EXHIBIT 10.4
FIRST AMENDMENT TO COMMERCIAL LEASE
THIS FIRST AMENDMENT TO COMMERCIAL LEASE ("Amendment") is made and entered
into this 3rd day of January, 1995 by and between XXXXXXXXX & SAMPLE
INVESTMENTS, a General Partnership ("Lessor"), and INTERNATIONAL AMBASSADOR
PROGRAMS, INC., a Washington Corporation ("Lessee").
RECITALS
A. On or about December 21, 1992, Lessor and Lessee entered into a
Commercial Lease (the "Lease") for the premises commonly known as South 110
Xxxxxxx, Spokane, Washington (the "Demised Premises").
B. The Lease provides that Lessee may not assign the Lease without the
prior written consent of Lessor, and further provides that the sale of Lessee's
stock is deemed to be an assignment.
C. Lessee's stock is being sold and the parties desire to confirm
Lessor's approval of the assignment and to amend the Lease in certain respects.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Lessor hereby consents to the assignment of the Lease resulting from
the sale of one hundred percent (100%) of the capital stock of Lessee from Xxxx
X. Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxx Xxxxxxxxx and Xxxx X. Sample to Xxxxx X.
Xxxxxxxxx and Xxxx Xxxxxxxxx.
2. Article I Section 2 is hereby amended to provide that the term of the
Lease shall end on December 31, 2004, subject to the extension or earlier
termination as provided herein.
3. Article III Section 2 hereby amended to provide that Lessee may use
the Demised Premises for any lawful use.
4. Article III Section 4 is hereby amended to provide that Lessee shall
not be required to comply with any law, ordinance or regulation which (a)
requires structural changes or modifications to the Demised Premises, or (b)
involves the clean-up, removal or remediation of Hazardous Substances in, on,
under or about the Demised Premises, unless caused by Lessee. As used herein,
"Hazardous Substances" means any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Demised
Premises, is either:
(i) potentially injurious to the public health, safety or welfare, the
environment or the Demised Premises, (ii) regulated or monitored by any
governmental authority, or (iii) a basis for liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil or any products, by-products or
fractions thereof, and asbestos.
5. Article IV Section 1 is hereby amended to provide (a) that the limits
of the liability insurance shall be not less than Three Million Dollars
($3,000,000) combined single limit, and (b) that the requirement that Lessee
obtain a written obligation from the insurance company to notify Lessor at
least thirty (30) days prior to cancellation shall be on a "best efforts" basis.
6. Section 7 of Article IV is hereby amended to reduce the fifty percent
(50%) to twenty-five percent (25%) and also to give Lessee the right to
terminate the lease in the event of such damage or destruction. Furthermore, the
monthly rental shall be abated in the same proportion as the damaged and
destroyed portion bears to the entire Demised Premises.
7. Article VI is hereby deleted and replaced with the following:
"Lessee is hereby granted the right and option to renew this
Lease for an additional period of ten (10) years upon the
expiration of the initial terms, upon the same terms and
conditions (except that the monthly rental during said renewal
period shall be the fair rental value of the Demised Premises as
of the date that the option is exercised), provided that Lessee
gives Lessor written notice of its intention to exercise this
option to extend the term not later than six (6) months prior to
the end of the initial term. For purposes of this provision, the
fair rental value of the Demised Premises shall be based on the
market rentals of similar properties in the Spokane area."
8. Article VII Section 1 is hereby amended to provide that Lessee may make
cosmetic or other nonstructural alterations or improvements to the Demised
Premises (not exceeding Fifty Thousand Dollars ($50,000) over the term of the
Lease) without Lessor's prior consent.
9. Article VIII is hereby amended to provide that, subject to the
provisions of this Lease dealing with damage and destruction and condemnation,
(a) Lessor shall be responsible for the maintenance and repair of the
structural portions of the Demised Premises, and (b) Lessee's responsibility to
maintain and
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repair the balance of the Demised Premises (including the roof) is limited with
respect to any item which costs more than $10,000.00 to repair or replace such
that Lessee shall only be liable for a proportion of the cost thereof computed
by dividing the number of years remaining in the term of the Lease (excluding
unexercised options) by ten (10). For example, if an air conditioning unit
requires replacement at the cost of $50,000 with four years remaining in the
initial term of the Lease, then Lessee's responsibility will be 4/10 of such
cost, or $20,000.
10. Article X is hereby amended by deleting the next to last sentence and
inserting the following in lieu thereof: "For the purposes of this Lease, the
sale, conveyance, assignment or other transfer of more than fifty-one percent
(51%) of the common stock of Lessee, other than among the persons described in
Paragraph 1 hereof (or to a trust created for the benefit of any of such
persons) shall be deemed an assignment for the purposes of the restrictions in
this Article X."
11. Article XI Section 1 is hereby amended to provide that should real
property taxes which are assessed against the Demised Premises increase as a
result of the sale, transfer or other alienation or encumbering thereof by
Lessor, then Lessor and not Lessee shall be liable for such tax increases.
12. Article XX Section 1 is hereby amended as follows:
(a) Subparagraph (a) is hereby deleted and replaced with the
following: "Lessee shall fail to pay any installment of rental or additional
rental hereunder and such failure shall continue for a period of ten (10) days
after written notice from Lessor."
(b) Subparagraph (b) is amended by adding the following: "Provided,
however, that if the nature of the default is such that it is reasonably
expected to take more than twenty (20) days to cure, then an event of default
will not exist if Lessee commences the cure within the twenty (20) day time
period and thereafter diligently pursues the cure to completion."
