Document:

Exhibit 10.39

EXHIBIT 10.39

 

COMMERCIAL LEASE AGREEMENT

THIS LEASE
AGREEMENT, made this 14th day of November, 2014 by and between TNT
BUSINESS COMPLEXES L.L.C. hereafter referred to as "Lessor and Dave
Carlson / Enterprise Focus Inc. hereinafter referred to as
"Lessee", is made in consideration of the mutual promises and
covenants hereinafter set forth:

WITNESSETH:

Description. Lessor hereby leases to Lessee, and
Lessee hereby rents from Lessor, a portion of that certain building located
at'474 Highline Dr. East Wenatchee, WA Building C  of the Lessor
containing approximately 2200 square feet located in Douglas County,
Washington.

1.   Business Purpose. The premises are to be used for the purposes of
Data
Center Lessee agrees that Lessee will not use said premises for any other
purpose without written consent, and Lessor agrees said consent will not be
unreasonably withheld.

2.   Term. The term of this lease shall be for 5 years, commencing
on the first day of December 2014 and terminating on the last day of November
2019 Lessee shall have the option to extend this lease for one 5 year term
by providing Lessee with thirty (30) day written notice of said intent.

3.   Rent. Lessee agrees to
pay Lessor the sum of $1525.00 per month rental for the first 12
months and increases to $1650.00 per month for the remaining 4
years, in advance, payable on the 1st day of each month during the first 5
years of the lease. If rental payment is submitted after the 10th of
the month a 12% late payment penalty shall be added for the payment that is
due.

Any installment or rent required to be paid hereunder which
shall be in default for a period of thirty (30) days shall be considered
delinquent and a service charge of ten (10) percent per month thereafter shall
be paid Lessor in addition to the rental installments due.

4.   Repairs and Upkeep. Lessee agrees to
accept the property in "as-is" condition. Lessee will at all times
keep the premises in as neat, clean and sanitary condition as when received
from Lessor, and Lessee will replace any glass or windows or doors that may be
cracked or broken, except for reasonable wear and tear and damage by fire or
other unavoidable casualties. Lessee will at all times preserve said premises
in as good of repair as when received reasonable wear and tear accepted. All
repairs shall be at Lessee's sole cost and expense, except outside walls, roof
and foundation. Lessee agrees upon the expiration or sooner termination of this
Lease, Lessee will quit and surrender said premises without notice, and in as
neat and clean of condition when received, and will surrender up all keys
belonging to said premises to the Lessor or Lessor's agents. Lessee agrees to
store any and all toxic materials in a manner consistent with the requirements
of the United States Government, the State of Washington and
 
 

COMMERCIAL LEASE
AGREEMENT -2

Douglas County with regard to storage and disposition to toxic
wastes as said requirements may be established by statute rule or regulation.
Lessee further agrees to, at Lessee's cost, clean up any and all toxic waste or
damage, which may be done to the property as a result of Lessee's use.

5.     Trade Fixtures. Lessee will not make or allow to be made
any alterations of said premises, or any part thereof, without the written
consent of Lessor first had and obtained, Lessor agreeing that said consent
will not be unreasonably withheld. Any additions to or alterations of, the said
premises, except movable furniture and trade fixtures, shall become at once
part of the realty and belong to Lessor. It is intended that the construction,
alterations and repairs done to the premises belong to the Lessor and that
trade fixtures, furniture and other additions which are not part of the
structure of the building, caused to be done by Lessee, remain the property of
the Lessee, provided that Lessee agrees to repair or pay for the repair of any
damage which is done to the building or any part thereof by the removal of
trade fixtures by Lessee or Lessee's agent.

6.     Abandonment. Lessee shall not vacate or abandon the
premises at anytime during the primary or renewal terms hereof unless otherwise
provided herein, and if Lessee shall abandon, vacate or surrender said premises
to be dispossessed by process of the law; or otherwise, any personal property
belonging to Lessee left upon the premises may, at Lessor's option, be placed
in storage, Lessee agreeing to pay reasonable storage costs associated with
said storage.

7.     Repairs
of Structure. Lessor agrees at his sole cost and expense to keep and maintain the
building in which the premises is located, including water lines, waste lines,
or drain, exterior walls, roof, outside doors in a good and sanitary condition
and repair, provided that, Lessee agrees to reimburse Lessor for the costs
associated with the removing any blockage to said drain lines resulting from
the discharge from Lessee's business. It is agreed between the parties and
intended, however, that Lessee is responsible for maintaining sinks, faucets,
toilets, or any other fixtures above the waste lines or drains. It is further
understood that the Lessee is responsible for keeping those waste lines and
drains clear and free from obstructions caused by waste or other matter coming
from Lessee's premises. Lessor shall be responsible for the maintenance and
upkeep of the ceiling of the premises. Lessor's responsibility and liability
with respect to said ceiling shall be limited to the repair and maintenance of
the ceiling and Lessor shall not be liable for any damages or claims arising
from the disrepair of said ceiling resulting in any damage to Lessee's
equipment, furnishing or business; provided, however, in the event the ceiling
damage is the result of Lessor's failure to maintain the roof and the roof has
leaked causing said damage to ceiling and/or property of Lessee, then
Lessor shall have liability for said consequences.

