HomeMy WebLinkAbout07-21-2014 DRAFT
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Council Chambers
110 East Third
July 21, 2014
City Council Members Present by Roll Call: Dick Butner, Jan Schuette, Marilyn Oertle, Jesica Stickles,
and Randy Tendering
Council Members Absent: Chris Raezer and Debora Nelson
City Staff Present: Allen Johnson, Kristin Banfield, Jim Chase, Jim Kelly, Paul Ellis, Bruce Stedman,
Mike Sargent, Maxine Jenft, Eric Scott, Erik Moon, Rory Bolter, Curtis Hirotaka, Deana Dean, and Steve
Peiffle – City Attorney
Also Known to be Present: Mike Hopson, Jacob Kukua, Kirk Boxleitner, and Sarah Arney
Mayor Tolbert called the meeting to order at 7:00 p.m.
APPROVAL OF THE AGENDA
Marilyn Oertle moved to approve the Agenda. Jan Schuette seconded the motion which passed with a
unanimous vote.
INTRODUCTIONS OF SPECIAL GUESTS AND PRESENTATIONS
1. Presentation of Plaque from Transportation Improvement Board: Public Works Director
presented Mayor Tolbert with a plaque for overall leadership and project management on the 67th
Ave Project.
2. 2013 Arlington Police Department Employee of the Year: Public Safety Director Bruce Stedman
presented Officer Mike Sargent with the 2013 Police Department Employee of the Year award.
PROCLAMATIONS
PUBLIC COMMENT
Ron Swirtz requested a TBD hearing to have the alley behind 450 E. Burke paved as that is the only
access to homes in that area. Mayor Tolbert thanked Mr. Swirtz for his comments and will pass the
information along to the Public Works Department.
CONSENT AGENDA
Marilyn Oertle moved and Randy Tendering seconded the motion to approve the Consent Agenda which
was unanimously carried to approve the following Consent Agenda items:
1. Minutes of the July 7 and 14, 2014 Council meetings
2. Accounts Payable: EFT Payments & Claims Checks #82271 through #82388 dated July 8, 2014
through July 21, 2014 in the amount of $624,438.90.
Minutes of the Arlington
Cit Council Meetin
Minutes of the City of Arlington City Council Meeting July 21, 2014
Page 2 of 3
PUBLIC HEARING
NEW BUSINESS
Snohomish Regional Drug & Gang Task Force Interlocal Agreement
Public Safety Director Bruce Stedman requested council approve the Interlocal agreement with the
Snohomish Regional Drug & Gang Task Force (SRDGTF) for 2014-2015. Chief provided additional
information answering last week’s workshop questions.
Jesica Stickles moved and Randy Tendering seconded the motion to approve the Interlocal Agreement
for the Snohomish Regional Drug & Gang Task Force for 2014-15 and authorize the Mayor to sign it. The
motion was approved by a unanimous vote.
Water Treatment Plan Backwash to Wetland
Public Works Director Jim Kelly requested council approve the Backwash to Wetland Project.
Dick Butner moved and Randy Tendering seconded the motion to accept the E&D Excavating bid for the
Backwash to Wetland Project and award the contract to E&D Excavating in the amount of $49,390.80,
pending final review by the City Attorney. The motion was approved by a unanimous vote.
Washington Federal Water Use and Utility Easement Agreement
Jim Kelly requested council approve the water service and utility easement agreement for water service
to properties located in the vicinity of the Burn Road Reservoir.
Dick Butner moved and Randy Tendering seconded the motion to approve the water service and utility
easement agreement with Washington Federal and authorize the Mayor to sign it, pending final review by
the City Attorney. The motion was approved by a unanimous vote.
67th Ave NE Final Phase Change Order #8
Jim Kelly reviewed the proposed final change order #8 on the 67th Ave NE project indicating this will
account for all final project material overruns and underruns. Brief comments and questions followed.
Jan Schuette moved and Randy Tendering seconded the motion to approve Change Order #8 to the 67th
Ave Final Phase construction contract and authorize the Mayor to sign the change order, pending final
review by the City Attorney. The motion was approved by a unanimous vote.
Resolution Adopting Public Defender standards and recap of Wilbur et al. v. Cities of Mount
Vernon and Burlington
Assistant City Administrator Kristin Banfield requested council approve the proposed resolution adopting
public defender standards resulting from the December 4, 2013 ruling in the Wilbur v. Cities of Mount
Vernon and Burlington case.
Jesica Stickles moved and Randy Tendering seconded the motion to approve the proposed resolution
adopting standards for public defender services. The motion was approved by a unanimous vote.
Minutes of the City of Arlington City Council Meeting July 21, 2014
Page 3 of 3
ADMINISTRATOR & STAFF REPORTS
City Administrator Allen Johnson reported on the trip to San Francisco last week for himself, Mayor
Tolbert and Finance Director Jim Chase to meet with Standard Poor in relation to the city’s bond rating.
Jim Chase spoke briefly to the bond rating. Allen then updated council on two personnel issues including
the airport manager position and the recently vacated human resource position. Paul Ellis spoke briefly
to the airport manager candidates.
COUNCIL MEMBER REPORTS and MAYOR’S REPORT
Dick Butner, Jan Schuette, Marilyn Oertle, Jesica Stickles and Randy Tendering gave brief reports.
Mayor Tolbert spoke to the Standard Poor meeting and provided an update on the regional grant for the
Stillaguamish Valley Economic Recovery Project.
EXECUTIVE SESSION
Counsel Peiffle announced there would be no need for an Executive Session.
ADJOURNMENT
With no further business to come before the Council, the meeting was adjourned at 7:42 p.m.
____________________________
Barbara Tolbert, Mayor
DRAFT
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Council Chambers
110 East Third Street
July 28, 2014
Councilmembers Present: Dick Butner, Jan Schuette, Marilyn Oertle, Debora Nelson, Jesica Stickles,
and Randy Tendering
Staff Present: Kristin Banfield, Bruce Stedman, Jim Kelly, Eric Scott, Kris Wallace, Sheri Amundson,
Monica Schlagel, Maxine Jenft, Deana Dean, Roxanne Guenzler, and City Attorney Steve Peiffle.
Council Members Absent: Chris Raezer
Also Known to be Present: Jacob Kukua, Kirk Boxleitner and Sarah Arney
Mayor Tolbert called the meeting to order at 7:00 p.m.
Marilyn Oertle moved to approve the agenda; Randy Tendering seconded the motion, which passed with
a unanimous vote.
WORKSHOP ITEMS ~ NO ACTION WAS TAKEN
Public Art Proposal – Mural on Old Water Treatment Plant
Sarah Arney, representing Arlington Arts Council and Public Works Director Jim Kelly spoke to the
proposed art project by youth at risk. Sarah introduced staff from Denny Youth Center to the council who
spoke to the value of art for the Youth at Risk Program. Proposed is a mural on the public works vacated
water treatment facility on West Avenue bordering the Centennial Trail that would tell the story of
Arlington. Discussion followed with the group answering council questions.
All In Campaign – Crime Prevention League
Public Safety Director Bruce Stedman reviewed by PowerPoint the All In Campaign - Crime Prevention
League. Brief discussion followed with Bruce answering council questions.
Proposed Lease Terms for Police Department South Substation
Bruce Stedman reviewed the proposed lease terms for police to re-establish a substation in Smokey
Point. Bruce answered council questions throughout the discussion.
Ordinance for Tobacco/Smoke Free Parks
Bruce Stedman and Assistant City Administrator discussed the proposed ordinance to adopt
tobacco/smoke free parks. Both Bruce and Kristin answered council questions throughout the discussion.
Public Works Contractor Evaluation Proposal
Public Works Director Jim Kelly and Counsel Peiffle discussed if the city should implement a Contractor
Performance Rating system. Discussion followed with Jim and Steve answering council questions.
Second Quarter 2014 Financial Report
Finance Director Jim Chase reviewed by PowerPoint the second quarter financial report. Discussion
followed with Mr. Chase answering council questions.
Minutes of the Arlington
City Council Workshop
Minutes of the City of Arlington City Council Workshop DRAFT July 28, 2014
Page 2 of 2
Miscellaneous Council Items
None
Public Comment
Jacob Kukua spoke to the proposed ordinance on Smoke Free Parks. He also commented on the dust
created on Highway 9 from DOT chip sealing. Public Works Director stated the chip sealing should be
done within 1 day.
Executive Session
None
Adjournment
The meeting was adjourned at 8:20 p.m.
____________________________
Barbara Tolbert, Mayor
City of Arlington
Council Agenda Bill
Item:
PH #1
Attachment
B
COUNCIL MEETING DATE:
August 4, 2014
SUBJECT:
Public Hearing for Temporary Moratorium Limiting Marijuana Production and
Processing
ATTACHMENTS:
Ordinance for Temporary Moratorium Limiting Marijuana Production and
Processing
DEPARTMENT OF ORIGIN
Community & Economic Development
EXPENDITURES REQUESTED: None
BUDGET CATEGORY: N/A
LEGAL REVIEW:
DESCRIPTION:
Under RCW 36.70A.390, a Public Hearing is required for the Temporary Moratorium
Limiting Marijuana Production and Processing, which was adopted by City Council
on July 7, 2014.
HISTORY:
Earlier this year the Planning Commission, along with the City Council, worked on
an update to our AMC to address the legalization of marijuana under the I-502
Initiative. The AMC which we developed regulates location by zoning and the size of
the facility for use in production and processing. The number of retail establishments
is regulated by the Washington State Liquor Control Board and allows for the
placement of one retail establishment within city limits. It does not, however, regulate
the number of producers and processers in a given area. The City has currently
received business license applications for eight marijuana producers and processers
that are in varying stages of development. The Liquor Control Board has received 47
pre-applications for producers and processers that have listed a location in the City of
Arlington. This is a much greater number of applicants than originally anticipated so
early in the development of an emerging industry.
ALTERNATIVES
None
RECOMMENDED MOTION:
Public Hearing. No action required.
City of Arlington
Council Agenda Bill
Item:
NB #1
Attachment
C
COUNCIL MEETING DATE:
August 4, 2014
SUBJECT:
Public Art Project, Reclaiming Futures in Arlington
ATTACHMENTS:
Proposal and sketch with examples
DEPARTMENT OF ORIGIN
Recreation
EXPENDITURES REQUESTED: -0-
BUDGET CATEGORY: N/A
LEGAL REVIEW:
DESCRIPTION:
A proposed art project by youth at risk, led by coordinator of the Denny Youth
Center PAIR (Promising Artists in Recovery) program, artist mentor Henri Wilson,
and members of the Arlington Arts Council. Proposed is a mural on the public works
vacated water treatment facility on West Avenue bordering the Centennial Trail that
would tell the story of Arlington.
HISTORY:
The proposal has been reviewed and recommended by the Public Art Committee on
July 15, and reviewed at the Parks, Arts and Recreation Commission meeting on July
22.
ALTERNATIVES
Deny proposal.
RECOMMENDED MOTION:
I move to approve the proposed mural on the Public Works vacated water treatment
plant on West Avenue.
Reclaiming Futures in Arlington
Proposed Public Art Project, August 2014
The community of Arlington will be the beneficiary of an art project that evolved
from a public meeting early this year with Arlington police and the downtown
business owners.
They were discussing strategies for preventing graffiti and other vandalism in
Arlington. APD and the county sheriff’s office are contributing to a business crime
prevention manual and graffiti was one of the topics. Participants at the meeting
discussed strategies to connect youth who might be the vandals with artists, before
vandalism sets in and a program at Denney Youth Justice Center, called
Reclaiming Futures, was mentioned.
http://www.reclaimingfutures.org/blog/reclaiming-futures-program-giving-youth-
chance-clean-slate
In the fall of 2011, Snohomish County juvenile court system ran a pilot project
called Promising Artists in Recovery (PAIR), modeled after Reclaiming Futures.
The Reclaiming Futures model unites juvenile courts, probation, adolescent
substance abuse treatment and the community, to reclaim youth. Together, they
work to improve drug and alcohol treatment and connect teens to positive
activities and caring adults.
In a sudden bit of serendipity, some leaders at Denney Youth Justice Center called
a meeting with potential artists and the coordinator of their PAIR program, Henri
Wilson. Turns out Henri and Sarah Arney, president of Arlington Arts Council,
had had conversations about potential art projects for youth in Arlington. Henri
had used some Arlington artists to teacher her classes, and she was aware of
Arlington’s impressive art collection.
Soon after the meeting in Everett, Sarah noticed an old cement block building near
the Centennial Trail and Haller Park. She asked Jim Kelly, Public Works Director
about the city’s plans for that building and if it might host a mural by kids at risk.
He said, “Yes!” The building the cleaned painted within a week.
When the first potential artist mentor became busy planning his wedding, we
started discussion potential artists. I was at an art show and mentioned it to a
friend and former co-worker who had done a series of paintings portraying men
working. I told her about the utility building and the potential art project and
Jillian Mattison said, “I want to do that!”
We met with Henri, who was impressed with Jill’s talent, her social skills, and her
willingness to work within the budget. Henri had already recruited two major
donations of $1,000 each through her supporters and through the Greater Everett
Community Foundation. The project still needs about $2,000 to cover the costs of
transportation for the teens and adults to attend several work parties through the
month of August.
Henri and the team from Denney made a presentation to the Rotary Club of
Arlington, since Kathy Haggerty had a connection with the Rotary Club through
Judge Wisman. They requested funds from Rotary and are waiting for an answer. It
was unknown to all them that the Rotary Club had just invested hugely in
upgrading the Rotary Park, just a block from the Utility Building.
Henri has recruited professional adults to help manage several different groups of
kids at risk, while Jillian sketched out a mural based on research on the history of
Arlington. Since the building is near the river and Haller Park, and since Jillian had
experience portraying men working, we talked about telling the story of Arlington
through portraits of people doing what they have done in Arlington over the past
couple of centuries.
