LEASE ASSIGNMENT AND ASSUMPTION
This ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made and
entered into as of April, 13, 1999, by and between Fine Arts Engravers Company,
Inc., an Oregon corporation ("Assignor") and Keystone Acquisition Corp.
("Assignee"), a Washington corporation and wholly owned subsidiary of
XxxxxX.xxx, Inc., a Washington corporation.
RECITALS
A. Assignor is the lessee under that certain lease (as amended, the
"Lease") in which Xxxxx X. Xxxxxxx, Trustee, Xxxxxxx Xxxxxx, Trustee, Xxxxxx X.
Xxxxxxx, Trustee and Xxxxxxxx X. Xxxxxxx, Trustee, all Trustees under the
Marital Trust established under Article IX of the Last Will of Xxxxx X. Xxxxxxx
are the lessors, which began as of July 1, 1996, with respect to that certain
real property and improvements thereon situated in county of Washington, state
of Oregon, which property is more particularly described on Exhibit A attached
hereto.
B. Assignor desires to assign its interest in the Lease to Assignee, and
Assignee wishes to assume Assignor's interest and obligations under the Lease.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants set forth below, and for
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Assignment of Lease. Conditional upon the successful closing of the
transactions contemplated by the Asset Purchase Agreement among Assignor,
Assignee and ImageX dated February 23, 1999, Assignor assigns and transfers to
Assignee, as of the Effective Date (defined below) all of Assignor's right,
title and interest under the Lease, to have and to hold for the duration of the
Lease.
2. Assumption of Lease. Conditional upon the successful closing of the
transactions contemplated by the Asset Purchase Agreement among Assignor,
Assignee and ImageX dated February 23, 1999, assignee accepts assignment of the
Lease and covenants with the Assignor that Assignee will assume, observe and
perform all of the terms, conditions, covenants, obligations and provisions on
the part of the tenant under the Lease arising from and after the Effective
Date.
3. Effective Date. The Effective Date is April 13, 1999.
4. True and Correct Copy. A true and correct copy of the Lease, together
with all amendments, addenda, assignments and other related documents, is
attached hereto as Exhibit B.
5. Further Assurances: Assignor will, at any time and from time to time
upon written request therefor, execute and deliver to Assignee, Assignee's
successors, nominees or assigns such documents as Assignee or they may
reasonably request in order to fully assign and transfer to and vest in Assignee
or Assignee's successors, nominees and assigns and protect Assignee or
assignee's successors', nominees' and assigns' rights under and interest in the
Lease, or to enable Assignee or Assignee's successors, nominees and assigns to
realize upon or otherwise enjoy such rights and property.
6. Modification: No modification, waiver or termination of this Assignment
will be valid unless the same is in writing and signed by the party against
which the enforcement of the modification, waiver or termination is sought.
