Document Moscow_doc_bc3c3ddeb6

COMMERCIAL LEASE AGREEMENT The parties hereto are MAGYAR INVESTMENTS, INC., an Idaho Corporation, 106 Flint Street, Moscow, Idaho, 83843 (herein called "Magyar"), and CITY OF MOSCOW, IDAHO, a municipal corporation of the State of Idaho, 206 East Third Street, Moscow, Idaho, 83843 (herein called "City"). The parties intend to enter into a six year commercial lease agreement, potentially followed by the sale by Magyar and purchase by City of the leased premises. The parties desire to set the terms and conditions of the Lease as of this date. Magyar shall lease and sell to City, and the City shall lease from Magyar that real property (herein called Premises, which term includes all buildings, improvements and fixtures now on or hereafter placed on such real property), situated in Latah County, Idaho, and described as follows: Lots 21, 22, 23 and 24, Block B, Lieuallen's Second Addition to the City of Moscow, as shown by the recorded plat thereof, and commonly known as 201 Notth Main Street, Moscow, Idaho 83843. Each and every term and condition of the Commercial Lease Agreement is dependent upon each and every other term and condition. COMMERCIAL LEASE AGREEMENT PAGE I OF 16 2007-52 ---PAGE BREAK--- COMMERCIAL LEASE AGREEMENT SUMMARY OF LEASE TERMS The following summarizes significant lease terms only and shall not be construed as altering, modifying or amending the text of the Lease Agreement. In the event of a conflict between the terms summarized herein and the Lease Agreement, the provisions as set forth in the text of the Lease Agreement shall control in all respects. LANDLORD/SELLER: TENANT/BUYER: PREMISES: ANNUAL BASE RENT SECURITY DEPOSIT: TERM OF LEASE: Commencement Date: Expiration Date: COMMERCIAL LEASE AGREEMENT Magyar Investments, Inc., an Idaho Corporation Federal Tax ID _ _ _ _ _ _ _ _ Contact Person: Robert M. Magyar Address for Notices: P.O. Box 8074 Moscow, ID 83843 Telephone (208) 882-1906 Facsimile (208) 882-1908 City of Moscow Federal Tax ID Contact Person: Address for Notices: Moscow, Idaho 83843 Telephone _ Facsimile _ 201 N. Main Street (see Attachment A) Moscow, Idaho 83843 Approx. 4550 square feet $51,440 NNN (triple net), as adjusted $ 4,286.66 per month, as adjusted $4,286.00 _ 6 Years December 1, 2007 November 30, 2013 PAGE 2 OF 16 ---PAGE BREAK--- TRIPLE NET BUILDING LEASE AGREEMENT 1. PARTIES. The parties hereto are Magyar Investments, Inc., an Idaho Corporation, 106 Flint Street Moscow, Idaho, 83843 (herein called "Landlord"), and City of Moscow, Idaho, a municipal corporation of the State of Idaho, 206 East Third Street, Moscow, Idaho, 83843 (herein called "Tenant"). 2. AGREEMENT. It is mutually agreed by and between the parties hereto as follows: 3. LEASE OF PROPERTY. Landlord for and in consideration of the rent, covenants, and conditions hereinafter contained to be kept and performed by Tenant, does hereby lease to Tenant the property located at 201 North Main Street, Moscow, Idaho 83843. The Premises leased to Tenant (herein called Premises), consists of approximately 4550 square feet, and is more particularly described as: Lots 21, 22, 23 and 24, Block B, Lieuallen's Second Addition to the City of Moscow, as shown by the recorded plat thereof. 4. CONDITION OF PROPERTY. At the commencement of the term of this Lease, Tenant accepts the building, Premises, improvements, and any equipment on or in the leased premises, in their existing condition. No representation, statement, or warranty, express or implied, has been made by or on behalf of Landlord as to such condition, or as to the use that may be made of such property. In uo event shall Landlord be liable for any defect in such property or for any limitation on its use. 4.1 Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the Premises or the Building housing the Premises or with respect to the suitability or fitness of either for the conduct of Tenant's business or for any other purpose. 4.2 The taking of possession of the leased property by Tenant shall be conclusive evidence that Tenant accepts the same "as is" and that the Leased Property and the building of which the same form a part were in good condition at the time possession was taken. 5. TERM. The term of this Lease shall be for six years. The term shall commence on December 1, 2007, and end on November 30, 2013, both dates inclusive. 6. RENT/PAYMENTS. Subject to the non-appropriation provisions of this Lease and subject to the readjustment provisions herein, Tenant shall pay to Landlord the annual base rent of fifty one thousand four hundred forty dollars ($51 ,440) in lawful money of the United States, in equal installments of four thousand two hundred eighty six and sixty six one/hundredths dollars ($4,286.66), on the first day of each month throughout the term of this Lease, commencing on December 1, 2007. The rent shall be payable at the address of Landlord as set forth herein, or at such other place as Landlord may designate in writing. 