EXHIBIT 10.19
GROUND LEASE
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THIS LEASE dated this 15th day of May, 1969, is between XXXXXXXXX XXXXXX
and XXX XXXXXX, each with a one-half (1/2) interest as his separate estate,
whose address is 00000 Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx, 00000, herein
collectively called "Owner", and XXXXXX INDUSTRIES, a California corporation,
whose address is 000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, herein
called "Tenant". As parties hereto, Owner and Tenant agree:
1. Premises. Owner leases to Tenant and Tenant leases from Owner the real
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estate situate in the County of King, State of Washington, more particularly
described on Exhibit A attached hereto and by this reference made a part hereof,
together with improvements to be placed thereon from time to time, all
hereinafter referred to as "Premises". The term "Site" will be used to refer to
the land exclusive of the building improvements, and the building improvements
exclusive of the land will hereinafter be called "Improvements".
2. Term. The term of this lease shall commence on the date hereof and it
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shall extend to December 31, 2032, subject to Tenant's option to earlier
terminate this lease pursuant to paragraph 11, and subject to Tenant's option to
further extend this lease pursuant to paragraph 13.
3. Rent.
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(a) Initial Rent: Concurrently herewith Tenant has paid Owner $750.00
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per month from January 1, 1969, in satisfaction of all rents accruing during the
period this lease was under negotiation, and extending until the end of the
calendar month in which executed.
(b) Interim Rent: For the period ending on the earliest to occur of
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either completion of Improvements upon the premises costing in excess of
$1,500,000.00, or December 31, 1971, Tenant shall pay to Owner the sum of
$750.00 per month in advance on the first day of each calendar month commencing
on the first day of the calendar month following date of execution hereof.
(c) Primary Rent: Commencing on the earliest to occur of the first
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day of the calendar month following completion of Improvements costing in excess
of $1,500,000.00, or January 1, 1972, Tenant shall pay to Owner at such place as
Owner may from time to time designate in writing an annual rent of $60,000.00,
payable monthly in advance on the first day of each calendar month in the amount
of $5,000.00.
(d) Adjustment to Primary Rent: The primary yearly rent for the
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Premises shall be adjusted for the five year period commencing January 1, 1979,
and for every five year period thereafter, based upon the variations in the
United States Department of Labor, Bureau of Labor Statistics, Consumers Price
Index ("CPI"), Seattle, Washington area, and shall be made as hereinafter set
forth:
(i) The average of the monthly variations of said CPI for the
calendar year ending December 31, 1969, shall be determined (hereinafter called
"Index Base Period"), and the average of the monthly variations of said CPI for
the calendar year ending December 31, 1978, shall be determined (hereinafter
called "Index Adjustment Period"). The yearly rent of $60,000.00 being paid
during the primary rent period ending December 31,1978, shall thereupon,
commencing on January 1, 1979, and applicable for the next ensuing five years,
be adjusted by calculating the percentage increase, if any, that said Index
Adjustment Period shall have increased over the Index Base Period, and
multiplying such percentage increase times the theretofore existing yearly
primary rent, and by adding the results of such multiplication to the then
existing yearly primary rent. For example, if the average for said Index
Base Period is 150, and if the average for said Index Adjustment Period is 156,
then the percentage to multiply times the yearly rent to determine the increase
therein to be paid commencing January 1, 1979, would be 4% (6 divided by 150),
and the increased yearly rental rate would be
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$62,400.00 ($60,000.00 plus $2,400.00), payable in monthly installments of
$5,200.00, for the period January 1, 1979, through December 31, 1983.
(ii) In a similar manner, the average of the monthly variations
of said CPI for the last calendar year at the end of each subsequent five year
period shall be determined, thereby establishing the new Index Adjustment
Period, and said new Index Adjustment Period shall be compared with the Index
Base Period to determine the percentage increase or decrease thereby resulting.
The rent for the next succeeding five year period shall be adjusted upward or
downward in the manner hereinabove indicated by adding or deducting from the
yearly rent then payable the results obtained by multiplying said yearly rent by
such percentage increase or decrease.
(iii) It is acknowledged that upward or downward adjustments in
yearly rent may take place based upon said CPI changes, if any; but the parties
agree that under no circumstances and at no time during the entire term of this
lease shall the yearly rent be less than $60,000.00. The parties further agree
that the adjustments to the primary rent shall not cause an increase in yearly
rent above the following amounts for the following periods:
Maximum
Period Yearly Rent
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January 1, 1979, to December 31, 1983 $66,000.00
January 1, 1984, to December 31, 1988 $72,000.00
January 1, 1989, to December 31, 1993 $78,000.00
There shall be no ceiling on yearly rent subsequent to January 1, 1994.
