Exhibit 10.13
LEASE AND ADDENDA FOR BUILDING #7
AND
FIVE ACRES OF LAND
(PRECAST PLANT AND STORAGE YARD)
LEASE
CROWN WEST REALTY, L.L.C.
Lessor
CXT INCORPORATED
Lessee
Dated: December 20, 1996
Page No.
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13.2 Pre-approved Additions 6
13.2.1 Batch Plant 6
13.2.2 Rail Line 6
13.2.3 Additional Cranes 6
13.2.4 Hot Oil Heat Exchangers 6
13.2.5 Exterior 33-Ton Crane 6
14. Repairs or Services by Lessor 7
14.1 Building Repair 7
14.2 Services 7
15. Repairs by Lessee 7
16. Surrender on Termination 7
17. Mechanic's Liens 8
18. Signs, Lights and Sounds 8
19. Displays of Merchandise 8
20. Streets, Parking Areas and Rules 8
21. Access 9
22. Utilities 9
23. All Charges Deemed Rent 9
24. Indemnification and Insurance 9
24.1 In General 9
24.1.1 Acts or Omissions 9
24.1.2 Accidents 10
24.1.3 Breach of Lease 10
24.1.4 Lessor's Performance 10
24.1.5 Hazardous Substances 10
24.2 Lessee Liability Insurance 10
24.3 Notice of Claim 11
24.4 Waiver by Lessee 11
25. Insurance and Waiver of Subrogation 11
26. Damage/Rebuilding 12
27. Condemnation 12
28. Taxes, Assessments and Insurance Premiums 13
28.1 Reimbursement 13
28.2 Lessee's Tax 13
29. Non-waiver of Breach 14
30. Default 14
31. Litigation Costs/Venue 14
32. Removal of Personal Property by Lessee 14
33. Removal of Property by Lessor 15
34. Loading Platforms 15
35. Insolvency 15
36. Assignments and Subletting 15
36.1 Consent Required 15
36.2 Change in Lessee Ownership 15
36.3 Request for Consent 15
36.4 Reimbursement of Costs 16
36.5 Withholding Consent 16
36.6 Conditions of Consent 16
36.7 Increased Rent Shared 16
36.8 Submit Documents 16
36.9 Assignee Bound 16
36.10 Lessee Remains Obligated 16
36.11 Additional Notice 16
36.12 Joint Liability 17
36.13 Default 17
37. Statements by Lessee 17
38. Subordination 17
39. Short Form Lease 17
LEASE
This Lease made and entered into this 20th day of December, 1996, between CROWN
WEST REALTY, L.L.C. hereinafter referred to as "Lessor", and CXT INCORPORATED, a
Delaware corporation, hereinafter referred to as "Lessee",
WITNESSETH:
It is agreed by and between Lessor and Lessee as follows:
1. Description of Premises. Lessor hereby leases to Lessee and Lessee hereby
leases from Lessor those certain premises, hereinafter referred to as
"Premises", situated in Spokane County, State of Washington, described as:
Building #7 comprising approximately 120,000 square feet and approximately rive
acres of land to be used for storage immediately east of Building #7, across 5th
Street, (See Exhibit B attached) located at 3808 N. Sullivan Road being part of
an organized industrial district commonly referred to as the "Spokane Business &
Industrial Park," hereinafter referred to as the "Park" as shown on the attached
Exhibit A and more particularly described as follows:
The South Half of Section 1, and that portion of Section 12 lying North of the
Northerly right of way line of the Spokane International Railroad, Township 25
North, Range 44 East of the Willamette Meridian, County of Spokane, State of
Washington.
The Lessee may use the five acres to store material. All materials shall be
stored in a neat and secure manner. Except for those improvements which the
Lessor specifically agrees to provide, as set forth in this Lease, the Lessee
shall be responsible for the installation, construction and maintenance of all
improvements to the Premises.
Lessee shall have the right to cross 5th Street between the said five-acre
parcel and Building 7 without going to an intersection, provided that
north-south traffic on 5th Street has the right of way and Lessee's vehicles
thus crossing 5th Street shall not unreasonably impede north-south traffic on
5th Street.
2. Term. The term of this Lease shall be 76 months, commencing on the 1st day of
December, 1996 and ending on the 31st day of March, 2003.
3. Rent. The monthly base rent which includes base year taxes, assessments,
insurance and common area costs, except as provided in paragraph 28, shall be as
follows:
December 1, 1996 through March 31, 1997 $ 0.00
April 1, 1997 through October 31, 1997 $15,600.00
November 1, 1997 through September 30, 1998 $16,800.00
October 1, 1998 through September 30, 1999 $20,400.00
October 1, 1999 through September 30, 2000 $20,400.00
October 1, 2000 through September 30, 2001 $21,600.00
October 1, 2001 through September 30, 2002 $21,600.00
October 1, 2002 through March 31, 2003 $24,000.00
Said rental for each month shall be paid to Lessor monthly in advance on or
before the first business day of the month for which said rent is due at the
office of Lessor at the Park.
A late charge of 1%% of the delinquent amount will be added to all amounts of
base rent and additional due that are not received by the tenth of the month in
which they are due.
4. Option To Extend. Lessee is hereby granted options to extend this Lease for
two additional five-year terms upon all of the terms and conditions, except
rent, as provided in this Lease, modified only as necessary to conform to
applicable laws and regulations; provided that the Lessee is, both at the time
of exercising an option to extend and at the time of commencement of the
extended term, not in material default under the then-current lease. In order to
exercise an option to extend, the Lessee must give written notice to the Lessor
not less than 150 days prior to the expiration of the then-current lease term.
The base rent during the option terms, if exercised, shall be as follows:
April 1, 2003 through March 31, 2004 $31,200.00
April 1, 2004 through March 31, 2005 $32,292.00
April 1, 2005 through March 31, 2006 $33,422.00
April 1, 2006 through March 31, 2007 $34,592.00
April 1, 2007 through March 31, 2008 $35,803.00
April 1, 2008 through March 31, 2009 $37,056.00
April 1, 2009 through March 31, 2010 $38,353.00
April 1, 2010 through March 31, 2011 $39,695.00
April 1, 2011 through March 31, 2012 $41,084.00
April 1, 2012 through March 31, 2013 $42,522.00
5. Options To Terminate.
5.1 This Lease. Lessee is hereby granted the one-time option to terminate
this Lease effective on February 28, 1999, by giving Lessor not less than 150
days' prior written notice. If said option to terminate is exercised, Lessee
shall pay Lessor $32,500.00, representing reimbursement to Lessor of $15,000.00,
being 50% of the amount that the Lessor has agreed to pay toward the cost of
repairing cranes; plus $17,500.00, being approximately 50% of the cost incurred
by Lessor in complying with paragraph 10.7.
5.2 S-20 Lease. Lessee is currently leasing Building #S-20, on Lot 18, BSP
88-21 from Lessor pursuant to a Lease dated November 1, 1991. Provided that
Lessee does not exercise its option to terminate this Lease as provided in
paragraph 5. 1, Lessee is hereby granted the option to terminate the said Lease
of Building #S-20 effective on either December 31, 1998, or December 31, 1999,
by giving written notice to Lessor not less than 150 days prior to the
termination date, which shall be stated in the notice, and by paying Lessor the
sum of $4,800.00 per month on the first business day of each month, commencing
in the month of January immediately following the termination date and
continuing through March, 2003. Late charges would apply if not paid on time,
the same as with rent.*
*Should Lessee exercise its option to terminate its lease for Building #S-20
under this paragraph #5.2, then Lessee's option to terminate this lease for
Building #7 under paragraph #5.1 shall expire and become null and void.