6.1 Tenant shall pay a late penalty of twenty dollars ($20) per day for each day rent remains unpaid for any month beginning on the fifteenth (15th) day of each such month. COMMERCIAL LEASE AGREEMENT PAGE 3 OF 16 ---PAGE BREAK--- 6.2 Upon the execution of this Lease by Tenant. Tenant shall pay to Landlord the sum of four thousand two hundred eighty six and no one/hundredths dollars ($4,286.00) as a damage/cleaning/ security deposit. Such deposit shall secure Tenant's performance of all terms and conditions of this Lease, and secure the payment of rent. Such deposit shall be available to Landlord in addition to any and all other rights available to Landlord by law and as provided herein. 6.3 All charges, costs and expenses which Tenant is required to pay hereunder, together with all interest and penalties that may accrue thereon in the event of Tenant's failure to pay such amounts, and all damages, costs and expenses which Landlord may incur by reason of any default of Tenant or failure on Tenant's part to comply shall be immediately paid by Tenant upon demand by Landlord, and in the event of non-payment by Tenant, Landlord shall have all the rights and remedies with respect thereof as Landlord has for the non-payment of the basic rent. 6.4 Tenant shall pay and indemnify Landlord against all legal costs and charges, including counsel fees lawfully and reasonably incurred, with or without suit, incurred by Landlord in enforcing any covenant of Tenant herein contained, or for any default by Tenant, or for service of any Notices of Default to Tenant hereunder. 6.5 Tenant shall also be required to pay the following expenses related to the Leased Premises: all power, electric, gas, phone and other utilities charged to the premises. 6.6 The annual base rent amount of fifty one thousand four hundred forty dollars (S51,440) due in equal installments, may be adjusted based upon an increase of property tax collected from Landlord. Such annual base rent amount shall increase only to the same extent that the property taxes on the Premises are increased. Any increase in the annual base rent amount shall be distributed equally among remaining payments following such increase. Tenant may request that Landlord, at Tenant's sole expense, challenge any increase of property tax on the Premises. It is not the intent of the parties that Tenant pay the property tax liability on the Premises for Landlord but rather that the annual base rent amount reflect any increase of property taxes on the Premises collected from Landlord. 7. TENANT'S DtJE DILIGENCE REVIEW OF AND ACCEPTANCE OF THE LEASE AND RELATED DOCUMENTS, AND OF THE PREMISES. Tenant has exercised due diligence in it's review of the Premises and the lease documents, and accepts same in reliance upon it's own review. Tenant has obtained independent legal counsel to review all documents related to this transaction, and has relied upon its own attorney. Tenant has had reasonable access to the Property, has reviewed the building plans for the Premises, and has had the Premises inspected and has accepted the inspection. 8. USE AND OCCUPANCY. Tenant shall use the Premises for office space, and any and all other business pertinent, related or necessary thereto. Tenant shall not use or occupy the Premises for any other purpose without the prior written consent of Landlord. 8.1 Tenant shall not use or occupy nor permit the leased property or any part thereof to be used or occupied for any unlawful business, use or purpose, not for any business, use or purpose COMMERCIAL LEASE AGREEMENT PAGE40F 16 ---PAGE BREAK--- deemed disreputable or extra-hazardous, nor for any purpose or in any manner which is in violation of any present or future governmental laws or regulations. Tenant shall after the discovery of any such unlawful, disreputable or extra-hazardous use take all necessary steps, legal and equitable, to complete the discontinuance of such use and to oust and remove any subtenants, occupants, or other person guilty of such unlawful, disreputable, or extra-hazardous use. Tenant shall indemnify Landlord against all costs, expenses, liabilities, losses, damages, if\iunction, suits, fines, penalties, claims, and demands, including reasonable counsel fees, with or without suit, arising out of any violation of or default in these covenants. 8.2 Tenant shall not use the leased property in a manner which shall invalidate or increase the rate of fire and extended coverage insurance on the building in addition to that in effect prior to this Lease without the prior written consent of Landlord. Tenant shall upon demand reimburse Landlord for any additional premium charged for such policy by reason of Tenant's use of such Premises, or by reason of Tenant's failure to comply with the provisions of this paragraph. 8.3 Tenant, at its sole expense, shall comply with all laws, orders and regulations of federal, state and municipal authorities and with any direction of any public officer, pursuant to law, which shall impose any duty upon Landlord or Tenant with respect to the leased property. Tenant, at its sole expense, shall obtain all licenses or permits which may be required for the conduct of its business within the terms of this Lease or for making of repairs, alterations, improvements, or additions, and Landlord, where necessary, will join with Tenant in applying for ail such permits or licenses. 9. ALTERATIONS. The parties recognize that Tenant wishes to make certain repairs and changes to the interior of the premises to accommodate Tenant's needs. Tenant shall be responsible for all costs and liabilities associated with the interior remodel of the Premises. 