(iv) The present CPI is ascertained by the United States
Department of Labor by reference to an assumed base of 1957 through 1959
equalling 100. If the base period 1957 through 1959 should be abandoned as a
reference base, and a new period be substituted with a new starting point of
100, then the average CPI determination required hereunder establishing the
Index Base Period shall be modified, taking into account the new base period, so
as to reflect the increase or decrease between the CPI occurring during the
periods for which such comparison and difference is to be determined. In the
event that the necessary CPI figures are not available upon the commencement
of a new five year period, then the current yearly rental rate shall continue to
be paid until the CPI figures become available, at which time the necessary
retroactive rental adjustment shall be made. Yearly rentals shall be payable in
twelve equal monthly installments on the first day of each calendar month.
(v) In the event that said Consumers Price Index (CPI) of the
United States Department of Labor, Bureau of Labor Statistics, as hereinabove
referred to,ceases to be available altogether during the term of this lease, and
the parties are unable to agree on any adjustment or on any other available
Index, they shall submit to arbitration under Paragraph 24 hereof in order to
determine the rent on a basis comparable to said CPI.
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4. Improvements and Use. Tenant is hereby granted permission, at Tenant's
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sole cost, risk and expense, at any time and from to time, to construct upon the
Site such Improvements as Tenant may determine, and Tenant may tear down,
remove, alter or reconstruct Improvements as Tenant may elect. Tenant may use
the Premises for any lawful purposes permitted by applicable governmental zoning
designations.
5. Taxes and Assessments. Tenant shall pay during the term of this lease
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all taxes and assessments that become due and payable during the term hereof on
the entire premises (Site and all Improvements) and upon all personal property
placed thereon. Tenant shall have the right in Tenant's or Owner's name, but at
Tenant's sole cost and expense, to contest the validity of any tax or assessment
by appropriate proceedings timely instituted. If at any time during the term of
this lease any governmental subdivision shall undertake to create an improvement
or special assessment district, the proposed boundaries of which shall include
all or any portion of the Premises, Tenant shall be entitled to appear in any
proceeding relating thereto and to exercise all rights of a landowner to have
the Premises excluded from such district or to determine the degree of benefit
to Tenant that might result therefrom. If any tax, assessment, charge, levy or
impost made against the Premises to finance such special improvement shall be
payable in installments, then Tenant shall only be obligated to pay those
installments as shall fall due during the term of this lease. Owner shall not
voluntarily consent to or join in the creation of any special assessment tax or
improvement district affecting the demised premises without the Tenant's prior
written approval.
6. Utility Charges. Tenant shall pay or cause to be
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paid all charges for water, gas, sewer, flood control, electricity, light, heat,
air conditioning, power, telephone, trash or garbage disposal, or other services
used, rendered or supplied to Tenant in connection with the Premises.
7. Hold Harmless and Insurance.
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(a) Tenant agrees that Owner shall not at any time or to any extent
whatsoever be liable, responsible, or in anywise accountable for any loss,
injury, death or damage to persons or property which at any time may be suffered
or sustained by Tenant or by any person whomsoever who may at any time be using,
occupying or visiting the Premises, or be in, on or about the same, unless such
loss, injury, death or damage shall be due to the overt acts of Owner or Owner's
employees and agents; and Tenant shall indemnify, defend, hold and save Owner
free and harmless of, from and against any and all claims, liability, loss or
damage whatsoever, including attorneys' fees, on account of any such loss,
injury, death or damage, except loss, injury, death or damage due to the overt
acts of Owner or Owner's employees or agents. Tenant shall procure at Tenant's
sole cost and expense and maintain in full force and effect during the entire
term of this lease (i) bodily injury liability insurance with limits of not less
than $250,000.00 per person and $500,000.00 per occurrence, insuring against any
and all liability of Tenant with respect to the Premises, and (ii) property
damage liability insurance with a limit of not less than $25,000.00.
(b) Owner shall be name as an additional insured on all such
liability insurance policies and Owner shall be supplied either with copies of
the policies or certificates thereof.
(c) Tenant shall likewise procure and maintain standard fire and
extended coverage insurance on the improvements to the extent of at least 80% of
insurable value. Owner shall be named as an additional insured on such fire
insurance policies should Tenant not exercise is option of extension of this
Lease three (3) years prior to the end of the initial term as provided in
paragraph 13
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hereof.
8. Waiver of Subrogation. Owner and Tenant each release and relieve the
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other, and each waives the entire right of recovery against the other, for
losses or damages arising out of or incident to the perils of fire, explosion,
or any other perils included in the "extended coverage" form of insurance
endorsement approved for use in the State of Washington, which occurs in, on or
about the Premises, whether due to the negligence of either party, their agents,
employees, or otherwise.
9. Possession. Tenant may have possession of the Site from and after the
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date hereof, except that Owner reserves the right to store peat on the Site for
a period of not to exceed eighteen months from date hereof at such location or
locations as shall not interfere with Tenant's use and occupancy of the Site.
10. Financing. Tenant contemplates obtaining financing for the construction
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of Improvements upon the Site (and such offsite improvements as are incident
thereto), and such financing will be obtained from time to time in relation to
specific projects and portions of the Site as the Site is orderly developed.
