
(1) single gang mud ring with pull string (location to be identified).
e. Lighting shall be reused, but reconfigured to match the new layout. Replace
existing lamps for consistent color. Provide a uniform lighting pattern throughout
the suite.
Interview Rooms
a. Standard 3'-0" wide door with 48" residential window style relite.
b. Provide carpet tile with 4"h coved rubber base.
c. All damaged and/or stained ceiling surfaces shall be patched, repaired or
replaced to "like new" condition. Repair damage to ceiling grid at areas of wall
removal.
d. Provide (2) power/communications packages consisting of (1) 110v duplex and
(1) single gang mud ring with pull string (location to be identified).
e. Lighting shall be reused, but reconfigured to match the new layout. Replace
existing lamps for consistent color. Provide a uniform lighting pattern throughout
the suite.
Copy/Mail
a. Provide new upper and lower cabinets with doors and adjustable shelves.
b. Provide vinyl composition tile flooring throughout ((1) field/ (2) accent colors) with
rubber base.
c. Provide dedicated outlet and single gang mud ring with pull string for data at
copier.
d. Provide (2) power/communications packages consisting of (1) 110v duplex and
(1) single gang mud ring with pull string above counter.
e. Lighting shall be reused, but reconfigured to match the new layout. Replace
existing lamps for consistent color. Provide a uniform lighting pattem throughout
the suite.
601 108th Ave NE - Suite 2250 Beiievue, WA 98004 tel 14251641 9200 fax t +25 i 637 8200 www,ipcarchuects,corn
JPC ARCHITECTS
f. All damaged and/or stained ceiling surfaces shall be patched, repaired or
replaced to "like new" condition. Repair damage to ceiling grid at areas of wall
removal.
Training Rooms
a. Provide 14' high free standing walls. Structural bracing of walls will be required
for seismic loads. Walls to support TJI's across top to support new suspended
ceiling grid and light fixtures.
b. Power in ceiling for NV equipment. Include electrical ceiling mounted projection
screen
c. Lighting to be standard 2x4 18 cell parabolic. Provide wall washer fixtures at one
wall.
d. Provide accent wall at one end - - - - - . White
boards to be used instead of wall talkers.
e. Electrical power and data to be provided to service 50 seats, according to space
plan.
f. Install new operable partition, Modernfold or equal. Partition will require
structural support which may include new steel columns supporting a steel beam
overhead.
Conference Rooms
a. Each Conference Room shall have new full height wood door, metal frame and
Full height 24" relite or 48" residential window style relite.
b. Provide 3 outlets and 2 data/ 1 voice outlet.
c. Partitions to be 10' AFF. Structural bracing of walls will be required for seismic
loads. Walls to support TJI's across top to support new suspended ceiling grid
and light fixtures
d. Provide carpet tile and rubber base over access flooring.
e. Provide aluminum mini -blinds for relite.
f. Provide accent wall at one end with wall talkers white board treatment. White
boards to be used instead of wall talkers.
601 108th Ave NE - Suite, 2250 Bellevue, WA 98004 tel 14251641 9200 fax 14251637 8200 wvov.jpcaich:tects.com
JPC ARCHITECTS
Huddle Rooms
a. Each Huddle Room shall have new full height wood door, metal frame and 48"
residential window style relite.
b. Provide 2 outlets and 2 data/ 1 voice outlet.
c. Partitions to be 8' AFF. Structural bracing of walls will be required for seismic
loads. Ceiling to be open to structure above.
d. Provide cross member over center of ceiling to support suspended pendant
fixture.
e. Provide carpet tile and rubber base over access flooring.
f. Provide aluminum mini -blinds for relite.
End of Work Letter
for
House Values Yakima
Based upon review by House Values of Final Space Plans dated October 12, 2005
601 108th Ave NE - Suite 2250 Be?itvue, WA 98004 tel 1425] 641 9200 fax 14251637 8200 wwvw,ipcarchitecta.can
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JPC ARCHITECTS
601108th Ave NE • Suite 2250
Bellevue, WA 98009
tel [4251641.9200, fez 1425)637.8200
House Values
JPC PROJ MGR: Edward Hanbicki
JPC PROJ NO.: 05-100-0661
REVISION: Space Pion 10/17/05
BUILDING:
02W* .PCARCNT*C1S PUC
JPC ARCHITECTS
601108th Ave NE - Suite 2250
Bellevue, WA 98004
tel 14251641-9200, fax 14251637-8200
'\\N
House Values - Phase 2
JPC PROJ MGR: Edward Hanbicki
JPC PROJ NO.: 05-100-0661
REVISION: Space Plan 10/17/05
BUILDING:
0 2005. JPC ARCHITECTS PU.0
EXHIBIT E
COMMERCIAL & INVESTMENT
REAL ESTATE PURCHASE & SALE AGREEMENT
Date: , 200_
The undersigned Buyer, , and/or assigns, agrees to buy and
, agrees to sell, on the date first written above (the "Date of Execution") on
the following terms, the commercial real estate and all improvements thereon (collectively, the
"Property") commonly known as in the City of ,
Washington, legally described on the attached Exhibit A.
1. PURCHASE PRICE. The total Purchase Price is TWO MILLION THIRTY NINE
THOUSAND FOUR HUNDRED DOLLARS ($2,039,400.00) (the "Purchase Price"), including the
"Earnest Money" (defined in Section 2 herein), payable as follows: all cash at "Closing" (as defined
in Section 6 herein).