(c) Subparagraph (e) is amended by adding the following: "which
receiver or trustee is not removed or discharged within thirty (30) days".
(d) Subparagraph (g) is amended by adding the following: "which lien
is not removed or bonded against within thirty (30) days after notice thereof
from Lessor".
13. Article XII Section 3 is hereby amended by adding the following: "If
Lessee is the prevailing party in any legal action commenced to interpret or
enforce the Lease, whether commenced by Lessee or Lessor, Lessee shall be
entitled to recover from Lessor its reasonable attorneys' fees and court costs."
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14. Article XIII is hereby amended to provide (a) that mailed notices
shall be deemed received on the earlier of the date of delivery shown on the
return-receipt or the second (2nd) business day after mailing, (b) that notices
may be given by overnight delivery service, such as Federal Express, which
shall be deemed received on the date of delivery, and (c) that copies of all
notices to Lessee shall be mailed to the following address:
Xxxxx X. Xxxxxxxxx
Xxxx Xxxxxxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
15. The following additional provisions are hereby added to the Lease as
Article XV:
"1. Notwithstanding anything in the Lease to the
contrary, Lessee may terminate this Lease at any time
upon giving not less than twelve (12) months' written
notice to Lessor; provided, however, Lessee may not
give such notice prior to December 31, 1995.
2. Either Lessor or Lessee shall, within fifteen
(15) days after written notice from the other party,
execute, acknowledge and deliver to the requesting
party a customary estoppel certificate or tenancy
statement.
3. At the request of either Lessor or Lessee, a
short form or memorandum of this Lease shall be
recorded, at the expense of the requesting party.
4. Whenever in this Lease the consent of a party
is required to an act by or for the other party, such
consent shall not be unreasonably withheld or delayed."
16. Lessor represents and warrants to Lessee that on the date of this
Amendment the Demised Premises comply with all applicable covenants and
restrictions of record and all applicable building codes, regulations and
ordinances then in effect (such representation and warranty does not apply to
the present use to which Lessee has put the Demised Premises). Further, Lessor
represents and warrants to Lessee that the existing plumbing, fire sprinkler
system (if any), lighting, air conditioning, heating and other mechanical
systems within the Demised Premises are in good and normal operating condition
as of the date of this Amendment. If Lessee gives notice to Lessor that any of
the foregoing representations or warranties are inaccurate within six (6)
months after the date of this Amendment, Lessor will immediately correct the
problem at Lessor's expense.
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17. Lessor represents and warrants to Lessee that it is not aware of the
existence of any Hazardous Substances in, on, under or about the Demised
Premises as of the date of this Amendment.
18. Capitalized terms used in this Amendment shall have the same meaning
as set forth in the Lease, unless otherwise provided herein.
19. To the extent that the provisions of this Amendment conflict or are
inconsistent with the provisions of the Lease, the provisions of this Amendment
shall control.
20. Except as amended hereby, all terms and conditions of the Lease shall
remain in full force and effect as originally written.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date
first above written.
"LESSOR" "LESSEE"
XXXXXXXXX & SAMPLE INTERNATIONAL AMBASSADOR
INVESTMENTS, a General PROGRAMS, INC., a Washington
Partnership Corporation
By /s/ XXXXXXXX X. XXXXXXXXX By /s/ XXXX X. XXXXXX
-------------------------------- --------------------------------
Its Partner Its President
------------------------------- -------------------------------
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COMMERCIAL LEASE
LESSOR: XXXXXXXXX & SAMPLE INVESTMENTS, a general partnership
LESSEE: INTERNATIONAL AMBASSADOR PROGRAMS, INC. a Washington corporation
TABLE OF CONTENTS
ARTICLE I. ................................................................. 1
1. Demised Premises.................................................... 1
2. Lease Term.......................................................... 1
3. Recording........................................................... 1
ARTICLE II. ................................................................ 2
1. Granting Clause..................................................... 2
2. Amount of Rent...................................................... 2
3. Time of Payment..................................................... 2
4. Late Rental......................................................... 2
ARTICLE III. ............................................................... 2
1. Holding Over........................................................ 2
2. Commercial Use...................................................... 2
3. Quiet Enjoyment..................................................... 2
4. Laws and Ordinances................................................. 2
5. Environmental Regulations........................................... 3
6. Utility Services.................................................... 3
7. Taxes and License Fees on Building Activity......................... 3
8. Building Employees and Janitorial Services.......................... 3
9. Personal Property................................................... 3
ARTICLE IV. ................................................................ 4
1. Liability Insurance................................................. 4
2. Fire and Extended Coverage.......................................... 4
3. Acts of Invalidation................................................ 4
4. Lessor's Negligence................................................. 4
5. Losses Covered by Insurance......................................... 4
6. Liability for Damage................................................ 4
7. Notice of Damage.................................................... 5
8. Rebuilding and Repair ............................................... 5
9. Operation During Repair ............................................. 5
ARTICLE V. .................................................................. 5
1. Eminent Domain Greater Than 20% Taken ............................... 5
2. Eminent Domain Less Than 20% Taken .................................. 5
3. Assignment of Compensation .......................................... 5
ARTICLE VI. ................................................................. 5
