Exhibit 10.41
WORK LETTER AGREEMENT
TENANT IMPROVEMENTS
Work Letter Agreement ("Agreement"), dated as of the 7 day of October,
1997, by and between CREEKSIDE BUILDING LLC, a Washington limited liability
company ("Landlord"), and PACIFIC AEROSPACE AND ELECTRONICS, INC., a Washington
corporation ("Tenant").
RECITALS
Concurrently with the execution of this Agreement, Landlord and Tenant have
entered into a lease ("Lease") covering certain premises ("Premises") more
particularly described in Exhibit A-1 attached to the Lease.
In order to induce Tenant to enter into the Lease and in consideration of
the mutual covenants hereinafter contained, Landlord and Tenant hereby agree as
follows. Capitalized terms used herein shall have the meanings ascribed to them
in the Lease.
1. TENANT IMPROVEMENTS
1.1 In this Agreement "Tenant Improvements" shall include all work to be
done in the Premises pursuant to the Tenant Improvements Plans
described in and developed in accordance with Section 2, as modified
by Tenant pursuant to Section 3.
2. TENANT IMPROVEMENTS PLANS
2.1 Landlord and Tenant have agreed that the Tenant Improvements shall as
described in accordance with that certain Floor Plan for Pacific
Aerospace & Electronics prepared by Xxxxxx X. Xxxxxx & Associates,
Latest Revision dated September 16, 1997 and Assumptions provided in
the letter of GLY Construction dated September 15, 1997, copies of
which are attached hereto (collectively, the "Schematic Space Plan").
Based upon the Schematic Space Plan, Landlord has prepared the Tenant
Improvements construction documents (i.e., final working drawings and
specifications for the Tenant Improvements), which Tenant Improvements
construction documents shall then constitute the "Tenant Improvements
Plans." The Tenant Improvements Plans have been submitted to Tenant
and have also been submitted by Landlord for permit issuance pursuant
to Section 4.2.
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3. TENANT REQUESTED CHANGES TO TENANT IMPROVEMENTS PLANS
3.1 After Landlord's submission of the Tenant Improvements Plans to
Tenant, Tenant may, at Tenant's election, request revisions,
modifications, changes and amendments to the Tenant Improvements
Plans; and, subject to Landlord's consent and approval, in the
exercise of Landlord's reasonable discretion, the Tenant Improvements
Plans shall be so revised, provided, however, that to the extent that
Tenant requires matters in the Tenant Improvements Plans that vary
from or are inconsistent with the Schematic Space Plan, such variances
shall not constitute a portion of the Tenant Improvements for which
Landlord shall be required to pay under Section 5, except insofar as
Landlord expressly agrees otherwise. Additionally, delays resulting
from any such changes together with the time period for the
preparation of pricing and review and approval by Landlord and Tenant
shall constitute a Tenant Delay in accordance with the provisions of
Section 6 herein. If approved by Landlord, changes to the Tenant
Improvements Plans shall be evidenced by written change order signed
by Landlord, Tenant and the construction contractor. For purposes of
this Agreement, Landlord may only withhold its consent or approval of
a requested change or revision if such change or revision (i) exceeds
or adversely affects the structural integrity of the Building (as
defined in the Lease), or any part of the heating ventilating, air
condition, plumbing, mechanical, electrical or other systems of the
Building (ii) is not approved by the holder of any mortgage or deed of
trust encumbering the Building at the time the change or revision is
proposed, (iii) would not be approved by a prudent owner of property
similar to the Building, (iv) violates any agreement which affects the
Building or binds Landlord, (v) will materially increase the costs of
operation or maintenance of any of the systems of the Building, or
(vi) does not conform to applicable building codes or other laws.
4. CONSTRUCTION OF TENANT IMPROVEMENTS
4.1 Landlord shall cause the Tenant Improvements to be substantially
completed sufficient for the issuance of a temporary certificate of
occupancy for the Premises on or before November 15, 1997, or such
later date, in accordance with the provisions set forth in this Work
Letter.
4.2 With respect to construction of the Tenant Improvements, the Tenant
Improvements Plans have been submitted to the appropriate governmental
body for plan checking and the issuance of necessary permits and
approvals. Landlord, with Tenant's cooperation, shall cause to be made
any changes in the Tenant Improvements Plans necessary to obtain such
permits and
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approvals. After a permit for the Tenant Improvements has been issued,
Landlord shall cause its contractor to install the Tenant Improvements
in accordance with the Tenant Improvements Plans. Landlord shall
supervise the completion of such work and shall use diligent efforts
to secure substantial completion of the work on or before November 15,
1997 or such later date, in accordance with the Work Letter. The cost
of such work shall be paid as provided in Section 3 (to the extent of
Tenant requested changes to the Tenant Improvements) and Section 5.
4.3 In connection with the construction of the Tenant Improvements,
Landlord shall arrange with Tenant to have access to the Premises
commencing approximately 7 days prior to the estimated date for
substantial completion in order to allow Tenant to install telephone
lines and telephone systems, fiber optics, computer cabling, and
related similar matters, and, on a "space ready" basis only, to
commence installation of Tenant's trade fixtures. Tenant shall
schedule installation of such items with Landlord and Landlord's
contractor so as not to unreasonably impede, interfere with or delay
the progress of construction of the Tenant Improvements; and Tenant
shall perform such installation in accordance with reasonable
guidelines promulgated by Landlord's contractor. Delay, interference
or damage arising out of Tenant's installation of such items shall
constitute a Tenant Delay under Section 6. Any and all costs of
installation of such items shall be at Tenant's sole cost and expense.