Owner agrees from time to time to encumber Owner's interest in the Site or the
portions thereof as are incident to such financing then to be obtained by
Tenant, and for this purpose Owner agrees to join in the execution of such
security instrument or instruments encumbering the Site, in whole or in part, as
the lenders to Tenant may require, provided that:
(a) At no time and under no circumstances shall Owner be personally
obligated for the repayment of such financing, nor for the costs of procuring
such, nor for the performance of any covenant to be kept by Tenant;
(b) There be only a first mortgage for such subordination on any
parcel of land;
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(c) There be no second mortgages or additional encumbrances on any
parcel of land;
(d) Each mortgage be limited to the cost of Improvements to be placed
on any parcel, which will include site and utility work;
(e) There be no balloon payments at or near the end of scheduled
repayment of any mortgage loan;
(f) Tenant and every mortgagee shall notify Owner of any default of
Tenant in repaying loans or performing any covenant;
(g) Owner shall have the right to cure such defaults and the right to
redeem;
(h) All financing shall provide by its terms that it is to be repaid
pursuant to the amortization schedule of the note not later than fifteen years
prior to the end of the term of this lease, except that if the option to extend
or renew this lease is exercised by Tenant, the period for such loan repayment
may be extended so as to expire not later than fifteen years prior to the end of
the extended option term.
11. Option to Terminate. Tenant shall have an option to terminate this lease
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at any time prior to the first to occur of the commencement of construction of
substantial Improvements, or December 31, 1971. Tenant shall exercise its
option, should it elect so to do, by written notice to Owner, and upon giving
such written notice this lease and all obligations of Owner and Tenant hereunder
shall cease and terminate, except for Owner's obligation for a share of
investigative costs, as set forth in paragraph 18 hereof. Tenant would only
intend to exercise its option to earlier terminate this lease if in the opinion
of the experts employed by it the contemplated project is not feasible due to
adverse physical factors affecting the Site, or is otherwise economically not
feasible.
12. Option to Lease Additional Area. Tenant shall have
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an option to lease the additional area described in Exhibit B attached hereto
and by this reference made a part hereof, for the balance of the term of this
lease, such option to be exercised within sixty days upon being informed by
Owner of the availability thereof following the death or moving of Xxx.
Xxxxxxxxx Xxxxxx, Owner's mother now residing thereon. The primary rent for this
additional area shall be $5,000.00 per year, to be pro-rated for the first year
on a monthly basis, and to be adjusted on CPI variations after January 31, 1979,
beginning with the calendar year in which this option is exercised over the year
1969, all as set out in paragraph 3 (d) above; and to be added to the basic
primary or adjusted rent, and payable simultaneously therewith. Tenant in
exercising this option shall pay Owner the value of the two residences located
on said additional area, to be appraised at that time, with the right of Owner
to move them or either of them or any shrubs from said area, if desired.
13. Option to Extend. Tenant shall have an option to extend the lease term
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for an additional period of thirty (30) years upon the same terms, covenants and
conditions as set forth herein, including the continuation of the rental
re-adjustments required by the provisions of paragraph 3(d) hereof. Tenant shall
exercise this option, if it intends so to do, by written notice to Owner not
later than three years prior to the end of the initial term of this lease.
14. First Refusal. Owner hereby grants to Tenant the following options of
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first refusals:
(a) Premises: If Owner proposes to sell the Premises, including the
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area described in Exhibit B, Owner gives Tenant the first refusal opportunity to
buy them at the same price and upon the same terms as are acceptable to Owner
from any
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bona fide third party purchaser.
(b) Property Contiguous to South: If Owner proposes to sell or lease
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the property immediately south of the Site, consisting of approximately five
acres, which is more fully described in Exhibit C attached hereto and by this
reference made a part hereof, Owner gives Tenant the first refusal right to buy
or lease said real property or the portion thereof Owner is then willing to sell
or lease, at the same price and upon the same terms as are acceptable to Owner
from any bona fide third party purchaser or lessee. The first refusal privilege
granted in this subparagraph (b) shall terminate December 31, 1978.
(c) Procedure: Owner shall notify Tenant of any acceptable bona fide
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offer made to Owner by written notice to Tenant specifying the terms thereof,
and indicating Owner's willingness to accept the same. Tenant shall have thirty
(30) days following receipt of such notice within which to accept and exercise
Tenant's first refusal privilege, and if not accepted within said thirty day
period, Owner may complete the sale or lease to the third party at the price and
on the terms so communicated to Tenant. Tenant's first refusal privilege shall
continue as to any successors and assigns of Owner.
15. Notices. All notices under this lease shall be in writing and be
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effective when delivered in person or upon deposit in the United States mail,
registered or certified, return receipt requested, postage prepaid and properly
addressed to Owner at 00000 Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxx, 00000,
and to Tenant at 000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, or to such other place as may be hereafter designated by either party in
writing.
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16. Eminent Domain.
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(a) The term "eminent domain" shall include the exercise of any
similar governmental power, whether by public authority or a private
corporation, or any purchase or other acquisition in lieu of condemnation.
Settlement of any legal proceedings and purchase price in lieu of condemnation
shall require the consent of both parties, and if a lender shall have a security
interest in any portion of the Premises subject to the exercise of eminent
domain, its consent shall also be required. The expression "date of taking"
means the date possession is surrendered to the condemning authority.