2. EARNEST MONEY.
2.1 Buyer agrees to deliver as earnest money (the "Earnest Money") an amount equal to
ten percent (1O%) of the Purchase Price, initially in the form of a promissory note (the "Earnest
Money Note"), which Earnest Money Note shall be delivered to the Closing Agent on the Date of
Execution. Buyer shall deliver to the Closing Agent the Earnest Money in cash to replace the Earnest
Money Note no later than five (5) days after the date of removal of the inspection contingency
pursuant to the terms of Section 4 below.
2.2 The Earnest Money shall be held by the Closing Agent in a separate interest bearing
trust account.
2.3 The interest on the Earnest Money shall be credited at Closing to Buyer, whose Social
Security or taxpayer ID Number is . If this sale fails to close, whoever is entitled to
the Earnest Money is entitled to the accrued interest thereon.
2.4 Buyer agrees to pay financing and purchase costs incurred by Buyer. Seller agrees to
pay purchase/sale costs incurred by Seller. Unless otherwise provided in this Commercial &
Investment Real Estate Purchase & Sale Agreement (the "Agreement"), the Earnest Money shall be
applicable to the Purchase Price and shall be non-refundable except where the conditions to Buyer's
obligation under this Agreement, as set forth in Section 4.1 herein are not satisfied, as further
described herein.
INITIALS: Buyer Date Seller Date
EXHIBIT E
BA052910.035
Buyer Date Seller Date
Page 1
3. EXHIBITS, SCHEDULES AND ADDENDA. The following Exhibits, Schedules and
Addenda are made a part of this Agreement:
3.1 Exhibit A - Legal Description
3.2 Exhibit B - Earnest Money Note.
4. INSPECTION CONTINGENCY.
4.1 Contingency; Timing. This Agreement shall terminate, and Buyer shall receive a
refund of the Earnest Money, unless Buyer gives written notice to Seller on or before sixty (60) days
after the Date of Execution, (the "Initial Contingency Period") stating that Buyer is satisfied, in
Buyer's sole discretion, with the structural condition, environmental condition and other aspects of
the Property (a "Contingency Waiver Notice"). If such notice is timely given, the inspection
contingency stated in this Section 4 shall be deemed to be satisfied. If Buyer fails to deliver a
Contingency Waiver notice within said sixty (60) days, this Agreement and Buyer's option to purchase
set forth in the Lease between the parties shall be deemed terminated and Buyer shall pay the
cancellation fee for the title report referred to in Section 5.1 below.
4.2 Books, Records, Leases, Agreements. Seller shall make available for inspection by
Buyer and its agents as soon as possible, but no later than ten (10) days after mutual acceptance of this
Agreement, all documents available to Seller relating to the ownership, operation, renovation or
development of the Property.
4.3 Access. Seller shall permit Buyer and its agents, at Buyer's sole expense and risk, to
enter the Property at reasonable times, to conduct inspections concerning the Property and
improvements, including without limitation the structural condition of improvements, Hazardous
Substances (Phase I and Phase H audits if elected by Buyer), pest infestation and soil conditions.
Buyer shall schedule any entry onto the Property with Seller in advance. Buyer shall restore the
Property and improvements to the same condition they were in prior to inspection. Buyer agrees to
indemnify and defend Seller from all liens, costs, claims, and expenses, including attorneys' and
experts' fees, arising from or relating to entry onto or inspection of the Property by Buyer and its
agents. This agreement to indemnify and defend Seller shall survive Closing. Buyer may continue to
enter the Property and interview tenants in accordance with the foregoing terms and conditions after
removal or satisfaction of the inspection contingency only for the purpose of re -sale, leasing or to
satisfy conditions of financing.
5. TITLE INSURANCE.
5.1 Title Report. Seller authorizes Closing Agent, at Seller's expense, to apply for and
deliver to Buyer an ALTA extended coverage owner's policy of title insurance. However, Seller shall
not be obligated to remove any exceptions required to issue Buyer's extended coverage policy and
shall not be obligated to sign any affidavits, personal undertakings or other documents over and above
INITIALS: Buyer Date Seller Date
EXHIBIT E
BA052910.035
Buyer Date Seller Date
Page 2
those required to issue a standard coverage policy and an affidavit confirming the absence of any
activity by Seller that would give rise to any workmen's, materialmen's or other liens. Buyer shall pay
the increased costs associated with that policy, including the excess premium over that charged for a
standard coverage non -ALTA policy, and the cost of any survey required by the title insurer. The title
report shall be issued by a title company acceptable to Buyer. Seller shall not be obligated to pay for
the cost of any survey required to obtain any extended coverage endorsement to the owner's policy of
title insurance.
5.2 Permitted Exceptions. Buyer shall notify Seller of any objectionable matters in the
title commitment or any supplemental report within fifteen (15) days after receipt of such
commitment or supplement. This Agreement shall terminate, and Buyer shall receive a refund of the
Earnest Money, less any costs advanced or committed for Buyer, unless (a) within ten (10) days of
Buyer's notice of such objections, Seller agrees to remove all objectionable issues or encumbrances or
items listed in the title report, or (b) within fifteen (15) days after Buyer's notice of such objections,
Buyer notifies Seller in writing that it waives any objections which Seller does not agree to remove.
