COMMERCIAL LEASE AGREEMENT
XXXXXXXX COMPANY, INC.
"Lessor"
BULLHIDE LINERS, INC.
"Lessee"
DATE: December 16, 1997
COMMERCIAL LEASE AGREEMENT
THIS COMMERCIAL LEASE AGREEMENT ("Lease"), made and effective this
______ day of December, 1997, by and between XXXXXXXX COMPANY, INC., a
Washington Corporation (hereinafter "Lessor"), and BULLHDE LINERS, CORP., a
Washington corporation (hereinafter "Lessee"), with reference to the following
facts:
A. Lessor owns certain real property and improvements located in
Spokane County, Washington, commonly known as 000 X. Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx, which property is more fully described on Exhibit "A" attached
hereto and made a part hereof. The improvements to the property consist of a
five separate standing buildings.
B. Lessee desires to lease from Lessor for the rent and term, and
subject to the terms set forth in this Lease, one of the buildings above
described having approximately 12,500 square feet of leasable space, including a
portion of the real property surrounding said building, said building and
property more particularly depicted on Exhibit "B" attached hereto and made a
part hereof (hereinafter referred to as the "Premises" or "Leased Premises").
NOW, THEREFORE, Lessor and Lessee agree as follows:
1. Lease of Premises. Lessor hereby leases the Premises to Lessee for
the purpose of conducting its lawful business, and Lessee hereby leases the
Premises from Lessor, for the rent and term, and subject to the terms set forth
in this Lease. Lessee shall be responsible to comply with all fire and other
city, county, state, or federal laws and ordinances and, as a condition of
maintaining this Lease, comply with the terms of ally such inspections and/or
requirements at the sole cost and expense of Lessee.
2. Term of Lease.
2.1 Original Term. The term of this Lease shall commence on
December 1 , 1997, ("Commencement Date"), and shall continue for three (3)
years, terminating at midnight on November 30, 2000.
2.2 Holding Over. Should Lessee, or any of its successors in
interest, hold over the Premises, or any part thereof, after the expiration of
the term of this Lease, unless otherwise agreed in writing, such holding over
shall constitute and be construed as a tenancy from month to month only. The
inclusion of the preceding sentence shall not be construed as Lessor's
permission for Lessee to hold over. All provisions of this Lease except those
pertaining to term and option to extend (and including the adjustment of minimum
rent) shall apply to the month-to-month tenancy.
2.3 Option to Renew. If Lessee is not substantially in default
under this Lease, Lessor grants Lessee an option to renew this Lease for one (1)
additional three (3) year term, under the same terms and conditions herein,
excluding monthly rent, Lessee shall give Lessor written
1
notice of its election to exercise this option at least six (6) months' prior to
the expiration of the current Lease term. The monthly rental shall be
established by mutual agreement in order for, and as a condition precedent to,
the option to renew and the exercise thereof, subject to Paragraph 2.4 below. If
Lessee has not substantially complied with the terms of this Lease for the
original then current term, then any such written notice of its election to
exercise the option hereunder shall be ineffective, and this Lease shall expire
at the end of the original then current term.
2.4 Adjusted Rent. In the event the parties hereto are unable
to mutually agree on an adjusted rent ("Adjusted Rent") for the option period
exercised pursuant to Paragraph 23 above, then the Adjusted Rent will be
determined as follows:
(a) Lessee and Lessor will mutually agree upon and
hire an independent appraiser, qualified to appraise commercial rental
properties, to appraise the fair market rental value of the Premises. The cost
of such appraisal shall be born equally by Lessee and Lessor. The appraised
value received by said independent appraiser shall become the Adjusted Rent for
the option period exercised under Paragraph 23.
(b) In the event Lessee and Lessor cannot mutually
agree upon an independent appraiser as set forth in subparagraph (a) above, then
Lessee and Lessor, at each respective party's cost, shall individually hire an
independent appraiser, qualified to appraise commercial rental properties, to
appraise the fair market rental value of the Premises. The resulting two
appraisal values shall then be added together, then divided by two, in order to
obtain the average appraised value. This resulting average value shall become
the Adjusted Rent, for the option period exercised under Paragraph 2.3.
(c) Notwithstanding the foregoing, however, the
Adjusted Rent shall in no event be less than the rent set forth in paragraph
3.2.
3. Rent.
3.1 Place of Payment. Until Lessee receives notice from
Lessor, or its successor in interest to do otherwise, ail rental payments shall
be paid to Lessor at c/x Xxxxxxxx Management Company, 0000 X. 0xx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000, or as otherwise designated in writing by Lessor.
3.2 Rental Payment. Lessee shall pay to Lessor as Tent
hereunder for the original term of this Lease without deduction, set-off, prior
notice or demand, the monthly rental set forth below in advance on the first day
of each calendar month, beginning on December 1, 1997, and continuing to
November 30, 2000:
December 1, 1997 to November 30, 2000; $4,240.50/month
2
3.3 Late Charges. Any minimum monthly rental, not received on
or before 12 midnight on the fifth (5th) day of each month shall be subject to a
late charge of One Hundred Dollars ($100.00), and shall constitute additional
rental due to the Lessor under this Lease. All late charges specified hereunder
are to be compounded monthly and added upon any late charges previously assessed
for prior delinquencies as provided under this Paragraph 33.