(b) If the whole of Premises should be taken under the power of
eminent domain, the lease term shall cease as of the date of taking. If such
portion of the Premises be taken that the ground area is reduced by more than
twenty percent (20%) and the balance is thereby, in the bona fide judgment of
Tenant, rendered unsuitable for Tenant's purposes, Tenant, at its option, upon
thirty (30) days' prior written notice to Owner, may terminate this lease.
However, in the event that any portion of the Premises is then encumbered by a
lender to Tenant, the consent of such lender to Tenant's exercise of such
termination privilege shall be a condition precedent to the effectiveness
thereof.
(c) If less than all of the Premises is taken under the power of
eminent domain and this lease is not terminated by reason of such partial taking
the fixed yearly rent hereunder shall be reduced in the proportion that the fair
market value of the Site so condemned bears to the fair market value of the
entire Site immediately before the taking.
(d) The award payable by the condemning authority in the event of the
exercise of eminent domain shall be divided
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between Owner and Tenant in the following manner:
(i) Owner shall be entitled to that portion of the award representing
the taking of the Site as if unimproved.
(ii) Tenant shall be entitled to that portion of the award
representing the taking of the improvements upon the Site. In the event that
only a portion of the premises is taken and the lease is not terminated by
reason of such partial taking, Tenant shall also be entitled to that portion of
the award that is paid for the purpose of placing the remainder of the Premises
in a condition following the taking as shall place such remainder in a form so
that the Site and Improvement can continue to be used as an integral whole for
the purposes intended. Tenant shall also be entitled to that portion of the
award representing the bonus value, if any, of the leasehold interests owned and
held by Tenant.
(iii) Any lender to Tenant whose loan is secured wholly or partially
by a portion of the Premises to be condemned shall be entitled to that portion
of the condemnation award as is set forth and contained in its security
documents.
17. Development of Site. Tenant has employed architects and engineers,
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soil engineers and traffic specialists in connection with a thorough analysis of
the physical conditions and requirements incident to the Site and the proper
development thereof. At such time as Tenant receives favorable reports and
recommendations from its architects, engineers, soil engineers and traffic
specialists, Tenant will file such applications for zoning, rezoning, and/or
variances therefrom with the cognizant governmental authorities as will permit
construction of Improvements on the Site that are economically feasible and in
conformity with the recommendations so made. Owner agrees to join in and
execute such applications and other instruments, at no cost or expense to Owner,
as may be necessary for the purpose of assisting Tenant in obtaining such
zoning, rezoning or variances and building permits for the purpose of permitting
Tenant to develop the Site. Owner further agrees, in connection with Tenant's
development of the Site, to join in the execution and granting of such
easements, roadway or other dedications as may be required by cognizant
governmental authorities and
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subdivisions and agencies thereof, and in favor of public utility companies, for
the purpose of complying with the requirements of such cognizant governmental
authorities or public utility companies. Owner agrees to join in the execution
of such conveyances, dedications, or other documents as may be reasonably
required by cognizant governmental authorities applying not only to the Site but
also to other properties owned by Owner, so that drainage problems affecting the
Site can be satisfied and overcome. Owner further agrees that the Site and
portions thereof may be filled and compacted, and for this purpose Tenant shall
be entitled to such slope easements and/or such subjacent or lateral support for
fill and compacting of the Site along the boundary lines of the Site upon the
adjacent property of Owner as may be necessary to properly develop the Site from
an economic and engineering standpoint, subject to Owner's approval which shall
not be unreasonably withheld. It is the mutual intent of Owner and Tenant that
they shall cooperate with each other to the end that the Site, as well as
Owner's adjacent properties, can be properly and economically developed for
mutual economic benefit of Tenant and Owner.
18. Costs of Development. Tenant shall be solely responsible for all
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costs and expenses of any improvements made by Tenant, as well as for the costs
and expenses incident to the development of the Site and the investigation now
being made relative thereto by Tenant's architects, engineers and traffic
specialists. Owner acknowledges that the results of the investigations now
being made by Tenant will accrue to the overall benefit and best interest of
Owner as to the other properties owned by Owner adjacent to the Site.
Consequently, Owner agrees to share in the investigative costs and expenses
incurred by Tenant relative to the Site in the
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following manner: In the event that the investigations now being made for
Tenant indicate that the project is economically not feasible, and Tenant
exercises its option to terminate this lease, then Owner shall repay to Tenant a
sum not to exceed the lesser of the following amounts: (i) $2,500.00 or
(ii) one-half of the total costs and expenses incurred by Tenant, or (iii) one-
half of the total rentals paid to Owner by Tenant.
Tenant agrees in relation to the initial investigations relative to the
Site to furnish Owner with a list of all engineering and planning maps, studies,
calculations, sketches, reports, documents, photographs, and other similar
materials relevant to the Site, its present condition and its potential use.
Said list shall include the name and address of the firm, individual, company
and agency where such materials are obtainable and shall authorize Owner, at
Owner's expense, to procure said materials, including reproducible copies
thereof.