Option to Renew ..................................................... 5
ARTICLE VII. ................................................................ 6
1. Future Remodeling.................................................... 6
2. Ownership of Improvements ........................................... 6
3. Consent of Lessor Required .......................................... 6
4. Governmental Approval ............................................... 6
5. Insurance Premium Increases ......................................... 6
6. Waiver of Lien Required ............................................. 6
ARTICLE VIII. ............................................................... 6
Repairs ............................................................. 6
ARTICLE IX. ................................................................. 7
Access .............................................................. 7
ARTICLE X. .................................................................. 7
Assignment and Subletting ........................................... 7
ARTICLE XI. ................................................................. 7
1. Property Taxes ...................................................... 7
2. Future Taxes on Rentals ............................................. 7
ARTICLE XII. ................................................................ 7
1. Event of Default .................................................... 7
(a) Failure to Pay Rent ........................................... 7
(b) Failure to Comply With Terms of Lease ......................... 7
(c) Insolvency of Lessee .......................................... 7
(d) Bankruptcy of Lessee............................................ 8
(e) Appointment of Receiver......................................... 8
(f) Abandonment..................................................... 8
(g) Creation of Lien................................................ 8
2. Remedies for Default.................................................. 8
(a) Termination of Lease and Surrender.............................. 8
(b) Retaking Possession and Reletting Without Termination of Lease.. 8
3. Attorney's Fees ...................................................... 8
ARTICLE XIII. ................................................................ 8
Notices to Lessee and Lessor.......................................... 8
ARTICLE XIV. ................................................................. 9
1. Legal Relationship of Lessor and Lessee............................... 9
2. Captions and Construction of Language................................. 9
3. Waiver of Covenants................................................... 9
4. Computation of Time................................................... 9
5. Entire Agreement...................................................... 9
6. Applicable Laws....................................................... 9
7. Binding Effect........................................................ 9
COMMERCIAL LEASE
THIS LEASE is made this 21st day of December, 1992, between XXXXXXXXX &
SAMPLE INVESTMENTS, a General Partnership, with its principal offices in
Spokane, Washington, the "LESSOR," and INTERNATIONAL AMBASSADOR PROGRAMS, INC. a
Washington corporation, with its principal office in Spokane, Washington, the
"LESSEE."
ARTICLE I.
1. Demised Premises. The Demised Premises is property located at South 110
Xxxxxxx, Spokane, Washington, more particularly described as:
Xxxx 0, 0, 0, 0, 0, 0, 00, 00 & 12, Block 11, and Xxxx 0, 0 xxx 0 xx Xxxxx
2, XXXXXXX'X SECOND ADDITION, as per plat thereof recorded in Volume "B" of
Plats, page 4, records of Spokane County;
EXCEPT that portion of Lot 3 deeded to the City of Spokane for street
purposes described as follows: BEGINNING at a point on the East line of
said Xxx 0, 00 xxxx Xxxxx xx xxx Xxxxxxxxx corner; thence Southwesterly to
a point on the South line, 90 feet West of the Southeast corner; thence
East along the South line to the Southeast corner; thence North along the
East line to the point of beginning;
AND EXCEPTING THEREFROM that portion of Lots 7 and 8 contained within the
following described property: BEGINNING at the Southeast corner of said Lot
7; thence West along the South line of said Lot 7 to the Southwest corner
thereof; thence North along the West line of said Lot 7 a distance of 23
feet to a point, thence Southeasterly along a straight line to a point 34
feet East of the West line of said Lot 7 and 17 feet North of the South
line of said Lot; thence Northeasterly along a straight line to a point on
the South line of said Lot 8 a distance of 68 feet West of the Southeast
corner thereof; thence Northeasterly along a straight line to a point on
the South line of Lot 9, in said Block 11, a distance of 15 feet West of
the Southeast corner of said Lot 9; thence Northeasterly along a straight
line to a point on the East line of said Lot 9 a distance of 13 feet North
of the Southeast corner thereof; thence South along the East line of said
Lots 9, 8 and 7 to the True Point of Beginning;
AND EXCEPT that portion of Lot 9 for street purposes described as follows:
BEGINNING at the Southeast corner of said Lot 9; thence North along the
East line, 13 feet; thence Southwesterly to a point on the South line, 15
feet West from the Southeast corner; thence East along the South line to
the point of beginning;
Situate in the City of Spokane, County of Spokane, State of Washington.
SUBJECT TO restrictions, easements and reservations of record.
2. Lease Term. The term of this Lease shall be for 3 years commencing on
January 1, 1993, and ending on December 31, 1997, with no rent payment for early
occupancy in 1992.
3. Recording. Upon the request of either party after the commencement
date, LESSOR and LESSEE shall execute, acknowledge and deliver a supplemental
agreement in a recordable form describing the premises and specifying the
commencement-termination dates.
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ARTICLE II.
1. Granting Clause. In consideration of the obligation of the LESSEE to
pay rent provided below, and in consideration of the other terms hereof, LESSOR
leases to LESSEE, and LESSEE hereby takes from the LESSOR, the Demised
Premises, TO HAVE AND TO HOLD said premises for the Lease Term specified above.
At the commencement of the term, the LESSEE shall accept the building,
improvements, and any equipment on or in the Demised Premises, in their
existing condition. No representation, statement, or warranty, express or
implied, has been made by or on behalf of the LESSOR as to such condition, or
as to the use that may be made of such property. In no event shall the LESSOR
be liable for any defect in such property or for any limitation on its use.