The Closing Date shall be extended to the extent necessary to accommodate the stated time for these
notices. Those provisions not objected to or for which Buyer waived its objections shall be referred to
collectively as the "Permitted Exceptions." The title policy shall contain no exceptions other than the
General Exclusions and Exceptions common to such form of policy and the Permitted Exceptions.
6. CLOSING OF SALE. This sale shall be closed (the "Closing") on or before the ninetieth
(90`h) day after the Date of Execution ("Closing Date") by the title company ("Closing Agent"),
except as otherwise specifically described herein. Buyer and Seller will, immediately on demand,
deposit with Closing Agent all instruments and monies required to complete the purchase in
accordance with the terms of this Agreement. "Closing" shall be deemed to have occurred when all
documents are recorded and the sale proceeds are available to Seller. Time is of the essence in the
performance of this Agreement.
7. CLOSING COSTS.
7.1 Payment; Proration. Seller shall pay the excise tax and premium for the owner's title
policy, to the extent of the price of owners' standard coverage. Seller and Buyer shall each pay one-
half of the escrow fees. Except to the extent HouseValues, Inc. is responsible for such items under
the Lease between Seller and HouseValues, Inc. (the "Lease"), real and personal property taxes and
assessments payable in the year of Closing, rents on any existing tenancies, interest, mortgage
reserves, utilities, and other operating expenses shall be pro -rated as of Closing.
7.2 Unpaid Utility Charges. Buyer and Seller waive the right to have the Closing Agent
disburse Closing funds necessary to satisfy unpaid utility charges affecting the Property pursuant to
RCW 60.80.
8. POST -CLOSING ADJUSTMENTS, COLLECTIONS, AND PAYMENTS. After Closing,
Buyer and Seller shall promptly reconcile the actual amount of revenues or liabilities upon receipt or
INITIALS: Buyer Date Seller Date
Buyer Date Seller Date
EXHIBIT E Page 3
BA052910.035
payment thereof to the extent those items were prorated or credited at Closing based upon estimates.
Any bills or invoices received by Buyer after Closing which relate to services rendered or goods
delivered to the Seller or the Property prior to Closing shall be paid by Seller upon presentation of
such bill or invoice. At Buyer's option, Buyer may pay such bill or invoice and be immediately
reimbursed the amount paid, plus interest at the rate of 12% per annum beginning fifteen (15) days
from the date of Buyer' s written demand to Seller for reimbursement, until such reimbursement is
made. Rents collected from each tenant after Closing shall be applied first to rentals due most
recently from such tenant for the period after Closing, and the balance shall be applied for the benefit
of Seller for delinquent rentals owed for a period prior to Closing. The amounts applied for the
benefit of Seller shall be turned over by Buyer to Seller promptly after receipt.
9. OPERATIONS PRIOR TO CLOSING. Prior to Closing, Seller shall continue to maintain
the Property as required by the Lease with HouseValues, Inc.
10. POSSESSION. Buyer shall be entitled to exclusive possession on Closing.
11. SELLER'S REPRESENTATIONS AND WARRANTIES.
11.1 Seller represents and warrants to Buyer that each of the following is true as of the
Date of Execution hereof and shall be true as of Closing: (a) Seller is authorized to enter into this
Agreement, to sell the Property, and to perform its obligations under the Agreement; (b) to the best of
Seller's knowledge, all books, records, leases, agreements and other items delivered to Buyer pursuant
to this Agreement are accurate and complete; (c) Seller has paid or caused to be paid (except to the
extent prorated at Closing or to the extent HouseValues, Inc. is responsible for such items under the
Lease) all local, state and federal taxes (other than real and personal property taxes and assessments
described in Section 7 above) attributable to the period prior to Closing which, if not paid, could
constitute a lien on Property (including any personal property), or for which Buyer may be held liable
after Closing; (d) there are no pending or, to the best of Seller's knowledge, threatened notices of
violation of building, zoning, or land use codes, or of any special assessments or condemnation
proceeding, affecting the Property; (e) Seller is not aware of any concealed material defects in the
Property; (g) except as otherwise specifically provided or qualified in this Section 11 and Section 12
below, all of the representations, warranties and covenants of Seller contained in this Agreement,
including those set forth in this Section 11 and Section 12 below, are true and correct as of the Date of
Execution hereof and as of the Closing Date, and will survive for a period of three (3) years after
Closing.
11.2 Seller represents and warrants to Buyer that, to the best of Seller's knowledge there is
no pending or threatened litigation against Seller that arises out of Seller's ownership of the Property
and which would adversely affect (i) the Property or Buyer' s ownership thereof after Closing, or (ii)
the ability of Seller to perform its obligations under this Agreement.
11.3 Seller represents and warrants to Buyer that, to the best of Seller's knowledge: (a)
there are no covenants, conditions, restrictions, or contractual obligations of Seller which will
INITIALS: Buyer Date Seller Date
EXHIBIT E
BA052910.035
Buyer Date Seller Date
Page 4
adversely affect Buyer' s ownership of the Property after Closing or prevent Seller from performing its
obligations under the Agreement, except as disclosed in the preliminary commitment for title
insurance or as otherwise disclosed to Buyer in writing prior to the end of the Initial Contingency
Period; (b) there is no pending or threatened condemnation or similar proceedings affecting the
Property, except as otherwise disclosed in the preliminary commitment for title insurance as or
otherwise disclosed to Buyer in writing prior to Closing, the Property is not within the boundaries of
any planned or authorized local improvement district; (c) to the best of Seller's knowledge, the
Property complies with all applicable laws, regulations, and zoning codes and with all existing
covenants, conditions restrictions and easements; and (d) Seller has all certificates of occupancy,
permits, and other governmental consents necessary to own and operate the Property for its current
use.