6. Possession/Peaceful Enjoyment. Lessee shall be entitled to possession of the
Premises on December, 1, 1996, it being recognized that the prior tenant of
Building #7 is in the process of moving out so that the Lessee will not have
full use of the Premises until the prior tenant finishes moving out. Except as
provided above, the Lessee shall have peaceful and quiet enjoyment throughout
the term of this Lease and any exercised option terms, all subject to the Lessee
performing its obligations under this Lease.
7. Holding Over. If the Lessee shall, with the written consent of Lessor, hold
over after the expiration of the term of this Lease, or any exercised option
term, such tenancy shall be on a month-to-month basis, and may be terminated as
provided by the laws of the State of Washington. During such tenancy, Lessee
agrees to pay to the Lessor the rental rate set forth in the written consent,
and to be bound by all the terms, covenants and conditions of the lease then in
effect. If the Lessee holds over without the written permission of the Lessor,
Lessee shall be tenant at sufferance and shall pay base rent on a daily basis at
a rate per day equal to 5% of the monthly rent then in effect.
8. Lease Deposit. Waived.
9. Business Purposes. The Premises are to be used for the purpose of conducting
therein and thereon the following business: The manufacture of concrete
products, steel fabrication, equipment repair and other related manufacturing
activities, and the storage of related materials and products, and for none
other without the prior written consent of Lessor. Lessee shall promptly notify
Lessor of any proposed change in use of the Premises, but in no event later than
14 days prior to said proposed change. Lessor's consent to any proposed change
shall not to be unreasonably withheld or delayed.
10. Acceptance of Premises.
10.1 As Is. Except as otherwise specifically provided in this Lease,
Lessee, having made a careful and complete inspection of the Premises, accepts
said Premises strictly "AS IS" in their present condition and without any
representations or warranties, express or implied, as to their condition or
suitability for Lessee's intended use.
10.2 Existing Cranes. There are presently three ten-ton cranes installed in
Building #7 which the parties recognize are in need of repair. The Lessee will,
within a reasonable time, perform all repairs necessary to put the cranes in
good working order and in compliance with applicable laws and regulations. The
Lessor will reimburse the Lessee for the cost of such repairs to the extent of
$30,000.00. Thereafter the Lessee shall maintain said cranes in good working
order throughout the term of this Lease and any extensions or renewals thereof.
10.3 Office HVAC. The Lessor represents that the HVAC system for the office
area is in normal operating condition. The Lessor will perform any repairs
necessary to put the office HVAC system in normal operating condition, provided
that the need for repair is called to the Lessor's attention by written notice
given not later than December 13, 1996. Thereafter the Lessee shall maintain
said HVAC system in good working order throughout the term of this Lease and any
extensions or renewals thereof. Lessor shall provide Lessee with a report from a
licensed HVAC contractor certifying that both the heating and air conditioning
aspects of the HVAC system are in good operating condition at the commencement
of this Lease.
10.4 New Doors. The Lessor will, within a reasonable time, and in no event
later than January 31, 1997, install four additional electrically
operated truck access doors as shown on Exhibit C attached. Upon completion of
the installation of all four doors, the Lessee will reimburse the Lessor for the
cost thereof to the extent of $10,500.00.
10.5 Existing Doors. All existing overhead doors, man doors and windows
shall be in good operating condition as of the commencement of this Lease. The
Lessor will perform any repairs necessary to make such doors and windows in
operating condition, provided that the need for repair is called to the Lessor's
attention by written notice given not later than December 13, 1996. Thereafter
the Lessee shall maintain said doors and windows in good working order
throughout the term of this Lease and any extensions or renewals thereof.
10.6 Overhead Power Line. The Lessor will, upon the written request of the
Lessee given at any time during the first year of this Lease, and at the
Lessee's cost, relocate the existing overhead power line at the east end of the
building so as to provide reasonable 'clearance for the Lessee's equipment
moving in and out of Building #7.
10.7 Gravel. The Lessor will grade the five-acre parcel which is part of
the Premises and will remove topsoil, black dirt and organic matter in order to
establish a firm mineral soil base and will install three inches of7/s " or
11/4" minus crushed gravel, all within a reasonable time, and as weather
permits.
10.8 Paving. The Lessor will, within a reasonable time, and not later than
June 30, 1997, asphalt pave the area between the east end of Building #7 and 5th
Street.
10.9 5th Street Gate. The Lessor will, within a reasonable time, and not
later than February 28, 1997, install a gate for access to the Park from 5th
Street. The gate will be locked other than during general business hours. The
gate will be controlled by an access card system or similar device. A reasonable
number of access cards or similar access devices will be checked out to the
Lessee so that the Lessee will have access to Building #7 from 5th Street at all
times.
10.10 Interior Rail Line. Lessor will, upon receipt of such funds from the
prior tenant, reimburse Lessee to the extent of $5,000.00 of the Lessee's cost
of reinstalling interior continuous rail line in accordance with plans approved
by Lessor, such approval not to be unreasonably withheld or delayed.
11. Compliance with Laws. Lessee shall, at all times, and at its sole expense,
keep and use the Premises in accordance with applicable laws and ordinances and
in accordance with applicable directions, rules and regulations of public bodies
or entities. Lessee shall not overload the floors, cranes or other parts of the
Premises, and shall permit no waste of, or damage or injury to, the Premises,
and will not permit the Premises to be used in any way which is unlawful,
offensive or dangerous, or which may be, or become, a nuisance, or in any manner
which is, by reason of the emission of dust, odor, gas, fumes, smoke, or noise,
noxious or offensive to a person of normal sensibilities occupying space in an
industrial park or in a manner that significantly increases the risk of fire.
The Lessee's use of concrete vibrators in the ordinary course of its business
shall not constitute a violation of this paragraph.
12. General Obligations of Lessee. Lessee shall, at all times, keep the
Premises, loading platforms, parking area, and service areas adjacent to the
Premises clean and free from snow, ice, ash, rubbish, dirt, and unlawful
structures and shall store all products, materials (hazardous or otherwise),
dangerous substances, trash and garbage securely within the Premises. Lessee
shall arrange for weekly (or more often if needed) pick-up of such trash and
garbage as may be generated by Lessee, all at the Lessee's expense. Lessee may
install a waste dump area on the south side of Building #7 in accordance with
plans approved by Lessor, such approval not to be unreasonably withheld or
delayed. Should Lessee fail to remove trash, garbage, refuse or materials from
any location outside of the Premises within three days after written notice from
Lessor, Lessor, at its option, may remove such items at Lessee's expense. Lessee
agrees to hold Lessor harmless from any loss or damage resulting from Lessor's
removal of any such items. Lessee shall permit no animals to be kept on the
Premises.
13. Alterations.
13.1 Consent Required. Lessee shall not, without the prior written consent
of Lessor, make any alterations, additions, or improvements in or to said
Premises, which consent shall not be unreasonably withheld or delayed. Lessor's
consent may be conditioned on an agreement (a) that the same will be removed by
the Lessee at the termination of this Lease, or (b) that the same will be
maintained in good repair by the Lessee and left on the Premises at the
termination of this Lease. Lessee shall make no perforations in the building
shell without prior review and approval of a duly licensed structural engineer
and the prior written approval of the Lessor. Trade fixtures, appliances and
equipment shall not be deemed alterations, additions or improvements unless the
removal of the same would do material damage to the Premises. Unless
specifically agreed to by Lessor in writing, Lessee shall not be compensated in
any manner for an alteration, addition, or improvement to the Premises. Should
Lessee fail to request written consent from Lessor at least 14 days prior to
initiation of alterations, additions, or improvements, Lessee shall, at Lessor's
option, be obligated to pay all costs incurred by Lessor associated with
performing a due diligence evaluation of Lessee's proposal, including without
limitation the cost of Lessor's employees and the costs of legal, engineering
and architectural services.
