OFFICE LEASE
This lease, made and entered into at Portland, Oregon, this 18th day of
February, 1997 by and between
LANDLORD: SCHNITZER INVESTMENT CORPORATION
and
TENANT: SCHNITZER STEEL INDUSTRIES
Landlord hereby leases to Tenant the following:
commercial space totalling 4,655 square feet of office space (the Premises) in
3330 N.W. Yeon (the building) at Yeon Business Center, Portland, Oregon, for a
term commencing, March 1, 1997 and continuing through February 28, 2002 at a
Monthly Base Rental as follows:
$4,848.96
Rent is payable in advance on the 1st day of each month commencing, March 1,
1997.
Landlord and Tenant covenant and agree as follows:
1.1 Delivery of Possession.
Should Landlord be unable to deliver possession of the Premises on the
date fixed for the commencement of the term, commencement will be
deferred and Tenant shall owe no rent until notice from Landlord
tendering possession to Tenant. If possession is not so tendered within
90 days following commencement of the term, then Tenant may elect to
cancel this lease by notice to Landlord within 10 days following
expiration of the 90-day period. Landlord shall have no liability to
Tenant for delay in delivering possession, nor shall such delay extend
the term of this lease in any manner.
2.1 Rent Payment.
Tenant shall pay the Base Rent for the Premises and any additional rent
provided herein without deduction or offset. Rent for any partial month
during the lease term shall be prorated to reflect the number of days
during the month that Tenant occupies the Premises. Additional rent means
amounts determined under Section 19 of this lease and any other sums
payable by Tenant to Landlord under this lease. Rent not paid when due
shall bear interest at the rate of one-and-one-half percent per month
until paid. Landlord may at its option impose a late charge of $.05 for
each $1 of rent for rent payments made more than 10 days late in lieu of
interest for the first month of delinquency, without waiving any other
remedies available for default. Failure to impose a late charge shall not
be a waiver of Landlord's rights hereunder.
3.1 Lease Consideration.
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Upon execution of the lease Tenant has paid the Base Rent for the first
full month of the lease term for which rent is payable and in addition
has paid the sum of N/A -
as lease consideration. Landlord may apply the lease consideration to pay
the cost of performing any obligation which Tenant fails to perform
within the time required by this lease, but such application by Landlord
shall not be the exclusive remedy for Tenant's default. If the lease
consideration is applied by Landlord, Tenant shall on demand pay the sum
necessary to replenish the lease consideration to its original amount. To
the extent not applied by Landlord to cure defaults by Tenant, the lease
consideration shall be applied against the rent payable for the last
month of the term. The lease consideration shall not be refundable.
4. Use.
Tenant shall use the Premises as business offices for Human Resources,
Benefits and Payroll and for no other purpose without Landlord's written
consent. In connection with its use, Tenant shall at its expense promptly
comply with all applicable laws, ordinances, rules and regulations of any
public authority and shall not annoy, obstruct, or interfere with the
rights of other tenants of the Building. Tenant shall create no nuisance
nor allow any objectionable fumes, noise, or vibrations to be emitted
from the Premises. Tenant shall not conduct any activities that will
increase Landlord's insurance rates for any portion of the Building or
that will in any manner degrade or damage the reputation of the Building.
4. Equipment.
Tenant shall install in the Premises only such office equipment as is
customary for general office use and shall not overload the floors or
electrical circuits of the Premises or Building or alter the plumbing or
wiring of the Premises or Building. Landlord must approve in advance the
location of and manner of installing any wiring or electrical, heat
generating or communication equipment or exceptionally heavy articles.
All telecommunications equipment, conduit, cables and wiring and any
additional air conditioning required because of heat generating equipment
or special lighting installed by Tenant shall be installed and operated
at Tenant's expense.
4.3 Signs
No signs, awnings, antennas, or other apparatus shall be painted on or
attached to the Building or anything placed on any glass or woodwork of
the Premises or positioned so as to be visible from outside the Premises
without Landlord's written approval as to design, size, location, and
color. All signs installed by Tenant shall comply with Landiord's
standards for signs and all applicable codes and all signs and sign
hardware shall be removed upon termination of this lease with the sign
location restored to its former state unless Landlord elects to retain
all or any portion thereof.