Jillian sketched an Indian woman paddling a riverboat, farmers digging potatoes,
an Indian village and trading center, log trucks and tractors, a milk truck
delivering cans of milk, and a railroad engine. She drew some utility workers in
bucket trucks, and a pilot in an airplane. She also sketched skate boarders and
fishers in the river to portray the importance of recreation in Arlington for the
users of the Centennial Trail, who get a full view of both sides of the mural at West
Avenue and Cox Street, where the trail enters Arlington from the north.
Henri has recruited donations of paint from several sources and she is scheduling
work parties in August – some during the week and some on weekends, to
accommodate different schedules.
Jim Kelly has agreed to cover the cost of coating the finished mural with an anti-
graffiti material.
We do need another $2,000 to pay for lunches, some more supplies and to pay the
professional artist for her month of time.
For more information, contact Sarah Arney, 360-435-3778 or Henri Wilson at 425-
314-2251.
Sketch and Examples of work by
Jillian Mattison
City of Arlington
Council Agenda Bill
Item:
NB #2
Attachment
D
COUNCIL MEETING DATE:
August 4, 2014
SUBJECT:
Proposed Lease for Police Department south substation
ATTACHMENTS:
Proposed Lease
DEPARTMENT OF ORIGIN
Police: Bruce Stedman, 360-403-3601; Community Development: Paul Ellis, 360-403-
4603
EXPENDITURES REQUESTED: $1,142 per month (beginning 1/2015)
BUDGET CATEGORY: General Fund - Police
LEGAL REVIEW:
DESCRIPTION:
Arlington Police wish to reestablish a substation in Smokey Point. Staff has located a
unit in the Smokey Point Shopping Center (3131 Smokey Point Dr, Unit 15). It is an
891 square foot retail unit that faces Smokey Pt. Motor Inn.
The lease is for three years and 5 months (through December 2017). The first five
months is free. Starting in 2015 the rent is $835 per month and increases by 5% each
year through the term. In addition we are responsible for triple net charges of about
$302 per month.
HISTORY:
Police staff has been looking at options to locate a substation in the southern
quadrant of the City since the prior space at the Arlington Municipal Airport office
was needed for the move of the City’s Permit Center. Prior to locating at the Airport
office, staff had a small area available for use at Fire Station 48.
ALTERNATIVES
RECOMMENDED MOTION:
I move to approve the proposed lease with RH Smokey Point Shopping Center
Associates, LLC and authorize the Mayor to sign it.
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MULTI-TENANT LEASE AGREEMENT
THIS LEASE AGREEMENT (the “Lease”) is entered into effective July 14, 2014 between RH Smokey Point Shopping
Center Associates, LLC, a WA limited liability company (“Landlord”), and City of Arlington, a WA municipal corporation
(“Tenant”). Landlord and Tenant agree as follows:
1. LEASE SUMMARY. In the event of a conflict between the terms of this Summary and the provisions of the balance
of the Lease, the terms in the balance of the Lease shall control.
a. Leased Premises. The leased commercial real estate (the “Premises”) consists of an agreed area of 891
rentable square feet and is outlined on the floor plan attached as Exhibit B. The Premises are commonly
known as 17306 Smokey Point Drive, Suite 15, Arlington, WA 98223. (Addresses provided by the Landlord
are approximations. The Tenant is solely responsible for verifying the correct address with local postal
authorities.) The Premises are located on the land legally described on attached Exhibit A. The rent, Tenant’s
Pro Rata Share and other payments payable herein are not subject to change due to any variance in Tenant's
square footage. The Premises do not include, and Landlord reserves, the exterior walls and roof of the
Premises, the land beneath the Premises and above the ceiling of the Premises, the pipes and ducts, conduits,
wires, fixtures, and the structure in which the Premises are located (hereinafter, the “Building”). The Building,
the land described on Exhibit B, all other improvements located on such land and all common areas
appurtenant to the Building are referred to herein as the “Property.”
b. Lease Commencement Date. The Lease shall commence on August 1, 2014, or such earlier or later date as
provided in Section 3 (the “Commencement Date”). Regardless of the Commencement Date, all of the terms
of this Lease shall commence and be binding on Tenant beginning the first day Tenant occupies the Premises,
except as expressly set forth to the contrary.
c. Lease Termination Date. The Lease shall terminate at midnight on December 31, 2017, or such earlier or
later date as provided in Section 3 (the “Termination Date”).
d. Base Rent. The base monthly rent shall be as follows:
Months of
Lease Term
Base Rent Per
Month
01 - 05 $0
06 - 17 $835
18 - 30 $910
31 - 41 $956
Estimated Operating Costs: $302.00 per month initially.
Free Rent Period: As shown in the rent schedule above, no Base Rent shall be payable for the first five (5)
month(s) of the Lease term, subject to the provisions of Section 23. Operating and other costs shall not be
abated, however, for such period. If the Commencement Date is other than the first of a month, each month
of “free rent” shall be credited for 30 days.
Early Possession Rights: Subject to Section 37.
Early Termination Rights: Subject to Addendum One.
e. Prepaid Rent. Due on January 1, 2015, Tenant shall deliver to Landlord the sum of Eight Hundred Thirty-
Five and NO/100 Dollars ($835.00) as prepaid rent, to be applied to the Rent due for the sixth (6th) month(s)
of the Lease.
f. Prepaid Operating Costs: $302.00 for the first month’s Adjustments due.
g. Security Deposit. The amount of the security deposit is $1,258.00.
h. Permitted Use. The Premises shall be used only for general office use by the Arlington Police Department
and for no other purpose without the prior written consent of Landlord.
i. Notice and Payment Addresses:
Landlord: c/o Rosen Properties, P.O. Box 5003, Bellevue, WA 98009-5003.
Tenant: 238 North Olympic Ave, Arlington, WA 98223
j. Tenant’s Pro Rata Share. See Section 8(e)(iv).
2. PREMISES. Landlord leases to Tenant, and Tenant leases from Landlord the Premises upon the terms specified in
this Lease.
3. TERM.
a. Commencement Date. The Lease shall commence on (i) the date specified in Section 1(b), or, (ii) if Landlord
gives written notice to Tenant prior to the date set forth in Section 1(b), on such earlier or later date as may be
specified by written notice delivered by Landlord to Tenant advising Tenant that the Premises are or will be
“Ready For Possession” and specifying the revised Commencement Date, which shall not be less than
days (10 if not completed) days following the date of such notice. “Ready for Possession” shall be defined as
the date the Premises are ready for occupancy by Tenant and Landlord tenders possession of the Premises. If
there is Landlord’s Work required, said date shall be no earlier than the date the Landlord’s Work is
substantially complete (as reasonably determined by Landlord), subject only to punch-list items. If there is
Landlord’s Work, Landlord and Tenant shall cooperate to compile the punch-list within seven (7) days of the
date the Premises are Ready for Possession. Landlord shall promptly correct all punch-list items. If Tenant
fails to notify Landlord of any defects in the Landlord’s Work or the Premises within seven (7) days after
Premises are Ready for Possession, Tenant shall be deemed to have accepted the Premises in their then
condition. If Tenant discovers any major defects in the Landlord’s Work during this seven (7) day period that
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would prevent Tenant from using the Premises for its intended purpose, Tenant promptly shall so notify
Landlord in writing and the Commencement Date shall be delayed until after Landlord has corrected the major
defects. To the extent Tenant’s tenant improvements are not completed in time for the Tenant to occupy or
take possession of the Premises on the Commencement Date due to the failure of Tenant to fulfill any of its
obligations under this Lease, the Lease shall nevertheless commence on the Commencement Date.
Neither Landlord nor any agent or employee of Landlord shall be liable for any damage or loss due to
Landlord’s inability or failure to deliver possession of the Premises to Tenant as provided in this Lease,
however the Lease will commence on the first (1st) day the Premises is delivered with free and unrestricted
access suitable for the Tenant’s Permitted Use. The Termination Date shall be modified upon any change in
the Commencement Date so that the length of the Lease term is not changed. If Landlord does not deliver
possession of the Premises to Tenant within ten (10) days after the date specified in Section 1, excluding the
number of days delivery is delayed due to Tenant’s actions or inactions, Tenant may elect to cancel this Lease
by giving written notice to Landlord within 10 days after such time period ends, so long as said notice is given
before the Premises are Ready for Possession. If Tenant gives such timely notice, the Lease shall be canceled,
all prepaid rent and security deposits shall be refunded to Tenant, and neither Landlord nor Tenant shall have
any further obligations to the other. Notwithstanding the foregoing, in no event, however, shall Tenant have
the right to cancel this Lease if and to the extent any delay in making the Premises Ready for Possession is
the result of (i) any act of God or the elements, (ii) shortage or unavailability of necessary materials, supplies,
or labor, (iii) shortage of or interruption of transportation facilities, (iv) acts of Tenant, or (v) any other cause
beyond Landlord's reasonable control.
The first “Lease Year” shall commence on the Commencement Date and shall end on the date which is twelve
(12) months from the end of the month in which the Commencement Date occurs. Each successive Lease
Year during the initial term and any extension terms shall be twelve (12) months, commencing on the first
day following the end of the preceding Lease Year, except that the last Lease Year shall end on the Termination
Date.
b. Condition of Premises. Except as specified elsewhere in this Lease, Landlord makes no representations or
warranties to Tenant regarding the Premises, including the zoning, municipal, county and state laws,
ordinances and regulations, as well as all declarations, covenants and encumbrances on title, governing and
regulating the use of the Premises, suitability of the Premises for Tenant’s intended use, structural condition
of the Premises and the condition of all mechanical, electrical, and other systems on the Premises. Except for
any tenant improvements described on attached Exhibit C as Landlord’s Work, Tenant shall be responsible
for performing all work necessary to bring the Premises into condition satisfactory to Tenant (“Tenant’s
Work”). Responsibilities for design, payment and performance of all such work shall be as set forth on
attached Exhibit C. By signing this Lease, Tenant acknowledges that it has had adequate opportunity to
investigate the Premises, acknowledges responsibility for making any corrections, alterations and repairs to
the Premises (other than the Landlord’s Work), and acknowledges that the time needed to complete any such
items shall not delay the Commencement Date.
4. RENT. Tenant shall pay Landlord without demand, deduction or offset, in lawful money of the United States, the
monthly Base Rent stated in Section 1(d) in advance on or before the first day of each month during the Lease Term
beginning on the Commencement Date, and any other additional payments due to Landlord, including Operating Costs,
when required under this Lease. Payments for any partial month at the beginning or end of the Lease term shall be prorated.
As used herein, "Rent" and "rent" shall include the foregoing described sums, together with all other sums, costs, fees, or
other charges, without limitation, to be paid or reimbursed by Tenant to Landlord under the terms of this Lease, whether or
not so designated. If any Rent or sums payable by Tenant to Landlord under this Lease are not received by the fifth (5th)
day following the date due, Tenant shall pay Landlord in addition to the amount due, for the cost of collecting and handling
such late payment, an amount equal to the greater of $100 or ten percent (10%) of the delinquent amount. In addition, all
delinquent sums payable by Tenant to Landlord and not paid within five days of the due date shall, at Landlord’s option,
bear interest at the rate of twelve percent (12%) per annum, or the highest rate of interest allowable by law, whichever is
less. Interest on all delinquent amounts shall be calculated from the original due date to the date of payment.
Landlord’s acceptance of less than the full amount of any payment due from Tenant shall not be deemed an accord and
satisfaction or compromise of such payment unless Landlord specifically consents in writing to payment of such lesser sum
as an accord and satisfaction or compromise of the amount which Landlord claims.
5. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deliver to Landlord the security deposit specified
in Section 1(g) above. Landlord may commingle the security deposit with its other funds. If Tenant breaches any covenant
or condition of this Lease, including but not limited to the payment of Rent, Landlord may apply all or any part of the
security deposit to the payment of any sum in default and any damage suffered by Landlord as a result of Tenant’s breach.
In such event, Tenant shall, within five (5) days after written demand therefore by Landlord, deposit with Landlord the
amount so applied. Any payment to Landlord from the security deposit shall not be construed as a payment of liquidated
damages for any default. If Tenant complies with all of the covenants and conditions of this Lease throughout the Lease
term, the security deposit shall be repaid to Tenant without interest within 30 days after the vacation of the Premises by
Tenant.
6. USES. The Premises shall be used only for the use(s) specified in Section 1 above (the “Permitted Use”), and for no
other business or purpose without the prior written consent of Landlord, which consent shall not be unreasonably withheld.
No act shall be done on or around the Premises that is unlawful or that will increase the existing rate of insurance on the
Premises or the Building, or cause the cancellation of any insurance on the Premises or the Building. Tenant shall not
commit or allow to be committed any waste upon the Premises, or any public or private nuisance. Tenant shall not do or
permit anything to be done in the Premises or on the Property which will obstruct or interfere with the rights of other tenants
or occupants of the Property, or their customers, clients and visitors, or to injure or annoy such persons.
7. COMPLIANCE WITH LAWS. Tenant shall not cause or permit the Premises to be used in any way which violates
any law, ordinance, or governmental regulation or order. Landlord represents to Tenant, to the best of Landlord’s knowledge,
that with the exception of any Tenant’s Work, as of the Commencement Date, the Premises comply with all applicable laws,
rules, regulations, or orders, including without limitation, the Americans With Disabilities Act, if applicable, and Landlord
shall be responsible to promptly cure any noncompliance which exists on the Commencement Date. Tenant shall be
responsible for complying with all laws applicable to the Premises as a result of Tenant’s particular use (other than mere
occupancy), such as modifications required by the Americans With Disabilities Act as a result of Tenant opening the
Premises to the public as a place of public accommodation, or any special requirements imposed by the particular activities
or products of Tenant. If the enactment or enforcement of any law, ordinance, regulation or code during the Lease term
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requires any changes to the Premises during the Lease term, the Tenant shall perform all such changes at its expense if the
changes are required due to the nature of Tenant’s activities or products at the Premises, or to alterations that Tenant seeks
to make to the Premises.