13.2 Pre-approved Additions. The following alterations, additions and
improvements are hereby approved by the Lessor, all to be performed at the sole
cost and expense of the Lessee and in accordance with plans approved by the
Lessor prior to the commencement of the work, approval not to be unreasonably
withheld:
13.2.1 Batch Plant. Lessee may erect a concrete batch plant and wash
down sump on the west or south side of Building #7 in accordance with plans
approved by Lessor, such approval not to be unreasonably withheld or delayed.
Lessee's plans shall include, but not be limited to, the precise area to be
occupied, the design of the structure and final paint color. All construction
shall be subject to environmental approvals, governmental approvals and building
permits. On the termination of this Lease the Lessee may, and will, if so
requested by Lessor, remove the batch plant and restore the area, including
parking, to its prior condition. Lessee shall give notice to Lessor at least 30
days prior to the termination of this Lease as to whether or not it elects to
remove the batch plant. Within 30 days after receipt of
such notice or, if no notice is given, then within 30 days after the termination
of this Lease, Lessor may notify Lessee that Lessee is required to remove the
said batch plant
13.2.2 Rail Line. Lessor will make available to Lessee, at no cost,
all rail and switch material currently in its possession, which is not presently
being used or specifically planned for future use, for the purpose of
constructing approximately 1,000 feet of rail line in Building #7 and on the
five-acre parcel. The installation will be in accordance with plans approved in
writing by the Lessor prior to the commencement of the work, approval not to be
unreasonably withheld or delayed. The rail line, as thus installed, will be left
in place on termination of this Lease.
13.2.3 Additional Cranes. Lessee may install additional cranes in the
two, 39-foot span wing bays. Lessee will provide all steel supports, duct bar
and the cranes themselves. All such installation will be in accordance with
plans approved by the Lessor prior to the commencement of the work, approval not
to be unreasonably withheld or delayed. Lessee may, and will, if so requested,
in the same manner as provided in paragraph 13.2. 1, remove all such
installations and restore the Premises to its prior condition.
13.2.4 Hot Oil Heat Exchangers. Lessee may install a Hot Oil
Exchanger(s) inside the building, subject to all state, local and environmental
inspections and approvals, and approval of plans by Lessor prior to the
commencement of the work, approval not to be unreasonably withheld. Lessee may,
and will, if so requested, in the same manner as provided in paragraph 13.2. 1,
remove all such installations and restore the Premises to its prior condition.
13.2.5 Exterior 33-Ton Crane. Lessee may install a 33-ton overhead
bridge crane with supporting steel structure at the east end of Building #7
utilizing the existing concrete pillars. Lessee may, and will, if so requested
by Lessor, in the same manner as provided in paragraph 13.2.1, remove the same
and the concrete pillars, at the termination of this Lease.
14. Repairs or Services by Lessor.
14.1 Building Repair. Lessor shall, throughout the terms of this Lease and
any exercised renewal term, keep in good order, condition, and repair the
foundation, exterior walls (except the interior faces thereof), sprinkler
system, if any, down spouts, gutters, and roof of the Premises, except for
repairs necessitated or caused by any act or negligence of Lessee, its
employees, agents, invitees, licensees or contractors. Lessee shall be liable
for repairs necessitated by such negligence only to the extent of the deductible
amount under any policy of property damage insurance maintained by Lessor, not
to exceed the sum of $25,000, provided, however, that there shall be no
obligation to make such repairs as are the obligation of the Lessor, until after
the expiration of five days' written notice from Lessee to Lessor of the need
thereof.
14.2 Services. At any time during the Lease or any exercised option term,
should Lessee request any special services from Lessor not otherwise provided
for in this agreement, and if the services are of such a nature that the Lessor
can reasonably provide them, Lessor will use its best efforts to provide said
special services. Lessee shall be obligated to reimburse Lessor for all
reasonable costs incurred in providing said services. Reasonable costs shall
include but not be limited to such things as attorney fees, engineering
services, and other professional fees, salary and benefits for employees of the
Lessor and third parties employed by Lessor to provide such special services.
The term "special services" includes, but is not limited to, such things as
negotiations with financial institutions servicing Lessee, execution of Consent
and Waiver Agreements, and emergency response assistance by employees or
independent contractors employed by Lessor who assist Lessee in preventing or
reducing damage to the Premises for which Lessee is responsible.
15. Repairs by Lessee. Except as otherwise provided, Lessee shall keep and
maintain said Premises in a neat, clean and sanitary condition and in as good
condition as at the inception of this Lease or as they may be in at any time
during the continuance of this Lease, including without limitation all HVAC
systems and equipment, all electrical wiring and fixtures, all cranes, all
plumbing and sewage facilities and all windows, overhead doors and man doors,
docks and appurtenances, within or attached to Building #7 or on the Premises.
Lessee's duty to repair shall include replacement of parts or components of the
Premises, or fixtures in the Premises that cannot be repaired. In the event
Lessee fails to promptly undertake and reasonably complete repairs required
under this paragraph, Lessor may, at its option, make the repairs at the expense
of Lessee and the cost of the repairs shall be additional rent and shall be
immediately due and payable.
16. Surrender on Termination. At the expiration of this Lease or its earlier
termination, Lessee shall, without notice, turn in all keys and access cards, or
similar devices, and re-deliver possession of said Premises to Lessor broom
clean and in as good condition as they were in at any time during the Lease
term, including any exercised option, ordinary wear and tear and damage by
insured peril or uninsured casualty not the fault of the Lessee, excepted.
17. Mechanic's Liens. Lessee agrees to pay when due all sums that may become due
for any labor, services, materials, supplies, or equipment furnished at the
instance of the Lessee, in, upon or about the Premises and which may be secured
by any mechanic's, materialman's or other lien against the Premises and/or
Lessor's interest therein, and will cause each such lien to be fully discharged
and released at the time of any obligation secured by any such lien matures
and/or becomes due; provided that if the Lessee in good faith disputes the claim
of lien the Lessee may pursue such dispute in any lawful manner, provided that
it bonds against such lien to the Lessor's reasonable satisfaction.
18. Signs, Lights and Sounds. Lessee shall not erect or install any exterior
signs or symbols without Lessor's prior written consent. Lessee shall not use
any advertising media or other media, such as loudspeakers, phonographs or radio
broadcasts, that may be deemed objectionable to Lessor or other tenants of the
Park, or that can be heard outside the Park. Lessee shall not install any
exterior lighting, shades or awnings or any exterior decorations or paintings,
or build any fences or make any changes to the exterior portions of the Premises
without Lessor's consent. Any signs or symbols so placed on the Premises shall
be removed by the Lessee at the termination of this Lease and the Lessee shall
repair any related damage or injury to the Premises. If not so removed by
Lessee, the Lessor may have the same removed and repairs performed at Lessee's
expense.
19. Displays of Merchandise. Lessee shall not keep or display any merchandise
on, or otherwise obstruct, any street, loading platforms or areaways adjacent to
the Premises, except that Lessee may store products, materials or merchandise in
a neat and orderly manner in the area between the south wall of
Building #7 and the rail line immediately south of Building #7. Lessee shall not
otherwise store products, materials or merchandise in any areas outside of the
Premises, provided that Lessee may, with Lessor's prior approval, such approval
not to be unreasonably withheld or delayed, display its products at the primary
entrance to Building #7, but not in such a way as to obstruct any street,
platform or common areas.