5.1 Utilities and Services.
Landlord will furnish water, electricity and elevator service and, during
the normal Building hours of 8:00 AM to 6:00 PM, Monday through Friday,
except holidays, will furnish heat and air conditioning (if the Building
is air conditioned). Janitorial service will be provided in accordance
with the regular schedule of the Building, which schedule and service may
change from time to time. Tenant shall comply with all government laws or
regulations regarding the use or reduction of use of utilities on the
Premises. Interruption of services or utilities shall not be deemed an
eviction or disturbance of Tenant's use and possession of the Premises,
render Landlord liable to Tenant for damages, or relieve Tenant from
performance of Tenant's obligations under this lease. Landlord shall take
all reasonable steps to correct any interruptions in service. Electrical
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service furnished will be 110 volts unless different service already
exists in the Premises. Tenant shall provide its own surge protection for
power furnished to computers.
5.2 Extra Usage.
If Tenant uses excessive amounts of utilities or services of any kind
because of operation outside of normal Building hours, high demands from
office machinery and equipment, nonstandard lighting, or any other cause,
Landlord may impose a reasonable charge for supplying such extra
utilities or services, which charge shall be payable monthly by Tenant in
conjunction with rent payments. In case of dispute over any extra charge
under this paragraph, Landlord shall designate a qualified independent
engineer whose decision shall be conclusive on both parties. Landlord and
Tenant shall each pay one-half of the cost of such determination.
6.1 Maintenance and Repair.
Landlord shall have no liability for failure to perform required
maintenance and repair unless written notice of such maintenance or
repair is given by Tenant and Landlord fails to commence efforts to
remedy the problem in a reasonable time and manner. Landlord shall have
the right to erect scaffolding and other apparatus necessary for the
purpose of making repairs, and Landlord shall have no liability for
interference with Tenant's use because of repairs and installations.
Tenant shall have no claim against Landlord for any interruption or
reduction of services or interference with Tenant's occupancy, and no
such interruption or reduction shall be construed as a constructive or
other eviction of Tenant. Repair of damage caused by negligent or
intentional acts or breach of this lease by Tenant, its employees or
invitees shall be at Tenant's expense.
6.2 Alterations
Tenant shall not make any alterations, additions, or improvements to the
Premises, change the color of the interior, or install any wall or floor
covering without Landlord's prior written consent. Any such improvements,
alterations, wiring, cables or conduit installed by Tenant shall at once
become part of the Premises and belong to Landlord except for removable
machinery and unattached movable trade fixtures. Landlord may at its
option require that Tenant remove any improvements, alterations, wiring,
cables or conduit installed by Tenant and restore the Premises to the
original condition upon termination of this lease. Landlord shall have
the right to approve the contractor used by Tenant for any work in the
Premises, and to post notices of nonresponsibility in connection with
work being performed by Tenant in the Premises.
7.1 Indemnity.
Tenant shall not allow any liens to attach to the Building or Tenant's
interest in the Premises as a result of its activities. Tenant shall
indemnify and defend Landlord and its managing agents from any claim,
liability, damage, or loss occurring on the Premises, arising out of any
activity by Tenant, its agents, or invitees or resulting from Tenant's
failure to comply with any term of this lease. Neither Landlord nor its
managing agent shall have any liability to Tenant because of loss or
damage to Tenant's property or for death or bodily injury caused by the
acts or omissions of other Tenants of the Building, or by third parties
(including criminal acts).
7.2 Insurance.
Tenant shall carry liability insurance with limits of not less than One
Million Dollars ($1,000,000) combined single limit bodily injury and
property damage which insurance shall have an endorsement naming Landlord
and Landlord's managing agent, if any, as an additional insured and
covering the liability insured under paragraph 7.1 of this lease. Tenant
shall furnish a certificate evidencing such insurance which shall state
that the coverage shall not be cancelled or materially changed without 10
days advance notice to Landlord and Landlord's managing
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agent, if any. A renewal certificate shall be furnished at least 10 days
prior to expiration of any policy.
8.1 Fire or Casualty.
"Major Damage' means damage by fire or other casualty to the Building or
the Premises which causes the Premises or any substantial portion of the
Building to be unusable, or which will cost more than 25 percent of the
pre-damage value of the Building to repair, or which is not covered by
insurance. In case of Major Damage, Landlord may elect to terminate this
lease by notice in writing to Tenant within 30 days after such date. If
this lease is not terminated following Major Damage, or if damage occurs
which is not Major Damage, Landlord shall promptly restore the Premises
to the condition existing just prior to the damage. Tenant shall promptly
restore all damage to tenant improvements or alterations installed by
Tenant or pay the cost of such restoration to Landlord if Landlord elects
to do the restoration of such improvements. Rent shall be reduced from
the date of damage until the date restoration work being performed by
Landlord is substantially complete, with the reduction to be in
proportion to the area of the Premises not usable by Tenant.
