INDUSTRIAL LEASE AGREEMENT
LESSOR: CONTINENTAL, INC.
LESSEE: BIRTHDAY EXPRESS, INC.
TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II
BASIC LEASE PROVISIONS OF THE LEASE AGREEMENT. . . . . . . . . . . . . . . . . . . IV
1. PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. PREMISES, PARKING AND COMMON AREAS. . . . . . . . . . . . . . . . . . . . . . .1
3. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
4. RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
5. SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
6. USE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREAS SERVICES . . . . . . . . . .5
8. INSURANCE INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
9. DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
10. REAL PROPERTY TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11. UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . . . 11
13. DEFAULT REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
15. BROKER'S FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
16. ESTOPPEL CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17. LESSOR'S LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
19. INTEREST ON PAST-DUE OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . 17
20. TIME OF ESSENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
21. ADDITIONAL RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS . . . . . . . . . . . . . . . . 17
23. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
24. WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
25. RECORDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
26. HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
27. CUMULATIVE REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
28. COVENANTS AND CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
29. BINDING EFFECT, CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . 19
30. ATTORNEY'S FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
31. LESSOR'S ACCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
32. AUCTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
33. SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
34. MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
35. CONSENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
36. GUARANTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
37. QUIET POSSESSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
38. SECURITY MEASURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
39. EASEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
40. PERFORMANCE UNDER PROTEST . . . . . . . . . . . . . . . . . . . . . . . . . . 21
41. AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
42. CONFLICT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
43. OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
44. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
45. OPTION TO RENEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
LEGAL DESCRIPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
HAZARDOUS WASTE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
RENT SCHEDULE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ADDENDUM 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ADDENDUM 1A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
BASIC LEASE PROVISIONS OF THE LEASE AGREEMENT
FOR
405 BUSINESS PARK
BETWEEN
405 BUSINESS PARK LIMITED PARTNERSHIP, AS LESSOR, AND
BIRTHDAY EXPRESS, INC., AS LESSEE
The following basic terms of the Lease (herein called the "Basic Lease
Provisions") between Lessor and Lessee are an integral part of and are
incorporated by reference into the within lease:
A. The Building: 405 Business Park Annex
B. The Premises: 00000 - 000xx Xxxxxx XX, Xxxxx 000
1. The suite number of the premises and the floors of the building in
which the premises are located are as follows:
Suite #101
1st Floor
2. The space within the premises is further described in the Lease,
including the floor plan attached hereto as Exhibit A, and
consists of the following approximate number of rentable square
feet: 16,734 (See Exhibit A)
C. The Term:
5 years and 1 months, beginning on December 1, 1995 (the commencement
date) and ending on December 31, 2000 (the expiration date).
D. The Base Rent: See exhibit D
E. Lessee's Proportionate Share of the Operating Expenses and/or increases
in Real Estate Taxes of the building, for purposes of determining
Lessee's annual rental adjustment, is hereby agreed to be forty six and
57/100 percent (46.57%).
F. The Security Deposit: $16,986.76 (first months prepaid rent and security
deposit)
G. The Space Plans Approval Date: N/A
H. Lessee's Contribution for Tenant Finish Improvements: N/A
I. Broker(s): Pacific Real Estate Partners
Employing Party: Continental Real Estate Management Services
J. Addresses for Notices and Payments: 000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Lessor: 405 Business Park Limited Partnership
c/o Continental Real Estate Management Services
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Lessee: Birthday Express, Inc.
00000 - 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Checks Payable To: Continental Real Estate Management Services
Payment Address: 000 Xxxxx Xxxxxx, Xxxxx 0000
INDUSTRIAL LEASE
1. PARTIES.
This lease, dated ____________19___ for reference purposes only is made
by and between 405 Business Park Limited Partnership (herein called
Lessor) and Birthday Express, Inc. (herein called Lessee).
2. PREMISES, PARKING AND COMMON AREAS.
2.1 PREMISES. Lessor hereby leases to Lessee and Lessee leases from
Lessor for the term, at the rental, and upon all of the conditions
set forth herein, real property situated in the County of King,
State of Washington commonly known as 405 Business Park Annex and
described as 00000-000xx Xxxxxx XX, Xxxxxxxx, XX 00000 herein
referred to as the "Premises", as outlined on Exhibit A attached
hereto, including rights to the common areas as hereinafter
specified but not including any rights to the roof of the premises
or to any building in the industrial center. The premises are a
portion of a building herein referred to as the "Building". The
premises, the building, the common areas, the land upon which the
same are located, along with all other buildings and improvements
thereon, are herein collectively referred to as the "Industrial
Center". See Exhibit E, Addendum 1A.
2.2 VEHICLE PARKING. Parking spaces in the common areas are
unreserved and unassigned. However, Lessee shall conform to such
parking rules and regulations as Lessor, in its reasonable
discretion, dictates. Lessee shall have the right to utilize its
pro-rata share of total designated parking stalls on the
Industrial Center site. At the time of lease execution, the
Lessee's pro-rata share allows the Lessee to utilize approximately
28 designated parking stalls. All of the above referenced stalls
are on a first come, first serve, non reserved basis except for
five (5) existing, reserved visitor parking stalls adjacent to the
Lessee's premises.
2.3 COMMON AREAS - DEFINITION. The term "Common Areas" is defined as
all areas and facilities outside the premises and within the
exterior boundary line of the industrial center that are provided
and designated by the Lessor from time to time for the general
non-exclusive use of Lessor, Lessee and of other Lessees of the
industrial center and their respective employees, suppliers,
shippers, customers and invitees, including parking areas, loading
and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways and landscaped areas.
2.4 COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to Lessee,
for the benefit of Lessee and its employees, suppliers, shippers,
customers and invitees, during the term of this lease, the
non-exclusive right to use, in connection with others entitled to
such use, the common areas as they exist from time to time,
subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and
regulations or restrictions governing the use of the industrial
center. Under no circumstances shall the right herein granted to
use the common areas be deemed to include the right to store any
property, temporarily or permanently, in the common areas. Any
such storage shall be permitted only by the prior written consent
of Lessor or Lessor's designated agent, which consent may be
revoked at any time. In the event that any unauthorized storage
shall occur then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have to
remove the property and charge the cost to Lessee, which cost
shall be immediately payable upon demand by Lessor.
2.5 COMMON AREA - RULES AND REGULATIONS. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control
and management of the common areas and shall have the right, from
time to time, to establish, modify, amend and enforce reasonable
rules and regulations with respect thereto. Lessee agrees to
abide by and
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conform to all such rules and regulations, and to cause its
employees, suppliers, shippers, customers, and invitees to so
abide and conform. Lessor shall not be responsible to Lessee for
the noncompliance with said rules and regulations by other Lessees
of the industrial center, other than the remedies provided Lessee
in this lease. Lessor shall be responsible for enforcing the
terms of its leases with other Lessees in the Industrial Center
which use the same common areas, so that such use does not
interfere with this Lessees use of their demised premises or
common areas provided under this lease. Lessee acknowledges at
the time of lease execution, no Rules and Regulations exist on the
property. Lessor may install any new Rules and Regulations at its
discretion, subject to the provisions of this lease.
2.6 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's
sole discretion, from time to time:
(a) To make changes to the common areas, including, without
limitation, changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, loading and
unloading areas, ingress, egress, direction of traffic, landscaped
areas and walkways;
(b) To close temporarily any of the common areas for
maintenance purposes so long as reasonable access to the premises
remains available;
(c)
(d) To add additional buildings and improvements to the common
areas, but in no event shall Lessee's existing rights be reduced.
(e) To use the common areas while engaged in making additional
improvements, repairs or alterations to the industrial center, or
any portion thereof;
(f) To do and perform such other acts and make such other
changes in, to or with respect to the common areas and industrial
center as Lessor may, in the exercise of sound business judgment,
deem to be appropriate.
(g) Lessor shall not make changes which interfere with Lessees
use of its premises, block visibility to Lessees premises, or
prevent ingress or egress of lease or its customers.
3. TERM.
3.1 TERM. The term of this lease shall be for Five (5) Years
commencing on December 1, 1995 and ending on December 31, 2000,
unless sooner terminated pursuant to any provision hereof.
See Exhibit E, Addendum 1, Paragraph 2.
3.2 DELAY IN POSSESSION. Notwithstanding said commencement date, if
for any reason Lessor cannot deliver possession of the premises to
Lessee on said date, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this lease
or the obligations of Lessee hereunder or extend the term hereof,
but in such case, Lessee shall not be obligated to pay rent or
perform any other obligation of Lessee under the terms of this
lease, except as may be otherwise provided in this lease, until
possession of the premises is tendered to Lessee; provided
however, that if Lessor shall not have delivered possession of the
premises within sixty (60), days from said commencement date,
Lessee may at Lessee's option, by notice in writing to Lessor,
cancel this lease, in which event the parties shall be discharged
from all obligations hereunder, provided further, however, that if
such written notice of Lessee is not received by Lessor, Lessee's
right to cancel this lease hereunder shall terminate and be of no
further force or effect.
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3.3 EARLY POSSESSION. If Lessee occupies the premises prior to said
commencement date, such occupancy shall be subject to all
provisions of this lease, such occupancy shall not advance the
termination date.
