1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 In re

The Hon. Paul B. Snyder Chapter 7 Federal Building 500 W. 12th Street, 2nd Floor Vancouver, Washington Hearing Date: October 1, 2013 Hearing Time: 9:00 am Response Date: September 24, 2013

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA

Case No. 13-43836-PBS Mark A. Leonard, Debtor. FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR COWLITZ BANKS REPLY TO DEBTORS RESPONSE TO OBJECTION TO DEBTORS CLAIM OF HOMESTEAD EXEMPTION

Comes now Federal Deposit Insurance Corporation as Receiver for Cowlitz Bank (Creditor) and hereby replies to Debtors Response to Objection to Debtors Claim of Homestead Exemption (Response) and states: 1. The Debtor cannot demonstrate actual good faith intent to support his

claim of homestead exemption in the commercial property located at 5225 Meeker Drive, Kalama, Washington 98625 (the Meeker Drive Property).

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805 SW Broadway, Ste. 1900 Portland, OR 97205 (503) 224-5560

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Id. ......
1

LEGAL STANDARD 2. In Washington, to declare a homestead in property that is not yet

occupied as a homestead, the property owner must execute and record a declaration establishing his or her intent to reside on the property in the future. Wilson v. Arkison (In re Wilson), 341 B.R. 21, 26 (9th Cir. BAP 2006); RCW 6.13.010(1), 6.13.040 (2) and (3). However, there [m]ust be in every such case a good-faith intent to occupy the premises as a homestead, and this intent must be shown by something more than by mere declarations. Traverso v. Cerini, 146 Wash. 273, 276, 263 P. 184, (1928) (emphasis added). 3. Whether the statutory requirements for establishing a homestead claim

have been satisfied is measured by the facts as they exist on the declaration is filed.1 Bank of Anacortes v. Cook, 10 Wn.App. 391, 397, 517 P.2d 633 (1974). Failure to comply with the statutory requirements renders the declaration of homestead invalid. Id. As stated by the Washington Court of Appeals: [L]ogic demands and public policy requires such a construction of the statutes so that a declaration of homestead is true on the date it is effective. If this were not so, little imagination is required to foresee the mischief and confusion that could be caused by the failure of claimants to be in compliance with residence requirements on the date of filing their declarations of homestead. The homestead declaration not only must speak from the date it is filed, but also it must speak the truth.

In the bankruptcy context, a debtors entitlement to claimed exemptions generally is determined as of the date of such debtors bankruptcy filing. Hopkins v. Cerchione (In re Cerchione), 414 B.R. 540, 548 (9th Cir.BAP 2009) (See also In re Snavely, 2010 WL 6259761, Slip Copy, (9th Cir. BAP April 21, 2010) and Harris v. Herman (In re Herman), 120 B.R. 127, 130 (9th Cir.BAP 1990) (stating Generally, only facts existing on the filing date are relevant to determining whether a debtor qualifies for her homestead exemption.). Page 2 of 6 FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR COWLITZ BANKS REPLY TO DEBTORS RESPONSE TO OBJECTION TO DEBTORS CLAIM OF HOMESTEAD EXEMPTION
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805 SW Broadway, Ste. 1900 Portland, OR 97205 (503) 224-5560

1 2 3 4 5 6 7 8 9 10 11 12 13 Id. 14 15 16 17 18 19 20 21 22 23 24 5. 4.

THE LEASE The Supreme Court of Washington has determined that in the case of

declaring a valid homestead during occupancy of the premises by a tenant, the owner must take steps to dispossess the tenant that will allow him or her to move upon the premises and use it as a home. Canadian Bank of Commerce v. Kellough, 142 Wash. 335, 337, 253 P. 124 (1927). In Canadian Bank of Commerce, the court determined that because the defendant did not take any action to obtain possession of the premises, his declaration of homestead had not been filed in good faith. The Court stated: True, he attempted to enter into possession and be physically thereon with intent to file his declaration, but, as we have already seen, he did this by subterfuge, and his action can hardly be characterized as being in good faith, and in so far as the court found that the declaration was filed in good faith, we must hold that this was error. It is apparent that the purpose of filing this declaration was to avoid the execution upon his property Like the defendant in Canadian Bank of Commerce, the Debtor was

leasing the Meeker Drive Property at the time he executed and recorded the Declaration of Homestead on April 26, 2013. 6. The lease was made to Tytan International, Inc. (Tytan), a subsidiary

owned by Tytan Holdings, Inc. (Holdings). The Debtor controls both Tytan and Holdings by virtue of his majority ownership in preferred stock of Holdings. The Debtor acts as the President of Tytan and the CEO of Holdings. 7. The lease, a copy of which is attached hereto as Exhibit E, is dated

July 6, 2008. It provides a term of seven years and monthly payments to Mark Leonard in the amount of $4,000.00 beginning July 6, 2008. 8. According to the OTC Pink Basic Disclosure Guidelines (OTC) that
BLACK HELTERLINE LLP

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

the Debtor, as CEO of Holdings, submitted to the United States Securities and Exchange Commission on June 27, 20132, the Meeker Drive Property is leased to Holdings, not Tytan. As stated in the OTC, the Meeker Drive Property acts as corporate headquarters, a retail dealership, inventory storage, service shop, parts department, shipping depot and showroom, not as a residence. 9. In order to support the homestead exemption in the Meeker Drive

Property, the Debtor states in his Response that Tytan is in default of the lease and that he now intends to cancel the lease and re-enter the property (subject, of course, to the Chapter 7 Trustees ownership of property of the estate). 10. According to Tytan Holdings, Incs Quarterly Report March 31, 2012