7. Miscellaneous. This Assignment shall be construed in accordance with
the laws of the state of Oregon. This Assignment may be executed in
counterparts, which taken together shall comprise an original document. This
Assignment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
[the remainder of this page is intentionally left blank]
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Assignor:
FINE ARTS ENGRAVERS COMPANY, INC.,
an Oregon corporation
By /s/ Xxxxx Xxxxxxx
-------------------------------------
Name Xxxxx Xxxxxxx
--------------------------------
Title Secretary
------------------------------
Assignee:
KEYSTONE ACQUISITION CORP.,
a Washington corporation
By /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name Xxxxxxx X. Xxxxxx
--------------------------------
Title President
------------------------------
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EXHIBIT B
Copy of Lease
INDUSTRIAL REAL ESTATE LEASE INDEX
Xxxxx
4-25-96
1.0 Premises
2.0 Furnishings
3.0 Term
4.0 Renewal Terms
5.0 Holdover
6.0 Monthly Lease Payments
6.1 Late Payments
6.2 Non-Sufficient Funds
6.3 Security Deposit
7.0 Possession and Use of Premises
8.0 Remodeling and / or Structural Improvements
9.0 Maintenance and Repairs
10.0 Access by Landlord
11.0 Utilities and Services
12.0 Property Insurance
12.1 Liability Insurance
12.2 Taxes
13.0 Indemnity
14.0 Dangerous Materials
15.0 Destruction or Condemnation of Premises
15.1 Mechanics Liens
16.0 Defaults
17.0 Arbitration
18.0 Assignability / Subletting
19.0 Termination Upon Sale of Premises
20.0 Notices
20.1 Entire Agreement / Amendment
20.2 Severability
20.3 Waiver
20.4 Cumulative Rights
20.5 Governing Law
20.6 Subordination of Lease / Estoppel Certificate
31.0 Right of First Refusal
32.0 Surrender of Premises
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INDUSTRIAL REAL ESTATE LEASE - - -
TRIPLE NET WITH LIMITED EXCEPTIONS
This Lease Agreement ("Lease") is made by and between Xxxxx X. Xxxxxxx, Trustee,
Xxxxxxx Xxxxxx, Trustee, Xxxxxx X. Xxxxxxx, Trustee and Xxxxxxxx X. Xxxxxxx,
Trustee, all Trustees of the Marital Trust established under Article IX of the
Will of Xxxxx X. Xxxxxxx ("Trustees") ("Landlord"), and Fine Arts Engravers
Company, Inc. ("Tenant"). The parties agree as follows:
1.0 PREMISES.
Landlord, in consideration of the lease payments provided in this Lease,
leases to Tenant the real property located at 00000 X.X. Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxx 00000, Tax Xxx 000 Xxxxxxxx'x Xxx 0X 000X, xx Xxxxxxxxxx Xxxxxx, Xxxxxx
("Premises"). Premises shall only be used as a Commercial Printing
establishment.
2.0 FURNISHINGS.
The lease of the Premises includes all furnishings which are attached to
the real property. Tenant shall return all such items at the end of the lease in
a condition as good as the condition at the beginning of the lease term, except
for such deterioration that might result from normal use.
3.0 TERM.
The lease term will begin on July 1, 1996 and will terminate on June 30,
2001 (a five year term).
4.0 RENEWAL.
This lease shall automatically renew for one additional period of five
years, unless either party gives written notice of the termination no later than
180 days prior to January 1, 2001.
If the Tenant desires to exercise the one option to renew, then said
option exercise shall be evidenced in a writing to Landlord prior to January 15,
2001.
Landlord shall respond no later than January 31, 2001 with its opinion of
fair market value (FMV).
If Tenant accepts the FMV and no written response is tendered to Landlord
by February 15, 2001, then the FMV will be used commencing July 1, 2001.
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If Tenant rejects the FMV, then each party shall select a qualified
Qualified Commercial Real Estate Consultant to determine FMV, in a written
report to be received report no later than March 31, 2001.
Said reports shall be used by the Parties to an agreement on FMV no later
than April 30, 2001.
5.0 HOLDOVER.
If Tenant maintains possession of the Premises for any period after the
termination of this Lease ("Holdover Period"), Tenant shall pay to Landlord a
lease payment for the Holdover Period based on the terms of the following Lease
Payments paragraph. Such holdover shall constitute a month to month extension of
this Lease.
6.0 MONTHLY LEASE PAYMENTS.
Tenant shall pay to Landlord a total annual lease payment of $291,600
payable in advance, in installments of $24,300 per month on the first day of
each month. Lease payments shall be made to the Landlord attention Xxxxx X.
Xxxxxxx, at 000 X.X. Xxxxxx, Xxxxx #0000, Xxxxxxxx, Xxxxxx 00000, as may be
changed from time to time by Landlord.
6.1 LATE PAYMENTS.
Tenant shall pay a late charge equal to 5% for each payment that is not
paid within 7 days of the due date.