3.4 Payment of Minimum Monthly Rent. Lessee's rental
obligation shall consist of the minimum monthly rent provided for above,
together with such additional amounts to be paid by Lessee under the terms of
this Lease in connection with Lessee's occupancy of the Premises, including
without limitation, taxes and assessments, insurance premiums, and/or
maintenance expenses, plus all costs incurred by Lessor to cure any default by
Lessee.
4. Real Property Taxes and Assessments/Utilities/Operating Expenses.
4.1 Real Property Taxes and Assessments. Lessee shall pay its
pro rata share of all real property taxes and general and special assessments
levied and assessed against the Premises during the Lease term (prorated for any
partial tax year at the beginning and end of the Lease term). For purposes of
determining the amount payable by Lessee resulting from a general or special
assessment, the payment for such assessment shall be amortized over the longest
period authorized tinder applicable law. Lessee shall reimburse Lessor its pro
rata portion of the real property taxes in twelve (12) equal monthly
installments. Lessor shall notify Lessee of its pro rata portion of the real
property taxes and immediately upon receipt of the tax xxxx shall furnish Lessee
with a copy of the tax xxxx. If payment of the tax is not received by Lessor
pursuant to the foregoing. Lessor, at its option, may assess to Lessee a ten
percent (10%) penalty on the tax payment due, which penalty will be deemed
additional rent.
4.2 Personal Property Taxes. Lessee shall pay prior to
delinquency all taxes assessed against and levied upon trade fixtures,
furnishings, equipment and all other Personal property of Lessee contained in
the Premises or elsewhere. When possible, Lessee shall cause said trade
fixtures, furnishings, equipment and all other personal property to be assessed
and billed separately from the real property of Lessor.
If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall likewise pay Lessor the taxes attributable
to Lessee's personal property in twelve (12) equal monthly installments. If
payment of the personal property tax is not received by Lessor pursuant to the
foregoing, Lessor, at its option, may assess to Lessee a ten percent (10%)
penalty on the tax payment due, which penalty will be deemed additional rent.
4.3 Utilities. Lessee shall make all arrangements for and pay
for all utilities and services furnished to or used by it, including without
limitation, gas, electricity, water, telephone service, garbage collection,
sewer and outside lighting, and for all Lessee initiated connection charges.
3
5. Use of Premises. Lessee shall use the Premises for the business of
the manufacture, sales and installation of truck bed liners and related
products, including the sales and installation of related products in the
general truck business, and for no other use without Lessor's prior written
consent. Lessee shall not do or permit anything to be done in or about the
Premises, nor bring or keep anything on the Premises which will in any way
increase the existing rate of or affect any fire or other insurance policy upon
the building located on the Premises or any of its contents, or cause
cancellation of any insurance policy covering said buildings on the Premises or
any part thereof or any of its contents. Lessee shall not use or allow the
Premises to be used for any noxious, immoral, or unlawful purposes as determined
by Lessor; nor shall Lessee cause, maintain or permit any nuisance in or about
the Premises.
6. Maintenance.
6.1 Lessor's Maintenance. Except as specifically provided
elsewhere in this Lease, Lessor, at its cost, shall maintain, in good condition,
the following: The structural parts of the building located on the Premises,
which structural parts include only the foundations, bearing and exterior walls
(excluding glass and doors), subflooring, and roof (excluding skylights).
6.2 Lessee's Maintenance. Except as specifically provided in
Paragraph 6.1, or elsewhere in this Lease, Lessee, at its cost, shall maintain,
in clean, good condition, all portions of the Premises, including without
limitation, all Lessee's personal property, signs, storefronts, plate glass,
show windows, yard maintenance. snow removal in front of and about said
Premises, parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, driveways, landscaped areas, striping, bumpers, irrigation
systems, outside lighting, fences and gates; fire detection systems, sprinkler
systems; the interior of the Premises, heating, ventilation, plumbing, and air
conditioning systems. Notwithstanding the foregoing, Lessor agrees that Lessee,
during the initial three (3) year term of this Lease only, shall be responsible
for the cost of any repair on the HVAC system of an aggregate up to and
including one thousand dollars ($1,000.00). Lessor agrees to pay for the cost of
repair on the HVAC system in excess of said one thousand dollars ($1,000.00)
during the initial three (3) year term of this Lease only. Lessee agrees that,
at the expiration or sooner termination of this Lease, Lessee will quit and
surrender said Premises in a neat and clean condition, will remove all scrap
material, metal, junk, wreckage, and debris, and will deliver all keys belonging
to said Premises to Lessor or Lessor's agent.