(Report), which was executed on May 15, 2012 by Mark Leonard, as CEO of Holdings, no rent had accrued under the Meeker Drive Property lease, making it questionable whether a default actually exists. A copy of the Report is attached hereto as Exhibit F, which refers to the lease under Note D on page. 9. 11. Because the validity of the Debtors Declaration of Homestead is

measured on the date it was filed, the Debtor cannot manufacture his good faith intent by attempting to obtain possession of the Meeker Drive Property now, over four months after he filed his Declaration of Homestead. See Bank of Anacortes, 10 Wn.App. at 397. In fact, until filing his Response, the Debtor has evidenced a completely contrary intent. Between the time of his claim of homestead and the filing of his bankruptcy, Tytan has defaulted under the lease by failing to make payments yet the Debtor continued to allow it to operate its business on the Meeker Drive Property.

24

Exhibit B, pp. 3-4 attached to the Objection to Homestead Exemption, filed as Dkt. No. 27.

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805 SW Broadway, Ste. 1900 Portland, OR 97205 (503) 224-5560

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
3
4

HIGHWAY COMMERCIAL DISTRICT ZONING OF PROPERTY 12. The Meeker Drive Property is zoned C-2, Highway Commercial

District, by the City of Kalama, Washington. A mixed use or multiple use building in the C-2 zone, such as could contain a residence, is considered a conditional use. Kalama, Washington, Code of Ordinances, Title 17, Zoning (Code), 17.60.020. 13. According to the Code, Section 17.48.010 allows nonconforming use

of a structure without a conditional use permit only if the use was in existence as of the effective date of the ordinance, which was 2007. See Kalama City Ordinance 1204. If any building or part thereof formerly used by a nonconforming use has been unoccupied or unused continuously for a period of at least one year, the building or part thereof shall not be reoccupied except by a conforming use. Code, 17.48.030. 14. Through his own admission under penalty of perjury, the Debtor

claimed the property located at 160 Horseshoe Bend Estates, Kelso, Washington as his residence in August 2010.3 15. Thus, in order to legally consider the Meeker Street property as a

mixed or multiple use building and have his residence there, the Debtor needed to obtain a conditional use permit. Code, 17.54.010- 17.54.090.4 16. As discussed supra, good faith intent is measured at the time the

Debtor recorded the Declaration of Homestead. Bank of Anacortes, 10 Wn.App. at 397. At the time the Debtor recorded the Declaration, any present or future residence at the Meeker Drive Property was illegal without a conditional use permit.

Exhibit A, p. 1 attached to Creditors Objection to Exemption filed as Dkt. No. 27. The Debtors statement in the Response that he been assured by Mr. Matt Herman, who is in fact a Kalama City Planner, not a Cowlitz County Commissioner, that his residency is not contrary to any zoning ordinance is hearsay and should be given no weight in this proceeding. BLACK HELTERLINE LLP

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

17.

Unlawful use of the Meeker Drive Property does not comport with the

statutory requirement of good faith intent to make a dwelling a residence. It is not the purpose of the homestead exemption to enable one to escape just liabilities or to perpetrate a fraud or injustice. See Clark v. Davis, 37 Wash.2d 850, 852 (1951). DATED this 26th day of September, 2013. BLACK HELTERLINE LLP

By:

/s/ Britta E. Warren

Ronald T. Adams, WSBA No. 36013 rta@bhlaw.com Britta E. Warren, WSBA No. 43329 bew@bhlaw.com Fax: (503) 224-6148 Of Attorneys for Federal Deposit Insurance Corporation as Receiver for Cowlitz Bank

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1 2 3 4 5 6 7 8 9 10 11 12
And upon:

CERTIFICATE OF SERVICE
I hereby certify that I served a true and correct copy of the foregoing FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR COWLITZ BANKS REPLY TO DEBTORS RESPONSE TO OBJECTION TO DEBTORS CLAIM OF HOMESTEAD EXEMPTION upon: Mark A. Leonard PO Box 1249 Kalama, WA 98625 Debtor GMAC Mortgage, LLC ATTN: Bankruptcy Department 1100 Virginia Dr. Fort Washington, PA 19034 Special Notice Request McCarthy & Holthus, LLP 19735 10th Ave. NE, Ste. N200 Poulsbo, WA 98370 Special Notice Request GE Capital Retail Bank c/o Recovery Management Systems Corporation 25 SE 2nd Avenue, Suite 1120 Miami, FL 33131-1605 Special Notice Request

by mailing a true copy thereof in a sealed, first-class postage prepaid envelope, to said addresses as shown above and deposited in the United States Mail at Portland, Oregon on the date set forth below.

13 14 15 16 17 18 19 20 21 22 23 24 CERTIFICATE OF SERVICE
745579

Russell D. Garrett russ.garrett@jordanramis.com Chapter 7 Trustee US Trustees Office USTPREGION18.SE.ECT@usdoj.gov US Trustee

Robert C. Brungardt evelyn638@yahoo.com Debtors Attorney

by electronic notification via the Courts ECF system.

DATED this 26th day of September, 2013.