2. Amount of Rent.
(a) The LESSEE shall pay to the LESSOR as rental for the Demised
Premises THIRTY-SIX THOUSAND NINE HUNDRED NINETY-TWO DOLLARS ($36,992) per
month.
(b) The rent specified in this Lease shall be net to LESSOR in each
year during the Lease term. Accordingly, LESSEE shall pay all expenses and
obligations relating to the Demised Premises (except as otherwise specifically
provided herein) which may arise or become due during the Lease term, and
LESSEE shall indemnify and hold LESSOR harmless against such expenses and
obligations.
3. Time of Payment. The rental payment shall be payable on the 1st day
of each calendar month of the lease term.
4. Late Rental. In the event any rental payment or any other payment
required to be made by LESSEE to LESSOR under the terms of this Lease is not
made within fifteen (15) days of its due date, the LESSEE shall pay to the
LESSOR an additional rental and as a service charge ONE HUNDRED DOLLARS
($100.00) per month for each instance of a late rental payment or other payment
required to be made under the terms of this Lease.
ARTICLE III.
1. Holding Over. In the event LESSEE remains in possession of the
demised premises after the expiration of this Lease and without the execution
of a new lease, LESSEE shall be deemed to be occupying said premises as a
tenant from month to month at a rental equal to the rental herein provided plus
Twenty Percent (20%) of such amount and otherwise subject to all the
conditions, provisions, and obligations of this Lease.
2. Commercial Use. The Demised Premises may be used only for the
permitted use, which is sales and service in connection with the operations of
LESSEE.
3. Quiet Enjoyment. LESSOR shall furnish LESSEE with the quiet and
peaceful possession and enjoyment of said Demised Premises during the term of
this Lease, so long as the LESSEE shall comply herewith, without any manner of
hindrance from the LESSOR.
4. Laws and Ordinances. The LESSEE shall comply with any law, ordinance,
and regulation, federal, state, county, or municipal, now or hereafter in
force, applicable to the leased property, relating to use or occupancy thereof
or to the making of repairs, changes, alterations or improvements, ordinary or
extraordinary, structural or otherwise, seen or unforeseen. The LESSEE shall
comply with any and all rules and regulations applicable to the leased property
issued by the Board of Fire Underwriters, or by any other body hereinafter
constituted exercising similar functions, and by insurance companies writing
policies covering the leased property which now or hereafter may become
applicable to the leased property. The LESSEE shall pay all costs, expenses,
claims, fines, penalties, and damages that may be imposed because of the
failure of the LESSEE to comply with this paragraph, and shall indemnify the
LESSOR from all liability
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arising from each noncompliance. The LESSOR and the LESSEE shall each promptly
give notice to the other of any notice of violation received by them. Without
diminishing the obligation of the LESSEE, if the LESSEE shall at any time fail
to comply as expeditiously as reasonably feasible with any law, ordinance, rule,
or regulation concerning or affecting the leased property, or the use and
occupation thereof; and, if a stay is necessary with respect to such compliance,
and the LESSEE shall have failed to obtain such stay, the LESSOR after ten (10)
days' prior written notice to the LESSEE may so comply, and the reasonable costs
and expenses of the LESSOR in such compliance shall be paid by the LESSEE. Upon
the LESSEE's failure so to pay, any such payments made by the LESSOR, together
with the interest thereon to be computed at the rate of twelve percent (12%) per
annum from the date of payment, shall be considered as additional rent to be
added to the installment of net rental next accruing, and shall entitle the
LESSOR to enforce any of the terms herein contained that may be applicable to
such rent. The LESSEE shall have the right to contest by appropriate legal
proceedings in the name of the LESSEE or the LESSOR, or both, without costs or
expense to the LESSOR, the validity or application of any such law, ordinance,
rule or requirement and the LESSOR shall cooperate with the LESSEE and will
execute and deliver any appropriate papers which may be necessary to permit the
LESSEE to contest the validity or application thereof.
5. Environmental Regulations. LESSEE shall not create or permit any
condition on the Demised Premises that could present a threat to human health or
to the environment. LESSEE shall indemnify and hold harmless LESSOR from any
suit or claim growing out of any damages alleged to have been caused, in whole
or in part, by an unhealthful, hazardous or dangerous condition caused by,
contributed to, or aggravated by LESSEE's presence on and use of the Demised
Premises or LESSEE's violation of any laws, ordinances, regulations or
requirements pertaining to solid or other wastes, chemicals, oils and gas,
toxic, corrosive, or hazardous materials, air, water (surface or groundwater) or
noise pollution, and the storage, handling, use or disposal of any such
material. LESSEE shall bear the expense of all practices or work, preventative
or remedial, which may be required because of the condition or use of the
Demised Premises, by LESSEE or those claiming by, through or under LESSEE,
during LESSEE's period of occupancy. LESSEE expressly agrees that the
indemnification and hold harmless obligations it hereby assumes shall survive
termination of this Lease, and that statutory limitation periods on actions to
enforce these obligations shall not be deemed to commence until LESSOR discovers
any such health or environmental impairment, and LESSEE hereby knowingly and
voluntarily waives the benefits of any shorter limitation period.
6. Utility Services. The LESSOR shall not be required to provide any
service to the leased property, including but not limited to heat, water, and
power. The LESSOR shall not be liable for any failure of water supply or
electric current or of any service by any utility; for injury to person
(including death) or damage to property resulting from steam, gas, electricity,
water, rain, or snow which may flow or leak from any part of the leased
property, including the basement area, or from any pipes, appliances, or
plumbing works, from the street or subsurface, or from any other place; or for
interference with light or other easements, however caused. The LESSEE shall
contract directly in its own name with suppliers and shall pay all charges for
steam, gas, electricity, water, light, heat, power, refuse, and other services
used in or about or supplied to the leased property, and shall indemnify the
LESSOR against any liability on such account.