6.2 NON-SUFFICIENT FUNDS.
Tenant shall be charged $50.00 for each check that is returned to Landlord
for lack of sufficient funds.
6.3 SECURITY DEPOSIT.
At the time of the signing of this Lease, Tenant shall pay to Landlord, a
security deposit of $10,000 to be held and disbursed for Tenant damages to the
Premises (if any) as provided by law.
7.0 POSSESSION.
Tenant has been in possession of Premises and shall continue to be
entitled to possession and shall yield possession to Landlord on the last day of
the term of this Lease, unless otherwise agreed by both parties in writing.
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8.0 REMODELING AND / OR STRUCTURAL IMPROVEMENTS.
Tenant shall have the right to conduct any construction or remodeling (at
Tenant's sole expense) that may be required to use the Premises. Tenant may also
construct fixtures on the Premises (at Tenant's expense). Any and all
construction shall be undertaken (if the estimated cost of remodeling exceeds
$5,000) only with the prior written consent of the Landlord which shall not be
unreasonably withheld. Tenant shall present to Landlord plans, specifications
and drawings, if applicable, at the time approval is sought. All materials
installed and workmanship shall be of a quality totally consistent with the
existing "in place" construction of the Premises. At the end of the lease term,
Tenant shall not be entitled to remove such fixtures.
9.0 MAINTENANCE AND REPAIRS
Tenant shall have the sole responsibility of maintaining the Premises.
9.1 Landlord shall not be required to make any repairs, alterations, additions
or improvements to or upon said Premises, except as set forth in Section 9.4.
Tenant shall repair and maintain in good working order the exterior walls of the
Building, landscaping on the Premises, and interior areas of the Building
including lobbies, stairs, windows, halls, corridors, restrooms, and provide
exterior window washing at reasonable intervals, weather permitting.
9.2 Tenant shall repair and maintain in good working order all interior walls,
floor coverings, window moldings, base moldings, door moldings, doors and
entrances, window fittings, window glass, interior paint and trim, signs,
heating, ventilation and cooling systems, fixtures, lighting fixtures and bulbs
and all other components of the Premises. Tenant shall provide janitorial
services and restroom supplies for the Premises, telephone service, and any
other service required by Tenant specifically for the Premises, at all Tenant's
expense.
9.3 If tenant refuses or neglects to maintain and repair as required by this
Lease and to the reasonable satisfaction of Landlord, then Landlord may, after
written demand (but without obligation to do so), accomplish the maintenance and
repair without liability for loss or damage which may accrue to Tenant's
property, and Tenant shall promptly pay Landlord's costs for the maintenance and
repair, plus 10% of the costs for overhead, plus interest on 110% of the costs
at the rate of 12% per annum from the date of completion until paid, all of
which shall constitute additional rent under this Lease.
9.4 Roof and Foundation. Landlord shall repair and maintain in good working
order the roof and structural foundation.
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10.0 ACCESS BY LANDLORD.
Subject to Tenant's consent (which shall not be unreasonably withheld),
Landlord shall have the right to enter the Premises to make inspections, provide
necessary services, or show the Premises to prospective buyers, mortgagees,
tenants or workers. As provided by law, in the case of an emergency, Landlord
may enter the Premises without Tenant's consent. Tenant shall supply Landlord
with a complete set of Exterior Door Keys, Security System entry card, etc. upon
request.
11.0 UTILITIES AND SERVICES.
Tenant shall be responsible for all utilities and services.
12.0 PROPERTY INSURANCE.
Landlord and Tenant shall each be responsible to maintain appropriate
insurance for their respective interest in the Premises and personal property
located on or about the Premises. All insurance premiums incurred by the
Landlord (for the building and improvements) shall be promptly reimbursed by the
Tenant to the Landlord.
12.1 LIABILITY INSURANCE.
Tenant shall maintain liability insurance in total aggregate sum of at
least $2,000,000. Tenant shall deliver appropriate evidence to Landlord as proof
that adequate insurance is in force. Landlord shall have the right to require
that the Landlord receive notice of any termination of such insurance policies.