BLACK HELTERLINE LLP

By:

/s/ Britta E. Warren Ronald T. Adams, WSBA No. 36013 rta@bhlaw.com Britta E. Warren, WSBA No. 43329 bew@bhlaw.com Fax: (503) 224-6148 Of Attorneys for Federal Deposit Insurance Corporation as Receiver for Cowlitz Bank

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805 SW Broadway, Ste. 1900 Portland, OR 97205 (503) 224-5560

TYTA~ LEASF:

THIS LEASt maue this __ 6Ih __ Jay of __ J) tall rnt~.InrUi(}nallJ.LL __ /\ ! .I:omu'd, lessor, and ,\ ITNESSETfI:
I.

. Jl,lb

_ __.
_
__

2008,
... <1..,$

hCtWl.'(:\1

\1ark

..__.

Lcs:'l\.'e.

does hcreb) Cowlitz. State of Washington.

LEASE OF PRF\-JlSES. T 11.: r.~SSOI' dues hereby It:ase to lessee. and Lc~.stt I.;asc from Lessor. thosl:: certain Premise~ situate in the City of Kalama. Count., of
described as follows: Parcel if. 315105 or T2H are
!O

)225 I\lccker Drive.

Kalama \VA 986::'5

.;.
conducting

therein __

fRSI'\'ESS Pl 'BrOSt:'. 1he Premises T\-l31LTracror Busi~

be us~d for the purpose of .________ and g.eneral withheld

business activities with the \Hillen COllselH of l.esSllr. which ~haU not be unrca.'i,mabl) and for no other busines~ or purpose. without thl: written consent o( Lessor.

(7} y t: a r s U11d 1lJ.b::-.., :l008, and I:nd on the 30th. day of .-Jl.uK _, 2il1.2.-. indusiyc. SLAhjt:ctto extl'nsion or rc-cilll.:tion thcn;uC dependent upon delivery of possession ofthc Premises as prmided in Section 13 of this Lea..<;:.:. 7erj)
0_

3.

TER".

The t.~rnl oflhis Lease shedl be f()I' __ ..._.. (0) months, [md 3hall commence on the full day 01'

.s~~

4. R.,ETI. Lessee covenanls and agrl'cs to pay the Lessor as rental it)r ~Hid Premises the amnllnts stipulated hereinafh.:r. Any rent or other amounts due and ~l)abk. thm remain unpaid fh-e (5) days 1~)lIowing it~ due date. shall hear <.l late c:jf).rg~~ of fivc percent (511F~) of stich unpaid amount to ClWl:r Landlord's additional uJministratiyc costs resulting ['rom Lcss,cc's tJilur~_ Such iaLt: pnym<:nt d\urgc shall be paid to I .-,:ss,or \"itll such unpaid mnounts. (a) The monthh rt:ntal shall be as fi.,llnws:
l'OT

Th", rcntul dne

illl.\i);(XJOQlh;

the first ll.'ar of the 1L';-}seshall bl:' hHlr Tbj)~ DQ\lac~ ,d()l1ars (S,LOOO) per lllonth. COIT!I':'1Cncing ju 1\' 6Jh
1hm

2008 __ (b)

Lessee c\pl'ri~l1l'eS hilrdship in paying r(~nts. l.essor rescncs the right to delay or postpone rental paymcHls. In the event such an agreement is made. the entire halanee shull bc' due and payable prior to

:. In ilil..' cvcm

5.
authorit)

COlllpktion of this Lease. TAXES_ L6sec shall pay all propcrt)

ta,xl'S,

If any lime during the lerm of:k ! vn':>f..'. (111)federal. slale. <:Ollnty or city huYing jurisdicliiJI1 ass~~scs a ta.\, ft.'c. excise ta:\.. bu,;;incss m,d occupation tr~X on rems

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Exhibit E

which is k\ jed on Lessor, or any other tit\" or fee on rcnls hO\\"('\cr categorized. shall be paid as additional rent, except thar no under 00 circllmstances shall] .essec he requin:d to PflY any stnh: or r..:deml income tax Il f"L,"ssor. or any inheritance t;'1Xt'S of L(~ssor.

6. RErAIH~. Lessee sh;llJ t(l~e good can: ofthc Premises and. ut I.C'iscc':, cost anJ C':xp~ns.;. sfwl1 maKe all repairs and n:plac..::mcnls, slrucLUml and olhcmise. as and \vhen I.essor
deems necc~~ury to presern: the Pr<::mis~~ in good working order and condition, cx;:ept that Lessee shall not be required to make any such struclural r,,-pairs Of structural r.:::plac~m('nts, l:nJcss nel:i;'ssitated or occasioned by the acts, omissions or negligcncl.: of '.c~st,,~ or any person daiming throug.h or lwd.:r Lessee. or uny of ,heir SCT\UnIS, {'mployecs. corllradors. ag .. nts, \ jsitors or liccnsees. or by the LJ~C or (}ccupancy or manner or usc or occupam'y of the Premises by Lessee or any Stich p~Tson, Lessor shall not be responsible for any jnjur) to or jn1t"rl~rcnce wilh Lessec'5 business arising from al1~ repairs, mainlcnunec. ull<o:ratloll or improvt:l1H.'nl ;n m to any ponhlll of the huilding. or thl: Premises, or in or to the fixtur~s, apPul1enanccs and c4uipment therein, fhl' Lessee shall pl.:l1l1it no person.'S to enter upon the roar of the building nor pCD11it the ir.stallmioll of any amcmw. aerial \)l" air conditioning \)1' other ..:quipm.:nt on or through tht:' roof the building, without the \\Tittcn permission of the Lcs,;or first obtained. Lessor .shall mainrain all building S) siems in \\orking condition.