7. Taxes and License Fees on Building Activity. LESSEE shall pay all
occupational, business, personal property, or other taxes or license fees or
charges against the business conducted in said premises and against any property
or persons maintained in connection therewith, and will not permit any lien to
be filed against the real estate because or on account of any such fee, license,
tax or other charge.
8. Building Employees and Janitorial Services. LESSEE shall employ and
pay all personnel required in the building operations including but not limited
to maintenance, janitor and watchmen. LESSEE shall furnish its own janitor and
shall keep said Demised Premises in a neat, clean and orderly condition.
9. Personal Property. All personal property in and upon the said premises
shall be at the sole risk of the LESSEE and the LESSOR shall not be liable for
any damage to said property sustained by the
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LESSEE or any other person, unless such accident shall have been occasioned by
the negligence of the LESSOR or their agents or employees.
ARTICLE IV.
1. Liability Insurance. LESSEE shall procure and maintain throughout the
term of this Lease a policy or policies of insurance, at its sole cost and
expense, insuring LESSEE as a named insured and LESSOR as an additional named
insured against all claims, demands or actions arising out of or in connection
with LESSEE's use or occupancy of the Demised Premises, or by the condition of
the Demised Premises, the limits of such policy or policies to be in an amount
not less than $5,000,000 combined single limit for bodily injury, including
personal injury, and property damage, and to be written by insurance companies
licensed to do business in the State of Washington. LESSEE shall obtain a
written obligation on the part of each insurance company to notify LESSOR at
least thirty (30) days prior to cancellation or modification of such insurance.
Such policies or duly executed certificates of insurance shall be promptly
delivered to LESSOR. Renewals thereof as required shall be delivered to LESSOR
at least thirty (30) days prior to the expiration of the respective policy
terms.
2. Fire and Extended Coverage. LESSEE shall obtain and keep in force
during the term of this Lease a fire and all other perils insurance policy,
insuring the Demised Premises against destruction by fire or otherwise to the
full replacement value thereof with loss payable made first to the LESSOR to
the extent of its interest in the real property and building of the Demised
Premises. In addition, from time to time, the LESSOR and LESSEE shall review
the replacement value and upon LESSOR's request, the coverage shall be
increased to cover any increase in replacement costs. Provided, however, that
such increase shall not take place more than once for each Lease year.
3. Acts of Invalidation. LESSEE shall not, without LESSOR's prior written
consent, keep or do anything within the Demised Premised for any purpose which
invalidates any insurance policy carried on the Demised Premises.
4. Lessor's Negligence. LESSOR shall not be liable to LESSEE or to LESSEE's
employees, agents or visitors, or to any other person whomsoever, for any injury
to person or damage to or loss of property on or about the Demised Premises
caused by the act, negligence or misconduct of LESSEE, its employees,
subtenants, or licensees, or of any other person entering the Demised Premises
under express or implied invitation of LESSEE, or arising out of the use of the
premises by LESSEE and the conduct of its business therein, or arising out of
any breach or default by LESSEE in the performance of its obligations hereunder;
and LESSEE hereby agrees to indemnify LESSOR and hold them harmless from any
loss, expense or claims arising out of such damage or injury. LESSEE shall pay,
as additional rental hereunder, on demand, all expenses incurred by LESSOR,
including costs and attorneys' fees, with respect to any litigation or
proceeding commenced or maintained as a result of LESSEE's activities on or in
connection with the Demised Premises, provided LESSOR is not determined to be at
fault in such litigation or proceeding.
5. Losses Covered by Insurance. LESSOR and LESSEE agree and covenant that
neither shall be liable to the other for loss arising out of damage to or
destruction of the Demised Premises or contents thereof when such loss is caused
by any perils included within the State of Washington fire and all other perils
insurance policy. This Agreement shall be binding whether or not such damage or
destruction be caused by negligence of either party, or their agents, employees
or visitors.
6. Liability for Damage. LESSOR and LESSOR's agents and employees shall
not be liable to LESSEE for any injury to person or damage to property caused
by the Demised Premises or other portions of the building becoming out of
repair or by defect in or failure of equipment, pipes or wiring, or broken
glass, or by the backing up of drains, or by gas, water, steam, electricity, or
oil leaking, escaping or flowing into the Demised Premises, nor shall LESSOR be
liable to LESSEE for any loss or damage that may be occasioned by or through
the acts or omissions of other tenants of the building or of any other persons
whomsoever, excepting only duly authorized employees and agents of LESSOR.
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7. Notice of Damage. LESSEE shall give immediate written notice to
LESSOR of any damage caused to the Demised Premises by fire or other casualty.
In the event that the Demised Premises shall be damaged or destroyed by fire or
other peril covered under the insurance herein required to be carried by LESSEE
and LESSOR does not elect to terminate this Lease as hereinafter provided,
LESSOR shall proceed with reasonable diligence at their sole cost and expense
to rebuild and repair the Demised Premises. If the building in which the
Demised Premises are located shall be destroyed or rendered untenantable to an
extent in excess of fifty percent (50%) of the area of the Demised Premises
then leased to LESSEE by a peril covered by LESSEE's insurance, then LESSOR may
elect either to terminate this Lease or to proceed to rebuild and repair the
Demised Premises. LESSOR shall give written notice to LESSEE of such election
within sixty (60) days after the occurrence of such casualty and if LESSOR
elects to rebuild and repair, shall proceed to do so with reasonable diligence
and at their sole cost and expense.
