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EXHIBIT 10.1
OFFICE BUILDING
TRIPLE NET LEASE
FEBRUARY 28, 1990
Between
BILL B. WILLIAMS, JR. and JUDITH A. WILLIAMS, husband and wife,
as Lessor,
and
TELECT, INC., a Washington corporation,
as Lessee.
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OFFICE BUILDING
TRIPLE NET LEASE
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C> <C>
1. Premises 1
2. Commencement date 1
3. Term 1
4. Monthly rental 1
5. Additional rental 1
6. Use of premises 3
7. Utilities 3
8. Maintenance and repair 3
9. Alterations and improvements 4
10. Lessor's access 4
11. Common areas 4
12. Liability and insurance 5
13. Casualty loss and insurance 6
14. Miscellaneous insurance provisions 7
15. Condemnation 8
16. Events of default 8
17. Remedies upon default 9
18. Lease end 9
19. Renewal options 10
20. Assignment and subletting 10
21. Subordination 11
22. Triple Net lease 11
23. Relationship of parties 11
24. Time of essence 11
25. Nonwaiver 11
26. Notices 12
27. Consent 12
28. Attorneys' fees and costs 12
29. Arbitration 12
30. Integration and modification 12
31. Construction and venue 12
32. Benefit and burden 12
</TABLE>
Schedules: I Site plan
II Building elevation
III Legal description
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OFFICE BUILDING
TRIPLE NET LEASE
THIS TRIPLE NET LEASE is made and entered into by and between BILL B. WILLIAMS,
JR. and JUDITH A. WILLIAMS (hereinafter together called "lessor"), husband and
wife; and TELECT, INC., (hereinafter called "lessee"), a Washington corporation;
effective on the 28 day of February, 1990.
WHEREAS, lessor owns real property upon which it intends to construct an office
building with adjacent common parking areas; and
WHEREAS, lessee wishes to lease and occupy said building upon its completion;
NOW, THEREFORE, 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 ten and under the conditions hereinafter set forth, that
certain parcel of real property (hereinafter called "premises")
constituting the footprint of the office building (hereinafter called
"building") to be constructed at North 2111 Molter Road, Liberty Lake,
Washington, in accordance with the site plan and elevation attached
hereto as Schedules I and II, respectively, on that tract of land
(hereinafter called "tract") legally described in the attached Schedule
III, including all structures and fixtures upon said premises and all
easements and other rights appurtenant to said premises, including but
not limited to nonexclusive rights to ingress, egress, and parking in
adjacent common areas.
2. Commencement date. The lease term shall commence at 12:01 a.m. on the
date (hereinafter called commencement date") that a certificate of
occupancy is issued for the building.
3. Term. The term of this lease shall be for the period of eighty-four
(84) months commencing on the commencement date; 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.
4. Monthly rental. Lessee shall, during the lease term, pay to lessor at
East 23003 Euclid, Otis Orchards, Washington 99027, 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 the amount
of Eighteen Thousand Two Hundred Dollars ($18,200.00). 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 ten; 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 become
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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 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 ten 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
tent.
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 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
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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 an
office 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 ten, lessee shall, at its 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 expense, 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
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 officers, 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.
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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 be
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 leased 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 free 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 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
of making repairs, maintenance or alterations to the premises. Nothing
herein shall be construed as an agreement on the part of lessor to make
any repair or alteration whatsoever.
11. Common areas. As used herein, the ten "common areas" is defined to
include all areas and facilities outside the premises, but within the
tract legally described in the attached Schedule III, that are provided
and designated by lessor from time to time for the general nonexclusive
use of lessee, lessor and his other tenants and their respective agents,
employees, suppliers, shippers, customers and invitees, including
parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways and landscaped areas.