or

7. Sf'HVICES -1:\1) (IIIJ.lTIJ;:.S. No temporary int~nLlplion or failure of any such senic~ or utility incident to the making of rcpuir~. alterations, or imprmcnwnts or due to acdtkm or strike or other condition reasonahl) beyond Lessor's control shall Ix- deemed an eviction of f .t:ssor or relieve Lessee from any of its ohligations hercunder,

8.
of 1.cssee. damages

ACCn)E;~TS.
\\'ith Ih~ exception

All personal propt:rty on said leased Premises

previously notcd regarding

shall be at the risk

agrees to ddcnd and hold T.essor and Ll'ssor\

sulkrcd corporation.

ne{.ligencc or miscondw.:l. Lessc.,; agent halmless from at1~ and all ci(lims for

or aileg~d to be sum~red in or ahout the k-ascd Premises

by any person, linn

01"

9. CARE OF PRl~MISES. less(~t: ba~ C'xamincd the Pn:miscs and. suhject to such alterations as may hI; spu:ifically ~t fl.lI1.h herein, acc~pls them in their pn.'sent condition and will at all times k~p and maintain the Pren,ise(; n;,:at, ckan and in a sanimry condition. At ,he tcm1ination oftbis L..:ase. the properTY shaH be left in dean and llSClibk condition.

OCCCPA 'CY. L..:ssec "hill! pay aU utilities and property rnninlcnam:e costs. Lcss~e CO\'CIUHllS to and it is thl:' CSSl.:l1ce 01" this Lease that r.t:S$<.~c shall c(Jnlinuously and unint.:rrupteJly during \h .. h.'1l11 01 this Lease occuP:-' and use tht: Pn:mist.'s ror the purpose:,; h~rt:in spe":lticd and renl<lin open during business hours cadI UU). c.;(:~pt whik lh~: Preni;jl;s are prohihited fj"om being c:nll:n:d by rcason or fire Dr other daJnage.

10,

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Exhibit E

11. pcrfonm.'d.

UEj\"S A:S1> t\SOLVENCY.

Lessee shall Kl:ep the kasl.:d Premises

and the

property in which the ll:.bl'd Pn.:rnises are situatd free from any Ikm arising out of <ln~ \\ mk l11at\:rials furn:sbcd or ubligations incurred by J .esse:c. 111 the evem Lcsst.'c becomes inso!n:nl. volumaril~ or involuntari!) bankrupt. t)r is judit:iaHy c(c'clan;,J incompetent. or if a receiver. assignee or other liquidating nlliL'cr is appointed for the husincss ol"the Lessee. then the Lessor TTlay eanccl this Le,tse at Lessor's opti(lil. 12. ;\SSICi'ij\!1ENT. Ll,.':;~':c may not nssign this Lease OJ' suhJel the Prcmi,;(':-. or any part thereof without the prior \YriTt~n appnnal of Lessor. 1\ hieh shall 1I0l ~, unrc~lsonably withheld. Should r .essor once approve an a5;si~lmlel1t or st;bictting. Lessor .:,hall not be barred from thercafter refusing to consent 1<) any Otl1('f (;ls.'>ignment or slIbkuing. I .cssor ~htlll be entilkd
to any rel1l under such m.signmtnt ur subletting in excess of th~ rent payable at the time ot'

Lessor's consent

\0 ~Uf.:hsublening

or assignment undt~r paragraph 4 abo\'~.

J 3. ACCESS. Lessee wi jJ aliow Lessor or Lc:ssor's agellls free access at ali reasonable tim~s to suid Premises for the purpose of inspection or of making repairs. additions or alterations 10 the Prcmisc~ or any property O\"lled by or under the control of Lessor, providing it does not aller the space si/.!,; or materialJ: al1'cct Li.'ssee's ability to conduct their busin;::ss

operations.

as per Fxhibit

"i\",

This right shall not be construed

the Lessor to make any repairs. all of such repairs w Lt:ssor shall have the right to place and maintain "For Rent" signs in Premist's.

as an agreement on th" part of be made by the Lc"see us a111rcsaid. Tho:

<:l

conspicuous place

011

said

14. POSS}:SSION. If the Lessor shall deli\'cr possession of th", Premises to the 1.6see prior to the commencement Jale of this Lease. T.cssee agrees to accept sume at such time and hoth Lessor and Lesst'i;' agree to be hound hy all of rhl' proyisiollS and obligations hereunder during such prior pt'riod. except that no rental shall he payable for su<.:h prior period. IS. UAMAGE OR IlESTRt:CIIO:\. In th;; C\cnt the Pn:misc<; arc damaged to such an extenl as 10 render the same untenantable in whok or in a substantial part thereof or me
destroyed,

it shall be optional with the lessor to repair or rebuild the same,

the ('wnlthe building in "hidllll\.' Premises ht:reby leased is damaged to th~ extent or twenty-five (25%\J percellt or mon:: of its markct \olu.:' iml1lcoialdy prior to such dflnHtg\.~. then it shall bl: option<lI \\ jth the: I.e:,sor to terminate this Lease by \Hiw:n noti<.:c SC!'\ .. 'J on the l.essee within lIilldy (90) days after sucb darnagt:. \.1<ukd "aIm: shaH he detennincd at the Lc.':'>sor's ~\;pellse by an appraisal conducted by un appraiser selected by Lessor.
16. S('UROGATlO;S WAIVER. 'I he Lessor :1nd lhe l.essee. respectfully. contract and re1case any right ofrecov.::ry againsl each other or against an) <.:O-tcmmt of till: samt:'

rn

to wa;\e

Premises f()r any loss \vhich could be insured against in the standard fin: poli~y 101m of the Slate
of Washington.