8.2 Waiver of Subrogation.
Tenant shall be responsible for insuring its personal property and trade
fixtures located on the Premises and any alterations or tenant
improvements it has made to the Premises. Neither Landlord, its managing
agent nor Tenant shall be liable to the other for any loss or damage
caused by water damage, sprinkler leakage, or any of the risks that are
or could be covered by a standard all risk insurance policy with an
extended coverage endorsement, or for any business interruption, and
there shall be no subrogated claim by one party's insurance carrier
against the other party arising out of any such loss.
9.1 Eminent Domain.
If a condemning authority takes title by eminent domain or by agreement
in lieu thereof to the entire Building or a portion sufficient to render
the Premises unsuitable for Tenant's use, then either party may elect to
terminate this lease effective on the date that possession is taken by
the condemning authority. Rent shall be reduced for the remainder of the
term in an amount proportionate to the reduction in area of the Premises
caused by the taking. All condemnation proceeds shall belong to Landlord,
and Tenant shall have no claim against Landlord or the condemnation award
because of the taking.
10.1 Assignment & Subletting.
This lease shall bind and inure to the benefit of the parties, their
respective heirs, successors, and assigns, provided that Tenant shall not
assign its interest under this lease or sublet all or any portion of the
Premises without first obtaining Landlord's consent in writing. This
provision shall apply to all transfers by operation of law including but
not limited to mergers and changes in control of Tenant. No assignment
shall relieve Tenant of its obligation to pay rent or perform other
obligations required by this lease, and no consent to one assignment or
subletting shall be a consent to any further assignment or subletting.
Landlord shall not unreasonably withhold its consent to any assignment or
subletting provided the effective rental paid by the subtenant or
assignee is not less than the current scheduled rental rate of the
Building for comparable space and the proposed Tenant is compatible with
Landlord's normal standards for the Building. If Tenant proposes a
subletting or assignment to which Landlord is required to consent under
this paragraph, Landlord shall have the option of terminating this lease
and dealing directly with the proposed subtenant or assignee, or any
third party. If an assignment or subletting is permitted, any cash
profit, or the net value of any other consideration received by Tenant as
a result of such
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transaction shall be paid to Landlord promptly following its receipt by
Tenant. Tenant shall pay any costs incurred by Landlord in connection
with a request for assignment or subletting, including reasonable
attorneys' fees.
11.1 Default.
Any of the following shall constitute a default by Tenant under this
lease:
(a) Tenant's failure to pay rent or any other charge under this
lease within 10 days after it is due, or failure to comply with any other
term or condition within 20 days following written notice from Landlord
specifying the noncompliance. If such noncompliance cannot be cured
within the 20-day period, this provision shall be satisfied if Tenant
commences correction within such period and thereafter proceeds in good
faith and with reasonable diligence to effect compliance as soon as
possible. Time is of the essence of this lease.
(b) Tenant's insolvency, business failure or assignment for the
benefit of its creditors, Tenant's commencement of proceedings under any
provision of any bankruptcy or insolvency law or failure to obtain
dismissal of any petition filed against it under such laws within the
time required to answer; or the appointment of a receiver for Tenant's
properties.
(c) Assignment or subletting by Tenant in violation of paragraph 10.
1.
(d) Vacation or abandonment of the Premises without the written
consent of Landlord or failure to occupy the Premises within 20 days
after notice tendering possession.
11.2 Remedies for Default.
In case of default as described in paragraph 11.1 Landlord shall have the
right to the following remedies which are intended to be cumulative and
in addition to any other remedies provided under applicable law:
(a) Landlord may at its option terminate the lease by notice to
Tenant. With or without termination, Landlord may retake possession of
the Premises and may use or relet the Premises without accepting a
surrender or waiving the right to damages. Following such retaking of
possession, efforts by Landlord to relet the Premises shall be sufficient
if Landlord follows its usual procedures for finding tenants for the
space at rates not less than the current rates for other comparable space
in the Building. If Landlord has other vacant space in the Building,
prospective tenants may be placed in such other space without prejudice
to Landlord's claim to damages or loss of rentals from Tenant.
(b) Landlord may recover all damages caused by Tenant's default
which shall include an amount equal to rentals lost because of the
default, lease commissions paid for this lease, and the unamortized cost
of any tenant improvements installed by Landlord to meet Tenant's special
requirements. Landlord may xxx periodically to recover damages as they
occur throughout the lease term, and no action for accrued damages shall
bar a later action for damages subsequently accruing. Landlord may elect
in any one action to recover accrued damages plus damages attributable to
the remaining term of the lease. Such damages shall be measured by the
difference between the rent under this lease and the reasonable rental
value of the Premises for the remainder of the term, discounted to the
time of judgement at the prevailing interest rate on judgements.