20. Streets, Parking Areas and Rules. Lessor shall keep the streets 20 feet on
each side of the center lines and areas used in common by the tenants of the
Park, as designated by Lessor from time to time, in reasonable repair and
condition, including such snow removal as Lessor may reasonably deem necessary
for normal access to the Premises. Lessor reserves the right to promulgate such
reasonable rules and regulations relating to the use of the streets and parking
areas within the Park as it may deem appropriate and for the best interests of
all tenants and Lessee agrees to abide by such rules and to cooperate in the
observance thereof. Such rules and regulations shall be binding upon Lessee upon
delivery of a copy thereof to Lessee. Such rules and regulations may be amended
by Lessor from time to time with or without advance notice and all such
amendments shall be effective upon the delivery of a copy thereof to Lessee,
provided that such rules and regulations shall not be amended in such a way as
to impose an unreasonable financial burden on Lessee. Lessee shall not obstruct
any portion of the common areas. Any violation of such rules and regulations by
Lessee, its officers, agents, employees or invitees will constitute a breach of
this Lease and entitle the Lessor to claim a default in the same manner and to
the same extent as any other default under the Lease. Lessee shall comply with
all rules and regulations of the applicable fire district or other governmental
entities having jurisdiction over the Premises.
21. Access. Lessor shall have free access to the Premises at all reasonable
times for purposes of inspecting of the same or of making repairs, additions or
alterations to said Premises but this right shall not constitute or be construed
as an agreement on the part of Lessor to make any repairs, additions or
alterations, except such as Lessor is obligated to make. Lessor shall have the
right to place and maintain "For Rent" signs in a conspicuous place or places on
the Premises and to show the Premises to prospective tenants for 90 days prior
to the expiration or sooner termination of this Lease.
22. Utilities. Lessee shall pay all charges for light, heat, water, gas, sewage,
telephone and aquifer protection and other utilities which shall be provided to,
or charged against, the Premises. In the event that electricity, heat, water,
telephone or other utilities are furnished through Lessor, Lessee shall pay
Lessor therefore according to Lessee's use thereof at the rates established
therefore by Lessor, said rates to be no higher, however, than those which
Lessee would be required to pay a third-party provider an available public
utility company if it directly furnished such service to Lessee.
23. All Charges Deemed Rent. All costs, expenses, and other charges which the
Lessee assumes or agrees to pay pursuant to this Lease shall be deemed to be
additional rent. In the event of a non-payment, Lessor shall have all the rights
and remedies herein provided for in case of non-payment of rent.
24. Indemnification and Insurance.
24.1 In General. Lessee releases and, subject to the provisions of
paragraph 25, shall defend, indemnify and hold harmless Lessor, and each of its
officers, directors, managers, members, owners, employees, agents and
representatives, from and against all liabilities, obligations, damages,
penalties, fines, judgments, claims, costs, charges, fees and expenses,
including, but not limited to, costs of investigation and correction, costs of
remediation or removal of hazardous materials, and reasonable architect,
attorney and consultant fees and costs, which may be imposed upon, incurred by,
or asserted against, Lessor or its officers, directors, members, owners,
employees, agents or representatives by reason of any of the following:
24.1.1 Acts or Omissions. Any act or omission in, on, about or arising
out of, or in connection with, the use, operation, maintenance and occupancy of
the Premises or any part thereof, whether or not consented to by Lessor, by
Lessee, or Lessee's agents, contractors, servants or employees (whether or not
within the scope of their employment), licensees or invitees, except to the
extent caused by the negligence or intentional misconduct of Lessor or its
agents, contractors, subcontractors, servants or employees; 24.1.2 Accidents.
Any accident, injury, casualty, loss, theft or damage whatsoever to any person
or tangible property occurring in, on, about or arising out of, or in connection
with, the use or occupancy by Lessee of the Premises, any common area, roadway,
alley, basement, pathway, curb, parking area, passageway or space under or
adjacent thereto arising from any cause or occurrence whatsoever, except to the
extent caused by the negligence or intentional misconduct of Lessor or its
agents, contractors, subcontractors, servants or employees;
24.1.3 Breach of Lease. Any failure on the part of Lessee or any of
its agents, contractors, subcontractors, servants or employees to perform or
comply with any of the covenants, agreements, terms, provisions, conditions or
limitations contained in this Lease;
24.1.4 Lessor's Performance. Any act performed by Lessor in the
exercise of any of Lessor's rights under this Lease; or
24.1.5 Hazardous Substances. Any presence, release, discharge,
disposal, dumping, spilling or leaking (accidental or otherwise), now or
hereafter determined to be unlawful or subject to environmental laws or
governmentally imposed remedial requirements, occurring on the Premises during
the Lessee's occupancy thereof, of any hazardous, dangerous or toxic substance
of any kind (whether or not now or hereafter regulated, defined or listed as
hazardous, dangerous or toxic by any local, state, or federal government) into,
onto or under the ground or the air, soil, surface water, or ground water
thereof, or the pavement, structure, sewer system, fixtures, equipment, tanks,
containers or personalty at the Premises, or from the Premises, into, onto or
under the Park or the property of others. Any violation of paragraph 42. The
foregoing indemnity shall apply notwithstanding any provisions of federal, state
or local law which provide for exoneration from liability in the event of
settlement with any governmental agency, and notwithstanding Lessor's consent,
knowledge, action or inaction with respect to the act or occurrence giving rise
to such right of indemnity, provided that Lessee shall, in no event, have any
liability with respect to any hazardous substances that are present on the
Premises at the inception of this Lease. Lessor shall indemnify Lessee and hold
Lessee harmless with respect to any liability with respect to any hazardous
substances that are present on the Premises at the inception of this Lease.
24.2 Lessee Liability Insurance. Lessee agrees to carry Commercial General
liability insurance insuring both Lessee and Lessor, with insurance
carriers satisfactory to Lessor, with not less than $2,000,000 single limit and
providing a Certificate of Insurance evidencing the same with not less than a
30-day cancellation clause, provided, however, that Lessee's obligation to
indemnify and hold harmless Lessor as provided in this paragraph shall be to the
extent only of the degree of negligence attributable to Lessee, its officers,
employees, agents, invitees, or guests. Such insurance certificate shall also
include not less than $50,000 "Fire Damage" liability for damage to the
Premises. In the alternative, Lessee may carry "Building Legal Liability
Insurance Special Form" (insurance industry forms CP0040 and CP1030 or
equivalent) against Lessee's liability (pursuant to paragraphs (14.1 and 25).
24.3 Notice of Claim. If any action or proceeding is brought against Lessor
or its officers, directors, managers, members, owners, employees, agents or
representatives by reason of any claim indemnified under paragraph 24 Lessor
shall promptly notify Lessee of such claim and Lessee, at Lessee's expense,
shall immediately resist or defend such action or proceeding employing counsel
approved by Lessor in writing, which approval shall not be unreasonably
withheld. In connection with any such action brought against Lessor by any one
or more of Lessee's employees, Lessee waives any immunity, defense or other
protection that might be afforded to Lessee by any worker's compensation,
industrial insurance or similar laws, with regard to such claim or action
against Lessor.