8. Rebuilding and Repair. LESSOR's obligation to rebuild and repair
under this Article shall in any event be limited to restoring the Demised
Premises to substantially the condition in which the same existed prior to the
casualty, and shall be further limited to the extent of the net insurance
proceeds available to LESSOR for such restoration, and LESSEE agrees that
promptly after completion of such work by LESSOR, it will proceed with
reasonable diligence and at its sole cost and expense to rebuild, repair and
restore its signs, fixtures, equipment and other items.
9. Operation During Repair. LESSEE agrees during any period of
reconstruction or repairs of the Demised Premises it will continue to operate
its business within the Demised Premises to the extent practicable. The LESSOR
agrees that the LESSEE may obtain business interruption insurance at its own
cost and expense to protect against loss by reason of business interruption.
The monthly rental shall not be abated. The payment of taxes and insurance
premiums shall not be abated.
ARTICLE V.
1. Eminent Domain Greater Than 20% Taken. If more than twenty percent
(20%) of the floor area of the Demised Premises should be taken for any public
or quasi-public use under any governmental law, ordinance or regulation or by
right of eminent domain or by private purchase in lieu thereof, this Lease
shall terminate, and the rent shall be abated during the unexpired portion of
this Lease, effective on the date physical possession is taken by the
condemning authority.
2. Eminent Domain Less Than 20% Taken. If less than twenty percent (20%)
of the floor area of the Demised Premises should be taken as aforesaid, this
Lease shall not terminate. Following such partial taking, LESSOR shall make all
necessary repairs or alterations to make the Demised Premises an architectural
whole; provided, however, that LESSOR's obligation to repair and rebuild under
this Article V shall in any event be limited to the extent of the net
condemnation award available to LESSOR for such purposes.
3. Assignment of Compensation. All compensation awarded for any taking
(or the proceeds of private sale in lieu thereof) of the Demised Premises shall
be the property of LESSOR, and LESSEE hereby assigns its interest in any such
award to LESSOR; provided, however, LESSOR shall have no interest in any award
made to LESSEE for loss of business or for the taking of LESSEE's fixtures and
other property if a separate award for such items is made to LESSEE.
ARTICLE VI.
Option to Renew. The LESSEE, but not any sub-lessee or assignee of the
LESSEE, shall have the right to extend this Lease for an additional five (5)
year period on the same terms and conditions as this original Lease, at a
mutually-acceptable monthly rental.
In no event, however, shall the minimum rental be less than THIRTY-SIX
THOUSAND NINE HUNDRED NINETY-TWO DOLLARS ($36,992) per month.
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ARTICLE VII.
1. Future Remodeling. In the event the LESSEE wishes to remodel in the
future, all such remodeling shall be the responsibility of the LESSEE. If the
LESSEE shall remodel or make leasehold improvements to the premises, such
remodeling or leasehold improvements shall not be done without first securing
the consent of the LESSOR, which consent shall not be unreasonably withheld.
No work on the building, repairing, altering or improving the Demised Premises
by the LESSEE shall in any way constitute or be made a lien upon the Demised
Premises. Such right of lien shall not exist, and this Lease and the recording
of this Lease or any summary of this Lease is intended as a notice to any and
all persons doing work or labor thereon or furnishing materials thereto, that
they or none of them shall have the right to a lien of any kind whatsoever upon
the Demised Premises.
2. Ownership of Improvements. All alternations, decorations, additions,
and improvements, except movable trade fixtures, shall become the property of
the LESSOR upon termination of this Lease.
3. Consent of Lessor Required. If written consent of the LESSOR to any
proposed alterations by the LESSEE shall have been obtained, the LESSEE agrees
to advise LESSOR in writing of the date upon which such alterations will
commence in order to permit the LESSOR, if they so desire, to post notice of
nonresponsibility.
4. Governmental Approval. Before the commencement of such work such plans
and specifications shall be filed with and approved by all governmental
departments or authorities having jurisdiction, and any public utility company
having an interest therein, and all such work shall be done subject to and in
accordance with the requirements of law and local regulations of all
governmental departments or authorities having jurisdiction and of each public
utility company.
5. Insurance Premium Increases. Before the commencement of any remodeling
work the LESSEE shall pay the amount of any increase in premiums on insurance
policies provided for hereunder on account of endorsements to be made thereon
covering the risk during the course of such work.
6. Waiver of Lien Required. Any contract or agreement for labor, services,
materials, or supplies in connection with any alteration, rebuilding,
replacement, change, addition, or improvement, shall provide that no lien or
claim shall thereby be created, or arise, or be filed by anyone thereunder upon
or against the leased property, or the buildings or improvements thereon, or to
be erected on the leased property or any of the equipment thereof. Before the
commencement of any such work, the LESSEE shall deliver to the LESSOR either a
duplicate original of such contract or a written waiver by the architect,
engineer, contractor, materialman, mechanic, person, or corporation named in
such contract of all right of lien which he or it might otherwise have upon or
against the leased property, or the buildings or improvements to be altered,
repaired, improved, or constructed, or the interest of the LESSOR therein.