19. Maintenance. Tenant shall keep the Premises in good order and repair,
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and in a clean, sanitary and safe condition. Owner may enter upon the Premises
at reasonable times to ascertain compliance herewith. If Tenant fails to
commence repairs within ninety days after written demand, or adequately to
complete such repairs within a reasonable time thereafter, Owner may cause such
repairs to be made and add the cost thereof to the next month's rental
installment.
20. Termination. At any time prior to the expiration of this lease, Owner
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may terminate the same upon the happening of any one of the following events:
(a) Failure of Tenant to pay any installment of rent then due within
sixty days after notice to Tenant and mortgagee.
(b) Failure of Tenant to perform or to begin and diligently to pursue
any other covenant of this Lease within ninety days after notice to Tenant and
mortgagee.
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(c) Failure of Tenant to maintain any mortgage on the premises in good
standing, and in the event of default, to reinstate the mortgage within sixty
days after notice from the mortgagee or Owner.
21. Re-entry. Upon the termination of this Lease, whether by lapse of
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time or otherwise, Owner may re-enter the premises and remove all persons and
chattels therefrom. Tenant shall remain liable upon any mortgage or other debts
required to be paid by Tenant under this Lease which is a lien against the
premises, repay the same, and hold Owner harmless in respect thereto.
22. Surrender. At the expiration of the tenancy, whether by lapse of time
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or otherwise, Tenant shall surrender the premises in good order and repair,
reasonable wear and tear excepted. Tenant may remove its furnishings and other
personal property as can be removed without damage to the structures of any
buildings.
23. Amendments to Lease. This Lease may only be modified or amended by an
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agreement in writing between the parties hereto. In the event that any lender
to Tenant should reasonably require as a condition to the making of its loan
that this Lease be amended, then Owner and Tenant agree to amend it within its
general purview and terms for the purpose of complying with the reasonable
requirements of said lender, provided that such amendment shall not operate to
reduce the total rentals to which Owner is entitled pursuant to the provisions
hereof. In the event that a lender to Tenant should require that this Lease be
partitioned and reduced in scope so as to cover only a portion of the Site, then
Owner and Tenant agree by written amendment to reduce the scope of this Lease so
as to apply only to that portion of the Site then to be developed by Tenant and
so encumbered in favor of the lender. The rental rate to be paid under this
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lease as thus amended and reduced in scope shall be in the ratio as the fair
market value of the reduced Site to be covered by this lease bears to the total
fair market value of the entire Site. Concurrently with and as a condition of
so amending this lease and reducing the size of the Site and the rental payable
hereunder, Owner and Tenant shall enter into a new lease covering the balance of
the Site upon the exact same terms, covenants and conditions as then contained
herein, except that the rental payable under said new lease, when added to the
reduced rental payable under this lease, as amended, shall equal the total
monthly rental required prior to the amending of this lease.
24. Arbitration. In the event of any dispute or controversy between Owner
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and Tenant, the same shall within a reasonable time be decided by arbitration
pursuant to the laws of the State of Washington governing arbitration. In the
event that the laws of the State of Washington shall be inadequate or
incomplete, such arbitration shall be conducted in accordance with the rules and
regulations of the American Arbitration Association. For the purpose of
initiating arbitration, Owner and Tenant shall, by written notice to the other,
each designate an arbitrator, and the two arbitrators so designated shall select
a third arbitrator. Any two arbitrators who may agree shall determine the
matter in dispute. The fees and expenses of the arbitrators shall be shared
equally by Owner and Tenant. In the event that one party shall fail or refuse
to name an arbitrator within thirty (30) days after written demand is made for
arbitration, then the other party shall have the right to name an arbitrator for
the party so refusing to name an arbitrator.
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25. Mortgagee Provisions. For the purpose of protecting the interests of
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and security of an institutional first mortgage lender to Tenant, Tenant and
Owner agree that the following provisions and conditions shall be applicable and
binding upon Owner and Tenant during such periods of time and for so long as the
loan or loans made by any such first mortgage lender have not been fully paid,
satisfied, performed and discharged:
(a) Additional Notice: Signed copies of any notices to be served on
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Owner by Tenant, or upon Tenant by Owner, pursuant to the provisions of this
Ground Lease, shall also be served on the mortgagee by registered or certified
mail, postage prepaid, deposited in an official receptacle for United States
mail, and forwarded to such address as shall be indicated to Owner and Tenant
from time to time by such mortgagee. Owner and Tenant agree that neither of
them shall exercise any right, power or remedy with respect to any default or
claimed default of the other party under this Lease without also first serving a
signed copy of any notice relative to said default on the mortgagee as herein
set forth.