4. RENT.
4.1 BASE RENT. See Exhibit D
4.2 OPERATING EXPENSES. In addition to base rent, Lessee shall pay to
Lessor during the term hereof, as additional rental, Lessee's
share as hereinafter defined, of all operating expenses during
each calendar year of the term of this lease, in accordance with
the following provisions:
(a) "Lessee's Share" is defined for purposes of this lease, as
46.57 percent.
(b) "Operating Expenses" is defined, for purposes of this
lease, as all costs incurred by Lessor, if any, for:
(I) The operation, repair and maintenance, in neat,
clean, good order and condition of the following:
(aa) The common areas, including parking areas,
loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways, landscaped
areas, striping, bumpers, irrigation systems.
Common areas lighting facilities and fences and
gates.
(bb) Trash disposal services.
(cc) Tenant directories.
(dd) Fire detection systems including sprinkler
system maintenance and repair.
(ee) Security Services.
(ff) Any other service to be provided by Lessor
that is elsewhere in this lease stated to be an
"Operating Expense".
(II) Any deductible portion of an insured loss concerning
any of the items or matters described in this paragraph
4.2.
(III) The cost of the premiums in the liability and
property insurance policies to be maintained by Lessor
under paragraph 8 hereof.
(IV) The amount of the real property tax to be paid by
Lessor under paragraph 10.1 hereof.
(V) The cost of water, gas and electricity to service
the common areas.
(c) The inclusion of the improvements, facilities and service
set forth in paragraph 4.2(b)(I) of the definition of operating
expenses shall not be deemed to impose an obligation upon Lessor
to either have said improvements or facilities or to provide those
services unless the industrial center already has the same, Lessor
already provides the services or Lessor agreed elsewhere in this
lease to provide the same or some of them.
(d) Lessor's obligation to provide the estimate and the actual
costs is on a best-efforts basis. The determination of the
estimated costs is solely within the discretion of the Lessor.
Nonpayment of the estimated or actual direct costs will provide
Lessor with the same legal rights with respect to such nonpayment
that it has with respect to nonpayment of the base rent. No
interest or earnings shall be payable by Lessor to Lessee if any
sums accumulate pursuant to the operating costs paragraph; Lessee
shall have no interest or ownership with respect to any sums
accumulated by Lessor.
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5. SECURITY DEPOSIT.
Lessee shall deposit with Lessor upon execution hereof Sixteen Thousand,
Nine Hundred Eighty Six Dollars and 76/100 ($16,986.76); prepaid rent for
month 1, Seven Thousand Four Hundred Forty Eight and 38/100 ($7,448.38)
and Nine Thousand Five Hundred Thirty Eight and 38/100 ($9,538.38) as a
security deposit for Lessee's faithful performance of Lessee's
obligations hereunder. If Lessee fails to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this
lease, Lessor may use, apply or retain all or any portion of said deposit
for the payment of any, rent or other charge in default or for the
payment of any other sum to which Lessor may become obligated by reason
of Lessee's default, or to compensate Lessor for any loss or damage which
Lessor may suffer thereby. If Lessor so uses or applies all or any
portion of said deposit, Lessee shall within ten (10) days after written
demand therefor deposit cash with Lessor in an amount sufficient to
restore said deposit to the full amount then required of Lessee. If the
monthly rent shall from time to time, increase during the term of this
lease, Lessee shall, at the time of such increase, deposit with Lessor
additional money as a security deposit so that the total amount of the
security deposit held by Lessor shall at all times bear the same
proportion to the then current base rent as the initial security deposit
bears to the initial base rent. Lessor shall not be required to keep
said security deposit separate from its general accounts. If Lessee
performs all of Lessee's obligations hereunder, said deposit or so much
thereof as has not theretofore been applied by Lessor, shall be returned,
without payment of interest or other increment for its use, to Lessee (or
at Lessor's option, to the last assignee, if any, of Lessee's interest
hereunder) at the expiration of the term hereof, and after Lessee has
vacated the premises. No trust relationship is created herein between
Lessor and Lessee and Lessee with respect to said security deposit.
6. USE.
6.1 USE. The premises shall be used and occupied only for the
warehousing, packaging and mailing of merchandise related to the
Birthday Express, Children's Party Catalog and accessory retail
operations as are legal within the City of Xxxxxxxx zoning code or
any other use which is reasonably comparable and for no other
purpose.
6.2 COMPLIANCE WITH LAW. Lessee shall at Lessee's expense, promptly
comply with all applicable statutes, ordinances, rules,
regulations, orders, covenants, and restrictions of record, and
requirements of any life insurance underwriters or rating bureaus,
now in effect or which may hereafter come into effect, whether or
not they reflect a change in policy from that now existing, during
the term or any part of the term hereof, relating in any manner to
the premises and the occupation and use by Lessee of the premises
and of the common areas. Lessee shall not use nor permit the use
of the premises or the common areas in any manner that will tend
to create waste or a nuisance or shall tend to disturb other
occupants of the industrial center.
6.3 CONDITION OF PREMISES.
(a) Lessor shall deliver the premises to Lessee clean and free
of debris on the lease commencement date (unless Lessee is already
in possession) and Lessor warrants to Lessee that the plumbing,
lighting, air conditioning, heating, and loading doors in the
premises shall be in good operating condition on the lease
commencement date. In the event that it is determined that the
warranty has been violated, then it shall be the obligation of
Lessor, after receipt of written notice from Lessee setting forth
with specificity the nature of the violation, to promptly, at
Lessor's sole cost rectify such violation. Lessee's failure to
give such written notice to Lessor within thirty (30) days after
the lease commencement date shall cause the conclusive presumption
that Lessor has complied with all of Lessor's obligations
hereunder. The warranty contained in this paragraph 6.3 (a) shall
be of no force or effect if prior to the date of this lease,
Lessee was an owner or occupant of the premises.
(b) Except as otherwise provided in this lease, Lessee hereby
accepts the premises in their condition existing as of the lease
commencement date or the date that Lessee takes possession of the
premises, whichever is earlier; subject to all applicable zoning,
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municipal county and state laws, ordinances and regulations
governing and regulating the use of the premises, and any
covenants or restrictions of record, and accepts this lease
subject thereto and to all matters disclosed thereby and by any
exhibits attached hereto. Lessee acknowledges that neither Lessor
nor Lessor's agent has made any representation or warranty as to
the present or future suitability of the premises for the conduct
of Lessee's business.
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREAS SERVICES.
7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of paragraph 4.2
(Operating Expenses), 6 (Use), 7.2 (lessee's Obligations) and 9
(Damage or Destruction) and except for damage caused by any
negligent or intentional act or omission of Lessee, Lessee's
employees, suppliers, shippers, customers, or invitees, in which
event Lessee shall repair the damage. Lessor, at Lessor's
expense, subject to reimbursement pursuant to paragraph 4.2, shall
keep in good condition and repair the foundations, exterior walls,
structural condition of interior bearing walls, and roof of the
premises, as well as the parking lots, walkways, driveways,
landscaping, fences, signs and utility installations of the common
areas and all parts thereof as well as providing the services for
which there is an operating expense pursuant to paragraph 4.2.
Lessor shall not, however, be obligated to paint the interior
surface of exterior walls, nor shall Lessor be required to
maintain, repair or replace windows, doors or plate glass of the
premises. Lessor shall have no obligation to make repairs under
this paragraph 7.1 until a reasonable time after receipt of
written notice from Lessee of the need for such repairs. Lessor
shall periodically, at its sole discretion, paint the exterior
building walls. The cost of any such building maintenance items
shall be in accordance with all provisions in paragraph 4.2
(Operating Expenses) of this lease. Lessor shall not be liable
for damages or loss of any kind or nature by reason of Lessor's
failure to furnish any common areas services when such failure is
caused by accident, breakage, repairs, strikes, lockout or other
labor disturbances or disputes of any character, or by any other
cause beyond the reasonable control of Lessor.
7.2 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of paragraph 6 (Use), 7.1
(Lessor's Obligations), and 9 (Damage or Destruction) Lessee, at
Lessee's expense shall keep in good condition and repair the
premises and every part thereof (whether or not the damaged
portion of the premises or the means of repairing the same are
reasonably or readily accessible to Lessee) including, without
limiting the generality of the foregoing, all plumbing, heating,
ventilating and air conditioning systems, electrical and lighting
facilities, and equipment within the premises, fixtures, interior
walls and interior surfaces of exterior walls, ceilings, windows,
doors, plate glass, and skylights located within the premises.
Lessor reserves the right to procure and maintain the ventilating
and air conditioning system maintenance contract and if Lessor so
elects, Lessee shall reimburse Lessor upon demand, for the cost
thereof.
(b) If Lessee fails to perform Lessee's obligations under this
paragraph 7.2 or under any other paragraph of this Lease, Lessor
may enter upon the premises after ten (10) days prior written
notice to Lessee (except in the case of emergency, in which no
notice shall be required), perform such obligations on Lessee's
behalf and put the premises in good order, condition and repair,
and the cost thereof together with interest thereon at the maximum
rate then allowable by law shall be due and payable as additional
rent to Lessor together with Lessee's next base rent installment.
(c) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the premises to Lessor in the
same condition as received, ordinary wear and tear accepted, clean
and free of debris. Any damage or deterioration of the premises
shall not be deemed ordinary wear and tear if the same could have
been prevented by good maintenance practices. Lessee shall repair
any damage to the premises
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occasioned by the installation or removal of Lessee's trade
fixtures, alterations, furnishings and equipment, notwithstanding
anything to the contrary otherwise stated in this lease. Lessee
shall leave the air lines, power panels, electrical distribution
systems, lighting fixtures, space heaters, air conditioning,
plumbing and fencing on the premises in good operating condition.