11.4 Seller makes no representations or warranties regarding the Property other than those
specified in this Agreement, and Buyer shall otherwise rely on its own inspections and investigations,
including without limitation any investigations and inspections undertaken during the period of time
HouseValues, Inc. leased the Property from Seller. Except as otherwise described in this Section 11
and Section 12 below, Buyer takes the property "AS IS".
11.5 Notwithstanding anything herein to the contrary, Seller shall not be responsible for
any representation contained herein to the extent Buyer had, at the time the representation was made,
information that the representation was inaccurate and all representations made herein by Seller shall
be automatically qualified to incorporate the information known to Buyer at the time the
representation was made by Seller.
12. HAZARDOUS SUBSTANCES.
12.1 Except as disclosed to Buyer prior to the satisfaction or waiver of the inspection
contingency stated in Section 4 above (including disclosure arising out of Buyer's inspections,
investigations, and tests related to the Property), Seller represents and warrants to Buyer that, during
the period of Seller's ownership of the Property: (i) to the best of Seller's knowledge, there have been
no Hazardous Substances brought on to, or placed under, the Property (that have not already been
removed) in a manner or quantity that presently violates any "Environmental Law" (as defined
below); (ii) no tanks used for the storage of any Hazardous Substance above or below ground were
placed on the Property; (iii) Seller has no actual knowledge of the release or presence of any
Hazardous Substance on, in, from or onto the Property in violation of any applicable Environmental
Law; (iv) Seller has not generated, manufactured, refined, stored, disposed of or released any
Hazardous Substance on the Property in violation of any applicable Environmental Law; and (v) there
is, or has been, no pending or, to the best of Seller's knowledge, threatened investigation or remedial
action by any governmental agency regarding the release of Hazardous Substances or the violation of
Environmental Law at the Property. As used herein, the term "Hazardous Substances" shall mean any
substance or material defined or regulated as a hazardous substance, hazardous waste, toxic substance
under any federal, state, or local law, regulation, or ordinance governing any substance that could
cause actual or suspected harm to human health or the environment ("Environmental Law"). The
INITIALS: Buyer Date Seller Date
Buyer Date Seller Date
EXHIBIT E Page 5
BA052910.035
term "Hazardous Substances" specifically includes, but is not limited to, petroleum, petroleum by-
products, and asbestos. Except as disclosed to Buyer prior to the satisfaction or waiver of the
inspection contingency stated in Section 4 above (including disclosure arising out of Buyer's
inspections, investigations, and tests related to the Property), Seller represents and warrants to Buyer
that, to Seller's knowledge: (i) there are no Hazardous Substances currently located in, on, or under
the Property in a manner or quantity that presently violates any Environmental Law; (ii) no tanks used
for the storage of any Hazardous Substance above or below ground are or were placed on the
Property; and (iii) there has been no release or presence of any Hazardous Substance on, in, from or
onto the Property in violation of any applicable Environmental Law.
13. INDEMNIFICATION. Seller agrees to defend (with counsel reasonably approved by Buyer),
fully indemnify and hold entirely free and harmless Buyer from and against all claims, judgments
damages, penalties, fines, costs, liabilities or losses (including, without limitation, sums paid in
settlement of claims, attorneys' fees, consultant fees and expert fees) that are imposed on, paid by or
asserted against Buyer or its successors or assigns, by reason or on account of, or in connection with,
or arising out of the violation of any representation or warranty contained herein, but indemnifying
only to the extent Buyer obtains a final nonappealable judgment from a court of competent
jurisdiction, or a determination of liability from a governmental authority with proper jurisdiction.
14. BUYER'S REMEDIES FOR BREACH OF REPRESENTATION OR WARRANTY PRIOR
TO CLOSING. If, prior to Closing, Buyer discovers a material breach of a warranty or
representation of Seller, Buyer shall notify Seller of the claimed material breach. Buyer' s notice
shall include a reasonably detailed statement of the claimed material breach. Seller shall have ten
(10) days after delivery of Buyer' s notice within which to cure the claimed material breach; Seller
shall have no obligation to cure or attempt to cure the claimed material breach, and Seller may,
without any obligation or liability to Buyer, cease pursuing any attempted cure at any time. If Seller
fails to cure the claimed material breach within such ten (10) day period, Buyer shall have the right
to terminate this Agreement by delivering a notice of termination to Seller within fifteen (15) days
after the end of such ten (10) day period, in which event the Earnest Money shall be returned to
Buyer as Buyer's sole and exclusive remedy. In the event that Buyer does not so terminate this
Agreement, Buyer shall: (a) be deemed to have elected to keep this Agreement in effect; (b) be
deemed not to have relied on the warranty or representation claimed to have been materially
breached; and (c) be deemed to have waived any and all right to seek damages of any type (whether
actual, general, special, consequential or punitive damages) or other equitable relief based on or
arising from, out of or in connection with the warranty or representation claimed to have been
materially breached.