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a. Taxes and assessments. Lessee agrees to pay as additional rental
all taxes, assessments and other charges set forth in Section 5
hereof and incurred in respect of the common areas.
b. Maintenance. Lessee agrees to maintain the common parking area,
landscaping, sprinkler system and other such improvements located
on the common areas at its own cost and expense, said maintenance
to include keeping the common parking area reasonably free and
clear of foreign objects, papers, debris, obstructions, standing
water, snow and ice, and further to maintain the striping of
parking spaces thereon.
c. Signage. Lessee shall be entitled to place appropriate signage in
common areas for purposes of identification and advertising,
subject to the prior written approval of lessor, which shall not
be unreasonably withheld. All improvements placed in common areas
for purposes of displaying signage shall become a part of the
common areas and 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 common area to its prior condition.
d. Parking area. Lessor agrees to provide a common parking area
reasonably appurtenant to the premises designed to accommodate no
less than fifty (50) vehicle parking spaces for parking by
vehicles no larger than full-size passenger automobiles or
pickup trucks.
e. Cost sharing. Lessor shall require that any other tenant sharing
the common areas with lessee and leasing not less than ten
thousand (10,000) square feet of space from lessor shall
proportionately share the taxes, assessments and maintenance
expenses incurred in respect of common areas, by reimbursement to
lessee, based on the ratios of square footage leased by lessee
and other tenants required to share such costs.
12. Liability and insurance. Lessee, at its 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 and the common areas. 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 at 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
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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.
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 form
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 tent 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 than 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 this
option if such damage or destruction is due to the negligence of
lessee or any of its agents or employees.
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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 this 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 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
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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 property 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
interests 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 tent 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 tent 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 ten 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 or
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 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
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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 said 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.
b. 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 said
premises or any part thereof, without being liable for
prosecution for any claim or damages therefor; and lessee agrees
to pay to lessor on demand the amount of all loss and damage
which lessor may suffer by reason of such termination.
18. Lease end. Lessee shall, upon the expiration or sooner termination of
this lease, peacefully 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
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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 from lessee under any of the tens 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.
d. Notice to vacate. Lessee covenants and agrees to give lessor
notice of any intention it may have to vacate the premises prior
to expiration of the initial lease term at least six (6) months
prior to the date lessee intends to vacate.
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 two (2) additional periods
of five (5) years each 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 tent prior to thirty (30) days before the
commencement thereof, then the same is to be 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
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obligations hereunder. Every permitted assignee shall become such upon
the express condition that it become and remain responsible for the
payment of rent and the full performance of the remaining 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 and liable for the payment of the rent herein
specified and for compliance with all of its other obligations under
this lease. For the purposes of this lease, the sale, conveyance, lease,
assignment, transfer, pledge, encumbrance or other transaction which
changes, or might result in a change, 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 tile 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 and common areas, 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 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 or 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 provision in the future. No waiver by lessor of any provision of
this lease shall be deemed to have been made unless expressed in
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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 y 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 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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<PAGE> 15
IN WITNESS WHEREOF, the parties have executed this lease, effective on the day
and date first written above.
DATE:
-------------- ------------------------------------
Bill B. Williams, Jr., Lessor
DATE:
-------------- ------------------------------------
Judith A. Williams, Lessor
TELECT, INC., a Washington
corporation, Lessee
DATE: By:
-------------- ---------------------------------
Bill B. Williams, Jr., President
and Chief Executive Officer
DATE: By:
-------------- ---------------------------------
Judith A. Williams, Secretary/
Treasurer
STATE OF WASHINGTON )
) ss.
County of Spokane )
I certify that I know or have satisfactory evidence that BILL B. WILLIAMS, JR.
signed this instrument and acknowledged it to be his free and voluntary act, for
the uses and purposes mentioned in the instrument.
DATED: February 28, 1990.
-----------------------------------
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane.
My appointment expires: 2-23-93
13
<PAGE> 16
STATE OF WASHINGTON )
) ss.
County of Spokane )
I certify that I know or have satisfactory evidence that JUDITH A. WILLIAMS
signed this instrument and acknowledged it to be her free and voluntary act, for
the uses and purposes mentioned in the instrument.
DATED: February 28, 1990.
-----------------------------------
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane.
My appointment expires: 2-23-93
14
<PAGE> 17
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 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: February 28, 1990.
-----------------------------------
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane.
My appointment expires: 2-23-93
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 the Secretary/Treasurer of TELECT, INC., to be
the free and voluntary act of such corporation, for the uses and purposes
mentioned in the instrument.
DATED: February 28, 1990.
-----------------------------------
NOTARY PUBLIC in and for the State
of Washington, residing at Spokane.