24.4 Waiver by Lessee. Lessee waives and releases all claims against
Lessor, its officers, managers, partners, employees, agents and representatives,
for any loss, injury or damage (including consequential damages), to Lessee's
property or business during the term of this Lease occasioned by theft, act of
God, public enemy, riot, strike, insurrection, war, order of court, governmental
body or authority not resulting from any act or omission of Lessor, earthquake,
flood, fire, explosion, falling objects, steam, water, rain or snow, leak or by
flow of water, rain or snow from the Premises or onto the Premises or from the
roof, street, surface or subsurface or from any other place, or by dampness, or
by the breakage, leakage, obstruction or defects of the pipes, sprinklers,
wires, appliances, plumbing, heating, air conditioning, lighting fixtures of the
Improvements, or by the construction, repair or alteration of the Premises or by
any other acts or omissions of any other tenant or occupant of the Park, or
visitor to the Park or the Premises or by any third party whomsoever, or by any
cause which is beyond Lessor's control.
24.5 Lessee's obligations under this paragraph 24 shall survive any
termination or expiration of this Lease.
25. Insurance and Waiver of Subrogation. Lessor shall maintain fire and extended
coverage insurance on the buildings and improvements at the Park which belong to
Lessor and pay for the same, subject to partial reimbursement as provided in
paragraph 28.1. If the activities of the Lessee shall increase the cost of such
insurance or jeopardize the availability of coverage due to Lessee's operations
or failure to comply with fire codes and regulations, Lessor shall have the
right to increase the rental payable hereunder by an amount equal to the
increased cost of insurance premiums resulting therefrom. If Lessor's insurance
hereunder should be canceled due to any actions of Lessee, Lessor may terminate
this Lease upon 20 days' notice to Lessee as provided in paragraph 30.
Lessee shall maintain appropriate property insurance covering its personal
property, assets, and fixtures located on the Premises.
Lessor and Lessee each waive all rights to recover against the other or against
the officers, directors, shareholders, partners, members, owners, joint
ventures, employees, agents, customers, invitees, or business visitors of the
other for any loss or damage to its property arising from any cause except that
Lessee shall remain liable for Lessor's -deductible up to a maximum amount of
$25,000 for its obligations under paragraphs 14 and 15 and the waiver provided
herein to that extent shall not apply. Lessor and Lessee will cause their
respective insurers to issue appropriate waiver of subrogation rights
endorsements to all policies of insurance carried in connection with the
Premises or the contents thereof.
26. Damage/Rebuilding. If the Premises are destroyed or damaged by acts of war,
the elements (including earthquake), or fire to such an extent as to render the
same untenantable in whole or in substantial part, the Lessor has the option of
rebuilding or repairing the same to be exercised by giving notice to Lessee of
its intent to rebuild or repair the Premises or the part so damaged within 30
days after receiving notice of the occurrence of any such damage. If the Lessor
elects to rebuild or repair and does so without unnecessary delay, Lessee shall
continue to be bound by this Lease except that during such period the base rent
shall be abated in the same proportion that the Premises are rendered unfit for
occupancy by Lessee. If the Lessor fails, for 30 days after the Lessee gives
notice of the damage-causing event, to give notice of its intent to repair,
Lessee shall have the right to declare this Lease terminated. Lessor's
obligation (should it elect to repair or rebuild) shall be limited to the
Premises as they existed at the commencement of this Lease, including those
improvements which the Lessor was required to perform, and Lessee shall
forthwith replace or fully repair, at its expense, all exterior signs, trade
fixtures, equipment and other installations originally installed by Lessee or
remove the same and repair any damage caused by their removal. Lessee agrees to
give prompt written notice to Lessor of any fire loss or of any other damage
which may occur to the leased Premises or any portion thereof, or of any other
condition or occurrence causing the leased -Premises to be untenantable.
27. Condemnation. If the Premises, or any part thereof the loss of which impairs
the utility of the Premises to a significant extent, are appropriated or taken
for any public use by virtue of eminent domain or condemnation proceeding, or by
conveyance in lieu thereof, or if by reason of law or ordinance or by court
decree, whether by consent or otherwise, the use of the Premises by Lessee for
any of the specific purposes herein before referred to shall be prohibited,
Lessee shall have the right to terminate this Lease upon written notice to
Lessor, and rent shall be paid only to the time when the Lessee surrenders
possession of the Premises. In the event of a partial taking, if Lessee is
entitled to, but does not elect to, terminate this Lease it shall continue in
possession of that part of the Premises not so taken under the same terms and
conditions hereof, except that there shall be an equitable reduction of the base
rental payment hereunder. All compensation awarded or paid upon such a total or
partial taking of the fee of the Premises shall belong to and be the property of
Lessor, whether such compensation be awarded or paid as compensation for
diminution in value of the leasehold or to the fee; provided however, Lessor
shall not be entitled to any award made to Lessee for loss of business,
depreciation to, and cost of removal of stock and/or fixtures, provided that no
award for such claims shall reduce the amount of any award made to Lessor.
28. Taxes, Assessments and Insurance Premiums.
28.1 Reimbursement. The Lessee will reimburse the Lessor for increases over
1996 (base year) amounts in the amount of real property taxes and assessments,
and for this purpose assessments will be paid by the Lessor in the minimum
required amount per year, and premiums for fire insurance, with extended
coverage applicable to all insurable buildings and improvements in the Park,
including without limitation the cranes now or hereafter installed in the
Premises, and with deductibles of $25,000.00 for losses by fire and other
insured causes. All other common area costs are the sole responsibility of the
Lessor. The Premises, taking into account both the building and the storage
area, constitute approximately 3.2% of the Park. It is, therefore, agreed that
the taxes, assessments and insurance premiums ("TAIP") applicable to the
Premises is 3.2% of the total TAIP applicable to the Park. In the event that
there is a material change in the Park, either in land area or in improvements
such that the Premises is significantly different from 3.2% of the Park, there
will be an equitable adjustment in the Lessee's percentage.
Commencing with the month of January, 1997, the Lessee will pay as additional
rent, monthly, at the same time as base rent, if any, is due, an amount equal to
1/12th of 3.2% of the amount by which the TAIP for the current year exceeds the
amount of the TAIP for the year 1996, when it was $638,679-00.
Inasmuch as the TAIP for any given year will not be fully known as of January 1
of such year, the Lessee will continue to pay at the prior year's rate, adjusted
to the extent that the amounts that make up the TAIP for the current year are
known. At such time as all amounts that make up the TAIP for the current year
are known the monthly payment on account of TAIP will be changed and a further
payment, or refund, as the case may be, will be made to compensate for any
shortage or overage in the added rent paid in the preceding months. If there is
a refund due it will be sent with the notice of the new TAIP amount. If there is
a further amount owed it will be paid along with the next monthly rent.
28.2 Lessee's Taxes. Lessee shall pay all personal property taxes imposed
on Lessee's fixtures and equipment and all other taxes, installments of
assessments (amortized over the longest permissible time), except general
property taxes and assessments, levies, licenses and permit fees, utility
hook-up fees and facility charges, and other governmental charges and
impositions of any kind and nature whatsoever, together with any interest or
penalties attributable to tenant's failure to pay the same when due, which at
any time during the term of this Lease may be assessed, levied or become due and
payable out of, or in respect of, the Premises or Lessee's use thereof, or
become a lien on the Premises, including, without limitation, any sales tax,
business and occupation tax, excise tax or similar tax or imposition imposed
upon rent or Lessor's business of leasing property, and the cost of compliance
with any governmental requirements or regulations relating the Lessee's use of
the Premises or the utility services thereto, or the conduct of Lessee's
business (collectively, the "Impositions"); provided, however, Lessee shall not
be obligated to pay Lessor's net income taxes or any transfer or excise tax
imposed upon the conveyance of the Premises, or business and occupation taxes
imposed upon Lessor's business activities other than leasing property.