15. RELA'1'hD RIGHTS AND INTERESTS. This sale includes all right, title and interest of
Seller to the following intangible property now or hereafter existing with respect to the Property
including without limitation: all rights-of-way, rights of ingress or egress or other interests in, on, or
to, any land, highway, street, road, or avenue, open or proposed, in, on, or across, in front of, abutting
or adjoining the Property; all rights to utilities serving the Property; all drawings, plans,
specifications and other architectural or engineering work product; all governmental permits,
INITIALS: Buyer Date Seller Date
Buyer Date Seller Date
EXHIBIT E
BA052910.035
Page 6
certificates, licenses, authorizations and approvals; all utility, security and other deposits and reserve
accounts made as security for the fulfillment of any of Seller's obligations; and guaranties,
warranties or other assurances of performance received by the Seller that relate to the Property.
16. CONDEMNATION AND CASUALTY. Buyer may terminate this Agreement and obtain a
refund of the Earnest Money, less any costs advanced or committed for Buyer, if improvements on
the Property are destroyed or materially damaged by casualty before Closing, or if condemnation
proceedings are commenced against all or a portion of the Property before Closing.
17. FIRPTA - TAX WITHHOLDING AT CLOSING. Closing Agent is instructed to prepare a
certification (CBA or NWMLS Form 22E, or equivalent) that Seller is not a "foreign person" within
the meaning of the Foreign Investment in Real Property Tax Act. Seller agrees to sign this
certification. If Seller is a foreign person, and this transaction is not otherwise exempt from
FIRPTA, Closing Agent is instructed to withhold and pay the required amount to the Internal
Revenue Service.
18. CONVEYANCE. Title shall be conveyed by a Statutory Warranty Deed, subject only to the
Permitted Exceptions.
19. ACCESS: Subject to Section 4.3 above, Buyer shall have a right of entry to immediately
begin due diligence and any consulting work buyer requires, after mutual execution hereof. Buyer
will provide Seller with notice of all consultants that will enter and perform work upon the Property.
20. COMPUTATION OF TIME. Unless otherwise specified in this Agreement, any period of
time in this Agreement shall begin the day after the event starting the period and shall expire at 5:00
p.m. Pacific time of the last calendar day of the specified period of time, unless the last day is a
Saturday, Sunday or legal holiday as defined in RCW 1.16.050, in which case the specified period of
time shall expire on the next day that is not a Saturday, Sunday or legal holiday. Any specified
period of five (5) days or less shall not include Saturdays, Sundays or legal holidays.
21. ASSIGNMENT. Buyer may assign this Agreement, or Buyer's rights hereunder, without
Seller's prior written consent; provided, however, no such assignment shall release or relieve Buyer
of any obligations under this Agreement.
22. DEFAULT AND ATTORNEY'S PEE.
22.1 In the event that the contingency set forth in Section 4.1 is removed by Buyer, and in
the event Buyer then fails, without legal excuse, to complete the purchase of the Property pursuant to
the terms hereof, then the Earnest Money shall be kept by Seller as liquidated damages as the sole and
exclusive remedy available to Seller for such failure.
22.2 If Buyer or Seller institutes suit concerning the terms of this Agreement, the
substantially prevailing party is entitled to receive its reasonable attorneys' fees and expenses from the
INITIALS: Buyer Date Seller Date
EXHIBIT E
BA052910.035
Buyer Date Seller Date
Page 7
substantially non -prevailing party. In the event of trial, the amount of the attorney's fee shall be fixed
by the court. The venue of any suit shall be the county in which the Property is located, and this
Agreement shall be governed by the laws of the state of Washington.
23. MISCELLANEOUS PROVISIONS.
23.1 Complete Agreement. The Agreement and any addenda and exhibits to it state the
entire understanding of Buyer and Seller regarding the sale of the Property. There are no verbal or
written agreements which modify or affect the Agreement.
23.2 No Merger. The terms of the Agreement shall not merge in the deed or other
conveyance instrument transferring the Property to Buyer at Closing. The terms of this Agreement
shall survive Closing.
23.3 Counterpart Signatures. The Agreement may be signed in counterpart, each signed
counterpart shall be deemed an original, and all counterparts together shall constitute one and the
same agreement.
23.4 Facsimile Transmission. Facsimile transmission of any signed original document, and
retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At
the request of either party, or the Closing Agent, the parties will confirm facsimile transmitted
signatures by signing an original document.
24. INFORMATION TRANSFER. In the event this Agreement is terminated and the purchase
of the Property is not completed, Buyer agrees to deliver to Seller, within ten (10) days of Seller's
written request, copies of all materials received by Buyer from Seller or developed or acquired by
Buyer relating to the condition or use of the Property and acquired by Buyer during its inspections
authorized in this Agreement.
Section 1031 Like -Kind Exchange. If either Buyer or Seller intends for this transaction to be part of
a Section 1031 like -kind exchange, then the other party agrees to cooperate in the completion of the
like -kind exchange so long as the cooperating party incurs no additional liability in doing so, and so
long as the expenses, including attorneys fees and costs, incurred by the cooperating party that are
related only to the exchange are paid or reimbursed to the cooperating party at or prior to the Closing
Date.
CHINOOK BUSINESS PARK, L.L.C.
