EXHIBIT 10.20
SUBLEASE
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THIS SUBLEASE is entered into as of April 27, 1998 by and between PACIFIC
AEROSPACE & ELECTRONICS, INC., a Washington corporation ("PA&E"), and ORCA
TECHNOLOGIES, INC., a Utah corporation ("Orca").
RECITALS
A. PA&E is the current lessee under that certain lease (the "Lease") dated
October 7, 1997, with Creekside Building LLC, a Washington limited liability
company ("Landlord"), for the real property commonly known as the Creekside
Building, 24000 - 00xx Xxx. XX, Xxxxx 000, Xxxxxxx, XX 00000 (together with all
improvements on and appurtenances to such property, the "Leased Area"), which is
located on the real property more particularly described as follows:
Xxx 0 xx xxx Xxxx xx Xxxxxxxx Xxxxx Xxxxx Center, recorded on Volume 54 of
Plats, pages 165-169, inclusive, records of Snohomish County, Washington,
under Auditors No. 9212225007
B. PA&E currently occupies the three offices and conference room located on
the west side of the south window wall of the Premises, and the workroom across
the hall to the north of such offices (the "PA&E Area"). PA&E desires to
sublease to Orca the remainder of the Leased Area (the "Premises"), and Orca
desires to sublease the Premises, subject to the Lease and on the terms and
conditions set forth in this Sublease.
C. All capitalized terms not otherwise defined in this Sublease shall have
the meanings set forth in the Lease.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the parties agree as follows:
1. Sublease. Effective as of November 15, 1997, PA&E hereby subleases the
Premises to Orca, and Orca hereby subleases the Premises from PA&E, all subject
to the terms, covenants and conditions contained in this Sublease and the Lease.
However, PA&E reserves the right to use the conference room, reception area,
lunch room, lavatories, hallways and other common areas located in the Premises.
Orca acknowledges having received a complete copy of the Lease from PA&E.
2. Sublease Term. The term of this Sublease commenced as of November 15,
1997, and, subject to Section 19 of this Sublease, shall terminate upon earlier
of (a) the date that the Lease terminates for any reason, or (b) upon 60-days
written notice by either party.
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3. Rent. Orca shall pay all the Base Rent and Additional Rent ("Rent") due
under the Lease, less the $2,000 per month paid by PA&E for the PA&E Area,
directly to the Landlord on or before the date such Rent is due. Orca shall
provide PA&E with evidence of all such payments immediately upon making any Rent
payment.
4. Expansion of Premises. Orca agrees that if PA&E vacates the PA&E Area,
then the Premises will automatically, without further action by the parties, be
increased to 100% of the Leased Area and Orca shall pay 100% of all Rent due
under the Lease. In such event, all references to the Premises contained in this
Sublease shall refer to the entire Leased Area.
5. Reimbursements. Orca agrees that if PA&E incurs any cost or expense as a
result of Orca's use of the Premises or any other portion of the Leased Area,
including any additional charges for utilities and the like, Orca shall
reimburse PA&E for the same immediately upon PA&E's demand. Any sums not paid
within five days following such demand shall bear interest thereafter at the
rate of 12% per annum until paid.
6. Condition of Premises. Orca accepts the Premises "as-is" in their
current condition. Orca agrees to surrender the Premises to PA&E at the end of
the term of this Sublease in substantially the same condition existing as of the
first date of such term, ordinary wear and tear and damage due to casualty or
condemnation excepted.
7. Alterations. Orca may not place any signs or other means of
identification on or about the Premises or in any common areas of the building
in which they are located (the "Building") without the prior written consent of
the Landlord to the extent required by the Lease. Orca may not make any
alterations, or additions or substitutions to the Premises or attach any
fixtures thereto without the prior written consent of PA&E and the Landlord.
8. Use of Premises. Orca agrees that it shall use the Premises solely for
general office purposes which are consistent with the permitted uses under the
Lease.
9. Compliance with Laws. Orca shall comply with all statutes, laws and
ordinances relating to the Premises and Orca's use thereof.
10. Compliance with Rules and Regulations. Orca shall comply with all rules
and regulations which are currently or hereafter in effect with respect to the
Building, including, without limitation, such rules and regulations as pertain
to the use of lavatories, parking spaces and common areas, and all nonsmoking
policies.
11. Security Requirements. Orca agrees to maintain the security of the
Premises and Leased Area at all times, including locking the doors from the
reception area when the Premises are not occupied by Orca.
12. Confidentiality. Orca and PA&E acknowledge that the their respective
businesses require maintaining the confidentiality of information,
correspondence and records pertaining to
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such businesses. Orca and PA&E agree to cause their respective employees and
persons visiting the Premises to respect such confidentiality at all times.
13. PA&E's Rights of Inspection. PA&E shall have the right to enter upon
and inspect the Premises at all reasonable times.
14. Orca's Property. PA&E shall not be responsible for loss or damage to
the personal property of Orca, its employees, agents or invitees.
15. Utilities. All utilities, including, without limitation, electrical,
heating, water, sewer and trash removal services, shall be furnished in
accordance with the terms of, and subject to the limitations contained in, the
Lease. Orca shall have the right, at its expense, to install its own telephones
and telephone lines to the extent conforming to the requirements of the Lease.
16. Destruction or Damage to Premises. In the event of any damage or
destruction to the Premises by fire or other casualty, Orca's right to use the
Premises shall be subject to the Landlord's rights under the Lease.