Impositions shall be paid by Lessee when due if billed directly to Lessee, and
within 30 days of receipt of billing by Lessor if such Impositions are billed to
the Lessor.
29. Non-waiver of Breach. The waiving of any of the covenants of this Lease by
either party shall be limited to the particular instance and shall not be deemed
to waive any other breaches of such covenants. The consent by Lessor to any act
by Lessee requiring Lessor's consent shall not be deemed to waive consent to any
subsequent similar act by Lessee. The failure of the Lessor to insist upon
strict performance of the covenants and agreements of this Lease, shall not be
construed to be a waiver or relinquishment of any such covenants or agreements,
but the same shall remain in full force and effect.
30. Default. If Lessee should fail to remedy any default (a) in the payment of
any sum due under this Lease within ten days after notice, or (b) in the keeping
of any other term, covenant or condition herein with all reasonable dispatch,
within 20 days after notice, then in any of such events, Lessor shall have the
right, at its option, in addition to, and not exclusive of, any other remedy
Lessor may have by operation of law, without further demand or notice, to
re-enter the Premises and eject all persons therefrom, using all necessary force
so to do, and either (i) declare this Lease at an end, in which event Lessee
shall immediately pay to Lessor a sum of money equal to the amount, if any, by
which the value of the rent reserved hereunder for the balance of the term of
this Lease, discounted to present value at 8% per annum, exceeds the then
reasonable rental value of the Premises for the balance of said term, discounted
in like manner, net of all costs incident to reletting the Premises, or (ii)
without terminating this Lease may relet the Premises, or any part thereof, as
the agent and for the account of Lessee upon such terms and conditions as Lessor
may deem advisable, in which event the rents received on such reletting shall be
applied first to the expenses of such re-letting, including without limitation
necessary renovation and alterations of the Premises, reasonable attorney fees,
real estate commissions paid, and thereafter toward payment of all sums due or
to become due Lessor hereunder, and if a sufficient sum shall not be thus
realized to pay such sums and other charges, Lessee shall pay Lessor any
deficiency monthly, notwithstanding Lessor may have received rental in excess of
the rental stipulated in this Lease in previous or subsequent months, and Lessor
may bring an action therefore as such monthly deficiencies shall arise.
31. Litigation Costs/Venue. If any legal action is instituted to enforce or
construe this Lease, or any part thereof, the prevailing party shall be entitled
to recover reasonable attorney fees and expenses. If any legal fees are incurred
by Lessor relative to the enforcement of any term of this Lease, with or without
suit, Lessee shall be liable to Lessor for said fees and shall, within ten days
of demand by Lessor therefore, pay the same to Lessor. Venue of any legal action
brought hereunder shall be Spokane County, State of Washington.
32. Removal of Personal Property by Lessee. Lessee shall have the right to
remove all of its personal property, trade fixtures, and office equipment,
whether or not attached to the Premises, provided that such may be removed
without serious damage to the Premises. All damage to the Premises caused by
removal of such items shall be promptly restored or repaired by Lessee. M
property not so removed as of the termination of this Lease shall be deemed
abandoned by Lessee.
33. Removal of Property by Lessor. If Lessor lawfully re-enters or takes
possession of the Premises prior to the stated expiration of this Lease, Lessor
shall have the right, but not the obligation, to remove from the Premises all
personal property located therein and may place the same in storage in a public
warehouse at the expense and risk of Lessee, and shall have the right to sell
such stored property, without notice to Lessee, after it has been stored for a
period of 30 days or more, the proceeds of such sale to be applied first to the
cost of such sale, second to the payment of the charges for storage, if any, and
third to the payment of any other sums which may then be due from Lessee to
Lessor under any of the terms hereof, the balance, if any, to be paid to the
Lessee.
34. Loading Platforms. The Lessee shall maintain all loading platforms attached
to Building #7.
35. Insolvency. If Lessee becomes insolvent, voluntarily or involuntarily
bankrupt, or if a receiver, assignee, or other liquidating officer is appointed
for the business of Lessee, then Lessor may cancel this Lease at its option.
36. Assignments and Subletting.
36.1 Consent Required. The Lessee shall not assign this lease, or any
interest therein, or sublet the Premises, or any part thereof, or allow, permit
or suffer any other entity to use or occupy any part of the Premises without the
prior written consent of the Lessor.
36.2 Change in Lessee Ownership. Lessee being a corporation, any change in
the ownership or voting power of the Lessee which cumulatively amounts to more
than 40%, whether in a single transaction or in a series of transactions, or
which results in a transfer of the control of the Lessee, shall constitute an
assignment requiring the Lessor's prior written consent; provided that changes
in ownership which occur in the ordinary course of the conduct of the ESOP will
not trigger the application of this paragraph, and provided further, that any
other change in ownership which would otherwise trigger the application of this
paragraph shall be submitted to Lessor for waiver of this paragraph, such waiver
not to be unreasonably withheld or delayed.
36.3 Request for Consent. If at any time the Lessee desires to assign or
sublet this lease in whole or in part, the Lessee shall submit a written request
to the Lessor, including with the request, the identification of the proposed
assignee or sublessee, a history of its prior operations, a description of its
proposed operations, audited financial statements for its most recently
completed fiscal period and a statement of the terms upon which the assignment
or the subletting is proposed to be made. The Lessee will promptly, on request,
submit to the Lessor such further documentation relative to the proposed
assignment or sublease as the Lessor may request.
36.4 Reimbursement of Costs. The Lessee will reimburse the Lessor for all
costs and expenses reasonably incurred by the Lessor in evaluating the proposed
assignment or subletting.
36.5 Withholding Consent. The Lessor may withhold its consent on any of the
following bases: If the liquidity and/or net worth and/or profitability of the
proposed assignee or sublessee is materially less than that of the Lessee; if
the proposed use by the assignee or sublessee would, in the Lessor's reasonable
judgment, have an adverse effect on the Park; if the proposed assignee's or
sublessee's history as a tenant is, in the reasonable judgment of the Lessor,
unsatisfactory; if any other reason exists which the Lessor, in its reasonable
judgment, deems to be sufficient. Consent otherwise shall not be
unreasonably withheld or delayed.
36.6 Conditions of Consent. If consent to the assignment or subletting is
granted, it may be granted on such reasonable conditions as the Lessor may deem
appropriate in light of all of the circumstances, including the proposed use by
the assignee or sublessee, and any change in conditions since the commencement
of this lease. The conditions may include a reasonable additional charge for
administrative services of the Lessor incident to the transaction.
36.7 Increased Rent Shared. If the assignee or sublessee would pay more for
the Premises which it has proposed to occupy than is being paid by the Lessee,
or if the proposed assignee or sublessee is paying any consideration to the
Lessee for the assignment or subletting, then 50% of any such payment shall be
paid to the Lessor as additional rent.
36.8 Submit Documents. All documents incident to the proposed transaction
will be submitted to the Lessor in their proposed form and shall be subject to
the Lessor's approval. If approval is given, then, promptly following their
execution, copies of all such executed documents of assignment or subletting, or
incident thereto, shall be furnished to the Lessor.
36.9 Assignee Bound. Any assignee or sublessee shall be subject to all of
the terms and conditions of this lease, including without limitation, those
terms and conditions applicable to assignment or subletting, provided that the
assignment or sublease may be canceled or terminated, but not otherwise
modified, without the consent of the Lessor, but, in any such event, the Lessor
shall be promptly notified of the cancellation or termination and provided with
copies of all documents incident thereto.