4.4 If, during the period of construction of the Tenant Improvements,
Landlord requires Tenant's approval of certain matters and
installations related to the Tenant Improvements, Tenant agrees to
respond to Landlord's request for approval within two (2) business
days. Failure of Tenant to respond within two (2) business days shall
constitute a Tenant Delay.
4.5 During the period of construction of the Tenant Improvements, Landlord
and Tenant shall meet at regular meetings occurring at least once
monthly regarding the status of the construction and occurring at
least once weekly during the final month of construction. If timely,
matters requiring Tenant's approval may he determined at such meetings
and decisions shall be reflected in the minutes of such meetings.
5. PAYMENT OF COST OF THE TENANT IMPROVEMENTS
5.1 Landlord is providing the Premises on a "turn-key" basis and, except
as may be otherwise provided in this Work Letter, Landlord shall pay
the entire cost
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of improving the Premises with the Tenant Improvements in accordance
with the Schematic Space Plan and the Tenant Improvements Plans.
5.2 Notwithstanding the other provisions of this Work Letter Agreement,
any other items expressly charged to Tenant under the terms of this
Work Letter Agreement, constituting a portion of the Tenant
Improvements shall be paid for by Tenant.
6. DELAY IN COMPLETION OF TENANT IMPROVEMENTS AND DELIVERY OF POSSESSION
6.1 To the extent there occurs a delay in completing the Tenant
Improvements and delivering possession of the Premises later than
November 15, 1997, which delay is caused by reason other than: (i)
strike, labor troubles, acts of god, governmental requirement,
shortages of fuel, labor or building materials, action or non-action
of public utilities or any other cause beyond the reasonable control
of Landlord ("Force Majeure"), (ii) Tenant's failure to meet its
obligations under the Lease or this Work Letter Agreement, (iii)
Tenant initiated changes to the Tenant Improvements Plans, (iv)
Tenant's failure to complete its approval of actions in accordance
with this Work Letter, or (v) interference or damage arising out of
Tenant's installation of telephone lines and telephone systems, fiber
optics, computer cabling, and related similar matters pursuant to
Section 4 (collectively, "Tenant Delay"), then Landlord and Tenant
agree that Tenant's sole remedy for such delay shall be a delay in the
Commencement Date and the Rent Commencement Date one day for each one
day of delay in the date of completion of the Tenant Improvements and
delivery of possession of the Premises by Landlord.
6.2 To the extent that the delay in completing the Tenant Improvements and
delivering possession of the Premises within the time period set forth
herein is caused by Force Majeure or Tenant Delays, Landlord shall
have no responsibility for any costs associated with such delay and
the Rent Commencement Date shall not be delayed as a result of such
delay.
7. SUBSTANTIAL COMPLETION
7.1 Prior to the Commencement Date, Tenant and Landlord will conduct a
walk-through inspection of the Premises and prepare a punch-list of
items needing additional work by Landlord. Landlord will cause its
contractor to complete all punch-list items within thirty (30) days
after the walk-through inspection or as soon as practicable
thereafter.
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7.2 The Tenant Improvements shall be deemed substantially complete
notwithstanding the fact that minor details of construction,
mechanical adjustments or decorations which do not materially
interfere with Tenant's use and enjoyment of the Premises remain to be
performed (items normally referred to as "punch list" items).
7.3 If, within one (1) year of the Commencement Date, Tenant notifies
Landlord of a latent defect in the Premises, Landlord shall repair
such latent defect as soon as practical at Landlord's sole cost and
expense. A "latent defect" shall mean any defect in the condition of
the Premises caused by Landlord's failure to construct the Premises of
the Tenant Improvements in a good and workmanlike manner, which defect
would not ordinarily be observed in a walk-through inspection of the
Premises.
8. TENANT REPRESENTATIVE
8.1 Tenant appoints Xxxxx Xxxxx as Tenant's Representative to act for
Tenant in all matters under this Agreement. Landlord appoints Xxxxx
Xxxxxxxx of The Quadrant Corporation as Landlord's Representative to
act for Landlord in all matters under this Agreement. All inquiries,
requests, instructions, authorizations, and other communications under
this Agreement shall be made by Landlord or Tenant to the other's
Representative. Either party may change the identity of its
Representative by notice in writing to the other party.
9. GENERAL
9.1 The provisions of the Lease and of the Exhibits hereto are made a part
of this Agreement. The parties shall execute such further documents
and instruments and take such other further actions as may be
reasonably necessary to carry out the intent and provisions of this
Agreement.
9.2 During the construction period, to the extent permitted by the City of
Bothell, Landlord may provide such signage stating the future tenancy
of Tenant as Landlord deems appropriate.
[THE REST OF THIS PAGE LEFT INTENTIONALLY BLANK.]
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EXECUTED as of the date first above written.
LANDLORD:
CREEKSIDE BUILDING LLC, a Washington
limited liability company
By XXXXX FARGO BANK, N.A., AS CORPORATE
CO-TRUSTEE FOR AUTOMOTIVE INDUSTRIES
PENSION TRUST FUND; AND FOR STATIONARY
ENGINEERS LOCAL NO. 39 PENSION TRUST
FUND, AND FOR STATIONARY ENGINEERS LOCAL
NO. 39 ANNUITY TRUST FUND, as authorized
signatory for all Members
By /s/
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Its Vice President
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By /s/
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Its Vice President
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TENANT:
PACIFIC AEROSPACE AND ELECTRONICS, INC.
By /s/ XXXXXX X. XXXXXX
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Its President/CEO
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