12. 2 TAXES.
Tenant shall be responsible for all ad valorem, real or other property
taxes assessed against the Premises or its contents.
13.0 INDEMNITY.
Tenant agrees to indemnify, hold harmless and defend Landlord from and
against any and all losses, claims, liabilities, and expenses, including
reasonable attorney fees, if any, which Landlord may suffer or incur in
connection with Tenant's use of the Premises.
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14.0 DANGEROUS MATERIALS.
Tenant shall not keep or have on the Premises any article or thing of a
dangerous, inflammable, or explosive character that might substantially increase
the danger of fire on the Premises, or that might be considered hazardous by a
responsible insurance company, unless the prior written consent of Landlord is
obtained and proof of adequate insurance protection is provided by Tenant to
Landlord. See Exhibit 14.0 attached.
15.0 DESTRUCTION OR CONDEMNATION OF PREMISES.
If the Premises are partially destroyed in a manner that prevents the
conduct of commercial printing in a normal manner, and if the damage is
reasonably repairable within ninety days after the occurrence of the
destruction, and if the cost of restoration and repair is less that $100,000,
Tenant shall restore the Premises and lease payments shall not xxxxx during the
period of the restoration. However, if the damage is not repairable within
ninety days, or if Tenant is prevented from repairing the damage by forces
beyond Tenant's control, or, if the cost of restoration and repair is more than
$100,000 or if the property is condemned, this Lease shall terminate after sixty
days written notice of such event or condition by either party.
15.1 MECHANICS LIENS.
Neither the Tenant nor anyone claiming through the Tenant shall have the
right to file mechanics liens or any other kind of lien on the Premises and the
filing of this Lease constitutes notice that such liens are invalid. Further,
Tenant agrees to give actual advance notice to any contractors, subcontractors
or suppliers of goods, labor, or services that such liens will not be valid.
16.0 DEFAULTS
Tenant shall be in default of this Lease, if Tenant fails to fulfill any
lease obligation or terms by which Tenant is bound. Subject to any governing
provisions of law to the contrary, if Tenant fails to cure any financial
obligation within ten days (or any other obligation within twenty days) after
written notice of such default is provided by Landlord to Tenant, Landlord may
take possession of the Premises without further notice, and without prejudicing
Landlord's rights to damages. In the alternative, Landlord may elect to cure any
default and the cost of such action shall be added to Tenant's financial
obligations under this Lease. Tenant shall pay all costs, damages, and expenses
suffered by Landlord by reason of Tenant's defaults including reasonable
Attorney and arbitration fees and expenses.
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16.1 Tenant shall be in breach of this Lease if at any time during this Lease
(and regardless of the pendency of any bankruptcy, reorganization, receivership,
insolvency or other proceeding, in law, in equity or before any administrative
tribunal, which might have the effect of preventing Tenant from complying with
the terms of this Lease):
16.1.1 Tenant fails to make when due any payment and such failure is not
cured within 10 days after Landlord has given written notice to Tenant.
16.1.2 Tenant fails to perform or observe any of Tenant's other
obligations under this Lease and such failure is not cured within 20 days after
Landlord has given written notice to Tenant of such failure.
16.1.3 Tenant becomes insolvent, or makes a transfer in fraud of its
creditors, or makes an assignment for the benefit of its creditors; or if an
execution shall be issued against Tenant;
16.1.4 Tenant voluntarily files, or has filed against it, a petition under
any provision of the federal Bankruptcy Code, as amended, or under any similar
law or statute of the United States or any state, and such petition is not
dismissed within 30 days thereafter, or Tenant is adjudged bankrupt or insolvent
in a proceeding filed by or against Tenant; or
16.1.5 A receiver or trustee is appointed for all or substantially all of
Tenant's assets.