9.1 Ail remodeling and alterations must receive the prior written approval of Landlord, which approval shall not be unreasonably withheld. 9.2 Tenant shall have the right to begin remodeling the premises on December 1, 2007, unless permitted earlier by Landlord in writing. 9.3 Other than as provided above, Tenant shall make no alterations, additions or improvements to the Premises, other than customary decorating, without the prior written consent of Landlord which shall not be unreasonably withheld; however, Landlord may impose as a condition of consent such requirements as Landlord in its sole discretion may deem necessary or desirable, including, without limiting, the generality of the foregoing, requirements as to the manner in which such work shall be done and the right to approve the contractor selected by Tenant to perform such work. 9.4 All work with respect to any alterations, additions and changes must be done in a good and workmanlike manner and diligently pursued to completion. Any changes, alterations and improvements shall be performed and done strictly in accordance with laws and ordinances relating thereto. COMMERCIAL LEASE AGREEMENT PAGE 5 OF 16 ---PAGE BREAK--- 9.5 Before commencing any construction in or about the Premises, Tenant shall notify Landlord in writing of the expected date of commencement thereof. Landlord shall have the right at any time and from time to time to post and maintain on the Premises such notices as Landlord deems necessary to protect the Premises and Landlord from mechanics' liens, materialmens' liens and any other liens. 9.6 TENANT IMPROVEMENTS: Subject to obtaining Landlord's written consent for structural improvements (not to be umeasonably withheld and which consent has been given with respect to all items referred to on Exhibit Tenant, at its sole cost and expense, has the right, but not the obligation, prior to and during the Terrn to improve, alter and renovate the Premises in any manner which Tenant deems necessary or desirable to adapt the same for the conduct of its business operations, including, without limitation, painting, decorating, redecorating and installing partitions, floor coverings, wall coverings, drop ceilings, light fixtures and the work set forth on Exhibit under the caption "Tenant's Work". 10. MAINTENANCE BY LANDLORD. Landlord shall be responsible for the following maintenance of the real property leased to Tenant hereunder. Landlord shall maintain and keep in repair the foundation, lateral support, roof, walls, structural parts and all exterior parts of the Premises and of any Building in which the Premises are located, including exterior plumbing. 10.1 Landlord shall repair and maintain the building structure and common areas of the Building. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need for such repairs or maintenance is given to Landlord by Tenant. Except as provided in the Damage to Premises Section hereof, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements in the Premises or the Building, or to any portion thereof; provided, however, that in making such repairs, alterations or improvements Landlord shall interfere as little as reasonably practical with the conduct of Tenant's business in the Premises. 10.2 Landlord shall be solely responsible for the cost of any major repair and/or replacement of the building foundation, lateral support, roof, walls, structural parts and all exterior parts of the Premises and of any building in which the Premises is located, including exterior plumbing. Additionally, Landlord shall be solely responsible for the cost of any major repair and/or replacement of the interior plumbing, lighting and electrical systems within the Premises and plumbing, heating, and cooling equipment and fixtures therein. 11. MAINTENANCE BY TENAL'IIT. Tenant shall be responsible for all routine maintenance for the Premises leased to Tenant hereunder, including, but not limited to, the maintenance indicated herein. Tenant shall, at its sole cost and expense, repair and at all times conduct routine maintenance of the Premises, including the plumbing, lighting and electrical systems within the Premises, and the plumbing, heating and cooling equipment and the fixtures therein. Tenant shall reimburse Landlord for any and all minor repairs to the Premises or minor repairs to fixtures of the leased Premises or of the Building made necessary as a result of any misuse or neglect by Tenant or any of its officers, agents, employees, contractors,licensees, visitors, guests, clients, customers or invitees. If Tenant fails to make necessary repairs and/or maintain the COMMERCIAL LEASE AGREEMEST PAGE6 0F 16 ---PAGE BREAK--- Premises or any part thereof, Landlord shall have the right, upon reasonable written notice to Tenant, to make and perform such repairs or maintenance and charge the cost thereof to Tenant, which cost shall be payable in full upon demand, and failure to pay the cost thereof shall constitute a breach of this Lease as for non-payment of rent. 11.1 Tenant shall maintain and keep in good repair all glass (windows) and doors in Tenant's Premises. Tenant shall maintain and keep in good repair and condition any walkways, sidewalks and the parking lot, and shall keep the same free from debris, ice and snow, and any dangerous or hazardous conditions, and shall indemnify Landlord from any liability for same. 11.2 Tenant shall be responsible for any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, including repairs that would otherwise be the responsibility of Landlord. 