17. Insurance. Upon the request of PA&E, Orca shall carry and pay for
public liability insurance in a responsible insurance company licensed to do
business in Washington during the entire term of this Sublease, in the amounts
of coverage set forth in Section 14.4 of the Lease, arising from any claim made
against the Landlord, PA&E or Orca for injury to persons or damage to property
and which is related to the Premises or their use.
18. Subrogation. As a part of the consideration of this Sublease, each of
the parties releases the other and the Landlord from all liability for damage
due to any act or neglect of the other party to property owned by said parties
which is the result of fire or other casualty covered by insurance carried at
the time of such casualty by either party or the Landlord. However, the releases
contained in this section shall not apply to loss or damage resulting from the
willful or premeditated acts of either of the parties, their agents or
employees; and provided further, nothing in this paragraph shall be interpreted
or have the effect of relieving or modifying any obligation of any insurance
company.
19. Indemnity. Orca shall defend, indemnify and save PA&E harmless from and
against all liability of, and claims and allegations asserted against, PA&E by
the Landlord or any other person by reason of any failure of Orca to pay any
Rent or other amounts due under the Lease when due, or any other action or
failure to act by Orca, its agents, employees, invitees and licensees.
20. Default. If Orca defaults in the performance or observance of any
covenant or condition applicable to it under the terms of this Sublease or the
Lease, PA&E shall have the right to (a) cancel the tenancy created by this
Sublease, (b) recover its damages caused by such default, and (c) pursue such
other remedies as may be available to PA&E at law or in equity. PA&E `s waiver
of any default by Orca under any covenant or condition contained in this
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Sublease or the Lease shall not operate as a waiver of any subsequent breach of
the same or any other covenant or condition.
21. General Provisions.
(a) Assignment and Subleasing. Orca may not assign or transfer all or
part of this Sublease, or further sublet any portion of the Premises, without
the prior written consent of the Landlord and PA&E in each instance. Subject to
the foregoing, this Sublease shall bind and benefit of the parties and their
respective successors and permitted assigns.
(b) Notices. Any and all notices given under this Sublease or the
Lease shall be in writing and delivered to PA&E at the Premises and to Orca at
the Premises, or at such other address as a party may specify in writing. Orca
also agrees to promptly give PA&E true and correct copies of any notices
received by Orca from the Landlord.
(c) Legal Relationship of the Parties. This Sublease shall not be
interpreted or construed as establishing a partnership or joint venture between
PA&E and Orca, and neither party shall have the right to make any
representations or incur any debts on behalf of the other. Orca further agrees
that it may not use or refer to PA&E's name, business or any employee of PA&E
with respect to any business or activity of Orca.
(d) Further Assurances. Each of the parties shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions of this Sublease and the
transactions contemplated hereby.
(e) Attorneys' Fees. The prevailing party in any arbitration or
litigation concerning this Sublease is entitled to reimbursement of its court
costs and attorneys' fees by the non-prevailing party, including such costs and
fees as may be incurred on appeal or in a bankruptcy proceeding.
(f) Severability. If any portion of this Sublease is held to be
invalid by a court of competent jurisdiction, the remaining terms of this
Sublease shall remain in full force and effect to the extent possible.
(g) Independent Counsel. Orca acknowledges that Stoel Rives LLP has
represented PA&E in this transaction, not Orca, and that Orca has been
represented by Durham Xxxxx Xxxxx and Xxxxxxx.
(h) Entire Agreement. This Sublease and the Lease contain the entire
agreement between Orca and PA&E with regard to the Leased Area, and no
modification of this Sublease shall be binding upon the parties unless evidenced
by a subsequent written agreement signed by PA&E and Orca.
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(i) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall constitute but one and the same instrument.
(j) Lease Controlling. This Sublease is subject to the terms,
covenants and conditions of the Lease, and neither the Lease nor the rights of
the Landlord shall be affected by this Sublease. This Sublease shall not become
effective until executed by PA&E and Orca and approved by the Landlord as
indicated below.
Executed as of the first date written above.
PACIFIC AEROSPACE & ELECTRONICS, INC.
By /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Its President
ORCA TECHNOLOGIES, INC.
By /s/ XXXXX XXXXX
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Xxxxx Xxxxx
Its President
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PA&E'S ACKNOWLEDGMENT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this April 29, 1998, before me personally appeared XXXXXX X. XXXXXX, to
me known to be the PRESIDENT of PACIFIC AEROSPACE & ELECTRONICS, INC., the
corporation that executed the within and foregoing instrument, and acknowledged
said instru ment to be the free and voluntary act and deed of said corporation,
for the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ XXXXXX X. XXXXXXX
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Name (Printed):Xxxxxx X. Xxxxxxx
NOTARY PUBLIC in and for the
State of Washington, residing at Wenatchee.
My appointment expires: 1-23-29.
ORCA'S ACKNOWLEDGMENT
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this June 3, 1998, before me personally appeared XXXXX XXXXX to me known
to be the PRESIDENT of ORCA TECHNOLOGIES, INC., the corporation that executed
the within and foregoing instrument, and acknowledged said instrument to be the
free and volun tary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ XXXXXX X. XXXXXX
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Name (Printed): Xxxxxx X. Xxxxxx
NOTARY PUBLIC in and for the
State of Washington, residing at Marysville.
My appointment expires: 4/1/02.
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