Exhibit 10.1
AMENDMENT TO LEASE
BY AND BETWEEN
SANDWITH FAMILY LLC
AND
MIKRON WASHINGTON LLC
This Amendment to Lease (this “Amendment”) is made and entered into as of the
27th day of January, 2010 by and between Sandwith Family LLC, a Washington
limited liability company ( “Landlord”) and Mikron Washington LLC, a Washington
limited liability company (“Tenant”). Unless otherwise defined herein,
capitalized terms used in this Amendment shall have the meanings set forth in
the Mikron Leases (as defined below).
RECITALS
A. Pursuant to that certain Lease between Mikron Industries, Inc. (Tenant’s
predecessor in interest) and W.R. Sandwith (Landlord’s predecessor in interest)
dated July 1, 1994, as amended by those certain Amendments to Lease dated
November 4, 1994, May 19, 1995, May 10, 2000, June 9, 2004, and December 9, 2004
(as amended, the “Lease”), Lessee leases space consisting of approximately
25,000 square feet in the Lot 21 Distribution Building located at 1166 6th
Avenue North, Kent, Washington, more particularly described on Exhibit A-1,
attached hereto. A copy of the Lease is attached hereto as Exhibit A.
B. The Lease, together with that certain Lease between Mikron 1034 Joint Venture
and Mikron Industries, Inc. dated November 26, 1979, as amended, and that
certain Lease between 1034 Joint Venture and Mikron Industries, Inc. dated
May 3, 1989, as amended, are collectively referred to herein as the “Mikron
Leases”.
C. The premises depicted in Exhibit A-1 are referred to herein as the “Leased
Premises”.
D. Tenant assumed its interest in the Mikron Leases by assignment from Mikron
Industries, Inc. Landlord consented to the Assignment by that certain Letter
Agreement dated June 22, 2006.
E. The Lease expires by its terms on March 1, 2010. Landlord and Tenant desire
now to amend the Lease to extend its term, on the following terms and
conditions.

 

 

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NOW, THEREFORE, in consideration of the above recitals which by this reference
are incorporated herein, the mutual covenants and conditions contained herein
and other valuable consideration, the receipt and sufficiency are hereby
acknowledged, Landlord and Tenant agree as follows:
AMENDMENT
1. Term Extension. The term of the Lease is hereby extended for a period of five
(5) years (the “Extended Term”), commencing March 1, 2010 and terminating
February 28, 2015, unless sooner terminated in accordance with its terms.
Throughout the Extended Term, the Leased Premises shall be subject to the terms
and conditions of the Lease, except as expressly modified by this Amendment.
2. Early Termination Option. Tenant shall have the one-time option to terminate
the Lease effective August 31, 2010 by giving Landlord written notice in the
manner required under the Lease of such termination on or before May 31, 2010
(the “Early Termination Notice Date”). If Tenant gives such notice by the Early
Termination Notice Date, the Lease shall terminate on August 31, 2010. If Tenant
fails to timely give notice by the Early Termination Notice Date, this paragraph
shall be null and void and the Lease shall continue in full force for the
remainder of the Extended Term, unless sooner terminated in accordance with its
terms.
3. Extended Term Rent. The fixed monthly rental charge (the “Monthly Rent”) due
under the Lease during the Extended Term shall be as follows:

                              March 2010–     September 2010–     March 2013–  
    August 2010     February 2013     February 2015  
Shop Area 25,000 sq. ft.
  $9,250.00 per month   $9,712.50 per month   $10,101.00 per month
Total
  $9,250.00 per month   $9,712.50 per month   $10,101.00 per month

4. Operating Expenses. Tenant shall pay to Landlord as additional rent, Tenant’s
share of Operating Expenses due under the Lease. Notwithstanding anything to the
contrary contained in the Lease, Tenant’s share of Operating Expenses incurred
in connection with the ownership and maintenance of the Leased Premises shall be
equal to 100 percent of all reasonable and necessary expenses actually incurred
by Landlord for the operation, cleaning, maintenance, repair, and management of
the buildings, walkways, drive-ways, parking and loading areas, lawns, and
landscaping appurtenant to the Leased Premises.
5. Renewal.
5.1 Provided there is no existing uncured material default of Tenant under any
of the Mikron Leases, if Tenant desires to continue leasing the all of the
premises leased under the Mikron Leases (or all of the premises leased under
those Mikron Leases which are then in effect) for a period beyond the Extended
Term (such period being the “Renewal Term”), Tenant shall give Landlord written
notice on or before February 28, 2014 of its desire to negotiate a Renewal Term.
In response to such notice, Landlord shall within twenty (20) days provide
Tenant with notice of Landlord’s desired term and Monthly Rent for the Renewal
Term; provided that the Monthly Rent for the Renewal Term (i) shall be the fair
market rental value of the Leased Premises upon commencement of the Renewal
Term, (ii) shall in no event be less than the Monthly Rent due during the month
immediately prior to the commencement of the Renewal Term and (iii) shall in no
event escalate more than fifteen percent (15%) during any five consecutive years
of the Renewal Term. In determining the fair market rental value of the Leased
Premises, consideration shall be given to the then current market rate for
similar properties in the general vicinity of the Leased Premises with similar
lease provisions.