My appointment expires: 2-23-90
15
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OFFICE BUILDING Schedule I
TRIPLE NET LEASE
Site Plan
16
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OFFICE BUILDING Schedule II
TRIPLE NET LEASE
Building Elevation
17
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Schedule III
OFFICE BUILDING
TRIPLE NET LEASE
Legal Description
PARCEL "E"
A parcel of land in the Southeast Quarter of Section 10, Township 25 North,
Range 45 E.W.M. described as follows:
BEGINNING at the Southeast corner of said Section 10; thence South
87(degrees)03'56" West along the South line of the Southeast Quarter of
said Section 10, a distance of 708.58 feet; thence North
03(degrees)17'39" West a distance of 1129.61 feet to the true point of
beginning; thence North 03(degrees)17'39" West a distance of 255.00
feet; thence North 87(degrees)03'56" East a distance of 558.68 feet;
thence North 42(degrees)03'56" East a distance of 56.06 feet; thence
North 87(degrees)03'56" East a distance of 50.00 feet to a line parallel
with and 60.00 feet, West of the centerline of Molter Road, as said
centerline is shown on the final plat of HOMESTEAD TRADE CENTER, as per
plat thereof recorded in Volume 15 of Plats, page 9; thence South
03(degrees)17'39" East along said parallel line a distance of 294.64
feet; thence South 87(degrees)03'56" West a distance of 648.58 feet to
the true point of beginning.
Situate in the County of Spokane, State of Washington.
PARCEL "F"
A parcel of land in the Southeast Quarter of Section 10, Township 25 North,
Range 45 E.W.M., described as follows:
BEGINNING at the Southeast corner of said Section 10; thence South
987(degrees)03'56" West along the South line of said Southeast Quarter
of Section 10 a distance of 708.58 feet; thence North 03(degrees)17'36"
West a distance of 1384.61 feet to the true point of beginning; thence
North 03(degrees)17'39" West a distance of 190.00 feet; thence North
87(degrees)03'56" East a distance of 249.44 feet; thence North
59(degrees)53'21" East, a distance of 43.79 feet; thence North
87(degrees)03'56" East a distance of 359.03 feet to a point on a
non-tangent curve concave to the West having a radius of 440.00 feet (to
which a radial line bears North 82(degrees)47'00" East and said curve
being parallel with and 60.00 feet West of the centerline of Molter
Road, as said centerline is shown on the final plat of HOMESTEAD TRADE
CENTER, as per plat thereof recorded in Volume 15 of Plats, page 9);
thence Southerly along said curve through central angle of
03(degrees)55'21" an arc distance of 30.12
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<PAGE> 21
feet; thence South 03(degrees)17'39" East parallel with and 60.00 feet
West of said centerline of Molter Road a distance of 140.26 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 true point of
beginning;
Situate in the County of Spokane, State of Washington.
PARCEL "G":
A parcel of land in the Southeast Quarter of Section 10, Township 25 North,
Range 45 E.W.M. described as follows:
BEGINNING at the Southeast corner of said Section 10, thence south
87(degrees)03'56" West along the South line of said Southeast Quarter of
Section 10 a distance of 708.58 feet; thence North 03(degrees)17'39"
West a distance of 1574.61 feet to the true point of beginning; thence
North 87(degrees)03'56" East a distance of 249.44 feet; thence North
59(degrees)53'21" East a distance of 43.79 feet; thence North
87(degrees)03'56" East a distance of 359.03 feet to a point on a
non-tangent curve concave to the West having a radius of 440.00 feet (to
which a radial line bears North 82(degrees)47'00" East, and said curve
being parallel with and 60.00 feet West of the centerline of Molter
Road, as said centerline is shown on the final plat of HOMESTEAD TRADE
CENTER, as per plat thereof recorded in Volume 15 of Plats, page 9);
thence Northerly along said curve through a central angle of
22(degrees)53'14", an arc distance of 175.76 feet; thence North
30(degrees)06'14" West parallel with and 60.00 feet West of said
centerline of Molter Road a distance of 147.86 feet to the Southerly
margin of the former Chicago, Milwaukee, St. Paul and Pacific Railroad
right of way; thence South 59(degrees)53'21" West along said Southerly
margin a distance of 599.00 feet to a point which bears North
03(degrees)17'39" West from the true point of beginning;
Situate in the County of Spokane, State of Washington.
19