8. OPERATING COSTS.
a. Definition. As used herein, “Operating Costs” shall mean all costs of operating, maintaining and repairing
the Premises, the Building, and the Property, determined in accordance with generally accepted accounting
principles, and including without limitation the following: all taxes and assessments (including, but not limited
to, real and personal property taxes and assessments, local improvement district assessments and other special
purpose assessments, and taxes on rent or gross receipts); insurance premiums paid by Landlord and (to the
extent used) deductibles; water, sewer and all other utility charges (other than utilities separately metered and
paid directly by Tenant or other tenants); common area janitorial and all other cleaning services; common area
refuse and trash removal; refurbishing and repainting; common area carpet replacement; repair and
replacement of air conditioning, heating, ventilation, elevator and roof; City, State, Federal Code compliance;
pest control; lighting systems, fire detection and security services; landscape maintenance; management (fees
and/or personnel costs); parking lot, road, sidewalk and driveway patching, resurfacing and maintenance;
snow and ice removal; amortization (in accordance with generally accepted accounting principles) of capital
improvements as Landlord may in the future install to comply with governmental regulations and rules or
undertaken in good faith with a reasonable expectation of reducing operating costs (the useful life of which
shall be a reasonable period of time as determined by Landlord); and costs of legal services (except those
incurred directly relating to a particular occupant of the Building); accounting services, labor, supplies,
materials and tools. Landlord and Tenant agree that if the Building is not ninety-five percent (95%) occupied
during any calendar year, on a monthly average, then the Operating Costs shall be increased to reflect the
Operating Costs of the Building as though it were ninety-five percent (95%) occupied and Tenant’s Pro Rata
Share of Operating Costs shall be based upon Operating Costs as so adjusted.
b. Exclusions from Operating Costs. Operating Costs shall not include: Landlord’s income tax or general
corporate overhead, depreciation on the Building or equipment therein; costs to repair the Building foundation
and structural components not listed in (a) above, loan payments; real estate broker’s commissions or any
costs regarding the operation, maintenance and repair of the Premises, the Building, or the Property paid
directly by Tenant or other tenants in the Building. If Tenant is renting a pad separate from any other structures
on the Property for which Landlord separately furnishes the services described in this paragraph, then the term
“Operating Costs” shall not include those costs of operating, repairing, and maintaining the enclosed mall
which can be separately allocated to the tenants of the other structures. Operating Costs which cannot be
separately allocated to the tenants of other structures may include but are not limited to: insurance premiums;
taxes and assessments; management (fees and/or personnel costs); exterior lighting; parking lot, road,
sidewalk and driveway patching, resurfacing and maintenance; snow and ice removal; and costs of legal
services and accounting services.
c. Capital Expenditure Constraints: Notwithstanding the foregoing, Landlord shall only have the right to
include in operating costs in the year incurred the entire amount of capital costs (as defined under the Internal
Revenue Code of 1986 as it may be amended) related to existing portions of the Building which do not exceed
ten percent (10%) of the total expenses in connection with the Common Areas for any given calendar year,
except if and to the extent the capital costs are for the purpose of saving energy in the Building. If the capital
costs exceed that ten percent (10%) threshold, Landlord can include in the recoverable expenses of the
Common Areas either reserves (in advance of such expenditures) or amortizing reimbursements for
replacement of existing capital improvements in the Building spread over their useful life.
d. Type of Payment: Options one and two address the manner in which Operating Costs are paid under this
Lease. To select the pure triple net option, check option 1. To select the base year option, check option 2.
OPTION ONE: TRIPLE NET. As additional Rent, Tenant shall pay to Landlord on the first of each
month with payment of Tenant’s Base Rent one-twelfth of Tenant’s Pro Rata Share of Operating Costs.
OPTION TWO: BASE YEAR. The Base Rent paid by Tenant under this Lease includes Tenant’s Pro
Rata Share of Operating Costs for the calendar year in which the Commencement Date occurs (the “Base
Year”). As Additional Rent, Tenant shall pay to Landlord on the first day of each month commencing on the
first day of the first year after Commencement Date, with Tenant’s payment of Base Rent, one-twelfth of the
amount, if any, by which Tenant’s Pro Rata Share of Operating Costs exceeds Tenant’s annualized pro rata
share of Operating Costs for the Base Year.
e. Method of Payment. Tenant shall pay to Landlord Operating Costs as provided above pursuant to the
following procedure:
i) Landlord shall provide to Tenant, at or before the Commencement Date, a good faith estimate of annual
Operating Costs for the calendar year in which the Commencement Date occurs. Landlord shall also provide
to Tenant, as soon as possible following the first day of each succeeding calendar year, a good faith estimate
of Tenant’s annual Pro Rata Share of Operating Costs for the then-current year. Landlord shall, at its option,
have the right to amortize any operating cost over a longer period of time, including interest.
(ii) Each estimate of Tenant’s annual Pro Rata Share of Operating Costs determined by Landlord as described
above shall be divided into twelve (12) equal monthly installments. If Tenant pays Operating Costs under
Option One, Tenant shall pay to Landlord such monthly installment of Operating Costs with each monthly
payment of base Rent. If Tenant pays Operating Costs under Option Two, Tenant shall pay to Landlord with
each monthly payment of base Rent the amount, if any, by which such monthly installments of Operating
Costs exceed one twelfth of Tenant’s annualized pro rata share of Operating Costs for the Base Year. In the
event the estimated amount of Tenant’s Pro Rata Share of Operating Costs has not yet been determined for
any calendar year, Tenant shall pay the monthly installment in the estimated amount determined for the
preceding calendar year until the estimate for the current calendar year has been provided to Tenant. At such
time as the estimate for the current calendar year is received, Tenant shall then pay any shortfall or receive a
credit for any surplus for the preceding months of the current calendar year and shall, thereafter, make the
monthly installment payment in accordance with the current estimate; and
(iii) As soon as reasonably possible following the end of each calendar year of the Lease term, Landlord shall
determine and provide to Tenant a statement (the “Operating Costs Statement”) setting forth the amount of
Operating Costs actually incurred and the amount of Tenant’s Pro Rata Share of Operating Costs actually
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payable by Tenant with respect to such calendar year. In the event the amount of Tenant’s Pro Rata Share of
Operating Costs exceeds the sum of the monthly installments actually paid by Tenant for such calendar year,
Tenant shall pay to Landlord the difference within thirty (30) days following receipt of the Operating Costs
Statement. In the event the sum of such installments exceeds the amount of Tenant’s Pro Rata Share of
Operating Costs actually due and owing, the difference shall be applied as a credit to Tenant’s future Pro Rata
Share of Operating Costs payable by Tenant pursuant to this Section.
(iv) Tenant’s Pro Rata Share of the Operating Costs shall be determined based on the ratio between the total
rentable square footage of the Premises and the total rentable square footage of all buildings located on the
Property, exclusive of the square footage of the Common Areas. , Provided, however, that Landlord shall have
the right, in its sole discretion, to adjust Tenant's share of any expense or charge, where appropriate, to reflect
Tenant's actual usage or project type, i.e. Industrial versus Office use. If any tenant pays real estate taxes or
its share of any other such expenses or charges, directly or is required to pay for such insurance according to
the terms of its lease, the Premises of any such tenant and the amount paid directly by such tenant shall not be
included in the calculation to apportion that particular item of expense or charge among the other tenants.
9. UTILITIES AND SERVICES. Landlord shall provide the Premises the following services, the cost of which shall be
included in the Operating Costs: water and electricity for the Premises seven (7) days per week, twenty-four (24) hours per
day. Notwithstanding the foregoing, if Tenant’s use of the Premises incurs utility service charges which are above those
usual and customary for the Permitted Use, Landlord reserves the right to require Tenant to pay a reasonable additional
charge for such usage. Landlord shall not be liable for any loss, injury or damage to person or property caused by or resulting
from any variation, interruption, or failure of utilities due to any cause whatsoever, and Rent shall not abate as a result
thereof.
Tenant shall furnish all other utilities (including, but not limited to, telephone and cable service if available) and other
services which Tenant requires with respect to the Premises, and shall pay at Tenant’s sole expense. Notwithstanding the
foregoing, if Tenant’s use of the Premises incurs utility service charges which are above ordinary usage, Landlord reserves
the right to require Tenant to pay a reasonable additional charge for such usage. For example, where Tenant installs and
uses a number of electronic devices which is greater than normal, the increased usage may result in higher electrical charges
and increased charges for cooling since overheating of rooms may result.
Tenant shall furnish all other utilities (including, but not limited to, telephone, Internet, and cable service if available) and
other services which Tenant requires with respect to the Premises, and shall pay, at Tenant’s sole expense, the cost of all
utilities separately metered to the Premises, and of all other utilities and other services which Tenant requires with respect
to the Premises, except those to be provided by Landlord and included in Operating Costs as described above.
10. TAXES. Tenant shall pay all taxes, assessments, liens and license fees (“Taxes”) levied, assessed or imposed by any
authority having the direct or indirect power to tax or assess any such liens, by reason of Tenant’s use of the Premises, and
all Taxes on Tenant’s personal property located on the Premises. Landlord shall pay all Taxes with respect to the Building
and the Project the costs of which shall be included in Operating Costs, chargeable to Tenant pursuant to Section 8.
11. COMMON AREAS.
a. Definition. The term “Common Areas” means all areas and facilities that are provided and designated from
time to time by Landlord for the general non-exclusive use and convenience of Tenant with other tenants and
which are not leased or held for the exclusive use of a particular tenant. Common Areas may, but do not
necessarily include, hallways, entryways, stairs, elevators, driveways, walkways, terraces, docks, loading
areas, restrooms, trash facilities, parking areas and garages, roadways, pedestrian sidewalks, landscaped areas,
security areas and lobby or mall areas. Tenant shall comply with reasonable rules and regulations concerning
the use of the common areas adopted by Landlord from time to time. Without advance notice to Tenant and
without any liability to Tenant, Landlord may change the size, use, or nature of any common areas, erect
improvements on the Common Areas or convert any portion of the Common Areas to the exclusive use of
Landlord or selected tenants, so long as Tenant is not thereby deprived of the substantial benefit of the
Premises. Landlord reserves the use of exterior walls and the roof, and the right to install, maintain, use, repair
and replace pipes, ducts, conduits, and wires leading through the Premises.
b. Use of the Common Areas. Tenant shall have the non-exclusive right in common with such other tenants to
whom Landlord has granted or may grant such rights to use the Common Areas. Tenant shall abide by rules
and regulations adopted by Landlord from time to time and shall use its best efforts to cause its employees,
contractors, and invitees to comply with those rules and regulations, and not interfere with the use of Common
Areas by others.
c. Maintenance of Common Areas. Landlord shall maintain the Common Areas in good order, condition and
repair. This maintenance cost shall be an Operating Cost chargeable to Tenant pursuant to Section 8.
12. ALTERATIONS. Tenant may make alterations, additions or improvements to the Premises, including any Tenant’s
Work identified on attached Exhibit C (“Alterations”), with the prior written consent of Landlord. The term “Alterations”
shall not include the installation of shelves, movable partitions, Tenant’s equipment, and trade fixtures which may be
performed without damaging existing improvements or the structural integrity of the Premises, and Landlord’s consent shall
not be required for Tenant’s installation of those items. Tenant shall complete all Alterations at Tenant’s expense (i) in
compliance with all applicable laws, (ii) in good, fully functioning and workmanlike condition, (iii) in accordance with plans
and specifications approved by Landlord, (iv) using contractors approved by Landlord, and (v) in a manner so as to not
unreasonably interfere with other tenants. Landlord shall be deemed the owner of all Alterations except for those which
Landlord requires to be removed at the end of the Lease term. Tenant shall remove all Alterations at the end of the Lease
term specified by Landlord. Tenant shall immediately repair any damage to the Premises caused by removal of Alterations
and restore the premises to its original condition.
13. REPAIRS AND MAINTENANCE. Tenant shall, at its sole expense, maintain the Premises in good condition and
promptly make all repairs and replacements, whether structural or non-structural, necessary to keep the Premises safe and
in good condition. Landlord shall maintain and repair the Building structure, foundation, exterior walls, roof, HVAC system,
lighting, and the Common Areas, the costs of which shall be included in the Operating Costs. Tenant shall not damage any
demising wall or disturb the structural integrity of the Premises and shall promptly repair any damage or injury done to any
such demising walls or structural elements caused by Tenant or its employees, agents, contractors, or invitees. If Tenant
fails to maintain or repair the Premises, Landlord may enter the Premises and after reasonable notice allowing the Tenant to
make necessary repairs (except in the case of emergency) perform such repair or maintenance on behalf of Tenant. In such
case, Tenant shall be obligated to pay to Landlord immediately upon receipt of demand for payment, as additional Rent, all
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costs incurred by Landlord. Notwithstanding anything in this Section to the contrary, Tenant shall not be responsible for
any repairs to the Premises made necessary by the acts of Landlord or its agents, employees, contractors or invitees therein.
Upon expiration of the Lease term, whether by lapse of time or otherwise, Tenant shall promptly and peacefully surrender
the Premises, together with all keys, to Landlord in as good condition as when received by Tenant from Landlord or as
thereafter improved, reasonable wear and tear and insured casualty excepted.