36.10 Lessee Remains Obligated. No assignment or subletting shall, to any
extent, impair, limit or qualify the continuing obligation of the Lessee to
perform all of the obligations of the Lessee under this lease, all the same as
if the assignment or subletting had not taken place.
36.11 Additional Notice. If so requested by the Lessee, or included in the
documents of assignment or subletting, and that provision is specifically called
to the attention of the Lessor by written notice, the Lessor will give to the
assignee or sublessee any notice that it gives to the Lessee, but if such
provision is included, then, on that account, the monthly rent may be increased
by a reasonable amount to defray the Lessor's additional administrative costs.
36.12 Joint Liability. In the event of any default under the lease which in
any way relates to the assignment or subletting, the Lessee and the assignee or
sublessee shall be jointly and severally obligated to the Lessor to remedy the
default and to pay any damages that the Lessor may sustain on account of the
default.
36.13 Default. Any purported assignment or subletting in whole or in part,
without full compliance with this paragraph 36, shall constitute a default under
this lease and shall vest no rights in the purported assignee or sublessee.
37. Statements by Lessee. Lessee agrees at any time and from time to time, upon
not less than ten days' prior request by Lessor, to execute, acknowledge and
deliver to Lessor a statement in writing (Estoppel Certificates), certifying
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that the same is in full force and effect as modified and
stating the modifications), and the dates to which the base rent and additional
rent have been paid in advance, if any, it being intended that any such
statement delivered. pursuant to this paragraph may be relied upon by any
existing or prospective purchaser, mortgagee, or assignee of the Premises or the
Park.
38. Subordination. Lessee, upon request of Lessor, will subordinate this Lease
to any mortgage, deed of trust, or other security interest (mortgage) which now
or hereafter affects the Premises, and to any renewals, modifications or
extensions of such mortgage. Lessee will execute and deliver, at Lessor's
expense, such instruments thus subordinating this Lease or evidencing such
subordination; provided, however, Lessor shall deliver or cause to be delivered
to Lessee an agreement in writing from any such mortgagee to the effect that so
long as Lessee shall faithfully discharge its obligations under this Lease, its
tenancy will not be disturbed nor this Lease affected by any default of such
mortgage, and that in the event of a sale of the Premises in foreclosure or any
sale, transfer or conveyance in lieu thereof, that same will be sold,
transferred or conveyed subject to this Lease.
39. Short Form Lease. Each party agrees to execute upon request of the other a
short form lease for the purpose of recordation. Each party agrees to re-execute
this Lease at any time upon the request of the other.
40. Miscellaneous.
40.1 Use of Terms. Whenever the singular number is used in this Lease and
whenever required by the context, the same shall include the plural, and the
masculine gender shall include the feminine and neuter genders, and the word
"person" shall include corporation, firm or association or other entity. If
there be more than one lessee, the obligations hereunder imposed upon Lessee
shall be joint and several.
40.2 Entire Agreement/Modifications. This instrument contains all of the
agreements and conditions made between the parties hereto and may not be
modified orally or in any other manner than by an agreement in writing signed by
all of the parties hereto or their respective successors in interest.
40.3 Time of the Essence. Time is and shall be of the essence of each term
and provision of this Lease.
40.4. Heirs and Successors. All the covenants, agreements, provisions, and
conditions of this Lease shall inure to the benefit of and be binding upon the
parties hereto, their successors, heirs, executors, administrators and assigns.
40.5. Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any of the provisions hereof.
40.6. No Other Agreements. The parties acknowledge that no representation
or condition or agreements varying or adding to this Lease have been made either
orally or in writing.
40.7. Notices. All notices and demands required or allowed to be given
hereunder shall be in writing and sent by registered or certified mail, return
receipt requested, or hand delivered and receipted for, to the respective
parties at the following addresses, or at such other address that either party
may designate by notice in writing:
Lessor: 3808 N. Sullivan Road, Building N-15, Spokane, WA 99216
Lessee: P. O. Box 14918, Spokane, WA 99214-0918
41. Riders. The riders or exhibits, if any, attached to this Lease are made part
hereof by reference.
42. Environmental Considerations. As used in this lease, the term "Hazardous
Substance" shall mean any substance, chemical or waste, including petroleum
products or radioactive substances, that is now or shall hereafter be listed,
defined or regulated as hazardous, toxic or dangerous under any applicable
Environmental Laws.
As used in this lease, "Environmental Law" shall mean any federal, state,
or local laws, ordinances, rules, regulation and requirements now or hereafter
enacted or adopted (including without limitation, consent decrees and
administrative orders) relating to the generation, use, manufacture, treatment,
transportation, storage, disposal, or release of any Hazardous Substance.
Lessee shall not, without prior written notice to Lessor, engage in or
allow the generation, use, manufacture, treatment, transportation, storage,
investigation, testing, release or disposal of any Hazardous Substance in, on,
under or adjacent to the Premises. Lessee shall ensure that at all times Lessor
has true, complete and accurate information regarding any of Lessee's activities
on the Premises involving Hazardous Substances. Lessee shall provide Lessor with
(a) a description of any processes or activities involving the use of Hazardous
Substances to be conducted by Lessee on the Premises, (b) a description (by type
and amount) of any Hazardous Substances Lessee plans to generate, use,
manufacture, transport, store or dispose of in connection with its use of the
Premises, and (c) a description of techniques and management practices to be
utilized by Lessee to reduce the amount of Hazardous Substances used and/or
generated, to prevent release of Hazardous Substances to the environment and to
ensure the proper handling labeling, use and disposal of Hazardous Substances
used by Lessee on the Premises. Lessee shall notify Lessor prior to any material
changes in such processes, activities, type and amount of Hazardous Substances
and/or techniques and management practices and in any event, Lessee shall report
to Lessor at least once yearly regarding any such processes, activities,
Hazardous Substances, techniques, and management practices. Lessee shall
contemporaneously provide Lessor with copies of all reports, listings or other
information required by any governmental entity relating to any Hazardous
Substances utilized by Lessee, and shall promptly provide any other information
related to Lessee's utilization of Hazardous Substances as Lessor may reasonably
request.
Lessee shall not engage in or allow the unlawful release (from underground
tanks or otherwise) of any Hazardous Substance in, on, under or adjacent to the
property (including air, surface water and ground water on, in, under or
adjacent to the property). Lessee, with respect to the Premises, shall at all
times, and shall cause its employees, agents and contractors at all times, to be
in compliance with all Environmental Laws with respect to any Hazardous
Substances and shall handle all Hazardous Substances in compliance with
applicable Environmental Law and good industry standards and management
practices.
Lessee shall promptly notify Lessor, in writing, if Lessee has, or
acquires, notice or knowledge that any Hazardous Substance has been, or is
threatened to be, released, discharged or disposed of, on, in, under or from the
Premises. Lessee shall immediately take such action as is necessary to report to
governmental agencies as required by applicable law and to detain the spread of
and remove, to the satisfaction of Lessor and any governmental agency having
jurisdiction, any Hazardous Substances released, discharged or disposed of as
the result of, or in any way connected with, Lessee's activities on the Premises
and which is now, or is hereafter determined to be, unlawful or subject to
Environmental Laws and/or governmentally imposed remedial requirements. Lessee
shall immediately notify Lessor and provide copies upon receipt of all written
complaints, claims, citations, demands, inquiries, reports or notices relating
to the condition of the Premises or compliance with Environmental Laws. Lessee
shall promptly cure and have dismissed with prejudice any such actions or
proceedings in any way connected with Lessee's activities on the Premises, to
the reasonable satisfaction of Lessor, and Lessee shall keep the Premises free
of any lien imposed pursuant to any Environmental Law. Lessor shall have the
right at all reasonable times, and from time to time, to conduct environmental
audits of the Premises (including sampling, testing, monitoring and accessing
environmental records required by applicable law) by a consultant of Lessor's
choosing, and Lessee shall cooperate with the conduct of such audits. If any
violation of any Environmental Law by Lessee or any violation of Lessee's
obligations under this paragraph are discovered, in addition to any other right
Lessor may have, the costs incident to such audit, including the fees and
expenses of such consultant, shall be paid by Lessee to Lessor on demand as
additional rent.