7. Alterations and Improvements.
7.1 Lessee's Alterations and Improvements. Lessee shall not
make any alterations to the Premises without Lessor's prior written consent,
which consent shall not be unreasonably withheld as to intended use. All
alterations or modifications performed on the Premises by Lessee, subsequent to
Lessor approval, shall be performed only after requisite city or county building
permits have been received, shall be paid for in cash to the end that no
mechanics' liens are placed against the Premises for work authorized Or
completed by Lessee. All alterations shall be performed by
4
licensed contractors and shall comply with city or county building ordinances
and permit requirements.
Any alterations made shall remain on and be surrendered with the
Premises on expiration or termination of the term. If Lessor so elects, Lessee,
at its cost, shall restore the Premises to the condition designated by Lessor in
its election, before the last day of the term.
7.2 Mechanic's Liens. Lessee shall pay all costs for
construction done by it, or caused to be done by it, and for all materials
furnished to it, or caused to be furnished to it, on the Premises after the
commencement date. Lessee shall keep the Premises free and clear from any liens
arising out of construction done by or for Lessee or materials furnished to or
for Lessee.
Lessee shall have the right to contest the correctness or the validity
of any such lien if, immediately on demand by Lessor, Lessee procures a lien
release bond meeting the requirements of Washington law respecting the release
of mechanic's liens and providing for the payment of any sum that the claimant
may recover on the claim (together with costs (if suit, if the claimant recovers
in the action).
8. Insurance Requirements.
8.1 Hazard Insurance/Loss of Rents. At all times during the
period for which rent is due hereunder, Lessor shall maintain in full force and
effect a policy or policies of casualty insurance. Lessee shall reimburse to
Lessor on a pro rata basis for said casualty insurance, payable upon demand from
Lessor when accompanied with a copy of said insurance xxxx, said pro rata
payments to be deemed as additional rent. Lessee's, liability for any such
reimbursement shall be prorated on the basis of a 365-day year to account for
any fractional portion of an insurance year included in the term at its
commencement and expiration. Lessor shall advise Lessee of any change in the
amount of insurance and Lessee's portion of said charges. All insurance payments
made hereunder shall be treated for purposes of this Lease as additional rent.
Notwithstanding the foregoing, the casualty insurance provided by the Lessor
shall not provide coverage for Lessee's personal property.
The casualty insurance shall cover loss or damage to the Premises
(extended coverage including fixtures) providing protection against all perils
included within the special form, including theft, in the amount of the full
replacement value of the Premises. The casualty insurance policy shall contain
loss of rents insurance coverage for the Premises in the amount of rent,
assessments and taxes payable by Lessee hereunder. The insurance policy shall be
issued in the name of Lessor, with Lessee as an additional insured.
The "full replacement value" of the Premises shall be determined by the
company issuing the insurance policy at the time the policy is initially
obtained. Not more frequently than once every three (3) years, either party
shall have the right to notify the other party that it elects to have the
replacement value re-determined by the insurance company. The redetermination
shall be made
5
promptly and in accordance with the rules and practices of the Board of Fire
underwriters, or a like board recognized and generally accepted by the insurance
company, and each party shall be promptly notified of the results. The insurance
policy shall be adjusted according to the redetermination.
8.2 Personal Property. The Lessee shall, at all times during
the terms of this Lease, maintain a policy or policies of insurance with
premiums thereon fully paid in advance, insuring its fixtures, furniture,
equipment, machinery, inventory, goods, supplies and any leasehold improvements
Lessee constructs on the Premises.
8.3 Liability Insurance. Lessee shall, during the entire term
as extended at Lessee's expense, obtain and keep in force during the term of
this Lease a policy of combined single- limit bodily injury and property damage
insurance insuring Lessee and Lessor against any liability arising out of the
use, occupancy, or maintenance of the Premises. Such insurance shall be in an
amount not less than One Million Dollars ($1,000,000.00) per occurrence. The
limits of said insurance shall not, however, limit the liability of Lessee
hereunder, Lessee shall provide Lessor with a Certificate of Insurance showing
Lessor as an additional insured.
8.4 Waiver of Subrogation. The parties hereby release each
other, and their respective authorized representatives, from all claims and
liabilities for damage to any person or to the Premises and to the fixtures,
personal property, Lessee's improvements, and alterations of either Lessor or
Lessee in or on the Premises, that are caused by or result from risks insured
against under any insurance policies, carried by the parties and in force at the
time of any such damage. Each insurance policy required under this Lease shall
provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by such
policy.
8.5 Miscellaneous Insurance Provisions. All insurance required
under this Lease shall:
(a) Be issued by insurance companies authorized to do
business in the State of Washington, with a financial rating of A+ status as
rated in the most recent edition of Best's Insurance Reports.
(b) Be issued as a primary policy.
(c) Contain an endorsement requiring twenty (20)
days' written notice from the insurance company to both parties and Lessor's
lender before expiration, cancellation or change in the coverage, scope, or
amount of any policy.
Each policy of Lessee, or a certificate of such policy, together with
evidence of payment of premiums, shall be deposited with Lessor at, the
commencement of the term, and on renewal of the policy, not less than twenty
(20) days before the expiration of the term of the policy.