14. ACCESS AND RIGHT OF ENTRY. Tenant shall permit Landlord and its agents and employees to enter the Premises
with reasonable notice and at all reasonable times for the purposes of inspection or to make repairs, alterations or
improvements. This Section shall not impose any repair or other obligation upon Landlord not expressly stated elsewhere in
this Lease. Landlord also shall have the right to enter the Premises for the purpose of showing the Premises to prospective
purchasers or lenders at any time, and to prospective tenants within 180 days prior to the expiration or sooner termination
of the Lease term.
15. SIGNAGE. Tenant shall obtain Landlord’s written consent before installing any signs upon the Premises per the
Signage Criteria attached hereto as Exhibit E. Tenant shall install any approved signage at Tenant’s sole expense and in
compliance with all applicable laws. Tenant shall not damage or deface the Premises in installing or removing signage and
shall repair any injury or damage to the Premises caused by such installation or removal.
16. DESTRUCTION OR CONDEMNATION.
a. Damage and Repair. If the Premises or the portion of the Property necessary for Tenant’s occupancy are partially
damaged but not rendered untenantable, by fire or other insured casualty, then Landlord shall diligently restore the
Premises and the portion of the Property necessary for Tenant’s occupancy and this Lease shall not terminate;
provided, however, Tenant may terminate the Lease if Landlord is unable to restore the Premises within nine (9)
months of the casualty event. The Premises or the portion of the Property necessary for Tenant’s occupancy shall
not be deemed untenantable if less than twenty-five percent (25%) of each of those areas are damaged.
Notwithstanding the foregoing, Landlord shall have no obligation to restore the Premises or the portion of the
Property necessary for Tenant’s occupancy if insurance proceeds are not available to pay the entire cost of such
restoration. If insurance proceeds are available to Landlord but are not sufficient to pay the entire cost of
restoration, then Landlord may elect to terminate this Lease and keep the insurance proceeds, by notifying Tenant
within sixty (60) days of the date of such casualty.
If the Premises, the portion of the Property necessary for Tenant’s occupancy, or 50% or more of the rentable area
of the Property are entirely destroyed, or partially damaged and rendered untenantable, by fire or other casualty,
Landlord may, at its option: (a) terminate this Lease as provided herein, or (b) restore the Premises and the portion
of the Property necessary for Tenant’s occupancy to their previous condition; provided, however, if such casualty
event occurs during the last 6 months of the Lease term (after considering any option to extend the term timely
exercised by Tenant) then either Tenant or Landlord may elect to terminate the Lease. If, within 60 days after
receipt by Landlord from Tenant of written notice that Tenant deems the Premises or the portion of the Property
necessary for Tenant’s occupancy untenantable, Landlord fails to notify Tenant of its election to restore those
areas, or if Landlord is unable to restore those areas within nine (9) months of the date of the casualty event, then
Tenant may elect to terminate the Lease.
If Landlord restores the Premises or the Property under this Section 16(a), Landlord shall proceed with reasonable
diligence to complete the work, and the base Rent shall be abated in the same proportion as the untenantable portion
of the Premises bears to the whole Premises, provided that there shall be a rent abatement only if the damage or
destruction of the Premises or the Property did not result from, or was not contributed to directly or indirectly by
the act, fault or neglect of Tenant, or Tenant’s officers, contractors, licensees, agents, servants, employees, guests,
invitees or visitors. Provided, Landlord complies with its obligations under this Section, no damages,
compensation or claim shall be payable by Landlord for inconvenience, loss of business or annoyance directly,
incidentally or consequentially arising from any repair or restoration of any portion of the Premises or the Property.
Landlord will not carry insurance of any kind for the protection of Tenant or any improvements paid for by Tenant
or as provided in Exhibit C or on Tenant’s furniture or on any fixtures, equipment, improvements or appurtenances
of Tenant under this Lease, and Landlord shall not be obligated to repair any damage thereto or replace the same
unless the damage is caused by Landlord’s negligence.
b. Condemnation. If the Premises, the portion of the Property necessary for Tenant’s occupancy, or 50% or more
of the rentable area of the Property are made untenantable by eminent domain, or conveyed under a threat of
condemnation, this Lease shall terminate at the option of either Landlord or Tenant as of the earlier of the date title
vests in the condemning authority or the condemning authority first has possession of the Premises or the portion
of the Property and all Rents and other payments shall be paid to that date. In case of taking of a part of the
Premises or the portion of the Property necessary for Tenant’s occupancy that does not render those areas
untenantable, then this Lease shall continue in full force and effect and the base Rent shall be equitably reduced
based on the proportion by which the floor area of any structures is reduced, such reduction in Rent to be effective
as of the earlier of the date the condemning authority first has possession of such portion or title vests in the
condemning authority. The Premises or the portion of the Property necessary for Tenant’s occupancy shall not be
deemed untenantable if less than twenty-five percent (25%) of each of those areas are condemned. Landlord shall
be entitled to the entire award from the condemning authority attributable to the value of the Premises or the
Property and Tenant shall make no claim for the value of its leasehold. Tenant shall be permitted to make a separate
claim against the condemning authority for moving expenses or damages resulting from interruption in its business,
provided that in no event shall Tenant’s claim reduce Landlord’s award.
17. INSURANCE.
a. Liability Insurance. Tenant shall, at Tenant's expense, obtain and keep in force during the term of this Lease a
policy of commercial general liability insurance insuring Landlord and Tenant against all liability arising out of
the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. If alcohol is to
be consumed on or sold from the Premises that insurance shall include coverage for any liability arising out of the
sale or consumption of beer, wine or liquor on the Premises. Such insurance shall be in an amount of not less than
One Million Dollars ($1,000,000) combined single limit coverage per occurrence and Two Million Dollars
($2,000,000) general aggregate limit to injury to persons (including death) and/or property damage including loss
of use. The limits of said insurance shall not, however, limit the liability of Tenant hereunder. If Tenant shall
fail to procure and maintain said insurance Landlord may, but shall not be required to, procure and maintain the
same, but at the expense of Tenant. The insurance required to be obtained by Tenant hereunder may be provided
through Tenant’s participation in the WCIA self-insured pool.
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b. Landlord shall, throughout the Lease Term, keep and maintain in full force and effect Commercial general liability
insurance, insuring against claims of bodily injury and death or property damage or loss with a combined single
limit at the Commencement Date of not less than One Million Dollars ($1,000,000.00) per occurrence and Two
Million Dollars ($2,000,000.00) general aggregate
c. Property Insurance. The Landlord shall obtain and keep in force during the term of this Lease a policy or policies
of insurance covering loss or damage to the Premises, in the amount of the full replacement value thereof, providing
protection against special causes of loss (all risk), the boiler and machinery perils, and earthquakes and flood, if
reasonably deemed necessary by Landlord. In addition thereto, Landlord shall maintain rent loss insurance in favor
of Landlord insuring Landlord against any loss of rental from damage or destruction of the Premises by the insured
perils for a period of at least six (6) months from the date of such damage or destruction. Said insurance shall
provide for payment for loss thereunder to Landlord or to the holder of a first mortgage or deed of trust on the
Premises. Such insurance shall be for the sole benefit of the Landlord and under its sole control.
Notwithstanding the terms of any insurance policy, "full replacement value" shall include, but not by way of
limitation, all costs that must be incurred to repair or replace (i) the foundation of any improvements, (ii) other
improvements below grade level, (iii) retaining walls, (iv) the surfaces of the Premises including paving, sidewalks
and landscaping; and all costs that must be incurred to comply with any then existing (at the time of the repair or
rebuilding) governmental ordinances, laws or regulations (including environmental laws and regulations) relating
to the construction, use or repair of any property; and all costs that must be incurred if any property is required to
be torn down; and all costs of excavation, grading, back-filling or filling.
Tenant may, at its option, purchase insurance to cover its personal property. In no event shall Landlord be liable
for any damage to or loss of personal property sustained by Tenant, whether or not it is insured, even if such loss
is caused by the negligence of Landlord, its employees, officers, directors, or agents.
Tenant may, at its option, purchase business income, business interruption, extra expense or similar coverage as
part of this commercial property insurance.
d. Insurance Policies. Insurance required hereunder shall be in companies rated A-VII or better by A.M. Best
Company under its rating system in effect in 2005; or, if that rating system is modified, then such insurance
company shall have at least an equivalent rating under such modified rating system. Tenant shall deliver prior to
possession, to Landlord, certificates evidencing the existence and amounts of such insurance it is responsible for
procuring hereunder with loss payable and additional insured clauses satisfactory to Landlord. No such policy
shall be cancelable or subject to reduction of coverage or other modification except after at least thirty (30) days
prior written notice to Landlord. Tenant shall, prior to the expiration of such policies, furnish Landlord with
renewals thereof, or Landlord may order such insurance and charge the cost thereof to Tenant, which amount shall
be payable by Tenant upon demand. Tenant shall not do or permit anything to be done which shall invalidate the
insurance policies referred to in this Section 17. Tenant shall forthwith, upon Landlord's demand, reimburse
Landlord for any additional premiums attributable to any act, omission, use of the Premises or Center, operation
or capital improvement of Tenant causing such increase in the cost of insurance, which extra cost shall be solely
paid by Tenant rather than as Adjustments payable by all tenants. Tenant shall have the right to provide such
insurance coverage pursuant to blanket policies obtained by Tenant, provided such blanket policies expressly afford
coverage to the Premises and to Landlord as required by this Lease. Notwithstanding any other provisions of this
Section 17, Landlord shall have the privilege of requiring any policy of insurance to be modified to include the
coverage contemplated by this Section 17 or to include coverage usually found in such a policy to protect
completely an owner of property leasing to a commercial tenant.
e. Waiver of Subrogation. Tenant and Landlord each waive any and all rights of recovery against the other, and
against the officers, employees, agents and representatives of the other, for loss of or damage to such waiving party
or its property or the property of others under its control, where such loss or damage is insured against under any
insurance policy in force at the time of such loss or damage. Tenant and Landlord shall, upon obtaining the policies
of insurance required hereunder, give notice to the insurance carriers (or, in case of Tenant, the WCIA self-
insurance pool) that the foregoing mutual waiver of subrogation is contained in this Lease.
f. Indemnity and Hold Harmless. Tenant shall indemnify, defend and hold Landlord harmless from any and all
claims, judgments, actions, fines, penalties, costs and expenses (including attorneys fees and court costs) and
liability (collectively, “Claims”) arising from (i) Tenant's use or occupancy of the Premises, (ii) the conduct of its
business or from any activity, work or things which may be permitted or suffered by Tenant in the Premises, (iii)
any act of negligence or intentional wrongdoing of Tenant or Tenant’s employees, agents, contractors or invitees,
or (iv) Tenant’s breach of this Lease, except if and to the extent caused by the Landlord's negligence or intentional
wrongdoing. In the event any action or proceeding is brought against Landlord by reason of any such Claim,
Tenant upon notice from Landlord shall defend same at Tenant's expense by counsel reasonably satisfactory to
Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property
or injury to persons in or about the Premises from any cause, and Tenant hereby waives all claims in respect thereof
against Landlord, except if and to the extent caused by Landlord's negligence or intentional wrongdoing.
Landlord shall indemnify, defend and hold Tenant harmless from any and all Claims arising from (i) any act of
negligence or intentional wrongdoing of Landlord or Landlord’s employees, agents, managers or contractors, or
(ii) Landlord’s breach of this Lease, except if and to the extent caused by the Tenant’s negligence or intentional
wrongdoing. In the event any action or proceeding is brought against Tenant by reason of any such Claim,
Landlord upon notice from Tenant shall defend same at Landlord’s expense (subject to Section 18) by counsel
reasonably satisfactory to Tenant
g. Exemption of Landlord From Liability. Notwithstanding anything herein to the contrary, Tenant hereby agrees
that Landlord shall not be liable for injury to Tenant's business, consequential damages or any loss of income there
from or from damage to the goods, wares, merchandise or other property of Tenant, Tenant's employees, invitees,
customers or any other person in or about the Premises. In addition, Landlord shall not be liable for injury to the
person of Tenant, Tenant's employees, agents, contractors and invitees, if such damage or injury is caused by or
results from fire, steam, electricity, gas, water, or rain, or from the breakage, leakage, obstruction or other defects
of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, whether the said damage or
injury results from conditions arising upon the Premises or upon other portions of the building of which the
Premises are a part, or from other sources or places, and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible to Landlord or Tenant, however Landlord shall use reasonable
efforts to remedy the casualty. Landlord shall not be liable for any damages arising from any act or neglect of any
other tenant(s), if any, of the building in which the Premises are located.
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h. Landlord To Be Additional Insured. Priority of Insurance. Landlord shall be named as an additional named
insured on all of Tenant's insurance policies referred to in this Section 17 using ISO additional insured endorsement
CG 20 11 or a substitute providing equivalent coverage . In the event a policy of insurance procured by Tenant
and a policy procured by Landlord provide coverage for the same loss, Landlord's policy shall be considered
secondary and as providing excess coverage to the limits of Tenant's policy unless the express language of either
policy states otherwise.
18. INDEMNIFICATION. Tenant shall defend, indemnify, and hold Landlord harmless against all liabilities, damages,
costs, and expenses, including attorneys’ fees for personal injury, bodily injury (including death) or property damage arising
from any negligent or wrongful act or omission of Tenant or Tenant’s officers, contractors, licensees, agents, servants,
employees, guests, invitees, or visitors on or around the Premises or arising from any breach of this Lease by Tenant. Tenant
shall use legal counsel acceptable to Landlord in defense of any action within Tenant’s defense obligation. Landlord shall
defend, indemnify and hold Tenant harmless against all liabilities, damages, costs, and expenses, including attorneys’ fees,
for personal injury, bodily injury (including death) or property damage arising from any negligent or wrongful act or
omission of Landlord or Landlord’s officers, contractors, licensees, agents, servants, employees, guests, invitees, or visitors
on or around the Premises or arising from any breach of this Lease by Landlord. Landlord shall use legal counsel acceptable
to Tenant in defense of any action within Landlord’s defense obligation. The provisions of this Section 18 shall survive
expiration or termination of Lease, and are subject to the provisions of Section 17 above.
19. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet, mortgage, encumber or otherwise transfer any
interest in this Lease (collectively referred to as a “Transfer”) or any part of the Premises, without first obtaining Landlord’s
written consent, which shall not be unreasonably withheld or delayed. No Transfer shall relieve Tenant of any liability under
this Lease notwithstanding Landlord’s consent to such transfer. Consent to any Transfer shall not operate as a waiver of the
necessity for Landlord’s consent to any subsequent Transfer.
If Tenant is a partnership, limited liability company, corporation, or other entity, any transfer of this Lease by merger,
consolidation, redemption or liquidation, or any change(s) in the ownership of, or power to vote, which singularly or
collectively represents a majority of the beneficial interest in Tenant, shall constitute a Transfer under this Section.
As a condition to Landlord’s approval, if given, any potential assignee or sublessee otherwise approved by Landlord shall
assume all obligations of Tenant under this Lease and shall be jointly and severally liable with Tenant and any guarantor, if
required, for the payment of Rent and performance of all terms of this Lease. In connection with any Transfer, Tenant shall
provide Landlord with copies of all assignments, subleases and assumption instruments. Any and all profits realized by
Tenant (after deducting any costs incurred by Tenant) for any such sublease or assignment shall be assigned to the Landlord.
Tenant shall be prohibited from assigning or subleasing to existing tenants of the Building.
In the event that Landlord shall consent to a sublease or assignment under this Section, Tenant shall pay Landlord a
reasonable fee, not to exceed Five Hundred and NO/100 Dollars ($500.00), plus any out of pocket attorneys fee incurred by
Landlord in connection in connection with the transfer request and giving such consent.
20. LANDLORD'S OPTION TO RELOCATE TENANT. Landlord shall have the option, at any time, to relocate
Tenant, upon not less than sixty (60) days advance written notice by Landlord to Tenant, to any other location on the property
of which the Premises are located so long as the square footage of the Premises leased hereunder is not substantially reduced.
Rent shall not be changed because of the relocation of Tenant notwithstanding any increase in the square footage of the
Premises to which Tenant is relocated unless the increase in square footage is caused by Tenant's request for additional
space. In the event Landlord gives Tenant written notice of the relocation of Tenant after Tenant and Landlord have
commenced or completed the approved installation of partitioning or other improvements, Landlord shall furnish Tenant
with similar partitioning or other improvements of equal quality in the Premises to which Tenant is relocated. Landlord
shall pay expenses associated with relocation of existing telephones, existing office furniture, and existing equipment.
21. LIENS. Tenant shall keep the Premises free from any liens created by or through Tenant. Tenant shall indemnify and
hold Landlord harmless from liability from any such liens including, without limitation, liens arising from any Alterations.
Prior to undertaking any Tenant Improvements, Tenant shall procure a performance bond, at Tenant's cost, in favor of the
Landlord insuring 1 ½ times the value of any work or materials performed at the premises. If a lien is filed against the
Premises by any person claiming by, through or under Tenant, Tenant shall, upon request of Landlord, at Tenant’s expense,
immediately furnish to Landlord a bond in form and amount and issued by a surety satisfactory to Landlord, indemnifying
Landlord and the Premises against all liabilities, costs and expenses, including attorneys’ fees, which Landlord could
reasonably incur as a result of such lien(s).
22. DEFAULT. The following occurrences shall each be deemed an Event of Default by Tenant:
a. Failure To Pay. Tenant fails to pay Rent or other payments due under this Lease when due where such breach
continues for a period of three days following written notice by Landlord to Tenant.
b. Vacation/Abandonment. Tenant vacates the Premises (defined as an absence for at least 15 consecutive days
without prior notice to Landlord), or Tenant abandons the Premises (defined as an absence of five (5) days or more
while Tenant is in breach of some other term of this Lease). Tenant’s vacation or abandonment of the Premises
shall not be subject to any notice or right to cure.
c. Insolvency. Tenant becomes insolvent, voluntarily or involuntarily bankrupt, or a receiver, assignee or other
liquidating officer is appointed for Tenant’s business, provided that in the event of any involuntary bankruptcy or
other insolvency proceeding, the existence of such proceeding shall constitute an Event of Default only if such
proceeding is not dismissed or vacated within 60 days after its institution or commencement.
d. Levy or Execution. Tenant’s interest in this Lease or the Premises, or any part thereof, is taken by execution or
other process of law directed against Tenant, or is taken upon or subjected to any attachment by any creditor of
Tenant, if such attachment is not discharged within 15 days after being levied.
e. Other Non-Monetary Defaults. Tenant breaches any agreement, term or covenant of this Lease other than one
requiring the payment of money and not otherwise enumerated in this Section, and the breach continues for a
period of 30 days after notice by Landlord to Tenant of the breach.
f. Failure to Take Possession. Tenant fails to take possession of the Premises on the Commencement Date.
g. Notice periods. Any notice due to Tenant as set forth in this section shall be sufficient where served in the form
and manner set forth in the notice provisions of this Lease, or else as set forth in RCW 59.12 et. Seq. In the event
written notice is provided to the Tenant in the form and served in the manner authorized under RCW 59.12, the
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period for curing the applicable default under this Lease shall run concurrently with the applicable period described
in RCW 59.12.030.
23. REMEDIES. Landlord shall have the following remedies upon an Event of Default and the expiration of all applicable
cure periods. Landlord’s rights and remedies under this Lease shall be cumulative, and none shall exclude any other right or
remedy allowed by law:
a. Maintain the Lease. Maintain this Lease in full force and effect and recover the rent and other monetary charges
as they become due (including, but not limited to the recovery of all late charges, NSF fees and all other costs
incurred by Landlord due to Tenant’s default, including attorney fees), without terminating Tenant's right to
possession, irrespective of whether Tenant shall have abandoned the Premises. In the event Landlord elects to not
terminate the Lease, Landlord shall have the right to attempt to relet the Premises at such rent and upon such
conditions and for such a term, and to do all acts necessary to maintain or preserve the Premises as Landlord deems
reasonable and necessary without being deemed to have elected to terminate the Lease, including removal of all
persons and property from the Premises; such property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant. In the event any such reletting occurs, this Lease shall
terminate automatically upon the new tenant taking possession of the Premises. Notwithstanding that Landlord
fails to elect to terminate the Lease initially, Landlord at any time during the term of this Lease may elect to
terminate this Lease by virtue of such previous default of Tenant by giving written termination notice to Tenant.
b. Terminate the Lease. Terminate Tenant's right to possession by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such event, Landlord
shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default including,
without limitation thereto, the following:
(i) The cost of receiving possession of the Premises;
(ii) The expenses of re-letting, including necessary renovation and alteration of the Premises;
(iii) Reasonable attorneys' fees, any real estate commission actually paid, and that portion of the leasing
commission, if any, paid by Landlord applicable to the unexpired term of this Lease;
(iv) The worth at the time of award of any unpaid rent which had been earned at the time of such termination;
(v) The worth at the time of award of the amount by which the unpaid Rent which would have been earned
after termination until the time of award exceeds the amount of such rental loss that is proved could have been
reasonably avoided;
(vi) The worth at the time of award of the amount by which the unpaid Rent for the balance of the term after
the time of award exceeds the amount of such rental loss that is proved could be reasonably avoided;
(vii) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result
therefrom;
(viii) Any free rent, rental abatement, or any other form of rent concession granted to the Tenant.
(ix) At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted
from time to time by applicable state law.
Upon any such reentry Landlord shall have the right to make any reasonable repairs, alterations, or modification
to the Premises, which Landlord in its sole discretion deems are reasonable and necessary. As used in subsection
(iv), above, the "worth at the time of award" is computed by allowing interest at the rate of eight percent (8%) per
annum from the date of default. As used in subsections (v) and (vi) the "worth at the time of award" is computed
by discounting such amount at the discount rate of eight percent (8%). The term "Rent", as used in this section
shall be deemed to be and to mean the rent to be paid pursuant to Section 4 and all other monetary sums required
to be paid by Tenant pursuant to the terms of this Lease.
c. Nonpayment of Additional Rent. All costs which Tenant agrees to pay to Landlord pursuant to this Lease shall
in the event of nonpayment be treated as if they were payments of Rent, and Landlord shall have all the rights
herein provided for in case of nonpayment of Rent.
d. Failure to Remove Property. If Tenant fails to remove any of its property from the Premises at Landlord’s request
following an uncured Event of Default, Landlord may, at its option, remove and store the property at Tenant’s
expense and risk. If Tenant does not pay the storage cost within five (5) days of Landlord’s request, Landlord may,
at its option, have any or all of such property sold at public or private sale (and Landlord may become a purchaser
at such sale), in such manner as Landlord deems proper, without notice to Tenant. Landlord shall apply the
proceeds of such sale: (I) to the expense of such sale, including reasonable attorneys’ fees actually incurred; (ii)
to the payment of the costs or charges for storing such property; (iii) to the payment of any other sums of money
which may then be or thereafter become due Landlord from Tenant under any of the terms hereof; and (iv) the
balance, if any, to Tenant. Nothing in this Section shall limit Landlord’s right to sell Tenant’s personal property as
permitted by law to foreclose Landlord’s lien for unpaid rent.
It is acknowledged that notwithstanding the provisions of Section 27 of this Lease, the written notice required
under Section 23 hereof shall be sufficient if it is in the form and served in the method authorized for an unlawful
detainer notice under RCW 59.12, or, alternatively, if sent according to the methods for sending notice set forth in
Section 27.
e. Partial Payments. Acceptance by Landlord of partial payments after Tenant‘s Default shall not constitute a
complete cure of any default. Therefore, Landlord shall not be required to give additional notices to Tenant in
such case. Only paying all sums due and performance of all steps required shall cure defaults hereunder.
24. MORTGAGE SUBORDINATION AND ATTORNMENT. This Lease shall automatically be subordinate to any
mortgage or deed of trust created by Landlord which is now existing or hereafter placed upon the Premises including any
advances, interest, modifications, renewals, replacements or extensions (“Landlord’s Mortgage”), provided the holder of
any Landlord’s Mortgage or any person(s) acquiring the Premises at any sale or other proceeding under any such Landlord’s
Mortgage shall elect to continue this Lease in full force and effect. Tenant shall attorn to the holder of any Landlord’s
Mortgage or any person(s) acquiring the Premises at any sale or other proceeding under any Landlord’s Mortgage provided
such person(s) assume the obligations of Landlord under this Lease. Tenant shall promptly and in no event later than fifteen
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(15) days after request execute, acknowledge and deliver documents which the holder of any Landlord’s Mortgage may
reasonably require as further evidence of this subordination and attornment. Notwithstanding the foregoing, Tenant’s
obligations under this Section are conditioned on the holder of each of Landlord’s Mortgage and each person acquiring the
Premises at any sale or other proceeding under any such Landlord’s Mortgage not disturbing Tenant’s occupancy and other
rights under this Lease, so long as no uncured Event of Default exists.
25. NON-WAIVER. Landlord’s waiver of any breach of any term contained in this Lease shall not be deemed to be a
waiver of the same term for subsequent acts of Tenant. The acceptance by Landlord of Rent or other amounts due by Tenant
hereunder shall not be deemed to be a waiver of any breach by Tenant preceding such acceptance.
26. HOLDOVER. If Tenant shall, without the written consent of Landlord, hold over after the expiration or termination
of the Term, such tenancy shall be deemed to be on a month-to-month basis and may be terminated according to Washington
law. During such tenancy, Tenant agrees to pay to Landlord a pre-agreed rate for a month to month contract until separated
by one or both parties payable under this Lease, unless a different rate is agreed upon by Landlord. All other terms of the
Lease shall remain in effect.
27. NOTICES. Wherever under this Lease provision is made for any demand, notice or declaration of any kind, or where
it is deemed desirable or necessary by either party to give or serve any such notice, demand or declaration to the other party,
it shall be in writing and it shall be deemed delivered when served personally, upon delivery by an overnight delivery service
with confirmation of delivery, or forty-eight (48) hours after being deposited in the United States mail, certified or registered,
postage prepaid, addressed to the address set forth in section 1(h) or alternate addresses as specified by the parties in writing
from time to time.
28. COSTS AND ATTORNEYS’ FEES. If, by reason of any breach or default of Tenant in Tenant’s obligations under
the terms and conditions of this Lease, it shall become necessary or appropriate for Landlord to serve notice of Tenant’s
default on tenant, employ or consult with an attorney or collection agency, or otherwise take action to enforce or defend any
of Landlord’s rights or remedies arising under this Lease or otherwise at law, or to collect any sums due from Tenant, Tenant
agrees to pay all costs and fees so incurred by Landlord, including without limitation, service fees, transactional costs,
attorney’s fees or other costs. Further, if Tenant or Landlord engage the services of an attorney to bring any action for any
relief against the other, declaratory or otherwise, arising out of this Lease, including any suit by Landlord for the recovery
of Rent or other payments, or possession of the Premises, the losing party shall pay the prevailing party a reasonable sum
for attorneys’ fees and costs in such suit, in arbitration, at trial and on appeal.
29. ARBITRATION OF DISPUTES. Any dispute, controversy or claim arising out of, in connection with, or relating to
this Agreement, its interpretation, application, or the rights, duties or liabilities hereunder of either party, or any breach or
alleged breach hereof, which the Tenant and Landlord are unable to resolve between themselves, shall, upon the written
request of any party involved, be submitted to, and settled by binding arbitration in the city where the Premises is located or
as agreed by the parties, pursuant to the RCW 7.04A. Any award rendered in an arbitration initiated under this Section shall
be final, binding and conclusive upon the parties and a judgment thereon may be entered in the highest court of the forum,
state or federal, having jurisdiction. The expenses of the arbitration shall be borne equally by the parties to the arbitration,
and each party shall pay for and bear the cost of its own experts, evidence and counsel's fees, except as otherwise provided
in Section 28, above. Notwithstanding the foregoing, no dispute arising out of Tenant’s failure to pay Rent or any unlawful
detainer action shall be subject to arbitration.