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Exhibit E

17.

~OIICES.

/\11)'

nOlic.:: rcqttircd to be

sl'f\t;:d

in acwrdance

w!rh the lcrm~ or

this l.ease shall be s~nt by maiL the uotie:: from tbe I.css~c 10 he sent 10 the Lessor or Lessor's agent:;. wxl the nnlicl.' li'om the Lessor to be Sent to Lessee at thc' l.::ascd Premist:s. Lessor's address: \lark Leonard

PC, Bux 1249 Kalamn. \VA 9R615

I.cssee's

address:

J~J4nJnt\;;rnmjorwl 1m; 5::;5 \leckrr nrj\.~

Kalama. \VA

986li_

lknb.Qlls,'.:.L3..6..Q).61l1278
18. GOVERNMENTAl. FEES. All [eo=:;paynble 10 the City. Count) or Stale during Iii';;: of' this Lease shflll be paid by Le;;s~::: 1'01' the business conducted by lessee on said und for any of Lessee's pcrsonai
propt'rty

Ihl:

property

maintained

lhereon.

19. SIGNS All si!lns, marquees. or symbols placed on the Premises. or UjX\11 any of the h~a~ed property shall be subject to the appro\ al d' \h~ T.~ssm. Any sign fixtures or marquci.:s so placed on the Premists shall be so placed with the understanding and agrc~mcnt that the Lessee \\ ill nol rerml\e samt: at the t~m)ination of

the tcmmc~.

20. \LTER.\IIONS. l.essee shaH not ma\.;e any alterations, additions or impr(m:m .... ms in SHiel Pn:mi~e~ \\ !Ihou; lill' I:on:,.. ('nt or Lc.:::;:-;0r ill "riling. lir~t had and obtained. and all alterations, auditions and impro\l:mCnlS which shall \x; made. shall he al the sole cost and c:xp-.-nsc of Lcssc,:. and shall occome the property of th" L...::ssor. and shall remain Oil and be surrendered with the Pr\?mises m; a PUl1 thereof t~1 Ihe termination of [hb Lease, without
disturhance. molestation or injury. If the I.c.SSCC shaH perform "ork Lessor. as afoi'\;'&"'lid. Lessec- agree:: to ct1mply \\ith ail laws, ordinances. the County of Cowlitz or any other authorized 21. public authority. If with the cons(-m of the rlIf.es and r-eguiatinns \)1'

IU:FALL'I ANI> HIWNTBY,

,my

relH~ abo\'c

r~~scf\'ed. or ~m) pan [hereof

shall remain unpaid \\ht:T Ih~ same $ha11 beo'lm: d\lc. or !r I esse\: shall violate or deHltlh in ilny of the covenants and agreements her::in contained. thi:ll the Lessor mllY c<lm:d this 1.c<:sc upon giving the Lessee thirty (30) day s wnllen 1101 ice and reemcr said Premises.

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Exhibit E

n COSTS ANn ATToRrsrys' fEES. ! rC:.lSUll an~ default on the part of the: l,cSSL'c or in the- eYellt th(lt an\' m;tion. suit. or other proceeding is instituted concerning or arising from this Lease. the pre\'ailing party shall rcl;'O\..:r aU of such part)'~ costs. and attol'lley:; fees incurred in each and every such ,Klion. ;;ui\. or other proceeding. including all) and all appeals or petitions therefrom from th~ non-prevailing pany. As used herein. Attorneys fi:es sl1,ti I rm:an tlll: fun and adual costs of any legal st:n'k~'s unuall) n::ndl.'rcd in conncc:ion \\ith the maner:-- involved, calculated on the basis of the usual fce charg~d by the aftorneys ~rtorming
such services. Any such action shall be
C(Hillf\l::nced

r oy

or

and maintained

in Cowlitz

County.

\\ushington. r~garJless 23.

pcrfi.mmmce

or Lcsste's

rc:;id;;m'~ or pla~,,' of business. The lllilmc of the Lcs:"or to insist upon strict and agrcCIlli:llls of this I.easc. or to ext'n;is~ any option

~QN.WAJVER

Of BREACH.

of any of the covenants

herein confc:rrc.d ill anyone or more inslam;..:s, shall not be construtd to be a "ai\cr or relinquishment of a:1) such. or any Ot!lcr. cC'\enanh or ;',gn:ell1~ms. hill the same shall be and remain in full force and dfcct. 24. RE:\lOVAI. OF pROpERTY. 1n the of. the leased Premises as aforesuld_ the 1...:sSOI' s!1all remove !"nnn the leased Premi<.;C's personal property any place selected by Lessor. including but not limited ~\'ent of any emr)' in. Of taking possession have the right. but not the obligation. to located therein. and may store the same in Lo it public \\J.n::hou:;c. at tll;.:: expense and

an

risk of the owners thereo~. with the right to sell such stored propel1.y. without notice to Lessee. after it has been stored for a period or thin) (30) Jays or more. the proceeds of such sale h) be appJi~d first to tl1'.: cost of such sale. second to the JXlymel11 of the charg;;:'>for storage, if ;In)'. and third to the paymenl of any oth~r sums of moue) which mti) then bl:: due from Lessee to Lessor
under any or the terms hereor. the balance, it any. to be paid to Lessee. 25. HEIRS A~D SrCCESSORS. Subject to the pro\isions hereof pertaining 10 a.. <;signmcnt <Iud subletting, th~~con~mmts and agre<;m<.~nh oj' lhs Lea"e shall he binding upon the heirs. legal representati\'t~:;. successors . md assigns of any or all ofthc' puniC's hcrt:\o.