ARTICLE VIII.
Repairs. LESSEE shall be responsible for the maintenance of the
foundation. LESSEE shall keep the Demised Premises, including the parking lot,
all the interior and exterior walls, paint, and signs in good, clean condition
and shall at its sole cost and expense make all needed repairs and
replacements, including the roof and replacement of cracked or broken glass and
window casings and of the pavement, any fences and all other portions of the
Demised Premises. If any repairs required to be made by LESSEE hereunder are
not made within thirty (30) days after written notice delivered to LESSEE by
LESSOR, except repairs of an emergency nature which shall be promptly made,
LESSOR may at their option make such repairs without liability to LESSEE for
any loss or damage which may result to its business by reason of such repairs,
and LESSEE shall pay to LESSOR upon demand as additional rental hereunder the
cost of such repairs. In the event of termination of this Lease, LESSEE shall
surrender the Demised Premises in good condition, reasonable wear and tear and
loss by fire or other casualty excepted and shall surrender all keys
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for the Demised Premises to LESSOR and shall inform LESSOR of all combinations,
locks, safes and vaults, if any, to the Demised Premises.
ARTICLE IX.
Access. LESSOR shall have the right to enter upon the Demised Premises at
any reasonable time for the purpose of inspecting the same.
ARTICLE X.
Assignment and Subletting. LESSEE shall not assign or in any manner
transfer this Lease or any estate of interest therein, or sublet the Demised
Premises or any part thereof, or grant any license, concession or other right
of occupancy of any portion of the Demised Premises without the prior written
consent of LESSOR. Consent by LESSOR shall not be unreasonably withheld and no
assignment or subletting shall operate as a waiver of LESSOR's rights of
consent as to any subsequent assignments and subletting. Notwithstanding any
assignment or subletting, LESSEE shall at all times remain fully responsible
and liable for the payment of rent herein specified and for compliance with all
of its other obligations under this Lease. For the purposes of this Lease, the
sale, conveyance, lease, assignment, transfer, pledge, encumbrance or other
transaction which changes, or might result in a change in the individual's
ownership of stock in any corporate LESSEE, shall be deemed an assignment
within the meaning of this Lease. Any merger, dissolution, reorganization, or
other corporate change modifying the control of a corporate LESSEE shall be
deemed an "assignment" which cannot be accomplished without the prior written
consent of LESSOR, which shall not be unreasonably withheld.
ARTICLE XI.
1. Property Taxes. The LESSEE agrees to pay directly on their due dates
as additional rental the amount of all property taxes assessed and levied
against the Demised Premises and both the principal and interest portions of
any and all assessments levied by any local improvement districts on the
premises including all property taxes levied by the City of Spokane, County of
Spokane or the State of Washington, which taxes shall be prorated for the first
and last month of the Lease term including any extensions thereto.
2. Future Taxes on Rentals. Should there presently be in effect or
should there be enacted during the term of this Lease, or any extension
thereof, any law, statute or ordinance levying any tax (other than Federal or
State income taxes) upon rents or the income from real estate or rental
property, or increasing any such tax, LESSEE shall reimburse LESSOR at the
same time as rental payments are due hereunder, for the actual amount of all
such taxes paid, as additional consideration for the execution of this Lease,
provided, however, LESSEE may contest in good faith any such tax and providing
further LESSEE indemnifies LESSOR for any taxes and costs, including reasonable
attorney's fees relating such contest.
ARTICLE XII.
1. Events of Default. The following events shall be deemed to be events
of default by LESSEE under this Lease:
(a) Failure to Pay Rent. LESSEE shall fail to pay any installment of
rent or additional rent hereunder and such failure shall continue for a period
of fifteen (15) days.
(b) Failure to Comply With Terms of Lease. LESSEE shall fail to
comply with any term, provisions or covenants of this Lease, other than the
payment of rent, and shall not cure such failure within twenty (20) days after
written notice thereof by LESSOR.
(c) Insolvency of Lessee. LESSEE shall become insolvent, or shall
make a transfer in fraud of creditors, or shall make an assignment for the
benefit of creditors.
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(d) Bankruptcy of Lessee. LESSEE shall file a petition under any
section or chapter of the National Bankruptcy Act, as amended, or under any
similar law or statute of the United States or any state thereof, or LESSEE
shall be adjudged bankrupt or insolvent in proceedings filed against LESSEE.
(e) Appointment of Receiver. A Receiver or Trustee shall be
appointed for the Demised Premises or for all or substantially all of the
assets of LESSEE.
(f) Abandonment. LESSEE shall desert or vacate the Demised Premises.
(g) Creation of Lien. LESSEE shall do or permit to be done anything
which creates a lien upon the Demised Premises.
2. Remedies for Default. Upon the occurrence of any such events of
default, LESSOR shall have the option to pursue any one or more of the
following remedies:
(a) Termination of Lease and Surrender. Terminate this Lease in which
event LESSEE shall immediately surrender the Demised Premises to LESSOR, and if
LESSEE fails to do so, LESSOR may, without prejudice to any other remedy which
they may have for the possession or arrearage in rent, enter upon and take
possession of the Demised Premises and expel or remove LESSEE and any other
person who may be occupying said premises or any part thereof, without being
liable for prosecution for any claim or damages therefor; and LESSEE agrees to
pay to LESSOR on demand the amount of all loss and damage which LESSOR may
suffer by reason of such termination, whether through inability to relet the
Demised Premises on satisfactory terms or otherwise.