30. ESTOPPEL CERTIFICATES. Tenant shall, from time to time, upon written request of Landlord, execute,
acknowledge and deliver to Landlord or its designee a written statement specifying the following, subject to any
modifications necessary to make such statements true and complete: (i) the date the Lease term commenced and the date it
expires; (ii) the amount of minimum monthly Rent and the date to which such Rent has been paid; (iii) that this Lease is in
full force and effect and has not been assigned, modified, supplemented or amended in any way; (iv) that this Lease
represents the entire agreement between the parties; (v) that all conditions under this Lease to be performed by Landlord
have been satisfied; (vi) that there are no existing claims, defenses or offsets which the Tenant has against the enforcement
of this Lease by Landlord; (vii) that no Rent has been paid more than one month in advance; and (viii) that no security has
been deposited with Landlord (or, if so, the amount thereof). Any such statement delivered pursuant to this Section may be
relied upon by a prospective purchaser of Landlord’s interest or assignee of any mortgage or new mortgagee of Landlord’s
interest in the Premises. If Tenant shall fail to respond within ten (10) days of receipt by Tenant of a written request by
Landlord as herein provided, Tenant shall be deemed to have given such certificate as above provided without modification
and shall be deemed to have admitted the accuracy of any information supplied by Landlord to a prospective purchaser or
mortgagee.
31. TRANSFER OF LANDLORD’S INTEREST. This Lease shall be assignable by Landlord without the consent of
Tenant. In the event of any transfer or transfers of Landlord’s interest in the Premises, other than a transfer for security
purposes only, upon the assumption of this Lease by the transferee, Landlord shall be automatically relieved of obligations
and liabilities accruing from and after the date of such transfer, except for any retained security deposit or prepaid rent, and
Tenant shall attorn to the transferee.
32. RIGHT TO PERFORM. If Tenant shall fail to timely pay any sum or perform any other act on its part to be performed
hereunder, Landlord may make any such payment or perform any such other act on Tenant’s part to be made or performed
as provided in this Lease. Tenant shall, on demand, reimburse Landlord for its expenses incurred in making such payment
or performance. Landlord shall (in addition to any other right or remedy of Landlord provided by law) have the same rights
and remedies in the event of the nonpayment of sums due under this Section as in the case of default by Tenant in the
payment of Rent.
33. HAZARDOUS MATERIAL. Landlord represents and warrants to Tenant that, to the best of Landlord’s knowledge,
there is no “Hazardous Material” (as defined below) on, in, or under the Premises as of the Commencement Date except as
otherwise disclosed to Tenant in writing before the execution of this Lease. If there is any Hazardous Material on, in, or
under the Premises as of the Commencement Date which has been or thereafter becomes unlawfully released by Landlord
through no fault of Tenant, then Landlord shall indemnify, defend and hold Tenant harmless from any and 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, incurred or suffered by Tenant either during or after the Lease term
as the result of such contamination.
Tenant shall not cause or permit any Hazardous Material to be brought upon, kept, or used in or about, or disposed of on the
Premises by Tenant, its agents, employees, contractors or invitees, except in strict compliance with all applicable federal,
state and local laws, regulations, codes and ordinances. If Tenant breaches the obligations stated in the preceding sentence,
then Tenant shall indemnify, defend and hold Landlord harmless from any and all claims, judgments, damages, penalties,
fines, costs, liabilities or losses including, without limitation, diminution in the value of the Premises, damages for the loss
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or restriction on use of rentable or usable space or of any amenity of the Premises, or elsewhere, damages arising from any
adverse impact on marketing of space at the Premises, and sums paid in settlement of claims, attorneys’ fees, consultant fees
and expert fees incurred or suffered by Landlord either during or after the Lease term. These indemnifications by Landlord
and Tenant include, without limitation, costs incurred in connection with any investigation of site conditions or any clean-up,
remedial, removal or restoration work, whether or not required by any federal, state or local governmental agency or political
subdivision, because of Hazardous Material present in the Premises, or in soil or ground water on or under the Premises.
Tenant shall immediately notify Landlord of any inquiry, investigation or notice that Tenant may receive from any third
party regarding the actual or suspected presence of Hazardous Material on the Premises.
Without limiting the foregoing, if the presence of any Hazardous Material brought upon, kept or used in or about the Premises
by Tenant, its agents, employees, contractors or invitees, results in any unlawful release of Hazardous Materials on the
Premises or any other property, Tenant shall promptly take all actions, at its sole expense, as are necessary to return the
Premises or any other property, to the condition existing prior to the release of any such Hazardous Material, and shall
defend, indemnify and hold Landlord harmless in accordance with the provisions of the preceding paragraph, provided that
Landlord’s approval of such actions shall first be obtained, which approval may be withheld at Landlord’s sole discretion.
As used herein, the term “Hazardous Material” means any hazardous, dangerous, toxic or harmful substance, material or
waste including biomedical waste which is or becomes regulated by any local governmental authority, the State of
Washington or the United States Government, due to its potential harm to the health, safety or welfare of humans or the
environment. The provisions of this Section 33 shall survive expiration or termination of this Lease.
34. QUIET ENJOYMENT. So long as Tenant pays the Rent and performs all of its obligations in this Lease, Tenant’s
possession of the Premises will not be disturbed by Landlord or anyone claiming by, through or under Landlord, or by the
holders of any Landlord’s Mortgage or any successor thereto.
35. GENERAL.
a. Heirs and Assigns. This Lease shall apply to and be binding upon Landlord and Tenant and their respective heirs,
executors, administrators, successors and assigns.
b. Brokers’ Fees. Tenant represents and warrants to Landlord that it has not engaged any broker, finder or other
person who would be entitled to any commission or fees for the negotiation, execution, or delivery of this Lease
other than Rosen-Harbottle Commercial Real Estate. Tenant shall indemnify and hold Landlord harmless against
any loss, cost, liability or expense incurred by Landlord as a result of any claim asserted by any other broker, finder
or other person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf
of Tenant. This subparagraph shall not apply to brokers with whom Landlord has an express written brokerage
agreement.
c. Agency. At the signing of this Agreement, Rosen-Harbottle Commercial Real Estate (“RHCRE”) represented the
Landlord and the Tenant was not represented. If Tenant’s Licensee and Landlord’s agent are affiliated with the
same Broker, then both Landlord and Tenant confirm their consent to that Broker acting as a dual agent. If Tenant’s
Licensee and Landlord’s agent are the same salesperson representing both parties, then both Landlord and Tenant
confirm their consent to that salesperson and his/her Broker acting as dual agents. Landlord and Tenant confirm
receipt of the pamphlet entitled “The Law of Real Estate Agency.” The parties acknowledge that the principal
owner of RHCRE is Stanley G. Rosen, who directly or indirectly may be an owner of Landlord. The parties also
acknowledge that other employees and/or agents of RHCRE may directly or indirectly be an owner and/or
manager of Landlord. Notwithstanding any dual agency that may exist, Tenant represents and warrants that it is
not relying on the advice or counsel of RHCRE in entering into this Lease, and that it has had the opportunity to
review this document with its own legal counsel.
d. Entire Agreement. This Lease contains all of the covenants and agreements between Landlord and Tenant relating
to the Premises. No prior or contemporaneous agreements or understanding pertaining to the Lease shall be valid
or of any force or effect and the covenants and agreements of this Lease shall not be altered, modified or added to
except in writing signed by Landlord and Tenant.
e. Severability/Survival. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no way
affect, impair or invalidate any other provision of this Lease. The indemnification, hold harmless, and all remedial
provisions in this lease, including but not limited to those limiting damages and providing for the recovery of costs
and attorneys fees, shall survive termination of this Lease.
f. Force Majeure. Time periods for either party’s performance under any provisions of this Lease (excluding
payment of Rent) shall be extended for periods of time during which the party’s performance is prevented due to
circumstances beyond such party’s control, including without limitation, fires, floods, earthquakes, lockouts,
strikes, embargoes, governmental regulations, acts of God, public enemy, war or other strife.
g. Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of
Washington.
h. Memorandum of Lease. This Lease shall not be recorded.
i. Submission of Lease Form Not an Offer. One party’s submission of this Lease to the other for review shall not
constitute an offer to lease the Premises. This Lease shall not become effective and binding upon Landlord and
Tenant until it has been fully signed by both Landlord and Tenant.
j. No Light, Air or View Easement. Tenant has not been granted an easement or other right for light, air or view
to or from the Premises. Any diminution or shutting off of light, air or view by any structure which may be erected
on or adjacent to the Building shall in no way effect this Lease or the obligations of Tenant hereunder or impose
any liability on Landlord.
k. Authority of Parties. Any individual signing this Lease on behalf of an entity represents and warrants to the other
that such individual has authority to do so and, upon such individual’s execution, that this Lease shall be binding
upon and enforceable against the party on behalf of whom such individual is signing.
l. Time of Essence. Time is of the essence.
m. Captions/Exhibits/Attachments/Terms.
(1) The captions of the sections of this Lease are for convenience only and shall not be deemed to be relevant
in resolving any question of interpretation or construction of such section.
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(2) The exhibits, addenda and schedules, if any, attached hereto are deemed by attachment to constitute part
of this Lease and are incorporated herein.
(3) The words "Landlord" and "Tenant", as used herein, shall include the plural as well as the singular.
Words used in neutral gender include the masculine and feminine and words in the masculine or feminine
gender include the other gender and the neutral. Subject to the provisions of this Section 18 limiting
Landlord’s liability in the event of the sale of the Property, if there be more than one Landlord or Tenant,
the obligations hereunder imposed upon Landlord or Tenant shall be joint and several. If the Tenants are
husband and wife, the obligations shall extend individually to their sole and separate property as well as
to their community property.
n. Merger. 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 Landlord, terminate all or any existing subtenancies, or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such subtenancies.
o. Financing. Tenant shall not execute any document, including without limitation security agreements and/or
financial statements covering fixtures installed by Tenant, purporting to affect the Premises or any other property
of which the Premises are a part, any financial statement, without prior written consent of Landlord, which may be
withheld or conditioned in Landlord's sole discretion. However, Tenant can grant liens on its trade fixtures and
inventory so long as the lienholder agrees to repair and restore any damage to the Premises and Property caused
by entry into the Premises and/or removal of the trade fixtures and inventory.
p. Prorations. All prorations shall be on the basis of a thirty (30) day month.
q. Binding Lease. This Agreement shall become a binding agreement when it is mutually executed by both the
Landlord and the Tenant. The Landlord is under no obligation to execute this document, and all space in the
property is subject to prior leasing by other tenants.
r. Acknowledgement. The failure to properly acknowledge this Lease shall not be a defense to any terms or
conditions of the Lease; any such rights of Tenant are expressly waived and released for and in consideration of
the terms set forth herein.
s. Facsimile/Electronic copies/Counterparts. Executed, fax or electronic copies of this agreement, amendments
and modifications are valid. This Lease may be executed in counterparts.
t. Waiver of Jury Trial. The parties hereto hereby waive their right to a jury trial in any lawsuit brought by either
of them related to performance of or default under this Agreement, including any claim, counter-claim or cross-
claim.
u. Landlord’s Liability Limitations. Landlord’s liability shall be non-recourse, and strictly limited to the assets of
the Landlord in the Premises, Building and the Property. Tenant, its successors and assigns, hereby waive all rights
to proceed against any other assets of Landlord as well as the assets of the partners, members or co-tenants, or the
individuals acting for the Landlord, except to the extent of their ownership in the Premises and the Property). As
used in this paragraph, the term “Landlord” shall mean only the Owner or Owners at the time in question of the
Fee Title, or its interest in a Ground Lease of the Premises, and in the event of any transfer of such Title or interest,
the Landlord named herein (and in cases of any subsequent transfers, the then Grantor) shall be relieved from and
after the date of such transfer from any further obligations hereunder; provided that the Grantee assumes the
Landlord’s or the then Grantor’s obligations under this Lease in writing any funds in the hands of Landlord or the
then Grantor at the time of such transfer, in which Tenant has an interest, shall be delivered to the Grantee.
36. EXHIBITS. The following exhibits are made a part of this Lease:
Exhibit A Legal Description
Exhibit B Floor Plan Outline of the Premises
Exhibit C Tenant Improvement Schedule
Exhibit D Rules and Regulations
Exhibit E Signage Criteria
Addendum One Additional Lease Terms
THE TERMS OF THE EXHIBITS ARE INCORPORATED INTO THE LEASE. CAPITALIZED TERMS USED IN THE
EXHIBITS SHALL HAVE THE MEANING GIVEN TO THEM IN THE LEASE.
37. EARLY POSSESSION RIGHTS. Notwithstanding anything to the contrary herein but subject to applicable law,
Tenant shall have the right to occupy the Premises upon Lease execution; and notwithstanding such early possession of the
Premises by Tenant, Tenant shall begin paying Base Rent per Section 1(d) of this Lease. Landlord and Tenant agree that all
other terms and conditions of the Lease shall be in full force and effect as of the first date of Tenant's occupancy of the
Premises, including but not limited to the obligation to obtain insurance and pay Tenant’s own utilities. Tenant shall begin
paying Operating Costs on August 6, 2014. The early occupancy period shall not advance the Commencement Date or the
Termination Date.
In the event Tenant takes possession of the Premises prior to completion of any construction, Tenant agrees to hold Landlord
harmless from any and all claims for damages to persons, goods, equipment or inconvenience. Furthermore, Tenant
acknowledges that occupancy prior to completion of construction may limit Tenant’s use of some or all of the Premises until
such construction is completed. Tenant agrees to observe all applicable safety rules and regulations and to cooperate with
construction efforts in the Premises, which cooperation shall be at its own cost and expense.