26. HOl.DOVER. lC Ll)e Lessee shall. \\ith the wririen consent of Lessor. holdmcr after the expiration of the term of thisl ,case. such tenancy shall be 011 a month 10 month tenancy. \\ hieh tenancy may be t..:nninalL'd as pw\idcd bv thL' la\\ os of" tho; Statl: of \Vashington. During such tcnanc) L(;ss~c agrcl;s to pay to the Lessor rent. im.:rcas.;:d by ten (1 O~(o) from tbe rent due immediatel) prim to the e'<pimtio!1 of rh~ I.ea~ and to be hound by all of the terms. covenant:.,
and conditions as h~rcin sp..::-cificd.. so
t~r

as upplicabk.

i .l''>SCC

ngl\;'CS tbaT

at the cxpirntion

01'

emlicr termination of this L.~<1SI;', Lcss~'(' will quit and surrender the s,~id Premises without noti<:c from Lessor. and in a neat and clean conditioll. and will ddiwr lip all keys belonging to said
Premise;;, to the Le~sc)J' or Lessor's agents. -\ny hoJdm c1' \\ ilhoUl the l.e%or's writh:n consent 5h~dl constitute a JdtlUlt hy I,;;'ssec and entilk I ,L:SSO( to rc:-clltcr th.:- Prcmi. cs in accordall~(' \\ith thi~ Lease.

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Exhibit E

CQ'\iIlE"lj';ATlON. In the event any parI of the properly ill \\ hieh the ka~('d PrciJ1i~es .:m' contained is taken by PU!1!iC authority. then the I esso!' may cancel this Lt'3"C upon sixty {60) d"yS' \\Tincn notic~ to the L\.'"ssce.
28. COMM()~ TE:SANC), if the Premises leased herein includes any part ('If the building in common usc b:- other t~n(Jnt:;of th\~ ~mc building. then J.es">t'<:~ft':;:S to conform to all l't:'asonable rules and rt'gulutions that may he c.HlopteJ Ii)- the Lessor peJ1aining to such porLol1s of the building in commDn USL'

27.

19.

LESSOR A;\U LESSEE I)EFINED.

ill

The \\ ords "Lessor" and "lessee" shall he

construed

conformiry \\ith the nurnb.:1' and

nattlt'C

of LesSQr and L~ssc.;:herein, and tbis Lca~c

:o.hall billd and inure to the b,-'ndit~ of the succ,'ssors in imercst of both pani~i>. 30, TIME Of TilE ESSE):jCE.
Tjm~ is bct'c,by d~clarcd to be or the t.'s~cnc:t' or of Rn} brc~ch of an} condition
OJ' covenant

{'ach and e',cry provision

he-reof; and no wai\'cr

mall

v;aive. any such condition or covenant or future hn.'~ach thereof. or this ('ov('nant as to timC'.

31 01 .\~LlD~q..QLtliglnrtl&"'..I,;}.).)S.I.)'. '\-:ith:r party, nor its ofl'iccrs. directors. Cmplll) ccs. c:!gcr:t<; or invitees. 11\.1f. in c~se of lesset'. its suhlen~mtso sh~,J1be liable to the other party or to any in:;uram;e compan) (by \\ay or subrog(ltiull or othcl\\'isel insuring th(' otht.:r pat1y i{)f an)- Joss Of Janmg .. 10 any building. :;(Tutlurc or other tangible propeny normally covered under an all risk policy of property insurance or under worker's compensation insur\.lnce ..:\~n thoug.h such loss or
damage might ha\';; been t1cca-;loned by th~ IH:gligcm:1: of slich party. Its ag.ents or employees.

:.J.2
Polic~ expense.

eli.b.!id.Ji1\)jli1~Jnsu.mm:_;;.

L~ssce shall compensate

I.cs~or for Insurance

The Insuranc,: Policy .,hnl1 maintail) at all tl',)CS durini'! the term of this Lt:u<;e. pubtil: liability i1":)urancc in respect to t.he Premisl."; and Ih\.' conduct ,)r opi.:rt'ltion of nusint':.;s lh>;:l'I':in, witb L~~$sor.its u.')S(;! manager and prop<.'Tty managc'!'. if any. and any sup.:-rior Lessor or superior \'hmgaf.c:e . d10-,,,' lIarm: lind addl't's:; shall p'<.'\i{)us!> h.t\l' been !llrtli"hcu to I (;SSl.:C. a., additional insureds. \\ilh One Million and :\0/100 (5 LOOO.OOO,OCJ) minimum combined singh:limil l'O\:=ngi.'. or its cqui\ ,l!(;nl. 3\.3 Acceptable Insumncc .cQll.ij~, All insurance po!icit:$ rcqllired to be cafli~d by 1.eS.~et' I1cl'C"llnd{'[ shell he" issued by responsibll." insurance companies aut hori7ed to is~u~ illsurancein the ~tatt: of \VashinglOn r<",Hc(\ B Vll Dr higher hy lk:>t's Tnsurun(:(: Ruting S,'nicc, 31 A llli.:rca~.lli.C0\1'Hl~. L l,.'ssor may lioom time to tirni..'. but not more freqllr.ntIy than Ol1l,.T"vcr) t[lfCC: d) years. require that th~ anl'Jum of public liabilil> Ill:,uram.:t: to bt: nUHlluinu.i by J es"",'c under St:L:li()1l 3~02 be inCt\;<;t~('O so that Ih.: anw{/nl \hcrt:of udcquu\d," protects tl1<: L..:ssor's inh:rcsl based 011 amOllnl~ (11' cowrage H.''1l/ired oj" comparab!,~ kssl,.'("s ill compar::lbk

buitdlng~o
31.5 Indl:mlliJiqltlllll [Pll1ps:ml1l.l.u). L~'s:;t' agre.-" lD c()mp .. n~at;; 1.. ... ,: ..',('1" j~1r Prop .:rty lllsunmce Policy that saves Lessol' harmless from al\~ find all loss, cost. liability,