By:
By:
Gary D. Lukehart, Member
INITIALS: Buyer Date Seller Date
EXHIBIT E
BA052910.035
Buyer Date Seller Date
Page 8
Its:
INITIALS: Buyer Date Seller Date
EXHIBIT E
BA052910.035
Buyer Date Seller Date
Page 9
10/21/2005 19:33 FAX 509 453 6880 VELIKANJE LAW
EXHB02
PROPOSED DESCRIPTION BABY JOGGER PARCEL (REVISED SEPTEMBER 22, 1999)
That portion of the hereinafter described Parcel "A" lying easterly and southerly of the following
described line;
Beginning at the northwest corner of Lot 1, Block 2, MOYER'S ADDITION, according to the Plat
thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington;
Thence North 00-25'39" West 360.04 feet; parallel with the west Zine of said Lot 1;
Thence North 89-035'52" East 304.12 feet to the southwesterly right of way of State Highway
No. 82 and the terminus of said line.
PARCEL "A"
The south 7.50 acres of the Northeast Quarter, of the Southwest Quarter, of the Southwest
Quarter. and the north 16.50 feet of the Southeast Quarter, of the Southwest Quarter, of the
Southwest Quarter, and the portion of the North Half, of the Southeast Quarter, of the
Southwest Quarter lying westerly of the east line of the Plat of Moyer's Addition, according to
the Plat thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County,
Washington, all in Section 7, Township 13 North, Range 19, East, W.M.
EXCEPTING therefrom the following:
1. That part thereof Tying west of the east line of North 4'" Street.
2. Right of way for State Highway No. 82.
3. Beginning at the northwest corner of Lot 1, Block 1, Moyer's Addition, according to
the plat thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County,
Washington;
Thence east along the north line of said Plat of Moyer's Addition 300.00 feet to the
northeast comer of Lot 6, Block 1, of said Plat;
Thence north 146.50 feet;
Thence west 300.00 feet to the east line of North 4th Street;
Thence south 146.50 feet to the point of beginning_
4. Any portion which may lie south of the north line of said Moyer's Addition.
5. Any portion which may lie north of a line described as follows:
Beginning at a point on the east line of North 4' Street as shown on the Plat of Park
Addition to North Yakima, now Yakima, according to the official plat thereof recorded
in Volume "A" of Plats, Page 13, records of Yakima County, Washington, 50.00 feet
east and 165.00 feet south of the southeast corner of Lot 10 of said plat;
Thence east 650.00 feet to the terminus of said line.
Situate in Yakima County, Washington.
11)9-95114,3RO AUguat 12, 1029
EXHIBIT B
EARNEST MONEY NOTE
$ , Washington
, 20_
FOR VALUE RECEIVED, the undersigned promises to pay in lawful money of the
United States to the order of FIRST AMERICAN TITLE INSURANCE COMPANY, the amount
of TWO HUNDRED AND THREE THOUSAND NINE HUNDRED AND FORTY DOLLARS
($203,940.00) to be held as Earnest Money in accordance with Section 2 of the Agreement
defined below, for the account of CHINOOK BUSINESS PARK, L.L.C., a Washington limited
liability company ("Payee"). This note shall be paid as follows:
Upon demand, after the expiration of the Initial Contingency
Period, as that term is defined in Section 4, and otherwise pursuant to the
provisions of, that certain Commercial Investment Real Estate Purchase
and Sale Agreement dated , 20_ ("Agreement")
between the undersigned as buyer and Payee as seller with respect to
certain property located in Yakima, Washington, unless (i) Buyer has
terminated the Agreement on or before the expiration of the Initial
Contingency Period or (ii) the transaction contemplated under the
Agreement has closed and Buyer has paid Payee the full purchase price as
set forth in the Agreement.
This note shall be construed according to the laws of the state of Washington.
a
EXHIBIT B
BA052910.035
EXHIBIT F
LANDLORD MINIMUM REQUIRED INSURANCE
(attached)
EXHIBIT F
BA052910.035
ACORD,., ` `E IID'EN+GE OF :PROPERTY
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS
RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY
PRODUCER PHONE
(A/c,No,Ext): (509)965-2090
Conover Insurance, Inc.(Y)
125 N. 50th Ave.
P.O. Box 10088
Yakima, WA 98909-1088
coDE: 06-0331 SUB CODE:
AGENCY 00048092
CUSTOMER ID #:
INSURED
Chinook Business Park, LLC
1901 North 4th Street
Yakima, WA 98901
DATE (MM/DD/YY)
�%ISU.R N"CE 10/20/2005
BEEN ISSUED, IS IN FORCE, AND CONVEYS ALL THE
COMPANY
Trinity Universal Ins. Cos.