(b) Extension of Period to Remedy Default: If Tenant does not remedy
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a default after receipt of written notice thereof within the time limits
provided herein, Owner shall give the mortgagee written notice of such fact in
the manner provided in Paragraph 25 (a), above. Mortgagee shall then have an
additional period of time of sixty (60) days within which to cure or to commence
to cure the default of Tenant, as hereinafter provided, and Owner will not
exercise any right, power or remedy with respect to any such uncured default of
Tenant if the mortgagee or the agent of the
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mortgagee within such 60 day period shall give to Owner written notice
(hereinafter called "Notice of Intention to Cure Default") of mortgagee's
intention to undertake the curing of such default or to cause the same to be
cured and with all due diligence shall proceed to, and shall thereafter
prosecute such curing with due diligence. In the event the mortgagee is unable
to obtain possession and control of the premises demised under the Lease and the
property situated thereon, the mortgagee shall be deemed to be exercising all
due diligence in curing such default or causing the same to be cured if it is
prosecuting will all due diligence any action which mortgagee may deem necessary
or appropriate in its good faith judgment to obtain such possession and control.
In the event that any default under the Lease is not cured prior to the
expiration of one of the following periods, as the case may be:
(i) If the mortgagee shall have given the Notice of Intention to Cure
Default the period shall be the time from the giving of such notice and
ending at the time the mortgagee ceases to prosecute with all due diligence
the curing of such default or the causing of the same to be cured (which
time may be specified by the mortgagee by written notice to the Owner); or
(ii) If the mortgagee shall not have given the Notice of Intention to
Cure Default, the period shall be the additional sixty (60) day period
above referred to,
the Owner may, upon expiration of the appropriate period, by notice to the
mortgagee and the Tenant, terminate the interest
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of the Tenant under this Lease and, if the interest of Tenant is so terminated,
the mortgagee, or, if the mortgagee shall have specified a nominee in writing to
the Owner, then such nominee, shall thereupon be substituted as the Tenant under
this Lease with the same force and effect as if originally named as such
therein; provided, however, the mortgagee or such nominee, as the case may be,
shall not be bound by any of the covenants, agreements, terms or provisions of
this Lease until such time as the Owner, at the request and expense of the
mortgagee or such nominee, as the case may be, takes all appropriate steps to
remove the Tenant from the demised premises, at which time the mortgagee or such
nominee, as the case may be, will be obligated to perform such covenants,
agreements, terms and provisions as if they or it had been bound by them from
the time of such substitution and at which time the mortgagee or such nominee,
as the case may be, will be obligated to cure any default in the payment of
money under the Lease within ten (10) days, provided, further, at any time prior
to the expiration of the tenth day after the mortgagee receives said written
notice of the Owner's termination of the interest of the Tenant under this
Lease, the mortgagee, or its nominee, as the case may be, may advise the Owner
in writing that they waive their rights under Paragraph 25 (b) of this Lease,
whereupon neither the mortgage nor its nominee shall thereafter be deemed
substituted as the Tenant under this Lease pursuant to this subparagraph (b),
and if notice of default or of termination has been given by the Owner, but the
default complained of has been remedied or is in the process of being remedied,
that notice shall be deemed of no further force or effect, and this Lease shall
continue as if
-18-
such notice had not been given, but this shall in no way affect the rights of
the Owner to otherwise terminate the interests of the Tenant under this Lease in
accordance with the other terms and conditions of this Lease in the event of any
further or other default of Tenant. Unless the rights of the mortgagee or its
nominee under this subparagraph (b) are waived as aforesaid, the Owner will not,
prior to the substitution of the mortgagee or its nominee as Tenant under this
Lease, exercise any other right, power or remedy with respect to any default
under this Lease.
(c) Performance by Mortgagee: The mortgagee may make any payment or
------------------------
perform any act under this Lease with the same effect as if made or performed by
the Tenant, to the extent and in the manner permitted by the Mortgage or this
Lease, and no entry by the mortgagee upon the demised premises under this Lease
for such purpose shall constitute or be deemed to be an eviction of the Tenant.
(d) No Rejection of Lease: So long as a mortgagee shall have a first
---------------------
lien upon the interest of the Tenant under this Lease, this Lease shall not
terminate by reason of any rejection of the Lease by the Tenant, or any trustee
of the Tenant, in any bankruptcy, reorganization, arrangement or similar
proceeding. If at any time the Lease would terminate if it were not for this
subparagraph (d), then without any action or consent by the Owner the Tenant or
the mortgagee, the Tenant's interest under this Lease shall, at such time, be
transferred to the mortgagee, or if the mortgagee shall have specified a nominee
in writing to the Owner, then to such nominee.
-19-
(e) Right to Enforce: If an event of default under the provisions of
----------------
the Mortgage or other security document securing the loan of the mortgagee shall
have occurred, the mortgagee may exercise and enforce, with respect to this
Lease and the premises demised under this Lease and the property situated
thereon, any and all rights of the Tenant under this Lease, and any right, power
or remedy of the mortgagee under the Mortgage, always subject, however, to the
provisions of this Lease.