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Exhibit E

damage

and expe;:nse including. wilhout limitation, penal1i~s, fines and reas.onahle attorney fc('s. incuIT-cd in conm:ction with or ari:iing Ji'om any cauS(: ',\hatsoc\cr in, on or about the Premises. including. without limiting the generality of the foregoing (a) an) dd"'<.lUlt by I.essee in the ob,-;er.ancc or performance of any of the terms. covenants or conditioll:.. of thi:,> LeaSt.:: on l.essee's part to be observed or pc6mm:d, or (b) the use or occupancy or manner of usc 01' occupancy (If the Premises h: L::ssce or any person claiming througb or under Lessee. or II,;) thc condition the Premises or an} occuccncc or l1app(.:ning on the PrcnJiscs :rom all! cUU:>C \\hab~)C\Cr: or (d) any aC1:" omissions or negligence of Lessee or any person chiming through or under I..C:-;:-;CC, or of The contractors, agents, servants, employees, \'is1tor5 or license('s of Lessee or any :mch person, in, on or about the Pn.:rnisc:" or lht: buiklin~, cittH.'l" prior to. during. or ark!" the expiration

or

of, tbe tem1 of this Ll~asc, including without limitation,

(tlly acb, ombsiol1~ or n~gligenee in the making or pcrl~)fning of an:- alteration. Lessee further agrcc5 to indemnif) and save harmless l.essor. l.essor's agents. the I,essor or Lessors UndtT all ground or underlying leases. from and against an) and loss. cost. liabilit), damage and 0."pense int:luding. without limitation, reosonable attorney fees. incurred in connection with or ariging from an; claim::'> by any p.;rsons

an

,no

hy reason of injury w persons or dam(\ge to property occasioned by any us.:. occupancy. condition. occurrence. h,"PPt":ning. tKl. ornlssion, or negligence Tcfencd to in the preceding sentence. Lessor shall not be responsible lor or liable to L\.'ssc'c for arty loss or dmnage that may
be ol:casiom:d b~ or through the acts ur omissions of ~rsons occupying adjoining Premises or any part of the: Prcmi:-c:, ;.wja.eentto or connected \\ ith lhe Premis;;s or any purt of the building or for any loss or damage resulting to Lessee or its property froll! burst stopped or leaking \\ater. gus. sewer or steam pipes or ii'om any damage or loss ol'propeny \\ithin the Premises from any causes whatsoC\CL includmg then. J 1.6 E~Ci\..illlQ. F.x~::!.. If Lessee sball dd1mlt in the perfmmunce or its obligations under this Lease, L6S0f, at any lime thereafter and withom notice, may remedy such ddttu1L !()f Le:'isee's account and at Lessee's expense. \\ithOl\I thereby waiving any other rights or remedies

of lessor with r~3pecl to ~.uchdefault. 32, S17BORDINATION. Without till' nel'es$it~ oj' <ln~ additional dOl'U1m:nt being cxc(.'l1lcd by Lessee for the purpose of cllceting. U :iub,l!'dinu,ioll. l\:ssc<.: agrees that thi:-; l.eusl;' shall be subject and sLlbtmlinate at ali tim.;.'s 10 (3} all ground lctbi:S or undel'l) illg lease::; that my no\\ t:XiSl or hereallcr he execukd al1hting the building or the real prop . ~rty or both. and (b) the l \co of any mortgage or d~('d of trust that may now exist or hereafter eXC'i:ull'd in any UIllOUIH 1('If
which the building or fe'al prOperl). ground It'ascs or underlying leases. or 1.essor's intc:rest
ill

any

of said items is spedficd as s(~cllrity: prmidl:d that the mortgages or beneficiaries named in said lllortgages or deeds of tnbl shall agree to recognize tbt:: interest of Lessee under this Lease in the C\cm of foreclosure, if L~ss.::c is not then in ddault. Notwithstanding the foregoing. Lessor shali have tlR' right to suborJinatc or cause LO ht suhordinated alLY sueh ground ku;:;(' or undcrlyjng
leases or any such liens lO this f XtlSC:. In the (;\>"'nt that any ground kase or underlying lc"asc terminates for an.y 1'1::[tson or any mortgage or deed of trust is foreclosed or a convcyanc~ in lieu or rorech)sure is made for any reason. Le:-;scc shalL not,,,ithstanding. uny subordination of any ground leUf:C, undl'rl) ing lease or lien to thi~, Ll,;t\~:,<:, <llturn 10 <lw.l b,:<:ome th,;: Les".:e of thl:: successor in interest to Lessor at the option such successor ill interest. Lessee co,ellants and

or

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Exhibit E

agrees to execute and ddiwl', upon demand b~ L~ssor and in lhe l~lrm reqw.:'slcd b) LCSSUJ, allY additional documents. inc,uding ,illY cSloppel ccni ticalC:; as rnay hi.: n:quired. c\ idcnci ng the priority or subordination of this Lease "iIh respt:1.:t t\) an~ such ~round l..:ascs or unckdy iIlg

lc[lse~ or the lien Premises

(If

<l))Y such

mUl1g;;g('

or d~(;d

(If

trust no\\

or hereafter

e:x.isting on the

3"3. E"VIRO:'i;Vl ["'TAl. CUVE:'!,):'iT ,:Sf) 1'\ m.' disposc of or olhcr\\i~c: ~110\-\ lil\:' release of any hazurdow;