16.2 If Tenant breaches this Lease and abandons the Premises before the end of
the term or if Tenant's right to possession is terminated by Landlord because of
Tenant's breach of this Lease, then, this Lease shall automatically terminate
and Landlord may recover from Tenant:
16.2.1 The worth at the time of award of the unpaid rent which had been
earned at the time of termination; and
16.2.2 Any other amount necessary to compensate Landlord for all damage
proximately caused by Tenant's breach of Tenant's obligations under this Lease,
or which in the ordinary course of things would be likely to result therefrom,
including but not limited to Tenant's insurance premiums, utilities, maintenance
or any other obligations other than rent of Tenant, for the balance of the Lease
term to the extent such losses could not be reasonably avoided.
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16.3 If Tenant breaches this Lease and abandons the Premises, this Lease shall
continue in full force and effect so long as Landlord does not terminate
Tenant's right to possession of the Premises, and Landlord may enforce all its
rights and remedies under this Lease, including the right to recover rent as it
becomes due, or alternately, Landlord may collect all amounts then due and
accelerate all future amounts due under this Lease and collect those amounts
from the Tenant. For purposes of this section, the following acts by Landlord
shall not constitute termination of Tenant's right to possession of the
Premises:
16.3.1 Acts of maintenance or preservation or efforts to relet the
Premises or any part of them; or
16.3.2 The appointment of a receiver upon the initiative of Landlord to
protect Landlord's interest under this Lease or in the Premises.
17.0 ARBITRATION.
Any controversy or claim relating to this Lease, including the
construction or application of this Lease agreement, will be settled by binding
arbitration under the rules of the American Arbitration Association, and any
judgement granted by the arbitrator(s) may be enforced in any court of proper
jurisdiction. Notwithstanding the above, any ambiguities in this Lease shall be
interpreted in favor of the Landlord, where appropriate.
18.0 ASSIGNABILITY / SUBLETTING.
Tenant may not assign or sublease any interest in the Premises without the
prior written consent of Landlord, which may be unreasonably withheld.
19.0 TERMINATION UPON SALE OF PREMISES.
Notwithstanding any other provision of this Lease, Landlord may terminate
this lease upon sixty (60) days written notice to Tenant that the Premises have
been sold.
20.0 NOTICES.
Notices under this Lease shall not be deemed valid unless given or served
in writing and forwarded by mail, postage prepaid, addressed as follows:
LANDLORD:
The Marital Trustees u/w of Xxxxx X. Xxxxxxx
C/O Xxxxx X. Xxxxxxx
000 X.X. Xxxxxx
-00-
Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
TENANT:
Fine Arts Engravers Company, Inc.
An Oregon Corporation
Attention: Xxxx Xxxxxxx
00000 X.X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Such addresses may be changed from time to time by either party by providing
written notice.
20.1 ENTIRE AGREEMENT/ AMENDMENT.
This Lease Agreement contains the entire agreement of the parties and
there are no other promises or conditions in any other agreement whether oral or
written. This Lease may be modified or amended in writing, if the writing is
signed by both the Landlord and the Tenant.
20.2 SEVERABILITY.
If any portion of this Lease shall be held to be invalid or unenforceable
for any reason, the remaining provisions shall continue to be valid and
enforceable. If a court finds that any provision of this Lease is invalid or
unenforceable, but that by limiting such provision, it would become valid and
enforceable, then such provision shall be deemed to written, construed, and
enforced as so limited.
20.3 WAIVER.
The failure of either party to enforce any provisions of this Lease shall
not be construed as a waiver or limitation of that party's right to subsequently
enforce and compel strict compliance with every other provision of this Lease.
20.4 CUMULATIVE RIGHTS.
The rights of the parties under this Lease are cumulative, and shall not
be construed as exclusive unless otherwise required by law.
20.5 GOVERNING LAW.
This lease shall be construed in accordance with the laws of the state of
Oregon.
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20.6 SUBORDINATION OF LEASE; ESTOPPEL CERTIFICATE.