6
Each policy owned by Lessor covering the Premises, or a certificate of
such policy, including liability and hazard insurance, shall be provided to
Lessee at the commencement of the term, and yearly thereafter during the term of
this Lease.
9. Damage and Restoration. In the event the Premises are destroyed or
damaged by fire or other casualty to such an extent as to render the Premises
untenantable in whole or in a substantial part thereof, it shall he optional
with Lessor to rebuild or repair the Premises; and after the happening of any
such contingency, Lessee shall give Lessor or Lessor's agent immediate written
notice thereof. Lessor shall have thirty (30) days after the date of such
notification to notify Lessee in writing of Lessor's intentions to rebuild or
repair the Premises, or the part so damaged ("Lessor's Notice"), and if Lessor
elects to rebuild or repair the Premises, Lessor shall prosecute the work of
such rebuilding or repairing without unnecessary delay, and during such period,
the rent of the Premises shall be abated in the same ratio that the portion of
the Premises rendered temporarily untenantable shall bear to the whole of the
Premises. If Lessor shall fail to give Lessor's Notice, and/or, if Lessor is
unable to rebuild or repair the Premises within ninety (90) days, Lessee shall
have the right to declare this Lease terminated by written notice served upon
Lessor or Lessor's agent within ten (10) days of receipt of Lessor's Notice, or
prior to the expiration of thirty (30) days from Lessor's failure to give
Lessor's Notice. Except for abatement of rent, if any, Lessee shall have no
claim against Lessor for any damage suffered by reason of any such damage,
repair or restoration.
10. General Indemnity. Except for the negligence of Lessor, Lessee
shall indemnify and hold harmless Lessor from and against any and all claims
arising from Lessee's use of the Premises, or from the conduct of Lessee's
business or from ally activity, work, or things done, permitted, or suffered by
Lessee in or about the Premises or elsewhere and shall further indemnify and
hold harmless Lessor from and against any and all claims arising from any breach
or default in the performance of any obligation on Lessee's part to be performed
under the terms of this Lease, or arising from any negligence of the Lessee, or
any of Lessee's agents, contractors, or employees, and from and against all
costs, attorney's fees, expenses and liabilities incurred in the defense of any
such claim or any action or proceeding brought thereon; and in case any action
or proceeding be brought against Lessor by reason of ally such claim, Lessee,
upon notice from Lessor, shall defend the same at Lessee's expense.
11. Obligation to Indemnify, Defend, or Hold Harmless as to Hazardous
Substance. Lessee agrees to indemnify and hold Lessor harmless from and against
any and all claims, demands, damages, losses, liens, liabilities, penalties,
remediation orders, fines, lawsuits, and any other proceedings and costs and
expenses (including attorney's fees), arising directly or indirectly from or out
of, or in any way connected with Lessee's activities on the Leased Premises
which directly or indirectly result in the Premises or any other property
becoming contaminated with Hazardous Substances, the discovery of Hazardous
Substances on the Premises, or the clean-up of Hazardous Substances from the
Premises. Lessee shall not be responsible for the past, current or future
activities, beyond its control, of any third party of an adjacent property which
directly or indirectly result in the Premises becoming contaminated with
Hazardous Substances. The foregoing sentence shall not be construed to exclude
responsibility for the employees, agents and invitees of Lessee.
7
Lessee acknowledges that it is solely responsible for all costs and
expenses related to the clean-up, remediation, or monitoring of Hazardous
Substances from the Premises or any other properties which become contaminated
with Hazardous Substances as a result of activities of Lessee on the Premises.
Lessee's obligations are unconditional and shall survive anti continue
in effect after the termination of this Lease, or the transfer of the Premises
voluntarily or involuntarily, as a result of the activity of Lessee during its
occupation of the Premises under the Lease.
Lessee shall not be responsible for contamination from uses prior to
the time Lessee occupied the Premises.
As used in this Paragraph, "Hazardous Substances" shall mean: any
substance or material defined or designated as hazardous or toxic, hazardous or
toxic material, a hazardous, toxic substance, or any singular term, by any
federal, state, or local environmental statute, regulation, or ordinance
presently in effect or that may be promulgated in the future, as said statutes,
regulations, and ordinances may be amended from time to time, including, but not
limited to, the statutes listed below:
11.1 Federal Rule Resource Conservation and Recovery Act of
1979 (RCRA), 42 U.S.C. Section 6901 et seq.;
11.2 Federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1990 (CERCLA) and Superfund Amendments and
Reauthorization Act of 1986 (XXXX), 42 U.S.C. Section 9601 et seq.;
11.3 Federal Clean Air Act, 42 U.S.C. Section 7401 et seq.;
11.4 Federal Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq.;
11.5 Washington Water Pollution Control Act, RCW Ch. 90.48;
11.6 Washington Clean Air Act, RCW Ch. 70.94;
11.7 Washington Solid Waste Management--Recovery and Recycling
Act, RCW Ch. 70.95;
11.8 Washington Model Toxic Control Act, RCW Ch. 70, 105D;
or any substance which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, or otherwise hazardous or the presence of which on
the Premises causes or threatens to cause a nuisance upon the Premises or to
adjacent properties or poses or threatens to pose a hazard to the health or
safety of persons on or about the Premises, or surrounding property; and,
without
8
limitation, which contains gasoline, diesel fuel, or other petroleum
hydrocarbons, or which contains polychlorinate bipheynoles (PCBs), asbestos, or
urea formaldehyde foam insulation.