(f) Transfer of Tenant's Interests: In case the Tenant's interest
------------------------------
under this Lease shall be sold, assigned or otherwise transferred pursuant to
foreclosure or similar proceeding or sale, assignment or other transfer in lieu
thereof, or the exercise of any other right, power or remedy by the mortgagee,
or anyone else, or in case the mortgagee or its nominee is substituted as
Tenant, and if no rent or other charges shall then be delinquent under this
Lease, and if arrangements reasonably satisfactory to the Owner have been made
for the curing of any other default susceptible of being cured by the Tenant
under the new lease referred to below, and if the Lease shall not have been
terminated by reason of default pursuant and subject to the provisions of this
Lease, the Owner, within thirty (30) days after receiving a written request
therefor and upon payment of all expenses, including attorneys' fees, incident
thereto, will execute and deliver a new lease of the demised premises under this
Lease to the purchaser, assignee, transferee or party substituted as Tenant, as
the case may be, for the remainder of the term of this Lease, containing the
same covenants, agreements, terms, provisions and limitations as contained in
this Lease.
-20-
(g) New Lease: In case of the termination of this Lease by reason
---------
of the happening of any Event of Default under the Lease or by summary
dispossess proceedings (such as unlawful detainer actions) or under any similar
provision of law now or at any time hereafter in force by reason of or based
upon or arising out of a default under this Lease or because of any other
reason, and if the mortgagee shall have paid or arranged to the reasonable
satisfaction of the Owner for the payment of all rent and other charges due and
payable by the Tenant under this Lease as of the date of such termination,
together with the rent and other charges which but for such termination would
have become so due and payable from the date of such termination through the
90th day after the effective date of such termination, and shall have arranged
to the reasonable satisfaction of the Owner for the curing of any default
susceptible of being cured by the Tenant under the new lease referred to below,
the Owner, upon the written request of the mortgagee, given any time prior to
such 90th day and upon payment of all expenses, including attorneys' fees,
incident thereto, will execute and deliver a new lease of the premises demised
under this Lease to the mortgagee, or if the mortgagee shall have specified a
nominee in writing to the Owner, then to such nominee, for a term corresponding
to the remainder of the term of this Lease before giving effect to such
termination, containing the same covenants, agreements, terms, provisions and
limitations as contained in this Lease. Upon the execution and delivery of such
new lease, the Owner, at the request and expense of the new tenant, will take
all appropriate steps to remove the Tenant from such demised premises. The
mortgagee may at any time during the 90 day
-21-
period after the date of such termination notify the Owner that it will not
request such new lease.
(h) Insurance: All insurance policies with respect to the premises
---------
demised under this Lease are to be carried in such names, in addition to the
name of the Tenant, are to contain such provisions, and are to be so adjusted
and to be so payable, as provided in the Mortgage and other security documents
securing and/or evidencing the loan of the mortgagee, and compliance by the
Tenant with the terms of the Mortgage or such other documents relating to such
insurance policies and the proceeds thereof shall not constitute a default under
this Lease.
(i) No Merger: So long as the mortgagee shall have a lien upon the
---------
interests of Tenant under this Lease, there shall be no merger of this Lease or
any interest in this Lease, nor of the leasehold estate created by this Lease or
any such leasehold estate, with the fee estate in the demised premises
thereunder by reason of the fact that the Lease or any such interest, may be
held, directly or indirectly, by or for the account of any person who shall own
the fee estate in the demised premises under this Lease or any interest in such
fee estate.
(j) No Surrender: So long as the mortgagee shall have a lien upon
------------
the interests of Tenant under this Lease, no surrender (except a surrender upon
the expiration of the full term of this Lease) to the Owner of the Lease or of
the premises demised under this Lease or of any part thereof or of any interest
therein by the Tenant, and no termination of this Lease by the Tenant shall be
valid or effective, and neither this Lease nor any of the terms hereof may be
amended,
-22-
modified, changed or canceled, without the prior written consent of the
mortgagee. No such surrender shall be deemed to be accepted except upon the
execution and delivery of written acceptance by the Owner and such written
consent by the mortgagee.
(k) Mortgagee Defined: The word "mortgagee" as used herein shall
-----------------
mean any mortgagee or mortgagees, if there be more than one, and their
respective successors and assigns, and any persons entitled or empowered, at the
time, to act for all the holders of all the obligations of Tenant issued under
and secured by the lien of a first mortgage on all or portions of the premises
demised under this Lease.
26. General.
-------
(a) This Lease shall inure to the benefit of and be binding upon the
heirs, personal representatives, successors
-23-
and assigns of the parties hereto.
(b) This lease shall be governed by the laws of the State of
Washington.
(c) The headings of the paragraphs in this lease are for convenience
and reference only and they in no way define, limit or describe the scope or
intent of the lease or the provisions of such paragraphs.
(d) Feminine or neuter pronouns shall be substituted for those of
masculine form, or vice versa, and the plural shall be substituted for the
singular number, or vice versa, in the place or places wherein the context may
require such substitution or substitutions.
(e) Upon request of either party, Owner and Tenant shall execute a
short form or "Memorandum" of this lease in recordable form, describing the
site, and specifying the commencement and termination dates.
IN WITNESS WHEREOF, the parties hereto have executed this Ground Lease as
of the day and year first above written.