12. COMPLIANCE WITH CODES. All repairs, alterations, additions or improvements made by Landlord or Tenant shall comply with applicable building or other codes. 13. TRADE FIXTURES. All articles of personal property and all detached trade fixtures, supplies, merchandise, furniture, and equipment owned by Tenant and installed in the Premises shall remain the property of Tenant. 14. TENANT'S SIGNS. Tenant may install its customary and usual display and business signs on and adjacent to the premises, subject to applicable zoning ordinances and restrictive covenants, and subject to the approval of Landlord. All signs located on the Premises shall be in good taste so as not to detract from the general appearance of the Premises or any building in which any part of the Premises are located. Upon the termination of this Lease Tenant shall remove all such signs and repair any damage to the leased property caused by the erection, maintenance or removal of such signs. 15. UTILITIES AND SERVICE. Landlord shall furnish services to the leased property, including but not limited to heat, water, sewer, garbage and power. Landlord shall not be liable for any failure of water supply or electric current or of any service by any utility. 15.1 During the Term, Tenant shall pay for all utility services consumed by Tenant upon the Premises and for any utility connection or hook-up fees, including, without limitation, gas and electricity, cable, sanitary and storm sewer, water, garbage and telephone services, and shall indemnify Landlord against any liability on such account. 15.2 Except where Landlord's act(s) cause such injury or damage, Landlord shall not be liable for injury to persons (including death) or damage to property resulting from steam, gas, electricity, water, rain, ice or snow which may t1ow or leak from any part of the Building, or from any pipes, appliances, or plumbing works, from the street or subsurface, or from any other place; or for the interference with light or other easements. 15.3 Landlord shall not be liable for any failure to furnish any services or utilities when the failure is caused by accidents, strikes, governmental action, shortages, or other conditions beyond COMMERCIAL LEASE AGREEMENT PAGE7 OF 16 ---PAGE BREAK--- Landlord's control. Such failure shall not constitute or be construed as a constructive or other eviction of Tenant and Tenant shall not be relieved of the obligation to pay the full rent reserved herein. 16. LIENS. Tenant shall keep the Premises and the Building free from any liens arising out of any work performed, materials furnished, or other obligations incurred by Tenant and agrees to defend, indemnify and hold Landlord harmless from and against any such lien, claim or action thereon, including costs of suit and reasonable attorneys fees incurred by Landlord, with or without suit, in connection with any such claim or actions. 17. ACCESS BY LANDLORD. Landlord, at all reasonable times and frequency, shall have the right to enter the Premises to examine the same, to show them to prospective purchasers, mortgagees, or lessees and to make such repairs, alterations, improvements or additions deemed necessary by Landlord, without the same constituting an eviction of Tenant in whole or in part. 17.1 Rent shall not abate while any repairs, alterations, improvements, or additions are being made provided that Landlord shall proceed expeditiously with the same and without unreasonable interference or interruption to Tenant's use of the Premises. 17.2 Landlord shall also have the right to enter on and/or pass through the Premises, or any part thereof, at such times as such entry shall be required by circumstances of emergency affecting the Premises or any other portion of the Building. 17.3 Landlord shall have the right to post customary signs on Landlord's property advertising the property for sale. Should Tenant be in default of this lease for more that thirty (30) days, Landlord may post a customary sign on the Premises advertising the property for lease, even if Landlord has not terminated this lease. 18. PAYMENT OF REAL PROPERTY TAXES- LANDLORD. Landlord shall pay all real property taxes lawfully levied against the Premises. 19. INSURiL"'CE. 19.1 PROPERTY INSURANCE: At all times during the Term, Tenant, at its sole cost and expense, shall cause the Premises to be fully and adequately insured with a customary policy of fire and extended coverage insurance (including flooding, vandalism, malicious mischief and special extended perils or all risk) in an amount not less than the full replacement cost of the Premises (currently four hundred fifty thousand dollars ($450,000]), with a standard inflation guard endorsement or, in the event the parties have agreed upon a fixed amount of insurance, with a fixed amount endorsement. 