12. Condemnation.
12.1 Definitions.
(a) "Condemnation" means (1) the exercise of any
governmental power by a condemnor to condemn all or any portion of the Premises,
whether by legal proceedings or otherwise, or (2) a voluntary sale or transfer
by Lessor to any condemnor, either under threat of condemnation or while legal
proceedings for condemnation are pending.
(b) "Date of Taking" means the date the condemnor has
the right to possession of the property being condemned.
(c) "Award" means all compensation, sums, or anything
of value awarded, paid, or received on a total or partial condemnation.
(d) "Condemnor" means any public or quasi-public
authority, or private corporation or individual. having the power of
condemnation.
12.2 Total Taking. If the Premises are substantially taken by
condemnation, and thereby rendered totally untenantable, this Lease shall
automatically terminate as of the date of taking.
12.3 Partial Taking. If any portion (but not all) of the
Premises is taken by condemnation, this Lease shall remain in effect, except
that Lessee may elect (subject to Paragraph 12.4) to terminate this Lease if any
part of the Premises shall be taken so as to render the remainder thereof
unusable for the purposes for which the Lessee leased the Premises. If Lessee
elects to terminate this Lease, Lessee must exercise its right to terminate
pursuant to this Paragraph by giving notice to Lessor within ten (10) days after
the nature and extent of the taking have been finally determined. If Lessee
elects to terminate this Lease as provided in this Paragraph, Lessee shall also
notify Lessor of the date of termination, which date shall not be earlier than
sixty (60) days, nor later than one hundred twenty (120) days after Lessee has
notified Lessor of its election to terminate; except that this Lease shall
terminate on the date of taking if the date of taking falls on a date before the
date of termination as designated by Lessee. If Lessee does not terminate this
Lease within the ten (10) day period, this Lease shall continue in full force
and effect.
12.4 Lessor's Election to Prevent Termination. If, within
twenty (20) days after receipt of the termination notice described in Paragraph
12.3, Lessor notifies Lessee that Lessor at its cost will add on to the
remaining Premises so that the area and the approximate layout of the Premises
will be substantially the same after the date of taking as they were before the
date of taking,
9
and Lessor commences the restoration immediately and substantially completes the
restoration within ninety (90) days after Lessor notifies Lessee, this Lease
shall continue in full force and effect.
12.5 Restoration of Premises; Abatement or Reduction of Rent.
If there is a partial taking of the Premises and this Lease remains in full
force and effect pursuant to Paragraph 12.3 Lessor shall at its cost accomplish
all necessary restoration within a period of ninety (90) days from the date of
taking. If Lessee elects to terminate under Paragraph 12.3 but Lessor elects to
restore under Paragraph 12.4 then Lessor shall at its cost accomplish all
necessary restoration within a period of ninety (90) days pursuant to Paragraph
12.4, Rent shall be abated or reduced during the period from the date of taking
until the completion of restoration, but all other obligations of Lessee under
this Lease shall remain in full force and effect. The abatement or reduction of
rent shall be abated or reduced proportionately based on the square footage of
the Premises rendered untenantable or unusable during the period of restoration.
12.6 Award. The award shall belong to and be paid to Lessor,
except that Lessee shall receive from the award the value specifically allocated
by the condemnor to the partial or total loss of the unexpired term of this
Lease.
13. Assignment.
13.1 Voluntary Assignment, Subletting, and Encumbering by
Lessee. Lessee shall not voluntarily assign or encumber its interest in this
Lease or in the Premises, or sublease all or any part of the Premises, or allow
any other person or entity to occupy or use all or any part of the Premises,
without first obtaining Lessor's written consent. This Lease shall not be
assignable by operation of law, any assignment, encumbrance, or sublease without
Lessor's prior consent shall be voidable and, at Lessor's election, shall
constitute a default. In the event of any assignment so consented to by Lessor,
five hundred dollars ($500.00) shall be paid by Lessee for Lessor's time and
attorney's fees, in consenting to the transfer or assignment of this Lease. No
consent to any assignment, encumbrance, or sublease shall constitute a further
waiver of the provisions of this Paragraph.
13.2 Involuntary Assignment by Lessee. No interest of Lessee
in this Lease shall be assignable by operation of law, such as (but not limited
to) by becoming bankrupt or insolvent, making an assignment for the benefit of
creditors, failing to remove an attachment or execution levied on this Lease
with thirty (30) days of such levy, or of a receiver who is appointed to take
possession of the premises is not removed within thirty (30) days of such
appointment.
An involuntary assignment shall constitute a default by Lessee and
Lessor shall have the right to elect to terminate this Lease, in which case this
Lease shall not be treated as an asset of Lessee.