1330 N. Washington, Suite 3100
Spokane, WA 99201-2443
LOAN NUMBER POLICY NUMBER
CPA9214726
EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL
11/02/2004 11/02/2005 TERMINATED IF CHECKED
THIS REPLACES PRIOR EVIDENCE DATED:
PROPE 2TY tNFORMATIQN
LOCATION/DESCRIPTI N
1 Loc 00007 Bldg 00001 1700 N. 6th Street Yakima, WA 98901
COVERAGE;IN,f.Ot2MAT#ON: , . _ '
COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
1 Building, Replacement Cost, Special Form 2,292,000 1000
REMARKS (Including Speciat Conditions}
CANCELLATION
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES
POLICY BE TERMINATED, THE COMPANY WILL GIVE THE ADDITIONAL
WRITTEN NOTICE, AND WILL SEND NOTIFICATION OF ANY CHANGES
INTEREST, IN ACCORDANCE WITH THE POLICY PROVISIONS OR
IN EFFECT FOR -EACH POLICY PERIOD SHOULD THE
INTEREST IDENTIFIED BELOW 10 DAYS
TO THE POLICY THAT WOULD AFFECT THAT
AS REQUIRED BY LAW
ADDITi0NAi'-1NTEREST-,"
NAME AND ADDRESS
Same As Named Insured
ACOFtt),27'{8193j--"s :., ,. .. ' -
-
MORTGAGEE ADDITIONAL INSURED
LOSS PAYEE
LOAN #
AUTHORIZED REPRESENTATIVE //
`-/
David LaRiviere/TRACIS
,. , OACORD CORPORATION 1993
EXHIBIT B
Description of Real Property
Subordination, Nondisturbance and Attornment Agreement
[BA053120 033] Page 7
I
EkP
PRIMARY PREMISES
That portion of the hereinafter described Parcel "A" lying easterly and southerly of the following
described line;
Beginning at the northwest comer of Lot 1, Block 2, MOYER'S ADDITION, according to the Plat
thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington;
Thence North 00°25'39" West 360.04 feet; parallel with the west line of said Lot 1;
Thence North 89°35'52" East 304.12 feet to the southwesterly right of way of State Highway No.
82 and the terminus of said line.
PARCEL "A"
The south 7.50 acres of the Northeast Quarter, of the Southwest Quarter, of the Southwest
Quarter, and the north 16.50 feet of the Southeast Quarter, of the Southwest Quarter, of the
Southwest Quarter, and the portion of the North Half, of the Southeast Quarter, of the Southwest
Quarter lying westerly of the east line of the Plat of Moyer's Addition, according to the Plat thereof
recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington, all in Section
7, Township 13 North, Range 19, East, W.M.
EXCEPTING therefrom the following:
1. That part thereof lying west of the east line of North 4th Street.
2. Right of way for State Highway No. 82.
3. Beginning at the northwest corner of Lot 1, Block 1, Moyer's Addition, according to the
plat thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County,
Washington;
Thence east along the north line of said Plat of Moyer's Addition 300.00 feet to the
northeast corner of Lot 6, Block 1, of said Plat;
Thence north 146.50 feet;
Thence west 300.00 feet to the east line of North 4th Street;
Thence south 146.50 feet to the point of beginning.
4. Any portion which may fie south of the north line of said Moyer's Addition.
5. Any portion which may lie north of a line described as follows:
Beginning at a point on the east line of North 4th Street as shown on the Plat of Park
Addition to North Yakima, now Yakima, according to the official plat thereof recorded
in Volume "A" of Plats, Page 13, records of Yakima County, Washington, 50.00 feet east
and 165.00 feet south of the southeast corner of Lot 10 of said plat;
Thence east 650.00 feet to the terminus of said line.
Situate in Yakima County, Washington.
LAHIBIT,
LD9-95114.3RD
August 12. 1999
EXHIBIT B
EXHIBIT B
B
Supplemental Lot 1.
That portion of the Southwest Quarter of Section 7, Township 13 North, Range 19 East,
W.M. described as follows:
Beginning at the northwest comer of Lot 1, Block 1, Moyer's Addition, according to the
Plat thereof recorded in Volume "B" of Plats, page 73, records of Yakima County,
Washington.
Thence East along the north line of said Plat 300 feet;
Thence North 146.5 feet;
Thence West 300 feet;
Thence South 146.5 feet to the Point of Beginning.
Except the West 173.83 feet and except right of way for City streets.
And. Lot 6, Block 1 of said plat of Moyer's Addition. Except right of way for City
streets.
And the North half of Lots 1,2,3,4, and 5, Block 1 of said plat of Moyer's Addition.
Except the South 1.0 feet of said North half of Lots 3,4, and 5.
•
EXHIBIT B
Supplemental Lot 2
DESCRIPTION PARCEL 191307-33024
That portion of the hereinafter described Parcel "A" lying westerly and northerly of the following
described line;
Beginning at the northwest corner of Lot 1, Block 2, MOYER'S ADDITION, according to the Plat
thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington;
Thence North 00`25'39" West 360.04 feet; parallel with the west line of said Lot 1;
Thence North 89-035'52" East 304.12 feet to the southwesterly right of way of State Highway
No. 82 and the terminus of said line.
PARCEL "A"
The south 7.50 acres of the Northeast Quarter, of the Southwest Quarter, of the Southwest
Quarter, and the north 16.50 feet of the Southeast Quarter, of the Southwest Quarter, of the
Southwest Quarter, and the portion of the North Half, of the Southeast Quarter, of the
Southwest Quarter lying westerly of the northerly extension of the east line of the Plat of
Moyer's Addition, according to the Plat thereof recorded in Volume "B" of Plats, Page 73,
records of Yakima County, Washington, all in Section 7, Township 13 North, Range 19, East,
W.M.
EXCEPTING therefrom the following:
1. That part thereof Tying west of the east line of North 4th Street.
2. Right of way for State Highway No. 82.
3. Beginning at the northwest corner of Lot 1, Block 1, Moyer's Addition, according
to the plat thereof recorded in Volume "B" of Plats, Page 73, records of Yakima
County, Washington;
Thence east along the north line of said Plat of Moyer's Addition 300.00 feet to
the northeast corner of Lot 6, Block 1, of said Plat;
Thence north 146.50 feet;
Thence west 300.00 feet to the east line of North 4th Street;
Thence south 146.50 feet to the point of beginning.