19.2 COMMERCIAL GENERAL LIABILITY INSURANCE: At all times during the Term, Tenant, at its sole cost, shall maintain in full force and effect liability coverage in the minimum amount required by State law through Tenant's current Idaho County Risk Management Program (!CRMP) policy, or its equivalent, and Tenant shall add the Building and Premises to the schedule of Tenant's properties covered by the ICRMP policy or its equivalent. COMMERCIAL LEASE AGREEMENT PAGE80F 16 ---PAGE BREAK--- In the event ICRMP will not provide such coverage, Tenant shall either provide such coverage from other insurance or Tenant shall pay to Landlord a fee for Landlord's provision of such insurance at the agreed upon amount. 19.3 EVIDENCE OF INSURA."JCE: Tenant shall, upon request, provide Landlord with adequate evidence of the continued existence of applicable insurance coverage which shall contain an agreement by the insurer that such insurance coverage shall not be modified or canceled without delivery of at least thirty (30) days' written notice to Landlord. 19.4 TENANT INVALIDATION: Tenant shall not do or permit anything to be done which invalidates any such insurance policies required by this Lease. 19.5 Tenant shall maintain insurance coverage on all of Tenant's improvements, equipment, furniture and fixtures, inventory, and other property of Tenant. 20. DAMAGE OR DESTRUCTION: 20.1 REPAIR AND RESTORATION: In the event that the Premises shall be damaged or destroyed by fire, or other casualty, Tenant shall deliver to Landlord notice thereof. If the damage or destruction resulted from risk required to be insured, this Lease shall remain in full force and effect, and Landlord, shall repair the damage or destruction and restore the Premises to substantially that condition existing immediately prior to such damage or destruction. If Tenant remains in occupancy of the Premises, Landlord shall exercise such repair and restoration efforts in a manner so as not to interfere unreasonably with the use and occupancy of the Premises by Tenant for the conduct of its business operations. Until the completion of Landlord's repair and restoration pursuant to this Section, Tenant's obligation to pay Rent and other amounts payable by Tenant hereunder shall abate as of the date of the damage or destruction in proportion to the extent that the value of the Premises for the use and occupancy thereof by Tenant for the conduct of its business operations shall be reduced. 20.2 In no event, except in the case of negligence, shall Landlord be liable to Tenant for any damage to the Premises or for any loss, damage or injury to any person or property of Tenant therein or thereon occasioned by bursting, rupture, leakage or overflow of any plumbing or other pipes (including without limitation, water, steam, refrigerant lines, sprinklers, tanks, drains, drinking fountains, toilets, sewers or wash stands) or other similar causes in, above, upon or about the Premises or the building in which the Premises are located. 21. El\IINENT DOMAIN- REPAIR AND RESTORATION: In the event that any portion of the Premises shall be taken or threatened to be taken under the power of eminent domain or settlement in lieu thereof for any public or quasi-public use, Landlord shall deliver to Tenant notice thereof. This Lease shall remain in full force and effect, and Landlord, at its sole cost and expense, shall repair the damage and restore the Premises so as to constitute the remaining portion thereof a complete architectural unit. If Tenant remains in occupancy of the Premises, Landlord shall exercise such repair and restoration efforts in a manner so as not to interfere unreasonably with the use and occupancy of the Premises by Tenant for the conduct of its business COMMERCIAL LEASE AGREEMENT PAGE90F 16 ---PAGE BREAK--- operations. Until the completion of Landlord's repair and restoration pursuant to this Section, Tenant's obligation to pay Rent and other amounts payable by Tenant hereunder shall abate as of the date on which possession of the Premises or portion thereof shall be required by the public or quasi­ public body in proportion to the extent that the value of the Premises for the use and occupancy thereof by Tenant for the conduct of its business operations shall be reduced. 22. FORCE MAJEURE. Neither party hereto shall be required to perform any term, condition, or covenant of this Lease during such time performance, after the exercise of due diligence to perform, is delayed or prevented by acts of God, civil riots, organized labor disputes, or governmental restrictions. Neither party shall be excused from performing any term, condition, or covenant of this Lease because of any act or omission of such party. 23. WAIVER. No covenant, term or condition or the breach thereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed, and any waiver of the breach of any covenant, term or condition shall not be deemed to be a waiver of any other covenant, term or condition. Acceptance by Landlord of any performance by Tenant after the time the same shall have become due shall not constitute a waiver by Landlord of the breach or default of any covenant, term or condition unless otherwise expressly agreed to by Landlord in writing. 24. W ARRAl"'TIES Al"'D REPRESENTATIONS BY LANDLORD. Landlord expressly warrants and represents to Tenant: Landlord has not covenanted or agreed with anyone to restrict the use of the Premises for Tenant's purposes; and, Landlord has the right to Lease the Premises to Tenant. 