13.3 Assignment by Lessor. Lessor shall have the right to
sell, assign, hypothecate, pledge, or otherwise transfer or encumber
(collectively "transfer") all or any portion of its interest in the Premises of
this Lease, without Lessee's, consent, and Lessee shall, upon notice of such
10
transfer, execute a written amendment to this Lease acknowledging and consenting
to such transfer. If the entire Leased Premises are transferred, and the
transferee assumes in writing all of Lessor's obligation under this Lease,
Lessee agrees that Lessor shall be released from any further obligations under
this Lease.
13.4 Subordination of Lease. This Lease, at Lessor's option,
shall be subordinate to any ground lease, mortgage, deed of trust, or any other
hypothecation for security now or hereafter placed upon the real property of
which the Premises are a part and to any and all advances made on the security
thereof and to all renewals, modifications, consolidating, replacements and
extensions thereof. Notwithstanding such subordination, Lessee's rights to quiet
possession of the Premises shall not be disturbed if Lessee is not in default
and so long as Lessee shall pay the rent and observe and perform all of the
provisions of this Lease, unless this Lease is otherwise terminated pursuant to
its terms. If any mortgagee, trust beneficiary or ground lessor shall elect to
have this Lease prior to the lien of its mortgage, deed of trust or ground
lease, and shall give written notice thereof to Lessee, this Lease shall be
deemed prior to such mortgage, deed of trust, or ground lease, whether this
Lease is dated prior or subsequent to the date of said mortgage, deed of trust
or ground lease or the date of recording thereof. Lessee agrees to execute any
documents required to effectuate such subordination or to make this Lease prior
to the lien of any mortgage, deed of trust or ground lease, as the case may be,
and failing to do so within ten (10) days after written demand, does hereby
make, constitute and irrevocably appoint Lessor as Lessee's attorney in fact and
in Lessee's name, place and stead, to do so.
14. Lessee's Default. The occurrence of any of the following shall
constitute a default by Lessee:
14.1 Failure to pay rent or taxes when due, or any other
prepayment or reimbursement required to be paid if the failure continues for ten
(10) days after notice has been given to Lessee;
14.2 Abandonment and vacation of the Premises (failure to
occupy and operate the Premises for thirty (30) consecutive days shall be deemed
an abandonment and vacation);
14.3 Insolvency of Lessee, or Lessee's transfer in fraud of
creditors, or Lessee's assignment for the benefit of creditors;
14.4 Lessee shall file a petition under any section or chapter
of the National Bankruptcy Act, as amended, or under similar laws of the United
States or any state thereof; or Lessee becoming adjudged bankrupt or insolvent
in proceedings filed against Lessee thereunder;
14.5 A receiver or trustee becoming appointed for all or
substantially all of the assets of Lessee;
11
14.6 Violation of or failure to perform any other provision of
this Lease if the violation or failure to perform is not cured within twenty
(20) days after notice has been given to Lessee. If the default cannot
reasonably be cured within twenty (20) days, Lessee shall not be in default of
this Lease if Lessee commences to cure the default within the twenty (20) day
period and diligently and in good faith continues to cure the default.
Notice as given under this Paragraph shall specify the alleged default
and the applicable Lease provisions, and shall demand that Lessee perform the
provisions of this Lease within the applicable period of time, or quit the
Premises. Such notice may serve both as a notice of the default under this
Paragraph and as any statutory notice required as a condition precedent to an
action in unlawful detainer or for damages, or otherwise. No such notice shall
be deemed a forfeiture or a termination of this Lease unless Lessor so elects in
the notice.
15. Lessor's Remedies. Upon the occurrence of any of such events of
default described in Paragraph 14 hereof, Lessor shall have the option to pursue
any one or more of the following remedies without any notice or demand
whatsoever:
15.1 Lessor may accelerate all rent payments due hereunder
which shall then become immediately due and payable.
15.2 Terminate this Lease, in which event Lessee shall
immediately surrender the Premises to Lessor, and if Lessee fails so to do,
Lessor may, enter and take possession of the Premises pursuant to legal
proceedings or pursuant to any notice or remedy provided for by law, and Lessee
agrees to pay to Lessor on demand the amount of all loss and damage which Lessor
may suffer by reason of such termination, whether through inability to relet the
Premises on satisfactory terms or otherwise.
15.3 Whether or not Lessor retakes possession or relets the
Premises, Lessor shall have the right to recover unpaid rent and all damages
caused by Lessee's default, including attorney's fees. Damage shall include,
without limitation: all rentals lost, all legal expenses and other related costs
incurred by Lessor following Lessee's default, all costs incurred by Lessor in
restoring the Premises to good order and condition, all costs (including without
limitation any brokerage commissions and the value of Lessor's time) incurred by
Lessor, plus interest thereon from the date of expenditure until fully repaid at
the rate of eighteen percent (18%) per annum.
15.4 Pursuit of any of the foregoing remedies shall not
preclude pursuit of any of the other remedies herein provided or any other
remedies provided by law, such remedies being cumulative and non-exclusive, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver of
any rent due to Lessor hereunder or of any damages accruing to Lessor by reason
of the violation of any of the terms, provisions, and covenants herein
contained. No act or thing done by the Lessor or its agents during the Lease
Term hereby granted shall be deemed a termination of this Lease or an acceptance
of the surrender of the Premises, and no agreement to terminate this Lease or
accept a surrender of said Premises shall be valid unless in writing signed by
Lessor. No waiver
12
by Lessor of any violation or breach of any of the terms, provisions, and
covenants herein contained shall be deemed or construed to constitute a waiver
of any other violation or breach of any of the terms, provisions, and covenants
herein contained. Lessor's acceptance of the payment of rental or other payments
hereunder after the occurrence of an event of default shall not be construed as
a waiver of such default, unless Lessor so notifies Lessee in writing.
Forbearance by Lessor to enforce one or more of the remedies herein provided
upon an event of default shall not be deemed or construed to constitute a waiver
of such default or of Lessor right to enforce any such remedies with respect to
such default or any subsequent default. If, on account of any breach or default
by Lessee in Lessee's obligations under the terms and conditions of this Lease,
it shall become necessary or appropriate for Lessor to employ or consult with an
attorney concerning or to enforce or defend any of Lessor's rights or remedies
hereunder, Lessee agrees to pay any reasonable attorney's fees so incurred.
16. Lessor's Right of Entry. Lessor shall have the right to enter the
Premises at all reasonable times in order to inspect the Premises or to
otherwise insure compliance with the provisions of this Lease.
17. Surrender of Premises. Prior to expiration or immediately upon
termination of the term, Lessee shall surrender to Lessor the Premises and all
Lessee's improvements and alterations in good condition (except for ordinary
wear and tear occurring after the last necessary maintenance made by Lessee and
destruction to the Premises covered hereunder), except for alterations that
Lessee has the right to remove or is obligated to remove. Lessee shall remove
all its personal property within the above-stated time. Lessee shall perform all
restoration made necessary by the removal of any alterations or Lessee's
personal property. Lessor may elect to retain or dispose of in any manner any
alterations or Lessee's personal property that Lessee does not remove from the
Premises on expiration or termination of the term as allowed or required by this
Lease by giving at least twenty (20) days' notice to Lessee. Title to any such
alterations or Lessee's personal property that Lessor elects to retain or
dispose of on expiration of the twenty (20) day period shall vest in Lessor.
Lessee waives all claims against Lessor for any damage to Lessee resulting from
Lessor's retention or disposition of any such alterations or Lessee's personal
property. Lessee shall be liable to Lessor for Lessor's costs for storing,
removing, and disposing of any alterations or Lessee's personal property. If
Lessee fails to surrender the Premises to Lessor on expiration or termination of
the term as required by this Paragraph, Lessee shall indemnify, defend and hold
Lessor harmless from all claims and damages resulting from Lessee's failure to
surrender the Premises, including, without limitation, claims made by a
succeeding tenant resulting from Lessee's failure to surrender the Premises.
18. Estoppel Certificates. Either party shall, within ten (10) days
after request from the other, execute and deliver to the requesting party, in
recordable form, a certificate stating: (1) that this Lease is unmodified and in
full force and effect, or in full force and effect as modified, and stating the
modifications; and (2) that the requesting party is not in substantial default
of the provisions of the Lease, or stating the nature and extent of any claimed
default. The certificate also shall state the amount of minimum monthly rent,
the dates to which the rent has been paid in
13
advance, and the amount of any security deposit or prepaid rent. Failure to
deliver the certificate within the ten (10) days shall be conclusive for the
benefit of the requesting party that this Lease is in full force and effect and
has not been modified, and that the requesting party is not in substantial
default of the provisions of this Lease, except as may be represented by the
requesting party
19. Signs. Lessee, at its cost, shall have the right to place,
construct, and maintain an exterior sign on the Premises, advertising its
business; provided, however, that the size, design and construction of the sign
shall first be approved by Lessor giving written consent thereof. All signs must
comply with the sign ordinances as established by the local municipalities and
shall be placed in accordance with required permits.
20. Miscellaneous and Procedural.
20.1 Time of the Essence. Time is of the essence of each and
every provision of this Lease.
20.2 Attorney's Fees. If legal action (including, without
limitation, litigation and/or arbitration) is required or deemed necessary to
enforce or interpret any of the provisions of this Lease, the prevailing party
shall be entitled to recover its costs of suit, including reasonable attorney's
fees, incurred in connection therewith.
If either Lessee or Lessor becomes a party to any litigation or
arbitration concerning this Lease or the subject matter of this Lease, by reason
of any act or omission of the other, or its authorized representatives
("Negligent Party"), and not by its own act or omission, or that of its
authorized representatives ("Non-Negligent Party"), then the Negligent Party
shall he liable to the Non-Negligent Party for reasonable attorney's fees and
court costs incurred by the Non-Negligent Party in any such litigation or
arbitration.
20.3 Consent of Parties. Whenever consent or approval of
either party to this Lease is required, such consent or approval shall not be
unreasonably withheld.
20.4 Binding Effect. Subject to the restrictions on assignment
set forth above, this Lease shall be binding upon and shall inure to the
benefit, of the parties and their respective successors and assignees.
20.5 Corporate Authority. Each corporate party to this Lease
certifies that at the execution of this Lease, such corporation is a valid
corporation organized under the laws of the state of Washington, and each
individual signing on behalf of the corporate party is duly authorized to sign
on behalf of such corporation.
20.6 Governing Law, Venue and Jurisdiction. This Lease shall
be interpreted and governed according to the laws of the State of Washington.
Jurisdiction and venue in any action to interpret or enforce any provisions of
this Lease shall lie in Spokane County, Washington.
14
20.7 Memorandum of Lease. At the request of either party to
this Lease, a memorandum of this Lease shall be executed, acknowledged, and
recorded with the official records of Spokane County, Washington.
20.8 Captions. The captions of paragraphs within this Lease
are included for convenience only and shall have no effect on its
interpretations.
20.9 Severability. The unenforceability, invalidity, or
illegality of any provision of this Lease shall not render any other provision
unenforceable or illegal.
20.10 Notices . Any notice given under this Agreement shall be
sufficient if in writing and mailed by either registered or certified mail,
return receipt requested, postage prepaid to the following addresses:
If to Lessor: XXXXXXXX COMPANY, INC
c/x Xxxxxxxx Management Company
0000 X. 0xx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
If to Lessee: BULLHIDE LINERS, INC.
c/o Xx. Xxx Xxxxxxxx
000 X. Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Any such notice shall be deemed delivered within forty-eight (48) hours from the
time of mailing if mailed as provided in this subparagraph. Either party may
change its address by delivering notice of the change of address in the manner
prescribed in this subparagraph.
20.11 Non-Waiver of Breach. The waiver by any party hereto of
a breach or any provision of this Lease shall not operate or be construed as a
waiver of any subsequent breach by any party.
20.12 Entire Agreement. This instrument contains the entire
Agreement of the parties and may not be changed except by written agreement duly
executed by the parties hereto.
20.13 Counterparts. This Agreement may be signed in
counterpart signatures.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day
and year first above written.
XXXXXXXX COMPANY, INC.
By: /s/ Xxxxx Xxxxxxxx
-----------------------
Name: __________________
15
BULLHIDE LINERS, INC.
By: /s/ Xxx Xxxxxxxx
--------------------
Title:President
---------------
STATE OF WASHINGTON )
) ss:
COUNTY OF SPOKANE )
On this day Personally appeared before me Xxxxx Xxxxxxxx , to me known
to be the individual described in and who executed the within and foregoing
instrument, and acknowledge that he signed the same as his lice and voluntary
act and deed, for the uses and purposes therein mentioned.
GIVEN under my hand and official seal this 17th day of December, 1999.
/s/ Xxxx X. Xxxxxx
------------------
Notary Public in and for the
State of Washington,
residing in Spokane
My Commission expires: 4/21/98
16
STATE OF WASHINGTON)
) ss:
COUNTY OF SPOKANE )
On this 16th day of December, 1997, before me personally appeared Xxx
Xxxxxxxx, to me known to be the President of BULLHIDE LINERS, INC, the
corporation that executed the foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act of said corporation, for the uses
and purposes therein mentioned, and on oath stated that he was authorized to
execute the said instrument on behalf of said corporation.
GIVEN UNDER MY HAND AND OFFICIAL SEAL the day and year in this
certificate first above written.
/s/ Xxxxx X. Xxxxx
------------------
Notary Public in and for the
State of Washington,
residing in Spokane
My Commission expires: 9/27/00
17
LIST OF EXHIBITS
EXHIBIT "A" Legal Description
EXHIBIT "B" Depiction of Leased Premises
EXHIBIT "C" Improvements to be complete when weather permits.
18
EXHIBIT "A"
That part of a building and premises outlined in yellow on the
attachment hereto, which building and premises are located within the southern
portion of the following legally described property, Warehouse #101:
That portion of the N 1/2 of the SF 1/4 of Section 14,
Township 25 North, Range 43 E.W.M., Spokane County,
Washington, described as follows: Beginning at a point on the
west line of Xxxxxxx Road which is 870.00 feet north of the
north line of the right of way of Chicago, Milwaukee, St. Xxxx
& Pacific Railway Company; thence westerly, parallel to said
north right of way line, 317.00 feet; thence northerly,
parallel to the cast line of said SE 1/4 of Section 14, 180.00
feet; thence easterly, 317.00 feet to the west line of Xxxxxxx
Road; thence southerly, 180.00 feet to the POB.
19
EXHIBIT "B"
Depiction of Leased Premises
20
EXHIBIT "C"
IMPROVEMENTS TO BE COMPLETED:
1) Finish the planting of sod on the east side of the building, between
the building and Xxxxxxx Xx.
2) Install a curb-cut in the south parking lot in front of the overhead
door.
3) Lessor to pay for crack repair maintenance on the south parking lot as
part of an overall repair and asphalt scalant project. Lessee will pay
for the top coat sealant and striping.
21