8.     Liens caused by
Lessee. Lessee shall keep
the demised premises and the property on which the demised premises are
situated, free from liens arising out of any
 
 

COMMERCIAL LEASE
AGREEMENT -3

work performance,
materials, or obligations incurred by Lessee, and agrees to hold Lessor harmless and indemnify Lessor from any such
claims or liens.

9.   Municipal Law. Lessee shall at
his sole cost and expense comply with the requirements of Municipal, State, and
Federal authorities now in force or which may hereafter be in force, pertaining
to said premises, and shall faithfully observe, in the use of the premises, all
Municipal ordinances and State and Federal statues now in force or which may
hereafter be in force. A judgment of any Court of competent jurisdiction or the
admission of Lessee in any action or proceeding against Lessee, whether Lessee
be a party thereto or not, that Lessee has violated any such ordinances or
statute in the use of the premises, shall be conclusive of the fact as between
Lessor and Lessee. The Lessee shall not use the premises for any illegal
purpose.

10. Insurance Coverage. Lessor shall at his
expense, during the primary and any or all renewal terms of this lease, keep
and maintain insurance on the building and all other improvements on said
leased premises in an amount not less than the full insurable value of said
building and improvements, which policy of insurance shall insure against fire
and other casualty covered by a standard fire policy with an endorsement for
extended coverage. Said fire insurance policy shall be acquired and thereafter
maintained in Lessor's name with Lessee as additional insured and loss payee.

Lessee shall at his expense, during the primary and renewal
terms of this Lease, keep and maintain insurance on all of the Lessee's
personal property situated inside the building on said leased premises.

If any activity of
the Lessee or any stock of goods maintained or personal property kept on the
premises by Lessee shall cause an increase in the fire insurance carried by
Lessor, then Lessee promises and agrees to pay the increase in any insurance
premiums paid by Lessor.

Lessee shall during the entire term of the
Lease, keep in full force and effect a policy of public liability and property
damage insurance with respect to the premises, and the businesses operated on
the premises by the Lessee. Lessee's policy limits for public liability shall
not be less than $100,000 per person and $300,0000 per accident and for the
property damage liability shall not be less than $200,000 per accident. The
policy shall name the Lessor as well as the Lessee as insured and shall contain
a clause that the insurer will not cancel or change the insurance without
giving Lessor at least ten (10) days prior written notice. Such insurance shall
be with a reputable insurance company admitted to do practice in the State of
Washington, and Certificates of Insurance shall be delivered to the Lessor.

Access. Lessee shall allow
Lessor or Lessor's agents free access at all reasonable times to said premises
for the purpose of inspection of or making repairs, additions or alterations to
the premises or any property owned by or under the control of Lessor; but this
right shall not be construed as an agreement on the part of Lessor to make any
repairs other than those mentioned above. The Lessor shall
 
 

COMMERCIAL
LEASE AGREEMENT -4

have
the right to place and maintain "For Rent" signs in a conspicuous
place on said premises for
sixty (60) days prior to the expiration of this Lease.

11.  Utilities. Lessor shall provide
for and pay for sewer and water. Lessee shall provide and pay for electricity,
and other utilities necessary for Lessee's operation of the premises.

12. Destruction by Fire
or Other Casualty. In the event of a partial destruction of the said
premises during the said term, from any cause, Lessor shall forthwith repair
same, provided such repairs are made within sixty (60) days under the laws and
regulations of State, Federal, County or Municipal authorities but such partial
destruction shall in no way annul or void this Lease, except that Lessee shall
be entitled to a proportionate deduction to be based upon the extent to which
the making of such repairs shall interfere with the business carried on by
Lessee in the said premises. If such repair cannot be made in sixty (60) days,
Lessor may, at his option, make same within a reasonable time, this Lease
continuing in full force and effect and the rent to be proportionately rebated
as aforesaid in this paragraph provided. In the event that Lessor does not so
elect to make such repairs that cannot be made in sixty (60) days, or such repairs
cannot be made under such laws or regulations, this Lease may be terminated at
the option of either party. Upon the happening of any damage or destruction of
any portion of the Lessee's premises, the Lessee shall give written notice to
the Lessor of such damage. Lessor agrees to notify Lessee in writing within
fifteen (15) days of his notification of the partial destruction, as to
whether or not the Lessor shall make repairs by reason of the damage. Lessor
shall make all repairs as promptly as possible. In the event that the building
in which the leased premises may be situated be destroyed to the extent of not
less than fifty (50%) percent of the replacement cost thereof, Lessor or
Lessee may elect to terminate this lease, whether the leased premises are
injured or not. A total destruction of the building in which the said premises
may be situated shall terminate this Lease. In the event of any dispute between
the Lessor and Lessee relative to the provisions of this paragraph, they shall
each select a third arbitrator and the three (3) arbitrators so selected shall
hear and determine the controversy, within fifteen (15) days, and their
decision thereon shall be final and binding upon both Lessor and Lessee, who
shall bear the costs of such arbitration equally between themselves.