4. Any portion which may lie south of the north line of said Moyer's Addition.
5. Any portion which may Iie north of a line described as follows:
Beginning at a point on the east line of North 4th Street as shown on the Plat of
Park Addition to North Yakima, now Yakima, according to the official plat thereof
recorded in Volume "A" of Plats, Page 13, records of Yakima County,
Washington, 50.00 feet east and 65.00 feet south of the southeast corner of Lot
10 of said plat;
Thence east 650.00 feet to the terminus of said line.
6. That portion conveyed to the City of Yakima for right of way purposes as
recorded under Auditor's File Number 7141676.
95114.11 th
EXHIBIT 6
7. That portion of the Southwest Quarter of the Southwest Quarter of Section 7
Township 13 North, Range 19 East, W.M., described as follows:
Commencing at the northwest corner of Lot 1, Block 2, MOYER'S ADDITION,
according to the Plat thereof recorded in Volume "B" of Plats, Page 73, records of
Yakima County, Washington.
Thence North 00-025'39" West along the easterly right of way of Fifth Street
238.56 feet;
Thence North 90`000'00" West 50.00 feet to the Point of Beginning;
Thence North 00-025'39" West 121.13 feet;
Thence North 89-035'52" West 297.89 feet to the east right of way of Fourth
Street;
Thence South 00`005'33" East 143.15 feet to the North right of way of "S" Street;
Thence South 45`012'28" East 28.25 feet;
Thence North 89`040'37" East 253.85 feet;
Thence North 50058'35" East 31.99 feet;
Thence North 00-v25'39" West 22.43 feet to the Point of Beginning.
Situate in Yakima County, Washington.
And except any portion thereof lying southerly of the north line of the following described parcel
and its easterly extension:
That portion of the Southwest Quarter of the Southwest Quarter of Section 7, Township 13
North, Range 19 East, W.M. described as follows:
Commencing at the northwest corner of Lot 1, Block 2, MOYER'S ADDITION, according to the
Plat thereof recorded in Volume "B" of Plats, Page 73, records of Yakima County, Washington;
Thence North 00`025'39" West along the easterly right of way of Fifth Street 238.56 feet;
Thence North 90-000'00" West 50.00 feet to the Point of Beginning;
Thence North 00'025'39" West 121.13 feet;
Thence North 89`035'52" West 297.89 feet to the east right of way of Fourth Street;
Thence South 00`005'33" East 143.15 feet to the North right of way of "S" Street;
Thence South 4512'28" East 28.25 feet;
Thence North 89-040'37" East 253.85 feet;
Thence North 50-058'35" East 31.99 feet;
Thence North 00`025'39" West 22.43 feet to the Point of Beginning.
Situate in the City of Yakima, Yakima County, Washington.
95114.11th
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PHASE 1 - ROOF 1 - 377 WORK51AT O S
PHASE 2 - FLOOR 1 - 155 WORKSTATIONS
(SUBTOTAL MOOR 1 - 521 MORKSTATONS)
PHASE 1 - NEiZANWC 131 WORKSTAPONS
TOTAL PHASE I AWS 2 555 WORKSTATIONS
JPC ARCHITECTS
601 108th Ave NE - Suite 2250
Bellevue, WA 98004
tel [4251641-9200, fax [4251637-8200
House Values
JPC PROJ MGR: Edward Hanbicki
JPC PROJ NO. 05-100-0661
REVISION: Space Plan 10/17/05
BUILDING:
® 2005, JPC ARCHITECTS PLLC
BL'SLNESS OF TNF CITY COUNCIL
YAKINA, WASHINGTON
AGENDA STATEMENT
Item No. 4/
For Meeting Of: November 22. 2005
I'11 M TITLE: Consideration of a Resolution authorizing the City Manager to execute a
Subordination, Non -disturbance and Attomment Agreement with
HouseValues, Inc., and Chinook Business Park, LT C covering the
premises located at 1700 North 6th Street, Yakima, Washington.
SUBfIITTED BY: Bill Cook, Director of CED
CONTACT: Bill Cook, 575-6113
SUMMARY EXPLANATION:
A subordination, non -disturbance and attorninent agreement is a standard document and
procedure for long term leases of commercial buildings when the tenant is making and financing
substantial improvements to the leased building. These agreements serve to protect the
investment of the tenant, and provide stability ensuring that a lien holder on the facility will
honor the team of the lease in the event of a foreclosure and/or change of building ownership.
HouseValues is a new company coming to Yakima from Kirkland. They have agreed to lease
and make tenant improvements to the Baby Jogger building, owned by Chinook Business Park,
LLC and Gary Lukehart. The city is being asked to sign this agreement because the building is
part of the collateral package for Mr. Lukeharts Trail Wagons Section 108 loan that the city
closed in 2003. The city is in a second lien position behind another bank, and the first lien
holder has also agreed to sign the agreement along with Mr. Lukehart.
Execution of this agreement does not adversely affect the city's collateral position, nor does it
preclude the city from pursuing a foreclosure in the event of a default on its Section 108 loan.
Resolution _X.._ Ordinance Contract X Other:
Funding Source: U.S. Department of Housing and Urban Development
City Manager
Approval for Submittal:
STAFF RECOMMENDATION: Staff recommends approval of the resolution.
BOARD RECOMLvFNDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2005-186
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