"I:') rr)',
\Hlste

L,:sSCI?

sbll

not

or materials

in. on or

under the Prcmi:',('s. or any adj~cell\ prupeny. or in any improvements placed on Ihe Pr.:-miscs, Lc;;scc reprt'~cnt:; and \\liTants to [t:<,SOr. lhat lessee":'; lllK'!1d~d u<,t: \)1' the

Premises does not ir.volw thi: u..<;e. production.

any hazardous includes any waste or muterials,
SUbSlallCC, \\ usl~ Or

disposal or bringing on
tile h:nH "hazardous

10

the Premises of

As used herdn.

waste or mat~1 ials" rn,neria\ dcfillCd or dC5ignmcd as hazardous, toxic or induding. but not lillliLcJ to. lJ'ke C()lTlpreh~llsi\c

dangerous
orJinancc

(01'

any similar term) by MY fcdt.~nll. SHIh:.' of locai statute. reguh:ttiol1. ruk or

in dIcet.

IIOW or hereafter

bwironmemal Response. Compensation and Liabilit) Act. -1-2U.s.c. ~Cl" 9601 d.l'.J04. and tl\(,~:vfodt;:\ To.xics Comro] Act. RCW 70. I 050. Lessee shall promptly comply with all swtut~s, regululiom ,md ordinam:~s. and \,nll all orders. decrees or jLidgmcnh 01'
go\'Crrunenwl authllrities or \.:ourls ha\ing jwisdiction, relating to the tb(" colkctinn. tremment. disposal, storage, cumro!. r":1110\'al or ckunup of h,vardous \\ast<~ or mUl~riuls in. on or umkr, lhe Premisc::i or any adjacent property. or incorporated in any imprmCrni:'HS, at Ll'SSCl"S e:xpcnsc, Ailer notice to Lessee ana n reasonable 0PPoIiunity for Lessee to effect such compliance. Lessor may. but is not obligat~d to, enter upon the Pr('mis~s and take such action:. and incur ~ul:h cO:-;ls and t:"pcnses to ",mX\ such compliance as it deems ad\'isahle to protect its interest in the .Premises. 'A hethel' or not

Ll::s~ee has actual kno\\ lcd!.cof the rele;~$e of ha7ardou<; waste or ma.teria!s on the Premises ll!' . my th.ijaccnt pr,)pcny ilS the result of l,~ssel:"s use of Jlt: Premises, Lesset' shail
reimburse l.essor for the full amount of aH l~OSlS and IH:ti':ities. and such ohligmion shall t'\lnliuue eH:n ult.:r the h:'rmin;l1ion of this l.~i.lse. Le'''scc' shall notJ'y 1.('ssor inmll'diJtc1~ of any rckase of any hazmdous wastl,.~ or mal~ri..ib on tl:o.: Premises. 34. OPTlO~ TO RE:"EW L\:'sS('o;: shall h'-1\<': one ortion to renew this U'as(,' for a Fi\l,: }tar period (5i for lour Ihousand li\\.: hundred &. noilOO I,S4SU(lj per month. :\otici.: to Ren~'\\- this leas!" must b..: I1wde in writing. 90 days prior 10 the lennination of this lease.

J .cs;scc agrees to indemni(y <lnd hold hannlcss lxssor ~gajnst ilny und all h)sscs, liabilities. suits. ohligalinns, line:;. clw.ltugc:>. judg.nwnts, penalties. claims. churges. ckun-up COSIl1. remedial aclion5. CO$l$ and cxpcnsc~ (including. \\llhoLlt limitation. consultants' fecs, attorneys' fees and disPU'sl,.'mcl1ts) thai may he imposed on. incurred or p,lid b;.. or as-.;crtl:d ag.ainst Lessor or the Prcmbcs by rc.lscn oC (11'in connection ,.ith (i) any mi5fcprcsentution. breach of \\nrnmt~ or other ddinI1t h) It:~set: under this L"U5~ or l i i) the octs or omissions 01' L\Js$-:c. VI' any Sublessee or other p-:r.~'.m i\)1' who L(,;~s<.:.;;"'(>wld othc~\'ise he liahle. l"CS,.l!tint! in l!w n:ka~c orany h;uarJoLis \\i1ste (lr materia!~,

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Exhibit E

11\ Wll:--'ESS WlILRi:.Ol. above written.

1.ESSOR: \1nrk A Leonard

the parti~s hereto haYC' executed this Lcusc the day lind

~e;lr

iirsl

LESSEE:
l~lUn Inkrnn\iollal Inc

",
B Y; . Personal
,.. ,.r'"

_
)

,>','_:_

lTS:

,," ~ t'. \:...

-l~l~:;.Z.~.~~:: ... ;~~--

I.

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Exhibit E

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Exhibit F

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Exhibit F

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Exhibit F

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Exhibit F

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Exhibit F

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Exhibit F

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Exhibit F

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Exhibit F

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Exhibit F

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