LANDLORD, LANDLORD’S AGENT AND TENANT’S LICENSEE HAVE MADE NO REPRESENTATIONS OR
WARRANTIES CONCERNING THE PREMISES, THE MEANING OF THE TERMS AND CONDITIONS OF THIS
LEASE, LANDLORD’S OR TENANT’S FINANCIAL STANDING, ZONING, COMPLIANCE OF THE PREMISES
WITH APPLICABLE LAWS, SERVICE OR CAPACITY OF UTILITIES, OPERATING EXPENSES, OR
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HAZARDOUS MATERIALS EXCEPT AS EXPRESSLY SET FORTH HEREIN. TENANT IS ADVISED TO SEEK
INDEPENDENT LEGAL ADVICE ON THESE AND OTHER MATTERS ARISING UNDER THIS LEASE.
IN WITNESS WHEREOF this Lease has been executed the date and year first above written.
Landlord:
RH Smokey Point Shopping Center Associates,
LLC
a WA limited liability company
By:
Stan Rosen, Manager
Tenant : City of Arlington
a WA municipal corporation
By:
Mayor Barbara Tolbert
Title: Mayor, City of Arlington
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NOTARY – LANDLORD
STATE OF WASHINGTON )
) ss:
COUNTY OF KING )
On this day personally appeared before me Stanley G. Rosen who acknowledged that he is the Manager of the WA
limited liability company named above, who upon oath declared his authorization to execute the within and foregoing instrument
as the free and voluntary act and deed of said entity, for the uses and purposes therein mentioned.
Given under my hand official seal this ________________ day of _____________________________, 2014.
(Seal or stamp) Signature of Notary:
Name of Notary:
Commission Expires:
TENANT NOTARY – ENTITY
STATE OF WASHINGTON )
) ss:
COUNTY OF )
On this day personally appeared before me Mayor Barbara Tolbert who acknowledged that he/she is the Mayor of the
City of Arlington of the WA municipal corporation named above, who upon oath declared his/her authorization to execute the
within and foregoing instrument as the free and voluntary act and deed of said entity, for the uses and purposes therein mentioned.
Given under my hand official seal this _____________ day of ______________________________, 2014.
(Seal or stamp) Signature of Notary:
Name of Notary:
Commission Expires:
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EXHIBIT A
LEGAL DESCRIPTION
Continues next page.
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EXHIBIT B
OUTLINE OF PREMISES
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EXHIBIT C
TENANT IMPROVEMENT SCHEDULE
LANDLORD’S AND TENANT’S ARCHITECTURAL AND CONSTRUCTION WORK
I. GENERAL This Exhibit applies to all initial improvements to the Premises, as well as other work performed by
or for Tenant in or around the Premises, and constitutes supplemental provisions of the Lease.
II. DESCRIPTION OF LANDLORD’S WORK
A. Unless expressly stated herein, Landlord shall not be responsible for making any changes, modifications or
alterations to the Premises, and Tenant shall take the Premises “as-is”. There shall not be any “Landlord’s Work”.
III. DESCRIPTION OF AND REQUIREMENTS OF TENANT’S WORK
A. All improvements, alterations and modifications of the Premises shall be Tenant’s Work. In any event, all work
related to Tenant’s signs, the design, installation, wiring and related conduits shall be Tenant’s Work and shall be
further subject also to the sign criteria in this Lease.
B. All of Tenant’s Work shall be at Tenant’s sole risk, cost and expense and shall not damage the building, common
areas or Premises or any part thereof, or cause injury to persons. All of Tenant’s Work shall be done in accordance
with all applicable codes, statutes, regulations and ordinances, and shall be done in conformance with this exhibit
and the requirements for Alterations as set forth in the attached Lease.
C. ALL ROOF PENETRATION SHALL BE SEALED BY THE LANDLORD’S APPROVED ROOFER AND
SHALL BE PERFORMED ONLY AFTER THE Landlord HAS GIVEN CONSENT, which consent shall in part
be conditioned upon the Tenant’s plans including materials acceptable to the Landlord and to include the roof top
curbs to spread the weight of the equipment being installed in order to prevent damage to the roof. All costs of
Landlord’s roofer shall be paid by Tenant.
IV. CONSTRUCTION SPECIFICATIONS
The following provisions set forth the requirements that Tenant must follow in connection with all construction
work to be performed by Tenant in the Premises and the submission of Tenant’s plans and specifications of all such
construction work to Landlord for approval:
A. All plans, diagrams, schedules, specifications and other data required to be furnished by Tenant under this exhibit
must be submitted to Landlord complete, sufficient to obtain a building permit, and ready for Landlord’s
consideration and final approval within fifteen (15) days after the execution of this Lease (or at such other time as
may be specified in this Exhibit). All such plans shall be prepared by licensed professionals employed by Tenant
at its sole costs and expense. Tenant shall reimburse Landlord for any loss or extra cost which may result to
Landlord by reason of failure on the part of Tenant to submit any such plans, diagrams, schedules, specifications
and/or other data within said period of time. In no event shall Tenant’s obligation to pay rent and other charges
under the Lease be delayed due to any delay in completion of work required hereunder.
B. Tenant shall secure Landlord’s written approval of all designs, plans, specifications, contracts and contractors for
work to be performed by Tenant before beginning the work (including compliance with Construction
Specifications set forth herein), and shall secure all necessary licenses and permits to be used in performing the
work. Tenant’s finished work shall be subject to Landlord’s approval and acceptance, which shall be a condition
to any reimbursement hereinafter provided. After completion of such work, at its sole cost and expense, Tenant
promptly shall obtain a permanent Certificate of Occupancy and all other approvals required by Tenant to use and
occupy the Premises.
C. All architectural, engineering and construction fees incurred by Landlord relating to changes in Landlord’s design
or requirements necessitated by complying with Tenant’s requests shall be paid for by Tenant on demand. At
Landlord’s sole option, Landlord may require Tenant to pay for such work, architect and engineering fees in
advance on demand.
D. Prior to the commencement of Tenant’s Work, Tenant shall submit to Landlord for Landlord’s approval a list of
contractors and/or subcontractors who will perform Tenant’s Work and execute a Work Letter Agreement in a
form to be provided by the Landlord. Tenant or Tenant’s contractors or subcontractors shall be required to obtain
from Landlord permission for hoisting materials or for using any area outside the Premises for storage, handling
or moving materials and equipment of for parking any vehicles or equipment or for the location of any field office
of facilities for its personnel. To the end that there shall be no labor dispute that would interfere with the
construction, completion or operation of the Property or with any other work being carried on therein, Tenant shall
engage the services of only such contractors and subcontractors as will work in harmony with each other, with
those of Landlord and with any others then working on the Property. Tenant must secure Landlord’s prior approval
of its contractor before Tenant’s contractor shall be allowed on the job site.
E. Tenant and/or Tenant’s contractors and subcontractors shall be required to provide, in addition to the insurance
required to be maintained by Tenant pursuant to the Lease, the following types of insurance and the following
minimum amounts naming Landlord and any other persons having an interest in the Building or Property as
additional insureds as their interest may appear, issued by companies approved by Landlord:
1. Worker’s Compensation coverage with limits of at least $500,000.00 for the employer’s liability coverage
thereunder;
2. Builder’s Risk-Completed Value Fire and extended coverage damage to the construction and
improvements to be made by Tenant in amounts at least equal to the estimated completed cost of said
construction and improvements with 100% coinsurance protection;
3. Automobile liability coverage with bodily injury limits of at least $500,000.00 per person, $1,000,000.00
per accident and $500,000.00 accident for property damage;
4. Payment and Performance bonds for 100% of the value of work to be accomplished. All bonds shall be
dual or multiple obligee bonds insuring to the benefit of Landlord, Tenant and other persons as Landlord shall
require.
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F. Original or duplicate policies for all the foregoing insurance shall be delivered to Landlord before Tenant’s Work
is started and before any contractor’s equipment is moved on to any part of the Property. In all other respects, the
insurance coverage above mentioned shall comply with the provisions of this Lease. Landlord’s acquiescence to
commencement of construction prior to Tenant’s satisfaction of 1-4 above shall not be deemed to be a waiver of
the continuing obligation of Tenant to provide such coverage.
G. Tenant hereby assumes any and all liability, including any arising out of statutory or common law for any and all
injuries to or death of any and all persons, including Tenant’s contractors and subcontractors and their employees
and any liability for any and all damage to property caused by, or resulting from, or arising out of any act or
omission on the part of the Tenant, its contractors and its subcontractors or employees in the performance of
Tenant’s Work and agrees to defend, indemnify and hold harmless Landlord from and against all damages, costs,
liabilities, losses and/or expenses (including legal fees and expenses) which Landlord may incur, suffer or pay as
the result of claims or law suit due to, because of, or arising out of any and all such injuries, death and /or damage.
Tenant agrees to insure the foregoing assumed contractual liability in its liability policies and the original or
duplicate original of said policy that Tenant will deliver to Landlord shall expressly include said contractual
liability coverage.
H. Tenant’s Work shall be coordinated with Landlord’s Work, if any, and the other work being performed by Landlord
and other tenants in the Building or Property so that Tenant’s Work will not interfere with or delay the completion
of any other work in the Building or Property. If the scheduling of Landlord’s Work requires the immediate
performance of Tenant’s Work, Landlord shall have the right to notify Tenant ,in writing, and if Tenant’s Work is
not sufficiently completed for the Landlord’s purposes within a reasonable time after Landlord’s notification,
Landlord shall have the right to notify Tenant, in writing, of Tenant’s failure to complete work within said time,
and thereupon Landlord, at its option, shall have the right to cause said work to be done and Tenant shall reimburse
Landlord on demand for all costs of planning and performing such work.
I. Landlord shall not be obligated to perform any work it may agree to do for Tenant without written authorization
by Tenant together with payment by Tenant in advance for such work.
J. It shall be the Tenant’s responsibility to cause each of Tenant’s contractors and subcontractors to maintain
continuous protection of the Premises and any premises adjacent to the Premises in such a manner as to prevent
any damage to persons or Landlord’s Work or said premises by reason of the performance of Tenant’s Work. Each
contractor and subcontractor shall properly protect Tenant’s Work with lights, guard rails, and barricades and shall
secure all parts of Landlord’s Work and the Premises against accident, storm and any other hazard. However, no
barricade or other protective device shall extend more than four (4) feet beyond Premises, unless reasonably
required by the type of work or circumstances.
K. Contractors and/or subcontractors participating in the Tenant’s Work shall be required to remove and dispose of
at least once a week and more frequently as Landlord may direct, all debris and rubbish caused by, or resulting
from the work and upon completion, to remove all temporary structures, surplus materials, debris and rubbish of
whatever kind remaining on any part of the Property or in proximity thereto which was brought in or created by
the performance of Tenant’s Work. If at any time, Tenant’s contractors and subcontractors shall neglect, refuse or
fail to remove any debris, rubbish, surplus materials or temporary structures within twenty-four (24) hours after
written notice to Tenant, Landlord may remove the same at Tenant’s expense.
L. Upon Completion of Tenant’s Work, Tenant shall furnish Landlord, without cost to Landlord, one (1) set of
transparent “As-Built” drawings of the Premises.
M. Any approval or consent by Landlord shall in no way obligate Landlord in any manner whatsoever in respect to
the finish design and/or construction by Tenant. Any deficiency in design or construction, although same had prior
approval of Landlord, shall be solely the responsibility of the Tenant. All construction, material and equipment
furnished by Tenant shall be new and all work shall be done in a first-class workmanlike manner, in full compliance
with all applicable codes, laws and governmental requirements.
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EXHIBIT D
RULES AND REGULATIONS
1. REFUSE: If Tenant's garbage is of a deteriorating nature, creating offensive odors, Tenant shall utilize and maintain
at its cost and expense refrigerated facilities as required by Landlord.
2. OVERLOADING: Tenant shall not overload any floor of the Premises in excess of one hundred (100) pounds per
square foot.
3. SUSPENSION: Tenant shall not have or suspend from any wall or ceiling or roof, or any other part of the Property,
any equipment, fixtures, signs or displays which are not first authorized by Landlord.
4. ELECTRICAL: If Tenant requires any electrical equipment which might overload the electrical facilities in the
Premises, Tenant shall submit to Landlord plans and specifications for works required to install and supply additional
electrical facilities or equipment to prevent such overloading, and shall obtain Landlord's written approval to perform
such works, which shall meet all the applicable regulations or requirements of any government or other competent
authority, the Association of Insurance Underwriters and Landlord's insurers, all at the sole cost and expense of Tenant.
5. PLUMBING: No plumbing facilities shall be used for any purpose other than that for which they were designed, and
no foreign substance of any kind shall be thrown therein, and the expense of any breakage, stoppage or damage resulting
from a violation of this provision by Tenant or by any person for whom Tenant is responsible shall be borne by Tenant.
No garbage disposals shall be installed by Tenant without the prior written approval of Landlord. If approved, disposals
shall be maintained by Tenant. In compliance with Municipal requirements, washrooms shall be available for use by
customers upon request.
6. HVAC OPERATION: Tenant shall operate or permit to be operated its own heating, ventilating or air-conditioning
equipment in such a manner that there will be no direct or indirect appropriation of heating or cooling from other
portions of the Property (except to the extent that such appropriation may be unavoidable). If Landlord obtains Tenant's
HVAC maintenance and repair contract, Tenant will reimburse Landlord for its pro rata share. Tenant shall not leave
open any doors or windows to the exterior of the Property which would adversely affect the performance of any heating,
ventilating or air-conditioning equipment in the Property.