7.3 ALTERATIONS AND ADDITIONS.
(a) Lessee shall not without Lessor's prior written consent,
make any alterations, improvements, additions, or utility
installations on or about the premises, or the industrial center,
except for nonstructural alterations to the premises not exceeding
$2,500 in cumulative costs, during the term of this Lease. In any
event, whether or not in excess of $2,500 in cumulative cost,
Lessee shall make no change or alterations to the interior of the
premises, the exterior of the building nor the industrial center
without Lessor's prior written consent. As used in this paragraph
7.3 the term "Utility Installation" shall mean carpeting, window
coverings, air lines, power panels, electrical distribution
systems, lighting fixtures, space heaters, air conditioning,
plumbing and fencing. Lessor may require that Lessee remove any
or all of said alterations, improvements, additions or utility
installations at the expiration of the term, and restore the
premises and the industrial center to their prior condition.
Lessor may require Lessee to, provide Lessor, at Lessee's sole
cost and expense, a lien and complete bond in an amount equal to
one and one half times the estimated cost of such improvements, to
insure Lessor against any liability for mechanic's and
materialmen's liens and to insure completion of the work. Should
Lessee make any alterations, improvements, additions, utility
installations, without the prior approval of Lessor, Lessor may,
at any time during the term of this Lease, require that Lessee
remove any or all of the same.
(b) Any alterations, improvements, additions or utility
installations in or about the premises or the industrial center
that Lessee shall desire to make and which requires the consent of
the Lessor shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent, the
consent shall be deemed conditioned upon Lessee acquiring a permit
to do so from appropriate governmental agencies, the furnishing of
a copy thereof to Lessor prior to the commencement of the work and
the compliance by Lessee of all conditions of said permits in a
prompt and expeditious manner.
(c) Lessee shall pay when due, all claims for labor or
materials furnished or alleged to have been furnished to or for
Lessee at or for use in the premises, which claims are or may be
secured by any mechanics or materialmen's lien against the
premises, or the industrial center, or any interest therein.
Lessee shall give to Lessor not less than ten (10) days notice
prior to the commencement of any work in the premises, and Lessor
shall have the right to post notices of non-responsibility in or
on the premises or the building as provided by law. If Lessee
shall, in good faith, contest the validity of such lien, claim or
demand, then Lessee shall, at its sole expense defend itself and
Lessor against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the premises of the industrial
center, upon the condition that if Lessor shall require, Lessee
shall furnish to Lessor a surety bond satisfactory to Lessor in an
amount equal to such contested lien claim or demand indemnifying
Lessor against liability for the same and holding the premises and
the industrial center free from the effect of such lien or claim
in addition, Lessor may require Lessee to pay Lessor's attorneys
fees and costs in participating in such action if Lessor shall
decide it is to Lessor's best interest to do so.
(d) All alterations, improvements, additions, utility
installations (whether or not such utility installations
constitute trade fixtures of Lessee) , which may be made on the
premises, shall be the property of Lessor and shall remain upon
and be surrendered with the premises at the expiration of the
lease term, unless Lessor requires their removal pursuant to
paragraph 7.3(a) Notwithstanding the provisions of this paragraph
7.3(d). Lessee's machinery and equipment other than that which is
affixed to the premises so that it cannot be removed without
material damage to the premises and
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other than utility installations, shall remain the property of
Lessee and may be removed by Lessee subject to the provisions of
paragraph 7.2.
7.4 UTILITY ADDITIONS. Lessor reserves the right to install new or
additional utility facilities throughout the building and the
common areas for the benefit of Lessor or Lessee, or any other
Lessee of the industrial center, including, but not by way of
limitation, such utilities as plumbing, electrical systems,
security systems, communication systems, and fire protection and
detector systems, so long as such installations do not
unreasonably interfere with Lessee's use of the premises.
8. INSURANCE INDEMNITY.
8.1 LIABILITY INSURANCE - LESSEE. Lessee shall 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 Lessor against any liability arising out of the use,
occupancy or maintenance of the premises and the industrial
center. Such insurance shall be an amount not less than
$500,000.00 per occurrence. The policy shall insure performance
by Lessee of the indemnity provisions of this paragraph 8. The
limits of said Insurance shall not however limit the liability of
Lessee hereunder.
8.2 LIABILITY INSURANCE - LESSOR. Lessor shall obtain and keep in
force during the term of this lease a policy of Combined Single
Limit Bodily injury and Property Damage Insurance insuring Lessor
but not Lessee against any liability arising out of the ownership,
use, occupancy or maintenance of the industrial center in an
amount not less than $500,000.00 per occurrence.
8.3 PROPERTY INSURANCE. Lessor shall obtain and keep in force during
the term of this lease a policy or policies of insurance, covering
loss or damage to the industrial center improvements, but not
Lessee's personal property, fixtures, equipment or tenant
improvements, in an amount not to exceed the full replacement
value thereof, as the same may exist from time to time, providing
protection against all perils included within the classification
of fire, extended coverage, vandalism, malicious mischief, flood
(in the event same is required by a lender having a lien on the
premises) special extended perils ("all risk"' as such term is
used in the insurance industry), plate glass insurance and such
other insurance as Lessor deems advisable. In addition, Lessor
shall obtain and keep in force, during the term of this Lease, a
policy of rental value insurance covering a period of one year,
with loss payable to Lessor, which insurance shall also cover all
operating expenses for said period in the event that the premises
shall suffer an insured loss as defined in paragraph 9.1 (g)
hereof, the pro rata deductible amounts under the casualty
insurance policies relating to the premises shall be paid by
Lessee, subject to all provisions in paragraph 9.0 (Damage and
Destruction) of this lease. Lessee shall have its rental
obligation abated in direct proportion to the timing and amount of
funds received by the Lessor from the Insurance Policy covering
rental value insurance.
8.4 PAYMENT OF PREMIUM INCREASE.
(a) After the term of this lease has commenced, Lessee shall
not be responsible for paying Lessee's share of any increase in
the property insurance premium for the industrial center specified
by Lessor's insurance carrier as being caused by the use, acts or
omissions, of any other Lessee of the industrial center, or by the
nature of such other Lessee's occupancy which create an
extraordinary or unusual risk.
(b) Lessee however shall pay the entirety of any increase in
the property insurance premium for the industrial center over what
it was immediately prior to the commencement of the term of this
lease, if the increase is specified by Lessor's insurance carrier
as being caused by the nature of Lessee's occupancy or any act or
omission of Lessee.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in
companies holding a "General Policyholders Rating of A-1 or AAA or
better or such other rating as may be
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required by a lender having a lien on the premises, as set forth
in the most current issue of "Best's Insurance Guide". Lessee
shall not do or permit to be done anything which shall invalidate
the insurance policies carried by Lessor. Lessee shall deliver to
Lessor copies of liability insurance policies required under
paragraph 8.1 or certificates evidencing the existence and amounts
of such insurance within seven (7) days after the commencement
date of this Lease. No such policy shall be cancelable or subject
to reduction of coverage or other modifications except after
thirty (30) days prior written notice to Lessor. Lessee shall, at
least thirty (30) days prior to the expiration of such policies,
furnish Lessor with renewals or "binders" thereof.
8.6 WAIVER OF SUBROGATION. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery
against the other for loss or damage arising out of or incident to
the perils insured against which perils occur in, on or about the
premises whether due to the negligence of Lessor or Lessee or
their agents, employees contractors and/or invitees. Lessee and
Lessor shall, upon obtaining the policies of insurance required
give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Lease.
8.7 INDEMNITY. Lessee shall indemnify and hold harmless Lessor from
and against any and all claims arising from Lessee's use of the
industrial center, or from the conduct of Lessee's business or
from any 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 act or omission of Lessee, or any
of Lessee's agents, contractors, or employees, and from and
against all costs, attorney 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 any such claim, Lessee upon
notice from Lessor shall defend the same at Lessee's expense by
counsel reasonably satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense. Lessee, as a material part
of the consideration to Lessor, hereby assumes all risk of damage
to property of Lessee or injury to persons, in, upon or about the
industrial center arising from any cause and Lessee hereby waives
all claims in respect thereof against Lessor.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any
loss of income therefrom or for damage to the goods, wares,
merchandise or other property of Lessee, invitees, customers, or
any other non employee persons of Lessee in or about the premises
or the industrial center, nor shall Lessor be liable for injury to
the person of Lessee, Lessee's employees, agents or contractors,
whether 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, or
from any other cause, whether said damage or injury results from
conditions, arising upon the premises or upon other portions of
the industrial center, 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 Lessee. Lessor
shall not be liable for any damages arising from any act or
neglect of any other Lessee, occupant or user of the industrial
center, nor from the failure of Lessor to enforce the provisions
of any other lease of the industrial center.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises, Partial Damage" shall mean if the premises are
damaged or destroyed to the extent that the cost of repair is less
than fifty percent of the then replacement cost of the premises.
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(b) "Premises, Total Destruction" shall mean if the premises
are damaged or destroyed to the extent that the cost of repair is
fifty percent or more of the then replacement cost of the
premises.
(c) "Premises, Building Partial Damage" shall mean if the
building of which the premises are a part is damaged or destroyed
to the extent that the cost to repair is less than fifty percent
of the then replacement cost of the building.