13. Breach by Insolvency. Either (a) the appointment of a receiver
to take possession of all or substantially all of the assets of the Lessee, or
(b) a general assignment by Lessee for the benefit of creditors, or
(c) any action taken or suffered by Lessee under any insolvency or bankruptcy
act shall constitute a breach of this Lease by Lessee.

Waiver of Subrogation. For and in
consideration of the execution hereof by each of the parties, each party does
herein release and relieve the other, and waive his entire claim of recovery
against the other for loss or damage to property arising out of or incident to
fire, lighting and the perils included the extended coverage endorsement, in,
on or about the said premises, even though caused by the negligence or any of
said parties, their agents or employees or otherwise.
 
 

COMMERCIAL LEASE AGREEMENT
-5

Lessor and Lessee agree to
maintain insurance which will allow for the release and waiver specified above.
This agreement shall be inapplicable if it would have the effect, but only to
the extent that it would have the effect, of invalidating any insurance
coverage of the Lessor or Lessee.

14. Notice. Any notice required to be served in
accordance with the terms of this Lease shall be sent by certified mail, with
return receipt requested, delivered to addressee only, the notice from the
Lessee to be sent to Lessor or Lessor's agent, at 380 Leslie Way, East
Wenatchee, WA 98802 and any notice from the Lessor to be sent to Lessee at
6780
Osprey Lane Cashmere, WA / 1250 N Wenatchee  Ave Suite H #147 Wenatchee, WA
98801 

15. Government Fees. Any fees or licenses due the City,
County, or State on account of any inspection made on said leased premises on
account of any business or activity run by Lessee or allowed by Lessee to be
done on the leased premises shall be paid by Lessee.

16. Default
and Re-entry. Time is of the essence of this agreement. Lessee shall be in default
under this Lease if (1) he abandons or vacates the premises prior to the
expiration of the term without written consent of Lessor; (2) fails to pay the
monthly rental as it becomes due; (3) fails to perform and abide to the terms
and conditions of the Lease; (4) or file voluntary bankruptcy proceedings or
has involuntary proceedings instituted against him. Provided, however, Lessor
shall notify the Lessee in writing of any breach of the provisions of this
Lease and Lessee shall have thirty (30) days within which to correct the
defaults from the date of receipt of the notice. In the event of any breach of
this lease by Lessee or Lessor, having given a thirty (30) day notice to Lessee
to cure the breach, besides other rights or remedies he may have, shall have
the right to re-enter and may remove all persons and property from the premises
and such property may be removed and stored in a public warehouse or elsewhere
at a cost of and for the account of Lessee. Should Lessor elect to re-enter, as
herein provided, or should he take possession pursuant to any notice provided
by law, he may either terminate this Lease, or he may from time to time,
without terminating this Lease, re-let said premises or any part thereof for
the un-expired portion of their primary or renewal term upon reasonable terms
and conditions; upon such re-letting Lessee shall be immediately liable to pay
to Lessor, in addition to any indebtedness other than rent due hereunder the
amount, if any, by which the unpaid rent is reserved in this lease for the
primary or renewal term exceeds the amount to be paid under the re-letting
agreement as rent for the demised premises for the un-expired portion of said
primary or renewal term. In the event that Lessee chooses to remedy any
defaults Lessee shall also be liable to Lessor for any attorney fees incurred
by way of sending notice to Lessee of any default.

17. Mutual
Cancellation. The voluntary or other surrender of this Lease by Lessee, or a mutual
cancellation thereof shall not work a merger, and shall, at the option of
Lessor, terminate all or any existing subleases or sub-tenancy or may, at the
option of Lessor, operate as an assignment to him of any or all such subleases
or sub-tenancies.
 