25. QUIET ENJOYMENT BY TENANT. Landlord covenants that if Tenant performs all the terms, conditions, and covenants of this Lease to be performed by Tenant, Tenant shall peaceably and quietly hold and enjoy the Premises for Tenant's purposes for the term hereof without hindrance or interruption by Landlord. 26. SUBORDINATION AND ATTORNMENT; ESTOPPEL: 26.1 TENAl"'T SUBORDINATE. Tenant covenants and agrees, on the Terms and conditions provided in this Section, that this Lease shall be subordinate to any institutional mortgage or deed of trust that now or hereafter shall encumber the Premises, provided that each mortgagee or beneficiary shall execute and deliver to Tenant a non-disturbance, attornment and subordination agreement stating (in addition to other reasonable Terms, if any) in substance that if Tenant is not in default hereunder, the right of possession of Tenant to the Premises shall not be affected or disturbed by any mortgagee in the exercise of any of its rights under a mortgage or the note secured thereby, and any sale of the Premises pursuant to the exercise of any rights and remedies under a mortgage or otherwise shall be made subject to Tenant's right of possession to the Premises under this Lease; and (ii) Tenant shall attorn to any mortgagee or purchaser at a foreclosure sale (a "Purchaser") upon acquisition of title to the Premises by a mortgagee or Purchaser and notice to Tenant thereof, and this Lease shall continue in full force and effect between Tenant and such mortgagee or Purchaser. Tenant covenants and agrees to attorn to such mortgagee or beneficiary upon foreclosure. COMMERCIAL LEASE AGREEMENT PAGE IOOF 16 ---PAGE BREAK--- 26.2 STATEMENT OF TERMS A.RD STATUS. Upon Landlord's written request, Tenant shall execute, acknowledge and deliver to Landlord a written statement certifying that none of the Terms or provisions of this Lease have been changed (or if they have been changed, stating how they have been changed), (ii) that this Lease has not been canceled or terminated; (iii) the last date of payment of the Rent and other charges and the time period of the Rent and other charges and the time period covered by such payment; (iv) that Landlord is not in default under this Lease (or, if Landlord is claimed to be in default, state why); and such other representations or information with respect to Tenant or the Lease as Landlord may reasonably request or which any prospective purchaser or encumbrancer of the Premises may reasonably require. Tenant shall deliver such statement to Landlord within twenty (20) days after Landlord's request. Landlord may give any such statement by Tenant to any prospective purchaser or encumbrancer of the Premises. Such purchaser or encumbrancer may rely conclusively upon such statement as true and correct. 26.3 In the event the Premises are sold by foreclosure or power of sale under a lien or mortgage of Landlord, Tenant, at the option and request of the purchaser shall attorn to the purchaser and recognize such purchaser as Landlord under this Lease provided that Tenant's rights hereunder shall be acknowledged and agreed to in writing by such purchaser. 27. SALE OF PREMISES BY LANDLORD. Any sale of the Premises by Landlord shall be subject to all rights of Tenant hereunder. Any sale shall also be subject to all rights of Tenant as Purchaser hereunder, if such occurs. 28. ASSIGNMENT A.SD SUBLEASING BY TENANT. Tenant shall not assign or sublet any part of tbe Premises or Tenant's rights hereunder without Landlord's prior written consent in each instance, which consent shall not be unreasonably withheld; provided that the business or occupation of the subtenant is not extra-hazardous, disreputable, or illegal, and provided further that Tenant shall remain primarily liable for the rent herein reserved and for the performance of all the other terms of this Lease required to be performed by Tenant. 29. TENANT'S DEFAULT; LA.RDLORD'S REMEDIES: 29.1 TENANT DEFAULT: Any of the following events shall constitute a default of this Lease by Tenant (a 'Tenant Default"): a. Failure of Tenant to pay any Rent or other amount payable by Tenant hereunder when due and such Tenant Default continues for fifteen (15) days after delivery of a written notice by Landlord to tenant; and b. Vacating or abandonment of all or a substantial part of the Premises. c. Failure of Tenant to comply with any provision of this Lease other than payment of rent, with such failure continuing for fifteen ( 15) days after delivery of a written notice by Landlord to Tenant specifying the nature of non-compliance by Tenant. However, if the nature of Tenant's default is such that it can not be reasonably cured within the time provided, Tenant shall not be in default if Tenant commences to cure the default within the time provided and thereafter diligently proceeds to cure such default within thirty (30) days. COMMERCIAL LEASE AGREEMENT PAGE II 0Fl6 ---PAGE BREAK--- d. The making of an assignment or general arrangement for the benefit of creditors by Tenant or any guarantor of Tenant's obligations under the Lease. e. The filing of a petition under the Federal Bankruptcy Act or any similar law or statute of the United States or any state thereof by Tenant or any guarantor of Tenant's obligations under this Lease. Or, the failure of the dismissal, within 90 days after the filing of any involuntary petition ob bankruptcy or insolvency against Tenant or guarantor of Tenant's obligations. f. The