(c) Landlord may make any payment or perform any obligation which
Tenant has failed to perform, in which case Landlord shall be entitled to
recover from Tenant upon demand all amounts so expended, plus interest
from the date of the expenditure at the rate of one-and-one-half percent
per month. Any such payment or performance by Landlord shall not waive
Tenant's default.
12.1 Surrender.
On expiration or early termination of this lease Tenant shall deliver all
keys to Landlord and surrender the Premises vacuumed, swept, and free of
debris and in the same condition as at the
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commencement of the term subject only to reasonable wear from ordinary
use. Tenant shall remove all of its furnishings and trade fixtures that
remain its property and restore all damage resulting from such removal.
Failure to remove shall be an abandonment of the property, and Landlord
may dispose of it in any manner without liability. If Tenant fails to
vacate the Premises when required, including failure to remove all its
personal property, Landlord may elect either: (i) to treat Tenant as a
tenant from month to month, subject to the provisions of this lease
except that rent shall be one-and-one-half times the total rent being
charged when the lease term expired; or (ii) to eject Tenant from the
Premises and recover damages caused by wrongful holdover.
13.1 Regulations.
Landlord shall have the right but shall not be obligated, to make, revise
and enforce regulations or policies consistent with this lease for the
purpose of promoting safety, health (including regulation or prohibition
of smoking), order, economy, cleanliness, and good service to all tenants
of the Building. All such regulations and policies shall be complied with
as if part of this lease.
14.1 Access.
During times other than normal Building hours Tenant's officers and
employees or those having business with Tenant may be required to
identify themselves or show passes in order to gain access to the
Building. Landlord shall have no liability for permitting or refusing to
permit access by anyone. Landlord shall have the right to enter upon the
Premises at any time by passkey or otherwise to determine Tenant's
compliance with this lease, to perform necessary services, maintenance
and repairs or alterations to the Building or the Premises, or to show
the Premises to any prospective tenant or purchasers. Except in case
emergency such entry shall be at such times and in such manner as to
minimize interference with the reasonable business use of the Premises by
Tenant.
14.2 Furniture and Bulky Articles.
Tenant shall move furniture and bulky articles in and out of the Building
or make independent use of the elevators only at times approved by
Landlord following at least 24 hours written notice to Landlord of the
intended move. Landlord will not unreasonably withhold its consent under
this paragraph.
15.1 Notices.
Notices between the parties relating to this lease shall be in writin,9,
effective when delivered, or if mailed, effective on the second day
following mailing, postage prepaid, to the address for ' the party stated
in this lease or to such other address as either party may specify by
notice to the other. Notice to Tenant may always be delivered to the
Premises. Rent shall be payable to Landlord at the same address and in
the same manner, but shall be considered paid only when received.
16.1 Subordination.
This lease shall be subject to and subordinate to any mortgages, deeds of
trust, or land sale contracts (hereafter collectively referred to as
encumbrances) now existing against the Building. At Landlord's option
this lease shall be subject and subordinate to any future encumbrance
hereafter placed against the Building (including the underlying land) or
any modifications of existing encumbrances, and Tenant shall execute such
documents as may reasonably be requested by Landlord or the holder of the
encumbrance to evidence this subordination.
16.2 Transfer of Building.
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If the Building is sold or otherwise transferred by Landlord or any
successor, Tenant shall attorn to the purchaser or transferee and
recognize it as the lessor under this lease, and, provided the purchaser
or transferee assumes all obligations hereunder, the transferor shall
have no further liability hereunder.
16.2 Estoppels
Either party will within 1 0 days after notice from the other execute,
acknowledge and deliver to the other party a certificate certifying
whether or not this lease has been modified and is in full force and
effect; whether there are any modifications or alleged breaches by the
other party; the dates to which rent has been paid in advance, and the
amount of any security deposit or prepaid rent; and any other facts that
may reasonably be requested. Failure to deliver the certificate within
the specified time shall be conclusive upon the party of whom the
certificate was requested that the lease is in full force and effect and
has not been modified except as may be represented by the party
requesting the certificate. If requested by the holder of any
encumbrance, or any ground lessor, Tenant will agree to give such holder
or lessor notice of and an opportunity to cure any default by Landlord
under this lease.
17.1 Attorneys' Fees.
In any litigation arising out of this lease, the prevailing party shall
be entitled to recover attorneys' fees at trial and on any appeal. If
Landlord incurs attorneys' fees because of a default by Tenant, Tenant
shall pay all such fees whether or not litigation is filed.