 

COMMERCIAL LEASE AGREEMENT -6

18.  Attorney's Fees and Costs. It is mutually agreed and understood that
in the event it shall become necessary to employ
attorneys to enforce the provisions of this Lease, party found in default shall
reimburse the prevailing party its reasonable attorney's fees and court costs.
It is agreed between the parties that the venue and jurisdiction of any legal
action between the parties shall be laid in Chelan County, State of Washington.

19.  Non-waiver of Breach. The failure of the Lessor to insist upon
strict performance of any of the covenants and agreements of this Lease, or to
exercise any option herein conferred in any one or more circumstances, shall
not be construed to be a waiver or relinquishment of any such, or any other
covenants or agreements, but the same shall be and shall remain in full force.

20. 
Heirs and
Successors. Subject to
the provisions herein pertaining to assignments and sub-letting, the covenants
and agreements of this Lease shall be binding on the heirs, legal
representatives, successors and assigns of any or all of the parties hereto.

21. 
Holdover. If the Lessee shall, with the written
consent of Lessor, hold over after the expiration of the term of this Lease,
such tenancy shall be for an indefinite period of time on a month-to-month
tenancy, which may be terminated as provided by the laws of the State of
Washington. During such tenancy Lessee agrees to pay Lessor the same rate of
rental as would be required during an extended term in the event this Lease is
extended, and to be bound by all other terms, covenants and conditions as
herein specified, so far as applicable.

22. 
Personal Property
Taxes. Lessor shall pay
the Real Estate Property Tax. Lessee shall be responsible and pay any and all
taxes and assessments caused by reason of his business or by reason of the
stock of goods or other personal property kept on the premises.

IN WITNESS WHEREOF, the parties hereto have executed this Lease
the day and the year first above written.

 

Addendum

Any and all additions,
upgrades and expenses to Building C are the sole responsibility of the lessee
unless otherwise agreed upon in writing. Any and all additions, ventilation
openings and upgrades to Building C will require permission from TNT Business
Complexes LLC, repair estimates and a refundable deposit for the repair of all
upgrades before each is started. All building and electrical permits shall be
acquired before doing any upgrades. The return of deposit shall be dispersed by
TNT Business Complexes to tenant as repairs are accomplished at the end of
lease. All lease requirements shall be met at end of occupancy for the complete
damage deposit to be returned.Exhibit 10.40

EXHIBIT 10.40

 

Law Offices of Mark D. Waldron, PLLC

	
	MARK D. WALDRON
	
	 

	
	   (mark@mwaldronlaw.com)
	
	6711 Regents Blvd. W., Suite B

	 	
	Tacoma, WA 98466

	
	Paralegals:
	
	 

	
	DIANA L. ATKINS
	
	Telephone:253.565.5800

	
	   (diana@mwaldronlaw.com)
	
	website: mwaldronlaw.com

	
	TERESA J. VANNICE
	
	 

	
	   (teresa@mwaldronlaw.com)
	
	 

October 21, 2019 

SENT BY CERTIFIED MAIL; RETURN RECEIPT REQUESTED

Mr. Kelly Thompson 

TNT Business Complexes, LLC 

380 Leslie Way 

East Wenatchee, WA 98802 

Re: In re Giga Watt, Inc., Case No. 18-03197, U.S. Bankruptcy Court for the
Eastern District of Washington (the “Bankruptcy Case”); 
Waldron v. Carlson, et al., Case No. 19-80012, pending in
the Bankruptcy Case (the “Adversary Proceeding”) 

Dear Mr. Thompson: 

     Reference is made to that certain
Order Granting Preliminary Injunction, dated June 5, 2019, entered in the above-referenced Adversary Proceeding [AP ECF No. 70] (the “Preliminary Injunction”). Reference is further made to that certain 
Commercial Lease Agreement, dated November 14, 2014 between TNT Business Complexes LLC and Dave Carlson / Enterprise Focus, Inc. (the
“TNT Building C Lease”). 

     Pursuant to the authority that the Preliminary Injunction granted to me, as Trustee, and further pursuant to the option right set forth in Paragraph 2 of the TNT Building
C Lease, I hereby exercise the option to extend the TNT Building C Lease for one five (5) year term. The exercise of this option extends the term of the TNT Building C Lease from December 1, 2019 to December 1, 2024.

 

Mr. Kelly Thompson / TNT Business Complexes, LLC 

Re: Giga Watt, Inc. 

October 21, 2019; Page 2 

     This letter satisfies the 30-day notice requirement and the manner of notice requirements set forth in Paragraphs 2 and 14 of the TNT Building C Lease.

	Very truly yours,
	 
	 
	 
	 
	/s/ Mark D. Waldron,
	Mark D. Waldron, Chapter 11 Trustee
	for the Estate of Giga Watt, Inc.

MDW/dla 

cc: Jason Piskel, Esq. 

      Pamela M. Egan, Esq.

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