This lease is subordinate to any mortgage, loan or deed or trust with
respect to the Premises, whether now or hereinafter existing.
20.6.1 At Landlord's election, this Lease shall be subordinated to any
mortgage, deed of trust or other encumbrance now or hereafter placed upon the
Premises, and to any and all advances, whether obligatory or optional made on
the security of the same, and to all renewals modifications, consolidations,
replacements and extensions of the same. Tenant shall attorn to any purchaser at
any foreclosure sale, or to any grantee or transferee designated in any deed
given in lieu of foreclosure. Tenant agrees to execute any documents required to
accomplish a subordination and, failing to do so within 20 days after Landlord's
written demand to Tenant, does hereby irrevocably appoint Landlord as Tenant's
attorney-in-fact and in Tenant's name to do so.
20.6.2 Tenant shall from time to time, upon not less than 10 days' prior
written notice, submit to Landlord, or to any person designated by Landlord, a
statement in writing certifying that this Lease is unmodified and in full
force and effect, that no unsecured defaults exist, the date to which rental
has been paid and/or that Tenant has no claims against the Landlord.
31.0 RIGHT OF FIRST REFUSAL.
Landlord and Tenant agree that if a bona fide offer to purchase all of the
Premises is tendered to Landlord by a third party and said officer is acceptable
to Landlord, then Tenant shall have five (5) business days to match the offer
and agree to execute a Purchase and Sale Agreement that's substantially
consistent with the terms of said bona fide offer. If Tenant does not match or
exceed the third party's written bona fide offer, then Landlord may then sell
all of the Premises to the third party.
32.0 SURRENDER OF PREMISES.
At the expiration or other termination of this Lease, Tenant shall
surrender the Premises in their condition at the time of initial occupancy,
except for reasonable wear and tear and uninsured casualty not caused by Tenant.
Tenant shall remove all of Tenant's personal property which are not Tenant
Improvements. Tenant shall repair any damage to the Premises caused by the
removal. Tenant's obligations under this Section 32, as well as all unpaid
obligations of Tenant to Landlord, shall survive the expiration or other
termination of this Lease.
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Executed by the parties or their duly authorized representatives as of the
date first provided above, in two counterparts, each of which shall constitute
an original.
LANDLORD TENANT
Fine Arts Engravers Company, Inc.
BY /s/ Illegible BY /s/ Illegible
--------------------------------- -------------------------------------
Its Agent Its President
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LEASE AMENDMENT NO. 1
WHEREAS, the Industrial Real Estate Lease dated July 1, 1996 is in full force
and effect,
WHEREAS, there are no disputes between the Landlord and Tenant,
WHEREAS, the Landlord desires to increase the security deposit to a more
commercially reasonable level,
IT IS AGREED THAT:
When and only if the sale closes, Tenant shall increase the security deposit to
a total of $48,600 and in connection with the Assignment and Assumption, ImageX
hereby guarantees the performance of all of Assignee's obligations including
without limitation, the performance of all the terms, conditions, covenants,
obligations, and provisions applicable to Tenant under the Lease arising from
and after the Effective Date.
All other terms of the lease shall remain unchanged.
READ, AGREED, AND ACCEPTED
Tenant: Keystone Acquisition Corp.
/s/ Xxxxxxx X. Xxxxxx April 13, 1999
------------------------------------ ---------------------------------------
By: Xxxxxxx X. Xxxxxx Date
Title: President and Chief
Executive Officer
Landlord: Marital Trust
/s/ Xxxxx X. Xxxxxxx April 13, 1999
------------------------------------ ---------------------------------------
By: Xxxxx X. Xxxxxxx Date
Title: Agent for the Trustees
Guarantor: XxxxxX.xxx, Inc.
/s/ Xxxxxxx X. Xxxxxx April 13, 1999
------------------------------------ ---------------------------------------
By: Xxxxxxx X. Xxxxxx Date
Title: President and Chief
Executive Officer