(b) Retaking Possession and Reletting Without Termination of Lease.
Enter upon and take possession of the Demised Premises and expel and remove
LESSEE and any other person who may be occupying said premises or any part
thereof, without being liable for prosecution or any claims for damages
therefor, and, if LESSOR so elects relet the premises on such terms as LESSOR
may deem advisable and receive the rent therefor; and LESSEE agrees to pay to
LESSOR on demand any deficiency that may arise by reason of such reletting.
3. Attorney's Fees. If on account of any breach of default by LESSEE in
its obligations hereunder, LESSOR shall employ an attorney to enforce or defend
any of LESSOR's rights or remedies hereunder, LESSEE agrees to pay any
reasonable attorney's fees and all court costs incurred by LESSOR in such
connection.
ARTICLE XIII.
Notices to Lessee and Lessor. Wherever any notice is required or permitted
hereunder such notice shall be in writing. Any notice or document required or
permitted to be delivered hereunder shall be deemed to be delivered whether or
not actually received, when deposited in the United States mail, postage
prepaid, certified or registered mail, return receipt requested, addressed to
the LESSEE or the LESSOR at the addresses set forth below or at such other
addresses as they may have hereafter specified by written notice.
To Lessor: XXXXXXXXX & SAMPLE INVESTMENTS
00000 Xxxxx Xxxxxxx Xxxx Xxxxx
Xxxx, Xxxxxxxxxx 00000
To Lessee: International Ambassador Programs, Inc.
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
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ARTICLE XIV.
1. Legal Relationship of Lessor and Lessee. Nothing herein contained
shall be deemed or construed by the parties hereto, nor by any third party, as
creating the relationship of principal and agent or of partnership or of joint
venture between parties hereto, it being understood and agreed that neither the
method of computation of rent, nor any other provisions contained herein, nor
any acts of the parties hereto, shall be deemed to create any relationship
between the parties hereto other than the relationship of LESSOR and LESSEE.
2. Captions and Construction of Language. The captions used herein are
for convenience only and do not limit or amplify the provisions hereof.
Whenever herein the singular number is used, the same shall include the plural,
and words of any gender shall include each other gender.
3. Waiver of Covenants. One or more waivers of any covenant, term or
condition of this Lease by either party shall not be construed as a waiver of a
subsequent breach of the same covenant, term or condition. The consent or
approval by either party to or of any act by the other party requiring such
consent or approval shall not be deemed to waiver or render unnecessary consent
to or approval of any subsequent similar act.
4. Computation of Time. Whenever a period of time is herein prescribed
for action to be taken by LESSOR, LESSOR shall not be liable or responsible
for, and there shall be excluded from the computation of any such period of
time, any delays due to strikes, riots, acts of God, shortage of labor or
materials, war, governmental laws, regulations or restrictions or any other
causes of any kind whatsoever which are beyond the reasonable control of LESSOR.
5. Entire Agreement. This Lease contains the entire agreement between
the parties, and no agreement shall be effective to change, modify or terminate
this Lease in whole or in part unless such agreement is in writing and duly
signed by the party against whom enforcement of such change, modification or
termination is sought.
6. Applicable Laws. The laws of the State of Washington shall govern the
interpretation, validity, performance and enforcement of this Lease. If any
provision of this Lease shall be held to be invalid or unenforceable, the
validity and enforceability of the remaining provisions of this Lease shall not
be affected thereby.
7. Binding Effect. The terms, provisions and covenants contained in this
Lease shall apply to, inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors in interest and legal
representatives except as otherwise herein expressly provided.
EXECUTED by the parties this 21 day of December, 1992.
XXXXXXXXX & SAMPLE INVESTMENTS INTERNATIONAL AMBASSADOR PROGRAMS, INC.
By: /s/ XXX X. SAMPLE By: /s/ XXXX X. XXXXXX
--------------------------------- -------------------------------
Xxx X. Sample, Managing Partner Xxxx X. Xxxxxx, President
By: /s/ XXXXXXXX X. XXXXXXXXX Attest: /s/ XXXXX X. XXXXXX
--------------------------------- -------------------------------
Xxxxxxxx X. Xxxxxxxxx, Partner Xxxxx Xxxxxx, Secretary
Lessor Lessee
-9-
STATE OF WASHINGTON )
)
County of Spokane )
On this day personally appeared before me, XXX X. SAMPLE and XXXXXXXX X.
XXXXXXXXX, to me known to be the Partners of XXXXXXXXX & SAMPLE INVESTMENTS,
the partnership that executed the foregoing instrument and acknowledged the
said instrument to be the free and voluntary act and deed of said partnership
for the uses and purposes therein mentioned and on oath stated that they are
authorized to execute the said instrument.
Given under my hand and official seal this 21 day of December, 1992.
[SEAL] /s/ XXXXX X. XXXXXXXX
-----------------------------------
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane
My appointment expires: 8/28/95
STATE OF WASHINGTON )
)
County of Spokane )
On this day personally appeared before me, XXXX X. XXXXXX and XXXXX
XXXXXX, to me known to be the President and Secretary, respectively, of
INTERNATIONAL AMBASSADOR PROGRAMS, INC., the corporation that executed the
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 they are authorized to execute the said
instrument.
Given under my hand and official seal this 21 day of December, 1992.
[SEAL] /s/ XXXXX X. XXXXXXXX
-----------------------------------
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane
My appointment expires: 8/28/95
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