7. NO SOLICITATION: Tenant, or Tenant's employees and agents, shall not solicit business in the Parking Areas or
other Common Areas and shall not distribute any handbills or other advertising matter therein.
8. PARKING:
a. Tenant shall furnish Landlord with automobile license plate numbers of all motor vehicles of Tenant and its
employees within five (5) days after taking possession of the Premises and shall thereafter notify Landlord of any
changes or additions to such numbers within five (5) days after occurrence.
b. Landlord may designate a portion of the Parking Areas for use by tenants and employees and in the event Tenant
and/or its employees park their vehicles in other portions of the Parking Areas, Landlord may charge Tenant Ten
Dollars ($10.00) per vehicles for each day or portion thereof that such violation occurs or may arrange to have
such vehicles towed away at the cost of the Tenant and/or its employees.
c. In no event shall Tenant, its customers and invitees use of parking exceed Tenant's pro-rata share of available
parking. Pro-rata share is defined as Tenant's rentable square feet divided by the rentable square feet of the
complex, multiplied times the total number of available parking stalls.
9. DELIVERY: Tenant shall remove all delivered merchandise and other delivered items from the loading area or other
Common Areas immediately upon such delivery or shall pay such costs as may be determined by Landlord for any
hourly, daily or weekly temporary storage permitted by Landlord.
10. PESTS: Should the Premises become infested with rodents, vermin or the like, Tenant shall forthwith remedy the same
and shall use, at Tenant’s costs, such pest extermination contractor as Landlord shall direct and at such intervals as
Landlord may require as being necessary by reason of the conditions in the Premises.
11. NOTICE OF ACCIDENTS, DEFECTS: Tenant shall give immediate notice to Landlord in case of fire or accident in
the Premises or of defects therein or to any fixtures or equipment thereon.
12. EMERGENCY CONTACTS: Tenant shall provide Landlord with the names, addresses and telephone numbers of two
(2) authorized employees of Tenant who may be contacted by Landlord in the event of an emergency relative to the
Premises.
13. PERMITS, LICENSES: Tenant alone shall be responsible for obtaining, from the appropriate governmental authority
or other regulatory body having jurisdiction, whatever permits, licenses or approvals as may be necessary for the
operation of its business, the whole to the exoneration of Landlord.
14. TENANT'S WORK: Any work to be performed in the Premises by Tenant or its contractors shall be first approved and
then made strictly in accordance with the rules and regulations of Landlord from time to time in respect of work by
tenants within the Property.
15. FURTHER RULES AND REGULATIONS: For the general benefit and welfare of the Property and tenants therein,
Landlord may amend these rules and regulations, by alteration or addition, and such amended rules and regulations
shall be binding on Tenant.
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EXHIBIT E
SIGNAGE CRITERIA
This Exhibit is a continuation of that certain Lease Agreement by and between RH Smokey Point Associates, LLC, a
WA limited liability company (hereinafter referred to as the "Landlord") and City of Arlington, a WA municipal
corporation (hereinafter referred to as the "Tenant") dated July 14, 2014 and by this reference shall become a part of
that Lease Agreement.
TENANT SIGN CRITERIA
These criteria have been established for the purpose of controlling the size, design and location of all exterior signage,
so as to enhance the Center’s image and create a mutual benefit to all Tenants. Conformance will be strictly enforced,
and any installed nonconforming or unapproved signs shall be removed or brought into conformance at the expense
of Tenant.
1.0 GENERAL REQUIREMENTS
1.1 Tenant shall submit or cause to be submitted to Landlord for approval before fabrication two (2)
prints of detailed drawings indicating the location, size, layout, design and color of all proposed signs which
are the subject of this exhibit (both interior and exterior ), including all lettering and/or graphics. Drawings
shall include a front building elevation, appropriately scaled and illustrating at least the proposed location of
the sign on the front of the building (and interior if applicable). Construction and installation drawings shall
be complete and address the specific conditions of the building for which the signage is designed. The
drawings shall illustrate the full extent of the proposed work including any and all alterations(s) to the existing
building.
1.2 Landlord approval of sign shop drawing(s) submittal is required prior to permitting, fabrication, or
installation, and prior to any modifications thereof for any sign which is the subject of this exhibit.
1.3 All permits for signs and their installation shall be obtained by the Tenant or Tenant's representative.
1.4 All signs shall be assembled, fabricated, constructed and/or installed at Tenant's sole cost and
expense by a qualified (as determined by Landlord), dully licensed and bonded signage contractor. All
electrical work required for the complete installation and energizing of the signage shall be performed by a
qualified, dully licensed and bonded electrician.
1.5 Tenant shall be responsible for the fulfillment of all requirements of these criteria, and shall submit
samples of sign materials, if requested by Landlord.
1.6 Signage contractors selected by Tenant as provided in Paragraph 1.4 shall submit a written warranty
against defects in materials and workmanship for all aspects of the work for a period of twelve (12) months
from the date the work is accepted by Landlord in accordance with Paragraph 1.2. Landlord shall, along with
Tenant, be named by the signage contractor as joint warrantee. In addition, Tenant shall obtain from its
signage contractor a release and waiver of all lien rights with respect to the work performed. The release and
waiver of lien rights document shall be in a form acceptable to Landlord.
1.7 After the initial installation of Tenant’s storefront sign as approved in writing by Landlord in
accordance with these provisions, Landlord reserves the right to require that Tenant, once during the Term,
modify or replace such sign (and/or relocate to an alternate location over Tenant’s Premises) in order to
comply with any new sign criteria developed by Landlord, at Landlord’s expense.
2.0 LOCATION OF EXTERIOR TENANT IDENTIFICATION SIGN
2.1 Tenant will be permitted to install one illuminated "fascia sign" on the storefront as approved by the
Landlord. The maximum projection of the sign from the face of the canopy shall be five inches (5").
3.0 DESIGN REQUIREMENTS
3.1 Wording of all signs shall not include the product sold except as part of Tenant's trade name or
insignia unless approved by Landlord.
3.2 Tenant identification signs shall be designed in a manner compatible with and complimentary to
adjacent storefronts and the overall design concept of the shopping center.
3.3 Fascia signs shall conform to the following requirements:
A. Signs shall be made up of individually illuminated "channellume" style letters with "plex"
faces and 5" dark bronze returns mounted on a continuous raceway. Raceway shall be
painted to match building fascia color. Sign boxes and cans will not be permitted.
B. The maximum length of the sign shall not exceed seventy-five percent (75%) of the width
of the storefront.
C. The maximum height for letters in the body of the sign shall not exceed twenty-four inches
(24") for one line of copy or fourteen inches (14”) each for two lines of copy, for an overall
height of thirty inches (30”) for two lines of copy.
D. Illumination shall be with white neon or the color of the "plex" letter face.
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E. Tenant's sign color shall be different from the sign colors immediately adjacent and to
either side of Tenant's sign, unless otherwise permitted by Landlord.
3.4 Window graphic display:
Tenant may suspend display window graphics inside storefront window. Display graphics may not be applied
to storefront window. Maximum allowable area of signage is subject to Landlord’s review and approval.
Generally, the overall graphic display area shall not exceed twenty percent (20%) of storefront glass area.
Final written approval of signage must be given in writing by Landlord prior to installation, or said signs may
be immediately removed and disposed of at the cost of the Tenant.
4.0 ELECTRICAL SIGNAGE
4.1 No animated, flashing, audible, revolving or other signs that create the illusion of animation will be
permitted.
4.2 Exposed lamps or tubing may be suspended behind the plane of the storefront glazing. Such sign
designs shall incorporate lamps or tubing having a low level of lumen output and shall be subject to the
approval of the Landlord. Exposed neon tubing shall be limited to 30 millilamps. Exposed incandescent
lamps shall be limited to 10 watts each.
4.3 All signs shall bear the UL label and their installation shall comply with all applicable building and
electrical codes.
4.4 No exposed raceways, crossovers, conduits or other electrical appurtenances will be permitted.
4.5 All cabinets, conductors, transformers and other equipment shall be concealed. Visible fasteners
will not be permitted.
4.6 Electrical service to all signs shall be on Tenant's meter serving the Leased Premises. All signage is
restricted to a single twenty (20) amp, one hundred twenty (120) volt circuit for every twenty (20) lineal feet
of store frontage. If Tenant's sign design requires more power and/or additional circuits, Tenant must obtain
Landlord's prior written approval.
5.0 CONSTRUCTION REQUIREMENTS
5.1 Location of all openings for conduit and sleeves for signs in building walls shall be indicated by the
Sign Contractor on drawings submitted for approval to the Landlord.
5.2 All penetrations of the building required for sign installation shall be neatly sealed in a watertight
manner. No work of any nature will be allowed on the roof of the building without the specific written
permission from Landlord. If Tenant proposes any work that will affect the roof of the building in any way,
Landlord, at its sole discretion, may require Tenant to hire Landlord's designated roofing contractor to
perform that portion of the work affecting the roof of the building.
5.3 No labels will be permitted on the exposed surface of signs except those required by local ordinances
which shall be applied in an inconspicuous location.
5.4 All exterior signs, bolts, fastenings and clips shall be of enameling iron with porcelain enamel finish,
stainless steel, aluminum, brass or bronze. No black iron materials of any type shall be permitted.
5.5 All metal in letters shall be fabricated using full-welded construction.
5.6 Acrycap retainers used at the perimeter of sign letter faces shall match in color and finish the face
or the sides of the sign.
5.7 Tenant's Sign Contractor shall repair any damage caused by his work. If so directed by Landlord,
Tenant shall obtain from Landlord's designated building contractor written confirmation that the work
proposed by Tenant will not in any way alter or invalidate either in whole or in part any provision(s) of the
general construction warranty for the building.
5.8 Tenant shall be fully responsible for the operations of Tenant's Sign Contractors.
5.9 In the event of a sign removal or exchange, all wall openings and building penetrations shall be
restored to the original condition.
5.10 Upon completion of the signage installation and prior to Tenant's tender of final payment to Tenant's
signage contractor, Tenant shall notify Landlord in writing that the work has been completed and accepted
by Tenant. Landlord shall promptly inspect the work for compliance with the Sign Criteria and approved
plans. Upon its inspection, Landlord shall notify Tenant of its acceptance or rejection of the work including
any deficiencies Tenant shall be required to promptly remedy to Landlord's satisfaction.
6.0 ADDITIONAL SIGNAGE (Window Signs)
6.1 Tenant shall be permitted to place upon each entrance not more than one hundred forty-four (144)
square inches of gold leaf (or other material approved by Landlord), or decal application with lettering not to
exceed two inches (2") in height, indicating hours of business, emergency telephone numbers, logos or
manufacturer's decals.
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6.2 Rear door signs shall be mounted on rear service door with adhesive and four (4) sheet metal screws.
It shall contain only the name and space number of the shop. Fabricate sign from 1/8" X 8" X 16" plastic
with 2" high incised letters. Color of sign shall be dark brown with gold letters.
6.3 Address numbers are required by the U.S. Post Office and shall be affixed to the glass transom over
the entry door, centered on the door. Landlord shall provide numbers.
6.4 Except as provided herein, no advertising placards, banners, pennants, names, insignia trademarks,
or other descriptive materials shall be affixed or maintained upon the glass panes or supports of the windows
and doors, or upon the exterior of the building or storefront, or within two (2) feet of the storefront lease line.
6.5 No temporary signs shall be allowed to be placed on the tenant storefront, in the project common
areas, or in the public right of way, including, but not limited to, banners, promotional signs, sandwich boards,
etc. Landlord shall have the right, without any notice to Tenant, to remove and dispose of any sandwich
boards or other such signs.
6.6 Tenant’s failure to comply with any provision outlined in this Exhibit, shall be deemed an event of
default. If Tenant shall not cure such default after written notice thereof to Tenant; provided, however, that
Landlord shall be obligated to provide Tenant such written notice of default or failure only a maximum of
two (2) times during the Lease term, and in the event of two (2) such defaults by Tenant during the lease
term., the next default shall be an automatic default hereunder without any further obligations on the part of
Landlord to provide notice thereof.
6.7 See Storefront Window Signs on Exhibit E-1 for sign location and size.
7.0 PROHIBITED SIGNS
7.1 Prohibited signs include, but are not limited to:
A. Vacuum formed or injection-molded plastic signs
B. Cabinet or “can” signs with illuminated translucent backgrounds and silhouetted letters.
C. Temporary or “sales” signs attached to storefront.
D. Freestanding tripod signs.
E. Flashing, moving, sequencing, audible or odor producing signs.
F. Paper, cardboard and Styrofoam signs.
G. Credit card and advertising placards, decals, stickers, or trademarks.
H. Manufacturer labels.
I. Carpet or rubber entry mat signs.
J. Other signs deemed unsuitable by Landlord.
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EXHIBIT E-1
STOREFRONT WINDOW SIGNS
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ADDENDUM ONE
ADDITIONAL LEASE TERMS
Early Termination Rights:
Provided that the Tenant has not been in default under this Lease beyond any applicable cure period, and otherwise abides
by all the terms and conditions of the Lease, including prompt payment of all sums due therein, the Tenant shall have a one-
time right to terminate this Lease effective midnight December 31, 2014 (“Termination Right”) on the following terms and
conditions only:
1. Tenant will be current in all rent and have met all other obligations due under the Lease through the effective date
of the Termination.
2. Tenant shall provide written notice to the Landlord of its election to terminate the Lease by November 1, 2014.
3. Tenant completes all of its obligations relating to move out and repair of the Premises after the end of the Lease
term.
Provided that the Tenant abides by all the foregoing terms and conditions, then in said event, Tenant’s Termination Right
shall be in full force and effect. Failure to comply with any of the foregoing shall render this Termination Right null and
void, at Landlord’s option, and the Lease shall continue in full force and effect through the original Lease Termination Date.