/s/ Xxxxxxxxx Xxxxxx
-----------------------------------
XXXXXXXXX XXXXXX
/s/ Xxx Xxxxxx
-----------------------------------
XXX XXXXXX
XXXXXX INDUSTRIES
By /s/ Xxxx X. Xxxxxx
--------------------------------
By /s/ Xxxxxxxx X. XxXxxxxx
-------------------------------
-24-
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
ON this 15th day of May, 1969, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared XXXXXXXXX XXXXXX and XXX XXXXXX, to me known to be the individuals
described in and who executed the foregoing instrument, and acknowledged that
they signed and sealed this said instrument as their free and voluntary act and
deed for the uses and purposes therein mentioned.
GIVEN under my hand and official seal this 15th day of May, 1969.
[Signature]
-----------------------------------
Notary Public in and for the State
of Washington, residing at Seattle.
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On this 29 day of May, 1969, before me, the undersigned, a Notary Public
--
in and for said County and state, personally appeared XXXX X. XXXXXX, known to
--------------
me to be the President, and XXXXXXXX X. XxXXXXXX, known to me to be the
--------------------
Secretary of XXXXXX INDUSTRIES, the corporation that executed the within
instrument, known to me to be the persons who executed the within instrument on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument pursuant to its by-laws or a resolution of its
board of directors.
WITNESS my hand and official seal.
[SEAL APPEARS HERE]
/s/ Xxxxxx X. XxXxxxxx
------------------------------------
Notary Public in and for said County
and State
-25-
"EXHIBIT A"
That portion of the northeast quarter of the northeast quarter of section 33,
township 23 north, range 4 east, X.X., in King County, Washington, described as
beginning at the intersection of the east line of Pacific Highway and the
northerly line of the south 200 feet of said subdivision, as measured along the
east line of said highway; thence east along said north line a distance of 200
feet to the true point of beginning; thence continuing east along said north
line to the west line of the east 300 feet of said subdivision; thence north
along said west line to an intersection with a line produced easterly from a
point on the east line of said Pacific Highway and perpendicular thereto; said
point being 836 feet south, as measured along the east line of said highway from
the intersection of the east right-of-way of Pacific Highway and the south
right-of-way of Xxxxx 000xx Xxxxxx; thence west along said perpendicular line to
a point 200 feet east, as measured along said line from the east line of Pacific
Highway; thence southerly, parallel with the east line of Pacific Highway, to
the true point of beginning.
The Southerly 200 feet, as measured along the Easterly line of Pacific Highway,
of that portion of the NE 1/4 of the NE 1/4 of Section 33, Township 23
North, Range 4 East X.X. in Xxxx County, Washington, lying Easterly of Pacific
Highway, EXCEPT the East 300 feet thereof;
The Northerly 250 feet, as measured along the Easterly line of Pacific Highway,
of that portion of the SE 1/4 of the NE 1/4 of Section 33, Township 23 North,
Range 4 East X.X. in Xxxx County, Washington, lying Easterly of Pacific Highway,
EXCEPT the East 300 feet thereof;
Also that portion of the East 300 feet of the NE 1/4 of the NE 1/4 of Section
33, Township 23 North, Range 4 East X.X. in Xxxx County, Washington, lying
Southerly of a line described as follows: Beginning at the Southeast corner of
the Xxxxxxx Xxxxxxx xxx Xxxxx 000xx Xxxxxx intersection, proceed South a
distance of 636 feet along the right-of-way of the Pacific Highway; thence 100
feet in an Easterly direction perpendicular to the Pacific Highway; thence 180
feet in a Northerly direction perpendicular to 000xx Xxxxxx; thence Easterly in
this direction parallel to 000xx Xxxxxx to the West line of the East 300 feet of
said subdivision and the True Point of Beginning of said described line; thence
Easterly along said parallel line to the line of said subdivision and the
terminus of said line, EXCEPT the East 20 feet thereof for 32nd Avenue South.
"EXHIBIT B"
That portion of the northeast quarter of the northeast quarter of section 33,
township 23 north, range 4 east, X.X., in Xxxx County, Washington, described as
beginning at the intersection of the east line of Pacific Highway and the
northerly line of the south 200 feet of said subdivision, as measured along the
east line of said highway; thence east along said north line 200 feet; thence
north parallel with the east line of said highway to an intersection with a line
produced easterly from a point on said east line and perpendicular thereto; said
point being 836 feet south, as measured along said east line from the
intersection of the east right-of-way line of said Pacific Highway and the south
right-of-way line of Xxxxx 000xx Xxxxxx; thence west along said perpendicular
line 200 feet to the east line of said highway; thence south along said east
line to the point of beginning.
"EXHIBIT C"
That portion of the North 3/4 of the Southeast Quarter of the Northeast Quarter
of Section 33, Township 23 North, Range 4 East, X.X., lying easterly of Pacific
Highway State Road No. 1, EXCEPT the East 300 feet thereof, and EXCEPT the South
500 feet of the West 300 feet as measured along the North and South Line
thereof, and EXCEPT the Northerly 250 feet as measured along the Easterly line
of Pacific Highway.