Lessee shall at all times maintain an employee or consultant familiar with
Environmental Laws and charged with responsibility for Lessee's compliance with
all Environmental Laws and shall advise Lessor of the name, address and phone
number of such employee or consultant. Lessee shall implement a system to review
Lessee's Hazardous Substance activities on a regular basis and shall in good
faith (consistent with sound business practices) implement and maintain best
management practices to minimize the hazards posed by materials utilized by
Lessee, for example, by reducing the amounts of Hazardous Substances used and
disposed of, by utilizing less dangerous or less toxic materials or by
implementing programs to ensure the safe and proper handling, labeling, use and
disposal of Hazardous Substances.
Each year, between January 1 and March 31, Lessee shall conduct a self
environmental audit of Lessee's operations, regulatory compliance status, and
the Premises utilizing Lessor's standard format and checklists. Lessee shall
present the results of the environmental audit, and proposed operational changes
to address any audit deficiencies, to Lessor in writing within six weeks after
conducting the audit.
Prior to its vacation of the Premises, in addition to all other
requirements under this lease, Lessee shall remove any Hazardous Substances
placed on the Premises during the term of this lease or Lessee's possession of
the Premises, and shall demonstrate such removal to the Lessor's reasonable
satisfaction.
Lessee's obligations under this paragraph with respect to any occurrence
during the term of this lease shall survive any termination or
expiration of this lease.
Lessee is solely responsible for all costs and expenses related to the
clean up, remediation or monitoring of Hazardous Substances on the Premises or
any other properties which become contaminated with Hazardous Substances as a
result of activities on, or the contamination of, the Premises during the term
of this lease or any extension, renewal or holding over.
Lessee's obligations are unconditional and shall survive and continue in
effect after the termination of the lease or the transfer of the Premises
voluntarily or involuntarily, to the Lessor or others.
Lessor shall, at the inception of this Lease, advise Lessee in writing as
to the present condition of the Premises vis-a-vis hazardous substances
according to the best knowledge, information and belief of Lessor.
43. Brokers and Finders. Neither party has had any contact or dealings regarding
the Premises, or any communication in connection with the subject matter of this
Lease, through any real estate broker or other person who is entitled to claim a
commission or finder's fee in connection with the Lease contemplated hereby. In
the event that any broker or finder makes a claim for a commission * or finder's
fee based upon, or alleged to be based upon, any such contract, dealings or
communication, the party through whom the broker or finder makes its claim shall
be responsible for, and shall indemnify, defend and hold harmless the other
party from, such claim for commission or fee or allegation thereof and all costs
and expenses (including reasonable attorney fees) incurred by the other party in
defending against the same.
44. Arbitration. In the event that a dispute should arise under this lease, as a
condition precedent to suit, the dispute shall be submitted to arbitration in
the following manner: The party seeking arbitration shall submit to the other
party a statement of the issue(s) to be arbitrated and shall designate such
party's nominated arbitrator. The responding party shall respond with any
additional or counter statement of the issue(s), to be arbitrated and shall
designate the responding party's arbitrator, all within fourteen (14) days after
receipt of the initial notice. The two arbitrators thus nominated shall proceed
promptly, and in any event within ten days, to select a third arbitrator. The
arbitrators shall, as promptly as the circumstances allow and within a time
established by a majority vote of the arbitrators, conduct a hearing on the
issues submitted to them, and shall render their decision in writing. Any
decision as to procedure or substance made by a majority of the arbitration
panel shall be binding. A decision by a majority of the arbitrators on any issue
submitted shall be the decision of the arbitration panel as to that issue. The
arbitrators have authority to award costs and attorney fees to either party in
accordance with the merits and good faith of the positions asserted by the
parties. In lieu of appointing three arbitrators in the manner set forth above,
the parties may, by agreement, designate a single arbitrator. Except as provided
herein the arbitration proceedings shall be conducted in accordance with the
rules of the American Arbitration Association and the statutes of the State of
Washington pertaining to binding arbitration.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year
first above written.
LESSEE: LESSOR:
CXT INCORPORATED CROWN WEST REALTY, L.L.C.
a Delaware corporation
By: /s/ John G. White By: /s/ Richard D. Rollnick
--------------------------------- ------------------------------------
John G. White, President & CEO Richard D. Rollnick, President
STATE OF WASHINGTON
) ss.
County of Spokane
On this day 30th day of December, 1996, personally appeared JOHN G. WHITE to me
known to be the President and CEO of CXT INCORPORATED, the corporation that
executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said corporation, for
the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute the said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.
Name Printed: March Combs
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane.
My Commission Expires: 8/1/98
STATE OF WASHINGTON
ss.
COUNTY OF SPOKANE
On this 30th day of December, 1996, personally appeared RICHARD D. ROLLNICK, to
me known to be the President of CROWN WEST REALTY, L.L.C., the limited liability
company that executed the within and foregoing instrument, and acknowledged the
said instrument to be the free and voluntary act and deed of said company, for
the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute the said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.
Name Printed: March Combs
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane.
My Commission Expires: 8/1/98
ADDENDUM TO LEASE
This is an addendum to that certain Lease dated December 20, 1996, between
CROWN WEST REALTY, L.L.C., as lessor, and CXT, INCORPORATED, as lessee, pursuant
to which the lessee leased from the lessor Building No. 7 and approximately five
acres of land.
Paragraph 5.1 of the said Lease is hereby amended to read as follows:
5.1 Option to Terminate This Lease Lessee is hereby granted the one-time option
to terminate this Lease effective December 31, 1999, by giving the lessor not
less than 90 days' prior written notice, said notice to be accompanied by a
payment of $100,000.00 which, should said option to terminate be exercised,
constitutes the consideration for the early termination of this Lease.
DATED this _____ day of _________,1998.
CROWN WE REALTY, L.L.C.
By: By:
--------------------------------- ------------------------------------
Title: President Title: President
STATE OF WASHINGTON
) ss.
County of Spokane
On this day personally appeared before me RICHARD D. ROLLNICK, and on oath
stated that he was authorized to execute the instrument and acknowledged it as
the President of CROWN WEST REALTY,, L.L.C.; to be the free and voluntary act of
such party for the uses and purposes therein mentioned.
GIVEN under my hand and official seal this ______ day of ________________.
Name Printed: _________________
NOTARY PUBLIC in and for the State of Washington,
residing at Spokane.
Appointment Expires:____________
STATE OF WASHINGTON
) ss.
county of Spokane
On this day personally appeared before me JOHN G. WHITE, and on oath stated
file he was authorized to execute the instrument and acknowledged it as the
President of CXT, INCORPORATED, to be the free and voluntary act of such party
the uses and purposes therein mentioned.
GIVEN under my hand and official seal this ___________ of ______________ 1998.
Name Printed.__________________ I
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane.
Appointment Expires: