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EXHIBIT 10.27
TRIPLE NET LEASE
THIS TRIPLE NET LEASE is made and entered into by and between JUBILATION
ENTERPRISES, LLC, a Washington limited liability company (herein "Lessor"), and
TELECT, INC., a Washington corporation (herein "Lessee"), on the 24th day of
August, 2000.
WHEREAS, Lessor has entered into a Real Estate Purchase and Sale Agreement dated
July 10, 2000 for the purchase of real property being approximately 8.96 acres
in size, upon which is located an existing building consisting of approximately
80,400 square feet of manufacturing and office space including adjacent parking
areas (herein the "Premises"); and
WHEREAS, the Premises includes about 3.92 acres of undeveloped land (herein the
"Undeveloped Land") upon which Lessor intends to develop additional parking
space and to construct additional building space; and
WHEREAS, the Premises are current subject to a lease for a term of years dated
May 31, 1996 wherein Accra-Fab, Inc., a Washington corporation, is lessee
(herein the "Accra-Fab Lease"); and
WHEREAS, upon the closing of the purchase of the Premises by Lessor, the term of
the Accra-Fab Lease will be reduced by amendment so that the Accra-Fab lease
will expire on July 31, 2001 subject to lessee's right to holdover not exceeding
October 31, 2001, and further Lessor will be entitled, prior to the expiration
of the Accra-Fab Lease, to use and occupy so much of the Undeveloped Land as
Lessor shall determine necessary for the development of parking and additional
building space; and
WHEREAS, it is intended, subject to the foregoing, that this Lease Agreement be
entered into as of the date hereof, but to be effective as to possession of a
portion of the Premises upon completion by Lessor of the construction of the
parking area on the Undeveloped Land and as to the balance of the Premises upon
the expiration of the Accra-Fab Lease and the vacation of the Premises by
Accra-Fab;
NOW, THEREFORE, subject to the foregoing recitals and in consideration of the
mutual promises and covenants hereinafter expressed, the parties hereto agree as
follows:
1. Premises. Lessor hereby leases unto Lessee and Lessee hereby leases from
Lessor, for the term and under the conditions hereinafter set forth,
that certain parcel of real property legally described on Schedule I
attached hereto including all present and to be constructed improvements
thereon (hereinafter called "Premises") at 1611 N. Molter Road, Liberty
Lake, Washington, in accordance with the site plan and elevation
attached hereto as Schedules II and III, and all easements and other
rights appurtenant to the Premises, including but not limited to
nonexclusive rights to ingress, egress, and parking.
Notwithstanding the foregoing and Section 2 hereof, upon completion of
construction of the
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parking on the Undeveloped Land by Lessor and delivery of the same to
Lessee, monthly rent for the said parking shall become due and payable
beginning on the date of delivery in an amount equal to the fair market
rental value of such parking area as determined by the parties. In the
event that the parties cannot agree upon the rental amount not less than
thirty (30) days before the anticipated date of delivery of the parking
area to Lessee, then the determination thereof shall be submitted to
arbitration in accordance with Section 29 hereof.
2. Commencement Date. The lease term shall commence at 12:01 a.m. on the
date (hereinafter called "Commencement Date") that Lessor delivers
possession of the Premises to Lessee after the Accra-Fab Lease expires
and Accra-Fab has vacated the Premises.
3. Term. The term of this lease shall be for the period commencing on the
Commencement Date and ending September 30, 2012; provided, however, that
the term of this lease may be extended as provided in Section 19 hereof.
The phrase "Lease Term," as used in this lease, shall be the term of
this lease and any extension thereof pursuant to said Section 19.
Notwithstanding the foregoing, at any time after September 30, 2002, and
from time to time thereafter, Lessee may, upon giving not less than
twelve (12) months prior written notice to Lessor, reduce the number of
square feet of the Premises occupied by Lessee all within the sole
discretion of Lessee. The notice shall specify the amount of the square
foot reduction, and the location thereof within the Premises and the
effective date such reduction is to take place. Lessee shall upon the
effective date vacate that portion of the Premises described in the
notice in accordance with the terms of this Lease and the Monthly Rent
shall thereupon be proportionately reduced. The parties shall forthwith
execute an amendment to the Lease describing such changes.
4. Monthly rental. Lessee shall, during the Lease Term, pay to Lessor at
25425 E. Mission Avenue, P.O. Box 629, Liberty Lake, Washington 99019,
or such other place as Lessor shall designate in writing from time to
time, without setoff or deduction for any reason whatsoever, a monthly
rental in an amount to be determined based upon the fair market value of
the Premises including all improvements, newly constructed improvements
and any previously delivered parking area as provided in Section 1. In
the event that the parties cannot agree on the amount of monthly rental
prior to thirty (30) days before the Commencement Date, then the same
shall be submitted to arbitration in accordance with Section 29 hereof.
The monthly rental shall be prorated for partial months falling within
the Lease Term, and shall be payable in advance on or before the first
day of each calendar month during the Lease Term; provided, however,
that the first payment shall be due on the Commencement Date. If any
rent payment is not received by Lessor within five (5) days after the
due date (or on the next business day if the fifth day is not a business
day), then Lessee shall pay as additional rent the sum of five percent
(5%) of the delinquent payment for each month or portion thereof that
the payment remains overdue.
5. Additional rental. In addition to the monthly rental, as additional
rental Lessee shall pay to the public authorities charged with the
collection thereof, promptly as the same becomes due and payable, all
taxes, general and special, permits, inspection and license fees, and
other public charges or assessments, whether of a like or different
nature, levied upon or assessed against the Premises and any buildings,
structures, fixtures or improvements now or hereafter located
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thereon, or arising in respect of the occupancy, use or possession of
the Premises, and which become, or installments of which become, due and
payable during the Lease Term or which may otherwise become the
obligation of Lessor in respect of the Lease Term. Where appropriate,
such charges shall be apportioned between Lessor and Lessee to account
for the commencement and termination of the Lease Term. Charges to be
paid by Lessee as additional rental shall include but not be limited to
the following:
a. Real estate taxes. Lessee shall pay all real estate taxes
imposed in connection with the demised Premises, including any
increase in such taxes whether by reason of an increase in
either the tax rate or the assessed valuation, or the assessment
or imposition of any tax on real estate not levied, assessed or
imposed at the commencement of the Lease Term, or for any other
reason.
b. Assessments. In the event of any assessment for public
betterments or improvements which may be levied on the Premises,
Lessee shall pay any such assessment or any installment thereof
due and payable at any time during the Lease Term. At Lessee's
option, Lessor shall take the benefit of the provisions of any
statute or ordinance permitting any such assessment to be paid
over a period of time, and Lessee shall be obligated to pay only
installments which shall become due and payable during the Lease
Term.
c. Rental taxes. Lessee shall pay Lessor an amount which would be
sufficient to yield a net monthly rental equal to that set forth
in Section 4, above, after payment by Lessor of any tax based or
levied upon or measured by such gross or net rental income now
or hereafter imposed on Lessor by the State of Washington, the
County of Spokane, or any political subdivision of either of the
foregoing.
d. Licenses and other taxes. Lessee shall be liable for and shall
pay for all licenses, excise fees, sales tax, use, business and
occupation taxes, together with any other taxes incurred in the
operation of its business. Lessee shall not permit any lien to
be filed against the Premises because or on account of any such
fee, license, tax or other charge.
e. Contest of liability. Lessee shall not be required to pay,
discharge or remove any tax (including penalties and interest),
tax lien, forfeiture or other imposition or charge upon or
against the Premises, or any part thereof, or the improvements
at any time situated thereon, so long as Lessee shall in good
faith contest the same or the validity thereof by appropriate
legal proceedings which shall operate to prevent the collection
of the tax, forfeiture, lien or imposition so contested, or the
sale of said Premises or any part thereof to satisfy the same.
Pending any such legal proceedings, Lessor shall not have the
right to pay, remove or discharge the tax, forfeiture, lien or
imposition thereby contested. Any proceeding or proceedings for
contesting the validity or amount of taxes, or other public
charges, or to recover back any tax or other imposition paid by
Lessee, may be brought by Lessee in the name of Lessor or in the
name of Lessee, or both, as Lessee may deem advisable. However,
if any such proceeding be brought by Lessee, Lessee shall
indemnify and hold Lessor harmless against any and all loss,
costs or expenses of any kind that may be imposed upon
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Lessor in connection therewith, and Lessor shall have the right,
at any time while such taxes remain unpaid, to demand and
receive a surety bond satisfactory to Lessor protecting Lessor
against loss arising out of such contested taxes, and Lessee
agrees to furnish such bond promptly on demand by Lessor.
f. Compliance. Lessee agrees to exhibit to Lessor on demand
receipts evidencing payment of all such taxes, assessments or
other charges to be paid by Lessee as additional rental. If
Lessee shall default in the payment of any taxes or public
charges required to be paid by Lessee, Lessor shall have the
right, in addition to all other remedies, to pay the same,
together with any penalties and interest, in which event the
amount so paid by Lessor shall be paid by Lessee to Lessor on
demand, together with interest thereon at the rate of fifteen
percent (15%) per annum.
6. Use of Premises. The Premises shall be used and occupied only as
combined office, manufacturing and for general business purposes, and
for no other purpose without the written consent of Lessor. Lessee
agrees that it shall not permit any act to be done on or about the
Premises that is unlawful or improper. Lessee shall not commit, or allow
to be committed, any waste, and shall not use or permit any part of the
Premises to be used for any illegal or immoral purpose or in any way as
to constitute a public or private nuisance. Lessee shall, at its own
expense, observe and comply with all laws, ordinances and regulations of
all duly constituted governmental authorities, and shall observe such
reasonable rules and regulations as may be adopted and published by
Lessor for the safety, care, cleanliness and benefit of the Premises,
and for the preservation of good order therein.
7. Utilities. Lessee shall be liable for and shall timely pay for all
utilities used on the Premises, including but not limited to heat,
lights, electricity, gas, water, sewage and garbage disposal service.
Lessee shall promptly reimburse Lessor for all such expenses mistakenly
charged to Lessor.
8. Maintenance and repair. During the Lease Term, Lessee shall, at is own
cost and expense, care for and maintain in good condition and repair the
foundations, exterior walls and roof, and all other exterior portions of
the building on the Premises. Lessee shall replace windows and other
glass cracked or broken as a result of forces from inside or outside the
building, and shall otherwise pay for and perform all other maintenance
necessary to keep the Premises in a good state of repair, reasonable
wear and tear excepted. Without limiting the generality of the
foregoing, Lessee shall, at Lessee's expenses, keep in good order,
condition and repair the heating, ventilating and air conditioning
system, boilers, elevators, doors, frames, moldings, locks and other
hardware, plumbing and any mechanical or electrical apparatus which
services or constitutes a fixture or part of the Premises. Lessee will
pay all licenses and fees for the maintenance, inspection and operation
of any parts of the Premises requiring the same. Lessee shall, at the
expiration or termination of the lease, surrender and deliver the
Premises to Lessor in as good condition as when received by Lessee from
Lessor, or as thereafter improved, reasonable wear and tear from normal
use with required maintenance excepted. Lessee shall repair any damage
to the Premises occasioned by Lessee's use thereof, or by the removal of
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Lessee's trade fixtures or equipment, which repairs shall include the
patching and filling of any holes and repair of any structural damage.
Lessee agrees to maintain all sidewalks on or appurtenant to the
Premises in a clean condition according to local ordinances under the
directions of appropriate governmental offices, at its own costs and
expense, and to keep such areas reasonably free and clean of foreign
objects, papers, debris, obstructions, standing water, snow and ice.
Lessee shall furnish its own janitorial service and shall keep the
Premises in a neat, clean and orderly condition and will operate the
same at all times in compliance with all state and local laws,
ordinances and regulations.
9. Alterations and improvements. Lessee shall, at its own expense, make all
repairs, modifications or alterations to the building on the Premises
that may be lawfully required pursuant to any Federal, state or
municipal law, ordinance or regulation. Lessee may from time to time and
at its own expense make repairs, replacements, additions, improvements,
alterations or changes necessary or appropriate for the proper and
suitable use of the building; provided, always, that such repairs,
modifications, replacements additions, improvements, alterations or
changes will not lessen the then value of the Premises, and shall be in
accordance with plans and specifications prepared by Lessee and
submitted to Lessor for approval, which approval shall not be
unreasonably withheld. The provisions of the preceding sentence with
respect to submitting plans and specifications to Lessor shall not apply
if the change to be made involves an expense of less than Five Thousand
Dollars ($5,000.00). As a condition to giving consent, Lessor may
require that Lessee remove any such alterations, improvements or
additions, including utility installations, at the expiration of the
Lease Term, and restore the Premises to its prior condition. If Lessor
shall fail to object to such plans and specifications within thirty (30)
days after such submission, the same shall be deemed approved. All work
shall be done in a good and workmanlike manner, and when completed by
free and clear of all claims for liens by mechanics or materialmen for
or on account of labor and materials furnished in and about such
operations. Nothing herein contained shall be construed to authorize or
empower Lessee to encumber the Premises with any kind or form of lien,
but such right of lien shall not exist, and this lease and its recording
or the recording of a memorandum hereof is intended as notice to any and
all persons doing work or labor or furnishing materials that none of
them shall have the right to a lien of any kind whatsoever upon the
Premises. Except as specifically provided herein otherwise, any
improvements made by Lessee shall become part of the Premises and owned
by Lessor upon termination of this lease. Lessee shall hold Lessor
harmless from any damage, loss or expense arising out of any work done
pursuant to this Section 9.
10. Lessor's access. Lessor and its agents shall have unrestricted access to
all portions of the Premises at all times for the purpose of examining
the condition thereof, or for the purpose of showing the Premises to
prospective purchasers, Lessees or lenders. Furthermore, in the event it
becomes necessary in order to preserve the Premises, Lessor may elect to
make necessary repairs, alterations or additions thereto, it being
understood, however, that such repairs, alterations or additions should
not be made by Lessor until having first served Lessee with notice of
the necessity of making the same, and Lessee shall have refused to
comply with such notice for a period of thirty (30) days. Lessee shall,
on demand, reimburse Lessor for all sums expended to make such needed
repairs, together with interest compounded daily at the rate of
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twelve percent (12%) per annum. No compensation shall be paid to or
claimed by Lessee from Lessor by reason of inconvenience, annoyance or
damage of any kind whatsoever arising from inspecting or showing the
Premises, or f making repairs, maintenance or alterations to the
Premises. Nothing herein shall be construed as an agreement on the part
of Lessor to make and repair or alteration whatsoever.
11. Signage. Lessee shall be entitled to place appropriate signage on the
Premises for purposes of identification and advertising, subject to the
prior written approval of Lessor, which shall not be unreasonably
withheld. All signage shall remain upon and be surrendered with the
Premises at the expiration of the Lease Term, subject to the right of
Lessee to remove the signage itself if it can be done without material
damage. However, as a condition to giving consent to improvements which
display signage, Lessor may require that Lessee remove the improvement
at the expiration of the Lease Term and restore the Premises to its
prior condition.
12. Liability and insurance. Lessee, at is sole cost and expense, agrees to
take out or cause to be taken out and maintained in force during the
Lease Term public liability insurance in responsible insurance companies
to protect Lessee and Lessor against liability to the public occasioned
through the use of or resulting from any accident occurring in, upon or
about the Premises. Such insurance shall be in the minimum amount of
Fifty Thousand Dollars ($50,000.00) for property damage, the minimum
amount of Five Hundred Thousand Dollars ($500,000.00) with respect to
the claim of one (1) person and One Million Dollars ($1,000,000.00) with
respect to the claims of two (2) or more persons. Lessor shall be named
as an additional insured on all such policies and Lessee shall furnish
Lessor with a certificate evidencing that Lessee has obtained or
provided for such a policy and that the insurance carrier has assumed
the liability of Lessee as required under this agreement.
a. Exoneration of Lessor. All personal property in and upon the
Premises shall be the sole risk of Lessee, and Lessor shall not
be liable for any damage, either to person or property sustained
by Lessee or any other person because of the use and occupancy
of the Premises, or on account of any act or omission of the
Lessee, its agents, employees, customers or patrons, or due to
the happening of any accident in connection with the use and
occupation of the Premises, unless such accident shall have been
occasioned by the negligence of the Lessor or its agents or
employees. Lessor shall not be liable for any damage to property
or person from any water, gas, smoke or electricity which may
leak from or flow from any part of the Premises or from the
pipes or plumbing works of same.
b. Indemnity of Lessor. Lessee agrees to indemnify and hold Lessor
harmless from and defend Lessor against any and all claims,
suits, demands, or judgments from any injury or damage to any
person or property, including loss of use thereof, whatsoever
arising out of the use or occupancy of the Premises by Lessee or
occasioned by the negligence of Lessee, its agents, employees,
sublessees, licensees or concessionaires, or of any other person
entering the Premises under the express or implied invitation of
Lessee, or arising out of any breach or default by Lessee in the
performance of its obligations hereunder.
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13. Casualty loss and insurance. At all times during the term of this lease,
Lessee will keep or cause to be kept, at its own expense, the building
and other improvements now existing or hereafter erected on the
Premises, insured against the risks covered by the uniform standard from
of fire insurance policy with extended coverage endorsement, in an
amount sufficient to prevent Lessor or Lessee from becoming a co-insurer
within the terms of applicable policies, but in any event in an amount
of not less than the full replacement insurable cost thereof. Lessee's
obligation under the preceding sentence shall be deemed to have been
fully performed if the insurance is based upon the standard valuation
letter issued by the insuring company or its agent. All insurance
policies maintained pursuant to this clause shall be carried in favor of
Lessor, Lessee and any mortgagee of the Premises as their interests may
appear. The originals of all such policies and renewals shall be
retained by Lessee, and duplicate originals or suitable insurance
certificates shall be delivered to Lessor and any mortgagee of the
Premises.
a. Insurable restoration. If at any time after the commencement of
the term of this lease any of the improvements on the Premises
shall be damaged or destroyed by any of the perils covered by
the type of insurance policy described in this Section 13, this
lease shall continue in full force and effect, and Lessee shall
promptly, and at its sole expense, repair and restore the
improvements on the Premises to substantially the condition in
which the same existed prior to the casualty. The proceeds of
such insurance policy shall be disbursed to Lessee as
construction progresses to be used for the purpose of repairing
and restoring the Premises as herein provided.
b. Insurable reconstruction. If the building shall be damaged or
destroyed to such an extent that the construction of an entirely
new building shall be required or be advisable, Lessor may elect
either to terminate this lease or require the Lessee to erect,
with reasonable diligence, a suitable replacement building, in a
good and workmanlike manner, at its sole cost and expense, in
compliance with all requirements of law and governmental rules
and regulations, and in accordance with plans and specifications
which shall be approved by Lessor. Such new building shall not
be of substantially cheaper poorer or weaker character or
construction that the building so destroyed. Lessor shall give
written notice to Lessee of its election within sixty (60) days
after the occurrence of such casualty.
c. Uninsurable damage or destruction. If the improvements on the
Premises are substantially damaged or destroyed as a result of
any cause or peril not covered by the type of insurance policy
described in this Section 13, either party shall have the option
of terminating this lease or of repairing or rebuilding the
building; provided, however, that Lessee shall not have the
option if such damage or destruction is due to the negligence of
Lessee or any of its agents or employees. Within sixty (60) days
after such damage or destruction, each party shall notify the
other of such party's intentions.
d. Insufficient or excessive insurance proceeds. If for any reason
whatsoever Lessee has failed to keep and maintain insurance in
the amounts required by the Section 13, Lessee agrees to supply
all such additional funds as may be necessary for the repair,
restoration or rebuilding of the Premises as required by this
Section 13. In any other case, Lessee's obligation to
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rebuild and repair under this Section 13 shall be limited to the
extent of the net insurance proceeds available to Lessee for
restoration or reconstruction. If the insurance proceeds are in
excess of the amount used by Lessee to replace, repair or
restore the Premises, such excess sums shall inure to the
benefit of Lessee.
e. Abatement of rent. In no event shall the minimum annual rental
abate hereunder by reason of any damage or destruction, unless
the Lease Term is terminated by mutual agreement of the parties
or at the option of either party as provided in Section 13.
14. Miscellaneous insurance provisions. All insurance of any kind required
to be maintained by Lessee under this lease shall be governed by the
following provisions:
a. Qualifications. All insurance shall be issued as a primary
policy for a period of not less than one (1) year, by insurance
companies authorized to do business in the State of Washington
and with a financial rating of at least an A status as rated in
the most recent edition of Best's Insurance Reports. Policies
shall contain an endorsement requiring twenty (20) days' written
notice from the insurance company to both parties and any
mortgagee of the Premises before expiration, cancellation or
change in the coverage, scope or amount of any policy.
b. Waiver of subrogation. Lessor and Lessee hereby mutually release
each other and their respective officers, employees, agents and
representatives from all claims and liabilities for loss or
damage to any person or to the Premises or any property in or on
the Premises, that are caused by or result from risks insured
against under any insurance policy in force at the time of any
such loss or damage, whether or not such loss or damage shall be
caused by the negligence of either party or their agents. Each
insurance policy required under this lease shall provide that
the insurance company waives all right of recovery by way of
subrogation against either party in connection with any loss or
damage covered by such policy.
c. Proof. The originals of all insurance policies and renewals may
be retained by Lessee, but duplicate originals or suitable
insurance certificates shall be delivered to Lessor and any
mortgagee of the Premises. Not less than twenty (20) days prior
to the expiration of any policy of insurance, Lessee will
deliver to Lessor a renewal or new policy to take the place of
the policy expiring.
d. Failure to maintain insurance. If Lessee shall fail to furnish
insurance policies as provided in this lease, or to deliver said
policies and renewals or certificates thereof or binders pro
tempore as provided herein, or to pay any premium on such
insurance, Lessor may procure such insurance or pay the premium
therefor, or both, and such amounts shall immediately become due
to Lessor payable upon demand by Lessor, together with interest
compounded daily at the rate of twelve percent (12%) per annum.
e. Combination insurance. With respect to insurance coverage
required under this lease, should Lessee desire to carry such
coverages so as to apply to the Premises together with other
property owned or controlled by Lessee, its parent or affiliated
companies, customary and
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proper certificates of the insurance carrier in each instance,
as to such insurance coverage, delivered to Lessor and any
mortgagee of the Premises shall be deemed sufficient proof of
compliance with Lessee's insurance obligations under this lease,
as to both original coverage and renewals, provided that such
certificate shall show that the parties insured are Lessee,
Lessor, and any mortgagee of the Premises, as their interest may
appear.
15. Condemnation. In the event that all or any portion of the 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, the following provisions shall
apply:
a. Total condemnation. If the entire Premises shall be acquired or
condemned by eminent domain, then the term of this lease shall
cease as of the date title or possession shall be transferred in
such proceedings, whichever date shall first occur, and all
rentals shall be paid up to that date and Lessee shall have no
claim against Lessor for the value of any unexpired term of this
lease.
b. Partial condemnation. If a substantial part of the Premises
shall be acquired or condemned by eminent domain, the whole
determination of which shall be in the reasonable discretion of
Lessor, then the term of this lease and all rights and
obligations thereunder shall cease and terminate as of the date
of transfer of title or possession in such proceeding, whichever
date shall first occur. All rentals shall be paid up to that
date and Lessee shall have no claim against Lessor for the value
of any unexpired term of this lease. In the event of a partial
taking or condemnation which is not extensive enough to be
determined by Lessee as substantial, this lease shall continue
in full force and effect. To the extent that funds are paid to
Lessor out of award in condemnation, they will be used by Lessor
to promptly restore the Premises insofar as possible to a
condition comparable to the time before such condemnation, less
the portion lost in taking.
c. Damages. In the event of any condemnation or taking as
hereinabove provided, whether whole or partial, Lessee shall not
be entitled to any part of the award, as damages or otherwise,
for such condemnation, and Lessor is to receive the full amount
of such award. Lessee hereby expressly waives any claim or right
to any part thereof. Although all damages in the event of any
condemnation are to belong to Lessor whether or not such damages
are awarded as condemnation for the diminution of value in the
leasehold or to the fee of the Premises, Lessee shall have the
right to claim and recover from the condemning authority, but
not from Lessor, such compensation as may be separately awarded
on recoverable by Lessee in the Lessee's own right on account of
any and all damage to Lessee's business by reason of the
condemnation and for and on account of any costs or loss to
which Lessee might be put in removing the furniture, fixtures
and equipment.
16. 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
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hereunder and such failure shall continue for a period of twenty
(20) days after written notice thereof to Lessee.
b. Failure of Lease Terms. Lessee shall fail to comply with any
term, provision or covenant of this lease, and shall not cure
such failure within thirty (30) days after written notice
thereof to Lessee.
c. Financial difficulties. Lessee shall: (i) become insolvent, or
shall make a transfer in fraud of creditors, or shall make an
assignment for the benefit of creditors; (ii) 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 or any guarantor of
Lessee's obligations under this lease shall be adjudged bankrupt
or insolvent in proceedings filed against Lessee; or (iii) have
a receiver or trustee appointed for all the Premises or for all
or substantially all of the assets of Lessee.
d. Abandonment. Lessee shall desert or vacate the Premises.
17. Remedies upon default. In addition to any of the remedies Lessor may
have at law or in equity, upon the occurrence of any event of default
Lessor shall have the option to pursue any one or more of the following
remedies without any notice or demand whatsoever:
a. Continuation of lease. Lessor may continue this lease in full
force and effect, and the lease will continue in effect as long
as Lessor does not terminate Lessee's right to possession, and
Lessor shall have the right to collect rent when due. During the
period Lessee is in default, Lessor may enter the Premises and
relet it, or any part of it, to third parties for Lessee's
account. Lessee shall pay to Lessor the rent due under this
lease on the dates the rent is due, less the rent Lessor
receives from any reletting.
b. Removal. Lessor may enter upon and take possession of the
Premises and expel or remove Lessee and any other person who may
be occupying the Premises or any part thereof, without being
liable for prosecution or any claim 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.
c. Termination. Lessor may terminate this lease, in which event
Lessee shall immediately surrender the Premises to Lessor, and
if Lessee fails to do so, Lessor may, without prejudice to any
other remedy which it may have for possession or arrearages in
rent, enter upon and take possession of the Premises and expel
or remove Lessee and any other person who may be occupying the
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.
18. Lease end. Lessee shall, upon the expiration or sooner termination of
this lease, peacefully
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vacate the Premises and remove all goods and effects not belonging to
Lessor in a manner which avoids material injury to the Premises, and
will deliver to Lessor the Premises free and in good, neat, clean and
sanitary condition in all respects, except for reasonable wear and tear
and damage not caused by any act or omission of Lessee, its employees,
agents, customers, licensees or concessionaires. Lessee shall surrender
keys for the Premises to Lessor and shall inform Lessor of all
combinations, locks, safes and vaults, if any, in the Premises. Any
damage to the Premises occasioned by removal of Lessee's goods and
effects shall be repaired and paid for by Lessee.
a. Removal of fixtures. At the end of the term of this lease, or
any extension or renewal thereof, Lessor will permit the removal
of all fixtures of the Lessee placed by it in or on the
Premises, including exterior signs, except those fixtures
permanently affixed to the real estate or those which cannot be
removed without permanent injury to said real estate. If Lessee
shall fail to remove any of its property of any nature
whatsoever from the Premises at the termination of this lease,
or when Lessor has the right of re-entry, Lessor may, at its
option, remove and store said property without liability for
loss thereof or damage thereof, except as a result of Lessor's
negligence, such storage to be for the account, and at the
expense, of Lessee. If Lessee shall not pay the cost of storing
any such property after it has been stored for a period of
thirty (30) days or more, Lessor may, at its option, sell or
permit to be sold, any or all of such property at public or
private sale, in such a manner and at such times and places as
Lessor, in its sole discretion, may deem proper, upon ten (10)
days' prior notice to Lessee. The proceeds of sale shall be
applied in order of priority: (i) to the cost and expense of
such sale, including reasonable attorneys' fees; (ii) to the
payment of the costs or charges for storing any such property;
(iii) to the payment of any other sums of money which may then
be, or thereafter become, due Lessor form Lessee under any of
the terms hereof; (iv) the balance, if any, to Lessee. Except as
specifically provided herein, all erections, alterations,
additions and improvements to the Premises, whether temporary or
permanent in character, which may be made upon the Premises
either by Lessor or Lessee, shall be the property of Lessor and
shall remain upon and be surrendered with the Premises as a part
thereof at the termination of this lease, without compensation
to Lessee.
b. Holdover. If Lessee, with the consent (expressed or implied) of
the Lessor, shall holdover after the expiration of the Lease
Term, the Lessee shall remain bound by the terms, covenants and
agreements hereof, except the tenancy will be one from month to
month.
c. Sale of Premises. The voluntary or involuntary sale or other
disposition of the Premises by Lessor shall not terminate or in
any way affect the validity of this lease.
19. Renewal options. Providing that Lessee is in compliance with all of the
terms, covenants and conditions of this lease, Lessor agrees that Lessee
shall have the option to renew this lease for one (1) additional period
of five (5) years beyond the initial term hereof at a rental to be
agreed upon and otherwise upon the same terms and conditions as set
forth herein. Written notice of the exercise of a renewal option shall
be given by Lessee to Lessor at least ninety (90) days prior to the
expiration of the term of this lease. If the parties hereto cannot agree
on a rental for the renewal term prior to thirty (30) days before the
commencement thereof, then the same is to be
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submitted to arbitration in accordance with Section 29.
20. Assignment and subletting. Lessee shall not assign or in any manner
transfer this lease or any estate or interest therein, or sublet the
Premises or any part thereof, or grant a license, concession or other
right of occupancy of any portion of the Premises, without the prior
written consent of Lessor. Consent by Lessor to one or more assignments
or sublettings shall not operate as a waiver of Lessor's rights as to
any subsequent assignments and sublettings. The acceptance of rent from
any person other than Lessee shall not be deemed to have waived any of
the provisions of this paragraph or to be a consent to the assignment of
this lease or the subletting of the Premises, and shall not relieve
Lessee from its obligations hereunder. Every permitted assignee shall
become such upon the express condition that it become and remain
responsible for the provisions of this lease. Notwithstanding any
assignment or subletting, Lessee and any guarantor of Lessee's
obligations under this lease shall at all times remain fully responsible
for compliance with all of its other obligations under this lease. For
the purpose of this lease, the sale, conveyance, lease, assignment,
transfer, pledge, encumbrance or other transaction which changes, or
might result in a change, of any ownership of stock in the Lessee, or
control of the assets of Lessee, shall be deemed an assignment within
the meaning of this lease. Any merger, dissolution, reorganization or
other corporate change modifying the control of Lessee shall be deemed
an "assignment" which cannot be accomplished without the prior written
consent of Lessor. Any assignment, sublease, mortgage, pledge or other
encumbrance of Lessee's interest in this lease or in the Premises
without the prior written consent of the Lessor shall be void.
21. Subordination. This lease shall at all times be subject, subordinate,
and inferior in lien with respect to any first mortgage or deed of trust
that may be placed upon the Premises or any part thereof given by Lessor
to any institutional or individual lender, and the recording of such
mortgage or deed of trust shall be deemed prior in lien to this lease,
irrespective of the date of recording of such mortgage, and Lessee will,
upon demand, execute any instrument necessary to effectuate such
subordination; provided, however, that such subordination shall not
affect Lessee's right to possession, use and occupancy of the Premises
so long as Lessee shall not be in default under any of the terms and
conditions of this lease.
22. Triple net lease. It is the intention of the parties, and this lease is
to be so construed that during the term of this lease Lessor shall not
be obligated to pay any charges, expenses, taxes or costs of any sort
whatsoever arising out of or in connection with ownership of the
Premises, the maintenance thereof, the use and occupation thereof by
Lessee, or the payment of rent by Lessee to Lessor, all of which are to
be borne by Lessee alone. However, this provision shall not be construed
to supersede explicit provisions regarding damage to the Premises and
condemnation of the Premises, set forth in Sections 13 and 15,
respectively.
23. Relationship of parties. 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 the 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
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parties hereto, shall be deemed to create any relationship between the
parties hereto other than the relationship of Lessor and Lessee.
24. Time of essence. Time is declared to be of the essence of this entire
lease, notwithstanding that as to some provisions it may expressly be
provided that time is of the essence. However, whenever a period of time
is herein prescribed for action to be taken by Lessor or Lessee, the
parties 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, shortages of labor or materials, war
governmental laws, regulations or restrictions of any other causes of
any kind whatsoever which are beyond the reasonable control of the
parties.
25. Nonwaiver. No failure of Lessor to insist upon the strict performance of
any provision of this lease shall be construed as depriving Lessor of
the right to insist upon strict performance of such provision or any
other provisions in the future. No waiver by Lessor of any provision of
this lease shall be deemed to have been made unless expressed in writing
and signed by Lessor. No acceptance of rent or of any other payment by
Lessor from Lessee after any default by Lessee shall constitute a waiver
of any such default or any other default. Consent by Lessor in one
instance shall not dispense with the necessity of consent by Lessor in
any other instance.
26. Notices. All notices, requests, demands and other communications which
are required or may be given under this lease shall be in writing and
shall be deemed to have been duly given if delivered personally or sent
by certified mail, return receipt requested, postage prepaid, addressed
to the last known post office address of the party to be notified.
27. Consent. Any consent which may be required for any action of Lessee
shall not be unreasonably withheld. In determining the acceptability of
a proposed assignee or subtenant, the continued liability of Lessee
under the lease shall not be considered as a factor. In addition to
other criteria which landlord may deem relevant, the assignee or
subtenant must meet the minimal requirement of being compatible with
other tenants sharing common areas, if any, and shall have good credit
standing, the financial ability and business experience necessary to
perform this lease, and Lessor may require that the owners of a
closely-held business assignee personally guarantee the performance of
this lease.
28. Attorneys' fees and costs. Should any action be commenced to enforce any
of the terms of this lease, or to cancel this lease, or to collect any
rentals due hereunder, the prevailing party in such action shall be
entitled to recover reasonable attorneys' fees and costs from the other
party.
29. Arbitration. If any dispute shall arise under this lease, the parties
hereto agree to submit the matter to arbitration. Such arbitration shall
be conducted, before three (3) arbitrators, unless the Lessor and the
Lessee agree to one (1) arbitrator. Said arbitrators shall be designated
by the American Arbitration Association and said arbitration shall be
held in accordance with the rules of such Association. The arbitrators
designated and acting under this lease shall make their award in strict
conformity with such rules and shall have no power to depart from or
change any of the
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provisions hereof. Expenses of the arbitration proceedings conducted
hereunder shall be borne equally by the parties.