appointment of a receiver or trustee for all or substantially all the assets of Tenant or any guarantor of Tenant's obligations under this Lease. Such receivership shall not have been terminated or stayed within the time permitted by law. g. The attachment, execution or other judicial seizure of substantially all of Tenant's assets located in the Premises or of Tenant's interest in this Lease where such seizure is not discharged with thirty (30) days. 29.2 LAt"'DLORD'S REMEDIES: In the event of a Tenant Default, Landlord shall have the option to exercise one or more of the following rights and remedies: a. To terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord. If Tenants shall fail to do so, Landlord may enter upon the Premises without notice and again have, repossess and enjoy the same as if this Lease had not been made, and all Terms, conditions, covenants and obligations of this Lease on the part of Landlord to be performed shall cease and terminate, without prejudice, however, to the right of Landlord to recover from Tenant all Rent accrued hereunder as of the date of such entry by Landlord; and b. To relet the Premises for the remainder of the then existing Primary Term or Extension Term for the highest rent reasonably obtainable and to recover from Tenant any deficiency, as it accrues, between the amount so obtained and Rent payable by Tenant hereunder; provided, however, that Landlord shall be obligated in such event to exercise in good faith diligent efforts to mitigate its damages by reletting the Premises for the highest rent reasonably obtainable under the circumstances; c. Declare the entire amount of Rent past due as well as that which would have become due and payable during the remainder of the term of this Lease to be due and payable immediately. In this event Tenant shall pay to Landlord the same immediately and Landlord shall reimburse Tenant for any and all rental income Landlord receives from any new tenant(s) occupying the Building at any time prior to November 30, 2013. Acceptance by Landlord of the payment of such Rent shall not constitute a waiver of any then existing default occurring thereafter. d. To pursue all other rights and remedies to which Landlord may be entitled hereunder, at law or in equity, including specific performance of the Lease by Tenant. 30. NON-APPROPRIATION CLAUSE. Tenant intends to pay all rents and payments due and owing under this Lease, if funds are legally available. In the event that the funds are not Co_JMERCIAL LEASE AGREEMENT PAGEI20FI6 ---PAGE BREAK--- appropriated during the term of this Lease and there are no other funds by or with which payment can be made to Landlord, all obligations under this Lease shall be terminated. Under such conditions, obligations under this Lease shall be deemed terminated on the last day of the fiscal period for which appropriations were received by Tenant. Notwithstanding any other provision of this Lease, Tenant shall pay only six months of the base rent in the amount of twenty five thousand seven hundred twenty dollars ($25,720) as a penalty in case of non-appropriation. 31. LANDLORD'S DEFAULT; TENANT'S REMEDIES: In the event of any failure by Landlord to perform any Term, condition, covenant or obligation of this Lease on the part of Landlord to be performed within thirty (30) days after the date on which Landlord receives from Tenant notice specifically describing such failure, Tenant (in addition to all other remedies to which Tenant may be entitled under this or at law or in equity) may cure such default by Landlord on behalf of, and at the sole cost and expense of, Landlord. Landlord shall reimburse Tenant for its costs and expenses in connection therewith within thirty (30) days after Tenant's delivery to Landlord of an invoice therefor. The foregoing notwithstanding, if Landlord shall exercise in good faith diligent efforts within such thirty (30) day period to cure the failure specified in the notice but shall not be able to do so because of acts of God, riots, or labor strikes or other circumstances beyond reasonable control of Landlord, then any such failure shall not be considered a default of this Lease by Landlord so long as Landlord shall continue to exercise in good faith such diligent efforts to cure such failure and shall do so within a reasonable period of time. 32. RECORDING OF LEASE. Tenant shall not record this Lease without written consent of Landlord. 33. ENTIRE AGREEMENT. This Lease shall constitute the entire agreement of the parties hereto and any prior agreement between the parties relating to the Premises, whether written or oral, is merged herein and shall be of no separate force and effect and this Lease shall only be changed, modified, or discharged by agreement in writing signed by both parties hereto. 