 

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5.2 If the parties do not agree upon the Monthly Rent for the Leased Premises
during the Renewal Term by June 15, 2014 (the “Trigger Date”), either party may
demand that the Monthly Rent be determined by arbitration. In such case, the
parties shall endeavor to select a mutually agreeable arbitrator within ten
(10) days after such demand. If the parties are unable to agree on an arbitrator
within such 10-day period, either party may seek appointment of an arbitrator by
the Chief Judge of the Superior Court of King County, Washington. Within
fourteen (14) days after the arbitrator’s appointment, each party shall submit
its estimate of the fair market rental value of the Leased Premises along with
any documentary evidence that it may have to support its estimate. Within
fourteen (14) days after the arbitrator’s receipt of each party’s estimate and
evidence (if any), the arbitrator shall select the estimate that he or she
determines is closest to the actual fair market rental value of the Leased
Premises. The arbitrator’s determination of the estimate that is closest to the
actual fair market value of the Leased Premises shall be completed no later than
September 15, 2014 and shall be final and binding. The cost of the arbitrator
shall be shared equally by Landlord and Tenant. In no event shall the fair
market rent for the Leased Premises be less than the Monthly Rent due during the
last month prior to the Renewal Term.
5.3 If the parties have not executed a fully integrated written agreement for
lease of the Leased Premises during the Renewal Term on or before August 31,
2014, then Landlord shall be entitled to freely market the Leased Premises and
show the Leased Premises to prospective tenants. Landlord agrees not to market
the Leased Premises before this time unless Tenant notifies Landlord that Tenant
does not intend to pursue the Renewal Term.
6. Hazardous Materials.
6.1 Tenant warrants and agrees that any and all Hazardous Substances (as defined
below) used by Tenant on the Leased Premises shall be used in strict accordance
with all applicable laws, regulations, and orders of governmental authorities.
Tenant shall maintain all permits required for its operations, including those
for the use, storage, or disposal of Hazardous Substances. Tenant warrants that,
as of the date of this Amendment, Tenant has no knowledge of (i) any notices of
violation or potential or alleged violation of any Environmental Law (as defined
below) from any governmental agency in connection with Tenant’s use of the
Leased Premises; (ii) any inquiry, investigation, enforcement, removal or other
governmental or regulatory actions instituted or threatened relating to
Hazardous Substances at the Leased Premises; or (iii) any claims made or
threatened by any third party against Tenant or the Leased Premises relating to
any Hazardous Substances at the Leased Premises. Should Tenant receive notice of
(i), (ii), or (iii) above, Tenant agrees to notify Landlord immediately in
writing and provide Landlord with a copy of such notice.
6.2 Upon the expiration or earlier termination of either the 1979 Lease and 1989
Lease, as the case may be, Tenant shall remove from the Leased Premises any
trade fixtures, furnishings and/or equipment associated with the use, storage,
or disposal of Hazardous Substances and perform any closure work, investigation,
and environmental remedial work required by applicable law, ordinance,
regulation, or permit by any governmental authority having jurisdiction. Removal
and disposal of any and all such equipment or fixtures shall be performed in
strict accordance with all applicable laws, regulations, and government orders.

 

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6.3 Tenant shall indemnify, defend, and hold Landlord and Landlord’s officers,
directors, employees, agents, successors and assigns free and harmless from and
against any and all claims relating to the death or injury of any person or
damage to any property whatsoever arising from or caused, directly or
indirectly, by (i) the use, storage, disposal, release, or generation of
Hazardous Substances by Tenant or Mikron Industries, Inc. in, under or about the
Leased Premises occurring after December 31, 2004 (the “Transfer Date”) and
(ii) any failure by Tenant or Mikron Industries, Inc. to comply with any
Environmental Law after the Transfer Date. The indemnification obligations set
forth in this Subsection 6.3 shall survive the expiration or earlier termination
of the 1979 Lease and the 1989 Lease. Notwithstanding any conflicting provision
of either the 1979 Lease or the 1989 Lease, Tenant shall not owe Landlord any
defense or indemnity obligations under this Section 6 with respect to (a) any
use, storage, disposal, release, or generation of Hazardous Substances in,
under, or about the Leased Premises prior to the Transfer Date or (b) any
violation of Environmental Law prior to the Transfer Date.
6.4 “Hazardous Substances” shall mean any chemical, compound, material, mixture
or substance that is now or hereafter defined or listed in, or otherwise
classified pursuant to, any Environmental Law (as hereinafter defined) as a
“hazardous substance,” “hazardous material,” “hazardous waste,” “extremely
hazardous waste,” “infectious waste,” “toxic substance,” “toxic pollutant” or
any other formulation intended to define, list, or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, or toxicity, including any petroleum, natural gas or natural
gas liquids, asbestos, radon, and those substances listed in the United States
Department of Transportation Table (49 CFR 172.101, as amended). “Environmental
Law” shall mean any present and future federal, state and local law (whether
under common law, statute, rule, regulation or otherwise), requirement under any
permit issued with respect thereto, and other requirements of governmental
authorities having jurisdiction thereunder relating to the protection of human
health or the environment, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601, et seq.), as heretofore or hereafter amended, and the Model
Toxics Control Act as enacted and amended from time to time by the State of
Washington.
7. Improvements to the Leased Premises. Tenant accepts the Leased Premises in
its present condition on an “as-is, where-is” basis.
8. Surrender. At the expiration or sooner termination of the Lease, Tenant shall
surrender the Leased Premises in clean warehouse shell condition, reasonable
wear and tear excepted. Prior to the expiration or sooner termination of the
Lease, Tenant shall disassemble and remove from the Leased Premises all trade
fixtures, equipment, and other property situated therein and restore and repair
any damage to the Leased Premises occasioned by such removal. If Tenant shall
fail to remove its trade fixtures or other property as provided in this
paragraph, such fixtures and other property shall become the property of
Landlord, or at Landlord’s option, may be removed by Landlord at Tenant’s
expense. Tenant’s obligations under this paragraph shall survive the expiration
or termination of the Lease.

 

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9. Estoppel. Tenant shall, from time to time, upon written request of Landlord,
execute, acknowledge and deliver to Landlord or its designee a written statement
specifying the following, subject to any modifications necessary to make such
statements true and complete: (i) the date the lease term commenced and the date
it expires; (ii) the amount of minimum monthly rent and the date to which such
rent has been paid; (iii) that the Lease is in full force and effect and has not
been assigned, modified, supplemented or amended in any way; (iv) that the Lease
represents the entire agreement between the parties; (v) that all conditions
under the Lease to be performed by Landlord have been satisfied; (vi) that there
are no existing claims, defenses or offsets which the Tenant has against the
enforcement of the Lease by Landlord; (vii) that no rent has been paid more than
one month in advance; (viii) that no security has been deposited with Landlord
(or, if so, the amount thereof); and (ix) such other factual matters concerning
the Lease or the Leased Premises as Landlord may reasonably request. Any such
statement delivered pursuant to this Section may be relied upon by a prospective
purchaser of Landlord’s interest or assignee of any mortgage or new mortgagee of
Landlord’s interest in the Leased Premises. If Tenant shall fail to respond
within ten (10) days of receipt by Tenant of a written request by Landlord as
herein provided, Tenant shall be deemed to have admitted the accuracy of any
information supplied by Landlord to a prospective purchaser or mortgagee. Tenant
hereby acknowledges that Landlord holds no security or other type of deposit in
connection with the Leased Premises.
10. Miscellaneous.
10.1 This Amendment sets forth the entire agreement between the parties with
respect to the matters set forth herein. There have been no additional oral or
written representations or agreements.
10.2 Except as herein modified or amended, the provisions, conditions, and terms
of the Mikron Leases shall remain in full force and effect.
10.3 In the case of any inconsistency between the provisions of the Mikron
Leases and this Amendment, the provisions of this Amendment shall govern and
control.
10.4 This Amendment shall be construed and enforced in accordance with the laws
of the State of Washington.

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment on the
_____ day of _______________, _____.

            LANDLORD:

Sandwith Family LLC, a Washington limited
liability company
      By:           Name:           Its: Manager  

            TENANT:

Mikron Washington LLC, a Washington limited
liability company
      By:           Name:           Its: Manager  

 

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STATE OF WASHINGTON )
   
 
  ) ss. 
COUNTY OF
  ) 

I certify that I know or have satisfactory evidence that                      is
the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute the
instrument and acknowledged it as the Manager of Mikron Washington LLC, a
Washington limited liability company, to be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated: _____ _____, 2010

                 
 
                          Notary Public        
 
  Print Name                         My commission expires    
 
               
 
               
 
               
 
               

(Use this space for notarial stamp/seal)

     
STATE OF WASHINGTON )
   
 
  ) ss. 
COUNTY OF
  ) 

I certify that I know or have satisfactory evidence that                      is
the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that they were authorized to execute the
instrument and acknowledged it as the Manager of Sandwith Family LLC, a
Washington limited liability company to be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated: _____ _____, 2010

                 
 
                          Notary Public        
 
  Print Name                         My commission expires    
 
               
 
               
 
               
 
               

(Use this space for notarial stamp/seal)

 

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