30. Integration and modification. This lease constitutes the entire
agreement between the parties pertaining to the subject matter contained
herein, which alone fully and completely expresses their agreement, and
the same is entered into after full investigation, neither party relying
on any statement or representation, not embodied in this lease, made by
the other. No change shall be effective unless in writing and signed by
both parties.
31. Construction and venue. The provisions of this lease shall be
interpreted and enforced in accordance with the laws of the State of
Washington, and venue shall lie in Spokane County. If a court of
competent jurisdiction rules invalid or unenforceable any of the
provisions of this lease, the remainder shall nevertheless be given full
force and effect. The captions are for convenience and reference only,
and they shall not define, limit or construe the contents of any
provision. Except where the context indicates otherwise, words in the
singular number shall include the plural, and vice versa, and words in
the masculine, feminine or neuter gender shall include each other gender
as well.
32. Benefit and burden. This lease shall be binding upon and inure to the
benefit of the parties, their heirs, legal representatives, successors
and assigns.
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IN WITNESS WHEREOF, the parties have executed this lease, effective on the day
and date first written above.
JUBILATION ENTERPRISES, LLC, a Washington limited
liability company, Lessor
DATE: 8/24/00 /s/
------------------ -------------------------------------------------
BILL B. WILLIAMS, JR., Member
DATE: 8/24/00 /s/
------------------ -------------------------------------------------
JUDITH A. WILLIAMS, Member
TELECT, INC., a Washington corporation, Lessee
DATE: 8/24/00 /s/
------------------ -------------------------------------------------
WAYNE E. WILLIAMS, President and Chief
Executive Officer
STATE OF WASHINGTON )
) ss.
County of Spokane )
I certify that I know or have satisfactory evidence that BILL B.
WILLIAMS, JR. signed this instrument, on oath stated that he was authorized to
execute the instrument and acknowledged it as Member of JUBILATION ENTERPRISES,
LLC, to be the free and voluntary act of such limited liability company for the
uses and purposes mentioned in the instrument.
Dated:
---------------------
-----------------------------------------
Print Name:
------------------------------
Notary Public in and for the State
of Washington, residing at Spokane
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My commission expires:
-------------------
STATE OF WASHINGTON )
) ss.
County of Spokane )
I certify that I know or have satisfactory evidence that JUDITH A.
WILLIAMS signed this instrument, on oath stated that she was authorized to
execute the instrument and acknowledged it as Member of JUBILATION ENTERPRISES,
LLC, to be the free and voluntary act of such limited liability company for the
uses and purposes mentioned in the instrument.
Dated:
---------------------
-----------------------------------------
Print Name:
------------------------------
Notary Public in and for the
State of Washington, residing
at Spokane
My commission expires:
---------------------------------
STATE OF WASHINGTON )
) ss.
County of Spokane )
I certify that I know or have satisfactory evidence that WAYNE E.
WILLIAMS signed this instrument, on oath stated that he was authorized to
execute the instrument and acknowledged it as the President and Chief Executive
Officer of TELECT, INC., to be the free and voluntary act of such corporation
for the uses and purposes mentioned in the instrument.
Dated:
---------------------
-----------------------------------------
Print Name:
------------------------------
Notary Public in and for the
State of Washington, residing
at Spokane
My commission expires:
---------------------------------
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SCHEDULE I
TRIPLE NET LEASE
Legal Description
That portion of HOMESTEAD INDUSTRIAL PROPERTIES, a Binding Site Plan, as per
plat recorded in Volume 1 of Binding Site Plans, page 1, records of Spokane
County, described as follows:
BEGINNING at the Southwest corner of said Binding Site Plan;
Thence North 03(degrees)17'39" West 214.00 feet to the True Point of Beginning;
Thence North 87(degrees)03'56" East parallel with Mission Avenue a distance of
648.58 feet to the West R/W line of Molter Road;
Thence North 03(degrees)17'39" West along said R/W line a distance of 442.87
feet to the beginning of a curve concave to the East with a radius of 55.00 feet
with a radial bearing of South 43(degrees)21'51" West through said point;
Thence Northwesterly through a central angle of 86(degrees)41'01" an arc
distance of 83.21 feet;
Thence North 03(degrees)17'39" West a distance of 121.89 feet;
Thence South 87(degrees)03'56" West a distance of 50.00 feet;
Thence South 42(degrees)03'56" West a distance of 56.06 feet;
Thence South 87(degrees)03'56" West a distance of 558.68 feet to the West line
of said Binding Site Plan;
Thence South 03(degrees)17'39" East along said West line a distance of 600.61
feet to the True Point of Beginning;
Situate in the County of Spokane, State of Washington.
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SCHEDULE II
TRIPLE NET LEASE
Site Plan
18
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SCHEDULE III
TRIPLE NET LEASE
Elevation
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================================================================================
TRIPLE NET LEASE
August 24, 2000
Between
JUBILATION ENTERPRISES, LLC, A WASHINGTON LIMITED LIABILITY COMPANY,
as Lessor;
and
TELECT, INC., A WASHINGTON CORPORATION,
as Lessee.
================================================================================