(d) "Premises, Building Total Destruction" shall mean if the
building of which the premises are a part is damaged or destroyed
to the extent that the cost to repair is fifty percent or more of
the then replacement cost of the building.
(e) "Industrial Center Buildings" shall mean all of the
buildings on the industrial center site.
(f) "Industrial Center Buildings, Total Destruction" shall mean
if the industrial center buildings are damaged or destroyed to the
extent that the cost of repair is fifty percent or more of the
then replacement cost of the industrial center buildings.
(g) "Insured Loss" shall mean damage or destruction which was
covered by an event required to be covered by the insurance
described in paragraph 8. The fact that an insured loss has a
deductible amount shall not make the loss an uninsured loss.
(h) "Replacement Cost" shall mean the amount of money necessary
to be spent in order to repair or rebuild the damaged area to the
condition that existed immediately prior to the damage occurring
excluding all improvements made by Lessees.
9.2 PREMISES PARTIAL DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.
(a) Insured Loss. Subject to the provisions of paragraph 9.4
and 9.5, if at any time during the term of this lease there is
damage which is an insured loss and which falls into the
classification of either premises damage or premises building
partial damage, then Lessor shall at Lessor's expense repair such
damage to the premises, but not Lessee's fixtures, equipment or
tenant improvements as soon as reasonably possible and this lease
shall continue in full force and effect.
(b) Uninsured Loss. Subject to the provisions of paragraph 9.4
and 9.5, if at any time during the term of this Lease, there is
damage which is not an insured loss, and which falls within the
classification of premises partial damage or premises building
partial damage, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's
expense), which damage prevents Lessee from using the premises,
Lessor may at Lessor's option either (1) repair such damage as
soon as reasonably possible, at Lessor's expense, in which event
this lease shall continue in full force and effect, or (2) give
written notice to Lessee within thirty (30) days after the date of
the occurrence of such damage of Lessor's intention to cancel and
terminate this lease as of the date of the occurrence of such
damage. In the event Lessor elects to give such notice of
Lessor's intention to cancel and terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of
such notice to give written notice to Lessor of Lessee's intention
to repair such damage at Lessee's expense, without reimbursement
from Lessor in which event this lease shall continue in full force
and effect and Lessee shall proceed to make such repairs as soon
as reasonably possible. If Lessee does not give such notice
within such Ten (10) day period this lease shall be canceled and
terminated as of the date of the occurrence of such damage.
9.3 PREMISES TOTAL DESTRUCTION; PREMISES BUILDING TOTAL DESTRUCTION;
INDUSTRIAL CENTER BUILDINGS TOTAL DESTRUCTION.
(a) Subject to the provisions of paragraph 9.4 and 9.5 if at
any time during the term of this lease there is damage whether or
not it is an insured loss, and which falls into the
classifications of either (1) premises total destruction, or (2)
premises building total destruction or (3) industrial center
buildings total destruction, then Lessor may at
9
Lessor's option either (1) repair such damage or destruction, but
not Lessee's fixtures, equipment or tenant improvements, as soon
as reasonably possible at Lessor's expense, and this lease shall
continue in full force and effect, or (2) give written notice to
Lessee within thirty (30) days after the date of occurrence of
such damage of Lessor's intention to cancel and terminate this
Lease, in which case this lease shall be canceled and terminated
as of the date of the occurrence of such damage.
9.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 9.4(b), if at any time during the last
six months of the term of this Lease, there is substantial damage,
whether or not an insured loss; which falls within the
classification of premises partial damage, Lessor may at Lessor's
option cancel and terminate this lease as of the date of
occurrence of such damage by giving written notice to Lessee of
Lessor's election to do so within thirty (30) days after the date
of occurrence of such damage.
(b) Notwithstanding paragraph 9.4 in the event that Lessee has
an option to extend or renew this Lease, and the time within which
said option may be exercised has not yet expired. Lessee shall
exercise such option, if it is to be exercised at all, no later
than twenty (20) days after the occurrence of an insured Loss
failing without the classification of premises partial damage
during the last six (6) months of the term of this Lease. If
Lessee duly exercises such option during said twenty (20) day
period, Lessor shall at Lessor's expense, repair such damage, but
not Lessee's fixtures, equipment or tenant improvements; as soon
as reasonably possible and this lease shall continue in full force
and effect. If Lessee fails to exercise such option during said
twenty (20) day period, then Lessor may at Lessor's option
terminate and cancel this lease as of the expiration of said
twenty (20) day period by giving written notice to Lessee of
Lessor's selection to do so within ten (10) days after the
expiration of said twenty (20) day period, notwithstanding any
term or provision in the grant of option to the contrary.
9.5 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event Lessor repairs or restores the premises
pursuant to the provisions of this paragraph 9, the rent payable
hereunder for the period during which such damage, repair or
restoration continues shall be abated in proportion to the degree
to which Lessee's use of the premises is impaired. Except for
abatement of rent, if any, Lessee shall have no claim against
Lessor for any damage suffered by reason of any such damage,
destruction, repair or restoration.
(b) If Lessor shall be obligated to repair or restore the
premises under the provisions of this paragraph 9 and shall not
the such repair or restoration within ninety (90) days after such
obligation shall accrue, Lessee may at Lessee's option cancel and
terminate this lease by giving Lessor written notice of Lessee's
election to do so at any time prior to the commencement of such
repair or restoration. In such event this lease shall terminate
as of the date of such notice.
9.6 TERMINATION - ADVANCE PAYMENTS. Upon termination of this lease
pursuant to this paragraph 9, an equitable adjustment shall be
made concerning advance rent and any advance payments made by
Lessee to Lessor. Lessor shall, in addition, return to Lessee so
much of Lessee's security deposit as has not theretofore been
applied by Lessor.
9.7 WAIVER. Lessor and Lessee waive the provisions of any statute
which relate to termination of leases when leased property is
destroyed and agree that such event shall be governed by the terms
of this Lease.
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10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the real property tax as
defined in paragraph 10.3 applicable to the industrial center
subject to reimbursement by Lessee of Lessee's share of such taxes
in accordance with the provisions of paragraph 4.2, except as
otherwise provided in paragraph 10.2.
10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be responsible for
paying Lessee's share of any increase in real property tax
specified in the tax assessor's records and work sheets as being
caused by additional improvements placed upon the industrial
center by other Lessees or by Lessor for the exclusive enjoyment
of such other Lessees. Lessee shall, however, pay to Lessor at
the time that operating expenses are payable under paragraph
4.2(c) the entirety of any increase in real property tax, if
assessed solely by reason of additional improvements placed upon
the premises by Lessee or at Lessee's request.
10.3 DEFINITION OF "REAL PROPERTY TAX". As used herein, the term "real
property tax" shall include any term of real estate tax or
assessment, general, special, ordinary or extraordinary, and any
license fee, commercial rental tax, improvement bond or bonds,
levy or tax (other than inheritance, personal income or estate
taxes) imposed on the industrial center or any portion thereof by
any authority having the direct or indirect power to tax,
including any city, county, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage or other
improvement district, thereof, as against any legal or equitable
interest of Lessor in the industrial center or in any portion
thereof, as against Lessor's right to rent or other income
therefrom, and as against Lessor's business of leasing the
industrial center.
10.4 JOINT ASSESSMENT. If the industrial center is not separately
assessed, Lessee's share of the real property tax liability shall
be an equitable proportion of the real property taxes for all of
the land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable
determination thereof in good faith, shall be conclusive. Lessor
acknowledges that the Industrial Center consists of two adjacent
tax parcels (#33-26-05-9031 1700 33 2605, 50 1700). The two
Industrial Center parcels are separately assessed.
10.5 PERSONAL PROPERTY TAXES.
(a) 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.
(b) If any of Lessee's said personal property shall be assessed
with Lessor's real property, Lessee shall, pay to Lessor the taxes
attributable to Lessee within ten (10) days after receipt of a
written statement setting forth the taxes applicable to Lessee's
property.
11. UTILITIES.
Lessee shall pay for all water, gas, heat, light, power, telephone and
other utilities and services supplied to the premises, together with any
taxes thereon if any such services are not separately metered to the
premises. Lessee shall pay at Lessor's option, either Lessee's share of
a reasonable proportion to be determined by Lessor of all charges jointly
metered with other premises in the building.
12. ASSIGNMENT AND SUBLETTING.
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12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise
transfer or encumber all or any part of Lessee's interest in the
lease or in the premises, without Lessor's prior written consent,
which Lessor shall not unreasonably withhold. Lessor shall
respond to Lessee's request for consent hereunder in a timely
manner and any attempted assignment, transfer, mortgage,
encumbrance or subletting without such consent shall be void, and
shall constitute a breach of this lease without the need for
notice to Lessee under paragraph 13.1.
12.2 LESSEE AFFILIATE. Notwithstanding the provisions of paragraph
12.1 thereof, Lessee may assign or sublet the premises, or any
portion thereof, without Lessor's consent, to any corporation
which controls, is controlled by or is under common control with
Lessee, or to any corporation resulting from the merger or
consolidation with Lessee, or to any person or entity which
acquires all the assets of Lessee as a going concern of the
business that is being conducted on the premises, all of which are
referred to as "Lessee Affiliate" provided that before such
assignment shall be effective said assignee shall assume, in full;
the obligations of Lessee under this Lease. Any such assignment
shall not in any way affect or limit the liability of Lessee under
the terms of this lease even if after such assignment or
subletting the terms of this lease are materially changed or
altered without the consent of Lessee, the consent of whom shall
not be necessary.
12.3 TERMS AND CONDITIONS OF ASSIGNMENT. Regardless of Lessor's
consent, no assignment shall release Lessee of Lessee's
obligations hereunder or after the primary liability of Lessee to
pay the base rent and Lessee's share of operating expenses, and to
perform all other obligations to be performed by Lessee hereunder.
Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment. Neither a delay in
the approval or disapproval of such assignment nor the acceptance
of rent shall constitute a waiver or estoppel of Lessor's right to
exercise its remedies for the breach of any of the terms or
conditions of this paragraph 12 or this Lease. Consent to one
assignment shall not be deemed consent to any subsequent
assignment in the event of default by any assignee of Lessee or
any successor of Lessee, in the performance of any of the terms
hereof. Lessor may proceed directly against Lessee without the
necessity of exhausting remedies against said assignee. Lessor
may consent to subsequent assignments of this lease or amendments
or modifications of this lease with assignees of Lessee, without
notifying Lessee, or any successor of Lessee, and without
obtaining its or their consent thereto and such action shall not
relieve Lessee of liability under this Lease.
12.4 TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. Regardless of
Lessor's consent, the following terms and conditions shall apply
to any subletting by Lessee of all or any part of the premises and
shall be included in subleases.
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any
sublease heretofore or hereafter made by Lessee, and Lessor may
collect such rent and income and apply same toward Lessee's
obligations under this Lease, provided, however, that until a
default shall occur in the performance of Lessee's obligations
under this Lease, Lessee may receive, collect and enjoy the rents
accruing under such sublease. Lessor shall not by reason of this
or any other assignment of such sublease to Lessor nor by reason
of the collection of the rents from sublessee, be deemed liable to
the sublessee for any failure of Lessee to perform and comply with
any of Lessee's obligations to such sublease under such sublease.
Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating
that default exists in the performance of Lessee's obligations
under this Lease, to pay to Lessor the rents due and to become due
under the sublease. Lessee agrees that such sublessee shall have
the right to rely upon any such statement and request from Lessor
and that such sublessee shall pay such rents to Lessor without any
obligation or right to inquire as to whether such default exists
and notwithstanding any notice from or claim from Lessee to the
contrary. Lessee shall have no right or claim against such
sublessee or Lessor for any such rents so paid by said sublessee
to Lessor.
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(b) No sublease entered into by Lessee shall be effective
unless and until it has been approved in writing by Lessor in
entering into any sublease. Lessee shall use only such form of
sublease as is satisfactory to Lessor and once approved by Lessor,
such sublease shall not be changed or modified without Lessor's,
prior written consent. Any sublease shall, by reason of entering
into a sublease under this lease, be deemed, for the benefit of
Lessor, to have assumed and agreed to conform and comply with each
and every obligation herein to be performed by Lessee other than
such obligations as are contrary to or inconsistent with
provisions contained in a sublease to which Lessor has expressly
consented in writing.
(c) If Lessee's obligations under this lease have been
guaranteed by third parties, then a sublease, and Lessor's consent
thereto, shall not be effective unless said guarantees give their
written consent to such sublease and the terms thereof.
(d) The consent by Lessor to any subletting shall not release
Lessee from its obligations or after the primary liability of
Lessee to pay the rent and perform and comply with all of the
obligations of Lessee to be performed under this Lease.
(e) The consent by Lessor to any subletting shall not
constitute a consent to any subsequent subletting by Lessee or to
any assignment or subletting by the sublessee. However, Lessor
may consent to subsequent subletting and assignments of the
sublease or any amendments or modifications thereto without
notifying Lessee or anyone else liable on the lease or sublease
and without containing their consent and such action shall not
relieve such persons from liability.
(f) In the event of any default under this Lease, Lessor may
proceed directly against Lessee, any guarantors or any one else
responsible for the performance of this Lease, including the
sublessee, without first exhausting Lessor's remedies against any
other person or entity responsible therefor to Lessor or any
security held by Lessor or Lessee.
(g) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor at its option and without any
obligation to do so, may require any sublease to attorn to Lessor,
in which event Lessor shall undertake the obligation of Lessee
under such sublease from the time of the exercise of said option
to the termination of such sublease, provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid
by such sublessee to Lessee or for any other prior defaults of
Lessee under such sublease.
(h) Each and every consent required of Lessee under a sublease
shall also require the consent of Lessor.
(i) No sublease shall further assign or sublet all or any part
of the premises without Lessor's prior written consent.
(j) Lessor's written consent to any subletting of the premises
by Lessee shall not constitute an acknowledgment that no default
then exists under this lease of the obligations to be performed by
Lessee nor shall such consent be deemed a waiver of any then
existing default except as may be otherwise stated by Lessor at
the time.
(k) With respect to any subletting to which Lessor has
consented, Lessor agrees to deliver a copy of any notice of
default by Lessee to the sublessee. Such sublessee shall have the
right to cure a default of Lessee within ten (10) days after
service of said notice of default upon such sublessee, and the
sublessee shall have a right of reimbursement and offset from and
against Lessee for any such defaults cured by the sublessee.
12.5 ATTORNEY'S FEES. In the event, Lessee shall assign or sublet the
premises or request the consent of Lessor to any assignment or
subletting or if Lessee shall request the consent of Lessor for
any act Lessee proposes to do then Lessee shall pay Lessor's
13
reasonable attorney's fees incurred in connection therewith, such
attorney's fees not to exceed $350.00 for each such request.
13. DEFAULT REMEDIES.
13.1 DEFAULT. The occurrence of any one or more of the following
events shall constitute a material default of this lease by
Lessee.
(a) The vacating or abandonment of the premises by Lessee
(b) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and when
due, where such failure shall continue for a period of three (3)
days after written notice thereof from Lessor to Lessee. In the
event that Lessor serves Lessee with a Notice to Pay Rent or Quit
pursuant to applicable Unlawful Detainer statutes such Notice to
Pay Rent or Quit shall also constitute the notice required by this
subparagraph.
(c) Except as otherwise provided in this Lease, the failure by
Lessee to observe or perform any of the covenants, conditions or
provisions of this lease to be observed or performed by Lessee,
other than described in paragraph (b) above, where such failure
shall continue for a period of ten (10) days after written notice
thereof from Lessor to Lessee, provided, however, that if the
nature of Lessee's noncompliance is such that more than ten (10)
days are reasonable required for its cure, then Lessee shall not
be deemed to be in default if Lessee commenced such cure within
said ten (10) day period and thereafter obligingly prosecutes such
cure to completion. To the extent permitted by law, such ten (10)
day notice shall constitute the sole and exclusive notice required
to be given to Lessee under applicable Unlawful Detainer statutes.
(d) (1) The making by Lessee of any general arrangement or
general assignment for the benefit of creditors, (2) Lessee
becomes a "debtor" as defined in 11 U.S.C. & 101 or any successor
statute thereto, (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days, (3) the
appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the premises, or
of Lessee's interest in this Lease, where possession is not
restored to Lessee within thirty (30) days; or (4) the attachment,
execution or other judicial seizure of substantially all of
Lessee's assets located at the premises or of Lessee's interest in
this lease, where such seizure is not discharged within thirty
(30) days. In the event that any provision of this paragraph 13.1
(d) is contrary to any applicable law, such provision shall be of
no force or effect.
(e) The discovery by Lessor that any financial statement given
to Lessor by Lessee, any assignee of Lessee, any subtenant of
Lessee, any successor in interest of Lessee or any guarantor of
Lessee's obligation hereunder was materially false.
13.2 REMEDIES. In the event of any such material default by Lessee,
Lessor may at any time thereunder, with or without notice or
demand and without limiting Lessor in the exercise of any right or
remedy which Lessor may have by reason of such default. Lessee
shall not be In default of this lease by its act of exercising its
early lease termination option - see Exhibit E.
(a) Terminate Lessee's right to possession of the premises by
any lawful means, in which case this lease and the term hereof
shall terminate and Lessee shall immediately surrender possession
of the premises to Lessor. In such event Lessor shall be entitled
to recover from Lessee all damages incurred by Lessor by reason of
Lessee's default including, but not limited to, the cost of
recovering possession of the premises, expenses of reletting,
including necessary renovation and alteration of the premises,
reasonable attorney's fees, and any real estate commission
actually paid, the worth at the time of award by the court having
jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award exceeds the
amount of such rental loss for the same period that Lessee proves
could be reasonably
14
avoided, that portion of the leasing commission paid by Lessor
pursuant to paragraph 15 applicable to the unexpired term of this
Lease.
(b) Maintain Lessee's right to possession in which case this
lease shall continue in effect whether or not Lessee shall have
vacated or abandoned the premises, in such event Lessor shall be
entitled to enforce all of Lessor's rights and remedies under this
Lease, including the right to recover the rent as it becomes due
hereunder.