18.1 Quiet Enjoyment.
Landlord warrants that so long as Tenant complies with all terms of this
lease it shall be entitled to peaceable and undisturbed possession of the
Premises free from any eviction or disturbance by Landlord. Neither
Landlord not its managing agent shall have any liability to Tenant for
loss or damages arising out of the acts, including criminal acts, of
other tenants of the Building or third parties, nor any liability for any
reason which exceeds the value of its interest in the Building.
19.1 Additional Rent: Tax Adjustment.
Whenever for any July 1 - June 30 tax year the real property taxes levied
against the Building and its underlying land exceed those levied for the
1 996-1 997 tax year, then the monthly rental for the next' succeeding
calendar year shall be increased by one-twelfth of such tax increase
times Tenant's proportionate share. "Real property taxes" as used herein
means all taxes and assessments of any public authority against the
Building and the land on which it is located, the cost of contesting any
tax and any form of fee or charge imposed on Landlord as a direct
consequence of owning or leasing the Premises, including but not limited
to rent taxes, gross receipt taxes, leasing taxes, or any fee or charge
wholly or partially in lieu of or in substitution for ad valorem real
property taxes or assessments, whether now existing or hereafter enacted.
If any portion of the Building is occupied by a tax-exempt tenant so that
the Building has a partial tax exemption under ORS 307.1 12 or a similar
statute, then real property taxes shall mean taxes computed as if such
partial exemption did not exist. If a separate assessment or identifiable
tax increase arises because of improvements to the Premises, then Tenant
shall pay 100 percent of such increase.
19.2 Tenant's Proportionate Share.
"Tenant's proportionate share" as used herein means the area of the
Premises, divided by the total area of office space in the Building, with
area determined using one of the methods of building measurement defined
by the Building Owners and Managers Association (BOMA). Tenant's
proportionate share as of the lease commencement date shall be 27.5
percent.
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19.4 Additional Rent: Operating Expense Adjustment.
Tenant shall pay as additional rent its proportionate share, as defined
in paragraph 1 9.2, of the amount by which operating expenses for the
Building increase over those experienced by Landlord during the calendar
year 1 997 (base year). Effective January 1 of each year Landlord shall
estimate the amount by which operating expenses are expected to increase,
if any, over those incurred in the base year. Monthly rental for that
year shall be increased by one-twelfth of Tenant's share of the estimated
increase. Following the end of each calendar year, Landlord shall compute
the actual increase in operating expenses and xxxx Tenant for any
deficiency or credit Tenant with any excess collected. As used herein
"operating expenses" shall mean all costs of operating and maintaining
the Building as determined by standard real estate accounting practice,
including, but not limited to: all water and sewer charges; the cost of
natural gas and electricity provided to the Building; janitorial and
cleaning supplies and services; administration costs and management fees;
superintendent fees; security services, if any; insurance premiums;
licenses; permits for the operation and maintenance of the Building and
all of its component elements and mechanical systems; the annual
amortized capital improvement cost (amortized over such a period as
Landlord may select but not shorter than the period allowed under the
Internal Revenue Code and at a current market interest rate) for any
capital improvements to the Building required by any governmental
authority or those which have a reasonable probability of improving the
operating efficiency of the Building.
20.1 Complete Agreement.
This lease and the attached Exhibits and Schedules if any, constitute the
entire agreement of the parties and supersede all prior written and oral
agreements and representations. Neither Landlord nor Tenant is relying on
any representations other than those expressly set forth herein.
20.2 Space Leased as Is
Unless otherwise stated in this Lease, the Premises are leased as in the
condition now existing with no alterations or other work to be performed
by Landlord.
20.3 Captions.
The titles to the paragraphs of this lease are descriptive only and are
not intended to change or influence the meaning of any paragraph or to be
part of this lease.
20.4 Nonwaiver.
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Failure by Landlord to promptly enforce any regulation, remedy or right
of any kind under this Lease shall not constitute a waiver of the same
and such right or remedy may be asserted at any time after Landlord
becomes entitled to the benefit thereof notwithstanding delay in
enforcement.
20.5 Exhibits.
The following Exhibits are attached hereto and incorporated as a part of
this lease:
IN WITNESS WHEREOF, the duly authorized representatives of the parties have
executed this lease as of the day and the year first written above.
LANDLORD: SCHNITZER INVESTMENT CORP. By /s/ XXXXX X. XXXXXXXXX
----------------------
Address for notices:
X.X. Xxx 00000 Title: Vice President
------------------------- ------------------
Xxxxxxxx, XX 00000
-------------------------
TENANT: SCHNITZER STEEL INDUSTRIES By /s/ X.X. XXXXXXXXXX
----------------------
Address for notices:
X.X. Xxx 00000 Title:
------------------------- ------------------
Xxxxxxxx, XX 00000
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