34. EXERCISE OF RIGHTS AND NOTICE. The exercise of any right or privilege by a party hereunder shall be made effective by the personal delivery or by the mailing of a written notice of such exercise to the other party unless a specific provision of this Lease provided otherwise. Such mailing or the mailing of any other notice required or permitted under this Lease shall be made by certified United States mail, postage prepaid, addressed to the other party at its address set forth herein or such other address of which notice has been given in writing, and shall be deemed delivered 48 hours after mailing 35. APPLICABLE LAW. This Lease shall be governed by. and constmed in accordance with the laws of the State of Idaho. If any provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease shall not be affected thereby and each provision of the Lease shall be valid and enforceable to the fullest extent permitted by law. 36. LAi'IDLORD'S NON-LIABILITY. It is understood and agreed that Landlord shall not be liable for any damage occasioned by the failure in the heating units. air conditioning or other equipment in the leased Premises arising through an accident to the pipes, heating units, air COMMERCIAL LEASE AGREEMENT PAGE 13 OF 16 ---PAGE BREAK--- conditioning system or other equipment, or for flooding or water damage of any kind, unless such damage is the result of Landlord's act(s). 36.1 Except where Landlord's act(s) cause such injury or damage, Landlord shall not be liable for liability or damage claims for injury to persons or property from any cause relating to the occupancy of the Premises by Tenant, including those arising out of damages or losses occurring on sidewalks, parking lots and other areas adjacent to the leased Premises during the term of this Lease or any extension thereof. Tenant shall indemnify Landlord from all liability, loss or other damage claims or obligations resulting from any irUuries or losses of this nature, except where Landlord's act(s) cause such injury or damage. 37. BENEFIT OF AGREEMENT. The terms, conditions, and covenants contained in this Lease shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, administrators, executors, representatives, successors and assigns. 38. ADDITIONAL REQUIREMENTS. The parties agree to obtain, execute, deliver, and file such additional documents, instruments, and consents as may be reasonably requested by either party, at the sole cost and expense of the requesting party, in order to fully effectuate the terms and conditions of this Lease. 39. SEVERABILITY. If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid, illegal, unenforceable or void, then the parties shall be relieved of all obligations arising under such provision, but only to the extent that such provision is invalid, illegal, unenforceable or void. If the remainder of this Agreement is capable of substantial performance, then each provision not so affected shall be enforced to the extent permitted by law. 40. REPRESENTATION BY ATTORNEY. It is understood and agreed by the parties hereto that this Lease Agreement is prepared by Robert M. Magyar, Attorney at Law, Moscow, Idaho; and that Robert M. Magyar represents Landlord herein. Tenant was represented by Randall D. Fife, City Attorney. 41. LANGUAGE. The parties agree that the language, terms, covenants, conditions and agreements contained in this Lease Agreement are the product of the negotiations of the parties. 42. INTERPRETATION. No provision of this Agreement is to be interpreted for or against any party because that party or its attorney drafted the provision. 43. HEADINGS. The headings in this Agreement are for reference only, and shall not in any way control the meaning or interpretation of this Agreement. 44. DISPUTE RESOLUTION: 44.1 GOOD FAITH. Except for a Tenant Default in the payment of any sums due hereunder, the parties shall attempt in good faith to resolve any controversy arising out of or relating to this Lease by negotiations between authorized representatives of the parties begun by written notice from one party to the other. COMMERCIAL LEASE AGREEMENT PAGE 140F 16 ---PAGE BREAK--- 44.2 MEDIATION. Prior to litigation being instituted by any party, and except for a Tenant Default in the payment of any sums due hereunder, if the controversy has not been resolved within thirty days of the date of written notice thereof under subsection 1, either party may initiate mediation of the controversy or claim in accordance with American Arbitration Association Real Estate Industry Mediation Rules. 45. EFFECTIVE DATE. Effective date hereof means the date that this agreement is dated immediately below and is the date on which it will take effect regardless of whether one or more of the parties hereto signed it before or after that date. I >r DATED this day of .LUV'\SV\ , 2007. LANDLORD: Magyar Investments, Inc., an Idaho Corporation. /V/4111 By: Robert M President Date: _ TENANT: City of Moscow, Idaho 1;7(1 p / ATTEST: STATE OF IDAHO ) : ss. County of Latah ) Address: Telephone: Facsimile: Address: Telephone: Facsimile: 106 Flint Street Moscow, Idaho 83843 (208) 882-1906 (208) 882-1908 P 0 Box 9203 _ _ _ _ _ _ _ _ Moscow, Idaho (208) 883-7000 (208) 883-7018 On this I 4-K-day ot£lgf=-2007, before me, the undersigned a Notary Public in and for said State, personally appeared ROBERT M. MAGYAR, President of Magyar Investments, Inc., an Idaho Corporation, known to me to be the person whose name is subscribed to the foregoing AGREEMENT and acknowledged to me that he executed the same on behalf of said corporation. COMMERCIAL LEASE AGREEMENT PAGE 15 OF 16 ---PAGE BREAK--- IN WITNESS WHEREOF, I have hereunto set my hand and notarial seal on the date last above written. COMMERCIAL LEASE AGREEMENT Notary PU lk in and for the ate of Idaho, residing at /J(M!!atrC , therein. Commission expires: !J :?af PAGE 160F 16