(c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state wherein
the premises are located. Unpaid installments of rent and other
unpaid monetary obligations of Lessee under the terms of this
lease shall bear interest from the date due at the maximum rate
then allowable by law.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a
reasonable time, but in no event later than ten (10) days after
written notice by Lessee to Lessor and to the holder of any first
mortgage or deed of trust covering the premises whose name and
address shall have theretofore been furnished to Lessee in writing
specifying wherein Lessor has failed to perform such obligation,
provided, however, that if the nature of Lessor's obligation is
such that more than ten (10) days are required for performance
then Lessor shall not be in default if Lessor commences
performance within such ten (10) day period and thereafter
diligently prosecutes the same to completion. In the event of any
material default by Lessor not capable of reasonable cure in the
time and manner specified above, Lessee may at any time thereunder
with or without notice or demand and without limiting Lessee in
the exercise of any right or remedy which Lessee may have by
reason of such default:
(a) Terminate the lease and surrender the premises to
Lessor. In such event, Lessee shall be entitled to recover from
Lessor all damages incurred by Lessee by reason of Lessor's
default;
or,
(b) In the event any condition arises in, or damage
exists to the premises, which condition or damage is within
Lessor's duty to maintain, correct or repair but Lessor falls to
or is unable or unwilling to do so and for which immediate action
is necessary to prevent potential injury to Lessee's customers,
employees, property, or business, Lessee may, but shall not be
required, make such repairs or perform such maintenance
immediately, without notice to Lessor. Lessor shall reimburse
Lessee for the reasonable and necessary costs or such repairs or
maintenance within thirty (30) days after Lessee's demand for
reimbursement submitted to Lessor with an itemized statement of
the repairs and charges.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of base rent, Lessee's share of operating
expenses, or other Sums due hereunder will cause Lessor to incur
costs not contemplated by this lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include, but
are not limited to, processing and accounting charges, and late
charges which may be imposed on Lessor by the terms of any
mortgage or trust deed covering the property. Accordingly, if any
installment of base rent. operating expenses, or any other sum
due from Lessee shall not be received by Lessor or Lessor's
designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall
pay to Lessor a late charge equal to six percent (6%) of such
overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will
incur by reason of late payment by Lessee. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of
Lessee's default with respect to such overdue amount, nor prevent
Lessor from exercising any of the other rights and remedies
granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive
installments of any of the aforesaid monetary obligations of
Lessee, then base rent shall automatically become
15
due and payable quarterly in advance, rather than monthly,
notwithstanding paragraph 4.1 or any other provision of this lease
to the contrary.
14. CONDEMNATION.
If the premises or any portion thereof or the industrial center are taken
under the power of eminent domain, or sold under the threat of the
exercise of said power (all of which are herein called "condemnation"),
this lease shall terminate as to the part so taken as of the date the
condemning authority takes title or possession, whichever first occurs.
If more than ten percent of the floor area of the premises, or more than
twenty five percent of that portion of the common areas designated as
parking for the industrial center is taken by condemnation, Lessee may at
Lessee's option, to be exercised in writing only within thirty (30) days
after Lessor shall have given Lessee written notice of such taking (or in
the absence of such notice, within thirty (30) days after the condemning
authority shall have taken possession) terminate this lease as of the
date the condemning authority takes such possession. If Lessee does not
terminate this lease in accordance with the foregoing, this lease shall
remain in full force and effect as to the portion of the premises
remaining, except that the rent shall be reduced in the proportion that
the floor area of the premises taken bears to the total floor area of the
premises. No reduction of rent shall occur if the only area taken is
that which does not have the premises located thereon. Any award for the
taking of all or any part of the premises under the power of eminent
domain or any payment made under threat of the exercise of such power
shall be the property of Lessor, whether such award be made as
compensation for diminution in value of the leasehold or for the taking
of the fee, or as severance damages, provided, however, that Lessee shall
be entitled to any award for loss of or damage to Lessee's trade fixtures
and removable personal property. In the event that this lease is not
terminated by reason of such condemnation, Lessor shall to the extent of
severance damages received by Lessor in connection with such
condemnation, repair any damage to the premises caused by such
condemnation except to the extent that Lessee has been reimbursed
therefor by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair.
15. BROKER'S FEE.
Upon execution of this lease by both parties, Lessor shall pay all fees
due to Brokers. Lessee hereby warrants that it has no written agreement
with any broker.
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time, upon
not less than ten (10) days prior written notice from the other
party ("requesting party") execute, acknowledge and deliver to the
requesting party, a statement in writing (1) certifying that this
lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the date
to which the rent and other charges are paid in advance, if any,
and (2) acknowledging that there are not, to the responding
party's knowledge, any uncured defaults on the part of the
requesting party, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrance of the premises or of the
business of the requesting party.
(b) At the requesting party's option, the failure to deliver
such statement within such time shall be a material default of
this lease by the party who is to respond, without any further
notice to such party, or it shall be conclusive upon such party
that (1) this lease is in full force and effect without
modification except as may be represented by the requesting party,
(2) there are no incurred defaults in the requesting party's
performance, and (3) if Lessor is the requesting party, not more
than one month's rent has been paid in advance.
(c) If Lessor desires to finance, refinance or sell the
property, or any part thereof, Lessee hereby agrees to deliver to
any lender or purchaser designated by Lessor such financial
statements of Lessee as may be reasonably required by such lender
or purchaser. Such
16
statements shall include the past three (3) years financial
statements of Lessee. All such financial statements shall be
received by Lessor and such lender or purchaser in confidence and
shall be used only for the purposes, herein set forth.
17. LESSOR'S LIABILITY.
The term "Lessor" as used herein shall mean only the owner or owners, at
the time in question, of the fee title or a Lessee's interest in a ground
lease of the industrial center, and except as expressly provided in
paragraph 15, in the event of any transfer of such title or interest,
Lessor heroin named (and in case of any subsequent transfer's, then the
grantor) shall be relieved from and after the date of such transfer or
all liability as respects Lessor's obligations thereafter to be
performed, except for Lessor's obligations set forth in Exhibit C,
provided that any funds in the hands of Lessor or the then grantor at the
time of such transfer, in which Lessee has an interest, shall be
delivered to the grantee. The obligations contained in this lease to be
performed by Lessor shall, subject as aforesaid, be binding on Lessor's
successors and assigns, only during their respective periods of
ownership, except for Lessor obligations set forth in Exhibit C.
18. SEVERABILITY.
The invalidity of any provision of this lease as determined by a court of
competent jurisdiction, shall in no way affect the validity of any other
provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS.
Except as expressly herein provided, any amount due to Lessor not paid
when due shall bear interest at the maximum rate then allowable by law
from the date due. Payment of such interest shall not excuse or cure any
default by Lessee under this Lease, provided, however, that interest
shall not be payable on late charges incurred by Lessee nor on any
amounts upon which late charges are paid by Lessee.
20. TIME OF ESSENCE.
Time is of the essence with respect to the obligations under this Lease.
21. ADDITIONAL RENT.
All monetary obligations of Lessee to Lessor under the terms of this
Lease, including but not limited to Lessee's share of operating expenses
and insurance and tax expenses payable shall be deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS.
This lease contains all agreements of the parties with respect to any
matter mentioned herein. No prior or contemporaneous agreement or
understanding pertaining to any such matter shall be effective. This
lease may be modified in writing only, signed by the parties in interest
at the time of the modification. Except as otherwise stated in this
Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this
transaction, nor the Lessor or any employee or agents of any of said
persons has made any oral or written warranties or representations to
Lessee relative to the condition or use by Lessee of the premises or the
property and Lessee acknowledges that Lessee assumes all responsibility
regarding the Occupation Safety Health Act, the legal use and
adaptability of the premises and the compliances thereof with all
applicable laws and regulations in effect during the term of this Lease,
except as otherwise specifically stated in this Lease.
17
23. NOTICES.
Any notice required or permitted under this lease shall be given when
actually delivered or 48 hours after deposited in United States mail as
certified mail addressed to the address following or to such other
address as may be specified from time to time by either of the parties in
writing.
Lessee: Birthday Express, Inc.
00000-000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Lessor: 405 Business Park Limited Partnership
Continental Real Estate Management Services
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
24. WAIVERS.
No waiver by Lessor or any provision hereof shall be deemed a waiver of
any other provision hereof or of any subsequent breach by Lessee of the
same or any other provision. Lessor's consent to or approval of any act
shall not be deemed to render unnecessary the obtaining of Lessor's
consent to or approval of any subsequent act by Lessee. The acceptance
of rent hereunder by Lessor shall not be a waiver of any preceding breach
by Lessee of any provision hereof other than the failure of Lessee to pay
the particular rent so accepted, regardless of Lessor's knowledge of such
preceding breach at the time of acceptance of such rent.
25. RECORDING.
Either Lessor or Lessee shall, upon request of the other, execute,
acknowledge and deliver to the other a "short form" memorandum of this
lease for recording purposes.
26. HOLDING OVER.
(a) If Lessee does not vacate the leased premises at the time
required, Lessor shall have the option to treat Lessor as a tenant
from month to month, subject to all of the provisions of this
lease except the provisions for term and renewal (and at a rental
rate equal to 125 percent of the rent last paid by Lessee during
the original term for the first two months of the lease period.
After the second month, the rental shall be increased to represent
150 percent hold over cost). Failure of Lessee to remove
fixtures, furniture, furnishings, or trade fixtures which Lessee
is required to remove under this lease shall constitute a failure
to vacate to which this paragraph shall apply if the property not
removed will substantially interfere with occupancy of the
premises by another tenant or with occupancy by Lessor for any
purpose including preparation for a new tenant.
(b) If a month to month tenancy results from a holdover by
Lessee under this paragraph 26, the tenancy shall be terminable at
the end of any monthly rental period on written notice from Lessor
given not less than ten (10) days prior to the termination date
which shall be specified in the notice. Lessee waives any notice
which would otherwise be provided by law with respect to a month
to month tenancy.
27. CUMULATIVE REMEDIES.
No remedy or election hereunder, shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies at law or in
equity.
18
28. COVENANTS AND CONDITIONS.
Each provision of this lease performable by Lessee shall be deemed both a
covenant and a condition.
29. BINDING EFFECT, CHOICE OF LAW.
Subject to any provisions hereof restricting assignment or subletting by
Lessee and subject to the provisions of paragraph 17, this lease shall
bind the parties, successors and assigns. This lease shall be governed
by the laws of the state where the industrial center is located and any
litigation concerning this lease between the parties hereto shall be
initiated in the county in which the industrial center is located.
30. ATTORNEY'S FEES.
If either party named herein bring an action to enforce the terms,
hereof or declare rights hereunder, the prevailing party in any such
action, on trial or appeal, shall be entitled to his reasonable
attorney's fees to be paid by the losing party as fixed by the court.
31. LESSOR'S ACCESS.
Lessor and Lessor's agents shall have the right to enter the premises at
reasonable times for the purpose of inspecting the same, showing the same
to prospective purchasers, lenders, or Lessees, and making such
alterations, repairs, improvements or additions to the premises or to the
building of which they are part as Lessor may deem necessary or
desirable. Lessor may at any time place on or about the premises or the
building any ordinary "For Sale" signs, and Lessor may at any time during
the last 120 days of the term hereof place on or about the premises any
ordinary "For lease" signs. All activities of Lessor pursuant to this
paragraph shall be without abatement of rent, nor shall Lessor have any
liability to Lessee for the same.
32. AUCTIONS.
Lessee shall not conduct nor permit to be conducted, either voluntarily
or involuntarily, any auction upon the premises or the common areas
without first having obtained Lessor's prior written consent
notwithstanding anything to the contrary in this lease. Lessor shall not
be obligated to exercise any standard of reasonableness, in determining
whether to grant such consent.
33. SIGNS.
Lessee shall have the right, at its sole cost, to professionally install
two building exterior wall mounted signs, subject to the following
conditions:
1) Lessee shall have the right to install one (1) sign on the
eastern building wall, facing I-405. Such sign shall not
exceed 54 square feet and Lessee shall be responsible for
gaining all required city of Kirkland permits. Lessee
shall submit a sketch of the desired sign to the Lessor for
its approval, such approval shall not be unreasonably
withheld.
19
2) Lessee shall have the right to install one (1) sign on the western
building wall, facing 000xx Xxxxxx. Such sign shall not exceed 36
square feet and Lessee shall be responsible for gaining all
required city of Xxxxxxxx permits. Lessee shall submit a sketch
of the desired sign to the Lessor for its approval, such approval
shall not be unreasonably withhold.
3) Lessee shall have the right to seek appropriate permits
from the city of Xxxxxxxx to install temporary sign and/or
displays on the roof of the building. Such displays shall
not be on the roof in excess of 14 days and all displays
shall be approved in advance by the Lessor, such approval
shall not be unreasonably withheld.
34. MERGER.
The voluntary or other surrender of this lease by Lessee, or a mutual
cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall at the option of Lessor terminate all or any existing
subtenancies or may at the option of Lessor, operate as an assignment to
Lessor of any or all of such subtenancies.
35. CONSENTS.
Except for paragraph 33 hereof, wherever in this lease the consent of one
party is required to an act of the other party such consent shall not be
unreasonably withheld or delayed.
36. GUARANTOR.
In the event that there is a guarantor of this Lease, said guarantor
shall have the same obligations as Lessee under this Lease.
37. QUIET POSSESSION.
Upon Lessee paying the rent for the premises and observing and performing
all of the covenants, conditions and provisions on Lessee's part to be
observed and performed hereunder, Lessee shall have quiet possession of
the premises for the entire term hereof subject to all of the provisions
of this lease. The individuals executing this lease on behalf of Lessor
represent and warrant to Lessee that they are fully authorized and
legally capable of executing this lease on behalf of Lessor and that such
execution is binding upon all parties, holding an ownership interest in
the property.
38. SECURITY MEASURES.
Lessee hereby acknowledges that Lessor shall have no obligation
whatsoever to provide guard service or other security measures for the
benefit of the premises or the industrial center. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and
the property of Lessee and of Lessee's agents, and invitees from act of
third parties. Nothing herein contained shall prevent Lessor at Lessor's
sole option, from providing security protection for the industrial center
or any part thereof, in which event the cost thereof shall be included
within the definition of operating expenses, as set forth in paragraph
4.2(b).
39. EASEMENTS.
Lessor reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Lessor deems necessary or
desirable and to cause the recordation of parcel maps and restrictions,
so long as such easements, rights, dedications, maps and restrictions
do not unreasonably interfere with the use of the premises by Lessee.
Lessee shall sign any
20
of the aforementioned documents upon request of Lessor and failure to do
so shall constitute a material default of this lease by Lessee without
the need for further notice to Lessee.
40. PERFORMANCE UNDER PROTEST.
If at any time a dispute shall arise as to any amount or sum of money to
be paid by one party to the other under the provisions hereof, the party
against whom the obligation to pay the money is asserted shall have the
right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the
part of said party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation, on the part of said
party to pay such sum or any part thereof, said party shall be entitled
to recover such sum or so much thereof as it was not legally required to
pay under the provisions of this lease.
Any legal action relating to this lease shall be brought only in King
County Superior Court in the State of Washington.
41. AUTHORITY.
If Lessee is a corporation, trust, or general or limited partnership,
each individual executing this lease on behalf of such entity represents
and warrants that he or she is duly authorized to execute this lease on
behalf of said entity. If Lessee is a corporation, trust, or
partnership, Lessee shall, within thirty (30) days after execution of
this lease, deliver to Lessor evidence of such authority satisfactory to
Lessor.
42. CONFLICT.
Any conflict between the printed provisions of this lease and the
typewritten or handwritten provisions, if any, shall be controlled by the
typewriter or handwritten provisions.
43. OFFER.
Preparation of this lease by Lessor or Lessor's agent and submission of
same to Lessee shall not be deemed an offer to lease. This lease becomes
binding upon Lessor and Lessee only when fully executed by Lessor and
Lessee.
44. SUBORDINATION.
This lease is subject and is hereby subordinated to all present and
future mortgages, deeds of trust and other encumbrances affecting the
demised premises or the property of which said premises are a part. The
Lessee agrees to execute, at no expense to the Lessor, any instrument
which may be deemed necessary or desirable by the Lessor to further
effect the subordination of this lease to any mortgage, deed of trust or
encumbrances.
45. OPTION TO RENEW.
See Exhibit E, Addendum 4.
21
LESSOR: LESSEE:
/S/ Xxxxxxx X. Grey /S/ Xxxxxxx X Xxxxxx
------------------------------------ -----------------------------------
Xxxxxxx X. Grey, Senior Vice President Xxxxxxx X Xxxxxx, President
405 Business Park Limited Partnership Xxx X. Xxxxxx, Co-President
c/o Continental Real Estate Management Birthday Express, Inc.
Services 00000-000xx Xxxxxx XX, Xxxxx
000
000 Xxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxx, XX 00000
Xxxxxxx, XX 00000
State of Washington )
) ss.
County of King )
On this 9th day November, 1995, before me, personally appeared Xxxxxxx X. Grey,
to me known to be the Senior Vice President, of the corporation that executed
the within and foregoing instrument; and acknowledged the said instrument 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/she was authorized to
execute said instrument and that the seal affixed hereto (if any) is the
corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official Seal the
day and year first above written.
/S/ Xxxxxx Xxxx Xxxxxx
---------------------------------------------
Notary Public in and for the State of SEAL
Washington residing at Auburn
My Appointment Expires: 6-15-98
State of Washington )
) ss.
County of King )
On this 9th day November, 1995, before me, personally appeared Xxxxxxx Xxxxxx,
to me known to be the President, of the corporation that
executed the within and foregoing instrument; and acknowledged the said
instrument 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/she was
authorized to execute said instrument and that the seal affixed hereto (if any)
is the corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official Seal the
day and year first above written.
/S/ Xxxxx Xxxx
---------------------------------------------
Notary Public in and for the State of
Washington residing at __________
My Appointment Expires: 1-19-96
22
EXHIBIT A
Premises
[ROOM PLAN]
EXHIBIT B
LEGAL DESCRIPTION
PARCEL 1:
THE NORTH HALF OF THE SOUTH TWO-THIRDS DESCRIBED AS FOLLOWS:
THE NORTH 348.12 FEET OF THE SOUTH 690 FEET OF THE WEST 375.38 FEET OF THE
NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 33, TOWNSHIP 26 NORTH,
RANGE 5 EAST, X.X. IN XXXX COUNTY, WASHINGTON; AND THE NORTH 11.29 FEET OF THE
SOUTH HALF OF SAID SOUTH TWO-THIRDS; EXCEPT XXX XXXX 00 XXXX XXX XXXX; AND
EXCEPT PORTIONS DEEDED TO THE STATE OF WASHINGTON FOR PRIMARY STATE HIGHWAY NO.
1, RECORDED UNDER RECORDING NUMBERS 4561981 AND 96362465.
PARCEL 2:
THE NORTH 179.75 FEET OF THE SOUTH 446.63 FEET OF THE WEST 375.38 FEET OF THE
NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 33, TOWNSHIP 26 NORTH,
RANGE 5 EAST, X.X., IN KING COUNTY, WASHINGTON; EXCEPT XXX XXXX 00 XXXX XXX
XXXX; EXCEPT PORTIONS DEEDED TO THE STATE OF WASHINGTON FOR PRIMARY STATE
HIGHWAY NO. 1 BY DEEDS RECORDED UNDER RECORDING NUMBERS 4561981, 6362465,
4585665 AND 6404474;
TOGETHER WITH AN EASEMENT FOR DRIVEWAY PURPOSES OVER A STRIP OF LAND 26.67 FEET
WIDE, WHOSE SOUTH MARGIN IS THE NORTH MARGIN OF THIS PARCEL;
TOGETHER WITH AN EASEMENT FOR PARKING OVER THE NORTH 40 FEET OF THE SOUTH 266.88
FEET OF THE WEST 375.38 FEET, AND AN EASEMENT FOR INGRESS AND EGRESS OVER THE
SOUTH 25 FEET OF THE NORTH 65 FEET OF THE SOUTH 266.88 FEET OF THE WEST 375.38
FEET; ALL IN THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER, SECTION 33,
TOWNSHIP 26 NORTH, RANGE 5 EAST, X.X., IN XXXX COUNTY, WASHINGTON.
TOGETHER WITH AN EASEMENT FOR INGRESS AND EGRESS OVER THE SOUTH 25 FEET OF THE
NORTH 179.75 FEET OF THE SOUTH 446.63 FEET OF THE WEST 375.38 FEET; AND
RESERVING THE MUTUAL RIGHT OF PARKING ON THE NORTH 40 FEET OF THE SOUTH 266.88
FEET OF THE WEST 375.38 FEET; BOTH TO THE BENEFIT OF RESENT AND FUTURE OWNERS OF
THE SOUTH 266.88 FEET OF THE WEST 375.38 FEET, ALL IN THE NORTHEAST QUARTER OF
THE NORTHWEST QUARTER.
OF SECTION 33, TOWNSHIP 26 NORTH, RANGE 5 EAST, X.X. IN KING COUNTY, WASHINGTON;
EXCEPT THAT PORTION LYING WITHIN NORTHEAST 112TH STREET, IF ANY; AND EXCEPT THE
WEST 30 FEET OF ROAD; AND EXCEPT PORTION CONVEYED TO THE STATE OF WASHINGTON BY
DEEDS RECORDED UNDER RECORDING NUMBERS 457359 AND 6350591.
PARCEL 3:
THE NORTH ONE-THIRD OF THE NORTH 348.12 FEET OF THE SOUTH 690 FEET OF THE WEST
375.38 FEET OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 33,
TOWNSHIP 26 NORTH, RANGE 5 EAST, X.X., IN XXXX COUNTY, WASHINGTON; EXCEPT THE
WEST 30 FEET THEREOF FOR ROAD PURPOSES; AND EXCEPT THAT PORTION THEREOF CONVEYED
TO THE STATE OF WASHINGTON FOR SECONDARY STATE HIGHWAY NO. 2-A BY DEEDS RECORDED
UNDER RECORDING NUMBERS 4569597, RECORDS OF SAID COUNTY;
EXCEPT THAT PORTION OF SAID NORTH ONE-THIRD LYING WITHIN THE NORTH 630 FEET OF
SAID NORTHEAST QUARTER OF THE NORTHWEST QUARTER.
24
EXHIBIT C
HAZARDOUS WASTE
The term "Hazardous Substances", as used in this lease shall mean pollutants,
contaminants, toxic or hazardous wastes, or any other substances, the use and/or
the removal of which is required or the use of which is restricted, prohibited
or penalized by any "Environmental Law", which term shall mean any federal,
state or local law, ordinance or other statute of a governmental or
quasi-governmental authority relating to pollution or protection of the
environment. Lessee hereby agrees that (i) no activity will be conducted on the
premises that will produce any Hazardous Substance, except for such activities
that are part of the ordinary course of Lessee's business activities (the
"Permitted Activities") provided said Permitted Activities are conducted in
accordance with all Environmental Laws and have been approved in advance in
writing by Lessor; Lessee shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency; (ii) the premises will not be used in any manner for the
storage of any Hazardous Substances except for the temporary storage of such
materials that are used in the ordinary course of Lessee's business (the
"Permitted Materials") provided such Permitted Materials are properly stored in
a manner and location meeting all Environmental Laws and approved in advance in
writing by Lessor; Lessee shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency; (iii) no portion of the premises will be used as a landfill
or a dump; (iv) Lessee will not install any underground tanks of any type; (v)
Lessee will not allow any surface of subsurface conditions to exist or come into
existence that constitute, or with the passage of time may constitute a public
or private nuisance; (vi) Lessee will not permit any Hazardous Substances to be
brought onto the premises, except for the Permitted Materials described below,
and if so brought or found located thereon, the same shall be immediately
removed, with proper disposal, and all required cleanup procedures shall be
diligently undertaken pursuant to all Environmental Laws. Lessor or Lessor's
representative shall have the right but not the obligation to enter the premises
for the purpose of inspecting the storage, use and disposal of Permitted
Materials to ensure compliance with all Environmental Laws. Should it be
determined, in Lessor's sole opinion, that said Permitted Materials are being
improperly stored, used or disposed of, then Lessee shall immediately take such
corrective action as requested by Lessor. Should Lessee fail to take such
corrective action within 24 hours, Lessor shall have the right to perform such
work and Lessee shall promptly reimburse Lessor for any and all costs associated
with said work. If at any time during or after the term of the lease, the
premises is found to be so contaminated or subject to said conditions, Lessee
shall diligently institute proper and thorough cleanup procedures at Lessee's
sole cost, and Lessee agrees to indemnify and hold Lessor harmless from all
claims, demands, actions, liabilities, costs, expenses, damages and obligations
of any nature arising from or as a result of the use of the premises by Lessee.
The foregoing indemnification and the responsibilities of Lessee shall survive
the termination or expiration of this Lease. Lessee shall not be liable or
responsible for any claims arising from the presence of any Hazardous Substance
determined to be on the site prior to Lessee's occupancy. If at any time during
the term of the lease or any extension or renewal thereof, the premises and/or
Industrial Center are found to be contaminated by Hazardous Substances or
subject to said conditions which are determined to have been on the premises
prior to the inception of the lease, Lessor shall, in accordance with all
federal, state, and/or local governmental mandates, diligently institute proper
and thorough cleanup procedures at Lessor's sole cost, and Lessor agrees to
indemnify and hold Lessee harmless from all claims, demands, actions,
liabilities, costs, expenses, damages, and obligations of any nature arising
from or as a result of the prior presence of Hazardous Substances or conditions
caused thereby. The foregoing indemnification and the responsibilities of
Lessor shall survive the termination or expiration of this lease. If Lessor is
not able to immediately institute proper and thorough cleanup procedures in
accordance with all federal, state, and/or local governmental mandates, and if
in Lessee's opinion said failure to do so detrimental to Lessee continuing
business on the premises or to Lessee's employees, Lessee reserves the right to
terminate the lease pursuant to Paragraph 13.3
Permitted Materials (if none, enter none): None
25
EXHIBIT D
Rent Schedule
MONTHS RENT
------ ----
1-4 Free*
5-25 $7,448.38
26-61 $9,538.38
* Rental abatement for months 1 -4 shall include full abatement of all CAM
charges.
26
EXHIBIT E
ADDENDUM 1
1. PREMISES, PARKING AND COMMON AREAS 12.1 PREMISES)
Lessee to occupy 14,534 square feet December 1, 1995 through December
31, 1997.
Lessee to occupy 16,734 square feet January 1, 1998 through December 31,
2000.
Lessee shall have the right during the period December 1. 1995 -
December 31, 1997 to utilize approximately 2,200 square feet of this
space on a non-permanent and strictly periodic basis for the purpose of
general storage and/or company meetings.
2. TERM (3.1 TERM)
Lessee shall have the option to terminate this Lease anytime after the
37th month, by giving the Lessor 120 days notice prior to said
termination date and by paying a penalty of $13,387.20 on a sliding scale
of $13,387.20 for the 38th month to $0.00 for the 60th month.
3. OPTION TO RENEW
Provided Lessee is not in default of the terms and conditions of the
Lease, Lessee has the option to renew its Lease under the same terms and
conditions contained in this lease for two (2) additional terms of three
(3) years ("Extended Term`) following expiration of the Initial Term,
provided that Base Rent shall be market rate for a five year lease in
comparable buildings in the vicinity. The option shall be exercised by
Lessee giving not less that one hundred and eighty (150) days written
notice of its intent to exercise its option to renew. If Lessor and
Lessee fail to agree in writing on base rent for the extended term within
forty five (45) days of Lessor's receipt of Lessee's notice exercising
the option, then the option shall be void and Lessee's original notice
exercising the option shall be treated as if it were never given.
4. EXCLUSIVITY OF LESSEE'S USE
Lessor agrees, during the term of this Lease not to lease any space
within the Industrial Center to a "Party Goods", store or mail order
company. A "Party Goods", store or mail order Company shall be
considered as any Lessee whose primary use of Premises is the sale or
distribution of paper, plastic or party favor gifts; expressly utilized
for party or entertainment functions.
27
EXHIBIT E
ADDENDUM 1A
[SITE PLAN]
28
